EXHIBIT 10.16
AMENDMENT #2 TO LEASE AGREEMENT
BY AND BETWEEN
UPWAY PROPERTIES, LLC (LESSOR)
AND
NATIONAL BANK OF THE REDWOODS (LESSEE)
This AMENDMENT #2 dated as of September 2,
2003 constitutes additions to or
amendments of that certain Standard Office
Lease- Full Service Gross (1984
American Industrial Real Estate
Association) entered into by and between Upway
Properties, LLC (Lessor) and National Bank
of the Redwoods (Lessee) dated as of
June 1, 1999. In the event of a conflict
between the terms of the Lease,
Addendum #1 & Amendment #1, this
AMENDMENT #2 shall control.
1)
Section Amending 2.2, Parking and Amendment #1, Vehicle
Parking:
In addition to the existing 39 on site parking spaces currently
granted
to Lessee by Lessor in the original lease, the Lessee shall be
granted
3 additional parking spaces in the garage and 3 additional
parking
spaces in the surface parking area for a total of 45 on site
parking
space, free of charge.
2)
Section Amending 1.6, Base Rent & Addendum #1 Rent
Schedule:
Commencing October 1, 2003, the rent shall be $2.35 per square
foot
Full Service per month on the ground floor and $2.25 per square
foot
Full Service on the second floor, with annual 3% increases
occurring
each October 1st. The Lessee's monthly rent payment commencing
on
October 1, 2003 shall be $59,517.20, which includes an
additional
monthly payment of $90.00 for the storage space in the garage.
3)
Section Amending 1.2, Premises:
The Lessee leases the entire ground floor, which is revised to
be
18,980 usable square feet, plus 2,847 square feet attributable to
the
load factor of 15% for a total rentable ground floor area of
21,827
square feet.
The Lessee also agrees to occupy Suite 210 of the second floor.
The
second floor suite is 3,143 usable square feet, plus 471 square
feet
attributable to the 15% load factor for a total rentable second
floor
area of 3,615 square feet. In addition the tenant also has
storage
space on the second floor.
The combined usable square footage is 22,123.
The combined rentable square footage is 25,442.
4)
Section Amending 1.5, Term:
The Term shall be amended to end September 30, 2014.
5)
Section 34, Signs:
The Lessee
shall have the right to install signage on the building as
approved by the City of Santa Rosa. Lessee's signage shall be
at
Lessee's expense.
6) The
Lessor shall not have the right to relocate the Lessee during
the
term of the lease or any extension periods.
7)
Operating expenses shall include, but not be limited to,
utilities,
property taxes, property insurance, CAM, interior and exterior
property
maintenance, 5 day per week janitorial service to the interior
premises
and the common areas, property management and property
repairs/reserves.
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8) If
the Lessee does not purchase the Property, pursuant to that
certain
Option Agreement dated as of September 4, 2003, the Lessor will
contribute $10 psf as an allocation for Tenant Improvements to
Lessee's
premises based on the Lessee's usable square footage of the
Lessee's
premises and the form of payment shall be as a rent credit
equally
divided over the initial 12 months after Lessor's PUT Option period
has
expired and the Lessee has not purchased the property. If the
Lessee
purchases the property, the Lessee shall not be entitled to any
reimbursement of this Lessee improvement allowance
9) The
Lessor agrees, not later than January 1, 2004, to complete the
first and second floor lobbies with new lighting, flooring and
interior
paint to lighten up the 1st and 2nd floor lobbies.
10)
Exclusivity: As long as National Bank of the Redwoods remains
in
possession of the Premises, Lessor shall not lease space to any
Lessee
whose primary business in such location would be a bank,
financial
institution or credit union. No other ATM machine shall be allowed
in
the property.
11)
Commission: Lessee shall pay the real estate leasing fee of $3.00
psf
based the on combined rentable square footage is 25,442 to Paul
Gonzalez acting as Lessee's sole representative. The fee shall be
paid
upon the full execution of this Amendment.
12) Option
Term: So long as Lessee, at the end of the Term of Lease is
conducting regular business operations in the Premises as a
Financial
Institution and is not
in default at the time the option is to be
exercised or has not been in default of any provision of this
Lease
three (3) times in any one year period, Lessor grants to Lessee
the
option to extend the Term of the Lease for three (3) five
(5)-year
periods under the same terms and conditions as the Initial Lease
Term.
Section 39.2 is deleted in its entirety.
Lessee shall serve written notice to Lessor of Lessee's election
to
extend not later
than nine (9) months before expiration of the Term, as
it may be extended from time to time or the option shall
automatically
terminate.
Said notice to extend shall, upon delivery to Lessor, be
irrevocable
and
bind Lessee to the 60-month extension period. Default hereunder
by
Lessee after the delivery of such notice shall, in addition to
all
other remedies herein described, entitle the Lessor to elect to
invalidate Lessee's election to extend the Term of this Lease.
13) Other
Terms and Conditions:
a)
The effectiveness of this Amendment #2 is conditioned upon the
execution of the Option Agreement by all parties.
b)
The Lessee will provide the following loan terms to Lessor that
will be guaranteed for up to 16 months from lease execution to
replace
Lessor's existing loan:
1) A principal
loan balance of $6,000,000
2) 30 Year
amortization;
3) Interest rate
Fixed-Years 1-5- 5.25%, Years 6-10- 6.25%;
4) 1/2 loan
point to borrower;
5) Option for
additional 5 years with both parties to share the
interest risk by
agreeing to a margin and index
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c) The Lessor agrees not to give any further extensions of the
current
purchase agreement due diligence timeline to the current Buyer
(James
Ratto).
d) The terms contained herein shall be valid upon (i) Upway
Properties,
LLC successfully terminating the existing escrow for the sale of
the
property to James Ratto. If Upway Properties, LLC is unsuccessful
in
terminating the Purchase escrow, these terms shall be null and void
and
neither party shall have any further obligation or liability to
each
other.
The parties agree that the above terms will
modify and amend the prior Lease
Agreement and Addenda's, and will control
to the extent that they are
inconsistent therewith.
Agreed and Accepted:
LESSEE
LESSOR
Date:
9-4-03
Date:
9-3-03
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By: /s/ Patrick W. Kilkenny
By: /s/ Paul Louie
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National Bank of the Redwoods
Upway Properties, LLC
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OPTION AGREEMENT FOR PURCHASE AND SALE OF
REAL PROPERTY
This OPTION AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY (hereinafter
referred to as "Agreement") is made on
September 2, 2003 and entered into by and
between UPWAY PROPERTIES, LLC, A California
Limited Liability Corporation,
(hereinafter referred to as "Optionor") and
the NATIONAL BANK OF THE REDWOODS, a
California Corporation (hereinafter
referred to as "Optionee").
WHEREAS, Optionor is the owner of a certain
improved parcel of real property,
consisting of a 4-story office building
with an underground parking garage
located at 111 Santa Rosa Avenue, Santa
Rosa, California, County of Sonoma (and
together with all rights, easements,
improvements placed thereon and
appurtenances belonging thereto,
hereinafter collectively referred to as the
"Property"), identified in red in Exhibit
"A" attached hereto and incorporated
herein by this reference; and;
Optionor desires to sell the Property to
Optionee and Optionee desires to
purchase the Property from Optionor;
and;
This Agreement is only in effect upon
Optionor's exercise of Optionor's sole
right to require Optionee to purchase the
property. Optionee must close escrow
based on the terms and conditions as
outlined herein. If Optionor exercises its
PUT Option as contained herein and Optionee
fails to purchase the property, the
Lease and Lease Amendment #2 may be
terminated, at Optionor sole discretion, at
the later of October 2004 or 60 days after
Optionee's failure to purchase,
without any further liability to Optionee
by Optionor.
NOW THEREFORE, in consideration of the
mutual covenants and agreements
hereinafter set forth, and for other good
and valuable consideration, the
parties hereby acknowledge the receipt,
adequacy and sufficiency of which
hereto, Optionor and Optionee do hereby
covenant and agree as follows:
1. Agreement to Sell and Purchase. Optionor
hereby agrees to sell to Optionee
and Optionee hereby agrees to purchase from
Optionor, upon the terms and
conditions hereinafter set forth, the
Property.
2. Purchase Price. The Purchase price to be
paid by Optionee to Optionor at
close of escrow for the Property shall be
FIFTEEN MILLION SIX HUNDRED AND EIGHTY
NINE THOUSAND and NO/100 Dollars
($15,689,000), hereinafter referred to as the
"Purchase Price", all payable in cash,
except that Optionee shall either assume
the existing loan or pay any required
prepayment penalties on such loan.
3. Deposit. Optionee shall deliver to
Escrow Holder (as that term is hereinafter
defined) a check in the amount of TWENTY
FIVE THOUSAND and NO/100 Dollars
($25,000.00) by the end of the second
business day following the day upon which
Optionee receives notice of execution of
the Agreement by Optionor (the
aforesaid amount together with all interest
earned thereon as hereinafter
provided for, called
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collectively the "Deposit"). The proceeds
of the aforesaid check and all
subsequent increases in the Deposit shall
be promptly deposited by Escrow Holder
into an interest bearing account and shall
be disbursed by Escrow Holder in
accordance with the terms and provisions of
this Agreement. All deposits shall
be applicable to the purchase price.
In the event that this Agreement is not
terminated on or prior to the expiration
of the Inspection Date, Optionee shall
thereafter deliver an additional check to
the Escrow Holder in the amount of TWO
HUNDRED AND TWENTY FIVE THOUSAND and
NO/100 Dollars ($225,000.00), which amount,
together with monies previously
delivered to the Escrow Holder, including
interest earned thereon, to be
referred to collectively as the "Deposit"
for a total deposit of TWO HUNDRED AND
FIFTY THOUSAND and NO/100 Dollars
($250,000.00)and shall become non refundable
to the benefit of the Optionor, subject to
Liquidated Damages as per Section
16.a. and applicable to the purchase
price.
4. Escrow. Following full execution of this
Agreement an escrow shall be opened
to consummate the transaction contemplated
by this Agreement at the offices of
FIRST AMERICAN TITLE 400 E Street Santa
Rosa, Ca. 95401 Attn: Dona Robertson,
(the "Escrow Holder"). Said Escrow Holder
shall also provide title insurance and
hereinafter may also be referred to as the
"Title Company".
5. Title. Optionor shall convey to Optionee
a good, marketable and insurable
title to the Property free and clear of all
liens, encumbrances, tenants at
will, encroachments, restrictions,
covenants, assessments (except for
assessments that are recorded against the
Property, payable over a period of
time, billed with the property tax
statements from Sonoma County and not yet due
and payable), charges, agreements, taxes
(except for current year taxes which
are not yet due and payable) and easements,
except as otherwise approved in
writing by Optionee in its sole
discretion.
Following the
opening of escrow Optionor shall order and, upon issuance,
deliver a Preliminary Title Report and
copies of all CC&R's, cross access, cross
parking agreements and all other documents
and/or exceptions including legible
copies of all documents reported as
exceptions in such report (hereinafter
referred to collectively as the "Title
Review Documents") to Optionee. Optionee
shall have five (5) business days following
receipt of the Title Review
Documents to examine title to the Property
and to give Optionor written notice
of any liens, encumbrances or other items
affecting the Property which are
unacceptable to Optionee (the "Title
Defects"), failing which Optionee shall be
deemed to be satisfied with Optionor's
title to the Property as reflected in the
Title Review Documents. In the alternative
event wherein Optionee is not
satisfied with the Title Review Documents,
Optionor shall elect to (i) satisfy
and eliminate the Title Defects and give
written notice thereof to Optionee on
or before five (5) days following the date
of such notice to Optionor, or (ii)
provide to Optionee assurances satisfactory
to Optionee, as determined in
Optionee's sole discretion, that the Title
Defects can be satisfied on or before
a date mutually acceptable to Optionor and
Optionee, and Optionor shall
thereupon satisfy and eliminate the Title
Defects on or before such date, or
(iii) not take any action to eliminate the
title defects.
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In the event
Optionor elects not to
take any action to eliminate the Title
Defects Optionor shall so advise Optionee in writing and Optionee
shall have
five (5) days following the receipt of such notice to advise Optionor, in
writing, whether or not it will accept
title to the
Property subject to such
Title Defects.
In the event
Optionee does not so advise Optionor within said five (5)
day
period, or Optionee advises Optionor that it is not
willing to accept title to
the Property subject to such Title Defects,
this Agreement shall
be terminated,
the Deposit shall be returned to the Optionee
and neither party
shall have any
further obligation or liability one to the
other.
In the event any
easement, restriction,
conveyance,
encumbrance or
other
instrument affecting the Property or title thereto is executed or filed
for
record from and after the date of the
Preliminary
Title Report or in the
event
Optionee receives notice of any matter other than
the Title Defects
affecting
the Property or title thereto (hereinafter collectively referred to as
"Subsequent Title Defects"), Optionor covenants and agrees to remove such
Subsequent Title Defects upon notice thereof
and no later than seventy-two (72)
hours prior to the close of escrow.
If Optionor
fails to cure or
correct such Title
Defects and Subsequent
Title Defects within the periods
provided for in this
Agreement, then
Optionee
may either (i) terminate this Agreement and receive an immediate
return of the
Deposit, if any, from the Escrow Holder, after which no party shall have
any
further right, duty, obligation or liability hereunder to any other party
hereto; or (ii) waive such Title Defects
or Subsequent Title
Defects and elect
to close the sale and purchase of the Property in accordance with all other
terms and provisions hereof.
In order to
facilitate
Optionee's
examination
of title within the time
specified in this Agreement, Optionor
covenants and agrees that within three (3)
days following the execution of this Agreement by Optionor to furnish to
Optionee copies of all of Optionor's
title records affecting the Property in
possession of Optionor, including without limitation,
deeds or other sources of
Optionor's title, easements, restrictions,
reservations, rights-of-way, plats or
maps of survey, title insurance policies,
abstracts,
attorneys' title
opinion
and similar evidence.
6. Property Reports and Leases. Promptly following the execution of this
Agreement by Optionor, but in no event more than five (5)
days following
such
execution, Optionor shall deliver to
Optionee complete and legible copies of the
following documents, leases and reports pertaining to
the Property that are in
Optionor's possession or reasonably
accessible to Optionor:
a. The fully executed leases and related Addendum's and Exhibits with the
tenants and all
Service Contracts in Effect;
b. Optionor must provide all
property reports,
including all Environmental
Reports and
including the Indemnity Agreement from the prior Owners;
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c. Preliminary Title Report and copies of all exceptions, including the
Property Tax
Statement;
d. Complete working Drawings any other pertinent Plans and Specifications
related to the
building;
e. The existing loan documents, including the promissory note and Deed of
Trust;
f. The assignment of the existing indemnity agreement that Optionor is to
provide
Optionee for the environmental condition that exists at the
property;
g. Any other document in Optionor's possession that would reasonably
facilitate
Optionee's
inspection
and analysis of the Property and its
operation.
Optionor
represents
and warrants such documents to be true and
correct
copies of the underlying instrument, and makes no other representation or
warranty except as provided elsewhere herein, unless said documents were
prepared by a third party, in which case the Optionor shall look to their own
review of the document(s) to determine the
validity of each
document, without
Optionor representation or warranty.
7. Inspections. Optionee shall have five business (5) days following his
receipt of all the documents described in Section #6 and the Title Review
Documents described in Section #5 to inspect and
examine the Property
and the
documents provided by Optionor, and to perform any studies, reviews or tests
concerning the Property that Optionee may
desire (the "Inspection Period"). On
or before the expiration of the Inspection
Period, Optionee shall, in its sole
discretion, advise Optionor and Escrow Holder in writing of its desire to
proceed with the transaction contemplated
by this Agreement;
provided, however,
in the event such written notice is not so provided,
this Agreement shall be
deemed null and void, Optionee shall be entitled to an
immediate return of
the
Deposit, and the parties hereto shall have no further obligations hereunder
except for the return of said Deposit to
Optionee.
Optionee,
its employees,
agents and engineers
shall prior to the close of
escrow have the privilege of going upon the
Property from
time-to-time
during
normal business hours as needed to inspect,
examine and survey the
Property and
other engineering tests and studies, all at Optionee's sole cost and
expense;
provided, however, Optionee shall first notify and receive
approval for such
entries from Optionor, such approval not to be unreasonably withheld, and
further provided, that Optionee shall hold Optionor
harmless from any
damages
and claims of damages incurred through the exercise of such privilege by
Optionee.
8. Financing Contingency. None, the purchase will be all payable in cash,
except that Optionee shall either assume the existing
loan or pay any required
prepayment penalties on such loan.
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9. Close of Escrow.
Close of Escrow to
occur the
