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EXHIBIT 10.32
COMMERCIAL LEASE
THIS AGREEMENT of Lease is made this 1st day of January, 1994, by and
between 0000 Xxxxxxxxx Xxxxxxxxx, Inc. ("Landlord") and Computing Resources,
Inc. ("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 premises commonly known as 0000
Xxxxxxxxx Xxxxxxxxx, Xxxx, Xxxxxx, 00000, consisting of approximately 3.483
acres improved with a building of approximately 38,617 square feet and more
particularly described on Exhibit "A" hereto. The parties acknowledge that the
personal property (furnishings, fixtures and equipment) located in the premises
listed on Exhibit "B" 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, 1994, and shall terminate at 12:00 o'clock, midnight, on the last day
of the calendar month that completes ten (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
Three Hundred Forty-seven Thousand Five Hundred Fifty-three and 00/100 Dollars
($347,553.00) per annum in lawful currency of the United States of America.
Said rental shall be payable monthly in advance at the rate of Twenty-eight
Thousand Nine Hundred Sixty-two and 75/100 Dollars ($28,962.75) per month, the
first two monthly installments of rent being paid simultaneously with the
execution of this Lease Agreement, and thereafter commencing on the first day
of the third month of the term of this Lease.
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 Twenty-eight Thousand Nine Hundred Sixty-two and 75/100
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Dollars ($28,962.75) 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. 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 Xxxx. If neither of the
foregoing indexes are used, 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 Three Hundred Forty-seven Thousand Five Hundred Fifty-three and 00/100
Dollars ($347,553.00) 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 Three Hundred Forty-seven Thousand Five
Hundred Fifty-three and 00/100 Dollars ($347,553.00) 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 demised 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 expense, 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 constructed or 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 demised 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,
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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, interest, and charges, general and special,
ordinary and extraordinary, of whatever name, nature, and kind, which are now
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 demised 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 demised 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 demised premises; (3) neither the demised premises nor
any part
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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 demised 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 taxes, 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. As its cost, Tenant agrees to obtain, concurrent with the
taking of occupancy of the demised 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 demised premises in the amount equal
to the replacement cost of the improvements thereon, excluding, however, cost
of foundation, underground pipes 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 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 name
Landlord as an insured, shall be delivered to Landlord and shall be renewed
from time to time by Tenant so that at all times the insurance protection
herein required 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
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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 near 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, 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 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 payments 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 demised 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 proceeds 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.
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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 attorneys' and expert
witnesses' 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, of not less than One Million Dollars ($1,000,000.00) per
occurrence and Two Million Dollars ($2,000,000.00) aggregate, and an umbrella/
excess liability policy of not less than Five Million 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 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 on demand of Landlord, together
with interest at the rate of 2 percent per annum over the then-existing prime
rate charged by the Bank of America.
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
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systems, or for the provision of any other utility service to the demised
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 demised 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 in the demised 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 demised 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 thereto; nor shall
there be a Landlord's 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 demised 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 demised 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 Washoe, the 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 use and occupancy of
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the demised premises. Tenant also agrees to comply with all deed restrictions.
The undertakings in this paragraph O are conditioned upon Landlord
delivering the demised 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 demised premises as may be reasonable, provided, however, that such
signs shall be first approved by 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. ATTORNEYS' 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 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 demised premises, shall have access to the said demised
premises upon the giving of three (3) days' notice by Landlord to Tenant of
Landlord's intent to examine or inspect the demised 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 and immediate access to
said demised premises for the purposes of examining or inspecting damage done
to the demised premises.
Landlord shall have the right to show the demised 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 demised
premises to prospective purchasers. Except in the event of an emergency,
Landlord shall not have entrance to the demised 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 demised 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
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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 Landlord's obligations hereunder.
T. REPAIRS. Tenant, after the commencement of the term of this Lease,
shall, at its own expense, maintain the demised 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.
U. DESTRUCTION OR DAMAGE BY FIRE OR OTHER HAZARDS. The parties hereto
agree that if the improvements erected or to be erected upon the demised
premises are partially or totally destroyed or damaged by fire or other hazard
then Landlord shall promptly repair and restore such improvements as soon as it
is reasonably practical 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 demised 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 strikes; 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. 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 demised premises and
Landlord fails to completely restore and rebuild the same within one year 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 demised 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 demised
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
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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 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 under the U.S.
Bankruptcy Code, as now or hereafter amended or supplemented, or the dissolution
or liquidation or the commencement of any action or proceeding for the
dissolution or liquidation of Tenant, or for the appointment of a receiver for
or trustee of the property of Tenant, whether instituted by or against 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. For the purposes of this 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
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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.
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, 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.
In the event this Lease shall be terminated as hereinbefore provided or by
summary proceedings or otherwise, or in the event the demised 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 any part thereof, and remove all persons and
property therefrom, either by self-help (if such can be done without a breach of
the peace), by summary dispossession proceedings or by 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 and 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 demised 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
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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 sustained in accordance with the provisions of
this paragraph.
W. SUBORDINATION. This Lease, its terms, conditions, 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 non-disturbance 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 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 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 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 mortgagee 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 non-disturbance provision as provided for in subparagraph 1
hereof shall not apply to a construction loan tender 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 non-disturbance provision will not affect said
construction loan lender prior to such time as Tenant occupies the premises.
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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 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 hereof.
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 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.
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 demised premises is taken and the parties hereto
agree that such taking renders the remainder of the demised 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 demised 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
hand delivery 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
0000 Xxxxxxxxx Xxxxxxxxx, Inc.
000 Xxxxxx Xxxxx
Xxxx, Xxxxxx 00000
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AS TO TENANT: 0000 Xxxxxxxxx Xxxxxxxxx
Xxxx, Xxxxxx 00000
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 a Memorandum of this Lease may be recorded in
the Official Records of Washoe 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: /s/ XXXXXX X. XXXXXXX
--------------------------------
Its: President
-------------------------------
TENANT:
By: /s/ XXXXXX X. XXXXXXX
--------------------------------
Its: Chairman & C.E.O.
-------------------------------
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LEGAL DESCRIPTION
All that certain property situate in a portion of the West One-Half (W 1/2) of
Section Sixteen (16), Township Nineteen (19) North, Range Twenty (20) East,
Mount Diablo Meridian, City of Reno, Washoe County, Nevada, previously conveyed
by that certain Grant, Bargain, Sale Deed recorded as Document No. 1348525 in
Book 2961 at Page 0891, of the Official Records of Washoe County, Nevada on
September 8, 1989, and being more particularly described as follows:
BEGINNING at the southeast corner of Parcel 4 of Parcel Map No. 1362,
filed in the Office of the Washoe County Recorder on August 13, 1982 as
File No. 809789, said point being on the westerly line of Financial
Boulevard, as shown on said Parcel Map;
THENCE along the southerly line of said Parcel 4, North 64 degrees 49'04"
West, 330.00 feet;
THENCE South 25 degrees 10'56" West, 230.99 feet;
THENCE from a tangent which bears North 22 degrees 59'40" East, 25.96 feet
along the arc of a 340.00 foot radius curve to the right, through a
central angle of 04 degrees 22'32";
THENCE South 64 degrees 49'04" East, 278.62 feet to the beginning of a
tangent curve to the left;
THENCE 47.12 feet along the arc of a 30.00 foot radius curve, through a
central angle of 90 degrees 00'00" to the westerly line of the proposed
Financial Boulevard;
THENCE along said westerly line, North 25 degrees 10'56" East, 87.03 feet
to the beginning of a tangent curve to the left;
THENCE 20.37 feet along the arc of a 460.00 foot radius curve, through a
central angle of 02 degrees 32'14";
THENCE continuing along said westerly line, North 22 degrees 38'42" East,
92.69 feet to the above described POINT OF BEGINNING.
All that certain property situate in a portion of the West One-Half (W 1/2) of
Section Sixteen (16), Township Nineteen (19) North, Range Twenty (20) East,
Mount Diablo Meridian, City of Reno, Washoe County, Nevada, previously conveyed
by that certain Grant, Bargain, Sale Deed recorded as Document No. 1348526 in
Book 2961 at Page 0893 of the Official Records of Washoe County, Nevada, on
September 8, 1989, and being more particularly described as follows:
BEGINNING at a point on the southerly line of Parcel 4 of Parcel Map No.
1362, filed in the Office of the Washoe County Recorder
EXHIBIT "A"
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on August 13, 1982 as File No. 809789, from which the southeast
corner of said Parcel 4 bears South 64 degrees 49' 04" East,
330.00 feet;
THENCE continuing along said southerly line, North 64 degrees 49' 04" West,
172.00 feet;
THENCE South 25 degrees 10' 56" West, 293.56 feet;
THENCE from a tangent which bears North 79 degrees 34' 45" East,
185.31 feet along the arc of a 340.00 foot radius curve to the
right, through a central angle of 31 degrees 13' 41";
THENCE North 25 degrees 10' 56" East, 230.99 feet to the above
described POINT OF BEGINNING.
All that certain real property situate in a portion of the West One-Half (W
1/2) of Section Sixteen (16), Township Nineteen (19) North, Range Twenty (20)
East, Mount Diablo Meridian, Reno, Washoe County, Nevada, being a portion of
Parcel "3" of Parcel Map No. 2364, File No. 1333406, Official Records of Washoe
County, Nevada, previously conveyed by that certain Boundary Line Adjustment
and Quitclaim Deed recorded as Document No. 1538141 in Book 3399 at Page 0124
of the Official Records of Washoe County, Nevada, on January 16, 1992, and
being more particularly described as follows:
BEGINNING at the most northeasterly corner of said Parcel "3";
THENCE along the easterly line of said Parcel "3", South 25
degrees 10' 56" West, 293.55 feet to a point in the northerly
right-of-way line of Wall Street;
THENCE along said northerly right-of-way line, from a tangent
that bears South 79 degrees 34" 44' West, 60.35 feet along the
arc of a curve to the left, having a central angle of 10 degrees
10' 09", a radius of 340.00 feet to a point of reverse curvature;
THENCE 63.11 feet along the arc of a curve to the right, having a
central angle of 13 degrees 54' 30", a radius of 260.00 feet;
THENCE leaving said northerly right-of-way line, North 25 degrees
10' 57" East, 372.31 feet;
THENCE South 64 degrees 49' 04" East, 94.75 feet returning to the
POINT OF BEGINNING.
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ASSIGNMENT OF LEASE
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged and for the purpose of further securing that certain loan
and debt obligation owed to the Nevada State Development Corporation which is
guaranteed by the Small Business Administration, which said debt obligation has
been assumed by 0000 Xxxxxxxxx Xxxxxxxxx, Inc., that certain commercial lease
dated January 1,1994, by and between 0000 Xxxxxxxxx Xxxxxxxxx, Inc. as Landlord
and Computing Resources, Inc. as Tenant is hereby assigned by 0000 Xxxxxxxxx
Xxxxxxxxx, Inc. to Nevada State Development Corporation.
Dated this 1st day of January, 1994.
0000 XXXXXXXXX XXXXXXXXX, INC.
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------
XXXXXX X. XXXXXXX, President
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FIRST AMENDMENT TO COMMERCIAL LEASE
THIS FIRST AMENDMENT TO LEASE ("Amendment") is entered into as of this
3rd day of May, 1999, by and between 0000 Xxxxxxxxx Xxxxxxxxx, Inc., a Nevada
corporation ("Landlord"), and Computing Resources, Inc., a Nevada corporation
("Tenant"), in the following factual context:
RECITALS
A. On January 1, 1994, Landlord and Tenant entered into that certain
Commercial Lease (the "Lease") for those certain premises commonly known as
0000 Xxxxxxxxx Xxxxxxxxx, Xxxx, Xxxxxx, as more particularly described in said
Lease (the "Premises").
B. The parties hereto wish to amend the Lease.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
1. Options to Extend. Paragraph X of the Lease is amended to read as
follows:
Landlord hereby grants to Tenant three (3) five (5)-year options to extend
the term of the Lease. On condition that Tenant is not then in default
under any of the terms and conditions of the Lease beyond any applicable
notice and cure periods, Tenant may exercise each of the options to extend
by giving Landlord at least one hundred eighty (180) days prior written
notice of its exercise of the applicable option to extend.
All of the terms and conditions of this Lease shall be in effect during
each of the extended terms, except that the annual rental to be paid by
Tenant during the first year of the applicable extended term shall be
adjusted to equal the fair market rental value of the Premises as of the
first day of such extended term, as Landlord and Tenant shall agree as
provided in the following paragraph.
If Tenant has timely exercised its option to extend as set forth above,
Landlord shall promptly give Tenant notice of Landlord's opinion of the
fair market rental value (as defined below) applicable to the Premises
during the first year of the extended term. Thereafter, Landlord and
Tenant shall attempt to agree in good faith in writing on such fair market
rental value. If Landlord and Tenant do not agree in good faith on the
fair market rental value of the Premises by the date which is one hundred
twenty (120) days prior to the end of the original term, or current
renewal term, as applicable, then Landlord and Tenant shall each select,
within fifteen (15) days after such one hundred twentieth (120th) day, an
appraiser (the "Appraisers") with a minimum of five (5) years experience
appraising real property for commercial rental purposes in the Reno,
Nevada area, to determine the fair market rental value of the Premises.
Within fifteen (15) days of appointment, the Appraisers shall mutually
select a third appraiser (the "Neutral Appraiser") who has the same
minimum qualifications as the Appraisers and who has not
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previously represented either party or its affiliates. Each of the three
(3) Appraisers shall, within thirty (30) days of the appointment of the
Neutral Appraiser, submit his or her determination of the fair market
rental value of the Premises, and the average of the closest two (2)
appraisals shall be the fair market rental value for the first year of the
applicable extended term, which decision shall be communicated to the
parties in writing by the Neutral Appraiser and shall be final and binding
on both Landlord and Tenant. Landlord and Tenant shall each pay their own
Appraiser's fees and costs and shall each pay one-half (1/2) of the
Neutral Appraiser's fees and costs. If one party does not appoint an
Appraiser within the fifteen (15) day period referenced above, the single
Appraiser shall be the sole judge of the fair market rental value for the
first year of the applicable extended term. If the two appointed
Appraisers cannot agree on the appointment of the Neutral Appraiser,
either party may petition the then president of the county real estate
board of the county in which the Premises are located for the selection of
the Neutral Appraiser.
The rental for each lease year which is within each of the five (5)-year
extended terms and which is subsequent to the first year of each such five
(5)-year extended term shall be determined by reference to adjustments in
the Consumer Price Index since the first year of the applicable extended
term as more particularly described in Paragraph C of the Lease; provided,
however, that adjustments above the initial rental rate (and any
subsequent higher rent) shall expressly be permitted.
In the event Tenant does not exercise each option to extend the term of
the Lease, a later option to extend the term cannot be exercised.
As used in this Amendment, "fair market rental value" means the rent per
square foot of rentable area that a ready-and-willing tenant would pay as
rent to a ready-and-willing landlord of space comparable to the Premises
if such space were exposed for lease on the open market for a reasonable
period of time, assuming neither party was under any compulsion to rent,
and taking into account all of the purposes for which the Premises may be
used and the condition thereof at the time of the extension.
If the fair market rental value is not determined prior to the
commencement of the applicable extended term, then Tenant shall continue
to pay the rent applicable to the Premises immediately prior to the
extended term, until the fair market rental value is determined. When the
fair market rental value is determined, Tenant shall pay to Landlord, or
Landlord shall credit to Tenant, as applicable, within thirty (30) days,
the difference between the rent already paid and the new rent as
determined pursuant to this Amendment.
2. Non-disturbance Agreement. Without limiting the application of
Paragraph W of the Lease, Landlord agrees that promptly following the execution
of this Amendment, Landlord shall obtain for Tenant's benefit a written
non-disturbance agreement in customary and recordable form reasonably acceptable
to Tenant from any mortgagee or other person providing financing to or for the
benefit of Landlord, which financing is secured by the Lease and/or by the
Premises or any part thereof as of the date of this Amendment.
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3. Assignment. Notwithstanding anything in Paragraph S of the Lease to
the contrary, the parties hereby agree that the limitations on assignment in the
Lease apply only to transfers of assets from one entity to another entity and
not to a change in the ownership of stock or other securities of the tenant
entity. Furthermore, the parties agree that the acquisition by Intuit Inc., a
Delaware corporation, of all or substantially all of the capital stock of Tenant
is not an assignment requiring the consent of Landlord under the Lease.
4. Miscellaneous. If any term, provision, covenant or condition of this
Amendment is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the rest of this Amendment shall remain in full force and effect,
and shall in no way be affected, impaired or invalidated. Except as expressly
modified by this Amendment, the terms and conditions of the Lease shall remain
unchanged and in full force and effect. In the event of any conflict between the
provisions of this Amendment and the Lease, the provisions of this Amendment
shall govern. This Amendment may be executed in one or more counterparts, each
of which shall be an original and all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of
the day and year first above written.
LANDLORD: TENANT:
1285 FINANCIAL BOULEVARD, INC., COMPUTING RESOURCES, INC.,
a Nevada corporation a Nevada corporation
By: /s/ XXXXXX XXXXXXX By: /s/ XXXXXX XXXXXXX
------------------------------- ---------------------------------
Name: Xxxxxx Xxxxxxx Name: Xxxxxx Xxxxxxx
------------------------------- ---------------------------------
Its: President Its: C.E.O.
------------------------------- ---------------------------------
3
