David J. Stein, Jr., Stein Law Office, L.L.P., 926 Okoboji Av., P.O.
Box 537, Milford, IA 51351, Phone: (712) 338-2431
LEASE - BUSINESS PROPERTY
THIS AGREEMENT, made and entered into this November ________,
2007, by and between Danbom Properties, LLC, or their assigns
("Landlord"), whose address, for the purpose of this lease, is 1806
Jeppeson Road, Milford IA 51351-7039, and Cycle Country Accessories
Corporation ("Tenant"), whose address for the purpose of this lease is
P.O. Box 257, Spencer, Iowa 51301.
The parties agree as follows:
1. PREMISES AND TERM. The Landlord, in consideration of the
rents, agreements and conditions herein contained, leases to the
Tenant and Tenant leases from Landlord, according to the terms of this
lease, the following described "premises", situated in Dickinson
County, Iowa: approximately 92,552 square feet of the building located
on the following real estate:
A tract of land in the Northeast Quarter of the Northeast
Quarter (NE1/4NE1/4) of Section 1, Township 98 North, Range 37
West of the 5th P.M., in the City of Milford, Dickinson
County, Iowa, described as follows: - Commencing at the
Northwest corner of the Northeast Quarter of the Northeast
Quarter (NE1/4NE1/4) of said Section 1; thence South 0 10' West
along the Westerly line of said NE1/4NE1/4 of Section 1 a
distance of 50.00 feet to the point of beginning; thence
North 90 00' East parallel to the North line of said NE1/4NE1/4
of Section 1, a distance of 935.92 feet; thence
Southeasterly along a 332.00 foot radius curve, concave
Southwesterly and tangent to the proceeding course, a
distance of 391.61 feet to the Westerly right-of-way line
of U.S. Highway No. 71; thence South 0 02'30" East along
the Westerly right-of-way line of said U.S. Highway No. 71,
a distance of 370.03 feet to the Northerly right-of-way
line of Primary Road No. 32; thence North 67 19' West along
the Northerly right-of-way line of said Primary Road No.
32, a distance of 669.57 feet; thence North 89 07' West
along the Northerly line of said Primary Road No. 32, a
distance of 215.41 feet; thence North 67 19' West along the
Northerly right-of-way line of said Primary Road No. 32, a
distance of 444.75 feet to the Westerly line of said NE1/4NE1/4
of Section 1; thence North 0 10' East along the Westerly
line of said NE1/4NE1/4 of Section 1, a distance of 142.41 feet
to the point of beginning; EXCEPT a part of the Northeast
Quarter of the Northeast Quarter (NE1/4NE1/4) of said Section
1, Township 98 North, Range 37 West of the 5th P.M.,
described as follows:- Commencing at the Northeast Corner
of said Section 1; thence North 89 53.1' West, 75.0 feet
along the north line of the Northeast Quarter of the
Northeast Quarter of said Section 1 to the Point of
Beginning; thence continuing North 89 53.1' West, 35.0 feet
along the north line of the Northeast Quarter of the
Northeast Quarter of said Section 1; thence South 0 03.9'
West, 610.0 feet; thence South 67 12.6' East, 37.9 feet;
thence North 0 03.9' East, 625.4 feet to the Point of
Beginning, containing 0.50 acre, including 0.18 acre of the
present established roadway; AND A parcel of land located
in a part of the NE1/4NE1/4 of Section 1, Township 98 North,
Range 37 West of the 5th P.M., more particularly described
as follows: Commencing at the NE 1/4 of said Section 1;
thence North 88 47'27" West, 110.00 feet along the north
line of said NE 1/4 to a point on the existing west right-of-
way line of Primary Road US No. 71; thence South 1 09'52"
West, 35.01 feet along said west right-of-way line to the
Point of Beginning; thence continuing South 1 09'52" West,
156.42 feet along said existing right-of-way line; thence
northwesterly 318.51 feet along the arc of a 332.00 foot
radius curve, concave southwesterly and having a cord
bearing, North 61 18'25", 306.43 feet; thence North
88 47'27" West, 935.52 feet to a point on the west line of
the NE 1/4 of the NE 1/4 of said Section 1; thence North
0 56'22" E, 15.00 feet along said west line; thence South
88 47'27" East, 1207.31 to the Point of Beginning,
containing 29,578 square feet;
together with the improvements thereon, and all rights, easements
and appurtenances, which, more particularly, includes the space and
premises as may be approximately shown on "Exhibit A," if attached,
for an initial term of 3 years, commencing immediately following the
closing on Landlord's purchase of the aforementioned building and
property and ending at midnight on the last day of the lease term,
which shall be 3 years from the date of the commencement of this
Lease, unless extended as provided herein, upon the condition that the
Tenant pays rent therefor, and otherwise performs as provided in this
lease. Total building square footage is approximately 103,056 square
feet of which Tenant is leasing approximately 92,552 square feet.
Tenant is only leasing from Landlord a portion of the building
(approximately 92,552 square feet) with access thereto. Tenant is not
leasing from Landlord the remaining portion of the building
(approximately 10,504 square feet) or land surrounding the building.
Cycle Country will have normal access, necessary parking rights,
and necessary use of the land for loading and unloading purposes and
other reasonable use of the real estate surrounding the building.
2. RENT. Tenant agrees to pay Landlord as rent $2.00 per square
foot for a total of $185,104.00 payable in monthly installments of
$15,425.34 per month, in advance commencing on the first day of the
beginning of this Lease, and on the 1st day of each month thereafter,
during the term of this lease. Rent for any partial month shall be
prorated as additional rent. This Lease is a triple net lease. In
addition to the above monthly rental Tenant shall also pay: for all
maintenance of the leased premises; and a prorata share of the
insurance, taxes, and other common charges of the building and
premises based upon the total square footage of the building. All
sums shall be paid at the address of Landlord, as above designated, or
at such other place in Iowa, or elsewhere, as the Landlord may, from
time to time, designate in writing. Delinquent payments shall draw
interest at 10% per annum from the due date, until paid.
Tenant may not reduce the square footage Tenant is leasing from
Landlord during the initial 3-year term of this Lease. If, and only
if, Tenant gives Landlord written notice, at least 90 days prior to
the expiration of the initial 3-year term, Tenant may reduce the
square footage Tenant is leasing from Landlord during the first
renewal, if Tenant properly exercises a renewal.
Tenant may not reduce the square footage Tenant is leasing from
Landlord during the second renewal term of this Lease unless Tenant
gives Landlord written notice, at least 90 days prior to the
expiration of the first renewal term of this Lease, that Tenant
intends to reduce the square footage Tenant is leasing from Landlord
during the second renewal term, if Tenant properly exercises a
2 (1). MULTIPLE TENANTS. If any other Tenants in adjoining
premises share responsibility with Landlord and Tenant in any
expenses, the percentages allocated to Landlord and Tenant in this
lease shall represent only their respective portions of the total
shared expenses. Therefore, their percentages may total less than
100%. Nothing shall prevent the Landlord from paying a Tenant's share
of an expense, and billing the Tenant for the amount so paid.
2 (2). "TRIPLE NET"PROVISION. Tenant agrees that all
duties and obligations to repair, maintain and provide utilities and
services (paragraphs 6 and 7), to pay taxes and special assessments
(paragraph 10) and to pay for casualty and liability insurance
(paragraph 11) shall be borne solely by Tenant during the term of this
lease. (If the parties select this provision, all duties and
obligations set forth in paragraphs 6, 7, and 10 shall be performed by
3. POSSESSION. Tenant shall be entitled to possession on the
first day of the term of this lease, and shall yield possession to the
Landlord at the end of the lease term, except as herein otherwise
expressly provided. Should Landlord be unable to give possession on
said date, Tenant's only damages shall be a rebating of the pro rata
4. USE OF PREMISES. Tenant covenants and agrees during the term
of this lease to use and to occupy the leased premises only for
purposes approved by Landlord. Tenant may utilize its rented portion
of the building in the same manner as it now does as well as for any
other general manufacturing not involving any hazardous wastes, except
for chemicals provided for below, such as paints, etc. For
restrictions on such use, see paragraphs 6(c), 6(d) and 11(b) below.
Other business activities are subject to Landlord's approval. Tenant
may, at its expense, alter or modify the leased premises to suit its
needs, with prior approval of the Landlord.
5. QUIET ENJOYMENT. Landlord covenants that its estate in said
premises is in fee simple and that the Tenant, if not in default,
shall peaceably have, hold and enjoy the premises for the term of this
lease. Landlord shall have the right to mortgage all of its right,
title, interest in said premises at any time without notice, subject
to this lease.
6. EQUIPMENT, DECORATING, REPLACEMENT, REPAIR AND MAINTENANCE.
"Maintain" means to clean and keep in good condition.
"Repair" means to fix and restore to good condition after damage,
deterioration or partial destruction.
CONDITIONS OF PREMISES
A. Tenant takes the premises in its present condition, except for
such repairs and alterations as may be expressly otherwise
provided in this lease.
REPAIRS AND MAINTENANCE
B. Unless damaged by Tenant, Landlord shall replace and repair
the structural parts of the building. For purposes of this
lease, the structural parts of the building shall mean the
foundation, exterior walls, load bearing components of interior
floors and walls, the roof and all sewers, pipes, wiring and
electrical fixtures outside of the structure.
C. Repair shall be performed and paid for by the parties as
Interior walls, floors and
Sewer, plumbing fixtures, pipes,
wiring, electrical fixtures
within the structure
Plate glass (replacement)
Other common areas (strike if
D. Landlord shall be responsible for maintenance of all common
area entirely under Landlord's control. Tenant shall be
responsible for all other maintenance. If Landlord has shared
maintenance responsibilities with other Tenants, this Tenant's
share of maintenance is a percentage based upon the square
footage leased to Tenant as it relates to the total square
footage of the building.
E. Any repair or maintenance not specifically provided for above
shall be performed and paid for by Tenant (subject to LIMITATION,
if any, regarding repairs in Paragraph C, above).
F. Each party shall perform their responsibilities of repair and
maintenance to the end that the premises will be kept in a safe
and serviceable condition. Neither party will permit nor allow
the premises to be damaged or depreciated in value by any act,
omission to act, or negligence of itself, its agents or
EQUIPMENT, DECORATING AND ALTERATIONS
G. The following items of equipment, furnishings and fixtures
shall be supplied and replaced by the parties as follows:
Drapes, shades, blinds
Heating and air conditioning equipment shall be serviced by
Tenant, at Tenant's expense and replacement, if necessary, will
be Landlord's responsibility and expense.
Any similar equipment, furnishings, and fixtures for the leased
premises not specifically provided for above shall be provided
and paid for by Tenant. Any equipment, furnishings or fixtures
to be supplied by Tenant shall be subject to the Landlord's prior
written approval as to quality and method of installation.
Tenant shall provide all trade equipment, furnishings and
fixtures used in connection with the operation of its business,
such as telephones, computers, desks, chairs, shelving and
H. Tenant shall be responsible for all interior decorating.
Tenant shall make no structural alterations or improvements
without the prior written consent of the Landlord.
AMERICANS WITH DISABILITIES ACT
I. Tenant will make no unlawful use of said premises and agrees
to comply with all valid regulations of the Board of Health, City
Ordinances or applicable municipality, the laws of the State of
Iowa and the Federal government, but this provision shall not be
construed as creating any duty by Tenant to members of the
general public, provided, however, responsibility for compliance
with the Americans with Disabilities Act shall be performed and
paid for by the parties as follows: Landlord and Tenant shall
each be responsible for compliance with the American with
Disabilities Act as to their respective areas.
7. UTILITIES AND SERVICES. Utilities and services shall be
furnished and paid for by the parties as follows: Tenant shall pay a
prorata share of the cost of all utilities and services to the
building based upon the square footage leased to Tenant, with the only
exception being the electricity for the building, which is to be paid
by Tenant. Tenant will pay the cost of electricity for the entire
building, however, Landlord shall give Tenant credit of $300.00 per
month, which credit is to be applied towards Tenant's rent. Tenant
will have one of their workers do the snow removal for the building
and will send a bill therefor to Landlord. Landlord will pay Tenant
for this snow removal bill.
8. TERMINATION, SURRENDER OF PREMISES AT END OF TERM -- REMOVAL
(a) TERMINATION. This lease shall terminate upon
expiration of the original term; or if this lease expressly
provides for any option to renew, and if any such option is
exercised by the Tenant, then this lease will terminate at the
expiration of the option term or terms.
(b) OPTION TO RENEW. Tenant may renew this lease, on the
same terms and conditions as set forth in paragraph 2, including
rent at $2.00 per square foot, for two (2) additional terms of
one (1) year each by giving Landlord a written notice of intent
to renew at least 90 days prior to the expiration of the term
that precedes each such renewal term.
(c) SURRENDER. Tenant agrees that upon termination of this
lease it will surrender and deliver the premises in good and
clean condition, except the effects of ordinary wear and tear and
depreciation arising from lapse of time, or damage without fault
or liability of Tenant.
(d) HOLDING OVER. Continued possession by Tenant, beyond
the expiration of its tenancy, coupled with the receipt of the
specified rental by the Landlord (and absent a written agreement
by both parties for an extension of this lease, or for a new
lease) shall constitute a month to month extension of the lease,
which Landlord, at its option, may take such legal remedies it
(e) REMOVAL OF FIXTURES. Tenant may, at the expiration of
its tenancy, if Tenant is not in default, remove any fixtures or
equipment which Tenant has installed in the premises, providing
Tenant repairs any and all damages caused by removal.
9. ASSIGNMENT AND SUBLETTING. Tenant shall not assign or sublet
the premises or any part thereof without prior written approval of the
Landlord. Landlord's approval of Tenant's assignment of the lease or
subletting all or a portion of the building will not be unreasonably
withheld by Landlord. Any assignment of this lease or subletting of
the premises or any part thereof by Tenant, without the Landlord's
written permission shall, at the option of the Landlord, make the
rental for the balance of the lease term due and payable at once.
Landlord, at its/their option, may assign this Lease.
10. REAL ESTATE TAXES.
A. Tenant shall pay a prorata share (based upon the square
footage leased by Tenant) all installments of real estate
taxes that would become delinquent if not paid during the
term of this lease; any increase in such installments that
exceeds the amount of the installment that would be
delinquent if not paid; and all special assessments that
would be delinquent if not paid during the term of this
lease. If Tenant is leasing all of the square footage,
then Tenant shall pay all real estate taxes and any
increase thereof, and all special assessments.
B. PERSONAL PROPERTY TAXES. Tenant agrees to timely pay
all taxes, assessments or other public charges levied or
assessed by lawful authority against its personal property
on the premises during the term of this lease.
C. Each party reserves its right of protest of any
assessment of taxes.
A. PROPERTY INSURANCE. Landlord and Tenant agree to insure
their respective real and personal property for the full
insurable value. Such insurance shall cover losses
included in the Insurance Services Official Broad Form
Causes of Loss (formerly fire and extended coverage).
B. LIABILITY INSURANCE. Tenant shall obtain commercial
general liability insurance in the amounts of $1,000,000.00
each occurrence and $2,000,000.00 annual aggregate per
location. Tenant has already, or will also obtain, an
umbrella policy which results in total underlying and
umbrella coverages of $2,000,000.00 per incident and
$4,000,000.00 annual aggregate. Such policy shall include
liability arising from premises operations, independent
contractors, personal injury, products and completed
operations and liability assumed under an insured contract.
This policy shall be endorsed to include the Landlord as an
additional named insured.
C. CERTIFICATES OF INSURANCE. Prio