SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 1995, Commission File No. 0-15450
SIERRA TAHOE BANCORP
(Exact Name of Registrant as Specified in its Charter)
California 68-0091859
(State or Other Jurisdiction) (I.R.S. Employer Identification No.)
of Incorporation or Reorganization)
10181 Truckee-Tahoe Airport Rd.,
P.O. Box 61000, 96160-9010
Truckee, California
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (916) 582-3000
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
As of July 31, 1995: Common Stock - Authorized 10,000,000 shares
of no par; issued and outstanding - 2,571,829.
<PAGE>
10-Q Filing
June 30, 1995
Part I. Financial Information
Item 1. Financial Statements
Following are condensed consolidated financial statements for
Sierra Tahoe Bancorp ("Bancorp", or together with its subsidiaries,
the "Company") for the reportable period ending June 30, 1995.
These condensed consolidated financial statements are unaudited,
however, in the opinion of management, all adjustments have been
made for a fair presentation of the financial condition and
earnings of the Company in conformity with generally accepted
accounting principles. The accompanying notes are an integral part
of these condensed consolidated financial statements.
<TABLE>
<PAGE>
SIERRA TAHOE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)
June 30, 1995 and December 31, 1994
(Amounts in thousands of dollars)
<S> <C> <C>
ASSETS 06/30/95 12/31/94
Cash and due from banks $ 16,802 $ 18,049
Federal funds sold 10,800 8,000
Investment securities and
investments in mutual funds
(Note 4) 27,206 32,817
Loans held for sale 23,626 2,067
Loans and leases, net of
allowance for possible loan
and lease losses of $3,522
in 1995 and $3,546 in 1994
(Notes 2 & 5) 173,600 167,326
Other assets 31,516 31,716
TOTAL ASSETS $283,550 $259,975
LIABILITIES
Deposits $241,892 $218,876
Convertible debentures 10,000 10,000
Other liabilities 2,853 2,936
TOTAL LIABILITIES 254,745 231,812
SHAREHOLDERS' EQUITY
Common stock 10,567 11,002
Retained earnings 18,489 17,839
Unrealized loss on
investment securities
available for sale (251) (678)
TOTAL SHAREHOLDERS' EQUITY 28,805 28,163
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $283,550 $259,975
</TABLE>
The accompanying notes are an integral part of these Condensed
Consolidated Statements of Condition.
<TABLE>
<PAGE>
SIERRA TAHOE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three and Six Months Ended June 30, 1995 and 1994
(Amounts in thousands except per share amounts)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
6/30/95 6/30/94 6/30/95 6/30/94
Interest Income:
<S> <C> <C> <C> <C>
Interest and fees on loans
and leases $ 5,647 $4,099 $10,730 $ 7,882
Interest on federal
funds sold 98 72 173 172
Interest on investment
securities and deposits 389 432 832 816
Total Interest Income 6,134 4,603 11,735 8,870
Less Interest Expense:
Interest on deposits 1,717 1,160 3,113 2,307
Interest on convertible
debentures 212 218 425 344
Other interest expense 1 13 17 23
Total Interest Expense 1,930 1,391 3,555 2,674
Net Interest Income 4,204 3,212 8,180 6,196
Provision for Possible
Loan and Lease Losses 320 270 590 540
Net Interest Income After
Provision for Possible
Loan and Lease Losses 3,884 2,942 7,590 5,656
Other Operating Income 1,924 2,347 4,081 4,479
Other Operating Expenses 5,105 4,318 10,139 8,360
Income Before Provision for
Income Taxes 703 971 1,532 1,775
Provision for Income Taxes 267 377 568 668
NET INCOME $ 436 $ 594 $ 964 $ 1,107
EARNINGS PER SHARE
Primary $ 0.16 $ 0.22 $ 0.36 $ 0.42
Weighted Average
Shares Outstanding 2,684 2,685 2,686 2,652
Fully diluted 0.15 0.19 0.33 0.37
Weighted Average
Shares Outstanding 3,696 3,715 3,693 3,495
Cash Dividends Paid
Per Share of
Common Stock $ 0 $ 0 $ 0.12 $ 0
</TABLE>
The accompanying notes are an integral part of these Condensed
Consolidated Statements of Income.<PAGE>
<TABLE>
SIERRA TAHOE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30, 1995 and 1994
(Amounts in thousands of dollars)
Six Six
Months Months
Ended Ended
06/30/95 06/30/94
<S> <C> <C>
Cash Flow From Operating Activities:
Interest and fees received $ 11,297 $ 8,535
Service charges and commissions
received 861 715
Servicing income received 3,237 3,194
Interest paid (3,527) ( 2,483)
Cash paid to suppliers and employees (9,116) ( 7,624)
Income taxes paid (935) ( 1,118)
Mortgage loans originated for sale (16,290) (19,657)
SBA loans originated for sale (16,892) (19,461)
SBA loans sold 5,051 17,697
Mortgage loans sold 13,827 21,942
Other items 194 414
Net Cash (Used In) Provided By
Operating Activities $(12,293) $ 2,154
Cash Flow From Investing Activities:
Proceeds from sales of mutual funds -
available for sale 225 6,516
Proceeds from maturities of investment
securities - held to maturity 569 330
Proceeds from sales of investment
securities - available for sale 8,484 4,986
Proceeds from sales of investment
securities-held to maturity (Note 4) 999 0
Purchase of investment securities -
held to maturity 0 ( 1,191)
Purchase of investment securities -
available for sale ( 3,955) (14,556)
Loans made net of principal collections (13,930) ( 4,449)
Capital expenditures ( 785) ( 264)
Increase in other assets ( 28) ( 685)
Net Cash Used In Investing
Activities $( 8,421) $ ( 9,313)
Cash Flow From Financing Activities:
Net decrease in demand, interest bearing
and savings accounts (14,312) ( 2,190)
Net increase (decrease) in time
deposits 37,328 ( 3,243)
Dividend paid ( 314) 0
Proceeds from issuance of subordinated
debentures 0 10,000
Proceeds from issuance of common stock 10 0
Repurchase of common stock ( 445) 0
Net Cash Provided by Financing
Activities 22,267 4,567
Net Increase (Decrease) in Cash and Cash
Equivalents 1,553 ( 2,592)
Cash and Cash Equivalents at
Start of Year 26,049 32,133
Cash and Cash Equivalents at June 30 $ 27,602 $ 29,541
</TABLE>
The accompanying notes are an integral part of these Condensed
Consolidated Statements of Cash Flows.<PAGE>
<TABLE>
SIERRA TAHOE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For The Six Months Ended June 30, 1995 and 1994 (Continued)
(Amounts in thousands of dollars)
RECONCILIATION OF NET INCOME TO NET
CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
Six Six
Months Months
Ended Ended
06/30/95 06/30/94
<S> <C> <C>
Net Income: $ 964 $ 1,107
Adjustment to Reconcile
Net Income to Net
Cash Provided:
Depreciation and amortization 519 564
Provision for possible loan and
lease losses 590 540
Provision for income taxes 568 668
Gain on sale of SBA loans under
cash received 91 93
Amortization of excess servicing on
SBA loans 669 1,086
Amortization of purchased mortgage
servicing rights 86 86
Increase in interest payable 28 329
Increase (decrease) in accrued
expenses 78 ( 541)
Amortization of premiums/discounts
on loans ( 225) ( 274)
Decrease in taxes payable ( 935) ( 1,118)
Decrease (increase) in loans
originated for sale (14,304) 521
Decrease in prepaid expenses ( 107) ( 815)
Other items ( 315) ( 92)
Total Adjustments (13,257) 1,047
Net Cash (Used In) Provided By
Operating Activities $(12,293) $ 2,154
</TABLE>
_________________________________________________________________
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING
ACTIVITIES
For the six months ended June 30, 1995 and 1994, $373,000 and
$266,000 of loans were transferred to other real estate owned.
In the 1995 period, $572,000 of assets formerly classified as in-
substance foreclosures were reclassified as loans.
In 1995, $20.0 million of unguaranteed SBA loans originated in
earlier years were transferred to held for sale status.
Concurrently, $21.4 million of guaranteed SBA loans were
transferred to the Company's investment portfolio.
The accompanying notes are an integral part of these Condensed
Consolidated Statements of Cash Flows.
<PAGE>
Sierra Tahoe Bancorp
Notes to Condensed Consolidated Financial Statements
June 30, 1995 and December 31, 1994
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have
been prepared in a condensed format and, therefore, do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. However,
in the opinion of management, all adjustments, consisting only of
normal recurring adjustments, considered necessary for a fair
presentation have been reflected in the financial statements. The
results of operations for the six months ended June 30, 1995, are
not necessarily indicative of the results to be expected for the
full year. Certain reclassifications have been made to prior
period amounts to present them on a basis consistent with
classifications for the six months ended June 30, 1995.
2. LOANS
As of June 30, 1995, and December 31, 1994, the Bank's loan
portfolio consisted of the following (in thousands):
<TABLE>
June 30 December31,
1995 1994
<S> <C> <C>
Commercial .......................... $127,449 $126,495
Real Estate - Mortgage............... 21,012 18,526
Real Estate - Construction........... 21,367 18,599
Individual and Other................. 7,218 7,367
Lease Receivables.................... 398 202
Total gross loans and leases......... 177,444 171,189
Net deferred loan fees............... 322 317
Allowance for possible loan and
lease losses ....................... 3,522 3,546
Total loans and leases, net of
deferred fees and allowance for
possible loan and lease losses ..... $173,600 $167,326
Guaranteed portion of SBA loans
held for sale....................... 0 636
Unguaranteed portion of SBA loans
held for sale....................... 20,016 0
Mortgage loans held for sale......... 3,610 1,431
Total loans held for sale............ $ 23,626 $ 2,067
</TABLE>
The guaranteed portion of completed SBA loans at June 30, 1995 was
$8.4 million. Of total gross loans and leases at June 30, 1995,
$2.8 million were considered to be impaired (see Note 5). The
allowance for possible loan and lease losses included $771 thousand
related to these loans. The average recorded investment in
impaired loans during the six months ended June 30, 1995 was $3.1
million.
Sierra Tahoe Bancorp
Notes to Condensed Consolidated Financial Statements
June 30, 1995 and December 31, 1994
3. COMMITMENTS & CONTINGENT LIABILITIES
In the normal course of business, there are outstanding various
commitments and contingent liabilities, such as commitments to
extend credit and letters of credit, which are not reflected in the
financial statements. Management does not anticipate any material
loss as a result of these transactions.
4. INVESTMENT SECURITIES AND INVESTMENTS IN MUTUAL FUNDS
Sales of investment securities classified as held to maturity
consist of a single security which was sold within 90 days of the
maturity date. The amortized cost at the date of sale was $998,203
and the loss realized was $1,172.
5. IMPAIRED LOANS
Effective January 1, 1995, the Company adopted Statement of
Financial Accounting Standards ("SFAS") 114, Accounting by
Creditors for Impairment of a Loan, and 118, Accounting by
Creditors for Impairment of a Loan - Income Recognition and
Disclosure. SFAS No. 114 requires that an impaired loan be
measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate, or at the loan's
observable market price or the fair value of its collateral. SFAS
No. 118 amends SFAS No. 114 to allow a creditor to use existing
methods for recognizing interest income on impaired loans and
requires certain disclosures.
A loan is impaired when, based upon current information and events,
it is probable that the Company will be unable to collect all
amounts due according to the contractual terms of the loan
agreement. Loans are measured for impairment as part of the
Company's normal loan review process. Impairment losses are
included in the allowance for possible loan and lease losses
through a charge to provision for loan losses. The Company had
previously calculated its allowance for possible loan and lease
losses using methods approximating those prescribed by SFAS No.
114. The adoption of SFAS No. 114 did not have a material impact
on the Company's financial condition or results of operations.
Interest is recognized on impaired loans where cash is received and
the future collection of principal is considered by management to
be probable. The amount so recognized was not material to
operations during the first six months of 1995.
The principal effect on the Company of the adoption of SFAS No. 114
is the elimination of the category of loans classified as in-
substance foreclosures, resulting in the reclassification of such
amounts from other real estate owned to loans. The Company
accordingly reclassified $572,000 of such loans at January 1,
1995.
<PAGE>
SIERRA TAHOE BANCORP AND SUBSIDIARIES
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
FINANCIAL CONDITION
Effective February 8, 1994 the Bancorp issued $10 million of 8 1/2%
Convertible Debenture Securities due February 1, 2004 ("Debenture
Offering"). A portion of the net proceeds from this offering have
been utilized to pay operating expenses of the holding company and
to provide a $300 thousand equity infusion into Sierra Bank of
Nevada ("SBN"). Of the $7.2 million remainder, $1.0 million is
invested in a loan, and the balance has been used to reduce the
Company's reliance on out-of-area time deposits. It is intended
that the additional capital will be used to expand the Company's
operations in Nevada and Northern California, and to expand the
Company's SBA and other business operations.
Total assets increased by $23.6 million from $260.0 million at
December 31, 1994, to $283.6 million at June 30, 1995. This
increase included increases of $2.8 million in federal funds sold
and $27.8 million in loans, net of the allowance for possible loan
and lease losses. These increases were offset by decreases of $1.2
million in cash and due from banks, $5.6 million in investment
securities and investments in mutual funds, and $0.2 million in
other assets. Mutual funds, federal funds sold and unpledged
investment securities classified as available for sale (which
consist primarily of short-term U.S. Treasury securities with a
remaining maturity of less than two years) are all sources of
short-term liquidity and can be used somewhat interchangeably to
provide liquidity. Of the Company's total investment securities,
$7.0 million were pledged at June 30, 1995.
The increase in loans includes the effect of the Company's decision
to retain the guaranteed portion of its SBA loans. This represents
a new strategy whereby the Company intends to securitize and sell
the unguaranteed portion of SBA loans. SBA loans increased $15.7
million from $95.6 million at December 31, 1994 to $111.3 million
at June 30, 1995. Other loan increases were $4.6 million in
commercial loans, $2.5 million in real estate loans, $2.8 million
in construction loans, and $2.2 million in mortgage loans held for
sale. Gross loans outstanding at SBN increased during 1995 from
$41.1 million at December 31, 1994 to $43.2 million at June 30,
1995. The Company's first securitization of between $20 million
and $40 million, depending upon SBA approval, is expected to be
completed in late 1995 or early 1996.
Deposits increased by $23.0 million from $218.9 million at December
31, 1994 to $241.9 million at June 30, 1995. A decrease of $7.8
million in interest-bearing transaction accounts and $6.1 million
in non-interest bearing demand accounts were offset by a $37.3
million increase in time deposits. The Company attributes the
decrease in transaction accounts primarily to two factors, the
transfer of funds into higher yielding time certificates of deposit
and the movement of funds into nonbank investment vehicles such as
money market mutual funds. The increase in time deposits includes
an increase in out-of-area certificates of deposit of $21.9
million.
The unrealized loss on investment securities available for sale,
net of the related tax effect, decreased $427 thousand from $678
thousand at December 31, 1994 to $251 thousand at June 30, 1995.
Of this ending balance, $106 thousand represents unrealized loss on
mutual funds and $145 thousand relates to other securities. Net
unrealized losses on securities classified as available for sale,
excluding the related tax effect, represent 1.6% of the amortized
cost of the Company's available for sale securities at June 30,
1995.
In June and July 1993, SBN entered into two Memoranda of
Understanding ("MOU") with the Federal Reserve Bank ("FRB") and the
Nevada Department of Commerce, Division of Financial Institutions
(the "NDFI"). The June 1993 Memorandum was terminated by the FRB
and the NDFI on May 12, 1995. The July 1993 Memorandum with its
regulators includes provisions that it must establish satisfactory
corrective actions to remedy and prevent certain compliance
deficiencies and weaknesses by strengthening its policies and
procedures related to its ongoing operations. Termination of the
agreement is dependent on the FRB and NDFI agreeing to terminate
the agreement which is in the sole discretion of the FRB and NDFI.
The Company believes SBN is in substantial compliance with the
terms of the agreement.
On April 17, 1995, Truckee River Bank ("TRB") opened two new
branches, one in Auburn and a second branch in Grass Valley,
California. On July 17, 1995, TRB opened a regional facility in
Sacramento, California. SBN has received approval for a branch in
Carson City, Nevada. Start-up costs incurred for these branches
will be funded from operating surpluses at the respective banks.
SBN is constructing a new headquarters facility in Reno, with
ground breaking planned for the third quarter of 1995. Total costs
incurred through June 30, 1995 for the land and building were $1.0
million.
In July 1995, the Company discontinued its mortgage banking
operations which in recent years have not been a significant
portion of the Company's business and were not currently
profitable. A one time pre-tax charge of approximately $200,000
will be taken in the third quarter.
The Bancorp paid a dividend of twelve cents per share during March
1995. During June 1995, the Company repurchased 50,000 shares of
its common stock on the open market at a total cost of $445
thousand.
RESULTS OF OPERATIONS (Six Months Ended June 30, 1995 and 1994)
Net income for the six months ended June 30, 1995 decreased by
12.9% from $1,107 thousand for the six months ended June 30, 1994
to $964 thousand during the current six month period. Net interest
income increased by $1,984 thousand and the provision for income
taxes was reduced by $100 thousand. The positive effect of these
items on net income was offset by a $50 thousand increase in the
provision for possible loan and lease losses, a reduction of $398
thousand in other operating income and a $1,779 thousand increase
in other operating expenses.
Net Interest Income
The yield on average interest earning assets for the six months
ended June 30, 1995 was 7.50%. This compares to 5.88% for the
first six months of 1994. The increase reflects the increase in
the average prime rate during the comparison periods and an
increase in the percentage of average loans to average interest
earning assets from 77.5% in the first six months of 1994 to 83.1%
in the current six months.
Interest on debentures for the first six months of 1995 was $425
thousand compared to $344 thousand for 1994. Pending the ultimate
use of the debenture proceeds as more fully described in the
section "FINANCIAL CONDITION", these funds are being temporarily
used to reduce the Company's reliance on out-of-area time deposits
which are accruing interest at a lesser rate than the rate paid on
the debentures.
Yields and interest earned, including loan fees for the six months
ended June 30, 1995 and 1994, were as follows (in thousands except
percent amounts):
<TABLE>
Six Six
Months Months
Ended Ended
06/30/95 06/30/94
<S> <C> <C>
Average loans outstanding (1) $182,800 $164,636
Average yields 11.8% 9.7%
Amount of interest and
origination fees earned $ 10,730 $ 7,882
</TABLE>
(1) Amounts outstanding are the average of daily balances for
the periods.
Excluding loan fees of $561 thousand and $495 thousand for the six
months ended June 30, 1995 and 1994, yields on average loans
outstanding were 11.2% and 9.1%, respectively. The prime rate
(upon which a large portion of the Company's loan portfolio is
based), averaged 8.9% for the 1995 period and 6.5% for the 1994
period.
The Company has experienced an increase in its overall cost of
deposits from 2.15% for the six months ended June 30, 1994 to 2.86%
in the current period. This includes the effect of the overall
increase in rates during the comparison period and an increase in
the percentage of time deposits to total deposits.
Rates and amounts paid on average deposits including non-interest
bearing deposits for the six months ended June 30, 1995 and 1994
were as follows (in thousands except percent amount):
<TABLE>
Six Six
Months Months
Ended Ended
06/30/95 06/30/94
<S> <C> <C>
Average deposits outstanding (1) $219,347 $216,754
Average rates paid 2.9% 2.1%
Amount of interest paid
or accrued $ 3,113 $ 2,307
</TABLE>
(1) Amount outstanding is the average of daily balances for the
period.
The effective interest rate paid on NOW accounts,
Money Market accounts and Time Certificates of Deposits during the
first six months of 1995 and 1994 were as follows:
<TABLE>
1995 1994
MONEY MONEY
NOW MARKET TIME NOW MARKET TIME
<S> <C> <C> <C> <C> <C> <C>
Average Balance
(in thousands) (1) $33,958 $52,608 $71,514 $31,395 $60,507 $64,058
Rate Paid 1.3% 2.8% 5.7% 1.3% 2.3% 3.9%
</TABLE>
Provision for Possible Loan and Lease Losses
In evaluating the Company's allowance for possible loan and lease
losses, management considers the credit risk in the various loan
categories in its portfolio. Historically, most of the Company's
loan losses have been in its commercial lending portfolio, which
includes SBA loans and local commercial loans. From inception of
its SBA lending program in 1983 through 1990, the Company sustained
a relatively low level of losses from these loans. Losses, net of
recoveries from the unguaranteed portion of SBA loans retained in
the Company's loan portfolio, increased from $232 thousand in 1991
to $648 thousand in 1992 and decreased to $377 thousand in 1993 and
$373 thousand in 1994 and totaled $333 thousand for the six months
ended June 30, 1995. The increase in 1992, 1993, 1994 and 1995
over 1991 includes the effect of the maturing of the SBA loan
portfolio, the impact of the recession in California on borrowers
and collateral values, and an increase in the size of the SBA loan
portfolio. Most of the Company's other commercial loan losses have
been for loans to businesses within the Tahoe Basin area and,
during 1993, 1994 and 1995, at the Company's Sierra Bank of Nevada
facility. The Company believes that it has taken steps to minimize
its commercial loan losses, including centralization of lending
approval and processing functions. It is important for the Company
to maintain good relations with local business concerns and, to
this end, it supports small local businesses with commercial loans.
To offset the added risk these loans may represent, the Company
typically charges a higher interest rate. It also attempts to
mitigate this risk through the loan review and approval process.
The provision for loan and lease losses was $590 thousand for the
first six months of 1995 versus $540 thousand for the same period
in 1994. The allowance for possible loan and lease losses as a
percentage of loans was 1.75% at June 30, 1995, compared with 2.05%
at December 31, 1994, and 2.30% at June 30, 1994. Net charge-offs
for the six months were $614 thousand compared to $274 thousand for
the first six months of 1994. Although the allowance as a
percentage of loans has decreased, the allowance as a percentage of
nonaccrual loans has increased as compared to December 31, 1994
levels when adjusted for the reclassification of assets formerly
classified as in-substance foreclosures to loans. In addition, the
percentage of portions of loans guaranteed by the U.S. Government
has increased from 6.7% at December 31, 1994 and 8.8% at June 30,
1994 to 10.9% at June 30, 1995. The Company will monitor its
exposure to loan losses each quarter and adjust its level of
provision in the future to reflect changing circumstances. The
Company expects that its existing allowance for possible loan and
lease losses will be adequate to provide for any additional losses.
The following table sets forth the ratio of nonaccrual loans to
total loans, the allowance for possible loan and lease losses to
nonaccrual loans and the ratio of the allowance for possible loan
and lease losses to total loans, as of the dates indicated.
<TABLE>
June 30 December 31,
1995 1994 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Nonaccrual loans
to total loans 1.4% 2.0% 1.4% 1.8% 2.4%
Allowance for
possible loan
and lease losses
to nonaccrual
loans 123.7% 112.3% 142.9% 120.9% 72.5%
Allowance for
possible loan and
lease losses to
total loans 1.8% 2.3% 2.1% 2.2% 1.8%
</TABLE>
Other Operating Income
Other operating income declined from $4.5 million during the first
six months of 1994 to $4.1 million during the current six month
period. This reduction is primarily related to a decrease in net
gain on sale of loans.
The net gain on sale of SBA loans for the current six month period
declined to $293 thousand from $1,136 thousand for the six months
ended June 30, 1994. This decline resulted from a decrease in
sales from $17.7 million for the six months ended June 30, 1994 to
$5.1 million in 1995. The Company has altered its strategy with
respect to the sale of SBA loans. Rather than continuing to sell
the guaranteed portion of the SBA portfolio, the Company intends to
retain the guaranteed portion and securitize and sell portions of
unguaranteed SBA loans. The Company estimates that the decline in
sales between the two periods would be reduced by up to $7.6
million if it had continued to sell the guaranteed portion of loans
available for sale in 1995, resulting in an estimated decline in
sales of approximately $5 million. This decline includes the
effect of recent changes to the SBA program including a reduction
in the maximum loan that may be made under the SBA 7(a) program to
$500 thousand and, effective May 15, 1995, the temporary
elimination of guarantees for refinanced debt, with limited
exceptions.
Net servicing income on SBA loans (the net of the servicing income
generated on sold SBA loans less the amortization of the gain
recorded on the sale of these same loans and the amortization of
purchased SBA servicing rights) increased by $375 thousand from
$2,004 thousand during the first six months of 1994 to $2,379
thousand for the six months ended June 30, 1995. This increase
reflects a lower amortization resulting from a change in the
estimates of prepayment speeds of SBA loans TRB services for
investors.
Other Operating Expense
The following table compares the various elements of non-interest
expense as an annualized percentage of total assets for the first
six months of 1995 and 1994 (in thousands except percentage
amounts):
<TABLE>
Six Months Salaries & Occupancy & Other
Ended Average Related Equipment Operating
June 30 Assets(1) Benefits(2) Expenses Expenses
_________________________________________________________________
<C> <C> <C> <C> <C>
1995 $ 261,032 3.9% 1.1% 2.7%
1994 $ 254,170 3.5% 1.0% 1.9%
</TABLE>
(1) Based on average daily balances.
(2) Excludes provision for payment of bonuses and contribution
to KSOP plan. Including these items, percentages are 4.1%
and 3.8% for 1995 and 1994, respectively.
<PAGE>
The following table summarizes the principal elements of operating
expenses and discloses the increases (decreases) and percent of
increases (decreases) for the six months ended June 30, 1995 and
1994 (amounts in thousands except percentage amounts):
<TABLE>
Six Months Ended Increase (Decrease)
June 30, 1995 over 1994
1995 1994 Amount Percentage
<S> <C> <C> <C> <C>
Salaries and related
benefits.............. $ 5,263 $ 4,791 $ 472 9.9%
Occupancy and
equipment.............. 1,429 1,234 195 15.8
Insurance.............. 140 148 (8) (5.4)
Postage................ 149 128 21 16.4
Stationery and
supplies.............. 145 141 4 2.8
Telephone.............. 150 127 23 18.1
Advertising............ 352 171 181 105.8
Legal.................. 211 12 199 1,658.3
Consulting............. 191 73 118 161.6
Audit and accounting
fees.................. 96 91 5 5.5
Directors' fees and
expenses.............. 505 174 331 190.2
Debenture offering
cost.................. 48 37 11 29.7
FDIC assessments....... 275 301 (26) (8.6)
Sundry losses.......... 352 51 301 590.2
Other.................. 833 881 (48) 5.4
$ 10,139 $8,360 $ 1,779 21.3%
</TABLE>
The increase in salaries and benefits is primarily attributable to
the new branches and the addition of several management level
employees, including a President and Senior Lending Officer at TRB
and a Senior Lending Officer at SBN. Additionally, during 1994 the
Company increased its staffing in its SBA operations and during the
first quarter of 1995 opened a new equipment leasing department at
SBN. A portion of the rise in occupancy and equipment expenses
resulted from the opening of mortgage offices in Bellevue,
Washington and Las Vegas, Nevada late in 1994. Operating results
at the Bellevue, Washington office fell below expectations and
during May 1995 the Company began the process required to close
this office. The new TRB branches also contributed to the increase
in occupancy and equipment.
Advertising in 1995 includes an expanded budget for TRB and costs
related to TRB's new branches. Legal expenses relate to general
litigation matters and a voluntary internal investigation of the
Company's investment in an entity known as Community Assets
Management. Consulting costs in 1995 include costs related to a
corporate identity study, a review of directors' compensation and
assistance in strategic planning . Directors' expenses in 1995
include a $314 thousand pre-tax charge for the Director Emeritus
Program, which provides retirement benefits to certain directors
who choose to participate in the program. Sundry losses in 1995
include a $100 thousand business loss related to other real estate
owned, $126 thousand related to two litigation matters, and $22
thousand related to the closing of the Bellevue mortgage office.
Provision for Income Taxes
Provision for income taxes have been made at the prevailing
statutory rates and include the effect of items which are
classified as permanent differences for federal and state income
tax. The provision for income taxes was $568 thousand and $668
thousand for the six months ended June 30, 1995 and 1994,
respectively, representing 37.1% and 37.6% of income before
taxation for the respective periods.
Results of Operations (Three months ended June 30, 1995 and 1994)
Net income decreased by $158 thousand from $594 thousand for the
three months ended June 30, 1994 to $436 thousand for the current
quarter. The decrease included a $992 thousand increase in net
interest income and a $110 thousand reduction in the provision for
income taxes. These items were offset by a $50 thousand increase
in the provision for possible loan and lease losses, a $423
thousand decrease in other operating income and a $787 thousand
increase in other operating expenses.
Net Interest Income
The yield on net interest earning assets increased from 6.06%
during the second quarter of 1994 to 7.52% during the three months
ended June 30, 1995. As in the six month comparison, yield was
positively affected by an increase in the percentage of average
loans to average earning assets from 78.6% during the 1994 quarter
to 84.2% in the 1995 quarter.
Yields and interest earned, including loan fees for the three
months ended June 30, 1995 and 1994 were as follows (in thousands
except percent amounts):
<TABLE>
Three Months Three Months
Ended 06/30/95 Ended 06/30/94
<S> <C> <C>
Average loans
outstanding (1) $188,845 $167,169
Average yields 12.0% 9.8%
Amount of interest and
origination fees earned $ 5,647 $ 4,099
</TABLE>
(1) Amounts outstanding are the average of daily balances for the
periods.
Excluding loan fees of $318 thousand and $270 thousand for the
three months ended June 30, 1995 and 1994, respectively, yields on
average loans outstanding were 11.3% and 9.2%. The prime rate
(upon which a large portion of the Company's loan portfolio is
based) was 9.0% for the 1995 quarter and averaged 6.9% for the 1994
quarter. This increase in prime is the major component of the
increase in loan yields.
Other earning assets averaged $35.4 million in the current quarter
as compared to $45.4 million for the three months ended June 30,
1994.
Rates and amounts paid on average deposits, including non-interest
bearing deposits for the three months ended June 30, 1995 and 1994,
were as follows (in thousands except percent amounts):
<TABLE>
Three Months Three Months
Ended 06/30/95 Ended 06/30/94
<S> <C> <C>
Average deposits outstanding (1) $223,659 $215,224
Average rate paid 3.1% 2.2%
Amount of interest paid or accrued $ 1,717 $ 1,160
</TABLE>
(1) Amount outstanding is the average of daily balances for the
periods.
The effective interest rates paid on NOW accounts, Money Market
accounts and Time Certificates of Deposits during the second
quarter of 1995 and 1994 were as follows: (In thousands except
percent amounts)
<TABLE>
1995 1994
MONEY MONEY
NOW MARKET TIME NOW MARKET TIME
<S> <C> <C> <C> <C> <C> <C>
Average Balance $34,765 $50,175 $79,735 $32,366 $60,122 $62,880
Rate Paid 1.3% 2.9% 5.9% 1.3% 2.4% 4.0%
</TABLE>
Provision for Possible Loan and Lease Losses
The Company believes that an increase in the level of the provision
for possible loan and lease losses is appropriate given the current
level of losses and the Company's review of the exposure to loss in
its loan portfolio.
Other Operating Income
The net gain on sale of SBA loans decreased by $724 thousand from
$776 thousand during the 1994 quarter to $52 thousand during the
three months ended June 30, 1995. This decrease resulted from a
decrease in sales from $13.1 million during the second quarter of
1994 to $1.3 million in the current quarter. As discussed earlier,
the Company has changed its strategy with respect to sales of SBA
loans and has experienced a decline in its SBA loan production.
Net servicing income on SBA loans increased from $982 thousand
during the second quarter of 1994 to $1,180 thousand for the three
months ended June 30, 1995. This increase results from the change
in amortization of excess servicing discussed earlier.
Other Operating Expense
The following table compares the various elements of non-interest
expense as an annualized percentage of total assets for the second
quarter of 1995 and 1994 (in thousands except percentage amounts):
<TABLE>
Salaries & Occupancy & Other
Three Months Average Related Equipment Operating
Ended June 30, Assets(1) Benefits(2) Expenses Expenses
<C> <C> <C> <C> <C>
1995 $265,454 3.8% 1.1% 2.8%
1994 $254,314 3.6% 1.0% 2.0%
</TABLE>
(1) Based on average daily balances.
(2) Excludes provision for payment of bonuses and contribution to
KSOP plan. Including these items, percentages are 3.8% for both
1995 and 1994.
<PAGE>
The following table summarizes the principal elements of operating
expenses and discloses the increases (decreases) and percent of
increases (decreases) for the three months ended June 30, 1995 and
1994 (amounts in thousands except percentage amounts):
<TABLE>
Three Months Ended Increase (Decrease)
June 30 1995 over 1994
1995 1994 Amount Percentage
<S> <C> <C> <C> <C>
Salaries and related
benefits.............. $ 2,541 $2,439 $ 102 4.2%
Occupancy and
equipment.............. 719 613 106 17.3
Insurance.............. 65 74 (9) (12.2)
Postage................ 84 56 28 50.0
Stationery and
supplies.............. 81 66 15 22.7
Telephone.............. 78 70 8 11.4
Advertising............ 210 97 113 116.5
Legal.................. 112 12 100 833.3
Consulting............. 91 47 44 93.6
Audit and accounting
fees.................. 40 56 (16) (28.6)
Directors' fees and
expenses.............. 408 85 323 380.0
Debenture offering
cost.................. 24 10 14 140.0
FDIC assessments....... 138 158 (20) (12.7)
Sundry losses.......... 69 47 22 46.8
Other.................. 445 488 (43) (8.8)
$5,105 $4,318 $ 787 18.2%
</TABLE>
Of the 17.3% increase in occupancy and equipment, 6.5% relates to
the new TRB branches. Consistent with the six month comparison,
advertising in 1995 reflects an expanded budget for TRB and costs
related to the new branches. The increase in legal primarily
results from a voluntary internal investigation of the Company's
investment in Community Assets Management. Directors' expenses
include the minimum cost of the Director Emeritus Program.
Provision for Income Taxes
The provision for income taxes was $267 thousand and $377 thousand
for the three months ended June 30, 1995 and 1994, respectively,
representing 38.0% and 38.8%, of income before taxation for the
respective periods.
<PAGE>
Sierra Tahoe Bancorp
10-Q Filing
June 30, 1995
Part II.
Item 1. Legal Proceedings.
During 1987, the Company took title, through
foreclosure, of a property located in Placer County
which subsequent to TRB's sale of the property was
determined to be contaminated with a form of
hydrocarbons. At the time it owned the property, TRB
became aware of and investigated the status of certain
buried underground tanks that had existed on the
property. TRB hired a consultant to study the tanks and
properly seal them. Several years later, and after
resale of the property, contamination was observed in
the area of at least one of the buried tanks and along
an adjoining riverbank of the Yuba River. TRB, at the
time of resale of the property, was not aware of this
contamination but was aware of the existence of the
tanks and disclosed this to its purchaser.
A formal plan of remediation has not been approved by
the County of Placer or the State Regional Water Quality
Board. As a result of the discovery of the
contamination, two civil lawsuits have been very
recently instituted against TRB by the current owner of
the property, who is also TRB's borrower.
TRB's counsel on this matter believes that TRB's share
of the cost of remediation will not be material to TRB's
or the Company's performance and will be within existing
reserves established by TRB for this matter.
The Company and its subsidiaries have been named in a
suit filed in the U.S. District Court, Central District
of California. The Plaintiffs are banks who lost
portions of investments made through a fund managed by
Community Assets Management ("CAM"), which is no longer
in operation. Plaintiffs allege that the Company and
its subsidiaries exited the fund prior to being exposed
to loss based upon inside information. Also named in
his capacity as director of CAM is Jerrold Henley who
also serves the Company as a Director and Chairman of
the Board. The Company has investigated the allegations
in detail and has found no basis for the action and will
defend the civil action. The Company believes this
issue will not have a material adverse impact on its
financial condition or results of operations.
In addition, the Company is subject to some minor
pending and threatened legal actions which arise out of
the normal course of business and, in the opinion of
Management, the disposition of these claims currently
pending will not have a material adverse effect on the
Company's financial position.
Item 2. Change in Securities. No changes.
Item 3. Defaults Upon Senior Securities. Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders.
None.
Item 5. Other Information. Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.1 Lease Agreement between Truckee River
Bank and Realty Advisors, Inc.
10.2 Lease Agreement between Truckee River
Bank and Western Investment Real Estate
Trust and Pinecreek Shopping Center
Associates.
11. Statement regarding computation of per share earnings.
(b) Reports on Form 8-K.
The Bancorp filed a Form 8-K dated May 25, 1995,
reporting authorization by its Board of Directors to
repurchase up to 50,000 shares of its common stock.
<PAGE>
10-Q Filing
June 30, 1995
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf of the undersigned thereunto duly authorized.
Date August 9, 1995 /s/ William T. Fike
William T. Fike
President/Chief Executive Officer
Date August 9, 1995 /s/ David C. Broadley
David C. Broadley
Executive Vice
President/
Chief Financial Officer
STANDARD FORM
OFFICE LEASE
(BASE YEAR)
LANDLORD: Realty Advisors, Inc., A Delaware Corporation
TENANT: Truckee River Bank, a California Corporation
PROJECT: 1651 Response Road
CITY, STATE: Sacramento, California 95815
DATE: June 15, 1995
<PAGE>
STANDARD FORM OFFICE LEASE
(BASE YEAR)
TABLE OF CONTENTS
Page
1. Basic Lease Terms. . . . . . . . . . . . . . 1
2. Premises . . . . . . . . . . . . . . . . . . 2
3. Lease Term . . . . . . . . . . . . . . . . . 4
4. Possession . . . . . . . . . . . . . . . . . 4
5. Rent . . . . . . . . . . . . . . . . . . . . 5
6. Additional Rent. . . . . . . . . . . . . . . 6
7. Prepaid Rent . . . . . . . . . . . . . . . . 7
8. Security Deposit . . . . . . . . . . . . . . 8
9. Use of Premises and Project Facilities . . . 8
10. Surrender of Premises; Holding Over. . . . . 9
11. Signage. . . . . . . . . . . . . . . . . . . 9
12. Personal Property Taxes. . . . . . . . . . .11
13. Parking. . . . . . . . . . . . . . . . . . .11
14. Utilities. . . . . . . . . . . . . . . . .12
15. Maintenance. . . . . . . . . . . . . . . . .12
16. Alterations. . . . . . . . . . . . . . . .12
17. Release and Indemnity. . . . . . . . . . . .13
18. Insurance. . . . . . . . . . . . . . . . . .14
19. Destruction. . . . . . . . . . . . . . . . .15
20. Condemnation . . . . . . . . . . . . . . . .15
21. Assignment or Sublease . . . . . . . . . . .16
22. Default. . . . . . . . . . . . . . . . . . .17
23. Landlord's Remedies. . . . . . . . . . . . .18
24. Default by Landlord. . . . . . . . . . . . .18
25. Entry of Premises and Performance by Tenant.19
26. Subordination. . . . . . . . . . . . . . . .19
27. Notice . . . . . . . . . . . . . . . . . . .20
28. Waiver . . . . . . . . . . . . . . . . . . .20
29. Limitation of Liability. . . . . . . . . . .20
30. Force Majeure. . . . . . . . . . . . . . . .21
31. Professional Fees. . . . . . . . . . . . . .21
32. Examination of Lease . . . . . . . . . . . .21
33. Estoppel Certificate . . . . . . . . . . . .22
34. Rules and Regulations. . . . . . . . . . . .22
35. Project Planning . . . . . . . . . . . . . .22
36. Liens. . . . . . . . . . . . . . . . . . . .22
37. Miscellaneous Provisions . . . . . . . . . .23
EXHIBITS
A. Building Floor Plan Showing Premises . . . . . . . . . . A-1
B. Project Site Plan. . . . . . . . . . . . . . . . . . . . B-1
C. Work Letter Agreement. . . . . . . . . . . . . . . . . . C-1
D. Notice of Lease Term Dates . . . . . . . . . . . . . . . D-1
E. Tenant Estoppel Certificate. . . . . . . . . . . . . . . E-1
F. Rules and Regulations. . . . . . . . . . . . . . . . . . F-1
G. Project Signage Criteria . . . . . . . . . . . . . . . . G-1
H. Standard for Utilities and Services. . . . . . . . . . . H-1
I. Parking Rules and Regulations. . . . . . . . . . . . . . I-1
J. Early Entry Rider. . . . . . . . . . . . . . . . . . . . J-1
<PAGE>
STANDARD FORM OFFICE LEASE
(BASE YEAR)
1. BASIC LEASE TERMS.
a. DATE OF LEASE EXECUTION: June 15, 1995
b. TENANT: Truckee River Bank , a California Corporation
Trade Name: N/A
Address (Leased Premises): 1651 Response Road, Sac.,CA
Suite Number : Suite 100 Floor(s): 1st -
c. LANDLORD: Realty Advisors, Inc., a Delaware Corp.
Address (FOR RENT AND NOTICES): 501 "S" Street,
Sacramento, CA 95814
Copy To:
d. TENANT'S PERMITTED USE OF PREMISES: See Ref. #38
e. PREMISES:
Those Certain Premises Defined in PARAGRAPH 2 Below.
f. PREMISES AREA: Approximately 13,504 Rentable Sq. Feet
g. PROJECT AREA: Approximately 47,146 Rentable Sq. Feet
h. PREMISES PERCENT OF PROJECT: 28.64 % on a Rentable Sq. Feet
Basis
i. TERM AND COMMENCEMENT: Term: 120 Lease Months
Commencement Date: July 1, 1995.
Commencement Date: July 1, 1995
Expiration Date: June 30, 2005
j. MONTHLY BASIC RENT: See 1 (2) 1 (2)
Dollars ($ )
k. ANNUAL BASIC RENT:
Dollars ($ )
l. RENT ADJUSTMENT (Initial One):
(1) Cost of Living. If this provision is initialed, the cost of
living provisions of Subparagraph 5(c) apply using the Consumer
Price Index, Urban Wage Earners and Clerical Workers (
), all items, Base 1982 84 (Index).
(2) Step Increase. If this provision is initialed, the step
adjustment provisions of Subparagraph 5(d) apply as follows:
Effective Date of New Base
Rent Increase Monthly Rent
July 1, 1995 $ 0.00
October 1, 1995 $14,900.00
July 1, 1996 $22,957.00
July 1, 1998 $25,388.00
July 1, 2000 $26,063.00
July 1, 2002 $26,738.00
July 1, 2004 $27,414.00
m. BASE YEAR: The twelve month period commencing January 1,
1996, and ending December 31 , 1996.
n. PREPAID RENT (For Last Month of Term): None required
Dollars
($ )
o. TOTAL SECURITY DEPOSIT: $None Required including $_____ non-
refundable cleaning fee.
p. BROKER(S): Bruce Hohenhaus-Colliers Iliff Thorn-Lessee
Doug Barnett, CCIM, SIOR-Colliers Iliff Thorn-Lessor
q. GUARANTOR(S): None Required
r. TENANT IMPROVEMENTS:
All work performed by Landlord to prepare the Premises for
occupancy pursuant to the terms of the Work Letter Agreement
attached hereto as Exhibit C.
s. TENANT IMPROVEMENT ALLOWANCE:
Landlord grants to Tenant a Tenant Improvement Allowance
pursuant to Paragraph 39 of first Addendum.
t. PARKING: See Paragraph 40 of first Addendum.
u. ADDITIONAL SECTIONS:
Additional sections of this Lease, contained in the
"Addendum to the Lease" numbered 38 through _ 49 are
attached hereto and made a part hereof.
v. Riders numbered 1 through are attached hereto and
made a part hereof. If none, so state in the following
space .
w. EXHIBITS:
Exhibits lettered A through J are attached and made a part
hereof. Exhibits C and G have purposely been omitted.
This Paragraph 1 represents a summary of the basic terms of this
Lease. In the event of any inconsistency between the terms
contained in this Paragraph I and any specific provision of this
Lease, the terms of the more specific provision shall prevail.
2. PREMISES.
(a) Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, the Premises contained within the suite
designated in Subparagraph l(b) and outlined on the Floor Plan
attached hereto and marked Exhibit A and incorporated herein by
this reference. The Premises are situated in that certain
building which is located at the address designated in
Subparagraph l(b) (the "Building"), on the parcel or parcels of
real property (the"Site") outlined on the Site Plan attached
hereto as Exhibit B and incorporated herein by this reference
(the Building and the Site together with all other buildings,
parking facilities and any and all other improvements situated
on the Site are herein collectively referred to as the
"Project"). The premises are improved or to be improved with
certain tenant improvements (the Tenant Improvements)
described in the Work Letter Agreement, a copy of which is
attached hereto and marked Exhibit C and incorporated herein by
this reference, said Premises being agreed, for purposes of this
Lease, to have an area of approximately the number of Usable
Square Feet designated in Subparagraph 1 (f) and being situated
on the floors) designated in Subparagraph 1 (b).
(b) The parties agree that the letting and hiring of the
Premises is upon and subject to the terms, covenants and
conditions herein set forth and Tenant covenants as a material
part of the consideration for this Lease to keep and perform
each and all of said terms, covenants and conditions by it to be
kept and performed and that this Lease is made upon the
condition of such performance.
(c) The term "Usable Square Feet" as used in this Lease means
the area of the Premises (or other area being measured) as
determined by measuring the area within the bounds of the inside
surface of the glass or other material in the outer wall of the
Building and the surface facing the Premises of all partitions
separating the Premises from the Building core, adjoining tenant
space and public corridors and other Common Areas of the
Project. No deductions shall be made for space occupied by
structural or functional columns or other projections. For
purposes of establishing the initial Tenant's Percentage, Tenant
Annual Base year Expense Allowance and Annual Basic Rent as show
in Paragraph 1 of this Lease, the number of Usable Square Feet
of the Project is deemed to be as set forth in Subparagraph
1(g).
(d) Tenant shall have the nonexclusive right to use in common with
the Landlord and all persons, firms and corporations conducting
business in the Project and their respective customers, guests,
licensees, invitees, subtenants, employees and agents, subject
to the terms of this Lease, the Rules and Regulations referred
to in Paragraph 34 and all covenants, conditions and
restrictions affecting the Project, the following areas ("Common
Areas") appurtenant to the Premises: (i) the Project's common
entrances, hallways, lobbies, restrooms not located within the
premises of any tenant, elevators, stairways and access ways,
drives and platforms and any passageways and service ways
thereto, and the common pipes, conduits, wires and appurtenant
equipment serving the Premises; and (ii) outside parking areas,
loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways and landscaped areas and similar
areas and facilities within the Project which are for the common
use of the owners, tenants and occupants of buildings within the
Project and their respective employees, customers and invitees.
(e) Landlord reserves the right from time to time without
unreasonable interference with Tenant's use: (i) to install,
use, maintain, repair and replace pipes, ducts, conduits, wires
and appurtenant meters and equipment for service to other parts
of the Building above the ceiling surfaces, below the floor
surfaces, within the walls and in the central core areas, and to
relocate any pipes, ducts, conduits, wires and appurtenant
meters and equipment included in the Premises which are located
in the Premises or located elsewhere outside the Premises, and
to expand the Building;(ii) to make changes to the design of the
Project including changes to the Common Areas, including,
without limitation, changes in the location, size, shape and
number of buildings driveways, entrances, parking space, parking
areas, loading and unloading areas, ingress, egress, direction
of traffic, landscape areas and walkways; (iii) to close
temporarily any of the Common Areas for maintenance purposes so
long as reasonable access to the Premises remains available;
(iv) to designate other land outside the boundaries of the
Building or Project to be a part of the Common Areas; (v) to add
additional buildings or improvements to the Common Areas; (vi)
to use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Building or Project,
or any portion thereof; and (vii) to do and perform such other
acts and make such other changes in, to or with respect to the
Common Areas, the Building or the Project as Landlord may, in
the exercise of sound business judgement, deem to be
appropriate.
3. LEASE TERM.
The term of this Lease shall be for the period designated in
Subparagraph l(i) commencing on the Commencement Date, and
ending on the Expiration Date as set forth in said Subparagraph
l (i), unless the term hereby demised shall be sooner terminated
as herein provided ("Term"). Notwithstanding the foregoing, if
the Commencement Date falls on any other day other than the
first day of a calendar month then the Term of this Lease shall
be measured from the first day of the month following the month
in which the Commencement Date occurs.
4. POSSESSION.
(a) Delivery of Possession. Except as provided in paragraph 39 of
the first Addendum, Landlord agrees to deliver possession of
Premises to Tenant is an "as is" condition in accordance with
the terms of this Lease and attached hereto as Exhibit C.
Notwithstanding the foregoing, Landlord shall not be obligated
to deliver possession of the Premises to Tenant until Landlord
has received from Tenant all of the following: (i) The first
monthly installment of Annual Basic Rent; (ii) executed copies
of policies of insurance or certificates thereof as required
under Paragraph 18 of this Lease; and (iii) copies of all
governmental permits and authorizations required in connection
with Tenant's operation of its business upon the Premises.
Should Tenant desire to enter the Premises early for purposes of
installing trade fixtures and equipment and to commence
construction of any improvements within the Premises which are
to be constructed at Tenant's sole cost and expense, Tenant
shall provide Landlord with no less than seven (7) days prior
notice of such intended early entry and shall execute and
deliver to Landlord concurrently with such notice the Early
Entry Rider attached hereto as Exhibit J.
(b) Late Delivery. Tenant agrees that if Landlord is unable to
deliver possession of the Premises to Tenant on or prior to the
Estimated Commencement Date specified in Subparagraph l(i), this
Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting therefrom, nor
shall the Expiration Date of the Term be in any way extended,
unless such late delivery shall be due solely to the gross
negligence or willful misconduct of Landlord, in which event, as
Tenant's sole remedy, the Commencement Date and the Expiration
Date of the Term shall be extended one (1) day for each day
Landlord delays in delivering possession of the Premises to
Tenant due solely to Landlord's gross negligence or willful
misconduct.
(c) Condition of Premises. Except as provided in Paragraph 39 of the
First Addendum, Tenant agrees to lease said Premises in an "as
is" condition. Landlord grants no warranties to Tenant
whatsoever as to the condition of said Premises. Tenant shall
be responsible and pay for all repairs, improvements or
remodeling, including any repair work or replacement required by
wear and tear, obsolescence, building code, or other regulations
affecting the use and occupancy of the Premises. Furthermore,
any required and/or desired repairs, improvements and
maintenance within the interior of the Premises shall be at the
sole cost of Tenant and subject to the prior approval of
Landlord. By taking possession of the Premises, Tenant will be
deemed to have accepted the Premises and the Building in their
condition on the date of delivery of possession. Tenant
acknowledges that neither Landlord nor any agent of Landlord has
made any representation or warranty with respect to the
Premises, the Building, the Project or any portions thereof or
with respect to the suitability of same for the conduct of
Tenant's business. Without limiting the foregoing, if the
Building is newly constructed or recently renovated, Tenant's
execution of the Notice attached hereto as Exhibit D shall
constitute a specific knowledge and acceptance of the various
start-up inconveniences that may be associated with the use of
the Project and the Common Areas such as certain construction
obstacles including scaffolding, uneven air conditioning
services and other typical conditions incident to recently
constructed or renovated buildings.
5. RENT.
(a) Basic Rent. Tenant agrees to pay Landlord as Annual Basic Rent
for the Premises, in equal monthly installments as designated in
Subparagraph 1.1(2) each in advance on the first day of each and
every calendar month during the Term, except that the first
month's rent shall be paid upon the execution of this Lease. If
the Term of this Lease commences on a day other than the first
day of a calendar month or ends on a day other than the last day
of a calendar month, then the rent for such periods shall be
prorated in the proportion that the number of days this Lease is
in effect during such periods bears to thirty (30), and such
rent shall be paid at the commencement of such period. In
addition to the Annual Basic Rent, Tenant agrees to pay
additional rent as provided in Paragraph 6 and the amount of all
rental adjustments as and when hereinafter provided in this
Lease. The Annual Basic Rent, any additional rent payable
pursuant to the provisions of this Lease, and any rental
adjustments shall be paid to Landlord, without any prior demand
therefore, and without any deduction or offset, whatsoever in
lawful money of the United States of America, which shall be
legal tender at the time of payment, at the address of Landlord
designated in Subparagraph l(c) or to such other person or at
such other place as Landlord may from time to time designate in
writing. Further, all charges to be paid by Tenant hereunder,
including, without limitation, payments for real property taxes,
insurance, repairs and parking, if any, shall be considered
additional rent for the purposes of this Lease, and the word
"rent" in this Lease shall include such additional rent unless
the context specifically or clearly implies that only the Annual
Basic Rent is referenced. Annual Basic Rent shall be adjusted
as provided in Subparagraph l(l).
(b) Late Payment. Tenant acknowledges that late payment by Tenant
to Landlord of any rent or other sums due under this Lease will
cause Landlord to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and
impracticable to ascertain. Such costs include, without
limitation, processing and accounting charges and late charges
that may be imposed on Landlord by the terms of any encumbrance
or note secured by the Premises. Therefore, if any rent or
other sum due from Tenant is not received within ten (10) days
of the first of each month, Tenant shall pay to Landlord an
additional sum equal to 10% of such overdue payment. Landlord
and Tenant hereby agree that such late charge represents a fair
and reasonable estimate of the costs that Landlord will incur by
reason of any such late payment. Additionally, all such
delinquent rent or other sums, plus this late charge, shall bear
interest at the then maximum lawful rate permitted to be charged
by Landlord. Any payments of any kind returned for insufficient
funds will be subject to an additional charge of $25.00 for
years 1-5, $60 for years 6-10, and thereafter
(c) Cost of living Rent Adjustment. If Subparagraph 1 (1) 1 is
initialed, Annual Basic Rent, including all prior adjustments,
shall be increased (but never decreased) annually effective each
anniversary of the Commencement Date of this Lease or each
anniversary of the first day of the month immediately following
the month in which the Commencement Date occurs if the
Commencement Date occurs other than on the first day of the
month ("Adjustment Date"), in accordance with the percentage
increase, if any, in the Index described in Subparagraph l(l) 1
as published by the United States Department of Labor, Bureau of
Labor Statistics ( "Bureau"). The Index most recently published
prior to the Adjustment Date shall be compared with the Index
for the same month of the preceding year and the Annual Basic
Rent shall be increased in accordance with the percentage
increase, if any, between such Indices. Should the Bureau
discontinue the publication of the Index, or publish the same
less frequently, or alter the same in some other manner,
Landlord, in its discretion, shall adopt a substitute index or
procedure which reasonably reflects and monitors consumer
prices.
(d) Step Increase. If Subparagraph l(l) 2 is initialed, Annual
Basic Rent shall be increased periodically to the amounts and at
the times set forth in Subparagraph l(l) 2.
6. ADDITIONAL RENT.
In addition to Annual Basic Rent, Tenant shall pay to Landlord
additional rent in accordance with the terms of this Paragraph 6.
The purpose of this Paragraph 6 is to ensure that Tenant bears a
share of all Expenses related to the use, maintenance, management,
ownership, repair or replacement, and insurance of the Project which
are in excess of all such Expenses incurred during the Base Year.
Accordingly, during each year of the Lease Term, commencing 1997,
Tenant shall pay to Landlord on a monthly basis additional rent in
accordance with that portion of Tenant's share of Expenses related
to the Project which is in excess of Tenant's share of Expenses
related to the Project established for the Base Year shown in
Subparagraph 1(m) prorated on a monthly basis.
(a) Expenses Defined. The term "Expenses" shall mean all direct
costs and expenses of the ownership, operation, management,
maintenance, repair or replacement, and insurance of the
Project, as determined by standard accounting practices,
calculated assuming the Project is fully occupied, including,
without limitation, the following costs:
1. All supplies, materials, labor, equipment and, utilities
used in or related to the operation and maintenance of the
Project;
2. Except to the extent such costs are for the sole benefit of
another Tenant (i.e. Eviction, special services required by
another Tenant), all maintenance, management, janitorial,
legal, accounting, insurance and service agreement costs
related to the Project, including project management office
rental costs and a management administration fee in an
amount equal to ten percent (10%) of the Expenses;
3. All reasonable and necessary maintenance, replacement and
repair costs relating to the areas within or around the
Project including, without limitation, air conditioning
systems, sidewalks, landscaping, service areas, driveways,
parking areas (including resurfacing and restriping parking
areas), walkways, building exteriors (including painting),
signs and directories, repairing and replacing roof, walls,
etc. These costs may be included either based on actual
expenditures or the use of an accounting reserve based on
past cost experience for the Project or based on Landlord's
projected cost of replacement.
4. Amortization (along with reasonable financing charges) of
capital improvements made to the Project which may be
required by any government authority or which will improve
the operating efficiency of the Project or which are
required to keep the Project in good condition and repair
provided such costs shall be amortized on a straight line
basis together with interest on the unamortized balance of
such costs at the prime rate over a period equal to the
lesser of (i) the useful life of the capital improvements or
(ii) ten years. The annual amortized amount shall be
included in the Project operating expenses.
5. Real Property Taxes including all taxes, assessments
(general and special) and other impositions or charges which
may be taxed, charged, levied, assessed or imposed with
respect to any calendar year or part thereof included within
the term upon all or any portion of or in relation to the
Project or any portion thereof, any leasehold estate in the
Premises or measured by rent from the Premises, including
any increase caused by the transfer, sale or encumbrance of
the Project or any portion thereof. "Real Property Taxes"
shall also include any form of assessment, levy, penalty,
charge or tax (other than estate, inheritance, net income or
franchise taxes) imposed by any authority having a direct or
indirect power to tax or charge, including, without
limitation, any city, county, state, federal or any
improvement or other district, whether such tax is: (1)
determined by the area of the Project or the rent or other
sums payable under this Lease; (2) upon or with respect to
any legal or equitable interest of Landlord in the Project
or any part thereof; (3) upon this transaction or any
document to which Tenant is a party creating a transfer in
any interest in the Project; (4) in lieu of or as a direct
substitute in whole or in part of or in addition to any real
property taxes on the Project; (5) based on any parking
spaces or parking facilities provided in the Project; or (6)
in consideration for services, such as police protection,
fire protection, street, sidewalk and roadway maintenance,
refuse removal or other services that may be provided by any
governmental or quasi-governmental agency from time to time
which were formerly provided without charge or with less
charge to property owners or occupants.
(b) Annual Estimate of Expenses. At the commencement of each
calendar year, Landlord shall estimate Tenant's share of
Expenses for the coming year based on the Premises Percent of
the Project set forth in Subparagraph 1(h). Within ninety (90)
days following the expiration of the Base Year, Landlord shall
endeavor to provide tenant with a written statement setting
forth the actual Expenses for the Project for the Base Year and
Tenant's share thereof based on the Premises Percent of Project
set forth in Subparagraph 1(h).
(c) Monthly Payment of Expenses. If Tenant's portion of said
estimate of Expenses for the forthcoming calendar year is
greater than Tenant's portion of the Expenses established for
the Base Year shown in Subparagraph 1(m), Tenant shall pay to
Landlord, as additional rent, such estimated excess in monthly
installments of one-twelfth (1/12) of such total excess amount
beginning on January 1 of the forthcoming calendar year, and
one-twelfth (1/12) of such total excess amount on the first day
of each succeeding calendar month. As soon as practical
following each calendar year, Landlord shall prepare an
accounting of actual Expenses incurred during the prior calendar
year and such accounting shall reflect Tenant's share of
Expenses. If the additional rent paid by Tenant under this
Subparagraph 6 (c) during the preceding calendar year was less
than the actual amount of Tenant's share of Expenses, Landlord
shall so notify Tenant and Tenant shall pay such amount to
Landlord within 30 days of receipt of such notice. Such amount
shall be deemed to have accrued during the prior calendar year
and shall be due and payable from Tenant even though the Term of
this Lease has expired or this Lease has been terminated prior
to Tenant's receipt of this notice. Tenant shall have ninety
(90) days from receipt of such notice to contest the amount due;
failure to so notify Landlord shall represent final
determination of Tenant's share of Expenses. If Tenant's
payments were greater than the actual amount, then such
overpayment shall be credited by Landlord to all present rent
due under this Lease.
7 PREPAID RENT.
Upon execution of this Lease, Tenant shall pay to Landlord the
Prepaid Rent set forth in Subparagraph 1 (n), and if Tenant is not
in default of any provisions of this Lease, such Prepaid Rent shall
be applied toward the rent due for the last month of the Term.
Landlord's obligations with respect to the Prepaid Rent are those of
a debtor and not of a trustee, and Landlord can commingle the
Prepaid Rent. Landlord shall not be required to pay Tenant interest
on the Prepaid Rent. Landlord shall be entitled to immediately
endorse and cash Tenant's Prepaid Rent; however, such endorsement
and cashing shall not constitute Landlord's acceptance of this
Lease. In the event Landlord does not accept this lease, Landlord
shall return said Prepaid Rent. If Landlord sells the Premises and
deposits with the Purchaser the Prepaid Rent, Landlord shall be
discharged from any further liability with respect to the Prepaid
Rent.
8. SECURITY DEPOSIT
Upon execution of this Lease, Tenant shall deposit the Security
Deposit set forth in Subparagraph l(o) with Landlord, in part as
security for the performance by Tenant of the provisions of this
Lease and in part as a cleaning fee. If Tenant is in default,
regardless if such default is monetary or non-monetary, Landlord can
use the Security Deposit or any portion of it to cure the default or
to compensate Land lord for any damages sustained by Landlord
resulting from Tenant's default. Upon demand Tenant shall
immediately pay to Landlord a sum equal to the portion of the
Security Deposit expended or applied by Landlord to maintain the
Security Deposit initially deposited with Landlord. If Tenant is not
in default at the expiration or termination of this Lease, Landlord
shall return the entire Security Deposit to Tenant, except for 10%
of first month's rent or $125.00 whichever is greater, which
Landlord shall retain as a non-refundable cleaning fee. Landlord's
obligations with respect to the Security Deposit are those of a
debtor and not of a trustee, and Landlord can commingle the Security
Deposit with Landlord's general funds. Landlord shall not be
required to pay Tenant interest on the Security Deposit. Landlord
shall be entitled to immediately endorse and cash Tenant's Security
Deposit; however, such endorsement and cashing shall not constitute
Landlord's acceptance of this Lease. In the event Landlord does not
accept this Lease, Landlord shall return said Security Deposit. If
Landlord sells the Premises and deposits with the Purchaser the then
amount of the Security Deposit, Landlord shall be discharged from
any further liability with respect to the Security Deposit.
9. USE OF PREMISES AND PROJECT FACILITIES.
(a) Tenant's Use of the Premises. Tenant shall use the Premises for
the use or uses set forth in Subparagraph l(d) above, and
Paragraph 38 of the first Addendum and shall not use or permit
the Premises to be used for any other purpose without the prior
written consent of Landlord, which consent Landlord may not
unreasonably withhold. Except as agreed in Paragraph 42 of the
first Addendum, nothing contained herein shall be deemed to give
Tenant any exclusive right to such use in the Project.
Compliance. At Tenant's sole cost and expense, Tenant shall
procure, maintain and hold available for Landlord's inspection,
all governmental licenses and permits required for the proper
and lawful conduct of Tenant's business from the Premises.
Tenant shall maintain the Premises in compliance with all laws,
statutes, zoning restrictions, ordinances or governmental laws,
rules, regulations or requirements of any duly constituted
public authority having jurisdiction over the Premises now or
hereafter in force, the requirements of the Board of Fire
Underwriters or any other similar body now or hereafter
constituted, or of the Certificate of occupancy issued for the
Building. Tenant shall not use or occupy the Premises in
violation of any of the foregoing. Tenant shall, upon written
notice from Landlord, discontinue any use of the Premises which
is declared by any authority having jurisdiction over the
Premises, governmental or otherwise, to be a violation of law or
of said Certificate of Occupancy. Tenant shall comply with all
rules, orders, regulations and requirements of any insurance
authority having jurisdiction over the Project or any present or
future insurer relating to the Premises or the Project. Tenant
shall promptly, upon demand, reimburse Landlord for any
additional premium charged for any existing insurance policy or
endorsement required by reason of Tenant's failure to comply
with the provisions of this Paragraph 9. Tenant shall not do
or permit anything to be done in or about the premises which
will in any manner obstruct or interfere with the rights of
other tenants or occupants of the Project, or injure or annoy
them, or use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant
cause, maintain or permit any nuisance in, on or about the
Premises. Tenant shall comply with all restrictive covenants
and obligations created by private contracts which affect the
use and operation of the Premises, the Common Areas or the
Project including, without limitation, the Rules and Regulations
referred to in Paragraph 34 and attached hereto as Exhibit F.
Tenant shall not commit or suffer to be committed any waste in
or upon the Premises and shall keep the Premises in first class
repair and appearance. Further, Tenant's business machines and
mechanical equipment which cause vibration or noise that may be
transmitted to the Building structure or to any other space in
the Building shall be so installed, maintained and used by the
Tenant as to eliminate or minimize such vibration or noise.
Tenant shall be responsible for all structural engineering
required to determine structural load, as well as the expense
thereof.
(c) Hazardous Materials. Tenant shall not cause or permit any
Hazardous Materials to be brought upon, stored, used, generated,
released into the environment or disposed of it, on, under or
about the Premises, the Building, the Common Areas or any other
portion of the Project by Tenant, its agents, employees,
contractors or invitees, without the prior written consent of
Landlord, which consent Landlord may withhold at its sole and
absolute discretion. Landlord, in its sole and absolute
discretion, may consent to Tenant's generation, storage or use
of Hazardous Materials on or in the Premises provided Tenant
demonstrates to Landlord, in its sole and absolute judgment,
that such Hazardous Materials (in incidental quantities) are
necessary to or required as part of Tenant's business and will
be generated, used, kept, stored and/or disposed of in a manner
that complies with all laws regulating any such Hazardous
Materials and with good business practices, and provided that
Tenant first obtains the written consent of Landlord, and
provided further that Tenant indemnifies Landlord from any and
all liability with respect to such Hazardous Materials as more
particularly described below. Upon the expiration or sooner
termination of this Lease, Tenant covenants to remove from the
Premises, the Building and/or the Project, at its sole coast and
expense, any and all Hazardous Materials, including any
equipment or systems containing Hazardous Materials, which are
brought upon, stored, used, generated or released into the
environment by Tenant, its agents, employees, contractors or
invitees. To the fullest extent permitted by law, Tenant hereby
indemnifies Landlord and agrees to hold Landlord, the Premises,
the Building and the Project free and harmless from and against
any and all claims, judgments, damages, penalties, fines, costs,
liabilities and losses (including, without limitation,
diminution in the value of the Premises, the Building, the
Common Areas or any other portion of the Project, damages for
the loss or restriction of use of rentable or usable space or of
any amenity of the Premises, the Building, the Common Areas or
any other portion of the Project, and sums paid in settlement of
claims, attorneys' fees, consultant fees and expert fees) which
arise during or after the Lease Term directly or indirectly from
the presence of Hazardous Materials on, in or about the
Premises, the Building or any other portion of the Project,
which is caused or permitted by Tenant, its agents, employees,
contractors or invitees. This indemnification by Tenant of
Landlord includes, without limitation, any and all costs
incurred in connection with any investigation of site conditions
or any clean up, remedial, removal or restoration work required
by any federal, state or local governmental agency or political
subdivision because of the presence of such Hazardous Materials
in, on or about the Premises, the Building, the Common Areas or
the soil or ground water on or under the Project or any portion
thereof. Tenant shall promptly notify Landlord of any release of
Hazardous Materials in, on or about the Premises or any other
portion of the Project which Tenant becomes aware of during the
Term of this Lease, whether caused by Tenant or any other
persons or entities. As used in this Lease, the term "Hazardous
Materials" shall mean and include any hazardous or toxic
materials, substances or wastes including (A) those materials
identified in Sections 66680 through 66685 and Sections 66693
through 66740 of Title 22 of the California Administrative Code,
Division 4, Chapter 30 as amended from time to time, (B) those
materials defined in Section 2550 (j) of the California Health
and Safety Code, (C) any materials, substances or wastes which
are toxic, ignitable, corrosive or reactive and which are
regulated by any local governmental authority, any agency of the
State of California or any agency of the United States
Government, (D) asbestos, (E) petroleum and petroleum based
products, (F) urea formaldehyde foam insulation, (G)
polychlorinated biphenyls ("PCBs"), and (H) Freon and other
chlorofluorocarbons.
(d) Survival. The provisions of this Paragraph 9 shall survive
any termination of this Lease.
10. SURRENDER OF PREMISES; HOLDING OVER.
Upon expiration of the Term of this Lease, Tenant shall surrender to
Landlord the Premises and all Tenant Improvements and alterations in
good condition, except for ordinary wear and tear and alterations
Tenant has the right or is obligated to remove under the provisions
of Paragraph 16 herein. Tenant shall remove all personal property
installed by Tenant including, without limitation, decorative
improvements or fixtures and shall perform all restoration made
necessary by the removal of any alterations or Tenant's personal
property before the expiration of the Term. Landlord can elect to
retain or dispose of in any manner Tenant's personal property not
removed from the Premises by Tenant prior to the expiration of the
Term. Tenant waives all claims against Landlord for any damage to
Tenant resulting from Landlord's retention or disposition of
Tenant's personal property. Tenant shall be liable to Landlord for
Landlord's costs for storage, removal or disposal of Tenant's
personal property.
If Tenant, with Landlord's consent, remains in possession of the
Premises after expiration or termination of the Term, or after the
date in any notice given by Landlord to Tenant terminating this
Lease, such possession by Tenant shall be deemed to be a month-to-
month tenancy terminable on written 30-day notice at any time, by
either party. All provisions of this Lease, except those pertaining
to Term and rent, shall apply to the month-to-month tenancy. Tenant
shall pay monthly rent in an amount equal to 150% of Monthly Basic
Rent, subject to increases as provided in Subparagraph 5(c), if
applicable, for the last full calendar month during the regular Term
plus 100% of said last month's estimate of Tenant's share of
Expenses pursuant to Paragraph 6, subject to increase as provided
therein. If Tenant fails to surrender the Premises after
expiration or termination of the Term, Tenant shall indemnify,
defend and hold harmless from all loss or liability, including,
without limitation, any loss or liability resulting from any claim
against Landlord made by any succeeding Tenant founded on or
resulting from Tenant's failure to surrender and losses to Landlord
due to lost opportunities to lease any portion of the Premises to
succeeding tenants, together with, in each case, actual attorney's
fees and costs.
11. SIGNAGE.
Landlord shall designate the location at or adjacent to the Premises
and within the Building lobby, if any, for one or more Tenant
identification sign(s). Tenant shall install and maintain its
identification sign(s) in such designated locations in accordance
with this Paragraph 11. The size, design, color and other physical
aspects of permitted sign(s) shall be subject to: (i) Landlord's
written approval prior to installation, which approval shall not be
unreasonably withheld, (ii) any covenants, conditions or
restrictions encumbering the Premises, and (iii) any applicable
municipal or governmental permits and approvals. The cost of the
sign(s), including the installation, maintenance and removal thereof
shall be at Tenant's sole cost and expense. If Tenant fails to
install or maintain its sign(s), or if Tenant fails to remove same
upon termination of this Lease and repair any damage caused by such
removal including, without limitation, repainting the Building (if
required by Landlord, in Landlord's sole but reasonable judgement),
Landlord may do so at Tenant's expense. Tenant shall reimburse
Landlord for all costs incurred by Landlord to effect such
installation, maintenance or removal, which amount shall be deemed
additional rent, and shall include, without limitation, all sums
disbursed, incurred or deposited by Landlord including Landlord's
costs, expenses and actual attorney's fees with interest thereon at
the maximum interest rate permitted by law from the date of
Landlord's demand until payment. Any sign rights granted to Tenant
under this Lease are personal to Tenant and may not be assigned,
transferred or otherwise conveyed to any assignee or subtenant of
Tenant without Landlord's prior written consent, which consent
Landlord may withhold in its sole and absolute discretion. See
Paragraph 41 of the first Addendum.
12. PERSONAL PROPERTY TAXES.
Tenant shall pay before delinquency all taxes, assessments, license
fees and public charges levied, assessed or imposed upon its
business operations as well as upon all trade fixtures, leasehold
improvements, merchandise and other personal property in or about
the Premises.
13. PARKING.
(a) Unless Tenant is in default hereunder, Tenant shall be entitled
to the number and type of parking spaces indicated in Paragraph
40 of the first Addendum subject to a monthly parking fee for
such spaces with Landlord reserving the right to set and
increase monthly rates for such spaces from time to time during
the Term of this Lease. Tenant shall not use more parking
spaces then said number. If at any time during the Term hereof
Tenant does not choose to pay for the full number of parking
spaces, at Landlord's option, Tenant shall not thereafter have
the right to recommence the use of the spaces not paid for if
Landlord has made commitments for those spaces in the interim.
Such spaces shall be located in those portions of the Common
Areas designated by Landlord for parking. Landlord may assign
any unreserved and unassigned parking spaces and/or make all or
a portion of such spaces reserved, if it determines in its sole
discretion that it is necessary for orderly and efficient
parking. In the event Landlord has not assigned specific spaces
to Tenant, Tenant shall not use any spaces which have been so
specifically assigned by Landlord to other tenants or for such
other uses as visitor parking or which have been designated by
governmental entities with competent jurisdiction as being
restricted to certain uses. Parking within the Common Area
shall be limited to striped parking stalls, and no parking shall
be permitted in any driveways, accessways and/or in any area
which would prohibit or impede the free flow of traffic within
the Common Area.
(b) The use by Tenant, and its employees and invitees, of the
parking facilities of the Project shall be on the terms and
conditions set forth herein, as well as in Exhibit I attached
hereto and by this nondiscriminatory modifications thereof and
additions thereto from time to time put into effect by Landlord.
Landlord shall not be responsible to Tenant for the violation or
non-performance by any other tenant or occupant of the Project
of any of the established parking rules and procedures. Tenant
shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers,
customers or invitees to be loaded, unloaded or parked in areas
other than those designated by Landlord for such activities.
There shall be no overnight parking of any vehicles of any kind
within the Project. If Tenant permits or allows any of the
prohibited activities described herein or in Exhibit I, then
Landlord shall have the right, without notice, in addition to
other such rights and remedies that it may have, to remove or
tow away the vehicle involved and charge the cost to Tenant,
which cost shall be immediately payable upon demand by Landlord.
(c) Landlord reserves the right at any time to substitute for the
parking spaces allotted to Tenant pursuant to this Lease, if
any, an equivalent number of parking spaces in a parking
structure or subterranean parking facility or in a surface
parking area within a reasonable distance of the Premises.
14. UTILITIES.
Provided Tenant is not in default under this Lease, Landlord agrees
to furnish or cause to be furnished to the Premises the utilities
and services described in the Standards for Utilities and Services
attached hereto as Exhibit H and incorporated herein by this
reference, subject to the conditions and in accordance with the
standards set forth therein. Landlord's failure to furnish any of
such utilities and services when such failure is caused by (i)
accident, breakage or repairs; (ii) strikes, lockouts or other
labor disturbances or labor disputes of any such character; (iii)
governmental regulation, moratorium or other governmental action;
(iv) inability despite the exercise of reasonable diligence to
obtain electricity, water or fuel; or (v) any other cause beyond
Landlord's reasonable control, shall not result in any liability to
Landlord. In addition, Tenant shall not be entitled to any
abatement or reduction of rent, no eviction of Tenant shall result,
and Tenant shall not be relieved from the performance of any
covenant or agreement in this Lease because of any such failure. In
the event of any stoppage or interruption of services or utilities,
Landlord shall diligently attempt to resume such services or
utilities promptly. If Tenant requires or utilizes more water or
electrical power than is considered reasonable or normal by
Landlord, Landlord may, at its option, require Tenant to pay, as
additional rent, the cost, as fairly determined by Landlord,
incurred by such extraordinary usage. in addition, Landlord may
install separate meter(s) for the Premises, at Tenant's sole
expense, and Tenant thereafter shall pay all charges of the utility
providing services. See paragraph 49 of the first Addendum.
15. MAINTENANCE.
By entry hereunder, Tenant accepts the Premises as being in good and
sanitary order, condition and repair. Tenant shall, when and if
needed or whenever requested by Landlord to do so, at Tenant's sole
cost and expense, make all repairs to the interior of the Premises
including the ATM, drive thru, and the area of the building
immediately surrounding the ATM and drive-thru and every part
thereof, including all windows and doors, to keep, maintain and
preserve the Premises in first class condition and repair. Tenant
shall, upon the expiration or sooner termination of the Term hereof,
surrender the Premises to Landlord in the same condition as when
received, ordinary wear and tear excepted. Landlord shall have no
obligation to alter, remodel, improve, repair, decorate or paint the
Premises or any part thereof and the parties hereto affirm that
Landlord has made no representations to Tenant respecting the
condition of the Premises or the Building except as specifically
herein set forth.
Anything contained in this Paragraph 15 to the contrary
notwithstanding, Landlord shall repair and maintain the structural
portions of the Building, including the basic plumbing, heating,
ventilating, air conditioning and electrical systems installed or
furnished by Landlord; provided, however, the cost of all such
maintenance shall be considered "Expenses" for the purposes of
Subparagraph 6(a), unless such maintenance and repairs are caused in
whole or in part by the act, neglect, fault of or omission of any
duty by Tenant, its agents, servants, employees or invitees in which
case Tenant shall pay to Landlord, as additional rent, the
reasonable cost of such maintenance and repairs. Landlord shall not
be liable for any failure to make any such repairs or any
maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or maintenance
is given to Landlord by Tenant. Except as provided in Paragraph 19
hereof there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's
business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or
in or to fixtures, appurtenances and equipment therein. Tenant
waives the right to make repairs at Landlord's expense under
Sections 1941 and 1942 of the California Civil Code or any similar
law, statute or ordinance now or hereafter in effect.
16. ALTERATIONS.
Tenant shall not make any alterations to the Premises, or to the
Project, including any changes to the existing landscaping, without
Landlord's prior written consent. If Landlord gives its consent to
such alterations, Landlord may post notices in accordance with the
laws of the state in which the Premises are located. Any
alterations made shall remain on and be surrendered with the
Premises upon expiration of the Term, except that Landlord may,
within 30 days before or 30 days after expiration of the Term, elect
to require Tenant to remove any alterations which Tenant may have
made to the Premises. If Landlord so elects, Tenant shall, at its
own cost, restore the Premises to the condition designated by
Landlord at its election, before the last day of the Term or within
30 days after notice of its election is given, whichever is later.
Should Landlord consent in writing to Tenant's alteration of the
Premises, Tenant shall contract with a contractor approved by
Landlord for the construction of such alterations, shall secure all
appropriate governmental approvals and permits, and shall complete
such alterations with due diligence in compliance with plans and
specifications approved by Landlord, and in compliance with all
applicable laws, statutes and regulations including ADA and Title
24. All such construction shall be performed in a manner which will
not interfere with the quiet enjoyment of other tenants of the
Project. Tenant shall pay all costs for such construction and shall
keep the Premises and the Project free and clear of all mechanics'
liens which may result from construction by Tenant.
17. RELEASE AND INDEMNITY.
Except to the extent such claim for damages or liability is caused
by the gross negligence of the Landlord or its agents or employees,
as material consideration to Landlord, Tenant agrees that Landlord
and its agents and employees shall not be liable to Tenant, its
agents, employees, invitees, licensees and other persons claiming
under Tenant for: (i) any damage to any property entrusted to
employees of the Project, (ii) loss or damage to any property by
theft or otherwise, (iii) consequential damages arising out of any
loss of the use of the Premises or any equipment or facilities
therein; or (iv) any injury or damage to person or property
resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the
Project or from pipes, appliances or plumbing work therein or from
the roof, street, sub-surface or from any other place or resulting
from dampness or any other cause whatsoever. Landlord or its agents
shall not be liable for interference with light or other incorporeal
hereditaments, nor shall Landlord be liable for any latent defects
in the Premises or the Project. Tenant shall give prompt notice to
Landlord in case of fire or accidents in the Premises or in the
Project, and of defects therein or in the fixtures or equipment
located therein.
Except to the extent such claim for damage or liability is caused by
the gross negligence of Landlord or its agents or employees, to the
fullest extent permitted by law, Tenant agrees to indemnify, defend
(with counsel satisfactory to Landlord) and hold harmless Landlord,
its agents, successors in interest with respect to the Building and
their directors, officers, partners, employees, shareholders, agents
and representatives and the directors, officers, partners,
employees, shareholders, agents and representatives of the partners
of Landlord from (i) all claims, actions, liabilities, and
proceedings arising from Tenant's use of the Premises or the conduct
of its business or from any activity, work or thing done, permitted
or suffered by Tenant, its agents, contractors, employees or
invitees, in or about the Premises, the Building, or the Project and
any breach or default in the performance of any obligation to be
performed by Tenant under the terms of this Lease, or arising from
any act, neglect, fault or omission of Tenant, or of its agents,
contractors, employees or invitees, and (ii) any and all costs,
attorneys' fees, expenses and liabilities incurred with respect to
any such claims, actions, liabilities, or proceedings, and in the
event any actions or proceedings shall be brought against Landlord
by reason of any such claims, Tenant, upon notice from Landlord,
shall defend the same at Tenant's expense by counsel approved in
writing by Landlord. Tenant hereby assumes all risk of damage to
property or injury to person in, upon or about the Premises from any
cause whatsoever except that which is caused by the failure of
Landlord to observe any of the terms and conditions of this Lease.
Where such failure has persisted for an unreasonable period of time
after Landlord receives written notice of such, and Tenant hereby
waives all its claims in respect thereof against Landlord. As used
herein, the term "liabilities" shall include all suits, actions,
claims and demands and all expenses (including attorneys' fees and
costs of defense) incurred in or about any such liability and any
action or proceeding brought thereon. If any claim shall be made or
any action or proceeding brought against Landlord on the basis of
any liability described in this Paragraph, Tenant shall, upon notice
from Landlord defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord. It is understood that payment
shall not be a condition precedent to recovery upon the foregoing
indemnity.
18. INSURANCE.
Tenant, at its cost, shall pay for and keep in full force and
effect:
(a) COMPREHENSIVE GENERAL LIABILITY OR COMMERCIAL GENERAL LIABILITY
insurance with respect to the Premises and the operations on or
on behalf of Tenant, in, on or about the Premises, including,
but not limited to, personal injury, product liability (if
applicable), blanket contractual, owner's protective, broad form
property damage liability, liquor liability (if applicable) and
owned and non-owned automobile liability in an amount not less
than $1,000,000 per occurrence. The insurance policy or
policies shall contain the following provisions (1) severability
of interest, (2) cross liability, (3) an endorsement naming
Landlord, Landlord's Mortgagees and any other parties in
interest designated by Landlord as additional insureds, (4) an
endorsement stating "such insurance as is afforded by this
policy for the benefit of the Landlord and any other additional
insured shall be primary as respects any liability or claims
arising out of the occupancy of the Premises by the Tenant, or
Tenant's operations and any insurance carried by Landlord, or
any other additional insured shall be non-contributory," (5)
with respect to improvements or alterations permitted under this
Lease, contingent liability and builder's risk insurance, (6) an
endorsement allocating to the Premises the full amount of
liability limits required by this Lease, and (7) coverage must
be on an "occurrence basis", "Claims-Made" forms are not
acceptable.
(b) WORKERS COMPENSATION COVERAGE as required by law, together with
Employers Liability coverage with a limit of not less than
$1,000,000.
(c) TENANT'S PROPERTY INSURANCE: Tenant shall at all times during
the Term hereof and at its cost and expense, maintain in effect
policies of insurance covering (1) all Tenant Improvements on
the Premises installed by Tenant, (2) all personal property of
Tenant located in or at the Premises including, but not limited
to, fixtures, furnishing, equipment and furniture, in an amount
not less than their full replacement value, and (3) loss of
income or business interruption insurance. These policies shall
provide protection against any peril included within the
classification "All Risk" including, but not limited to,
insurance against sprinkler leakage, vandalism and malicious
mischief. The proceeds of such insurance shall be used to
repair or replace the tenant improvements and personal property
so insured. Tenant shall, at its cost, maintain rental
abatement insurance assuring that the rental payable hereunder
will be paid to Landlord for a period of not less than twelve
(12) months if rent is to abate under any provision of this
Lease or applicable law. Such coverage shall include a sixty-day
extended period of indemnity endorsement.
All policies of insurance required hereunder shall include a clause
or endorsement denying the insurer of any rights of subrogation
against the other party to the extent rights have been waived by the
insured before the occurrence of injury or loss, if same are
obtainable without unreasonable cost. Landlord and Tenant each
hereby waive any rights of recovery against the other for injury or
loss to such waiving party or to its property or the property of
others under its control, arising from any cause insured against
under any policy of insurance required to be carried by such waiving
party under this Lease. The foregoing waiver shall be effective
whether or not the waiving party shall actually obtain and maintain
the insurance which such waiving party is obligated to obtain and
maintain under this Lease.
All insurance required to be provided by Tenant under this Lease:
(a) shall be issued by insurance companies authorized to do business
in the state in which the Premises are located and holding a General
Policyholders rating of "A" and a Financial Rating of "X" or better,
as set forth in the most recent edition of Best's Insurance Reports;
(b) shall contain an endorsement requiring at least 30 days prior
written notice to Landlord and Landlord's lender, before
cancellation or change in coverage, scope or amount of any policy.
Tenant shall deliver a certificate or copy of such policy together
with evidence of payment of all current premiums to Landlord within
30 days of execution of this Lease and within fifteen (15) days of
expiration of each policy. Tenant's failure to provide evidence of
such coverage to Landlord may, in Landlord's sole discretion,
constitute a default under this Lease.
Landlord shall insure the Building (excluding all property which
tenants of the Building are obligated to insure) against damage with
"All Risk" insurance and public liability insurance, all in such
amounts and with such deductibles as Landlord considers appropriate.
The cost of any insurance required to be maintained by Landlord
hereunder shall be included as part of "Expenses" under Subparagraph
6(a). Notwithstanding any contribution by Tenant to the cost of
insurance premiums as provided herein, Tenant acknowledges that it
has no right to receive any proceeds from any insurance policies
carried by Landlord.
19. DESTRUCTION.
If during the Term of this Lease, any portion of the Premises,
access to the Premises or any part of the Building which is
essential to the use of the Premises is damaged or destroyed and
such damage or destruction can, in Landlord's reasonable estimation,
be repaired within 180 days following such damage or destruction,
this Lease shall remain in full force and effect and Landlord shall
promptly commence to repair and restore the damage or destruction to
substantially the same condition as existed prior to such damage and
shall complete such repair and restoration with due diligence in
compliance with all then existing laws. If (1) such damage or
destruction cannot, in Landlord's reasonable estimation, be repaired
within 180 days following such damage or destruction; or (2) more
than forty percent (40%) of the Building is damaged or destroyed
(regardless of its impact on the Premises); or (3) any mortgagee of
the Building will not allow the application of insurance proceeds
for repair and restoration; or (4) the damage or destruction is not
covered in full by Landlord's insurance required by Paragraph 18, or
(5) the damage or destruction occurs within the last twelve (12)
months of the Term of this Lease or any extension hereof, then
Landlord may, in its sole discretion, terminate this Lease by
delivery of notice to Tenant within 30 days of the date Landlord
learns of the damage.
In the event of repair, reconstruction and restoration by Landlord
as herein provided, the rent payable under this Lease shall be
abated proportionately with the degree to which Tenant's use of the
Premises is impaired during the period of such repair,
reconstruction or restoration; provided that there shall be no
abatement of rent if such damage is the result of Tenant's
negligence or intentional wrongdoing. Tenant shall not be entitled
to any compensation or damages for loss in the use of the whole or
any part of the Premises, damage to Tenant's Personal Property
and/or any inconvenience or annoyance occasioned by such damage,
repair, reconstruction or restoration.
If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall be obligated to make repair or restoration
only to those portions of the Building and the Premises which were
originally provided at Landlord's expense, and the repair and
restoration of items not provided at Landlord's expense shall be the
obligation of the Tenant. Tenant agrees to coordinate the
restoration and repair of those items it is required to restore or
repair with Landlord's repair and restoration work in coordination
with a work schedule prepared by Landlord, or Landlord's contractor.
Further, Tenant's work shall be performed in accordance with the
terms, standards and conditions contained in Paragraph 16 above.
The provisions of California Civil Code Section 1932, Subsection 2,
and Section 1933, Subsection 4, and any other similarly enacted
statute or court decision relating to the abatement or termination
of a lease upon destruction of the leased premises, are hereby
waived by Tenant; and the provisions of this Paragraph 19 shall
govern in case of such destruction.
20. CONDEMNATION.
(a) Definitions. The following definitions shall apply: (1)
"Condemnation" means (a) the exercise of any governmental power
of eminent domain, whether by legal proceedings or otherwise by
condemnor and (b) the voluntary sale or transfer by Landlord to
any condemnor either under threat of condemnation or while legal
proceedings for condemnation are proceeding; (2) "Date of
Taking" means the date the condemnor has the right to possession
of the property being condemned; (3) "Award" means all
compensation, sums or anything of value awarded, paid or
received on a total or partial condemnation; and (4) "Condemnor"
means any public or quasi-public authority, or private
corporation or individual, having a power of condemnation.
(b) Obligations to be Governed by Lease. If during the Term of this
Lease there is any taking of all or any part of the Premises or
the Project, the rights and obligations of the parties shall be
determined pursuant to this Lease.
(c) Total or Partial Taking. If the Premises are totally taken by
condemnation, this Lease shall terminate on the date of taking.
If any portion of the Premises is taken by condemnation, this
Lease shall remain in effect, except that Tenant can elect to
terminate this Lease if the remaining portion of the Premises is
rendered unsuitable for Tenant's continued use of the Premises.
If Tenant elects to terminate this Lease, Tenant must exercise
its right to terminate by giving notice to Landlord within 30
days after the nature and extent of the taking have been finally
determined. If Tenant elects to terminate this Lease, Tenant
shall also notify Landlord of the date of termination, which
date shall not be earlier than 30 days nor later than 90 days
after Tenant has notified Landlord of its election to terminate;
except that this Lease shall terminate on the date of taking if
the date of taking falls on a date before the date of
termination as designated by Tenant. If any portion of the
Premises is taken by condemnation and this Lease remains in full
force and effect, on the date of taking the rent shall be
reduced by an amount in the same ratio as the total number of
rentable square feet in the portion of the Premises taken bears
to the total number of rentable square feet in the Premises
immediately before the date of taking. In the case where a
portion of the Premises is taken and the Lease remains in full
force and effect, Landlord shall, at its own cost and expense,
make all alterations or repairs to the Premises so as to make
the portion of the Premises not taken a complete architectural
unit. Such work shall not, however, exceed the scope of work
done by Landlord in originally constructing the Premises. If
any portion of the Building other than the Premises is taken and
in Landlord's reasonable opinion the Building should be restored
in a manner that materially alters the Premises, or if severance
damages from the condemning authority are not available to
Landlord in sufficient amounts to permit such restoration,
Landlord may terminate this Lease upon written notice to Tenant.
Monthly Basic Rent due and payable hereunder shall be
temporarily abated during such restoration period in proportion
to the degree to which there is substantial interference with
Tenant's use of Premises, as reasonably determined by Landlord
and Landlord's architect. Each party hereby waives the
provisions of Section 1265.130 of the California Code of Civil
Procedure and any present or future law allowing either party to
petition the Superior Court to terminate this Lease in the event
of a partial taking of the Building or Premises.
If the Premises are totally or partially taken by condemnation,
Tenant shall not assert any claim against Landlord or the taking
authority for any compensation because of such taking, and
Landlord shall be entitled to receive the entire amount of the
award without any deduction for any estate or interest of
Tenant.
21. ASSIGNMENT OR SUBLEASE.
Tenant shall not assign or encumber its interest in this Lease or
the Premises or sublease all or any part of the Premises or allow
any other person or entity (except Tenant's authorized
representatives, employees, invitees or guests) to occupy or use all
or any part of the Premises without first obtaining Landlord's
written consent which Landlord shall not unreasonably withhold.
Landlord shall be deemed reasonable in withholding its consent if it
determines in its sole discretion that: (i) the financial net worth
of the proposed assignee or sublessee is not equal to or greater
than Tenant's financial net worth as of the date of this Lease as
increased by the increase in the Consumer Price Index, if any,
between the date of this Lease and the date of the assignment or
sublease; (ii) the intended use of the Premises by the proposed
assignee or sublessee is inconsistent, incompatible or competes with
other uses in the Project; @iii) the intended use of the Premises by
the proposed assignee or sublessee will require more than
insignificant alteration of the Premises; (iv) the intended use of
the Premises by the proposed assignee or sublessee will constitute
a violation of this Lease or any governmental law, rule, ordinance
or regulation governing the Premises or would involve the storage,
use or keeping of Hazardous Materials in, on or about the Premises,
the Common Areas or any other portion of the Project; or if (v) the
proposed rent for the proposed assignee or sublessee is less than
the Rent than in effect under the Lease; or (vi) the proposed
assignee or sublessee is a tenant in the Project or has negotiated
to be a tenant in the Project any time in the three (3) month just
preceding Tenant's request for Landlord's consent. Any assignment,
encumbrance or sublease without Landlord's written consent shall be
voidable and at Landlord's election, shall constitute a default.
Landlord's waiver or consent to any assignment or subletting shall
not relieve Tenant or any assignee or sublessee from any obligation
under this Lease whether or not accrued.
If Tenant is a partnership, a withdrawal or change, voluntary,
involuntary or by operation of law of any partner, or the
dissolution of the partnership, shall be deemed a voluntary
assignment. If Tenant is a corporation, any dissolution, merger,
consolidation or other reorganization of Tenant, or sale or other
transfer of a controlling percentage of the capital stock of Tenant,
or the sale of at lease 25% of the value of the assets of Tenant
shall be deemed a voluntary assignment. The phrase "controlling
percentage" means ownership of and right to vote stock possessing at
least 25% of the total combined voting power of all classes of
Tenant's capital stock issued, outstanding and entitled to vote for
election of directors. The preceding two sentences of this
paragraph shall not apply to corporations the stock of which is
traded through a public exchange. If Landlord shall consent to any
assignment or sublease of this Lease, three-quarters (3/4) of all
sums and other consideration payable to or for the benefit of the
Tenant from its assignees or subtenants in excess of the rent
payable by Tenant to Landlord under this Lease shall be paid to
Landlord, as and when such sums are due and payable. if Tenant
requests Landlord to consent to a proposed assignment or subletting
Tenant shall pay to Landlord, whether or not consent is ultimately
given, $100 or Landlord's reasonable attorneys' fees incurred in
connection with such request, whichever is greater.
No interest of Tenant in this Lease shall be assignable by
involuntary assignment through operation of law (including, without
limitation, the transfer of this Lease by testacy or intestacy).
Each of the following acts shall be considered an involuntary
assignment: (a) If Tenant is or becomes bankrupt or insolvent, makes
an assignment for the benefit of creditors, or institutes
proceedings under the Bankruptcy Act in which Tenant is the
bankrupt; or if Tenant is a partnership or consists of more than one
person or entity, if any partner of the partnership or other person
or entity is or becomes bankrupt or insolvent, or makes an
assignment for the benefit of creditors; or (b) if a writ of
attachment or execution is levied on this Lease; or (c) if any
proceeding or action to which the Tenant is a party, a receiver is
appointed with authority to take possession of the Premises. An
involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to elect to terminate this Lease, in
which case this Lease shall not be treated as an asset of Tenant.
22. DEFAULT.
The occurrence of any of the following shall constitute a default by
Tenant: (a) A failure to pay rent or any other charge when due; (b)
Abandonment of the Premises (failure to occupy and operate the
Premises for ten consecutive days shall be deemed an abandonment);
(c) The making by Tenant or any guarantor of this Lease
("Guarantor") of any general assignment for the benefit of
creditors; the filing by or against Tenant or any Guarantor of a
petition to have Tenant or such Guarantor adjudged a bankrupt or
petition for reorganization or arrangement under any law relating to
bankruptcy (unless, in the case of a petition filed against Tenant
or a Guarantor, the same is dismissed within thirty (30) days); the
appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, or of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this
Lease, or of substantially all of Guarantor's assets, where
possession is not restored to Tenant or such Guarantor, as the case
may be, within thirty (30) days; the attachment, execution or other
judicial seizure of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease where such
seizure is not discharged within (30) days; or if this Lease shall,
by operation of law or otherwise, pass to any person or persons
other than Tenant except as provided in Paragraph 21 herein; (d) The
failure of Tenant to timely comply with the provisions of Paragraph
26 or Paragraph 33 of this Lease regarding, respectively,
Subordination and Estoppel Certificates; or (e) The failure of
Tenant to perform any other provision of this Lease.
23. LANDLORD'S REMEDIES.
Landlord shall have the remedies described in this Paragraph 23 if
Tenant is in default. These remedies are not exclusive; they are
cumulative and in addition to any remedies now or later allowed by
law. The remedies available to Landlord in the event Tenant is in
default are: Landlord may terminate Tenant's right to possession of
the Premises at any time. No act by Landlord other than giving
notice to Tenant shall terminate this Lease. Acts of maintenance,
efforts to relet the Premises, or the appointment of a receiver on
Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to
possession. Upon termination of Tenant's right to possession,
Landlord has the right to recover from Tenant: (1) The worth at the
time of award of any unpaid rent which had been earned at the time
of termination of Tenant's right to possession; (2) The worth at the
time of award of the amount by which the unpaid rent which would
have been earned after the date of termination of Tenant's right of
possession until the time of award exceeds the amount of such rental
loss that Tenant proves could have reasonably been avoided; (3) The
worth at the time of award of the amount by which the unpaid rent
for the balance of the Term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably
avoided; (4) Any other amount, including court, attorney and
collection costs, necessary to compensate Landlord for all detriment
proximately caused by Tenant's default. "The worth", as used for
items (1) and (2) in this Paragraph 23 is to be computed by allowing
interest at the lesser of 12% or the maximum rate an individual is
permitted to charge by law. "The worth" as used for item (3) in
this Paragraph 23 is to be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the
time of termination plus one percent (1%).
In the event of any default by Tenant, Landlord shall also have the
right, with or without terminating this Lease, to re-enter the
Premises and remove all persons and property from the Premises; such
property may be removed and stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant or disposed
of in a reasonable manner by Landlord. No re-entry or taking
possession of the Premises by Landlord pursuant to this Paragraph 23
shall be construed as an election to terminate this Lease unless a
written notice of such intention is given to Tenant or unless the
termination thereof is decreed by a court of competent jurisdiction.
24. DEFAULT BY LANDLORD.
Landlord shall not be in default hereunder unless Landlord fails to
perform the obligations required of Landlord within a reasonable
time, but in no event later than forty-five (45) days after written
notice by Tenant to Landlord and to the holder of any first mortgage
or deed of trust covering the Premises, in writing specifying
wherein Landlord has failed o perform such obligation; provided,
however, that if the nature of Landlord's obligation is such that
more than forty-five (45) days is required for performance, then
Landlord shall not be in default if Landlord commences performance
within such forty-five (45) day period and thereafter diligently
prosecutes the same to completion. In no event shall Tenant have
the right to terminate this Lease as a result of Landlord's default;
Tenant's remedies shall be limited to any other remedy available at
law or in equity. Nothing herein contained shall be interpreted to
mean that Tenant is excused from paying rent due hereunder as a
result of any default by Landlord during the above notice period.
25. ENTRY OF PREMISES AND PERFORMANCE BY TENANT.
Landlord and its authorized representatives shall have the right to
enter the Premises only during regular business hours for any of the
following purposes: (a) To determine whether the Premises are in
good condition and whether Tenant is complying with its obligations
under this Lease; (b) To do any necessary maintenance and to make
any restoration to the Premises or the Project that Landlord has the
right or obligation to perform; (c) To show the Premises to
prospective brokers, agents, buyers, tenants or persons interested
in an exchange, at any time during the Term; (d) To repair, maintain
or improve the Project and to erect scaffolding and protective
barricades around and about the Premises but not so as to prevent
entry to the Premises and to do any other act or thing necessary for
the safety or preservation of the Premises or the Project; or (e) To
discharge Tenant's obligations hereunder when Tenant has failed to
do so in accordance with the terms of this Lease. Landlord shall
not be liable in any manner for any inconvenience, disturbance, loss
of business, nuisance or other damage arising out of Landlord's
entry onto the Premises as provided in this Paragraph 25. Tenant
shall not be entitled to an abatement or reduction of rent if
Landlord exercises any rights reserved in this Paragraph 25.
Landlord shall reasonably attempt to conduct his activities on the
Premises as provided herein in a manner that will cause the least
inconvenience, annoyance or disturbance to Tenant. Tenant shall not
alter any lock or install a new or additional lock or bolt any door
of the Premises without the prior consent of Landlord. Landlord
shall not retain a key to the premises and shall obtain Tenant's
prior consent for entry other than regular business hours except
emergencies requiring access by Landlord or emergency personnel.
All covenants and agreements to be performed by Tenant under any of
the terms of this Lease shall be performed by Tenant at Tenant's
sole cost and expense without any abatement of rent. if Tenant shall
fail to pay any sum of money, other than Monthly Basic Rent,
required to be paid by it hereunder or shall fail to perform any
other act on its part to be performed hereunder, and such failure
shall continue for ten (10) days after notice thereof by Landlord
(or such other period as specifically provided herein), Landlord
may, without waiving or releasing Tenant from any obligations of
Tenant, but shall not be obligated to, make any such payment or
perform any such other act on Tenant's part to be made or performed
in this Lease; provided, however, all sums so paid by Landlord and
all necessary incidental costs together with interest thereon at the
lesser of 12% or the maximum rate an individual is permitted to
charge by law, from the date of such payment by Landlord, shall be
payable to Landlord on demand. Tenant covenants to pay any such
sums, and Landlord shall have (in addition to all other rights or
remedies of Landlord) the same rights and remedies in the event of
the nonpayment thereof by Tenant as in the case of default by Tenant
in the payment of rent.
26. SUBORDINATION.
Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, and unless
otherwise elected by Landlord or any mortgagee or any beneficiary of
a Deed of Trust with a lien on the Project this Lease shall be
subject and subordinate at all times to (a) all ground leases or
underlying leases which may now exist or hereafter be executed
affecting the Project, or the land upon which the Project is
situated, or both, and (b) the lien of any mortgage or deed of trust
which may now exist or hereafter be executed in any amount for which
the Project, ground leases or underlying leases, or Landlord's
interest or estate in any of said items is specified as security.
Notwithstanding the foregoing, Tenant acknowledges that Landlord
shall have the right to subordinate or cause to be subordinated this
Lease to any such ground leases or underlying leases or any such
liens to this Lease. In the event that any ground lease or
underlying lease terminates for any reason or any mortgage or Deed
of Trust is foreclosed or a conveyance in lieu of foreclosure is
made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the tenant of the successor in
interest to Landlord, at the option of such successor in interest.
Tenant covenants and agrees to execute and deliver, upon demand by
Landlord and in the form requested by Landlord any additional
documents evidencing the priority or subordination of this Lease
with respect to any such ground lease or underlying leases or the
lien of any such mortgage or Deed of Trust.
27. NOTICE.
Any notice, demand, request, consent, approval or communication
desired by either party or required to be given, shall be in writing
and served either personally or sent by prepaid certificate first
class mail, return receipt requested, addressed as set forth in
Subparagraph l(b) and l(c). Either party may change its address by
notification of the other party. Notice shall be deemed to be
communicated 48 hours from the time of mailing, or at the time of
service as provided in this Paragraph 27.
28. WAIVER.
No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a
waiver. No act or conduct of Landlord, including, without
limitation, acceptance of the keys to the Premises, shall constitute
acceptance of the surrender of the Premises by Tenant before the
expiration of the Term. Only written notice from Landlord to Tenant
shall constitute acceptance of the surrender of the Premises and
accomplish termination of this Lease. Landlord's consent to or
approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord of any default must be in writing and shall
not be a waiver of any other default concerning the same or any
other provision of this Lease.
29. LIMITATION OF LIABILITY.
In consideration of the benefits accruing hereunder, Tenant and all
successors and assigns of Tenant covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder
by Landlord: (as may be applicable)
(a) The sole and exclusive remedy against Landlord shall be against
Landlord's interest in the Building;
(b) No partner of Landlord shall be sued or named as a party in any
suit or action (except as may be necessary to secure
jurisdiction of the partnership);
(c) No service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of
the partnership);
(d) No partner of Landlord shall be required to answer or otherwise
plead to any service of process;
(e) No judgment shall be taken against any partner of Landlord;
(f) Any judgment taken against any partner of Landlord may be
vacated and set aside at any time after the fact;
(g) No writ of execution will ever be levied against the assets of
any partner of Landlord;
(h) The obligations under this Lease do not constitute personal
obligations of the individual partners, directors, officers or
shareholders of Landlord, or the partners, directors, officers
or shareholders of the partners of Landlord, and Tenant shall
not seek recourse against any such partners or entities of
Landlord or any of their personal assets for satisfaction of
any liability in respect to this Lease; and
(i) These covenants and agreements are enforceable both by Landlord
and also by any partner of Landlord.
Tenant agrees that each of the foregoing provisions shall be
applicable to any covenant or agreement either expressly contained
in this Lease or imposed by statue or at common law.
30. FORCE MAJEURE.
Landlord shall have no liability whatsoever to Tenant on account of
(a) the inability or delay of Landlord in fulfilling any of
Landlord's obligations under this Lease by reason of strike, other
labor trouble, governmental controls in connection with a national
or other public emergency, or shortages of fuel, supplies or labor
resulting therefrom or from any other cause, whether similar or
dissimilar to the above, beyond Landlord's reasonable control; or
(b) any failure or defect in the supply, quantity or character of
electricity or water furnished to the Premises, by reason of any
requirement, act or omission of the public utility or others
furnishing the Project with electricity or water, or for any reason,
whether similar or dissimilar to the above, beyond Landlord's
reasonable control. If this Lease specifies a time period for the
performance of an obligation of Landlord, that time period shall be
extended by the period of any delay in Landlord's performance caused
by any of the events of force majeure described above.
31. PROFESSIONAL FEES.
(a) If Landlord should engage any professional including, without
limitation, attorneys, appraisers, accountants or environmental
or other consultants for the purpose of bringing suit for
possession of the Premises, for the recovery of any sum due
under this Lease, or because of the breach of any provisions of
this Lease, or for any other relief against Tenant hereunder,
or in the event of any other litigation between the parties
with respect to this Lease, then all costs and expenses
including, without limitation, actual professional fees such as
appraisers, accountants', attorneys and other consultants'
fees, incurred by the prevailing party therein shall be paid by
the other party, which obligation on the part of the other
party shall be deemed to have accrued on the date of the
commencement of such action and shall be enforceable whether or
not the action is prosecuted to judgement. If Landlord employs
a collection agency to recover delinquent charges, Tenant
agrees to pay all collection agency fees charged to Landlord in
addition to rent, late charges, interest and other sums payable
under this Lease.
(b) Except as set forth in Paragraph 17, if Landlord is named as a
defendant in any suit brought against Tenant in connection with
or arising out of Tenant's occupancy hereunder, Tenant shall
pay to Landlord its costs and expenses incurred in such suit
including, without limitation, its actual professional fees
such as appraisers, accountants' and attorneys' fees.
32. EXAMINATION OF LEASE.
Submission of this instrument for examination or signature by Tenant
shall not create a binding agreement between Landlord and Tenant nor
shall it constitute a reservation or option to lease on the part of
Tenant and this instrument shall not be effective as a lease and
shall not create any obligations on the part of Landlord or Tenant
until this Lease has been validly executed by, and delivered to,
both Landlord and Tenant.
33. ESTOPPEL CERTIFICATE.
(a) Within ten (10) days following any written request which
Landlord may make from time to time, Tenant shall execute and
deliver to Landlord a statement ("Estoppel Certificate"), in a
form substantially similar to the form of Exhibit E attached
hereto or in such other form as Landlord's lender or purchaser
may require, certifying: (i) the date of commencement of this
Lease; (ii) the fact that this Lease is unmodified and in full
force and effect (or, if there have been modifications, stating
the nature and date of such modifications), (iii) the date to
which the rent and other sums payable under this Lease have
been paid; (iv) that there are no current defaults under this
Lease by either Landlord or Tenant except as specified in
Tenant's statement; and (v) such other matters requested by
Landlord. Landlord and Tenant intend that any statement
delivered pursuant to this Paragraph 33 may be relied upon by
any mortgagee, beneficiary, purchaser or prospective purchaser
of the Project or any interest therein.
(b) Tenant's failure to deliver such statement within such time
shall be conclusive upon Tenant (i) that this Lease is in full
force and effect, without modification except as may be
represented by Landlord, (ii) that there are no uncured
defaults on Landlord's performance, and (iii) that not more
than one (1) month's rent has been paid in advance. Tenant's
failure to deliver said statement to Landlord within ten (10)
days of receipt shall constitute a default under this Lease and
Landlord may, at Landlord's option, terminate this lease.
34. RULES AND REGULATIONS.
Tenant shall faithfully observe and comply with the "Rules and
Regulations", a copy of which is attached hereto and marked Exhibit
F, and all reasonable and nondiscriminatory modifications thereof
and additions thereto from time to time put into effect by Landlord.
Landlord shall not be responsible to Tenant for the violation or
non-performance by any other tenant or occupant of the Project of
any of said Rules and Regulations.
35. PROJECT PLANNING.
In the event Landlord requires the Premises for use in conjunction
with another suite or for other reasons connected with Project
planning, upon notifying Tenant in writing, Landlord shall have the
right to move Tenant to another space in the Project of which the
Premises forms a part, at Landlord's sole cost and expense, and the
terms of the original Lease shall remain in full force and effect,
save and excepting that a revised Exhibit A shall become part of
this Lease and shall reflect the location of the new space and
Paragraph 1 of this Lease shall be amended to include and state all
correct data as to the new space. However, if the new space does
not meet with Tenant's approval, Tenant shall have the right to
cancel this lease upon giving Landlord thirty (30) days' prior
written notice within ten (10) days of receipt of Landlord's
notification. If Tenant cancels this Lease pursuant to this
Paragraph 35, Tenant shall vacate the Building and the Premises
within thirty (30) days of its delivery to Landlord of the notice of
cancellation.
36. LIENS.
Tenant shall, within ten (10) days after receiving notice of the
filing of any mechanic's lien for material or work claimed to have
been furnished to the Premises on Tenant's behalf or at Tenant's
request, discharge the lien or post a bond equal to the amount of
the disputed claim with a bonding company reasonably satisfactory to
Landlord. if Tenant posts a bond, it shall contest the validity of
the lien with all due diligence. Tenant shall indemnify, defend and
hold Landlord harmless from any and all losses and costs incurred by
Landlord as a result of any such liens attributable to Tenant. If
Tenant does not discharge any lien or post a bond for such lien
within such ten (10) day period, Landlord may discharge such lien at
Tenant's expense and Tenant shall promptly reimburse Landlord for
all costs incurred by Landlord in discharging such lien including,
without limitation, attorney's fees and costs and interest on all
sums expended at the maximum interest rate permitted by law. Tenant
shall provide Landlord with not less than ten (10) days written
notice of its intention to have work performed at or materials
furnished to the Premises so that Landlord may post appropriate
notices of non-responsibility.
37. MISCELLANEOUS PROVISIONS
(a) Time of Essence. Time is of the essence of each provision of
this Lease.
(b) Successors. This Lease shall be binding on and inure to the
benefit of the parties and their successors, except as provided
in Paragraph 21 herein.
(c) Landlord's Consent. Any consent required by Landlord under
this Lease must be granted in writing and may be withheld by
Landlord in its sole and absolute discretion, unless otherwise
expressly provided herein.
(d) Commissions. Each party represents that it has not had
dealings with any real estate broker, finder or other person
with respect to this Lease in any manner, except for the broker
identified in Subparagraph l(p). If Tenant has dealt with any
other person or real estate broker with respect to leasing or
renting space in the Project, Tenant shall be solely
responsible for the payment of any fees due said person or firm
and Tenant shall hold Landlord free and harmless and indemnify
and defend Landlord from any liabilities, damages or claims
with respect thereto, including attorney's fees and costs.
Landlord shall be responsible for the payment of commissions to
the broker identified in l(p).
(e) Landlord's Successors. In the event of a sale or conveyance by
Landlord of the Building on the Project, the same shall operate
to release Landlord from any liability under this Lease, and in
such event Landlord's successor in interest shall be solely
responsible for all obligations of Landlord under this Lease.
(f) Prior Agreement or Amendments. This Lease contains all of the
agreements of the parties hereto with respect to any matter
covered or mentioned in this Lease, and no prior agreement or
understanding pertaining to any such matter shall be effective
for any purpose. No provisions of this Lease may be amended or
added to except by an agreement in writing signed by the
parties hereto or their respective successors-in-interest.
(g) Recording. Tenant shall not record this Lease nor a short form
memorandum thereof without the consent of Landlord. Landlord
may record a short form memorandum of this Lease and Tenant
shall execute and acknowledge such form if requested to do so
by Landlord.
(h) Separability. Any provision of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or
invalidate any other provision hereof, and all other provisions
of this Lease shall remain in full force and effect.
(i) No Partnership or Joint Venture. Nothing in this Lease shall
be deemed to constitute Landlord and Tenant as partners or
joint venturers. It is the express intent of the parties
hereto that their relationship with regard to this Lease and
the Premises be and remain that of lessor and lessee.
(j) Interpretation. This Lease shall be construed and interpreted
in accordance with the laws of the state in which the Premises
are located. This Lease constitutes the entire agreement
between the s with respect to the Premises and the Project,
except for such guarantees or modifications as may be executed
in writing by parties from time to time. When required by the
context of this Lease, the singular shall include the plural
and the masculine shall include the feminine and/or neuter.
"Party" shall mean Landlord or Tenant. If more than one person
or entity constitutes Landlord or Tenant, the obligations
imposed upon that party shall be joint and several as to all
persons or entities comprising such party. The enforceability
invalidity or illegality of any provision shall not render the
other provisions unenforceable, invalid or illegal.
(k) No Light, Air or View Easement. Any diminution or blocking of
light, air or view by any structure which may be erected on
lands adjacent to the Building shall in no way affect this
Lease or impose any liability on Landlord.
(1) Governing Law. This Lease shall be governed by and construed
pursuant to the laws of the State of California.
(m) Mortgagee Protection. In the event of any default on the part
of Landlord, Tenant will give notice by registered or certified
mail to any beneficiary of a deed of trust, mortgagee, or
ground lessor covering the Premises, and shall offer such
beneficiary, mortgagee, or ground lessor, a reasonable
opportunity to cure the default, including time to obtain
possession of Premises by power of sale or a judicial
foreclosure, or in the event of a ground lessor, by appropriate
judicial action, if such should prove necessary to effect a
cure.
This Office Lease is subject to a First Addendum.
IN WITNESS WHEREOF, the parties have executed this Lease as of the
date first above written.
TENANT: LANDLORD:
TRUCKEE RIVER BANK, a REALTY ADVISORS, INC.
California Corporation
By:/s/ Martin Sorensen By: /s/
Title: President/CEO Title:
Date: 6/28/95 Date: 6/29/95
<PAGE>
ADDENDUM TO LEASE
Addendum to that Lease dated June 15, 1995, by and between Realty
Advisors, Inc., a Delaware Corporation, as "Landlord" and Truckee
River Bank, a California Corporation, as "Tenant" for the premises
located at 1651 Response Road, Sacramento, California. In the case
of any inconsistencies between this Addendum and the basic lease,
this Addendum shall prevail.
38. USE
Landlord acknowledges and agrees to the acceptability of Tenant's
use of the premises as a retail banking facility and third party
investment services with typical banking floor operations as well as
general and administrative office uses, loan services, bankcard
services, and mortgage loans.
39. TENANT IMPROVEMENT ALLOWANCE - ADA Compliance, No Liens
Landlord will provide Tenant a credit for tenant improvements of
$120,000. Tenant may draw upon this credit by submitting to
Landlord invoices and conditional lien releases from valid licensed
contractors which have been approved by Tenant in writing for the
tenant improvement work which has been completed. Within thirty
(30) days of receipt, Landlord shall remit to Tenant the amount
requested on the invoices. Any unused portion of the allowance
shall be maintained by Landlord as a credit until the entire amount
of the credit has been utilized. This allowance is given in lieu of
any work to be performed by Landlord as the Tenant is taking the
Premises in its "as is" condition. Tenant may select its own
licensed contractor, subject to the Landlord's reasonable approval,
to complete these improvements. All work shall be done in a workman
like manner in accordance to building code, including Title 24 and
ADA, and any permits or fees shall be the responsibility of Tenant.
Tenant shall accept the Premises in an "as is" condition except that
Landlord shall warrant that the HVAC, common area electrical and
plumbing shall be in working order.
40. PARKING
As indicated in Exhibit B, Landlord shall provide six parking spaces
for the exclusive use of Truckee River Bank for visitor parking.
Tenant has the sole responsibility to regulate use of its visitor
parking spaces, but no vehicles shall be towed from such spaces
without prior notice to Landlord. Additionally, Tenant shall have
12 secured underground parking stalls. The rent for the secured
underground parking stalls shall be $45.00 per stall per month in
the first year of this Lease. Tenant is entitled to a total of 54
total parking spaces comprised of 12 secured, 6 visitor and 36
unreserved. There will be an additional $10.00, one time charge
for the security entry cards for each secured stall. Replacement
cards shall cost $10.00 each.
41. SIGNAGE
Subject to all necessary government approvals, Tenant shall have the
right to install and maintain one sign on the building's upper most
exterior surface, with the location of the sign to be selected by
Tenant prior to July 31, 1995. The sign shall consist of the
Tenant's name with the size, placement, color and style of lettering
to be approved in advance by both parties. The size of the sign
shall not be larger than 1/2 of the total amount of square footage
allocated for the building Signage. Tenant shall also be entitled
to utilize the existing monument sign with the location, lettering
and size of this sign shall also be approved by both parties. After
the second building sign is approved by the City of Sacramento,
Landlord grants its approval to Tenant to submit an application for
a variance to install a sign on the facia directly over the covered
drive-thru area. If however, the City of Sacramento grants
approval of this sign subject to the elimination of any other
building identification, the Landlord shall not allow this sign to
be placed on the building. Tenant shall obtain at its own cost any
necessary governmental approvals or special permits for these signs;
however, Landlord shall cooperate with Tenant's efforts in that
regard. All costs of obtaining approval, installation and
maintenance of the signs including electricity shall be paid by
Tenant. If a sign is removed, Tenant is responsible for having the
building surface restored to its original condition, ordinary wear
and tear excepted. If a sign falls into disrepair, Tenant shall
have thirty (30) days to effect repairs following Landlord's notice
to Tenant to do so. If repairs are not completed within such
period, Landlord has a right to have repairs made and charge Tenant
for the same. Subject to Landlord's approval, Tenant shall be
allowed a temporary sign until such time a permanent sign is
installed for a period not to exceed six months.
42. RESTRICTION ON OTHER BANKS AND SIGNS
So long as this lease remains in effect and Tenant is not in default
hereunder, Landlord agrees that it will not lease any other space in
the building for use as a retail bank doing full service banking
business with the public. This restriction shall not apply to any
bank not offering full service banking to the public at this
location. Additionally, Landlord agrees it shall not allow any
other bank tenant in the Project exterior building signage.
43. CONDITIONS TO THE LEASE
Landlord acknowledges that Tenant cannot occupy and operate the
Premises for banking, purposes without the prior approval of the
Federal Deposit Insurance Corporation. Tenant, at its own cost has
applied for and is diligently pursuing the necessary approvals. If
Tenant is unable, prior to June 27, 1995, to obtain regulatory
approvals, Tenant or Landlord may terminate this lease upon written
notice to Tenant or Landlord to be received before 5:00 p.m.,
Tuesday, June 27, 1995. If Tenant has not given written notice to
Owner's agent on or before such time, the condition stated herein is
deemed to have been waived. If Landlord or Tenant does give notice
of termination by the above referenced date, all further rights and
liabilities of both parties hereunder shall terminate as of the date
of the notice. This lease is also contingent upon Buyer closing
escrow to purchase the building, which is anticipated to be June 25,
1995.
44. OPTION TO EXTEND
In the event that Tenant has performed under the terms of this
lease, and provided Tenant has not been in any material default
under the terms of this Lease within the 24 months preceding
Tenant's exercise of this option, the Tenant shall have and are
hereby granted the right and option to renew the term of this Lease
for two additional periods of five (5) years each. If Tenant is in
default with respect to any covenant, condition or term of this
Lease on the date of giving the option notice, the option notice
shall be totally ineffective, or if Tenant is in material default
with respect to any covenant, condition or term of this Lease on the
date the extended term is to commence, the extended term shall not
commence and this Lease shall expire at the end of the initial term.
In order to exercise the five (5) year options, Tenant shall give
Landlord written notice of its intention to exercise said option
between eight (8) months and twelve (12) full calendar months prior
to the expiration date of said Lease or expiration of said first
option period as the case may be. All lease terms and conditions
shall be subject to renegotiation for the renewed period and the
rental shall be in the amount satisfactory to Landlord and in an
amount equal to prevailing market rentals at said time. Within
fifteen (I 5) days of Tenant's notification, Landlord shall provide
Tenant the terms and conditions for the option period. Unless a
fully executed lease or extension thereof including the rental rate
is settled and finalized within sixty (60) days from the date
written notice of intention to exercise is received by the Landlord,
the Lease option shall terminate and become void and the Lease and
all rights thereunder on the part of the Tenant shall expire at the
initial term of the Lease or the first extended term of the Lease as
the case may be. If Landlord has not delivered to Tenant the terms
and conditions within the fifteen (I 5) day period, the
aforementioned sixty (60) day period shall be extended by the equal
number of days after the fifteen (15) days Landlord delivered the
terms and conditions to Tenant.
45. TENANT IDENTIFICATION
Landlord acknowledges that the Tenant may be considering a possible
name change. So long as this name change does not adversely effect
Tenant's balance sheet, Landlord shall grant approval. All costs
involved in this possible name change shall be borne by Tenant. The
foregoing shall apply if Tenant is purchased by another bank.
46. ATM AND DRIVE-THRU
Subject to appropriate governmental approvals, Landlord consents to
the installation and exclusive operation of a automatic teller
machine and a night depository at the exterior of the building, in
the location previously utilized by Sacramento Savings & Loan.
Tenant shall also have exclusive use of the existing drive-thru
facility for banking purposes. Tenant shall be responsible for all
costs of maintenance, repair, improvements or alterations to the
ATM, drive-thru facility and its related areas.
47. DUAL AGENCY
Landlord and Tenant acknowledge that Bruce Hohenhaus of Colliers
Iliff Thorn represents Tenant and Doug Barnett of Colliers Iliff
Thorn represents Landlord. Although the individuals representing
Landlord and Tenant are currently considered independent contractors
and each are representing the needs of their respective client,
California Real Estate Law currently recognizes Colliers Iliff Thorn
as representing both parties in this transaction, commonly known as
Dual Agency. With the execution this lease contract, Landlord and
Tenant acknowledge and accept this Dual Agency.
48. CONFIDENTIALITY
Except as required by law, no party hereto shall disclose to third
parties any of the terms of the lease referenced above or of the
lease in any form fully executed, or of related agreements which may
eventually be consummated, unless such disclosure shall be
specifically consented to by the other parties; provided, however,
that each may disclose on a strictly confidential basis any such
information to its attorney's accountants, lenders loaning on the
leased property, property manager of the leaded property and brokers
engaged to sell the leased property.
49. AFTER HOUR UTILITIES:
It is acknowledged that Tenant will may, from time-to-time, be open
for business on Saturdays from 9:00 a.m. to 3:00 p.m. Landlord
shall provide the utilities as outlined in Paragraph 14 and Exhibit
H, and the additional cost for such utilities shall be $270.00 per
month and shall be increased by 5% annually in addition to the Basic
Rent. Should Tenant discontinue Saturday operations, then Tenant
shall provide written notice and there shall be no further charges.
<PAGE>
All other terms and conditions of this lease dated June 15, 1995
shall remain unchanged.
LANDLORD: REALTY ADVISORS, INC. TENANT: TRUCKEE RIVER BANK
a Delaware Corporation A California Corporation
By: /s/ By: /s/ Martin Sorensen
Dated: 6/29/95 Dated: 6/28/95
<PAGE>
EXHIBIT A
This Exhibit is a graphic of the floor plan for the first floor of
the Project.
<PAGE>
EXHIBIT B
This Exhibit is a graphic of the parking area for the Project.
<PAGE>
SAMPLE
Exhibit D
NOTICE OF LEASE TERM DATES
To: ________________________
________________________
________________________
Date: _______________________
Re: Lease dated _____________________, 19___, by and between ______________, a
Landlord, and_______________________________________, a ____________________ ,
Tenant, concerning Suite ___________Located at ______________________________
________________________________________.
Gentlemen:
In accordance with the subject Lease, we wish to advise and/or
confirm as follows:
1. That the Premises have been accepted herewith by the
Tenant as being substantially complete in accordance with
the subject Lease and that there is no deficiency in
construction.
2. That the Tenant has possession of the subject Premises and
acknowledges that under the provisions of the subject
Lease the Term of the Lease shall commence as of
________________________for a term of___________________,
ending on _____________________.
3. That in accordance with the subject Lease, rent commenced
to accrue on ____________________.
4. If the Commencement Date of the subject Lease is other
than the first day of the month, the first billing will
contain a pro rata adjustment. Each billing thereafter
shall be for the full amount of the monthly installment as
provided for in said Lease.
5. Rent is due and payable in advance on the first day of
each and every month during the term of said lease. Your
rent checks should be made payable to __________________
at _______________________.
6. Tenant's obligation to pay monthly installments of Annual
Basic Rent will be waived for a period of________________
( ) months beginning on _______________________________
And ending on _________________________ In accordance
with that certain Rent Waiver Agreement executed by
Landlord and Tenant.
7. The number of Rentable Square Feet contained within the
Premises for all purposes of this Lease is ____________
square feet.
8. Tenant's Percentage, based upon the number of Rentable
Square Feet contained within the Premises and the
Building, is _____%.
AGREED AND ACCEPTED
LANDLORD:
______________________________________, a
_______________________________________
By: __________________________________
Print Name: ____________________________
Its: ___________________________________
TENANT:
__________________________________________________,a
__________________________________________________
By: ______________________________________________
Print Name: ____________________________
Its: ___________________________________
By: ______________________________________________
Print Name:______________________________
Its: ____________________________________
SAMPLE
Exhibit E
TENANT ESTOPPEL CERTIFICATE
The undersigned, ____________________________________, a
("Landlord"), with a mailing address c/o ___________________________
___________________________and______________________________________, a
_______________________("Tenant"), hereby certify to ______________________, a
________________________________, as follows:
1. Attached hereto is a true, correct and complete copy of that
certain lease dated ___________, 19__, between Landlord and Tenant
(the "Lease"), which demises premises located ____________________
______________(The "Premises").
The Lease is now in full force and effect and has not been
amended, modified or supplemented, except as set forth in
Paragraph 4 below.
2. The term of the Lease commenced on ____________________
__________, 19___.
3. The Term of the Lease shall expire on ___________________, 19___.
4. The Lease has: (Initial one)
(_______) not been amended, modified, supplemented,
extended, renewed or assigned.
(_______) been amended, modified, supplemented, extended,
renewed or assigned by the following described agreements,
copies of which are attached hereto:
__________________________________________________________
__________________________________________________________
5. Tenant has accepted and is now in possession of the Premises.
6. Tenant and Landlord acknowledge that the Lease will be assigned
to ___________________________________________________________
______________________ And that no modification, adjustment,
revision or cancellation of the Lease or amendments thereto
shall be effective unless written consent of______________________
is obtained, and that until further notice, payments under the Lease
may continue as heretofore.
7. The amount of fixed monthly rent is $________________.
8. The amount of security deposits (if any) is $______________________.
No other security deposits have been made.
9. Tenant is paying the full lease rental which has been paid in
full as of the date hereof. No rent or other charges under the
Lease have been paid for more than thirty (30) days in advance
of its due date.
10. All work required to be performed by Landlord under the Lease
has been completed.
11. There are no defaults on the part of the Landlord or Tenant
under the Lease.
12. Tenant has no defense as to its obligations under the Lease and
claims no set-off or counterclaim against Landlord.
13. Tenant has no right to any concession (rental or otherwise) or
similar compensation in connection with renting the space it
occupies except as provided in the Lease. All provisions of
the Lease and the amendments thereto (if any) referred to above
are hereby ratified.
The foregoing certification is made with the knowledge that _________________
____________________________________is about to fund a loan to Landlord or
is about to purchase the project (or part thereof) from Landlord and that
_______________________________is relying upon the representations herein
made in funding such loan or in purchasing the Project (or part thereof).
IN WITNESS THEREOF, this certificate has been duly executed and
delivered by the authorized officers of the undersigned as of
_______________________, 19___.
TENANT:
____________________________, a
____________________________
By:________________________
Print Name:________________
Its:_______________________
By:_______________________
Print Name:_______________
Its:______________________
<PAGE>
Exhibit F
RULES AND REGULATIONS
1. Except as specifically provided in the Lease to which these
Rules and Regulations are attached, no sign, placard, picture,
advertisement, name or notice shall be installed or displayed
on any part of the outside or inside of the Building or Project
without the prior written consent of Landlord, which consent
Landlord may withhold in its sole and absolute discretion.
Landlord shall have the right to remove, at Tenant's expense
and without notice, any sign installed or displayed in
violation of this rule. All approved signs or lettering on
doors and walls shall be printed, painted, affixed or inscribed
at the expense of Tenant by a person approved by Landlord.
2. If Landlord objects In writing to any curtains, blinds, shades,
screens or hanging plants or other similar objects attached to
or used In connection with any window or door of the Premises,
or placed on any windowsill, which is visible from the
exterior of the Premises, Tenant shall immediately discontinue
such use. Tenant shall not place anything against or near
glass partitions or doors or windows which may appear unsightly
from outside the Premises.
3. Tenant shall not obstruct any sidewalks, halls, passages,
exits, entrances, stairways, elevators or escalators (if any)
of the Project. The halls, passages, exits, entrances,
shopping malls, elevators, escalators and stairways are not
open to the general public, but are open, subject to reasonable
regulations, to Tenant's business lnvitees. Landlord shall in
all cases retain the right to control and prevent access
thereto of all persons whose presence in the judgment of
Landlord would be prejudicial to the safety, character,
reputation and interest of the Project and its tenants;
provided that nothing herein contained shall be construed to
prevent such access to persons with whom any tenant normally
deals in the ordinary course of its business, unless such
persons are engaged in illegal or unlawful activities. No
tenant and no employee or invitee of any tenant shall go upon
the roof(s) of the Project.
4. The directory of the Building or Project will be provided
exclusively for the display of the name and location of tenants
only and Landlord reserves the right to exclude any other names
therefrom.
5. All cleaning and janitorial services for the Project and the
Premises Shall be provided exclusively through Landlord, and
except with the written consent of Landlord, no person or
persons other than those approved by Landlord shall be employed
by Tenant or permitted to enter the Project for the purpose of
cleaning the same. Tenant shall not cause any unnecessary
labor by carelessness or indifference to the good order and
cleanliness of the Premises.
6. Landlord will furnish Tenant, free of charge, with two keys to
each door locking the Premises. Landlord may make a reasonable
charge for any additional keys. Tenant shall not make or have
made additional keys, and Tenant shall not alter existing locks
or install any new additional locks or bolts on any door of the
Premises. Tenant, upon the termination of its tenancy, shall
deliver to Landlord the keys to all doors which have been
furnished to Tenant, and in the event of any loss of any keys
so furnished, shall pay Landlord therefor.
7. If Tenant requires telegraphic, telephonic, burglar alarm or
similar services, it shall first obtain, and comply with
Landlord's instructions in their Installation.
8. Freight elevator(s), if any, shall be available for use by all
tenants in the Building, subject to such reasonable scheduling
as Landlord, in its discretion, shall deem appropriate. No
equipment, materials, furniture, packages, supplies,
merchandise or other property will be received in the Building
or carried in the elevators except between such hours and in
such elevators as may be designated by Landlord. Tenant's
initial move in and subsequent deliveries of bulky items, such
as furniture, sales and similar items shall, unless otherwise
agreed in writing by Landlord, be made during the hours of 6:00
p.m. to 6:00 a.m. or on Saturday or Sunday. Deliveries during
normal office hours shall be limited to normal office supplies
and other small items. No deliveries shall be made which
impede or interfere with other tenants or the operation of the
Building.
9. Tenant shall not place a load upon any floor of tho Premises
which exceeds the load per square foot which such floor was
designed lo carry and which is allowed by law. Landlord shall
have the right lo prescribe the weight, size and position of
all equipment, materials, furniture or other property brought
into the Building. Heavy objects shall, if considered
necessary by Landlord, stand on such platforms as determined by
Landlord to be necessary to properly distribute the weight,
which platforms shall be provided at Tenant's expense.
Business machines and mechanical equipment belonging to Tenant,
which cause noise or vibration that may be transmitted to the
structure of the building or to any space therein to such a
degree as to be objectionable to Landlord or to any tenants in
the Building, shall be placed and maintained by Tenant, at
Tenant's expense, on vibration eliminators or other devises
sufficient to eliminate noise or vibration. The persons
employed to move such equipment in or out of the Building must
be acceptable to Landlord. Landlord will not be responsible
for loss of, or damage to, any such equipment or other property
from any cause, and all damage done to the Building by
maintaining or moving such equipment or other property shall be
repaired at the expense of Tenant.
10. Tenant shall not use or keep in the Premises any kerosene,
gasoline or inflammable or combustible fluid or material other
than those limited quantities necessary for the operation or
maintenance of office equipment. Tenant shall not use or
permit to be used in the Premises any foul or noxious gas or
substance, or permit or allow the Premises to be occupied or
used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors or
vibrations, nor shall Tenant bring into or keep in or about the
Premises any birds or animals.
11. Tenant shall not use any method of heating or air conditioning
other than that supplied by Landlord.
12. Tenant shall not waste electricity, water or air conditioning
and agrees to cooperate fully with Landlord to assure the most
effective operation of the Building's heating and air
conditioning and to comply with any governmental energy-saving
rules, laws or regulations of which Tenant has actual notice,
and shall refrain from attempting to adjust controls. Tenant
shall keep corridor doors closed, and shall close window
coverings at the end of each business day.
13. Landlord reserves the right, exercisable without notice and
without liability to Tenant, to change the name and street
address of the Building.
14. Landlord reserves the right to exclude from the Building
between the hours of 6 p.m. and 7 a.m. the following day, or
such other hours as may be established from time to time by
Landlord, and on Sundays and legal holidays, any person unless
that person is known to the person or employee in charge of the
Building or has a pass or is properly identified. Tenant shall
be responsible for all persons for whom it request passes and
shall be liable to Landlord for all acts of such persons.
Landlord shall not be liable for damages for any error with
regard to the admission to or exclusion from the Building of
any person. Landlord reserves the right to prevent access to
the Building in case of invasion, mob, riot, public excitement
or other commotion by closing the doors or by other appropriate
action.
15. Tenant shall close and lock the doors of its Premises and
entirely shut off all water faucets or other water apparatus,
and electricity, gas or air outlets before Tenant and its
employees leave the Premises. Tenant shall be responsible for
any damage or injuries sustained by other tenants or occupants
of the Building or by Landlord for noncompliance with this
rule.
16. Tenant shall not obtain for use on the Premises ice, drinking
water, food, beverage, towel or other similar services or
accept barbering or bootblacking service upon the Premises,
except at such hours and under such regulations as may be fixed
by Landlord.
17. The toilet rooms, toilets, urinals, wash bowls and other
apparatus shall not be used for any purpose other than that for
which they were constructed and no foreign substance of any
kind whatsoever shall be thrown therein. The expense of any
breakage, stoppage or damage resulting from the violation of
this rule shall be borne by the tenant who, or whose employees
or invitees, shall have caused it.
18. Tenant shall not sell, or permit the sale at retail of
newspapers, magazines, periodicals, theater tickets or any
other goods or merchandise to the general public in or on the
Premises. Tenant shall not make any room-to-room solicitation
of business from other tenants in the Project. Tenant shall not
use the Premises for any business or activity other than that
specifically provided for in this Lease.
19. Tenant shall not install any radio or television antenna,
loudspeaker or other devices on the roof(s) or exterior walls
of the Building or Project. Tenant shall not interfere with
radio or television broadcasting or reception from or in the
Project or elsewhere.
20. Tenant shall not mark, drive nails, screw or drill into the
partitions, woodwork or plaster or in any way deface the
Premises or any part thereof, except in accordance with the
provisions of the Lease pertaining to alterations. Landlord
reserves the right to direct electricians as to where and how
telephone and telegraph wires are to be introduced to the
Premises. Tenant shall not cut or bore holes for wires. Tenant
shall not affix any floor covering to the floor of the Premises
in any manner except as approved by Landlord. Tenant shall
repair any damage resulting from noncompliance with this rule.
21. Tenant shall not install, maintain or operate upon the Premises
any vending machines without the written consent of Landlord.
22. Canvassing, soliciting and distribution of handbills or any
other written material, and peddling in the Project are
prohibited, and Tenant shall cooperate to prevent such
activities.
23. Landlord reserves the right to exclude or expel from the
Project any person who, in Landlord's judgment, is intoxicated
or under the influence of liquor or drugs or who is in
violation of any of the Rules and Regulations of the Building.
24. Tenant shall store all its trash and garbage within its
Premises or in other facilities provided by Landlord. Tenant
shall not place in any trash box or receptacle any material
which cannot be disposed of in the ordinary and customary
manner of trash and garbage disposal. All garbage and refuse
disposal shall be made in accordance with directions issued
from time t time by Landlord.
25. The Premises shall not be used for the storage of merchandise
held for sale to the general public, or for lodging or for
manufacturing of any king, nor shall the Premises be used for
any improper, immoral or objectional purpose. No cooking shall
be done or permitted on the Premises without Landlord's
consent, except the use by Tenant of Underwriters' Laboratory
approved equipment for brewing coffee, tea, hot chocolate and
similar beverages shall be permitted, and the use of a
microwave oven for employees use shall be permitted, provided
that such equipment and use is in accordance with all
applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.
26. Tenant shall not use in any space or in the public halls of the
Project any hand truck except those equipped with rubber tires
and side guards or such other material-handling equipment as
Landlord may approve. Tenant shall not bring any other
vehicles of any kind into the Building or Project.
27. Without the written consent to Landlord, Tenant shall not use
the name of the Building or Project in connection with or in
promoting or advertising the business of Tenant except as
Tenant's address.
28. Tenant shall comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord
or any governmental agency.
29. Tenant assumes any and all responsibility for protecting its
Premises from theft, robbery and pilferage, which includes
keeping doors locked and other means of entry to the Premises
closed.
30. To the extent Landlord reasonably deems it necessary to
exercise exclusive control over any portions of the Common
Areas for the mutual benefit of the tenants in the Project,
Landlord may do so subject to non-discriminatory additional
Rules and Regulations.
31. Tenant's requirements will be attended to only upon appropriate
application to the Project management office by an authorized
individual. Employees of Landlord shall not perform any work
or do anything outside of their regular duties unless under
special instructions from Landlord, and no employee of Landlord
will admit any person (Tenant or otherwise) to any office
without specific instructions from Landlord.
32. Landlord may waive any one or more of these Rules and
Regulations for the benefit of Tenant or any other tenant, but
no such waiver by Landlord shall be construed as a waiver of
such Rules and Regulations in favor of Tenant or any other
tenant, nor prevent Landlord from thereafter enforcing any such
Rules and Regulations against any or all of the tenants of the
Project.
33. These Rules and Regulations are in addition to, and shall not
be construed to in any way modify or amend, in whole or in
part, the terms, covenants, agreements and conditions of the
Lease.
34. Landlord reserves the right to make such other and reasonable
Rules and Regulations as, in its judgment, may from time to
time be needed for safety and security, for care and
cleanliness of the Project and for the preservation of good
order therein. Upon written notice, Tenant agrees to abide by
all such Rules and Regulations herein above stated and any
additional rules and regulations which are adopted.
35. Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant's employees, agents, clients,
customers, invitees and guests.<PAGE>
Exhibit H
STANDARDS FOR UTILITIES AND SERVICES
The following standards for utilities and services are in effect.
Landlord reserves the right to adopt nondiscriminatory modifications
and additions hereto.
As long as Tenant is not in default under any of the terms,
conditions, provisions, or agreements of this Lease, Landlord shall:
1. On Monday through Friday, except holidays, from 8 a.m. to 8
p.m. and on Saturdays from 9 a.m. to 3 p.m. (and other times
for a reasonable additional charge to be fixed by Landlord)
ventilate the Premises and furnish air conditioning or heating
on such days and hours, when in the reasonable judgment of
Landlord. It may be required for the comfortable occupancy of
the Premises. The air conditioning system achieves maximum
cooling when the window coverings are closed. Landlord shall
not be responsible for room temperatures if Tenant does not
keep all window coverings in the Premises closed whenever the
system is in operation. Tenant agrees to cooperate fully at
all times with Landlord, and to abide by all reasonable
regulations and requirements which Landlord may prescribe for
the proper function and protection of said air conditioning
system. Tenant agrees not to connect any apparatus, device,
conduit or pipe to the Building chilled and hot water air
conditioning supply lines. Tenant further agrees that neither
Tenant nor his servants, employees, agents, visitors, licensees
or contractors shall at any time enter mechanical installations
or facilities of the Building or Project or adjust, tamper
with, touch or otherwise in any manner affect said
installations or facilities. The cost of maintenance and
service calls to adjust and regulate the air conditioning
system shall be charged to Tenant if the need for maintenance
work results from either Tenant's adjustment of room
thermostats or Tenant's failure to comply with its obligations
under this Exhibit, including keeping window coverings closed
as needed. Such work shall be charged at hourly rates equal to
then current journeyman's wages for air conditioning mechanics.
2. Furnish to the Premises, during the usual business hours on
business days, electric current as required by the Building
standard office lighting and fractional horsepower office
business machines in an amount not to exceed .025 KWH per
square foot per normal business day. Tenant agrees, should its
electrical installation or electrical consumption be in excess
of the aforesaid quantity or extend beyond normal business
hours, to reimburse Landlord monthly for the measured
consumption at the average cost per kilowatt hour charged to
the Building during the period. If a separate meter is not
installed at Tenant's cost, such excess cost will be
established by an estimate agreed upon by Landlord and Tenant,
and if the parties fail to agree, such cost shall be
established by an independent licensed engineer selected in
Landlord's reasonable discretion. Tenant agrees not to use any
apparatus or device in, upon or about the Premises which may in
any way increase the amount of such services usually furnished
or supplied to said Premises, and Tenant further agrees not to
connect any apparatus or device with wires, conduits or pipes,
or other means by which such services are supplied, for the
purpose of using additional or unusual amounts of such services
without the written consent of Landlord. Should Tenant use the
same to excess, the refusal on the part of Tenant to pay upon
demand of Landlord the amount established by Landlord for such
excess charge shall constitute a breach of the obligation to
pay rent under this Lease and shall entitle Landlord to the
rights therein granted for such breach. Tenant's use of
electric current shall never exceed the capacity of the feeders
to the Building, or the risers or wiring installation and
Tenants shall not install or use or permit the installation or
use of any computer or electronic data processing equipment in
the Premises without the prior written consent of Landlord.
3. Make water available in public areas for drinking and lavatory
purposes only, but if Tenant requires, uses or consumes water
for any purpose in addition to ordinary drinking and lavatory
purposes, of which fact Tenant constitutes Landlord to be the
sole judge, Landlord may install a water meter and thereby
measure Tenant's water consumption for all purposes. Tenant
shall pay Landlord for the cost of the meter and the cost of
the installation thereof and throughout the duration of
Tenant's occupancy. Tenant shall keep said meter and
installation equipment in good working order and repair at
Tenant's own cost and expense, in default of which Landlord may
cause such meter and equipment to be replaced or repaired and
collect the cost thereof from Tenant. Tenant agrees to pay for
water consumed, as shown on said meter, as and when bills are
rendered, and on default in making such payment, Landlord may
pay such charges and collect the same from Tenant. Any such
costs or expenses incurred, or payments made by Landlord for
any of the reasons or purposes hereinabove stated shall be
deemed to be additional rent payable by Tenant, and collectible
by Landlord as such.
4. Provide janitor service to the Premises, provided the same are
used exclusively as offices, and are kept reasonably in order
by Tenant, and unless otherwise agreed to by Landlord and
Tenant no one other than persons approved by Landlord shall be
permitted to enter the Premises for such purposes. If the
Premises are not used exclusively as offices, they shall be
kept clean and in order by Tenant, at Tenant's expense, and to
the satisfaction of Landlord, and by persons approved by
Landlord. Tenant shall pay to Landlord the cost of removal of
any of Tenant's refuse and rubbish to the extent that the same
exceeds the refuse and rubbish usually attendant upon the use
of the Premises as offices.
Landlord reserves the right to stop service of the elevator, if
any, plumbing, ventilation, air conditioning and electrical
systems, when necessary, by reason of accident or emergency or
for repairs, alterations or improvements, when in the judgment
of Landlord such actions are desirable or necessary to be made,
until said repairs, alterations or improvements shall have been
completed, and Landlord shall have no responsibility or
liability for failure to supply elevator facilities, plumbing,
ventilating, air conditioning or electric service, when
prevented from so doing by strike or accident or by any cause
beyond Landlord's reasonable control, or by laws, rules,
orders, ordinances, directions, regulations or by reason of the
requirements of any federal, state, county or municipal
authority or failure of gas, oil or other suitable fuel supply
or inability by exercise of reasonable diligence to obtain gas,
oil or other suitable fuel supply. It is expressly understood
and agreed that any covenants on Landlord's part to furnish any
services pursuant to any of the terms, covenants, conditions,
provisions or agreements of this Lease, or to perform any act
or thing for the benefit of Tenant, shall not be deemed
breached if Landlord is unstable to furnish or perform the
same by virtue of a strike or labor trouble or any other
cause whatsoever beyond Landlord's control.
30. To the extent Landlord reasonable deems it necessary to
exercise exclusive control over any portions of the Common
Areas for the mutual benefit of the tenants in the Project,
Landlord may do so subject to non-discriminatory additional
Rules and Regulations.
31. Tenant's requirements will be attended to only upon appropriate
application to the Project management office by an authorized
individual. Employees of Landlord shall not perform any work
or do anything outside of their regular duties unless under
special instructions form Landlord, and no employee of Landlord
will admit any person (Tenant or otherwise) to any office
without Instructions from Landlord.
32. Landlord may waive any one or more of these Rules and
Regulations for the benefit of Tenant or any other tenant, but
no such waiver by Landlord shall be construed as a wavier of
such Rules and Regulations against any or all of the tenants of
the Project.
33. These Rules and Regulations are in addition to, and shall not
be construed to in any way modify or amend, in whole or in
part, the terms, covenants, agreements and conditions of the
Lease.
34. Landlord reserves the right to make such other and reasonable
Rules and Regulations as, in its judgment, may from time to
time be needed for safety and security, for care and
cleanliness of the Project and for the preservation of good
order therein, provided Tenant receivers prior written notice.
Tenant agrees to abide by all such Rules and Regulations herein
above stated and any additional rules and regulations which are
adopted.
35. Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant's employees, agents, clients,
customers, invitees and guests.
<PAGE>
Exhibit I
Subject to Paragraph 40 of the First Addendum, the following rules
and regulations shall govern the use of the parking facilities which
are appurtenant to the Project.
1. All claimed damage or loss must be reported, itemized in
writing and delivered to the Management Office located within
the Project within ten (10) business days after any claimed
damage or loss occurs. Any claim not so made is waived.
Landlord is not responsible for damage by water, fire, or
defective brakes, or parts or for the act or omissions of
others, or for articles left in vehicles. In any event, the
total liability of Landlord, if any, is limited to Two Hundred
Fifty Dollars ($250.00) for all damages or loss to any car.
Landlord is not responsible for loss of use.
2. Tenant shall not park or permit its employees to park in any
parking areas designated by Landlord as areas for parking by
visitors to the Project. Tenant shall not leave vehicles in
the parking areas overnight nor park any vehicles in the
parking areas other than automobiles, motorcycles, motor driven
or non-motor driven bicycles or for wheeled trucks.
3. Parking stickers or any other device or form of identification
supplied by Landlord as a condition of use of the parking
facilities shall remain the property of Landlord. Such parking
identification device must be displayed as requested and may
not be mutilated in any manner. The serial number of the
parking identification may not be obliterated. Devices are not
transferable and any device in the possession of an
unauthorized holder will be void.
4. No overnight or extended term storage of vehicles shall be
permitted.
5. Vehicles must be parked entirely within painted stall lines of
a single parking stall.
6. All directional signs and arrows must be observed.
7. The speed limit within all parking areas shall be five (5)
miles per hour.
8. Parking is prohibited:
(a) in areas not striped for parking;
(b) in aisles;
(c) where "no parking" signs are posted;
(d) on ramps;
(e) in cross-hatched areas; and
(f) in such other areas as may be designated by Landlord or
Landlord's parking operator.
9. Every parker is required to park and lock his own vehicle. All
responsibility for damage to vehicles is assumed by the parker.
10. Loss or theft of parking identification devices must be
reported to the Management Office immediately, and a lost or
stolen report must be filed by the Tenant or user of such
parking identification device at the time. Landlord has the
right to exclude any car from the parking facilities that does
not have an identification device.
11. Any parking identification devices reported lost or stolen
found on any unauthorized car will be confiscated and the
illegal holder will be subject to prosecution.
12. Washing, waxing, cleaning or servicing any vehicle in any area
not specifically reserved for such purposes is prohibited.
13. The parking operators, managers or attendants are not
authorized to make or allow any exceptions to these rules and
regulations.
14. Tenant's continued right to use any parking spaces in the
parking facilities is conditioned upon Tenant abiding by these
rules and regulations and those contained in this Lease.
Further, if this Lease terminates for any reason whatsoever,
Tenant's right to use the parking spaces in the parking
facilities shall terminate concurrently therewith.
15. Tenant agrees to sign a parking agreement with Landlord or
Landlord's parking operator within five (5) days of the
request, which agreement shall provide the manner of payment or
monthly parking fees and otherwise be consistent with this
Lease and these rules and regulations.
16. Landlord reserves the right to refuse the sale of monthly
stickers or other parking identification devices to any tenant
or person and/or his agents or representatives who willfully
refuse to comply with these rules and regulations and all
unposted city, state or federal ordinances, laws or agreements.
17. Landlord reserves the right to establish and change parking
fees and to modify and/or adopt such other reasonable and non-
discriminatory rules and regulations for the parking facilities
as it deems necessary to the operation of the parking
facilities. Landlord may refuse to permit any person who
violates these rules to park in the parking facilities, and any
violation of the rules shall subject the car to removal, at
such car owner's expense.
EXHIBIT J
EARLY ENTRY
This Lease Rider is attached to and made a part of that certain
lease dated June 15, 1995 (the "Lease") between Realty Advisors,
Inc. ("Landlord") and Truckee River Bank ("Tenant").
Notwithstanding the fact that the Term of this Lease has not
commenced, Landlord hereby agrees that from and after the date
hereof and until the commencement of the Term of this Lease and
prior to the completion of Landlord's work of construction, if any
portion of the premises may be occupied by Tenant without
interfering with Landlord's work or construction, upon written
request by Tenant to Landlord, Tenant may elect to enter upon the
premises following not less than seven (7) days proper written
notice to Landlord in order to install trade fixtures and equipment
and to commence construction of any improvements within the Premises
which are to be constructed by Tenant at Tenant's sole cost and
expense (collectively, "Tenant's Finishing Work"). Such entry by
Tenant for the purposes of construction of Tenant's Fishing Work
shall be subject to all of the conditions set forth in the Rider.
(i) Landlord's Direction. Tenant, together with its
employees, agents, independent contractors, suppliers and any other
personnel under Tenant's control ("Tenants' Personnel") installing
Tenant's Finishing Work on the Premises, shall be subject to and
shall work under the direction of Landlord and Landlord's general
contractor. If, in the sole judgment of Landlord, Tenant's
Personnel and/or the work that is being performed by Tenant's
Personnel shall interfere with Landlord's construction work or shall
detrimentally affect Landlord's ability to comply with its
commitments for completing its improvements on the Premises or cause
labor difficulties, Landlord shall have the right to order Tenant's
early entry to cease on twenty-four (24) hours written notice to
Tenant, and if Landlord so requires in connection therewith because
such items are interfering with Landlord's work of construction,
Tenant shall have Tenant's Personnel remove all tools, equipment and
materials form the Premises.
(ii) Lease Terms Apply. Tenant agrees that any such early
entry shall be subject to all of the terms and conditions of this
Lease except for those relating to the payment of rent and other
monetary obligations which have a specific commencement time, which
provisions shall become applicable in accordance with the terms of
this Lease.
(iii) Utility Charges. Tenant agrees to pay to Landlord on
request all utility charges reasonably allocated to Tenant by
Landlord as a result of Tenant's early entry on the Premises.
(iv) Rent. Notwithstanding Subparagraph (ii) above, if Tenant
shall use a portion of the Premises for the operation of its regular
business prior to the Commencement Date, then Tenant shall advise
Landlord of such use and shall be charged rent of a pro rata basis
for the portion(s) of the Premises so utilized.
(v) No Possession. Tenant's only entry to carry out Tenant's
Finishing Work shall not be deemed a taking of possession of the
Premises by Tenant for the purposes of either setting the
Commencement Date or signaling the substantial completion of the
Tenant improvements which are to be constructed by Landlord.
(vi) Laws. Tenant and Tenant's Personnel shall comply with
all applicable laws, regulations, permits and other approvals
required to perform Tenant's Finishing Work or by Tenant's early
entry on the Premises.
(vii) Indemnity. Except for claims arising from the
gross negligence of Landlord, its employees or agents, Tenant
shall indemnify and save Landlord and the Premises harmless from
and against any and all liens, liabilities, losses, damages,
costs, expenses, demands, actions, causes of action and claims
(including without limitation attorney's fees and legal costs)
arising out of the use, construction or occupancy of the Premises
by Tenant or Tenant's Personnel arising form or relating to such
early entry.
LEASE AGREEMENT
TABLE OF CONTENTS
SECTION NUMBER PAGE NUMBER
BASIC LEASE PROVISIONS
1. Leased Premises and Use. . . . . . . . . . . . . . . . . . . . . . . 1
2. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6. Payment of Taxes and Assessments by Lessee . . . . . . . . . . . . . 7
7. Assignment and Subletting. . . . . . . . . . . . . . . . . . . . . ..7
8. Rights and obligations Under the Bankruptcy Code . . . . . . . . . . 9
9. Waste; Nuisance. . . . . . . . . . . . . . . . . . . . . . . . . . .10
10. Prohibited Uses. . . . . . . . . . . . . . . . . . . . . . . . . . .10
11. Alterations. . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
12. Abandonment. . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
13. Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
14. Maintenance and Repair . . . . . . . . . . . . . . . . . . . . . . .11
15. Glass Breakage . . . . . . . . . . . . . . . . . . . . . . . . . . .13
16. Common Area. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
17. Additional Rent. . . . . . . . . . . . . . . . . . . . . . . . . . .14
18. Lessor's Right to Relocate the Premises. . . . . . . . . . . . . . .15
19. Entry by Lessor . . . . . . . . . . . . . . . . . . . . . . . . . .15
20. Compliance with governmental Regulations . . . . . . . . . . . . . .15
21. Insurance and Indemnification . . . . . . . . . . . . . . . . . . .15
22. Waiver of Subrogation. . . . . . . . . . . . . . . . . . . . . . . 17
23. Surrender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
24. Subordination; Estoppel Certificate. . . . . . . . . . . . . . . . .17
25. Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . .18
26. Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
27. Sale by Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . .18
28. Damage or Destruction. . . . . . . . . . . . . . . . . . . . . . . .19
29. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
30. Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
31. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
32. No Personal Liability of Lessor's Shareholders, et al. . . . . . . .21
33. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . .21
34. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
35. Competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
36. Rent Control . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
37. Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . . .22
39. Signs, Auctions,Window . . . . . . . . . . . . . . . . . . . . . . .22
39. Covenant of Continuous Operation . . . . . . . . . . . . . . . . . .23
40. Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . .23
41. Late Charges:. . . . . . . . . . . . . . . . . . . . . . . . . . . .24
42. Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . .24
43. Merchants' Association/Marketing Fund. . . . . . . . . . . . . . . .26
44. Lessor and Lessee. . . . . . . . . . . . . . . . . . . . . . . . . .27
45. Relationship of the Parties. . . . . . . . . . . . . . . . . . . . .27
46. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
47. Quitclaim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
LEASE AGREEMENT
TABLE OF CONTENTS
SECTION NUMBER PAGE NUMBER
48. Other Payments to be Constructed as Rent . . . . . . . . . . . . . .27
49. Headings and Titles. . . . . . . . . . . . . . . . . . . . . . . . .27
50. Conditions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
51. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
52. Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
53. Corporate Authority. . . . . . . . . . . . . . . . . . . . . . . . .28
54. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .28
55. No Reservation of Premises . . . . . . . . . . . . . . . . . . . . .28
<PAGE>
LEASE AGREEMENT
BASIC LEASE PROVISIONS'
The words in and figures set forth in paragraphs A to Q, both inclusive,
are part of this "Lease" wherever appropriate reference is made thereto,
unless they are expressly modified elsewhere in this lease.
A. Date of Lease:
April 17, 1995
B. Lessor:
Western Investment Real Estate Trust, a California unincorporated
association doing business as a real estate investment trust and
Pinecreek Shopping Center Associates, a California limited partnership
C. Lessee:
Truckee River Bank, a California banking corporation
D. Lessee's Trade Name:
Truckee River Bank
E. Leased Premises and address of Leased Premises:
Pine Creek Shopping Center, the "Shopping Center", in the City of
Grass Valley, County of Nevada, and the State of California, located
at 736 Taylorville Road, Suite D, hereinafter referred to as the
"Leased Premises", as shown on the "Site Plan" Exhibit A of
approximately 2,760 square feet of gross leasable area. "Gross
Leasable Area" shall be defined as the measurements from the exterior
face of outside wall(s) to the center line of party wall(s). On the
Exhibit A the Leased Premises shall be outlined in red and the
Shopping Center shall be outlined in blue.
F. Use of Leased Premises:
Bank and savings and loan and for no other purpose.
G. Term and Lease Commencement Date:
This Lease shall commence on April 17, 1995, hereinafter referred to
as the "Lease Commencement Date", and shall terminate five (5) years
after the first day of the month next following the Lease Commencement
Date, the "Lease Term". As a confirmation of said Lease Commencement
Date, the parties shall execute an "Acknowledgment of Commencement" as
set forth in the form attached as Exhibit C.
H. Minimum Monthly Rent:
Months 1 - 6 $3,312.00
Months 7 - 12 $3,450.00
Months 13 - 24 $3,726.00
Months 25 - 36 $4,002.00
Months 37 - 48 $4,278.00
Months 49 - 60 $4,554.00
I-1. Percentage Rent Rate:
None
I-2. Prepaid Rent:
Three thousand three hundred twelve ($3,312.00) dollars
J. Security Deposit:
None
K. Monthly Marketing Charge:
Sixty-nine ($69.00) dollars per month
L. Taxes, Insurance, and Common Area Maintenance:
The Lessee shall pay a proportionate share, as defined in Paragraph 17
below, of taxes, insurance, and common area maintenance including
property management fees plus fees for Lessor's administrative costs,
which said administrative costs shall not exceed 10% of all taxes,
insurance and common area maintenance charges, payable monthly. The
"Common Area" for the Shopping Center is designated in Exhibit B
attached hereto. Additional Rent, as defined in Paragraph 17 below,
shall become due and payable April 17, 1995.
M. Lessor's Address for payment of Rent including Additional Rent under
Paragraph 17:
Western Investment Real Estate Trust
Dept #GB53
P.O. Box 45575
San Francisco, CA 94145-0575
N. Lessor's Address and Phone Number for Notices and all other
correspondence:
Western Investment Real Estate Trust 6861 Douglas Boulevard;
P.O. Box 2695
Roseville, CA 95746
(800) 643-4770 or (916) 791-0600
and
Pinecreek Shopping Center
c/o Connolly Development Co.
P.0. Box 348600
Sacramento .CA 95834
O. Lessee's Address and Phone Number for Notices:
To the Leased Premises:
736 Taylorville Road, Suite D
Grass Valley, CA 95949
and
Truckee River Bank
Attn: Director of Operations
10181 Truckee Tahoe Airport Road
Truckee, CA 96160
P. Addendum(s): The following addendum(s) are attached hereto and made a
part hereof:
First Addendum - Option To Extend Term
Second Addendum - Option To Extend Term
Third Addendum - Option To Extend Term
Fourth Addendum
Q. Exhibits: The following exhibits are attached hereto and made a part
hereof:
Exhibit A: Site Plan
Exhibit B: Common Area
Exhibit C: Acknowledgment of Commencement
Exhibit D: Sign Criteria
<PAGE>
1. Leased Premises and Use.
That Lessor hereby leases to Lessee hereby hires from Lessor, the
Premises as described in Paragraph E of the Basic Lease Provision.
(a) Use. The Premises, shall be solely for the purposes and under
the trade name set forth in Paragraph D and F of the Basic Lease Provisions
and for no other purpose and under no other trade name.
(b) Leased Premises Under Construction. In the event that the are
under construction, Lessor and Lessee recognize that final construction may
result in a minor increase or in the decrease in the dimensions or the
total square feet of the Gross Area of the total square feet of the Gross
Leasable Area of the Premises is increased or by less than five (5%)
percent, no change will be made in this Lease. If the final construction
results in an increase or decrease in total square feet of the Gross
Leasable Area of the Premises in excess of five (5%) percent, Lessor and
Lessee shall enter into an amendment of this Lease confirming the correct
square feet of the Gross Leasable Area of the Premises and adjusting the
Minimum Monthly Rent on a prorata basis.
(c) Suitability. Lessee acknowledges that neither Lessor nor any
agent of Lessor has made any representation or warranty with respect to the
Premises or with respect to the suitability of the Leased Premises or the
Shopping Center for the conduct of Lessees business, nor has Lessor agreed
to undertake any modification, alteration or improvement to the Leased
Premises except as provided in this
2. Term.
The Lease Term shall be as set forth in Paragraph G of the Basic Lease
Provisions.
3. Rent.
(a) Minimum Monthly Rent The "Minimum Monthly Rent shall be as set
forth in
Paragraph H of the Basic Lease Provisions.
(1) Rental Payment Date. The Minimum Monthly Rent shall be
payable in equal monthly installments without offset or reduction, in
advance, on the first day of each and every month of the Lease Term
beginning on the Lease commencement Date. Should the Lease Commencement
Date fall on a date other than the first day of the month, the first
month's Minimum Monthly Pent shall be paid in full and the second months
Minimum Monthly Rent shall be prorated appropriately.
(b) Percentage Rent. In addition to the lease Monthly Rent to be
paid by Lessee pursuant to this Paragraph 3, Lessee pay to Lessor an amount
equal to a percentage of "Gross Sales", as defined below, of the Lessee
made in, upon or from the Premises during each lease year of the Lease
Term, less the aggregate amount of the Minimum Monthly Rent paid by Lessee
during such lease year. The percentage of Gross Sales herein referred to
shall be the percent set forth in Paragraph I-1 of the Basic Lease
Provisions specified as "Percentage Rent".
Such Percentage Rent shall be computed on a monthly basis in each
lease year and,. on or before the tenth (10th) day of the calendar month
immediately following the close of such monthly period, Lessee shall pay to
Lessor the amount by which the sum so computed as the percentage of Gross
Sales of the Lessee during said period exceeds the installment of Minimum
Monthly Rent payable during said period.
At the close of each lease year and within thirty (30) days
thereafter, there shall be determined the Gross Sales of during said lease year
and the amounts paid to Lessor as Minimum Monthly Rent and as Percentage Rent
for said lease year. Thereupon, an adjustment shall be made with respect to
said Minimum Monthly Rent and Percentage Rent as follows: if Lessee shall have
an amount of Percentage Rent greater than is in fact required to pay for the
lease year under the terms hereof the excess so determined shall be applied
against amounts due from Lessee p to the Lease, except that, if any unused
excess exists at the expiration or termination of this Lease, such sum
shall. be paid to within fifteen (15) days after Lease returns the Leased
Premises in the condition required under this Lease. If has paid to Lessor
an amount of Percentage Rent less than Lessee is required to pay, Lease
shall immediately pay the difference to Lessor.
For the purpose of computing Percentage Rent, sales in the period prior
to the commencement of the first lease year shall be added to the sales for
the first full month of the first lease yew, Percentage Rent due and
payable (if any) for this entire period shall be the amount in excess of
the monthly installments of Minimum Monthly Rent which shall be payable by
during said period.
(1) Definition of Gross Sales. Gross Sales of Lessee means
that gross selling price of all merchandise or services sold, leased,
licensed, or delivered in or from the Premises by Lessee, its permitted
sublessee, licensees, or concessionaires, whether for cash or on credit,
including the gross amount received by reason of orders taken on the
Premises although filled elsewhere, and whether made by store personnel or
vending machines (as allowed by this Lease). Any transaction on an
installment basis, including, without limitation, any "lay-away" sale or
like on, or otherwise involving the extension of credit, shall be treated
as a sale for the first. price at the time of the transaction, of the time
of payment or when title passes. Gross Sales shall also include any sums
Lessee shall receive from pay telephones and stamp machines. Gross Sales
shall not include, or if included there shall be deducted (but only to the
extent they have been included), sales taxes, but only if such sales taxes
are added to the selling price, separately stated, collected separately
from the selling price of merchandise or services, and collected from
customers.
Within three (3) years after the receipt of any such statement, Lessor
at any time shall be entitled to an audit of such Gross Sales either by
Lessor or by a certified public accountant to be designated by Lessor.
Such audit shall be limited to the determination of Gross Sales as defined
herein; all records of business done in and about the Leased Premises by
Lessee, its subleases, licensees and concessionaires, including but in no
way limited to, all state and municipal sales tax and remits, reports to
the State Board of Equalization., income and franchise tax returns daily
detailed dated cash register strips, bank books, voucher bills and all
records, documents and papers pertaining to the business done in the Leased
Premises, shall be subject to the inspection of Lessor for such purpose;
additionally, Lessor shall have the right to examine and check the total an
said cash register, daily, weekly, or monthly at its election for the
purpose of determining Gross Sales and Percentage Rent; all such inspection
may be conducted during normal business hours at Lessee's principal place
of business by Lessor, its accountants and/or Attorneys. If it shall be
determined as a result of such audit that there has been a deficiency in
the payment of Percentage Rent, then such deficiency shall become
immediately due and payable with interest at the highest rate allowed by
law. If Lessee's statements for the pertinent lease year shall be found to
have understated Gross Sales by more than two percent (2%), then the
reasonable cost of the audit shall be paid by Lessee to Lessor, if the
understatement exceeds ten percent (10%), then in addition to the payment
of said audit cost and all other legal remedies of Lessor, such
understatement shall be deemed a breach of this Lease and shall entitle
Lessor to cancel and terminate this Lease. Any information gained from
such statements or inspection shall be confidential and shall not be
disclosed other than to carry out the purposes hereof; provided; however,
Lessor shall be permitted to divulge the contents of any such statements in
connection with any financing arrangements or assignments of Lessor's
interest in the Leased Premises or in connection with any administrative or
judicial proceedings in which Lessor is involved and where Lessor may be
required to divulge such information.
Statement of Gross Sales. Lessee agrees to furnish or cause to be
furnished to Lessor simultaneously with the payment of Percentage Rent (if
any) a statement of Gross Sales of the within (10) days after the close of
each calendar month, and an annual statement of Gross Sales within thirty,
(30) days after the close of each lease year or within thirty (30) days
after the expiration or termination of the Lease Term. Such statements
shall be signed by Lessee if Lessee is composed of individuals or by a
responsible officer if Lessee is a corporation.
Lessee shall keep at the Leased Premises full and accurate books of
account, records, cash receipts, and other pertinent data showing its Gross
Sales and Lessee shall record therein every sale and other transaction made
from the Leased Premises. Lessee shall also furnish to Lessor upon
request, copies of its quarterly state sales and use tax returns filed with
the state in which the Shopping Center is located. Such books of account,
records, cash receipts, and other pertinent data shall be kept for a period
of three (3) years after the end of each lease year. The receipt by Lessor
of any statement or any payment of Percentage Rent for any period, shall
not bind Lessor as to the correctness of the statement or the payment
(c) Prepaid Rent Concurrently with Lessees execution of this
Lease, Lessee shall pay to Lessor the sum as stated in Paragraph I-2 of the
Basic Lease Provisions as "Prepaid Rent" for the months designated therein.
(d) Definition of Rent All of the payments described in the
foregoing subsections 3(a) through 3(c), are hereinafter collectively
referred to as "Rent"
4. Payment of Rent.
Lessee agrees to pay the Rent herein reserved at the time hereinabove set
forth, without deduction or offset, prior notice or demand, in lawful money
of the United States of America, to the Lessor as set forth in Paragraph M
of the Basic Lease Provisions or to such other person and/or at such other
place as Lessor may from time to time designate in writing.
5. Possession.
Possession of the Leased Premises shall be tendered to the Lessee upon
execution of the agreement or at such later date as the parties may agree
in writing.
If Lessor is unable to do possession of the Premises by the date
specified for the commencement of the term as a result of causes beyond its
reasonable control Lessor shall not be liable for any damage caused for to
deliver possession, and this shall not be void or voidable. Lessor shall
not be liable for rent until Lessor delivers possession of the Premises to
but the term not be extended by the delay
6. Payment of Taxes and Assessments by Lessee.
Lessee shall reimburse Lessor as more specifically provide in
Paragraph 17, below, for Lessee's Proportionate Share, as defined in
Paragraph 17 below, of all taxes and assessments assessed, levied, imposed
or applicable to the Premises and/or the Shopping Center including without
limitation, real property taxes, assessment. improvement bonds, and other
governmental charges, commercial rental tax, business tax, license fees, or
levies, general and special, regular and supplemental, ordinary and
extraordinary, unforeseen as well as foreseen, of any kind or nature,
hereinafter collectively referred to as "Impositions", which are assessed,
levied, imposed or become a lien upon the Premises, the Shopping Center of
which the Premises are a part or become payable during the term; excepting
only inheritance taxes, or taxes levied on or computed by reference to
Lessor's personal net income as a whole on all of Lessor's investments.
The term Impositions shall also include any tax, fee, levy, assessment or
charge imposed as the result of a transfer, either partial or total of
Lessor's interest in the Leased Premises and/or the Shopping Center. If at
any time subsequent to the date of this Lease, the methods of taxation
prevailing as of the date of this Lease shall be altered so that in lieu of
or as a supplement to or a substitute for the whole or any part of any
taxes, charges or assessments now levied, assessed, or imposed on the
Leased Premises and for the Shopping Center and appurtenances thereto and
the facilities thereof, or the real property relating thereto, there shall
be levied, assessed, or imposed (a) a tax, assessment, levy, imposition or
charge wholly or partially as a net income, capital or franchise levy or
otherwise on the rents, issues, profits or income derived therefrom or (b)
the tax, assessment, levy (including but not limited to any municipal,
state or federal levy), imposition or charge measured by or based in whole
or in part upon the Leased Premises and appurtenances thereto and the
facilities thereof or the real property relating thereto and unposed upon
Lessor, or (c) a license fee measured by the Rent payable under this Lease,
then all such taxes, assessments, levies, impositions or charges, or the
part thereof so measured or based, shall be deemed to be included in the
term Impositions.
7. Assignment and Subletting.
(a) Lessor's Consent Required. Lessee shall not voluntarily, by
operation of law or otherwise assign this Lease or enter into license or
concession agreements, sublet all or any part of the Leased Premises, or
otherwise transfer, mortgage, pledge, hypothecate, or encumber all or any
part of Lessee's interest in this Lease or in the Leased Premises or any
part thereof, or suffer or permit the Leased Premises or any part thereof,
to be used by any third party other than Lessee, its authorized agents,
employees, invitee, and visitors, without Lessor's prior written consent
and any attempt to do so without such consent being first had and obtained
shall be wholly void and shall constitute a breach of this Lease.
(b) Reasonable Consent. If Lessee is in default under this Lease, it
will not be unreasonable for Lessor to withhold consent regardless of the
proposed assignee or sublessee. If Lessee is not in default and complies
with the following conditions and Lessor is satisfied with the
documentation submitted Lessor shall not unreasonably withhold its consent
to the assignment of this Lease or the subletting of the Leased Premises or
any portion thereof. Lessee shall submit in writing to Lessor for Lessor's
review and approval sixty (60) days prior to the effective date of the
proposed assignment (i) the name and legal composition of the proposed
assignee or sublessee; (ii) the nature of the proposed assignee's or
sublessee's business to be carried on in the Leased Premises; (iii) the
terms and provisions of the proposed transfer; (iv) and information as
Lessor may request concerning the proposed assignee or sublessee, including
without limitation, financial history, credit rating, and business
experience. Lessee acknowledges that Lessor has entered into this Lease in
reliance on the particular skills, knowledge, and experience of Lessee
and/or the principal officer of Lessee with respect to the conduct of
business in the Leased Premises; Lessee recognizes that Lessor's
substantial investment in the Leased Premises and the willingness of Lessor
to put that investment at risk under the terms of this Lease is based upon
Lessor's judgment. If in Lessor's sole judgment, the quality of
professional services or business is or may be in any way adversely
affected during the term of this Lease or the financial worth of the
proposed new Lessee is less than that of Lessee executing this Lease or
Lessee, and Lessee's Guarantor, if any, or if the investigation discloses
other information unsatisfactory to Lessor, Lessor reserves the right to
refuse such consent.
Anything to the contrary notwithstanding contained herein or
elsewhere in this Lease, Lessor, as additional consideration for approval
of such assignment or subletting, shall be entitled; (i) to receive any and
all consideration payable in connection therewith, including without
limitation, any additional rent or other charges or any lump sum
settlement; and/or (ii) to require increases in Minimum Monthly Rent and
Percentage Rent payable to Lessor consistent with the then current Minimum
Monthly Rent rate for a new lease for similar Leased Premises and to modify
this Lease accordingly increasing the Minimum Monthly Rent, adding and/or
amending a Percentage Rent clause; and/or (iii) to modify such other
provisions of this Lease, as Lessor may require to bring this Lease into
compliance with its current leasing practice, including without limitation
cancellation of any options to extend the term granted hereunder, if any;
and/or (iv) to assume the Lease, to sublease the Leased Premises or to
consummate the proposed transfer on the same terms and conditions
(excluding any differences in Rent or other financial terms) specified in
any notice of a proposed assignment, sublease, or transfer, such option to
be exercised within ten (10) days of receipt of a written notice thereof,
and/or (v) to cancel or terminate this Lease upon thirty (30) days written
notice to Lessee provided that in such event, Lessee, may elect by written
notice to Lessor within ten (10) days of delivery of notice of the
cancellation or termination to forego such assignment or subletting and to
retain the Leased Premises for the balance of the term of this Lease on the
terms and conditions herein set forth.
(c) No Release of Lessee. No consent by Lessor to any assignment or
subletting by Lessee shall relieve of any obligations to be performed by
Lessee under this Lease, whether occurring before or after such consent
assignment of the Lease, or subletting of the Premises. The consent by
Lessor to any assignment or subletting shall not relieve Lessee from the
obligation to obtain Lessor's express written consent to any other such
assignment of the Lease or subletting of the Leased Premises. The
acceptance of Rent by Lessor from any other person shall not be deemed to
be a waiver by Lessor of any provision of this Lease or to be a consent to
any assignment subletting, or other transfer. Consent to one assignment,
subletting, or other transfer shall not be deemed to constitute consent to
any subsequent assignment, subletting, or other transfer.
Lessee hereby irrevocably assigns to Lessor all Rent and other
sums from any such assignment or subletting of the Leased Premises, and
agrees that Lessor, as assignor and as attorney-in-fact for Lessee, or a
receiver for Lessee appointed upon Lessor's application, may collect such
Rent other sums and apply the same as provided in Paragraph 30 upon
Lessee's default. Until the occurrence of any act of default by Lessee,
assignee, or sublessee, Lessee shall have the right to collect such sums,
provided that all excess sums over the Minimum Monthly Rent called for in
the Basic Lease Provisions which any assignee or sublessee covenants to pay
shall belong solely and exclusively to Lessor.
(d) Costs; Form of Consent. Lessee agrees to reimburse Lessor for
Lessor's reasonable fees and costs, with a minimum of two hundred and
fifty ($250) dollars, incurred in conjunction with the processing and
documentation of any such requested transfer, assignment, subletting,
licensing, or concession agreement, change of ownership, mortgage, or
hypothecation of this Lease or Lessee's interest in and to the Leased
Premises. Each transfer, assignment, subletting, licensing, concession
agreement, mortgage, and hypothecation to which there has been consent
shall be by an instrument in a writing in a form satisfactory to Lessor,
and shall be executed by the transferor, assignor, sublessor, licensor,
concessionaire, hypothecator, or mortgagor, and the transferee, assignee,
sublessee, licensee, concessionaire, or mortgagee in each instance, as the
case may be; and each transferee, assignee, sublessee, licensee,
concessionaire, or mortgagee shall agree in writing for the benefit of
Lessor herein to assume, to be bound by, and to perform the terms,
covenants, and conditions of this Lease to be done, kept, and performed by
Lessee including the payment of all amounts due or to become due under this
Lease directly to Lessor. One executed copy of such written instrument
shall be delivered to Lessor. Failure to first obtain in writing Lessor's
consent or failure to comply with the provisions of this Paragraph shall
operate to prevent any such transfer, assignment, subletting, licensing,
concession agreement, change of ownership, mortgage, or hypothecation from
becoming effective.
(e) Transfer of Ownership. If Lessee hereunder is a corporation
which under the then current laws of the state in which the Shopping Center
is located is not deemed a public corporation, or is an unincorporated
association or partnership, the transfer, assignment, or hypothecation of
any stock or interest in such corporation, association, or partnership in
the aggregate in excess of forty (40%) percent shall be deemed an
assignment within the meaning and provisions of this Paragraph 7. Further,
the dissolution, merger, consolidation or other reorganization of the
corporation or the sale or other transfer of forty (40%) percent or more of
the assets of the corporation shall be deemed an assignment within the
meaning and provisions of this Paragraph 7.
8. Rights and Obligations Under the Bankruptcy Code.
Upon the filing of a petition by or against Lessee under the United
States Bankruptcy Code, Lessee, as debtor in possession, and any trustee
who may be appointed by the Bankruptcy Court agree as follows: (i) to
perform each and every obligation of Lessee under this Lease until such
time as this Lease is either rejected or assumed by order of the United
States Bankruptcy Court; and (ii) to pay monthly in advance on the first
day of each month as reasonable, compensation for use and occupancy of the
Leased Premises the sum set forth in the Basic Lease Provisions as Rent,
and all other charges otherwise due to this Lease; and (iii) to reject or
assume this Lease within sixty (60) days of the filing of such petition
under Chapter 7 of the Bankruptcy Code or under any other Chapter; and (iv)
to give Lessor at least forty-five (45) days prior written notice of any
abandonment of the Leased Premises; any such abandonment is to be deemed a
rejection of this Lease; and (v) to do all other things of benefit to
Lessor otherwise required under the Bankruptcy Code; and (vi) to be deemed
to have rejected this Lease in the event of the failure to comply with any
of the above; and (vii) to have consented to the entry of an order by an
appropriate United States Bankruptcy Court providing all of the above,
waiving notice and hearing of the entry of same.
Included within and in addition to any other conditions or obligations
imposed upon Lessee or its successor in the event of assumption and/or are
the following: (i) the cure of any monetary defaults and the reimbursement
of any loss within not more than thirty (30) days of assumption and/or
assignment; (ii) the deposit of an additional sum equal to three (3)
months' Minimum Monthly Rent to be held as a security deposit; (iii) the
use of the Leased Premises as set forth in Paragraph 1 of this Lease, (iv)
the reorganized debtor or assignee of such debtor in possession or of its
trustee demonstrates in writing that it has sufficient background including
but not limited to, substantial business experience and financial ability
to operate a business in the Leased Premises in the manner contemplated in
this Lease and meet all other reasonable criteria of Lessor as did upon
execution of this Lease; (v) the prior written consent of any mortgagee to
which this Lease has been assigned as collateral security; and (vi) the
Leased Premises, at all times, remains a single Leased Premises and
business and no physical changes of any kind may be made to the Premises
unless in compliance with the applicable provisions of this Lease.
No default under this Lease by Lessee, either prior to or subsequent
to filing of such a petition, shall be deemed to have been waived unless
expressly done so in writing by Lessor. The provisions of this Paragraph 8
shall also apply to any guarantor of this Lease.
9. Waste; Nuisance.
Lessee shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of
other lessee or occupants of the building of which the Leased Premises may
be a part or any other building in the Shopping Center, or injure or annoy
them use or maintain or permit any nuisance in, on or about the Leased
Premises. Lessee shall not commit or suffer to be committed any waste in
or upon the Premises.
Lessee further covenants and agrees that it will not use or suffer or
permit any person or persons to use the Leased Premises or any part thereof
for conducting therein a second-hand store, auction, distress or fire sale,
or bankruptcy or going-out-of-business sale. During said term, Lessee
shall keep the Leased Premises and every part thereof in a clean and
wholesome condition, free of any objectionable noises, odors, or nuisances;
all health and police regulations shall in all respects and at all times be
fully complied with by Lessee.
Lessee shall not install any exterior lighting or plumbing fixtures,
shades, or awnings, or make any exterior decoration or painting or similar
devices on the roof of exterior walls of the Leased Premises, or make any
changes to the store front, without Lessor's prior written consent. Use of
the roof of the Leased Premises is reserved to Lessor. shall not do
anything on the Leased Premises that will cause damage to the building in
which the Leased Premises are located; the Leased Premises shall not be
overloaded and no machinery, apparatus, or other appliance shall be used or
operated in or on the Leased Premises that will in any manner injure,
vibrate, or shake the Leased Premises or the premises of an adjacent
lessee. Lessee shall not install, maintain, use, or allow in or upon the
Leased Premises any pinball machine, coin-operated music machine, or other
coin-operated amusement device of any kind or character.
10. Prohibited Use
Lessee shall not use, or permit said Leased Premises or any part
thereof, to be used for any purpose or purposes other than the purpose or
purposes for which said Leased Premises are hereby leased; including but
not limited to entertainment (other than as incidental to the use and for
which no charge is made to customers) or recreational purposes. a bowling
alley, skating rink, health studio or gym, billiard room, game arcade or
amusement center, gambling establishment, movie theater, night club, dance
hall, bar or tavern (except if incidental to the operation of a restaurant
or delicatessen, if said Premises am hereby leased for such purpose or
purposes), pawn shop or the sale of second hand property, an "adult" book
store, a pornographic shop, house of prostitution or massage parlor, a
"training or education facility", a beauty school or barber college,
reading room, place of instruction or any other operation catering
primarily to students or trainees rather than to customers or for an
auction or for the sale or display of motor vehicles, boats, trailers,
motor homes, and establishments. Lessee shall not use, or permit said
Leased Premises or any part thereof for any use in direct conflict or
competition with then granted or existing exclusives. No use shall be made
or permitted to be made of said Leased Premises, no acts done, which will
increase the existing rate of insurance upon the Leased Premises in which
said Leased Premises may be located (once said rate is established), or
cause the cancellation of any insurance policy covering said Leased
Premises or any part thereof, nor shall Lessee permit to be kept, used or
sold in or about said Leased Premises any article which may be prohibited
by standard form of fire insurance policies. Lessee shall, at its sole cost
comply with any and all requirements, pertaining to the use of said Lease
Premises, of any organizations or company necessary for the maintenance of
reasonable fire and public liability insurance, covering said Leased
Premises and appurtenances. If applicable and if requested by Lessor, and
if required by any insurance organization or governmental agency, Lessee
agrees to install and maintain good order an Ansul system and such other
adequate fire protection systems as Lessor may deem necessary.
11. Alterations.
Lessee shall not make, or suffer to be made, any alterations of the
Leased Premises, or any part thereof, without the written consent of Lessor
having been first had and obtained, which consent shall not be unreasonably
withheld. Lessee agrees that all additions or improvements of whatsoever
kind or nature made to the Leased Premises, other than equipment, furniture
and movable fixtures, shall belong to and become the property of the Lessor
upon the expiration of the term of this Lease or sooner termination
thereof. The right of the Lessee to remove such equipment, furniture or
movable fixtures is conditioned, however, upon Lessee's agreement, and
Lessee hereby agrees to repair any damages to the Leased Premises caused by
such removal.
12. Abandonment.
Lessee shall not vacate or abandon the Premises at any time during the
term hereof,. and if Lessee shall abandon, vacate or surrender the Leased
Premises, or be dispossessed by process of law or otherwise, it shall be a
default under this Lease, and any personal property belonging to Lessee and
left on said Leased Premises shall be deemed to be abandoned, at the option
of Lessor, or the Lessor may store the same in the name and at the cost of
the Lessee. The term "abandoned" as used herein means vacation of the
Leased Premises by Lessee or any sublessee or assignee of Lessee for a
period of more than six (6) consecutive normal business days.
13. Utilities
Lessee agrees to pay, prior to delinquency, all charges and/or
assessments for gas, electricity, water, sewage, air conditioning, and
telephone service or other services which may be used in said Leased
Premises if separately metered, and Lessee's Proportionate Share, as
defined in Paragraph 17 below, of such utility charges if not separately
metered, in the same manner as payments for the Common Area Maintenance, as
set forth in Paragraph 17 below.
14. Maintenance and Repair.
Lessee shall at all times-during the term hereof and, and at Lessee's
sole cost and expense keep, maintain and repair the Leased Premises and
other improvements upon and about the Leased Premises in good and sanitary
order and condition including, without limitation, the maintenance, repair
and replacement, of any store front, doors, signs, entrances and exits,
interior walls, ceilings and floors, fire sprinklers, window casements,
glazing and air conditioning system, including contracting with a service
company for the monthly maintenance, with a copy of the service contract
furnished to Lessor, security system, plumbing, pipes, and utility lines,
electrical wiring and conduits. Lessee shall maintain the whole of said
Leased Premises in a clean and sanitary condition, in accordance with all
applicable state, city and county health and sanitation laws and ordinances
and as directed by the proper public, officials during the term of this
Lease, Lessee shall also at its sole cost and expense be responsible for
any alterations or improvements to the Leased Premises necessitated as a
result of the requirement of any municipal, state, or federal authority.
If applicable, Lessee shall install and maintain in good working order at
all times devices as necessary to ensure that the sewage and drainage
system shall not have stoppages. In the event of stoppages created by
Lessee's operations, Lessee shall pay or reimburse Lessor for the cost of
clearing said stoppages. Lessee shall make any repair or replacement
necessary, at its sole cost and expense, for any and all damages caused by
a forced entry or attempted forced entry.
By accepting possession of the Leased Premises, Lessee shall be deemed
to have accepted the Leased Premises as being in good condition and repair.
Lessee shall undertake all necessary repairs and maintenance to maintain
the Leased Premises in a first class condition, and Lessee agrees on the
last day of said term or sooner termination of this Lease to surrender the
Leased Premises in a first class condition. Lessee shall not defer needed
and reasonably necessary items of maintenance and repair in the final
months of this Lease, but shall perform the same throughout and including
the last day of the term of the Lease, so that when possession is returned
to Lessor, Lessor will not have to perform repairs and maintenance that
should have been taken care of by the Lessee under its duty to maintain and
make repairs to the Leased Premises.
Lessee covenants and agrees to pay promptly when due all claims for
work and materials furnished in connection with its maintenance or
alteration of the Leased Premises and shall not permit or suffer any liens
or encumbrances to attach to the Leased Premises, and shall indemnify
Lessor against loss therefrom; provided, however, that Lessee within five
(5) days after any final judgment which may be recovered against Lessee or
the Leased Premises in any action or litigation ensuing by reason of
Lessee's contest of such lien or claim of lien, shall pay the same and
fully discharge the Leased Premises and improvement from said lien and
judgment, or in the event Lessee appeals any judgment rendered against it
or the Leased Premises, provided shall forthwith upon the rendering of such
judgment furnish an appeal bond or otherwise cause a stay of execution of
such judgment, pending final determination of such appeal.
Lessee further covenants and agrees that Lessor may go upon the Leased
Premises and make any necessary repairs to the Leased Premises and perform
any work therein (i) which may be necessary to comply with any laws,
ordinances, rules or regulations of any public authority or of the
Insurance Commissioner or Lessor's Insurance Carrier or of any similar
body, if Lessee does not make or cause such repairs to be made or performed
or cause such work to be performed promptly after receipt of written demand
from Lessor, or (ii) which Lessor may deem necessary to prevent waste or
deterioration in connection with the Leased Premises if Lessee does not
make or cause such repairs to be made or performed or cause such work to be
performed promptly after receipt of written demand from Lessor, or (iii)
which Lessor may deem necessary to perform construction work incidental to
any portion of the Shopping Center adjacent to, above or below the Leased
Premises. Nothing herein contained shall imply any duty on the part of
Lessor to do any such work which under any provision of the Lease Lessee
may be required to do, nor shall it constitute a waiver of Lessee's default
in failing to do the same. No exercise by Lessor of any rights herein
reserved shall entitle Lessee to any damage for any injury or inconvenience
occasioned thereby nor to any abatement of Rent.
Except as provided below, Lessor shall not be called upon to make any
improvements or repairs in or upon the Leased Premises during the term of
this Lease, it being the intention that this Lease shall be what is
commonly referred to as a "triple net lease", Lessee being responsible for
all expenses of every kind and nature, including capital improvements as
well as operating expenses.
Subject to the Lessor's right to recoup Lessee's Proportionate Share,
as defined in Paragraph 17 below, of such expenses as provided in Paragraph
17 below, Lessor, agrees to repair, maintain and replace as necessary the
exterior buildings, foundation roof and structure of the Leased Premises
and/or the Shopping Center.
15. Glass Breakage
Lessee assumes all risks from breakage of glass on said Leased
Premises and will promptly replace all such breakage at its own expense.
16. Common Area.
All Common Area shall be subject to the exclusive control and
management of Lessor or such other persons or nominees as Lessor may have
delegated or assigned to excise such management or control, in whole or in
part, in Lessor's place and stead. In no event shall have the right to
sell or solicit in any manner in any of the Common Area.
Lessor shall at all times have the right and privilege of determining
the nature and extent of the Common Area, and of making such changes
therein and thereto from time to time which in its opinion are deemed to be
desirable and for the best interests of all persons using said Common Area,
including the location and relocation of driveways, entrances, exits,
automobile parking spaces, the direction and flow of traffic, installation
of prohibited areas, landscaped areas, and all other facilities hereof.
Lessor hereby grants to customers patrons, suppliers and employees and
invitee of Lessee, sub-lessees and concessionaires of Lessee, a non-
exclusive license to use parking areas in the Shopping Center for the use
of parking motor vehicles during the term of this Lease, subject to rights
reserved to Lessor as hereinafter contained. Lessor reserves the right at
any time and from time to time to grant similar non-exclusive use to other
lessees; to adopt reasonable rules and regulations relating to the use of
common areas including parking and no parking areas, and any part thereof;
to make changes in parking layout from time to time; to withdraw property
from parking use provided adequate customer parking is maintained as
reasonably determined by the Lessor; to close any portion of such parking
area to such extent as, in the reasonable opinion of Lessor or Lessor's
counsel, may be legally sufficient to prevent a dedication thereof or
accrual of any right to any person or the public therein or to close
temporarily any portion of the parking areas or facilities; and to do and
perform any other acts in and to said areas and improvements thereon as
Lessor in its reasonable judgement determines to be advisable.
It is understood that the employees of Lessee and the other lessee of
Lessor within the Shopping Center and the employees of other owners of the
Shopping Center shall not be permitted to park their automobiles in the
automobile parking areas of the common areas winch may from time to time be
designated for patrons of the Shopping Center. Lessor may at its election
furnish and/or cause to be furnished either within the Shopping Center
parking area, or reasonably close thereto, space for employee parking.
Lessor at all times shall have the right to designate the particular
parking area to be used by any or all of such employees and any such
designation may be changed from time to time.
17. Additional Rent.
In addition to the maintenance and repair obligations set forth in
Paragraph 14 above, and the Rent specified, Lessee shall pay to Lessor
further "Additional Rent" as follows:
(a). Lessee's proportionate share of the operating costs of the common
areas in the Shopping Center. Lessee's "Proportionate Share" shall be
defined, as the proportion that the total square feet of the Gross Leasable
Area of the Leased Premises bears to the total square feet of Gross
Leasable Area leased to and occupied by others in the Shopping Center,
which is owned by Lessor (whether or not open for business). "Opening
Costs" shall mean the total costs and expenses incurred in operating and
maintaining the common areas including the parking lot, including, without
limitation, re-paving and re-striping of the parking area, maintenance of
on-site and off-site sewer and utility fines, maintenance of appurtenant
easements, gardening and landscaping, exterior painting and maintenance,
water and utility charges, alterations due to changes in the law, costs of
public liability insurance (including umbrella insurance), rental income
and property damage insurance to be obtained by Lessor, cleaning, sweeping,
replacements, repairs, lighting, sanitary control and sewer charges,
removal of snow, ice, trash, rubbish, garbage and other refuse, reasonable
reserves for anticipated expenditures, the cost of personnel to implement
such services, to direct parking, and to police the common areas.
Operating costs shall also include Lessor's or third parties' expenses for
management, accounting, bookkeeping, and collection services, such sums to
be reasonably determined by Lessor at rates comparable to those charged for
similar services in comparable projects in the same geographic area.
"Common Areas" means all areas, space, equipment and special services for
parking and ingress and egress, and/or for the common and joint use and
benefit of the occupants of the Shopping Center as Lessor may in the future
designate, and may change at any time during the term hereof including,
without limitation, canopy, parking areas, access roads, on-site and off-
site sewer and utility servicing the Shopping Center, driveways, retaining
walls, landscaped areas, truck service ways or tunnels, loading docks,
pedestrian walkways, courts, stairs, ramps, and sidewalks, storage areas,
comfort and first aid stations, wash rooms and parcel pickup stations.
(b) Lessee's Proportionate Share of the Lessor's costs as provided in
the last paragraph of Paragraph 14.
(c) Lessee's Proportionate Share of Impositions, as provided in
Paragraph 6.
(d) Lessee's Proportionate Share of costs as provided in-Paragraph
21(c).
(e) Ten percent (10%) of all the foregoing costs listed in
subparagraphs (a) to (d) inclusive to Lessor's administrative and overhead
expenses.
Upon commencement of Rent, Lessor shall submit to Lessee a statement
of the anticipated monthly Additional Rent for the period between such
commencement and the following January and shall pay this Additional Rent
on a monthly basis concurrently with the payment of the Rent. Lessee shall
continue to make such monthly payments until notified by Lessor of a change
thereof. By April 1st of each year, Lessor shall endeavor to give Lessee a
statement showing the Additional Rent for the prior calendar year and
Lessee's allocable share thereof, prorated for the commencement of Rent.
In the event the total of the total monthly payments which Lessee has made
for the prior calendar year is less than Lessee's actual share of such
Additional Rent, then shall pay the difference in a lump sum with the
monthly Additional Rent next coming due. Any over payment by Lessee shall
be credited towards the monthly Additional Rent next coming due. A budget
estimating the anticipated expenditures, shall be prepared by Lessor, and
shall be used for purposes of calculating the anticipated monthly.
Additional Rent for the then current year with actual determination of such
Additional Rent after each calendar year as above provided; excepting that
in any year in which re-surfacing or re-roofing is contemplated, Lessor
shall be permitted to include the anticipated cost of same as part of the
budget. Even though the term has expired and Lessee has vacated the Leased
Premises, when the final determination is made of Lessee's share of said
Additional Rent for the year in which this Lease terminates, Lessee shall
immediately pay any increase due over the estimated Additional Rent
previously Paid and/or conversely, any overpayment made shall be
immediately rebated by Lessor to Lessee. Failure of Lessor to submit
statements as called for herein shall not be deemed a waiver of Lessee's
obligation to pay the above amounts, however, the obligation to pay shall
be postponed until Lessor has submitted the statement and Lessee shall have
ten (10) days thereafter to tender payment to Lessor.
18. Lessor's Right to. Relocate the Leased Premises
Lessor shall have the right to relocate the Leased Premises to another
part of the Shopping Center in accordance with the following: (i) the new
leased premises shall be substantially the same in size, dimensions,
configuration, decor, and nature as the Leased Premises described in this
Lease, and shall be placed in that condition by Lessor at its cost; (ii)
the physical relocation of the Leased Premises shall be accomplished by
Lessor at its cost; and (iii) Lessor shall give Lessee at least sixty (60)
days notice of Lessor's intention to relocate the Leased Premises.
19. Entry by Lessor.
Lessor reserves and shall at any and all reasonable times and with
reasonable notice during business hours, have the right to enter the Leased
Premises to inspect the same, and agrees to allow "for lease" signs of
reasonable size to be placed and remain upon the exterior front of the
Leased Premises during the last ninety (90) days of the term hereby
created.
20. Compliance with Governmental Regulation
Lessee agrees that it will comply with and conform to all laws and
ordinances, municipal, state and federal, and any and all lawful
requirements and orders of any property constituted municipal, state or
federal Board or authority, present or future, in anyway relating to the
condition, alteration, use or occupancy of the Leased Premises throughout
the entire term of this Lease and to the perfect exoneration from liability
of the Lessor doing such work as may be required at its sole expense
including, but not limited to, any regulations regarding hazardous or
dangerous substances. Without limiting the foregoing, Lease agrees that it
will not at any time use or occupy the Leased Premises in violation of the
certificate of occupancy issued with regard to the Leased Premises. The
judgment of any court of competent jurisdiction or the admission of Lessee
in any action or proceeding against Lessee, whether Lessor be a party
thereto or not, that Lessee has violated any such law, ordinance,
requirement or order in the use of the Leased Premises, shall be conclusive
of that fact as between Lessor and Lessee.
21. Insurance and Indemnification.
Lessee shall, at its sole cost and expense, cause to be placed in
effect immediately prior to commencement of the term of this Lease, and
shall maintain in full force and effect during said term of this Lease and
any renewals thereof, the following insurance in companies satisfactory to
the Lessor and licensed in the state in which the Leased Premises are
located and in the joint names of Lessor and Lessee as insured (or as
additional insured should Lessor so elect). The insurance carrier shall at
all times during the term of this Lease have a policyholder's rating of not
less than "A/7" in the most current edition of Bests Insurance Reports:
(a) Comprehensive public liability insurance including, if
applicable, but not limited thereto, boiler and machinery and any other
similar insurance covering the Leased Premises in an amount normally
carried by the Lessee in Lessee's normal "blanket" policy, but in any event
not less than $1,000,000 combined single limit bodily injury and property
damage for injury and/or death to any number of persons in any one
accident. Any insurance required of Lessee under this Lease may be
furnished by Lessee under a blanket policy carried by it. Such blanket
policy shall contain an endorsement in joint names of Lessor and Lessee,
reference the premises, and guarantee a minimum limit available for the
Leased Premises equal to the insurance amounts required in this Lease.
Annually the policy limits of said public liability insurance shall be
reviewed and adjusted to a limit as recommended by the Lessor's insurance
carrier. Said limit shall be set at an amount which is reasonable given
the nature of Lessee's use. In no event shall said coverage be less than $
1,000,000.
(b) Lessee shall, during the entire term of this Lease, keep in full
force and effect a policy of Use, Occupancy and Contents Insurance and
insurance covering all glass and windows, and if liquor is to be sold on
the Leased Premises, Dram Shop Insurance.
(c) Lessor shall, during the Lease Term, subject to Lessor's right to
recoup, Lessee's Proportionate Share of such costs, as more specifically
set forth in Paragraph 17, keep the Leased Premises insured for the benefit
of Lessor, for its full replacement value against loss or damage by fire,
including a broad form endorsement.
Lessee shall provide copies of the insurance policies, appropriately
authenticated by the insurer, as set forth in subparagraphs (a) and (c)
above (or insurance certificates should Lessor so elect). Such copies or
certificates shall be furnished to Lessor upon execution of this Lease.
The policies or certificates shall contain a provision that the insurer
will not cancel or refuse to renew the policies, or change in any material
way the nature or extent of the coverage provided by such policies without
first giving the Lessor thirty (30) days prior written notice by certified
or registered mail, return receipt requested. Thirty (30) days prior to
expiration of any policies of insurance carried by Lessee, Lessee shall
provide proof of continuing coverage.
In the event Lessee fails to procure, maintain and/or pay for the
insurance required by this Lease, at the times and for the duration
specified in this Lease, Lessor shall have the right, but not the
obligation, at any time and from time to time, and without notice, to
procure such insurance and/or pay the premiums for such insurance, in which
event shall repay Lessor, as additional rent, all sums so paid by Lessor
together with interest thereon and any costs or expenses incurred by Lessor
in connection therewith, without prejudice to any other rights and remedies
of the Lessor under this Lease. Failure of the Lessee to take out or
maintain the insurance policy hereinabove described or to pay the premiums
thereon or reimburse the Lessor when due shall carry with it the same
consequences as failure to pay any installment of Rent.
Lessor shall not be liable for any damage done to said Leased Premises
or any of the fixtures, merchandise, property or equipment therein
contained, whether owned by Lessee or by any other person, due to the
overflowing or breaking of steam or water pipes, drains, boilers, basins,
toilets, lavatories or gutters or from smoke, fire, odor, earthquake,
explosion, gas, electricity, lighting and wiring, or from any other cause
and whether having its origin in the Leased Premises hereby leased or
elsewhere.
Lessee, as a material part of the consideration to be rendered to
Lessor, hereby waives all against Lessor for injury to any person or for
damages to goods, wares, and merchandise in, upon or about said Leased
Premises from any cause arising at any time except the negligence or
willful misconduct of Lessor, and Lessee will indemnify, protect, defend
and hold Lessor harmless from any damages or injury to any person of to the
goods, wares and merchandise of any person arising from the use of the
Leased Premises by or under Lessee or from the failure of the Lessee to
maintain the Leased Premises in the manner herein required
22. Waiver of Subrogation.
Lessor and Lessee hereto do hereby waive its entire right of recovery
against the other for any damages caused by an occurrence against by Lessor
or Lessee, and the rights of any insurance carrier to be subrogated to the
rights of the insured under the applicable policy to the extent allowed by
the respective insurance carrier. Lessor and Lessee each covenant that at
the Commencement Date of the term hereof, their respective insurance
policies will contain waiver of subrogation endorsements, and that if such
endorsements, for any reason whatsoever, are about to become unavailable,
they will give the other party not less than thirty (30) days prior written
notice of such impending unavailability.
23. Surrender.
Upon the expiration of the term hereof to the leasehold interest
created hereby and subject to Lessor's lien rights set forth herein, Lessee
shall remove its interior and exterior signs and all of its movable trade
fixtures, equipments, and personal property from the Leased Premises and
fully repair and/or restore for all damage thereto resulting from such
removal, and shall thereupon surrender the Leased Premises in the same
condition as they were on the Lease Commencement Date, reasonable wear and
tear excepted. Lessee shall upon surrender, furnish a certification by a
qualified company that all mechanical equipment in the Leased Premises is
in good working condition. All property of any kind not removed from the
Leased Premises shall be deemed abandoned by Lessee. If the Leased
Premises are not surrendered at the end of the Lease Term, Lessee shall
indemnify Lessor against loss or liability resulting from delay by Lessee
in surrendering the Leased Premises including but not limited to any loss
arising from any claim made by any succeeding Lessee founded on such delay.
Except as provided herein, no act or conduct of the Lessor, whether
consisting of the acceptance of the keys to the Leased Premises, or
otherwise, shall be deemed to be or constitute an acceptance of the
surrender of the Leased Premises by the Lessee prior to the expiration of
the term hereof, and such acceptance by the Lessor of the surrender by the
Lessee shall only flow from and must be evidenced by a written
acknowledgment of acceptance of surrender signed by the Lessor.
24. Subordination; Estoppel Certificate.
At Lessor's option, this Lease shall be subordinated to any mortgage
or deed of trust which is now or shall be placed upon the Leased Premises,
and Lessee agrees to execute and deliver any instrument, without cost to
it, which may be deemed necessary to further effect the subordination of
this Lease to any such mortgage or deed of trust; provided, however, such
mortgage or deed of trust shall provide, or the mortgage or beneficiary
thereunder shall agree, in writing in recordable form delivered to Lessee,
that so long as Lessee is not in default under this Lease, foreclosure of
any such mortgage or deed of trust or sale pursuant to exercise of any
power of sale thereunder shall not affect this Lease but such foreclosure
or sale shall be made subject to this Lease which shall continue in full
force and effect, binding on the Lessee and transferee. Lessee shall
thereafter attorn to the transferee as if said transferee was the Lessor
under this Lease.
Lessee shall, at any time upon not less than ten (10) days prior
request by Lessor, execute, acknowledge and deliver to Lessor an estoppel
certificate, in writing in a form satisfactory to Lessor certifying that
this Lease is unmodified and in full force and effect (or if there have
been modifications, that the same is in full force and effect as modified
and stating the modifications) and, if so, the dates to which the Rent and
any other charges have been paid in advance, it being intended that any
such statement delivered pursuant to this subparagraph may be relied upon
by a prospective purchaser or encumbrancer (including assignees) of the
Leased Premises.
25. Attorneys' Fees.
In the event of the bringing of any action by either party hereto as
against the other hereon or hereunder or by reason of the breach of any
covenant or condition on the part of the other party or arising out of this
Lease, then and in that event the party in whose favor final judgment shall
be entered shall be entitled to have and recover of and from the other
reasonable attorneys' fees which shall be fixed by the Court
Should Lessor become a party defendant to any litigation concerning
this Lease or any part of the Leased Premises by reason of any act or
omission of the Lessee and not because of any act or omission of the
Lessor, then Lessee shall indemnify, protect, defend and hold Lessor
harmless from all liability by reason thereof and shall pay to Lessor all
reasonable attorneys' fees and costs incurred by Lessor in such litigation.
In addition, Lessee shall reimburse Lessor for any Attorneys' fees or
costs reasonably incurred by Lessor, whether or not suit be instituted,
with respect to any default of Lessee under the terms of this Lease
26. Holding Over.
Should the Lessee hold over the term hereby created with or without
consent of the Lessor, the term of this Lease shall be extended, at
Lessor's option on a month to month basis, at twice the rent paid in the
last year of the term, including Percentage Rent and adjustments,
hereinabove provided, and otherwise upon the covenants and conditions in
this Lease contained, until either party hereto serves upon the other
thirty (30) days written notice of termination, reciting therein the
effective date of cancellation.
27. Sale by Lessor.
In the event of a sale or conveyance by the Lessor of the Leased
Premises, upon the execution of a written assumption by the purchaser of
Lessor's obligations under this Lease, the same shall operate to release
the Lessor from any liability arising thereafter out of any of the
covenants or conditions, expressed or implied, herein contained in favor of
the Lessee, and in such event the agrees to look solely to the
responsibility of the successor in interest of the Lessor in and to this
Lease. If any security given by Lease to secure the faithful performance
of all or any of the covenants of this Lease on part of the Lessee, Lessor
may transfer and/or deliver the security, as such, to the purchaser, and
upon proper written notice to the Lessee, as provided by law, Lessor shall
be discharged from any liability arising thereafter in reference thereto.
28. Damage or Destruction.
In the event of damage or destruction of the Leased Premises from an
insured casualty, Lessor shall forthwith and with all due diligence repair
the same and restore the Lease Premises to substantially the same condition
in which they existed prior to such damage or destruction, at Lessor's cost
and expense, and such damage or destruction shall in no way annul or void
this Lease. Anything in this Paragraph to the contrary notwithstanding, if
any such damage or destruction to the Leased Premises is not covered by
insurance or cannot be repaired and the Leased Premises restored in the
manner hereinabove set forth within one hundred eighty (180) days after the
permits to repair such damage or destruction have been obtained, then this
Lease may be terminated by the Lessor by notice in writing to the Lessee
within sixty (60) days after such damage and destruction, and following
such notice this Lease shall be null and void and of no force and effect
and the parties shall be relieved of all further liability hereunder. If
this Lease is not thereby terminated, Lessor shall repair such damage and
destruction and restore the Leased Premises in the manner hereinabove set
forth. If the damage or destruction is caused by a casualty covered by
insurance, the proceeds of the insurance provided in Paragraph 21 shall be
used and paid to Lessor for such repair or reconstruction and both parties
shall execute such documents as may be necessary to effect such payment.
Rent payments shall continue while the Leased Premises are being replaced
or restored for resumption of business operations.
In the event that destruction occurs and the destruction amounts to
more than one-third of the then replacement value of the Shopping Center,
then either party by written notice given to the other within fifteen (15)
days after the destruction occurs may elect to terminate this Lease
forthwith.
In the event that this Lease is terminated under provisions of the
above Paragraph the entire proceeds of the insurance but not including any
awards attributable to the loss of any trade fixtures or personal property
of Lessee, shall belong to Lessor. Both parties shall execute such
documents as the insurance company may require.
29. Condemnation.
If title to all of the Premises is taken for any public or quasi-pubic
use under any statue, or by right of eminent domain, or by private purchase
in lieu of eminent domain, or if title to so much of the Leased Premises is
so taken that a reasonable amount of reconstruction of the Leased Premises
will not result in the Leased Premises being a practical improvement and
reasonably suitable for Lesse's continued occupancy for the uses and
purposes for which the Leased Premises are leased, then, in either event,
this Lease shall terminate on the date that possession of the Leased
Premises, or part of the Leased Premises, is taken.
If any part of the Leased Premises shall be so taken and the remaining
part of the Leased Premises. (after reconstruction of the then existing
building in which the Leased Premises are located) is reasonably suitable
for Lessee's continued occupancy for the purposes and uses for which the
Leased Premises are leased, this Lease shall, as to the part so taken,
terminate as of the date that possession of such part is taken, and the
Minimum Monthly Rent shall be reduced in the same proportion that the Gross
Leasable Area of the portion of the Leased Premises so taken (less any
additions to Leased Premises by reconstruction) bears to the original Gross
Leasable Area of the Leased Premises. Lessor shall, at its own cost and
expense, make all necessary repairs or alterations to the building in which
the Leased Premises are located so as to constitute the portion of the
Leased Premises a complete merchandising unit. There shall be no abatement
of Rent during such restoration except to the extent otherwise provided in
this Paragraph.
All compensation awarded or paid upon a total or partial taking of the
fee title of the Leased Premises shall belong to the Lessor, whether such
compensation be awarded or paid as compensation for diminution in value of
the leasehold or of the fee, Lessee not being entitled to any award for the
value of this Lease; provided, however, that Lessor shall not be entitled
to any award made to Lessee for depreciation to and cost of removal of
stock and fixtures, from the entire award, Lessee shall be entitled to the
value of the appropriation of its trade fixture and any amount included
therein with respect to Lessee's removal or relocation costs or damages to
Lessee's personal property.
30. Default.
In the event of any default under this Lease by Lessee, and such
default, if it be in the payment of Rent or any other default which can be
cured by the payment of money, continues uncured for a period of three (3)
days after written notice thereof from Lessor, or if it be a default in any
of the other provisions of this Lease, and such default continues uncured
for a period of (30) days after written notice thereof from Lessor, then
besides any other rights and remedies of Lessor at law or equity, Lessor
shall have the right either to terminate this Lease or to have this Lease
continue in full force and effect with Lessee at all times having the right
to possession of the Leased Premises.
Lessor shall recover from Lessee an award of damages equal to the sum
of (A) the Worth at the Time of Award of the unpaid Rent which had been
earned at the time of termination, (B) the Worth at the Time of Award of
the amount by which the unpaid Rent which would have been earned after
termination until the time of award exceeds the amount of such Rent loss
that Lessee affirmatively proves could have been reasonably avoided, (C)
the Worth at the Time of Award of the amount by which the unpaid Rent for
the balance of the Term after the time of award the amount of such Rent
loss that Lessee affirmatively proves could be reasonably avoided, (D) any
other amount necessary to compensate Lessor for all the detriment either
proximately caused by Lessee's failure to perform Lessee's obligations
under this Lease or which in the ordinary course of things would be likely
to result therefrom, and (E) all such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time under
applicable law.
For purposes of this Section, "Worth at the Time Award" shall be
computed by allowing interest at the highest contract rate permissible
under the laws of California or at such other rate as may be specifically
prescribed by statue and by using as the annual Rent reserved hereunder the
annual Rent plus the aggregate amount of any other Rent, charges and
payments paid or payable by Lessee hereunder for the twelve (12) month
period prior to the Lessee's default including, without limitation, all
amounts payable for taxes, insurance, and other common area and Operating
Costs.
Should Lessor, following any breach or default of this Lease by
Lessee, elect to keep this Lease in full force and effect with Lessee
retaining the right to on possession of the Leased Premises
(notwithstanding the fact that Lessee may have abandoned the Leased
Premises), then besides all other rights and remedies Lessor may have at
law or equity, Lessor shall have the right to enforce all of Lessor's
rights and remedies under this Lease, including, but not limited to,
Lessor's right to recover the Rent as it becomes due under this Lease.
Nothing herein shall prevent Lessor from pursuing any and all other
remedies it may have upon Lessee's default including but not limited to its
statutory unlawful detainer remedy.
Lessor shall have the right, in addition to its other remedies and
means of redress provided by this Lease and by law, to obtain specific
performance of any and all covenants or obligations of Lessee to be kept
and performed under this Lease.
Lessee hereby waiver any and all rights conferred by Section 3275 of
the Civil Code of California and by Sections 1174(c) and 1179 of the Code
of Civil Procedure of California and any and all other laws and rules of
law from time to time in effect during the Lease Term providing that Lessee
shall have any right to redeem, reinstate this Lease following its
termination by reason of Lessee's breach.
Lessor hereby Lessee hereto waive trial by jury in any action or
proceeding arising out of or relating to this Lease and the right to file
therein any cross-complaints, counterclaims against the other, other than
those which may be compulsory.
All remedies herein conferred shall be deemed cumulative and no one
exclusive of the other or of any other remedy conferred by law.
31. Waiver.
No covenant or condition of this Lease can be waived except by the
written consent of the Lessor or Lessee as appropriate, and forbearance or
indulgence by Lessor or Lessee in any regard whatsoever shall not
constitute a waiver of the covenant or condition to be performed by the
Lessee or Lessor to which the same may apply, and, until complete
performance by the Lessee or Lessor of said covenant or condition, the
Lessor or Lessee shall be entitled to any invoke any remedy available unto
it under this Lease or by law, despite said forbearance or indulgence. The
subsequent acceptance of Rent hereunder by Lessor shall not be deemed to be
a waiver of any preceding breach by Lessee of any term, covenant or
condition of this Lease, other than the failure of Lessee to pay the
particular Rent so accepted, regardless of Lessor's knowledge of such
proceeding breach at the time of acceptance of such Rent.
32. No Personal Liability of Lessor's Shareholders, et al.
Lessor, is a California unincorporated association doing business as a
real-estate investment trust. The trustees, officers, agents and employees
of Lessor have no power to bind its shareholders personally, and no
obligation of Lessor shall be binding personally upon its shareholders,
trustees, officers, agents, or employees. All persons dealing with Lessor,
its trustees, officers, agents, employees or representatives shall look
solely to Lessor's property for satisfaction of claims of any nature
arising in connection with the affairs of Lessor.
33. Successors and Assigns.
This Lease shall inure to the benefit of and be binding upon the
heirs, executors, administrators, successors and assigns of the respective
parties hereto, always providing that nothing in this Paragraph contained
shall impair any of the provisions hereinabove set forth inhibiting
assignment without the written consent of the Lessor.
34. Notice
Any notice, statement, demand, request, consent, approval,
authorization or designation required hereunder to be served upon either of
the parties hereto shall be sufficiently served upon the other party by
personal delivery or forty eight (48) hours after mailing the same,
registered or certified mail, return receipt requested, postage prepaid, or
Federal Express, addressed as set forth in Paragraph M, of the Basic Lease
Provisions, in the instance of Lessor, and to the Leased Premises in the
instance of the Lessee, or to such other address as may from time to time
be furnished in writing by Lessor to Lessee or by Lessee to Lessor or which
may be set forth in the Basic Lease Provisions.
35. Competition.
Lessee, or any individual, firm or corporation that controls Lessee or
is controlled by Lessee, shall not own, operate, or become financially
interested in a business similar to the one conducted on the Leased
Premises within five (5) miles in any direction from the Leased Premises,
the mileage measured on a straight-line basis on a map, not following
contours of the land and streets.
If Lessee defaults in performance under this Paragraph, Lessor can
elect to include the gross sales from such other business in the gross
sales made from or upon the Leased Premises for the purpose of computing
any Percentage Rent payable under this Lease.
36. Rent Control
The Rent and other terms of this Lease are the result of extensive
negotiations between Lessor and Lessee, both of whom have professional real
estate advice, and represent what both Lessor and Lessee have agreed are
fair and reasonable for similar properties in the area. In the event any
governmental body or agency should enact any regulation, ordinance or law
which would reduce the Rent herein provided and the Lessee upon the
enactment or at any time thereafter seeks to avail itself of the benefits
of such regulation, ordinance or law, then the Lessor may upon thirty (30)
days written notice to Lessee terminate this Lease and take possession of
the Leased Premises for Lessor's use or such other use as Lessor may wish
to make of the property. Nothing herein however shall require Lessee to
violate any statute or regulation which will subject Lessee to a fine or
penalty.
37. Quiet Enjoyment.
Lessor covenants and warrants that upon Lessee's paying the Rent and
observing and performing all of the terms, covenants and conditions to be
observed and performed by hereunder, Lessee may peaceably and quietly enjoy
the Leased Premises.
38. Signs, Auctions, Window.
Lessor covenants not place, construct or maintain on the glass panes
or supports of the windows of the Leased Premises, the doors, or the
exterior walls or roof of the building in which the Leased Premises are
located or any portion of the common and parking areas or any improvements
located thereon, or on any other area of the Shopping Center or on any
interior portion of the Leased Premises that may be visible from the
exterior of the Leased Premises, any signs, (including, but not limited to,
going out of business signs), advertisements, name, insignias, trademarks,
descriptive material or any other similar item, which does not otherwise
comply with Exhibit D, without Lessor's prior written consent issued
subjected to Lessor's sole discretion. All exterior signs installed by or
at the of expense of the Lessee shall be subject to Lessor's prior written
approval and shall comply with Exhibit D attached hereto. Lessee shall not,
without Lessor's prior written consent, place, construct or maintain on the
Leased Premises any advertising media including, but not limited to, search
lights, flashing lights, loud speakers, phonographs or other similar visual
or audio media. Lessee shall not without Lessor's prior written consent
solicit business in, on or about the common and parking areas or display or
sell merchandise outside the Leased Premises or permit to be conducted any
sale by auction in, on or about the Leased Premises, whether said action be
voluntary or involuntary, pursuant to any assignment, for the benefit of
creditors or pursuant to any bankruptcy other insolvency proceedings.
Lessee shall not place, construct, install or maintain any covering on the
inside or outside of the windows of the Leased Premises, without Lessor's
prior written consent.
39. Covenant of Continuous Operation.
Lessee shall continuously and uninterruptedly use the Leased Premises
for the uses specified in this Lease at least eight (8) hours per day every
day excepting Federal holidays. Further the Lessee shall maintain adequate
inventory and have an adequate number of personnel operating the Leased
Premises at all times to service and supply the requirements of Lessee's
customers and keep its Leased Premises in a neat, clean and orderly
condition. Lessee shall not lower the quality of its merchandise or change
the quality of its operations without Lessor's written consent. Lessee
shall employ its best efforts to operate its business on the Leased
Premises so as to produce maximum Gross Sales. For the purpose of
computing Percentage Rent, the Gross Sales for any period during which does
not conduct its business as required by this Paragraph and/or any other
provision in this Lease shall be deemed to be the greater of the Gross
Sales generated on the Leased Premises during that period, or the Gross
Sales generate during the corresponding period of the lease year in which
Lessee's highest Gross Sales were generated. If the Leased Premises are
destroyed or partially condemned and this Lease remains in full force and
effect, Lessee shall continue operation of its business at the Leased
Premises to the extent reasonably practical from the standpoint of good
business judgment during any period of reconstruction. Lessee shall not
use all or any portion of the Leased Premises for office, clerical, and
other non-selling purposes.
40. Security Deposit
As set forth in Paragraph J of the Basic Lease Provision, Lessee shall
pay a "Security Deposit" which will be held by the lessor to secure
performance under this Lease.
The Security Deposit shall not be mortgage, assigned, transferred or
encumbered by Lessee and any such act on the part of Lessee shall be
without force and effect and shall not be binding upon Lessor.
If any Rent or other sums due hereunder shall be overdue and unpaid or
should Lessor make payments on behalf of the Lessee or should Lessee fail
to perform any of the terms of this Lease, then Lessor may at its option
and without prejudice to any other remedy which Lessor may have, on account
thereof, appropriate and apply said Security Deposit or so much thereof as
may be necessary to compensate Lessor toward the payment of Rent or other
sums due Lessor or for the loss or damage sustained by Lessor due to such
breach on the part of Lease; Lessee shall within ten (10) days of demand
therefore restore said Security Deposit to the original sum deposited. In
the event Lessee fails to occupy the Leased Premises in accordance with the
terms of this Lease, Lessor's remedies shall include, without limitation
thereto, retention of all sums deposited herewith or otherwise paid
pursuant to this Lease. Further, the Lessor may apply the Security Deposit
to repair damages to the Leased Premises caused by the Lessee or to clean
the Leased Premises upon termination of this Lease. The Security Deposit
shall not bear interest nor shall Lessor be required to keep such sum
separate from its general funds. Should Lessee comply with all of said
terms and promptly pay all Rent and all other sums payable by Lessee when
due to Lessor, said Security Deposit shall be returned in full to Lessee,
(or, at Lessor's option, to the last assignee of Lessee's interest
hereunder) at the expiration of the term of this Lease.
In the event of bankruptcy or other debtor-creditor proceedings
against Lessee, such Security Deposit shall be deemed to be applied first
to the payment of Rent and other sums due Lessor for all periods prior to
the filing of such proceedings.
41. Late Charges.
Lessee hereby acknowledges that late payment by Lessee to Lessor of
Rent or other sums due hereunder shall cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges. Accordingly, if any installment of Rent
or any other sums due from Lessee shall not be received by Lessor or
Lessor's assignee within six (6) days after the date due, then Lessee shall
pay to Lessor a late charge equal to ten (10%) percent of such overdue
amount plus any attorney's fees incurred by Lessor by reason of Lessee's
failure to pay Rent and/or other sums when due hereunder. Any payment
postmarked by the 5th of the month shall be presumed to be mailed in a
timely manner. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the cost that Lessor will incur by reason
of the late payment by Lessee. Acceptance of such late charges by the
Lessor shall in no event constitute a waiver of Lessee's default with
respect to such overdue amounts, nor prevent Lessor from exercising any of
the other rights and remedies granted hereunder.
42. Environmental Matters
(a) Lessee's Covenants Regarding Hazardous Materials.
(1) Compliance with Environmental Laws. Lessee shall at its
sole cost and expense, at all times and in all comply with all federal,
state, local or regional laws, regulations ordinances or guidelines,
"Hazardous Materials Laws" concerning the management, use, handling,
generation, storage, transportation, presence, discharge or disposal of any
oil, petroleum products, carcinogens, reproductive toxins, flammable or
explosive materials, asbestos, pollutants, contaminants, urea formaldehyde,
Freon, or other radioactive, hazardous, toxic, or infectious wastes,
materials or substances, "Hazardous Materials". Lessee agrees not to
treat, dispose, release, handle, store, generate or install any Hazardous
Materials in or about the Leased Premises without Lessor's prior written
consent, issued subject to Lessor's sole discretion. Lessor may withdraw
its consent to such activities or the presence of any Hazardous Materials
at any time for any reason. Upon Lessor's withdrawal of consent to such
activities, Lessee shall remove those Hazardous Materials from and/or cease
those activities on the Leased Premises as are no longer permitted.
Lessor's refusal to consent or withdrawal of consent to activities
involving Hazardous shall not limit or affect any of Lessee's obligations
under this Lease. Lessee shall provide to Lessor upon execution of this
Lease a list of any Hazardous Materials which will be present at the Leased
Premises and copies of any and all Material Safety Data Sheets associated
therewith. Lessee shall update said list on a regular basis if any changes
occur in the types or amounts of such Hazardous Materials. Lessor shall
have the right to enter the Leased Premises from time to time to conduct
tests, inspections and surveys concerning Hazardous Materials and to
monitor Lessee's compliance with its obligations concerning Hazardous
Materials and Hazardous Materials Laws. Lessee is hereby advised that
there are certain notice requirements under Proposition 65, which may be
applicable to Lessee and Lessee should consult its counsel with respect to
its responsibilities therefor.
(2) Hazardous Materials Handling. Lessee shall at its own
expense procure, maintain in effect and comply with all conditions of any
and all permits, licenses and other governmental and regulatory approvals
required for Lessee's use of the Leased Premises. Lessee shall cause any
and all Hazardous Materials to be taken away or removed from the Leased
Premises and to be removed and transported solely by duly licensed haulers
to duly licensed facilities for final disposal of such materials and
wastes, and shall deliver to Lessor copies of any Uniform Hazardous Waste
Manifests associated with such disposal. Prior to expiration or earlier
termination of this Lease, Lessee shall cause all Hazardous Materials to be
removed from the Leased Premises and transported for use, storage or
disposal in accordance and in compliance with all applicable Hazardous
Materials Laws. Lessee shall not take any remedial action in response to
the presence of any Hazardous Materials in or about the Leased Premises,
nor enter into any settlement agreement; consent decree or other compromise
in respect to any claims relating to any Hazardous Materials or Hazardous
Materials Laws in any way connect with the Leased Premises, without first
notifying Lessor of Lessee's intention to do so and affording Lessor ample
opportunity to appear, intervene or otherwise appropriately assert and
protect Lessor's interest with respect thereto.
(3) Notices. Lessee shall immediately notify Lessor in writing
of: (i) any release or suspected release of Hazardous materials on, in,
under, about, from or around the Leased Premises, whether caused by Lessee
or any other person; (ii) any remedial or mitigation action Lessee
institutes or proposes with respect to any Hazardous Materials in any
Hazardous Materials in any way connected with the Leased Premises; (iii)
any enforcement, cleanup, removal, remedial or other governmental or
regulatory action instituted, completed or threatened pursuant to any
Hazardous Materials Laws; (iv) any claims made or threatened by any person
against Lessee, of the Leased Premises relating to damage, contribution,
cost recovery compensation, loss or injury resulting from or claimed to
result from any Hazardous Materials; and (v) any reports made to or by any
governmental agency or any lender arising out of or in connection with any
Hazardous Materials in or removed from the Leased Premises, including any
citizen's or agency complaints, notices, warnings or asserted violations in
connection therewith and any reports made by any environmental consultants
which pertain to the Leased Premises or the Property on which it is
located. Lessee shall also supply to Lessor as promptly as possible, and
in any event within five (5) business days after Lessee first receives or
sends the same, copies of all claims, reports, complaints, notices,
warnings or asserted violations relating in any way to the use or presence
of Hazardous Material on the Leased Premises.
(b) Indemnification of Lessor. Lessee shall indemnify, defend (by
counsel reasonably acceptable to Lessor), protect and hold Lessor, and each
of Lessor's trustee, shareholders, officers, employees, agents, attorneys,
successors and assigns, free and harmless from and against any and all
claims, liabilities, penalties, forfeitures, losses or expenses (including
attorneys' fees) for death of or injury to any person or damage to any
property whatsoever, arising from or caused in whole or in part, directly
or indirectly, by Lessee or its employees, agents, assignees, contractors,
subcontractors or others acting for or on behalf of Lessee (whether or not
their acts or omissions are negligent, intentional willful or unlawful) and
related to (A) the presence in, on, or, under, around or about the Leased
Premises or the discharge or release in or from the Leased Premises of any
Hazardous Materials due to the use, analysis, storage, transportation,
disposal, release, threatened release, discharge or generation of Hazardous
Materials to, in, on, under, around, about or from the Leased Premises, or
(ii) Lessee's failure to comply with any Hazardous Materials Laws. Lessee's
obligations hereunder shall include, without limitation, and whether
foreseeable or unforeseeable, all costs of any required or necessary
repair, cleanup or detoxification or decontamination of the Leased
Premises, and the preparation and implementation of any closure remedial
action or other required plans in connection therewith. Said obligations
shall survive the expiration or earlier termination of the term of this
Lease.
(c) Additional Insurance or Financial Capacity. If at any time it
reasonably appears to Lessor that Lessee is not maintaining sufficient
insurance or other means of financial capacity to enable Lessee to fulfill
its obligations to Lessor hereunder, regarding environmental matters,
whether or not then accrued, liquidated, conditional or contingent, Lessee
shall procure and thereafter maintain in full force and effect such
insurance or other form of financial assurance, with or from companies or
persons and in forms reasonably acceptable to Lessor, as Lessor may from
time to time reasonably request.
43. Merchants Association/Marketing Fund.
Lessee shall join and thereafter maintain, until the termination of
this Lease, membership in a nonprofit "Merchants Association" composed of
a majority of the occupants of the Shopping Center Bylaws of the Merchants'
Association shall be originally adopted by a majority vote of the members
of the Merchants' Association. Each member of the Merchants' Association
and Lessor shall have one (1) vote.
Such membership shall include the obligation of Lessee to pay
assessments, as determined by said Merchants' Association, and subject to
annual increases as determined by a majority vote of the Merchants'
Association, to cover the expense of all advertising and other activities
carried on by such Merchants' Association for the mutual benefit of its
members.
Lessee shall also pay to the Association on demand an initial
assessment, such sum shall be used for the purpose of defraying the
promotional expenses to be incurred by the Merchants' Association in
connection with Lessee's initial opening in the Shopping Center. Any
portion of such initial assessment not actually expended in connection with
such initial opening shall be retained by the Merchants' Association.
The provisions of this Lease shall prevail over any conflicting
provisions which may be contained in the articles, bylaws or regulations of
the Merchants' Association, and shall be deemed to be covenants for the
benefit of Lessor and said Merchants' Association and shall be enforceable
by each of them.
Should Lessor so elect, these provisions regarding a Merchants'
Association shall be replaced with the following provisions establishing a
"Marketing Fund" which will provide for monthly payments to the Lessor to
maintain a fund for promotion and marketing of the Shopping Center.
Lessor may establish a Marketing Fund for the Shopping Center.
Concurrently with each payment of Minimum Monthly Rent, as set forth in
Paragraph H of the Basic Lease Provisions, Lessee shall pay to Lessor a
"Monthly Marketing Charge", as set forth in Paragraph K of the Basic Lease
Provisions, prorated for any partial month of the term of this Lease.
Lessee hereby acknowledges that Lessor may not send monthly statements as a
condition to Lessee paying Monthly Marketing Charge due under this Lease.
Such Monthly Marketing Charge shall serve as Lessee's contribution towards
the Shopping Center's advertising, promotion and public relations,
including the administrative costs related thereto.
The Monthly Marketing Charge shall be increased by ten (10%) percent
every three (3) years. Lessee hereby agrees to pay such increase upon
notice from Lessor
Lessee further agrees to advertise Lessee's business operated from the
Leased Premises in any special publications sponsored by Lessor for
advertising by the Shopping Center Lessees at least twice during each lease
year.
Lessor shall maintain books and records of all contributions to and
expenditures from the Marketing Fund. Lessor may elect to contribute
special advertising or promotional items as well as all or part of the
services of a marketing director and staff and their respective offices,
compensation and expenses as a part of Lessor's contribution. Lessor shall
have the sole right and exclusive authority to hire, control, supervise and
discharge the marketing director and staff.
44. Lessor and Lessee.
The words "Lessor" and "Lessee" as used herein shall include the
plural as well as the singular, and the neuter shall include the masculine
and feminine genders, and if there be more than one lessee, the obligations
hereunder imposed upon the Lessee shall be joint and several.
45. Relationship of the Parties.
The relationship of the parties hereto is that of Lessor and Lessee,
and it is expressly understood and agreed that Lessor does not in any way
nor for any purpose become a partner of Lessee or joint venturer with
Lessee in the conduct of Lessee's business or otherwise, and that the
provisions of any agreement Lessor and Lessee, relating to Rent, are made
solely for the purpose of providing a method whereby the Rent payments are
to be measured and ascertained.
46. Severability.
If any term or provision of this Lease shall, to any extent, be
determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby,
and each term and provision of this Lease shall be valid and enforceable to
the fullest extent permitted by law; it is the intention of Lessor and
Lessee hereto that if any provision of this Lease is capable of two
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.
47. Quitclaim.
Where requested by the Lessor, at the expiration or earlier
termination of this Lease, Lessee shall execute acknowledge and deliver to
Lessor, within five (5) days after written request from Lessor to Lessee,
any quitclaim deed or other document required by any reputable title
company to remove the cloud of this Lease from the real property subject to
this Lease.
48. Other Payments to be Construed as Rent.
Failure of Lessee to pay taxes, insurance premiums, or any other
obligations of the Lessee under the terms of this Lease which can be
satisfied by the payment of money by the Lessee shall be deemed to be Rent
and shall carry the same consequences as failure to pay any installment of
Rent.
49. Headings and Utilities.
The marginal headings or titles to the paragraphs of this Lease are
not part of this Lease and shall have no effect upon the construction or
interpretation of any part of this Lease, but are intended for the
convenience of the parties only.
50. Conditions.
It is agreed between the parties hereto that all the agreements herein
contained on the part of the Lessee, whether technically covenants or
conditions, shall be deemed to be conditions at the option of the Lessor,
conferring upon the Lessor, in the event of breach of any of said
agreements, the right to terminate this Lease.
51. Jurisdiction.
Lessee hereby consents and agrees that the courts of the City, County
and State as set forth Paragraph E, of the Basic Lease Provisions, shall
have jurisdiction over its person in actions arising under or relating to
this Lessee, and Lessee agrees that any action brought by it arising out of
or relating to this Lease shall be filed in said County. Lessor and Lessee
agree that said City and County shall for all purposes be considered the
place in which this Lease was entered into, notwithstanding the order in
which, or the location or locations at which, it may have been executed or
delivered.
52. Time
Time is of the essence of this Lease and each and all of its
provisions.
53. Corporate Authority.
If Lessee is a corporation, Lessee shall deliver to Lessor on
execution of this Lease a certified copy of a resolution of its board of
directors authorizing the execution of this Lease and naming the officers
that are authorized to execute this Lease on behalf of the corporation.
54. Entire Agreement.
This instrument along with any exhibits and attachments hereto
constitutes the entire agreement between Lessor and Lessee relative to the
Leased Premises. Except as contained herein, no person purporting to hold
the authority to bind Lessor to any statement, covenant, warranty, or
representation shall be deemed to have such authority and Lessee agrees
that it is not reasonable for Lessee to have assumed that any person had or
has such authority. This agreement and the exhibits and attachments may be
altered amended, or revoked only by an instrument in writing signed by both
Lessor and Lessee. Lessor and Lessee agree hereby that all prior or
contemporaneous oral agreements between and among themselves and their
agents, including any leasing agent or lender, and representatives relative
to the leasing of the Premises are merged in or revoked by this agreement
55. No Reservation of Premises.
Submission of this Lease shall not be deemed to be a reservation of
the Leased Premises. This Lease is subject to the review and mutual
acceptance of the final terms, conditions and related documents by Lessor.
Lessor shall not be bound hereby until Lessor delivers to Lessee an
executed copy of this Lease for the Leased Premises signed by Lessor,
having already been signed by Lessee. Lessor reserves the right to exhibit
and lease the Leased Premises to other prospective Lessees until such time
as the delivery to of this executed Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the
day and year first above written.
LESSOR:
Western Investment Real Estate Trust, a
California unincorporated association doing
business as a real estate investment trust
Date: June 6, 1995 By: /s/
Its: Vice President, Legal
By: /s/
Its:
Pinecreek Shopping Center Associates, a
California limited partnership
By: Connolly Development Inc., General
Partner
By: /s/
Its: President
LESSEE:
Truckee River Bank, a California corporation,
doing business as Truckee River Bank
Date: 5/16/95 By: /s/ Martin Sorensen
Its: Pres/CEO
By:
Its:
FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM TO LEASE, is made and entered into this 17th day
of April 1995, by and between Western Investment Real Estate Trust, a
California unincorporated association doing business as a real estate
investment trust, and Pinecreek Shopping Center Association, a California
limited partnership, as "Lessor", and Truckee River Bank, a California
corporation, as "Lessee", collectively referred to as the "Parties".
WHEREAS, the Parties are bound by a lease agreement dated April 17,
1995, for those certain premises at the Pine Creek Shopping Center, the
"Shopping Center", located at 736 Taylorville Road, Suite D, in the City of
Grass Valley, County of Nevada., and State of California, the "Leased
Premises".
NOW THEREFORE, Lessee and Lessor hereby agree to the addition of
certain paragraph(s) to the Lease and the amendment and modification of
certain paragraphs of the Lease as follows:
FIRST OPTION TO EXTEND TERM
1. Lessee shall have the right to extend the initial term of this Lease
for a period of five (5) years upon the same terms and conditions as stated
in this Lease, except for Minimum Monthly Rent and except as set forth in
this First Option to Extend Term, the "First Option". Lessee may exercise
this right by written notification to Lessor not less than one hundred and
eighty (180) days prior to the expiration of the initial term of this Lease
provided that Lessee is not in default under the Lease at the time of the
exercise of the First Option or commencement of the First Option.
a. Lessee has not been in default beyond any cure period of any of
the provisions of this Lease during the initial term of this Lease; and
b. The First Option granted in this First Option to Extend Term is
personal to the original Lessee executing this Lease, and notwithstanding
anything to the contrary contained in this Lease, the First Option and the
rights contained in this First Option to Extend Term are not assignable or
transferable by such original Lessee; and
c. Lessee's net worth at the time of exercising this First Option,
as determined in accordance with generally accepted accounting principles,
is no less than Lessee's net worth at the Lease Commencement Date; and
d. Lessee is operating in the Leased Premises in a manner consistent
with the Shopping Center.
e. During the last twelve (12) months of the Lease Term immediately
preceding the date on which Lessee notifies Lessor of its intent to
exercise this First Option, Lessee shall have been obligated to pay and
shall have paid Lessor Percentage Rent in accordance with subsection (b) of
Paragraph 3 Rent.
2. Lessor grants the rights contained herein to Lessee in consideration
of Lessee's strict compliance with the provisions hereof, including,
without limitation, the manner of exercise of this First Option.
3. The Minimum Monthly Rent and escalations thereto during this First
Option, if exercised, shall be mutually agreed upon between Lessee and
Lessor prior to the thirtieth (30) day following the exercise of this First
Option, as hereinabove stated, at fair market rate which shall be the then
comparable rental rate for similar quality and location premises as
determined by Lessor. However, in no event shall the Minimum Monthly Rent,
payable during the term of this First Option, be less than the Minimum
Monthly Rent payable during the last year of the initial term of this
Lease, and the escalations shall in no event be less than five (5%) percent
annually. Upon failure of the parties to mutually agree upon a Minimum
Monthly Rent for the First Option within such period, each party shall
appoint an appraiser to determine the Minimum Monthly Rent. If either party
fails to select an appraiser, the one appraiser appointed shall set the
Minimum Monthly Rent within sixty (60) days. If the two appointed
appraisers cannot agree on the Minimum Monthly Rent, the two appraisers
shall appoint a third appraiser and the three appraisers shall set the
Minimum Monthly Rent within sixty (60) days. Agreement by any two
appraisers shall bind the parties as to the agreed fair market Minimum
Monthly Rent. If no two appraisers agree, the Minimum Monthly Rent shall
then be the average of the three appraisers' rent figures. Lessor and
Lessee shall each bear the cost of the appraiser they selected and one-half
of the cost of the third appraiser.
4. The Security Deposit, if any; shall be adjusted to the amount which is
the next higher five hundred ($500.00) dollar increment above one month's
Minimum Monthly Rent for the last year of the initial term of this Lease.
This amount shall be paid concurrently with the first Minimum Monthly Rent
payment of this First Option.
<PAGE>
SECOND ADDENDUM TO LEASE
THIS SECOND ADDENDUM TO LEASE, is made and entered into this 17th day
of April 1995, by and between Western Investment Real Estate Trust, a
California unincorporated association doing business as a real estate
investment trust, and Pinecreek Shopping Center Association, a California
limited partnership, as "Lessor", and Truckee River Bank, a California
corporation, as "Lessee", collectively referred to as the "Parties"
WHEREAS, the Parties are bound by a lease agreement and dated April
17, 1995, for those certain premises at the Pine Creek Shopping Center, the
"Shopping Center", located at 736 Taylorville Road, Suite D, in the City of
Grass Valley, County of Nevada, and State of California, the "Leased
Premises".
NOW THEREFORE, Lessee and Lessor hereby agree to the addition of
certain paragraph(s) to the Lease and the amendment and modification of
certain paragraphs of the Lease as follows:
SECOND OPTION TO EXTEND TERM
1. Lessee shall have the right to extend the term of this Lease for an
additional period of five (5) upon the same terms and conditions as stated
in this Lease, except for Minimum Monthly Rent and except as set forth in
this Second Option to Extend Term, the "Second Option". Lessee may
exercise this right by written notification to Lessor not less than one
hundred and eighty (180) days prior to the expiration of the term of the
First Option to Extend Term as set forth in the First Addendum to Lease, of
this Lease provided that:
a. Lessee has not been in default beyond any cure period of any of
the provisions of this Lease during the initial term and the term of the
First Option; and
b. The Second Option granted in this Second Option to Extend Term is
personal to the original Lessee executing this Lease, and notwithstanding
anything to the contrary contained in this Lease, the Second Option and the
rights contained in this Second Option to Extend Term are not assignable or
transferable by such original Lessee; and
c. Lessee's net worth at the time of exercising this Second Option,
as determined in accordance with generally accepted accounting principles,
is no less than Lessee's net worth at the commencement of the First Option
hereof; and
d. Lessee is operating in the Leased Premises in a manner consistent
with the Shopping Center.
e. During the last twelve (12) months of the Lease Term immediately
preceding the date on which Lessee notifies Lessor of its intent to
exercise this First Option, Lessee shall have been obligated to pay and
shall have paid Lessor Percentage Rent in accordance with subsection (b) of
Paragraph 3 Rent.
2. Lessor grants the rights contained herein to Lessee in consideration
of Lessee's strict compliance with the provisions hereof, including,
without limitation, the manner of exercise of this Second Option.
3. The Minimum Monthly Rent and escalations thereto during this Second
Option, if exercised, shall be mutually agreed upon between Lessee and
Lessor prior to the thirtieth (30th) day following the exercise of this
Second Option, as hereinabove stated, at fair market rate which shall be
the then comparable rental rate for similar quality and location premises
as determined by Lessor. However, in no event shall the Minimum Monthly
Rent, payable during the term of this Second Option, be less than the
Minimum Monthly Rent payable during the last year of the term of the First
Option, and the escalations shall in no event be less than five (5%)
percent annually. Upon failure of the parties to mutual agree upon a
Minimum Monthly Rent for the Second Option within such period, each party
shall appoint an appraiser to determine the Minimum Monthly Rent. If
either party fails to select an appraiser, the one appraiser appointed
shall set the Minimum Monthly Rent within sixty (60) days. If the two
appointed appraisers cannot agree on the Minimum Monthly Rent, the two
appraisers shall appoint a third appraiser and the three appraisers shall
set the Minimum Monthly Rent within sixty (60) days. Agreement by any two
appraisers shall bind the parties as to the agreed fair market Minimum
Monthly Rent. If no two appraisers agree, the Minimum Monthly Rent shall
then be the average of the three appraisers' rent figures. Lessor and
Lessee shall each bear the cost of the appraiser they selected and one-half
of the cost of the third appraiser.
4. The Security Deposit, if any, shall be adjusted to the amount which is
the next higher five hundred dollars and zero cents ($500.00) increment
above one month's Minimum Monthly Rent for the last year of the term of
this Second Option. This amount shall be paid concurrently with the first
rental payment of this Second Option.
<PAGE>
THIRD ADDENDUM TO LEASE
THIS THIRD ADDENDUM TO LEASE, is made and entered into this 17th day
of April 1995, by and between Western Investment Real Estate Trust, A
California unincorporated association doing business as a real estate
investment trust, and Pinecreek Shopping Center Association, a California
limited partnership as "Lessor" and Truckee River Bank, a California
corporation, as "Lessee", collectively referred to as the "Parties".
WHEREAS, the Parties are bound by a lease agreement and addendums
dated April 17, 1995, for those certain premises at the Pine Creek Shopping
Center, the "Shopping Center", located at 736 Taylorville Road, Suite D, in
the City of Grass Valley, County of Nevada, and State of California, the
"Leased Premises."
NOW THEREFORE, Lessee and Lessor hereby agree to the addition of
certain paragraph(s) to the Lease and the amendment and modification of
certain paragraphs of the Lease as follows:
THIRD OPTION TO EXTEND TERM
1. Lessee shall have the right to extend the term of this Lease for an
additional period of five (5) years upon the same terms and conditions as
stated in this Lease, except for Minimum Monthly Rent and except as set
forth in this Third Option to Extend Term, the "Third Option". Lessee may
exercise this right by written notification to Lessor not less than one
hundred and eighty (180) days prior to the expiration of the term of the
Second Option to Extend Term as set forth in the Second Addendum to Lease,
of this Lease provided that:
a. Lessee has not been in default beyond any cure period of any
of the provisions of this Lease during the initial term, the term of the
First Option and the term of the Second Option; and
b. The Third Option granted in this Third Option to Extend Term is
personal to the original Lessee executing this Lease, and notwithstanding
anything to the contrary contained in this Lease, the Third Option and the
rights contained in this Third Option to Extend Term are not assignable or
transferable by such original Lessee; and
c. Lessee's net worth at the time of exercising this Third Option,
as determined in accordance with generally accepted accounting principles,
is no less than Lessee's net worth at the commencement of the First Option
hereof, and
d. Lessee is operating in the Leased Premises in a manner consistent
with the Shopping Center.
e. During the last twelve (12) months of the Lease Term immediately
preceding the date on which Lessee notifies Lessor of its intent to
exercise this First Option, Lessee shall have been obligated to pay and
shall have paid Lessor Percentage Rent in accordance with subsection (b) of
Paragraph 3 Rent.
2. Lessor grants the rights contained herein to Lessee in consideration
of Lessee's strict compliance with the provisions hereof, including,
without limitation, the manner of exercise of this Third Option.
3. The Minimum Monthly Rent and escalations thereto during this Third
Option, if exercised, shall be mutually agreed upon between Lessee and
Lessor prior to the thirtieth (30th) day following the exercise of this
Third Option, as hereinabove stated, at fair market rate which shall be the
then comparable rental rate for similar quality and location premises as
determined by Lessor. However, in no event shall the less than the Minimum
Monthly Rent, payable during the term of this Third Option, be less than
the Minimum Monthly Rent payable during the last year of the term of the
First Option, and the escalations shall in no event be less than five (5%)
percent annually. Upon failure of the parties mutually agree upon a
Minimum Monthly Rent for the Third Option within such period, each party
shall appoint an appraiser to determine the Minimum Monthly Rent. If
either party fails to select an appraiser, the one appraiser appointed
shall set the Minimum Monthly Rent within sixty (60) days. If the two
appointed appraisers cannot agree on the Minimum Monthly Rent, the two
appraisers shall appoint a third appraiser and the three appraisers shall
set the Minimum Monthly Rent within sixty (60) days. Agreement by any two
appraisers shall bind the parties as to the agreed fair market Minimum
Monthly Rent. If no two appraisers agree, the Minimum Monthly Rent shall
then be the average of the three appraisers' rent figures. Lessor and
Lessee shall each bear the cost of the appraiser they selected and one-half
of the cost of the third appraiser.
4. The Security Deposit, if any, shall be adjusted to the amount which is
the next higher five hundred dollars and zero cents ($500.00) increment
above one month's Minimum Monthly Rent for the last year of the term of
this Third Option. This amount shall be paid concurrently with the first
rental payment of this Third Option.
5. Lessee shall have no other right to extend the Lease Term beyond this
Third Option.
<PAGE>
FOURTH ADDENDUM TO LEASE
THIS FOURTH ADDENDUM TO LEASE is made and entered into this 17th day
of April, 1995 by and between Western Investment Real Estate Trust a
California unincorporated association doing business as a real estate
investment trust, and Pinecreek Shopping Center Associates, a California
limited partnership, as "Lessor", and Truckee River Bank, a California
banking corporation, doing business as Truckee River Bank, as "Lessee",
collectively referred to as the "Parties".
WHEREAS, the Parties are bound by a lease agreement, first addendum to
lease and second addendum to lease and third addendum to lease dated April
17, 1995 , for those certain premises at the Pine Creek Shopping Center,
the "Shopping Center", located at 736 Taylorville Road, Suite D, in the
City of Grass Valley, County of Nevada, and State of California, the
"Leased Premises".
NOW THEREFORE, Lessee and Lessor hereby agree to the addition of
certain paragraph(s) to the Lease and modifications of certain paragraphs
of the Lease as follows:
C. Lessee:
The following is added as the last sentence of Paragraph C Lessee:
Truckee River Bank may amend its name and the Lease shall be
deemed so amended upon notice by Lessee of its new corporate/bank
name.
D. Lessee's Trade Name:
The following is added as the last sentence of Paragraph D. Lessee's
Trade Name:
Truckee River Bank may amend its name and the Lease shall be
deemed so amended upon notice by Lessee of its new corporate/bank
name.
L. Taxes, Insurance, and Common Area Maintenance:
The following sentence is hereby added as the last sentence of
Paragraph L. Taxes, Insurance, and Common Area Maintenance., of Basic
Lease Provisions.:
Initial Taxes, Insurance and Common Area Maintenance expense for
the most current period available is represented by Lessor to be
the aggregate sum of $0.28 per square foot of space leased. Any
increase in said amount shall be based upon proven increases in
taxes, insurance and common area maintenance.
1. Leased Premises and Use.
The words, "and under no other trade name" in the last sentence of
section (a) of Paragraph 1. Leased Premises and Use, located on the
second and third lines are deleted in their entirety:
3. Rent.
Subsections (b) Percentage Rent., is hereby deleted in its entirety.
The words "through 3 (c)," in the first sentence of subsection (d)
Definition of Rent., of
Paragraph 3. Rent., are hereby changed to "and 3 (c)"
5. Possession
The following paragraph is hereby added as the third paragraph of
Paragraph 5. Possession:
Lessee hereby acknowledges and agrees to accept possession of the
Leased Premises in its "As-Is" condition. Lessor acknowledges
that the term "as-is" includes, in good condition, of the
following items of personal property/fixtures: teller line,
vault, vault door, all cabinetry and existing bank equipment.
Lessee shall be responsible for returning said personal
property/fixtures at the conclusion of the Lease, subject to
reasonable wear and tear.
7. Assignment and Subletting.
The second paragraph of subsection (b) Reasonable Consent., of
Paragraph 7. Assignment and Subletting, is hereby deleted in its entirety,
and the following inserted in lieu thereof:
Lessor hereby acknowledges and agrees that Lessee may assign to any
financial institution that intends to merge with Lessee or acquire
substantially all of Lessee's assets, Truckee River Bank's interest as
Lessee in the lease so long as the merging or acquiring adheres to all
the provisions of the Lease, as modified by this Amendment. Still
further, Lessee is granted express authority to sublet a portion of
the Leased Premises for use by any subsidiary, division or affiliate
of Lessee for purposes related to the sale, lease or purchase of
products or services legally offered by a financial institution to
business or consumer customers.
Subsection (e) Transfer of Ownership., of Paragraph 7. Assignment and
Subletting, is hereby deleted in its entirety.
10. Prohibited Uses.
The second sentence of Paragraph 10 Prohibited Uses., starting with
the words, "Lessee shall not use" and ending with the words, "with then
granted or existing exclusives" located on lines eleven through thirteen is
hereby deleted in its entirety.
The last sentence of Paragraph 10 Prohibited Uses., starting with the
words, "If applicable and if requested by Lessor" and ending with the
words, "as Lessor may deem necessary" located on lines page eleven on lines
six through nine is hereby deleted in its entirety.
The following paragraph is hereby added as the second paragraph of
Paragraph 10. Prohibited Uses:
Without limiting nor broadening the foregoing, Lessor hereby
acknowledges and agrees that Lessee's use of the Leased Premises in
accordance with Paragraph F of the Basic Lease Provisions, shall not
be a violation, as set forth in this Paragraph 10, Prohibited Uses.
11. Alterations.
The last sentence of Paragraph 11. Alterations., starting with the
words, "The right of the Lessee to remove such equipment" and ending with
the words, "repair any damages to the Leased Premises caused by such
removal" is hereby deleted in its entirety and the following inserted in
lieu thereof:
From time to time Lessee may repair, replace, substitute and remove
its Lessee's furniture, equipment, fixtures, and machinery so long as
Lessee repairs any and all damage caused by said removal to the Leased
Premises.
14. Maintenance and Repair.
The word "replacement" in the first sentence of the first paragraph of
Paragraph 14. Maintenance and Repair., located on the fourth line is
hereby deleted in its entirety.
The word "replacement" in the sixth sentence of the first paragraph of
Paragraph 14.
Maintenance and Repair., located on the fifteenth line is hereby
deleted in its entirety.
The word "replace" in the first sentence of the last paragraph of
Paragraph 14. Maintenance and Repair., located on the second line is
hereby deleted in its entirety.
The following paragraph is hereby added as the last paragraphs of
Paragraph 14. Maintenance and Repair:
Lessor warrants the condition of all items described in this
paragraph for a period of six (6) months from the effective date
of the Lease to be in a clean and sanitary condition and in
proper repair and current maintenance. Should any system or item
not be in such condition during that six (6) month period, Lessor
shall repair same at Lessor's sole cost and expense. Except for
reasonable costs of maintenance and repair, Lessor does not deem
Lessee to be responsible for the cost arising from the failure of
major structural system(s), including but not limited to, floors,
walls, ceilings, the roof, water distribution or sewer systems,
electrical systems or natural gas systems.
18. Lessor's Right to Relocate the Leased Premises.
Paragraph 18. Lessor's Right to Relocate the Leased Premises., is
hereby deleted in its entirety.
19. Entry by Lessor.
The following is hereby added after the words "during the last ninety
(90) days of the term hereby created" in the first sentence of Paragraph
19. Entry by Lessor., located on the last line:
including options to renew.
The following is hereby added as the second sentence of Paragraph 19.
Entry by Lessor:
Lessor shall notify Lessee before entry into the leased Premises
so that Lessee may take reasonable steps to deactivate or disable
internal alarms and security measures. Lessor understands that
inspection of certain areas of the Leased Premises may have to be
in the presence of an officer of Lessee due to security reasons
and the nature of Lessee's business operations on the Leased
Premises.
25. Attorneys' Fees.
The following paragraph is hereby added as the fourth and fifth
paragraphs of Paragraph 25 Attorney's Fees:
Should Lessee become a party defendant to any litigation
concerning this Lease or any part of the Leased Premises by
reason of any act or omission of the Lessor and not because of
any act or omission of the Lessee, then Lessor shall indemnify,
protect, defend and hold Lessee harmless from all liability by
reason thereof and shall pay to Lessee all reasonable attorneys'
fees and costs incurred by Lessee in such litigation.
In addition, Lessor shall reimburse Lessee for any
attorney's fees or costs reasonably incurred by Lessee, whether
or not suit be instituted, with respect to any default of Lessor
under the terms of this Lease.
26. Holding Over.
The word "at twice the rent paid" in the first sentence of Paragraph
26. Holding Over., located in line 3 is hereby deleted in its entirety and
the following inserted in lieu thereof:
at one hundred ten (110%) percent the rent paid
33. Successors and Assigns.
Paragraph 33. Successors and Assigns is hereby deleted in its
entirety and the following inserted in lieu thereof: amended as follows:
The words "nothing in this Paragraph contained" in the first sentence
of Paragraph 33. Successors and Assigns, located on the second and
third lines shall be deleted and the words, nothing contained in this
Paragraph" shall be inserted in their place.
35. Competition.
Paragraph 35. Competition., is hereby deleted in its entirety.
39. Covenant Of Continuous Operation.
Paragraph 39. Covenant Of Continuous Operation., is hereby deleted in
its entirety and the following inserted in lieu thereof:
Lessee agrees, in compliance with applicable banking or other
laws, to remain open on each bank business day and to maintain a
fully operational branch during those hours of operations.
Lessee further agrees that the presence of an automatic teller
machine in the Leased Premises, in and of itself, shall not be
construed as the equivalent of continuous branch operations.
40. Security Deposit.
Paragraph 40. Security Deposit., is hereby deleted in its entirety.
56. Exclusive Use.
The following paragraph is hereby added as Paragraph 56. Exclusive
Use:
56. Exclusive Use.
As long as Lessee is not in default of this Lease and is
operating in accordance with the Use of Leased Premises, as set
forth in Paragraph F of the Basic Lease Provisions, Lessor agrees
not to lease space in the Shopping Center to any new lessees
whose primary business use would be a bank, savings and loan
institution, credit union or similar financial institution.
Lessee hereby acknowledges and agrees that the term bank and
savings and loan as used herein shall not be deemed to include
Household Finance, Beneficial, Commercial Credit, stock
brokerages, credit unions, mortgage companies, or any other uses
which are financially related. This exclusive does not apply to
any existing lessee prior to the execution of this Lease or any
future assignees thereof.
First Addendum to Lease - First Option to Extend Term
The words "one hundred and eighty (180) days" located on the fourth
line of Paragraph 1 of the First Addendum to Lease, First Option to
Extend Term, are hereby changed to "ninety (90) days".
Subsection (b) of Paragraph 1 of the First Addendum to Lease, First
Option to Extend Term, is hereby deleted in its entirety.
Subsection (e) of Paragraph 1 of the First Addendum to Lease, First
Option to Extend Term, is hereby deleted in its entirety.
Paragraph 4 of the First Addendum to lease, First Option to Extend
Term, is hereby deleted in its entirety.
Second Addendum to Lease - Second Option to Extend Term
The words " one hundred and eighty (180) days" located on the fourth
line of Paragraph 1 of the Second Addendum to Lease, First Option to
Extend Term, are hereby changed to "ninety (90) days".
Subsection (b) of Paragraph 1 of the Second Addendum to Lease, Second
Option to Extend Term, is hereby deleted in its entirety.
Subsection (e) of Paragraph 1 of the Second Addendum to Lease, Second
Option to Extend Term, is hereby deleted in its entirety.
Paragraph 4 of the Second Addendum to Lease, Second Option to Extend
Term, is hereby deleted in its entirety.
Third Addendum to Lease - Third Option to Extend Term
The words "one hundred and eighty (180) days" located on the fourth
line of Paragraph 1 of the Third Addendum to Lease, First Option to
Extend Term, are hereby changed to "ninety (90) days"
Subsection (b) of Paragraph 1 of the Third Addendum to Lease, Third
Option to Extend Term, is hereby deleted in its entirety.
Subsection (e) of Paragraph 1 of the Third Addendum to Lease, Third
Option to Extend Term, is hereby deleted in its entirety.
Paragraph 4 of the Third Addendum to Lease, Third Option to Extend
Term, is hereby deleted in its entirety.<PAGE>
EXHIBIT "A"
SITE PLAN
This Exhibit is a graphic of the shopping center wherein Leased Premises
are located.
<PAGE>
EXHIBIT "B"
COMMON AREA
This Exhibit is a graphic of the common areas related to the shopping
center wherein Leased Premises are located.
<PAGE>
EXHIBIT "C"
ACKNOWLEDGMENT OF COMMENCEMENT
ESTOPPEL AGREEMENT
LESSOR: Western Investment Real Estate Trust, a California
unincorporated association doing business as a
real estate investment trust, and Pine Creek
Shopping Center Associates, a California limited
partnership
LESSEE: Truckee River Bank, a California corporation,
doing business as Truckee River Bank
SHOPPING CENTER: Pine Creek Shopping Center, Grass Valley,
California
LOCATION OF PREMISES: 736 Taylorville Road
LEASE DATED: February 28, 1995
This is to certify:
1. That the undersigned Lessee occupies the Leased Premises commonly
known as 736 Taylorville Road, at Pine Creek Shopping Center,
City of Grass Valley, County of Nevada, State of California.
2. That the Lease term will commence on April 1, 1995.
3. That rent has been prepaid in the amount of $3,312.00 by Lessee
to Lessor.
4. That a Security Deposit has been paid in the amount of $0.00 by
Lessee to Lessor,
5. That as of this date hereof, the undersigned Lessee is entitled
to NO credit, offset of deduction in rent.
6. That all construction to be performed by Lessor is complete and
has been approved by Lessee.
7. That the undersigned Lessee claims no right, title or interest in
the above-described Leased Premises, or right to the possession
of said Leased Premises other than under the terms of said Lease,
and that there are no written or oral agreements affecting
tenancy other than the Lease.
LESSOR:
Western Investment Real Estate Trust, a
California unincorporated association doing
business as a real estate investment trust
Date: 7/19/95 By: /s/
Its: CFO
By: /s/
Its:
Pinecreek Shopping Center Associates, a
California limited partnership
By: Connolly Development Inc., General
Partner
By: /s/
Its: Vice Pres
LESSEE:
Truckee River Bank, a California corporation,
doing business as Truckee River Bank
Date: 6/28/95 By: /s/Martin Sorensen
Its: Pres/CEO
By:
Its:
<PAGE>
EXHIBIT "D"
SIGN CRITERIA
PINE CREEK SHOPPING CENTER
GRASS VALLEY, CALIFORNIA .
February 1, 1988
These criteria have been established for the purpose of maintaining a
continuity of quality and aesthetics throughout the Shopping Center for the
mutual benefit of all tenants and to comply with the regulations of the
City of Grass Valley. Conformance will be strictly enforced and any
installed non conforming or unapproved signs must be brought into
conformance at the expense of the Lessee.
I. GENERAL REQUIREMENTS - ALL SIGNS
A. Each Lessee shall submit or cause to be submitted to the Lessor
for approval, prior to fabrication, four (4) copies of detailed
drawings indicating the location, size, layout, design,
dimensions, colors, illumination, materials and method of
attachment of all signage.
B. All permits for signs and their installation shall be obtained
and paid to the City of Grass Valley by the Lessee or his
representative prior to fabrication and installation.
C. All signs shall be constructed and installed at the Lessee's
expense.
D. Lessee shall be responsible for the fulfillment of all
requirements and specifications, including those of the City of
Grass Valley.
E. All signs shall be reviewed for conformance with these criteria
and overall design quality. Approval or disapproval of sign
submittal based on aesthetics of design shall remain the right of
the Lessor or his authorized representative and the City of Grass
Valley.
F. Lessee shall be responsible for the installation and maintenance
of his sign. Should Lessee's sign require maintenance or repair,
Lessor shall give Lessee thirty (30) days written notice to
perform said maintenance or repair. Should Lessee fail to do
same, Lessor shall undertake repairs and Lessee shall reimburse
Lessor within ten (10) days from receipt of invoice.
II. SPECIFICATIONS - ALL SIGNS
All companies bidding to manufacture these signs are advised that no
substitutes will be accepted be Lessee whatsoever, unless so indicated
in the specifications and approved by the Lessor and Lessee. Any
deviation from these specifications may result in purchaser's refusal
to accept same.
All manufactures are advised that prior to acceptance and final
payment, each unit will be inspected for conformance by an authorized
representative of Lessor. Any signs found not in conformance will be
rejected and removed at Lessee's expense.
Lessee is required to have signs as shown on attached Exhibits D-1, D-
2, D-3, and D-4, installed and operable upon lease commencement date.
A. General Specifications
1. No animated, flashing or audible signs will be permitted.
2. No exposed lamps or tubing will be permitted.
3. All signs and their installation shall comply with all local
building codes, electrical codes and the City of Grass
Valley Sign Ordinance.
4. No portable signs will be permitted.
5. Grand opening or promotional sign shall comply with the City
of Grass Valley Sign Ordinance and be approved by Lessor
prior to installation.
6. No exposed raceways, crossovers or conduit will be
permitted.
7. All cabinets, conductors, transformers and other equipment
shall be concealed.
8. Painted lettering will not be permitted.
B. Location of Signs
1. All signs or devices advertising an individual use, business
or building shall be attached to the building at the
location directed by Lessor and in accordance with the sign
criteria.
III. DESIGN REQUIREMENTS
A. Canopy Sign (In-Line Shops)
Pertains to: Buildings 1, 3 (Spaces 1 and 2), 5, 6 (Spaces 2
and 3), 8 and Pad B
1. Individual Letter Sign
a. All Lessee signs shall be of individual letter construction,
mounted structurally, electrically, and individually on the
raceway as shown on Exhibit D-1 attached hereto. Sign
cabinets will not be permitted.
b. Each letter or numeral will be internally illuminated and
will be faced with plexiglass or similar material.
c. Maximum width shall be equal to eighty percent (80%) of the
lineal leased frontage except as noted in criteria A.l.d. In
any case, no sign shall be greater than fifty (50) lineal
feet wide.
d. Maximum sign width for Building 3, Space 1, shall not exceed
twenty (20) feet Further, the maximum width of signage for
Building 6, Spaces 2 and 3, and Building 8, Space 1, shall
not exceed twelve (12) feet for each named space.
e. Letter height shall be twenty-four (24") inches except for
Building 3, Space 1, where letter height shall be thirty-six
(36") inches. If Lessee's name cannot accommodate in that
size, smaller letters may be approved. Minimum acceptable
letter size shall be eighteen (18") inches.
f. Logos shall not exceed ten (10%) percent of sign area and
will be included in the allowable signage subject to
criteria A. l.c. and A. l.d. The maximum height of logos
shall be twenty-four (24") inches except for Building 3,
Space 1, where logos shall not exceed thirty-six (36")
inches.
g. Sign copy shall include minimal information only. The name
of the store shall be depicted on the sign.
h. Letter faces shall be 3/16" acrylic with 3/4" trimcap
retainers used at the perimeter. Trimcap color shall be
gold. Returns of individual letters shall be five (5")
inches. Colors shall be considered on a case by case basis
and may not duplicate the sign color used by adjacent stores
except at Lessor's discretion. Exterior color shall be
Dupont Duranodic #313 Dark Bronze.
i. Neon tubing shall be fifteen (15mm) millimeters.
B. Undercanopy Signs
1. Lessee shall install a non-illuminated Undercanopy sign in
accordance with Exhibit D-1 attached hereto. Said sign
shall be located as depicted on Exhibit D-1.
2. One (1) Undercanopy sign shall be allowed per Lessee.
C. Arcade Signs
Pertains to: Buildings 2, 3 (Space 3), 4, 6 (Space 1), 7 and
Future Major Tenants.
1. Individual Letter Sign
a. All signs shall be of individual letter construction,
mounted structurally, electrically and individually on
the raceway as shown on Exhibit D-2 attached hereto.
Sign cabinets will not be permitted.
b. Each letter or numeral will be in internally
illuminated and will be faced with plexiglass or
similar material.
c. Sign width shall not exceed the following:
Building 2 Thirty (30) feet
Building 3, Space 3 Twenty six (26) feet
Building 4 Twenty eight and one-half
(28.5) feet
Building 6, Space 1 Twenty (20) feet
Building 7 Forty one (41) feet
d. Letter height shall not exceed the following:
Building 2 Forty eight (48) inches
Building 3, Space 3 Twenty four (24) inches
Building 4 Sixty (60) inches
Building 6, Space 1 Thirty six (36) inches
Building 7 Twenty eight (28) inches
e. Logos shall not exceed ten (10%) percent of sign area
and will be included in the allowable signage subject
to criteria C.1.c. and C. 1.d. The maximum height of
logos shall not exceed that of sign letters as
specified in C. l.d.
f. Sign copy shall include minimal information only. The
name of the store shall be depicted on the sign.
g. Letter faces shall be 3/16" acrylic with 3/4' trimcap
retainers used at the perimeter. Trimcap color shall
be gold. Returns of individual letters shall be five
(5") inches. Colors shall be considered on a case by
case basis and may not duplicate the sign color used by
adjacent stores except at Lessor's discretion.
Exterior color shall be Dupont Duranodic #313 Dark
Bronze.
h. Neon tubing shall be fifteen (15mm) millimeters.
i. Signing for major tenants (5,000 square feet minimum
with five or more locations) will be considered on an
individual basis subject to Lessor's criteria and City
of Grass Valley ordinances.
D. Pad Signs - Walls
Pertains to: All pads except Pad B
1. Individual Letter Sign
a. All Lessee signs shall be of individual letter construction,
mounted structurally, electrically and individually on the
raceway as shown on Exhibit D-3 attached hereto. Sign
cabinets will not be permitted.
b. Each letter or numeral will be internally illuminated and
will be faced with plexiglass or similar material.
c. Sign size will be proportionate to the building or
development involved. The aggregate area of all signs on
the building shall not exceed two (2) square feet for each
lineal foot of frontage. Frontage shall be determined at
the entry and that portion of the establishment that abuts
on the street.
d. Letter height shall not exceed forty eight (48") inches. If
Lessee's name cannot be accommodated in that size, smaller
letters may be approved. Minimum acceptable letter size
shall be eighteen (18") inches.
e. Logos shall not exceed ten (10%) percent of the sign area
and will be included in the allowable signage subject to the
criteria D.1.c. and D.l.d. The maximum height of logos shall
be forty eight (48") inches.
f. Sign copy shall include minimal information only. The name
of the store shall be depicted on the sign.
g. Letter faces shall be 3/16" acrylic with 3/4" trimcap
retainers used at the perimeter. Trimcap color shall be
gold. Returns of individual letters shall be five (5")
inches. Colors shall be considered on a case by case basis
and may not duplicate the sign color used by adjacent stores
except at Lessor's discretion. Exterior colors shall be
Dupont Duranodic #313 Dark Bronze.
h. Neon tubing shall be fifteen (15mm) millimeters.
E. Pad Signs - Monument
Pertains to: All Pads except Pad B
1. Number is limited to one (1) per pad building.
2. Size may not exceed six (36) square feet for a single
face. Height shall be six (6) feet including the sign
base which shall be two (2) feet in height.
3. Construction shall be as shown on Exhibit D-4.
4. Minor variations to the specifications contained herein
will be considered on a case-by-case basis by the
Lessor when it is determined such consideration is in
the best interests of the Shopping center.
IV. CONSTRUCTION REQUIREMENT'S
A. All exterior signs shall be installed per the Exhibits attached.
Signs shall bear the UL label and comply with all required codes.
Exterior signs shall be secured by concealed fasteners, stainless
steel or nickel or cadmium plated.
B. Sign outlet will be provided by Lessor. Fluorescent lights,
tubes and time clocks shall be provided and installed by Lessee.
C. All exterior signs exposed to the weather shall be mounted at
least 3/4" from the building to permit proper direct and water
drainage.
D. All penetrations of the building structure required for sign
installation shall be neatly sealed and watertight.
E. No labels will be permitted on the exposed surface of signs
except those required by local ordinance and those shall be
placed in an inconspicuous location.
F. Sign contractor shall repair any damage to any work caused by his
work. Damage to structure that is not repaired by the sign
contractor shall become the Lessee's responsibility to correct.
G. Lessee shall be fully responsible for the operations of its sign
contractor.
V. GUARANTEE
A. Entire display shall be guaranteed for one (1) year from date of
instillation against defects in materials and workmanship.
Defective parts shall be replaced without charge.
VI. INSURANCE
A. Sign contractor shall carry workers' compensation and public
liability insurance against all damage suffered or done to any
and all persons and/or property while engaged in the construction
or erection to signs in tire amount of Five Hundred Thousand
Dollars ($500,000.00) combined single limit.
VII. INSTALLATION
A. Lessor reserves the right to hire an independent electrical
engineer (at Lessee's sole expense) to inspect the installation
of all Lessee signs and to require the Lessee to have any
discrepancies and/or code violations corrected at the Lessee's
expense.
VIII. HOURS OF OPERATION
A. Sign lighting will be operated by time clocks to be provided by
Lessee, Hours of illumination shall be mandated by Lessee's
Lease.
IX. MISCELLANEOUS REQUIREMENTS
A. Each Lessee shall be permitted to place upon each entrance of its
demised Premises not more than one hundred forty four (144)
square inches of vinyl, Scothcal #365A gold lettering not to
exceed two (2") inches in height, indicating hours of business,
emergency telephone numbers, etc.
B. Except as provided herein, no advertising placards, banners,
pennants, names, insignia, trademarks or other descriptive
material shall be affixed or maintained upon either the interior
or exterior of the glass panes and supports of the show windows
and doors, or upon the exterior wall of the building.
C. If Lessee has a non-customer door for receiving merchandise,
Lessee may have its name and address uniformly applied to said
door in such location directed by the Project Manager.
Application shall consist of black block letters which are two
(2") inches high. If more than one Lessee uses the same non-
customer door, each Lessee's name and address shall be applied to
said door.
D. At the expiration or sooner termination of Lessee's Lease term,
Lessee shall be required to remove his signs and patch the canopy
and fascia and paint the patched area to match the surrounding
areas.
X. COLORS
A. The following Plexiglass Brand colors are approved for use in all
Lessee signs. Additional colors are subject to Lessor's approval.
White #7328 Yellow #2325
Ivory #2146 Red #2793
Yellow #2037 Green #2108
Orange #2119 Black #2025
Blue #2114 Brown #2418
XI.. REMOVAL OF SIGN
A. If the fascia sign is removed for replacement or because of
termination of Lease, Lessee shall leave the reader board or
fascia in good condition, normal wear and tear excepted. Without
limitation, shall be specifically required to fill in, in a
professional manner, any holes in the fascia panel caused by
removal of the sign and conduit, and, if necessary, shall pay for
any painting and/or waterproofing that is necessary to repair
said work and to remove sign or "shadows".
<PAGE>
EXHIBIT "D-1"
In-Line Shops Sign Criteria
This Exhibit is a graphic which includes specifications as to the height
and width of acceptable signs. This Exhibit also sets forth the materials
from which the sign is to be made.
<PAGE>
EXHIBIT "D-2"
Major Tenant and Arcade Sign Criteria
This Exhibit is a graphic which includes specifications as to the height
and width of acceptable signs for Buildings 2, 3 (space 3), 4, Building 4
(space 1) and 7.
<PAGE>
EXHIBIT "D-3"
Pad Bldg. Tenant Sign Criteria
This Exhibit is a graphic which includes specifications as to the height
and width of acceptable signs for a "Pad Building".
<PAGE>
EXHIBIT "D-4"
Monument Sign Criteria; Pad Buildings
This Exhibit is a graphic which includes specifications as to the height
and width of acceptable signs for a monument sign (one per Pad Building).
<PAGE>
EXHIBIT "C"
ACKNOWLEDGMENT OF COMMENCEMENT
ESTOPPEL AGREEMENT
LESSOR: Western Investment Real Estate Trust, a California
unincorporated association doing business as a
real estate investment trust, and Pine Creek
Shopping Center Associates, a California limited
partnership
LESSEE: Truckee River Bank, a California corporation,
doing business as Truckee River Bank
SHOPPING CENTER: Pine Creek Shopping Center, Grass Valley,
California
LOCATION OF PREMISES: 736 Taylorville Road
LEASE DATED: April 17, 1995
This is to certify:
1. That the undersigned Lessee occupies the Leased Premises commonly
known as 736 Taylorville Road, Suite D, at Pine Creek Shopping
Center, City of Grass Valley, County of Nevada, State of
California.
2. That the Lease term will commence on April 17, 1995.
3. That rent has been prepaid in the amount of $3,312.00 by Lessee
to Lessor.
4. That a Security Deposit has been paid in the amount of $0.00 by
Lessee to Lessor.
5. That as of this date hereof, the undersigned Lessee is entitled
to NO credit, offset of deduction in rent.
6. That all construction to be performed by Lessor is complete and
has been approved by Lessee.
7. That the undersigned Lessee claims no right, title or interest in
the above-described Leased Premises, or right to the possession
of said Leased Premises other than under the terms of said Lease,
and that there are no written or oral agreements affecting
tenancy other than the Lease.
LESSOR:
Western Investment Real Estate Trust, a
California unincorporated association
doing business as a real estate
investment trust
Date: By:
Its:
By:
Its:
Pinecreek Shopping Center Associates, a
California limited partnership
Date: By: Connoly Development Inc., General
Partner
By:
Its:
LESSEE:
Truckee River Bank, a California
corporation, doing business as Truckee
River Bank
Date: By:
Its:
By:
Its:
Exhibit 11
Sierra Tahoe Bancorp and Subsidiaries
Computation of Earnings Per Common Share
(Amounts in thousands except per share amounts)
<TABLE>
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
6/30/95 6/30/94 6/30/95 6/30/94
<S> <C> <C> <C> <C>
Primary
Net income $ 436 $ 594 $ 964 $ 1,107
Shares
Weighted average number
of common shares
outstanding 2,610 2,591 2,615 2,591
Assuming exercise of options
reduced by the number of
shares which could have
been purchased with the
proceeds from exercise of
such options 74 67 71 61
Weighted average number of
common shares outstanding
as adjusted 2,684 2,658 2,686 2,652
Net income per share $ 0.16 $ 0.22 $ 0.36 $ 0.42
Assuming full dilution
Earnings $ 436 $ 594 $ 964 $ 1,107
Add after tax interest expense
applicable to convertible
debentures 125 128 250 202
Net income $ 561 $ 722 $ 1,214 $ 1,309
Shares
Weighted average number of
common shares outstanding 2,610 2,591 2,615 2,591
Assuming conversion of
convertible debentures 1,000 1,041 1,000 830
Assuming exercise of options
reduced by the number of shares
which could have been purchased
with the proceeds from exercise
of such options 86 83 78 74
Weighted average number of common
shares outstanding as adjusted 3,696 3,715 3,693 3,495
Net income per share assuming full
dilution $ 0.15 $ 0.19 $ 0.33 $ 0.37
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 16802
<INT-BEARING-DEPOSITS> 198
<FED-FUNDS-SOLD> 10800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 23622
<INVESTMENTS-CARRYING> 3584
<INVESTMENTS-MARKET> 3562
<LOANS> 200748
<ALLOWANCE> 3522
<TOTAL-ASSETS> 283550
<DEPOSITS> 241892
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2853
<LONG-TERM> 10000
<COMMON> 10567
0
0
<OTHER-SE> 18238
<TOTAL-LIABILITIES-AND-EQUITY> 283550
<INTEREST-LOAN> 10730
<INTEREST-INVEST> 832
<INTEREST-OTHER> 173
<INTEREST-TOTAL> 11735
<INTEREST-DEPOSIT> 3113
<INTEREST-EXPENSE> 3555
<INTEREST-INCOME-NET> 8180
<LOAN-LOSSES> 590
<SECURITIES-GAINS> (41)
<EXPENSE-OTHER> 10139
<INCOME-PRETAX> 1532
<INCOME-PRE-EXTRAORDINARY> 964
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 964
<EPS-PRIMARY> .36
<EPS-DILUTED> .33
<YIELD-ACTUAL> 7.50
<LOANS-NON> 2847
<LOANS-PAST> 1917
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3546
<CHARGE-OFFS> 657
<RECOVERIES> 43
<ALLOWANCE-CLOSE> 3522
<ALLOWANCE-DOMESTIC> 3522
<ALLOWANCE-FOREIGN> 0
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</TABLE>
