Document:

EXHIBIT 10.21

 

AMENDED
AND RESTATED LEASE

 

THIS AMENDED AND
RESTATED LEASE (this “Lease”)
is entered into this 27th day of October, 2004 between DON & PAUL, LLC (“Lessor”) and AHERN RENTALS, INC. (“Lessee”).

 

RECITALS

 

A.                                   By Indenture of
Lease dated May 1, 2004 (the “Original
Lease”), Lessor leased to Lessee those certain premises, as is,
situated in the City of Las Vegas, County of Clark and State of Nevada, and
described as follows: Property located
at 1821& 1825 West Bonanza Road, Las Vegas, Nevada 89106; 1721 West Bonanza
Road, Las Vegas, Nevada 89106; 1729 West Bonanza Road, Las Vegas, Nevada 89106;
1785 West Bonanza Road, Las Vegas, Nevada 89106; 1607 & 1611 West
Bonanza Road, Las Vegas, Nevada 89106; 1615 West Bonanza Road, Las Vegas,
Nevada 89106; 1629 West Bonanza Road, Las Vegas, Nevada 89106; 1701 West
Bonanza Road, Las Vegas, Nevada 89106; 1529 West Bonanza Road, Las Vegas,
Nevada 89106; 1529 1/2 West Bonanza Road, Las Vegas, Nevada 89106; 1905 West
Bonanza Road, Las Vegas, Nevada 89106, and 1915 West Bonanza Road, Las Vegas, Nevada 89106 as more particularly
described on the attached Exhibit A
(the “Premises”).

 

B.                                     Lessor and Lessee
desire to amend, restate and supersede the Original Lease as of the date of
this Lease.  Lessor and Lessee hereby agree
that the Original Lease is hereby amended, restated and superseded in its
entirety effective as of the date of this Lease and 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 the date of this Lease 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 $40,250 per month during the first year of the lease term.

 

1(b)(2)             Commencing on November 1, 2005 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  rent 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

 

1

 

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.

 

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 “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 

 

2

 

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 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 

 

3

 

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.  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, other
than a leasehold deed of trust or leasehold mortgage granted by Lessee in favor
of Bank of America, as Administrative Agent and Wachovia Bank, National
Association, as Collateral Agent and Syndication Agent and the successors and
assigns thereof (collectively “Senior Lien”)
and a leasehold deed of trust

 

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or leasehold mortgage granted by Lessee in favor of Tennenbaum Capital
Partners, LLC and the successors and assigns thereof (“Junior Lien”).

 

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.

 

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.

 

5

 

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.

 

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) per
cent 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 

 

6

 

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.

 

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)                            Lessee shall reimburse
Lessor upon demand for all premiums for casualty insurance with extended
coverage purchased by Lessee to insure any structure on the Premises.

 

(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 

 

7

 

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 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 

 

8

 

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.

 

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.

 

9

 

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:

  
	
  DON & PAUL, LLC

  	
   

  	
  AHERN RENTALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ DON F. AHERN

  	
   

  	
  By:

  	
   /s/ DON F. AHERN

  
	
   

  	
  Don F. Ahern, Manager

  	
   

  	
   

  	
  Don F. Ahern, President

  
							

 

10

 

Exhibit A

 

Legal
Description

 

Parcel 1:

 

Lot 1 of Ahern
Rentals as shown by map thereof on file in Book 113 of Plats, Page 59, in
the Office of the County Recorder of Clark County, Nevada.

 

Excepting
therefrom that portion as granted to the State of Nevada by that certain
Judgement and Final Order of Condemnation recorded March 22, 2004 in Book
20040322 as Instrument No. 00838 of Official Records.

 

Parcel 2:

 

Parcel 2a:

 

The South half
(S1⁄2) of that real property situated in the County of Clark, State of Nevada,
bounded and described as follows:

 

Commencing at
the South quarter (S1⁄4) corner of Section 28, Township 20 South, Range 61
East, M.D.B.&M.; thence North along the East line of the SW1/4
of Section 28, to the South boundary line of Clark Avenue, as the same is
now established; thence North 89°36’ West a distance of 444 feet along the said
South boundary line of Clark Avenue to the True Point of Beginning; thence
continuing north 89°36’ West a distance of 56 feet along the South boundary
line of Clark Avenue to a point; thence South 0°26’ West a distance of 374
feet; thence South 89°36’ East 56 feet; thence North 0°26’ East parallel to the
East line of the SW1/4 of said Section 28 to the
True Point of Beginning.

 

Excepting
therefrom that portion as granted to the State of Nevada by that certain
Judgement and Final Order of Condemnation recorded March 22, 2004 in Book
20040322 as Instrument No. 00838 of Official Records.

 

Parcel 2B:

 

An easement
for driveway and incidental purposes as created by that certain grant deed
recorded March 30, 1953 in Book 70 of Deeds, Page 5 as Instrument No. 402445.

 

Note:                   The above metes
and bounds description appeared previously in that certain document recorded September 15,
2003 in Book 20030915 as Instrument No. 02766.

 

Parcel 3:

 

Those portions
of Parcels 1 and 2 as shown by map thereof on file in File 2 of Parcel Maps, Page 58,
in the Office of the County Recorder of Clark County, Nevada, described as
follows:

 

 

Beginning at a
point on the right or northerly right-of-way line of US-95 Freeway, 46.963
meters (154.08 feet) right of and measured radially from Highway Engineer’s
Station “Q” 20+92.901 P.O.C.; said point of beginning further described as
bearing S. 29°25’39” E. a distance of 573.700 meters (1,882.21 feet) from the
West quarter corner of Section 28, T. 20 S., R. 61 E. M.D.M.; thence from
a tangent which bears N. 89°46’14” W., curving to the left along said northerly
right-of-way line, with a radius of 1217.420 meters (3,994.15 feet), through an
angle of 0°56’50”, an arc distance of 20.127 meters (66.03 feet); thence S.
89°16’56” W., along said right-of-way line, a distance of 71.340 meters (234.05
feet) to a point on the westerly boundary line of Parcel 2 shown on that
certain Parcel Map for Charles N. Walker and Rose M. Walker, File 2, Page 58
of Parcel Maps, recorded in Official Records Book 426, as Instrument No. 385487,
on May 16, 1974, in the Office of the County Recorder, Clark County,
Nevada; thence N. 0°10’28” W., along said westerly boundary line, a distance of
65.131 meters (213.68 feet) to a point on the southerly right-of-way line of
Bonanza Road described in that certain grant deed recorded on June 13, 1974
in Book 434, as Instrument No. 393256, and that certain grant deed
recorded on December 1, 1976 in Book 683, as Instrument No. 642915,
both recorded in the Office of the County Recorder, Clark County, Nevada;
thence N. 89°50’05” E., along said southerly right-of-way line, a distance of
60.982 meters (200.07 feet) to a point on the easterly boundary line of Parcel
III described in that certain Corporation Grant, Bargain, Sale Deed recorded on
December 30, 1986 in Book 861230, as Instrument No. 01130, in the
Office of the County Recorder, Clark County, Nevada; thence S. 0°10’28” E.,
along said easterly boundary line, a distance of 38.100 meters (125.00 feet) to
a point on the southerly boundary line of Parcel 1 shown on said Parcel Map;
thence N. 89°50’05” E., along said southerly boundary line, a distance of
30.480 meters (100.00 feet) to the southeast corner of said Parcel 1; thence S
0°10’28” E., along the easterly boundary line of said Parcel 2, a distance of
26.315 meters (86.34 feet) to the point of beginning.

 

Note:                   The above metes
and bounds legal description appeared previously in that certain document
recorded June 9, 2004 in Book 20040609 as Instrument No. 04347.Exhibit 10.1

 

FAMILY DOLLAR STORES, INC.

2006 INCENTIVE PLAN

Guidelines for Long-Term Incentive Performance Share Rights Awards

 

1.             Purpose

Family Dollar Stores, Inc.
(the “Company”) is adopting for the benefit of eligible individuals the Family
Dollar Stores, Inc. 2006 Incentive Plan (the “Plan”), which is intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of such individuals
upon whose judgment, interest, and special effort the successful conduct of the
Company’s operation is largely dependent. 
These Guidelines for Long-Term Incentive
Performance Share Rights Awards (the “Guidelines”) are intended to
implement the Plan by providing eligible Associates of the Company with an
opportunity to participate in the Company’s success by earning long-term
incentive compensation awards in the form of shares of Company Stock (“Common
Stock”) within the framework of the Plan (the “Performance Share Rights Awards”
or the “Awards”), and as further described in these Guidelines.

These Guidelines are adopted
pursuant to relevant provisions of the Plan and are to be interpreted and
applied in accordance with the terms and provisions thereof.  Specifically, these Guidelines provide for
the grant of Performance Share Rights Awards under Article 9 of the Plan and,
with respect to Associates in the position of Vice President or above, the
grant of Qualified Performance-Based Awards under Article 14 of the Plan.  Unless otherwise provided herein, capitalized
terms used in these Guidelines will have the meaning given such terms in the
Plan.  If there is any conflict between
these Guidelines and the Plan, the terms and provisions of the Plan shall
control.

Note:  The Plan
was adopted by the Board of Directors of the Company (the “Board”).  However, the Plan must be approved by the shareholders
of the Company at the next shareholders’ meeting to be held on January 19,
2006, in order for any Performance Share Rights Awards made under the Plan and
these Guidelines to be valid and binding on the Company.  Any Performance Share Rights Award made under
the Plan and these Guidelines before the Plan is formally approved by the
Company’s shareholders and the Board of Directors is conditioned upon such
approval and will be null and void if the Plan is not so approved.   Associates who are advised of such
conditional Performance Share Rights Awards will be advised of the action of
the shareholders and the Board of Directors and/or of any change in the
Performance Share Rights Award at that time and will be provided with a copy of
the Plan document, as approved, and a prospectus describing the Plan at such
time. No rights arise under the Plan or these Guidelines until such
approvals are obtained.

 

 

2.             Scope

The Guidelines cover
Associates who are eligible for participation in the Plan under these
Guidelines and are selected by the Committee for Performance Share Rights Awards
identified in Section 1 above.  Awards
under these Guidelines cover multiple (generally three) year  performance periods relating to such Awards which
generally track the Company’s fiscal (not calendar) year that is the 12-month
period that generally runs from approximately September 1st to
August 31st.  The actual dates
for the fiscal year are determined and announced by the Company at the
beginning of each fiscal year.  See
Section 7 below regarding transition periods.

3.             Eligibility

The Compensation Committee
of the Board (the “Committee”) and/or management of the Company will determine
annually which Associates are eligible to receive Performance Share Rights Awards
under these Guidelines.  Participants are
selected no later than 90 days following the beginning of each performance
period or upon employment with the Company or promotion.  Annual Performance Share Rights Awards under
these Guidelines will result in overlapping performance periods.  Additional eligibility requirements are as
follows:

•                  An Associate
who becomes eligible for a Performance Share Rights Award under these
Guidelines after the beginning of a performance period, either because the Associate
is newly hired or is promoted into a position covered by these Guidelines, will
be granted a prorated Award for all pending performance periods as of the
Associate’s date of hire or effective date of promotion, other than any
performance period that will lapse within six months of such date of hire or
promotion.  Payments with respect to any
such prorated Award will be based on the Company’s performance (as described
below) at the end of the relevant performance period and will be prorated by
multiplying the number of Performance Shares Rights to which the Associate
would have been entitled (had the Associate been a participant in the Plan on
the first day of the performance period) by a fraction, the numerator of which
is the number of calendar months in the performance period from and after the
date of hire or promotion (rounded up to the next full month for any partial
month of service), and the denominator of which is the total number of calendar
months in the performance period.

•                  An Associate covered
by these Guidelines who has a job change that results in either a higher or
lower Performance Share Rights Award under these Guidelines will have the Award
for any pending performance period as of the date of the job change adjusted on
a pro rata basis based on the number of months during the performance period in
each such position.  For example, an
Associate with a target Performance Share Rights Award of 1,000 shares who has
a job change half way through a performance period to a job position with an Award
of 1,500 Performance Share Rights will have an adjusted target Award for the
performance period of 1,250 shares of Common Stock.

•                  These Guidelines do not in
any manner restrict the right of the Company or the Associate to terminate
employment at any time, for any reason, with or without cause.  See Section 5 below for further information
on the consequences of termination of employment during a pending performance
period.

 

2

 

•                  An Associate
otherwise meeting all of the eligibility requirements of these Guidelines, but
whose performance rating for a number of fiscal years representing at least
half of the fiscal years covered by the performance period is at the Unsatisfactory/Does
Not Meet Expectations level, will not be eligible for any
payout for that performance period.

•                  An Associate must
be classified as a regular full-time employee during the entire performance
period for which an Award is being made and at the time of the actual issuance
of the Common Stock pursuant to the Performance Shares Rights Award in order to
be issued Common Stock pursuant to an Award. An Associate on leave of absence,
regardless of type, will be issued Common Stock pursuant to a Performance Share
Rights Award only upon return to regular, full time work/active status;
provided however, that an Associate on an approved family medical leave
or approved military leave will be issued Common Stock pursuant to such Award
at the time such shares are issued even if they have not returned to regular,
full time work/active status at that time.

4.             Forms of Awards and Targets

At the
time an Associate is selected for an Award under these Guidelines for a
particular performance period, the Associate will be assigned a “target” number
of shares of Common Stock to be earned if the Company’s performance level is at
the 50% level in comparison to the peer group (as set forth below) for the
performance period.  The Award will be
expressed as a number of Performance Shares Rights and will be evidenced by an Award
Certificate consistent with the provisions of the Plan.  The actual payout for the
performance period, if any, will be determined as a percentage of the target Award
payout depending on Company performance as follows:

•                  Company
performance for each performance period will be based equally upon (i) the
Company’s average annual return on equity (“ROE”) for each fiscal year during
the performance period and (ii) the Company’s pre-tax net income growth rate
over the performance period, compounded annually.  For purposes of these Guidelines, ROE will be
calculated by dividing the Company’s pre-tax net income for the relevant fiscal
year by the total shareholders’ equity.

•                  Actual Company performance for
each criteria above at the end of the relevant performance period is then
measured against the performance of a peer group of companies selected prior to,
or within 90 days after the beginning of, the performance period.  The Award levels for the relevant performance
period will be adjusted at the end of the performance period to reflect the
Company’s performance relative to the peer group.  Any such adjustment will generally range from
0% (i.e., no payout for the performance period) to 200% of the target Award per
the following chart (with linear interpolation between the thresholds set forth
below):

 

3

 

	
  Performance

  Against

  Performance

  Peer Group

  	
   

  	
  Percent of

  Award

  Adjustment

  (to Target Award)

  
	
  90th Percentile

  	
   

  	
  200%

  
	
  75th Percentile

  	
   

  	
  150%

  
	
  50th Percentile

  	
   

  	
  100%

  
	
  40th Percentile

  	
   

  	
  75%

  
	
  30th Percentile

  	
   

  	
  25%

  
	
  <30th
  Percentile

  	
   

  	
  0%

  

•                  For example, if
an Associate receives a target Performance Share Rights Award of 10,000 shares
for a particular performance period, and the Company’s ROE and pre-tax net
income growth performance, as measured against the relevant peer group of
companies, is in the 68th and 46th percentile,
respectively, then the Associate would receive an actual payout of 10,400
shares of Common  Stock, as described
below:

	
  Performance

  Metric

  	
   

  	
  Number of

  Performance

  Shares Rights at

  Target

  	
   

  	
  Relative

  Performance

  (Against

  Performance

  Peer Group)

  	
   

  	
  Relative

  Performance

  Adjustment

  	
   

  	
  Actual

  Number of

  Shares of Common Stock

  Awarded

  	
   

  
	
  ROE

  	
   

  	
  5,000

  	
   

  	
  68

  	
  %

  	
  118

  	
  %

  	
  5,900

  	
   

  
	
  Net Income Growth

  	
   

  	
  5,000

  	
   

  	
  46

  	
  %

  	
  90

  	
  %

  	
  4,500

  	
   

  

 

•                  In addition,
under relevant provisions of the Plan, the determination of ROE and
net-income-growth and the peer group of companies for the relevant performance
period may be further adjusted, collectively or individually, to reflect
extraordinary events or circumstances affecting the Company or its business, or
any of the companies included in the peer group, which render any such goals or
peer group selection unsuitable.

•                  These
Guidelines do not in any manner restrict the right of the Company to modify
performance measures, targets, cycles, or any other term or condition of these
Guidelines, as the Company deems it necessary or appropriate, subject to the
terms of the Plan.

5.             Termination of Employment

Notwithstanding anything in these Guidelines to the contrary, the
following provisions will apply to any Associate whose employment with the
Company terminates before the end of the relevant performance period.

 

4

 

•                  In the event of a
termination of an Associate’s employment with the Company before the end of the
relevant performance period, either (i) as a result of the Associate’s death,
Disability or Retirement or (ii) by the Company without Cause, payments with
respect to any outstanding Performance Share Rights Award for such performance
period will be based on actual Company performance at the end of the fiscal
year immediately preceding the date of termination or, if nearer, the end of
the fiscal year immediately following the date of termination.  For example, if a performance period covers three
fiscal years, and the Associate terminates employment after 16 months in the
performance period, payments with respect to any outstanding Award for such
performance period will be based on actual Company performance at the end of
the first fiscal year covered by the performance period.  However, if the Associate terminates
employment after 20 months in the performance period, payments with respect to
any outstanding Award for such performance period will be based on actual
Company performance at the end of the second fiscal year covered by the
performance period.  Once Company
performance is calculated as indicated above, payments are then prorated by
multiplying the number of Performance Shares Rights to which the Associate
would have been entitled based on such performance by a fraction the numerator
of which is the number of calendar months in the performance period of the
Associate’s actual employment with the Company (including the full calendar
month in which the Associate’s employment terminated) and the denominator of
which is the total number of calendar months in the performance period.

 

•                  In the case of death or
Disability, individual performance of the Associate will be ignored.  In the case of Retirement or termination by
the Company without Cause, individual performance of the Associate will be taken
into account based on the most recently completed individual performance review(s)
prior to such termination of employment. 
In any of these events, payments under this paragraph shall be made as
soon as administratively convenient after termination of employment and after the
applicable performance results are calculable.

 

•                  In the event of termination
of an Associate’s employment with the Company before the end of the relevant
performance period and the actual issuance by the Company of Common Stock
pursuant to the Performance Share Rights Award, either (i) by the Company for
Cause, or (ii) by the Associate for any reason (other than death, Disability or
Retirement), any outstanding Award for such performance period will be
immediately forfeited.

 

6.             Additional Rules

•                  All payments under these
Guidelines are considered supplemental pay and will be taxed as such.  Appropriate withholding and deductions will
be taken from such payments.  Percentages
will be rounded to the nearest 1/10 of a percent (for example, 10.3%).  Amounts will be rounded up to the
nearest whole dollar.  In accordance with
the Plan, the Company may require tax withholding to be satisfied through
withholding of shares of Common Stock otherwise payable under the Award.

 

5

 

•                  These
Guidelines cannot be changed or modified by a verbal communication or course of
dealing but only by a written communication signed by the Chairman, Vice
Chairman, and/or the Chief Executive Officer (“CEO”) of the Company or any
officer designated by one of them.

•                  Payouts earned
under these Guidelines are expected to be paid as soon as administratively convenient
following the end of the relevant performance period in the form of one (1)
share of the Company’s Common Stock for each whole Performance Share Right that
is payable under the Plan and these Guidelines, rounded up to the next whole
share. Notwithstanding the foregoing, the Company may permit recipients of
Awards to elect to defer receipt of payment of such Awards under such terms and
conditions as the Company may prescribe.

•                  In the event of
major economic changes, catastrophic events, or any other circumstances not
contemplated by the Company (but subject to the Plan provisions relating to
Qualified Performance-Based Awards), the Committee, the Chairman, Vice Chairman
and/or the CEO of the Company reserves the right to alter, amend, or terminate
these Guidelines and any Awards hereunder.

•                  The Chairman of
the Company will make all final decisions, rulings and interpretations under
these Guidelines (subject to the Plan provisions relating to Qualified
Performance-Based Awards, which may require action by the Committee).  By participating in the Plan under these
Guidelines, each Associate agrees that such decisions, rulings and
interpretations will be final and that each Associate will be bound by
them.  Each Associate further agrees that
if and when any circumstances arise relating to these Guidelines which are not
covered by this description of the Plan, the Associate will be bound by the
final decision, ruling or interpretation of the Chairman.

7.             Transition Period

In addition to Performance Share Rights Awards made under these
Guidelines for multiple year periods, during the Company’s 2006 and 2007 fiscal
years, Performance Share Rights Awards will be made to Associates participating
in the Plan under these Guidelines for each of the 2006 and 2007 fiscal years
based upon the Company’s performance in each of such fiscal years as set forth
in Section 4 above.  Notwithstanding the
provisions of Section 3 above requiring that an Associate be eligible to
participate in the Plan for at least six months of any performance period, an
Associate who is hired or is promoted into a position eligible to receive a
Performance Share Rights Award under the Plan during the 2006 or 2007 fiscal
years before June 1 of such fiscal year will be eligible to receive a prorated
Performance Share Rights Award which is otherwise computed in the manner set
forth in Section 3 above.

 

6

 

8.                                      Qualified
Performance-Based Awards

Notwithstanding
anything in these Guidelines to the contrary, the following provisions will
apply to any Associate who is a vice president or above at the time the Awards
are established under these Guidelines. 
Awards under this Section 8 are intended to satisfy the Section 162(m) Exemption
applicable to Qualified Performance-Based Awards under Article 14 of the
Plan.  Please refer
to the Plan document for further information.

•                  All
determinations under these Guidelines will be made by the Committee which,
pursuant to Section 4.1 of the Plan, will consist of all the members of the
Compensation Committee who are “outside directors” within the meaning of
Section 162(m) of the Code.

•                  The Committee
will establish within 90 days after the beginning of each performance period the
target Award payout for each Associate covered by this Section 8, the peer
group of companies and potential payout adjustments relating thereto for the
relevant performance period.

•                  Notwithstanding
the foregoing, the Committee will adjust ROE and net-income-growth, the peer
group of companies and potential payout adjustments relating thereto for the
relevant performance period, collectively or individually, with respect to each
Associate covered by this Section 8 to adequately reflect the occurrence,
during the performance period, of any of the events described in Sections 14.2
and 14.4 of the Plan.

•                  Payment of any Award
under these Guidelines to any Associate covered by this Section 8 is
conditioned upon the written certification of the Committee that the performance
goals and any other material conditions applicable to such Award were
satisfied.

•                  The Committee
will retain the discretion to decrease, but not increase, the Award otherwise
payable to any Associate covered by this Section 8 in accordance with the applicable
performance formula described above.  In
no event will the Award otherwise payable to any Associate covered by this
Section 8 in accordance with the applicable performance formula described above
exceed 1,000,000 shares of Company Stock.

•                  Consistent with Section 1
above, payment of any Award under these Guidelines to any Associate covered by
this Section 8 is conditioned upon the Plan having been previously approved by
the shareholders of the Company.

 

7

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