ASSIGNMENT AND ASSUMPTION OF LEASE AND GUARANTY

 

          ASSIGNMENT AND ASSUMPTION OF LEASE AND GUARANTY

                                

       THIS    ASSIGNMENT   AND   ASSUMPTION   OF   LEASE   AND   GUARANTY

("Assignment")   is made and entered into this 22 day   of   December,

2005   by and among SILVER CAPITAL NET LEASE FUND I, LLC, a Virginia

limited liability company ("Assignor") and AEI INCOME & GROWTH FUND

25   LLC,   a   Delaware limited liability company, as to an undivided

sixty (60.0%) percent interest as a tenant in common, and AEI   FUND

MANAGEMENT XVII, INC., a Minnesota corporation, as to an   undivided

forty   (40.0%)   percent interest as a tenant   in   common   (together

collectively referred to as "Assignee").

 

                             RECITALS

 

      WHEREAS,   Gart   Bros.   Sporting   Goods   Company,   a   Colorado

corporation   (collectively   "Tenant")   is   the   tenant   under   that

certain lease, dated as of December 10, 2001 (as the same may   have

been   modified,   supplemented, amended or assigned,   the   "Lease"),

between   Edgemark   Development LLC, a   Colorado   limited   liability

company   ("Original   Landlord") and Tenant and   pursuant   to   which

Lease,   Tenant leases that certain premises described on Exhibit   A

attached   hereto   and   incorporated herein by   this   reference,   in

Sedgwick County, Kansas (the "Premises").

 

      WHEREAS,   Gart   Sports Company ("Guarantor") has   executed   a

Unconditional   Guaranty   of   Lease dated   December   10,   2001   (the

"Guaranty");

 

     WHEREAS,   a   Short Form Memorandum of Lease   was   recorded   on

March   12,   2002    in Deed Book 2399, page 0916,   in   the   Sedgwick

County Recorder's Office;

    

     WHEREAS,    Edgemark   Development   LLC,   a    Colorado    limited

liability   (predecessor   to the Landlord)   assigned   the   Lease   to

Sports   Wichita   LLC, a Kansas limited liability   company   by   that

Assignment and Assumption of Lease dated January 22, 2002;

    

     WHEREAS,   Original Landlord conveyed the Premises to   Assignor

on   July 1, 2003 in that certain Special Warranty Deed recorded   on

July   2, 2003 in Deed Book 2728, page 3492, in the Sedgwick   County

Recorder's   Office,   and assigned the Lease   to   Assignor   by   that

Assignment and Assumption of Lease dated July 1, 2003.

 

      WHEREAS,   on   the   date   hereof, Assignor   is   conveying   the

Premises to Assignee pursuant to the terms and conditions   of   that

certain   Agreement   of   Purchase and Sale   Agreement   dated   as   of

December___,   2005   between   Assignor,   as   Seller,   and   AEI   Fund

Management,    Inc.    (predecessor-in-interest   to    Assignee),    as

Purchaser   (as   subsequently   amended, collectively   the   "Purchase

Agreement").

 

      WHEREAS,   in   connection with Assignor's   conveyance   of   the

Premises, Assignor desires to assign its right, title and   interest

in   and   to   the   Lease and the Guaranty to Assignee   and   Assignee

desires   to   accept   the assignment thereof and   assume   Assignor's

right, title and interest in and to the Lease and the Guaranty.

 

     NOW, THEREFORE, for good and valuable consideration, the

receipt and sufficiency of which is hereby acknowledged, Assignor

and Assignee agree as of the date hereof (the "Effective Date"), as

follows:

 

 

     1.    As of the Effective Date, Assignor hereby gives, grants,

          bargains, sells, conveys, transfers and sets over unto Assignee,

          its successors and assigns, all of Assignor's right, title and

          interest in and to the Lease and the Guaranty.

 

     2.    Assignee hereby accepts the foregoing assignment, and hereby

          assumes and agrees to be bound by and perform all of Assignor's

          obligations and liabilities to be performed and/or occurring

          under the Lease or the Guaranty on or after the Effective Date.

 

     3.    Assignor   hereby agrees to indemnify, defend   and   hold

          Assignee harmless from any liability, loss, cost or expense

          arising out of a failure to perform the obligations of Landlord

          under the Lease accruing prior to the Effective Date. Assignee

          hereby agrees to indemnify, defend and hold Assignor harmless

          from any liability, loss, cost or expense arising out of a

          failure to perform the obligations of Landlord under the Lease

          accruing from and after the Effective Date.

 

     4.    Assignee hereby agrees that Assignor may, at Assignor's

          election and expense, proceed at law or equity to collect any

          delinquent rents accruing under the Lease prior to the Effective

          Date.   Assignor hereby agrees that Assignee shall have no

          obligation to collect any rent due prior to the Effective Date

          under the Lease; provided, however, that in the event Assignee is

          paid rent from a tenant that has delinquent rent accruing prior

          to the Effective Date, and such payment is in excess of current

          rent due and payable under the Lease and any collection costs

          incurred by Assignee to collect such rents, then Assignee agrees

          to pay such excess amount to Assignor as soon as reasonably

          practicable after the date of receipt by Assignee.   In the event

          that Assignor is paid any rents after the Effective Date,

          Assignor agrees to pay such to Assignee as soon as reasonably

          practicable after the date of receipt by Assignor.

 

      5.    If any action is instituted by Assignor or Assignee for the

          purpose of enforcing or interpreting any provision of this

          Assignment, the prevailing party in such action shall be entitled

          to its reasonable attorneys' fees, costs and other expenses,

          provided, however, there shall be no prevailing party in a

          pretrial motion, voluntary dismissal, favorable settlement or

          otherwise, other than entry of a final judgment and such fees,

          costs and expenses may be recovered in the same action or in a

          separate proceeding.

 

     6.    This   Assignment   shall be governed   and   construed   in

          accordance with the laws of the State of Kansas.

 

     7.    This Assignment shall be binding on the parties hereto and

          their respective successors and assigns.

 

    

     8.    This Agreement may be executed in several counterparts, each

          of which shall be deemed an original, and all of which together

          shall constitute one and the same instrument.

 

 

     IN WITNESS WHEREOF, Assignor and Assignee have executed this

Assignment as of the date and year first above written.

 

 

"ASSIGNOR"

SILVER CAPITAL NET LEASE FUND I,

 

LLC, a Virginia limited liability company

 

 

                                    By:   Silver Capital Net   Lease

                                   Fund   Manager, LLC, a Virginia

                                   limited    liability    company,

                                   Manager

                                   

                                   By:   Silver   Capital,   LLC,   a

                                        Delaware limited   liability

                                        company, Manager

                                  

                                    By:   /s/ Larry D Silver

                                   Name:     Larry D Silver

                                   Title:    President/CEO

 

 

STATE OF_______________        )

                     )   SS.

COUNTY OF _____________   )

 

 

     The foregoing instrument was acknowledged before me this ___

day of   December, 2005, by ______________________, of Manager   of

Silver   Capital   Net Lease Fund I, a Virginia   limited   liability

company, on behalf of the company.

 

WITNESS my hand and official seal.

 

 

                                                        Signature

(Seal)

                                       Notary Public

 

           "ASSIGNEE"                AEI INCOME & GROWTH   FUND   25 LLC,

                                    a Delaware limited liability company

                             

                                    By:   AEI Fund Management XXI, Inc.,

                                    a    Minnesota   corporation,    its

                                    Managing Member

                         

                                    By:   /s/ Robert P Johnson

                                    Name:     Robert P Johnson

                                    Title:    President

 

 

STATE OF MINNESOTA        )

                         ) ss.

COUNTY OF RAMSEY          )

 

The   foregoing   was   acknowledged before   me   this   ____   day   of

December,   2005,   by   Robert P Johnson, in his   capacity   as   the

President    of   AEI    Fund   Management   XXI,   Inc.,   a   Minnesota

corporation, the Managing Member of AEI Income & Growth   Fund   25

LLC,   a Delaware limited liability company, who acknowledged   the

execution of the foregoing instrument to be the voluntary act and

deed   of   said corporation by authority of its board of directors

on behalf of the company.

 

[Seal]                                 /s/ Marni J Lattimore

                              Print Name: Marni J Lattimore

                              My Commission Expires: 1-31-10

 

 

                              AEI   FUND MANAGEMENT XVII, INC.

                               a Minnesota corporation

                        

                        

                              By:   /s/ Robert P Johnson

                              Name:     Robert P Johnson

                              Title:    President

 

 

STATE OF MINNESOTA        )

                         ) ss.

COUNTY OF RAMSEY          )

 

The   foregoing   was   acknowledged before   me   this   ____   day   of

December,   2005,   by   Robert P Johnson, in his   capacity   as   the

President    of   AEI   Fund   Management   XVII,   Inc.,   a   Minnesota

corporation,   who   acknowledged the execution   of   the   foregoing

instrument   to be the voluntary act and deed of said   corporation

by authority of its board of directors on behalf of the company.

 

[Seal]                                  /s/ Marni J Lattimore

                              Print Name: Marni J Lattimore

                              My Commission Expires: 1-31-10

 

 

                            EXHIBIT A

                               

                        (Legal Description)

                               

 

 

Parcel 1:

 

Lot 2, Block 1, Sports & Recreation Addition to Wichita, Sedgwick

County, Kansas, more specifically described as follows:

 

Beginning at the Northeast corner of Lot 2, Block 1, Sports &

Recreation Addition to Wichita, Sedgwick County, Kansas; thence,

South 0 degrees 00'00" East a distance of 500.00 feet to the

Southeast corner of said Lot 2; thence North 90 degrees 00'00"

West a distance of 490.90 feet to the Southwest corner of said

Lot 2; thence North 0 degrees 00'00" East a distance of 500.00

feet to the Northwest corner of said Lot 2; thence, North 90

degrees 00'00" East a distance of 490.90 feet to the point of

beginning.

 

Parcel 2:

 

A non-exclusive easement for the benefit of Parcel 1 as created

by the instrument dated October 10, 1994 and recorded November

17, 1994, on Film 1489, Page 1020, for the purpose of joint

ingress and egress over and across the north 75 feet of the east

25 feet of Lot 1, Block 1, Sports & Recreation Addition to

Wichita, Sedgwick County, Kansas.

 

Parcel 3:

 

A non-exclusive easement for the benefit of Parcel 1 as created

by the instrument dated November 6, 1996 and recorded November 8,

1996, on Film 1652, Page 1358, for the purpose of vehicular (and

pedestrian) ingress, egress, passage and delivery and

installation, construction, repair and maintenance of utilities

over, under, and across the following described premises:

Commencing at the Northeast corner of Lot 1, Block 1, Sports &

Recreation Addition to Wichita, Sedgwick County, Kansas; thence

South along the East line of said Lot 1 a distance of 75.00 feet

for the point of beginning; thence continuing South without

deflection 381.94 feet; thence with a deflection angle 89,a57'01"

right-West 140.43 feet; thence following the arc of a curve to

the left having a radius of 63.00 feet Southwesterly 48.77 feet;

thence continuing tangent from said curve 10.21 feet to the

Westerly line of said Lot 1; thence with a deflection angle

90,a00'00" right-Northwesterly along the Westerly line of said

Lot 1 a distance of 30.00 feet; thence with a deflection angle

90,a00'00" right-Northeasterly 10.21 feet; thence following the

arc of a curve to the right having a radius of 93.00 feet

Northeasterly 72.00 feet; thence continuing tangent from said

curve 95.48 feet; thence following the arc of a curve to the left

having a radius of 30.00 feet Northeasterly 47.10 feet; thence

continuing tangent from said curve and parallel with the East

line of said Lot 1 a distance of 321.98 feet; thence with a

deflection angle 90,a00'00" right-East parallel with the North

line of said Lot 1 a distance of 15.00 feet to the point of

beginning.

 

Parcel 4:

 

A non-exclusive easement for the benefit of Parcel 1 as created

by the instrument dated October 10, 1994 and recorded November

17,1994 on Film 1489, Page 1019, for the purpose of constructing,

maintaining, and repairing a drainage system, over, along, and

under the following described tracts of land to-wit: The

centerline of a 10 foot drainage easement described as follows:

Beginning at a point on the East line and 15 feet South of the

Northeast corner of Lot 1, Block 1, of said Addition; thence

West, parallel to and 15 feet South of the North line of said Lot

1, 305 feet; thence Northwesterly to a point on the West line and

5 feet South of the Northwest corner of said Lot 1; AND The

centerline of a 10 foot drainage easement described as follows:

Beginning at a point on the East line and 39 feet North of the

Southeast corner of Lot 1, Block 1, of said Addition; thence

Southwesterly to a point on the West line and 46.03 feet

Northwest of the Southwest corner of said Lot 1.

 

Parcel ID #: 113070210100100A

 

Common Address: 6959 East 21st Street

                  Wichita, Kansas

 

 

 

 

 

 

 

 

 

 

                               LEASE

                               

                             BETWEEN

                               

                    EDGEMARK DEVELOPMENT LLC,

               A COLORADO LIMITEDLIABILITY COMPANY

                               

                             LANDLORD

                               

                               AND

                               

               GART BROS. SPORTING GOODS COMPANY,

                     A COLORADO CORPORATION

                               

                              TENANT

                               

                               

                               

                     DATE: DECEMBER 10, 2001

 

 

 

 

 

                               

                               

                         COMMERCIAL LEASE

    

     THIS LEASE made and entered into as of the 10th day of

December, 2001 by and between EDGEMARK DEVELOPMENT LLC, a

Colorado limited liability company, having an office at 410 17th

Street, Suite 1705, Denver, Colorado 80202 (hereinafter called

the "Landlord"), and GART BROS. SPORTING GOOPS COMPANY, A

COLORADO CORPORATION having an office at 1050 W Hampton Ave,

Englewood Colorado, 80110 (hereinafter called the "Tenant").

    

    

                           WITNESSETH

    

     WHEREAS, Landlord is or is about to become the owner of

certain land ("Land") legally described in Exhibit A attached

hereto, upon which sits a retail building (the "Building");

    

     WHEREAS. Landlord desires to lease to Tenant and Tenant

desires to lease from Landlord, upon the telms and conditions

hereinafter set forth, the Premises and all appurtenant rights

thereto.

    

     NOW, THEREFORE, .in consideration of the mutual covenants

and agreements herein contained and for other good and valuable

consideration, the receipt and sufficiency of which are hereby

acknowledged the parties hereto covenant and agree as follows:

 

SECTION 1       DEFINITIONS

    

     1.1   "Commencement Date" is defined in Section 2.2.

    

     1.2   "Common Areas" means all those portions of the

Development which have been designated and improved for common

use, including; without being limited to: all parking areas;

access roads; sidewalks; passageways; landscaped areas; statuary

and other works; of art; ramps and walks, and the like.

    

     1.3   "Default Rate" shall mean twelve percent (12%).

    

     1.4   "Development" means the Land and all improvements

located thereon, including, without limitation, the Building.

    

     1.5   "Floor Area" means the actual number of square feet of

floor space within the exterior walls of all floors of the

Building, measured to the exterior surface of the exterior walls,

including any basements, and including stairs, interior

elevators, escalators, air conditioning and other interior

equipment rooms; but excluding loading docks and platforms,

transformer vaults, utility penthouses or utility enclosures and

any mezzanine space.

    

     1.6   "Gross Sales Break Point" means the product resulting

from dividing the minimum annual rent by 0.02.

    

     1, 7       "Land" means the property legally described on

Exhibit A hereto.

    

     1.8   "Landlord" as used in this Lease means only the owner

or owners at the time in question of the Premises, and in the

event of any transfer or conveyance of title to the Premises. the

seller's respective successors or assigns shall be deemed to be

"Landlord" hereunder.

    

     1.9   "Lease Year" is defined in Section 7.3,

    

     1.10       "Mortgage" shall be deemed to include a mortgage

or deed of trust

 

     1.11 "Mortgagee" shall be deemed to include the mortgage,

trustee or beneficiary of a deed of trust or mortgage.

    

     1.12 "Premises" shall be deemed to mean the area defined in

          Section 2.1.

1.13 "Rent" shall be deemed to include the minimum annual rent,

percentage rent, additional rent and any other sums due from

Tenant to Landlord hereunder.

1.14 "Rent Commencement Date" shall be March 1, 2002.

    

    

     1.15       "Tenant" as used in this Lease means only the

owner or owners at the time in question of the Tenant's interest

in this Lease, and in the event of any transfer or permitted

assignment of such interest, the assignee or transferee shall be

deemed to be, Tenant" hereunder; however, Tenant's continued

liability hereunder in the event of a transfer shall be

determined pursuant to Section 18 hereof.

 

SECTION 2       PREMISES AND TERM

    

     2.1   PREMISES: Landlord hereby leases and demises unto

Tenant and Tenant hereby leases and takes from Landlord, for the

term, at the rental, and upon the covenants, terms and conditions

hereinafter set forth inside portion of the Building containing

approximately 51,683 square feet of Floor Area, as defined below.

During the term hereof and subject to the terms hereof, Tenant

shall also have the non-exclusive right to use the Common Areas.

Landlord covenants that it has not and will not grant to anyone

other than Tenant any right to use the Common Areas other than

(i) pursuant to the Permitted Exceptions (as defined in Section

19.1); or (ii) to another tenant, owner or occupant of the

Development after Landlord has effected a Recapture (as defined

in Section 18.1).

    

     2.2   TERM: Except as otherwise provided herein the term of

this Lease shall commence (the "Commencement Date'} on the date

Landlord acquires the Premises, and the Termination Date shall be

February 28, 2017.   Landlord shall have no obligations for the

completion or remodeling of the Premises, and Tenant shall accept

the Premises in their, "as is", condition on the date that the

Premises are delivered to Tenant.   Tenant, by taking possession

of the premises shall be deemed to have inspected the Premises

and all of its systems and other improvements and agreed that the

Premises were, as of the date of taking possession, in good order

repair and condition.   No promise of Landlord to alter, remodel,

decorate, clean, or improve the Premises or other parts of the

Development and no representation or warranty, express or

implied, respecting the condition of the Premises or other .parts

of the Development has been made by Landlord to Tenant, unless

the same is contained herein or made a part hereof.

 

SECTION 3       OPTIONS TO RENEW

    

     3.1   RENEWAL OPTIONS: Tenant shall have, and is hereby

granted, three (3) separate options to extend the initial term of

this Lease upon the terms covenants, and provisions herein

contained, for successive periods of five (5) years each so long

as Tenant is not in default under this Lease at the time of the

exercise of the applicable renewal option. Each such option shall

be exercisable by Tenant's giving notice to Landlord of Tenant's

intention to exercise the same not less than six (6) months prior

to the expiration date of the then current term provided,

however, that. if Tenant shall fail to give any such notice of

exercise within the aforesaid time limit, Tenant's right to

exercise its option shall nevertheless continue until 30 days

after Landlord shall have given Tenant written notice of

Landlord's election to terminate such option and Tenant may

exercise its option at any time until the expiration of said 30

day period.   If Tenant does not exercise its option by giving

Landlord written notice thereof on or before the end of said

thirty (30) day period, then Tenant's right to extend the Lease

as provided in this Section shall terminate and be of no further

force or effect.

 

SECTION 4       TENANT'S USE OF BUILDING

    

     4.1   USE OF BUILDING: Tenant may use the Premises for the

operation of a retail sporting goods store or any other retail

use permitted under applicable zoning ordinances and under the

Permitted Exceptions. Landlord covenants and agrees that, so long

as Tenant operates the Premises for the general sale of sporting

goods it will not lease any other space in the Development or in

any real property adjacent to the Development owned by Landlord

to any person whose primary purpose is (i) the general sale of

sporting goods, (ii) the sale of brand name athletic clothing,

(iii) the sale of athletic shoes or (iv) operating a sporting

goods specialty store (the "Exclusive'}. The Exclusive shall

permanently terminate upon thirty (30) days written notice to

Tenant in the event that Tenant ceases to actively operate the

Premises for the general sale of sporting goods as its primary

purpose and Tenant fails to reopen the Premises prior to the end

of said 30 day notice period (excluding such discontinuance due

to damage or destruction of the Premises, Remediation Work

pursuant to Section 20, restoration of the Building pursuant to

Section 14, or other causes described in Section 27.7 hereof).

    

    

 

 

SECTION 5       LEASE SUPPLEMENT

    

     5.1   ACCEPTANCE OF BUILDING: Upon commencement of the term

of this Lease, at the request of either party, Landlord and

Tenant shall execute a supplement to this Lease confirming the

Commencement Date of the original term of this Lease, the

termination date of the original term of this Lease, the Floor

Area of the Premises, and such other matters as Landlord or

Tenant may reasonably request.

 

SECTION 6       CONSTRUCTION

    

     6.1   TENANT'S ALTERATIONS: Tenant covenants and agrees not

to make any alterations in or additions to the Premises (all such

alterations are referred to herein collectively as "Alterations")

without in each such instance first obtaining the Written consent

of Landlord, which shall not be unreasonably withheld or delayed.

Landlord's consent to any Alterations by Tenant or Landlord's

approval of the plans, specifications and working drawings for

Tenant's Alterations shall create no responsibility or liability

on the part of Landlord for their completeness, design

sufficiency, or compliance with all laws, rules and regulations

of governmental agencies or authorities now in effect or which

may hereafter be in effect. Tenant, at its expense, shall pay all

engineering and design costs incurred by Landlord attributable to

the Alterations and obtain all necessary governmental permits and

certificates required for any Alterations to which Landlord has

consented and shall cause such alterations to be completed in

compliance therewith and with all applicable laws and

requirements of public authorities and all applicable

requirements of Landlord's insurance carriers. All Alterations

which Tenant is permitted to make shall be performed in a good

and workmanlike manner, using new or like new materials and

equipment at least equal in quality to the original installations

in the Premises. All repair and maintenance work required to be

performed by Tenant pursuant to the provisions of this Section 6

and any Alterations permitted by Landlord pursuant to the

provisions hereof, shall be done at Tenant's expense by persons

requested by Tenant and authorized in Writing by. Landlord. If

Landlord authorizes persons requested by Tenant to perform such

work, prior to the commencement of any such work on request,

Tenant shall deliver to Landlord certificates issued by insurance

companies qualified to do business in the State of Kansas,

evidencing that workmen's compensation, public liability

insurance, and property damage insurance, all in the amounts,

with companies and on forms satisfactory to Landlord, are in

force and effect and maintained by all contractors and

subcontractors engaged by Tenant to perform such work. All such

policies shall name Landlord and any Mortgagee as an additional

insured, and any Mortgagee as a loss payee. Each such certificate

shall provide that the same may not be cancelled or modified

without ten (10) days' prior written notice to Landlord and such

Mortgagee. Further, Landlord and such Mortgagee shall have the

right to post notices in the Premises, including, but not limited

to, notice of Landlord's nonresponsibility for construction of,

alteration or repair to, the Premises, in locations which will be

visible by parties performing any work on the Premises stating

that Landlord is not responsible for the payment for such work

and setting forth such other information as Landlord may deem

necessary. Upon the expiration or earlier termination of this

Lease, except for Alterations approved by Landlord in writing,

Landlord shall have the right to require that Tenant remove all

or any of the Alterations, and in such event, Tenant shall

promptly remove at Tenant's expense the Alterations specified by

Landlord and restore the Premises to their condition prior to the

making of the same, reasonable wear and tear and casualty

excepted. Notwithstanding the foregoing, Tenant shall be allowed

to make interior, nonstructural changes to the Premises without

Landlord's prior written consent; however, for all Alterations

costing in excess of $250,000.00 in any consecutive twelve (12)

month period, Tenant shall provide Landlord with fourteen (14)

days' advance written notice of said changes. Tenant's schedule

for completing the same, and any information relating to the

Alterations reasonably requested by Landlord.

         

          6. 1.1     Tenant shall keep the Development in as good

order, condition, and repair and in an orderly state, as when

they were entered upon loss by fire or other casualty and at the

end of the term, reasonable wear and tear excepted.   Subject to

Landlord's obligation to make repairs in the event of certain

casualties as set forth in Section 14 below, and Landlord's

obligation to perform certain repairs pursuant to Sections

8.1,15.1 and 15.2, Landlord shall have no obligation for the

repair or replacement of any portion of the Development which is

damaged or wears out during the term "hereof regardless of the

cause therefore, including but not limited to, the roof, parking

lot, and heating, ventilating, air conditioning systems or any of

Tenant's property or betterments in the Development.

         

         

          6.1.2      In addition, Tenant agrees to indemnify,

protect and hold Landlord, its contractors, agents and employees

harmless from and against any and all claims losses costs

liabilities, suits, actions, damages or expenses (including

without limitation, consequential damages and attorneys' fees and

costs) arising from or in any way related to the construction of

the Alterations.

 

During the term of the lease as extended, Landlord shall pay the

cost of Tenant's Alterations that improve the building on the

Development and remain Landlord's property upon the expiration or

termination of this Lease (which may include the cost of

architectural and engineering plans for the same), up to a

minimum of Five Hundred Thousand and No/100 Dollars ($500,000.00)

(the "Allowance"). The cost of all Alterations in excess of the

Allowance to which Tenant is entitled as set forth above shall be

at Tenant's expense. The Allowance will be paid promptly

following Tenant's written demand therefore accompanied by lien

releases, evidence of completion of Alterations and any other

information relating to the Alterations reasonably requested by

Landlord. Any unused portions of the Allowance following July 1,

2002 shall be forfeited by Tenant. The Allowance shall be paid in

a maximum number of five (5) installments, including the final

installment requesting payment of retainage.   Any amount of the

Allowance remaining after the fifth (5th) installment payment

shall be forfeited by Tenant.

    

     Prior to each payment of the Allowance, the following

information shall have been obtained by the Tenant, at its

expense, and submitted to the Landlord, which information shall

be in form and -substance satisfactory to the Landlord, (a) a

request for payment signed by the Tenant, accompanied by billing

statements, vouchers and invoices, which request for payment

shall expressly warrant that the work for which the payment is

requested has been performed in accordance with the approved

plans and specifications; (b) proof that all invoices for labor

and materials have been .paid, except those contained in the

current request for payment; (c) final lien waivers from all

payees (contractors, subcontractors and material suppliers) under

previous requests for advances and conditional lien waivers from

all payees (contractors, subcontractors and material suppliers)

under the current request for payment (the form of lien waiver

shall be acceptable to Landlord and its title company); (d) a

report from the architect which shall specify the percentage of

completion of construction. and provide detailed comments on

specific work performed since the date of the last such report;

and ( e) evidence satisfactory to Landlord that prior to the

final payment, 10% retainage has been withheld by Tenant under

its construction contract. Prior to the commencement of Tenant's

initial improvements to the Premises to which the Allowance shall

apply, Tenant shall provide Landlord with a copy of its general

contractors construction contract, and any other related

documents requested by Landlord for Landlord's prior review and

written approval. At Landlord's request, Landlord shall be made a

third party beneficiary of said general contractors contract. No

changes shall be made to said construction contract without

Landlord's prior written approval, except for changes (i) that do

not affect Landlord's rights or Tenant's obligations hereunder,

or (ii) involving individual (or a series of, related) change

orders with a net increase of $250,000 or less, provided the same

do not involve the structural portions of the Building or

exterior of the Building, in which event Landlord's approval

shall be required

    

     6.2   MECHANICS; LIENS: Tenant shall payor cause to be paid

all costs for work done by Tenant or caused to be done by Tenant

on the Development of a character which will or may result in

liens on Landlord's interest therein, and Tenant will keep the

Development free and clear of all mechanics' liens, and other

liens on account of work done for Tenant or persons claiming

under it. Tenant hereby agrees to indemnify, defend, and save

Landlord harmless of and from all liability, loss, damage, costs,

or expenses. including attorneys' fees, on account of any claims

of any nature whatsoever including claims or liens of laborers or

materialmen or others for work performed for or materials or

supplies furnished to Tenant or persons claiming under Tenant.

Should any liens be filed or recorded against the Development or

any action affecting the title thereto be commenced as a result

of such work (which term includes the supplying of materials),

Tenant shall cause such liens to be removed of record within five

(5) days after notice from Landlord. If Tenant desires to contest

any claim of lien, Tenant shall either (i) post a bond as

required by applicable law, which causes the lien to be removed

as a lien against all or part of the Development, or (ii) furnish

to Landlord adequate security of at least one hundred fifty

percent (150%) or the amount of the claim, plus estimated costs

and interest and. if a final judgment establishing the validity

or existence of any lien for any amount is entered. Tenant shall

pay and satisfy the same at once. If Tenant shall be in default

in paying any charge for which a mechanic's lien or suit to

foreclose the lien has been recorded or filed and shall not have

given Landlord security as aforesaid, Landlord may (but without

being required to do so) pay such lien or claim and any costs,

and the amount so paid, together with interest thereon at the

Default Rate and reasonable attorney's fees incurred in connection

therewith, shall be immediately due from Tenant to Landlord.

    

     6.3   COMPLIANCE WITH NEW OR MODIFIED GOVERNMENTAL

REGULATIONS;

 

Notwithstanding anything in this Lease to the contrary, except as

provided in the last sentence of this Section 6.3, it is

expressly agreed by Tenant and Landlord that: (i) except in

connection with any new leaseable area -constructed by Landlord

for a party other than Tenant, Tenant shall be responsible for

any modifications to the Development required by any local, state

and federal laws, ordinances, codes and regulations or matters of

record (including but not limited to the Americans With

Disabilities Act) as such are in effect on the Commencement Date

of this Lease, and (ii) that any improvements to the Development,

including without limitation, the Building or Common Areas

required by any modification of or addition to any existing

local, state or federal law, ordinance,- code or regulation or

matters or record where such modification or addition occurred,

was enacted, or was put into effect before or after the

Commencement Date of this Lease (including but not limited to new

or modified provisions of the Americans With Disabilities Act)

shall De performed by Tenant at its sole cost and expense.

Landlord shall be responsible to perform any modifications to the

structural portions of the Development required by any local,

state and federal laws, ordinances, codes and regulations or

matters of record at its sole cost and expense, except for

modifications resulting directly or indirectly as a result of

any. Alterations performed by or at the request of Tenant.

 

SECTION 7 RENT

    

     7.1   MINIMUM ANNUAL RENT

         

          7.1.1 Commencing with the Rent Commencement Date and

     throughout the initial term and each and every renewal term,

     Tenant shall pay to Landlord a minimum annual rent as

     follows:

          Period      Rate PSF        Minimum              Minimum

                                  Annual Rent            Monthly

          3/1/02-    $     9.00       $465,147.00          $38,762.25

          2/28/07

          3/1/07-    $     9.90       $511,661.70          $42,638.48

          2/28/12

          3/1/12-    $     10.89      $562,827.87          $46,902.32

          2/28/17

          3/1/17-    $     11.98      $619,110.66          $51,592.55

          2/28/22

          3/1/22-    $     13.18      $681,021.72          $56,751.81

          2/28/27

          3/1/27-    $     14.49      $749,123.89          $62,426.99

          2/28/32

    

     Minimum annual rent shall not change if it is determined

that the Floor Area is greater or less than 51 ,683 square feet.

    

     The minimum annual rent payable under this Section 7.1 shall

be payable to Landlord with no setoff or deduction therefrom,

except as specifically set forth herein, and in addition to all

other amounts due under this Lease, in equal, monthly

installments in advance, on or before the 1st day of each month,

at the address for Landlord set forth in Section 27.6 hereof or

at such other address as Landlord shall from time to time

designate by notice to Tenant.

    

     7.2   PERCENTAGE RENT: Tenant shall pay with no setoff or

deduction therefrom, and in addition to all other amounts due

under thic5 Lease, as additional rent for the Premises, a

percentage rent equal to two percent (2%) of the amount by which

Tenant's Gross Sales in each Lease Year exceed the Gross Sales

Break Point). The percentage rent shall be payable on an annual

basis as set forth in Section 7.6, at the office of Landlord or

at such other place as

Landlord may designate, and without any prior demand therefor and

without any setoff or deduction whatsoever.

     7.3   DEFINITION' OF LEASE YEAR: The term "Lease Year" as

used in this Lease shall refer to a 52 week year ending on

January 31 of each calendar year. The period from the

Commencement Date (if other than February 1) to the following

January 31, and, if this Lease shall expire or be terminated on a

date which is other than the last day of Tenant's then fiscal

year, the period beginning at the end of the last preceding Lease

Year and ending on the date of such expiration or termination,

shall be considered a partial Lease Year. Upon any change in

Tenant's fiscal year, at the option of Tenant, exercisable by

notice given to Landlord at any time (but no more often then once

in a twelve (12) month period), the term "Lease Year" shall mean

the new fiscal year of Tenant, then observed by Tenant in the

conduct of its business and used by Tenant for federal income tax

purposes. In the event the Lease Year is so changed, the period

from the last preceding Lease Year to the commencement of the new

fiscal year of Tenant shall be considered a separate partial

Lease Year. Notice of any change in the Lease Year shall be given

by Tenant to Landlord not less than 30 days prior to the

effective date of such change. For any partial Lease Year, the

Gross Sales Break Points referred to in Section 7.2 hereof shall

be reduced to that portion of the Gross Sales Break Points which

the number of days in such partial Lease Year bears to 365 and

the "Gross Sales" attributable to such partial Lease Year and

used in calculating percentage rent due under Section 7.2 shall

be equal to the product of the actual Gross Sales for the 12

month period ending on the last day of such partial Lease Year

multiplied by a fraction, the numerator of which is the number of

days in such partial Lease Year and the denominator of which is

365; PROVIDED, HOWEVER, that if the first or last Lease Year

shall be less than twelve (1.2) full calendar months, then (a)

for the purpose of computing percentage rent for the first Lease

Year (i) the Gross Sales made in the first Lease Year shall be

added to the Gross Sales for such number of days (including

Sundays and holidays) following the first Lease Year as shall

make up 365 days in total, (ii) the aggregate Gross Sales for

such 365 day period shall be divided by 365 to determine the

average daily Gross Sales and (iii) such average daily Gross

Sales shall be multiplied by the actual number of days in the

first Lease Year to determine adjusted Gross Sales for the first

Lease Year and (b) for the purpose of computing percentage rent

for the last Lease Year (i) the Gross Sales made in the last

Lease Year shall be added to the Gross Sales for such number of

days (including Sundays and holidays) preceding the last Lease

Year as shall make up 365 days in total, (ii) the aggregate Gross

Sales for such 365 day period shall be divided by 365 to

determine the average daily Gross Sales and (iii) such average

daily Gross Sales shall be multiplied by the actual number of

days in the last Lease Year to determine adjusted Gross Sales for

the last Lease Year. Notwithstanding the foregoing, the Gross

Sales for the aforesaid number of days following the first Lease

Year is to be included in detern1ining Gross Sales for the full

Lease Year following the first Lease Year.

 

     7.4   DEFINITION OF GROSS SALES: The term "Gross Sales" as

used in this Lease means the actual sale price of all goods,

wares and merchandise sold in, upon or from any part of the

Premises, including actual receipts from services rendered by

Tenant as well as the total actual sales and services rendered by

any licensee, subtenant or concessionaire occupying any portion

of the Premises, all of which Tenant covenants shall be recorded

on the books of Tenant provided, however, that the term "Gross

Sales" shall not be deemed to mean and there shall be deducted or

excluded, as the case may be, from "Gross Sales" amounts

representing:

          7.4.1      Sales of merchandise for which cash has been

refunded on merchandise which is defective.

 

          7.4.2      Amounts of any sales, use, excise, gross

receipts or any similar tax imposed by any governmental authority

directly on sales and collected from Tenant of its customers.

 

          7.4.3      Exchanges of merchandise between stores of

Tenant, if any, where such exchanges are made solely for the

convenient operation of the business of Tenant.

 

          7.4.4      Orders sold at other stores of Tenant even if

said orders are filled from the Premises (orders sold at the

Premises shall be included within Gross Sales even if said orders

are filled from other than the Premises).

 

          7.4.5 .    Receipts from the sale of "leader items" not

exceeding $100,000 per year. "Leader items" shall be defined as

those items of merchandise advertised as promotional items to.

attract customers to the Premises and sold at either no profit or

a profit margin less than six percent (6%).

 

          7.4.6      Sales of fixtures; operating equipment or

other property used by Tenant in the operation of its business

and not acquired by it for the purpose of sale.

 

          7.4.7      Employee sales at discount except to the

extent the same exceed two percent (2%) of Gross Sales (as

defined excluding employee sales at discount).

 

          7.4.8      Receipts from the sale of hunting, fishing

and/or game licenses 7.4.9. Receipts from licenses, park permits

and camp stamps. 7.4.10 Receipts from migrant bird pets.

 

          7.4.11     Receipts from sales of airline tickets, ski

lift tickets, tickets for sporting events and all Datatix,

Ticketmaster or other similar ticket sales.

 

          7.4.12     Receipts from sales of tickets for events

conducted not for purposes of profit.

 

          7.4.13     Amounts of any Interest, Finance, Service or

Sales Carrying Charges, .however denominated, paid by customers

for extension of credit on sales and Dot included in the

merchandise cash sales price.

 

          7.4.14     Credit Card fees

 

          7.4.15     Income from vending machines maintained for

the convenience of employees and income from coin-operated

telephones used primarily by employees.

 

          7.4.16     Charges for services rendered primarily to

accommodate customers or employees and on which Tenant makes no

profit; charges for making deliveries, shipments or transfers of

merchandise (provided such services are incidental to Tenant's

business and are performed in furtherance of good customer

relations).

 

          7.4.17     Gift certificates, or like vouchers, until

such time as the same shall have been redeemed at the Premises

for merchandise or services.

 

          7.4.18     Team sales.

 

          7.4.l9.    Fees from automatic teller cash dispensing

machine placements.

 

     Sales shall be deemed to have been made when merchandise has

been shipped or delivered, and services shall be deemed to have

been rendered when completed, or when such sales or services, as

the case may be, have been charged against the purchaser or

customer on the books of Tenant, whichever of such events shall

be the first to occur. Transactions shall be included in Gross

Sales whether for cash or on credit and whether the amount

thereof is collected or uncollected.   Tenant makes no

representation or warranty as to the amount of Gross Sales which

it expects to make in the Premises.

 

     7.5   BOOKS AND RECORDS/AUDIT: Tenant covenants that, for the

purpose of ascertaining the amount payable to Landlord as

percentage rent, Tenant will keep in accordance with generally

accepted accounting principles consistently applied, accurate

books and records containing all gross sales during each month of

the term hereof and all supporting records such as excise tax

reports, state sales tax"(business and occupation tax and gross

income tax reports and receipts, including ST-1 gross receipts

tax reporting forms filed by Tenant during the most recent Lease

Year, at its headquarters office currently located at Denver,

Colorado, which shall, for the purpose of verifying the

percentage rent, be subject to examination by Landlord, its

authorized representatives or accountants at reasonable times

during business hours upon at least fourteen (14) days written

notice, and in a manner which does not unreasonably interfere

with the conduct of business. Such records shall be retained for

at least three (3) years after receipt by Landlord of the yearly

statement (hereinafter referred to) certified by the chief

financial officer or President or Treasurer of Tenant. Tenant

shall retain for at least one (1) year after the expiration of

each Lease Year all original sales records and sales slips. At

the expiration of such three (3) year period Tenant may dispose of

such records unless Landlord shall have asserted a claim against

Tenant with respect to percentage rent for such year, in which

event such records shall be retained until disposition of such

claim: Any claim by Landlord for a revision of any statement of

Gross Sales which is not made to Tenant within three (3) years

after receipt of the yearly statement shall be deemed and hereby

is waived by Landlord. If any such examination discloses that Gross

Sales transacted by Tenant exceed those reported, Tenant shall

immediately pay to Landlord such additional percentage rent as

may be so shown to be payable by said examination, and interest

on such deficiency at the Default Rate, from the date of

underpayment to the date such deficiency is paid. If such

examination discloses that Gross Sales transacted by Tenant are

less than those reported, Tenant shall be entitled to a credit

against rent next owing. All examinations of Tenant's books and

records shall be solely at Landlord's expense; provided, however,

that if Tenant's statement of Gross Sales shall be understated by

three percent (3%) or more, Tenant shall promptly reimburse

Landlord for Landlord's reasonable expenses of examination.

Landlord agrees to hold in confidence all sales figures and other

information obtained from Tenant's records and yearly statement

except to the extent that it may be necessary to divulge them to

prospective purchasers, for the purpose of obtaining financing,

in compliance with subpoenas or judicial orders, or to enforce

Landlord's rights hereunder.

 

     7.6   STATEMENT: Within ninety (90) days after the end of

each Lease Year, Tenant shall furnish Landlord a statement,

certified to by the chief financial officer or President or

Treasurer of Tenant; showing the Gross Sales during such Lease

Year, together with a copy of state sales tax receipts. If any

percentage rent shall be due to Landlord with respect to such-

Lease Year, Tenant shall pay to Landlord such amount as may be

due to Landlord at the time such yearly statement is furnished to

Landlord.

 

     7.7   LATE CHARGE: Other remedies for nonpayment of Rent

notwithstanding if the monthly minimum rental payment additional

rent payment or percentage rent payment for any particular month,

is not received by Landlord on or before the tenth (10th) day of

the month for which said payment is due, then a late payment

charge of two percent (2%) of such past due amount shall, as

liquidated damages and compensation for Landlord's additional

administrative expenses incurred, become due and payable as

additional rent in addition to such amounts owed under this

Lease. Landlord and Tenant expressly covenant and agree that in

the event of such late payment(s) by Tenant the damages so

resulting to Landlord will be difficult to ascertain precisely,

and that the foregoing charge constitutes a reasonable good faith

estimate by the parties of the extent of such damages.

 

     7.8   PERSONAL PROPERTY AND LEASEHOLD TAXES: Tenant shall

pay, as they become due and payable and before they become

delinquent, all taxes levied or assessed against its leasehold

interest in this Lease and against the fixtures, equipment,

merchandise and other personal property located in upon, about or

affixed to the Premises.

 

     7.9   LICENSE FEES: Tenant shall pay, as they become due and

payable and before they become delinquent, all fees, charges and

expenses required for licenses and/or permits, if any, required

for Tenant's use of the Development during the term of this Lease

or any renewal or extension thereof. Tenant shall bear all risks

and obligations associated with the procurement of any permits or

licenses necessary to conduct business. If requested by Tenant,

Landlord will cooperate with Tenant at Tenant's sole cost and

expense, in zoning matters relating to the Development.

 

SECTION 8       DEVELOPMENT

 

     8.1   MAINTENANCE OF DEVELOPMENT: Except for Landlord's

responsibilities and obligations set forth in Section 1 5.1

hereof, during the term hereof, Tenant agrees, at no cost or

expense to Landlord to police and maintain the Development in

good operating condition, order and repair at all times, and to

make all replacements and repairs to the Development as and when

necessary, including, but without limitation, repairing and

replacing any surface paving whenever necessary, repairing

replacing and maintaining landscaping in the Development keeping

the same properly drained and reasonably free of snow, ice, water

and rubbish and in a neat clean orderly and sanitary condition,

providing security as necessary to protect the property and

persons of those properly using the Development, maintaining

suitable and adequate lighting in exterior portions of the

Development (and keeping same lighted during, and for at least

one- half hour after, Tenant's business hours), maintaining such

directional signs, markers and painted lines as may from time to

time be necessary or proper for the control of parking and

traffic in the Development, maintaining adequate access ways

connecting all parking areas with the public streets abutting the

Development, and satisfying the repair maintenance, and replacement

obligations of Landlord on the Development that are set forth in

the Permitted Exceptions. Notwithstanding the foregoing, in the

event of a Recapture, as defined below, from and after the

effective date of such event, Landlord shall be responsible for

maintaining the Common Areas, roof and exterior portions of the

Building, pursuant to this Section 8.1, and Tenant shall be

responsible to pay Landlord its pro rata share of all costs and

expenses incurred by Landlord in connection therewith, including

without limitation a management fee equal to ten percent (10%)

multiplied by said costs and expenses (excluding taxes). Tenant's

pro rata share shall be determined by dividing the leaseable

Floor Area of the Premises after Recapture, by the leaseable

Floor Area of the Development. Landlord may estimate (which

estimate may be revised from time to time. upon thirty (30) days

written notice to Tenant, but not more than one time per calendar

year in addition to a revision following Landlord initial annual

estimate) the annual cost of maintenance pursuant to Section 8.1

and Tenant shall pay to Landlord monthly on or before the first

day of each month, with and as part of the minimum monthly rent,

its pro rata share of such annual cost divided by 12. Each Lease

Year Landlord will endeavor within 90 days of the end of such

Lease Year to provide Tenant with a statement of the cost of

maintenance of the development pursuant to this Section 8.1 with

backup materials reasonably requested by Tenant. Within 30 days

of receipt of such annual statement and reasonable backup

materials, Tenant will pay to Landlord or Landlord will reimburse

to Tenant, as appropriate, any overage or underage versus the

estimated payments made by Landlord.

 

If Tenant shall dispute the amount of an annual statement of

maintenance costs submitted by Landlord or the proposed estimated

increase or decrease on the basis of which Tenant's rent is to be

adjusted as provided in subparagraph above; Tenant shall give

Landlord written notice of such dispute within (i) three (3)

years after Landlord delivers such annual statement, or (ii)

ninety (90) days after Landlord advises Tenant of such proposed

increase or decrease. If Tenant does not give Landlord such

notice within such time, Tenant shall have waived its right to

dispute the amounts so determined. If Tenant timely objects,

Tenant or its authorized representatives or accountants shall

have the right to inspect or audit Landlords books and records

concerning maintenance costs for the purpose of verifying the

accuracy of the statement complained of or the reasonableness of

the estimated increase or decrease. If Tenant determines that an

error has been made, Landlord and Tenant shall endeavor to agree

upon the matter, failing which the parties shall submit such

matter to an independent certified public accountant selected by

Landlord and reasonably acceptable to Tenant for a determination

which shall be final conclusive and binding upon Landlord and

Tenant. All costs incurred by Tenant in obtaining its own

representatives or accountants shall be paid for by Tenant unless

Tenant's inspection or audit disclose an error, acknowledged by

Landlord (or found to have occurred in by the independent

certified public accountant described above) of more than three

percent (3%) in the computation of the total amount of operating

expenses as set forth in the statement submitted by Landlord

which is challenged, in which event Landlord shall pay the

reasonable costs incurred by Tenant in obtaining such inspection

or audit. Notwithstanding the dependency of any dispute over any

particular statement, Tenant shall continue to pay Landlord the

amount of the adjusted monthly installments of rent detem1ined by

Landlord until the adjustment has been determined to be incorrect

as aforesaid. If it shall be determined that any portion of the

operating expenses were not properly chargeable to Tenant, then

Landlord shall promptly credit or refund the appropriate sum to

Tenant.

 

     8.2   RESTRICTIONS ON LANDLORD: Except as (i) required

herein, (ii) reasonably necessary for Landlord to fulfill its

right and obligations set forth herein or (iii) required by laws,

roles and regulations of governmental agencies or authorities now

in effect or which may hereafter be in effect, Landlord shall

not, without the prior written consent of Tenant, which consent

may be withheld in Tenant's sole discretion, make any material

change to or alteration of the Development.

 

SECTION 9       OPERATION OF DEVELOPMENT

 

     9.1   QUALITY OF OPERATION: Throughout the term of this

Lease, the Tenant shall maintain the Development in accordance

with commercially reasonable standards, attractive both in its

physical characteristics and appearance and in its appeal to

customers and trade. Tenants obligations pursuant to this Section

9.1 are subject to Landlord's obligations pursuant to Section

15.1 and, in the event of a Recapture, Section 8.1.

 

     9.2   PROHIBITED ACTS: Tenant shall not without the prior

written consent of Landlord, at any time; (i) conduct or permit

any bankruptcy sale unless directed by order of a court of

bankruptcy or other court of competent jurisdiction; (ii) use, or

permit to be used, any sound broadcasting system or amplifying

device which can be heard outside of the Premises, except systems

or device's located within the Premises which are intended for

hearing within the; Premises and are not audible more than 25

feet outside of the Premises or (iii) use or permit the

Development to be used in violation of the Permitted Exceptions

or applicable law.   Tenant shall not permit any objectionable or

unpleasant odors to emanate from the Premises or place or permit

any radio, television, lou