(1)

Premises .

Lessor hereby leases to Tenant and Tenant leases from Lessor, the premises outlined and further described on Exhibit “A” (the “Premises” ) located in the building at 19950 177th Street NW, Big Lake, Minnesota 55309 (the “Building” ). The Building is situated on the property legally described on Exhibit “B” (the “Property” ). The Premises shall be deemed to consist of approximately 35,990 square feet, and are located within and constitute a part of the Building. For the purposes of this Lease, the determination of the number of square feet in the Premises has been made by measuring from the exterior face of exterior walls, and from the midline or centerpoint of interior or party walls. Included in the Premises is Tenant’s pro rata share of the mechanical room that consists of 451 square feet. Tenant’s “Pro Rata Share,” as that phrase is used elsewhere in this Lease, shall be a fraction expressed as a percentage, the numerator of which is the number of square feet in the Premises and the denominator of which is the number of square feet in the Building. Therefore, the Tenant’s Pro Rata Share shall be 90.2%, subject to change over the Term should the Building size increase or decrease.

(2)

Lease Term .

A.

Duration :

The term of this Lease (the “Term” ) shall be for a period of five (5) years, commencing as set forth below and terminating on the termination date.

B.

Commencement Date :

The Term shall commence on March 1, 2006 (the “Commencement Date” ); provided, however, that if the Lessor’s Improvements (defined below) have not been substantially completed by Lessor on or before said date, then the Commencement Date shall be the earlier of the following:

(1)

Five (5) days after the date Lessor notifies Tenant in writing that the Lessor’s Work has been substantially completed; or,

(2)

Upon the date Tenant actually commences doing business in, upon or from the Premises.

It is expressly agreed that in any such case of delayed delivery of possession, this Lease will not be void or voidable, nor shall Lessor be liable to Tenant for any loss or damage resulting therefrom, nor shall the designated termination date be in any way extended, but in that event, all Rent shall be abated until the designation of the Commencement Date pursuant to subsections (1) or (2).

C.

Confirmation of Commencement Date and Adjustment of Term :

If the Commencement Date has been determined as set forth in subsections (1) or (2) above, the parties shall execute a written memorandum expressly confirming said Commencement Date, and such memorandum shall thereupon be deemed attached hereto, incorporated herein, and by this reference made a part of this Lease.

If the Commencement Date is other than the first day of a calendar month, this Lease shall continue in full force and effect for a period of five (5) years, commencing on the first day of the month following the Commencement Date.

(3)

Permitted Use .

The Premises shall be used by Tenant solely for the following purpose:

Manufacture and assembly of motorcycles and related items, and office space used in conjunction therewith.

Tenant shall not use nor permit the use of the Premises, or any portion thereof, for any other purpose or purposes whatsoever without first obtaining Lessor’s written consent thereto.

(4)

Condition of Premises .

Tenant has had an opportunity to inspect the Premises and the currently existing leasehold improvements contained therein. Tenant accepts the Premises “as is” in their present condition subject only to Lessor’s obligation to complete the improvements (the “Lessor’s Improvements” ) designated as such on the attached Exhibit “C” on or before the Commencement Date. Lessor shall not be obligated to construct or furnish any improvements or leasehold improvement allowance to Tenant except the Lessor’s Improvements.

Tenant shall be obligated to provide the improvements (the “Tenant’s Improvements”) designated as such on the attached Exhibit “C.” Unless expressly agreed by the parties, all of Tenant’s Improvements shall become the property of Lessor when completed and remain on the Premises upon the termination of this Lease.

(5)

Rent .

Tenant covenants to pay to Lessor, without demand and without offset or deduction the following rental:

A.

Minimum Rent :

A fixed minimum rent (the “Minimum Rent” ) established and payable in accordance with the following schedule:

$15,895.58 per month.

The Minimum Rent shall be payable in advance on the first day of each and every calendar month during the Term. Minimum Rent for a fractional calendar month shall be prorated.

B.

Additional Rent :

Tenant’s obligation to pay additional rent (the “Additional Rent” ), as herein specified, shall commence as of March 1, 2006. Except as otherwise specifically stated, Additional Rent shall be paid by Tenant within 10 days of Lessor’s request therefor. Additional Rent shall include all other sums that Tenant is obligated to pay pursuant to any term or provision of this Lease. Annual Additional Rent for 2006 is estimated to be $3.13 per square foot.

C.

Late Charge :

If any Rent or other sums payable hereunder by Tenant are not paid within five (5) days after the due date thereof, Tenant shall pay to Lessor a late charge equal to five percent (5%) of the amount of such delinquent payment. This late charge shall be in addition to any other charges, including interest, which may be provided for elsewhere herein. Nothing in this section shall be deemed a waiver of any of Lessor’s other rights in the event of a default by Tenant.

D.

Payment :

All rents and other monies required to be paid by Tenant pursuant to the terms of this Lease shall be paid to Lessor without deduction or offset, prior notice or demand, in lawful money of the United States of America at 4190 Vinewood Lane North #111-563, Plymouth, Minnesota 55442-1735, or at such other place as Lessor may from time to time designate in writing.

No payment by Tenant or receipt by Lessor of a lesser amount than the Rent then actually due shall be deemed to be other than on account of the earliest Rent then owed, nor shall any endorsement or statement on any check or letter

accompanying any check or payment as rent be deemed an accord and satisfaction, and Lessor may accept such check or payment without prejudice to Lessor’s right to recover the balance of such Rent or pursue any remedy provided for in this Lease or at law.

The Minimum Rent and Additional Rent are sometimes referred to as “Rent.” A payment in the amount of $25,282.98 is due upon execution of this lease and will be applied to the first month’s rent.

(6)

Option to Renew .

Tenant shall have the option to extend the Term for one additional five (5) year period (the “Option Period” ). In order to exercise this option, Tenant shall give written notice to Lessor of its intent to so exercise no later than six (6) months prior to expiration of the Term.

The word “Term” as used in this Lease shall be deemed to include the Option Period and all terms and provisions contained in this Lease shall be applicable to the Option Period.

Rent during the Option Period shall be equal to market rents as determined by Lessor. In the event Tenant is interested in exercising the option, Tenant may inquire of Lessor seven (7) months prior to the termination of the Lease, and within ten (10) days after inquiry, Lessor shall advise Tenant as to the rent to be charged during the Option Period.

(7)

Notices .

A.

Notices to be in Writing :

Any and all notices and demands by or from Lessor to Tenant, or from Tenant to Lessor, required or desired to be given hereunder shall be in writing and shall be validly given or made if served either personally or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice or demand be served personally, service shall be conclusively deemed made at the time of such personal service. If such notice or demand be served by registered or certified mail in the manner herein provided, service shall be conclusively deemed made forty-eight (48) hours after the deposit thereof in the United States mail addressed to the party to whom such notice or demand is to be given as hereinafter set forth.

B.

Notices to Lessor :

Any notice or demand to Lessor shall be addressed to Lessor at the address to which Rent payments are then to be made, or such other address as Lessor may designate in writing.

C.

Notices to Tenant :

Any notice or demand to Tenant shall be addressed to Tenant at the Premises.

D.

Change of Address :

Any party hereto may change its address for the purpose of receiving notices or demands as herein provided by a written notice given in the manner aforesaid to the other party hereto. Such notice of change of address shall not become effective, however, until the actual receipt thereof by the other party.

(8)

Possession, Occupancy and Surrender .

A.

Date of Possession :

Tenant shall be entitled to enter into and occupy the Premises for the purpose of completing Tenant’s Work, and for conducting Tenant’s business, from and after the Commencement Date.

In the event that Lessor permits Tenant to occupy the Premises prior to the Commencement Date, such occupancy shall be subject to all of the provisions of this Lease, provided that the Term shall be otherwise unaffected.

B.

Surrender of Premises :

Upon the expiration or sooner termination of the Term and if Tenant has fully and faithfully performed all of the terms, conditions and covenants of this Lease to be performed by Tenant, but not otherwise, Tenant shall, at its sole cost and expense, remove from the Premises its interior and exterior signs and all of its movable trade fixtures and equipment, and other items Tenant has installed or placed on the Premises which have not become the property of Lessor pursuant to Section 4 (all of which are hereinafter referred to as “Tenant’s Property” ). Tenant shall repair all damage thereto resulting from such removal and Tenant shall thereupon surrender the Premises in the same condition as they were on the Commencement Date, reasonable wear and tear, damage by unavoidable casualty, and items expressly allowed by Lessor, excepted. If Tenant has not fully and faithfully performed all of the terms, conditions and covenants of this Lease to be performed by Tenant, Tenant shall nevertheless remove Tenant’s Property from the Premises in the manner aforesaid within fifteen (15) days after receipt of written direction to do so from Lessor, but shall otherwise leave Tenant’s Property on the Premises. In the event Tenant shall fail to remove any of Tenant’s Property as provided herein, Lessor may, but is not obligated to, at Tenant’s expense, remove all or part of Tenant’s Property not so removed and repair all damage to the Premises resulting from such removal and may, but is not obligated to, at Tenant’s expense store the same in any public or private warehouse, and Lessor

shall have no liability to Tenant for any loss or damage to Tenant’s Property or floor coverings caused by or resulting from such removal or otherwise.

C.

Abandonment :

Tenant shall not abandon or vacate the Premises at any time during the Term. If Tenant shall abandon, vacate or otherwise surrender the Premises, or be dispossessed thereof by process of law or otherwise, the same shall constitute a default under this Lease on the part of Tenant and, in addition to any other remedy available to Lessor, any of Tenant’s Property left in, upon or about the Premises shall be deemed to be abandoned and shall become the property of Lessor.

(9)

Common Areas .

A.

Common Areas Defined :

The term “Common Areas” as used in this Lease shall be deemed to include all those areas within the Property for the non-exclusive use of Tenant in common with other authorized users, and shall include, but not be limited to, vehicular parking areas, service areas, driveways, and areas of ingress and egress. Anything herein contained to the contrary notwithstanding, it is understood and agrees that the Common Areas shall not in any event be deemed to be a portion of or included within the Premises.

B.

Use of Common Areas :

Subject to the provisions of this Lease, Lessor hereby grants to Tenant, its subtenants, licensees, concessionaires, suppliers, business invitees, customers, agents, representatives and employees, but only during the Term, the non-exclusive right, in common with others duly authorized by Lessor, to use the Common Areas and the various portions thereof, respectively, for the uses and purposes designated therefor by Lessor. It shall be the duty of Tenant to keep said Common Areas free and clear of any obstructions, barricades or barriers placed or created by Tenant or resulting from Tenant’s operations or use of the Premises.

(10)

Use and Maintenance of Premises and Property by Tenant .

A.

Rules and Regulations :

Tenant shall at all times during the Term, at its sole cost and expense:

(1)

Furnish, install and maintain in the Premises all of Tenant’s Property necessary for the operation of Tenant’s business;

(2)

Maintain the Premises in a clean, neat, sanitary and orderly condition, it being understood that no use shall be made or permitted of the Premises or any part thereof, nor any acts done, which will violate, make inoperative, or increase the existing rate of any insurance policy at any time held by or in any way for the benefit of Lessor pursuant to any provision of this Lease;

(3)

Comply with all governmental rules, regulations, ordinances, statutes and laws now or hereafter in effect pertaining to the Premises or Tenant’s use thereof. Tenant further agrees to comply with all of the rules and regulations of the National Fire Protective Association, and any similar bodies, and will not do, suffer or permit to be done in, upon, or about the Premises any act which will or might increase any insurance rate with respect to the Premises in excess of the insurance rate existing as of the Commencement Date;

(4)

Refrain from burning any trash, papers or garbage of any kind in or about the Premises;

(5)

Store all trash and garbage within the Premises in metal containers so located as not to be visible to customers and business invitees in the Building and so as not to create or permit any health or fire hazard, and arrange for the prompt and regular removal thereof;

(6)

Refrain from committing or suffer to be committed any waste upon the Premises, or any nuisance or act or thing which may disturb the quiet enjoyment of any other Tenant.

(7)

Prevent odors, noxious fumes, smoke, steam, and the like, from escaping or emanating from the Premises into the Building, Common Areas or to other premises within the building.

(8)

Shall not, except as necessary for the operation of its business, knowingly cause or permit any hazardous substance to be used, placed, generated, handled, possessed or stored within the lease Premises. Tenant shall be responsible for all clean-up costs and damages resulting from its release or disposition of hazardous substances.

B.

General Authority :

In addition to the foregoing, Tenant shall at all times during the Term comply with all other reasonable rules and regulations which Lessor may at any time or from time to time establish concerning the use of the Premises and Property.

C.

Alterations :

Except as otherwise herein provided, Tenant shall not make or allow to be made any structural changes, alterations or additions to the Premises or any part thereof without first obtaining the express written consent of Lessor. Any changes, alterations or additions in or to the Premises shall be at Tenant’s sole cost and expense and, except for Tenant’s trade fixtures, equipment and furnishings, shall become the sole property of Lessor. If, during the Term, any change, alteration, addition or correction shall be required by any law, rule or regulations of any governmental authority to be made in or to the Premises or any portion thereof, Lessor shall first give its written consent thereto and such change, alteration, addition or correction shall then be made by Tenant at Tenant’s sole cost and expense.

D.

Repair and Maintenance :

Lessor shall, except as otherwise provided in this Lease, at all times during the Term keep and maintain the plumbing, electrical, heating, air conditioning and ventilating systems appurtenant to and serving the Premises in good order, condition and repair. The cost thereof shall be deemed an Operating Cost.

Tenant shall be responsible for the maintenance of the Premises and shall keep the Premises in good and sanitary order, condition and repair and in compliance with all laws and regulations applicable thereto.

(11)

Management and Maintenance of the Property and Building by Lessor .

A.

Management of Property :

The Property and the Building, including Common Areas, shall be subject to the exclusive management and control of Lessor. Lessor shall have the right from time to time to reasonably designate, relocate and limit the use of particular areas or portions of the Property, and to establish, promulgate and enforce such reasonable rules and regulations concerning the Common Areas as it may deem necessary or advisable for the proper and efficient management, operation, maintenance and use thereof, and Tenant shall comply with the same.

B.

Maintenance of Property :

Lessor shall, throughout the Term, maintain the Building, the Common Areas and the Property in good order, condition and repair. Lessor’s obligation shall not extend to those items that Tenant is required to maintain pursuant to the provisions of this Lease.

(12)

Operating Costs .

Tenant shall pay Lessor, as Additional Rent, Tenant’s Pro Rata Share of Operating Costs for each calendar year during the Term. For the purposes of this Lease, the phrase “Operating Costs” shall be all costs which Lessor may pay or incur in owning, maintaining, and operating the Building, Common Areas and Property, which costs are defined to include, but shall not be limited to:

(i)    All non-capital expenditures incurred in the management, maintenance, repair, service, and replacement of the Property, the Common Areas, and the Building, including, without limitation, the following: management fees equal to four percent (4%) of the Minimum Rent hereunder; fire and building alarm monitoring services; fire sprinkler inspections: cleaning and janitorial services; snow removal, landscaping and grass cutting; parking lot upkeep, resealing and restriping; all utilities not otherwise dealt with elsewhere herein; and all necessary repairs and maintenance to the Property and the elements, systems, and components thereof. Tenant shall provide and pay for its own garbage collection;

(ii)    The cost of all insurance, including, but not limited to: fire; casualty; umbrella policy; liability and rent loss insurance applicable to the Building, Common Areas, Property, and Lessor’s personal property used in connection therewith; and such other insurance as may from time to time be determined by Lessor to be necessary or appropriate, or as from time to time may be required by Lessor’s lender or any other holder of a mortgage interest in the Property.

Tenant’s Pro Rata Share of Operating Costs shall be paid by Tenant at the following times and in the following manner: On the first day of each month during the Term, Tenant shall pay to Lessor a sum equal to one-twelfth (1/12) of Lessor’s estimate of Tenant’s Pro Rata Share of Operating Costs for the calendar year; within thirty (30) days after the end of the calendar year, the difference between the estimated and actual Operating Costs shall be determined and adjusted between Lessor and Tenant, as appropriate. For calendar years in which this Lease commences or terminates, the provisions of this section shall apply, but Tenant’s liability for its Pro Rata Share of Operating Costs shall be subject to a pro rata adjustment, based upon the number of days of said calendar year during which the Term is in effect.

This Lease is intended to be a net lease, and notwithstanding any law, all Rents and other sums payable under this Lease by Tenant whether as Rents or otherwise shall be paid without offset, counterclaim, abatement or defense, and this Lease shall not be subject to termination by Tenant by reason of any cause whatsoever unless such right to terminate is expressly set forth in this Lease.

(13)

Taxes .

Tenant shall pay to Lessor, as Additional Rent, Tenant’s pro rata share of Real Estate Taxes as specified in this Article. Taxes for the first and last lease years will be pro rated based on the number of days within such years divided by 365 days.

The term “Real Estate Taxes” shall mean all taxes and assessments (special or otherwise) payable during the Term with respect to the Property.

Lessor agrees to use its best efforts to have all special assessments paid in installments over the longest term permitted by law.

As close as possible to the beginning of each fiscal year, Lessor shall estimate Real Estate Taxes referred to in this Article and shall notify Tenant of the estimate of Real Estate Taxes. Tenant shall pay one-twelfth (1/12) thereof in equal monthly installments, together with the payment of Minimum Rent. In the event the aggregate of Tenant’s installments during the year shall be less than the amount of taxes due from the Tenant, such deficiency shall be paid to Lessor within ten (10) days after demand therefor. If the amount paid by Tenant during said Fiscal Year is greater than the amount actually owed from Tenant, the excess shall be credited against the next Rent payments due hereunder.

(14)

Utilities .

Tenant shall pay before delinquency, at its sole cost and expense, all utilities metered to Tenant. All of the unsegregated utilities shall be prorated by Lessor between the Tenants and shall be billed as Additional Rent. In the event Lessor or Tenant shall determine that any tenant uses a disproportionate share of utilities that are not separately metered, Lessor shall have the option to use its discretion in allocating the utilities between the tenants.

(15)

Insurance; Waiver .

A.

Tenant’s Insurance :

Tenant shall, at all times during the Term, at its sole cost and expense, procure and maintain in force and effect a policy or policies of comprehensive public liability insurance issued by an insurance carrier approved by Lessor, insuring against loss, damage or liability for injury to or death of persons and loss or damage to property occurring from any cause whatsoever in, upon or about the Premises. Such liability insurance shall be in amounts of not less than One Million and no/100 ($1,000,000.00) Dollars for personal injuries to or death of any one person whomsoever, and One Million and no/100 ($1,000,000.00) Dollars for personal injuries to or death of any two or more persons whomsoever arising from the same occurrence, and Three Hundred Thousand and no/100 ($300,000.00) Dollars for damage to property, including property of Tenant. Tenant and Lessor shall be the named insureds (and at Lessor’s option any other

persons, firms or corporations designated by Lessor shall be additional named insureds) under each such policy of insurance.

Tenant shall also, at all times during the Term, at its sole cost and expense, procure and maintain in force and effect building plate glass insurance, and standard form of fire with extended coverage insurance covering Tenant’s property and its merchandise, and the personal property of others in Tenant’s possession in, upon or about the Premises.

Such insurance shall be in an amount equal to the current cash value of the property required to be insured. Tenant and Lessor shall be the named insureds (and at Lessor’s option any other persons, firms or corporations designated by Lessor shall be additional named insureds) under each such policy of insurance.

B.

Certificates of Insurance :

A certificate issued by the insurance carrier for each policy of insurance required to be maintained by Tenant hereunder shall be delivered to Lessor on or before the commencemen