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EXHIBIT 10.40
AGREEMENT
This Agreement ("Agreement") is entered into as of the 10th day of
September, 1998 ("Effective Date") between BIKER'S DREAM, INC., a California
corporation ("Biker's Dream") and BIG BIKE OF DAYTONA, INC., a Florida
corporation ("Big Bike").
Background: Biker's Dream is the owner of a distinctive business concept
for selling, customizing, and repairing previously owned Harley-Davidson
motorcycles, and for selling motorcycle products, merchandise, collectibles,
clothing, jewelry, Ultra Motorcycles, and accessories through a network of
dealers operating in retail locations. Big Bike is a licensee of Biker's Dream,
Inc.
Subject to the terms and conditions of this Agreement, Biker's Dream
wishes to provide financing to Big Bike for the opening and operation of a
retail store in Daytona Beach, Florida.
Accordingly, in consideration of the foregoing and the mutual covenants
set forth herein, the parties agree as follows:
1. Lease. Biker's Dream will lease retail space in Daytona Beach and
Sublease the space to Big Bike, subject to the following terms:
a. Biker's Dream has entered a Lease which is attached hereto as
Exhibit "A" incorporated herein.
b. Biker's Dream and Big Bike have entered into a Sub-Lease which
is attached hereto as Exhibit "B" and incorporated herein.
c. Biker's Dream, shall also pay all utilities associated with
the retail store.
d. The terms and conditions governing the Sub-Lease will require
payments to be made after each Bike Week, and after each Biketoberfest. The
amount due under the SubLease shall be determined by net profits, or the amount
paid by Biker's Dream for rent and utilities, whichever amount is less.
e. Big Bike shall be required to pay net profits to Biker's Dream
within thirty (30) days of the conclusion of each Bike Week and Biketoberfest.
For the purposes of this Agreement, "net profits" shall be defined to mean
profits net of costs and commissions.
f. One hundred per cent (100%) of net profits from sales
generated from inventory (parts, as well as motorcycles) consigned by Biker's
Dream, shall be paid to Biker's Dream, within thirty (30) days of the end of
each month, until the amount due under the SubLease for a given year equals the
amount paid by Biker's Dream under the Lease for rent and utilities for that
year, then prior to the commencement of the next anniversary of the Lease, Big
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Bike shall pay one-half (1/2) of the net profits on sales to Biker's Dream, for
net profits over and above the amount due under the Sub-Lease. For the purposes
of this paragraph, the term "net profits" for the sale of motorcycles shall be
defined as the amount of the retail sale of a motorcycle, minus the actual
dealer invoice price for the particular motorcycle, and minus fifteen percent
(15%) of the difference between the retail sales price and the dealer invoice
price. For the purposes of this paragraph, the term "net profits" for the sale
of parts shall be the retail sales price minus the purchase price, and minus
five per cent (5%) of the retail sales price.
g. Big Bike shall retain all profits generated other than from
items consigned by Biker's Dream.
h. Big Bike shall pay for the initial Tenant improvements and
build-out of the retail space. Big Bike shall supply copies of all invoices for
Tenant improvements to Biker's Dream. Big Bike shall deduct from accumulated
rent and utilities due under the Sub-Lease all amounts paid for permanent
improvements to the retail space. Up to one-third of the amount paid for
permanent improvements shall be deducted from the rent due following
Biketoberfest 1998. One half of the remaining amount paid for permanent
improvements shall deducted from the rent due following Bike Week 1999. The
remaining amount paid for permanent improvements shall be deducted from the rent
due following Biketoberfest 1999. Permanent improvements shall include, but not
be limited to the cost of electrical, lighting, plumbing, painting, permanent
counters, permanent awnings, permanent window treatments and office build-out.
Big Bike shall not be entitled to a deduction for non-permanent improvements,
including all non-permanent improvements which may be utilized in other Biker's
Dream facilities.
2. Representations and warranties of Biker's Dream. Biker's Dream hereby
represents and warrants to Big Bike as follows:
a. Biker's Dream is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and has
full right, power and authority to enter into this Agreement and to perform all
of its obligations hereunder.
b. Biker's Dream is financially capable of satisfying all of the
monetary obligations required in this Agreement.
c. There are no actions or proceedings pending or threatened
which in any way jeopardize or impair the ability of Biker's Dream to satisfy
the obligations contained within this Agreement.
d. The representations and warranties contained in this Agreement
shall survive the execution and delivery hereof.
3. Representations and Warranties of Big Bike. Big Bike represents and
warrants to Biker's Dream that:
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a. Big Bike is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida and has full right,
power and authority to enter into this Agreement and to perform all of its
obligations hereunder.
b. The execution and performance by Big Bike of this Agreement
shall not cause a breach of any agreement or contract to which Big Bike is a
party.
c. There are no actions or proceedings pending or threatened
which in any way jeopardize or impair the ability of Biker's Dream to satisfy
the obligations contained within this Agreement.
d. The representations and warranties contained in this Agreement
shall survive the execution and delivery hereof.
4. Relationship of Parties. Nothing is this Agreement shall be deemed to
constitute either party hereto as an agent, legal representative, joint
venturer, partner, employee or servant of the other party for any purpose
whatsoever. It is understood between the parties hereto that each party is
independent of the other and is in no way authorized to make any contract,
agreement, warranty, or representation on behalf of the other party, or to
create any obligation (whether express or implied) on behalf of the other party.
Notwithstanding anything to the contrary, Big Bike shall not incur or become
liable for any expense, obligation, cost, claim, or demand made upon Biker's
Dream in connection with the transactions contemplated by this Agreement, or any
contract, agreement, or other document entered into between Biker's Dream and
any third party.
5. Indemnification by Biker's Dream. Biker's Dream covenants and agrees
tp indemnify and hold harmless Big Bike from and against any and all losses,
costs, claims, demands, damages, expenses, judgments, awards, or liabilities
(including reasonable attorneys' fees) arising out of or relating to (i) any
claim of third persons against Big Bike involving the business relationship as
defined by the terms of this Agreement, or (ii) any breach or inaccuracy of any
covenant, representation or warranty by Biker's Dream contained in this
Agreement, or (iii) any breach of this Agreement by Biker's Dream. The
provisions of this paragraph shall survive any expiration or termination of this
Agreement.
6. Indemnification by Big Bike. Big Bike covenants and agrees to
indemnify and hold harmless Biker's Dream from and against any and all losses,
costs, claims, demands, damages, expenses, judgments, awards, or liabilities
(including reasonable attorneys' fees) arising out of or relating to (i) any
claim of third persons against Biker's Dream involving the business relationship
as defined by the terms of this Agreement, or (ii) any breach or inadequacy of
any covenant, representation or warranty by Big Bike contained in this
Agreement, or (iii) any breach of this Agreement by Big Bike. The provisions of
this paragraph shall survive any expiration or termination of this Agreement.
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7. Termination.
a. Term. The term of this Agreement shall commence as of the
Effective Date and shall continue until the expiration of the Lease, which is
attached hereto as Exhibit "A", including any and all renewal terms. Big Bike
shall have the sole right to elect any renewal term, and absent such election
shall have no liability upon the Lease or Sub-Lease (three years).
b. Termination Upon Breach. This Agreement may be terminated by
either party in the event of a material breach of this Agreement by the other
party, by written notice to the breaching party; provided, however, that the
party in breach shall have twenty (20) days from the date such notice is
delivered to cure such breach to the reasonable satisfaction of the
non-breaching party.
8. Additional Agreements.
a. Non-Compete. Biker's Dream agrees that during the term of this
Agreement, neither Biker's Dream, nor any of its principals, officers,
directors, stockholders, employees or agents shall engage, directly or
indirectly, either as a principal, agent, proprietor, partner, stockholder,
director, officer, employee, consultant, joint venturer, or otherwise shall
participate in any manner, in the sale of products sold by Biker's Dream under
the name Biker's Dream or allow any other entity to sell Ultra Motorcycles or
operate under the name Biker's Dream within the boundaries of Volusia County,
Florida. The parties intend that this non-compete shall be construed as a series
of separate covenants, one for each separate legal jurisdiction in which this
covenant applies. If a court shall refuse to enforce any of the separate
covenants included herein, then such unenforceability shall be deemed eliminated
from these provisions to the extent necessary to permit the remaining separate
covenants to be enforced. Notwithstanding the foregoing, it is the intent and
agreement of Biker's Dream and Big Bike that these covenants be given the
maximum force, effect, and application permissible under applicable law. Biker's
Dream further acknowledges and consents that Big Bike shall be entitled to
injunctive relief (without bond) prohibiting any conduct by Biker's Dream in
violation of this Agreement in addition to any other remedies which may be
available to Big Bike. In the event this Agreement is terminated by Big Bike due
to Biker's Dream's material breach as contemplated under paragraph 7(b) hereof,
then the period of time during which Biker's Dream is prohibited from engaging
in the Permitted uses in connection with its Business shall be extended by the
length of time remaining until the Agreement would otherwise naturally expire
pursuant to paragraph 7(a).
b. Covenants of Biker's Dream. Biker's Dream covenants with Big
Bike during the term of this Agreement as follows:
i. Biker's Dream shall assist Big Bike, as and when
reasonably requested, in recommending and/or facilitating initial contact with
any manufacturers of the goods and items contemplated by the scope of this
Agreement.
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ii. Biker's Dream shall assist Big Bike, when reasonably
requested, in identifying and making initial contact with all Biker's Dream
Motorcycle Dealerships with whom Biker's Dream may have contact with from time
to time during the term of this Agreement.
c. Covenants of Big Bike. Big Bike covenants with Biker's Dream
during the term of this Agreement as follows:
i. Big Bike shall use its reasonable efforts to preserve
the good will associated with Biker's Dream and will not at any time do or cause
to be done any act or thing contesting or in any way impairing any part of
Biker's Dream's right, title and interest in its business.
ii. Big Bike shall keep true and accurate records of all
cash receipts of merchandise in such forms as shall be adequate to permit
Biker's Dream to verify the accuracy of the fees required to be made hereunder.
All such records shall be made available to Biker's Dream at reasonable times
during regular business hours for inspection to verify the computation of the
payments; provided, however, that any such inspection shall be at the sole cost
and expense of Biker's Dream.
iii. Big Bike shall use its best efforts to sell the
motorcycles consigned to it by Biker's Dream.
9. Miscellaneous.
a. No Assignment. The rights and obligations of the parties under
this Agreement shall not be assigned, transferred, sublicensed, encumbered or
otherwise alienated, either voluntarily or by operation of law, without the
prior written consent of the other party, which consent shall not be
unreasonably withheld.
b. Amendment. This Agreement shall not be waived, modified or
changed in any manner except by a writing signed by both parties.
c. Notice. Notices or other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to be sufficiently
given and received when personally delivered, when mailed by a nationally
recognized overnight courier service and requiring a signed receipt on delivery,
or when mailed in certified or registered form, postage prepaid, return receipt
requested, and addressed to the appropriate address set forth in the signature
pages of this Agreement, or to such other address after notification in writing
is given to the other party pursuant to the terms hereof.
d. Governing Law. This Agreement shall be governed by and
construed in accordance with internal laws of the State of Florida, and any
action to enforce or construe any
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of its terms shall be brought, at Big Bike's election, in a court of competent
jurisdiction located in Xxxxx County, Florida.
e. Operation of Store. Big Bike shall have and maintain exclusive
control in all facets of the operation of the retail store. Biker's Dream shall
have no control in the operation of the retail store. At all times, Big Bike
will display such advertising and literature as is provided and forwarded by
Biker's Dream. The retail store shall sell all lines of motorcycles, subject to
the approval of Biker's Dream, as required in the Biker's Dream Superstore
Agreement. Big Bike Motorcycle Rentals, Inc. may rent any brand of motorcycle.
f. The terms of the Ultra Cycle Dealer Agreement, and the Biker's
Dream, Inc. Dealer Agreement entered between Biker's Dream and Big Bike with
respect to the operation of the retail store in Daytona Beach, Florida are
incorporated herein by reference. The terms of this Agreement shall control in
the event of conflict.
g. Entire Agreement. This Agreement contains the complete
understanding and agreement of the parties hereto with respect to the subject
matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Effective Date.
BIKER'S DREAM, INC.
a California corporation
Dated: 10/16, 1998 By: /s/ X. Xxxxxxxx
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Print: X. Xxxxxxxx
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Its: CEO
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Address: 00000 Xxxxxxxx Xxxxxx
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Xxxxxxxxx, XX 00000
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BIG BIKE OF DAYTONA, INC.
a Florida corporation
Dated: 10/16, 1998 By: /s/ Xxxx Xxxxxx
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Print: Xxxx Xxxxxx
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Its: CFO
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Address: 0000 Xxxxxxx Xxxxxx
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Xxxxxxxxxxxx, Xxx 00000
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