Exhibit 10.19
TABLE OF CONTENTS
1. DEFINITIONS:
Lease Year:
Common Area (if any):
Open Parking Area (if any):
Controlled Parking Area (if any):
Floor Area:
MRWPCA:
Center:
2. PREMISES:
3. TERM OF LEASE:
4. RENTAL:
5. CHRONIC DELINQUENCY
6. ADJUSTMENT OF FIXED RENT:
7. SECURITY DEPOSIT:
8. GOVERNMENTAL INTERVENTION:
9. DESIGNATIONS, MAINTENANCE, REPAIR AND COST
REIMBURSEMENT OF COMMON AREAS AND MANAGEMENT
OF THE CENTER (IF ANY):
10. PARKING IN OPEN PARKING AREA:
11. BUSINESS PURPOSE:
12. COMPLIANCE WITH LAW:
13. USES AND CLEANLINESS:
14. ASSIGNMENT AND SUBLETTING:
15. ACCEPTANCE OF PREMISES /"AS IS" CONDITION:
16. LIENS:
17. ACCESSION:
18. WASTE:
19. HOLD-OVER TENANCY:
20. REAL PROPERTY, GLASS AND OTHER INSURANCE:
21. LIABILITY AND WORKERS' COMPENSATION INSURANCE:
22. PERSONAL PROPERTY TAXES AND REIMBURSEMENT FOR
REAL PROPERTY TAXES:
23. DAMAGE OR DESTRUCTION OF DEMISED PREMISES:
24. PROHIBITED ACTS:
25. INSPECTION:
26. BANKRUPTCY OR INSOLVENCY:
27. DEFAULT AND REENTRY:
28. LESSOR-LESSEE LIABILITY:
29. INTEREST OF DELINQUENCIES:
30. ATTORNEY'S FEES:
31. NON-WAIVER OF BREACH:
32. CONDEMNATION:
33. UTILITIES:
34. HEIRS AND ASSIGNS:
35. NOTICES:
36. CONSTRUCTION:
37. LAYOUT OF THE DEMISED PREMISES AND SURROUNDING AREA OWNED
BY LESSOR:
38. NUMBER AND GENDER:
39. MARGINAL TITLES:
40. MODIFICATION:
41. TIME OF ESSENCE:
42. PAYMENTS NOT IN SUBSTITUTION:
43. CONVEYANCE BY LESSOR:
44. SIGNS AND ADVERTISING:
45. STATEMENT OF LESSEE:
46. JANITORIAL SERVICE:
47. SUBORDINATION:
48. COMPETITION
49. GOVERNMENT FEES:
50. LESSEE'S IMPROVEMENTS:
51. GARBAGE, REFUSE, TRASH, COLLECTION & REIMBURSEMENT:
52. SPRINKLER SYSTEM:
53. MERCHANT'S ASSOCIATION:
54. RIGHT OF FIRST REFUSAL:
55. TRANSFER FEE:
56. NO PARTNERSHIP:
57. HAZARDOUS MATERIALS:
58. WATER USE/SHORTAGE DISCLOSURE,
ASSESSMENTS AND FINES:
59. QUITCLAIM DEED:
60. RECORDING:
61. SURRENDER OF PREMISES
62. LIMITATION TO LANDLORD'S PERSONAL LIABILITY:
63. ALTERATIONS/IMPROVEMENTS:
64. AMERICANS WITH DISABILITIES ACT:
65. NOTICE OF SURRENDER:
66. REAL ESTATE BROKERAGE FEE:
67. LESSOR LOAN OR SALE:
68. ATTORMENT:
69. MUTUAL WAIVER OF RIGHT OF SUBROGATION:
70. MISCELLANEOUS PROVISIONS:
LEASE EXHIBIT "A"
LEASE EXHIBIT "B"
LEASE EXHIBIT "C" - GRAY & BATTEY LEASE AGREEMENT
SUPPLEMENTS & ADDENDUMS
LEASE ADDENDUM "1", "2", "3"
- - -
PERSONAL GUARANTEE
PERCENTAGE RENTAL AGREEMENT
ABSOLUTE NET LEASE
This Lease, made and entered into on the date appearing in the
signature block hereof, by and between,
Jeff Davi & Anthony G. Davi Jr. (hereinafter referred to as
Lessor), and Community Bank of Central California, jointly and
severally, (hereinafter referred to as Lessee), without regard to
number or gender.
WITNESSETH:
This Lease shall be absolutely net to Landlord. Landlord
shall receive all rents free and clear of any taxes, assessments,
liens, charges or expenses of any nature whatsoever incurred in
connection with the ownership or operation of the Tenant spaces
or the entire building and parking lot, except as stated in the
following paragraph. Tenant shall pay, prior to delinquency, to
Landlord or to the persons or entities respectively entitled
thereto, as the case may be, all taxes, assessments, liens,
charges, utility and service charges, insurance premiums and all
other costs and expenses in connection with the ownership or
operation of the Tenant spaces and the entire building and the
parking lot. Upon failure of Tenant to pay any of the same,
Landlord shall have the same rights and remedies as otherwise
provided for in this Lease for the failure of Tenant to pay
rent. In addition Tenant shall maintain building and parking lot
in first class condition throughout the entire term of this
lease, except as stated in the following paragraph.
It is agreed and understood that the intent of the Lessor
and Lessee in the execution of this lease is that Lessee will
assume all responsibility, managing care and maintenance of the
building in accordance with all of the terms and conditions of
this lease for the initial 10-year term. During that term,
Lessee shall make any needed replacements improvements or repairs
to the entire building without any exception as they are deemed
needed by the landlord in accordance with the provisions of this
lease. Lessee's responsibility under this lease shall exclude
pre-existing hazardous materials as per paragraph 57 of this
Lease. Lessees responsibility under this lease shall exclude
pre-existing structural conditions as defined in Appendix "A"
(recommended immediate needs) of the "Property Condition Report"
dated July 12, 2002 by Professional Service Industries , Inc.
provided that Lessee's use and or actions do not trigger the
requirement that a pre-existing structural condition be repaired,
corrected or modified.
Lessor and Lessee both acknowledge and agree that throughout
this lease there are references made to the Lessee reimbursing
the Lessor for items including but not limited to bills,
payments, taxes, insurance costs, repairs, improvements, Lessor
and Lessee agree that any reference to a reimbursement to Lessor
during the initial term of this lease may also mean a payment by
Lessee of a bill, tax, cost, or assessment directly to a vendor
or an entity due payment for such service. During this initial
term (10 years) it is the intention that Lessor will have no
management fee and receive no reimbursement as set forth in the
lease rather Lessee will pay all costs directly when due on
behalf of Lessor. Only in the event that Lessee fails to make a
payment and Lessor makes the payment on Lessee's behalf would the
Lessee reimburse to Lessor for such costs, during the initial
term.
At the expiration of the term as during the option years,
the terms will revert to a triple net lease with Landlord taking
over management and operation of the building and the Lessee will
then reimburse landlord for their prorata share of all triple net
expenses, except as set forth in Lease Addendum No 2 "1st option
to renew".
The Parties enter into this Agreement to supersede all prior
oral and written agreements affecting the rights, interests and
responsibilities of the Parties in all of the property, to
provide for a term for Tenant's leasehold, to provide for an
option to further extend the term, and otherwise to state all
terms and conditions of the leasehold.
1. DEFINITIONS:
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 terms 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 Area (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 Parking 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.
Floor Area: 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.
MRWPCA: 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 and 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.
2.1) Care of Premises. Notwithstanding anything to the
contrary in this Section, Tenant recognizes that the building
enjoys a unique, highly-visible location and that Landlord has a
special interest in the appearance, the appearance and quality
level of tenant's goods and services and the behavior, appearance
and department and service attitudes of Tenant and its
employees. In addition, the appearance of the Premises and
behavior and service attitude of employees will have a meaningful
and substantial effect upon the image and services as perceived
by guests. Accordingly, Tenant agrees that the interior and
exterior presentation of the building shall be subject to review
and observation by Landlord at any time. Dress attire, behavior,
customer service actions and service attitudes of Tenant and
employees shall be subject to review by Landlord at any time.
The goods and services, the appearance of the goods and services
shall be subject to review by Landlord at any time. If Landlord
determines in its reasonable discretion that the appearance or
presentation of the building or the goods, services and
appearance of Tenant and employees are not appropriate, it shall
so inform Tenant and Tenant shall have fifteen (15) days to bring
the matter into a condition acceptable to Landlord. If the
Building is not brought into the condition specified by Landlord
within five (45) days after written notice by Landlord, then
Tenant shall be deemed to be in default hereunder, and Landlord
may exercise any remedies prescribed herein.
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 within 6 months of 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 therefrom, but
in that event the rent and commencement of term shall not start
until the time when Lessor can deliver possession. In the event
that Lessor can not deliver possession within these 6 months
this lease shall be void.
4. RENTAL: Lessee hereby covenants to pay to Lessor, at
the time and place and computed in the manner hereinafter set
forth, 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 10% of the amount then due and shall be paid
along with the rent. Lessee further agrees to pay $35.00 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.
6. ADJUSTMENTS OF FIXED RENT: The Base rent is fixed for the
initial 10 year lease term. Notwithstanding the provisions of
paragraph 4, the initial fixed rent shall be adjusted annually
during each option to renew on the first day of the second option
lease year and thereafter at twelve-month intervals for so long
as this Lease or any extension thereof shall be in effect, unless
otherwise agreed in writing by Lessor and Lessee, as follows: on
the first day of the second option lease year, if exercised.
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 . Excepting, however, that the 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 tern
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. INTENTIONALLY LEFT BLANK
8. GOVERNMENTAL 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. DESIGNATION, 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, sidewalks, landscaped areas,
parking areas (if any being provided), driveways, entrances,
exits, lighting standards, exterior lighting fixtures, water
fountains, exterior stairways, comfort stations, corridors,
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 install kiosk or other
free standing semi-permanent structures within the common areas,
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; furthermore,
Lessor may, in the manner provided by law, reduce the parking
area below the minimum for the Center specified by the zoning
authority having jurisdiction over the Center. During the term
of this Lease, Lessor shall operate, manage, maintain, all of
the above and other areas and facilities from time to time
provided and designated by Lessor for the general use and
convenience of Lessee and other Lessees of the described common
areas. 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, within reason, 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 close temporarily for safety, maintenance, construction or
other purpose, all or any portion of such areas of facilities.
9.1) Subject to the limitations as set forth in this Lease,
Lessor hereby grants to Lessee, Lessee's employees,
patients, clients, customers, patrons, sub-tenants,
licensees, agents and service suppliers, a
non-exclusive license to use the common area, as it is
designated by Lessor from time to time, during the term
of this Lease, while being treated, conducting or
receiving consultations, shopping or having business in
the Center, said license being a license in common with
Lessor and other lessees from Lessor now or hereafter
located in the Center, and said use is to be in
accordance with such Common Area Rules and Regulations
as may be promulgated by Lessor from time to time and
by which Lessee hereby agrees to abide. It is agreed
that Lessor at all times during the term of this Lease
shall have sole and exclusive control of the common
area and may exclude or restrain any person from use or
occupancy thereof, excepting, however, those persons to
whom such non-exclusive license has been granted as
hereinabove provided for and who makes use of the
common areas in accordance with said Common Area Rules
and Regulations. Lessee shall cooperate with Lessor
and all other lessees of Lessor herein to cause the
common area to be maintained in the uniform, clean and
efficient manner, and to be kept free and clear of any
obstructions created by Lessee or its employees,
patients, clients, agents, sub-tenants, licensees,
service suppliers, customers and patrons or otherwise
resulting from Lessee's operations. It shall be the
duty of Lessee to see that the common area is used only
by the persons, in the manner, and for the purposes
specified herein, and in accordance with the
aforementioned Common Area Rules and Regulations made
by Lessor from time to time. If, in the opinion of the
Lessor, unauthorized persons are using any portion of
the common area, or such area is being used in an
unauthorized manner by reason of the presence of Lessee
in the demised premises, Lessee shall, promptly upon
demand of Lessor, take appropriate steps to remove or
restrain all such unauthorized persons or to prevent
the common area from being used in an unauthorized
manner. If parking is provided, Lessor shall
specifically have, without limitation, the right to
require Lessee and the agents, servants, and employees
of Lessee to park solely in Lessee's parking spaces
which are co-exclusively licensed under the provisions
of Paragraph 9, herein, or if such spaces are
unavailable, inadequate or filled, upon the public
streets or in other public parking areas.
9.2) Subject to Lessee's compliance with subparagraph 3)
below, Lessor shall exercise reasonable care to
maintain the common area in a neat, clean and orderly
condition and state of repair.
9.3) Lessee agrees to reimburse Lessor for Lessee's share
(as defined below and specified in Exhibit "A") of all
of the costs incurred by Lessor in keeping the Center,
the common area clean and clear, and in maintaining and
operating the same in good condition and repair. Such
costs include, but are not limited to, real property
taxes and assessments and other taxes, and rent against
the common areas, Insurance, all sums expended by
Lessor for the maintenance and/or operation of the
Center, the common areas, professional management of
the center, or a reasonable allowance to Lessor for
Lessor's management and supervision of the Center, and
an allowance for amortization and depreciation to
provide Lessor with a fund to replace capital
improvements in the common areas at such time as
replacement may be necessary or desirable in Lessor's
sole opinion. Costs for maintenance and operation of
the common areas shall include without limitation:
cost of resurfacing, painting, painting exterior walls
of Center, exterior building awnings including
replacement, roofs, downspouts, plumbing, electrical,
HVAC, parking area, signage and striping, cleaning,
sweeping and other janitorial services, policing,
construction and maintenance of refuse receptacles,
planting, gardening and relandscaping, irrigation,
supplies, trash removal, directional or other signs and
other markers, car stops, lighting, utilities, and a
reasonable depreciation allowance on improvements,
machinery and equipment used in connection with the
common areas, 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 (including
capital expenditures where required for replacement to
equal the original installations) such security
protection and traffic direction as may be furnished,
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 and Lessee
agree that this percent is the Common Area Percentage
appearing in Exhibit "A," attached hereto. Lessee
shall pay to Lessor an amount estimated by Lessor to be
Lessee's said share of the common area costs (as
hereinabove defined), on the first day of each calendar
month, commencing on the date the term of this Lease
commences, or on the first day of the calendar month
following the month the term of this Lease commences if
the term commences on a day other than the first day of
the month, as the case may be, and continuing during
the term of the lease and any extensions thereof.
Lessor may adjust the monthly common area charge at the
end of each accounting period on the basis of Lessor's
reasonably anticipated costs of the following
accounting period. An accounting period is a calendar
year or if a fiscal year, commencing each July 1 and
ending each June 30, except for the first accounting
period shall commence on the date the term of the Lease
commences and the last accounting period shall end on
the date the term of the Lease expires or
terminates. Lessor shall furnish to Lessee, at
Lessee's request, a statement showing the total common
area costs, Lessee's share of common area costs for the
accounting period, and the payments made by Lessee with
respect to each accounting period, within a reasonable
period after the end of such period, covering the
accounting period just ended. Each statement shall be
prepared and signed, and certified to be correct by
Lessor. If Lessee's share of common area costs for the
calendar year is less than the payments made by Lessee,
Lessee shall pay Lessor the deficiency within ten (10)
days after the receipt of the statement. If Lessee's
payments made during the calendar year exceed Lessee's
share of common area costs, Lessor shall credit Lessee
the excess time at the time Lessor furnishes the
statement to Lessee for the succeeding period. Lessor
shall keep as a 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.
In addition to the foregoing, Lessee agrees to
reimburse Lessor for Lessee's share of the costs
incurred by Lessor in relandscaping the common area and
areas adjacent thereto, purchasing and installing a new
sign or signs to designate the buildings, and making
such other capital improvements in the common area as
Lessor may from time to time determine. Lessee's share
of such capital improvements shall be determined in the
manner next hereinabove set forth and shall be payable
within ten (10) days of the delivery to Lessee of the
statement therefore.
Lessee further agrees to reimburse Lessor promptly for
Lessee's share of the premiums upon all insurance
procured by Lessor, including but not limited to
property, liability and other insurance, covering
liabilities incurred or created in the common area,
said policies to be issued by a responsible liability
carrier with policy limits of not less than five
million dollars ($5,000,000.00) for liability as to any
one person, five million dollars ($5,000,000.00) as to
any one accident, and one million dollars
($1,000,000.00) for property damage. Lessee's share of
said premiums shall be computed in the same manner as
set forth above for determining Lessee's share of the
common area maintenance. Lessor agrees to deliver to
Lessee, upon request, a true copy of the policy taken
out by Lessor hereunder, or a certificate of such
insurance.
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,
sub-tenants, 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. The
above shall be paid directly by Lessee for the initial
10 year term.
9.4) In addition to the other rights herein reserved, Lessor
shall have the right, in its sole discretion:
a. To determine the nature and extent of the common
area, whether the same
shall contain surface,
underground or multi-decked parking, and at any
time to make such changes in the physical
character, size, location, design, number, layout
and operating of the common area as Lessor may
deem advisable, including, but not limited to the
locating or relocating of driveways, entrances,
exits, the direction and flow of traffic, vehicle
parking spaces, the installation of restricted use
area, common area restroom (if provided),
lighting, rest areas, planted areas, fountains,
signage, directories, telephones, and other
changes to the common area in general;
b. 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 Center.
Lessee agrees to conform to and abide by all such
rules and regulations in its use of the common
area;
c. To designate or prescribe upon written notice to
Lessee, certain parts of sections within the
common area in close proximity to the buildings,
in which Lessee's employees, agents, sub-tenants,
and concessionaires shall be forbidden to park
their automobiles and, in the event that Lessor
makes such a designation, Lessor may require such
persons to use only space in the common area or
available public space outside thereof as is not
so restricted. Upon written request of Lessor,
Lessee shall, within seven (7) days thereafter,
furnish to Lessor the automobile license numbers
of the automobiles customarily used by the
above-specified persons.
10. PARKING 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 CLEANLINESS: 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 property 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.
Tenant shall not permit any odors, smoke, dust, gas,
substances, noise or vibrations to emanate from the Premises or
from any portion of the Common Areas as a result of Tenant's or
any Tenant's Party use thereof nor take any action which would
constitute a nuisance or would disturb, obstruct, or endanger any
other occupants or approved tenant's of the Premises or
elsewhere, or interfere with their use of their respective
premises or Common Areas. Storage outside of the Building of
materials, vehicles, or any other items is prohibited. Tenant
shall not use or allow the Premises for any immoral, improper or
unlawful purpose, nor shall Tenant cause or maintain or permit
any nuisance in or about the premises. Tenant shall not come in
or suffer the commission of any waste in, on or about the
Premises. Tenant shall not allow any sale by auction upon the
premises or place any loads upon the floors, walls or ceilings
which could endanger the structure or place any harmful
substances in the drainage system of the building. No waste,
materials, or refuge shall be dumped upon or permitted to remain
outside the Building. Landlord shall not be responsible to
Tenant for the noncompliance by any other tenant or occupant of
the Building with any of the above referenced rules or any other
terms or provisions of such Tenants or occupant's use, lease or
the contract. 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, unless the
third party is a similar financial institution. 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 or rent. Lessee
agrees that the consent of Lessor shall not be deemed or
considered unreasonably withheld if Lessor refuses to consent to
the assignment of this Lease to any person, firm or corporation
other than an entity similar to that operated by Lessee with a
financial statement and condition satisfactory to Lessor. 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's costs including attorney fees in connection with this
Article. As a further condition to Lessor's consent, the parties
agree that it shall be reasonable for the Lessor's consent to be
predicated upon the proposed assignee's or sublessee's
willingness to pay additional rent in an amount then designated
by Lessor to be the fair market rental for the premises.
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.
14.3)intentionally left blank
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
our 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, roof, exterior walls and any contents situated
therein, Lessor's said obligation shall not include however, any
damage or repairs necessitated by the acts or omission of the
Lessee, Lessees agent, employees and/or customers or invitees.
Lessee to engage a licensed HVAC company to service the air
conditioning system on the Lessee's premises (if any) and Lessee
will pay the actual cost of such servicing contract, directly
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. 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
maybe needed.
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 demised 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, walls, 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
demised premises shall become and be the property of the Lessor.
Any light fixture that may be installed by Lessee in, upon or
about the demised 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 two
hundred percent (200%) 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 200%
the amount of the last month's rent. This 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 lease 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's 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 Lessee's share of any and all property
insurance premiums paid by Lessor for coverage of the real
property, and liability for the Center. Lessee's share shall be
the percent appearing in Exhibit "A", Real Property and Liability
Insurance and Plate Glass Insurance. The deductibles, if any,
shall be included in the common area expense. Lessee shall pay
each such reimbursement to Lessor monthly along with the rent.
Upon the anniversary of the insurance policy year, Lessor shall
notify Lessee of the new premium amount to be paid. It is
understood that the insurance policy year may be different from
the lease year. All insurance maintained by Landlord shall be
for the sole benefit of Landlord and under Landlord's sole
control.
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.
22. PERSONAL PROPERTY TAXES AND REIMBURSEMENT FOR REAL
PROPERTY TAXES: Lessee shall pay before delinquency any and all
taxes, assessment, license fees and public charges levied,
assessed, or imposed upon Lessee's fixtures, or about the demised
premises, or personal property located in, upon, or about the
demised premises, or on account of or by reason of any business
or other activity conducted by Lessee in, upon or about the
demised premises. Lessee further covenants during the term of
this Lease to pay Lessee's share of any and all real property
taxes and assessments levied upon the land and improvements of
the Center, which such share shall be the percentage appearing in
Exhibit "A," Property Taxes, all those taxes and assessments
which may from time to time be levied upon the Center by the
County of Monterey, City of Monterey or by any other competent
government body. Any such taxes and assessments which are
payable by Lessee shall be paid by Lessee to Lessor. Lessee's
said share shall be as set forth in Exhibit "A." All such taxes
and assessments which are payable by Lessee shall be paid by
Lessee to Lessor monthly along with the rent. Each tax year the
Lessor shall set forth the amount of such taxes monthly. The
term "real property taxes" shall also include all expenses
reasonably incurred by Lessor in seeking reduction by the taxing
authorities of real property taxes applicable to the Premises or
in contesting said real property taxes.
Lessee shall not be required to pay any municipal,
county, state or federal income or franchise taxes of Lessor, or
any municipal, county, state or federal estate, succession,
inheritance, or transfer taxes of Lessor. If at any time during
the term the laws concerning the methods of real property
taxation prevailing at the commencement of the term are changed
so that a tax or excise on rents or any such tax, however
described, is levied or assessed against Lessor as a direct
substitution in whole or in part for any real property taxes,
Lessee shall pay before delinquency (but only to the extent that
it can be ascertained that there has been a substitution to pay)
the substitute tax or excise on rents.. Lessee's share of any
tax or excise on rent shall be substantially the same as, and a
substitute for, the payment of such real property taxes as
provided in this Lease.
23. DAMAGE OR DESTRUCTION OF DEMISED PREMISES: If the
demised premises or the building in which they are situated are
totally destroyed or damaged more than thirty percent (30%) in
value by fire or the elements during the term of this Lease,
Lessor shall thereupon have an election to terminate this Lease.
In the event that a government agency by ordinance, regulation,
interference or refusal to permit the restoration of the premises
and/or the building to substantially the same condition prior to
such loss, or restrict the extent of the reconstruction so as to
make the property not economically feasible, in the sole
discretion of the Lessor, then the Lessor shall thereupon have
the option to terminate this Lease, and in the event that Lessor
should exercise such election to terminate this Lease, all rights
and obligations herein shall cease and terminate, except for rent
and other sums accrued and unpaid to date of such destruction or
damage. Written notice terminating this Lease pursuant to
Lessor's election aforesaid shall be given to Lessee not later
than ninety (90) days after such damage or destruction. If the
demised premises or the building in which they are situated are
so damaged by fire, or the elements, and Lessor does not exercise
Lessor's election to terminate said Lease as hereinabove
provided, and Lessor restores said demised premises at its own
expense then, and in that event, this Lease shall remain in full
force and effect. In the event that repairs are to be made
pursuant to this paragraph, Lessor shall be entitled to and shall
have possession of the necessary parts of said premises for such
purpose, and if there is any substantial interference with
Lessee's business on account of such repairs, Lessee shall be
entitled to a proportionate reduction of rent during the time
that said repairs are being made.
If Lessor should elect to repair or rebuild because of
any damage or destruction, as hereinabove provided, Lessor's
obligation shall be limited to restoration of the demised
premises or the building in which they are situate similar to the
condition that Lessor provided at the commencement of the term
hereof, or any reasonable substitute therefore so long as such
substitute meets applicable code requirements, and Lessee shall
fully repair or replace all exterior signs, trade fixtures,
equipment, display cases, and other installations originally
installed by Lessee at its own expense, including, but not
limited to, all of Lessee's betterment's and leasehold
improvements.
If the demised premises or the building in which they are
situated are totally destroyed or damaged more than thirty
percent (30%) in value by fire or the elements during the term of
this Lease, Lessee shall thereupon have an election to terminate
this lease only in the event that Lessor can not restore the
premesis to a condition similar to its original condition within
12 months of receipt of written notice from Lessee that Lessee
intends to terminate this lease if the premises can not be
restored to its original condition within 12 months of the
written notice.
24. PROHIBITED ACTS: Lessee covenants not to do and not
permit to be done, anything in, on or about the premises, and not
to bring, nor keep anything therein which will in any way affect
fire or other insurance upon the entire property, building, or
any of its contents other than as shall be specifically allowed
elsewhere in the Lease, nor which will violate any law or
regulation which now may be or which may hereafter be enacted or
promulgated by any public authority, or which in any way may
obstruct or interfere with the rights of others, or injure, or
annoy them. Lessee further covenant that should there be an
increase in fire or other insurance rates on any insurance held
by Lessor on the demised premises which increase is caused by or
is attributable to the equipment, installations, alterations, or
the business conducted, or us of occupancy by Lessee, the monthly
rental to be paid by Lessee shall be raised correspondingly to
cover the full increase in such insurance rates.
25. INSPECTION: Lessor and Lessor's agents shall have the
right to enter into and upon the demised premises at all
reasonable times, and in emergencies at all times, for the
purposes of inspecting the same, protecting Lessor's reversion,
making repairs, additions, or alterations to the premises or to
any property owned or controlled by Lessor, or, for any lawful
purposes. At any time within one hundred twenty (120) days prior
to the expiration of the term hereof, Lessor shall have access to
the premises for the purpose of exhibiting them to prospective
tenants for their inspection and for posting "for lease" or "for
rent" signs upon the premises. Due to the nature of the use it is
understood that certain areas of the building may need Lessee to
accompany Landlord for access to the premesis Landlord agrees and
will comply with having the Lessee accompany the Landlord in
these areas.
26. BANKRUPTCY OR INSOLVENCY: If Lessee should execute a
voluntary assignment hereof without the written consent of Lessor
first had and obtained, or, if there should occur any assignment
hereof by operation of law on account of any act of Lessee, or,
if Lessee, or any member of Lessee if Lessee be a partnership of
joint venture, should file any petition in bankruptcy or any
petition for extension or composition of creditors, or become
insolvent, or make any assignment of any of Lessee's property for
the benefit of Lessee's creditors, or, if any involuntary
bankruptcy proceedings should be initiated against Lessee (and
Lessee fails to obtain the dismissal of such proceedings within
ninety (90) days after same are filed) or, if any receiver be
appointed of the business or of the assets of Lessee, this Lease,
at the election of Lessor, shall thereupon immediately terminate,
and said Lease or any interest in said leasehold, shall not be
assignable by any process of law, or treated as an asset of
Lessee thereafter, nor shall it pass under the control of any
trustee or assignee of Lessee by virtue of any control of any
such proceeding or act of Lessee. If any such act or proceeding
shall occur, Lessor may terminate this Lease by the mailing of
written notice to the Lessee's Address For Notice as shown in
Exhibit "A", attached hereto, stating Lessor's election to so
terminate, and all rights of Lessee hereunder shall thereupon
terminate, and Lessor may promptly reenter upon said premises.
27. DEFAULT AND REENTRY: If Lessee defaults in the
payment of any rent as required hereby to be paid or, if Lessee
defaults in the performance of any term, covenant, condition, or
obligation required hereby to be performed by Lessee and such
default continues for a period of ten (10) days after written
notice is mailed to Lessee of such default, then, in addition to
any other remedy Lessor may have by operation of law, Lessor
shall have the right, without any other or further notice or
demand, to enter upon the premises, and eject all persons from
the premises and remove all property therefrom, using such lawful
force as may be necessary to so do, in which case Lessor shall
not be responsible for the care or safety of persons or property
so removed and Lessee hereby waives any and all claims for loss
or damage to property or persons so removed from the demised
premises by Lessor pursuant hereto, and Lessor, in the case of
any such default by Lessee in the payment of rent or in the
performance of any one of the terms, covenants, conditions or
obligations herein contained, may declare this Lease terminated,
take possession as above provided, and retain all prepaid rentals
and other prepaid expenses or deposits as Lessor's damages or
Lessor may, without terminating this Lease or declaring a
forfeiture of Lessee's rights hereunder, retain all prepaid
rentals and other prepaid expenses or deposits, re-let the
premises or any part thereof, as the agent and for the account of
Lessee upon such terms and conditions as Lessor may deem
advisable, either with or without equipment or fixtures left
remaining in the demised premises by Lessee, in which event the
rents received on such re-letting and retained prepayments or
deposits shall be applied first to the expenses of such
re-letting and collection of rent, including any necessary
renovation and alteration of the premises, and reasonable
attorney's fees, and any actual real estate commissions paid, and
thereafter the balance of any such rents, retained prepayments or
deposits shall be applied to the payment of all sums due or to
become due to Lessor hereunder and, if a sufficient sum shall not
be thus realized to pay such sums and other charges, Lessee shall
pay to Lessor any deficiency monthly, notwithstanding Lessor
may have received rental in excess of the rental stipulated in
this Lease in previous or subsequent months, and Lessor may bring
an action therefore as such monthly deficiency shall arise, in
which event Lessor shall be entitled to recover reasonable
attorney's fees for commencing and prosecuting such suit.
Lessor shall be entitled to each and all of Lessor's remedies,
and the election to proceed with one may not be construed as
excluding the subsequent use of any other. The remedies herein
granted to Lessor shall not be construed to be any limitation of
any rights, or remedies otherwise available to Lessor, but shall
be construed to be in addition thereto. Lessee shall allow any
reentry by Lessor as aforesaid without hindrance and Lessor shall
not be liable in damages for any such reentry, or be guilty of
trespass or forcible entry.
28. LESSOR-LESSEE LIABILITY: Lessor shall not be liable
for any loss or damage that may result to any property belonging
to Lessee, located in, on, or about said demised premises from
any cause whatsoever, nor shall Lessor be liable for any damage
or injury to any person or personal injury or property occurring
or arising in, on, or about the demised premises from any cause
whatsoever. Lessee hereby covenants to save and hold Lessor,
Lessors agent and manager, harmless from and to defend and
indemnify Lessor, Lessors agent and manager against any suit or
claim or demand for damage or injury to any person or property
sustained in, on, or about the demised premises from any cause
whatsoever during the term.
29. INTEREST ON DELINQUENCIES: Lessor shall be entitled to
interest on any amounts owing from time to time from Lessee to
Lessor at the maximum rate permitted by law. The foregoing shall
apply to any and all payments that Lessor may from time to time
be entitled to receive from Lessee including, but not limited to,
rents, real property taxes and assessments, fire insurance
premiums, common area maintenance and repair costs, common area
capital improvement costs, and any and all other amounts that
Lessor may from time to time be entitled to receive from Lessee.
30. ATTORNEY'S FEES: If either party hereto should bring any
suit against the other party hereto for the breach of any term,
covenant, condition or obligation herein contained to be kept, by
such other party, for the recovery of any sum due hereunder, or
to recover possession of the premises, or for any summary action
for forfeiture of this Lease, or to prevent further violations of
any of the terms, covenants, conditions or obligations, or, for
any other relief then, and in that event, the prevailing party in
such suit for summary action shall be entitled to a reasonable
attorney's fee to be fixed by the court.
31. NON-WAIVER OF BREACH: Lessor's failure to take
advantage of any default or breach of covenant on the part of
Lessee shall not be construed to be a waiver thereof; nor shall
any custom or practice which may grow up between the parties
hereto in the course of administering this Lease be construed to
waive or to lessen the right of Lessor to insist upon the
performance of any and all terms, covenants, conditions, and
obligations hereof, or to exercise any right given Lessor on
account of any default. A waiver of a particular breach or
default shall not be deemed to be waiver of the same or any other
subsequent breach of default. Lessor's consent to or the
approval of any act by Lessee requiring Lessor's consent or
approval shall not be deemed to waive or render unnecessary
Lessor's consent to or approval of any subsequent or similar act
by Lessee.
32. CONDEMNATION: If title to all of the premises is taken
for any public or quasi-public use under any statute, or by right
of eminent domain, or by private purchase in lieu of eminent
domain, or if title to so much of the premises is so taken that,
in the sole opinion of Lessor, a reasonable amount of
reconstruction of the premises will not result in the premises
being a practical improvement, or reasonably suitable for
Lessee's continued occupancy for the uses and purposes for which
the premises are leased, then, in either event, this Lease shall
terminate on the date that possession of the premises, or part of
the premises, is taken, unless Lessor elects that said Lease
continue.
32.1)If this Lease continues under provisions of Paragraph
1, above, the Then Fixed Rent shall be reduced in the
same proportion that the floor area of the portion of
the premises so taken (less any additions to the
premises by reconstruction) bears to the original floor
area of the premises. Lessor shall, at Lessor's own
cost and expense, make all necessary repairs or
alterations to the building in which the premises are
located so as to constitute the portion of the building
not taken a useable unit. There shall be an equitable
abatement of rent during such restoration period.
32.2)All compensation awarded or paid upon a total or
partial taking of the fee title of the premises shall
belong to Lessor, whether such compensation be awarded
or paid as compensation for diminution in value of the
leasehold or of the fee provided, however, that Lessor
shall not be entitled to any award made to Lessee for
depreciation or damage to, or cost of removal of stock
and fixtures, if any.
32.3)Each party agrees to execute and deliver to the other
all instruments that may be required to effectuate the
provisions of this paragraph, and Lessee shall assign
to Lessor and appoint Lessor to act for Lessee in all
matters of condemnation except for Lessee's specific
rights to damages as set forth in Paragraph 3, above.
33. UTILITIES and ANCILLARY SERVICES: Lessee will, during the
term of this Lease, pay for all charges for utilities and
ancillary services furnished, delivered to or performed upon the
demised premises including, but not limited to, electricity, gas,
telephone, telecommunication systems, water, sewer (including
MRWPCA charges), city, county, district, state or federal
surcharges and or user fees, storm drain fees, taxes or
assessments, cable, garbage/refuse collection and recycling,
insect and rodent control, neighborhood improvement and traffic
impact assessments, fees and taxes and all other ancillary user
cost , including interest, late fees and fines, resulting from
the occupancy of the premised by the Lessee.. Lessee shall, if
feasible, pay for the above services directly to the public
utility or other suppliers. In the case of MRWPCA and other
charges, which are attributable to the demised premises but are
billed to Lessor, Lessee agrees to reimburse Lessor as provided
for herein, monthly along with the rent. Lessor or his agent
makes no representation or warranty whatsoever as to the
availability of water, gas, electricity, or any other utility and
ancillary services for Lessee's intended use and Lessee
acknowledges that Lessee has made Lessee's own investigation with
respect to the availability of any and all utility and ancillary
services required by Lessee and that Lessee is satisfied with
respect to such availability, and that Lessor had no obligation
whatsoever with respect thereto. Lessee shall obtain, install,
and pay for, an individual meter for each of the utility services
required by Lessee upon Lessee's demised premises; except that
Lessor shall provide a gas meter and an electric meter for the
premises.
If, for any reason, Lessee cannot obtain an individual or
separate meter or billing for Lessee's demised premises then, and
in that event, Lessor shall utilize Lessor's best efforts to make
any such required utility services available to Lessee through
Lessor's existing common meters and Lessor shall bill to Lessee
and the Lessee shall pay to Lessor within ten (10) days of the
statement therefore such amount as Lessor shall determine to be
Lessee's fair and equitable share of any such utilities and
Lessor's determination in this regard shall be final, binding and
conclusive upon Lessee. All such statements for utility services
shall be presented to Lessee on a regular basis and within
reasonable period of time after receipt of Lessor's statement
from the applicable utility. Lessor shall not be liable in
damages or otherwise for any failure or interruption of any
utility service being furnished the Premises and no such failure
or interruption shall entitle Lessee to terminate or modify this
Lease in any way.
Not withstanding anything to the contrary contained
herein, Lessee agrees that Lessor may arrange for professional
direct billing to Lessee for the commonly provided metered
utilities and ancillary services provided to Lessee though or by
the Lessor, and Lessee agrees to pay for such direct billing and
cost separate from the rent payment owed to Lessor, according to
this Lease and that the costs and direct billings for utilities
and ancillary services shall not be consider a reduction or
offset in the rental payment due Lessor but shall be in addition
to the rent. It is understood and agreed between Lessor and
Lessee that in the event such direct billing payments are not
made when due, it shall be considered a substantial default under
the Lease and Lessee agrees that Lessor may bring summary
proceedings for payment and or eviction as if the rent were not
paid.
34. HEIRS AND ASSIGNS: Except as herein otherwise
provided, all terms, conditions, covenants and obligations
contained in this Lease shall be binding upon the inure to the
benefit of the heirs, successors, legal representatives and
assigns of the parties hereto.
35. NOTICES: All notices, statements, demands, requests,
approvals, authorizations, offers, agreements, appointments or
designations under this Lease by either party to the other shall
be in writing and shall be served personally upon the other party
or deposited in the United States mail, certified mail, return
receipt requested, postage prepaid, and addressed to Lessee at
Lessee's Address For Notice as it appears on Exhibit "A",
attached hereto, or to such other address as Lessee nay from time
to time designate to Lessor in writing, and addressed to Lessor
as it appears on Exhibit "A", or at such other address as Lessor
or his agent may from time to time designate, to Lessee in
writing.
36. CONSTRUCTION: Each term, covenant, condition and
obligation of this Lease to be performed by Lessee shall be
construed to be both a covenant and condition.
37. LAYOUT OF THE DEMISED PREMISES AND SURROUNDING AREA
OWNED BY LESSOR: Lessor does not guarantee a continuance of the
passage of light and air over the demised premises or over any of
the real property adjoining the demised premises and Lessor
expressly reserves all air space over the demised premises. Any
reference in this Lease with respect to the location of reference
in this Lease with respect to the location of buildings, parking
areas, if any, and other improvements shall not be deemed to be a
warranty or representation. Lessor hereby reserves the right at
any time to make any alterations or additions to or to build
additional stories on any presently existing building owned by
Lessor. Lessor also reserves the right to construct other
buildings or improvements upon the surrounding real property
which may be owned by Lessor from time to time, and to make
alterations or additions thereto and to build additional stories
on any such buildings and to modify and reallocate space within
the center. Lessor further reserves rights-of-ways and easements
in, over, under, and through Lessee's demised premises for
sprinkler and fire-detection system purposes, power and telephone
lines, plumbing lines, air conditioning, heating and ventilation
systems, and conduits for all utilities, together with the right
to locate, relocate, and maintain the same at any and all times
and from time to time in, upon, over, or under Lessee's demised
premises without any rebate of rent or liability for any
interruption or disturbance caused by Lessor, its agents,
servants or employees, or by any utility company employee or
representative; provided, however, that Lessor shall use
reasonable discretion in exercising its rights pursuant to this
sentence.
38. NUMBER AND GENDER: Whenever the singular number is
used in this Lease and when required by the context, the same
shall include the plural, and the masculine gender shall include
the feminine and neuter genders, and the word "person" shall
include corporation, firm, partnership, or association. If there
be more than one Lessee, the obligations imposed herein upon
Lessee shall be joint and several.
39. MARGINAL TITLES: The marginal headings or titles to
the paragraphs of this Lease are not a part of this Lease and
shall have no effect upon the construction and interpretation of
any part of this Lease.
40. MODIFICATION: This instrument contains all the
agreements and conditions made between the parties to this Lease
and may not be modified orally or in any other manner than by an
agreement in writing signed by all of the parties to this Lease
or other respective successor or successors in interest.
41. TIME OF ESSENCE: Time is of the essence of each term,
covenant, condition and obligation of this Lease.
42. PAYMENTS NOT IN SUBSTITUTION: Except as otherwise
expressly stated, each payment required to be made by Lessee
shall be in addition to and not in substitution for other
payments to be made by Lessee.
43. CONVEYANCE BY LESSOR: If, during the term of this Lease,
Lessor shall sell Lessor's interest in the demised premises, then
from and after the effective date of such sale, Lessor shall be
released and discharged from any and all obligations and
responsibilities under this Lease, except those already accrued;
provided, however, that any such purchaser shall assume all of
Lessor's obligations to be performed hereunder, including the
obligation to refund the security deposit at the expiration of
this term.
44. SIGNS AND ADVERTISING: No sign, advertisement, or notice
shall be inscribed, painted or otherwise displayed, or screens,
awnings, shades, decorations, symbols, fixtures or any other
thing affixed on any part of the outside of the demised premises
(or inside of the demised premises where such may be seen through
windows or otherwise by passersby) except of such color, size, or
style, and in such place on or in said premises as shall first be
fixed, designated and approved by Lessor in writing. Lessor may
at his option provide one directory at a location and of a design
to be determined by Lessor. Such directory shall display
Lessee's practice or business name as agreed by Lessee and
Lessor. Lessee agrees to pay for the cost of such directory
identification.
Lessor further acknowledges and agrees as a condition of
this lease, to comply with all Lessors existing building signage
criteria, and or to any new signage criteria that the Lessor, any
governmental agency or business or trade association may require
from time to time. Lessee covenants to Lessor and agrees to
install all initial signage within 45 days from taking possession
of the premises, and for new signage within 60 days from written
notice from Lessor that a new sign is required, all of which is
subject to the terms and conditions of this article.
45. STATEMENT OF LESSEE: Lessee shall at any time and from
time to time upon not less than ten (10) days prior written
request by Lessor, execute, acknowledge and deliver to Lessor a
statement in writing certifying that this Lease is unmodified and
in full force and effect if such is the fact (or if there has
been any modification thereof that the same is in full force and
effect as modified and stating the modifications) and the dates
to which rentals and other charges have been paid in advance, if
any. It is expressly understood and agreed that any such
statement delivered pursuant to this paragraph may be relied upon
by any prospective purchaser of the complex or estate of Lessor
or by the mortgagee or assignee of any mortgages of any mortgage
or the trustee or beneficiary of any deed of trust constituting a
lien upon the leased premises or upon property including the
lease premises or any part thereof.
46. JANITORIAL SERVICE: Lessor shall have no
responsibility whatsoever for the furnishing of any janitorial
service to the demised premises. Janitorial service within the
demised premises shall be the sole responsibility and at the sole
cost of Lessee. Lessee covenants and agrees to obtain sufficient
janitorial service to maintain the demised premises in a clean
and orderly condition at all times. Lessee further agrees to
deposit Lessee's refuse and garbage only in those areas
designated in writing by Lessor from time to time.
47. SUBORDINATION: This Lease is and shall be subordinate
to any encumbrance now of record or recorded after the date of
this Lease affecting the building, other improvement, and land of
which the premises are a part. Such subordination is effective
without any further act of Lessee. Lessee shall from time to
time upon request from Lessor execute and deliver any documents
or instruments that may be required by a lender to effect any
subordination. If Lessee fails to execute and deliver any such
documents or instruments, within ten (10) days, Lessee
irrevocably constitutes and appoints Lessor as Lessee's special
attorney in fact to execute and deliver any such documents or
instruments.
48. LESSEE'S PERPETUAL OPERATION: During the option years
,if exercised, Lessee covenants that he will remain open for
business during the entire option period or any extension
thereof. .
49. GOVERNMENT FEES: All governmental fees, charges,
district assessment fees or charges, including but limited to,
fire, police, sanitary service, water, utilities, parking,
parking adjustments or parking assessments for the Lessee use or
occupancy of the premises shall be the responsibility of the
Lessee, and payable to Lessor along with the rent or paid direct
to the appropriate agency as required. Lessee further covenants
and agrees to encourage all Lessee's employees to utilize
long-term public parking lots and garages (instead of public
street parking), and agrees to purchase monthly parking permits
for said employees from the appropriate governmental agency.
50. LESSEE'S IMPROVEMENTS: Insofar as the space demised to
Lessee within and including said building is concerned, Lessee's
obligation shall be to complete those items necessary for
Lessee's intended use of the demised premises, all of which must
be installed in conformity with the latest applicable local and
state rules, regulations, ordinances, and building codes, and in
conformity with the plans and specifications, to be prepared by
Lessee's architect and submitted to Lessor for Lessor's approval,
in writing, prior to commencement of Lessee's work, which said
approval by Lessor shall not be unreasonably withheld.
Construction shall be diligently prosecuted to completion by
Lessee, provided, however, that any prevention, delay or stoppage
due to strikes, lock-outs, labor disputes, acts of God, inability
to obtain labor or materials or reasonable substitutes therefore,
governmental restrictions, governmental regulations, governmental
controls, enemy or hostile governmental action, civil commotion,
fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform shall excuse
performance by such party for the period equal to any such
prevention, delay or stoppage. The acceptance of said premises
for the purpose of performing Lessee's work in the premises, as
hereinabove defined, shall constitute an acknowledgment by Lessee
that the premises are in the condition called for by this Lease
and that Lessor has performed all its work with respect to the
premises.
All of Lessee's work shall be done on a lien-free basis
and shall be completed free and clear of all liens recorded or
recordable pursuant to the provisions of the Civil Code of the
State of California relating to mechanic's liens (Section 3109
et. seq.).
51. GARBAGE, REFUSE, TRASH, COLLECTION & REIMBURSEMENT:
Lessee acknowledges that the removal of garbage, refuse and trash
from the demised premises is the sole responsibility of Lessee,
and Lessee agrees to make such arrangements and pay for such
services as from time to time may be required to dispose of said
garbage, refuse and trash. Lessee further acknowledges that it
is Lessor's concern that all portions of the premises and the
building and adjoining lands within and upon which the premises
are located are at all time clean and sanitary, and Lessee
therefore agrees to abide by Lessor's judgment as to whether
Lessee's garbage, refuse and trash removal services are
adequate. In the event that Lessor deems that more frequent or
more effective service is desirable, Lessee agrees to follow the
directions of Lessor with respect to improvements of said
services under penalty of default and further agrees to reimburse
Lessor for all costs and expenses incurred by Lessor in removing
Lessee's garbage, refuse and trash should Lessor, in his sole
judgment, determine that said action is desirable. Lessee
further agrees to abide by Lessor's noticed rules and regulations
relating to use of refuse containers and storerooms that from
time to time may be available to tenants to deposit Lessee refuse
only within Lessee's demised premises or in those areas
designated by Lessor in writing from time to time. Lessor may
arrange for the collection and removal of Lessee's and other
Lessee's garbage and refuse which is so deposited, and shall
advance on behalf of Lessee and other Lessee's for their
respective prorata shares of such costs. Lessee agrees to
reimburse Lessor for such advances within five (5) days of
receipt of said bill.
52. SPRINKLER SYSTEM (IF ANY): Lessee acknowledges that if
the premises are currently provided with an automatic sprinkler
system it is ISO rated. Should Lessee's occupancy, use,
improvements or remodeling within, upon or about the demised
premises cause any reduction in the rating of said system
anywhere in the building, at any time, in which the premises are
located, or result in the requirement by insurance carrier or a
governmental agency that a sprinkler system be installed, Lessee
shall immediately undertake all such automatic sprinkler work,
all at Lessee's sole cost and expense. Furthermore, Lessee shall
at all times be responsible for and shall pay for any and all
modifications as are necessary to maintain the ISO rating on said
system within the demised premises. Lessee shall, during the
term of this Lease and any extension thereof, at Lessee's sole
cost and expense, maintain and service said sprinkler system,
detection and monitoring system, keeping all in good working
order, including but not limited to, periodic service and
inspection charges, periodic testing, water users fees,
assessments and assessment district charges, and all other
governmental fees and charges thereto.
53. INTENTIONALLY LEFT BLANK
54. RIGHT OF FIRST REFUSAL: If at any time during the term
of this Lease, Lessee shall desire to sell Lessee's interest in
this Lease or to the business conducted by Lessee upon the
demised premises to a bonafide buyer then, and in that event,
Lessee shall first give written notice to Lessor by personal
service upon the Lessor of the terms and conditions of the
proposed bonafide sale, and Lessor shall have the right for a
period of fifteen (15) working days after personal service of a
copy of such proposed bonafide sale upon lessor to purchase the
interest that is proposed to be sold for the same price and upon
the same terms and conditions as stated in the notice. If Lessor
fails to exercise the same within such fifteen (15) day period,
Lessee shall have the right, for a period of sixty (60) days
following the date on which notice was given and subject to the
terms and conditions hereinabove set forth in Paragraph 13 with
respect to assignment and subletting, to sell such interest to
the proposed bonafide buyer designated in such notice upon the
terms and conditions specified therein. If such interest is not
so sold during such sixty (60) day period, it may not be sold
after without Lessor again having the right of first refusal
herein provided for.
55. 56. NO PARTNERSHIP: Lessor does not, in any way or
for any purpose become partners of Lessee in the conduct of its
business, or otherwise, or joint adventurer or a member of a
joint enterprise with Lessee. The provisions of this Lease
relating to the percentage rent payable hereunder are included
solely for the purpose of providing a method whereby the rent is
to be measured and ascertained.
57. HAZARDOUS MATERIALS: Lessee shall not at any time
during the term of this Lease use, or any extension, generate,
store or dispose of, on, under, or about the Premises any
hazardous substance, hazardous material, hazardous waste, toxic
substance, pollutants, contaminants, or related materials
(Hazardous Materials"), except, those, if any, listed in Exhibit
"A,", attached hereto and made a part hereof. For the purposes
of this covenant, Hazardous Materials shall include, but shall
not be limited to, substances defined as "hazardous substances"
or "pollutants or contaminants" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601 et seq., those substances
defined as "hazardous waste" by the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Section 6901 et seq., and by
Section 25316 of the California Health and Safety Code, and those
substances defined as "hazardous substances" in Section 25316 of
the California Health and Safety Code, and the regulations
adopted and publications promulgated pursuant to said laws.
Lessee shall indemnify, defend, and hold Lessor harmless from and
against all liability, including all foreseeable and
unforeseeable consequential damages, directly or indirectly
arising out of the use, generation, storage or disposal of
Hazardous Materials, including, without limitation, the cost of
any required or necessary repair, clean-up, or detoxification and
preparation of any closure or other required plans, to the full
extent that such action is attributable, directly or indirectly,
to the use, generation, storage or disposal of Hazardous
Materials on the Premises at any time. Lessee shall provide
written notice to the Lessor of any present or future hazardous
substance release that Lessee knows or has reasonable cause to
believe is or will be present on or under the Premises, within a
reasonable period of time after such release is discovered or
believed by the Lessee to be present. (See Health and Safety
Code Section 25359.71). Tenant shall indemnify, defend (by
counsel reasonably acceptable to Landlord), protect and hold
Landlord harmless from and against any and all claims,
liabilities, losses, costs, loss of rents, liens, damages,
injuries or expenses (including attorneys' and consultants' fees
and court costs), demands, causes of action or judgments directly
or indirectly arising out of our related to the use, generation,
storage, release or disposal of Hazardous Materials by Tenant or
any of Tenant Parties in, on, under or about the Premises, or the
Building which indemnity shall include, without limitation,
damages for personal or bodily injury, property damage, damage to
the environment or natural resources occurring on or off the
Premises, losses attributable to diminution in value of adverse
effects on marketability, the cost of any investigation,
monitoring, government oversight, repair, removal, remediation,
restoration, abatement, and disposal and the preparation of any
closure or other required plans, whether such action is required
or necessary prior to or following the expiration or earlier
termination of this Lease. Neither the consent by Landlord to
the use, generation, storage, release or disposal of Hazardous
Materials nor the strict compliance by Tenant with all laws
pertaining to Hazardous Materials shall excuse Tenant from
Tenant's obligation of indemnification pursuant to this Section
1.3H. Tenant's obligations pursuant to the foregoing indemnity
shall survive the expiration or earlier termination of this Lease.
57.1)HAZARDOUS MATERIALS REPORT: Lessee agrees that if
Lessee is unable for any reason to complete the
certification provided for in Paragraph 57.2 below,
Lessee shall obtain and deliver to Lessor within thirty
(30) days before or after the termination of this Lease
a hazardous substance report concerning the Premises
("Hazardous Materials Report"), the purpose of which
Hazardous Materials Report shall be to affirm that
Lessee shall be in compliance with all applicable laws,
ordinances, rules and regulations of any governmental
agency having jurisdiction concerning the use, storage
and/or disposition of hazardous materials on the
Premises at the termination of this Lease or any
extension thereof. Lessee shall obtain the Hazardous
Material Report at its sole cost and expense. For the
purposes of this report, a "hazardous Material" is
defined as any substance the existence or effect of
which is subject to any substance the existence or
effect of which is subject to Federal, State or local
regulation, investigation, correction or removal as
potentially injurious to public health or welfare.
Lessor and Lessee acknowledge that extensive local,
State and Federal legislation establishes broad
liability upon owners and/or user of real property for
the investigation and correction of such hazardous
material conditions. The Hazardous Material Reports
shall be in writing, and shall be prepared by a
licensed contractor or engineer competent to perform
such investigation on behalf of Lessee. If the
Hazardous Report shall indicate a condition requiring
correction or posing a potential liability to Lessor,
Lessee shall forthwith cure the condition (s) specified
in the Hazardous Materials Report at Lessee's sole cost
and expense, prior to the termination of this Lease.
57.2)HAZARDOUS MATERIALS CERTIFICATION BY LESSEE: Lessee
will execute an indemnification agreement and notarized
certification under penalty or perjury substantially as
follows:
a. that no hazardous materials other than those, if
any, listed in Exhibit "A" has been introduced to
the Premises.
b. that there has been no spillage of hazardous
materials listed in Exhibit "A" that such
materials have been properly stored in closed
containers in accordance with the law and disposed
of in accordance with the law.
c. that Lessee agrees to pay the cost of cleaning up
any contamination resulting from Lessee's use or
occupancy of the Premises and hold harmless and
indemnify Lessor and Lessor's agents for any
claims that result therefrom. Lessee shall deliver
such certification to Lessor within five days
before or after the termination for any reason of
Lessee's occupancy of the Premises. If Lessee
fails to so deliver such certification within the
time required, Lessee shall comply with the
provisions of Paragraph 56.1 above.
57.3)EMMISSION; STORAGE, USE AND DISPOSAL OF WASTE:
a. Emissions. Lessee shall not:
1) Permit any vehicle on the premises to emit
exhaust, which is in violation of any
governmental law, rule, regulation or
requirement.
2) Discharge, emit or permit to be discharged or
emitted, any liquid, solid or gaseous matter,
or any combination thereof, into the
atmosphere, the ground or any body of water
which matter, as reasonable determined by
Lessor or any governmental entity, does, or
may, pollute or contaminate the same, or is,
or may become, radioactive or does, or may,
adversely affect the (a) health or safety of
persons, wherever located, whether on the
Premises or anywhere else, (b) condition, use
o enjoyment of the Premises or any other real
or personal property, whether on the Premises
or anywhere else, or (c) Premises or any of
the improvements thereto or thereon including
buildings, foundation, pipes, utility lines,
landscaping or parking area.
3) Produce, or permit to be produced, any
intense glare, light or heat except within an
enclosed or screened area and then only in
such manner that the glare, light or heat
shall not be discernable from outside the
Premises.
4) Create, or permit to be created, any sound
pressure level which will interfere with the
quiet enjoyment of any real property outside
the Premises, or which will create a nuisance
or violate any governmental law, rule,
regulation or requirement.
5) Create, or permit to be create, any ground
vibration that is discernable outside the
Premises.
6) Transmit, receive or permit to be transmitted
or received, any electromagnetic, microwave
or other radiation which is harmful or
hazardous to any person or property in, or
about the Premises, or anywhere else.
b. Storage and Use
1) Storage. Subject to the uses permitted and
prohibited to Lessee under the lease. Lessee
shall store in appropriate leak proof
containers all solid, liquid or gaseous
matter, or any combination thereof, which
matter, if discharged or emitted into the
atmosphere, the ground or any body of water,
does or may (a) pollute or contaminate the
same, or (b) adversely affect the (i) health
or safety of person, whether on the Premises
or anywhere else, (ii) condition, use to
enjoyment of the Premises or any real or
personal property, whether on the Premises or
anywhere else, or (iii) Premises or any of
the improvements thereto or thereon.
2) Use. In addition, without Lessor's prior
consent, Lessee shall not use, store or
permit to remain on the Premises any solid,
liquid or gaseous matter, which is, or may
become radioactive. If Lessor does give its
consent, Lessee shall store the materials in
such a matter that no radioactivity will be
detectable outside a designated storage area
and Lessee shall use the materials in such a
manner that (a) no real or personal property
outside the designated storage area shall
become contaminated thereby or (b) there are
and shall be no adverse effects on the (i)
health or safety of person, whether on the
Premises or anywhere else, (ii) condition,
use or enjoyment of the Premises or any real
personal property thereon or therein, or
(iii) Premises to any of the improvements
thereto or thereon.
c. Disposal of Waste
1) Refuse Disposal. Lessee shall not keep any
trash, garbage, waste or other refuse on the
Premises except in sanitary containers and,
except for normal trash removal by Lessee,
shall regularly and frequently remove
extraordinary trash from the Premises.
Lessee shall keep all incinerators,
containers or other equipment used for
storage or disposal of such materials in a
clean and sanitary condition.
2) Sewage Disposal. Lessee shall properly
dispose of all sanitary sewage and shall not
use the sewage disposal system (a) for the
disposal of anything except sanitary sewage
or (b) excess of the lesser amount (i)
reasonably contemplated by the uses permitted
under this Lease or (ii) permitted by any
governmental entity. Tenant shall keep the
sewage disposal system free of all
obstructions and in good operating condition.
3) Disposal of Other Waste. Lessee shall
properly dispose of all of the waste or other
matter delivered to, stored upon, located
upon or within, used on, or removed from, the
Premises in such a manner that it does not,
and will not, adversely affect the (a) health
or safety of person, wherever located,
whether on the Premises or elsewhere (b)
condition, use or enjoyment of the Premises
or any other real or personal property,
wherever located, whether on the Premises or
anywhere else, or (c) Premises or any of the
improvements thereto or thereon including
buildings, foundation, pipes, utility lines,
landscaping or parking areas.
d. Information Lessee shall provide Lessor with any
and all information regarding hazardous or toxic
materials, in the Premises, including copies of
all filings and reports to governmental entities
at the time they are originated and any
information requested by Lessor. In the event of
any accident, spill of other incident involving
hazardous or toxic matter of which Lessee has
actual knowledge, Lessee shall immediately report
the same to Lessor and supply Lessor with all
information and reports with respect to the same.
All information described herein shall be provided
to Lessor regardless of any claim by Lessee that
it is confidential or privileged.
e. Compliance with Law Notwithstanding any other
provision in this Lease to the contrary, Lessee
shall comply with all laws, statues, ordinances,
regulations, rules and other governmental
requirements in complying with its obligations
under this lease, and in particular, relating to
the storage, use and disposal of hazardous or
toxic matter.
58. WATER USE / SHORTAGE DISCLOSURE / ASSESSMENTS AND
FINES: All parties to this lease acknowledge the following: In
Monterey County water is a scarce resource, due to recent drought
years, limitations on water use and consumption have been
implemented to water users in the past and will continue into the
future. These limitations include, but are not limited to:
water rationing; limitation/restriction of new fixtures;
limitation/restriction to businesses due to potential increase in
water use; implementation of fines for overages of water use;
implementation of fees resulting from new fixtures or water
hookups or increased water use. Lessee hereby agrees to comply
and abide by all rules, regulations and policies adopted by the
Monterey Water Management District or its successors, including
but not limited to the payment of fines, fees and assessments, as
a result of the occupancy and use of the premises by Lessee.
Lessee shall pay said amounts of pro-rata, or 100% if resulting
from Lessee use of premise promptly so as to avoid a lien being
placed upon Lessor's property by the district. Lessee may appeal
the decision of the district, provided Lessee's action does not
create a lien upon Lessor's property. Lessee is hereby informed
that if for any reason assessments, fees or fines are imposed
upon the property, Lessor may pay such assessments, fees or fines
and deduct them from the prepaid rents and/or the security
deposit and Lessee shall within ten (10) days from notice,
restore the prepaid rents and/or the security deposit, as
provided for in this lease. In the event Lessee's actions or lack
of actions results in a lien being placed upon Lessor's property,
Lessor may, in his sole discretion, declare Lessee in default and
terminate this lease upon ten (10) days advance written notice.
Lessor further acknowledges that no representation has been made
by Lessor, and A.G. Davi, Ltd. and/or its agents and
representatives about the Lessee's right to water use, increase
use or installation of additional water fixtures. Lessee agrees
to hold harmless and indemnify Lessor, and A.G. Davi, Ltd. and/or
its agents or representatives from any liability and costs
relating to this issue, including but not limited to assessments,
fines, fees, attorney fees and court costs.
59.
60. RECORDING: Lessee will not record this lease.
61. SURRENDER OF PREMISES: Upon expiration or termination of
this Lease, Lessee shall surrender possession of the premises in
the condition required by this Lease, and Lessee shall, at
Lessee's expense, a) remove all signage from the exterior and
interior of the premises and or building and or common areas, and
(b) remove all Lessees trade fixtures and personal property and
those claiming under Lessee from the premises and the property,
subject to the limitation, of this Lease agreement, and (c) clean
the premises including, but not limited to windows, carpets,
floors, walls, ceilings, (d) quit and deliver up the premises
peaceable and quietly and in as good order and conditions as the
same were in on the date the term of this Lease commenced,
ordinary wear and tear excepted. Additionally, all Lessee
alterations of the premises, at the election of the Lessor, will
be removed and the premises will be returned to the conditions as
at the time of the commencement of this Lease, at the expense of
the Lessee,(e) surrender all keys, any key cards, and any parking
stickers or cards, to Landlord, and advise Landlord as to the
combination of any locks or vaults then remaining in the Premises.
62. LIMITATION TO LESSOR'S PERSONAL LIABILITY: Lessee
shall look solely to Lessor's interest in the building and the
land of which the premises form a part for the recovery of any
claims, damages or judgment against Lessor, and if Lessor is (i)
a partnership, its partners whether general or limited, or (ii) a
corporation, its directors, officers or shareholders, or (iii) a
limited liability company, its members or (iv) a trust its
beneficiaries, shall never be personally liable for any such
claims, damages or judgment.
63. ALTERATIONS/IMPROVEMENTS: Lessee shall not make any
improvements on the property without Lessor's consent. In making
any alterations that Lessee has a right to make, Lessee shall
comply with the following:
a. Lessee shall submit reasonably detailed plans and
specifications of the proposed alterations before
the commencement of such Lessor approved
alterations.
b. The alterations shall not commence until five (5)
days after Lessor has received notice from Lessee
stating the date the construction is to commence
so that Lessor can post and record an appropriate
notice of non-responsibility.
c. The proposed improvements shall be approved by all
the appropriate government agencies, and all
applicable permits and authorizations shall be
obtained before commencement of the alterations.
All approved improvements shall be completed in
the standard workmanship quality.
d. The proposed improvements shall be approved by all
the appropriate government agencies, and all
applicable laws.
e. Before commencing the alterations and at all times
during construction, Lessee shall maintain
insurance as provided for in paragraphs 18 and
19. In addition, contractor shall be licensed and
insured and a Certificate of Insurance with
liability insurance in the amount of $1,000,000.00
and Worker's Compensation Insurance shall be
provided by Lessee's contractor to Lessor within
10 days prior to commencement of any work and said
certificate shall name Lessor as additionally
insured.
f. Lessee shall pay all costs for construction done
by it or caused to be done by it on the premises
as permitted by this Lease. Lessee shall keep the
improvements and land free and clear of all
mechanics' liens resulting from construction done
by or for Lessee.
64. AMERICANS WITH DISABILITIES ACT: On July 26, 1990 the
Americans With Disabilities Act of 1990 (ADA) was signed into
law. This federal Civil rights legislation prohibits
discrimination against individuals with disabilities. The ADA
affects almost all commercial facilities and public
accommodations. Residential properties are not typically covered
by the ADA but may be governed by its provisions if used for
certain purposes. The ADA can require, among other things,
buildings to be made readily accessible to the disabled.
Different requirements apply to new construction, alterations to
existing buildings, and removal of barriers in existing
buildings. Compliance with the ADA may require significant
costs. Monetary and injunctive remedies may be incurred if the
property is not in compliance. Neither Lessor nor a real estate
broker does have the technical expertise to either determine
whether a building is in compliance with ADA requirements or to
advise a Lessee on the requirements of the ADA. Any Lessee who
is a party to the above referenced agreement is advised to
contact an attorney, contractor, architect, engineer or other
qualified professional of his/her own choosing to determine to
what degree, if at all, the ADA impacts upon that principal or
this transaction. It will be the Lessee's responsibilities to
comply with this act, at no cost to Lessor, throughout entire
term and any extension of this lease.
65. NOTICE OF SURRENDER: Lessee shall, at least thirty
(30) days before the date of expiration of this lease, give
Lessor a written notice of intention to surrender the leased
premises on that date. If such notice is not given, the Lessee
shall be liable for rent of one additional month.
66. REAL ESTATE BROKERAGE FEE: Lessee warrants to Lessor
that there are no Real Estate brokerage fees offered or required
in conjunction with this lease which may arise as a result of the
execution of this lease and agrees to pay said fees, and hold
harmless and indemnify Lessor from any claims for brokerage fees
for failure to pay said fee.
67. LESSOR LOAN OR SALE: Lessee agrees within ten (10)
business days of receipt of written request by Lessor, to execute
and deliver to Lessor any reasonably necessary documents,
including estoppel certificates, in a form reasonably acceptable
to Lessee, presented to Lessee by Lessor. Lessee's failure to
deliver an estoppel certificate within five (5) days following
such request shall constitute a default under this Lease and
shall be conclusive upon Lessee that this Lease is in full force
and effect and has not been modified except as may be represented
by Lessor and that there are no uncured defaults in Lessor's
performance. In addition, if requested by Lessor, Lessee shall
deliver to Lessor, on a reasonable basis but nor more frequent
than annually, or to any prospective lender or purchaser of the
Property, financial statements of Lessee covering the two (2)
fiscal years immediately preceding the request.
68. ATTORNMENT: If Lessor conveys in a Sale all of its
rights and duties in and to the Lease and/or Premises and the
realty underlying the Premises, or if an interest in Lessor or
Lessor's equity of redemption or other interest in the Lease and
the Premises under a mortgage, deed of trust, pledge or security
agreement is foreclosed judicially or nonjudicially, upon the
request of Lessor's lawful successor, Lessee shall attorn to said
successor, provided said successor accepts the Premises subject
to this Lease. The foregoing notwithstanding, in accepting the
Premises subject to this Lease, said successor shall not be bound
by (i) any prepayment of more than one month's rental (except for
payments under Article 7, "Security Deposit") or (ii) any
material amendment of this Lease made after the later of the
Effective Date or such date as the successor's lien or interest
first arose, unless said successor shall have consented to such
amendment.
69. MUTUAL WAIVER OF RIGHT OF SUBROGATION: Except as may
be provided herein, Lessor and Lessee each hereby waives any and
all rights of recovery against the other and their respective
authorized representatives for damage to any person or to the
Premises, and the Building and other improvements in which the
Premises are located, and to fixtures, personal property,
Lessee's improvements, and alternation of either Lessor or Lessee
in or on the Premises and the Building and other improvements in
which the Premises are located, arising from any cause insured
against under any insurance policies carried by the parties and
in force at the time of any such damage. Each party shall cause
insurance policy obtained by it to provide that the insurance
company waives all right to recover by way of subrogation against
either party in connection with damage covered by any policy.
70. MISCELLANEOUS PROVISION
70.1) Time of Essence. Time is of the essence of each provision
of this Lease.
70.2) Lessor's Consent. Except as may otherwise be expressly
stated in their Lease, any consent required by Lessor
under this Lease must be granted in writing and must be
withheld or conditioned by Lessor in its reasonable
discretion.
70.3) Severability. It is agreed that, if any provision of this
Lease shall be determined to be void by any court of
competent jurisdiction, then such determination shall
not affect any other provision of this Lease and all
such other provisions shall remain in full force and
effect. It is the intention of the parties hereto
that, if any provisions of this Lease is capable of two
(2) constructions, one of which would render the
provision void and the other of which would render the
provision valid, then the provision shall have the
meaning which renders it valid.
70.4) Warranty of Authority. If Lessee is a corporation, the
person or persons executing this Lease on behalf of
Lessee hereby covenant and warrant as of the Effective
Date that: (a) Lessee is a duly constituted
corporation, qualified to do business in the State
where the Center is located; (b) Lessee has paid all
applicable franchise and corporate taxes; and (c)
Lessee will file when due all future forms, reports,
fees and other documents necessary to comply with
applicable laws.
70.5) Right to Lease. Lessor reserves the absolute right to
effect such other tenancies in the Center as Landlord,
in the exercise of its sole business judgement, shall
determine to best promote the interest of the Center.
Lessee does not rely on the fact, nor does Lessor
represent, that there shall be any specific occupants
or number of occupants of space in the Center after the
Effective Date.
70.6) Waiver of Rights of Redemption. Lessee hereby expressly
waives any and all rights of redemption granted by or
under any present or future laws in the event Lessee is
evicted or dispossessed for any cause or in the event
Lessor obtains possession of the Premises by reason of
the violation by Lessee of any of the terms, covenants
and conditions of this Lease or otherwise. The rights
given to Lessor herein are in addition to any rights
that may be given to Lessor by any statute or otherwise.
70.8) Earthquake and Seismic Hazard Area. Lessee is hereby advised
that the subject property is located within an
Earthquake and Seismic Hazard Area and that lessor does
not maintain Earthquake Insurance on the building.
Lessee accepts the premises with this knowledge and
understands that it is the lessee responsibility to
investigate this matter, and to obtain insurance
coverage on lessee personal property. Lessee holds
harmless and free of any liability, and will indemnify,
the lessor, lessor agents and property manager, for any
loss or liability resulting therefrom.
70.9) Agency Disclosure. Lessee acknowledges and agrees that A.G.
Davi Ltd. is the lessor agent and or property manager
and is only representing "the lessor exclusively".
Lessor recommends that Lessee obtain professional
advise and to engage legal counsel for lessee own
representation.
EXHIBITS, SUPPLEMENTS AND ADDENDUM'S
The attached Exhibits and Addendum's are incorporated herein:
LEASE EXHIBIT "A" LEASE EXHIBIT "B" LEASE EXHIBIT "C"
ADDENDUM 1 PERCENTAGE RENTAL AGREEMENT
ADDENDUM 2 1st OPTION TO RENEW
ADDENDUM 3 2nd OPTION TO RENEW
IN WITNESS WHEREOF, the above named parties hereto have: A) set
their hands the date first hereinabove written, B) acknowledge
receipt of a copy hereof, and C) have read, understand and agree
to all of the above.
LESSOR: LESSEE:
_/s/ ANTONY DAVI, JR._______ _/s/ HARRY WARDWELL_
- ---------------------------- --------------------------------
_/s/ JEFF DAVI_______________________Sr. Vice President,
Branch Administrator ___
- ---------------------------- --------------------------------
_7-16-02 ____________________________7-16-02______________________________
- ---------------------------- --------------------------------
Dated Dated
LEASE EXHIBIT "A"
- ----------------
Lease particulars (this page) and schematic location (next
page-not to scale) of Demised premises, common area, located at
439 Alvarado , California, 93940 .
Lessor : Jeff Davi & Anthony Davi Jr.
Lessee : Community Bank of Central California
Building : 439 Alvarado St, Monterey, CA
Floor Area : 11,782 Gross sq.ft
Term of Lease : TenYears (10), PLUS TWO
CONSECUTIVE 5 YEAR OPTIONS
Date of Commencement : September 6, 2002
Date of Expiration : August 31, 2012
Rental (Initial Fixed Rent) : $14,340.00 per month (Triple Net)
Security Deposit : -0- (waived)
Initial Payment : $58,250.00 (see Addendum No. 1)
Property Taxes : 100%
Real Property/Liability/Earthquake/Glass Insurance: 100%
Common Areas Percentage : 100%
Business Purpose : Bank Branch & Offices
Additional Insured(s) : A.G. Davi Ltd and all
allied associates, Jeff Davi
& Anthony G. Davi Jr.
Address for Notices
Lessor : c/o A.G. Davi Ltd, P.O.
Box 2350
484 Washington St, Suite D,
Monterey, CA 93940
Lessee : c/o Community Bank Main
Branch, 301 Main
Street, Salinas, CA 93902
Estimate of Initial Payment
Fixed Rent : $14,340.00
MRWPCA : Actual paid directly by Tenant
Taxes : Actual paid directly by Tenant
Insurance : Actual paid directly by Tenant
Common Area Maintenance : Actual paid directly by Tenant
Signage : Actual paid directly by Tenant
Utilities Reimbursement
Estimate : Actual paid directly by Tenant
Other Costs/Charges : Actual paid directly by Tenant
TOTAL : $14,340.00
Due Upon Execution of Lease:
Security Deposit : -0-
Initial Payment : $14,340.00
TOTAL DUE : $14,340.00 plus pre-paid taxes & insurance
Date _____7-16-02__________ Date____7-16-02________________
- --------------------------- -------------------------------
Lessor _/s/ ANTONY DAVI, JR__ Lessee ___/s/ HARRY WARDWELL
- --------------------------- -------------------------------
Lessor __/s/ JEFF DAVI ______ Lessee
- --------------------------- -------------------------------
LEASE EXHIBIT "B"
Building located
439 Alvarado, Monterey, CA
----------------------------------
Schematic Location of Demised Premises
(Not to Scale)
[graphic omitted]
LEASE EXHIBIT "C"
[ Exhibit "C" contains the lease agreement between the building's
current subtenant and the previous building owner. As this
lease is not a significant part of the property transaction or
this Company's operations, it has been excluded from this
disclosure.]
ADDENDUM NO 1
Addendum to Absolute Net Lease
THIS IS AN ADDENDUM to the lease between Jeff Davi & Anthony Davi
Jr.
hereafter referred to as Lessor and Community Bank of Central
California_ herein after referred to as lessee for the premises
known as _439 Alvarado Street_ which was executed on July 16,
2002.
ALL PARTIES AGREE: This lease and its terms and conditions
are a result of the parties mutually to facilitate a purchase on
the part of the Landlord and an tenancy on the part of the
tenant. The parties have agreed to a reduction in the applicable
interest rate charged by the Lessee as a lender for the property
to the Landlord and the same was counterbalanced by the rent
payable by the lessee as a as a tenant at the property.
Further, this lease is a Master Lease of the entire building for
the original term and has been created this way in order to
facilitate a monthly rental amount due by tenant counter balanced
against the loan terms and tenant assumes all of the
managerial and "ownership" duties of maintaining and up-keep of
the building throughout this initial term.
1. LEASE CONTINGENCY: This entire lease agreement is
contingent upon the closing of the purchase agreement
for the Landlord to buy the subject property. If the
purchase agreement fails to close or is cancelled for
any reason, then this lease will be treated as if it was
never in place, this lease will be novated.
2. PAYMENT OF UPFRONT FUNDS: Lessee will pay with the
signing of this lease as their initial payment the
amount of $58,250.00 to be used to offset the Lessee's
first month rent, initial funds due to Landlord and
initial expenses now due to be paid by Lessee such as
first months rent, pre-paid taxes and insurance.as set
forth on Exhibit A The remaining portion of these funds
-
in excess of those up front payments shall be returned
to the Lessee immediately after the close of escrow. In
the event the Lessor does not consummate the acquisition
as set forth above, then the Lessee will be refunded
this entire amount immediately.
3. SUBTENANT: Part of the demised premises for the initial
term of this lease includes part of Mezzanine &
conference and all of the upper floor (and part of the
parking lot) as indicated on the attached site plan
consisting of approximately 4895 square feet of sub
tenant space, which is currently contracted under an
existing Lease to Gray & Battey. This lease expires on
July 31, 2004, and which Tenant accepts as a part of
this agreement and the tenant's lease and possession of
the demised premises and property is subject to that
lease and their occupancy. Tenant as Master tenant will
receive all rent for this space throughout the term of
this initial lease and any extended terms should tenant
elect to do so. Any new lease that may occur after
July 31, 2004 with the current sub-tenant or any other
tenant thereafter shall be expressly conditioned by the
terms and conditions of this Lease and no provision in
any sub-tenant's lease will contradict any term or
conditions of this lease. Any additional rent received
from that tenant or any other tenant will be the
property of the Lessee for the initial 10 year term.
Lessee acknowledges and accepts that Sub-tenant and any
future Sub-tenant will have rights and access to common
areas of the building including but not limited to
parking lot, elevator, mezzanine restrooms, and that the
Lessee is responsible for maintaining that common area
and maintaining that terms and conditions set forth in
the Sub-Tenant's lease. Any change in use or Sub-Tenant
must be done so with the written consent of the Landlord
which cannot be unreasonably withheld. It is agreed
that no future Sub-Tenant lease term can exceed the term
of this Lease agreement. Lessor shall pay to Lessee the
security deposit (security deposit is about $4,000.00
plus accrued interest) currently held on the above
referenced space and Lessee shall be responsible for
returning said security deposit to "Gray and Battey"
upon the termination of that Lease.
3.5 In the event the existing tenancy of Grey and
Batttey, Attorneys at Law, is not renewed or extended
beyond its current existing term, or if Grey and Battey,
for any reason, cease to be tenants in the Premises,
during the initial term of the Absolute Net Lease and
any option periods wherein Lessee/Tenant elects to
maintain the second floor within its tenancy, then
Lessee/Tenant may sublease any portion of the second
floor as it deems advisable, provided, however, that
such sublease shall be subject to the written approval
of Lessor/Landlord, which approval shall not
unreasonably be withheld.
4. FINANCING: Lessee is providing the purchase money financing
for the Landlord to close this transaction. Lessee
agrees that with the signing of this lease that Lessee
will provide 100% financing to Lessor in the amount of
$2,225,000. Amortized over 25 years with interest @ 6%
per annum fixed for 10 years and thereafter will be
adjusted in five year increments to3/4% over the US
Prime Rate as published in the Wall Street Journal.
Lessee will charge no loan fees and no appraisal will be
required of the property. It is agreed and understood
that , that the Lessee will provide final loan documents
to the Lessor by delivering those loan documents to the
Escrow Holder, Old Republic Title Company in Monterey,
Escrow officer Mickey Davi, along with the initial funds
and this fully executed lease and all addenda. Loan
documents will be set forth to allow funding at
Landlord's sole discretion provided that this Lease is
fully executed by all parties. It is further agreed
that the Loan shall be in the form of two loans, a first
and a second, set forth as follows, the first in an
amount equal to $1,825,000. and a second in an amount
equal to $400,000 all at the same terms as outlined
above. All parties acknowledge and agree that certain
requirements will be made of Lessor pursuant to the
above referenced Loan documents and related agreements.
Some of these requirements are passed on to the Lessee
in this Lease who is also the Lender. The Lessee hereby
accepts the responsibilities acquired and passed on
herein.
5. FURNITURE:In the event that the building is transferred to
Landlord with any personal property, or freestanding
fixtures that the Lessee elects to use for its
occupancy, it is agreed that the tenant will have the
use of these fixtures and personal property during the
lease term.
6. EASEMENTS:Lessee accepts and acknowledges receipt of a
preliminary title report outlining existing easements
affecting the Leased property. Lessee and any
Sub-Tenant of Lessee shall accept the limitations of
said easements and shall never violate the access to
neighbors pursuant to their rights set forth in these
existing easements.
7. LIABILITY & INDEMNITY FROM TENANT: Pursuant to the
insurance provisions set forth in the lease, the Lessee
acknowledges and accepts that the Landlord will have
nothing to do with this property as a Landlord during
the initial term of 10 years and that that my continue
if tenant elects to in its option to extend. In so
doing, then the Lessee agrees to completely indemnify
and hold harmless Landlord for any and all occurrences
that may take place at our about the demised premises or
property. The Lessee will maintain the liability dollar
amounts as specified in the lease as coverage to ensure
that the Landlord is sufficiently protected due to the
landlord's lack of involvement in the property during
the entire lease term.
8. BUILDING MAINTENANCE AND UP-KEEP: In addition to the
requirements of the lease agreement and in no-way does
this provision supercede those defined requirements as
set forth in the lease agreement, but this is to ensure
that the Lessee will keep the building in "first class"
condition throughout the term of this lease. For
example, the windows will be kept clean, sidewalks will
be power-washed on a regular basis including parking
areas, elevator will be kept clean, and in addition,
Lessee will ensure that every 5-7 years during the
lease that the following capital improvements take place
to ensure that the building is maintained in first class
condition. Paint the common areas; slurry seal the
parking lot (repair or replace as needed) and re-stripe;
maintain signage and repair as needed; common area floor
covering and/or carpet; and Paint the building interior
& exterior as needed.
It is agreed that if the tenant fails to maintain the
property as set forth in the lease agreement and in this
addendum, then the Landlord has the right to inform the
tenant in writing and if no action is taken within 45
days, then the Landlord may make the needed repair or
cleaning and bill the tenant for those costs.
9. ADDITIONAL PROVISIONS
9.1. Any provisions of the foregoing Absolute Net Lease that
conflicts with the "WITNESSETH" portion of the Absolute Net Lease
and this Addendum No. 1, Addendum To Absolute Net Lease shall be
interpreted in favor of the latter (i.e the said Addendum and the
"WITNESSETH" provisions) and, if such interpretation reasonably
dictates it, the conflicting provision shall be so modified.
9.2. Any provision of the Absolute Net Lease and/or Addendum
No. 1, Addendum To Absolute Net Lease requiring Lessee/Tenant to
comply with governmental requirements, avoid liens or otherwise
comply with the law, shall first allow time for Lessee/Tenant to,
in good faith, dispute, mediate, arbitrate or litigate the issue
and, if unsuccessful therein, then such duty to Lessor/Landlord
shall apply and Lessee/Tenant shall pay all costs and penalties
resulting therefrom. In the event such actions by Lessee/Tenant
cause Lessor/Landlord to incur attorney fees or costs to protect
their title to, or their ownership interest in, the Premises,
Lessee/Tenant shall indemnify Lessor/Landlord and hold them
harmless from said attorney fees and costs.
9.3. During the initial term of the Absolute Net Lease and
any option periods wherein Lessee/Tenant elects to maintain the
second floor within its tenancy, any all rents, payments, and
considerations received by Lessee/Tenant shall be, and remain the
property, of Lessee/Tenant, provided, however, that if the rent
Lessee/Tenant receives from any renting of the Premises exceeds
the amount Lessee/Tenant is, at that time, contractually
obligated to pay to Lessor/Landlord, then Lessor/Landlord shall
receive any such excess rent.
9.4. Lessee/Tenant shall have the right, without charge or
transfer fee, to sublease, assign, novate, sell or transfer its
interest in the Absolute Net Lease, and any extensions thereof,
to any banking or similar entity, whether the same be pursuant to
a sale, merger, acquisition, reorganization, or subsidiary
formation, provided however, such sublease, assignment, novation,
sale or transfer shall be to an entity of equal creditworthiness
to Lessee/Tenant.
9.5 Paragraph 15. of the foregoing Absolute Net Lease is
modified as follows Lessee's responsibility under this lease
shall exclude pre-existing hazardous materials as per paragraph
57 of this Lease. Lessees responsibility under this lease shall
exclude pre-existing structural conditions as defined in Appendix
"A" (recommended immediate needs) of the "Property Condition
Report" dated July 12, 2002 by Professional Service Industries ,
Inc. provided that Lessee's use and or actions do not trigger the
requirement that a pre-existing structural condition be repaired,
corrected or modified
9.6. Lessee/Tenant shall have absolutely no responsibility
or liability for, or duty to correct or mitigate any condition
described in Paragraph 57 of the Absolute Net Lease that was in
existence prior to the date hereof, and Lessor/Landlord shall
indemnify and hold Lessee/Tenant harmless therefrom.
9.7 Lessee shall be given possession on the close of escrow.
Provided that Lessee is given possession on or before
September 30, 2002 Lessee agrees that he will not open for
business until after September 30, 2002, but Lessee will
be given full possession and use of the entire premises to
prepare the business for its opening.
9.8 Whenever the terms "sole discretion", "1st class", "as
they are deemed necessary by Landlord", "reasonable
discretion" and similar criteria and subjective terms are
used, the same shall be interpreted to mean that the matter
or issue shall meet, adhere to and comply with reasonable
standards as may exist in the commercial building business
area in downtown Monterey, California dealing with buildings
of similar age and construction as to condition repair &
maintenance of the premises.
All other terms of the Lease are to remain in full force and the
parties have mutually agreed no other agreements oral, written
or implied unless contained in this agreement or any future
addendum to this agreement fully executed by all parties.
The undersigned hereby acknowledges receipt and agrees to the
above:
LESSEE:
Community Bank of Central California:
_/s/ HARRY O. WARDWELL__ Date___7-16-02_____ Time__2:45___pm
- ------------------------- ---------------- ---------
LESSEE:
Community Bank of Central California:
________________________ Date_______________ Time_________am/pm
- ------------------------- ---------------- ---------
LESSOR
____/s/ ANTONY DAVI, JR__Date___7-16-02_____ Time__2:45___pm
- ------------------------- ---------------- ---------
LESSOR
____/s/ JEFF DAVI _______Date___7-17-02_____ Time__2:52___pm
- ------------------------- ---------------- ---------
LEASE ADDENDUM NO 2
1st Option to Renew
If Lessee is not and has not been in default under the terms and
performance of this Lease, and that Lessor is: (a) not required
to provide any Lessor improvement or grant free rent; (b) that
Lessee has not assign, sublet, transferred, sold, mortgaged or
hypothecated this lease except as maybe contractually permitted;
(c) that Lessee has not been and is not currently delinquent in
the payment of rents; Lessor grants to Lessee an option to extend
the term of this Lease for an additional term of Five Years, upon
similar terms and conditions, beginning on September 1, 2012 and
ending on August 31, 2017,subject to the following conditions.
This option must be exercised by providing written notice by
registered or certified mail, postage prepaid with return receipt
requested and addressed to Lessor at the address for notice
provided in this Lease to Lessor not sooner that nine (9) months
prior to the expiration or later than six (6) prior to the
expiration of the Lease. The monthly rent for the first year of
the renewal period shall be determined by mutual agreement of
fair market rent for the downtown Monterey, Alvarado St. area, by
Lessor and Lessee, or if they cannot agree by appraisal as set
forth herein. It is understood that at this time the tenant may
determine to give the upstairs space back to the landlord for him
to retain and lease out at its own discretion, in so doing then
the tenants square foot shall be revised to the following gross
rentable square feet, representing the main floor, basement, and
partial mezzanine & mezzanine break room offices or storage.
Should tenant elect to give up the top floor space the
notification to tenant must take place at the time of their
written notice to Landlord to exercise their option and the
revised gross square feet of the demised premises will then
become, 6,887 square feet. If tenant elects not to give up the
top floor space at the time of their exercising of their option
then the tenant will be unable to give up that square footage
after the final rent is determined as set forth below.
The parties shall have thirty (30) days after Lessor receives the
notice of exercise from Lessee in which to agree on the rental of
the premises. If the parties are unable to agree on the rental
within that period, then within ten days after the expiration of
that period each party, as its respective cost and by giving
notice to the other party, shall appoint a qualified real estate
appraiser or broker, with at least five (5) years full-time
commercial appraisal experience on the Monterey Peninsula, to set
the rental value. If a party does not appoint an appraiser or
broker within fifteen (15) days after the other party has given
notice of the name of its appraiser or broker, the single
appraiser or broker appointed shall be the sole appraiser/broker
and shall set the rental value. If the two appraisers/brokers
are appointed by the parties as stated herein, they shall meet
promptly and attempt to set the fair market rental value. If
they are unable to agree on the rental value within thirty (30)
days after the second appraiser/broker has been appointed, they
shall attempt to elect a appraiser/broker meeting the
qualifications set forth above within ten (10) days after the
last day the two appraisers/brokers are given to set the rental
value. If they are unable to agree on the third
appraiser/broker, either party may, by giving ten days written
notice to the other party, apply to the then president of the
local Association of Realtors for the selection of a third
appraiser/broker who meets the qualifications stated herein.
Each of the parties shall bear one half of the cost of appointing
the third appraiser/broker and of paying the third
appraiser/broker's fee. The third appraiser/broker, 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 a third
appraiser/broker, the third appraiser/broker shall set the fair
market rental value. The rental value set by this third
appraiser/broker shall be either (A) the rental value previously
proposed by the appraiser/broker employed by Lessor, or (B) the
rental value previously proposed by the appraiser/broker employed
by Lessee. The third appraiser/broker shall not have the option
of determining any other rental value, but shall choose only
between the two proposals previously made by the parties'
appraiser/brokers.
The determination of the appraiser(s)/broker(s) of the rental
value for the option period as provided in this Article will be
binding on the parties and may be reduced to a judgment as would
an arbitration award under the California Arbitration Act, found
in Part III, Title 9, of the California Code of Civil Procedure,
sections 1280 et. Seq. In no event however, shall the fixed rent
be less than the rent for the last thirty (30) days of this
original lease term.
Dated:___7-16-02 __ Dated:____ 7-16-02
------------ -------------
Lessor Lessee
_____/s/ ANTONY DAVI, JR_ ___/s/ HARRY O.WARDWELL_
- ------------------------- ------------------------
_____/s/ JEFF DAVI ______ _Sr. Vice President,
Branch Administrator_
- ------------------------- ------------------------
LEASE ADDENDUM NO 3
2nd Option to Renew
If Lessee is not and has not been in default under the terms and
performance of this Lease, and that Lessor is: (a) not required
to provide any Lessor improvement or grant free rent; (b) that
Lessee has not assign, sublet, transferred, sold, mortgaged or
hypothecated this lease except as maybe contractually permitted;
(c) that Lessee has not been and is not currently delinquent in
the payment of rents; Lessor grants to Lessee an option to extend
the term of this Lease for an additional term of Five Years, upon
similar terms and conditions, beginning on September 1, 2017 and
ending on August 31, 2022,subject to the following conditions.
This option must be exercised by providing written notice by
registered or certified mail, postage prepaid with return receipt
requested and addressed to Lessor at the address for notice
provided in this Lease to Lessor not sooner that nine (9) months
prior to the expiration or later than six (6) prior to the
expiration of the Lease. The monthly rent for the first year of
the renewal period shall be determined by mutual agreement of
fair market rent for the downtown Monterey, Alvarado St. area, by
Lessor and Lessee, or if they cannot agree by appraisal as set
forth herein. It is understood that at this time the tenant may
determine to give the upstairs space back to the landlord for him
to retain and lease out at its own discretion, in so doing then
the tenants square foot shall be revised to the following gross
rentable square feet, representing the main floor, basement, and
partial mezzanine & mezzanine break room offices or storage.
Should tenant elect to give up the top floor space the
notification to tenant must take place at the time of their
written notice to Landlord to exercise their option and the
revised gross square feet of the demised premises will then
become, 6,887 square feet. If tenant elects not to give up the
top floor space at the time of their exercising of their option
then the tenant will be unable to give up that square footage
after the final rent is determined as set forth below.
The parties shall have thirty (30) days after Lessor receives the
notice of exercise from Lessee in which to agree on the rental of
the premises. If the parties are unable to agree on the rental
within that period, then within ten days after the expiration of
that period each party, as its respective cost and by giving
notice to the other party, shall appoint a qualified real estate
appraiser or broker, with at least five (5) years full-time
commercial appraisal experience on the Monterey Peninsula, to set
the rental value. If a party does not appoint an appraiser or
broker within fifteen (15) days after the other party has given
notice of the name of its appraiser or broker, the single
appraiser or broker appointed shall be the sole appraiser/broker
and shall set the rental value. If the two appraisers/brokers
are appointed by the parties as stated herein, they shall meet
promptly and attempt to set the fair market rental value. If
they are unable to agree on the rental value within thirty (30)
days after the second appraiser/broker has been appointed, they
shall attempt to elect a appraiser/broker meeting the
qualifications set forth above within ten (10) days after the
last day the two appraisers/brokers are given to set the rental
value. If they are unable to agree on the third
appraiser/broker, either party may, by giving ten days written
notice to the other party, apply to the then president of the
local Association of Realtors for the selection of a third
appraiser/broker who meets the qualifications stated herein.
Each of the parties shall bear one half of the cost of appointing
the third appraiser/broker and of paying the third
appraiser/broker's fee. The third appraiser/broker, 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 a third
appraiser/broker, the third appraiser/broker shall set the fair
market rental value. The rental value set by this third
appraiser/broker shall be either (A) the rental value previously
proposed by the appraiser/broker employed by Lessor, or (B) the
rental value previously proposed by the appraiser/broker employed
by Lessee. The third appraiser/broker shall not have the option
of determining any other rental value, but shall choose only
between the two proposals previously made by the parties'
appraiser/brokers.
The determination of the appraiser(s)/broker(s) of the rental
value for the option period as provided in this Article will be
binding on the parties and may be reduced to a judgment as would
an arbitration award under the California Arbitration Act, found
in Part III, Title 9, of the California Code of Civil Procedure,
sections 1280 et. Seq. In no event however, shall the fixed rent
be less than the rent for the last thirty (30) days of this
original lease term.
Dated:___7-16-02 __ Dated:____ 7-16-02
------------ -------------
Lessor Lessee
_____/s/ ANTONY DAVI, JR_ ___/s/ HARRY O.WARDWELL_
- ------------------------- ------------------------
_____/s/ JEFF DAVI ______ _Sr. Vice President,
Branch Administrator_
- ------------------------- ------------------------