Exhibit 10.1


 


LEASE


 


THIS LEASE (this “Lease”) is entered into as of August 25,
2006 between DFA, LLC (“Lessor”)
and AHERN RENTALS, INC. (“Lessee”).


 


RECITALS


 


A.            Lessee wishes to
lease from Lessor that certain real property and the building(s) and other improvements
located at 1890 South 500 West, Salt Lake City, UT 84115, consisting of
approximately 4.66 acres, as more particularly described on the attached Exhibit
A (the “Premises”).


 


B.            Lessor hereby leases
the Premises to Lessee, and Lessee hereby leases the Premises from Lessor, on
the terms and conditions set forth in this Lease.


 


TERMS AND CONDITIONS


 


Term.


 


1(a)         The term of this
Lease shall commence on September 1, 2006 and continue through October 27, 2014,
unless sooner terminated.


 


Rental.


 


1(b)(1)    Lessee shall pay to
Lessor as rent for the Premises the sum of $22,125.00 per month during the
first year of the lease term.


 


1(b)(2)    Commencing on November 1,
2006 and on each November 1st (each, an “Annual Rent Adjustment Date”) during the remainder of the
lease term, the monthly rent payment shall be increased by an amount equal to
the greater of (i) three percent (3%) of the monthly rental rate paid for the
prior year, or (ii) the same percentage as the percentage increase in the Consumer Price Index comparing the figure
for the month prior to the month in which the adjustment is to occur with the
figure for the same month in the preceding year, except that if the rent is
adjusted pursuant to Section 1(b)(3) the percentage under this clause (ii) to be
used for calculating the applicable increase in rent to commence on the next
Annual Rent Adjustment Date following a Major Improvement Rent Adjustment Date
(as defined in Section 1(b)(3) below) shall mean the same percentage as the
percentage increase in the Consumer Price
Index comparing the figure for the month prior to the month in which
the adjustment is to occur with the figure for the month prior to the preceding
Major Improvement Rent Adjustment Date. Comparisons shall be made using the Index for the U.S. City Average — All Urban Wage
Earners published by the U.S. Department of Labor, Bureau of Labor
Statistics. If that Index is discontinued, the parties shall use the nearest
comparable index measuring changes in the cost of living during the period involved.
The initial rental increase effective November 1, 2006 shall be calculated at 2/12
of the annual rate.


 


1(b)(3)    In the event during the
term of this Lease, Lessor constructs any Major Improvement (defined below) on
the Premises for Lessee’s benefit, beginning on the first day of the second
calendar month following the date of completion of the Major Improvement (a 


 


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“Major Improvement Rent Adjustment
Date”) the monthly rent shall be adjusted to be the fair market
rental value of the Premises as of the completion of the Major Improvement,
provided in no event shall the monthly rent be less than the monthly rent in
effect immediately prior to the construction of the Major Improvement. Upon
completion of the Major Improvement, the parties shall discuss and attempt to
determine by mutual agreement the monthly rent to be paid beginning on the
Major Improvement Rent Adjustment Date. If the parties are unable to reach
agreement before the 30th day following the completion of the Major
Improvement, the matter shall be determined by appraisal.


 


If an appraiser is required under this Section 1(b)(3), the monthly
rent shall be determined by a qualified, independent real property appraiser
familiar with commercial rental values in the area. The appraiser shall be
selected by Lessee from a list of not fewer than three such individuals
submitted by Lessor. If Lessee does not make the selection within ten days
after submission of the list, Lessor may do so. If Lessor does not submit such
a list within ten (10) days after written request from Lessee to do so, Lessee
may name as an appraiser any individual with such qualifications. Within thirty
(30) days after appointment, the appraiser shall furnish to both parties an
appraisal of the fair market rental value of the Premises, which shall be final
and binding on the parties. The cost of the appraisal shall be borne equally by
the parties.


 


For purpose of this Lease “Major
Improvement” shall mean a structure erected at the request of the
Lessee as a permanent improvement on the Premises that is intended to enhance
the value of the Premises or an addition made at the request of the Lessee that
increases the size of a building on the Premises or the size of the Premises.


 


1(b)(4)    Rent will be paid in
advance on the first day of each month to Lessor at the address for Lessor set
forth in this Lease, or at such other address as Lessor may designate in
writing to Lessee. Rent is uniformly apportionable day to day.


 


Use of Premises.


 


(2a)         The Lessee shall use
the Premises during the term of this lease for the conduct of the following
business: operations of an equipment rental company and for no other purpose
whatsoever without Lessor’s written consent.


 


(2b)         The Lessee will not
make any unlawful, improper or offensive use of the Premises; the Lessee will
not suffer any strip or waste thereof; the Lessee will not permit any
objectionable noise or odor to escape or to be emitted from the Premises or do
anything or permit anything to be done upon or about the Premises in any way
tending to create a nuisance; the Lessee will not sell or permit to be sold any
product, substance or service upon or about the Premises, excepting in the
ordinary course of Lessee’s business or such as Lessee may be licensed by law
to sell and as may be herein expressly permitted.


 


(2c)         The Lessee will not
cause the Premises at any time to fall into such a state of repair or disorder
as to increase the fire hazard thereon; the Lessee will not install any power
machinery on the Premises except in the ordinary course of Lessee’s business or
under the supervision and with written consent of the Lessor; the Lessee will
not store gasoline or other highly combustible materials on the Premises at any
time except in the ordinary course of 


 


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Lessee’s business; the Lessee will not use the Premises in such a way
or for such a purpose that the fire insurance on the improvements on the
Premises is thereby cancelled.


 


(2d)         The Lessee shall
comply at Lessee’s own expense with all laws and regulations of any municipal,
county, state, federal or other public authority respecting the use of the
Premises. These include, without limitation, all laws, regulations and
ordinances pertaining to air and water quality, Hazardous Materials as herein
defined, waste disposal, air emissions, and other environmental matters. As
used herein, Hazardous Material means any hazardous or toxic substance,
material, or waste, including but not limited to those substances, materials,
and waste listed in the U.S. Department of Transportation Hazardous Materials
Table or by the U.S. Environmental Protection Agency as hazardous substances
and amendments thereto, petroleum products, or such other substances,
materials, and waste that are or become regulated under any applicable local,
state, or federal law. Neither Lessee nor Lessor is required to make any
alterations to comply with the Americans with Disabilities Act.


 


(2e)         The Lessee shall
regularly occupy and use the Premises for the conduct of Lessee’s business, and
shall not abandon or vacate the Premises for more than ten days without written
approval of Lessor.


 


(2f)          Except in the
ordinary course of Lessee’s business, Lessee shall not cause or permit any
Hazardous Material to be brought upon, kept or used in or about the Premises by
Lessee, its agents, employees, contractors, or invitees without the prior
written consent of Lessor, which consent will not be unreasonably withheld so
long as Lessee demonstrates to Lessor’s reasonable satisfaction that such
Hazardous Material is necessary or useful to Lessee’s business and will be
used, kept, and stored in a manner that will comply at all times with all laws
regulating any such Hazardous Material so brought upon or used or kept on or
about the Premises.


 


Utilities.


 


(3)           The Lessee shall pay
for all heat, light, water, power, and other services or utilities used in the
Premises during the term of this lease.


 


Repairs and Improvements.


 


(4a)         The Lessor shall not
be required to make any repairs, alterations, additions or improvements to or
upon the Premises during the term of this lease, except only those hereinafter
specifically provided for; the Lessee hereby agrees to maintain and keep the
Premises, including all interior and exterior walls and doors, ordinary
maintenance of heating, ventilating and cooling systems, interior wiring,
plumbing and drain pipes to sewers or septic tank, in good order and repair
during the entire term of this lease, at Lessee’s own cost and expense, and to
replace all glass which may be broken or damaged during the term hereof in the
windows and doors of the Premises with glass of as good or better quality as
that now in use; it is further agreed that the Lessee may make alterations,
additions or improvements to or upon the Premises without first obtaining the
consent of the Lessor.


 


(4b)         The Lessor agrees to
make all necessary structural repairs to the building, including exterior
walls, foundation, roof, gutters and downspouts, and the abutting sidewalks. 


 


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Lessor shall also make all capital repairs and replacements to the
Premises unless such is necessitated solely by Lessee’s failure to maintain in
accordance with subsection 4(a). The Lessor reserves and at any and all times
shall have the right to alter, repair or improve the building of which the
Premises are a part, or to add thereto, and for that purpose at any time may
erect scaffolding and all other necessary structures about and upon the
Premises and Lessor and Lessor’s representatives, contractors and workers for
that purpose may enter in or about the Premises with such materials as Lessor
may deem necessary therefor, and Lessee waives any claim to damages, including
loss of business resulting therefrom, provided Lessor gives Lessee not less
than 48 hours’ advance notice and such activities are conducted without
material interference with Lessee’s use of the Premises.


 


Lessor’s Right of Entry.


 


(5)           It shall be lawful
for the Lessor, the Lessor’s agents and representatives, at any reasonable time
upon 48 hours’ advance notice to enter into or upon the Premises for the
purpose of examining into the condition thereof, or for any other lawful
purpose.


 


Right of Assignment.


 


(6)           The Lessee will not
assign, transfer, pledge, hypothecate, surrender or dispose of this lease, or
any interest herein, sublet, or permit any other person or persons whomsoever
to occupy the Premises without the written consent of the Lessor being first obtained
in writing; this lease is personal to Lessee; Lessee’s interests, in whole or
in part, cannot be sold, assigned, transferred, seized or taken by operation at
law, or under or by virtue of any execution or legal process, attachment or
proceedings instituted against the Lessee, or under or by virtue of any
bankruptcy or insolvency proceedings had in regard to the Lessee, or in any
other manner, except as above mentioned. Notwithstanding any provision in this
Lease, Lessee may, without Lessor consent, execute and deliver one or more
leasehold mortgages (or leasehold trust deeds) to any lender to Lessee with
respect hereto.


 


Liens.


 


(7)           The Lessee will not
permit any lien of any kind, type or description to be placed or imposed upon
the Lessee’s interest in improvements in which the Premises are situated, or
any part thereof, or Lessee’s interest in the land on which they stand.


 


Ice, Snow, Debris


 


(8)           If the Premises are
located at street level, then at all times Lessee shall keep the sidewalks in
front of the Premises free and clear of ice, snow, rubbish, debris and
obstruction; and if the Lessee occupies the entire building, the Lessee will
not permit rubbish, debris, ice or snow to accumulate on the roof of the
building so as to stop up or obstruct gutters or downspouts or cause damage to
the roof, and will save harmless and protect the Lessor against any injury
whether to Lessor or to Lessor’s property or to any other person or property
caused by Lessee’s failure in that regard.


 


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Overloading of Floors.


 


(9)           The Lessee will not
overload the floors of the Premises in such a way as to cause any undue or
serious stress or strain upon the building in which the Premises are located,
or any part thereof, and the Lessor shall have the right, at any time, to call
upon any competent engineer or architect whom the Lessor may choose, to decide
whether or not the floors of the Premises, or any part thereof, are being
overloaded so as to cause any undue or serious stress or strain on the
building, or any part thereof, and the decision of the engineer or architect
shall be final and binding upon the Lessee; and in the event that it is the
opinion of the engineer or architect that the stress or strain is such as to
endanger or injure the building, or any part thereof, then and in that event
the Lessee agrees immediately to relieve the stress or strain, either by
reinforcing the building or by lightening the load which causes such stress or
strain, in a manner satisfactory to the Lessor.


 


(10)         Intentionally Blank.


 


Liability Insurance.


 


(11)         At all times during
the term hereof, the Lessee will, at the Lessee’s own expense, keep in effect
and deliver to the Lessor liability insurance policies in form, and with an
insurer, satisfactory to the Lessor. Such policies shall insure both the Lessor
and the Lessee against all liability for damage to persons or property in,
upon, or about the Premises. It shall be the responsibility of the Lessee to
purchase casualty insurance with extended coverage so as to insure any
structure on the Premises against damage caused by fire or the effects of fire
(smoke, heat, means of extinguishment, etc.), or any other means of loss and to
insure all of the Lessee’s belongings upon the Premises, of whatsoever nature,
against the same. With respect to these policies, Lessee shall cause the Lessor
to be named as an additional insured party. Lessee agrees to and shall
indemnify and hold Lessor harmless against any and all claims and demands
arising from the negligence of the Lessee, Lessee’s officers, agents, invitees
and/or employees, as well as those arising from Lessee’s failure to comply with
any covenant of this lease on Lessee’s part to be performed, and shall at
Lessee’s own expense defend the Lessor against any and all suits or actions
arising out of such negligence, actual or alleged, and all appeals therefrom
and shall satisfy and discharge any judgment which may be awarded against
Lessor in any such suit or action.


 


Fixtures.


 


(12)         All partitions, plumbing,
electrical wiring, additions to or improvements upon the Premises, whether
installed by the Lessor or Lessee, shall be and become a part of the building
in which the Premises are located as soon as installed and the property of the
Lessor unless otherwise herein provided. Notwithstanding any other provisions
of this Lease, Lessee’s furniture, trade fixtures, equipment and personal
property shall at all times remain the property of Lessee.


 


Light and Air.


 


(13)         This lease does not
grant any rights of access to light and air over the Premises or any adjacent
property.


 


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Damage by Casualty, Fire and Duty to Repair.


 


(14)         In the event of the
destruction of the improvements in which the Premises are located by fire or
other casualty, either party hereto may terminate this lease as of the date of
fire or casualty, provided, however, that in the event of damage to the
improvements by fire or other casualty to the extent of twenty-five (25) percent
or more of the sound value thereof, Lessor or Lessee may elect to terminate the
lease as of the date of such damage by written notice thereof to the other
party. Absent such termination by either party or if the improvements in which
the Premises are located be but partially destroyed and the damage so
occasioned shall not amount to the extent indicated above, then the Lessor
shall repair the same with all convenient speed and shall have the right to
take possession of and occupy, to the exclusion of the Lessee, all or any part
thereof in order to make the necessary repairs, and the Lessee hereby agrees to
vacate upon request, all or any part thereof which the Lessor may require for
the purpose of making necessary repairs, and for the period of time between the
day of such damage and until such repairs have been substantially completed
there shall be such an abatement of rent as the nature of the injury or damage
and its interference with the occupancy of the Premises by the Lessee shall
warrant; however, if the Premises be but slightly injured and the damage so
occasioned shall not cause any material interference with the occupation of the
Premises by Lessee, then there shall be no abatement of rent and the Lessor
shall repair the damage with all convenient speed.


 


Waiver of Subrogation Rights.


 


(15)         Neither the Lessor
nor the Lessee shall be liable to the other for loss arising out of damage to
or destruction of the Premises, or the building or improvement of which the
Premises are a part or with which they are connected, or the contents of any
thereof, when such loss is caused by any of the perils which are or could be
included within or insured against by a standard form of fire insurance with
extended coverage, including sprinkler leakage insurance, if any. All such
claims for any and all loss, however caused, hereby are waived. Such absence of
liability shall exist whether or not the damage or destruction is caused by the
negligence of either Lessor or Lessee or by any of their respective agents,
servants or employees. It is the intention and agreement of the Lessor and the
Lessee that the rentals reserved by this lease have been fixed in contemplation
that both parties shall fully provide their own insurance protection at their
own expense, and that both parties shall look to their respective insurance
carriers for reimbursement of any such loss, and further, that the insurance
carriers involved shall not be entitled to subrogation under any circumstances
against any party to this lease. Neither the Lessor nor the Lessee shall have
any interest or claim in the other’s insurance policy or policies, or the
proceeds thereof, unless specifically covered therein as a joint insured.


 


Eminent Domain.


 


(16)         In case of the
condemnation or purchase of all or any substantial part of the Premises by any
public or private corporation with the power of condemnation this lease may be
terminated, effective on the date possession is taken or title is transferred,
by either party hereto on written notice to the other and in that case the
Lessee shall not be liable for any rent after the termination date.


 


(17)         Intentionally blank.


 


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Delivering Up Premises on Termination.


 


(18)         At the expiration of
the lease term or upon any sooner termination thereof, the Lessee will quit and
deliver up the Premises and all future erections or additions to or upon the
same, broom-clean, to the Lessor or those having Lessor’s estate in the
Premises, peaceably, quietly, and in as good order and condition as when
received, reasonable use and wear thereof, damage by fire, unavoidable casualty
and the elements alone and other events not required hereunder to be repaired
by Lessee excepted, as the same are now in or hereafter may be put in by the
Lessor.


 


Additional Covenants or Exceptions.


 


(19)         Intentionally blank.


 


(20)         Intentionally blank.


 


(21)         Lessee shall pay when
due all taxes, assessments and public charges on the Premises.


 


Attachment Bankrupt Default.


 


PROVIDED, ALWAYS,
and these presents are upon these conditions, that (1) if the Lessee shall be
in arrears in the payment of rent for a period of ten days after the same
becomes due, or (2) if the Lessee shall fail or neglect to perform or observe
any of the covenants and agreements contained herein on Lessee’s part to be
done, kept, performed and observed and such default shall continue for twenty
days or more after written notice of such failure or neglect shall be given to
Lessee, except that if the failure is of such a nature that it cannot be
remedied fully within the 20-day period, this requirement shall be satisfied if
Lessee begins correction of the failure within the 20-day period and thereafter
proceeds with reasonable diligence and in good faith to effect the remedy as
soon as practicable, or (3) if the Lessee shall be declared bankrupt or
insolvent according to law, or (4) if any assignment of all or substantially
all of Lessee’s property shall be made for the benefit of creditors, or (5) if
on the expiration of this lease Lessee fails to surrender possession of the
Premises, the Lessor or those having Lessor’s estate in the Premises, may
terminate this lease and, lawfully, at Lessor’s option immediately or at any
time thereafter, without demand or notice, enter into and upon the Premises and
every part thereof and repossess the same, and expel Lessee and those claiming
by, through and under Lessee and remove Lessee’s effects at Lessee’s expense,
forcibly if necessary and store the same, all without being deemed guilty of
trespass and without prejudice to any remedy which otherwise might be used for
arrears of rent or preceding breach of covenant.


 


Neither the termination of this lease by forfeiture nor the taking or
recovery of possession of the Premises shall deprive Lessor of any other
action, right, or remedy against Lessee for possession, rent or damages, nor
shall any omission by Lessor to enforce any forfeiture, right or remedy to
which Lessor may be entitled be deemed a waiver by Lessor of the right to
enforce the performance of all terms and conditions of this lease by Lessee.


 


In the event of any re-entry by Lessor, Lessor may lease or relet the
Premises in whole or in part to any tenant or tenants who may be satisfactory
to Lessor, for any duration, and for the best rent, terms and conditions as
Lessor may reasonably obtain. Lessor shall apply the rent received from any
such tenant first to the cost of retaking and reletting the Premises, including



 


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remodeling required to obtain any such tenant, and then to any arrears
of rent and future rent payable under this lease and any other damages to which
Lessor may be entitled hereunder.


 


Any property which Lessee leaves on the Premises more than ten (10)
days after abandonment or expiration of the lease, or for more than ten days
after any termination of the lease by Lessor, shall be deemed to have been
abandoned, and Lessor may remove and sell the property at public or private
sale as Lessor sees fit, without being liable for any prosecution therefor or
for damages by reason thereof, and the net proceeds of any such sale shall be
applied toward the expenses of Lessor and rent as aforesaid, and the balance of
such amounts, if any, shall be held for and paid to the Lessee.


 


Holding Over.


 


In the event the Lessee for any reason shall hold over after the
expiration of this lease, such holding over shall not be deemed to operate as a
renewal or extension of this lease, but shall only create a tenancy at
sufferance which may be terminated at will at any time by the Lessor.


 


Attorney Fees and Court Costs.


 


In case suit or action is instituted to enforce compliance with any of
the terms, covenants or conditions of this lease, or to collect the rental
which may become due hereunder, or any portion thereof, the losing party agrees
to pay the prevailing party’s reasonable attorney fees incurred throughout such
proceeding, including at trial, on appeal, and for post-judgment collection.
The Lessee agrees to pay and discharge all Lessor’s costs and expenses, including
Lessor’s reasonable attorney’s fees that shall arise from enforcing any
provision or covenants of this lease even though no suit or action is
instituted.


 


Should the Lessee be or become the debtor in any bankruptcy proceeding,
voluntarily, involuntarily or otherwise, either during the period this lease is
in effect or while there exists any outstanding obligation of the Lessee
created by this lease in favor of the Lessor, the Lessee agrees to pay the
Lessor’s reasonable attorney fees and costs which the Lessor may incur as the
result of Lessor’s participation in such bankruptcy proceedings. It is
understood and agreed by both parties that applicable federal bankruptcy law or
rules of procedure may affect, alter, reduce or nullify the attorney fee and
cost awards mentioned in the preceding sentence.


 


Waiver.


 


Any waiver by the Lessor of any breach of any covenant herein contained
to be kept and performed by the Lessee shall not be deemed or considered as a
continuing waiver, and shall not operate to bar or prevent the Lessor from
declaring a forfeiture for any succeeding breach, either of the same condition
or covenant or otherwise.


 


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Recitals.


 


The recitals of this Lease are hereby incorporated in to this Lease and
made a part hereof.


 


Notices.


 


Any notice required by the terms of this lease to be given by one party
hereto to the other or desired so to be given, shall be sufficient if in
writing, contained in a sealed envelope, and sent first class mail, with
postage fully prepaid, and if intended for the Lessor herein, then if addressed
to the Lessor at DFA, LLC c/o Ahern Rentals, Inc., 4241 S. Arville Street, Las
Vegas, Nevada 89103 and if intended for the Lessee, then if addressed to the
Lessee at Ahern Rentals, Inc., 4241 S. Arville Street, Las Vegas, Nevada 89103.
Any such notice shall be deemed conclusively to have been delivered to the
addressee forty-eight hours after the deposit thereof in the U.S. Mail.


 


Heirs and Assigns.


 


All rights, remedies and liabilities herein given to or imposed upon
either of the parties hereto shall extend to, inure to the benefit of and bind,
as the circumstances may require, the heirs, successors, personal
representatives and so far as this lease is assignable by the terms hereof, to
the assigns of such parties.


 


In construing this lease, it is understood that the Lessor or the
Lessee may be more than one person; that if the context so requires, the
singular pronoun shall be taken to mean and include the plural, and that generally
all grammatical changes shall be made, assumed and implied to make the
provisions hereof apply equally to corporations and to individuals.


 


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IN WITNESS WHEREOF,
the parties have executed this Lease on the day and year first hereinabove
written, any corporate signature of Lessee being by due authority of its Board
of Directors and any signature of Lessor being by due authority of its managing
member.


 


	
  Lessor:

  	
   

  	
  Lessee:

  
	
  DFA, LLC

  	
   

  	
  AHERN RENTALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ 
  Don F. Ahern, Manager

  	
   

  	
  By:

  	
  /s/ Don F. Ahern, President

  
	
   

  	
  Don F. Ahern, Manager

  	
   

  	
   

  	
  Don F. Ahern, President

  
	
   

  	
   

  	
   

  



 


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EXHIBIT A


 


LEGAL DESCRIPTION


 


(To be attached)


 


Assessor’s Parcel No. 15-13-352-001-0000