Exhibit 10.2
Lease for Commercial Land and
Building
151 24
th AVENUE SW, OWATONNA,
MINNESOTA
This Agreement, made this 21st day of
July , 2005 between Doug Hughes Properties, LLC,
( the “Landlord”), and Cybex International,
Inc. , (the “Tenant”).
WITNESSETH, that the said Landlord
in consideration of the Rents, Covenants and Conditions of this
Lease, hereby leases to the Tenant the following described
Premises, situated in Steele County, at 151 24
th Avenue SW , Owatonna, Minnesota, described as
approximately 200,000 square feet and attached property as
more particularly described in Exhibit A attached
hereto.
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LANDLORD & ADDRESS
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Doug Hughes
Properties, LLC,
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Douglas W.
Hughes, President
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1470 Sunset
Drive SW
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Owatonna, MN
55050
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Cell
1-507-213-0414
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Fax
1-507-455-1146
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TENANT &
ADDRESS
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Cybex
International, Inc.
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151 24
th
Ave SW
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Owatonna, MN
55060
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Attn: Ed
Kurzontkowski
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1.
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BINDING EFFECT,
MINNESOTA LAW. This Lease shall bind the parties, their heirs,
personal representatives, successors, and assigns. This Lease shall
be governed by and construed and interpreted in accordance with the
Laws of the State of Minnesota.
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2.
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EXHIBITS. The
following Exhibits are attached hereto are incorporated as part of
the Lease.
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(a)
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PLAN DRAWING
– Exhibit A
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3.
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INTENDED USE OF
PREMISES. It is understood and agreed to between the parties that
the Premises during the continuance of this Lease shall be used and
occupied for a Industrial Manufacturing , all related uses,
any lawful purpose and for no other purpose(s) without the written
consent of Landlord, and that Tenant will not use the Premises for
any purpose in violation of any law, municipal ordinance or
regulation.
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4.
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INSURANCE - BY
TENANT. The Tenant will provide the Landlord a Certificate of
Insurance. The Tenant shall obtain and maintain the following
insurance coverages, through the expiration or termination of this
Lease, at the Tenants expense:
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(a) A policy of comprehensive public
liability insurance naming the Tenant as the insured and Landlord
as the additional insured to insure against injury to property,
persons, or loss of life arising out to the ownership, use
occupancy, or maintenance of the Premises, with limits of public
liability not less than $1,000,000 per occurrence combined single
limit coverage for death and /or bodily injury including personal
injury and property damage liability.
(b) A policy providing “All
Risk” coverage insuring Tenant’s business, leasehold
improvements, merchandise, trade fixtures, furnishings, equipment,
full coverage of loss of revenue and personal property.
(c) The Landlord may from time to
time require that the policy limits of any or all such insurance be
increased to reflect the effects of inflation and changes in normal
commercial insurance practices.
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5.
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INSURANCE - BY
LANDLORD. The Landlord shall obtain before the date hereof and
shall maintain through the expiration or termination of this Lease,
the following insurance coverages:
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(a) A policy of comprehensive public
liability insurance on the Common Areas with limits of public
liability not less than $1,000,000 per occurrence combined single
limit coverage for death and /or bodily injury including personal
injury and property damage liability.
(b) A policy providing “All
Risk” coverage excluding the Tenant’s business,
leasehold improvements, merchandise, trade fixtures, furnishings,
equipment, loss of revenue, personal property and on the Premises.
The coverage shall be for the full insurable replacement value
thereof.
(c) All premium costs and all other
costs and expenses incurred by the Landlord in providing the
insurance required of Landlord shall be considered an Operating
Expense and applied to the Tenant’s monthly triple-net
operating costs with the rent.
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6.
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MUTUAL WAIVER
OF SUBROGATION. Landlord and Tenant each hereby waive and release
all claims, liabilities and causes of action against the other and
their agents, servants and employees for loss or damage to, or
destruction of, the buildings and other fire, explosion or other
perils included in any insurance maintained hereunder, whether
caused by the negligence of any of said persons or otherwise. This
waiver shall remain in force as the insurer of the premises shall
consent thereto without additional premium, and if additional
premium is charged, Tenant shall pay the same to keep this waiver
in force.
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7.
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INSURANCE
– INDEMNIFICATION
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(a) TENANT SHALL INDEMNIFY, defend
and hold harmless the Landlord from and against any and all claims
arising from Tenant’s use of the Premises, or from the
conduct of Tenant’s business or from any activity, work or
things done, permitted or suffered by Tenant in or about the
Premises and shall further indemnify, defend and hold harmless
Landlord from and against and all claims arising from any
negligence of the Tenant, or any of Tenant’s agents,
contractors, or employees, and from and against all cost,
attorney’s fees, expenses and liabilities incurred in the
defense of any such claim or any action of proceeding brought
thereon, unless arising from Landlord’s negligence or willful
misconduct.
(b) LANDLORD SHALL INDEMNIFY, defend
and hold harmless Tenant from and against any and all claims
arising from the conduct of Landlord’s business in or about
property, and shall further indemnify, defend and hold harmless
Tenant from and against any and all claims arising from any
negligence of the Landlord, or Landlord’s agents, contractors
or employees, and from and against all costs, attorney’ fees,
expenses, and liabilities, incurred in the defense of any such
claim or any action or proceeding brought thereon.
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8.
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INSURANCE -
DAMAGE OR DESTRUCTION. In the event the Premises are damaged by
Fire, or any other casualty insured under Landlord’s fire and
extended coverage insurance policy, to the extent that the facility
is temporarily unusable, rent will abate proportionately and
Landlord shall restore. Landlord and Tenant will cover their own
relocation and reconstruction costs during the reconstruction
process. Tenant shall have the right to terminate the lease if
premises are more than 50% damaged. Upon completion of such repairs
and replacements by Landlord, Tenant shall promptly repair or
replace all portions of the Premises, build-outs, lease-hold
improvements, furniture, fixtures, to the condition existing
immediately preceding such casualty. Business Interruption
Insurance – Relocation Rent shall be covered through the
insurance carried by the Tenant and the Landlord’s loss of
rent will be covered by Loss of Rent Insurance.
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9.
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INSURANCE
– CERTIFICATE OF INSURANCE FOR SERVICES PROVIDED FOR TENANT
Anyone performing services for the Tenant at these Premises will
provide a Certificate of Insurance and any or all licenses or
contractor numbers to the Landlord. These documents may be kept on
file with the Tenant for documentation to the Landlord.
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10.
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SUBORDINATION/ESTOPPEL CERTIFICATES. Tenant
agrees to, and will upon demand from Landlord, execute such
instruments as may be required to subordinate the rights and
interest of tenant created by this lease to the lien of any first
mortgage at any time placed upon the leased premises and certified
the lease is unmodified. Such subordinations shall recognize this
Lease and Tenant’s Repurchase Option defined under
Section 16b herein.
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11.
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LEASE
ACCEPTANCE. Tenant shall provide the Landlord with the Executed
Lease prior to the end of the contingency period for the purchase
of the property, provided this Lease shall not be in effect until
completion of Closing on the purchase of the property as provide
for under that certain Purchase and Sale Agreement dated July
, 2005 (the
“Agreement”).
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12.
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LEASE TERM BASE
MONTHLY RENT AMOUNT
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(a)
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Years 1 though 5
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$ 40,000 per
month based on initial Annual Base Rent of $2.40 per SF
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$480,000 per
year, payable in advance, in equal monthly installments.
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(b)
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Extension Years 6-10
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$ 44,167 per
month based on Annual Base Rent of $2.65 per SF
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$53,0004 per
year, payable in advance, in equal monthly installments.
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(c)
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Plus Monthly
Triple Net CAM Operating Expenses for all Initial and Extension
Lease Terms
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13.
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LEASE TERM
TRIPLE NET CAM EXPENSES
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(a) Common Area Maintenance (CAM):
The Tenant will be responsible for the CAM Expenses. The CAM
Expenses will be calculated based on the Percent of rentable square
footage occupied by the Tenant in relation to the total square
footage of building times the total amount of all CAM Operating
Expenses paid during each Lease Month.
(b) CAM Expenses are the operating
expenses consisting of, but not limited to: real estate taxes and
all taxes and assessments related to Premises, cleaning, utilities,
outdoor lighting, waste management, outdoor and indoor window
washing, lawn mowing and landscaping maintenance, snow and ice
removal, property and liability insurance, supplies, fire
protection charges, pest control and any and all other costs
applied to the property. CAM shall not include management
fees.
(c) Any and all CAM Charges paid by
the Landlord will be at the actual cost as a pass-through to the
Tenant with no commissions/percentages applied by the Landlord. To
simplify the monthly lease payment by making the payment equal each
month for a given lease year, the Lease payment will include an
estimated monthly CAM amount to equal the same payment each month
and reconciled in the first 60 days of the following year. To
further simplify the monthly CAM Expenses, many of the CAM related
costs should be paid directly by the Tenant to the provider except
for the Property taxes. Tenant may audit Landlord’s records
relating to CAM Expenses.
(a) The 5-Year Lease Term will begin
in conjunction with the Closing of the property purchase under the
Agreement. The closing date will be the lease start
date.
(b) Tenant shall have the right to
renew this lease for one (1) additional term of five
(5) years beyond the initial 5 year term. Tenant shall provide
written notice of its intent to renew ninety (90) days before
the expiration of the initial 5 year lease term. The rent during
the renewal term shall be $2.65 per rentable square feet of the
Premises.
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15.
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LEASE MONTHLY
RENT PAYMENT. The first Monthly Base Rent Payment shall be due on
the date of closing of the Agreement. The Tenant shall
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