EXHIBIT 10.11
LEASE AGREEMENT
THIS LEASE (the "Lease") is executed this 23rd day of April, 2003, by and
between DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership
("Landlord'), and VIPER MOTORCYCLE COMPANY, a Minnesota corporation ("Tenant").
WITNESSETH:
ARTICLE 1 - LEASE OF PREMISES
-----------------------------
SECTION 1.01. BASIC LEASE PROVISIONS AND DEFINITIONS.
A. Leased Premises (shown outlined on EXHIBIT A attached hereto): Bass Lake
Business Park; 0000 Xxxxxxxxxxxxx Xxxxxxx, Xxx Xxxx, Xxxxxxxxx 00000 (the
"Building");
B. Rentable Area: approximately 13,365 square feet;
Landlord shall use commercially reasonable standards, consistently
applied, in determining the Rentable Area and the rentable area of the
Building. Landlord's determination of Rentable Area shall conclusively be
deemed correct for all purposes hereunder.
C. Tenant's Proportionate Share: 28.22%;
D. Minimum Annual Rent:
Years 1 - 3 $73,272.00 per year;
E. Monthly Rental Installments:
Months 1 - 36 $ 6,106.00 per month;
F. Landlord's Share of Expenses: N/A;
G. Lease Term: Three (3) years;
H. Target Commencement Date: June 1, 2003;
I. Security Deposit: $18,538.10;
J. Guarantor: NONE;
K. Brokers: Duke Realty Limited Partnership representing Landlord and Xxxxxx
Consulting, LLC representing Tenant;
L. Permitted Use: Warehousing, storage and manufacturing of motorcycles and
related purposes;
M. Addresses for notices:
Landlord: Duke Realty Limited Partnership
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Tenant: Viper Motorcycle Company
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxx Xxxx, XX 00000
Address for rental and other payments:
Duke Realty Limited Partnership
00 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
SECTION 1.02. LEASED PREMISES. Landlord hereby leases to Tenant and
Tenant leases from Landlord, under the terms and conditions herein, the Leased
Premises.
ARTICLE 2 - TERM AND POSSESSION
-------------------------------
SECTION 2.01. TERM. The term of this Lease ("Lease Term") shall be for
the period of time as set forth in Section 1.01(G) hereof, and shall commence on
the date (the "Commencement Date") that is the later to occur of (i) the Target
Commencement Date and (ii) Substantial Completion (as hereinafter defined) of
the Tenant Improvements (as hereinafter defined).
SECTION 2.02. CONSTRUCTION OF TENANT IMPROVEMENTS.
(a) Tenant has personally inspected the Leased Premises and accepts
the same "AS IS" without representation or warranty by Landlord of any kind and
with the understanding that Landlord shall have no responsibility with respect
thereto except to construct in a good and workmanlike manner the improvements
described in the scope of work attached hereto as EXHIBIT B and made a part
hereof (the "Tenant Improvements").
(b) Landlord shall provide Tenant with a proposed schedule for the
construction and installation of the Tenant Improvements and shall notify Tenant
of any material changes to said schedule. Tenant agrees to coordinate with
Landlord regarding the installation of Tenant's phone and data wiring and any
other trade related fixtures that will need to be installed in the Leased
Premises prior to Substantial Completion. In addition, if and to the extent
permitted by applicable laws, rules and ordinances, Tenant: shall have the right
to enter the Leased Premises prior to the scheduled date for Substantial
Completion (as may be modified from time to time) in order to install fixtures
(such as racking) and otherwise prepare the Leased Premises for occupancy (which
right shall expressly exclude making any structural modifications). During any
entry prior to the Commencement Date (i) Tenant shall comply with all terms and
conditions of this Lease other than the obligation to pay rent, (ii) Tenant
shall not interfere with Landlord's completion of the Tenant Improvements, (iii)
Tenant shall cause its personnel and contractors to comply with the terms and
conditions of Landlord's rules of conduct (which Landlord agrees to
2
furnish to Tenant upon request), and (iv) Tenant shall not begin operation of
its business. Tenant acknowledges that Tenant shall be responsible for obtaining
all applicable permits and inspections relating to any such entry by Tenant.
(c) For purposes of this Lease (i) "Substantial Completion" (or any
grammatical variation thereof) shall mean completion of construction of the
Tenant Improvements, subject only to punchlist items to be identified by
Landlord and Tenant in a joint inspection of the Leased Premises prior to
Tenant's occupancy, the completion of which will not materially affect Tenant's
use and occupancy of, or ability to obtain an occupancy permit for the Leased
Premises (Tenant acknowledging, however, that even if Landlord has Substantially
Completed the Tenant Improvements, Landlord may not be able to obtain an
occupancy permit for the Leased Premises because of the need for completion of
all or a portion of improvements being installed in the Leased Premises directly
by Tenant), and (ii) "Tenant Delay" shall mean any delay in the completion of
the Tenant Improvements attributable to. Tenant, including, without limitation,
(A) Tenant's failure to meet any time deadlines specified herein, (B) Change
Orders, (C) Tenant's requirements for special work or materials, finishes or
installations other than Building standard, (D) the performance of any other
work in the Leased Premises by any person, firm or corporation employed by or on
behalf of Tenant, or any failure to complete or delay in completion of such
work, and (E) any other act or omission of Tenant.
(d) Notwithstanding anything to the contrary contained in Section 2.01
above, if Substantial Completion of the Tenant Improvements is delayed beyond
the Target Commencement Date as a result of Tenant Delay, then, for purposes of
determining the Commencement Date, Substantial Completion of the Tenant
Improvements shall be deemed to have occurred on the date that Substantial
Completion of the Tenant Improvements would have occurred but for such Tenant
Delay. Without limiting the foregoing, Landlord shall use commercially
reasonable speed and diligence to Substantially Complete the Tenant Improvements
on or before the Target Commencement Date. Promptly following the Commencement
Date, Tenant shall execute Landlord's Letter of Understanding in substantially
the form attached hereto as EXHIBIT C and made a part hereof, acknowledging (x)
the Commencement Date of this Lease, and (y) except for any punchlist items,
that Tenant has accepted the Leased Premises. If Tenant takes possession of and
occupies the Leased Premises, Tenant shall be deemed to have accepted the Leased
Premises and that the condition of the Leased Premises and the Building was at
the time satisfactory and in conformity with the provisions of this Lease in all
respects, subject to any punchlist items.
SECTION 2.03. SURRENDER OF THE PREMISES. Upon the expiration or
earlier termination of this Lease, Tenant shall immediately surrender the Leased
Premises to Landlord in broom-clean condition and in good condition and repair,
including, but not limited to, the cleaning of all tire marks on warehouse
floors. Tenant shall also remove its personal property, trade fixtures and any
of Tenant's alterations designated by Landlord, promptly repair any damage
caused by such removal, and restore the Leased Premises to the condition
existing upon the Commencement Date, reasonable wear and tear excepted. If
Tenant fails to do so, Landlord may restore the Leased Premises to such
condition at Tenant's expense, Landlord may cause all of said property to be
removed at Tenant's expense, and Tenant hereby agrees to pay all the costs and
expenses thereby reasonably incurred. All Tenant property which is not removed
within ten (10) days following Landlord's written demand therefor shall be
conclusively deemed to have been
3
abandoned by Tenant, and Landlord shall be entitled to dispose of such property
at Tenant's cost without thereby incurring any liability to Tenant. The
provisions of this section shall survive the expiration or other termination of
this Lease.
SECTION 2.04. HOLDING OVER. If Tenant retains possession of the Leased
Premises after the expiration or earlier termination of this Lease, Tenant shall
become a tenant from month to month at twice of the Monthly Rental Installment
in effect at the end of the Lease Term, and otherwise upon the terms, covenants
end conditions herein specified, so far as applicable. Acceptance by Landlord of
rent in such event shall not result in a renewal of this Lease, and Tenant shall
vacate and surrender the Leased Premises to Landlord upon Tenant being given
thirty (30) days' prior written notice from Landlord to vacate whether or not
said notice is given on the rent paying date. This Section 2.04 shall in no way
constitute a consent by Landlord to any holding over by Tenant upon the
expiration or earlier termination of this Lease, nor limit Landlord's remedies
in such event.
ARTICLE 3 - RENT
----------------
SECTION 3.01. BASE RENT. Tenant shall pay to Landlord the Minimum
Annual Rent in the Monthly Rental Installments, in advance, without deduction or
offset, beginning on the Commencement Date and on or before the first day of
each and every calendar month thereafter during the Lease Term. The Monthly
Rental Installment for partial calendar months shall be prorated.
SECTION 3.02. ADDITIONAL RENT. In addition to the Minimum Annual Rent,
Tenant shall pay to Landlord for each calendar year during the Lease Term, as
"Additional Rent," Tenant's Proportionate Share of all costs and expenses
incurred by Landlord during the Lease Term for Real Estate Taxes and Operating
Expenses for the Building and common areas (collectively "Common Area Charges").
"Operating Expenses" shall mean all of Landlord's expenses for operation,
repair, replacement and maintenance to keep the Building and common areas in
good order, condition and repair (including all additional direct costs and
expenses of operation and maintenance of the Building which Landlord reasonably
determines it would have paid or incurred during such year if the Building had
been fully occupied), including, but not limited to, service and other charges
incurred in the operation and maintenance of the electrical systems, heating,
ventilation and air conditioning systems and sprinkler and plumbing systems;
management fees and administrative fees; utilities; stormwater discharge fees;
license, permit, inspection and other fees; fees and assessments imposed by any
covenants or owners' association; security services; insurance premiums and
deductibles; and maintenance, repair and replacement of the driveways, parking
areas (including snow removal), exterior lighting, landscaped areas, walkways,
curbs, drainage strips, sewer lines, exterior walls, foundation, structural
frame, roof and gutters. The cost of any capital improvement shall be amortized
over the useful life of such improvement (as reasonably determined by Landlord),
and only the amortized portion shall be included in Operating Expenses.
"Real Estate Taxes" shall include any form of real estate tax or
assessment or service payments in lieu thereof, and any license fee, commercial
rental tax, improvement bond or other
4
similar charge or tax (other than inheritance, personal income or estate taxes)
imposed upon the Building or common areas (or against Landlord's business of
leasing the Building) by any authority having the power to so charge or tax,
together with costs and expenses of contesting the validity or amount of Real
Estate Taxes which at Landlord's option may be calculated as if such contesting
work had been performed on a contingent fee basis (whether charged by Landlord's
counsel or representative; provided, however, that said fees are reasonably
comparable to the fees charged for similar services by others not affiliated
with Landlord, but in no event shall fees exceed thirty-three percent (33%) of
the good faith estimated tax savings). Additionally, Tenant shall pay, prior to
delinquency, all taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all personal property of Tenant contained in the
Leased Premises.
SECTION 3.03. PAYMENT OF ADDITIONAL RENT. Landlord shall estimate the
total amount of Additional Rent to be paid by Tenant during each calendar year
of the Lease Term, pro-rated for any partial years. Commencing on the
Commencement Date, Tenant shall pay to Landlord each month, at the same time the
Monthly Rental Installment is due, an amount equal to one-twelfth (1/12) of the
estimated Additional Rent for such year. Within a reasonable time after the end
of each calendar year, Landlord shall submit to Tenant a statement of the actual
amount of such Additional Rent and within thirty (30) days after receipt of such
statement, Tenant shall pay any deficiency between the actual amount owed and
the estimates paid during such calendar year. In the event of overpayment,
Landlord shall credit the amount of such overpayment toward the next
installments of Minimum Rent.
SECTION 3.04. LATE CHARGES. Tenant acknowledges that Landlord shall
incur certain additional unanticipated administrative and legal costs and
expenses if Tenant fails to timely pay any payment required hereunder.
Therefore, in addition to the other remedies available to Landlord hereunder, if
any payment required to be paid by Tenant to Landlord hereunder shall become
overdue, such unpaid amount shall bear interest from the due date thereof to the
date of payment at the prime rate (as reported in the WALL STREET JOURNAL) of
interest ("Prime Rate") plus six percent (6%) per annum.
ARTICLE 4 - SECURITY DEPOSIT
----------------------------
Tenant, upon execution of this Lease, shall deposit with Landlord the
Security Deposit as security for the performance by Tenant of all of Tenant's
obligations contained in this Lease. In the event of a default by Tenant
Landlord may apply all or any part of the Security Deposit to cure all or any
part of such default; and Tenant agrees to promptly, upon demand, deposit such
additional sum with Landlord as may be required to maintain the full amount of
the Security Deposit. All sums held by Landlord pursuant to this section shall
be without interest. At the end of the Lease Term, provided that there is then
no uncured default, Landlord shall return the Security Deposit to Tenant.
ARTICLE 5 - USE
---------------
SECTION 5.01. USE OF LEASED PREMISES. The Leased Premises are to be
used by Tenant solely for the Permitted Use and for no other purposes without
the prior written consent of Landlord.
5
SECTION 5.02. COVENANTS OF TENANT REGARDING USE. Tenant shall (1) use
and maintain the Leased Premises and conduct its business thereon in a safe,
careful, reputable and lawful manner, (ii) comply with all laws, rules,
regulations, orders, ordinances, directions and requirements of any governmental
authority or agency, now in force or which may hereafter be in force, including
without limitation those which shall impose upon Landlord or Tenant any duty
with respect to or triggered by a change in the use or occupation of, or any
improvement or alteration to, the Leased Premises, and (iii) comply with and
obey all reasonable directions of the Landlord, including any rules and
regulations that may be adopted by Landlord from time to time. Tenant shall not
do or permit anything to be done in or about the Leased Premises or common areas
which constitutes a nuisance or which interferes with the rights of other
tenants or injures or annoys them. Landlord shall not be responsible to Tenant
for the nonperformance by any other tenant or occupant of the Building of its
lease or of any rules and regulations. Tenant shall not overload the floors of
the Leased Premises. All damage to the floor, structure or foundation of the
Building due to improper positioning or storage of items or materials shall be
repaired by Landlord at the sole expense of Tenant, who shall reimburse Landlord
immediately therefor upon demand. Tenant shall not use the Leased Premises, or
allow the Leased Premises to be used, for any purpose or in any manner which
would invalidate any policy of insurance now or hereafter carried on the
Building or increase the rate of premiums payable on any such insurance policy
unless Tenant reimburses Landlord as Additional Rent for any increase in
premiums charged.
SECTION 5.03. LANDLORD'S RIGHTS REGARDING USE. In addition to the
rights specified elsewhere in this Lease, Landlord shall have the following
rights regarding the use of the Leased Premises or the common areas, each of
which may be exercised without notice or liability to Tenant (a) Landlord may
install such signs, advertisements, notices or tenant identification information
as it shall deem necessary or proper; (b) Landlord shall have the right at any
time to control, change or otherwise alter the common areas as it shall deem
necessary or proper; and (c) Landlord or Landlord's agent shall be permitted to
inspect or examine the Leased Premises at any reasonable time upon reasonable
notice (except in an emergency when no notice shall be required), and Landlord
shall have the right to make any repairs to the Leased Premises which are
necessary for its preservation; provided, however, that any repairs made by
Landlord shall be at Tenant's expense, except as provided in Section 7.01
hereof. Landlord shall incur no liability to Tenant for such entry, nor shall
such entry constitute an eviction of Tenant or a termination of this Lease, or
entitle Tenant to any abatement of rent therefor.
ARTICLE 6 - UTILITIES AND SERVICES
----------------------------------
Tenant shall obtain in its own name and pay directly to the appropriate
supplier the cost of all utilities and services serving the Leased Premises.
However, if any services or utilities are jointly metered with other property,
Landlord shall make a reasonable determination of Tenant's proportionate share
of the cost of such utilities and services (at rates that would have been
payable if such utilities and services had been directly billed by the utilities
or services provided to Tenant) and Tenant shall pay such share to Landlord
within fifteen (15) days after receipt of Landlord's written statement. Landlord
shall not be liable in damages or otherwise for any failure or interruption of
any utility or other building service and no such failure or interruption shall
entitle Tenant to terminate this Lease or withhold sums due hereunder. In the
event of utility "deregulation", Landlord may choose the service provider.
6
ARTICLE 7 - MAINTENANCE AND REPAIRS
-----------------------------------
SECTION 7.01. LANDLORD'S RESPONSIBILITY. During the term of this
Lease, Landlord shall maintain in good condition and repair, and replace as
necessary, the electrical systems, heating and air conditioning systems,
sprinkler and plumbing systems, roof, exterior walls, foundation and structural
frame of the Building and the parking and landscaped areas, the costs of which
shall be included in Operating Expenses; provided, however, that to the extent
any of the foregoing items require repair because of the negligence, misuse, or
default of Tenant, its employees, agents, customers or invitees, Landlord shall
make such repairs solely at Tenant's expense.
SECTION 7.02. ALTERATIONS. Tenant shall not permit alterations in or
to the Leased Premises unless and until the plans have been approved by Landlord
in writing. As a condition of such approval, Landlord may require Tenant to
remove the alterations and restore the Leased Premises upon termination of this
Lease; otherwise, all such alterations shall at Landlord's option become a part
of the realty and the property of Landlord, and shall not be removed by Tenant.
Tenant shall ensure that all alterations shall be made in accordance with all
applicable laws, regulations and building codes, in a good and workmanlike
manner and of quality equal to or better than the original construction of the
Building. No person shall be entitled to any lien derived through or under
Tenant for any labor or material furnished to the Leased Premises, and nothing
in this Lease shall be construed to constitute a consent by Landlord to the
creation of any lien. If any lien is filed against the Leased Premises for work
claimed to have been done for or material claimed to have been furnished to,
through or under Tenant, Tenant shall cause such lien to be discharged of record
within thirty (30) days after filing. Tenant shall indemnify Landlord from all
costs, losses, expenses and attorneys' fees in connection with any construction
or alteration and any related lien.
ARTICLE 8 - CASUALTY
--------------------
SECTION 8.01. CASUALTY. In the event of total or partial destruction
of the Building or the Leased Premises by fire or other casualty, Landlord
agrees to promptly restore and repair same; provided, however, Landlord's
obligation hereunder shall be limited to the reconstruction of such of the
tenant finish improvements as were originally required to be made by Landlord,
if any. Rent shall proportionately xxxxx during the time that the Leased
Premises or part thereof are unusable because of any such damage.
Notwithstanding the foregoing, if the Leased Premises are (i) so destroyed that
they cannot be repaired or rebuilt within one hundred eighty (180) days from the
casualty date; or (ii) destroyed by a casualty which is not covered by the
insurance required hereunder or, if covered, such insurance proceeds are not
released by any mortgagee entitled thereto or are insufficient to rebuild the
Building and the Leased Premises; then, in case of a clause (i) casualty, either
Landlord or Tenant may, or, in the case of a clause (ii) casualty, then Landlord
may, upon thirty (30) days' written notice to the other party, terminate this
Lease with respect to matters thereafter accruing.
SECTION 8.02. RISK COVERAGE INSURANCE. During the Lease Term, Landlord
shall maintain all risk coverage insurance on the Building, but shall not
protect Tenant's property on the Leased Premises; and, notwithstanding the
provisions of Section 9.01, Landlord shall not be liable for any casualty damage
to Tenant's property, regardless of cause, including the negligence
7
of Landlord and its employees, agents and invitees. Tenant hereby expressly
waives any right of recovery against Landlord for casualty damage to any
property of Tenant located in or about the Leased Premises, however caused,
including the negligence of Landlord and its employees, agents and invitees.
Notwithstanding the provisions of Section 9.01 below, Landlord hereby expressly
waives any rights of recovery against Tenant for casualty damage to the Leased
Premises or the Building which is insured against under Landlord's all risk
coverage insurance. All insurance policies maintained by Landlord or Tenant as
provided in this Lease shall contain an agreement by the insurer waiving the
insurer's right of subrogation against the other party to this Lease.
ARTICLE 9 - LIABILITY INSURANCE
-------------------------------
SECTION 9.01. TENANT'S RESPONSIBILITY. Landlord shall not be liable to
Tenant or to any other person for (i) damage to property or injury or death to
persons due to the condition of the Leased Premises, the Building or the common
areas, or (ii) the occurrence of any accident in or about the Leased Premises or
the common areas, or (iii) any act or neglect of Tenant or any other tenant or
occupant of the Building or of any other person, unless such damage, injury or
death is directly and solely the result of Landlord's negligence; and Tenant
hereby releases Landlord from any and all liability for the same. Tenant shall
be liable for, and shall indemnify and defend Landlord from, any and all
liability for (i) any act or neglect of Tenant and any person coming on the
Leased Premises or common areas by the license of Tenant, express or implied,
(ii) any damage to the Leased Premises, and (iii) any loss of or damage or
injury to any person (including death resulting therefrom) or property occurring
in, on or about the Leased Premises, regardless of cause, except for any loss or
damage covered by Landlord's all risk coverage insurance as provided in Section
8.02 and except for that caused solely and directly by Landlord's negligence.
This provision shall survive the expiration or earlier termination of this
Lease.
SECTION 9.02. TENANT'S INSURANCE. Tenant shall carry general public
liability and property damage insurance, issued by one or more insurance
companies acceptable to Landlord, with the following minimum coverages:
(a) Worker's Compensation: minimum statutory amount.
(b) Commercial General Liability Insurance, including blanket,
contractual liability, broad form property damage, personal injury, completed
operations, products liability, and fire damage: Not less than $3,000,000
Combined Single Limit for both bodily injury and property damage.
(c) All Risk Coverage, Vandalism and Malicious Mischief, and Sprinkler
Leakage insurance, if applicable, for the full cost of replacement of Tenant's
property.
(d) Business interruption insurance.
The insurance policies shall protect Tenant and Landlord as their interests may
appear, naming Landlord and Landlord's managing agent and mortgagee as
additional insureds, and shall provide that they may not be canceled on less
than thirty (30) days' prior written notice to Landlord. Tenant shall furnish
Landlord with Certificates of Insurance evidencing all required coverages on or
before the Commencement Date. If Tenant fails to carry such insurance and
8
furnish Landlord with such Certificates of Insurance after a request to do so,
Landlord may obtain such insurance and collect the cost thereof from Tenant.
ARTICLE 10 - EMINENT DOMAIN
---------------------------
If all or any substantial part of the Building or common areas shall be
acquired by the exercise of eminent domain, Landlord may terminate this Lease by
giving written notice to Tenant on or before the date that actual possession
thereof is so taken. If all or any part of the Leased Premises shall be acquired
by the exercise of eminent domain so that the Leased Premises shall become
unusable by Tenant for the Permitted Use, Tenant may terminate this Lease as of
the date that actual possession thereof is so taken by giving written notice to
Landlord. All damages awarded shall belong to Landlord; provided, however, that
Tenant may claim dislocation damages if such amount is not subtracted from
Landlord's award.
ARTICLE 11 - ASSIGNMENT AND SUBLEASE
------------------------------------
Tenant shall not assign this Lease or sublet the Leased Premises in whole
or in part without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or denied (provided that it shall not be
unreasonable for Landlord to withhold or deny its consent with respect to any
proposed assignment or subletting to a third party that is already a tenant in
the Building or in another building owned by Landlord in the vicinity). In the
event of any assignment or subletting, Tenant shall remain primarily liable
hereunder, and any extension, expansion, rights of first offer, rights of first
refusal or other options granted to Tenant under this Lease shall be rendered
void and of no further force or effect. The acceptance of rent from any other
person shall not be deemed to be a waiver of any of the provisions of this Lease
or to be a consent to the assignment of this Lease or the subletting of the
Leased Premises. Without in any way limiting Landlord's right to refuse to
consent to any assignment or subletting of this Lease. Landlord reserves the
right to refuse to give such consent if in Landlord's opinion (i) the Leased
Premises are or may be in any way adversely affected; (ii) the business
reputation of the proposed assignee or subtenant is unacceptable; or (iii) the
financial worth of the proposed assignee or subtenant is insufficient to meet
the obligations hereunder. Landlord further expressly reserves the right to
refuse to give its consent to any subletting if the proposed rent is to be less
than the then current rent for similar premises in the Building. Tenant agrees
to reimburse Landlord for reasonable accounting and attorneys' fees incurred in
conjunction with the processing and documentation of any such requested
assignment, subletting or any other hypothecation of this Lease or Tenant's
interest in and to the Leased Premises.
ARTICLE 12 - TRANSFERS BY LANDLORD
----------------------------------
SECTION 12.01. SALE OF THE BUILDING. Landlord shall have the right to
sell the Building at any time during the Lease Term, subject only to the rights
of Tenant hereunder; and such sale shall operate to release Landlord from
liability hereunder after the date of such conveyance.
SECTION 12.02. SUBORDINATION AND ESTOPPEL CERTIFICATE. Landlord shall
have the right to subordinate this Lease to any mortgage presently existing or
hereafter placed upon the Building by so declaring in such mortgage. Within ten
(10) days following receipt of a written request from Landlord, Tenant shall
execute and deliver to Landlord, without cost, any instrument which
9
Landlord deems necessary or desirable to confirm the subordination of this Lease
and an estoppel certificate in such form as Landlord may reasonably request
certifying (i) that this Lease is in full force and effect and unmodified or
stating the nature of any modification, (ii) the date to which rent has been
paid, (iii) that there are not, to Tenant's knowledge, any uncured defaults or
specifying such defaults if any are claimed, and (iv) any other matters or state
of facts reasonably required respecting the Lease. Such estoppel may be relied
upon by Landlord and by any purchaser or mortgagee of the Building.
Notwithstanding the foregoing, if the mortgagee shall take title to the Leased
Premises through foreclosure or deed in lieu of foreclosure, Tenant shall be
allowed to continue in possession of the Leased Premises as provided for in this
Lease so long as Tenant shall not be in Default.
ARTICLE 13 - DEFAULT AND REMEDY
-------------------------------
SECTION 13.01. DEFAULT. The occurrence of any of the following shall
be a "Default":
(a) Tenant fails to pay any Monthly Rental Installment or Additional
Rent within five (5) days after the same is due, or Tenant fails to pay any
other amounts due Landlord from Tenant within ten (10) days after the same is
due.
(b) Tenant fails to perform or observe any other term, condition,
covenant or obligation required under this Lease for a period of thirty (30)
days after notice thereof from Landlord; provided, however, that if the nature
of Tenant's default is such that more than thirty days are reasonably required
to cure, then such default shall be deemed to have been cured if Tenant
commences such performance within said thirty-day period and thereafter
diligently completes the required action within a reasonable time.
(c) Tenant shall assign or sublet all or a portion of the Leased
Premises in contravention of the provisions of Article 11 of this Lease.
(d) All or substantially all of Tenant's assets in the Leased Premises
or Tenant's interest in this Lease are attached or levied under execution (and
Tenant does not discharge the same within sixty (60) days thereafter); a
petition in bankruptcy, insolvency or for reorganization or arrangement is filed
by or against Tenant (and Tenant fails to secure a stay or discharge thereof
within sixty (60) days thereafter); Tenant is insolvent and unable to pay its
debts as they become due; Tenant makes a general assignment for the benefit of
creditors; Tenant takes the benefit of any insolvency action or law; the
appointment of a receiver or trustee in bankruptcy for Tenant or its assets if
such receivership has not been vacated or set aside within thirty (30) days
thereafter; or, dissolution or other termination of Tenant's corporate charter
if Tenant is a corporation.
SECTION 13.02. REMEDIES. Upon the occurrence of any Default, Landlord
shall have the following rights and remedies, in addition to those allowed by
law or in equity, any one or more of which may be exercised without further
notice to Tenant:
(a) Landlord may apply the Security Deposit or re-enter the Leased
Premises and cure any default of Tenant, and Tenant shall reimburse Landlord as
additional rent for any costs and expenses which Landlord thereby incurs; and
Landlord shall not be liable to Tenant for any loss or damage which Tenant may
sustain by reason of Landlord's action.
10
(b) Landlord may terminate this Lease or, without terminating this
Lease, terminate Tenant's right to possession of the Leased Premises as of the
date of such Default, and thereafter (i) neither Tenant nor any person claiming
under or through Tenant shall be entitled to possession of the Leased Premises,
and Tenant shall immediately surrender the Leased Premises to Landlord; and (ii)
Landlord may re-enter the Leased Premises and dispossess Tenant and any other
occupants of the Leased Premises by any lawful means and may remove their
effects, without prejudice to any other remedy which Landlord may have. Upon the
termination of this Lease, Landlord may declare the present value (discounted at
the Prime Rate) of all rent which would have been due under this Lease for the
balance of the Lease Term to be immediately due and payable, whereupon Tenant
shall be obligated to pay the same to Landlord. together with all loss or damage
which Landlord may sustain by reason of Tenant's default ("Default Damages"),
which shall include without limitation expenses of preparing the Leased Premises
for reletting, demolition, repairs, tenant finish improvements, brokers'
commissions and attorneys' fees, it being expressly understood and agreed that
the liabilities and remedies specified in this subsection (b) shall survive the
termination of this Lease.
(c) Landlord may, without terminating this Lease, re-enter the Leased
Premises and re-let all or any part thereof for a term different from that which
would otherwise have constituted the balance of the Lease Term and for rent and
on terms and conditions different from those contained herein, whereupon Tenant
shall be immediately obligated to pay to Landlord as liquidated damages the
present value (discounted at the Prime Rate) of the difference between the rent
provided for herein and that provided for in any lease covering a subsequent
re-letting of the Leased Premises, for the period which would otherwise have
constituted the balance of the Lease Term, together with all of Landlord's
Default Damages.
(d) Landlord may xxx for injunctive relief or to recover damages for
any loss resulting from the Default.
SECTION 13.03. LANDLORD'S DEFAULT AND TENANT'S REMEDIES. Landlord
shall be in default if it fails to perform any term, condition, covenant or
obligation required under this Lease for a period of thirty (30) days after
written notice thereof from Tenant to Landlord; provided, however, that if the
term, condition, covenant or obligation to be performed by Landlord is such that
it cannot reasonably be performed within thirty days, such default shall be
deemed to have been cured if Landlord commences such performance within said
thirty-day period and thereafter diligently undertakes to complete the same.
Upon the occurrence of any such default, Tenant may xxx for injunctive relief or
to recover damages for any loss directly resulting from the breach, but Tenant
shall not be entitled to terminate this Lease or withhold, offset r xxxxx any
sums due hereunder.
SECTION 13.04. LIMITATION OF LANDLORD'S LIABILITY. If Landlord shall
fail to perform any term, condition, covenant or obligation required to be
performed by it under this Lease and if Tenant shall, as a consequence thereof,
recover a money judgment against Landlord, Tenant agrees that it shall look
solely to Landlord's right, title and interest in and to the Building for the
collection of such judgment; and Tenant further agrees that no other assets of
Landlord shall be subject to levy, execution or other process for the
satisfaction of Tenant's judgment.
11
SECTION 13.05. NONWAIVER OF DEFAULTS. Neither party's failure or
delay in exercising any of its rights or remedies or other provisions of this
Lease shall constitute a waiver thereof or affect its right thereafter to
exercise or enforce such right or remedy or other provision. No waiver of any
default shall be deemed to be a waiver of any other default. Landlord's receipt
of less than the full rent due shall not be construed to be other than a payment
on account of rent then due, nor shall any statement on Tenant's check or any
letter accompanying Tenant's check be deemed an accord and satisfaction. No act
or omission by Landlord or its employees or agents during the Lease Term shall
be deemed an acceptance of a surrender of the Leased Premises, and no agreement
to accept such a surrender shall be valid unless in writing and signed by
Landlord.
SECTION 13.06. ATTORNEYS' FEES. If either party defaults in the
performance or observance of any of the terms, conditions, covenants or
obligations contained in this Lease and the non-defaulting party obtains a
judgment against the defaulting party, then the defaulting party agrees to
reimburse the non-defaulting party for reasonable attorneys' fees incurred in
connection therewith.
ARTICLE 14 - LANDORD'S RIGHT TO RELOCATE TENANT
-----------------------------------------------
Landlord shall have the right upon at least thirty (30) days' prior
written notice to Tenant to relocate Tenant and to substitute for the Leased
Premises other space in the Building or in another building owned by Landlord in
the vicinity containing at least as much rentable area as the Leased Premises.
Such substituted space shall be improved by Landlord, at its expense, with
improvements at least equal in quantity and quality to those in the Leased
Premises. Landlord shall reimburse Tenant for all reasonable expenses incurred
in connection with such relocation. In no event shall Landlord be liable to
Tenant for any consequential damages as a result of any such relocation,
including, but not limited to, loss of business income or opportunity.
ARTICLE 15 - TENANT'S RESPONSIBILITY REGARDING
ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES
----------------------------------------------
SECTION 15.01. DEFINITIONS.
(a) "Environmental Laws" - All present or future federal, state and
municipal laws, ordinances, rules and regulations applicable to the
environmental and ecological condition of the Leased Premises, the rules and
regulations of the Federal Environmental Protection Agency or any other federal,
state or municipal agency or governmental board or entity having jurisdiction
over the Leased Premises.
(b) "Hazardous Substances" - Those substances included within the
definitions of "hazardous substances," "hazardous materials," "toxic substances"
"solid waste" or "infectious waste" under Environmental Laws.
SECTION 15.02. COMPLIANCE. Tenant, at its sole cost and expense, shall
promptly comply with the Environmental Laws including any notice from any source
issued pursuant to the Environmental Laws or issued by any insurance company
which shall impose any duty upon Tenant with respect to the use, occupancy,
maintenance or alteration of the Leased Premises whether such notice shall be
served upon Landlord or Tenant.
12
SECTION 15.03. RESTRICTIONS ON TENANT. Tenant shall operate its
business and maintain the Leased Premises in compliance with all Environmental
Laws. Tenant shall not cause or permit the use, generation, release,
manufacture, refining, production, processing, storage or disposal of any
Hazardous Substances on, under or about the Leased Premises, or the
transportation to or from the Leased Premises of any Hazardous Substances,
except as necessary and appropriate for its Permitted Use in which case the use,
storage or disposal of such Hazardous Substances shall be performed in
compliance with the Environmental Laws and the highest standards prevailing in
the industry.
SECTION 15.04. NOTICES. AFFIDAVITS. ETC. Tenant shall immediately
notify Landlord of (i) any violation by Tenant, its employees, agents,
representatives, customers, invitees or contractors of the Environmental Laws
on, under or about the Leased Premises, or (ii) the presence or suspected
presence of any Hazardous Substances on, under or about the Leased Premises and
shall immediately deliver to Landlord any notice received by Tenant relating to
(i) and (ii) above from any source. Tenant shall execute affidavits,
representations and the like within five (5) days of Landlord's request therefor
concerning Tenant's best knowledge and belief regarding the presence of any
Hazardous Substances on, under or about the Leased Premises.
SECTION 15.05. LANDLORD'S RIGHTS. Landlord and its agents shall have
the right, but not the duty, upon advance notice (except in the case of
emergency when no notice shall be required) to inspect the Leased Premises and
conduct tests thereon to determine whether or the extent to which there has been
a violation of Environmental Laws by Tenant or whether there are Hazardous
Substances on, under or about the Leased Premises. In exercising its rights
herein, Landlord shall use reasonable efforts to minimize interference with
Tenant's business but such entry shall not constitute an eviction of Tenant, in
whole or in part, and Landlord shall not be liable for any interference, loss,
or damage to Tenant's property or business caused thereby.
SECTION 15.06. TENANT'S INDEMNIFICATION. Tenant shall indemnify
Landlord and Landlord's managing agent from any and all claims, losses,
liabilities, costs, expenses and damages, including attorneys' fees, costs of
testing and remediation costs, incurred by Landlord in connection with any
breach by Tenant of its obligations under this Article 15. The covenants and
obligations under this Article 15 shall survive the expiration or earlier
termination of this Lease.
SECTION 15.07. LANDLORD'S REPRESENTATION. Notwithstanding anything
contained in this Article 15 to the contrary, Tenant shall not have any
liability to Landlord under this Article 15 resulting from any conditions
existing, or events occurring, or any Hazardous Substances existing or
generated, at, in, on, under or in connection with the Leased Premises prior to
the Commencement Date of this Lease except to the extent Tenant exacerbates the
same.
ARTICLE 16 - MISCELLANEOUS
--------------------------
SECTION 16.01. BENEFIT OF LANDLORD AND TENANT. This Lease shall inure
to the benefit of and be binding upon Landlord and Tenant and their respective
successors and assigns.
SECTION 16.02. GOVERNING LAW. This Lease shall be governed in
accordance with the laws of the State where the Building is located.
13
SECTION 16.03. GUARANTY. In consideration of Landlord's leasing the
Leased Premises to Tenant, Tenant shall provide Landlord with a Guaranty of
Lease executed by the guarantor(s) described in the Basic Lease Provisions, if
any.
SECTION 16.04. FORCE MAJEURE. Landlord and Tenant (except with respect
to the payment of any monetary obligation) shall be excused for the period of
any delay in the performance of any obligation hereunder when such delay is
occasioned by causes beyond its control, including but not limited to work
stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment,
labor or energy; unusual weather conditions; or acts or omissions of
governmental or political bodies.
SECTION 16.05. EXAMINATION OF LEASE. Submission of this instrument for
examination or signature to Tenant does not constitute a reservation of or
option for Lease, and it is not effective as a Lease or otherwise until
execution by and delivery to both Landlord and Tenant.
SECTION 16.06. INDEMNIFICATION FOR LEASING COMMISSIONS. The parties
hereby represent and warrant that the only real estate brokers involved in the
negotiation and execution of this Lease are the Brokers. Each party shall
indemnify the other from any and all liability for the breach of this
representation and warranty on its part and shall pay any compensation to any
other broker or person who may be entitled thereto.
SECTION 16.07. NOTICES. Any notice required or permitted to be given
under this Lease or by law shall be deemed to have been given if it is written
and delivered in person or by overnight courier or mailed by certified mail,
postage prepaid, to the party who is to receive such notice at the address
specified in Article 1. If delivered in person, notice shall be deemed given as
of the delivery date. If sent by overnight courier, notice shall be deemed given
as of the first business day after sending. If mailed, the notice shall be
deemed to have been given on the date which is three business days after
mailing. Either party may change its address by giving written notice thereof to
the other party.
SECTION 16.08. PARTIAL INVALIDITY; COMPLETE AGREEMENT. If any
provision of this Lease shall be held to be invalid, void or unenforceable, the
remaining provisions shall remain in full force and effect. This Lease
represents the entire agreement between Landlord and Tenant covering everything
agreed upon or understood in this transaction. There are no oral promises
conditions, representations, understandings, interpretations or terms of any
kind as conditions or inducements to the execution hereof or in effect between
the parties. No change or addition shall be made to this Lease except by a
written agreement executed by Landlord and Tenant.
SECTION 16.09. FINANCIAL STATEMENTS. During the Lease Term and any
extensions thereof, Tenant shall provide to Landlord on an annual basis, within
ninety (90) days following the end of Tenant's fiscal year, a copy of Tenant's
most recent financial statements (certified and audited if the Minimum Annual
Rent hereunder exceeds $100,000.00) prepared as of the end of Tenant's fiscal
year. Such financial statements shall be signed by Tenant who shall attest to
the truth and accuracy of the information set forth in such statements. All
financial statements provided by Tenant to Landlord hereunder shall be prepared
in conformity with generally accepted accounting principles, consistently
applied.
14
SECTION 16.10. REPRESENTATIONS AND WARRANTIES. The undersigned
represent and warrant that (i) such party is duly organized, validly existing
and in good standing (if applicable) in accordance with the laws of the state
under which it was organized; and (ii) the individual executing and delivering
this Lease has been properly authorized to do so, and such execution and
delivery shall bind such party.
SECTION 16.11. SIGNS. Tenant may, at its own expense, erect a sign
concerning the business of Tenant which shall be in keeping with the decor and
other signs on the Building. All signage (including the signage described in the
preceding sentence) in or about the Leased Premises shall be first approved by
Landlord and shall be in compliance with the applicable codes and any recorded
restrictions applicable to the Building. Tenant agrees to maintain any sign in
good state of repair, and upon expiration of the Lease Term, Tenant agrees to
promptly remove such signs and repair any resulting damage to the Leased
Premises or the Building.
SECTION 16.12. ONGOING OPTION TO TERMINATE. Provided Tenant (A) is not
in Default hereunder; and (B) enters into an agreement with Landlord or an
affiliate of Landlord to expand its business operations by teasing space
containing more rentable square feet than the Leased Premises in another
building which is (i) located within the greater Minneapolis/St. Xxxx, Minnesota
area; and (ii) owned by Landlord or an affiliate of Landlord, Tenant shall have
the option to terminate this Lease effective as of the commencement of rent
under the new lease. If such option is validly exercised, then upon such
termination, Tenant shall surrender the Leased Premises to Landlord in
accordance with the terms of this Lease and each party shall be released from
further liability hereunder; provided, however, that such termination shall not
affect any right or obligation arising prior to termination or which survives
termination of the Lease. Landlord hereby agrees to use commercially reasonable
efforts to accommodate Tenant's expansion needs by locating space in another
building located within the greater Minneapolis/ St. Xxxx, Minnesota area owned
by Landlord or an affiliate of Landlord, if available.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
LANDLORD:
DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
By: Duke Realty Corporation,
its general partner
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Xxxxx X. Xxxx
Senior Vice President and
General Manager
15
TENANT:
VIPER MOTORCYCLE COMPANY,
a Minnesota corporation
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Printed: Xxxx X. Xxxxxxxxxx
---------------------------------
Title: President
-----------------------------------
STATE OF MINNESOTA )
) SS:
COUNTY OF HENNEPIN )
Before me, a Notary Public in and for said County and State, personally
appeared Xxxx Xxxxxxxxxx, by me known and by me known to be President/CEO of
Viper Motorcycle Company, a Minnesota corporation, who acknowledged the
execution of the above and foregoing "Lease Agreement" for and on behalf of said
corporation.
WITNESS my hand and Notarial Seal this 22nd day of April, 2003.
/s/ Xxxxx X. Lifer
--------------------------------------
Notary Public
Xxxxx X. Lifer
--------------------------------------
(Printed Signature)
My Commission Expires: 1-31-05
My County of Residence: Hennepin
16