EXHIBIT 10.9
LEASE AGREEMENT
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THIS LEASE AGREEMENT ("Lease"), made this 16th day of September, 1999, by
and between XXXX X. XXXXX AND XXXXXX X. XXXXXXXX (hereinafter referred to as
"Landlord") and BAY NATIONAL CORP. (hereinafter referred to as "Tenant"),
WITNESSETH:
For and in consideration of the rent reserved, and the mutual covenants
and agreements contained in this Agreement, the parties hereto do hereby
covenant and agree as follows:
1. TERM AND RENT. Landlord does hereby rent, demise and lease unto the
Tenant the property and facilities located at the northeast corner of Market
Street and Poplar Hill Avenue, sometimes being referred to as 000 Xxxxxx Xxxx
Xxxxxx in the City of Salisbury, Wicomico County, Maryland, for a term of five
(5) years, commencing on September 1, 1999 ("Commencement Date"), through
July 31, 2004, to be occupied as and for the purposes of a commercial bank,
financial services, professional offices, any use permitted for a national bank,
a bank holding company, a subsidiary or affiliate of either or associated uses
for a rental in the amount of Twenty-Three Thousand Seven Hundred Fifty and
00/100 Dollars ($23,750.00) per year, payable in monthly installments of One
Thousand Nine Hundred Seventy-Nine and 66/100 Dollars ($1,979.66) per month,
payable on the first of each month in advance directly to Landlord at the
addresses set forth herein.
2. LEASE OPTIONS. Tenant shall have the privilege and option to extend the
term of this Lease for three (3) additional terms of five (5) years each,
commencing immediately upon the expiration of the original or previous option
term, by giving Landlord written notice not less than ninety (90) days prior to
the expiration of the original or previous option term. If exercised, the lease
option shall be upon the same terms and conditions as the initial term, except
that the rent
shall be as follows: (a) for the initial option term commencing August 1, 2004,
through July 31, 2009, rent shall be in the amount of Twenty-Seven Thousand Five
Hundred and 00/100 Dollars ($27,500.00) per year payable in monthly installments
of Two Thousand Two Hundred Ninety-One and 66/100 ($2,291.66) per month; (b) for
the second option term commencing on August 1, 2009, through July 31, 2014, rent
shall be in the amount of Thirty-One Thousand Two Hundred Fifty and 00/100
Dollars ($31,250.00) per year payable in monthly installments of Two Thousand
Six Hundred Four and 17/100 Dollars ($2,604.17) per month; and (c) for the third
option term commencing on August 1, 2014, through July 31, 2019, rent shall be
in the amount of Thirty Five Thousand and 00/100 Dollars ($35,000) per year
payable in monthly installments of Two Thousand Nine Hundred Sixteen and 67/100
Dollars ($2,916.67) per month.
3. TENANT'S USE OF PREMISES. Tenant agrees that the premises shall be used
for the uses specified in paragraph 1 of this Lease only. No other business
shall be carried on upon the premises without the express written consent of the
Landlord in advance which shall not be unreasonably withheld or delayed. Tenant
shall conduct its business and the use of the demised premises in accordance
with any and all applicable laws, regulations, and ordinances. Tenant shall not
do, suffer or permit anything to be done in or about the premises which will
contravene the policy of insurance against loss by fire or other hazard with the
premises or which will cause any increase in the fire hazard in said premises
without Landlord's written consent.
4. PROPERTY CONDITION; MAINTENANCE. Except as provided herein, by taking
possession of the property, Tenant accepts the premises "as is" and agrees
conclusively that the property is in good and tenantable condition. The Landlord
hereby represents and warrants to the Tenant that no Hazardous Substance (as
defined below) presently exists in or on the premises demised herein. The
Landlord further represents and warrants to the Tenant that no violation has
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occurred with respect to the premises demised herein of any federal, state or
local statute, ordinance, rule, regulation or other law pertaining to Hazardous
Substances, and that there is no action or proceeding pending before or
appealable from any court, quasi-judicial body or administrative agencies
relating to Hazardous Substances affecting or alleged to be affecting the
premises. Landlord agrees to hold harmless, indemnify and defend the Tenant and
its assignees from and against any claim, demand, penalty, fee, lien, damage,
loss, expense or liability from a third party resulting from (i) any breach of
the representations or warranties made by it in this Paragraph 4, including
reasonable attorney's fees and costs of, or in preparation for, any trial or
appellate review, and (ii) any actual Hazardous Substance contamination,
including the clean-up of Hazardous Substances from the premises demised herein
not caused by any action of Tenant which directly or indirectly results in the
premises or any other property being contaminated with Hazardous Substances. In
the event that there is any actual Hazardous Substance contamination as
described above, Landlord shall have the option to: (1) remove any Hazardous
Substances in the premises demised herein at its sole cost and expense or (2) if
the cost of the aforesaid removal exceeds 50% of the value of the premises
demised herein, terminate this Lease and upon the termination date, pay to
Tenant the then book value of all improvements made by tenant and reasonable
moving expenses. If the cost of the aforesaid removal does not exceed 50% of the
value of the premises demised herein, Landlord shall, as set forth herein,
remove any Hazardous substances . In the event Landlord exercises the option in
this Paragraph 4 to terminate this Lease, all indemnification referenced in this
Lease and any extensions and/or modifications thereof shall survive the
termination of this Lease and shall continue to inure to the benefit of the
Tenant, notwithstanding any assignment of its other rights hereunder. As used
herein, "Hazardous Substance" shall mean any hazardous, toxic or dangerous
substances, waste or material that is or
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may become regulated under any federal, state or local statute, ordinance, rule,
regulation or other law now or hereafter in effect pertaining to environmental
protection, contamination or clean-up, including, without limitation, the
Comprehensive Environment Response. Compensation and Liability Act (42 U.S.C.
ss.ss.9601 et seq.), the Superfund Amendments and Reauthorization Act of 1986
(42 U.S.C. ss.9601(20)(D)), the Resource Conservation and Recovery Act (42
U.S.C. ss.ss.6901 et seq.), the Federal Water Pollution Control Act as amended
by the Clean Water Act of 1977 (33 U.S.C. ss.ss.1251 et seq.) and the Clean Air
Act of 1966 (42 U.S.C. ss.ss.7401 et seq.), and the Toxic Substances Control Act
(15 U.S.C. ss.2601 et seq.). Tenant shall take good care of the property,
maintain the same in its condition when delivered, except for additions and
improvements made by Tenant as Tenant deemed necessary, and suffer no waste,
keep the plumbing works, pipes, fixtures and other interior and exterior
facilities therein in good repair, and at the expiration of occupancy, deliver
up the premises in good order and condition, natural wear and tear only
excepted. Landlord represents and warrants that all mechanical systems are in
good working condition as of the Commencement Date of this Lease. All
alterations, additions and improvements (except for trade fixtures put in at the
expense of Tenant, which may be removed by Tenant at the end of the term,
provided same may be removed without damage to the demised premises) shall be at
the sole cost and expense of Tenant, but shall become the property of Landlord
and shall remain upon and be surrendered with the premises as a part thereof at
the termination of this Lease.
5. UTILITIES. Tenant shall arrange for and pay for any and all utility
services to the premises, including without limitation, all costs of heating and
air-conditioning, gas, electric, water and sewer, telephone, cable television
and other like charges and fees for public utility services. In addition, Tenant
agrees to pay the maintenance and repair costs during the term of this
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Lease and any extension hereof in respect to the heating, air-conditioning,
interior lighting equipment or other systems of said building. If during such
term any of such equipment requires replacement, Tenant shall bear the cost of
such replacement, except that if such equipment requires replacement within
twelve (12) months of the end of the original term or any additional term and
Tenant at such time notifies Landlord that it will not exercise any options to
renew or if the Lease is in its final option period, Landlord shall reimburse
Tenant 75% of any replacement cost. In the event that Tenant replaces any such
equipment within twelve (12) months of the end of the original term or any
additional term and Tenant provides the above-referenced notice to Landlord,
Tenant shall inform Landlord of the cost and description of the equipment being
replaced prior to making such replacement.
6. TAXES AND CASUALTY INSURANCE. Tenant agrees to pay as they shall become
due and payable all real estate taxes, and any other public or recorded charges
against the demised premises or against Landlord in connection with the demised
premises which come due or attach during the term of this Lease. Landlord hereby
gives Tenant the authority to proceed in its name to contest or challenge the
imposition or amount of any real estate taxes or any other public or recorded
charges against the demised premises. Landlord shall property execute and/or
provide any documentation required by Tenant in such challenge. In addition,
Tenant shall pay any and all fire or other casualty insurance premiums on the
demised premises, such insurance policies to be adequate in amount to insure the
value of the demised premises and duly endorsed to protect Landlord's interest
in the demised premises. In the event that Tenant fails to procure said
insurance or to maintain same in force, Landlord shall have the right to obtain
such insurance in the place of Tenant and to add the costs or premium thereof to
the amounts otherwise owing under this Lease as additional rent hereunder.
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7. TENANT'S LIABILITY INSURANCE. Tenant agrees to insure, for its
protection and for the protection of the Landlord, against public liability from
the use and operation of the demised premises by obtaining and maintaining
during the term of this Lease coverage of not less than $1,000,000 single limit,
"all risks" liability policy and to maintain Landlord as a named insured thereon
at all times; and Tenant agrees to furnish Landlord suitable certificates of
such insurance coverage; and in the event that the Tenant fails to procure said
insurance or to maintain same in force, Landlord shall have the right to obtain
such insurance in the place of Tenant and to add the cost or premium thereof to
the amounts otherwise owing under this Lease as additional rent hereunder.
8. INDEMNIFICATION. Tenant agrees to defend and hold harmless the Landlord
from any liability for damages to any personal property in or upon the said
demised premises, including the property of the Tenant and employees and all
persons in or upon the said demised premises at the invitation or with the
consent of the Tenant; provided however, that this indemnification shall not be
applicable in the event of damages caused by or as a result of the negligence,
acts or omission of Landlord, its agents, servants, employees or contractors. It
is mutually agreed by the parties hereto that all property kept, stored or
maintained in or upon the said demised premises shall be so kept, stored or
maintained at the sole risk of the Tenant. The Tenant agrees not to suffer or
give cause for the filing of any lien against the demised premises by any person
for any reason whatsoever.
9. DAMAGE AND DESTRUCTION. If the building containing the demised premises
should be destroyed by fire, earthquake, act of God, or the elements during the
term of this Lease Agreement, or damaged to such an extent that it cannot be
repaired within thirty (30) working days at the option of Landlord to be
exercised within thirty (30) days after such damage or destruction,
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this Lease Agreement shall terminate, and the rental shall xxxxx from and after
the date of destruction or damage. If, however, the building is only partially
destroyed by any of the above causes and the damage to the building can be
repaired within the 30-day period, Landlord shall, with all reasonable dispatch,
proceed to repair the building and place it substantially in the same condition
as it was prior to the damage. Tenant shall pay rent to Landlord for the damaged
premises if, and to the extent that, they are fit for occupancy during the time
of repair. If the demised premises are not fit for occupancy during the time of
repair, then the rental shall xxxxx during such time.
10. ASSIGNMENT AND SUBLETTING. Except as provided herein, Tenant shall not
assign or sublet this Agreement without the prior written consent of the
Landlord which will not be unreasonably withheld or delayed. Tenant shall have
the right to assign or sublet this Lease to any of its subsidiaries or
affiliates.
11. SIGNS. Tenant shall be entitled to place, at Tenant's expense, a sign
or signs (the size, design, placement, and configuration of which shall be
subject to Landlord's approval which shall not be unreasonably withheld or
delayed) on the demised premises. Any such signs or other advertising material
placed by Tenant on any part of the demised premises shall comply with any and
all applicable laws, ordinances and regulations.
12. ALTERATIONS. Any construction, alterations, additions, improvements or
modifications, both interior and exterior, to the demised premises must first be
approved by the Landlord in writing which shall not be unreasonably withheld or
delayed.
13. PLATE GLASS. Tenant, and not Landlord, shall be fully responsible for
the replacement of any broken plate glass during the term of this Lease.
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14. LANDLORD'S RIGHT OF ENTRY. Landlord shall have the right to enter the
demised premises during reasonable business hours for the purpose of inspection
upon reasonable advance notice to Tenant.
15. NOT A PARTNERSHIP. Notwithstanding any provision hereof, this Lease
and the tenancy hereby created do not and shall not create a partnership or
joint venture between Landlord and Tenant. Both parties hereby expressly deny
any intent to form any joint venture or partnership between them.
16. DEFAULT; REMEDIES. In case of default by Tenant in the payment of rent
or in any of the covenants herein, the Landlord may at its discretion and in
addition to any other remedies at law or in equity, at once, without notice to
the Tenant or to any other person, declare the lease forfeited; and thereupon,
unless Tenant shall have completely cured the default, this Lease shall
terminate and Landlord's agent or attorney shall have the right, without notice
or demand, to re-enter and remove all persons and Tenant's property therefrom
without being deemed guilty of any manner of trespass. Upon termination,
Landlord shall make reasonable efforts to relet the demised premises which
efforts are defined in this Paragraph 16 as listing the demised premises with a
local real estate broker with expertise in commercial real estate. Any financial
liability of Tenant to Landlord that exists shall be offset by the collection of
rent in the aforesaid reletting. Tenant expressly waives the service of any
notice of intention to terminate this Lease or to re-enter said premises. If on
account of the default by Tenant of any of the obligations hereunder it shall
become necessary for Landlord to employ an attorney to enforce or defend any of
Landlord's rights or remedies hereunder, then, in any event, Tenant shall be
liable, over and above any amount otherwise owing unto Landlord, for any
reasonable amount incurred by Landlord as attorney's fees.
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17. QUIET ENJOYMENT. Tenant may have and quietly enjoy the demised
premises during the term of this Lease provided Tenant complies with the
provisions of this Lease Agreement.
18. ADDRESSES AND NOTICES. The monthly installments of rent shall be
divided equally and paid by separate checks to Landlord at the following
addresses: one-half (1/2) to Landlord Xxxxx at his address at 000 Xxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000; and the other one-half (1/2) to Landlord Xxxxxxxx at
his address at 000 Xxxxx Xxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000. All notices from
Tenant to Landlord required or permitted by any provision of this Lease
Agreement shall be directed to each Landlord at the same addresses. All notices
from Landlord to Tenant so required or permitted shall be directed to Tenant, at
the following address: 000 Xxxxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000. Any
party to this Lease Agreement (including either of the parties comprising of the
State Landlord) may, at any time or from time to time, designate in writing a
substitute address for that above set forth, and thereafter rent installments
and/or notices shall be directed to such substitute address.
19. MISCELLANEOUS.
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A. Time is of the essence.
B. This Lease Agreement shall be interpreted and enforced in
accordance with the law of the State of Maryland.
C. The captions or headings herein are included for ease of
reference only and shall not be construed to limit or restrict any provision or
term hereof.
D. This Lease shall not be amended or modified except by the written
agreement of the parties executed with the same formalities as this original.
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E. This Lease Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective personal representatives or
successors and assigns.
20. RIGHT TO PURCHASE. During the term of this Lease or any renewals
thereof, upon receipt by Landlord of any bona fide offer ("Offer") to purchase
the premises demised herein and Landlord's acceptance thereof subject to this
Paragraph 20, Tenant shall have the right to purchase the premises on the same
terms and conditions contained in the Offer, with the exception of the date of
closing. Tenant shall have fifteen (15) days from the date it receives a copy of
any Offer or contract received by Landlord regarding a sale of the premises to
notify Landlord whether it will purchase the premises. If Tenant does notify
Landlord of its desire to purchase the premises, it will close such purchase
within forty-five (45) days of sending such notice to Landlord.
IN WITNESS WHEREOF the parties hereto have set their hands and seals the
day and year first above written.
WITNESS:
/s/ Xxxx X. Xxxxx (SEAL)
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Xxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxxxx (SEAL)
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Xxxxxx X. Xxxxxxxx
- LANDLORD -
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ATTEST:
BAY NATIONAL CORP.
By: /s/ Xxxx X. Xxxxxx (SEAL)
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Xxxx X. Xxxxxx, President
- TENANT-
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