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EXHIBIT 10.7
GROUND LEASE
STATE OF ARKANSAS )
) KNOW ALL MEN
BY THESE PRESENTS:
COUNTY OF PULASKI )
This
Lease (hereinafter referred to as "Lease" or "Agreement") made
and
entered into on this 1st day of February, 2001, by and between
CONSERVATIVE
DEVELOPMENT COMPANY d/b/a LAKEWOOD VILLAGE SHOPPING PARK, an
Arkansas
corporation (hereinafter called "Landlord"), and TWIN CITY BANK, an
Arkansas
chartered banking corporation, (hereinafter called "Tenant"), which
provides as
follows:
SECTION 1. GRANT OF LEASE AND TERM
1.1
Landlord does hereby lease and demise unto Tenant that certain
real
property in the City of North Little Rock, Pulaski County,
Arkansas, being a
part of the LAKEWOOD VILLAGE SHOPPING CENTER, hereinafter referred
to as the
"Shopping Center", as shown in Exhibit "A" attached hereto with the
property
being leased identified as the cross-hatched area in Exhibit "A"
attached hereto
(hereinafter referred to as the "leased premises" or "premises")
and containing
approximately 44,140 square feet, such description being subject to
amendment as
set forth in Paragraph 5.3 hereof. This Lease shall be for a term
of ten (10)
years (the "Initial Term") to begin on the "Commencement Date" as
defined in
Section 5.8 hereof.
SECTION 2. OPTIONS TO EXTEND
2.1
Landlord hereby grants to tenant two (2) separate but
consecutive
rights and option to extend this Lease for separate extension
periods of ten
(10) years each immediately following the expiration of the Initial
Term of this
Lease.
2.2
In order to exercise its option for the first extension period,
Tenant
shall (i) not then be in default under this Lease and (ii) shall
give written
notice to Landlord of its exercising of its option for the
extension period not
later than one hundred eighty (180) days prior to the expiration of
the Initial
Term of this Lease.
2.3 In order to
exercise its option for the second extension period, Tenant
shall (i) not then be in default under this Lease; (ii) have
exercised its first
option hereof; and (iii) shall give written notice to Landlord of
its exercising
of
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its option for the second extension period not later than ninety
(90) days prior
to the expiration of the first extension period of this Lease.
2.4
The extension periods shall be subject to and governed by the
same
identical terms, covenants and conditions of the Initial Term of
this Lease
except in respect to the termination date and for the rentals which
are set
forth in Section 3 hereof.
If
Tenant remains in possession of the premises after expiration of
any
lease term without executing a new lease or exercising its option
to extend,
such holding over shall be construed as a tenancy from
month-to-month, subject
to all covenants and conditions of this Lease. Upon such holding
over, Tenant
must vacate the premises within thirty (30) days after receiving
written notice
from Landlord to vacate.
SECTION 3. RENT
3.1
The Minimum Rent (herein so called) for this Lease during the
Initial
Term and extension periods shall be payable in monthly
installments, with each
installment payable in advance on or before the first day of each
calendar month
during the Initial Term and each extension period. The amount of
Minimum Rent to
be paid by Tenant to Landlord shall be pursuant to the
following:
(a) for the Initial
Term, monthly rental shall be FIVE THOUSAND AND
NO/100'S DOLLARS ($5,000.00);
(b) for the first ten
(10) year option extension term (provided
Tenant timely exercises its option as provided above), the
monthly
rental shall be SIX THOUSAND TWO HUNDRED FIFTY AND
NO/100'S DOLLARS ($6,250.00);
(c) for the second ten
(10) year option extension term (provided
Tenant timely exercises its option as provided above), the
monthly rental shall be SEVEN THOUSAND EIGHT HUNDRED TWELVE AND
50/100'S DOLLARS $(7,812.50).
3.2
Each installment of rent shall be in lawful money of the United
States
of America, shall be paid without any deduction, offset or
abatement, and shall
be payable to Landlord at the address below:
Conservative Development Company
2851 Lakewood Village Drive
North Little Rock, AR 72116
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or at such other place as the Landlord may from time to time
designate in
writing.
3.3
If the Commencement Date as defined herein is not on the first day
of a
calendar month, the Minimum Rent for the period between the
Commencement Date
and first day of the next succeeding calendar month shall be
apportioned at the
monthly rental set forth above, and the amount so apportioned shall
be payable
on the Commencement Date. Likewise, the Minimum Rent for the period
between the
first day of the last calendar month during the term and ending
date of the
Lease shall be apportioned at the then current monthly Minimum
Rent.
3.4
For purposes hereof, the term "rent" or "rental" shall mean
collectively the Minimum Rent and all other sums required to be
paid by Tenant
hereunder.
SECTION 4. FORCE MAJEURE
4.1
Whenever a period of time is herein prescribed for action to be
taken
by Landlord or Tenant, such party shall not be liable or
responsible for, and
therefore shall be excluded from the computation of any such period
of time, any
delays due to strikes, riots, acts of God, shortages of labor or
materials, war,
governmental laws, regulations or restrictions or any other causes
of any kind
whatsoever which are beyond the reasonable control of the
respective party,
provided, however, the Landlord's or Tenant's liability of
responsibility shall
only be excused for the number of days resulting from such
delay.
Notwithstanding the foregoing, in no event shall this Section 4
excuse or delay
Tenant's obligation to timely pay any rentals required
hereunder.
SECTION 5. IMPROVEMENTS
5.1
Following the waiver of all Tenant's rights to terminate this
Lease,
the Tenant agrees to construct on the leased premises a Bank
Building with drive
through teller service facilities (the "Approved Business") in
accordance with
the prototype plans and specifications (the "Plans") forwarded to
Landlord and
incorporated by reference. The Approved Business will be
constructed pursuant to
the construction contract entered into by Tenant with a reputable
and bondable
general construction contractor ("Contractor"); provided, however,
if the
Contractor shall use union employees on the job it will be subject
to the
approval of Landlord. Tenant covenants and agrees to pursue
construction of the
Approved Business to its completion with all reasonable diligence
subject to
extension for any event of Force Majeure as provided in Section 4
hereof. The
Approved Business
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shall be constructed in a good and workmanlike manner in compliance
with all
applicable permits, authorizations, building codes, and all other
applicable
laws, ordinances, rules and regulations of any governmental
authorities having
jurisdiction. The Approved Business shall be the building described
in the Plans
and no material alterations of the height and architectural design
of the
Approved Business or signage shall be made without the prior
written consent of
Landlord which consent shall not be unreasonably withheld or
delayed. Tenant
shall have no right, authority, or power to bind Landlord, or any
interest of
Landlord in the leased premises, for any claim for labor or
material or for any
other charge or expense incurred in the construction of the
Approved Business or
any change, alteration, or addition thereto, or any replacement or
substitution
therefor, nor to render the Landlord's interest in the leased
premises liable to
any lien or right of lien for any labor or material and Tenant
shall in no
manner be considered as the agent of Landlord in the construction,
erection, or
operation of the Approved Business or any replacement or
substitution therefor.
If any involuntary liens for labor and materials supplied or
claimed to have
been supplied to the leased premises shall be filed, Tenant shall
promptly pay
or bond such liens to Landlord's reasonable satisfaction or
otherwise obtain the
release or discharge thereof and Tenant shall indemnify and hold
Landlord
harmless from the payment thereof.
5.2
Landlord, including its agents, employees and architects, if any,
shall
not be liable to Tenant or any other party for any loss, claim, or
demand
asserted on account of Landlord's exercise of its rights and duties
hereunder,
or any failure or defect in such exercise. No approval of designs,
site plans,
plans, specifications, or other matters shall ever be construed as
representing
or implying that such designs, site plans, plans, specifications,
or other
matters will, if followed, result in a properly designed Approved
Business or
other improvements constructed in addition to or as substitute or
replacement
for the Approved Business. Such approval shall in no event be
construed as
representing or guaranteeing that any improvements will be built in
a
workmanlike manner, nor shall such approvals relieve Tenant of its
obligation to
construct the Approved Business in a workmanlike manner as provided
in Section
5.1 above. Tenant will hold Landlord harmless and will indemnify
Landlord from
and against any suits, actions, or causes of action for injuries to
persons or
property for design or construction failures arising out of
Landlord's approval
of any designs, site plans, plans, specifications or other
matters.
5.3
Title to all improvements and all equipment, fixtures and
machinery
therein contained and all furniture and furnishings of Tenant
therein erected,
constructed, installed or placed shall be and remain in Tenant
during the term
of this Lease. Upon the
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expiration or termination of this Lease, title to all improvements
and permanent
fixtures then owned by Tenant situated on the leased premises
shall
automatically vest in Landlord and Tenant shall have no claim
thereto. Provided
however, Landlord may give Tenant written notice of Landlord's
disclaimer of
said improvements within thirty (30) days of the expiration of
termination of
this Lease in which event Tenant shall have sixty (60) days from
said expiration
or termination in which to remove all such improvements and
fixtures from the
leased premises and restore same to even ground level. Upon
expiration or
termination of this Lease, Tenant shall promptly remove all items
of personal
property, machinery and equipment from the leased premises to the
extent such
removal does not cause damage to the Approved Business, Tenant, at
its sole cost
and expense, shall promptly repair any damage caused by such
removal. If Tenant
fails to remove such items of personal property within thirty (30)
days
following the expiration or termination of this Lease, title to
such items of
personal property shall vest in Landlord and Tenant shall have no
further claim
thereto.
5.4
Tenant shall have the right, from time to time, to make
additions,
alterations and changes in or to the Approved Business, provided
Tenant is not
then in default of the Lease and Tenant fully complies with all of
the following
provisions:
(a)
No structural
alterations of the Approved Business or signage shall be
commenced except after receipt of Landlord's written approval
thereof,
which shall not
be unreasonably withheld or delayed;
(b)
Without the consent of
Landlord (not to be unreasonably withheld or
delayed), no alterations of any kind shall be made which would
(i)
impair the structural soundness of the Approved Business, (ii)
decrease the gross area of the building, except as may be required
by
governmental regulations, or (iii) modify the function as an
operation
of the Approved Business;
(c)
No alterations shall
be undertaken until Tenant shall have procured
and paid for all required permits and authorizations of all
governmental authorities having jurisdiction; provided, however,
if
the general contractor performing such work shall use union
employees
on the job, then the general contractor shall be subject to the
approval of Landlord;
(d)
No alterations in
excess of $25,000 shall be made except in
substantial accordance with detailed plans and specifications
prepared
by Tenant and approved in writing by Landlord which consent shall
not
be unreasonably withheld or delayed;
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(e)
Any alterations shall
be made within a reasonable time (delay by force
majeure as provided in Section 4 excepted) in a good and
workmanlike
manner, and in compliance with all applicable permits,
authorizations,
building codes, and all other applicable laws, ordinances, rules
and
regulations of any governmental authority having jurisdiction;
(f)
If any involuntary
liens for labor and materials supplied or claimed
to have been supplied to the premises shall be filed, Tenant
shall
promptly pay or bond such liens to Landlord's reasonable
satisfaction
or otherwise obtain the release and discharge thereof within
thirty
(30) days from the filing of same;
(g)
As to those portions
requiring Landlord's approval, Tenant shall
obtain and maintain in existence such insurance as Landlord may
reasonably require with regard to the alterations; and
5.5
Tenant acknowledges and agrees that utility lines including
water,
sewer, gas and electric and phone service have been provided to a
boundary line
of the leased premises. Landlord makes no warranty express or
implied as to the
adequacy or suitability of said utility lines for use by Tenant in
the operation
of Tenant's business. In the event Tenant determines that said
utility lines are
not adequate or suitable for use in the operation of Tenant's
business, Tenant
at its sole cost and expense and with Landlord's prior consent
shall pay for any
and all improvements or upgrades to such lines. In no event shall
any work to
improve or upgrade such lines unreasonably interrupt or interfere
with any other
tenants' operations in the Shopping Center.
5.6
The improvements referred to in Paragraph 5.1 above shall not be
deemed
to include any machinery, equipment, trade fixtures, sign faces and
cabinets,
furniture, furnishings, decorations, restaurant equipment,
shelving, showcases,
mirrors, pictures, art objects, antique items, decorative light
fixtures,
mantles, and stained glass windows, cameras, VCRs, infrared alarms,
ATM machine.
ATM facility, teller pedistals, undercounter storage units, vaults,
alarm boxes,
safe deposit drawers, night deposit drawers or other similar items
of personalty
which may be installed, located or placed in the building by Tenant
(whether
"attached" to the building or not), and such items may be removed
by Tenant from
time to time in Tenant's sole discretion during
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this Lease and for a period of thirty (30) days after termination
of this
Lease, provided however. Tenant shall repair all damages to the
premises
resulting from or caused by the removal of such items and any such
repairs shall
insure that the premises is left in a weather tight condition.
Tenant may
finance or refinance all or any part of its machinery, equipment,
trade
fixtures, signs, and other items listed above and in connection
therewith may
grant security interests in and liens upon such items, provided
that Tenant
shall not grant or place any liens upon the realty comprising the
leased
premises or Landlord's interests therein. Landlord hereby expressly
waives any
liens, constitutional, statutory or otherwise, which Landlord may
have with
respect to any such items, and Landlord will execute and deliver or
cause to be
executed and delivered such evidence of this waiver of lien as
Tenant's
equipment lender or lessor may request from time to time.
5.7
The parties hereto agree that this Lease is entirely contingent
upon
the leased premises being suitable for the Approved Business Tenant
intends to
construct upon the leased premises. Consequently, notwithstanding
anything to
the contrary herein set forth, this Lease shall be null and void
and neither
party shall be under any obligation or liability one to the other
in the event
the Tenant in its reasonable business judgment determines that for
economic
reasons the premises are not suitable for its Approved Business
and/or that it
cannot obtain all permits necessary to construct and operate its
intended
Approved Business, such permits and approvals specifically
including, but not
limited to, sign permits, access points, and building construction
permits.
Tenant shall submit for its building permit within forty-five (45)
days after
execution of this Lease.
Tenant shall have ninety (90) days from the date of the mutual
execution of
this Agreement in order to make the inspections deemed necessary by
Tenant and
to give written notice to Landlord that it has determined that the
premises are
not suitable for its Approved Business and/or that the necessary
permits are not
obtainable and in such event this Lease shall terminate and neither
party shall
have any liability to the other. Tenant's failure to give written
notice within
such ninety (90) days shall be deemed a waiver of this condition
precedent and
all other inspections and contingencies with regard to the leased
premises
pursuant to Paragraph 5.8. As a part of Tenant's inspection, Tenant
and its
consultants shall be permitted to come upon the leased premises to
perform soil
tests, inspections, and other studies, to be used by Tenant in
determining
feasibility of construction and to determine the environmental
conditions of the
premises and existing improvements. Tenant shall restore the
premises to its
condition prior to any such tests, and shall indemnify and hold
Landlord
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harmless from any liabilities, costs and expenses arising from
Tenant's
inspections, including, without limitation, liens that may arise as
a result
thereof.
5.8
If this Lease is not terminated as provided in Paragraph 5.7
above,
Tenant shall enter the premises and commence the construction of
its
improvements, and the rental hereunder shall commence upon the
earlier of:
(a) the date Tenant
first opens for business to the public in the
permanent bank building on the premises; or
(b) Three hundred
sixty-five (365) days from May 1, 2000, the date
Tenant took possession of the premises.
The
date which is applicable for the payment of rental pursuant to
the
foregoing shall be the "Commencement Date".
5.9
Tenant and persons, firms or corporations involved in the erection
of
the Approved Business contemplated herein and Tenant's subtenants,
employees,
agents, servants, patrons, and suppliers may enter upon and work in
and on the
leased premises during the period prior to the Commencement Date,
and all
covenants and conditions of this Lease shall be applicable except
those
pertaining to rental and taxes; no rental or other monetary
payments being
reserved or charged for such period prior to the Commencement Date.
Tenant shall
hold Landlord harmless from any lien or claims for liens as a
result of Tenant's
actions during such period prior to the Commencement Date.
SECTION 6. STATE OF THE TITLE, ZONING AND RESTRICTIONS
Landlord hereby warrants and represents to Tenant as follows:
6.1
Landlord is owner of the leased premises and authorized to execute
this
Lease and that the leased premises are zoned by the appropriate
governmental
agency to permit the construction and operation of the Approved
Business.
6.2
No person other than Landlord has the right to lease the leased
premises.
6.3
Landlord agrees that it has not and will not hereafter enter into
or
consent to any restrictive covenant or similar agreement
substantially or
materially affecting Tenant's use of the leased premises.
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SECTION 7. USE BY TENANT
7.1
The leased premises shall be used for the operation of a Twin City
Bank
branch banking facility. Tenant shall not commit waste on the
leased premises,
shall not maintain, commit or permit the maintenance or commission
of any
nuisance on the leased premises, or use the premises for illegal
purposes.
Tenant shall conform to all applicable laws and ordinances
respecting the use
and occupancy of the leased premises. Neither Tenant nor any party
operating in
the premises by or through Tenant shall use or operate in the
premises or permit
any other party to use or operate in the premises in any manner
which shall
violate any exclusive right granted by Landlord to any other tenant
in the
Shopping Center or which shall materially and unreasonably
interfere with any
other tenant's business operations in the Shopping Center.
7.2
Tenant shall maintain its windows in a neat and clean condition,
shall
keep sidewalks on the premises clean and free from rubbish, and
shall arrange
for the regular pick up of trash and garbage if such service is not
provided by
the City or County in which the leased premises are located. Tenant
shall not
permit rubbish, refuse or garbage to accumulate or any fire or
health hazard to
exist about the premises, so long as this Lease is in effect and
during any
extension thereof. Trash and garbage dumpsters shall be screened
from view.
7.3
During the Initial Term of this Lease and any option extension
term
thereafter, Tenant shall in good faith continuously conduct and
carry out in the
entire leased premises the type of business described in Section
7.2 above
except for periods resulting from fire or other casualty, or
reasonable periods
for repairs and alterations, all such repairs and alterations to be
diligently
pursued to completion. If Tenant discontinues the operation of its
business or
vacates the leased premises for any continuous two (2) month period
(other than
as a result of fire or other casualty, for substantial restoration
or
alteration, such restoration, alterations or repairs to be
diligently pursued to
completion), Landlord may terminate this Lease and repossess the
leased
premises. Upon repossession, this Lease will terminate and neither
party shall
have any further obligation to the other except for the
following:
Tenant shall forfeit all of Tenant's permanent improvements to
the
leased premises, but may remove its furniture, fixtures, equipment
and all
signs provided that any resulting damage therefrom shall be
promptly
repaired by Tenant.
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SECTION 8.
MAINTENANCE, REPAIRS AND UTILITIES AND COMMON AREA MAINTENANCE
8.1
Tenant shall keep and maintain at its sole cost and expense the
interior and exterior of all improvements placed on the leased
premises
including without limitation all structural maintenance, all
nonstructural,
exterior and interior maintenance, all mechanical, electrical,
plumbing,
sprinkler, HVAC system, landscaping, parking areas and parking area
lighting, in
good repair subject to normal wear and tear. Tenant shall have the
duty to
maintain, sweep, paint and stripe, patch and repair the paving of
all parking
areas on the leased premises.
8.2
Tenant shall, at its own cost and expense, pay directly all
charges
when due for water, gas, electricity, heat, sewer rentals or
charges and any
other utility charges incurred by Tenant in the construction and
the use of the
premises. Unless caused by Landlord's negligence or misconduct,
Landlord shall
not be responsible or liable in any way whatsoever for the quality,
quantity,
impairment, interruption, stoppage or other interference with
service involving
water, heat, gas, electric current for light and power, telephone
or any other
utility service.
8.3
Landlord and its agents and other representatives shall have the
right
to enter into and upon the leased premises or any part thereof at
all reasonable
hours for the purpose of examining the same. Further, upon Tenant's
failure,
neglect or default in the payment of any charges when due for
water, gas,
electricity, heat, sewer rentals or other utility charges relating
to the
construction and/or use of the premises, Landlord shall have the
right to cause
the same to be paid and such costs and expenses with interest
thereon at the
maximum rate allowed under applicable law shall be repaid by Tenant
to Landlord
and shall constitute additional rental hereunder.
8.4
The Common Area is defined to mean that part of the Shopping
Center
intended for the common use of all lessees, including, but not
limited to,
parking areas, private streets and alleys, landscaping, curbs,
loading areas,
sidewalks, lighting facilities, drinking fountains, meeting rooms
and public
rest rooms. Landlord reserves the right to change from time to time
the
dimensions and location of the Common Area. Landlord agrees to
maintain the
Common Area in a good, clean manner as generally accepted in the
maintenance of
similar shopping centers in the area where the Shopping Center is
located. The
maintenance, repair and replacement of the Common Area shall be
within the sole
and absolute control of Landlord. Tenant agrees to pay to Landlord,
as set forth
below, for the repair, operation and maintenance of the Common Area
(including,
among other costs,
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those for lighting, painting, cleaning, policing, inspecting,
repairing and
replacing) which may be incurred by Landlord, in its discretion,
including a
reasonable allowance for Lessor's overhead costs and for
depreciation of
maintenance equipment and for costs of property, casualty and
liability
insurance. Tenant agrees to pay as Additional Rent during the
Initial Term of
this Lease and any option extension term thereof Common Area costs
which shall
be based upon $.50 per square foot of space for a building
consisting of
approximately 4,644 square feet which initially computes to
$2,322.00 per annum
payable in the amount of $193.50 on the first day of each month for
the first
Lease Year and which shall be increased from ti
