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EXHIBIT 10.4
LEASE
THIS LEASE is made and entered into this ___ day of _____________,
1993, by and between TWO YUMA PARTNERS, an Arizona general partnership
("Landlord"), and SOUTHERN ARIZONA BANK, an Arizona corporation ("Tenant").
1. PREMISES
1.1 Demise. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord those certain premises located at 8th Street and Avenue
"A", Yuma Arizona, containing approximately 2,100 square feet, together with two
(2) drive through lanes crosshatched on Exhibit "A" attached hereto and
made part hereof (the "Premises"). The Premises are part of a shopping center
constructed or to be constructed by Landlord at the northwest corner of Eighth
Street and Avenue "A", Yuma, Arizona, known as Megafoods Plaza (the "Shopping
Center").
1.2 Common Areas. Tenant shall have the right to use in common
with others entitled thereto such common additional areas of the Shopping Center
(e.g., parking areas, service roads, loading facilities, sidewalks, and other
facilities) as may be designated from time to time by Landlord (the "Common
Areas"), subject to the terms and conditions of this Lease.
1.3 Reserved Rights. Landlord reserves the right to change the
Shopping Center, including, without limitation, the size, location and number of
buildings, the location, dimension and extent of the Common Areas (including,
without limitation, the entrances, exits, parking configuration, traffic lanes
and boundaries thereof), the identity and type of other tenants, and to add land
to or withdraw land from the Shopping Center so long as none of these changes
unreasonably interfere with Tenant's business.
2. TERM
2.1 Lease Term. The term of this Lease shall be for a period of
eighty-four (84) full calendar months, plus the remainder of any partial
calendar month, in which the term of this Lease commences, unless sooner
terminated as herein provided (the "Lease Term"), together with Options to
Extend as set out in Addendum 1 hereto paragraph B.
2.2 Commencement. The Lease Term, and Tenant's obligation to
pay Minimum Monthly Rent and Additional Rent, shall commence on the earlier of
the following dates: (a) twenty (20) days following Landlord's written notice
that all work required to be performed by Landlord has been substantially
completed; or (b) the date on which Tenant shall first open the Premises for
business. A written memorandum of the commencement date shall be executed by
both parties and attached to this Lease.
3. RENTAL
3.1 Minimum Monthly Rent.
Tenant covenants to pay to Landlord, without deduction or
offset and prior to notice or demand, for the use and occupancy of the Premises
a minimum monthly rental of Two Thousand Nine Hundred Sixteen Dollars and
Sixty-six Cents ($2,916.66) payable in advance on the first day of the Lease
term and on the first day of each and every twenty-three calendar months
thereafter and Three Thousand Two Hundred Thirty Seven Dollars and Fifty Cents
($3,237.50) for every remaining calendar month during the Lease Term (the
"Minimum Monthly Rent"). Upon execution of this Lease, Tenant agrees to pay
Landlord the Minimum Monthly Rent for the first full calendar month of the Lease
Term. (See Addendum 1)
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3.2 Cost of Living Adjustment. Deleted prior to execution.
3.3 Percentage Rent. Deleted prior to execution.
3.4 Payment of Rental/Late Charges. Tenant shall pay the
rentals herein specified and all other charges to Landlord at the notice address
of Landlord set forth in Article 32 hereof or to such other person or persons
and at such other address or addresses as Landlord shall from time to time
designate in writing. A five percent (5%) late charge shall be assessed to any
payment required to be made by Tenant to Landlord under the terms of this Lease
not received within five (5) days after the due date thereof.
4. SECURITY DEPOSIT
4.1 Deposit. Tenant has deposited with Landlord
contemporaneously with the execution of this lease the sum of No Dollars ($-0-),
receipt of which is hereby acknowledged by Landlord, as security for the full
and faithful performance of each and every term and provision of this Lease.
Landlord shall not be required to maintain such funds in a segregated account,
and no interest shall be payable by Landlord thereon.
4.2 Application. If Tenant defaults in any respect hereunder,
Landlord may use, apply, or retain the whole or any part of the security deposit
for the payment of any rent in default or for any other sum which Landlord may
be required to spend by reason of Tenant's default. If any portion of said
deposit is so used or applied, Tenant shall deposit cash with Landlord in an
amount sufficient to restore the security deposit to its original amount within
five (5) days after written demand therefor. Landlord's rights with reference to
the security deposit shall be in addition to and shall no preclude any other
rights, remedies, or recoveries available to Landlord by law or under the terms
of this Lease.
4.3 Return of Deposit. Should Tenant fully and faithfully
comply with all of the terms and conditions of this Lease, the security deposit
or any balance thereof shall be returned to Tenant or, at the option of
Landlord, to the last assignee of Tenant's interest in this Lease, at the
expiration of the Lease Term.
5. TAXES
5.1 Real Estate Taxes and Assessments.
(a) Tenant covenants to pay to Landlord Tenant's Proportionate
Share (as hereinafter defined) of all real estate taxes and assessments levied
upon the Shopping Center during the Lease Term. Tenant shall pay to Landlord on
the first day of each month of the Lease Term, in advance, such amount as
Landlord shall estimate from time to time to equal one-twelfth (1/12) of
Tenant's annual obligation hereunder. Landlord shall provide Tenant an annual
reconciliation of Tenant's impound account, based upon the actual tax bills
received by Landlord, and if such reconciliation discloses a deficiency in the
amount due from Tenant, the same shall be paid by Tenant within ten (10) days
following Tenant's receipt of such reconciliation. Any excess shall be credited
to amounts next coming due.
(b) The term "real estate taxes and assessments" as used herein
shall be deemed to mean all taxes and assessments of whatsoever nature imposed
upon or levied against the real property and permanent improvements constituting
the Shopping Center, and any taxes hereafter levied or imposed in addition to or
in lieu of real estate taxes and assessments.
5.2 Rental Taxes. Tenant shall pay to Landlord, monthly in addition to
and along with the rentals otherwise Payable hereunder, a sum equal to the
aggregate of any excise, sales, use, transaction privilege or other taxes
legally levied or imposed during the Lease Term against or on account of amounts
payable hereunder by Tenant or the receipt thereof by Landlord (excluding
Landlord's income taxes).
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5.3 Personal Property Taxes. Tenant shall pay, prior to delinquency,
all taxes levied upon fixtures, furnishings, equipment and all other personal
property belonging to Tenant and placed on the Premises by Tenant. Tenant shall
cause all of such personal property of Tenant to be taxed separately from
Landlord's property.
5.4 Tenant's Proportionate Share. For purposes hereof, "Tenant's
Proportionate Share" of any tax, expense or charge shall be determined by
multiplying the same by a fraction the numerator of which is the gross floor
area of the Premises and the denominator of which is the total gross floor area
of all space leased or available for lease from Landlord in the Shopping Center
from time to time, as determined by Landlord ("Shopping Center Floor Area").
Measurements of floor area shall be calculated from the center of demising walls
and from the outside of exterior walls. Tenant's Proportionate Share shall be
11.2% at the commencement of this Lease but may increase or decrease in
accordance with this paragraph.
6. CONDITION OF THE PREMISES
The respective obligations, covenants and agreements of Landlord and
Tenant with respect to the initial construction or renovation of the Premises,
including the division of responsibilities and procedures for design and
construction and for payment of costs and expenses, are more specifically set
forth in Exhibit "B" attached hereto and incorporated herein by this
reference.
7. COMMON AREAS
7.1 Tenant's Parking. Tenant acknowledges that the Common Areas shall
remain exclusively under Landlord's control. Tenant and Tenant's employees shall
park their automobiles only in those areas designated by Landlord for employee
parking. Tenant, its employees, customers and invitee shall refrain from parking
in areas, if any, designated by Landlord for the exclusive use of a particular
tenant.
7.2 Operating Costs.
(a) Tenant covenants to pay to Landlord Tenant's Proportionate
Share of Operating Costs (as hereinafter defined) incurred by Landlord during
the Lease Term. Landlord at its discretion, shall either bill Operating Costs on
an actual expense basis per month in arrears, or by annual estimate. If billed
on actual basis, Tenant shall pay such amount monthly upon receipt of monthly
invoice. If Landlord bills by annual estimate, Tenant shall pay to Landlord on
the first day of each month of the Lease Term, in advance, such amount as
Landlord shall estimate from time to time to equal one-twelfth (1/12) of
Tenant's annual obligation hereunder. Landlord shall provide Tenant an annual
reconciliation of Tenant's impound account, based upon the actual Operating
Costs incurred by Landlord, and if such reconciliation discloses a deficiency in
the amount due from Tenant, the same shall be paid by Tenant within ten (10)
days following Tenant's receipt of such reconciliation. Any excess shall be
credited to amounts next coming due.
(b) For purposes hereof, the term "Operating Costs" shall mean the
total cost and expense paid or incurred by Landlord in operating, managing,
equipping, lighting, repairing, replacing and maintaining the Common Areas,
including, without limitation, all sums expended by Landlord for cleaning,
sweeping, restriping, seal coating, line painting, planting and landscaping,
pest control, preventive and routine maintenance, lighting, directional signs
and other markers and bumpers, sanitary control, including, without limitation,
all costs of maintaining and operating any sewer, septic, or waste disposal
installation which services the Shopping Center, trash removal, snow removal,
depreciation on machinery and equipment used in such maintenance, cost of all
utilities and services consumed or performed on the Common Areas, security
systems or guards, the cost of Personnel to implement such services, required
fees or charges levied pursuant to any governmental authority, and a management
fee to Landlord for Landlord's supervision of such expenditures equal to 10% of
the common area expenses including property taxes and insurance. Landlord shall
also have the right to include all or any portion of the cost of insurance
maintained by Landlord under paragraph 9.3 hereof as part of Operating Costs or
separate such cost and bill Tenant separately. Common area maintenance expenses,
not including property taxes or insurance, shall
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not exceed Three Hundred and No Dollars ($300.00) per month during the first
year of the Lease. Thereafter, annual increase in CAM expenses shall be based on
actual expenditures but shall not exceed five percent (5%) per year.
8. USE OF THE PREMISES
8.1 Use and Tradename. Tenant shall occupy and use the Premises
for the purposes of its banking operation under the tradename Southern Arizona
Bank and for no other purpose or purposes and under no other tradename
whatsoever.
8.2 Continuous Operation. Tenant shall continuously, during the
entire term hereof, conduct and carry on Tenant's business in the Premises and
shall keep the Premises open for business and cause Tenant's business to be
conducted therein during the usual business hours of each and every business day
as is customary for businesses of like character in the city in which the
Premises are located. Tenant's failure at any time during the Lease Term to
conduct its business in the premises for a period in excess of ten (10)
consecutive days shall, at Landlord's option, be deemed to constitute an
abandonment of the Premises.
8.3 Prohibited Activities.
(a) Tenant shall not engage in any activity which will increase the
existing premium rate of insurance on the Premises or cause a cancellation of
any insurance policy covering the Premises or any part thereof. Tenant shall not
sell, or permit to remain in or about the Premises any article that may be
prohibited by standard form fire insurance policies.
(b) Tenant shall not use the Premises for any purpose not permitted
by zoning or other local, state, or federal laws, including, but not limited to,
such laws regulating the use or disposal of hazardous material or supplies.
Tenant shall not use the Premises for or carry on or permit any offensive,
noisy, or dangerous trade, business, manufacture or occupation, or any waste or
nuisance or anything against public policy, nor interfere with the business of
any other tenant in the Shopping Center.
(c) Tenant shall not conduct or permit any auction sale to be held
on or about the Premises, whether such auction be voluntary or involuntary.
Tenant shall not display merchandise, nor permit merchandise to remain, outside
the exterior walls and permanent doorway of the Premises.
(d) Tenant shall not employ any type of sound emitting device in or
about the Premises that is audible outside the Premises, except for fire and
burglar alarms.
8.4 Compliance with Laws. Tenant shall, at Tenant's expense, promptly
comply with all laws, statutes, ordinances, rules, regulations, requirements,
covenants, conditions and restrictions now in force or which may hereafter be in
force pertaining to the use or occupancy of the Premises, including without
limitation, any federal, state or local law, statute, code, rule, regulation,
order, decree or ordinance pertaining to environmental matters.
9. INSURANCE
9.1 Waiver and Indemnification. Tenant hereby waives all claims against
Landlord for damage to goods, wares, merchandise, and equipment, in, upon or
about the Premises and for injuries to persons in or about the Premises, from
any cause whatsoever arising at any time. Tenant agrees to indemnify, defend and
hold Landlord harmless for, from and against any damage or injury to any person,
or the property of any person, arising from the possession, use, maintenance and
repair of the Premises by Tenant, any act or omission of Tenant or Tenant's
agents and employees, any default of Tenant under this Lease, or any other act
or omission which results in personal injury, loss of life or Property damage
sustained in or about the Premises.
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9.2 Tenant's Insurance.
(a) Throughout the Lease Term, Tenant shall, at Tenant's expense,
maintain comprehensive public liability insurance (including, without
limitation, products liability and contractual liability coverage for the
performance by Tenant of the indemnity agreements set forth in paragraph 9.1
above) against claims for personal injury, death, or property damage occurring
in, on, or about the Premises and on any sidewalks directly adjacent to the
Premises. The limits of liability of such insurance shall not be less than One
Million Dollars ($1,000,000.00) combined single limit or in such higher amounts
as Landlord may reasonably require.
(b) Throughout the Lease Term, Tenant shall, at Tenant's expense,
maintain fire and extended coverage (all risk) insurance upon all of Tenant's
trade fixtures, furniture, equipment, merchandise and personal property from
time to time in or upon the Premises, and upon any alterations, additional or
improvements made by Tenant pursuant to Article 10, in an amount equal to the
replacement cost thereof. Any policy proceeds shall be used for the repair or
replacement of the property damaged or destroyed. All merchandise, furniture,
floor and wall coverings and all personal property and fixtures belonging to
Tenant and all persons claiming by or through Tenant which may be on the
Premises shall be at Tenant's sole risk.
(c) Tenant shall be responsible for the maintenance of all glass
and plate glass in or a part of the Premises, but shall have the option either
to insure the risk or to self insure, provided Landlord's written consent to
self insure is previously obtained.
(d) All such policies of insurance shall be issued by such
companies as Landlord shall approve, and shall name Landlord and/or such other
party or parties as Landlord may require as additional insured. Evidence of the
issuance of such policies shall be delivered to Landlord at least ten (10) days
prior to the commencement of the term of this Lease and Tenant shall obtain a
written commitment on the part of each insurance underwriter to notify Landlord
in writing at least thirty (30) days prior to any cancellation, expiration or
modification thereof.
9.3 Landlord's Insurance. Landlord shall maintain comprehensive general
public liability insurance against claims for personal injury, death, or
property damage occurring on the Common Areas, fire and extended coverage (all
risk) insurance on the buildings and improvements constituting the Shopping
Center, and such other insurance as Landlord deems reasonably necessary for the
operation of the Shopping Center, including without limitation loss of rents
insurance. The limits of liability of such insurance shall be in such amounts as
Landlord shall determine. Landlord shall have the option to include such
insurance in so-called "blanket policies." Tenant shall pay to Landlord Tenant's
Proportionate Share of the cost of all such insurance maintained by Landlord
within ten (10) days after written demand is sent by Landlord to Tenant
accompanied by the insurance premium notice and evidence of the amount due.
Notwithstanding the foregoing, Landlord shall have the right at its option to
include the cost of such insurance as part of Operating Costs pursuant to
paragraph 7.2 hereof.
9.4 Waiver of Subrogation. Tenant hereby waives any right of recovery
from Landlord, Landlord's officers or employees, and Landlord hereby waives any
right of recovery from Tenant, Tenant's officers or employees, for any loss or
damage (including consequential loss) resulting from any of the perils insured
against by either's fire and extended coverage insurance policy to the extent of
all proceeds thereof. The parties shall give their respective insurance carriers
notice of this waiver and secure a subrogation waiver endorsement from each
carrier.
10. ALTERATIONS
After the construction of the initial improvements to the Premises,
Tenant shall not make any alterations, additions or improvements to the
Premises, or any part thereof, including, without limitation, penetrations of
the roof, without the prior written consent of Landlord, and subject to such
conditions as Landlord
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shall impose in connection with such consent. Any such alterations, additional
or improvements to the Premises, except movable furniture and trade fixtures,
shall become at once a part of the realty and belong to Landlord.
11. MAINTENANCE AND SANITATION
11.1 Landlord Maintenance. Landlord shall maintain the off-premises
plumbing, off-premises electrical and other off-premises facilities serving the
Premises. Landlord shall maintain the roof and structural portions of the
Premises and Tenant agrees to reimburse Landlord for repairs to roof caused by
Tenant's roof penetrations and for structural repairs caused by Tenant's
construction, maintenance or repair activity. Tenant hereby waives all right to
make repairs at the expense of Landlord.
11.2 Maintenance of Premises. Tenant shall, at its sole cost and
expense, keep the Premises clean, sanitary, safe and in a good state of repair,
including, without limitation, windows, glass, plate glass, store front, doors,
door closures, demising walls, ceiling, floor covering, plumbing pipes and
fixtures, electrical panels, wiring, switches and conduits and all mechanical
equipment, including, without limitation, all heating, ventilation and air
conditioning equipment and other fixtures or equipment whether inside or outside
the Premises. Landlord shall have the right to contract for periodic servicing
and maintenance of the heating, ventilation and air conditioning equipment and
Tenant agrees to reimburse Landlord for the cost thereof upon receipt of a
statement. Prior to beginning any repair or replacement of heating, ventilation
and air conditioning equipment, or exterior portions of the Premises, Tenant
shall notify Landlord and obtain Landlord's approval thereof. Tenant may not
paid, change or modify in any manner the exterior of the Premises without first
securing the written consent of Landlord.
11.3 Landlord's Right to Repair. If Landlord reasonably considers that
some item of maintenance or repair is needed, Landlord shall so notify Tenant in
writing, and Tenant shall promptly effect such maintenance or repair. If Tenant
should fail to effect such maintenance or repair within a reasonable time,
Landlord shall have the right to effect such maintenance or repair, and Tenant
shall reimburse Landlord the cost thereof plus a reasonable administrative
charge for Landlord' supervision thereof promptly upon receipt of a billing from
Landlord.
11.4 Sanitation. If required by the Health Department or requested by
Landlord, Tenant shall provide and maintain sanitary receptacles approved by
Landlord in and about the interior and exterior of the Premises in which to
place any refuse or trash, and Tenant shall cause such refuse or trash to be
removed from the area as often as required to maintain a sanitary condition, but
in no event less often than twice weekly. Tenant shall sweep as needed and keep
free of refuse the sidewalks and areas immediately adjacent to the Premises.
12. DAMAGE AND DESTRUCTION OF PREMISES
12.1 Obligation to Repair. In the event of damage or destruction of the
Premises during the Lease Term, subject to paragraph 12.2 below, Landlord shall
commence to make said repairs within thirty (30) days of written notice from
Tenant of the necessity therefor. No such damage or destruction shall annul or
void this Lease except that Tenant shall be entitled to a proportionate
reduction of Minimum Monthly Rent while such repairs are being made, based upon
the extent to which the making of such repairs shall interfere with the business
carried on by Tenant in the Premises.
12.2 Election to Terminate. If (a) the Premises are damaged or
destroyed to an extent of more than twenty-five percent (25%) of their then
replacement cost; (b) the Premises are damaged during the last two (2) years of
the Lease Term; (c) the Premises are damaged or destroyed as a result of a
casualty not insured against; or (d) fifty percent (50%) or more of the gross
floor area of the buildings in the Shopping Center are damaged, whether or not
the Premises are affected thereby, then, in any such event, Landlord may, within
ninety (90) days following the date of any such occurrence, cancel and terminate
this Lease by written notice to Tenant, whereupon all rents shall be prorated as
of the date of damage, Tenant shall vacate the Premises and surrender the same
to Landlord and Landlord shall without further action, be released from any
further obligations or liabilities to Tenant. If Landlord does not so elect to
terminate this Lease, Landlord shall rebuild and repair the Premises with due
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diligence, this Lease shall continue in full force and effect, and the Minimum
Monthly Rent shall be proportionately reduced as hereinabove provided.
12.3 Repair Obligations. Landlord's obligation to repair or rebuild
under this Article 12 shall extend only to those portions of the Premises that
were originally provided at Landlord's expense and Tenant shall, at its expense,
promptly repair and/or restore Tenant's personal property and those portions of
the Premises not originally provided at Landlord's expense. Landlord shall not
be obligated to make repairs to the extent that the cost thereof exceeds the
insurance proceeds available to the Landlord therefor.
12.4 Waiver. With respect to any damage which Landlord is obligated or
may elect to repair under the terms of this Article 12, Tenant waives any
statutory or other right Tenant may have to cancel this Lease as a result of
such damage, unless Landlord elects not to repair any such damage and then in
such event Tenant may terminate this lease and be released from any further
liabilities or obligations hereunder.
13. EMINENT DOMAIN
13.1 Condemnation of Premises.
(a) If the whole of the Premises shall be acquired or condemned by
eminent domain for any public or quasi-public use or purpose, or in the event of
sale in lieu thereof, or if any part of the Premises shall be so taken which
taking renders the Premises unsuitable for the business of Tenant, then the term
of this Lease shall cease and terminate as of the date of title vesting in such
proceeding or sale and all rentals shall be paid up to that date.
(b) In the event of a partial taking or condemnation which is not
extensive enough to render the Premises unsuitable for the business of the
Tenant, Landlord, to the extent proceeds of condemnation are available therefor,
shall promptly restore the Premises to a condition comparable to its condition
at the time of such condemnation less the portion lost in the taking, this lease
shall continue in full force and effect, and the Minimum Monthly Rent shall be
reduced in the proportion that the rental value of the Premises after such
taking bears to the rental value before such taking.
13.2 Condemnation of Shopping Center. In the event more than
twenty-five percent (25%) of the gross floor area of the entire Shopping Center
is acquired under said power of eminent domain or by sale in lieu thereof,
whether or not any portion of the Premises is taken, or in the event all or any
portion of the parking area of the Shopping Center is so taken which reduces the
ration of parking area to building area below the minimum requirement of the
governmental authority having jurisdiction, Landlord shall have the right to
terminate this Lease as of the date of title vesting in such proceeding or sale
by giving Tenant written notice within thirty (30) days after Landlord has been
notified of such appropriation.
13.3 Condemnation Award. In the event of any condemnation or taking as
hereinbefore provided, whether whole or partial, Landlord is to receive the full
amount of such award, Tenant hereby expressly waiving any right or claim to any
part thereof; provided, however, Tenant shall have the right to assert a claim
against the condemning authority in a separate action and so long as Landlord's
award is not reduced by such claim, for fixtures and improvements installed by
Tenant at its expense, interruption of or damage to Tenant's business, or
Tenant's moving expenses.
14. FIXTURES
Tenant shall provide, install and maintain, at Tenant's expense,
fixtures of a special nature that may be required for Tenant's business. All
such fixtures that are not permanently affixed to the Premises shall remain the
property of Tenant and may be removed by Tenant not later than the end of the
Lease Term, provided that Tenant is not then in default hereunder and that
Tenant shall promptly repair, at its expense, any damage occasioned by
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such removal. All other fixtures, equipment and other property (including,
without limitation, air conditioning units, heating equipment, plumbing
fixtures, hot water heaters, wall coverings, carpeting or other floor coverings
cemented or otherwise affixed to the floor, and window coverings) that may be
installed in the Premises by Tenant shall, at the end of the lease Term, become
the property of Landlord and remain upon and be surrendered with the Premises,
without disturbance, molestation or injury. Except Landlord agrees that Tenant
may remove vault, automatic teller machines, night depository and any security
equipment which has been installed by Tenant. Any structural damage caused by
the removal of these items shall be repaired by Tenant.
15. FREE FROM LIENS
Tenant shall keep the Premises and the Shopping Center free from any
liens arising out of work performed, material furnished or incurred due to
Tenant's actions and shall indemnify and hold Landlord harmless from all such
liens or claims of liens and all attorneys' fees and other costs and expenses
incurred by reason thereof. Notice is hereby given that neither Landlord nor
Landlord's interest in the Premises shall be liable or responsible to persons
who furnish material or labor for or in connection with such work.
16. MERCHANTS' ASSOCIATION Deleted prior to execution.
17. SIGNS
Tenant shall not erect or place any sign, lettering, design, banner,
decoration, exterior lighting or other advertising devise or material either
outside the Premises or inside the Premises if visible from outside the
Premises, without the prior written approval of Landlord. Notwithstanding the
foregoing, Tenant agrees to install not later than thirty (30) days following
commencement of the Lease Term, at Tenant's expense, an identification sign for
the Premises complying with all applicable governmental ordinances, approved in
advance by Landlord and conforming in all respects to the sign criteria
established for the Shopping Center. (Tenant's initials herein shall acknowledge
receipt of such sign criteria. _____) All expenses in connection with the
operation and maintenance of such sign shall be paid by Tenant. Any signs of
Tenant not in conformity with this Lease, and any signs remaining at the end of
the Lease Term, shall upon Landlord's demand forthwith be removed by Tenant at
its expense, and Tenant shall promptly repair any damage to the Premises
resulting from such removal.
18. COMPETITION Deleted prior to execution.
19. UTILITIES
Tenant shall pay before delinquency all charges for water, gas, heat,
electricity, power, telephone service, trash removal, and all other services or
utilities used in, upon, or about the premises by Tenant or any of Tenant's
subtenants, licensees, or concessionaires during the Lease Term. Landlord shall
not be liable in damages or otherwise nor shall Tenant be entitled to terminate
this Lease in the event of any failure or interruption of any utility supplied
to the Premises or Shopping Center.
20. ENTRY AND INSPECTION
Tenant shall permit Landlord and Landlord's agents to enter into and
upon the premises at all reasonable times for the purposes of inspecting the
same, making repairs, alterations or additions, posting notices of
non-liability, exhibiting the Premises to prospective lenders, purchasers or
tenants, or for any other lawful purpose. Landlord shall be permitted to do any
of the above without any abatement of rent and without any liability to Tenant
for any loss of occupation or quiet enjoyment of the Premises thereby
occasioned. If Tenant shall not be personally present to open and permit an
entry into the Premises, at any time, when for any reason an entry therein shall
be necessary or permissible, Landlord or Landlord's agents may forcibly enter
the same, without rendering Landlord or such agents liable therefor, and without
in any manner affecting the obligations and covenants of Tenant contained in
this Lease.
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21. ASSIGNMENT AND SUBLETTING
21.1 Consent Required. Tenant shall not assign this Lease, or any
interest therein, and shall not sublet the Premises or any part thereof, without
the prior written consent of Landlord, which consent may be withheld in
Landlord's reasonably exercised discretion. Consent by Landlord to one
assignment or subletting shall be deemed to be a consent to any subsequent
assignment or subletting. Consent to an assignment shall release the original
named Tenant from liability under this Lease. Any assignment or subletting
without the prior written consent of Landlord shall be void, and shall, at the
option of Landlord, constitute a default hereunder.
21.2 Corporate and Other Transfers. If Tenant is a corporation, an
unincorporated association or a partnership, the transfer, assignment or
hypothecation of any stock or interest therein aggregating in excess of
seventy-five (75%) shall be deemed an assignment of this Lease for purposes
hereof.
21.3 No Merger. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at
the option of Landlord, terminate all or any existing subleases, or may, at the
option of Landlord, operate as an assignment to Landlord of any or all of such
subleases.
22. SALE OF PREMISES BY LANDLORD
In the event of any sale of the Premises or the Shopping Center by
Landlord, or assignment of this Lease, Landlord shall be and is hereby entirely
freed and relieved of all liability under any and all of the Landlord's
covenants and obligations contained in this Lease arising thereafter, and the
purchaser or assignee at such sale of the premises or the Shopping Center or
assignment of this Lease, shall be deemed, without any further agreement between
the parties and any such purchaser or assignee, to have assumed and agreed to
carry out any and all of the covenants and obligations of the Landlord under
this Lease
23. SURRENDER OF PREMISES
At the expiration or earlier termination of this Lease, Tenant shall
surrender the Premises in good order and condition, clean and free of refuse,
reasonable wear and tear excepted, and shall deliver all keys to Landlord.
Before surrendering the Premises, Tenant shall remove all of its signs, personal
property and trade fixtures and such alterations or additions to the Premises
made by Tenant as may be specified by Lender for removal thereof. If Tenant
fails to remove its personal property and fixtures at the end of the Lease Term,
such property shall, at Landlord's option, be deemed abandoned and shall become
the property of Landlord. Should Tenant not promptly surrender the Premises as
required above, Landlord shall have the option, in addition to any other rights
and remedies it may have, to apply the security deposit as provided herein
toward the expense of removal of signs, personal property and trade fixtures,
cleaning and repairs.
24. HOLDING OVER
If Tenant shall hold over after the term of this Lease, or any
extension thereof, Tenant shall become a tenant on a month-to-month basis at a
minimum rental equal to one and one-half times the amount of Minimum Monthly
Rent payable hereunder for the last full calendar month of the lease Term, and
upon all the terms, covenants and conditions herein specified, including the
provisions relative to percentage rental, but exclusive of any renewal options.
Nothing contained herein shall be deemed the consent of Landlord to any such
holding over.
25. DEFAULT
25.1 Events of Default. The occurrence of any of the following shall
constitute a default of Tenant under this Lease
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(a) the failure of Tenant to pay any installment of Minimum
Monthly Rent, percentage rent or any other sum or charge or any part thereof,
required by this Lease to be paid to Landlord, within ten (10) days after the
date of notice of delinquency.
(b) the failure of Tenant to perform any nonmonetary obligation
contained in this Lease which failure shall continue for twenty (20) days after
notice thereof from Landlord to Tenant;
(c) the filing of a petition or the commencement of proceedings
under any federal or state bankruptcy law by or against Tenant or any guarantor
of this Lease, and if against Tenant or any guarantor, said proceedings shall
not be dismissed within thirty (30) days following commencement thereof;
(d) the adjudication of insolvency, the making of a general
assignment for the benefit of creditors or the entering into of an arrangement
with creditors by Tenant or any guarantor of this Lease;
(e) the levy of a writ of attachment or execution on the leasehold
estate hereby created which is not related or satisfied within thirty (30) days
thereafter;
(f) the appointment of a receiver in any proceeding or action to
which Tenant is a party with authority to take possession or control of the
Premises or the business conducted thereon by Tenant or the property of any
guarantor of this Lease, which appointment is not discharged within thirty (30)
days thereafter.
(g) the failure of Tenant upon notice from Landlord to promptly
commence and diligently complete the fixturization of the Premises or to perform
any other obligation to be performed prior to the commencement of the lease
Term; and/or
(h) the abandonment of the Premises.
25.2 Remedies Upon Default. Upon a default of Tenant as defined in
paragraph 25.1 above, Landlord, in addition to any other rights or remedies it
may have hereunder or at law or in equity, shall have the immediate right
without any further demand or notice, to pursue any one or more of the following
remedies:
(a) re-enter the Premises and remove all persons and Property
therefrom, using all reasonable force necessary so to do without liability to
any person for damages sustained by reason of such removal;
(b) lock the doors to the Premises and exclude Tenant therefrom;
(c) retain or take possession of any property belonging to Tenant
upon the Premises pursuant to Landlord's statutory landlord lien. Such property
may be removed and stored in a Public warehouse or elsewhere at the cost of and
for the account of Tenant, without liability to any person for damages sustained
by reason of such removal or storage;
(d) render such performance required of Tenant, other than the
payment of rent, and charge all costs and expenses incurred in connection
therewith to Tenant, which amounts so charged shall be due and payable
immediately from Tenant to Landlord upon demand;
(e) terminate this Lease by written notice to Tenant. In the event
of such termination, Tenant agrees to immediately surrender possession of the
Premises. Should Landlord terminate this Lease, Tenant shall have no further
interest in this Lease or in the Premises, and Landlord may recover from Tenant
all damages Landlord may incur by reason of Tenant's breach, including the cost
of recovering the Premises, reasonable attorneys' fees, and the value at the
time of such termination of the excess, if any, of the amount of rent and
charges equivalent to rent reserved in this Lease for the remainder of the Lease
Term over the then reasonable rental value
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of the Premises for the remainder of the Lease Term, all of which amounts shall
be immediately due and payable from Tenant to Landlord upon demand;
(f) without termination of this Lease, bring an action or actions
to recover from Tenant all rent and other sums and charges reserved hereunder as
the same become due and payable from time to time; and/or
(g) without termination of this Lease, attempt to relet the
Premises or any part thereof (but without any obligation so to do on the part of
Landlord), as agent and for the account of Tenant, for such term (which may be
for a term extending beyond the Lease Term) and at such rental and upon such
other terms and conditions as Landlord, in its sole discretion, may deem
advisable, with the right to make alterations and repairs to the Premises the
expenses of which shall constitute an indebtedness from Tenant to Landlord,
immediately payable. In the event of such reletting, the rents received by
Landlord from such reletting shall be applied first, to the payment of any costs
and expenses of such reletting and of such alterations and repairs; second, to
the payment of rent due and unpaid hereunder; and the residue, if any, shall be
held by Landlord and applied in payment of future rent as the same may become
due and payable hereunder. If the rents received from such reletting during any
month be less than that to be paid during that month by Tenant hereunder, Tenant
shall pay any such deficiency to Landlord. Such deficiency shall be calculated
and paid monthly and Landlord may bring an action therefor as such monthly
deficiencies may arise. Notwithstanding any such reletting without termination,
Landlord may at any time thereafter, elect to terminate this Lease for such
previous breach.
(h) without termination of this Lease, terminate Tenant's right to
possession only and Landlord may, at Landlord's option, enter into the premises,
remove Tenant's signs and other evidences of tenancy, and take and hold
possession thereof as provided in subparagraph (c) above without such entry and
possession terminating the lease or releasing Tenant, in whole or in part, from
any obligation, including Tenant's obligation to pay the rent and such other
charges as shall become due hereunder for the full Lease Term. In any such case
Tenant shall pay forthwith to Landlord, if Landlord so elects, a sum equal to
the entire amount of the Rent and other sums and charges reserved hereunder, for
the remainder of the Lease Term. In the event Landlord relets the Premises or
any part thereof as provided in subparagraph (g) above after being paid rent and
other charges for the full Lease Term by Tenant, Landlord shall, upon written
request by Tenant at the end of the Lease Term, refund to Tenant a sum equal to
the rent and other charges received from the new Tenant, less any costs and
expenses of reletting and the costs of alterations and repairs to the premises.
25.3 No Acceptance of Surrender. No act or conduct of Landlord shall be
deemed to be or constitute an acceptance of the surrender of the Premises by
Landlord or an election to terminate this Lease except a written acknowledgment
of acceptance of surrender or notice of election to terminate signed by
Landlord.
25.4 Limitation of Remedies. Tenant agrees that it shall look solely to
the estate and property of Landlord in the land and buildings constituting the
Shopping Center, and subject to prior rights of any mortgagee of the Shopping
Center or any part thereof, for the collection of any judgment (or other
judicial process) requiring the payment of money by Landlord in the event of any
default or breach by Landlord with respect to any of the provisions of this
Lease, and no other assets of Landlord shall be subject to levy, execution or
other procedures for the satisfaction of Tenant's remedies.
25.5 Landlord Default, Notice. Landlord shall in no event be charged
with default in any of its obligations hereunder unless and until Landlord shall
have failed to perform such obligations within thirty (30) days (or such
additional time as is reasonably required to correct any such default) after
written notice to Landlord by Tenant, specifically describing such failure.
25.6 Notice to Lender. In the event of a default by Landlord under this
Lease, Tenant, prior to exercising any remedies with respect thereto, shall give
the holder of the mortgage ("lender") written notice of the alleged default and
shall not take any action with respect to such alleged default if lender cures
such default within
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thirty (30) days after receipt of written notice from Tenant of Landlord's
failure so to do; provided, however, that such thirty (30) day period shall be
extended so long as:
(a) within such thirty (30) day period lender has commenced to
cure and is proceeding with due diligence to cure said default, or
(b) lender is proceeding with a foreclosure action against
Landlord and agrees to commence to cure and will proceed with due diligence to
cure such default upon the resolution of such foreclosure action.
25.7 Tenant's Remedies. In the event Landlord defaults in any of its
obligations hereunder, Tenant shall have the right (after due notice to
Landlord) to fulfill Landlord's obligation on its behalf and further to withhold
and offset an equal amount from the Minimum Rent next due.
26. ESTOPPEL CERTIFICATES
Tenant agrees at any time within five (5) days following Landlord's
written request, to execute, acknowledge and deliver to Landlord an estoppel
certificate certifying as to such matters relating to this Lease as Landlord or
any prospective purchaser or lender shall reasonably require. It is intended
that any such statement delivered pursuant to this Article may be relied upon by
any prospective purchaser, mortgagee or assignee of any mortgagee of the
Premises or the Shopping Center.
27. SUBORDINATION/ATTORNMENT
Tenant's interest under this Lease is and shall be subordinate to the
lien of any ground lease, deed of trust, mortgage or other security device
(hereinafter collectively referred to as "mortgage") now or hereafter placed on
the Landlord's interest in the Premises or on all or any portion of the Shopping
Center, unless Landlord, in its sole discretion, shall require that this Lease
be superior to any such mortgage. The subordination provided for in this Article
shall be self-operative; provided, however, Tenant agrees to execute and deliver
such further instrument(s) to subordinate this Lease to the lien of any such
mortgage as Landlord shall require, within five (5) days following Landlord's
written demand. If the Premises or the Shopping Center shall be sold pursuant to
default under the mortgage, Tenant shall not disaffirm this Lease but shall
attorn to the mortgagee or purchaser.
28. LENDER LIABILITY
Tenant agrees that lender shall not be:
(a) liable for any act or omission of Landlord or any other prior
landlord; or
(b) subject to any offsets or defenses which Tenant might have
against Landlord or any other prior landlord; or
(c) bound by any rent or additional rent which Tenant might have
paid for more than the current month to Landlord or any other prior landlord; or
(d) liable for the return of any security deposit except to the
extent such deposit is actually received by lender from Landlord.
29. RULES AND REGULATIONS
Tenant agrees to observe and comply with all Rules and Regulations of
the Shopping Center reasonably imposed by Landlord from time to time for the
proper enjoyment, cleanliness, appearance, maintenance and reasonable use of the
Premises and the Shopping Center. Such Rules and Regulations, and any
modifications
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thereof, shall be effective upon notice thereof to Tenant, and a breach thereof
shall constitute a default by Tenant under this Lease. Landlord shall not be
responsible to Tenant for any violation of such Rules and Regulations by other
tenants or occupants of the Shopping Center, and Landlord may waive any of such
Rules and Regulations for the benefit of any particular tenant.
30. BROKER'S COMMISSIONS
Tenant represents and warrants that there are no claims for brokerage
commissions or finder's fees in connection with this Lease (excepting
commissions or fees approved or authorized in writing by Landlord) and agrees to
indemnify Landlord against and hold it harmless from all liabilities arising
from any such claim, including any attorneys' fees connected therewith.
31. QUIET ENJOYMENT
Landlord covenants that upon Tenant's paying the rentals and keeping
and performing all of the terms, covenants and conditions of this Lease,
Landlord will do nothing that will prevent Tenant from peaceably and quietly
enjoying, holding and occupying the Premises during the Lease Term. This
covenant shall not extend to any disturbance, act or condition brought about by
any other tenant in the Shopping Center and shall be subject to the rights of
Landlord set forth in this Lease. This Lease is subject to any covenants,
conditions, restrictions or easements now or hereafter of record affecting all
or any portion of the Shopping Center.
32. NOTICES
Notices or demands under this Lease shall not be deemed to have been
duly given or served unless in writing and served per forwarded by certified
mail, return receipt requested, postage prepaid, addressed as follows:
TO LANDLORD: TWO YUMA PARTNERS
5112 North 40th Street, Suite 203
Phoenix, Arizona 85018
With a copy to: Mr. Jamie Brody, Esq.
ANDERSON, BRODY, LEVINSON, WEISER & HORWITZ
1112 W. Camelback Rd.
Phoenix, AZ 85013-2190
TO TENANT: SOUTHERN ARIZONA BANK
3218 S. 4th Avenue
Yuma, AZ 85365
Attention: Temple Moore
; or
At the Premises from and after the commencement of the Lease Term.
Either party may change such address by written notice to the other. Service of
any notice or demand shall be deemed completed forty-eight (48) hours after
deposit thereof in the United States Postal Service or, if delivered in person,
upon receipt thereof.
33. GENERAL PROVISIONS
33.1 Governing Law. This Lease shall be construed in accordance with
the laws of the State of Arizona.
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33.2 Joint and Several Liability. If Tenant shall be more than one
party, then the obligations of such parties shall be joint and several, and
notice to any one such party shall be deemed notice to Tenant for purposes of
this Lease.
33.3 Invalidity. If any term, covenant, condition or provision of this
Lease is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the provisions hereof shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
33.4 Time. Time is of the essence of this Lease.
33.5 No Recording of Lease. In no event shall Tenant record this Lease,
and the breach of this covenant shall be deemed a noncurable default hereunder.
33.6 Attorneys' Fees. In the event either party initiates legal
proceedings to enforce any right or obligation under this Lease or to obtain
relief for the breach of any covenant hereof, the Party prevailing in such
proceedings shall be entitled to recover from the defaulting party the costs of
such proceedings, including reasonable attorneys' fees as determined by the
court and not by a jury.
33.7 Entire Agreement. This Lease sets forth all the covenants,
promises, agreements, conditions or undertakings, either oral or written,
between Landlord and Tenant, and there are no warranties or representations
between the parties, express or implied, except as are expressly set forth in
this Lease.
33.8 Amendment. Except as herein otherwise provided, no modification or
amendment to this Lease shall be binding upon Landlord or Tenant unless reduced
to writing and signed by both parties.
33.9 Successors and Assigns. The covenants herein contained shall,
subject to the provisions as to assignment and subletting, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
33.10 No Accord and Satisfaction. The acceptance or endorsement by
Landlord of any payment or check from Tenant shall not be deemed an accord and
satisfaction and shall not prejudice Landlord's right to recover the balance of
any amounts due under the terms of this Lease, unless otherwise expressly agreed
by Landlord in writing.
33.11 No Waiver. No delay or omission of Landlord to exercise any right
or power arising from any default shall impair any such right or power, or shall
be construed to be a waiver of any such default or an acquiescence therein. No
waiver by either party of the breach of any covenant of this Lease by the other
party shall be deemed effective unless in writing signed by the waiving party.
33.12 Mutual Cancellation Date. In the event the Premises are not
completed and possession tendered to Tenant on or before two (2) years from the
date of this Lease, either Landlord or Tenant shall have the right to terminate
this Lease by written notice to the other given at any time thereafter but prior
to such tender of possession, whereupon this Lease shall be deemed null and
void, and the parties shall have no further obligations to one another
hereunder.
33.13 Net Rent. The minimum Monthly Rent is a "net" rent to Landlord,
and all percentage rent and additional rents, taxes and assessments, maintenance
costs, insurance and other sums payable by Tenant hereunder (which amounts shall
be deemed rent whether or not expressly designated as such), shall be paid in
addition to the Minimum Monthly Rent at the times and in the manner provided
herein.
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IN WITNESS WHEREOF, the parties have executed this Lease as of the day
and year first above written.
TENANT: LANDLORD:
SOUTHERN ARIZONA BANK, an Arizona TWO YUMA PARTNERS an Arizona general
corporation partnership
By: By:
----------------------------- --------------------------------
Its: Its:
----------------------------- --------------------------------
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ADDENDUM 1
1. FREE RENT. Notwithstanding the provision of Paragraph 3.1 Tenant shall
enjoy the use of the premises free of the minimum monthly rent during
the first sixty (60) days from the commencement date of the Lease.
2. OPTIONS. At the expiration of the term herein demised, and at the
expiration of each option period, if immediately prior thereto this
Lease shall be in force and effect and the Tenant shall not be in
default at the time, then, subject to the provisions of this paragraph,
the Tenant shall have and hereby is given the option to renew and
extend this Lease for three (3) additional terms of five (5) years each
to commence on the expiration of the original lease term or option
period, as the case may be, or until said renewal terms shall sooner
cease and expire under the provisions of this Lease, upon the same
terms, covenants, and conditions, as those herein contained, insofar as
then in force and applicable to such renewal term (including all
provisions as to the items of the payment of additional rent) except as
to the amount of the fixed rent and except that the third renewal shall
not contain a provision for a further renewal. The said renewal shall
be exercised by the Tenant in the manner following:
By not later than the one hundred eighty (180) days prior to
the date of the option being exercised, the Tenant shall notify
the Landlord in writing that the Tenant desires arbitration,
pursuant to the provision of this paragraph, to determine fix
and the minimum rent for the renewal term, if the Tenant shall
elect to renew, as hereinafter provided. Landlord shall provide
Tenant with the proposed minimum rental rate to be paid during
the option period within ten (10) days of Landlord's receipt of
Tenant's notice. If within thirty (30) days after such notice
the parties are unable to agree the rent, the proceedings in
such arbitration to determine such rent shall be commenced and
the arbitration proceedings shall be completed and the
determination of such rent made not later than the thirty (30)
days prior to the date the option term is to commence. After
the determination of such rent in such arbitration proceedings,
and the giving of notice thereof to the Tenant, the Tenant
shall, not later than ten (10) days thereafter have the option,
right and privilege to notify the Landlord in writing that the
Tenant elects to renew this Lease upon the rent fixed in such
arbitration proceedings. Upon the Tenant's so notifying the
Landlord, then this Lease, without further action shall be
deemed and hereby is declared to be renewed for an additional
term of five (5) years.
In such arbitration, the fixed annual rent shall not be less
than the rent paid in the previous twelve (12) months or such
lesser amount as may have been determined by reason of a pro
rata reduction in the fixed annual rental resulting from a
partial taking of the demised premises in condemnation
proceedings.
In the event that the Tenant exercises its option to renew this
Lease, the costs of the arbitration shall be shared equally
between the parties. In the event, however, that after the
arbitration the Tenant does not exercise its right to renew
this Lease, the entire cost of the arbitration shall be borne
by the Tenant. Prior to the commencement of the arbitration and
at the time of the service by the Tenant of notice of its
desire to arbitrate, the Tenant shall deposit with the Landlord
an amount equal to seventy-five percent (75%) of the estimated
cost of the arbitration, including reasonable counsel fees for
the Landlord's attorney.
If this Lease be renewed as herein provided, all rights of the
Tenant in its personal property and trade fixtures shall
survive.
3. ARBITRATION. NOTICE: BY INITIALLING IN THE SPACE BELOW YOU ARE AGREEING
TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE
"ARBITRATION OF
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DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY STATE
LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE
DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALLING IN THE SPACE
BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL,
UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF
DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE. YOUR
AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
Any dispute, controversy or claim regarding the terms and
conditions of this Lease shall be submitted to and settled by binding
arbitration in the City in which the premises are located pursuant to
the commercial rules of the American Arbitration Association then in
effect (or at any other place or under any other form of arbitration
mutually acceptable to the parties). Notwithstanding the foregoing, and
notwithstanding any rules of the American Arbitration Association to
the contrary, the parties agree that following shall apply and govern
in connection with any arbitration proceeding pursuant to this
paragraph.
a. A panel of three (3) arbitrators ("Arbitrators") shall
render the arbitration decision. Each at their own cost, Landlord and
Tenant each shall select one Arbitrator and pay such Arbitrator's fee
and shall immediately notify the other of the Arbitrator so selected.
Such selections shall be made within ten (10) days after the date on
which an arbitration proceeding is initiated under this Paragraph 63.
The two Arbitrators so selected shall select a third Arbitrator.
Landlord and Tenant each shall bear one-half (1/2) of the cost of
selecting the third Arbitrator and of paying the third Arbitrator's
fee. No Arbitrator, however selected, shall be a person who is or who
has been a principal or owner or an agent or employee of either
Landlord or Tenant. In the event the two Arbitrators are unable to
agree upon the selection of a third Arbitrator, the two Arbitrators
shall, within five (5) days after the date on which they agree they are
unable to agree on a third Arbitrator, request the Superior Court
having jurisdiction to appoint the third Arbitrator.
b. The Arizona Evidence Code, Code of Civil Procedures and
Rules of Court shall apply, including any and all provisions of such
Codes and Rules with respect to discovery.
c. Any arbitration decision shall be in writing, with the
basis of such decision specified in reasonable detail.
d. Each party shall submit to the other party, not less than
five (5) business days (or such longer period as the Arbitrators may
specify) prior to the commencement of the arbitration hearing, (i) a
list of the persons whose testimony the other party intends to elicit
at the arbitration hearing and a summary description of the substance
of their expected testimony, (ii) copies of any and all documents to be
offered into evidence, and (iii) a description in reasonable detail of
any other evidence such party intends to offer into evidence. The
foregoing shall not limit the parties' rights to such other discovery
as may be permitted pursuant to state laws.
Any award rendered shall be final, binding, and non-appealable
and conclusive upon the parties and a judgment thereon may be entered
in the highest court of the state forum having jurisdiction over the
subject matter of such arbitration. Except as set forth above with
respect to the Arbitrators' fees, the expenses of the arbitration shall
be borne equally by the parties to the arbitration, provided that each
party shall pay for and bear the cost of its own experts, evidence and
counsel's fees; and
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION TO NEUTRAL ARBITRATION.
Landlord's Initials Tenant's Initials
------------------- -------------------
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4. CONTINGENCY. This Lease is conditional upon the Landlord obtaining a
conditional use permit from the City of Yuma permitting the operation
of two (2) drive through lanes. Tenant shall use its best endeavors to
support Landlord's application. In the event such use permit has not
been obtained within one hundred twenty (120) days after the date of
this Lease, either party may thereafter terminate this Lease by notice
in writing given to the other, whereupon this Lease shall be deemed
void ab initio.
5. TENANT IMPROVEMENT ALLOWANCE. In addition to Landlord's work as
identified in Exhibit B, Landlord will provide Tenant with an
Improvement Allowance of Ten Thousand and No ($10,000.00) Dollars. Said
allowance to be paid to Tenant within ten (10) days of Tenant opening
for business. Tenant's obligations under Paragraph 15, FREE FROM LIENS
shall extend to this Improvement Allowance.
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EXHIBIT "B"
PROVISIONS RELATING TO CONSTRUCTION
1. When Tenant's Architect has completed Tenant Improvement drawings, Tenant and
Landlord shall approve said drawings within seven (7) days.
2. The fact that Tenant may enter into possession prior to the substantial
completion of Landlord's Work for the purpose of performing Tenant's Work shall
not be deemed an acceptance by Tenant of substantial completion of the Premises,
but in such event Tenant shall indemnify and hold Landlord harmless for any loss
or damage to Tenant's property, fixtures, equipment and merchandise and for
injury to any persons, unless same be caused by the active negligence of
Landlord or its agents.
3. The cost of obtaining any building permit for the Premises shall be paid by
Landlord. The cost of obtaining any building permit for Tenant's tenant
improvement work shall be paid by Tenant.
DESCRIPTION OF LANDLORD'S WORK
The following is a description of the construction, and limitations of same,
which will be provided by Landlord and herein referred to as "Landlord's Work"
which shall be performed in substantial completion with the plans approved by
both Tenant and Landlord.
LANDLORD SHALL PROVIDE THE FOLLOWING IMPROVEMENTS:
1. Electrical service panel: 200 amp service, 120/208 V.
2. Restroom: Two, located at rear wall in an area designated by
Landlord provided with one toilet, one lavatory, exhaust fan, and one standard
light fixture.
3. Ceiling: Suspended T-bar, acoustical; over 100% of the gross floor
area; sheetrock ceiling in restroom.
4. Floor Coverings: Restrooms only. Color selection by Tenant.
5. Walls: Drywall over metal stud, or exposed masonry wall, as
designated by Landlord per plan.
6. Electrical: Per plan.
7. Lighting: 2 x 4 drop in - panel switched, per plan.
8. Sign Outlet: One, location designated by Landlord.
9. Telephone Outlets: One. Per plan.
10. Air Conditioning and Heating: Refrigerated air-conditioning and
heating with distribution and thermostats per plan.
11. Interior Painting: Restroom only.
PROCEDURE FOR TENANT'S WORK
Upon notification by Landlord that Landlord's construction obligations
are substantially complete, Tenant shall perform Tenant's Work with all due
diligence. Tenant's Work shall be performed in a good and workmanlike manner,
free and clear of any liens or encumbrances, and in strict accordance with all
applicable statutes, ordinances, rules, regulations and building codes of any
governmental authority having jurisdiction over the Premises.
Tenant shall have no right to enter the Premises and to perform
Tenant's Work prior to Landlord's notice that the Premises are substantially
completed, without Landlord's prior written consent. If Landlord does not
consent, Tenant shall comply with the directions of Landlord and shall not
interfere with any of the Landlord's construction activities.
At the time Tenant enters the Premises to perform the work required of
Tenant:
(a) All of Tenant's obligations under this Lease, except the
obligation to pay rent shall be in full force and effect.
(b) Tenant agrees to pay for the utilities (heat, gas, water,
electricity), which shall be furnished to the Premises from
that time.
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(c) Tenant shall maintain liability insurance in accordance with
Article 9 of the Lease.
On or about the delivery of the possession of the Premises by Landlord
to Tenant, Tenant will participate in a walk-through inspection of the Premises
with Landlord to jointly prepare a punch-list of incomplete items for which
Landlord is responsible. Other than the items specified on such punch-list, by
taking possession of the Premises, Tenant will be deemed to have accepted the
Premises in their condition on the date of delivery of possession and to have
acknowledged that Landlord has installed all improvements for which Landlord is
responsible under this Exhibit "B" and that there are no items needing
additional work or repair. Landlord shall not be liable for any latent or patent
defects therein. Such punch-list will not include any damage to the Premises
caused by Tenant's move-in or early entry, if permitted.
Landlord's contractor will complete all items specified on such
punch-list within thirty (30) days after the walk-through inspection or as soon
as possible thereafter. Tenant acknowledges that neither Landlord nor its agents
or employees have made any representations or warranties as to the suitability
or fitness of the Premises for the conduct of Tenant's business or for any other
purpose, nor has Landlord or its agents or employees agreed to undertake any
alterations or construct any tenant improvements to the Premises except as
expressly provided in this Exhibit "B".
Notwithstanding any time period established herein for the construction
of improvements by Tenant, the Lease Term and Tenant's obligation to pay rent
shall commence as set forth in Article 2 of the Lease.
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