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Resolution 5032 - Authorizing Purchase and Sale Agreement - Wells Fargo BankRESOLUTION NO.5032 A RESOLUTION TO AUTHORIZE THE EXECUTION OF A PURCHASE AND SALE AGREEMENT WITH WELLS FARGO BANK FOR THE PURCHASE BY THE CITY OF KALISPELL OF THOSE FACILITIES LOCATED AT 201 FIRST AVENUE EAST, KALISPELL, MONTANA ALONG WITH THE APPURTENANCES THERETO. WHEREAS, the Kalispell City Council recognizes the need of the City to acquire additional space to house its City offices; and WHEREAS, the facility currently housing the Wells Fargo Bank. at 201 First Avenue East, Kalispell, located within one block of current City Hall, has become available for sale and has been offered to the City of Kalispell for the sale price of $1.,100,000; below its October 2004 appraised value of $1,400,000; and WHEREAS, an investigation of the Wells Fargo building shows it to be a well -maintained facility containing more than 19,000 square feet of usable space on two floors that comes with 38 parking spaces; and WHEREAS, the acquisition of the Wells Fargo facility by the City will enable the City to house all of its departments within that facility and current City Hall into the next decade and thereby allow the City to eliminate its leasehold costs as well as improve the access needs of the public to City services; and WHEREAS, as a part of the negotiations with wells Fargo Bank for the purchase of its facility, the City will agree to lease the facility, at market rate, back to Wells Fargo for a period of up to one year to allow it the necessary time to construct a new banking facility within the City for its use. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION I. The City is hereby authorized to enter into the Purchase and Sale Agreement, attached hereto as Exhibit "A", with the Wells Fargo Bank for the purchase of its facilities at 201 First Avenue East, Kalispell, Montana. SECTION II. The City is hereby authorized to enter into the Leasehold Agreement, attached hereto as Exhibit "B", with wells Fargo Bank for the leaseback to wells Fargo Bank of its facilities at 201 First Avenue East, Kalispell, Montana for a period of UP to one year. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 18th DAY OF JULY 200 . amela B. Kennedf"� ATTEST: Mayor Theresa White City Clerk AGREEMENT OF PURCHASE AND SALE THIS AGREEMENT of PURCHASE AND SALE (this "Agreement"), dated as of July 22, 2005, is made between WELLS FARGO BANK, N.A., a national banking association ("Seller"), and CITE( of KALISPELL, MONTANA, a municipal corporation ("Buyer"), who for valuable consideration received, agree as follows: 1. Definitions. For the purposes of this Agreement the following terms shall be defined as follows: 1.1 Bill of Sale. The term "Bill of Sale" shall mean that certain Bill of Sale, the form of which is attached hereto as Exhibit D, pursuant to which Seller shall convey to Buyer the furniture, fixtures, equipment and other personal property comprising a park of the Property. 1.2 Broker. None. 1.3 Buyer Inspection. The term "Buyer Inspection" shall have the meaning given thereto in Section 5.2, below. 1.4 Closing; Close of Escrow; Closing Date. The "Closing" or the "Close of Escrow" shall mean the consummation of the purchase and sale of the Property in accordance with this Agreement, as evidenced by the recording of the Deed in the official records of the county in which the Property is located. closing and Close of Escrow are terms used interchangeably in this Agreement. The "Closing Date" shall be the date that Close of Escrow occurs, which shall not be later than September 18, 2005. The Closing Date may not be extended beyond September 18, 2005 unless agreed to in writing by Seller in its sole and absolute discretion. 1.5 Deed. The term "Deed" shall have the meaning given thereto in Section 7, below. 1.6 Due Diligence Materials. The term "Due Diligence Materials" means the reports, surveys and other materials listed on Exhibit C, attached hereto. 1.7 Due Diligence Period. The "Due Diligence Period" is the period commencing on the Effective Date and ending on July 28, 2005, during which Buyer must complete its due diligence as described in Section 5, below. 1.8 Effective Date. The "Effective Date" is the date set forth below the signature(s) of the party which is the last to sign this Agreement. 1.9 Environmental Law. The term "Environmental Law" means any law, statute, ordinance or regulation pertaining to health, industrial hygiene or the environment D:1Documents and Settingslrader.AD-EWRI-ocal Settings\Temporary Internet Files\0LK38D1ps.1160.v5.doc 1 including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and the Resources conservation and Recovery Act of 1976, as amended. 1.10 Escrow. The term "Escrow" shall have the meaning given thereto in Section 11, below. 1.11 Escrow Holder. The "Escrow Holder" shall be a title insurance company or similar company experienced in handling real estate escrows in the Kalispell area that is mutually acceptable to the parties. 1.12 Exhibits. The term "Exhibits" means the following, each of which is attached hereto and incorporated herein by this reference: Exhibit A - Legal Description of Real Property Exhibit B - Form of Deed Exhibit C - Due Diligence Materials Exhibit D - Form of Bill of Sale Exhibit E - Form of WFB Branch Lease 1.13 Hazardous Substance. The term "Hazardous Substance" means any substance, material or waste which is or becomes designated, classified or regulated as being "toxic" or "hazardous" or a "pollutant" or which is or becomes similarly designated, classified or regulated, under any Environmental Law, including asbestos, petroleum and petroleum products. 1.14 Non -Foreign certificate. The term "Non -Foreign Certificate" shall have the meaning given thereto in Section 9.2.1.3, below. 1.15 Notices. The term "Notices" means all notices or other communications required or permitted hereunder, which Notices shall be sent as follows to: Seller: Wells Fargo Bank, N.A. Corporate Properties Group 633 Folsom Street, 6th Floor San Francisco, California 94107 Attn: Mr. Jeff Rader with a copy to: MBV LAW LLP 855 Front Street San Francisco, California 94111 Attn: Christopher Arnold, Esq. CADocurnents and SettingsVader.AD-ENTUcaf Settings\Ternporary Internet Fi1esloLK38Dlps.1160.v5.doc 2 Buyer: CITY OF KALISPELL P.O. Box 1997 312 First Avenue East Kalispell, MT 59903-1997 Attn: City Manager 1.16 Permitted Exceptions. The term "Permitted Exceptions" shall have the meaning given thereto in Section 8.2.1.2, below. 1.17 Property. The term "Property" shall have the meaning given thereto in Section 2, below. 1.18 Proration Date. The term "Proration Date" shall have the meaning given thereto in Section 9.5.2, below. 1.19 Purchase Price. The "Purchase Price" for the Property is One Million One Hundred Thousand Dollars ($1,100,000.00). 1.20 Real Estate compensation. The term "Real Estate compensation" shall have the meaning given thereto in Section 10, below. 1.21 Real Property. The term "Real Property" means the land and improvements generally described as 201 First Avenue East, Kalispell, MT. The Real Property is more particularly described in Exhibit A, attached hereto. 1.22 Seller's Account. The term "Seller's Account" means the account to which the Purchase Price (less Seller's share of closing costs and prorations) shall be wired pursuant to written instructions to be furnished to Escrow Holder by Seller prior to Close of Escrow. 1.23 Termination Notice. The term "Termination Notice" shall have the meaning given thereto in Section 5.3, below. 1.24 Title Company. The "Title Company" shall be a title insurance company in the Kalispell area that is mutually acceptable to the parties. 1.25 Title Policy. The term "Title Policy" shall have the meaning given thereto in Section 7, below. 1.20 WFB Branch Lease. The term "WFB Branch Lease" shall mean the Lease of Seller's bank branch premises, between Buyer, as lessor, and Seller, as lessee, the form of which is attached hereto as Exhibit E. CADocuments and Settingslrader.AD-ENT\Loca1 SettingsUemporary Internet Files10LK38Mps.1160.v5.doc 3 2. Purchase and Sale of Pro e . Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller on the terms hereinafter set forth all of Seller's right, title and interest in the Real Property, including all improvements located on the Real Property, together with all rights and appurtenances pertaining thereto (collectively, the "Property"). 3. Purchase Price. Not later than two (2) days immediately prior to close of Escrow, Buyer shall deposit with Escrow Holder, by immediately available federal wire transfer or cashier's check, the Purchase Price of One Million One Hundred Thousand Dollars ($1,100,000-00), plus or minus the closing adjustments and prorations described in Section 9.5. 4. Remedies. 4.1 SELLER DEFAULT. IF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT DOES NOT CLOSE SOLELY AS A RESULT OF A DEFAULT BY SELLER, BUYER'S SOLE REMEDY SHALL BE SPECIFIC PERFORMANCE OF THIS AGREEMENT AGAINST SELLER, WITH BUYER HEREBY WAIVING ANY OTHER REMEDY WHICH BUYER MAY HAVE AGAINST SELLER. Buyer: 4.2 BUYER DEFAULT. IF THE TRANSACTION CONTEMPLATED HEREUNDER IS NOT CONSUMMATED DUE TO A DEFAULT BY BUYER, SELLER MAY PURSUE ALL RIGHTS AND REMEDIES AVAILABLE TO IT IN LAW AND IN EQUITY, AND IN ADDITION, SELLER MAY IMMEDIATELY TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO BUYER AND WITHOUT FURTHER OBLIGATION TO BUYER. 5. Due Diligence. 5.1 Due Diligence Materials. To the extent Seller has not already done so, Seller shall make available to Buyer the Due Diligence Materials for use by Buyer in connection with Buyer's investigation of the Property. Notwithstanding the foregoing, Seller shall not make available to Buyer (i) any appraisals of the Real Property, (ii) any financial projections relating to the Real Property, (Iii) correspondence relating to routine management and maintenance matters, and (iv) any reports or studies prepared or commissioned by Seller concerning the extent to which the improvements located on the Real Property are in compliance with the Americans With Disabilities Act. Seller makes no representation or warranty of any kind with respect to the Due Diligence Materials, including their accuracy, completeness or suitability for reliance thereon by Buyer. CADocuments and SettingsVader.AD-ENTIocai Settings7emporary Internet Files\OLK38 ps.I 160.v5.doc 4 5.2 Buyer Inspections. During the Due Diligence Period, provided that Buyer is not in default hereunder, Buyer shall have the right to enter and inspect the Real Property (each, a "Buyer Inspection") pursuant to the following terms and conditions: 5.2.1 Expenses. Each Buyer Inspection shall be at Buyer's sole cost and expense. 5.2.2 License; Insurance. The persons or entities performing the Buyer Inspection shall be properly licensed and qualified, shall have obtained all of the appropriate permits for performing relevant tests and shall have delivered to Seller, prior to performing any tests or entering the Real Property, evidence of proper and adequate insurance reasonably satisfactory to Seller. In addition, if a Buyer Inspection requires more than a visual inspection of the Real Property, then before undertaking such Buyer Inspection, Buyer shall arrange for Seller to be named as an additional insured on Buyer's commercial public liability insurance policy covering liability to property or persons for Buyer's activities on or about the Real Property in an amount not less than Two Million Dollars ($2,000,000.00). 5.2.3 No Interference. Buyer and its representatives, agents or designees shall not interfere with Seller's or its tenants' business operations on, or use of, the Real Property. 5.2.4 Liens. Buyer shall not cause or suffer any lien or other encumbrance to be recorded against the Real Property, and shall promptly cause any lien or other encumbrance caused or suffered by Buyer [including mechanics' liens arising out of Buyer's activities under this Section 5.2] to be immediately discharged or bonded over, to Seller's satisfaction. 5.2.5 Restoration. If any portion of the Real Property is damaged due to Buyer's entry on the Real Property, Buyer shall, at its sole cost and expense, immediately repair and restore the Real Property to the same condition the Real Property was in immediately prior to the date the damage occurred. 5.2.5 indemnity. Buyer shall indemnify, protect and defend (by counsel reasonably acceptable to Seller) and hold harmless Seller for, from and against any and all claims, damages, costs, liabilities and losses and expenses arising out of any entry, investigations, inspections, tests and other activities undertaken by Buyer or its agents, designees or representatives, including (A) reasonable attorneys' fees and expenses and other reasonable costs and expenses incurred by Seller in connection with investigating or defending any such matters, (B) any and all costs or expenses incurred by Seller resulting from or arising out of the aggravation of physical defects or conditions regarding hazardous, toxic or contaminated substances or materials and (C) any and all costs or expenses incurred by Seller in defending, discharging or bonding over any liens or encumbrances against the Property resulting from Buyer's activities with respect thereto. This indemnity provision shall survive Close of Escrow or any CADocuments and SettingsVader.AD-ENT11-ocal Settings\Temporary Internet FilesloLK38Dlps.1160-v5.doc 5 earlier termination of this Agreement and shall not be reduced or impaired by Seller's receipt of any sums as liquidated damages hereunder. 5.2.7 Confidential. Each Buyer Inspection, and the results thereof, shall remain confidential pursuant to the terms of Section 12.16. 5.3 Disapproval of Due Diligence Materials or Buyer Inspections. Buyer shall have the right, at any time during the Due Diligence Period, to reasonably disapprove the results of (i) Buyer's review of the Due Diligence Materials, or (ii) the Buyer Inspections of the Real Property, or (Iii) Buyer's investigation and review of all other physical, environmental, legal and any other matters relating to the Property as Buyer may elect to investigate and review (including, without limitation, Phase II ground soils testing, the suitability of the Property for prospective tenants; the availability of permits, variances and other governmental approvals for any demolition and improvements contemplated by Buyer; the condition of building roof, HVAC equipment and pest infestation; and tax and utility costs). If Buyer disapproves of any of the foregoing, Buyer may terminate this Agreement by providing Seller and Escrow Holder with written notice thereof (a "Termination Notice") on or prior to the last day of the Due Diligence Period. If Buyer delivers a Termination Notice to Seller and Escrow Holder during the Due Diligence Period, then (a) this Agreement, and all of the obligations, rights and liabilities of the parties to each other hereunder (except for Buyer's indemnification obligations under Section 5.2.5, Buyer's restoration obligations under Section 5.2.5, and the parties" confidentiality obligations under Section 12.15), shall terminate and be of no further effect, and (b) Buyer shall immediately return to Seller the Due Diligence Materials and, if requested by Seller, deliver to Seller any written reports, tests or memoranda in Buyer's possession relating to the Buyer Inspections of the Real Property (including the results of Buyer's Phase II investigation). 5.4 Title. If Buyer objects to any exceptions to title shown in the preliminary report referred to in Section 8.2. 1.2, then unless such exception is of the type described in clauses (i) through (v) of Section 8.2.2.1, Buyer may deliver a Termination Notice to Seller prior to the expiration of the Due Diligence Period that will be effective unless Seller commits to Buyer, before ten (10) days following expiration of the Due Diligence Period, to removing the exceptions or defects objected to by Buyer at Close of Escrow. 5.5 City Council Approval. If the City Council of Kalispell, Montana, fails to pass a resolution or other authorizing directive committing Buyer to the purchase of the Property in accordance with this Agreement, Buyer may deliver a Termination Notice to Seller prior to the expiration of the Due Diligence Period. 5.5 Effect of Failure to Deliver Termination Notice. If Buyer fails to provide Seller and Escrow Holder with a Termination Notice prior to the expiration of the Due Diligence Period, then (i) Buyer shall be deemed to have approved the results of Buyer's review of the Due Diligence Materials and the Buyer Inspections of the Real Property and waived Buyer's right to terminate this Agreement due to a failure of the conditions precedent described in Section 8.2.1 of this Agreement, and (ii) the parties shall proceed with CADocuments and SettingsVader.AD-EN-RLocal SettingsUemporary Internet Fi1esloLK38Dlps.I150.v5.doc 6 Close of Escrow in accordance with the terms of this Agreement. If Buyer delivers a Termination Notice that is effective only if Seller fails to commit to Buyer to removing the exceptions or defects objected to by Buyer at close of Escrow, then such conditional Termination Notice shall be treated as null and void if Seller does in fact commit, in a timely fashion, to removing the exceptions or defects objected to by Buyer. In any event, the parties' participation in close of Escrow shall be deemed a waiver of (i) each party's ability to terminate this Agreement on the basis of any failure of any conditions precedent and (ii) each party's right to seek damages from the other party for the breach of any representations, warranty or covenant of which the non -breaching party had actual knowledge prior to close of Escrow. 6. Status. 6.1 As Is Purchase. Buyer shall examine, inspect and conduct its own investigation of all matters with respect to taxes, bonds, environmental conditions, the suitability of the Property for prospective tenants, the availability of permits, variances and other governmental approvals for any demolition and improvements contemplated by Buyer, the condition of building roofs, HVAC equipment and pest infestation, tax and utility costs, permissible uses, title, zoning, covenants, conditions and restrictions and all other matters which, in Buyer's judgment, bear upon the value and suitability of the Property for Buyer's purposes. Except as otherwise specifically stated in Section 11.2, Seller hereby specifically disclaims any warranty, guaranty or representation, oral or written, past, present or future, of, as to or concerning: (i) the nature and condition of the Property, including the water, soil, geology, environmental conditions (including the presence or absence of any Hazardous Substance), and the suitability thereof for any and all activities and uses which Buyer may elect to conduct thereon; (11) the nature and extent of any right-of-way, lease, possession, lien, encumbrance, license, reservation, condition or otherwise; (iii) the compliance of the Property or its operation with any laws, ordinances or regulations of any government or other body (including the Americans With Disabilities Act); or (iv) the availability of permits, variances and other governmental approvals for any demolition and improvements contemplated by Buyer. The sale of the Property as provided for herein is made on an "AS IS" basis, and Buyer expressly acknowledges that, in consideration of the agreements of Seller herein, except as otherwise expressly specified in this Agreement, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAVA, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF CONDITION, HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY. 6.2 Release. Except for any breach by Seller of any representation or warranty of Seller contained in Section 11.2, Buyer, for itself and its successors and assigns, hereby releases and for -ever discharges Seller and its successors and assigns from, and waives any right to proceed against Seller and its successors or assigns for, any and all cost, expense, claim (including claims for rescission or reformation), liabilities and demands (including reasonable attorneys' and consultants' fees) at law or in equity, whether known or unknown, arising out of the physical, environmental, economic, legal CADocuments and Settingskrader.AD-ENTILocal Settings\Temporary Internet Files\0LK38Dlps.I 180.v5.doc 7 or other condition of the Property, including, without limitation, any claims for contribution or cost recovery pursuant to any Environmental Law, which Buyer or Buyer's successors or assigns has or may have in the future. Buyer hereby specifically acknowledges that Buyer has carefully reviewed this Section, and discussed its import with legal counsel, is fully aware of its consequences, and that the provisions of this Section are a material part of this Agreement. Buyer ( grees. 6.3 Indemnity. 6.3.1 Seller's Indemnity. Seller shall indemnify, protect and defend by counsel reasonably acceptable to Buyer and hold harmless Buyer from and against any and all claims, damages, losses, costs, expenses and liabilities (including all reasonable attorneys' fees and court costs paid or incurred by Buyer) which arise out of or are in any way connected with any misrepresentation or breach of warranty or covenant by Seller in this Agreement. This indemnity does not apply, however, to any item, matter, occurrence or condition which was known to or reasonably discoverable by Buyer prior to the Closing Date. 6.3.2 Buyer's Indemnity. Buyer shall indemnify, protect and defend by counsel reasonably acceptable to Seller and hold harmless Seller from and against any and all claims, damages, losses, costs, expenses and liabilities (including all reasonable attorneys" fees and court costs paid or incurred by Seller) which arise out of or are in any way connected with the ownership and/or operation of the Property after the Closing Date or any misrepresentation or breach of warranty or covenant by Buyer in this Agreement or any document delivered to Seller pursuant to this Agreement. 6.3.3 Indemnified Parties. For purposes of this Section 6.3, all references to "Buyer" or "Seller" as an indemnified party shall include (A) their parent, subsidiary or affiliate corporations and (B) their directors, officers, shareholders, employees and agents. 6.4 Survival. The provisions of this Section 6 shall survive the Closing Date. 7. Warranty Deed. Seller shall convey the Real Property to Buyer by a warranty deed (the "Deed"), in the form of Exhibit B, attached hereto. The conclusive evidence of delivery of title to the Real Property by Seller to Buyer shall be the willingness of Title Company to issue, upon payment of Title Company's regularly scheduled premium, an owner's standard form title insurance policy (the "Title Policy") in the amount of the Purchase Price, showing title to the Real Property vested of record in Buyer, subject only to such exceptions as are recited in Section 8.2.2.1 below. CADocuments and Settingslrader.AD-EWRI-ocal Settings\Temporary Internet Fi WOLK38Mps.116o.v5.doc 8 8. Conditions Precedent to Close of Escrow. In addition to the documents and funds that must be deposited into Escrow prior to Close of Escrow as detailed in Section 9.2, the following are conditions precedent to Nose of Escrow: 8.1 Seller. Seller's obligation to proceed with close of Escrow is conditioned on the satisfaction of each of the following by not later than the Closing Date: 8.1.1 No Suit. As of Close of Escrow, no suit, action or other proceeding shall be pending or threatened which seeks, nor shall there exist any judgment the effect of which is, to restrain the purchase and sale of the Property. 8.1.2 Buyer's Representations. Buyer's representations and warranties set forth herein shall be true and correct as of Close of Escrow. 8.1.3 Buyer's Covenants. Buyer shall have performed all of Buyer's covenants and agreements contained herein which are required to be performed by Buyer on or prior to Close of Escrow. 8.1.4 New Branch Location. on or prior to the Closing Date, Seller must have determined, in its reasonable discretion, that it has secured a satisfactory site for the relocation of its retail bank branch formerly operated from the Property. 8.2 Buyer. Buyer's conditions precedent to Close of Escrow are the following: 8.2.1 Due Diligence Period. During the Due Diligence Period: 8.2.1.1 Inspection. Buyer's approval of the Buyer Inspections, the Due Diligence Materials, and all other physical, environmental, legal and any other matters relating to the Property as Buyer may elect to investigate. 8.2.1.2 Preliminary Report. Buyer's inspection and approval of a current preliminary report issued by Title company for the Real Property and all of the exceptions contained in such report. All of the exceptions contained in the preliminary report -- apart from those enumerated in clauses (i) through (v) of Section 8.2.2.1 below -- which are approved or deemed approved by Buyer (as provided in Section 5.4) are hereinafter referred to as the "Permitted Exceptions." 8.2.1.3 City Council Approval. Approval of the purchase of the Property pursuant to this Agreement by the City Council of the City of Kalispell, Montana. 8.2.2 Close of Escrow. As of Close of Escrow: 8.2.2.1 Title Policy. The willingness of Title Company to issue, upon the payment of its regularly scheduled premium, a Title Policy for the Real Property, subject CADocuments and Settingslrader.AD-ENT\Local SettingsUemporary Internet Fi1esl0LK38Dlps.I180.v8.doc 9 only to the Permitted Exceptions, and (1) any lien for real property taxes and assessments not then delinquent; (ii) matters affecting the condition of title to the Real Property created by or with the written consent of Buyer; (iii) any matters that would be shown by any survey of the Real Property or by inquiry of persons in possession of the Real Property; (iv) the WFB Branch Lease; and (v) any covenants, conditions and restrictions recorded as an interest affecting the Real Property. 8.2.2.2 No Suit. No suit, action or other proceeding shall be pending or threatened which seeks, nor shall there exist any judgment the effect of which is, to restrain the purchase and sale of the Property. 8.2.2.3 Seller's Representations. Seller's representations and warranties set forth herein shall be true and correct. 8.2.2.4 Seller's Covenants. Seller shall have per -formed all of Seller's covenants and agreements contained herein which are required to be performed by Seller on or prior to Close of Escrow. 8.3 Failure of Conditions. If any of the conditions set forth above in Section 8.1 remain unsatisfied as of the deadline for Close of Escrow, then Seller may terminate this Agreement by giving written notice of termination to Buyer within ten (10) days following such deadline, whereupon all rights and obligations of the parties one to the other shall cease and terminate (except for Buyer's indemnification obligations under Section 5.2.6, Buyer's restoration obligations under Section 5.2.5, and the parties' confidentiality obligations under Section 12.15). If any of the conditions set forth above in Section 8.2.2 remain unsatisfied as of the deadline for close of Escrow, then this Agreement shall terminate automatically, unless Buyer immediately waives the condition(s) precedent that remain unsatisfied and immediately proceeds to close Escrow. If this Agreement terminates for failure of one or more conditions set forth in Section 8.2.2, all rights and obligations of the parties one to the other under this Agreement shall cease and terminate (except for Buyer's indemnification obligations under Section 5.2.6, Buyer's restoration obligations under Section 5.2.5, and the parties' confidentiality obligations under Section 12.18). 9. Closin 9.1 Time. Escrow shall close ("Close of Escrow") when all documents and funds specified in this Section 9 have been deposited into Escrow. The failure of Seller or Buyer to be in a position to close Escrow by the closing Date shall constitute a default under this Agreement. 9.2 Documents. Not less than two (2) days prior to Close of Escrow, which shall occur on or before September 18, 2005, the parties shall deposit into Escrow the funds and the documents described below. 9.2.1 Seller. Seller shall deposit the following: CADocuments and SettingsVader.AD-ENTIocaf SettingsUemporary intemet Files1OLK38Dlps.1160.v5.doc 10 9.2. 1.1 Deed. The duly executed and acknowledged Deed, conveying the Real Property to Buyer; 9.2.1.2 Bill of Sale. The duly executed Bill of Sale; 9.2. 1.3 Non -Foreign Certificate. A duly executed certificate (the "Non - Foreign Certificate") from Seller certifying that Seller is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code; 9.2.1.4 WFB Branch Lease. A duly executed counterpart or counterparts of the WFB Branch Lease; 9.2.1.5 Additional Documents. Such other documents, including escrow instructions, as may be reasonably required of Seiler to close the transaction in accordance with this Agreement. 9.2.2 Buyer. Buyer shall deposit the following: 9.2.2.1 Remainder of Purchase Price. The remainder of the Purchase Price; 9.2.2.2 Additional Funds. Additional cash in the amount necessary to pay Buyer's share of the closing costs and prorations, as hereinafter set forth; and 9.2.2.3 WFB Branch Lease. A duly executed counterpart or counterparts of the WFB Branch Lease; 9.2.2.4 Additional Documents. Such other documents and funds, including escrow instructions, as may be reasonably required of Buyer to close the transaction in accordance with this Agreement. 9.3 Procedure. Escrow Holder shall close Escrow as follows: 9.3. 1 Deed. Record the Deed in the Official Records of the County in which the Real Property is located and deliver conformed copies thereof to Buyer and Seller. 9.3.2 Purchase Price. Deliver the Purchase Price to Seller (less Seller's share of the closing costs and prorations) via wire transfer of U.S. federal funds to Seller's Account, or as otherwise directed by Seller, in accordance with Seller's instructions provided to Escrow Holder prior to Close of Escrow: 9.3.3 Deliveries to Buyer. Deliver to Buyer (i) the original Non -Foreign Certificate, (ii) conformed copies of the recorded Deed, (iii) the original Bill of Sale, (iv) a counterpart original of the WFB Branch Lease; (v) the original Title Policy, and (vi) Buyer's closing statement. CADocuments and Settingslrader.AD-ENT1Locai Settings\Temporary Internet Fi1esl0LK38Dlps.I 160.v5.doc 11 9.3.4 Deliveries to Seller. Deliver to Seller (i) conformed copies of the recorded Deed; (il) a counterpart original of the WFB Branch Lease; and (Iii) Seller's closing statement. 9.4 Escrow Instructions. This Agreement shall serve as escrow instructions and an executed copy of this Agreement shall be deposited by Seller and Buyer with Escrow Holder following the execution and delivery hereof. The parties agree to execute for the benefit of Escrow Holder such additional escrow instructions as are necessary to close the Escrow, provided that the additional escrow instructions do not change the terms of this Agreement but merely offer protection to Escrow Holder. Seller and Buyer hereby designate Escrow Holder as the "Reporting Person' for the transaction pursuant to Section 6945(e) of the Internal Revenue code. 9.5 Closing Costs and Prorations. 9.5.1 Closing costs. 9.5.1.1 Seller's Responsibility. Seiler shall be responsible for the following closing costs: (1) fifty percent (50%) of the standard insurance premium for the Title Policy; and (ii) Seller's attorneys' fees. 9.5.1.2 Buyer's Responsibility. Buyer shall be responsible for the following closing costs: (1) fifty percent (50%) of the standard insurance premium for the Title Policy; (ii) costs for any endorsements to the Title Policy requested by Buyer; (iii) all costs associated with any financing obtained by Buyer; and (iv) Buyer's attorneys` fees. 9.5.1.3 Other charges. Other charges of the Closing, including any governmental impositions incurred as a result of the transfer of title to Buyer (e.g., transfer, sales or excise taxes), Escrow fees and recording costs, shall be apportioned between Buyer and Seller in accordance with the usual custom and practice of the County in which the Real Property is located. 9.5.2 Prorations. The adjustments and prorations set forth below shall be made at close of Escrow. For purposes of this Section 9.5.2, the term "Proration Date" shall be defined as 11:59 p.m. on the day preceding Close of Escrow. 9.5.2.1 Real Estate Taxes. All real and personal property taxes, installments of bonds and special taxes and assessments attributable to the Property shall be prorated as of the Proration Date based on a 355-day year and the assessed value of the Property in effect at Close of Escrow. Seller shall pay all such real estate taxes which are due for the period of Seller's ownership of the Property through and including the Proration Date. 9.5.2.2 Re -proration of Real Estate Taxes. If at any time after Close of Escrow additional or supplemental real estate taxes are assessed against the Real CADocuments and Sefitingslrader.AD-ENT\Loca1 Settings7emporary Internet Fi1esl0LK38D1ps.1160.v5.doc 12 Property by reason of any event occurring prior to or including Close of Escrow, or there is any rebate of such taxes, Buyer and Seller shall promptly re -prorate such taxes, and any amounts due from one party to the other shall be paid in cash at that time. 9.5.2.3 Utilities. Buyer shall arrange with all utility services and companies serving the Real Property to have accounts started in the name of Buyer or its property manager beginning as of the Proration Date. Seller shall not assign to Buyer any deposits Seller has with any utility services or companies. Buyer and Seller shall cooperate to have the utility services and companies make utility readings as of the Proration Date. If readings cannot be made, utility charges shall be prorated as of the Proration Date based on estimates from the latest bills available; provided, in any event, Seller shall pay, through and including the Proration Date, all utility charges attributable to the Property. 9.5.2.4 Refunds of Real Estate Taxes. Buyer specifically acknowledges that Seller shall be entitled to any refund of real and personal property taxes, installments of bonds and special taxes and assessments attributable to the Property and allocable to the period prior to close of Escrow. Any such refunds shall be paid to Seller regardless of when they are received. 9.5.2.5 Additional Costs. Buyer and Seller each shall pay their own legal, lending and other fees and expenses incurred in connection with the negotiation, documentation and closing of the transactions contemplated by this Agreement. 10. Brokerage Commission. Each party to this Agreement warrants to the other that no person or entity other than Broker can properly claim a right to a real estate commission, finder's fee or other real estate brokerage -type commission (collectively, "Real Estate Compensation") based upon the acts of that party with respect to the transactions contemplated with respect to this Agreement. Seller shall pay any Real Estate Compensation due to Broker pursuant to a separate agreement between Seller and Broker. Each party hereby agrees to indemnify, protect and defend the other (by counsel acceptable to the party seeking indemnification) against and hold the other harmless from and against any and all damages, liabilities, loss, cost and expense, including, but not limited to, reasonable attorneys` fees and court costs, resulting from any claims for Real Estate Compensation by any person or entity other than the Broker based upon such acts. This indemnity shall survive Close of Escrow or any earlier termination of this Agreement. 11. Representations and warranties. 11.1 Buyer. Buyer represents and warrants to Seller, which representations and warranties shall survive the execution of this Agreement and Close of Escrow, the following: CADocuments and SetkingsVader.AD-ENnLocal SettingsUemporary Intemet Fi1esloLK38Dlps.1160.v5.doc 13 11.1.1 Binding. This Agreement constitutes a valid and legally binding obligation of Buyer, enforceable in accordance with its terms. 11.1.2 Authority. Buyer has the full power and authority to execute and deliver and fully perform its obligations under this Agreement. 11.1.3 No Bankruptcy. Buyer has not (i) made a general assignment for the benefit of creditors; (ii) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by Buyer's creditors; (iii) suffered the appointment of a receiver to take possession of all or substantially all of Buyer's assets; (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Buyers assets; (v) admitted in writing its inability to pay its debts as they become due; or (vi) made an offer of settlement, extension or composition to its creditors generally. 11.2 Seller. Seller represents and warrants to Buyer, which representations and warranties shall survive the execution of this Agreement and Close of Escrow, the following: 11.2.1 Binding. This Agreement constitutes a valid and legally binding obligation of Seller, enforceable in accordance with its terms. 11.2.2 Authority. Seller has the full power and authority to execute and deliver and fully perform its obligations under this Agreement. 12. Miscellaneous. 12.1 Successors and Assigns. This Agreement shall be binding upon the heirs, executors, administrators, and successors and assigns of Seller and Buyer; provided, however, Buyer shall not assign any or all of Buyer's rights and obligations hereunder to any party without the prior written consent of Seller, which consent Seller shall have the right to withhold in its sole discretion. Any such assignment in violation of this provision shall be void. If Seller consents to an assignment, the assignment will not be effective against Seller until Buyer delivers to Seller a fully executed copy of the assignment instrument, which instrument must be satisfactory to Seller in both form and substance and pursuant to which the assignee assumes and agrees to perform for the benefit of Seller the obligations of Buyer under this Agreement, and pursuant to which the assignee makes the warranties and representations required of Buyer under this Agreement. 12.2 Entire Agreement. This Agreement contains all of the covenants, conditions and agreements between the parties and shall supersede all prior correspondence, agreements and understandings, both oral and written. 12.3 Attorneys' Fees. Should either party employ attorneys to enforce any of the provisions hereof or to protect its interest in any manner arising under this Agreement, or to recover damages for breach of this Agreement, or to enforce any judgment relating C:1Documents and Settingslrader.AD-ENT1LocaI S etti ng s\Tem po ra ry Internet Files\OLK38Mps.1160.v5.doc 14 to this Agreement and the transaction contemplated hereby, the prevailing party shall be entitled to attorneys' fees and court costs, including those incurred with respect to bankruptcy, insolvency, and receivership proceedings. 12.4 Waiver of Trial by Jury. Each of Seller and Buyer Hereby waives its rights to a trial by jury as to any matter arising out of or concerning the subject matter of this Agreement. 12.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Montana.. 12.5 Further Assurances. Seller or Buyer shall promptly perform, execute and deliver or cause to be performed, executed and/or delivered at or after close of Escrow any and all acts, deeds and assurances as either party or Escrow Holder may reasonably require in order to carry out the intent and purpose of this Agreement. 12.7 Severability. In case any one or more of the provisions contained in this Agreement for any reason is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 12.8 Notices. All notices required or permitted hereunder shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, national overnight courier service or facsimile to the addresses stated above. Notices and other communications shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if mailed, three (3) business days after the posting by the United States Post Office, (iii) if sent by national overnight courier service, one (1) business day after delivery to such courier service, or (iv) if given by facsimile, when sent and receipt is confirmed. Any notice, request, demand, direction or other communication sent by facsimile must be confirmed within twenty-four (24) hours by a letter mailed or delivered in accordance with the foregoing. 12.9 counterparts. This Agreement may be executed in one (1) or more counterparts, and all of the counterparts shall constitute but one and the same agreement, notwithstanding that all parties hereto are not signatory to the same or original counterpart. 12.10 Time. Time is of the essence of every provision herein contained. 12.11 Nonwaiver. Unless otherwise expressly provided herein, no waiver by a party of any provision hereof shall be deemed to have been made unless expressed in writing and signed by the party waiving the provision. No delay or omission in the exercise of any right or remedy accruing to a party upon any breach under this Agreement shall impair such right or remedy or be construed as a waiver of any such C:\Documents and Seft ingslrader.ADWENT1LocaI S ett i n g s\Tem po ra ry Internet FilesloLK38Dlps.1160.v5.doc 15 breach theretofore or thereafter occurring. The waiver by a party of any breach of any term, covenant or condition herein stated shall not be deemed to be a waiver of any other term, covenant or condition. All rights or remedies afforded to a party hereunder or by law shall be cumulative and not alternative, and the exercise of one right or remedy shall not bar other rights or remedies allowed herein or by law. 12.12 captions. Section titles or captions contained herein are inserted as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement. 12.13 Survival. Except as expressly set forth in this Agreement, upon dose of Escrow, each of the terms, covenants and conditions of this Agreement shall be deemed to have merged into the Geed. 12.14 Exhibits. All exhibits attached hereto shall be incorporated herein by reference as if set out herein in full. 12.15 Construction. The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendment or exhibits hereto. 12.16 Confidentiality. Buyer and Seller agree to keep confidential, and not publicly disclose, the existence and/or terms of this Agreement and the transaction contemplated hereby or the results, contents or analysis of the Buyer Inspections of the Property; provided, however, that both Seller and Buyer may disclose the existence and terms of this Agreement and the Buyer Inspections to: (i) Buyer's and Seller's respective consultants, agents, architects, independent contractors, attorneys or surveys associated with the purchase and sale of the Property, (ii) any third party to whom the non -disclosing party to this Agreement has given its prior written consent for such a disclosure, or (iii) governmental, administrative, regulatory or judicial authorities in the investigation of the compliance of the Property with applicable legal requirements. However, Buyer expressly covenants and agrees that it will not disclose any code compliance, environmental or other regulatory matters to governmental or other authorities without the express prior written approval of Seller. The provisions of this Section 12.15 shall survive the termination of this Agreement other than by Close of Escrow. 12.17 Not offer. The submission of this Agreement to Buyer shall not constitute an offer and neither Buyer nor Seller shall be obligated to purchase or sell the Property until this Agreement is executed by Buyer and Seller. Prior to execution of this Agreement by Buyer and Seller, Seller expressly reserves the right to negotiate with other prospective buyers of the Property or to decline to sell or dispose of the Property without penalty or any obligation to Buyer. CADocuments and Settingslrader.AD-EN RLoca1 SettingsUemporary Internet Fi1es\0LK38D\ps.1160.v5.doc 16 IN WITNESS WHEREOF, the parties hereto have executed this Agreement in one or more counterparts, on the date(s) set forth below, effective as of the Effective Date, Seller: WELLS FAROO BANK, N.A., a national banking association .r Name. Title: f' By 1 7 Date: July 2005 Buyer: CITY OF KALISPELL, MONTANA, a municipal corporation By Name: Title: Date: JulyL�, 2005 CADocuments and 5ettingslrader.AD-ENT1Local Settings\Temporary Internet Fi1esl0LK38Dlps.11 60.v5.doc 17 EXHIBIT A LEGAL DESCRIPTION OF REAL PROPERTY The land referred to in this policy is situated in the State of Montana, County of Flathead and is described as follows: Lot 14 and the Southerly Half of Lot 15 of Block 57 of Kalispell, Montana, according to the plat thereof on file in the office of the County Clerk and Recorder of Flathead County, Montana, particularly described as follows: BeginnIng at the Southwest corner of said Lot 14; thence Northwesterly along the Westerly boundary of said. Lot 14 and the Southerly Half of Lot 15, a distance of 37.5 feet; thence Northeasterly parallel with the Southerly boundary of said Lot 15, a distance of 140.0 feet to the Easterly boundary of said Lot 15; thence Southeasterly along the Easterly boundary 'of the Northerly Half of Lot 15, and Lot 14, a distance of 37.5 feet to the Southeast corner of said Lot 14; thence Southwesterly along the Southerly boundary of said Lot 14, a distance of 140.0 feet to the Southwest corner of said lot, the Place of Beginning. Part of Lots 15, 15 and 17 of Block 57 of Kalispell, Montana, according to the recorded plat thereof, records of Flathead County, Montana, described as follows: Commencing at the Northwest corner of said Block 57; thence Southeasterly along the westerly boundary of said Block 57, a distance -of 49.00 feet to a point which is the Point of Beginning of the tract to be described herein; thence Northeasterly and parallel with the North boundary of said Lot 16, a distance of 59.00 feet to a point on the West face of the Strand Building; thence Southerly and parallel with the west boundary of said Bloch 57, a distance of 0.54 feet; thence Easterly and parallel with the North boundary of said Lot 16, a distance of 10.37 feet to a point which is in the center of a 9 T' bearing wall; thence Southerly and parallel with the West boundary of said Block 57, and along the center of the aforesaid 9" bearing wall, a distance of 33.18 feet to a point which is the ,southwest corner of the Strand Building; thence Northeasterly and parallel with the North boundary of said Lot 15, and along the South face of the Strand Building, a distance of 60.63 feet to a point on the Easterly boundary of Lot 15 of said Block 57; thence Southerly along the East boundary of said Lot 15 of Block 57, a distance of 4.78 feet; thence Westerly and parallel with the Northerly boundary of said Lot 15, a distance of 140.00 feet to a point on the Westerly boundary of said Block 57; thence Northerly along the Westerly boundary of said Block 57, a distance of 38.50 feet to the Place of Beginning. --Continued- A West portion of Lots 17 and 18 in Block 57 of the original Townsite of said Kalispell, more particularly described as a rectangular tract 49 by 69 feet measured from the Northwest corner of said Lot 18 Southward on the West lines of said lots, a distance of 49 feet, and Eastward on the North line of said Lot 18, a distance of 59 feet. The Easterly 100 feet of Lots 1 and 2 and of the Northerly 37 11 2 feet of Lot 3, all in Block 57 of Kalispell, according to the recorded plat thereof, records of Flathead County, Montana, which tract is more particularly described as follows: Beginning at the Northeast corner of said Lot 1; thence Southeasterly along the Easterly line of said Lots 1, 21 3, a distance of 137 1/2 feet to a point; thence Southwesterly on a line parallel to the Northerly Line of said Lot 3, a distance of 100 feet to a point; thence Northwesterly and parallel to the Easterly line of said Block 57f a distance of 137 1/2 feet to a point on the Northerly line of said Block 57; thence Northeasterly along the said. Northerly line of said Block 57, a distance of 1.00 feet to the Place of Beginning. That part of Lot 3 of Block 57 of Kalispell, Montana, according to the plat thereof on file in the office of the County Clerk and Recorder of Flathead County, Montana, particularly described as follows: Beginning at a point on the Westerly boundary of ' say. d Lot 3, which point is Southeasterly, a distance of 1.7.5 feet from the Northwest corner of said Lot 3; thence continuing Southeasterly along the Westerly boundary of said Lot 3, a distance of 20.0 feet; thence Northeasterly and parallel with the Northerly boundary of said L ct 3, a distance of 40.0 feet; thence Northwesterly and parallel with the Westerly boundary of said Lot 3, a distance of 20.0 feet; thence Southwesterly, a distance of 40.0 feet to the Place of Beginning. -Coy tinued- 44-051 Lots 7 and 8 of Block 44 of Kalispell, Montana, according to the official map or plat of said Townsite on file and of record in the office of the County Clerk and Recorder ❑f said county of Flathead, and more particularly described as follows Beginning at a point formed by the intersection of the Easterly sine of First Avenue East and the Northerly line of Second Street, which point is also the Southwest corner of Lot 7; thence North 76 `11' East, a distance of 140 feet to the Southeast corner of Lot 7; thence North 13 ° 49' 'hest, a distance of 50 feet to the Northeast corner of Lot 8 ; thence South 76 011' East, a distance of 140 feet to the Easterly line of First Avenue East, which point is also the Northwest corner of Lot S; thence South 13*491 East, a distance of 50 feet to the Point ❑f Beginning. THE END 44-051 EXHIBIT B FORM OF WARRANTY DEED RECORDING REQUESTED BY, AND WHEN RECORDED, MAIL TO: CITY OF KALISPELL P.O. Box 1997 312 First Avenue East Kalispell, MT 59903-1 997 Attn : City Manager MAIL ALL TAX STATEMENTS TO: Same as above. FOR RECORDER'S USE ONLY APN: Transfer Tax: See separate statement not for public record WARRANTY DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, WELLS FARGO BAND, N.A., a national banking association ("Grantor'), does hereby grant, bargain, sell and convey to CITY OF KALISPELL ("Grantee"), all that certain real property located in the City of Kalispell, State of Montana, more particularly described below: [Block and Lot Legal Description] IN WITNESS WHEREOF, this Warranty Deed has been executed this day of , 2005. WELLS FARGO BANK, N.A., a national banking association By Name: Title: By Name: Title: CADocuments and SettingsVader.AD-ENTlocal Settings\Temporary Internet Files101-1<38Mps.1 160.v5.doc 1 EXHIBIT C DUE DILIGENCE MATERIALS 1. Title Report. 2. Phase I report, May 27, 2005 3. Appraisal dated October 1, 2004 4. Asbestos Survey, May 30, 1988 CADocuments and Settingslrader.AD-EWRI-ocal Settings\Temporary Internet Filesl0LK38Dlps.1150.v5.doc 1 EXHIBIT D BILL OF SALE FOR AND IN CONSIDERATION of the sum of one Dollar ($1 .00), and other good and valuable considerations the receipt and sufficiency of which are hereby acknowledged, the undersigned, WELLS FARGO BANK, N.A., a national banking association ("Seller"), does hereby sell, assign, convey, transfer, grant, set over and deliver to CITY OF KALISPELL, MONTANA, a municipal corporation ("Buyer"), the entire interest of Seller in and to all personal property itemized on Schedule 1, attached hereto, which personal property is located in that certain building generally known as 201 First Avenue East, Kalispell, Montana. IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of this day of , 2005. Seller: WELLS FARGO BANK, N.A., a national banking association By Name: Title: By Name: Title: [Attach Schedule 1 itemizing personal property] CADocuments and Settingslrader.AD-EWRI-ocal Settings\Temporary Internet Files101-1<38Mps.1160.v5.doc 1 EXHIBIT E FORM OF WFB BRANCH LEASE CADocuments and Settingslrader.AD-ENT\Local Settings\Temporary Internet Files\OLK38Dlps.1160.v5.doc EXHIBIT E FORM of WFB RETAIL LEASE Kalispell, Montana RETAIL LEASE CITY OF KALISPELL, MONTANA, a municipal corporation LANDLORD WELLS FARGO BANK, N.A., a national banking association TENANT 201 First Avenue East Kalispell, Montana EXHIBIT E TABLE OF CONTENTS p.e 1. FUNDAMENTAL TERMS AND ATTACHMENTS ................. ■ R ■.. ■,......... 0... 6 ■ 2. DESCRIPTION OF DEMISED PREMISES ...... ....... .....3 3. TERM ............... .......■......■......•..............•...................■.......... ...... 4 4. EARLY CANCELLATION BY TENANT.....................................................4 5. EARLY CANCELLATION BY LANDLORD................................................4 5. MONTHLY FIXED RENT............................................................................ 5 7. USE OF DEMISED PREMISES.................................................................. 5 8. REAL ESTATE TAXES...... ... m ...................................■ . ■ .............................. 5 9. OUTDOOR FACILITIES ............................................................................. 5 10. SERVICES..................................................................................................6 11. INSURANCE............................................................................................... 7 12. IMPROVEMENTS, ALTERATIONS AND SIGNAGE............. . . . . . . . . . . ■ ... r . r.... 8 13. MAINTENANCE AND REPAIRS; IMPROVEMENTS AND REPAIRS REQUIRED BY LAW.................................................................9 14. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS ......................... 9 15. TENANT'S PROPERTY AND 'WAIVER OF LANDLORD'S. LIEN.......................................................................................................... 11 16. TENANT ASSIGNMENT AND SUBLETTING .......................................... 11 17. LANDLORD ASSIGNMENT..................................................................... 12 18. PARKING AND ACCESS......................r..................................................12 19. DEFAULT.................................................................................................12 20. CONDEMNATION....................................................................................14 21. COSTS AND ATTORNEYS' FEES........................................................... 15 22. NOTICES . . ... . . . . . . . . . . . . . . . . . . . . . . . . . ■ . ■ ■ ■ r r r . . . . . . . . . . . . . . . . . . • . ■ .. • . . . . . . . . . . . . . . \ ■ . ■ . . . . . . . . . . . . . . , . ■ r 15 23. HAZARDOUS SUBSTANCES.................................................................. 15 E-i TABLE OF CONTENTS Page 24. ADJACENT AREAS.................................................................................16 25. SURVIVAL OF LEASE.............................................................................16 25. ESTOPPEL CERTIFICATE......................................................................16 27. INDEMNIFICATION..................................................................................17 28. REPRESENTATIONS AND WARRANTIES OF LANDLORD..................17 29. MISCELLANEOUS...................................................................................18 EXHIBITS EXHIBIT "A" - Legal Description Of the Land EXHIBIT "B" W Site Plan Of the Demised Premises E-ii RETAIL LEASE THIS RETAIL LEASE ("Lease"), dated , 2005, is made between CITY OF KALISPELL, MONTANA, a municipal corporation ("Landlord"), and WELLS FARGO BANK, N.A., a national banking association ("Tenant"). �. FUNDAMENTAL TERMS AND ATTACHMENTS. (a) Fundamental Terms. The following is a summary schedule of certain fundamental terms of this Lease. (i) Landlord: CITY OF KALISPELL P.O. Box 1997 312 First Avenue East Kalispell, MT 59903-1997 Attn: City Manager Tenant: WELLS FARGO BANK, N.A. c/o Wells Fargo Bank Corporate Properties Group 533 Folsom Street, 6th Floor San Francisco, California 94107-3600 Attn: Lease Administration Existing Leasehold Improve- ments: All improvements, alterations and additions comprising all or any part of the Demised Premises as of the Effective Date. Without limiting the foregoing, Tenant's existing automated teller machines and night depository box, together with related and ancillary equipment and fixtures, shall be treated as a part of Tenant's Existing Leasehold Improvements. Div} Demised Premises: The Building, the Land and the Outdoor Facilities. (v) Address of Demised Premises: 201 First Avenue East, Kalispell, MT (vi) Land: The land legally described on Exhibit "A," attached hereto. (vii) Outdoor Facilities: All parking areas, landscaped areas, sidewalks and driveways located on the Land outside the Building. E-1 (viii) Building: 201 First Avenue East. (ix) Effective Date: The date that both Landlord and Tenant have signed this Lease as set forth on the signature pages and Tenant has received a fully executed counterpart of this Lease. (x) Commencement Date: The date that the sale of the Demised Premises, from Tenant to Landlord, is completed, as evidenced by recordation of a warranty deed. (xi) Term: From the Commencement Date until the expiration of ten (10) Lease Years following the Commencement Date, subject to the parties' early termination rights under Sections 4 and 5. (xii) Extensions: None. (xiii) Monthly Fixed Rent: $41166-66 It is understood and agreed that this is a full service lease, and Tenant shall not be responsible for any of Landlord's costs related to the ownership, operation and management of the Demised Premises. (xiv) Landlord's Permanent Tax Identification No.: 81-6001281 (xv) Lease Year: The first Lease Year shall be defined as that period commencing on the Commencement Date and expiring on the last day of the calendar month in which the first anniversary of the Commencement Date occurs; each subsequent Lease Year shall be the twelve (12) month period beginning on the day following the expiration of the previous Lease Year. (xvi) Person: Shall mean any individual, partnership, firm, association, corporation, trust or any other form of business or government entity. (xvii) Hazardous Substances: Shall mean any and all hazardous, ultra -hazardous, or toxic substances, wastes or materials regulated under any laws or regulations applicable to the environment or the protection of human health. E-2 (xviii) Legal Requirements: Shall mean all applicable federal, state and local laws, statutes, codes, acts, ordinances, directions, rules, regulations and requirements which apply to the Demised Premises or the use or occupancy thereof, including, without limitation, local and state building, electrical, mechanical, seismic, and fire and safety codes (including the Americans with Disabilities Act of 1990, 42 U.S.C. §12101 et seq. and comparable codes and statutes of the State of Montana), and all applicable present and future statutes, regulations, rules, ordinances, codes and orders relating to Hazardous Substances (including the reporting, licensing, permitting, investigation and remediation of emissions, discharges, releases or threatened releases of Hazardous Substances, whether into the air, surface water, groundwater or land, and including the manufacture, processing, distribution, use, treatment, storage, disposal, transport and handling of Hazardous substances) or the protection of human health or the environment. (xix) Default Rate: Shall mean a ten percent (10%) per annum rate of interest, compounded monthly on the first day of each calendar month. (b) Exhibits. The following exhibits ("Exhibits") are attached hereto and, by this reference, incorporated herein: Exhibit "A" -- Legal Description of the Land Exhibit "B" Site Plan of the Demised Premises 2. DESCRIPTION of DEMISED PREMISES. In consideration of the mutual covenants contained herein, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the land and all improvements located thereon and all appurtenances associated therewith commonly known as 201 First Avenue East, which land is legally described on Exhibit "A" attached hereto. The Building and its outdoor Facilities are described on the site Plan of the Building attached hereto as Exhibit "B", and are located in Kalispell, Flathead County, state of Montana. The Building, outdoor Facilities and Land being leased to Tenant (referred to herein collectively as the "Demised Premises") are shown on the Site Plan attached hereto as Exhibit "B," and specifically includes Tenant's existing automated teller machines (ATMs) and night depository box. Landlord also grants to Tenant the non- exclusive right to use for the Term as an easement appurtenant to the Demised Premises, (a) all rights, easements and appurtenances belonging or appertaining to the Land, (b) all right, title and interest of Landlord in and to any and all roads, streets, alleys and ways bounding the Demised Premises. E-3 3. TERN[. (a) The Term shall commence on the Commencement Date and shall continue for the balance of the Term, subject to early termination in accordance with Sections 4 and 5 below. Tenant is presently in occupancy of the Demised Premises, and Tenant acknowledges that possession of the Demised Premises shall have been tendered to and accepted by it as of the Commencement Date, and that the Demised Premises shall have been delivered in the condition required by this Lease, i.e., "AS IS. " (b) The obligation to pay Monthly Fixed Rent and other sums due under this Lease shall begin on the Commencement Date. (c) Upon expiration or sooner termination of this Lease, Tenant shall surrender the Demised Premises to Landlord in good condition, reasonable wear and tear and casualty excepted. Tenant shall remove all of Tenant's Property (as defined in Section 1 5(a) below), and any of Tenant's Property not removed from the Demised Premises on or prior to the expiration of this Lease, or within ten (10) days following the earlier termination of this Lease, shall be treated as abandoned by Tenant. Tenant shall also remove any alterations or improvements made to the Demised Premises (other than the Existing Leasehold Improvements) unless Landlord made its consent to the original installation of such improvements or alterations conditioned upon such improvements and alterations not being removed on the expiration or earlier termination of this Lease. Tenant shall promptly repair any and all damage done to the Demised Premises caused by the removal of Tenant's Property and the other improvements or alterations removed by Tenant on the expiration or earlier termination of this Lease. (d) In the event Tenant continues to occupy the Demised Premises after the last day of the Term, as the same may have been extended, and such continued occupancy is permitted by Landlord, a tenancy from month to month only shall be created, and Monthly Fixed Rent shall be fixed at one hundred and ten percent (110%) of the Monthly Fixed Rent that was in effect on the last day of the Term. 4. EARLY CANCELLATION BY TENANT. Tenant shall have the right to terminate this Lease at any time upon giving Landlord at least ninety (90) days advance written notice of Tenant's election to terminate this Lease by virtue of this Section 4. This Lease shall thereupon terminate effective on the date specified by Tenant in its notice to Landlord (provided that such date must be at least ninety (90) days thereafter). 5. EARLY CANCELLATION BY LANDLORD. Landlord shall have the right to terminate this Lease upon giving Tenant at least ninety (90) days advance written notice of Landlord's election to terminate this Lease by virtue of this Section 5; provided, however, that no such written election may be given unless and until Tenant has ceased operating indefinitely in the Demised Premises. This E-4 Lease shall thereupon terminate effective on the date specified by Landlord in its notice to Tenant (provided that such date must be at least ninety (90) days thereafter). 8. MONTHLY FIXED RENT. From and after the Commencement Date, during the Term, Tenant agrees to pay to Landlord "Monthly Fixed Rent," without offset, claim, or deduction, in the amount set forth in Section 1(a)(xiii) above. All Monthly Fixed Rent installments are due in advance, the first monthly installment payment being due on the Commencement date, and each subsequent installment thereafter on the first day of each and every calendar month during the Term. 7. USE OF DEMISED PREMISES. (a) Tenant's "Proposed Use" of the Demised Premises is for a full service bank with automated teller machines, together with the sale of services and products provided in the ordinary course of Tenant's financial services business, including financial services not presently contemplated for the Demised Premises but which may be offered in other bank branches of Tenant, whether now or in the future. For purposes of this Lease, "financial services" shall mean products and services now or hereafter during the Term commonly offered by full service banks, credit unions, savings and loan associations, financial planners and financial investment companies (e.g., Charles Schwab & Co., Merrill Lynch etc.), which include, but are not limited to, traditional banking services (e.g., demand accounts, safe deposit), mortgage loans, business loans, insurance, stock and mortgage brokerage, financial planning and tax advice, and whether such products and services are offered for sale, rental or use by Tenant's employees at the Demised Premises or through Tenant's ATMs at the Demised Premises. Notwithstanding the foregoing, Tenant may conduct any lawful activity in the Demised Premises. (b) Nothing in this Lease shall require Tenant to remain open for business in the Demised Premises, so long as Tenant performs and observes all other obligations and conditions on Tenant's part to be performed and observed hereunder. 8. REAL ESTATE TAXES. Tenant shall pay or cause to be paid, prior to delinquency, any and all taxes and assessments levied upon all trade fixtures, inventories and other personal property placed in and upon the Demised Premises by Tenant and owned by Tenant. Landlord shall be solely responsible for all taxes and/or assessments assessed by any taxing authority (including sales taxes) which are related to Landlord's ownership of the Demised Premises, including, without limitation: (a) personal property, fixtures or equipment taxes assessed against Landlord's property; (b) franchise taxes assessed against Landlord; (c) taxes on Landlord's gross rents or profits; (d) inheritance, state, gift, income, transfer or excess profit taxes assessed against Landlord; (e) sales taxes payable by Landlord; and (f) real property taxes and assessments, including, but not limited to, any fees, interest and penalties arising from any such tax or assessment, assessed against all or any portion of the Land and the improvements located thereon, EW5 including, but not limited to, any such taxes and assessments attributable to the Building or any portion thereof. 9. OUTDOOR FACILITIES. (a) Landlord shall maintain, repair, replace, restore, and repaint the Outdoor Facilities and keep them in good order and repair and in neat, clean and well maintained condition in accordance with the commercially reasonable standard of maintenance for buildings similar in size and use to the Building in the general metropolitan area in which the Building is located. Landlord's obligation shall, without limitation, include: (1) resurfacing, including keeping the parking surfaces and access drives in a level, smooth, and evenly covered condition with the type of surfacing material originally installed or a substitute material comparable in all respects in quality, use, and durability; (ii) cleaning, striping, lighting, and all other tasks necessary to maintain the parking and Outdoor Facilities in a clean, safe, and orderly condition, including removal of trash, rubbish, garbage, and other refuse; (iii) maintaining any perimeter wall in good condition and repair; [iv] placing, keeping in repair, and replacing any directional signs, markers, and keeping in repair, and replacing when necessary such artificial lighting facilities as are required to keep the Outdoor Facilities lit, as required by Section 9(b); (v) maintaining, repairing and replacing all utility lines, mains and facilities and stormwater detention areas; and (vi) maintaining all landscaped areas, making such replacements of shrubs and other landscaping as is necessary, and keeping those areas at all times adequately weeded, fertilized, and watered. (b) Landlord agrees to provide adequate lighting of the Outdoor Facilities including the parking lot from thirty (30) minutes before dusk until at least one and one-half (1-1/2) hours after Tenant closes its business in the Demised Premises, which lighting shall include the illumination of any pylon or monument sign advertising Tenant's business conducted in the Demised Premises. 10. SERVICES. (a) Landlord agrees to cause the necessary mains, conduits and other facilities to be provided to make water, sewer, gas, phone and electricity available to the Demised Premises. Landlord shall also make available to Tenant, at Landlord's expense, all water, sewer, gas and electrical power required for the normal use and occupancy of the Demised Premises for the Proposed Use. E-0 11. (b) Tenant shall be responsible for its own security arrangements. (c) Landlord shall provide for collection of refuse and garbage from the Demised Premises on a regular basis, in coordination with Tenant. (d) Landlord shall not be liable to Tenant in damages or otherwise if utilities or services are interrupted or terminated because of necessary repairs, installations, or improvements, or any cause beyond Landlord's reasonable control, nor shall any such interruption or termination relieve Tenant of the performance of any of its obligations hereunder, except that if Tenant is unable to operate its business for a period greater than forty-eight (48) hours after the occurrence of said interruption or termination, there shall be an abatement of all Rental obligations hereunder during such period. INSURANCE. (a) Landlord agrees to carry, or cause to be carried, during the term hereof Commercial General Liability Insurance (hereinafter, "Landlord's Liability Insurance") on the Building, Land and outdoor Facilities, naming Tenant as an additional insured providing coverage in the following amounts: General Aggregate: $3,000,000 Products -completed Operations Aggregate: $3,000,000 Personal and Advertising Injury: $3,000,000 Each Occurrence: $370007000 Fire Damage (any one fire): $ 500,000 Landlord shall promptly deliver to Tenant a certificate of Landlord's Liability Insurance. (b) Landlord also agrees to carry, during the Term hereof, all risk property insurance (hereinafter, "Landlord's Property Insurance") covering fire and extended coverage, earthquake, vandalism and malicious mischief, sprinkler leakage and all other perils of direct physical loss or damage (other than flood) insuring the Building and Outdoor Facilities (excluding Tenant's Property) for the full replacement value thereof. Landlord Shall furnish Tenant a certificate of Landlord's Property Insurance. (c) Landlord and Tenant and all parties claiming under them mutually release and discharge each other from all claims and liabilities arising from or caused by any casualty or hazard, covered or required hereunder to be covered in whole or in part by insurance on the Demised Premises, or in connection with property on or activities conducted on the Demised Premises, and waive any right of subrogation which might otherwise exist in or accrue to any person on account thereof. Each insurance policy required to be carried by Landlord or Tenant under this Lease shall include a clause or endorsement to the effect the waiver contained herein will not adversely affect or impair such policy or prejudice the right of the insured to recover under such policy, and each such policy shall permit this waiver of liability and contain a waiver of subrogation. E-7 12. (d) Tenant shall not keep, use, sell or offer for sale in or upon the Demised Premises any article which may be prohibited by the standard form of fire insurance policy. In the event Tenant's occupancy causes any increase of premium for the fire, and/or casualty rates on Landlord's Property Insurance, Tenant shall pay the additional premium on the fire and/or casualty insurance policies by reason thereof. Tenant also shall pay in such event, any additional premium on the rent insurance policy that may be carried by the Landlord for its protection against rent loss through fire. Bills for such additional premiums shall be rendered by Landlord to Tenant at such times as Landlord may reasonably elect, and shall be due from, and payable by, Tenant within thirty (30) days of written demand and the amount thereof shall be deemed to be, and be paid as, additional Rent. IMPROVEMENTS, ALTERATIONS AND SIGNAGE. (a) Tenant shall not make any exterior or structural alterations to the Building without first obtaining the written consent of Landlord, which shall not be unreasonably withheld so long as such alterations remain in overall architectural harmony with the decorative treatment of the Building. Tenant shall be permitted to make interior, non structural alterations, additions and improvements without Landlord's prior consent. Subject to compliance with applicable municipal law, Tenant shall be permitted to affix canopies, awnings and/or flags on the exterior of the Building from time to time during the Term so long as such items remain in overall architectural harmony with the decorative treatment of the Building; and provided further, that nothing herein shall require Tenant's removal of any existing canopies, awnings and/or flags currently displayed from or upon the Building. On the expiration or earlier termination of this Lease, all alterations, additions and improvements installed by Tenant after the Commencement Date shall be removed from the Demised Premises, and Tenant shall repair any damage occasioned by such removal, except that such alterations, additions and improvements shall not be removed if their abandonment by Tenant was an express condition to Landlord's consent to their original installation or construction. (b) Throughout the Term, Tenant may maintain and keep all signage currently installed within or upon the exterior of the Building, and Tenant may replace such signage, without Landlord's consent, so long as such replacement signage is of the same general size, type and location as the signage being replaced. Any additional signage desired by Tenant to be installed on the exterior of the Building shall require Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. (c) This Section 12 shall not apply to the installation, use and removal of "Tenant's Property" (as defined in Section 15(a) below) nor to any Existing Leasehold Improvements. 13. 14. MAINTENANCE AND REPAIRS; IMPROVEMENTS AND REPAIRS REQUIRED BY LAW. (a) Throughout the Term (except as otherwise specified below), Landlord shall be solely responsible for undertaking all maintenance, repairs and replacements of the following items, all without reimbursement from Tenant: (i) All maintenance, repairs and replacements required for the heating, ventilation and air-conditioning system serving the Demised Premises; (ii) All maintenance, repairs and replacements required for the roof, roof covering and/or roof structure of the Building; (iii) All maintenance, repairs and replacements required for structural elements of the Demised Premises, the Building and all outdoor Facilities; (iv) All maintenance, repairs and slab or foundations, floors, supporting and plumbing and electrical systems. replacements required for the Building members, structural and outside walls, (b) Tenant covenants and agrees that during the Term, Tenant shall, at Tenant's expense, keep, maintain and replace if necessary, the interior of the Building, trade fixtures, facial signage, and its panels on any monument sign, storefront glass, storefront doors, Tenant's Property, and all other parts of the Building not otherwise part of Landlord's responsibility under this Lease, in good condition and repair. (c) Tenant shall observe and comply with the requirements of all covenants, conditions and restrictions of record, and all Legal Requirements now or hereafter in effect, which apply to the Demised Premises by reason of the uses being made of the Demised Premises by Tenant (i.e., apart from general retail and office uses) or by reason of any improvements or alterations proposed or undertaken by Tenant or by reason of any repairs or maintenance required of Tenant hereunder. Landlord shall be responsible, at Landlord's sole cost and expenses and without reimbursement from Tenant, for making all repairs, replacements, improvements and alterations required in order to keep the Building, the Land and the Outdoor Facilities in compliance with all Legal Requirements, if and to the extent that the same is not Tenant's responsibility under the preceding sentence. DAMAGE TO OR DESTRUCTION of IMPROVEMENTS. (a) If the Demised Premises or any portion thereof shall be damaged or destroyed by fire or other casualty, Tenant shall immediately notify Landlord orally and in writing and Landlord shall (except as provided below) promptly remove any resulting debris and make such repairs, restoration or rebuilding as is necessary to restore the Demised Premises substantially to their condition immediately prior to such damage or destruction with all due diligence, and this Lease shall remain in full force and effect; provided, however, notwithstanding the foregoing or anything to the contrary hereinafter provided, if any repairs, restoration or reconstruction are not commenced within sixty (60) days from the date of the casualty and are not actually E-g repaired, restored or reconstructed to substantially the same condition in which it was immediately prior to the casualty within nine (9) months of the date of the casualty, Tenant may terminate this Lease by delivery of written notice to Landlord. Provided that Landlord's Property Insurance remains in effect and has not lapsed, Landlord shall not be required to provide funds in excess of said insurance proceeds which may be required for such repairing, restoring or rebuilding. In the event of a termination of the Lease as aforesaid, this Lease shall be null and void and of no further force or effect and the parties shall have no further rights or obligations hereunder. Notwithstanding anything to the contrary herein contained, Landlord shall have no right, title, interest or claim to insurance maintained by Tenant with respect to Tenant's Property, including, but not limited to insurance proceeds payable with respect thereto. (b) Tenant shall be entitled to a prorated deduction of all Rental for that period of time which the Demised Premises is untenantable, which deduction shall be based on the proportion of the space rendered untenantable bears to the space originally demised; provided, however, if Tenant is unable, in its reasonable business discretion, to operate its business in the Demised Premises, there shall be a full abatement of all Rental due hereunder. (c) Landlord agrees to accept the property insurance proceeds recoverable under Landlord's Property Insurance (as defined above in Section 11) as payment in full for any loss or damage to its property located in the Demised Premises, including the Existing Leasehold Improvements, and not to make any claim against or otherwise seek to recover from Tenant any additional sum for any loss or damage to the improvements located in the Demised Premises which occur and arise as a result of matters which can be covered by insurance (whether or not Landlord elects or fails to so insure), whether or not such loss or damage was caused by the acts or omissions of Tenant or Tenant's employees, agents, contractors, invitees or other person or cause which Tenant may be responsible for under law. (d) If damage is due to any cause other than fire or other peril covered by the insurance required to be carried by Landlord pursuant to section 11 of this Lease ("Uninsured Casualty"), Landlord may elect to terminate this Lease upon written notice to Tenant within thirty (30) days following such casualty, provided, however, Tenant shall have the right within twenty (20) days of receipt of Landlord's notice, to notify Landlord that Tenant will pay the amount necessary to repair and restore the Demised Premises resulting from the Uninsured Casualty, in which event Landlord's notice of termination shall be deemed withdrawn and Tenant shall promptly pay to Landlord, Landlord's estimate of the sum required to repair and restore the Demised Premises in excess of any available insurance proceeds, which sum shall be deposited in a trust account to be disbursed by Landlord only for the costs of repair and restoration resulting from the Uninsured Casualty, and Landlord shall in such event promptly proceed with such repair and restoration and use its best efforts to complete same within one hundred eighty (180) days of the receipt of such funds, subject to Force Majeure as defined in Section 29(k) of this Lease. E-1 0 15. TENANT'S PROPERTY AND WAIVER OF LANDLORD'S LIEN. (a) "Tenant's Property" shall mean all trade fixtures, business equipment, inventory, trademarked items, decorative soffit, counters, shelving, showcases, teller lines, automated teller machines, night depositories, vaults, safe deposit boxes, security cameras, furniture, mirrors and other removable personal property installed in and removed from the Demised Premises from time to time by Tenant. All of Tenant's Property shall remain the property of Tenant. Landlord agrees that Tenant shall have the right, at any time and from time to time, to remove any and all of Tenant's Property. Tenant, at its expense, shall immediately repair any damage occasioned by the removal of Tenant's Property and upon expiration or earlier termination of this Lease. Tenant shall pay before delinquency all license fees and public charges levied, assessed or imposed upon its business operation in the Demised Premises as well as upon Tenant's Property. if any such items of property are assessed with property of Landlord, then such assessment shall be equitably divided between Landlord and Tenant. (b) From time to time, some or all of Tenant's Property may be financed or owned by someone other than Tenant. To the extent that any of Tenant's Property is financed or owned by someone other than Tenant, (i) Landlord agrees that such Tenant's Property is not Landlord's property no matter how the same is affixed to the Demised Premises or used by Tenant and agrees to recognize the rights of the lender or owner of Tenant's Property, and (ii) Landlord waives any claim arising by way of any Landlord's _lien (whether created by statute or by contract) or otherwise with respect to Tenant's Property and agrees to sign and deliver to any lender, secured creditor or lessor a waiver of any lien Landlord may have on Tenant's Property if required by such lender, secured creditor or lessor. 15. TENANT ASSIGNMENT AND SUBLETTING. Tenant shall have the absolute right to sublet, assign or otherwise transfer its interest in this Lease to any parent or operating subsidiary of Tenant, or subsidiary of Tenant's parent, or to a corporation with which it may merge or consolidate ("Permitted Transfer"), without Landlord's approval, written or otherwise, as long as Tenant remains liable for full performance of all its obligations under this Lease. Provided that Tenant has not permanently discontinued nor indefinitely suspended operations in the Demised Premises providing banking and other financial services (it being understood that use of the demised Premises that is limited to the continued operation of automated banking equipment shall not be treated as a suspension or discontinuance of banking services), Landlord's consent shall also not be required for any licensing arrangement between Tenant and other companies that provide services or products available at or through the Demised Premises that are incidental to banking and financial services; and such licensing arrangements shall also be treated as `Permitted Transfers." The consent of Landlord to any other transfer, assignment, subletting, license or concession agreement or hypothecation may be given or withheld by Landlord in its sole and absolute discretion. If Landlord fails to respond to any request by Tenant for Landlord's consent or approval within thirty (30) days of such request, the consent or approval of Landlord shall be deemed given. E-1 1 17. LANDLORD ASSIGNMENT. Landlord shall have the fight to transfer, assign and convey, in whole or in part, any or all of the right, title and interest to the Building and the Building and shall be released of liability and obligations accruing after the effective date of the transfer, provided, such transferee or assignee shall be bound by the terms, covenants and agreements herein contained, and shall expressly assume and agree in writing to perform the covenants and agreements of Landlord herein contained and such assignment shall not be effective until notice of such assignment or transfer, together with an executed copy of such assignment or transfer instrument, is received by Tenant. 13. PARKING AND ACCESS. Tenant shall have the exclusive use of all parking stalls on the Land. All parking shall be available to Tenant, its customer, invitees, employees and agents, at no cost or expense throughout the entire Term. Landlord shall not reduce or reconfigure parking spaces, nor grant rights to use such parking to other persons, without Tenant's written consent, except that Tenant shall not unreasonably withhold its consent to a reconfiguration plan that allows greater parking on the Land. Landlord shall not permit, except to the extent required by law, any fire lane, loading zone or other restrictive parking (except legally -required handicapped parking spaces) to be located in the vicinity of Tenant's entrances to the Building. 19. DEFAULT. (a) The occurrence of any of the following shall constitute a material default and breach of this Lease by Tenant (hereinafter "Event of Default"): (i) Any failure by Tenant to pay Monthly Fixed Rent or make any other payment required to be made by Tenant hereunder within ten (10) days after receipt of written notice from the Landlord. Notwithstanding the foregoing, Tenant shall not be in default for non-payment of Monthly Fixed Rent if (1) there exists a good faith dispute regarding the amount of such Monthly Fixed Rent or Tenant's liability therefor, and (2) Tenant has paid all Monthly Fixed Rent not in dispute, and (3) Tenant has deposited the amount of all disputed Monthly Fixed Rent into an independent escrow with instructions for such sums not to be released except upon the written concurrence of both Landlord and Tenant, and (4) Tenant thereafter takes reasonable measures to resolve the dispute with Landlord as expeditiously as possible by whatever legal means are permitted or required by this Lease. (ii) Failure to perform any other provision of this Lease if the failure to perform is not cured within 30 days after written notice specifying the default has been given to Tenant. If the default cannot reasonably be cured within 30 days, Tenant shall not be in default of this lease if Tenant commences to cure the default within the 30 day period and diligently and in good faith continues to cure the default. E-1 2 (iii) The making by Tenant of any general assignment for the benefit of creditors, the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days); the appointment of a trustee or receiver to take possession that is not restored to Tenant within thirty (30) days, or the attachment, execution or other judicial seizure that is not discharged within thirty (30) days. (b) In the Event of Default by Tenant, then, in addition to all other rights and remedies available to Landlord by law or by other provisions hereof, at Landlord's option, Landlord may annul and cancel this Lease as to all future rights of Tenant. Tenant further agrees that in case of any such termination Tenant will indemnify the Landlord against all loss of Rent which Landlord may incur by reason of such termination, including, but not limited to, costs of restoring and repairing the Demised Premises and putting the same in rentable condition, costs of renting the Demised Premises to another tenant, loss or diminution of rents and other damage which Landlord may incur by reason of such termination and all reasonable attorneys fees and expenses incurred in enforcing any of the terms of this Lease. Neither acceptance of Rent by Landlord, with or without knowledge of breach, nor failure of Landlord to take action on account of any breach hereof, or to enforce its rights hereunder, shall be deemed a waiver of any breach, and absent written notice or consent, said breach shall be a continuing one. (c) If Tenant shall fail to pay, when the same is due and payable and after proper notice and the expiration of all cure periods, any Monthly Fixed Rent, said unpaid amounts shall bear interest from the due date thereof to the date of payment at the Default Rate. Tenant shall in addition, pay as additional Rent a fee of One Hundred Dollars ($100.00) for processing of late payments, late payments being defined as sums overdue and unpaid after proper notice and the expiration of all cure periods. (d) If Landlord should be in default in the performance of any of its obligations under this Lease, which default continues for a period of more than thirty (30) days after receipt of written notice from Tenant to Landlord (and any mortgage lender of Landlord's who has executed a Non -Disturbance and Attornment Agreement acceptable to Tenant) specifying such default, or if such default is of a nature to require more than thirty (30) days for remedy, but Landlord has not undertaken procedures to cure the default within such thirty (30) day period and diligently pursued such efforts to complete cure, Tenant may incur any expense necessary to perform the obligation of Landlord specified in such notice and deduct such expense from the Monthly Fixed Rent or other charges next becoming due. If the default continues for 30 days after written notice is received by the foregoing persons, of if such default is of a nature requiring more than 30 days to cure but Landlord has not undertaken procedures to cure the default within such 30-day period and diligently pursued such efforts to complete cure, then Tenant may abate all Rental due hereunder for the duration of the continuance of the default. E- 1 3 (e) If Landlord's default under Section 19(d) impairs Tenant's use or occupancy of the Demised Premises, and such default remains uncured or uncorrected after the notices required by Section 19(d) have been given and the cure periods therein provided have elapsed, or in the case of any emergency (in which event no notice or time to cure shall be required for Tenant to proceed in accordance with the further provisions of this Section 19(e)), Tenant may, but shall not be obligated to, perform such obligations of Landlord or otherwise remedy Landlord's default(s); and Landlord shall pay to Tenant on demand the cost of Tenant's corrective action, plus interest on such costs at the Default Rate until paid; or Tenant may, at its option, deduct such corrective costs, plus interest, from the next ensuing Monthly Fixed Rent payments and all other payments due Landlord by the terms of this Lease until said amount has been paid in full. 20. CONDEMNATION. (a) If ten percent (10%) or more of the Demised Premises shall be appropriated or taken under the power of eminent domain by any public or quasi -public authority, then, at the election of either Landlord or Tenant, this Lease shall terminate and expire as of the date of such taking, and both Landlord and Tenant shall thereupon be released from any liability thereafter accruing hereunder. (b) Unless reasonably adequate substitute parking can be provided, if more than twenty percent (20%) of the square footage of the parking area is taken under the power of eminent domain by any public or quasi --public authority, then Tenant shall have the sight to terminate this Lease as of the date of the taking. If less than twenty percent (20%) of the applicable parking is so taken by eminent domain, then this lease shall remain in full force and effect, but Landlord shall use its best efforts to provide adequate substitute parking to Tenant. (c) Any termination notice pursuant to this Section must be delivered within sixty (60) days after the date the applicable property is taken by the condemning authority. (d) whether or not this Lease is terminated, nothing herein shall be deemed to affect Tenant's right to receive compensation for damages to Tenant's Property. Tenant shall have the right to pursue its claim for damages against the condemning authority in connection with any eminent domain proceeding. If this Lease is terminated pursuant to this Section 20, all Monthly Fixed Rent and other charges for the last month of Tenant's occupancy shall be prorated and Landlord shall refund to Tenant any Monthly Fixed Rent or other charges paid in advance. (e) If both Landlord and Tenant elect not to terminate this Lease, Tenant shall remain in that portion of the Demised Premises which shall not have been appropriated or taken, and Landlord agrees, at Landlord's cost and expense, as soon as reasonably possible, to restore the remaining portion of the Demised Premises to a complete unit of like quality and character as existed prior to such appropriation or taking, and, thereafter, all Monthly Fixed Rent and payment obligations of Tenant shall be adjusted on an equitable basis, taking into account the relative value of the portion taken as compared to the portion remaining. For E-14 purposes of this Section 20, a voluntary sale or conveyance in lieu of condemnation, but under threat of condemnation, shall be deemed an appropriation or taking under the power of eminent domain. (f) Landlord represents and warrants that at the Effective Date, it has no actual or constructive knowledge of any proposed condemnation, road or access or visibility changes, including turn restrictions, barriers or medians, overpasses, underpasses or bypasses, that would affect the Building, the outdoor Facilities or the Demised Premises or Tenant's Proposed Use of any part of the Building or the Demised Premises. 21. COSTS AND ATTORNEYS` FEES. If Landlord or Tenant shall bring any action against the other, arising out of this Lease, the prevailing party shall be reimbursed by the other party for reasonable attorneys' fees and costs incurred in such suit, at trial and on appeal, and such attorneys' fees and costs shall be deemed to have accrued on the commencement of such action. 22. NOTICES. All notices, demands, or other communications of any type (herein collectively referred to as "Notices") given by Landlord to Tenant or by Tenant to Landlord, whether required by this Lease or in any way related to the transaction contracted for herein, shall be void and of no effect unless given in accordance with the provisions of this Lease. All Notices shall be legible and in writing and shall be delivered to the person to whom the Notice is directed, either in person with a receipt requested therefor or sent by a recognized overnight courier service for next day delivery or by United States certified mail, return receipt requested, postage prepaid and addressed to the parties at their respective addresses set forth in Section 1, and the same shall be effective (a) upon receipt or refusal if delivered personally, (b) one (1) business day after depositing with such an overnight courier service, or (c) three (3) business days after deposit in the mails if mailed, addressed to Landlord and Tenant. Either party hereto may change the address for Notices specified above by giving the other party ten (10) days advance written Notice of such change of address. 23. HAZARDOUS SUBSTANCES. (a) Landlord covenants that if Hazardous Substances are now or hereafter present in the Demised Premises in amounts or under circumstances that violate any Legal Requirements, or if any leak, Spill, discharge, emission or disposal of Hazardous Substances has occurred or hereafter occurs, or if the soil and groundwater under the Dernised Premises are now or hereafter contaminated with Hazardous Substances, that unless Tenant has responsibility therefor in accordance with Section 23(b) below, Landlord will investigate and remediate the environmental condition at Landlord's sole Cost and expense, and without reimbursement from Tenant. Landlord agrees to indemnify, defend, protect and hold Tenant and its officers, employees and agents harmless from any claims, judgments, damages, fines, penalties, costs, liabilities (including sums paid in settlement of claims) or loss including attorney's fees, consultants fees, and expert fees which arise during or EW15 after the Term in connection with the presence or suspected presence of Hazardous Substances in, on or under the Demised Premises, unless such Hazardous Substances are present as the result of the negligence or willful misconduct of Tenant, its officers, employees or agents. Without limiting the generality of the foregoing, this indemnification specifically covers costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of the presence or suspected presence of Hazardous Substances in, on or under the Demised Premises, unless the Hazardous Substances are present as the result of the negligence or willful misconduct of Tenant, its officers, agents or employees. (b) Tenant shall not use, store, generate, transit or dispose of any Hazardous Substances upon, in about, or under the Demised Premises, except any use or storage of any such Hazardous Substances customarily used in business offices, provided that such use or storage complies with all Legal Requirements. Tenant agrees to indemnify, defend, protect and hold Landlord and its officers, employees and agents harmless from any claims, judgments, damages, fines, penalties, casts, liabilities (including sums paid in settlement of claims) or loss including attorneys fees, consultants fees, and expert fees which arise during or after the Term resulting from the discharge, dumping, spilling (accidental or otherwise) onto parts of the Demised Premises by Tenant or any of its employees, agents, contractors or invitees. Without limiting the generality of the foregoing, this indemnification specifically covers costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision. 24. ADJACENT AREAS. Landlord shall not make any material change to the Outdoor Facilities within fifty (50) feet from the Demised Premises in any direction if, in Tenant's good faith business judgment, it would interfere with parking availability, visibility or access to the Building, and shall keep all access and walkways adjoining the Building free from obstructions. 25. SURVIVAL of LEASE. All representations, warranties and indemnities contained in this Lease shall survive the termination or expiration of this Lease. 20. ESTOPPEL CERTIFICATE. Tenant and Landlord agree at any time and from time to time, upon not less than ten (10) business days' prior written request from the other party, to execute, acknowledge and deliver to the requesting party a statement in writing, in form and content reasonably acceptable to both parties, an estoppel certificate certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), the dates to which Monthly Fixed Rent has been paid and certifying that it is not in default (or if a default is alleged, stating the nature of the alleged default), and further certifying such E-16 other matters as the requesting party shall require. It is intended that any such statement delivered pursuant to this Section may be relied upon by any prospective purchaser, lender, subtenant, assignee or any entity which is a party to a potential merger, consolidation with or to the acquisition of substantially all of the assets or stock of Landlord, or Tenant. 27. INDEMNIFICATION. (a) Subject to section 11 (c) , . ify g.... , representatives, employees, Tenant shall indemnify and hold Landlord, its a ents re and officers harmless from and against any and all claims, demands, liabilities, and expenses, including attorney's fees, arising from Tenant's use of the Demised Premises or from any act permitted, or any omission to act, in or about the Demised Premises, by Tenant or its agents, employees, contractors, customers or invitees, or from any breach or default by Tenant of this Lease, except to the extent caused by Landlord's negligence or willful misconduct. In the event any action or proceeding shall be brought against Landlord by reason of any such claim, Tenant shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord. (b) Subject to Section 11 (c) , Landlord shall indemnify and hold Tenant, its agents representatives, employe and officers harmless from and against any and all claims, demands, liabilities, and expenses, including attorney's fees, arising from Landlord's obligations or use of the Demised Premises, or parts of the Building outside of the Demised Premises, or from any act permitted, or any omission to act, in or about the Demised Premises or Land by Landlord or its agents, employees, contractors, or invitees, or from any breach or default by Landlord of this Lease, except to the extent caused by Tenant's negligence or willful misconduct. In the event any action or proceeding shall be brought against Tenant by reason of any such claim, Landlord shall defend the same at Landlord's expense by counsel reasonably satisfactory to Tenant. 28. REPRESENTATIONS AND WARRANTIES OF LANDLORD. To induce Tenant to execute, deliver and perform this Lease and without regard to any independent investigations made by Tenant, Landlord represents and warrants to Tenant on and as of the Effective Date as follows: (a) Landlord has full capacity, right, power and authority to execute, deliver and perform this Lease and all documents to be executed by Landlord pursuant hereto, and all required action and approvals therefor have been duly taken and obtained. The individuals signing this Lease and all other documents executed or to be executed pursuant hereto on behalf of Landlord are and shall be duly authorized to sign the same on Landlord's behalf and to bind Landlord thereto. This Lease and all documents to be executed pursuant hereto by Landlord are and shall be binding upon and enforceable against Landlord in accordance with their respective terms, and the transaction contemplated hereby will not result in a breach of, or constitute a default or permit acceleration of maturity under, any indenture, mortgage, deed of trust, loan agreement or other agreement to which Landlord or the Demised Premises is subject or by which Landlord or the Demised Premises is bound. E-17 (b) There are no claims, causes of action or other litigation or proceedings pending or, to the best of Landlord's knowledge, threatened in respect to the owner ship, operation or environmental condition of the Building or 'Demised Premises or any part thereof (including disputes with mortgagees, govern mental or quasi - governmental authorities, utility companies, contractors, adjoining land owners or suppliers of goods or services), except for claims which are fully insured and as to which the insurer has accepted defense without reservation. 29. MISCELLANEOUS. (a) Any and all discussions and negotiations between Landlord and Tenant have been merged into this Lease. No rights are conferred upon Landlord until this Lease has been executed by Tenant. Any and all representations and agreements by either of the parties or their agents made during negotiations prior to execution of this Lease and which representations are not contained in this Lease shall not be binding upon either of the parties. (b) Landlord and Tenant represent and warrant to each other that they have not had any dealings with any real estate brokers, finders or agents in connection with this Lease. (c) All terms and words used in this Lease, regardless of the number and gender in which they are used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context or sense of this Lease or any portion of this Lease may require, the same as if such words had been fully and properly written in the number and gender. (d) This Lease may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but such counterparts together shall constitute but one and the same instrument. (e) Landlord and Tenant are not and shall not be considered joint venturers nor partners and neither shall have power to bind or obligate the other except as set forth in this Lease. (f) If any provision of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons whose circumstances are other than those as to which it is held invalid or unenforceable, shall not be affected thereby. (g) No modification, alteration or amendment of this Lease shall be binding unless in writing and executed by both parties hereto. (h) The headings to the Sections of this Lease are inserted only as a matter of convenience and for reference, and in no way confine, limit or proscribe the scope or intent of any Section of this Lease, nor in any way affect this Lease. (1) This Lease shall be binding upon and inure to the benefit of the parties and any subtenants and their heirs, administrators, executors, successors and assigns. E- 1 8 0) Time is of the essence of this Lease and each provision; provided, however, if the final (but not any interim) date of any period set forth herein falls on a Saturday, Sunday or legal holiday under the laws of the United States of America, the final date of such period shall be extended to the next business day. (k) If Landlord or Tenant is delayed or prevented from performing any of its obligations under this Lease by reason of strike, lockouts, labor troubles, failure of power, riots, insurrection, war, acts of God or any other cause beyond that party's control (collectively, "Force Majeure"), the period of such delay or such prevention shall be deemed added to the time period herein provided for the performance of any such obligation by that party. (1) This Lease shall be governed by and construed and interpreted in accordance with the laws of the state in which the Building is located. (m) Each party hereto has reviewed and revised (or requested revisions of) this Lease, and therefore any usual rules of construction requiring that ambiguities are to be resolved against a particular party shall not be applicable in the construction and interpretation of this Lease or any Exhibits hereto. (n) Whenever either party is entitled to exercise its discretion hereunder, or to give or withhold its consent to some proposed action, each party agrees that it shall act reasonably in exercise its discretion, or withholding its consent, unless the relevant provisions of this Lease permit such party to act in its absolute discretion or sole judgment. IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed on the dates set forth below, intending the same to be effective as of the Effective Date. LANDLORD: CITY OF KALISPELL, MONTANA, a municipal corporation By ..... Name: Title: By Name: Title: Date: TENANT: WELLS FAROO BANK, N.A., a national banking association By Name: Title: By Name: Title: , 2005 Date: 2005 E- 1 9 Kalispell, Montana RETAIL LEASE CITY OF KALISPELL, MONTANA, a municipal corporation LANDLORD F, WELLS FARGO BANK, N.A., a national banking association TENANT 201 First Avenue East Kalispell, Montana TABLE OF CONTENTS Paae 1. FUNDAMENTAL TERMS AND ATTACHMENTS ............................... r. r.,. r 1 2. DESCRIPTION OF DEMISED PREMISES ................................................. 3 3. TERM..........................................................................................................4 4. EARLY CANCELLATION BY TENANT.....................................................4 5. EARLY CANCELLATION BY LANDLORD................................................4 G. MONTHLY FIXED RENT............................................................................ 5 7. USE OF DEMISED PREMISES.................................................................. 5 8. REAL ESTATE TAXES ......................................... . ......... . .......................... 5 9. OUTDOOR FACILITIES.............................................................................6 10. SERVICES..................................................................................................5 11. INSURANCE............................................................................................... 7 12. IMPROVEMENTS, ALTERATIONS AND SIGNAGE.................................. 8 13. MAINTENANCE AND REPAIRS; IMPROVEMENTS AND REPAIRSREQUIRED BY LAW .................................................................9 14. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS .........................9 15. TENANT'S PROPERTY AND WAIVER OF LANDLORD'S LIEN..........................................................................................................11 16. TENANT ASSIGNMENT AND SUBLETTING ...................... 0.......... 6... 0 r... 11 17. LANDLORD ASSIGNMENT.....................................................................12 18. PARKING AND ACCESS.........................................................................12 19. DEFAULT.................................................................................................12 29. CONDEMNATION....................................................................................14 21. COSTS AND ATTORNEYS' FEES...........................................................15 22. NOTICES..................................................................................................15 23. HAZARDOUS SUBSTANCES..................................................................15 TABLE OF CONTENTS Paae 24. ADJACENT AREAS ................................. . ...............................................1 S 25. SURVIVAL of LEASE............................................................0................18 25. ESTOPPEL CERTIFICATE......................................................................15 27. INDEMNIFICATION..................................................................................17 28. REPRESENTATIONS AND WARRANTIES OF LANDLORD .................. 17 29. MISCELLANEOUS...................................................................................18 EXHIBITS EXHIBIT "Ai' - Legal Description of the Land EXHIBIT "B" - Site Plan of the Demised Premises RETAIL LEASE THIS RETAIL LEASE ("Lease"), dated , 2005, is made between CITY OF KALISPELL, MONTANA, a municipal corporation ("Landlord"), and WELLS FARGO BANK, N.A., a national banking association (""Tenant"). 1. FUNDAMENTAL TERMS AND ATTACHMENTS. (a) Fundamental Terms. The following is a summary schedule of certain fundamental terms of this Lease. (i) Landlord: CITY OF KALISPELL P.O. Box 1997 312 First Avenue East Kalispell, MT 59903-1997 Attn: City Manager Tenant: WELLS FARGO BANK, N.A. c/o Wells Fargo Bank Corporate Properties Group 633 Folsom Street, 6th Floor San Francisco, California 04107-3600 Attn : Lease Administration Existing Leasehold Improve- ments: All improvements, alterations and additions comprising all or any part of the Demised Premises as of the 'Effective Date. Without limiting the foregoing, Tenant's existing automated teller machines and night depository box, together with related and ancillary equipment and fixtures, shall be treated as a part of Tenant's Existing Leasehold Improvements. Div} Demised Premises: The Building, the Land and the outdoor Facilities. M Address of Demised Premises: 201 First Avenue East, Kalispell, MT (vi) Land: The land legally described on Exhibit "A," attached hereto. (vii) outdoor Facilities: All parking areas, landscaped areas, sidewalks and driveways located on the Land outside the Building. 1 (viii) Building: 201 First Avenue East. (ix) Effective Date: The date that both Landlord and Tenant have signed this Lease as set forth on the signature pages and Tenant has received a fully executed counterpart of this Lease. fix} Commencement Date: The date that the sale of the Demised Premises, from Tenant to Landlord, is completed, as evidenced by recordation of a warranty deed. (xi) Term: From the Commencement Date until the expiration of ten (10) Lease Years following the commencement Date, subject to the parties' early termination rights under Sections 4 and 5. (xii) Extensions: None. (xiii) Monthly Fixed Rent: $4,166.66 It is understood and agreed that this is a full service lease, and Tenant shall not be responsible for any of Landlord's costs related to the ownership, operation and management of the Demised Premises. (xiv) Landlord's Permanent Tax Identification No.: 81-6001281 (xv) Lease Year: The first Lease Year shall be defined as that period commencing on the commencement Date and expiring on the last day of the calendar month in which the first anniversary of the commencement Date occurs; each subsequent Lease. Year shall be the twelve (12) month period beginning on the day following the expiration of the previous Lease Year. (xvi) Person: Shall mean any individual, partnership, firm, association, corporation, trust or any other form of business or government entity. (xvii) Hazardous Substances: Shall mean any and all hazardous, ultra -hazardous, or toxic substances, wastes or materials regulated under any laws or regulations applicable to the environment or the protection of human health. 2 (xviii) Legal Requirements: Shall mean all applicable federal, state and local laws, statutes, codes, acts, ordinances, directions, rules, regulations and requirements which apply to the Demised Premises or the use or occupancy thereof, including, without limitation, local and state building, electrical, mechanical, seismic, and fire and safety codes (including the Americans with Disabilities Act of 1990, 42 U.S.C. §12101 et seq. and comparable codes and statutes of the State of Montana), and all applicable present and future statutes, regulations, rules, ordinances, codes and orders relating to Hazardous Substances (including the reporting, licensing, permitting, investigation and remediation of emissions, discharges, releases or threatened releases of Hazardous Substances, whether into the air, surface water, groundwater or land, and including the manufacture, processing, distribution, use, treatment, storage, disposal, transport and handling of Hazardous Substances) or the protection of human health or the environment. (xix) Default Rate: Shall mean a ten percent (10%) per annum rate of interest, compounded monthly on the first day of each calendar month. (b) Exhibits. The following exhibits ("Exhibits") are attached hereto and, by this reference, incorporated herein: Exhibit "A" Legal Description of the Land Exhibit "B" Site Plan of the Demised Premises 2. DESCRIPTION of DEMISED PREMISES. In consideration of the mutual covenants contained herein, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the land and all improvements located thereon and all appurtenances associated therewith commonly known as 201 First Avenue East, which land is legally described on Exhibit "A" attached hereto. The Building and its outdoor Facilities are described on the Site Plan of the Building attached hereto as Exhibit "B", and are located in Kalispell, Flathead County, State of Montana. The Building, Outdoor Facilities and Land being leased to Tenant (referred to herein collectively as the "Demised Premises") are shown on the Site Plan attached hereto as Exhibit "B," and specifically includes Tenant's existing automated teller machines (ATMs) and night depository box. Landlord also grants to Tenant the non- exclusive right to use for the Term as an easement appurtenant to the Demised Premises, (a) all rights, easements and appurtenances belonging or appertaining to the Land, (b) all right, title and interest of Landlord in and to any and all roads, streets, alleys and ways bounding the Demised Premises. K 3. TERM. (a) The Term shall commence on the Commencement Date and shall continue for the balance of the Term, subject to early termination in accordance with Sections 4 and 5 below. Tenant is presently in occupancy of the Demised Premises, and Tenant acknowledges that possession of the Demised Premises shall have been tendered to and accepted by it as of the Commencement Date, and that the Demised Premises shall have been delivered in the condition required by this Lease, i.e., "AS IS. " (b) The obligation to pay Monthly Fixed Rent and other sums due under this Lease shall begin on the Commencement Date. (c) Upon expiration or sooner termination of this Lease, Tenant shall surrender the Demised Premises to Landlord in good condition, reasonable wear and tear and casualty excepted. Tenant shall remove all of Tenant's Property (as defined in Section 15(a) below), and any of Tenant's Property not removed from the Demised Premises on or prior to the expiration of this Lease, or within ten (10) days following the earlier termination of this Lease, shall be treated as abandoned by Tenant. Tenant shall also remove any alterations or improvements made to the Demised Premises (other than the Existing Leasehold Improvements) unless Landlord made its consent to the original installation of such improvements or alterations conditioned upon such improvements and alterations not being removed on the expiration or earlier termination of this Lease. Tenant shall promptly repair any and all damage done to the Demised Premises caused by the removal of Tenant's Property and the other improvements or alterations removed by Tenant on the expiration or earlier termination of this Lease. (d) In the event Tenant continues to occupy the Demised Premises after the last day of the Term, as the same may have been extended, and such continued occupancy is permitted by Landlord, a tenancy from month to month only shall be created, and Monthly Fixed Rent shall be fixed at one hundred and ten percent (110%) of the Monthly Fixed Rent that was in effect on the last day of the Term. 4. EARLY CANCELLATION BY TENANT. Tenant shall have the right to terminate this Lease at any time upon giving Landlord at least ninety (90) days advance written notice of Tenant's election to terminate this Lease by virtue of this Section 4. This Lease shall thereupon terminate effective on the date specified by Tenant in its notice to Landlord (provided that such date must be at least ninety (90) days thereafter). 5. EARLY CANCELLATION BY LANDLORD. Landlord shall have the right to terminate this Lease upon giving Tenant at least ninety (90) days advance written notice of Landlord's election to terminate this Lease by virtue of this Section 5; provided, however, that no such written election may be given unless and until Tenant has ceased operating indefinitely in the Demised Premises. This 4 Lease shall thereupon terminate effective on the date specified by Landlord in its notice to Tenant (provided that such date must be at least ninety (90) days thereafter). 8. MONTHLY FIXED RENT. From and after the Commencement Date, during the Term, Tenant agrees to pay to Landlord "Monthly Fixed Rent," without offset, claim, or deduction, in the amount set forth in Section 1(a)(xiii) above. All Monthly Fixed Rent installments are due in advance, the first monthly installment payment being due on the Commencement Date, and each subsequent installment thereafter on the first day of each and every calendar month during the Term. 7. USE OF DEMISED PREMISES. (a) Tenant's "Proposed Use" of the Demised Premises is for a full service bank with automated teller machines, together with the sale of services and products provided in the ordinary course of Tenant's financial services business, including financial services not presently contemplated for the Demised Premises but which may be offered in other bank branches of Tenant, whether now or in the future. For purposes of this Lease, "financial services" shall mean products and services now or hereafter during the Term commonly offered by full service banks, credit unions, savings and loan associations, financial planners and financial investment companies (e.g., Charles Schwab & Co., Merrill Lynch etc.), which include, but are not limited to, traditional banking services (e.g., demand accounts, safe deposit), mortgage loans, business loans, insurance, stock and mortgage brokerage, financial planning and tax advice, and whether such products and services are offered for sale, rental or use by Tenant's employees at the Demised Premises or through Tenant's ATMs at the Demised Premises. Notwithstanding the foregoing, Tenant may conduct any lawful activity in the Demised Premises. (b) Nothing in this Lease shall require Tenant to remain open for business in the Demised Premises, so long as Tenant performs and observes all other obligations and conditions on Tenant's part to be performed and observed hereunder. 8. REAL ESTATE TAXES. Tenant shall pay or cause to be paid, prior to delinquency, any and all taxes and assessments levied upon all trade fixtures, inventories and other personal property placed in and upon the Demised Premises by Tenant and owned by Tenant. Landlord shall be solely responsible for all taxes and/or assessments assessed by any taxing authority [including sales taxes] which are related to Landlord's ownership of the Demised Premises, including, without limitation: (a) personal property, fixtures or equipment taxes assessed against Landlord's property; (b) franchise taxes assessed against Landlord; (c) taxes on Landlord's gross rents or profits; (d) inheritance, state, gift, income, transfer or excess profit taxes assessed against Landlord; (e) sales taxes payable by Landlord; and (f) real property taxes and assessments, including, but not limited to, any fees, interest and penalties arising from any such tax or assessment, assessed against all or any portion of the Land and the improvements located thereon, k including, but not limited to, any such taxes and assessments attributable to the Building or any portion thereof. 9. OUTDOOR FACILITIES. (a) Landlord shall maintain, repair, replace, restore, and repaint the outdoor Facilities and keep them in good order and repair and in neat, clean and well maintained condition in accordance with the commercially reasonable standard of maintenance for buildings similar in size and use to the Building in the general metropolitan area in which the Building is located. Landlord's obligation shall, without limitation, include: (i) resurfacing, including keeping the parking surfaces and access drives in a level, smooth, and evenly covered condition with the type of surfacing material originally installed or a substitute material comparable in all respects in quality, use, and durability; (ii) cleaning, striping, lighting, and all other tasks necessary to maintain the parking and outdoor Facilities in a clean, safe, and orderly condition, including removal of trash, rubbish, garbage, and other refuse; (iii) maintaining any perimeter wall in good condition and repair; (iv) placing, keeping in repair, and replacing any directional signs, markers, and keeping in repair, and replacing when necessary such artificial lighting facilities as are required to keep the outdoor Facilities lit, as required by Section 9(b); (v) maintaining, repairing and replacing all utility lines, mains and facilities and stormwater detention areas; and (vi) maintaining all landscaped areas, making such replacements of shrubs and other landscaping as is necessary, and keeping those areas at all times adequately weeded, fertilized, and watered. (b) Landlord agrees to provide adequate lighting of the outdoor Facilities including the parking lot from thirty (30) minutes before dusk until at least one and one-half (1-1/2) hours after Tenant closes its business in the Demised Premises, which lighting shall include the illumination of any pylon or monument sign advertising Tenant's business conducted in the Demised Premises. 10. SERVICES. (a) Landlord agrees to cause the necessary mains, conduits and other facilities to be provided to make water, sewer, gas, phone and electricity available to the Demised Premises. Landlord shall also make available to Tenant, at Landlord's expense, all water, sewer, gas and electrical power required for the normal use and occupancy of the Demised Premises for the Proposed Use. r■,, u 11. (b) Tenant shall be responsible for its own security arrangements. (c) Landlord shall provide for collection of refuse and garbage from the Demised Premises on a regular basis, in coordination with Tenant. (d) Landlord shall not be liable to Tenant in damages or otherwise if utilities or services are interrupted or terminated because of necessary repairs, installations, or improvements, or any cause beyond Landlord's reasonable control, nor shall any such interruption or termination relieve Tenant of the performance of any of its obligations hereunder, except that if Tenant is unable to operate its business for a period greater than forty-eight (48) hours after the occurrence of said interruption or termination, there shall be an abatement of all Rental obligations hereunder during such period. INSURANCE. (a) Landlord agrees to carry, or cause to be carried, during the term hereof Commercial General Liability Insurance (hereinafter, "Landlord's Liability Insurance") on the Building, Land and Outdoor Facilities, naming Tenant as an additional insured providing coverage in the following amounts: General Aggregate: $310007000 Products -completed operations Aggregate: $31000,000 Personal and Advertising Injury: $3,000,000 Each Occurrence: $31000X0 Fire Damage (any one fire): $ 5001000 Landlord shall promptly deliver to Tenant a certificate of Landlord's Liability Insurance. (b) Landlord also agrees to carry, during the Term hereof, all risk property insurance (hereinafter, "Landlord's Property Insurance") covering fire and extended coverage, earthquake, vandalism and malicious mischief, sprinkler leakage and all other perils of direct physical loss or damage (other than flood) insuring the Building and Outdoor Facilities (excluding Tenant's Property) for the full replacement value thereof. Landlord shall furnish Tenant a certificate of Landlord's Property Insurance. (c) Landlord and Tenant and all parties claiming under them mutually release and discharge each other from all claims and liabilities arising from or caused by any casualty or hazard, covered or required hereunder to be covered in whole or in part by insurance on the Demised Premises, or in connection with property on or activities conducted on the Demised Premises, and waive any right of subrogation which might otherwise exist in or accrue to any person on account thereof. Each insurance policy required to be carried by Landlord or Tenant under this Lease shall include a clause or endorsement to the effect the waiver contained herein will not adversely affect or impair such policy or prejudice the right of the insured to recover under such policy, and each such policy shall permit this waiver of liability and contain a waiver of subrogation. 7 12. (d) Tenant shall not keep, use, sell or offer for sale in or upon the demised Premises any article which may be prohibited by the standard form of fire insurance policy. In the event Tenant's occupancy causes any increase of premium for the fire, and/or casualty rates on Landlord's Property Insurance, Tenant shall pay the additional premium on the fire and/or casualty insurance policies by reason thereof. Tenant also shall pay in such event, any additional premium on the rent insurance policy that may be carried by the Landlord for its protection against rent loss through fire. Bills for such additional premiums shall be rendered by Landlord to Tenant at such times as Landlord may reasonably elect, and shall be due from, and payable by, Tenant within thirty (30) days of written demand and the amount thereof shall be deemed to be, and be paid as, additional Rent. IMPROVEMENTS, ALTERATIONS AND SICNACE. (a) Tenant shall not make any exterior or structural alterations to the Building without first obtaining the written consent of Landlord, which shall not be unreasonably withheld so long as such alterations remain in overall architectural harmony with the decorative treatment of the Building. Tenant shall be permitted to make interior, non structural alterations, additions and improvements without Landlord's prior consent. Subject to compliance with applicable municipal law, Tenant shall be permitted to affix canopies, awnings and/or flags on the exterior of the Building from time to time during the Term so long as such items remain in overall architectural harmony with the decorative treatment of the Building; and provided further, that nothing herein shall require Tenant's removal of any existing canopies, awnings and/or flags currently displayed from or upon the Building. On the expiration or earlier termination of this Lease, all alterations, additions and improvements installed by Tenant after the Commencement Date shall be removed from the Demised Premises, and Tenant shall repair any damage occasioned by such removal, except that such alterations, additions and improvements shall not be removed if their abandonment by Tenant was an express condition to Landlord's consent to their original installation or construction. (b) Throughout the Term, Tenant may maintain and keep all signage currently installed within or upon the exterior of the Building, and Tenant may replace such signage, without Landlord's consent, so long as such replacement signage is of the same general size, type and location as the signage being replaced. Any additional signage desired by Tenant to be installed on the exterior of the Building shall require Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. (c) This Section 12 shall not apply to the installation, use and removal of "Tenant's Property" (as defined in Section 15(a) below) nor to any Existing Leasehold Improvements. E '� r, 13. 14. MAINTENANCE AND REPAIRS; IMPROVEMENTS AND REPAIRS REQUIRED BY LAW. (a) Throughout the Term (except as otherwise specified below), Landlord shall be solely responsible for undertaking all maintenance, repairs and replacements of the following items, all without reimbursement from Tenant: (i) All maintenance, repairs and replacements required for the heating, ventilation and air-conditioning system serving the Demised Premises; (1i) All maintenance, repairs and replacements required for the roof, roof covering and/or roof structure of the Building; (iii) All maintenance, repairs and replacements required for structural elements of the Demised Premises, the Building and all outdoor Facilities; (iv) All maintenance, repairs and slab or foundations, floors, supporting and plumbing and electrical systems. replacements required for the Building members, structural and outside walls, (b) Tenant covenants and agrees that during the Term, Tenant shall, at Tenant's expense, keep, maintain and replace if necessary, the interior of the Building, trade fixtures, facial signage, and its panels on any monument sign, storefront glass, storefront doors, Tenant's Property, and all other parts of the Building not otherwise part of Landlord's responsibility under this Lease, in good condition and repair. (c) Tenant shall observe and comply with the requirements of all covenants, conditions and restrictions of record, and all Legal Requirements now or hereafter in effect, which apply to the Demised Premises by reason of the uses being made of the Demised Premises by Tenant (i.e., apart from general retail and office uses) or by reason of any improvements or alterations proposed or undertaken by Tenant or by reason of any repairs or maintenance required of Tenant hereunder. Landlord shall be responsible, at Landlord's sole cost and expenses and without reimbursement from Tenant, for making all repairs, replacements, improvements and alterations required in order to keep the Building, the Land and the outdoor Facilities in compliance with all Legal Requirements, if and to the extent that the same is not Tenant's responsibility under the preceding sentence. DAMAGE To OR DESTRUCTION OF IMPROVEMENTS. (a) If the Demised Premises or any portion thereof shall be damaged or destroyed by fire or other casualty, Tenant shall immediately notify Landlord orally and in writing and Landlord shall (except as provided below) promptly remove any resulting debris and make such repairs, restoration or rebuilding as is necessary to restore the Demised Premises substantially to their condition immediately prior to such damage or destruction with all due diligence, and this Lease shall remain in full force and effect; provided, however, notwithstanding the foregoing or anything to the contrary hereinafter provided, if any repairs, restoration or reconstruction are not commenced within sixty (60) days from the date of the casualty and are not actually 9 repaired, restored or reconstructed to substantially the same condition in which it was immediately prior to the casualty within nine (9) months of the date of the casualty, Tenant may terminate this Lease by delivery of written notice to Landlord. Provided that Landlord's Property Insurance remains in effect and has not lapsed, Landlord shall not be required to provide funds in excess of said insurance proceeds which may be required for such repairing, restoring or rebuilding. In the event of a termination of the Lease as aforesaid, this Lease shall be null and void and of no further force or effect and the parties shall have no further rights or obligations hereunder. Notwithstanding anything to the contrary herein contained, Landlord shall have no right, title, interest or claim to insurance maintained by Tenant with respect to Tenant's Property, including, but not limited to insurance proceeds payable with respect thereto. (b) Tenant shall be entitled to a prorated deduction of all Rental for that period of time which the Demised Premises is untenantable, which deduction shall be based on the proportion of the space rendered untenantable bears to the space originally demised; provided, however, if Tenant is unable, in its reasonable business discretion, to operate its business in the Demised Premises, there shall be a full abatement of all Rental due hereunder. (c) Landlord agrees to accept the property insurance proceeds recoverable under Landlord's Property Insurance (as defined above in Section 11 ) as payment in full for any loss or damage to its property located in the Demised Premises, including the Existing Leasehold Improvements, and not to make any claim against or otherwise seek to recover from Tenant any additional sum for any loss or damage to the improvements located in the Demised Premises which occur and arise as a result of matters which can be covered by insurance (whether or not Landlord elects or fails to so insure), whether or not such loss or damage was caused by the acts or omissions of Tenant or Tenant's employees, agents, contractors, invitees or other person or cause which Tenant may be responsible for under law. (d) If damage is due to any cause other than fire or other peril covered by the insurance required to be carried by Landlord pursuant to Section 11 of this Lease ("Uninsured Casualty"), Landlord may elect to terminate this Lease upon written notice to Tenant within thirty (30) days following such casualty, provided, however, Tenant shall have the right within twenty (20) days of receipt of Landlord's notice, to notify Landlord that Tenant will pay the amount necessary to repair and restore the Demised Premises resulting from the Uninsured casualty, in which event Landlord's notice of termination shall be deemed withdrawn and Tenant shall promptly pay to Landlord, Landlord's estimate of the sum required to repair and restore the Demised Premises in excess of any available insurance proceeds, which sum shall be deposited in a trust account to be disbursed by Landlord only for the costs of repair and restoration resulting from the Uninsured Casualty, and Landlord shall in such event promptly proceed with such repair and restoration and use its best efforts to complete same within one hundred eighty (180) days of the receipt of such funds, subject to Force Majeure as defined in Section 29(k) of this Lease. 10 15. TENANT'S PROPERTY AND WAIVER OF LANDLORD'S LIEN. (a) "Tenant's Property" shall mean all trade fixtures, business equipment, inventory, trademarked items, decorative soffit, counters, shelving, showcases, teller lines, automated teller machines, night depositories, vaults, safe deposit boxes, security cameras, furniture, mirrors and other removable personal property installed in and removed from the Demised Premises from time to time by Tenant. All of Tenant's Property shall remain the property of Tenant. Landlord agrees that Tenant shall have the right, at any time and from time to time, to remove any and all of Tenant's Property. Tenant, at its expense, shall immediately repair any damage occasioned by the removal of Tenant's Property and upon expiration or earlier termination of this Lease. Tenant shall pay before delinquency all license fees and public charges levied, assessed or imposed upon its business operation in the Demised Premises as well as upon Tenant's Property. If any such items of property are assessed with property of Landlord, then such assessment shall be equitably divided between Landlord and Tenant. (b) From time to time, some or all of Tenant's Property may be financed or owned by someone other than Tenant. To the extent that any of Tenant's Properly is financed or owned by someone other than Tenant, (1) Landlord agrees that such Tenant's Property is not Landlord's property no matter how the same is affixed to the Demised Premises or used by Tenant and agrees to recognize the rights of the lender or owner of Tenant's Property, and (H) Landlord waives any claim arising by way of any Landlord's lien (whether created by statute or by contract) or otherwise with respect to Tenant's Property and agrees to sign and deliver to any lender, secured creditor or lessor a waiver of any lien Landlord may have on Tenant's Property if required by such lender, secured creditor or lessor. 16. TENANT ASSIGNMENT AND SUBLETTING. Tenant shall have the absolute right to sublet, assign or otherwise transfer its interest in this Lease to any parent or operating subsidiary of Tenant, or subsidiary of Tenant's parent, or to a corporation with which it may merge or consolidate ("Permitted Transfer"), without Landlord's approval, written or otherwise, as long as Tenant remains liable for full performance of all its obligations under this Lease. Provided that Tenant has not permanently discontinued nor indefinitely suspended operations in the Demised Premises providing banking and other financial services (it being understood that use of the Demised Premises that is limited to the continued operation of automated banking equipment shall not be treated as a suspension or discontinuance of banking services), Landlord's consent shall also not be required for any licensing arrangement between Tenant and other companies that provide services or products available at or through the Demised Premises that are incidental to banking and financial services; and such licensing arrangements shall also be treated as "Permitted Transfers." The consent of Landlord to any other transfer, assignment, subletting, license or concession agreement or hypothecation may be given or withheld by Landlord in its sole and absolute discretion. If Landlord falls to respond to any request by Tenant for Landlord's consent or approval within thirty (30) days of such request, the consent or approval of Landlord shall be deemed given. 11 17. LANDLORD ASSIGNMENT. Landlord shall have the right to transfer, assign and convey, in whole or in part, any or all of the right, title and interest to the Building and the Building and shall be released of liability and obligations accruing after the effective date of the transfer, provided, such transferee or assignee shall be bound by the terms, covenants and agreements herein contained, and shall expressly assume and agree in writing to perform the covenants and agreements of Landlord herein contained and such assignment shall not be effective until notice of such assignment or transfer, together with an executed copy of such assignment or transfer instrument, is received by Tenant. 18. PARKING AND ACCESS. Tenant shall have the exclusive use of all parking stalls on the Land. All parking shall be available to Tenant, its customer, invitees, employees and agents, at no cost or expense throughout the entire Term. Landlord shall not reduce or reconfigure parking spaces, nor grant rights to use such parking to other persons, without Tenant's written consent, except that Tenant shall not unreasonably withhold its consent to a reconfiguration plan that allows greater parking on the Land. Landlord shall not permit, except to the extent required by law, any fire lane, loading zone or other restrictive parking (except legally -required handicapped parking spaces) to be located in the vicinity of Tenant's entrances to the Building. 19. DEFAULT. (a) The occurrence of any of the following shall constitute a material default and breach of this Lease by Tenant (hereinafter 'Event of default"): 0) Any failure by Tenant to pay Monthly Fixed Rent or make any other payment required to be made by Tenant hereunder within ten (10) days after receipt of written notice from the Landlord. Notwithstanding the foregoing, Tenant shall not be in default for non-payment of Monthly Fixed Rent if (1) there exists a good faith dispute regarding the amount of such Monthly Fixed Rent or Tenant's liability therefor, and (2) Tenant has paid all Monthly Fixed Rent not in dispute, and (3) Tenant has deposited the amount of all disputed Monthly Fixed Rent into an independent escrow with instructions for such sums not to be released except upon the written concurrence of both Landlord and Tenant, and (4) Tenant thereafter takes reasonable measures to resolve the dispute with Landlord as expeditiously as possible by whatever legal means are permitted or required by this Lease. (ii) Failure to perform any other provision of this Lease if the failure to perform is not cured within 39 days after written notice specifying the default has been given to Tenant. If the default cannot reasonably be cured within 30 days, Tenant shall not be in default of this lease if Tenant commences to cure the default within the 30 day period and diligently and in good faith continues to cure the default. 12 (iii) The making by Tenant of any general assignment for the benefit of creditors, the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition fled against Tenant, the same is dismissed within sixty (60) days); the appointment of a trustee or receiver to take possession that is not restored to Tenant within thirty (30) days, or the attachment, execution or other judicial seizure that is not discharged within thirty (30) days. (b) In the Event of Default by Tenant, then, in addition to all other rights and remedies available to Landlord by law or by other provisions hereof, at Landlord's option, Landlord may annul and cancel this Lease as to all future rights of Tenant. Tenant further agrees that in case of any such termination Tenant will indemnify the Landlord against all loss of Rent which Landlord may incur by reason of such termination, including, but not limited to, costs of restoring and repairing the Demised Premises and putting the same in rentable condition, costs of renting the Demised Premises to another tenant, loss or diminution of rents and other damage which Landlord may incur by reason of such termination and all reasonable attorneys fees and expenses incurred in enforcing any of the terms of this Lease. Neither acceptance of Rent by Landlord, with or without knowledge of breach, nor failure of Landlord to take action on account of any breach hereof, or to enforce its rights hereunder, shall be deemed a waiver of any breach, and absent written notice or consent, said breach shall be a continuing one. (c) If Tenant shall fail to pay, when the same is due and payable and after proper notice and the expiration of all cure periods, any Monthly Fixed Rent, said unpaid amounts shall bear interest from the due date thereof to the date of payment at the Default Rate. Tenant shall in addition, pay as additional Rent a fee of One Hundred Dollars ($100.00) for processing of late payments, late payments being defined as sums overdue and unpaid after proper notice and the expiration of all cure periods. (d) If Landlord should be in default in the performance of any of its obligations under this Lease, which default continues for a period of more than thirty (30) days after receipt of written notice from Tenant to Landlord (and any mortgage lender of Landlord's who has executed a Non -Disturbance and Attornment Agreement acceptable to Tenant) specifying such default, or if such default is of a nature to require more than thirty (30) days for remedy, but Landlord has not undertaken procedures to cure the default within such thirty (30) day period and diligently pursued such efforts to complete cure, Tenant may incur any expense necessary to perform the obligation of Landlord specified in such notice and deduct such expense from the Monthly Fixed Rent or other charges next becoming due. If the default continues for 30 days after written notice is received by the foregoing persons, of if such default is of a nature requiring more than 30 days to cure but Landlord has not undertaken procedures to cure the default within such 30-day period and diligently pursued such efforts to complete cure, then Tenant may abate all Rental due hereunder for the duration of the continuance of the default. 13 (e) If Landlord's default under Section 19(d) impairs Tenant's use or occupancy of the Demised Premises, and such default remains uncured or uncorrected after the notices required by Section 19(d) have been given and the cure periods therein provided have elapsed, or in the case of any emergency (in which event no notice or time to cure shall be required for Tenant to proceed in accordance with the further provisions of this Section 19(e)}, Tenant may, but shall not be obligated to, perform such obligations of Landlord or otherwise remedy Landlord's default(s); and Landlord shall pay to Tenant on demand the cost of Tenant's corrective action, plus interest on such costs at the Default Rate until paid; or Tenant may, at its option, deduct such corrective costs, plus interest, from the next ensuing Monthly Fixed Rent payments and all other payments due Landlord by the terms of this Lease until said amount has been paid in full. 20. CONDEMNATION. (a) If ten percent (10%) or more of the Demised Premises shall be appropriated or taken under the power of eminent domain by any public or quasi -public authority, then, at the election of either Landlord or Tenant, this Lease shall terminate and expire as of the date of such taking, and both Landlord and Tenant shall thereupon be released from any liability thereafter accruing hereunder. (b) Unless reasonably adequate substitute parking can be provided, if more than twenty percent (20%) of the square footage of the parking area is taken under the power of eminent domain by any public or quasi -public authority, then Tenant shall have the right to terminate this Lease as of the date of the taking. If less than twenty percent (20%) of the applicable parking is so taken by eminent domain, then this lease shall remain in full force and effect, but Landlord shall use its best efforts to provide adequate substitute parking to Tenant. (c) Any termination notice pursuant to this Section must be delivered within sixty (00) days after the date the applicable property is taken by the condemning authority. (d) Whether or not this Lease is terminated, nothing herein shall be deemed to affect Tenant's right to receive compensation for damages to Tenant's Property. Tenant shall have the right to pursue its claim for damages against the condemning authority in connection with any eminent domain proceeding. If this Lease is terminated pursuant to this Section 20, all Monthly Fixed Rent and other charges for the last month of Tenant's occupancy shall be prorated and Landlord shall refund to Tenant any Monthly Fixed Rent or other charges paid in advance. (e) If both Landlord and Tenant elect not to terminate this Lease, Tenant shall remain in that portion of the Demised Premises which shall not have been appropriated or taken, and Landlord agrees, at Landlord's cost and expense, as soon as reasonably possible, to restore the remaining portion of the Demised Premises to a complete unit of like quality and character as existed prior to such appropriation or taking, and, thereafter, all Monthly Fixed Rent and payment obligations of Tenant shall be adjusted on an equitable basis, taking into account the relative value of the portion taken as compared to the portion remaining. For 14 purposes of this Section 20, a voluntary sale or conveyance in lieu of condemnation, but under threat of condemnation, shall be deemed an appropriation or taking under the power of eminent domain. (f) Landlord represents and warrants that at the Effective Date, it has no actual or constructive knowledge of any proposed condemnation, road or access or visibility changes, including turn restrictions, barriers or medians, overpasses, underpasses or bypasses, that would affect the Building, the Outdoor Facilities or the Demised Premises or Tenant's Proposed Use of any part of the Building or the Demised Premises. 21. COSTS AND ATTORNEYS' FEES. If Landlord or Tenant shall bring any action against the other, arising out of this Lease, the prevailing party shall be reimbursed by the other party for reasonable attorneys' fees and costs incurred in such suit, at trial and on appeal, and such attorneys' fees and costs shall be deemed to have accrued on the commencement of such action. 22. NOTICES. All notices, demands, or other communications of any type (herein collectively referred to as "Notices") given by Landlord to Tenant or by Tenant to Landlord, whether required by this Lease or in any way related to the transaction contracted for herein, shall be void and of no effect unless given in accordance with the provisions of this Lease. All Notices shall be legible and in writing and shall be delivered to the person to whom the Notice is directed, either in person with a receipt requested therefor or sent by a recognized overnight courier service for next day delivery or by United States certified mail, return receipt requested, postage prepaid and addressed to the parties at their respective addresses set forth in Section 1, and the same shall be effective (a) upon receipt or refusal if delivered personally, (b) one (1) business day after depositing with such an overnight courier service, or (c) three (3) business days after deposit in the mails if mailed, addressed to Landlord and Tenant. Either party hereto may change the address for Notices specified above by giving the other party ten (10) days advance written Notice of such change of address. 23. HAZARDOUS SUBSTANCES. (a) Landlord covenants that if Hazardous Substances are now or hereafter present in the Demised Premises in amounts or under circumstances that violate any Legal Requirements, or if any leak, spill, discharge, emission or disposal of Hazardous Substances has occurred or hereafter occurs, or if the soil and groundwater under the Demised Premises are now or hereafter contaminated with Hazardous Substances, that unless Tenant has responsibility therefor in accordance with Section 23[b] below, Landlord will investigate and remediate the environmental condition at Landlord's sole cost and expense, and without reimbursement from Tenant. Landlord agrees to indemnify, defend, protect and hold Tenant and its officers, employees and agents harmless from any claims, judgments, damages, fines, penalties, costs, liabilities (including sums paid in settlement of claims) or loss including attorney's fees, consultants fees, and expert fees which arise during or 15 after the Term in connection with the presence or suspected presence of Hazardous Substances in, on or under the Demised Premises, unless such Hazardous Substances are present as the result of the negligence or willful misconduct of Tenant, its officers, employees or agents. Without limiting the generality of the foregoing, this indemnification specifically covers costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of the presence or suspected presence of Hazardous Substances in, on or under the Demised Premises, unless the Hazardous Substances are present as the result of the negligence or willful misconduct of Tenant, its officers, agents or employees. (b) Tenant shall not use, store, generate, transit or dispose of any Hazardous Substances upon, in about, or under the Demised Premises, except any use or storage of any such Hazardous Substances customarily used in business offices, provided that such use or storage complies with all Legal Requirements. Tenant agrees to indemnify, defend, protect and hold Landlord and its officers, employees and agents harmless from any claims, judgments, damages, fines, penalties, costs, liabilities (including sums paid in settlement of claims) or loss including attorney's fees, consultants fees, and expert fees which arise during or after the Term resulting from the discharge, dumping, spilling (accidental or otherwise) onto parts of the Demised Premises by Tenant or any of its employees, agents, contractors or invitees. Without limiting the generality of the foregoing, this indemnification specifically covers costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision. 24. ADJACENT AREAS. Landlord shall not make any material change to the Outdoor Facilities within fifty (50) feet from the Demised Premises in any direction if, in Tenant's good faith business judgment, it would interfere with parking availability, visibility or access to the Building, and shall keep all access and walkways adjoining the Building free from obstructions. 25. SURVIVAL of LEASE. All representations, warranties and indemnities contained in this Lease shall survive the termination or expiration of this Lease. 26. ESTOPPEL CERTIFICATE. Tenant and Landlord agree at any time and from time to time, upon not less than ten (10) business days' prior written request from the other party, to execute, acknowledge and deliver to the requesting party a statement in writing, in form and content reasonably acceptable to both parties, an estoppel certificate certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), the dates to which Monthly Fixed Rent has been paid and certifying that it is not in default (or if a default is alleged, stating the nature of the alleged default), and further certifying such 16 other matters as the requesting party shall require. It is intended that any such statement delivered pursuant to this Section may be relied upon by any prospective purchaser, lender, subtenant, assignee or any entity which is a party to a potential merger, consolidation with or to the acquisition of substantially all of the assets or stock of Landlord, or Tenant. 27. INDEMNIFICATION. (a) Subject to Section 11(c), Tenant shall indemnify and hold Landlord, its agents, representatives, employees, and officers harmless from and against any and all claims, demands, liabilities, and expenses, including attorney's fees, arising from Tenant's use of the Demised Premises or from any act permitted, or any omission to act, in or about the Demised Premises, by Tenant or its agents, employees, contractors, customers or invitees, or from any breach or default by Tenant of this Lease, except to the extent caused by Landlord's negligence or willful misconduct. In the event any action or proceeding shall be brought against Landlord by reason of any such claim, Tenant shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord. (b) Subject to Section 11(c), Landlord shall indemnify and hold Tenant, its agents, representatives, employees, and officers harmless from and against any and all claims, demands, liabilities, and expenses, including attorney's fees, arising from Landlord's obligations or use of the Demised Premises, or parts of the Building outside of the Demised Premises, or from any act permitted, or any omission to act, in or about the Demised Premises or Land by Landlord or its agents, employees, contractors, or invitees, or from any breach or default by Landlord of this Lease, except to the extent caused by Tenant's negligence or willful misconduct. In the event any action or proceeding shall be brought against Tenant by reason of any such claim, Landlord shall defend the same at Landlord's expense by counsel reasonably satisfactory to Tenant. 28. REPRESENTATIONS AND WARRANTIES OF LANDLORD. To induce Tenant to execute, deliver and perform this Lease and without regard to any independent investigations made by Tenant, Landlord represents and warrants to Tenant on and as of the Effective Date as follows: (a) Landlord has full capacity, right, power and authority to execute, deliver and perform this Lease and all documents to be executed by Landlord pursuant hereto, and all required action and approvals therefor have been duly taken and obtained. The individuals signing this Lease and all other documents executed or to be executed pursuant hereto on behalf of Landlord are and shall be duly authorized to sign the same on Landlord's behalf and to bind Landlord thereto. This Lease and all documents to be executed pursuant hereto by Landlord are and shall be binding upon and enforceable against Landlord in accordance with their respective terms, and the transaction contemplated hereby will not result in a breach of, or constitute a default or permit acceleration of maturity under, any indenture, mortgage, deed of trust, loan agreement or other agreement to which Landlord or the Demised Premises is subject or by which Landlord or the Demised Premises is bound. 17 (b) There are no claims, causes of action or other litigation or proceedings pending or, to the best of Landlord's knowledge, threatened in respect to the owner ship, operation or environmental condition of the 'Building or Demised Premises or any part thereof (including disputes with mortgagees, govern mental or quasi - governmental authorities, utility companies, contractors, adjoining land owners or suppliers of goods or services), except for claims which are fully insured and as to which the insurer has accepted defense without reservation. 29. MISCELLANEOUS. (a) Any and all discussions and negotiations between Landlord and Tenant have been merged into this Lease. No rights are conferred upon Landlord until this Lease has been executed by Tenant. Any and all representations and agreements by either of the parties or their agents made during negotiations prior to execution of this Lease and which representations are not contained in this Lease shall not be binding upon either of the parties. (b) Landlord and Tenant represent and warrant to each other that they have not had any dealings with any real estate brokers, finders or agents in connection with this Lease. (c) All terms and words used in this Lease, regardless of the number and gender in which they are used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context or sense of this Lease or any portion of this Lease may require, the same as if such words had been fully and properly written in the number and gender. (d) This Lease may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but such counterparts together shall constitute but one and the same instrument. (e) Landlord and Tenant are not and shall not be considered joint venturers nor partners and neither shall have power to bind or obligate the other except as set forth in this Lease. M If any provision of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons whose circumstances are other than those as to which it is held invalid or unenforceable, shall not be affected thereby. (g) No modification, alteration or amendment of this Lease shall be binding unless in writing and executed by both parties hereto. (h) The headings to the Sections of this Lease are inserted only as a matter of convenience and for reference, and in no way confine, limit or proscribe the scope or intent of any Section of this Lease, nor in any way affect this Lease. 0) This Lease shall be binding upon and inure to the benefit of the parties and any subtenants and their heirs, administrators, executors, successors and assigns. 0) Time is of the essence of this Lease and each provision; provided, however, if the final (but not any interim) date of any period set forth herein falls on a Saturday, Sunday or legal holiday under the laws of the United States of America, the final date of such period shall be extended to the next business day. (k) If Landlord or Tenant is delayed or prevented from performing any of its obligations under this Lease by reason of strike, lockouts, labor troubles, failure of power, riots, insurrection, war, acts of God or any other cause beyond that party's control (collectively, "Force Majeure"), the period of such delay or such prevention shall be deemed added to the time period herein provided for the performance of any such obligation by that party. (I) This Lease shall be governed by and construed and interpreted in accordance with the laws of the state in which the Building is located. (m) Each party hereto has reviewed and revised (or requested revisions of) this Lease, and therefore any usual rules of construction requiring that ambiguities are to be resolved against a particular party shall not be applicable in the construction and interpretation of this Lease or any Exhibits hereto. (n) Whenever either party is entitled to exercise its discretion hereunder, or to give or withhold its consent to some proposed action, each party agrees that it shall act reasonably in exercise its discretion, or withholding its consent, unless the relevant provisions of this Lease permit such party to act in its absolute discretion or sole judgment. IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed on the dates set forth below, intending the same to be effective as of the Effective Date. LANDLORD: CITY OF KALISPELL, MONTANA, a municipal corporation TENANT: WELLS FAROO BANK, N.A., a national banking association _ g N7qiGK' f Name:; Title: c i TV .K A &j A co.diZ Title: _ By Name: Title: Date: 2005 Date: , 2995 19 EXHIBIT LEGAL DESCRIPTION OF REAL PROPERTY The land referred to in this policy is situated in the State of Montana, County of Flathead and is described as follows: Lot 14 and the Southerly Half of Lot 15 of Block 57 of Kalispell, Montana, according to the plat thereof on file in the office of the County Clerk and Recorder of Flathead County, Montana, particularly described as follows Beginning at the Southwest corner of said Lot 14; thence Northwesterly along the Westerly boundary of said Lot 14 and the Southerly Half of Lot 15, a distance of 37.5 feet; thence Northeasterly parallel with the Southerly boundary of said Lot 15, a distance of 140.0 feet to the Easterly boundary of said Lot 15; thence Southeasterly along the Easterly boundary of the Northerly Half of Lot 15, and Lot 14, a distance of 37.5 feet to the Southeast corner of said Lot 14; thence Southwesterly along the Southerly boundary of said Lot 14, a distance of 140.0 feet to the Southwest corner of said lot, the Place of Beginning. Al Fart of Lots 15 , 16 and 17 of Block 57 of Kalispell, Montana, according to the recorded plat thereof, records of Flathead County, Montana, described as follows : Commencing at the Northwest corner of said Block 57; thence Southeasterly along the Westerly boundary of said Block 57, a distance of 49.00 feet to a point which is the Point of Beginning of the tract to be described herein; thence Northeasterly and parallel with the North boundary of said Lot 16, a distance of 69.00 feet to a point on the West face of the Strand Building; thence Southerly and parallel with the West boundary of said. Block 57, a distance of 0.54 feet; thence Easterly and parallel with the North boundary of said Lot 16, a distance of 10.37 feet to a point which is in the center of a 91, bearing wall; thence Southerly and parallel with the West boundary of said Block 57, and along the center ❑f the aforesaid. 91, bearing wall, a distance of 33.18 feet to a point which is the Southwest corner of the Strand Building; thence Northeasterly and parallel with the North boundary of said Lot 15, and along the South face of the Strand Building, a distance of 60 . 63 feet to a point on the Easterly boundary of Lot 15 of said Block 57; thence Southerly along the Bast boundary of said Lot 15 of Block 57, a distance of 4.76 feet; thence Westerly and parallel with the Northerly boundary of said Lot 15, a dis Lance of 140.00 feet to a point on the Westerly boundary of Bald Block 57; thence Northerly along to Westerly boundary of said Block 57 , a distance of 38.50 feet to the Place of Beginning. ---Continued- A West portion of Lots 17 and 18 in Block 57 of the original Townsite of said Y,.alispell, more particularly described as a rectangular tract 49 by 69 feet measured from the Northwest corner of said Lot 18 ,Southward on the West lines of said lots, a distance of 49 feet, and Eastward on the North line of said Lot 18, a distance of 69 feet. The Easterly 100 feet of Lots 1 and 2 and of the Northerly 37 1/2 feet of Lot 3, all .in Block 57 of Kalispell, according to the recorded plat thereof, records of Flathead County, Montana, which tract is more particularly described as follows Beginning at the Northeast corner of said Lot 1; thence Southeasterly along the Easterly line of said Lots 11 21 3, a distance of 137 1/2 feet to a point; thence Southwesterly on a line parallel to the Northerly line of said Lot 3, a distance of 100 feet to a point; thence Northwesterly and parallel to the Easterly line of said Block 57, a distance of 137 1/2 feet to a point on the Northerly line of said Block 57; thence Nortlaeasterly along the said Northerly line of said Block 57, a distance of 100 feet to the Place of Beginning. That part of Lot 3 of Flock 57 cf Kalispell, Montana, according -o the plat thereof on file in the office of the County Clerk and recorder of Flathead County, Montana, particularly described as follows: Beginning at a point on the Westerly boundary of ' said Lot 3, which point is Southeasterly, a distance of 17.5 feet from the Northwest corner of said Lot 3; thence continuing Southeasterly along the Westerly boundary of said Lot 3, a distance of 20.0 feet; thence Northeasterly and parallel with the Northerly boundary of said Lot 3, a distance of 40.0 feet; thence North westerly and parallel with the Westerly boundary of said Lot 3 , a distance of 20.0 feet; thence Southwesterly, a distance cf 40.0 feet to the Place of Beginning. -continued- a-4-051 a o Lots 7 and 8 of Block 44 of Kalispell, Montana, according to the official map or plat of said Townsite on file and of record in the office of the Cou.n.ty Clerk and Recorder of said County of Flathead, and more particularly described as follows: Beginning at a point formed by the intersection of the Easterly line of First Avenue East and the Northerly line of ,second Street, which point is also the Southwest corner of Lot 7; thence North 76011, East, a distance of 140 feet to the Southeast corner of Lot 7; thence North. 13 * 49 ` West, a distance of 50 feet to the Northeast corner of Lot 8 ; thence South 76611, East, a distance of 140 feet to the Easterly line of First Avenue East, which point is also the Northwest corner of Lot 8; thence South 13 ' 49' East, a distance of 50 feet to the Point of Beginning. THE END 44-051 EXHIBIT B. FLOOR PLAN OF PREMISES c c G v E a E v v G a m .0 0 ,A ... COG G G �..) Qf c fl4 � 0 M ++ T ax N .� v o z m o o m ¢ W 4) � � m rL m t) z z OFT1:11:10000 i -1 03 C4 ire 2 4Ci CO r ca z m � 0 cm 0 1 c c o 0 G E E v C m Z 0 0 U. .� C E U. H C C.C Q e4 *,a ran W m 17 �"' m Z m m m E :$ LL m U. m Ci z Z > Z CO mi F�EIE1EII:1Ell:1Ell:l 7 -i � ~ � m t J J �] v [V aC � t[7 3 go a ua t c w— z c m � cD At v