2014-04-24 A NEW LEAF SUBLEASE AGREEMENT - REV1.DOCX
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Lease No. L-7451 C-22-14-XXX-X-00 SUBLEASE AGREEMENT Between A New Leaf, Inc. And Maricopa County This Sublease Agreement (the “Sublease” or “Agreement”) is made and entered into as of May 21, 2014, by and between A New Leaf, Inc., an Arizona non-profit corporation (hereinafter referred to as “Sublessor” and “Lessee”), and Maricopa County, a political subdivision of the State of Arizona, (hereinafter referred to as “Sublessee”) (“Sublessor” and “Sublessee” shall collectively be referred to herein as the “Parties” or individually as a “Party”). R E C I T A L S WHEREAS, Sublessor is the Tenant under that certain Lease Agreement between La Mesita Apartments, LP, an Arizona limited partnership, (“Landlord”) dated October 16, 2012 , a copy of which is attached hereto and made a part of this Sublease Agreement (“Sublease”) as Exhibit “A” (the “Master Lease”) for that certain real property and improvements known as La Mesita Family Homeless Shelter at 2254 W. Main Street, Mesa, Arizona, 85201 (the “Property”); and WHEREAS, Sublessor desires to sublet to Sublessee, and Sublessee desires to sublease from Sublessor, a portion of the premises leased to Lessee under the Master Lease for the purpose of providing services through a Head Start Program to preschool children, including children with disabilities as defined in A.R.S. § 15-761, ages zero to three five (35) year old, subject to terms and conditions described herein and the applicable terms and conditions of the Master Lease; and WHEREAS, Sublessor represents and warrants that La Mesita Apartments, LP, as Landlord and Lessor to the Master Lease has given approval to this Sublease, which approval is attached hereto as Exhibit “B” of this Sublease as required per Section (8.01) of the Master Lease; and WHEREAS, Sublessee desires to use that portion of the Property known as the “Daycare Center” consisting of approximately 2,779 square feet as depicted in Exhibit “C” which is attached hereto and made a part of this Sublease, for Head Start activities (“Services”) pursuant to the terms of the Agreement; and 1 WHEREAS, Sublessor wants to support the efforts of Sublessee by offering appropriate physical space and access to the Property pursuant to the terms and conditions of this Sublease; and WHEREAS, Sublessee is authorized to enter into this agreement pursuant to A.R.S. §§ 11-201 and 11-251. A G R E E M E N T NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: Article 1 Recitals 1.1 The Recitals, by this reference, are hereby incorporated herein and made a part of this Agreement. Article 2 Sublessee Responsibilities 2.1 Sublessee hereby leases from Sublessor the Daycare Center for the Permitted Use, as hereafter described. Sublessee shall be entitled to use the Daycare Center for the Permitted Use and for no other purpose. Sublessee shall have access to the Daycare Center from 7:00 am to 4:00 pm Monday through Friday (the “Business Hours”). Sublessor’s personnel shall have access to the Daycare Center at all times for the sole purpose of maintenance and operation of the Property. The Property is to be vacated by Sublessee at all times other than Business Hours unless other arrangements are made from time-to-time with Sublessor. 2.2 Subject to the terms of this Sublease, Sublessee shall provide its own classroom equipment and supplies and will be responsible for the room arrangement. Sublessee will ensure the Daycare Center meets license requirements and, as needed, accessibility for children with disabilities as required by the Arizona Department of Health Services. Sublessee will ensure that access to the outdoor areas and the indoor classroom of the Daycare Center will be adapted to accommodate various disabling conditions, as necessary. 2.3 Sublessee shall surrender the Daycare Center by the expiration date of this Sublease, or any earlier termination date, in as good condition as when received, normal wear and tear accepted. Sublessee is responsible for repairing or replacing damages to the Property caused by Sublessee’s misuse of the Daycare Center, including damage caused by Sublessee’s invitees. Repairs or replacement is to be accomplished within sixty (60) days after written notification from Sublessor. If Sublessee fails to make Page 2 of 17 repairs or to replace damaged property, Sublessor may, at its option, make the required repairs and invoice Sublessee for the reasonable repair cost. 2.4 Janitorial services to the Daycare Center shall be the responsibility of the Sublessee. 2.5 Immediately upon the completion or termination of this Sublease, Sublessee shall remove its personal property from the Property unless previous arrangements have been made with Sublessor. Sublessee hereby acknowledges that Sublessor shall not be responsible for Sublessee’s personal property that remains on the Property after the completion or termination of this Sublease. 2.6 Sublessee shall not permit smoking or alcoholic beverages anywhere on the Property. 2.7 As a condition of this Agreement, Sublessee must provide the following notice in writing to all employees and participants involved in any program Sublessee offers at the Property: “PLEASE NOTE THAT THE HEAD START PROGRAM IS NOT A PROGRAM OF A NEW LEAF OR THE LA MESITA HOMELESS SHELTER. A NEW LEAF NEITHER SPONSOR NOR ENDORSE THE PROGRAM. LIKEWISE, PARTICIPATION IN THIS PROGRAM IS NOT A PRECONDITION TO PARTICIPATION IN ANY PROGRAM OF A NEW LEAF. ACCORDINGLY, A NEW LEAF ASSUMES NO RESPONSIBILITY FOR ITEMS LOST OR STOLEN WHILE ON A NEW LEAF PROPERTY, OR FOR ANY OTHER DAMAGES OR PERSONAL INJURY THAT YOU MAY SUSTAIN IN CONNECITON WITH YOUR PARTICIPATION IN THIS PROGRAM.” 2.8 Sublessee shall provide the Services by using persons having all requisite skill, experience and training. All Sublessee providers shall, at all times, be members in good standing with all required licensing bodies. They shall possess full, complete and current professional credentials as may be lawfully required to perform the activities related to the Services. 2.9 Sublessee shall comply with all applicable federal or state statutes, regulations, and rules prohibiting discrimination on the basis of race, religion, color, sex, national origin, disabilities, age or other classification. 2.10 Sublessee affirms that no event shall be held for the purpose of advancing any theories subversive to the constitutions or laws of the State of Arizona, or the United States, or for the purpose of advocating social or political change by violence. Page 3 of 17 2.11 Throughout the term of the Sublease, Sublessee may identify proposed tenant improvements as Sublessee’s funds become available. Upon agreement by the Parties to a detailed cost estimate prepared by Sublessor for said tenant improvements and upon written authorization from Sublessee to Sublessor to proceed with completion of said tenant improvements, Sublessor shall make tenant improvements to the class room and playground areas of the Daycare Center at Sublessee’s request. Sublessor shall pay the cost of the tenant improvements and Sublessee shall reimburse Sublessor for all costs related to the requested tenant improvements upon Sublessee’s receipt of a detailed invoice from Sublessor in an amount not to exceed the amount agreed to by the Parties. Full payment shall be made to Sublessor by Sublessee within 30-days of receipt of an approved invoice. Article 3 No Rent/Lease Fee; Taxes 3.1 Sublessor agrees to allow Sublessee to use the Daycare Center and common areas of the Property at no cost to Sublessee. Sublessor shall be responsible for any and all taxes and assessments imposed by any governmental agency on or for the use of the Property or the Daycare Center, or that arises out of or is related to this Sublease. Without limiting any of the foregoing, Sublessor shall pay all transaction privilege taxes, personal property taxes, taxes on rents, leases, license, or occupancy; and Government Property Lease Excise Taxes (GPLET), and assessments, special assessments, enhanced municipal services, district assessments, excises, levies, licenses and permit fees, and other governmental or quasi- governmental charges, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind or nature whatsoever which, at any time during the Term may be assessed, levied, confirmed, imposed upon, or arise or become due and payable. Article 4 Sublessor Responsibilities 4.1 Sublessor agrees to provide the following to Sublessee: a) Sublessor grants to Sublessee, for the benefit of the sublessee and its employees, suppliers, shippers, contractors, customers and invitees, during the Term of this Sublease, the non-exclusive right to use, in common with others entitled to such use, the common areas of the Property as they exist from time to time, subject to any rights, powers and privileges reserved by Sublessor under the terms hereof or under the term of any rules and regulations or restrictions governing the use of the Property. Sublessor shall deliver the Daycare Center to Sublessee in a clean condition and warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating, phone, internet connections and air Page 4 of 17 conditioning systems shall be in good operating condition as of the commencement date of this Sublease, that the structural elements of the roof, bearing walls and foundation of the improvements shall be free of material defects. b) Sublessor shall provide heating, ventilation, air conditioning (HVAC), electricity, internet and phone connectivity, water for reasonable and normal drinking and lavatory use at no cost to Sublessee. c) Sublessor shall provide keys to Sublessee to access the Property and the Daycare Center. Access to the Property and Daycare Center by Sublessee for performing the Services shall be from 7:00 am to 4:00 pm Monday through Friday. Sublessee shall not have access to the Property after hours unless otherwise agreed to by Sublessor. Sublessor shall provide sufficient parking at the Property for Sublessee’s agents, invitees and families seeking the Services. d) Sublessor shall maintain the Property and improvements thereto in good repair and shall correct any hazardous conditions. Sublessor shall keep the exterior grounds clean and free from trash and other rubbish. Sublessor shall maintain all utility systems serving the Property in a state of good repair. Sublessor shall maintain the Property in a safe, operating condition. Sublessor has advised Sublessee that various facilities on the Property are under construction and Sublessor will advise Sublessee when possible of times when electrical power service and/or water service may be turned off to the Property and/or the Daycare Center. It is also understood that proper pest control services for the Property shall be the responsibility of Sublessor. e) Sublessor has the right to determine what equipment or personal property may be brought to the Property. At the direction of Sublessor, any equipment or personal property of Sublessee shall be removed by Sublessee upon thirty (30) days written notice from Sublessor to Sublessee. Sublessor is not responsible for any property of any individual, invitee or guest of Sublessee in connection with this Sublease. Sublessor has no liability for the destruction, theft, vandalism, loss or damage of any such personal property. Article 5 Renovations 5.1 If the indoor and outside areas of the Property do not meet Head Start or State Child Care Licensing regulations, Sublessee shall notify Sublessor in Page 5 of 17 writing regarding the deficiency along with the required renovations / repairs for obtaining/maintaining compliance. Sublessor shall determine to what extent renovations shall be performed and shall follow the appropriate procurement rule, A.C.C. R-7-2-1001, et seq., and shall comply, as applicable, with the provisions of the Davis-Bacon Act (40 U.S.C. §§ 276a to 276a-7), the Copeland Act (40 U.S.C. § 276c and 18 U.S.C. §§ 874), and the Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 327-333), regarding labor standards for federally assisted construction sub-agreements. Sublessor shall receive prior written approval from Sublessee prior to Sublessor beginning any renovation work as required under this Section of the Sublease. Sublessor shall submit a detailed invoice to Sublessee for renovation work required under this Section fo the Sublease. It is understood by the Parties that Sublessee’s ability to reimburse Sublessor for renovations and improvements is subject to Sublessee’s availability of funding. Upon completion, the renovations remain the property of Sublessee until such time as all Head Start funding polices are met. If the Sublessor does not construct the required renovations requested by Sublessee, this Sublease is null and void as stated at Article 6. Article 6 Term and Termination 6.1 The term of this Sublease shall commence on or about May 21, 2014 and shall expire on June 30, 2015. Sublessee shall have one (1) option to renew for one (1) additional three-year term. 6.2 Either Party may terminate this Sublease by giving sixty (60) days prior written notice. This Sublease shall automatically terminate upon term expiration or upon the failure of either Party to comply with the terms and conditions of this Sublease. 6.3 This Sublease may be terminated be Sublessee at the end of any fiscal year due to non-appropriation of funds without penalty or liability to Sublessee. Sublessee’s fiscal year ends June 30th (“Sublessee Fiscal Year”). Sublessor and/or any of its employees, agents officers, directors, members, successors or assigns hereby waives any and all rights to bring any claim against Sublessee or its employees, agents officers, directors, members, successors or assigns from or relating in any way to Sublessee’s termination of this Sublease pursuant to Section 6 of the Sublease. 6.3 This Sublease is subject to A.R.S. § 38-511 and may be cancelled by Sublessee pursuant thereto without any penalty or liability to Sublessee. Article 7 Notice 7.1 All notices herein required to be given shall be sent to Sublessor at: Page 6 of 17 A New Leaf Inc. Michael T. Hughes, CEO 868 E. University Dr. Mesa, AZ 852103-8033 Notices to Sublessee shall be sent to: Maricopa County Finance Department Attn: Real Estate Manager 301 W. Jefferson, Suite 960 Phoenix, Arizona 85003 7.2 Either Party may change their respective notice address by providing the other Party with prior written notice of the change of address by certified mail, return receipt requested. 7.3 All notices required or permitted by this Sublease or applicable by law shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, and shall be deemed sufficiently given if served in a manner specified in this Article 7. 7.4 Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Article 8 Governing Law and Venue 8.1 This Sublease shall be governed by and construed in accordance with the laws of the State of Arizona. The parties expressly consent to the exclusive personal jurisdiction and venue of the state or federal courts sitting in Phoenix, Arizona, for any lawsuit arising from or relating to this Sublease. The prevailing Party in any action is entitled to its reasonable attorneys’ fees and costs. Article 9 Entire Agreement 9.1 This Sublease, including the Recitals, sets forth the entire agreement between the parties with regard to the subject matter thereof. Neither Party has made any other agreements, representations nor warranties, Page 7 of 17 either oral or written, to the other with respect to the subject matter of this Sublease except as set forth herein. Article 10 Severability 10.1 If any of the provisions of this Sublease are found or deemed by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions will nevertheless continue in full force and effect without being impaired or invalidated in any way. Article 11 Indemnification 11.1 Each Party (as "Indemnitor") agrees to indemnify, defend, and hold harmless the other Party (as "Indemnitee") from and against any and all claims, losses, liability, costs, or expenses (including reasonable attorney's fees) (hereinafter collectively referred to as "Claims") arising out of bodily injury of any person (including death) or property damage, but only to the extent that such Claims are caused by the act, omission, negligence, misconduct, or other fault of the Indemnitor, its officers, officials, agents, employees, or volunteers. Article 12 Insurance 12.1 Sublessor shall keep in force a policy or policies of insurance in the name of Sublessor insuring loss or damage to the Daycare Center. 12.2 Sublessor acknowledges that Sublessee is self-insured. If requested by Sublessor, Sublessee shall provide Sublessor with a certificate of self- insurance. An “Additional Insured” statement by the Sublessee is detailed at Exhibit “D”. 12.3 So long as their respective insurers so permit, Sublessor and Sublessee hereby mutually waive their respective rights of recovery against each other for any loss insured by a cause of loss – special form policy or other insurance now or hereafter existing for the benefit of the respective Party but only to the extent of the net insurance proceeds payable under such policies. Each Party shall obtain any special endorsements required by their insurer to evidence compliance with the aforementioned waiver. Article 13 Default; Remedies 13.1 Sublessee Default. Each of the following shall constitute a material breach of this Sublease and an event of default by Sublessee (“Sublessee Event of Default”) hereunder: Page 8 of 17 (a) Sublessee’s failure to observe or perform any of the material covenants, conditions or provisions of this Sublease to be observed or performed by Sublessee, where such failure shall continue for a period of thirty (30) days after Sublessee receives written notice thereof from Sublessor provided, however, that such failure shall not be a Sublessee Event of Default if Sublessee has commenced to cure within such thirty (30) day period and thereafter is diligently pursuing such cure to completion, but the total aggregate cure period shall not exceed ninety (90) days unless Sublessee and Sublessor agree in writing that additional time is reasonably necessary under the circumstances to cure such default. (b) Sublessor Remedies. Upon the occurrence of any Sublessee Event of Default and at any time thereafter, Sublessee may, but shall not be required to, exercise any remedies now or hereafter available to Sublessor at law or in equity without such exercise being deemed (a) an acceptance to surrender the Daycare Center; or (b) a termination of this Sublease. 13.2 Sublessor Default. Each of the following shall constitute a material breach of this Sublease and an event of default by Sublessor (“Sublessor Event of Default”) hereunder: (a) Sublessor’s failure to observe or perform any of the material covenants, conditions or provisions of this Sublease to be observed or performed by Sublessor, where such failure shall continue for a period of thirty (30) days after Sublessor receives written notice thereof from Sublessee provided, however, that such failure shall not be a Sublessor Event of Default if Sublessor has commenced to cure within such thirty (30) day period and thereafter is diligently pursuing such cure to completion, but the total aggregate cure period shall not exceed ninety (90) days unless Sublessor and Sublessee agree in writing that additional time is reasonably necessary under the circumstances to cure such default. (b) Sublessor Remedies. Upon the occurrence of any Sublessor Event of Default and at any time thereafter, Sublessee may, but shall not be required to, exercise any remedies now or hereafter available to Sublessee at law or in equity without such exercise being deemed (a) an acceptance of surrender of the Daycare Center; or (b) a termination of this Sublease. 13.3 Attorneys’ Fees and Costs. In the event Sublessor or Sublessee resorts to legal proceedings to enforce any right under this Sublease or to obtain relief for any default by the other Party, the Party prevailing in such proceedings shall be entitled to recover from the defaulting Party the costs thereof, including reasonable attorneys’ fees and costs. Page 9 of 17 Article 14 Waiver 14.1 Acceptance by Sublessor or Sublessee of performance not in compliance with the terms hereof shall not be deemed to waive any future requirements, obligations or duties under the Sublease. Article 15 Amendment/Assignment 15.1 This Sublease may be amended only by a written agreement signed by both parties. 15.2 Sublessee shall not assign any of its rights pursuant to this Sublease without the express written consent of Sublessor and Lessor. Article 16 Interruption of Service 16.1 Notwithstanding the preceding, or anything to the contrary contained herein, the parties acknowledge and agree that under no circumstances shall Sublessor be liable for damages, costs or other losses incurred or suffered by Sublessee as a result of acts of God, war, national emergency, governmental restriction/request/ direction/delay, civil commotion, strikes, fire or other catastrophe, force majeure, and all other causes or events which are beyond Sublessor’s control. This includes, but is not limited to, any inadequacy, stoppage, surge, interruption or discontinuance of any telephone, electric or other utility service. Article 17 Authority to Execute Agreement/Counterparts 17.1 Each Party represents to the other that the person executing this Sublease on behalf of the respective entity is authorized to execute this Sublease and the other Party shall have the right to rely on such representations or warranties. This Sublease may be executed in one or more facsimile counterparts, each of which shall be an original, and all of which taken together shall constitute a single instrument. Article 18 No Partnership or Joint Venture 18.1 Nothing contained in this Sublease shall create any partnership, joint venture or other arrangement between Sublessee and Sublessor. Except and expressly provided herein, no term or provision of this Sublease is intended or shall be for the benefit of any person or entity not a Party hereto, and no such other person or entity shall have any right or cause of action hereunder. Page 10 of 17 Article 19. Immigration Laws 19.1 Sublessor warrants that it is in compliance with A.R.S. §41-4401 and further acknowledges: a. That Sublessor and its subcontractors, if any, warrant their compliance with all federal immigration laws and regulations that relate to their employees and their compliance with A.R.S. § 23- 214, subsection A: after December 31, 2007, every employer, after hiring an employee, shall verify the employment eligibility of the employee through the e-verify program and shall keep a record of the verification for the duration of the employee's employment or at least three years, whichever is longer; b. That a breach of a warranty under Article 19 shall be deemed a material breach of this Sublease that is subject to penalties up to and including termination of this Sublease; c. That Sublessee retains the legal right to inspect the papers of any Sublessor employee, contractor employee or subcontractor employee who works at, on or about the Property to ensure that Sublessor and its contractors and subcontractors are complying with the warranty provided under Article 19 and that Sublessor agrees to make all papers and employment records of said employee(s) available during normal working hours in order to facilitate such an inspection; d. That nothing herein shall make Sublessor or any of Sublessor’s contractors or subcontractors an agent or employee of Sublessee. Article 20 Quiet Enjoyment 20.1 Subject to complying with all of its obligations hereunder, Sublessor covenants that Sublessee shall lawfully and quietly hold, occupy and enjoy the Daycare Center during the Term without hindrance or molestation by Sublessor or anyone lawfully claiming by, through or under Sublessor, subject, however, to the terms and conditions of this Sublease. Article 21 Litter and Trash Removal 21.1 All trash and debris on the Property that is generated by Sublessee must be removed from the site by Sublessee and disposed of in an appropriate manner. No equipment or materials shall be stored outside of any enclosure. Page 11 of 17 Article 22 Debarment, Suspension, Ineligibility and Voluntary Exclusion 22.1 Sublessor asserts to the best of its knowledge and belief that it and its principals: (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any federal department or agency; (b) have not within a 3-year period preceding this Sublease been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (federal, State, or local) transaction or contract under a public transaction; violation of federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (c) are not presently indicted or otherwise criminally or civilly charged by a governmental entity (federal, State, or local) with commission of any of the offenses enumerated in paragraph (b) of this certification; (d) have not within a 3-year period preceding this Sublease had one or more public transactions (federal, State, or local) terminated for cause or default; (e) shall immediately notify Sublessee if, at any time during the term of this Sublease, it is debarred, suspended, declared ineligible, or voluntarily excluded from participation. Sublessee may pursue available remedies in the event of such occurrence, including immediate termination of this Sublease; and (f) shall not enter into a subcontract or sub-recipient agreement with a person or organization that is debarred, suspended, declared ineligible, or voluntarily excluded from participation. Sublessee may pursue available remedies in the event of such occurrence, including immediate termination of this Sublease. Sublessor shall include without modification this paragraph’s language, entitled “Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion – Lower Tier Covered Transactions” with all sub-grantees or other contractors; in all lower tier covered transactions and in all solicitations for lower tier covered transactions in accordance with 45 C.F. R. Part 76. Page 12 of 17 Should Sublessor not be able to provide this assurance, an explanation as to why shall be immediately provided to Sublessee’s Human Services Department, Attention: Grants and Contracts Administrator, 234 N. Central Avenue, Suite 3201, Phoenix, AZ 85004. Page 13 of 17 Lease No. L-7451 C-22-14-XXX-X-00 IN WITNESS WHEREOF, this Agreement is made and entered into as of the last date signed below. SUBLESSEE: SUBLESSOR: MARICOPA COUNTY, a political A NEW LEAF, INC., an Arizona Subdivision of the State of Arizona non-profit corporation _____________________________________ ____________________________________ Chairman of the Board Michael T. Hughes, Chief Executive Officer ATTEST: ____________________________________ Date _____ _______ Clerk of the Board Date APPROVED AS TO FORM: _______ Deputy County Attorney Date Lease No. L-7451 Page 14 of 17 C-22-14-XXX-X-00 EXHIBIT “A” MASTER LEASE Lease No. L-7451 C-22-14-XXX-X-00 Page 15 of 17 EXHIBIT “B” PERMISSION TO SUBLEASE Lease No. L-7451 C-22-14-XXX-X-00 EXHIBIT “C” Page 16 of 17 DAYCARE CENTER Exhibit “D” ADDITIONAL INSURED Page 17 of 17