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EXHIBIT 10.34
COMMERCIAL LEASE
THIS AGREEMENT of Lease is made as of the 1st day of January, 1996, by and
between 565 Rio Vista Drive, 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 13,000 square foot
building located at 565 Rio Vista Drive, Fallon, Nevada (hereinafter referred to
as the Premises). The parties acknowledge that the personal property
(furnishings, fixtures and equipment) located in the Premises listed on Exhibit
"A" hereto is owned by Tenant and is not leased hereunder.
B. TERM. The term of this Lease shall commence on the 1st day of January,
1996, and shall terminate at 12:00 o'clock, midnight, on the last day of the
calendar month that completes 10 full years of tenancy hereunder.
If delivery of possession of the Premises shall be delayed beyond the
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.
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
Thirty Nine Thousand and 00/100 Dollars ($39,000.00) per annum in lawful
currency of the United States of America. Said rental shall be payable monthly
in advance at the rate of Three Thousand Two Hundred Fifty and 00/100 Dollars
($3,250.00) per month, commencing on the first day of the first month of the
term of this Lease. Said rental is based on $0.25 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 difference
between the 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 Thirty Nine Thousand and 00/100 ($39,000.00) shall be increased and
shall continue in such increased amount for each such succeeding year thereafter
until the next one-year index figure computation is made as hereinabove
provided.
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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 Jose. If neither of the foregoing indexes
are 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 Thirty Nine
Thousand and 00/100 Dollars ($39,000.00) per annum during the term of this Lease
or any extension or renewal thereof. It is understood that the cost-of-living
increase shall not be applied to anything except the Thirty Nine Thousand and
00/100 Dollars ($39,000.00) 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 Tenant shall not be
responsible for the cost of any repairs to the improvements to be constructed
upon the demised land resulting from damages caused by material defects in the
structures or equipment supplied by Landlord therein and it shall be Landlord's
responsibility to make any structural changes that may be required by any
governmental agency having jurisdiction over the Premises. In connection with
this paragraph D., Tenant shall have the same right as Landlord under all
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
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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 the Lease
Agreement to be paid by Tenant to Landlord upon 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.
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 promptly notify Landlord of its intention to
institute such legal proceedings as are appropriate, which proceedings shall be
promptly instituted and conducted 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,
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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 tax or taxes prior to the same becoming
delinquent and to furnish unto Landlord evidence of such payment. In the event
Tenant should fail to pay such use or sales tax, then Landlord, at its 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 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 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.
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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, 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 and that Tenant will deliver to Landlord evidence
of such payment before the payment of any such premiums becomes in default; and
Tenant will cause renewals of expiring policies to be written and the policies
or copies thereof, as Landlord may require, to be delivered to Landlord at least
15 days before the expiration date of such expiring policies. 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, the named insureds, the insurers, and the
right of the mortgagee to apply any insurance on account of the debt.
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.
H. 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, Tenant agrees to secure "rent insurance" 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 against any and all claims, debts, demands, or obligations
that may be made against Landlord 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; and not any acts or omissions of
Landlord, its officers, agents or employees; and if it becomes necessary for
Landlord to defend any action seeking to impose any such liability, Tenant will
pay Landlord all costs of court and reasonable attorney and expert witness fees
incurred by Landlord in such defense, in addition
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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
($1,000,000.00) per occurrence and Two Million and No/100 Dollars
($2,000,000.00) aggregate, and an umbrella/excess liability policy of not less
than Five Million and No/100 Dollars ($5,000,000.00). Tenant shall cause said
insurance policy or policies to specifically name Landlord as an 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 thereof, 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 on demand of 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
to Tenant for Tenant's intended use of the Premises.
K. AIR-CONDITIONING AND HEATING. Prior to taking possession of the
Premises, Tenant shall take whatever steps it deems necessary to satisfy itself
that the air-conditioning, heating equipment, cooling systems, and mechanical
equipment as installed by Landlord are in accordance with the plans and
specifications, and that such installation is satisfactory and acceptable to
Tenant. Upon occupancy of the Premises and acceptance of the air-conditioning,
heating and cooling systems, and installations, Tenant shall assume full and
complete responsibility for their operation, maintenance, repair, and
replacement. Landlord shall not be liable to Tenant for the failure or
discontinuance of the air-conditioning, heating, and cooling systems, or for the
provision of any other utility service to the Premises. Landlord shall assign to
Tenant any and all warranties obtained by Landlord regarding such
air-conditioning and heating systems, at the time of commencement of this Lease.
L. FIXTURES AND PERSONAL PROPERTY. It is agreed between the parties
hereto that Tenant may 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 trade fixtures,
equipment, and other personal property that it may have stored or installed
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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 material 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 or building
for any purpose in violation of the laws of the United States, the State of
Nevada, the County of , City of Fallon, 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 use and occupancy of the
Premises. 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 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
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Landlord, which approval shall not be unreasonably withheld. 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. ATTORNEY'S FEES. In the event of a dispute because of which either
party to this Lease employs 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 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. Landlord further reserves the right to show the Premises to
prospective purchasers. Except in the event of an emergency, Landlord shall not
have entrance to the Premises without the accompaniment of an employee of
Tenant.
S. ASSIGNMENT OR SUBLETTING. Tenant may, with the consent of Landlord,
which consent shall not be unreasonably withheld, 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 to a wholly owned subsidiary, shall not constitute
an assignment requiring the consent of Landlord. 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 reasonable
wear and use during the term of this Lease, or any extension thereof, structural
repairs or repairs made necessary by reason of fire or other casualty, and
negligent acts or omissions by Landlord or its agents or as otherwise
specifically provided for in this Lease.
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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 by fire or other hazard then Landlord shall
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 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 fails to completely restore and rebuild the same within nine months
after such fire, casualty, or other disaster, then, in that 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 untenantable. 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 five years remaining of the term of this
Lease, unless the parties hereto agree to extend the term of this Lease for not
less than five 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
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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 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
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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, in the case of a default under paragraph (4) above for nonpayment of
rent, in which event such date shall not be less than [???] after the notice
given under said subparagraph (4), and if the default remains uncured or [??]
period is not extended as herein provided, this Lease shall then expire on the
date so [??] as if that date had been originally fixed as the expiration date
of the term herein specified.
c. In the event this Lease shall be terminated hereinbefore provided, 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 [???] any time thereafter, reenter and resume
possession of said Premises or such part thereof, [??] remove all persons and
property therefrom, either by summary dispossession proceedings [??] suitable
action or proceeding at law, without being liable for any damages therefor. [??]
out of the Premises or leaving the premises vacant shall be deemed an
abandonment [??] 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 thereunder, 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 deemed payable by Tenant
to Landlord on the several days on which the rent and additional rent [??] 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 reasonable expenses incurred by Landlord in connection
with the reletting of the Premises [??] part thereof, including broker's
commissions and the cost of repairing, renovating, or [??]eling said Premises;
however, the expenses to be deducted in computing the net rent incurred on
reletting shall not include the cost of performing any covenant contained herein
[??] 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.
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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 in continued default after notice in
the payment of rent or otherwise under the terms of this Lease as hereafter
modified.
2. Tenant is not required to become responsible or liable for the payment
of any sum or sums secured by such first mortgage, and further provided that
such first mortgage contains provisions, or that the mortgage 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 take payment to a mortgage 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, 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 which 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 prior to
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 grants 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 including the amount of rent being increased
at one-year intervals as is set forth in paragraph D. hereof.
In the event Tenant should elect to exercise its option to renew, Tenant
shall
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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
improvement 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
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 the parties hereto agree 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 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: Ranson W. Webster, President
565 Rio Vista Drive, Inc.
c/o Computing Resources, Inc.
1285 Financial Boulevard
Reno, Nevada 89502
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AS TO TENANT: Harry D. Hart, President
Computing Resources, Inc.
1285 Financial Boulevard
Reno, Nevada 89502
AA. 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 Clark 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: ILLEGIBLE
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Its: President
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TENANT:
By: ILLEGIBLE
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Its: CEO
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