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LEASE AGREEMENT
THIS LEASE made this 7th day of April, 2003, by and between
MER GROUP, LLC, an Indiana limited
liability company (hereinafter referred to as
"Landlord"), and TOWER BANK AND TRUST
COMPANY, an Indiana corporation
(hereinafter referred to as "Tenant");
WITNESSETH:
FOR AND IN CONSIDERATION of the full and faithful compliance
by the parties hereto with each and all of
the terms, covenants and conditions
herein contained to be complied with by
them, Landlord does hereby lease, let
and demise unto Tenant a portion of the
real estate described in Exhibit "A"
attached hereto as presently identified on
Exhibit "B" attached hereto, together
with the improvements to be constructed
thereon (as provided in Article IV) and
all appurtenances thereto (hereinafter
referred to as the "demised premises").
The demised premises are leased by Landlord
to Tenant subject to covenants,
easements, conditions and restrictions of
record.
ARTICLE I
TERM AND OPTIONS
1.1 The lease term, subject to all of the provisions and
conditions herein contained, shall be for a
period of ten (10) years commencing
as provided in Section 4.2 of this Lease
(the "Commencement Date"), and
terminating on the tenth anniversary of the
Commencement Date, unless sooner
terminated as provided herein.
1.2 Subject to the conditions hereinafter set forth, Landlord
hereby grants to Tenant the option to renew
the lease term (the "Renewal
Option") for two (2) additional consecutive
periods of five (5) additional years
each (each being referred to herein as a
"Renewal Term"), to commence at the
expiration of the initial lease term.
Tenant shall exercise the Renewal Option
by delivering written notice of such
election to Landlord at least six (6)
months but no more than twelve (12) months
prior to the expiration of the
initial lease term, or current Renewal
Term. The renewal shall be upon the same
terms and conditions as this Lease, except:
(a) the rental shall be as provided
in Section 3.2 of this Lease; (b) Tenant
shall have no option to renew this
Lease beyond the expiration of the Renewal
Terms; and (c) Tenant shall not have
the right to assign the Renewal Option to
any sublessee of the demised premises
or assignee of the Lease, nor may any such
sublessee or assignee exercise or
enjoy the benefit of such Renewal Option.
Notwithstanding the foregoing, Tenant
shall not have the right to exercise the
Renewal Option, unless: (i) this Lease
shall be in full force and effect on the
date of the exercise of the Renewal
Option and the date of the expiration of
the then existing lease term; and (ii)
on the date of the exercise of the Renewal
Option and the date of the expiration
of the existing lease term there shall
exist no default on the part of Tenant
under this Lease.
1.3 Subject to the conditions hereinafter set forth, Landlord
hereby grants to Tenant the exclusive right
and option to purchase the demised
premises pursuant to Article XXI of this
Lease.
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1.4 This lease shall be contingent upon Tenant receiving state
and federal regulatory approval for the
operation of a bank branch facility upon
the demised premises within ninety (90)
days of the date of this Lease. If
Tenant does not obtain said approvals
within said ninety (90) day period, Tenant
may terminate this Lease by written notice
to Landlord within ten (10) days
thereafter. Upon receiving said approvals,
Tenant shall give Landlord written
notice. Landlord shall not be obligated to
begin "Landlord's Work" as provided
in Section 4.1 of this Lease until Landlord
receives written notice of said
approvals from Tenant.
ARTICLE II
USE AND OCCUPANCY
2.1 Tenant covenants that the demised premises shall, during
the term of this Lease, be used for a
retail bank branch facility, for such
other allied purposes as may be incidental
thereto, and for no other purpose
without the prior written consent of
Landlord.
2.2 Tenant agrees not to use or suffer or permit any person to
use, in any manner whatsoever, the demised
premises for any purpose calculated
to injure the reputation of the premises or
to impair the value of the demised
premises, nor for any purpose or use in
violation of any federal, state, county
or municipal law or ordinance. Tenant will
neither commit nor permit waste upon
the demised premises.
ARTICLE III
RENTAL
3.1 Tenant shall pay as base rent for said demised premises
for the initial lease term, without relief
from valuation or appraisement laws,
the sum of SIXTY-NINE THOUSAND SEVEN
HUNDRED FORTY ONE AND NO/100 DOLLARS
($69,741.00) per annum, payable in monthly
installments of FIVE THOUSAND EIGHT
HUNDRED ELEVEN AND 75/100 DOLLARS
($5,811.75) in advance on the first day of
each calendar month throughout the term
hereof to the attention of Landlord at
116 East Berry Street, Suite 1515, Box
9283, Fort Wayne, Indiana 46899, or such
other place as Landlord may from time to
time designate in writing.
3.2 Tenant shall pay as base rent for said demised premises
for each Renewal Term, without relief from
valuation or appraisement laws the
fair market rental value of the demised
premises determined by written agreement
of Landlord and Tenant within forty-five
(45) days of the date Tenant exercises
a renewal option. Base rent shall be paid
in advance on the first day of each
calendar month throughout the Renewal Terms
hereof to the attention of Landlord.
3.3 In the event Tenant shall fail to pay any installment of
monthly base rent within five (5) days of
the date due, Tenant shall become
liable to Landlord for a late payment fee
in an amount equal to (5% of the
installment due to compensate Landlord for
the additional costs and expenses
accruing to Landlord as a result of such
late payment.
3.4 Any payment due Landlord by Tenant pursuant to the terms
and conditions of this Lease which shall
not be paid with five (5) days of the
date due shall bear
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interest at a maximum rate payable by
Tenant under state law, or in the absence
of a maximum rate, at the rate of Eighteen
Percent (18%) per annum from the date
when the same is payable under the terms of
this Lease until the same shall be
paid.
3.5 It is the purpose and intent of Landlord and Tenant that
the rental as herein provided shall be
absolutely net to the Landlord, so that
this Lease shall yield to Landlord the rent
specified hereinabove and
accordingly that all taxes, insurance and
maintenance shall be solely the
responsibility of Tenant unless otherwise
specifically provided herein.
ARTICLE IV
CONSTRUCTION OF BUILDING AND OTHER IMPROVEMENTS
4.1 Subject to the provisions of Section 1.4 hereof, Landlord
agrees to construct or cause to be
constructed a building and related
improvements upon the demised premises in
substantial conformity with Landlord's
Work and Tenant agrees to perform or cause
to be performed "Tenant's Work," both
as defined and described on Exhibit "C"
attached hereto and made a part hereof.
4.2 Landlord shall notify Tenant when Landlord's Work has been
substantially completed and the
Commencement Date shall be the earlier of: (a)
sixty (60) days after the date Landlord
provides said notice; or (b) the date
upon which Tenant opens its business upon
the demised premises to the public,
but no sooner than December 31, 2003.
Notwithstanding anything in this Lease to
the contrary, the taking of possession of
the demised premises by Tenant shall
be deemed a conclusive acknowledgment by
Tenant that Landlord's Work has been
substantially completed in compliance with
this Lease. For purposes of this
Lease, Landlord shall be deemed to have
substantially completed Landlord's Work
when Landlord has completed Landlord's Work
to the point at which Tenant may
legally occupy the building for the
purposes authorized under this Lease.
4.3 Landlord covenants and agrees that the demised premises
are properly zoned for the use permitted by
Section 2.1 of this Lease. If, at
any time during the term hereof, there
shall be any zoning laws, statutes or
ordinances regulating the use of the
demised premises which shall make it
unlawful or impractical for Tenant to
conduct the use described in Section 2.1
of this Lease on the demised premises,
Tenant shall have the option to terminate
this Lease by written notice to Landlord.
In the event of such termination,
Tenant shall pay rent to the date of
termination, and neither party shall have
any further rights or obligations pursuant
to this Lease. Upon Tenant's election
to terminate this Lease under this Section
4.3, the effective date of said
termination shall be the 30th day following
the date of the notice pursuant to
the notice provisions contained in Section
18.1.
ARTICLE V
REAL ESTATE TAXES
5.1 Tenant agrees that it shall pay, in addition to all other
sums agreed to be paid by it in this Lease,
all real property taxes and
assessments against the real estate and
improvements constituting the demised
premises which fall due during the term of
this Lease.
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Such taxes and assessments shall be
prorated for any partial lease years. Tenant
may permit any assessment to go to bond and
shall pay each installment of
principal and interest on or before the
last day on which payment may be made
without penalty. If the bond shall extend
beyond the end of the lease term, any
installments which would become due
thereafter shall be paid by Landlord. Tenant
shall have the right to protest taxes
either in its own name or in the name of
Landlord and Landlord shall cooperate to
whatever extent necessary to protest
said taxes, all at the sole expense of
Tenant. In contesting any such taxes,
Tenant shall obtain such bonds or take such
other action as may be necessary to
assure that liens or lien rights do not
attach to the demised premises.
5.2 Tenant shall be solely responsible and shall pay for all
personal property taxes on all personal
property, inventory and fixtures owned
by it or located in or about the demised
premises which accrue during the term
of this Lease, as well as any and all taxes
related to Tenant's business and the
operation of Tenant's business on the
demised premises.
ARTICLE VI
MAINTENANCE AND REPAIRS
6.1 Except as provided in Section 6.2, Tenant agrees that it
shall perform all repairs of whatever kind
and nature, foreseen or unforeseen,
as may be required to keep the demised
premises and fixtures thereon in good
condition and repair. Without limiting the
generality of the foregoing, Tenant
shall be responsible for all repair and
maintenance to keep the whole and every
part of the interior of the demised
premises and all property and improvements
situated therein in good repair, including
without limitation all plumbing,
heating and electrical installations and
equipment, air conditioning equipment,
hardware, doors and windows, interior
painting and decorating. In the event any
repairs are covered by insurance, the same
are to be paid for by the insurance
proceeds aforesaid.
6.2 Landlord agrees to repair and maintain, in good condition
and repair, all structural components of
the building located upon the demised
premises, including the foundation, walls
and roof. Landlord agrees to maintain
and repair the parking lot, parking lot
lighting and landscaping upon the
demised premises, including, but not
limited to, all snow and ice removal
("Common Area Maintenance") subject to
Tenant's obligation to reimburse Landlord
as provided herein. Tenant agrees to pay
its proportionate share of all Common
Area Maintenance expenses to Landlord in an
amount equal to one-twelfth (1/12)
of the annual estimate of Common Area
Maintenance expenses with the payment of
base rent on the first day of each month
throughout the term of this Lease.
Within one hundred twenty (120) days of the
end of each calendar year, Landlord
shall notify Tenant of the actual expenses
incurred for Common Area Maintenance
during the prior year. In the event the
payments made by Tenant exceed the
actual Common Area Maintenance cost, Tenant
shall be provided credit against the
following year's obligation to pay Common
Area Maintenance expenses in the
amount of the excess. In the event the
payments made by Tenant are less than the
actual Common Area Maintenance cost, Tenant
agrees to pay to Landlord the amount
of shortfall within fifteen (15) days of
Landlord's notice. Tenant's
proportionate share shall be one hundred
percent (100%) of the total Common Area
Maintenance cost provided, however, in the
event Landlord shall construct
additional retail improvements on
Landlord's real estate described on Exhibit
"A"
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attached hereto (excluding therefrom the
demised premises), then, commencing
upon the date that the occupants of said
improvements commence business
operations, Tenant's proportionate share
shall thereafter be the fraction
created by using a numerator determined by
the amount of square footage leased
by Tenant and a denominator determined by
the total square footage of the
leasable area located upon the real estate
described on Exhibit "A" attached
hereto. "Leasable space" shall mean all
interior space that is or is reasonable
capable of being leased on said real
estate.
6.3 If Tenant refuses and neglects to repair promptly the
demised premises as required in Section 6.1
hereof, in a reasonable time after
written demand by Landlord, then Landlord
may make such repairs without
liability to Tenant for any loss or damage
that may occur to Tenant's
merchandise, fixtures and/or other
property, or to the loss of business
occasioned by reason thereof, and Tenant
shall reimburse Landlord for the cost
thereof on demand.
6.4 Tenant shall not make any structural alterations,
additions or leasehold improvements to the
demised premises or make any contract
therefor without first procuring Landlord's
written consent. All alterations,
additions and/or leasehold improvements
made by Tenant to or upon the demised
premises, except removable appliances and
equipment, cases, counters, signs and
other removable trade fixtures, shall at
once when made or installed be deemed
to have attached to the freehold and to
have become the property of Landlord.
Tenant shall give Landlord five (5) days'
written notice prior to removing
removable appliances, equipment, cases,
counters, signs or trade fixtures from
the demised premises and shall be
responsible for any damages occasioned by
removal.
6.5 Any alterations made by Tenant shall be at Tenant's cost
and expense. Tenant agrees to conform to
and comply with all laws, ordinances,
rules and regulations of federal, state,
county and municipal authorities in
making such alterations or repairs, and
shall at all times keep the demised
premises free from claims of mechanics'
liens.
6.6 Landlord and its agents shall have free access to the
demised premises during all reasonable and
regular business hours for the
purpose of examining the same and to
ascertain that they are in good repair in
the presence of an agent or employee of
Tenant.
ARTICLE VII
INSURANCE AND INDEMNITY
7.1 Tenant, from the commencement of its occupancy, agrees to
indemnify and save harmless Landlord from
and against all claims of whatever
nature, except those resulting from the
negligence of Landlord or its agents,
arising from any act, omission or
negligence of Tenant, or Tenant's contractors,
agents, servants or employees, or arising
from any accident, injury or damage
whatsoever caused to any person, or to the
property of any person, occurring
during the term hereof in or about the
demised premises, or arising from any
act, injury or damage occurring outside the
demised premises, but within the
parking area adjacent to the demised
premises, or if such accident, damage or
injury results, or is claimed to have
resulted, from any act or omission of
Tenant, or its agents or employees. This
indemnity and hold
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harmless agreement shall include indemnity
against all costs, expenses, attorney
fees and/or liabilities in, or connected
with, any such claim or proceeding
brought thereon in defense thereof.
7.2 From and after the commencement date of the Lease and
throughout the residue of the term of the
Lease, Tenant shall procure and pay
for fire and extended coverage insurance,
insuring the completed building upon
the demised premises of not less than the
full replacement value thereof in a
responsible insurance company authorized to
do business in the State of Indiana.
Such insurance shall contain the so-called
Replacement Cost or Restoration
Endorsement, a provision to the effect that
the waiver of subrogation rights by
the insured does not void the coverage, and
such special endorsements as
reasonably requested by landlord. Said
insurance policies shall be issued in the
joint names of Landlord and Tenant as the
insured, and any mortgagee of
Landlord, if so requested.
7.3 Tenant shall provide and maintain during the term hereof,
for the benefit of Landlord and Tenant,
public liability and property damage
insurance in the usual form for the
protection of itself and Landlord against
injury caused to persons by reason of its
occupancy of the demised premises,
with limits of not less than TWO MILLION
DOLLARS ($2,000,000.00) per personal
injury and ONE MILLION DOLLARS
($1,000,000.00) for property damage, and, in
addition, in like amounts covering Tenant's
contractual liability under the
aforesaid hold harmless clause as provided
in Section 7.1 above.
7.4 Each insurance policy required herein shall be in a form
reasonably satisfactory to Landlord and
shall carry an endorsement that before
changing or canceling any policy the
insurance company issuing the same shall
give Landlord at least ten (10) days prior
written notice, and Tenant shall be
required to furnish Landlord with an
acceptable replacement policy before the
effective date of any such cancellation.
Duplicate originals or certificates of
all such insurance policies shall be
delivered to Landlord. The first policy
shall be issued prior to or on the
Commencement Date, and all renewals thereof
shall be issued at least ten (10) days
prior to the expiration of the then
existing policies. Each insurance policy
required herein shall be issued in the
joint names of Landlord, Tenant and
Landlord's mortgagee.
7.5 Tenant agrees that all leasehold improvements and personal
property of any type or nature owned by it,
in, on or about the demised premises
shall be at the sole risk and hazard of
Tenant. Without intending hereby to
eliminate the generality of the foregoing,
Tenant agrees that Landlord shall not
be liable or responsible for any loss of or
damage to Tenant, or anyone claiming
under or through Tenant, or otherwise,
whether caused by or resulting from any
peril required to be insured hereunder, or
from water, steam, gas, leakage,
plumbing, electricity or electrical
apparatus, pipe or apparatus of any kind,
the elements or other similar or dissimilar
causes, and whether or not
originating in the demised premises or
elsewhere, provided such damage or loss
is not the result of any intentional or
willful wrongful act of Landlord.
7.6 Whenever (a) any loss, cost, damage or expense resulting
from fire, explosion or any other casualty
or occurrence is incurred by either
of the parties to this Lease or anyone
claiming by, through or under them in
connection with the demised premises and
(b) such party is then either covered
in whole or in part by insurance with
respect to such loss, cost, damage or
expenses (or is required under this Lease
to be so insured), then the party so
insured
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(or so required) hereby releases the other
party from any liability said other
party may have on account of such loss,
cost, damage or expense to the extent of
any amount recovered by reason of such
insurance (or which could have been
recovered had insurance been carried as so
required) and waives any right of
subrogation which might otherwise exist in
or accrue to any person on account
thereof, provided that such release of
liability and waiver of the right of
subrogation shall not be operative in any
case if the effect thereof is to
invalidate such insurance coverage or
increase the cost thereof (provided that
in the case of increased cost, the other
party shall have the right, within
thirty (30) days following written notice,
to pay such increased cost thereon,
thereupon keeping such release and waiver
in full force and effect).
ARTICLE VIII
SIGNS AND ADVERTISING
8.1 Tenant may, at its expense, install signage upon the
demised premises only upon first obtaining
the written approval of Landlord.
Tenant shall maintain all signage approved
by Landlord in good order and
condition throughout the term of this
Lease. Upon termination of this Lease,
Tenant shall remove such signage and shall
be responsible for any damage
occasioned thereby. Signage by Tenant shall
comply with all applicable laws,
regulations, codes and ordinances.
ARTICLE IX
DESTRUCTION OF PREMISES
9.1 If the demised premises shall be damaged or destroyed by
any cause during the term of this Lease,
this Lease shall remain in full force
and effect and Landlord shall as rapidly
and as reasonably practical repair such
damage at its expense. Such repair or
restoration of said building by Landlord
shall be at least to the condition of the
building immediately prior to such
damage or destruction, and in accordance
with plans and specifications mutually
agreed upon at that time; or if such plans
cannot be agreed upon, then in
accordance with the original plans and
specifications. The work of restoration
or rebuilding shall be in full compliance
with all laws and regulations and
governmental ordinances applicable thereto.
All insurance proceeds received from
the fire and extended coverage insurance
shall be used and applied toward such
rebuilding and restoration, but i
