SAMPLE LEASE AGREEMENT
DR. RAJESH K. KAKAR
2108 EAST THOMAS ROAD
PHOENIX, AZ 85016-7758
2108 E. THOMAS ROAD,_________________
PHOENIX, AZ 85016
This Lease Contract (this "lease") is entered into by and between Dr. Rajesh K. Kakar (hereinafter called "Landlord"), and ______________________________________________________________, (hereinafter called "Tenant").
Section 1.1 Landlord's Demise. Approximately _________ square feet of rentable area on the _________ floor (the "Rentable Area") in the building located at 2108 East Thomas Road, Phoenix, Arizona 85016, (the "Building"), as more particularly identified on Exhibit "A" attached hereto and incorporated herein by reference.
Section 1.2 Rentable Area Contained in Leased Premises. The term "Rental Area" shall refer to __________________________________________________________________________________ excluding only the areas ("Service Areas") used for Building stairs, fire towers, elevator shafts, flues, vents, stacks, pipe shafts, and vertical ducts, but including any Service Areas which are for the specific use of the tenant and all common areas (to be ). No deductions from Rental Area shall be made for columns or projections necessary to the Building. (See Exhibit A, Floor Plan of Leased Premises). This Rental Area is known as Suite ___________.
Section 2.1 Commencement Date. The term of this Lease shall commence on _______________ (the "Commencement Date"), and shall terminate on ________________, unless terminated or extended to a later date under any other term or provision hereof.
Section 2.2 Revised Commencement Date. If for any reason the Leased Premises are not ready for occupancy by Tenant on the Commencement Date, Landlord shall not be liable or responsible for any claims, damages, or liabilities in connection therewith or by any reason thereof, and the term of this Lease and the obligations of Tenant shall commence on a revised commencement date which shall be the date that the Leased Premises are deemed ready for occupancy by the tenant.
Section 2.3 Termination of Lease. Upon the termination of this lease, Tenant has the option to renew the lease with the same terms and conditions stated herein, without changes except as stated below, for ________ consecutive one year periods. ecuted. Changes to the current lease will be:
Section 3.1 Amount of Payment. Tenant agrees to Pay to Landlord, without any setoff or deduction whatsoever, a base annual rental (the "Base Rental") plus applicable rental tax in lawful money of the United States, the sum of___________________________________________________________Dollars ($____________) per year during the term hereof. Tenant shall also pay, as additional rent, all such other sums of money as shall become due and payable by Tenant to Landlord under this Lease. Base Rental, any adjustment thereto pursuant to Section 4 hereof, and all such other sums of money due and Payable by Tenant to Landlord pursuant to this Lease, are sometimes hereinafter collectively called "rent", for the nonpayment of which Landlord shall be entitled to exercise all such rights and remedies as are herein provided in Section 18. The annual Base Rental, together with any adjustment thereto pursuant to Section 4 hereof, shall be due and payable in advance, without demand, in twelve (12) equal installments on the first day of each calendar month during the term of this Lease and during any extensions or renewals thereof. Tenant hereby agrees to pay such Base Rental, together with any adjustments thereto, to Landlord at Landlord's address for notice as stated in Section 21 hereof (or such other address as may be designated by Landlord in writing from time to time). If the term of this Lease commenced on a day other than the first day of the month or terminates on a day other than the last day of the month, then the installments of Base Rental, and any adjustments thereto, for such month or months shall be prorated, based on thirty days (30) per month, and the installment or installments so prorated shall be paid in advance.
Section 3.2 Past Due Rents. All past due installments of rents shall bear interest at the maximum lawful rate until paid plus a $50 late charge to pay for extra collection and accounting effort.
Section 3.3 Security Deposits. Upon the execution of this Lease, Tenant agrees to pay Landlord the sum of _____________________________________________________ U.S. Dollars ($___________) of which shall constitute a security deposit (the "Security Deposit") to be held by Landlord without interest as security for the performance by Tenant of Tenant's covenants and obligations under this Lease, it being expressly understood that such deposit is not advance payment of rental or a measure of Landlord's damages in case of default by Tenant. If Tenant is not then in default, such deposit shall be returned by Landlord to Tenant upon the termination of this Lease.
BASE RENTAL ADJUSTMENT
Section 4.1 Share of Basic Costs. Tenant's Base Rental includes a component allocable to Basic Costs (as hereinafter defined) which Landlord pays throughout the term of this Lease. This component is calculated using the first year of occupancy under this lease as the base year. This amount will be reviewed at the end of each year. Landlord has the option to charge the Tenant for any increases after the base year in addidtion to rent.
Section 4.2 Definition of Basic Costs. "Basic Costs" shall consist of the operating expenses of the Building. The term "operating expenses" as used herein shall mean all expenses, costs, and disbursements of every kind and nature which Landlord shall pay or become obligated to pay because of, or in connection with, the ownership and operation of the Building, including but not limited to,
The following items are specifically excluded from the definition of Basic Costs as herein defined: Capital improvements that are not primarily for the purpose of reducing operating expenses or are not required by city or state laws; interest; penalties; fines; commissions; costs of services or labor not provided on a regular basis to all tenants of the Building; wages, salaries, or fees paid to
administrative or executive personnel of Landlord not involved in the direct management of the Building; and general or special assessments levied against the owner of the Building for public improvements which are not currently due.
Tenant shall use the Leased Premises solely for the purpose of ________________________________ _________________________________and for no other purpose without the prior written consent of Landlord. Business hours for this purpose shall be from ________ AM to ________ PM, _______________ through _______________.
SERVICES PROVIDED BY LANDLORD
Section 6.1 List of Services. Subject to the rules and regulations hereinafter referred to, Landlord shall furnish Tenant, at Landlord's expense, the following services during the Lease term:
Section 6.2 Service Interruptions. No interruption or malfunction of any of such services shall constitute an eviction or disturbance of Tenant's use and possession of the Leased Premises or Building or a breach by Landlord of any of its obligations hereunder or render Landlord liable for damages or entitle Tenant to be relieved from any of its obligations hereunder (including the obligation to pay rent) or grant Tenant any right of setoff or recoupment. In the event of any such interruption, however, Landlord shall use reasonable diligence during normal business hours to restore such service in any circumstances in which such restoration is within the reasonable control of Landlord and the interruption was not caused by Tenant's fault.
Section 6.3 Additional Services. Should Tenant desire any additional services beyond those described in Section 6.1 or rendition of any of such services outside the normal times for providing such service, Landlord may (at Landlord's option), upon reasonable advance notice from Tenant to Landlord, furnish such services and Tenant agrees to pay Landlord such charges as may be agreed on between Landlord and Tenant, but in no event at a charge less than Landlord's actual cost plus overhead for the additional services provided, it being agreed that the costs to Landlord, of such additional services shall be excluded from the "Basic Costs", as defined in Section 4.2 of this Lease.
Tenant shall provide and install, at Tenant's cost, all letters and numerals on doors in the Leased Premises; all such letters and numerals must be approved by Landlord prior to installation. A visual intent of all signage must be presented to Landlord and an approval signature must be granted prior to final placement. Signage will not be permitted in the Leased Premises without the prior written consent of Landlord. Exterior signage must meet city approval and Landlords approval. Any electrical usage will be an additional charge to Tenant.
REPAIR AND MAINTENANCE
Section 8.1 Landlord's Obligations. Landlord shall, at its own cost and expense, except as may be provided elsewhere herein, make necessary repairs of damage to the Building corridors, lobbies, structural members of the Building, and equipment used to provide the services referred to in Section 6.1, unless any such damage is caused by acts or omissions of Tenant, its agents, customers, employees, or
invitees, in which event Tenant shall bear the cost of such repairs. Tenant shall promptly give Landlord written notice of any damage in the Leased Premises requiring repair by Landlord, as aforesaid.
Section 8.2 Tenant's Obligations. Tenant shall not injure the Leased Premises or the Building but shall maintain the Leased Premises in a clean, attractive condition and in good repair, except as to damage to be repaired by Landlord, as provided above. Any Visual Merchandising fixtures must be professional in appearance and create an atmosphere that must meet Landlords standards. Store layouts and fixtures must be approved by Landlord prior to move in date or subsequent installation. Cluttered areas will not be acceptable. Upon termination of this Lease, Tenant shall surrender and deliver up the Leased Premises to Landlord in the same condition in which such existed at the commencement of the Lease, excepting only ordinary wear and tear and damage arising from any cause not required to be repaired by Tenant. Any moveable Tenant Improvements paid for by the Tenant may be taken from the leased premises by the Tenant. Any Tenant Improvements made that are still in the premises two weeks after the lease termination date will become ownership of Landlord.
Section 8.3 Insured Fire or Casualty Damage. This Section 8.1 and 8.2 shall not apply in the case of damage or destruction by fire or other casualty which is covered by insurance maintained by Landlord on the Building (as to which Section 9 hereof shall apply), or damage resulting from an eminent domain taking (as to which Section 15 shall apply).
FIRE OR OTHER CASUALTY
Section 9.1 Landlord's Election. If at any time during the Lease term the Leased Premises or any portion of the Building shall be damaged or destroyed by fire or other casualty, then Landlord shall have the election to terminate this Lease or to repair and reconstruct the Leased Premises and Building to the condition in which they existed immediately prior to such damage or destruction.
Section 9.2 Rental Abatement. In any of the aforesaid circumstances, rental shall abate proportionately during the period and to the extent that the Leased Premises are unfit for use by Tenant in the ordinary conduct of its business. If Landlord has elected to repair and restore the Leased Premises, this Lease shall continue in full force and effect and such repairs shall be made within a reasonable time thereafter, subject to delays arising from shortages of labor or material, acts of God, war, or other conditions beyond Landlord's reasonable control. In the event that this Lease is terminated as herein permitted, Landlord shall refund to Tenant the prepaid rent (unaccrued as of the date of damage or destruction), less any sum then owing Landlord by Tenant. If Landlord has elected to repair and reconstruct the Leased Premises, then the Lease term shall be extended by a period of time equal to the period of such repair and reconstruction.
Section 9.3 Insurance. Tenant, at its own expense, shall keep in effect a policy of combined bodily injury and property damage liability insurance on the leased premises and provide Landlord with the "Certificate of Insurance". Such insurance shall name Landlord as an additonal insured and shall be in an amount not less than One Million Dollars ($1,000,000).
COMPLIANCE WITH LAWS AND REGULATIONS
Section 10.1 Compliance with Laws. Tenant, at its own expense, shall comply with all federal, state, municipal, and other laws, ordinances, rules, and regulations applicable to the Leased Premises and the business conducted therein by Tenant (for example, a Resellers License and Business License for Phoenix, Arizona). Tenant shall not engage in any activity which would cause Landlord's fire and extended coverage insurance to be cancelled or the rate therefore to be increased (or, at Landlord's option, shall pay any such increase). Tenant shall not commit any act which is a nuisance or annoyance to Landlord or to other tenants, or which might, in the exclusive judgment of Landlord, appreciably damage Landlord's goodwill or reputation, or tend to injure or depreciate the Building. Tenant shall not commit or permit waste in the Leased Premises or Building. Tenant shall not paint, erect, or display any sign, advertisement, placard, or lettering which is visible to the corridors or lobby of the Building or from the exterior of the Building without Landlord's prior approval.
Section 10.2 Building Rules. Tenant covenants and agrees with the rules of the Building (the "Building Rules") adopted by Landlord, and attached as Exhibit C as hereafter modified by Landlord, from time to time, for the safety, care, and cleanliness of the Leased Premises and the Building and for preservation of good order therein. All changes to the Building Rules shall be sent by Landlord in writing to Tenant and shall be thereafter carried out and observed by Tenant.
LIABILITY AND INDEMNITY
Section 11.1 Tenant's Indemnification. Tenant agrees to indemnify and hold Landlord harmless from all claims (including costs and expenses of defending against such claims) arising or alleged to arise from any act or omission of Tenant or Tenant's agents, employees, or contractors, or arising from any injury to any person or damage to the property of any person occurring during the term of this Lease in the Leased Premises. Tenant agrees to use and occupy the Leased Premises and other facilities of the Building at its own risk and hereby releases Landlord, its agents, or employees, from all claims for any damage or injury to the full extent permitted by law. Landlord and Landlord's agents and employees shall not be liable to Tenant for any injury to person or damage to property sustained by Tenant or any person claiming through Tenant resulting from any accident or occurrence in the Leased Premises, including, but not limited to, consequential damage caused by the Leased Premises or other portions of the Building becoming out of repair or by defect in or failure of equipment, pipes, or wiring, or by broken glass, or the backing up of drains, or by gas, water, steam, electricity or oil leaking, escaping or flowing into the Leased Premises (except where due to Landlord's willful failure to make repairs required to be made hereunder, after the expiration of a reasonable time after written notice to Landlord of the need for such repairs).
Section 11.2 Waiver of Subrogation. No party shall have any right or claim against Landlord, its agents, or employees for property damage (whether caused by negligence or the condition of the Leased Premises or the Building) by way of subrogation or assignment, Tenant hereby waiving and relinquishing any such right.
Section 11.3 Release of Liability. Tenant agrees that Landlord shall not be responsible or liable to Tenant, its employees, agents, customers, or invitees for bodily injury (fatal or nonfatal) or property damage occasioned by the acts or omissions of any other tenant or such tenant's employees, agents, contractors, customers, or invitees within the Building.
Section 11.4 No Personal Liability. Neither the shareholders, directors, trustees, officers, or partners of any of the foregoing (collectively, the "Parties") shall be liable for the performance of Landlord's obligations under this Lease. Tenant shall look solely to Landlord to enforce Landlord's obligations hereunder and shall not seek any damages against any of the Parties. The liability of Landlord for Landlord's obligations under this Lease shall not exceed and shall be limited to the value of Landlord's interest in the Building and the land of which the Building is situated and Tenant shall not look to the Property of assets of any of the parties in seeking either to enforce Landlord's obligations under this Lease or to satisfy a judgment for Landlord's failure to perform such obligations.
ADDITIONS AND FIXTURES
Section 12.1 Consent of Landlord. Tenant shall make no alteration, change, improvement, repair, replacement, or addition to the Leased Premises without the prior written consent of Landlord. If such prior written consent of Landlord is granted, the work shall be:
In any instance where Landlord grants such consent, Landlord may grant such consent contingent and conditioned upon Tenant's contractors, laborers, materialmen, and others furnishing labor or mechanics, or, labor utilized by any other Tenant or such other Tenant's work shall cause disharmony or interference, the consent granted by Landlord to Tenant may be withdrawn upon forty-eight (48) hours written notice to Tenant.
Section 12.2 Mechanic's Lien. Tenant shall not permit any mechanic's lien or liens to be placed upon the Leased Premises. the improvements thereon, or the Building during the term hereof caused by or resulting from any work performed, materials furnished, or obligation incurred by or at the request of Tenant, and nothing in this Lease shall be deemed or construed in any way as constituting the consent or request of Landlord, express or implied, by inference or otherwise, to any contractor, subcontractor, laborer, or materialmen for the performance of any labor or the furnishing of any materials for any specific improvement, alteration, or repair of or to the Leased Premises, or any part thereof, nor as giving Tenant any right, power, or authority to contract for or permit the rendering of any services or the furnishing of any materials that would give rise to the filing of any mechanic's or other liens against the interest of Landlord in the Leased Premises. In the case of the filing of any lien against the interest of Landlord or Tenant in the Leased Premises, Tenant shall cause the same to be discharged of record within ten (10) days after filing of same or shall proceed with diligent efforts to correct same. If Tenant shall fail to discharge such mechanic's lien within such period then, in addition to any other right or remedy of Landlord, Landlord may, but shall not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit in court or bonding. Any amount paid by Landlord, with interest thereon at the maximum rate per annum from the date of payment, shall be paid by Tenant to Landlord on demand.
Section 12.3 Removal of Trade Fixtures. Tenant may remove its trade fixtures, office supplies, and movable office furniture and equipment not attached to the Building provided: (1) such removal is made prior to the termination of the term of this Lease; (2) Tenant is not in default of any obligation or covenant under this Lease at the time of such removal; and (3) Tenant promptly repairs all damage
caused by such removal. All other property at the Leased Premises and any alteration or addition to the Leased Premises (including wall-to-wall carpeting, paneling, or other wall covering) and any other article attached or affixed to the floor, wall, or ceiling of the Leased Premises shall become the property of Landlord and shall remain upon and be surrendered with the Leased Premises as part
thereof at the termination of this Lease, Tenant hereby waiving all rights to any payment or compensation therefore. If, however, Landlord so requests in writing, Tenant shall, prior to termination of this Lease, remove any and all alterations, additions, fixtures, equipment and property placed or installed by it in the Leased Premises and shall repair any damage caused by such removal.
ASSIGNMENT AND SUBLETTING
Section 13.1 Landlord's Consent. Neither Tenant nor Tenant's legal representatives or successors in interest by operation of law or otherwise shall assign this Lease or sublease the Leased Premises or any part thereof or mortgage, pledge, or hypothecate its leasehold interest or grant any concession or license within the prior express written permission of Landlord shall be void and of no effect. In the event Tenant requests Landlord's permission as to any such assignment, sublease, or other transaction, Landlord shall have the right and option, as of the requested effective date of such assignment, sublease, or other transaction (but no obligation), to cancel and terminate this Lease effective upon fifteen (15) days notice to Tenant given by Landlord at any time thereafter either as to the entire Leased Premises or as to only the portion thereof which Tenant shall have attempted to assign or sublease or otherwise permit some other party's occupancy without Landlord's prior express written permission. If Landlord elects to cancel and terminate this Lease as to the aforesaid portion of the Leased Premises, then the rent and other charges payable hereunder shall thereafter be proportionately reduced. This prohibition against assigning or subletting shall be construed to include a prohibition against any assignment or subletting by operation of law.
Section 13.2 Special Conditions. Notwithstanding that the prior express written permission of Landlord to any of the aforesaid transactions may have been obtained, the following shall apply:
Section 13.3 Organizational Change. If Tenant is a corporation, then any transfer of this Lease from Tenant by merger, consolidation, or dissolution or any change in ownership or power to vote a majority of the voting stock in Tenant outstanding at the time of execution of this instrument shall constitute an assignment for the purpose of this Lease; provided, however, that acquisition of all
stock of a corporate tenant by any corporation, the stock of which is registered pursuant to the Securities Act of 1933 or the merger of a corporate tenant into such a corporation, the stock of which is so registered shall not itself be deemed to be a violation of Section 13.1 hereof. For purposes of this Section 13.1, the term "voting stock" shall refer to shares of stock regularly entitled to vote for the election or directors of the corporation involved. If Tenant is a general partnership having one or more corporations as partners, or if Tenant is a limited partnership having one or more corporations as general partners, the provisions of the preceding paragraph shall apply to each of such corporations as if such corporation alone had been the Tenant hereunder. If Tenant is a general partnership (whether or not having any corporation as partners), or if Tenant is a limited partnership (whether or not having any corporations as general partners), the transfer of the partnership interest or interests constituting a majority shall constitute an assignment for the purposes of this Lease.
Section 13.4 Subsequent Transactions. Consent by Landlord to a particular assignment or sublease or other transaction shall not be deemed a consent to any other or subsequent transaction.
Section 13.5 Collection of Rent. If this Lease is assigned or if the Leased Premises are subleased (whether in whole or in part) or in the event of the mortgage, pledge, or hypothecation of the leasehold interest or grant of any concession or license within the Leased Premises without the prior express written permission of Landlord, or if the Leased Premises are occupied in whole or in part by anyone other than Tenant without the prior express written permission of Landlord, Landlord may nevertheless collect rent from the assignee, sublessee, mortgagee, pledgee, party to whom the leasehold interest was hypothecated, concessionee, or licensee or other occupant and apply the net amount collected to the rent payable hereunder, but no such transaction or collection of rent, or application thereof by Landlord shall be deemed a waiver of these provisions or a release of Tenant from the further performance by Tenant of its covenants, duties, and obligations hereunder.
Section 13.6 Transfers by Landlord. Landlord shall have the right to transfer and assign to a third party, in whole or in part, all its right and obligations hereunder and in the Building and property referred to herein, provided such third party assumes Landlord's obligations under lease agreements covering the Building and in such event and upon such transfer, Landlord shall be released from any further obligations hereunder attributable to periods of time from and after the date of transfer, and Tenant agrees to look solely to such successor in interest of Landlord for the performance or such obligations. Landlord agrees to make any such transfer or assignment permitted by this section subject to the terms of the Lease created herein.
Tenant accepts this Lease subject and subordinate to any mortgage, deed of trust, or other lien presently existing or hereafter placed upon the Leased Premises, and to any renewals and extensions thereof; but Tenant agrees that any such mortgagee and/or beneficiary of any deed of trust or other lien ("Landlord's Mortgagee") and/or Landlord shall have the right at any time to subordinate such
mortgage, deed of trust, or other lien to this Lease on such terms and subject to such conditions as such Landlord's Mortgagee may deem appropriate in is discretion. Upon demand, Tenant agrees to execute such further instruments subordinating this Lease, as Landlord may request, and such nondisturbance and attornment agreements, as any such Landlord's Mortgagee shall request. In a form satisfactory to Landlord's Mortgagee. In the event that Tenant shall fail to execute any such instrument promptly as requested, Tenant hereby irrevocably constitutes Landlord as its attorney-in-fact to execute such instrument in Tenant's name, place, and stead, it being stipulated by Landlord and Tenant that such agency is coupled with an interest in Landlord and is, accordingly, irrevocable.
If there shall be taken by exercise of the power of eminent domain during the term of this Lease any part of the Leased Premises or Building, Landlord may elect to terminate this Lease or to continue same in effect. If Landlord elects to continue the Lease, the rental shall be reduced in proportion to the area of the Leased Premises so taken and Landlord shall repair any damage to the Leased Premises or Building resulting from such taking. All sums awarded or agreed upon between Landlord and the condemning authority for the taking of the interest of Landlord or Tenant, whether as damages or as compensation, will be the property of Landlord without prejudice, however, to claims of Tenant against the condemning authority on account of the unamortized cost of leasehold improvements paid for by Tenant taken by the condemning authority. If this Lease should be terminated under any provision of this Section 15, rental shall be payable up to the date that possession is taken by the taking authority, and Landlord shall refund to Tenant any prepaid unaccrued rent less any sum then owing by Tenant to Landlord.
ACCESS BY LANDLORD
Landlord, its agents, and employees shall have access to and the right to enter upon the Leased Premises at any reasonable time, to examine the condition thereof, to make any repairs or alterations required to be made by Landlord hereunder, to show the Leased Premises to prospective Purchasers or tenants, and for any other purpose deemed reasonable by Landlord, but only in the presence of the Tenant.
To secure the payment of all rent due and to become due hereunder and the faithful performance of all the other covenants of this Lease required by Tenant to be performed, Tenant hereby gives to Landlord and express contract lien on and security interest in all property, chattels, or merchandise which may be placed in the Leased Premises and also upon all proceeds of any insurance which may accrue to Tenant by reason of damage to or destruction of any such property. All exemption laws are hereby waived by Tenant. This lien and security interest are given in addition to the Landlord's statutory lien(s) and shall be cumulative thereto. Upon request of Landlord, Tenant agrees to execute Uniform Commercial Code financing statements relating to the aforesaid security interest. The parties agree that a copy of this Lease, fully executed by Landlord and Tenant, may be filed as a financing statement with the Secretary of State of the State of Arizona.
Section 18.1 Events of Default. Each of the following acts or omissions of Tenant or occurrences shall constitute an "Event of Default":
Section 18.2 Remedies. This Lease and the term and estate hereby granted and the demise hereby made are subject to the limitation that if and whenever any Event of Default shall occur, Landlord may, at its option, in addition to all other rights and remedies given hereunder or by law or equity, do any one or more of the following:
Section 18.3 No Acceptance of Surrender. Exercise by Landlord of any one or more remedies hereunder granted or otherwise available shall not be deemed to be an acceptance of surrender of the Leased Premises by Tenant, whether by agreement or by operation of law, it being understood that such surrender can be effected only by the written agreement of Landlord and Tenant. No such alterations of security devices and no removal or other exercise of dominion by Landlord over the property of Tenant or others at the Leased Premises shall be deemed unauthorized or constitute a conversion, Tenant hereby consenting, after any Event of Default, to the aforesaid exercise of dominion over Tenant's Property within the Building. All claims for damages by reason of such re-entry and/or repossession and/or alteration of locks or other security devices are hereby waived, as are all claims for damages by reason of any distress warrant, forcible detainer proceedings, sequestration proceedings, as Landlord may elect, and Landlord shall not be liable in trespass or otherwise.
Section 18.4 Damages Upon Termination. In the event Landlord elects to terminate the Lease by reason of an Event of Default, then, notwithstanding such termination, Tenant shall be liable for and shall pay to Landlord, at the address specified in Section 21 for notice to Landlord, the sum of all rent and other indebtedness accrued to the date of such termination, plus as damages, an amount equal to the then present value of the rent reserved hereunder for the remaining portion of the Lease term (had such term not been terminated by Landlord prior to the date of expiration stated in Section 2.1), less the then present value of the fair rental value of the Leased Premises for such period. The undersigned parties hereby stipulate that such fair rental value shall in no event be deemed to exceed sixty percent (60%) of the then present value of the rent reserved for such period. In the event Landlord elects to terminate the Lease by reason of an Event of Default, in lieu of exercising the rights of Landlord
under the preceding paragraph, Landlord may instead hold Tenant liable for all rent and other indebtedness accrued to the date of such termination, plus such rent and other indebtedness as would otherwise have been required to be paid by Tenant to Landlord during the period following termination of the Lease term measured from the date of such termination by Landlord until the date of expiration stated in Section 2.1 (had Landlord not elected to terminate the Lease on account of such Event of Default) diminished by any net sums thereafter received by Landlord through reletting the Leased Premises during said period (after deducting expenses incurred by Landlord as provided in Section 18.6 hereof). Actions to collect amounts due by Tenant provided for in this paragraph of this Section 18.4 may be brought from time to time by Landlord during the aforesaid period, on one or more occasions, without the necessity of Landlord's waiting until expiration of such period; and in no event shall Tenant be entitled to any excess of rent (or rent plus other sums) obtained by reletting over and above the rent provided for in this Lease.
Section 18.5 Damages Upon Repossession Without Termination. In the event Landlord elects to repossess the Leased Premises without terminating the Lease, then Tenant shall be liable for and shall Pay to Landlord at the address specified in Section 21 for notice to Landlord, all rent and other indebtedness accrued to the date of such repossession, plus rent required to be paid by Tenant to Landlord during the remainder of the Lease term until the date of expiration of the term as stated in Section 2.1, diminished by any net sums thereafter received by Landlord through reletting the Leased Premises during said period (after deducting expenses incurred by Landlord as provided in Section 18.6). In no event shall Tenant be entitled to any excess of any rent obtained by reletting over and above the rent herein reserved. Actions to collect amounts due by Tenant as provided in this Section 18.5 may be brought from time to time, on one or more occasions, without the necessity of Landlord's waiting until expiration of the Lease term.
Section 18.6 Landlord's Expenses. In case of an Event of Default, Tenant shall also be liable for and shall pay to Landlord, at the address specified in Section 21 for notice to Landlord, in addition to any other sum provided to be paid: broker's fees incurred or other occupant's property; the cost of repairing, altering, remodeling or otherwise putting the Leased Premises into condition acceptable to a new tenant or tenants; and all reasonable expenses incurred by Landlord in enforcing Landlord's remedies, including reasonable attorneys' fees (which shall be not less that 10% of all sums then owing by Tenant to Landlord).
Section 18.7 Option To Relet. In the event of termination or repossession of the Leased Premises for an Event of Default, Landlord shall not have any obligation to relet or attempt to relet the Leased Premises, or any portion thereof, or to collect rental after reletting, but Landlord shall have the option to relet or attempt to relet. In the event of reletting, Landlord may relet the whole or any portion of the Leased Premises for any period, to any tenant, and for any use and purpose.
Section 18.8 Landlord's Remedial Action. If Tenant should fail to make any payment or cure any default hereunder within the time herein permitted, Landlord, without being under any obligation to do so and without thereby waiving such default, may make such payment and/or remedy such other default for the account of Tenant (and enter the Leased Premises for such purpose), and thereupon Tenant shall be obligated to, and hereby agrees to pay Landlord, upon demand, all costs, expenses, and disbursements (including reasonable attorneys' fees) incurred by Landlord in taking such remedial action.
Section 18.9 Landlord's Default. In the event of any default by Landlord, Tenant's exclusive remedy shall be an action for damages (Tenant hereby waiving the benefit of any laws granting it a lien upon the property of Landlord and/or upon rent due Landlord). Prior to any such action, Tenant shall give Landlord written notice specifying such default with particularity, and Landlord shall thereupon have thirty (30) days (plus such additional reasonable period as may be required in the exercise by Landlord of due diligence) in which to cure any such default. Unless and until Landlord fails to so cure any default after such notice, Tenant shall not have any remedy or cause of action by reason thereof. All obligations of Landlord hereunder shall be construed as covenants, not conditions, and all such obligations shall be binding upon Landlord only during the period of its possession of the Building and not thereafter.
Neither acceptance of rent by Landlord nor failure by Landlord to complain of any action, nonaction, or default of Tenant shall constitute a waiver of any of Landlord's rights hereunder. Waiver by Landlord of any right for any default of Tenant shall not constitute a waiver of any right for either a subsequent default of the same obligation or any other default. Receipt by Landlord of
Tenant's keys to the Leased Premises shall not constitute an acceptance of surrender of the Leased Premises.
If Tenant should remain in possession of the Leased Premises after the expiration of the final term of this Lease, without the execution by Landlord and Tenant of a new lease, then Tenant shall be deemed to be occupying the Leased Premises as a tenant-at-sufferance, subject to all the covenants and obligations of this Lease and at a daily rental of twice the per day rental provided hereunder, computed on the basis of a thirty (30) day month with the exception of the terms outlined in Section 2.3. If any property not belonging to Landlord remains at the Leased Premises after the expiration of the term of this Lease, Tenant hereby authorizes Landlord to make such disposition of such property as Landlord may desire without liability for compensation or damages to Tenant in the event that such property is the property of someone other than Tenant, Tenant agrees to indemnify and hold Landlord harmless from all suits, actions, liability, loss, damages, and expenses in connection with or incident to any removal, exercise of dominion over, and/or disposition of such property by Landlord.
Any notice which may or shall be given under the terms of this Lease shall be in writing and shall be either delivered by hand or sent by United States Registered or Certified Mail, postage prepaid, at the addresses specified below. Such addresses may be changed from time to time by either party by giving notice as provided herein. Notice shall be deemed given when delivered (if delivered by hand) or when postmarked (if sent by mail). For purposes of notice the address of the parties shall, until changed as herein provided, be as follows:
If to Landlord: Dr. Rajesh K. Kakar
c/o SYSTEMS SOLUTIONS INC.
2108 East Thomas Road
Phoenix, Arizona 85016-7758
If to Tenant: ________________________________________________
Tenant shall, at such time or times as Landlord may request, sign a certificate stating whether this Lease is in full force and effect; whether any amendments or modifications exist; whether there are any defaults hereunder; and such other information and agreements as may be reasonably requested by Landlord.
Tenant shall maintain, at its expense, fire and extended coverage insurance on all of its personal property, including removal trade fixtures, located in the Leased Premises and on all additions and improvements made by Tenant. If the annual premiums to be paid by Landlord under any insurance policy Landlord elects to obtain with respect to the Building and/or the Leased Premises shall exceed the
standard rates because of Tenant's operations, contents of the Leased Premises, or improvements with respect to the Leased Premises beyond the Building standard. Tenant shall pay the excess amount of the premium upon request therefore by Landlord. Tenant shall procure and maintain throughout the term of this Lease a policy of policies of liability insurance, at its sole cost and expense, insuring Tenant and Landlord against any and all liability for injury to or death of a person or persons, and for
damage to or destruction of property occasioned by or arising out of or in connection with the use or occupancy of the Leased Premises, or by the condition of the Leased Premises, with such policy or policies either naming Landlord as an additional insured or containing a protective liability endorsement in Landlord's favor. The combined single limits of such policy or policies of liability insurance shall be not less than One Million Dollars ($1,000,000) in respect to injuries to or death of any number of persons arising out of any one occurrence. All insurance policies required of Tenant hereunder shall be written by responsible and reputable companies reasonably acceptable to Landlord, shall contain a written obligation on the part
of the carrier to notify Landlord in writing at least thirty (30) days prior to cancellation, and shall be evidenced by a certificate or certificates of insurance promptly delivered to Landlord. Tenant shall be required to obtain any renewals of the policies required hereunder at least thirty (30) days prior to expiration thereof, and to provide certificates or other evidence of such renewed coverage to Landlord by such date. Landlord reserves the right from time to time to amend the insurance requirements set forth herein, in its sole reasonable discretion, and shall provide Tenant with written notice thereof. In the event Tenant fails to purchase and maintain any of the insurance required hereunder, Landlord reserves the right, but not the obligation, to purchase any such insurance on behalf of Tenant, and at Tenant's expense, with any expenses incurred by Landlord in connection therewith being reimbursed to Landlord by Tenant within five (5) days from written demand therefore. It is expressly agreed by Landlord that Tenant may satisfy the foregoing insurance requirements by and through any "blanket" policies covering other premises as well as the eased Premises, provided such blanket policy fulfills the aforesaid criteria and the requirements.
Tenant agrees that Landlord may relocate Tenant, with Tenant's approval, to other space in the Building containing at least the same amount of Rentable Area as contained in the Leased Premises, cost is borne by Landlord.
Section 25.1 Covenant of Quiet Enjoyment. Provided Tenant complies with its covenants, duties and obligations hereunder, Tenant shall quietly have, hold, and enjoy the Leased Premises subject to the terms and provisions of this instrument.
Section 25.2 Landlord's Right of Entry. In any circumstances where Landlord is permitted to enter upon the Leased Premises during the Lease term, whether for the purpose of curing any default of Tenant, repairing damage resulting from fire or other casualty, or as a result of an eminent domain taking, or is otherwise permitted hereunder or by law to go upon the Leased Premises, no such entry shall constitute an eviction or disturbance to Tenant's use and possession of the Leased Premises or a breach by Landlord or of any of its obligations hereunder or grant Tenant any right of setoff or recoupment or other remedy; and in connection with any such entry incident to performance of repairs, replacements, maintenance, or construction, all of the aforesaid provisions shall be applicable notwithstanding that Landlord may elect to take Building materials in, to, or upon the Leased Premises that may be required or utilized in connection with such entry by Landlord.
Section 25.3 Counter-Claims. In the event Landlord commences any proceedings against Tenant for nonpayment of rent or any other sum due and payable by Tenant hereunder, Tenant shall not interpose any counter-claim or other claim against Landlord of whatever nature or description in any such proceedings; and in the event Tenant interposes any such counter-claim or other claim against Landlord in such proceedings, Landlord and Tenant stipulate and agree that, in addition to any other lawful remedy of Landlord, upon motion of Landlord, such counter-claim or other claim asserted by Tenant shall be severed out of the proceedings instituted by Landlord and the proceedings instituted by Landlord may proceed to final judgment separately and apart from and without consolidation with or reference to the status of such counter-claim or any other claim asserted by Tenant; provided, however, the provisions of this sentence do not apply to counter-claims and claims by Tenant which, under the laws of the state in which the Leased Premises are situated, may only be asserted in the aforesaid proceedings brought by Landlord or be forever barred if not asserted in said proceedings.
Section 25.4 Injunctive Relief. Landlord may restrain or enjoin any breach or threatened breach of any covenant, duty, or obligation of Tenant herein contained without the necessity of proving the inadequacy of any legal remedy or irreparable harm.
Section 25.5 Remedies Cumulative. The remedies of Landlord hereunder shall be deemed cumulative and no remedy of Landlord, whether exercised by Landlord or note, shall be deemed to be in exclusion of any other.
Section 25.6 Consent or Parties. Except as may be otherwise herein expressly provided, in all circumstances under this Lease where prior consent or permission of one party ("first party") is required before the other party ("second party') is authorized to take any particular type of action, the matter of whether to grant such consent or permission shall be within the sole and exclusive judgment and
discretion of the first party; and it shall not constitute any nature of breach by the first party hereunder or any defense to the performance of any covenant, duty, or obligation of the second party hereunder that the first party delayed or withheld the granting of such consent or permission, whether or not the delay or withholding of such consent or permission has prudent or reasonable or based on good cause.
Section 25.7 Time of Essence. In all instances where Tenant is required hereunder to pay any sum or do any act at a particular indicated time or within an indicated period, it is understood that time is of the essence.
Section 25.8 Independent Covenant. The obligation of Tenant to pay all rent and other sums hereunder provided to be paid by Tenant and the obligation of Tenant to perform Tenant's other covenants and duties hereunder constitute independent, unconditional obligations to be performed at all times provided for hereunder, save and except only when an abatement thereof or reduction therein is hereinabove expressly provided for and not otherwise. Tenant waives and relinquishes all rights which Tenant might have to claim any nature of lien against or withhold, or deduct from, or offset against any rent and other sums provided hereunder to be paid Landlord by Tenant. Tenant waives and relinquishes any right to assert, either as a claim or as a defense, that Landlord is bound to perform or is liable for the nonperformance of any implied covenant or implied duty of Landlord not expressly herein set forth.
Section 25.9 Special Damages. Under no circumstances whatsoever shall Landlord ever be liable hereunder for consequential damages or special damages.
Section 25.10 Contract Performance. All monetary obligations of Landlord and Tenant (including, without limitation, any monetary obligation of Landlord or Tenant for damages for any breach of the respective covenants, duties, or obligations of Landlord or Tenant hereunder) are performable exclusively in Phoenix, Arizona.
Section 25.11 Entire Agreement. This Lease and any contemporaneous workletter, addenda, or exhibits signed by the parties constitute the entire agreement between Landlord and Tenant. No prior written or prior or contemporaneous oral promises or presentations shall be binding. This Lease shall not be amended, changed, or extended except by written instrument signed by both parties hereto. Section captions herein are for convenience only, and neither limit nor amplify the provisions of this Lease. The provisions of this Lease shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors, and assigns of the parties, but this provision shall in no way alter the restriction herein in connection with assignment and subletting by Tenant. EXECUTED in multiple counterparts, each of which shall have the force and effect of an original.
LANDLORD: DR. RAJESH K. KAKAR
NAME: DR. RAJESH (TONY) KAKAR
DATE: ____________ TITLE: OWNER
DATE: ____________ TITLE: ______________________________________________
The following Exhibits and documents are attached to and made a part of this Lease Agreement:
EXHIBIT A: Floor Plan of Leased Premises
EXHIBIT B: Building Rules
FLOOR PLAN OF LEASED PREMISES
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