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
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Page
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LEASE
TERMS
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1
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DEMISE AND
POSSESSION; CONSTRUCTION OF PREMISES
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3
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BASE MONTHLY
RENT; ALLOWANCES
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7
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COMMON
AREAS
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9
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ADDITIONAL
RENT
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10
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SECURITY
DEPOSIT
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13
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USE OF
PREMISES: QUIET CONDUCT
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14
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PARKING
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15
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UTILITIES
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15
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ALTERATIONS,
MECHANIC’S LIENS. RETURN CONDITION
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16
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FIRE INSURANCE:
HAZARDS AND LIABILITY INSURANCE
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17
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INDEMNIFICATION
AND WAIVER OF CLAIMS
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18
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REPAIRS
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19
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SIGNS, AND
LANDSCAPING
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20
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ENTRY BY
LANDLORD
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20
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ABANDONMENT
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20
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DESTRUCTION
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20
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ASSIGNMENT,
SUBLETTING AND TRANSFERS OF OWNERSHIP
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21
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BREACH BY
TENANT
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21
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REMEDIES OF
LANDLORD
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22
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SURRENDER OF
LEASE NOT MERGER
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24
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ATTORNEYS
FEES/COLLECTION CHARGES
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24
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CONDEMNATION
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24
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RULES AND
REGULATIONS
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24
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ESTOPPEL
CERTIFICATE
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24
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SALE BY
LANDLORD
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25
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NOTICES
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25
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WAIVER
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25
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HOLDOVER
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25
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DEFAULT OF
LANDLORD/LIMITATION OF LIABILITY
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SUBORDINATION
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26
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DEPOSIT
AGREEMENT
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26
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GOVERNING
LAW
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26
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NEGOTIATED
TERMS
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26
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SEVERABILITY
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27
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BROKERS
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27
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QUIET
POSSESSION
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27
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-i-
TABLE OF CONTENTS
(continued)
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Page
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MISCELLANEOUS
PROVISIONS
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27
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CHANGE
ORDERS
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28
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SPECIAL
PROVISIONS
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28
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OPTIONS TO
EXTEND LEASE TERM
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28
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RIGHT OF FIRST
OFFER ON ADJACENT BUILDING SITE
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29
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PURCHASE
OPTION
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30
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UNTENANTABILITY
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33
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MEMORANDUM OF
LEASE
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-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:
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Month(s)
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Base Rent Per
square foot of Rentable Area in the Premises Per Month
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$0.00
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$0.375
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$0.425
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$0.481
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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.
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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;
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(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:
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$2,000 per day
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$5,000 per day
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$10,000 per day
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(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:
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$1,000
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per day
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$2,000
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per day
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$5,000
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per day
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$10,000
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per day
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(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
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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
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