Extracted text (via pymupdf)
70792 characters
{00595336.1}
1
CITY OF MESA LEASE AGREEMENT
1 WEST MAIN STREET, MESA, AZ
This City of Mesa Lease Agreement (this “Lease”) is dated __________, 2026
(“Effective Date”) and is between the City of Mesa, an Arizona municipal corporation (“City”),
and 1 WM, LLC, an Arizona limited liability company (“Tenant”). City and Tenant may be
referred to jointly as the “Parties” or individually as a “Party.”
RECITALS
As background to this Lease, the Parties state, recite, acknowledge, and agree as follows,
each of which statement is incorporated in this Lease and is made a material provision of this
Lease for all purposes:
A.
Tenant sold to City, and City obtained title of record to, the real property located
at 1 West Main Street, Mesa, Arizona, 85201, legally described in Exhibit A, and the building,
all other improvements, and rights and privileges appurtenant to the real property (collectively,
the “Property”) pursuant to that certain Purchase and Sale Agreement and Escrow Instructions
dated _________, 2026 (the “Purchase Agreement”).
B.
Tenant was willing to sell the Property for two million six hundred and fifty
thousand dollars ($2,650,000.00) but agreed to sell the Property to City for two million five
hundred thousand dollars ($2,500,000.00) provided City executes this Lease as partial
consideration for the Property and as a condition of Tenant’s obligation to close. Tenant would
not have agreed to sell the Property to City at the agreed-upon purchase price in the Purchase
Agreement but for City agreeing to enter into this Lease.
C.
City purchased the Property, which is in high-profile location at the center of
City’s downtown in City’s Central Business District and Town Center redevelopment area, in
order to redevelop the Property to a use that will benefit the public by activating the Property,
attracting visitors to downtown, and increasing tax, parking, and utility revenues to City.
D.
This Lease is temporary, for a term of eighteen (18) months, to allow the existing
tenant to remain on the Property while City plans the redevelopment of the Property and ensures
the Property remains occupied and not vacant during the initial investigation and planning phase
of City’s redevelopment, while allowing City to access the Property.
E.
Tenant acknowledges and agrees this Lease is subject to excise tax liability and
other restrictions imposed under the Government Property Lease Excise Tax (“GPLET”)
provisions of A.R.S. §§ 42-6201, et seq. and that Tenant is responsible for the payment of all
excise and other tax applicable to the Leased Premises and this Lease under GPLET. The failure
to pay such tax will be a Tenant Default, and after notice and an opportunity to cure as set forth
herein, could result in the termination of this Lease, divesting Tenant of any interest in or right of
occupancy of the Property. Tenant disclaims all right to seek any abatement of tax pursuant to
A.R.S. § 42-6209.
{00595336.1}
2
F.
In consideration of all these matters and of the promises of the Parties set forth in
this Lease, the Parties now execute and deliver this Lease on the terms and conditions set forth in
this Lease.
ARTICLE 1
LEASE OF PREMISES
1.01. Leased Premises.
A.
Definition of the “Leased Premises”. The term “Leased Premises” means the
Property and all present and future improvements thereon, including all improvements or
alterations Tenant makes thereto.
B.
Lease. City leases to Tenant and Tenant leases from City the Leased Premises
upon and in consideration of the terms and conditions contained herein and subject to: (1) all title
limitations of record, including liens, encumbrances, easements, assessments, and restrictions;
(2) all operational and use restrictions and other terms, limitations, and conditions set forth in
this Lease; (3) all applicable present and future laws, regulations, ordinances, resolutions,
building restrictions and regulations, and zoning laws of the City of Mesa, and county, state, and
federal bodies having jurisdiction (collectively, “Applicable Laws”); (4) the right of access by
the City of Mesa to City-owned utilities when needed by the City of Mesa for maintenance,
repair, or replacement; and (5) the right of entry by City in accordance with Article 14.
1.02. Covenant of Quiet Enjoyment. As of the Effective Date, City agrees that, if Tenant
performs all its obligations under this Lease, Tenant will peaceably have and enjoy the use of the
Leased Premises without hindrance from City or anyone claiming by or through City. Subject to
the terms of this Lease, Tenant will have the exclusive right to occupy and use the Leased
Premises.
1.03. Condition of Leased Premises. Tenant acknowledges, represents, and agrees that the
Leased Premises is being provided “AS IS,” and Tenant is not relying on any statement or
representation of City about the nature, condition, or size of the Leased Premises. Tenant is
solely relying upon its own inspection and investigation of the Leased Premises.
1.04. Vested Rights. Notwithstanding any other terms in this Lease, Tenant will not have any
vested interest in any portion or the entirety of the Leased Premises.
ARTICLE 2
USE OF LEASED PREMISES
2.01. Permitted Use of Leased Premises. During the entirety of the Term, Tenant must
continuously use the Leased Premises for a business and professional office, as defined in Mesa
City Code, Title 11, Article 8, Chapter 86, Section 11-86-4. Tenant is prohibited from using the
Leased Premises for any other purposes without the prior written consent of City.
{00595336.1}
3
2.02. Conduct of Activities. Tenant must use the Leased Premises in accordance with all
Applicable Laws and conduct its activities in a manner that will not materially interfere or
detract from the value or appearance of the Leased Premises. If Tenant causes damage to the
Leased Premises, City may repair the damage and invoice Tenant for the expenses incurred to
repair the damage, whether repaired by City or an independent contractor at City’s direction.
Tenant must pay such expense, as additional Rent, within thirty (30) days after the date of the
invoice in which City bills Tenant for such expense.
2.03. Nuisance Prohibited. Tenant is prohibited from using or permitting the use of the Leased
Premises in any way that would create, or cause to be created, nuisances or hazards to the public
health or safety.
ARTICLE 3
TERM
The term of this Lease commences on the Effective Date and will continue for a period of
eighteen (18) months, unless otherwise cancelled or terminated as provided herein (the “Term”).
ARTICLE 4
RENTAL FEE; PAYMENT; TAXES
4.01. Rental Fee. Beginning on the Effective Date and on or before the first day of every month
thereafter during the Term, Tenant covenants and agrees to pay to City a monthly rental fee (the
“Rent”) in the amount of five dollars ($5.00) plus all taxes levied upon Tenant’s occupancy of
the Leased Premises.
4.02. Payment. The Rent and all other fees or payments due under this Lease must be paid in
lawful currency of the Unites States, either by check or electronic transfer. Tenant may, at
Tenant’s sole discretion and without penalty, pre-pay the total Rent due for the Term in one
installment on the Effective Date. If Tenant fails to pay any installment of the Rent in full on or
before the due date or fails to pay any other fees or payments when due, Tenant will be
responsible for interest on the unpaid amount at the rate of twelve (12%) per annum from the due
date (or, for non-Rent payments, from the due date) until payment in full is made. If any
installment of the Rent is paid more than twenty (20) days after the due date (or, for non-Rent
payments, twenty (20) days after the due date), a late penalty equal to ten percent (10%) of the
amount of such delinquent payment will be due and payable in addition thereto.
4.03. Payment of Lesser Amount; Recovery of Balance. Payment by Tenant to City of an
amount less than what is due and payable under the provisions of this Lease will be deemed a
payment on account of the earliest payment due. City’s endorsement or statement on a check or
payment will not prejudice in any way City’s right to recover the balance of such payment or
pursue any other remedy provided in this Lease or by law.
4.04. Payment Procedure. All fees and payments due under this Lease must be remitted to City
to the address provided in Section 23.01.
{00595336.1}
4
4.05. No City Expenses; Triple Net Lease. Tenant agrees to pay all expenses related to this
Lease and Tenant’s use of the Leased Premises, and Tenant must indemnify, defend, and hold
harmless City Indemnified Persons from all expenses related to Tenant’s use of the Leased
Premises, including all expenses, taxes, and insurance. It is the purpose and intent of the Parties
that this lease be a so-called “triple net lease.” As such, City and Tenant intend and agree that
(A) the Rent and all other fees or payments due under this Lease will be absolutely net to City, so
that this Lease will yield net to City the Rent and all other fees or payments due under this Lease;
(B) all costs, operating expenses, taxes, premiums, fees, interest, charges, expenses,
reimbursements, and obligations of every kind and nature whatsoever relating to the Leased
Premises will be paid or discharged by Tenant; and (C) each and every obligation that may arise
or be related to the Leased Premises will be performed by Tenant at its sole expense.
4.06. Taxes. Tenant will pay, without notice (except as specifically provided herein), and
without abatement, deduction, or setoff, before any fine, penalty, interest, or cost may be added
thereto, or become due or be imposed by operation of law for the nonpayment thereof, all sums,
impositions, costs, expenses, and other payments and all taxes, including personal property taxes
and taxes on rents, leases or occupancy, GPLET tax (see Section 4.07), and assessments, special
assessments, enhanced municipal services district assessments, water and sewer rents, rates and
charges, charges for public utilities, excises, levies, licenses and permit fees, and other
governmental or quasi-governmental taxes or 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 grow or become due and
payable out of or with respect to, or become a lien on or encumbering, the Leased Premises, or
any part thereof, or any appurtenances thereto, or any use or occupation of the Leased Premises.
4.07. Government Property Lease Excise Tax. Tenant acknowledges and agrees this Lease is
subject to excise tax liability and other restrictions imposed under the GPLET provisions of
A.R.S. §§ 42-6201, et seq. Tenant disclaims all right to seek any abatement of tax pursuant to
A.R.S. § 42-6209. Tenant is responsible for the payment of all excise and other tax applicable to
the Leased Premises or this Lease under GPLET due and owing through the termination of this
Lease, and the failure to pay such tax will be a Tenant Default as set forth in Section 17.01.
Pursuant to Section 4.05, this Lease is a triple-net lease for which Tenant agrees to pay all
expenses related to this Lease and Tenant’s use of the Leased Premises, and Tenant must
indemnify, defend, and hold harmless City Indemnified Persons from any expenses related to
Tenant’s use of the Leased Premises, including all taxes under GPLET.
ARTICLE 5
REPRESENTATIONS, WARRANTIES, AND COVENANTS
5.01. Tenant—Lawfully in Arizona. Tenant is a limited liability company, duly organized,
validly existing, in good standing, under the laws of Arizona and which is authorized to operate
in the State of Arizona. Tenant has full power and authority to execute, deliver, and perform this
Lease and to enter into and carry out the transactions contemplated herein. The execution,
delivery, and performance of this Lease and the other documents related to the Leased Premises
do not violate any provision of law applicable to Tenant or its organizational documents, and do
{00595336.1}
5
not conflict with or result in a default under any agreement or instrument to which Tenant is a
party or by which it is bound.
5.02. Tenant—No Additional Authorizations or Consents Needed. No authorizations, consents,
or approvals are required in connection with the execution and delivery of this Lease or in
connection with the carrying out by Tenant of its obligations hereunder.
5.03. Tenant—No Defaults. To the best of Tenant’s knowledge, Tenant is not in default in: (A)
the payment of any of Tenant’s indebtedness for borrowed money; or (B) any material respect
under any order, writ, judgment, injunction, decree, determination, or award or any indenture,
agreement, lease, or instrument.
5.04. City—Lawfully in Arizona. City is a municipal corporation operating under the laws of
the Arizona.
5.05. City—No Additional Authorizations or Consents Needed. No authorizations, consents, or
approvals are required in connection with the execution and delivery of this Lease or in
connection with the carrying out by City of its obligations hereunder.
5.06. City—No Defaults. To the knowledge of the individual signing this Lease on behalf of
City, City is not in default in: (A) the payment of any of City’s indebtedness for borrowed
money; or (B) any material respect under any judicial order, writ, judgment, injunction, decree,
determination or award, or any indenture, agreement, lease. or instrument.
ARTICLE 6
IMPROVEMENTS
6.01. Improvements. The term “Improvement(s)” means any and all improvements,
alterations, additions, enhancements, fixtures, or modifications to the Leased Premises. Tenant
may not make any Improvement, whether temporary or permanent, to the Leased Premises
without City’s prior written consent, which consent may withhold in its sole discretion. If City
consents to an Improvement by Tenant, Tenant must submit to City complete architectural,
electrical, mechanical, or other applicable plans and specifications covering all work for the
Improvements. Such plans and specifications must be prepared to the standards and
specifications determined by City and Tenant may not commence any work on the proposed
Improvements until City has approved the plans and specifications. Any changes in the plans or
specifications must also be approved by City prior to Tenant commencing work according to the
proposed changes in the plans or specifications. Notwithstanding the foregoing, Tenant is
responsible for complying with Applicable Laws in performing work for all Improvements,
including all applicable building and construction codes and permit requirements. Tenant may
not commence any work on any Improvements until Tenant obtains all required permits from the
City of Mesa. Additionally, Tenant must perform all work on all Improvements in a safe,
sanitary, neat and clean manner, and must promptly remove from the Leased Premise all trash
and debris caused by the work and must take reasonable care to limit the dust and disturbance
caused by the work. All Improvements must be constructed and maintained in a good and
{00595336.1}
6
workmanlike manner and in compliance with Applicable Laws. Improvements may be subject to
inspection by the City of Mesa, as determined at the sole discretion of the City of Mesa.
6.02. Title to Improvements. All Improvements will immediately upon completion or
installation thereof become the exclusive property of City without payment therefor by City and
will be surrendered to City upon expiration or other termination of this Lease. Tenant agrees to
execute and deliver to City, within ten (10) days after City’s request therefor, a quitclaim deed
confirming that title to Improvements is vested in City.
6.03. City’s Right to Conduct Maintenance. In the event Tenant fails to maintain or repair an
Improvement, then City may give Tenant written notice specifying such failure to maintain or
repair the Improvement, and if such failure continues for a period of thirty (30) days after Tenant
receives the written notice, City will have the right, but not the obligation, to perform any such
maintenance or repairs at Tenant’s sole expense. Tenant must pay such expense, as additional
Rent, within thirty (30) days after the date of the invoice in which City bills Tenant for such
expense. Notwithstanding the foregoing, prior notice given by City and a cure period given to
Tenant pursuant to this section are not required to be given in the event of an emergency or when
Landlord determines emergency maintenance or repair is reasonably necessary.
6.04. Applicability. The provisions of this Article 6 will not apply to the repair, replacement, or
maintenance of the Leased Premises where otherwise addressed in this Lease.
ARTICLE 7
MECHANICS LIENS
7.01. Mechanics Liens. Tenant agrees to keep the Leased Premises free of any mechanics’ or
materialman’s liens or other liens of any kind or nature for work done, labor performed, or
material furnished thereon at the instance or occasion of Tenant, and Tenant further agrees to
indemnify, defend, and hold harmless City Indemnified Persons from and against any and all
claims, liens, demands, costs, and expenses of whatever nature for any such work done, labor
performed, or materials furnished.
7.02. No Agency. Tenant is not an agent of City, nor an employee of City, nor is Tenant or its
agents or employees authorized to act for or on behalf of City as its agent, employee,
representative, or otherwise, for any purpose, including the constructing of any Improvement at
the Leased Premises, and neither City nor City’s interest in the Leased Premises will be subject
to any obligations incurred by Tenant.
ARTICLE 8
UTILITIES AND SERVICES
8.01. Utilities and Services. Tenant is responsible for and must pay for all utilities supplied to,
used, or consumed in or on the Leased Premises, including all water, sewer, gas, electric, and
waste disposal services as and when the charges therefore become due and payable. Tenant will
have all utilities turned on in Tenant’s name at the time of occupation of the Leased Premises.
Tenant is also responsible for and will pay for any technology (IT) needs or other services,
{00595336.1}
7
including telephone service, WI-FI access, and internet connectivity/access necessary or
desirable to serve the Leased Premises.
8.02. City’s Use of Utility Lines/Service. City retains the right to the continued use for any
utility lines and utility improvements and services (including all uses allowed in a Public Utilities
Facilities Easement or other easement under the Mesa City Code) as are presently on, under,
over, or through the Leased Premises and the right to repair, maintain, and replace the same
when necessary in City’s sole discretion, including any utility easements on the Leased Premises.
City will conduct such repairs in such a manner and at such times as to not unreasonably
interfere with Tenant’s activities thereon.
ARTICLE 9
MAINTENANCE AND REPAIRS
9.01. Tenant’s Maintenance and Repair Obligations. Tenant is, at its sole expense, responsible
for all repairs, maintenance, and replacement obligations of any and every kind whatsoever
related to the Leased Premises and all Improvements thereon, including: (A) the building and all
structural components thereof (including roof, foundation, walls, floors, and framing); (B) all
non-structural components; (C) all building systems (including HVAC, plumbing, electrical,
mechanical, fire/life safety, security, utility lines, and drainage systems); (D) all exterior and
interior areas; (E) all parking areas, landscaping, irrigation systems, driveways, sidewalks, and
access ways; and (F) all fixtures, equipment, and improvements now or hereafter located on or
affixed to the Leased Premises. Tenant’s obligations expressly include the maintenance, repair,
and replacement of all capital improvements and replacements necessary to keep the Leased
Premises in first-class condition and in compliance with Applicable Laws, whether such repairs
or replacements are ordinary or extraordinary, foreseen or unforeseen, structural or non-
structural, and regardless of the cost thereof. Tenant must promptly replace any item that cannot
be repaired to good working order with items of equal or better quality.
9.02. Standard of Care. Tenant must at all times maintain the Leased Premises in a neat, clean,
safe, sanitary, and orderly condition, including to perform all necessary repairs and maintenance,
and periodic replacement, restoration, and painting as needed to maintain the Leased Premises in
a neat, clean, safe, sanitary, and orderly condition. Tenant must provide custodial services to the
Leased Premises. Tenant must prevent the accumulation of any refuse or waste materials which
might constitute a health or fire hazard or public nuisance, and Tenant is responsible for all trash
and recycling removal from the Leased Premises. Additionally, Tenant is responsible for
maintaining the outdoor space and landscaping on the Leased Premises in good order, condition,
and repair.
9.03. No Obligation of City; City’s Right to Perform. City has no obligations to maintain or
repair the Leased Premises during the Term; however, if Tenant fails to maintain or repair the
Leased Premises or any Improvement thereon in compliance with this Lease, then City may give
Tenant written notice specifying such failure to maintain or repair, and if such failure continues
for a period of thirty (30) days after the date of the written notice, City will have the right, but
not the obligation, to perform any or all such maintenance or repairs at Tenant’s sole expense.
Tenant must pay such expense, as additional Rent, within thirty (30) days after the date of the
{00595336.1}
8
invoice in which City bills Tenant for such expense. Notwithstanding the foregoing, prior notice
given by City and a cure period given to Tenant pursuant to this section are not required to be
given in the event of an emergency or when City determines emergency maintenance or repair is
reasonably necessary.
9.04. Damage to Leased Premises. Any damage to the Leased Premise or to real or personal
property of City at the Leased Premises caused by or related to Tenant’s use or occupancy of the
Leased Premises, ordinary wear and tear excepted, must be promptly repaired or replaced by
Tenant, at Tenant’s sole expense and to the reasonable satisfaction of City. At City’s sole
discretion, City may require Tenant, in lieu of such repair or replacement, to pay City an amount
sufficient to compensate City for the damage, which amount will be a commercially reasonable
repair or replacement cost.
9.05. Emergency Repairs. Within fifteen (15) calendar days of the effective date, each Party
must provide to the other Party a list of names and telephone numbers for 24-hour emergency
contact for the Leased Premises.
ARTICLE 10
SECURITY
10.01. Security. Tenant acknowledges and agrees that City provides no security at or for the
Leased Premises. Tenant agrees that City has no obligation to provide security and that City is
not responsible for any damage or theft that may occur in, on, or around the Leased Premises.
Tenant’s indemnification obligations outlined in Article 12 include all third-party claims relating
to or arising out of security (including lack of security and types of security installed) for the
Leased Premises and any employee, invitee, or person on the Leased Premises.
10.02. Tenant’s Obligation to Secure Leased Premises. It is Tenant’s sole responsibility to
secure the Leased Premises. Should Tenant fail to secure the Leased Premises and damage by a
third party to the Leased Premises occurs, City may give Tenant written notice specifying such
damage to the Leased Premises, and if such damage is not repaired within thirty (30) days after
Tenant receives the written notice, City will have the right to repair the damage and invoice
Tenant for the expenses incurred to repair the damage, whether repaired by City or an
independent contractor at City’s direction. Tenant must pay such expense, as additional Rent,
within thirty (30) days after the date of the invoice in which City bills Tenant for such expense.
Notwithstanding the foregoing, prior notice given by City and a cure period given to Tenant
pursuant to this section are not required to be given in the event of an emergency or when
Landlord determines emergency maintenance or repair is reasonably necessary.
ARTICLE 11
INSURANCE AND RISK OF LOSS
11.01. Coverage Required. As a condition precedent to the effectiveness of this Lease, Tenant
must procure and at all times maintain the following types and amounts of insurance for its
operations at, and use of, the Leased Premises:
{00595336.1}
9
A.
General Liability Insurance. General Liability insurance with minimum coverage
of two million dollars ($2,000,000.00) per occurrence and four million dollars ($4,000,000.00) in
the aggregate. The policy must include, at a minimum, coverage for bodily injury, property
damage, personal injury, products/completed operations, and blanket contractual coverage,
including the liability assumed under the indemnification provisions of this Lease. If
environmental pollution or environmental hazards are excluded from the General Liability
policy, a separate Pollution Insurance Policy will be required with minimum coverage of one
million dollars ($1,000,000.00) each occurrence/aggregate.
B.
Property Insurance. Tenant is responsible for carrying fire and broad form
property coverage for the Leased Premises, all improvements, and permanent fixtures for the
replacement value thereof on the Leased Premises. City must be named as “Loss Payee” on the
property insurance policy. All merchandise, furniture, floor coverings, and all personal property
and trade fixtures and equipment belonging to Tenant, and all persons claiming by or through
Tenant, which may be on the Leased Premises, will be at the Leased Premises at Tenant’s sole
risk.
C.
Workers’ Compensation Insurance. Tenant must maintain workers’ compensation
insurance to cover obligations imposed against Tenant by federal and state law.
11.02. Evidence and Requirements for All Insurance Coverages. Upon the Effective Date,
Tenant must provide City with a Certificate(s) of Insurance (using the appropriate ACORD
certificate) signed by the issuer with applicable endorsements. City reserves the right to request
additional copies of any or all of the policies, endorsements, or notices relating to the policies.
A.
Tenant’s Insurance Primary. Tenant’s insurance will be primary to all other
sources available. No policy will expire, be cancelled, or materially changed to affect the
coverage available without advance written notice to City.
B.
Approval by Risk Manager. All insurance certificates and applicable
endorsements are subject to review and approval by City’s Risk Manager.
C.
Waiver of Subrogation. All insurance policies (whether or not required by this
Lease) must contain a waiver of subrogation in favor of the City Indemnified Persons; however,
such waiver will not apply to claims solely caused by the City’s gross negligence or willful
misconduct.
D.
Insurance Company. All policies must be from a company or companies rated A-
or better, authorized to do business in the State of Arizona.
11.03. No Limits on Indemnification. The procuring of such policies of insurance will not be
construed to be a limitation upon Tenant’s liability or as a full performance on its part of the
indemnification provisions of this Lease.
{00595336.1}
10
11.04. Additional Insureds. City Indemnified Persons must be named as additional insureds on
all insurance policies (except workers’ compensation), issued pursuant to this Article 11 during
the entire Term of this Lease.
11.05. City’s Right to Adjust Insurance. City may reasonably adjust the amount and type of
insurance Tenant is required to obtain and maintain under this Lease as reasonably required by
City’s Risk Manager. Prior to making any adjustment in insurance, City will consult with Tenant
in order to determine the cost feasibility of Tenant to obtain such adjusted insurance; however, if
City reasonably believes Tenant can afford such adjusted insurance, Tenant will be required to
obtain such adjusted insurance.
11.06. Use of Proceeds. Proceeds (or an equivalent amount of such proceeds) of any property
damage insurance will be applied as required by this Lease.
11.07. Insurance by City. In the event Tenant fails to procure any insurance required hereunder,
City may, seven (7) days after providing written notice to Tenant and Tenant’s failure to obtain
such insurance following notice, procure and maintain any or all of the insurance required of
Tenant under this Article 11. City will itemize such costs and invoice Tenant for same. Tenant
must pay such expense, as additional Rent, within thirty (30) days after the date of the invoice in
which City bills Tenant for such expense.
11.08. Tenant’s Obligation to Restore. In the case of fire or other casualty caused or related to
Tenant’s use of the Leased Premises, that results in damage to or destruction of the Leased
Premises or improvements thereon, or damage to or destruction of other property of City,
Tenant, or third parties, then Tenant must, at its sole expense, proceed with reasonable diligence
to repair, restore, replace, or rebuild the same as nearly as possible to its value, condition, and
character immediately prior to such damage or destruction; provided, however, that Tenant’s
foregoing obligations will be limited to the amount of insurance proceeds available for such
repair, restoration, or rebuild and any deducible thereto (if Tenant fails to maintain the insurance
required by this Lease, Tenant is responsible for the amount that insurance would have provided
in such circumstances). Unless otherwise agreed to by Parties in writing, Tenant will use all
insurance proceeds plus the amount of any deductible for such insurance to repair, restore, or
rebuild the Leased Premises and improvements thereon. Tenant’s obligation to pay the Rent, and
any other amounts owing under this Lease, will continue regardless of any partial, substantial, or
total destruction of the Leased Premises; provided, however, if the insurance proceeds and any
deducible amount (and any amounts City is willing to pay to restore even though City has no
obligation to pay any such amounts) are not sufficient to restore the Leased Premises to a
condition that would allow Tenant to use the Leased Premises as reasonably intended, or if the
Parties agree in writing to not use such proceeds to restore the Leased Premises, then Tenant may
terminate this Lease through the following: (A) payment by Tenant to City of all insurance
proceeds for the Leased Premises (except proceeds to cover loss for Tenant’s personal property),
plus any deductible amount (or if Tenant fails to maintain the insurance required by this Lease,
Tenant will be responsible for the amount that insurance would have provided in such
circumstances); and (B) thirty (30) days written notice to City. Such a termination will be
deemed to be the end of the term of this Lease. City will have no responsibility or liability for
{00595336.1}
11
any damage or destruction by fire or other casualty and will have no obligation to repair, restore,
or rebuild the Leased Premises in such event.
ARTICLE 12
INDEMNIFICATION
12.01. City Responsibility for Own Negligence. City will be liable for the gross negligence or
willful misconduct of City Indemnified Persons while on official business at the Leased
Premises.
12.02. Indemnification. Except as otherwise provided in Section 12.01, Tenant must indemnify,
defend, and hold harmless individually and collectively City and its officers, directors, officials,
elected officials, employees, and agents (collectively, the “City Indemnified Persons”), for,
from, and against all liabilities, losses, damages, costs, expenses (including reasonable attorneys’
fees and costs), causes of action (whether in contract, tort, or otherwise), suits, claims, demands,
and judgments of every kind, character, and nature whatsoever from third parties (collectively,
the “Liabilities”) directly or indirectly arising from or relating to Tenant’s performance under
this Lease, or due to Tenant’s, or its officers’, directors’, employees’, agents’, contractors’, or
invitees’ (including customers) (collectively, the “Tenant Agent(s)”) occupancy, activities, or
operations on, at, or of the Leased Premises, including all the following:
A.
Any Liabilities, directly or indirectly arising out of or connected with the use,
non-use, condition, or occupancy of the Leased Premises or any part thereof, for any accident,
injury to or death of any person or damage to property in or upon the Leased Premises during the
Term.
B.
Any breach or violation by Tenant of any agreement, covenant, warranty,
representation, or condition of this Lease or any other documents executed in connection with
this Lease.
C.
Any violation due to a Tenant Agent of any contract, agreement, or restriction
relating to the Leased Premises or any part thereof.
D.
Any violation due to a Tenant Agent of any law, ordinance, or regulation
affecting the Leased Premises or any part thereof or the ownership, occupancy or use thereof
during the Term of this Lease.
E.
Any other Liabilities set forth in the terms of this Lease.
12.03. No Limits on Indemnification. The procuring of any policies of insurance will not be
construed to be a limitation upon City’s liability or viewed as a full performance on its part of the
indemnification provisions of this Lease.
ARTICLE 13
ENVIRONMENTAL INDEMNIFICATION
{00595336.1}
12
13.01. No Hazardous Materials and Indemnity. Neither Tenant nor City may bring onto,
generate, use, store, or dispose of in, on, or about the Leased Premises any Hazardous Material
(as defined in Section 13.03). In addition to and without limitation of any other indemnification
provisions of this Lease, Tenant must indemnify, defend, and hold harmless City Indemnified
Persons against all Liabilities incurred by reason of any Hazardous Material on or affecting the
Leased Premises, to the extent attributable to or caused by a Tenant Agent.
13.02. Remediation and Restoration. In addition to and without limitation of any other
indemnification provisions of this Lease, if due to the actions or inactions of a Tenant Agent, the
presence of any Hazardous Material in or on the Leased Premises results in any contamination of
the Leased Premises or any adjacent real property, Tenant must: (A) promptly, and with best
efforts, take all actions at its sole expense as are necessary to mitigate any immediate threat to
human health; and (B) undertake any action necessary to return the Leased Premises and other
property, as applicable, to the condition existing prior to the introduction of any Hazardous
Material. Additionally, Tenant must first obtain the written approval of City before initiating the
remediation or restoration actions. If Tenant fails to remediate and restore the Leased Premises
as required herein, Tenant must reimburse City for all expenses incurred by City for the
remediation and restoration of the Leased Premises. Tenant must pay such expenses, as
additional Rent, within thirty (30) days after the date of the invoice in which City bills Tenant for
such expenses.
13.03. Definition of Hazardous Material. The term “Hazardous Material” means any
hazardous or toxic substance, material, or waste that is or becomes regulated by the United
States, the State of Arizona, or any local government authority having jurisdiction over the
Leased Premises. Hazardous material includes all the following:
A.
Any “hazardous substance” as that term is defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) (42 United
States Code §§ 9601 9675), including all amendments thereto or successor statutes.
B.
Any “hazardous waste” as that term is defined in the Resource Conservation and
Recovery Act of 1976 (RCRA) (42 United States Code §§ 6901 6992K), including all
amendments thereto or successor statutes.
C.
Any pollutant, contaminant, or hazardous, dangerous, or toxic chemical, material,
or substance, within the meaning of any other applicable federal, state, or local law, regulation,
ordinance, or requirement (including consent decrees and administrative orders imposing
liability or standards of conduct concerning any hazardous, dangerous, or toxic waste, substance,
or material, now or hereafter in effect).
D.
Petroleum products.
E.
Radioactive material, including any source, special nuclear, or byproduct material
as defined in 42 United States Code § 2014, including all amendments thereto or successor
statutes.
{00595336.1}
13
F.
Asbestos in any form or condition.
H.
Polychlorinated biphenyls (PCBs) and substances or compounds containing
PCBs.
ARTICLE 14
ENTRY BY CITY
14.01. Entry by City. City reserves the right, without abatement of Rent and other charges due
hereunder from Tenant, to enter upon or have its employees, agents, contractors, and assignees
enter upon the Leased Premises upon twenty-four (24) hours prior written notice to Tenant, for
any reasonable purpose, including: (A) to inspect the Leased Premises to determine if the
provisions of this Lease are being complied with; (B) to conduct investigations and inspections
related to the physical and environmental condition of the Leased Premises; (C) although City
has no obligation to do so, if Tenant fails to maintain or repair the Leased Premises as required
herein, to perform repairs or maintenance at Tenant’s sole expense, or to perform emergency
repairs or maintenance, in accordance with Article 9; (D) if Tenant fails to remediate and restore
the Leased Premises as required herein, to perform remediation and restoration related to
Hazardous Materials, in accordance with Article 13; and (E) to conduct investigations and
inspections related to City’s planned development of the Leased Premises. Notwithstanding the
foregoing, the notice to Tenant prior to City’s entry will not be required in the event of an
emergency.
14.02. Waiver of Claims. Tenant waives any claim for damage, injury, or inconvenience to or
interference with Tenant’s operations, any loss of occupancy or quiet enjoyment of the Leased
Premises, and any other loss occasioned by City’s entry unless such claim is a direct result from
City’s negligent or intentional misconduct. City has the right to use any and all means which
City deems necessary to gain access to the Leased Premises and Tenant’s personal property,
trade fixtures, and equipment in the event of an emergency and, following the emergency, City
will notify Tenant of City having accessed the Leased Premises.
ARTICLE 15
NON-DISCRIMINATION
Tenant, for all Tenant Agents, as a part of the consideration hereof, covenants and agrees that no
person on the grounds of race, color, ethnicity, national origin, age, disability, religion, sex,
sexual orientation, gender identity, veteran’s status, marital status, familial status, or genetic
information will be excluded from participation, denied the benefits of, or be otherwise subject to
unlawful discrimination in the use of the Leased Premises or in the construction of any
Improvements on, over, or under the Leased Premises or the furnishing of services thereon.
ARTICLE 16
ASSIGNMENT, SUBLETTING, ENCUMBERING
16.01. Transfers. Tenant may not sublet, transfer, assign, mortgage, pledge, hypothecate, allow
use of, or encumber (“Transfer”) the Leased Premises, or any part thereof, without City’s prior,
{00595336.1}
14
written approval, which may be granted or denied in City’s sole discretion. Any Transfer without
said approval, whether voluntary or involuntary, will be void and will confer no right of
occupancy upon said assignee or purchaser. Notwithstanding the foregoing, Tenant is permitted,
without further approval required by City, one (1) Transfer as follows: Tenant may sublease the
Leased Premises to an entity that will continuously use the Leased Premises for a business and
professional office, as defined in Mesa City Code, Title 11, Article 8, Chapter 86, Section 11-86-
4, as required by Section 2.01.
16.02. Assumption of Obligations. A Transfer of this Lease that is approved by City must
include the agreement to perform all the obligations of Tenant under this Lease and must retain
Tenant as a guarantor of the original obligation.
16.03. Non-Subordination. City’s interest in the Leased Premises and this Lease, as the same
may be modified or amended will not be subject or subordinate to: (A) any mortgage now or
hereafter placed upon Tenant’s interest in this Lease; or (B) any other liens, encumbrances, or
other matters hereafter affecting Tenant’s interest in this Lease.
16.04. Liens and Mortgages. Except as may be permitted under the terms of the Agreement,
Tenant is prohibited from engaging in any financing or other transaction creating any mortgage
or deed of trust upon the Leased Premises or this Lease, place or suffer to be placed upon the
Leased Premises any lien or other encumbrance, or suffer any levy or attachment to be made, on
Tenant’s interest in the Leased Premises or this Lease. Except as contemplated in this Lease, any
such mortgage or deed of trust, encumbrance, or lien will be deemed to be a violation of this
section, constituting a Tenant Default on the date of its execution or filing of record regardless of
whether or when it is foreclosed or otherwise enforced.
ARTICLE 17
DEFAULT
17.01. Event of Default. The occurrence of any of the following will constitute an event of
default by Tenant (“Tenant Default”) hereunder:
A.
The filing of a petition by or against Tenant for adjudication as bankrupt or
insolvent, or for its reorganization or for the appointment of a receiver or trustee of Tenant’s
property; an assignment by Tenant for the benefit of creditors or the taking of possession of the
property of Tenant by any governmental officer or agency pursuant to statutory authority for the
liquidation of Tenant.
B.
Failure of Tenant to pay any installment of the Rent or any other fees or payments
due under this Lease, provided that Tenant does not cure such failure within fifteen (15) days
after delivery by City of a written notice of such failure.
C.
Failure of Tenant to perform any of its other obligations under this Lease,
provided that Tenant does not cure such failure within thirty (30) days after delivery by City of a
written notice of such failure; however, if a cure of the failure reasonably requires more than
{00595336.1}
15
thirty (30) days to complete and City agrees, then the time to cure will be extended provided that
Tenant is diligently pursuing the cure.
D.
Failure of Tenant, pursuant to A.R.S. § 42-6206, to pay tax liability, provided that
Tenant does not cure such failure within thirty (30) days after delivery by City of a written notice
of such failure; provided, however, if a cure of the failure reasonably requires more than thirty
(30) days to complete and City agrees, then the time to cure will be extended provided that
Tenant is diligently pursuing the cure.
E.
Abandonment of the Leased Premises by Tenant, as provided in Section 17.02.
F.
The filing of any mechanic’s, materialmen’s, or other lien of any kind against the
Leased Premises because of any act or omission of Tenant, which lien is not discharged by
bonding or otherwise, within thirty (30) days of receipt of actual notice thereof by Tenant.
G.
The failure of Tenant to maintain all insurance coverage required by this Lease
(and any cure must cover any lapsed or uncovered period of time).
17.02. Abandonment. If Tenant, prior to the expiration or other termination of this Lease,
relinquishes possession of the Leased Premises without City’s prior written consent, or fails
continuously use the Leased Premises for a business and professional office, as defined in Mesa
City Code, Title 11, Article 8, Chapter 86, Section 11-86-4, for a period of thirty (30) days or
more, such occurrence will be deemed to be an abandonment of the Leased Premises and a
Tenant Default.
17.03. Waiver. There will be no implied waivers. Provided further, an express waiver by City of
any breach by Tenant or Tenant Default in the performance of its obligations under this Lease
will not be deemed to be a waiver of any subsequent Tenant Default in the performance of any of
such obligations, an express waiver will not affect a Tenant Default in any manner other than as
specified in the express waiver, and an express waiver will not be restrict City from later
enforcing any of the terms and conditions of this Lease. The consent or approval by City to or of
any act by Tenant requiring City’s consent or approval will not be deemed to waive or render
unnecessary City’s consent or approval to or for any subsequent similar acts by Tenant.
17.04. City Default. The following will constitute a default of this Lease by City (a “City
Default”): the failure of City to perform any of its material obligations under this Lease when
City does not cure such failure within thirty (30) days after delivery by Tenant of a written notice
of such failure; provided, however, if a cure of the failure reasonably requires more than thirty
(30) days to complete and Tenant agrees, then the time to cure will be extended provided that
City is diligently pursuing the cure.
17.05. Content of Default Notice. Any default notice tendered by either Party hereunder will be
sufficient if it complies with Section 23.01 and is reasonably calculated to put the other Party on
inquiry as to the nature and extent of such default.
ARTICLE 18
{00595336.1}
16
TERMINATION
18.01. Termination for Tenant Default. If Tenant Default occurs, City may, at its election,
without prejudice to any other rights and remedies available to City at law or in equity, terminate
this Lease and the tenancy created by this Lease. In such case, Tenant must surrender the Leased
Premises to City pursuant to Article 20.
18.02. Termination for City Default. In the event of a City Default, Tenant may, at its election,
without prejudice to any other rights and remedies available to Tenant at law or in equity,
terminate this Lease and the tenancy created by this Lease. In such case, Tenant must surrender
the Leased Premises to City pursuant to Article 20.
18.03. City’s Damages Relating to Termination. City will be entitled to recover from Tenant all
damages incurred by City by reason of a Tenant Default. Tenant must pay such damages, as
additional Rent, within thirty (30) days after the date of the invoice in which City bills Tenant for
such damages.
18.04. Preservation of State Shared Revenue. Notwithstanding any other provision of, or
limitation in, this Lease to the contrary, if pursuant to A.R.S. § 41-194.01, the Attorney General
determines that this Lease violates any provision of state law or the Constitution of Arizona
(including A.R.S. § 42-6201 et seq.), City and Tenant must use all and best faith efforts to
modify this Lease so as to fulfill each Parties rights and obligations in the Agreement while
resolving the violation with the Attorney General. If within thirty (30) days of notice from the
Attorney General pursuant to and under the provisions of A.R.S. § 41-194.01(B)(1), City and
Tenant cannot agree to modify this Lease so as to resolve the violation with the Attorney
General, this Lease will automatically terminate at midnight on the thirtieth (30th) day after
receiving such notice from the Attorney General, and upon such termination the Parties will have
no further obligations under this Lease except for those provisions that survive the termination or
expiration of this Lease pursuant to Section 23.10 or as otherwise specifically set forth in this
Lease. Additionally, if the Attorney General determines that this Lease may violate a provision
of state law or the Constitution of Arizona under A.R.S. § 41-194.01(B)(2), and the Arizona
Supreme Court requires the posting of a bond under A.R.S. § 41-194.01(B)(2), City will be
entitled to terminate this Lease, except if Tenant posts such bond, if required; and provided
further, that if the Arizona Supreme Court, determines that this Lease violates any provision of
state law or the Constitution of Arizona, City or Tenant may terminate this Lease and the Parties
will have no further rights, interests, or obligations in this Lease or claim against the other Party
for a breach or default under this Lease.
18.05. Election to Terminate. No action of City will be construed as an election to terminate this
Lease unless written notice of such intention is given to Tenant.
ARTICLE 19
REMEDIES
19.01. City’s Additional Remedies. In addition to any and all remedies available to City as a
matter of law and those set forth in other provisions of this Lease, City will, subject to applicable
{00595336.1}
17
cure periods, have the immediate right upon a Tenant Default, to resort to any and all legal
remedies or combination of remedies which City may desire to assert, including one or more of
the following: (A) lock access to the Leased Premises and exclude Lessee therefrom; (B) retain
or take possession of any property at the Leased Premises pursuant to City’s statutory lien; (C)
enter the Leased Premises and remove all persons and property therefrom; (D) declare this Lease
at an end and terminated; (E) sue for the Rent due and to become due under this Lease, and for
any damages sustained by City; (F) collect, directly from any subtenant or assignee under Tenant
all subrents and other charges payable by such subtenant or assignees, Tenant hereby assigning
to City such subrents and other charges in the event that City declares a Tenant Default; and (G)
continue this Lease in effect and relet the Leased Premises on such terms and conditions as City
may deem advisable with Tenant remaining liable for the Rent plus the reasonable cost of
obtaining possession of the Leased Premises and of any repairs and alterations necessary to
prepare the Leased Premises for reletting, less the rent received from such reletting, if any.
19.02. Tenant’s Remedies. Tenant’s sole and exclusive remedy for an uncured City Default will
consist of and will be limited to a special action or other similar relief (whether characterized as
mandamus, injunction, specific performance, or otherwise), requiring City to undertake and to
fully and timely perform its obligations under this Lease, and Tenant waives any and all right to
recover actual, punitive, consequential, special, or any other type of damages whatsoever.
19.03. Remedies Not Exclusive. City’s remedies set forth in this Lease are cumulative and are
not intended to be exclusive of any other remedies or means of redress to which City may be
entitled to resort, either in law or in equity, in case of any Tenant Default, breach, or threatened
breach of any provision of this Lease.
19.04. Costs and Expenses of City. Tenant agrees to pay, as additional Rent, all attorney’s fees
and other costs and expenses incurred by City in enforcing any of Tenant’s obligations under this
Lease. Any amount due from Tenant to City under this Lease which is not paid when due will
bear interest at the highest rate allowed by Arizona law.
ARTICLE 20
SURRENDER OF LEASED PREMISES
20.01. Surrender of Leased Premises; Normal Wear and Tear. Upon expiration, Tenant Default,
or termination of this Lease by Tenant or City, Tenant’s right to occupy the Leased Premises and
exercise the privileges and rights granted under this Lease will cease, and Tenant must peaceably
surrender and leave the Leased Premises free of trash and debris, broom cleaned and in good
condition, except for normal wear and tear or as otherwise provided for in this Lease. Should
City so demand after expiration of this Lease or the noticed termination hereof, within thirty (30)
days after receiving written notice from City, Tenant must commence the removal of all trade
fixtures, equipment, and other personal property from the Leased Premises and must complete
said removal within thirty (30) days.
20.02. Voluntary Surrender. Tenant must, on the last day of the Term of this Lease, or upon any
termination of this Lease, truly surrender and deliver the Leased Premises along with any
fixtures (other than trade fixtures), Improvements, and permanent improvements into the
{00595336.1}
18
possession and use of City, without fraud or delay and in good order, condition and repair, free
and clear of all liens and encumbrances other than those existing on the Effective Date, if any,
without any payment or allowance whatsoever by City.
20.03. Trade Fixtures and Equipment. All trade fixtures, equipment, and other personal property
installed or placed by Tenant on the Leased Premises whether or not permanently affixed thereto
must be free of any lien for the payment of rent or for the performance of any other obligation of
Tenant under this Lease. All trade fixtures, equipment, and other personal property installed or
placed by Tenant in the Leased Premises that is not permanently affixed thereto will remain the
property of Tenant, and Tenant will have the right at any time during the Term of this Lease, to
remove the same from the Leased Premises, provided that Tenant must repair, at its sole cost,
any damage caused by such removal. Any property not removed by Tenant within thirty (30)
days after the expiration or termination of this Lease will become a part of the Leased Premises,
and ownership thereof will vest in City. Tenant will, however, remain financially liable to City
for the costs of repairs to the Leased Premises incurred as a result of City’s removal and/or
relocation of property formerly belonging to Tenant and not otherwise removed from the Leased
Premises as provided herein. Tenant must pay such costs, as additional Rent, within thirty (30)
days after the date of the invoice in which City bills Tenant for such costs.
ARTICLE 21
HOLDING OVER; INCREASED RENT
The Parties agree the temporary, short-term nature of this Lease, which has a Term of eighteen
(18) months (see Article 3), and the right of City to recover immediate possession of the Leased
Premises upon expiration of the Term, is an important and material matter affecting the Parties.
The Parties further agree that the length of the Term was specifically considered by the Parties in
relation to the total consideration paid by City for the purchase of the Property pursuant to the
Purchase Agreement. In the event of any continued occupancy or holding over of the Leased
Premises by Tenant without the express written consent of City beyond the end of the Term
(“Holdover”), whether in whole or in part, this Lease will be deemed a monthly tenancy
governed by the provisions of this Lease except that beginning on the first day of the Holdover
and on or before the first day of every month thereafter during the Holdover, Tenant covenants
and agrees to pay to City monthly Rent in the amount of the greater of: (A) ten thousand five
hundred dollars ($10,500.00); or (B) one hundred fifty percent (150%) of the then-current Fair
Market Rent for the Leased Premises. For purposes of this Lease, “Fair Market Rent” means
the commercially reasonable monthly rental rate for comparable commercial properties that are
similarly situated in location, size, age, and condition, as determined by City in its reasonable
discretion based upon market data available at the time of determination. In the event of a
Holdover, in addition to the Rent required by this section, Tenant must also pay all other fees and
payments due under this Lease, and all costs, expenses, damages, liabilities, and attorney’s fees
incurred by City as a result of the Holdover.
ARTICLE 22
CONDEMNATION
{00595336.1}
19
22.01. Entire or Partial Condemnation. If the whole or any part of the Leased Premises is taken
or condemned by any competent authority for any public use or purposes during the Term of this
Lease, this Lease will terminate with respect to the part of the Leased Premises so taken, and
Tenant reserves unto itself the right to claim and prosecute its claim in all appropriate courts and
agencies for any award or damages based upon loss, damage or injury to its leasehold interest (as
well as relocation and moving costs), without impairing any rights of City for the taking of or
injury to the City’s interests.
22.02. Continuation of Lease. In the event of a taking of less than all of the Leased Premises,
this Lease will continue in effect with respect to the portion of the Leased Premises not so taken;
the Rent will not be adjusted except if the taking materially affects Tenant’s use of the Leased
Premises and in such event the Rent will be equitably adjusted as agreed to by the Parties.
Provided, further, however, if the taking is so material that the remaining part of the Leased
Premises cannot feasibly be used or converted for use by Tenant for a business and professional
office, as defined in Mesa City Code, Title 11, Article 8, Chapter 86, Section 11-86-4, Tenant
may, at its option, terminate this Lease within ninety (90) days after such taking by serving upon
City at any time within said ninety (90) day period, a thirty (30) day written notice of Tenant’s
election to so terminate accompanied by a certificate of Tenant that the remaining part of the
Leased Premises cannot feasibly be used or converted for use by Tenant.
22.03. Temporary Taking. If the temporary use of the whole or any part of the Leased Premises
or the appurtenances thereto is taken, the Term will not be reduced or affected in any way. The
entire award of such taking (whether paid by way of damages, rent, or otherwise) will be payable
to Tenant, unless the period of occupation and use by the condemning authority extends beyond
the date of expiration of this Lease, in which event the award made for such taking will be
apportioned between City and Tenant of the date of such expiration.
22.04. Notice of Condemnation. In the event any action is filed to condemn the Leased Premises
or Tenant’s leasehold estate or any part thereof by any public or quasi-public authority under the
power of eminent domain, either City or Tenant must give prompt notice thereof to the other
Party. Each Party will have the right, at its own cost and expense, to represent its respective
interest in each proceeding, negotiation, or settlement with respect to any taking or threatened
taking and to make full proof of its claims. No agreement, settlement, conveyance, or transfer to
or with the condemning authority affecting Tenant’s leasehold interest may be made without the
consent of Tenant, which consent Tenant may not unreasonably withhold.
ARTICLE 23
GENERAL PROVISIONS
23.01. Notices. All notices to be given by either Party to the other, must be given in writing and
addressed to the Parties at the addresses below or at such other address as the Parties may
hereafter designate. Notices and payments to City, and notices to Tenant will be deemed properly
served when sent by certified or registered mail or hand delivered to the addresses stated below.
Any notice will be deemed to have been received three (3) days after the date of mailing, if given
by certified mail, or upon actual receipt if personally delivered.
{00595336.1}
20
To City:
City of Mesa
20 E. Main Street
P.O. Box 1466
Mesa, AZ 85211-1466
Attn: Real Estate Division
(480) 644-2577
PropertyManagement@mesaaz.gov
To Tenant:
1 WM, LLC
Attn:
23.02. Amendments. This Lease sets forth all the agreements and understandings of the Parties
and is not subject to modification except in writing, signed by the Parties.
23.03. Successors; Joint Liability. The covenants herein contained will, subject to the provisions
as to Transfers, apply to and bind the heirs, successors, executors, administrators, and assigns of
all the Parties hereto; and all of the Parties hereto will be jointly and severally liable hereunder.
23.04. Time of the Essence. Time is of the essence with respect to the obligations to be
performed under this Lease.
23.05. Independent Legal Relationship. Nothing contained in this Lease will create any
partnership, joint venture, or other arrangement between City and Tenant. Except as expressly
provided herein, no term or provision of this Lease is intended to or will be for the benefit of any
person not a party hereto, and no such other person will have any right or cause of action
hereunder.
23.06. Authority. The persons executing this Lease on behalf of or as a representative for Tenant
warrant that they are duly authorized to execute and deliver this Lease on behalf of Tenant and
that this Lease is binding upon Tenant in accordance with the terms and conditions herein.
23.07. Governing Law. Any dispute with respect to this Lease and the rights and duties created
by this Lease will be governed by the laws of the State of Arizona and litigated in a court of
competent jurisdiction in Maricopa County, Arizona. The Parties will not raise, and hereby
waive, any defenses based on venue, inconvenience of forum, or lack of personal jurisdiction in
any action or suit brought in accordance with this Lease. The Parties acknowledge that they have
read and understand this clause and agree voluntarily to its terms.
23.08. Termination under A.R.S. § 38-511. This Lease is subject to termination under A.R.S. §
38 511.
23.09. Binding Agreement. This Lease is the only agreement between the Parties hereto
pertaining to the Leased Premises. It is understood that there are no oral agreements between the
Parties affecting this Lease, and this Lease supersedes and cancels any and all previous
{00595336.1}
21
negotiations, arrangements, agreements, and understandings, if any, between the Parties with
respect to the subject matter hereof, and none may be used to interpret or construe this Lease.
23.10. Survivability. All warranties, representations, indemnification, duty to defend, and hold
harmless provisions of this Lease will survive the expiration or any termination of this Lease.
Additionally, all remediation and restoration requirements of this Lease, as well as any other
article or section which reasonably should survive, will survive the expiration or any termination
of this Lease.
23.11. E-Verify Requirement. To the extent applicable under A.R.S. § 41-4401 and A.R.S. § 23-
214, Tenant represents and warrants compliance with all federal immigration laws and
regulations that relate to their employees and their compliance with the E-verify requirements of
A.R.S. § 23-214(A). A breach of Tenant’s warranty under this section will be deemed a breach
of this Lease and may result in the termination of this Lease by City; however, Tenant will not be
deemed to have materially breached this warranty if it establishes that it has complied with the
employment verification provisions prescribed by sections 274A and 274B of the Federal
Immigration and Nationality Act and the E-Verify requirements prescribed by A.R.S. § 23-
214(A). Pursuant to A.R.S.§§ 41-4401 and 23-214, City retains the legal right to randomly
inspect the papers and records of any employee who works under this Lease or on the Leased
Premises to ensure compliance with the above-mentioned laws.
23.12 Litigation. Tenant must notify City within ten (10) days after the commencement of any
action, suit, proceeding, or arbitration against Tenant, or any material development in any action,
suit, proceeding, or arbitration against Tenant, in either case if such action, suit, proceeding, or
arbitration would materially and adversely affect the Leased Premises, the validity of this Lease,
or the performance of Tenant’s obligations under this Lease.
23.13. Memorandum of Lease. In conjunction with the execution of this Lease, the Parties agree
that they will execute a Memorandum of Lease in compliance with A.R.S. § 42-6202 in
substantially the same form as Exhibit B. City will record the Memorandum of Lease in the
office of the Maricopa County Recorder within thirty (30) days of the Effective Date.
23.14. Governmental Capacity. Any approvals Tenant is required to obtain from City under this
Lease are in addition to and separate from approvals Tenant must obtain from the City of Mesa
in its governmental capacity, including applicable approvals required under the City of Mesa
Building Code or Zoning Ordinance. Notwithstanding anything in this Lease to the contrary, this
Lease does not affect the City of Mesa in its governmental capacity.
23.15. No Personal Liability of Officials of City or Tenant. None of the covenants, stipulations,
promises, agreements, or obligations of City or Tenant contained herein will be deemed to be
covenants, stipulations, promises, agreements, or obligations of any official, officer, agent, or
employee of City or Tenant in their individual capacity, and no recourse will be had for the
payment for any claim based thereon or any claim hereunder against any official, officer, agent,
or employee of City or Tenant.
{00595336.1}
22
23.16. Severability. If any provision of this Lease is declared void or unenforceable (or is
construed as requiring City to do any act in violation of any applicable law, including any
constitutional provision, law, regulation, City Code or City Charter), such provision will be
deemed severed from this Lease and this Lease will otherwise remain in full force and effect;
provided that this Lease will retroactively be deemed reformed to the extent reasonably possible
in such a manner so that the reformed Lease (and any related agreements effective as of the same
date) provide essentially the same rights and benefits to the Parties as if such severance and
reformation were not required. Unless prohibited by any applicable law, the Parties further will
perform all acts and execute, acknowledge, and deliver all amendments, instruments, and
consents necessary to accomplish and give effect to the purposes of this Lease, as reformed.
23.17. Drug Free Work Place. Tenant must require a drug-free workplace for all employees
working at the Leased Premises. Specifically, all Tenant employees and all subtenant employees
who are working at the Leased Premises or under this Lease must be notified in writing by
Tenant or subtenant that they are prohibited from the manufacture, distribution, dispensation,
possession, or unlawful use of a controlled substance in the workplace. Tenant agrees to prohibit
the use of intoxicating substances by all employees and will ensure that employees do not use or
possess illegal drugs while in the course of performing their duties on the Leased Premises.
23.18. Estoppel Certificates. City and Lessee may from time to time and at any time request
from the other Party a certificate evidencing whether or not: (A) this Lease is in full force and
effect along with the amount and current status of the Rent and other fees and payments due
under this Lease; (B) this Lease has been modified or amended in any respect or describing such
modifications or amendments, if any; and (C) there are any existing defaults under this Lease, to
the knowledge of the Party executing the certificate, and specifying the nature of such defaults, if
any. Such certificate must be returned to the requesting Party not later than twenty (20) days
following receipt of the request, and in no event will the certificate require that City subordinate
its interest in the Leased Premises to any party.
23.19. Incorporation of Exhibits and Attachments by Reference. All Exhibits and Attachments
to this Lease are fully incorporated as though set forth in the body of this Lease.
23.20. Construction. The terms and provisions of this Lease will be interpreted and construed in
accordance with their usual and customary meanings. The term “including” means “including
without limitation” or “including but not limited to.” The Parties each waive the application of
any rule of law which would otherwise be applicable in connection with the interpretation and
construction of this Lease that ambiguous or conflicting terms or provisions contained in this
Lease will be interpreted or construed against the Party who prepared or whose attorney prepared
the executed Lease or any earlier draft of the same.
23.21. Counterparts. This lease may be executed in any number of counterparts, each of which
will be deemed an original, and all of which together will be a single instrument.
The balance of this page is blank; signatures are on the following two (2) pages.
{00595336.1}
23
In witness whereof, the Parties have executed this Lease to be effective as of the Effective Date.
CITY:
CITY OF MESA, ARIZONA,
an Arizona municipal corporation
By:__________________________________
Name: _______________________________
Its:__________________________________
{00595336.1}
24
TENANT:
1 WM, LLC,
an Arizona limited liability company
By:__________________________________
Name: _______________________________
Its:__________________________________
{00595336.1}
EXHIBIT A TO LEASE
LEGAL DESCRIPTION OF LEASED PREMISES
[See attached]
{00595336.1}
EXHIBIT B TO LEASE
FORM OF MEMORANDUM OF LEASE
[See attached]