EXHIBIT 10.4
COMMERCIAL LEASE
LANDLORD: STEPHEN L. FRAZIER AND SALLY L. FRAZIER TRUST
TENANT; REGENCY BANK
PROPERTY: 126 NORTH D STREET, MADERA, CALIFORNIA
PREAMBLE
This lease is made and entered into on May 13, 1996, by and between STEPHEN L.
FRAZIER AND SALLY L. FRAZIER TRUST ("Landlord"), and REGENCY BANK, a California
corporation ("Tenant").
Landlord, for and in consideration of the rent to be paid by Tenant and of
the covenants and provisions to be kept and performed by Tenant under this
lease, hereby leases to Tenant, and Tenant agrees to lease from Landlord, the
real property commonly known as 126 North D Street, Madera, California, and
legally described on Exhibit "A" attached hereto ("the Property"), together with
the freestanding single-story building ("the Building") and paved parking
(collectively referred to as "the Improvements") located on the Property. The
term "Premises" as used in this lease shall mean both the Property and the
Improvements.
ARTICLE 1. TERM OF LEASE
ORIGINAL TERM
Section 1.01. This lease shall be for a term of three (3) years, commencing
at 12:01 A.M. on the date on which Tenant takes possession of the Premises, or
July 9, 1996, whichever first occurs ("Commencement Date"), and ending at 12:01
A.M. on the date which is exactly three (3) years from the Commencement Date
("Original Term"), unless terminated earlier pursuant to the provisions of this
lease.
CONTINGENCY OF FDIC APPROVAL
Section 1.02. Except as stated in Section 1.03, below, the rights and
obligations of the Tenant under this lease are contingent upon the approval of
this lease by the Federal Deposit Insurance Corporation (FDIC).
NONCONTINGENT OBLIGATIONS OF TENANT
Section 1.03. Whether or not the Tenant obtains FDIC approval of this
lease, in consideration of the Landlord allowing up to one hundred twenty (120)
days from March 11, 1996 (July 9, 1996) for Tenant to obtain the approval of
this lease by the
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FDIC, Tenant unconditionally agrees to pay to Landlord the sum of $1,500.00 per
month, commencing May 10, 1996, and continuing through July 8, 1996, and the sum
of $2,091.75 per month, thereafter, commencing July 9, 1996. Tenant shall not
take possession of the Premises until the approval of FDIC is first obtained.
The taking of possession of the Premises by the Tenant shall be deemed to be
presumptive evidence as between the parties to this lease that FDIC approval of
this lease has been obtained by Tenant, thereby removing any contingency to this
lease as stated in Section 1.02, above. The obligation of the Tenant to make
payments to Landlord pursuant to this Section shall cease thirty (30) days after
written notice is received by Landlord from Tenant of the failure of Tenant to
have obtained the approval of this lease from FDIC. Any payments due under this
Section shall be prorated as of the end of the thirty (30) day period following
the receipt by Landlord of such written notice. If Tenant has not taken
possession of the Premises on or before July 9, 1996, Landlord may terminate
this lease upon thirty (30) day written notice being received by Tenant from
Landlord that unless Tenant takes possession of the Premises, and thereby
removes the contingency created by this Section, before the expiration of said
thirty (30) day period, this lease, and all of the rights and obligations of the
parties under this lease, except the obligation of the Tenant to make payments
pursuant to this Section, shall terminate at the conclusion of said thirty
(30) day period.
EXTENDED TERM
Section 1.04. In the event Tenant is not then in default under this lease,
Tenant shall have the option and right to extend the Original Term of this lease
for one period of three (3) years, commencing on expiration of the original
Term. If Tenant elects to extend the term of this lease, Tenant must give
Landlord written notice of Tenant's election to extend at least ninety (90) days
before expiration of the Original Term. During the Extended Term of this lease,
if any, Landlord and Tenant shall be bound by all of the obligations, covenants,
and agreements of this lease except that Tenant shall have no right to further
extend the term of this lease beyond or after expiration of the one three-year
period granted under this section. References throughout this lease to "the
term of this lease" shall include both the Original Term and the Extended Term,
if any, unless otherwise indicated.
HOLDING OVER
Section 1.05. In the event Tenant holds over and continues in possession of
the Premises after expiration of the original Term (when Tenant has not validly
exercised its option to extend the term of the lease in accordance with Section
1.04) or after expiration of the Extended Term (when Tenant has validly
exercised its option to extend the term of the lease in accordance with Section
1.04),
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Tenant's continued occupancy of the Premises shall be considered a month-to-
month tenancy subject to all the terms and conditions of this lease, with the
amount of rent payable for each month during the month-to-month tenancy being
the same as that stated for the Extended Term, as provided in Section 2.01,
below.
LANDLORD'S INABILITY TO DELIVER POSSESSION
Section 1.06. If Landlord is for any reason unable to deliver possession of
the Premises to Tenant on the Commencement Date set forth in Section 1.01 of
this lease, this lease shall not be void or voidable nor shall Landlord be
liable to Tenant for any loss or damage resulting from failure to deliver
possession to Tenant so long as Landlord has exercised, and continues to
exercise, reasonable diligence to deliver possession of the Premises to Tenant.
No rent shall, however, accrue or become due from Tenant to Landlord under this
lease until the actual physical possession of the Premises is delivered, or the
right to actual unrestricted physical possession of the Premises under this
lease is tendered by Landlord to Tenant. Furthermore, the term of this lease
shall not be extended by Landlord's inability to deliver possession of the
Premises to Tenant on the Commencement Date set forth in Section 1.01.
TERMINATION FOR FAILURE OF POSSESSION
Section 1.07. Notwithstanding any provision of Section 1.06 of this lease, if
Landlord for any reason fails to deliver actual physical possession of the
Premises, or fails to tender actual unrestricted physical possession of the
Premises under this lease, to Tenant within ten (10) days after the date
specified in Section 1.01 of this lease for commencement of the term of this
lease, Tenant may terminate this lease by giving Landlord written notice of its
election to do so. In the event Tenant elects to so terminate this lease, this
lease shall become null and void as of the date Tenant delivers its written
notice of termination to Landlord, and thereafter neither party to this lease
shall be under any further obligation or liability to the other because of this
lease and Landlord shall return to Tenant any consideration received from Tenant
pursuant to or for execution of this lease, including any rents paid. If Tenant
elects to terminate this lease in accordance with the provisions of this
section, it shall give written notice of its election to terminate to Landlord
not later than five (5) days after the date specified in Section 1.01 of this
lease for commencement of the term of this lease.
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ARTICLE 2. RENT
RENT
Section 2.01. Tenant agrees to pay to Landlord a fixed rental for the use
and occupancy of the Premises (the "Rent"). The amount of Rent payable for each
month during the original Term shall be $2,091.75, and the amount of Rent
payable for each month during the Extended Term, if any, shall be $2,510.10. The
Rent shall be payable on the first day of each and every month commencing on the
first day of the month after the Tenant takes possession of the premises (the
"Rent Commencement Date"), at the office of Landlord at 413 Mainberry, Madera,
California 93637, or at any other place or places as Landlord may from time to
time designate by written notice delivered to Tenant. Rent for partial calendar
months occurring at the commencement and termination of the term of this lease
shall be prorated accordingly.
EASIS FOR RENT
Section 2.02. The amount of Rent stated in Section 2.01, above, as to both
the Original Term and the Extended Term, is independent of any number used to
represent the square feet contained in the Building located on Premises or any
price per square foot for said Building. The amount of Rent as stated in
Section 2.01, above, is agreed upon between the parties with respect to the
Property and Improvements "as is." Tenant acknowledges that it has inspected the
Premises, that it has had an opportunity to measure the square feet contained in
the Building located on the Premises, and that it is satisfied that the Rent as
stated in Section 2.01, above, is appropriate for the Premises "as is." Landlord
makes no representation as to the accuracy of any measurement of the Building
located on the premises and no adjustment of Rent shall occur as the result of
any subsequent measurement of the Building located on the Premises.
ARTICLE 3. USE OF PREMISES
PERMITTED USE
Section 3.01. During the term of this lease (including the Original Term
and the Extended Term, if any), the Premises shall be used for the exclusive
purpose of operating and conducting a banking business, for uses normally
incident to that purpose, and for any use not in violation of the banking and
financial laws and regulations. Tenant shall not use or permit the Premises to
be used for any other purpose, without the prior written consent of Landlord,
which consent shall not unreasonably be withheld. In conducting the business
specified in this section in and on the Premises, Tenant shall sell any
merchandise and render any services that are customarily sold and rendered by
the operators of businesses of the same type in the state of California.
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INSURANCE HAZARDS
Section 3.02. Tenant shall not commit or permit the commission of any acts
on the Premises nor use or permit the use of the Premises in any manner that
will increase the existing rates for or cause the cancellation of any fire,
liability, or other insurance policy insuring the Premises or the improvements
on the Premises. Tenant shall, at its own cost and expense, comply with any and
all requirements of Landlord's and Tenant's insurance carriers necessary for the
continued maintenance at reasonable rates of fire and liability insurance
policies on the Premises and the improvements on the Premises.
WASTE OR NUISANCE
Section 3.03. Tenant shall not commit or permit the commission by others of
any waste on the Premises; Tenant shall not maintain, commit, or permit the
maintenance or commission of any nuisance as defined in Civil Code Section 3479
on the Premises; and Tenant shall not use or permit the use of the Premises for
any unlawful purpose.
COMPLIANCE WITH LAWS
Section 3.04. Tenant shall at Tenant's own cost and expense comply with all
statutes, ordinances, regulations, and requirements of all governmental
entities, both federal and state and county or municipal, including those
requiring capital improvements to the Premises, relating to Tenant's use and
occupancy of the Premises, whether those statutes, ordinances, regulations, and
requirements are now in force or are subsequently enacted. The judgment of any
court of competent jurisdiction, or the admission by Tenant in a proceeding
brought against Tenant by any government entity, that Tenant has violated any
such statute, ordinance, regulation, or requirement shall be conclusive as
between Landlord and Tenant and shall constitute grounds for termination of this
lease by Landlord.
ARTICLE 4. TAXES AND UTILITIES
UTILITIES
Section 4.01. Tenant shall pay, and hold Landlord and the property of
Landlord free and harmless from, all charges for the furnishing of gas, water,
sewer, electricity, telephone service, garbage pickup and disposal, and other
public utilities to the Premises during the term of this lease. All such
charges shall be paid by Tenant directly to the provider of the service and
shall be paid as they become due and payable but in any event before
delinquency.
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PERSONAL PROPERTY TAXES
Section 4.02. Tenant shall pay before they become delinquent all taxes,
assessments, and other charges levied or imposed by any governmental entity on
the furniture, trade fixtures, appliances, and other personal property placed by
Tenant in, on, or about the Premises including, without limiting the generality
of the other terms used in this section, any shelves, counters, vaults, vault
doors, wall safes, partitions, fixtures, machinery, plant equipment, office
equipment, television or radio antennas, and communication equipment brought on
the Premises by Tenant.
REAL PROPERTY TAXES AND ASSESSMENTS
Section 4.03. (a) In addition to the rent specified in Section 2.01 of this
lease, Tenant shall pay all real property taxes and general and special
assessments levied or assessed against the Leased Premises during the term of
this lease.
(b) Tenant's obligation to pay all real property taxes and general and
special assessments on the Leased Premises shall also include the obligation to
pay any increases in real property taxes and general and special assessments,
whether the increase results from an increase in the property tax rate and/or
increase in the valuation of the Leased Premises. However, Tenant shall not be
obligated during the original Term of this lease to pay any increase in real
property taxes and assessments, resulting from a sale of the property by
Landlord, which taxes and assessments are higher than the amount of real
property taxes and assessments which are assessed against the property as of the
date of the execution of this lease. For the purpose of this paragraph, any
retroactive reduction or increase in the real property taxes and assessments on
the property shall not affect the amount of such taxes and assessments which
existed at the time of the execution of this lease.
(c) The taxes and assessments levied against the Leased Premises during
the first and last years of the term of this lease shall be prorated between
Landlord and Tenant for purposes of this section as of 12:01 A.M. on date of
commencement and termination respectively of this lease.
(d) If any tax, assessment, or charge may be paid in one sum or in
installments, Tenant may elect either method of payment and its election shall
be binding on Landlord. If tenant makes the election to pay any tax,
assessment, or charge in installments and any installment is payable after
termination of this lease, the unpaid installment shall be prorated as of the
date of termination and the amount payable after the date of termination shall
be paid by Landlord.
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(e) Tenant shall not be required to pay any estate, gift, inheritance,
succession, transfer, franchise, income, or other taxes of a similar nature that
may be payable by Landlord or Landlord's legal representative, successors, or
assigns. Tenant also shall not be required to pay any tax that might become due
on account of Landlord's ownership of property other than the Leased Property,
notwithstanding that tax may become a lien on the Leased Property or be
collectible from it.
RIGHT TO CONTEST TAXES
Section 4.04. Tenant shall have the right, at Tenant's sole cost and
expense, to protest or contest in good faith the amount of any tax or assessment
or to defer payment of the tax or assessment until final determination of the
issue. On final determination, Tenant shall immediately pay the amount of the
judgment rendered and all costs, charges, interest, and related penalties. The
right granted to Tenant in this Section is conditioned on the following:
Before any contest, Tenant shall deposit with Landlord the full amount of
the tax or assessment, plus the amount of penalty that will be imposed on the
Leased Premises for failure to pay the tax or assessment before it became
delinquent, and one year's interest at the rate charged by the government entity
imposing the tax or assessment on the amount of the tax or assessment.
ARTICLE 5. ALTERATIONS AND REPAIRS
CONDITION OF PREMISES
Section 5.01. Tenant accepts the Premises, as well as the Improvements
located on the Premises, except for latent defects within the Premises which
would substantially effect the ability of Tenant to operate its business as a
bank and which would exceed the cost of $1,500.00 to Tenant to repair, in their
present condition and stipulates with Landlord that the Premises and
Improvements are in good, clean, safe, and tenantable condition as of the date
of this lease. Tenant further agrees with and represents to Landlord that the
Premises have been inspected by Tenant, that it has received assurances
acceptable to Tenant by means independent of Landlord or any agent of Landlord
of the truth of all facts material to this lease, and that the Premises are
being leased by Tenant as a result of its own inspection and investigation and
not as a result of any representations made by Landlord or any agent of Landlord
except those expressly set forth in this lease.
MAINTENANCE BY LANDLORD
Section 5.02. Tenant shall be solely responsible and liable for the payment of
the cost and expense of repairs or replacement of the heating and cooling units
of the Building up to the first $1,500.00
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per year of the total cost and expense to repair or replace both such units.
Landlord shall, at its own cost and expense, repair or replace the heating and
cooling units of the Building after the Tenant has expended the first $1,500.00
per year to repair or replace both such units. Tenant shall be solely
responsible and liable for the payment of the cost and expense of repairs or
replacement of all plumbing systems connected with the Building and all
electrical systems and components within the walls of the Building up to the
first $1,500.00 per year of the total cost and expense to repair or replace both
such systems. Landlord shall, at its own cost and expense, repair or replace
all plumbing systems connected with the building and all electrical systems and
components within the walls of the Building after the Tenant has expended the
first $1,500.00 per year to repair or replace both such systems. For the
purposes of this paragraph, "year" shall mean the one year period beginning on
the Commencement Date of the Original Term, as defined in Section 1.01 of this
lease, and each one year period thereafter. Landlord shall maintain, repair or
replace the roof of the Building.
Landlord shall not be liable for any damages to Tenant or the property of
Tenant resulting from Landlord's failure to make any repairs required by this
section unless written notice of the need for those repairs has been given to
Landlord by Tenant and Landlord has failed for a period of thirty (30) days
after receipt of the notice, unless prevented by causes not the fault of the
Landlord, to make the needed repairs. Notwithstanding anything in this section
to the contrary, Tenant shall promptly reimburse Landlord for the full cost of
any repairs made pursuant to this section required because of the negligence or
other fault, other than normal and proper use, of Tenant or its employees or
agents or subtenants, if any.
Landlord and its agents shall have the right to enter the Premises at all
reasonable times during business hours of the Tenant and upon forty-eight (48)
hours advance notice to the Tenant (and at any time during an emergency) for the
purpose of inspecting them or to make any repairs required to be made by
Landlord under this lease.
IMPROVEMENTS BY TENANT
Section 5.03. Tenant shall, at its own cost and expense, make improvements
to the Premises and the Building, specifically including landscaping (e.g.,
grass, bushes, etc.), parking lot renovation (e.g., resealing, etc.), exterior
paint to the Building and exterior lighting, and replacement of interior
carpeting, drapes, wallpaper and linoleum.
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MAINTENANCE BY TENANT
Section 5.04. Except as otherwise expressly provided in Section 5.02 of
this lease, Tenant shall at its own cost and expense keep and maintain all
portions of the Premises and all Improvements located on the Premises in good
order and repair and in as safe and clean a condition as they were when received
by Tenant from Landlord, reasonable wear and tear excepted. Tenant's obligation
to repair shall specifically include necessary repairs to the heating,
ventilation, air conditioning, and sewer systems, interior walls, floor
coverings, ceilings, painting and maintenance of exterior walls, the interior
and exterior portions of all doors, paved driveways and parking areas, and
landscaping for the Premises.
MAINTENANCE OF PLATE GLASS
Section 5.05. Tenant shall, at its own cost and expense, repair and replace
any plate glass in any window on the Premises that is broken regardless of any
cause, except by fault of Landlord, or by fault of some employee or agent of
Landlord. Furthermore, Tenant shall at Tenant's own cost and expense at all
times during the term of this lease carry adequate insurance on the glass in all
windows on the Premises to perform the repair and replacement requirements of
this section. Should Tenant fail to repair or replace any glass broken in a
window or fail to maintain adequate plate glass insurance on the glass in
windows on the Premises, Landlord may replace or repair the broken glass or
secure that insurance and Tenant shall promptly reimburse Landlord for the cost
of the repair, replacement, or insurance. In addition, Tenant shall pay
Landlord interest on those costs at the rate of ten percent (10%) per year from
the date the costs were incurred by Landlord to the date they are reimbursed to
Landlord by Tenant.
ALTERATIONS AND LIENS
Section 5.06. Tenant shall not make or permit any other person to make any
alterations to the Premises or to any Improvements on the Premises without the
prior written consent of Landlord. Landlord shall not unreasonably withhold
this consent. Tenant shall keep the premises free and clear from any and all
liens, claims, and demands for work performed, materials furnished, or
operations conducted on the Premises at the instance or request of Tenant.
Furthermore, any and all alterations, additions, improvements, and fixtures,
except furniture and trade fixtures, made or placed in or on the Premises by
Tenant or any other person shall on expiration or earlier termination of this
lease, become the property of Landlord and remain on the Premises. Landlord
shall have the option, however, on expiration or termination of this lease, of
requiring Tenant, at Tenant's sole cost and expense, to remove any or all such
alterations, additions, improvements, or fixtures from the Premises.
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INSPECTION BY LANDLORD
Section 5.07. Tenant shall permit Landlord or Landlord's agents,
representatives, or employees to enter the Premises during business hours of the
Tenant and upon forty-eight (48) hours advance notice to the Tenant for the
purpose of inspecting the Premises to determine whether Tenant is complying with
the terms of this lease, for the purpose of doing other lawful acts that may be
necessary to protect Landlord's interest in the Premises, or for the purpose of
performing Landlord's duties under this lease.
SURRENDER OF PREMISES
Section 5.08. On expiration or earlier termination of this lease, Tenant
shall promptly surrender and deliver the Premises to Landlord in as good
condition as they are now at the date of this lease, excluding reasonable wear
and tear, and repairs required to be made by Landlord under this lease.
ARTICLE 6. INDEMNITY AND INSURANCE
HOLD-HARMLESS CLAUSE
Section 6.01. Tenant agrees to protect, indemnify, and save Landlord
harmless from and against any all liability to third parties resulting from
Tenant's occupation and use of the Premises, specifically including, without
limitation, any claim, liability, loss, or damage arising by reason of:
(a) The death or injury of any person or persons, including Tenant or any
person who is an employee or agent of Tenant, or by reason of the damage to or
destruction of any property, including property owned by Tenant or any person
who is an employee or agent of Tenant, and caused or allegedly caused by either
the condition of the Premises, or some act or omission of Tenant or of some
agent, contractor, employee, servant, subtenant, or concessionaire of Tenant on
the Premises;
(b) Any work performed on the Premises or materials furnished to the Premises
at the instance or request of Tenant or any agent or employee of Tenant; and
(c) Tenant's failure to perform any provision of this lease or to comply with
any requirement of law or any requirement imposed on Landlord or the leased
premises by any duly authorized governmental agency or political subdivision.
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PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE
Section 6.02. Tenant shall, at its own cost and expense, procure and
maintain during the entire term of this lease public liability insurance and
property damage insurance issued by an insurance company reasonably satisfactory
to Landlord and insuring Landlord against loss or liability caused by or
connected with Tenant's occupation and use of the Premises under this lease in
amounts not less than:
(a) $300,000.00 for injury to or death of one person and, subject to that
limitation for the injury or death of one person,, of not less than
$1,000,000.00 for injury to or death of two or more persons as a result of any
one accident or incident; and
(b) $100,000.00 for damage to or destruction of any property of others.
The insurance required under this section shall be issued by a responsible
insurance company or companies authorized to do business in California and shall
be in a form reasonably satisfactory to Landlord. Tenant shall within thirty
(30) days of the date of this lease, deposit with Landlord a certificate showing
that insurance to be in full force and effect.
TENANT'S PERSONAL PROPERTY
Section 6.03. Tenant shall, during the full term of this lease and any
renewals or extensions thereof, maintain at Tenant's own cost and expense an
insurance policy issued by a reputable company authorized to conduct insurance
business in California insuring for their full insurable value all fixtures and
equipment and, to the extent possible, all merchandise that is, at any time
during the term of this lease, in or on the Premises against damage or
destruction by fire, theft, or the elements.
FIRE AND EXTENDED COVERAGE INSURANCE
Section 6.04. Tenant shall, during the term of this lease, procure, carry,
and pay for fire and extended coverage insurance, insuring the Building and
other Improvements on the Premises for at least one hundred percent (100%) of
their full replacement value. The policy shall name Landlord as an additional
insured and shall be issued by a responsible insurance company authorized to do
business in California. The term "extended coverage" as used herein shall mean
any casualties that are commonly included under the term "extended coverage" AS
that term is known and used in the casualty insurance business.
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CANCELLATION REQUIREMENTS
Section 6.05. Each of the insurance policies shall be in a form reasonably
satisfactory to Landlord and shall carry an endorsement that, before changing or
canceling any policy, the issuing insurance company shall give Landlord at least
30 days' prior written notice. Duplicate originals or certificates of all such
insurance policies shall be delivered to Landlord.
ARTICLE 7. SIGNS AND TRADE FIXTURES
INSTALLATION AND REMOVAL OF TRADE FIXTURES
Section 7.01. Tenant shall have the right at any time and from time to time
during the term of this lease, at Tenant's sole cost and expense, to install and
affix in, to, or on the Premises any items, herein called "trade fixtures," for
use in Tenant's trade or business that Tenant may, in Tenant's sole discretion,
deem advisable. Any and all trade fixtures that can be removed without
structural damage to the Premises or any building or improvements on the
Premises shall, subject to Section 7.02 of this lease, remain the property of
the Tenant and may be removed by Tenant at any time before the expiration or
earlier termination of this lease, provided Tenant repairs any damage caused by
the removal.
UNREMOVED TRADE FIXTURES
Section 7.02. Any trade fixtures described in this Article that are not
removed from the Premises by Tenant within thirty (30) days after the expiration
or earlier termination regardless of cause, of this lease shall be deemed
abandoned by Tenant and shall automatically become the property of Landlord as
owner of the real property to which they are affixed.
SIGNS
Section 7.03. Tenant may erect, maintain, permit, and from time to time remove
any signs in or about the Premises that Tenant may deem necessary or desirable,
provided that any signs erected or maintained by Tenant shall comply with all
requirements of any governmental authority with jurisdiction.
ARTICLE 8. DESTRUCTION OF PREMISES
LANDLORD'S OBLIGATION TO REPAIR
Section 8.01. Except as otherwise provided in Section 8.02 below, if at any
time during the original Term of this lease or any Extended Term, the Building
on the Premises is damaged or destroyed by any cause, Landlord shall promptly
repair, rebuild, or restore the Building to substantially the same condition as
the Building was delivered to Tenant at the commencement of this lease (i.e.,
exclusive of tenant fixtures and equipment) and shall be entitled for that
purpose to
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any and all insurance proceeds. Landlord shall commence repair, restoration, or
rebuilding, as appropriate, not later than sixty (60) days after occurrence of
the event causing damage or destruction and shall cause construction to be
completed not later than one hundred eighty (180) days after the occurrence of
the event causing damage or destruction. In the event Landlord does not
commence or complete construction within the time periods described in this
section, Tenant shall have the right to terminate this lease by giving Landlord
written notice within ten (10) days after expiration of either time period.
LANDLORD'S RIGHT TO TERMINATE LEASE
Section 8.02. Notwithstanding Section 8.01, Landlord shall have the right
to terminate this lease and shall have no obligation to repair, restore, or
rebuild the Premises or the Building under any of the following circumstances:
(a) Damage or destruction from an insured casualty when the damage or
destruction cannot reasonably be repaired, restored, or rebuilt within a period
of one hundred eighty (180) days;
(b) Damage or destruction from an uninsured casualty when the cost of
repair, restoration, or rebuilding exceeds a total of forty-five percent (45%)
of the then replacement cost of the Building;
(c) Damage or destruction from an insured or uninsured casualty occurring
during the last year of the Original Term of this lease, if Tenant has not
before occurrence of the casualty elected to extend the Original Term of the
lease, or occurring at any time during the Extended Term, if any, of this lease.
If Landlord elects to terminate this lease under any of the above
circumstances, Landlord shall give written notice to Tenant not later than
thirty (30) days after occurrence of the casualty.
ABATEMENT OF RENT
Section 8.03. If damage or destruction to the Premises reasonably affects
the ability of Tenant to operate its business as a bank, and Tenant in fact
ceases to operate its business, the rent required under this lease shall abate
during the period in which Landlord is required to perform repairs or
restoration, or to rebuild. Tenant shall also be excused from the payment of
taxes and insurance attributable to that repair, restoration, or rebuilding
period. In the event Tenant is able to continue partial operation of its
business, Tenant shall continue to pay the monthly rent provided for under this
lease.
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ARTICLE 9. CONDEMNATION
TOTAL CONDEMNATION
Section 9.01. If, at any time during the term of this lease, title and
possession of all of the Premises is taken under the power of eminent domain by
any public or quasi-public agency or entity, this lease shall terminate as of
12:01 A.M. of the date actual physical possession of the Premises is taken by
the agency or entity exercising the power of eminent domain, and both Landlord
and Tenant shall thereafter be released from all obligations under this lease,
except those described in Section 9.04.
TERMINATION OPTION FOR PARTIAL CONDEMNATION
Section 9.02. If at any time during the term of this lease, title and
possession of only a portion of the Premises is taken under the power of eminent
domain by any public or quasi-public agency or entity, Tenant may, at Tenant's
option, terminate this lease if more than thirty-five percent (35%) of the floor
space of the Building or more than twenty percent (20%) of the parking area of
the Premises is taken under the power of eminent domain, or where any taking
under the power of eminent domain reasonably affects the ability of Tenant to
operate its business as a bank. If Tenant elects to exercise the option granted
under this section, Tenant shall give Landlord at least thirty (30) days prior
written notice within fourteen (14) days after Tenant receives notice of the
taking that designates the precise area of the Premises to be taken. This lease
shall terminate as of the date specified for termination in Tenant's notice, or
on the date actual physical possession of the Premises is taken by the public or
quasi-public agency or entity, whichever date is earlier.
PARTIAL CONDEMNATION WITHOUT TERMINATION
Section 9.03. If Tenant fails to exercise the option described in Section
9.02 of this lease or if the portion of the Premises taken under the power of
eminent domain is insufficient to give rise to the option described in Section
9.02 of this lease:
(a) This lease shall terminate as to the portion of the Premises taken by
eminent domain as of 12:01 A.M. of the day actual physical possession of that
portion of the Premises is taken by the agency or entity exercising the power of
eminent domain (the "date of taking,,);
(b) The Rent specified in Section 2.01 of this lease shall, after the date
of taking, be reduced by an amount that bears the same ratio to the rent
specified in Section 2.01 of this lease AS the square footage ground area of the
portion of the Premises taken under the power of eminent domain bears to the
total square footage ground area of the Premises as of the date of this lease;
and
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(c) Landlord, at Landlord's own cost and expense, shall remodel and
reconstruct the Building remaining on the portion of the Premises not taken by
eminent domain into a single efficient architectural unit as soon after the date
of taking, or before, as can be reasonably done; provided, however, that Rent
specified in this lease shall not be abated or reduced, except as provided in
subparagraph (b) of this section, during remodeling and reconstruction.
ARTICLE 10. DEFAULT, ASSIGNMENT, AND TERMINATION
RESTRICTION AGAINST SUBLETTING OR ASSIGNMENT
Section 10.01. Tenant shall not encumber, assign, or otherwise transfer
this lease, any right or interest in this lease, or any right or interest in the
Premises or any of the Improvements that may now or hereafter be constructed or
installed on the Premises without first obtaining the express written consent of
Landlord, which consent shall not unreasonably be withheld. Tenant shall not
sublet the Premises or any part of the Premises or allow any other person, other
than Tenant's agents, servants, and employees, to occupy the Premises or any
part of the Premises without the prior written consent of Landlord. A consent
by Landlord to one assignment, one subletting, or one occupation of the Premises
by another person shall not be deemed to be a consent to any subsequent
assignment, subletting, or occupation of the Premises by another person. Any
encumbrance, assignment, transfer, or subletting without the prior written
consent of Landlord, whether voluntary or involuntary, by operation of law or
otherwise, is void and shall, at the option of Landlord, terminate this lease.
The consent of Landlord to any assignment of Tenant's interest in this lease or
the subletting by Tenant of the Premises or parts of the Premises shall not be
unreasonably withheld.
DEFAULT DEFINED
Section 10.02. The occurrence of any of the following shall constitute a
material default and breach of this lease by Tenant:
(a) Any failure by Tenant to pay the rent or to make any other payment
required to be made by Tenant under this lease (when that failure continues for
ten (10) days after written notice of the failure is given by Landlord to
Tenant).
(b) The abandonment or vacation of the Premises by Tenant (the absence of
Tenant from or the failure by Tenant to conduct business on the Premises for a
period in excess of fourteen (14) consecutive days shall constitute an
abandonment or vacation for purposes of this lease, unless Tenant notifies
Landlord in advance in writing of such absence or failure to conduct business).
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(c) A failure by Tenant to observe and perform any other provision of
this lease to be observed or performed by Tenant, when that failure continues
for thirty (30) days after written notice of Tenant's failure is given by
Landlord to Tenant; provided, however, that if the nature of that default is
such that it cannot reasonably be cured within 30-day period, Tenant shall not
be deemed to be in default if Tenant commences that cure within the 30-day
period and thereafter diligently prosecutes it to completion.
(d) 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 of a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
it is dismissed within 60 days); the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this lease, when possession is not restored to Tenant
within 30 days; or the attachment, execution, or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this lease, when that seizure is not discharged within 30 days.
TERMINATION OF LEASE AND RECOVERY OF DAMAGES
Section 10.03. In the event of any default by Tenant under this lease, in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the right to terminate this lease and all rights of Tenant
hereunder by giving written notice of the termination. No act of Landlord shall
be construed as terminating this lease except written notice given by Landlord
to Tenant advising Tenant that Landlord elects to terminate the lease. In the
event Landlord elects to terminate this lease, Landlord may recover from Tenant:
(a) The worth at the time of award of any unpaid rent that had been earned
at the time of termination of the lease;
(b) The worth at the time of award of the amount by which the unpaid rent
that would have been earned after termination of the lease until the time of
award exceeds the amount of rental loss that Tenant proves could have been
reasonably avoided;
(c) The worth at the time of award of the amount by which the unpaid rent
for the balance of the term of this lease after the time of award exceeds the
amount of rental loss that Tenant proves could be reasonably avoided; and
(d) Any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform its obligations under this
lease.
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The term "rent" as used in this section shall mean the Rent and all other
sums required to be paid by Tenant pursuant to the terms of this lease. As used
in subsections (a) and (b) above, the "worth at the time of award" is computed
by allowing interest at the rate of 10 percent per year. As used in subsection
(c), the "worth at the time of award" is computed by discounting that amount at
the discount rate of the Federal Reserve Bank of San Francisco at the time of
award plus 1 percent.
LANDLORD'S RIGHT TO CONTINUE LEASE IN EFFECT
Section 10.04.(a) If Tenant breaches this lease and abandons the Premises
before the natural expiration of the term of this lease, Landlord may continue
this lease in effect by not terminating Tenant's right to possession of the
Premises, in which event Landlord shall be entitled to enforce all its rights
and remedies under this lease, including the right to recover the rent specified
in this lease as it becomes due under this lease. For as long as Landlord does
not terminate this lease, Tenant shall have the right to assign or sublease the
Premises with the Landlord's prior written consent. Landlord shall not
unreasonably withhold consent.
(b) No act of Landlord, including but not limited to Landlord's entry on
the Premises, efforts to relet the Premises, or maintenance of the Premises,
shall be construed as an election to terminate this lease unless a written
notice of that intention is given to Tenant or unless the termination of this
lease is decreed by a court of competent jurisdiction.
LANDLORD'S RIGHT TO RELET
Section 10.05. In the event Tenant breaches this lease, Landlord may enter
on and relet the Premises or any part of the Premises to a third party or third
parties for any term, at any rental, and on any other terms and conditions that
Landlord in its sole discretion may deem advisable, and shall have the right to
make alterations and repairs to the Premises. Tenant shall be liable for all of
Landlord's costs in reletting, including but not limited to remodeling costs
required for the reletting. In the event Landlord relets the premises, Tenant
shall pay all rent due under and at the times specified in this lease, less any
amount or amounts actually received by Landlord from the reletting.
LANDLORD'S RIGHT TO CURE TENANT DEFAULTS
Section 10.06. If Tenant breaches or fails to perform any of the covenants or
provisions of this lease, Landlord may, but shall not be required to, cure
Tenant's breach. Any sum expended by Landlord, with interest at the rate of ten
percent (10%) per annum, shall be reimbursed by Tenant to Landlord with the next
due rent payment under this lease.
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CUMULATIVE REMEDIES
Section 10.07. The remedies granted to Landlord in this Article shall not
be exclusive but shall be cumulative and in addition to all remedies now or
hereafter allowed by law or provided in this lease.
WAIVER OF BREACH
Section 10-08. The waiver by Landlord of any breach by Tenant of any of
the provisions of this lease shall not constitute a continuing waiver or a
waiver of any subsequent breach by Tenant either of the same or another
provision of this lease.
ARTICLE 11. MISCELLANEOUS
FORCE MAJEURE-UNAVOIDABLE DELAYS
Section 11.01. If the performance of any act required by this lease to be
performed by either Landlord or Tenant is prevented or delayed by reason of an
act of God, strike, lockout, labor troubles, inability to secure materials,
restrictive governmental laws or regulations, or any other cause except
financial inability that is not the fault of the party required to perform the
act, the time for performance of the act will be extended for a period
equivalent to the period of delay, and performance of the act during the period
of delay will be excused. However, nothing contained in this section shall
excuse the prompt payment of rent by Tenant as required by this lease or the
performance of any act rendered difficult solely because of the financial
condition of the party required to perform the act.
ATTORNEYS' FEES
Section 11-02. If any litigation is commenced between the parties to this
lease concerning the Premises, this lease, or the rights and duties of either in
relation to the Premises or to this lease, the party prevailing in that
litigation shall be entitled to, in addition to any other relief that may be
granted in the litigation, a reasonable sum as and for its attorneys' fees in
that litigation that are determined by the court in that litigation or in a
separate action brought for that purpose.
NOTICES
Section 11.03. Except as otherwise expressly provided by law, any and all
notices or other communications required or permitted by this lease or by law to
be served on or given to either
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party to this lease by the other -.arty to this lease shall be in writing and
shall be deemed duly served and given when personally delivered to the party to
whom they are directed, or in lieu of personal service, when deposited in the
United States mail, first-class postage prepaid, addressed to Tenant in care of
the President or the Chief Financial Officer of Tenant at P.O. Box 16279,
Fresno, California 93755-6279, or to Landlord at 413 Mainberry, Madera,
California 93637,. Either party, Tenant or Landlord, may change its address for
the purpose of this section by giving written notice of that change to the other
party in the manner provided in this section.
BINDING ON HEIRS AND SUCCESSORS
Section 11.04. This lease shall be binding on and shall inure to the
benefit of the heirs, executors, administrators, successors, and assigns of
Landlord and Tenant, but nothing in this section shall be construed as a consent
by Landlord to any assignment of this lease or any interest therein by Tenant
except as provided in Section 10.01 of this lease.
PARTIAL INVALIDITY
Section 11.05. If any provision of this lease is held by a court of
competent jurisdiction to be either invalid, void, or unenforceable, the
remaining provisions of this lease shall remain in full force and effect
unimpaired by the holding.
SOLE AND ONLY AGREEMENT
Section 11.06. This instrument constitutes the sole and only agreement
between Landlord and Tenant respecting the Premises, the leasing of the Premises
to Tenant, or the lease term created under this lease, and correctly sets forth
the obligations of Landlord and Tenant to each other as of its date. Any
agreements or representations respecting the Premises or their leasing by
Landlord to Tenant not expressly set forth in this instrument are null and void.
TIME OF ESSENCE
Section 11.07. Time is expressly declared to be of the essence in this
lease.
Executed on May 13, 1996, at Madera, California.
LANDLORD - TENANT -
STEPHEN L. FRAZIER AND REGENCY BANK
SALLY L. FRAZIER TRUST
By: STEPHEN L. FRAZIER By: STEVEN CANFIELD
Trustee Senior Vice President/CEO
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