Exhibit 10.1
COMMERCIAL LEASE
AGREEMENT
TRIPLE NET
THIS COMMERCIAL LEASE
AGREEMENT (“Lease”) is made effective
February 5, 2008 by and between PARADIGM HOLDINGS, LLC
whose address is P.O. Box 2045, Bluffton SC 29910
(“Landlord”) and ATLANTIC COMMUNITY BANK whose
address is 1 Sherington Drive, Suite J, Bluffton , SC 29910
(“Tenant”).
WHEREAS , Landlord
is the owner of a parcel of real property with certain improvements
known as Lot 11-A of Sheridan Park, Bluffton, SC
(“Premises”/ “Building”); and
WHEREAS, Tenant
wishes to lease a portion of Landlord’s improved real
property under certain terms and conditions.
NOW, THEREFORE , in
consideration of the sum of the rent to be paid by Tenant to
Landlord, the covenants and agreements herein, and for other good
and valuable consideration, the receipt and legal sufficiency of
which both parties acknowledge, the Landlord and Tenant agree as
follows:
1.
LEASED
PREMISES . In consideration of the rent described
below and of the covenants hereinafter contained, Landlord does
hereby lease to Tenant, and Tenant does hereby lease from Landlord,
that certain office space comprising initially of 5,105square feet,
and shall be expanded to 5,905 + upon the conclusion of the
Tenant’s build out which shall include the addition of an
automated drive-through as described herein (“Leased
Premises”). Said leased area shown on the floor plan
attached hereto as Exhibit “A”.
2.
TERM
a.
Term.
The term of this
Lease (“Initial Term”) shall commence on
January 1, 2008 (“Commencement Date”) and shall
terminate at 12:00 o’clock midnight, local time, on the last
day of the calender month which completed fifteen (15) full
years’ tenancy hereunder (the “Termination
Date”). The normal lease year shall run from
January 1 to December 31 (“Lease
Year”).
b.
Option To Extend
Term . At
the conclusion of the Initial Term, so long as the Lease is not in
default, Tenant shall have the option to renew this Lease for a
period of five (5) years (“First Option
Period”). Subsequently, at the conclusion of the First
Option Period, Tenant shall have the option of renewing this Lease
for an additional five (5) years (“Second Option
Period”), provided that the Lease is not in default. To
exercise its renewal option, Tenant shall notify the Landlord in
writing of its intent to exercise not less than one hundred twenty
days (120) days before the expiration of the Initial Term, and if
applicable, the first renewal term. All agreements, covenants, and
provisions provided in this Lease shall control and apply to any
renewal term.
3.
RENT
Rent . Tenant hereby covenants
and agrees to pay to Landlord as rent for the Leased Premises (all
of which is collectively referred to as “Rent”) all of
the following:
a.
Annual basic
rent (“Basic Rent”) in the sum of One
Hundred Fourteen Thousand Eight Hundred Sixty Two and 50/100
Dollars ($114,862.50), payable in twelve (12) equal monthly
installments of Nine Thousand Five Hundred Seventy One and 88/100
Dollars ($9,571.88) in advance on the first day of
Tenant’s possession on or around February 8, 2008
through December, 2008. First month’s rent shall be
pro-rated based upon date of possession; and
b.
From January 1, 2009
through August 31, 2023, Basic Rent shall be increased each
year as described on the Schedule of Rents attached hereto as
Exhibit “B”; and
c.
If Tenant exercises its
options to renew this Lease under terms described herein, Basic
Rent Shall continue to increase as described on new Schedule of
Rents to be released prior to the last year of the Tenant’s
then current term, but in no event shall the renewal rent be
increased by more than 3% per year; and
d.
In each instance under
Subsections 3 (a) through (b), the Basic Rent shall be payable
in
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equal monthly installments, each in advance, on
the first day of each month of the applicable Lease
Year.
e.
Additional
rent (“Additional Rent”) Tenant shall,
for each Lease Year after January, 2008 for so much of the Lease
Year as Tenant has occupied the Leased Premises, during the Lease
Term, and any renewals hereof, pay as additional rent the
Landlord’s operating/common costs payable with respect to the
land and/or Building of which the Leased Premises are a part.
Landlord’s operating/common costs shall be defined to include
the cost and expense of operating and maintaining the common
facilities which are provided by the Landlord in a manner deemed by
Landlord to be reasonable and appropriate for the best interest of
the Tenant including, without limitation:
(i)
All costs and expenses of
operating repairing, heating, cooling, lighting, cleaning,
policing trash removal and security;
(ii)
insurance, including
liability insurance for personal injury, death and property damage,
insurance against fire, extended coverage, theft, or other
casualties, insurance against liability for defamation and claims
of false arrests occurring in or about the common facilities areas,
plate glass insurance for glass exclusively serving the common
facilities and areas;
(iii)
regulation of traffic and
any fees payable for security for the Building of which the Leased
Premises is a part;
(iv)
all water and sewer user
fees payable to the BJWSA, or its successors;
(v)
all taxes assessed or
imposed at any time by an municipal, county or state government
upon or against the Building and or the land of which the Leases
Premises form a part;
(vi)
costs and expense of pest
control service for all common areas and all leased premises in the
Building or which the Leased Premises is a part;
g.
Notice of Additional Rent . Landlord will give a
statement of estimated charges based upon Tenant’s square
footage and payable by Tenant under this Section for the Lease
Year in question, which estimated charges payable shall be payable
in equal monthly installments in advance, subject to adjustment in
accordance with the terms of this Section. Whenever the
correct amount of an item shown on any such statement shall be
known, appropriate adjustment shall be made by Landlord’s
increasing or decreasing Tenant’s subsequent payments, by
giving Tenant a credit against subsequent rent, or a refund; if
during any Lease Year or part thereof Landlord shall not have
delivered to Tenant the statement mentioned herein, Tenant shall
continue to pay the Landlord the sum as payable for the immediate
preceding Lease Year until the statement of the then current Lease
Year shall have been delivered at which time the monthly payments
by Tenant shall be adjusted retroactively. Landlord will
maintain, or cause to be maintained, complete and accurate records
of accounts in such manner and detail so as to provide a proper
basis for analysis of the statements to be furnished by
Landlord. Tenant or its authorized representatives shall have
the right to examine said accounts and records during regular
business hours for the purpose of verifying the information set
forth and any such statement provided that written request for such
inspection is made by Tenant withing ten (10) days after
receipt of such statement.
h.
Method of Payment. Basic Rent and all Additional Rent
as provided for under this Lease shall be paid promptly when due,
in cash or by check, in lawful money of the United States of
America, without notice or demand and without deduction,
diminution, abatement, counterclaim or set off of any amount or for
any reason whatsoever, payable to Paradigm Holdings, LLC, and
delivered to Landlord at its offices at the address as stated in
Section 27 or to such other person and place as may be
designated by notice in writing from Landlord to Tenant from time
to time. If Tenant shall present to Landlord more than twice
during the Lease Term checks or drafts not honored by the
institution upon which they are issued, then Landlord may require
that future payments of Rent and other sums thereafter payable be
made by certified or cashier’s check.
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i.
Charge for Late Payment . Other remedies for
non-payment of rent notwithstanding, any installment of Rent which
is not paid within fifteen (15) days after the due date shall be
subject, at Landlord’s option each month, to a late charge
equal to five percent (5%) of the amount due, which shall be
payable as Additional Rent. Any installment of Basic Rent or
Additional Rent not paid within five (5) days from the date
due shall accrue interest at the rate of eighteen (18%) until paid
in full, which interest shall be deemed Additional Rent.
j.
Partial Payments . No payment by Tenant or receipt by
Landlord of a lesser amount than the monthly installments of Rent
herein stipulated shall be deemed to be other than on account of
the earliest stipulated Rent, nor shall any endorsement or
statement on any check or any letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord
may accept such check for payment without prejudice to
Landlord’s right to recover the balance of such Rent or to
pursue any other remedy provided in this Lease.
k.
Security Deposit . Landlord has received the sum of
Fifteen Thousand and No/100 Dollars($15,000.00) as a security
deposit (“Security Deposit”). The Security
Deposit shall bear interest to Tenant at a rate of one and a half
percent (1.5%) per year, and shall be considered as security for
the payment and performance of the obligations, covenants,
conditions and agreements contained herein. The Security
Deposit shall not constitute an advance payment of any amounts owed
by Tenant under this Lease, or a measure of damages to which
Landlord shall be entitled upon a breach of this Lease by Tenant or
upon termination of this Lease. Landlord may, without
prejudice to any other remedy, use the Security Deposit to the
extent necessary to remedy any default in the payment of Basic Rent
or Additional Rent or to satisfy any other obligation of Tenant
hereunder and Tenant shall promptly, on demand, restore the
Security Deposit to its original amount. If Landlord
transfers its interest in the Leased Premises during the Term,
Landlord may assign the Security Deposit to the transferee who
shall become obligated to Tenant for its return pursuant to the
terms of this Lease, and thereafter Landlord shall have no further
liability for its return.
4.
USE OF LEASED PREMISES
a.
Permitted
Uses .
Tenant covenants to use the Leased Premises currently for a bank
and depository institution with all corollary and additional
business activities that are customary in the banking
industry. Landlord’s prior written consent, which shall
not be unreasonably withheld, must be acquired in the event Tenant
shall desire to assign this Lease or sublet the premises for any
other lawful reasonable use. Tenant, at its own expense,
shall comply with and promptly carry out and be responsible for all
orders, impact fees, requirements or conditions imposed by the
ordinances, laws and regulations of all of the governmental
authorities having jurisdiction over the Leased Premises, which are
occasioned by or required in the current conduct of Tenant’s
business, and any lawful reasonable business uses within the Leased
Premises and to obtain all licenses, permits, equipment and the
like required to permit Tenant and/or conditional subtenants to
occupy the Leased Premises.
b.
Prohibited Uses . Tenant shall not permit the Leased
Premises, or any part thereof, to be used for any disorderly,
unlawful or hazardous purpose, nor as a source of annoyance or
embarrassment to Landlord or other tenants.
5.
OPERATING EXPENSES
a.
Operating Expenses as Additional Rent . Tenant shall
pay to Landlord, as Additional Rent, Tenant’s pro rata share
of the amount of the Operating Expenses for
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the
Premises.
b.
Operating Expenses Defined . The term “Operating
Expenses” shall mean any and all expenses incurred by
Landlord in connection with the utilities, taxes, flood, wind and
hail, and liability insurance, and landscaping..
c.
No Reduction in Rent . Nothing contained in this
Section 5 shall be construed at any time to reduce the Rent
payable hereunder below the amount stipulated in Sections 3 and 4
of this Lease.
d.
Proration of Adjustments for Partial Year . If the
Termination Date or sooner termination of this lease shall not
coincide with the end of a calendar year, then in computing the
amount payable under this Section 5 for the period between the
commencement of the applicable calendar year in question and the
Termination Date or sooner termination of this Lease, the amount
that would have been due from the Tenant for the full year, if
Tenant had been a tenant for the entire calendar year, shall be
prorated over the portion of the calendar year that Tenant is a
tenant in the Premises.
6.
REAL ESTATE TAXES
a.
Real Estate Taxes as
Additional Rent. Tenant shall pay to Landlord, as
Additional Rent, Tenant’s pro rata share of the amount by
which Real Estate Taxes for the Premises for or attributable to the
then current Real Estate Tax Year. Tenant shall pay each
month, in advance, as Additional Rent, one-twelfth of
Landlord’s estimate of Tenant’s annual obligation under
this Section 6. Such payments shall in no way limit
Tenant’s annual obligation. If the total of such
monthly installments paid is less than Tenant’s total
obligation, Tenant shall promptly pay the difference upon receipt
of Landlord’s statement. Any overpayment shall be
credited to Tenant’s obligation for the next succeeding
period.
b.
Real Estate Taxes
Defined .
The term “Real Estate Taxes” means all taxes, rates and
assessments, general or special, levied or imposed with respect to
the land, and improvements constructed thereon (including all
taxes, rates and assessments, general or special, levied or imposed
for school, public betterment and/or general or local
improvements. The term “Base Real Estate Taxes”
means the assessed value of said land, and improvements, multiplied
by the then current rate, for the tax year during which this Lease
commences. The term “Real Estate Tax Year” means
each successive twelve (12) month period following and
corresponding to the period in respect of which the Base Real
Estate Taxes are established, irrespective of the period or periods
which may from time to time in the future be established by
competent authority for the purposes of levying or imposing Real
Estate Taxes.
c.
No Reduction in
Rent .
Nothing contained in this Section 6 shall be construed at any
time to reduce the Rent payable hereunder below the amount
stipulated in Sections 3 and 5 of this Lease.
d.
Certain Increase Not
Included . It is understood and agreed that Tenant
shall not be liable for any increase in the Real Estate Taxes which
is occasioned solely by reason of Landlord’s failure to pay
Real Estate Taxes when due.
e.
Cost of Pursuing Tax
Reduction Part of Tax Escalation . Reasonable expenses incurred by
Landlord in obtaining or attempting to obtain a reduction of any
Real Estate Property Taxes shall be added to and included in the
amount of any such Real Estate Property Taxes. Real Estate
Property Taxes which are being contested by Landlord shall
nevertheless be included for the purposes of the computation of the
liability of Tenant under this Section 6 hereof, provided,
however, that in the event that Tenant shall have paid any amount
of Additional Rent pursuant to this Section 6 and Landlord
shall thereafter receive a refund of any portion of any Real Estate
Taxes on which such payment shall have been based, Landlord shall
pay to Tenant the appropriate portion of such refund.
Landlord shall have no obligation to contest, object, or litigate
the levying
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or
imposition of any Real Estate or Personal Property Taxes and may
settle, compromise, consent to, waive or otherwise determine in its
discretion any Real Estate Taxes without consent or approval of
Tenant. If, however, Landlord does not contest such Real
Estate Taxes, Tenant may do so at Tenant’s expense and
Landlord will cooperate with Tenant in such effort.
f.
Proration of Adjustment
for Partial Year . If the Termination Date or sooner
termination of this Lease shall not coincide with the end of a Real
Estate Tax Year, then in computing the amount payable under this
Section 6 for the period between the commencement of the
applicable Real Estate Tax Year in question and the Termination
Date or sooner termination of this Lease, the amount that would
have been due from the Tenant for the full year, if Tenant had been
a tenant for the entire Real Estate Tax Year, shall be prorated
over the portion of the Real Estate Tax Year that Tenant is a
tenant in the Premises. Tenant’s obligation to pay
increased Real Estate Taxes under this Section 7 for the final
period of the Lease (as well as for any earlier period not paid as
of the expiration or sooner termination of the Lease) shall survive
the expiration or sooner termination of this Lease.
7.
REPAIRS AND MAINTENANCE
f.
Landlord’s
Responsibility to Maintain and Repair . Subject to the provisions
hereinafter contained with regard to damage by fire or other
casualty and this Section 7, Landlord agrees to maintain the
structural portions, and the roof, of the Leased Premises in good
order and repair during the Lease Term, unless damage thereto shall
have been caused by the act or neglect of Tenant, its agents,
employees, contractors or invitees, in which case, the same shall
be repaired by and at the expense of Tenant. In the event of
Tenant’s negligence, as defined herein, and Tenant fails to
make such repairs promptly, Landlord, at its option, may make such
repairs and Tenant shall pay Landlord on demand Landlord’s
actual costs in making such repairs plus a fee of ten percent (10%)
to cover Landlord’s overhead.
g.
Tenant’s
Responsibility to Maintain and Repair . Tenant shall maintain the
non-structural portions of the interior of the Leased Premises
including but not limited to, all ceilings, floors, walls and
attached fixtures. Tenant shall also be responsible for the
HVAC systems, including serving, as well as all electrical,
plumbing and other utility infrastructure within the Leased
Premises in good repair and condition.
8.
LANDLORD’S UTILITY ACCESS - Landlord’s Right
to Access Service Lines . Landlord reserves the right to
erect, use, connect to, maintain and repair pipes, ducts, conduits,
cables, plumbing, vents and wires in, to and through the Leased
Premises as and to the extent that Landlord deems necessary or
appropriate for the proper operation and maintenance of the
Building and the right at all times to transmit water, hear,
air-conditioning and electric current through such pipes, ducts,
conduits, cables, plumbing, vents and wires.
9.
TENANT’S AGREEMENT
f.
Covenants of
Tenant .
Tenant covenants and agrees:
(i)
not to place a load on any
floor exceeding the floor load which such floor was designed to
carry in accordance with the plans and specifications of the
Premises, and not to install, operate or maintain in the Leased
Premises any safe or heavy item of equipment except in such manner
and in such location as Landlord shall prescribe so as to achieve
the proper distribution of weight;
(ii)
upon the successful
completion of Tenant improvements , not to strip, overload, damage
or deface the Leased Premises, hallways, stairways, elevators,
parking facilities or other public areas of the Premises, or the
fixtures therein or used therewith, nor to permit any hole to be
made in any of the same;
(iii)
not to suffer or permit
any trade or occupation to be carried on or use made of the Leased
Premises which shall be unlawful, noisy, offensive, or injurious to
any person or property, or
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such as to increase the danger of fire or
affect or make void or voidable any insurance on the Premises, or
which may render any increased or extra premium payable for such
insurance, or which shall be contrary to any law or ordinance,
rule or regulation from time to time established by any public
authority;
(iv)
to park vehicles only
located on Lot 11-A.
(v)
to conform to all
rules and regulations from time to time established by the
appropriate insurance rating organization and to all reasonable
rules and regulations from time to time established by the
Landlord, including those attached as Exhibit “B”
hereto;
(vi)
to be responsible for the
cost of removal of Tenant’s bulk trash at time of move-in,
during occupancy and move-out;
(vii)
not to conduct nor permit
in the Leased Premises either the generation, treatment, storage or
disposal of any hazardous substances and materials or toxic
substances of any kind as described in any federal, state or local
laws, ordinances or regulations regarding environmental or
hazardous wastes, and Tenant shall prohibit its assignees,
sublessees, employees, agents and contractors (collectively:
“Permitees”) from doing so; and Tenant shall indemnify,
defend and hold Landlord and its agents harmless from all loss;
costs, foreseeable and unforeseeable, direct or consequential;
damages; liability; fines; prosecutions; judgments; litigation; and
expenses, including but not limited to, clean-up cost, court costs
and reasonable attorneys’ fees arising out of any violation
of the provisions of this Section by Tenant or its
Permitees.
10.
ALTERATIONS
a.
Tenant Build Out. Tenant shall be responsible for the
renovations and construction to the Premises which shall include,
but not be limited to, the addition of drive through teller lanes,
addition of square footage, and the overall conversion to be in
compliance for a depository institution under local, state, and
federal regulations. Said build out improvements are further
described on Exhibit “A” attached hereto.
b.
Signs.
Tenant shall have
the right to place a sign on a monument or the Building, whichever
the Tenant prefers, so long as the Tenant obtains a permit for the
sign from the Town of Bluffton.
c.
Once Tenant’s build
out has been approved by Landlord and completed, Tenant shall
not paint the Leased Premises or make any alterations, additions,
or other improvement in or to the Leased Premises or install any
equipment of any kind that shall require any alterations or
additions or affect the use of the Building’s water system,
heating system, plumbing system, air-conditioning system,
electrical system or other mechanical system, or install any
telephone antennae on the roof, in the windows, or upon the
exterior of the Building without the prior written consent of
Landlord. If any such alterations or additions are made by
Tenant without Landlord’s consent, Landlord may correct or
remove them and Tenant shall be liable for any and all costs and
expenses incurred by Landlord in the connection or removal of such
work. All plans and specifications for any such work shall be
prepared by Tenant at Tenant’s expense and shall thereafter
be submitted to Landlord for its review. As a further
condition of Landlord’s consent to the use of Tenant’s
contractor, Tenant or Tenant’s contractor must evidence
insurance coverage to include (a) Worker’s Compensation
Coverage and (b) Comprehensive General Liability and Property
Damage insurance in the amount of not less than ONE MILLION AND
NO/100 DOLLARS ($1,000,000.00) in the aggregate. All work
with respect to such alterations and additions shall be done in a
good and workmanlike manner and diligently prosecuted to completion
to the end that Leased Premises shall at all times be a complete
unit except during the period necessarily required for such
work. Tenant shall not permit a mechanic’s
lien(s) to be placed upon the Leased Premises, or the Building
as a result of any alterations or improvements made by it and
agrees, if any such lien be filed on account of the act of Tenant,
promptly to pay the same. If Tenant fails to discharge such
lien within thirty (30) days of its filing, then, in addition to
any other right or remedy of Landlord, Landlord may, at its
election, discharge the lien. Tenant shall pay on demand any
amount paid by Landlord for the discharge or satisfaction of any
such lien, and all attorneys’
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fees and other costs and expenses of Landlord
incurred in defending any such action or in obtaining the discharge
of such action or in obtaining the discharge of such lien, together
with all necessary disbursements in connection therewith.
Tenant hereby expressly recognizes that in no event shall it be
deemed the agent of Landlord and no contractor of Tenant shall by
virtue of its contract be entitled to assert any lien against the
Leased Premises or Building. All alterations or additions
shall become a part of the realty and surrendered to Landlord upon
the expiration or termination of this Lease, unless Landlord shall
at the time of its approval of such work require removal or
restoration on the part of Tenant as a condition of such
approval.
11.
HOLD HARMLESS
a.
Limitations of
Landlord’s Liability . Unless caus
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