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EXHIBIT 10.41
COMMERCIAL LEASE
THIS AGREEMENT of Lease is made as of the 28th day of February, 1999, by
and between ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Inc., a Nevada corporation ("Landlord")
and Computing Resources, Inc., a Nevada corporation ("Tenant").
WITNESSETH:
A. PREMISES. In consideration of the rent hereinafter reserved and of the
covenants hereinafter contained, Landlord does hereby lease to Tenant, and
Tenant hereby leases from Landlord the land and approximately 7,327 square foot
building under construction located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Assessor's Parcel No. ▇▇▇-▇▇▇-▇▇, more particularly described on
Exhibit "A" hereto (hereinafter referred to as the Premises).
B. TERM. The term of this Lease shall commence on substantial completion
of construction and receipt of a certificate of occupancy (estimated to be on
or about the first day of June, 1999) and shall terminate at 12:00 o'clock,
midnight, on the last day of the calendar month that completes five (5) full
years of tenancy hereunder.
If delivery of possession of the Premises shall be delayed beyond the
estimated date specified above for the commencement of the term of this Lease
through no fault of the Landlord, the latter shall not be liable to the Tenant
for any damage resulting from such delay and the Tenant's obligation to pay rent
shall be suspended and abated until possession of the Premises is delivered. In
the event of such a delay it is understood and agreed that the commencement of
the term of this Lease shall also be postponed until delivery of possession and
that the termination date of the term shall be correspondingly extended,
provided, however, that if possession is not delivered to Tenant on or before
October 1, 1999, Tenant may, at its option, elect to terminate this Lease.
Contemporaneously with the application for a certificate of occupancy Tenant
shall be notified of the application and shall have the right to conduct a
walk-through inspection of the building, but the term shall commence upon
receipt of the certificate of occupancy whether or not the inspection has
occurred.
C. RENT. In consideration of the leasing of the aforesaid Premises,
Tenant does hereby covenant and agree with Landlord to pay rental in the sum of
One Hundred Four Thousand Two Hundred Twelve and 80/100 Dollars ($104,212.80)
per annum in lawful currency of the United States of America. Said rental shall
be payable monthly in advance at the rate of Eight Thousand Six Hundred
Eighty-Four and 40/100 Dollars ($8,684.40) per month, commencing on the first
day of the first month of the term of this Lease. Said rental is based on $1.20
per square foot.
The annual rental herein provided to be paid by Tenant to Landlord
shall be subject to increase in accordance with the provisions of this
paragraph. In computing said increase, it is agreed that, beginning one year
after the term of this Lease commences and each one year thereafter, the index
number hereinafter designated will be compared with its position as of the
first day of the month in which the term of the Lease commences. The
differences between the
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index number for the month this Lease term commences and for the month in which
the next one-year period begins shall be converted to a percentage of the index
number for the month this lease term commences. Said percentage shall be the
percentage by which the annual rental initially reserved herein of One Hundred
Four Thousand Two Hundred Twelve and 80/100 Dollars ($104,212.80) shall be
increased and shall continue in such increased amount for each month of such
succeeding year thereafter until the next one-year index figure computation is
made as hereinabove provided. If the said computation would result in a
decrease in annual rental, then the annual rental for the succeeding year shall
be the same annual rental for the immediately past year.
The index number to be used is the "Consumer's Price Index, U.S. City
Average, All Items (1982-84 = 100)," published by the U.S. Department of Labor,
Bureau of Labor Statistics. If the aforementioned index becomes unavailable,
the index to be used is the "Consumer's Price Index" issued by the U.S.
Department of Labor for San Francisco-Oakland-San ▇▇▇▇. If neither of the
foregoing indexes is issued, Landlord and Tenant shall agree upon a substitute
index to be employed in the computation of rent increases.
It is agreed that the price index shall be the index as of the first
day of the month in which the term of this Lease commences, and, in the event
no figures are issued for such month for the index being used, then the first
figures of said index issued immediately after such date shall be considered
the base index number as though it had been issued on the first day of the
month in which the term of this Lease commences, provided, however, that the
rent herein required to be paid by Tenant to Landlord shall not be less than
One Hundred Four Thousand Two Hundred Twelve and 80/100 Dollars ($104,212.80)
per annum during the term of this Lease. Except as provided in paragraph X
hereof it is understood that the cost-of-living increase shall not be applied
to anything except the One Hundred Four Thousand Two Hundred Twelve and 80/100
Dollars ($104,212.80) annual rental reserved in this paragraph.
D. NET LEASE. It is the understanding and agreement of the parties
hereto that this is a clear "net" lease obligation, Tenant to bear all expenses
and make all payments consistent with the principle of the "net" Lease; and
Tenant hereby assumes and agrees to perform all duties and obligations with
relation to the Premises, the improvements thereon, and the appurtenances
thereto, as well as the use, operation, and maintenance thereof, including
being responsible for and making at Tenant's own expenses, all repairs to the
roof and structural portions of the improvements unless same is necessitated by
the negligence of Landlord, even though such duties and obligations would
otherwise be construed to be those of Landlord. Provided, however, that Tenant
shall not be required to pay any prior existing mortgages or any future
mortgages that are placed on the property by Landlord and provided further,
however, that for the first twelve (12) months of the lease term Tenant shall
not be responsible for the cost of any repairs to the improvements being
constructed upon the demised land required by failure of the building to comply
with all applicable laws and building codes, including the Americans with
Disabilities Act (the "ADA"), (any such failure being a "Construction Defect")
and it shall be Landlord's responsibility to repair all Construction Defects
during the said twelve (12) month period. In connection with this paragraph D,
Tenant shall have the same right as Landlord under all
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guaranties and warranties of the building contractors and suppliers of
materials and equipment installed in the building by Landlord or building
contractor.
E. PAYMENT OF REAL ESTATE TAXES AND ASSESSMENTS. The parties hereto agree
that, as part of the consideration for the Lease and in addition to the rent
hereinbefore provided, Tenant shall, after the commencement of the term of this
Lease, and during the remainder of the term of this Lease and any renewal or
extension thereof, pay to the public officers charged with the collection
thereof, promptly as the same become due, all taxes, levies, licenses, excises,
franchises, imposts, penalties, and charges, general and special, ordinary and
extraordinary, of whatever name, nature, and kind, which are not or may
hereafter be levied, assessed, charged, or imposed, which are or may become a
lien (whether federal, state, city, county, or other public authority) upon this
Lease, the above-described Premises, the use or occupancy thereof, the buildings
and improvements now or hereafter situated thereon, or upon the occupants in
respect thereof. It is agreed that the above taxes shall not be in any way
construed to include any federal or state income taxes assessed against either
Landlord or Tenant.
In the event Tenant should fail to pay the taxes or assessments
herein required to be paid by Tenant, prior to the date when a delinquent rate
would be imposed, then Landlord may, at its option, pay such taxes to the
public officers charged with the collection thereof, and the amount or amounts
of money so paid by Landlord, together with interest on all such amounts at the
rate of 2 percent per annum over the then existing prime rate charged by the
Bank of America, shall be repaid by Tenant to Landlord upon demand, and the
payment thereof may be collected or enforced by Landlord in the same manner as
though said amounts were an installment of rent specifically required by the
terms of this Lease to be paid by Tenant to Landlord within ten (10) days
after the date when Landlord demands repayment thereof; the election of
Landlord to pay such taxes shall not waive the default thus committed by Tenant.
In the event that the financing institution where Landlord has
financing on the Premises shall require Landlord to prepay the real estate
taxes in monthly installments of one-twelfth of the annual real estate taxes,
then Landlord may elect to require the payment of the real estate taxes by
Tenant to be made in monthly installments of one-twelfth of the annual real
estate taxes, and Tenant agrees that it will make to Landlord monthly payments
of such real estate taxes in an amount equal to one-twelfth of said taxes
concurrently with the payment of rent.
Even though this paragraph E. obligates Tenant to pay the costs of
special tax assessments assessed against the Premises, the parties hereto
agree that in the event of the installation by any legal taxing authority of
any improvements that shall not be for the specific benefit and use of Tenant
(including, but not limited to, sidewalks and storm and sanitary drains), and
said improvements may reasonably be expected to survive this Lease, then Tenant
shall only be required to pay a pro rata share of such assessments based upon
the useful life of the improvement and the balance of the term hereunder.
If Tenant shall, in good faith, desire to contest the validity of
such taxes, or other charges covered by this paragraph E., it shall have
the right to do so, provided: (1) Tenant shall
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promptly notify Landlord of its intention to institute such legal proceedings as
are appropriate, which proceedings shall be promptly instituted in good faith
and with due diligence; (2) such proceedings shall suspend the collection of
such taxes or other charges from Landlord, Tenant, and the Premises; (3) neither
the Premises nor any part thereof nor interest therein shall be in danger of
being sold, forfeited, terminated, cancelled, or lost; and (4) Tenant shall, if
taxes become delinquent thereby, deposit with Landlord or the appropriate
governmental authority such security for payment of the contested tax charge
with interest and penalties as Landlord or the governmental authority shall
reasonably require. Upon the conclusion of such contest of the validity of taxes
by Tenant, Landlord shall return to Tenant the sum hereinabove required to be
deposited by Tenant with Landlord during the period of such contest by Tenant,
provided, however, that Tenant shall, prior to being entitled to a return of
such monies, exhibit evidence of the payment of such contested taxes.
F. OTHER TAXES. Tenant agrees that during the term of this Lease or any
extension or renewal thereof, it will pay to the public officers charged with
the collection thereof any use tax or sales tax that might be imposed by any
governmental body against either Landlord or Tenant by reason of the occupancy
of the Premises and payment of rental therefor by Tenant; and Tenant further
covenants and agrees to pay such taxes prior to the same becoming delinquent
and, promptly following receipt of a request therefor from Landlord, to furnish
to Landlord evidence of such payment. In the event Tenant should fail to pay
such use or sales taxes, then Landlord, at it sole option, may pay said tax or
taxes, and the amount so paid by Landlord shall be added to and become
additional rental to be paid by Tenant to Landlord. Tenant shall have the option
of paying any such use or sales tax directly to the governmental body assessing
the same or to Landlord. In the event the same are paid to Landlord, it shall be
Landlord's obligation to pay the same to such governmental body.
G. INSURANCE. At its cost, Tenant agrees to obtain, concurrent with the
taking of occupancy of the Premises, and to maintain at all times during the
term of this Lease, with insurance companies qualified to do business in the
State of Nevada and having a general policyholder's rating of A+ and a financial
rating of AAAAA as established by A.M. Best Company, fire and extended coverage
insurance upon the Premises in the amount equal to the replacement cost of the
improvements thereon, excluding, however, cost of foundation, underground pipes,
wiring, and outside paving. Such policy or policies of insurance shall have
endorsed thereon "Inflation Guard Endorsement" to cover cost-of-living increases
so that the insurance coverage herein required shall be automatically increased
as the cost of living increases. In lieu of such "Inflation Guard Endorsement,"
Tenant shall automatically increase the amount of coverage annually to cover the
replacement cost of the improvements (less the cost of foundation, underground
pipes, wiring, and outside paving), as the cost of living increases. Such policy
or policies of insurance shall be so drawn and shall contain such provisions as
will protect both Landlord and Tenant as their respective interests appear. All
policies of insurance or certificates thereof as provided for in this paragraph
G and in paragraphs H. and I. below shall be delivered to Landlord and shall be
renewed from time to time by Tenant so that at all times the insurance
protection herein provided shall continuously exist, and evidence of each
renewal shall be submitted to Landlord at least 15 days prior to the expiration
date of each policy. Tenant may
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maintain the insurance coverage through Tenant's blanket policy or policies and
in such event, Tenant shall deliver to Landlord certificates of insurance and
Tenant shall retain the original policies thereof.
In the event of the destruction of the improvements located on the
demised land so as to render the Premises or a portion thereof untenantable by
Tenant, it shall be the obligation of Landlord, as hereinafter provided for, to
promptly and diligently repair or rebuild the building and improvements as well
as possible to their original condition, and the proceeds collected from the
insurance policy or policies herein described shall be made available to
Landlord for the purposes of effecting such repair or restoration, and the
parties hereto agree that such insurance proceeds shall be first applied to the
cost of any repairs and restoration before using any portion thereof for any
other purposes.
In the event that there shall remain any portion of the proceeds of such
insurance policy or policies after the repair and reconstruction of any
building or improvements to a condition equal to the former condition thereof,
and provided no condition of default exists on the part of Tenant herein under
the terms of this Lease beyond any applicable cure period, then any such excess
shall be paid to Tenant herein. Tenant shall be entitled to all insurance
proceeds representing the value of the leasehold improvements being paid for by
Tenant (together with all replacements thereof and additions thereto).
Tenant covenants and agrees with Landlord that Tenant will pay the
premiums for all of the insurance policies that Tenant is obligated to carry
under the terms of this Lease. If obtainable, such policy or policies of
insurance shall provide that the same may not be cancelled without the giving
of at least 15 days notice to Landlord of intent to cancel.
Anything to the contrary herein notwithstanding, the parties hereto agree
that the provisions of this paragraph G. shall be subject to the requirements
of any institutional first mortgagee now or at any time hereafter holding a
first mortgage upon the Premises, including without limitation thereto the
types and amounts of coverage (so long as they are consistent with insurance
requirements for similar buildings in the Reno-Sparks, Nevada area), the named
insureds, the insurers, and the right of the mortgagee to apply any insurance
proceeds on account of the debt as provided in the next paragraph.
The right of a mortgagee to require payment of insurance proceeds on
account of a mortgage debt shall extend only to an institutional first
mortgagee, and in the event that insurance proceeds are taken by such a
mortgagee, if the Premises are to be reconstructed in accordance with paragraph
U. hereof, Landlord shall immediately obtain refinancing or otherwise shall
immediately pay to an escrow agent approved by both Landlord and Tenant the
amount taken by such mortgagee, and the escrow agent shall hold and disburse
the funds for the reconstruction and repair of the Premises.
II. RENT INSURANCE. In order to insure the payment of rent during the
period during which the Premises shall be untenantable by reason of damage by
fire, wind or other casualty,
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Tenant agrees to secure "rent insurance" covering a period not less than twelve
(12) months so that the rent will be paid to Landlord during such period that
such building is untenantable, and such "rent insurance" shall provide for 60
percent of the annual rent payable by Tenant to Landlord provided for herein.
I. PUBLIC LIABILITY INSURANCE. Tenant covenants and agrees with
Landlord that during the entire term of this Lease, Tenant will indemnify and
save harmless Landlord, its officers, agents and employees against any and all
claims, debts, demands, or obligations that may be made against Landlord, its
officers, agents or employees or against Landlord's title in the Premises
arising by reason of any negligent acts or omissions of Tenant, its officers,
agents, or employees in occupying the Premises, but Tenant shall not be
obligated to indemnify Landlord for damages or injuries arising from any
negligent acts or omissions of Landlord, its officers, agents, or employees.
Landlord shall indemnify, defend, and hold harmless Tenant, its officers,
agents and employees with respect to negligent acts or omissions of Landlord,
its officers, agents and employees. If it becomes necessary for Landlord to
defend any action seeking to impose any such liability by virtue of alleged
negligent acts or omissions of Tenant, its officers, agents or employees,
Tenant will pay Landlord all costs of court and reasonable attorney and expert
witness fees incurred by Landlord in such defense, in addition to any other
sums that said Landlord may be called upon to pay by reason of the entry of a
judgment or decree against Landlord in the litigation in which such claim is
asserted. To this end, Tenant further contracts and agrees to procure and carry
at its own expense insurance for bodily injury and property damage including
personal injury not less than One Million Dollars and No/100 ($1,000,000) per
occurrence and Two Million and No/100 Dollars ($2,000,000) aggregate, and an
umbrella/excess liability policy of not less than Five Million and No/100
Dollars ($5,000,000). Tenant shall cause said insurance policy or policies to
specifically name Landlord as an additional insured and furnish Landlord with
a certificate of said policy or policies. Tenant shall not do or permit any act
or thing that shall render such policy invalid or that shall affect the
validity thereof. If Tenant fails or neglects to carry such insurance as herein
provided and to pay all insurance premiums therefor, or if said policy of
insurance shall be cancelled for any cause whatsoever and Tenant does not
promptly obtain other insurance prior to or simultaneously with such
cancellation, Landlord may effect such insurance in its own name to the extent
herein provided and pay the premium therefor, and any sums paid by Landlord for
said premiums shall be deemed additional rent hereby reserved and shall be
payable by Tenant within ten (10) days after demand therefor from Landlord,
together with interest at the rate of 10 percent per annum.
Landlord and Tenant each waive any claim against the other for any damage
to property covered by insurance. Each party agrees to obtain a waiver of
subrogation from its insurance carrier permitting this waiver.
J. UTILITY CHARGES. Tenant agrees and covenants to pay all utility
charges, including, but not limited to, water, gas, electricity, sewage, and
removal of waste materials used on or arising from use of the Premises and to
pay the same monthly or as they shall become due. Landlord hereby represents
and warrants that, at the time of commencement of this Lease, sufficient water,
electricity, telephone, sewage facilities, and garbage removal will be
available
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to Tenant for Tenant's intended use of the Premises.
K. AIR-CONDITIONING AND HEATING. For the first twelve (12) months
of the term of this Lease Landlord shall maintain the air-conditioning,
heating equipment, cooling systems, and mechanical equipment installed in the
building. Thereafter, Tenant shall assume full and complete responsibility for
their operation, maintenance, repair, and replacement and Landlord shall not be
liable to Tenant for the failure or discontinuance of the air-conditioning,
heating, and cooling systems. At no time shall Landlord be responsible for the
provision of any utility service to the Premises. At the end of the first year
of the term of this Lease Landlord shall assign to Tenant any and all remaining
warranties obtained by Landlord regarding such air-conditioning and heating
systems.
L. FIXTURES AND PERSONAL PROPERTY. It is agreed between the
parties hereto that Tenant may make non-structural alterations or install any
trade fixtures, equipment, and other personal property on the Premises of a
temporary or permanent nature, and Landlord agrees that Tenant shall have the
right at any time, provided Tenant is not in default of any of the terms of
this Lease, to remove any and all such alterations, trade fixtures, equipment,
and other personal property that it may have stored or installed in the
Premises; provided further, however, that in such event Tenant shall restore
the Premises substantially to the same condition, except for ordinary wear and
tear, in which they were at the time Tenant took possession. Tenant shall not
be obligated to restore the Premises substantially to the same condition in
which they were at the time Tenant took possession in the event of changes and
alterations made upon the written approval of Landlord or in the event the
Premises are surrendered because of default on the part of Landlord.
The provisions hereof shall not be construed to prevent Tenant
from financing or refinancing the purchase of equipment or machinery, and
Landlord shall execute such reasonable documents in favor of any financial
institution holding security thereon, subordinating rights of Landlord thereof;
nor shall there be a lien on any work in process of Tenant.
M. TENANT FORBIDDEN TO ENCUMBER LANDLORD'S INTEREST. It is
expressly agreed and understood between the parties hereto that nothing in this
Lease shall ever be construed as empowering Tenant to encumber or cause to be
encumbered the title or interest of Landlord in the Premises in any manner
whatsoever. In the event that, regardless of this prohibition, any person
furnishing or claiming to have furnished labor or materials at the request of
Tenant or of any person claiming by, through, or under Tenant shall file a lien
against Landlord's interest therein, Tenant, within 30 days after being
notified thereof, shall cause said lien to be satisfied of record or the
Premises released therefrom by the posting of a bond or other security as
prescribed by law, or shall cause same to be discharged as a lien against
Landlord's interest in the Premises by an order of a court having jurisdiction
to discharge such lien.
N. LAWFUL USE OF PREMISES. Tenant further covenants and agrees
that said demised land and all buildings and improvements thereon during the
term of this Lease shall be used only and exclusively for lawful purposes; and
that said Tenant shall not knowingly use or suffer anyone to use said Premises
for any purpose in violation of the laws of the United States, the State of
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Nevada, the County of Washoe, City of Reno, or any other governmental unit
wherein the Premises may be located.
O. COMPLIANCE WITH REGULATIONS OF PUBLIC BODIES. Tenant covenants
and agrees that it will, at its own cost, make such improvements on the
Premises and perform such acts and do such things as may be lawfully required
by any public body having jurisdiction over said property in order to comply
with such sanitary, zoning, setback, and other similar requirements designed to
protect the public, applicable only to the manner of Tenant's particular use
and occupancy of the Premises which is distinct from normal office usage.
Tenant also agrees to comply with all deed restrictions.
The undertakings in this paragraph O. are conditioned upon
Landlord delivering the Premises to Tenant with the improvements constructed
thereon complying with all building codes, ADA requirements, zoning ordinances,
setback requirements, sanitary requirements, and other similar requirements in
effect at the time of the commencement of the term of this Lease, and Tenant
shall not be required to make any structural changes to meet such requirements
as they from time to time may exist.
P. SIGNS. During the term of this Lease, Tenant may install such
signs on the Premises as may be reasonable, provided, however, that such signs
shall be first approved by Landlord, which approval shall not be unreasonably
withheld or delayed. Such signs may be attached to said building in such manner
as may be necessary, provided that upon the termination of this Lease or any
renewal or extension thereof, the same shall be removed by Tenant and that such
part of the property at which said sign may have been attached shall be
restored, at the expense of Tenant, to the same condition as prior to the
placing of said sign.
Q. ATTORNEYS' FEES. In the event of a dispute because of which
either party to this Lease employees counsel to pursue or protect any of the
rights afforded that party by the terms hereof, or the terms of any related
agreement, or to defend against the claims of the other party hereto, in or out
of court, in bankruptcy or arbitration proceedings or otherwise, the
non-prevailing party agrees to pay the reasonable attorneys' fees, expert
witness' fees and costs incurred by the prevailing party in such dispute.
R. LANDLORD'S RIGHT TO INSPECT PREMISES. Tenant agrees and
covenants that Landlord or its agents, for the purpose of examining or
inspecting the condition of the Premises, shall have access to the said
Premises upon the giving of 3 days' notice by Landlord to Tenant of Landlord's
intent to examine or inspect the Premises. Notwithstanding the foregoing,
Landlord, in the event of any emergency such as, but not limited to, a fire,
flood, or severe windstorm, shall have free access to said Premises for the
purposes of examining or inspecting damage done to the Premises.
Landlord shall have the right to show the Premises during the
90 days prior to termination to prospective tenants, at reasonable times
during normal business hours upon reasonable advance notice to Tenant. Landlord
further reserves the right to show the Premises
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to prospective purchasers upon reasonable advance notice to Tenant. Except in
the event of an emergency, Landlord shall not have entrance to the Premises
without the accompaniment of an employee of Tenant.
In the event of any entry by Landlord under this paragraph R,
Landlord shall use commercially reasonable efforts to minimize any disruption
to the operation of Tenant's business in the Premises.
S. ASSIGNMENT OR SUBLETTING. Tenant may, with the consent of Landlord,
which consent shall not be unreasonably withheld or delayed more than twenty
(20) days after written notice of Tenant's request for consent, assign this
Lease or sublet in whole or in part the Premises provided that Tenant herein
shall continue to remain liable and responsible for the payment of rental due
hereunder. For the purpose of this clause, a merger or consolidation of Tenant
with another corporation or an assignment or sublease to an affiliate or a
wholly owned subsidiary of Tenant, shall not constitute an assignment or
sublease requiring the consent of Landlord provided that the merged
corporation, affiliate or subsidiary agrees in writing to be bound by the terms
of this Lease. Landlord shall have the right to sell, transfer or assign the
leased Premises without consent of Tenant, and Tenant agrees to attorn to
landlord's purchaser, transferee or assignee. Such sale, transfer or assignment
by Landlord shall relieve Landlord of its obligations hereunder if the
purchaser, transferee or assignee assumes in writing Landlord's obligations
hereunder.
T. REPAIRS. Tenant, after the commencement of the term of this Lease,
shall, at its own expense, maintain the Premises in as good condition and
repair as the Premises were upon the commencement of this term, except for (1)
reasonable wear and use during the term of this Lease, or any extension
thereof, (2) structural repairs (3) repairs required to be made by Landlord
pursuant to the provisions of paragraphs D and K of this Lease, (4) repairs
made necessary by reason of fire or other casualty, or by the negligent acts or
omissions by Landlord or is agents or (5) as otherwise specifically provided
for in this Lease.
U. DESTRUCTION OR DAMAGE BY FIRE OR OTHER HAZARDS. The parties hereto
agree that if the improvements erected or to be erected upon the Premises are
partially or totally destroyed or damaged by fire or other hazard then Landlord
shall promptly provide Tenant with an estimated time frame for completion of
the restoration and promptly repair and restore such improvements as soon as it
is reasonably practical to restore them so that they are restored substantially
to the prior existing condition, subject to such changes as Tenant may
reasonably require, and provided, however, that such changes will not increase
the cost of restoration unless Tenant agrees to pay for such increased cost.
Due allowance, however, shall be made for reasonable time necessary for
Landlord to adjust the loss with the insurance companies insuring the Premises
at the time of the happening of the fire or the casualty, but in no event shall
such adjustment result in Landlord not being obligated to make such
restoration, and in any event the restoration must commence within 45 days
after the happening of such fire or other casualty, and the completion thereof
must be pursued diligently after such fire, casualty, or disaster with
reasonable allowance made for delay occasioned by strike, lockouts, or
conditions beyond the control of Landlord, but in any event, said restoration
must be completed on or before one year after the happening of such fire
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or other casualty. If such restoration is not completed within said one-year
period, then Tenant, at its option, may cancel this Lease with abatement of
rent as of the date of the loss, provided, however, that Landlord shall be
entitled to retain the proceeds of any rent insurance as provided for in
paragraph H. hereof. However, failure of the insurance company to authorize
such restoration work will be considered a reasonable delay.
In the event that there is total destruction of the Premises and
Landlord's estimate of the time required for restoration exceed one (1) year or
Landlord fails to completely restore and rebuild the same within one (1) year
after such fire, casualty, or other disaster, then, in either event Tenant may,
at its option, elect to terminate and cancel this Lease, in which event this
Lease shall be terminated upon written notice by Tenant to Landlord and neither
party shall thereafter have any further obligation with respect to the other.
Should the Premises or any portion thereof be rendered untenantable
by reason of the damage or destruction thereto caused by fire, casualty, or
disaster during the term of this Lease as provided for in this paragraph, rent
shall be abated in proportion to the areas of the Premises rendered
untenantable from the date of the happening of the fire or other casualty or
disaster up to the date of restoration of the Premises, except any rent that
may be received from rent insurance procured pursuant to this Lease. However,
no rent shall accrue for any portion of the Premises unless Tenant is able to
conduct its usual business on that portion of the Premises that remains
tenantable. If, after the date of the happening of the fire or other casualty
or disaster, Tenant shall have paid any rents for a period beyond such date,
Tenant shall be entitled to a proportionate refund.
In the event of a complete or total destruction of the improvements
or destruction to such an extent that the Premises are rendered untenantable by
Tenant, Landlord shall not be required to restore or rebuild the improvements
in the event there are less than three years remaining of the term of this
Lease, unless the parties hereto agree to extend the term of this Lease for not
less than three years from the date of completion by Landlord of such
restoration.
In the event that the Lease is cancelled as provided for in this
paragraph U., Tenant shall be entitled to all insurance proceeds representing
the value of leasehold improvements paid for or agreed to be paid for by Tenant
together with all replacements thereof and additions thereto, and all proceeds
representing the value of property of Tenant that is damaged or destroyed,
provided that Landlord first receives the proceeds covering the replacement
value of Landlord's building from all undesignated proceeds.
V. DEFAULT BY TENANT. Each of the following shall be deemed a default by
Tenant and a breach of this Lease:
1. The filing of a petition by or against Tenant for adjudication
as a bankrupt under the U.S. Bankruptcy Code, as now or hereafter amended or
supplemented, or for reorganization under Chapter 11 of said Bankruptcy Code,
or the filing of any petition by or against Tenant under any further bankruptcy
act for the same or similar relief. Also constituting
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default is the dissolution or the commencement of any action or proceeding for
the dissolution or liquidation of Tenant, whether instituted by or against
Tenant or for the appointment of a receiver or trustee of the property of
Tenant.
2. The taking possession of the Premises or property of Tenant upon the
Premises by any governmental officer or agency pursuant to statutory authority
for the dissolution, rehabilitation, reorganization, or liquidation of Tenant.
3. The making by Tenant of any "assignment for the benefit of creditors."
If any event of default described in subparagraph (1), (2) or (3) above shall
be involuntary on the part of Tenant, there shall be no default within the
meaning of this Lease, if such event is dismissed or vacated by Tenant within
60 days from the occurrence of such event; otherwise such event shall
constitute a default hereunder.
4. A failure to pay the rent herein reserved, or additional rent, or any
part thereof, for a period of 5 days after receipt of written notice.
5. Failure in the performance of any other covenant or condition of this
Lease on the part of Tenant to be performed, for a period of 30 days after
receipt of written notice.
a. For the purposes of subparagraph (5) of this paragraph V., no
failure on the part of Tenant in the performance of work required to be
performed or acts to be done or conditions to be modified shall be deemed to
exist if steps shall have, in good faith, been commenced promptly by Tenant to
rectify the same and shall be prosecuted to completion with diligence and
continuity. If the matter in question shall involve building construction and
if Tenant shall be subject to unavoidable delay, either by reason of
governmental regulations restricting the availability of labor or materials, or
by strikes or other labor troubles, or by reason of conditions beyond the
control of Tenant, Tenant's time to perform under said subparagraph (5) of this
paragraph V. shall be extended for a period commensurate with such delay.
b. In the event of any such default of Tenant, Landlord may serve a
written notice upon Tenant that Landlord elects to terminate this Lease upon a
specified date not less than 30 days after the date of the serving of such
notice, except that in the case of a default under subparagraph (4) above for
nonpayment of rent such date shall not be less than 5 days after the notice
given under said subparagraph (4), and if the default remains uncured or the
period is not extended as herein provided, this Lease shall then expire on the
date so specified as if that date had been originally fixed as the expiration
date of the term herein granted.
c. In the event this Lease shall be terminated as hereinbefore
provided, or by summary proceedings or otherwise, or in the event the Premises
or any part thereof shall be abandoned by Tenant, Landlord, or its agents,
servants, or representatives may immediately or at any time thereafter, reenter
and resume possession of said Premises or such part thereof, and remove all
persons and property therefrom, either by summary dispossession proceedings or
by
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a suitable action or proceeding at law, without being liable for any damages
therefor. Moving out of the Premises or leaving the Premises vacant shall not
be deemed an abandonment of the Premises, provided that Tenant continues to pay
the rent as and when due. Reentry by Landlord shall not be deemed an acceptance
of a surrender of this Lease.
In the event that this lease is terminated by summary proceedings, or
otherwise as provided herein, or if the Premises shall have been abandoned and
whether or not the Premises shall be relet, the entire amount of rent that
would be paid to the expiration date of this Lease shall become due and
payable. In the event of such termination or abandonment, Landlord shall be
obligated to use its best efforts to mitigate any damages it may have against
Tenant. In the event the Premises are relet by Landlord, Landlord shall be
entitled to recover from Tenant, and Tenant shall pay to Landlord, in addition
to any other damages becoming due hereunder, an amount equal to the amount of
all rents and additional rent reserved under this Lease, less the net rent, if
any, collected by Landlord on reletting the Premises, which shall be due and
payable by Tenant to Landlord on the several days on which the rent and
additional rent reserved in this Lease would have become due and payable; that
is to say, upon each of such days Tenant shall pay to Landlord the amount of
deficiency then existing. Such net rent collected on reletting by Landlord
shall be computed by deducting from the gross rents collected all reasonable
expenses incurred by Landlord in connection with the reletting of the Premises
or any part thereof, including broker's commissions and the cost of repairing,
renovating, or remodeling said Premises; however, the expenses to be deducted
in computing the net rent collected on reletting shall not include the cost of
performing any covenant contained herein required to be performed by Tenant.
The obligation of Landlord to use its best efforts to mitigate any
damages it may have against Tenant shall not preclude the right of Landlord to
obtain by judicial process a judgment for the entire amount of rent that would
be paid to the expiration date of this Lease, if said Lease is terminated by
summary proceedings or otherwise as provided herein. In the event Landlord
obtains a judgment in such manner, Landlord shall be obligated to use its best
efforts to mitigate any damages it may have recovered in accordance with the
provisions of this paragraph.
W. SUBORDINATION. This Lease, its terms, condition, and all leasehold
interests and rights hereunder, are expressly made, given, and granted subject
and subordinate to the lien of any bona fide first mortgage that Landlord may
secure from any bank, life insurance company, savings and loan association, or
other recognized lending institution; and Tenant agrees to execute any
instrument or instruments required by the mortgagee to subordinate the terms of
this Lease to any such first mortgage that may be placed upon the Premises by
Landlord; provided, however, that:
1. Said Mortgagee enters into a nondisturbance agreement with
Tenant obligating any party acquiring title or right of possession under or by
virtue of such mortgage to be bound by this Lease and by all of Tenant's rights
hereunder, provided that Tenant is not then is continued default after notice
in the payment of rent or otherwise under the terms of this Lease as it may
hereafter be modified from time to time.
2. Tenant is not required to become responsible or liable for the
payment of
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any sum or sums secured by such first mortgage, and further provided that such
first mortgage contains provisions, or that the mortgagee will agree by
separate instrument, to notify Tenant of any default on the part of Landlord in
payment or default under any other terms and conditions of the mortgage. Should
Tenant elect to exercise its right to make payment to a mortgagee in order to
cure a default on the part of Landlord-Mortgagor, Tenant may deduct any sums so
paid to cure such a default from the next ensuing payment or payments or rental
as is in this Lease provided.
3. Tenant agrees to notify mortgagee of any default on the part
of Landlord under any of the terms and conditions of this Lease concurrently
with the delivery of any notice of default to Landlord, said notice being only
for the purpose of informing mortgagee of Landlord's default. Said notice shall
not be construed as placing any obligations on mortgagor beyond those
obligations specified in the mortgage between mortgagee and Landlord hereunder.
Tenant's obligation to notify a mortgagee shall only extend to those mortgagees
for whom Tenant has received from Landlord a copy of the mortgage and notice of
mortgagee's address.
4. Notwithstanding anything at law or in this Lease to the
contrary, the nondisturbance provision as provided for in subparagraph (1)
hereof shall not apply to a construction loan lender prior to such time as
Tenant occupies the Premises, and Tenant agrees to execute a separate
subordination agreement in favor of a construction loan lender, which agreement
will provide that the nondisturbance provision will not affect said
construction loan lender until such time as Tenant occupies the Premises.
X. OPTION TO RENEW. Provided Tenant is not in default under the terms
of this Lease at the time of the exercise of the herein contained option and at
the commencement of any option period, Landlord grant to Tenant the option to
renew this Lease for three additional terms of five years each under the same
terms and conditions as contained herein, except that the base rent for the
first year of each of the option periods shall be set at the then fair market
rental value of the premises, to be determined by mutual agreement of Landlord
and Tenant, or in the absence of such agreement before three months before
expiration of the then current lease term, by appraisal utilizing one appraiser
selected by each of the parties and a third appraiser selected by the first two
the average of the closest two appraisals shall be the base rental rate for the
first year of each option period and the base rent for each subsequent year of
each option period shall be determined by reference to increases in the CPI
index as is set forth in paragraph C. hereof.
In the event Tenant should elect to exercise its option to renew,
Tenant shall deliver to Landlord notice of its intent to renew this Lease, such
notice to be delivered in writing to Landlord at least six months prior to the
expiration of this Lease or any renewal thereof.
Y. CONDEMNATION. It is further understood and agreed that if, at any
time during the continuance of this Lease, the legal title to the demised land
or the improvements located thereon or any portion thereof be taken,
appropriated, or condemned by reason of eminent domain, there shall be such
division of the proceeds of award in such condemnation proceedings and such
abatement of rent and other adjustments made as shall be just and equitable
under the
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circumstances. If Landlord and Tenant are unable to agree upon what division,
abatement of rent, or other adjustments are just and equitable within 60 days
after such award shall have been made, then the matters in dispute shall be
submitted to arbitration in accordance with the then-existing commercial
arbitration rules of the American Arbitration Association, and this Lease shall
be specifically enforceable under the prevailing arbitration law, and judgment
upon the award rendered may be entered in the court of the State of Nevada
having jurisdiction.
Notwithstanding anything to the contrary herein contained, any proceeds of
award in such condemnation proceedings shall be paid in favor of the party for
whom said award is specifically granted. That is to say, that in the event
Tenant is not specifically awarded proceeds from said proceedings, Tenant shall
not receive any such proceeds.
If this Lease is terminated in any manner herein provided in this
paragraph Y., rent for the last month of Tenant's occupancy shall be prorated,
and Landlord agrees to refund to Tenant any rents paid in advance.
If the legal title to the entire Premises is wholly taken by condemnation
proceedings, this Lease shall be automatically cancelled. If legal title to a
portion of the Premises is taken and Tenant reasonably and in good faith
determines that such taking renders the remainder of the Premises unfit for its
intended use, Tenant, at its sole option, may elect to terminate this Lease. In
the event the parties cannot agree upon what partial taking renders the
remainder of the Premises unfit for its intended use, then the matter shall be
submitted to arbitration in the manner provided above. In general, it is the
intent of this paragraph Y. that upon condemnation the parties hereto shall
share in the award to the extent that their respective interests are destroyed,
damaged, or depreciated by the exercise of the right of eminent domain.
Z. NOTICES. All notices required by the law and this Lease to be given
by one party to the other shall be in writing, and the same shall be served by
delivery in person by overnight courier service or by certified mail, return
receipt requested, in postage prepaid envelopes addressed to the following
addresses or such other addresses as may be by one party to the other
designated in writing:
AS TO LANDLORD: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
1225 Financial Boulevard, Inc.
c/o Computing Resources, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
AS TO TENANT: ▇▇▇▇▇ ▇. ▇▇▇▇, President
Computing Resources, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Either party may change its address for notices and/or add additional
recipients by notice to the
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other party hereunder.
AA. QUIET ENJOYMENT. So long as Tenant observes the terms of this Lease,
Tenant shall have peaceful and quiet enjoyment of the Premises.
BB. MISCELLANEOUS The covenants and agreements contained herein shall
bind and the benefits and advantages shall inure to the respective heirs,
executors, administrators, successors, and assigns of the parties hereto.
Whenever used, the singular number shall include the plural, and the
plural number shall include the singular; the use of any gender shall be
applicable to all genders.
All covenants, agreements, and undertakings shall be joint and
several.
The parties agree that either may record a Memorandum of this Lease
in the Official Records of ▇▇▇▇▇ County, State of Nevada, and that this Lease
shall be governed by and construed in accordance with the laws of the State of
Nevada.
No modifications or changes shall be made to this Lease unless the
same are made in writing and signed by the party against whom enforcement is
sought.
IN WITNESS WHEREOF, this agreement has been executed as of the day and
year first above written.
LANDLORD:
By: [Signature Illegible]
-------------------------------------
Its: President
------------------------------------
TENANT:
By: [Signature Illegible]
-------------------------------------
Its: Chairman & C.E.O.
------------------------------------
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DESCRIPTION
All that certain lot, piece or parcel of land situate in the County of Washoe,
State of Nevada, described as follows:
Parcel 4 as shown on 3rd Parcel Map for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, INC., Parcel Map
No. 1362, filed in the office of the Recorder of Washoe County, Nevada, on
August 13, 1982 as File No. 809789.
EXCEPTING THEREFROM all that certain parcel of land being more
particularly described as follows:
Commencing at the ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇. ▇▇▇▇;
said point being the True Point of Beginning; Thence S 64 degrees 49'04"
E., 199.00' along the Southerly line of said Parcel 4; Thence N. 25 degrees
10'56" E., 200.00' to a point on the Southerly right of way of Equity
Avenue, Thence N. 64 degrees 49'04" W., 176.50' along said Southerly right
of way to a point of curvature; Thence 48.45' along the arc of a curve to
the left, having a central angle of 92 degrees 32'14" and a radius of
30.00' to a point on the Easterly right of way of Corporate Boulevard;
Thence S. 22 degrees 38'42" W., 168.84' along said right of way returning
to the True Point of Beginning.
AND FURTHER EXCEPTING THEREFROM all that certain parcel of land being more
particularly described as follows:
Commencing at the ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇. ▇▇▇▇;
Thence S. 64 degrees 49'04" E., 199.00' along the Southerly line of said
Parcel 4 to the True Point of Beginning; Thence continuing along said South
line, S. 64 degrees 49'04" E., 447.50' to a point; Thence N. 25 degrees
10'56" E., 200.00' to a point on the Southerly right of way of Equity
Avenue; Thence N. 64 degrees 49'04" W., 447.50' along the said right of way
to a point; Thence S. 25 degrees 10'56" W., 200.00' returning to the True
Point of Beginning.
EXHIBIT A