Exhibit 10.13
LEASE
AGREEMENT
This Lease made and entered on October 27, 2005, by and between,
A. C. Fernald Sons, Inc. , a Maine corporation (hereinafter
referred to as "Landlord") and Bar Harbor Bank & Trust ,
a Maine banking corporation (hereinafter referred to as
"Tenant").
ARTICLE I
Premises
Landlord hereby leases, demises and lets unto Tenant and Tenant
hereby leases, takes and hires from Landlord, for the term and upon
and subject to the terms and conditions set forth in this Lease
Agreement (hereinafter the "Lease"), the land and buildings located
on the westerly side of Route 102, Somesville, Mount Desert,
Hancock County, Maine, being more specifically described in
Schedule A hereto and made a part hereof (hereinafter
the "premises" or the "leased premises").
ARTICLE II
Initial Term;
Renewal Terms
Section 2.01. Initial Term . The initial term of this
Lease shall be for five and one-half (5 1/2) years, beginning on
January 1, 2006, and ending on June 30, 2011 (the "Initial Term").
A "Lease Year" shall be a consecutive twelve (12) month period
commencing on January 1 each year during the Initial Term, and, for
any Renewal Term, on July 1 of each year.
Section 2.02. Renewal Terms. In addition to the Initial
Term, (a) unless Tenant shall provide a Notice of Non-Renewal as
set forth in Section 2.03, the term of this Lease shall
automatically and without further action or notice be extended for
an additional five (5) year term commencing on July 1, 2011 and
ending on June 30, 2016 (the "First Renewal Term"), and, (b) unless
Landlord or Tenant, as the case may be, shall provide a Notice of
Non-Renewal as set forth in Section 2.03, the term of this Lease
shall automatically and without further action or notice be
extended for a further additional ten (10) year term commencing on
July 1, 2016, and ending on June 30, 2026 (the "Second Renewal
Term").
Section 2.03. Notice of Non-Renewal . The following
provisions shall govern the renewal rights of Landlord and Tenant
under this Lease.
(a) First Renewal Term . Tenant shall have the right to
end the term of this Lease by giving to Landlord a written notice
(a "Tenant Termination Notice") not later than July 1, 2010,
stating that it has elected not to exercise its right to renew for
the First Renewal Term. If Landlord has not received a Tenant
Termination Notice by such date, Landlord shall give Tenant a
written notice stating that it has not received a Tenant
Termination Notice and Tenant shall then have ten (10) days
following such notice from Landlord to elect not to renew by giving
a Tenant Termination Notice within such ten (10) day period. If
Tenant does not elect to terminate the First Renewal Term, then the
term of this Lease will be automatically renewed for the First
Renewal Term and shall end on June 30, 2016.
(b) Landlord’s Right of Termination . If this Lease
has been renewed and is still in effect through the First Renewal
Term, then Landlord shall have the right to elect to end the term
of this Lease by giving to Lessee a written notice
("Landlord’s Termination Notice") not later than July 1, 2015
stating that Landlord has elected to terminate the Lease as of June
30, 2016, and Tenant shall thereupon have no right to extend the
term of this Lease for the Second Renewal Term.
(c) Second Renewal Term . If Landlord has not given
Landlord’s Termination Notice by July 1, 2015, then Lessee
shall have the right to end the term of this Lease by giving to
Landlord a written notice ("Tenant’s Termination Notice") not
later than January 1, 2016, stating that Lessee has elected to
terminate the Lease effective as of June 30, 2016. Upon the giving
of Tenant’s Termination Notice there shall be no rights by
either Tenant or Landlord with respect to the Second Renewal Term.
If neither Landlord nor Tenant has given a Termination Notice as
set forth in this Article, then the term of this Lease shall
continue through the Second Renewal Term.
ARTICLE III
Rent
Section 3.01. Initial Term and Renewal Term Base Rent .
During each Lease Year during the Initial Term or any Renewal Term
of this Lease, Tenant shall promptly pay Landlord, without any
offset, abatement, deductions or setoff whatsoever, and without
previous demand therefor, at the address set forth in this Lease in
regard to notices or at such other place as Landlord may direct by
notice in writing to Tenant from time to time, the annual Base
Rent, as determined hereinafter.
(a) Initial Term. During the first Lease Year of this Lease, the
Base Rent shall be Sixty Thousand Dollars ($60,000.00) per Lease
Year, pro-rated for any partial Lease Year. During each subsequent
Lease Year during the Initial Term, the Base Rent shall be
increased based upon the following formula: Base Rent will be
adjusted annually as of January 1st during each Lease Year of the
Initial Term, by the same percentage as the percentage increase in
the Consumer Price Index for all Urban Consumers Northeast Region,
Class B (CPI-U, Northeast B) (all items 1982-1984=100), as the same
increased for the previous year, provided that said increase in
Base Rent shall not be greater than five percent (5%) in any one
Lease Year notwithstanding the percentage increase in the
CPI-U.
(b) First Renewal Term. During the first Lease Year of the First
Renewal Term, the Base Rent shall be Seventy Eight Thousand Dollars
($78,000.00) per Lease Year. During each subsequent Lease Year
during the First Renewal Term, the Base Rent shall be increased
based upon the following formula: Base Rent will be adjusted
annually as of July 1st during each Lease Year of the First Renewal
Term, by the same percentage as the percentage increase in the
Consumer Price Index for all Urban Consumers Northeast Region,
Class B (CPI-U, Northeast B) (all items 1982-1984=100), as the same
increased for the immediately preceding Lease Year, provided that
said increase in Base Rent shall not be greater than five percent
(5%) in any one Lease Year notwithstanding the percentage increase
in the CPI-U.
(c) Second Renewal Term . During each Lease Year during
the Second Renewal Term, the Base Rent (in this case, the annual
Base Rent as calculated to be in effect for the last year of the
First Renewal Term) shall be increased based upon the following
formula: Base Rent will be adjusted annually as of July 1
st during each Lease Year of the Second Renewal Term, by
the same percentage as the percentage increase in the Consumer
Price Index for all Urban Consumers Northeast Region, Class B
(CPI-U, Northeast B) (all items 1982-1984=100), as the same
increased for the immediately preceding Lease Year, provided that
said increase in Base Rent shall not be greater than five percent
(5%) in any one Lease Year notwithstanding the percentage increase
in the CPI-U.
Notwithstanding the foregoing formula for increasing the Base
Rent, the Base Rent shall not decrease in any Lease Year, and if
there is a decrease in such Consumer Price Index during a Lease
Year, then the Base Rent shall remain at the same rate as the
immediately prior Lease Year. During each Lease Year, when making
the monthly installment of Base Rent for January 1st, during the
Initial Term, or July 1st, during a Renewal Term, Tenant shall
provide to Landlord a statement indicating the calculation of the
increase in the Base Rent for such Lease Year. Acceptance of such
payment by Landlord shall not constitute agreement with the
calculation provided by Tenant, but Landlord shall notify Tenant if
it disagrees with such calculation within a reasonable time. The
Base Rent, as calculated above, shall be payable in advance in
equal monthly installments on the first day of each and every
calendar month during the Initial Term and any Renewal Term.
Section 3.02. Additional Rent . In addition to the Base
Rent specified above, Tenant shall pay as "Additional Rent"
throughout the Initial Term of this Lease and any Renewal Term, at
the times and in the manner set forth in Section 3.05 of this
Article, without any offset, abatement, deduction or set off, the
following amounts: (i) all Real Estate Taxes, as hereinafter
defined; (ii) all Operating Expenses, as hereinafter defined; and
(iii) all other costs, charges and expenses associated with the
premises or otherwise required under this Lease. In the event of
nonpayment of any such amount, Landlord shall have all the rights
and remedies with respect thereto as provided for in Article 7 of
this Lease.
Section 3.03. Real Estate Taxes . For the purpose of this
Lease, Real Estate Taxes shall be deemed to be the aggregate amount
of taxes and assessments levied, assessed or imposed upon the
premises, including, without limitation, water and sewer rents,
rates and charges, vault taxes and other governmental charges,
general, special, ordinary and extraordinary, and including any tax
which shall be in substitution of or in addition to taxes now
levied, assessed or imposed on the premises. Tenant shall also pay
all taxes upon all equipment and other personal property located on
the leased premises. Tenant shall pay all Real Estate Taxes and
other taxes directly to the taxing authority when due and prior to
any penalty or interest accruing thereon, and Tenant shall provide
Landlord evidence of such payment upon request.
Section 3.04. Operating Expenses . Operating Expenses
shall include those costs and expenses incurred by Tenant in
respect to the operation, repair, management and maintenance of and
the provision of services to the premises, including, but not
limited to, all costs and expenses of: administration, operation,
maintenance, repair and replacement, whether capital or otherwise;
lighting, heating, ventilating, painting, cleaning, janitorial
services, and window cleaning; all insurances required herein;
snow, ice, garbage and debris removal; security, wages, payroll
taxes, workmen's compensation, cleaning, fringe benefits,
professional fees and reasonable management fees of all persons
engaged by the Tenant in the maintenance, operations, service or
management of the premises; utility fees and costs including all
costs of electricity, steam, heat, ventilation, air-conditioning
and water together with any utility taxes; all building and
cleaning supplies; telephone and other communications costs;
maintaining, operating and repairing all machinery and equipment in
or serving the premises including heating and air-conditioning
equipment, security equipment and elevators; repairs, replacements
and improvements deemed appropriate by Tenant for the continued
operation of the building and costs of service and supply contracts
entered into by Tenant relating to operations, repair, maintenance
and management of the premises.
Section 3.05. Time and Manner of Payment . Tenant shall
contract and pay directly all persons providing the services for
Operating Expenses during the term of this Lease, all such payments
to made when due and prior to the right of any vendor or supplier
filing any lien or claim of reimbursement that would affect
Landlord’s interest in the premises. If any such charge shall
be contested or disputed, the charges which shall be resolved or
not in dispute shall be paid within ten (10) days after resolution.
Tenant shall provide Landlord with a statement of the actual
Additional Rent, including Operating Expenses, for each Lease Year
hereunder with 60 days following the end of each Lease Year.
ARTICLE IV
Landlord's
Obligations
Section 4.01. Quiet Enjoyment . Landlord warrants that,
so long as Tenant faithfully performs all agreements and
obligations on its part to be performed under this Lease, Tenant
shall peaceably and quietly have, hold, and enjoy the premises for
the term set forth herein without molestation or disturbance by and
from Landlord and free from any and all encumbrances, except that
such tenancy shall be subject to applicable provisions of law and
governmental authorities and to Landlord's rights hereunder.
Section 4.02 Hazardous Substances. Landlord warrants that
no Hazardous Materials, as hereafter defined, have been deposited,
discharged, placed or disposed of at the premises by Landlord and
that the premises are, to the best of Landlord’s knowledge
and belief, free from Hazardous Materials. Landlord shall, to the
extent arising from breach of the foregoing warranty, (a) conduct
and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions necessary to clean up and
remove all Hazardous Materials from the premises, in accordance
with all applicable federal, state and local laws, regulations,
rules, ordinances and policies and in accordance with the orders
and directives of all federal, state and local governmental
authorities, and (b) defend, indemnify and hold harmless Tenant,
its employees, agents, officers and directors, from and against any
and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses (including, without limit,
attorney and consultant fees, investigation and laboratory fees,
court costs and litigation expenses) of whatever kind or nature,
known or unknown, contingent or otherwise, arising out of or in any
related to (i) the discovery, presence, disposal, release, or
threatened release, of any Hazardous Materials presently existing
within, under, upon, or from the premises, or (ii) any personal
injury (including wrongful death) or property damage (real or
personal), any lawsuit brought or threatened, settlement reached,
or government order and/or any violations of laws, orders,
regulations, requirements, or demands of government authorities,
now in effect or in effect at any time in the future, which are
based upon or in any way related to any Hazardous Materials
presently existing on the premises.
ARTICLE V
Tenant's
Obligations
Section 5.01. Payment of Rent . Tenant shall pay each and
every installment of Base Rent, Additional Rent and other amounts
due hereunder promptly when due, and without demand by Landlord and
without any withholding or offset whatsoever.
Section 5.02. Use and Occupancy . Tenant shall use and
occupy the premises solely for offices and retail banking service
purposes and for no other purposes whatsoever. Tenant shall comply,
at its expense, with all governmental laws, rules, regulations and
ordinances and all of Tenant’s insurance policies applicable
to the Leased Premises.
Section 5.03. Assignment and Sublease . Tenant shall not
assign, encumber or otherwise transfer this Lease or any interest
therein, nor make any sublease of the premises or any portion
thereof, provided however nothing herein shall prohibit the Tenant
from assigning this Lease to a corporate successor of Tenant by way
of merger or purchase. In the event of a sublease, Tenant shall
remain liable to Landlord for all obligations under this Lease and
Landlord's collection of rent from such assignee or subtenant shall
not be deemed a waiver of the covenants contained herein or a
release of Tenant. Landlord recognizes that Tenant may enter into a
sublease of the premises with Union Trust Company, which is a
present tenant in the premises, for a period of up to one (1) year,
and Tenant agrees to provide to Landlord a copy of any proposed
sublease, and Landlord agrees not to unreasonably withhold, delay
or condition its consent to such sublease.
Section 5.04. Maintenance and Repairs . Tenant shall
maintain the premises in as good order, repair, and condition as
the premises existed at the commencement of this Lease, reasonable
wear and tear excepted. Tenant shall be solely responsible for all
repairs and replacements to the premises during the lease term,
whether the same are capital or otherwise.
Section 5.05. Alterations . Tenant shall not make any
alterations, installations, repairs, improvements, replacements or
additions in, to or about any part of the premises, or remodel all
or any part of the premises, without the prior written consent of
Landlord and Landlord's mortgagees, and the prior written approval
by them of the plans and specifications therefor. Tenant shall
remove at its own expense any alterations, additions, and the like
installed in violation of this provision. In the event of failure
of Tenant to so remove, Landlord shall have the right to enter and
remove such alterations, additions and the like, and charge the
reasonable cost thereof to Tenant. Unless agreed to otherwise in
advance by the parties, all additions, repairs, replacements,
alterations and improvements to the premises made by Tenant,
including all materials used and incorporated therein, shall become
the property of Landlord upon the expiration or termination of this
Lease.
Section 5.06. Signage . Tenant shall not install
advertisements of any kind including, but not limited to, signs,
awnings and signals, to any part of the leased premises including
the inside or outside of the windows or doors unless and until the
style, size, color, construction, and location of such
advertisements have been approved in writing by Landlord. Landlord
shall respond to Tenant’s request hereunder within thirty
(30) days or the request shall be deemed approved. Tenant agrees
that upon expiration or termination of this Lease Agreement, Tenant
will remove such advertisements and restore the affected portion of
the leased premises to its original condition prior to the
installation of such advertisements.
Section 5.07. Waste and Nuisances . Tenant shall not
injure or deface the premises. Tenant shall not permit the use of
the premises for any purposes other than provided herein and shall
not permit any use of the premises which is improper, offensive, or
contrary to law or ordinance. Tenant shall not permit on the
premises any hazardous or inflammable substances, fluids, or
chemicals, except for those routinely used in the banking services
industry. Tenant shall permit no objectionable noise, odors or
other nuisance, provided that Landlord acknowledges Tenant will be
operating a bank facility with drive up window services. Tenant
shall not permit or maintain any conditions which might cause an
adverse effect on any insurance coverage affecting the
premises.
Section 5.08. Risk of Loss . Tenant shall hold the
property owned by Tenant or in the Tenant's custody situated on the
premises at Tenant's own risk.
Section 5.09. Casualty Insurance . Tenant shall insure
Tenant and Landlord and Landlord's mortgagees, if any, as their
interests may appear, against loss or damage to the improvements to
the premises under standard Maine insurance policies against fire
and standard extended coverage risks in such amounts and with such
companies as Landlord and its mortgagees shall reasonably require,
but in no event for less than the full insurable value of the
premises. Tenant shall provide evidence of such insurance coverage
naming Landlord and Landlord's mortgagee, as loss payee, and
providing for thirty (30) days prior notice of cancellation or
expiration.
Section 5.10. Liability Insurance . Tenant shall insure
Tenant and Landlord and Landlord's mortgagees as their interests
may appear with general public liability insurance coverage on the
premises for no less than One Million Dollars for injury or death
in any single accident. Tenant shall provide evidence of such
insurance coverage on request. In no event shall the limits of such
policies be considered to limit Tenant's liability under this
Lease.
Section 5.11. Indemnity . Tenant shall hold harmless,
defend and indemnify Landlord from any injury, death, loss, claim,
or damage to any person or property while on or about the premises
and from any injury, loss, claim, or damage to any persons or
property anywhere occasioned by any act, neglect, omission, or
default of Tenant or its employees, agents, visitors, invitees or
contractors.
Section 5.12. Waiver of Subrogation . Landlor
