united states bankruptcy court eastern ......4844-7567-3560\3 united states bankruptcy court eastern...

$: UNITED STATES BANKRUPTCY COURT EASTERN ......4844-7567-3560\3 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: LOVES FURNITURE, INC., Debtor, Case$
4844-7567-3560\3

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

In re: LOVES FURNITURE, INC.,

Debtor,

Case No. 21-40083-TJT Chapter 11 Hon. Thomas J. Tucker

MOTION OF LCN AVF WARREN (MI) LLC AND LCN AVF DEARBORN (MI) LLC

SEEKING ENTRY OF AN ORDER COMPELLING DEBTOR TO PROVIDE IMMEDIATE AND ONGOING COMPENSATION FOR ITS USE AND OCCUPANCY

OF CERTAIN LEASED PREMISES __________________________________________________________________

LCN AVF Warren (MI) LLC (“LCN Warren”) and LCN AVF Dearborn (MI) LLC (“LCN

Dearborn” and, together with LCN Warren, “LCN”), by its counsel, Dorsey & Whitney LLP,

hereby respectfully moves this Court for entry of an Order, substantially in the form annexed hereto

as Exhibit “1”, compelling Debtor and Debtor-in-Possession Loves Furniture, Inc. (the “Debtor”)

to provide LCN with immediate and ongoing compensation of the Debtor’s use and occupancy of:

(a) 6500 East 14 Mile Road, Warren, Michigan; (b) 6440 East 14 Mile Road, Warren, Michigan;

(c) 15701 Market Drive, Dearborn, Michigan; (d) 4375 28th Street SE, Kentwood, Michigan; and

(e) 4273 Alpine Avenue NW, Comstock Park, Michigan (collectively, the “Leased Premises”),

through and until the Debtor returns possession of the Leased Premises to LCN1 pursuant to section

503(b)(1) of Title 11 of the United States Code (the “Bankruptcy Code”), or, in the alternative,

1 The relief sought herein is exclusive of and without prejudice to LCN’s right, among other things, to demand compensation for the costs and expenses associated with removing the Debtor from possession of the Leased Premises and returning the Leased Premises to broom clean condition; to assert a claim against the estate for pre-petition damages and unpaid rent; to assert subrogation rights pursuant to Bankruptcy Code § 506(c); and to assert any other claim or cause of action LCN may have against the Debtor, subject to the limitations established by the Bankruptcy Code.

21-40083-tjt Doc 161 Filed 02/01/21 Entered 02/01/21 18:40:07 Page 1 of 3

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pursuant to Bankruptcy Code § 365(d)(3), and granting such other, further, and different relief as

this Court deems just and proper.

In particular, and as outlined in the Proposed Order and Supporting Brief, LCN demands

that the Debtor (or its Agent) be compells, within five (5) days of entry of an Order granting this

Motion (the “Initial Payment Deadline”), to pay LCN the sum $648,831.99, which represents the

value of the Debtor’s use and occupancy of the Leased Premises from the filing date and through

January 31, 2021 (calculated as the pro rata share of the rent and certain taxes, maintenance, and

insurance costs (collectively, the “Additional Costs”) required under the respective Leases for that

period) plus a sum equal to the rent and Additional Costs for the period of February 1, 2021 through

date of entry of the Order. LCN further demands that by the Initial Payment Deadline, the Debtor

(or its Agent) pay LCN the sum of $432,554.66, representing rent and Additional Costs for the

two week period commencing on the date of entry of the Order (the “Two-Week Rent”), and

thereafter pay such Two-Week Rent no later than every fourteen (14) days after the Initial Payment

Deadline, and until such time as the Debtor returns possession and control of the Leased Premises

to LCN.

In support of the relief sought herein, and in accordance with E.D. Mich. LBR 9014-1(c),

the Court and all interested parties are respectfully referred to the following exhibits annexed

hereto:

1. Exhibit 1: Proposed Order

2. Exhibit 2: Notice of Motion and Opportunity to Object

3. Exhibit 3: Supporting Brief

4. Exhibit 4: Proof of Service


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5. Exhibit 5: LCN reserves the right to submit affidavits in support of the relief

sought herein.

6. Exhibit 6: Documentary exhibits

WHEREFORE, for the reasons set forth above and more fully in the Supporting Brief,

LCN respectfully requests that this Court compel the Debtor to provide LCN with immediate and

ongoing compensation for its use and occupancy of the Leased Premises, and grant such other,

further, and different relief as it deems just and proper.

Dated: February 1, 2021 DORSEY & WHITNEY LLP Attorneys for LCN AVF Warren (MI) LLC and LCN AVF Dearborn (MI) LLC

By: _/s/ Samuel S. K. Kohn___________ Samuel S. Kohn (admitted) Eric Lopez Schnabel Rachel P. Stoian 51 West 52nd Street New York, NY 10019 tel: (212) 415-9200 email: [email protected] [email protected] [email protected]


EXHIBIT “1” Proposed Order

21-40083-tjt Doc 161-1 Filed 02/01/21 Entered 02/01/21 18:40:07 Page 1 of 4

4814-4655-2537\2


SOUTHERN DIVISION


Debtor,


ORDER COMPELLING DEBTOR TO PROVIDE IMMEDIATE AND ONGOING

COMPENSATION TO LCN AVF WARREN (MI) LLC AND LCN AVF DEARBORN (MI) LLC FOR DEBTOR’S USE AND OCCUPANCY OF CERTAIN LEASED

PREMISES __________________________________________________________________

Upon the motion (the “Motion”)1 [Dkt. ___] of LCN AVF Warren (MI) LLC (“LCN

Warren”) and LCN AVF Dearborn (MI) LLC (“LCN Dearborn” and, together with LCN Warren,

“LCN”), by its counsel, Dorsey & Whitney LLP, seeking entry of an order compelling Debtor and

Debtor-in-Possession Loves Furniture, Inc. (the “Debtor”) to provide LCN with immediate and

ongoing compensation of the Debtor’s use and occupancy of: (a) 6500 East 14 Mile Road, Warren,

Michigan; (b) 6440 East 14 Mile Road, Warren, Michigan; (c) 15701 Market Drive, Dearborn,

Michigan; (d) 4375 28th Street SE, Kentwood, Michigan; and (e) 4273 Alpine Avenue NW,

Comstock Park, Michigan (collectively, the “Leased Premises”), through and until the Debtor

returns possession of the Leased Premises to LCN pursuant to section 503(b)(1) of Title 11 of the

United States Code (the “Bankruptcy Code”), or, in the alternative, pursuant to Bankruptcy Code

§ 365(d)(3), and granting such other, further, and different relief as this Court deems just and

proper; and the Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334;

1 All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Motion.


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and the Court finding the venue of this proceeding and the Motion in this district is proper under

28 U.S.C. §§ 1408 and 1409; and the Court finding that LCN’s notice of the Motion and

opportunity for a hearing on the Motion were appropriate and sufficient, and no other notice need

be provided; and the Court having reviewed the Motion; and the Court having determined that the

factual and legal bases set forth in the Motion establish just cause for the relief granted herein; and

upon all of the proceeding had before this Court; and after due deliberation and sufficient cause

appearing therefor, it is hereby

ORDERED, that the Motion is granted; and, it is further

ORDERED, that, within five (5) business days of entry of this Order (the “Initial Payment

Deadline”), the Debtor (or its Agent) shall pay LCN the sum of $648,831.99, which represents the

value of the Debtor’s use and occupancy of the Leased Premises from the filing date and through

January 31, 2021 (calculated as the pro rata share of the rent and taxes, maintenance, and insurance

costs (collectively, the “Additional Costs”) required under the respective Leases for that period)

plus a sum equal to the rent and Additional Costs for the period of February 1, 2021 through date

of entry of this Order; and, it is further

ORDERED, by the Initial Payment Deadline, the Debtor (or its Agent) shall also pay LCN

the sum of $432,554.66 representing rent and Additional Costs for the two week period

commencing on the date of entry of this Order (the “Two-Week Rent”), and shall pay such Two-

Week Rent no later than every fourteen (14) days after the Initial Payment Deadline, and until such

time as the Debtor returns possession and control of the Leased Premises to LCN; and, it is further

ORDERED, that the Debtor (or its Agent) shall timely pay all of its direct obligations

under the Leases, including, but not limited to, utilities and insurance premiums; and, it is further


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ORDERED, that nothing in this Order or the Motion shall be construed as a waiver of

LCN’s right, among other things, to demand compensation for the costs and expenses associated

with removing the Debtor from possession of the Leased Premises and returning the Leased

Premises to broom clean condition; to assert a claim against the estate for pre-petition damages

and unpaid rent; to assert subrogation rights pursuant to Bankruptcy Code § 506(c); and to assert

any other claim or cause of action LCN may have against the Debtor, subject to the limitations

established by the Bankruptcy Code; and, it is further

ORDERED, the terms and conditions of this Order are immediately effective and

enforceable upon its entry; and, it is further

ORDERED, LCN is authorized to take all actions necessary to effectuate the relief granted

in this Order in accordance with the Motion; and, it is further

ORDERED, that the Court retains exclusive jurisdiction with respect to all matters arising

from or related to the implementation, interpretation, and enforcement of this Order.


EXHIBIT “2” Notice of Motion and Opportunity to Object


4852-7529-6473\1


SOUTHERN DIVISION


Debtor,


NOTICE OF MOTION OF LCN AVF WARREN (MI) LLC AND LCN AVF DEARBORN (MI) LLC SEEKING ENTRY OF AN ORDER COMPELLING DEBTOR TO PROVIDE IMMEDIATE AND ONGOING COMPENSATION FOR ITS USE AND OCCUPANCY

OF CERTAIN LEASED PREMISES __________________________________________________________________

LCN AVF Warren (MI) LLC (“LCN Warren”) and LCN AVF Dearborn (MI) LLC (“LCN Dearborn” and, together with LCN Warren, “LCN”), by their counsel, Dorsey & Whitney LLP, has filed a motion (the “Motion”) for entry of an Order compelling Debtor and Debtor-in-Possession Loves Furniture, Inc. (the “Debtor”) to provide LCN with immediate and ongoing compensation of the Debtor’s use and occupancy of: (a) 6500 East 14 Mile Road, Warren, Michigan; (b) 6440 East 14 Mile Road, Warren, Michigan; (c) 15701 Market Drive, Dearborn, Michigan; (d) 4375 28th Street SE, Kentwood, Michigan; and (e) 4273 Alpine Avenue NW, Comstock Park, Michigan (collectively, the “Leased Premises”), through and until the Debtor returns possession of the Leased Premises to LCN1 pursuant to section 503(b)(1) of Title 11 of the United States Code (the “Bankruptcy Code”), or, in the alternative, pursuant to Bankruptcy Code § 365(d)(3), and granting such other, further, and different relief as this Court deems just and proper.

Your rights may be affected. You should read these papers carefully and discuss them with your attorney, if you have in this bankruptcy case. (If you do not have an attorney, you may wish to consult one.)



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If you do not want the Court to grant the relief sought in the Motion, or if you want the Court to consider your views on the Motion, within fourteen (14) days of service hereof, you or your attorney must:

1. File with the Court a written response or an answer, explaining your position at:2

United States Bankruptcy Court 211 West Fort Street Detroit, MI 48226

If you mail your response to the Court for filing, you must mail it early enough so that the

Court will receive it on or before the date stated above. All attorneys are required to file pleadings electronically.

You must also send a copy to:

LCN AVF Warren (MI) LLC LCN AVF Dearborn (MI) LLC c/o Eric Lopez Schnabel, Esq. Dorsey & Whitney LLP 51 West 52nd Street New York, NY 10019 Loves Furniture, Inc. c/o Max J. Newman, Esq. Butzel Long 41000 Woodward Avenue Bloomfield Hills, MI 48304

2. If a response or answer is timely filed and served, the clerk will schedule a hearing on the Motion and you will be served with a notice of the date, time, and location of the hearing.

If you or your attorney do not take these steps, the court may decide that you do not oppose the relief sought in the motion or objection and may enter an order granting that relief.

[signature page to follow]

2 Response or answer must comply with Fed. R. Civ. P. 8(b), (c), and (e).


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EXHIBIT “3” Supporting Brief


4847-8460-8472\7


SOUTHERN DIVISION


Debtor,


BRIEF IN SUPPORT OF MOTION OF LCN AVF WARREN (MI), LLC AND LCN AVF DEARBORN (MI) LLC SEEKING ENTRY OF AN ORDER COMPELLING DEBTOR TO PROVIDE IMMEDIATE AND ONGOING COMPENSATION FOR ITS USE AND

OCCUPANCY OF CERTAIN LEASED PREMISES __________________________________________________________________

LCN AVF Warren (MI) LLC (“LCN Warren”) and LCN AVF Dearborn (MI) LLC (“LCN

Dearborn” and, together with LCN Warren, “LCN”), by their counsel, Dorsey & Whitney LLP,

hereby submits this brief in support of their motion (the “Motion”) for entry of an Order compelling

Debtor and Debtor-in-Possession Loves Furniture, Inc. (the “Debtor”) to provide LCN with

immediate and ongoing compensation of the Debtor’s use and occupancy of the Leased Premises

(as defined below), through and until the Debtor returns possession of the Leased Premises to

LCN1 pursuant to section 503(b)(1) of Title 11 of the United States Code (the “Bankruptcy Code”),

or, in the alternative, pursuant to Bankruptcy Code § 365(d)(3), and granting such other, further,

and different relief as this Court deems just and proper, and respectfully sets forth and represents

as follows:



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PRELIMINARY STATEMENT

Prior to commencement of this bankruptcy case, the Leases (as defined below) with respect

to the Leased Premises were terminated by LCN in accordance with the terms thereof. As such,

the Debtor no longer has any right to continue in possession of the Leased Premises and is

improperly holding over therein. The filing of this bankruptcy case did not resurrect the Leases,

but did ensure that LCN’s right to immediate and ongoing compensation for the Debtor’s

continued use and occupancy of the Leased Premises would be protected. The Leased Premises

are comprised of operating and liquidating stores, corporate offices, and the Debtor’s distribution

center where it was storing approximately $11,000,000 worth of inventory as of commencement

of this case and which acts as the crucial focal point for the Debtor’s distribution of product to its

stores and customers. Indeed, this Court recently ordered the Debtor to maintain a minimum

amount of inventory at the distribution center, demonstrating the vital importance it will play in

this case and in the Debtor’s reorganization. The Debtor’s use of the Leased Premises is thus

essential to the Debtor’s continuing operations, whether those operations take the form of normal

operations or liquidation sales.

While the Debtor now certainly enjoys some protections because of its bankruptcy filing,

LCN, too, is entitled to some protections because of such filing. In particular, LCN demands that

it be compensated by the Debtor pursuant to Bankruptcy Code § 503(b)(1) for its continued use

and occupancy of the Leased Premises. And, in the alternative, LCN submits that it is entitled to

such compensation pursuant to Bankruptcy Code § 365(d)(3).

JURISDICTION AND VENUE

This matter is a core proceeding and this Court has jurisdiction pursuant to 28 U.S.C.

§ 1334. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.


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The statutory predicates for the relief sought herein include Bankruptcy Code §§ 503(b)(1)

and 365(d)(3).

BACKGROUND

On or about October 1, 2020, the Debtor, as tenant, and LCN, as landlord, entered into

certain Lease Agreements dated as of October 1, 2020 (collectively, the “Leases”) for the premises

described below (collectively, the “Leased Premises”):

Landlord Leased Premises Type of Premises Basic Rent Exhibit LCN Warren 6500 East 14 Mile

Road, Warren, MI Distribution Center

$2,840,136.25 per annum; $710,034.06 quarterly

6-A2

LCN Warren 6440 East 14 Mile Road, Warren, MI

Office $705,750.00 per annum; $176,437.50 quarterly

6-B

LCN Dearborn

15071 Market Drive, Dearborn, MI

Store $762,959.02 per annum; $190,739.76 quarterly

6-C

LCN Warren 4375 28th Street SE, Kentwood, MI 4273 Alpine Avenue NW, Comstock Park, MI 6500 East 14 Mile Road, Warren, MI

Stores $2,896,396.00 per annum; $724,099.00 quarterly

6-D

Each of the Leases provides that the first installment of quarterly Basic Rent shall be

payable within 30 days after Commencement Date, that is, by October 31, 2020, and thereafter is

payable on January 1, April 1, July 1, and October 1 of each calendar year during the term of the

Leases. See Leases at Exhibit D & Schedule 1. The Leases further require payment of certain

2 Given the length of each Lease and the fact that each is substantially the same, LCN has included a complete copy of the lease with respect to the Distribution Center, but only the cited portions of the balance of the Leases. Complete copies are available upon request to undersigned counsel.


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maintenance costs, id. at ¶ 7(a), taxes, id. at ¶ 9, and the placement of insurance (collectively, the

“Additional Costs”). Id. at ¶ 16.

Each of the Leases contain the same provisions with respect to default and remedies. In

particular, among the events of default under the Leases are: (a) failure to pay Basic Rent after

provision of notice; (b) the inability to pay debts as they mature; and (c) failure to comply in any

material respect with the insurance requirements of Paragraph 16 of the Lease. Id. at Paragraphs

7(a)(ii), 21(a)(i), 21(a)(iv)(E), and 21(a)(ix).

Among the remedies included in the Leases, is the right of LCN to terminate the Leases in

event an event of an uncured default, which termination is effective as of the date specified by

LCN in its notice of termination. Id. at ¶ 22(a)(i). That is, the termination may be effective

immediately, and the Leases do not provide the Debtor with any right to cure or revive the Leases

in the event of such termination.

The Debtor failed to pay the Basic Rent due within 30 days of commencement of the Leases

and, accordingly, LCN issued certain notices dated November 6, 2020 and delivered to the Debtor

on November 9, 2020, demanding payment of the outstanding rent and default interest thereon

within five (5) days of receipt, in accordance with Paragraph 21(a)(i) of the Leases.

The Debtor failed to cure its payment default set forth in the November 6, 2020 notices,

and failed to pay the Basic Rent due on January 1, 2021.

Accordingly, in the afternoon of January 6, 2021, LCN exercised its contractual remedy to

terminate each of the Leases as of that date pursuant to Paragraph 22(a)(i). See Termination Notices

collectively annexed hereto as Exhibit “6-E”. In addition to failing to cure the default outlined in

the November 6, 2020 notices, the Debtor demonstrated an inability to pay debts as they mature,


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failed to comply with the Leases’ insurance requirements, and failed to pay or cure unpaid Basic

Rent. Id. at 1.

In the evening of January 6, 2021, the Debtor filed a voluntary petition for relief under

Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Eastern District of Michigan

(the “Court”).

In his declaration in support of the Debtor’s first day relief (the “Peters Decl.”) [Dkt. 19],

Mack Peters, the Interim Chief Executive Officer of the Debtor, attested to the importance of the

Leased Premises to the Debtor’s operations. According to Mr. Peters, the Debtor intends to

liquidate the inventory at the Dearborn store, but to keep the remaining stores covered by the

Leases open. See Peters Decl. at ¶¶ 36-37. The Distribution Center in Warren, meanwhile, is the

Debtor’s sole warehouse and is thus a crucial focal point in the Debtor’s business. Id. at Appendix

¶¶ 10 & 20-21.3

Notwithstanding the clear importance of the Leased Premises to the Debtor’s operations,

the Debtor failed to pay any of the rent due under the Leases pre-petition and apparently intends

to continue staying on rent-free during this case. Indeed, the Debtor has not included any apparent

line item for payment of rent in the proposed budget annexed to its motion for authority to use

cash collateral or in its updated budget filed on January 31, 2021. See Dkt. 18 (the “Cash Collateral

Motion”), Ex. 6-5; Dkt. 158.

The Debtor appears to have attempted to shift the burden to pay rent for the Leased

Premises to Planned Furniture Promotions, Inc. and Hilco Merchant Resources, LLC (collectively,

the “Agent”), pursuant to a certain Sale and Promotion Consulting Agreement (the “Consulting

3 LCN notes that while there are references to the rent due with respect to the Distribution Center, no such rent has been paid by the Debtor.


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Agreement”) that this Court approved on an interim basis. See Dkt. 62, Consulting Agreement at

§ 4.4. Regardless of whatever obligation the Agent may have under the Consulting Agreement,

the Debtor is the obligor under the Leases and is enjoying the use and benefit of the Leased

Premises.

In granting the Cash Collateral Motion on an interim basis, this Court confirmed the vital

importance of the Leased Premises by requiring that the Debtor maintain inventory at the

Distribution Center with an aggregate value of not less than $2.6 million. See Dkt. 75 at ¶ 7. That

is to say, this Court has ordered the Debtor to remain in possession of the Distribution Center

notwithstanding the termination of the Lease with respect to the Distribution Center.

RELIEF REQUESTED

By the Motion, LCN requests that this Court direct the Debtor to immediately compensate

LCN for its use and occupancy of the Leased Premises and to continue to so compensate LCN

until possession is returned to LCN, whether by paying directly from the estate or by directing the

Agent to make immediate and ongoing payment.

At the outset, LCN notes that each of the Leases has been terminated as of just before the

filing of this bankruptcy case, and the filing of the bankruptcy case did not resurrect the Leases.

See Estep v. Fifth Third Bank (In re Estep), 173 B.R. 126, 131 (Bankr. N.D. Ohio 1994) (explaining

that executory contract terminated prior to bankruptcy cannot be assumed as it remains terminated

(citations omitted)); see also Heghmann v. Indorf (In re Heghmann), 316 B.R. 395, 403 (B.A.P.

1st Cir. 2004) (“[T]he filing of a bankruptcy petition does not resurrect a lease which was

terminated prior to the petition date.” (citation omitted)).4 Moreover, the Leases do not contain any

provision that would permit the Debtor to revive the Leases absent consent of LCN.

4 LCN acknowledges that under Michigan law, the Debtor has a statutory right of redemption with respect to the


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Here, the Debtor not only failed to pay any Basic Rent due under the Leases since their

inception, the filing of this bankruptcy case confirms the Debtor’s inability to pay its debts as they

come due and the Debtor failed to comply with the insurance requirements under the Leases.

Accordingly, LCN properly exercised its contractual rights under each of the Leases to terminate

the Leases, thereby making the Debtor’s continued use and occupancy of the Leased Premises

improper. Though improper, the Debtor’s continued use and occupancy of the Leased Premises is

apparently essential to the Debtor’s continued operations, whether through normal operations or

liquidation sales, and has been mandated by this Court.

Bankruptcy Code § 503(b)(1) grants administrative expense status to “the actual, necessary

costs and expenses of preserving the estate”. 11 U.S.C. § 503(b)(1)(A). “A debt qualifies as an

‘actual, necessary’ administrative expense only if (1) it arose from a transaction with the

bankruptcy estate and (2) directly and substantially benefitted the estate.” Caradon Doors &

Windows, Inc. v. Eagle-Picher Indus., Inc. (In re Eagle-Picher Indus., Inc.), 447 F.3d 461, 464

(6th Cir. 2006) (quotation, citation, and alteration omitted). The Debtor has continued to use and

occupy the Leased Premises subsequent to the bankruptcy filing, and there can be no question that

such use and occupancy has directly and substantially benefitted the estate, and will continue to

do so until possession is returned to LCN. See In re VPH Pharm., Inc., Case No. 17-30077-DOF,

2017 Bankr. LEXIS 3501, at *9 (Bankr. E.D. Mich. Sept. 8. 2017) (“Continued occupancy by

Debtor in the business property during the post-petition period is an actual and necessary cost of

Leases. See MICH. COMP. LAWS § 600.5744; In re O.H. Holding Co., 132 B.R. 568, 571-72 (Bankr. E.D. Mich. 1991) (concluding that because tenant-debtor’s right to redeem had not expired, lease remained subject to Bankruptcy Code §365). In order to exercise such right and resurrect the otherwise terminated Leases, the Debtor would need to fully cure its default under the Leases which it has no prospect of doing. Unless and until the Debtor fully cures the Leases, they are and will remain terminated.


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preserving the estate and the Debtor's operations and assets.”). The Court itself has recognized the

vital importance of the Leased Premises and affirmatively directed the Debtor to continue to use

and occupy the Leased Premises. There can be no question that the costs associated with such use

and occupancy are actual, necessary costs of preserving the Debtor’s estate.

In the unlikely event this Court concludes that the Leases are not terminated and are

governed by Bankruptcy Code § 365, LCN respectfully requests that this Court compel the Debtor

to immediately assume the Leases and cure the defaults thereunder or reject the Leases and permit

LCN to promptly obtain possession thereof. LCN should not be required to bear the burden of the

Debtor staying on without any assurance of compensation. Moreover, Bankruptcy Code §

365(d)(3) requires that the Debtor pay all rent due post-petition. Accordingly, to the extent the

Court concludes that the Leases are not terminated, LCN submits that it is still entitled to

immediate and full compensation for the Debtor’s continued use and occupancy of the Leased

Premises, and the Debtor should be compelled to assume or reject the Leases without further delay.

Whether pursuant to Bankruptcy Code §§ 503(a)(1) or 365(d)(3), LCN is entitled to

immediate and ongoing compensation for the Debtor’s continued use and occupancy of the Leased

Premises until such time that possession is returned to LCN, whether directly from the Debtor’s

estate or from the Agent. The Debtor’s use and occupancy of the Leased Premises has been and

will be essential to any prospect of successfully reorganizing the Debtor’s financial affairs, and

LCN should be compensated accordingly.

LCN demands that the Court compel the Debtor (or the Agent) to pay, within five (5) days

of entry of an Order granting the Motion (the “Initial Payment Deadline”), the sum of $648,831.99,

which represents the value of the Debtor’s use and occupancy of the Leased Premises from the

filing date and through January 31, 2021 (calculated as the pro rata share of the rent and Additional


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Costs required under the respective Leases for that period) plus a sum equal to the rent and

Additional Costs for the period of February 1, 2021 through date of entry of the Order. LCN further

demands that by the Initial Payment Deadline, the Debtor (or its Agent) pay LCN the sum of

$432,554.66 representing rent and Additional Costs for the two week period commencing on the

date of entry of the Order (the “Two-Week Rent”), and shall pay such Two-Week Rent no later

than every fourteen (14) days after the Initial Payment Deadline, and until such time as the Debtor

returns possession and control of the Leased Premises to LCN.

WHEREFORE, for the reasons set forth herein, LCN respectfully requests that this Court

compel the Debtor to provide LCN with immediate and ongoing compensation for its use and

occupancy of the Premises, and grant such other, further, and different relief as it deems just and

proper.




EXHIBIT “4” Proof of Service


EXHIBIT “5” Affidavits – Reserved

LCN reserves the right to submit affidavits in support of the relief sought herein.


EXHIBIT “6-A” Lease Agreement

6500 East 14 Mile Road

Warren, Michigan


4844-1906-6306\5

LEASE AGREEMENT

by and between

LCN AVF WARREN (MI) LLC,

a Delaware limited liability company,

as LANDLORD

and

LOVES FURNITURE INC.,

a Delaware corporation,

as TENANT

Premises: 6500 East 14 Mile Road, Warren, Michigan

Dated as of: October 1, 2020


4844-1906-6306\5

TABLE OF CONTENTS

Page

1.DEMISE OF PREMISES ......................................................................................................... 1

2.CERTAIN DEFINITIONS. ...................................................................................................... 1

3.TITLE AND CONDITION. ..................................................................................................... 8 4.USE OF LEASED PREMISES; QUIET ENJOYMENT. ..................................................... 9 5.TERM. ........................................................................................................................ 10

6.BASIC RENT. ........................................................................................................................ 10

7.ADDITIONAL RENT. ........................................................................................................... 11

8.NET LEASE: NON-TERMINABILITY. ............................................................................. 12

9.PAYMENT OF IMPOSITIONS. ........................................................................................... 13

10.COMPLIANCE WITH LAWS AND EASEMENT AGREEMENTS; ENVIRONMENTAL MATTERS. ....................................................................................... 14

11.LIENS; RECORDING. ........................................................................................................ 16

12.MAINTENANCE AND REPAIR. ....................................................................................... 17

13.ALTERATIONS AND IMPROVEMENTS. ...................................................................... 19

14.PERMITTED CONTESTS. ................................................................................................. 19

15.INDEMNIFICATION. ......................................................................................................... 20

16.INSURANCE. ........................................................................................................................ 21

17.CASUALTY AND CONDEMNATION. ............................................................................. 24

18.TERMINATION EVENTS. ................................................................................................. 26

19.RESTORATION. .................................................................................................................. 26

20.ASSIGNMENT AND SUBLETTING. ................................................................................ 28

21.EVENTS OF DEFAULT. ..................................................................................................... 30

22.REMEDIES AND DAMAGES UPON DEFAULT. ........................................................... 31

23.NOTICES. ........................................................................................................................ 34

24.ESTOPPEL CERTIFICATE. .............................................................................................. 34

25.SURRENDER. ....................................................................................................................... 35

26.NO MERGER OF TITLE. ................................................................................................... 36

27.BOOKS AND RECORDS. ................................................................................................... 36

28.TENANT AND GUARANTOR STRUCTURE ................................................................. 37

29.NON-RECOURSE AS TO LANDLORD. .......................................................................... 37


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30.FINANCING. ........................................................................................................................ 37

31.SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT. ............................ 38

32.TAX TREATMENT; REPORTING. .................................................................................. 38

33.PERMITTED LEASEHOLD MORTGAGE. .................................................................... 38

34.REIT QUALIFICATIONS. ................................................................................................. 39

35.MISCELLANEOUS. ............................................................................................................ 39


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EXHIBITS

Exhibit “A” - Legal Description of Leased Premises

Exhibit “B” - Machinery and Equipment

Exhibit “C” - Schedule of Permitted Encumbrances

Exhibit “D” - Basic Rent Schedule

Exhibit “E” - Form of Lease Guaranty

Exhibit “F” - Memorandum of Lease

Exhibit “G” - Tenant and Guarantor Organization Information

SCHEDULES

Schedule I - Schedule of Rent


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This LEASE AGREEMENT (as amended, supplemented or modified, this “Lease”), is made as of October 1, 2020 (the “Effective Date”), between LCN AVF WARREN (MI) LLC, a Delaware limited liability company (together with its successors and assigns “Landlord”), with an address at c/o LCN Capital Partners, 888 Seventh Avenue, 4th Floor, New York, New York 10019, and LOVES FURNITURE INC., a Delaware corporation (together with its successors and permitted assigns, “Tenant”), with an address at c/o U.S. Assets, Inc., 1601 Elm Street, Suite 4210, Dallas, Texas 75201.

In consideration of the rents and provisions herein stipulated to be paid and performed, Landlord and Tenant hereby covenant and agree as follows:

1. Demise of Premises. Landlord hereby demises and lets to Tenant, and Tenant hereby takes and leases from Landlord, for the term and upon the provisions hereinafter specified, the following described property (collectively, the “Leased Premises”): (a) the land described in Exhibit A attached hereto together with the Appurtenances (collectively, the “Land”); (b) the buildings, structures and other improvements now or hereafter constructed on the Land (collectively, the “Improvements”); (c) the fixtures, machinery, equipment and other property described in Exhibit B hereto (collectively, the “Equipment”); and (d) any furniture, equipment or other personal property located on the Land and/or in the Improvements as of the Commencement Date.

2. Certain Definitions.

“Additional Rent” is defined in Paragraph 7.

“Adjoining Property” means all sidewalks, driveways, curbs, gores and vault spaces adjoining the Leased Premises.

“Affiliate” of any Person means any Person which shall (i) control, (ii) be under the control of, or (iii) be under common control with such Person (the term “control” as used herein shall be deemed to mean (i) ownership of more than 50% of the outstanding voting stock of a corporation or other majority equity and control interest if such Person is not a corporation and (ii) the power to direct or cause the direction of the management or policies of such Person).

“Alterations” means all changes, additions, improvements or repairs to, all alterations, reconstructions, restorations, renewals, replacements or removals of, and all substitutions or replacements for, any of the Improvements or Equipment, both interior and exterior, structural and non-structural, and ordinary and extraordinary, and shall include any Major Alterations.

“Appurtenances” means all tenements, hereditaments, easements, rights-of-way, rights, privileges in and to the Land, including (a) easements over other lands granted by any Easement Agreement and (b) any streets, ways, alleys, vaults, gores or strips of land adjoining the Land.

“Assignment” means any assignment of rents and leases from Landlord to a Lender which (a) encumbers the Leased Premises and (b) secures Landlord’s obligation to repay a Loan, as the same may be amended, supplemented or modified from time to time.

“Basic Rent” is defined in Paragraph 6.


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“Basic Rent Payment Date” is defined in Paragraph 6.

“Business Day” means any day other than a Saturday, Sunday or a day on which commercial banks in New York or Michigan are required or authorized to be closed.

“Casualty” means any loss of or damage to or destruction of all or any portion of the Leased Premises or Adjoining Property.

“Commencement Date” is defined in Paragraph 5(a).

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

“Condemnation Notice” means notice from the applicable Governmental Authority of the institution of or imminent intention to institute a proceeding for Condemnation.

“Consent Required Alteration” is (i) any Alteration (other than a Structural Alteration) or series of related Alterations for which the cost is reasonably expected to exceed $100,000.00; or (ii) any Structural Alteration. Notwithstanding the foregoing, the installation, maintenance and/or repair of cable, telephone or internet lines (other than a Structural Alteration) for which the cost is less than $10,000 shall not require Landlord’s consent so long as the value and utility of the Leased Premises are not materially diminished thereby.

“Costs” of a Person or associated with a specified transaction means all reasonable costs and expenses incurred by such Person or associated with such transaction, including without limitation, reasonable attorneys’ fees and expenses, court costs, brokerage fees, escrow fees, title insurance premiums, recording fees and transfer taxes, as the circumstances require.

“Default Rate” is defined in Paragraph 7(a)(iii).

“Due Care” means the due care requirements set forth in the DDCC, if and as may be amended.

“Easement Agreement” means any condition, covenant, restriction, easement, declaration, license or other agreement listed as a Permitted Encumbrance or as may hereafter affect the Leased Premises.

“Eligible Institution” shall mean a depository institution or trust company insured by the Federal Deposit Insurance Corporation the short term unsecured debt obligations or commercial paper of which are rated at least “A-1” by Standard & Poor’s Ratings Services, “P-1” by Moody’s Investors Service, Inc., and “F-1” by Fitch, Inc. in the case of accounts in which funds are held for thirty (30) days or less or, in the case of Letters of Credit or accounts in which funds are held for more than thirty (30) days, the long term unsecured debt obligations of which are rated at least “A” by S&P, “A2” by Moody’s Investors Service, Inc. and “A” by Fitch, Inc..

“Environmental Assessments” means all environmental, soils or engineering reports, assessments (including the BEA and DDCC as referred to in “Existing Environmental Reports”), studies, test results, notices, agreements and other documentation with respect to the Leased Premises that have been provided by Tenant to Landlord prior to the date of this Lease.


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“Environmental Law” means (a) any applicable Federal, state, foreign or local law, statute, ordinance, regulation, license, permit, authorization, approval, court order, judgment, decree, injunction, code or requirement enacted or promulgated by, or legally-binding agreement with, any Governmental Authority, (i) relating to pollution of the environment (or the cleanup thereof), or the protection of air, surface water, groundwater, drinking water supply, or land surface or subsurface strata from injury caused by a Hazardous Substance or (ii) concerning exposure to, or the use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, handling, labeling, production, disposal or remediation of any Hazardous Substance, and (b) any common law or equitable doctrine (including, without limitation, injunctive relief and tort doctrines such as negligence, nuisance, trespass and strict liability) that may impose liability or obligations or damages due to the presence of, exposure to, or ingestion of, any Hazardous Substance. The term Environmental Law includes, without limitation, the Federal Comprehensive Environmental Response Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act, the Federal Water Pollution Control Act, the Federal Clean Air Act, the Federal Clean Water Act, the Federal Resources Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments to RCRA), the Federal Solid Waste Disposal Act, the Federal Toxic Substance Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Federal Occupational Safety and Health Act of 1970 (to the extent it relates to the exposure to Hazardous Substances), the Federal National Environmental Policy Act, the Michigan Natural Resources and Environmental Protection Act and the Federal Hazardous Materials Transportation Act, and any similar state or local Law.

“Environmental Violation” means (a) any discharge, disposal, spillage, emission, escape, pumping, pouring, injection, leaching, release, seepage, filtration or transporting of any Hazardous Substance at, upon, under, onto or within the Leased Premises, or from the Leased Premises to the environment, in violation of any Environmental Law and which would result in any liability to any Federal, state or local Governmental Authority or any other Person pursuant to any Environmental Law for the costs of any removal or remedial action or natural resources damage or for bodily injury or property damage, (b) any deposit, storage, dumping, placement or use of any Hazardous Substance at, upon, under or within the Leased Premises or which extends from the Leased Premises to any Adjoining Property in violation of any Environmental Law and which would result in any liability to any Federal, state or local Governmental Authority or to any other Person pursuant to any Environmental Law for the costs of any removal or remedial action or natural resources damage or for bodily injury or property damage, (c) the abandonment or discarding at the Leased Premises of any barrels, containers or other receptacles containing any Hazardous Substances in violation of any Environmental Laws, or (e) any violation of or material continuing noncompliance with any Environmental Law existing or occurring at the Leased Premises.

“Equipment” is defined in Paragraph 1.

“Escrow Charges” is defined in Paragraph 9(b).

“Escrow Payment” is defined in Paragraph 9(b).

“Event of Default” is defined in Paragraph 21(a).


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“Existing Environmental Reports” means collectively (i) that certain Phase I Environmental Site Assessment prepared by EBI Consulting dated February 6, 2017, having EBI Project No. 1117000435; (ii) that certain Documentation of Due Care Compliance prepared by PM Environmental, Inc. dated March 1, 2017, having Project No. 01-8009-0-0003 (the “DDCC”); and (iii) that certain Baseline Environmental Assessment prepared by PM Environmental, Inc. dated March 1, 2017, having Project No. 01-8009-0-0001 (the “BEA”).

“Expiration Date” is defined in Paragraph 5(a).

“Federal Funds” means Federal or other immediately available funds which at the time of payment are legal tender for the payment of public and private debts in the United States of America.

“GAAP” means generally accepted accounting principles in the United States of America.

“Governmental Authority” means any federal, state or local government, authority, agency or regulatory body whether now or hereafter in existence.

“Guarantor” means U.S. Assets, Inc., a Texas corporation.

“Guaranty” means the Guaranty of Lease, dated as of the date hereof, executed and delivered by Guarantor in the form Exhibit E.

“Hazardous Substance” means (a) any substance, material, petroleum, petroleum product, derivative, compound or mixture, mineral (including asbestos), chemical, gas, medical waste, or other pollutant that is regulated as toxic, hazardous or acutely hazardous to the environment or under any Environmental Law or (b) any substance supporting a claim under any Environmental Law due to its dangerous or deleterious properties or characteristics, whether or not defined as hazardous as such under any Environmental Law. Hazardous Substances include, without limitation, any toxic or hazardous waste, pollutant, contaminant, petroleum or petroleum-derived substances or waste, radon, radioactive materials, friable asbestos, friable asbestos containing materials, insulation, lead and polychlorinated biphenyls.

“Impositions” is defined in Paragraph 9(a).

“Improvements” is defined in Paragraph 1.

“Indemnitee” is defined in Paragraph 15.

“Insurance Requirements” means the requirements of all insurance policies maintained in accordance with this Lease.

“Land” is defined in Paragraph 1.

“Landlord” is defined in the introductory Paragraph.


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

“Lease” is defined in the introductory Paragraph.

“Lease Year” means, with respect to the first Lease Year, the period commencing on the Commencement Date and ending at midnight on the last day of the twelfth (12th) full consecutive calendar month following the month in which the Commencement Date occurred, and each succeeding twelve (12) month period during the Term.

“Leased Premises” is defined in Paragraph 1.

“Legal Requirements” means the requirements of all present and future Laws (including, but not limited to, zoning and Laws relating to accessibility to, usability by, and discrimination against, disabled individuals, and all permit and licensing requirements) and all covenants, restrictions and conditions, including all Easement Agreements, now or hereafter of record which may be applicable to Tenant or to the Leased Premises (or any portion thereof), or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or restoration of the Leased Premises (or any portion thereof), even if compliance therewith necessitates structural changes or improvements or results in interference with the use or enjoyment of any of the Leased Premises or requires Tenant to carry insurance other than as required by this Lease.

“Lender” means any Person which may, on or after the date hereof, make a Loan to Landlord or be the holder of a Note, together with its successors, transferees and assigns which Loan is secured by Landlord’s fee simple interest in all or any portion of the Leased Premises.

“Letter of Credit” means an irrevocable, unconditional, transferable (without the payment of a transfer fee by the transferring or transferee beneficiary thereof), clean, evergreen sight draft letter of credit acceptable to Landlord and Lender and their respective successors and assigns and entitling Landlord and Lender and their respective successors and assigns to draw thereon in New York, New York (or such other location may be acceptable to Landlord) based solely on a statement purportedly executed by an officer of Landlord or Lender their respective successors and assigns stating that it has the right to draw thereon issued by a domestic Eligible Institution or the U.S. agency or branch of a foreign Eligible Institution and with respect to which Landlord has no reimbursement obligation.

“Loan” means any loan made by one or more Lenders to Landlord, which loan is secured by a Mortgage and an Assignment and evidenced by a Note.

“Monetary Obligations” means Rent, Impositions, Escrow Charges and all other sums payable by Tenant under this Lease to Landlord, to any third party on behalf of Landlord, or to any Indemnitee.

“Moody’s” means Moody’s Investor Services, Inc.


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“Mortgage” means any mortgage or deed of trust from Landlord to a Lender which (a) encumbers the Leased Premises (or any portion thereof) and (b) secures Landlord’s obligation to repay a Loan, as the same may be amended, supplemented or modified.

“Net Award” means (a) the entire award payable to Landlord or Lender by reason of a Condemnation, less any sums paid pursuant to a separate claim by Tenant for (i) any furniture, fixtures and equipment owned by Tenant and affected by such Condemnation, or (ii) Tenant's relocation expenses; or (b) the entire proceeds of any insurance policy by reason of a Casualty to the extent such insurance is required by this Lease (to the extent payable to Landlord or Lender) of Paragraph 16(b), in each case, less any expenses incurred by Landlord and Lender in collecting such award or proceeds.

“Note” means any promissory note evidencing Landlord’s obligation to repay a Loan, as the same may be amended, supplemented or modified.

“Partial Casualty” means any Casualty which does not constitute a Termination Event.

“Partial Condemnation” means any Condemnation which does not constitute a Termination Event.

“Permitted Encumbrances” means those covenants, restrictions, reservations, liens, conditions and easements and other encumbrances, other than any Mortgage or Assignment, listed on Exhibit C hereto (but such listing shall not be deemed to revive any such encumbrances that have expired or terminated or are otherwise invalid or unenforceable).

“Permitted Leasehold Mortgage” means any first lien leasehold mortgage, deed of trust, pledge or similar security device covering all of Tenant’s leasehold estate in the Leased Premises which shall be granted by Tenant but in no event encumber Landlord’s fee interest in any of the Leased Premises.

“Permitted Leasehold Mortgagee” shall mean a national banking association, state chartered bank, savings and loan association, insurance company, savings bank, foreign bank authorized to do business in the United States, trust company, real estate investment trust or pension fund, each of which shall have gross assets in excess of $1,000,000,000.

“Permitted Violations” is defined in Paragraph 14.

“Person” means an individual, partnership, limited liability company, association, corporation or other entity.

“Present Value” of any amount means such amount discounted by a rate per annum which is the lower of (a) the Prime Rate at the time such present value is determined or (b) six percent (6%) per annum.

“Prime Rate” means the interest rate per annum as published, from time to time, in The Wall Street Journal as the “Prime Rate” in its column entitled “Money Rate”. The Prime Rate may not be the lowest rate of interest charged by any “large U.S. money center commercial banks” and Landlord makes no representations or warranties to that effect. In the event The Wall Street Journal ceases publication or ceases to publish the “Prime Rate” as described above, the


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Prime Rate shall be the average per annum discount rate (the “Discount Rate”) on ninety-one (91) day bills (“Treasury Bills”) issued from time to time by the United States Treasury at its most recent auction, plus three hundred (300) basis points. If no such 91-day Treasury Bills are then being issued, the Discount Rate shall be the discount rate on Treasury Bills then being issued for the period of time closest to ninety-one (91) days.

“Renewal Date” is defined in Paragraph 5.

“Renewal Term” is defined in Paragraph 5.

“Rent” means, collectively, Basic Rent and Additional Rent.

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

“S&P” means Standard and Poor’s Ratings Services, a division of McGraw Hill Companies, Inc.

“Site Assessments” is defined in Paragraph 10(c).

“Site Reviewers” is defined in Paragraph 10(c).

“State” means the State of Michigan.

“Structural Alteration” is any Alteration that would be reasonably expected to affect either or both any structural component of, or any building system servicing, the Leased Premises.

“Subsidiary(ies)” of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the shares of stock or other equity interests having ordinary voting power to elect a majority of the board of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity.

“Surviving Obligations” means any obligations of Tenant under this Lease, actual or contingent, which arise on or prior to the expiration or prior termination of this Lease or which survive such expiration or termination by their own terms.

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


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“Tenant” is defined in the introductory Paragraph.

“Term” is defined in Paragraph 5(a).

“Termination Date” is defined in Paragraph 18(b).

“Termination Event” means a Casualty or Condemnation described in Paragraph 18(a).

“Termination Notice” is defined in Paragraph 18(a).

“Third Party Purchaser” is defined in Paragraph 20(i).

“Warranties” is defined in Paragraph 3(c).

“Work” is defined in Paragraph 13(c).

3. Title and Condition.

(a) The Leased Premises are demised and let subject to (i) that Mortgage and Assignment dated as of March 1, 2017, given by Landlord, as mortgagor, in favor of its Lender, together with its successors and assigns, as mortgagee and any other Mortgage and Assignment in effect from time to time, (ii) the rights of any Persons in possession of the Leased Premises as of the date hereof, (iii) the state of title of the Leased Premises as of the date hereof, including any Permitted Encumbrances, (iv) any state of facts which an accurate survey or physical inspection of the Leased Premises might show, (v) all Legal Requirements, including any existing violation of any thereof, (vi) the condition of the Leased Premises as of the date hereof, without representation or warranty by Landlord, and (vii) any rights of revision or rights of first refusal contained in any Permitted Encumbrance relating to the applicable Leased Premises.

(b) LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS WHERE IS AND WITH ALL FAULTS. TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LANDLORD’S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY (xiv) OPERATION, (xv) THE EXISTENCE OR PRESENCE OF ANY HAZARDOUS SUBSTANCE, OR (xvi) COMPLIANCE OF THE LEASED PREMISES WITH ANY LEGAL REQUIREMENT; AND ALL RISKS RELATED TO THE FOREGOING ARE TO BE BORNE BY TENANT, EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAVE BEEN INSPECTED BY TENANT AND ARE SATISFACTORY TO IT.


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IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN THE LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO THE CONDITION OF THE LEASED PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.

(c) Landlord hereby assigns to Tenant, without recourse or warranty whatsoever, in conjunction with Landlord, the right to enforce all assignable warranties, guaranties, indemnities, causes of action and similar rights (collectively “Warranties”) which Landlord may have against any manufacturer, seller, engineer, contractor or builder in respect of the Leased Premises. Such assignment shall remain in effect until the expiration or earlier termination of this Lease, whereupon such assignment shall cease and all of the Warranties shall automatically revert to Landlord. In confirmation of such reversion Tenant shall execute and deliver promptly any certificate or other document reasonably required by Landlord. Landlord shall also retain the right to enforce any Warranties upon the occurrence and during the continuance of an Event of Default. Tenant shall use commercially reasonable efforts to enforce the Warranties in accordance with their respective terms. Landlord may, at its sole option, assign to Tenant its rights to enforce any assignable warranties, guaranties, indemnities, causes of action and similar rights which Landlord may have against a former lessee or licensee in respect of the Leased Premises upon Tenant’s written request therefor.

(d) Landlord owns fee simple title the Leased Premises, subject to the Permitted Encumbrances.

(e) Except as may be disclosed in the Existing Environmental Reports, to the actual knowledge of Tenant, without investigation or inquiry, there is no Environmental Violation at the Leased Premises.

4. Use of Leased Premises; Quiet Enjoyment.

(a) Subject to Legal Requirements and Permitted Encumbrances, Tenant may occupy and use the Leased Premises for (i) the sale of furniture and related accessories, mattresses, televisions, appliances, other electronics, and ancillary business and office uses, including where applicable storage of merchandise and (ii) with Landlord’s and Lender’s prior written consent (which consent of Landlord and Lender shall not unreasonably withhold), for any other lawful purpose (this Paragraph 4(a)(i) and (ii), collectively, the "Permitted Use"). Tenant shall be responsible for obtaining and maintaining all permits, licenses, certificates of occupancy, or any other items required by Law or any Legal Requirement with respect to Tenant’s permitted use and occupancy of the Leased Premises. Tenant shall not use or occupy or permit the Leased Premises to be used or occupied, nor do or permit anything to be done in or on the Leased Premises (or any portion thereof), in a manner which would or could reasonably be expected to (i) violate any Law, Legal Requirement or Permitted Encumbrance, (ii) make void or voidable or


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cause any insurer to cancel any insurance required by this Lease, or make it difficult or impossible to obtain any such insurance at commercially reasonable rates, (iii) make void or voidable, cancel or cause to be cancelled or release the Warranties, (iv) cause structural injury to the Improvements or (v) constitute a public or private nuisance or waste. If during the Term Tenant’s use or occupancy of the Leased Premises (or any portion thereof) are no longer permitted by Law or any Legal Requirement, Tenant shall not have the right to terminate this Lease.

(b) Subject to the provisions hereof, so long as no Event of Default has occurred and is continuing, Tenant shall quietly hold, occupy and enjoy the Leased Premises throughout the Term, without any hindrance, ejection or molestation by Landlord with respect to matters that arise after the date hereof, provided that Landlord or its agents may enter upon and examine the Leased Premises at such reasonable times as Landlord may select and upon reasonable notice to Tenant (except in the case of any emergency, in which event no notice shall be required) for the purpose of inspecting such Leased Premises, verifying compliance or non-compliance by Tenant with its obligations hereunder and the existence or non-existence of an Event of Default or event which with the passage of time and/or notice would constitute an Event of Default, showing the Leased Premises to prospective Lenders and purchasers, making any repairs and taking such other action with respect to the Leased Premises as is permitted by any provision hereof, provided Landlord does not interfere with Tenant's use and operations at the Leased Premises. Tenant shall permit inspection of the Leased Premises by any federal, state, county or municipal officer or representative to the extent required by law or required by any federal, state, county or municipal officer or representative to determine if the Leased Premises or any portion thereof comply with any Law or Legal Requirement.

5. Term.

(a) Subject to the provisions hereof, Tenant shall have and hold the Leased Premises for an initial term (as extended or renewed in accordance with the provisions hereof, the “Term”) commencing on October 1, 2020 (the “Commencement Date”) and ending on September 30, 2040 (the “Expiration Date”).

(b) Tenant shall have two (2) options (each, an “Option”) to extend this Lease for an additional period of five (5) years each (each, a “Renewal Term”). At least twenty-seven (27) months prior to the Expiration Date or expiration of the first Renewal Term (assuming Tenant exercises its first Option), Tenant shall notify Landlord in writing that Tenant is electing to extend this Lease for the Leased Premises for a Renewal Term. The Basic Rent for each Renewal Term shall be determined in accordance with Exhibit D. Any such extension of the Term shall be subject to all of the provisions of this Lease (except that Tenant shall not have the right to any additional Renewal Terms other than the two (2) Renewal Terms provided in this Paragraph 5(b) and this Lease shall automatically expire at the expiration of the second (2nd) Renewal Term, unless otherwise agreed to in writing between Landlord and Tenant).

(c) If Tenant exercises its option pursuant to Paragraph 5(b) not to extend or further extend the Term, then Landlord shall have the right during the remainder of the Term then in effect and, in any event, Landlord shall have the right during the last year of the Term, to (i) advertise the availability of the Leased Premises for sale or reletting and to erect upon the Leased


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Premises signs indicating such availability and (ii) show the Leased Premises to prospective purchasers or tenants or their agents at such reasonable times as Landlord may select upon prior notice to Tenant.

6. Basic Rent.

Tenant shall pay to Landlord for the Leased Premises during the Term, annual rent, on a quarterly basis, in the amounts (“Basic Rent”) and on the dates (each, a “Basic Rent Payment Date”) provided for in Exhibit D and Schedule I. Each payment of Basic Rent shall be made to Landlord (or one or more other Persons as Landlord may designate) (but not more than three (3) Persons)) in Federal Funds on each Basic Rent Payment Date, without offset, abatement or deduction, pursuant to wire transfer instructions delivered to Tenant from time to time.

7. Additional Rent.

(a) Tenant shall pay and discharge, as additional rent (collectively, “Additional Rent”):

(i) except as otherwise specifically provided herein, all Costs of Tenant, Landlord and any other Persons specifically referenced herein which are incurred in connection or associated with (A) the ownership, use, non-use, occupancy, monitoring, possession, operation, condition, design, construction, maintenance, alteration, repair or restoration of the Leased Premises pursuant to the provisions of this Lease, (B) the performance of any of Tenant’s obligations under this Lease, (C) the adjustment, settlement or compromise of any insurance claims and/or condemnation awards involving or arising from the Leased Premises, (D) the prosecution, defense or settlement of any litigation involving or arising from the Leased Premises or this Lease in which it is the prevailing party for matters occurring after the Commencement Date, except as set forth in Paragraph 35(r) below and except for those matters arising solely from Landlord's financing, purchase, sale or transfer of the Leased Premises, (E) the exercise or enforcement by Landlord, its successors and assigns, of any of its rights under this Lease, except as set forth in Paragraph 35(r), (F) any amendment, supplement, modification or termination of this Lease requested by Tenant or necessitated by any action of Tenant, including without limitation, any default by Tenant in the performance of any of its obligations under this Lease, (G) any act undertaken by Landlord (or its counsel) at the request of Tenant, any act of Landlord performed on behalf of Tenant, (H) Tenant's failure to act promptly in an emergency situation, (I) out-of-pocket expenses and fees associated with wire transfers of Rent payments, and (J) all other items specifically required to be paid by Tenant under this Lease;

(ii) after the date all or any portion of any installment of Basic Rent is due and not paid within three (3) Business Days after the applicable Basic Rent Payment Date, an amount (the “Late Charge”) equal to five percent (5%) of the amount of such unpaid installment or portion thereof to reimburse Landlord for its cost and inconvenience incurred as a result of Tenant’s delinquency; provided, however, Landlord shall provide written or oral notice to Tenant and Guarantor of any delinquency during the first Lease Year before charging the Late Charge and if such Basic Rent is not paid within two (2) days after such notice the Late Charge will become due and payable; it being acknowledged that an e-mail or a phone call to an officer of Tenant and Guarantor shall be sufficient notice under this Paragraph 7(a)(ii). Tenant acknowledges that the damages to and costs incurred by Landlord resulting from Tenant’s late


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payment of Basic Rent would be difficult, if not impossible, to ascertain with any accuracy, and that the five percent (5%) charge represents Landlord and Tenant’s efforts to approximate such potential damages and costs;

(iii) interest at the rate (the “Default Rate”) of five percent (5%) over the Prime Rate per annum on the following sums until paid in full: (A) all overdue installments of Basic Rent from the respective due dates thereof, (B) all overdue amounts of Additional Rent relating to obligations which Landlord shall have paid on behalf of Tenant, from the date of payment thereof by Landlord, and (C) all other overdue amounts of Additional Rent, from the date when any such amount becomes overdue; and

(iv) two thousand five hundred dollars ($2,500) per month for each month that Tenant is at least three (3) Business Days late in the delivery of the annual and quarterly financial statements that are required to be delivered pursuant to Paragraph 28(b) (Books and Records), subject to the last sentence of Paragraph 8(b); provided, however, Landlord shall provide written or oral notice to Tenant and Guarantor of any late delivery during the first Lease Year before charging the late fee herein and if not paid within two (2) days after such notice such late fee will be due and payable; it being acknowledged that an e-mail or a phone call to an officer of Tenant and Guarantor shall be sufficient notice under this Paragraph 7(a)(iv).

(b) Tenant shall pay and discharge (i) any Additional Rent referred to in Paragraph 7(a)(i) when the same shall become due; provided that amounts which are billed to Landlord or any third party, but not to Tenant, shall be paid within seven (7) Business Days after Landlord’s demand for payment thereof and submission of supporting documentation to Tenant, and (ii) any other Additional Rent, within seven (7) Business Days after Landlord’s demand for payment thereof and submission of supporting documentation to Tenant.

(c) In no event shall amounts payable under Paragraph 7(a)(ii), and (iii) or elsewhere in this Lease exceed the maximum amount permitted by applicable Law.

8. Net Lease: Non-Terminability.

(a) This is a net lease and all Monetary Obligations shall be paid without notice or demand (except as otherwise expressly provided in this Lease) and without set-off, counterclaim, recoupment, abatement, suspension, deferment, diminution, deduction, reduction or defense (collectively, a “Set-Off”).

(b) This Lease and the rights of Landlord and the obligations of Tenant hereunder shall not be affected by any event or for any reason or cause whatsoever foreseen or unforeseen. The previous sentence notwithstanding, whenever a period of time is herein prescribed for action to be taken by Landlord or Tenant, Landlord or Tenant shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time, any cause or causes beyond Landlord’s or Tenant's reasonable control and which by the exercise of due diligence Landlord or Tenant, as applicable, is unable, wholly or in part, to prevent, which may include, without limitation, acts of God, labor disputes, civil commotion or riot, war, exercise of police or governmental power permitting authority delays not caused directly or indirectly by Landlord, fire or other casualty event, order of a governmental authority, natural disaster, existence of any catastrophic event or similar emergency condition (including a pandemic), a declaration of a


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state of emergency by the government of the United States or the state, county or municipality where the Leased Premises is located, nuclear or atomic disaster (collectively "Force Majeure"). Notwithstanding the foregoing, no Force Majeure shall relieve Tenant of its Monetary Obligations due under this Lease; provided, however, fire or other casualty, act of God or natural disaster may delay payment of Monetary Obligations only to the extent reasonably necessary to deal with such fire or other casualty, act of God or natural disaster and provided, further, that any Costs incurred by Landlord in connection with such delay shall be paid by Tenant upon demand therefor.

(c) The obligations of Tenant hereunder shall be separate and independent covenants and agreements, all Monetary Obligations shall continue to be payable in all events (or, in lieu thereof, Tenant shall pay amounts equal thereto), and the obligations of Tenant hereunder shall continue unaffected unless the requirement to pay or perform the same shall have been terminated or delayed pursuant to an express provision of this Lease. The obligation to pay Rent or amounts equal thereto shall not be affected by any collection of rents by any governmental body pursuant to a tax lien or otherwise where said lien was placed as a result of Tenant’s failure to comply with its obligations under this Lease. All Rent payable by Tenant hereunder shall constitute “rent” for all purposes (including Section 502(b)(6) of the Federal Bankruptcy Code).

(d) Except as otherwise expressly set forth in this Lease, Tenant shall have no right and hereby waives all rights which it may have under any Law to quit, terminate or surrender this Lease or the Leased Premises.

9. Payment of Impositions.

(a) Tenant shall pay and discharge when due: all taxes (including, without limitation, real and personal property, franchise, sales, use, gross receipts and rent and occupancy taxes and other taxes, if any, that may be based on the rental under this Lease); all charges for any easement or agreement maintained for the benefit of the Leased Premises, including, without limitation, and the Easement Agreements; all assessments (including special assessments and any other charges or claims imposed by a governmental or municipal entity) and levies; all fines, penalties and other costs in connection with Tenant’s noncompliance with any applicable Law or Legal Requirements; all permit, inspection and license fees; all rents and charges for water, sewer, utility and communication services relating to the Leased Premises; all other public charges, whether of a like or different nature, even if unforeseen or extraordinary, imposed upon or assessed against (i) Tenant, (ii) Tenant’s interest in the Leased Premises, (iii) the Leased Premises during the Term or (iv) Landlord as a result of or arising in respect of the acquisition, ownership, occupancy, leasing, use, possession or sale of the Leased Premises during the Term, any activity conducted on the Leased Premises during the Term, or the Rent (collectively, the “Impositions”); provided that nothing herein shall obligate Tenant to pay (A) income, excess profits or other taxes of Landlord (or Lender) which are determined on the basis of Landlord’s (or Lender’s) net income or net worth (unless such taxes are in lieu of or a substitute for any other tax, assessment or other charge upon or with respect to the Leased Premises which, if it were in effect, would be payable by Tenant under the provisions hereof or by the terms of such tax, assessment or other charge and, except for margin, excise or similar taxes to the extent expressly provided to be paid for by Tenant hereinabove), (B) any estate, inheritance, succession, gift or similar tax imposed on Landlord, (C) any transfer, conveyance or mortgage tax related to


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the acquisition, sale or financing of the Leased Premises by Landlord, or (D) any capital gains tax imposed on Landlord in connection with the sale of the Leased Premises to any Person. Landlord shall have the right to require Tenant to pay, together with scheduled installments of Basic Rent, the amount of the gross receipts or rent tax, if any, payable with respect to the amount of such installment of Basic Rent. If any Imposition may be paid in installments without interest or penalty, Tenant shall have the option to pay such Imposition in installments. Tenant shall be responsible to obtain all bills for the payment of Impositions and shall prepare and file all tax reports required by Governmental Authorities which relate to the Impositions. Tenant shall deliver to Landlord (1) copies of all settlements and notices pertaining to the Impositions which may be issued by any Governmental Authority within ten (10) days after Tenant’s receipt thereof, (2) receipts for payment of all taxes required to be paid by Tenant hereunder within thirty (30) days after the due date thereof provided that in each instance Tenant shall deliver such receipts at least ten (10) days prior to delinquency of such taxes, and (3) receipts for payment of all other Impositions within ten (10) days after Landlord’s request therefor. To the extent any Impositions relate to periods after the Commencement Date and are paid by Landlord prior to the Commencement Date, Tenant shall reimburse Landlord for such Impositions.

(b) Following the occurrence and during the continuance of an Event of Default, and for a reasonable period of time thereafter not to exceed twelve (12) months, Tenant shall pay to Landlord such amounts (each an “Escrow Payment”) monthly so that there shall be in an escrow account an amount sufficient to pay the Escrow Charges (as hereinafter defined) as they become due. As used herein, “Escrow Charges” means real estate taxes, assessments and, as discussed below in greater detail, tenant improvements and capital expenditures which are the obligation of Tenant under this Lease on or with respect to the Leased Premises or payments in lieu thereof. Landlord shall reasonably determine the amount of the Escrow Charges and the amount of each Escrow Payment; provided, however, that Landlord’s determination of the amount required for either or both tenant improvements or capital expenditures must be substantiated by a written property condition and recommendation report prepared by an independent and commercially reasonable third party property condition consultant possessing the requisite skills required to opine on the applicable property condition issue. The Escrow Payments may not be commingled with other funds of Landlord or other Persons and no interest thereon shall be due or payable to Tenant. Landlord shall apply the Escrow Payments to the payment of the Escrow Charges in such order or priority as Landlord shall determine or as required by Law. If at any time the Escrow Payments theretofore paid to Landlord shall be insufficient for the payment of the Escrow Charges, Tenant, within ten (10) days after Landlord’s demand therefor, shall pay the amount of the deficiency to Landlord. Tenant acknowledges and agrees that if it is required to make Escrow Payments under this Paragraph 9(b), Landlord shall have the right to deposit such funds with Lender to be applied in accordance with the terms of this Lease.

10. Compliance with Laws and Easement Agreements; Environmental Matters.

(a) During the Term, Tenant shall, at its expense, comply with and cause the Leased Premises, and use commercially reasonable efforts to cause any other Person occupying or present on any part of the Leased Premises, to comply with all Insurance Requirements and all Legal Requirements (including all applicable Environmental Laws). Tenant shall not at any time during the Term (i) cause, permit or suffer to occur any Environmental Violation or exacerbate any conditions identified or described in any of the Existing Environmental Reports (“Existing


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Conditions”) or otherwise violate Due Care; (ii) permit any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating the Leased Premises under or through Tenant to cause, permit or suffer to occur any Environmental Violation or exacerbate any Existing Conditions or violate Due Care and, at the written request of Landlord, Tenant shall promptly remediate or undertake any other appropriate response action to the extent required under any Environmental Law to correct (x) any Environmental Violation committed during its tenancy or (z) any existing condition that was exacerbated by Tenant or any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating the Leased Premises under or through Tenant to the extent of such exacerbation, or (iii) without the prior written consent of Landlord, permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface or the subsurface of any of the Land, regardless of the depth thereof or the method of mining or extraction thereof or (iv) cause, permit or suffer to occur a default (beyond applicable notice and cure periods) under the Permitted Encumbrances.

(b) Tenant, at its sole cost and expense, will at all times promptly and faithfully abide by, discharge and perform all of the covenants, conditions and agreements contained in any Easement Agreement and other Permitted Encumbrances on the part of Landlord or the occupier to be kept and performed thereunder. Tenant will not alter, modify, amend or terminate any Easement Agreement, give any consent or approval thereunder, or enter into any new Easement Agreement without, in each case, prior written consent of Landlord and Lender, which consent shall not be unreasonably withheld, conditioned or delayed.

(c) Upon prior written and reasonable notice from Landlord, Tenant shall permit such persons as Landlord may designate (“Site Reviewers”) to visit the Leased Premises during normal business hours and in a manner which does not unreasonably interfere with Tenant’s operations and perform, at the sole cost and expense of Landlord (except as otherwise expressly provided in this Paragraph 10), environmental visual site investigations, assessments and Due Care inspections, monitoring or other required or prudent due care measures consistent with the DDCC (“Site Assessments”) on the Leased Premises in any of the following circumstances: (i) in connection with any sale, financing or refinancing of the Leased Premises, (ii) within the six month period prior to the expiration of the Term (at Tenant’s cost and expense), (iii) if required by Lender or the terms of any credit facility to which Landlord is bound, (iv) if an Event of Default exists (at Tenant’s cost and expense), (v) periodic entries for compliance with the DDCC, if and as amended, or (vi) at any other time that, in the reasonable opinion of Landlord or Lender, a reasonable basis exists to believe that a Environmental Violation exists (at Tenant’s cost and expense if an Environmental Violation is identified), except with respect to any prior existing conditions specifically identified or described in the Existing Environmental Reports, if such conditions have not been caused by or exacerbated by Tenant in its operations at the Leased Premises. Such Site Assessments may include both above and below the ground testing for Environmental Violations, in the reasonable opinion of the Site Reviewers, to conduct the Site Assessments; provided that no such Site Assessment shall include an invasive investigation unless in the reasonable opinion of the Site Reviewer an invasive investigation is required under any applicable Law or by a Governmental Authority having jurisdiction over the Leased Premises. Tenant shall supply to the Site Reviewers such historical and operational information regarding the Leased Premises in the Tenant’s possession as may be reasonably requested by the Site Reviewers to facilitate the Site Assessments, and shall make reasonably available for meetings with the Site Reviewers appropriate personnel having knowledge of such matters.


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Except as otherwise provided herein, the cost of performing and reporting any Site Assessments shall be paid by Landlord; provided however, if an Environmental Violation, violation of Due Care or exacerbation of Existing Conditions is caused by Tenant or any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating Leased Premises under or through Tenant, Tenant shall pay the reasonable costs of such Site Assessments.

(d) If after thirty (30) days after receiving written notice from Landlord, Tenant fails to comply with any requirement of any Environmental Law in connection with any Environmental Violation, exacerbation of Existing Conditions, or noncompliance with the Due Care requirements under the DDCC caused by Tenant, any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating the Leased Premises under or through Tenant, Landlord shall have the right (but no obligation) to take any and all actions as reasonably necessary or advisable in order to cure such Environmental Violation, exacerbation or noncompliance with Due Care, the reasonable cost of which shall be paid by Tenant. If after thirty (30) days after receiving written notice from Tenant, Landlord fails to comply with any requirement of any Environmental Law in connection with any Environmental Violation which occurs or is found to exist and was caused by Landlord at the Leased Premises, Tenant shall have the right (but no obligation) to take any and all actions as reasonably necessary or advisable in order to cure such Environmental Violation, the reasonable cost of which shall be paid by Landlord. In no event shall Landlord be responsible to Tenant for any Existing Conditions or Environmental Violations identified or described in the Environmental Assessments for the Leased Premises, except as set forth in Paragraph 10(i) below. In no event shall Tenant be responsible to Landlord for any environmental conditions existing prior to the Commencement Date or Environmental Violations identified or described in the Existing Environmental Reports for the Leased Premises except to the extent exacerbated by Tenant or any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating the Leased Premises under or through Tenant.

(e) Except with respect to those conditions identified or described as Existing Conditions, Tenant shall notify Landlord and Lender promptly after becoming aware of any Environmental Violation, exacerbation or noncompliance with Due Care caused by Tenant or Tenant’s operations or any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating Leased Premises under or through Tenant with respect to any of the provisions contained in this Paragraph 10 or Environmental Law and shall forward to Landlord and Lender promptly upon receipt thereof copies of all orders, reports, notices, permits, applications or other written communications with a Governmental Authority relating to any such violation or noncompliance.

(f) Landlord shall notify Tenant promptly after becoming aware of any Environmental Violation, exacerbation or noncompliance with Due Care caused by Landlord with respect to any of the provisions contained in this Paragraph 10 or Environmental Law and shall forward to Tenant promptly upon receipt thereof copies of all orders, notices, permits, applications or other written communications with any Governmental Authority relating to any such violation or noncompliance.

(g) For avoidance of doubt, in no event shall Tenant bear any responsibility hereunder for any Environmental Violations, Hazardous Substances or any other environmental,


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health or safety conditions at any Leased Premises that was caused or first occurred after the expiration or termination of this Lease or surrender of the Leased Premises by Tenant to Landlord, except if caused or exacerbated by or resulting from noncompliance by Tenant, or any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating the Leased Premises under or through Tenant. Further, in no event shall Tenant bear any responsibility hereunder for any Environmental Violations, Hazardous Substances or any other environmental, health or safety conditions at any Leased Premises that was caused, arose, or first occurred prior to the commencement of this Lease and or the delivery of the Leased Premises by Tenant to Landlord except to the extent exacerbated by or resulting from noncompliance with Due Care by Tenant or any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating the Leased Premises under or through the Tenant.

(h) Landlord reserves the right, without Tenant’s consent, to perform a Phase I environmental site assessment on an annual basis at the Leased Premises, and Phase II or such other tests reasonably recommended by Landlord’s or Lender’s environmental consultant.

(i) During the Term of this Lease, Tenant shall not cause any actual or threatened release of Hazardous Substances on or from any of the Leased Premises ("Release") or violate in any respect any Environmental Laws or regulations applicable to the Leased Premises ("Violation"). Tenant agrees to protect, indemnify and keep and save harmless Landlord, Lender and their respective representatives against and from any and all loss, cost, damage or expense arising out of any accident or other occurrence causing injury to any person or property whomsoever or whatsoever on or about the Leased Premises during the Term or as a result of Tenant's Release, Violation, or Tenant’s Environmental Violation or due to any Release occurring during the Term of this Lease howsoever caused, unless solely due to the willful misconduct or gross negligence of Landlord. This obligation of Tenant shall survive the expiration of this Lease for a period of three (3) years after Tenant actually vacates the Leased Premises.

(j) Landlord agrees to protect, indemnify and keep and save harmless Tenant against and from any and all loss, cost, damage or expense arising out of any Release or Environmental Violation at the Leased Premises that first occurred prior to the Commencement Date, except to the extent exacerbated by Tenant or any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating the Leased Premises under or through Tenant. This obligation of Landlord shall survive the expiration of this Lease for a period of three (3) years after Tenant actually vacates the Leased Premises.

(k) Tenant shall, at its sole cost and expense, be responsible for preparing and operating the Leased Premises to meet the provisions of any Asbestos and/or Lead Paint Operations and Maintenance Agreement covering the Leased Premises, as the same may be required, amended, restated, replaced, supplemented or otherwise modified from time to time.

11. Liens; Recording.

(a) Subject to the provisions of Paragraph 14 hereof, Tenant shall not, directly or indirectly, create or permit to be created or to remain and shall promptly discharge or remove any lien, levy or encumbrance on the Leased Premises or on any Rent or any other sums payable


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by Tenant under this Lease, other than any Mortgage or Assignment, the Permitted Encumbrances and any mortgage, lien, encumbrance or other charge created by or resulting solely from any act or omission of Landlord. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING OR OCCUPYING THE LEASED PREMISES THROUGH OR UNDER TENANT, AND THAT NO MECHANICS’ OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO THE LEASED PREMISES. LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED PREMISES REGARDING SUCH NON-LIABILITY OF LANDLORD.

(b) Tenant shall execute, deliver and record, file or register (collectively, “record”) all such instruments as may be required or permitted by any present or future Law in order to evidence the respective interests of Landlord and Tenant in the Leased Premises, and shall cause a memorandum of this Lease (or, if such a memorandum cannot be recorded, this Lease), and any supplement hereto or thereto, to be recorded in such manner and in such places as may be required or permitted by any present or future Law in order to protect the validity and priority of this Lease.

(c) Landlord agrees that, upon the request of Tenant, and in favor of a lender that shall be providing senior secured financing to Tenant (“Tenant’s Lender”), Landlord shall negotiate in good faith for the purpose of executing and delivering a commercially reasonable waiver of Landlord's statutory lien rights, if any, and a consent and agreement with respect to the respective rights of Landlord and Tenant’s Lender regarding the security interests in, and the timing and removal of, any inventory, equipment or trade fixtures in which Tenant’s Lender has a secured interest (the “Collateral”), in form and substance reasonably acceptable to Landlord, Landlord’s Lender, and Tenant’s Lender, so long as such waiver and agreement (i) provides for the indemnification of Landlord and its Lender against any claims by Tenant or any Person claiming through Tenant, and against any physical damage caused to the Leased Premises, in connection with the removal of any of the Collateral by Tenant’s Lender, (ii) expressly excludes any claim by Tenant’s Lender to any right, title or interest in or to any of the Equipment as defined in this Lease, (iii) provides for a reasonable, but limited, time frame for the removal of such Collateral by Tenant’s Lender after the expiration of which same shall be deemed abandoned, (iv) provides for the per diem payment of Basic Rent due hereunder by Tenant’s Lender for each day following the date of the expiration or termination of this Lease that Landlord permits the Collateral to remain in the Leased Premises, and (v) provides for a reasonable period of time during which Landlord shall be permitted to cure any defaults of Tenant under any such financing arrangement.

12. Maintenance and Repair.

(a) Tenant shall at all times maintain the Leased Premises and the Adjoining Property in as good repair and appearance as they are on the date hereof and fit to be used for their intended use in accordance with the practices generally recognized as customary by other owners of comparable commercial leased real properties. Tenant shall at all times maintain the Equipment in as good mechanical condition as it was on the later of the date hereof or the date of its installation, ordinary wear and tear excepted. Tenant shall take every other action reasonably


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necessary or appropriate for the preservation, operation and safety of the Leased Premises. Tenant shall promptly make all repairs and Alterations of every kind and nature, whether foreseen or unforeseen, which may be required to comply with the foregoing requirements of this Paragraph 12(a) or to comply with any Legal Requirement. Landlord shall not be required to make any repairs and Alterations, whether foreseen or unforeseen, or to maintain the Leased Premises in any way, and Tenant hereby expressly waives any right which may be provided for in any Law now or hereafter in effect to make Alterations at the expense of Landlord or to require Landlord to make Alterations except if such Alteration is required as a result of the gross negligence or intentional misconduct of Landlord. Any Alteration made by Tenant pursuant to this Paragraph 12 shall be made in conformity with the provisions of Paragraph 13 (Alterations and Improvements). Tenant hereby agrees and covenants not to commit or permit the Leased Premises to suffer waste, and shall take all precautions necessary to prevent waste from occurring at the Leased Premises.

(b) If any Improvement existing on the date of this Lease or hereafter constructed, shall (i) encroach upon any setback or any property, street or right-of-way adjoining the Leased Premises, (ii) violate any zoning restrictions, including without limitation height or set-back restrictions, or the provisions of any restrictive covenant affecting the Leased Premises, (iii) hinder or obstruct any easement or right-of-way to which the Leased Premises are subject or (iv) impair the rights of others in, to or under any of the foregoing, Tenant shall, as to any Improvements existing on the date of this Lease, if required by any municipality or other Governmental Authority, and as to any Improvements hereafter constructed, promptly after receiving notice or otherwise acquiring knowledge thereof, either (A) obtain from all necessary parties waivers or settlements of all claims, liabilities and damages resulting from each such encroachment, violation, hindrance, obstruction or impairment, whether the same shall affect Landlord, Tenant or both, or (B) take such reasonable action as shall be necessary to remove all such encroachments, hindrances or obstructions and to end all such violations or impairments, including, if necessary, making Alterations.

13. Alterations and Improvements.

(a) Tenant shall have the right to make any Alterations to the Leased Premises without Landlord’s consent except for Consent Required Alterations so long as at the time of construction or installation of any such Alterations no Event of Default exists and the value and utility of the Leased Premises are not materially diminished thereby; provided, however, the installation, maintenance and/or repair of cable, telephone or internet lines (other than a Structural Alteration) for which the cost is less than $10,000 shall not require Landlord’s consent so long as the value and utility of the Leased Premises are not materially diminished thereby. Any Consent Required Alterations to the Leased Premises shall require the consent of Landlord and Lender, not to be unreasonably withheld, conditioned or delayed. All Alterations will be done on a lien-free basis, in a good and workmanlike manner, in conformity with applicable Legal Requirements, with materials of such quality, and in such a manner, so as not to adversely affect the structural integrity of the Leased Premises. Except as set forth to the contrary below, all Alterations (specifically excluding any alterations related to Tenant’s Property, trade fixtures, or branded items/signage) shall become property of Landlord and remain upon and surrendered with the Leased Premises at the expiration of this Lease with respect to the Leased Premises, and Tenant shall execute and deliver to Landlord such instruments as Landlord may reasonably


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require to evidence the ownership by Landlord of such Alterations. At or promptly after the commencement of the Alterations, and Landlord’s reasonable written request, Tenant shall execute and file or record, as appropriate and customary for similar tenant alteration projects in the area of the Leased Premises, in question, a “Notice of Non-Responsibility,” or any equivalent notice permitted under applicable Legal Requirements. Upon completion of any Alterations, Tenant shall promptly provide Landlord with (i) a copy of the certificate of occupancy (if the alterations are of such a nature as would require the issuance of a certificate of occupancy), and (ii) any other documents or information reasonably requested by Landlord pertaining to final required governmental sign-offs and approvals to such Alterations. Landlord agrees to reasonably cooperate with Tenant, at Tenant’s expense, in obtaining all necessary permits and approvals for the addition or any Alterations at no cost or expense to Landlord.

(b) Tenant shall not construct upon the Land any additional buildings without having first obtained the prior written consent of Landlord and Lender, which consent shall not be unreasonably withheld, conditioned or delayed. Landlord shall have the right to require Tenant to remove any Alterations except for those Alterations required by Law or for which Landlord has agreed in writing that removal will not be required.

(c) If Tenant makes any Alterations pursuant to this Paragraph 13 or as required by Paragraph 12 (Maintenance and Repair) or Paragraph 17 (Casualty and Condemnation) (such Alterations and actions being hereinafter collectively referred to as “Work”) whether or not Landlord’s or Lender’s consent is required, then (i) the market value of the Leased Premises so affected shall not be lessened in any material respects by any such Work or its usefulness impaired, (ii) all such Work shall be performed by Tenant on a lien-free basis and in a good and workmanlike manner, (iii) all such Work shall be expeditiously completed in compliance with all Legal Requirements, (iv) all such Work shall comply with the Insurance Requirements, (v) if any such Work involves the replacement of Equipment or parts thereto, all replacement Equipment or parts shall have a value and useful life equal to or greater than the value and useful life of the Equipment being replaced immediately prior to the occurrence of the event which required its replacement (assuming such replaced Equipment was then in the condition required by this Lease), (vi) Tenant shall promptly discharge or remove all liens filed against the Leased Premises arising out of such Work, (vii) Tenant shall procure and pay for all permits and licenses required in connection with any such Work and, if applicable, obtain an updated certificate of occupancy for the applicable Leased Premises, (viii) all such Work shall be the property of Landlord and shall be subject to this Lease, and Tenant shall execute and deliver to Landlord any document reasonably requested by Landlord evidencing the assignment to Landlord of all estate, right, title and interest (other than the leasehold estate created hereby) of Tenant or any other Person to the Work or in the Work, and (ix) Tenant shall comply, to the extent requested by Landlord or required by this Lease, with the provisions of Paragraphs 12(a) and 19(a), whether or not such Work involves restoration of the Leased Premises.

14. Permitted Contests.

Notwithstanding any other provision of this Lease, Tenant shall not be required to (a) pay any Imposition, (b) discharge or remove any lien referred to in Paragraph 11 (Liens; Recording) or Paragraph 13 (Alterations and Improvements) or (c) take any action with respect to any encroachment, violation, hindrance, obstruction or impairment referred to in Paragraph 12(b)


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(such non-compliance with the terms hereof being hereinafter referred to collectively as “Permitted Violations”) and may dispute or contest the same, so long as at the time of such contest no Event of Default exists and so long as Tenant shall diligently contest, in good faith, the existence, amount or validity thereof, the amount of the damages caused thereby, or the extent of its or Landlord’s liability therefor by appropriate proceedings which shall operate during the pendency thereof to prevent or stay (i) the collection of, or other realization upon, the Permitted Violation so contested, (ii) the sale, forfeiture or loss of the Leased Premises (or any portion thereof) or any Rent to satisfy or to pay any damages caused by any Permitted Violation, (iii) any interference with the use or occupancy of the Leased Premises, (iv) any interference with the payment of any Rent, (v) the cancellation or material increase in the rate of any insurance policy or a statement by the carrier that coverage will be denied or (vi) the enforcement or execution of any injunction, order or Legal Requirement with respect to the Permitted Violation. Tenant shall provide Landlord or Lender, as applicable, security which is satisfactory, in Landlord’s and Lender’s reasonable judgment, to assure that such Permitted Violation is corrected, including all Costs, interest and penalties that may be incurred or become due in connection therewith. While any proceedings which comply with the requirements of this Paragraph 14 are pending and the required security is held by Landlord or Lender, as applicable, Landlord shall not have the right to correct any Permitted Violation thereby being contested in accordance with the terms hereof unless Landlord is required by Law to correct such Permitted Violation and Tenant’s contest does not prevent or stay such requirement as to Landlord. Each such contest shall be promptly and diligently prosecuted by Tenant to a final conclusion, except that Tenant, so long as the conditions of this Paragraph 14 are at all times complied with, has the right to attempt to settle or compromise such contest through negotiations. Tenant shall keep Landlord advised as to the status of such contest and shall deliver to Landlord true, correct and complete copies of all material documents, notices, communications and instruments that Tenant submits, receives or otherwise comes into possession of in connection with such contest concurrently with Tenant’s submission, receipt or possession of same in each instance.

Tenant shall pay any and all losses, judgments, decrees and Costs in connection with any such contest and shall, promptly after the final determination of such contest, fully pay and discharge the amounts which shall be levied, assessed, charged or imposed or be determined to be payable therein or in connection therewith, together with all penalties, fines, interest and Costs thereof or in connection therewith, and perform all acts the performance of which shall be ordered or decreed as a result thereof. No such contest shall subject Landlord to the risk of any civil or criminal liability.

15. Indemnification.

(a) Tenant shall pay, protect, indemnify, defend, save and hold harmless Landlord, Lender and all other Persons described in Paragraph 29 (Non-Recourse as to Landlord) (each an “Indemnitee”) from and against any and all liabilities, losses, damages (including punitive damages), penalties, Costs (including reasonable attorneys' fees and costs), causes of action, suits, claims, demands or judgments of any nature whatsoever, howsoever caused (except to the extent arising from the gross negligence or willful misconduct of an Indemnitee), without regard to the form of action and whether based on strict liability, gross negligence, negligence or any other theory of recovery at law or in equity, arising after the Commencement Date from (i) the leasing, use, non-use, occupancy, operation, management, condition, design of any alteration or


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improvement, construction of any alteration or improvement, maintenance, repair or restoration of the Leased Premises or Adjoining Property, (ii) any Casualty in any manner arising from the Leased Premises or Adjoining Property, whether or not Indemnitee has or should have knowledge or notice of any defect or condition causing or contributing to said Casualty, (iii) any violation by Tenant of (A) any provision of this Lease (including any representation or warranty), (B) any suit based on Tenant’s breach of a contract to which it is a party, (C) any Legal Requirement, (D) any Permitted Encumbrance or any encumbrance Tenant consented to, or (E) the BEA and Bona Fide Prospective Purchaser defenses, (iv) any alleged, threatened or actual Environmental Violation that first occurred or existed after Landlord delivered possession of the Leased Premises to Tenant or was exacerbated or resulting from noncompliance with Due Care by Tenant or any sublessee, assignee, emploee, invitee or any other Person accessing, occupying or operating the Leased Premises under or through Tenant, including (A) liability for response costs and for costs of removal and remedial action incurred by the United States Government, any state or local Governmental Authority or any other Person, or damages from injury to or destruction or loss of natural resources, including the reasonable costs of assessing such injury, destruction or loss, incurred pursuant to Section 107 of CERCLA, or any successor section or act or provision of any similar state or local Law, (B) liability for costs and expenses of abatement, correction or clean-up, fines, damages, response costs or penalties which arise from the provisions of any of the other Environmental Laws and (C) liability for personal injury or property damage arising under any statutory or common-law tort theory, including damages assessed for the maintenance of a public or private nuisance or for carrying on of a dangerous activity, or (v) any dispute or contest of any Permitted Violation.

(b) Landlord shall pay, protect, indemnify, defend, save and hold harmless Tenant (also an “Indemnitee”) from and against any and all liabilities, losses, damages (including punitive damages), penalties, Costs (including reasonable attorneys' fees and costs), causes of action, suits, claims, demands or judgments of any nature whatsoever, howsoever caused (except to the extent arising from the gross negligence or willful misconduct of an Indemnitee), without regard to the form of action and whether based on strict liability, gross negligence, negligence or any other theory of recovery at law or in equity, arising after the Commencement Date from (i) any claims arising out of (i) Landlord’s gross negligence or intentional misconduct, or (ii) Landlord’s breach of a contract to which it is a party (other than this Lease).

(c) In case any action or proceeding is brought against any Indemnitee by reason of any claim for which Tenant or Landlord is obligated to indemnify pursuant to Paragraph 10(i), Paragraph 10(j), Paragraph 15(a) or 15(b), as applicable (an “Indemnitor”), except in the event of a conflict of interest or a dispute between Indemnitee and Indemnitor, (i) Indemnitor shall retain its own counsel and defend such claim on behalf of Indemnitee (it being understood Indemnitee may employ counsel of its choice to monitor the defense of any such action, at its own expense), and (ii) the parties shall cooperate in the mutual defense of said claim including providing documents relevant to the defense of any said claim and the production of individuals for interview, deposition or testimony; and (iii) Indemnitor has authority to agree to a monetary settlement in any such matter, as it determines appropriate in its sole discretion but shall not agree to any settlement that includes injunctive relief against Indemnitee without Indemnitee’s written consent. In the event of a conflict of interest, Indemnitee shall have the right to select counsel, and the reasonable cost of such counsel shall be paid by Indemnitor.


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(d) The obligations of the parties under this Paragraph 15 shall survive any termination, expiration or rejection in bankruptcy of this Lease.

16. Insurance.

(a) Tenant shall obtain, pay for and maintain the following insurance on or in connection with respect to the Leased Premises:

(i) Insurance against all risk of physical loss or damage to the Improvements and Equipment as provided under “Special Causes of Loss” form coverage, including the perils of hail, and windstorm (with no exclusion for named storm), in amounts no less than the actual replacement cost of the Improvements and Equipment without deduction for depreciation; Such policies shall contain Replacement Cost and Agreed Amount Endorsements and “Law and Ordinance” coverage (at full replacement cost for Loss to the Undamaged portion of the Building, and for both Demolition Costs and Increased Cost of Construction, for 10% of replacement cost). Such policies and endorsements shall contain deductibles not more than $50,000 per occurrence. Such policies shall name Landlord as a named insured, and Lender as mortgagee/lenders loss payee, with respect to the Leased Premises.

(ii) Commercial General Liability Insurance and Umbrella/Excess Liability Insurance, including Business Automobile Liability Insurance (including Non-Owned and Hired Automobile Liability) against claims for personal injury, bodily injury, death, accident or property damage occurring on, in or as a result of the use of the Leased Premises, in an amount not less than $1,000,000 per occurrence with Umbrella Liability coverage of not less than $9,000,000. Coverage shall also include loss attributable to elevators/escalators (if any), independent contractors, contractual liability and Products/Completed Operations Liability coverage. Such policies shall name Landlord as a named insured and Lender as additional insured with respect to the Leased Premises.

(iii) Workers’ compensation insurance in the amount required by applicable Law.

(iv) Employer’s liability insurance with a limit of at least $1,000,000 per accident and per disease per employee, and $1,000,000 for disease aggregate. in respect of any work or operations on or about the Leased Premises;

(v) Comprehensive Boiler and Machinery/Equipment Breakdown Insurance in an amount equal to the actual replacement cost of the Improvements and all equipment, including but not limited to Equipment delineated in Exhibit B hereon and which may be carried as part of the coverage required under clause (i) above or pursuant to a separate policy or endorsement, provided that such policy or endorsement will include coverage as required in Paragraph 16(a)(vi). If such coverage is provided pursuant to a separate Boiler and Machinery policy or endorsement, Tenant will obtain a Joint Loss Agreement. Such policies shall name Landlord as a named insured and Lender as mortgagee/lenders loss payee with respect to the Leased Premises, and provide for no deductible in excess of $25,000 per occurrence.


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(vi) Business Income/Extra Expense/Loss of Rents Insurance at limits sufficient to cover 100% of the projected gross income for a period not less than twelve (12) months from time of loss and containing an extended period of indemnity of ninety (90) days. Such policies shall name Landlord as a named insured and Lender as lenders loss payee with respect to the Leased Premises.

(vii) During any period in which substantial Alterations at the Leased Premises are being undertaken, builder’s risk insurance covering the total completed value, including all hard and soft costs (which shall include business interruption coverage) with respect to the Improvements being constructed, altered or repaired (on a completed value, non-reporting basis), replacement cost of work performed and equipment, supplies and materials furnished in connection with such construction, alteration or repair of Improvements or Equipment, together with such other endorsements as Landlord may reasonably require, and general liability, worker’s compensation and automobile liability insurance with respect to the Improvements being constructed, altered or repaired, in such form and in such amounts as Landlord may reasonably require. Such policies shall name Landlord as a named insured and Lender as mortgagee/lenders loss payees with respect to the Leased Premises.

(viii) Flood Insurance, if any portion of the Improvements or Equipment is currently or at any time in the future located in a federally designated “Special Flood Hazard Area” in an amount equal to the maximum amount of such insurance available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, or the National Flood Insurance Reform Act of 1994, as each may be amended, plus such excess amount as Landlord and Lender shall require. Such policies shall name Landlord as a named insured, and Lender as mortgagee/loss payee.

(ix) Earthquake Insurance, if the Leased Premises are located in an area with a high degree of seismic activity and the probable maximum loss (PML) or scenario expected loss (SEL) is greater than 20%, in amounts and in form and substance satisfactory to Landlord and Lender. Such polices shall name Landlord as a named insured and Lender as mortgagee/lenders loss payable.

(x) Terrorism Insurance with respect to Paragraphs 16(a)(i), (ii), (vi), and, if applicable (vii) above, for loss resulting from perils and acts of terrorism in amounts and with terms and conditions applicable to commercial property, general liability, business income, and umbrella liability insurance as required under this Paragraph 16(a). As used above, “Terrorism Insurance” shall mean insurance for acts of terror or similar acts of sabotage; provided, that, for so long as the Terrorism Risk Insurance Act of 2002, as extended and modified by the Terrorism Risk Insurance Program Authorization Act of 2015 (as the same may be further modified, amended, or extended, “TRIPRA”) (i) remains in full force and effect and (ii) continues to cover both foreign and domestic acts of terror, the provisions of TRIPRA shall determine what is deemed to be included within this definition of “Terrorism Insurance.”

(xi) Environmental impairment liability (“EIL”) insurance policy in the form of a Pollution and Remediation Legal Liability (“PARLL”) policy with policy limits of $4,000,000 per incident and in the aggregate for Landlord and Lender, and their respective


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successors, assigns and/or affiliates which is listed as an additional named insured, and a deductible of $50,000 with a term of 121 months and an extended reporting period of 36 months;

(xii) Such other insurance (or other terms with respect to any insurance required pursuant to this Paragraph 16, including without limitation amounts of coverage, deductibles, form of mortgagee clause) on or in connection with the Leased Premises as Landlord or Lender may reasonably require (including, without limitation mold insurance); provided that, such insurance is consistent, as to types of coverage and amounts, with the requirements of institutional lenders.

(b) The insurance required by Paragraph 16(a) shall be written by companies having a Best’s rating of A:X or above and a claims paying ability rating of “A” or better by S&P and are authorized to write insurance policies by, the State Insurance Department (or its equivalent) for the State. The insurance policies (i) shall be for such terms as Landlord and Lender may reasonably approve and (ii) shall be in amounts sufficient at all times so that no coinsurance shall apply. If said insurance or any part thereof shall expire, be withdrawn, become void, voidable, unreliable or unsafe for any reason, including a breach of any condition thereof by Tenant or the failure or impairment of the capital of any insurer, or if for any other reason whatsoever said insurance shall become reasonably unsatisfactory to Landlord or Lender, Tenant shall immediately obtain new or additional insurance reasonably satisfactory to Landlord and Lender. If Tenant fails to maintain insurance in accordance with this Paragraph 16, Landlord may, but shall not be obligated to, purchase and maintain such insurance. Tenant shall reimburse Landlord on demand for amounts incurred or expended therefore, and all such amounts incurred or expended shall be Additional Rent.

(c) Each insurance policy referred to in clauses (i), (iv), (v) and (vi) of Paragraph 16(a) shall contain standard non-contributory mortgagee clauses in favor of and reasonably acceptable to Lender. Each policy required by any provision of Paragraph 16(a), except clause (iii) thereof, shall provide that it may not be cancelled, substantially modified or allowed to lapse on any renewal date except after thirty (30) days’ prior written notice to Landlord and Lender.

(d) Tenant shall pay as they become due all premiums for the insurance required by Paragraph 16(a), shall renew or replace each policy and deliver to Landlord evidence of the payment of the full premium therefor or installment then due at least ten (10) days prior to the expiration date of such policy, and shall promptly deliver to Landlord all original certificates of insurance evidencing such coverages or, if required by Lender, original or certified policies. All certificates of insurance provided to Landlord and Lender shall be on ACORD Form 28 (for property coverages) and ACORD Form 25 (for liability coverages).

(e) Anything in this Paragraph 16 to the contrary notwithstanding, any insurance which Tenant is required to obtain pursuant to Paragraph 16(a) may be carried under a “blanket” policy or policies covering other properties of Tenant or under an “umbrella” policy or policies covering other liabilities of Tenant, as applicable; provided that, such blanket or umbrella policy or policies otherwise comply with the provisions of this Paragraph 16, and upon request, Tenant shall provide to Landlord a Statement of Values which may be reviewed annually and shall be amended to the extent determined necessary by Landlord based on revised Replacement Cost


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Valuations. The original or a certified copy of each such blanket or umbrella policy shall promptly be delivered to Landlord and Lender.

(f) Tenant shall not carry separate insurance concurrent in form or contributing in the event of a Casualty with that required in this Paragraph 16 unless (i) Landlord and Lender are included therein as additional insureds, with loss payable as provided herein, and (ii) such separate insurance complies with the other provisions of this Paragraph 16. Tenant shall immediately notify Landlord of such separate insurance and shall deliver to Landlord the original policies or certified copies thereof.

(g) Each policy (other than workers’ compensation coverage) shall contain an effective waiver by the carrier against all claims for payment of insurance premiums against Landlord and Lender and shall contain a full waiver of subrogation against the Landlord and Lender.

(h) The proceeds of any insurance required under Paragraph 16(a) shall be payable as follows:

(i) proceeds payable under clauses (ii), (iii) and (iv) of Paragraph 16(a) and proceeds attributable to the general liability coverage of Builder’s Risk insurance under clause (vi) of Paragraph 16(b) shall be payable to the Person entitled to receive such proceeds; and

(ii) notwithstanding the Net Award threshold defined in Paragraph 19(a) herein or anything to the contrary contained herein, if, following a Casualty, the Leased Premises cannot be restored to substantially the same value, condition and/or character immediately prior to such casualty as a result of applicable zoning restrictions, any alterations shall be subject to the approval of Landlord and Lender in its sole discretion. Any Excess Insurance Proceeds not made available for the restoration may be retained and applied by Lender toward the payment of the Note or Mortgage (whether or not due and payable) in such order, priority and proportions as Lender in its sole discretion shall deem proper. “Excess Insurance Proceeds” means any insurance proceeds paid by any of the policies with respect to all risk and/or Law & Ordinance coverage not made available for restoration following a casualty due to the application of zoning restrictions; and

(iii) proceeds of insurance required under clause (i) of Paragraph 16(b) and proceeds attributable to Builder’s Risk insurance (other than its general liability coverage provisions) under clause (vi) of Paragraph 16(b) shall be payable to Landlord or Lender and applied as set forth in Paragraph 17 (Casualty and Condemnation) or, if applicable, Paragraph 18 (Termination Events). Tenant shall apply the Net Award to restoration of the Leased Premises in accordance with the applicable provisions of this Lease unless a Termination Event shall have occurred and Tenant has given a Termination Notice.

17. Casualty and Condemnation.

(a) In the event of any Casualty (whether or not insured against) resulting in damage to the Leased Premises or any part thereof, except as provided in Paragraph 18 below, the Term shall nevertheless continue, Tenant shall rebuild or repair the Leased Premises in accordance with this Paragraph 17 (Casualty and Condemnation), and in accordance with Legal


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Requirements, and there shall be no abatement or reduction of Rent payable by Tenant hereunder for any reason, except that, if a smaller building must be constructed to comply with applicable zoning laws, there shall be a pro rata reduction in Basic Rent based on the square footage of the Improvements before the Casualty and the maximum square footage that may be rebuilt to comply with applicable zoning laws. Tenant shall give Landlord prompt notice of the occurrence of any Casualty Landlord, Lender, and Tenant, in their discretion and upon notice to Tenant (except that Tenant shall not participate if an Event of Default has occurred and is continuing), may adjust, collect and compromise all claims under any of the insurance policies required by Paragraph 16 (Insurance) (except public liability insurance claims payable to a Person other than Tenant, Landlord or Lender) and, if an Event of Default has occurred and is continuing, to execute and deliver on behalf of Tenant all necessary proofs of loss, receipts, vouchers and releases required by the insurers. Provided that no Event of Default has occurred and is continuing, Tenant shall be entitled to participate with Landlord and Lender in any adjustment, collection and compromise of the Net Award payable in connection with a Casualty. Tenant agrees to sign, upon the reasonable request of Landlord or Lender, all such proofs of loss, receipts, vouchers and releases. If Landlord or Lender so requests, Tenant shall adjust, collect and compromise any and all such claims, and Landlord and Lender shall have the right to join with Tenant therein. Any adjustment, settlement or compromise of any such claim shall be subject to the prior written approval of Landlord and Lender, which consent shall not be unreasonably withheld, conditioned or delayed, and Landlord and Lender shall have the right to prosecute or contest, or to require Tenant to prosecute or contest, any such claim, adjustment, settlement or compromise. Each insurer is hereby authorized and directed to make payment under said policies directly to Landlord or, if required by the loan documents evidencing the Loan, to Lender instead of to Landlord and Tenant jointly, to be applied in accordance with the terms of this Lease, and Tenant hereby appoints each of Landlord and Lender as Tenant’s attorneys-in-fact to endorse any draft therefor. The rights of Landlord under this Paragraph 17(a) shall be extended to Lender if and to the extent that any Mortgage or related Loan documents so provides.

(b) Tenant shall provide Landlord prompt written notice of Tenant’s receipt of a Condemnation Notice. Landlord and Lender are authorized to collect, settle and compromise, in their discretion (and, if no Event of Default exists, upon notice to Tenant), the amount of any Net Award. Provided that no Event of Default has occurred and is continuing, Tenant shall be entitled to participate with Landlord and Lender in any Condemnation proceeding or negotiations under threat thereof and to contest the Condemnation or the amount of the Net Award therefor. No agreement with any condemnor in settlement or under threat of any Condemnation shall be made by Tenant without the written consent of Landlord and Lender, which consent shall not be unreasonably withheld, conditioned or delayed. Subject to the provisions of this Paragraph 17(b), Tenant hereby irrevocably assigns to Landlord any award or payment to which Tenant is or may be entitled by reason of any Condemnation, whether the same shall be paid or payable for Tenant’s leasehold interest hereunder or otherwise; but nothing in this Lease shall impair Tenant’s right to any separate award or payment on account of Tenant’s trade fixtures, equipment or other tangible property which is not part of the Equipment, moving expenses or loss of business or loss of leasehold interest, if available, to the extent that and so long as (i) Tenant shall have the right to make, and does make, a separate claim therefor against the condemnor and (ii) such claim does not in any way reduce either the amount of the award otherwise payable to Landlord for the Condemnation of Landlord’s fee interest in the Leased


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Premises or the amount of the award (if any) otherwise payable for the Condemnation of Tenant’s leasehold interest hereunder. The rights of Landlord under this Paragraph 17(b) shall also be extended to Lender if and to the extent that any Mortgage or related Loan documents so provides.

(c) If any Partial Casualty (whether or not insured against) or Partial Condemnation shall occur with respect to the Leased Premises, this Lease shall continue, notwithstanding such event, and there shall be no abatement or reduction of any Monetary Obligations except as specifically set forth in this Paragraph 17(c). Promptly after such Partial Casualty or Partial Condemnation, Tenant, as required in Paragraphs 12 and 13, shall commence and diligently continue to restore the Leased Premises as nearly as possible to its quality, condition and character immediately prior to such event and in accordance with Legal Requirements (assuming the Leased Premises to have been in the condition required by this Lease), except that, if a smaller building must be constructed to comply with applicable zoning laws, there shall be a pro rata reduction in Basic Rent based on the square footage of the Improvements before the Partial Casualty or Partial Condemnation, as applicable, and the maximum square footage that may be rebuilt to comply with applicable zoning laws. So long as no Event of Default exists, upon the receipt by Landlord or Lender, as applicable, of the entire Net Award of such Partial Casualty or Partial Condemnation, Landlord shall (unless such Casualty or Condemnation resulting in the Net Award is a Termination Event) make such Net Award available to Tenant for restoration in accordance with and subject to the provisions of Paragraph 19 (Restoration), and any balance shall promptly be refunded to Landlord. The rights of Landlord under this Paragraph 17(c) shall also be extended to Lender if and to the extent that any Mortgage or related Loan documents so provides.

18. Termination Events.

(a) If either (i) the entire Leased Premises shall be taken by a Taking or (ii) any substantial portion of the Leased Premises shall be taken by a Taking or all or any substantial portion of the Leased Premises shall be damaged or destroyed by a Casualty in the last two (2) years of the Term (for the purposes of this Paragraph 18(a), “substantial” shall mean 80% or more of the Improvements) and, in such case, Tenant certifies and covenants to Landlord that it will forever abandon operations at the Leased Premises (each of the events described in the above clauses (i) and (ii) shall hereinafter be referred to as a “Termination Event”), then (x) in the case of (i) above, Tenant shall be obligated, within thirty (30) days after Tenant receives a Condemnation Notice and (y) in the case of (ii) above, Tenant shall have the option, within thirty (30) days after Tenant receives a Condemnation Notice or thirty (30) days after the Casualty, as the case may be, to give to Landlord written notice in the form described in Paragraph 18(b) of the Tenant’s election to terminate this Lease (a “Termination Notice”). If Tenant elects under clause (y) above not to give Landlord a Termination Notice, then Tenant shall rebuild or repair the Leased Premises in accordance with Paragraph 17 (Casualty and Condemnation) and Paragraph 19 (Restoration).

(b) A Termination Notice shall contain notice of Tenant’s intention to terminate this Lease on the first Basic Rent Payment Date which occurs at least sixty (60) days after the Termination Notice (the "Termination Date").


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(c) This Lease shall terminate on the Termination Date. Upon such termination, (i) Tenant shall pay to Landlord all Monetary Obligations and all other obligations and liabilities under this Lease due on or prior to the Termination Date, (ii) all other obligations of Tenant under this Lease shall terminate except for any Surviving Obligations, (iii) Tenant shall immediately vacate the Leased Premises and shall have no further right, title or interest in or to any of the Leased Premises, and (iv) the Net Award shall be retained by Landlord or Lender, as applicable.

19. Restoration.

(a) If any Net Award is in excess of $500,000, Landlord (or Lender if required by any Mortgage) shall hold the entire Net Award in a fund (the “Restoration Fund”) and disburse amounts from the Restoration Fund only in accordance with the following conditions:

(i) prior to commencement of restoration, (A) the architects, contracts, contractors, plans and specifications and a budget for the restoration shall have been approved by Landlord and Lender, which approval shall not be unreasonably withheld, conditioned or delayed, (B) Landlord and Lender shall be provided by Tenant with mechanics’ lien insurance (if available), and (C) appropriate waivers of mechanics’ and materialmen’s liens shall have been filed;

(ii) at the time of any disbursement, no Event of Default shall exist and, except as permitted pursuant to Paragraph 14, no mechanics’ or materialmen’s liens shall have been filed against the Leased Premises and remain undischarged;

(iii) disbursements shall be made from time to time in an amount not exceeding the cost of the Work completed since the last disbursement, upon receipt of (A) satisfactory evidence, including architects’ certificates, of the stage of completion, the estimated total cost of completion and performance of the Work to date in a good and workmanlike manner in accordance with the contracts, plans and specifications, (B) waivers of liens, (C) contractors’ and subcontractors’ sworn statements as to completed Work and the cost thereof for which payment is requested, (D) a satisfactory bringdown of title insurance and (E) other evidence of cost and payment so that Landlord and Lender can verify that the amounts disbursed from time to time are represented by Work that is completed, in place and free and clear of mechanics’ and materialmen’s lien claims;

(iv) with respect to any legal non-conforming uses, Tenant shall commence and complete restoration within the time period set forth in the applicable Legal Requirements to permit the improvements (including, without limitation, parking areas) to be restored to the same size and for the same use (including, all legal non-conformities) existing immediately prior to the casualty or condemnation;

(v) each request for disbursement shall be accompanied by a certificate of Tenant, signed by the president or a vice president of Tenant, describing the Work for which payment is requested, stating the cost incurred in connection therewith, stating that Tenant has not previously received payment for such Work and, upon completion of the Work, also stating that the Work has been fully completed and complies with the applicable requirements of this Lease;


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(vi) if the Restoration Fund is held by Landlord, the Restoration Fund shall not be commingled with Landlord’s other funds and shall bear interest at a rate agreed to by Landlord and Tenant; and

(vii) such other reasonable conditions as Landlord or Lender may impose.

(b) Prior to commencement of restoration and at any time during restoration, if the estimated cost of completing the restoration Work free and clear of all liens, as reasonably determined by Landlord, exceeds the amount of the Net Award available for such restoration, the amount of such excess shall, upon demand by Landlord, be funded by Tenant prior to any disbursement from the Restoration Fund held by Landlord or Lender.

(c) If any sum remains in the Restoration Fund after completion of the restoration and any refund to Tenant pursuant to Paragraph 19(b), such sum shall be retained by Landlord or, if required by a Note, Mortgage or other documents executed by Landlord in connection with the Loan, paid by Landlord to a Lender.

20. Assignment and Subletting.

(a) Except as otherwise expressly provided to the contrary in this Paragraph 20, Tenant may not enter into any sublease or assign this Lease, voluntarily or involuntarily, whether by operation of law or otherwise (including through merger, sale of stock or consolidation) to any Person without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that Landlord’s prior written consent shall not be required for any assignment by Tenant of this Lease or subleasing of the Leased Premises to an Affiliate of Tenant so long as no Event of Default has occurred and the provisions of this Paragraph 20 are satisfied. Any purported sublease or assignment in violation of this Paragraph 20 shall be null and void.

(b) Any sublease of the Leased Premises shall (i) be expressly subject and subordinate to this Lease and any Mortgage encumbering the Leased Premises; (ii) not extend beyond the then current Term minus one day; (iii) terminate upon any termination of this Lease, unless Landlord elects in writing, to cause the sublessee to attorn to and recognize Landlord as the lessor under such sublease, whereupon such sublease shall continue as a direct lease between the sublessee and Landlord upon all the terms and conditions of such sublease; and (iv) bind the sublessee to all covenants contained in Paragraph 4(a) (Use of Leased Premises), Paragraph 10 (Compliance with Laws) and Paragraph 12 (Maintenance and Repair) with respect to subleased premises to the same extent as if the sublessee were Tenant.

(c) If Tenant assigns all its rights and interest under this Lease, the assignee under such assignment shall expressly assume all the obligations of Tenant hereunder, actual or contingent, including obligations of Tenant which may have arisen on or prior to the date of such assignment, by a written instrument delivered to Landlord at the time of such assignment. No assignment or sublease shall affect or reduce any of the obligations of Tenant or Guarantor hereunder, and all such obligations of Tenant shall continue in full force and effect as obligations of a principal and not as obligations of a guarantor, as if no assignment or sublease had been made, except in the case of a replacement guarantor that is acceptable to Landlord, satisfies Landlord’s credit conditions and financial strength requirements, and assumes all obligations of


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Guarantor under the Lease and Guaranty, in which case Tenant and Guarantor shall be released from all obligations under the Lease and Guaranty. No assignment or sublease shall impose any additional obligations on Landlord under this Lease.

(d) As security for performance of its obligations under this Lease, Tenant hereby grants, conveys and assigns to Landlord all right, title and interest of Tenant in and to all subleases now in existence or hereafter entered into for any or all of the Leased Premises, any and all extensions, modifications and renewals thereof and all rents, issues and profits therefrom. Landlord hereby grants to Tenant a license to collect and enjoy all rents and other sums of money payable under any sublease of any of the Leased Premises; provided, however, that Landlord shall have the absolute right at any time upon notice to Tenant and any subtenants to revoke said license and to collect such rents and sums of money and to retain the same. Any amounts collected shall be applied to Rent payments next due and owing. Tenant shall not consent to, cause or allow any modification or alteration of any of the terms, conditions or covenants of any of the subleases or the termination thereof, without the prior written approval of Landlord which consent shall not be unreasonably withheld nor shall Tenant accept any rents more than thirty (30) days in advance of the accrual thereof.

(e) Notwithstanding any provision in this Paragraph 20 or elsewhere in this Lease to the contrary, including any right or option Tenant may have to assign this Lease without Landlord’s consent, Tenant shall, upon the request of Landlord, provide and cause such assignee or sublessee to provide, such information (including, without limitation, any certification) as to any proposed assignee or sublessee and its principals, members, officers and/or directors as may be required for Landlord and Tenant to comply with regulations administered by the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury, codified at 31 C.F.R. Part 500 (including those named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action regarding persons or entities with whom U.S. persons or entities are restricted from doing business (including persons or entities who have violated the U.S. Foreign Corrupt Practices Act 15 U.S.C. §§78dd-1, 78dd-2 and 78dd-3).

(f) Tenant shall, within ten (10) days after the execution and delivery of any assignment or sublease, deliver a duplicate original copy thereof to Landlord which, in the event of an assignment, shall be in recordable form.

(g) Tenant shall not consent to, cause or allow any modification or alteration of any of the terms, conditions or covenants of any sublease or the termination thereof, without the prior written approval of Landlord which consent shall not be unreasonably withheld, conditioned or delayed nor shall Tenant accept any rents more than thirty (30) days in advance of the accrual thereof nor permit anything to be done, the doing of which, nor omit or refrain from doing anything, the omission of which, will or could be a breach of or default in the terms of any of the subleases.

(h) Except as expressly provided in Paragraph 33 (Permitted Leasehold Mortgage), Tenant shall not have the power to mortgage, pledge or otherwise encumber its interest under


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this Lease or any sublease of the Leased Premises, and any such mortgage, pledge or encumbrance made in violation of this Paragraph 20 shall be void and of no force and effect.

(i) At no time during the Term shall any Person or “group” (within the meaning of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended) pursuant to a single transaction or series of transactions (i) acquire, directly or indirectly, more than 50% of the voting stock, partnership interests, membership interests or other equitable and/or beneficial interests of Tenant (“Control”) or (ii) obtain, directly or indirectly, the power (whether or not exercised) to elect a majority of the directors of Tenant or voting control of any partnership or limited liability company or other entity acting as its general partner or managing member (including through a merger or consolidation of Tenant with or into any other Person). Any such change of Control or voting power (by operation of law, merger, consolidation or otherwise) shall be deemed an assignment of this Lease and the approval of Landlord and Lender shall be required as set forth in Paragraph 20 above and any consummation of such assignment absent such approval shall be in violation of this Lease.

(j) Landlord may sell or transfer the Leased Premises at any time, without Tenant’s consent, to any third party (each a “Third Party Purchaser”). In the event of any such transfer, Tenant shall attorn to any Third Party Purchaser as Landlord so long as such Third Party Purchaser and Landlord notify Tenant in writing of such transfer. At the request of Landlord, Tenant will execute such documents confirming the agreement referred to above and such other agreements as Landlord may reasonably request, provided that such agreements do not increase the liabilities and obligations of Tenant hereunder.

21. Events of Default.

(a) The occurrence of any one or more of the following (after expiration of any applicable cure period as provided in this Paragraph 21(a)) shall constitute an “Event of Default” under this Lease:

(i) a failure by Tenant to pay any Monetary Obligation within three (3) Business Days after when due, regardless of the reason for such failure, subject to the last sentence of Paragraph 8(b); provided, however, that no Event of Default shall exist with respect to the first occurrence (but shall be an Event of Default with respect to any subsequent occurrences) during any twelve (12)-month period in which Tenant fails to make payment when due, until five (5) days after Landlord delivers written notice of such delinquency; provided further, Landlord shall provide written or oral notice to Tenant and Guarantor of any failure during the first Lease Year and if such Monetary Obligation is not paid within two (2) days after such notice an Event of Default shall have occurred; it being acknowledged that an e-mail or a phone call to an officer of Tenant and Guarantor shall be sufficient notice under this Paragraph 21(a)(i);

(ii) a failure by Tenant duly to perform and observe, or a violation or breach of, any other provision of this Lease not otherwise specifically mentioned in this Paragraph 21(a), which default continues beyond the date that is thirty (30) days from the date on which Tenant receives notice of such default or, if such default cannot be cured within such thirty (30) day period and delay in the exercise of a remedy would not (in Landlord’s reasonable judgment)


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cause a material adverse harm to Landlord or to the Leased Premises, the cure period shall be extended for the reasonable period required to cure such default so long as Tenant shall commence to cure such default within said thirty (30) day period and shall actively and diligently and in good faith proceed with and continue the curing of such default until it shall be fully cured; provided that such extended period shall not exceed ninety (90) days;

(iii) Tenant shall have abandoned the Leased Premises;

(iv) Tenant shall (A) voluntarily be adjudicated a bankrupt or insolvent, (B) seek or consent to the appointment of a receiver or trustee for itself or for the Leased Premises, (C) file a petition seeking relief under the bankruptcy or other similar laws of the United States, any state or any jurisdiction, (D) make a general assignment for the benefit of creditors, or (E) be unable to pay its debts as they mature;

(v) a court shall enter an order, judgment or decree appointing, without the consent of Tenant, a receiver or trustee for Tenant or for the Leased Premises or approving a petition filed against Tenant which seeks relief under the bankruptcy or other similar laws of the United States, any state or any jurisdiction, and such order, judgment or decree shall remain undischarged or unstayed one hundred and twenty (120) days after it is entered;

(vi) Tenant shall be liquidated or dissolved or shall begin proceedings towards its liquidation or dissolution;

(vii) the estate or interest of Tenant in the Leased Premises shall be levied upon or attached in any proceeding and such estate or interest is about to be sold or transferred or such process shall not be vacated or discharged within one hundred and twenty (120) days after it is made;

(viii) any representation or warranty made by Tenant herein or in any certificate, demand or request made pursuant hereto proves to be incorrect in any material respect;

(ix) Tenant shall fail to comply in any material respect with the requirements of Paragraph 16 (Insurance) after any applicable notice or cure period;

(x) Tenant shall enter into a transaction or series of transactions in violation in any material respect of Paragraph 20 (Assignment and Subletting);

(xi) Tenant shall fail to perform or observe, or shall violate or breach, or shall make a misrepresentation under, any document between Tenant and Lender or from Tenant to Lender, if such failure, violation, breach or misrepresentation gives rise to a default beyond any applicable notice and cure period with respect to any Loan; or

(xii) a monetary default or material non-monetary default beyond any applicable grace or cure period occurs under any other lease agreement between Tenant and Landlord or Landlord’s affiliate.

22. Remedies and Damages Upon Default.


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(a) If an Event of Default shall have occurred and be continuing beyond the expiration of any applicable notice and/or cure period, then Landlord shall have the right, at its sole option, then so long as such Event of Default is continuing, to exercise its remedies and to collect damages from Tenant in accordance with this Paragraph 22 without further demand upon or notice to Tenant, except as otherwise expressly provided below in this Paragraph 22 and, subject in all events, to any conditions and limitations (including any additional notice requirements) of applicable Law.

(i) Landlord may terminate this Lease by giving Tenant written notice thereof; such termination to be effective as of the date specified in such notice unless a longer notice period is prescribed by applicable Law (in which event, such longer period shall deemed set forth in such notice and shall control). Upon such date, this Lease, the estate hereby granted and all rights of Tenant hereunder shall expire and terminate and Tenant shall immediately surrender and deliver possession of the Leased Premises to Landlord in accordance with and in the condition required by Paragraph 25 (Surrender) hereof. If Tenant does not so surrender and deliver possession of all of the Leased Premises, Landlord may re-enter and repossess any of the Leased Premises not surrendered, by any available legal process, by peaceably entering any of the Leased Premises and changing locks or by summary proceedings, ejectment or any other lawful means or procedure.

(ii) Landlord may terminate Tenant’s right of possession (but not this Lease) and may repossess the Leased Premises by any available legal process without thereby releasing Tenant from any liability hereunder and without demand or notice of any kind to Tenant and without terminating this Lease.

(iii) Upon or at any time after taking possession of any of the Leased Premises pursuant to Paragraph 22(a)(i) or Paragraph 22(a)(ii), Landlord may, by peaceable means or legal process, remove any Persons or property therefrom. Landlord shall be under no liability for or by reason of any such entry, repossession or removal. Notwithstanding such entry or repossession, Landlord may collect the damages set forth in Paragraph 22(b)(i) and Paragraph 22(b)(ii).

(iv) After repossession of any of the Leased Premises pursuant to clause (i) or (ii) above, Landlord shall have the right to relet any of the Leased Premises to such tenant or tenants, for such term or terms, for such rent, on such conditions and for such uses as Landlord in its sole discretion may determine, and collect and receive any rents payable by reason of such reletting. Landlord may make such Alterations in connection with such reletting as it may deem advisable in its sole discretion. Notwithstanding any such reletting, Landlord may collect the damages set forth in Paragraph 22(b)(ii).

(b) The following constitute damages to which Landlord shall be entitled if Landlord exercises its remedies under Paragraph 22(a)(i), (ii) and (iii):

(i) If Landlord exercises its remedy under Paragraphs 22(a)(i) or (ii) but not its remedy under Paragraph 22(a)(iv) (or attempts to exercise such remedy and is unsuccessful in reletting the Leased Premises) then, upon written demand from Landlord, Tenant shall pay to Landlord, as liquidated and agreed final damages for Tenant’s default and in lieu of all current


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damages beyond the date of such demand (it being agreed that it would be impracticable or extremely difficult to fix the actual damages), an amount equal to the Present Value of the excess, if any, of (A) all Basic Rent from the date of such demand to the date on which the Term is scheduled to expire hereunder in the absence of any earlier termination, re-entry or repossession over (B) the then fair market rental value of the Leased Premises for the same period. Tenant shall also pay to Landlord all accrued Rent then due and unpaid, all other Monetary Obligations which are then due and unpaid, all Monetary Obligations which arise or become due by reason of such Event of Default, including any Costs of Landlord in connection with the repossession of the Leased Premises and any attempted reletting thereof, including all brokerage commissions, legal expenses, reasonable attorneys’ fees, costs of Alterations and expenses and preparation for reletting.

(ii) If Landlord exercises its remedy or remedies under Paragraphs 22(a)(i), (ii), (iii) or (iv), then Tenant shall, until the end of what would have been the Term in the absence of the termination of the Lease, and whether or not any of the Leased Premises shall have been relet, be liable to Landlord for, and shall pay to Landlord, as liquidated and agreed current damages all Monetary Obligations which would be payable under this Lease by Tenant in the absence of such termination less the net proceeds, if any, of any reletting pursuant to Paragraph 22(a)(iv), after deducting from such proceeds all of Landlord’s Costs (including the items listed in the last sentence of Paragraph 22(b)(i) hereof) incurred in connection with such repossessing and reletting; provided, that if Landlord has not relet the Leased Premises, such Costs of Landlord shall be considered to be Monetary Obligations payable by Tenant.

(iii) Tenant shall be and remain liable for all sums aforesaid, and Landlord may recover such damages from Tenant and institute and maintain successive actions or legal proceedings against Tenant for the recovery of such damages. Nothing herein contained shall be deemed to require Landlord to wait to begin such action or other legal proceedings until the date when the Term would have expired by its own terms had there been no such Event of Default.

(c) Notwithstanding anything to the contrary herein contained, in lieu of or in addition to any of the foregoing remedies and damages, Landlord may exercise any remedies and collect any damages available to it at law or in equity. If Landlord is unable to obtain full satisfaction pursuant to the exercise of any remedy, it may pursue any other remedy which it has hereunder or at law or in equity.

(d) Landlord shall use good faith efforts to mitigate any of its damages hereunder to the extent required by Law. If any Law shall validly limit the amount of any damages provided for herein to an amount which is less than the amount agreed to herein, Landlord shall be entitled to the maximum amount available under such Law.

(e) No termination of this Lease, repossession or reletting of the Leased Premises, exercise of any remedy or collection of any damages pursuant to this Paragraph 22 shall relieve Tenant of any Surviving Obligations.

(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD OR TENANT HEREUNDER, LANDLORD AND TENANT HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY.


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(g) If any Event of Default exists, Landlord shall have the right (but no obligation) to perform any act required of Tenant hereunder and, if performance of such act requires that Landlord enter the Leased Premises, Landlord may enter the Leased Premises for such purpose.

(h) No failure of Landlord (i) to insist at any time upon the strict performance of any provision of this Lease or (ii) to exercise any option, right, power or remedy contained in this Lease shall be construed as a waiver, modification or relinquishment thereof. A receipt by Landlord of any sum in satisfaction of any Monetary Obligation with knowledge of the breach of any provision hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision hereof shall be deemed to have been made unless expressed in a writing signed by Landlord.

(i) Tenant hereby waives and surrenders, for itself and all those claiming under it, including creditors of all kinds, (i) any right and privilege which it or any of them may have under any present or future Law to redeem any of the Leased Premises or to have a continuance of this Lease after termination of this Lease or of Tenant’s right of occupancy or possession pursuant to any court order or any provision hereof, and (ii) the benefits of any present or future Law which exempts property from liability for debt or for distress for rent.

(j) Except as otherwise provided herein, all remedies are cumulative and concurrent and no remedy is exclusive of any other remedy. Each remedy may be exercised at any time an Event of Default has occurred and is continuing and may be exercised from time to time, except to the extent multiple remedies for an Event of Default would make Landlord more than whole. No remedy shall be exhausted by any exercise thereof.

23. Notices.

All notices, demands, requests, consents, approvals, offers, statements and other instruments or communications required or permitted to be given pursuant to the provisions of this Lease shall be in writing and shall be deemed to have been given and received for all purposes (i) when delivered in person or (ii) one (1) Business Day after deposit with Federal Express or other reliable 24-hour delivery service, addressed to the other party at the address set forth below. Notices sent to Landlord shall be to the attention of Joshua R. Leventhal, Esq., c/o LCN Capital Partners, 888 Seventh Avenue, New York, New York 10019 and with a copy to the attention of Alyson Van Dyk, c/o Dorsey & Whitney, LLP, 50 South Sixth Street, Suite 1500, Minneapolis, Minnesota 55402.

Notices sent to Tenant shall be to the attention of Jeff Love, Love's Furniture, c/o U.S. Assets, Inc., 1601 Elm Street, Suite 4210, Dallas, Texas 75201, with a copy to Sara Toner, Esq., c/o Richards Layton & Finger, P.A., One Rodney Square, 920 North King Street, Wilmington, Delaware 19801 and to Matthew Damiani, Loves Furniture, CEO, at 32301 Woodward Avenue, Royal Oak, Michigan 48073, and to Guarantor at 1601 Elm Street, Suite 4210, Dallas Texas 75201.

For the purposes of this Paragraph 23, any party may substitute another address stated above (or substituted by a previous notice) for its address by giving ten (10) days’ notice of the new address to the other party, in the manner provided above.


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24. Estoppel Certificate.

At any time upon not less than ten (10) days’ prior written request by either Landlord or Tenant (the “Requesting Party”) to the other party (the “Responding Party”), the Responding Party shall deliver to the Requesting Party a statement in writing, executed by an authorized officer of the Responding Party, certifying (a) that, except as otherwise specified, this Lease is unmodified and in full force and effect, (b) the dates to which Basic Rent, Additional Rent and all other Monetary Obligations have been paid, (c) that, to the knowledge of the signer of such certificate and except as otherwise specified, no default by either Landlord or Tenant exists hereunder, (d) such other matters as the Requesting Party may reasonably request, and (e) if Tenant is the Responding Party that, except as otherwise specified, there are no proceedings pending or, to the knowledge of the signer, threatened, against Tenant before or by a court or administrative agency which, if adversely decided, would materially and adversely affect the financial condition and operations of Tenant. Any such statements by the Responding Party may be relied upon by the Requesting Party, any Person whom the Requesting Party notifies the Responding Party in its request for the certificate is an intended recipient or beneficiary of the certificate, any Lender or their assignees and by any prospective purchaser or mortgagee of any of the Leased Premises. Any certificate required under this Paragraph 24 and delivered by Tenant shall state that, in the opinion of each person signing the same, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to the subject matter of such certificate and shall briefly state the nature of such examination or investigation.

25. Surrender.

(a) Upon the expiration or earlier termination of this Lease, Tenant shall peaceably leave and surrender the Leased Premises to Landlord in the same condition in which the Leased Premises were at the commencement of this Lease, except as repaired, rebuilt, restored, altered, replaced or added to as permitted or required by any provision of this Lease, ordinary wear and tear excepted. Upon such surrender, Tenant shall (a) remove from the Leased Premises all property which is owned by Tenant or any person occupying any portion of the Leased Premises by, through or under Tenant (including, without limitation, all computer and communications cabling, wiring and conduit not necessary for the operation of the base building systems of the Improvements, such as electrical, elevator, HVAC, life safety and/or security systems) other than Landlord and Alterations required to be removed pursuant to Paragraph 13 (Alterations and Improvements) hereof and (b) repair any damage caused by such removal. Property not so removed shall become the property of Landlord, and Landlord may thereafter cause such property to be removed from the Leased Premises. The reasonable cost of removing and disposing of such property and repairing any damage to the Leased Premises caused by such removal shall be paid by Tenant to Landlord upon demand. Landlord shall not in any manner or to any extent be obligated to reimburse Tenant for any such property which becomes the property of Landlord pursuant to this Paragraph 25.

(b) If Tenant fails to peaceably leave and surrender the Leased Premises to Landlord in accordance with the provisions of Paragraph 25(a) Tenant shall pay to Landlord holdover rent (“Holdover Rent”) and Additional Rent payable hereunder for the Leased Premises prior to the Expiration Date or earlier termination of the Lease during the term of such holdover. Holdover


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Rent shall be payable monthly in advance in an amount equal to 150% of Basic Rent payable immediately prior to the Expiration Date or such early termination until Tenant shall have left and surrender the Leased Premises to Landlord in accordance with the provisions of Paragraph 25(a). The provisions of this Paragraph 25 shall not in any way be deemed to (i) permit Tenant to remain in possession of the Leased Premises after the Expiration Date or sooner termination of this Lease or (ii) imply any right of Tenant to use or occupy the Leased Premises upon expiration or termination of this Lease and the Term, and no acceptance by Landlord of payments from Tenant after the Expiration Date or sooner termination of the Term shall be deemed to be other than on account of the amount to be paid by Tenant in accordance with the provisions of this Paragraph 25. Landlord waives no rights against Tenant by reason of accepting any holding over by Tenant, including without limitation the right to terminate such month-to-month tenancy as provided by law at any time after the expiration of the Term. Tenant’s obligations under this Paragraph 25 shall survive the expiration or earlier termination of this Lease.

26. No Merger of Title.

There shall be no merger of the leasehold estate created by this Lease with the fee estate in the Leased Premises by reason of the fact that the same Person may acquire or hold or own, directly or indirectly, (a) the leasehold estate created hereby or any part thereof or interest therein and (b) the fee estate in the Leased Premises or any part thereof or interest therein, unless and until all Persons having any interest in the interests described in (a) and (b) above which are sought to be merged shall join in a written instrument effecting such merger and shall duly record the same.

27. Books and Records.

(a) Tenant shall keep adequate records and books of account with respect to the finances and business of Tenant generally in accordance with generally accepted accounting principles (“GAAP”) consistently applied, and shall permit Landlord and Lender by their respective agents, accountants and attorneys, upon reasonable notice to Tenant, to visit and inspect the Leased Premises and examine (and make copies of) the records and books of account in connection with the Leased Premises and Tenant’s financial statements delivered pursuant to Paragraph 27(b), and to discuss the finances and business with the officers of Tenant and to request additional reasonable documentation, at such reasonable times as may be requested by Landlord or Lender. Upon the request of Lender or Landlord (either telephonically or in writing), Tenant shall provide the requesting party with copies of any information to which such party would be entitled in the course of a personal visit. In any such case, Landlord and or Lender shall in all respects keep Tenant's records and books of account confidential.

(b) Tenant shall deliver to Landlord and to Lender within one hundred and twenty (120) days of the close of each fiscal year, annual audited financial statements of Tenant or Guarantor prepared by nationally recognized independent certified public accountants or other accountants reasonably acceptable to Landlord and Lender. Tenant shall also furnish to Landlord within ninety (90) days after the end of each of the three remaining quarters (but in the case of the first two fiscal quarters after the Effective Date, within ninety (90) days) unaudited financial statements and all other quarterly reports of Tenant or Guarantor, certified by Tenant’s or Guarantor’s chief financial officer, and all filings, if any, of Form 10-K, Form 10-Q and other


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required filings with the Securities and Exchange Commission pursuant to the provisions of the Securities Exchange Act of 1934, as amended, or any other Law; provided, however, that if the equity of Tenant is or becomes publicly traded, or Tenant’s credit facility provides for periods of time shorter than those set forth above, then Tenant shall provide such financials within such shorter periods of time (if Tenant completes any such reports earlier than the periods of time required above, Tenant shall deliver such reports to Landlord within five (5) business days after completion thereof). In addition, within forty-five (45) days after the end of Tenant’s first three fiscal quarters, Tenant shall deliver to Landlord and Lender an income statement for the Leased Premises for the immediately preceding fiscal quarter (presented on a monthly basis) and, within ninety (90) days after the end of each fiscal year, Tenant shall deliver to Landlord Tenant’s detailed profit and loss statements for the Leased Premises, which statements must be certified by Tenant’s chief financial officer as accurate and complete. The financial statements of Tenant or Guarantor, as applicable, delivered in accordance with the first two grammatical sentences of this Paragraph 27(b) shall be prepared in accordance with GAAP consistently applied, except any income statements and profit and loss statements for the Leased Premises. All annual financial statements shall be accompanied (i) by an opinion of said accounting firm stating that (A) there are no qualifications as to the scope of the audit (but that may contain a “going concern” statement that is due to the impending maturity of any indebtedness or any prospective or actual default of any financial covenant under this Lease and/or the Guarantor’s or the Tenant’s term loan facility, revolving facility or other indebtedness) and (B) the audit was performed in accordance with GAAP and (ii) by the affidavit of the president or a vice president of Tenant, dated within five (5) days of the delivery of such statement, stating that (C) the affiant knows of no Event of Default, or event which, upon notice or the passage of time or both, would become an Event of Default which has occurred and is continuing hereunder or, if any such event has occurred and is continuing, specifying the nature and period of existence thereof and what action Tenant has taken or proposes to take with respect thereto and (D) except as otherwise specified in such affidavit, that Tenant has fulfilled all of its obligations under this Lease which are required to be fulfilled on or prior to the date of such affidavit.

(c) Notwithstanding any provision to the contrary in this Paragraph 27, in lieu of delivering the financial statements of Tenant required under this Paragraph 27, if Guarantor is providing its financial information as required by the Guaranty, then Guarantor may consolidate Tenant’s financial statements with those provided by Guarantor under the Guaranty.

28. Tenant and Guarantor Structure. Tenant represents that the information set forth on Exhibit G attached hereto accurately describes the relationship between Tenant and Guarantor. Tenant shall promptly inform Landlord in writing of all changes, if any, to the information presented on Exhibit G.

29. Non-Recourse as to Landlord.

Anything contained herein to the contrary notwithstanding, any claim based on or in respect of any liability of Landlord under this Lease shall be limited to actual damages and shall be enforced only against the Leased Premises and not against any other assets, properties or funds of (a) Landlord, (b) any director, member, officer, general partner, limited partner, beneficiary, shareholder, employee or agent of Landlord (or any legal representative, heir, estate, successor or assign of any thereof), (c) any predecessor or successor partnership, corporation, limited liability company (or other entity) of Landlord, or any of its general partners, members,


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shareholders, officers, directors, employees or agents or any predecessor or successor partnership or corporation (or other entity) or (d) any Person affiliated with any of the foregoing, or any director, officer, employee or agent of any thereof.

30. Financing.

If Landlord desires to obtain or refinance any Loan, Tenant shall negotiate in good faith with Landlord concerning any reasonable request made by any Lender or proposed Lender for changes or modifications in this Lease, including, without limitation, cross-default provisions with respect to other Tenant leases of properties provided by Landlord as security for such Loan. In particular, Tenant shall agree, upon request of Landlord, to supply, within ten (10) days after a written request from Landlord, any such Lender with such notices and information as Tenant is required to give to Landlord hereunder and to extend the rights of Landlord hereunder to any such Lender and to consent to such financing if such consent is requested by such Lender. Tenant shall provide any other consent or statement and shall execute any and all other documents that such Lender reasonably requires in connection with such financing, including any subordination, non-disturbance and attornment agreement, so long as the same do not materially adversely affect any right, benefit or privilege of Tenant under this Lease or materially increase Tenant’s obligations under this Lease. Such subordination, nondisturbance and attornment agreement may require Tenant to confirm that (a) Lender and its assigns will not be liable for any misrepresentation, act or omission of Landlord and (b) Lender and its assigns will not be subject to any counterclaim, demand or offset which Tenant may have against Landlord.

31. Subordination, Non-Disturbance and Attornment.

This Lease and Tenant’s interest hereunder shall be subordinate to any Mortgage or other security instrument now or hereafter placed upon the Leased Premises by Landlord, and to any and all advances made or to be made thereunder, to the interest thereon, and all renewals, replacements and extensions thereof; provided that any such Mortgage or other security instrument (or a separate instrument in recordable form duly executed by the holder of any such Mortgage or other security instrument and delivered to Tenant) shall provide for the recognition of this Lease and all Tenant’s rights hereunder unless and until an Event of Default exists or Landlord shall have the right to terminate this Lease pursuant to any applicable provision hereof.

32. Tax Treatment; Reporting.

Landlord and Tenant each acknowledge that each shall treat this transaction as a true lease for state law purposes and shall report this transaction as a Lease for Federal income tax purposes. For Federal income tax purposes each shall report this Lease as a true lease with Landlord as the owner of the Leased Premises and Equipment and Tenant as the lessee of the Leased Premises and Equipment including: (i) treating Landlord as the owner of the property eligible to claim depreciation deductions under Section 167 or 168 of the Internal Revenue Code of 1986 (the “Code”) with respect to the Leased Premises and Equipment, (ii) Tenant reporting its Rent payments as rent expense under Section 162 of the Code, and (iii) Landlord reporting the Rent payments as rental income. For the avoidance of doubt, nothing in this Lease shall be deemed to constitute a guaranty, warranty or representation by either Landlord or Tenant as to the actual treatment of this transaction for state law purposes and for Federal law purposes.


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33. Permitted Leasehold Mortgage.

Tenant shall not encumber its leasehold estate in the Leased Premises, by means of a leasehold mortgage, deed of trust pledge or similar security device, except by means of a Permitted Leasehold Mortgage. The Leased Premises shall not be encumbered by more than one Permitted Leasehold Mortgage at any one time. Tenant shall deliver to Landlord an executed counterpart of any Permitted Leasehold Mortgage within ten (10) days after its execution thereof. Any leasehold mortgagee shall be deemed to be a third party beneficiary of any subordination, non-disturbance and attornment agreement (or similar agreement) granted to Tenant hereunder. Landlord agrees that, at the request of Tenant and the mortgagee under the leasehold mortgages, Landlord will enter into a commercially reasonable agreement with the mortgagee pursuant to which Landlord (x) will afford such mortgagee the opportunity to cure any Event of Default by Tenant during the applicable cure period provided to Tenant under this Lease, and (y) will agree that, in the event this Lease is terminated or rejected, Landlord will enter into a replacement lease with such mortgagee (or the party acquiring Tenant’s interest under this Lease by foreclosure or deed in lieu of foreclosure or similar conveyance) in the form of this Lease.

34. REIT Qualifications.

Landlord and Tenant agree that all Rent paid to Landlord under this Lease shall qualify as “rents from real property” as defined in Internal Revenue Code Section 856(d) and as further defined in Treasury Regulation Section 1.856-4, as each is amended from time to time. Should the requirements of the said Internal Revenue Code Section or Treasury Regulation Section be amended so that any rent no longer qualifies as “rents from real property” for the purpose of the Internal Revenue Code or the Treasury Regulation, the Rent payable to Landlord may be adjusted upon Landlord’s written notice to Tenant so that such Rent will qualify as “rents from real property” under the Internal Revenue Code and Treasury Regulation; provided that any adjustment or modification pursuant to this Paragraph 34 shall be structured so that the economic results to Landlord and Tenant shall be substantially similar to those set forth in this Lease without regard to such adjustment or modification. If any adjustment of Rent under this Paragraph 34, or if Landlord in good faith determines that its status as a real estate investment trust under the provisions of the Internal Revenue Code or the Treasury Regulation may be jeopardized because of any provision this Lease, Tenant shall, without charge therefor and within ten (10) days after Landlord’s written request therefor, execute and deliver to Landlord such amendments to this Lease as may be reasonably required by Landlord to avoid such jeopardy; provided such amendments do not increase the monetary obligations of Tenant or in any other manner materially increase Tenant’s obligations or materially decrease Tenant’s rights under this Lease. Without limiting any of Landlord’s other rights under this Paragraph 34, Landlord may waive the receipt of any amount payable to Landlord hereunder and such waiver shall constitute an amendment or modification of this Lease with respect to such payment. Tenant expressly covenants and agrees not to enter into any sublease or assignment which provides for rental or other payment for such use, occupancy, or utilization based in whole or in part on the net income or profits derived by any person from the property leased, used, occupied, or utilized (other than an amount based on a fixed percentage or percentages of receipts or sales), and that any such purported sublease or assignment shall be absolutely void and ineffective as a conveyance of any right or interest in the possession, use, occupancy, or utilization of any part of the Leased Premises.


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35. Lease Guaranty.

(a) In the event the Guaranty is terminated in accordance with Section 3(b) thereof, the terms of this Paragraph 35 shall apply.

(b) If at any time an Event of Default shall have occurred, Landlord shall be entitled, at its sole discretion, to draw on the Letter of Credit and to apply the proceeds in payment of (i) any Rent or other charges for the payment of which Tenant shall be in default, (ii) prepaid Basic Rent, (iii) any expense incurred by Landlord in curing any default of Tenant, and/or (iv) any other sums due to Landlord in connection with any default or the curing thereof, including, without limitation, any damages incurred by Landlord by reason of such default, including any rights of Landlord under Paragraph 22, all in such order or priority as Landlord shall so determine in its sole discretion and Tenant acknowledges and agrees that such proceeds shall not constitute assets or funds of Tenant or its estate, or be deemed to be held in trust for Tenant, but shall be, for all purposes, the property of Landlord (or Lender, to the extent assigned). Tenant further acknowledges and agrees that (1) Landlord’s application of the proceeds of the Letter of Credit towards the payment of Basic Rent, Additional Rent or the reduction of any damages due Landlord in accordance with Paragraph 22 of this Lease, constitutes a fair and reasonable use of such proceeds, and (2) the application of such proceeds by Landlord towards the payment of Basic Rent, Additional Rent or any other sums due under this Lease shall not constitute a cure by Tenant of the applicable default provided that an Event of Default shall not exist if Tenant restores the Letter of Credit to its full amount within five (5) days and in accordance with the requirements of Section 3(b) of the Guaranty, which Section 3(b) is hereby incorporated herein by reference, so that the required amount of the Letter of Credit shall be again on deposit with Landlord.

(c) Landlord shall have the right to designate (i) Lender or any other holder of a Mortgage (or any of their respective successors or assigns) and/or (ii) any purchaser of the Leased Premises as the assignee of this Lease, as the beneficiary of the Letter of Credit during the term of the applicable Loan, and such Lender or other holder of a Mortgage and/or such purchaser shall have all of the rights of Landlord under this Paragraph 35. Tenant covenants and agrees to execute such agreements, consents and acknowledgments as may be requested by Landlord from time to time to change the holder of the Letter of Credit as hereinabove provided.

(d) The Letter of Credit shall provide that the expiration date of such Letter of Credit shall automatically extend (i.e., without requiring a consent, approval, amendment or other modification) for additional periods from the current or each future expiration date unless the issuing bank provides Landlord with written notice that such Letter of Credit will not be renewed at least thirty (30) days, and not more than ninety (90) days, prior to the date on which the outstanding Letter of Credit is scheduled to expire. Landlord shall have the right immediately to draw down any Letter of Credit in full (i) if at any time the bank issuing any such Letter of Credit shall cease to be an Eligible Institution, (ii) if Landlord or Lender has received a notice from the issuing bank that the Letter of Credit will not be renewed and a substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire, (iii) upon receipt of notice from the issuing bank that the Letter of Credit will be terminated (except if the termination of such Letter of Credit is permitted pursuant to the terms and conditions of this Lease or a substitute Letter of Credit is provided prior to such termination), or (iv) during the continuance of an Event of Default. Notwithstanding anything to the contrary contained herein, Landlord is not obligated to draw on the Letter of Credit upon the happening of any of the foregoing events and shall not be liable for any losses sustained by Tenant or Guarantor due to the insolvency of the bank issuing the Letter of Credit if Landlord has not drawn the Letter of Credit.


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36. Miscellaneous.

(a) The Paragraph headings in this Lease are used only for convenience in finding the subject matters and are not part of this Lease or to be used in determining the intent of the parties or otherwise interpreting this Lease.

(b) As used in this Lease, the singular shall include the plural and any gender shall include all genders as the context requires and the following words and phrases shall have the following meanings: (i) “including” means “including without limitation”; (ii) “provisions” means “provisions, terms, agreements, covenants and/or conditions”; (iii) “lien” means “lien, charge, encumbrance, title retention agreement, pledge, security interest, mortgage and/or deed of trust”; (iv) “obligation” means “obligation, duty, agreement, liability, covenant and/or condition”; (v) “the Leased Premises” means “the Leased Premises or any part thereof or interest therein”; (vi) intentionally deleted; (vi) “any of the Land” means “the Land or any part thereof or interest therein”; (vii) “any of the Improvements” means “the Improvements or any part thereof or interest therein”; (viii) “any of the Equipment” means “the Equipment or any part thereof or interest therein”; and (ix) “any of the Adjoining Property” means “the Adjoining Property or any part thereof or interest therein”.

(c) Any act which Landlord is permitted to perform under this Lease may be performed at any time and from time to time by Landlord or any person or entity designated by Landlord. Each appointment of Landlord as attorney-in-fact for Tenant hereunder is irrevocable and coupled with an interest.

(d) Landlord shall not unreasonably withhold or delay its consent whenever such consent is required under this Lease, except as otherwise specifically provided herein. If with respect to any required consent or approval Landlord is required by the express provisions of this Lease not to unreasonably withhold or delay its consent or approval, and if it is determined in any such proceeding referred to in the preceding sentence that Landlord acted unreasonably, the requested consent or approval shall be deemed to have been granted. Time is of the essence with respect to the performance by Tenant of its obligations under this Lease.

(e) Landlord shall in no event be construed for any purpose to be a partner, joint venturer or associate of Tenant or of any subtenant, operator, concessionaire or licensee of Tenant with respect to the Leased Premises or otherwise in the conduct of their respective businesses.

(f) To the extent Tenant has any right to cure a breach or default under this Lease, Landlord agrees Guarantor may cure such breach or default within the same time periods provided to Tenant hereunder.

(g) This Lease and any documents which may be executed by Tenant on or about the effective date hereof at Landlord’s request constitute the entire agreement between the parties and supersede all prior understandings and agreements, whether written or oral, between the parties hereto relating to the Leased Premises and the transactions provided for herein. Landlord and Tenant are business entities having substantial experience with the subject matter of this Lease and have each fully participated in the negotiation and drafting of this Lease. Accordingly, this Lease shall be construed without regard to the rule that ambiguities in a


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document are to be construed against the drafter.

(h) This Lease may be modified, amended, discharged or waived only by an agreement in writing signed by the party against whom enforcement of any such modification, amendment, discharge or waiver is sought.

(i) The covenants of this Lease shall run with the land and bind Tenant, its successors and assigns and all present and subsequent encumbrancers and subtenants of any of the Leased Premises, and shall inure to the benefit of Landlord, its successors and assigns. If there is more than one Tenant, the obligations of each shall be joint and several.

(j) Notwithstanding any provision in this Lease to the contrary, all Surviving Obligations of Tenant shall survive the expiration or termination of this Lease.

(k) If any one or more of the provisions contained in this Lease shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Lease, but this Lease shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

(l) All exhibits attached hereto are incorporated herein as if fully set forth.

(m) Each of Landlord and Tenant hereby agree that the State of New York has a substantial relationship to the parties and to the underlying transaction embodied hereby, and in all respects (including, without limiting the generality of the foregoing, matters of construction, validity and performance) this Lease and the obligations arising hereunder shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed therein and all applicable law of the United States of America; except that, at all times, the provisions for the creation of the leasehold estate, enforcement of Landlord’s rights and remedies with respect to right of re-entry and repossession, surrender, delivery, ejectment, dispossession, eviction or other in-rem proceeding or action regarding the Leased Premises pursuant to Paragraph 22 (Remedies and Damages Upon Default) hereof shall be governed by and construed according to the Laws of the State of Michigan, it being understood that, to the fullest extent permitted by law of such State, the law of the State of New York shall govern the validity and the enforceability of the Lease, and the obligations arising hereunder. To the fullest extent permitted by law, Tenant hereby unconditionally and irrevocably waives any claim to assert that the law of any other jurisdiction governs this Lease. Any legal suit, action or proceeding against Tenant arising out of or relating to this Lease may be instituted in any Federal or state court sitting in the State of New York, and Tenant waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding in such County and State, and Tenant hereby expressly and irrevocably submits to the jurisdiction of any such court in any suit, action or proceeding. Notwithstanding the foregoing, nothing herein shall prevent or prohibit Landlord from instituting any suit, action or proceeding in any other proper venue or jurisdiction in which Tenant is located or where service of process can be effectuated.

(n) Neither Tenant nor any of the members, shareholders, partners or any other Person comprising Tenant is a Specially Designated National or Blocked Person. As used herein, the term “Specially Designated National or Blocked Person” shall mean a person or


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entity (i) designated by the Department of Treasury’s Office of Foreign Assets Control, or other governmental entity, from time to time as a “specially designated national or blocked person” or similar status, (ii) described in Section 1 of U.S. Executive Order 13224 issued on September 23, 2001, or (iii) otherwise identified by government or legal authority as a person or entity with whom Landlord or its affiliates are prohibited from transacting business.

(o) Tenant will maintain as confidential (i) any and all information obtained about the Landlord prior to and following the execution of this Lease (including without limitation, any financial or operating information of, or related to, the Landlord), and (ii) the terms and conditions of this Lease (as originally circulated or as negotiated) and all other documents related to the execution of this Lease. Notwithstanding the foregoing, Tenant shall be permitted to disclose information related to this Lease described in item (ii) above: (x) in accordance with Tenant’s general public disclosure policy; provided Tenant has obtained Landlord’s prior consent to the contents of any such disclosure, (y) to Tenant’s officers, employees, board members, accountants, attorneys, shareholders, members and lenders in accordance with usual and customary business practices; provided such individuals or entities agree, at the time of such disclosure by Tenant, to be bound by the terms and conditions of this Paragraph 35(n); and (z) as required by any Legal Requirement; in addition, Tenant may disclose any information described in item (i) above if required by any Legal Requirement. Tenant hereby consents to the disclosure by Landlord of the existence of and of the terms and conditions of this Lease, and the use by Landlord of the tradename, name, or logo of Tenant, and of any entity having an ownership or management interest in Tenant, in accordance with Landlord’s general public disclosure policy; including, without limitation, disclosures made by Landlord and its affiliates to their investors, lenders, analysts and in connection with any offering memo or marketing materials distributed by Landlord and its affiliates. This provision shall survive beyond the termination of this Lease. Tenant shall not record this Lease or any memorandum thereof in the land records of any county or jurisdiction or with any Governmental Authority, without the prior written consent and approval of the Landlord.

(p) At no time shall Tenant be required to pay charges, interest, or other sums in excess of the maximum amount allowed by applicable law, and if at any time Tenant is required to pay such sums in excess of such maximum amount, the charges, interest, and other sums required to be paid shall be deemed immediately reduced to such maximum amount and any prior payments in excess of such maximum amount shall be credited on indebtedness of Tenant to Landlord.

(q) Landlord and its direct or indirect parent shall be permitted to use Tenant’s (or its affiliates) logo in its marketing materials.

(r) (i) Tenant is not, nor will Tenant become a Person with whom U.S. persons or entities are restricted from doing business under regulations of OFAC of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and (ii) neither Tenant nor its officers, directors, employees or any Person acting on its behalf is or will become a Person who violates the U.S. Foreign Corrupt Practices Act 15 U.S.C. §§78dd-1, 78dd-2 and 78dd-3, or the U.K.


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Bribery Act 2010 (c.23) (both, as amended from time to time) or any other similar Law or Legal Requirement and neither Tenant nor its officers, directors, employees or any Person acting on its behalf will engage in any dealings or transactions or be otherwise associated with any such Persons.

(s) In the event either party commences any action or proceeding under this Lease to enforce any right or remedy hereunder, the prevailing party shall be entitled to recover its reasonable costs and attorney’s fees.

(t) Landlord and Tenant each waive any claim against the other for special, indirect, consequential and punitive damages.

(u) This Lease may be executed in a number of counterparts and by different parties hereto in separate counterparts, which may be in portable document format or hard copy wet-ink signatures, each of which, when so executed, shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

[SIGNATURES ON FOLLOWING PAGE]

[No further text]


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EXHIBIT A

Property situated in the City of Warren, County of Macomb and State of Michigan, described as follows: A portion of that certain Parcel 2 described below: Part of Lot 22 of Block 7, Plat of Assessor's Addition to the Village of Warren, according to the plat thereof as recorded in Liber 4 of Plats, Pages 58 through 62, both inclusive, Macomb County Records, and part of the Northwest 1/4 of Section 4, Town 1 North, Range 12 East, City of Warren, Macomb County, Michigan, described as: Commencing at the Northwest corner of said Section 4; thence North 88 degrees 54 minutes East along the North Section line 2476.72 feet; thence South 00 degrees 02 minutes West 868.00 feet to the point of beginning; thence continuing South 00 degrees 02 minutes West 300.00 feet; thence South 88 degrees 54 minutes West 290.40 feet; thence North 00 degrees 02 minutes East 300.00 feet; thence North 88 degrees 54 minutes East 290.40 feet to the point of beginning. A portion of that certain Parcel 3 described below: A part of Lots 21 and 22, Block 7, Plat of Assessor's Addition to the Village of Warren, East 1/2 of Section 5 and part of West 1/2 of Section 4, Town 1 North, Range 12 East, City of Warren, Macomb County, Michigan, according to the plat thereof as recorded in Liber 4 of Plats, Pages 58 to 62, both inclusive, Macomb County Records; being more particularly described as: Beginning at a point distant North 88 degrees 53 minutes 30 seconds East 1926.48 feet along the North line of Section 4 and South 00 degrees 01 minute 30 seconds West 867.98 feet from the Northwest corner of said Section 4; thence North 88 degrees 53 minutes 30 seconds East 259.85 feet; thence South 00 degrees 01 minute 30 seconds West 300.00 feet; thence North 88 degrees 53 minutes 30 seconds East 290.40 feet; thence South 00 degrees 01 minute 30 seconds West 300.00 feet; thence South 88 degrees 53 minutes 30 seconds West 550.25 feet; thence North 00 degrees 01 minute 30 seconds East 600.00 feet to the point of beginning. A portion of that certain Parcel 4: A part of Lots 21 and 22, Block 7, Plat of Assessor's Addition to the Village of Warren, East 1/2 of Section 5 and part of West 1/2 of Section 4, Town 1 North, Range 12 East, City of Warren, Macomb County, Michigan, as recorded in Liber 4 of Plats, Pages 58 thru 62, both inclusive, Macomb County Records, is described as: Beginning at a point on the South line of 120 feet wide Fourteen Mile Road, said point located North 88 degrees 53 minutes 30 seconds East along the North line of said Section 4 a distance of 1263.03 feet and South 00 degrees 18 minutes 40 seconds East 60.0 feet and North 88 degrees 53 minutes 30 seconds East along said South line 330.79 feet from the Northwest corner of said Section 4; thence continuing North 88 degrees 53 minutes 30 seconds East 100.0 feet; thence South 01 degree 15 minutes 30 seconds West 249.45 feet; thence North 88 degrees 53 minutes 30 seconds East 237.68 feet; thence South 00 degrees 01 minute 30 seconds West 1158.73 feet; thence North 88 degrees 53 minutes 30 seconds East 550.25 feet, to the West line of 50 feet wide Conrail Railroad Right of Way; thence South 00 degrees 01 minute 30 seconds West along said West line 705.74 feet; thence South 89 degrees 55 minutes 20 seconds West 1170.82 feet; thence North 00 degrees 18 minutes 40 seconds West


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1355.86 feet; thence South 89 degrees 32 minutes West 30.00 feet; thence North 00 degrees 18 minutes 40 seconds West 30.00 feet; thence North 89 degrees 32 minutes East 311.30 feet; thence North 01 degree 15 minutes 30 seconds East 710.33 feet, to the point of beginning. Parcel 6: Part of Lots 21 and 22, Plat of Assessor's Addition to the Village of Warren, according to the plat thereof as recorded in Liber 4 of Plats, Pages 58 through 62, both inclusive, described as: Commencing at the Northwest corner of Section 4, Town 1 North, Range 12 East; thence North 88 degrees 53 minutes 30 seconds East along the North line of said Section 4, 1233.03 feet; thence South 00 degrees 18 minutes 40 seconds East, 33.00 feet; thence North 88 degrees 53 minutes 30 seconds East, 30.00 feet; thence South 00 degrees 18 minutes 40 seconds East, 763.30 feet; thence North 89 degrees 32 minutes 00 seconds East, 30.00 feet; thence South 00 degrees 18 minutes 40 seconds East, 1355.86 feet; thence North 89 degrees 55 minutes 20 seconds East, 649.41 feet to the point of beginning; thence continuing North 89 degrees 55 minutes 20 seconds East, 521.41 feet; thence South 00 degrees 01 minute 30 seconds West, 885.01 feet; thence South 89 degrees 52 minutes 38 seconds West, 516.43 feet; thence North 00 degrees 17 minutes 51 seconds West, 885.43 feet to the point of beginning.


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EXHIBIT B

LIST OF MACHINERY AND EQUIPMENT

All fixtures, machinery, apparatus, equipment, fittings and appliances of every kind and nature whatsoever now or hereafter affixed or attached to or installed in any of the Leased Premises (except as hereafter provided), including all electrical, anti-pollution, heating, lighting (including hanging fluorescent lighting), incinerating, power, air cooling, air conditioning, humidification, sprinkling, plumbing, lifting, cleaning, fire prevention, fire extinguishing and ventilating systems, devices and machinery and all engines, pipes, pumps, tanks (including exchange tanks and fuel storage tanks), motors, conduits, ducts, steam circulation coils, blowers, steam lines, compressors, oil burners, boilers, doors, windows, loading platforms, lavatory facilities, stairwells, fencing (including cyclone fencing), passenger and freight elevators, overhead cranes and garage units, together with all additions thereto, substitutions therefor and replacements thereof required or permitted by this Lease, but excluding all personal property and all trade fixtures, machinery, office, manufacturing and warehouse equipment which are not necessary to the ownership of the building(s) which constitute part of the Leased Premises for the uses permitted under Paragraph 4(a) (Uses of the Leased Premises) of this Lease.


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EXHIBIT C

PERMITTED ENCUMBRANCES

1. Real estate taxes and assessments for 2020 and subsequent years, which are a lien not yet due and payable.

2. Rights of Loves Furniture, Inc., as tenant only, under unrecorded Lease Agreement between Loves Furniture, Inc., as tenant, and LCN AVF Warren (MI) LLC, as landlord, as evidenced by Memorandum of Lease to be recorded as of the date hereof.

3. Detroit Edison Agreement recorded in Liber 203, page 587, Macomb County Records. (Affects Parcels 1, 2, 3, 4, and 6)

4. Indenture dated August 2, 1956, recorded October 30, 1956 in Liber 1079, Page

295, Macomb County Records. (Affects Parcel 6)

5. Agreement and Grant of Easement for Water Main Construction dated November 12, 1970, recorded January 21, 1971 as Liber 2159, Page 949 of Official Records. (Affects Parcel 4)

6. Easement dated April 24, 1973, recorded June 25, 1973 in Liber 2407, page 900,

Macomb County Records. (Affects Parcel 4)

7. Agreement and Grant of Easement for Water Main Construction dated February 8, 1977, recorded March 25, 1977 as Liber 2782, Page 764 of Official Records. (Affects Parcels 1 and 2)

8. Underground Right of Way Agreement dated July 9, 1990, recorded July 27, 1990

in Liber 4923, Page 231 of Official Records. (Affects Parcel 4)

9. Declaration of Taking dated October 12, 1994, recorded October 13, 1994 as Liber 6475, Page 643 of Official Records. (Affects Parcels 1, 2, 3 & 4)

10. Warranty Deed dated May 28, 2014, recorded June 16, 2014 in Liber 22864, Page 86. (Affects Parcel 6)


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EXHIBIT D

BASIC RENT PAYMENTS

1. Initial Term. Basic Rent shall be payable in advance on the first (1st) day of each quarter during the Term (each a “Basic Rent Payment Date”) and shall be initially $2,840,136.25 per annum and payable quarterly commencing on the Commencement Date in equal quarterly installments of $710,034.06; and on each anniversary of the Commencement Date during the initial Term and each Renewal Term, Basic Rent shall increase by two percent (2%) of the Basic Rent payable for the immediately preceding Lease Year as set forth on Schedule I, except that Basic Rent for Lease Year 2 shall increase as set forth on Schedule I.

2. Renewal Terms. Commencing with the Renewal Term, the Basic Rent for the

first (1st) year of the Renewal Term shall be an amount equal to the Fair Market Rental Value (as defined below) as of the first day of the applicable Renewal Term, as determined in accordance with Paragraph 5 of this Exhibit D. The Basic Rent for each of the remaining four (4) years of each Renewal Term shall increase by two percent (2.0%) per annum on each anniversary of the Rent Commencement Date over the Basic Rent payable for the immediately preceding Lease Year.

3. Fair Market Rental Value.

a. Landlord and Tenant shall attempt to determine the Fair Market Rental Value using their best good faith efforts. In the event that Landlord and Tenant are unable to agree on the Fair Market Rental Value by the date which is twelve (12) months prior to the expiration of the initial Term (the “Trigger Date”), then the Fair Market Rental Value shall be determined in accordance with the terms of subparagraph (b) below.

b. If Landlord and Tenant are unable to reach agreement on the Fair Market Rental Value by the Trigger Date, then within seven (7) Business Days thereafter, Landlord and Tenant shall each simultaneously submit to the other in a sealed envelope its good faith estimate of the Fair Market Rental Value for the applicable Renewal Term (each a “Fair Market Rental Value Proposal”). If either Landlord or Tenant fails to propose a Fair Market Rental Value at such time, and then fails to submit a Fair Market Rental Value Proposal within seven (7) Business Days after receipt of the other party’s Fair Market Rental Value Proposal, then the Fair Market Rental Value for the Renewal Term proposed by the responding party shall prevail. If the higher of such proposals is not more than one hundred five percent (105%) of the lower, then the Fair Market Rental Value shall be the average of the two. Otherwise, the dispute shall be resolved in


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accordance with the remainder of this subparagraph (b). Within ten (10) days after the expiration of the foregoing seven (7) Business Day period, Landlord and Tenant shall each appoint one (1) Appraiser (as hereinafter defined). If either party fails to timely select an Appraiser, and then fails to do so within seven (7) Business Days after receipt of written notice from the other of such failure, then the Fair Market Rental Value for the Renewal Term proposed by the party that selected an Appraiser shall prevail. If each party timely selects an Appraiser, then the two Appraisers shall then have fifteen (15) days after the appointment of the second Appraiser in which to determine whether the Landlord’s or the Tenant’s Fair Market Rental Value Proposal should be utilized. In the event that the two Appraisers are unable to agree on either the Landlord’s or the Tenant’s Fair Market Rental Value Proposal within such fifteen (15) day period, then the two Appraisers shall pick a third Appraiser within seven (7) Business Days after the expiration of such fifteen (15) day period. If the three (3) Appraisers, within fifteen (15) days thereafter, cannot unanimously agree upon either the Landlord’s or the Tenant’s proposed Fair Market Rental Value, then each of the three (3) Appraisers shall immediately select one of the two proposals, and the selection of either the Landlord’s or the Tenant’s Fair Market Rental Value Proposal by any two (2) of the three (3) Appraisers shall be final and conclusive for all purposes in determining Fair Market Rental Value. The parties understand, stipulate and agree that there will be no compromise, modification or averaging of the Landlord’s and Tenant’s Fair Market Rental Value Proposals once the initial Appraisers are selected, and the Appraisers must select one or the other, and that the proposed Fair Market Rental Value selected by the foregoing arbitration procedure shall be final, binding, conclusive and effective on Landlord and Tenant for purposes under this Lease, and same shall not be subject to judicial review, mediation or any other legal proceeding. As used herein, the term “Appraiser” shall mean an independent, MAI designated, and State licensed real estate Appraiser with at least ten (10) years’ experience appraising similar buildings in the State. The fees of the third Appraiser, if applicable, shall be shared equally by Landlord and Tenant. The fees of each party’s respective Appraiser, if applicable, shall be borne by that party.

c. For purposes of this Paragraph 3, “Fair Market Rental Value” means the annual amount per rentable square foot that a willing, comparable tenant would pay and a willing comparable landlord of a comparable building (in terms of location, age, existing improvements, services provided, and other such relevant factors), in the county in which the Leased Premises are located, would accept at “arm’s length”, giving appropriate consideration to the credit of the tenant, free rent and other inducements


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then being offered for comparable space, length of renewal lease term, size, quality and location of premises being renewed, tenant improvement allowances, if any, and other generally applicable terms and conditions of a renewal tenancy for comparable space.

4. Basic Rent Schedule for Initial Term. Attached to the Lease as Schedule I is a schedule of the annual Basic Rent payable by Tenant on each Basic Rent Payment Date throughout the initial Term of this Lease.


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EXHIBIT E

FORM OF LEASE GUARANTY

LEASE GUARANTY THIS LEASE GUARANTY (this “Guaranty”), dated as of _______________,

2020 (the “Effective Date”), made by U.S. ASSETS, INC., a Texas corporation, (“Guarantor”), to LCN AVF WARREN (MI), LLC, a Delaware limited liability company (“Landlord”).

RECITALS

WHEREAS, Landlord and Loves Furniture Inc., a Delaware corporation

(“Tenant”), have simultaneously executed or are about to execute a lease (the “Lease”) for the property located at 6500 East 14 Mile Road, Warren, Michigan and more particularly described in the Lease (the “Premises”), wherein Landlord will lease the Premises to Tenant; and

WHEREAS, Guarantor has a financial interest in Tenant; and

WHEREAS, Landlord would not enter into the Lease if Guarantor did not execute and deliver to Landlord this Guaranty;

NOW, THEREFORE, for and in consideration of Ten and No/100ths Dollars

($10.00), and for other good and valuable consideration, the receipt, adequacy and sufficiency of all of which are hereby acknowledged by Guarantor, and to induce Landlord to enter into the Lease with Tenant, Guarantor does hereby agree as follows:

1. Guaranty. Guarantor hereby unconditionally guarantees: (a) the full and timely payment of all rent and all other amounts due or to become due to Landlord from Tenant under the Lease; (b) all covenants, agreements, terms, obligations and conditions, undertakings, duties representations and warranties contained in the Lease to be observed, performed by or imposed upon Tenant under the Lease, whether now existing or hereafter arising, contracted or incurred (the obligations in subparts (a) and(b) hereinafter referred to collectively as the “Lease Obligations”); and (c) all costs, expenses and damages suffered or incurred by Landlord in enforcing any default or breach of the Lease Obligations by Tenant under the Lease, including, without limitation, attorneys’ fees, court costs and other expenses incurred by Landlord in enforcing the Lease Obligations or this Guaranty (such costs, expenses and damages are subject to any applicable limitations thereon that are set forth in the Lease and are hereinafter collectively referred to as the “Expenses”) (the Lease Obligations and the Expenses are hereinafter collectively referred to as the “Guaranteed Obligations”). Guarantor does hereby agree that if all or any part of the Guaranteed Obligations are not paid by Tenant


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pursuant to the terms and conditions of the Lease, Guarantor will immediately make such payments to Landlord.

2. No Discharge. This Guaranty by Guarantor shall continue for the benefit of Landlord notwithstanding: (a) any extension, modification, amendment or alteration of the Lease; (b) any assignment of the Lease or sublease of all or part of the Premises, with or without the consent of Landlord, unless a replacement guarantor that is acceptable to Landlord, satisfies Landlord’s credit conditions and financial strength requirements, and assumes Guarantor’s obligations under this Guaranty ("Replacement Guaranty"); (c) any release, extension or modification of the liability of Tenant or any other party liable under the Lease or any other guaranty of the Lease; (d) any dissolution or liquidation of Tenant or change in the composition of the partners of Tenant; and no extension, modification, amendment, alteration or assignment of the Lease, sublease of all or part of the Premises, dissolution of Tenant, change in the composition of partners of Tenant, and no other agreements or releases between Landlord and Tenant or between Landlord and any other party liable under the Lease or any other guaranty of the Lease (with or without notice to or knowledge of Guarantor) shall in any manner release or discharge Guarantor except in the case of a Replacement Guaranty, and Guarantor does hereby consent to any such extension, modification, amendment, alteration, release or assignment of the Lease, sublease of all or part of the Premises, dissolution or liquidation of Tenant or change in the composition of partners of Tenant. Except in the case of a Replacement Guaranty, this Guaranty shall in all respects be a continuing, absolute and unconditional guaranty, and shall remain in full force and effect notwithstanding, without limitation, the death or incompetency of Guarantor.

3. Guaranty Termination.

(a) Provided that no Event of Default exists, upon Guarantor’s written request, but no sooner than two (2) years after the Effective Date, Landlord agrees to evaluate in good faith, at Tenant’s cost and expense, the creditworthiness of Tenant to determine if Tenant satisfies Landlord’s and Lender’s credit conditions and financial strength requirements, at Landlord’s and Lender’s sole discretion in good faith, so that this Guaranty is no longer required as security for Tenant’s obligations under the Lease. If Landlord and Lender agree to terminate this Guaranty in writing, this Guaranty shall be null and void as of the date of such termination.

(b) Notwithstanding anything to the contrary herein, Guarantor may terminate this Guaranty effective as of the second (2nd) anniversary of the Effective Date by delivering to Landlord a Letter of Credit from Guarantor or Tenant, in form reasonably satisfactory to Landlord, in favor of and to be held by Landlord (or if requested by Landlord, in favor of and to be held by Lender in accordance with the terms of the Loan documents) in an amount equal to twenty-four (24) months of then current Basic Rent. Provided that no Event of Default has occurred, such Letter of Credit may be reduced to an amount equal to twelve (12) months of then current Basic Rent as of the third (3rd)


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anniversary of the Effective Date. Guarantor covenants and agrees to execute such agreements, consents and acknowledgments as may be requested by Landlord from time to time to change the holder of the Letter of Credit. The terms and conditions of Paragraph 35 of the Lease is incorporated herein by reference. The terms of this Section 3(b) shall survive the termination of this Guaranty.

4. Unchanged by Bankruptcy. This Guaranty will continue unchanged notwithstanding any bankruptcy, reorganization, or insolvency of Tenant or any successor or assignee thereof or by any disaffirmance or abandonment by a trustee or Tenant.

5. Transfer or Assignment. Landlord may without notice, assign or transfer this Guaranty in whole or in part and no such assignment or transfer of the Lease or this Guaranty shall operate to extinguish or diminish the liability of Guarantor hereunder.

6. Primarily Liable. This Guaranty is a guaranty of payment and not of collection. The liability of Guarantor under this Guaranty shall be primary and direct and in any right of action which shall accrue to Landlord under the Lease, Landlord may, at its option, proceed against Guarantor without having commenced any action, or having obtained any judgment, against Tenant or any other party liable under the Lease or any other guaranty of the Lease.

7. Default. If an Event of Default (as defined in the Lease) occurs, Landlord shall have the right to immediately enforce its rights, powers and remedies under the Lease, any other guaranty of the Lease, and under this Guaranty and all rights, powers and remedies available to Landlord shall be non-exclusive and cumulative of all other rights, powers and remedies under the Lease, any other guaranty of the Lease or under this Guaranty or by law or in equity; subject in each case to any applicable limitation on damages expressly set forth in the Lease. The obligations of Guarantor hereunder are independent of the obligations of Tenant or any other guarantor, and Landlord may proceed directly to enforce all rights under this Guaranty without proceeding against or joining Tenant, any other guarantor or any other person or entity. Guarantor hereby authorizes and empowers Landlord upon a default by Tenant under the Lease, at its sole discretion and without notice to Guarantor, to exercise any right or remedy which Landlord may have under the Lease and Guarantor shall be liable to Landlord for any deficiency resulting from the exercise by it of any such remedy, even though any right which Guarantor may have against Tenant or others may be lost or diminished by exercise of any such remedy. Until all of the Guaranteed Obligations have been performed and paid in full, Guarantor shall have no right of subrogation to Landlord. Landlord shall accept performance of the Guaranteed Obligations by Tenant, Guarantor or any other party responsible therefor.

8. Proceeds. Guarantor hereby authorizes Landlord, without notice to Guarantor, to apply all payments and credits received from Tenant or realized from any personal property of Tenant on the Premises in such manner and in such priority as


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Landlord in its sole judgment shall see fit to the Guaranteed Obligations which are the subject of this Guaranty.

9. Binding on Successors. Guarantor’s obligations hereunder shall not be assigned or delegated but this Guaranty shall pass to and be fully binding upon any successors, heirs, assigns and/or trustees of Guarantor, except in the case of a Replacement Guaranty.

10. Waivers. Except as may otherwise be expressly set forth in this Guaranty or in the Lease, Guarantor expressly waives and agrees not to assert or take advantage of: (a) the defense of the statute of limitations in any action hereunder or in any action for collection of the Guaranteed Obligations; (b) any defense that may arise by reason of the failure of Landlord to file or enforce a claim against Tenant in bankruptcy or any other proceeding; (c) any defense based on the failure of Landlord to give notice of the creation, existence or incurring of any new obligations or on the action or non-action of any person or entity in connection with the Guaranteed Obligations; (d) any duty on the part of Landlord to disclose to Guarantor any facts it may know or hereafter acquire regarding Tenant; (e) any defense based on lack of diligence on the part of Landlord in the collection of any and all of the Guaranteed Obligations; and/or (f) demand for payment, presentment, notice of protest or dishonor, notice of acceptance of this Guaranty, and any and all other notices or demands to which Guarantor might otherwise be entitled by law.

11. No Oral Modification. This Guaranty may not be changed orally, and no obligation of Guarantor can be released or waived by Landlord except by a writing signed by Landlord.

12. Representations. Guarantor hereby represents and warrants, as of the date of this Guaranty, that:

(a) Guarantor is not in default under any agreement to which Guarantor is a party that would have a material adverse effect on Guarantor’s ability to perform the Guaranteed Obligations;

(b) There are no actions, suits or proceedings pending, or to Guarantor’s knowledge, threatened against Guarantor before any court or other governmental, administrative, regulatory, adjudicatory or arbitrational body or agency that will have a material adverse effect on Guarantor’s ability to perform the Guaranteed Obligations;

(c) Neither this Guarantor nor any document, any financial information, certificate or other statement furnished to Landlord by Guarantor contains an untrue statement of facts or omits to state a fact which is material to this Guaranty as of the date of this Guaranty;


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(d) This Guaranty has been duly authorized, executed and delivered by Guarantor and constitutes the legally binding obligation of Guarantor;

(e) Guarantor is a direct or indirect parent of Tenant; and

(f) Guarantor is a corporation organized under the laws of Texas.

13. Financial Statements. Guarantor shall deliver to Landlord the financial statements required by, and in accordance with, Section 27 of the Lease.

14. Severability. The invalidity or unenforceability in any particular circumstances of any provision of this Guaranty shall not extend beyond such provision or circumstances, and no other provision of this instrument shall be affected thereby. This provision shall control every other provision of this Guaranty.

15. Construction. Whenever used herein, the singular number shall include the plural, the plural the singular, and the use of any gender shall include all genders. Capitalized terms not otherwise defined in this Guaranty shall have such meanings as are set forth in the Lease.

16. Choice of Law. This Guaranty is to be performed in the State of Texas and shall be governed by and construed in accordance with the laws of the State of Texas.

17. Counterparts. This Guaranty may be executed in multiple counterparts which may be done by portable document format, all of which shall be deemed originals, but all of which constitute one and the same instrument.

18. Captions. The paragraph headings used in this Guaranty are for suggestive purposes only and are not intended to be an accurate or comprehensive summary of the terms and provisions of this Guaranty.

19. Time of Essence. Time is of the essence of this Guaranty.

20. Consent to Jurisdiction. Guarantor acknowledges and agrees that this Guaranty shall be governed by, and construed and interpreted in accordance with, the laws of the State of Texas. Any legal suit, action or proceeding against Guarantor or Landlord arising out of or relating to this Guaranty shall be instituted in any federal or state court in New York, New York, pursuant to § 5-1402 of the New York General Obligations Law, and Guarantor waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding and hereby irrevocably submits to the jurisdiction of any such court in any suit, action or proceeding. Nothing contained herein, however, shall prevent the Landlord from bringing any action or exercising any rights against Guarantor under this Guaranty personally, or against any property of Guarantor, within any other county, state or country, but in no event shall Landlord enforce this Guaranty personally against any director, member, officer, general


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partner, limited partner, beneficiary, shareholder, employee or agent of Guarantor (or any legal representative, heir, estate, successor or assign of any thereof), any predecessor or successor or affiliate partnership, corporation, limited liability company (or other entity) of Guarantor, or any of its general partners, members, shareholders, officers, directors, employees or agents or any predecessor or successor partnership or corporation (or other entity).

21. Notices. Any notice, demand or document required or permitted to be delivered by this Guaranty shall be in writing and shall be deemed to be delivered (whether or not actually received) when delivered personally or when delivered by a generally recognized express courier such as Federal Express or UPS, at the address set forth below Guarantor’s signature or at any other address notice of which is provided by Guarantor to Landlord.

22. Execution. A signed copy of this Guaranty may be delivered by e-mail, facsimile or other electronic means.

[Remainder of page intentionally left blank]


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IN WITNESS WHEREOF, Guarantor has hereunder caused this Guaranty to be executed and delivered to Landlord the day and year first above written.

U.S. ASSETS, INC., a Texas corporation

By:________________________________

Name:_____________________________

Title:______________________________

Address: ___________________________________ ___________________________________ ___________________________________ Attn: ______________________________


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EXHIBIT F

MEMORANDUM OF LEASE

MEMORANDUM OF LEASE AGREEMENT THIS MEMORANDUM OF LEASE AGREEMENT, dated as of _________,

2020 (this “Memorandum”), is entered into by and between LCN AVF WARREN (MI) LLC, a Delaware limited liability company, as landlord (“Landlord”), and LOVES FURNITURE INC., a Delaware corporation, as tenant (“Tenant”).

R E C I T A L S WHEREAS, Landlord, as landlord, and Tenant, as tenant, are parties to that

certain Lease Agreement, dated as of __________, 2020 (the “Lease”), whereby Landlord leases to Tenant certain real property located at 6500 East 14 Mile Road, Warren, Michigan (collectively, the “Land”), as more particularly described on the attached Exhibit A, together with all improvements, tenements, easements, rights and appurtenances pertaining thereto (collectively, the “Premises”); and

WHEREAS, the parties wish to give notice of the existence of the Lease.

NOW, THEREFORE, in consideration of the sum of One and 00/100 Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1. Lease. Landlord and Tenant have entered into the Lease to lease and to demise the Premises.

2. Term. The initial term of the Lease is for a period of approximately twenty (20) years, commencing on October 1, 2020 and expiring on September 30, 2040, unless extended in accordance with the Lease and the parties record an extension of this Memorandum.

3. Miscellaneous. This Memorandum is binding on the parties’ successors and assigns.

This Memorandum may be executed in any number of counterparts, all of which are considered one and the same Memorandum notwithstanding that all parties hereto have not signed the same counterpart. Either Tenant or Landlord may record this Memorandum. If any provision of this Memorandum is held by the final judgment of any court of competent jurisdiction to be illegal, invalid or unenforceable, the validity of the remaining portions or provisions must not be impaired or affected, and the rights and obligations of the parties must be construed and enforced as if this Memorandum did not contain that certain part, term or provision held to be illegal,


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invalid or unenforceable. In the event of a conflict between this Memorandum and the Lease, the terms of the Lease shall govern. This Memorandum may be amended or altered only by written agreement executed by both parties. This Memorandum, and the rights and obligations of the parties hereto, must be construed and enforced in accordance with the laws of the State of New York without giving effect to its principles or rules of conflicts of laws.

[The balance of this page is intentionally left blank; signature pages follow]


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IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and year first above written.

LANDLORD: LCN AVF WARREN (MI) LLC, a Delaware limited liability company

By: ______________________ Name: ______________________ Title: ______________________

STATE OF NEW YORK ) ) ss. COUNTY OF NEW YORK )

The foregoing instrument was acknowledged before me this ________ day of __________________, by ________________________, the _____________________________ of LCN AVF WARREN (MI) LLC, a Delaware limited liability company, on behalf of the limited liability company.

______________________ Notary Public

______________________ Printed Name

County of Residence: _____________________________

My Commission Expires: __________________________


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IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and year first above written.

TENANT: LOVES FURNITURE INC., a Delaware corporation

By: ______________________ Name: ______________________ Title: ______________________

STATE OF _________________ ) ) ss. COUNTY OF _______________ )

The foregoing instrument was acknowledged before me this ________ day of ___________________, by __________________, the _______________________ of LOVES FURNITURE INC., a Delaware corporation, on behalf of the corporation.

______________________ Notary Public

______________________ Printed Name

County of Residence: _____________________________

My Commission Expires: __________________________

THIS INSTRUMENT WAS PREPARED BY: ________________________________


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EXHIBIT G

TENANT AND GUARANTOR STRUCTURE


Organizational Chart

Loves Furniture Inc

US Assets, Inc.

Jeff Love, CEOO

wns 100%

of Loves Holdings LLC

Loves Holdings LLC

Jeff Love, Manager

Ow

ns 100% of Loves Furniture Inc

Loves Furniture IncJeff Love, Director


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SCHEDULE I

SCHEDULE OF BASIC RENT

Lease Year Annual Basic Rent Quarterly Basic Rent 1 $2,840,136.25 $710,034.06

2 $3,649,268.03 $912,317.01

3 $3,722,253.39 $930,563.35

4 $3,796,698.45 $949,174.61

5 $3,872,632.42 $968,158.11

6 $3,950,085.07 $987,521.27

7 $4,029,086.77 $1,007,271.69

8 $4,109,668.51 $1,027,417.13

9 $4,191,861.88 $1,047,965.47

10 $4,275,699.12 $1,068,924.78

11 $4,361,213.10 $1,090,303.28

12 $4,448,437.36 $1,112,109.34

13 $4,537,406.11 $1,134,351.53

14 $4,628,154.23 $1,157,038.56

15 $4,720,717.31 $1,180,179.33

16 $4,815,131.66 $1,203,782.92

17 $4,911,434.29 $1,227,858.57

18 $5,009,662.98 $1,252,415.74

19 $5,109,856.24 $1,277,464.06

20 $5,212,053.36 $1,303,013.34

Quarterly Basic Rent Payments are due on January 1, April 1, July 1 and October 1 of each calendar year during the Term and any Renewal Term.


EXHIBIT “6-B” Abridged Lease Agreement

6440 East 14 Mile Road, Warren, Michigan

Complete copy of Lease Agreement available upon request.


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LEASE AGREEMENT

by and between



as LANDLORD

and



as TENANT

Premises: 6440 East 14 Mile Road, Warren, Michigan



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This LEASE AGREEMENT (as amended, supplemented or modified, this “Lease”), is made as of October 1, 2020 (the “Effective Date”), between LCN AVF WARREN (MI) LLC, aDelaware limited liability company (together with its successors and assigns “Landlord”), with an address at c/o LCN Capital Partners, 888 Seventh Avenue, 4th Floor, New York, New York 10019, and LOVES FURNITURE INC., a Delaware corporation (together with its successors and permitted assigns, “Tenant”), with an address at c/o U.S. Assets, Inc., 1601 Elm Street, Suite 4210, Dallas, Texas 75201.

In consideration of the rents and provisions herein stipulated to be paid and performed, Landlord and Tenant hereby covenant and agree as follows:

1. Demise of Premises. Landlord hereby demises and lets to Tenant, and Tenant hereby takes and leases from Landlord, for the term and upon the provisions hereinafter specified, the following described property (collectively, the “Leased Premises”): (a) the land described in Exhibit A attached hereto together with the Appurtenances (collectively, the “Land”); (b) the buildings, structures and other improvements now or hereafter constructed on the Land (collectively, the “Improvements”); (c) the fixtures, machinery, equipment and other property described in Exhibit B hereto (collectively, the “Equipment”); and (d) any furniture, equipment or other personal property located on the Land and/or in the Improvements as of the Commencement Date.

2. Certain Definitions.

“Additional Rent” is defined in Paragraph 7.

“Adjoining Property” means all sidewalks, driveways, curbs, gores and vault spaces adjoining the Leased Premises.

“Affiliate” of any Person means any Person which shall (i) control, (ii) be under the control of, or (iii) be under common control with such Person (the term “control” as used herein shall be deemed to mean (i) ownership of more than 50% of the outstanding voting stock of a corporation or other majority equity and control interest if such Person is not a corporation and (ii) the power to direct or cause the direction of the management or policies of such Person).

“Alterations” means all changes, additions, improvements or repairs to, all alterations, reconstructions, restorations, renewals, replacements or removals of, and all substitutions or replacements for, any of the Improvements or Equipment, both interior and exterior, structural and non-structural, and ordinary and extraordinary, and shall include any Major Alterations.

“Appurtenances” means all tenements, hereditaments, easements, rights-of-way, rights, privileges in and to the Land, including (a) easements over other lands granted by any Easement Agreement and (b) any streets, ways, alleys, vaults, gores or strips of land adjoining the Land.





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Premises signs indicating such availability and (ii) show the Leased Premises to prospective purchasers or tenants or their agents at such reasonable times as Landlord may select upon prior notice to Tenant.

6. Basic Rent.

Tenant shall pay to Landlord for the Leased Premises during the Term, annual rent, on a quarterly basis, in the amounts (“Basic Rent”) and on the dates (each, a “Basic Rent Payment Date”) provided for in Exhibit D and Schedule I. Each payment of Basic Rent shall be made to Landlord (or one or more other Persons as Landlord may designate) (but not more than three (3) Persons)) in Federal Funds on each Basic Rent Payment Date, without offset, abatement or deduction, pursuant to wire transfer instructions delivered to Tenant from time to time.

7. Additional Rent.


(i) except as otherwise specifically provided herein, all Costs of Tenant, Landlord and any other Persons specifically referenced herein which are incurred in connection or associated with (A) the ownership, use, non-use, occupancy, monitoring, possession, operation, condition, design, construction, maintenance, alteration, repair or restoration of the Leased Premises pursuant to the provisions of this Lease, (B) the performance of any of Tenant’s obligations under this Lease, (C) the adjustment, settlement or compromise of any insurance claims and/or condemnation awards involving or arising from the Leased Premises, (D) the prosecution, defense or settlement of any litigation involving or arising from the Leased Premises or this Lease in which it is the prevailing party for matters occurring after the Commencement Date, except as set forth in Paragraph 35(r) below and except for those matters arising solely from Landlord's financing, purchase, sale or transfer of the Leased Premises, (E)the exercise or enforcement by Landlord, its successors and assigns, of any of its rights under this Lease, except as set forth in Paragraph 35(r), (F) any amendment, supplement, modification or termination of this Lease requested by Tenant or necessitated by any action of Tenant, including without limitation, any default by Tenant in the performance of any of its obligations under this Lease, (G) any act undertaken by Landlord (or its counsel) at the request of Tenant, any act of Landlord performed on behalf of Tenant, (H) Tenant's failure to act promptly in an emergency situation, (I) out-of-pocket expenses and fees associated with wire transfers of Rent payments, and (J) all other items specifically required to be paid by Tenant under this Lease;

(ii) after the date all or any portion of any installment of Basic Rent is due and not paid within three (3) Business Days after the applicable Basic Rent Payment Date, an amount (the “Late Charge”) equal to five percent (5%) of the amount of such unpaid installment or portion thereof to reimburse Landlord for its cost and inconvenience incurred as a result of Tenant’s delinquency; provided, however, Landlord shall provide written or oral notice to Tenant and Guarantor of any delinquency during the first Lease Year before charging the Late Charge and if such Basic Rent is not paid within two (2) days after such notice the Late Charge will become due and payable; it being acknowledged that an e-mail or a phone call to an officer of Tenant and Guarantor shall be sufficient notice under this Paragraph 7(a)(ii). Tenant acknowledges that the damages to and costs incurred by Landlord resulting from Tenant’s late


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payment of Basic Rent would be difficult, if not impossible, to ascertain with any accuracy, and that the five percent (5%) charge represents Landlord and Tenant’s efforts to approximate such potential damages and costs;







(b) This Lease and the rights of Landlord and the obligations of Tenant hereunder shall not be affected by any event or for any reason or cause whatsoever foreseen or unforeseen. The previous sentence notwithstanding, whenever a period of time is herein prescribed for action to be taken by Landlord or Tenant, Landlord or Tenant shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time, any cause or causes beyond Landlord’s or Tenant's reasonable control and which by the exercise of due diligence Landlord or Tenant, as applicable, is unable, wholly or in part, to prevent, which may include, without limitation, acts of God, labor disputes, civil commotion or riot, war, exercise of police or governmental power permitting authority delays not caused directly or indirectly by Landlord, fire or other casualty event, order of a governmental authority, natural disaster, existence of any catastrophic event or similar emergency condition (including a pandemic), a declaration of a


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state of emergency by the government of the United States or the state, county or municipality where the Leased Premises is located, nuclear or atomic disaster (collectively "Force Majeure"). Notwithstanding the foregoing, no Force Majeure shall relieve Tenant of its Monetary Obligations due under this Lease; provided, however, fire or other casualty, act of God or natural disaster may delay payment of Monetary Obligations only to the extent reasonably necessary to deal with such fire or other casualty, act of God or natural disaster and provided, further, that any Costs incurred by Landlord in connection with such delay shall be paid by Tenant upon demand therefor.




(a) Tenant shall pay and discharge when due: all taxes (including, without limitation, real and personal property, franchise, sales, use, gross receipts and rent and occupancy taxes and other taxes, if any, that may be based on the rental under this Lease); all charges for any easement or agreement maintained for the benefit of the Leased Premises, including, without limitation, and the Easement Agreements; all assessments (including special assessments and any other charges or claims imposed by a governmental or municipal entity) and levies; all fines, penalties and other costs in connection with Tenant’s noncompliance with any applicable Law or Legal Requirements; all permit, inspection and license fees; all rents and charges for water, sewer, utility and communication services relating to the Leased Premises; all other public charges, whether of a like or different nature, even if unforeseen or extraordinary, imposed upon or assessed against (i) Tenant, (ii) Tenant’s interest in the Leased Premises, (iii) the Leased Premises during the Term or (iv) Landlord as a result of or arising in respect of the acquisition, ownership, occupancy, leasing, use, possession or sale of the Leased Premises during the Term,any activity conducted on the Leased Premises during the Term, or the Rent (collectively, the “Impositions”); provided that nothing herein shall obligate Tenant to pay (A) income, excess profits or other taxes of Landlord (or Lender) which are determined on the basis of Landlord’s (or Lender’s) net income or net worth (unless such taxes are in lieu of or a substitute for any other tax, assessment or other charge upon or with respect to the Leased Premises which, if it were in effect, would be payable by Tenant under the provisions hereof or by the terms of such tax, assessment or other charge and, except for margin, excise or similar taxes to the extent expressly provided to be paid for by Tenant hereinabove), (B) any estate, inheritance, succession, gift or similar tax imposed on Landlord, (C) any transfer, conveyance or mortgage tax related to


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the acquisition, sale or financing of the Leased Premises by Landlord, or (D) any capital gains tax imposed on Landlord in connection with the sale of the Leased Premises to any Person. Landlord shall have the right to require Tenant to pay, together with scheduled installments of Basic Rent, the amount of the gross receipts or rent tax, if any, payable with respect to the amount of such installment of Basic Rent. If any Imposition may be paid in installments withoutinterest or penalty, Tenant shall have the option to pay such Imposition in installments. Tenant shall be responsible to obtain all bills for the payment of Impositions and shall prepare and file all tax reports required by Governmental Authorities which relate to the Impositions. Tenant shall deliver to Landlord (1) copies of all settlements and notices pertaining to the Impositions which may be issued by any Governmental Authority within ten (10) days after Tenant’s receipt thereof, (2) receipts for payment of all taxes required to be paid by Tenant hereunder within thirty (30) days after the due date thereof provided that in each instance Tenant shall deliver such receipts at least ten (10) days prior to delinquency of such taxes, and (3) receipts for payment of all other Impositions within ten (10) days after Landlord’s request therefor. To the extent any Impositions relate to periods after the Commencement Date and are paid by Landlord prior to the Commencement Date, Tenant shall reimburse Landlord for such Impositions.

(b) Following the occurrence and during the continuance of an Event of Default, and for a reasonable period of time thereafter not to exceed twelve (12) months, Tenant shall pay to Landlord such amounts (each an “Escrow Payment”) monthly so that there shall be in an escrow account an amount sufficient to pay the Escrow Charges (as hereinafter defined) as they become due. As used herein, “Escrow Charges” means real estate taxes, assessments and, as discussed below in greater detail, tenant improvements and capital expenditures which are the obligation of Tenant under this Lease on or with respect to the Leased Premises or payments in lieu thereof. Landlord shall reasonably determine the amount of the Escrow Charges and the amount of each Escrow Payment; provided, however, that Landlord’s determination of the amount required for either or both tenant improvements or capital expenditures must be substantiated by a written property condition and recommendation report prepared by an independent and commercially reasonable third party property condition consultant possessing the requisite skills required to opine on the applicable property condition issue. The Escrow Payments may not be commingled with other funds of Landlord or other Persons and no interest thereon shall be due or payable to Tenant. Landlord shall apply the Escrow Payments to the payment of the Escrow Charges in such order or priority as Landlord shall determine or as required by Law. If at any time the Escrow Payments theretofore paid to Landlord shall be insufficient for the payment of the Escrow Charges, Tenant, within ten (10) days after Landlord’s demand therefor, shall pay the amount of the deficiency to Landlord. Tenant acknowledges and agrees that if it is required to make Escrow Payments under this Paragraph 9(b), Landlord shall have the right to deposit such funds with Lender to be applied in accordance with the terms of this Lease.


(a) During the Term, Tenant shall, at its expense, comply with and cause the Leased Premises, and use commercially reasonable efforts to cause any other Person occupying or present on any part of the Leased Premises, to comply with all Insurance Requirements and all Legal Requirements (including all applicable Environmental Laws). Tenant shall not at any time during the Term (i) cause, permit or suffer to occur any Environmental Violation or exacerbate any conditions identified or described in any of the Existing Environmental Reports (“Existing


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(d) The obligations of the parties under this Paragraph 15 shall survive any termination, expiration or rejection in bankruptcy of this Lease.16. Insurance.


(i) Insurance against all risk of physical loss or damage to the Improvements and Equipment as provided under “Special Causes of Loss” form coverage, including the perils of hail, and windstorm (with no exclusion for named storm), in amounts no less than the actualreplacement cost of the Improvements and Equipment without deduction for depreciation; Suchpolicies shall contain Replacement Cost and Agreed Amount Endorsements and “Law andOrdinance” coverage (at full replacement cost for Loss to the Undamaged portion of the Building, and for both Demolition Costs and Increased Cost of Construction, for 10% of replacement cost). Such policies and endorsements shall contain deductibles not more than$50,000 per occurrence. Such policies shall name Landlord as a named insured, and Lender asmortgagee/lenders loss payee, with respect to the Leased Premises.



(iv) Employer’s liability insurance with a limit of at least $1,000,000 per accident and per disease per employee, and 1,000,000 for disease aggregate in respect of any work or operations on or about the Leased Premises.

(v) Comprehensive Boiler and Machinery/Equipment Breakdown Insurance in an amount equal to the actual replacement cost of the Improvements and all equipment, including but not limited to Equipment delineated in Exhibit B hereon and which may be carriedas part of the coverage required under clause (i) above or pursuant to a separate policy orendorsement, provided that such policy or endorsement will include coverage as required in Paragraph 16(a)(vi). If such coverage is provided pursuant to a separate Boiler and Machinery policy or endorsement, Tenant will obtain a Joint Loss Agreement. Suchpolicies shall name Landlord as a named insured and Lender as mortgagee/lenders loss payee withrespect to the Leased Premises, and provide for no deductible in excess of $25,000 per occurrence.


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(vi) Business Income/Extra Expense/Loss of Rents Insurance at limits sufficient to cover 100% of the projected gross income for a period not less than twelve (12)months from time of loss and containing an extended period of indemnity of ninety (90)days. Such policies shall name Landlord as a named insured and Lender as lenders loss payeewith respect to the Leased Premises.



(ix) Earthquake Insurance, if the Leased Premises are located in an area with a high degree of seismic activity and the probable maximum loss (PML) or scenario expected loss (SEL) is greater than 20%, in amounts and in form and substance satisfactory to Landlord and Lender. Such polices shall name Landlord as a named insured and Lender as mortgagee/lenders loss payable.


(xi) Environmental impairment liability (“EIL”) insurance policy in the form of a Pollution and Remediation Legal Liability (“PARLL”) policy with policy limits of $4,000,000 per incident and in the aggregate for Landlord and Lender, and their respective


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successors, assigns and/or affiliates which is listed as an additional named insured, and a deductible of $50,000 with a term of 121 months and an extended reporting period of 36 months;





(e) Anything in this Paragraph 16 to the contrary notwithstanding, any insurance which Tenant is required to obtain pursuant to Paragraph 16(a) may be carried under a “blanket” policy or policies covering other properties of Tenant or under an “umbrella” policy or policies covering other liabilities of Tenant, as applicable; provided that, such blanket or umbrella policy or policies otherwise comply with the provisions of this Paragraph 16, and upon request, Tenant shall provide to Landlord a Statement of Values which may be reviewed annually and shall be amended to the extent determined necessary by Landlord based on revised Replacement Cost


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Valuations. The original or a certified copy of each such blanket or umbrella policy shall promptly be delivered to Landlord and Lender.





(ii) notwithstanding the Net Award threshold defined in Paragraph 19(a)herein or anything to the contrary contained herein, if, following a casualty, the Leased Premises cannot be restored to substantially the same value, condition and/or character immediately prior to such casualty as a result of applicable zoning restrictions, any alterations shall be subject to the approval of Landlord and Lender in its sole discretion. Any Excess Insurance Proceeds not made available for the restoration may be retained and applied by Lender toward the payment of the Note or Mortgage (whether or not due and payable) in such order, priority and proportions as Lender in its sole discretion shall deem proper. “Excess Insurance Proceeds” means any insurance proceeds paid by any of the policies with respect to all risk and/or Law & Ordinance coverage not made available for restoration following a casualty due to the application of zoning restrictions; and

(iii) proceeds of insurance required under clause (i) of Paragraph 16(b) and proceeds attributable to Builder’s Risk insurance (other than its general liability coverage provisions) under clause (vi) of Paragraph 16(b) shall be payable to Landlord or Lender and applied as set forth in Paragraph 17 (Casualty and Condemnation) or, if applicable, Paragraph 18 (Termination Events). Tenant shall apply the Net Award to restoration of the Leased Premises inaccordance with the applicable provisions of this Lease unless a Termination Event shall have occurred and Tenant has given a Termination Notice.


(a) In the event of any Casualty (whether or not insured against) resulting in damage to the Leased Premises or any part thereof, except as provided in Paragraph 18 below, the Term shall nevertheless continue, Tenant shall rebuild or repair the Leased Premises in accordance with this Paragraph 17 (Casualty and Condemnation), and in accordance with Legal


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(a) The occurrence of any one or more of the following (after expiration of any applicable cure period as provided in this Paragraph 21(a)) shall constitute an “Event of Default”under this Lease:

(i) a failure by Tenant to pay any Monetary Obligation within three (3) Business Days after when due, regardless of the reason for such failure, subject to the last sentence of Paragraph 8(b); provided, however, that no Event of Default shall exist with respect to the first occurrence (but shall be an Event of Default with respect to any subsequent occurrences) during any twelve (12)-month period in which Tenant fails to make payment when due, until five (5) days after Landlord delivers written notice of such delinquency; provided further, Landlord shall provide written or oral notice to Tenant and Guarantor of any failure during the first Lease Year and if such Monetary Obligation is not paid within two (2) days after such notice an Event of Default shall have occurred; it being acknowledged that an e-mail or a phone call to an officer of Tenant and Guarantor shall be sufficient notice under this Paragraph 21(a)(i);

(ii) a failure by Tenant duly to perform and observe, or a violation or breach of, any other provision of this Lease not otherwise specifically mentioned in this Paragraph 21(a), which default continues beyond the date that is thirty (30) days from the date on which Tenant receives notice of such default or, if such default cannot be cured within such thirty (30) day period and delay in the exercise of a remedy would not (in Landlord’s reasonable judgment)


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cause a material adverse harm to Landlord or to the Leased Premises, the cure period shall be extended for the reasonable period required to cure such default so long as Tenant shall commence to cure such default within said thirty (30) day period and shall actively and diligently and in good faith proceed with and continue the curing of such default until it shall be fully cured; provided that such extended period shall not exceed ninety (90) days;





(vii) the estate or interest of Tenant in the Leased Premises shall be levied upon or attached in any proceeding and such estate or interest is about to be sold or transferred or such process shall not be vacated or discharged within one hundred and twenty (120) days after it is made;








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(ii) Landlord may terminate Tenant’s right of possession (but not this Lease) and may repossess the Leased Premises by any available legal process without thereby releasing Tenant from any liability hereunder and without demand or notice of any kind to Tenant and without terminating this Lease.




(i) If Landlord exercises its remedy under Paragraphs 22(a)(i) or (ii) but not its remedy under Paragraph 22(a)(iv) (or attempts to exercise such remedy and is unsuccessful in reletting the Leased Premises) then, upon written demand from Landlord, Tenant shall pay to Landlord, as liquidated and agreed final damages for Tenant’s default and in lieu of all current


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damages beyond the date of such demand (it being agreed that it would be impracticable or extremely difficult to fix the actual damages), an amount equal to the Present Value of the excess, if any, of (A) all Basic Rent from the date of such demand to the date on which the Term is scheduled to expire hereunder in the absence of any earlier termination, re-entry or repossession over (B) the then fair market rental value of the Leased Premises for the same period. Tenant shall also pay to Landlord all accrued Rent then due and unpaid, all other Monetary Obligations which are then due and unpaid, all Monetary Obligations which arise or become due by reason of such Event of Default, including any Costs of Landlord in connection with the repossession of the Leased Premises and any attempted reletting thereof, including all brokerage commissions, legal expenses, reasonable attorneys’ fees, costs of Alterations and expenses and preparation for reletting.








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(j) Except as otherwise provided herein, all remedies are cumulative and concurrent and no remedy is exclusive of any other remedy. Each remedy may be exercised at any time an Event of Default has occurred and is continuing and may be exercised from time to time, except to the extent multiple remedies for an Event of Default would make Landlord more than whole.No remedy shall be exhausted by any exercise thereof.

23. Notices.

All notices, demands, requests, consents, approvals, offers, statements and other instruments or communications required or permitted to be given pursuant to the provisions of this Lease shall be in writing and shall be deemed to have been given and received for all purposes (i) when delivered in person or (ii) one (1) Business Day after deposit with Federal Express or other reliable 24-hour delivery service addressed to the other party at the address set forth below. Notices sent to Landlord shall be to the attention of Joshua R. Leventhal, Esq., c/o LCN Capital Partners, 888 Seventh Avenue, New York, New York 10019 and with a copy to the attention of Alyson Van Dyk, c/o Dorsey & Whitney, LLP, 50 South Sixth Street, Suite 1500, Minneapolis, Minnesota 55402.




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EXHIBIT D

BASIC RENT PAYMENTS

1. Initial Term. Basic Rent shall be payable in advance on the first (1st) day of each quarter during the Term (each a “Basic Rent Payment Date”) and shall be initially $705,750.00 per annum and payable quarterly commencing on the Commencement Date in equal quarterly installments of $176,437.50; and on each anniversary of the Commencement Date during the initial Term and each Renewal Term, Basic Rent shall increase by two percent (2%) of the Basic Rent payable for the immediately preceding Lease Year as set forth on Schedule I,except that Basic Rent for Lease Year 2 shall increase as set forth on Schedule I.

2. Renewal Terms. Commencing with the Renewal Term, the Basic Rent for the first (1st) year of the Renewal Term shall be an amount equal to the Fair Market Rental Value (as defined below) as of the first day of the applicable Renewal Term, as determined in accordance with Paragraph 5 of this Exhibit D. The Basic Rent for each of the remaining four (4) years of each Renewal Term shall increase by two percent (2.0%) per annum on each anniversary of the Rent Commencement Date over the Basic Rent payable for the immediately preceding Lease Year.



b. If Landlord and Tenant are unable to reach agreement on the Fair Market Rental Value by the Trigger Date, then within seven (7) Business Days thereafter, Landlord and Tenant shall each simultaneously submit to the other in a sealed envelope its good faith estimate of the Fair Market Rental Value for the applicable Renewal Term (each a “Fair Market Rental Value Proposal”). If either Landlord or Tenant fails to propose a Fair Market Rental Value at such time, and then fails to submit a Fair Market Rental Value Proposal within seven (7) Business Days after receipt of the other party’s Fair Market Rental Value Proposal, then the Fair Market Rental Value for the Renewal Term proposed by the responding party shall prevail. If the higher of such proposals is not more than one hundred five percent (105%) of the lower, then the Fair Market Rental Value shall be the average of the two. Otherwise, the dispute shall be resolved in


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accordance with the remainder of this subparagraph (b). Within ten (10) days after the expiration of the foregoing seven (7) Business Day period, Landlord and Tenant shall each appoint one (1) Appraiser (as hereinafter defined). If either party fails to timely select an Appraiser, and then fails to do so within seven (7) Business Days after receipt of written notice from the other of such failure, then the Fair Market Rental Value for the Renewal Term proposed by the party that selected an Appraiser shall prevail. If each party timely selects an Appraiser, then the two Appraisers shall then have fifteen (15) days after the appointment of the second Appraiser in which to determine whether the Landlord’s or the Tenant’s Fair Market Rental Value Proposal should be utilized. In the event that the two Appraisers are unable to agree on either the Landlord’s or the Tenant’s Fair Market Rental Value Proposal within such fifteen (15) day period, then the two Appraisers shall pick a third Appraiser within seven (7) Business Days after the expiration of such fifteen (15) day period. If the three (3) Appraisers, within fifteen (15) days thereafter, cannot unanimously agree upon either the Landlord’s or the Tenant’s proposed Fair Market Rental Value, then each of the three (3) Appraisers shall immediately select one of the two proposals, and the selection of either the Landlord’s or the Tenant’s Fair Market Rental Value Proposal by any two (2) of the three (3) Appraisers shall be final and conclusive for all purposes in determining Fair Market Rental Value. The parties understand, stipulate and agree that there will be no compromise, modification or averaging of the Landlord’s and Tenant’s Fair Market Rental Value Proposals once the initial Appraisers are selected, and the Appraisers must select one or the other, and that the proposed Fair Market Rental Value selected by the foregoing arbitration procedure shall be final, binding, conclusive and effective on Landlord and Tenant for purposes under this Lease, and same shall not be subject to judicial review, mediation or any other legal proceeding. As used herein, the term “Appraiser” shall mean an independent, MAI designated, and State licensed real estate Appraiser with at least ten (10) years’ experience appraising similar buildings in the State. The fees of the third Appraiser, if applicable, shall be shared equally by Landlord and Tenant. The fees of each party’s respective Appraiser, if applicable, shall be borne by that party.

c. For purposes of this Paragraph 3, “Fair Market Rental Value” means the annual amount per rentable square foot that a willing, comparable tenant would pay and a willing comparable landlord of a comparable building (in terms of location, age, existing improvements, services provided, and other such relevant factors), in the county in which the Leased Premises are located, would accept at “arm’s length”, giving appropriate consideration to the credit of the tenant, free rent and other inducements


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then being offered for comparable space, length of renewal lease term, size, quality and location of premises being renewed, tenant improvement allowances, if any, and other generally applicable terms and conditions of a renewal tenancy for comparable space.

4. Basic Rent Schedule for Initial Term. Attached to the Lease as Schedule I is a schedule of the annual Basic Rent payable by Tenant on each Basic Rent Payment Date throughout the initial Term of this Lease.


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SCHEDULE I


Lease Year Annual Basic Rent Quarterly Basic Rent 1 $705,750.00 $176,437.50

2 $719,865.00 $179,966.25

3 $734,262.30 $183,565.58

4 $748,947.55 $187,236.89

5 $763,926.50 $190,981.62

6 $779,205.03 $194,801.26

7 $794,789.13 $198,697.28

8 $810,684.91 $202,671.23

9 $826,898.61 $206,724.65

10 $843,436.58 $210,859.15

11 $860,305.31 $215,076.33

12 $877,511.42 $219,377.85

13 $895,061.65 $223,765.41

14 $912,962.88 $228,240.72

15 $931,222.14 $232,805.53

16 $949,846.58 $237,461.64

17 $968,843.51 $242,210.88

18 $988,220.38 $247,055.10

19 $1,007,984.79 $251,996.20

20 $1,028,144.49 $257,036.12



EXHIBIT “6-C” Abridged Lease Agreement 15071 Market Drive, Dearborn, Michigan



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LEASE AGREEMENT

by and between

LCN AVF DEARBORN (MI) LLC,


as LANDLORD

and



as TENANT

Premises: 15071 Market Drive, Dearborn, Michigan



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“Consent Required Alteration” is (i) any Alteration (other than a Structural Alteration) or series of related Alterations for which the cost is reasonably expected to exceed $100,000.00; or (ii) any Structural Alteration. Notwithstanding the foregoing, the installation, maintenance and/or repair of cable, telephone or internet lines (other than a Structural Alteration) for which the cost is less than $5,000 shall not require Landlord’s consent so long as the value and utility of the Leased Premises are not materially diminished thereby.

“Costs” of a Person or associated with a specified transaction means all reasonable costs and expenses incurred by such Person or associated with such transaction, including without limitation, reasonable attorneys’ fees and expenses, court costs, brokerage fees, escrow fees, title insurance premiums, recording fees and transfer taxes, as the circumstances require.

“Default Rate” is defined in Paragraph 7(a)(iii).

“Easement Agreement” means any condition, covenant, restriction, easement, declaration, license or other agreement listed as a Permitted Encumbrance or as may hereafter affect the Leased Premises.

“Eligible Institution” shall mean a depository institution or trust company insured by the Federal Deposit Insurance Corporation the short term unsecured debt obligations or commercial paper of which are rated at least “A-1” by Standard & Poor’s Ratings Services, “P-1” by Moody’s Investors Service, Inc., and “F-1” by Fitch, Inc. in the case of accounts in which funds are held for thirty (30) days or less or, in the case of Letters of Credit or accounts in which funds are held for more than thirty (30) days, the long term unsecured debt obligations of which are rated at least “A” by S&P, “A2” by Moody’s Investors Service, Inc. and “A” by Fitch, Inc..

“Environmental Assessments” means all environmental, soils or engineering reports, assessments, studies, test results, notices, agreements and other documentation with respect to the Leased Premises that have been provided by Tenant to Landlord prior to the date of this Lease.


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(a) Subject to the provisions hereof, Tenant shall have and hold the Leased Premises for an initial term (as extended or renewed in accordance with the provisions hereof, the “Term”)commencing on October 1, 2020 (the “Commencement Date”) and ending on September 30,2040 (the “Expiration Date”).

(b) Tenant shall have two (2) options (each, an “Option”) to extend this Lease for an additional period of five (5) years each (each, a “Renewal Term”). At least twenty-seven (27) months prior to the Expiration Date or expiration of the first Renewal Term (assuming Tenant exercises its first Option), Tenant shall notify Landlord in writing that Tenant is electing to extend this Lease for the Leased Premises for a Renewal Term. The Basic Rent for each Renewal Term shall be determined in accordance with Exhibit D. Any such extension of the Term shall be subject to all of the provisions of this Lease (except that Tenant shall not have the right to any additional Renewal Terms other than the two (2) Renewal Terms provided in this Paragraph 5(b) and this Lease shall automatically expire at the expiration of the second (2nd)Renewal Term, unless otherwise agreed to in writing between Landlord and Tenant).

(c) If Tenant exercises its option pursuant to Paragraph 5(b) not to extend or further extend the Term, then Landlord shall have the right during the remainder of the Term then in effect and, in any event, Landlord shall have the right during the last year of the Term, to (i) advertise the availability of the Leased Premises for sale or reletting and to erect upon the Leased Premises signs indicating such availability and (ii) show the Leased Premises to prospective purchasers or tenants or their agents at such reasonable times as Landlord may select upon prior notice to Tenant.

6. Basic Rent.

(a) Tenant shall pay to Landlord for the Leased Premises during the Term, annual rent, on a quarterly basis, in the amounts (“Basic Rent”) and on the dates (each, a “Basic Rent Payment Date”) provided for in Exhibit D and Schedule I. Each payment of Basic Rent shall be made to Landlord (or one or more other Persons as Landlord may designate) (but not more than three (3) Persons)) in Federal Funds on each Basic Rent Payment Date, without offset, abatement or deduction, pursuant to wire transfer instructions delivered to Tenant from time to time.

(b) Not later than forty-five (45) days after each calendar quarter during the Term, Tenant shall prepare and deliver to Landlord a statement of Tenant’s Gross Sales certified by Tenant’s chief financial officer for such calendar quarter (“Gross Sales Statement”). Based upon each Gross Sales Statement, Landlord shall annualize the Gross Sales and notify Tenant in writing of the Basic Rent due for the next succeeding calendar quarter in accordance with Exhibit D and Schedule I attached hereto. In addition, within thirty (30) days after the expiration of each calendar year, Tenant shall prepare and deliver to Landlord a statement of Tenant’s Gross Sales during such calendar year certified to be correct by Tenant’s chief financial officer, and if requested by Landlord, an independent certified public accountant, which statement shall be accompanied with a check for any additional Basic Rent payment required pursuant to Exhibit D and Schedule I.

(c) Tenant shall keep in the Leased Premises, at its corporate offices, or at some other


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location approved by Landlord in writing, an accurate set of books, which may be electronic,reflecting Tenant’s Gross Sales and shall preserve all records related to all sales transactions and returns for sales made at the Leased Premises, shipping records, and such other records as may be needed for an effective audit of Tenant’s Gross Sales. Such records shall be retained for a period of at least 36 months after the end of the calendar year to which they relate, or if Landlord shall have begun a special audit in accordance with Paragraph 6(d) for such longer period as may be required to complete such special audit. All such books and records shall be subject to inspection and audit by Landlord at all reasonable times and upon reasonable notice.

(d) No more than once per calendar year, or upon a showing of reasonable cause, Landlord shall have the right to have auditors of Landlord’s choice make a special audit of all books and records, wherever located, pertaining to Tenant’s Gross Sales. Notwithstanding the foregoing, Landlord shall have the right to such special audit any time upon an Event of Default. If Tenant’s Gross Sales, as so determined, exceed the figures submitted by Tenant by more than two percent (2%), or contain any willful inaccuracies, then Tenant shall pay the cost of such audit. Tenant shall promptly pay to Landlord any deficiency in Basic Rent and Landlord shall promptly credit Tenant with any overpayment in Basic Rent, as the case may be, which is established by such special audit. The acceptance by Landlord of payments of Basic Rent shall be without prejudice to Landlord’s right to examine Tenant’s books and records.

7. Additional Rent.


(i) except as otherwise specifically provided herein, all Costs of Tenant, Landlord and any other Persons specifically referenced herein which are incurred in connection or associated with (A) the ownership, use, non-use, occupancy, monitoring, possession, operation, condition, design, construction, maintenance, alteration, repair or restoration of the Leased Premises pursuant to the provisions of this Lease, (B) the performance of any of Tenant’s obligations under this Lease, (C) Intentionally deleted, (D) the adjustment, settlement or compromise of any insurance claims and/or condemnation awards involving or arising from the Leased Premises, (E) the prosecution, defense or settlement of any litigation involving or arising from the Leased Premises or this Lease in which it is the prevailing party for matters occurring after the Commencement Date, except as set forth in Paragraph 35(r) below and except for those matters arising solely from Landlord's financing, purchase, sale or transfer of the Leased Premises, (F) the exercise or enforcement by Landlord, its successors and assigns, of any of its rights under this Lease, except as set forth in Paragraph 35(r), (G) any amendment, supplement, modification or termination of this Lease requested by Tenant or necessitated by any action of Tenant, including without limitation, any default by Tenant in the performance of any of its obligations under this Lease, (H) any act undertaken by Landlord (or its counsel) at the request of Tenant, any act of Landlord performed on behalf of Tenant, (I) Tenant's failure to act promptly in an emergency situation, (J) out-of-pocket expenses and fees associated with wire transfers of Rent payments, and (K) all other items specifically required to be paid by Tenant under this Lease;


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(ii) after the date all or any portion of any installment of Basic Rent is due and not paid within three (3) Business Days after the applicable Basic Rent Payment Date, an amount (the “Late Charge”) equal to five percent (5%) of the amount of such unpaid installment or portion thereof to reimburse Landlord for its cost and inconvenience incurred as a result of Tenant’s delinquency; provided, however, Landlord shall provide written or oral notice to Tenant and Guarantor of any delinquency during the first Lease Year before charging the Late Chargeand if such Basic Rent is not paid within two (2) days after such notice the Late Charge will become due and payable; it being acknowledged that an e-mail or a phone call to an officer of Tenant and Guarantor shall be sufficient notice under this Paragraph 7(a)(ii). Tenant acknowledges that the damages to and costs incurred by Landlord resulting from Tenant’s late payment of Basic Rent would be difficult, if not impossible, to ascertain with any accuracy, and that the five percent (5%) charge represents Landlord and Tenant’s efforts to approximate such potential damages and costs;








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(b) This Lease and the rights of Landlord and the obligations of Tenant hereunder shall not be affected by any event or for any reason or cause whatsoever foreseen or unforeseen. The previous sentence notwithstanding, whenever a period of time is herein prescribed for action to be taken by Landlord or Tenant, Landlord or Tenant shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time, any cause or causes beyond Landlord’s or Tenant's reasonable control and which by the exercise of due diligence Landlord or Tenant, as applicable, is unable, wholly or in part, to prevent, which may include, without limitation, acts of God, labor disputes, civil commotion or riot, war, exercise of police or governmental power permitting authority delays not caused directly or indirectly by Landlord, fire or other casualty event, order of a governmental authority, natural disaster, existence of any catastrophic event or similar emergency condition (including a pandemic), a declaration of a state of emergency by the government of the United States or the state, county or municipality where the Leased Premises is located, nuclear or atomic disaster (collectively "Force Majeure"). Notwithstanding the foregoing, no Force Majeure shall relieve Tenant of its Monetary Obligations due under this Lease; provided, however, fire or other casualty, act of God or natural disaster may delay payment of Monetary Obligations only to the extent reasonably necessary to deal with such fire or other casualty, act of God or natural disaster and provided, further, that any Costs incurred by Landlord in connection with such delay shall be paid by Tenant upon demand therefor.




(a) Tenant shall pay and discharge when due: all taxes (including, without limitation, real and personal property, franchise, sales, use, gross receipts and rent and occupancy taxes and other taxes, if any, that may be based on the rental under this Lease); all charges for any easement or agreement maintained for the benefit of the Leased Premises, including, without limitation, and the Easement Agreements; all assessments (including special assessments and any other charges or claims imposed by a governmental or municipal entity) and levies; all fines, penalties and other costs in connection with Tenant’s noncompliance with any applicable Law or Legal Requirements; all permit, inspection and license fees; all rents and charges for water, sewer, utility and communication services relating to the Leased Premises; all other public charges, whether of a like or different nature, even if unforeseen or extraordinary, imposed upon or assessed against (i) Tenant, (ii) Tenant’s interest in the Leased Premises, (iii) the Leased


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Premises during the Term or, (iv) Landlord as a result of or arising in respect of the acquisition, ownership, occupancy, leasing, use, possession or sale of the Leased Premises during the Term,any activity conducted on the Leased Premises during the Term, or the Rent (collectively, the “Impositions”); provided that nothing herein shall obligate Tenant to pay (A) income, excess profits or other taxes of Landlord (or Lender) which are determined on the basis of Landlord’s (or Lender’s) net income or net worth (unless such taxes are in lieu of or a substitute for any other tax, assessment or other charge upon or with respect to the Leased Premises which, if it were in effect, would be payable by Tenant under the provisions hereof or by the terms of such tax, assessment or other charge and, except for margin, excise or similar taxes to the extent expressly provided to be paid for by Tenant hereinabove), (B) any estate, inheritance, succession, gift or similar tax imposed on Landlord, (C) any transfer, conveyance or mortgage tax related to the acquisition, sale or financing of the Leased Premises by Landlord, or (D) any capital gains tax imposed on Landlord in connection with the sale of the Leased Premises to any Person. Landlord shall have the right to require Tenant to pay, together with scheduled installments of Basic Rent, the amount of the gross receipts or rent tax, if any, payable with respect to the amount of such installment of Basic Rent. If any Imposition may be paid in installments without interest or penalty, Tenant shall have the option to pay such Imposition in installments. Tenant shall be responsible to obtain all bills for the payment of Impositions and shall prepare and file all tax reports required by Governmental Authorities which relate to the Impositions. Tenant shall deliver to Landlord (1) copies of all settlements and notices pertaining to the Impositions which may be issued by any Governmental Authority within ten (10) days after Tenant’s receipt thereof, (2) receipts for payment of all taxes required to be paid by Tenant hereunder within thirty (30) days after the due date thereof provided that in each instance Tenant shall deliver such receipts at least ten (10) days prior to delinquency of such taxes, and (3) receipts for payment of all other Impositions within ten (10) days after Landlord’s request therefor. To the extent any Impositions relate to periods after the Commencement Date and are paid by Landlord prior to the Commencement Date, Tenant shall reimburse Landlord for such Impositions.

(b) Following the occurrence and during the continuance of an Event of Default, and for a reasonable period of time thereafter not to exceed twelve (12) months, Tenant shall pay to Landlord such amounts (each an “Escrow Payment”) monthly so that there shall be in an escrow account an amount sufficient to pay the Escrow Charges (as hereinafter defined) as they becomedue. As used herein, “Escrow Charges” means real estate taxes, assessments and, as discussed below in greater detail, tenant improvements and capital expenditures which are the obligation of Tenant under this Lease on or with respect to the Leased Premises or payments in lieu thereof. Landlord shall reasonably determine the amount of the Escrow Charges and the amount of each Escrow Payment; provided, however, that Landlord’s determination of the amount required for either or both tenant improvements or capital expenditures must be substantiated by a written property condition and recommendation report prepared by an independent and commercially reasonable third party property condition consultant possessing the requisite skills required to opine on the applicable property condition issue. The Escrow Payments may not be commingled with other funds of Landlord or other Persons and no interest thereon shall be due or payable to Tenant. Landlord shall apply the Escrow Payments to the payment of the Escrow Charges in such order or priority as Landlord shall determine or as required by Law. If at any time the Escrow Payments theretofore paid to Landlord shall be insufficient for the payment of the Escrow Charges, Tenant, within ten (10) days after Landlord’s demand therefor, shall pay the amount of the deficiency to Landlord. Tenant acknowledges and agrees that if it is required to


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make Escrow Payments under this Paragraph 9(b), Landlord shall have the right to deposit such funds with Lender to be applied in accordance with the terms of this Lease.


(a) During the Term, Tenant shall, at its expense, comply with and cause the Leased Premises, and use commercially reasonable efforts to cause any other Person occupying or present on any part of the Leased Premises, to comply with all Insurance Requirements and all Legal Requirements (including all applicable Environmental Laws). Tenant shall not at any time during the Term (i) cause, permit or suffer to occur any Environmental Violation or exacerbate any conditions identified or described in the Existing Environmental Report, or (ii) permit any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating the Leased Premises under or through Tenant to cause, permit or suffer to occur any Environmental Violation or exacerbate any existing condition, including any conditions described or identified in the Environmental Assessments, and, at the written request of Landlord, Tenant shall promptly remediate or undertake any other appropriate response action to the extent required under any Environmental Law to correct (x) any Environmental Violation committed during its tenancy or (z) any existing condition that was exacerbated by Tenant or any sublessee, assignee, employee, invitee or other Person accessing, occupying or operating the Leased Premises under or through Tenant to the extent of such exacerbation, or (iii) without the prior written consent of Landlord, permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface or the subsurface of any of the Land, regardless of the depth thereof or the method of mining or extraction thereof or (iv) cause, permit or suffer to occur a default (beyond applicable notice and cure periods) under the Ford Indenture or any other Permitted Encumbrances.

(b) Tenant, at its sole cost and expense, will at all times promptly and faithfully abide by, discharge and perform all of the covenants, conditions and agreements contained in any Easement Agreement and other Permitted Encumbrances on the part of Landlord or the occupier to be kept and performed thereunder. Tenant will not alter, modify, amend or terminate any Easement Agreement, give any consent or approval thereunder, or enter into any new Easement Agreement without, in each case, prior written consent of Landlord and Lender, which consent shall not be unreasonably withheld, conditioned or delayed.

(c) Upon prior written and reasonable notice from Landlord, Tenant shall permit such persons as Landlord may designate (“Site Reviewers”) to visit the Leased Premises during normal business hours and in a manner which does not unreasonably interfere with Tenant’s operations and perform, at the sole cost and expense of Landlord (except as otherwise expressly provided in this Paragraph 10), environmental visual site investigations and assessments (“Site Assessments”) on the Leased Premises in any of the following circumstances: (i) in connection with any sale, financing or refinancing of the Leased Premises, (ii) within the six month period prior to the expiration of the Term (at Tenant’s cost and expense), (iii) if required by Lender or the terms of any credit facility to which Landlord is bound, (iv) if an Event of Default exists (at Tenant’s cost and expense), or (v) at any other time that, in the reasonable opinion of Landlord or Lender, a reasonable basis exists to believe that a Environmental Violation exists (at Tenant’s cost and expense if an Environmental Violation is identified), except with respect to any prior existing conditions specifically identified or described in the Existing Environmental Report, if such conditions have not been caused by or exacerbated by Tenant in its operations at the Leased


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written consent. In the event of a conflict of interest, Indemnitee shall have the right to select counsel, and the reasonable cost of such counsel shall be paid by Indemnitor.


16. Insurance.


(i) Insurance against all risk of physical loss or damage to the Improvements and Equipment as provided under “Special Causes of Loss” form coverage, including the perils of hail, and windstorm (with no exclusion for named storm), in amounts no less than the actualreplacement cost of the Improvements and Equipment without deduction for depreciation; Suchpolicies shall contain Replacement Cost and Agreed Amount Endorsements and “Law andOrdinance” coverage (at full replacement cost for Loss to the Undamaged portion of the Building, and for both Demolition Costs and Increased Cost of Construction, for 10% of replacement cost). Such policies and endorsements shall contain deductibles not more than$50,000 per occurrence. Such policies shall name Landlord as a named insured, and Lender asmortgagee/lenders loss payee, with respect to the Leased Premises.


(iii) Workers’ compensation insurance in the amount required by applicable Law,

(iv) Employer’s liability insurance with a limit of at least $1,000,000 per accident and per disease per employee, and 1,000,000 for disease aggregate in respect of any work or operations on or about the Leased Premises;

(v) Comprehensive Boiler and Machinery/Equipment Breakdown Insurance in an amount equal to the actual replacement cost of the Improvements and all equipment, including but not limited to Equipment delineated in Exhibit B hereon and which may be carriedas part of the coverage required under clause (i) above or pursuant to a separate policy orendorsement, provided that such policy or endorsement will include coverage as required in Paragraph 16(a)(vi). If such coverage is provided pursuant to a separate Boiler and Machinery policy or endorsement, Tenant will obtain a Joint Loss Agreement. Suchpolicies shall name Landlord as a named insured and Lender as mortgagee/lenders loss payee with


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respect to the Leased Premises, and provide for no deductible in excess of $25,000 per occurrence.

(vi) Business Income/Extra Expense/Loss of Rents Insurance at limits sufficient to cover 100% of the projected gross income for a period not less than twelve (12)months from time of loss and containing an extended period of indemnity of ninety (90)days. Such policies shall name Landlord as a named insured and Lender as lenders loss payeewith respect to the Leased Premises.



(ix) Earthquake Insurance, if the Leased Premises are located in an area with a high degree of seismic activity and the probable maximum loss (PML) or scenario expected loss (SEL) is greater than 20%, in amounts and in form and substance satisfactory to Landlord andLender. Such polices shall name Landlord as a named insured and Lender as mortgagee/lenders loss payable.



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(xi) Such other insurance (or other terms with respect to any insurance required pursuant to this Paragraph 16, including without limitation amounts of coverage, deductibles, form of mortgagee clause) on or in connection with the Leased Premises as Landlord or Lender may reasonably require (including, without limitation mold insurance); provided that, such insurance is consistent, as to types of coverage and amounts, with the requirements of institutional lenders.




(e) Anything in this Paragraph 16 to the contrary notwithstanding, any insurance which Tenant is required to obtain pursuant to Paragraph 16(a) may be carried under a “blanket” policy or policies covering other properties of Tenant or under an “umbrella” policy or policies covering other liabilities of Tenant, as applicable; provided that, such blanket or umbrella policy or policies otherwise comply with the provisions of this Paragraph 16, and upon request, Tenant shall provide to Landlord a Statement of Values which may be reviewed annually and shall be amended to the extent determined necessary by Landlord based on revised Replacement Cost Valuations. The original or a certified copy of each such blanket or umbrella policy shall promptly be delivered to Landlord and Lender.


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(ii) notwithstanding the Net Award threshold defined in Paragraph 19(a)herein or anything to the contrary contained herein, if, following a casualty, the Leased Premisescannot be restored to substantially the same value, condition and/or character immediately prior to such casualty as a result of applicable zoning restrictions, any alterations shall be subject to the approval of Landlord and Lender in its sole discretion. Any Excess Insurance Proceeds not made available for the restoration may be retained and applied by Lender toward the payment of the Note or Mortgage (whether or not due and payable) in such order, priority and proportions as Lender in its sole discretion shall deem proper. “Excess Insurance Proceeds” means any insurance proceeds paid by any of the policies with respect to all risk and/or Law & Ordinance coverage not made available for restoration following a casualty due to the application of zoning restrictions; and

(iii) proceeds of insurance required under clause (i) of Paragraph 16(b) and proceeds attributable to Builder’s Risk insurance (other than its general liability coverage provisions) under clause (vi) of Paragraph 16(b) shall be payable to Landlord or Lender and applied as set forth in Paragraph 17 (Casualty and Condemnation) or, if applicable, Paragraph 18 (Termination Events). Tenant shall apply the Net Award to restoration of the Leased Premises in accordance with the applicable provisions of this Lease unless a Termination Event shall have occurred and Tenant has given a Termination Notice.


(a) In the event of any Casualty (whether or not insured against) resulting in damage to the Leased Premises or any part thereof, except as provided in Paragraph 18 below, the Term shall nevertheless continue, Tenant shall rebuild or repair the Leased Premises in accordance with this Paragraph 17 (Casualty and Condemnation), and in accordance with Legal Requirements, and there shall be no abatement or reduction of Rent payable by Tenant hereunder for any reason, except that, if a smaller building must be constructed to comply with applicable zoning laws, there shall be a pro rata reduction in Basic Rent based on the square footage of the


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(k) In consideration for Landlord entering into this Lease at an initial discounted Basic Rent as agreed between the parties, Tenant acknowledges and agrees that, at any time where Tenant has yet not achieved Gross Sales equal to at least the AVF 2019 Sales Level, then upon approval of Landlord’s Lender, Landlord shall have the right, upon no less than ninety (90)days prior notice to Tenant (“Landlord’s Termination Notice”), to require Tenant to surrender the Leased Premises to Landlord in broom-clean condition and provide full possession of the Leased Premises to Landlord, at which point this Lease and Tenant's obligations thereunder shall be terminated so long as there is no Event of Default, and except for the Surviving Obligations; provided, however, if Tenant notifies Landlord within five (5) Business Days after Landlord’s Termination Notice that it agrees to pay on a going-forward basis the lower of the annual Basic Rent at 100% of the AVF 2019 Sales Level or 10% more than the current Fair Market Rental Value of the leasehold, as reasonably determined by Landlord, provided that annual Basic Rent shall not be lower than the then current annual Basic Rent, then Landlord shall rescind its Landlord’s Termination Notice and the parties shall amend this Lease to reflect such agreement within five (5) Business Day after Tenant’s notice. Notwithstanding the foregoing, Landlord shall not exercise any right or remedy in the preceding sentence (including Tenant's surrender of the Leased Premises, and or termination of the Lease) within the first twelve (12) months following the Commencement Date, it being understood between Tenant and Landlord that thisParagraph 20(k) is only to be enforceable at the expiration of such twelve (12) month time period.



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(i) a failure by Tenant to pay any Monetary Obligation within three (3) Business Days after when due, regardless of the reason for such failure, subject to the last sentence of Paragraph 8(b); provided, however, that no Event of Default shall exist with respect to the first occurrence (but shall be an Event of Default with respect to any subsequent occurrences) during any twelve (12)-month period in which Tenant fails to make payment when due until five (5) days after Landlord delivers written notice of such delinquency; provided further, Landlord shall provide written or oral notice to Tenant and Guarantor of any failure during the first Lease Year and if such Monetary Obligation is not paid within two (2) days after such notice an Event of Default shall have occurred; it being acknowledged that an e-mail or a phone call to an officer of Tenant and Guarantor shall be sufficient notice under this Paragraph 21(a)(i);

(ii) a failure by Tenant duly to perform and observe, or a violation or breach of, any other provision of this Lease not otherwise specifically mentioned in this Paragraph 21(a), which default continues beyond the date that is thirty (30) days from the date on which Tenant receives notice of such default or, if such default cannot be cured within such thirty (30) day period and delay in the exercise of a remedy would not (in Landlord’s reasonable judgment) cause a material adverse harm to Landlord or to the Leased Premises, the cure period shall be extended for the reasonable period required to cure such default so long as Tenant shall commence to cure such default within said thirty (30) day period and shall actively and diligently and in good faith proceed with and continue the curing of such default until it shall be fully cured; provided that such extended period shall not exceed ninety (90) days;





(vii) the estate or interest of Tenant in the Leased Premises shall be levied upon or attached in any proceeding and such estate or interest is about to be sold or transferred or such


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process shall not be vacated or discharged within one hundred and twenty (120) days after it is made;





(xii) a monetary default or material non-monetary default occurs beyond any applicable grace or cure period under any other lease agreement between Tenant and Landlord or Landlord’s affiliate.




(ii) Landlord may terminate Tenant’s right of possession (but not this Lease) and may repossess the Leased Premises by any available legal process without thereby releasingTenant from any liability hereunder and without demand or notice of any kind to Tenant and without terminating this Lease.


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(i) If Landlord exercises its remedy under Paragraphs 22(a)(i) or (ii) but not its remedy under Paragraph 22(a)(iv) (or attempts to exercise such remedy and is unsuccessful in reletting the Leased Premises) then, upon written demand from Landlord, Tenant shall pay to Landlord, as liquidated and agreed final damages for Tenant’s default and in lieu of all current damages beyond the date of such demand (it being agreed that it would be impracticable or extremely difficult to fix the actual damages), an amount equal to the Present Value of the excess, if any, of (A) all Basic Rent from the date of such demand to the date on which the Term is scheduled to expire hereunder in the absence of any earlier termination, re-entry or repossession over (B) the then fair market rental value of the Leased Premises for the same period. Tenant shall also pay to Landlord all accrued Rent then due and unpaid, all other Monetary Obligations which are then due and unpaid, all Monetary Obligations which arise or become due by reason of such Event of Default, including any Costs of Landlord in connection with the repossession of the Leased Premises and any attempted reletting thereof, including all brokerage commissions, legal expenses, reasonable attorneys’ fees, costs of Alterations and expenses and preparation for reletting.


(iii) Tenant shall be and remain liable for all sums aforesaid, and Landlord may recover such damages from Tenant and institute and maintain successive actions or legal


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proceedings against Tenant for the recovery of such damages. Nothing herein contained shall be deemed to require Landlord to wait to begin such action or other legal proceedings until the date when the Term would have expired by its own terms had there been no such Event of Default.








(j) Except as otherwise provided herein, all remedies are cumulative and concurrent and no remedy is exclusive of any other remedy. Each remedy may be exercised at any time an Event of Default has occurred and is continuing and may be exercised from time to time, except to the extent multiple remedies for an Event of Default would make Landlord more than whole. No remedy shall be exhausted by any exercise thereof.


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EXHIBIT D

BASIC RENT PAYMENTS

1. Initial Term. Basic Rent shall be payable in advance on the first (1st) day of each quarter during the Term (each a “Basic Rent Payment Date”) and shall be a minimum of $762,959.02 per annum and payable quarterly commencing on the date that is thirty (30) days after the Commencement Date (the “Rent Commencement Date”) in equal quarterly installments of $190,739.76, subject to increase on a quarterly basis based upon a percentage of the AVF 2019 Sales Level set forth on Schedule I and in accordance with Paragraph 6 of the Lease.

2. On each anniversary of the Commencement Date during the initial Term, Basic Rent shall increase (i) by two and one-half percent (2.5%) of the annual Basic Rent payable for the immediately preceding quarter (in accordance with Paragraph 6 of the Lease and on Schedule I) if the AVF 2019 Sales Level has not been met, or (ii) by two percent (2.0%) of the annual Basic Rent payable for the immediately preceding quarter (in accordance with Paragraph 6 of the Lease and on Schedule I) if the AVF 2019 Sales Level has been met.




b. If Landlord and Tenant are unable to reach agreement on the Fair Market Rental Value by the Trigger Date, then within seven (7) Business Days thereafter, Landlord and Tenant shall each simultaneously submit to the other in a sealed envelope its good faith estimate of the Fair Market Rental Value for the applicable Renewal Term (each a “Fair Market Rental Value Proposal”). If either Landlord or Tenant fails to propose a Fair Market


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Rental Value at such time, and then fails to submit a Fair Market Rental Value Proposal within seven (7) Business Days after receipt of the other party’s Fair Market Rental Value Proposal, then the Fair Market Rental Value for the Renewal Term proposed by the responding party shall prevail. If the higher of such proposals is not more than one hundred five percent (105%) of the lower, then the Fair Market Rental Value shall be the average of the two. Otherwise, the dispute shall be resolved in accordance with the remainder of this subparagraph (b). Within ten (10) days after the expiration of the foregoing seven (7) Business Day period, Landlord and Tenant shall each appoint one (1) Appraiser (as hereinafter defined). If either party fails to timely select an Appraiser, and then fails to do so within seven (7) Business Days after receipt of written notice from the other of such failure, then the Fair Market Rental Value for the Renewal Term proposed by the party that selected an Appraiser shall prevail. If each party timely selects an Appraiser, then the two Appraisers shall then have fifteen (15) days after the appointment of the second Appraiser in which to determine whether the Landlord’s or the Tenant’s Fair Market Rental Value Proposal should be utilized. In the event that the two Appraisers are unable to agree on either the Landlord’s or the Tenant’s Fair Market Rental Value Proposal within such fifteen (15) day period, then the two Appraisers shall pick a third Appraiser within seven (7) Business Days after the expiration of such fifteen (15) day period. If the three (3) Appraisers, within fifteen (15) days thereafter, cannot unanimously agree upon either the Landlord’s or the Tenant’s proposed Fair Market Rental Value, then each of the three (3) Appraisers shall immediately select one of the two proposals, and the selection of either the Landlord’s or the Tenant’s Fair Market Rental Value Proposal by any two (2) of the three (3) Appraisers shall be final and conclusive for all purposes in determining Fair Market Rental Value. The parties understand, stipulate and agree that there will be no compromise, modification or averaging of the Landlord’s and Tenant’s Fair Market Rental Value Proposals once the initial Appraisers are selected, and the Appraisers must select one or the other, and that the proposed Fair Market Rental Value selected by the foregoing arbitration procedure shall be final, binding, conclusive and effective on Landlord and Tenant for purposes under this Lease, and same shall not be subject to judicial review, mediation or any other legal proceeding. As used herein, the term “Appraiser” shall mean an independent, MAI designated, and Statelicensed real estate Appraiser with at least ten (10) years’ experience appraising similar buildings in the State. The fees of the third Appraiser, if applicable, shall be shared equally by Landlord and Tenant. The fees of each party’s respective Appraiser, if applicable, shall be borne by that party.


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c. For purposes of this Paragraph 3, “Fair Market Rental Value” means the annual amount per rentable square foot that a willing, comparable tenant would pay and a willing comparable landlord of a comparable building (in terms of location, age, existing improvements, services provided, and other such relevant factors), in the county in which the Leased Premises are located, would accept at “arm’s length”, giving appropriate consideration to the credit of the tenant, free rent and other inducements then being offered for comparable space, length of renewal lease term, size, quality and location of premises being renewed, tenant improvement allowances, if any, and other generally applicable terms and conditions of a renewal tenancy for comparable space.

5. Basic Rent Schedule for Initial Term. Attached to the Lease as Schedule I is a schedule of the annual Basic Rent payable by Tenant on each Basic Rent Payment Date throughout the initial Term of this Lease, as may be increased as set forth in this Exhibit D.


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SCHEDULE I


Minimum Annual Basic Rent

Annual Basic Rent once 80% of the AVF 2019 Sales Level achieved



Annual Basic Rent once 95% of theAVF 2019 Sales Level achieved


$762,959.02 $813,822.95 $864,686.88 $915,550.82 $966,414.75 $1,017,278.69


For clarity, once Basic Rent has increased based on the AVF 2019 Sales Level, such increase is permanent until Basic Rent is further increased in accordance with this Lease.


EXHIBIT “6-D” Abridged Lease Agreement 4375 28th Street SE, Kentwood, Michigan

4273 Alpine Avenue NW, Comstock Park, Michigan

6500 East 14 Mile Road, Warren, Michigan



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MASTER LEASE AGREEMENT

by and between



as LANDLORD

and



as TENANT

Premises: 4375 28th Street SE, Kentwood, Michigan4273 Alpine Avenue NW, Comstock Park, Michigan6500 East 14 Mile Road, Warren, Michigan



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“AVF 2019 Sales Level” means annual Gross Sales in the amount of Seventy Million One Hundred Forty-Two Thousand One Hundred Thirty-three and 00/100 Dollars ($70,142,133.00).








“Condominium Act” shall mean the Michigan Condominium Act, Act 59 of the Michigan Public Acts of 1978, as amended, and as it may be further amended from time to time, and all regulations with respect thereto, now or hereafter promulgated.

“Condominium Documents” shall collectively mean, with respect to the Individual Premises located at 4273 Alpine Avenue NW, Comstock Park, Michigan (the “Alpine Premises”), (i) the Master Deed, Alpine Market Place Commercial Site Condominium, dated December 28, 1998, recorded on December 29, 1998 in the records of Kent County, Michigan, recorded at Liber 4559, Page 1288, as amended by that certain Amendment to Master Deed of Alpine Market Place Commercial Site Condominium, dated February 18, 1999, recorded on February 23, 1999 in the records of Kent County, Michigan at Liber 4614, Page 297; (ii) By-laws of the Alpine Market Place Commercial Site Condominium; and (iii) Articles of Incorporation for the Alpine Market Place Commercial Site Condominium Association, filed December 28, 1998 with the Department of Licensing and Regulatory Affairs of the State of Michigan, and any and all amendments, modifications, restatements and/or supplements thereto, together with other documentation related to the proper formation and operation of the condominium regime established at the Alpine Premises under the laws of the State of Michigan.

“Consent Required Alteration” is (i) any Alteration (other than a Structural Alteration) or series of related Alterations for which the cost is reasonably expected to exceed $100,000.00; or (ii) any Structural Alteration. Notwithstanding the foregoing, the installation, maintenance and/or repair of cable, telephone or internet lines (other than a Structural Alteration) for which the cost


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(b) Tenant shall have two (2) options (each, an “Option”) to extend this Lease for an additional period of five (5) years each (each, a “Renewal Term”). At least twenty-seven (27) months prior to the Expiration Date or expiration of the first Renewal Term (assuming Tenant exercises its first Option), Tenant shall notify Landlord in writing that Tenant is electing to extend this Lease for the Leased Premises for a Renewal Term. The Basic Rent for each Renewal Term shall be determined in accordance with Exhibit D. Any such extension of the Term shall be subject to all of the provisions of this Lease (except that Tenant shall not have the right to any additional Renewal Terms other than the two (2) Renewal Terms provided in this Paragraph 5(b) and this Lease shall automatically expire at the expiration of the second (2nd)Renewal Term, unless otherwise agreed to in writing between Landlord and Tenant).

(c) If Tenant exercises its option pursuant to Paragraph 5(b) not to extend or further extend the Term, then Landlord shall have the right during the remainder of the Term then in effect and, in any event, Landlord shall have the right during the last year of the Term, to (i) advertise the availability of the Leased Premises for sale or reletting and to erect upon the Leased Premises signs indicating such availability and (ii) show the Leased Premises to prospective purchasers or tenants or their agents at such reasonable times as Landlord may select upon prior notice to Tenant.

6. Basic Rent.

(a) Tenant shall pay to Landlord for the Leased Premises during the Term, annual rent, on a quarterly basis, in the amounts (“Basic Rent”) and on the dates (each, a “Basic Rent Payment Date”) provided for in Exhibit D and Schedule I. Each payment of Basic Rent shallbe made to Landlord (or one or more other Persons as Landlord may designate) (but not more than three (3) Persons)) in Federal Funds on each Basic Rent Payment Date, without offset, abatement or deduction, pursuant to wire transfer instructions delivered to Tenant from time to time.

(b) Not later than forty-five (45) days after each calendar quarter during the Term, Tenant shall prepare and deliver to Landlord a statement of Tenant’s Gross Sales certified by Tenant’s chief financial officer for such calendar quarter (“Gross Sales Statement”). Based upon each Gross Sales Statement, Landlord shall annualize the Gross Sales and notify Tenant in writing of the Basic Rent due for the next succeeding calendar quarter in accordance with Exhibit D and Schedule I attached hereto. In addition, within thirty (30) days after the expiration of each calendar year, Tenant shall prepare and deliver to Landlord a statement of Tenant’s Gross Sales during such calendar year certified to be correct by Tenant’s chief financial officer, and if requested by Landlord, an independent certified public accountant, which statement shall be accompanied with a check for any additional Basic Rent payment required pursuant to Exhibit D and Schedule I.

(a) Tenant shall keep in the Leased Premises, at its corporate offices, or at some other location approved by Landlord in writing, an accurate set of books, which may be electronic, reflecting Tenant’s Gross Sales and shall preserve all records related to all sales transactions and returns for sales made at the Leased Premises, shipping records, and such other records as may be needed for an effective audit of Tenant’s Gross Sales. Such records shall be retained for a period of at least 36 months after the end of the calendar year to which they relate, or if Landlord


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shall have begun a special audit in accordance with Paragraph 6(d) for such longer period as may be required to complete such special audit. All such books and records shall be subject to inspection and audit by Landlord at all reasonable times and upon reasonable notice.

(b) No more than once per calendar year, or upon a showing of reasonable cause, Landlord shall have the right to have auditors of Landlord’s choice make a special audit of all books and records, wherever located, pertaining to Tenant’s Gross Sales. Notwithstanding the foregoing, Landlord shall have the right to such special audit any time upon an Event of Default. If Tenant’s Gross Sales, as so determined, exceed the figures submitted by Tenant by more than two percent (2%), or contain any willful inaccuracies, then Tenant shall pay the cost of such audit. Tenant shall promptly pay to Landlord any deficiency in Basic Rent and Landlord shall promptly credit Tenant with any overpayment in Basic Rent, as the case may be, which is established by such special audit. The acceptance by Landlord of payments of Basic Rent shall be without prejudice to Landlord’s right to examine Tenant’s books and records.

7. Additional Rent.


(i) except as otherwise specifically provided herein, all Costs of Tenant, Landlord and any other Persons specifically referenced herein which are incurred in connection or associated with (A) the ownership, use, non-use, occupancy, monitoring, possession, operation, condition, design, construction, maintenance, alteration, repair or restoration of the Leased Premises pursuant to the provisions of this Lease, (B) the performance of any of Tenant’s obligations under this Lease, (C) the adjustment, settlement or compromise of any insurance claims and/or condemnation awards involving or arising from any Individual Premises, (D) the prosecution, defense or settlement of any litigation involving or arising from any IndividualPremises or this Lease in which it is the prevailing party for matters occurring after the Commencement Date, except as set forth in Paragraph 35(r) below and except for those matters arising solely from Landlord's financing, purchase, sale or transfer of the Leased Premises, (E)the exercise or enforcement by Landlord, its successors and assigns, of any of its rights under this Lease, except as set forth in Paragraph 35(r), (F) any amendment, supplement, modification or termination of this Lease requested by Tenant or necessitated by any action of Tenant, including without limitation, any default by Tenant in the performance of any of its obligations under this Lease, (G) any act undertaken by Landlord (or its counsel) at the request of Tenant, any act of Landlord performed on behalf of Tenant, (H) Tenant's failure to act promptly in an emergency situation, (I) out-of-pocket expenses and fees associated with wire transfers of Rent payments, and (J) all other items specifically required to be paid by Tenant under this Lease;

(ii) after the date all or any portion of any installment of Basic Rent is due and not paid within three (3) Business Days after the applicable Basic Rent Payment Date, an amount (the “Late Charge”) equal to five percent (5%) of the amount of such unpaid installment or portion thereof to reimburse Landlord for its cost and inconvenience incurred as a result of Tenant’s delinquency; provided, however, Landlord shall provide written or oral notice to Tenant and Guarantor of any delinquency during the first Lease Year before charging the Late Charge and if such Basic Rent is not paid within two (2) days after such notice the Late Charge will


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become due and payable; it being acknowledged that an e-mail or a phone call to an officer of Tenant and Guarantor shall be sufficient notice under this Paragraph 7(a)(ii). Tenant acknowledges that the damages to and costs incurred by Landlord resulting from Tenant’s late payment of Basic Rent would be difficult, if not impossible, to ascertain with any accuracy, and that the five percent (5%) charge represents Landlord and Tenant’s efforts to approximate such potential damages and costs;







(b) This Lease and the rights of Landlord and the obligations of Tenant hereunder shall not be affected by any event or for any reason or cause whatsoever foreseen or unforeseen. The previous sentence notwithstanding, whenever a period of time is herein prescribed for action to be taken by Landlord or Tenant, Landlord or Tenant shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time, any cause or causes beyond Landlord’s or Tenant's reasonable control and which by the exercise of due diligence Landlord or Tenant, as applicable, is unable, wholly or in part, to prevent, which may include,


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without limitation, acts of God, labor disputes, civil commotion or riot, war, exercise of police or governmental power permitting authority delays not caused directly or indirectly by Landlord, fire or other casualty event, order of a governmental authority, natural disaster, existence of any catastrophic event or similar emergency condition (including a pandemic), a declaration of a state of emergency by the government of the United States or the state, county or municipality where the Leased Premises is located, nuclear or atomic disaster (collectively "Force Majeure"). Notwithstanding the foregoing, no Force Majeure shall relieve Tenant of its Monetary Obligations due under this Lease; provided, however, fire or other casualty, act of God or natural disaster may delay payment of Monetary Obligations only to the extent reasonably necessary to deal with such fire or other casualty, act of God or natural disaster and provided, further, that any Costs incurred by Landlord in connection with such delay shall be paid by Tenant upon demand therefor.




(a) Tenant shall pay and discharge when due: all taxes (including, without limitation, real and personal property, franchise, sales, use, gross receipts and rent and occupancy taxes and other taxes, if any, that may be based on the rental under this Lease); all charges for any easement or agreement maintained for the benefit of any Individual Premises, including, without limitation, and the Easement Agreements; all assessments (including special assessments and any other charges or claims imposed by a governmental or municipal entity) and levies; all fines, penalties and other costs in connection with Tenant’s noncompliance with any applicable Law or Legal Requirements; all permit, inspection and license fees; all rents and charges for water, sewer, utility and communication services relating to any Individual Premises; all other public charges, whether of a like or different nature, even if unforeseen or extraordinary, imposed upon or assessed against (i) Tenant, (ii) Tenant’s interest in any Individual Premises, (iii) any Individual Premises during the Term or, (iv) Landlord as a result of or arising in respect of the acquisition, ownership, occupancy, leasing, use, possession or sale of the Leased Premisesduring the Term, any activity conducted on the Leased Premises during the Term, or the Rent (collectively, the “Impositions”); provided that nothing herein shall obligate Tenant to pay (A) income, excess profits or other taxes of Landlord (or Lender) which are determined on the basis of Landlord’s (or Lender’s) net income or net worth (unless such taxes are in lieu of or a substitute for any other tax, assessment or other charge upon or with respect to the Leased


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Premises which, if it were in effect, would be payable by Tenant under the provisions hereof or by the terms of such tax, assessment or other charge and, except for margin, excise or similar taxes to the extent expressly provided to be paid for by Tenant hereinabove), (B) any estate, inheritance, succession, gift or similar tax imposed on Landlord, (C) any transfer, conveyance or mortgage tax related to the acquisition, sale or financing of the Leased Premises by Landlord, or (D) any capital gains tax imposed on Landlord in connection with the sale of the Leased Premises to any Person. Landlord shall have the right to require Tenant to pay, together with scheduled installments of Basic Rent, the amount of the gross receipts or rent tax, if any, payable with respect to the amount of such installment of Basic Rent. If any Imposition may be paid in installments without interest or penalty, Tenant shall have the option to pay such Imposition in installments. Tenant shall be responsible to obtain all bills for the payment of Impositions and shall prepare and file all tax reports required by Governmental Authorities which relate to the Impositions. Tenant shall deliver to Landlord (1) copies of all settlements and notices pertaining to the Impositions which may be issued by any Governmental Authority within ten (10) days after Tenant’s receipt thereof, (2) receipts for payment of all taxes required to be paid by Tenant hereunder within thirty (30) days after the due date thereof provided that in each instance Tenant shall deliver such receipts at least ten (10) days prior to delinquency of such taxes, and (3) receipts for payment of all other Impositions within ten (10) days after Landlord’s request therefor. To the extent any Impositions relate to periods after the Commencement Date and are paid by Landlord prior to the Commencement Date, Tenant shall reimburse Landlord for such Impositions.

(b) Following the occurrence and during the continuance of an Event of Default, and for a reasonable period of time thereafter not to exceed twelve (12) months, Tenant shall pay to Landlord such amounts (each an “Escrow Payment”) monthly so that there shall be in an escrow account an amount sufficient to pay the Escrow Charges (as hereinafter defined) as they become due. As used herein, “Escrow Charges” means real estate taxes, assessments and, as discussed below in greater detail, tenant improvements and capital expenditures which are the obligation of Tenant under this Lease on or with respect to any Individual Premises or payments in lieu thereof. Landlord shall reasonably determine the amount of the Escrow Charges and the amount of each Escrow Payment; provided, however, that Landlord’s determination of the amount required for either or both tenant improvements or capital expenditures must be substantiated by a written property condition and recommendation report prepared by an independent and commercially reasonable third party property condition consultant possessing the requisite skills required to opine on the applicable property condition issue. The Escrow Payments may not be commingled with other funds of Landlord or other Persons and no interest thereon shall be due or payable to Tenant. Landlord shall apply the Escrow Payments to the payment of the Escrow Charges in such order or priority as Landlord shall determine or as required by Law. If at any time the Escrow Payments theretofore paid to Landlord shall be insufficient for the payment of the Escrow Charges, Tenant, within ten (10) days after Landlord’s demand therefor, shall pay the amount of the deficiency to Landlord. Tenant acknowledges and agrees that if it is required to make Escrow Payments under this Paragraph 9(b), Landlord shall have the right to deposit such funds with Lender to be applied in accordance with the terms of this Lease.



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punitive damages), penalties, Costs (including reasonable attorneys' fees and costs), causes of action, suits, claims, demands or judgments of any nature whatsoever, howsoever caused (except to the extent arising from the gross negligence or willful misconduct of an Indemnitee), without regard to the form of action and whether based on strict liability, gross negligence, negligence or any other theory of recovery at law or in equity, arising after the Commencement Date from (i) any claims arising out of (i) Landlord’s gross negligence or intentional misconduct, or (ii) Landlord’s breach of a contract to which it is a party (other than this Lease).

(c) In case any action or proceeding is brought against any Indemnitee by reason of any claim for which Tenant or Landlord is obligated to indemnify pursuant to Paragraph 10(h),Paragraph 10(i), Paragraph 15(a) or 15(b), as applicable (an “Indemnitor”), except in the event of a conflict of interest or a dispute between Indemnitee and Indemnitor, (i) Indemnitor shall retainits own counsel and defend such claim on behalf of Indemnitee (it being understood Indemnitee may employ counsel of its choice to monitor the defense of any such action, at its own expense),and (ii) the parties shall cooperate in the mutual defense of said claim including providing documents relevant to the defense of any said claim and the production of individuals for interview, deposition or testimony; and (iii) Indemnitor has authority to agree to a monetary settlement in any such matter, as it determines appropriate in its sole discretion but shall not agree to any settlement that includes injunctive relief against Indemnitee without Indemnitee’s written consent. In the event of a conflict of interest, Indemnitee shall have the right to select counsel, and the reasonable cost of such counsel shall be paid by Indemnitor.


16. Insurance.

(a) Tenant shall obtain, pay for and maintain the following insurance on or in connection with respect to each of the Individual Premises:

(i) Insurance against all risk of physical loss or damage to the Improvements and Equipment as provided under “Special Causes of Loss” form coverage, including the perils of hail, and windstorm (with no exclusion for named storm), in amounts no less than the actualreplacement cost of the Improvements and Equipment without deduction for depreciation; Suchpolicies shall contain Replacement Cost and Agreed Amount Endorsements and “Law andOrdinance” coverage (at full replacement cost for Loss to the Undamaged portion of the Building, and for both Demolition Costs and Increased Cost of Construction, for 10% of replacement cost). Such policies and endorsements shall contain deductibles not more than$50,000 per occurrence. Such policies shall name Landlord as a named insured, and Lender asmortgagee/lenders loss payee, with respect to such Individual Premises.

(ii) Commercial General Liability Insurance and Umbrella/Excess Liability Insurance, including Business Automobile Liability Insurance (including Non-Owned and Hired Automobile Liability) against claims for personal injury, bodily injury, death, accident or property damage occurring on, in or as a result of the use of each Individual Premises, in an amount not less than $1,000,000 per occurrence with Umbrella Liability coverage of not less than $9,000,000. Coverage shall also include loss attributable to elevators/escalators (if any),


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independent contractors, contractual liability and Products/Completed Operations Liability coverage. Such policies shall name Landlord as a named insured and Lender as additional insured with respect to such Individual Premises.


(iv) Employer’s liability insurance with a limit of at least $1,000,000 per accident and per disease per employee, and $1,000,000 for disease aggregate in respect of any work or operations on or about such Individual Premises.

(v) Comprehensive Boiler and Machinery/Equipment Breakdown Insurance in an amount equal to the actual replacement cost of the Improvements and all equipment, including but not limited to Equipment delineated in Exhibit B hereon and which may be carriedas part of the coverage required under clause (i) above or pursuant to a separate policy orendorsement, provided that such policy or endorsement will include coverage as required in Paragraph 16(a)(vi). If such coverage is provided pursuant to a separate Boiler and Machinery policy or endorsement, Tenant will obtain a Joint Loss Agreement. Suchpolicies shall name Landlord as a named insured and Lender as mortgagee/lenders loss payee withrespect to the each Individual Premises, and provide for no deductible in excess of $25,000 per occurrence.

(vi) Business Income/Extra Expense/Loss of Rents Insurance at limits sufficient to cover 100% of the projected gross income for a period not less than twelve (12)months from time of loss and containing an extended period of indemnity of ninety (90)days. Such policies shall name Landlord as a named insured and Lender as lenders loss payeewith respect to each Individual Premises.

(vii) During any period in which substantial Alterations at any IndividualPremises are being undertaken, builder’s risk insurance covering the total completed value, including all hard and soft costs (which shall include business interruption coverage) with respect to the Improvements being constructed, altered or repaired (on a completed value, non-reporting basis), replacement cost of work performed and equipment, supplies and materials furnished in connection with such construction, alteration or repair of Improvements or Equipment, together with such other endorsements as Landlord may reasonably require, and general liability, worker’s compensation and automobile liability insurance with respect to the Improvements being constructed, altered or repaired, in such form and in such amounts as Landlord may reasonably require. Such policies shall name Landlord as a named insured and Lender as mortgagee/lenders loss payees with respect to each Individual Premises.



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(ix) Earthquake Insurance, if any Individual Premises are located in an area with a high degree of seismic activity and the probable maximum loss (PML) or scenario expected loss (SEL) is greater than 20%, in amounts and in form and substance satisfactory to Landlord and Lender. Such polices shall name Landlord as a named insured and Lender as mortgagee/lenders loss payable.

(x) Terrorism Insurance with respect to Paragraphs 16(a)(i), (ii), (vi), and, if applicable (vii) above, for loss resulting from perils and acts of terrorism in amounts and with terms and conditions applicable to commercial property, general liability, business income, and umbrella liability insurance as required under this Paragraph 16(a). As used above, “Terrorism Insurance” shall mean insurance for acts of terror or similar acts of sabotage; provided, that, for so long as the Terrorism Risk Insurance Act of 2002, as extended and modified by the Terrorism Risk Insurance Program Authorization Act of 2015 (as the same may be further modified, amended, or extended, “TRIPRA”) (i) remains in full force and effect and (ii) continues to coverboth foreign and domestic acts of terror, the provisions of TRIPRA shall determine what is deemed to be included within this definition of “Terrorism Insurance.”

(xi) With respect to the Warren Premises only, environmental impairment liability (“EIL”) insurance policy in the form of a Pollution and Remediation Legal Liability (“PARLL”) policy with policy limits of $4,000,000 per incident and in the aggregate for Landlord and Lender, and their respective successors, assigns and/or affiliates which is listed as an additional named insured, and a deductible of $50,000 with a term of 121 months and an extended reporting period of 36 months.




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(e) Anything in this Paragraph 16 to the contrary notwithstanding, any insurance which Tenant is required to obtain pursuant to Paragraph 16(a) may be carried under a “blanket” policy or policies covering other properties of Tenant or under an “umbrella” policy or policies covering other liabilities of Tenant, as applicable; provided that, such blanket or umbrella policy or policies otherwise comply with the provisions of this Paragraph 16, and upon request, Tenant shall provide to Landlord a Statement of Values which may be reviewed annually and shall be amended to the extent determined necessary by Landlord based on revised Replacement Cost Valuations. The original or a certified copy of each such blanket or umbrella policy shall promptly be delivered to Landlord and Lender.





(ii) notwithstanding the Net Award threshold defined in Paragraph 19(a)herein or anything to the contrary contained herein, if, following a Casualty, any Individual Premises cannot be restored to substantially the same value, condition and/or character immediately prior to such casualty as a result of applicable zoning restrictions, any alterations


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shall be subject to the approval of Landlord and Lender in its sole discretion. Any Excess Insurance Proceeds not made available for the restoration may be retained and applied by Lender toward the payment of the Note or Mortgage (whether or not due and payable) in such order, priority and proportions as Lender in its sole discretion shall deem proper. “Excess Insurance Proceeds” means any insurance proceeds paid by any of the policies with respect to all risk and/or Law & Ordinance coverage not made available for restoration following a casualty due to the application of zoning restrictions; and

(iii) proceeds of insurance required under clause (i) of Paragraph 16(b) and proceeds attributable to Builder’s Risk insurance (other than its general liability coverage provisions) under clause (vi) of Paragraph 16(b) shall be payable to Landlord or Lender and applied as set forth in Paragraph 17 (Casualty and Condemnation) or, if applicable, Paragraph 18 (Termination Events). Tenant shall apply the Net Award to restoration of each IndividualPremises in accordance with the applicable provisions of this Lease unless a Termination Event shall have occurred and Tenant has given a Termination Notice.


(a) In the event of any Casualty (whether or not insured against) resulting in damage to any Individual Premises or any part thereof, except as provided in Paragraph 18 below, the Term shall nevertheless continue, Tenant shall rebuild or repair the Individual Premises in accordance with this Paragraph 17 (Casualty and Condemnation), and in accordance with Legal Requirements, and there shall be no abatement or reduction of Rent payable by Tenant hereunder for any reason, except that, if a smaller building must be constructed to comply with applicable zoning laws, there shall be a pro rata reduction in Basic Rent based on the square footage of the Improvements before the Casualty and the maximum square footage that may be rebuilt to comply with applicable zoning laws. Tenant shall give Landlord prompt notice of the occurrence of any Casualty. Landlord, Lender, and Tenant, in their discretion and upon notice to Tenant (except that Tenant shall not participate if an Event of Default has occurred and is continuing), may adjust, collect and compromise all claims under any of the insurance policies required by Paragraph 16 (Insurance) (except public liability insurance claims payable to a Person other than Tenant, Landlord or Lender) and, if an Event of Default has occurred and is continuing, to execute and deliver on behalf of Tenant all necessary proofs of loss, receipts, vouchers and releases required by the insurers. Provided that no Event of Default has occurred and is continuing, Tenant shall be entitled to participate with Landlord and Lender in any adjustment, collection and compromise of the Net Award payable in connection with a Casualty. Tenant agrees to sign, upon the reasonable request of Landlord or Lender, all such proofs of loss, receipts, vouchers and releases. If Landlord or Lender so requests, Tenant shall adjust, collect and compromise any and all such claims, and Landlord and Lender shall have the right to join with Tenant therein. Any adjustment, settlement or compromise of any such claim shall be subject to the prior written approval of Landlord and Lender, which consent shall not be unreasonably withheld, conditioned or delayed, and Landlord and Lender shall have the right to prosecute or contest, or to require Tenant to prosecute or contest, any such claim, adjustment, settlement or compromise. Each insurer is hereby authorized and directed to make payment under said policies directly to Landlord or, if required by the loan documents evidencing the Loan, to Lender instead of to Landlord and Tenant jointly, to be applied in accordance with the


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period.



(i) a failure by Tenant to pay any Monetary Obligation, within three (3) Business Days after when due regardless of the reason for such failure, subject to the last sentence of Paragraph 8(b); provided, however, that no Event of Default shall exist with respect to the first occurrence (but shall be an Event of Default with respect to any subsequent occurrences) during any twelve (12)-month period in which Tenant fails to make payment when due, until five (5) days after Landlord delivers written notice of such delinquency; provided further, Landlord shall provide written or oral notice to Tenant and Guarantor of any failure during the first Lease Year and if such Monetary Obligation is not paid within two (2) days after such notice an Event of Default shall have occurred; it being acknowledged that an e-mail or a phone call to an officer of Tenant and Guarantor shall be sufficient notice under this Paragraph 21(a)(i);

(ii) a failure by Tenant duly to perform and observe, or a violation or breach of, any other provision of this Lease not otherwise specifically mentioned in this Paragraph 21(a), which default continues beyond the date that is thirty (30) days from the date on which Tenant receives notice of such default or, if such default cannot be cured within such thirty (30) day period and delay in the exercise of a remedy would not (in Landlord’s reasonable judgment) cause a material adverse harm to Landlord or to any Individual Premises, the cure period shall be extended for the reasonable period required to cure such default so long as Tenant shall commence to cure such default within said thirty (30) day period and shall actively and diligently and in good faith proceed with and continue the curing of such default until it shall be fully cured; provided that such extended period shall not exceed ninety (90) days;

(iii) Tenant shall have abandoned any Individual Premises;


(v) a court shall enter an order, judgment or decree appointing, without the consent of Tenant, a receiver or trustee for Tenant or for any Individual Premises or approving a petition filed against Tenant which seeks relief under the bankruptcy or other similar laws of the United States, any state or any jurisdiction, and such order, judgment or decree shall remain undischarged or unstayed one hundred and twenty (120) days after it is entered;



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(vii) the estate or interest of Tenant in any Individual Premises shall be levied upon or attached in any proceeding and such estate or interest is about to be sold or transferred or such process shall not be vacated or discharged within one hundred and twenty (120) days after it is made;









(ii) Landlord may terminate Tenant’s right of possession (but not this Lease) and may repossess the Leased Premises by any available legal process without thereby releasing


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Tenant from any liability hereunder and without demand or notice of any kind to Tenant and without terminating this Lease.




(i) If Landlord exercises its remedy under Paragraphs 22(a)(i) or (ii) but not its remedy under Paragraph 22(a)(iv) (or attempts to exercise such remedy and is unsuccessful in reletting the Leased Premises) then, upon written demand from Landlord, Tenant shall pay to Landlord, as liquidated and agreed final damages for Tenant’s default and in lieu of all current damages beyond the date of such demand (it being agreed that it would be impracticable or extremely difficult to fix the actual damages), an amount equal to the Present Value of the excess, if any, of (A) all Basic Rent from the date of such demand to the date on which the Term is scheduled to expire hereunder in the absence of any earlier termination, re-entry orrepossession over (B) the then fair market rental value of the Leased Premises for the same period. Tenant shall also pay to Landlord all accrued Rent then due and unpaid, all other Monetary Obligations which are then due and unpaid, all Monetary Obligations which arise or become due by reason of such Event of Default, including any Costs of Landlord in connection with the repossession of the Leased Premises and any attempted reletting thereof, including all brokerage commissions, legal expenses, reasonable attorneys’ fees, costs of Alterations and expenses and preparation for reletting.



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(g) If any Event of Default exists, Landlord shall have the right (but no obligation) to perform any act required of Tenant hereunder and, if performance of such act requires that Landlord enter any Individual Premises, Landlord may enter such Individual Premises for such purpose.



(j) Except as otherwise provided herein, all remedies are cumulative and concurrent and no remedy is exclusive of any other remedy. Each remedy may be exercised at any time an


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Event of Default has occurred and is continuing and may be exercised from time to time, except to the extent multiple remedies for an Event of Default would make Landlord more than whole.No remedy shall be exhausted by any exercise thereof.

23. Notices.

All notices, demands, requests, consents, approvals, offers, statements and other instruments or communications required or permitted to be given pursuant to the provisions of this Lease shall be in writing and shall be deemed to have been given and received for all purposes (i) when delivered in person or (ii) one (1) Business Day after deposit with Federal Express or other reliable 24-hour delivery service, addressed to the other party at the address set forth below. Notices sent to Landlord shall be to the attention of Joshua R. Leventhal, Esq., c/o LCN Capital Partners, 888 Seventh Avenue, New York, New York 10019 and with a copy to the attention of Alyson Van Dyk, c/o Dorsey & Whitney, LLP, 50 South Sixth Street, Suite 1500, Minneapolis, Minnesota 55402.



24. Estoppel Certificate.

At any time upon not less than ten (10) days’ prior written request by either Landlord or Tenant (the “Requesting Party”) to the other party (the “Responding Party”), the Responding Party shall deliver to the Requesting Party a statement in writing, executed by an authorized officer of the Responding Party, certifying (a) that, except as otherwise specified, this Lease is unmodified and in full force and effect, (b) the dates to which Basic Rent, Additional Rent and all other Monetary Obligations have been paid, (c) that, to the knowledge of the signer of such certificate and except as otherwise specified, no default by either Landlord or Tenant exists hereunder, (d) such other matters as the Requesting Party may reasonably request, and (e) if Tenant is the Responding Party that, except as otherwise specified, there are no proceedings pending or, to the knowledge of the signer, threatened, against Tenant before or by a court or administrative agency which, if adversely decided, would materially and adversely affect the financial condition and operations of Tenant. Any such statements by the Responding Party may be relied upon by the Requesting Party, any Person whom the Requesting Party notifies the Responding Party in its request for the certificate is an intended recipient or beneficiary of the certificate, any Lender or their assignees and by any prospective purchaser or mortgagee of any of the Leased Premises. Any certificate required under this Paragraph 24 and delivered by Tenant shall state that, in the opinion of each person signing the same, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion


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EXHIBIT D

BASIC RENT PAYMENTS

1. Initial Term. Basic Rent shall be payable in advance on the first (1st) day of each quarter during the Term (each a “Basic Rent Payment Date”) and shall be a minimum of $2,896,396.00 per annum and payable quarterly commencing on the date that is thirty (30) days after the Commencement Date (the “Rent Commencement Date”) in equal quarterly installments of $724,099.00, subject to increase on a quarterly basis based upon a percentage of the AVF 2019 Sales Level set forth on Schedule I and in accordance with Paragraph 6 of the Lease.

2. On each anniversary of the Commencement Date during the initial Term, Basic Rent shall increase (i) by two and one-half percent (2.5%) of the annual Basic Rent payable for the immediately preceding quarter (in accordance with Paragraph 6 of the Lease and on Schedule I) if the AVF 2019 Sales Level has not been met, or (ii) by two percent (2.0%) of the annual Basic Rent payable for the immediately preceding quarter (in accordance with Paragraph 6 of the Lease and on Schedule I) if the AVF 2019 Sales Level has been met.




b. If Landlord and Tenant are unable to reach agreement on the Fair Market Rental Value by the Trigger Date, then within seven (7) Business Days thereafter, Landlord and Tenant shall each simultaneously submit to the other in a sealed envelope its good faith estimate of the Fair Market Rental Value for the applicable Renewal Term (each a “Fair Market Rental Value Proposal”). If either Landlord or Tenant fails to propose a Fair Market


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Rental Value at such time, and then fails to submit a Fair Market Rental Value Proposal within seven (7) Business Days after receipt of the other party’s Fair Market Rental Value Proposal, then the Fair Market Rental Value for the Renewal Term proposed by the responding party shall prevail. If the higher of such proposals is not more than one hundred five percent (105%) of the lower, then the Fair Market Rental Value shall be the average of the two. Otherwise, the dispute shall be resolved in accordance with the remainder of this subparagraph (b). Within ten (10) days after the expiration of the foregoing seven (7) Business Day period, Landlord and Tenant shall each appoint one (1) Appraiser (as hereinafter defined). If either party fails to timely select an Appraiser, and then fails to do so within seven (7) Business Days after receipt of written notice from the other of such failure, then the Fair Market Rental Value for the Renewal Term proposed by the party that selected an Appraiser shall prevail. If each party timely selects an Appraiser, then the two Appraisers shall then have fifteen (15) days after the appointment of the second Appraiser in which to determine whether the Landlord’s or the Tenant’s Fair Market Rental Value Proposal should be utilized. In the event that the two Appraisers are unable to agree on either the Landlord’s or the Tenant’s Fair Market Rental Value Proposal within such fifteen (15) day period, then the two Appraisers shall pick a third Appraiser within seven (7) Business Days after the expiration of such fifteen (15) day period. If the three (3) Appraisers, within fifteen (15) days thereafter, cannot unanimously agree upon either the Landlord’s or the Tenant’s proposed Fair Market Rental Value, then each of the three (3) Appraisers shall immediately select one of the two proposals, and the selection of either the Landlord’s or the Tenant’s Fair Market Rental Value Proposal by any two (2) of the three (3) Appraisers shall be final and conclusive for all purposes in determining Fair Market Rental Value. The parties understand, stipulate and agree that there will be no compromise, modification or averaging of the Landlord’s and Tenant’s Fair Market Rental Value Proposals once the initial Appraisers are selected, and the Appraisers must select one or the other, and that the proposed Fair Market Rental Value selected by the foregoing arbitration procedure shall be final, binding, conclusive and effective on Landlord and Tenant for purposes under this Lease, and same shall not be subject to judicial review, mediation or any other legal proceeding. As used herein, the term “Appraiser” shall mean an independent, MAI designated, and State licensed real estate Appraiser with at least ten (10) years’ experience appraising similar buildings in the State. The fees of the third Appraiser, if applicable, shall be shared equally by Landlord and Tenant. The fees of each party’s respective Appraiser, if applicable, shall be borne by that party.


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c. For purposes of this Paragraph 3, “Fair Market Rental Value” means the annual amount per rentable square foot that a willing, comparable tenant would pay and a willing comparable landlord of a comparable building (in terms of location, age, existing improvements, services provided, and other such relevant factors), in the county in which the Leased Premises are located, would accept at “arm’s length”, giving appropriate consideration to the credit of the tenant, free rent and other inducements then being offered for comparable space, length of renewal lease term, size, quality and location of premises being renewed, tenant improvement allowances, if any, and other generally applicable terms and conditions of a renewal tenancy for comparable space.

5. Basic Rent Schedule for Initial Term. Attached to the Lease as Schedule I is a schedule of the annual Basic Rent payable by Tenant on each Basic Rent Payment Date throughout the initial Term of this Lease, as may be increased as set forth in this Exhibit D.


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SCHEDULE I


Minimum Annual Basic Rent



Annual Basic Rent once90% of the AVF 2019 Sales Level achieved



$2,896,396.00 $3,089,489.06 $3,282,582.13 $3,475,675.20 $3,668,768.26 $3,861,861.33


For clarity, once Basic Rent has increased based on the AVF 2019 Sales Level, such increase is permanent until Basic Rent is further increased in accordance with this Lease.

APPLICABLE RENT REDUCTION PERCENTAGE

Warren, MI

Kentwood (Grand Rapids),

MIComstock Park,

MI Total

49% 23% 28% 100.00%


EXHIBIT “6-E” Termination Notices


LCN Capital Partners (USA) LCN Capital Partners (EUROPE) 888 Seventh Avenue, 4th Floor 43 avenue John F. Kennedy New York, NY 10019 USA L-1855 Luxembourg +1 (212) 201 4076 PHONE +352 26 00 56 51 PHONE +1 (212) 517 6179 E-FAX

January 6, 2021

VIA OVERNIGHT FEDERAL EXPRESS Jeff Love Loves Furniture Inc. U.S. Assets, Inc. 1601 Elm Street, Suite 4210 Dallas, Texas 75201 Sara Toner, Esq. Richards Layton & Finger P.A. One Rodney Square 920 North King Street Wilmington, Delaware 19801

Mack Peters Loves Furniture Inc., CEO 32301 Woodward Avenue Royal Oak, Michigan 48073

Re: Notice of Event of Default – Lease Agreement dated October 1, 2020 (the “Lease”) between LCN AVF Warren (MI) LLC (“Landlord”) and Loves Furniture Inc. (“Tenant”) for the premises located at 6500 East 14 Mile Road, Warren, Michigan, as more particularly described in the Lease (Capitalized terms used in this notice and not otherwise defined shall have the meanings set forth in the Lease.)

Dear Tenant:

Landlord hereby gives notice to Tenant that Events of Default pursuant to Paragraph 21(a)(iv)(E) and Paragraph 21(a)(ix) of the Lease have occurred (collectively, the “Existing Event of Default”).

Accordingly, you are advised that Landlord hereby terminates the Lease effective immediately as of January 6, 2021 pursuant to Paragraph 22(a)(i) of the Lease. Tenant must immediately surrender the Premises pursuant to Paragraph 22(a)(i) of the Lease and in accordance with Paragraph 25 of the Lease. If Tenant fails to so surrender, Tenant shall be in holdover and liable for Holdover Rent.

In addition, this Notice shall constitute Tenant’s second notice pursuant to Paragraph 21(a)(i) and its notice pursuant to Paragraph 7(a)(ii). Tenant has not paid Basic Rent with interest at the Default Rate within five (5) days after that certain notice dated November 6, 2020 and delivered to Tenant and Guarantor on November 9, 2020. Consequently, an Event of Default pursuant to Paragraph 21(a)(i) will occur unless Tenant pays, within two (2) days after the date of this Notice the following:


January 6, 2021 Page 2

1. Basic Rent in the amount of $1,192,460.23 (i.e., $482,426.17 for unpaid quarterly Basic Rent due October 1, 2020 [the “Q4 2020 Basic Rent”] and $710,034.06 for quarterly Basic Rent due January 1, 2021 [the “Q1 2021 Basic Rent”]);

2. Interest at the Default Rate in the amount of $13,917.83 (i.e., interest for the months of October, November and December 2020); and

3. The Late Charge pursuant to Paragraph 7(a)(ii) in the amount of $35,501.70 as the Late Charge for the Q4 2020 Basic Rent.

Further, if the Q1 2021 Basic Rent is not received by Landlord by January 6, 2021, the Late Charge for the Q1 2021 Basic Rent in the amount of $35,501.70 (the “Q1 2021 Late Charge”) will become due to Landlord. This notice shall serve as Tenant’s notice pursuant to Paragraph 7(a)(ii) that Landlord will charge Tenant the Q1 2021 Late Charge if the Q1 2021 Basic Rent is not received by Landlord within two (2) afte the date of this Notice, on or before January 8, 2021.

Any acceptance of any partial payment by Landlord with respect to amounts due under the Lease will not constitute an accord and satisfaction or a release or waiver of any payment or other obligations of Tenant under the Lease. Landlord reserves the right to exercise its additional rights and remedies under the Lease and applicable law with respect to the Existing Event of Default or any other existing or future Event of Default or any other default.

Nothing contained herein shall constitute a waiver, release, modification or limitation of the Existing Event of Default, any other Event of Default, or any default, whether now existing or hereafter arising, or any of Landlord’s rights or remedies under the Lease or applicable law. Any delay by Landlord in exercising any or all of its rights or remedies with respect to the Existing Event of Default or with respect to any other existing or future Event of Default or default shall not constitute, and any future delay shall not constitute, and no such delay may be construed as: (i) a consent to, or waiver or modification of, any term, condition, representation or covenant in the Lease, (ii) a waiver or modification of any rights or remedies with respect to the Existing Event of Default or any other Event of Default or any other default; or (iii) a course of conduct on the part of Landlord on which Tenant or anyone else may rely at any time, and none of the foregoing shall prejudice or otherwise impair the ability of Landlord to exercise its rights and remedies now or in the future. Further, any single or partial exercise by Landlord of any of its rights or remedies shall not preclude any other or further exercise by Landlord of any of its rights or remedies under the Lease or applicable law.

This letter supersedes any oral communications relating to the Existing Event of Default. Time is of the essence.



Sincerely,

LANDLORD:

LCN AVF WARREN (MI) LLC, a Delaware limited liability company

By: ____________________________ Name: Bryan York Colwell Its: Vice President

cc: Edward V. LaPuma (LCN Partners) (via Email @ [email protected]) Thomas R. Wall (LCN Partners) (via Email @ [email protected]) Jared P. Ciejek (LCN Partners) (via Email @ [email protected]) Maxwell A. Eliot (LCN Partners) (via Email @ [email protected]) Alyson Van Dyk (Dorsey & Whitney) (via Email @ [email protected])


mailto:[email protected]






January 6, 2021



Re: Notice of Event of Default – Lease Agreement dated October 1, 2020 (the “Lease”) between LCN AVF Warren (MI) LLC (“Landlord”) and Loves Furniture Inc. (“Tenant”) for the premises located at 6440 East 14 Mile Road, Warren, Michigan, as more particularly described in the Lease (Capitalized terms used in this notice and not otherwise defined shall have the meanings set forth in the Lease.)

Dear Tenant:



In addition, this Notice shall constitute Tenant’s second notice pursuant to Paragraph 21(a)(i) and its notice pursuant to Paragraph 7(a)(ii). Tenant has not paid Basic Rent with interest at the Default Rate within five (5) days after that certain notice dated November 6, 2020 and delivered to Tenant and Guarantor on November 9, 2020. Consequently, an Event of Default pursuant to Paragraph 21(a)(i) will occur unless Tenant pays, within two (2) days after the date of this Notice the following:



Sincerely,

LANDLORD:











January 6, 2021



Re: Notice of Event of Default – Lease Agreement dated October 1, 2020 (the “Lease”) between LCN AVF Dearborn (MI) LLC (“Landlord”) and Loves Furniture Inc. (“Tenant”) for the premises located at 15071 Market Drive, Dearborn, Michigan, as more particularly described in the Lease (Capitalized terms used in this notice and not otherwise defined shall have the meanings set forth in the Lease.)

Dear Tenant:



In addition, this Notice shall constitute Tenant’s second notice pursuant to Paragraph 21(a)(i) and its notice pursuant to Paragraph 7(a)(ii). Tenant has not paid Basic Rent with interest at the Default Rate within five (5) days after that certain notice dated November 6, 2020 and delivered to Tenant and Guarantor on November 9, 2020. Consequently, an Event of Default


January 6, 2021 Page 2 pursuant to Paragraph 21(a)(i) will occur unless Tenant pays, within two (2) days after the date of this Notice the following:

1. Basic Rent in the amount of $320,336.13 (i.e., $129,596.38 for unpaid quarterly Basic Rent due October 1, 2020 [the “Q4 2020 Basic Rent”] and $190,739.75 for quarterly Basic Rent due January 1, 2021 [the “Q1 2021 Basic Rent”]);









Sincerely,

LANDLORD:

LCN AVF DEARBORN (MI) LLC, a Delaware limited liability company










January 6, 2021



Re: Notice of Event of Default – Master Lease Agreement dated October 1, 2020 (the “Lease”) between LCN AVF Warren (MI) LLC (“Landlord”) and Loves Furniture Inc. (“Tenant”) for the premises located at 437 28th Street SE, Kentwood, Michigan, 4273 Alpine Avenue NW, Comstock Park, Michigan, and 6500 East 14 Mile Road, Warren, Michigan, as more particularly described in the Lease (Capitalized terms used in this notice and not otherwise defined shall have the meanings set forth in the Lease.)

Dear Tenant:



In addition, this Notice shall constitute Tenant’s second notice pursuant to Paragraph 21(a)(i) and its notice pursuant to Paragraph 7(a)(ii). Tenant has not paid Basic Rent with interest at the Default Rate within five (5) days after that certain notice dated November 6, 2020 and delivered to Tenant and Guarantor on November 9, 2020. Consequently, an Event of Default


January 6, 2021 Page 2 pursuant to Paragraph 21(a)(i) will occur unless Tenant pays, within two (2) days after the date of this Notice the following:










Sincerely,

LANDLORD:








