** **

**Exhibit 10.18**

 

**LEASE**

 

 

 

 

1670 South Broadway

Santa Maria, California

 

 

 

By and Between

 

RICHARD C. BLAKE and

MISSION COMMUNITY BANK, a California corporation

 

 

 

 

 

Diehl & Rodewald

1043 Pacific Street

San Luis Obispo, CA  93401

 

 

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**TABLE OF CONTENTS**

 
| 1.     | Definitions                                  | 1      |
|--------|----------------------------------------------|--------|
|   |                                         |   |
| 2.     | Lease                                        | 2      |
|   |                                         |   |
| 3.     | Term of Lease                                | 2      |
|   |                                         |   |
| 4.     | Option to Extend                             | 2      |
|   |                                         |   |
| 5.     | Minimum Monthly Rent                         | 2      |
|   |                                         |   |
| 6.     | Rent on Extended Terms                       | 2      |
|   |                                         |   |
| 7.     | Use/Hazardous  Substance/Compliance With Law | 4      |
|   |                                         |   |
| 8.     | Utilities                                    | 6      |
|   |                                         |   |
| 9.     | Taxes                                        | 6      |
|   |                                         |   |
| 10.    | Condition of Premises                        | 8      |
|   |                                         |   |
| 11.    | Repairs and Maintenance                      | 8      |
|   |                                         |   |
| 12.    | Alterations                                  | 10     |
|   |                                         |   |
| 13.    | Entry                                        | 11     |
|   |                                         |   |
| 14.    | Surrender of Premises;  Holding Over         | 11     |
|   |                                         |   |
| 15.    | Indemnity                                    | 11     |
|   |                                         |   |
| 16.    | Insurance                                    | 12     |
|   |                                         |   |
| 17.    | Trade Fixtures                               | 14     |
|   |                                         |   |
| 18.    | Signs                                        | 15     |
|   |                                         |   |
| 19.    | Damage and Destruction                       | 15     |
|   |                                         |   |
| 20.    | Condemnation                                 | 16     |
|   |                                         |   |
| 21.    | Assignment and Subletting                    | 17     |
|   |                                         |   |
| 22.    | Default                                      | 18     |
|   |                                         |   |
| 23.    | Remedies                                     | 19     |
|   |                                         |   |
| 24.    | Late Charge                                  | 21     |
|   |                                         |   |
| 25.    | Default Interest                             | 21     |
|   |                                         |   |
| 26.    | Waiver of Breach                             | 21     |
|   |                                         |   |
| 27.    | Estoppel Certificates                        | 21     |
|   |                                         |   |
| 28.    | Attorney Fees                                | 22     |
|   |                                         |   |
| 29.    | Hazardous Substance  Conditions              | 22     |
|   |                                         |   |
| 30.    | Security Deposit                             | 23     |
|   |                                         |   |
| 31.    | Warranty of Authority                        | 23     |
|   |                                         |   |
| 32.    | Notices                                      | 23     |

 

 

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|   |                    |   |
|--------|-------------------------|--------|
| 33.    | Heirs and Successors    | 24     |
|   |                    |   |
| 34.    | Partial Invalidity      | 24     |
|   |                    |   |
| 35.    | Entire Agreement        | 24     |
|   |                    |   |
| 36.    | Time of Essence         | 24     |
|   |                    |   |
| 37.    | Rent                    | 24     |
|   |                    |   |
| 38.    | Amendments              | 24     |
|   |                    |   |
| 39.    | Subordination           | 24     |
|   |                    |   |
| 40.    | Right of First Offer    | 25     |
|   |                    |   |
| 41.    | Merger                  | 25     |
|   |                    |   |
| 42.    | Option to Purchase.     | 25     |
|   |                    |   |
| 43.    | Landlord’s Entry   | 26     |
|   |                    |   |
| 44.    | Governing Law           | 26     |
|   |                    |   |
| 45.    | Memorandum of Lease     | 26     |
|   |                    |   |
| 46.    | Regulator  Requirements | 26     |
|   |                    |   |

 

 

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**LEASE**

 

                This Lease (“Lease”) is entered into as of March 1,2008, between RICHARD C. BLAKE (“Landlord”) and MISSION COMMUNITY BANK, aCalifornia corporation (“Tenant”)

 

**Recitals**

 

                A.  Landlord isthe owner of certain land, building, and improvements located in Santa Maria,California, generally described as a commercial building located at 1670 SouthBroadway, and more particularly described in attached Exhibit “A” (“Premises”).

 

                B.  Landlorddesires to lease to Tenant and Tenant desires to lease from Landlord thePremises on the terms and conditions in this Lease.

 

                For good and valuable consideration, the partiesagree as follows:

 

1.                           **Definitions****.**  As used in this Lease the following termsshall have the following definitions:

 

**                Adjustment Date** is defined in Section 5.

 

**                Commencement Date** is defined in Section 3.

 

**                Extended Term** is defined in Section 4.

 

**                Event of Default** is defined in Section 22.

 

**                Hazardous Substance** is defined in Section 7.c.

 

**                Initial Monthly Rent** is defined in Section 5.a.

 

**                Landlord** is defined in the preamble of this Lease.

 

**                Lease** is defined in the preamble of this Lease.

 

**                Minimum Monthly Rent** is defined in Section 5.a.

 

**                Option Notice** is defined in Section 4

 

**                Premises** is defined in Recital A.

 

**                Reportable Use** is defined in Section 7.c.

 

**                Tenant** is defined in the preamble of this Lease.

 

**                Term** is defined in Section 3.

 

                **Termination Date**is defined in Section 3.

 

 

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**                Trade Fixture** is defined in Section 17.a.

 

2.                           **Lease****.**  Landlord leases to Tenant and Tenant leasesfrom Landlord the Premises on the terms and conditions in this Lease.

 

3.                           **Term of Lease****.**  The initial term of this Lease (“Term”) shallbe for five (5) years commencing on March 1, 2008 (“Commencement Date”),and ending on February 28, 2013, unless sooner terminated pursuant to theterms of this Lease (“Termination Date”).

 

4.                           **Option to Extend****.**  Tenant is given two (2) separate andconsecutive options to extend the Term on all of the provisions contained inthis Lease, except for the Minimum Monthly Rent and Option to Purchase (Section 42),each for a five (5) year period (“Extended Term”) following expiration ofthe initial Term or Extended Term, by giving notice of exercise of the option (“OptionNotice”) to Landlord at least six (6) months, but not more than one (1) yearbefore the expiration of the Term or Extended Term.  Provided that if Tenant is in default on thedate of giving the Option Notice, the Option Notice shall be totallyineffective, or if Tenant is in default on the date any Extended Term is tocommence, provided that Landlord has given Tenant prior written notice of suchdefault, the Extended Term shall not commence and this Lease shall expire atthe end of the initial Term or then-current Extended Term.  The First Extended Term shall refer to theperiod of March 1, 2013 through February 28, 2018.  The Second Extended Term shall refer to theperiod of March 1, 2018 through February 28, 2023.

 

Tenantshall have no other right to extend the Term beyond February 28, 2023.

 

5.                           **Minimum****Monthly Rent.**

 

a.             For the period commencing March 1,2008, and ending February 28, 2009, the minimum monthly rental shall beEight Thousand Six Hundred Seventy-nine Dollars ($8,679.00) (Initial MonthlyRent and as adjusted from time to time, Minimum Monthly Rent).  The Minimum Monthly Rent shall be payable inadvance not later than the fifth (5th) business day of each month.  The payment shall be made by electronictransfer into Landlord’s account at Mission Community Bank, 581 Higuera Street,San Luis Obispo, California, Account No. 001 819313, or by electronictransfer or other method as Landlord may from time to time designate by writtennotice to Tenant.

 

TheMinimum Monthly Rent shall be adjusted annually as of March 1 (“AdjustmentDate”) to  one hundred three percent(103%) of the Minimum Monthly Rent in effect immediately prior to theAdjustment Date (without regard to any temporary abatement of rental then orpreviously in effect pursuant to the provisions of this Lease.

 

6.                           **Rent on Extended Terms****.**

 

a.             Rent on First Extended Term.  The Minimum Monthly Rent at the commencementof the First Extended Term shall be one hundred three percent (103%) 

 

 

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of theMinimum Monthly Rent in effect immediately prior to the extension date.  Thereafter, on each year’s anniversary date duringthe First Extended Term, the Minimum Monthly Rent shall be one hundred threepercent (103%) of the Minimum Monthly Rent in effect immediately prior to theanniversary date.

 

b.             Rent on Second Extended Term.  The parties shall have thirty (30) days afterLandlord receives the Option Notice for the Second Extended Term in which toagree on Minimum Monthly Rent during the Second Extended Term.  If the parties agree on the Minimum MonthlyRent for the Second Extended Term during that period, they shall immediatelyexecute an amendment to this Lease stating the Minimum Monthly Rent.

 

If theparties are unable to agree on the Minimum Monthly Rent for the Second ExtendedTerm within that period, then within ten (10) days after the expiration ofthat period each party, at its cost and by giving notice to the other party,shall appoint an M.A.I. real estate appraiser or licensed real estate brokerwith at least ten (10) years’ full-time commercial appraisal or commercialreal estate experience in northern Santa Barbara or San Luis Obispo County andset the Minimum Monthly Rent for the Second Extended Term.  If a party does not appoint an appraiserwithin ten (10) days after the other party has given notice of the name ofits appointee, the single appointee shall set the Minimum Monthly Rent for theSecond Extended Term.  If the twoappraisers/brokers are appointed by the parties as stated in this paragraph,they shall meet promptly and attempt to set the Minimum Monthly Rent for theSecond Extended Term.  If they are unableto agree within thirty (30) days after the second appraiser/broker has beenappointed, they shall attempt to elect a third appraiser who must be an M.A.I.appraiser with at least ten years of commercial appraisal experience innorthern Santa Barbara or San Luis Obispo Counties within ten (10) daysafter the last day the two appraisers/brokers are given to set the MinimumMonthly Rent.  If they are unable toagree on the third appraiser/broker, either of the parties to this Lease bygiving ten (10) days’ notice to the other party can file a petition withthe American Arbitration Association solely for the purpose of selecting athird appraiser who meets the qualifications stated in this paragraph.  Each party shall bear half the cost of theAmerican Arbitration Association appointing the third appraiser and of payingthe third appraiser’s fee.  The thirdappraiser, however selected, shall be a person who has not previously acted inany capacity for either party.

 

Withinthirty (30) days after the selection of the third appraiser, a majority of theappointees shall set the Minimum Monthly Rent for the Second ExtendedTerm.  If a majority of the appointeesare unable to set the Minimum Monthly Rent within the stipulated period oftime, the three appraisals shall be added together and their total divided bythree; the resulting quotient shall be the Minimum Monthly Rent for thePremises during the Second Extended Term.

 

Insetting the Minimum Monthly Rent for the Second Extended Term, theappraiser/broker shall consider the highest and best commercial/retail use asallowed by the current zoning ordinance for the Premises without regard to therestriction on use of the Premises contained in this Lease.  The appraisal shall be on the basis of atriple net lease.

 

 

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In noevent, shall the rent on the Second Extended Term be less than the rentdetermined in accordance with Section 5 as of the last day of the InitialTerm or then-current Extended Term.  Therent determined in accordance with this paragraph shall thereafter, on eachyear’s anniversary date during the Second Extended Term, be adjusted to onehundred three percent (103%) of the Minimum Monthly Rent in effect immediatelyprior to the Adjustment Date.

 

7.                           **Use/Hazardous Substance/Compliance WithLaw****.**

 

a.             Tenant will occupy and use thePremises for a retail banking business and all other operations incident to theconduct of the business, and Tenant agrees not to use the Premises for anyimmoral or unlawful purpose.  Landlordagrees that, subject to Section 18 and to the prior reasonable review andapproval by Landlord and compliance with all applicable governmentalrequirements and restrictions recorded prior to the date of this Lease, Tenantmay erect and maintain on the Premises and the building and improvements anysigns advertising Tenant’s business, as Tenant may desire.

 

b.             Tenant shall not commit any acts onthe Premises, nor use the Premises in any manner that will increase theexisting rates for or cause the cancellation of any fire, liability, or otherinsurance policy insuring the Premises or the improvements on thePremises.  Tenant shall, at Tenant’s owncost and expense, comply with all requirements of Landlord’s insurance carriersthat are necessary for the continued maintenance at reasonable rates ofreplacement cost fire and comprehensive general liability insurance policies onthe Premises and the improvements on the Premises.

 

c.             The term “Hazardous Substance” asused in this Lease shall mean any product, substance, chemical, material orwaste whose presence, nature, quantity and/or intensity of existence, use,manufacture, disposal, transportation, spill, release or effect, either byitself or in combination with other materials expected to be on the Premises,is either:  (i) potentiallyinjurious to the public health, safety or welfare, the environment or thePremises, (ii) regulated or monitored by any governmental authority, or (iii) abasis for liability of Landlord to any governmental agency or third party underany applicable statute or common law theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,petroleum, gasoline, crude oil or any products, byproducts or fractionsthereof.  Tenant shall not engage in anyactivity in, on or about the Premises which constitutes a Reportable Use (ashereinafter defined) of Hazardous Substances without the express prior writtenconsent of Landlord and compliance in a timely manner (at Tenant’s sole costand expense) with all applicable law.  “ReportableUse” shall mean (i) the installation or use of any above or below groundstorage tank, (ii) the generation, possession, storage, use,transportation, or disposal of a Hazardous Substance that requires a permitfrom, or with respect to which a report, notice, registration or business planis required to be filed with, any governmental authority.  Reportable Use shall also include Tenant’sbeing responsible for the presence in, on or about the premises of a HazardousSubstance with respect to which any applicable law requires that a notice begiven to persons entering or occupying the Premises or neighboringproperties.  Notwithstanding theforegoing, Tenant may, without Landlord’s prior consent, but in compliance withall applicable law, use any ordinary and customary materials reasonablyrequired to be used by Tenant in the normal course of Tenant’s businesspermitted on the 

 

 

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Premises,so long as such use is not a Reportable Use and does not expose the Premises orneighboring properties to any meaningful risk of contamination or damage orexpose Landlord to any liability therefor. In addition, Landlord may (but without any obligation to do so)condition his consent to the use or presence of any Hazardous Substance,activity or storage tank by Tenant upon Tenant’s giving Landlord suchadditional assurances as Landlord, in his reasonable discretion, deemsnecessary to protect himself, the public, the Premises and the environmentagainst damage, contamination or injury and/or liability therefrom or therefor,including, but not limited to, the installation (and removal on or before Leaseexpiration or earlier termination) of reasonably necessary protectivemodifications to the Premises (such as concrete encasements) and/or the depositof an additional security deposit under Paragraph 30 hereof.

 

d.             If Tenant knows, or has reasonablecause to believe, that a Hazardous Substance, or a condition involving orresulting from same, has come to be located in, on, under or about thePremises, other than as previously consented to by Landlord, Tenant shallimmediately give written notice of such fact to Landlord.  Tenant shall also immediately give Landlord acopy of any statement, report, notice, registration, application, permit,business plan, license, claim, action or proceeding given to, or received from,any governmental authority or private party, or persons entering or occupyingthe Premises, concerning the presence, spill, release, discharge of, orexposure to, any Hazardous Substance or contamination in, on, or about thePremises, including but not limited to all such documents as may be involved inany Reportable Uses involving the Premises.

 

e.             Tenant shall indemnify, protect,defend and hold Landlord, his agents, employees, lenders and the Premises,harmless from and against any and all loss of rents and/or damages,liabilities, judgments, costs, claims, liens, expenses, penalties, permits andattorney’s and consultant’s fees arising out of or involving any HazardousSubstance or storage tank brought onto the Premises by or for Tenant or underTenant’s control.  Tenant’s obligationsunder this paragraph shall include, but not be limited to, the effects of anycontamination or injury to person, property or the environment created orsuffered by Tenant, and the cost of investigation (including consultant’s andattorney’s fees and testing), removal, remediation, restoration and/orabatement thereof, or of any contamination therein involved, and shall survivethe expiration or earlier termination of this Lease.  No termination, cancellation or releaseagreement entered into by Landlord and Tenant shall release Tenant from itsobligations under this Lease with respect to Hazardous Substances or storagetanks, unless specifically so agreed by Landlord in writing at the time of suchagreement.

 

f.              Except as otherwise provided inthis Lease, Tenant shall, at Tenant’s sole cost and expense, fully, diligentlyand in a timely manner comply with all “Applicable Law,” which term is used inthis Lease to include all laws, rules, regulations, ordinances, directives,covenants, easements and restrictions of record, permits, the requirements ofany applicable fire insurance underwriter or rating bureau, and therecommendations of Landlord’s engineers and/or consultants, relating in anymanner to the Premises (including but not limited to matters pertaining to (i) industrialhygiene, (ii) environmental condition on, in, under or about the Premises,including soil and groundwater conditions,

 

 

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(iii) the use,generation, manufacture, production, installation, maintenance, removal,transportation, storage, spill or release of any Hazardous Substance or storagetank), (iv) seismic retrofitting, (v) fire suppression requirements,and (vi) Americans With Disabilities Act accommodations, now in effect orwhich may hereafter come into effect, and whether or not reflecting a change inpolicy from any previously existing policy. Tenant shall, within five (5) days after receipt of Landlord’swritten request, provide Landlord with copies of all documents and information,including but not limited to permits, registrations, manifests, applications,reports and certificates, evidencing Tenant’s compliance with any ApplicableLaw specified by Landlord, and shall immediately upon receipt, notify Landlordin writing (with copies of any documents involved) of any threatened or actualclaim, notice, citation, warning, complaint or report pertaining to orinvolving failure by Tenant or the Premises to comply with any Applicable Law.

 

g.                                      Subject to the requirements of paragraph 46, Landlord and Landlord’slenders shall have the right to enter the Premises at any time, in the case ofan emergency, and otherwise at reasonable times, for the purpose of inspectingthe condition of the Premises and for verifying compliance by Tenant with thisLease and all Applicable Laws (as defined in Paragraph 7.f) and to employexperts and/or consultants in connection therewith and/or to advise Landlordwith respect to Tenant’s activities, including but not limited to theinstallation, operation, use, monitoring, maintenance, or removal of anyHazardous Substance or storage tank on or from the Premises.

 

8.                                                                                       **Utilities****.**  Duringthe Term, Tenant shall pay, before delinquency, all charges or assessments fortelephone, water, sewer, gas, heat, electricity, garbage disposal, trashdisposal, CATV, and all other utilities and services of any kind that may beused on the Premises.

 

9.                                                                                       **Taxes****.**

 

a.                                       Subject to the terms of Section 9(d), Tenant shall pay to thepublic authorities charged with the collection on or before the last day onwhich payment may be made without penalty or interest, or ten (10) daysafter receipt of the tax bill, whichever is later, as additional rent, alltaxes; and permit, inspection, and license fees; and other public charges ofwhatever nature that are assessed against the Premises or arise because of theoccupancy, use, or possession of the Premises (including but not limited totaxes on, or which shall be measured by, any rents or rental income, and taxeson personal property, whether of Landlord or Tenant), subsequent to thecommencement of the Term, and all installments of assessments that are dueduring the Term.

 

b.                                      Landlord shall notify Tenant of the real property taxes and immediatelyon receipt of the tax bill furnish Tenant with a copy of the tax bill.

 

c.                                       All real estate taxes levied on the Premises for the tax year in whichthe Commencement Date falls shall be appropriately prorated between Landlordand Tenant, so that Tenant’s share will reflect the portion of that tax year inwhich Tenant had possession of the Premises under this Lease.  Taxes levied on the Premises for the tax yearin which the Termination Date occurs shall be similarly prorated betweenLandlord and Tenant to reflect the period of Tenant’s possession of thePremises during that tax year.  Tenantshall pay Tenant’s share of those taxes to Landlord directly rather than to 

 

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the public authorities,and that payment shall constitute full performance under this Lease withrespect to this tax liability.

 

d.                                      Tenant shall not be required to pay, discharge, or remove any tax(including penalties and interest), assessment, tax lien, forfeiture, or other impositionor charge against the Premises or any part of the Premises or any improvements,so long as Tenant diligently and in good faith contests the validity or thelegality of the assessment, levy, or charge by appropriate legal proceedings,which should prevent the collection of the tax, assessment, imposition, orcharge contested; provided however, that Tenant, prior to the date that thetax, assessment, imposition, or charge is due and payable, shall either havepaid it under protest or shall have, (i) posted a bond with Landlordsufficient to cover the amount of the taxes and penalties and interest and, (ii) inthe case of taxes other than real estate taxes, given to Landlord a letterexecuted by an officer of Tenant assuring Landlord that the tax, assessment,imposition, or charge will be paid when and to the extent that the legalproceedings conclude in a final determination that the tax, assessment,imposition, or charge is valid, legal and owing.  Upon such final determination, Tenant agreesto immediately pay the contested tax, assessment, imposition, or charge,together with all interest and penalties, if any, and remove and discharge anylien or forfeiture arising from the prior nonpayment.  Any proceedings for contesting the validity,legality, or amount of any tax, assessment, imposition, or charge, or torecover any tax, assessment, imposition, or charge paid by Tenant, may bebrought by Tenant in the name of Landlord or in the name of Tenant, or both, asTenant deems advisable.  Landlord agreesthat Landlord will, upon the reasonable request of Tenant, execute or join inthe execution of any instrument or document necessary in connection with anyproceeding including Landlord’s attorneys’ fees incurred in connection withsuch proceeding.  However, if anyproceedings are brought by Tenant, Tenant agrees to indemnify Landlord for allreasonable loss, cost, or expense that may be imposed on Landlord in connectionwith the proceeding.  Tenant’s right tocontest taxes as provided in this Lease shall not extend beyond the point whereLandlord’s title to the Premises could be lost. In any event, Tenant shall notify Landlord in advance of any tax contestproceedings that Tenant intends to initiate, and shall then inform Landlord ofall significant developments in the proceedings as they may occur.

 

e.                                       If Tenant has not paid any tax, assessment, or public charge required bythis Lease to be paid by Tenant before its delinquency, or if a tax,assessment, or public charge is contested by Tenant and that tax, assessment,or public charge has not been paid within thirty (30) days after a finaldetermination of the validity, legality, or amount of the tax, assessment orpublic charge, then Landlord may, but shall not be required to, pay anddischarge the tax, assessment, or public charge.  If a tax, assessment, or public charge,including penalties and interest, are paid by Landlord, the amount of thatpayment shall be due and payable to Landlord by Tenant with the next succeedingrental installment, and shall bear interest at the rate of ten percent (10%)per annum from the date of the payment by Landlord until repayment by Tenant.

 

f.                                         If any assessments for local improvements become a lien after theCommencement Date, Tenant shall pay only the installments of the assessmentsthat become due and payable during the Term. On the request of Tenant, Landlord agrees to cooperate or join withTenant in any application that may be necessary to permit the payment of theassessments in installments.

 

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g.                                      The covenants and agreements to pay taxes by Tenant in Section 9shall not be deemed to include the payment of any inheritance, estate,succession, transfer, gift, franchise, corporation, income, or profit tax, orcapital levy that is or may be imposed on Landlord.  If any excepted taxes become a lien againstthe Premises, Landlord agrees to pay and discharge them before foreclosure ofthe lien or to take the steps analogous to those permitted to Tenant under Section 9(d) tocontest the taxes, so long as the steps sufficiently protect Tenant’s quietenjoyment of the Premises.  If Landlordfails to pay and discharge those taxes prior to the institution of proceedingsto foreclose the lien, Tenant, at Tenant’s sole option, may advance the fundsrequired to pay and discharge the taxes, together with all penalties andinterest, in which event the amount of funds so advanced shall be immediatelydue and payable from Landlord to Tenant and shall bear interest at the rate often percent (10%) per annum from the date of payment by Tenant, untilrepaid.  Alternatively, Tenant may applythe amount advanced to the payment of the next succeeding rental installment orinstallments otherwise payable to Landlord until the advance, with interest,has been repaid to Tenant; provided, however, that the rights of Tenant under Section 9(g) shallbe limited to those instances where the foreclosure or other enforcement of thelien may disturb Tenant’s possession and peaceful enjoyment of the Premises.

 

10.                                 **Condition ofPremises****.**  Tenant acknowledges that as ofthe date of this Lease, Tenant has inspected the Premises and had suchcontractors, consultants, engineers, architects, roofers, HVAC inspectors andother persons, as Tenant so desires, inspect the Premises for Tenant.  Based on Tenant’s own inspection, and theinspection of Tenant’s inspectors, consultants and experts, Tenant acknowledgesthat the improvements are in good order, repair and condition.  Landlord makes no representations regardingthe condition of the Premises, which are leased “AS IS.”

 

11.                                 **Repairs andMaintenance****.**

 

a.                                       Landlord’sObligations. Subject to the terms of this Section, Landlordshall maintain the interior and exterior structural portions of the roof,foundation, and load-bearing portions of walls of the Building, excluding wallcoverings, painting, glass, and doors. Landlord will not be required to makeany repair resulting from:

 

i)                                         any alterationor modification to the building or to mechanical equipment within the buildingperformed by, for, or because of Tenant or to special equipment or systemsinstalled by, for, or because of Tenant;

 

ii)                                      theinstallation, use, or operation of Tenant’s property, fixtures, and equipment;

 

iii)                                   the moving ofTenant’s property in or out of the building or in and about the Premises;

 

iv)                                  Tenant’s use oroccupancy of the Premises in violation of this Lease or in the manner notcontemplated by the parties at the time of the execution of this Lease;

 

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v)                                     the acts oromissions of Tenant and Tenant’s employees, agents, invitees, subtenant’s,licensees, or contractors;

 

vi)                                  fire and othercasualty, except as provided by Section 19 of this Lease; or

 

vii)                               condemnation,except as provided in Section 20 of this Lease.

 

Landlordshall have no obligation to make repairs under this Section until areasonable time after receipt of written notice from Tenant of the need forrepairs. Tenant waives any right to repair at the expense of Landlord under anyapplicable governmental laws, ordinances, statutes, orders, or regulations nowor later in effect.

 

b.                                      Tenant’sObligations. Except for the portions of the Premises expresslyrequired to be maintained by Landlord under Section 11(a), Tenant, atTenant’s expense, will maintain the Premises in good order including, withoutlimitation, roof membrane, subfloors and floor coverings, walls and wallcoverings, mechanical, electrical, and plumbing systems, doors, windows,parking lots, and truck aprons, gutters, and downspouts, landscaping, and anysignage. Tenant will enter into preventive maintenance and service contractswith maintenance contractors for regularly scheduled maintenance that arereasonably acceptable to Landlord for servicing all mechanical systems,including but not limited to elevator, fire sprinklers, fire extinguishers,backflow, hot water, heating, and air-conditioning systems and equipment in thePremises, and Tenant further agrees to provide Landlord with annual reports ofsuch maintenance.  Tenant agrees to enterinto a maintenance contract with a reputable landscape contractor for theprovision of ground maintenance and landscaping, on no less than a bi-weeklybasis, and for parking lot maintenance and exterior lighting maintenance on noless than a bi-weekly basis, and as needed. If Tenant fails, in the reasonable judgment of Landlord, to maintain thePremises in good order, Landlord may perform the maintenance, repairs,refurnishing, or repairing at Tenant’s expense.

 

i)                                         Tenantshall, not less frequently than once each ten (10) years of the Term andExtended Terms, resurface the parking lot. Tenant shall, not less frequently than once every three (3) yearsof the Term and Extended Terms, slurry coat and restripe the parking lot.  Tenant shall, not less frequently than onceeach ten (10) years of the Term and Extended Terms, repaint the exteriorof the building with the color scheme to be approved in advance by Landlord, ifdifferent from existing color scheme.

 

ii)                                      Tenantshall, on or before October 31, 2015, treat the polyurethane foam roofwith a Class A acrylic elastomeric coating meeting the specifications asset forth in attached Exhibit “B”. Tenant acknowledges that it is responsible for maintaining the integrityof the polyurethane foam roofing membrane and that Tenant will be familiar withand comply with all standards necessary to protect the roofing membrane.  Tenant shall provide written proof by way ofinvoice from a roofing contractor on or before October 31, 2015,documenting the application of the elastomeric coating.  Failure to timely provide the coating whichmay cause deterioration and early failure of the roofing 

 

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membraneby the time set forth in this section shall be a material breach of this Lease.

 

c.                                       If at any time during the Term, including renewals or extensions, Tenantfails to maintain the Premises or make any repairs, restoration, orreplacements as required by Section 11, Landlord may, on thirty (30) days’prior written notice, unless repairs are deemed emergency or structural, butshall not be required to, enter the Premises and perform the maintenance ormake the repairs or replacements for the account of Tenant; any sums expendedby Landlord in so doing, together with interest at ten percent (10%) per annum,shall be deemed additional rent and shall be immediately due from Tenant ondemand of Landlord.

 

d.                                      Tenant waives the provisions of Civil Code §§ 1941 and 1942 and anyother law that would require Landlord to maintain the Premises in a tenantablecondition or would provide Tenant with the right to make repairs and deduct thecost of those repairs from the rent.

 

12.                                 **Alterations****.**

 

a.                                       Tenant shall have the right to make alterations to the building andimprovements on the Premises, provided that, if the reasonably estimated costof alterations exceeds Ten Thousand Dollars ($10,000.00), or involvesstructural modifications, Landlord shall have the right to consent to thealterations, and Landlord agrees not to unreasonably withhold approval of thealterations.  Approval, however, may beconditioned upon the receipt by Landlord of a set of plans and specificationsfor the alterations no later than twenty (20) days prior to the scheduledconstruction of the alterations, and upon Tenant’s agreement to restore thePremises, if Landlord requires it at the end of the Term, to the same conditionas before the alterations.  Allimprovements, additions, alterations, and major repairs shall be in accordancewith applicable laws and at Tenant’s own expense.  Tenant will indemnify and defend Landlord forall liens, claims, or damages caused by remodeling, improvements, additions,alterations, and major repairs.  Landlordagrees, when requested by Tenant, to execute and deliver any applications,consents, or other instruments required to permit Tenant to do this work or toobtain permits for the work.

 

b.                                      Except as set forth in Section 12(a), and except as to removabletrade fixtures as set forth in Section 17, all alterations andimprovements made to the Premises shall become the property of Landlord andshall remain on and be surrendered with the Premises at the expiration orsooner termination of this Lease, including any renewals or extensions.

 

c.                                       At least ten (10) days before any construction commences ormaterials are delivered for any alterations that Tenant is making to thePremises, whether or not Landlord’s consent is required, Tenant shall givewritten notice to Landlord as to when the construction is to commence or the materialsare to be delivered.  Landlord shall thenhave the right to post and maintain on the Premises any notices that arerequired to protect Landlord and Landlord’s interest in the Premises from anyliens for work and labor performed or materials furnished in making thealterations; provided, however, that it shall be Tenant’s duty to keep thePremises free and clear of all liens, 

 

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claims, and demands forwork performed, materials furnished, or operations conducted on the Premises atthe request of Tenant.

 

d.                                      Tenant will not at any time permit any mechanics’, laborers’, ormaterialmen’s liens to stand against the Premises for any labor or materialfurnished to Tenant or claimed to have been furnished to Tenant or Tenant’sagents, contractors, or subtenants, in connection with work of any characterperformed or claimed to have been performed on the Premises by or at thedirection or sufferance of Tenant; provided, however, that Tenant shall havethe right to contest the validity or amount of any lien or claimed lien, upongiving to Landlord a letter executed by Tenant assuring that the lien orclaimed lien will be paid, when and to the extent that the lien is finallydetermined to be valid and owing.  Tenant’sright, however, to contest these liens shall not extend beyond the point whereLandlord’s title to the Premises could be lost. On final determination of the lien or claim of lien, Tenant willimmediately pay any final judgment rendered, with all property costs andcharges, and shall have the lien released or judgment satisfied at Tenant’s ownexpense.  If Tenant fails to pay thejudgment promptly or otherwise fails to prevent any sale, foreclosure, orforfeiture of the Premises because of a lien, Landlord shall have the right,upon five (5) days’ written notice to Tenant, to pay or prevent thisaction, and the amount paid by Landlord shall be immediately due and payable toLandlord, and shall bear interest at the rate of ten percent (10%) per annum fromthe date of payment by Landlord until repayment by Tenant.

 

13.                                 **Entry****.**  Subject to the requirements of paragraph46,Tenant shall permit Landlord or Landlord’s agents, representatives, oremployees to enter the Premises at all reasonable times and upon reasonablenotice to inspect the Premises to determine whether Tenant is complying withthe terms of this Lease, to show the Premises to prospective purchasers,lenders or tenants, and to do other lawful acts that may be necessary toprotect Landlord’s interest in the Premises under this Lease or to performLandlord’s duties under this Lease. Landlord may place “For Rent” signs during the last six (6) monthsof any term.

 

14.                                 **Surrender ofPremises; Holding Over****.**

 

a.                                       On the Termination Date or the end of any extension or renewal of thisLease, Tenant shall promptly surrender and deliver the Premises to Landlord inas good condition as they are now at the date of this Lease.

 

b.                                      At the end of the Term, or any extension, should Tenant hold over forany reason, it is agreed that in the absence of a written agreement to thecontrary, that tenancy shall be from month-to-month only and not a renewal ofthis Lease, or an extension for any further term.  Tenant shall pay Minimum Monthly Rent in anamount equal to one hundred ten percent (110%) of the Minimum Monthly Rentpayable immediately prior to the end of the Term or any extension and themonth-to-month tenancy shall be subject to every other term, covenant, andcondition in this Lease that is consistent with and not contrary to amonth-to-month tenancy.

 

15.                                 **Indemnity****.**  Tenant agrees to protect, defend, indemnifyand hold harmless Landlord from any claims, demands, and causes of action ofany nature and any expense incident to the defense, for injury to or death ofpersons or loss of or damage to property occurring on or about the Premisesthat grow out of or are connected with Tenant’s use 

 

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and occupation of thePremises or the condition of the Premises, unless such claim arises as a resultof Landlord’s grossly negligent or willful conduct during the Term.  Tenant’s duty and obligation of defense shallarise at the time any claim is first asserted against Landlord, whether or nota lawsuit or proceeding has actually commenced. Tenant’s obligation to defend shall include the reimbursement of allreasonable attorneys’ fees, expert witness fees, paralegal fees, costs andexpenses incurred by Landlord in investigating, responding to, and defendingsuch claim or proceeding.

 

Tenanthereby agrees that Landlord shall not be liable for injury to Tenant’s businessor any loss of income therefrom or for damages to the goods, wares,merchandise, inventory, supplies or other property of Tenant, Tenant’semployees, invitees, customers, or any othe r person in or about the Premises,nor shall Landlord be liable for injury to Tenant’s employees, agents orcontractors, whether such damage or injury is caused by or results from fire,steam, electricity, gas, water or rain, or from the breakage, leakage,obstruction or other defects of the pipes, sprinklers, wires, appliances,plumbing, air conditioning or lighting fixtures, or from any other cause,whether the damage or injury results from conditions arising upon the Premisesor from other sources or places and regardless whether the cause of such damageor injury or the means of repairing the same is inaccessible to Tenant.

 

16.                                 **Insurance****.**

 

a.                                       Fire Insuranceon Building.  Landlordshall maintain on the building and other improvements which are part of thePremises, a policy of fire and extended coverage insurance with vandalism andmalicious mischief endorsements, inflation guard protection riders, change inbuilding code endorsements, and such other endorsements as Landlord determinesare reasonable and appropriate to fully insure the Premises for its fullinsurable replacement cost, as the same may exist from time to time, or suchamount as required by Landlord’s lender. Notwithstanding Landlord’s insurance, Tenant shall separately insureTenant’s own alterations, utility installations, trade fixtures, and Tenant’spersonal property in accordance with Section 16.b.  If such coverage is available andcommercially reasonable, the policy or policies of fire insurance shall insureagainst all risks of direct physical loss or damage (except flood or earthquakeunless required by Landlord’s lender), including coverage for debris removaland for compliance with all applicable, rules, regulations and ordinancespertaining to upgrading, demolition and reconstruction, or replacement of anyportion of the Premises as a result of the covered loss.  Said policies shall also contain an agreedvaluation provision in lieu of any co-insurance costs.  If such insurance coverage has a deductibleclause, the deductible amount shall not exceed $5,000 per occurrence, andTenant shall be liable for the deductible amount in the event of an insuredloss.

 

Tenant shall reimburse Landlord for thepremiums paid by Landlord for maintaining the insurance required by thissection.  Reimbursement shall be made byTenant within ten (10) days after Tenant receives a copy of the premiumnotice.  Tenant’s obligation to payinsurance costs shall be prorated for any partial year at the commencement andexpiration or termination of the term.

 

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b.                                      Tenant’s Insurance.

 

i)                                         Tenantagrees to procure and maintain public liability insurance, from a responsibleinsurance company authorized to do business in California, with a combinedsingle limit of not less than Two Million Dollars ($2,000,000.00) for injury ordeath to any person or damage to the Premises and at least Two Million Dollars($2,000,000.00) excess umbrella coverage for injury or death or propertydamage, for any claims, demands, or causes of action of any person arising outof accidents occurring on the Premises during the Term or arising out of Tenant’suse, occupancy or maintenance of the Premises. Such insurance shall be on an occurrence basis with an “Additional Insured- Managers or Lessors of Premises Endorsement” and contain the “Amendment ofthe Pollution Exclusion Endorsement” for damage caused by heat, smoke or fumesfrom a hostile fire.

 

ii)                                      Tenant,at its cost, shall maintain on all of its personal property, tenantimprovements and alterations in or about the Premises, a policy of standardfire and extended coverage insurance. Such insurance shall be for full replacement costs with a deductible notto exceed $5,000 per occurrence.  Theproceeds from any such insurance shall be used by Tenant for replacement ofTenant’s personal property, trade fixtures, and alterations.

 

c.                                       Tenant shall, in addition, obtain and keep in force during the Term ofthis Lease a policy or policies in the name of Landlord, with loss payable toLandlord and Landlord’s Lender(s), if any, insuring the loss of the full rentalpayable by Tenant to Landlord under this Lease for one (1) year, or suchshorter period if this Lease is terminated under paragraph 19 hereinbelow.  Subject to the preceding sentence, saidinsurance shall provide that in the event the Lease is terminated by reason ofan insured loss, the period of indemnity for such coverage shall be extendedbeyond the date of the completion of repairs or replacement of the Premises, toprovide for one full year’s loss of rental revenues from the date of any suchloss.  Said insurance shall contain anagreed valuation provision in lieu of any coinsurance clause, and the amount ofcoverage shall be adjusted annually to reflect the projected rental income,property taxes, insurance premium costs and other expenses, if any, otherwisepayable by Tenant, for the next twelve (12) month period.  Tenant shall be liable for any deductibleamount in the event of such loss.

 

d.                                      Each policy of insurance shall be issued by a responsible insurancecompany authorized to do business in California, and shall be issued in thenames of Landlord, Tenant, and any beneficiary under any deed of trust coveringthe Premises, if required by the deed of trust, as their respective interestsmay appear.  Tenant shall deliver aduplicate policy and certificate for each insurance policy to Landlord with allrelevant endorsements.  Each policy ofinsurance shall be primary and noncontributory with any policies carried byLandlord and, to the extent obtainable, any loss shall be payablenotwithstanding any act or negligence of Landlord that might otherwise resultin forfeiture of insurance.  Eachinsurance policy shall provide that a thirty (30) day notice of cancellationand of any material modification of coverage shall be given to all namedinsureds.  The insurance coveragerequired under this Section may be carried by Tenant under a blanketpolicy insuring other locations of Tenant’s business, provided that the Premisescovered by this Lease are specifically identified as included under thatpolicy.  Tenant agrees that upon thefailure to insure as provided in this Lease, or to pay the

 

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premiums in the insurance, Landlord may contractfor the insurance and pay the premiums, and all sums expended by Landlord forthe insurance shall be considered additional rent under this Lease and shall beimmediately repayable by Tenant.

 

e.                                       The insurance companies issuing policies under this section shall have ageneral policyholder’s rating of at least “A” and a financial rating of atleast Class VI as rated in the most current available *Best’s Key Rating Guide*.

 

f.                                         At all times during the Term and any extensions or renewals, Tenantagrees to keep and maintain, or cause Tenant’s agents, contractors, orsubcontractors to keep and maintain, workmen’s compensation insurance and otherforms of insurance as may from time to time be required by law or may otherwisebe necessary to protect Landlord and the Premises from claims of any person whomay at any time work on the Premises, whether as a servant, agent, or employeeof Tenant or otherwise.  This insuranceshall be maintained at the expense of Tenant or Tenant’s agents, contractors,or subcontractors and not at the expense of Landlord.

 

g.                                      Landlord agrees that it will tender and turn over to Tenant or to Tenant’sinsurers the defense of any claims, demands, or suits instituted, made, orbrought against Landlord or against Landlord and Tenant jointly, within thescope of this Section.  However, Landlordshall have the right to approve the selection of legal counsel, to the extentthat selection is within Tenant’s control, which approval shall not beunreasonably withheld or delayed.  Inaddition, Landlord shall retain the right at Landlord’s election and cost tohave Landlord’s own legal counsel participate as co-counsel, to the extent thatclaims are made that may not be covered by Tenant’s insurers.

 

h.                                      Tenant and Landlord each release the other and waive the entire right ofrecovery against the other for loss or damage arising out of or incident to theperils insured against, which perils occur in, on, or about the Premises,whether due to the negligence of Landlord or Tenant or their agents, employees,contractors, or invitees.  Tenant andLandlord shall, upon obtaining the required policies of insurance, give noticeto the insurance carriers that this mutual waiver of subrogation is in thisLease.

 

17.                                 **Trade Fixtures****.**

 

a.                                       Tenant shall have the right, at any time and from time to time duringthe Term and any renewals or extensions, at Tenant’s sole cost and expense, toinstall and affix on the Premises items for use in Tenant’s trade or business,which Tenant, in Tenant’s sole discretion, deems advisable (collectively TradeFixtures).  Trade Fixtures installed inthe Premises by Tenant shall always remain the property of Tenant and may beremoved at the expiration of the Term or any extension, provided that anydamage to the Premises caused by the removal of the Trade Fixtures shall berepaired by Tenant, and further provided that Landlord shall have the right tokeep any Trade Fixtures or to require Tenant to remove any Trade Fixtures thatTenant might otherwise elect to abandon.

 

b.                                      Any Trade Fixtures that are not removed from the Premises by Tenantwithin thirty (30) days after the Termination Date shall be deemed abandoned byTenant and shall automatically become the property of Landlord as owner of thereal property to which they are affixed.

 

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18.                                 **Signs****.**  Tenant may maintain on the exterior of thePremises any sign, awning, canopy, marquee or other advertising, provided thatsuch sign, awning, canopy, marquee or advertising complies with all applicablecity and county ordinances governing the placement of signs andadvertising.  Thirty (30) days after theTermination Date, all of the items mentioned in this section that are notremoved from the Premises may, without damage or liability, be destroyed by theLandlord.

 

19.                                 **Damage andDestruction****.**

 

a.                                       Casualty. If the Premises is damaged ordestroyed by fire or other casualty, Tenant will give immediate written noticeto Landlord. Within thirty (30) days after receipt, Landlord will notify Tenantwhether repairs can reasonably be made (1) within ninety (90) days, (2) inmore than ninety (90) days, but in less than one hundred eighty (180) days; or (3) inmore than one hundred eighty (180) days from the date of notice.

 

i)                                         Less Than 90 Days. If the Premises isdamaged only to the extent that rebuilding or repairs can be reasonablycompleted within ninety (90) days, this Lease will not terminate and, providedthat insurance proceeds are available to fully repair the damage, Landlord willrepair the Premises. However, Landlord will not be required to rebuild, repair,or replace any Alterations that may have been placed on the Premises forTenant.

 

ii)                                      Greater Than 90 Days. Ifthe Premises is damaged only to the extent that rebuilding or repairs can bereasonably completed in more than ninety (90) days, but in less than onehundred eighty (180) days, Landlord will have the option of (1) terminatingthe Lease effective upon the occurrence of the damage, in which event the Rentwill be abated from the date Tenant vacates the Premises; or (2) electingto repair the Premises, provided insurance proceeds are available to fullyrepair the damage. However, Landlord will not be required to rebuild, repair,or replace any part of the Alterations that may have been placed on thePremises for the Tenant. If Landlord fails to complete repairs within onehundred eighty (180) days after the date on which Landlord is notified byTenant (that period to be extended for delays caused by Tenant or because ofany items of Force Majeure), Tenant may, within ten (10) days after theexpiration of the one hundred eighty (180) day period, terminate this Lease bydelivering written notice to Landlord as Tenant’s exclusive remedy. All rightsunder this Lease will cease and terminate thirty (30) days after Landlord’sreceipt of notice.

 

iii)                                   Greater Than 180 Days. Ifthe Premise is so damaged that rebuilding or repairs cannot be completed withinone hundred eighty (180) days, either Landlord or Tenant may terminate bygiving written notice within ten (10) days after notice from Landlordregarding the time period of repair. This Lease and the Rent will be abatedfrom the date Tenant vacates the Premises. If neither party elects to terminatethis Lease, Landlord will promptly commence and diligently prosecute tocompletion the repairs to the Premises, provided insurance proceeds areavailable to fully repair the damage. However, Landlord will not be required torebuild, repair, or replace any Alterations that may have been placed on thePremises for the Tenant.

 

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b.                                      Tenant’s Fault. If any portion of thePremises is damaged resulting from the fault or breach of this Lease by Tenantor Tenant’s Parties, the Rent will be diminished during the repair of thedamage only to the extent the Premises are unfit for occupancy and Tenant willbe liable to Landlord for the cost of the repair to the extent the cost is notcovered by insurance proceeds.

 

c.                                       Uninsured Casualty. Tenant is responsiblefor and will pay to Landlord any deductible amount under the property insurancefor the Premises. If any portion of the Premises is damaged and is not fullycovered by insurance proceeds received by Landlord for any reason (and Tenantelects not to pay any difference) or if the holder of any indebtedness securedby the Premises requires that the insurance proceeds be applied to theindebtedness, Landlord will have the right to terminate this Lease bydelivering written notice of termination to Tenant within thirty (30) daysafter the date of notice to Tenant. All rights and obligations will then ceaseand terminate under this Lease.

 

d.                                      Waiver. With respect to any damage ordestruction that Landlord is obligated to repair or may elect to repair, Tenantwaives all rights to terminate this Lease pursuant to rights otherwisepresently or later accorded by law.

 

20.                                 **Condemnation****.**

 

a.                                       If, during the Term or any renewal or extension, the whole of thePremises shall be taken pursuant to any condemnation proceeding, this Leaseshall terminate as of 12:01 a.m.  ofthe date that actual physical possession of the Premises is taken, and afterthat, both Landlord and Tenant shall be released from all obligations underthis Lease.

 

b.                                      If, during the Term or any renewal or extension, only a part of thePremises is taken pursuant to any condemnation proceeding and the remainingportion is not suitable or adequate for the purposes for which Tenant was usingthe Premises prior to the taking, or if by reason of any law or ordinance theuse of the Premises for the purposes specified in this Lease shall becomeunlawful, then and after the taking or after the occurrence of other describedevents, Tenant shall have the option to terminate, and the option can beexercised only after the taking or after the occurrence of other describedevents by Tenant giving ten (10) days’ written notice to Landlord, andrent shall be paid only to the time when Tenant surrenders possession of thePremises.  Without limiting thegenerality of the previous provision, it is agreed that in the event of apartial taking of the Premises pursuant to any condemnation proceeding, if thenumber of square feet of floor area in the portion of the buildings located onthe Premises remaining after the taking is less than seventy-five percent (75%)of the number of square feet of floor area at the commencement of the Term,Tenant shall, after the taking, have the option to terminate this Lease on ten (10) days’written notice to Landlord, and rent shall be paid only to the time when Tenantsurrenders possession of the Premises.

 

c.                                       If only a part of the Premises is taken pursuant to any condemnationproceeding under circumstances that Tenant does not have the option toterminate this Lease as provided in this Section, or having the option toterminate, Tenant elects not to terminate, then Landlord shall at Landlord’sexpense promptly proceed to restore the remainder of the Premises to aself-contained architectural unit, and the Minimum 

 

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Monthly Rent payable shall be reduced effectivethe date of the taking to an amount that shall be in the same proportion toMinimum Monthly Rent payable prior to the taking, as the number of square feetof floor area remaining after the taking bears to the number of square feet offloor area immediately prior to the taking.

 

d.                                      If the whole or any part of the Premises are taken pursuant to anycondemnation proceeding, then Landlord shall be entitled to the entirety of anycondemnation award except (1) that portion allocable to Tenant’sunsalvageable trade fixtures, or if Tenant elects to remove Tenant’s tradefixtures, a sum for the reasonable removal and relocation costs not to exceedthe undepreciated value of such fixtures as reflected in Tenant’s most recentfederal income tax return; (2) Tenant’s relocation costs; (3) Tenant’sloss of goodwill excluding any “bonus value” based on the actual rent reservedunder the Lease to its fair rental value as of the date of condemnation; and (4) theundepreciated percentage of the lesser of (a) actual cost of the tenantimprovements completed at the inception of this Lease, or (b) the increasein value of Landlord’s Premises as a result of Tenant’s tenant improvements.  As an example of subparagraph (4), if Tenanthas invested $100,000 in tenant improvements and has depreciated 50% of thoseimprovements, and the value of the Premises has been increased by $50,000 as aresult of Tenant’s improvements; then Tenant would be entitled to 50% times$50,000 (the lesser of the increase in value of the Premises or cost of tenantimprovements) as and for its portion of a condemnation award.  The value of Tenant’s tenant improvements inthe Premises shall be determined as of the date of the condemnation award.

 

21.                                 **Assignment andSubletting****.**

 

a.                                       Except as provided in Section 21(b), Tenant shall not assign thisLease without the prior written consent of Landlord, which shall not beunreasonably withheld, provided that subsequent to any assignment Tenant shallremain primarily liable for the rental to be paid under this Lease and theperformance of all terms and conditions of this Lease.  In evaluating whether or not to provideconsent to a proposed assignment or sublease, Tenant, at a minimum, shallprovide to Landlord a copy of the proposed assignment or sublease, a currentfinancial statement from the proposed subtenant/assignee, a statement ofintended use by the proposed assignee/subtenant, and such other information asmay be reasonably requested by Landlord in evaluating the proposed assignmentor sublease.  Landlord shall be entitledto condition his consent on the agreement of Tenant to share equally anyincrease in rent over the rent stated in this Lease for the duration of theproposed assignment or sublease.

 

b.                                      However, Tenant may assign this Lease without Landlord’s written consentif the assignment is made

 

i)                                         to a successor corporation into which or with which Tenant is merged orconsolidated in accordance with applicable statutory provisions for the mergeror consolidation of corporations,

 

ii)                                      to a wholly-owned subsidiary of Tenant, or

 

iii)                                   to a corporation to which Tenant shall sell all or substantially all ofTenant’s assets; and the liabilities of the corporations participating in themerger or consolidation or of the transferor corporation must be assumed by the

 

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corporation survivingthe merger or created by the consolidation or by the transferee corporation, inthe event of a transfer to a wholly-owned subsidiary or a sale of all orsubstantially all assets, and that corporation (except in the case of awholly-owned subsidiary) must have a net worth at least equal to the net worthof Tenant at the time of execution of this Lease.  Upon delivery to Landlord, by a successorcorporation to which this Lease is assigned or transferred, of the agreement ofthe corporation to be bound by the terms, covenants, and conditions of thisLease to be performed by Tenant after the date of the assignment or transferand documentation satisfactory to Landlord demonstrating net worth andoperating income, Tenant shall be released and discharged from all obligationslater arising under this Lease, except where the transfer is to a wholly-ownedsubsidiary of Tenant.

 

c.                                       In the event Tenant shall assign or sublet the Premises or request theconsent of Landlord to any assignment or subletting, or if Tenant shall requestthe consent of Landlord for any act Tenant proposes to do, then Tenant shallpay Landlord’s reasonable attorneys’ fees and consultants’ fees in connectionwith evaluating such requests and/or proposed sublease or assignment not toexceed $2,500.00.

 

22.                                 **Default****.**  Any of the following events or occurrencesshall constitute a material breach of this Lease by Tenant and, after theexpiration of any applicable grace period, shall constitute an event of default(each an Event of Default):

 

a.                                       The failure by Tenant to pay any amount in full when it is due under theLease;

 

b.                                      The failure by Tenant to perform any obligation under this Lease, whichby its nature Tenant has no capacity to cure;

 

c.                                       The failure by Tenant to perform any other non-monetary obligation underthis Lease, if the failure has continued for a period of thirty (30) days afterLandlord demands in writing that Tenant cure the failure.  If, however, by its nature the failure cannotbe cured within thirty (30) days, Tenant may have a longer period as isnecessary to cure the failure, but this is conditioned upon Tenant’s promptlycommencing to cure within the thirty (30) day period and thereafter diligentlycompleting the cure.  Tenant shallindemnify and defend Landlord against any liability, claim, damage, loss, orpenalty that may be threatened or may in fact arise from that failure duringthe period the failure is uncured;

 

d.                                      Any of the following: A general assignment by Tenant for the benefit ofTenant’s creditors; any voluntary filing, petition, or application by Tenantunder any law relating to insolvency or bankruptcy, whether for a declarationof bankruptcy, a reorganization, an arrangement, or otherwise; the abandonment,vacation, or surrender of the Premises by Tenant without Landlord’s priorwritten consent; or the dispossession of Tenant from the Premises (other thanby Landlord) by process of law or otherwise;

 

e.                                       The appointment of a trustee or receiver to take possession of all orsubstantially all of Tenant’s assets; or the attachment, execution or otherjudicial seizure of all or substantially all of Tenant’s assets located at thePremises or of Tenant’s interest in this Lease, unless the appointment orattachment, execution, or seizure is discharged 

 

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within thirty (30) days; or the involuntary filingagainst Tenant, or any general partner of Tenant if Tenant is a partnership, of

 

i)                                         a petition to have Tenant, or any partner of Tenant if Tenant is apartnership, declared bankrupt, or

 

ii)                                      a petition for reorganization or arrangement of Tenant under any lawrelating to insolvency or bankruptcy, unless, in the case of any involuntaryfiling, it is dismissed within sixty (60) days;

 

f.                                         The abandonment of the Premises by Tenant.

 

g.                                      Failure to timely complete roof coating per Section 11.b.ii, above.

 

23.                                 **Remedies****.**  Upon the occurrence of an Event of Default,Landlord, in addition to any other rights or remedies available to Landlord atlaw or in equity, shall have the right to

 

a.                                       terminate this Lease and all rights of Tenant under this Lease by givingTenant written notice that this Lease is terminated, in which case Landlord mayrecover from Tenant the aggregate sum of

 

i)                                         the worth at the time of award of any unpaid rent that had been earnedat the time of termination;

 

ii)                                      the worth at the time of award of the amount by which (A) theunpaid rent that would have been earned after termination until the time ofaward exceeds (B) the amount of the rental loss, if any, as Tenantaffirmatively proves could have been reasonably avoided;

 

iii)                                   the worth at the time of award of the amount by which (A) theunpaid rent for the balance of the term after the time of award exceeds (B) theamount of rental loss, if any, as Tenant affirmatively proves could bereasonably avoided;

 

iv)                                  any other amount necessary to compensate Landlord for all the detrimentcaused by Tenant’s failure to perform Tenant’s obligations or that, in theordinary course of things, would be likely to result from Tenant’s failure; and

 

v)                                     all other amounts in addition to or in lieu of those previously set outas may be permitted from time to time by applicable California law.

 

As used in clauses (i) and(ii) of Section 23(a), the worth at the time of award is computed byallowing interest at the rate of ten percent (10%) per annum.  As used in clause (iii) of Section 23(a),the worth at the time of award is computed by discounting that amount at thediscount rate of the Federal Reserve Bank of San Francisco at the time of awardplus one percent (1%).  As used in thisSection, the term rent shall include Minimum Monthly Rent and any otherpayments required by Tenant under this Lease.

 

b.                                      continue this Lease, and from time to time, without terminating thisLease, either

 

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i)                                         recover all rent and other amounts payable as they become due or

 

ii)                                      relet the Premises or any part on behalf of Tenant on terms and at therent that Landlord, in Landlord’s sole discretion, may deem advisable, all withthe right to make alterations and repairs to the Premises, at Tenant’s cost,and apply the proceeds of reletting to the rent and other amounts payable byTenant.  To the extent that the rent andother amounts payable by Tenant under this Lease exceed the amount of theproceeds from reletting, the Landlord may recover the excess from Tenant as andwhen due.

 

c.                                       Subject to the requirements of paragraph 46, upon the occurrence of anEvent of Default, Landlord shall also have the right, with or withoutterminating this Lease, to re-enter the Premises and remove all persons andproperty from the Premises.  Landlord maystore the property removed from the Premises in a public warehouse or elsewhereat the expense and for the account of Tenant.

 

d.                                      None of the following remedial actions, alone or in combination, shallbe construed as an election by Landlord to terminate this Lease unless Landlordhas in fact given Tenant written notice that this Lease is terminated or unlessa court of competent jurisdiction decrees termination of this Lease: any act byLandlord to maintain or preserve the Premises; any efforts by Landlord to reletthe Premises; any re-entry, repossession, or reletting of the Premises; or anyre-entry, repossession, or reletting of the Premises by Landlord pursuant tothis Section.  If Landlord takes any ofthe previous remedial actions without terminating this Lease, Landlord maynevertheless at any later time terminate this Lease by written notice toTenant.

 

e.                                       If Landlord relets the Premises, Landlord shall apply the revenue fromthe reletting as follows: first, to the payment of any indebtedness other thanrent due from Tenant to Landlord; second, to the payment of any cost ofreletting, including without limitation finder’s fees and leasing commissions;third, to the payment of the cost of any maintenance and repairs to thePremises; and fourth, to the payment of rent and other amounts due and unpaidunder this Lease.  Landlord shall holdand apply the residue, if any, to payment of future amounts payable under thisLease as the same may become due, and shall be entitled to retain the eventualbalance with no liability to Tenant.  Ifthe revenue from reletting during any month, after application pursuant to theprevious provisions, is less than the sum of (i) Landlord’s expendituresfor the Premises during that month and (ii) the amounts due from Tenantduring that month, Tenant shall pay the deficiency to Landlord immediately upondemand.

 

f.                                         After the occurrence of an Event of Default, Landlord, in addition to orin lieu of exercising other remedies, may, but without any obligation to do so,cure the breach underlying the Event of Default for the account and at theexpense of Tenant.  However Landlord mustby prior notice first allow Tenant a reasonable opportunity to cure, except incases of emergency, where Landlord may proceed without prior notice toTenant.  Tenant shall, upon demand,immediately reimburse Landlord for all costs, including costs of settlements,defense, court costs, and attorney fees that Landlord may incur in the courseof any cure.

 

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g.                                      No security or guaranty for the performance of Tenant’s obligations thatLandlord may now or later hold shall in any way constitute a bar or defense toany action initiated by Landlord for unlawful detainer or for the recovery ofthe Premises, for enforcement of any obligation of Tenant, or for the recoveryof damages caused by a breach of this Lease by Tenant or by an Event ofDefault.

 

h.                                      Except where this is inconsistent with or contrary to any provisions ofthis Lease, no right or remedy conferred upon or reserved to either party isintended to be exclusive of any other right or remedy, or any right or remedygiven or now or later existing at law or in equity or by statute.  Except to the extent that either party mayhave otherwise agreed in writing, no waiver by a party of any violation ornonperformance by the other party of any obligations, agreements, or covenantsunder this Lease shall be deemed to be a waiver of any subsequent violation ornonperformance of the same or any other covenant, agreement, or obligation, norshall any forbearance by either party to exercise a remedy for any violation ornonperformance by the other party be deemed a waiver by that party of therights or remedies with respect to that violation or nonperformance.

 

24.                                 **Late Charge****.**  Tenant acknowledges that Tenant’s failure topay any installment of the Minimum Monthly Rent, or any other amounts due underthis Lease as and when due may cause Landlord to incur costs not contemplatedby Landlord when entering into this Lease, the exact nature and amount of whichwould be extremely difficult and impracticable to ascertain.  Accordingly, if any installment of theMinimum Monthly Rent or any other amount due under the Lease is not received byLandlord as and when due, then, without any notice to Tenant, Tenant shall payto Landlord an amount equal to six percent (6%) of the past due amount, whichthe parties agree represents a fair and reasonable estimate of the costsincurred by Landlord as a result of the late payment by Tenant.

 

25.                                 **DefaultInterest****.**  If Tenant fails to pay anyamount due under this Lease as and when due, that amount shall bear interest atthe maximum rate then allowable by law from the due date until paid.

 

26.                                 **Waiver ofBreach****.**  Any express or implied waiver ofa breach of any term of this Lease shall not constitute a waiver of any furtherbreach of the same or other term of this Lease; and the acceptance of rentshall not constitute a waiver of any breach of any term of this Lease, exceptas to the payment of rent accepted.

 

27.                                 **EstoppelCertificates****.**  At any time, with at leastfifteen (15) days’ prior notice by Landlord, Tenant shall execute, acknowledge,and deliver to Landlord a certificate certifying:

 

a.                                       the Commencement Date and the Term,

 

b.                                      the amount of the Minimum Monthly Rent,

 

c.                                       the dates to which rent and other charges have been paid,

 

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d.             that this Lease is unmodified andin full force or, if there have been modifications, that this Lease is in fullforce, as modified, and stating the date and nature of each modification,

 

e.             that no notice has been received byTenant of any default by Tenant that has not been cured, except, if any exist,those defaults must be specified in the certificate, and Tenant must certifythat no event has occurred that, but for the expiration of the applicable timeperiod or the giving of notice or both, would constitute an Event of Defaultunder this Lease,

 

f.              that no default of Landlord isclaimed by Tenant, except, if any, those defaults must be specified in thecertificate, and

 

g.             other matters as may be reasonablyrequested by Landlord.

 

                An estoppel certificate requested pursuant to thissection may be relied on by prospective purchasers, mortgagees, orbeneficiaries under any deed of trust on the Premises or any part of it.

 

28.                                 **Attorney Fees****.**  If any action at law or in equity is broughtto recover any rent or other sums under this Lease, or for or on account of anybreach of or to enforce or interpret any of the covenants, terms, or conditionsof this Lease, or for the recovery of the possession of the Premises, theprevailing party shall be entitled to recover from the other party as part ofprevailing party’s costs reasonable attorney fees, the amount of which shall befixed by the court and shall be made a part of any judgment rendered.

 

29.                                 **HazardousSubstance Conditions****.**  If a Hazardous Substance condition occurs,unless Tenant is legally responsible therefor (in which case Tenant shall makethe investigation and remediation thereof required by applicable law and thisLease shall continue in full force and effect, but subject to Landlord’s rightsunder this Paragraph 29), Landlord may, at Landlord’s option, either (i) investigateand remediate such Hazardous Substance condition, if required, as soon asreasonably possible at Landlord’s expense, in which event this Lease shallcontinue in full force and effect, or (ii) if the estimated cost toinvestigate and remediate such condition exceeds twelve (12) times the thenmonthly base rent or $50,000, whichever is greater, give written notice toTenant within thirty (30) days after receipt by Landlord of knowledge of theoccurrence of such Hazardous Substance condition of Landlord’s desire toterminate this Lease as of the date sixty (60) days following the giving ofsuch notice.  In the event Landlordelects to give such notice of Landlord’s intention to terminate this Lease,Tenant shall have the right within ten (10) days after the receipt of suchnotice to give written notice to Landlord of Tenant’s commitment to pay for theinvestigation and remediation of such Hazardous Substance condition totally atTenant’s expense and without reimbursement from Landlord except to the extentof an amount equal to twelve (12) times the then monthly Base Rent or $50,000,whichever is greater.  Tenant shallprovide Landlord with the funds required of Tenant or satisfactory assurancethereof within thirty (30) days following Tenant’s said commitment.  In such event, this Lease shall continue infull force and effect, and Lessor shall proceed to make such investigation andremediation as soon as reasonably possible and the required funds areavailable.  If Tenant does not give suchnotice and provide the required funds or assurance thereof within the timesspecified above, this Lease shall terminate as of the date specified in 

 

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Landlord’snotice of termination.  If a HazardousSubstance condition occurs for which Tenant is not legally responsible, thereshall be abatement of Tenant’s obligations under this Lease for a period of notto exceed twelve (12) months while Landlord remediates the condition.

 

30.                                 **SecurityDeposit****.**  There is no Security Depositrequired from Tenant at the inception of this Lease.  However, in the event that Tenant ispermitted to assign or sublet the Premises, Landlord shall be entitled torequire a Security Deposit from the sublessee or assignee, in an amount equalto one and one-half (11⁄2) times the then-current Base Rent for thePremises.  The Security Deposit willsecure the full and faithful performance of each provision of this Lease to beperformed by Tenant. Landlord may use and commingle the Security Deposit withother funds of Landlord. If Tenant fails to perform any of Tenant’s obligationsunder this Lease, Landlord may apply all or any portion of the Security Deposittoward fulfillment of Tenant’s unperformed obligations. If Landlord does applythe Security Deposit, Tenant must immediately pay Landlord sufficient cash torestore the Security Deposit to the full original amount. The Security Depositwill not bear interest.

 

31.                                 **Warranty of Authority****.**  The undersigned warrant and represent toLandlord that they are duly authorized corporate officers of Tenant, and thatthey are acting within the scope of their authority to bind Tenant to theprovisions in this Lease without any further action, approval or consent of theBoard of Directors of Tenant.

 

32.                                 **Notices****.**  Any notice or other communication pursuant tothis Lease shall be in writing and shall be deemed to be properly given ifdelivered, mailed, or sent by wire, facsimile transmission or other telegraphiccommunication in the manner provided in this paragraph, to the followingpersons:

 

MissionCommunity Bank

581Higuera  Street

SanLuis Obispo, CA  93401

FAX:  (805) 269-0117

(805)782-5000 - phone

 

RichardC. Blake

6171Alta Mira Lane

SanLuis Obispo, CA  93401

(805)878-5875

 

Eitherparty may change the party’s address for these purposes by giving writtennotice of the change to the other party in the manner provided in thissection.  If sent by mail, any notice,delivery, or other communication shall be effective or deemed to have beengiven forty-eight (48) hours after it has been deposited in the United Statesmail, duly registered or certified, with postage prepaid, and addressed as setforth above.  Notices sent by wire,telegraph or facsimile transmission shall be deemed received on the nextbusiness day after transmission. Facsimile machines used for fax notice must generate a “TransmissionRecord” stating the telephone number of the receiving fax, number of pages sentout, date and time of transmission and indication of any transmission errors.

 

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33.                                 **Heirs andSuccessors****.**  This Lease shall be binding onand shall inure to the benefit of the heirs, executors, administrators, successors,and assigns of Landlord and Tenant.

 

34.                                 **PartialInvalidity****.**  Should any provision of thisLease be held by a court of competent jurisdiction to be either invalid orunenforceable, the remaining provisions of this Lease shall remain in effect,unimpaired by the holding.

 

35.                                 **EntireAgreement****.**  This instrument constitutes thesole agreement between Landlord and Tenant respecting the Premises, the leasingof the Premises to Tenant, and the specified lease term, and correctly setsforth the obligations of Landlord and Tenant. Any agreement or representations respecting the Premises or theirleasing by Landlord to Tenant not expressly set forth in this instrument arevoid.

 

36.                                 **Time of Essence****.**  Time is of the essence in this Lease.

 

37.                                 **Rent****.**  All monetary obligations of Tenant toLandlord under the Lease, including but not limited to the Minimum MonthlyRent, tax reimbursements and insurance reimbursements, shall be deemed rent.

 

38.                                 **Amendments****.**  This Lease may be modified only in writingand only if signed by the parties at the time of the modification.

 

39.                                 **Subordination****.**

 

a.             This Lease shall be subordinate toany ground lease, mortgage, deed of trust, or any other hypothecation forsecurity now or later placed upon the Premises and to any advances made on thesecurity of it or Landlord’s interest in it, and to all renewals,modifications, consolidations, replacements, and extensions of it.  However, if any mortgagee, trustee, or groundLandlord elects to have this Lease prior to the lien of its mortgage or deed oftrust or prior to its ground lease, and gives notice of that to Tenant, thisLease shall be deemed prior to the mortgage, deed of trust, or ground lease,whether this Lease is dated prior or subsequent to the date of the mortgage,deed of trust, or ground lease, or the date of recording of it.  If any mortgage or deed of trust to whichthis Lease is subordinate is foreclosed or a deed in lieu of foreclosure isgiven to the mortgagee or beneficiary, Tenant shall attorn to the purchaser atthe foreclosure sale or to the grantee under the deed in lieu offoreclosure.  If any ground lease towhich this Lease is subordinate is terminated, Tenant shall attorn to theground lessor.  Tenant agrees to executeany documents, in form and substance commercially reasonable, required to forthe subordination, to make this Lease prior to the lien of any mortgage or deedof trust or ground lease, or to evidence the attornment.

 

b.             If any mortgage or deed of trust towhich this Lease is subordinate is foreclosed or a deed in lieu of foreclosureis given to the mortgagee or beneficiary, or if any ground lease to which thisLease is subordinate is terminated, this Lease shall not be barred, terminated,cut off, or foreclosed.  Neither shallthe rights and possession of Tenant under this Lease be disturbed, if Tenant isnot then in default in the payment of rental and other sums due under thisLease or otherwise in default under the terms of this Lease, and if Tenantattorns to the purchaser, grantee, or ground lessor as provided in 

 

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Section 38(a) or,if requested, enters into a new lease for the balance of the term of this Leaseon the same terms and provisions in this Lease. Tenant’s covenant under Section 38(a) to subordinate thisLease to any ground lease, mortgage, deed of trust, or other hypothecationlater executed is conditioned on each senior instrument containing thecommitments specified in this subsection.

 

40.                                 **Right of FirstOffer****.**  If Landlord determines to sellthe Premises, or any portion of its interest in the Premises, or have receivedan acceptable bona fide offer to purchase the Premises or such interest,Landlord shall notify Tenant of the terms on which Landlord will be willing tosell.

 

IfTenant, within ten (10) business days after receipt of Landlord’s notice,indicates in writing its agreement to purchase the Premises on the terms statedin Landlord’s notice, Landlord shall sell and convey the Premises to Tenant onthe terms stated in the notice.  IfTenant does not indicate its agreement within ten (10) business days,Landlord thereafter shall have the right to sell and convey the Premises to athird party on the same terms stated in the notice.  If Landlord does not sell and convey thePremises on the same terms stated in the notice within one hundred eighty (180)days, any further transaction shall be deemed a new determination by Landlordto sell and convey the Premises and the provisions of this paragraph shall beapplicable.

 

IfTenant purchases the Premises, this Lease shall terminate on the date titlevests in Tenant, and Landlord shall remit to Tenant all prepaid and unearnedrent.

 

Tenant’sright of first refusal shall not apply to a transfer between any of thosepersons who constitute Landlord and the blood relatives of any of thosepersons, either outright or in trust, or to a legal entity (i.e., partnership,corporation, trust, or like entity) when the majority interest is owned by allor some of those persons who constitute Landlord.

 

41.                                 **Merger****.**  The voluntary or other surrender of thisLease by Tenant, or a mutual cancellation of the Lease, or a termination byLandlord, shall not work a merger, and shall, at the option of Landlord,terminate all or any existing subtenancies or may, at the option of Landlord,operate as an assignment to a Landlord of any of the subtenancies.

 

**42.**                                 **Option toPurchase.****  Landlordgrants to Tenant the option to purchase the Premises in accordance with theprovisions of this Lease, as long as Tenant is not in default at the timeTenant exercises the option.**

 

a.             Option Period.  Tenant shall have the right to exercise theoption to purchase for a sixty (60) day period between November 1, 2010and December 31, 2010.

 

b.             Method of Exercising Option.  Tenant shall exercise the option by executingin duplicate (including initialing of Sections 15, 16 and 17) and deliveringthe Agreement of Purchase and Sale and Joint Escrow Instructions On Exercise ofOption to Purchase, attached hereto as Exhibit “D”, to First AmericanTitle Company, 899 Pacific Street, San Luis Obispo, CA 93401, and deliveringone duplicate executed copy to Landlord’s attorneys, Diehl & Rodewald,1043 Pacific Street, San Luis Obispo, CA 93401. Concurrently, Tenant shall deliver its deposit to First American TitleCompany.

 

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c.             Purchase Price.  The purchase price of the Premises shall beTwo Million Dollars ($2,000,000) payable in accordance with the attachedAgreement of Purchase and Sale and Joint Escrow Instructions on Exercise ofOption to Purchase.

 

43.                                 **Landlord’sEntry****.**  Subject to the requirements ofparagraph 46, any time that Landlord is entitled to enter the Premises underthe terms of this Lease, such entry shall be on a minimum of twenty-four (24)hours’ prior notice. Landlord shall not maintain a key to the Premises, exceptthat during the last six (6) months of the Term or any Extended Term ofthis Lease, Tenant shall allow prospective tenants or purchasers, agents,contractors, consultants to inspect and have reasonable access to the Premisesto evaluate the Premises for rental or purchase on all business days and oneday per weekend between the hours of 8:00 a.m. and 6:00 p.m.  If Tenant fails to provide such access,Tenant shall provide a key to Landlord.

 

44.                                 **Governing Law****.**  This Lease shall be governed by and construedin accordance with California law.

 

45.                                 **Memorandum of Lease.**  Tenant may record a short form memorandum ofthis Lease in a form attached hereto as Exhibit “C”.

 

46.                                 **Regulator Requirements.**

 

a.             Notwithstanding any other provisionof this Lease, Landlord shall not have the right to take possession of any ofTenant’s business records or personal property located on the Premises, of anycustomer of Tenant, or of any other third party. Furthermore, any rights andremedies of Landlord under this Lease are subject to the power of the State ofCalifornia Department of Financial Institutions (“DFI”), the Federal DepositInsurance Corporation (“F.D.I.C.”), and other bank regulatory agencies, toenter upon and/or assume control of the Premises and of any personal propertytherein as permitted under applicable laws.

 

b.             Also, notwithstanding any otherprovisions contained in this Lease, in the event (a) Tenant or itssuccessors or assigns shall become insolvent or bankrupt, or, if theirinterests under this Lease shall be levied upon or sold under execution orother legal process; or, (b) the depository institution then operating onthe Premises is closed or is taken over by any depository institutionsupervisory authority (“Authority”), Landlord may, but shall not be requiredto, in either such event, terminate this Lease only with the concurrence of anyreceiver or liquidator, to the extent required by applicable law.

 

                Theparties have executed this Lease as of the date first above written.

 

| TENANT:                 |                    | LANDLORD: |   |
|-------------------------|-------------------------|-----------|--------|
|                    |                    |      |   |
| MISSION  COMMUNITY BANK |                    |      |   |
|                    |                    |      |   |
| By:                     | /s/  Anita M. Robinson  |      |   | /s/  Richard C. Blake |   |
|                    | Anita  M. Robinson, CEO |      |   | Richard  C. Blake |   |

 

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Exhibit “A”            Description of Premises (Recital A)

Exhibit “B”            Roof Maintenance Specifications (Section 1.b.ii)

Exhibit “C”            Memorandum of Lease (Section 45)

Exhibit “D”            Purchase Agreement (Section 42)

 

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**EXHIBIT “A”**

 

                Parcel A of Parcel Map No. 5195, in the City ofSanta Maria, County of Santa Barbara, State of California, as per Map recordedin Book 17, Page 29 of Parcel Maps, in the Office of the County Recorderof said County; subject to all matters shown of record.

 

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EXHIBIT “B”

 

Elastomeric Coating

 

Install one or more coats of a “Class A”Acrylic Elastomeric coating system at the rate of 3 gallons per 100 sq. ft. toyield a theoretical dry film thickness of 28.8 mils.  Broadcast Roofing Granules into top coat atthe rate of 35#/100 sq. ft.

 

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