EXHIBIT 99.1
OFFICE LEASE
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THIS OFFICE LEASE ("Lease") is entered into as of May 21, 2007, by and
between Xxxxxx X. Xxxxxxx, Trustee of the Xxxxxx X. Xxxxxxx 2005 Trust
("Landlord") and the Bank of Xxxxxx, a division of American River Bank,
("Tenant").
Landlord hereby leases to Tenant on the terms and conditions set forth
in this Lease the real property located at 00000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxx, consisting of a commercial office building containing approximately
2,980 square feet ("Building"), and a garage of approximately 400 square feet,
all of which is located on land of approximately .50 acres, and identified as
Xxxxxx County APN 000-000-000, including the right to sole and exclusive
possession of the building, parking lot and all other improvements located
thereon (the "Premises"). Provided however, Landlord shall have the
non-exclusive right to use the garage located on the Premises for the storage of
maintenance equipment.
1. Term. The term of this Lease shall be for a period of ten (10) years
commencing __________, 2007, and ending on ________, 2017. Upon termination of
this Lease, Landlord agrees not to rent the Premises for use by a financial
institution for a period of six (6) months following the expiration of the Term
or any Option Term.
2. Options to Extend Term. Landlord grants to Tenant two (2) options to
extend the Lease Term (Extension Options) for a period of five (5) years each
(Option Term) on all of the same terms and conditions of this Lease, except for
the amount of Rent payable. Each Extension Option may be exercised by written
notice delivered by Tenant to Landlord as provided below. The Rent payable for
each Option Term shall be equal to the Fair Market Rent Value of the Premises as
of the commencement date of the Option Term. For purposes of this Section, Fair
Market Rent Value shall be the rental rate, including escalations, at which
tenants lease space comparable in size, location and quality, for a term
comparable to the Option Term, taking into account rental abatement concessions,
tenant improvement allowances and other monetary concessions.
If Tenant wishes to exercise an Extension Option, Tenant shall deliver
written notice (Interest Notice) to Landlord no less than six (6) months before
the expiration of the Term or Extended Term. Within thirty (30) days of receipt
of the Interest Notice, Landlord shall deliver notice (Option Rent Notice) to
Tenant stating the Option Rent based on Landlord's determination of Fair Market
Rental Value as of the commencement of the Option Term. If Tenant wishes to
exercise the Extension Option, Tenant must deliver written notice (Exercise
Notice) within thirty (30) days after receipt of the Option Rent Notice. If
Tenant wishes to contest the Option Rent stated in the Option Rent Notice,
Tenant must provide, with the Exercise Notice, written notice to Landlord that
Tenant objects to the stated Option Rent. In that event, Fair Market Rent Value
shall be determined by arbitration as follows:
a. Landlord and Tenant shall diligently attempt in good faith to
agree on the Fair Market Rental Value on or before the tenth
(10th) day after Tenant's objection to the Fair Market Rental
Value ("Outside Agreement Date").
b. If Landlord and Tenant fail to reach agreement by the Outside
Agreement Date, each shall make a separate determination of
Fair Market Rental Value and notify the other party of this
determination within five (5) days after the Outside Agreement
Date. If each party makes a timely determination of Fair
Market Rental Value, those determinations shall be submitted
to arbitration in accordance with subsection (c) below. If
either party fails to make a determination of Fair Market
Rental Value within the five (5) day period, that failure
shall be conclusively considered to be that party's approval
of the Fair Market Rental Value submitted within the five-day
period by the other party.
Page 4 of 10 Pages
c. If both parties make timely individual determinations of the
Fair Market Rental Value under subsection (b) above, the Fair
Market Rental Value shall be determined by binding
arbitration, as follows:
(i) The determination of the arbitrators shall be limited
to the sole issue of whether Landlord's or Tenant's
submitted Fair Market Rental Value is the closest to
the actual Fair Market Rental Value as determined by
the arbitrators, taking into account the requirements
of this Section.
(ii) The arbitrators must be licensed real estate
appraisers who have been active in the appraisal of
commercial office buildings in the Xxxxxx County area
during the five (5) year period ending on the date of
his or her appointment as arbitrators.
(iii) Within fifteen (15) days of the Outside Agreement
Date, Landlord and Tenant shall each appoint one
arbitrator and notify the other party of the name and
address of the arbitrator appointed. The two
arbitrators shall within ten (10) days after
appointment of the second arbitrator agree on and
appoint a third arbitrator, who shall be qualified
under the same criteria set forth above.
(iv) Within thirty (30) days after the appointment of the
third arbitrator, the three (3) arbitrators shall
decide whether the Landlord's or the Tenant's
submitted Fair Market Rental Value shall be used and
shall notify Landlord and Tenant of their decision.
The decision of the majority of the three (3)
arbitrators shall be binding on Landlord and Tenant.
(v) If either Landlord or Tenant fails to appoint an
arbitrator within fifteen (15) days after the Outside
Agreement Date, the arbitrator timely appointed by
one of them shall reach a decision and notify
Landlord and Tenant of that decision within thirty
(30) days after the arbitrator's appointment. The
arbitrator's decision shall be binding on Landlord
and Tenant.
(vi) The losing party shall pay all costs and expenses of
the arbitration.
3. Holding Over. If Tenant holds over and continues in possession of
the Premises after termination of the term of this Lease, including any extended
term, Tenant's continued occupancy of the Premises shall be a tenancy from month
to month at a rental equal to the monthly rental for the last month of the
preceding term, and upon all of the terms and conditions hereof.
4. Possession. Tenant may have immediate possession of the Premises
upon full execution of this Lease in order to permit Tenant to complete tenant
improvements to the Premises prior to the Rent Commencement Date.
5. Rent. Tenant agrees to pay Landlord rent in the following amounts
per month in advance on the first day of each month beginning _________, 2007
(Rent Commencement Date) and continuing on the first day of each month
thereafter during the entire term of this Lease:
Months 1- 12: $2,300.00
Months 13 - 24: $2,334.50
Months 25 - 36: $2,369.52
Months 37 - 48: $2,405.06
Months 49 - 60: $2,441.14
Months 61 - 72: $2,477.75
Months 73 - 84: $2,514.92
Months 85 - 96: $2,552.64
Page 5 of 10 Pages
Months 97 - 108: $2,590.93
Months 109 - 120: $2,629.80
6. Security Deposit. Tenant shall not be required to provide a security
deposit.
7. Repairs and Maintenance. Tenant shall, at its sole cost and expense,
repair and maintain the interior of the Building (reasonable wear and tear
excepted), including but not limited to the interior walls, all interior and
exterior glass, doors, Tenant's fixtures, the roof, all structural components,
plumbing, electrical systems and the parking lot. Landlord shall, at his sole
cost and expense, repair and maintain the heating and air conditioning,
landscaping and all other exterior maintenance. Tenant shall be solely
responsible for compliance with requirements of the American's With Disabilities
Act for the interior and exterior of the building, including the parking lot.
Landlord will be solely responsible for the cost to remediate any hazardous
materials found on the Premises not caused by Tenant.
8. Tenant Improvements. During the term of this Lease and any
extensions thereof, Tenant shall have the right to alter and install tenant
improvements to the interior of the building located on the Premises at its own
cost and expense, subject to reasonable approval of the Landlord, such approval
to be provided within fifteen (15) days of request from Tenant.
9. Condition of the Premises. Tenant accepts the Premises in its
present "AS IS" condition and acknowledges that Landlord is under no duty or
obligation to make any repairs, alterations or install any tenant improvements.
10. Inspection of the Premises. Tenant shall permit Landlord to enter
the Premises during normal business hours on reasonable advance notice for the
purpose of inspecting the Premises. Because of security requirements, Landlord
may not retain a key to the Building and may not enter the Building under any
circumstances without the prior written consent of Tenant.
11. Use. Tenant may use the Premises for any lawful purpose.
12. Signage. Tenant may place signs on the Building and elsewhere on
the Premises, subject to the consent of Landlord, which consent will not be
unreasonably withheld. Within thirty (30) days following termination of the
Lease, Tenant shall remove all signs from the Building and the Premises and
repair any damages occasioned by such removal.
13. Insurance.
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a. Liability Insurance. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance (sometimes
known as broad form comprehensive general liability insurance) insuring
Tenant against liability for bodily injury, property damage (including
loss of use of property) and personal injury arising out of the
operation, use or occupancy of the Premises. Tenant shall name Landlord
as an additional insured under such policy. The amount of such
insurance shall be One Million Dollars ($1,000,000) per occurrence.
Page 6 of 10 Pages
b. Property Insurance. Landlord will maintain policies of
insurance covering loss of or damage to the Premises in the full amount
of its replacement value, including any tenant improvements made by
Tenant. Such policy shall contain an Inflation Guard Endorsement and
shall provide protection against all perils included within the
classification of fire, extended coverage, vandalism, malicious
mischief, special extended perils (all risk), sprinkler leakage and any
other perils. Landlord shall name Tenant as an additional insured under
such policy. Tenant shall not be liable for the payment of any
deductible amount under Landlord or Tenant's insurance policies
maintained pursuant to this Section.
c. Payment of Premiums. Tenant shall pay all premiums for the
insurance policies described in this Section (whether obtained by
Landlord or Tenant) within fifteen (15) days after Tenant's receipt of
a copy of the premium statement or other evidence of the amount due.
Before the Commencement Date, Tenant shall deliver to Landlord a copy
of any policy of insurance, which Tenant is required to maintain under
this Lease. As an alternative to providing a policy of insurance,
Tenant shall have the right to provide Landlord a certificate of
insurance, executed by an authorized officer of the insurance company,
showing that the insurance which Tenant is required to maintain is in
effect.
d. Blanket Insurance Policy. In order to satisfy its
obligations under this Section, Tenant may utilize a "blanket" policy
of insurance insuring the Premises as well as other property owned or
occupied by Tenant, its parent or affiliates, provided the blanket
policy does not in any way diminish the amount or coverage of the
insurance required under this Section, and further provided that the
blanket policy otherwise meets all requirements of this Lease.
14. Real Estate Taxes. Tenant agrees to pay all real property taxes and
assessments levied or which are a charge against the Premises during the term of
this Lease or any extension thereof. Provided, however, Tenant shall not be
responsible to pay any portion of any increase in taxes resulting from a
reassessment of the Premises due to a change of ownership or other event
resulting in reassessment under the codification of Proposition 13 adopted by
the voters in the June 1978 election. Tenant shall have the right to contest any
taxes levied against the Premises or any improvements or attempt to cause them
to be reduced, including the initiation of proceedings to contest the real
property taxes. If required by law, Landlord shall join in the proceedings
brought by Tenant. However, Tenant shall pay all costs of the proceedings,
including any costs or fees incurred by Landlord.
15. Utilities; Janitorial Services. Tenant shall pay, directly to the
appropriate supplier, the cost of all natural gas, heat, light, power, sewer
service, telephone, water, refuse disposal and other utilities and services
supplied to the Premises and shall pay the cost of janitorial services to the
interior of the Building.
16. Hazardous Materials. Tenant shall not cause or permit any Hazardous
Material to be generated, produced, brought upon, used, stored, treated or
disposed of in or about the Premises by Tenant, its agents, employees,
contractors, sublessees or invitees without the prior written consent of
Landlord.
17. Indemnity. Tenant shall indemnify Landlord against and hold
Landlord harmless from any and all costs, claims or liability arising from: (a)
Tenant's use of the Premises; (b) the conduct of Tenant's business or anything
else done or permitted by Tenant to be done in or about the Premises, including
any contamination of the Premises or any other property resulting from the
presence or use of Hazardous Material caused or permitted by Tenant; (c) any
breach or default in the performance of Tenant's obligations under this Lease;
(d) any misrepresentation or breach of warranty by Tenant under this Lease; or
(e) other acts or omissions of Tenant. Tenant shall defend Landlord against any
such cost, claim or liability at Tenant's expense with counsel reasonably
acceptable to Landlord or, at Landlord's election, Tenant shall reimburse
Landlord for any legal fees or costs incurred by Landlord in connection with any
such claim.
Page 7 of 10 Pages
18. Alterations, Additions and Improvements. Tenant shall not make any
alterations, additions, or improvements to the Premises without Landlord's prior
written consent, except for non-structural alterations which do not exceed Ten
Thousand Dollars ($10,000.00) in cost cumulatively over the Lease Term and which
are not visible from the outside of any Building. All alterations, additions,
and improvements shall be done in a good and workmanlike manner, in conformity
with all applicable laws and regulations, and by a contractor approved by
Landlord. Tenant shall pay when due all claims for labor and material furnished
to the Premises. Tenant shall give Landlord at least twenty (20) days' prior
written notice of the commencement of any work on the Premises, regardless of
whether Landlord's consent to such work is required. Landlord may elect to
record and post notices of non-responsibility on the Premises.
19. Condition Upon Termination. Upon the termination of the Lease
Tenant shall surrender the Premises to Landlord broom clean and in the same
condition as received, except for ordinary wear and tear and except for any
tenant improvements installed by Tenant. Tenant shall not be required to remove
any alterations, additions or improvements (whether or not made with Landlord's
consent) prior to the expiration of the Lease, except that Tenant shall remove
all of its equipment and personal property.
20. Partial or Total Destruction; Condemnation. If the Premises are
partially or totally destroyed by any cause whatsoever, or all or any portion of
the Premises is taken by proceedings in condemnation or eminent domain, and
regardless of whether Landlord receives any insurance proceeds or condemnation
proceeds, Tenant may elect to terminate the Lease by notice to Landlord within
ninety (90) days of the event causing the damage, destruction or taking. In the
event Tenant elects to give notice of termination, this Lease shall terminate as
of the date the destruction occurred. In the event Tenant elects to continue the
Lease in effect, Landlord shall rebuild the Premises at Landlord's own expense,
including the use of any proceeds from insurance payable in connection with the
event causing such damage or destruction or proceeds from condemnation. Any rent
payable and other sums payable during the period of such damage, repair and/or
restoration (including real property taxes) shall be reduced according to the
degree to which Tenant's use of the Premises is impaired.
Any Condemnation award or payment shall be distributed in the following
order; (a) first, to any beneficiary under a deed of trust encumbering the
Premises, the amount of its interest in the Premises; (b) second, to Tenant, the
amount of any award specifically designated for loss of or damage to Tenant's
trade fixtures or removable personal property; and (c) third, to Landlord, the
remainder of such award, whether as compensation for reduction in the value of
the leasehold, the taking of the fee, or otherwise. If this Lease is not
terminated, Landlord shall repair any damage to the Premises caused by the
Condemnation, except that Landlord shall not be obligated to repair any damage
for which Tenant has been reimbursed by the condemning authority. If the
severance damages received by Landlord are not sufficient to pay for such
repair, Landlord shall have the right to either terminate this Lease or make
such repair at Landlord's expense.
21. Assignments And Subletting. Tenant shall have the right to assign
this Lease or sublease all or any portion of the Premises with the prior written
consent of Landlord, which consent shall not be unreasonably withheld. The
foregoing notwithstanding, Tenant may assign this Lease or sublease the
Premises, without Landlord's consent, to any corporation which controls, is
controlled by or is under common control with Tenant, or to any corporation
resulting from the merger of or consolidation with Tenant or which acquires all
or substantially all of the assets of Tenant ("Tenant's Affiliate"). In such
case, any Tenant's Affiliate shall assume in writing all of Tenant's obligations
under this Lease.
22. Remedies on Default. If Tenant breaches this Lease, Landlord in
addition to any other remedy given Landlord by law or equity, may:
(a) Continue this Lease in effect by not terminating Tenant's
right to possession of the Premises, in which case Landlord
shall be entitled to enforce all Landlord's rights and
remedies under this Lease, including the right to recover the
rent specified in this Lease as it becomes due under this
Lease.
Page 8 of 10 Pages
(b) Terminate this Lease and recover from Tenant:
(1) The worth, at the time of award, of the unpaid rent
that had been earned at the time of termination of
the Lease;
(2) The worth, at the time of award, of the amount by
which the unpaid rent that would have been earned
after termination of the Lease until the time of
award exceeds the amount of rental loss that Tenant
proves could have been reasonably avoided;
(3) The worth, at the time of award, of the amount by
which the unpaid rent for the balance of the term
after the time of award exceeds the amount of rental
loss that Tenant proves could be reasonably avoided;
and
(4) Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure
to perform the obligations under this Lease; or
(c) Terminate the Lease and, in addition to any recoveries Tenant
may seek under paragraph (b) of this Section, bring an action
to reenter and regain possession of the Premises in the manner
provided by the laws of unlawful detainer then in effect in
California.
23. Notices. Except as otherwise expressly provided by law, any and all
notices or other communications required or permitted by this Lease or by law to
be served on or given to either party to this Lease by the other party shall be
in writing and shall be deemed duly served and given when personally delivered
to the party to whom it is directed or, in lieu of personal service, when
deposited in the United States mail, first-class postage prepaid, addressed to
Landlord at 00000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000 or to Tenant c/o
American River Bankshares, 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxxxxx,
Xxxxxxxxxx 00000, attention Xxxxxxxx X. Xxxxxxx, Executive Vice President.
Either party, Landlord or Tenant, may change its address for purposes of this
Section by giving written notice of that change to the other party in the manner
provided in this Section.
24. Attorneys' Fees. If any litigation is commenced by either party to
enforce this Lease or the rights and duties of either party in relation to this
Lease, the party prevailing in that litigation shall be entitled, in addition to
any other relief that may be granted in the litigation, to a reasonable sum as
and for its attorneys' fees in the litigation, which shall be determined by the
court in that litigation or in a separate action brought for that purpose.
25. Binding on Heirs and Successors. This Lease shall be binding on and
shall inure to the benefit of the heirs, executors, administrators, successors,
and assigns of each Landlord and Tenant.
26. Sole and Only Agreement. This instrument constitutes the sole and
only agreement between Landlord and Tenant respecting the leasing of the
Premises to Tenant and correctly sets forth the obligations of Landlord and
Tenant to each other as of its date. Any prior or contemporaneous negotiations,
agreements or representations respecting the Premises or their leasing by
Landlord to Tenant, including but not limited to the letter of intent dated
April 11, 2007, not expressly set forth in this instrument are null and void.
The terms of this Lease may not be modified or amended except by an instrument
in writing executed by each of the parties hereto.
27. California Law. This Lease shall be governed by and construed in
accordance with the laws of the State of California. Venue and Jurisdiction in
connection with a dispute arising from the subject matter of this Lease shall be
in the Superior Court of Xxxxxx County.
Page 9 of 10 Pages
Executed as of the date first written above at Pioneer, California.
LANDLORD: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx, Trustee of
the Xxxxxx X. Xxxxxxx 2005 Trust
TENANT: Bank of Xxxxxx, a division of American
River Bank, a California banking
corporation
/s/ XXXXXXXX X. XXXXXXX
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Xxxxxxxx X. Xxxxxxx
Executive Vice President
Page 10 of 10 Pages
