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<PAGE>
Exhibit 10(A)
LEASE
BELTWAY BUSINESS PARK WAREHOUSE NO. 2, LLC,
A NEVADA LIMITED LIABILITY COMPANY,
AS LANDLORD,
AND
NEVADA POWER COMPANY,
A NEVADA CORPORATION,
AS TENANT
7155 Lindell Road
Las Vegas, Nevada
Nevada Power Company
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE ONE BASIC
TERMS.......................................................................
1
ARTICLE TWO LEASE
TERM........................................................................
4
ARTICLE THREE BASE
RENT.........................................................................
7
ARTICLE FOUR OTHER CHARGES PAYABLE BY
TENANT................................................... 8
ARTICLE FIVE USE OF
PROPERTY...................................................................
16
ARTICLE SIX CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND
ALTERATIONS....................... 23
ARTICLE SEVEN DAMAGE OR
DESTRUCTION.............................................................
26
ARTICLE EIGHT
CONDEMNATION......................................................................
28
ARTICLE NINE ASSIGNMENT AND
SUBLETTING.........................................................
28
ARTICLE TEN DEFAULTS;
REMEDIES................................................................
32
ARTICLE ELEVEN PROTECTION OF
LENDERS.............................................................
34
ARTICLE TWELVE LEGAL
COSTS.......................................................................
35
ARTICLE THIRTEEN
BROKERS...........................................................................
36
ARTICLE FOURTEEN BUILDING SHELL AND TENANT
IMPROVEMENTS............................................ 36
ARTICLE FIFTEEN TELECOMMUNICATIONS
SERVICES.......................................................
40
ARTICLE SIXTEEN MISCELLANEOUS
PROVISIONS..........................................................
40
ARTICLE SEVENTEEN MASTER
LEASE......................................................................
44
ARTICLE EIGHTEEN DECLARATION OF COVENANTS, CONDITIONS,
RESTRICTIONS AND RECIPROCAL EASEMENTS....... 46
ARTICLE NINETEEN NO OPTION OR
OFFER................................................................
46
ARTICLE TWENTY CONDITION
SUBSEQUENT..............................................................
46
</TABLE>
EXHIBITS
A DEPICTION OR DESCRIPTION OF THE PROPERTY
B SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
[CONSTRUCTION
LENDER]
B-1 SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
[PERMANENT LENDER]
C ESTOPPEL CERTIFICATE
D HAZARDOUS MATERIALS
E CONFIRMATION OF INITIAL LEASE TERM AND AMENDMENT TO LEASE
F MEMORANDUM OF LEASE
G MASTER LEASE
H BASE BUILDING SHELL PLANS
I MODIFIED BUILDING SHELL PLANS
J TENANT'S LIMITED RESTORATION OBLIGATION
K FORM OF TENANT IMPROVEMENT CONTRACT
L MASTER LANDLORD RNDA
7155 Lindell Road
Las Vegas, Nevada
Nevada Power Company
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INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
TERM PAGE
<S> <C>
ADDITIONAL
LAND......................................................... 2
ADDITIONAL
RENT......................................................... 8
APPLICABLE
LAWS.........................................................
16
ARCHITECT...............................................................
27
BASE BUILDING SHELL
IMPROVEMENTS........................................ 37
BASE BUILDING SHELL
PLANS............................................... 36
BASE
RENT...............................................................
3
BROKERS.................................................................
36
BUILDING................................................................
2
BUILDING SHELL
IMPROVEMENTS............................................. 36
CAM SERVICES
LIST....................................................... 15
CHANGE
ORDER............................................................
38
CHANGES.................................................................
38
COMMON AREA
COSTS....................................................... 14
COMMON
AREAS............................................................
13
CONDEMNATION............................................................
28
CONSENT.................................................................
30
CONSTRUCTION
DRAWINGS................................................... 37
CONSULTANT..............................................................
20
CONTROL.................................................................
30
COUNTY..................................................................
44, 45
DECLARATION.............................................................
46
ENVIRONMENTAL
DAMAGES................................................... 17
ENVIRONMENTAL
REQUIREMENTS.............................................. 17
ESTIMATED LEASE COMMENCEMENT
DATE....................................... 2
ESTIMATED SUBSTANTIAL COMPLETION
DATE................................... 2
EVENT OF
DEFAULT........................................................
32
EXTENSIONS..............................................................
5
FAIR RENTAL
VALUE....................................................... 7
FINAL
PLANS.............................................................
37
FORCE
MAJEURE...........................................................
42
GOVERNMENTAL
AGENCY..................................................... 18
HAZARDOUS
MATERIAL......................................................
16
IMPOSITION..............................................................
25
LANDLORD................................................................
1, 22, 41
LANDLORD'S
CONTRACTOR...................................................
25
LANDLORD'S
NOTICE.......................................................
37
LEASE COMMENCEMENT
DATE................................................. 4
LEASE EXPIRATION
DATE................................................... 4
LEASE
MEMORANDUM........................................................
42
LEASE
MONTH.............................................................
7
LEASE
TERM..............................................................
4
LEASE
YEAR..............................................................
8
LEASEHOLD TITLE
POLICY.................................................. 45
MASTER
LANDLORD.........................................................
44, 45
MASTER
LEASE............................................................
44
MODIFIED BUILDING SHELL
COSTS........................................... 39
NOTICE AND
ACKNOWLEDGEMENT..............................................
24
NOTICES.................................................................
41
NRS.....................................................................
8
OFAC....................................................................
43, 44
OPTIONS.................................................................
5
PERMITTED
PURCHASER.....................................................
30
</TABLE>
7155 Lindell Road
Las Vegas, Nevada
Nevada Power Company
ii
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<TABLE>
<S> <C>
PERMITTED
USES.............................................................
2
POSTED SECURITY
REQUIREMENTS............................................... 24
PRO RATA
SHARE.............................................................
14
PROJECT....................................................................
2
PROPERTY...................................................................
2
REAL PROPERTY
TAX.......................................................... 8
RECORDS....................................................................
38
REDETERMINATION
REQUEST.................................................... 7
RENT.......................................................................
8
RENTAL ADJUSTMENT
DATE..................................................... 7
RENTAL ADJUSTMENT
DATES.................................................... 6
RESTORATION................................................................
27
SIGN.......................................................................
21
STRUCTURAL AND SAFETY
ALTERATIONS.......................................... 25, 26
SUBJECT
SPACE..............................................................
28
SUBLEASE...................................................................
30
SUBTENANT..................................................................
30
TAX
CONTEST................................................................
9
TELECOMMUNICATIONS
EQUIPMENT............................................... 40
TENANT.....................................................................
1, 22
TENANT
AFFILIATE...........................................................
30
TENANT
GROUP...............................................................
18
TENANT
IMPROVEMENTS........................................................
37
TENANT'S
ALTERATIONS.......................................................
24
TENANT'S
COSTS.............................................................
38
TENANT'S
OBJECTION.........................................................
37
TENANT'S REQUEST AND ACCEPTANCE
NOTICE..................................... 38
TENANT'S
SHARE.............................................................
39
TENANT'S TELECOMMUNICATIONS
EQUIPMENT...................................... 40
TERMINATION
OPTION.........................................................
46
TRANSFER
NOTICE............................................................
28
TRANSFER
PREMIUM...........................................................
29
TRANSFEREE.................................................................
28
TRANSFERS..................................................................
28
</TABLE>
7155 Lindell Road
Las Vegas, Nevada
Nevada Power Company
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<PAGE>
LEASE
ARTICLE ONE BASIC TERMS
This Article One contains the Basic Terms of this Lease between
Landlord
and Tenant named below. Other Articles, Sections and Paragraphs
of this Lease
referred to in this Article One explain and define the Basic
Terms and are to be
read in conjunction with the Basic Terms.
Section 1.01. DATE OF LEASE: December 11, 2006.
Section 1.02. LANDLORD: BELTWAY BUSINESS PARK WAREHOUSE NO. 2,
LLC, a
Nevada limited liability company.
Address of Landlord: c/o Majestic Realty Co.
13191 Crossroads Parkway North, Sixth Floor
City of Industry, California 91746
Attention: Property Management
[Telephone: (562) 692-9581]
[Fax: (562) 695-0441]
With a copy of any notices to:
c/o Majestic Realty Co.
4155 W. Russell Road, Suite C
Las Vegas, Nevada 89118
Attention: Property Manager
[Telephone: (702) 896-5564]
[Fax: (702) 896-4838]
MASTER LANDLORD: (see Article Seventeen) County of Clark, a
political subdivision of the State of Nevada.
Section 1.03. TENANT: NEVADA POWER COMPANY, a Nevada
corporation.
Address of Tenant: Nevada Power Company
Administrative Services
6226 W. Sahara Ave.
Las Vegas, Nevada 89146
Attention: Director of Administrative Services
[Telephone: (702) 367-5636]
[Fax: (702) 367-5095]
With copies of any notices to:
Nevada Power Company
Legal Department
6226 W. Sahara Ave.
Las Vegas, Nevada 89146
Attention: General Counsel
[Telephone: (702) 367-5000]
[Fax: (702) 227-2069]
and:
7155 Lindell Road
Las Vegas, Nevada
Nevada Power Company
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<PAGE>
K. Michael Leavitt
Leavitt, Sully & Rivers
601 E. Bridger Ave.
Las Vegas, NV 89101
[Fax: (702) 382-2892]
Section 1.04. PROPERTY: The Property (defined below) is part of
Landlord's
multi-tenant real property development which will, when
completed, consist of
two (2) buildings having a total of approximately 540,000 square
feet of
rentable space and described or depicted on the attached Exhibit
"A" (the
"PROJECT"). The Project includes the land, the buildings and all
other
improvements located on the land, and the Common Areas and
Common Area
Improvements (as defined in Section 4.05(a) below). The property
that is the
subject of this Lease is that part of the Project known as
Building 5 (which
will include approximately 288,000 square feet of space) (the
"BUILDING"), the
real property upon which the Building and certain Common Areas
are located
("BUILDING PREMISES") consisting of approximately 16.00 acres of
land generally
located at 7155 Lindell Road, Las Vegas, Nevada, plus
approximately 15.94 acres
of land adjacent to the Building Premises (the "ADDITIONAL
LAND"), all as shown
on 4 7155 Lindell Road Las Vegas, Nevada Nevada Power Company
DMWEST #6375379
v25 Exhibit "A" attached hereto (collectively, the "PROPERTY").
Although some
Common Area Improvements will be physically located on the
Building Premises, as
used in this Lease, neither the defined term "Building" nor the
defined term
"Property" is intended to include those improvements included
within the defined
term "Common Area Improvements," unless otherwise expressly
provided. The square
footage figures for the Project and the Property, as recited in
this Section
1.04, are approximate. No adjustment will be made to the Base
Rent or any other
amounts payable by Tenant under this Lease (or to any other
provisions of this
Lease) if the actual square footage, however measured, is more
or less than the
square footage recited.
Section 1.05. TERM.
(a) LEASE TERM: Twenty (20) years, subject to Sections 2.05
and
3.01, commencing on the Lease Commencement Date.
(b) LEASE COMMENCEMENT DATE: The Lease Commencement Date (as
defined
in Section 2.01 below) of the initial Lease Term shall be the
one hundred
eightieth (180th) day following Substantial Completion (as
defined in Article
Fourteen below) of the Building Shell Improvements (as defined
in Article
Fourteen below). The estimated date of Substantial Completion of
the Building
Shell Improvements is February 1, 2007 (the "ESTIMATED
SUBSTANTIAL COMPLETION
DATE"), and the Lease Commencement Date is estimated to be
August 1, 2007 (the
"ESTIMATED LEASE COMMENCEMENT DATE"). Upon determination of the
actual date of
Substantial Completion of the Building Shell Improvements and
the actual Lease
Commencement Date, Landlord and Tenant shall promptly execute a
Confirmation of
Initial Lease Term and Amendment to Lease, substantially in the
form of that
attached as Exhibit "E" to this Lease.
(c) LEASE EXPIRATION DATE: Subject to Section 2.05, the
expiration
date of the initial Lease Term shall be the last day of the two
hundred fortieth
(240th) calendar month following the month in which the Lease
Commencement Date
falls, unless the Lease Commencement Date is the first day of a
calendar month,
in which event the expiration date shall be the last day of the
two hundred
thirty-ninth (239th) calendar month following the month in which
the Lease
Commencement date falls.
Section 1.06. PERMITTED USES: Office uses; employee fitness
center;
storage, warehousing and distribution uses, including, but not
limited to
storage and distribution of transformers; design and engineering
uses; employee
training; fabrication, assembly and manufacture of items, parts,
equipment and
apparatus for use by Tenant, its affiliates and/or permitted
Subtenants (as
defined in Section 9.08) in the course of their business, but
not for sale to
third parties except with the prior written consent of Landlord;
communication,
telecommunication and technological activities and services;
call center; credit
union office and services; food and drink preparation, service
and sale (but not
for commercial purposes with the general public), including
cafeteria and
concession sales; cleaning, maintenance, repair and restoration
of personal
property, including equipment and apparatus (but not for
commercial purposes
with the public or third parties except with the prior written
consent of
Landlord); parking, storage, cleaning, fueling, maintenance,
repair and
restoration of vehicles (but not for commercial purposes with
the public or
third parties except with the prior written consent of Landlord,
and with such
uses to be conducted primarily on the Additional Land);
demonstration energy
conservation projects, including solar panels and wind
7155 Lindell Road
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Nevada Power Company
2
<PAGE>
turbines; public meeting rooms for community organizations; uses
reasonably
related to all of the foregoing; and any other uses approved in
advance, in
writing, by Landlord. Consistent with the above, if in the
course of consenting
to a proposed assignment or subletting requiring Landlord's
consent under
Article Nine below, Landlord expressly approves a different use
of all or a
portion of the Property, then such different use (and any
ancillary office use)
shall also constitute a Permitted Use under this Lease. Subject
to any
restrictions and requirements of Applicable Laws (as defined in
Section 5.02
below). Tenant's outside storage yard on the westerly portion of
the Additional
Land shall have block walls on the north, west and south
boundaries. Any
permanent outside storage of items on other portions of the
Property shall be
screened from view from adjacent public roadways, as may be
reasonably required
by Landlord. Notwithstanding any language to the contrary in
this Section 1.06,
no such Permitted Use shall (i) create obnoxious (as to a
reasonable person)
odors or noise, (ii) include storage of tire or other products
made with like
materials (except for storage of tires on the Additional Land
for future use on
vehicles of Tenant and permitted Subtenants, and temporary
storage of used tires
on the Additional Land preceding offsite disposition), (iii)
include storage of
explosives, or (iv) involve fabrication or manufacturing, except
as specifically
allowed above in this Section 1.06.
Section 1.07. SECURITY DEPOSIT: None.
Section 1.08. TENANT'S GUARANTOR: None.
Section 1.09. BROKERS: (See Article Thirteen)
Landlord's Broker: Majestic Realty Co.
4155 W. Russell Road, Suite C
Las Vegas, Nevada 89118
and
Valley Realty, LLC
7181 Amigo Street, Suite 100
Las Vegas, Nevada 89119
Tenant's Broker: Commerce CRG of Nevada, LLC
3930 Howard Hughes Parkway, Suite 250
Las Vegas, Nevada 89109
Section 1.10. RENT AND OTHER CHARGES PAYABLE BY TENANT: (Subject
to the
provisions of Section 3.01).
(a) BASE RENT:
Lease Term Monthly Installment of Base Rent
---------- --------------------------------
Partial calendar month (if any) $250,000.00 (prorated)
at commencement of Lease Term
Lease Months 1 through 3 $125,000.00
Lease Months 4 through 24 $250,000.00
Lease Months 25 through 48 $265,000.00
Lease Months 49 through 72 $280,900.00
Lease Months 73 through 96 $297,754.00
Lease Months 97 through 120 $315,619.24
Lease Months 121 through 144 $334,556.39
Lease Months 145 through 168 $354,629.78
Lease Months 169 through 192 $375,907.56
Lease Months 193 through 216 $398,462.02
Lease Months 217 through 240 $422,369.74
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Nevada Power Company
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<PAGE>
(b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (see
Section
4.02 below); (ii) Utilities (see Section 4.03 below); and (iii)
Tenant's Pro
Rata Share--which shall be fifty percent (50%)--of Common Area
Costs (see
Section 4.05(e) below).
ARTICLE TWO LEASE TERM
Section 2.01. LEASE OF PROPERTY FOR LEASE TERM. The term of this
Lease
(the "LEASE TERM") shall be as set forth in Section 1.05(a)
above, shall
commence on the date (the "LEASE COMMENCEMENT DATE") set forth
in Section
1.05(b) above, and shall terminate on the date (the "LEASE
EXPIRATION DATE") set
forth in Section 1.05(c) above, unless sooner terminated or
extended as
expressly provided in this Lease. The terms and provisions of
this Lease shall
be effective as of the date of this Lease, except for Section
1.10, Article
Three (save and except Section 3.03), Article Four (save and
except for Section
4.04(a) with respect to, but only with respect to, acts and
omissions of Tenant,
its agents, employees, contractors or other persons under the
supervision and
control of Tenant while on or about the Property), Section 5.02,
Section 5.03
(save and except for Section 5.03.11), Section 5.05.1, Section
6.04 and Article
Seven. Those excepted terms and provisions of this Lease not
becoming effective
as of the date of this Lease shall be and become effective on
the Lease
Commencement Date unless they become effective earlier pursuant
to the
provisions of Section 2.03 below.
Section 2.02. DELAY IN COMMENCEMENT. Landlord shall not be
liable to
Tenant if Landlord does not deliver possession of the Property
to Tenant on the
Estimated Substantial Completion Date. Landlord's non-delivery
of the Property
to Tenant on that date shall not affect this Lease or the
obligations of Tenant
under this Lease, except that the Lease Commencement Date shall
be delayed until
the one hundred eightieth (180th) day following Substantial
Completion of the
Building Shell Improvements (unless such delay in Substantial
Completion of the
Building Shell Improvements is the result of a Tenant Delay, as
defined in
Section 14.02 below, in which event the 180-day period shall be
reduced for a
period equal to the period of Tenant Delay). If Substantial
Completion of the
Building Shell Improvements does not occur within one hundred
eighty (180) days
following the Estimated Substantial Completion Date (extended
for any periods of
Tenant Delay and any Force Majeure Delay as defined in Section
16.12 below),
Tenant may elect to cancel and terminate this Lease by giving
written notice to
Landlord within fifteen (15) business days after the one hundred
eighty
(180)-day period (as it may have been extended) ends. If Tenant
gives such
notice, this Lease shall be canceled and terminated, and neither
Landlord nor
Tenant shall have any further obligations to the other,
excepting only those
obligations which have accrued prior to or which expressly
survive termination
of this Lease. If Tenant fails to timely give such notice, the
right to cancel
and terminate this Lease shall expire, and the Lease Term shall
commence on the
one hundred eightieth (180th) day following Substantial
Completion of the
Building Shell Improvements. Consistent with the terms of
Section 1.05(b) above,
upon determination of the date of Substantial Completion of the
Building Shell
Improvements and the Lease Commencement Date, Landlord and
Tenant shall promptly
execute an amendment to this Lease setting forth the Lease
Commencement Date and
Lease Expiration Date, substantially in the form attached as
Exhibit "E" to this
Lease. Failure to execute such amendment shall not affect the
actual Lease
Commencement Date and Lease Expiration Date. The failure of
Tenant to take
possession of or to occupy the Property shall not serve to
relieve Tenant of any
obligations arising on the Lease Commencement Date, and shall
not delay the
payment of rent by Tenant.
Section 2.03. EARLY ENTRY AND OCCUPANCY. Prior to Substantial
Completion
of the Building Shell Improvements, Tenant shall have the right
of early
occupancy of the Additional Land, subject to (a) full execution
of this Lease,
(b) Landlord's receipt of the sum of One Hundred Twenty-five
Thousand Dollars
($125,000.00) for Base Rent for Lease Month 1, (c) Landlord's
and Tenant's
receipt of any necessary governmental permits, approvals,
certificates, or
consents, (d) Landlord's prior receipt of Tenant's proposed
schedule describing
the timing and purposes of Tenant's early occupancy, and (e) all
of the terms
and conditions of this Lease then becoming effective, with the
exception of
Section 1.10, Article Three (save and except Section 3.03),
Article Four (save
and except for Section 4.04(a) with respect to, but only with
respect to, acts
and omissions of Tenant, its agent, employees, contractors or
other persons
under the supervision and control of Tenant while on or about
the Property),
Section 5.02, Section 5.03 (save and except for Section 5.03.11
and except with
respect to acts and omissions of Tenant, its agents, employees,
contractors or
other parties under the supervision and control of Tenant while
on or about the
Property), Section 5.05.1 (except with respect to acts and
omissions of Tenant,
its agents, employees, contractors or other parties under the
supervision and
control of Tenant while on or about the Property), Section 6.04
and Article
Seven. Those excepted terms and provisions of this Lease not
becoming effective
for purposes of the above early
7155 Lindell Road
Las Vegas, Nevada
Nevada Power Company
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<PAGE>
entry and occupancy period shall be and become effective on the
Lease
Commencement Date. In addition to early occupancy of the
Additional Land, Tenant
and Tenant's architects and other design representatives shall
have the right
during the course of construction of the Building Shell
Improvements to enter
upon the Building Premises for review and inspection
purposes.
Landlord and Tenant shall together review Tenant's proposed
schedule describing
the timing and purposes of Tenant's early occupancy, and
Landlord and Tenant
shall work in good faith with each other to limit interference
with each other's
activities during any period of early occupancy. Such early
occupancy shall be
for the purpose of preparing the Property for use by Tenant and
any permitted
Subtenants, including the construction of the Tenant
Improvements (defined in
Article Fourteen below), if Tenant elects to do so pursuant to
Section 14.04
below, and the installation of improvements and equipment and
storage of
inventory and other personal property of Tenant and any
permitted Subtenants.
During such period, Tenant shall assume all risk of loss to
Tenant's equipment,
products, and other personal property. Tenant's entry upon the
Building Premises
during this period shall not interfere with construction of the
Building Shell
Improvements by Landlord's contractor, and in the event it does
so interfere,
Tenant shall cease all such activity on the Building Premises
until Substantial
Completion of the Building Shell Improvements.
Section 2.04. HOLDING OVER. If Tenant holds over after the
expiration of
the Lease Term, with or without the express or implied consent
of Landlord, such
tenancy shall be from month-to-month only, and shall not
constitute a renewal
hereof or an extension for any further term, and in such case
Base Rent shall be
payable at a monthly rate equal to one hundred twenty percent
(120%) of the Base
Rent applicable immediately before the expiration of the Lease
Term. Such
month-to-month tenancy shall be subject to every other term,
covenant and
agreement contained herein. Nothing contained in this Section
2.04 shall be
construed as consent by Landlord to any holding over by Tenant,
and Landlord
expressly reserves the right to require Tenant to surrender
possession of the
Property to Landlord as provided in this Lease upon the
expiration or other
termination of this Lease. The provisions of this Section 2.04
shall not be
deemed to limit or constitute a waiver of any other rights or
remedies of
Landlord provided herein or at law. If Tenant fails to surrender
the Property
upon the termination or expiration of this Lease, in addition to
any other
liabilities to Landlord accruing therefrom, Tenant shall
protect, defend,
indemnify and hold Landlord harmless from all loss, costs
(including reasonable
attorneys' fees) and liability resulting from such failure,
including without
limiting the generality of the foregoing, any claims made by any
succeeding
tenant founded upon such failure to surrender, and any lost
profits to Landlord
resulting therefrom; provided, however, that notwithstanding the
foregoing
provisions of this sentence and any language to the contrary in
this Section
2.04, Tenant shall not be obligated with respect to the
foregoing provisions of
this sentence and shall not be liable for any consequential
damages unless (i)
Landlord enters into a written lease with a third-party,
unrelated, and
unaffiliated tenant requiring delivery of the Property upon or
following the
Lease Expiration Date, (ii) Landlord gives Tenant written notice
of having
entered into that lease and a copy of the lease language
requiring delivery of
the Property and the required date of delivery and (iii) Tenant
fails to
surrender the Property by the later to occur of (a) the Lease
Expiration Date or
(b) the one hundred eightieth (180th) day following Tenant's
receipt of that
written notice.
Section 2.05. OPTIONS TO EXTEND LEASE TERM.
(a) Grant of Options. Landlord hereby grants to Tenant three
(3)
options (the "OPTIONS") to extend the Lease Term for additional
periods of ten
(10) years each (the "EXTENSIONS"), on the same terms and
conditions as set
forth in this Lease, but at Base Rent as set forth below and
without any
additional Options other than those granted in this Section
2.05; provided,
however, that the final Extension shall expire on the earlier of
ten (10) years
following the commencement date of such Extension or the
expiration date (as it
may be extended) of the Master Lease (defined below). In the
event of the
exercise of one or more Options by Tenant, the Lease Expiration
Date shall be
the last day of the last Extension for which the Option is
exercised. Each
Option shall be exercised only by written notice delivered to
Landlord not less
than two hundred seventy (270) days before the expiration of the
initial Lease
Term or the preceding Extension of the Lease Term, respectively,
and shall be
subject to the provisions of Section 2.05 (c)(1)(iv) below. If
Tenant fails to
deliver Landlord written notice of the exercise of an Option
within the
prescribed time period, such Option and any succeeding Options
shall lapse, and
there shall be no further right to extend the Lease Term. Each
Option shall be
exercisable by Tenant on the express conditions that at the time
of the exercise
(and at all times following such exercise and prior to the
commencement of the
Extension), Tenant shall not be in material default under any of
the provisions
of this Lease (beyond any applicable notice and
7155 Lindell Road
Las Vegas, Nevada
Nevada Power Company
5
<PAGE>
cure period). Following Tenant's timely and valid exercise of an
Option and the
determination of the amount of Base Rent to be paid on the
applicable FRV Rental
Adjustment Date (as defined below) (taking into consideration
the provisions of
Section 2.05 (d)(1)(iv) below), Landlord shall prepare and
Tenant shall execute
and deliver to Landlord an amendment to this Lease confirming
the term of the
Extension and the amount of Base Rent payable by Tenant during
such Extension.
(b) Time of Essence. Time is of the essence with respect to
Tenant's
exercise of the Option(s) granted in this Section 2.05.
(c) Calculation of Rent. The Base Rent during the Extension(s)
shall
be determined by a combination of the following methods:
Fair Rental Value Adjustment (Section 2.05(c)(1), below);
and
Fixed Adjustment (Section 2.05(c)(2), below).
(1) Fair Rental Value Adjustment. The Base Rent shall be
adjusted on
the first day of the first month of each Extension of the Lease
Term (the "FRV
RENTAL ADJUSTMENT DATES") to the "fair rental value" of (a) the
Base Building
Shell Improvements (as defined in Section 14.01) upon and
including the Building
Premises (exclusive of any (i) Common Area Improvements, other
than those
included in the Base Building Shell Plans and located on the
Building Premises
[but expressly excluding the ESFR System]), and (ii) any other
onsite or offsite
improvements located thereon or associated therewith, other than
those included
in the Base Building Shell Plans [as defined in Section 14.01]),
and (b) the
land comprising the Additional Land (as if vacant, and without
any buildings,
other structures or onsite or offsite improvements located
thereon or associated
therewith) (collectively, the "APPRAISED PREMISES"), determined
in the manner
that follows. The fair rental value of the Appraised Premises
shall equal the
Base Rent on the applicable FRV Rental Adjustment Date and shall
be the sum
total of (a) of the fair rental value of the Base Building Shell
Improvements
upon and including the Building Premises, as if the Building
Shell Improvements
were comprised solely and exclusively of the Base Building Shell
Improvements
and had been constructed upon the Building Premises on the
Building Shell
Substantial Completion Date as reflected in the Base Building
Shell Plans,
without any of the Building Modifications (as defined in Section
14.01),
exclusive of any (i) Common Area Improvements, other than those
included in the
Base Building Shell Plans and located on the Building Premises
(but expressly
excluding the ESFR System), and (ii) any other onsite or offsite
improvements
located thereon or associated therewith, other than those
included in the Base
Building Shell Plans, and (b) the fair rental value of the land
comprising the
Additional Land, as if vacant land, without any buildings, other
structures or
onsite or offsite improvements located thereon or associated
therewith, all
appraised in accordance with the provisions of Section
2.05(c)(1)(iii) below.
(i) Not later than two hundred fifty (250) days prior to any
applicable FRV Rental Adjustment Date, Landlord and Tenant shall
meet in an
effort to negotiate, in good faith, the fair rental value of the
Appraised
Premises as of such FRV Rental Adjustment Date. If Landlord and
Tenant have not
agreed upon the fair rental value of the Appraised Premises at
least one hundred
eighty (180) days prior to the applicable FRV Rental Adjustment
Date, the fair
rental value shall be determined by appraisal issued by a real
estate appraisal
firm of national standing in the manner that follows.
(ii) If Landlord and Tenant are not able to agree upon the
fair rental value of the Appraised Premises within the
prescribed time period,
then Landlord and Tenant shall attempt to agree in good faith
upon a single
appraiser, not later than one hundred fifty (150) days prior to
the applicable
FRV Rental Adjustment Date. If Landlord and Tenant are unable to
agree upon a
single appraiser within such time period, then Landlord and
Tenant shall each
appoint one appraiser not later than one hundred twenty (120)
days prior to the
applicable FRV Rental Adjustment Date. Within thirty (30) days
thereafter, the
two appointed appraisers shall appoint a third appraiser. If
either Landlord or
Tenant fails to appoint its appraiser within the prescribed time
period, the
single appraiser appointed shall determine the fair rental value
of the
Appraised Premises. If both parties fail to appoint appraisers
within the
prescribed time periods, then the first appraiser thereafter
selected by a party
shall determine the fair rental value of the Appraised Premises.
Each party
shall bear the cost of its own appraiser, and the parties shall
share equally
the cost of the single or third appraiser, if applicable. The
appraisers used
shall have at least five (5) years' experience in appraising
commercial/industrial real property in Clark County, Nevada. All
such appraisers
shall be Members of the Appraisal Institute. The appraisers
shall be instructed
to separately determine
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the fair rental value of each of the two components of the
Appraised Premises as
noted and described in the second sentence of the first
paragraph of this
Section 2.05(c)(1) above
(iii) For the purposes of such appraisal, the term "fair
rental value" shall mean the price that a ready and willing
tenant would pay, as
of the applicable FRV Rental Adjustment Date, as monthly rent to
a ready and
willing landlord of the Appraised Premises (subject to usual
adjustments) if
such property were exposed for lease on the open market for a
reasonable period
of time for warehouse distribution purposes as respects the Base
Building Shell
Improvements and the Building Premises, and for outside storage
and vehicle
parking purposes as respects the Additional Land. If a single
appraiser is
chosen, then such appraiser shall determine the fair rental
value of the
Appraised Premises. If two appraisers shall agree upon the fair
rental value of
the Appraised Premises, then the amount so agreed upon shall be
the fair rental
value of the Appraised Premises. Otherwise, the fair rental
value of the
Appraised Premises shall be the amount of the appraisal which is
neither the
highest nor the lowest value. Base Rent shall not be reduced
pursuant to the
provisions of this Section 2.05 (c)(1)(iii) by reason of such
determination of
fair rental value of the Appraised Premises. Landlord and Tenant
shall instruct
the appraiser(s) to complete their determination of the fair
rental value not
later than sixty (60) days prior to the applicable FRV Rental
Adjustment Date.
When the fair rental value of the Appraised Premises is
determined by appraisal
as provided above, Landlord shall deliver notice thereof to
Tenant, together
with statement setting forth the amount of Base Rent determined
therefrom. If
the fair rental value is not determined prior to the applicable
FRV Rental
Adjustment Date, then Tenant shall continue to pay to Landlord
the Base Rent
immediately prior to such Extension, until the fair rental value
is determined.
Tenant shall pay to Landlord, within ten (10) days after receipt
of Landlord's
notice, any difference between the Base Rent actually paid by
Tenant to Landlord
and the new Base Rent determined hereunder.
(iv) Notwithstanding any other provision herein to the
contrary, within one hundred twenty (120) days following receipt
by Tenant from
Landlord of the determination of the fair rental value and the
amount of the
Base Rent determined therefrom, Tenant may give Landlord written
request for
redetermination of the amount of the Base Rent ("REDETERMINATION
REQUEST"). The
Redetermination Request may be for purposes of reducing the Base
Rent from the
amount payable prior to the applicable FRV Rental Adjustment
Date. Within thirty
(30) days following Landlord's receipt of the Redetermination
Request, Landlord
and Tenant shall meet and negotiate in good faith to agree upon
a redetermined
amount of Base Rent to be paid commencing on the applicable FRV
Rental
Adjustment Date. If Landlord and Tenant agree to an adjustment,
the adjusted
amount shall be the amount of Base Rent for the applicable
period, and Tenant
shall receive credit for any overpayments. If Landlord and
Tenant are unable to
agree in writing upon an adjusted amount of Base Rent within
ninety (90) days of
Landlord's receipt of the Redetermination Request, Tenant shall
have the right
to terminate this Lease and Tenant's further rights and
obligations under this
Lease as of a date certain (the "EARLY TERMINATION DATE"), which
date shall be
not less than two (2) years following Landlord's receipt of
written notice from
Tenant that Tenant intends to terminate this Lease in accordance
with the
foregoing provisions. The Base Rent payable by Tenant to
Landlord on and after
the applicable FRV Rental Adjustment Date shall be one hundred
six percent
(106%) of the Base Rent payable immediately prior to the
applicable FRV Rental
Adjustment Date. If the Early Termination Date is more than two
(2) years
following the applicable FRV Rental Adjustment Date, the Base
Rent shall be
increased by a like amount (106% of the Base Rent then payable)
every two (2)
years thereafter.
(2) Fixed Adjustment. The Base Rent shall be increased to
the
following amounts on the following dates: on the first day of
the 25th, 49th,
73rd and 97th months of each Extension (each a "RENTAL
ADJUSTMENT DATE") by a
factor of six percent (6%) over the Base Rent payable
immediately prior to the
applicable Rental Adjustment Date.
ARTICLE THREE BASE RENT
Section 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this
Lease,
Tenant shall pay Landlord the sum of One Hundred Twenty-five
Dollars
($125,000.00) as and for the Base Rent for Lease Month 1. On the
first day of
Lease Month 3, Tenant shall pay Landlord the monthly Base Rent
for any partial
Lease Month at the beginning of the Lease Term. On the first day
of Lease Month
2 and each month during the Lease Term thereafter, Tenant shall
pay Landlord the
monthly Base Rent set forth in Section 1.10(a) above, in
advance, without
offset, deduction or prior demand except as otherwise provided
herein. The Base
Rent shall be payable at Landlord's address or at such other
place as Landlord
may designate in writing. The term "LEASE MONTH" shall
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mean each consecutive full calendar month during the Lease Term
(excluding any
partial calendar month at the inception of the Lease Term). For
purposes of this
Lease, the term "LEASE YEAR" shall mean, with respect to the
first Lease Year,
the period commencing on the Lease Commencement Date and ending
on the last day
of the twelfth (12th) calendar month following the month in
which the Lease
Commencement Date falls (unless the Lease Commencement Date
falls on the first
day of a calendar month, in which case the first Lease Year will
end on the last
day of the twelfth (12th) Lease Month), and with respect to
subsequent Lease
Years, each consecutive twelve (12) month period during the
Lease Term following
the first Lease Year. If the Lease Commencement Date is a day
other than the
first day of a calendar month, then (a) the Lease Term shall
include the number
of months stated (or the number of months included within the
number of years
stated) in Section 1.05 above, plus the partial calendar month
in which the
Lease Commencement Date falls, (b) Base Rent of $250,000.00 and
Additional Rent
for such partial month shall be prorated based on the number of
days in such
calendar month and (c) such rent shall be payable on the first
day of Lease
Month 3.
Section 3.02. APPLICATION OF PAYMENTS. Unless otherwise agreed
by Landlord
and Tenant, all payments received by Landlord from Tenant shall
be applied to
the oldest payment obligation owed by Tenant to Landlord. No
designation by
Tenant, either in a separate writing or on a check or money
order, shall modify
this Section or have any force or effect.
Section 3.03. TERMINATION; ADVANCE PAYMENTS. Upon termination of
this
Lease under Article Seven (Damage or Destruction) of this Lease,
or under
Article Eight (Condemnation) of this Lease, or any other
termination not
resulting from Tenant's default, and after Tenant has vacated
the Property in
the manner required by this Lease, Landlord shall refund or
credit to Tenant (or
Tenant's successor) any Rent, including Additional Rent, or
other advance
payments made by Tenant to Landlord, and any amounts paid for
Real Property
Taxes and insurance which apply to any time periods after
termination of this
Lease.
ARTICLE FOUR OTHER CHARGES PAYABLE BY TENANT
Section 4.01. ADDITIONAL RENT. All charges payable by Tenant
during the
Lease Term other than Base Rent are called "ADDITIONAL RENT."
Unless this Lease
provides otherwise, Tenant shall pay all Additional Rent then
due with the next
monthly installment of Base Rent. The term "rent" or "RENT"
shall mean Base Rent
and Additional Rent. Without limitation on other obligations of
Tenant that
shall survive the expiration or earlier termination of the Lease
Term, the
obligations of Tenant to pay the Additional Rent provided for in
this Article
Four shall survive the expiration or earlier termination of the
Lease Term. The
failure of Landlord to timely furnish Tenant the amount of the
Additional Rent
shall not preclude Landlord from enforcing its rights to collect
such Additional
Rent after furnishing the amount.
Section 4.02. PROPERTY TAXES.
(a) REAL PROPERTY TAXES. Tenant shall pay all Real Property
Taxes on
the Property (including any fees, taxes or assessments against,
or as a result
of, any tenant improvements installed on the Property by or for
the benefit of
Tenant) during the Lease Term. Until the Property is separately
assessed as
provided in Section 4.02(c) below, Landlord shall bill Tenant in
advance for
Tenant's share of the Real Property Taxes, and Tenant shall pay
Landlord the
amount of such Real Property Taxes quarterly prior to their due
date, as
Additional Rent. Landlord shall pay such taxes prior to such
delinquency date,
provided that Tenant has timely made such payments to Landlord.
Any penalty
caused by Tenant's failure to timely make such payments shall
also be Additional
Rent owed by Tenant immediately upon demand. When the Property
is separately
assessed as provided in Section 4.02(c) below, Tenant shall pay
all Real
Property Taxes as part of Tenant's central tax assessment, or as
otherwise
required by the applicable taxing authorities.
(b) DEFINITION OF "REAL PROPERTY TAX." "Real Property Tax" means
ad
valorem real property tax assessed against the Property and
levied pursuant to
the provisions of Nevada Revised Statutes ("NRS")
361.445-361.470, or any
successor statute, and (i) any fee, license fee, license tax,
business license
fee, commercial rental tax, levy, charge, assessment, penalty or
tax imposed by
any taxing authority against the Property; (ii) any tax on the
Landlord's right
to receive, or the receipt of, rent or income from the Property
or against
Landlord's business of leasing the Property; (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
tax imposed upon
this transaction or
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based upon a re-assessment of the Property due to a change of
ownership, as
defined by applicable law, or other transfer of all or part of
Landlord's
interest in the Property; and (v) any charge or fee replacing
any tax previously
included within the definition of Real Property Tax. "Real
Property Tax" does
not, however, include (i) Landlord's federal or state income,
franchise,
inheritance or estate taxes, or (ii) penalties imposed by any
taxing authority
against the Property due to Landlord's failure to pay such taxes
prior to
delinquency, unless such failure was due to Tenant's failure to
timely make such
payments to Landlord.
(c) JOINT ASSESSMENT; TENANT'S SHARE. Until the Property is
separately assessed, Landlord shall reasonably determine
Tenant's share of the
Real Property Taxes payable by Tenant under Section 4.02(a)
above from the
assessor's worksheets or other reasonably available information.
As used in this
Section 4.02, the Real Property Taxes for the Property shall be
(i) Tenant's Pro
Rata Share of the Real Property Taxes for the Project exclusive
of the
Additional Land, plus (ii) all of the Real Property Taxes for
the Additional
Land. Landlord shall diligently pursue the separate assessment
of the Property
as follows: Upon recordation of the Lease Memorandum (defined in
Section 16.08
below), Landlord, at Landlord's cost and expense, shall have all
of the Property
included in one or more Assessor's Parcels comprised exclusively
of all or
portions of the Property, so that the entirety of the Property
may be taxed
separately as part of Tenant's central tax assessment. The
Building Premises
shall independently comprise a single Assessor's Parcel. The
Additional Land
shall separately comprise one or more Assessor's Parcels of such
size and
configuration as Tenant shall direct, subject to such
requirements as may be
imposed by the Clark County Assessor's Office; provided,
however, that the cost
of preparing any additional required legal descriptions of the
Additional Land
(other than the legal description of the Additional Land
attached as part of
Exhibit "A" to this Lease) due to Tenant's desire to divide the
Additional Land
into multiple parcels shall be at Tenant's sole cost. Landlord
shall make all
commercially reasonable, good faith efforts to have the
foregoing accomplished
through Clark County administrative procedures. However, if the
foregoing can be
accomplished only through division of land procedures under NRS
278.320 through
278.4725, Tenant shall reimburse to Landlord one-half (1/2) of
the out-of-pocket
survey and engineering costs incurred with unaffiliated survey
and engineering
firms and paid by Landlord to effect the land division. Tenant
shall make such
reimbursement within thirty (30) days following the recording of
applicable maps
and certificates and receipt by Tenant from Landlord of copies
of the paid
invoices for such engineering and survey work. In connection
with the
above-described separate assessment of the Property, Landlord
and Tenant shall
execute and deliver such further instruments and perform such
additional acts as
may be reasonably required to obtain the desired central tax
assessment
treatment.
(d) PERSONAL PROPERTY TAXES.
(i) Tenant shall pay all taxes charged against trade
fixtures,
furnishings, equipment or any other personal property belonging
to Tenant.
Tenant shall diligently pursue the separate assessment of such
personal
property, so that it is taxed separately from the Property.
(ii) If any of Tenant's personal property is taxed with the
Property and the Property is not separately assessed, Tenant
shall pay Landlord
the taxes for the personal property with its payment to Landlord
of Real
Property Taxes.
(e) CONTEST OF TAXES. Tenant, at Tenant's sole cost and
expense,
shall have the right, in Landlord's name, if appropriate, to
contest Real
Property Taxes on the Property by appropriate legal or
administrative
proceedings (a "TAX CONTEST"), subject to the terms of this
Section 4.02(e). In
such event, Tenant may defer payment of the contested tax but
shall promptly pay
such contested tax or cause it to be paid under protest prior to
such time as
the Property may be subject to conveyance by the Clark County
Treasurer pursuant
to the provisions of NRS 361.595, 361.603 or NRS 361.604, as
those provisions
may, from time to time, be amended. If there shall be any refund
with respect to
any contested tax based on a payment by Tenant, Tenant shall be
entitled to the
same to the extent of such payment. If the Property is not taxed
separate and
apart from other portions of the Project, Landlord shall have
the right to
participate jointly with Tenant in any contest of Real Property
Taxes relative
to any portion of the Property not so separately taxed. In such
event, Landlord
shall bear all costs incurred by Landlord relative to such
participation.
Landlord shall promptly cooperate with Tenant, execute such
documents and take
such actions as may be reasonably necessary to enable Tenant to
properly contest
any tax contemplated in this section; provided, however, that
Landlord shall not
be required to incur any out-of-pocket costs in connection with
the same except
to the extent that Landlord elects to do so if Landlord elects
to proceed
jointly with Tenant relative to the contest of such tax as
provided in the
foregoing provisions of this Section 4.02(e). Tenant shall
and
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hereby agrees to indemnify, defend and hold harmless Landlord
of, from and
against any and all costs, liabilities or tax obligations
(including without
limitation any increases in taxes) resulting from any such
contest in which
Landlord does not jointly participate with Tenant as provided in
the foregoing
provisions of this Section 4.02(e). If Tenant does elect to
pursue the Tax
Contest under the circumstances described above, then Tenant
shall furnish such
security, if any, as may be required in the Tax Contest
proceedings.
Section 4.03. UTILITIES. Tenant shall pay, directly to the
appropriate
supplier, the cost of all natural gas, heat, light, power, sewer
service,
telephone, fiber optic, cable or other telecommunications or
data delivery
services, water, refuse disposal and other utilities and
services supplied to
the Property during the Lease Term. However, if any services or
utilities are
jointly metered with other property, Landlord shall make a
reasonable
determination of Tenant's proportionate share of the cost of
such utilities and
services and Tenant shall pay such share to Landlord with
Tenant's next monthly
installment of Base Rent, consistent with Section 4.01 above.
Landlord's
determination shall take into consideration the uses being made
of the Building,
the uses being made of the other building in the Project, and
any differences in
costs imposed by the utility providing entity. Tenant
acknowledges and agrees
that (1) this Lease is entirely separate and distinct from and
independent of
any and all agreements that Tenant may at any time enter into
with any third
party for the provision of utility services or any other
services, and (2)
Landlord has no obligation of any kind concerning the provision
of any such
services. Landlord shall not be liable for any failure to
furnish, stoppage of,
or interruption in furnishing any of the services or utilities
described in this
Section 4.03, when such failure is not caused by, and does not
result from, any
act or omission of Landlord, its agents, permitees, invitees or
contractors, and
instead results from accident, breakage or repairs caused by
parties other than
Landlord, its agents, permitees, invitees or contractors, or is
caused by
strikes, lockouts, labor disputes, labor disturbances,
governmental regulation,
civil disturbances, terrorist acts, acts of war, moratorium or
other
governmental action, or any other cause beyond Landlord's
reasonable control,
and, in such event, Tenant shall not be entitled to any damages,
nor shall any
failure or interruption abate or suspend Tenant's obligation to
pay rent as
required under this Lease or constitute or be construed as a
constructive or
other eviction of Tenant. Further, in the event any governmental
authority or
public utility promulgates or revises any law, ordinance, rule
or regulation, or
issues mandatory controls or voluntary controls relating to the
use or
conservation of energy, water, gas, light or electricity, the
reduction of
automobile or other emissions, or the provision of any other
utility or service,
Landlord may take any reasonably appropriate action to comply
with such law,
ordinance, rule, regulation, mandatory control or voluntary
guideline without
affecting Tenant's obligations under this Lease. Tenant
recognizes that security
services, if any, provided by Landlord at the Project are for
the protection of
Landlord's property, and under no circumstances shall Landlord
be responsible
for, and Tenant waives any rights with respect to, providing
security or other
protection for Tenant or its employees, invitees or property in
or about the
Property or the Building.
Section 4.04. INSURANCE POLICIES.
(a) LIABILITY INSURANCE. Subject to the provisions of
Section
4.04(e) below, during the Lease Term, Tenant, at Tenant's sole
cost and expense,
shall maintain a policy of commercial general liability
insurance (or its
equivalent) insuring Tenant against liability for bodily injury,
property damage
(including loss of use of property) and personal injury arising
out of Tenant's
use or occupancy of the Property. Tenant shall name Landlord as
an additional
insured under such policy, and Tenant shall provide Landlord
with an appropriate
insurance certificate so evidencing prior to Tenant's occupancy
of the Property,
which certificate shall show Landlord as "an additional insured
as required by
contract." The initial per occurrence amount of such insurance
shall be Three
Million Dollars ($3,000,000.00) and shall be subject to periodic
increase based
upon inflation, increased liability awards, the reasonable
recommendations of
Landlord's professional insurance advisors and other relevant
factors; provided,
however, that any such increase shall not be required during the
first three (3)
Lease Years and shall not exceed those increases reasonably
required by prudent
owners of like properties in the Las Vegas metropolitan area.
The liability
insurance obtained by Tenant under this Section 4.04(a): shall
(i) be primary
and non-contributing except with respect to Landlord's
negligence or willful
misconduct; (ii) contain cross-liability endorsements; and (iii)
provide
contractual coverage with respect to Tenant's obligations under
Section 5.05
below. The amount and coverage of such insurance shall not limit
Tenant's
liability nor relieve Tenant of any other obligation under this
Lease. Landlord
shall also obtain commercial general liability insurance (or its
equivalent)
insuring Landlord against liability for bodily injury, property
damage
(including loss of use of property) and personal injury arising
out of
ownership, operation, use or occupancy of the Property. The
initial per
occurrence amount of such insurance shall be not less than Three
Million Dollars
($3,000,000.00) and shall be increased in amount and at times
coincident with
Tenant's required liability coverage amount increases provided
above. The
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policy obtained by Landlord shall not be contributory and shall
not provide
primary insurance except with respect to Landlord's negligence
or willful
misconduct. The policy obtained by Landlord shall provide
contractual coverage
with respect to Landlord's obligations under Section 5.05 below.
In addition to
the foregoing, both Landlord and Tenant shall obtain commercial
automobile
liability coverage with combined single limit coverage of One
Million Dollars
($1,000,000.00) for bodily injury and property damage, which
coverage shall
include owned, non-owned and hired automobile liability for
vehicles driven on
or about the Property by their respective employees. Landlord
shall have Tenant
named as an additional insured on any policy of liability
insurance obtained
relative to the Common Areas.
(b) PROPERTY INSURANCE. Except as otherwise provided herein,
and
subject to the provisions of Section 4.04 (e) below, during the
Lease Term,
Tenant shall maintain policies of insurance covering loss of or
damage to the
Building Shell Improvements (including Common Area Improvements
on the Building
Premises other than, and excluding, the ESFR System [as defined
in Section
4.05(a)]) and Tenant Improvements, in the full amount of their
replacement
value, with such policies providing protection against loss or
damage due to
fire or other casualties covered within the classification of
fire and extended
coverage. Such insurance coverage shall be effected by adding
the Building Shell
Improvements (including the Common Area Improvements located on
the Building
Premises, other than, and excluding the ESFR System) and the
Tenant's
Improvements to Tenant's schedule of insured values on its
property coverage
insurance policies, and shall be thereby insured against such
other casualties
as Tenant may elect to obtain relative to its other similar
properties, which
coverages may, at Tenant's election, include vandalism,
malicious mischief,
sprinkler leakage, flood coverage, earthquake coverage and/or
terrorism
coverage. All policies required under this Section 4.04(b) shall
be written as
primary policies, not contributing with and not supplemental to
any property
insurance coverage that Landlord may carry, and shall name
Tenant, Landlord and
Landlord's mortgage lender as loss payees as respects the Base
Building Shell
Improvements. Tenant shall be responsible for payment of the
entirety of any
deductible amount under Tenant's insurance policies. Neither
Landlord nor Tenant
shall do or permit anything to be done which invalidates any
such insurance
policies.
(c) PAYMENT OF PREMIUMS. Tenant shall pay all premiums for
the
insurance policies described in Sections 4.04(a) and (b), except
Landlord shall
pay all premiums for liability insurance which Landlord is
required to obtain as
provided in Section 4.04(a) above. Subject to the provisions of
Section 2.03
above and Section 4.04 (e) below, prior to the Lease
Commencement Date Tenant
shall deliver to Landlord the "Acord Form" (or such other
reasonable substitute
form as may then be customarily accepted by Landlord's and
Landlord's mortgage
lender if the Acord Form is no longer available) certificates of
insurance
evidencing insurance coverage which Tenant is required to
maintain under this
Section 4.04. Upon the expiration of any such policy, Tenant
shall deliver to
Landlord a certificate evidencing renewal of such policy without
a lapse in
coverage. All such certificates of insurance shall be issued by
an officer or
agent of the insurer. Landlord or Landlord's mortgage lender may
request
commercially reasonable modifications to certificates of
insurance provided by
Tenant. If so, Tenant shall expend commercially reasonable
efforts to obtain
such modifications or to obtain issuance of a modified
certificate. If Tenant is
unsuccessful in those efforts, Tenant shall provide to Landlord
or Landlord's
mortgage lender written certification by an officer of Tenant,
that with respect
to the particular required insurance coverage, such coverage is
in force and
effect, or that Tenant is self-insuring such coverage in
accordance with the
provisions of Section 4.04(e) below. If Landlord maintains a
property casualty
insurance policy with a schedule for "contingent coverage" for
multiple Landlord
properties (with claim proceeds payable only if Tenant or
Tenant's insurer fails
to respond to the claim), and if Landlord's mortgage lender
requires the Base
Building Shell Improvements to be added to such schedule, Tenant
shall reimburse
Landlord for seventy-five percent (75%) of the premium cost of
adding the Base
Building Shell Improvements to such schedule. In such event,
Tenant shall
reimburse Landlord for such premium cost within thirty (30) days
following
Tenant's receipt of Landlord's invoice therefor.
(d) GENERAL INSURANCE PROVISIONS.
(i) Any insurance that Tenant is required to maintain under
this Lease shall include the carrier's standard provision for
thirty (30) days'
notice to Landlord prior to any cancellation or modification of
such coverage,
including the cancellation or modification of any required
endorsements.
(ii) If Tenant fails to deliver any certificate to Landlord
required under this Lease within the prescribed time period or
if such policy is
cancelled or modified contrary to the requirements of this Lease
during the
Lease Term without Landlord's consent (unless such policy is not
in force or has
been cancelled or
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Las Vegas, Nevada
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modified because Tenant has qualified for and elected to
self-insure pursuant to
Section 4.04(e) below), such failure, cancellation or
modification shall
constitute a material default under this Lease if not cured by
Tenant following
written notice from Landlord pursuant to Section 10.02 of this
Lease.
(iii) Tenant shall maintain all insurance required under
this
Lease with companies duly authorized to issue insurance policies
in Nevada and
holding a Financial Strength Rating of "A" or better, and a
Financial Size
Category of "VIII" or larger, based on the most recent published
ratings of the
A.M. Best Company. If at any time during the Lease Term, Tenant
is unable to
maintain the insurance required under this Lease, Tenant shall
nevertheless
maintain insurance coverage which is customary and commercially
reasonable in
the insurance industry for Tenant's type of business, as that
coverage may
change from time to time.
(iv) Notwithstanding anything in this Lease to the contrary,
Landlord and Tenant each hereby waives any and all rights of
recovery against
the other, or against the members, managers, officers,
employees, agents or
representatives of the other (whether such right of recovery
arises from a claim
based on negligence or otherwise), for loss of or damage to its
property or the
property of others under its control, if such loss or damage is
covered by any
insurance policy required under the terms of this Lease (or
other insurance
coverage not required by this Lease) and which is active and in
force at the
time of such loss or damage. Upon obtaining the required
policies of insurance,
Landlord and Tenant shall give notice to the insurance carriers
of this mutual
waiver of subrogation and shall obtain any policy endorsements
required therefor
by any such policy.
(v) Neither Landlord nor Tenant shall do or permit to be
done
any act or thing upon the Property or the Project which would
jeopardize or be
in conflict with the property insurance policies covering the
Project or
fixtures or property in the Project.
(vi) During the Lease Term, Tenant, at Tenant's sole cost
and
expense, shall maintain workers' compensation insurance as
required by Nevada
law, and employer's liability insurance coverage with a limit of
One Million
Dollars ($1,000,000.00) in Constant Dollars (as defined in
Section 6.05(b)
below).
(vii) If Tenant carries any of the liability insurance
required hereunder in the form of a blanket policy, any
certificate required
hereunder shall make specific reference to the Property.
(viii) Landlord or Landlord's mortgage lender shall not be
limited in the proof of any damages which Landlord or Landlord's
mortgage lender
may claim against Tenant arising out of or by reason of Tenant's
failure to
provide and keep in force insurance, as provided above, to the
amount of the
insurance premium or premiums not paid or incurred by Tenant and
which would
have been payable under such insurance; but Landlord and
Landlord's mortgage
lender shall also be entitled to recover as damages for such
breach, the
uninsured amount of any loss, to the extent that it would have
been insured.
Tenant shall self insure any deductibles for the insurance
required to be
carried by Tenant in this Section 4.04.
(ix) Insurance claims by reason of damage to or destruction
of
any portion of the Property shall be adjusted by Tenant;
provided, however, that
although Tenant shall make the final decision with respect to
any such
adjustment, with respect to any claim regarding damage to or
destruction of the
Base Building Shell Improvements in excess of $200,000.00,
promptly after such
damage or destruction, Tenant shall advise Landlord and
Landlord's mortgage
lender of such occurrence and consult with Landlord and
Landlord's mortgage
lender throughout the process of adjusting any such claim, and
provided further
that both Landlord and Landlord's mortgage lender are fully
advised as to all
matters on a current basis. Landlord shall not be required to
prosecute any
claim against, or to contest any settlement proposed by Tenant
or an insurer.
Tenant may, at its expense, prosecute any such claim or contest
any such
settlement in the name of Landlord, Tenant or both, and Landlord
will join
therein at Tenant's written request upon the receipt by Landlord
of an indemnity
from Tenant against all costs, liabilities and expenses in
connection therewith.
(e) SELF-INSURANCE OPTION. Tenant shall have the right to
satisfy
its insurance obligations under this Lease by means of
self-insurance to the
extent of all or part of the insurance required hereunder so
long as (a) such
self-insurance is permitted under all laws applicable to Tenant
and/or the
Property at the time in question, and (b) Tenant maintains a
tangible net worth
(as shown by its audited financial statements prepared in
accordance with
generally accepted accounting principles) of not less than Two
Hundred Fifty
Million Dollars
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($250,000,000.00) in Constant Dollars; and (c) Tenant shall, not
less than
annually, provide Landlord an audited financial statement,
prepared in
accordance with generally accepted accounting principles,
showing the required
tangible net worth (provided, that Tenant need not make such a
delivery if its
financial statement is generally available to the public through
Tenant's
filings with a governmental authority). If Tenant is a Tenant
Affiliate of the
original Tenant, the foregoing $250,000,000.00 net worth
requirement shall be
reduced to One Hundred Million Dollars ($100,000,00.00) so long
as the original
Tenant maintains a tangible net worth of $250,000,000.00 and
remains liable
under this Lease in accordance with the provisions of Section
9.05 below.
"Self-insure" shall mean that Tenant is itself acting as though
it were the
third-party insurer providing the insurance required under the
provisions of
this Lease, and Tenant shall pay any amounts due in lieu of
insurance proceeds
because of self-insurance. To the extent Tenant chooses to
provide any insurance
required by this Lease by "self-insurance," then Tenant shall
have all of the
obligations and liabilities of an insurer, and the protection
afforded Landlord,
Landlord's mortgage lender, and the Property shall be the same
as if provided by
a third-party insurer under the coverages required under this
Lease. Without
limiting the generality of the foregoing, all amounts which
Tenant pays or is
required to pay and all losses or damages resulting from risks
for which Tenant
has elected to self-insure shall be subject to the waiver of
subrogation
provisions of Section 4.04(d)(iv) of this Lease, and shall not
limit Tenant's
indemnification obligations set forth in Section 5.05 of this
Lease. In the
event that Tenant elects to self-insure and an event or claim
occurs for which a
defense and/or coverage would have been required to be furnished
by Tenant under
the provisions of Section 4.04(a) from a third-party insurer,
Tenant shall
undertake the defense of the claim (if applicable), including a
defense of
Landlord (if applicable), at Tenant's sole cost and expense, and
use its own
funds to pay the claim or replace any property or otherwise
provide the funding
which would have been available from insurance proceeds but for
such election by
Tenant to self-insure. In the event that Tenant elects to
self-insure any
coverage required to be insured by Tenant in this Lease, upon
written request
from Landlord, Tenant shall provide Landlord and Landlord's
mortgage lender with
written confirmation from Tenant (certified to by an officer of
Tenant) of that
coverage, in form reasonably acceptable to Landlord and
Landlord's mortgage
lender, which may supplement, but not replace the certificates
of insurance to
be provided by Tenant pursuant to Section 4.04(c) above for
insurance
obligations Tenant chooses not to self-insure.
Section 4.05. COMMON AREAS; USE, MAINTENANCE AND COSTS.
(a) COMMON AREAS. As used in this Lease, "COMMON AREAS" shall
mean
those areas within the Project designated as such on Exhibit "A"
to this Lease.
If required by law to do so or with Tenant's prior written
consent, Landlord,
from time to time, may change the size, location, nature and use
of Common Areas
and increase or decrease Common Areas land and/or facilities.
Tenant
acknowledges that such legally required activities may result in
an
inconvenience to Tenant. Such activities and changes are
permitted so long as
they do not permanently and materially affect Tenant's use of
the Property.
Although not a part of the Common Areas, the cost of
maintaining, testing, and
operating the components of the Project's ESFR fire suppression
system,
including the pump house located on the Building Premises, are
included within
the Common Area Costs (defined below). Subject to the provisions
of Section 5.06
below, Landlord shall be provided access to such pump house for
periodic
testing, but no other tenants in the Project shall have such
access. The
Project's ESFR fire suppression system, consisting of the pump
house, and those
other components of the system that serve, service and benefit
both the Building
and the other building in the Project, are collectively referred
to herein as
the "ESFR SYSTEM." The (i) ESFR System, (ii) real property
improvements,
landscaping, equipment, systems and fixtures located within the
Common Areas and
(iii) utility lines within the Common Areas and used in common
by tenants of the
Project are collectively referred to herein as "COMMON AREA
IMPROVEMENTS."
Notwithstanding any language to the contrary in this Lease,
Tenant acknowledges
and agrees that the defined term "ESFR System" does not include
those components
of the Project's ESFR fire suppression system which are included
within the
Building and which serve, service and benefit only the Building,
to the
exclusion of the other building in the Project, and Tenant
further agrees that
such components will be treated as part of the Building for
purposes of Section
4.04(b) above and as part of the Base Building Shell
Improvements for purposes
of Section 7.01 below.
(b) USE OF COMMON AREAS. Tenant shall have the nonexclusive
right
(in common with other tenants in the Project) to use the Common
Areas for the
purposes intended, subject to such reasonable rules and
regulations as Landlord
may establish from time to time. Tenant shall abide by such
rules and
regulations and shall use its best effort to cause others who
use the Common
Areas with Tenant's express or implied permission to abide by
Landlord's rules
and regulations. At any time, Landlord may close any Common
Areas to perform any
acts in
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the Common Areas as, in Landlord's judgment, are desirable to
improve the
Project. Tenant shall not interfere with the rights of Landlord,
other tenants
or any other person entitled to use the Common Areas.
Notwithstanding the foregoing provisions of this Section
4.05,
Tenant, at its cost and subject to its compliance with
Applicable Laws, shall
have the right to establish vehicle parking spaces in the Common
Areas, but only
within the northerly twenty-five feet (25') of the Building
Premises (excluding
areas that are required for fire lanes) by installation and
placement of
pavement striping and other parking improvements. Tenant, its
permitted
Subtenants, and its and their employees, contractors, customers
and other
business invitees shall be entitled to exclusive use of any
parking spaces so
established. Such reserved parking improvements shall not be
considered Common
Area Improvements and shall be maintained by Tenant pursuant to
Section 6.04
below. In the event of use of such parking spaces by other
tenants in the
Project or other parties, Landlord shall take all commercially
reasonable steps
to curtail such use by other parties and preserve to Tenant and
its permitted
Subtenants the use thereof, whether by use of parking
reservation signs, or
otherwise.
(c) MAINTENANCE OF COMMON AREAS. Landlord, and not Tenant,
shall
maintain the Common Areas and all Common Area Improvements in
good order,
condition and repair (including replacement, as necessary), and
shall operate
the Project as a first-class industrial/commercial real property
development.
Subject to the provisions of Section 4.05(e), Tenant shall pay
Tenant's Pro Rata
Share (as determined below) of all costs incurred by Landlord
for the operation
and maintenance of the Common Areas and Common Area Improvements
(the "COMMON
AREA COSTS"). Common Area Costs include, but are not limited to,
all costs and
expenses for the following: utilities, water and sewage charges;
maintenance of
signs (other than tenants' signs); maintenance of the ESFR
System (including
testing, monitoring and servicing); maintenance of landscaped
areas; maintenance
of utility lines within the Common Areas and which are used in
common by tenants
of the Project, to the extent such maintenance responsibility is
not assumed by
the utility provider; premiums for liability, property damage,
fire and other
types of casualty insurance (if applicable) on the Common Area
Improvements;
premiums for worker's compensation insurance (if applicable);
all property taxes
and assessments levied on or attributable to the Common Areas
and all Common
Areas Improvements (if applicable); appropriately prorated
personal property
taxes levied on or attributable to personal property used in
connection with the
Common Areas; appropriately prorated straight-line depreciation
on personal
property owned by Landlord which is consumed in the operation or
maintenance of
the Common Areas; the cost of improvements made subsequent to
the initial
development of the Common Areas to comply with the requirements
of any law,
ordinance, code, rule or regulation; appropriately prorated
rental or lease
payments paid by Landlord for rented or leased personal property
used in the
operation or maintenance of the Common Areas; appropriately
prorated fees for
required licenses and permits; repairing, resurfacing, repaving,
maintaining,
painting, lighting, cleaning, refuse removal, security and
similar items for the
Common Areas; and reserves for sealing and restriping and/or
resurfacing and
repaving of the Common Areas paved areas. Except for payment of
Tenant's Pro
Rata Share of the Common Area Costs associated with the
operation and
maintenance of the ESFR System, as provided in this Section,
Tenant shall have
no obligation or responsibility whatsoever for the maintenance,
repair or
replacement of the ESFR System or any portion thereof. Landlord
may cause any or
all of such services to be provided by third parties and the
cost of such
services shall be included in Common Area Costs. Common Area
Costs shall not
include depreciation of Common Area Improvements or any real
property, real
property improvements, or equipment, machinery or fixtures which
are part of the
Common Areas.
(d) ROUTINE MAINTENANCE. Consistent with Section 4.05(c)
above,
Landlord shall maintain, as Common Area Costs, the landscaped
and paved areas
within the Common Areas. Such maintenance shall include
gardening, tree
trimming, replacement or repair of landscaping, landscape
irrigation systems and
similar items. Such maintenance shall also include sweeping and
cleaning of
asphalt, concrete or other surfaces on the driveway, parking
areas, yard areas,
loading areas or other paved or covered surfaces in Common
Areas. In connection
with Landlord's obligations under this Section 4.02(d), Landlord
may enter into
a contract with a contractor of Landlord's choice to provide
some (but not
necessarily all) of the maintenance services listed above.
Subject to the
provisions of Section 4.05(e), Tenant shall pay its Pro Rata
Share of the
monthly cost of such contract relative to the Common Areas, as
part of its share
of the monthly Common Area Costs.
(e) TENANT'S SHARE AND PAYMENT. Tenant shall pay Tenant's Pro
Rata
Share of all Common Area Costs (prorated for any fractional
month) upon written
notice from Landlord that such costs have been incurred and are
due and payable,
and in any event prior to delinquency. Tenant's "PRO RATA SHARE"
shall be as
stated in Section 1.10(b) above, subject to a proportionate
equitable adjustment
if the size of the Common Areas
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are adjusted pursuant to Section 4.05(a) above. Landlord may, at
Landlord's
election, estimate in advance and charge to Tenant as Common
Area Costs, all
Real Property Taxes for which Tenant is liable under Section
4.02(c) of this
Lease, and all other Common Area Costs payable by Tenant
hereunder. At
Landlord's election, such statements of estimated Common Area
Costs shall be
delivered monthly, quarterly or at any other periodic intervals
to be designated
by Landlord; provided, however, that unless otherwise notified
by Landlord,
Landlord shall bill Tenant monthly in advance for the estimated
Common Area
Costs (other than Real Property Taxes, which shall be billed
quarterly) and
Tenant shall pay Landlord the amount of such costs, as
Additional Rent. Landlord
may adjust such estimates annually based upon Landlord's
experience and
reasonable anticipation of costs. Such adjustments shall be
effective as of the
next rent payment date after notice to Tenant. Within one
hundred twenty (120)
days after the end of each calendar year of the Lease Term,
Landlord shall
deliver to Tenant a statement prepared in accordance with
generally accepted
accounting principles setting forth, in reasonable detail, the
Common Area Costs
paid or incurred by Landlord during the preceding calendar year
and Tenant's Pro
Rata Share. Landlord shall thereafter deliver to Tenant copies
of all
documentation that Tenant may reasonably request relative to the
Common Area
Costs paid or incurred by Landlord during that period,
including, but not
limited to, copies of service contracts, invoices, statements
and billings,
together with evidence of payments by Landlord, and including
the formulas and
other accounting bases by which Landlord has computed Tenant's
billings for a
Common Area Costs. Landlord shall retain all such documentation
for a period of
not less than three (3) years. Following receipt of such
statement and any such
documentation, there shall be an adjustment between Landlord and
Tenant, with
payment to or credit given by Landlord (as the case may be) so
that Landlord
shall receive the entire amount of Tenant's share of such costs
and expenses for
such period and Tenant shall pay only the amount for which
Tenant is obligated
for such period. The provisions of this Section 4.05(e) shall
survive the
expiration or earlier termination of the Lease Term.
(f) TENANT'S USE OF LANDLORD'S CONTRACTORS. Upon Tenant's
written
request, but not more than annually, Landlord shall provide to
Tenant a schedule
of the services provided by Landlord in performing its
obligations under Section
4.05(c) and Section 4.05(d) above (the "CAM SERVICES LIST")
together with the
names and addresses of contractors providing such services and
such other
information relative thereto as Tenant may reasonably request.
Landlord shall
make available for hiring by Tenant, and Tenant shall have the
right to contract
with, any such contractor to perform tasks for which Tenant is
responsible under
the provisions of Section 6.04 below.
Section 4.06. LATE CHARGES. Tenant's failure to pay rent
promptly may
cause Landlord to incur unanticipated costs. The exact amount of
such costs are
impractical or extremely difficult to ascertain. Such costs may
include, but are
not limited to, processing and accounting charges and late
charges which may be
imposed on Landlord by any ground lease, mortgage or trust deed
encumbering the
Property. Therefore, if Landlord does not receive any rent
payment within ten
(10) business days after it becomes due, subject to the
subsequent provisions of
this Section 4.06 Tenant shall pay Landlord a late charge equal
to five percent
(5%) of the overdue amount. The parties agree that such late
charge represents a
fair and reasonable estimate of the costs Landlord will incur by
reason of such
late payment. Notwithstanding anything to the contrary in this
Section 4.06,
such late charge shall not be incurred unless Tenant fails to
deliver such
delinquent payment within three (3) business days following
Tenant's receipt of
written notice from Landlord of the delinquency, amount and
original due date of
the payment and demanding its payment; provided, however, that
Landlord is under
no obligation to provide more than two (2) such notices in any
consecutive
12-month period. Further, if Landlord fails to receive any
payment or give
Tenant credit for receipt of any payment as a result of errors,
omissions or
oversights of Landlord, its employees or bankers, or as a result
of any changes
made by Landlord with respect to its bankers or personnel, no
such late charges
shall be imposed, and any notices given by Landlord relative
thereto shall not
constitute one of the two notices provided for in the
immediately proceeding
sentence.
Section 4.07. INTEREST ON PAST DUE OBLIGATIONS. In addition to
any late
charge imposed pursuant to Section 4.06 above, but subject to
the subsequent
provisions of this Section 4.07, any amount owed by Tenant to
Landlord which is
not paid within thirty (30) days when due shall bear interest at
the rate of ten
percent (10%) per annum from the due date of such amount
("INTEREST"); provided,
however, that no Interest shall be payable on any late charges
imposed on Tenant
under this Lease. The payment of interest on such amounts shall
not excuse or
cure any default by Tenant under this Lease. If the interest
rate specified in
this Section 4.07 is higher than the rate permitted by law, such
interest rate
is hereby decreased to the maximum legal interest rate permitted
by law.
Notwithstanding the terms of this Section 4.07, such default
interest shall not
be imposed unless Tenant fails to deliver such delinquent
payment within three
(3) business days following Tenant's receipt of written notice
from
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Las Vegas, Nevada
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Landlord of the delinquency, amount and original due date of the
payment and
demanding its payment; provided, however, that Landlord is under
no obligation
to provide more than two (2) such notices in any consecutive
12-month period.
Further, if Landlord fails to receive any payment or give Tenant
credit for
receipt of any payment as a result of errors, omissions or
oversights of
Landlord, its employees or bankers, or as a result of any
changes made by
Landlord with respect to its bankers or personnel, no interest
shall be imposed,
and any notices given by Landlord relative thereto shall not
constitute one of
the two notices provided for in the immediately proceeding
sentence.
Section 4.08. MANAGEMENT FEE. Tenant pay Landlord, for
Landlord's
supervision and management of the Project, a management fee not
to exceed one
percent (1%) of the Base Rent payable under this Lease. Such fee
shall be
payable monthly by Tenant, as Additional Rent, as and when the
monthly Base Rent
is paid.
ARTICLE FIVE USE OF PROPERTY
Section 5.01. PERMITTED USES. Tenant may use the Property only
for the
Permitted Uses set forth in Section 1.06 above.
Section 5.02. MANNER OF USE. Tenant shall not cause or permit
the Property
to be used in any way which constitutes a violation of any law,
statute,
ordinance, or governmental regulation or order, or other
governmental
requirement now in force or which may hereafter be enacted or
promulgated
(collectively, "APPLICABLE LAWS"), or which unreasonably
interferes with the
rights of other tenants of Landlord, or which constitutes a
nuisance or waste.
Tenant shall obtain and pay for all permits required for
Tenant's occupancy of
the Property, and for all business licenses, and shall promptly
take all actions
necessary to comply with all applicable statutes, ordinances,
rules,
regulations, orders and requirements regulating the use by
Tenant of the
Property, including without limiting to the Occupational Safety
and Health Act.
Notwithstanding the foregoing, Landlord shall, at Tenant's sole
cost and
expense, cooperate with Tenant in executing permitting
applications and
performing other ministerial acts reasonably necessary to enable
Tenant to
obtain a High Pile Stock Permit (or comparable permit) from the
applicable
governmental authority, if applicable. Tenant, at Tenant's sole
cost and
expense, shall be responsible for the installation of any fire
hose valves,
draft curtains, smoke venting and any additional fire protection
systems that
may be required by the fire department or any governmental
agency, save and
except for the standard ESFR fire suppression systems and pump
and any such
valves, draft curtains, smoke venting and additional fire
protection systems
that are part of the Building Shell Improvements to be
constructed at Landlord's
cost and expense.
Tenant shall, at its sole cost and expense, promptly comply with
any
Applicable Laws which relate to (or are triggered by) (i)
Tenant's use of the
Property, and (ii) any alteration or any tenant improvements
made by Tenant or
at the request of Tenant. Should any standard or regulation now
or hereafter be
imposed on Tenant by any federal, state or local governmental
body charged with
the establishment, regulation and enforcement of occupational,
health or safety
standards, then Tenant agrees, at its sole cost and expense, to
comply promptly
with such standards or regulations so long as Tenant is not
actively contesting
the same. The final, unappealed or unappealable judgment of any
court of
competent jurisdiction or the admission of Tenant in any
judicial action,
regardless of whether Landlord is a party thereto, that Tenant
has violated any
Applicable Laws, shall be conclusive of that fact as between
Landlord and
Tenant. Tenant shall promptly notify Landlord in writing of any
water
infiltration at the Property indicating the need for a repair
that is the
responsibility of Landlord under this Lease and any other
material water
infiltration in the Building.
Section 5.03. HAZARDOUS MATERIALS.
5.03.1 DEFINITIONS.
A. "HAZARDOUS MATERIAL" means any substance, whether solid,
liquid
or gaseous in nature:
(i) the presence of which requires remediation under any
federal, state or local statute, regulation, ordinance, order,
action or policy
relating to the protection of human health or the environment,
or
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(ii) which is or becomes defined as a "hazardous waste,"
"hazardous substance," pollutant or contaminant under any
federal, state or
local statute, regulation, rule or ordinance or amendments
thereto including,
without limitation, the Comprehensive Environmental Response,
Compensation and
Liability Act (42 U.S.C. section 9601 et seq.) and/or the
Resource Conservation
and Recovery Act (42 U.S.C. section 6901 et seq.), the Hazardous
Materials
Transportation Act (49 U.S.C. section 1801 et seq.), the Federal
Water Pollution
Control Act (33 U.S.C. section 1251 et seq.), the Clean Air Act
(42 U.S.C.
section 7401 et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C.
section 2601 et seq.), and the Occupational Safety and Health
Act (29 U.S.C.
section 651 et seq.), as these laws have been amended or
supplemented; or
(iii)which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous and is
or becomes regulated by any governmental authority, agency,
department,
commission, board, agency or instrumentality of the United
States, the State of
Nevada or any political subdivision thereof; or
(iv) which contains gasoline, diesel fuel or other petroleum
hydrocarbons; or
(v) which contains polychlorinated biphenyls (PCBs),
asbestos
or urea formaldehyde foam insulation; or
(vi) which contains radon gas.
B. "ENVIRONMENTAL REQUIREMENTS" means all applicable present
and
future:
(i) statutes, regulations, rules, ordinances, codes,
licenses,
permits, orders, approvals, plans, authorizations, concessions,
franchises, and
similar items (including, but not limited to those pertaining to
reporting,
licensing, permitting, investigation and remediation), of all
Governmental
Agencies relating to the manufacture, processing, distribution,
use, treatment,
storage, disposal, transport or handling of Hazardous Materials;
and
(ii) all applicable judicial, administrative, and regulatory
decrees, judgments, and orders relating to emissions,
discharges, releases, or
threatened releases of Hazardous Materials into the air, surface
water,
groundwater or land, or relating to the manufacture, processing,
distribution,
use, treatment, storage, disposal, transport, or handling of
Hazardous
Materials.
C. "ENVIRONMENTAL DAMAGES" means all claims, judgments,
damages,
losses, penalties, fines, liabilities (including strict
liability),
encumbrances, liens, costs, and expenses (including the expense
of investigation
and defense of any claim, whether or not such claim is
ultimately defeated, or
the amount of any good faith settlement or judgment arising from
any such claim)
of whatever kind or nature, contingent or otherwise, matured or
unmatured,
foreseeable or unforeseeable (including without limitation
reasonable attorneys'
fees and disbursements and consultants' fees) any of which are
incurred at any
time as a result of the existence of Hazardous Materials upon,
about, or beneath
the Property or migrating or threatening to migrate from the
Property, or the
existence of a violation of Environmental Requirements
pertaining to the
Property and the activities thereon. Environmental Damages
include, without
limitation:
(i) compensatory damages for personal injury, or injury to
property or natural resources occurring upon or off of the
Property, including
interest, penalties and damages arising from claims brought by
or on behalf of
employees of Tenant;
(ii) fees, costs or expenses reasonably incurred for the
services of outside environmental counsel, consultants,
contractors, experts,
laboratories and all other costs incurred in connection with the
investigation
or remediation of such Hazardous Materials or violation of such
Environmental
Requirements, including, but not limited to, the preparation of
any feasibility
studies or reports or the performance of any cleanup,
remediation, removal,
response, abatement, containment, closure, restoration or
monitoring work
required by any Governmental Agency or reasonably necessary to
make full
economic use of the Property or any other property in a manner
consistent with
its current use or otherwise expended in connection with such
conditions, and
including
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without limitation any attorneys' fees, costs and expenses
incurred in enforcing
the provisions of this Section 5.03 or collecting any sums for
Environmental
Damages due hereunder pursuant to Section 12.01 below;
(iii) liability to any third person or Governmental Agency
to
indemnify such person or Governmental Agency for costs expended
in connection
with the items referenced in subparagraph (ii) above; and
(iv) diminution in the fair market value of the Property;
provided, however, that this measure of Environmental Damages
shall be
inapplicable if, upon expiration or earlier termination of this
Lease, there
will be no remaining residual leasehold interest for Landlord
under the Master
Lease.
D. "GOVERNMENTAL AGENCY" means all governmental agencies,
departments, commissions, boards, bureaus or instrumentalities
of the United
States, states, counties, cities and political subdivisions
thereof.
E. The "TENANT GROUP" means Tenant, Tenant's successors,
officers,
members, managers, directors, assignees, agents, employees,
contractors,
invitees, permitees or other parties under the supervision or
control of Tenant
or entering the Property during the Lease Term with the
permission or knowledge
of Tenant.
F. The "LANDLORD GROUP" means Landlord, Landlord's
successors,
officers, members, managers, directors, assignees, agents,
employees,
contractors, invitees, permitees, affiliates, other tenants and
other parties
under the supervision or control of Landlord or entering the
Property or Project
during the Lease Term with the permission or knowledge of
Landlord, other than
any party in the Tenant Group.
5.03.2 PROHIBITIONS.
A. Other than normal quantities of general office and
cleaning
supplies and except as specified on Exhibit "D" attached hereto,
Tenant shall
not cause, permit or suffer any Hazardous Material to be brought
upon, treated,
kept, stored, disposed of, discharged, released, produced,
manufactured,
generated, refined or used upon, about or beneath the Property
by the Tenant
Group, or any other person without the prior written consent of
Landlord;
provided, however, if Tenant is the original Tenant, a Tenant
Affiliate of the
original Tenant or a regulated public utility, prior written
notification to
Landlord shall be sufficient without the necessity of obtaining
Landlord's
consent. If Landlord's consent is required, Landlord shall allow
Tenant's use of
such other Hazardous Materials if Tenant establishes, to
Landlord's reasonable
satisfaction, that the use of such substances poses no
materially greater risk
of contamination to the Property than do Tenant's existing
activities in view of
(a) quantities, toxicity and other properties of the proposed
new Hazardous
Materials, (b) precautions Tenant agrees to take to prevent a
release, (c)
Tenant's current financial condition as it relates to its
ability to fund a
major clean-up, and (d) Tenant's policy and historical record
respecting its
willingness to respond to any such clean-up. Prior to the Lease
Commencement
Date (for those Hazardous Materials described on Exhibit "D")
and upon
introduction of other Hazardous Materials on the Property (for
other Hazardous
Materials later used on the Property), Tenant shall make
available to Landlord
for review and copying: (a) any written handling, storage, use
and disposal
procedures of Tenant; and (b) any "community right to know"
plans or disclosures
and/or emergency response plans which Tenant is required to
supply to local
Governmental Agencies pursuant to any Environmental
Requirements.
B. Tenant shall cause the Tenant Group to comply with all
Environmental Requirements relating to Property.
C. Tenant shall keep the Property free and clear from any
lien,
imposed pursuant to section 107(f) of the Superfund Amendments
and
Reauthorization Act of 1986 (42 U.S.C. section 9607(l)) or any
similar state
statute as a result of the acts or omissions of the Tenant
Group.
D. Except as specified on Exhibit "D" attached hereto, Tenant
shall
not install any below grade Storage Tank (as defined below) on
the Building
Premises or install, operate or maintain any sump, pit, pond or
lagoon on the
Property without Landlord's prior written consent. No Tenant
other than the
original Tenant, a Tenant Affiliate of the original Tenant or a
Tenant that is a
regulated public utility shall install any below grade Storage
Tank on the
Additional Property without the prior written consent of
Landlord. Except as
specified on Exhibit "D" attached hereto, Tenant shall not
install any Storage
Tank on the Property except after prior written
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notification to Landlord. "STORAGE TANK" means a stationary tank
used to contain
or accumulate Hazardous Materials and that has a storage
capacity of more than
five hundred (500) gallons.
5.03.3 INDEMNITY.
A. Subject to the provisions of this Section 5.03.3, Tenant,
its
successors and assigns agree to indemnify, defend, reimburse and
hold harmless:
(i) Landlord; and
(ii) any other person who acquires all or a portion of the
Property in any manner (including purchase at a foreclosure
sale) or who becomes
entitled to exercise the rights and remedies of Landlord under
this Lease; and
(iii) the directors, officers, shareholders, employees,
partners, members, managers, agents, contractors,
subcontractors, affiliates,
lessees, mortgagees, trustees, heirs, devisees, successors, and
assigns and
invitees of such persons;
from and against any and all Environmental Damages which are
caused by the
activities or negligence of the Tenant Group or which result
from the breach of
any warranty or covenant or the inaccuracy of any representation
of Tenant
contained in this Lease, or by Tenant's remediation of the
Property or failure
to meet its obligations contained in this Section 5.03.
Notwithstanding anything
in the foregoing to the contrary, Tenant, its successors and
assigns shall have
no obligation to indemnify, defend, reimburse or hold harmless
any of the
foregoing parties from and against any Environmental Damages (i)
which are
caused by the activities or negligence of any member of the
Landlord Group or
any of the foregoing parties or any agents, contractors,
subcontractors, experts
or licensees of any member of the Landlord Group or any of the
foregoing
parties, (ii) which result from the breach of any warranty or
covenant or the
inaccuracy of any representation of Landlord in this Lease, or
which are
contrary to any condition warranted or represented by Landlord
in this Lease,
(iii) which are incurred as a result of the existence of
Hazardous Materials
upon, about or beneath the Property at the time of Substantial
Completion of the
Tenant Improvements), or (iv) which result from or relate to
Hazardous Materials
that migrate to, or threaten to migrate to the Property from a
location other
than the Property and are not the result of the activities or
negligence of the
Tenant Group.
B. The obligations contained in this Section 5.03.3 shall
include,
but not be limited to, the burden and expense of defending all
claims, suits and
administrative proceedings, even if such claims, suits or
proceedings are
groundless, false or fraudulent, and conducting all negotiations
of any
description, and paying and discharging, when and as the same
become due, any
and all judgments, penalties or other sums due against such
indemnified persons.
Landlord, at its sole expense, may employ additional counsel of
its choice to
associate with counsel representing Tenant.
C. Landlord shall have the right but not the obligation to join
and
participate in, at Landlord's sole expense, any legal
proceedings or actions
initiated in connection with Tenant's activities. Landlord may
also, at
Landlord's sole expense, negotiate, settle, defend, approve and
appeal any
action taken or issued by any applicable governmental authority
with regard to
contamination of the Property by a Hazardous Material.
D. The obligations of Tenant in this Section 5.03.3 shall
survive
the expiration or termination of this Lease.
5.03.4 OBLIGATION TO REMEDIATE. In addition to the obligation
of
Tenant to indemnify Landlord pursuant to this Lease, Tenant
shall, upon approval
and demand of Landlord, at its sole cost and expense, and using
contractors
approved by Landlord, promptly take all actions to remediate the
Property which
are required by (i) any Governmental Agency (ii) the Master
Lease (as defined in
Article Seventeen) or (iii) any deed of trust or mortgage of
Landlord's
mortgagees lender then encumbering the Property, which
remediation is
necessitated from the presence upon, about or beneath the
Property, at any time
during or upon termination of this Lease (whether discovered
during or following
the Lease Term), of a Hazardous Material or a violation of
Environmental
Requirements existing as a result of the activities or
negligence of the Tenant
Group. Such actions shall include, but
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not be limited to, the assessment of a known environmental
condition of the
Property, the preparation of appropriate feasibility studies,
reports or
remedial plans, and the performance of any cleanup, remediation,
containment,
operation, maintenance, monitoring or restoration work, whether
on or off the
Property, which shall be performed in a commercially reasonable
manner and in
conformance with requirements of any Governmental Agency, the
Master Lease and
any deed of trust or mortgage of Landlord's mortgagee lender in
force against
the Property.
5.03.5 RIGHT TO INSPECT. Following written notice to Tenant of
not
less than two (2) business days, Landlord shall have the right
at its sole cost
and expense (except as provided below), in its reasonably
exercised discretion,
but not the duty, to enter and conduct an inspection of the
Property accompanied
by one or more representatives of Tenant, including invasive
tests, at any
reasonable time to determine whether Tenant is complying with
the terms of this
Lease, including but not limited to the compliance of the
Property and the
activities thereon with Environmental Requirements and
determination of the
existence of Environmental Damages as a result of the condition
of the Property
and activities thereon. Landlord shall have the right, but not
the duty, to
retain any independent professional consultant (the
"CONSULTANT") to enter the
Property to conduct such an inspection or to review any report
prepared by or
for Tenant concerning such compliance. The cost of the
Consultant shall be paid
by Landlord unless such investigation discloses a material
violation of an
Environmental Requirement by the Tenant Group in which case
Tenant shall pay the
reasonable cost of the Consultant. Tenant hereby grants to
Landlord, and the
agents, employees, consultants and contractors of Landlord the
right to enter
the Property accompanied by one or more representatives of
Tenant, and to
perform such tests on the Property as are reasonably necessary
to conduct such
reviews and investigations following written notice to Tenant of
not less than
two (2) business days. Landlord shall use commercially
reasonable efforts to
minimize interference with the business of Tenant and any
permitted Subtenants.
Notwithstanding anything in the foregoing or elsewhere in this
Lease to the
contrary, the right of Landlord or any representative of
Landlord to enter or
have access to Tenant's control room shall be subject to the
terms of Section
5.06 below.
5.03.6 NOTIFICATION. If Tenant shall receive notice or other
communication concerning any actual, alleged, suspected or
threatened material
violation of Environmental Requirements, or liability of Tenant
for
Environmental Damages in connection with the Property or past or
present
activities of any person thereon, including but not limited to
notice or other
communication concerning any actual or threatened investigation,
inquiry,
lawsuit, claim, citation, directive, summons, proceeding,
complaint, notice,
order, writ, or injunction, relating to same, then Tenant shall
promptly deliver
to Landlord a written description of said violation, liability,
or actual or
threatened event or condition, together with copies of any
documents evidencing
same. Receipt of such notice shall not be deemed to create any
obligation on the
part of Landlord to defend or otherwise respond to any such
notification.
If requested by Landlord, Tenant shall disclose to Landlord
the
names and amounts of all Hazardous Materials other than general
office and
cleaning supplies referred to in Section 5.03.2 of this Lease,
which were used,
generated, treated, handled, stored or disposed of on the
Property or which
Tenant intends to use, generate, treat, handle, store or dispose
of on the
Property and which are either not listed in Exhibit "D" or were
not the subject
of any consent of, or notice to Landlord under the provisions of
Section 5.03.2.
The foregoing in no way shall limit the necessity for Tenant
obtaining
Landlord's consent pursuant to Section 5.03.2 of this Lease, if
applicable.
5.03.7 SURRENDER OF PROPERTY. In the ninety (90) days prior to
the
expiration or termination of the Lease Term, and for up to
thirty (30) days
after the later to occur of: (i) Tenant fully surrenders to
Landlord exclusive
possession of the Property; and (ii) the termination of this
Lease, Landlord, at
Landlord's cost and expense (except as otherwise provided in
Section 5.03.5
above), may have an environmental assessment of the Property
performed in
accordance with Section 5.03.5 of this Lease. Tenant shall
perform, at its sole
cost and expense, any commercially reasonable clean-up or
remedial work
reasonably recommended by the Consultant which is necessary to
remove, mitigate
or remediate any Hazardous Materials and/or contamination of the
Property caused
by the activities or negligence of the Tenant Group, consistent
with the
requirements of Section 5.03.4 above.
5.03.8 ASSIGNMENT AND SUBLETTING. With respect to any assignment
of
this Lease or subletting of the Property, if the proposed
assignee's or
sublessee's activities on the Property would involve the use,
handling, storage
or disposal of material amounts of Hazardous Materials other
than those which
are the same or similar to those used by Tenant and in
quantities and processes
similar to Tenant's uses in compliance with this Lease, (i)
it
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shall be reasonable for Landlord to withhold its consent to such
assignment or
sublease in light of the risk of contamination posed by such
activities, and/or
(ii) Landlord may impose an additional conditions to such
assignment or sublease
which requires Tenant to reasonably establish that such
assignee's or
sublessee's activities pose no materially greater risk of
contamination to the
Property than do Tenant's permitted activities in view of: (a)
the quantities,
toxicity and other properties of the Hazardous Materials used by
Tenant in
comparison to those to be used by such assignee or sublessee;
(b) the
precautions against a release of Hazardous Materials such
assignee or sublessee
agrees to implement; (c) any such assignee's financial condition
as it relates
to its ability to fund a major clean-up; and (d) any such
assignee's policy and
historical record (if any) respecting its willingness to respond
to the clean up
of a release of Hazardous Materials.
5.03.9 STORAGE TANKS. Without limiting the generality of the
above
provisions of this Section 5.03, with respect to any above or
underground
Storage Tanks to be located on the Property by Tenant, whether
with or without
Landlord's consent, Tenant shall keep all permits and
registrations current and
shall make available to Landlord for review and copying, all
test results
regarding all storage tanks, including without limitation,
tightness testing and
release detection results, all submissions to and correspondence
with any
Governmental Agency regarding such tests and provide copies of
all plans for
responding to releases from all Storage Tanks, including any and
all SPCC (spill
prevention control and countermeasure) plans. Tenant shall
promptly notify
Landlord of any release or suspected release from such tanks,
and shall promptly
implement corrective action and remediation consistent with the
provisions of
this Section 5.03. Tenant shall comply with all commercially
reasonable requests
by Landlord for modification to any spill prevention,
investigation or
remediation plan and shall allow Landlord to conduct its own
testing (or, at
Tenant's option, provide Landlord with split samples) at
Landlord's sole
expense, following request in writing from Landlord.
5.03.10 SURVIVAL OF HAZARDOUS MATERIALS OBLIGATION. Tenant's
material breach of any of its covenants or obligations under
this Section 5.03
not timely cured pursuant to the provisions of Section 10.02(c)
below shall
constitute a material default under this Lease. The obligations
of Tenant under
this Lease shall survive the expiration or earlier termination
of this Lease,
and shall constitute obligations that are independent and
severable from
Tenant's covenants and obligations to pay rent under this
Lease.
5.03.11 LANDLORD'S REPRESENTATION AND WARRANTY. As of the
date
of this Lease, Landlord represents and warrants that to the best
of Landlord's
actual knowledge (and except as otherwise disclosed in that
certain
environmental assessment report dated July 5, 2006 and prepared
by OGI
Environmental LLC, a copy of which has been provided by Landlord
to Tenant), the
Property is free of any Hazardous Materials in violation of any
Environmental
Requirements, and will be free upon Substantial Completion of
the Building Shell
Improvements and the Tenant Improvements. Tenant shall have no
liability of any
kind to Landlord for any Environmental Damages resulting from or
related to
Hazardous Materials located on, under or about the Property as
of the date of
this Lease or upon Substantial Completion of the Building Shell
Improvements (or
the Tenant Improvements. As used in this Section, the "actual
knowledge" of
Landlord means the actual knowledge of Rodman C. Martin (as
opposed to
constructive, implied, or imputed), but without any
investigation.
Section 5.04. AUCTIONS AND SIGNS. Tenant shall not conduct or
permit any
auctions or sheriff's sales at the Property. Subject to
Landlord's prior written
approval, which shall not be unreasonably withheld, delayed or
conditioned, and
provided all signs are in keeping with the quality, design and
style of the
business park within which the Property is located, Tenant and
its permitted
Subtenants, at their cost and expense, may install signs
(collectively, "SIGN")
at the Property; provided, however, that (i) the size, color,
location,
materials and design of the Sign shall be subject to Landlord's
prior written
consent, which shall not be unreasonably withheld, delayed or
conditioned; (ii)
the Sign shall comply with all applicable governmental rules and
regulations and
the Property's covenants, conditions and restrictions; (iii) the
Sign shall not
be painted directly on the Building or attached or placed on the
roof of the
Building; and (iv) continuing signage rights shall be contingent
upon
maintaining the Sign in a first-class condition. Tenant shall be
responsible for
all costs incurred in connection with the design, construction,
installation,
repair and maintenance of the Sign. Upon the expiration or
earlier termination
of this Lease, Tenant shall cause the Sign to be removed and
shall repair any
damage caused by such removal (including, but not limited to,
patching and
painting), all at Tenant's sole cost and expense. Any installed
signs, notices,
logos, pictures, etc. which have not been approved by Landlord
may be removed by
Landlord at Tenant's cost if not removed by Tenant following the
applicable
notice and cure period provided in this Lease. Notwithstanding
any
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language to the contrary in this Section 5.04, Tenant may,
without the prior
consent of Landlord, install typical directional signs at the
Property, so long
as the same are in compliance with Applicable Laws.
Section 5.05. INDEMNITY.
5.05.1 TENANT'S INDEMNITY. Tenant shall indemnify, defend,
protect
and hold harmless Landlord (and Landlord's agents, employees,
contractors, and
property manager) from any and all costs, claims, loss, damage,
expense and
liability (including without limitation court costs, litigation
expenses, and
reasonable attorneys' fees) incurred in connection with or
arising from: (a)
Tenant's use of the Property, including, but not limited to,
those arising from
any accident, incident, injury or damage, however and by
whomsoever caused
(except to the extent of any claim arising out of the negligence
or willful
misconduct of Landlord, its affiliates, employees, agents,
contractors, other
tenants or invitees), to any person or property occurring in or
about the
Property; (b) the conduct of Tenant's business or anything else
permitted by
Tenant to be done in or about the Property; (c) any breach or
default in the
performance of Tenant's obligations under this Lease; (d) any
misrepresentation
or breach of warranty by Tenant under this Lease; or (e) other
acts or omissions
of Tenant. As a material part of the consideration to Landlord,
Tenant assumes
all risk of damage to property or injury to persons in or about
the Property
arising from any cause from which Tenant is required to
indemnify Landlord
pursuant to the foregoing, and Tenant hereby waives all claims
in respect
thereof against Landlord, except to the extent of any claim
arising out of the
negligence or willful misconduct of Landlord, its agents,
contractors, invitees
or permitees. As used in this Section 5.05, acts and omissions
of "Tenant" shall
include acts and omissions of Tenant's employees, agents,
contractors and
invitees, if applicable. The provisions of this Section 5.05.1
shall survive the
expiration or earlier termination of this Lease with respect to
any claims or
liability occurring prior to such expiration or earlier
termination, and shall
constitute obligations that are independent and severable from
Tenant's
covenants and obligations to pay rent under this Lease.
5.05.2 LANDLORD'S INDEMNITY. Landlord shall indemnify,
defend,
protect and hold harmless Tenant (and Tenant's agents,
employees, and
contractors) from any and all costs, claims, loss, damage,
expense and liability
(including without limitation court costs, litigation expenses,
and reasonable
attorneys' fees) incurred in connection with or arising from the
following,
except to the extent caused by Tenant's negligence or willful
misconduct: (a)
any breach or default in the performance of any obligation of
Landlord under
this Lease, (b) any misrepresentation or breach of warranty by
Landlord under
this Lease, or (c) any negligence or willful misconduct of
Landlord. As material
part of the consideration to Tenant, Landlord assumes all risk
of damage to
property or injury to persons in or about the Property arising
from any cause
from which Landlord is required to indemnify Tenant pursuant to
the foregoing,
and Landlord hereby waives all claims and respect thereof
against Tenant, except
to the extent of any claim arising out of the negligence or
willful misconduct
of Tenant, its agents, contractors, invitees or permittees. As
used in this
Section 5.05, acts and omissions of "Landlord" shall include
acts and omissions
of Landlord's employees, agents, contractors and invitees, if
applicable. The
provisions of this Section 5.05.2 shall survive the expiration
or earlier
termination of this Lease with respect to any claims or
liability occurring
prior to such expiration or earlier termination.
Section 5.06. LANDLORD'S ACCESS. Landlord reserves the right at
all
reasonable times and upon reasonable notice to Tenant (i.e.,
notice of not less
than two (2) business days) to enter the Property to (i) inspect
it; (ii) show
the Property to prospective purchasers, mortgagees or tenants
(but only during
the last year of the Lease Term, in case of prospective tenants,
and only if
Landlord will have a residual leasehold interest under the
Master Lease at such
time), or to the ground or underlying lessors; (iii) post
notices of
non-responsibility if required by statute to be so posted to be
effective; (iv)
alter, improve or repair the Property as permitted or required
under the terms
of this Lease; or (v) place "For Lease" signs on the Property
(but only during
the last year of the Lease Term and only if Landlord will have a
residual
leasehold interest under the Master Lease at such time). Any
such entries shall
be without the abatement of Rent and shall include the right to
take such
reasonable steps as required to accomplish the stated purposes.
Any entry into
the Property in the manner described above shall not be deemed
to be a forcible
or unlawful entry into, or a detainer of, the Property, or an
actual or
constructive eviction of Tenant from any portion of the
Property. In case of any
such entry into the Property, Landlord's representatives shall
be accompanied by
a representative of Tenant. Landlord acknowledges that the right
of Landlord or
any representative of Landlord to enter or have access to
Tenant's control room
shall be conditioned upon and subject to Tenant's then security
requirements and
procedures, and shall in any event be with the accompaniment of
one or more
representatives of Tenant. Tenant represents and warrants that
Tenant's present
control room security requirements
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and procedures impose conditions and restrictions but do not
prohibit such
access by Landlord or its representatives. Landlord acknowledges
the possibility
that such requirements and procedures may in the future prohibit
such access,
but Tenant agrees that any such future prohibition will not
unfairly
discriminate nor be applied in such a manner so as to unfairly
discriminate
against Landlord and its representatives.
Section 5.07 VEHICLE PARKING. Tenant, its permitted Subtenants,
and their
employees, contractors, customers and other business invitees
shall be entitled
to the exclusive use of those spaces in the vehicle parking
areas to be located
on the Property (including the exclusive spaces established by
Tenant in the
Common Areas pursuant to Section 4.05(b) above) without paying
any Additional
Rent. Tenant shall not allow large trucks or other large
vehicles to be parked
on the adjacent public streets.
Section 5.08 QUIET POSSESSION. If Tenant pays the rent and
complies with
all other terms of this Lease, Tenant may occupy and enjoy the
Property for the
full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND
ALTERATIONS
Section 6.01. CONDITION OF PROPERTY. Landlord warrants that
upon
Substantial Completion of the Tenant Improvements, the Building
Shell
Improvements and the Tenant Improvements shall have been
constructed in a good
and workmanlike manner, in conformance with the plans and
specifications
therefor, and shall be free of any defects in workmanship or
material and in
conformance with all recorded matters and all Applicable Laws.
Except as
expressly provided in this Lease, Tenant acknowledges that
neither Landlord nor
any agent of Landlord has made any representation as to the
suitability of the
Property for Tenant's intended use. Tenant represents and
warrants that Tenant
has made its own inspection of and inquiry regarding the
suitability of the
Property (or has had the opportunity to do so) and is not
relying on any
representations of Landlord or any Broker with respect thereto.
Notwithstanding
the above, Tenant is entitled to the benefit of the construction
warranties set
forth in this Section 6.01 and Section 6.03 below.
Section 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord
shall not be
liable for any damage or injury to the person or business (or
any loss of income
therefrom), goods, wares, merchandise or other property of
Tenant, Tenant's
employees, invitees, customers, or the property of others in the
possession and
control of Tenant, in or about the Property, whether such damage
or injury is
caused by or results from: (a) fire, steam, electricity, water,
gas or rain; (b)
the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures or
any other cause;
(c) conditions arising in or about the Property or upon other
portions of the
Project, or from other sources or places; or (d) any act or
omission of any
other tenant of Landlord. Landlord shall not be liable for any
such damage or
injury even though the cause of or the means of repairing such
damage or injury
are not accessible to Tenant. The provisions of this Section
6.02 shall not,
however, exempt Landlord from liability to the extent of the
negligence or
willful misconduct of Landlord, its agents, contractors,
invitees and permitees,
and are subject to Section 4.04(d)(iv) and Section 5.05.2
above.
Section 6.03. LANDLORD'S OBLIGATIONS. Subject to the provisions
of Article
Seven (Damage or Destruction) and Article Eight (Condemnation),
and except as
provided in Section 4.05 above and in this Section 6.03,
Landlord shall have no
responsibility to repair, maintain or replace any portion of the
Property. Upon
Substantial Completion of the Tenant Improvements, Landlord
shall deliver the
Property to Tenant clean and free of debris, and in conformance
with Landlord's
warranties and representations set forth in Section 6.01 above.
In the event of
non-compliance with the warranties and representations contained
in Section 6.01
above, Landlord shall promptly after receipt of written notice
from Tenant
setting forth with specificity the nature and extent of such
non-compliance,
rectify the same at Landlord's expense. If Tenant does not give
Landlord written
notice of a non-compliance with that warranty within one (1)
year after the date
of Substantial Completion of the Building Shell Improvements
(with respect to
the Building Shell Improvements) or within one (1) year after
the date of
Substantial Completion of the Tenant Improvements (with respect
to the Tenant
Improvements), correction of that non-compliance shall be the
obligation of
Tenant at Tenant's sole cost and expense, and any further
obligation of Landlord
arising from or related to such warranty shall be extinguished
except with
respect to any latent defects in those components of the
Building for which
Landlord has expressly assumed responsibility below in this
Section 6.03.
Landlord shall also obtain a ten (10)-year NDL manufacturer
warranty covering
the Building's roof membrane, and shall assign its rights
thereunder to Tenant
(and Tenant acknowledges it must assume and comply with all of
the obligations
thereunder in connection with such assignment).
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With respect to the Building only, Landlord, at its sole cost
and expense,
shall be responsible for repair, maintenance, or replacement (as
needed) of the
foundations, structural portions of the roof (but excluding all
non-structural
portions such as the roof membrane), exterior walls (but
excluding the painting
thereof, which shall be Tenant's sole responsibility) and the
floor slab due to
any latent defects therein. Subject to Landlord's one-year
warranties set forth
in this Article Six, Landlord shall not be obligated to replace
or maintain or
repair windows, doors, plate glass or the interior surfaces of
the exterior
walls of the Building, or any of the improvements on the
Additional Land or any
of the other Tenant Improvements. Landlord shall not be
obligated to undertake
any work pursuant to this Section 6.03 until a reasonable time
after receipt of
a written notice from Tenant of the need for such work, and
shall diligently
pursue such work until complete. In no event shall normal wear
and tear
(including that caused by the elements or other natural
environmental
conditions) constitute or be deemed to have caused or resulted
in a latent
defect.
Section 6.04. TENANT'S OBLIGATIONS.
(a) Except as otherwise expressly provided in Section 4.05
above,
Section 6.03 above, Article Seven (Damage or Destruction) below,
and Article
Eight (Condemnation) below, Tenant, at Tenant's sole cost and
expense, shall
keep all portions of the Property (including interior, exterior,
systems and
equipment) in good order, condition and repair. If any portion
of the Property
or any system or equipment in the Property that Tenant is
obligated to repair
cannot be fully repaired or restored, Tenant shall promptly
replace such portion
of the Property or system or equipment in the Property. The cost
of such
replacement shall be amortized (including Interest) over the
useful life as
reasonably determined by Landlord, and Tenant shall only be
liable for that
portion of the cost which is applicable to the remaining Lease
Term (as it may
be extended), and Landlord shall reimburse Tenant or, at
Tenant's option,
provide Tenant with a credit against future Additional Rent
obligations in an
amount equal to Landlord's share of such total cost. If any part
of the Property
or the Project is damaged by any act or omission of Tenant, to
the extent such
damage is not insured under any property insurance policy
carried by Landlord
that provides primary coverage, Tenant shall repair or replace
the same, as
needed. It is the intention of Landlord and Tenant that, at all
times during the
Lease Term, Tenant shall maintain the Property in an attractive,
first-class and
fully operative condition. Without limiting the generality of
the provisions
contained above in this Section 6.04(a), Tenant agrees to repair
any damage to
the Building and Building Premises other than ordinary wear and
tear caused by
the transportation and storage of its products in, on, or about
the Property,
including, but not limited to any damage to the Building's
concrete floor slab,
adjoining concrete ramps, adjoining concrete truck apron, and
adjoining asphalt
parking and access areas on the Building Premises due to the use
of forklifts
hauling Tenant's products. Tenant's repair obligation described
above shall
include the restoration of any damaged areas of the Property or
the Project, if
repair is impracticable, so as to restore such areas to the
condition existing
prior to such damage. For purposes of the foregoing, "damage"
excludes ordinary
wear, tear and scrapes, as well as any settling of concrete and
paved areas
reasonably anticipated from Tenant's use of the Property.
Section 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.
(a) Any alterations, additions or improvements made to the
Building
or the Property by or at the request of Tenant, are herein
referred to as
"TENANT'S ALTERATIONS." Tenant shall not make any Tenant's
Alterations to the
Building without Landlord's prior written consent, except for
non-structural
interior alterations and the initial Tenant Improvements (which
are to be
constructed subject to the provisions of Article Fourteen
below). Tenant shall
promptly remove any Tenant's Alterations constructed in
violation of this
Section 6.05(a) upon Landlord's written request. All Tenant's
Alterations shall
be performed in a good and workmanlike manner, in conformity
with all Applicable
Laws, and to the extent Landlord's consent is required, using a
contractor
reasonably acceptable to Landlord. Upon completion of any such
work, Tenant
shall make available for Landlord's review and copying, any "as
built" plans,
construction contracts, and proof of payment for labor and
materials in Tenant's
possession.
(b) Tenant shall pay when due all claims for labor and
material
contracted for by Tenant and furnished to the Property. Tenant
shall give
Landlord at least ten (10) days' prior written notice of the
commencement of any
work with an anticipated cost of One Hundred Fifty Thousand
Dollars
($150,000.00) in Constant Dollars (defined below) or more on the
Property (other
than the initial Tenant Improvements), regardless of whether
Landlord's consent
to such work is required. Notwithstanding any language to the
contrary in this
Section 6.05, with respect to any Tenant's Alterations,
regardless of whether
Landlord's consent to such work is
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required under the terms of this Lease, Tenant acknowledges
Nevada law may
require Tenant to record a notice of posted security in
compliance with the
requirements of Nev. Rev. Stat. Chapter 108 (2005) (the "POSTED
SECURITY
REQUIREMENTS"). Concurrently with Landlord's delivery of this
Lease to Tenant
for execution, Landlord may elect to provide Tenant with a
separate written
notice of the Posted Security Requirements, which shall include
an
acknowledgement of Tenant (the "NOTICE AND ACKNOWLEDGEMENT"). If
so provided,
Tenant agrees to promptly sign and return the Notice and
Acknowledgment to
Landlord; provided, however, that Tenant acknowledges and agrees
that under no
circumstances shall such Notice and Acknowledgement or the terms
of this Section
6.05 be construed as Landlord's consent to or approval of any
Tenant's
Alterations; and provided that the Notice and Acknowledgment
shall be in form
reasonably satisfactory to Tenant. Landlord may elect to record
and post notices
of non-responsibility on the Property. "CONSTANT DOLLARS" means
the value of the
U.S. dollar to which such phrase refers, as adjusted from time
to time. An
adjustment shall occur on the first (1st) day of January of the
sixth (6th) full
calendar year following the date of this Lease, and thereafter
at five (5) year
intervals. Constant Dollars shall be determined by multiplying
the dollar amount
to be adjusted by a fraction, the numerator of which is the
Current Index Number
and the denominator of which is the Base Index Number. The "Base
Index Number"
shall be the level of the Index for the calendar month during
which this
Declaration is recorded in the Official Records; the "Current
Index Number"
shall be the level of the Index for the calendar month that
corresponds to the
month of the date of this Lease of the year preceding the
adjustment year; the
"Index" shall be the Consumer Price Index for All Urban
Consumers, published by
the Bureau of Labor Statistics of the United States Department
of Labor for U.S.
City Average, All Items (1996=100), or any successor index
thereto as
hereinafter provided. If publication of the Index is
discontinued, or if the
basis of calculating the Index is materially changed, then
Landlord shall
substitute for the Index comparable statistics as computed by an
agency of the
United States Government or, if none, by a substantial and
responsible
periodical or publication of recognized authority most closely
approximating the
result which would have been achieved by the Index.
(c) To the extent Landlord's prior consent is required by
this
Section 6.05, Landlord may condition its consent to any proposed
Tenant's
Alterations on: (i) Tenant's submission to Landlord, for
Landlord's prior
written approval, of all plans and specifications relating to
Tenant's
Alterations; (ii) Tenant's written notice of whether Tenant's
Alterations
include the use or handling of any Hazardous Materials; (iii)
Tenant's
obtaining, for Landlord's benefit and protection, of such
insurance as Landlord
may reasonably require (in addition to that required under
Section 4.04 of this
Lease); (iv) Tenant's compliance with the requirements of Nev.
Rev. Stat.
Chapter 108 (2005) or any applicable successor statute; and (v)
Tenant's payment
to Landlord of all reasonable costs and expenses incurred by
Landlord because of
Tenant's Alterations other than the initial Tenant Improvements,
including
without limitation, costs incurred in reviewing the plans and
specifications
for, and inspecting the progress of, Tenant's Alterations;
provided, however,
that Landlord shall only be entitled to such payment to the
extent such work
affects (i) the drainage or grade of the Property, or (ii)
structural components
(including the floor slabs) of any improvements on the Building
Premises. Such
reasonable cost and expenses shall include the standard hourly
charges incurred
by Landlord when using employees of Commerce Construction Co.,
L.P. ("LANDLORD'S
CONTRACTOR") for such review and inspection.
(d) Upon imposition of any lien resulting from construction
of
Tenant's Alterations contracted for by Tenant (an "IMPOSITION"),
Tenant shall
either (i) cause the same to be released, if recorded, or (ii)
diligently
contest such Imposition and indemnify, defend, and hold Landlord
harmless from
any and all loss, cost, damage, liability and expense (including
attorney's
fees) arising from or related to it; provided, however, that
consistent with
Article Seventeen below, if the Master Landlord requires the
removal of any such
Imposition, Tenant shall comply with the terms of the Master
Lease and either
bond against or discharge the same within the time period
provided in the Master
Lease. Notwithstanding the above, in case of an Imposition for
the claimed cost
of work, materials or equipment furnished in construction of the
Tenant
Improvements by Landlord pursuant to Section 14.02 below, the
provisions of this
Section 6.05(d) shall not apply, unless at the time or recording
of the
Imposition (i) all of that claimed cost has been approved by
Tenant's Architect
for payment as provided in Section 14.02(a) below and (ii)
twenty (20) days or
more have expired following that approval without payment by
Tenant to Landlord
as provided in Section 14.02 below.
(e) Notwithstanding any language to the contrary in this
Section
6.05, if the proposed Tenant's Alterations (other than the
Tenant Improvements,
which are to be constructed subject to the provisions of Article
Fourteen
below), materially affect one or more of the structural
components of the
Building, or life safety
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matters, including, but not limited to, the Building's or
Project's fire
suppression system, Landlord's prior written consent will be
required.
(f) Tenant acknowledges and agrees that any Tenant's Alterations
are
wholly optional with Tenant and are not being required by
Landlord, either as a
condition to the effectiveness of this Lease or otherwise.
Section 6.06. CONDITION UPON TERMINATION. Subject to the
provisions
of Article Seven and Article Eight below, upon the termination
of this Lease,
Tenant shall surrender the Property to Landlord, broom clean and
in good
condition and repair, ordinary wear and tear excepted; provided,
however, Tenant
shall not be obligated to repair any damage which Landlord is
required to repair
under Article Seven (Damage or Destruction) below, if any, or
make any repairs
for which Landlord is responsible hereunder. Landlord may
require Tenant to
remove any Tenant's Alterations (whether or not made with
Landlord's consent)
prior to, or within thirty (30) days after, the expiration of
this Lease and to
restore the Building to its prior condition at Tenant's expense;
provided,
however, that Tenant shall not have any obligation to remove any
Building Shell
Improvements or Tenant Improvements save and except those
described on Exhibit
"J" attached hereto and by this reference incorporated herein,
and then only if
requested by Landlord to do so at least one hundred eighty (180)
days prior to
the expiration or earlier termination of this Lease (or such
shortened period if
the 180-day notice is not practicable under the circumstances,
such as in case
of an early termination based on an Event of Default). All
alterations,
additions and improvements which Tenant does not remove shall
become Landlord's
property if surrendered to Landlord upon the expiration or
earlier termination
of this Lease. Tenant may remove any of Tenant's machinery,
equipment (including
Tenant's Telecommunication Equipment), trade fixtures and other
personal
property. Tenant shall repair, at Tenant's expense, any damage
to the Building
or Building Premises caused by the removal of any such
machinery, equipment,
fixtures or personal property (including, without limitation,
the complete
removal of all studs and bolts that penetrate the floor or walls
and filling and
patching the holes). In no event, however, shall Tenant remove
any of the
following materials or equipment (which shall be deemed
Landlord's property)
from the Building or Building Premises without Landlord's prior
written consent:
any power wiring and power panels; lighting and lighting
fixtures; wall
coverings; drapes, blinds and other window coverings; carpets
and other floor
coverings; heaters, air conditioners and any other heating and
air conditioning
equipment; fencing and security gates; load levelers, dock
lights, dock locks
and dock seals; and other similar building operating equipment
and decorations.
Tenant's obligations under this Section 6.06 shall also include
its obligations
under Section 5.04 with respect to any Sign.
ARTICLE SEVEN DAMAGE OR DESTRUCTION
Section 7.01. DAMAGE OR DESTRUCTION TO PROPERTY.
(a) In case of damage to or destruction of Building Shell
Improvements other than the ESFR System, or any part of those
Building Shell
Improvements by fire or other casualty, Tenant will promptly
give written notice
thereof to Landlord and shall, in accordance with the provisions
of this Article
and all other provisions of this Lease, commence and complete
restoration of the
Base Building Shell Improvements and Common Area Improvements on
the Building
Premises (other than the ESFR System) in conformance with the
Base Building
Shell Plans together with such Building Modifications as Tenant
elects to
restore and such Tenant Improvements and other Tenant's
Alterations as Tenant
elects to restore. In any such event, Tenant shall also have the
right to make
additional alterations in conformity with and subject to the
conditions of
Section 6.05 above, and in conformity with the plans and
specifications required
to be prepared pursuant to this Section 7.01. Tenant's
obligations in this
Section 7.01(a) shall be effective whether or not (i) such
damage or destruction
has been insured or was insurable, (ii) Tenant is entitled to
receive any
insurance proceeds, or (iii) insurance proceeds are sufficient
to pay in full
the cost of the restoration work in connection with such
restoration. Such
restoration shall be commenced promptly and shall be prosecuted
and completed
expeditiously, Force Majeure Delays excepted. Landlord, its
agents and
mortgagees, may, from time to time, inspect the restoration upon
reasonable
advance notice to Tenant during normal business hours, subject
to the provisions
of Section 5.06 above. In case of damage to or destruction of
the ESFR System,
other Common Area Improvements not located on the Building
Premises, or any part
thereof by fire or other casualty, Landlord shall promptly
commence and shall
expeditiously prosecute and complete the restoration thereof,
Force Majeure
Delays, excepted. Any restoration or rebuilding of the Building
shall be in
conformance with such building code and other Applicable Law
requirements as
shall permit the issuance of a certificate of occupancy for the
restored or
reconstructed Building by Clark County, Nevada, or such other
governmental
entity as shall have jurisdiction with respect thereto.
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(b) In the event of any damage or destruction of the Base
Building
Shell Improvements, or any substantial part thereof by fire or
other casualty,
if the anticipated cost of repair exceeds One Hundred Fifty
Thousand Dollars
($150,000.00) in Constant Dollars, Tenant agrees to furnish to
Landlord at least
ten (10) days before the commencement of the restoration of such
damage or
destruction, the following:
(i) Complete plans and specifications for such restoration
prepared by a licensed and reputable architect (the
"ARCHITECT"), which plans
and specifications shall meet with the reasonable approval of
Landlord, and
Landlord's mortgage lender, together with the approval thereof
by all
governmental authorities then exercising jurisdiction with
regard to such work.
(ii) Contracts then customary in the trade with (a) the
Architect, and (b) with a reputable and responsible contractor
providing for the
completion of such restoration in accordance with said plans and
specifications.
(iii) Certificates of insurance required by this Lease.
(c) All insurance claims shall be adjusted as provided in
Section
4.04(d)(ix) above, and insurance proceeds shall be applied to
the payment of the
cost of the restoration, including the cost of temporary repairs
or for the
protection of the Property pending the completion of permanent
restoration (all
of which temporary repairs, protection of the Property and
permanent restoration
are hereinafter collectively referred to as the "RESTORATION"),
from time to
time as such Restoration progresses. Insurance proceeds for the
Base Building
Shall Improvements shall be received by Tenant in trust for the
purposes of
paying the cost of Restoration of Base Building Shell
Improvements.
(d) If the net insurance proceeds shall be insufficient to pay
the
entire cost of such Restoration, Tenant will pay the
deficiency.
(e) If the Property shall be partially or totally damaged or
destroyed by fire or other casualty, except as provided in
paragraph (f) below,
Tenant shall restore such damage or destruction as previously
provided in this
Section 7.01, Base Rent and Additional Rent shall continue to be
due and payable
as if no damage or destruction had occurred, and this Lease
shall remain in full
force and effect. In no event shall Base Rent or Additional Rent
abate, nor
shall this Lease terminate (subject to paragraph (f) below) by
reason of such
damage or destruction.
(f) Notwithstanding anything in this Lease to the contrary, in
case
of damage to or destruction of Building during the last year of
the Lease Term
(including the last year of any previously exercised Lease Term
Extension), and
if such damage will require more than one hundred twenty (120)
days to
substantially complete the repair, then Tenant shall have the
right and option
to terminate this Lease upon written notice to Landlord
dispatched within ninety
(90) days after such damage or destruction. In such event,
Tenant shall have the
right and option to do either of the following: (i) commence and
complete
restoration of the Base Building Shell Improvements together
with such Building
Modifications as Tenant elects to restore and such Tenant
Improvements and other
Tenant's Alterations as Tenant elects to restore, or (ii)
demolish and remove
the Building and pay to Landlord the full replacement cost of
the Base Building
Shell Improvements (including any sums necessary to replace the
Base Building
Shell Improvements in conformance with such building code and
other Applicable
Law requirements as shall permit the issuance of a certificate
of occupancy for
the replaced Building), and this Lease shall terminate upon such
restoration or
upon such demolition and payment. Any Restoration or rebuilding
of the Building
shall be in conformance with such building code and other
Applicable Law
requirements as shall permit the issuance of a certificate of
occupancy for the
restored or reconstructed Building by Clark County, Nevada or
such other
governmental entity as shall have jurisdiction with respect
thereto.
Section 7.02. WAIVER. Tenant waives the protection of any
statute,
code or judicial decision which may grant to Tenant the right to
terminate a
lease in the event of the destruction of the leased property.
Tenant agrees that
the provisions of Article Seven above shall govern the rights
and obligations of
Landlord and Tenant in the event of any destruction to the
Property.
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ARTICLE EIGHT CONDEMNATION
If all or any portion of the Property is taken under the power
of
eminent domain or sold under the threat of that power (all of
which are called
"CONDEMNATION"), this Lease shall terminate as to the part taken
or sold on the
date the condemning authority takes title or possession,
whichever occurs first.
If a Condemnation occurs (i) through which any material portion
of the Building
is taken or (ii) through which one acre or more of Property land
is taken or one
acre or more of Property land will have been cumulatively taken
through that
Condemnation and any prior Condemnation, or (iii) through which
Property land is
taken after more than one acre of Property land has already been
taken through
prior Condemnation, then Tenant may terminate this Lease as of
the date the
condemning authority takes title or possession, by delivering
written notice to
Landlord, within ninety (90) days after the condemning authority
takes title or
possession. If Tenant does not terminate this Lease, this Lease
shall remain in
effect as to the portion of the Property not taken, except that
the Base Rent
and Additional Rent shall be reduced equitably in the same
proportion that the
value of the Property taken bears to the value of the Property
prior to such
Condemnation. If Landlord and Tenant are unable to agree upon
the amount of such
reduction, the values shall be determined by process of
appraisal, in the same
manner set forth in Section 2.05(d) above for determining fair
rental value. If
this Lease is not terminated, Tenant shall repair any damage to
the Building
Shell Improvements and Common Area Improvements on the Building
Premises other
than the ESFR System, and Landlord shall repair any damage to
the ESFR System
and the Common Area Improvements not located on the Building
Premises. If the
damages received by Tenant are not sufficient to pay for repairs
to be made by
Tenant, Tenant shall pay any amount in excess of such award
necessary to
complete such repair. Tenant shall be entitled to all of any
award or payment
made for (i) any such repair or restoration to be made by
Tenant, (ii) the
Building Modifications, (iii) Tenant Improvements and (iv) any
other Tenant
Alterations, including buildings and other real property
improvements on the
Additional Land, and Landlord hereby assigns to Tenant any
interest in any such
awards or payments. Landlord shall be entitled to all of any
award or payment
made for Common Area Improvements and Base Building Shell
Improvements (save and
except any award or payment to be made to Tenant for repair or
restoration of
Common Area Improvements or the Building), and Tenant hereby
assigns to Landlord
any interest in any such awards or payments. Landlord and Tenant
shall be
entitled to assert and make claim for any other award or payment
in connection
with any Condemnation, according to their respective interests
in the Property.
Landlord's mortgage lender shall also be permitted to
participate in any such
proceeding.
ARTICLE NINE ASSIGNMENT AND SUBLETTING
Section 9.01. TRANSFERS. Subject to all of the terms of this
Article
Nine, Tenant shall not, without the prior written consent of
Landlord, assign,
mortgage, pledge, encumber or otherwise transfer, this Lease or
any interest
hereunder, permit any assignment or other such foregoing
transfer of this Lease
or any interest hereunder by operation of law, or sublet the
Property or any
part thereof (all of the foregoing are hereinafter sometimes
referred to
collectively as "TRANSFERS" and any person to whom any Transfer
is made or
sought to be made is hereinafter sometimes referred to as a
"TRANSFEREE"). To
request Landlord's consent to any Transfer requiring such
consent under the
provisions of this Article Nine, Tenant shall notify Landlord in
writing, which
notice (the "TRANSFER NOTICE") shall include (i) the proposed
effective date of
the Transfer, which shall not be less than forty-five (45) days
after the date
of delivery of the Transfer Notice, (ii) a description of the
portion of the
Property to be transferred (the "SUBJECT SPACE"), (iii) all of
the terms of the
proposed Transfer and the consideration therefor, including a
calculation of the
Transfer Premium (defined below) in connection with such
Transfer (if
applicable), the name and address of the proposed Transferee,
and a copy of all
existing documentation pertaining to the proposed Transfer,
including all
existing operative documents to be executed to evidence such
Transfer or the
agreements incidental or related to such Transfer, and (iv)
current financial
statements of the proposed Transferee certified by an officer,
partner or owner
thereof, and any other information reasonably required by
Landlord, which will
enable Landlord to determine the financial responsibility,
character, and
reputation of the proposed Transferee, nature of such
Transferee's business and
proposed use of the Subject Space, and such other information as
Landlord may
reasonably require. Any Transfer requiring but made without
Landlord's prior
written consent shall, at Landlord's option, be null, void and
of no effect, and
if not terminated and rescinded upon expiration of the notice
and cure periods
in Section 10.02 (c), shall, at Landlord's option, constitute a
material default
by Tenant under this Lease.
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Section 9.02. LANDLORD'S CONSENT. Landlord shall not
unreasonably
withhold its consent to any proposed Transfer of the Subject
Space to the
Transferee on the terms specified in the Transfer Notice. The
parties hereby
agree that it shall be reasonable under this Lease and under any
applicable law
for Landlord to withhold consent to any proposed Transfer where
one or more of
the following apply, without limitation as to other reasonable
grounds for
withholding consent:
9.02.1 The Transferee's business or use of the Subject Space is
not
permitted under this Lease and Landlord decides, upon the
exercise of its
reasonable discretion, not to approve such new use;
9.02.2 Any proposed assignee Transferee is not a party of
reasonable
financial worth and/or financial stability in light of the
responsibilities
involved under this Lease on the date consent is requested;
or
9.02.3 The proposed Transfer would cause Landlord to be in
violation
of another lease or agreement to which Landlord is a party.
If Landlord consents to any Transfer pursuant to the terms of
this
Section 9.02), Tenant may within one year after Landlord's
consent, but not
later than the expiration of such year period, enter into such
Transfer of the
Property or portion thereof, upon substantially the same terms
and conditions as
are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to
Section 9.01 of this Lease.
Section 9.03. TRANSFER PREMIUM. During any Extension (but not
during
the initial Lease Term), in the event of a Transfer of Subject
Space consisting
of warehouse area on the ground floor of the Building, and if
the Transfer
requires Landlord's consent, if Landlord consents to such a
Transfer, as a
condition thereto which the parties hereby agree is reasonable,
Tenant shall pay
to Landlord fifty percent (50%) of any "TRANSFER PREMIUM," as
that term is
defined in this Section 9.03, received by Tenant from such
Transferee, as
received by Tenant from the Transferee. "Transfer Premium" shall
mean all rent,
additional rent or other consideration payable by such
Transferee for the ground
floor warehouse area in excess of the Rent payable by Tenant
under this Lease
for the area on a per rentable square foot basis if less than
all of the
Building is transferred, less the total of actual and reasonable
expenses
incurred by Tenant in connection with such Transfer (e.g.,
tenant improvement
costs, legal fees, leasing commission, etc., if applicable). All
of the
foregoing sums shall be offset against first due Transfer
Premium payments
otherwise payable to Landlord. "Transfer Premium" shall also
include, but not be
limited to, key money and bonus money paid by Transferee to
Tenant in connection
with such Transfer, and any payment in excess of fair market
value for services
rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment,
or furniture transferred by Tenant to Transferee in connection
with such
Transfer. Notwithstanding any language to the contrary in this
Section 9.03,
Tenant shall not be responsible for payment of any Transfer
Premium otherwise
payable in connection with a subletting by the original Tenant
of up to fifty
thousand (50,000) square feet of ground floor warehouse area in
the Building.
Section 9.04. TRANSFER INVOLVING A PERMITTED USE.
Notwithstanding
anything to the contrary contained in Section 9.01 above, a
Transfer by the
original Tenant or a Tenant Affiliate of the original Tenant of
a portion of the
Building to a subtenant for a Permitted Use shall not be deemed
a Transfer for
which Landlord's consent is required. Further, notwithstanding
anything to the
contrary contained in Section 9.01 above, a Transfer by the
original Tenant to a
Tenant Affiliate of the original Tenant of a portion of the
Property other than
the Building to a subtenant for a Permitted Use shall not be
deemed a Transfer
for which Landlord's consent is required if (i) the Transfer
includes an area of
the Building Premises or Additional Land incident to, ancillary
to, and as a
part of a Transfer of a portion of the Building, (ii) the
Transferee is a
vendor, supplier, contractor or co-venturer of Tenant, or (iii)
the Permitted
Uses for which the Subject Space may be utilized by the
Transferee are uses
relating to or in support of Tenant's activities as a public
utility. Tenant
shall promptly notify Landlord of any such Transfer and promptly
supply Landlord
with any documents or information reasonably requested by
Landlord regarding
such Transfer. Any such sublease shall still comply with the
provisions of
Section 9.08 below. Notwithstanding the foregoing provisions of
this Section
9.04, any sublease of a portion of the Property for any use
which (i) is a
Permitted Use, but which would create an unusual or atypical
wear and tear on
the Building, different in nature and degree from that which
results from the
original Tenant's use of the Property, (ii) is a Permitted Use,
but which would
involve the use, handling, storage or disposal of material
amounts of Hazardous
Materials other than those which are the same or similar to
those used by the
original Tenant and in quantities and processes similar to the
original Tenant's
uses, or (iii) is not a Permitted Use, shall require the prior
written consent
of Landlord.
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Section 9.05. EFFECT OF TRANSFER. If Landlord consents to a
Transfer, (i) the terms and conditions of this Lease shall in no
way be deemed
to have been waived or modified, (ii) such consent shall not be
deemed consent
to any further Transfer by either Tenant or a Transferee, (iii)
Tenant shall
deliver to Landlord, promptly after execution, a copy of
executed Transfer
documentation pertaining to the Transfer, (iv) Tenant shall
furnish upon
Landlord's request a complete statement certified by an
independent certified
public accountant, or Tenant's chief financial officer, setting
forth in detail
the computation of any Transfer Premium Tenant has derived and
shall derive from
such Transfer (if applicable), and (v) no Transfer relating to
this Lease or
agreement entered into with respect thereto, whether with or
without Landlord's
consent, shall relieve Tenant or any guarantor (if applicable)
of Tenant's
obligations under this Lease from liability under this Lease.
Landlord or its
authorized representatives shall have the right at all
reasonable times to audit
the books, records and papers of Tenant relating to any Transfer
Premium, and
shall have the right to make copies thereof. If the Transfer
Premium respecting
any Transfer shall be found understated, Tenant shall, within
thirty (30) days
after demand, pay the deficiency and the reasonable costs of
such audit.
Section 9.06. INTENTIONALLY OMITTED.
Section 9.07. TENANT AFFILIATE. Notwithstanding anything to
the
contrary contained in Section 9.01 above, a Transfer of all or a
portion of the
Property or any interest of Tenant in this Lease to a Tenant
Affiliate (as
defined below), shall not be deemed a Transfer under this
Article Nine for which
consent is required provided that (i) if such Transfer is an
assignment, the
Tenant Affiliate assumes in writing all of Tenant's obligations
under this
Lease; and (ii) such Transfer is not a subterfuge by Tenant to
avoid its
obligations under this Lease. Tenant shall promptly notify
Landlord of any such
transfer and promptly supply Landlord with copies of any
applicable documents of
transfer regarding such Transfer. For purposes of this Lease, a
"TENANT
AFFILIATE" means (i) an entity which is controlled by, controls,
or is under
common control with Tenant, (ii) an entity resulting from a
merger of,
consolidation with, or reorganization of Tenant or (iii) a
Permitted Purchaser
(as defined below). "CONTROL," as used herein, shall mean the
ownership,
directly or indirectly, of at least twenty percent (20%) of the
voting
securities of, or possession of the right to vote, in the
ordinary direction of
its affairs, of at least twenty percent (20%) of the voting
interest in, any
person or entity. Tenant may assign this Lease, without
Landlord's consent, to
any entity to which all or substantially all of Tenant's assets
are sold, so
long as (a) such purchaser has a tangible net worth (as
determined according to
GAAP then in effect) equal to or greater than One Hundred
Million Dollars
($100,000,000.00), and (b) Tenant complies with the requirements
stated above in
this Section 9.07 with respect to a Transfer involving a Tenant
Affiliate. The
original Tenant may also assign this Lease, without Landlord's
consent, to any
entity to which other material assets of the original Tenant are
sold, so long
as (a) such purchaser has a tangible net worth (as determined
according to GAAP
then in effect) equal to or greater than One Hundred Million
Dollars
($100,000,000.00), (b) Tenant complies with the requirements
stated above in
this Section 9.07 with respect to a Transfer involving a Tenant
Affiliate and
(c) the original Tenant remains liable for its obligations under
this Lease as
provided in Section 9.05. An assignee described in either of the
two immediately
preceding sentences is a "PERMITTED PURCHASER."
Section 9.08. TRANSFER INVOLVING SUBLEASE. Every approved
sublease
transaction shall be evidenced by a written sublease (the
"SUBLEASE") between
Tenant and the subtenant (the "SUBTENANT"). The Sublease or,
where applicable,
Landlord's written consent required under Section 9.01 above, to
which Tenant
and Subtenant shall be parties (the "CONSENT"), shall comply
with the following
requirements:
(i) The Sublease shall be subject to, and shall incorporate
by
reference, all of the terms and conditions of this Lease, except
those terms and
conditions relating to Base Rent, Additional Rent, and any other
amount due
under this Lease. Subtenant shall acknowledge in the Sublease or
Consent that it
has reviewed and agreed to all of the terms and conditions of
this Lease.
Subtenant shall agree in the Sublease or Consent not to do, or
fail to do,
anything that would cause Tenant to violate any of its
obligations under this
Lease.
(ii) The Sublease or Consent shall contain, in full, any use
restrictions or other provisions of this Lease that affect the
use of the
Property.
(iii) The Sublease or Consent shall contain a waiver of
subrogation
against Landlord, and any Consent shall contain a waiver of
subrogation by
Landlord against Subtenant.
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(iv) The Sublease or Consent shall prohibit a sub-subletting of
the
Property or the assignment of the Sublease by Subtenant, without
first obtaining
Landlord's consent if Landlord's consent to the Sublease was
required in this
Lease.
(v) The Sublease or Consent shall require Subtenant, acting
through
Tenant, to obtain Landlord's prior written consent to any
alterations to the
Property, to the extent Tenant is required by this Lease to
obtain such consent.
(vi) The Sublease or Consent shall provide that, at
Landlord's
option, the Sublease shall not terminate in the event that this
Lease
terminates. The Sublease shall require Subtenant to execute an
attornment
agreement, if Landlord, in its sole and absolute discretion,
shall elect to have
the Sublease continue beyond the date of termination of this
Lease. Such
attornment agreement shall provide that Subtenant confirms it is
in direct
privity of contract with Landlord and that all obligations owed
to Tenant under
the Sublease shall become obligations owed to Landlord for the
balance of the
term of the Sublease.
(vii) The Sublease or Consent shall provide that unless and
until
such time as an attornment agreement is executed by Subtenant
pursuant to the
terms and conditions of the preceding subsection (vi), nothing
contained in the
Sublease shall create or shall be construed or deemed to create
privity of
contract or privity of estate between Landlord and
Subtenant.
(viii) The Sublease or Consent shall provide that Subtenant
shall
have no right (and shall waive any rights it may have) under the
Sublease to
hold Landlord responsible for any liability in connection with
the Property,
including, without limitation, any liability arising from the
noncompliance with
any federal, state, or local laws applicable to the
Property.
(ix) The Sublease or Consent shall provide that nothing in
the
Sublease shall amend or shall be construed or deemed to amend
this Lease.
SECTION 9.09. NO MERGER. No merger shall result from Tenant's
sublease of
the Property under this Article Nine, Tenant's surrender of this
Lease or the
termination of this Lease in any other manner. In any such
event, Landlord may
terminate any or all subtenancies or succeed to the interest of
Tenant as
sublandlord under any or all subtenancies.
Section 9.10. RIGHT TO MORTGAGE LEASEHOLD INTEREST.
Notwithstanding any
language to the contrary in this Article Nine, Tenant and any
Tenant Affiliate,
shall have the right, from time to time, without Landlord's
prior written
consent or approval, to mortgage and encumber Tenant's interest
in this Lease
and its leasehold interest in the Property. Any such leasehold
mortgage is
herein referred to as a "Leasehold Mortgage" or "permitted
Leasehold Mortgage"
As used in this Section and throughout this Lease, the noun
"mortgage" shall
include a deed of trust or other security instrument (whether in
the nature of a
security agreement, assignment, collateral assignment or
otherwise); the verb
"mortgage" shall include the granting or creation of a deed of
trust or other
such security instrument; the word "mortgagee" shall include the
beneficiary
under a deed of trust or other such secured party or assignee;
and the phrase
"Leasehold Mortgagee" or "permitted Leasehold Mortgagee" shall
mean a mortgagee
of or with respect to a Leasehold Mortgage.
Section 9.11. RIGHT TO NOTICES. If Tenant shall mortgage this
Lease in
accordance with Section 9.10 above and shall have furnished
Landlord the name
and mailing address of the Leasehold Mortgagee, then Landlord
shall give such
Leasehold Mortgagee, at the address specified by Tenant (as the
same may be
changed, from time to time, by Tenant or such Leasehold
Mortgagee by notice
given Landlord in conformance with Section 16.06 below and in
the manner
required by Section 16.06 below), duplicate copies of all
notices to Tenant and
all documents and suits delivered to or served upon Tenant, and
notwithstanding
anything in this Lease to the contrary, no notice intended for
Tenant shall be
deemed properly given, and no Event of Default hereunder shall
be deemed to have
occurred unless Landlord shall have given the Leasehold
Mortgagee a copy of its
notices to Tenant relating to such Event of Default. Further,
notwithstanding
anything in this Lease to the contrary, no Event of Default
shall have occurred,
Landlord shall not be empowered to terminate this Lease and this
Lease shall not
expire by reason of the occurrence of any Event of Default
hereunder unless
Tenant's applicable cure period with respect to such Event of
Default shall have
expired without cure or commencement of cure as provided in
Section 10.02, and
an additional
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Las Vegas, Nevada
Nevada Power Company
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fifteen (15) business days shall have expired without cure or a
failure of
performance following receipt by the Leasehold Mortgagee
entitled to notice
under the provisions of this Section of written notice from
Landlord specifying
(i) the nature of the potential Event of Default, (ii) this
Lease Section
together with the Lease Section requiring the applicable
performance, (iii) that
the applicable period for Tenant's cure o
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