Document:

EXHIBIT 10.3

    LEASE

     

    THIS
      LEASE (this “Lease”) is made as of March 26, 2007, by and between Cole
      CL
      St. Croix USVI, LLC, a Delaware limited liability company
      (“Lessor”), and CULUSVI, Inc. d/b/a Cost-U-Less, a U.S. Virgin Islands
      corporation (“Lessee”).

     

    W
      I T N E S S E T H:

     

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

     

    1. Certain
      Defined Terms.
      The
      following terms shall have the following meanings for all purposes of this
      Lease:

     

    “ADA”
means
      the Americans with Disabilities Act of 1990, as such act may be amended from
      time to time.

     

    “Additional
      Rental”
has
      the
      meaning set forth in Section 4C.

     

    “Adjustment
      Date”
means
      the first day of the month following the month in which the fifth (5th)
      anniversary of the Effective Date occurs, and every fifth (5th)
      anniversary of the Effective Date thereafter during the Lease Term (including
      the extension period(s) if Lessee exercises its option pursuant to Section
      26).

     

    “Affiliate”
means
      any Person which directly or indirectly controls, is under common control with,
      or 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 18 U.S.C. § § 1956 and 1957,
      and the BSA.

     

    “Applicable
      Regulations”
means
      all applicable statutes, regulations, rules, ordinances, codes, licenses,
      permits, orders and approvals of each Governmental Authority having jurisdiction
      over the Premises, including, without limitation, all health, building, fire,
      safety and other codes, ordinances and requirements, all applicable standards
      of
      the National Board of Fire Underwriters and the ADA and all policies or rules
      of
      common law, in each case, as amended, and any judicial or administrative
      interpretation thereof, including any judicial order, consent, decree or
      judgment applicable to Lessee or Guarantor.

     

    “Base
      Annual Rental”
means
      $512,000.00.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    “BSA”
means
      the Bank Secrecy Act (31 U.S.C. § § 5311 et. seq.), as
      amended.

     

    “Business
      Day”
means
      a
      day on which banks located in St. Croix, U.S. Virgin Islands are not required
      or
      authorized to remain closed.

     

    “Change
      of Control”
means
      a
      change in control of Lessee, including, without limitation, a change in control
      resulting from direct or indirect transfers of voting stock or partnership,
      membership or other ownership interests, whether in one or a series of
      transactions. For purposes of this definition, “control” means the possession,
      directly or indirectly, of the power to direct or cause the direction of the
      management and policies of Lessee, and a Change of Control will occur if any
      of
      the following occurs: (i) any merger or consolidation by Lessee, with or into
      any other entity, which is not controlled by Guarantor; or (ii) if any “Person”
as defined in Section 3(a)(9) of the Securities and Exchange Act of 1934, as
      amended (the “Exchange Act”), and as used in Section 13(d) and 14(d) thereof,
      including a “group” as defined in Section 13(d) of the Exchange Act, other than
      Guarantor or any entity controlled by Guarantor, becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), of securities of Lessee,
      representing 50% or more of the combined voting power of Lessee’s then
      outstanding securities (other than indirectly as a result of the redemption
      by
      Lessee, of its securities).

     

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

     

    “Default
      Rate”
means
      8% per annum or the highest rate permitted by law, whichever is
      less.

     

    “Effective
      Date”
means
      the date on which COE (as such term is defined in the Purchase Agreement) occurs
      pursuant to the Purchase Agreement.

     

    “Entity”
means
      any entity that is not a natural person.

     

    “Environmental
      Condition”
means
      any condition with respect to soil, surface waters, groundwaters, land, stream
      sediments, surface or subsurface strata, ambient air and any environmental
      medium comprising or surrounding the Premises, whether or not discovered, which
      would reasonably be expected to or does result in any damage, loss, cost,
      expense, claim, demand, order or liability to or against Lessee, Guarantor
      or
      Lessor by any third party (including, without limitation, any Governmental
      Authority), including, without limitation, any condition resulting from the
      operation of business at the Premises and/or the operation of the business
      of
      any other property owner or operator in the vicinity of the Premises and/or
      any
      activity or operation formerly conducted by any person or entity on or off
      the
      Premises. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Environmental
      Laws”
means
      any present and future federal, state and local laws, statutes, ordinances,
      rules, regulations, orders, injunctions and decrees of Governmental Authorities
      and common law, relating to Hazardous Materials and/or the protection of human
      health or the environment by reason of a Release or a Threatened Release of
      Hazardous Materials or relating to liability for or costs of Remediation or
      prevention of Releases. “Environmental Laws” includes, but is not limited to,
      the following statutes, as amended, any successor thereto, and any regulations,
      rulings, orders or decrees promulgated pursuant thereto, and any state or local
      statutes, ordinances, rules, regulations, orders, injunctions and decrees of
      Governmental Authorities, if and to the extent they are applicable in the U.S.
      Virgin Islands: the Comprehensive Environmental Response, Compensation and
      Liability Act, 42 U.S.C. §§ 9601 et seq.; the Emergency Planning and
      Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; the Hazardous
      Materials Transportation Act, 49 U.S.C. § 5101 et seq.; the Resource
      Conservation and Recovery Act (including but not limited to Subtitle I relating
      to underground storage tank systems), 42 U.S.C. §§ 6901 et seq.;
      the Clean Water Act, 33 U.S.C. §§ 1251 et seq.; the Clean Air Act,
      42 U.S.C. §§ 7401 et seq.; the Toxic Substances Control Act, 15
      U.S.C. § 2601 et seq.; the Safe Drinking Water Act, 42 U.S.C.
§§ 7401 et seq.; the Occupational Safety and Health Act, 29 U.S.C.
§ 651 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act,
      7 U.S.C. §§ 136 et seq.; the Endangered Species Act, 16 U.S.C.
§§ 1531 et seq. and the National Environmental Policy Act, 42 U.S.C.
§ 4321 et seq. “Environmental Laws” also includes, but is not limited
      to, any present and future federal, state and local laws, statutes, ordinances,
      rules, regulations, orders, injunctions and decrees of Governmental Authorities
      and common law, if and to the extent they are applicable in the U.S. Virgin
      Islands: conditioning transfer of property upon a negative declaration or other
      approval of a Governmental Authority of the environmental condition of the
      property; requiring notification or disclosure of Releases or other
      environmental condition of the Premises to any Governmental Authority or other
      person or entity, whether or not in connection with transfer of title to or
      interest in property; imposing conditions or requirements relating to Hazardous
      Materials in connection with permits or other authorizations required by
      Governmental Authorities; relating to the handling and disposal of Hazardous
      Materials; relating to nuisance, trespass or other causes of action related
      to
      Hazardous Materials; and relating to wrongful death, personal injury, or
      property or other damage in connection with the physical condition or use of
      the
      Premises by reason of the presence of Hazardous Materials in, on, under or
      above
      the Premises.

     

    “Environmental
      Liens”
means
      all liens and other encumbrances imposed pursuant to any Environmental
      Law.

     

    “Event
      of Default”
has
      the
      meaning set forth in Section 21.

     

    “GAAP”
means
      generally accepted accounting principles consistently applied.

     

    “Governmental
      Authority”
means
      any governmental authority, agency, department, commission, bureau, board,
      instrumentality, court or quasi-governmental 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    authority
      having jurisdiction or supervisory or regulatory authority over the Premises,
      Lessee or Guarantor (solely with respect to the Premises).

     

    “Guarantor”
means
      Cost-U-Less, Inc., a Washington corporation.

     

    “Guaranty”
means
      that certain unconditional guaranty of payment and performance dated as of
      the
      date of this Lease executed by Guarantor for the benefit of Lessor with respect
      to this Lease, as the same may be amended from time to time.

     

    “Hazardous
      Materials”
means
      (a) any toxic substance or hazardous waste, substance, solid waste or
      related material, or any pollutant or contaminant; (b) radon gas, asbestos
      in any form which is or could become friable, urea formaldehyde foam insulation,
      transformers or other equipment containing dielectric fluid having levels of
      polychlorinated biphenyls in excess of applicable standards established by
      any
      Governmental Authority, any petroleum product or additive, any petroleum-based
      substances or any similar terms described or defined in any Environmental Laws
      applicable to or regulating below or above ground tanks and associated piping
      systems used in connection with the storage, dispensing and general use of
      petroleum and petroleum-based substances, or any Toxic Mold; (c) any
      substance, gas, material or chemical which is now or hereafter defined as or
      included in the definition of “hazardous substances,” “toxic substances,”
“hazardous materials,” “hazardous wastes,” “regulated substances” or words of
      similar import under any Environmental Laws; and (d) any other chemical,
      material, gas or substance the exposure to or release of which is prohibited,
      limited or regulated by any Governmental Authority that asserts or may assert
      jurisdiction over the Premises or the operations or activity at the Premises,
      or
      any chemical, material, gas or substance that does or is reasonably likely
      to
      pose a hazard to the health and/or safety of the occupants of the Premises
      or
      the owners and/or occupants of property adjacent to or surrounding the
      Premises.

     

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

     

    “Lease
      Term”
has
      the
      meaning set forth in Section 3.

     

    “Lease
      Year”
means
      the 12-month period commencing on the first day of the calendar year or any
      other 12-month period as may be approved in writing by Lessor after the
      commencement of the Lease Term and each successive 12-month period
      thereafter.

     

    “Lender”
has
      the
      meaning set forth in Section 8.

     

    “Lessee
      Indemnified Parties”
means
      Lessee and Lessee’s directors, officers, shareholders, partners, members,
      employees, agents, servants, representatives, lenders, contractors,
      subcontractors, affiliates, subsidiaries, participants, successors and assigns
      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    of
      any
      and all of the foregoing, including, but not limited to, any successors by
      merger, consolidation or acquisition of all or a substantial portion of Lessee’s
      assets and business.

     

    “Lessor
      Entities”
means,
      collectively, Lessor and any Affiliate of Lessor.

     

    “Losses”
means
      any and all claims, suits, liabilities (including, without limitation, strict
      liabilities), actions, proceedings, obligations, debts, damages, losses, costs,
      expenses, diminutions in value, fines, penalties, charges, fees, expenses,
      judgments, awards, amounts paid in settlement and damages of whatever kind
      or
      nature (including, without limitation, reasonable attorneys’ fees, court costs
      and other costs of defense).

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (i) the Premises, including, without limitation,
      the
      operation of the Premises as a Permitted Concept, or (ii) Lessee’s ability to
      perform its obligations under this Lease.

     

    “OFAC
      Laws and Regulations” means,
      if
      and to the extent applicable to the Premises and Lessee, Executive Order 13224
      issued by the President of the United States of America, the Terrorism Sanctions
      Regulations (Title 31 Part 595 of the U.S. Code of Federal Regulations), the
      Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the
      U.S.
      Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions
      Regulations (Title 31 Part 597 of the U.S. Code of Federal Regulations), and
      the
      Cuban Assets Control Regulations (Title 31 Part 515 of the U.S. Code of Federal
      Regulations), 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
      United States Department of the Treasury Office of Foreign Assets Control)
      addressing, relating to, or attempting to eliminate, terrorist acts and acts
      of
      war, each as hereafter supplemented, amended or modified from time to time,
      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. 

     

    “Permitted
      Amounts”
means,
      with respect to any given level of Hazardous Materials, that level or quantity
      of Hazardous Materials in any form or combination of forms the presence, use,
      storage, release or handling of which does not constitute a violation of any
      Environmental Laws and is customarily employed in the ordinary course of, or
      associated with, similar businesses located in the U.S. Virgin
      Islands.

     

    “Permitted
      Concept”
means
      a
      Cost-U-Less wholesale/retail warehouse club and pharmacy.

     

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

     

    “Personal
      Property”
means
      all tangible personal property now or at any time hereafter located on or at
      the
      Premises or used in connection therewith, including, without limitation, all
      machinery, appliances, furniture, HVAC and other equipment, 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    walk-in
      coolers, walk-in freezers, generators, trade fixtures and inventory, all of
      which constitute Lessee’s property, provided, however, the term “Personal
      Property” shall not include supply fans, exhaust fans, air ducts, hoods, vents,
      built-in sinks, built-in countertops, plumbing and electrical fixtures, sign
      poles and lighting poles, all of which items are intended to be fixtures as
      such
      term is used within the definition of “Premises.”

     

    “Premises”
means
      the parcel or parcels of real estate legally described in Exhibit A
      attached
      hereto, all rights, privileges and appurtenances associated therewith, and
      all
      buildings, fixtures and other improvements now or hereafter located thereon
      (whether or not affixed to such real estate), excluding the Personal
      Property.

     

    “Purchase
      Agreement”
means
      that certain Purchase Agreement and Escrow Instructions dated as of December
      21,
      2006 between Series B, LLC, an Arizona limited liability company, and Guarantor
      with respect to the Premises, as amended to date. 

     

    “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.

     

    “Remediation”
means
      any response, remedial, removal, or corrective action, any activity to clean
      up,
      detoxify, decontaminate, contain or otherwise remediate any Hazardous Materials
      required by any Environmental Law or any Governmental Authority, any actions
      to
      prevent, cure or mitigate any Release, any action to comply with any
      Environmental Laws or with any permits issued pursuant thereto, any inspection,
      investigation, study, monitoring, assessment, audit, sampling and testing,
      laboratory or other analysis, or any evaluation relating to any Hazardous
      Materials, including, without limitation, all acts necessary to clean and
      disinfect any portions of the Premises affected by Toxic Mold and to eliminate
      the sources of Toxic Mold in or on the Premises, including, without limitation,
      providing any necessary moisture and control systems at the
      Premises.

     

    “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 Premises which may result from such
      Release.

     

    “Toxic
      Mold”
means
      any toxic mold or fungus of a type which would pose a risk to human health
      or
      the environment or would negatively impact the value of the
      Premises.

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    2. Demise
      of Premises; Lease Characterization. 

     

    A.
      In
      consideration of the rentals and other sums to be paid by Lessee and of the
      other terms, covenants and conditions on Lessee’s part to be kept and performed,
      Lessor hereby leases to Lessee, and Lessee hereby takes and hires, the
      Premises.

     

    B. Lessor
      and Lessee intend that: (i) this Lease is a “true lease” and 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 landlord and tenant and has been
      entered into by both parties in reliance upon the economic and legal bargains
      contained herein. Lessor and Lessee acknowledge and agree that the Lease Term,
      including any term extensions provided for in this Lease, is less than the
      remaining economic life of the Premises. Each of Lessor and Lessee waives any
      claim or defense based upon the characterization of this Lease as anything
      other
      than a true lease and irrevocably waives any claim or defense which asserts
      that
      this Lease is anything other than a true lease. Each of Lessor and Lessee
      covenants and agrees that it will not assert that this Lease is anything but
      a
      true lease. Each of Lessor and Lessee stipulates and agrees not to challenge
      the
      validity, enforceability or characterization of this Lease of the Premises
      as a
      true lease and further stipulates and agrees that nothing contained in this
      Lease creates or is intended to create a joint venture, partnership (either
      de
      jure or de facto), equitable mortgage, trust, financing device or arrangement,
      security interest or the like. Each of Lessor and Lessee shall support the
      intent of the parties that the lease of the Premises pursuant to this Lease
      is a
      true lease and does not create a joint venture, partnership (either de jure
      or
      de facto), equitable mortgage, trust, financing device or arrangement, security
      interest or the like, if, and to the extent that, any challenge occurs. Each
      of
      Lessor and Lessee represents and warrants to the other that (1) the Base Annual
      Rental is the fair rental value for the use of the Premises as permitted
      hereunder and was agreed to by Lessor and Lessee on that basis, and (2) the
      execution, delivery and performance by Lessor and Lessee of this Lease does
      not
      constitute a transfer to Lessee of all or any part of the Premises other than
      a
      leasehold interest therein. The expressions of intent, the waivers, the
      representations and warranties, the covenants, the agreements and the
      stipulations set forth in this Section are a material inducement to Lessor
      and
      Lessee entering into this Lease.

     

    3. Lease
      Term. The
      Lease
      Term shall commence as of the Effective Date and shall expire on the last day
      of
      the month in which the fifteenth (15th)
      anniversary of the Effective Date occurs, unless terminated sooner as provided
      in this Lease and as may be extended for two (2) periods of five (5) years
      each
      as set forth in Section 26 below. The time period during which this Lease
      shall actually be in effect is referred to herein as the “Lease
      Term.”

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4. Rental
      and Other Payments. 

     

    A. If
      the
      Effective Date is a date other than the first day of the calendar month, Lessee
      shall pay Lessor on the Effective Date the Base Monthly Rental prorated on
      the
      basis of the ratio that the number of days from the Effective Date through
      the
      last day in the month containing the Effective Date bears to the number of
      days
      in such month. Thereafter, on or before the first day of each succeeding
      calendar month, Lessee shall pay Lessor in advance the Base Monthly
      Rental.

     

    B. Commencing
      on the first Adjustment Date and on each Adjustment Date thereafter, the Base
      Annual Rental shall increase by an amount equal to the product of the
      then-current Base Annual Rental and ten percent (10%). The increased Base Annual
      Rental shall constitute the Base Annual Rental due and payable until the next
      Adjustment Date.

     

    C. All
      sums
      of money required to be paid by Lessee under this Lease which are not
      specifically referred to as rent (“Additional Rental”) shall be considered rent
      although not specifically designated as such. Lessor shall have the same
      remedies for nonpayment of Additional Rental as those provided herein for the
      nonpayment of Base Annual Rental.

     

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

     

    A. Organization,
      Authority and Status of Lessor.

     

    (i)  Lessor
      has been duly organized and is validly existing and
      in
      good standing under
      the
      laws of the State of Delaware. All necessary limited liability company 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.

     

    (ii) The
      person who has executed this Lease on behalf of Lessor is duly authorized so
      to
      do.

     

    B. Enforceability.
      This
      Lease constitutes the legal, valid and binding obligation of Lessor, enforceable
      against Lessor in accordance with its terms,
      except
      as such enforceability may be limited by applicable bankruptcy, insolvency,
      liquidation, reorganization and other laws affecting the rights of creditors
      generally and general principles of equity.

     

    6. Representations
      and Warranties of Lessee. The
      representations and warranties of Lessee contained in this Section are being
      made to induce Lessor to enter into this Lease and Lessor has relied, and will
      continue to rely, upon such

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    representations
      and warranties. Lessee represents and warrants to Lessor as of the Effective
      Date as follows:

     

    A. Organization,
      Authority and Status.
      (i)
      Lessee is a corporation, duly organized and validly existing and in good
      standing under the laws of the U.S. Virgin Islands where the Premises are
      located. Guarantor is a corporation, duly organized and validly existing under
      the laws of the State of Washington. All necessary corporate 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
      and by Guarantor of the Guaranty. Lessee’s Tax Identification number,
      Organization Identification number and principal place of business are correctly
      set forth on the signature page of this Lease. The person(s) who have executed
      this Lease on behalf of Lessee and the Guaranty on behalf of Guarantor are
      duly
      authorized to do so. To Lessee’s actual knowledge, neither Lessee nor Guarantor
      is an entity whose property or interests are subject to being blocked under
      any
      of the OFAC Laws and Regulations or which is otherwise in violation of any
      of
      the OFAC Laws and Regulations; 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. As used
      herein, “Lessee’s actual knowledge” shall mean the actual knowledge of J.
      Jeffrey Meder, President of Guarantor, and Martin Moore, Vice President of
      Guarantor, without investigation.

     

    B. Enforceability.
      Upon
      execution by Lessee, this Lease shall constitute the legal, valid and binding
      obligation of Lessee, enforceable against Lessee in accordance with its terms,
      except as such enforceability may be limited by applicable bankruptcy,
      insolvency, liquidation, reorganization and other laws affecting the rights
      of
      creditors generally and general principles of equity.

     

    C. Litigation.
      There
      are no suits, actions, proceedings or investigations pending, or, to the best
      of
      its knowledge, threatened against or involving Lessee or the Premises before
      any
      arbitrator or Governmental Authority, except for such suits, actions,
      proceedings or investigations which, individually or in the aggregate, have
      not
      had, and would not reasonably be expected to result in, a Material Adverse
      Effect.

     

    D. Absence
      of Breaches or Defaults.
      Lessee
      is not and the authorization, execution, delivery and performance of this Lease
      and the documents, instruments and agreements provided for herein will not
      result in any breach or default under any document, instrument or agreement
      to
      which Lessee is a party or by which Lessee, the Premises or any of the property
      of Lessee is subject or bound, except for such breaches or defaults which,
      individually or in the aggregate, have not had, and would not 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 violate any applicable law, statute,
      regulation, rule, ordinance, code, rule or order. The Premises are not subject
      to any right of first refusal, right of first offer or option to purchase or
      lease granted to a third party by 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    Lessor
      or
      Guarantor. Lessee has not assigned, transferred, mortgaged, hypothecated or
      otherwise encumbered this Lease or any rights hereunder or interest
      herein.

     

    E. Licenses
      and Permits; Access.
      All
      required licenses and permits, both governmental and private, to use and operate
      the Premises as a Permitted Concept are in full force and effect, except for
      such licenses and permits the failure of which to obtain has not had, and would
      not reasonably be expected to result in, a Material Adverse Effect. Adequate
      rights of access to public roads and ways are available to the Premises for
      unrestricted ingress and egress and otherwise to permit utilization of the
      Premises for its intended purposes, and all such public roads and ways have
      been
      completed and dedicated to public use.

     

    7. Rentals
      To Be Net to Lessor.
      Except
      as otherwise expressly provided herein or by applicable laws, regulations or
      ordinances, (i) this Lease is a net lease and shall not terminate prior to
      the stated expiration date hereof; (ii) so long as Lessor performs all of
      its obligations hereunder, Lessee shall not be entitled to any abatement,
      reduction, diminution, set-off, counterclaim, defense or deduction with respect
      to any Base Annual Rental, Additional Rental or other sums payable hereunder,
      (iii) the obligations of Lessee hereunder shall not be affected, by reason
      of:
      any damage to or destruction of the Premises or any portion thereof; any defect
      in the condition, design, operation or fitness for use of the Premises or any
      portion thereof; any taking of the Premises or any part thereof by condemnation
      or otherwise; any prohibition, limitation, interruption, cessation, restriction
      or prevention of Lessee’s use, occupancy or enjoyment of the Premises, or any
      interference with such use, occupancy or enjoyment by any person; construction
      on or renovation of the Premises; or any failure in the Premises to comply
      with
      Applicable Regulations, or any other cause whether similar or dissimilar to
      the
      foregoing. All costs, expenses and obligations of every kind and nature
      whatsoever relating to the Premises and the appurtenances thereto and the use
      and occupancy thereof which may arise or become due and payable with respect
      to
      the period which commences on the Effective Date and ends on the expiration
      or
      earlier termination of the Lease Term in accordance with the provisions hereof
      (whether or not the same shall become payable during the Lease Term or
      thereafter) shall be paid by Lessee, except as otherwise expressly provided
      herein. It is the purpose and intention of the parties to this Lease that the
      Base Annual Rental and the Additional Rental due hereunder shall be absolutely
      net to Lessor and that this Lease shall yield, net to Lessor, the Base Annual
      Rental and the Additional provided in this Lease, except as specifically
      provided herein. So long as Lessee’s rights hereunder and quiet enjoyment of the
      Premises are not disturbed, and Lessor or its successor performs all of Lessor’s
      obligations hereunder, Lessee shall remain obligated under this Lease in
      accordance with its terms and shall not take any action to terminate, rescind
      or
      avoid this Lease, notwithstanding any bankruptcy, insolvency, reorganization,
      liquidation, dissolution or other proceeding affecting Lessor or any action
      with
      respect to this Lease which may be taken by any trustee, receiver or liquidator
      or by any court. Except as otherwise expressly provided herein or by applicable
      laws, regulations or ordinances, Lessee waives all rights to terminate or
      surrender this Lease, or to any abatement or deferment of Base Annual Rental,
      Additional Rental or other sums payable hereunder.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    8. Taxes
      and Assessments. Lessee
      shall pay, prior to delinquency, all taxes and assessments of every type or
      nature assessed against, imposed upon or arising with respect to the Premises,
      this Lease, the rental or other payments due and payable by Lessee under this
      Lease or Lessee during the Lease Term, including, without limitation, the
      following:

     

    A. All
      taxes
      and assessments upon the Premises or any part thereof and upon any Personal
      Property, whether belonging to Lessor or Lessee, or any tax or charge levied
      in
      lieu of such taxes and assessments;

     

    B. All
      taxes, charges, license fees and or similar fees imposed by reason of the use
      of
      the Premises by Lessee; and

     

    C. All
      excise, transaction, privilege, license, sales, use and other taxes upon the
      rental or other payments due and payable by Lessee under this Lease, the
      leasehold estate of Lessee or the activities of Lessee pursuant to this
      Lease.

     

    Notwithstanding
      the foregoing, in no event will Lessee be required to pay any net income taxes
      (i.e., taxes which are determined taking into account deductions for
      depreciation, interest, taxes and ordinary and necessary business expenses)
      or
      franchise taxes (unless imposed in lieu of other taxes that would otherwise
      be
      the obligation of Lessee under this Lease, including, without limitation, any
      “gross receipts tax” or any similar tax payable in connection with the rent paid
      by Lessee hereunder) of Lessor, any transfer taxes of Lessor, or any tax imposed
      with respect to the sale, exchange or other disposition by Lessor, in whole
      or
      in part, of the Premises or Lessor’s interest in this Lease, or any tax imposed
      on Lessor not in connection with the Premises or this Lease. 

     

    All
      taxing authorities shall be instructed to send all tax and assessment invoices
      payable by Lessee hereunder to Lessee, and Lessee shall promptly provide Lessor
      and any lender with a security interest in the Premises designated by Lessor
      in
      a written notice to Lessee (each, a “Lender”) with copies of all tax and
      assessment invoices received by Lessee and payable by Lessee hereunder. Upon
      Lessor’s written request therefor, Lessee shall also provide Lessor and any
      Lender with evidence that such invoices were paid in a timely fashion. Lessee
      may, at its own expense, contest or cause to be contested, by appropriate legal
      proceedings conducted in good faith and with due diligence, the amount or
      validity or application, in whole or in part, of any item payable by Lessee
      specified in this Section or lien therefor, provided that (i) Lessee shall
      provide written notice to Lessor of any contest involving more than $10,000.00,
      (ii) such proceeding shall suspend the collection thereof from the Premises
      or any interest therein, (iii) neither the Premises nor any interest
      therein would be in any imminent danger of being sold, forfeited or lost by
      reason of such proceedings, and (iv) no Event of Default has occurred and is
      continuing (unless Lessee has deposited in escrow or obtained a bond for the
      disputed amount, or otherwise provided security for the payment of taxes and
      assessments which are ultimately found to be due and payable by Tenant
      hereunder, to Landlord’s reasonable satisfaction).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    9. 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 Premises during the Lease
      Term. Under no circumstances shall Lessor be responsible for any interruption
      of
      any utility service.

     

    10. Insurance.
      Throughout the Lease Term Lessee shall maintain with respect to the Premises,
      at
      its sole expense, the following types and amounts of insurance (which may be
      included under a blanket insurance policy if all the other terms hereof are
      satisfied), in addition to such other insurance as Lessor may reasonably
      require:

     

    A. Insurance
      against loss, damage or destruction by fire and other casualty, including theft,
      vandalism and malicious mischief, wind, flood (if the Premises are in a location
      designated by the Federal Emergency Management Administration as a Special
      Flood
      Hazard Area), earthquake (if the Premises is in an area subject to destructive
      earthquakes within the past 100 years), boiler explosion (if there is any boiler
      upon the Premises), plate glass breakage, sprinkler damage (if the Premises
      have
      a sprinkler system), all matters covered by a standard extended coverage
      endorsement, all matters covered by a special coverage endorsement commonly
      known as an “all risk” endorsement, insuring the Premises and the Personal
      Property for not less than 100% of their full insurable replacement cost,
      subject to commercially reasonable deductible amounts.

     

    B. Commercial
      general liability and property damage insurance, including a products liability
      clause, covering Lessor and Lessee against bodily injury liability, property
      damage liability and automobile bodily injury and property damage liability,
      including without limitation any liability arising out of the ownership,
      maintenance, repair, condition or operation of the Premises or adjoining ways,
      streets or sidewalks and, if applicable, insurance covering Lessor and Lessee
      against liability arising from the sale of liquor, beer or wine on the Premises.
      Such insurance policy or policies shall contain a broad form contractual
      liability endorsement under which the insurer agrees to insure Lessee’s
      obligations under Section 17 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 $2,000,000.00 per injury
      and occurrence with respect to any insured liability, whether for personal
      injury or property damage, and shall be of form and substance reasonably
      satisfactory to Lessor.

     

    C. Business
      income insurance equal to 100% of the Base Monthly Rental for a period of not
      less than six months.

     

    D. State
      (or
      U.S. Virgin Islands) Worker’s compensation insurance in the statutorily mandated
      limits, employer’s liability insurance with limits not less than $500,000 and
      such other insurance as may be necessary to comply with applicable
      laws.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    All
      insurance policies shall:

     

    (i) Provide
      for a waiver of subrogation by the insurer as to claims against Lessor, Lessor’s
      employees and agents and provide that such insurance cannot be unreasonably
      cancelled, invalidated or suspended on account of the conduct of Lessee, its
      officers, directors, employees or agents;

     

    (ii) Provide
      that any “no other insurance” clause in the insurance policy shall exclude any
      policies of insurance maintained by Lessor and that the insurance policy shall
      not be brought into contribution with insurance maintained by
      Lessor;

     

    (iii) Contain
      a
      standard without contribution mortgage clause endorsement in favor of any lender
      designated by Lessor in writing;

     

    (iv) Provide
      that the policy of insurance shall not be terminated, cancelled or substantially
      modified without at least thirty (30) days’ prior written notice to Lessor and
      to any lender covered by any standard mortgage clause endorsement;

     

    (v) Provide
      that the insurer shall not have the option to restore the Premises if Lessor
      or
      Lessee elects to terminate this Lease in accordance with the terms hereof;
      

     

    (vi) Be
      issued
      by insurance companies licensed to do business in the U.S. Virgin Islands and
      which are rated AVI or better by Best’s Insurance Guide or are otherwise
      approved by Lessor; and

     

    (vii) Provide
      that the insurer shall not deny a claim because of the negligence of Lessee,
      anyone acting for Lessee or any tenant or other occupant of the
      Premises.

     

    It
      is
      expressly understood and agreed that the foregoing minimum limits of insurance
      coverage shall not limit the liability of Lessee for its acts or omissions
      as
      provided in this Lease. All insurance policies (with the exception of worker’s
      compensation insurance to the extent not available under statutory law) shall
      designate Lessor and any Lender as additional insureds as their interests may
      appear and shall be payable as set forth in Section 19 hereof. All such
      policies shall be written as primary policies, with deductibles not to exceed
      10% of the amount of coverage. Any other policies, including any policy now
      or
      hereafter carried by Lessor, shall serve as excess coverage. Lessee shall
      procure policies for all insurance for periods of not less than one year and
      shall provide to Lessor and any Lender certificates of insurance evidencing
      that
      insurance satisfying the requirements of this Lease is in effect at all
      times.

     

    11. Tax
      and Insurance Impound.
      Upon the
      occurrence of an Event of Default, so long as such Event of Default remains
      uncured, Lessor may require Lessee to

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    deposit
      with Lessor sums which will provide an impound account (which shall be deemed
      a
      trust fund) for paying up to the next one year of taxes, assessments and/or
      insurance premiums. Upon such requirement, Lessor will estimate the amounts
      needed for such purposes and will notify Lessee to pay the same to Lessor in
      equal monthly installments, as nearly as practicable, in addition to all other
      sums due under this Lease. Should additional funds be required at any time,
      Lessee shall pay the same to Lessor on demand. Lessee shall advise Lessor of
      all
      taxes and insurance bills which are due, and Lessor shall cooperate fully with
      Lessee in assuring that the same are paid from the impounded funds in a timely
      manner. Lessor shall deposit all impounded funds in trust accounts insured
      by
      any federal or state agency and shall not 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 Lessee. Upon the occurrence of an Event of Default
      by
      Lessee under Sections 21A(ii) or (iii), Lessor may apply all impounded funds
      against any sums due from Lessee to Lessor hereunder. Lessor shall give to
      Lessee an annual accounting showing all credits and debits to and from such
      impounded funds received from Lessee. Within 60 days after the expiration or
      earlier termination of this Lease, Lessor shall provide an accounting showing
      all credits and debits to and from such impounded funds received from Lessee
      and
      reimburse to Lessee such funds, if any, in excess of the amount reasonably
      estimated by Lessor to be necessary to pay unpaid taxes and/or insurance payable
      by Lessee hereunder and applicable to the period of Lessee’s tenancy under this
      Lease, even if such amounts are not yet due or payable. Lessor’s obligations
      under this Section shall survive the expiration or termination of this
      Lease.

     

    12. Payment
      of Rental and Other Sums. All
      rental and other sums which Lessee is required to pay hereunder shall be the
      unconditional obligation of Lessee and shall be payable in full when due without
      any setoff, abatement, deferment, deduction or counterclaim whatsoever, except
      as otherwise provided herein. Upon execution of this Lease, Lessee shall
      authorize Lessor to establish arrangements whereby payments of the Base Monthly
      Rental, any Additional Rental and impound payments, if any, are transferred
      by
      Automated Clearing House Debit initiated by Lessor or its designee directly
      from
      an account at a U.S. bank in the name of Lessee to such account as Lessor may
      designate provided, however, upon notice from any Lender, co-signed by Lessor,
      delivered in the manner set forth in Section 27, Lessee shall deliver all
      payments of Base Monthly Rental and Additional Rental as specified in such
      notice. Any delinquent payment (that is, any payment not made within five (5)
      calendar days after the date when due and after the date of Lessee’s receipt of
      Lessor’s written notice relating thereto) shall, in addition to any other remedy
      of Lessor, incur a late charge of 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.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    13. Use.
      The
      Premises shall be used solely for the operation of a Permitted Concept and
      for
      no other purpose without Lessor’s prior written consent, which consent shall not
      be unreasonably withheld conditioned or delayed. 

     

    Lessee
      shall not, by itself or through any assignment, sublease or other type of
      transfer, convert the Premises to an alternative use during the Lease Term
      without Lessor’s consent, which consent shall not be unreasonably withheld,
      conditioned or delayed. Lessor may consider any or all of the following in
      determining whether to grant its consent, without being deemed to be
      unreasonable: (i) whether the rental paid to Lessor would be equal to or
      greater than the anticipated rental assuming continued existing use,
      (ii) whether the proposed rental to be paid to Lessor is reasonable
      considering the converted use of the Premises and the customary rental
      prevailing in the community for such use, (iii) whether the converted use
      will be consistent with the highest and best use of the Premises, and
      (iv) whether the converted use will increase Lessor’s risks or decrease the
      value of the Premises. Notwithstanding anything contained herein to the
      contrary, Lessee shall have the unrestricted right to assign this Lease or
      sublease all or any portion of the Premises to any Person controlled by
      Guarantor.

     

    14. Compliance
      With Laws, Restrictions, Covenants and Encumbrances.
      A. Lessee’s
      use and occupation of the Premises, and the condition thereof, shall, at
      Lessee’s sole cost and expense, comply with all Applicable Regulations now or
      hereafter in effect and all restrictions, covenants and encumbrances of record
      with respect to the Premises existing on the Effective Date or consented to
      by
      Lessee (which consent shall not be unreasonably withheld, conditioned or
      delayed) after the Effective Date. In addition, Lessee shall comply with all
      Applicable Regulations now or hereafter in effect, including, without
      limitation, the OFAC Laws and Regulations and Anti-Money Laundering Laws.
      Without limiting the generality of the other provisions of this Section, Lessee
      shall comply with the ADA, and all regulations promulgated thereunder, if and
      to
      the extent applicable to the Premises.

     

    B. Lessee
      will not permit any act or condition to exist on or about the Premises which
      will 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.

     

    C. Lessee
      represents and warrants to Lessor with respect to the Premises as follows:
      (i)
      to
      Lessee’s actual knowledge, neither the Premises, nor Lessee, nor Guarantor is in
      violation of, or subject to, any pending or, to Lessee’s actual knowledge,
      threatened investigation or inquiry by any Governmental Authority or to any
      remedial obligations under any Environmental Laws, and this representation
      and
      warranty would continue to be true and correct following disclosure to the
      applicable Governmental Authorities of all relevant facts, conditions and
      circumstances, if any, pertaining to the Premises; (ii) to Lessee’s actual
      knowledge, all permits, licenses or similar authorizations required to
      construct, occupy, operate or use any buildings, improvements, fixtures and
      equipment forming a part of the Premises by reason of any Environmental Laws
      have been obtained; (iii) to Lessee’s actual knowledge, no Hazardous Materials
      have been used, handled, manufactured, generated, produced, 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    stored,
      treated, processed, transferred, disposed of or otherwise Released in, on,
      under, from or about the Premises by Lessee or Guarantor, except in Permitted
      Amounts; (iv) to Lessee’s actual knowledge, the Premises does not contain
      Hazardous Materials, except in Permitted Amounts; (v) to Lessee’s actual
      knowledge, there is no threat of any Release migrating to the Premises in excess
      of Permitted Amounts; (vi) to Lessee’s actual knowledge, there is no past or
      present non-compliance with Environmental Laws, or with permits issued pursuant
      thereto, in connection with the Premises; (vii) to Lessee’s actual knowledge,
      neither Guarantor nor Lessee has received any written or oral notice or other
      communication from any person or entity (including but not limited to a
      Governmental Authority) relating to Hazardous Materials or Remediation thereof
      in excess of Permitted Amounts, of possible liability of any person or entity
      pursuant to any Environmental Law, other Environmental Conditions in connection
      with the Premises, or any actual or potential administrative or judicial
      proceedings in connection with any of the foregoing; (viii) to Lessee’s actual
      knowledge, all information known to Lessee or Guarantor, or contained in the
      files of Lessee or Guarantor, relating to any Environmental Condition, Releases
      of Hazardous Materials in, on, under or from the Premises, other than in
      Permitted Amounts, has been provided to Lessor under the Purchase Agreement,
      including, without limitation, information relating to all prior Remediation;
      and (ix) to Lessee’s actual knowledge, the Premises has been kept free and clear
      of all Environmental Liens; and neither Guarantor nor Lessee, has committed
      any
      act on the Premises that materially increased the dangers to human health or
      the
      environment, posed an unreasonable risk of harm to any person or entity,
      impaired the value of the Premises in any material respect, is contrary to
      any
      requirement of any insurer, constituted a public or private nuisance,
      constituted waste, or violated any covenant, condition, agreement or easement
      applicable to the Premises.

     

    D. Lessee
      covenants to Lessor from and after the Effective Date and until the expiration
      or earlier termination of this Lease as follows: (i) Lessee shall not take
      any
      action, or permit any other operator or user of the Premises to take any action,
      that will cause the Premises to be in violation of Environmental Laws, or
      subject to any investigation or inquiry by any Governmental Authority or subject
      to any Remediation obligations under any Environmental Laws; (ii) all uses
      and
      operations on or of the Premises, whether by Lessee or any other operator or
      user of the Premises, shall be in compliance with all Environmental Laws and
      permits issued pursuant thereto; (iii) Lessee shall not cause any Releases
      or
      take any action that will cause Hazardous Materials to be in, on, under or
      from
      the Premises, except in Permitted Amounts; (iv) Lessee shall not take any action
      that will cause the Premises to be subject to Environmental Liens; and (v)
      Lessee shall not do or allow any tenant or other user of the Premises to do
      any
      act on the Premises that (1) materially increases the dangers to human
      health or the environment, (2) poses an unreasonable risk of harm to any person
      or entity (whether on or off the Premises), (3) materially impairs or is
      reasonably likely to materially impair the value of the Premises, (4) is
      contrary to any requirement of any insurer, (5) constitutes a public or private
      nuisance or constitutes waste, or (6) violates any covenant, condition,
      agreement or easement applicable to the Premises on 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    the
      Effective Date or consented to by Lessee (which consent shall not be
      unreasonably withheld, conditioned or delayed) after the Effective
      Date.

     

    E. Lessee
      shall immediately notify Lessor in writing upon Lessee obtaining actual
      knowledge after the Effective Date of: (i) any occurrence of Releases or
      Threatened Releases in, on, under, from or migrating towards the Premises,
      in
      excess of Permitted Amounts after the Effective Date, including, without
      limitation, the occurrence on or under the Premises, or the escape, seepage,
      leakage, spillage, discharge, emission or release of any Hazardous Materials,
      apparent or real, in excess of Permitted Amounts after the Effective Date;
      (ii)
      any non-compliance with any Environmental Laws related in any way to the
      Premises occurring after the Effective Date; (iii) any Environmental Lien or
      any
      act or omission which would reasonably be expected to result in the imposition
      of an Environmental Lien affecting the Premises occurring after the Effective
      Date; (iv) any required or proposed Remediation of Environmental Conditions
      relating to the Premises, including, without limitation, any and all
      enforcement, clean-up, remedial, removal or other governmental or regulatory
      actions threatened, instituted or completed pursuant to any of the Environmental
      Laws affecting the Premises; (v) any written or oral notice or other
      communication of which Lessee or Guarantor becomes aware from any source
      whatsoever (including but not limited to a Governmental Authority) relating
      in
      any way to Hazardous Materials on the Premises or Remediation thereof, possible
      liability of any person or entity pursuant to any Environmental Law in
      connection with the Premises, other Environmental Conditions in connection
      with
      the Premises, or any actual or potential administrative or judicial proceedings
      in connection with anything referred to in this Lease; or (vi) any investigation
      or inquiry initiated by any Governmental Authority relating to the Environmental
      Condition of the Premises.

     

    F. If
      Lessee
      causes any Releases on the Premises in material violation of Environmental
      laws
      after the Effective Date, Lessee shall, at its sole cost and expense: (i)
      perform any environmental site assessment or other investigation of
      Environmental Conditions in connection with the Premises as may be required
      under the Environmental Laws (including but not limited to sampling, testing
      and
      analysis of soil, water, air, building materials and other materials and
      substances whether solid, liquid or gas), and share with Lessor the reports
      and
      other results thereof, and Lessor and the other Indemnified Parties shall be
      entitled to rely on such reports and other results thereof; and (ii) have the
      Premises inspected as may be required by any Environmental Laws for seepage,
      spillage and other environmental concerns. Lessee shall provide Lessor with
      written certified results of all inspections performed on the Premises. If
      Lessee causes any Releases on the Premises in material violation of
      Environmental laws after the Effective Date, all costs and expenses associated
      with the inspection, preparation and certification of results, as well as those
      associated with any corrective action, shall be paid by Lessee. All inspections
      and tests performed on the Premises pursuant to this paragraph shall be
      conducted in compliance with all Environmental Laws.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    G. (i)
      Lessee shall, at its sole cost and expense, and without limiting the rights
      of
      Lessor under any other provision of this Lease, comply
      with all reasonable written requests of Lessor with respect to the Premises
      to:
      (1) reasonably effectuate Remediation of any condition (including but not
      limited to a Release) caused by Lessee, Guarantor, or any of their respective
      agents, representatives, licensees, invitees, assignees and sublessees in,
      on,
      under or from the Premises if and to the extent required by Environmental Laws;
      (2) comply with any Environmental Law; (3) comply with any directive from any
      Governmental Authority; and (4) take any other reasonable action necessary
      or
      appropriate for protection of human health or the environment.

     

    (ii)
      Upon
      any Release on, above or under the Premises caused by Lessee, Guarantor, or
      any
      of their respective agents, representatives, licensees, invitees, assignees
      and
      sublessees Lessee shall immediately remedy such situation in accordance with
      all
      Environmental Laws. Should Lessee fail to remedy or cause the remedy of such
      situation caused by Lessee Guarantor, or any of their respective agents,
      representatives, licensees, invitees, assignees and sublessees in accordance
      with all Environmental Laws, and if such failure is not cured, or if Lessee
      does
      not commence diligent efforts to cure such failure, within ten (10) days after
      Lessee’s receipt of Lessor’s written notice of such failure, Lessor shall be
      permitted to take such actions in its reasonable discretion to remedy such
      situation if and to the extent required by Environmental Laws and any actual
      and
      reasonable costs and expenses incurred in connection therewith shall be paid
      by
      Lessee.

     

    H. Lessor
      and any other person or entity designated by Lessor in writing, 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 Premises, upon reasonable prior written notice to Lessee, in
      a
      manner reasonably designed to not interfere with Lessee’s or other occupants’
conduct of their business at the Premises, during normal business hours or
      at
      any time in the event of an emergency (including, without limitation, in
      connection with a proposed sale or conveyance of the Premises, a proposed
      financing or refinancing secured by the Premises, any securitization,
      participation or transfer of any mortgage loan documents encumbering the
      Premises or the exercise of any remedies set forth in the Lease or any mortgage
      loan documents encumbering the Premises) to assess any and all aspects of the
      Environmental Condition of the Premises and its use, including but not limited
      to conducting any environmental assessment or audit (the scope of which shall
      be
      determined in Lessor’s sole and absolute discretion) and taking samples of soil,
      groundwater or other water, air, or building materials, and conducting other
      invasive testing; provided, however, that Lessor shall restore the Premises
      at
      Lessor’s sole cost and expense. Lessee shall reasonably cooperate with and
      provide access to Lessor and any such person or entity designated by Lessor.
      Any
      such assessment and investigation relating to any Release (including any
      restoration of the Premises made necessary by any invasive testing) shall be
      at
      Lessee’s sole cost and expense if Lessee, Guarantor, or any of their respective
      agents, representatives, licensees, invitees, assignees and sublessees has
      caused the Release at the Premises in excess 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    of
      Permitted Amounts. Otherwise, any such assessment and investigation shall be
      at
      Lessor’s sole cost and expense.

     

    I. Lessee
      fully and completely releases, waives and covenants not to assert any claims,
      liabilities, actions, defenses, challenges, contests or other opposition against
      Lessor, however characterized, known or unknown, foreseen or unforeseen, now
      existing or arising in the future, relating to any Release or presence of
      Hazardous Materials on, at or affecting the Premises, unless a Release is caused
      by Lessor, its employees, agents or contractors.

     

    J. In
      addition to the other requirements of this Section, Lessee shall, at all times
      throughout the Lease Term, comply with all federal, state or local statutes,
      laws, rules, regulations, ordinances, codes, policies or rules of common law
      now
      or hereafter in effect and in each case, as amended, and any judicial or
      administrative interpretation thereof, including any judicial order, consent,
      decree or judgment, applicable to Lessee and its use and occupancy of the
      Premises.

     

    15. Condition
      of Premises; Maintenance.
      Lessee
      has inspected, or had the opportunity to inspect, the Premises and hereby
      accepts the Premises “AS IS” and “WHERE IS”, with no representation or warranty
      of Lessor as to the condition thereof, and subject to the existing state of
      facts which an accurate survey or physical inspection might reveal, and all
      Applicable Regulations now or hereafter in effect. Lessee
      shall (i) maintain the Premises in good condition and repair, subject to
      reasonable and ordinary wear and tear, free from actual or constructive waste,
      (ii) operate, remodel, update and modernize the Premises as deemed necessary
      or
      desired by Lessee, and (iii) pay all operating costs of the Premises in the
      ordinary course of business. Except as otherwise specifically provided herein,
      Lessee waives any right to (1) require Lessor to maintain, repair or
      rebuild all or any part of the Premises or (2) make repairs at the expense
      of Lessor, pursuant to any Applicable Regulations at any time in
      effect.

     

    16. Waste;
      Alterations and Improvements. Lessee
      shall not alter the exterior, structural, plumbing or electrical elements of
      the
      Premises in any manner without the consent of Lessor, which consent shall not
      be
      unreasonably withheld, delayed or conditioned; provided, however, that Lessee
      may undertake nonstructural alterations to the Premises costing less than
      $100,000 per project without Lessor’s consent. For purposes of this Lease,
      alterations to the exterior, structural, plumbing or electrical elements of
      the
      Premises shall mean:

     

    (i) alterations
      which affect the foundation or “footprint” of the improvements at the
      Premises;

     

    (ii) alterations
      which involve the structural elements of the improvements at the Premises,
      such
      as a load-bearing wall, structural beams, columns, supports or roof;
      or

     

    (iii) alterations
      which materially affect any of the building systems, including, without
      limitation, the electrical systems, HVAC (which shall remain Lessee’s property

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    until
      the
      expiration or earlier termination of this Lease), plumbing, and fire and safety
      systems.

     

    If
      Lessor’s consent is required hereunder and Lessor consents to the making of any
      such alterations, the same shall be made by Lessee at Lessee’s sole expense by a
      licensed contractor and according to plans and specifications reasonably
      approved by Lessor and subject to such other reasonable conditions as Lessor
      shall require. Any work at any time commenced by Lessee or Lessor on the
      Premises shall be prosecuted diligently to completion, shall be of good
      workmanship and materials and shall comply fully with all the terms of this
      Lease. Upon completion of any alterations by Lessee, Lessee shall promptly
      provide Lessor with (i) evidence of full payment to all laborers and materialmen
      contributing to the alterations, (ii) an architect’s certificate certifying the
      alterations to have been completed in conformity with the plans and
      specifications, (iii) a certificate of occupancy (if the alterations are of
      such
      a nature as would require the issuance of a certificate of occupancy), and
      (iv)
      any other documents or information reasonably requested by Lessor. Any addition
      to or alteration of the Premises shall automatically be deemed a part of the
      Premises 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. Lessee shall execute and file or record,
      as appropriate, a “Notice of Non-Responsibility,” or any equivalent notice
      permitted under applicable law in the U.S. Virgin Islands.

     

    17. Indemnification.
      Lessee
      shall, at its sole cost and expense, protect, defend, indemnify, release and
      hold harmless each of the Indemnified Parties for, from and against any and
      all
      Losses (excluding Losses suffered by an Indemnified Party arising out of the
      negligence or willful misconduct of any of the Indemnified Parties; provided,
      however, that the term “negligence” shall not include negligence imputed as a
      matter of law to any of the Indemnified Parties solely by reason of Lessor’s
      interest in the Premises or Lessor’s failure to act in respect of matters which
      are or were the obligation of Lessee under this Lease) caused by, incurred
      or
      resulting from Lessee’s operations of the Premises, whether relating to
      alteration, maintenance or use by Lessee 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 under Lessee’s control or
      affiliated with Lessee, or to which any Indemnified Party is subject because
      of
      (1) any accident, injury to or death of any person or loss of or damage to
      property caused by Lessee, Guarantor, or any of their respective agents,
      representatives, licensees, invitees, assignees and sublessees and occurring
      in,
      on or about the Premises or portion thereof or on the adjoining sidewalks,
      curbs, parking areas, streets or ways, (2) the use, non-use or condition
      caused by Lessee, Guarantor, or any of their respective agents, representatives,
      licensees, invitees, assignees and sublessees, in, on or about, or Lessee’s,
      Guarantor’s, or any of their respective agents’, representatives’, licensees’,
      invitees’, assignees’ and sublessees’ possession, alteration, repair, operation,
      maintenance or management of, the Premises or any portion thereof or on the
      adjoining sidewalks, curbs, parking areas, streets or ways, (3) any
      representation or warranty made herein by Lessee, in any certificate delivered
      in connection herewith or in any other agreement to which Lessee is a party
      or
      pursuant

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    thereto
      being false or misleading in any material respect as of the date of such
      representation or warranty was made, (4) Lessee’s, Guarantor’s, or any of their
      respective agents’, representatives’, licensees’, invitees’, assignees’ and
      sublessees’ performance of any labor or services or the furnishing of any
      materials or other property pursuant to the request of Lessee, Guarantor, or
      any
      of their respective agents, representatives, licensees, invitees, assignees
      and
      sublessees in respect to the Premises or any portion thereof (excluding,
      however, any such performance or furnishing done at the request or direction
      of
      any of the Lessor Entities), (5) any taxes, assessments or other charges which
      Lessee is required to pay under Section 8, (6) any lien, encumbrance or claim
      arising on or against the Premises or any portion thereof under any Applicable
      Regulation or otherwise which Lessee is obligated hereunder to remove and
      discharge, or any failure to comply with any Applicable Regulation by Lessee,
      Guarantor, or any of their respective agents, representatives, licensees,
      invitees, assignees and sublessees, (7) the claims of Lessee’s or Guarantor’s
      invitees, patrons, licensees or subtenants of all or any portion of the Premises
      or any Person acting through or under Lessee or Guarantor otherwise acting
      under
      or as a consequence of this Lease or any sublease relating to Lessee’s or
      Guarantor’s negligence or intentional misconduct, (8) any act or omission
      of Lessee, Guarantor, or any of their respective agents, representatives,
      licensees, invitees, assignees and sublessees, (9) any contest referred to
      in
      Section 8, (10) the sale of liquor, beer or wine on the Premises by Lessee,
      Guarantor, or any of their respective agents, representatives, licensees,
      invitees, assignees and sublessees, and (11) costs of Remediation (whether
      or
      not performed voluntarily), engineers’ fees, environmental consultants’ fees,
      and costs of investigation (including but not limited to sampling, testing,
      and
      analysis of soil, water, air, building materials and other materials and
      substances whether solid, liquid or gas) imposed upon or incurred by or asserted
      against any Indemnified Parties, and directly or indirectly arising out of
      or in
      any way relating to any one or more of the following: (i) any presence of
      any Hazardous Materials in, on, above, or under the Premises caused by Lessee,
      Guarantor, or any of their respective agents, representatives, licensees,
      invitees, assignees and sublessees; (ii) any past, present or Threatened
      Release by Lessee, Guarantor, or any of their respective agents,
      representatives, licensees, invitees, assignees and sublessees in, on, above,
      under or from the Premises; (iii) any activity by Lessee, Guarantor, or any
      of their respective agents, representatives, licensees, invitees, assignees
      or
      sublessees in connection with any actual, proposed or threatened use, treatment,
      storage, holding, existence, disposition or other Release, generation,
      production, manufacturing, processing, refining, control, management, abatement,
      removal, handling, transfer or transportation to or from the Premises of any
      Hazardous Materials at any time located in, under, on or above the Premises
      caused by Lessee, Guarantor, or any of their respective agents, representatives,
      licensees, invitees, assignees and sublessees; (iv) any activity by Lessee,
      Guarantor, or any of their respective agents, representatives, licensees,
      invitees, assignees and sublessees in connection with any actual or proposed
      Remediation of any Hazardous Materials at any time located in, under, on or
      above the Premises, whether or not such Remediation is voluntary or pursuant
      to
      court or administrative order, including but not limited to any removal,
      remedial or corrective action; (v) any past, present or threatened
      non-compliance or 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    violations
      of any Environmental Laws (or permits issued pursuant to any Environmental
      Law)
      by Lessee, Guarantor, or any of their respective agents, representatives,
      licensees, invitees, assignees and sublessees in connection with the Premises
      or
      operations thereon, including but not limited to any failure by Lessee,
      Guarantor, or any of their respective agents, representatives, licensees,
      invitees, assignees and sublessees to comply with any order of any Governmental
      Authority in connection with any Environmental Laws; (vi) the imposition,
      recording or filing or the threatened imposition, recording or filing of any
      Environmental Lien encumbering the Premises caused by Lessee, Guarantor, or
      any
      of their respective agents, representatives, licensees, invitees, assignees
      and
      sublessees; (vii) any administrative processes or proceedings or judicial
      proceedings in any way connected with any matter caused by Lessee, Guarantor,
      or
      any of their respective agents, representatives, licensees, invitees, assignees
      and sublessees addressed in this Section; (viii) any past, present or
      threatened injury to, destruction of or loss of natural resources in any way
      connected with the Premises caused by Lessee, Guarantor, or any of their
      respective agents, representatives, licensees, invitees, assignees and
      sublessees, including but not limited to costs to investigate and assess such
      injury, destruction or loss; (ix) any acts of Lessee, Guarantor, or any of
      their respective agents, representatives, licensees, invitees, assignees and
      sublessees, in arranging for disposal or treatment, or arranging with a
      transporter for transport for disposal or treatment, of Hazardous Materials
      owned or possessed by Lessee, Guarantor, or any of their respective agents,
      representatives, licensees, invitees, assignees and sublessees, at any facility
      or incineration vessel owned or operated by another person or entity and
      containing such or similar Hazardous Materials; (x) any acts of Lessee,
      Guarantor, or any of their respective agents, representatives, licensees,
      invitees, assignees and sublessees, in accepting any Hazardous Materials for
      transport to disposal or treatment facilities, incineration vessels or sites
      selected by Lessee, Guarantor, or any of their respective agents,
      representatives, licensees, invitees, assignees and sublessees, from which
      there
      is a Release, or a Threatened Release of any Hazardous Materials which causes
      the incurrence of costs for Remediation; (xi) any personal injury, wrongful
      death, or property damage caused by Lessee, Guarantor, or any of their
      respective agents, representatives, licensees, invitees, assignees and
      sublessees arising under any statutory or common law or tort law theory,
      including but not limited to damages caused by Lessee, Guarantor, or any of
      their respective agents, representatives, licensees, invitees, assignees and
      sublessees assessed for the maintenance of a private or public nuisance or
      for
      the conducting of an abnormally dangerous activity on or near the Premises;
      or
      (xii) Lessee’s misrepresentation or inaccuracy in any representation or
      warranty or material breach or failure to perform Lessee’s covenants or other
      obligations pursuant to this Section. Lessee’s obligations under this Section
      shall survive the expiration or earlier termination of this Lease for any
      reason.

     

    Lessor
      shall, at its sole cost and expense, protect, defend, indemnify, release and
      hold harmless each of the Lessee Indemnified Parties for, from and against
      any
      and all Losses (excluding Losses suffered by any Lessee Indemnified Party
      arising out of the negligence or willful misconduct of any of the Lessee
      Indemnified Parties) caused by, incurred or resulting from Lessor’s breach of
      any covenants, representations, 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    warranties
      or agreements under this Lease or any negligence or willful misconduct of
      Lessor, its officers, employees, agents or other persons under Lessor’s
      control.

     

    18. Quiet
      Enjoyment.
      So long
      as Lessee shall pay the rental and other sums herein provided and shall keep
      and
      perform all of the terms, covenants and conditions on its part herein contained,
      Lessee shall have, subject and subordinate to Lessor’s rights specifically set
      forth herein, the right to the peaceful and quiet occupancy of the Premises
      without hindrance or interference by Lessor or others claiming by, through
      or
      under Lessor.

     

    19. Condemnation
      or Destruction.

     

    A. In
      the
      event that Lessee or Lessor becomes aware of a taking of all or any part of
      the
      Premises for any public or quasi public purpose by any lawful power or authority
      by exercise of the right of condemnation or eminent domain or by agreement
      between Lessor, Lessee and those authorized to exercise such right (“Taking”) or
      the commencement of any proceedings or negotiations which might result in a
      Taking or any damage to or destruction of the Premises or any part thereof
      (a
“Casualty”), such party will promptly give written notice thereof to the other,
      generally describing the nature and extent of such Taking, proceedings,
      negotiations or Casualty and including copies of any documents or notices
      received in connection therewith. Thereafter, each party shall promptly send
      the
      other copies of all correspondence and pleadings relating to any such Taking,
      proceedings, negotiations or Casualty. During all periods of time following
      a
      Casualty, Lessee shall take reasonable actions to ensure that the Premises
      is
      secure and does not pose any risk of harm to adjoining property owners or
      occupants or third-parties. 

     

    B. In
      the
      event of (i) a Taking of all of the Premises, other than for temporary use,
      (ii)
      a Taking of substantially all of the Premises (other than for temporary use)
      that results in Lessee making a good faith determination that the restoration
      and continued use of the remainder of the Premises as a Permitted Concept would
      be uneconomic (each of (i) and (ii), a “Total Taking”), or (iii) a Casualty of
      all or substantially all of the Premises that results in Lessee making a good
      faith determination that the restoration and continued use of the Premises
      as a
      Permitted Concept would be uneconomic (a “Total Casualty”), if this Lease is
      terminated pursuant to the provisions hereof, Lessor shall be entitled to
      receive the entire award for the Premises, insurance proceeds or payment in
      connection therewith for the Premises without deduction for any leasehold estate
      vested in Lessee by this Lease. Lessee hereby expressly assigns to Lessor all
      of
      its right, title and interest in and to every such award, insurance proceeds
      or
      payment and agrees that Lessee shall not be entitled to any award, insurance
      proceeds or payment for the value of Lessee’s leasehold interest in this Lease.
      Lessee shall be entitled to claim and receive any award or payment from the
      condemning authority expressly granted for the taking of Personal Property,
      the
      interruption of its business and moving expenses, but only if such claim or
      award does not adversely affect or interfere with the prosecution of Lessor’s
      claim for the Total Taking, or otherwise reduce the amount recoverable by Lessor
      for the Total Taking, relating to the Premises. Lessee shall be entitled to
      claim and receive any insurance proceeds with respect to the Personal Property,
      the 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    interruption
      of its business and moving expenses, but only if such claim or proceeds does
      not
      adversely affect or interfere with the prosecution of Lessor’s claim for the
      Total Casualty, or otherwise reduce the amount recoverable by Lessor for the
      Total Casualty, relating to the Premises.

     

    In
      the
      event of a Total Taking or Total Casualty, Lessee shall have the right to
      terminate this Lease by written notice (the “Termination Notice”) given to
      Lessor not later than 45 days after the Total Taking or Total Casualty, as
      applicable. The Termination Notice must: (i) specify a date on which this Lease
      shall terminate, which date shall be the last day of a calendar month occurring
      not earlier than 30 days and not later than 150 days after the delivery of
      such
      notice (the “Early Termination Date”); and (ii) contain a certificate executed
      by the president, chief financial officer or treasurer of Lessee which (X)
      describes the Total Taking or Total Casualty, and (Y) represents and warrants
      that either the whole of the Premises has been taken, or that substantially
      all
      of the Premises has been taken and Lessee has determined in good faith that
      the
      restoration and continued use of the remainder of the Premises as a Permitted
      Concept would be uneconomic, or that either the whole or substantially all
      of
      the Premises has been damaged or destroyed and Lessee has determined in good
      faith that the restoration and continued use of the Premises as a Permitted
      Concept would be uneconomic. If this Lease is terminated pursuant to this
      Section, (i) the net award for such Total Taking or net insurance proceeds
      for such Total Casualty, as applicable, relating to the Premises, after
      deducting all costs, fees and expenses incident to the collection thereof,
      including all costs and expenses incurred by Lessor in connection therewith
      (the
“Net Award”) shall be paid to and belong to Lessor (provided, however, that the
      Net Award shall not include any award or proceeds for the Personal Property,
      the
      interruption of Lessee’s business and moving expenses, all of which shall belong
      to Lessee), (ii) on the Termination Date, Lessee shall pay to Lessor all
      Base Annual Rental, Additional Rental and other sums and obligations accrued
      through the date of Taking or Casualty (and all of the foregoing amounts shall
      abate after the date of Taking or Casualty), and (iii) Lessee shall have no
      obligation to repair or restore the Premises, and all obligations of either
      party hereunder shall cease as of the Termination Date; provided, however,
      Lessee’s and Lessor’s indemnification obligations with respect to the Premises
      under any indemnification provisions of this Lease.

     

    C. In
      the
      event of a Taking of all or any part of the Premises for a temporary use lasting
      not longer than three (3) years (“Temporary Taking”), this Lease shall remain in
      full force and effect without any reduction of Base Annual Rental, Additional
      Rental or any other sum payable hereunder. Except as provided below, Lessee
      shall be entitled to the entire award for a Temporary Taking, whether paid
      in
      the form of damages, rent or otherwise, unless the period of occupation and
      use
      by the condemning authorities shall extend beyond the date of expiration of
      this
      Lease, in which case the award made for such 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 terms of Section 16 above, promptly commence and complete the restoration
      of
      the Premises; provided, however, Lessee shall not be required to restore the
      Premises if the Lease Term shall expire prior to, or within one (1)

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    year
      after, the date of termination of such Temporary Taking, and in such event
      Lessor shall be entitled to recover that portion of the award relating to the
      Temporary Taking, which is attributable to the restoration cost.

     

    D. In
      the
      event of a Taking which is not a Total Taking or a Temporary Taking (“Partial
      Taking”) or of a Casualty which is not a Total Casualty (a “Partial Casualty”),
      all awards, compensation or damages, except amounts paid for Lessee’s Personal
      Property and interruption of its business, shall be paid to Lessor, and Lessor
      shall have the option to (i) terminate this Lease by notifying Lessee within
      60
      days after Lessee gives Lessor notice of such Partial Taking or Partial Casualty
      or that title has vested in the taking authority or (ii) continue this Lease
      in
      effect, which election may be evidenced by either a notice from Lessor to Lessee
      or Lessor’s failure to notify Lessee that Lessor has elected to terminate this
      Lease within such 60 day period. Lessee shall have a period of 60 days after
      Lessor’s notice that it has elected to terminate this Lease which
      is
      actually or deemed to have been issued, during
      which to elect to continue this Lease on the terms herein provided. If Lessor
      elects to terminate this Lease and Lessee does not elect to continue this Lease
      or shall fail during such 60 day period to notify Lessor in writing of Lessee’s
      intent to continue this Lease, then this Lease shall terminate as of the last
      day of the month during which such period expired. Lessee shall then immediately
      vacate and surrender the Premises, all obligations of either party hereunder
      shall cease as of the date of termination (provided, however, Lessee’s and
      Lessor’s obligations under any indemnification provisions of this Lease
      (including, without limitation, Sections 14 and 17) and Lessee’s obligations to
      pay Base Annual Rental, Additional Rental and all other sums (whether payable
      to
      Lessor or a third party,
      reduced
      equitably based on the portion of the Premises which was rendered unusable
      by
      the Taking or Casualty)
      accruing under this Lease prior to the date of termination shall survive such
      termination) and, except for amounts paid for Lessee’s Personal Property,
      interruption of business and moving expenses, Lessor may retain all such awards,
      compensation or damages. If Lessor elects not to terminate this Lease, or if
      Lessor elects to terminate this Lease but Lessee elects to continue this Lease,
      then this Lease shall continue in full force and effect on the following terms:
      (i) all Base Annual Rental, Additional Rental and other sums and obligations
      due
      under this Lease shall abate
      equitably based upon the unusable portion of the Premises until the Premises
      are
      completely restored (and, in the case of a Partial Taking, the foregoing amounts
      shall be equitably reduced after the date on which the Premises are restored,
      for the remainder of the Lease Term, based on the areas of the Premises which
      are taken or rendered unusable as a result of the Partial Taking), and
      (ii)
      Lessor shall assign to Lessee any and all award, compensation or damages
      received by Lessor after deducting all actual and reasonable costs, fees and
      expenses incident to the collection thereof, including all actual and reasonable
      costs and expenses incurred by Lessor in connection therewith (the “Net
      Restoration Amount”), and Lessee shall promptly commence and diligently
      prosecute restoration of the Premises to the same condition, as nearly as
      practicable, as prior to such Partial Taking or Partial Casualty as approved
      by
      Lessor. Lessee shall be entitled to keep any portion of the Net Restoration
      Amount which may be in excess of the cost of restoration and Lessee shall bear
      all additional costs, fees and expenses of such restoration in excess of the
      Net
      Restoration Amount. If this Lease is terminated as a result of a Partial
      Casualty, simultaneously with such termination, 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Lessee
      shall pay Lessor an amount equal to the insurance deductible applicable to
      such
      Partial Casualty.

     

    E. Any
      loss
      under any property damage insurance required to be maintained by Lessee shall
      be
      adjusted by Lessor and Lessee. Any award relating to a Total Taking or a Partial
      Taking shall be adjusted by Lessor and Lessee. Notwithstanding the foregoing
      or
      any other provisions of this Section to the contrary, if at the time of any
      Taking or any Casualty or at any time thereafter an Event of Default shall
      have
      occurred and be continuing under this Lease, 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 an award on account
      of such Taking or for insurance proceeds on account of such Casualty and to
      collect such award or proceeds and apply the same, after deducting all actual
      and reasonable costs, fees and expenses incident to the collection thereof,
      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.

     

    F. Notwithstanding
      the foregoing, nothing in this Section 19 shall be construed as limiting or
      otherwise adversely affecting the representations, warranties, covenants and
      characterizations set forth in Lease.

     

    20. Inspection. Lessor
      and its authorized representatives shall have the right, upon reasonable prior
      notice to Lessee, in a manner reasonably designed to not interfere with Lessee’s
      conduct of its business at the Premises, during normal business hours (or at
      any
      time in the event of an emergency) to enter the Premises or any part thereof
      at
      reasonable times in order to inspect the same and make photographic or other
      evidence concerning Lessee’s compliance with the terms of this Lease or in order
      to show the Premises to prospective purchasers and lenders. Except in the event
      of Lessor’s or its representatives’ or contractors’ negligence or willful
      misconduct, 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 Premises and any other loss occasioned by such entry
      so long as Lessor or its representatives and contractors shall have used
      diligent efforts not to unreasonably interrupt Lessee’s normal business
      operations. Lessee shall keep and maintain at the Premises or Lessee’s chief
      executive office full, complete and appropriate records of Lessee’s repair and
      maintenance of the Premises. Lessee’s repair and maintenance records relating to
      the Premises shall at all reasonable times be open for inspection by Lessor,
      Lender and their respective auditors or other authorized
      representatives.

     

    21. Default,
      Remedies and Measure of Damages. 

     

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

     

    (i) If
      any
      representation or warranty of Lessee set forth in this Lease or of Guarantor
      set
      forth in the Guaranty is false when made in any material respect, 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    or
      if
      Lessee or Guarantor renders any materially false statement or account to Lessor
      or any Lender;

     

    (ii) If
      any
      rent or other monetary sum due under this Lease is not paid within five (5)
      days
      from the date when due; provided, however, notwithstanding the occurrence of
      such an Event of Default, Lessor shall not be entitled to exercise its remedies
      set forth below unless and until Lessor shall have given Lessee written notice
      thereof and a period of five (5) days from Lessee’s receipt of such notice shall
      have elapsed without such Event of Default being cured;

     

    (iii) Subject
      to the provisions of Section 8 of this Lease, 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 Premises pursuant to
      Applicable Regulations and
      if
      such failure is not cured within five (5) days after Lessee’s receipt of
      Lessor’s written notice relating thereto;

     

    (iv) If
      Lessee
      or Guarantor files or notifies Lessor that it intends to file a petition under
      the Code, initiates a proceeding under any similar law or statute relating
      to
      bankruptcy, insolvency, reorganization, winding up or adjustment of debts
      (collectively, hereinafter, an “Action”), becomes the subject of either a
      petition under the Code or an Action, and
      if
      such petition is not withdrawn within ninety (90) days; or if Lessee or
      Guarantor is not generally paying its debts as the same become due, and if
      such
      condition is not cured within sixty (60) days after Lessee’s receipt of Lessor’s
      written notice relating thereto;

     

    (v) If
      Lessee
      fails to maintain insurance in accordance with the requirements of Section
      10 of
      this Lease and if such failure is not cured within five (5) days after Lessee’s
      receipt of Lessor’s written notice relating thereto;

     

    (vii) If
      Lessee
      fails to observe or perform any of the other covenants, conditions, or
      obligations of this Lease; provided, however, if any such failure does not
      involve the payment of any monetary sum, does not place any rights or property
      of Lessor in immediate jeopardy, and is within the reasonable power of Lessee
      to
      promptly cure after Lessee’s receipt of Lessor’s written notice thereof, 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 30 days shall have elapsed from Lessee’s receipt of such notice,
      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 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
      30-day period, which shall in no event exceed 90 days after Lessee’s receipt of
      written notice of such failure from Lessor. If Lessee shall fail to correct
      or
      cure such failure within 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    such
      90-day period, an Event of Default shall be deemed to have occurred hereunder
      without further notice or demand of any kind being required; 

     

    (vii) If
      a
      final, nonappealable judgment is rendered by a court against Lessee which has
      a
      material adverse effect on the ability to conduct business at the Premises
      for
      its intended use, and is not discharged or provision made for such discharge
      within 60 days from the date of entry thereof.

     

    B. Subject
      to Lessor’s obligation to make reasonable efforts to mitigate its damages, upon
      the occurrence of an Event of Default, with or without notice or demand, except
      the notice prior to default required under certain circumstances by
      subsection A above or such other notice as may be required by statute and
      cannot be waived by Lessee (all other notices being hereby waived), 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 (provided,
      however, that Lessor shall not be entitled to duplicative remedies under any
      circumstance whatsoever):

     

    (i) To
      terminate this Lease without any right of Lessee to reinstate Lessee’s rights by
      payment of any rentals due hereunder, including Base Annual Rental and
      Additional Rental, or other performance of the terms and conditions hereof,
      whereupon Lessee’s right to possession of the Premises shall cease (and Lessee
      shall immediately surrender possession of the Premises to Lessor) and this
      Lease, except as to Lessee’s liability accrued prior to such termination, shall
      be terminated. Lessee hereby expressly waives any and all rights of redemption
      granted by or under present or future law in the event this Lease is terminated
      pursuant to the provision of this Paragraph or Lessee is evicted or dispossessed
      by reason of any breach by Lessee of any provisions of the Lease.

     

    (ii) To
      reenter and take possession of the Premises, any or all Personal Property and,
      to the extent permissible, all franchises, licenses, area development
      agreements, permits and other rights or privileges of Lessee pertaining to
      the
      use and operation of the Premises and to 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, except in the event
      of Lessor’s negligence or willful misconduct, 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 the occurrence of an Event of Default,
      voluntarily give up possession of the Premises to Lessor, deliver to Lessor
      or
      its agents the keys to the Premises, 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 this Lease. Lessor
      reserves the right following any reentry 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.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (iii) To
      seize
      all Personal Property (subject to any and all rights thereto and security and
      other interests therein held by lenders of Lessee or any of its affiliates),
      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 Personal 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,
      except in the event of Lessor’s negligence or willful misconduct, and without
      resorting to legal or judicial process, procedure or action.

     

    (iv) To
      bring
      an action against Lessee for any actual damages sustained by Lessor or any
      equitable relief available to Lessor.

     

    (v) To
      relet
      the Premises or any part thereof for such term or terms (including a term which
      extends beyond the original Lease Term), at such rentals and upon such other
      terms as Lessor, in its reasonable discretion, may determine, with all proceeds
      received from such reletting being applied to the rental and other sums due
      from
      Lessee in such order as Lessor, may, in its reasonable discretion, determine,
      which other sums include, without limitation, all actual and reasonable
      repossession costs, brokerage commissions, attorneys’ fees and expenses,
      employee expenses, alteration, remodeling and repair costs and expenses of
      preparing for such reletting. Except to the extent required by applicable law,
      and subject to Lessor’s obligation to make reasonable efforts to mitigate its
      damages, Lessor shall have no obligation to relet the Premises or any part
      thereof and shall in no event be liable for refusal or failure to relet the
      Premises or any part thereof, or, in the event of any such reletting, for
      refusal or failure to collect any rent due upon such reletting, and no such
      refusal or failure shall operate to relieve Lessee of any liability under this
      Lease or otherwise to affect any such liability. Lessor reserves the right
      following any such reentry 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.

     

    (vi) To
      accelerate and recover from Lessee all rent and other monetary sums 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
      discounted to present value
      and
      reduced by the fair rental value of the Premises for the remainder of the
      original scheduled Lease Term.

     

    (vii) To
      recover from Lessee all reasonable and actual costs and expenses, including
      attorneys’ fees, court costs, expert witness fees, costs of tests and analyses,
      travel and accommodation expenses, deposition and trial transcripts, copies
      and
      other similar actual and reasonable costs and fees, paid or incurred by Lessor
      as a result of such Event of Default.

     

    (viii) 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 reasonable and actual costs and expenses 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 Rent hereunder and shall be
      immediately due from Lessee to Lessor.

     

    (ix) 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
      against any sum owing by Lessee.

     

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

     

    (xii) To
      enforce, and Lessee does hereby consent to such enforcement, all of Lessor’s
      self-help remedies available at law or in equity without Lessor resorting to
      any
      legal or judicial process, procedure or action.

     

    Lessee
      and Lessor expressly waives any right of defense which such party may have
      based
      on any purported merger of any cause of action, and neither the commencement
      of
      any action or proceeding nor the settlement thereof or entering of judgment
      therein shall bar such party from bringing subsequent actions or proceedings
      from time to time. Any law, usage or custom to the contrary notwithstanding,
      Lessor shall have the right at all times to enforce all terms, conditions and
      covenants hereof in strict accordance herewith, notwithstanding any conduct
      or
      custom on the part of Lessor in refraining from so doing at any time or times.
      Further, the failure of any party at any time or times to enforce its rights
      hereunder strictly in accordance with the same shall not be construed as having
      created a custom in any way or manner contrary to any specific term, condition
      or covenant hereof, or as having in any way or manner modified the
      same.
      All
      powers and remedies given by this Section to Lessor and Lessee, 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 such
      party under this Lease, by judicial proceedings or otherwise, to enforce the
      performance or observance of the covenants and agreements of the other party
      contained in this Lease, and no delay or omission of such party to exercise
      any
      right or power accruing upon the occurrence of any Event of Default (or Lessor’s
      breach of this Lease, as applicable) shall impair any other or subsequent Event
      of Default (or Lessor’s breach of this Lease, as applicable) or impair any
      rights or remedies consequent thereto. Every power and remedy given by this
      Section or by law to Lessor or Lessee may be exercised from time to time,
      and as often as may be deemed expedient, by such party, subject at all times
      to
      such party’s right in its sole judgment to discontinue any work commenced by
      such party or change any course of action undertaken by such party.

     

    In
      the
      event of an emergency, then, without waiving any Event of Default which may
      result from such emergency, Lessor may, but without any obligation to do so,
      take all reasonable and necessary actions in connection therewith, including,
      without limitation, enter upon the Premises to perform Lessee’s obligations,
      immediately and without notice. All reasonable and actual expenses incurred
      by
      Lessor in connection with performing such obligations of Lessee, including,
      without limitation, reasonable attorneys’ fees and expenses, together with
      interest at the Default Rate from the date 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    any
      such
      expenses were incurred by Lessor until the date of payment by Lessee, shall
      constitute Additional Rental and shall be paid by Lessee to Lessor upon
      demand.

     

    Should
      Lessor default in the performance of any covenant or agreement herein, and
      such
      default continue for thirty (30) days after receipt by Lessor of written notice
      thereof from Lessee, Lessee may (i) terminate this Lease upon written notice
      to
      Lessor; or (ii) pay any sums necessary to perform any obligation of Lessor
      in
      default hereunder and require Lessor to reimburse such sum to Lessee within
      five
      (5) business days of Lessor’s receipt of Lessee’s written demand therefor; or
      (iii) pursue any other available legal or equitable remedy. In the event Lessee
      reasonably and actually incurs any expenses because of Lessor’s failure to
      fulfill its obligations set forth in this Lease, Lessor agrees to reimburse
      Lessee for such expense upon written demand by Lessee. In the event of an
      emergency, then, without waiving any default by Lessor hereunder which may
      result from such emergency, Lessee may, but without any obligation to do so,
      take all reasonable and necessary actions in connection with such emergency,
      including, without limitation, performing Lessor’s obligations, immediately and
      without notice. All reasonable and necessary expenses actually incurred by
      Lessee in connection with performing such obligations, including, without
      limitation, reasonable attorneys’ fees and expenses, shall be paid by Lessor to
      Lessee within five (5) business days of Lessor’s receipt of Lessee’s written
      demand therefor. 

     

    23. Mortgage,
      Subordination, Nondisturbance and Attornment.
      Lessor’s
      interest in this Lease and/or the Premises shall not be subordinate to any
      encumbrances placed upon the Premises by or resulting from any act of Lessee,
      and nothing herein contained shall be construed to require such subordination
      by
      Lessor. Lessee shall keep the Premises free from any liens for work performed,
      materials furnished or obligations incurred by Lessee. EXCEPT AS OTHERWISE
      CONSENTED TO BY LESSOR PURSUANT TO SECTION 25, NOTICE IS HEREBY GIVEN THAT
      LESSEE IS NOT AUTHORIZED TO PLACE OR ALLOWED TO BE PLACED ANY LIEN, MORTGAGE,
      DEED OF TRUST OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART OF THE PREMISES
      OR
      LESSEE’S LEASEHOLD INTEREST THEREIN, AND ANY SUCH PURPORTED TRANSACTION SHALL BE
      VOID. FURTHERMORE, ANY SUCH PURPORTED TRANSACTION SHALL BE DEEMED A TORTIOUS
      INTERFERENCE WITH LESSOR’S RELATIONSHIP WITH LESSEE AND LESSOR’S FEE OWNERSHIP
      OF THE PREMISES.

     

    This
      Lease at all times shall automatically be subordinate to the lien of any and
      all
      ground leases, mortgages and trust deeds now or hereafter placed upon the
      Premises by Lessor, whose
      holder provides Lessee with non-disturbance agreements reasonably acceptable
      to
      Lessee, 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, mortgages or trust deeds as shall be desired by Lessor, or any present
      or proposed mortgagees or trustees under trust deeds, substantially in the
      form
      attached hereto as Exhibit C and made a part hereof, upon the condition that
      Lessee shall have the right to remain in possession of the Premises under the
      terms of this Lease, notwithstanding any default in any or all such mortgages
      or
      trust deeds, or after 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    foreclosure
      thereof, so long as no Event of Default shall have occurred and be
      continuing
      and that
      Lessor’s successor in interest shall assume and perform Lessor’s obligations
      hereunder.

     

    If
      any
      mortgagee or trustee elects to have this Lease and the interest of Lessee
      hereunder be superior to any such interest or right and evidences such election
      by notice given to Lessee, then this Lease and the interest of Lessee hereunder
      shall be deemed superior to any such mortgage or trust deed, whether this Lease
      was executed before or after such mortgage or trust deed and in that event
      such
      mortgagee or trustee shall have the same rights with respect to this Lease
      as if
      it had been executed and delivered prior to the execution and delivery of the
      mortgage or trust deed and has been assigned to such mortgagee or
      trustee.

     

    Although
      the foregoing provisions shall be self-operative and no future instrument of
      subordination shall be required, upon request by Lessor, Lessee shall execute
      and deliver whatever instruments may be required for such purposes in form
      and
      substance reasonably acceptable to Lessee, in exchange for non-disturbance
      assurances reasonably satisfactory to Lessee.

     

    In
      the
      event any purchaser or assignee of any Lender at a judicial or nonjudicial
      foreclosure sale acquires title to the Premises, or in the event any Lender
      or
      any purchaser or assignee otherwise succeeds to the rights of Lessor as landlord
      under this Lease, Lessee shall attorn to such Lender or such purchaser or
      assignee, as the case may be (a “Successor Lessor”), and recognize the Successor
      Lessor as lessor under this Lease, so long as the Successor Lessor assumes
      and
      performs Lessor’s obligations hereunder, and, subject to the provisions of this
      Section, 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 the 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.

     

    Lessee
      shall give written notice to any Lender, whose name and address are provided
      to
      Lessee by Lessor in writing, having a recorded lien upon any of the Premises
      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 simultaneously with the giving
      of such notice to Lessor, and Lessee shall give such Lender at least thirty
      (30)
      days beyond any notice period to which Lessor might be entitled to cure such
      default before Lessee may exercise any remedy with respect thereto. Upon request
      by Lessor, Lessee shall also provide Guarantor’s most recent annual or quarterly
      report filed with the Securities and Exchange Commission to Lessor or any such
      Lender, if such report is not available on the Internet.

     

    24. Estoppel
      Certificate.
      At any
      time, and from time to time, Lessee agrees, promptly and in no event later
      than
      20 days after Lessee’s receipt of a written request from Lessor, to execute,
      acknowledge and deliver to Lessor or any present or proposed mortgagee or
      purchaser designated by Lessor a certificate substantially in the form

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    attached
      hereto as Exhibit D, certifying: (i) that Lessee has accepted the Premises
      (or, if Lessee has not done so, that Lessee has not accepted the Premises,
      and
      specifying the reasons therefor); (ii) 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; (iii) the commencement
      and expiration dates of the Lease Term and the terms of any extension options
      of
      Lessee; (iv) the date to which the rentals have been paid under this Lease
      and the amount thereof then payable; (v) whether there are then, to
      Lessee’s actual knowledge, 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; (vi) 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; (vii) the capacity of
      the person executing such certificate, and that such person is duly authorized
      to execute the same on behalf of Lessee; and (viii) any other information
      reasonably requested by Lessor, or its present or proposed purchaser or
      mortgagee.

     

    25. Assignment.
      Lessor
      shall have the right to sell or convey the Premises subject to this Lease or
      to
      assign its right, title and interest as Lessor under this Lease in whole or
      in
      part. In the event of any such sale or assignment other than a security
      assignment, Lessee shall attorn to such purchaser or assignee which assumes
      and
      agrees in writing to perform Lessor’s obligations under this Lease from and
      after the effective date of such assumption, a copy of which assumption shall
      be
      provided to Lessee, and 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.

     

    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 Premises in entering into this Lease. Without
      the prior written consent of Lessor: (i) Lessee shall not assign, transfer,
      convey, pledge or mortgage this Lease or any interest therein, whether by
      operation of law or otherwise to any Person not controlled by Guarantor; (ii)
      no
      Change of Control shall occur; (iii) no interest in Lessee shall be pledged,
      encumbered, hypothecated or assigned as collateral for any obligation of Lessee
      or Guarantor, and (iv) Lessee shall not sublet all or any part of the Premises
      to any Person not controlled by Guarantor (each of items (i) through (iv) are
      hereinafter referred to as a “Prohibited Transaction”). In addition, no interest
      in Lessee shall be transferred, assigned or conveyed to any individual or person
      whose property or interests are subject to being blocked under any of the OFAC
      Laws and Regulations and/or who is in violation of any of the OFAC Laws and
      Regulations, and any such transfer, assignment or conveyance shall not be
      effective until the transferee has provided written certification to Lessor
      that
      (A) the transferee or any person who owns directly or indirectly any
      interest in transferee, is not an individual or entity whose property or
      interests are subject to being blocked under any of the OFAC Laws and
      Regulations or is otherwise in violation of the OFAC Laws and Regulations,
      and
      (B) the transferee has taken reasonable measures to assure than any
      individual or entity who owns directly or indirectly any interest in transferee,
      is not an individual or entity whose 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    property
      or interests are subject to being blocked under any of the OFAC Laws and
      Regulations or is otherwise in violation of the OFAC Laws and Regulations;
      provided, however, the covenant contained in this sentence shall not apply
      to
      any Person to the extent that such Person’s interest is in or through a U.S.
      Publicly Traded Entity. Notwithstanding anything to the contrary contained
      herein, Lessee shall have the right at any time and from time to time to cause
      any Affiliate of Lessee or Guarantor to operate its business at the Premises,
      through a sublease, assignment or otherwise, so long as such business does
      not
      deviate from the Permitted Concept and in all other respects is in compliance
      with the terms and provisions hereof.

     

    Lessor’s
      consent to a Prohibited Transaction shall be subject to the satisfaction of
      such
      conditions as Lessor shall determine in its reasonable discretion, including,
      without limitation, (i) Lessee having executed and delivered such non-material
      modifications to the terms of this Lease as Lessor shall reasonably request,
      (ii) the proposed transferee having assumed this Lease, (iii) payment to Lessor
      of fifty percent (50%) of any gross rentals payable under a sublease which
      are
      in excess of any and all rentals, taxes, utilities, insurance and other amounts
      payable by Lessee under this Lease (net of Lessee’s reasonable and actual
      sublease related costs), and (iv) the proposed transferee having satisfactory
      creditworthiness and satisfactory experience operating a Permitted Concept.
      In
      addition, any such consent shall be conditioned upon the payment by Lessee
      to
      Lessor of an amount not to exceed $3,000 per consent granted to reimburse Lessor
      for all out-of-pocket costs and expenses reasonably and actually incurred by
      Lessor in connection with such consent, including, without limitation,
      reasonable attorneys’ fees. The provisions of this Section shall apply to every
      Prohibited Transaction regardless of whether voluntary or not, or whether or
      not
      Lessor has consented to any previous Prohibited Transaction. No assignment
      of
      this Lease or subletting of the Premises shall relieve Lessee of its obligations
      under this Lease or any guarantor of this Lease of any of its obligations under
      its guaranty. Any Prohibited Transaction in violation of this Section shall
      be
      voidable at the sole option of Lessor.

     

    26. Option
      To Extend.
      Lessee,
      provided an Event of Default shall not have occurred and be continuing at the
      time of exercise or at the expiration of the Lease Term or, if applicable,
      the
      first extension of the Lease Term, shall have the option to continue this Lease
      in effect for up to two (2) additional successive periods of five (5) years
      each
      in accordance with the terms and provisions of this Lease then in effect,
      including, without limitation, adjustments in the Base Annual Rental during
      such
      extension term in accordance with the provisions of Section 4. If
      Lessee
      desires to extend the term of this Lease, Lessee shall exercise such extension
      option by giving written notice to Lessor of Lessee’s intention to do so not
      less than 210 days prior to the expiration of the Lease Term or the then
      applicable Lease Term.

     

    27. Notices.
      All
      notices, consents, approvals or other instruments required or permitted to
      be
      given by either party pursuant to this Lease shall be in writing and given
      by
      (i) hand delivery, (ii) facsimile, (iii) express overnight
      delivery service providing delivery confirmation or (iv) certified or
      registered mail, return receipt requested, and shall be

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    deemed
      to
      have been delivered upon (a) receipt, if hand delivered, (b) confirmed
      transmission, if delivered by facsimile, (c) the next Business Day, if delivered
      by express overnight delivery service, or (d) 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. Notices shall be
      provided to the parties and addresses (or facsimile numbers, as applicable)
      specified below:

     

    
      	
              If
                to Lessee:

            	
              COST-U-LESS

            

    

    
      	 	
              3633
                136th
                Place SE, Ste. 110

            

    

    Bellevue,
      WA 98006

    Attn:
      Martin Moore

    Tel.:
      (425) 945-0213

    Fax:
      (425) 945-0214

    With
      copies to:

                         David
      D. Buck

    Riddell
      Williams P.S.

    1001
      Fourth Avenue, Suite 4500

    Seattle,
      WA 98154

    Tel.:
      (206) 624-3600

    
      	 	 	
              Fax:
                (206) 389-1708

            

    

     

    
      	
              If
                to Lessor:

            	
              Cole
                CL St. Croix USVI, LLC, a Delaware limited liability
                company

            

    

    Attention:
      Legal Department

    2555
      E.
      Camelback Road

    Suite
      400

    Phoenix,
      AZ 85016

    Telephone: (602)
      778-8700

    Telecopy: (602)
      778-8780

     

    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.

     

    28. Holding
      Over.
      If
      Lessee remains in possession of the Premises after the expiration of the Lease
      Term, 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 sums in the amounts herein provided, except that, unless otherwise agreed
      by and between Lessor and Lessee in writing, 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 to comply with all the terms
      of this Lease; provided that nothing herein nor the acceptance of rent by Lessor
      shall be deemed a consent to such holding over without Lessor’s express written
      consent to such holding over. If Lessee holds over without Lessor’s express
      written consent, Lessee shall defend, indemnify, protect and hold the
      Indemnified Parties harmless for, from and against any and all Losses resulting
      from Lessee’s failure to surrender possession upon the expiration of the Lease
      Term, including, without limitation, any claims made by any succeeding
      lessee.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    29. Removal
      of Lessee’s Property.
      At the
      expiration of the Lease Term, and if no Event of Default has occurred and is
      then continuing, Lessee may remove from the Premises all Personal Property;
      provided, however, that Lessee shall surrender the Premises with any and all
      HVAC equipment, walk-in coolers and walk-in freezers then located at the
      Premises, free of charge, in their then-existing condition, AS IS, WHERE IS,
      WITH ALL FAULTS. Lessee shall repair any damage caused by such removal and
      shall
      leave the Premises broom clean and in good and working condition and repair
      inside and out, subject to ordinary wear and tear and, in the event this Lease
      is terminated pursuant to Section 19 hereof due to a casualty or condemnation,
      casualty and condemnation damages. Any property of Lessee left on the Premises
      on the thirtieth (30th)
      day
      following the expiration of the Lease Term shall, at Lessor’s option,
      automatically and immediately become the property of Lessor. Lessor hereby
      waives any and all statutory or other liens it may have on the Personal
      Property.

     

    31. Financial
      Statements.
      Upon
      Lessor’s request, at any time after the filing of the applicable report with the
      Securities and Exchange Commission, Lessee shall deliver to Lessor a copy of
      the
      most recent annual or quarterly report of Guarantor filed with the Securities
      and Exchange Commission, if such report is not available on the Internet. Lessee
      and, by execution of the Guaranty, Guarantor, understand that Lessor is relying
      upon such reports and Lessee and Guarantor represent that such reliance is
      reasonable.

     

    32. 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 shall excuse the performance by such
      party for a period equal to any such prevention, delay or stoppage, except
      the
      obligations imposed with regard to rental and other monies to be paid by Lessee
      pursuant to this Lease.

     

    33. Time
      is of the Essence.
      Time is
      of the essence with respect to each and every provision of this Lease in which
      time is a factor.

     

    35. Lessor’s
      Liability.
      Notwithstanding anything to the contrary provided in this Lease, it is
      specifically understood and agreed, such agreement being a primary consideration
      for the execution of this Lease by Lessor, that (i) there shall be
      absolutely no personal liability on the part of Lessor, its successors or
      assigns and the trustees, members, partners, shareholders, officers, directors,
      employees and agents of Lessor and its successors or assigns (collectively,
      the
“Lessor Parties”), to Lessee with respect to any of the terms, covenants and
      conditions of this Lease (except as set forth in subparagraph (iii) below),
      (ii) Lessee waives all claims, demands and causes of action against the
      Lessor Parties in the event of any breach by Lessor of any of the terms,
      covenants and conditions of this Lease to be performed by Lessor (except as
      set
      forth in subparagraph (iii) below), and (iii) Lessee shall look solely to
      Lessor’s and the Lessor Parties’ interest in the Premises for the satisfaction
      of each and every remedy of Lessee in the event of any breach by Lessor of
      any
      of the terms, covenants and conditions of this Lease to be performed by Lessor,
      or any other matter in connection with this Lease or the 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Premises,
      such exculpation of liability to be absolute and without any exception
      whatsoever.

     

    36. Consent
      of Lessor.
      Unless
      specified otherwise herein, Lessor’s consent to any request of Lessee may be
      conditioned or withheld in Lessor’s reasonable discretion. Lessor shall have no
      liability for damages resulting from Lessor’s failure to give any consent,
      approval or instruction reserved to Lessor, if such failure is reasonable,
      Lessee’s sole remedy in any such event being an action for injunctive
      relief.

     

    37. 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. Unless otherwise stated by Lessor in writing,
      no
      acceptance by Lessor of an amount less than the monthly rent and other payments
      stipulated to be due under this Lease shall be deemed to be other than a payment
      on account of the earliest such rent or other payments 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.

     

    38. 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.

     

    39. No
      Merger.
      The
      voluntary or other surrender of this Lease by Lessee, or a mutual cancellation
      thereof, shall not result in a merger of Lessor’s and Lessee’s estates, and
      shall, at the option of Lessor, either terminate any or all existing subleases
      or subtenancies, or operate as an assignment to Lessor of any or all of such
      subleases or subtenancies.

     

    40. 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.

     

    41. Severability.
      The
      provisions of this Lease shall be deemed severable. If any part of this Lease
      shall be held unenforceable by any court of competent jurisdiction, the
      remainder shall remain in full force and effect, and such unenforceable
      provision shall be reformed by such court so as to give maximum legal effect
      to
      the intention of the parties as expressed therein.

     

    42. Independent
      Counsel.
      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.

     

    43. Easements.
      During
      the Lease Term Lessor shall have the right to grant utility easements on, over,
      under and above the Premises without the prior consent of Lessee, provided
      that
      such easements will not materially interfere with Lessee’s conduct of its
      business at the Premises.

     

    44. Bankruptcy.

     

    A. As
      a
      material inducement to Lessor executing this Lease, Lessee acknowledges and
      agrees that Lessor is relying upon (i) the financial condition and specific
      operating experience of Lessee and Lessee’s obligation to use the Premises as a
      Permitted Concept, (ii) Lessee’s timely performance of all of its
      obligations under this Lease notwithstanding the entry of an order for relief
      under the Code for Lessee and (iii) all defaults under this Lease being
      cured promptly and this Lease being assumed within 60 days of any order for
      relief entered under the Code for Lessee, or this Lease being rejected within
      such 60 day period and the Premises surrendered to Lessor.

     

    Accordingly,
      in consideration of the mutual covenants contained in this Lease and for other
      good and valuable consideration, Lessee hereby agrees that:

     

    (i) All
      obligations that accrue or become due under this Lease (including the obligation
      to pay rent), from and after the date that an Action is commenced shall be
      timely performed exactly as provided in this Lease and any failure to so perform
      shall be harmful and prejudicial to Lessor;

     

    (ii) Any
      and
      all obligations under this Lease that accrue or become due from and after the
      date that an Action is commenced and that are not paid as required by this
      Lease
      shall, in the amount of such rents, constitute administrative expense claims
      allowable under the Code with priority of payment at least equal to that of
      any
      other actual and necessary expenses incurred after the commencement of the
      Action;

     

    (iii) Any
      extension of the time period within which Lessee may assume or reject this
      Lease
      without an obligation to cause all obligations accruing or coming due under
      this
      Lease from and after the date that an Action is commenced to be performed as
      and
      when required under this Lease shall be harmful and prejudicial to
      Lessor;

     

    (iv) Any
      time
      period designated as the period within which Lessee must cure all defaults
      and
      compensate Lessor for all pecuniary losses which extends beyond the date of
      assumption of this Lease shall be harmful and prejudicial to Lessor;

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (v) Any
      assignment of this Lease must result in all terms and conditions of this Lease
      being assumed by the assignee without alteration or amendment, and any
      assignment which results in an amendment or alteration of the terms and
      conditions of this Lease without the express written consent of Lessor shall
      be
      harmful and prejudicial to Lessor;

     

    (vi) Any
      proposed assignment of this Lease to an assignee: (a) that will not use the
      Premises as a Permitted Concept, (b) that does not possess financial condition,
      operating performance and experience characteristics equal to or better than
      the
      financial condition, operating performance and experience of Lessee as of the
      Effective Date, or (c) that does not provide guarantors of this Lease
      obligations with financial condition equal to or better than the financial
      condition of the original guarantors of this Lease as of the Effective Date,
      shall be harmful and prejudicial to Lessor; and

     

    (vii) The
      rejection (or deemed rejection) of this Lease for any reason whatsoever shall
      constitute cause for immediate relief from the automatic stay provisions of
      the
      Code, and Lessee stipulates that such automatic stay shall be lifted immediately
      and possession of the Premises will be delivered to Lessor immediately without
      the necessity of any further action by Lessor.

     

    B. No
      provision of this Lease shall be deemed a waiver of Lessor’s rights or remedies
      under the Code or applicable law to oppose any assumption and/or assignment
      of
      this Lease, to require timely performance of Lessee’s obligations under this
      Lease, or to regain possession of the Premises as a result of the failure of
      Lessee to comply with the terms and conditions of this Lease or the Code.

     

    C. Notwithstanding
      anything in this Lease to the contrary, all amounts payable by Lessee to or
      on
      behalf of Lessor under this Lease, whether or not expressly denominated as
      such,
      shall constitute “rent” for the purposes of the Code.

     

    D. For
      purposes of this Section addressing the rights and obligations of Lessor and
      Lessee in the event that an Action is commenced, the term “Lessee” shall include
      Lessee’s successor in bankruptcy, whether a trustee, Lessee as debtor in
      possession or other responsible person.

     

    45. No
      Offer.
      No
      contractual or other rights shall exist between Lessor and Lessee with respect
      to the Premises until both have executed and delivered this Lease,
      notwithstanding that deposits may have been received by Lessor and
      notwithstanding that Lessor may have delivered to Lessee an unexecuted copy
      of
      this Lease. The submission of this Lease to Lessee or Lessor shall be for
      examination purposes only, and does not and shall not constitute a reservation
      of or an option for Lessee or Lessor to lease or otherwise create any interest
      on the part of Lessee in the Premises.

     

    46. Further
      Assurances. Each
      of
      the parties agrees to do, execute, acknowledge and deliver or cause to be done,
      executed, acknowledged and delivered all such further acts, documents and
      assurances as may be reasonably required or 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    deemed
      advisable to carry into effect the purposes of this Lease, and for the better
      assuring and confirming of all of Lessor’s and Lessee’s rights, powers and
      remedies under this Lease.

     

    47. Attorneys’
      Fees.
      In the
      event of any judicial or other adversarial proceeding between the parties
      concerning this Lease, to the extent permitted by law, the prevailing party
      shall be entitled to recover all of its reasonable and actual attorneys’ fees
      and other costs in addition to any other relief to which it may be entitled.
      In
      addition, upon the default hereunder by the other party, the party not in
      default shall, upon demand, be entitled to all reasonable and actual attorneys’
fees and all other costs incurred in the preparation and service of any notice
      or demand hereunder, whether or not a legal action is subsequently
      commenced.

     

    48. Entire
      Agreement.
      This
      Lease constitutes 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. Without limiting the foregoing, each
      of
      Lessor and Lessee specifically acknowledges that neither the other party nor
      any
      agent, officer, employee or representative of such other party has made any
      representation or warranty regarding the projected profitability of owning,
      or
      conducting the business to be conducted on, the Premises. Furthermore, each
      of
      Lessor and Lessee acknowledges that the other party did not prepare or assist
      in
      the preparation of any of the projected figures used by such party in analyzing
      the economic viability and feasibility of owning, or conducting the business
      to
      be conducted by Lessee at, the Premises.

     

    49. Forum
      Selection; Jurisdiction; Venue; Choice of Law.

     

    A. The
      parties hereto agree that the state and federal courts located in King County,
      Washington, shall be the sole and exclusive forum for any and all litigation
      arising out of or in connection with this Lease, the relationship of Lessor
      and
      Lessee, Lessee’s use or occupancy of the Premises, and/or any claim for injury
      or damage, or any emergency or statutory remedy. The parties hereto expressly
      submit to the jurisdiction of said courts, and agree that venue is proper for
      all such actions in said courts. 

     

    B. The
      creation of this Lease, its interpretation, construction, and enforcement,
      and
      the rights and remedies of Lessor and Lessee with respect to the Premises and
      under this Lease, shall be governed by the laws of the State of Washington
      without regard to principles of conflict of law. 

     

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

     

    51. Joint
      and Several Liability.
      If
      Lessee consists of more than one individual or entity, each such individual
      and/or entity shall be jointly and severally liable for all obligations of
      Lessee under this Lease.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    52. 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 attached hereto as
      Exhibit B and made a part hereof, indicating the names and addresses of Lessor
      and Lessee, a description of the Premises, the Lease Term and the terms of
      any
      options to extend the Lease Term, but omitting rent and such other terms of
      this
      Lease as Lessor and Lessee may not desire to disclose to the public. Further,
      upon Lessor’s request, Lessee agrees to execute and acknowledge a termination of
      lease and/or quit claim deed in recordable form upon the expiration or sooner
      termination of the Lease Term.

     

    53. No
      Brokerage.
      Lessor
      and Lessee represent and warrant to each other that they have had no
      conversation or negotiations with any broker concerning the leasing of the
      Premises (except in connection with Lessee’s sale of the Premises pursuant to
      the Purchase Agreement). Each of Lessor and Lessee agrees to protect, indemnify,
      save and keep harmless the other, against and from all liabilities, claims,
      losses, costs, damages and expenses, including attorneys’ fees, arising out of,
      resulting from or in connection with their breach of the foregoing warranty
      and
      representation.

     

    54. Waiver
      of Jury Trial and Punitive, Consequential, Special and Indirect
      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 PREMISES, 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, EACH OF LESSOR AND LESSEE
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE
      TO
      SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM THE OTHER PARTY
      WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM
      OR
      COUNTERCLAIM BROUGHT BY IT AGAINST THE OTHER PARTY OR ITS SUCCESSORS WITH
      RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE OR ANY
      DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY EACH OF LESSOR
      AND
      LESSEE OF ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND
      INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN ESSENTIAL
      ASPECT OF THEIR BARGAIN.

     

    55. OFAC
      Laws and Regulations.
      Lessee
      shall immediately notify Lessor in writing if Lessee becomes aware that any
      individual or entity owning directly or indirectly any interest in Lessee or
      any
      director, officer, member, manager or partner of Lessee is an individual or
      entity whose property or interests are subject to being blocked under

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    any
      of
      the OFAC Laws and Regulations or is otherwise in violation of any of the OFAC
      Laws and Regulations, or is under investigation by any governmental entity
      for,
      or has been charged with, or convicted of, drug trafficking, terrorist-related
      activities or any violation of 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, the
      covenant contained in this sentence shall not apply to any Person to the extent
      that such Person’s interest is in or through a U.S. Publicly-Traded Entity.

     

    56. Transfer,
      Participation and/or Securitization Covenants.
      Lessee
      agrees to cooperate in good faith with Lessor, and the holder of any security
      interest in the Premises, in connection with any sale or transfer of the
      Premises by Lessor or any transfer, participation, syndication and/or
      securitization of any security interest in the Premises, or any or all servicing
      rights with respect thereto, by providing an estoppel certificate substantially
      in the form attached hereto as Exhibit D, which would be required with
      respect to Lessee by a purchaser of the Premises and/or a purchaser, transferee,
      assignee, servicer, participant, co-lender, investor or rating agency involved
      with respect to any transfer, participation, syndication and/or securitization
      of any security interest in the Premises, as applicable; provided, however,
      Lessee shall not be required to deliver any other document or disclose any
      confidential information or any information which has not previously been made
      public unless required by applicable federal or state securities laws. Lessee
      may, in Lessee’s sole discretion, without any obligation to do so, agree to
      amend the terms of this Lease to the extent necessary so as to satisfy the
      requirements of purchasers, transferees, assignees, servicers, participants,
      co-lenders, investors or selected rating agencies involved in any such transfer,
      participation, syndication or securitization, so long as such amendments would
      not have a material adverse effect upon Lessee, Guarantor or the transactions
      contemplated by this Lease. Notwithstanding the foregoing, Lessee acknowledges
      and agrees that Lessor may disclose to any prospective purchaser of the Premises
      the annual and quarterly reports of Guarantor obtained by Lessor pursuant to
      Section 31 of this Lease. Lessor shall be responsible for causing the lender
      undertaking any of the transactions contemplated by this Section to prepare
      at
      no expense to Lessee any documents evidencing the amendments referred to in
      the
      preceding sentence. Lessee consents to Lessor and such holder providing the
      estoppel certificate, as well as any other information which Lessor and such
      holder may now have or hereafter acquire with respect to the Premises or the
      financial condition of Lessee or Guarantor to each prospective purchaser of
      the
      Premises as well as each prospective purchaser, transferee, assignee, servicer,
      participant, co-lender, investor or rating agency involved with respect to
      any
      such transfer, participation, syndication and/or securitization of any security
      interest in the Premises, as applicable. Lessee shall pay its own attorney
      fees
      and other out-of-pocket expenses incurred in connection with the performance
      of
      its obligations under this Section.

     

    57. Power
      House Encroachment.
      Reference is hereby made to the ALTA/ACSM Land Title Survey of Plot No.’s 4-Q,
      4-M & Road Plot No. 4-O, Estate Sion Farm, Christiansted Jurisdiction, Queen
      Quarter, St. Croix, United States Virgin Islands, 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    dated
      February 5, 2007 (the “Survey”), prepared by Survey Services Company, LLC, and
      to the masonry building (which is also referred to as “One Sty. Masonry Power
      House” on Pages 2 and 3 of the Survey)(the “Power House”) referenced in the
“List of Encroachments” on Page 1 of the Survey (which reads, in part, as
      follows: “1) A masonry building located along the west line of Plot No. 4-Q is
      9.2’ into A Portion of the Remainder of Plot No. 4-J.”).

     

    Lessee
      hereby agrees that, within one (1) year after the Effective Date and at Lessee’s
      expense, Lessee shall either:

     

    (a) relocate
      the “Power House” so that no part of the Power House will be located on any part
      of “Easement ‘B’” or Plot No. 4-J identified on the Survey; or

     

    (b) obtain
      from (i) the owner of Plot No. 4-J an easement to permit the continued presence
      of the Power House at its current location for a term and upon conditions
      reasonably acceptable to Lessor; and (ii) obtain a waiver of the encroachment
      from the holder of the easement rights to “Easement ‘B’” and “Easement ‘C’”
referenced above.

     

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

     

    LESSOR:

     

    Cole
      CL
      St. Croix USVI, LLC, a Delaware limited liability company

    

    By:
      Cole
      REIT Advisors II, LLC,

    a
      Delaware limited liability company

    Its:
      Manager

     

    By
      /s/
      John M. Pons

    Printed
      Name John
      M. Pons

    Its
      Executive
      Vice President

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    LESSEE:

    

    

    CULUSVI,
      INC., d/b/a COST-U-LESS,

    a
      U.S.
      Virgin Islands corporation

    

    

    By
      /s/
      J.
      Jeffrey Meder

    Printed
      Name  J.
      Jeffrey Meder

    Its
      President

    

    

    Lessee’s
      Tax Identification Number:

     

    91-1728198 

    

    Lessee’s
      Organization Identification Number:

    

    __________

    

    Lessee’s
      Principal Place of Business:

    

    U.S.V.I. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    STATE
      OF
      WASHINGTON    )

                        
      ) ss.

    COUNTY
      OF
      KING        
)

    

    

    On
      this
      __21___
      day
      of ___March______,
      2007, before me personally appeared                J.
      Jeffrey Meder,
        President                                  ,
      of
      CULUSVI, INC., a U.S. Virgin Islands corporation, to me known to be the
      individual who executed the within and foregoing instrument, and acknowledged
      that he signed the same as his free and voluntary act and deed, for the uses
      and
      purposes therein mentioned.

     

    GIVEN
      under my hand and official s/eal this __21___
      day
      of ___March__,
      2007.

     

    /s/
      Ronda J. Freeman 

    Notary
      Signature 

    

    Ronda
      J. Freeman

    Print/Type
      Name 

    

     

    Notary
      Public in and for the State of Washington,

     

    residing
      at Duvall,
      Washington

     

    My
      commission expires 1-19-2009

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    STATE
      OF
      ARIZONA      )

     ) ss.

    COUNTY
      OF
      MARICOPA  
)

    

    On
      this
      _22nd
      day of
March
      _,
      2007,
      before me personally appeared            John
      M.
      Pons                             ,
      Executive
      V.P._____________of
      Cole REIT Advisors II, LLC, a Delaware limited liability company, Manager of
      Cole CL St. Croix USVI, LLC, a Delaware limited liability company, to me known
      to be the individual who executed the within and foregoing instrument, and
      acknowledged that he signed the same as his free and voluntary act and deed,
      for
      the uses and purposes therein mentioned.

     

    GIVEN
      under my hand and official seal this __22nd_day
      of
      _March___,
      2007.

     

    

    /s/
      Mary D. Bates 

    Notary
      Signature 

    

    Mary
      D. Bates 

    Print/Type
      Name 

    

     

    Notary
      Public in and for the State of Washington,

     

    residing
      at Gold
      Canyon, AZ

     

    My
      commission expires 9/3/08

     

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    

    EXHIBIT
      A

     

    LEGAL
      DESCRIPTION

     

    

     

    Parcel
      No. 4-M of Estate Sion Farm Queen Quarter, St. Croix, U.S. Virgin Island,
      consisting of 2.00 acres, more or less, as shown on OLG Drawing No. 5084 dated
      September 30, 1997 and revised June 6, 2000.

     

    Parcel
      No. 4-Q of Estate Sion Farm Queen Quarter, St. Croix, U.S. Virgin Island,
      consisting of 2.00 acres, more or less, as shown on OLG Drawing No. 5264 dated
      August 1, 2001.

     

    One-sixteenth
      (1/16) interest as a tenant in common in Road Plot 4-O of Estate Sion Farm,
      Queen Quarter, St. Croix, U.S. Virgin Islands, consisting of 0.047 U.S. acre,
      more or less, as more fully shown on O.L.G. Drawing No. 5084, dated
      September 30, 1997, last revised June 

     

    
      
        
             

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      B

     

    MEMORANDUM
      OF LEASE FORM

     

    

     

    MEMORANDUM
      OF LEASE

     

    Cole
      CL
      St. Croix USVI, LLC, a Delaware limited liability company with a mailing address
      of_____________________________ ("Lessor") and CULUSVI, Inc. d/b/a Cost-U-Less,
      a US Virgin Islands Corporation with a mailing address
      of___________________________ ("Lessee"), acknowledge they have entered into
      a
      Lease dated ______________, 2007, with respect to the improvements and property
      more fully described as:

     

    Parcel
      No. 4-M of Estate Sion Farm Queen Quarter, St. Croix, U.S. Virgin Island,
      consisting of 2.00 acres, more or less, as shown on OLG Drawing No. 5084 dated
      September 30, 1997 and revised June 6, 2000;

     

    Parcel
      No. 4-Q of Estate Sion Farm Queen Quarter, St. Croix, U.S. Virgin Island,
      consisting of 2.00 acres, more or less, as shown on OLG Drawing No. 5264 dated
      August 1, 2001;

     

    One-sixteenth
      (1/16) interest as a tenant in common in Road Plot 4-O of Estate Sion Farm,
      Queen Quarter, St. Croix, U.S. Virgin Islands, consisting of 0.047 U.S. acre,
      more or less, as more fully shown on O.L.G. Drawing No. 5084, dated
      September 30, 1997, last revised June 6, 2000.

     

    

     

    This
      lease is for an initial term of fifteen (15) years with rights of renewal as
      more fully set forth in the lease.

    
      
         

         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Notice
      is
      hereby given to the public and interested parties of the existence of this
      lease
      and the obligations of Lessor and Lessee under the documents referenced herein
      and more fully described above.

     

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Memorandum of Lease to
      be
      executed, under seal, by their duly authorized representatives, effective this
      ______ day of_________________ 2007.

     

    

     

    

    IN
      WITNESS:      LESSOR:

    

     

    COLE
      CL
      ST. CROIX USVI, LLC, a Delaware limited liability company

    

    By:
      Cole
      REIT Advisors II, LLC, a Delaware

    limited
      liability company

    Its:
      Manager

     

    By
      __________________      

    Printed
      Name __________    

    Its
      ___________________       

     

     

    LESSEE:

     

    CULUSVI,
      INC., d/b/a COST-U-LESS,

    a
      U.S.
      Virgin Islands corporation

     

    By
      __________________      

    Printed
      Name _________    

    Its
      __________________     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ACKNOWLEDGMENT

     

    

     

    STATE
      OF
      _____________________ )

     

                        
      ):ss

     

    COUNTY
      OF
      ___________________ )

     

    

    On
      this
      _______ day of ________________, 2007, before me personally came and appeared
      _______________________, who acknowledged (himself, herself) to be
      ______________, of Cole REIT Advisors II, LLC, a Delaware limited liability
      company, Manager of Cole CL St. Croix USVI, LLC, a Delaware limited liability
      company, and that (he, she), as such an Officer being authorized to do so,
      executed the foregoing instrument therein contained by signing the name of
      the
      corporation by (himself, herself) as such Officer.

     

    

     

    IN
      WITNESS WHEREOF, I hereunto set my hand and official seal.

     

    

     

    

     

    

     

    _________________________

     

    Notary
      Public

     

    
      
         

         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    ACKNOWLEDGMENT

     

    

     

    STATE
      OF
      __________________ )

     

                             
      ):ss

     

    COUNTY
      OF
      ________________ )

     

    

     

    On
      this
      _______ day of ______________, 2007, before me personally came and appeared
      _______________________, who acknowledged (himself, herself) to be
      ______________, of CULUSVI, Inc. d/b/a Cost-U-Less, a U.S. Virgin Islands
      corporation, and that (he, she), as such an Officer being authorized to do
      so,
      executed the foregoing instrument therein contained by signing the name of
      the
      corporation by (himself, herself) as such Officer.

     

    

     

    IN
      WITNESS WHEREOF, I hereunto set my hand and official seal.

     

    

     

    

     

    

     

    _________________________

     

    Notary
      Public

     

     

    
      
        
             

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      C

     

    SNDA
      Form

     

    SUBORDINATION,
      NONDISTURBANCE AND ATTORNMENT AGREEMENT

     

    THIS
      SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”) is
      made as of _____________ by and between
      ______________________________,
      having
      an address at ____________________ ___________________________ (“Lender”) and
      __________________________, having an address at
      ____________________________________ (“Tenant”).

     

     

    RECITALS:

     

    A. Tenant
      is
      the holder of a leasehold estate in the property located at 4300 Sion Farm,
      Christiansted, St. Croix, USVI, as more particularly described on Schedule
      A
      (the “Property”) under and pursuant to the provisions of a certain lease dated
      ________________, 2006 between __________________________, as landlord
      (“Landlord”), and Tenant (“Lease”); 

     

    B. The
      Property is or is to be encumbered by one or more mortgages, deeds of trust,
      deeds to secure debt or similar security agreements (collectively, the “Security
      Instrument”) from Landlord, or its successor in interest, in favor of Lender;
      and

     

    C. Tenant
      has agreed to subordinate the Lease to the Security Instrument and to the lien
      thereof and Lender has agreed to grant non-disturbance to Tenant under the
      Lease
      on the terms and conditions hereinafter set forth.

     

    AGREEMENT:

     

    NOW,
      THEREFORE, the parties hereto mutually agree as follows:

     

    1. Subordination.
      The
      Lease shall be subject and subordinate in all respects to the lien and terms
      of
      the Security Instrument, to any and all advances to be made thereunder and
      to
      all renewals, modifications, consolidations, replacements and extensions
      thereof.

     

     

    2. Nondisturbance.
      So long
      as Tenant pays all rents and other charges as specified in the Lease and is
      not
      otherwise in default (beyond applicable notice and cure periods) of any of
      its
      obligations and covenants pursuant to the Lease, Lender agrees for itself and
      its successors in interest and for any other person acquiring title to the
      Property through a foreclosure (an “Acquiring Party”), that Tenant’s possession
      of 

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    the
      Property as described in the Lease will not be disturbed during the term of
      the
      Lease, as said term may be extended pursuant to the terms of the Lease, by
      reason of a foreclosure and that, upon a foreclosure, the Acquiring Party shall
      assume and perform all of Landlord’s obligations under the Lease. For purposes
      of this Agreement, a “foreclosure” shall include (but not be limited to) a
      sheriff’s or trustee’s sale under the power of sale contained in the Security
      Instrument, the termination of any superior lease of the Property and any other
      transfer of the Landlord’s interest in the Property under peril of foreclosure,
      including, without limitation to the generality of the foregoing, an assignment
      or sale in lieu of foreclosure.

     

    3. Attornment.
      Tenant
      agrees to attorn to, accept and recognize any Acquiring Party as the landlord
      under the Lease pursuant to the provisions expressly set forth therein for
      the
      then remaining balance of the term of the Lease, and any extensions thereof
      as
      made pursuant to the Lease, so long as the Acquiring Party assumes and performs
      all of Landlord’s obligations under the Lease. The foregoing provision shall be
      self-operative and shall not require the execution of any further instrument
      or
      agreement by Tenant as a condition to its effectiveness. Tenant agrees, however,
      to execute and deliver, at any time and from time to time, upon the request
      of
      the Lender or any Acquiring Party any reasonable instrument which may be
      necessary or appropriate to evidence such attornment in consideration for
      Tenant’s receipt of Lender’s or the Acquiring Party’s written agreement to
      assume and perform all of Landlord’s obligations under the Lease.

     

     

    4. Rent.
      Tenant
      has notice that the Lease and the rents and all other sums due thereunder have
      been assigned to Lender as security for the loan secured by the Security
      Instrument. In the event Landlord notifies Tenant of the occurrence of a default
      under the Security Instrument and demands that Tenant pay its rents and all
      other sums due or to become due under the Lease directly to Lender, Tenant
      shall
      honor such demand and pay its rent and all other sums due under the Lease
      directly to Lender or as otherwise authorized in writing by Landlord. Landlord
      hereby irrevocably authorizes Tenant to make the foregoing payments to Lender
      upon such notice and demand.

     

    5. Lender
      to Receive Notices.
      Tenant
      shall notify Lender of any default by Landlord under the Lease which would
      entitle Tenant to cancel the Lease, and agrees that, notwithstanding any
      provisions of the Lease to the contrary, no notice of cancellation thereof
      shall
      be effective unless Lender shall have received notice of default giving rise
      to
      such cancellation.

     

     

    6. Notices.
      All
      notices or other written communications hereunder shall be deemed to have been
      properly given (i) upon delivery, if delivered in person with receipt
      acknowledged by the recipient thereof, (ii) one (1) Business Day (hereinafter
      defined) after having been deposited for overnight delivery with any reputable
      overnight courier service, or (iii) three (3) Business Days after having been
      deposited in any post office or mail depository regularly maintained by the
      U.S.
      Postal Service and sent by registered or certified mail, postage prepaid, return
      receipt requested, addressed to the receiving party at its address set forth
      above, and:

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    if
      to
Tenant,
      to the
      attention of: ___________________________; and

     

    if
      to
      Lender, to the attention of: ___________________________.

     

    or
      addressed as such party may from time to time designate by written notice to
      the
      other parties. For purposes of this Paragraph, the term “Business Day” shall
      mean any day other than Saturday, Sunday or any other day on which banks are
      required or authorized to close in the U.S. Virgin Islands. Either party by
      notice to the other may designate additional or different addresses for
      subsequent notices or communications.

     

    7. Successors.
      The
      obligations and rights of the parties pursuant to this Agreement shall bind
      and
      inure to the benefit of the successors, assigns, heirs and legal representatives
      of the respective parties. In addition, Tenant acknowledges that all references
      herein to Landlord shall mean the owner of the landlord’s interest in the Lease,
      even if said owner shall be different than the Landlord named in the
      Recitals.

     

    8. Duplicate
      Originals; Counterparts.
      This
      Agreement may be executed in any number of duplicate originals and each
      duplicate original shall be deemed to be an original. This Agreement may be
      executed in several counterparts, each of which counterparts shall be deemed
      an
      original instrument and all of which together shall constitute a single
      Agreement. The failure of any party hereto to execute this Agreement, or any
      counterpart hereof, shall not relieve the other signatories from their
      obligations hereunder.

     

    IN
      WITNESS WHEREOF, Landlord, Lender and Tenant have duly executed this Agreement
      as of the date first above written.

     

    LENDER:

     

     

    By:
      ___________________ 

    Name:
      _________________ 

    Title:
      __________________

     

    TENANT:

     

                                  By:
      ___________________ 

                        Name:
      _________________     

                        Title:
      __________________

     

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    

     

    LANDLORD:

     

    The
      undersigned as the Landlord named in the Recitals or as successor thereto hereby
      accepts and agrees to be bound by the provisions of Paragraph 5
      hereof.

     

    

     

    _______________________________,
      a

     

     

     

    
 

                               By:
      ___________________ 

                      Name:
      ________________ 

                      Title:
      _________________

     

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ACKNOWLEDGEMENTS

     

     

    STATE
      OF
      __________________ )

                  
      ) ss:

    COUNTY
      OF
      ________________ )

     

     

    On
      this
      _____ day of _________, 200__, before me personally appeared _________________,
      to me known to be the _______________ of the corporation that executed the
      within and foregoing instrument, and acknowledged said instrument to be the
      free
      and voluntary act and deed of said corporation, for the uses and purposes
      therein mentioned, and on oath stated that he/she/they was/were authorized
      to
      execute said instrument.

     

     

    In
      Witness Whereof I have hereunto set my hand and affixed my official seal the
      day
      and year first above written.

     

    Notary
      Public ___________________

     

    Print/Type
      Name ___________________

     

    Notary
      Public in and for the State of Washington, residing at _________

     

    My
      commission expires ___________________ 

     

    STATE
      OF
      __________________ )

                   )
      ss:

    COUNTY
      OF
      ________________ )

     

     

    On
      this
      _____ day of _________, 200__, before me personally appeared _________________,
      to me known to be the _______________ of the corporation that executed the
      within and foregoing instrument, and acknowledged said instrument to be the
      free
      and voluntary act and deed of said corporation, for the uses and purposes
      therein mentioned, and on oath stated that he/she/they was/were authorized
      to
      execute said instrument.

     

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    In
      Witness Whereof I have hereunto set my hand and affixed my official seal the
      day
      and year first above written.

     

    Notary
      Public ___________________

     

    Print/Type
      Name ___________________

     

    Notary
      Public in and for the State of Washington, residing at _________

     

    My
      commission expires ___________________

     

    

     

    STATE
      OF
      __________________ )

                  
      ) ss:

    COUNTY
      OF
      ________________ )

     

     

    On
      this
      _____ day of _________, 200__, before me personally appeared _________________,
      to me known to be the _______________ of the corporation that executed the
      within and foregoing instrument, and acknowledged said instrument to be the
      free
      and voluntary act and deed of said corporation, for the uses and purposes
      therein mentioned, and on oath stated that he/she/they was/were authorized
      to
      execute said instrument.

     

     

    In
      Witness Whereof I have hereunto set my hand and affixed my official seal the
      day
      and year first above written.

     

    Notary
      Public ___________________

     

    Print/Type
      Name ___________________

     

    Notary
      Public in and for the State of Washington, residing at _________

     

    My
      commission expires ___________________

     

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A (PROPERTY DESCRIPTION)

     

    

     

    Parcel
      No. 4-M of Estate Sion Farm Queen Quarter, St. Croix, U.S. Virgin Island,
      consisting of 2.00 acres, more or less, as shown on OLG Drawing No. 5084 dated
      September 30, 1997 and revised June 6, 2000.

     

    Parcel
      No. 4-Q of Estate Sion Farm Queen Quarter, St. Croix, U.S. Virgin Island,
      consisting of 2.00 acres, more or less, as shown on OLG Drawing No. 5264 dated
      August 1, 2001.

     

    One-sixteenth
      (1/16) interest as a tenant in common in Road Plot 4-O of Estate Sion Farm,
      Queen Quarter, St. Croix, U.S. Virgin Islands, consisting of 0.047 U.S. acre,
      more or less, as more fully shown on O.L.G. Drawing No. 5084, dated
      September 30, 1997, last revised June 

     

    
      
        
            

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    EXHIBIT
      D

     

    ESTOPPEL
      CERTIFICATE FORM

     

    ESTOPPEL
      LETTER

     

    [LETTERHEAD
      OF TENANT]

    __________
      __, 200_

     

    
      	 	
              Re:

            	
              Confirmation
                of Lease Agreement for Premises at 4300 Sion Farm, Christiansted,
                St.
                Croix, USVI (the “Premises”)

            

    

    Ladies
      and Gentlemen:

     

    At
      the
      request of _______________________________ (“Landlord”) the undersigned hereby
      certifies to you and agrees as follows recognizing that you will rely on the
      information contained herein:

     

    1. The
      undersigned is the current tenant under a Lease dated ________________, 2006,
      for the premises located at 4300 Sion Farm, Christiansted, St. Croix, USVI
      (as
      amended to date, the “Lease”), which has been amended and supplemented as
      follows: ___________________________.

     

    2. The
      Lease
      is in full force and effect and, except as set forth above, has not been
      amended, modified, supplemented or superseded, and constitutes the entire
      agreement between the undersigned and Landlord with respect to the leasing
      of
      the Premises. There is no other agreement between the undersigned and Landlord
      with respect to the leasing of the Premises, except as follows:
      ___________________.

     

    3. To
      the
      knowledge of the undersigned, (i) neither the undersigned nor Landlord is in
      default under the Lease, and (ii) there is no defense, offset, claim or
      counterclaim by or in favor of the undersigned against Landlord under the Lease
      or against the obligations of the undersigned under the Lease, except as
      follows: ___________________.

     

    4. The
      undersigned has not received notice and is not aware of any prior transfer,
      assignment, hypothecation or pledge by Landlord or of any of Landlord’s interest
      in the Lease, except to you and except as follows: ___________________.

     

    5. The
      monthly base or minimum rent due under the lease is __________________ and
      has
      been paid through ______________, 20__ and all additional rent due under the
      Lease has been paid through _______________, 20__.

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    6. There
      are
      no actions, voluntary or otherwise, pending or, to the actual knowledge of
      the
      undersigned, threatened against the undersigned under the bankruptcy,
      reorganization, moratorium or similar laws of the United States, any state
      thereof or any other jurisdiction, except as follows:
      ___________________.

     

    7. The
      undersigned has accepted possession, and taken occupancy of, the Premises;
      the
      term of the Lease has commenced; the undersigned has commenced the payment
      of
      rents for all space subject to the Lease; the current expiration date of the
      Lease is _______________; and the undersigned has the following right, under
      the
      Lease, to extend the term of the Lease: _________________.

     

    8. To
      date,
      Landlord has not been obligated to perform any work under the Lease and no
      reimbursement or allowance has been due to the undersigned under the Lease
      in
      connection with any work performed by Landlord or the undersigned.

    Very
      truly yours,

    

    [Tenant]

     

    By:
      ___________________

    Name:
      _________________

    Title:
      __________________

     

    
      
        
            

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    GUARANTY
      OF LEASE

     

    THIS
      GUARANTY OF LEASE (this
      “Guaranty”) is made as of the ____ day of _____________, 2007, by
      COST-U-LESS, INC.,
      a
      Washington corporation (“Guarantor”), to and for the benefit of Cole CL St.
      Croix USVI, LLC, a Delaware limited liability company (“Landlord”).

     

    RECITALS

     

    A. Landlord
      and CULUSVI, Inc., d/b/a Cost-U-Less, a U.S. Virgin Islands corporation
      (“Tenant”), as tenant, have entered into a certain Lease dated as of the date
      hereof, pursuant to which Tenant leases or will lease from Landlord certain
      premises located at 4300 Sion Farm, Christiansted, St. Croix, USVI, all as
      more
      particularly described in said Lease. Said Lease, as hereafter supplemented,
      amended, restated, renewed, extended, replaced or modified, is hereinafter
      referred to as the “Lease.” All capitalized terms which are not expressly
      defined in this Guaranty shall have the same meanings herein as are ascribed
      to
      such terms in the Lease.

     

    B. Landlord
      has required that, as a condition to its execution and performance of the Lease,
      Guarantor execute and deliver this Guaranty of all obligations of Tenant arising
      and all sums due by Tenant under the Lease. The execution and delivery of this
      Guaranty by Guarantor is a material inducement to Landlord for the execution
      and
      performance of the Lease.

     

    C. Guarantor
      has a financial interest in Tenant and will be benefited by the Lease.
      Accordingly, Guarantor has agreed to execute, deliver and perform this
      Guaranty.

     

    NOW,
      THEREFORE, in
      consideration of the Recitals set forth above and in consideration of Landlord
      executing and performing its obligations under the Lease and for other good
      and
      valuable consideration, the receipt, adequacy and sufficiency of which are
      hereby acknowledged, Guarantor covenants and agrees as follows:

     

    1.  Guaranty.
      For the
      term of the Lease, Guarantor absolutely, unconditionally and irrevocably
      guarantees to Landlord:

    (a) The
      full
      and prompt payment when due (subject to the cure periods provided in the Lease),
      whether upon acceleration or otherwise, and at all times thereafter, of any
      and
      all rentals, debts and obligations of Tenant for the payment of money, however
      created, arising or evidenced, whether direct or indirect, absolute or
      contingent, now or hereafter existing, due or to become due, known or unknown
      to
      Guarantor at the time of the execution of this Guaranty, including, without
      limitation, all Rent, late fees, payments in respect of real estate taxes,
      assessments, governmental charges, premiums for insurance policies, amounts
      required to discharge mechanics’ and materialmen’s liens and claims therefor,
      and any other sums which may now be or hereafter become due and payable by
      Tenant under the Lease;

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) The
      payment of all Enforcement Costs (as hereinafter defined); and

     

    (c) The
      full,
      complete and punctual (subject to the cure periods provided in the Lease)
      observance, performance and satisfaction of all covenants, terms, conditions,
      obligations, duties and agreements of Tenant under the Lease.

     

    All
      amounts due and debts, liabilities and payment obligations described in
      subparagraphs (a) and (b) of this Paragraph are referred to herein as the
“Liabilities.” All obligations described in subparagraph (c) of this Paragraph
      are referred to herein as the “Obligations.”

     

    2.  Landlord’s
      Remedies.

     

    (a) This
      Guaranty is an absolute, irrevocable, present and continuing guaranty of payment
      and performance and not merely a guaranty of collection. Upon the occurrence
      of
      any Event of Default by Tenant under the Lease, after the expiration of any
      cure
      period applicable thereto, Guarantor agrees, on written demand by Landlord,
      (i)
      to pay all Liabilities then due hereunder; (ii) to perform the Obligations;
      and (iii) to indemnify and hold Landlord and the other Indemnified Parties
      (hereinafter defined) harmless from and against any and all loss, damage, cost,
      expense, injury or liability Landlord or the Indemnified Parties may suffer
      or
      incur as a result of such Event of Default in connection with the exercise
      of
      the rights under the Lease or this Guaranty.

     

    (b) Notwithstanding
      anything to the contrary herein contained, in any action to enforce any of
      the
      liabilities or obligations of the Guarantor under this Guaranty, Landlord,
      at
      its election, may proceed against the Guarantor with or without:
      (i) joining Tenant in any such action; (ii) commencing any action
      against or obtaining any judgment against Tenant; or (iii) commencing any
      proceeding to enforce or realize upon any collateral or other security
      (including, without limitation, any security deposit or other guaranties) which
      may be given to secure Tenant’s obligations under the Lease, or to obtain any
      judgment, decree or foreclosure sale with respect thereto. Nevertheless, the
      maintenance of any action or proceeding by Landlord to recover any sum or sums
      that may be or become due under the Lease or to secure the performance of any
      of
      the other terms, covenants and conditions of the Lease shall not preclude
      Landlord from demanding and receiving the payment of such sums and the
      performance of such other terms, covenants and conditions from Guarantor, or
      from thereafter instituting and maintaining subsequent actions or proceedings
      for any subsequent default or defaults of Tenant under the Lease. Guarantor
      does
      hereby consent that, without affecting the liability of Guarantor under this
      Guaranty and without notice to Guarantor, time may be given by Landlord to
      Tenant for payment of rent and such other sums and performance of said other
      terms, covenants and conditions, or any of them, and such time extended and
      indulgence granted from time to time, or Tenant may be dispossessed or Landlord
      may avail itself of or exercise any or all of the rights and remedies against
      Tenant provided by law or by the Lease, and may proceed either against Tenant
      alone or jointly against Tenant and Guarantor or against Guarantor alone without
      first proceeding or exhausting any remedy or claim against Tenant.
      Notwithstanding anything contained herein or in the Lease to the contrary,
      

     

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Landlord
      shall not be entitled to duplicative remedies under the Lease and/or this
      Guaranty.

     

    3.  Return
      of Payments.
      Guarantor
      agrees that, if at any time all or any part of any payment theretofore applied
      by Landlord to any Liabilities is rescinded or returned by Landlord for any
      reason whatsoever (including, without limitation, the insolvency, bankruptcy,
      liquidation or reorganization of any party), such Liabilities shall, for the
      purposes of this Guaranty, be deemed to have continued in existence to the
      extent of such payment, notwithstanding such application by Landlord, and this
      Guaranty shall continue to be effective or be reinstated, as the case may be,
      as
      to such Liabilities, all as though such application by Landlord had not been
      made. Guarantor does hereby further agree that with respect to any payments
      made
      by Guarantor hereunder, Guarantor shall not have any rights based on suretyship,
      subrogation or otherwise to stand in the place of Landlord so as to compete
      with
      Landlord as a creditor of Tenant, and Guarantor hereby waives all such rights
      to
      the fullest extent permitted by law.

     

    4.  No
      Discharge.
      Guarantor agrees that, except as may be agreed to in writing by Landlord, the
      obligations, covenants and agreements of Guarantor under this Guaranty shall
      not
      be affected or impaired by any act of Landlord, or any event or condition except
      the full, final and unvoidable performance of all Obligations and payment of
      all
      Liabilities and any other sums due hereunder. Guarantor agrees that the
      liability of Guarantor hereunder shall not be discharged by, and Guarantor
      hereby irrevocably consents to: (i) any subsequent change, modification or
      amendment of the Lease in any of its terms, covenants and conditions, or in
      the
      Rent or any other sums payable thereunder, or in the term thereof (the “Term”),
      or in the Premises demised thereby (whether said Premises be expanded,
      contracted, relocated, substituted or otherwise altered), and to any assignments
      of the Lease and to any sublettings of the Premises, and to any extensions
      or
      renewals of the Lease or its Term; (ii) the renewal or extension of time
      for the payment of the Liabilities or performance of the Obligations under
      the
      Lease or any other agreement relating to the Premises; (iii) any failure,
      omission, delay or inadequacy, whether entire or partial, of Landlord to
      exercise any right, power or remedy regarding the Lease or to enforce or realize
      upon (or to make any guarantor a party to the enforcement or realization upon)
      any of Landlord’s security for the Lease, including, but not limited to, any
      impairment or release of such security by Landlord; (iv) the existence of
      any set off, claim or counterclaim or the reduction or diminution of the
      Liabilities, or any defense of any kind or nature, which Guarantor may have
      against Tenant or which any party other than Tenant has against Landlord;
      (v) the application of payments received from any source to the payment of
      any obligation other than the Liabilities, even though Landlord might lawfully
      have elected to apply such payments to any part or all of the Liabilities;
      (vi) the addition or release of any and all other guarantors, obligor and
      other persons liable for the payment of the Liabilities and/or performance
      of
      the Obligations, and the acceptance or release of any and all other security
      for
      the payment of the Liabilities and/or performance of the Obligations; or
      (vii) any distress or reentry by Landlord or dispossession of Tenant or any
      action or remedy taken by Landlord under the Lease, or any failure to notify
      Guarantor of any default by Tenant; all whether or not Guarantor shall have
      had
      notice or knowledge of 

     

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    any
      act
      or omission referred to in the foregoing clauses (i) through (vii) inclusive
      of
      this Paragraph. Notwithstanding anything contained herein to the contrary,
      Guarantor shall be entitled to the same defenses as those which Tenant may
      have
      under the Lease or otherwise.

     

    In
      the
      event that the Lease is modified, renewed or extended in any respect by
      agreement between Landlord and Tenant either pursuant to an option granted
      in
      the Lease or otherwise, or in the event that Tenant holds over beyond the Term
      of the Lease, then the obligations hereunder of Guarantor shall extend to the
      full and faithful performance and observance of all of the covenants, terms
      and
      conditions of the Lease and of any such modification, renewal or extension
      thereof. Guarantor intends that Guarantor shall remain liable hereunder as
      a
      principal until the full, final and unvoidable performance of all of the
      Obligations and the full, final and unvoidable payment of all
      Liabilities.

     

    5.  Application
      of Amounts Received.
      Any
      amounts received by Landlord from whatsoever source on account of any
      Liabilities may be applied by Landlord toward the payment of such Liabilities,
      and in such order of application, as Landlord may from time to time
      elect.

     

    6.  Waiver.
      Guarantor expressly waives: (i) notice of the acceptance by Landlord of
      this Guaranty; (ii) notice of the existence, creation, payment or
      nonpayment of the Liabilities; (iii) presentment, demand, notice of
      dishonor, protest and all other notices whatsoever; and (iv) any failure by
      Landlord to inform Guarantor of any facts Landlord may now or hereafter know
      about Tenant, the Lease or the Premises, it being understood and agreed that
      Guarantor has and will maintain personal knowledge of and is familiar with
      Tenant’s financial condition and business affairs and has the ability to
      influence Tenant’s decision-making processes, and that Landlord has no duty so
      to inform, and that Guarantor is fully responsible for being and remaining
      informed by, Tenant of all circumstances bearing on the Lease and this Guaranty.
      No modification or waiver of any of the provisions of this Guaranty will be
      binding upon Landlord except as expressly set forth in a writing duly signed
      and
      delivered on behalf of Landlord.

     

    7.  Enforcement
      Costs.
      If,
      after the occurrence of any Event of Default, (i) the Lease or this
      Guaranty is placed in the hands of an attorney for enforcement or collection
      or
      is enforced or collected through any legal proceeding; or (ii) an attorney
      is retained to represent Landlord in any proceeding (including, without
      limitation, any bankruptcy, reorganization, receivership or other proceeding
      affecting creditors’ rights) involving a claim under or related to the Lease or
      this Guaranty, then Guarantor shall pay to Landlord upon demand all actual
      and
      reasonable attorneys’ fees, costs and expenses, including, without limitation,
      court costs and filing fees, and all other actual and reasonable costs and
      expenses incurred in connection therewith (all of which are referred to herein
      as “Enforcement Costs”), in addition to all other amounts due hereunder,
      provided Landlord prevails in such legal proceeding. If Landlord does not
      prevail in such legal proceeding, Landlord shall pay or reimburse Tenant and
      Guarantor any and all actual and reasonable attorneys’ fees, costs and expenses,
      including, 

     

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    without
      limitation, court costs and filing fees, and all other actual and reasonable
      costs and expenses incurred by Tenant and/or Guarantor in connection
      therewith.

     

    8.  Transfer
      of Lease.
      Notwithstanding
      any assignment or transfer of the Lease or any interest therein by Landlord,
      for
      collateral purposes or otherwise, each and every immediate and successive
      assignee, transferee or other successor in interest with respect to Landlord’s
      interest under the Lease shall, to the extent of the interests assigned or
      transferred, be entitled to the benefits of this Guaranty to the same extent
      as
      if such assignee or transferee were Landlord.

     

    9.  Governing
      Law; Interpretation.
      This
      Guaranty shall be governed by the laws of the State of Washington without
      reference to the conflicts of law principles of that state. The headings of
      Paragraphs in this Guaranty are for convenience only and shall not be construed
      in any way to limit or define the content, scope or intent of the provisions
      hereof. As used in this Guaranty, the singular shall include the plural, and
      masculine, feminine and neuter pronouns shall be fully interchangeable where
      the
      context so requires. If any provision of this Guaranty, or any paragraph,
      sentence, clause, phrase or word, or the application thereof, in any
      circumstances, is adjudicated by a court of competent jurisdiction to be
      invalid, the validity of the remainder of this Guaranty shall be construed
      as if
      such invalid part were never included herein. Time is of the essence of this
      Guaranty. All payments to be made hereunder shall be made in currency and coin
      of the United States of America which is legal tender for public and private
      debts at the time of payment.

     

    10.  Entire
      Agreement.
      This Guaranty
      constitutes the entire agreement between Guarantor and Landlord with respect
      to
      the subject matter hereof and supersedes all prior such agreements and
      understandings, both written and oral. This Guaranty may not be modified or
      amended except by a written instrument signed by Landlord and Guarantor.

     

    11.  Successors
      and Assigns.

     

    (a) This
      Guaranty shall bind Guarantor and its assigns and successors; provided that
      Guarantor shall not be entitled to transfer or delegate its obligations
      hereunder. 

     

    (b) This
      Guaranty shall inure to the benefit of and be enforceable by Landlord and
      Landlord’s officers, agents, employees, partners, directors and shareholders,
      each of their respective successors and assigns, and each present or subsequent
      mortgagee of the Premises and its successors and assigns (all such persons
      and
      entities shall be “Indemnified Parties” herein).

     

    12.  Certain
      Waivers by Guarantor.
      Guarantor
      hereby waives the benefit of  the right to trial by jury in any action or
      proceeding that hereafter may be instituted in respect of the Lease or this
      Guaranty.

     

    13.  Notices.
      Any
      notice, demand or other communication which is given hereunder shall be in
      writing and shall be deemed given and served (a) upon receipt or

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    refusal,
      if delivered personally, (b) one (1) business day after deposit with an
      overnight carrier service, or (c) upon deposit in the United States mail
      (certified or registered mail only), if mailed, and addressed to the intended
      recipient at its address set forth below or to such other address as such
      intended recipient may have designated by notice furnished in accordance
      herewith:

     

    If
      to
      Guarantor:              
Cost-U-Less,
      Inc.

    3633
      136th
      Place
      SE, Ste. 110

    Bellevue,
      WA 98006

    Attn:
      Martin Moore

    Tel.:
      (425) 945-0213

    Fax:
      (425) 945-0214

     

    
      	 With copies to: 	  David D. Buck

    

    Riddell
      Williams P.S.

    1001
      Fourth Avenue, Suite 4500

    Seattle,
      WA 98154

    Tel.:
      (206) 624-3600

    Fax:
      (206) 389-1708

     

    

      
        	 If to Landlord:	   Cole
                CL St. Croix USVI, LLC

      

    

                                   2555
      E. Camelback Road,
      Suite 400

    Phoenix,
      AZ 85016

    Attn:
      Legal Department

    Tel.:
      (602) 778-8700

    Fax:
      (602) 778-8780

     

    
      	 With copies to: 	   Bennett Wheeler Lytle & Cartwright,
              PLC

    

                                   
3838
      North Central Avenue, Suite
      1120

    Phoenix,
      AZ 85012

    Attn:
      Kevin T. Lytle Esq.

    Tel.:
      (602) 445-3434

    Fax:
      (602) 266-9119

     

    Except
      as
      otherwise specifically required herein, notice of the exercise of any right,
      option or power granted to Landlord by this Guaranty is not required to be
      given.

     

    ORAL
      AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
      FROM
      ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
      LAW.

     

    
      
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    SIGNED
      AND DELIVERED as of
      the
      date first specified above.

     

    GUARANTOR:

     

    

    COST-U-LESS,
      INC., a Washington corporation

    

    

    By:
      ___________________      

    Name:
      _________________      

    Title:
      __________________ 

         

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      

        TABLE
          OF
          CONTENTS    Page

         

        
          	
                  1

                	
                  Certain
                    Defined Terms

                	
                  1

                
	
                  2

                	
                  Demise
                    of Premises; Lease Characterization

                	
                  7

                
	
                  3

                	
                  Lease
                    Term

                	
                  7

                
	
                  4

                	
                  Rental
                    and Other Payments

                	
                  8

                
	
                  5

                	
                  Representations
                    and Warranties of Lessor

                	
                  8

                
	
                  6

                	
                  Representations
                    and Warranties of Lessee

                	
                  8

                
	
                  7

                	
                  Rentals
                    To Be Net to Lessor

                	
                  10

                
	
                  8

                	
                  Taxes
                    and Assessments

                	
                  11

                
	
                  9

                	
                  Utilities

                	
                  12

                
	
                  10

                	
                  Insurance

                	
                  12

                
	
                  11

                	
                  Tax
                    and Insurance Impound

                	
                  13

                
	
                  12

                	
                  Payment
                    of Rental and Other Sums

                	
                  14

                
	
                  13

                	
                  Use

                	
                  15

                
	
                  14

                	
                  Compliance
                    With Laws, Restrictions, Covenants and Encumbrances

                	
                  15

                
	
                  15

                	
                  Condition
                    of Premises; Maintenance

                	
                  19

                
	
                  16

                	
                  Waste;
                    Alterations and Improvements

                	
                  19

                
	
                  17

                	
                  Indemnification

                	
                  20

                
	
                  18

                	
                  Quiet
                    Enjoyment

                	
                  22

                
	
                  19

                	
                  Condemnation
                    or Destruction

                	
                  23

                
	
                  20

                	
                  Inspection

                	
                  26

                
	
                  21

                	
                  Default,
                    Remedies and Measure of Damages

                	
                  26

                
	
                  23

                	
                  Mortgage,
                    Subordination, Nondisturbance and Attornment

                	
                  31

                
	
                  24

                	
                  Estoppel
                    Certificate

                	
                  32

                
	
                  25

                	
                  Assignment

                	
                  33

                
	
                  26

                	
                  Option
                    To Extend

                	
                  34

                
	
                  27

                	
                  Notices

                	
                  34

                
	
                  28

                	
                  Holding
                    Over

                	
                  35

                
	
                  29

                	
                  Removal
                    of Lessee’s Property

                	
                  36

                
	
                  31

                	
                  Financial
                    Statements

                	
                  36

                
	
                  32

                	
                  Force
                    Majeure

                	
                  36

                
	
                  33

                	
                  Time
                    is of the Essence

                	
                  36

                
	
                  35

                	
                  Lessor’s
                    Liability

                	
                  36

                
	
                  36

                	
                  Consent
                    of Lessor

                	
                  37

                
	
                  37

                	
                  Waiver
                    and Amendment

                	
                  37

                
	
                  38

                	
                  Successors
                    Bound

                	
                  37

                
	
                  39

                	
                  No
                    Merger

                	
                  37

                
	
                  40

                	
                  Captions

                	
                  37

                
	
                  41

                	
                  Severability

                	
                  37

                
	
                  42

                	
                  Independent
                    Counsel

                	
                  37

                
	
                  43

                	
                  Easements

                	
                  38

                
	
                  44

                	
                  Bankruptcy

                	
                  38

                
	
                  45

                	
                  No
                    Offer

                	
                  39

                
	
                  46

                	
                  Further
                    Assurances

                	
                  39

                
	
                  47

                	
                  Attorneys’
                    Fees

                	
                  40

                
	
                  48

                	
                  Entire
                    Agreement

                	
                  40

                
	
                  49

                	
                  Forum
                    Selection; Jurisdiction; Venue; Choice of Law

                	
                  40

                
	
                  50

                	
                  Counterparts

                	
                  40

                
	
                  51

                	
                  Joint
                    and Several Liability

                	
                  40

                
	
                  52

                	
                  Memorandum
                    of Lease

                	
                  40

                
	
                  53

                	
                  No
                    Brokerage

                	
                  41

                
	
                  55

                	
                  OFAC
                    Laws and Regulations

                	
                  41

                
	
                  56

                	
                  Transfer,
                    Participation and/or Securitization Covenants

                	
                  42

                
	
                  57

                	
                  Power
                    House Encroachment

                	
                  42EXHIBIT 10.4

    EXECUTIVE
      COMPENSATION AND BENEFITS AGREEMENT

     

    J.
      Jeffrey Meder (“Executive”)

    3316
      81st
      Pl.
      SE

    Mercer
      Island, WA 98040

     

    Cost-U-Less,
      Inc.(“Company”)

    3633
      81st
      Pl SE

     

    Bellevue
      Wa 98006

     

    1.  Employment.

     

    The
      Company hereby employs Executive as its President and Chief Executive Officer
      and Executive hereby accepts this Executive Compensation and Benefits Agreement
      (the "Agreement")
      in
      conjunction with his employment with the Company.

     

    2.  Effective
      Date.

     

    This
      Agreement is effective as of March 1, 2007 (the "Effective
      Date"),
      and
      shall continue through February 28, 2011, unless extended by mutual agreement
      or
      terminated earlier as hereinafter provided.

     

    3.  Duties
      and Responsibilities.

     

    Executive
      will, during the term of this Agreement, faithfully and diligently perform
      all
      such acts and duties, and have such responsibilities and furnish such services,
      as are generally associated with and required for the position of President
      and
      Chief Executive Officer and such other duties as the Board of Directors of
      the
      Company (the "Board")
      or its
      designee(s) shall reasonably direct. Executive will devote such time, energy
      and
      skill to the business of the Company as shall reasonably be required for the
      performance of his/her duties. Executive agrees, subject to his election as
      such, to serve as a director of the Board during his term of
      employment.

     

    4.  Compensation.

     

    4.1  Salary.
      For the
      first year of this Agreement, Executive will be paid a salary of $385,000 on
      an
      annualized basis, payable on regular Company paydays. For each year thereafter
      that this Agreement is in full force and effect, Executive's annual salary
      shall
      be reviewed by the Board for adjustment and may be increased as determined
      appropriate by the Board. Except as specifically stated herein, Executive
      otherwise will receive the same Company benefits and be, subject to the same
      policies, practices, terms and conditions of employment as are other senior
      officers of the Company.

     

    4.2  Bonus.
      In
      addition to Executive's base salary, Executive is eligible for a maximum annual
      bonus of up to $100,000 (hereinafter referred to as the “Bonus Base”), based on
      Company’s achievement of its EBITDA target, payable upon 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    completion
      of the annual audit following the end of the Company’s fiscal year. In the first
      year of this Agreement, Executive’s bonus shall be calculated by adjusting the
      Bonus Base upward or downward, as appropriate, by an amount equal to 10% of
      the
      difference between the Company’s current and prior year EBITDA, based on net
      after deducting Executive’s bonus payment. In each successive year during the
      term of this Agreement, Executive’s eligibility for the Bonus Opportunity shall
      depend upon achievement of the EBITDA target to be established by the Board
      after consulting with Executive. In addition, through the term of this
      Agreement, Executive shall receive a bonus of $50,000 for each new store opened,
      payable promptly upon the store’s opening unless otherwise mutually agreed by
      Executive and the Board. 

     

    4.3  Car
      Allowance.
      Executive shall receive a monthly car allowance of $600 for the term of the
      Agreement.

     

    4.4  Vacation.
      Executive shall be eligible for five weeks paid vacation, annually during the
      term of the Agreement.

     

    5.  Confidential
      Information. Non solicitation and Noncompetition.

     

    Executive
      has executed the Confidentiality, Nonsolicitation and Noncompetltion Agreement
      and reaffirms his agreement to comply with the terms of such
      Agreement.

     

    6.  Termination
      and Severance.

     

    6.1  Either
      party may terminate the employment relationship and this Agreement at any time
      and for any reason, provided that the party electing to terminate the employment
      relationship and this Agreement shall give at least 30 days written notice
      to
      the other party.

     

    6.2  Except
      as
      specifically provided for in this Agreement, Executive shall not be eligible
      for
      severance pay or benefits under any other policy, program, plan, or practice
      of
      the Company.

     

    6.3  If
      Executive's employment is terminated by the Company prior to the end of the
      term
      of this Agreement for reasons other than for cause, as hereinafter defined,
      or
      pursuant to Sections 6.6 (disability) or 7 (Change of Control) below;
      or if Executive resigns his employment for Good Reason (as defined in Section
      6.7), Executive shall receive as severance pay an amount equal to 24 months
      of
      Executive's base salary at the time of termination. As an additional severance
      benefit, the Company will pay up to 12 months of COBRA premiums or until
      Executive becomes eligible for comparable group health coverage or Medicare,
      whichever is earlier. Severance benefits shall not include payment in connection
      with an award of any stock option or grant, the eligibility for which will
      be
      governed solely by the terms of the Stock Plan.

     

    6.4  If
      Executive's employment is terminated at the end of the term of this Agreement
      or
      as a result of Executive's death or for cause by the Company or if Executive
      terminates his employment for any reason, Executive shall not be entitled to
      severance pay or benefits under this Agreement.

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.5  For
      purposes of this Agreement, "cause" for termination includes, but is not limited
      to, the following types of conduct and circumstances: failure to perform
      Executive's duties under this Agreement after reasonable notice and opportunity
      to cure; breach of the confidentiality, nonsolicitation and noncompetition
      provisions of the Confidentiality, Nonsolicitation and Noncompetition Agreement
      signed by Executive; material violation of any statutory or common law duty
      of
      loyalty to the Company; conduct or performance that, in the reasonable judgment
      of the Company, adversely affects the interests of the Company or any of its
      Affiliates (as hereinafter defined) or injures or tends to injure the reputation
      of the Company or any of its Affiliates; or conduct that, in the reasonable
      judgment of the Company, creates a conflict of interest or the appearance of
      a
      conflict of interest between Executive and the Company or any of its affiliated
      or related entities. If the basis for Executive's termination for cause is
      capable of being cured by Executive within 30 days, the Company will give
      Executive a 30 day period to cure.

     

    6.6  The
      Company, in its sole discretion, may elect to terminate this Agreement and
      Executive's employment in the event Executive is unable or unwilling to perform
      the essential duties and responsibilities of his position for a period of more
      than a total of 180 days in any one year period due to disability without any
      obligation on the part of the Company to provide severance pay or benefits
      to
      Executive.

     

    6.7  For
      purposes of this paragraph 6, Good Reason exists if: 

     

    6.7.1  Executive's
      principal work location is moved more than 50 miles;

     

    6.7.2  Executive's
      salary is reduced by at least 15 percent of Executive's base salary and the
      reduction is not the result of a general reduction in compensation for reasons
      unrelated to Executive's assignment; or

     

    6.7.3  There
      is
      a material reduction in the scope of Executive's responsibilities or authority;
      or

     

    6.7.4  Employer
      breaches any material term of this Agreement.

     

    6.8  Severance
      pay and benefits under paragraph 6 are subject to applicable tax and
      withholdings and deductions. Severance pay and benefits shall be paid pro-rata
      on regular Company paydays.

     

    6.9  In
      addition to the foregoing conditions, eligibility for and, receipt of severance
      pay and benefits under paragraph 6 are subject to Executive executing and
      not revoking a Separation Agreement and Release of Claims in a standard form
      utilized by the Company and provided to Executive by the Company at the time
      of
      termination.

     

    6.10  Severance
      pay and benefits under paragraph 6 shall not be included as compensation
      under any retirement plan maintained by the Company or an Affiliate unless
      the
      retirement plan provides otherwise.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.11  Notwithstanding
      the foregoing, Executive shall not be eligible for severance pay and benefits
      and shall forfeit any outstanding severance pay and benefits under this
      paragraph 6 if:

     

    6.11.1  Executive
      is terminated by the Company and is transferred to or offered comparable
      employment by an entity that directly or indirectly through one or more
      intermediaries, controls, or is controlled by, or is under common control with
      the Company (“Affiliate”) within 120 days after termination, unless Executive is
      no longer in such employment on the 120th
      day.

     

    6.11.2  Executive
      fails to execute any documents or satisfy conditions required by the Company
      in
      order to receive severance pay and benefits under this Agreement or fails to
      return property of the Company or an Affiliate within the time period designated
      by the Company for acceptance of severance pay and benefits.

     

    6.11.3  Executive
      accepts employment or enters into any business relationship with, or becomes,
      or
      acquires ownership of more than a five percent (5%) interest in, a competitor
      of
      the Company less than 12 months after termination with the Company. For these
      purposes, the term “competitor” means another warehouse club.

     

    6.11.4  Executive
      is eligible for severance pay and benefits under paragraph 7 of this
      Agreement.

     

    7.  Change
      of Control.

     

    7.1  If,
      following a Change of Control (as hereinafter defined), Executive's employment
      is terminated by the Company other than for cause within 12 months following
      such Change of Control or if Executive resigns from employment for Good Reason
      (as defined in Section 7.3 below), Executive shall receive as severance pay
      an amount equal to 12 months of Executive's base compensation. As an additional
      severance benefit, the Company will pay up to 12 months of COBRA premiums or
      until Executive becomes eligible for comparable group health coverage or
      Medicare, whichever is earlier. Severance benefits shall not include payment
      in
      connection with an award of any stock option or grant, the eligibility for
      which
      will be governed solely by the terms of the Stock Plan. In addition
      to severance pay and COBRA premium payments,  the parties agree
      that (a) all options or other rights to acquire Common Stock or other
      equity securities of Employer then held by Employee shall immediately and
      automatically vest and become exercisable in full as to all such Common Stock
      and other equity securities subject thereto, notwithstanding any term or
      provision to the contrary in any plans, agreements or other documents evidencing
      the options and other rights or pursuant to which the options and other rights
      were granted, (b) all restrictions with respect to such Common Stock and
      other equity securities under any plans, agreements or other documents
      evidencing the options and other rights or pursuant to which the options and
      other rights were granted (other than restrictions on transfer under federal
      and
      applicable state securities laws), including but not limited to contractual
      restrictions on transfer, rights of repurchase or first refusal in favor of
      Employer and restrictions on certificates for such Common Stock and other equity
      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    securities
      (other than restrictions on certificates designed to promote compliance with
      federal and applicable state securities laws) shall automatically terminate,
      and
      (c) such options and other rights shall remain exercisable for until a
      period of eighteen (18) months has elapsed following the Change of Control
      or until the respective dates provided for exercise of such options and other
      rights under any plans, agreements and other documents by which they are
      evidenced, whichever is later, notwithstanding any term or provision to the
      contrary in any plans, agreements or other documents evidencing the options
      and
      other rights or pursuant to which the options and other rights were
      granted.

     

    No
      other
      severance pay or benefits shall be payable to Executive, including but not
      limited to severance pay or benefits under paragraph 6 of this Agreement.

     

    7.2  For
      the
      purposes of this paragraph 7, a "Change in Control" shall occur if any of
      the following applies:

     

    7.2.1  Any
      "Person," as such term is used in Sections 13(d) and (14(d) of the
      Securities Exchange Act of 1934, as amended (the "Exchange
      Act")
      (other
      than the Company, any trustee or other fiduciary holding securities under an
      employee benefit plan of the Company, or any company owned, directly or
      indirectly, by the shareholders of the Company in substantially the same
      proportions as their ownership of stock of the Company), is or becomes the
      "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
      directly or indirectly, of securities of the Company representing more than
      50
      percent of the combined voting power of the Company's then outstanding
      securities;

     

    7.2.2  The
      shareholders of the Company approve a merger or other consolidation of the
      Company with any other company, other than (1) a merger or consolidation
      which would result in 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 percent of the combined voting power of the voting
      securities of the Company or such surviving entity outstanding immediately
      after
      such merger or consolidation or (2) a merger or consolidation effected to
      implement a recapitalization of the Company (or similar transaction) in which
      no
      Person acquires more than 50 percent of the combined voting power of the
      Company's then outstanding securities;

     

    7.2.3  A
      tender
      or exchange offer is made for the common stock of the Company (or securities
      convertible into common stock of the Company) and such offer results in a
      portion of those securities being purchased and the offeror, after the
      consummation of the offer, is the beneficial owner (as determined pursuant
      to
      Section 13(d) of the Exchange Act), directly or indirectly, of securities
      representing more than 50 percent of the voting power of outstanding securities
      of the Company; or

     

    7.2.4  The
      Company sells all or substantially all its operating assets to a buyer that
      is
      not an Affiliate of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.3  For
      the
      purposes of this paragraph 7, Good Reason exists if: 

     

    7.3.1  Executive's
      principal work location is moved more than 50 miles;

     

    7.3.2  Executive's
      salary is reduced by at least 15 percent of Executive's base salary and the
      reduction is not the result of a general reduction in compensation for reasons
      unrelated to Executive's assignment; or

     

    7.3.3  There
      is
      a material reduction in the scope of Executive's responsibilities or authority;
      or

     

    7.3.4  Employer
      breaches any material term of this Agreement.

     

    7.4  Severance
      pay and benefits under paragraph 7 are subject to tax and other applicable
      withholdings and deductions. Severance pay and benefits shall be paid pro-rata
      on regular Company paydays.

     

    7.5  In
      addition to the foregoing conditions, eligibility for and receipt of severance
      pay and benefits under paragraph 7 are subject to Executive executing and
      not revoking a Separation Agreement and Release of Claims in a form provided
      to
      Executive by the Company at the time of termination.

     

    7.6  Severance
      pay and benefits under paragraph 7 shall not be included as compensation
      under any retirement plan maintained by the Company or an Affiliate unless
      the
      retirement plan provides otherwise.

     

    7.7  Notwithstanding
      the foregoing, Executive shall not be eligible for severance pay and benefits
      and shall forfeit any outstanding severance pay and benefits under this
      paragraph 7 if:

     

    7.7.1  Executive
      receives an offer of severance benefits under any severance plan or program
      maintained by the Company or an Affiliate or enters into any individual
      severance agreement with the Company or an Affiliate that supersedes this
      Agreement; or Executive is terminated pursuant to paragraph 6 of this
      Agreement; or Executive voluntarily resigns from employment for any reason
      that
      does not constitute a material alteration in Executive's position that has
      a
      detrimental impact on Executive (as defined above).

     

    7.7.2  Executive
      fails to execute any documents or satisfy conditions required by the Company
      in
      order to receive severance pay and benefits under this Agreement or fails to
      return property of the Company or an Affiliate within the time period designated
      by the Company for acceptance of severance pay and benefits.

     

    7.7.3  Executive
      fails to execute or breaches any agreement required by the Company, including,
      but not limited to, cessation of severance .pay and benefits in the event of
      rehire or reemployment by the Company or an Affiliate, or cessation and
      repayment of severance pay and benefits in the event of any material breach
      of
      any required confidentiality, nonsolicitation, noncompetition, nondisparagement,
      assistance 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    to
      the
      Company or assistance in defense of litigation agreements or a provision of
      any
      Separation Agreement and Release of Claims signed by Executive.

     

    7.7.4  Executive
      becomes employed by the Company or an Affiliate within 120 days after the Change
      in Control occurs, unless Executive is no longer in such employment on the
      120th
      day.

     

    7.7.5  Executive
      accepts employment or enters into any business relationship with, or becomes,
      or
      acquires ownership of more than a five percent (5%) interest in, a competitor
      of
      the Company less than 12 months after termination with the Company.

     

    8.  General
      Provisions.

     

    8.1  Except
      as
      specifically provided herein, Executive's employment with the Company shall
      be
      subject to the same terms and conditions as applicable to other employees of
      the
      Company, including but not limited to the right of either party to terminate
      the
      employment relationship at any time and for any reason upon prior notice as
      provided in Section 6.1.

     

    8.2  This
      Agreement shall be construed in accordance with and governed by the laws of
      the
      State of Washington.

     

    8.3  Executive
      agrees that any dispute (1) concerning the interpretation or construction
      of this Agreement, (2) relating to any compensation or benefits Executive
      may claim, or (3) relating in any way to any claim by Executive for
      reinstatement or reemployment by the Company after execution of this Agreement
      shall first be submitted to confidential mediation before a mediator selected
      by
      the parties. Should any dispute not be resolved through mediation, it shall
      be
      submitted and settled exclusively by confidential binding arbitration before
      a
      single arbitrator in accordance with the Commercial Arbitration Rules of the
      American Arbitration Association or such comparable rules as may be agreed
      upon
      by the parties. The parties shall be responsible for their own costs and legal
      fees in any mediation or arbitration proceeding. Both parties agree that the
      procedures outlined in this paragraph are the exclusive methods of dispute
      resolution.

     

    8.4  This
      Agreement and the Confidentiality, Nonsolicitation and Noncompetition Agreement
      dated the date hereof contain the entire agreement between Executive and the
      Company concerning the subject matters discussed herein. Any modification of
      this Agreement shall be effective only if in writing and signed by each party
      or
      its duly authorized representative. This Agreement supersedes all prior
      employment agreements between the parties. The terms of this Agreement are
      contractual and not mere recitals. If, for any reason, any provision of this
      Agreement shall be held invalid in whole or in part, such invalidity shall
      not
      affect the remainder of this Agreement.

     

    8.5  The
      waiver of any breach of this Agreement by one party shall not constitute waiver
      by the non-breaching party of any other breach of the Agreement.

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    8.6  This
      Agreement is subject to, and conditioned on, ratification of its terms by the
      Board of Directors of the Company.

     

    
      	
              COST-U-LESS,
                INC.

            	 
	
              By:
                /s/ Bob C Donegan 

              Its:
                Director, Chair
                Compensation Committee 

            	
               

              Date
                3-26-07 

            
	
              /s/
                J. Jeffrey Meder 

              Executive
                Signature

            	
               

              Date
                3-26-07

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