1 ADDENDUM TO STANDARD MULTI-LESSEE OFFICE LEASE - GROSS
September 4, 2024
THIS ADDENDUM TO STANDARD MULT I-LESSEE OFFICE LEASE - GROSS ("Addendum") is made and entered into by and among The City of Garden Grove ("Lessor"), and Farmers and Merchants Bank of Long Beach, a California corporation (" Lessee"), as of the date set forth above (the "Effective Date") and on the first page of that certain Standard Multi-Lessee Office Lease – Gross lease form (the " AIR Form") between Lessor and Lessee to which this Addendum is attached and incorporated. The terms, covenants and conditions set forth herein are intended to and shall have the same force and effect as if set forth at length in the body of the AIR Form. Paragraph number references in this A ddendum are intended to track the corresponding paragraph numbers of the AIR Form, except as ot herwise noted. To the extent the provisions of this Addendum are inconsistent with any provi sions of the AIR Form, the provisions of this Addendum shall supersede and control. As used herein the term "Lease" shall mean, collectively, the AIR Form and this Addendum.
52. Effect of governmental authority of Lessor.
No approval or consent given hereunder by Lessor as a Party to this Lease shall be deemed an approval as to compliance or conformance with applicab le governmental codes, laws, rules, or regulations, nor shall any such act be interpreted to constitute an exercise of Lessor’s regulatory authority.
53. Taxes.
Lessor is a municipality subject to assessme nts but exempt from property taxation.
However, Revenue and Taxation Code 107 and 107.6 create a possessory tax assessed upon Lessees based on the leasehold interest in Lessor’s property. Lessor will endeavor to have all tax bills delivered to Lessor and subject to Paragraph 10.3, Lessor will pay all tax bills assessed upon Lessee’s leasehold interest. The initial assessment for the year 2025 shall be considered the Base Year for purposes of Paragraphs 4.2 and 10.3. In the event that the County Assessor delivers the tax bill to Lessee, Lessee agrees to remit the tax bill to Lessor for payment by Lessor.
54. Lessor Liability Insurance Coverage.
Lessor maintains a program of self-insurance for the first $2,000,000 of liability, including auto liability, per occurrence and carries excess policies fo r liability above the self- insurance.
55. Rent Abatement
Notwithstanding anything to the contrary contained in the L ease, Lessee shall not be obligated to pay any Base Rent for the first twelve (12) months of the Lease Term ("Initial Rent Abatement"). In addition to the Initial Rent Ab atement, Lessee shall be entitled to
2 abate or otherwise offset Base Rent for the pe riod after the first (12) months of the Lease Term to the extent of Lessee's Work Abatement, as defined and further set forth in the Work Letter Agreement attached hereto as Exhibit A and incorporated by this reference.
56. Rentable Square Feet of the Premises and the Project.
Within sixty (60) days of completion of the Demising Wall set forth in the Work Letter Agreement below, Lessor shall measure the rentable square footage of the Premises using the BOMA 2017 Office Standard, and the Base Rent and Lessee's share of Estimated Operating Expenses under Paragraphs 1.5 and 1.6, respectively, of the AIR Form shall be adjusted if necessary. Any adjustments to th e Base Rent and Lessee's share of Estimated Operating Expenses under this provision shal l be set forth in the Commencement Date Memorandum attached to the AIR Form. The Commencement Date Memorandum shall also include a table showing the Base Rent increases for the entire Lease Term based upon the Base Rent amount in such Commencement Date Memorandum. Lessor and Lessee acknowledge and agree that the Ba se Rent stated in the Lease is intended to be based on the square footage of th e Premises and is subject to adju stment should the actual size be determined to be different as set forth herein.
Prior to completing Lessor's Work set forth below, Lessor shall confirm (or adjust if necessary) the rentable square footage of the Project using the BOMA 2017 Office Standard, and Lessee's share of Estimated Operating Expenses under Paragraph 1.6 of the AIR Form shall be adjusted if necessary. A ny adjustment to Lessee's share of Estimated Operating Expenses under this provision shal l be set forth in the Commencement Date Memorandum attached to the AIR Form.
57. Common Areas – Changes.
In the event Lessor performs any of the actions under Paragraph 2.10 of the AIR Form, Lessor shall provide Lessee with at least twenty four (24) ho urs' prior written notice, and no such action shall unreasonably interfere with Lessee's use or access to the Premises.
58. Lessor's Work.
Lessor, at its sole cost and expense, shall co mplete the work set forth on the Work Letter Agreement attached hereto as Exhibit A ("Lessor's Work").
59. Lessor Delivery Date; Early Possession.
The "Lessor Delivery Date" shall be the earlier of the following: (a) the date of completion of Lessor's Work described in the Work Letter Agreement; or (b) four (4) months following the Effective Date. In the event Lessor fails to complete Lessor's Work and deliver the Premises upon the Lessor Delivery Date and otherwise under the terms required herein, Lessee may terminate this Lease by providing written notice to Lessor. Notwithstanding anything contained in the Lease to the contrary, following the Effective Date, Lessee shall
3 be entitled to Early Possession of the Premis es, and Lessee shall not be required to pay Base Rent or its Share of Operating Expenses during any portion of its Early Possession.
60. Operating Expenses.
Notwithstanding anything to th e contrary contained in th e AIR Form, the Operating Expenses shall not include any of the following:
(a) Expenses for services provided by Le ssor for the exclusive benefit of another lessee or lessees that is not of fered to Lessee or that is directly reimbursable by such other lessee or lessees;
(b) All costs, fees, and disbursements rela ting to activities for the solicitation, negotiation, and execution of leases fo r space in the Project (including but not limited to advertising costs, leasing commissions, court and dispute resolution proceeding costs of disputes, and attorneys' fees therefor);
(c) The cost of lessee improvements, build -out allowances, marketing costs, brokerage commissions, moving expe nses, assumption of rent under existing leases, costs of alterations to or payment of allowance for, or the decorating or the redecorating of space in the Project leased to other lessees and other concessions incurred in c onnection with leasing space in the Building and costs incurred in connecti on with the selling or change of ownership of the Building, including brokerage commissions, consultants', attorneys', and accountants' fees, closi ng costs, title in surance premiums, transfer taxes and interest charges;
(d) Capital improvements or expenditures except: (A) as expressly set forth in Paragraph 2.3 of the AIR Form, and (B) capital improvements necessary to maintain the structural integrity and functionality of the Building or Project; provided, however, that in the event Lessor demolishes or remodels all or a substantial portion of the existing Building, Lessee shall not be obligated to pay any share of such expenditures;
(e) The costs associated with the operation of the business of the ownership or entity which constitutes "Lessor," in cluding costs of selling, syndicating, financing, or mortgaging any of Lessor's interest in the Project;
(f) Rentals payable under any ground or underlying lease, if any;
(g) Depreciation, interest, and principal payments on mortgages, and other debt costs;
(h) Repairs or other work required due to fire or other casualty to the extent of insurance proceeds actually received by Lessor or that would have been
4 received by Lessor to the extent Lessor carried insurance required pursuant to this Lease;
(i) Payments to affiliates of Lessor to the extent such payments exceed fair market charges;
(j) Costs incurred by Lessor due to the vi olation by Lessor of the terms and conditions of any lease of space in the Building, Lessor's negligence or willful misconduct, or Lessor's inde mnification of any Lessee of the Building pursuant to the provisions of such Lessee's lease;
(k) Wages, salaries, fringe benefits, an d other compensation of executives or principals of Lessor above the level of building manager, and that portion of wage and salary costs and contract payments paid to Lessor's employees to the extent the work of such employees is not allocable to the Project, and any fee charged by Lessor for supervision of its own employees;
(l) Costs or expenses incurred by Lessor in the initial design, construction or development of the Building or the Project and any correction of defects in design or construction of the Building, including replacement of defective equipment;
(m) Costs of renovating or otherwise improving, decorating, painting or redecorating space for lessees, existing or prospective, or other occupants of the Building and the Project;
(n) Lessor's general corporate overhead and administrative expenses;
(o) Reserves set aside for maintenance, repair and/or replacement of Common Area improvements and equipment, except to the extent actually allocated and expended by Lessor for such purposes.
(p) Costs associated with th e monitoring, testing, removal, or remediation of Hazardous Materials in, about, or from th e Building or Project (other than ordinary removal costs for Hazardous Materials found in construction materials and supplies used in the or dinary operation and maintenance of the Building);
(q) Fines, costs, late charges, liquidated damages, penalties, tax penalties, or related interest charges imposed on Lessor or Lessor's property or Building manager;
(r) Costs and expenses for janitorial serv ices except in connection with the Common Area; and
5 (s) Any other expenses which, in accordance with generally accepted accounting principles, consistently a pplied, would not normally be treated as Operating Expenses by lessors of comparable buildings.
61. Operating Expenses – Budget and Audit.
On or before October 1 of each calendar year of the Lease Term, Lessor shall provide to Lessee a line-item and otherwise reasonably detailed budget of all projected Operating Expenses for the following calendar year.
Lessee shall have forty five (45) days fo llowing receipt of Lesso r's statement under Paragraph 4.2(f) of the AIR Form showing Lessee's Share of the actual Common Area Operating Expenses for the preceding year (the " Reconciliation Statement") to review and approve such charges. In the event Lessee does not approve the Reconciliation Statement, Lessee may give notice to Lessor of Lessee's intent to audit Lessor’s books and records in connection with the Operating Ex penses. Lessor shall promptly make the applicable records available to Lessee for the audit duri ng normal business hours in its offices or that of its management company in the City in which the Project is located and shall reasonably cooperate with Lessee or its representatives. Lessee shall have the right to: (i) make copies of any or all Lessor’s records if an on-site visit to Lessor’s office is required by Lessor; and (ii) hire any professional internal or third-party auditor that shall also have access to Lessor’s records for purposes of the audit. All the information obtained by Lessee and/or its auditor in connection with such audit, as well as any compromise, settlement, or adjustment reached between Lessor and Lessee as a result thereof, shall be held in strict confidence and, except as may be required pursuant to law, court order, or litigation, shall not be di sclosed to any third party, direc tly or indirectly, by Lessee or its auditor, other than to Lessee's attorneys, accountants or other such parties that are reasonably necessary. Lessor may require Le ssee's auditor to execute a separate confidentiality agreement affi rming the foregoing prior to the auditor conducting such audit.
62. Parking.
The two (2) reserved guest parking spaces spec ified in Paragraph 1.2(b) of the AIR Form shall be located immediately in front of the entry of the Premises. Additionally, Lessor will provide visitor-only parking for the Premises in the parking row nearest the entrance of the Building. A depiction of the reserved guest parking spaces and visitor-only parking spaces is attached hereto as Exhibit B and incorporated by this reference.
63. Building Access.
Lessee shall have full access to Premises twen ty four (24) hours per day, three hundred sixty five (365) days per year.
6 64. Premises Partial Damage.
In the event of any Premises Partial Damage th at is not caused by the gross negligence or intentional misconduct of Lessee a nd has not been fully repaired or restored within three (3) months from the date of damage or destruction, Lessee shall have the right to terminate the Lease by providing written notice to Lessor.
65. Sublet/Assignment.
Lessor’s consent to any sublet or assignment pursuant to Paragraph 12 of the AIR Form shall not be unreasonably withheld, conditioned or delayed.
66. Governing Body Approvals.
The execution of the Lease is subject to the approval of Lessee’s Board of Directors, and notification to the Federal Reserve Bank and California Department of Business Oversight.
The execution of the Lease is further subject to the approval of Lessor’s City Council.
67. Interruptions.
Notwithstanding anything to the contrary cont ained in the AIR Form, in the event of any discontinuance of any utility or service that is not caused by Lessee and not remedied by Lessor within twenty (20) days, Lessee shal l have the right to terminate the Lease by providing written notice to Lessor. Additionally, in the event any HV AC services to the Premises are interrupted, discontinued or otherwise not functioning properly for more than seventy two (72) hours, Lessee shall not be required to pay Ba se Rent for as long as such interruption, discontinuance or improper functioning continues.
68. Capital Expenditures Affecting Lessee's Use.
Lessor and Lessee acknowledge and agree that Lessee's Agreed Use is heavily regulated by federal and other applicable laws, and a ny disruption to Lessee's ability to use and occupy the Premises and otherwise hold it open for business may expose Lessee to significant fines, penalties or other disciplinary proceedings. Accordingly, in no event shall Lessor perform any Capital Expenditure that will cause Lessee to close its business to the public. Additionally, in the event Lessor intends to perform a Capital Expenditure otherwise permitted under the Lease that will ad versely change, modify, prohibit, inhibit, prevent or otherwise affect Lessee's access the Premises or otherwise adversely affect Lessee's use and occupancy of the Premises, then Lessor shall provide at least thirty (30) days' prior written notice to Lessee before beginning the construction or installation of such Capital Expenditure. Any such Capital Expenditure shall, if possible, be performed during non-business hours.
69. Signage.
The following signage for Lessee's benefit shall be installed on the Premises:
7 (a) directory signage in the interior of the Building at Lessor's sole costs and expense;
(b) a sign approved by Lessor on the front door ar ea of the Premises, at Lessor's sole cost and expense;
(c) one (1) eyebrow sign along the outside of the Building in a mutually agreeable location at Lessee's sole cost and expense; and
(d) a top or prominent position on a physical mo nument sign located on the corner of the Project near the intersection of Euclid Street and Garden Grove Boulevard, which shall be at Lessee’s sole cost. The monument sign shall contain spaces for three (3) tenant displays.
Upon completion of the installation of the mo nument sign, Lessor, at its sole cost and expense, shall take over responsibility fo r its maintenance and operation, except for Lessee’s display/sign copy. Lessee shall not pay rent for its sign display during the Original Term and shall only be required to pay fifty percent (50%) of fair market rental value for its sign display during any Option Term.
If Lessor and the City of Garden Grove (in its governmental capacity and not in its capacity as Lessor hereunder) approve a digital monume nt sign to replace the physical monument sign, Lessor and Lessee shall agree on the term s of Lessee's exposure on such signage, which such exposure shall incl ude at minimum, the maximum exposure available for an individual lessee or occupant of the Building.
70. Relocation.
Notwithstanding anything to the contrary contained in the Lease, any relocation of Lessee by Lessor under the terms of the Lease shall be to space that is on the ground floor of the Building, immediately faces the public street a nd is otherwise of comparable size and layout as the existing Premises. No such relo cation shall interfere with Lessee's signage permitted under the Lease, including without limitation, the eyebrow sign along the outside of the Building. Lessee's reasonable relocation expenses under this provision shall include without limitation, and Lessor shall be responsible for, any costs or expenses incurred by Lessee in relocating the tenant improveme nts, furniture, fixtures and equipment (collectively, the "FF&E") used in the Premises as of the date Lessee opens for business to the public, or in purchasing replacemen t FF&E if any of Lessee's FF&E cannot be reasonably relocated or moved to the relocated Premises. Prior to the Lessor Delivery Date, Lessee shall submit to Lessor a copy of Lessee's budget for the FF&E (the " FF&E Budget") as of the Lessor Delive ry Date for purposes of in forming Lessor of Lessor's potential costs in relocating or moving Lessee under this provision. In determining Lessee's reasonable relocation expenses, each line item of the FF&E Budget shall be determinative as to such item in the relocation unless Lesso r can independently verify error in any such line item, or otherwise provides an alterna tive cost proposal th at accomplishes full replacement of the FF&E in the new space as set forth hereunder without prejudicing Lessee's rights hereunder.
8 Lessee shall have the right to terminate this Lease effective one hundred twenty (120) days from the date Lessor provides Lessee with the original notification of intent to relocate if:
(a) the square footage of the Substitute Prem ises differs from the Premises by more than five percent (5%), whether larger or smaller; or (b) Lessee reasonably determines that the relocated Premises are not suitable for the conduct of Lessee's business.
71. Exclusive Use.
During the Term of this Lease (including any extensions thereto), Lessor shall not hereafter lease or license any space in the Building or Project to a lessee, tenant, licensee or occupant whose primary business is financial a nd banking and trust services (a "Competing Use") or permit any person, lessee, tenant, licensee or other occupant to use any portion of the Building or Project for a Competing Use. If Lessor violates the terms of this paragraph (an "Exclusive Use Violation"), and the Exclusive Use Violation continues for thirty (30) days after written notice from Lessee, then Base Rent shall be reduced to twenty five percent (25%) of the Base Rent otherwise due for each month or portion thereof during which such Exclusive Use Violation continues (" Reduced Rent"). If such Exclusive Use Violation continues for three (3) months or more, then Lessee shall have the right, upon written notice to Lessor, in addition to its other remedies available at law or in equity, to terminate this Lease at any time thereafter prior to the cure of such Exclusive Use Violation. Upon any termination provided in this paragraph, a ll Rent and other charges payable by Lessee hereunder shall be prorated through such date of termination and the Security Deposit shall be returned to Lessee as otherwise provided in the Lease.
72. Inducement Recapture. Notwithstanding anything to the contrary contained in the Lease, any rent, other charge, bonus, inducement or considerat ion abated under this Lease that is due and payable to Lessor under the terms of Paragraph 13.3 of the AIR Form by virtue of Lessee's Breach shall be amortized based on a straight-line amortization of such consideration over the full Lease Term (including any then applicable Option Terms).
73. Removal at End of Term. Notwithstanding a nything to the contrary contained in the Lease, and unless Lessor otherwise notifies Lessee in writing, Lessee agrees to remove from the Premises at the end of the Term any Trade Fixtures, Alterations and other equipment that is specific to the Agreed Use and cannot be reasonably used by a subsequent lessee of the Premises, including the bank vault.
[Signature Page Follows]
9 IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum as of the date specified above.
LESSOR:
THE CITY OF GARDEN GROVE
LESSEE:
FARMERS AND MERCHANTS BANK OF
LONG BEACH, a California corporation
B y :
N a m e :
Title:
B y :
N a m e :
Title:
B y :
N a m e :
Title:
B y :
N a m e :
Title:
10 EXHIBIT A
WORK LETTER AGREEMENT
The purpose of this Work Letter Agreement is to delineate the respons ibilities of Lessor and Lessee with respect to design and constructi on of the Project, Building and Premises under that certain Standard Multi-Tenant Office L ease – Gross dated September ___, 2024 and the Addendum thereto to which this Work Letter Agreement is attached (collectively, the "Lease") for the Premises commonly known as 12966 Euclid St reet, Suite 150, Garden Grove, California (the "Premises"). Any capitalized terms used in this Work Letter Agreement but not defined herein shall have the meanings ascribed to them in the Lease.
I. Lessor's Work.
A. Scope of Lessor's Work. As of the Commencement Date, Lessor shall furnish the Premises to Lessee with the following work complete ("Lessor's Work"):
1. Open Interior. Except as expressly provided herein, Lessor shall deliver the Premises to Lessee with an ope n interior, with no pa rtition walls, and the Premises shall be free and clear of any e quipment, personal property and improvements, including without limitation, any drop ceiling, ceiling grid, ceiling tiles, registers and light fixtures. The floor of the Premises shall be free of all carpet and shall be a concrete slab on grade for general occupancy. Lessor shall remove any existing telephone and data lines to the Premises. The Premises shall include an NFPA-UL hazard fire sprinkler system, complete with upright heads and plugs at th e fire protection lines of the Premises. Upon delivery, the perimeter walls shall be sande d, smooth-finished a nd non-textured The Premises shall be delivered in broom-clean condition, free of all debris and improvements.
2. Windows. Lessor shall make any repa irs or installations necessary to ensure the windows in the Premises are in good condition and do not otherwise leak.
Lessor shall replace any window glazing that is pealing, contains graffiti or other evidence of vandalism, or is otherwise in poor condition.
3. Utilities. Lessor shall delegate electrical sources between the Premises and any other adjacent space in the Building that does not constitute a portion of the Premises, including without limitation, th e Building space adjacent to the Demising Wall.
4. HV AC. Lessor shall provide h eating, ventilating and air conditioning ("HV AC") ducts from the Building's primary HV AC duct to the entry of the Premises for Lessee's use. Notwithstanding an ything to the contrary contained herein, Lessor shall deliver the Premises to Lessee with all existing HV AC ducts.
5. Environmental Report. Lessor sh all order and obtain, from a qualified organization reasonably approved by Lessee, an environmental investigation and report for the Premises showing any existing Hazardous Substances on the Premises,
11 including without limitation, any asbestos. Prior to the Commencement Date, Lessor shall take all remedial action required for the cl eanup of any Hazardous Substance (including without limitation, asbestos) shown or disclosed on such report.
6. Roof. Lessor shall perform any ne cessary repairs or upgrades to ensure the roof of the Building is in good condition.
7. Common Area Restrooms. Lessor shall upgrade and repair the two (2) existing Common Area restrooms in the ground floor lobby of the Building so that such restrooms are in good working order. Such restrooms shall fully comply with the Americans with Disabilities Act of 1990, as th e same may be amended from time to time ("ADA").
8. Parking Area. Lessor shall repair and upgrade the parking area in the Project. Such repair and upgrade shall includ e slurrying and restriping the parking area, removing, correcting or otherwise remedying hazar ds in the parking area (including tree roots or overgrown trees in or adjacent to the parking area), removing and replacing mature or overgrown trees located in or adjacent to the parking area, and installing appropriate lighting for the parking area. Lessor's im provements to the parking area under this provision shall fully comply with the ADA.
B. Building Warranties. Lessor represents and warrants that the Building and all Building systems are in good working orde r for a period of one (1) year from the Commencement Date.
C. Completion of Lessor's Work. Within thirty (30) days of the Lessor Delivery Date and Lessor's delivery of the Premises to Lessee, Lessee shall provide a punchlist of any items of Lessor's Work not completed by Lessor as required hereunder, and Lessor shall promptly (and in no event more than thirty (30) days from receipt of Lessee's punch list) complete and/or rectify such items.
II. Lessee's Work. Lessee shall complete the work set forth in this Section II ("Lessee's Work").
A. Lessee's Interior Work. Lessee's Work shall include the work reasonably necessary to construct and outfit the interior of the Premises and facilitate the use of the Premises for general banking and trust purposes ("Lessee's Interior Work"), as generally (but not exclusively) depicted on Exhibit A- 1, attached hereto and incorporated by this reference. Lessee shall pay for the costs of construction of Lessee's Interior Work. Lessee's Interior Work shall be undertaken under the terms set forth in this Work Letter, and for the avoidance of doubt, shall not be governed or restricted by the terms set forth in Paragraph 7 of the AIR Form. All design and construction of Lessee's Interior Work shall comply with all applicable statutes, ordinances, regulations, laws and codes of the City of Garden Grove and, as applicable, those of the County of Orange, State of California, the federal government and all other duly constituted au thorities exercising jurisdiction over the Premises and/or the Project.
12 B. Lessee's Exterior Work. Lessee shall complete the following Work to the exterior and Common Areas of the Build ing and/or Project (collectively, " Lessee's Exterior Work"):
1. Building Entry. Lessee shall updat e the exterior entry of the Building pursuant to the depiction attached hereto as Exhibit A-2 and incorporated by this reference. The Building entry shall be comp leted according to the general design of the Building, as determined by Lessee in its reasonable discretion. Lessee shall be responsible for costs related to ADA requirements resulting from any modifications to the entry of the Building.
2. Demising Wall. Lessee shall construct a demising wall (the "Demising Wall") separating the Premises from the adjacent space that will not constitute a portion of the Premises in the location de picted on Exhibit A-3 attached hereto and incorporated by this reference.
3. Fire Sprinklers and Alarm. Lessee sh all delegate any fire sprinkler system between the Premises and any other ad jacent space in the Bu ilding that will not constitute a portion of the Premises. Lessor shall cooperate with Lessee in connection with Lessee's delegation of such fire sprinkler systems, including without limitation, by providing Lessee access to all other portions of the Building reasonably necessary to complete the fire sprinkler delegation in this provision.
4. Entrances and Landscaping. Lesse e shall replace all existing carpeting in the entrance and lobby areas of the Building with new carpeting. The ground floor Common Areas and path of travel to the Premises shall fully comply with the ADA.
Lessee shall remove, remodel and/or replace the landscape planter currently located at the front entry of the Building so that the Building entry is fully visible. Lessee shall trim, reduce and otherwise modify the existing landscaping in the Project so that the Building is reasonably visible and such la ndscaping is not overgrown and does not block or impede the entry to the Building.
5. Exterior Lighting. Lessee shall install appropriate lighting illuminating the ATM area near the entrance of the Premises. Such lighting shall comply with all federal, state and local laws required in connection with proper illumination for an ATM area.
III. Lessee’s Work Abatement.
Lessor and Lessee acknowledge and agree th at for the cost of Lessee's Exterior Work performed under this Work Letter Agreement (including actual costs of professionals used in evaluating or performi ng Lessee's Exterior Work), Lessee shall be entitled to abatement of Base Rent under the Lease for the cost of such work incurred by Lessee (the " Lessee’s Work Abatement"). The Lessee’s Work Abatement shall be in addition to and not in lieu of the Initial Rent Abatement set forth in the Lease. The Lessee’s
13 Work Abatement shall not exceed Two Hundred Thousand Dollars ($200,000.00) without the prior written approval by Lessor. Upon completion of Lessee's Exterior Work, Lessee shall submit the Lessee’s Work Abatement amount to Lessor, and Lessor and Lessee shall execute an amendment to the Lease setting fo rth the abated Base Rent pursuant to the Lessee’s Work Abatement.
IV. Completion of Lessee's Plans Specifications.
A. Selection and Approval of Design Consultant. Lessee shall retain a planner ("Planner"), for the preparation of plans and specifications for Lessee's Work. The Planner shall not be paid or otherwise compensated by Lessor.
B. Lessee's Interior Work. Within sixty (60) days following the Effective Date of the Lease, Lessee shall cause the Planner to prepare and deliver to Lessor a copy of the working drawings showing Lessee's Interior Work.
C. Lessee's Exterior Work. Prior to commencing Lessee's Exterior Work, Lessee shall submit any plans, specifications , proposals or plans in connection with performing Lessee's Exterior Work for Lessor' s review and approval (collectively, the "Working Drawings"). Within ten (10) days of Lessor's receipt of the Working Drawings, Lessor shall return to Lessee one (1) set of the Working Drawings with Lessor's required modifications and/or approval. Lessor shall not unreasonably withhold, condition or delay its approval of the Working Drawings. If Lessee, upon receipt of the Working Drawings bearing Lessor's approval with required modi fications, wishes to take exception or otherwise object thereto, Lessee may do so in wr iting to Lessor within ten (10) days from the date of return by Lessor. Lessor shall then review and approve such Working Drawings within ten (10) days of receiving Lessee's objections or requested modifications thereto. If Lessor does not approve the Working Drawings as objected to and/or modified by Lessee, then Lessor and Lessee shall follow the fore going procedures for approving the Working Drawings until the same are finally approved by Lessor and Lessee; provided, however, that if Lessor and Lessee cannot agree on the Working Drawings within sixty (60) days of Lessee first submitting the Working Drawings to Lessor, then Lessee shall have the right to terminate this Lease by providing written notice to Lessor thereof.
V. Construction of Lessor's Work and Lessee's Work.
A. Prior to Commencement of Construction.
1. General Contractor. Promptly upon selection thereof, the parties shall designate to the other in writing the names and addresses of the general contractor (each, a "General Contractor", and together, the "General Contractors") for such party's work hereunder, and all major subcontractors to be used by such party for the construction and installation of such party's respective work hereunder. The General Contractor and all such major subcontractors for each party shall be properly licensed and insured contractors.
Lessee shall not be required to provide any payment or performance bonds in connection with Lessee’s Work.
14 2. Representatives. Lessor hereby designates
1, as its construction representative (" Lessor's Representative ") and Lessee hereby designates Trinity Investme nts GP, Christine Walker-Bowman as its construction representative (" Lessee's Representative"). Either Lessor or Lessee may designated successor construction representati ves by written notice to the other party, delivered according to the terms for delivering notices set forth in the Lease. Lessor's Representative, Lessee's Representative, the Planner and the General Contractor shall meet and/or otherwise communicate as often as is ne cessary in order to comply with this Work Letter Agreement and provide for the expedi tious construction of Lessor's Work and Lessee's Work.
3. Compliance; Cooperation. Lessor's Work and Lessee's Work shall comply in all respects with applicable federal, state, city and count y statutes, ordinances, regulations, laws and codes, including without limitation, the ADA. All required building, sign and other permits in connection with the construction and completion of Lessor's Work and Lessee's Work shall be obtained and paid for by the party required to perform such work hereunder in a timely fashion when due. Lessor and Lessee hereby acknowledge and agree that neither Lessor, Lessee, the Genera l Contractors nor any subcontractors shall in the construction of Lessor's Work or Lessee' s Work, as applicable , do anything that jeopardizes the labor relations of others in the Project. Le ssor and Lessee shall work in harmony with and shall not unrea sonably interfere with any labor employed by the other, or by any of the contractors, employees or agents of the other, with respect to the performance of Lessor's Work and Lessee's Wo rk by the applicable party. Lessor shall reasonably cooperate with Le ssee's completion of Lessee' s Work, including without limitation, the operation of the Building and the orderly scheduling of maintenance and repairs in effort to avoid or minimize any interference therewith.
B. Required Insurance.
1. General Insurance. Prior to commencement of any construction of Lessor's Work or Lessee's Work, the responsible party shall furnish to the other evidence that the applicable General Contractor and all subcontractors have and will maintain throughout the construction process at least the following insurance:
(i) Workers' Compensation, as required by state law, and including Employer's Liability Insurance, with a limit of not le ss than One Million Dollars ($1,000,000.00), and any insurance required by any Employee Benefit Acts or other statutes applicable where the work is to be performed as will protect the General Contractors and subcontractors from any and all liability under the aforementioned acts or statutes.
(ii) Broad Form Comprehensive Ge neral Liability Insurance (including Contractor's Protec tive Liability) with a minimu m combined single limit of liability of Two Million Dollars ($2,000,000.00). In addition to the foregoing, each party
1 NOTE TO LESSOR: Please identify construction representative.
15 shall provide the other with Comprehensiv e Automobile Liability Insurance with a minimum combined single limit of liabili ty of One Million Dollars ($1,000,000.00) and which shall insure against all loss in conn ection with the ownership, maintenance and operation of automotive equipment that is owned, hired or non-owned. All such insurance shall insure against any and all claims fo r bodily injury, incl uding death resulting therefrom, and damage to or destruction of property of any kind whatsoever and to whomsoever belonging, and arising from the General Co ntractors' operations under the contract and whether such operations are performed by the General Contractors, subcontractors or any of their sub-subcontract ors, or by anyone dir ectly or indirectly employed by any of them.
2. Builder's Risk Insurance. Each party shall insure such party's work and the components thereof prior to completion of such party's work.
3. Certificates. Certificates of Insurance in compliance with this Work Letter Agreement shall be provided by each pa rty to the other prior to commencement of any construction activity by the applicable Gene ral Contractor or othe rs with regard to Lessor's Work and Lessee's Work, as applicable. No reduction in the amounts or limits of liability or cancellation of such insurance coverage sha ll be undertaken without prior written notice to the other part y hereto at least fifteen (15) days before such reduction, cancellation or modification.
C. Commencement of Construction.
1. Lessor and Lessee agree to proceed with their respective construction diligently, and to complete their work in strict accordance with this Work Letter Agreement and the Lease.
2. Prior to the undertaking of any construction work that deviates from the this Work Letter Agreement, or the undertaking of any material modifications whatsoever to the Building and/or utilities or other work not expressly set forth herein, the written approval of the other party hereto shall be obtained by the party making such change.
3. Each party hereto shall be fully responsible for the operations and activities of such party's General Contractor and all subcontractors employed or utilized by such General Contractor, and other individuals and or contractors employed by such party in the completion of such party's work hereunde r. Any such contractor and/or individual shall repair any damage to any work caused by it or its work.
4. Lessor and its General Contractor shall be responsible for compliance with all applicable union and othe r agency benefits pl ans with regard to construction of Lessor's Work. Lessee shall have no liability or responsibility whatsoever with regard to such matters.
16 5. Each party hereto shall be resp onsible for enforcement of all warranties from such party's General Contract or and other parties regarding such party's work. Notwithstanding any contrary provision of the Lease or this Work Letter Agreement, neither party hereto shall be required to remedy or correct any situation arising as a result of any matter covered by the warranties of the other party.
D. Payment of Construction Costs. Except as expressly provided herein, each party shall be responsible for payment of all costs, charges and expenses of such party's work, including, without limitation, all fees and charges of such party's General Contractor.
E. Certificate of Acceptance. Upon the completion of Lessee's Work, Lessor shall inspect the Premises and shall issue a Certificate of Acceptance of the Premises.
17 Exhibit A-1
Depiction of Lessee's Interior Work
18 Exhibit A-2
Depiction of Building Entry
[Attached hereto]
19 Exhibit A-3
Depiction of Demising Wall
[Attached hereto]
20 EXHIBIT B
PARKING DEPICTION
[Attached hereto]