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 This Lease Agreement involves

John A. Crivello Family Partnership, L.P. | Monterey County Bank,

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Title: LEASE
Date: 3/28/2005

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Exhibit 10(i) D(3)








Lease Year:



Common Area (if any):



Open Parking Area (if any):



Controlled Parking Area (if any):



Floor Area:






























































































































































































































This Lease, made and entered into on the date appearing in the signature block hereof, by and between John A. Crivello Family Partnership, L.P . ,hereinafter referred to as Lessor),  and   Monterey County Bank , jointly and severally, (hereinafter referred to as Lessee), without regard to number or gender.






Lease Year : For the purpose of this Lease, a “lease year” is a period during the lease term commencing on the first day of the lease term (except that if the lease term commences on a day other than the first day of a calendar month, then the “lease year’ shall commence on the first day of the next succeeding calendar month) and ending at midnight twelve (12) full calendar months thereafter; provided, however, that the last lease year shall end at the end of the lease term, except that if such period includes less than the whole of a calendar month, that portion of the calendar month, included within the period is a “month.”


Common Area (if any): As used in this Lease, the term “common area” shall include all areas and facilities in, upon or about the Center and the adjoining parking areas (if any, excluding any Controlled Parking Areas) owned by Lessor for the non-exclusive use of Lessee in common with other authorized users. It is understood and agreed that the common area is not a portion of the premises demised to Lessee hereunder.


Open Parking Are a (if any): The term “open parking area” shall include vehicle parking spaces, driveways, access ways, ingress and egress, streets and any other areas owned by Lessor and adjacent to the demised premises and improved in order that automobiles and other vehicles can be driven and parked thereon, but excluding “Controlled Parking Areas”. Parking areas may be designed for co-exclusive use of the Lessee and Lessor or for common use of Lessee and others as provided for herein.


Controlled Parkin g Area (if any): The term “Controlled Parking Area” shall mean an area for parking automobiles that is separate from the open parking area defined above by and including, but not limited to, gates, signs, barriers, exhibits to lease, markings upon the land or pavement, or as otherwise indicated by Lessor or his agent from time to time, and is not part of the common area or the open parking areas.


It is agreed that Lessee shall have the exclusive use of six (6) parking spaces as has been agreed o by Lessor and Lessee. Lessee shall be solely responsible for marking the designated parking spaces and for enforcement of the exclusive right to such spaces. Such exclusive parking spaces are marked by “x’s” on the parking plan attached as Exhibit” D”.


Floor Are a: The term “floor area” means that actual number of square feet of floor space within the exterior faces of the exterior walls (except party and interior walls, in which case the center thereof instead of exterior faces shall be used) of the buildings, including vacant space therein. However, the term “floor area” shall not include any basement space or subterranean areas, parking facility, or employer’s parking area. The term “floor area” refers to gross leasable floor area, and no deductions shall be made from the “floor area” by reason of columns, stairs, hallways, escalators, elevators, conveyers, or other interior construction or equipment. The total “floor area” of the demised premises and the total “floor area” of the buildings, including the “floor area” of the demised premises is hereby defined, fixed, determined and agreed by Lessee and Lessor as set forth above and on Exhibit ”A,” attached hereto, and shall be conclusive upon the parties hereto,


MRWPC A:  The term “MRWPCA” shall mean Monterey Regional Water Pollution Control Agency.


Center : The term “Center” is defined as: shopping center, professional office building, mixed-use properties, single and multi-tenant properties, industrial, retail, warehouse, and other general commercial properties, all of which may be improved or unimproved, owned by Lessor.


Lessor : The term “Lessor’ shall mean and include Owner, Landlord and Lessor.


Lessee : The term “Lessee” shall mean and include Tenant and Lessee.




2.  PREMISES : In consideration of the terms, covenants, conditions and obligations herein contained, to be kept, performed and complied with by Lessee, and upon the condition that Lessee keeps, performs and complies with said terms, covenants, conditions and obligations, Lessor does hereby demise certain premises described in Exhibit ”B”, attached hereto, (hereinafter demised premises), located at, as specified in Exhibit ”A,” “Demised Premises.”


Square footage is an approximate figure and may not be the sole basis for the monthly value.  Lessee should measure the premises to verify square footage prior to signing the Lease, and must communicate any discrepancy to the Lessor or Lessor’s Agent prior to signing the Lease. If Lessee elects not to measure the premises and or not to communicate any discrepancy to Lessor or Lessor’s Agent and signs the Lease, Lessee will have no recourse if during the term of this Lease, or later, a discovery of inaccurate square footage is made to the Lessor or Lessor’s Agent. The Lessee hereby acknowledges that they physically visited and viewed the premises and acknowledges that regardless of square footage, they are accepting and renting the premises as viewed. Upon mutual execution of this Lease Agreement by Lessor and Lessee, Lessee will not thereafter challenge the square footage and or the determination of the square footage as contained in this Lease Agreement.


3.  TERM OF LEASE: The term of this Lease shall be for the approximate number of years appearing as the Term on Exhibit ”A,” attached hereto, and shall commence on the Date of Commencement of Lease as it appears in said Exhibit ”A.” If Lessor, for any reason whatsoever, cannot deliver possession of said premises to Lessee at the commencement of the term hereof, this Lease shall not be void or voidable, nor shall Lessor be liable to Lessee for any loss or damage resulting there from, but in that event there shall be a proportionate reduction of rent covering the period between the commencement of the said term and the time when Lessor can deliver possession.


4.  RENTA L: Lessee hereby covenants to pay to Lessor, at the time and place and computed in the manner hereinafter set forlh, as rental for the demised premises for each month, as hereinafter defined during the term of this Lease, no less than the Initial Fixed Rent appearing in Exhibit ”A” as adjusted from time to time in accordance with the provisions of Paragraph 5, below.   Initial Fixed Rent as so adjusted shall be called the Then Fixed Rent and shall be paid monthly in advance on the first day of each month during the lease term. Rental payments received after the fifth day of the month shall be subject to a late fee equal to 5% of the amount then due and shall be paid along with the rent. Lessee further agrees to pay $25.00 for each dishonored bank check. Rental payments shall not be reduced by any claims, demands, or offsets against Lessor of any kind whatsoever. Notwithstanding anything in this Lease to the contrary, all amounts payable by Lessee to or on behalf of Lessor under this Lease, whether or not expressly denominated as rent, shall constitute rent for the purposes of the Bankruptcy Code, 11 U.S,C. Section 502(b)(6). No payment by Lessee or receipt by Lessor of a lesser amount than the rental shall be deemed to be other than on account of the rental, nor shall any endorsement or statement on any check or any letter accompanying any check payment as rent be deemed an accord and satisfaction, and Lessor may accept such check or payment without prejudice to Lessor’s right to recover the balance of the rental or pursue any other remedy provided for in this lease.


5.  CHRONIC DELINQUENCY: Chronic delinquency by Lessee in the payment of rent or any other monthly amounts required to be paid by Lessee under this Lease shall constitute a material breach of this Lease. “Chronic delinquency” shall mean the occurrence of any of the following for any three (3) months (consecutive or nonconsecutive) during any twelve (12) month period: (a) failure by Lessee to pay or submit within five (5) days of the due date its Base Monthly Rent and/or other monthly charges, or (b) payment of any reconciliation of operating expenses or payment to vendors when due. This Paragraph shall not limit in anyway, nor be construed as a waiver of the rights and remedies of Lessor provided hereunder or by law in the event of even one instance of delinquency. In the event of chronic delinquency, at Lessor’s option, Lessor shall have the right, in addition to all other rights under this Lease and at law, to require that all rent be paid by Lessee quarterly, in advance.


ADJUSTME NTS OF FIXED RENT: Notwithstanding the provisions of paragraph 4, the initial fixed rent shall be adjusted on the first day of the second lease year and thereafter at twelve-month intervals for so long as this Lease or any extension there of shall be in effect, unless otherwise agreed in writing by Lessor and Lessee, as follows: on the first day of the second lease year and on the first day of each lease year thereafter (the adjustment dates), the Then Fixed Rent shall become the product of multiplying the Then Fixed Rent by the annual percentage increase as reflected in the Consumer Price Index for All Urban Consumers in the San Francisco-Oakland-San Jose area as published by the Bureau of Labor Statistics, United States Department of Labor or any successor index, for the calendar month preceding the adjustment dates or one hundred four percent (104%) of the Then Fixed Rent, whichever is greater, but in no event shall the increase in the Fixed Rent be greater than one hundred seven percent (107%) of the Then Fixed Rent.   Excepting, however, that the (104%) increase shall not be applicable to adjustments during a period of less than twelve (12) months (a lease year). Lessor delay in notifying Lessee of the adjustment shall not be a waiver of Lessor’s rights to enforce the adjustment hereunder. If the Index is changed so




that the base year differs from that in effect when the term commences, the Index shall be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the Index is discontinued or revised during the term such other governmental index or computation with which it is replaced shall be used in order to obtain substantially the same as would be obtained if the Index had not been discontinued or revised.


7.  SECURIT Y DEPOSIT: On or before the date of execution of this Lease, Lessee has delivered to Lessor, receipt of which is hereby acknowledged by Lessor, the Initial Payment as such payment appears in Exhibit ”A,” attached hereto. That portion of the Initial Payment that equals the Initial Fixed Rent plus all monthly charges (including, but not limited to common area charges, MRWPCA charge, property taxes, assessments, and insurance) shall represent advance payment of the monthly rent and charges for the first month of the term of this Lease and the balance thereof shall represent a security deposit for the full and faithful performance by Lessee of all of the terms, covenants, conditions and obligations of this Lease to be performed and kept by Lessee. If Lessee shall have fully and faithfully complied with all of the terms, covenants, conditions and obligations of this Lease, the security deposit shall be returned to Lessee within twenty-one (21) days after Lessee has vacated the demised premises. If Lessee defaults in respect to any of the terms, covenants, conditions and obligations of this Lease including, but not limited to, nonpayment of rent, Lessor may use, apply or retain the whole or any part of the security deposit for the payment of any rent in default or for reimbursement of Lessor for any sums which Lessor may spend or be required to spend by reason of Lessee’s default. The application by Lessor of all or any part of said security deposit shall not preclude Lessor from thereafter exercising each and all of Lessor’s other rights and remedies upon such default of Lessee. Should Lessor resort to the security deposit was had and necessary to restore the security deposit to the original sum required hereunder within ten (10) days after written demand for some by Lessor. Lessee will be entitled to no interest on any portion of the security deposit. Lessor’s obligations with respect to the deposit are those of a debtor and not of a trustee, and Lessor can commingle the security deposit with Lessor’s general funds. Lessor shall not be required to pay Lessee interest on the deposit. Lessor shall be entitled to immediately endorse and cash Lessee’s payment.


8.  GOVERNMEN TAL INTERVENTION: In the event that Lessee’s occupancy of the demised premises shall be prohibited, restricted, modified or interfered with in any respect by or as a result of any action of any governmental authority or agency then, and in that event, Lessee shall comply with any and all lawful orders made by any such governmental agency having jurisdiction in the premises, and in the event that Lessee’s occupancy shall be prohibited by reason of the intervention of such governmental agency and in that event, Lessee’s sole remedy hereunder shall be an option to cancel this Lease and from, and after the giving of sixty (60) days advance written notice of the exercise of such option to cancel this Lease, neither party hereto shall thereafter have any further obligations whatsoever by reason of this Lease. Lessee shall obtain any and all governmental approvals, authorizations, and permits necessary or desirable to enable Lessee to operate Lessee’s business in the premises and shall comply with any and all conditions and requirements imposed thereon, all at Lessee’s sole cost and expense. Lessor shall have no obligation whatsoever for obtaining any such approvals, authorizations or permits nor shall Lessor have any obligations or responsibility whatsoever by reason of any governmental intervention, prohibition, condition or qualification with respect to Lessee’s occupancy of the demised premises or Lessee’s business conducted therein regardless of whether any such governmental action be based upon action or inaction of Lessor or action or inaction of Lessee. Lessor makes no warranties or representations whatsoever with respect to the status or need for any governmental approvals, authorizations or permits by either Lessor or Lessee, and Lessee assumes full and complete responsibility for determining what permits, approvals and authorizations, if any, are required, necessary or desirable.


9.  DESIGNATIO N, MAINTENANCE, REPAIR AND COST REIMBURSEMENT OF THE CENTER AND COMMON AREAS AND MANAGEMENT OF THE CENTER, (IF ANY): Within and about the Center, Lessor will from time to time provide and designate for the general use and convenience (among others) of Lessee and other Lessees of all or any part of the Center, and their respective employees, patients, clients, customers, and invitees, certain common areas. These shall include, but are not limited to, driveways, entrances, exits, exterior lighting fixtures, water fountains, exterior stairways, restrooms not located within Lessee’s space, arcades, interior halls, patios, electrical, plumbing, other building systems, and similar improvements, loading and delivery areas, refuse disposal areas, elevators, if any, and other areas and facilities that may be provided and designated by Lessor from time to time for the general use and convenience of Lessee and other Lessees of the Center. Lessor may (if parking is being provided), from time to time, provide certain hard-surfaced, marked and lighted parking areas within or in the immediate vicinity of the Center. Lessor reserves the right from time to time to make




changes in the shape, size, location, number and extent of improvements, buildings, accommodation areas, loading and delivery areas, driveways, entrances, exits, traffic flow and any other improvements from time to time constituting common area to eliminate or add any improvements or buildings to any portion of the Center and surrounding land owned by Lessor. During the term of this Lease, Lessor shall operate, manage and maintain, all of the above and other. The manner in which such areas and facilities shall be maintained and protected by guards or otherwise and the expenditures for maintenance and security by guards or otherwise, shall be at the sole discretion of Lessor, and the use of such areas and facilities shall be subject to reasonable regulations and changes as Lessor shall make from time to time, including, without limitation, the right to close, if necessary, all or any portion of such areas, roads, or facilities, to such extent as may be legally sufficient in the opinion of the Lessor’s counsel, to prevent a dedication thereof or the accrual of rights of any person or of the public therein, or to dose temporarily for safety, maintenance, construction or other purpose, all or any portion of such areas of facilities.


9.1  Lessee agrees to reimburse Lessor for increased cost in excess of the initial lease year, Lessee’s share (as defined below and specified in Exhibit ”A”) of all of the costs incurred by Lessor in keeping the common area clean and clear, and in maintaining and operating the same in good condition and repair. The initial year shall be defined in Exhibit ”A”, Common Areas and Management Base Year. The initial cost shall be the amount shown in Exhibit ”A”, Common Areas and Management Base Cost. Such costs include, but are not limited to, real property taxes and assessments and other taxes, against the common areas, all sums expended by Lessor for the maintenance and/or operation of the common areas, professional management of the Center, or a reasonable allowance to Lessor for Lessor’s management and supervision of the Center. Costs for maintenance and operation of the common areas shall include without limitation: cost of repainting, including exterior of building, signage and stripping, cleaning, sweeping and other janitorial services, and maintenance of refuse receptacles, planting and relandscaping, directional or other signs and other markers, lighting and other utilities, premiums on public liability and property damage insurance, all maintenance and construction work as required to preserve and maintain such common areas in the condition originally installed and all other costs necessary in Lessor’s judgment for the maintenance and operation of the common areas. Lessee’s share of all of the above-described and other common area costs shall bear approximately the same proportionate relationship to such total costs as does the area demised to Lessee bear to the total leasable space of the Center and shall be expressed as a percent of the total common area costs. Lessor shall fumish to Lessee, request, a statement showing the total common area costs, Lessee’s share of common area costs for the period, and the payments required by Lessee. Lessor shall keep as separate account covering the common area costs and said account of Lessor shall be retained and preserved for twelve months after the expiration of the accounting period to which it applies and shall be made available to Lessee for reasonable inspection during said period.


Notwithstanding anything in the above to the contrary Lessor agrees that in no event shall it charge more than 5% of gross income of the center for professiional managemen.


If Lessee defaults in making any payments required by this subparagraph 3) Lessor may, in addition to all other remedies under this Lease or provided by law, deny Lessee and its employees, patients, clients, subtenants, licensees, agents, service suppliers, customers and patrons, the right to use any part of the common area, and may withhold all privileges herein granted so long as Lessee remains in such default.


9.2  In addition to the other rights herein reserved, Lessor shall have the right, in its sole discretion:


a.To establish and at any time change, alter, amend and to enforce against Lessee and other users of the common area such reasonable rules and regulations, of which Lessor shall give Lessee written notice, as may be deemed necessary and advisable for the proper and efficient operation and maintenance of the common area and the Center. Lessee agrees to conform and abide by all such rules and regulations in its use of the common area.


10.   PARKIN G IN OPEN PARKING AREA (if any): Lessee and Lessor agree that the Open Parking Area, if any, shall be used solely for the purpose of the daily parking of passenger automobiles owned, leased, controlled or authorized by Lessee, Lessor or other tenants. Lessee agrees to use such parking area solely for said purpose and in accordance with the provisions of this agreement and releases Lessor of any and all obligation or responsibility to prevent the use of said area by persons and vehicles not conforming to such purpose, not licensed by Lessor or not authorized by Lessee or other tenants. Lessee further releases and indemnifies Lessor against any claims for loss or damage to vehicles, their occupants or contents that are parked in the Open Parking Area by Lessee or in connection with the business or practice of Lessee. If there is no parking, Lessee acknowledges that Lessor has made no




provision for parking on the Premises and Lessee shall be responsible for all parking associated with the use of the Premises for their employees and patrons.


11.   BUSINESS PURPOSE: Lessee covenants that during Lessee’s occupancy of the demised premises, Lessee will use the demised premises solely for the purpose of operating the practice or business appearing as Business Purpose, and for the number of days per week and for the hours of operation as set forth in Exhibit ”A”, attached hereto. Lessee further covenants that Lessee will not at any time during Lessee’s occupancy, use the premises for any other purpose or purposes without the written consent of Lessor first had and obtained.


12.   COMPLIANCE WITH LAW: Lessee covenants that during Lessee’s occupancy of the demised premises, Lessee


shall at Lessee’s own cost and expense, promptly and properly observe, comply with and execute, all present and future orders, regulations, directions, rules, laws, ordinances and requirements of governmental authorities, including, but not limited to, state, municipal, county and federal governments and their departments, bureaus, boards and officials and the Board of Fire Underwriters and any other board of organization exercising similar functions arising from the use or occupancy of, or applicable in any manner to the demised premises or privileges appurtenant to or connected with the enjoyment of the demised premises, including Lessee’s share of a sprinkler system, if any required or recommended. Lessee’s share shall be the same percentage as set forth for the common area for the cost of said sprinkler system, prorated over remaining term of the Lease, plus option.


13.  USE AND CLEA NLINESS: Not withstanding article #11 “BUSINESS PURPOSE”, Lessee covenants that during Lessee’s occupancy of the demised premises, Lessee will not permit said premises to be used for any improper, illegal or immoral purposes or permit Lessee’s business to be carried on in such a manner as to be noisy or offensive to others in the vicinity of the demised premises. Lessee further covenant to keep all windows therein clean at all times and free from dust, dirt or other unsightly substances. Lessee shall not use the Premises in any manner that will constitute a nuisance or unreasonable annoyance to other tenants in the building in which the Premises are located, including, without limitation, the use of loudspeakers, or sound or light apparatus that can be heard or seen outside the Premises, or the living or sleeping in, washing cloths, cooking, or the preparation, manufacture or mixing of anything that might emit any odor or objectionable noises, lights or vibrations.  No machinery, apparatus or other appliance shall be used or operated in or on the Premises that will in any manner injure, overload, vibrate or shake building in which the Premises are located. Lessor may from time to time promulgate rules and regulations for the use of the real properly and Tenant agrees to abide by such rules and regulations. Lessee shall not do anything on the premises, which will overload any existing parking, utility service, and refuse or other areas to the Premises. Pets and/or animals of any type shall not be kept on the Premises. Tenant will not perform any act or carry on any practice that may injure the Premises or the Center, or that may be a nuisance or menace to any other tenant in the Center. No auctions are permitted.


Lessee acknowledges that neither Lessor nor any agent of Lessor has made any representation or warranty with respect to the Premises, concerning the zoning or uses permissible or with respect to the suitability of the Premises for the conduct of Lessee’s business, nor has Lessor agreed to undertake any modification, alternation or improvement to the Premises, except as provided in writing in the Lease. If sound insulation is required to muffle noise produced by Lessee on the Premises, Lessee at its own cost shall provide all necessary insulation.


14.  ASSIGNMENT AND SUBLETTING: Lessee shall not sell, transfer, assign, mortgage or hypothecate this Lease or any interest in this Lease nor permit the use of the demised premises by any person or persons other than Lessee, nor sublet the premises or any part thereof without the written consent of Lessor first had and obtained, which said written consent shall not be withheld unreasonably. However, Lessor shall have the option  to  terminate  the Lease rather  than approving an assignment or sublease of all of the Premises to a third party. Consent to any of the aforementioned acts shall not operate as a waiver of the necessity of first obtaining the written consent of Lessor to any such subsequent act and the terms of any such consent shall be binding upon any person holding by, under or through any such written consent. Lessee agrees that the consent of Lessor shall not be deemed or considered withheld by reason of the fact that in the event of the sale of the business operated by Lessee on the demised premises, Lessor requires as a condition of the assignment of the Lease that the terms and conditions of this Lease be modified, including but not limited to those terms and conditions concerning the security deposit, but Lessor shall not have the right to require  the rental under this Lease be changed as a condition  to approval of any such Assignment or Subletting.. In any event, if Lessor shall consent to any sublease, sale, transfer, assignment, mortgage or hypothecation of this Lease or any interest in this Lease, or if  the Lessee shall without such consent have subleased, sold, transferred, assigned, mortgaged or hypothecated this Lease or any or all of Lessee’s interest therein then, and in that event, without otherwise limiting any other remedies Lessor may have by law or under the




provisions of this Lease, Lessor shall be entitled  to receive and Lessee shall assign to and promptly pay to Lessor, any and all consideration (including, but not limited  to, all rent received by Lessee from any sublessee that exceeds the amount of  then Fixed Rent owed or paid by Lessee to Lessor and all transfer fees and the like) to be received by Lessee for or in connection with any such sublease, sale, transfer, assignment, mortgage or hypothecation of this Lease or any interest in this Lease. Lessee shall pay Lessor a fee not in excess of $2,000 for each instance, and shall also pay Lessors costs ,including attorney fees (but such attorney’s fees shall not be in excess of $2,000 for each such instance ) in connection with this Article


14.1   If this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy Code, 11 U.S.C.    Section 101 et seq., any and all monies or other considerations payable or otherwise to be delivered in connection with such assignment shall be paid or delivered to Lessor, shall be and remain the exclusive property of Lessor and shall not constitute property of  Lessee or of the estate of Lessee within the meaning of said Bankruptcy Code. Any and all monies and/or other considerations constituting Lessor’s property under the preceding sentence not paid or delivered to Lessor shall be held in trust for the benefit of Lessor and be promptly paid or delivered to Lessor.


14.2  Any person or entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code, 11 U.S.C.  Section 101 et seq., shall be deemed without further act or deed to have assumed all of the obligations arising under this Lease on and after the date of such assignment. Any such assignee shall, upon demand, execute and deliver to Lessor an instrument confirming such assumption.


15.  ACCEPTANCE OF PREMISES/ “AS IS” CONDITION: The demised premises including any fixtures and any personal property, is being Leased in  its “AS IS” condition without any expressed or implied warranties. Any and all representations and warranties of Lessor set forth elsewhere in this Lease are hereby deleted. Lessee hereby represents  that Lessee or Lessee’s agents have inspected the subject property to the full extent deemed appropriate and that Lessee is satisfied with its condition. Lessee acknowledges that as of the date of this Lease, the subject property and the Premises and improvements are in good order, repair and condition. Lessor shall not be liable to Lessee or any person for any latent or existing defect in the subject property, or for any injury or damage that may result to any person or property, including without limitation, the person or property of Lessee, by or from any cause whatsoever arising out of the present actual or latent conditions of the subject property. Lessee has not relied on any acts, including any written or oral statements, by Lessor, or any person acting on behalf of Lessor, in entering into this Lease, but rather has relied on his, her or its own independent investigation of the subject property. The entry by Lessee upon the demised premises shall be conclusive evidence against Lessee as an admission that every part of the demised premises, (interior and exterior), is accepted “AS IS”. Lessee hereby agrees that Lessor has no responsibility whatsoever for any maintenance, replacements or repair of any part of said demised premises, including, but not limited to, telephone, security systems, computer wiring, cable, skylights, heating/ventilation, fire sprinklers, electrical, plumbing, other building systems, sewer blockages, all fixtures, air conditioning (if any), ceilings, walls, floors, awnings, doors and windows and any contents situated therein, however that Lessor shall maintain the roof and exterior walls, excluding doors and windows. Lessor said obligation shall not include however, any damage or repairs necessitated by the acts or omission of the Lessees, Lessees agents, employees and/or customers or invitees. Lessor to engage a licensed HVAC company to service the air conditioning system on the Lessee’s premises (if any) and Lessee will pay  to Lessor the actual cost of such servicing contract, either directly  to Lessor or  to  the servicing company


If the use of the premises includes the preparation and or consumption of food or beverage in, about, or away from the premises, Lessee will be responsible for maintenance, repairs and replacement of sewer lines, including sewer lines buried in the earth or concrete, except for sewer lines lying outside the property line which shall be Lessor’s responsibility, except where defects are caused or contributed to by Lessee’s use and or occupancy of the premises. Lessee agrees to periodically have sewers flushed and cleaned at Lessee’s expense and to provide Lessor with copies of invoice confirming the cleaning.


If  the use of the premises includes the preparation and or consumption of food or beverage in, about, or away from the premises, Lessee will be responsible for maintenance, repairs and replacement of sewer lines, including sewer lines buried in the earth or concrete, except for sewer lines lying outside the property line which shall be Lessor’s responsibility, except where defects are caused or contributed to by Lessee’s use and or occupancy of the premises. Lessee agrees to periodically have sewers flushed and cleaned at Lessee’s expense and to provide Lessor with copies of invoice confirming the cleaning. Lessee, in accordance with local and state governmental fire and health agencies and regulations, shall install automatic fire suppression systems over commercial cooking equipment and shall install non-combustible metal plates between deep fat fryers and open flame units, all at Lessee’s expense and prior to the opening of business. Additionally, Lessee shall:




a)          Service and wash said equipment on a regular basis including the washing or exchanging of filters in the hood systems and flues are to be cleaned on a quarterly basis by a licensed flue-cleaning contractor and provide Lessor with copies of invoice or contract confirming the cleaning


b)        Lessee shall also provide adequate fire extinguishers as required by law


c)          Prior to opening for business and throughout the duration of this Lease, Lessee shall provide Lessor a copy of a contract for pest control abatement for demised premises and the Center (if needed) with a local, reliable and licensed pest control firm providing a weekly or monthly pest abatement as may be needed.


Lessor shall have no responsibility in any respect for damages to property of Lessee caused by water, flooding, waves or fluids of any nature or origin whatsoever. As part of the consideration for the rental, Lessee agrees to fully maintain the demised premises in a first class order and condition and repair at all times during the term hereof, without cost to Lessor and further covenants that said premises shall not be altered, improved, or changed in any respect without the written consent of Lessor first had and obtained. Lessor has not made a survey of the premises with regard to the presence of hazardous materials and Lessor has no knowledge of the presence of any hazardous materials. Lessee upon entry of the demised premises assumes all risk with regard to same. Lessee hereby covenants to save and hold Lessor, his agent or managers, harmless from and to defend and indemnify Lessor against any suit or claim or demand for damage or injury to any person or property sustained in, on, or about the demised premises caused by any hazardous materials for which Lessee is responsible, or which Lessee has introduced to the demised premises.  Lessee hereby waives any and all benefits and rights which Lessee might become entitled to by reasons of Sections 1941 and 1942 of the Civil Code of California and any and all other provisions of any law that permit a Lessee to make repairs at the expense of a Lessor or to terminate a Lease by reason of the condition of the premises.


16.  LIENS : Lessee covenants to keep the demised premises and any alterations, improvements and changes thereof, free and clear of liens of every kind and character whatsoever during Lessee’s occupancy thereof, no matter what the source thereof, or the reason thereof, which may arise from the use of occupancy of said premises by Lessee, or from any work, labor or materials furnished to or performed upon said premises. Lessee further covenants to indemnify and hold Lessor free and harmless of and from any and all loss or damage howsoever arising by virtue of any such liens or claims of lien including any expense reasonably incurred by Lessor in defense against such claims. Lessor shall have the right to post and maintain on the dernised premises such notices of non-responsibility or non-liability as Lessor may deem appropriate to avoid any liability for liens.


17.  ACCESSION : All alterations, improvements, additions or fixtures, other than trade fixtures not permanently affixed to realty, that may be made, constructed or installed upon the demised premises by either Lessee or Lessor and that in any manner are attached to the floors, wells, ceilings, or roof shall become and be the property of Lessor without cost and, at the termination of this Lease, shall remain upon and be surrendered with the premises as a part thereof without disturbance, molestation or damage thereto. Any floor covering that may be cemented, nailed, tacked or otherwise affixed to the floor of the dernised premises shall become and be the property of the Lessor. Any light fixture that may be installed by Lessee in, upon or about the dernised premises shall become and be the property of Lessor whether such fixture be affixed by screws, bolts, nails or otherwise. All water, sewer, utility, and other governmental use allocations, and all governmental permits shall remain with Lessor, without cost to Lessor at the termination of this Lease.


18.  WASTE : Lessee shall not commit nor suffer to be committed any waste, legal, equitable, or otherwise, to or upon the demised premises or any part thereof and covenants that at the expiration of the term hereof or any sooner termination thereof, Lessee will quit and surrender up said premises to Lessor peaceably and quietly and in as clean and good condition as said premises now are or may be put into, reasonable use and wear excepted.


19.  HOLD -OVER TENANCY: Lessor and Lessee agree that there shall be no renewal of this Lease, except upon execution of a written agreement, and that the fact that the Lessee may continue in possession of the premises without the written consent of Lessor shall not operate to renew this Lease. If Lessee should continue to occupy the demised premises after the expiration of the term hereof without the written consent of Lessor, such hold-over shall be deemed a month to month tenancy only, at 150% of the monthly rent in effect at the expiration of the term, per month, payable on the first date of each and every month thereafter until the tenancy is terminated by a 30 day notice in a manner provided by law. Lessee shall hereby explicitly agrees to continue to be bound, at Lessor’s discretion, by the terms and conditions of this Lease, except that the monthly rent during said hold-over period will be 150% the amount of the last month’s rent. The provision for holdover tenancy is not to be construed as limiting the rights or




remedies otherwise available to Lessor to remove Lessee, or, to limit the rights of Lessor or Lessee to resolve any dispute.


20.  REAL PROPERTY, GLASS AND OTHER INSURANCE: During the term hereof, Lessee shall maintain in full force and effect upon all of Lessee’s trade fixtures, “tenant’s” betterment’s and improvements, equipment; inventory and stock in trade in the demised premises a policy or policies of fire insurance issued by an approved California insurance company rated A+ XIV with all risk coverage endorsement to the extent of at least ninety percent (90%) replacement cost of such items. As long as this Lease is in effect, the proceeds of any such policy shall be used for the repair or replacement of the fixtures, “tenant’s” betterment and improvements and equipment so insured. Lessor shall have no interest in the insurance upon Lessee’s fixtures and equipment and Lessor will cooperate with Lessee in the settlement of any claim or loss by Lessee, provided that Lessee gives to Lessor satisfactory assurance that the proceeds of such insurance will be used in compliance with the requirement hereinabove contained respecting repair or replacement of said fixtures and equipment. During the term hereof Lessee shall also maintain in full force and effect at Lessee’s expense a policy or policies of glass insurance, insuring Lessor and Lessee’s interests, as they may appear, covering exterior and interior glass of the demised premises. Business Interruption Insurance, insuring that the rent will be paid to Lessor for a period of not less than 1 year, if the premises be destroyed or rendered inaccessible. Lessee shall also maintain at Lessee’s cost fire legal liability equal to the value of the space rented by Lessee on a replacement cost basis. Lessee shall also maintain at Lessee’s cost, sprinkler leakage insurance upon Lessee’s property and the premises at all times if a sprinkler system exists or is installed during the term of this Lease or any extension hereof.


Lessor is to be named as its interest may appear as regards Lessee’s “tenant’s betterment’s” and improvements on the fire insurance policy for the Lessee, and Lessee is to provide sufficient amount of coverage to at least ninety percent (90%) of co-insurance with a replacement value, cost endorsement and inflation guard endorsement of not less than a ten percent (10%) annual increase or cost-of-construction average increase as published by F.W. Dodge Systems, McGraw Hill, in the Daily Pacific Builder, or other index agreed upon by the Lessor and Lessee, whichever is higher.


Lessee covenants, during the term of this Lease to reimburse Lessor for increases beyond the initial year for Lessee’s share of any and all insurance premiums paid by Lessor for coverage of the real property and liability for the Center. The initial year shall be defined in Exhibit ”A”, Real Property and Liability and Glass Insurance Base Year. The initial cost shall be the amount shown in Exhibit ”A”, Real Property and Liability and Glass Insurance Base Cost. Lessee’s share shall be the percent appearing in Exhibit ”A”, Real Property and Liability and Glass Insurance. Upon the anniversary of the insurance policy year, Lessor shall notify Lessee of the new monthly amount to be paid. It is understood that the insurance policy year may be different from the lease year.


21.  LIABILITY INSURANCE AND WORKERS’ COMPENSATION: Lessee shall procure, at Lessee’s own expense, on or before the date of the commencement of the term of this Lease and shall maintain continuously during the entire term hereof Workers’ Compensation as required by law and Public Liability insurance in the amount of one million dollars ($1,000,000.00) for the injury or death of any one person and two million dollars ($2,000,000.00) for the injury or death of any number of persons in any one accident and property damage liability insurance in the amount of one million dollars ($1,000,000,00). All of said policies of insurance shall provide that among the additional insured thereunder shall be included Lessor, Lessor’s agents herein, Lessor’s Property Manager, and all other persons whom Lessor may elect to keep insured, including, but not limited to, those named in Exhibit ”A”, “Named Insured”. All of said policies of insurance shall be obtained from companies satisfactory to Lessor and shall contain an endorsement that such insurance shall not be canceled except after thirty-(30) days written notification to Lessor. Lessee shall deliver to Lessor certificates evidencing the insurance coverage herein provided for, Lessee shall pay the insurance premiums on all insurance coverage herein provided for when due. If Lessee shall fail to pay the premiums on any policy required to be kept and maintained by Lessee, Lessor may, but need not, advance and pay said premiums, and the amount of any such advance or advances, together with interest thereon at the rate of ten percent (10%) per annum, shall become additional rent hereunder and one-sixth (1/6) of any total advance shall be payable by Lessee to Lessor with each monthly installment of rent to become due thereafter until such advance is paid in full.


Lessor shall procure and shall continuously maintain during the entire  term herefo, Public Liability insurance in the amount of One Million dollars ($1,000,000) for the death or lindury of any one person, and two Million dollars ($2,000

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