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EXHIBIT 10.37
[LOGO] AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD SUBLEASE
(Short-form to be used with post 1995 AIR leases)
1. PARTIES. This Sublease, dated, for reference purposes only, January
15, 1999, is made by and between PrimeLine Products Company, a California
corporation ("SUBLESSOR") and Biker's Dream International, a California
corporation ("SUBLESSEE").
2. PREMISES. Sublessor hereby subleases to Sublessee and Sublessee
hereby subleases from Sublessor for the term, at the rental, and upon all of the
conditions set forth herein, that certain real property, including all
improvements therein, and commonly known by the street address of ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ Loma located in the County of Riverside, State of California and
generally described as (describe briefly the nature of the property) an
approximate 56,200 square foot industrial building on approximately 4.79 acres.
Parcel No.: ▇▇▇-▇▇▇-▇▇▇ ("Premises").
3. TERM.
3.1 TERM. The term of this Sublease shall be for 19 months
commencing on March 1, 1999 and ending on September 25, 2000 unless sooner
terminated pursuant to any provision hereof.
3.2 DELAY IN COMMENCEMENT. Sublessor agrees to use its best
commercially reasonable efforts to deliver possession of the Premises by the
commencement date. If, despite said efforts, Sublessor is unable to deliver
possession as agreed, the rights and obligations of Sublessor and Sublessee
shall be as set forth in Paragraph 3.3 of the Master Lease (as modified by
Paragraph 7.3 of this Sublease).
4. RENT.
4.1 BASE RENT. Sublessee shall pay jointly to Sublessor and Master
Lessor as Base Rent for the Premises equal monthly payments of $19,670.00 in
advance, on the first day of each month of the term hereof. Sublessee shall pay
Sublessor upon the execution hereof $19,670.00 as Base Rent for March 1-31,
1999, which shall be a gross lease rate and not include any pass-through Base
Rent for any period during the term hereof which is for less than one month
shall be a pro rata portion of the monthly installment.
4.2 RENT DEFINED. All monetary obligations of Sublessee to
Sublessor under the terms of this Sublease (except for the Security Deposit) are
deemed to be rent ("RENT"). Rent shall be payable in lawful money of the United
States to Sublessor at the address stated herein or to such other persons or at
such other places as Sublessor may designate in writing.
5. SECURITY DEPOSIT. Sublessee shall deposit jointly with Sublessor and
Master Lessor upon execution hereof $20,000.00 as security for Sublessee's
faithful performance of Sublessee's obligations hereunder. The rights and
obligations of Sublessor and Sublessee as to said Security Deposit shall be as
set forth in Paragraph 5 of the Master Lease (as modified by Paragraph 7.3 of
this Sublease).
6. USE.
6.1 AGREED USE. The Premises shall be used and occupied only for
Manufacture, warehouse and distribution of specialized motorcycles, parts and
related uses, and for no other purpose.
6.2 COMPLIANCE. Sublessor warrants that the improvements on the
Premises comply with all applicable covenants or restrictions of record and
applicable building codes, regulations and ordinances ("APPLICABLE
REQUIREMENTS") in effect on the commencement date. Said warranty does not apply
to the use to which Sublessee will put the Premises or to any alterations or
utility installations made or to be made by Sublessee. NOTE: Sublessee is
responsible for determining whether or not the zoning is appropriate for its
intended use, and acknowledges that past uses of the Premises may no longer be
allowed. If the Premises do not comply with said warranty, or in the event that
the Applicable Requirements are hereafter changed, the rights and obligations of
Sublessor and Sublessee shall be as provided in Paragraph 2.3 of the Master
Lease (as modified by Paragraph 7.3 of this Sublease).
6.3 ACCEPTANCE OF PREMISES AND LESSEE. Sublessee acknowledges
that:
(a) it has been advised by Brokers to satisfy itself
with respect to the condition of the Premises (including but not limited to the
electrical, HVAC and fire sprinkler systems, security, environmental aspects,
and compliance with Applicable Requirements), and their suitability for
Sublessee's intended use,
(b) Sublessee has made such investigation as it deems
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to its occupancy of the Premises, and
(c) neither Sublessor, Sublessor's agents, nor any
Broker has made any oral or written representations or warranties with respect
to said matters other than as set forth in this Sublease.
In addition, Sublessor acknowledges that:
(a) Broker has made no representations, promises or
warranties concerning Sublessee's ability to honor the Sublease or suitability
to occupy the Premises, and
(b) it is Sublessor's sole responsibility to investigate
the financial capability and/or suitability of all proposed tenants.
7. MASTER LEASE
7.1 Sublessor is the lessee of the Premises by virtue of a
lease, hereinafter the "MASTER LEASE", a copy of which is attached hereto marked
Exhibit 1, wherein LDT Company, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇ as
Partners is the lessor, hereinafter the "MASTER LESSOR"
7.2 This Sublease is and shall be at all times subject and
subordinate to the Master Lease.
7.3 The terms, conditions and respective obligations of Sublessor
and Sublessee to each other under this Sublease shall be the terms and
conditions of the Master Lease except for those provisions of the Master Lease
which are directly contradicted by this Sublease in which event the terms of
this Sublease document shall control over the Master Lease. Therefore, for the
purposes of this Sublease, wherever in the Master Lease the word "Lessor" is
used it shall be deemed to mean the Sublessor herein and wherever in the Master
Lease the word "Lessee" is used it shall be deemed to mean the Sublessee herein.
7.4 During the term of this Sublease and for all periods subsequent
for obligations which have arisen prior to the termination of this Sublease,
Sublessee does hereby expressly assume and agree to perform and comply with, for
the benefit of Sublessor and Master Lessor, each and every obligation of
Sublessor under the Master Lease except for the following paragraphs which are
excluded therefrom:
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7.5 The obligations that Sublessee has assumed under paragraph 7.4
hereof are hereinafter referred to as the "SUBLESSEE'S ASSUMED OBLIGATIONS". The
obligations that Sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "SUBLESSOR'S REMAINING OBLIGATIONS".
7.6 Sublessee shall hold Sublessor free and harmless from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorneys' fees, arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the entire
term of this Sublease, subject, however, to any earlier termination of the
Master Lease without the fault of the Sublessor, and to comply with or perform
Sublessor's Remaining Obligations and to hold Sublessee free and harmless from
all liability, judgments, costs, damages, claims or demands arising out of
Sublessor's failure to comply with or perform Sublessor's Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is in
full force and effect and that no default exists on the part of any Party to the
Master Lease.
8. ASSIGNMENT OF SUBLEASE AND DEFAULT.
8.1 Sublessor hereby assigns and transfers to Master Lessor the
Sublessor's interest in this Sublease, subject however to the provisions of
Paragraph 8.2 hereof.
8.2 Master Lessor, by executing this document, agrees that until a
Default shall occur in the performance of Sublessor's Obligations under the
Master Lease, that Sublessor may receive, collect and enjoy the Rent accruing
under this Sublease. However, if Sublessor shall Default in the performance of
its obligations to Master Lessor then Master Lessor may, at its option, receive
and collect, directly from Sublessee, all Rent owing and to be owed under this
Sublease. Master Lessor shall not, by reason of this assignment of the Sublease
nor by reason of the collection of the Rent from the Sublessee, be deemed liable
to Sublessee for any failure of the Sublessor to perform and comply with
Sublessor's Remaining Obligations.
8.3 Sublessor hereby irrevocably authorizes and directs Sublessee
upon receipt of any written notice from the Master Lessor stating that a Default
exists in the performance of Sublessor's obligations under the Master Lease, to
pay to Master Lessor the Rent due and to become due under the Sublease.
Sublessor agrees that Sublessee shall have the right to rely upon any such
statement and request from Master Lessor, and that Sublessee shall pay such Rent
to Master Lessor without any obligation or right to inquire as to whether such
Default exists and notwithstanding any notice from or claim from Sublessor to
the contrary and Sublessor shall have no right or claim against Sublessee for
any such Rent so paid by Sublessee.
8.4 No changes or modifications shall be made to this Sublease
without the consent of Master Lessor.
9. CONSENT OF MASTER LESSOR.
9.1 In the event that the Master Lease requires that Sublessor
obtain the consent of Master Lessor to any subletting by Sublessor then, this
Sublease shall not be effective unless, within ten days of the date hereof,
Master Lessor signs this Sublease thereby giving its consent to this Subletting.
9.2 In the event that the obligations of the Sublessor under the
Master Lease have been guaranteed by third parties then neither this Sublease,
nor the Master Lessor's consent, shall be effective unless, within 10 days of
the date hereof, said guarantors sign this Sublease thereby giving their consent
to this Sublease.
9.3 In the event that Master Lessor does give such consent then:
(a) Such consent shall not release Sublessor of its obligations
or alter the primary liability of Sublessor to pay the Rent and perform and
comply with all of the obligations of Sublessor to be performed under the Master
Lease.
(b) The acceptance of Rent by Master Lessor from Sublessee or
anyone else liable under the Master Lease shall not be deemed a waiver by Master
Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a consent
to any subsequent subletting or assignment.
(d) In the event of any Default of Sublessor under the Master
Lease, Master Lessor may proceed directly against Sublessor, any guarantors or
anyone else liable under the Master Lease or this Sublease without first
exhausting Master Lessor's remedies against any other person or entity liable
thereon to Master Lessor.
(e) Master Lessor may consent to subsequent sublettings and
assignments of the Master Lease or this Sublease or any amendments or
modifications thereto without notifying Sublessor or any one else liable under
the Master Lease and without obtaining their consent and such action shall not
relieve such persons from liability.
(f) In the event that Sublessor shall Default in its obligations
under the Master Lease, then Master Lessor, at its option and without being
obligated to do so, may require Sublessee to attorn to Master Lessor in which
event Master Lessor shall undertake the obligations of Sublessor under this
Sublease from the time of the exercise of said option to termination of this
Sublease but Master Lessor shall not be liable for any prepaid Rent nor any
Security Deposit paid by Sublessee, nor shall Master Lessor be liable for any
other Defaults of the Sublessor under the Sublease.
9.4 The signatures of the Master Lessor and any Guarantors of
Sublessor at the end of this document shall constitute their consent to the
terms of this Sublease.
9.5 Master Lessor acknowledges that, to the best of Master Lessor's
knowledge, no Default presently exists under the Master Lease of obligations to
be performed by Sublessor and that the Master Lease is in full force and effect.
9.6 In the event that Sublessor Defaults under its obligations to
be performed under the Master Lease by Sublessor, Master Lessor agrees to
deliver to Sublessee a copy of any such notice of default. Sublessee shall have
the right to cure any Default of Sublessor described in any notice of default
within ten days after service of such notice of default on Sublessee. If such
Default is cured by Sublessee then Sublessee shall have the right of
reimbursement and offset from and against Sublessor.
10. BROKERS FEE.
10.1 Upon execution hereof by all parties, Sublessor shall pay to
▇▇▇ & Associates a licensed real estate broker, ("BROKER"), a fee as set forth
in a separate agreement between Sublessor and Broker, or in the event there is
no such separate agreement, the sum of $ per separate agreement for brokerage
services rendered by Broker to Sublessor in this transaction.
11. ATTORNEY'S FEES. If any party or the Broker named herein brings an
action to enforce the terms hereof or to declare rights hereunder, the
prevailing party in any such action, on trial and appeal, shall be entitled to
his reasonable attorney's fees to be paid by the losing party as fixed by the
Court.
12. ADDITIONAL PROVISIONS. [If there are no additional provisions, draw
a line from this point to the next printed word after the space left here. If
there are additional provisions place the same here.]
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ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
SUBLEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY
OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
WARNING: IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.
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Executed at: San Bernardino, California Primeline Products Company
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on: By /s/ ▇. ▇▇▇▇▇▇▇▇
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By
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"Sublessor" (Corporate Seal)
Executed at: Riverside, California Biker's Dream International
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on: By /s/ ▇. ▇▇▇▇▇▇▇▇
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Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇▇▇▇
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"Sublessee" (Corporate Seal)
Executed at: Ontario, California LTD Company, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
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and ▇▇▇ ▇▇▇▇▇▇, as partners
on: 2/23/99 By /s/ ▇▇▇ ▇▇▇▇▇▇
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Address: ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ By
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"Master Lessor" (Corporate Seal)
NOTE: THESE FORMS ARE OFTEN MODIFIED TO MEET CHANGING REQUIREMENTS OF LAW AND
NEEDS OF THE INDUSTRY. ALWAYS WRITE OR CALL TO MAKE SURE YOU ARE UTILIZING THE
MOST CURRENT FORM: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
(▇▇▇) ▇▇▇-▇▇▇▇.
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ADDENDUM TO
STANDARD SUBLEASE
Dated: January 15, 1999
By and Between
PRIMELINE PRODUCTS COMPANY ("SUB-LESSOR"); BIKER'S DREAM INTERNATIONAL
("SUB-LESSEE") AND LDT COMPANY - ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ AND ▇▇▇ ▇▇▇▇▇▇ AS
PARTNERS ("MASTER LESSOR")
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The following additional terms and conditions are hereby incorporated into the
above referenced lease as if set forth in full therein.
1. RENT SCHEDULE
The rent schedule for the term of the Sub-Lease shall be:
March 1, 1999 - February 29, 2000 $19,670.00 per month, industrial gross
March 1, 2000 - September 25, 2000 $19,670.00 per month, industrial
gross (as prorated)
Sub-Lessor shall defer the rental amounts due for months two (2), five (5)
and nine (9) of the Sub-lease subject to the provisions of Paragraph 2
below.
2. RENT CONCESSIONS
Notwithstanding the foregoing, Sub-Lessor does hereby grant to Sub-Lessee
the right to defer the basic rental portion of rents which would otherwise
be due under the Sub-Lease for the periods shown in Paragraph 1 above
under the following terms and conditions:
2.1 The abatement and forgiveness of rent shall be effective upon the
execution of the Sub-Lease by Sub-Lessor, Sub-Lessee and Master
Lessor, and upon payment of rent and security deposits as stipulated
in the Sub-Lease, and shall continue for the time and in the amount
as set forth hereinabove.
2.2 If at the date of expiration of the Sub-Lease, Sub-Lessee has paid
to Sub-Lessor all sums due pursuant to the terms of the Sub-Lease,
then the rent which has previously been deferred will be forgiven as
of the date of expiration of the Sub-Lease.
2.3 At any time the Sub-Lessee should be in default and has not timely
cured under the Sub-Lease, Sub-Lessor may declare the accrued amount
of abated and forgiven rent to be then due and payable and include
the amount of the abated and forgiven rent in any action for
collection of rent in the same manner as if the rent had not been
abated and forgiven.
2.4 This right of rent deferment and conditional forgiveness is given in
consideration of the execution of the Sub-Lease.
3. POSSESSION AND COMMENCEMENT
Commencement of the Sub-Lease shall be March 1, 1999. Sub-Lessor shall
deliver possession to Sub-Lessee on or before February 15, 1999.
Sub-Lessee may occupy the premises during this period without the payment
of rent, but subject to the other provisions of the Sub-Lease and Master
Lease.
4. CONDITION OF PREMISES
Sub-Lessee herewith accepts possession of the Premises in the condition
existing upon execution of the Sub-Lease and subject to Paragraph 6.2 of
the Sub-Lease, and Paragraphs 2.2, 2.3, 7.2, 7.3 and 7.4 of the Master
Lease dated September 25, 1997 by and between Master Lessor and Sublessor.
Possession shall be delivered upon receipt by Sub-Lessor of initial rent,
security deposit and insurance binders as stipulated in the Sub-Lease and
Master Lease. Sublessee is not responsible for any pre-existing conditions
created by Sublessor nor for the removal or correction of same upon
expiration or termination of the Sublease or Master Lease, including
alterations, modifications or toxic substances.
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ADDENDUM
January 15, 1999
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5. MISCELLANEOUS
5.1 The Sub-Lease is conditioned upon execution of a new Lease between
LDT Company, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇, as
Partners and Biker's Dream International, a California corporation
for the term September 26, 2000 through February 29, 2004, which
will include an option to renew for an additional five (5) year
term.
5.2 The Master Lessor shall retain all sign rights, income and the right
to lease future sites only to Sign and Cell Tower companies in the
unimproved yard area, provided that they do not interfere with the
operations of the Sublessee.
5.3 Upon expiration of the Sub-Lease, all rents and security deposits
shall be pro-rated and forwarded to Lessor, pursuant to the terms of
the Lease agreement between Lessor and Lessee referenced in
Paragraph 5.1 above.
5.4 Pursuant to Paragraph 6.2, 7.3 and 7.4 of this lease,
Sublessor/Master Lessor hereby consents to installation of the
following trade fixtures and alterations and Sublessee's/Lessee's
removal of same upon expiration or termination of the new Lease
referenced in Paragraph 5.1.
TRADE FIXTURES
1. Additional lighting in the factory
2. Compressed air system, including compressor(s), air lines,
etc.
3. Paint facility, including building annex, paint booth(s) and
all related equipment
4. Fencing and racking inside the building
ALTERATIONS
1. Office along the northeast-most wall of the building
2. Assembly "clean room" to be constructed within the southeast
section of the building
3. Connections/equipment necessary to provide power from the
transformer located on the south property line to the building
annex
All terms of the Sub-Lease shall remain unchanged except as specifically
modified herein.
SUB-LESSOR: SUB-LESSEE:
PRIMELINE PRODUCTS COMPANY BIKER'S DREAM INTERNATIONAL
a California corporation a California corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: President Its: President
Date: 2/10/99 Date: 2/3/99
By: /s/ ▇▇▇▇ ▇▇▇▇
Its: Corporate Secretary
Date: 2/3/99
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ADDENDUM
January 15, 1999
Page 3
MASTER LESSOR
LDT COMPANY, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ AND ▇▇▇ ▇▇▇▇▇▇, AS PARTNERS
By: /s/ ▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇
Date: 2/23/99
Note: Master Lessor has received and reviewed rough drawings of Sub-Lessee's
Proposed Alterations and Trade Fixtures. These rough drawings have been approved
in concept. However, Master Lessor shall retain the right to review and approve
all Trade Fixtures and Alterations at such time as final detailed plans and
specifications are prepared and submitted to Master Lessor.
