Back to top

DP PARTNERS STANDARD INDUSTRIAL LEASE

Lease Agreement

DP PARTNERS 

STANDARD INDUSTRIAL LEASE | Document Parties: CDW CORP | DP Industrial, LLC | CDW Logistics, Inc You are currently viewing:
This Lease Agreement involves

CDW CORP | DP Industrial, LLC | CDW Logistics, Inc

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: DP PARTNERS STANDARD INDUSTRIAL LEASE
Governing Law: Nevada     Date: 3/16/2005
Industry: Retail (Catalog and Mail Order)     Sector: Services

DP PARTNERS 

STANDARD INDUSTRIAL LEASE, Parties: cdw corp , dp industrial  llc , cdw logistics  inc
50 of the Top 250 law firms use our Products every day
 

Exhibit 10(aa)

DP PARTNERS

STANDARD INDUSTRIAL LEASE

(NET-NET-NET)

Lease Date: February 22, 2005

DP Industrial, LLC, Landlord

and

CDW Logistics, Inc., Tenant

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

 

 

Page

 

1.

 

LEASE TERMS

 

 

1

 

2.

 

DEMISE AND POSSESSION; CONSTRUCTION OF PREMISES

 

 

3

 

3.

 

BASE MONTHLY RENT; ALLOWANCES

 

 

7

 

4.

 

COMMON AREAS

 

 

9

 

5.

 

ADDITIONAL RENT

 

 

10

 

6.

 

SECURITY DEPOSIT

 

 

13

 

7.

 

USE OF PREMISES: QUIET CONDUCT

 

 

14

 

8.

 

PARKING

 

 

15

 

9.

 

UTILITIES

 

 

15

 

10.

 

ALTERATIONS, MECHANIC’S LIENS. RETURN CONDITION

 

 

16

 

11.

 

FIRE INSURANCE: HAZARDS AND LIABILITY INSURANCE

 

 

17

 

12.

 

INDEMNIFICATION AND WAIVER OF CLAIMS

 

 

18

 

13.

 

REPAIRS

 

 

19

 

14.

 

SIGNS, AND LANDSCAPING

 

 

20

 

15.

 

ENTRY BY LANDLORD

 

 

20

 

16.

 

ABANDONMENT

 

 

20

 

17.

 

DESTRUCTION

 

 

20

 

18.

 

ASSIGNMENT, SUBLETTING AND TRANSFERS OF OWNERSHIP

 

 

21

 

19.

 

BREACH BY TENANT

 

 

21

 

20.

 

REMEDIES OF LANDLORD

 

 

22

 

21.

 

SURRENDER OF LEASE NOT MERGER

 

 

24

 

22.

 

ATTORNEYS FEES/COLLECTION CHARGES

 

 

24

 

23.

 

CONDEMNATION

 

 

24

 

24.

 

RULES AND REGULATIONS

 

 

24

 

25.

 

ESTOPPEL CERTIFICATE

 

 

24

 

26.

 

SALE BY LANDLORD

 

 

25

 

27.

 

NOTICES

 

 

25

 

28.

 

WAIVER

 

 

25

 

29.

 

HOLDOVER

 

 

25

 

30.

 

DEFAULT OF LANDLORD/LIMITATION OF LIABILITY

 

 

25

 

31.

 

SUBORDINATION

 

 

26

 

32.

 

DEPOSIT AGREEMENT

 

 

26

 

33.

 

GOVERNING LAW

 

 

26

 

34.

 

NEGOTIATED TERMS

 

 

26

 

35.

 

SEVERABILITY

 

 

27

 

36.

 

BROKERS

 

 

27

 

37.

 

QUIET POSSESSION

 

 

27

 

-i-


 

TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

 

 

 

 

Page

 

38.

 

MISCELLANEOUS PROVISIONS

 

 

27

 

39.

 

CHANGE ORDERS

 

 

28

 

40.

 

SPECIAL PROVISIONS

 

 

28

 

41.

 

OPTIONS TO EXTEND LEASE TERM

 

 

28

 

42.

 

RIGHT OF FIRST OFFER ON ADJACENT BUILDING SITE

 

 

29

 

43.

 

PURCHASE OPTION

 

 

30

 

44.

 

UNTENANTABILITY

 

 

33

 

45.

 

MEMORANDUM OF LEASE

 

 

33

 

-ii-


 

DP Industrial, LLC

STANDARD INDUSTRIAL LEASE (the “Lease”)

(NET-NET-NET)

For Landlord Use Only:
Building #:
L/A:

Lease Date: February 22, 2005

Landlord: DP Industrial, LLC, a Delaware limited liability company, located at 1200 Financial Boulevard, Reno, Nevada 89502.

Tenant: CDW Logistics, Inc., an Illinois corporation

1. LEASE TERMS

     1.01 Premises : The “Premises” referred to in this Lease shall mean the approximately five hundred thirteen thousand, two hundred and forty (513,240) square feet of Rentable Area (as defined below) to be located in the Building (as defined below). For purposes hereof, the “Premises” shall mean and refer to the Building measured from the “drip-line” of the Building in accordance with the Measurement Method, as defined in Section 1.08 below.

     1.02 Land, Property and Building : The “Land” shall mean the real estate legally described on Exhibit “A-1” attached hereto. The “Building” shall mean a concrete tilt-up building to be constructed by Landlord (as more particularly set forth herein) on the Land, the approximate dimensions and location of which are shown on the site plan attached hereto as Exhibit “A-2” (“Site Plan”). The Building shall have approximate dimensions of 470 feet x 1,092 feet (it being agreed that under no circumstance may the exterior Building width be greater than 470’) with 50’ x 50’ bays and 60’ staging areas. The Building will be located in North Las Vegas, Nevada, at the southwest corner of Bay Lake Trail and Alexander Road. The “Property” shall constitute the Land, the Building and all other structures and improvements installed and/or located at the Land from time to time, together with all easements and other rights appurtenant thereto.

     1.03 Tenant’s Notice Address : CDW Logistics, Inc., 200 N. Milwaukee Avenue, Vernon Hills, Illinois 60061, Attn: Chief Financial Officer; with a copy to CDW Corporation., 200 N. Milwaukee Avenue, Vernon Hills, Illinois 60061, Legal Department, Attn: General Counsel.

     1.04 Landlord’s Notice Address : DP Industrial, LLC, 1200 Financial Boulevard, Reno, Nevada 89502, Attention: Chief Financial Officer; with a copy to DP Industrial, LLC, 3434 Kier Road, Suite 2, North Las Vegas, Nevada 89030, Attention: Mr. Brad Myers.

     1.05 Tenant’s Permitted Use : Any lawful use, including, without limitation, warehousing, storage, configuration, repair and distribution of products, training facilities and general office purposes (subject, however, to the prohibited uses set forth in Section 38.12 hereof), and which do not violate any Requirements (as such term is defined below).

     1.06 Lease Term : The “Lease Term” commences on the date (the “Lease Commencement Date”) of Landlord’s Substantial Completion (as defined below) of the Landlord Work (as defined below), and expires on the date that is immediately prior to the fifteenth (15 th ) anniversary of the Lease Commencement Date, subject to extension as provided in Article 41 below. “Substantial Completion” of the Landlord Work shall be established by: (i) the issuance of a temporary certificate of occupancy for the Building by the appropriate governmental authorities allowing for Tenant’s functional occupancy of the Premises for the purposes contemplated herein, and (ii) a written certification from Landlord’s architect to Tenant that, in Landlord’s architect’s professional judgment, all Landlord Work has been completed substantially in accordance with the Landlord Work Plans (as defined in the Workletter (“Workletter”) attached hereto as Exhibit “C”), but excluding the completion of minor, commercially reasonable “punch-list” items which do not materially and unreasonably interfere with Tenant’s use of the Premises for warehousing, storage, configuration, repair and distribution of products, training facilities and general office purposes. The Lease Commencement Date shall be evidenced by a Commencement Date Certificate in the form of Exhibit “E”, which the parties agree to execute within ten (10) days of the written request of either party after the Lease Commencement Date (but failure by either party to execute the same shall not affect the validity of the Lease Commencement Date). For purposes of this Lease, the term, “Initial Lease Term,” shall mean the initial fifteen (15) year term of the Lease specified above, and the term,

 


 

“Lease Term,” shall mean and include the Initial Lease Term, together with any Extension Term(s) (as defined in Article 41 below) to the extent the Extension Option(s) are exercised by Tenant pursuant to Article 41 below.

          1.07 Base Monthly Rent : “Base Monthly Rent” during the Initial Lease Term shall be payable in lawful money of the United States of America as follows:

 

 

 

Month(s)

 

Base Rent Per square foot of Rentable Area in the Premises Per Month

1-3

 

$0.00

4-63

 

$0.375

64 – 123

 

$0.425

124 – 180

 

$0.481

     1.08 Rentable Area : The term “Rentable Area” shall mean shall, in respect of any space, the rentable floor area of such space determined in accordance with the methods of measuring rentable area and usable area as described in The Standard Method for Measuring Floor Area in Industrial Buildings, as promulgated by The Building Owners and Managers Association (BOMA) International (as such standard exists as of the date of this Lease) (the “Measurement Method”). Notwithstanding anything to the contrary contained herein, in no event shall the “Rentable Area” of the Premises be deemed to include any portion of the Maintenance Work Platform (as hereinafter defined). Within thirty (30) days after the approval by the parties of the Landlord Work Plans pursuant to the Workletter, Landlord shall (at Landlord’s expense) cause the Rentable Area of the Premises to be measured by Landlord’s architect, based on such Landlord Work Plans, and shall deliver the written results thereof to Tenant (“Landlord’s Measurement Notice”). In the event that Tenant disagrees with the determination of the Rentable Area of the Premises as set forth in Landlord’s Measurement Notice, then Tenant may, within thirty (30) days after Tenant’s receipt of Landlord’s Measurement Notice, notify Landlord in writing that Tenant objects to such determination. In the event that Tenant so objects to the determination of the Rentable Area of the Premises set forth in Landlord’s Measurement Notice, and the parties are unable to resolve such dispute within sixty (60) days after the delivery of Landlord’s Measurement Notice, then such dispute shall be resolved in accordance with the Workletter Dispute Procedures set forth in the Workletter. If Tenant fails to so object within said thirty (30) day period, then the determination of the Rentable Area of the Premises set forth in Landlord’s Measurement Notice shall be considered as final and accepted by both parties. If Tenant timely objects within said thirty (30) day period, then until such time as any such dispute is resolved in accordance with the Workletter Dispute Procedures, the determination of the Rentable Area of the Building and Premises set forth in the Landlord’s Measurement Notice shall govern (it being agreed that, to the extent that such dispute is resolved in Tenant’s favor, Landlord shall, within thirty (30) days after such resolution, refund to Tenant (or, at Tenant’s option, credit against the next installment of Rent coming due under the Lease) any amounts that Tenant has overpaid during the period that the determination of the Rentable Area of the Premises set forth in Landlord’s Measurement Notice governed). Once the Rentable Area of the Premises has been determined pursuant to this Section 1.08, neither Landlord nor Tenant shall thereafter have any right to re-measure or re-calculate the Rentable Area of the Premises under this Lease, except that Landlord shall reasonably re-determine the Rentable Area of the Premises, from time to time to reflect additions or subtractions of space to or from the Premises using the same measurement methodology set forth above; provided , that Tenant shall have the reasonable right to confirm the accuracy (pursuant to the procedures described above with respect to the initial determination of the Rentable Area of the Premises) of Landlord’s re-determination by written notice thereof to Landlord no later than sixty (60) days after Landlord provides notice to Tenant of such re-determination. The parties agree that the Rentable Area shall not include any portion of the mezzanine area of the Building or any floor of the Building other than the ground floor thereof.

     1.09 Laws and Requirements : The term “Laws” shall mean all applicable federal, state, county, local and municipal governmental laws, statutes, ordinances, rules, regulations, codes, decrees, orders and other such requirements, applicable decisions by courts of the State of Nevada, and decisions of federal courts (including, but not limited to, federal courts applying the laws of Nevada). The term “Requirements” shall mean all Laws, together with all other agreements, documents, covenants, conditions and restrictions affecting the Property from time to time.

     1.10 Business Day : The term “Business Day” shall mean any day other than a Saturday, Sunday, or any other day or days now or hereafter commonly observed as holidays on which banking institutions in the State of Nevada are closed for business to the general public.

     1.11 Parking : Tenant is entitled to the use of all vehicle parking spaces at the Property as set forth on the Site Plan, but in no event fewer than the number of parking spaces (or handicapped parking spaces) required by Laws and other Requirements for use of the Premises primarily for warehousing, storage, configuration of products and ancillary general office purposes with an office area not greater than 38,000 square feet of Rentable Area. Tenant’s parking rights are subject to the provisions of Article 8 of the Lease.

     1.12 Landlord Work : The “Landlord Work” shall mean the work described in the Specifications (“Specifications”) attached as Exhibit “B” attached hereto.

2


 

2. DEMISE AND POSSESSION; CONSTRUCTION OF PREMISES

     2.01 Lease . Commencing on the Lease Commencement Date, Landlord leases to Tenant and Tenant leases from Landlord the Premises. The Premises shall be leased to Tenant together with:

     (a) The exclusive right to use the grounds and all exterior portions of the Property;

     (b) The exclusive right to use all parking spaces at the Property as set forth in, and subject to the terms of, Section 1.11 above and Article 8 below;

     (c) The exclusive right to use the roof of the Building for any purposes permitted under Laws and Requirements and related to Tenant’s business operations, including for purposes of maintaining HVAC units, satellite dishes, wireless equipment and antennae, and for the installation and maintenance of security equipment (including cameras), so long as the manner in which the preceding equipment is installed by Tenant does not invalidate or diminish Landlord’s roof warranty for the Building (it being agreed that Landlord and Tenant shall work cooperatively to determine whether any such installation would invalidate or diminish such warranty by, among other things, consulting and coordinating with Landlord’s roofing contractor); and for such purposes Tenant shall have the right to access the roof of the Building at all times;

     (d) The exclusive right to install, use, maintain, replace and repair signage in and on the Property as provided in, and subject to the terms of, Article 14 hereof and Exhibit “F” hereto;

     (e) The exclusive right to use of and access to all of the loading docks and loading bays at the Property;

     (f) The exclusive right to use the guard-house to be constructed by Landlord at the Property as part of the Landlord Work (as set forth in the Specifications);

     (g) The right to restrict access to, and provide security for, the Property by use of (among other things) fences, gates and/or security personnel, all in a manner determined by Tenant (subject to Landlord’s rights in Section 15.01 below); and

     (h) All other rights of use specified in this Lease.

The rights set forth in clauses (a) through (h) above shall be without additional cost to Tenant (except for Rent payable by Tenant for the Premises as provided in this Lease).

     2.02 Construction .

                    A. Landlord covenants and agrees with Tenant that Landlord shall, at Landlord’s sole cost and expense (except as expressly set forth in Sections 3.04A, 3.04B and 3.04C below or within Exhibit “B”), construct the Building and perform all of the other Landlord Work in accordance with the terms and provisions of this Lease and the terms and provisions of the Workletter (including the Landlord Work Plans described therein). Landlord shall cause the Landlord Work to be performed in accordance with the construction schedule attached as Exhibit “G” to this Lease (“Construction Schedule”). Except as may result from Tenant Delay (as defined in the Workletter), the Construction Schedule shall be modified only with the mutual written consent of Landlord and Tenant.

                    B. Landlord shall, at Landlord’s sole cost and expense, obtain financing or equity in an amount, and upon terms, sufficient to provide the funds to construct the Building and perform the other Landlord Work, and in a time frame sufficient to enable Landlord to commence, perform and Substantially Complete the Landlord Work in accordance with the Landlord Work Plans and this Lease (including the Workletter and the Construction Schedule).

     2.03 Landlord’s Construction Warranties . Landlord hereby warrants to Tenant: (1) that all Landlord Work shall be performed in a good and workmanlike manner, and (2) that all materials, supplies and equipment furnished in connection with the Landlord Work shall be of high quality, free from defects and consistent with the requirements of the Landlord Work Plans and the Workletter. The warranties set forth in this Section 2.03 shall remain in full force and effect at all times during the period that is the later of: (x) the second (2 nd ) anniversary of the Lease Commencement Date, in the case of Landlord Work that is Substantially Completed on or before the Lease Commencement Date, or (y) in the case of any Landlord Work which is Substantially Completed after the Lease Commencement Date, the two (2) year period immediately following the Substantial Completion of such work. If at any time prior to the expiration of the foregoing warranty period, Tenant shall discover any

3


 

failure or breach of the Landlord’s warranties set forth in this Section 2.03, then Landlord shall, upon written notice from Tenant and at Landlord’s sole cost and expense, promptly commence and diligently perform the correction of such failure or breach (which corrective action may include, without limitation, any necessary removal, disassembly, reinstallation, repair replacement, re-assembly, reconstruction, re-testing and/or re-inspection of any portion of the Landlord Work and any other property damaged or affected by such failure, breach or corrective action), all in a manner that minimizes any disruption of or interference to Tenant’s use and occupancy of the Premises (and the other areas of the Property that Tenant has the right to use under the Lease), and in compliance with the terms of the Lease. Tenant agrees to provide Landlord with notice of any claim to be made by Tenant under this Section 2.03 promptly after Tenant discovers any failure or breach of the Landlord’s warranties set forth in this Section 2.03, but no failure by Tenant to provide such prompt written notice shall affect the validity thereof, except to the extent that such failure prejudices Landlord to any material extent (e.g., prompt notice would have allowed Landlord to pursue claims under contractors’ warranties which are no longer then available). Subject to Unavoidable Delays (as hereinafter defined), if Landlord fails to perform any work required under this Section 2.03 as and when required under this Section 2.03, and such failure continues for thirty (30) days after notice from Tenant (provided, that in the event of an emergency or hazardous condition, Tenant shall only be required to provide such notice (prior or subsequent) as is reasonable under the circumstances), then Tenant shall have the right (but not the obligation) to perform such work on Landlord’s account, in which event Landlord will reimburse Tenant for the reasonable costs incurred by Tenant in connection therewith within thirty (30) days after Landlord’s receipt of an invoice therefor from Tenant (failing which Tenant shall have (without limiting its other rights and remedies) the offset rights described in Section 30.02 of this Lease, as set forth in said Section 30.02). Notwithstanding the foregoing, if such warranty work cannot reasonably be completed within the above-referenced thirty (30) day period and the delay is not due to an Unavoidable Delay (and the failure to perform such warranty work will not result in an emergency or hazardous condition), then as long as Landlord has commenced the warranty work during such thirty (30) day period, and at all times diligently pursues the completion of such work, Landlord shall be given such additional time as is reasonably necessary to complete such work.

     2.04 Landlord Work Contractor Warranties . Landlord shall obtain construction warranties against defects in labor, materials and equipment of at least two (2) years (or such longer period as is customary with respect to various components of the Landlord Work) from Landlord’s contractors, subcontractors and material suppliers performing the Landlord Work (“Landlord Work Contractors”) with respect to all components of the Landlord Work (other than minor components thereof that do not affect Tenant’s use and occupancy of the Premises or other areas of the Property that Tenant has the right to use under the Lease, or the appearance of the Property); provided , that the warranties for the components of the Landlord Work set forth on Exhibit “M” attached hereto shall have the durations set forth on said Exhibit “M”. On completion of the Landlord Work, Landlord shall provide Tenant, at Tenant’s request, with copies of all warranties on those components, if any, of the Landlord Work which Tenant is responsible for maintaining pursuant to this Lease (the “Tenant Maintenance Warranties”). At Tenant’s request, Landlord shall use its reasonable efforts to enforce the Tenant Maintenance Warranties, or, at Landlord’s option, shall assign to Tenant all of Landlord’s right, title and interest in and to such Tenant Maintenance Warranties. In addition, on or prior to completion of any component of the Landlord Work which Tenant is required to maintain pursuant to the Lease, Landlord shall turn over to Tenant copies of all keys, manuals, operating instructions and the like, together with such operating information and documentation as may be reasonably requested by Tenant, relating to such Landlord Work. To the extent that Landlord does not assign any Tenant Maintenance Warranties to Tenant, Landlord may enforce such Tenant Maintenance Warranties in connection with any claim by Tenant under Landlord’s warranties described in Section 2.03 above. Nothing contained in this Section 2.04 shall be deemed to limit Landlord’s warranty obligations set forth in Section 2.03 above.

     2.05 Landlord Representations and Warranties . Landlord hereby represents and warrants to Tenant as follows:

     (a) as of the Lease Commencement Date, the Property will comply with Laws (including, without limitation, the Americans With Disabilities Act of 1990 (as amended), and all applicable building, fire and safety codes) and other Requirements in effect as of the Lease Commencement Date excluding any non-compliance with Laws and Requirements resulting from Tenant’s work;

     (b) as of the date hereof, the Property complies with Laws and other Requirements in effect as of the date hereof;

     (c) to Landlord’s “Actual Knowledge” (as hereinafter defined), the Premises are currently, and will be as of the Lease Commencement Date, free from any Hazardous Waste and are in compliance with Environmental Laws (each, as hereinafter defined). For purposes of this Paragraph 2.05(c), the term “Actual Knowledge” shall mean the actual knowledge of Brad Myers and Aaron Paris based solely upon a review of any reports in their possession and observations of conditions at the Property, without further investigation and without the imputation of constructive knowledge;

     (d) as of the Lease Commencement Date all systems and equipment serving the Premises including heating, ventilation and air conditioning (collectively, “HVAC”), electrical, sprinkler, plumbing, utility lines and dock equipment that are a part of the Landlord’s Work shall be in good working order;

4


 

     (e) the use of the Premises and Property for purposes of warehousing, storage, configuration, repair and distribution of products, training facilities and general office uses is currently (and will be, as of the Lease Commencement Date) permitted by Laws (including zoning Laws) and other Requirements, without variance;

     (f) vehicular access is (and will be as of the Lease Commencement Date) available to and from the Property directly from and to one or more public streets, or from valid and perpetual private easements which may be freely used by Tenant for purposes of vehicular access to and from the Property; and

     (g) Landlord owns (and will own, as of the Lease Commencement Date) fee simple title to the Property, and has full right, power and authority to execute and deliver this Lease, and to perform each and all of its duties and obligations under this Lease.

     2.06 Punch-List . Upon the written request of Tenant or Landlord made no later than five days after the Lease Commencement Date, Landlord and Tenant shall conduct a walk through inspection of the Property within thirty (30) days after the Lease Commencement Date (or such other time mutually acceptable to the parties) and reasonably agree on any “punch-list” items referred to in Section 1.06 above. Landlord agrees to exercise its reasonable efforts to complete such agreed upon punch-list items as soon as reasonably practicable after such walk through inspection, and in any event, subject to Unavoidable Delays, such punch-list items shall be completed by Landlord within forty-five (45) days after such walk through inspection by Landlord and Tenant. Subject to Unavoidable Delays, in the event that Landlord fails to complete such punch-list items within such forty-five (45) day period, Tenant shall have the right, but not the obligation, to perform such work on Landlord’s account, in which event Landlord shall reimburse Tenant for all reasonable costs and expenses incurred by Tenant in connection therewith within thirty (30) days after Landlord’s receipt of an invoice therefor from Tenant (failing which Tenant shall (without limiting its other rights and remedies) have the offset rights described in Section 30.02 below). Tenant agrees to permit Landlord reasonable access to the Premises, subject to the provisions of this Lease, in order to complete any such punch-list work, and Landlord agrees to perform such punch-list work in a manner that does not unreasonably interfere with Tenant’s use and occupancy of the Premises or the other portions of the Property which Tenant has the right to use hereunder. Notwithstanding the foregoing, if such punch-list work cannot reasonably be completed within the above-referenced forty-five (45) day period and the delay is not due to an Unavoidable Delay (and the failure to perform such warranty work will not result in an emergency or hazardous condition), then as long as Landlord has commenced the punch-list work during such forty-five (45) day period, and at all times diligently pursues the completion of such work, Landlord shall be given such additional time as is reasonably necessary to complete such work.

     2.07 Early Occupancy .

                    A. For the period commencing on August 1, 2005, or such earlier date on which the first one third (1/3) of the slab of the Building is delivered to Tenant as provided in Section 2.07B below (the “Early Occupancy Date”), and ending on the Lease Commencement Date (the “Early Occupancy Period”), Tenant shall be entitled to occupy the Premises for the limited purposes and subject to the terms and conditions of this Section 2.07 (“Early Occupancy”). Provided that Tenant exercises its Early Occupancy rights granted under this Section 2.07 in compliance with Laws and Requirements, Tenant shall have the right, at Tenant’s sole cost and expense, to enter onto the Property and Premises at any time during the Early Occupancy Period, in order to take measurements and prepare and install Tenant’s Alterations (as defined below) fixtures, equipment and personal property (including, without limitation, racking, Maintenance Work Platform equipment and conveyor equipment) in the Premises and other areas of the Property which Tenant has the right to use and/or occupy hereunder.

                    B. Landlord agrees to cause the Premises to be made available to Tenant for Early Occupancy at the rate of approximately one-third (1/3) of the slab of the Building (with each such portion of the Building in “dried-in” condition with a roof over the portion of the slab delivered by Landlord and including necessary supporting walls for such portion of the roof) delivered each week commencing on or before August 1, 2005 (i.e., the second 1/3 of the slab of the Building shall be delivered to Tenant on or before August 8, 2005 and the final 1/3 of the slab of the Building shall be delivered to Tenant on or before August 15, 2005). At the time of each such delivery, the floor slab of the applicable portion of the Premises shall be complete and such portion of the Premises shall be enclosed in a manner sufficient to enable the Tenant to lawfully commence installation of Tenant’s Alterations, fixtures, equipment and personal property. Landlord further agrees that it shall cause an approximately fifty thousand (50,000) square foot paved staging surface consisting of a combination of concrete aprons and asphalt binder course (as further described in Exhibit “B”) that provides access to and from the Building to be installed and available at the location on the Property set forth on Exhibit “N” attached hereto, no later than August 1, 2005, which shall be sufficient to enable Tenant to deliver and install its Alterations, fixtures, equipment and personal property. Landlord agrees that in the event of a delay in the delivery of the Premises beyond the deadlines set forth above (including any delay in completion of the paving work described above), then, except to the extent that such delay results from Tenant Delay, Landlord shall pay liquidated damages to Tenant for each day of delay as follows:

 

 

 

First 2 weeks of delay

 

$1,000 per day

5


 

 

 

 

Second 2 weeks of delay

 

$2,000 per day

Next 4 weeks of delay

 

$5,000 per day

Thereafter

 

$10,000 per day

(each day of delay in such delivery is referred to herein as a “Slab Delay Day”, and the foregoing fees payable in connection therewith are referred to herein as the “Slab Late Fees”); provided, however , that to the extent that any Slab Delay Day results from Unavoidable Delays, then in lieu of the foregoing remedies: (i) for the first ten (10) Slab Delay Days that result from Unavoidable Delays, Tenant shall not be entitled to any remedy as a result thereof, and (ii) for each Slab Delay Day that results from Unavoidable Delays after the first such ten (10) Slab Delay Days, Tenant shall be entitled to one (1) day of full abatement of Base Monthly Rent which would otherwise be payable under this Lease (commencing with the Lease Commencement Date). By way of example (but not limitation), if thirty five (35) Slab Delay Days occur, fifteen (15) of which result from Unavoidable Delays, five (5) of which result from Tenant Delay, and fifteen (15) of which result from causes other than Unavoidable Delays or Tenant Delays, then Tenant shall be entitled to $16,000 of Slab Late Fees, plus five (5) days of abatement of Base Monthly Rent under the Lease. If any portion of the Premises (or the paved surface described above) is not delivered to Tenant within ninety (90) days after the date that the same is required to be delivered as set forth above, Tenant shall have the right to terminate the Lease prior to the date such portion is delivered to Tenant upon written notice to Landlord and Landlord shall pay appropriate liquidated damages to Tenant that have accrued to the day of termination within thirty (30) days after the date of termination. If Tenant has not terminated this Lease by the Slab Late Fee Cutoff Date (as defined below) as a result of Landlord’s failure to satisfy the foregoing deadlines, any additional liquidated damages attributable to such failure that would otherwise have accrued after the Slab Late Fee Cutoff Date shall cease. For purposes hereof, the term “Slab Late Fee Cutoff Date” shall mean: (i) November 25, 2005, plus (ii) one (1) additional day for each Slab Delay Day which results from Unavoidable Delays and occurs on or prior to said November 25, 2005 (but not to exceed sixty (60) additional days). If any Slab Late Fees shall be due and payable by Landlord as provided herein, but this Lease shall not be terminated as provided above, then Landlord shall pay such Slab Late Fees to Tenant, from time to time, within ten thirty (30) days after Tenant provides Landlord with an invoice therefor.

                    C. Tenant’s entry onto and use of the Premises during the Early Occupancy Period pursuant to this Section 2.07 shall be subject to all of the terms and conditions of this Lease, excluding, however, the requirement to pay Rent (including Base Monthly Rent, Additional Rent and utilities); provided , that during any portion of the Early Occupancy Period that Tenant is performing substantial racking and conveyor work at the Premises, the cost of utilities serving the Premises shall be equitably allocated between Landlord and Tenant, based on the relative usage of such utilities by the parties, as reasonably and jointly determined by Landlord and Tenant. Notwithstanding the foregoing, neither Landlord nor Tenant shall have any liability or responsibility to the other with respect to dust resulting from its or its contractors’ construction or other activities which dust affects or damages the other party’s equipment and property at the Property. During any Early Occupancy Period, each party agrees to reasonably cooperate and coordinate with the other party so as to minimize interfere with the work being performed by or on behalf of such other party.

     2.08 Landlord Work Deadline . Landlord shall cause the Landlord Work to be Substantially Completed no later than September 26, 2005. If Landlord fails, for any reason (other than Tenant Delays, as defined in the Workletter), to Substantially Complete the Landlord Work on or before said September 26, 2005, then, except to the extent that such delay results from Tenant Delay, Landlord agrees to pay Tenant liquidated damages for each day of delay beyond September 26, 2005 as follows:

 

 

 

 

 

 

 

First 2 weeks of delay

 

$1,000

 

per day

Second 2 weeks of delay

 

$2,000

 

per day

Next 3 weeks of delay

 

$5,000

 

per day

Thereafter

 

$10,000

 

per day

(each day of delay in such Substantial Completion is referred to herein as a “Final Delay Day” and the foregoing fees payable in connection therewith are referred to herein as the “Final Delay Fees”); provided, however , that to the extent that any Final Delay Day results from Unavoidable Delays, then in lieu of the foregoing remedies: (i) for the first ten (10) Final Delay Days that result from Unavoidable Delays, Tenant shall not be entitled to any remedy as a result thereof (other than the extension of the Lease Commencement Date that results therefrom, as provided in Section 1.06 above), and (ii) for each Final Delay Day that results from Unavoidable Delays after the first such ten (10) Final Delay Days, Tenant shall be entitled (in addition to the extension of the Lease Commencement Date, as provided in Section 1.06 above) to one (1) day of full abatement of Base Monthly Rent which would otherwise be payable under this Lease (commencing with the Lease Commencement Date). By way of example (but not limitation), if forty five (45) Final Delay Days occur, twenty (20) of which result from Unavoidable Delays, five (5) of which result from Tenant Delay, and twenty (20) of which result from causes other than Unavoidable Delays or Tenant Delays, then Tenant shall be entitled to $26,000 of Final Delay Fees, plus ten (10) days of abatement of Base Monthly Rent under the Lease. If the Landlord Work is not Substantially Completed before February 10, 2006, then Tenant shall have the right to terminate the Lease prior to Substantial Completion and Landlord shall pay to Tenant all liquidated damages that have accrued to the date of termination within thirty (30) days after the date of termination. To the extent that Landlord has paid Tenant any Slab Late Fees

6


 

with respect to any Slab Delay Days (as provided in Section 2.07 B above), then the amount of any Final Delay Fees due pursuant to this Section 2.08 shall be reduced (but not below $0.00) by the amount of the Slab Late Fees so paid by Landlord to Tenant. Each of the deadlines for the Substantial Completion of the Landlord Work set forth in this Section 2.08 shall be subject to extension by one (1) day for each day of Tenant Delay that shall occur, as provided in the Workletter. If Tenant has not terminated this Lease by the Final Delay Fee Cutoff Date (as defined below) as a result of Landlord’s failure to satisfy the foregoing deadlines, any additional liquidated damages attributable to such failure that would otherwise have accrued after the Final Delay Fee Cutoff Date shall cease. For purposes hereof, the term “Final Delay Fee Cutoff Date” shall mean: (i) January 4, 2006, plus (ii) one (1) additional day for each Final Delay Day which results from Unavoidable Delays and occurs on or prior to said January 4, 2006 (but not to exceed sixty (60) additional days). If any Final Delay Fees shall be due and payable by Landlord as provided herein, but this Lease shall not be terminated as provided above, then Landlord shall pay the Final Delay Fees to Tenant, from time to time, within thirty (30) days after Tenant provides Landlord with an invoice therefor.

     2.09 Non-Compete . Landlord represents and warrants to Tenant that Landlord is the current fee simple owner of the business park described on Exhibit “I-1” attached hereto and made a part hereof (the “Business Park”), including the building site known as building #4 (the “Adjacent Premises”) located adjacent to the Property and described on Exhibit ”I-2” attached hereto (excluding the parcel captioned as the “Option Parcel” in Exhibit “I-1”). Landlord agrees that Landlord will not, prior to or during the Lease Term (including any Extension Term(s)): (a) lease or sell any portion of the Business Park to any of Tenant’s competitors identified on Exhibit “J-1” attached hereto and incorporated herein by reference, or (b) lease, sell, or permit the subletting or assignment of any portion of the Adjacent Premises to any of Tenant’s competitors identified on Exhibit “J-1” or Exhibit “J-2” attached hereto and incorporated herein by reference. If at any time Owner purchases the Option Parcel, the Option Parcel shall become part of the Business Park and shall be subject to the provisions of this Section 2.09. In the event that Tenant exercises its Purchase Option with respect to the Property as set forth in Section 43 below, the restrictions set forth in this Section shall remain in effect for a period of thirty-five (35) years from the Lease Commencement Date. The rights of Tenant under this Section 2.09 shall not be assignable by Tenant to any person or entity other than an Affiliate (as hereinafter defined) of Tenant, and shall terminate in the event that: (i) Tenant shall sublease more than fifty percent (50%) of the Rentable Area of the Premises to any person or entity, except pursuant to a Permitted Transfer (as hereinafter defined), or (ii) Tenant shall permanently abandon more than fifty percent (50%) of the Rentable Area of the Premises, and for purposes of this clause “permanently” shall mean for a period of one (1) year or more (but, for clarity, in no event shall Tenant be deemed to have abandoned the Premises (or any portion thereof) in the event that any failure by Tenant to occupy the same results from events of casualty, condemnation, Untenantability (as hereinafter defined) or Unavoidable Delays, or if Tenant is modifying, altering, improving or reconfiguring the Premises (or any portion thereof), or the manner in which Tenant uses and/or occupies the Premises, with intent to re-occupy the same after completion thereof). Concurrently with the execution and delivery of this Lease, Landlord and Tenant shall enter into a Declaration of Restrictive Covenants in the form of Exhibit “K” attached hereto, pursuant to which the restrictions set forth in this Section 2.09 will be placed of record with respect to the Business Park and Adjacent Premises. If the rights of the Tenant under this Section 2.09 are terminated, Landlord shall have the right, upon fifteen (15) days prior written notice to Tenant, to unilaterally place of record a Partial Termination of Declaration of Restrictive Covenants, pursuant to which the restrictions set forth in this Section 2.09 will be removed from record (but such termination of the rights contained in this Section 2.09 shall not affect any other restrictions set forth in such Declaration of Restrictive Covenants). Notwithstanding the foregoing, Tenant agrees to cooperate with Landlord in connection with any reasonable request in connection with the foregoing, including without limitation, executing such Partial Termination of Declaration of Restrictive Covenants.

     2.10 Other Occupants and Restrictions . Landlord covenants and agrees that, except to the extent required in order to perform its obligations under this Lease, Landlord will not grant any person or entity other than Tenant its agents, representatives, employees, directors, officers, shareholders, Affiliates, consultants, independent contractors, subtenants, licensees, invitees, successors and assigns (collectively, “Tenant Parties”) any easement, license, lease or similar rights of use or occupy with respect to any portion of the Property during (or prior to) the Lease Term, without Tenant’s prior written consent, other than utility easements and other companies serving the public (including, but not limited to, easements to fiber optic carriers and other communications companies and excluding cell towers and satellite dishes) that do not underlie the improvements on the Property and do not adversely affect Tenant’s use and/or occupancy of the Property. Further, Landlord will not restrict the use of the Property in a manner which would materially and adversely affect Tenant’s use and/or occupancy of the Property.

     2.11 Incentives . Landlord and Tenant agree that in the event that any incentives, rebates or other financial benefits or concessions are provided or made available by reason of Tenant’s lease, use or occupancy of the Property by any governmental authority having jurisdiction thereover, then the full amount of such incentives, rebates or other financial benefits of concessions (less any reasonable, out-of-pocket costs that Landlord shall have actually paid in connection with obtaining such incentives, rebates, benefits or concessions at Tenant’s request, but in no event to exceed the amount of such incentives, rebates, benefits of concessions) shall accrue solely to Tenant, and shall be for the sole and exclusive benefit of Tenant (including any such incentive, rebate or other financial benefit which takes the form of an abatement or reduction of any Real Property Taxes (as hereinafter defined)).

7


 

3. BASE MONTHLY RENT; ALLOWANCES

     3.01 Base Monthly Ren t: On the first day of every calendar month of the Lease Term commencing on the Lease Commencement Date, Tenant will pay, without deduction or offset (except as expressly set forth herein), prior notice or demand, the Base Monthly Rent due for such month (as set forth in Section 1.07 above) at the place designated by Landlord in writing to Tenant, and if no such place has been designated by Landlord, then to Landlord’s address for notices set forth in Section 1.04 above. In the event that the Lease Term commences or ends on a day other than the first day of a calendar month, a prorated amount of Base Monthly Rent and Additional Rent shall be due with respect to such partial month (based on the actual number of days within such month).

     3.02 Cost of Living Adjustment : [INTENTIONALLY OMITTED]

     3.03 Late Fees . Any installment of Rent due from Tenant to Landlord which is not paid within ten (10) days after the same is past due will be considered past due and Tenant will pay to Landlord as Additional Rent a late charge equal to the product of the variable Prime Rate plus three percent (3%) per annum as charged by Bank of America, Nevada from time to time (the “Default Rate”); times the amount of such installment amount due, or the sum of twenty-five dollars ($25.00), whichever is greater, for each month or fractional month transpiring from the date the same was originally due until paid. A twenty-five dollar ($25.00) handling charge will be paid by Tenant to Landlord for each returned check.

     3.04 Allowances .

                    A. Landlord and Tenant acknowledge and confirm that the Landlord Work consists, in part, of Landlord’s performance and completion of approximately eighteen thousand (18,000) square feet of Rentable Area of office space improvements and custom configuration space consisting of twenty-five thousand (25,000) square feet of Rentable Area of technical office, which custom configuration space shall be configured in a manner that permits the same to be expanded to a total size of up to thirty-eight thousand (38,000) square feet of Rentable Area, all as more specifically set forth in the Specifications (collectively, the “Office Work”). Landlord shall provide an allowance to Tenant of Seven Hundred and Fifty Thousand Dollars ($750,000.00) with respect to the cost of the Office Work (including the cost of any permits or approvals from governmental entities which are required specifically and exclusively for the performance of the Office Work (as opposed to the performance of any other components of the Landlord Work) and the fees of the general contractor which are allocable to the Office Work). Landlord agrees that the Office Work will be hard-bid, on an open book basis, by no less than three (3) subcontractors for each component of the Office Work that exceeds $30,000. If as a result of subcontractor shortages, Landlord cannot obtain at least three bids, Landlord shall inform Tenant of any difficulty obtaining those bids or a circumstance where the lowest bid would not be a prudent subcontractor choice. In the event that the total cost of the Office Work is less than $750,000 any such savings shall be credited to Tenant by cash payment by Landlord within thirty (30) days after the Lease Commencement Date, or Rent abatement, at Tenant’s election. In the event that the total cost of the Office Work exceeds the $750,000 allowance, Tenant shall pay the excess to Landlord within thirty (30) days after the Lease Commencement Date, provided that such work has then been completed (as jointly and reasonably determined by Landlord and Tenant) and that Landlord has delivered to Tenant reasonable documentation of such costs. Reasonable documentation evidencing the occurrence of the events described in the preceding sentence (and the costs thereof) shall be provided by Landlord to Tenant as a condition to Tenant’s obligation to make the corresponding payment(s) set forth therein.

                    B. Landlord and Tenant acknowledge and confirm that the Landlord Work consists, in part, of Landlord’s construction and installation of a maintenance work platform to be located, in part, above the custom configuration space described in Section 3.04A above, with a light-weight concrete floor, as more particularly set forth on the Specifications (the “Maintenance Work Platform”). The dimensions and exact location of the Maintenance Work Platform shall be designated by Tenant prior to (or within a reasonable time after) the completion of the Landlord Work Plans pursuant to the Workletter. Subject to Tenant Delay, Landlord shall cause the Maintenance Work Platform to be substantially completed no later than August 1, 2005. Landlord shall provide an allowance in the amount of Seven Hundred Seven Thousand Six Hundred Forty Two and No/100 Dollars ($707,642) with respect to the construction and installation of the Maintenance Work Platform. In the event that the total cost of performing the construction and installation of the Maintenance Work Platform is less than $707,642, then any such savings shall be credited to Tenant by cash payment by Landlord within thirty (30) days after the Lease Commencement Date, or Rent abatement, at Tenant’s election; provided , that (1) Landlord shall not be obligated to disburse any portion of the allowance to Tenant as a cash payment or credit against Rent in the event that a Default by Tenant under Section 19.01.D shall have occurred and be continuing, and (2) to the extent that a monetary Default by Tenant in excess of $15,000 shall have occurred and be continuing at any time that Landlord would otherwise be obligated to disburse any portion of the allowance to Tenant as a cash payment or credit against Rent, Landlord shall be permitted to withhold from such disbursement of the allowance the amount of such monetary Default until the same is cured by Tenant. In the event that the total cost of the construction and installation of the Maintenance Work Platform exceeds the $707,642 allowance, Tenant shall pay the excess within thirty (30) days after the Lease Commencement Date, provided that Landlord shall have delivered Tenant reasonable documentation of such costs. Landlord will ensure that all work associated with the construction and installation of the

8


 

Maintenance Work Platform is performed by a subcontractor designated by Tenant; provided such subcontractor is licensed within the State of Nevada if required by applicable law.

                    C. Landlord and Tenant further acknowledge and confirm that the Landlord Work consists, in part, of Landlord’s construction and installation of the following at the Building: evaporative cooler package and warehouse heating, all as more particularly set forth on the Specifications. Landlord and Tenant agree that Tenant shall bear the actual cost of Landlord’s performance of the foregoing items; provided , that Tenant shall only be obligated to pay for the evaporator cooler package and warehouse heating described above to the extent that the actual cost thereof exceeds $737,203, in which case Tenant shall, within thirty (30) days after the Lease Commencement Date (provided that such evaporator cooler and warehouse heating work has then been completed, as jointly and reasonably determined by Landlord and Tenant), pay any such excess cash to Landlord within thirty (30) days after written notice from Landlord (which notice shall be accompanied by reasonable written documentation of the costs of such work). Landlord will ensure that all work for the foregoing items will be hard bid by no less than three (3) contractors on an open book basis. In addition, Tenant will contribute (which contribution may be defrayed from Tenant’s Discretionary Allowance described below) up to the following amounts for the following items to be constructed and/or performed by Landlord as part of the Landlord Work: (i) up to $6,372 for the cost of additional plumbing and HVAC work necessary required as a result of Tenant’s installation of 45 battery charging positions in the Building (as required by the Specifications) rather than 30 such positions; (ii) up to $46,677 for the cost of facilities for additional electrical power as a result of Landlord’s installation of task lighting for the area to be located below the Maintenance Work Platform (as required by the Specifications) and providing additional exhaust for the increase in battery charging positions described in clause (i) above; and (iii) up to $60,000 for the cost of increasing the electrical capacity of the Building from 6,000 amps to 9,000 amps (as required by the Specifications); provided, however , that to the extent that the actual cost of any of the foregoing items is less than the amount allocated thereto as set forth above (through value engineering or otherwise), the entire amount of such difference shall accrue to the benefit of Tenant, and the amount of Tenant’s applicable contribution shall be reduced thereby. To the extent that the precise actual cost of any of the items described in clauses (i) – (iii) of the preceding sentence cannot be ascertained, then the amount thereof shall be reasonably determined by the subcontractors performing such work. Landlord will ensure that all work for the items described in the preceding sentence will be hard bid by no less than three (3) subcontractors on an open book basis.

                    D. Landlord shall provide to Tenant a discretionary tenant allowance in the amount of Six Hundred Sixty One Thousand Six Hundred Sixty One and 58/100 Dollars ($661,661.58) (the “Discretionary Allowance”) to be used by Tenant at its sole discretion for any cost or expense related in any way to the Property; provided , that (1) Landlord shall not be obligated to disburse any portion of the Discretionary Allowance in the event that a Default by Tenant under Section 19.01.D shall have occurred and be continuing, and (2) to the extent that a monetary Default by Tenant in excess of $15,000 shall have occurred and be continuing at any time that Landlord would otherwise be obligated to disburse an installment of the Discretionary Allowance, Landlord shall be permitted to withhold from such disbursement of the Discretionary Allowance the amount of such monetary Default until the same is cured by Tenant. Tenant shall notify Landlord from time to time of requests for payments and/or disbursements of the Discretionary Allowance, and Landlord shall pay such amounts to Tenant within thirty (30) days after Tenant’s request (failing which Tenant shall have, among its other rights and remedies hereunder, the offset rights described in Section 30.02 hereof, as provided in said Section 30.02). In the event that Tenant requests that Landlord construct any additional tenant improvements to the Premises with the Discretionary Allowance (as opposed to Tenant using such Discretionary Allowance to itself perform Alterations or for other purposes), such additional work shall be subject to Landlord’s prior approval, which shall not be unreasonably withheld, but which approval may be based upon (without limitation): (i) the Landlord Work Contractors’ construction schedule for the Landlord Work and any delays to the Landlord Work resulting from the construction of the desired additional tenant improvements, (ii) the required time to prepare and complete plans, drawings and specifications for the desired additional tenant improvements, (iii) availability of subcontractors and materials to complete the work required by such additional improvements and (iv) whether the desired additional tenant improvements are likely to (1) adversely affect building systems or the structure or safety of the Premises, (2) impair Landlord’s ability to furnish services to Tenant, (3) materially increase the costs of operating the Premises, (4) violate any Laws, (5) contain or use Hazardous Waste (as hereinafter defined) or (6) adversely affect the exterior appearance of the Property. Without limiting the foregoing, in the event Tenant notifies Landlord that Tenant desires Landlord to perform any additional tenant improvement which Tenant later decides not to have completed and/or installed in or on the Premises, any actual, reasonable costs incurred by Landlord as a result of such request by Tenant shall be due from Tenant (and may be defrayed from the Discretionary Allowance), which costs may include, without limitation, preparation of plans, drawings, specifications and other details necessary to complete the requested work. Upon notification by Tenant to Landlord of any desired additional tenant improvements, Landlord agrees to exercise commercially reasonable efforts to promptly: (x) provide its approval or disapproval thereof to Tenant, (y) commence preparation of required working plans, drawings and specifications, and (z) commence the bidding process. Upon Tenant’s approval of the foregoing, Landlord agrees to exercise reasonable efforts to complete the approved additional tenant improvements as soon as reasonably practical thereafter. In the event that the Discretionary Allowance is not fully utilized by Tenant prior to the Lease Commencement Date, Landlord will reimburse Tenant either in cash within thirty (30) days after the Lease Commencement Date, or pursuant to Rent abatement, at Tenant’s option. In the event that Tenant requests Landlord to construct additional tenant improvements and the costs thereof exceeds the Discretionary Allowance, Tenant shall pay such amount to Landlord within thirty (30) days after the Lease Commencement Date, provided that such work has been completed (as jointly and reasonably determined by Landlord and Tenant) and that Landlord has delivered to Tenant reasonable documentation of such costs.

9


 

4. COMMON AREAS

     4.01 [INTENTIONALLY OMITTED]

     4.02 [INTENTIONALLY OMITTED]

     4.03 [INTENTIONALLY OMITTED]

5. ADDITIONAL RENT

     5.01 Additional Rent . All charges payable by Tenant to Landlord under this Lease other than Base Monthly Rent are called “Additional Rent.” Unless this Lease provides otherwise, Additional Rent is to be paid with the next monthly installment of Base Monthly Rent and is subject to the provisions of Section 3.03. The term “Rent” whenever used in this Lease means Base Monthly Rent and Additional Rent.

     5.02 Operating Costs .

                    A. The term, “Operating Costs,” means the actual, reasonable costs and expenses required of Landlord pursuant to this Lease which are incurred by Landlord during the Lease Term with respect to the operation, maintenance, management and repair of the Property, including, but not limited to: (i) any Landlord Repairs of the Property performed by Landlord pursuant to Section 13.03 of this Lease below; (ii) a management fee equal to 1.5% of the Base Monthly Rent owed Landlord; and (iii) the cost of all insurance required to be paid by Landlord with respect to the Premises pursuant to this Lease. Notwithstanding the foregoing, Operating Costs will not include: (a) any costs which, under generally accepted accounting principles, consistently applied, are of a capital nature (including rental costs for equipment and services that would be considered capital in nature) (a “Capital Cost”), except as set forth in Section 5.02A(2), (b) any costs incurred by Landlord in the performance of the Landlord Work, (c) any costs incurred by Landlord by reason of any breach of this Lease by Landlord (including any of Landlord’s representations and warranties contained herein), or the negligence or intentional misconduct of Landlord or its agents, invitees, representatives, employees, directors, officers, shareholders, Affiliates, consultants, independent contractors, successors and assigns (collectively, “Landlord Parties”), or any violation of Requirements by Landlord or any Landlord Party, (d) any costs incurred by Landlord in connection with the performance of its warranty obligations described in Article 2 hereof, (e) costs of repairs, restoration, replacements or other work occasioned by fire or other casualty or an insurable nature, or the exercise by governmental or quasi-governmental entities of the right of eminent domain, (f) interest and amortization of funds borrowed by Landlord, or rent under any ground lease or master lease entered into by Landlord, (g) costs, fines, penalties or fees incurred due to Landlord’s failure to make any payment when due (except as set forth in Section 5.02A(1)), (h) costs incurred for any items to the extent covered by any warranty, (i) the costs of items provided by Affiliates of Landlord to the extent that such costs exceed reasonable and customary charges for such services and Tenant acknowledges that the 1.5% management fee set forth above is reasonable, (j) costs in the nature of indemnification obligations of Landlord or any Landlord Party, (k) costs of complying with Landlord’s obligations under Section 7.05 hereof or any other costs or expenses incurred in connection with the remediation of any Hazardous Waste (including any cost or expense incurred in connection with any government investigation, order, proceeding or report with respect thereto), (l) leasing commissions, (m) costs and expenses (including court costs, attorneys’ fees and disbursements) related to or in connection with disputes with any holder of a mortgage or by or among any persons having an interest in the Landlord or the Premises, (n) costs incurred in connection with a sale, lease or transfer (including testamentary transfers) of all or any part of the Premises or any interest therein, or of any interest in Landlord, or in any person comprising, directly or indirectly, Landlord or in any person having an equity interest, directly or indirectly in Landlord, (o) the cost of any “tap fees” or one-time lump sum sewer or water connection fees for the Property payable in connection with the initial construction of the Property, (p) all costs and expenses (including utilities) payable directly by Tenant, (q) costs and expenses incurred by Landlord associated with the operation of the business of the legal entity or entities which constitute Landlord (as opposed to operation of the Premises), (r) property management fees in excess of 1.5% of the Base Monthly Rent owed Landlord, (s) Real Property Taxes, or (t) any other cost or expense which is not normal and customary operating expense in comparable buildings in the Las Vegas, Nevada metropolitan area. Tenant shall also pay as a part of Operating Costs (I) the expenses attributable to the Land and payable under that certain Reservation of Easements and Declaration of Restrictive Covenants For Fire Equipment and Other Facilities dated as of the date hereof and (II) Tenant’s share of the expenses attributable to the Land payable under that certain Reciprocal Grant of Easement with Covenants and Restrictions Affecting Land dated February 12, 2003 and recorded February 18, 2003 in Book 20030218 as Document No. 01839 in the official records of Clark County, Nevada (the “Existing Declaration”). Notwithstanding the foregoing:

                    1. To the extent that (x) Tenant shall fail to timely pay its share of any installment of Operating Costs as required under this Lease, (y) as a result thereof, Landlord fails to pay such Operating Costs when due, and (z) such failure by Landlord to pay such Operating Costs results in the imposition of fines, penalties or interest upon Landlord, then Landlord may include such fines, penalties and interest in “Operating Costs” for purposes hereof; provided, that, in such event, notwithstanding anything to the

10


 

contrary contained in this Lease, Landlord shall not have the right to charge Tenant any additional late fee, interest, charge or similar expense with respect to Tenant’s failure to have timely paid such Operating Costs; and

                    2. Operating Costs may (to the extent includable in Operating Costs pursuant to the first sentence of this Section 5.02A, and not excluded from Operating Costs pursuant to any of clauses (b) through (t) of the second sentence of this Section 5.02A) include Capital Costs paid by Landlord during the Lease Term for any capital improvement, the installation of which is required to comply with any Laws first enacted and effective after the Lease Commencement Date. Any such Capital Costs included in Operating Costs shall be amortized on a level payment basis by Landlord over the useful life (for accounting and not tax purposes) of the applicable capital improvement or other capital item, together with interest on the unamortized amount of said cost at a rate per annum equal to the actual rate of interest and other borrowing costs and expenses if any (amortized over the life of the applicable loan and ratably allocated to the relevant amount being amortized) incurred by Landlord with respect to the cost of such capital item to the extent paid for directly through loan proceeds advanced by a third-party lender, if any, which is not an Affiliate of Landlord, pursuant to the terms of a bona fide loan.

                    B. [INTENTIONALLY OMITTED]

                    C. Landlord shall estimate at least ninety (90) days before the Lease Commencement Date (for the first full or partial calendar year’s Operating Costs due hereunder) and thereafter at least ninety (90) days after the commencement of each subsequent calendar year (for each such subsequent full or partial calendar year’s Operating Costs due hereunder), the amounts Tenant shall owe for Operating Costs for the applicable full or partial calendar year. Any such failure to estimate shall not prejudice Landlord’s rights to collect such amounts, and, until Landlord provides such estimate to Tenant, Tenant shall continue to pay the estimated amounts it paid prior to the previous calendar year. Tenant shall pay to Landlord on the first (1 st ) day of each month during such calendar year (or portion thereof) an amount equal to 1/12 of such estimate of Operating Costs for such year (or portion thereof). Landlord’s estimate of Operating Costs may be adjusted from time to time by Landlord within a calendar year, and any such adjustments of estimates within a calendar year shall be based on Landlord’s reasonable expectations. If any adjustment shows an increase in Tenant’s estimated payments for the current calendar year, Tenant shall pay the difference between the new and former estimates, for the period from January 1 of the current calendar year through the month in which such adjustment is sent. Tenant shall make such payments within forty-five (45) days after Landlord sends the adjusted estimate to Tenant. If any adjustment shows a decrease in Tenant’s estimated payments for the current calendar year, Tenant shall receive a credit for the difference between the new and former adjustments, for the period from January 1 of the current calendar year through the month in which such estimate is sent. Landlord shall credit such amount towards the next installment(s) of Rent due under this Lease. By April 1 of each calendar year (or as soon thereafter as is reasonably practicable under the circumstances, but in any event by June 1 of each year), Landlord shall provide a statement or statements (an “Operating Statement”) to Tenant signed by a financial officer or authorized representative of Landlord, showing: (a) the amount of actual Operating Costs identifying major categories therefor incurred for the prior calendar year, (b) the amount paid by Tenant toward Operating Costs during said year on an estimated basis, and (c) the amount of actual Real Property Taxes with respect to the applicable calendar year. Upon written request of Tenant, Landlord shall supply sufficient backup data, as may be reasonably requested by Tenant, to reasonably demonstrate to Tenant to its reasonable satisfaction the accuracy of such Operating Costs in accordance with the provisions of this Lease. Failure by Landlord to provide Tenant with an Operating Statement by April 1 st of each year shall not constitute a waiver by Landlord of its right to collect Tenant’s share of Operating Costs or estimates for a particular calendar year, Landlord’s right to charge Tenant for such expenses in subsequent years is not waived. Any Operating Statement, once issued by Landlord, shall be binding on Landlord, except in case of manifest error of which Landlord notifies Tenant in writing no later than December 31 of the calendar year within which the applicable Operating Statement is delivered (or required to be delivered) to Tenant.

                    D. Subject to the provisions of this Paragraph 5.02D, Tenant shall have the right to inspect Landlord’s records with respect to Operating Costs (including insurance) and Real Property Taxes for any calendar year falling in whole or in part during the Lease Term during normal business hours upon reasonable notice and in a reasonable manner, at Tenant’s sole cost and expense, by providing notice of its intent to conduct such inspection not later than six (6) months after receipt of the Operating Statement for the applicable calendar year. Tenant’s audit rights shall be limited to Operating Costs (including insurance) and Real Property Taxes for the period covered in such Operating Statement. Within thirty (30) days after receipt of Tenant’s request to inspect Landlord’s books and records related to Operating Costs and Real Property Taxes, Landlord shall make such books and records available to Tenant at a mutually acceptable location at or in the reasonable vicinity of the Business Park, and Tenant shall commence its inspection within thirty (30) days after Landlord notifies Tenant that such books and records are available for Tenant to inspect. Failure by Tenant to request and commence an audit of Operating Costs or Real Property Taxes in accordance with the provisions of this Paragraph 5.02D, shall constitute Tenant’s approval of the Operating Costs and Real Property Taxes covered by such Operating Statement. In the event the results of the audit which are agreed upon by Landlord and Tenant disclose that Tenant has underpaid Operating Costs and/or Real Property Taxes, Tenant shall pay such

11


 

difference as Additional Rent within thirty (30) days after such agreement. In the event the agreed upon results of the audit disclose that Tenant has overpaid Operating Costs and/or Real Property Taxes, Tenant shall receive a credit in the amount of such difference against the next succeeding installment(s) of Rent, or, if the Lease Term has expired, Landlord shall refund such amount within thirty (30) days after such agreement. If Landlord and Tenant fail to agree upon the results of the audit, the matter shall be submitted to arbitration. The arbitration shall take place in the general metropolitan area where the Property is located by a panel of three (3) arbitrators, one (1) of whom is an unaffiliated person selected by Landlord, the second is an unaffiliated person selected by Tenant and the third is selected by the two (2) designated arbitrators. Each party shall have fifteen (15) days after the notice of the intent to arbitrate to designate their arbitrator and the arbitrators selected shall have ten (10) days to designate the third arbitrator. A hearing and the resulting decision must take place within forty-five (45) days of the appointment of the third arbitrator. Notwithstanding anything to the contrary contained in the foregoing, if Tenant was overbilled for either of Real Property Taxes or Operating Costs by more than six percent (6%) thereof (considering each of Real Property Taxes and Operating Costs separately), then: (x) Tenant shall be given a new opportunity, with respect to the two (2) years preceding the calendar year with respect to which Tenant has audited Landlord’s books and records, to review the books and records for and take exception to the items of Real Property Taxes and/or Operating Costs (as the case may be) for which Tenant was overbilled to the extent that such Real Property Taxes and/or Operating Costs were not previously audited by Tenant, and Tenant shall only have sixty (60) days from the dates the books and records for the Operating Costs for such two (2) preceding years are again made available to Tenant within which to commence its review of such books and records; (y) Landlord shall pay the reasonable costs of Tenant’s accountant/auditor with respect to the applicable Operating Costs or Real Property Taxes, as the case may be; and (z) Landlord shall bear the entire cost of any arbitration described above relative to such Operating Costs or Real Property Taxes. If Tenant was overbilled for either of Real Property Taxes or Operating Costs as described above which Tenant elects to audit hereunder, but was not overbilled by more than six percent (6%) thereof, then each party shall pay the costs of any third party accountant/auditor that such party engaged in connection with such audit, each party shall pay the costs of the arbitrator selected by such party, and the costs of the third arbitrator shall be split equally between Tenant and Landlord. If Tenant was not overbilled for either Real Property Taxes or Operating Costs as described above which Tenant elects to audit hereunder, Tenant shall pay shall pay the costs of any third party accountant/auditor that either party engaged with respect to the applicable Operating Costs or Real Property Taxes, as the case may be, and Tenant shall bear the entire cost of any arbitration described above relative to such Operating Costs or Real Property Taxes. Any payment or reimbursement to be made by Landlord to Tenant pursuant to this Section 5.02D shall, if Tenant so requests in writing, be credited against the next installment(s) of Rent becoming due hereunder (rather than being paid to Tenant).

                    E. The terms of this Section 5.02 shall survive the termination of this Lease; provided , that in no event shall Landlord have the right to request or require any reconciliation or true-up of Operating Costs (or payment of any additional Operating Costs) after December 31 of the calendar year in which the Operating Statement disclosing the Operating Costs for the year in which this Lease expires or terminates is delivered (or required to be delivered) to Tenant.

     5.03 Taxes .

                    A. “Real Property Taxes” mean the following, to the extent allocable to the Property, and to the extent that the same accrue with respect to the Property during the Lease Term: (i) any real property tax, commercial rental tax, levy, charge, assessment, penalty or tax imposed by any taxing authority against the Property (except that all assessments shall be treated as payable over the longest permitted period for payment thereof but Tenant shall pay any interest component payable as a result of paying such assessments in installments); (ii) any tax or fee on Landlord’s right to receive, or the receipt of, rent or income from the Property or against Landlord’s business of leasing the Property (but only to the extent that such tax or fee is a substitute for real estate taxes allocable to the Property); provided that Rent received from Tenant shall be treated as the only rent and other income received by Landlord, (iii) any tax or charge for fire protection, streets, sidewalks, road maintenance, refuse or other services provided to the Property by any governmental agency; (iv) any charge or fee replacing, substituting for, or in addition to any tax previously included within the definition of Real Property Tax; and (v) the Landlord’s actual, reasonable cost of any tax protest relating to any of the above provided that such protest is done at the request or with the approval of Tenant. Real Property Taxes do not, however, include: (a) Landlord’s federal, state or local income, franchise, net worth, inheritance or estate taxes, (b) excess profits taxes, gift taxes, capital stock taxes, transfer taxes, mortgage or intangible taxes or fees, (c) fines, penalties and interest due to the delinquent payment by Landlord of any tax or assessment comprising Real Property Taxes, so long as Tenant timely (i.e., within any notice and cure periods applicable thereto) paid to Landlord its share of Real Property Taxes (subject to the terms of the next sentence), or (d) other taxes to the extent applicable to Landlord’s general or net income (as opposed to taxes specific to rents, receipts or income attributable to ownership of or operations solely at the Property), net worth or capital. To the extent that (x) Tenant shall fail to timely pay its share of any installment of Real Property Taxes (i.e., beyond any notice and cure periods applicable thereto) as required under this Lease, (y) as a result thereof, Landlord fails to pay such installment of Real Property Taxes when due, and (z) such failure by Landlord to pay such Real Property Taxes results in the imposition of fines, penalties or interest by the relevant taxing authority upon Landlord, then Landlord may include such fines, penalties and interest in “Real Property Taxes” for purposes hereof; provided , that, in such event, notwithstanding anything to the contrary contained in this Lease, Landlord shall not have the right to charge Tenant any additional late fee, interest, charge or similar expense with respect to Tenant’s failure to have timely paid such Real Property Taxes. For purposes of this Lease, “Real Property Taxes” for any calendar year or other period shall be deemed to be the Real Property Taxes which

12


 

accrue with respect to such calendar year or other period, regardless of the time which such Real Property Taxes are paid or required to be paid (i.e., determined on an “accrual basis”). Landlord represents and warrants that the Property consists of its own independent tax parcels for purposes of Real Property Taxes, and that no property other than the Property is included in such tax parcels.

                    B. Tenant shall pay to Landlord the Real Property Taxes for the Lease Term. Notwithstanding the foregoing, Tenant shall have the right, at Tenant’s sole election, to pay any Real Property Taxes directly to the taxing authority assessing the same (rather than to Landlord), in which event Tenant shall, if Landlord so requests, provide Landlord with reasonable evidence that such Real Property Taxes have been paid. In the event that Tenant has paid to Landlord more than its share of such actual Real Property Taxes, the amount of such difference shall be credited against Tenant’s payment of Rent next due. If the Lease Term is expired then Landlord shall promptly refund any overpayment to Tenant. Landlord shall pay all Real Property Taxes (and all other taxes and assessments which are applicable to the Property) as and when due, without delinquency.

                    C. Personal Property Taxes: Tenant will pay all taxes charged against trade fixtures, furnishing, equipment or any other personal property belonging to Tenant in the Premises by the date that such taxes are due. Tenant will use reasonable efforts to cause its personal property taxes billed separately from the Property.

                    D. Landlord shall provide the bill for each installment of Real Property Taxes to Tenant at least forty-five (45) days prior to when due, or as soon thereafter as Landlord has received such bill. If Tenant receives such bill at least forty-five (45) days prior to when due, Tenant shall pay the tax bill at least thirty (30) days prior to when due, but in all cases, provided that Tenant has received the tax bill, Tenant shall pay the tax bill prior to when due. Tenant shall have the right to contest Real Property Taxes at its sole cost and expense, but in no event shall any Real Property Taxes be permitted to go delinquent or to tax foreclosure sale by reason of any such contest undertaken by Tenant. If requested in writing by Landlord, Tenant shall notify Landlord, within ten (10) Business Days after receipt of such request from Landlord, whether Tenant intends to contest any installment of Real Property Taxes, and if Tenant does not notify Landlord that Tenant intends to contest the same, Landlord shall have the right to contest the applicable Real Property Taxes. Landlord and Tenant shall use reasonable efforts to coordinate any tax contests.

                    E. If Real Property Taxes paid during any calendar year shall be refunded to Landlord in whole or in part for any reason whatsoever, then Landlord shall refund to Tenant the amount of such refund of such refund (allocated in the case of special assessments to the applicable portion of the Term of this Lease) within thirty (30) days after Landlord receives such refund, or, if during the Lease Term of this Lease, credit such refund to Tenant against the next installments of Rent becoming due hereunder. To the extent the final amount of Real Property Taxes is not known until after the Lease Term, Tenant shall pay any amount thereof owed to Landlord pursuant to this Section 5.03 within thirty (30) days after Tenant receives an invoice therefore from Landlord (subject to the terms of Section 5.03F below), or Landlord shall pay any amount thereof owed to Tenant pursuant to this Section 5.03 within thirty (30) days after Landlord received the applicable tax bill or bills (as applicable).

                    F. The terms of this Section 5.03 shall survive the termination of this Lease; provided , that in no event shall Landlord have the right to request or require any reconciliation or true-up of Real Property Taxes (or payment of any additional Real Property Taxes) more than six (6) calendar months after the date on which the Lease Term expires or sooner terminates.

     5.04 No Additional Rent Prior to Lease Commencement Date . Notwithstanding anything to the contrary contained herein, in no event shall Tenant have any duty or obligation to pay any Additional Rent for Real Property Taxes or Operating Costs, or any other amounts (except as expressly provided herein), with respect to any period prior to the Lease Commencement Date, notwithstanding any use or occupancy of the Premises or Property prior to the Lease Commencement Date.

     5.05 Landlord Estimates . Landlor


 
SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)


Try our advanced search >>
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates
Email:
This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more