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EXHIBIT 10.12
LEASE AGREEMENT
This lease is made between Phillip J. Pace and PACE DEVELOPMENT COMPANY, P. O.
Box 159, Montebello, California 90640, herein called "Lessor" and Commerce
National Bank of 6001 East Washington Boulevard, City of Commerce, California
90040, herein called "Lessee".
1. DESCRIPTION OF PREMISES
Lessor leases to Lessee and Lessee hires from Lessor as herein
provided, those certain premises commonly known as 420 N. Montebello
Boulevard, Suite 101, Montebello, California 90640, AS MORE
PARTICULARLY OUTLINED ON EXHIBIT "A" ATTACHED HERETO.
2. TERM
The term of this lease is Three (3) years, beginning April 1, 1995.
3. RENT
The rent for the first twenty-four (24) month period under this lease
TOTALS One Hundred Twenty Four Thousand Five Hundred Eighty One
Dollars and 60/100 ($124,581.60). Lessee agrees to pay Lessor
installments of Five Thousand One Hundred Ninety and 90/100
($5,190.90) each, payable beginning April 1, 1995 and payable on the
first of each month thereafter during the first twenty four (24) month
period of the lease. The remaining term of this lease will be at a
rate adjusted to the CONSUMER PRICE index for LOS ANGELES-ANAHEIM-
RIVERSIDE ALL URBAN CONSUMERS 1982-84=100, as published by the United
States Department of Labor Statistics, or another acceptable published
index, maximum not to exceed 6% per year. Said adjustment will take
place annually throughout the term of this lease beginning with the
25th month of lease. All rent is due on or before first of each
month. At no time will an adjustment be made that lowers the monthly
rental amount.
This is a Triple Net Lease (N.N.N. Lessee pays 29% proportionate share
of property taxes, insurance, and maintains office interior and all
PREMISES heating, air conditioning, electrical and plumbing, BUT
EXCLUDING THE elevator).
4. USE OF PREMISES, GENERALLY
The premises are leased to be used as a bank. Lessee agrees to
restrict their use to such purposes and not to use or permit the use
of the premises for any other purpose without first obtaining the
consent in writing of Lessor, or of Lessor's authorized agent, Such
consent not to be unreasonably withheld. Lessee o obtain all
necessary licenses from City of Montebello, or any other governing
agency having jurisdiction thereof to operate said business.
5. NO USE THAT INCREASES INSURANCE RISK
Lessee shall not use the premises in any manner, even in his use for
the purposes for which the premises are leased, that will increase
risks covered by insurance on the building where the premises are
located, so as to increase the rate of insurance on the premises, or
to cause cancellation of any insurance policy covering the building.
Lessee further agrees not to keep on the premises, or permit to be
kept, used, or sold thereon, anything prohibited by the policy of fire
insurance covering the premises. Lessee shall comply, at this own
expense, with all requirements of insurers necessary to keep in force
the fire and public liability insurance covering the premises and
building. Lessee shall not store any toxic materials including, but
not limited to paint, varnish, solvents, or oil on the premises EXCEPT
NORMAL OFFICE SUPPLIES.
6. NO WASTE NUISANCE, OR UNLAWFUL USE
Lessee shall not commit, or allow to be committed, any waste on the
premises, create or allow any nuisance to exist on the premises, or
allow the premises to be used for any unlawful purpose.
7. UTILITIES
Lessee shall pay FOR ALL OF ITS OWN utilities furnished to its
premises for the term of this lease, and SHALL PAY FOR maintenance of
common areas, taxes and insurance prorated in proportion to the square
footage leased.
8. MAINTENANCE
Lessee, at its expense, shall maintain and keep the premises,
including, without limitation, windows, doors, skylight, signs and
interior walls. Lessor shall maintain the building roof, exterior
walls, storefront, and adjacent sidewalks and parking areas in good
condition.
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9. DELIVERY, ACCEPTANCE, AND SURRENDER OF PREMISES
Lessor represents that the premises are in fit condition for use as a
Bank. Lessee agrees to accept the premises on possession as being in
a good state of repair and in sanitary condition. They shall
surrender the premises to Lessor at the end of the lease term, if the
lease is not renewed, in the same condition as when it took
possession, allowing for reasonable use and wear, and damage by acts
of Nature, including fire and storms. Lessee shall remove all
business signs and symbols placed on the premises by them before
redelivery of the premises on which they were placed in the same
condition as before their placement.
10. PARTIAL DESTRUCTION OF PREMISES
Partial destruction of the leased premises shall not render this lease
void or voidable, or terminate it except as herein provided.
Lessee hereby waives any rights it may have under the provisions of
Sections 1932(2) and 1933(4) of the Civil Code.
If the premises are partially destroyed during the term of this lease,
Lessor shall repair them, when such repairs can be made in conformity
with local, state, and federal laws and regulation, within one hundred
eighty (180) days of the partial destruction. Rent for the premises
will be reduced proportionally to be extent to which the repaid
operations interfere with the normal conduct of Lessee's business on
the premises.
If the repairs cannot be so made within the time limited, Lessor has
the option to make them within a reasonable time, provided notice is
given to Lessee within thirty (30) days of partial destruction, and
continue this lease in effect with proportional rent rebate to Lessee
as provided for herein. If the repairs cannot be so made in one
hundred eighty (180) days, and if Lessor does not elect to make them
within a reasonable time, either party hereto has the option to
terminate this lease.
If the building in which the leased premises are located is more than
one-third destroyed, Lessor and Lessee may each at ITS option
terminate the lease whether the premises are insured or not.
11. LESSOR'S ENTRY FOR INSPECTION AND MAINTENANCE
Lessor reserves the right to enter on the premises at a reasonable
time UPON NOT LESS THAN 24 HOURS NOTICE to inspect them, to perform
required maintenance and repair, or to make additions or alterations
to any part of the building in which the premises leased are located,
and Lessee agrees to permit Lessor to do so. Lessor may, in
connection with such alterations, additions, or repairs erect
scaffolding, fences, and similar structures, post relevant notices,
and place moveable equipment PROVIDED THERE IS NO LOSS TO LESSEE of
quiet enjoyment of the premises or loss of occupation thereof.
12. POSTING "FOR SALE", "FOR LEASE", OR "FOR RENT" SIGNS
Lessor reserves the right to place "For Sale" signs on the premises at
any time during the lease, or "For Lease" or " For Rent" signs on the
premises at any time within thirty (30) days of expiration of the
lease, if Lessee has not exercised his option to renew, and Lessee
agrees to permit Lessor to do so.
13. SIGNS, AWNINGS, MARQUEES, ETC.
Lessee MAY construct or place OR CHANGE THE ONE FREE STANDING SIGN
CURRENTLY USED BY LESSEE AND MAY CONSTRUCT OR PLACE or permit to be
constructed or placed signs, awnings, banners, marquees, or other
structures projecting from the exterior of the premises without
Lessor's written consent thereto PROVIDED THAT SUCH SIGNAGE IS ALLOWED
BY THE CITY OF MONTEBELLO.
14. "QUITTING BUSINESS', "BANKRUPTCY" OR "LOST OUR LEASE" SALES
Lessor agrees not to conduct "Quitting Business", "Lost our Lease",
"Bankruptcy" or other such types of sales on the premises without
Lessor's written consent.
15. NON-LIABILITY OF LESSOR FOR DAMAGES; INDEMNITY
Lessor shall not be liable for liability or damage claims for injury
to persons, including Lessee and his agents or employees, or for
property damage from any cause, related to Lessee's occupancy of the
premises, including those arising out of damages or losses occurring
on sidewalks and other areas adjacent to the leased premises, during
the terms of this lease or any extension hereof, except to the extent
of Lessor's negligence.
16. LESSEE TO CARRY LIABILITY INSURANCE
Lessee shall procure and maintain in force during the term of this
lease and any extension thereof, at its
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expense, approved by Lessor, adequate to protect against liability for
damage claims through public use of r arising out of accidents
occurring in or around the leased premises, in a minimum amount of One
Million Dollars ($1,000,000.00) for each person injured, Three Hundred
Thousand Dollars ($300,000.00) for any one accident, and Three Hundred
Thousand Dollars ($300,000.00) for property damage.
Such insurance policies shall provide coverage for Lessor's contingent
liability on such claims or losses. Copies of the policies shall be
delivered to Lessor for keeping. Lessee agrees to obtain a written
obligation from the insurers to notify Lessor in writing at least
thirty (30) days prior to cancellation or refusal to renew any such
policies. Lessee agrees that if such insurance policies are not kept
in force during the entire term of this lease and any extension
thereof, Lessor may procure the necessary insurance and pay the
premium therefor, and that such premium shall be repaid to Lessor as
an additional rent installment for the month following the date on
which such premiums are paid.
17. LESSEE TO CARRY FIRE INSURANCE
Lessee agrees to and shall, within ten (10) days from the date hereof,
secure from a good and responsible company doing insurance business in
California, and maintain during the entire term of this lease fire and
extended insurance coverage upon the interior leased premises. Lessee
hereby agrees to hold lessor armless for any and all losses sustained
by fire to said premises, except to the extent of Lessor's negligence.
Lessor and Lessee agree that in the event of loss due to any of the
perils for which they have agreed to provide insurance, that each
party shall look solely to its insurance for recovery. Lessor and
Lessee hereby grant to each other, on behalf OF any insurer providing
insurance to either of them with respect to the demised premises a
waiver of any loss under such insurance.
18. LESSEE ASSIGNMENT, SUBLEASE, OR LICENSE FOR OCCUPATION BY OTHER
PERSONS
Lessee agrees not to assign or sublease the leased premises, any part
thereof, OR any right or privilege connected therewith, or to allow
any other person, except Lessee's agents and employees, to occupy the
premises or any part thereof, without first obtaining Lessor's written
consent. Lessor expressly covenants that such consent shall not be
unreasonably or arbitrarily refused. One consent by Lessor shall not
be a consent to a subsequent assignment, sublease, or occupation by
other persons. Lessee's unauthorized assignment, sublease, or license
to occupy shall be void, and shall terminate the lease at Lessor's
option. Lessee's interest in this lease is not assignable.
19. LEASE BREACHED BY LESSEE'S RECEIVERSHIP ASSIGNMENT FOR BENEFIT OF
CREDITORS, INSOLVENCY OR BANKRUPTCY
Appointment of a receiver to take possession of assets (except a
receiver appointed at Lessor's request as herein provided.) Lessee's
general assignment for benefit of creditors, or Lessee's insolvency or
taking or suffering action under the Bankruptcy Act is a breach of
this lease.
20. LESSOR'S REMEDIES ON LESSEE'S BREACH
If Lessee breaches this lease, Lessor shall have the following
remedies in addition to his other rights and remedies in such event:
A. Reentry. Lessor may reenter the premises immediately, and
remove all Lessee's personal and property therefrom. Lessor
may store the property in a public warehouse or at another
place of its choosing at Lessee's expense.
B. Termination. After reentry, Lessor may terminate the lease on
giving thirty (30) days written notice of such termination to
Lessee. Reentry only, without notice of termination, will not
terminate the lease.
C. Reletting Premises. After reentering, Lessor may relet the
premises or any part thereof, for any term, without
terminating the lease at such rent and on such terms as he may
choose. Lessor may make alterations and repairs to the
premises.
1. Liability of Lessee on Reletting. Lessee shall be
liable to Lessor in addition to its other liability
for breach of the lease for all expenses of
reletting, and of the alterations and repairs made,
which Lessor may incur. In addition Lessee shall be
liable to Lessor for the difference between the rent
installments that are due for the same period under
this lease.
2. Application of Rent on Reletting. Lessor at his
option may apply the rent received from reletting the
premises as follows:
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(A) To reduce Lessee indebtedness to Lessor under
the lease, not including indebtedness for
rent;
(B) To expenses of the reletting and alterations
and repairs made;
(C) To rent due under this lease;
(D) To payment of future rent under this lease as
it becomes due. If the new Lessee does not
pay a rent installment promptly to Lessor,
and the rent installment has been credited in
advance of payment to Lessee's indebtedness
other than rent, or if rentals from the new
lease have been otherwise applied by Lessor
as provided for herein, and during any rent
installment period are less than the rent
payable for the corresponding installment
period under this lease, Lessee agrees to pay
Lessor the deficiency separately for each
rent installment deficiency period, and
before the end of that period.
Lessor may at anytime after such reletting
terminate the lease for the breach because of
which he reentered and relet.
Lessor may recover from Lessee on terminating
the lease for Lessee's breach all damages
proximately resulting from the breach,
including the cost of recovering the
premises, and the worth of the balance of
this lease over the reasonable rental value
of the premises for the remainder of the
lease term, which shall be immediately due
Lessor from Lessee.
3. Appointment of Receiver. After reentry, Lessor may
procure the appointment of a receiver to take
possession of and collect rents from Lessee's
business.
If necessary, to collect such rents the receiver may
carry on Lessee's business and take possession of
Lessee's personal property used in the business,
including inventory, trade fixtures, and furnishings,
and use them in the business without compensating
Lessee therefor. Proceedings for appointment of a
receiver by Lessor, or the appointment of a receiver
by Lessor, or the appointment of a receiver and the
conducting by him of Lessee's business, shall not
terminate this lease unless Lessor has given Lessee
written notice of such termination as provided
herein.
21. LESSEE TO PAY LESSOR'S ATTORNEYS' FEES
If Lessor OR LESSEE files an action to enforce any covenant of this
lease, or for breach of any covenant herein, THE LOSING PARTY SHALL
PAY THE ATTORNEY FEES OF THE PREVAILING PARTY, such fees to be fixed
by the Court.
22. MANNER OF GIVING NOTICE
Notices given pursuant to the provisions of this lease, or necessary
to carry out its provisions, shall be in writing, and delivered
personally to the person to whom the notice is to be given, or mailed
postage prepaid, addressed to such person. Lessor's address for this
purpose shall be P. O. Box 159, Montebello, California 90640, or such
other address as he may designate to Lessee in writing. Notices to
Lessee may be addressed to Lessee at the premises leased.
23. EFFECT OF LESSOR'S WAIVER
Lessor's waiver of breach of one covenant or condition of this lease
is not a waiver of breach of others, or of subsequent breach of the
one waived. Lessor's acceptance of rent installments after breach is
not a waiver of the breach, except of breach of the covenant to pay
such rent installment(s) accepted.
24. LEASE APPLICABLE TO SUCCESSORS
This lease and the covenants and conditions hereof apply to and are
binding on the heirs, successors, legal representatives, and assigns
of the parties.
25. TIME OF ESSENCE
Time is of the essence of this lease.
26. EFFECT OF EMINENT DOMAIN PROCEEDINGS
Eminent domain proceedings resulting in the condemnation of a part of
the premises leased herein that leave the rest useable by Lessee for
purposes of the business for which the premises are leased will not
terminate this lease, unless Lessor at his option terminates it by
giving written notice of termination to Lessee. The effect of such
condemnation should such option not be exercised will be to terminate
the
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lease as to the portion of the premises condemned, and leave it in
effect as to the remainder of the premises. Lessee's rental for the
remainder of the lease term shall in such case be reduced by the
amount that the usefulness of the premises to it for such business
purposes is reduced. All compensation awarded in the eminent domain
proceedings as a result of such condemnation shall be Lessor's.
27. OPTION TO RENEW
Lessor grants Lessee an option to renew this lease for a period of
Five (5) years after expiration of the term of this lease. Rental
equal to the reserve herein, plus an additional amount to be
determined by the CONSUMER PRICE index for the LOS ANGELES-ANAHEIM-
RIVERSIDE ALL URBAN CONSUMERS 1982-84=100 as published by the United
States Department of Labor Statistics, or another acceptable published
index, (maximum cost of living calculations not to exceed 6% per
year). The other terms, covenants, and conditions of the renewal
lease to be the same as those herein. To exercise such option Lessee
must give Lessor written notice of his intention to do so at least
sixty (60) days before this lease expires.
Lessor grants to Lessee a second option to renew this lease for a
period of Five (5) years after expiration of the term hereof at a
rental equal to the rental reserve herein, plus an additional amount
to be determined by the CONSUMER PRICE index for the LOS ANGLES-
ANAHEIM-RIVERSIDE ALL URBAN CONSUMERS 1982-84=100 as published by the
United States Department of Labor Statistics, or another acceptable
published index, the other terms, covenants and conditions of the
renewal lease to be the same as those herein. To exercise such option
Lessee must give Lessor written notice to do so at least sixty (60)
days before this lease expires. In the event that the lessee fails to
notify lessor of its intent in writing lessor reserves the option to
renew the lease for the option period if he so chooses.
Executed at Montebello, California 90640, November 2, 1995.
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"LESSOR"
ADDRESS: P. O. Box 159, Montebello, CA 90640 BY: /s/ PHILLIP J. PACE
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PHILLIP J. PACE
PACE DEVELOPMENT COMPANY
"LESSEE"
ADDRESS: 6001 EAST WASHINGTON BOULEVARD BY: /s/ RICHARD F. DEMERJIAN
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RICHARD F. DEMERJIAN, PRESIDENT
CITY OF COMMERCE, CA 90040 COMMERCE NATIONAL BANK
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