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LEASE OF MILFORD FACILITY

Lease Agreement

LEASE OF MILFORD FACILITY | Document Parties: CYCLE COUNTRY ACCESSORIES CORP You are currently viewing:
This Lease Agreement involves

CYCLE COUNTRY ACCESSORIES CORP

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Title: LEASE OF MILFORD FACILITY
Governing Law: Iowa     Date: 11/21/2007
Industry: Misc. Capital Goods     Sector: Capital Goods

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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

renewal.

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

the Tenant).

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

rental.

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.

DEFINITIONS

"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

follows:

PERFORMANCE

PAYMENT

L=LANDLORD

T=TENANT

%

Landlord

% Tenant

Interior walls, floors and

ceilings

T

0

100

Sewer, plumbing fixtures, pipes,

wiring, electrical fixtures

within the structure

T

0

100

Heating equipment

T

0

100

Air conditioning

T

0

100

Plate glass (replacement)

T

0

100

Sidewalks

L

100

0

Parking areas

L

100

0

Other common areas (strike if

inapplicable)

L

100

0

 

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

employees.

EQUIPMENT, DECORATING AND ALTERATIONS

G. The following items of equipment, furnishings and fixtures

shall be supplied and replaced by the parties as follows:

SUPPLIED

L=Landlord

T=Tenant

REPLACED

L=Landlord

T=Tenant

Carpeting/floor covering

T

T

Drapes, shades, blinds

T

T

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

similar items.

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

OF FIXTURES.

(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

determines appropriate.

(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.

11. INSURANCE.

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


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