Exhibit 10.1
OFFICE
LEASE—BUILD-TO-SUIT
BETWEEN
WALTER BROS. CONSTRUCTION CO.,
INC.
AND
MISSION COMMUNITY
BANK
THIS OFFICE LEASE— BUILD-TO-SUIT
(“Lease”), dated as of October 16, 2007, is entered
into between Walter Bros. Construction Co., Inc., a California
corporation (“Landlord”) and Mission Community Bank, a
California corporation (“Tenant”).
NOW
THEREFORE, for good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties agree as
follows:
Summary of Lease
Terms
Effective Date : October 16, 2007
Landlord : Walter Bros. Construction Co., Inc., a
California corporation.
Landlord’s Address For Notice
(“Landlord’s Address”) : 3220 South Higuera Street Suite 302,
San Luis Obispo, CA 93401
Tenant : Mission Community Bank, a California
corporation
Tenant’s Address For Notice
(“Tenant’s Address”) : 581 Higuera Street, San Luis Obispo, CA
93401
Real Property : The property at South Higuera Street and
Prado Road, San Luis Obispo, California more particularly described
as set forth in Exhibit A.
Building : A two (2) story building of approximately 14,
000 square feet in size of which approximately 12,880 square feet
could be considered “rentable,” delivered to Tenant at
Landlord’s cost in a shell condition as more particularly
described in Exhibit B.
Term : Fifteen (15) years.
Extended Term : Two (2) five (5) year options to run
consecutively following expiration of the initial Term.
Estimated Commencement Date (“Estimated
Commencement Date”) : Within two (2) years of the Effective Date of
this Lease .
Initial Base Rent Per Month (“Base
Rent”) :
$2.85 per square foot per month.
Security Deposit: There is no Security Deposit required,
subject to the provisions of Section 22.
Broker : [None.]
Lease Year: During the Term, each period of approximately
365 days. The first period will commence on the Commencement Date
and end on the day prior to the first anniversary of that period
and each successive period.
Permitted Use: Tenant shall use the Premises for banking and
banking related activities. No other uses are permitted
without the Landlord’s prior written consent, which shall not
be unreasonably withheld.
The
terms and provisions in the Basic Lease Information above and the
attached Exhibits are a part of the following Lease. The
definitions in the Basic Lease Information apply to all references
in this Lease to those terms and provisions. If this Lease and the
Basic Lease Information contain conflicting definitions, the Basic
Lease Information definition will control.
Section 1.
Premises
Landlord leases to Tenant the Real Property.
The Real Property will be improved with the Building to be
constructed by Landlord. The Building is described in the Work
Letter, attached as Exhibit B. The Real Property and the Building
are collectively referred to as the
“Premises.”
Section 2. Term
(a)
Commencement Date . The Term of this Lease will commence
(“Commencement Date”) on the earliest of the following
dates:
(i)
the date on which Tenant takes possession of all or a portion of
the Premises;
(ii) the date on which the Premises would have
been Ready for Delivery (defined in Exhibit B) but for Tenant
Delays (defined in Exhibit B); or
(iii) the date on which the Building is Ready
for Delivery.
The
Term of the Lease will continue for the period of time specified as
the Term or until this Lease is terminated as otherwise provided
for in the Lease.
(b)
Commencement Date Memorandum . On the Commencement Date,
Tenant will execute and deliver to Landlord a memorandum of the
Commencement Date in the form of attached Exhibit C
(“Commencement Date Memorandum”). The Commencement Date
Memorandum must acknowledge:
(i)
the Commencement Date;
(ii) the final square footage of the Premises;
and
(iii) Tenant’s acceptance of the
Premises.
(c)
Delays . If the Premises are not Ready for Delivery on the
Estimated Commencement Date, as it may be extended by any
Unavoidable Delays (defined in Exhibit B) and Tenant Delays, this
Lease will not terminate and Landlord will not be subject to any
liability. Notwithstanding the same, in the event the Premises are
not Ready for Delivery within six (6) additional months from the
Estimated Commencement Date for reasons other than Unavoidable
Delays (defined in Exhibit B) or Tenant Delays, at the option of
Tenant, this Lease will terminate, and Landlord will
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reimburse
Tenant its out of pocket costs for any Tenant Alterations
incorporated into the Premises prior to the Delivery and notice of
termination. In such event, Tenant will submit to Landlord
reasonably sufficient documents of all out of pocket cost invoices
and evidence of payment thereon, which Landlord will reimburse to
Tenant within thirty (30) of receipt.
(d)
Early Entry . With the prior written consent of Landlord,
Tenant may, at Tenant’s own risk, enter the Building prior to
the date that the Building is Ready for Delivery. The entry may be
made solely to install trade fixtures and equipment and shall be
subject to the following terms and conditions:
(i)
Tenant’s early entry may not interfere with the construction
of the Building or cause labor difficulties;
(ii) Tenant’s early entry must be on all
the terms and conditions of this Lease, other than the obligation
to pay Base Rent;
(iii) Tenant must provide evidence of insurance
that is satisfactory to Landlord;
(iv) Tenant must indemnify, defend, and hold
harmless Landlord and Landlord’s agents, employees, and
contractors against all claims, liability, and damages arising from
the early entry;
(v)
Tenant’s early entry does not constitute the commencement of
the Lease; and
(vi) Tenant must pay utility charges reasonably
allocated by Landlord.
(e)
Extended Term . Tenant is given the option to extend
the Term on all the provisions contained in this Lease other than
Base Rent, for two (2) additional five-year periods
(“Extended Term”) following expiration of the initial
Term, by giving notice of exercise of option (“Option
Notice”) to Landlord at least one hundred twenty (120)
but not more than one hundred and eighty (180) days before the
expiration of the Term; provided that, if Tenant is in default on
the date of giving the Option Notice, the Option Notice shall be
totally ineffective, or if the Tenant is in default on the date the
Extended Term is to commence, the Extended Term shall not commence
and this Lease shall expire at the end of the then-current
term.
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Section 3. Rent
(a)
Initial Base Rent . Tenant will pay to Landlord, at any
address that Landlord may designate in writing to Tenant, the Base
Rent. The rent must be paid, without the need for notice, demand,
offset, or deduction, on the first day of each calendar month. Upon
the Commencement Date, Tenant will pay to Landlord the first
month’s Base Rent. If the Term commences or ends on a date
other than the first or last day of a month, Tenant must pay on the
Commencement Date or the first day of the last month a Base Rent
prorated on a per diem basis with respect to the portion of the
month within the Term. All sums other than Base Rent that Tenant is
obligated to pay under this Lease will be deemed to be additional
rent due, regardless of whether those sums are designated as
“additional rent.” The term “Rent” means
the Base Rent and all additional rent payable under this
Lease.
(b) Adjustments to Base
Rent. On the first anniversary of the Commencement Date and
each anniversary of the Commencement Date during the Term, and any
Extended Term, the Base Rent shall be increased based on the
increase in CPI (as defined below) since the Commencement Date;
provided, however, in no event shall such new Base Rent increase by
less than three percent (3%) and no more than five percent
(5%). As used herein, the term “CPI” shall mean
and refer to the Consumer Price Index of the Bureau of Labor
Statistics of the Department of Labor for All Urban Consumers,
(1982-84 = 100), “All Items,” for Los
Angeles/Riverside/Orange County, California Area. The base
for computing the adjustment shall be the CPI for the month which
is three (3) months prior to the Commencement Date, and the Index
to be used to determine the adjustment shall be the Index published
for the month which is three (3) months prior to the adjustment
date (“Extension Index”). The adjustment shall be
set by multiplying the then applicable Base Rent by a fraction, the
numerator of which is the extension index and the denominator of
which is the beginning index. In the event the compilation
and/or publication of the CPI shall be transferred to any other
governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the CPI shall
be used to make such calculations. On adjustment of the
monthly rent provided in this Lease, Landlord shall send notice to
Tenant regarding such adjustment, but failure to do so shall not
constitute a waiver of Landlord’s right to collect the
increased amount.
(c)
Determination of Base Rent for Extension Option . In
the event that Tenant chooses to exercise one or more options to
extend the Term pursuant to Section 2(e), above, the Base Rent for
the Option Periods shall be equal to the prevailing market
rate. The parties shall have thirty (30) days after Landlord
receives the Option Notice in which to agree on the Base Rent for
the first year of the Extended Term. If the parties are
unable to agree on the Base Rent for the extended term within that
period, then within ten (10) days after the expiration of that
period each party, at its cost and by giving notice to the other
party, shall appoint a real estate appraiser with at least five (5)
years’ full-time commercial appraisal experience in the area
in which the premises are located to appraise and set the Base Rent
for the extended term. If a party does not appoint an
appraiser within ten (10) days after the other party has given
notice of the name of its appraiser, the single appraiser appointed
shall be the sole appraiser and shall set the Base Rent
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for the extended
term. If the two appraisers are appointed by the parties as
stated in this paragraph, they shall meet promptly and attempt to
set the Base Rent for the Extended Term. If they are unable
to agree within ten (10) days after the second appraiser has been
appointed, they shall attempt to elect a third appraiser meting the
qualifications stated in this paragraph within ten (10) days after
the last day the two appraisers are given to set the Base
Rent. If they are unable to agree on the third appraiser,
either of the parties to this Lease by giving ten (10) days’
notice to the other party can file a petition with the American
Arbitration Association solely for the purpose of selecting a third
appraiser who meets the qualifications stated in this
paragraph. Each party shall bear half the cost of the
American Arbitration Association appointing the third appraiser and
of paying the third appraiser’s fee. The third
appraiser, however selected, shall be a person who has not
previously acted in any capacity for either party. Within
thirty (30) days after the selection of the third appraiser, a
majority of the appraisers shall set the Base Rent for the Extended
term. If a majority of the appraisers are unable to set the
Base Rent within the stipulated period of time, the three
appraisers shall be added together and their total divided by
three; the resulting quotient shall be the Base Rent for the
Premises during the Extended Term. In setting the Base Rent
for the Extended Term, the appraiser or appraisers shall consider
the use to which the Premises are restricted under this Lease and
shall not consider the highest and best use for the Premises
without regard to the restriction on use of the Premises contained
in this Lease. After the Base Rent for the Extended Term has
been set, the appraiser shall immediately notify the parties, and
such determination shall be conclusive and binding on the
parties.
Section 4. Right of First
Refusal—Freestanding Building
(a) Subject
to the rights set forth in Subsection (b) below, in the event
Landlord desires to sell the Premises, or any portion of its
interest in the Premises, and shall either intend to list the
Premises for sale, or have received an acceptable bona fide offer
to purchase the Premises or such interest (the
“Offer”), Landlord shall give written notice of its
intent to sell (the “Notice of Intent to Sell”) to
Tenant, together with either the terms which would be acceptable to
Landlord for such sale (“Term Sheet”) or an executed
copy of the Offer setting forth all of the terms of the proposed
purchase and identifying the prospective purchaser. Tenant
shall then have an option to purchase the Premises or such interest
on the same terms and conditions as set forth in the Term Sheet or
Offer; provided that if the terms and conditions of the Offer
provide for an exchange of like kind of real property as payment of
all or a portion of the purchase price, Tenant may exercise its
option to purchase by stating in its written notice of exercise its
willingness to participate in an exchange transaction in which
Landlord shall identify certain real property which Tenant, at no
additional cost or expense to Tenant, shall acquire and exchange
with Landlord for the Premises on terms and conditions otherwise
consistent with the Offer. If no exchange is contemplated in
the Offer, Tenant shall have the further option of paying Landlord
in cash at closing the full amount of the purchase price of the
Premises or Landlord’s interest in the Premises,
notwithstanding any non-cash terms set forth in the Offer. If
Tenant elects to exercise its option, it shall give Landlord
written notice of such election within sixty (60) days after
receipt of the Notice of Intent to Sell. If Tenant fails to
exercise its option within such sixty (60)-day period, (i) Landlord
shall be free to accept an offer to sell the Premises or interest
therein on the terms set forth in the Term Sheet or Offer at any
time within ninety (90) days after the expiration of such sixty
(60)-day period and (ii) Tenant shall, upon request, deliver to
Landlord an acknowledgement of Tenant’s failure to exercise
the option and Landlord’s right to sell the Premises or
interest therein pursuant to this Section.
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(b)
Notwithstanding the foregoing, Landlord shall be free to convey,
transfer or assign the Premises or any portion of its interest in
the Premises without compliance with Subsection (a) in the event
that such conveyance, transfer or assignment is either (i) made to
any mortgagee of Landlord’s fee estate in the Premises,
provided that the lien of any fee mortgage or other security
instrument shall expressly remain subordinate to Tenant’s
leasehold interest herein created or (ii) made to any lineal
descendants (natural or adopted) of Landlord, the spouses of such
lineal descendants or any trust the total beneficial interest of
which is held by such lineal descendants or their
spouses.
Section 5.
Utilities
Landlord shall provide connections for
utilities to the perimeter of the shell of the Building. Tenant
will make all arrangements and pay all charges for water, sewer,
telephone, gas, garbage, electricity, and other utilities supplied
to or used on the Premises. This includes, without limitation,
paying any deposits and “hook up charges.” Landlord
will not be liable to Tenant for any interruption in or curtailment
of any utility service, nor will any interruption or curtailment
constitute constructive eviction or grounds for abatement of
rent.
Section 6.
Taxes
(a)
Real Property Taxes . Landlord will pay to the proper taxing
authorities, as they become due, all Real Property Taxes applicable
to the Premises after the Commencement Date (but excluding any fees
or assessments which specifically relate to Landlord’s
development process prior to the Commencement Date), and Tenant
will reimburse Landlord for those taxes as provided in clause (b)
below. The term “Real Property Taxes” includes, but is
not limited to, the following:
(i)
real property taxes;
(ii) possessory interest taxes;
(iii) business, license, or use
fees,
(iv) excises;
(v)
transit charges;
(vi) housing fund assessments;
(vii) open space charges;
(viii) childcare fees;
(ix) school fees;
(x)
any other assessments, levies, fees, or charges, general and
special, ordinary and extraordinary, unforeseen and foreseen
(including fees “in- lieu” of any tax or assessment)
that are assessed, levied, charged, confirmed, or imposed by any
public authority upon the Premises (or any real property comprising
any portion of the Premises) or its operations; but excluding, and
notwithstanding any other provision herein, , any assessments
relating to public improvements on Prado Road and the Prado Road
Highway 101 interchange, which shall be the sole responsibility of
the Landlord;
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(xi) all taxes, assessments, or other fees
imposed by any public authority on or measured by any Rent or other
charges payable under this Lease, including any gross income tax or
excise tax levied by the local government authority, the federal
government, or any other governmental body with respect to receipt
of rent, or upon, with respect to, or by reason of, the
development, possession, leasing, operation, management,
maintenance, alteration, repair, use, or occupancy by Tenant of the
Premises or any portion of the Premises, or on this transaction or
any document to which Tenant is a party creating or transferring an
interest in the Premises; and
(xii) any tax imposed in substitution,
partially or totally, of any tax previously included within the
definition or any additional tax, the nature of which was
previously included within the definition, together with the costs
and expenses (including attorney fees) of changing any taxes or
seeking the reduction in or abatement, redemption, or return of any
taxes, but only to the extent of any reduction, abatement,
redemption, or return.
Nothing contained in this Lease will require
Tenant to pay any franchise, corporate, estate, or inheritance tax
of Landlord, or any income, profits, or revenue tax or charge on
the net income of Landlord.
(b)
Tax Reimbursements . Tenant will pay to Landlord an amount
equal to the Real Property Taxes then due within fifteen (15) days
after delivery to Tenant by Landlord of an invoice. Landlord may,
at Landlord’s option, deliver statements from different
taxing authorities at different times or deliver all statements at
one time. In addition, Landlord may elect to collect Real Property
Taxes from Tenant in advance, on a monthly or quarterly basis,
based upon Landlord’s reasonable estimate of the Real
Property Taxes. If the amount of monthly or quarterly payments for
estimated Real Property Taxes received by Landlord from Tenant are
more or less than the actual Real Property Taxes due, an
appropriate adjustment will be made by Landlord and Tenant. Real
Property Taxes for partial tax fiscal years, if any, falling within
the Term, will be prorated. Tenant’s obligations for Real
Property Taxes for the last full or partial year of the Term will
survive the expiration or earlier termination of this
Lease.
(c)
Personal Property Taxes . Prior to delinquency, Tenant will
pay all taxes and assessments levied on trade fixtures,
alterations, additions, improvements, inventories, and other
personal property located or installed on the Premises by Tenant.
Tenant will also provide Landlord copies of receipts for payment of
all those taxes and assessments. To the extent any taxes are not
separately assessed or billed to Tenant, Tenant will pay the amount
as invoiced by Landlord.
(d)
Prorations. All payments of taxes or assessments, or both, except
permitted installment payments, shall be prorated for the initial
lease year and for the year in which the lease terminates. For
permitted installment payments of which at least the first
installment fell due before commencement of the term, Tenant shall
pay all installments falling due after commencement of the term.
For permitted installment payments extending beyond the expiration
of the term, Tenant shall pay those installment(s) falling due
before expiration of the term.
(e)
Tenant’s Right to Contest. Tenant may contest the legal
validity or amount of any taxes, assessments, or charges for which
Tenant is responsible under this lease, and may institute such
proceedings as Tenant considers necessary. If Tenant contests any
such tax, assessment, or charge, Tenant may withhold or defer
payment or pay under protest but shall protect
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Landlord and the Premises from any lien by
adequate surety bond or other appropriate security.
Landlord appoints Tenant as Landlord’s attorney-in-fact for
the purpose of contesting any taxes, assessments, or charges,
conditioned on Tenant’s preventing any liens from being
levied on the Premises or on Landlord (other than the statutory
lien of Revenue and Taxation Code Section 2187).
(f)
Exemptions. Tenant’s obligation to pay taxes or assessments
levied or charged against the Premises or improvements or against
specified personal property shall not include the following,
whatever they may be called: income or profits taxes levied or
assessed against Landlord by federal, state, or other governmental
agency; estate, succession, inheritance, or transfer taxes of
Landlord; or corporation, franchise, or profits taxes imposed on
the corporate owner of the fee title of the Premises. If, however,
during the term, taxes are imposed, assessed, or levied on the
rents derived from the Premises in lieu of all or any part of real
property taxes, personal property taxes, or real and personal
property that Tenant would have been obligated to pay under the
foregoing provisions, and the purpose of the new taxes is more
closely akin to that of an ad valorem or use tax than to an income
or franchise tax on Landlord’s income, Tenant shall pay the
taxes as provided above for property taxes and
assessments.
Tenant shall also defend and
indemnify Landlord and the Premises against liability for taxes and
other impositions in the nature of a tax on the right to do
business when Landlord’s collection of rent under this lease
is defined as doing business.
Section 7. Triple Net
Lease
This is a “triple net lease” and
the Rent will be paid by Tenant and be received by Landlord without
any deduction or offset whatsoever by Tenant, foreseeable or
unforeseeable. Except as expressly provided to the contrary in this
Lease, Landlord will not be required to make any expenditure, incur
any obligation, or incur any liability of any kind in connection
with this Lease or the ownership, construction, maintenance,
operation, or repair of the Premises.
Section 8.
Insurance
(a)
Tenant’s Obligations . Tenant will, at Tenant’s
expense, obtain and keep in force at all times the following
insurance:
(i)
Casualty Insurance . Casualty insurance insuring the
Building against fire, and extended coverage (including “all
risk” coverage, earthquake and volcanic action, and flood and
surface water insurance, if applicable) for the full replacement
cost of the Building, with deductibles and the form and
endorsements of the coverage as acceptable to Landlord, together
with, at Landlord’s option, rental value insurance against
loss of Rent in an amount equal to the amount of Rent for a period
of at least twelve (12) months commencing on the date of
loss.
(ii) General Liability Insurance . A
policy of commercial general liability insurance (occurrence form)
having a combined single limit of not less than Two Million Dollars
($2,000,000) per occurrence and Four Million Dollars ($4,000,000)
aggregate per location if Tenant has multiple locations, providing
coverage for, among other things, blanket contractual liability,
premises, products and completed operations, and personal and
advertising injury coverage.
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(iii) Workers’ Compensation and
Employer’s Liability Insurance . Workers’
compensation insurance having limits not less than those required
by state statute and federal statute, if applicable, and covering
all persons employed by Tenant in the conduct of Tenant’s
operations on the Premises. This must include the all states
endorsement and, if applicable, the volunteer’s endorsement,
together with employer’s liability insurance coverage in the
amount of at least One Million Dollars ($1,000,000).
(iv) Personal Property Insurance .
“All risk” property insurance, including boiler and
machinery comprehensive form, if applicable, covering damage to or
loss of any equipment of Tenant and coverage for the full
replacement cost, including electronic data processing equipment,
and coverage for the full replacement cost of the equipment,
including business interruption of Tenant (“Tenant’s
Property”). If the property of Tenant’s invitees is to
be kept in the Premises, the insurance should include
warehouser’s legal liability or bailee customers’
insurance for the full replacement cost of the property belonging
to invitees and located in the Premises.
(b)
Additional Insurance . Landlord may also carry any other
insurance that Landlord deems prudent or advisable, including,
without limitation, liability insurance in any amounts and on any
terms acceptable to Landlord but not in excess to that which is
commercially reasonable and standard in the community for a similar
building. Tenant will pay to Landlord an amount equal to the
premiums due on that insurance within fifteen (15) days after
delivery to Tenant by Landlord of an invoice for any premiums.
Landlord may, at Landlord’s option, elect to collect the
premiums from Tenant in advance, on a monthly or quarterly basis,
based on Landlord’s reasonable estimate of the premiums. If
the amount of monthly or quarterly payments for estimated premiums
received by Landlord from Tenant are more or less than the actual
premiums due, an appropriate adjustment will be made by Landlord
and Tenant.
(c)
General Insurance Provisions .
(i)
Insurance Companies . Insurance required to be maintained by
Tenant will be written by companies licensed to do business in the
state in which the Premises are located and having a “General
Policyholders Rating” of at least A, or a higher rating if
required by a lender having a lien on the Premises, as set forth in
the most current issue of “Best’s Insurance
Guide.”
(ii) Certificates of Insurance . Tenant
will deliver to Landlord certificates of insurance for all
insurance required to be maintained by Tenant in the form
acceptable to Landlord no later than seven (7) days prior to the
date of possession of the Premises. Tenant will, at least ten (10)
days prior to expiration of the policy, furnish Landlord with
certificates of renewal or “binders.” Each certificate
will expressly provide that the policies are not cancelable or
otherwise subject to modification except after thirty (30)
days’ prior written notice to the parties named as additional
insureds in this Lease. However, in the case of cancellation for
nonpayment of premium, the cancellation will not take effect until
at least (10) days’ notice has been given to Landlord. If
Tenant fails to maintain any insurance required in this Lease,
Tenant will be liable for all losses and costs resulting from that
failure; Landlord will have the right, but not the obligation, to
obtain insurance on behalf of Tenant, and Tenant will immediately
on demand pay Landlord the premiums on the insurance; and Landlord
may declare a default under this Lease.
(iii) Additional Insureds . Landlord and
any property management company of Landlord for the Premises must
be named as additional insureds under all of the policies required
by
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Section 8(a). The policies required under
Section 8(a)(ii) must provide for severability of
interest.
(iv) Primary Coverage . All insurance to
be maintained by Tenant must, except for workers’
compensation and employer’s liability insurance, be primary,
without right of contribution from insurance of Landlord. Any
umbrella liability policy or excess liability policy must provide
primary insurance. The limits of insurance maintained by Tenant
will not limit Tenant’s liability under this
Lease.
(v)
Waiver of Subrogation . Tenant waives any right to recover
against Landlord for damages to Tenant’s Property covered by
insurance. This fully waives, for the benefit of Landlord, any
rights and claims that might give rise to a right of subrogation in
favor of any insurance carrier. The coverage obtained by Tenant
pursuant to this Lease must include, without limitation and that
which is reasonably available to Tenant, a waiver of
subrogation endorsement attached to the certificate of
insurance.
(d)
Indemnification . Landlord will not be liable for any loss
or damage to person or property caused by theft, fire, acts of God,
acts of a public enemy, riot, strike, insurrection, war, court
order, requisition, or order of government body or authority, or
for any damage or inconvenience that may arise through repair or
alteration of any part of the Premises or failure to make any
repair. Tenant will indemnify and defend Landlord, by counsel
acceptable to Landlord, against any liabilities, including
reasonable attorney fees and court costs, arising out of or
relating to the following:
(i)
claims of injury to or death of persons or damage to property
occurring or resulting directly or indirectly from the use or
occupancy of the Premises, or from activities of Tenant,
Tenant’s invitees, or anyone about the Premises, or from any
other cause, except to the extent caused by Landlord’s
negligence or willful misconduct;
(ii) claims for work or labor performed, or for
materials or supplies furnished to or at the request of Tenant in
connection with performance of any work done for the account of
Tenant within the Premises; and
(iii) claims arising from any breach or default
on the part of Tenant in the performance of any covenant contained
in this Lease. The provisions of this Section 8(d) will survive the
expiration or termination of this Lease with respect to any claims
or liability occurring prior to the expiration or
termination.
Section 9. Repairs and
Maintenance
(a)
Landlord’s Obligations . Subject to the terms of this
Section, Landlord shall maintain the interior and exterior
structural portions of the roof, foundation, and load-bearing
portions of walls of the Building, excluding wall coverings,
painting, glass, and doors. Landlord will not be required to make
any repair resulting from:
(i)
any alteration or modification to the Building or to mechanical
equipment within the Building performed by, for, or because of
Tenant or to special equipment or systems installed by, for, or
because of Tenant;
(ii) the installation, use, or operation of
Tenant’s property, fixtures, and equipment;
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(iii) the moving of Tenant’s property in
or out of the Building or in and about the Premises;
(iv) Tenant’s use or occupancy of the
Premises in violation of Section 11 of this Lease or in the manner
not contemplated by the parties at the time of the execution of
this Lease;
(v)
the acts or omissions of Tenant and Tenant’s employees,
agents, invitees, subtenant’s, licensees, or
contractors;
(vi) fire and other casualty, except as
provided by Section 13 of this Lease; or
(vii) condemnation, except as provided in
Section 14 of this Lease.
Landlord shall have no obligation to make
repairs under this Section until a reasonable time after receipt of
written notice from Tenant of the need for repairs. Tenant waives
any right to repair at the expense of Landlord under any applicable
governmental laws, ordinances, statutes, orders, or regulations now
or later in effect.
(b)
Tenant’s Obligations . Except for the portions of the
Premises expressly required to be maintained by Landlord under
Section 9(a), Tenant, at Tenant’s expense, will maintain the
Premises in good order including, without limitation, subfloors and
floor coverings, walls and wall coverings, mechanical, electrical,
and plumbing systems, doors, windows, parking lots, and truck
aprons, gutters, and downspouts, landscaping, and any signage.
Tenant will enter into preventive maintenance and service contracts
with maintenance contractors for regularly scheduled maintenance
that are reasonably acceptable to Landlord for servicing all
mechanical systems, including but not limited to elevator, fire
sprinklers, fire extinguishers, backflow, hot water, heating, and
air-conditioning systems and equipment in the Premises, and Tenant
further agrees to provide Landlord with annual reports of such
maintenance. Tenant agrees to enter into a maintenance
contract with a reputable landscape contractor for the provision of
ground maintenance and landscaping, on no less than a weekly basis,
and for parking lot maintenance and light maintenance on no less
than a bi-weekly basis, and as needed, for the entire term of the
Lease, and acknowledges that a failure to fulfill its obligations
under this Section shall constitute a default under the
Lease. Tenant further agrees that Landlord may seal coat the
parking lot for the entire Center in which the Premises are located
on a scheduled basis, for which Tenant shall pay its pro rata
share. If Tenant fails, in the reasonable judgment of
Landlord, to maintain the Premises in good order, Landlord may
perform the maintenance, repairs, refurnishing, or repairing at
Tenant’s expense.
Section 10.
Alterations
(a)
Trade Fixtures and Alterations . Tenant will not make or
allow any additions, alterations, installations, or improvements in
or to the Premises (collectively, “Alterations”)
without the prior written consent of Landlord, which will not be
unreasonably withheld. Unless Landlord has waived this requirement
in writing, together with Tenant’s request for approval of
any Alteration, Tenant must also submit details about design
concept, plans and specifications, names of proposed contractors,
and financial and other pertinent information about any contractors
(including, without limitation, the labor organization affiliation
or lack of affiliation of any contractors), certificates of
insurance to be maintained by Tenant’s contractors, hours of
construction, proposed construction methods, details about the
quality of the proposed work and, if reasonably required by
Landlord, evidence of security (such as payment and performance
bonds) to assure timely completion of the work by the contractor
and payment by the contractor of all costs of the work. For any
Alteration that is visible from outside the Building, the
proposed
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Alteration must, in the
opinion of Landlord, also be architecturally and aesthetically
harmonious with the remainder of the Premises. If a Notice of
Completion is required for the work, Tenant must file it and
provide Landlord with a copy. Tenant must provide Landlord with a
set of “as-built” drawings for any work.
(b)
Complex Alterations . If the nature, volume, or complexity
of any proposed Alteration causes Landlord to consult with an
independent architect, engineer, or other consultant, Tenant will
reimburse Landlord for the reasonable fees and expenses incurred by
the Landlord. Before incurring consultant costs, Landlord will
deliver to Tenant an estimate for those costs. If any
Alteration will affect the basic mechanical, electrical, or
plumbing systems of the Building, Landlord may require that the
work be designed by consultants designated by Landlord.
(c)
Standard of Work . All work to be performed by or for Tenant
pursuant to the Lease will be performed diligently, in a
first-class manner, and in compliance with all applicable laws,
ordinances, regulations, and rules of any public authority having
jurisdiction over the Premises and Tenant and Landlord’s
insurance carriers. Landlord will have the right, but not the
obligation, to periodically inspect the work on the Premises and
may require changes in the method or quality of the
work.
(d)
Damage and Removal . Tenant assumes the risk of damage to
any of Tenant’s Alterations. Tenant will repair all damage to
the Premises caused by the installation or removal of these items.
All Tenant Alterations constructed on the Premises by Tenant as
permitted by this Lease shall be owned by Tenant until expiration
of the term or sooner termination of this Lease. Tenant shall not,
however, remove any improvements from the Premises nor waste,
destroy, or modify any improvements on the Premises, except as
permitted by this Lease. The parties covenant for themselves
and all persons claiming under them that the improvements are real
property. The foregoing language shall not be deemed to apply
to any of Tenant’s trade fixtures, which may be removed by
Tenant at the expiration of the Lease, provided that such removal
shall not cause any damage to the structures on the Premises, which
structures shall be surrendered to Landlord pursuant to Section 42,
below.
All improvements on the Premises at the expiration of the term or
sooner termination of this Lease shall, without compensation to
Tenant, then become Landlord’s property free and clear of all
claims to or against them by Tenant or any third person, and Tenant
shall defend and indemnify Landlord against all liability and loss
arising from such claims or from Landlord’s exercise of the
rights conferred by this section.
(e)
Liens . Tenant will promptly pay and discharge all claims
for labor performed, supplies furnished, and services rendered at
the request of Tenant and will keep the Premises free from all
mechanics’ and materialmen’s liens. Tenant will provide
at least ten (10) days’ prior written notice to Landlord
before any labor is performed, supplies are furnished, or services
are rendered at the Premises, and Landlord will have the right to
post notices of nonresponsibility on the Premises. If any lien is
filed, Landlord may take any necessary action to remove the lien,
and Tenant will pay Landlord any amounts expended by Landlord,
together with interest at the Applicable Interest Rate from the
date of expenditure.
Section 11. Use
The
Premises will be used only for the Permitted Use and for no other
uses. The use will be otherwise consistent with any applicable
governmental laws, ordinances, statutes, orders, and
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regulations and any declaration of covenants,
conditions, and restrictions (“CC&Rs”) or any
supplement to these that has been or will be recorded in any
official or public records concerning the Premises or any portion
of it, including, but not limited to, all provisions of the
Americans with Disabilities Act [42 U.S.C.A §§12101 et
seq.]; except to the extent that the use results from (a) any work
to be done by Landlord pursuant to this Lease, and (b) any work
necessitated by defects in the construction of the Building. The
judgment of any court of competent jurisdiction, or the admission
of Tenant in any action or proceeding against Tenant, regardless of
whether the Landlord is a party, that Tenant has violated any legal
requirement in the condition, use, or occupancy of the Premises,
will be conclusive of that fact as between Landlord and Tenant.
Tenant will not commit waste, overload the floors or structure of
the Premises, subject the Premises to any use that would cause
damage or raise or violate any insurance coverage, permit any
unreasonable odors, smoke, dust, gas, substances, noise, or
vibrations to emanate from the Premises, take any action that would
constitute a nuisance or would disturb, obstruct, or endanger any
other person, take any action that would abrogate any warranties,
or use or allow the Premises to be used for any unlawful purpose.
Landlord will not be liable to Tenant nor will this Lease be
affected if any parking is impaired by moratorium, initiative,
referendum, or regulation. Tenant will promptly comply with the
reasonable requirements of any board of fire insurance underwriters
or other similar body now or later constituted.
Section 12. Environmental
Provisions.
(a)
Environmental Compliance . Tenant shall, at its sole cost
and expense, comply with all federal, state and local laws and
regulations relating to the storage, use, handling and disposal of
hazardous, toxic or radioactive matter (collectively,
“Hazardous Materials”). Tenant represents and
warrants that, except for materials falling within the definition
of Hazardous Materials which are normally used and properly
disposed of in the ordinary course of Tenant’s business,
neither Tenant, nor its agents, servants, employees, contractors,
nor anyone else acting on Tenant’s behalf will store, dispose
of, produce, use, transport or manufacture any Hazardous Materials
on the Premises. Tenant shall notify Landlord and provide to
Landlord a copy or copies of any environmental entitlements or
inquiries related to the Premises.
(b)
Remediation . The clean-up and disposal of any Hazardous
Materials located or released onto or about the Premises by Tenant
or its agents, contractors or employees shall be performed by
Tenant at Tenant’s sole cost and expense and shall be
performed in accordance with all applicable laws, rules,
regulations and ordinances, pursuant to a site assessment and
removal/remediation plan prepared by a licensed and qualified
geotechnical engineer and submitted to and approved in writing by
Landlord prior to the commencement of any work. The foregoing
notwithstanding, Landlord in Landlord’s sole and absolute
discretion may elect, by written notice to Tenant, to perform the
clean-up and disposal of such Hazardous Materials from the
Premises. In such event, Tenant shall pay to Landlord the
actual cost of same upon receipt from Landlord of Landlord’s
written invoice therefore.
(c)
Landlord’s Right of Entry . Notwithstanding any other
term or provision of this Lease, but subject to the provisions of
Section 45, “Regulator Requirements”, Tenant shall
permit Landlord or Landlord’s agents or employees to enter
the Premises at any time, upon reasonable notice, to inspect,
monitor and/or take emergency or long-term remedial action with
respect to Hazardous Materials on or affecting the Premises or to
discharge Tenant’s obligations hereunder with respect to such
Hazardous Materials when Tenant has failed, after demand by
Landlord, to do so. All costs and expenses incurred by
Landlord in connection with performing Tenant’s obligations
hereunder shall be reimbursed by Tenant to Landlord within ten (10)
days of Tenant’s receipt of written request
therefore
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(d)
Expiration and Termination Procedures . Upon expiration or
termination of this Lease and upon the request of Landlord, Tenant
will perform all of the following activities at Tenant’s sole
expense:
(i)
all remedial or other work identified in the environmental
assessment in accordance with Section 12(b) and all applicable
environmental laws; and
(ii) all corrective, remedial, repair, or other
work necessary to correct any alleged violations, deficiencies, or
hazards noted by any environmental governmental agency;
and
(e)
Tenant’s Indemnification of Landlord . Tenant will
indemnify, protect, defend, and hold harmless Landlord and
Landlord’s partners, directors, officers, employees,
shareholders, lenders, agents, contractors, and each of their
respective successors and assigns (individually and collectively
“Landlord Indemnitees”) from all claims, judgments,
causes of action, damages, penalties, fines, taxes, costs,
liabilities, losses, and expenses arising (directly or indirectly)
as a result of or in connection with Tenant’s or
Tenant’s employees, agents, customers, visitors, invitees,
licensees, contractors, designees, or subtenant’s
Tenant’s employees, agents, customers, visitors, invitees,
licensees, contractors, designees, or subtenant’s
(“Tenant’s Parties) breach of any prohibition or
provision of Section 12, or the presence of any Hazardous Materials
on or under the Premises during the Term or any Hazardous Materials
that migrate from the Premises to other properties, as a result
(directly or indirectly) of Tenant’s or Tenant’s
Parties’ activities, or failure to act where Tenant had a
duty to act, on or in connection with the Premises.
This obligation by Tenant to indemnify,
protect, defend, and hold harmless Landlord Indemnities includes,
without limitation, costs and expenses incurred for or in
connection with any investigation, cleanup, remediation,
monitoring, removal, restoration, or closure work required by the
Agencies because of any Hazardous Materials present on, under, or
about the Premises; the costs and expenses of restoring, replacing,
or acquiring the equivalent of damaged natural resources if
required under any environmental law; all foreseeable consequential
damages; all reasonable damages for the loss or restriction on use
of rentable or usable space or of any amenity of the Premises; all
reasonable sums paid in settlement of claims; reasonable attorney
fees; litigation, arbitration, and administrative proceeding costs;
and reasonable expert, consultant, and laboratory fees. Neither the
written consent of Landlord to the presence of Hazardous Materials
on or under t
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