EX-10.2 4 asgbbls.txt ASSIGNMENT AND ASSUMPTION OF LEASE THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is made and entered into as of the 31st day of January, 2008 (the "Effective Date"), by and between Eau Claire Equity Fund Limited Partnership, a Tennessee limited partnership (the "Assignor") and AEI Income & Growth Fund XXI Limited Partnership, a Minnesota limited partnership, a fifty-four percent (54%) undivided interest as tenants in common; AEI Income & Growth Fund 23, LLC, a Delaware limited liability company, a sixteen percent (16%) undivided interest as tenants in common; and AEI Income & Growth Fund 26, LLC, a Delaware limited liability company, a thirty percent (30%) undivided interest as tenants in common (collectively, the "Assignee"). RECITALS: A. Assignor and Assignee are parties to that certain Agreement of Purchase and Sale dated January 15, 2008 (the "Agreement"), pursuant to which Assignee is acquiring from Assignor the real property and improvements, located on property more particularly described on Exhibit A attached hereto and incorporated herein by this reference (also referred to herein as the "Property"). B. Pursuant to the terms of the Agreement, Assignor desires to sell, assign, convey, transfer and set over to Assignee and Assignee desires to assume all of Assignor's interest in that certain Lease dated January 20, 1998 (the "Lease"), by and between Assignor and Best Buy Stores, L.P., a Delaware limited partnership (the "Tenant"), including without limitation the obligations of Best Buy Co., Inc. pursuant to Section 54 of the Lease, subject to the terms and conditions set forth below. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, Assignor and Assignee hereby agree as follows: 1. Assignor is the Landlord under the Lease with full right and title to assign the Lease to Assignee as provided herein. The Lease is valid, in full force and effect and has not been modified or amended. So far as is known to Assignor, there is no default by Tenant under the Lease and no rent has been either (i) waived, anticipated, discounted, compromised or released or (ii) paid with respect to or applicable to any period of time after the date hereof. 2. Assignor hereby irrevocably and unconditionally sells, assigns, conveys, transfers and sets over unto Assignee, its heirs, successors and assigns as of the date hereof (the "Effective Date"), all of Assignor's right, title and interest in, to and under the Lease, together with any and all guaranties thereof. 3. Assignee hereby assumes and shall be liable for any and all liabilities, claims, obligations, losses and expenses, including reasonable attorneys' fees arising in connection with the Lease which are actually incurred, and which arise by virtue of acts or omissions occurring thereunder, or as a result of Assignee's failure to fulfill the landlord's duties and obligations accruing under the Lease on or after the Effective Date. Assignor shall indemnify and hold Assignee harmless from any and all liabilities, claims, obligations, losses and expenses, including reasonable attorneys' fees arising in connection with the Lease which arise by virtue of acts or omissions occurring thereunder prior to the Effective Date, or as a result of Assignor's failure to fulfill the landlord's duties and obligations accruing under the Lease prior to the Effective Date. Assignee shall be entitled to receive all income accruing under the Lease from and after the Effective Date. Assignor shall be entitled to receive all income accruing under the Lease prior to the Effective Date. 4. Assignor shall direct the Tenant and any successor tenant under the Lease to pay to Assignee the rent and all other monetary obligations due or to become due under the Lease on or after the Effective Date. 5. This Assignment shall be governed by and construed in accordance with the laws of the state in which the Property is located. 6. All rights and obligations of Assignee and Assignor hereunder shall be binding upon and inure to the benefit of Assignor, Assignee and the heirs, successors and assigns of each such party. 7. This Assignment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Assignment may be detached from any counterpart of this Assignment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages. 8. Whenever the context so requires in this Assignment, all words used in the singular shall be construed to have been used in the plural (and vice versa), each gender shall be construed to include any other genders, and the word "person" shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other entity. [Signatures are on the following page] IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment and Assumption of Lease as of the day and year first above written. ASSIGNOR: EAU CLAIRE EQUITY FUND LIMITED PARTNERSHIP, a Tennessee limited partnership By: /s/ Patricia R Young Patricia R. Young, Its Authorized Agent STATE OF TENNESSEE ) COUNTY OF WILLIAMSON ) Personally came before me on January 30th, 2008, the above named, Patricia R. Young, as authorized agent for Eau Claire Equity Fund Limited Partnership, to me known to be the person who executed the foregoing instrument and acknowledged the same. My Commission Expires: /s/ Rebecca L Carely 1-30-10 Notary Public [notary seal] ASSIGNEE: AEI Income & Growth Fund XXI Limited Partnership, a Minnesota limited partnership By Its General Partner: AEI Fund Management XXI, Inc., a Minnesota Corporation By: /s/ Robert P Johnson Robert P. Johnson, President STATE OF MINNESOTA ) COUNTY OF RAMSEY ) Personally came before me on January 30, 2008, the above named, Robert P. Johnson, President of AEI Fund Management XXI, Inc., the general partner of AEI Income & Growth Fund XXI Limited Partnership, to me known to be the person who executed the foregoing instrument and acknowledged the same. My Commission Expires: /s/ Marissa M Lindberg January 31, 2008 Notary Public [notary seal] AEI Income & Growth Fund 23, LLC, a Delaware limited liability company By Its Managing Member: AEI Fund Management XXI, Inc., a Minnesota corporation By: /s/ Robert P Johnson Robert P. Johnson, President STATE OF MINNESOTA ) COUNTY OF RAMSEY ) Personally came before me on January 30, 2008, the above named, Robert P. Johnson, President of AEI Fund Management XXI, Inc., the general partner of AEI Income & Growth Fund 23 LLC, to me known to be the person who executed the foregoing instrument and acknowledged the same. My Commission Expires: /s/ Marissa M Lindberg January 31, 2008 Notary Public [notary seal] AEI Income & Growth Fund 26, LLC, a Delaware limited liability company By Its Managing Member: AEI Fund Management XXI, Inc., a Minnesota corporation By: /s/ Robert P Johnson Robert P. Johnson, President STATE OF MINNESOTA ) COUNTY OF RAMSEY ) Personally came before me on January 30, 2008, the above named, Robert P. Johnson, President of AEI Fund Management XXI, Inc., the general partner of AEI Income & Growth Fund 26 LLC, to me known to be the person who executed the foregoing instrument and acknowledged the same. My Commission Expires: /s/ Marissa M Lindberg January 31, 2008 Notary Public [notary seal] LEASE THIS LEASE, is entered into and effective as of January 20, 1998, between Eau Claire Equity Fund, Limited Partnership, a Tennessee limited partnership, (hereinafter called "Landlord") and BEST BUY STORES, L. P. a Delaware corporation (hereinafter called "Tenant"). The parties mutually agree as follows: 1. THE PREMISES. Landlord, for and in consideration of the rents, covenants, agreements and stipulations hereinafter mentioned, reserved and contained, to be paid, kept and performed by Tenant, does hereby Lease and rent unto Tenant, and Tenant hereby agrees to Lease and take upon the terms and conditions hereinafter set forth a Building, containing approximately 45,486 square feet constructed by Tenant and then sold to Landlord (the "Building"), together with all other improvements situated on the hereinafter described parcel of land containing approximately 4.48 acres (the "Land") located at 4090 Commonwealth Avenue, Eau Claire, Eau Claire, County, Wisconsin and legally described on Exhibit A attached hereto, subject to the terms and requirements of the liens, restrictions and encumbrances set forth in Exhibit B attached hereto (the "Covenant Documents"). The Land and Building together constitute the "Leased Premises" hereunder. 2. BASE TERM. The Base Term of this Lease (the "Term") shall be twenty (20) years commencing on January 20, 1998 (the "Commencement Date") and ending, on January 19, 2018 (the "Expiration Date") unless sooner terminated pursuant to any provision hereof. If the Commencement Date and/or the Expiration Date are not finally determined on the date this Lease is entered into, Landlord and Tenant shall also execute a Memorandum of Lease Commencement in the form set out on Exhibit C specifying the Commencement Date, and the Expiration Date applicable to this Lease. Said Amendment shall be attached to and become a part of this Lease. 3. RENT. Tenant hereby covenants and agrees to pay Landlord as monthly fixed rent ("Base Rent" for the Premises during the Term the sums set forth below: 1 Years Annual Monthly Rent Rent 1-5 $ 430,000.00 $ 35,833.33 6-10 $ 451,500.00 $ 37,625.00 11-15 $ 474,075.00 $ 39,506.25 16-20 $ 497,778.00 $ 41,481.50 Such Base Rent shall be payable in advance and without demand, deduction or set-off on the first day of every calendar month commencing on the Commencement Date. Base Rent shall be prorated for any partial month at the beginning or end of the Term. Tenant shall pay Base Rent and all other sums or additional rent due hereunder (collectively, "rent") to Landlord at .the following address unless otherwise notified in writing by Landlord: Eau Claire Equity Fund Limited Partnership, 2404 West End Avenue, Suite 202, Nashville, Tennessee 37203 [Telefax (615) 321-3534; Telephone (615) 321- 8566] 4. ACCEPTANCE OF PREMISES.' Tenant has constructed the Building and other improvements on the Leased Premises pursuant to the plans and specifications approved by Tenant and contracts with architects and contractors chosen by Tenant, all of which are itemized in Exhibit D attached hereto (the "Construction- Documents") and pursuant to the requirements of the Covenant Documents, if any. Tenant therefore will be familiar with the designs of the improvements and condition of the Leased Premises as of the Commencement Date, and will be presumed as of such Commencement Date to have accepted the Leased Premises in their then existing condition. To the maximum extent, permitted by law, Tenant waives the implied warranty of suitability for the Leased Premises. Landlord shall cooperate in Tenant's attempt to enforce warranty and other obligations of contractors and suppliers for the original construction of the Lease Premises, but shall have no other responsibility or liability for the design, construction or condition of Leased Premises and makes no warranties with respect thereto, and Landlord shall not be required to make any repairs of any kind whatsoever during the term of this Lease, except under the provisions of Section 19 hereof. Landlord will transfer all contractor and supplier warranties in its possession to Tenant, for the Term of this Lease which transferred warranties shall revert back to Landlord upon termination of said Lease. 2 5. MAINTENANCE AND REPAIRS BY TENANT. tenant shall, at its expense (and Landlord shall have no obligation), keep and maintain the entire Leased Premises, both Building and Land, in good order, condition and repair (as demonstrated by the condition of the Leased Premises at the beginning of the term hereof), including but not limited to maintenance and repair of all structural or load-bearing elements, roofs, walls, foundations, heating, ventilating and air conditioning systems, a building security and monitoring system, windows, walls, doors, electrical systems and equipment, mechanical equipment, plumbing and all other components of the Building, mowing of lawns, care and replacement of plantings, replacing, resurfacing and striping of walkways; driveways and parking areas, and adjacent public sidewalks, removal of snow 'and ice from the Premises and adjacent public sidewalks, removal of trash, maintenance of utility lines and exterior lighting on the Land, and any maintenance, repairs or replacements (or fees or reserves therefor) as may be required by any Covenant Documents. All such maintenance and repair shall keep the Leased Premises in a good state of repair and in a clean, safe, and sanitary condition and in compliance with all applicable laws and insurance regulations. Tenant must make all repairs, corrections, improvements or alterations necessitated by age, Tenant's use, the elements or required pursuant to governmental order or mandate, including but not limited to the Americans with Disabilities Act. Notwithstanding the foregoing, and as long as (1) no notices have been received from any governmental authority as to the condition of the Leased Premises, and (2) Tenant is keeping the teased Premises a condition that prevents waste to, the value of the same, Tenant shall be solely responsible for the day-to-day maintenance decisions for, and activities upon, the Leased Premises,including but not limited to all lawn care, trash removal, painting and other cosmetic maintenance. Tenant expressly waives the benefit of any statute now or hereinafter in effect which would otherwise afford Tenant the right to make repairs, corrections,improvements or alterations at Landlord's expense or to terminate this Lease because of Landlord's failure to keep the Leased Premises in good order, condition or repair, or which would otherwise require Landlord to make repairs, corrections, improvements or alterations. Any and all obligations that Landlord or Tenant may incur under the Covenant Documents as defined in Section 49 and any other agreements to which the Land may be subject as of the Commencement Date and any amendments thereto or modification thereafter shall become the sole obligation of Tenant during the Term of the Lease and any extensions thereof. If Tenant fails to perform its obligations under this Section 5, or under another provision of this Lease, Landlord may at its option (but shall not be required to) enter upon the Leased Premises after ten (10) days prior written notice to Tenant (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Tenant's behalf and put the same in good order, condition and repair, and the cost thereof, together with interest at four percent (4%) per annum over the "Prime Rate" established by the Wall Street Journal (or if the Wall Street Journal no longer publishes its Prime Rate, then the Prime Rate announced by Norwest Bank Minnesota, N.A.) on the date of invoice from Landlord to Tenant (but in no event more than the maximum rate then allowable by law) ("Default Rate") shall become due and payable as additional rental to Landlord together with Tenant's next rental installment. Except for the obligations of Landlord under Section 19 (relating to condemnation of the Premises), it is intended by the parties hereto that Landlord have no obligation, in any manner whatsoever, to repair and maintain the Leased Premises the equipment therein or any part thereof, whether structural or non-structural, all of which obligations are intended to be that of,; Tenant. In no event shall Landlord be obligated to for repairs or replacement any part of the Leased Premises. 6. SPECIAL NET LEASE. This Lease is what is commonly called a "Net, Net, Net Lease" it being understood that Landlord shall receive the rent set forth in Section 3 and Section 41 free and clear of -any and all other impositions, taxes, liens, charges or expenses of any nature whatsoever in connection with the ownership and operation of the Leased Premises. In addition to the rent reserved by Section 3 and Section 41, Tenant shall pay to the parties respectively entitled thereto all property taxes, impositions, insurance premiums, operating charges, maintenance charges, construction costs and any other charges, costs and expenses which arise or may be contemplated under the Covenant Documents or otherwise. Such charges, costs and expenses shall constitute additional rent, and upon the failure of Tenant to pay any of such costs, charges or expenses including, without limitation, utilities pursuant to Section 7 and taxes and assessments pursuant to Section 8, Landlord shall have the same rights and remedies as otherwise provided in this Lease for the failure of Tenant to pay rent including but not limited to the remedies provided in Section 5 hereof relating to Landlord's right (but not obligation) to perform Tenant's obligations hereunder. It is the intention of the parties except as expressly provided herein that this Lease shall not be terminable for any reason by Tenant, and that Tenant shall in no 4 event be entitled to any abatement of, or reduction in, rent payable under this Lease, except as otherwise expressly provided herein. Any present or future law to the contrary shall not alter this agreement of the parties. 7. UTILITIES. Tenant shall contract for in Tenant's name and pay on time and hold Landlord free and harmless from all bills or assessments for light, heat, water, gas, electric, telephone, sewer rentals or charges, and any other expenses arising, out of or incidental to the occupancy of said Building and Leased Premises. No full or partial utility deprivation including,. but not limited to, blackout, brownout, or rationing shall give rise to any abatement of rent nor give rise to any right of Tenant to offset rent or to terminate the Lease. 8. TAXES AND ASSESSMENTS. As additional rent, Tenant agrees and covenants to pay directly to the proper governmental agency, on or before the date each installment becomes due and payable, an amount equal to all "Real Property Taxes" including but not limited to (1) the ad valorem or property,,. taxes [covered below], and all other taxes including commercial rental taxes and other similar taxes levied against the Leased Premises, excepting income taxes, which become due and payable during the Term of this Lease, and (ii) all installments of general, special, ordinary or extraordinary assessments including statutory interest, if any. Landlord shall have the obligation to, if possible, (i) have the tax bills mailed directly to Tenant by the proper governmental agency;-.-and- (ii) for the last lease year of the- Term hereof, furnish an apportionment between Landlord and Tenant based on the number of days of Tenant's last lease year which fall within the then current calendar year. Tenant may, in good faith and in a lawful manner and upon giving, thirty (30) days' prior written notice to Landlord of. its intention so to do; contest in Landlord's name any tax assessment or charge against the Leased Premises, but all costs and expenses incidental to such contest shall be paid by Tenant, and in case of an adjudication adverse to Tenant, then Tenant shall promptly pay such tax, assessment or charge including penalties or late charges, if any. Tenant shall indemnify and save Landlord harmless against any loss or damage arising from such contest and shall, if necessary to prevent a sale or other loss or damage to Landlord, pay such tax, assessment or charge under protest and take such other steps as may be necessary to prevent any sale or loss. Tenant agrees, if requested by Landlord's. lender, to pay its estimated share of Real Property Taxes into a monthly escrow account. 5 Tenant shall promptly, furnish Landlord with satisfactory evidence that all taxes have been paid. If Tenant shall fail to pay any such taxes, Landlord shall have the right to pay the same, in which case Tenant shall repay in full such amount to Landlord with Tenant's next rent installment together with interest at the Default Rate. As used herein, the term "Real Property Tax" shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and any license fees, commercial rental tax, including without limitation, sales, use, gross receipts or value added taxes levied on the rent payable hereunder, improvement bond or other bonds, including statutory interest, levy or tax (other than inheritance, personal income or estate taxes) imposed on the Leased Premises by any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Landlord in the Leased Premises or in the real property of which the Leased Premises are a part, as against Landlord's right to rent or other income therefrom, and as against Landlord's business of leasing the Leased Premises. The term "Real Property, . Tax" shall also include any tax, fee, levy, assessment or charge (i) in% substitution of, partially or totally, any tax, fee, levy, assessment or charge included within the definition of "Real Property Tax", or (ii) the nature of which was previously included within the definition of "Real Property Tax", or (iii) which is imposed as a result of a transfer, either partial or total, of Landlord's interest in the Leased Premises or which is added to a tax or charge included within tip. definition of "Real Property Tax" by reason such transfer, or (iv) which is imposed by reason of this transaction, any modifications or changes hereto, or any transfers hereof. Tenant shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings equipment and all other personal property of Tenant contained in the Leased Premises or elsewhere. When possible, Tenant shall cause said trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real.property of Landlord. If any of Tenant's personal property shall be assessed with Landlord's real property, Tenant shall pay the taxes attributable to Tenant within ten (10) days after receipt of a written statement setting forth the taxes applicable to Tenant's property. 9. TENANT'S IMPROVEMENTS. Subject to the terms of any Underlying Mortgage (as defined in Section 34 hereof), any structural alterations or improvements or any non- structural improvements or alterations costing more than Three Hundred Thousand and No/100 Dollars ($300,000.00) shall require Landlord's consent, which consent shall not be unreasonably withheld. Landlord's consent shall be automatically granted if Landlord does not respond to Tenant's request within thirty (30) days after notice and submission of 'preliminary plans and specifications from Tenant. Subject to the preceding sentence and the terms of any Underlying Mortgage, during the full Term of this Lease, Tenant shall have the right, at any time during the Term, and from time to time, at its own cost and sole expense and liability to place or install within the Leased Premises, such nonstructural leasehold improvements as it shall desire. Unless expressly released by Landlord in writing, all such improvements shall be and remain, at the time of expiration or other termination of this Lease, the property of Landlord without payment or offset unless such improvements are not attached to the Premises. NO such installation or construction by Tenant shall violate any lawful rule or regulation, plat or zoning construction or other law, ordinance or regulation applicable thereto, and all alterations and improvements shall be done and performed in good and workmanlike manner. All costs of any such improvements shall be paid by. Tenant and Tenant shall allow no liens for labor or materials toattach to the Leased Premises by virtue thereof. Tenant shall submit drawings an& specifications of all alterations and improvements to Landlord costing more than One Hundred Thousand and No/100 Dollars ($100,000.00) for Landlord's approval at least thirty (30) days prior to commencement of work, which approval shall not be unreasonably withheld. Landlord's approval of the same shall be automatically granted if Landlord does not comment on the same within said-thirty (30) day period. Tenant shall give Landlord not less than ten (10) days notice prior to , the commencement of any work in, on or about the Leased Premises and Landlord shall have the right to post notices of non-responsibility in or on the Leased Premises as provided by law. Landlord may require that Tenant remove any or all alterations, improvements or additions made by Tenant to the Leased Premises at the expiration of the Term and restore the Leased Premises to its prior condition. Any alterations, improvements and additions in, or about the Leased Premises that Tenant desires to make, or which require the consent of Landlord or which require approval by Landlord of the drawings or specifications therefor, shall be presented to Landlord in written form, with proposed detailed plans. If Landlord shall consent to the alterations, improvements and additions or approve of the drawings and specifications, as the case may be, the consent or approval shall be deemed conditioned upon Tenant acquiring a permit to do so from appropriate governmental agencies, the furnishing of a. copy thereof to Landlord prior to the commencement of the work and the compliance by Tenant of all conditions of said permit in a prompt and expeditious manner. Tenant shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Tenant at, or for use in the Leased Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Leased Premises or any interest therein. To the extent that any alterations, improvements or additions result in the removal from the Building of any building components having salvage value and such components have not been replaced with components having equal or greater value, such salvage value shall paid to Landlord. Any and all alterations, improvements or additions to the Building shall be performed in a good and safe workmanlike manner; shall have all necessary approvals, permits and licenses required by any governing body; and Tenant. shall hold Landlord harmless from any and all costs, expenses, attorney fees, fines, penalties, judgments, or other sums resulting out of any such alterations, improvements or additions by way of citations for codes violations or other violations of regulations or laws governing the Building and Leased Premises. 10. INSURANCE. The Tenant agrees to provide and keep in- force during the Term of this Lease and at its cost and expense the following insurance coverage from an insurance company or companies authorized to do business in the state in which the Land is located: a. Fire and All Risk. Fire and all risk insurance in an amount not less than the Full insurable Value (defined below) of -the Building and improvements on the Land and/or constructed or maintained in conjunction with the Building pursuant to any Covenant Documents, and to keep such insurance in full force and effect for and during the time any Buildings and improvements are located.on the Leased Premises during the term of this Lease. The coverage shall include all risks commonly insured for properties similar to the Leased Premises in the metropolitan area in which the Land is located, including insurance against damage caused by earthquake, flood, hurricane, tornado, windstorm, and other disasters ("Disaster Insurance") in such areas where such natural disasters are reasonably expected to occur. For the purpose hereof "Full Insurable Value" shall mean the replacement cost of the Building and such improvements without allowance for depreciation but excluding, except where covered by Disaster Insurance, footings, foundations, and other portions of improvements which are customarily not insurable, an amount sufficient to cover Tenant's inventory and personalty shall be added to the amount determined to be the "Full Insurable Value". Such policy or policies shall insure Landlord and Tenant, and shall contain a standard mortgagee clause providing for payment of proceeds to any mortgagee or deed of trust holder of the Leased Premises ("Landlord's Lender"), as its interest may appear. b. Public Liability and Property Damage. Public liability 'and property damage insurance with limits of not less than Two Million and No/100Dollars ($2,000,00.00) for injury and death to any one person, and Five Million and No/100 Dollars ($5,000,000.00) for injury or death in any one accident or occurrence per location including property damage,. insuring Landlord and Tenant, and with a cross-liability endorsement covering claims by an insured against another insured. c. Business Interruption. Business interruption insurance covering all rent related to the Leased Premises for a minimum of twelve (12) months. d. Insurance Required by Covenant Documents or Underlying Mortgages. Such insurance as is required to be maintained by either Tenant or Landlord under the Covenant Documents or any Underlying Mortgage, with such coverages, notice requirements and insurance amounts as are specified therein (the "Covenant and Mortgage Insurance"). e. Additional Insureds/Loss Payees. Each policy shall name Landlord and Landlord's Lender, if any, and any third parties to be insured pursuant to the Covenant Documents ("Covenant insureds") as Additional Insureds and/or Loss Payees, as their interests may appear, and shall contain a covenant that should 9 such policies be canceled, assigned or materially changed during the policy period, the insurer will mail a notice thereof to Landlord, and Landlord's Lender and/or Covenant Insureds, if any, at least thirty (30) days in advance. Certificates of insurance evidencing the existence and amounts of such insurance, shall be delivered to Landlord by Tenant prior to Tenant's occupancy of any portion of the Leased Premises. No such policy shall be cancelable except after thirty (30) days written notice to Landlord. Tenant shall, prior to the expiration of any such policy, furnish Landlord, any Landlord's Lender and any Covenant Insureds with renewals or "binders" thereof together with evidence of thepayment of premiums therefor, or Landlord may order such insurance and charge the cost thereof to Tenant, which amount shall be paid by Tenant upon demand. The insurance, as to the interest of Lender therein, shall not be invalidated by any act or neglect of Landlord or Tenant or any owner of the Leased Premises, by any foreclosure or any other proceedings or notices thereof relating to the Leased Premises, nor by any change in the title or ownership of the Leased Premises nor by occupancy of the Leased Premises for purposes more hazardous than are 'permitted by such policy. f. Deductibles. Subject to the requirements of any Covenant and Mortgage Insurance; the-fire and all risk coverage specified herein shall have a deductible no greater than twenty percent (20%) of the Full Insurable Value of the Building and improvements to be insured thereby. Subject to the terms of any Covenant Insurance, the public liability and property damage coverage specified herein shall have a deductible no greater than Five Hundred Thousand and No/100 Dollars ($500,000.00). Provided, however, in the event Tenant's "net worth" (as defined by generally accepted accounting principles) should go below One Hundred Fifty Million and No/100 Dollars ($150,000,000.00), neither the fire and all risk coverage specified herein nor the public liability and property damage coverage specified herein shall have deductibles of greater than One Hundred Thousand and No/100 Dollars ($100,000.00). Tenant shall be liable for any deductible amount. The policies of insurance required to be carried by Tenant shall be primary and not in excess of any other insurance available to Landlord. It 10 shall be the responsibility of Tenant not to violate nor knowingly permit to be violated any condition of the policies required under this Lease. Neither the issuance of any such insurance policy nor the minimum limits specified in this Section 10 shall be deemed to limit or restrict in any way Tenant's liability arising under or out of this Lease. g. Waiver of Subrogation. To the extent such waivers are permitted by insurance carriers, Landlord and Tenant waive their respective right of recovery against the other and the officers, employees, agents and representatives of such other party for any direct or consequential damage to the property of the other including its interest in the Leased Premises by fire or other . casualty to the extent such damage is insured against under a policy or policies of insurance to be maintained by Tenant hereunder. Each such insurance policy carried by either Landlord or Tenant shall include a waiver of the insurer's rights of subrogation. Such waiver shall in no way be construed or interpreted to limit or restrict any indemnity or other waiver made by Tenant under the terms of this Lease. h. No Impairment of Coverage. Tenant shall not carry any stock of goods or do anything in or about the Leased Premises which will impair or invalidate the obligation of any policy of insurance on or in reference to the Leased Premises or the Building. Landlord shall have the right to require that the amount or types of insurance coverages required of Tenant hereunder be adjusted from time to time reflect insurance customarily required for similar properties in the metropolitan area in which the Land is located. Insurance coverages shall be written by an insurance company or companies licensed to do business in the state in which the Land is located with a Best's rating of at least "A-1 NH. Review of Coverage. Landlord and Tenant agree to review the insurance coverages provided herein at least once every five (5) years and to increase the limits, if necessary, in accordance wit reasonable commercial standards. 11 11. DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD. If the Leased Premises are totally or partially damaged or destroyed by storm, fire, lightning, earthquake, or from any other cause whatsoever, during the Term of this Lease whether or not such damage or destruction is covered by any insurance required to be maintained under Section 10. hereof, then, subject to terms of any Underlying Mortgage, Tenant shall repair, restore and rebuild the premises in accordance with applicable building and zoning codes at the time of rebuilding to substantially the same condition immediately prior to such damages or destruction and this Lease shall remain in full force and effect, provided, however, that Tenant shall have the right, with the consent of Landlord (which shall not be unreasonably withheld) to replace the Leased Premises with a different structure so long as (a) the value the Leased Premises with such structure is no less than the value of the Leased Premises immediately prior to the date of casualty and no less than the square footage shown in Article 1 of this Lease, and (b) the new structure can be built and occupied under the then applicable laws, codes, ordinances, and zoning, restrictions. Such repair, restoration and rebuilding (all of which are herein called "repair") shall be commenced within a reasonable time however no more: than thirty (30) days after such damage or destruction has occurred and permits necessary to authorize such rebuilding have been issued following reasonable pursuit of such permits by Tenant, and shall be diligently pursued to completion. a. Insurance Proceeds. Subject to terms of any Underlying Mortgage, the- -proceeds of any insurance- maintained under Section 10 hereof shall be made available to Tenant for payment of costs and expense of repair, provided however,': that such proceeds may be made available to Tenant subject to reasonable conditions, including, but not limited to architects' certification cost, retention of percentage of such proceeds pending recordation of a notice of completion and a lien and completion bond (or payment and performance bond) to insure against mechanic's or materialmen's liens arising out of the repair and to insure completion of the repair, all at the expense of Tenant. In the event the insurance proceeds are insufficient to the cost of repair, then any amounts required over the amount of the insurance proceeds received that are required to complete said repair shall be promptly deposit with Landlord or a title company acceptable to Landlord and Tenant in advance of commencing repairs. 12 b. Abatement of Rent. Notwithstanding the partial or total destruction of the Premises and any part thereof, and notwithstanding whether the casualty is insured or not, there shall be no abatement of rent or of any other obligation of Tenant hereunder including, without limitation, payment of operating expenses, insurance premiums and Real Property Taxes, by reason of such damage or destruction unless the Lease is terminated by virtue of another provision of this Lease. c. Waiver. Tenant waives the provisions of any statutes which relate to termination of leases when the thing leased is destroyed and agrees that such event shall be governed by the terms of this Lease. 12. ABATEMENT. Except only as provided in Section 1 9, the Tenant's obligations to pay rent and to perform all of the other covenants and agreements which Tenant is bound to perform under the terms of this Lease shall not terminate, abate or be diminished during any period that the Leased Premises or any part thereof are untenantable regardless of the cause of such untenantability. 13. COMPLIANCE WITH LAWS, ETC. Tenant, shall use the. Leased Premises as a general business, or as a store for other retail products and supplies, or, with the consent of Landlord. (which shall not be unreasonably withheld) for any other lawful purpose, and, in the use and occupancy of the Leased Premises, and in the conduct of its business and activities, shall at its own cost and expense secure and maintain all necessary licenses and permits required for the conduct of its business. Tenant shall not use the Leased Premises or permit anything to be done in or about the Leased Premises which will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated. Tenant shall at its sole cost and expense comply with all laws, statutes, ordinances and governmental rules, regulations or requirements of any board of fire underwriters (including all modifications and improvements required thereby) now in force or which may hereafter be in force relating to or affecting the condition, use or occupancy of the Leased Premises, including without limitation the Americans With Disabilities Act. Tenant shall observe all plat and deed restrictions of record. Without limiting the generality of the 13 foregoing, Tenant will not generate, store, bury, discharge or release on or from the Leased Premises any hazardous substances or waste in a manner which would give rise to penalty or liability under the Resources Conservation Recovery Act 42 U.S.C. 6901 et sea., or any other federal, state or local law. Upon ten (10) days' notice, Tenant shall provide Landlord with copies of all documents information evidencing. Tenant's compliance with any laws, ordinances, orders, rules and regulations requested by Landlord. Tenant shall notify Landlord in writing immediately of any threatened or actual notice, citation, warning or report regarding Tenant's alleged failure to cause the Leased Premises to comply with all laws, ordinances, orders, rules and regulations. 14. WASTE; NO LIENS; USE; NO HAZARDOUS MATERIALS OR USES, A. Except as to liens arising as a result of work performed by or at the direction of Landlord, which shall be the sole responsibility of Landlord, Tenant agrees that during the Term hereof it shall not do or suffer any waste to the Land, Building or Leased Premises, or cause, suffer or permit any liens to attach to or to exist against the Land, Building or Leased Premises by reason of any act or omission of Tenant or person claiming through Tenant or by reason of its failure to perform any act required of it hereunder Agrees to save and hold harmless Landlord from and against any such lien(s) or claims of lien(s). Provided, however, Tenant shall not be required to pay or discharge any lien against the Leased Premises so long as Tenant has given Landlord notice of its intent to contest such lien and Tenant is in good faith contesting the validity or amount thereof and has given to Landlord such security as Landlord has reasonably requested to assure payment of such lien and to prevent the sale, foreclosure or forfeiture of the Land, Building or Leased Premises by reason of non-payment. In the event that any lien does so attach, and is not released within thirty (30) days after written notice to Tenant thereof or if Tenant has not indemnified Landlord against such lien within said thirty (30) day period, Landlord, in its sole discretion, may pay and discharge the same and relieve the Leased Premises therefrom, and Tenant agrees to repay and reimburse Landlord as additional rent upon demand for the amount so paid by Landlord. The existence of any mechanic's,' laborer's, materialmen's, supplier's or vendor's lien, or any right in respect thereof, shall not constitute a violation of this paragraph if payment is not yet due and 14 payable upon the contract or for the goods or services in respect of which any such lien has arisen. On final determination of the lien or claim of lien Tenant will immediately pay any judgment rendered, and all costs and charges, and shall cause the lien to be released or satisfied. In addition, Landlord may require Tenant to pay Landlord's attorneys' fees and costs in participating in such action if Landlord shall decide it is in its best interest to do so. Tenant shall not permit the Leased Premises to be used for (a) illegal purposes; or (b) uses that are dangerous to the Leased Premises or to the public; or (c) a cocktail lounge, bar, disco, bowling alley, pool hall or billiard parlor, adult bookstore, adult amusement facility, or any facility selling, renting or displaying pornographic materials, a secondhand store, auction house or flea market. Tenant agrees that Tenant's use of the Leased Premises and any assignee and/or sublessee of Tenant use of the Leased Premises are limited by and subject to the Covenant Documents as more fully set forth on the attached Exhibit B. Tenant will not use or permit the use of the land, Building or Leased Premises in any manner which would result or would with the passage of time result in the creation of any easement or prescript right. Tenant shall not use. or occupy the Leased Premises, or knowingly permit them to be used or occupied, contrary to any statute, rule, order, ordinance, requirement or regulation certificate of occupancy affecting the same, or which would make void or Voidable any insurance then in force with respect thereto to which would make it impossible to obtain fire or other insurance thereon required to be,furnished hereunder at Tenant's expense, or which would cause structural injury to the improvements or cause the value or usefulness of the Leased Premises, or any portion thereof, to diminish (reasonable,. wear and tear excepted), or which would constitute a public or private nuisance or waste, and Tenant agrees that it will promptly, upon discovery of any such use, take all necessary steps to compel the discontinuance of such use. During any period of time in excess of forty-eight (48) hours when the Building is not open for business, Tenant shall notify Landlord of any such closure of the Building and take appropriate security and safety measures to reasonably guard the Leased Premises from damage, vandalism and the deposit of refuse or waste in or about the Leased Premises and reasonably protect persons in or about the Leased Premises from death and personal injury. During such periods of time, Tenant shall submit to Landlord, at least quarterly, a report of such safety and security measures that have been taken by Tenant, confirming that Tenant has inspected the Leased Premises and reporting the condition of 15 the Leased Premises and any damage to the Leased Premises or any personal injuries known to Tenant that have occurred in or about the Leased Premises. B. Hazardous Materials: 1. No Toxics. To the best of Tenant's knowledge, information and belief, no electrical transformers, light fixtures or other equipment containing polychlorinated biphenyl are or were located on the Leased Premises at any time during or prior to Tenant's possession, construction of the Building, and/or occupancy thereof, except as disclosed in the PSA (as defined in Section 1 5 (b)). Tenant hereby represents and warrants that Tenant has not, during the construction of the Building, and shall not install any asbestos containing materials or equipment containing polychlorinated biphenyl, or any Hazardous Materials (as defined in Section 15(e) hereof) in amounts in excess of those prescribed by law, in the Leased Premises. 2. No Storage Tanks.. To the best of Tenant's knowledge, information and belief, no storage tanks (either above-ground or underground) for gasoline or any other substances are or were located on the Leased.Premises at any time during or prior to Tenant's possession, construction of the- Building and/or occupancy thereof, except as disclosed in the PSA. Upon the termination of this Lease, or sooner if required by law, Tenant shall, remove and/or remediate any Hazardous Materials and contaminated soil or around water, if any, at Tenant's sole cost, and expense, which may then be present upon the Land. 3. Indemnification. Tenant hereby agrees to indemnify, defend, protect, and hold harmless Landlord and Landlord's Lender, if any, and Landlord's and Landlord's Lender's employees, agents and representatives from and against any and all loss, damages or liability including, without Limitation, (i) all damages directly or indirectly arising out of the use, Generation, storage, transportation, treatment, release, threatened release or disposal of. Hazardous Materials upon the Land, including diminution 16 in value of the Leased Premises; and (ii) the cost of any required or necessary repair, remediation, cleanup or detoxification and the preparation of any closure or other required plans or reports, whether such action is required or necessary prior to or following transfer of title to the Leased Premises, to the full extent that such action is attributable, directly or indirectly, to the presence or use, generation, storage, transportation; release threatened release or disposal of Hazardous Materials by Tenant and any of Tenant's agents, employees, contractors or invitees during the ' Term of this Lease. This agreement to indemnify, defend, protect and hold harmless Landlord and Landlord's Lender (if any) shall be in addition to any other obligations or liabilities Tenant may have to Landlord or Landlord's Lender, if any, at common law under all statutes and ordinances or otherwise and survive the termination of the Lease to the extent of acts or omissions of Tenant occurring prior to the termination of the Lease. 15. TENANT REPRESENTATIONS. Tenant acknowledges, represents, and. warrants to Landlord and Landlord's successors and assigns that: a. Occupation of Leased Premises. Tenant shall be ,deemed the prior owner and occupant of the Leased Premises immediately prior to Landlord's purchase of the Leased Premises from Tenant; b. PSA. Tenant has caused to prepare a Phase I Environmental Site Assessment of the Leased Premises, dated as of, 19_ (the "PSA") a complete copy of which has been furnished and certified to Landlord and Landlord's Lender, if any; c. No Environmental Audit by Landlord. Tenant acknowledges that in reliance upon Tenant's presumed and stipulated prior knowledge of the use and physical condition of the Leased Premises (as well as Tenant's warranties and representation, set forth herein), Landlord has not itself performed an environmental audit or preliminary site assessment on the Leased Premises; 17 d. No Violation of Health and Safety Laws. Tenant represents, to the best of knowledge, information and belief, that the Leased Premises are not in violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene, health and safety, or, to the best of its knowledge, information and belief, to the use, generation, storage, transportation or disposal of Hazardous Materials [as defined in Section 15(e)] or to the environmental condition on, under or about the Leased Premises, including, but not limited to, soil and ground water condition, and no notice from any governmental body has been served upon or delivered to Tenant claiming any such violation; e. No Hazardous Materials. Except as has been previously disclosed to Landlord in the PSA, neither Tenant nor, to the best of Tenant's knowledge, information an belief, any third party has at any time during or prior to Tenant's possession, construction of the Building, and/or occupancy of the Leased Premises used, generated, manufactured, stored or disposed of on, under or about the Leased Premises, or transported to or from the Leased Premises, any Hazardous Materials. Tenant shall not conduct, nor permit, any of the foregoing activities to occur on the Leased Premises during the term. The term "Hazardous Materials" as used in this Lease shall include, but not be limited to, any flammable materials, explosives radioactive materials, hazardous or toxic substances which are or become regulated by any local Governmental authority, the state in which the Land is located or the United States Government or which would require removal, treatment or other remedial action. The term "Hazardous Materials" includes, without limitation, any material or substance which is (i) listed or defined as a "hazardous waste," "extremely hazardous waste," "restricted hazardous waste," or "hazardous substance", or the like, under any municipal, state or federal law, code or other regulation; (ii) defined as "hazardous substances," "hazardous materials," or "toxic substances" in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. 9601 et sea., The Hazardous Materials Transportation Act 49 U.S.C. 1801, et seq., and the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et sea.; (iii) petroleum products; (iv) asbestos; (v) polychlorinated biphenyl; (vi) designated as a "hazardous 18 substance" pursuant to Section 3.11 of the Federal Water Pollution Control Act (33 U.S:C. 1317); (vii) any substance which is subject to the reporting requirements of the Federal Emergency Planning and Community Right-to-Know Act; (viii) defined as a "hazardous substance" pursuant to the Toxic Substances Control Act, 15 U.S.C. 2601; or (ix) any substance which contaminates soil or ground water and causes degradation of the soil and/or water to the extent that mitigation methods are needed to restore the soil or water to its natural state; f. No Asbestos. Tenant agrees that no asbestos containing materials will be installed within the Leased Premises or 'exposed in the Leased Premises through demolition, renovation or otherwise, at any time during or prior to Tenant's possession and/or occupancy thereof; and g. Signage. All signs located on the Leased Premises have been approved and been installed in accordance with local ordinances and any other agreements, i.e., Covenant Documents as listed on the attached Exhibit B, to which the Land may be subject as of the Commencement Date. 16. LANDLORD'S PERFORMANCE OF TENANT'S DUTIES. a. Performance at Tenant's Sole Expense. If Tenant should default in the performance of any covenant or agreement on its part to be performed by virtue of any provision of this Lease, Landlord may, after ten (10) days'. notice in the case of defaults in the payment of rent, additional rent or other monetary defaults, or after thirty (30) days' notice in the case of non-monetary defaults (or, in the case of emergencies, reasonable attempts at prior notice), perform the same for the account of Tenant, and Tenant hereby authorizes Landlord to come upon the Leased Premises for such purposes and while on the Leased Premises to do. all things reasonably necessary to accomplish the correction of such default. If Landlord, at any time, is compelled to pay or elects to pay any sum of money by reason of the failure of Tenant, after ten (10) days' notice, to 19 comply with any provision of this Lease, or if Landlord is compelled to incur any expense, including reasonable attorneys' fees and costs, in instituting, prosecuting or defending any action or proceeding instituted by reason of any default of Tenant hereunder, the sum or sums so paid by Landlord with all interest costs and damages including any loss of rent, shall be deemed to be additional rent hereunder. All covenants and agreements to be performed by Tenant under any of the term, of this Lease shall be performed by Tenant at Tenant's sole expense and without abatement of rent or setoff. If Tenant shall fail to observe and perform any covenant, condition, provision or agreement contained in this Lease or shall fail to perform, any other act required to be performed by Tenant, Landlord may, upon notice to Tenant, without obligation, and without waiving or releasing Tenant from any default or obligations of Tenant, make any such payment or perform any such obligation on Tenant's part to be performed. All sums so paid by Landlord and all costs incurred by Landlord, including reasonable attorneys' fees and costs, shall be payable to Landlord on demand together with interest thereon at the Default Rate, and Tenant covenants to pay any such sums, and Landlord shall have (in addition to any other right or remedy hereunder) the same rights and-remedies in-the event of Tenant's non-payment thereof as in the case of default by Tenant in the payment of. rent. b. Interest on Past Due Amounts. Any amount due from Tenant to Landlord which is not paid within five (5) days after receipt by Tenant of Landlord's written notice that said amount is past due shall bear interest at the Default Rate from the date . such payment is due until paid, but the payment of such interest shall not excuse or cure any default by Tenant under this Lease. c. Late Charqe. Upon receipt by Tenant of written notice from Landlord that Tenant is more than ten (10) days' late in paying any installment of rent due under this Lease, Tenant shall pay to Landlord a late charge equal to five percent (5%) of each delinquent amount of rent and any subsequent delinquent amount of rent. The parties agree that the amount of such late charge 20 represents a reasonable estimate of the cost and expense that would be incurred by Landlord in processing each delinquent payment of rent by Tenant and that such late charge shall be paid to Landlord as liquidated damages for each delinquent payment, but that the payment of such late charge shall not excuse or cure any default by Tenant under this Lease. d. Purpose of Interest and Late Charge. The parties agree that the payment of late charge and the payment of interest provided for in this Section 16 are distinct and separate from one another in that the payment of interest is to compensate Landlord for the use of Landlord's money by Tenant, while the payment of a late charge is to compensate Landlord for the additional administrative expense incurred by Landlord in handling and processing delinquent payments, but excluding attorneys' fee and attorneys' costs incurred with respect to such delinquent payments. 17. NOTICE TO MORTGAGEE. At the written request of Landlord and for so long as there remains of record a mortgage or mortgages of Landlord's interest in the property, and Tenant has been given written notice of the identity and address of such mortgagee(s), Tenant shall use reasonable effort to-give-a- duplicate -notice of each notice sent to Landlord to such mortgagee. Failure to give notice to mortgagee shall not invalidate the Tenant's notice to Landlord or expose Tenant to liability to mortgagee. Tenant agrees that if in any notice to Landlord the performance of some act is required or compliance with some provision hereof is requested and Landlord does not, within the allotted time, perform such act or comply with such provision, then mortgagee shall have thirty (30) days after mortgagee's receipt of such notice in which to perform such act or comply with such provision for and on behalf of Landlord, and Tenant shall have no right to take action otherwise permitted it, or to terminate this Lease, if the mortgagee shall perform and comply within said thirty (30) days. In the event the act or thing to be complied with within said thirty (30) day period cannot by its nature reasonably be completed within such period, mortgagee shall be deemed to have complied therewith in the event it commenced the performance of compliance within said thirty (30) day period and thereafter completes the same with due diligence. The granting to the mortgagee of additional time in which to comply shall not be deemed in any manner to release or relieve Landlord from the obligations of Landlord 21 under this Lease. The said mortgagee is hereby authorized to enter upon the Leased. Premises following reasonable notice to Tenant and while thereon to do anything necessary to correct such default. For purposes of this Lease any reference to a mortgage or mortgages shall include references to deeds of trust and beneficiaries thereof. 1 8. SUBLETTING AND ASSIGNMENT. Provided that Tenant shall remain liable under all of the terms and conditions of this Lease for the full remainder of the Term and any extensions thereof, Tenant shall have the absolute right to assign or sublet the Premises, in whole or in part, without the consent of the Landlord. So long as Tenant is not publicly traded, a change of ownership of fifty-one percent (51 %) or more of Tenant shall be deemed an assignment of this Lease for purposes of this paragraph. Transfers in connection with a public offering shall not be deemed an assignment of Lease. If the stock of Tenant is publicly held, there shall be no restriction on subletting and assignment, except for a use not approved by Landlord, whose approval will not be denied or delayed unreasonably, but in no event shall Tenant be released of any obligation hereunder. The Tenant shall have the right to assign this Lease, or to sublet the Leased Premises to any of Tenant's affiliates, subsidiaries or parent corporation(s). A change of ownership of fifty-one (51 %)_or more of the.. stock ,of Tenant shall not be considered an assignment if. it occurs in connection with a bona fide merger or acquisition or change in the state of incorporation of Tenant. At least thirty (30): days prior to commencement of any sublease or assignment, and as a condition thereof, Tenant shall furnish to Landlord (for Landlord's review of the same for compliance with the terms of this Lease) a copy of the fully executed sublease or assignment document. a. No Release. No assignment or subletting of any form shall serve to release Tenant of any obligations hereunder or alter the primary liability of Tenant for the payment of rent and other sums due Landlord hereunder or for the performance of any other obligations to be performed by Tenant under this Lease, whether or not the sublessee or assignee has attorned to the Landlord. b. Acceptance of Rent or Performance. Landlord may accept any rent or performance of Tenant's obligations from any person 22 other than Tenant and such acceptance of any rent or performance shall not constitute a waiver or estoppel of Landlord's rights to exercise its remedies for the default or breach by Tenant of any of the terms, covenants or conditions of this Lease. c. No Need to Exhaust Security. In the event of any default or breach of Tenant's obligations under this Lease, Landlord may proceed directly against Tenant, or any one else responsible for the performance of Tenant's obligations under this Lease, including the sublessee or assignee, without first exhausting Landlord's remedies against any other person or entity responsible therefor, or any security held by Landlord or Tenant. d. Assumption. Any assignment or subletting permitted hereunder shall be conditioned upon the assignee or sublessee assuming and agreeing in a writing addressed to Landlord and Landlord's Lender, if any, to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Tenant during the term of said assignment or sublease. e. Provisions to be Included in Sublease. The following terms and conditions shall apply to any subletting by Tenant-of all or any part of the Leased Premises shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein. (1) Assignment of Rents. Tenant hereby assigns and transfers to Landlord all of Tenant's interest in all rents and income arising from any sublease of all or a portion of the Leased Premises heretofore or hereafter made by Tenant, and Landlord may collect such rent and income and apply same toward Tenant's obligation under this Lease; provided, however, that except during a period in which a breach has occurred in the performance of Tenant's obligations under this Lease, and remains uncured Tenant may, except as otherwise provided in this Lease, receive, collect and enjoy the rents accruing 23 under such sublease. Landlord shall pay to Tenant any portion of such rents, .collected from any sublessee that exceed the rental and other monetary obligations then due from Tenant under the Lease. Landlord shall not, by reason of this assignment of rents or any other assignment of sublease to Landlord, nor by reason of the collection of the rents from a sublessee, be deemed liable to the sublessee 'for any failure of Tenant to perform and comply with any of the Tenant's obligations to such sublessee under such sublease. Tenant hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Landlord stating that a default exists in the performance of Tenant's obligation under this' Lease, to pay to Landlord the rents and other charges due and to become due under the sublease. Sublessee shall rely 'upon any such statement and request from Landlord and shall pay such rents and other charges to Landlord without any obligation or right to inquire as to whether such default exists and notwithstanding any notice from or claim from Tenant to the contrary, Tenant shall have no right or, claim against said sublesseeor, until the default has been cured, against Landlord, for any such rents and other charges so paid by sublessee. to Landlord. (2) Attornment. In the event of a breach by Tenant in the performance of its obligations under this Lease, and a resulting termination of Lease by Landlord, Landlord, at its option and without any obligation to do so, may require any sublessee to attorn (i.e., agree to become tenant to a new owner or landlord of the same property) to Landlord, in which event Landlord shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Landlord shall not be liable for any prepaid rents or security 24 deposit paid by such sublessee to such sublessor or for any prior defaults or breaches of such sublessor under such sublease. (3) Consent of Landlord Required. Any matter or thing requiring the consent of the sublessor under a sublease shall also require the consent of Landlord herein, if Landlord's consent is required under this lease. (4) Conditions of Sublease. Each sublease shall provide that (i) it is subject and subordinate to this Lease and any Underlying Mortgage (defined in Section 34 below); (ii) Landlord may enforce the provisions of the sublease including collection of rent; (iii) if this Lease is terminated for any reason, Landlord may, at its option, either (A) terminate the sublease, or (B) takeover all of the rights and interest of Tenant; as sublessor, under such sublease, in which case such sublessee shall attorn to . Landlord; and (iv) any notices to be given to Tenant, as sublessor, by the sublessee shall simultaneously be given Landlord. If Landlord elects to takeover the rights and interest of a Tenant, Landlord shall not (1) be liable for any previous act or omission of Tenant under the sublease; (2) be subject to any defense or offset in favor of the sublessee against Tenant; or (3) be bound by any modification to the sublease made without Landlord's written consent or by any prepayment by sublessee, more than one month's rent. 19. CONDEMNATION. In the event all of the Leased Premises, or such portion thereof as will make the Leased Premises unusable for the purposes of Tenant, be condemned by any legally constituted authority for any public use or purpose, then in either of said events, the Term hereby granted shall cease, at the option of either Landlord or Tenant on thirty (30) days' written notice from the time when possession thereof is taken by said public authorities, and rent shall be accounted for as between Landlord and Tenant as of that date. 25 Said termination, however shall be without prejudice to the rights of either Landlord or Tenant, or both, to recover compensation and damage caused by condemnation from the condemnor, except: (i) Tenant shall have no rights for the value of its leasehold; and (ii) neither Tenant nor Landlord shall have any rights in any separate award made to the other' party by the condemnor. In the event less than all of the Leased Premises is taken or condemned for a public or quasi-public use and the portion of the Leased Premises is taken or condemned for a public or quasi- public use and the portion of the Leased Premises which is not taken may be reasonably suitable for the purposes of Tenant by repair or restoration, this Lease will not terminate. Landlord shall, in such event, subject to the terms of any Underlying Mortgage (as defined in Section 34 hereof) promptly commence and diligently complete the repair and restoration of the Leased Premises so that upon completion the Building will constitute a complete architectural unit with an appearance, character and commercial value as nearly as possible equal to the value of the Building immediately prior to the taking, provided however, Landlord shall have no obligation to expend more on reconstruction than the net amount of a condemnation award or received by way of settlement in lieu thereof or make a repair or restoration if the estimated cost therefore would reduce the Landlord's award. There shall be an abatement of annual Base Rent after such taking which shall be equal to the percentage of total area of the Building after the taking and Landlord's restoration thereof as relates to the total area of the Building immediately prior to said taking thereunder, to the termination of this Lease. 20. MUTUAL INDEMNIFICATION. Subject to provisions of Section 10(f), each party ("Indemnifying Party") agrees to indemnify and save harmless the other ("Indemnified Party") against and from any and all of the following if not covered by the insurance to be maintained by Tenant pursuant to Section 10 hereof: claims by and on behalf of any persons, firms or corporations, arising from the conduct or management of, from any work or thing whatsoever done by or on behalf of the Indemnifying Party in or about, of its activities upon or (in the case of Tenant) occupancy, the Leased Premises during the Term of this Lease, and will further indemnify and save the Indemnified Party harmless against and from any and all claims arising from any breach or default on the part of the Indemnifying Party in the performance of any covenant or agreement on the part of such Indemnifying Party to be performed pursuant to the terms of this Lease, or from any violation or failure to comply with any law, ordinance or regulation, or from any act or negligence of such Indemnifying Party, or any of its agents, contractors, servants, employees, 26 licensees, or invitees or arising from any accident, injury or damage whatsoever caused to any person, firm or corporation, occurring during the Term of this Lease, in or about the Leased Premises, or upon or under the sidewalks and the land adjacent thereto, and from and against all costs, reasonable and necessary counsel fees, expenses and liabilities incurred in or about any such claim or action or proceeding brought thereon, and in case any action or proceeding is brought against the Indemnified Party by reason of any such claim, the Indemnifying Party upon notice from the Indemnified Party covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to the Indemnified Party. Landlord's liability is limited to Landlord's interest in the Leased Premises and will be cancelled automatically upon any failure by Tenant to maintain in full force and effect. all insurance required to be furnished by Tenant under the provisions of this Lease. 21. INSPECTION OF PREMISES. Tenant agrees to permit Landlord and any mortgagee of the Leased Premises, and their agents, to inspect the Leased Premises at all reasonable times, and to come upon the Leased Premises- if necessary to perform any act which Tenant has failed to perform, as provided elsewhere in this Lease. Tenant shall be given reasonable prior notice of any such entry (except in the case of emergency) and any such entry shall be undertaken in a manner that reasonably minimizes interference with Tenant's use and operations and Tenant shall have the right to have one or more of its employees present during such inspection. 22. DEFAULT. At the election of Landlord, Tenant shall be in default under this Lease if one or more of the following events (herein called "Defaults") shall happen and be continuing, namely: a. Failure to make the punctual payment of any rent, additional rent or other monetary payment herein agreed to be paid and such failure shall continue for a period of five (5) days after written notice is given by Landlord to Tenant of such failure; b. Tenant shall have filed a petition in bankruptcy or prayed for any relief under the Federal Bankruptcy Law or made an assignment for the benefit of creditors or consent to the entry of an order for relief in involuntary bankruptcy; 27 c. An attachment or execution shall have been levied upon the Tenant's property in or interest under this Lease, which shall not have been satisfied or released or the enforcement thereof stayed or superseded by an appropriate proceeding within thirty (30) days thereafter; d. An involuntary petition in bankruptcy or for reorganization or arrangement under the Federal Bankruptcy Law shall have been filed against Tenant and either an order for relief is entered or such involuntary petition is not withdrawn, dismissed, stayed or discharged within sixty (60) days from the filing thereof; e. A Receiver or Trustee shall have been appointed for the property of Tenant or Tenant's business or assets and the order or decree appointing such Receiver or Trustee shall have remained in force undischarged or unstayed for thirty (30) days after the entry of such order or decree; f. Tenant admits in writing its inability to pay its debts as they become due; Tenant shall have failed to perform or observe any other covenant, agreement or condition to be performed or kept by the Tenant under the terms and provisions of this-Leaser-and-such failure shall continue for thirty (30) days after written notice thereof has been given to Tenant by Landlord, unless Tenant shall have commenced corrective action within such thirty (30) days and thereafter diligently completes the same; the foregoing provision shall not require Tenant to occupy the Leased Premises and Tenant shall be entitled to vacate the Leased Premises so long as it otherwise complies with its obligations hereunder, unless the Covenant Documents otherwise provide; however said time period shall be inclusive of any and all statutory time periods for nonpayment of rent and reach of covenants in Lease. 23. LANDLORD'S REMEDIES UPON DEFAULT. Upon the occurrence of any Default by Tenant, Landlord, at its option, may have one or more of the following remedies, in addition to all of the rights and remedies provided at law or in equity. 28 a. Entry by Landlord. Landlord may cure the default for the account of Tenant, arid Tenant hereby authorizes Landlord to come upon the Leased Premises for such purposes and while on the Leased Premises to do all things reasonably necessary to accomplish the correction of such Default. If Landlord, at any time, is compelled to pay or elects to pay any sum of money by reason of the occurrence of a Default by Tenant or if Landlord is compelled to incur any expense, including reasonable attorneys' fees and attorney's costs, property management fees, in instituting, prosecuting or defending any action or proceeding instituted by reason of any Default of Tenant hereunder, the sum or sums so paid by Landlord with all interest costs and damages, including any loss of rent, shall be deemed to be additional rent hereunder and such action by Landlord shall not be deemed a waiver by Landlord of Tenant's default or any other remedy available to Landlord. b. Performance By Landlord. Landlord may, upon notice to Tenant, without obligation, and without waiving or releasing Tenant from any Default or obligations of Tenant, make any such payment or perform any such obligation on Tenant's part to be performed. All sums so paid by Landlord and all costs incurred by lessor, including reasonable attorney's fees and costs, shall be payable to-Landlord-on -demand-together with interest thereon- at-the Default Rate, and Tenant covenants to pay any such sums, and Landlord shall have (in addition to any other right or remedy hereunder) the same rights and remedies in the event of Tenant's non-payment thereof as in the case of default by Tenant in the payment of rent. c. Repossession: Damages. Landlord may without further notice repossess the Leased Premises and at any time thereafter may terminate this Lease by written notice to Tenant. In such event, Landlord shall be entitled to recover liquidated damages (in lieu of paying any further deficiency amounts under Section 23(d) below) a sum of money equal to the total of (i) the cost of recovering the Leased Premises; (ii) the unpaid rent earned at the time of termination, plus interest thereon; (iii) late charges on unpaid rent and accrued interest thereon; (iv) the present value of the balance of the rent for the remainder of the term using a 29 discount rate of ten percent (10%); (v) reasonable costs of. reletting and refurbishing the Leased Premises including, without limitation, leasing commissions paid, tenant improvement costs, rent concessions and repairs to the Leased Premises; and (vi) any other sum of money and damages reasonably necessary to compensate Landlord for the detriment caused by Tenant's Default. d. Termination of Right of Possession. Landlord may immediately terminate Tenant's right of possession of the Leased Premises by written notice to Tenant with or without terminating this Lease, ti and without notice or demand enter upon the Leased Premises or any part thereof and take absolute possession of the same, expel or remove Tenant and any other person or entity who may be occupying the Leased Premises and change the locks. In the event that Landlord terminates Tenant's right to possession without terminating this Lease, Landlord shall engage a commercial real estate broker to relet the Leased Premises or any part thereof for such terms and such rents as Landlord may reasonably elect. In the event Landlord shall elect to so relet, the rent received by Landlord from such reletting, shall be applied first to the payment of any sums owing from Tenant to Landlord hereunder other than rent due hereunder from Tenant. to Landlord second to the payment of any reasonable cost of such reletting, including; without limitation, refurbishing costs and leasing commissions, and third, to the payment. of rent due and unpaid hereunder, and Tenant shall satisfy and pay any deficiency upon demand there for from time to time. Any such entry into the possession of the Leased Premises by Landlord under this Section 23 shall be without liability or responsibility for damages to Tenant and shall not be in lieu of or in substitution for any other rights of Landlord hereunder at law or in equity. Tenant further agrees that Landlord may file suit to recover any sums due Landlord under the terms of this Section 23 and that no recovery of any portion due Landlord hereunder shall be any defense to any subsequent action brought for any amount not theretofore reduced to judgment in favor of Landlord. Reletting of the Leased Premises shall not be construed as an election on the part of Landlord to terminate this Lease and notwithstanding any such reletting without termination, Landlord may at any time 30 thereafter elect to terminate this Lease for such previous breach and recover liquidated damages as of the date of termination as set forth in Section 23(c) hereof. e. No Termination Without Written Notice. No re-entry by Landlord or any action brought by Landlord to oust Tenant from the Leased Premises after the occurrence of a Default shall operate to terminate this Lease unless Landlord shall give written notice of termination to Tenant, in which event Tenant's liability shall be as above provided. In the event of a Default by Tenant, Landlord shall have the right of an injunction or a restraining order against Tenant and the right to invoke any remedy allowed by law or in equity Whether or not other remedies, indemnities or reimbursements are herein provided. f. Suit for Specific Performance or Damages. Landlord may bring suit against Tenant for the specific performance of this Lease by Tenant or for damages directly or indirectly arising out of Tenant's breach of any term or covenant of this Lease. Remedies Are Cumulative. The rights and remedies given to Landlord in this Lease are distinct, separate and cumulative remedies, and except as provided herein, no one of them, whether or not exercised by Landlord, shall be deemed to be an exclusion of any of the others. No right or remedy granted to Landlord herein is intended to be exclusive of any other right or remedy hereunder or now or hereafterexisting in law or equity or by statute. In the event of termination of Tenant's right to possession, by Landlord after the occurrence of a Default, Tenant Waives any and all rights to redeem the Leased Premises either provided by any statute now in effect or hereafter enacted. 24. CONDITION OF PREMISES ON TERMINATION. Upon termination of this Lease for any reason, Tenant covenants and agrees to remove all of its personal property, including fixtures and equipment installed by Tenant upon the Leased Premises which are not permanently attached (except utility connections and equipment), and Tenant shall repair any damage caused by the removal thereof, and shall leave the Leased Premises in as good repair and clean condition as at the commencement of this Lease, normal and reasonable 31 wear and tear and usage excepted. Tenant shall, at Landlord's election, either (i) remove at Tenant's sole expense, any title encumbrances relating to the Leased Premises caused by Tenant's interest in the Lease; or (ii) provide Landlord with a bond for the total amount of said title encumbrance. All Fixtures (other than trade fixtures and equipment not for the operation of the Building), improvements, alterations and equipment for the operation of the Building now or hereafter permanently attached to the Leased Premises, including without limitation all plumbing, electrical, and HVAC equipment and all doors, ceiling tiles and lighting fixtures, shall be and remain Landlord's property and shall not be removed from the Leased Premises without Landlord's prior written consent. All movable fixtures and equipment are and shall remain Tenant's property, and Landlord agrees to sign any and all waivers reasonably required by Tenant in order to complete any fixture financing arrangements relative to said movable fixtures and equipment. Landlord shall have no interest in any movable fixtures and equipment owned by Tenant, or installed in or upon the Leased Premises solely at the cost and expense of. Tenant. In the event said property is thereafter removed from the Leased Premises by Tenant, or any party holding a lien on, a security interest in, or a reversionary interest in the property, or by any agent or representative thereof or any purchaser thereof, pursuant to the exercise or enforcement of any rights incident to the interests created, Tenant or party holding such interest shall repair any damage necessitated by the removal of such property as may be necessary to restore the Leased Premises to good condition and repair, excepting only reasonable wear and tear, without any cost or expense to Landlord. 25. SUCCESSORS AND ASSIGNS. Subject to Section 18, the obligations and responsibilities of the parties to this Lease shall be binding upon, and the rights and benefits shall inure to ,the successors and assigns of the parties hereto; but the liabilities of any successor to the interest of the Landlord hereunder shall be limited to the performance of those obligations which arise and accrue during the period of ownership of the Leased Premises by any such successor. In the event that Landlord sells, assigns or transfers the Leased Premises, and the buyer/transferee assumes in writing all obligations of Landlord under this Lease, then from and after the effective date of such sale, assignment or transfer, Landlord shall have no further liability under this Lease. 32 26. NOTICES. Unless otherwise specifically provided herein, all notices and demands hereunder shall be in writing, and shall be given by registered or certified mail, return receipt requested and shall be deemed given if it is deposited in the United States mail, with sufficient postage prepaid thereon to carry it to the addressed destination or shall be delivered by facsimile transmission (with hard copy sent no later than 24 hours following transmission by United States mail, postage prepaid), to Seller or Buyer at the following addresses: Eau Claire Equity Fund Limited Partnership 2404 West End Avenue, Suite 202 Nashville, Tennessee 37203 ,Facsimile: (615) 321-3534 Confirmation: (615) 321-8566 Best Buy Stores, L. P., Corporate Headquarters 7075 Flying Cloud Drive Eden Prairie, Minnesota 55344 Attention: Legal Dept. - Real Estate Facsimile: (612) 947-2899 Confirmation No: (612) 947-2082 Robins, Kaplan,. Miller & Ciresi 2800 La Salle Plaza 800 LaSalle Avenue South Minneapolis, Minnesota 55402-2015 Attention: Steven A. Schumeister, Esq. Facsimile: (612) 339- 4181 Confirmatio n No: (612) 349-8500 Buyer and Seller may designate an additional or another address upon giving notice to the other parties pursuant to this Section. Notice given in any other manner other than as stated herein, shall be deemed effective only upon receipt by the party to whom such notice is given. 27. NO ORAL AGREEMENTS. It is expressly agreed between Landlord and Tenant that there is no verbal understanding or agreement which in any 33 way changes the terms, covenants and conditions herein set forth, and that no modification of this Lease and no waiver of any of its terms and conditions shall be effective unless made in writing and duly executed by the authorized officers of the necessary parties or party. Landlord and Tenant hereby agree that all prior or contemporaneous oral understandings; agreements or negotiations relative to the leasing of the Leased Premises are merged into this Lease. 28. NO WAIVER. The failure of Landlord or Tenant to insist, in one or more instances, upon the strict performance by Tenant or Landlord of any of the provisions of this Lease shall not be construed as a waiver of any right or remedy available for any future breach of such provisions. Receipt by Landlord of rent with knowledge of the breach of any provisions hereof shall not be deemed a waiver of any right or remedy available for such breach. 29. WARRANTIES OF TENANT; ESTOPPEL CERTIFICATE. Tenant warrants to and for the benefit of any mortgagee of the Leased Premises that as of the date of execution of this Lease it neither has nor claims any defense to this Lease nor any offset against the rentals payable or other obligations required of Tenant hereunder, and Tenant warrants that it has not paid any rental-in advance for a period of more than one (1) month-and covenants- that it will not, without such mortgagee's written consent, at any time during the term hereof prepay any rental for a period longer than one month. Tenant shall at any time and from time to time upon not less than five (5) business days prior written notice by Landlord, execute, acknowledge and deliver to Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), that the Lease has not been collaterally assigned, the dates to which the Base Rent and any other charges have been paid in advance, if any, confirming the Term and extension terms of the Lease, stating that the Tenant has accepted the Leased Premises in their then current condition and is in possession of the Leased Premises, stating whether or not to the best knowledge of Tenant, Landlord is in default in the performance of any covenant, agreement or condition contained in this Lease and, if so, specifying each such default of which Tenant may have knowledge, stating that the 34 Tenant has no right of set-off against past or future rents due under the Lease, that no rent has been prepaid for more than one (1) month in advance, and containing any other information and certifications which reasonably may be requested by Landlord or the holder of any Underlying Mortgages. Any such statement delivered pursuant to this Section 29 may be relied upon by a prospective purchaser of the fee of the Leased Premises or any mortgagee, ground lessor or other like encumbrancer thereof, or any assignee of any such encumbrancer upon the Leased Premises. 30. CARDING. Landlord may place signs at the Leased Premises "For Rent" or "For Sale" ninety days before the termination of this Lease. Landlord may enter the premises at reasonable hours and upon reasonable notice to exhibit same to prospective purchasers, tenants and mortgagees and to inspect or make repairs. 31. LANDLORD AND TENANT. This Lease shall create the relationship of landlord and tenant between Landlord and Tenant. 32. TIME OF ESSENCE. Time is of the essence of this Lease. 33. DEFINITION. "Landlord" as used in this Lease shall include the original Landlord hereunder, its successors and assigns. "Tenant" shall include the original Tenant hereunder, its successors and if this-Lease shall be validly assigned or sublet, shall include also Tenant's assignee or sublessee, as to premises covered by such assignment or sublease. "Landlord" and "Tenant" include male and female, singular and plural, corporation, partnership or individual, as may be appropriate for the particular parties. 34. MORTGAGE. Landlord shall have the right to place trust deeds or mortgages against the Leased Premises as security for a loan obtained or to be obtained by Landlord. Tenant agrees to execute such documents as may be reasonably required by the lending agency making any such existing or subsequent loans, including attornment agreements, subordination agreements and estoppel certificates, if requested; provided that if a mortgage or trust deed is to be placed on the Leased Premises, the Landlord and lender shall execute a subordination and non-disturbance agreement in a form consistent with the terms of this Lease and reasonably acceptable to Tenant. 35 If Landlord's interest in the Leased Premises is sold or conveyed upon the exercise of any remedy provided for in any Underlying Mortgages, or otherwise by operation of law, then, so long as Tenant is not in default hereunder; (a) this Lease (and any amendments, modifications and extensions thereof) will not be affected in any way, and Tenant will attorn and recognize the new owner as Tenant's landlord under this Lease and Tenant will confirm such attornment in writing within ten (10) days after request; and (b) the new owner shall not be (i) liable for any act or omission of Landlord under this Lease occurring prior to such sale or conveyance; or (ii) subject to any defense or offset, abatement or reduction of rent because of any default of Landlord under this Lease occurring prior to such sale or conveyance; (iii) .liable to Tenant for any rent paid more than one (1) month in advance; or (iv) bound by any amendment or modification of this Lease made without the lender's consent. This Lease is subject and subordinate to all mortgages, trust deeds, ground Leases or other encumbrances which may now or hereafter may affect the Leased Premises (the "Underlying Mortgages") and to all renewals, modifications, consolidations, replacements and extensions of any such Underlying Mortgages provided that the holder of such Underlying Mortgage and Tenant shall execute a subordination and non-disturbance agreement in a form consistent with the terms of this Lease and reasonably acceptable to Tenant prior to the date such Underlying Mortgage is recorded as a lien against the Leased Premises. 35. ZONING. Tenant covenants that the Leased Premises are zoned properly so as to enable Tenant to operate the Leased Premises as a retail consumer electronics store and for any activities usually related thereto. Tenant shall furnish Landlord and Landlord's Lender, if any, a certificate from the appropriate governmental authority addressed to Landlord and Landlord's Lender, if any, stating that the premises are so zoned and such use does not violate any applicable ordinance, permit, zoning or building code. Prior to any change in use of the Leased Premises, Tenant shall furnish Landlord and Landlord's Lender, if any, a similar certificate stating that the proposed use of the Leased Premises is permitted under all applicable zoning or building codes or permits. Landlord cannot guarantee future zoning or changes in permitted uses, and Tenant assumes the risk thereof. 36 36. LANDLORD'S CONSENT. In all matters referred to in this Lease, where Landlord's consent or approval is required, Landlord agrees that Landlord will not unreasonably withhold Landlord's consent or approval, except where this Lease indicates that Landlord may act in its discretion. 37. LEGAL EXPENSE: If Landlord retains the services of attorneys and successfully recovers possession of the Leased Premises, or successfully recovers any sum due but not paid after proper notice has been given by Landlord prior to any suit being filed, then all such costs and expenses, including reasonable attorneys' fees and costs, incurred by Landlord shall be paid by Tenant. If any action, arbitration or proceeding (including any appeal thereof) is brought by Landlord or Tenant (whether or not such action is prosecuted to judgment) to enforce its respective rights under this Lease or to enforce a judgment ("Action"), (i) the unsuccessful party therein shall pay all costs incurred by the prevailing party therein, including reasonable attorneys' fees and costs; and (ii) as a separate right, severable from any other rights set forth in this Lease, the prevailing party therein shall be entitled to recovery its reasonable attorneys' fees and costs incurred in enforcing any judgment against the unsuccessful party therein, which right to recover such post- judgment attorneys' fees and costs shall be included in any such judgment. The right to recover 'post-judgment attorneys' fees shall (i) not be deemed waived if not included in any judgment; (ii) survive the final judgment in any Action and-(iii) not be deemed merged into, such judgment. The rights, and obligations of the parties under this Section 37 shall survive the termination of this Lease. 38. TITLE OF LANDLORD. Landlord expressly covenants and agrees that as of the Commencement Date of the Term of this Lease, it will be the owner of the fee simple title to the Land and Building and other improvements subject to the Covenant Documents as set forth on the attached Exhibit B and to the Underlying Mortgages and documents related thereto, if any, and subject to any liens, encumbrances or restrictions arising from or existing during Tenant's prior ownership of the Leased Premises. Landlord further covenants that Tenant, on paying the monthly rental and observing and performing all other terms and conditions contained in this Lease, shall have quiet and peaceful possession of the Leased Premises for the full Term, or extensions thereof subject to the provisions of this Lease. 37 3 39, LIMITATIONS ON LANDLORD'S LIABILITY. It is expressly understood and agreed that if Tenant obtains a money judgment against Landlord resulting from any default or other claim arising under this Lease, that judgment shall be satisfied only out of Landlord's right, title and interest in the Leased Premises, and no other real, personal or mixed property of Landlord (or any of the officers, directors, stockholders or partners, as.applicable, which comprise Landlord, if any) wherever situated shall be subject to levy to satisfy such judgment. 40. FINANCIAL STATEMENTS.Within ninety (90) days of the end of each of Tenant's fiscal years during the Term of this. Lease (including the optional renewal term, if exercised) Tenant shall furnish to Landlord, at no cost to Landlord, a copy of the audited financial statements for Tenant's fiscal year just ended. Tenant acknowledges that this undertaking is of substantial value to Landlord because Landlord's rights to such financial statements may affect the availability or cost of Landlord's financing. 41. OPTION TO EXTEND LEASE. Provided that Tenant has not been in Default for a period of six months next preceding the termination of this Lease, and the property is being occupied, both when exercising its option to extend and at the commencement of the renewal Term, Tenant shall have the option to extend the Term of this Lease for three successive additional renewal terms of five years each commencing at the expiration date of the original Term or prior renewal Term hereof (as the case may be) on the same terms and conditions as the original Term except that the annual Base Rent shall be as follows: ANNUA L MONTHLY YEARS RENT RENT 21-25 $522,668.00 $43,555.67 26-30 $548,801.00 $45,733.42 31-35 $576,241.00 $48,020.08, Tenant shall give Landlord written, notice of its exercise of the option for the first renewal Term not less than 270 days before the expiration date of the original Term. Tenant shall give Landlord written notice of its exercise of the option for the second or third renewal Term not less than two hundred-seventy 38 (270) days before the expiration date of the then renewed Term, as the case may be. 42. GOVERNING LAW. This Lease shall be performed, construed and enforced, in accordance with the laws of the state of in which the Land is located. 43. HEADINGS. The headings used in this Lease are for convenience only and shall not have any bearing or meaning with respect to the content or context of this instrument. 44. HOLDING OVER. Tenant shall have no right to retain possession of the Leased Premises beyond the expiration or earlier termination of the Lease. If Tenant holds over after the expiration of the Term, with or without the express or implied consent of Landlord, such tenancy shall be from month-to-month only, arid not a renewal hereof or an extension for any further Term, and such month-to-month tenancy shall be subject to each and every, term, covenant and agreement contained herein; provided, however, that Tenant shall pay as Base Rent during any holding over period, an amount equal to one hundred fifty percent (150%) of the Base Rent payable immediately preceding the expiration of the Term. Nothing in this Section 44 shall be construed as a consent by Landlord, to any holding. over_ by Tenant and Landlord expressly reserves the right to require Tenant to surrender possession of the Leased Premises upon the expiration of the Term or upon the earlier termination hereof and to assert any remedy in law or equity to evict Tenant and/or collect damages in connection with such holding over. 45. RIGHTS ARE CUMULATIVE. All rights, powers and privileges conferred hereunder upon the parties shall be cumulative, but not restricted to those given by law. 46. MEMORANDUM OF LEASE. Either party may, at its sole cost, prepare and record a Memorandum of Lease at the location where the deed of title to the Leased Premises is of record. The other party shall join in executing such Memorandum on request. 39 47. AUTHORITY TO SIGN LEASE. If Tenant is a corporation, then the persons executing this Lease on behalf of Tenant represent and Warrant to Landlord that they are duty authorized to execute and deliver this Lease on Tenant's behalf in accordance with a duty adopted resolution of the Board of Directors of Tenant. Landlord warrants to Tenant that the person or persons executing this Lease on behalf of Landlord are duty authorized to execute and deliver this Lease on Landlord's behalf. 48. INVALIDITY. If any term or provision of this Lease, the deletion of which would not adversely affect the receipt of any material benefit by either party hereunder, shall be held invalid or unenforceable to any extent, the remaining terms, conditions and covenants of this Lease shall not be affected thereby and each of said terms, covenants and conditions shall be valid and enforceable to the fullest extent permitted by law. 49. CONDITIONS AND COVENANTS. Each provision of this Lease performable by Tenant shall be deemed both a covenant and a condition. Landlord and Tenant hereby acknowledge that the Leased Premises are subject to the Covenant Documents as set forth on the attached Exhibit B. Tenant hereby agrees to assume, for the Term of this Lease (including any extensions thereof) all of the rights and obligations of the owner of the Leased Premises pursuant to said covenants, conditions and-restrictions, and Landlord shall cooperate with Tenant in Tenant's enforcement of any rights thereunder. Tenant's failure to timely comply with or satisfy any of the obligations contained therein shall be deemed a material default under this Lease. Tenant shall promptly furnish to Landlord any notices or mailings Tenant receives related to the Covenant Documents. Tenant will pay as additional rent hereunder throughout the Term of this Lease (and will indemnify and hold Landlord harmless from any obligation to pay the same) all Landlord's share of the costs and expenses of the maintenance and operation of any such parking and other common areas, at the times, in the amounts and in the manner set forth in the Covenant Documents as set forth on the attached Exhibit B. 50. SECURITY. Tenant hereby assumes responsibility for and-shall take all reasonable security measures for the Leased Premises. 40 51. INTERPRETATION. The Lease has been fully negotiated and no 'provision shall be construed for or against Tenant or Landlord, and this Lease shall be interpreted in accordance with its general tenor in 'n effort to reach an equitable result. 52. ASSIGNMENT. Except as permitted by-Section 18 hereof, Tenant shall not assign, collaterally or otherwise, nor pledge, encumber or mortgage its interest in this Lease or in the Leased Premises without Landlord's Lender's or Landlord's prior written consent (which' may be withheld in the discretion of ' Landlord's Lender or Landlord). 53. TELEFAX & COUNTERPART. This Lease may be executed in one or more counterparts, each of which shall be deemed an original, all of which together constitute the same instrument. A faxed signature shall have the same effect as an original. 54. GUARANTOR: Best Buy Co., Inc. is a Minnesota corporation and the 100% owner of Best Buy Stores, L. P., a Delaware limited partnership, the. Tenant under the Lease. Best Buy Co., Inc. is the ultimate holder of 100% of the legal and beneficial interest of Best Buy Stores, L. P. through Best Buy Co., Inc.'s sole ownership of all the issued and outstanding voting shares of both the general partner, BBC Property Co., a Minnesota corporation, and the limited partner, BBC Investment Co. 'Best Buy Co., Inc. as an inducement to Eau Claire Equity Fund. Limited Partnership, a Tennessee limited partnership to purchase the subject property and enter into this Lease, all of which Best Buy Co., Inc. acknowledges is valuable consideration, guarantees payment of all sums and performance of all obligations of Tenant . [THIS SPACE INTENTIONALLY LEFT BLANK] . 41 IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed as of the day and year first written above. Date: January 15, 1998 LANDLORD: EAU CLAIRE EQUITY FUND, LIMITED PARTNERSHIP, a Tennessee limited partnership' By: /s/ Patrica R Young PETER THYSSEN, General Partner by his attorney in fact Patricia R Young pursuant to Power of Attorney dated December 15, 1997 Date: January 20, 1998 TENANT: BEST BUY STORES, L. P., a Delaware limited partnership By its general partner, BBC Property Co., a Minnesota corporation By: /s/ Robert C Fox Name: Robert C Fox Its: V.P. Date: January 20, 1998 GUARANTOR:- BEST-BUY CO. INC., a Minnesota corporation By: /s/ Robert C Fox Name: Robert C Fox Its: Sr V.P. Exhibit A to Lease Property Description Land ins the State of Wisconsin, County of Eau Claire, described as follows: Part of Lot 6, Plat of Oak Pointe, described as follows: Lot 8, of the Certifited Survey Map recorded in Volume 4, Page 97 and 98 of the Eau Claire County Registry, located in the Nrothwest 1/4 of the Southeast 1/4, the Southwest 1/4 of the Southeast 1/4, and the Southeast 1/4 of of the Southeast 1/4 all in Section 35, Township 27 North, Range 9 West, City of EauClaire, Eau Claire County, Wisconsin, more particularly described as: Commencing at the Southwest corner of said Section 35, thence N 88 43' 29" E. on the South section line, 2,582.70 feet to the South 1/4 corner of said Section 35, thence N. 00 14' 29" W. on the North-South 1/4 line, 1,031.35 feet; thence S 85 46' 32" E. 46.21 feet; thence continuing S 85 46' 32" E 160.00 feet to the Southwest corner of said Lot 6, thence N 41 16' 57" E 257.49 fee to the Southerly right-of-way of Commonwalth Avenue, thence N 88 45' 02" E.502.00 feet; thence 113.97 feet along the arc of a curve to the left having a radius of 300.45 feet, a central angle of 21 44' 04" and a113.29 foot chord that bears N 77 53'00" E thence N 67 00' 58" E148.10 feet to the point of beginning; thence 213.34 feet along the arc of a curve to the right having a radius of 260.00 feet, a central angle of 47 00' 50" and a 207.41 foo tchord that bears S 89 28' 37" E;thence S 44 55' 58" E 183.73 feet; thence S 32 15' 06" E 204.97 feet; thence S 41 39' 38" E 200.00 feet; thence S 48 20' 22" W.268.25 feet; thence N 41 54'07" W 294.58 feet; thence N 64 26'35" W 54.23 feet; thence N 41 54' 07" W 207.92 feet; thence N 03 58'30"W 194.25 feet; thence N 24 18' 47" E 45.93 feet to the point of beginning. Subject to existing easements. Also known as: Lot 8 of Certified Survey Map #713 recorded in Volume 3 of Certified Survey Maps, Page 390 as Document #596743, re-recorded as Certified Survy Map #768 in Volume 4 of Certified Survey Maps, Page 97 as Document #607512. Tax Parcel #15-4416 Together with those appurtenant easements as recited in Slope Easement Agreement recorded as Document No. 597414, recorded as Document NO 597489, Reciprocal Easement and Operation Agreement recorded as Document No. 597454, First and Second modification recorded as Document Nos. 687773 and698954, and Easement for Erection of a Panel recorded as Document No. 597417.