What is the relationship between the Collateral Assignment and the Lease Agreement for an Azal Coffee franchise?

[Item 22: CONTRACTS]

NOW THEREFORE, it is hereby agreed as follows:

• 1. Collateral Assignment. Franchisee hereby assigns to Franchisor all of Franchisee's right, title, and interest in and to the Lease, including any and all rights or options of Franchisee to extend, renew, or purchase the leased property through a right of first refusal or otherwise upon the occurrence of any of the following:
• A. Termination of Franchise Agreement. Upon termination or expiration without renewal of the Franchise Agreement, Franchisor shall have the option to accept the assignment of the Lease pursuant to this Collateral Assignment of Lease by giving the notice prescribed by this Collateral Assignment of Lease, in which case it is agreed the Lease shall remain in effect as to Franchisor.
• B. Termination of Real Estate Lease. Upon termination of the Lease as to Franchisee or termination of Franchisee's possession rights under the Lease, whether by Franchisee's default under Lease or otherwise, Franchisor shall have the option to accept the assignment of the Lease pursuant to this Collateral Assignment of Lease by giving the notice prescribed by this Collateral Assignment of Lease, in which case it is agreed the Lease shall remain in effect as to Franchisor.
• C. Franchisee's Right to Assign. At Franchisee's discretion, Franchisee may assign Lease to Franchisor, and Franchisor may accept such assignment, at any time.
• 1. Effect of Assignment. Upon Franchisor's exercise of its option to take assignment of the Lease:
• A. Franchisee shall remain liable under the provisions of the Lease, including without limitation, that Franchisee shall remain liable for any amounts owing, or any other default occurring, prior to the effective date of assignment. Franchisor shall not be responsible or liable for any liability of Franchisee under the Lease, nor shall the exercise of any of Franchisor's options to take assignment of the Lease be contingent or conditioned upon Franchisor curing any default or breach of the Lease by Franchisee.
• B. Franchisor shall succeed to all of Franchisee's rights, options, and obligations under the Lease commencing with the effective date of the assignment and shall have

[Item 22: CONTRACTS]

8. Miscellaneous.

• A. Use of Real Estate. Landlord hereby agrees to and acknowledges Franchisee's right to use and display Franchisor's Marks as that term is used in the Franchise Agreement, subject only to any limitations imposed by Franchisor and any local, state or federal law. Landlord agrees that it will not limit Franchisee's right to use Franchisor Trademarks. Landlord further agrees to and acknowledges that the real estate subject to the Real Estate Lease shall be used solely for the operation of an Azal Coffee. Landlord agrees to notify Franchisor in the event that Franchisee begins to use real estate in any other manner and Landlord shall consider such use as an event of default.
• D.

New Real Estate Lease.

It is hereby agreed that if the Lease is terminated or expires without renewal, and the Franchisee and Landlord enter into a new lease arrangement, any such new real estate lease shall be deemed to be the Lease for purposes of this Collateral Assignment of Lease thereby making it fully applicable to the new lease.

Source: Item 22 — CONTRACTS (FDD page 51)