Document:

ASSIGNMENT OF PURCHASE AGREEMENT

      THIS ASSIGNMENT made and entered into this 12th day of
November 2003, by and between AEI FUND MANAGEMENT,  INC.,  a
Minnesota corporation, ("Assignor") and AEI INCOME &  GROWTH
FUND   XXII   LIMITED   PARTNERSHIP,  a  Minnesota   limited
partnership ("Assignee");

     WITNESSETH, that:

     WHEREAS, as executed by Specialty Restaurant Group, LLC
and  notarized on October 28, 2003 and AEI Fund  Management,
Inc.  and  notarized on November 6, 2003,  Assignor  entered
into  a  Purchase  Agreement, and as may be further  amended
("the Agreement") for that certain property located at  2901
East  Central  Texas  Expressway, Killeen,  TX   76543  (the
"Property") with Specialty Restaurant Group, LLC, as Seller;
and

      WHEREAS, Assignor desires to assign an undivided fifty
percent (50.0%) of its rights, title and interest in, to and
under the Agreement to Assignee as hereinafter provided;

      NOW, THEREFORE, for One Dollar ($1.00) and other  good
and  valuable  consideration, receipt  of  which  is  hereby
acknowledged,  it is hereby agreed between  the  parties  as
follows:

     1.    Assignor  assigns all of its  rights,  title  and
     interest in, to and under the Agreement to Assignee, to
     have  and  to  hold  the same unto  the  Assignee,  its
     successors and assigns;

     2.    Assignee  hereby  assumes all  rights,  promises,
     covenants,   conditions  and  obligations   under   the
     Agreement  to be performed by the Assignor  thereunder,
     and  agrees  to be bound for all of the obligations  of
     Assignor under the Agreement.

All other terms and conditions of the Agreement shall remain
unchanged and continue in full force and effect.

AEI FUND MANAGEMENT, INC.
("Assignor")

By: /s/ Robert P Johnson
        Robert P. Johnson, its President

AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
("Assignee")

BY: AEI FUND MANAGEMENT XXI, INC.

By: /s/ Robert P Johnson
        Robert P. Johnson, its President

                     PURCHASE AGREEMENT

                       Killeen, Texas

      This Purchase Agreement (the "Agreement") entered into
and effective as of the  day of October 2003, by and between
Specialty Restaurant Group, LLC (the "Seller") and AEI  Fund
Management,  Inc., a Minnesota corporation, or  its  assigns
(the "Buyer").

1.    Property.  Seller holds an undivided 100% interest  in
the   fee  title  to  that  certain  real  property  legally
described  in  the  attached  Exhibit  "A"  (the  "Parcel").
Seller  wishes  to  sell and Buyer wishes  to  purchase  the
Parcel and all improvements thereon (the "Improvements")  on
the  Parcel  (the Parcel and the Improvements  collectively,
the "Property").

2.   Closing Date.  The closing date on the Buyer's purchase
of  the Property (the "Closing Date"). shall be the date  on
which  the Seller shall have sold substantially all  of  its
"Tia's  Tex  and Mex" restaurants to Tia's Restaurant,  Inc.
pursuant  to  the  terms  of  that  certain  Asset  Purchase
Agreement  (the  "Asset  Purchase Agreement")  dated  as  of
October  10,  2003  entered  into  by  and  among  Specialty
Restaurant Group, LLC and SRG-1, LLC, as Sellers thereunder,
and Tia's Restaurant, Inc., as Buyer thereunder.

3.   Purchase Price.  The purchase price for the Property is
$2,070,000  (the  "Purchase  Price").    If  all  conditions
precedent  to  Buyer's  obligations to  purchase  have  been
satisfied,  Buyer  shall  deposit the  Purchase  Price  with
Lawyer's Title Insurance Company (the "Closing Agent") on or
before the Closing Date.

     Within five (5) business days of full execution of this
Agreement,  Buyer will deposit $ 0 (the "Earnest Money")  in
an escrow account with the Closing Agent.  The Earnest Money
will be credited against the Purchase Price paid by Buyer at
closing  when  and  if  the transaction contemplated  herein
closes and the sale is completed.

     The balance of the Purchase Price, $2,070,000, is to be
deposited  by Buyer into an escrow account with the  Closing
Agent on or before the Closing Date.

4.    Escrow.   Escrow shall be opened by  Seller  with  the
Closing  Agent upon execution of this Agreement. A  copy  of
this  Agreement  will be delivered to the Closing  Agent  by
Seller  and will serve as escrow instructions together  with
any  additional instructions required by Seller and/or Buyer
or  their  respective counsels.  Seller and Buyer  agree  to
cooperate  with  the Closing Agent and sign  any  additional
instructions,  agreements  or  indemnifications   reasonably
required by the Closing Agent to open or close escrow.

5.    Title.   Buyer shall obtain a commitment for  an  TLTA
Owner's  Policy  of Title Insurance (TLTA owner-most  recent
edition)  issued by a nationally recognized title  insurance
company  acceptable to Buyer (the "Title Company"), insuring
marketable  title  in  the Property, subject  only  to  such
matters  as  Buyer may approve and contain such endorsements
as  Buyer  may  require,  including  extended  coverage  and
owner's  comprehensive  coverage (the  "Title  Commitment").
The  Title  Commitment shall show Seller as the present  fee
owner of the Property and show Buyer as the fee owner to  be
insured.   The  Title  Commitment  shall  also  include   an
itemization   of   all  outstanding  and   pending   special
assessments  and  an  itemization  of  taxes  affecting  the
Property and the tax year to which they relate, shall  state
whether  taxes  are  current and if not,  show  the  amounts
unpaid,  the  tax parcel identification numbers and  whether
the tax parcel includes property other than the Property  to
be  purchased.   All easements, restrictions, documents  and
other items affecting title shall be listed in Schedule  "B"
of the Title Commitment.  Copies of all instruments creating
such exceptions must be attached to the Title Commitment.

      Buyer  shall be allowed Five (5) business  days  after
receipt of the Title Commitment and copies of all underlying
documents  or  until  the  end of  the  Contingency  Period,
whichever  is  later  to  be consistent  with  Article  6.01
hereof,  for  examination and the making of  any  objections
thereto,  said  objections to be made in writing  or  deemed
waived.  If any objections are so made, the Seller shall  be
allowed thirty (30) days to cure such objections or  in  the
alternative  to  obtain  a commitment  for  insurable  title
insuring over Buyer's objections.  If Seller shall decide to
make no efforts to cure Buyer's objections, or is unable  to
obtain  insurable title within said thirty (30) day  period,
this  Agreement  shall be null and void and  of  no  further
force and effect and the Earnest Money shall be returned  in
full  to Buyer immediately and neither party shall have  any
further duties or obligations to the other hereunder.

      The  Buyer shall also have Five (5) business  days  to
review  and  approve  any easement, lien,  hypothecation  or
other  encumbrance placed of record affecting  the  Property
after  the  date of the Title Commitment. If necessary,  the
Closing  Date  shall  be  extended by  the  number  of  days
necessary  for the Buyer to have Five (5) business  days  to
review  any  such items.  Such Five (5) business day  review
period shall commence on the date the Buyer is provided with
a  legible copy of the instrument creating such exception to
title.   The Seller agrees to inform the Buyer of  any  item
executed  by  the  Seller  placed of  record  affecting  the
Property  after  the date of the Title Commitment.   If  any
objections  are so made, the Seller shall be allowed  thirty
(30)  days to cure such objections or in the alternative  to
obtain  a  commitment  for  insurable  title  insuring  over
Buyer's  objections.   If Seller shall  decide  to  make  no
efforts  to cure Buyer's objections, or is unable to  obtain
insurable  title  within said thirty (30) day  period,  this
Agreement shall be null and void and of no further force and
effect  and the Earnest Money shall be returned in  full  to
Buyer  immediately and neither party shall have any  further
duties or obligations to the other hereunder.

6.   Due Diligence and Contingency Period.

6.01 Due  Diligence Documents and Contingency Period.  Buyer
     shall have until the end of the business day on October
     8,  2003 (the "Contingency Period") to obtain such  Due
     Diligence Documents it may desire and to conduct all of
     its  inspections, due diligence and review  to  satisfy
     itself  regarding  each  item, the  Property  and  this
     transaction.

     After receipt and review of the Due Diligence Documents
or  after  Buyer's  inspection of the  Property,  Buyer  may
cancel  this Agreement for any reason in its sole discretion
by   delivering   a  cancellation  notice,  return   receipt
requested, to Seller and Closing Agent prior to the  end  of
the  Contingency  Period, in which event the  Earnest  Money
shall  be returned in full to Buyer immediately and  neither
party  shall have any further duties or obligations  to  the
other hereunder.  Such notice shall be deemed effective upon
receipt by Seller.

     6.02  Form of Closing Documents.  Prior to the  end  of
the  Contingency Period, Seller and Buyer shall agree on the
form of the following documents to be delivered to Buyer  on
the Closing Date by Seller as set forth in this document:

          (a)  General warranty deed;

          (b)  Seller's  Affidavit for the  benefit  of  the
               Title  Company,  in form sufficient  for  the
               Title Company to insure title to the Property
               in  the  form required under Article 12(a)(4)
               hereof, with so called "gap" coverage;

          (c)  FIRPTA Affidavit; and

In  the  event  that Seller and Buyer do  not  reach  mutual
agreement  on the form of the above described documents  (a)
through (d) prior to the end of the Contingency Period, this
Agreement  may be terminated by either Seller  or  Buyer  by
such party notifying the other of such election to terminate
on  or prior to the expiration of the Contingency Period, in
which  event the Earnest Money shall be returned in full  to
the  Buyer  immediately and neither  party  shall  have  any
further duties or obligations to the other hereunder.

       It   shall  be  a  condition  precedent  to   Buyer's
obligations  to  close hereunder that  there  have  been  no
material changes in any of the information reflected in  the
Due  Diligence Documents after the date of such document and
prior to closing.

      Until this Agreement is terminated or the Closing  has
occurred,  the  Seller  shall  deliver  to  the  Buyer   any
documentation  that  comes in the Seller's  possession  that
modifies any of the Due Diligence Documents or could  render
any  of  the  Due Diligence Documents materially inaccurate,
incomplete or invalid.  The Buyer shall, in any event,  have
five (5) business days before the Closing Date to review any
such  document and, if necessary, the Closing Date shall  be
extended  by the number of days necessary for the  Buyer  to
have  five (5) business days to review any such document  or
documents.

7.    Closing  Costs.   Closing  costs  shall  be  allocated
between  the  parties  as set forth in  the  Asset  Purchase
Agreement.

8.    Real  Estate Taxes and Assessments.  Seller represents
to  Buyer that to the best of its knowledge, all real estate
taxes  and  installments  of  special  assessments  due  and
payable  on or before the Closing Date have been or will  be
paid  in  full  as  of the Closing Date.  It  is  understood
between  Seller and Buyer that all unpaid levied and pending
special assessments are paid by the Seller and shall be  the
responsibility of the Seller.

     9.    Prorations. The Buyer and the Seller, as  of  the
Closing Date, shall prorate the following items as set forth
in  the  Asset  Purchase Agreement: (ii) ad  valorem  taxes,
personal  property  taxes, charges or assignments  affecting
the  Property  (on  a  calendar year basis),  (iii)  utility
charges, including charges for water, gas, electricity,  and
sewer,  if any, (iv) other expenses relating to the Property
which  have  accrued but not paid as of  the  Closing  Date,
based upon the most current ascertainable tax bill and other
relevant billing information, including any charges  arising
under  any  of  the  encumbrances to the Property.   To  the
extent  that  information  for any  such  proration  is  not
available  on  the Closing Date or if the actual  amount  of
such taxes, charges or expenses differs from the amount used
in  the  prorations at closing, then the parties shall  make
any  adjustments necessary so that the prorations at closing
are  adjusted  based upon the actual amount of  such  taxes,
charges  or  expenses.   The  parties  agree  to  make  such
reprorations as soon as possible after the actual amount  of
real  estate taxes, charges or expenses prorated at  closing
becomes available.

10.    Seller's  Representations  and  Warranties.    Seller
represents and warrants as of this date and to the  best  of
Seller's knowledge after due inquiry that:

          (a)  Except for this Agreement it is not aware  of
               any  other agreements or leases with  respect
               to  the  Property, other than  those  matters
               that are disclosed in the title commitment to
               be obtained by the Buyer;

          (b)  Seller  has all requisite power and authority
               to consummate the transaction contemplated by
               this  Agreement and has by proper proceedings
               duly authorized the execution and delivery of
               this  Agreement and the consummation  of  the
               transaction contemplated hereunder, or  shall
               obtain the same by the Closing Date;

          (c)  It  does  not have any actions or proceedings
               pending,  which would materially  affect  the
               Property  except  matters  fully  covered  by
               insurance;

          (d)  The    consummation   of   the   transactions
               contemplated  hereunder, and the  performance
               of  this  Agreement and the delivery  of  the
               warranty  deed to Buyer, will not  result  in
               any breach of, or constitute a default under,
               any instrument to which Seller is a party  or
               by which Seller may be bound or affected;

          (e)  All  of  Seller's covenants, agreements,  and
               representations made herein, and in  any  and
               all documents which may be delivered pursuant
               hereto, shall survive the delivery to AEI  of
               the   warranty   deed  and  other   documents
               furnished  in accordance with this Agreement,
               and  the  provision hereof shall continue  to
               inure  to  Buyer's benefit and its successors
               and assigns;

          (f)  The    Property   is   in   good   condition,
               substantially  undamaged by  fire  and  other
               hazards, and has not been made the subject of
               any condemnation proceeding;

          (g)  Seller  has  received no written notice  that
               the  use and operation of the Property is not
               in material compliance with applicable local,
               state    and    federal   laws,   ordinances,
               regulations and requirements;

          (h)  Seller  has not received written notice  that
               the Property currently is in violation of any
               federal,  state  or local law,  ordinance  or
               regulations relating to industrial hygiene or
               to the environmental conditions, on, under or
               about   the  Property,  including,  but   not
               limited  to, soil and groundwater conditions.
               Seller  has not received written notice  that
               there  is any existing proceeding or  inquiry
               by any governmental authority with respect to
               the  presence of hazardous materials  on  the
               Property   or  the  migration  of   hazardous
               materials from or to other property; and

          (i)  These Seller's representations and warranties
               shall be deemed to be true and correct as  of
               the   Closing  Date  and  shall  survive  the
               closing.

11.    Buyer's   Representations  and   Warranties.    Buyer
represents and warrants to Seller that:

          (a)  Buyer  has  all requisite power and authority
               to consummate the transaction contemplated by
               this  Agreement and has by proper proceedings
               duly authorized the execution and delivery of
               this  Agreement and the consummation  of  the
               transaction contemplated hereunder;

          (b)  To  Buyer's knowledge, neither the  execution
               and   delivery  of  this  Agreement  nor  the
               consummation  of the transaction contemplated
               hereunder will violate or be in conflict with
               any agreement or instrument to which Buyer is
               a party or by which Buyer is bound; and

          (c)  These  Buyer's representations and warranties
               deemed  to  be  true and correct  as  of  the
               Closing Date and shall survive the closing.

12.  Closing.

          (a)  Three  (3)  days prior to the  Closing  Date,
               with  simultaneous copy to Buyer, Seller will
               deposit  into  escrow with the Closing  Agent
               the  following  documents on  or  before  the
               Closing   Date  (collectively,  the  "Closing
               Documents"):

               (1)  A   general   warranty  deed   conveying
                    insurable  title  to  the  Property   to
                    Buyer,  in form and substance as  agreed
                    to  between Seller and Buyer during  the
                    Contingency Period;

                (2) Affidavit   of  Seller,  in   form   and
                    substance as provided in Article 6.02(b)
                    hereof;

               (3)  FIRPTA  Affidavit, in form and substance
                    as  agreed  to between Seller and  Buyer
                    during the Contingency Period;

               (4)  Assignments  of all warranties,  if  any
                    (and   the  written  consents   of   the
                    assignments thereof by the party  giving
                    the  warranty, if available),  from  the
                    party   or   parties  constructing   the
                    Improvements on the Property.

               (5)  Copy    of   the   final   unconditional
                    Certificate   of   Occupancy   for   the
                    Property  authorizing  use and occupancy
                    of the Property;

               (6)  Copies  of  any  and  all  certificates,
                    permits,     licenses     and      other
                    authorizations of any governmental  body
                    or  authority  which  are  necessary  to
                    permit  the  use  and occupancy  of  the
                    Improvements.

          (b)  On  or  before the Closing Date,  Buyer  will
               deposit   the  Purchase  Price,  subject   to
               adjustment as provided herein (the  "Escrowed
               Purchase Price"), with the Closing Agent;

          (c)  Both  parties  will sign and deliver  to  the
               Closing  Agent any other documents reasonably
               required  by  the  Closing Agent  and/or  the
               Title  Company., which shall include, without
               limitation,  a  closing  statement  for  this
               transaction (the "Closing Statement");

          (d)  On  the  Closing  Date,  Closing  Agent  will
               deliver  the Closing Documents to Buyer,  and
               Closing   Agent  will  deliver  the  Escrowed
               Purchase  Price, less amounts to be  remitted
               by  Closing Agent as provided in the  Closing
               Statement, to Seller.

13.  Termination.  This Agreement may be terminated prior to
closing at Buyer's option (and the Earnest Money returned to
Buyer  in  full  immediately) in the event  of  any  of  the
following occurrences:

          (a)  Seller fails to materially comply with any of
               the terms hereof, or this Agreement proves to
               be  untrue, substantially false or misleading
               in  any  material respect as of  the  Closing
               Date;

          (b)  There  has been a material adverse change  in
               the  financial  condition of  Seller  or  the
               proposed  tenant  of the  Property  or  there
               shall   be   a  material  action,   suit   or
               proceeding  pending  or  threatened   against
               Seller,   which,   in   either   such   case,
               materially  and  adversely  affects  Seller's
               ability to perform under this Agreement;

          (c)  Any  bankruptcy, reorganization,  insolvency,
               withdrawal,   or   similar   proceeding    is
               instituted by or against Seller;

          (d)  Seller  shall  be  dissolved,  liquidated  or
               wound up; and

           (e) Notice  given by Buyer pursuant to any  right
               of termination herein.

     In the event of termination as described above, neither
party  shall have any further duties or obligations  to  the
other hereunder.

14.    Damages,  Destruction  and  Eminent  Domain.   Seller
acknowledges  that, as of the Closing Date, Buyer  shall  be
leasing   the  Property  to  Tia's  Texas-Alamo,  LLC   (the
"Lessee"),  pursuant  to the terms of a  certain  Net  Lease
Agreement  being entered into between Buyer (or an affiliate
thereof) and Lessee (the "Lease").  If, prior to the Closing
Date, the Property, or any part thereof, should be destroyed
or  further damaged by fire, the elements, or any cause, due
to   events  occurring  subsequent  to  the  date  of   this
Agreement,  which destruction or damage delays  commencement
of  the  Lease beyond the Closing Date or delays payment  of
rent  by Lessee under the Lease or renders the Lease invalid
(unless  any  such delay or invalidation  of  the  Lease  is
waived  in  writing by Lessee), this Agreement shall  become
null  and  void,  at  Buyer's option, exercised  by  written
notice  to Seller within ten (10) business days after  Buyer
has  received written notice from Seller of said destruction
or  damage.  Seller, however, shall have the right to adjust
or  settle  any  insured  loss until (a)  all  contingencies
hereof  have been satisfied, or waived; and (b)  any  period
provided  for  above for Buyer to elect  to  terminate  this
Agreement  has  expired or Buyer has, by written  notice  to
Seller,  waived  Buyer's right to terminate this  Agreement.
If  Buyer  elects to proceed and to consummate the  purchase
despite  said  damage  or destruction,  there  shall  be  no
reduction in or abatement of the Purchase Price, and  Seller
shall assign to Buyer the Seller's right, title and interest
in  and to all insurance proceeds resulting form said damage
or  destruction to the extent that the same are payable with
respect to damage to the Property, subject to rights of  the
Lessee.

     If prior to closing, the Property, or any part thereof,
is taken by eminent domain, which taking delays commencement
of  the  Lease beyond the Closing Date or delays payment  of
rent  by  the  Lessee under the Lease or renders  the  Lease
invalid (unless any such delay or invalidation of the  Lease
is waived in writing by Lessee), this Agreement shall become
null  and  void,  at  Buyer's option.  If  Buyer  elects  to
proceed  and to consummate the purchase despite said taking,
there  shall  be  no  reduction in,  or  abatement  of,  the
Purchase  Price  and Seller shall assign to  Buyer  all  the
Seller's right, title and interest in and to any award made,
or  to  be made, in the condemnation proceeding, subject  to
the rights of the Lessee.

     In the event that this Agreement is terminated by Buyer
as  provided  above, the Earnest Money shall be returned  to
Buyer immediately after execution by Buyer of such documents
reasonably  requested by Seller to evidence the  termination
hereof.   In  the  event of termination as described  above,
neither  party shall have any further duties or  obligations
to the other hereunder.

15.  Notices.  All notices from either of the parties hereto
to  the other shall be in writing and shall be considered to
have  been  duly  given or served if  sent  by  first  class
certified  mail, return receipt requested, postage  prepaid,
or  by  a nationally recognized courier service guaranteeing
overnight  delivery to the party at his or its  address  set
forth  below,  or to such other address as  such  party  may
hereafter designate by written notice to the other party.

If to Seller:

     Specialty Restaurant Group, LLC
     150 West Church Avenue
     Maryville, TN  37801

     With copy to:

     J. Christopher Kirk, Esq.
     McCampbell & Young, PC
     PO Box 550
     Knoxville, TN 37901

If to Buyer:
          AEI Fund Management, Inc.
          1300 Minnesota World Trade Center
          30 E. 7th Street
          St. Paul, Minnesota 55101
          Phone No.: (612) 227-7333

      Notice shall be deemed received 48 hours after  proper
deposit in U.S. Mail, or 24 hours after proper deposit  with
a  nationally recognized overnight courier.  Copies  of  all
notices  from  Buyer  or  Seller to the  other  party  shall
simultaneously  be  sent to Lessee at the  address  provided
above.

16.  Miscellaneous.

          a.   This Agreement may be amended only by written
               agreement  signed by both Seller  and  Buyer,
               and all waivers must be in writing and signed
               by   the  waiving  party.   Time  is  of  the
               essence.    This  Agreement   will   not   be
               construed  for or against a party whether  or
               not  that  party has drafted this  Agreement.
               If  there is any action or proceeding between
               the  parties relating to this Agreement,  the
               prevailing party will be entitled to  recover
               attorney's  fees  and  costs.   This  is   an
               integrated    agreement    containing     all
               agreements of the parties about the  Property
               and  the  other  matters  described,  and  it
               supersedes    any    other    agreement    or
               understandings.   Exhibits attached  to  this
               Agreement   are   incorporated   into    this
               Agreement.

          b.   If  the  transaction  contemplated  hereunder
               does not close by the Closing Date or if  the
               Asset  Purchase Agreement fails to  close  by
               the  Closing  Date or if any of  the  related
               real property transactions fails to close  by
               the   Closing   Date  this  agreement   shall
               terminate  and  the Earnest  Money  shall  be
               returned to the Buyer.

          c.   This  Agreement shall be assignable by Buyer,
               at  its option, in whole or in part, in  such
               manner   as  Buyer  may  determine,   to   an
               affiliate of affiliates of Buyer.

          d.   The  Buyer  and  Seller each warrant  to  the
               other   that   there  is  no  claim   for   a
               commission, except in as much as  Seller  may
               be paying Houlihan, Lokey, Howard and Zukin a
               fee  with regard to Seller's transaction with
               Maplewood Management, Inc..

      Buyer  is submitting this offer by signing a  copy  of
this Agreement and delivering it to Seller. Seller has until
November  5, 2003 within which time to accept this offer  by
signing and returning this Agreement to Buyer. When executed
by  both parties, this Agreement will be a binding agreement
for  valid and sufficient consideration which will bind  and
benefit  Seller, Buyer and their respective  successors  and
assigns.

                  [Signature page follows]

     IN WITNESS WHEREOF, Seller and Buyer have executed this
Agreement  effective  as of the day  and  year  above  first
written.

SELLER:

     Specialty Restaurant Group, LLC

     By:/s/ James H CarMichael
            James H. CarMichael, President

STATE OF TN)
                  ) ss.
COUNTY OFBlount)

      On  this  28  day  of October, 2003,  before  me,  the
undersigned,  a  Notary  Public  in  and  for  said   State,
personally appeared James H CarMichael, personally known  to
me  to  be the person who executed the within instrument  as
the  President of Specialty Restaurant Group LLC, a Delaware
limited   liability  company,  on  behalf  of  said  limited
liability company.
                          /s/ Tamatha S Duncan
                              Notary Public

BUYER:

AEI FUND MANAGEMENT, INC.

By: /s/ Robert P Johnson
        Robert P. Johnson, its President

STATE OF MINNESOTA)
                      ) ss.
COUNTY OF RAMSEY   )

      On  this  6th  day of November, 2003, before  me,  the
undersigned,  a  Notary  Public  in  and  for  said   State,
personally Robert  P. Johnson, personally known to me to  be
the  person  who  executed  the  within  instrument  as  the
President   of  AEI  Fund  Management,  Inc.,  a   Minnesota
corporation, on behalf of said corporation.

                              /s/ Michael B Daugherty
                                   Notary Public

[notary seal]

                         EXHIBIT "A"

                      LEGAL DESCRIPTION

Tract I: (Fee Simple)

Being  1.446 acres of land, more or less, and being part  of
Lot  1(1), Block One (1), Fox Creek commercial, Phase Three,
an  addition  to  the City of Killeen, Bell  county,  Texas,
according  to the Map or Plat recorded in Cabinet  C,  Slide
158-A,  Plat  Records of Bell County, Texas,  being  further
described by metes and bounds as follows:

Beginning  at a 3/8 inch iron rod set in the north right-of-
way line of US Highway 190 (Central Texas Expressway) and in
the  south  line  of  Lot 1, Block 1, fox Creek  Commercial,
Phase  Three,  which bears North 61 degrees  23  minutes  14
seconds West, 186.42 feet and North 64 degrees 59 minutes 47
seconds West, 168.58 feet from the southeast corner  of  Lot
1,  Block  1,  Fox Creek commercial , Phase Three,  for  the
southeast corner of this tract of land.

Thence  with  the north right-of-way line of US Highway  190
and  with  the  south  line of Lot 1,  Block  1,  Fox  Creek
Commercial,  Phase  Three, North 64 degrees  59  minutes  47
seconds  West 221.91 feet (plat bearing North 64 degrees  59
minutes  47 seconds West) to a 3/8 inch iron rod found,  for
the southwest corner of this tract of land.

Thence  North 24 degrees 57 minutes 49 seconds East,  283.72
feet  to a 3/8 inch iron rod found, for the northwest corner
of this tract of land.

Thence  South 65 degrees 01 minutes 57 seconds East,  222.14
feet  to a 3/8 inch iron rod found, for the northeast corner
of this tract of land.

Thence  South 25 degrees 00 minutes 36 seconds West,  283.86
feet  to  the Place of Beginning containing 1.446  acres  of
63,008 square feet of land.

Tract II: (Easement Estate)

Non-exclusive easement and right to use as created  in  that
certain  Reciprocal Easement and Operation  Agreement  dated
August  26,  1999,  by  and between TC  Killeen  MP,  LP,  a
Delaware limited partnership and Home Deport U.S.A., Inc., a
Delaware  corporation, recorded in Volume  4068,  Page  440,
Official Public Records of Bell County, Texas.

BEING  the  same  property conveyed to Specialty  Restaurant
Group, LLC by Special warranty Deed dated November 20,  2000
and recorded at Volume 4298, Page 386 of the Official Public
Records of Bell County, Texas.Form of Indemnification Agreement

 EXHIBIT 10.1 
  
 INDEMNIFICATION AGREEMENT 
  
 THIS AGREEMENT (this “Agreement”) is entered into, effective as of August 7, 2003, between K2 Inc., a Delaware corporation (the
“Corporation”) and                                 
(“Indemnitee”). 
  
 RECITALS 
  
 WHEREAS, it is essential to the Corporation to retain and attract as
directors, officers and agents the most capable persons available; 
  
 WHEREAS, Indemnitee is a director, officer or agent of the Corporation;  
  
 WHEREAS, both the Corporation and Indemnitee recognize the increased risk of litigation and other claims currently being asserted against directors, officers and agents of corporations; and 
  
 WHEREAS, in recognition of Indemnitee’s need for substantial protection
against personal liability, in order to enhance Indemnitee’s continued and effective service to the Corporation, and in order to induce Indemnitee to provide services to the Corporation as a director, officer or agent, the Corporation wishes to
provide in this Agreement for the indemnification and advancement of expenses to Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement, and, to the extent insurance is maintained, for the
coverage of Indemnitee under the Corporation’s directors’, officers’ and agents’ liability insurance policies. 
  
 NOW, THEREFORE, in consideration of the above premises and of Indemnitee’s continuing to serve the Corporation directly or, at its request, with
another enterprise, and intending to be legally bound hereby, the parties agree as follows: 
  
 AGREEMENT 
  
 1. Certain
Definitions: 
  
 (a) Board: the Board
of Directors of the Corporation. 
  
 (b) Change in Control:
shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of
the Corporation or a corporation owned directly or indirectly by the shareholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation, is or becomes the “Beneficial Owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Corporation representing 20% or more of the total voting power represented by the Corporation’s then outstanding Voting Securities, or (ii) during any period of

  

 two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Corporation’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies of consents by or on behalf of a Person other than the Board, or (iii) the shareholders of the Corporation approve
a merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation that would result in the Voting Securities of the Corporation outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Corporation or such surviving entity outstanding immediately after such
merger or consolidation, or the shareholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation (in one transaction or a series of transactions) of all or
substantially all of the Corporation’s assets. 
  
 (c)
Disinterested Director: a director of the Corporation who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee and has no financial interest in the outcome of the Proceeding (except insofar
as such outcome may financially affect or has financially affected the Corporation itself). 
  
 (d) Expenses: any expense, including attorneys’ costs and fees, amounts paid or to be paid in settlement, judgments, fines, ERISA excise taxes and penalties, any interest, assessments, or other charges
imposed thereon, and any federal, state, local, or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement, paid or incurred in connection with investigating, defending, being a witness in, or
participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable Event, including any expenses described above relating to establishing a right to indemnification or to enforce the terms
hereof as set forth in Section 5. 
  
 (e) Indemnifiable
Event: any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director, officer or agent of the Corporation, or while a director, officer or agent, is or
was serving at the request of the Corporation as a director, officer, employee, trustee, agent, limited partner, member or fiduciary of another foreign or domestic corporation, partnership, joint venture, employee benefit plan, trust, or other
enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation that was a predecessor corporation of the Corporation (including any corporation acquired by the Corporation) or of another enterprise at the request of
such predecessor corporation, or related to anything done or not done by Indemnitee in any such capacity, whether or not the basis of the Proceeding is alleged action in an official capacity as a director, officer, employee, or agent or in any other
capacity while serving as a director, officer, employee, or agent of the Corporation, as described above.  
  
 (f) Independent Counsel: a law firm, a member of a law firm, or an independent practitioner that has not performed services for the Corporation or
the Indemnitee in 
  

 2 

 the previous five years, that is experienced in matters of corporation law and shall include any person who, under the
applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant’s rights hereunder. 
  
 (g) Potential Change in Control: shall be deemed to have occurred if
(i) the Corporation enters into an agreement or arrangement, the consummation of which would result in the occurrence of a Change in Control; (ii) any person (including the Corporation) publicly announces an intention to take or to consider taking
actions that, if consummated, would constitute a Change in Control; (iii) any person (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation acting in such capacity or a corporation owned,
directly or indirectly, by the shareholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation), who is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation
representing 10% or more of the combined voting power of the Corporation’s then outstanding Voting Securities, increases his beneficial ownership of such securities by 5% or more over the percentage so owned by such person on the date hereof,
or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. 
  
 (h) Proceeding: any threatened, pending, or completed action, suit, arbitration, alternative dispute mechanism, inquiry, administrative or
legislative hearing, investigation or any other actual, threatened or completed proceeding, including any and all appeals, whether conducted by the Corporation or any other party, whether civil, criminal, administrative, investigative, or other, and
in each case whether or not commenced prior to the date of this Agreement, that relates to an Indemnifiable Event. 
  
 (i) Reviewing Party: the person or body appointed in accordance with Section 3. 
  
 (j) Voting Securities: any securities of the Corporation entitled to vote generally in the election of directors.

  
 2. Agreement to Indemnify. 
  
 (a) Generally. In the event Indemnitee was, is, or becomes a party to
or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Corporation shall indemnify Indemnitee from and against
any and all Expenses, liability and loss to the fullest extent permitted by applicable law, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, to the extent the following is
permissible, only to the extent that such amendment or interpretation permits the Corporation to provide broader indemnification rights than were permitted prior thereto). The parties hereto intend that this Agreement shall provide for
indemnification in excess of the minimum permitted by statute. 
  
 (b) Expense Advances. If so requested by Indemnitee, the Corporation shall advance any and all Expenses to Indemnitee (an “Expense Advance”) within thirty (30) calendar days 

  

 3 

 
after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or
after final disposition of any Proceeding. Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the provisions of this
Agreement except in the case of Proceedings solely with respect to items described in Section 4(c) (2), (3) or (4). The Indemnitee shall qualify for advances solely upon the execution and delivery to the Corporation of an undertaking in form and
substance reasonably satisfactory to the Corporation providing that the Indemnitee undertakes to repay the advances if and to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Corporation. If
Indemnitee has commenced legal proceedings in a court of competent jurisdiction in the State of Delaware to secure a determination that Indemnitee should be indemnified under applicable law, as provided in Section 4(b) below, any determination made
by the Reviewing Party as defined in Section 3 below that Indemnitee would not be permitted to be indemnified hereunder shall not be binding and Indemnitee shall not be required to reimburse the Corporation for any Expense Advance until a final
judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have lapsed). Indemnitee’s obligation to reimburse the Corporation for Expense Advances shall be unsecured and no interest
shall be charged thereon. 
  
 (c) Mandatory
Indemnification. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection therewith. 
  
 (d) Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a
portion of Expenses, but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. 
  
 3. Reviewing Party. 
  
 (a) Prior to any Change in Control, the person, persons or entity (the “Reviewing Party”) that shall determine whether Indemnitee is entitled to
indemnification in the first instance shall be (a) the Board of the Corporation acting by a majority vote of Disinterested Directors, whether or not such majority constitutes a quorum of the Board; (b) a committee of Disinterested Directors
designated by a majority vote of such directors, whether or not such majority constitutes a quorum; or (c) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel (as described below in Section
3(b)) in a written opinion to the Board, a copy of which shall be delivered to Indemnitee. 
  
 (b) After a Change in Control, the Reviewing Party shall be the Independent Counsel referred to below. With respect to all matters arising following a Change in Control (other than a Change in Control approved by a
majority of the directors on the Board who were directors immediately prior to such Change in Control) concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or under applicable law
or the Corporation’s certificate of incorporation or by-laws 
  

 4 

 now or hereafter in effect relating to indemnification for Indemnifiable Events, the Corporation shall seek legal advice
only from Independent Counsel selected by Indemnitee and approved by the Corporation (which approval shall not be unreasonably withheld) (the “Independent Counsel”). Such counsel, among other things, shall render its written opinion to the
Corporation and Indemnitee as to whether and to what extent the Indemnitee should be permitted to be indemnified hereunder. The Corporation agrees to pay the reasonable fees of the Independent Counsel and to indemnify fully such counsel against any
and all expenses (including attorneys’ fees and expenses), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the engagement of Independent Counsel pursuant hereto. 
  
 4. Indemnification Process and Appeal. 
  
 (a) Indemnification Payment. Indemnitee shall be entitled to
indemnification of Expenses actually and reasonably paid by Indemnitee, and shall receive payment thereof, from the Corporation in accordance with this Agreement within thirty (30) calendar days after Indemnitee has made written demand on the
Corporation for indemnification (which written demand shall include such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to
indemnification), unless the Reviewing Party has provided a written determination to the Corporation that Indemnitee is not entitled to indemnification hereunder. The Reviewing Party making the determination with respect to Indemnitee’s
entitlement to indemnification shall notify Indemnitee of such determination no later than two (2) business days after the determination is made. 
  
 (b) Suit to Enforce Rights. If (i) no determination of entitlement to indemnification shall have been made within thirty (30) calendar days after
Indemnitee has made a demand in accordance with Section 4(a), (ii) payment of indemnification pursuant to Section 4(a) is not made within thirty (30) calendar days after a determination has been made that Indemnitee is entitled to indemnification,
(iii) the Reviewing Party determines pursuant to Section 4(a) that Indemnitee is not entitled to indemnification under this Agreement, or (iv) Indemnitee has not received advancement of Expenses within thirty (30) calendar days after making such a
request in accordance with Section 2(b), then Indemnitee shall have the right to enforce its indemnification rights under this Agreement by commencing litigation in any court in the State of Delaware having subject matter jurisdiction thereof and in
which venue is proper seeking an initial determination by the court or challenging any determination by the Reviewing Party or any aspect thereof. The Corporation hereby consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party not challenged by the Indemnitee on or before the first anniversary of the date of the Reviewing Party’s determination shall be binding on the Corporation and Indemnitee. 
  
 (c) Defense to Indemnification. No payment pursuant to this Agreement
shall be made by the Corporation and it shall be a defense to any action brought by Indemnitee against the Corporation to enforce this Agreement (other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in
advance of its final disposition where the required undertaking has been tendered to the Corporation) to indemnify Indemnitee for any Expenses in connection with any Proceeding 
  

 5 

 (1) where it is not permissible under applicable law for the Corporation to indemnify Indemnitee for the
amount claimed; 
  
 (2) for which payment has actually been made
to Indemnitee under a valid and collectible insurance policy except in respect of any excess beyond the amount of payment under such insurance; 
  
 (3) for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Corporation pursuant to the provisions of Section 16(b)
of the Exchange Act, the rules and regulations promulgated thereunder and amendments thereto or similar provisions of any federal, state, or local statutory law; or 
  
 (4) initiated by Indemnitee against the Corporation or any director, officer or agent of the Corporation unless (i) the
Corporation has joined in or the Board has consented to the initiation of such Proceeding; (ii) the Proceeding is one to enforce indemnification rights under Section 5 herein; or (iii) the Proceeding is instituted after a Change in Control.

  
 (d) Admissibility of Determinations. Neither the
failure of the Reviewing Party or the Corporation (including its Board, independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such action by Indemnitee that indemnification of the claimant is
proper under the circumstances because he has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party or Corporation (including its Board, independent legal counsel, or its shareholders) that the
Indemnitee had not met such applicable standard of conduct, shall be admissible as evidence in any such action for any purpose. 
  
 (e) Presumptions. To the maximum extent permitted by applicable law in making a determination with respect to entitlement to indemnification (or
advancement of expenses) hereunder, the Reviewing Party shall presume that an Indemnitee is entitled to indemnification (or advancement of expenses) under this Agreement if Indemnitee has submitted a request for indemnification in accordance with
Section 4(a) of this Agreement, and the Corporation shall have the burden of proof to overcome that presumption in connection with the making by the Reviewing Party of any determination contrary to that presumption. For purposes of this Agreement,
the termination of any Proceeding, by judgment, order, settlement (whether with or without court approval), conviction, or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. 
  
 5. Indemnification for Expenses Incurred in Enforcing Rights. The Corporation shall indemnify Indemnitee against any and all Expenses described in
Subsections (i), (ii) and (iii) below and, if requested by Indemnitee, shall advance such Expenses to Indemnitee on such terms and conditions as the Board deems appropriate, that are incurred by Indemnitee in connection with any claim asserted
against or action brought by Indemnitee for 
  
 (i) enforcement of
this Agreement, 
  

 6 

 (ii) indemnification of Expenses or Expense Advances by the Corporation under this Agreement or any other
agreement or under applicable law or the Corporation’s articles of incorporation or by-laws now or hereafter in effect relating to indemnification for Indemnifiable Events, and/or 
  
 (iii) recovery under directors’, officers’ and agents’ liability insurance policies maintained by the
Corporation. 
  
 6. Notification and Defense of Proceeding.

  
 (a) Notice. Indemnitee shall, as a condition precedent
to his or her right to be indemnified under this Agreement, give to the Corporation notice in writing as soon as practicable of any Proceeding for which indemnity will or could be sought under this Agreement. Notice to the Corporation shall be
directed to K2 Inc., 2051 Palomar Airport Road, Carlsbad, CA 92009, Attention: General Counsel (or such other address as the Corporation shall designate in writing to Indemnitee). Notice shall be deemed received three (3) days after the date
postmarked if sent by prepaid mail, properly addressed. In addition, Indemnitee shall give the Corporation such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power. 
  
 (b) Defense. With respect to any Proceeding as to which Indemnitee
notifies the Corporation of the commencement thereof, the Corporation will be entitled to participate in the Proceeding at its own expense and except as otherwise provided below, to the extent the Corporation so wishes, it may assume the defense
thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Corporation to Indemnitee of its election to assume the defense of any Proceeding, the Corporation will not be liable to Indemnitee under this Agreement or otherwise
for any Expenses subsequently incurred by Indemnitee in connection with the defense of such Proceeding other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ his own counsel in such
Proceeding, but all Expenses related thereto incurred after notice from the Corporation of its assumption of the defense shall be at Indemnitee’s expense unless: (i) the employment of counsel by Indemnitee has been authorized by the
Corporation; (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Corporation in the defense of the Proceeding; (iii) after a Change in Control, the employment of counsel by Indemnitee has
been approved by the Independent Counsel; or (iv) the Corporation shall not within sixty (60) calendar days in fact have employed counsel to assume the defense of such Proceeding, in each of which cases all Expenses of the Proceeding shall be borne
by the Corporation; and (v) if the Corporation has selected counsel to represent Indemnitee and other current and former directors and officers of the Corporation in the defense of a Proceeding, and a majority of such persons, including Indemnitee,
reasonably object to such counsel selected by the Corporation pursuant to this Section 6(b), then such persons, including Indemnitee, shall be permitted to employ one (1) additional counsel of their choice and the reasonable fees and expenses of
such counsel shall be at the expense of the Corporation; provided, however, that such counsel shall be chosen from amongst the list of counsel, if any, approved by any company with which the Corporation obtains or maintains insurance.
In the event separate counsel is retained by an Indemnitee pursuant to this Section 6(b), the Corporation shall cooperate with Indemnitee with respect to the defense of the Proceeding, including making documents, 
  

 7 

 witnesses and other reasonable information related to the defense available to the Indemnitee and such separate counsel
pursuant to joint-defense agreements or confidentiality agreements, as appropriate. The Corporation shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Corporation or as to which Indemnitee shall have made
the determination provided for in (ii) above. The foregoing shall not apply to actions by Indemnitee under Section 5 herein. 
  
 (c) Settlement of Claims. The Corporation shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in
settlement of any Proceeding effected without the Corporation’s written consent; provided, however, that if a Change in Control has occurred, the Corporation shall be liable for indemnification of Indemnitee for amounts paid in
settlement if the Independent Counsel has approved the settlement. The Corporation shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. Neither the
Corporation nor the Indemnitee will unreasonably withhold their consent to any proposed settlement. The Corporation shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Corporation was not
given a reasonable and timely opportunity, at its expense, to participate in the defense of such action. 
  
 7. Establishment of Trust. In the event of a Change in Control or a Potential Change in Control, the Corporation shall, upon written request by
Indemnitee, create a Trust for the benefit of the Indemnitee and from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such
request to be incurred in connection with investigating, preparing for, participating in, and/or defending any Proceeding relating to an Indemnifiable Event. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding
obligation shall be determined by the Reviewing Party. The terms of the Trust shall provide that upon a Change in Control, (i) the Trust shall not be revoked or the principal thereof invaded, without the written consent of the Indemnitee, (ii) the
Trustee shall advance, within ten (10) business days of a request by the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the same circumstances for which the Indemnitee would be
required to reimburse the Corporation under Section 2(c) of this Agreement), (iii) the Trust shall continue to be funded by the Corporation in accordance with the funding obligation set forth above, (iv) the Trustee shall promptly pay to the
Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in the Trust shall revert to the Corporation upon a final determination by the Reviewing Party
or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement and/or the Proceeding for which the Trust was funded has been fully and finally determined or withdrawn. The
Trustee shall be chosen by the Indemnitee. Nothing in this Section 7 shall relieve the Corporation of any of its obligations under this Agreement. All income earned on the assets held in the Trust shall be reported as income by the Corporation for
federal, state, local, and foreign tax purposes. The Corporation shall pay all costs of establishing and maintaining the Trust and shall indemnify the Trustee against any and all expenses (including attorneys’ fees), claims, liabilities, loss,
and damages arising out of or relating to this Agreement or the establishment and maintenance of the Trust other than those attributable to the bad faith or gross negligence of the Trustee. 
  

 8 

 8. Non-Exclusivity. The rights of Indemnitee hereunder shall be in addition to any other rights
Indemnitee may have under the laws of the State of Delaware, the certificate of incorporation, by-laws, applicable law, or otherwise. To the extent that a change in applicable law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the Corporation’s certificate of incorporation, by-laws, applicable law, or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater
benefits so afforded by such change. 
  
 9. Liability
Insurance. To the extent the Corporation maintains an insurance policy or policies providing directors’, officers’ or agents’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage available for any Corporation director, officer or agent. 
  
 10. Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Corporation or any
affiliate of the Corporation against Indemnitee, Indemnitee’s spouse, heirs, executors, or personal or legal representatives after the expiration of two (2) years from the date of accrual of such cause of action, or such longer period as may be
required or permitted by federal or state law under the circumstances. Any claim or cause of action of the Corporation or its affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such
period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action the shorter period shall govern. 
  
 11. Amendment of this Agreement. No supplement, modification, or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except
as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof. 
  
 12. Subrogation. In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Corporation effectively to bring suit to
enforce such rights. 
  
 13. No Duplication of Payments.
The Corporation shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, by law, or otherwise) of
the amounts otherwise indemnifiable hereunder. 
  
 14. Binding
Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation, or
otherwise to all or substantially all of the business and/or assets of the Corporation, heirs, executors, estate and personal and legal representatives. The Corporation shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation, or otherwise) to all, substantially 
  

 9 

 all, or a substantial part, of the business and/or assets of the Corporation, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place. This Agreement shall continue in
effect regardless of whether Indemnitee continues to serve as a director, officer or agent of the Corporation or of any other enterprise at the Corporation’s request. 
  
 15. Severability. If any provision (or portion thereof) of this Agreement shall be held by a court of competent
jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without
limitation, each portion of this Agreement containing any provision held to be invalid, void, or otherwise unenforceable, that is not itself invalid, void, or unenforceable) shall be construed so as to give effect to the intent manifested by the
provision held invalid, void, or unenforceable. 
  
 17.
Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State without giving effect to the principles of
conflicts of laws. 
  
 18. Consent to Jurisdiction. The
Corporation and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any
action instituted under this Agreement shall be brought only in the state courts of the State of Delaware. 
  
 19. Notices. All notices, demands, and other communications required or permitted hereunder shall be made in writing and shall be deemed to have
been duly given if delivered by hand, against receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and addressed to the Corporation at: 
  
 K2 Inc. 
 2051 Palomar Airport Road 
 Carlsbad, CA 92009 
 Attn: General Counsel 
  
 and to Indemnitee at: 
  

	 	

  
 Notice of change of address shall be effective only when done in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of delivery or on the third
business day after mailing. 
  

 10 

 IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day
specified above. 
  

	Corporation:	 	 	 	 K2 INC., a Delaware corporation

				
	 	 	 	 	By:	 	 
	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
 Title

				
	 Indemnitee:
	 	 	 	By:	 	 
	 	 	 	 	 	

  
  

 11

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