|
Exhibit 10.39
--------------------------------------------------------------------------------
AGREEMENT OF LEASE
WITH PURCHASE OPTION
(HEREIN REFERRED TO AS THE "AGREEMENT")
--------------------------------------------------------------------------------
Dated: __________________________
CONJOE REALTY CO., INC.
a New Jersey Corporation
c/o Robert Papandrea, Vice President
54 DOCK WATCH HOLLOW
WARREN, NEW JERSEY 07059,
AS LANDLORD/SELLER
AND
RONALD FRIGERIO, as agent for
THE TOWN BANK OF WESTFIELD, In Organization
115 EAST GROVE STREET
WESTFIELD, NEW JERSEY 07091
AS TENANT/PURCHASER
FRIERI & CONROY
777 WALNUT AVENUE
CRANFORD, NEW JERSEY 07016
(908) 653-1441
<PAGE>
TABLE OF CONTENTS
SECTION 1. THE
LEASE........................................................1
SECTION 2.
USE..............................................................1
SECTION 3. LEASE
COMMENCEMENT...............................................1
SECTION 4. PRE-COMMENCEMENT
EXPENSES........................................1
SECTION 5.
TERM.............................................................2
SECTION 6. RENT COMMENCEMENT
DATE...........................................2
SECTION 7.
RENT.............................................................2
SECTION 8. FIRST OPTION TO
RENEW............................................2
SECTION 9. SECOND OPTION TO
RENEW...........................................3
SECTION 10. THIRD OPTION TO
RENEW............................................3
SECTION 11. TENANT/PURCHASER
FIT-UP..........................................3
SECTION 12.
SECURITY.........................................................4
SECTION 13.
TAXES............................................................4
SECTION 14.
UTILITIES........................................................4
SECTION 15. REPAIRS MAINTENANCE AND
REPLACEMENTS.............................5
SECTION 16. COMPLIANCE WITH
LAWS.............................................5
SECTION 17. ALTERATIONS AND
IMPROVEMENTS.....................................5
SECTION 18.
INSURANCE........................................................5
SECTION 19.
INDEMNITY........................................................6
SECTION 20. FIRE AND OTHER
CASUALTY..........................................6
SECTION 21.
CONDEMNATION.....................................................6
SECTION 22. ASSIGNMENT AND
SUBLETTING........................................7
SECTION 23. LANDLORD/SELLER'S RIGHT OF
ACCESS................................7
SECTION 24. SUBORDINATION TO MORTGAGES. NONDISTURBANCE BY
MORTGAGEE..........8
SECTION 25. CERTIFICATE OF LEASE
STATUS......................................8
SECTION 26.
SIGNS............................................................8
SECTION 27. NON-LIABILITY OF
LANDLORD/SELLER.................................8
<PAGE>
SECTION 28. CONSTRUCTION LIEN
CLAIMS.........................................8
SECTION 29. LANDLORD/SELLER'S RIGHT TO
CURE..................................8
SECTION 30. HOLDING
OVER.....................................................9
SECTION 31. ENVIRONMENTAL
MATTERS............................................9
SECTION 32.
DEFAULT.........................................................10
SECTION 33. FORCE
MAJEURE...................................................11
SECTION 34. WAIVER OF
SUBROGATION...........................................11
SECTION 35.
BROKERAGE.......................................................11
SECTION 36. QUIET
ENJOYMENT.................................................11
SECTION 37. LEASE SCHEDULES AND
EXHIBITS....................................11
SECTION 38. RECORDATION OF
LEASE............................................11
SECTION 39.
NOTICES.........................................................12
SECTION 40. BINDING
EFFECT..................................................12
SECTION 41. APPLICABLE
LAW..................................................12
SECTION 42. REMOVAL OF TENANT/PURCHASER'S
PROPERTY..........................12
SECTION 43. SUMS DEEMED ADDITIONAL
RENT.....................................13
SECTION 44. PURCHASE
OPTION.................................................13
SECTION 45. FIRST RIGHT OF
REFUSAL..........................................13
SECTION 46. EARLY
TERMINATION...............................................14
SECTION 47. VALIDITY OF LEASE/AUTHORITY TO
LEASE............................14
SECTION 48. ENTIRE
AGREEMENT................................................14
<PAGE>
SECTION 1. THE LEASE
Landlord/Seller hereby leases to Tenant/Purchaser and
Tenant/Purchaser
hereby rents from Landlord/Seller the entire property located at
520 South
Avenue West, Westfield, New Jersey, also known as Lot 20, Block
2510 on the tax
map of the Township of Westfield and as more particularly
described in Exhibit
A, which is annexed hereto and hereinafter referred to as the
"Premises". It is
understood and agreed that, subject to the Tenant/Purchaser's
right of purchase
and first refusal as hereinafter defined, the Premises may be
conveyed by the
Landlord/Seller to another person or entity. Upon such
conveyance, the third
party shall take title subject to and such transferee shall
recognize the
Tenant/Purchaser's tenancy hereunder and the terms and
provisions of this Lease.
It is further understood and agreed that Tenant/Purchaser is in
the
process of forming, with the requisite approval of the New
Jersey Department of
Banking and the Federal Deposit Insurance Corporation, a New
Jersey commercial
banking corporation, the charter application for which is soon
to be filed, to
be named "The Town Bank of Westfield" or such substitute name as
may be required
by the New Jersey Commissioner of Banking (the "Bank"). Upon the
charter being
duly issued by the New Jersey Department of Banking and the Bank
becoming duly
qualified to do a banking business in New Jersey,
Tenant/Purchaser shall assign
this Lease to the Bank and upon the Bank's assuming each and
every obligation of
Tenant/Purchaser under this Lease, Landlord/Seller shall
release
Tenant/Purchaser from any further Lease obligations and there
shall be no
further liability to Tenant/Purchaser thereafter.
SECTION 2. USE
The Tenant/Purchaser may use and occupy the Premises as a
commercial
banking office. The Tenant/Purchaser's use of the Premises is
expressly made
subject to the provisions of Section 31 of this Lease. In
addition to the
limitations set forth in the aforesaid Section 31, the
Tenant/Purchaser shall
not use or occupy nor knowingly permit the Premises or any part
thereof to be
used or occupied for any unlawful business use or purpose or for
any purpose or
in any manner which is in violation of any present or future
governmental laws
or regulations. The Tenant/Purchaser shall save harmless and
indemnify the
Landlord/Seller from and against all costs, expenses,
liabilities, losses,
damages, injunctions, suits, fines, penalties, claims, and
demands, arising out
of Tenant/Purchaser's own negligence, except if the
Landlord/Seller shall be
compensated therefore by recovery under fire or extended
coverage insurance.
SECTION 3. LEASE COMMENCEMENT
The Lease Commencement Date shall be upon, or before at
Tenant/Purchaser's
option, issuance of the Certificate of Authority from the New
Jersey Department
of Banking (hereafter the "COA"), currently anticipated in
February, 1998.
SECTION 4. PRE-COMMENCEMENT EXPENSES
Tenant/Purchaser agrees to begin payment of all real estate
taxes that
come due on the Premises upon execution of this Lease by both
parties.
Tenant/Purchaser shall pay all real estate taxes to the
Landlord/Seller on a
monthly pro-rata basis in arrears. At the time of execution of
this Lease, the
monthly payment is approximately $1,497.00. All pre-commencement
expenses shall
cease to be paid by Tenant/Purchaser upon the happening of any
of the following
events:
A. the denial of the COA; or
B. the Tenant/Purchaser failing to obtain final site plan
approval on or before February 1, 1998 from the Westfield
Planning Board for the use of the Premises as a bank with
drive-up facilities in accordance with the plans submitted
by
Tenant/Purchaser to the Westfield Planning Board; or
C. the Tenant/Purchaser failing to obtain approval for the
curb
cut in the driveway for entrance to the drive-up facility as
shown on the plans submitted to the Westfield Planning Board
and the New Jersey Department of Transportation; or
1
<PAGE>
D. the receipt of an unsatisfactory engineering inspection
report
of the condition of the Premises within 21 days from the
execution of this Agreement. An unsatisfactory report shall
be
a report that the Tenant/Purchaser deems unsatisfactory in
its
sole and absolute discretion.
E. Rent Commencement as hereafter defined.
Upon the occurance of sub-part A, B, C, D or E herein,
Tenant/Purchaser
will stop payment of real estate taxes as pre-commencement
expenses and all
rights under this Lease and Purchase Option shall terminate.
SECTION 5. TERM
The Lease term shall be five (5) years beginning from the
Rent
Commencement Date (the "Initial Term") as hereafter defined with
three (3) five
year fixed rent renewal options as defined and set forth
hereafter.
SECTION 6. RENT COMMENCEMENT DATE
Tenant/Purchaser shall begin the payment of Rent as hereafter
set forth
exactly ninety (90) days after issuance of the COA to the Bank
or upon the Bank
opening for business, whichever first occurs. In no event,
however, shall Rent
Commencement be later than May 1, 1998. In the event that Rent
Commencement
begins on a day other than the first day of the month, rent for
that month will
be prorated for the number of days remaining in that month.
SECTION 7. RENT
Rent during the Initial Term shall, for a period of five (5)
years, be as
follows:
Lease Year Annual Monthly
---------- ------ -------
1 $24,000.00 $2,000.00
2-5 $54,000.00 $4,500.00
The Tenant/Purchaser covenants and agrees to pay the
Landlord/Seller as a
total base rent for the Premises, without set-off or deduction
of any kind, the
sum of TWO HUNDRED FORTY THOUSAND ($240,000.00) DOLLARS, payable
by the 15th day
of each calendar month in accordance with the above monthly
installments as
noted herein for the entire Initial Term.
SECTION 8. FIRST OPTION TO RENEW
Provided Tenant/Purchaser is not at the time of exercise and,
prior to the
expiration of the applicable Lease term will not be in default
under this Lease
and has not been in default of the Lease during the expiring
Term,
Tenant/Purchaser shall have an option to renew this Lease for a
renewal term of
five (5) years. This option may be exercised only by
Tenant/Purchaser upon
written notice to Landlord/Seller not less than six (6) months
prior to the
expiration of the initial Term. The terms and conditions of the
first renewal
term of the exercised option shall be the same as those in this
Lease except
only as hereinafter provided.
Rent during the first renewal term shall be as follows
Lease Year Annual Monthly
---------- ------ -------
6-10 $70,000.00 $5,833.00
The Tenant/Purchaser covenants and agrees to pay the
Landlord/Seller as a
total base rent for the Premises, without set-off or deduction
of any kind, the
sum of THREE HUNDRED FIFTY THOUSAND ($350,000.00)
2
<PAGE>
DOLLARS, payable by the 15th day of each calendar month in equal
installments as
noted herein for the entire First Renewal Term.
SECTION 9. SECOND OPTION TO RENEW
Provided Tenant/Purchaser is not at the time of exercise and,
prior to the
expiration of the applicable Lease term will not be in default
under this Lease
and has not been in default of the Lease during the expiring
Term,
Tenant/Purchaser shall have an option to renew this Lease for a
renewal term of
five (5) years. This option may be exercised only by
Tenant/Purchaser upon
written notice to Landlord/Seller not less than six (6) months
prior to the
expiration of the First Renewal Term. The terms and conditions
of the second
renewal term of the exercised option shall be the same as those
in this Lease
except only as hereinafter provided.
Rent during the second renewal term shall be as follows
Lease Year Annual Monthly
---------- ------ -------
11-15 $80,000.00 $6,667.00
The Tenant/Purchaser covenants and agrees to pay the
Landlord/Seller as a
total base rent for the Premises, without set-off or deduction
of any kind, the
sum of FOUR HUNDRED THOUSAND ($400,000.00) DOLLARS, payable in
equal monthly
installments as noted herein for the entire Second Renewal
Term.
SECTION 10. THIRD OPTION TO RENEW
Provided Tenant/Purchaser is not at the time of exercise and,
prior to the
expiration of the applicable Lease term will not be in default
under this Lease
and has not been in default of the Lease during the expiring
Term,
Tenant/Purchaser shall have an option to renew this Lease for a
renewal term of
five (5) years. This option may be exercised only by
Tenant/Purchaser upon
written notice to Landlord/Seller not less than six (6) months
prior to the
expiration of the Second Renewal Term. The terms and conditions
of the third
renewal term of the exercised option shall be the same as those
in this Lease
except only as hereinafter provided.
Rent during the third renewal term shall be as follows
Lease Year Annual Monthly
---------- ------ -------
16-20 $90,000.00 $7,500.00
The Tenant/Purchaser covenants and agrees to pay the
Landlord/Seller as a
total base rent for the Premises, without set-off or deduction
of any kind, the
sum of FOUR HUNDRED FIFTY THOUSAND ($450,000.00) DOLLARS,
payable in equal
monthly installments as noted herein for the entire Third
Renewal Term.
SECTION 11. TENANT/PURCHASER FIT-UP
After signing the Lease and depositing the rent security,
Tenant/Purchaser
may commence its fit-up work required to convert the Premises
into a commercial
bank location with drive-in facility. This work, at the sole
cost and expense of
Tenant/Purchaser, shall be performed in accordance with
architect plans and
specifications as approved by Tenant/Purchaser and the Township
of Westfield
including all appeal periods. Prior to application being made to
the Township of
Westfield for approval, Landlord/Seller shall be given a set of
the plans for
review and informational purposes only. Landlord/Seller shall
cooperate with
Tenant/Purchaser in making all appropriate and necessary
applications to convert
Premises as set forth herein including execution of owners
consent as may be
required by the Westfield Planning Board or any other
appropriate agency.
Insurance certificates and a hold harmless agreement shall be
required of any
general contractor employed by Tenant/Purchaser to complete the
renovations to
the Premises. Said certificates and hold harmless agreement
shall be in place
prior to work commencing.
3
<PAGE>
SECTION 12. SECURITY
Simultaneous with the Rent Commencement Date Tenant/Purchaser
shall
deposit the sum of FOUR THOUSAND ($4,000.00) DOLLARS with the
Landlord/Seller,
as security for the full and faithful performance by the
Tenant/Purchaser of
each and every term, covenant, and condition of this Lease. In
the event that
the Tenant/Purchaser shall default in respect of any of the
terms, provisions,
covenants, and conditions of this Lease, including but not
limited to payment of
any rent, the Landlord/Seller may use, apply, or retain the
whole or any part of
the security so deposited for the payment of any such rent in
default or for any
other sum which the Landlord/Seller shall expend by reason of
Tenant/Purchaser's
default, including any damages or deficiency in the reletting of
the Premises,
whether such damages or deficiency shall accrue before or after
summary
proceedings or other re-entry by the Landlord/Seller.
Tenant/Purchaser shall pay to Landlord/Seller on demand the
amount so
applied in order to restore the security to its original amount.
In the event
that the Tenant/Purchaser shall fully and faithfully comply with
all the terms,
provisions, covenants, and conditions of this Lease, the
security or any balance
thereof shall be returned to the Tenant/Purchaser after the time
fixed as the
expiration of this Lease or any renewals thereof. In the absence
of evidence
satisfactory to the Landlord/Seller of any assignment of the
right to receive
the security, or the remaining balance thereof, the
Landlord/Seller may return
the security to the original Tenant/Purchaser, regardless of one
or more
assignments of the Lease itself. This provision, however, shall
not be construed
as a consent by the Landlord/Seller to any such assignment.
In the event of a bona fide sale of the Premises to a third
party, the
Landlord/Seller shall have the right to transfer the security to
the vendee for
the benefit of the Tenant/Purchaser, and the Landlord/Seller
shall be considered
released by the Tenant/Purchaser from all liability for the
return of such
security, and the Tenant/Purchaser agrees to look to the new
Landlord/Seller
solely for the return of the security, and it is agreed that
this shall apply to
every transfer or assignment made of the security to a new
Landlord/Seller.
Prior to any such transfer of security, the Landlord/Seller
shall have given the
Tenant/Purchaser written notice thereof and the transferee shall
have assumed
the responsibilities relating thereto, as herein contained, in
writing.
The security deposit under this Lease shall not be assigned or
encumbered
by the Tenant/Purchaser without the written consent of the
Landlord/Seller.
In the event the Federal Deposit Insurance Corporation
(hereafter the
"FDIC"), by statute or published regulation, requires the
treatment of the
security different from that herein provided, the applicable
FDIC required
procedure will be adhered to by the parties.
SECTION 13. TAXES
Tenant/Purchaser shall be responsible for all real estate taxes
beginning
on the Rent Commencement Date. Tenant/Purchaser shall make all
tax payments
quarterly when due directly to the Township of Westfield.
Landlord/Purchaser
shall provide Tenant/Purchaser a copy of the annual tax bill
immediately upon
receipt of same. However, Tenant/Purchaser's agreement to pay
the real estate
taxes is expressly contingent upon the full cooperation of the
Landlord/Seller
with the Tenant/Purchaser in the event that Tenant/Purchaser
shall choose to
file a tax appeal with the appropriate authorities at any time
during the term
of this Lease.
SECTION 14. UTILITIES
Tenant/Purchaser shall make arrangements directly with the
suppliers of
electricity, gas and water to have these utility bills put in
Tenant/Purchaser's
name and shall promptly pay all bills for such services directly
to the
suppliers of such services.
Tenant/Purchaser shall furnish heat, cooling and all other
services
Tenant/Purchaser may deem necessary or desirable in connection
with its
occupancy of the Premises at Tenant/Purchaser's sole cost and
expense.
4
<PAGE>
SECTION 15. REPAIRS MAINTENANCE AND REPLACEMENTS
Throughout the term of this Lease, the Tenant/Purchaser shall,
at its sole
cost and expense, maintain and keep the Premises (including
sidewalks, parking,
entrance and exitways) in as good order and repair as at the
Lease Commencement
Date, ordinary wear and tear excepted and shall make any and all
replacements
required for this purpose. The Tenant/Purchaser shall promptly
perform, or cause
to be performed, all required repairs to the Premises. These
obligations include
but are not limited to snow removal, paving, painting, HVAC,
electric, plumbing,
roof repairs and glass.
SECTION 16. COMPLIANCE WITH LAWS
The Tenant/Purchaser shall comply with any law, ordinance, and
regulation,
whether federal, state, county, or municipal, as well as rules
and regulations
adopted by the Landlord/Seller for the building of which the
Premises is a part,
applicable to the Premises, relating to use or occupancy thereof
or, to the
making of repairs, changes, alterations, or improvements,
ordinary or
extraordinary, seen or unforeseen, including but not limited to
the performance
of any duty imposed upon the Landlord/Seller or Tenant/Purchaser
in respect of
the sidewalks or curbs adjacent to the Leased Property. The
Tenant/Purchaser
shall comply with any and all rules and regulations applicable
to the Premises
issued by the Board of Fire Underwriters, or by any other body
hereinafter
constituted exercising similar functions, and by insurance
companies writing
policies covering the Premises which now or hereafter may become
applicable to
the Premises. The Tenant/Purchaser shall pay all costs,
expenses, claims, fines,
penalties, and damages that may be imposed because of the
Tenant/Purchaser's
negligence and the Tenant/Purchaser's use of the Premises, and
shall save
harmless and indemnify the Landlord/Seller from and against any
and all
liability arising from such noncompliance. The Landlord/Seller
and the
Tenant/Purchaser shall each promptly give notice to the other of
any notice of
violation received by them. Without diminishing the obligation
of the
Tenant/Purchaser, if the Tenant/Purchaser shall at any time fail
to comply as
expeditiously as reasonably feasible with any law, ordinance,
rule, or
regulation concerning or affecting the Premises, or the use and
occupancy
thereof, and, if a stay is necessary with respect to such
compliance, shall have
failed to obtain such stay, then the Landlord/Seller after
fifteen (15) days
prior written notice to the Tenant/Purchaser may so comply. The
Tenant/Purchaser
shall have the right to contest by appropriate legal proceedings
in the name of
the Tenant/Purchaser or the Landlord/Seller, or both, without
cost or expense to
the Landlord/Seller, the validity or application of any such
law, ordinance,
rule, or requirement and the Landlord/Seller shall cooperate
with the
Tenant/Purchaser and will execute and deliver any appropriate
papers which may
be necessary to permit the Tenant/Purchaser to contest the
validity or
application thereof.
SECTION 17. ALTERATIONS AND IMPROVEMENTS
Except for those alterations, improvements and demolition set
forth in the
plans and specifications provided to the Township of Westfield
Planning Board
that form the basis of the ultimate building permit application,
no alterations,
additions, or improvements shall be made, and no climate
regulating, air
conditioning, cooling, heating or sprinkler systems, television
or radio
antennas, heavy equipment, apparatus and fixtures, shall be
installed in or
attached to the Premises, without the written consent of the
Landlord/Seller,
which shall not be unreasonably withheld or delayed. All such
alterations and
improvements shall be made in a good and workmanlike manner.
Unless otherwise
provided for herein, all such alterations, additions, or
improvements and
systems, when made, installed in or attached to the Premises,
shall belong to
and became the property of the Landlord/Seller and shall be
surrendered with the
Premises and as part thereof upon the expiration or sooner
termination of this
Lease, without hindrance, molestation or injury. Nothing
contained herein shall
prevent future alterations by the Tenant/Purchaser as deemed
necessary by said
Tenant/Purchaser.
SECTION 18. INSURANCE
18.1. Liability Insurance. Effective on the Lease Commencement
Date, or
such earlier date as Tenant/Purchaser may enter the Premises or
perform any work
therein, the Tenant/Purchaser shall be required to maintain, at
its sole cost
and expense, comprehensive public liability insurance in minimum
single limit of
$2,000,000.00 per occurrence. The policies of insurance
hereunder shall provide
that they shall not be cancelable without thirty (30) days'
written notice to
the Landlord/Seller and the Tenant/Purchaser from insurer except
in the event of
nonpayment in which case notice of cancellation shall be ten
(10) days. All
insurance shall be issued by
5
<PAGE>
reputable insurers licensed to do business in the State of New
Jersey. Each
policy shall name Landlord/Seller and any mortgagee, if
required, as an
additional assured. Evidence shall be furnished to the
Landlord/Seller by the
Tenant/Purchaser at all times during the Lease term, indicating
that all
required premiums for insurance hereunder have been paid and
that such coverage
is in effect. A certificate setting forth the scope of coverage
and policy
limits for each required policy hereunder shall be furnished to
the
Landlord/Seller by the Tenant/Purchaser and at all times
maintained on file at
the Landlord/Seller's office.
18.2. All Risk Insurance. Effective on the Lease Commencement
Date
Tenant/Purchaser shall provide property insurance coverage on
the Premises for
100% of the total replacement cost of the building.
SECTION 19. INDEMNITY
Except to the extent that the Landlord/Seller shall receive
compensation from
insurance proceeds, the Tenant/Purchaser shall save harmless and
indemnify the
Landlord/Seller from and against any and all liability,
penalties, damages,
expenses, and judgments by reason of any injury or claim or
injury to person or
property, of any nature, arising out of
| 
