Exhibit
10(q)
AGREEMENT OF
LEASE
THIS AGREEMENT OF LEASE is made as of
____________, 2005, by and between ___________________, a
_______________ with principal place of business at
_____________________________ (“Lessor”) and DNB FIRST,
NATIONAL ASSOCIATION (formerly known as Downingtown National Bank),
with principal place of business at 4 Brandywine Avenue,
Downingtown, PA 19335 ("Lessee").
W I T N E S S E T H :
1. Demise and Lease; Permitted
Use.
(a) Lessor, for and in consideration of the
payment of the rentals hereinafter specified, and the performance
of the terms, covenants and agreements herein contained, hereby
demises and leases unto Lessee and Lessee hereby lets from the
Lessor certain premises comprising approximately 0.9 acres of
ground, with improvements, known as Tax Map Parcel Nos. 1108004900,
1108005000 and 1108005001, situate on Brandywine Avenue, in the
Borough of Downingtown, Chester County, Commonwealth of
Pennsylvania (the “Leased Premises”). Lessee’s
use of the Leased Premises is subject to the burdens of and
entitles the Lessee to the benefits of, the Parking Easement
Agreement among Lessee, Lessor and Papermill Brandywine Company,
LLC, dated contemporaneously herewith, the form of which is
attached hereto as Exhibit A , and intended
to be filed of public record (the “Parking Easement
Agreement”).
(b) Lessee shall be authorized to use the Leased
Premises for: (i) general administrative office use; a financial
services center; loan production; customer meetings; a bank, and
all uses necessary or incidental to the foregoing (including,
without limitation, the sale of mutual funds, securities and other
financial and insurance products), maintenance of automated teller
machine(s) ("ATMs") to the extend permitted under other provisions
of this Lease, safe deposit facilities and office and office
related uses, (ii) commercial and professional office use to the
extent permitted by applicable law from time to time, and (iii)
subject to the prior written consent of the Lessor, which shall not
be unreasonably withheld, any other lawful use permitted by
applicable law from time to time at the Leased Premises
(collectively, the “Permitted Uses”). Lessee shall have
the right, in order to maintain proper security and maintenance for
the operation of its business, to have pickups or deliveries made
from or to the Leased Premises by carriers of cash, securities,
instruments, records or other materials commonly transported by
such carriers and to permit the use of such portions of the Leased
Premises as shall be reasonably required for such
purposes.
2. Term; Lessee’s Early
Termination Option; Renewal Options.
(a) Subject to Lessee’s “Early
Termination Option” as provided in subsection (c) of this
Section, this Lease shall be for a period (the “Initial
Term”) beginning on the date of this Lease ending on December
1, 2010.
(b) Lessee shall have separate options to renew
this Lease for three (3) additional, successive terms of five (5)
years each (each, a “Renewal Term”), with each Renewal
Term commencing consecutively upon the expiration of the Term as it
may have been previously extended (the Initial Term and any Renewal
Terms are sometimes herein referred to collectively as the
“Term.”) All of the terms and conditions applicable to
the Term of this Lease shall also apply during each Renewal Term,
except that during each Renewal Term, the Base Rent shall be a fair
market rental taking into account all of the terms and conditions
of this Lease, but in no event shall the Base Rent decrease below
the amount payable during the immediately prior year. Each renewal
option shall be exercisable by written notice to Lessor at least
180 days prior to the end of the then current Term, so long as
Lessee is not then in Default hereunder on the notice date or at
the commencement of the renewal term. If, within 15 days after
Lessee’s written notice of exercise of the option, Lessee and
Lessor shall not have agreed in writing on the amount and rate of
Base Rent for the ensuing Renewal Term, the parties shall, within
30 days after Lessee’s written notice, submit the dispute to
binding determination by two licensed Pennsylvania real estate
appraisers each having a minimum of ten (10) years experience in
appraising commercial real estate in Chester County, Pennsylvania,
one to be appointed by each of the parties. If the two appraisers
cannot agree on the fair market rent, they shall promptly select a
third Pennsylvania real estate appraiser having a minimum of ten
(10) years experience in appraising commercial real estate in
Chester County, Pennsylvania. The appraisers shall submit to Lessor
and Lessee, within 120 days after Lessee’s written notice
(not less than 60 days prior to the commencement of the Renewal
Term), a written determination as to the fair market rent for a
Base Rent taking into account all of the terms and conditions of
this Lease, which shall be final and binding on Lessor and Lessee.
The cost of such determination shall be shared equally between the
parties.
(c) Notwithstanding any other provision of this
Lease, Lessee shall have the option (the “Early Termination
Option”) to terminate this Lease at any time during the
Initial Term or any Renewal Term by written notice to Lessor,
whereupon this Lease shall terminate on the date specified in
Lessee’s notice, which shall be not less than one hundred
twenty (120) days after the date of the notice, and upon such
termination Lessee have no further obligations to pay rent or any
other sum or perform any obligations beyond the termination date of
this Lease (other than such as may have accrued prior to such
termination or which survive the termination hereof), and shall
vacate the Leased Premises.
3. Rent. During the initial
Term beginning on the date hereof and ending on December 1, 2010,
Lessee shall pay to Lessor as base rent (“Base Rent”)
for the Leased Premises the sum of $175,842.00 per year
(apportioned for partial Lease years), at the place designated by
Lessor in writing, in equal, consecutive monthly installments of
$14,653.50, each such installment to be due and payable in advance
on the first day of each calendar month during the Term. The Base
Rent for any Renewal Term shall be the amount set forth in Section
2(b) hereinabove, and shall be payable in accordance with the terms
and conditions set forth herein. In the event the Term shall begin
or end other than on the first day and last day, respectively, of a
calendar month, the rental for such partial month shall be adjusted
utilizing the number of days of the Term actually contained in the
calendar month during which the Term begins and ends, respectively.
All Base Rent shall be paid in advance on the first day of each
calendar month without set off or any demand therefor.
4. Utilities; Janitorial.
Lessee shall pay all telephone, communication, electric, gas,
heating, air conditioning and other utility charges in connection
with the use of the Leased Premises during the Term. Lessee shall
provide at its own expense, janitorial and cleaning services to the
Leased Premises, including, without limitation, the removal of all
trash and rubbish therefrom.
5. Expenses. Lessee shall pay
all real estate taxes and assessments with respect to the Leased
Premises, as well as all expenses for the maintenance and such
repair of the Leased Premises as Lessee is responsible for
conducting under this Lease. Without limiting the foregoing, Lessee
shall pay or reimburse Lessor for Lessor’s “Percentage
Share” of all “Parking Area Costs” for any
“Parking Area Work” (as those terms are defined in
Section 5 of the Parking Easement Agreement) that is completed
during and pertains to periods during the term of this
Lease.
6. Improvements; Fixtures and
Equipment.
(a) Lessee accepts the Leased Premises in an AS
IS condition. Lessee shall, at Lessee's expense, perform or cause
to be performed such non-structural tenant improvements as it may
determine from time to time, without Lessor’s prior approval.
Lessee shall obtain Lessor’s prior written approval for any
structural or exterior improvements that Lessee proposes to make,
which approval will not be unreasonably withheld. All improvements
shall be performed in a good and workmanlike manner and shall be
conditioned on receipt of all required permits from the
governmental authorities having jurisdiction and shall be in
accordance with the terms of such permits and in strict compliance
with all applicable laws, ordinances, regulations, building codes
and the like, as well as any approval of Lessor as required
hereunder. In the event that Lessee proposes improvements that (i)
Lessee wants the option to remove, or (ii) Lessor reasonably
determines by written notice at or prior to the time of
Lessor’s consent thereto are reasonably likely to reduce the
rental value of the Leased Premises, Lessor and Lessee shall
mutually agree on identifying such improvements in writing as
“Identified Improvements.” Upon termination of the
tenancy created hereby, Lessee shall at Lessor’s option (to
be exercised by written notice to Lessee not less than ninety (90)
days prior to the expiration or earlier termination of this Lease),
or otherwise at Lessee’s option, remove such Identified
Improvements at Lessee’s sole cost and expense and repair all
damages created thereby. Otherwise, any improvements that are not
Identified Improvements, and any Identified Improvements as to
which neither Lessor nor Lessee has exercised the option for
removal, shall be left in the Leased Premises at the expiration or
earlier termination of the Term and shall become the property of
Lessor.
(b) All trade fixtures, decorations and
equipment installed in the Leased Premises shall be installed by
Lessee at Lessee’s sole cost and expense. All such trade
fixtures, decorations and equipment shall remain the sole property
of Lessee. At the termination of the tenancy created hereby, Lessee
shall have the right to remove such items from the Leased Premises,
provided Lessee repairs any damage to the Leased Premises resulting
from such removal. Any trade fixtures, decorations and equipment
that are not removed on or prior to the expiration or earlier
termination of this Lease shall be deemed abandoned by Lessee, and
Lessor shall either keep such items, or remove them at Lessee's
sole cost and expense.
7. Repairs and
Replacements.
(a) Lessee shall, during the Term, at its cost
and expense, maintain, repair and replace (if necessary) the
non-structural portions of the improvements on the Leased Premises,
the heating, ventilation and air-conditioning system and the
sanitary, electrical, and other systems for all portions of the
Leased Premises in at least as good condition as at the time of
commencement of this Lease. The foregoing shall include without
limitation painting, interior and exterior repairs, building
maintenance and other service contracts. However, (i) Lessee shall
not be obligated to make any structural repairs or to construct or
replace any improvements, and (ii) Lessee agrees to make routine
roof repairs, but shall not be obligated to replace the roof or
parts thereof.
(b) Lessee shall make all repairs to the Leased
Premises that are necessitated by Lessee’s negligence,
willful misconduct or failure to comply with the terms of this
Lease, or in the installation or removal of any of Lessee’s
fixtures, signs or improvements. Lessee shall replace all broken
glass in the Leased Premises.
8. Insurance. Lessee shall, at
its sole cost and expense, maintain, during the Term, comprehensive
public liability insurance , and contractual liability
insurance for personal injury, death and damage or destruction of
property occurring upon, in or about the Leased Premises,
consistent with the certificate of coverage attached hereto as
Exhibit B and made part hereof (the
“Insurance Requirements”) and shall maintain Lessor and
its mortgagee as an additional insured on all such policies;
provided, however, that Lessee shall have no obligation to obtain
or maintain, and it shall be Lessor’s sole responsibility to
obtain and maintain, any flood insurance for the improvements on
the Leased Premises. Lessee shall also insure the improvements on
the Leased Premises at Lessee’s expense during the Term at
their full insurable value on terms consistent with the Insurance
Requirements. Lessee, at its option, may obtain insurance on the
value of its personal property, contents, furniture, fixtures,
equipment or inventory maintained or located on the Leased Premises
and Lessor shall have no responsibility or liability with respect
to the foregoing. Lessee shall hereafter obtain and deliver to
Lessor a certificate evidencing the insurance required under this
Lease annually upon or immediately after the policy renewal date.
Each policy of insurance shall contain an agreement by the insurer
that it will not cancel or amend or fail to renew such policy or
reduce the coverage thereunder except after thirty (30) days prior
written notice to Lessor.
9. Lessee's Covenants. In
addition to Lessee’s other covenants and obligations
hereunder, Lessee agrees during the Term and for so long as
Lessee's occupancy continues:
(a) To pay when due the Base Rent and additional
expenses as set forth herein, to maintain the Leased Premises in
good condition and repair, reasonable wear and tear excepted and to
promptly perform all items of maintenance and repair which Lessee
is obligated to perform pursuant to this Lease;
(b) To permit Lessor to have access to the
Leased Premises, with prior notice, during Lessee's normal
operating hours provided any such entry does not interfere with
Lessee’s business or operations, and in the event of an
emergency at other times, for the purpose of inspection of the same
and to assure Lessor with regard to the performance by Lessee of
the terms and conditions hereof, and, during the 6 months prior to
expiration of the Term, to show the Leased Premises to prospective
purchasers and tenants; provided, however, in recognition of
Lessee's security needs and obligations as a bank, Lessor shall not
exercise any right it has to enter into any secure area within the
Leased Premises or to enter the Leased Premises outside
Lessee’s normal operating hours without Lessee’s prior
consent and under reasonable security conditions, accompanied by an
officer or authorized representative of Lessee. Notwithstanding the
foregoing, Lessor may exercise its right to enter the Leased
Premises without Lessee’s prior consent in emergency
situations threatening life or property in which case Lessor will
make reasonable attempts to contact Lessee and will contact local
police prior to any such entry;
(c) At the expiration or earlier termination of
the Term, promptly to yield up the Leased Premises and all
improvements, alterations and additions thereto (unless required to
be removed) in broom clean condition, and all fixtures and
equipment servicing the Leased Premises; and to remove Lessee's
signs, goods and effects and any fixtures and equipment used in the
conduct of Lessee's business not serving the Leased Premises;
and
(d) Comply with all governmental requirements
and regulations respecting Lessee's use and occupancy of the Leased
Premises in a timely manner and be solely responsible for all tax
levies, assessments, licenses or fines arising from the conduct of
Lessee's business.
10. Lessor's Covenants and
Warranties. Lessor represents, warrants and covenants as
follows : the accuracy of which Lessor acknowledges and
agrees are conditions to this Lease and material inducements to
Lessee to enter into this Lease:
(a) Lessor is the sole owner of the Leased
Premises, and has not subjected the Leased Premises to any liens,
leases or other agreements (other than the Mortgage Loan) that will
have priority over or conflict with this Lease after the date
hereof;
(b) The only mortgage(s) burdening the Leased
Premises as of the date of this Lease is a mortgage given by
Lessor, as borrower, in favor of Lessee, as lender, to secure
purchase money financing provided by Lessee for Lessor’s
acquisition of the Leased Premises (the “Mortgage
Loan”);
(c) Lessor has full right and power to execute
and perform this Lease and to grant the estate demised
herein;
(d) Lessor is not aware of any legal proceeding,
claim, taking, proposed taking, administrative or judicial order or
agreement with any third party that will or is likely to conflict
with or result in a claim against the validity of this Lease,
Lessee’s taking occupancy of the Leased Premises on the
Commencement Date, or Lessee’s using the Leased Premises for
any Permitted Uses; and
(e) Upon payment of the rent and performance of
all of the ot
