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HomeMy WebLinkAbout113-10 RESOLUTIONRESOLUTION NO. 113-10 A RESOLUTION APPROVING A LEASE WITH BALL PLAZA HOLDINGS, LLC TO RENT SPACE IN THE E.J. BALL BUILDING TO HOUSE THE CITY OF FAYETTEVILLE INFORMATION TECHNOLOGY DIVISION'S SERVER ROOM FOR THE ANNUAL AMOUNT OF $18,504.00. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas, hereby approves the attached lease with Ball Plaza Holdings, LLC to rent space in the E.J. Ball Building to house the City of Fayetteville Information Technology Division's Server Room for the annual amount of $18,504.00. PASSED and APPROVED this 6th day of July, 2010. APPROVED: ATTEST: SONDRA E. SMITH, City Clerk/Treasurer S. Huddleston Submitted By City of Fayetteville Staff Review Form City Council Agenda Items and Contracts, Leases or Agreements 7/6/2010 City Council Meeting Date Agenda Items Only Information Technology Division Action Required: Finance Department Approve lease aggreement renewal with Ball Plaza Holdings, LLC for IT Data Center. 18, 504.00 Cost of this request 1010-1710-5308.00 Account Number Project Number Budgeted item $ 18,510.00 Category / Project Budget 7,704.00 Program Category / Project Name Funds Used to Date Program / Project Category Name 10,806.00 General Remaining Balance Fund Name Budget Adjustment Attached Li1J Departm ector City ' orney /5(/4// -.- ‘.0 Finance d Internal Services Director 6-•i1-2010 Date 4-14'7416 Date Previous Ordinance or Resolution # Original Contract Date: Original Contract Number: 136-07 Jul -07 Received in City Clerk's Office 06-14-10P01:28 RCVD Comments: Revised January 15, 2009 THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENT CORRESPONDENCE ARKANSAS; www.accessfayetteville.org CITY COUNCIL AGENDA MEMO To: Mayor and City Council Thru: Paul Becker, Finance Director From: Scott Huddleston, IT Director Date: June 14, 2010 Subject: EJ Ball Building Lease Agreement PROPOSAL: In July of 2007 the City entered into a lease agreement for space in the EJ Ball Building to house the City's primary datacenter. Prior to 2007, the City's datacenter was located in City Hall. In 2007, the City Hall location became insufficient for the City's datacenter due to physical space requirements, electrical capacity requirements, and cooling capacity. Building improvements to continue datacenter operations in the City Hall building were estimated in excess of $500,000. The EJ Ball space was originally designed for similar purpose and has provided the necessary infrastructure to maintain all of the City's data systems. RECOMMENDATION: Finance Department staff recommends that the City Council authorize the Mayor to renew the three year lease agreement for Space in the E.J. Ball Building. BUDGET IMPACT: Annual lease amount is $18,510. LEASE AGREEMENT This Lease Agreement is made and entered into by and between Ball Plaza Holdings, LLC, an Arkansas limited Liability company ("Landlord") and City of Fayetteville, Arkansas ("Tenant"). For and in consideration of the mutual agreements and covenants hereinafter set forth, Landlord and Tenant do hereby agree as follows: 1. PREMISES: The Landlord hereby leases and demises to Tenant conditioned as set forth below, space in the EJ Ball building further described as: 112 W. Center Street, Fayetteville, Washington County, Arkansas the space to be occupied consisting of one thousand two hundred thirty four (1,234) square feet with the premises being located in the basement floor (B-10). Such portion of the aforedescribed building hereinafter referred to as the Premises. 2. TERM: The term of this Lease shall be for a period of three (3) years beginning on February 10, 2010 and ending on February 9, 2013. 3. RENT: The Tenant agrees to pay to the Landlord and the Landlord agrees to accept from the Tenant as rents for the Premises the sum of One Thousand Five Hundred Forty Two and 00/100 Dollars ($1,542.00) per month all inclusive of taxes, insurance, water and sanitation, due and payable on or before the first day of each month. Tenant agrees to pay a late charge of ten percent (10%) of total rents if the rental payment is late. The monthly rentals provided for under subparagraph (3) hereof shall be increased each lease year during the original and any extended term hereof by an amount to be determined as follows: (a) At the end of each lease year the next yearly and monthly rent will increase by three percent (3%) over the previous year's rent. (b) The term "Lease Year" as used herein shall mean the full twelve (12) calendar months of this Lease. If the term of this lease does not commence on the first day of a calendar month, then the first month's rent shall be prorated based upon the number of days in the calendar month that the Tenant is entitled to possession of the Premises. The Tenant shall pay upon signature of this lease the Landlord the sum of Zero Dollars ($0.00), the receipt of which will acknowledged by the Landlord in a receipt to Tenant. It is understood and agreed that Landlord and Tenant have entered into this Lease Agreement for the full length of the term set forth above, and that Tenant's financial obligation is for that full term. Tenant acknowledges and agrees that Landlord has reasonably relied on this Lease Agreement and Tenant's obligation set forth herein in arranging for financing and in other matters regarding the Premises and the building of which the Premises is but a portion. 4. OPTION TO RENEW LEASE: If the Tenant shall have fully performed this Lease and shall not have been in default at any time during the original term hereof, the Tenant shall have three (3) options to extend this Lease for three (3) years each option. In order for the Tenant to exercise this option, in addition to meeting the above condition, the Tenant shall give written notice by certified mail addressed to the Landlord of such extension at least two (2) calendar months prior to the expiration of the original term hereof. If such notice is not received by Landlord within the specified time period, this Option to Renew shall automatically be exercised as stated above, or shall become null and void, at the discretion of Landlord. The monthly rents to be paid by Tenant during each "Lease Year" of this option period shall be negotiated. 5. PURPOSE: Said premises shall be used and occupied by Tenant only for the operation of general office purposes and computer database and for no other purpose or purposes without written consent of Landlord, Initial such consent not to be unreasonably withheld. 6. COMPLIANCE WITH LAWS: Tenant shall promptly comply with all laws and all lawful orders, ordinances and regulations affecting the Premises hereby Leased, and the cleanliness, safety, occupation and use of same. No auction sales may be conducted in the herein demised Premises without the written consent of Landlord. 7. FIXTURES: Subject to the provisions hereof in the sections entitled "Ownership of Improvements" and "Security Agreement," any fixtures or other property of Tenant which may be placed either in, upon, affixed or attached to the Premises hereby demised by Tenant are to remain Tenant's property, and Tenant shall have the right to remove the same at any time prior to or upon vacating said Premises, provided Tenant immediately repair to Landlord's satisfaction any damage resulting from such removal. 8. PROPER USE OF PREMISES: Tenant shall not perform any acts or carry on any practice which may injure the building or be a nuisance or menace to others, and shall keep the Premises under its control, clean and free from rubbish and dirt of all kinds. Tenant agrees to use diligence in keeping trash and litter picked up on the premises, to keep Premises clear and free from rodents, bugs and vermin. Extermination is the responsibility of the Landlord. The Tenant shall not use or permit the use of any portion of said Premises for sleeping apartments, lodging room, cooking or for any immoral or unlawful purpose or purposes. If Tenant fails to maintain the Premises in a neat, clean and orderly manner, Landlord may give Tenant written notice to do so, stating with particularity the deficiencies, and if Tenant fails or refuses to remedy the situation set forth in the written notice for a period of ten (10) days, Landlord may have such deficiencies corrected at the expense of the Tenant. -2- Initial: 9. LANDLORD'S DUTY TO REPAIR: Landlord agrees to replace and repair the exterior of the building, including the roof, exterior walls, exterior doors and windows and to make any repairs to the interior or exterior of Premises resulting from a structural defect or defects, as well as repairs to the electrical systems and/or plumbing, except such of the above as may be due to the negligence of Tenant, or its employees or agents. Landlord shall be responsible for maintenance, cleaning and control of all common areas in and around the building and Premises. 10. SECURITY DEPOSIT: Tenant has paid a security deposit in the sum of Zero Dollars ($0.00) which does not represent payment of the last month's rent but is rather a deposit to secure performance of all terms and conditions of this Lease, and to protect against default by Tenant of the obligations to keep Premises clean and undamaged. Said deposit will be returned after Tenant fulfills the term of this Lease or any extension thereof if the Premises are in good order, undamaged, and all rents are fully paid, including any additional sums due Landlord as a result of Landlord ordered repairs, cleaning or utility bills as provided for herein. 11. TENANT'S DUTY TO REPAIR: Landlord agrees to routine maintenance and/or replacement of heating and air conditioning systems, to include servicing twice a year, filters, belts, freon, fuses, and switches, during the term of this Lease and any renewals or extensions thereof. Tenant also agrees to maintain and keep in good repair the interior of the herein leased Premises, including but not limited to all hardware, floor coverings, all interior paint and wall covering, decorations, glass and light bulbs, subject to reasonable wear and tear only. If Landlord deems any repairs necessary to the interior of the leased Premises, it may request in writing that such repairs be made by the Tenant, if said repairs are not due to the negligence of Landlord or its agents. If said request is reasonable, and Tenant refuses and neglects to commence upon such repair and complete the same with reasonable dispatch, Landlord may make or cause such repairs to be made, and Tenant will forthwith on demand pay Landlord the costs, such costs to be payable as additional rent. 12. SIGNS: Sign size and design must be approved by Landlord and in strict compliance with the ordinance of the City of Fayetteville. All signs are purchased, erected and maintained by Tenant. Tenant agrees not to use any advertising media such as loud speakers, phonographs, or radio broadcasts in a manner to be heard in the street or which is deemed objectionable by Landlord. Tenant shall not install any exterior electrical fixtures, shades, awnings or decorations, build any fences, or paint without the previous written consent of Landlord. Portable signs shall not be placed on Premises. Initial: -3- 13. ELECTRICAL EQUIPMENT: If Tenant installs any electrical equipment which overloads the lines in the herein leased Premises, Tenant shall at its own expense, make whatever changes are necessary to comply with the requirements, if any of the insurance underwriter and city electrical inspector's department or other lawful authority. Tenant agrees not to install or use any electric grills, or other electrical equipment that contain a heating element which creates a fire hazard, unless said electrical equipment is used in connection with the underwriter's specifications. Tenant shall, at its own expense, provide any extra electrical services, if needed. 14. ENTRY BY LANDLORD: Landlord shall have the right to enter the leased premises at all reasonable hours with reasonable advance notice to the Tenant, Landlord agrees to covenants that he will not enter the leased Premises without the consent of Tenant except in the case of emergency. 15. UTILITY COSTS: Landlord agrees to pay for all utilities listed in paragraph three (3) of this lease. Tenant shall pay for all other utilities and any deposits required for the same. 16. TENANT ALTERATIONS: Tenant will not alter the said Premises (except repairs as aforesaid) and will not install any fixtures or equipment to be used in connection with Tenant's business which in any manner affect the demised Premises without having first obtained the written approval of Landlord as to the nature, installation, and location of such fixtures and equipment. In the event the occupancy and use of Premises by Tenant shall result in an increase in insurance rates on said Premises, building or contents over those for normal office occupancy, then Tenant shall be liable and hereby agrees to reimburse Landlord for any such increase. 17. LANDLORD ALTERATIONS: Landlord hereby reserves the right to alter Premises as may be required by any governmental authority or as may be required to preserve, maintain, and/or protect the building or Premises, provided that such alterations shall not interfere with the operation of Tenant's business or in the usefulness of the Premises to Tenant for the herein stated purposes. 18. OWNERSHIP OF IMPROVEMENTS: All alterations, additions and improvements which may be made by either of the above parties hereto upon the Premises and which in any manner are permanently attached to the floors, wall or ceilings, shall be considered the property of the Landlord and shall remain with the surrendered Premises as a part thereof without disturbance, molestation or injury at the termination of this Lease. Any plumbing, wiring or fixtures installed in said Premises by Tenant which cannot be removed without incurably marring or injuring the same shall become a part of the Premises and belong to the Landlord. Initial: -4- 19. TAXES: All taxes and other charges assessed by reason of Tenant's business, occupation or profession shall be paid by Tenant. Tenant shall pay his personal property taxes. 20. DESTRUCTION BY FIRE OR OTHER CASUALTY: If the Premises shall be so damaged by fire or other peril specified in the so-called extended coverage insurance endorsement so as to be substantially destroyed, this Lease shall cease and come to an end at the option of either Landlord or Tenant by one giving the other written notice or cancellation, any unearned rent paid in advance by Tenant shall be apportioned as of the date of such destruction and be refunded to the Tenant. In the event no such notice of cancellation is given, after substantial destruction, and within the time specified therefor, this Lease shall remain in full force and effect. Following removal by Tenant of his effects from said Premises, Landlord shall proceed with making improvements to the Premises as soon as practical using due diligence to repair and restore the Premises to be in as good condition as it was immediately prior to such destruction. Rent which would accrue during the time said Premises are so destroyed and unTenantable shall abate. In the event the Premises are only partially destroyed, but not substantially destroyed, by fire or other peril specified in the so-called extended coverage endorsement, this Lease shall remain in full force and effect, and the Premises shall be restored by Landlord with due diligence to as good condition as it was in immediately prior to such damage. A just proportion of the rent reserved herein, according to the nature and extent of the damage to said Premises and the extent of untenantability thereof, shall abate until the Premises shall have been so repaired and restored as aforesaid. If, however, the cost of repairing/replacing the Premises is unreasonable at the present rent and the parties cannot reach an agreement as to the rent, then this Lease shall be canceled. 21. CONTINUED OCCUPANCY: In the event Tenant remains in possession of the herein Leased Premises after the expiration of said Lease, and without executing a new lease, it shall be deemed to be occupying said Premises as a Tenant from month to month. The monthly rental due for any such period shall be equal to the rental due for the last full month of tenancy under the terms of this Lease times one hundred thirty percent (130%), until a new lease is executed or Tenant vacates the leased Premises. 22. NON -WAIVER: One or more waivers of Tenant's breach of any covenant or condition by Landlord shall not be constructed as a waiver of a further breach of the same covenant or condition, and the consent or approval shall not be deemed to waive or render unnecessary Landlord's consent or approval to any subsequent similar act by Tenant. 23. PARKING: Intentionally Omitted 24. FORFEITURE: In the event Tenant, at any time, shall fail to pay any installment of rent or any other sum of money due Landlord under this Lease, or in the event Tenant shall fail to perform or Initial: 'r7t-79 -5- observe any other covenant, agreement, condition or undertaking herein contained on Tenant's part to be performed or observed for ten (10) days after notice thereof from Landlord, Landlord shall have the right to enter and take immediate and exclusive possession of the leased Premises. Whether or not Landlord shall have re-entered or regained possession of the Leased Premises, Landlord shall have the additional right, without further demand or notice to Tenant or any other person, for the payment of rent, possession or the curing of Premises or any part(s) thereof for the account of the Tenant, at one time or from time to time, for such rent(s) as shall be acceptable to Landlord. Landlord shall have the right to make, at the cost and expense of Tenant, such repairs, changes, alterations or additions in and to the leased Premises as it may deem necessary or advisable. In the event Landlord elects to relet the leased Premises or any part(s) thereof as aforesaid, said election shall not prevent Landlord from thereafter forfeiting this Lease. In the event any default (for which notice has been given as aforesaid) which, because of its nature, cannot be completely cured or is not completely cured within said ten-day period, said default shall be deemed to have been remedied for the purposes of this paragraph if the correction thereof shall have been commenced within said ten-day period, and shall, when commenced, be diligently prosecuted to completion. Whether or not the Landlord, having the right of re-entry as aforesaid, shall have elected to forfeit this Lease or to relet the leased Premises in whole or in part, Tenant shall continue and remain liable for that payment of all sums reserved to Landlord and for the performance of all covenants, agreements and undertakings of Tenant during the full period which otherwise would have constituted the lease term, including damages which Landlord may then or thereafter suffer to the full end of said term. Landlord may sue for and recover such delinquent rents, payments and damages or component items thereof, from time to time, to the end of any elapsed period, to the end of the full period which otherwise would have constituted the lease term, as Landlord may elect. If Landlord sues anticipatorily, the measure of recovery shall be the difference between the rent reserved and the fair rental value of the Premises for such residue of said term. Landlord shall not be deemed to have split his cause of action by any action of recovery under this article and shall have the right at any time after exercising any option given to Landlord, to exercise thereafter any other option hereunder, or such legal rights as Landlord would have in the absence of such options. 25. NO ASSIGNMENT OR SUBLETTING: Neither this Lease, nor any interest therein, nor any estate hereby shall pass to any trustee or receiver in bankruptcy, or to any other receiver or assigns for the benefit of creditors or otherwise by operation of law. Further, Tenant understands that neither this Lease, nor any interest herein, nor any estate created hereby may be assigned, subleased, or in any way transferred or conveyed by Tenant herein, without the previous written consent of Landlord. Initial: 7m9 -6- 26. BANKRUPTCY OR ASSIGNMENT FOR CREDITORS: If during the term of this Lease, Tenant shall file a voluntary petition in bankruptcy, or if any involuntary petition in bankruptcy shall be filed against Tenant, and Tenant, after notice and hearing thereon, is adjudicated bankrupt, or if hereafter Tenant make a voluntary assignment for the benefit of Tenant's general creditors, or if a receiver be appointed, after notice and hearing, to take charge of Tenant's business, or if any exception or attachment shall issue against Tenant, or any of Tenant's effects whatsoever, and shall not be released within thirty (30) days after notice of same, whereupon the said demised Premises shall be taken or attempted to be taken, then upon any of the events above set forth, this Lease shall terminate forthwith and Landlord shall be entitled to immediate possession of the Leases Premises. In the event of termination as set forth in the preceding paragraph, Tenant agrees forthwith to pay unto Landlord, as liquidated damages, the difference between the value of the rent reserved in this Lease, at the time of such termination, and the fair rental value of the demised Premises for the residue of said term, which shall in no event be less than one-fifth (1/5) of the rental reserved for the residue of such term. 27. NOTICE: Whenever under this Lease provision is made for notice of any kind, it shall be deemed sufficient notice and service thereof if such notice to Tenant is in writing addressed to Tenant, at the Leased Premises, and deposited in the mail with postage prepaid, and if such notice to Landlord is in writing, addressed to 4100 Corporate Center Drive, Suite 103, Springdale, Arkansas 72762, deposited in the mail with postage prepaid. All rental payments shall be mailed to Ball Plaza Holdings, LLC, c/o Flake & Kelley Commercial, PO Box 990, Little Rock, AR 72201. 28. SURRENDER: At the expiration of said term, Tenant will quit and surrender the leased Premises, in as good state and condition as received, reasonable wear and tear and damage by fire or the elements or from causes beyond Tenant's control excepted. Tenant shall paint interior walls and clean carpet before surrendering Lease Premises to Landlord. 29. RIGHT OF SUCCESSORS: Each and every provision of this Lease shall bind and shall inure to the benefit of the parties hereto, their legal representative, heirs and successors. 30. PARAGRAPH HEADINGS: The paragraph headings, as to the contents of particular paragraphs herein, are inserted only for convenience and are in no way to be construed as part of this Lease, or as a limitation of the scope of the particular paragraphs to which they refer. 31. LEGAL FEES: Tenant hereby agrees and covenants to indemnify Landlord for any and all damages, loss, or harm suffered by Landlord as a result of Tenant's breach of any provision of this Lease Agreement; such sums shall include, but are not necessarily limited to, court costs, attorney fees, re-leasing expenses and cleanup. Initial: 171v -7- 32. TIME OF ESSENCE: It is agreed that time is of the essence of this Lease. 33. ENTIRE AGREEMENT: This Lease, when signed, together with any documents referred to herein, approved in writing by both parties and made a part hereof, contains all the agreements and conditions made between the parties hereto and may not be modified orally, or in any other manner than by an agreement in writing, signed by all the parties hereto or their respective successors in interest. Tenant, specifically understands that Landlord has no agent or other representative authorized to orally modify or amend this Lease Agreement or to make any oral representations which are binding on Landlord. Further, Tenant acknowledges that Tenant has not relied nor depended upon any opinions or statements made by anyone concerning the Premises or its use for a particular purpose. 34. CONDEMNATION: If any part of the demised Premises or if the building of which same are a part (even though no part of the Premises to be taken) be condemned for a public or quasi -public use by right of eminent domain, with or without litigation, or transferred by agreement in connection with such public or quasi -public use, this Lease, as to the part so taken, shall terminate as of the date title shall vest in the condemnor or, and the rent payable hereunder shall be adjusted so that Tenant shall be required to pay for the remainder of the term only such portion of such rent as the value of the part remaining after condemnation bears to the value of the entire premises at the date of condemnation; but in either such event Landlord shall have the option to terminate this Lease as of the date when title to the part so condemned vests in the condemnor. All compensation awarded upon such condemnation or taking shall belong and be paid to Landlord, and Tenant shall have no claim thereto, and Tenant hereby irrevocably assigns and transfers to Landlord any right to compensation or damages to which Tenant may become entitled during the term hereof by reason of the condemnation of all or part of the demised Premises. 35. SALE OF THE PREMISES: In the event of a sale or conveyance by Landlord of the building containing the demised Premises or assignment of Senior Lease (if any), the same shall operate to release Landlord from any future liability upon any of the covenants or conditions, express or implied, herein contained in favor of Tenant, and in such event Tenant agrees to look solely to the responsibility of the successor in interest of Landlord. If any security be given by Tenant to secure faithful performance of Tenant's covenants in this Lease, Landlord may transfer the security as such to the purchaser of the reversion and thereupon Landlord shall be discharged from any further liability in reference thereto. 36. ARKANSAS LAW: This Lease shall in all respects be governed by the laws of the State of Arkansas. Initial: -8- 37. DISCLOSURE: Please remember that in transmitting this Lease Agreement to you it shall not be construed as an offer from the Owner to you, rather, upon execution by you and delivery to Owner or Flake & Kelley Commercial, the Lease Agreement shall be an offer from you to lease from the Owner on the terms and conditions set forth in the Lease Agreement. The Lease Agreement shall be binding upon the Owner only upon the execution by an authorized representative of Owner. Deposit by Owner or Flake & Kelley Commercial of any security deposit tendered with the Lease proposal shall not be deemed an express or implied acceptance of your proposal to lease. Flake & Kelley Commercial is agent for the Landlord. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals, this /4 "' day of IliZ etel 2010. Initial: LANDLORD: BALL PLAZA HOLDINGS, LLC By: Ted Belden, Managing Member Date: TENANT: City of Fa teville By: Date: -9- (PRINTED NAME) 7/aW RESOLUTION NO. A RESOLUTION APPROVING A LEASE WITH BALL PLAZA HOLDINGS, LLC TO RENT SPACE IN THE E.J. BALL BUILDING TO HOUSE THE CITY OF FAYETTEVILLE INFORMATION TECHNOLOGY DIVISION'S SERVER ROOM FOR THE ANNUAL AMOUNT OF $18,504.00. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas, hereby approves the attached lease with Ball Plaza Holdings, LLC to rent space in the E.J. Ball Building to house the City of Fayetteville Information Technology Division's Server Room for the annual amount of $18,504.00. PASSED and APPROVED this 6th day of July, 2010. APPROVED: ATTEST: By: By: LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer LEASE AGREEMENT This Lease Agreement is made and entered into by and between Ball Plaza Holdings, LLC, an Arkansas limited liability company ("Landlord") and City of Fayetteville, Arkansas ("Tenant"). For and in consideration of the mutual agreements and covenants hereinafter set forth, Landlord and Tenant do hereby agree as follows: 1. PREMISES: The Landlord hereby leases and demises to Tenant conditioned as set forth below, space in the EJ Ball building further described as: 1.12 W. Center Street, Fayetteville, Washington County, Arkansas -the space to be occupied consisting of one thousand two hundred thirty four (1,234) square feet with the premises being located in .the basement floor (B-10). Such portion of the aforedescribed building hereinafter referred to as the Premises. 2. TERM: The term of this Lease shall be for a period of three (3) years beginning on February 10, 2010 and ending on February 9, 2013. • 3. RENT: The Tenant agrees to pay to the Landlord and the Landlord agrees to accept from the Tenant as rents for the Premises the sum of One Thousand Five hunched Forty Two and 00/100 Dollars ($1,542.00) per month all inclusive of taxes, insurance, water and sanitation, due and payable on or before the first day of each month. Tenant agrees to pay a late charge of ten percent (10%) of total rents if the rental payment is late. The monthly rentals provided for under subparagraph (3) hereof shall be increased each lease year during the original and any extended term hereof by an amount to be determined as follows: (a) At the enol of each lease year the next yearly and monthly rent will increase by three percent (3%) over the previous year's rent. (b) The term "Lease Year" as used herein shall mean the full twelve (12) calendar months of this Lease. If the term of this lease does not commence on the first day of a calendar month, then the first month's rent shall be prorated based upon the number of days in the calendar month that the Tenant is entitled to possession of the Premises. The Tenant shall pay upon signature of this lease the Landlord the sum of Zero Dollars ($0.00), the receipt of which wil.1 acknowledged by the Landlord in a receipt to Tenant. It is understood and agreed that Landlord and Tenant have entered into this Lease Agreement for the full length of the term set forth above, and that Tenant's financial obligation is for that full term. Tenant acknowledges and agrees that Landlord has reasonably relied on this Lease Agreement and Tenant's obligation set forth herein in arranging for financing and in other matters regarding the Premises and the building of which the Premises is but a portion. 4. OPTION TO RENEW LEASE: if the Tenant shall have fully performed this Lease and shall not have been in default at any time during the original term hereof, the Tenant shall have three (3) options to extend this Lease for three (3) years each option. In order for the Tenant to exercise this option, .in addition to meeting the above condition, the Tenant shall give written notice by certified mail addressed to the Landlord of such extension at least two (2) calendar months prior to the expiration of the original term hereof. .If such notice is not received by Landlord within the specified time period, this Option to Renew shall automatically be exercised as stated above, or shall become null and void, at the discretion of .Landlord. The monthly rents to be paid by Tenant during each "Lease Year" of this option period shall be negotiated. 5. PURPOSE: Said premises shall be used and occupied by Tenant only for the operation of general office purposes and computer database and for no other purpose or purposes without written consent of Landlord, .Initial such consent not to be unreasonably withheld. 6. COMPLIANCE WITH LAWS: Tenant shall promptly comply with all laws and all lawful orders, ordinances and regulations affecting the Premises hereby leased, and the cleanliness, safety, occupation and use of same. No auction sales may be conducted in the herein demised Premises withoutthe written consent of Landlord. 7. FIXTURES: Subject to the provisions hereof in the sections entitled "Ownership of Improvements" and "Security Agreement," any fixtures or other property of Tenant which may be placed either in, upon, affixed or attached to the Premises hereby demised by Tenant are to remain Tenant's property, and Tenant shall have the right to remove the same at any time prior to or upon vacating said Premises, provided Tenant immediately repair to .Landlord's satisfaction any damage resulting from such removal. 8. PROPER USE OF PREMISES: Tenant shall not perform any acts or carry on any practice which may injure the building or be a nuisance or menace to others, and shall keep the Premises under its control, clean and free from rubbish and dirt of all kinds. Tenant agrees to use diligence in keeping trash and litter picked up on the premises, to keep Premises clear and free from rodents, bugs and vermin. Extermination is the responsibility of the Landlord. The Tenant shall not use or permit the use of any portion of said Premises for sleeping apartments, lodging room, cooking or for any immoral or unlawful purpose or purposes. If Tenant fails to maintain the Premises in a neat, clean and orderly manner, Landlord may give Tenant written notice to do so, stating with particularity the deficiencies, and if Tenant fails or refuses to remedy the situation set forth in the written notice for a period of ten (10) days, .Landlord may have such deficiencies corrected at the expense of the Tenant. _2_ Initial: 9. LANDLORD'S DUTY TO REPAIR: Landlord agrees to replace and repair the exterior of the building, including the roof, exterior walls, exterior doors and windows and to make any repairs to the interior or exterior of Premises resulting from a structural defect or defects, as well as repairs to the electrical systems and/or plumbing, except such of the above as may be due to the negligence of Tenant, or its employees or agents. Landlord shall be responsible for maintenance, cleaning and control of all common areas in and around the building and Premises. 10. SECURITY DEPOSIT: Tenant has paid a security deposit in the sum of Zero Dollars ($0.00) which does not represent payment of the last month's rent but is rather a deposit to secure performance of all terms and conditions of this Lease, and to protect against default by Tenant of the obligations to keep Premises clean and undamaged. Said deposit will be returned after Tenant fulfills the term of this Lease or any extension thereof if the Premises are in good order, undamaged, and all rents are fully paid, including any additional stuns due Landlord as a result of Landlord ordered repairs, cleaning or utility bills as provided for herein. 11. TENANT'S DUTY TO REPAIR: Landlord agrees to routine maintenance and/or replacement of heating and air conditioning systems, to include servicing twice a year, filters, belts, Freon, fuses, and switches, during the term of this Lease and any renewals or extensions thereof. Tenant also agrees to maintain and keep in good repair the interior of the herein leased Premises, including but not limited to all hardware, floor coverings, all interior paint and wall covering, decorations, glass and light bulbs, subject to reasonable wear and tear only. If Landlord deems any repairs necessary to the interior of the leased Premises, it may request in writing that such repairs be made by the Tenant, if said repairs are not due to the negligence of Landlord or its agents. If said request is reasonable, and Tenant refuses and neglects to commence upon such repair and complete the same with reasonable dispatch, Landlord may make or cause such repairs to be made, and Tenant will forthwith on demand pay Landlord the costs, such costs to be payable as additional rent. 12. SIGNS: Sign size and design must be approved by Landlord and in strict compliance with the ordinance of the City of Fayetteville. All signs are purchased, erected and maintained by Tenant. Tenant agrees not to use any advertising media such as loud speakers, phonographs, or radio broadcasts in a manner to be heard in the street or which is deemed objectionable by Landlord. Tenant shall not install any exterior electrical fixtures, shades, awnings or decorations, build any fences, or paint without the previous written consent of .Landlord. Portable signs shall not be placed on Premises. Initial: 1110 -3- 13. ELECTRICAL EQUIPMENT: If Tenant installs any electrical equipment which overloads the lines in the herein leased Premises, Tenant shall at its own expense, make whatever changes are necessary to comply with the requirements, if any of the insurance underwriter and city electrical inspector's department or other lawful authority. Tenant agrees not to install or use any electric grills, or other electrical equipment that contain a heating element which creates a fire hazard, unless said electrical equipment is used in connection with the underwriter's specifications. Tenant shall, at its own expense, provide any extra electrical services, if -needed. 14. ENTRY BY LANDLORD: Landlord shall have the right to enter the leased premises at all reasonable hours with reasonable advance notice to the Tenant, Landlord agrees to covenants that he will not enter the leased Premises without the consent of Tenant except in the case of emergency. 15. UTILITY COSTS: Landlord agrees to pay for all utilities listed in paragraph three (3) of this lease. Tenant shall pay for all other utilities and any deposits required for the same. 16. TENANT ALTERATIONS: Tenant will not alter the said Premises (except repairs as aforesaid) and will not install any fixtures or equipment to be used in connection with Tenant's business which in any manner affect the demised Premises without having first obtained the written approval of Landlord as to the nature, installation, and location of such fixtures and equipment. In the event the occupancy and use of Premises by Tenant shall result in an increase in insurance rates on said Premises, building or contents over those for normal office occupancy, then Tenant shall be liable and hereby agrees to reimburse Landlord for any such increase. 17. LANDLORD ALTERATIONS: Landlord hereby reserves the right to alter Premises as may be required by any governmental authority or as may be required to preserve, .maintain, and/or protect the building or Premises, provided that such alterations shall not interfere with the operation of Tenant's business or in the usefulness of the Premises to Tenant for the herein stated purposes. 18. OWNERSHIP OF IMPROVEMENTS: All alterations, additions and improvements which may be made by either of the above parties hereto upon the Premises and which in any manner are permanently attached to the floors, wall or ceilings, shall be considered the property of the .Landlord and shall remain with the surrendered Premises as a part thereof without disturbance, molestation or .injury at the termination of this Lease. Any plumbing, wiring or fixtures installed in said Premises by Tenant which cannot be removed without incurably marring or injuring the same shall become a part of the Premises and belong to the Landlord. Initial: -4- 19. TAXES: All taxes and other charges assessed by reason of Tenant's business, occupation or profession shall be paid by Tenant. Tenant shall pay his personal property taxes. 20. DESTRUCTION BY FIRE OR OTHER CASUALTY: If the Premises shall be so damaged by fire or other peril specified in the so-called extended coverage insurance endorsement so as to be substantially destroyed, this Lease shall cease and come to an end at the option of either Landlord or Tenant by one giving the other written notice or cancellation, any unearned rent paid in advance by Tenant shall be apportioned as of the date of such destruction and be refunded to the Tenant. In the event no such notice of cancellation is given, after substantial destruction, and within the time specified therefor, this Lease shall remain in full force and effect. Following removal by Tenant of his effects from said Premises, Landlord shall proceed with making improvements to the Premises as soon as practical using clue diligence to repair and restore the Premises to be in as good condition as it was immediately prior to such destruction. Rent which would accrue during the time said Premises are so destroyed and unTenantable shall abate. In the event the Premises are only partially destroyed, but not substantially destroyed, by fire or other peril specified in the so-called extended coverage endorsement, this Lease shall remain in full force and effect, and the Premises shall be restored by Landlord with due diligence to as good condition as it was in immediately prior to such damage. A just proportion of the rent reserved herein, according to the nature and extent of the damage to said Premises and the extent of untenantability thereof, shall abate until the Premises shall have been so repaired and restored as aforesaid. If, however, the cost of repairing/replacing the Premises is unreasonable at the present rent and the parties cannot reach an agreement as to the rent, then this Lease shall be canceled. 21. CONTINUED OCCUPANCY: In the event Tenant remains in possession of the herein Leased Premises after the expiration of said Lease, and without executing a new lease, it shall be deemed to be occupying said .Premises as a Tenant from month to month. The monthly rental due for any such period shall be equal to the rental due for the last frill month of tenancy under the terms of this Lease times one hundred thirty percent (130%), until a new lease is executed or Tenant vacates the leased Premises. 22. NON -WAIVER: One or more waivers of Tenant's breach of any covenant or condition by Landlord shall not be constructed as a waiver of a further breach of the same covenant or condition, and the consent or approval shall not be deemed to waive or render unnecessary .Landlord's consent or approval to any subsequent similar act by Tenant. 23. PARKING: Intentionally Omitted 24. FORFEITURE: In the event Tenant, at any time, shall fail to pay any installment of rent or any other sum of money due Landlord under this Lease, or in the event Tenant shall fail to perform or Initial: 17to -5- observe any other covenant, agreement, condition or undertaking herein contained on Tenant's part to be performed or observed for ten (10) days after notice thereof from Landlord, Landlord shall have the right to enter and take immediate and exclusive possession of the leased .Premises. Whether or not Landlord shall have re-entered or regained possession of the Leased Premises, Landlord shall have the additional right, without further demand or notice to Tenant or any other person, for the payment of rent, possession or the curing of Premises or any part(s) thereof for the.account of the Tenant, at one time or from time to time, for such rent(s) as shall be acceptable to .Landlord. Landlord shall have the right to make, at the cost and expense of Tenant, such repairs, changes, alterations or additions in and to the leased Premises as it may deem necessary or advisable. In the event Landlord elects to relet the leased Premises or any part(s) thereof as aforesaid, said election shall not prevent Landlord from thereafter forfeiting this Lease. In the event any default (for which notice has been given as aforesaid) which, because of its nature, cannot be completely cured or is not completely cured within said ten -clay period, said default shall be deemed to have been remedied for the purposes of this paragraph if the correction thereof shall have been commenced within said ten -clay period, and shall, when commenced, be diligently prosecuted to completion. Whether or not the Landlord, having the right of re-entry as aforesaid, shall have elected to forfeit this Lease or to relet the leased Premises i.n whole or in part, Tenant shall continue and remain liable for that payment of all sums reserved to Landlord and for the performance of all covenants, agreements and undertakings of Tenant during the full period which otherwise would have constituted the lease term, including damages which .Landlord may then or thereafter suffer to the full end of said term. Landlord may sue for and recover such delinquent rents, payments and damages or component items thereof, from time to time, to the end of any elapsed period, to the end of the full period which otherwise would .have constituted the lease term, as Landlord may elect. If Landlord sues anticipatorily, the measure of recovery shall be the difference between the rent reserved and the fair rental value of the Premises for such residue of said term. Landlord shall not be deemed to have split his cause of action by any action of recovery under this article and shall have the right at any time after exercising any option given to Landlord, to exercise thereafter any other option hereunder, or such legal rights as .Landlord would have in the absence of such options. 25. NO ASSIGNMENT OR SUBLETTING: Neither this Lease, nor any interest therein, nor any estate hereby shall pass to any trustee or receiver in bankruptcy, or to any other receiver or assigns for the benefit of creditors or otherwise by operation of law. Further, Tenant understands that neither this .Lease, nor any interest herein, nor any estate created hereby may be assigned, subleased, or in any way transferred or conveyed by Tenant herein, without the previous written consent of .Landlord. Initial: -6- 26. BANKRUPTCY OR ASSIGNMENT FOR CREDITORS: If during the term of this Lease, Tenant shall file a voluntary petition in bankruptcy, or if any involuntary petition in bankruptcy shall be filed against Tenant, and Tenant, after notice and hearing thereon, is adjudicated bankrupt, or if hereafter Tenant make a voluntary assignment for the benefit of Tenant's general creditors, or if a receiver be appointed, after notice and hearing, to take charge of Tenant's business, or if any exception or attachment shall issue against Tenant, or any of Tenant's effects whatsoever, and shall not be released within thirty (30) days after notice of same, whereupon the said demised Premises shall be taken or attempted.to be taken, then upon any of the events above set forth, this Lease shall terminate forthwith and Landlord shall be entitled to immediate possession of the Leases .Premises. In the event of termination as set forth in the preceding paragraph, Tenant agrees forthwith to pay unto Landlord, as liquidated damages, the difference between the value of the rent reserved in this Lease, at the time of such termination, and the fair rental value of the demised Premises for the residue of said term, which shall in no event be Less than one-fifth (1/5) of the rental reserved for the residue of such term. 27. NOTICE: Whenever under this Lease provision is made for notice of any kind, it shall be deemed sufficient notice and service thereof if such notice to Tenant is in writing addressed to Tenant, at the Leased Premises, and deposited in the mail with postage prepaid, and if such notice to .Landlord is in writing, addressed to 4:100 Corporate Center Drive, Suite 103, Springdale, Arkansas 72762, deposited in the mail with postage prepaid. All rental payments shall be mailed to .Ball Plaza Holdings, LLC, c/o Flake & Kelley Commercial, PO Box 990, Little Rock, AR 72201. 28. SURRENDER: At the expiration of said term, Tenant will quit and surrender the leased Premises, in as good state and condition as received, reasonable wear and tear and damage by fire or the elements or from causes beyond Tenant's control excepted. Tenant shall paint interior walls and clean carpet before surrendering Lease Premises to .Landlord. 29. RIGHT OF SUCCESSORS: Bach and every provision of this Lease shall bind and shall inure to the benefit of the parties hereto, their legal representative, heirs and successors. 30. PARAGRAPH HEADINGS: The paragraph headings, as to the contents of particular paragraphs herein, are inserted only for convenience and are in no way to be construed as part of this Lease, or as a limitation of the scope of the particular paragraphs to which they refer. 31. LEGAL FEES: Tenant hereby agrees and covenants to indemnify .Landlord for any and all damages, loss, or harm suffered by Landlord as a result of Tenant's breach of any provision of this Lease Agreement; such sums shall include, but are not necessarily limited to, court costs, attorney fees, re-leasing expenses and cleanup. Initial: -7-