U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from _____________ to _______________
Commission file number O-21021
Enterprise Bancorp, Inc.
(Exact name of small business issuer as specified in its charter)
Massachusetts 04-3308902
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
222 Merrimack Street, Lowell, Massachusetts, 01852
(Address of principal executive offices)
(508) 459-9000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes .......... No X
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: August 31, 1996, Common Stock - Par
Value $0.01 1,576,017 shares outstanding
Transitional Small Business Disclosure Format (check one): Yes .......... No X
<PAGE>
ENTERPRISE BANCORP, INC.
INDEX
Page Number
Cover Page 1
Index 2 & 3
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
Enterprise Bancorp, Inc.
Balance Sheet - June 30, 1996 4
Statement of Income -
February 29, 1996, through June 30, 1996 5
Statement of Cash Flows -
February 29, 1996, through June 30, 1996 6
Notes to Financial Statements 7
Enterprise Bank and Trust Company
Balance Sheets -
June 30, 1996 and 1995, December 31, 1995 9
Statements of Income -
Three months and six months ended June 30, 1996
and 1995 10
Statements of Changes in Stockholders' Equity
Twelve months ended December 31, 1995,
and six months ended June 30, 1996 11
Statement of Cash Flows -
Six months ended June 30, 1996 and 1995 12
Notes to Financial Statements 13
Item 2 Business Review and Management's Discussion and
Analysis of Financial Condition and Results of Operations 14
2
<PAGE>
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 28
Item 2 Changes in Securities 28
Item 3 Defaults upon Senior Securities 28
Item 4 Submission of Matters to a Vote of Security Holders 28
Item 5 Other Information 29
Item 6 Exhibits and Reports on Form 8-K 29 & 30
Signature Page 31
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain "forward-looking statements" including statements
concerning plans, objectives, future events or performance and assumptions and
other statements which are other than statements of historical fact. Enterprise
Bancorp, Inc. (the "company") wishes to caution readers that the following
important factors, among others, may have affected and could in the future
affect the company's results and could cause the company's results for
subsequent periods to differ materially from those expressed in any
forward-looking statement made herein: (i) the effect of changes in laws and
regulations, including federal and state banking laws and regulations, with
which the company or its subsidiaries must comply, and the associated costs of
compliance with such laws and regulations either currently or in the future as
applicable; (ii) the effect of changes in accounting policies and practices, as
may be adopted by the regulatory agencies as well as by the Financial Accounting
Standards Board, or of changes in the company's organization, compensation and
benefit plans; (iii) the effect on the company's competitive position within its
market area of the increasing competition from larger regional and out-of-state
banking organizations as well as nonbank providers of various financial
services; (iv) the effect of unforseen changes in interest rates; and (v) the
effect of changes in the business cycle and downturns in the local, regional or
national economies.
3
<PAGE>
ENTERPRISE BANCORP, INC.
Balance Sheet
June 30,1996
------------
ASSETS: (unaudited)
Cash -
------
Total assets $0
LIABILITIES:
Accounts payable $0
Shareholders' equity:
Preferred Stock($.01 par value, 100,000 shares
authorized, none issued) -
Common Stock($.01 par value, 500,000 shares
authorized, none issued) -
Additional paid-in-capital -
Retained earnings -
------
Total shareholders' equity $0
------
Total liabilities and shareholders' equity $0
======
See accompanying notes to the finanacial statements
4
<PAGE>
ENTERPRISE BANCORP, INC.
Statement of Income
February 29, 1996(inception)
through
June 30, 1996
-------------
(unaudited)
Net income before operating expenses
and income tax $0
------
Income before income taxes 0
------
Provision for income taxes 0
------
Net Income $0
======
See accompanying notes to the finanacial statements
5
<PAGE>
ENTERPRISE BANCORP, INC.
Statement of Cash Flows
February 29, 1996(inception)
through
June 30, 1996
-------------
(unaudited)
Cash flows from operating activities $0
------
Cash flows from investing activities 0
------
Cash flows from financing activities 0
------
Net increase in cash and cash equivalents $0
======
Cash and cash equivalents at beginning of period 0
------
Cash and cash equivalents at end of period $0
======
See accompanying notes to the finanacial statements
6
<PAGE>
ENTERPRISE BANCORP, INC.
Notes to Financial Statements
(1) Organization of Holding Company
Enterprise Bancorp, Inc. (the "company") is a Massachusetts corporation
newly organized on February 29, 1996, at the direction of Enterprise
Bank and Trust Company, a Massachusetts trust company (the "bank") for
the purposes of becoming a holding company for the bank. The company
had no material assets or operations prior to completion of the holding
company reorganization on July 26, 1996.
(2) Subsequent Events
On July 17, 1996, the Articles of Organization of the company were
amended to increase the company's authorized capital to 1,000,000
shares of preferred stock, $.01 par value, and 5,000,000 shares of
common stock, $.01 par value. On July 25, 1996, the bank purchased 100
shares of the company's common stock for $50,000.
On July 26, 1996, pursuant to an Agreement and Plan of Reorganization
dated as of February 29, 1996, the company acquired all of the
outstanding common stock of the bank, $1.00 par value, in a
share-for-share exchange for common stock of the company, and the
previously outstanding shares of the company's common stock were
redeemed and retired (the "Reorganization"). Upon effectiveness of the
Reorganization, the bank became the wholly owned subsidiary of the
company and the former shareholders of the bank became the shareholders
of the company. The bank's unaudited financial statements at and for
the period ended June 30, 1996, follow these financial statements.
(3) Pro Forma Financial Information
As the company had no material assets or operations prior to the
consummation of the Reorganization, the pro forma information
demonstrating the balance sheet and income statement of the company as
of June 30, 1996, as if the Reorganization had occurred as of January
1, 1996, are substantially the same as those of the bank included
herein with the exception of pro forma adjustments resulting from (i)
the one-for-one exchange of shares of the company's common stock, $.01
par value, for shares of the bank's common stock, $1.00 par value; (ii)
the issuance of 100 shares of the company's common stock for $50,000;
and (iii) the redemption of 100 shares of the company's common stock at
par value. The following shows the impact of these pro forma
adjustments to the shareholder's equity of the company at June 30,
1996.
7
<PAGE>
<TABLE>
<CAPTION>
ENTERPRISE BANCORP, INC.
Pro Forma Financial Information
Bank Historical Company Historical Pro Forma
Financial Financial Adjustments Pro Forma
Information Information and Eliminations Consolidated
--------------- ------------------ ---------------- ------------
<S> <C> <C> <C> <C>
Shareholders' Equity:
Common Stock $ 1,576,017 $ 0 ($ 1,560,257) $ 15,760
Additional Paid-in-Capital 13,914,602 0 1,560,257 15,474,859
Retained Earnings 3,917,003 0 0 3,917,003
Unrealized Gain/(Loss) on Investment
Securities Available for Sale,Net of
Tax Effect (1,858,635) -- -- (1,858,635)
------------ ------- ----------- ------------
Total $ 17,548,987 $ 0 $ 0 $ 17,548,987
============ ======= =========== ============
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
ENTERPRISE BANK AND TRUST COMPANY
BALANCE SHEETS
ASSETS June 30, 1996 June 30, 1995 December 31, 1995
------------- ------------- -----------------
(Unaudited) (Unaudited) (Audited)
------------- ------------- -----------------
<S> <C> <C> <C>
Cash and due from banks $ 13,466,516 $ 8,119,813 $ 11,562,392
Federal funds sold 4,700,000 6,000,000 13,600,000
------------- ------------ -------------
Total cash and cash equivalents 18,166,516 14,119,813 25,162,392
------------- ------------ -------------
Investment securities at market value 106,779,500 49,277,465 78,812,489
Loans held for sale 1,286,402 967,009 1,855,340
Loans, gross 128,998,494 118,348,386 116,356,270
Less: allowance for possible loan losses (3,986,083) (4,363,579) (4,106,659)
Less: deferred origination fees (726,861) (626,678) (549,398)
------------- ------------ -------------
Loans, net 124,285,550 113,358,129 111,700,213
------------- ------------ -------------
Premises and equipment, net 2,224,611 2,178,003 2,463,592
Accrued interest receivable 2,497,822 1,397,749 1,823,079
Income taxes receivable 270,056 -- --
Deferred income taxes 3,209,546 2,122,637 1,740,270
Real estate acquired by foreclosure 148,534 367,652 417,172
Prepaid expenses and other assets 351,250 391,449 291,097
------------- ------------ -------------
Total assets $ 259,219,787 $ 184,179,906 $ 224,265,644
============= ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand 35,726,418 28,695,263 33,131,861
Savings and NOW and MMDA 85,154,602 69,542,756 77,294,855
Time 105,765,145 51,456,556 85,967,851
------------- ------------ -------------
Total deposits 226,646,165 149,694,575 196,394,567
Short term borrowings 13,021,762 14,959,409 6,981,783
Accrued interest payable 484,435 240,283 549,673
Income taxes payable 0 34,334 173,346
Accrued expenses and other liabilities 1,518,438 1,640,949 1,200,561
------------- ------------ -------------
Total liabilities 241,670,800 166,569,550 205,299,930
------------- ------------ -------------
Shareholders' equity:
Preferred stock, $1.00 par value; 450,000
shares authorized, no shares issued -- -- --
Class A Common Stock, $1.00 par value;
3,000,000 shares authorized,
1,574,792, and 1,575,892, issued and outstanding
at 6/30/96,6/30/95, and 12/31/95, respectively 1,576,017 1,574,792 1,575,892
Additional paid-in capital 13,914,602 13,902,325 13,913,325
Retained earnings 3,917,003 2,468,452 3,324,225
Net unrealized (loss)/gain on investment securities, net of
applicable income taxes (1,858,635) (335,213) 152,272
------------- ------------ -------------
Total shareholders' equity 17,548,987 17,610,356 18,965,714
------------- ------------ -------------
Total liabilities and shareholders' equity $ 259,219,787 $ 184,179,906 $ 224,265,644
============= ============= =============
</TABLE>
See accompanying notes to the financial statements
9
<PAGE>
<TABLE>
<CAPTION>
ENTERRPISE BANK AND TRUST COMPANY
STATEMENTS OF INCOME
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Interest income:
Loans $3,030,699 $2,885,742 $5,929,405 $5,571,900
Daily federal funds sold 25,969 41,169 109,660 51,047
Investment securities 1,722,293 754,061 3,130,389 1,485,940
---------- ---------- ---------- ----------
Total interest income 4,778,961 3,680,972 9,169,454 7,108,887
---------- ---------- ---------- ----------
Interest expense:
Savings,NOW and MMDA deposits 474,421 437,222 918,892 852,087
Time deposits 1,382,863 560,597 2,666,330 992,459
Short-term borrowings 248,841 340,244 322,723 649,018
---------- ---------- ---------- ----------
Total interest expense 2,106,125 1,338,063 3,907,945 2,493,564
---------- ---------- ---------- ----------
Net interest income 2,672,836 2,342,909 5,261,509 4,615,323
Provision for possible loan losses -- -- -- --
---------- ---------- ---------- ----------
Net interest income after provision for
possible loan losses 2,672,836 2,342,909 5,261,509 4,615,323
---------- ---------- ---------- ----------
Non-interest income:
Trust income 157,318 150,902 318,229 297,088
Deposit service fees 154,844 156,528 309,213 285,086
Gains on securities sales 1,909 -- 1,909 --
Other income 79,278 161,159 176,584 237,417
---------- ---------- ---------- ----------
Total non-interest income 393,349 468,589 805,935 819,591
---------- ---------- ---------- ----------
Income before operating expenses and income taxes 3,066,185 2,811,498 6,067,444 5,434,914
---------- ---------- ---------- ----------
Non-interest expense:
Salaries and employee benefits 1,247,178 1,068,092 2,445,001 2,150,043
Occupancy expenses 302,761 291,358 633,431 534,334
FDIC insurance expense 500 72,525 1,500 145,051
Office and data processing supplies 77,932 159,516 142,893 205,945
Trust professional and custodial expenses 51,000 48,000 101,050 96,000
Audit, legal and other professional fees 75,629 124,060 173,856 227,363
Other 350,687 341,809 856,166 665,134
---------- ---------- ---------- ----------
Total non-interest expenses 2,105,687 2,105,360 4,353,897 4,023,870
---------- ---------- ---------- ----------
Income before income taxes 960,498 706,138 1,713,547 1,411,044
---------- ---------- ---------- ----------
Provision for income taxes 365,997 237,394 647,964 500,582
---------- ---------- ---------- ----------
Net income $594,501 $468,744 $1,065,583 $910,462
========== ========== ========== ==========
Net income per common share $0.38 $0.30 $0.68 $0.58
========== ========== ========== ==========
Weighted average common shares outstanding 1,575,950 1,574,792 1,575,925 1,574,792
========== ========== ========== ==========
</TABLE>
See accompanying notes to the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
ENTERPRISE BANK AND TRUST COMPANY
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
Net unrealized
(loss)/gain
on investment
securities, net
Class A Additional Accumulated of applicable
Common Stock paid-in capital Retained earnings income taxes Total
------------ --------------- ----------------- ------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $1,574,792 $13,902,325 $1,991,057 ($1,607,249) $15,860,925
Dividend declared (433,068) (433,068)
Net income 1,766,236 1,766,236
Stock options exercised 1,100 11,000 12,100
Net change in unrealized gain/(loss) on investment
securities, net of applicable income taxes 1,759,521 1,759,521
----------- ----------- ----------- ---------- -----------
Balance at December 31, 1995 $1,575,892 $13,913,325 $3,324,225 $152,272 $18,965,714
Dividend declared (472,805) (472,805)
Net income 1,065,583 1,065,583
Stock options exercised 125 1,277 1,402
Net change in unrealized gain/(loss) on investment
securities, net of applicable income taxes (2,010,907) (2,010,907)
----------- ----------- ----------- ---------- -----------
Balance at June 30, 1996 $1,576,017 $13,914,602 $3,917,003 ($1,858,635) $17,548,987
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to the financial statements.
11
<PAGE>
<TABLE>
<CAPTION>
ENTERPRISE BANK AND TRUST COMPANY
STATEMENTS OF CASH FLOWS
(unaudited)
Six months ended
June 30, 1996 June 30, 1995
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,065,583 $ 910,462
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Depreciation and amortization 341,863 316,004
Provision for possible loan losses -- --
Gain on sale of investments (1,909) --
Net (increase) decrease in loans held for sale 568,938 751,953
(Increase) decrease in accrued interest receivable (674,743) (130,117)
(Increase) decrease in prepaid expenses and other assets (60,153) (183,153)
(Increase) decrease in deferred income taxes 3,717 63,415
Increase (decrease) in accrued expenses and other liabilities 317,877 495,654
Increase (decrease) in accrued interest payable (65,238) 42,365
Increase (decrease) in income taxes payable/receivable (443,402) (32,832)
------------ -----------
Net cash provided by operating activities 1,052,533 2,233,751
------------ -----------
Cash flows from investing activities:
Proceeds from sales of investment securities 5,919,844 --
Proceeds from calls, maturities or paydowns of investment securities 5,715,955 1,364,287
Purchase of investment securities (43,065,569) (2,723,350)
Proceeds from payments or sales/additions to real estate acquired by 27,245 22,135
foreclosure
Net (increase) decrease in loans, net of chargeoffs (12,343,944) (4,627,637)
Additions to premises and equipment, net (122,114) (919,215)
------------ -----------
Net cash used in investing activities (43,868,583) (6,883,780)
------------ -----------
Cash flows from financing activities:
Net increase (decrease) in deposits 30,251,598 15,421,497
Net increase (decrease) in short term borrowings 6,039,979 (4,659,621)
Proceeds from exercise of stock options 1,402 --
Dividends paid (472,805) (433,067)
------------ -----------
Net cash provided by financing activities 35,820,174 10,328,809
------------ -----------
Net increase (decrease) in cash and cash equivalents (6,995,876) 5,678,780
Cash and cash equivalents at beginning of period 25,162,392 8,441,033
------------ -----------
Cash and cash equivalents at end of period $18,166,516 14,119,813
============ ===========
Disclosure of cash flow information: Cash paid during the period for:
Interest on deposits and short-term borrowings $ 3,842,707 $ 2,535,929
Income taxes $ 504,250 470,000
</TABLE>
See accompanying notes to the financial statements.
12
<PAGE>
ENTERPRISE BANK AND TRUST COMPANY
Notes to Financial Statements
(1) Basis of Presentation
The accompanying unaudited financial statements should be read in
conjunction with the bank's December 31, 1995, audited financial
statements and notes thereto. Interim results are not necessarily
indicative of results to be expected for the entire year.
In preparing the financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets
and liabilities as of the date of the balance sheet and revenues and
expenses for the period. Actual results could differ from those
estimates. Material estimates that are particularly susceptible to
change relate to the determination of the allowance for possible loan
losses and valuation of other real estate owned.
In the opinion of management, the accompanying financial statements
reflect all necessary adjustments consisting of normal recurring
accruals for a fair presentation.
(2) Earnings per share are calculated based on the average number of Class
A common shares outstanding during the period.
The average number of common shares outstanding during the six months
ended June 30, 1996, and 1995, is as follows:
Six Months Ended
----------------
June 30, 1996 June 30, 1995
------------- -------------
Class A Common Shares 1,575,925 1,574,792
(3) Certain fiscal 1995 information has been reclassified to conform with
1996 presentation.
13
<PAGE>
ITEM 2 - Business Review and Management's Discussion and Analysis of Financial
Condition and Results of Operation
Enterprise Bancorp, Inc. (the "company")
Enterprise Bancorp, Inc. was organized on February 29, 1996, at the direction of
Enterprise Bank and Trust Company (the "bank") for the purpose of becoming the
holding company of the bank. The company entered into an Agreement and Plan of
Reorganization with the Bank dated as of February 29, 1996, (the
"Reorganization"). The Reorganization was consummated on July 26, 1996. Upon the
consummation of the Reorganization, the bank became the wholly owned subsidiary
of the company and the former shareholders of the bank became shareholders of
the company. The business and operations of the company are subject to the
regulatory oversight of the Board of Governors of the Federal Reserve System.
Prior to consummation of the Reorganization, the company had no material assets
or operations. With the exception of certain pro forma adjustments to
shareholders' equity to reflect the difference in par value of the company's
common stock and the initial capital contribution of the bank to the company,
the bank's financial statements at and for the period ended June 30, 1996, which
are discussed below, are substantially identical to the pro forma consolidated
financial statements of the company reflecting consummation of the Plan of
Reorganization.
Enterprise Bank and Trust Company
General
Enterprise Bank and Trust Company is a Massachusetts trust company which
commenced banking operations on January 3, 1989.
The bank's main office is at 222 Merrimack Street in Lowell, Massachusetts. The
bank began offering trust services in June of 1992. A branch office was opened
at 185 Littleton Road, Chelmsford, Massachusetts, in June of 1993. The bank
opened a branch office in Leominster, Massachusetts, in May of 1995 and a branch
office in Billerica, Massachusetts, in June of 1995. The bank has received the
necessary approvals to open a branch in Tewksbury, Massachusetts, and plans to
open the branch for business late in 1996. The bank's deposit-gathering and
lending activities are conducted primarily in the city of Lowell and the
surrounding Massachusetts towns of Billerica, Chelmsford, Dracut, Tewksbury,
Tyngsboro, and Westford and in the cities of Leominster and Fitchburg. The bank
offers a range of commercial and consumer services with a goal of satisfying the
needs of consumers, small and medium-sized businesses and professionals. The
bank's primary goal is to enhance long-term shareholder value and take advantage
of market opportunities.
The bank's deposit accounts are insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation (the "FDIC") up to the maximum amount
provided by law. The FDIC and the Massachusetts Commissioner of Banks (the
"Commissioner") have regulatory authority over the bank.
14
<PAGE>
The bank's results of operations depend primarily on the bank's net interest
income, the difference between income earned on its loan and investment
portfolios and the interest paid on its deposits and borrowed funds, and the
size of the bank's provision for possible loan losses. Net interest income is
primarily affected in the short-term by the level of earning assets as a
percentage of total assets, the level of interest-bearing and
non-interest-bearing deposits, yields earned on assets, rates paid on
liabilities, the level of non-accrual loans and changes in interest rates. The
provision for possible loan losses is primarily affected by individual problem
loan situations, overall loan portfolio quality, the level of charge-offs,
regulatory examinations, an assessment of current and expected economic
conditions, and changes in the character and size of the loan portfolio.
Earnings are also affected by non-interest income, which consists primarily of
deposit account fees, trust fees, and gains and losses on sales of securities,
and the level of non-interest expense and income taxes. The bank's residential
mortgage operations in the first six months of 1995 were negatively impacted by
interest rates and competition. As a result of a rapid increase in interest
rates in 1994, the competition for residential mortgages increased and volume
and profit margins decreased. The mortgage center, beginning in the second
quarter of 1995, has refocused its business away from originating mortgages for
resale into the secondary market to originating construction,
construction-to-permanent and commercial mortgages.
The pages following should be read in conjunction with the bank's consolidated
financial statements and notes thereto.
Financial Condition
Total assets were $259,219,787 at June 30, 1996, compared with $184,179,906 at
June 30, 1995, an increase of approximately 41%.
The following table shows selected balance sheet accounts at June 30:
1996 1995
------------ ------------
Total assets $259,219,787 $184,179,906
Loans, net 124,285,550 113.358,129
Investment securities at market value 106,779,500 49,277,465
Total deposits 226,646,165 149,694,575
Short-term borrowings 13,021,762 14,959,409
15
<PAGE>
Liquidity
Liquidity is the ability to meet cash needs, such as those arising from
fluctuations in loans, investments and deposits. Liquidity management is the
coordination of activities so that cash needs are anticipated and met easily and
efficiently. Liquidity policies are set and monitored by the bank's investment
and asset/liability committee. The bank's liquidity is maintained by projecting
cash needs, by balancing maturing assets with maturing liabilities, by the
monitoring of various liquidity ratios, by monitoring deposit flows, and by
maintaining liquidity within the investment portfolio. The bank's liability
management objectives are to maintain liquidity, provide and enhance access to a
diverse and stable source of funds, provide competitively priced and attractive
products to customers, conduct funding at a low cost relative to current market
conditions and to engage in sound balance sheet management strategies. Primary
sources of liquidity consist of deposit inflows, loan repayments, Federal Home
Loan Bank (FHLB) borrowings and maturities and sales of investment securities.
These sources fund the bank's lending and investing activities. Management
believes that the bank has adequate liquidity to meet its commitments.
At the April 1996, meeting of the board of directors, a dividend of $.30 per
share was declared and was paid on July 1, 1996. The payment of future dividends
will be considered on an annual basis by the board of directors.
Capital Resources
Capital planning by the bank considers current needs and anticipated future
growth. The primary source of additional capital has been retention of earnings
since the bank commenced operations.
Both the company and the bank are subject to regulatory capital adequacy
guidelines. New risk-based capital guidelines became effective in 1990 and were
fully-phased in as of December 31, 1992. As of June 30, 1996, the bank's total
risk-based capital ratio was 15.37% and its Tier 1 capital ratio was 14.10%. At
June 30, 1996, the bank's leverage ratio was 7.49%. The company's ratios at June
30, 1996, on a pro forma basis were substantially the same as the bank's.
The minimum total risk based, tier 1 and leverage ratio guidelines are 10%, 6%,
and 5%, respectively, to be classified for regulatory purposes as a "well
capitalized" institution. The company and the bank, therefore, would be
considered to be "well capitalized".
Balance Sheet
Total Assets
Total assets increased $35.0 million since December 31, 1995, an increase of
15.6%. An increase in investments of $28.0 million and increase in gross loans
of $12.1 million partially offset by a decrease in cash and cash equivalents of
$7.0 million were the primary causes of the change. The increase in assets was
funded by an increase in deposits and borrowings of $30.3 million and $6.0
million, respectively.
16
<PAGE>
Investments
The investment portfolio is managed with the primary objective of maintaining an
appropriate level of liquidity and controlling interest rate risk. The bank's
investment securities consist of treasury, agency, and municipal securities and
mortgage-backed and collateralized mortgage obligations (CMOs). The bank's CMO
investments primarily consist of investments in planned amortization classes
(PACs). The yield and maturity of such PAC CMOs are less susceptible to change,
as opposed to non PAC CMOs, due to increasing or decreasing market rates. The
bank reviews, on an ongoing basis, the credit quality of its investment
securities and the banks in which it invests federal funds sold. Federal funds
investments are typically made on an overnight basis.
At June 30, 1996 and 1995, and December 31, 1995, all of the bank's investment
securities were classified as available for sale and carried at market value.
The net unrealized losses at June 30, 1996, net of tax effects, are shown as a
separate component of stockholders' equity in the amount of $1,858,635.
Loans
Total loans were $130.3 million, or 50.3% of total assets, at June 30, 1996,
compared to $118.2 million, or 52.7% of total assets, at December 31, 1995. The
increase in loans of $12.1 million was primarily attributed to increased loan
originations in the commercial real estate and commercial loan portfolios. The
bank continues to pursue aggressive customer calling efforts as well as
increased marketing and advertising to identify quality lending opportunities.
Deposits and Borrowings
Total deposits increased $30.3 million, or 15.4%, during the first six months of
1996 from $196.4 million at December 31, 1995, to $226.6 million at June 30,
1996. The increase is due to the opening of the new Leominster and Billerica
branches and continued strong growth from our Lowell and Chelmsford offices.
Total borrowings, consisting of securities sold under agreements to repurchase
and FHLB borrowings, increased $6.0 million, or 86.5%, from $7.0 million at
December 31, 1995, to $13.0 million at June 30, 1996. The increase was primarily
attributable to an increase in FHLB borrowings. Management periodically takes
advantage of opportunities to fund asset growth with borrowings, but on a
long-term basis the bank intends to replace the FHLB borrowings with deposits.
FHLB borrowings at June 30, 1996, were $4.0 million with additional available
borrowings of approximately $93.3 million.
17
<PAGE>
Loan Loss Experience/Non-performing Assets
The following table summarizes the activity in the allowance for possible loan
losses for the periods indicated:
Six months ended June 30,
-----------------------------
1996 1995
---- ----
Balance at beginning of year $ 4,106,659 $ 4,341,204
Loans charged off (128,448) (18,797)
Recoveries on loans charged off 7,872 41,172
Provision charged to income -- --
----------- -----------
Balance at June 30 $ 3,986,083 $ 4,363,579
=========== ===========
Reserve to loans outstanding 3.09% 3.68%
=========== ===========
Annualized net (charge-offs)/recoveries to
average loans outstanding ( .20%) .04%
=========== ===========
The following table sets forth non-performing assets at June 30:
1996 1995
---------- ----------
Loans on non accrual:
Commercial $ 449,540 $ 514,489
Residential real estate 248,633 119,730
Commercial real estate 1,349,068 543,147
Construction - -
Consumer, including home equity 543,652 170,127
---------- ----------
Total loans on non accrual 2,590,893 1,347,493
Real estate acquired by foreclosure 148,534 367,652
---------- ----------
Total non accrual loans and real $2,739,427 $1,715,145
========== ==========
estate acquired by foreclosure
Non accrual loans and real estate owned as
percentage of total assets 1.06% .93%
========== ==========
Allowance for possible loan losses to
non accrual loans 154% 324%
========== ==========
Restructured loans $ 0 $ 674,789
========== ==========
Total non-accrual loans increased $1,243,400 or 92% from June 30, 1995, to June
30, 1996. The increase in non-performing loans is primarily due to several large
commercial real estate loans to a couple of borrowers becoming delinquent. The
increase in consumer non-accrual loans was primarily caused from one home equity
loan that has periodically been delinquent.
18
<PAGE>
RESULTS OF OPERATIONS SUMMARY
SIX MONTHS ENDED June 30, 1996, VS. SIX MONTHS ENDED June 30, 1995
The bank reported net income of $1,065,583 in the six months ended June 30,
1996, versus $910,462 in the six months ended June 30, 1995, an increase of 17%.
The bank had earnings per common share of $.68 in the six months ended June 30,
1996, compared with $.58 in the six months ended June 30, 1995. The per share
results are based on 1,575,925 and 1,574,792 average common shares outstanding
at June 30, 1996, and June 30, 1995, respectively.
The following table highlights changes which affected the bank's earnings for
the periods
Six Months Six Months
Ended Ended
June 30, 1996 June 30, 1995
------------- -------------
(Dollars in thousands)
Average assets $239,254 $178,768
Average deposits and short-term borrowings $218,193 $159,191
Average investment securities (1) $102,611 $ 49,950
Average loans & loans held for sale $119,905 $118,711
Average loans & loans held for sale to average
deposits & short-term borrowings ratio 54.95% 74.57%
Non interest expenses to average assets (2) 3.65% 4.50%
Non interest income, exclusive of securities
gains to average assets (2) .67% .92%
Average tax equivalent rate earned on interest
earning assets 8.26% 8.53%
Average rate paid on deposits and
short-term borrowings 3.59% 3.16%
Net interest rate spread 4.66% 5.40%
Net interest income $ 5,262 $ 4,615
Provision for possible loan losses $ - $ -
Tax expense $ 648 $ 501
Gain from sale of securities $ 2 $ 0
(1) Average investment securities are shown at average amortized cost
(2) Ratios have been annualized based on number of days for the period
19
<PAGE>
Net Interest Income
Net interest income is the difference between the interest earned on assets and
the interest paid on liabilities. Interest income and expense are affected by
changes in earning asset and interest-bearing liability balances, as well as
changes in the level of interest rates. Stable and growing net interest income
is dependent upon effective spread management, asset growth, and maintenance of
strong underwriting and credit standards.
The bank's net interest income was $5,261,509 in the six months ended June 30,
1996, an increase of $646,186 or 14% from $4,615,323 in the six months ended
June 30, 1995, primarily a result of an increase in the bank's asset size and an
increase in interest rates earned on loans. These increases were partially
offset by increased interest expense from an increase in certificate of deposit
balances and rates paid.
The average tax equivalent yield on earning assets in the six months ended June
30, 1996, was 8.26% down 27 basis points from 8.53% in the six months ended June
30, 1995. The average rate paid on deposits and borrowings in the six months
ended June 30, 1996, was 3.59%, an increase of 43 basis points from 3.16% in the
six months ended June 30, 1995. The resulting interest rate spread decreased 74
basis points to 4.66% in the six months ended June 30, 1996, from 5.40% in the
six months ended June 30, 1995. The principal reason for the increase in the
bank's net interest income and the decrease in the interest rate margin during
the first six months of 1996 is a result of the increase in investments which
was principally funded by certificates of deposit.
The following table sets forth, among other things, the extent to which changes
in interest rates and changes in the average balances of interest-earning assets
and interest-bearing liabilities have affected interest income and expense
during the six months ended June 30, 1996, and 1995. For each category of
interest-earning assets and interest-bearing liabilities, information is
provided on changes attributable to (1) changes in volume (change in average
portfolio balance multiplied by prior year average rate); (2) changes in
interest rates (change in average interest rate multiplied by prior year average
balance); and (3) changes in rate and volume.
20
<PAGE>
<TABLE>
<CAPTION>
AVERAGE BALANCES, INTEREST AND AVERAGE INTEREST RATES
-----------------------------------------------------
Six Months Ended Six Months Ended
June 30, 1996 June 30, 1995 Changes due to
-------------------------- ---------------------------- -------------------------------
Average Average
Average Interest Average Interest Interest Rate/
Balance Interest Rate Balance Interest Rate Total Volume Rate Volume
(Dollars in Thousands) ------- -------- -------- ------- -------- -------- ----- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Loans and loans held for sale (1) (2) $119,905 $5,929 9.92% $118,711 $5,572 9.47% $ 357 $ 57 $268 $ 32
Investment securities (3) 102,611 3,130 6.42 49,950 1,486 6.51 1,644 1,713 (21) (48)
Federal funds sold 4,002 110 5.51 1,749 51 5.88 59 66 (3) (4)
-------- ------ -------- ------ ------ ------ ---- ----
Total interest earnings assets 226,518 9,169 8.26% 170,410 7,109 8.53% 2,060 1,836 244 (20)
------ ------ ------ ------ ---- ----
Other assets (4) 12,736 8,358
-------- --------
Total assets $239,254 $178,768
======== ========
Liabilities and stockholders' equity:
Non-interest bearing deposits $ 31,808 26,232
Savings, NOW and money market 80,402 919 2.29% 68,529 852 2.51% 67 149 (74) (8)
Certificate of deposit 93,145 2,666 5.74 41,194 993 4.86 1,673 1,263 181 229
Short-term borrowings 12,838 323 5.05 23,236 649 5.63 (326) (293) (68) 35
-------- ------ -------- ------ ------ ------ ---- ----
Total deposits and borrowings 218,193 3,908 3.59% 159,191 2,494 3.16% 1,414 1,119 39 256
------ ------ ------ ------ ---- ----
Other liabilities 1,886 1,684
-------- --------
Total liabilities 220,079 160,875
Stockholders' equity 19,175 17,893
-------- --------
Total liabilities and
stockholder's equity $239,254 $178,768
======== ========
Net interest rate spread 4.66% 5.40%
Net interest income $5,262 $4,615 $ 646 $ 717 $ 205 $(276)
====== ====== ====== ====== ===== =====
Net yield on average earning assets 4.80% 5.61%
<FN>
(1) Average loans include nonaccrual loans.
(2) Average loans are net of average deferred loan fees.
(3) Average balances are presented at average amortized cost and average interest rates are presented on a
tax-equivalent basis.
(4) Other assets include cash and due from banks, accrued interest receivable, allowance for possible loan losses,
real estate acquired by foreclosure, deferred income taxes and other miscellaneous assets.
</FN>
</TABLE>
The bank manages its earning assets by fully using available capital resources
within what management believes are prudent credit and leverage parameters.
Loans, investment securities, and short-term investments comprise the bank's
earning assets.
21
<PAGE>
Non Interest Income
Non-interest income, exclusive of security gains, decreased by $15,565 to
$804,026 for the six months ended June 30, 1996, compared to $819,591 for the
six months ended June 30, 1995. This decrease was primarily caused by a decline
in gains on sales of loans of $89,353. This decline was partially offset by
increases in trust fees, deposit fees and other fees.
Trust fees increased due to an increase in trust assets.
Deposit fees increased approximately 8.46% in the six months ended June 30,
1996, compared to the six months ended June 30, 1995. The 1996 growth was
primarily the result of an increase in transaction deposit accounts, activity
volume and increased fees.
Other income for the six months ended June 30, 1996, was $176,584, a decrease of
25.63% from $237,417 in the six months ended June 30, 1995, due primarily to
decreases in gains on sales of loans.
Gains on Sales of Securities
Gains from the sales of investment securities totalled $1,909 in 1996 versus $0
in 1995. The sales in 1996 were principally securities maturing within
approximately 30 months.
Non Interest Expenses
Salaries and benefits expense totalled $2,445,001 in the six months ended June
30, 1996, compared with $2,150,043 in 1995 an increase of $294,958 or 13.72%.
This increase was primarily the result of the addition of the Leominster and
Billerica branches in the second quarter of 1995, accruals for an incentive
bonus plan, an increase in benefit expenses, and annual salary increases.
Occupancy expense was $633,431 in the six months ended June 30, 1996, compared
with $534,334 in 1995, an increase of $99,097 or 18.55% primarily due to the
opening of the two branches.
FDIC insurance expense decreased by $143,551 in 1996. The decrease was due to a
reduction in the bank's assessment rate.
Office and data processing supplies expense decreased by $63,052, or 30.62%, in
the six months ended June 30, 1996, primarily due to various cost saving
initiatives.
Trust professional and custodial expenses increased due to an increase in trust
assets. Audit, legal and other professional expenses decreased in 1996 primarily
due to the extra costs in 1995 of a consultant hired by the bank to review its
operating procedures.
Other non interest expenses increased by $191,032 or 28.72%, primarily due to
expenses associated with the two new branches.
Provision for Possible Loan Losses
The provision for possible loan losses amounted to $0 in 1996 and 1995. The
provision reflects real estate values and economic conditions in New England
22
<PAGE>
and in Greater Lowell, in particular, the level of non accrual loans, levels of
charge-offs and recoveries, levels of outstanding loans, known and inherent
risks in the nature of the loan portfolio and management's assessment of current
risk. It is a significant factor in the bank's operating results. The bank's
allowance for possible loan losses was $3,986,083 at June 30, 1996. See "Risk
Elements" and "Provision and Allowance for Possible Loan Losses" for further
discussion.
23
<PAGE>
RESULTS OF OPERATIONS SUMMARY
THREE MONTHS ENDED June 30, 1996, VS. THREE MONTHS ENDED June 30, 1995
The bank reported net income of $594,501 in the quarter ended June 30, 1996,
versus $468,744 in the quarter ended June 30, 1995, an increase of 27%. The bank
had earnings per common share of $.38 in the quarter ended June 30, 1996,
compared with $.30 in the quarter ended June 30, 1995. The per share results are
based on 1,575,950 and 1,574,792 average common shares outstanding for the
quarters ended June 30, 1996, and June 30, 1995, respectively.
The following table highlights changes which affected the bank's earnings for
the period:
Three Months Three Months
Ended Ended
June 30, 1996 June 30, 1995
------------- -------------
(Dollars in thousands)
Average assets $251,856 $182,779
Average deposits and short-term borrowings $230,746 $162,904
Average investment securities (1) $113,014 $ 50,607
Average loans & loans held for sale $123,224 $120,504
Average loans & loans held for sale to average
deposits & short-term borrowings ratio 53.40% 73.97%
Non interest expenses to average assets (2) 3.36% 4.61%
Non interest income, exclusive of securities
gains to average assets (2) .62% 1.03%
Average tax equivalent rate earned on interest
earning assets 8.18% 8.63%
Average rate paid on deposits and
short-term borrowings 3.66% 3.29%
Net interest rate spread 4.52% 5.34%
Net interest income $ 2,673 $ 2,343
Provision for possible loan losses $ - $ -
Tax Expense $ 366 $ 237
Gain from sale of securities $ 2 $ 0
(1) Average investment securities are shown at average amortized cost
(2) Ratios have been annualized based on number of days for the period.
24
<PAGE>
Net Interest Income
The bank's net interest income was $2,672,836 quarter ended June 30, 1996, an
increase of $329,927 or 14% from $2,342,909 in the quarter ended June 30, 1995,
primarily a result of an increase in the bank's assets.
The average tax equivalent yield on earning assets in the quarter ended June 30,
1996, was 8.18%, down 45 basis points from 8.63% in the quarter ended June 30,
1995. The average rate paid on deposits and borrowings in the quarter ended June
30, 1996, was 3.66%, an increase of 37 basis points from 3.29% in the quarter
ended June 30, 1995. The resulting interest rate spread decreased 82 basis
points to 4.52% in the quarter ended June 30, 1996, from 5.34% in the quarter
ended June 30, 1995.
The following table sets forth, among other things, the extent to which changes
in interest rates and changes in the average balances of interest-earning assets
and interest-bearing liabilities have affected interest income and expense
during the quarters ended June 30, 1996, and 1995. For each category of
interest-earning assets and interest-bearing liabilities, information is
provided on changes attributable to (1) changes in volume (change in average
portfolio balance multiplied by prior year average rate); (2) changes in
interest rates (change in average interest rate multiplied by prior year average
balance); and (3) changes in rate and volume.
25
<PAGE>
<TABLE>
<CAPTION>
AVERAGE BALANCES, INTEREST AND AVERAGE INTEREST RATES
-----------------------------------------------------
Three Months Ended Three Months Ended
June 30, 1996 June 30, 1995 Changes due to
-------------------------- ---------------------------- -------------------------------
Average Average
Average Interest Average Interest Interest Rate/
Balance Interest Rate Balance Interest Rate Total Volume Rate Volume
(Dollars in Thousands) ------- -------- -------- ------- -------- -------- ----- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Loans and loans held for sale (1) (2) $123,224 $3,031 9.87% $120,504 $2,886 9.61% $ 145 $ 65 $ 78 $ 2
Investment securities (3) 113,014 1,722 6.40 50,607 754 6.47 968 1010 (10) (32)
Federal funds sold 2,169 26 4.81 2,855 41 5.76 (15) (10) (7) 2
-------- ------ -------- ------ ------ ------ ---- ----
Total interest earnings assets 238,407 4,779 8.18% 173,966 3,681 8.63% 1098 1065 61 (28)
------ ------ ------ ------ ---- ----
Other assets (4) 13,449 8,813
-------- --------
Total assets $251,856 $182,779
======== ========
Liabilities and stockholders' equity:
Non-interest bearing deposits $ 32,876 26,979
Savings, NOW and money market 82,550 474 2.30% 68,220 437 2.57 37 92 (45) (10)
Certificate of deposit 97,329 1,383 5.70 43,429 561 5.18 822 698 56 68
Short-term borrowings 17,991 249 5.55 24,276 340 5.62 (91) (88) (4) 1
-------- ------ -------- ------ ------ ------ ---- ----
Total deposits and borrowings 230,746 2,106 3.66% 162,904 1,338 3.29% 768 702 7 59
------ ------ ------ ------ ---- ----
Other liabilities 1,890 1,870
-------- --------
Total liabilities 232,636 164,774
Stockholders' equity 19,220 18,005
-------- --------
Total liabilities and
stockholder's equity $251,856 $182,779
======== ========
Net interest rate spread 4.52% 5.34%
Net interest income $2,673 $2,343 $330 $ 363 $ 54 $(87)
====== ====== ==== ====== ==== ====
Net yield on average earning assets 4.63% 5.55%
<FN>
(1) Average loans include nonaccrual loans.
(2) Average loans are net of average deferred loan fees.
(3) Average balances are presented at average amortized cost and average interest rates are presented on a
tax-equivalent basis.
(4) Other assets include cash and due from banks, accrued interest receivable, allowance for possible loan losses,
real estate acquired by foreclosure, deferred income taxes and other miscellaneous assets.
</FN>
</TABLE>
The bank manages its earning assets by fully using available capital resources
within what management believes are prudent credit and leverage parameters.
Loans, investment securities, and short-term investments comprise the bank's
earning assets.
26
<PAGE>
Non Interest Income
Non-interest income, exclusive of security gains, decreased by $77,149 to
$391,440 for the three months ended June 30, 1996, compared to $468,589 for the
three months ended June 30, 1995. This decrease was primarily caused by a
decline in gains on sales of loans of $103,912. This decline was partially
offset by increases in trust and other fees.
Trust income increased due to an increase in trust assets.
Deposit fees decreased approximately 1% in the quarter ended June 30, 1996. The
decrease was primarily the result of a decrease in activity volume for the
quarter.
Other income for the quarter ended June 30, 1996, was $79,278, a decrease of
approximately 51% from $161,159 in the quarter ended June 30, 1995, primarily
due to a decrease in gains from loan sales.
Gains on Sales of Securities
Gains from the sales of investment securities totalled $1,909 in the second
quarter in 1996 versus $0 in the second quarter in 1995. The sales were
principally of securities maturing in approximately 30 months.
Non Interest Expenses
Salaries and benefits expense totalled $1,247,178 in the quarter ended June 30,
1996, compared with $1,068,092 in 1995, an increase of $179,086 or 16.77%
primarily due to the addition of the Leominster and Billerica branches in the
second quarter of 1995, accruals for the incentive bonus plan, an increase in
benefit expenses and annual pay raises.
Occupancy expense was $302,761 in the quarter ended June 30, 1996, compared with
$291,358 in 1995, an increase of $11,403 or 3.92%, due to the opening of the two
new branches.
FDIC insurance expense decreased by $72,025 in 1996. The decrease was due to a
reduction in the bank's assessment rate.
Office and data processing supplies expense decreased by $81,584, or 51.14%, in
the quarter ended June 30, 1996, primarily due to the timing of expenditures and
various cost cutting initiatives.
Trust professional and custodial expenses increased due to an increase in trust
assets.
Audit, legal and other professional fees decreased in 1996 primarily due to the
extra costs in 1995 of an outside consultant hired by the bank to review the
bank's operation.
Other operating expenses increased in 1995 primarily due to the opening of the
two new branches.
27
<PAGE>
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
Not Applicable
Item 2 Changes in Securities
Not Applicable
Item 3 Defaults upon Senior Securities
Not Applicable
Item 4 Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders of the bank was held
on May 7, 1996. A vote was taken for approval of the formation
of a holding company for the bank pursuant to the Agreement
and Plan of Reorganization dated as of February 29, 1996.
Other matters voted on at the meeting included the election of
four directors of the bank for a three-year term, the election
of a clerk and assistant clerk of the bank, and the
ratification of KPMG Peat Marwick LLP as the bank's independent
auditors. Votes were cast as follows:
I. Approval of the formation of the holding company
For Against Abstain Broker Non-Vote
1,367,790 3,500 2,100 -
II. Election of four directors of the bank for a
three-year term
Nominee For Against Abstain
Kenneth S. Ansin 1,369,290 - 4,100
Eric W. Hanson 1,369,290 - 4,100
Arnold S. Lerne 1,369,290 - 4,100
Richard W. Main 1,372,290 - 1,100
III. Election of the clerk and assistant clerk of the bank
Nominee For Against Abstain
Arnold S. Lerner, 1,368,890 - 4,500
Clerk
Michael S. Spinelli, 1,368,690 3,700 1,000
Asst. Clerk
IV. Ratification of KPMG Peat Marwick LLP as independent
auditors
For Against Abstain Broker Non-Vote
1,370,891 1,499 1,000 -
28
<PAGE>
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit # Exhibit Description
10.1 Lease agreement dated July 22, 1988, between the bank and First
Holding Trust relating to the premises at 222 Merrimack Street,
Lowell, Massachusetts.
10.2 Amendment to lease dated December 28, 1990, between the bank and
First Holding Trust relating to the premises at 222 Merrimack
Street, Lowell, Massachusetts.
10.3 Amendment to lease dated August 15, 1991, between the bank and
First Holding Trust relating to the premises at 222 Merrimack
Street, Lowell, Massachusetts.
10.4 Lease Agreement dated May 26, 1992, between the bank and Shawmut
Bank, N.A., relating to the premises at 170 Merrimack Street,
Lowell, Massachusetts.
10.5 Lease agreement dated March 14, 1995, between the bank and North
Central Investment Limited Partnership relating to the premises at
2-6 Central Street, Leominster, MA.
10.6 Amended employment agreement between the bank and George L. Duncan
dated December 13, 1995.
10.7 Employment agreement between the bank and Richard W. Main dated
December 13, 1995.
29
<PAGE>
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K dated
July 26, 1996 to report the consummation of the
holding company reorganization.
30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENTERPRISE BANCORP, INC.
DATE: September 9, 1996 /s/ George L. Duncan
George L. Duncan
Chairman of the Board, Chief Executive Officer
and Chief Investment Officer
DATE: September 9, 1996 /s/ John P. Clancy, Jr.
John P. Clancy, Jr.
Senior Vice President, Chief Financial Officer,
Treasurer and Investment Manager
31
EXHIBIT 10.1
OLD CITY HALL LEASE
AGREEMENT OF LEASE ("Lease"), dated as of the 22nd day of July, 1988, by
and between Fred Faust, Trustee of First Holding Trust, with a business address
c/o First Development Group, 222 Merrimack Street, Suite 220, Lowell,
Massachusetts 01852 (hereinafter referred to as "Landlord", which term includes
successors and assigns and any subsequent owner of the Landlord's interest in
the building, real property or premises) and Whitelaw Corporation, Inc., a
Massachusetts corporation with a usual place of business at Unit 203,
Williamsburg Condominiums, 170 Main Street, Tewksbury, Massachusetts 01876
(hereinafter referred to as "Tenant", which term shall include its successors
and assigns).
ARTICLE I
REFERENCE DATA
1.1. Data.
Location of Building 222 Merrimack Street
Lowell, Massachusetts
01852
Landlord: Fred Faust, Trustee of
First Holding Trust
Original Address of Landlord c/o First Development
Group, 222 Merrimack
Street, Suite 220,
Lowell, MA 01852
Tenant: Whitelaw Corporation,
Inc.
Original Address of Tenant: Unit 203, Williamsburg
Condominiums, Main
Street, Tewksbury,
Massachusetts 01876
Real Property: The land with the
buildings thereon, if
any, located and known as
222 Merrimack Street,
Lowell, Massachusetts
01852, said land with the
buildings thereon being
owned by the United
States of America and
being more particularly
described in Exhibit E
attached hereto.
-1-
<PAGE>
National Park Service Lease The lease between the
Landlord and the United
States of America acting
through Hebert S. Cables,
Jr., Regional Director,
North Atlantic Region,
National Park Service
dated October 11, 1985,
concerning the Real
Property. A copy of the
National Park Service
Lease is attached hereto
as Exhibit C.
Building: The building currently
located on the Real
Property, which building
is subject to the
National Park Service
Lease, the terms and
conditions of which are
incorporated by reference
hereto and the
improvements, repairs,
alterations and additions
thereto.
Premises: 10,315 square feet of
interior space measured
from the center of
outside walls to the
center of the common
walls on both the first
floor and ground floor of
the Building; (as shown
on Exhibit "A" attached
hereto)
Future Building: The building which
Landlord has the option
to build pursuant to the
terms of the National
Park Service Lease on the
Real Property and the
improvements, repairs,
alterations and additions
thereto.
-2-
<PAGE>
Interior Premises Square Footage: l0,315 square feet of
interior space.
Building Net Rentable Area: 22,382 square feet, being
the total of rentable
square footage in the
Building and excluding
the common hallways,
stairwells, elevators,
mechanical rooms,
restrooms and the like
which are used in common
by more than one tenant.
Commencement Date: The date of execution of
this Lease.
Rent Commencement Date: January 1, 1989.
Construction Period Term: The period from the
Commencement Date through
the Rent Commencement
Date.
Initial Term: Three years from the Rent
Commencement Date.
Option Terms: One (1) option to extend
for a period of three
years, two (2) options to
extend for periods of
five (5) years each, and
one (1) option to extend
for a period of four (4)
years, all as provided in
Article III, Section 3.2.
Construction Period Term Rent: The sum of $15,000.00
payable on or before
thirty days after Tenant
opens for retail banking
business.
-3-
<PAGE>
Annual Fixed Rent: First floor at $62,386.08
per year for 5,687 square
feet at $10.97 per square
foot, and for the ground
floor at $22,79304 per
year for 4,628 square
feet at $4.925 per square
foot, both subject to
periodic adjustments as
provided in Article IV,
Section 4.1.3.
Permitted Uses: Banking rooms and
offices, (including all
other uses and functions
authorized for a bank
under the laws of the
United States and the
Commonwealth of
Massachusetts and
including use of
automatic teller machines
and drive-up windows)
brokerage and insurance
services, general office
space, professional use
and retail uses, except
for retail uses selling
food.
Public Liability Insurance Limits:
Bodily Injury: $1,000,000/$1,000,000
Property Damage: $1,000,000
Termination Date: Three years from the Rent
Commencement Date unless
terminated earlier or if
this lease is extended.
Mortgage: A mortgage, deed of
trust, trust indenture or
other security instrument
of record creating an
interest in or affecting
title to the Real
Property, or any part
thereof, including a
leasehold mortgage, and
any and all renewals,
modifications,
-4-
<PAGE>
consolidations, or
extensions of any such
instrument.
Mortgagee: A person, firm,
corporation or other
entity holding any
Mortgage.
Tenant's Proportionate Share: The ratio of the Interior
Premises Square Footage
to the Building Net
Rentable Area, which
initially is 46.09% and
which will increase if
Tenant leases more space
within the Building.
Unavoidable Delays: Delays due to strikes,
lockouts, labor disputes,
Acts of God, inability to
obtain labor or
materials, governmental
restrictions, emergency
acts, civil commotion,
orders or regulations of
any governmental
authority, unavoidable
casualty or other causes
beyond the reasonable
control of Landlord
(financial inability
shall not be included
with the definition of
Unavoidable Delays).
1.2. Effect of Reference to Data. Each reference in this Lease to any of
the foregoing titles or subjects contained in Article I, Section 1.1 shall be
construed to incorporate the data stated for that subject in Article I, Section
1.1.
1.3. Exhibits. The exhibits listed below in this Article are incorporated
in this Lease by reference and are to be construed as a part of this Lease.
Exhibit A - Plan showing the Premises within the Building.
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Exhibit B - Plan showing and describing the Tenant Improvements.
Exhibit C - Copy of the National Park Service Lease.
Exhibit D - Copy of the City of Lowell Tax Bill for the Tax Parcel.
Exhibit E - Legal Description of the Real Property.
ARTICLE II
DEMISED PREMISES
2.1. Premises. For and in consideration of the rents, covenants and
agreements hereinafter stipulated, reserved, mentioned or contained on the part
of the Tenant, its successors and assigns to be paid, kept, observed, and
performed, Landlord, as Lessor hereunder hereby demises and leases to Tenant and
Tenant hereby hires and rents from Landlord, for the term hereinafter set forth
and subject to and with the benefit of the terms, covenants, conditions and
provisions of this Lease, that certain space for banking and office use
(hereinafter referred to as the "Premises"), as outlined in red and shown on
Exhibit A entitled "Plan of Premises", initialed by the parties and annexed
hereto and made a part hereof, which Premises are located on the first floor and
ground floor of the Building located at 222 Merrimack Street, Lowell,
Massachusetts, 01852, and which Building is located on a parcel of land owned by
the United States of America and which is further described in Exhibit E
attached hereto (the "Real Property").
2.2. Appurtenant Rights. The Premises shall also include all appurtenant
rights now or at any time hereafter during the term of this Lease necessary for
the continued use and enjoyment thereof by Tenant and shall specifically include
as appurtenant thereto the right for Tenant and all its agents, employees,
guests and invitees to use (in common with others entitled to the use thereof)
(a) all entrances, lobbies, walkways, stairways, hallways, corridors,
passageways and driveways which now or hereafter afford access to the Premises,
and (b) the common pipes, ducts, conduits, wires and appurtenant equipment
including elevators, serving the Premises.
ARTICLE III
TERM
3.1. Construction Period Term and Initial Term. To Have and To Hold the
Premises, subject to the terms, covenants, agreements and conditions herein
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contained, for the Construction Period Term (hereinafter with the Initial Term
and any Option Terms sometimes referred to as the "Lease Term") (or until such
term shall sooner cease or expire as hereinafter provided) to commence on the
Commencement Date as hereinafter defined and to end at the close of the day
preceding the Rent Commencement Date as defined herein. To Have and To Hold the
Premises, subject to the terms, covenants, agreements and conditions herein
contained, for a term of three years (hereinafter the "Initial Term") (or until
such term shall sooner cease or expire as hereinafter provided) to commence on
the Rent Commencement Date as hereinafter defined and to end at the close of the
day preceding the third anniversary of the Rent Commencement Date, except that
if the Rent Commencement Date shall be a date other than the first day of a
calendar month, the Term shall end at the close of the last day of the calendar
month in which said third anniversary of the Rent Commencement Date shall fall.
The Commencement Date shall be the date of execution of this Lease.
3.2. Extensions; One option of three years, two options of five Years each
and one option of four Years. Tenant shall have the right, at its option to
extend the Initial Term of this Lease as set forth below, and during any option
terms, the terms of this Lease shall be the same as specified herein, with rent
and additional rent calculated pursuant to Article IV.
3.2.1. First Option Term. Tenant shall have the option, at its election, to
extend the Initial Term for an additional term of three years (hereinafter
referred to as the "First Option Term") to commence on the day next following
the end of the Initial Term and to end at the close of the day preceding the
third anniversary of the commencement of the First Option Term.
3.2.2. Second Option Term. Tenant shall have the option, at its election,
to extend the First Option Term for an additional term of five (5) years
hereinafter referred to as the "Second Option Term") to commence on the day next
following the end of the First Option Term and to end at the close of the day
preceding the fifth anniversary of the commencement of the Second Option Term.
3.2.3. Third Option Term. Tenant shall have the option, at its election, to
extend the Second Option Term for an additional term of five (5) years
(hereinafter referred to as the "Third Option Term") to commence on the day next
following the end of the Second Option Term and to end at the close of the day
preceding the fifth anniversary of the commencement of the Third Option Term.
3.2.4. Fourth Option Term. Tenant shall have the option, at its election,
to extend the Third Option Term for an additional term of four (4) years
(hereinafter referred to as the "Fourth Option Term") to commence on the day
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next following the end of the Third Option Term and to end at the close of the
day preceding the fourth anniversary of the commencement of the Fourth Option
Term.
3.3. Notice of Exercise of Extension Options. The extension options shall
be deemed automatically exercised unless Tenant notifies the Landlord, in
writing, of its intention not to exercise an extension option, said notice to be
given not less than one hundred twenty (120) days prior to the end of the then
current term, time being of the essence with respect to the giving of such
notice. In the event Tenant chooses not to exercise an extension option, the
right to future options shall automatically cease.
3.4. Bar to Rights to Exercise Extension Options. The extension options
shall be deemed automatically exercised only if this Lease is in full force and
effect and if Tenant is not in material default or breach of any of the terms,
provisions, covenants and conditions of this Lease on Tenant's part to be
observed. The existence of any material default or breach by Tenant of any of
the terms, provisions, covenants and conditions of this Lease on Tenant's part
to be observed, or if this Lease is not in full force and effect, either on the
last day Tenant can notify Landlord of its intention not to exercise an
extension option or at the end of the then current term prior to extension,
shall, if not cured by Tenant within a reasonable time after Tenant knows of the
default or breach, result in any extension being null and void and deemed not
exercised.
3.5. Commencement Date/Termination Date. When the dates of the beginning of
the Construction Period Term and the end of the Initial Term relative to the
Premises have been determined (hereinafter referred to as the Commencement Date
and the Termination Date), such dates shall, upon demand of either party, be
evidenced by a document in recordable form, executed, acknowledged and delivered
by both parties to each other setting forth said dates.
3.6. First Refusal/Option Terms. In the event Tenant exercises its rental
option or right of first refusal as described in Article XVII, Sections 17.1 and
17.2 herein to rent additional space in the Premises, said additional space
shall be for a term coextant with the then current term and the exercise of any
option term shall be deemed to be for both the Premises and the additional
space, said additional space being considered as part of the initial Premises
for all purposes under this Lease.
3.7. Condition of Title/Premises. Tenant has examined title to the Premises
and found it satisfactory and accordingly the Premises are leased subject to all
title matters of record as of the date hereof. The Premises are also leased
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subject to all federal, state, or municipal laws, ordinances, orders, and
regulations applicable to the Premises or its use by Tenant or its subtenants,
including without limitation those with respect to zoning, building, fire, land
use and development, public health and safety, and environmental protection,
whether now in effect or hereafter adopted by any governmental authorities
having jurisdiction thereof, and Tenant so accepts the Premises and agrees to be
bound by the terms of this Lease notwithstanding any violation of or
noncompliance with any of the foregoing laws, ordinances, orders or regulations
existing now or at any time hereafter during the Lease Term hereof.
At the commencement of the Lease Term, Tenant shall accept the Premises in
their existing condition and state of repair and Tenant covenants that no
representation, statements or warranties, express or implied, have been made by
or on behalf of Landlord in respect thereof except as set forth herein, in
respect of their condition or the use that may be made thereof and that Landlord
shall in no event whatsoever be liable for any latent defects therein.
ARTICLE IV
RENT
4.1. The Rent. Tenant covenants and agrees to pay rent, without any set-off
or deduction, to Landlord or to such agent as designated by Landlord, at
Landlord's Original Address or to such other address as Landlord may by notice
in writing to Tenant from time to time direct, at the following rates and times:
4.1.1. Construction Period Term Rent. Construction Period Term Rent for the
Premises on or before thirty days after Tenant opens for retail banking business
in the amount of Fifteen Thousand and 00/100 ($15,000.00) Dollars. In the event
Tenant exercises its option to terminate this Lease pursuant to Article XXI,
Section 21.11 there will be no obligation to pay Construction Period Term Rent.
4.1.2. Annual Fixed Rent.
(a) First Year. Annual Fixed Rent for the First floor of the Premises and
the ground floor of the Premises commencing on the Rent Commencement Date and
ending at the close of the day preceding the first anniversary of the Rent
Commencement Date (the "First Rental Adjustment Year) at the rate for the First
floor of Sixty Two Thousand Three Hundred Eighty Six and 08/100 ($62,386.08)
Dollars per annum, payable in advance, in monthly installments of Five Thousand
One Hundred Ninety Eight and 84/100 ($5,198.84) Dollars each and at the rate for
the ground floor of Twenty Two Thousand Seven Hundred Ninety Three and 04/100
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($22,793.04) Dollars per annum, payable in advance in monthly installments of
One Thousand Eight Hundred Ninety Nine and 42/100 ($1,899.42) Dollars each.
4.1.2.1. Annual Fixed Rent for the Fourth Floor. In the event Lessee
exercises its option pursuant to Article XVII, Section 17.1 the Annual Fixed
Rent for said fourth floor shall be as follows:
First Year. Annual Fixed Rent for the Fourth Floor of the Premises
commencing on the date Tenant has the right to occupy the Fourth Floor of the
Building (the "Fourth Floor Occupancy Date") and ending at the close of the day
preceding the first anniversary of the Fourth Floor Occupancy Date (the "First
Fourth Floor Rental Adjustment Year") at the rate of Thirty Three Thousand One
Hundred Twenty One and 08/100 ($33,121.081 Dollars per annum, payable in
advance, in monthly installments of Two Thousand Seven Hundred Sixty and 09/100
($2,760.09) Dollars each.
4.1.3. Annual Fixed Rent Adjustments. During the Initial Term of this Lease
and in the event Tenant exercises any of its options to extend the term of this
Lease in accordance with Article III, the Annual Fixed Rent for both the first
floor and ground floor of the Premises during such initial and option terms
shall be increased on every anniversary of the Rent Commencement Date for the
next six years and then shall be increased every two years as described below.
Each anniversary of the Rent Commencement Date shall be known as a Rental
Adjustment Year as distinguished from a yearly anniversary from the Commencement
Date, which is used for calculating the Lease and Option Terms or from the
Fourth Floor Occupancy Date, which is used for calculating increases in the
Annual Fixed Rent for the Fourth Floor of the Premises pursuant to Section
4.1.3.1. below.
(a) Second Rental Adjustment Year. Annual Fixed Rent for the First
floor of the Premises and the ground floor of the Premises commencing on the
first day of the Second Rental Adjustment Year and ending at the close of the
day preceding the second anniversary of the Rent Commencement Date at the rate
for the First floor of Sixty Five Thousand One Hundred Ninety Four and 08/100
($65,194.08) Dollars per annum, payable in advance, in monthly installments of
Five Thousand Three Hundred Two and 84/100 ($5,432.84) Dollars each and at the
rate for the ground floor of Twenty Three Thousand Eight Hundred Nineteen and
04/100 ($23,819.04) Dollars per annum, payable in advance in monthly
installments of One Thousand Nine Hundred Eighty Four and 92/100 ($1,984.92)
Dollars each.
(b) Third Rental Adjustment Year. Annual Fixed Rent for the First
floor of the Premises and the ground floor of the Premises commencing on the
first day of the Third Rental Adjustment Year and ending at the close of the day
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preceding the third anniversary of the Rent Commencement Date at the rate for
the First floor of Sixty Eight Thousand One Hundred Twenty Seven and 00/100
($68,127.00) Dollars per annum, payable in advance, in monthly installments of
Five Thousand Six Hundred Seventy Seven and 25/100 ($5,677.25) Dollars each and
at the rate for the ground floor of Twenty Four Thousand Eight Hundred Ninety
and 00/100 ($24,890.04) Dollars per annum, payable in advance in monthly
installments of Two Thousand Seventy Four and 17/100 ($2,074.17) Dollars each.
(c) Fourth Rental Adjustment Year. Annual Fixed Rent for the First
floor of the Premises and the ground floor of the Premises commencing on the
first day of the Fourth Rental Adjustment Year and ending at the close of the
day preceding the fourth anniversary of the Rent Commencement Date at the rate
for the First floor of Seventy One Thousand One Hundred Ninety Three and 00/100
($71,193.00) Dollars per annum, payable in advance, in monthly installments of
Five Thousand Nine Hundred Thirty Two and 75/100 ($5,932.75) Dollars each and at
the rate for the ground floor of Twenty Six Thousand Ten and 00/100 ($26,010.00)
Dollars per annum, payable in advance in monthly installments of Two Thousand
One Hundred Sixty Seven and 50/100 ($2,167.50) Dollars each.
(d) Fifth Rental Adjustment Year. Annual Fixed Rent for the First
floor of the Premises and the ground floor of the Premises commencing on the
first day of the Fifth Rental Adjustment Year and ending at the close of the day
preceding the fifth anniversary of the Rent Commencement Date at the rate for
the First floor of Seventy Four Thousand Three Hundred Ninety Seven and 00/100
($74,397.00) Dollars per annum, payable in advance, in monthly installments of
Six Thousand One Hundred Ninety Nine and 75/100 ($6,199.75) Dollars each and at
the rate for the ground floor of Twenty Seven Thousand One Hundred Eighty One
and 08/100 ($27,181.08) Dollars per annum, payable in advance in monthly
installments of Two Thousand Two Hundred Sixty Five and 09/100 ($2,265.09)
Dollars each.
(e) Sixth and Seventh Rental Adjustment Years. Annual Fixed Rent for
the First floor of the Premises and the ground floor of the Premises commencing
on the first day of the Sixth Rental Adjustment Year and ending at the close of
the day preceding the seventh anniversary of the Rent Commencement Date at the
rate for the First floor of Seventy Seven Thousand Seven Hundred Forty Five and
00/100 ($77,745.00) Dollars per annum, payable in advance, in monthly
installments of Six Thousand Four Hundred Seventy Eight and 75/100 ($6,478.75)
Dollars each and at the rate for the ground floor of Twenty Eight Thousand Four
Hundred Four and 00/100 ($28,404.00) Dollars per annum, payable in advance in
monthly installments of Two Thousand Three Hundred Sixty Seven and 00/100
($2,367.00) Dollars each.
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(f) Eighth and Ninth Rental Adjustment Years. Beginning with the
yearly period commencing on the first day of the Sixth Rental Adjustment Year
and ending at the close of the day preceding the sixth anniversary of the Rent
Commencement Date, a rental amount (the "CPI Rental Amount") for said yearly
period shall be calculated by increasing the annual fixed rent payable pursuant
to Article IV, Section 4.1.3. (e) above by one half (1/2) of the percentage
increase in the United States Consumer Price Index, for U.S. Cities, All Urban
Consumers (the "Index") for said yearly period. Thereafter for the next
succeeding yearly period a new CPI Rental Amount shall be calculated by
increasing the previous yearly CPI Rental Amount by one half (l/2) of the
percentage increase in the Index for the previous yearly period. The resulting
new CPI Rental Amount, calculated after two years, shall be the new Annual Fixed
Rent for the Eighth and Ninth Rental Adjustment Years.
(g) Tenth and Eleventh Rental Adjustment Years. Beginning with the
yearly period commencing on the first day of the Eighth Rental Adjustment Year
and ending at the close of the day preceding the eighth anniversary of the Rent
Commencement Date, a rental amount (the "CPI Rental Amount") for said yearly
period shall be calculated by increasing the Annual Fixed Rent for the Eighth
and Ninth Rental Adjustment Years_by one half (1/2) of the percentage increase
in the Index for said yearly period. Thereafter for the next succeeding yearly
period a new CPI Rental Amount shall be calculated by increasing the previous
yearly CPI Rental Amount by one half (1/2) of the percentage increase in the
Index for the previous yearly period. The resulting new CPI Rental Amount,
calculated after two years, shall be the new Annual Fixed Rent for the Tenth and
Eleventh Rental Adjustment Years.
(h) Twelfth and Thirteenth Rental Adjustment Years. Beginning with the
yearly period commencing on the first day of the Tenth Rental Adjustment Year
and ending at the close of the day preceding the tenth anniversary of the Rent
Commencement Date, a rental amount (the "CPI Rental Amount") for said yearly
period shall be calculated by increasing the Annual Fixed Rent for the Tenth and
Eleventh Rental Adjustment Years by one half (1/2) of the percentage increase in
the Index for said yearly period. Thereafter for the next succeeding yearly
period a new CPI Rental Amount shall be calculated by increasing the previous
yearly CPI Rental Amount by one half (1/2) of the percentage increase in the
Index for the previous yearly period. The resulting new CPI Rental Amount,
calculated after two years, shall be the new Annual Fixed Rent for the Twelfth
and Thirteenth Rental Adjustment Years.
(i) Fourteenth and Fifteenth Rental Adjustment Years. Beginning with
the yearly period commencing on the first day of the Twelfth Rental Adjustment
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Year and ending at the close of the day preceding the twelfth anniversary of the
Rent Commencement Date, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the Annual Fixed Rent for the
Twelfth and Thirteenth Rental Adjustment Years by one half (12) of the
percentage increase in the Index for said yearly period. Thereafter for the next
succeeding yearly period a new CPI Rental Amount shall be calculated by
increasing the previous yearly CPI Rental Amount by one half (1/2) of the
percentage increase in the Index for the previous yearly period. The resulting
new CPI Rental Amount, calculated after two years, shall be the new Annual Fixed
Rent for the Fourteenth and Fifteenth Rental Adjustment Years.
(j) Sixteenth and Seventeenth Rental Adjustment Years. Beginning with
the yearly period commencing on the first day of the Fourteenth Rental
Adjustment Year and ending at the close of the day preceding the fourteenth
anniversary of the Rent Commencement Date, a rental amount (the "CPI Rental
Amount") for said yearly period shall be calculated by increasing the Annual
Fixed Rent for the Fourteenth and Fifteenth Rental Adjustment Years by one half
(1/2) of the percentage increase in the Index for said yearly period. Thereafter
for the next succeeding yearly period a new CPI Rental Amount shall be
calculated by increasing the previous yearly CPI Rental Amount by one half (1/2)
of the percentage increase in the Index for the previous yearly period. The
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the Sixteenth and Seventeenth Rental Adjustment Years.
(k) Eighteenth and Nineteenth Rental Adjustment Years. Beginning with
the yearly period commencing on the first day of the Sixteenth Rental Adjustment
Year and ending at the close of the day preceding the sixteenth anniversary of
the Rent Commencement Date, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the Annual Fixed Rent for the
Sixteenth and Seventeenth Rental Adjustment Years by one half (1/2) of the
percentage increase in the Index for said yearly period. Thereafter for the next
succeeding yearly period a new CPI Rental Amount shall be calculated by
increasing the previous yearly CPI Rental Amount by one half (1/2) of the
percentage increase in the Index for the previous yearly period. The resulting
new CPI Rental Amount, calculated after two years, shall be the new Annual Fixed
Rent for the Eighteenth and Nineteenth Rental Adjustment Years.
(1) Twentieth Rental Adjustment Year. Beginning with the yearly period
commencing on the first day of the Eighteenth Rental Adjustment Year and ending
at the close of the day preceding the eighteenth anniversary of the Rent
Commencement Date, a rental amount (the "CPI Rental Amount") for said yearly
period shall be calculated by increasing the Annual Fixed Rent for the
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Eighteenth and Nineteenth Rental Adjustment Years by one half (12) of the
percentage increase in the Index for said yearly period. Thereafter for the next
succeeding yearly period a new CPI Rental Amount shall be calculated by
increasing the previous yearly CPI Rental Amount by one half (1/2) of the
percentage increase in the Index for the previous yearly period. The resulting
new CPI Rental Amount, calculated after two years, shall be the new Annual Fixed
Rent for the Twentieth Rental Adjustment Year.
4.1.3.1. Annual Fixed Rent Adjustments; Fourth Floor. During the Initial
Term of this Lease and in the event Tenant exercises any of its options to
extend the term of this Lease in accordance with Article III, the Annual Fixed
Rent for the Fourth Floor of the Premises during such initial and option terms
shall be increased on every anniversary of the Fourth Floor Occupancy Date for
the next eight years and then shall be increased every two years as described
below. Each anniversary of the Fourth Floor Occupancy Date shall be known as a
Fourth Floor Rental Adjustment Year as distinguished from a yearly anniversary
from the Commencement Date, which is used for calculating the Lease and Option
Term or from a Rent Commencement Date, which is used for calculating Annual
Fixed Rent Adjustments for the first floor and ground floor of the Premises
pursuant to Section 4.1.3. above.
(a) Second Fourth Floor Rental Adjustment Year. Annual Fixed Rent for the
Fourth Floor of the Premises commencing on the first day of the Second Fourth
Floor Rental Adjustment Year and ending at the close of the day preceding the
second anniversary of the Fourth Floor Occupancy Date at the rate of Thirty Four
Thousand Six Hundred Eleven and 00/100 ($34,611.00) Dollars per annum, payable
in advance, in monthly installments of Two Thousand Eight Hundred Eighty Four
and 25/100 ($2,884.25) Dollars each.
(b) Third Fourth Floor Rental Adjustment Year. Annual Fixed Rent for the
Fourth Floor of the Premises commencing on the first day of the Third Fourth
Floor Rental Adjustment Year and ending at the close of the day preceding the
third anniversary of the Fourth Floor Occupancy Date at the rate of Thirty Six
Thousand One Hundred Sixty Nine and 08/100 ($36,169.08) Dollars per annum,
payable in advance, in monthly installments of Three Thousand Fourteen and
09/100 ($3,014.09) Dollars each.
(c) Fourth Floor Rental Adjustment Year. Annual Fixed Rent for the Fourth
Floor of the Premises commencing on the first day of the Fourth Floor Rental
Adjustment Year and ending at the close of the day preceding the fourth
anniversary of the Fourth Floor Occupancy Date at the rate of Thirty Seven
Thousand Seven Hundred Ninety Six and 04/100 $37,796.04) Dollars per annum,
payable in advance, in monthly installments of Three Thousand One Hundred Forty
Nine and 67/100 ($3,149.67) Dollars each.
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(d) Fifth Fourth Floor Rental Adjustment Year. Annual Fixed Rent for the
Fourth Floor of the Premises commencing on the first day of the Fifth Fourth
Floor Rental Adjustment Year and ending at the close of the day preceding the
fifth anniversary of the Fourth Floor Occupancy Date at the rate of Thirty Nine
Thousand Four Hundred Ninety Seven and 04/100 ($39,497.04) Dollars per annum,
payable in advance, in monthly installments of Three Thousand Two Hundred Ninety
One and 42/100 ($3,291.42) Dollars each.
(e) Sixth Fourth Floor Rental Adjustment Year. Annual Fixed Rent for the
Fourth Floor of the Premises commencing on the first day of the Sixth Fourth
Floor Rental Adjustment Year and ending at the close of the day preceding the
sixth anniversary of the Fourth Floor Occupancy Date at the rate of Forty One
Thousand Two Hundred Seventy Five and_08/100 ($41,275.08) Dollars per annum,
payable in advance, in monthly installments of Three Thousand Four Hundred
Thirty Nine and 59/100 ($3,439.59) Dollars each.
(f) Seventh and Eighth Fourth Floor Rental Adjustment Years. Annual Fixed
Rent for the Fourth Floor of the Premises commencing on the first day of the
Seventh Fourth Floor Rental Adjustment Year and ending at the close of the day
preceding the eighth anniversary of the Fourth Floor Occupancy Date at the rate
of Forty Three Thousand One Hundred Thirty Two and 08100 ($3,132.08) Dollars per
annum, payable in advance, in monthly installments of Three Thousand Five
Hundred Ninety Four and 34100 ($3,594.34) Dollars each.
(g) Ninth and Tenth Fourth Floor Rental Adjustment Years. Annual Fixed Rent
for the Fourth Floor of the Premises commencing on the first day of the Seventh
Fourth Floor Rental Adjustment Year and ending at the close of the day preceding
the eighth anniversary of the Fourth Floor Occupancy Date, a rental amount (the
"CPI Rental Amount") for said yearly period shall be calculated by increasing
the annual fixed rent payable pursuant to Article IV, Section 4.1.3.1. (f) above
by one half (1/2) of the percentage increase in the United States Consumer Price
Index, for U.S. Cities, All Urban Consumers (the "Index) for said yearly period.
Thereafter for the next succeeding yearly period a new CPI Rental Amount shall
be calculated by increasing the previous yearly CPI Rental Amount by one half
(1/2) of the percentage increase in the Index for the previous yearly period.
The resulting new CPI Rental Amount, calculated after two years, shall be the
new Annual Fixed Rent for the Ninth and Tenth Fourth Floor Rental Adjustment
Years.
(h) Eleventh and Twelfth Fourth Floor Rental Adjustment Years. Beginning
with the yearly period commencing on the first day of the Ninth Fourth Floor
Rental Adjustment Year and ending at the close of the day preceding the ninth
anniversary of the Fourth Floor Occupancy Date, a rental amount (the "CPI Rental
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Amount") for said yearly period shall be calculated by increasing the Annual
Fixed Rent for the Ninth and Tenth Fourth Floor Rental Adjustment Years by one
half (12) of the percentage increase in the Index for said yearly period.
Thereafter for the next succeeding yearly period a new CPI Rental Amount shall
be calculated by increasing the previous yearly CPI Rental Amount by one half
(1/2) of the percentage increase in the Index for the previous yearly period.
The resulting new CPI Rental Amount, calculated after two years, shall be the
new Annual Fixed Rent for the Eleventh and Twelfth Fourth Floor Rental
Adjustment Years.
(i) Thirteenth and Fourteenth Fourth Floor Rental Adjustment Years.
Beginning with the yearly period commencing on the first day of the Eleventh
Fourth Floor Rental Adjustment Year and ending at the close of the day preceding
the eleventh anniversary of the Fourth Floor Occupancy Date, a rental amount
(the "CPI Rental Amount") for said yearly period shall be calculated by
increasing the Annual Fixed Rent for Eleventh and Twelfth Fourth Floor Rental
Adjustment Years by one half (1/2) of the percentage increase in the Index for
said yearly period. Thereafter for the next succeeding yearly period a new CPI
Rental Amount shall be calculated by increasing the previous yearly CPI Rental
Amount by one half (1/2) of the percentage increase in the Index for the
previous yearly period. The resulting new CPI Rental Amount, calculated after
two years, shall be the new Annual Fixed Rent for the Thirteenth and Fourteenth
Fourth Floor Rental Adjustment Years.
(j) Fifteenth and Sixteenth Fourth Floor Rental Adjustment Years. Beginning
with the yearly period commencing on the first day of the Thirteenth Fourth
Floor Rental Adjustment Year and ending at the close of the day preceding the
thirteenth anniversary of the Fourth Floor Occupancy Date, a rental amount (the
"CPI Rental Amount") for said yearly period shall be calculated by increasing
the Annual Fixed Rent for Thirteenth and Fourteenth Fourth Floor Rental
Adjustment Years by one half (1/2) of the percentage increase in the Index for
said yearly period. Thereafter for the next succeeding yearly period a new CPI
Rental Amount shall be calculated by increasing the previous yearly CPI Rental
Amount by one half (1/2) of the percentage increase in the Index for the
previous yearly period. The resulting new CPI Rental Amount, calculated after
two years, shall be the new Annual Fixed Rent for the Fifteenth and Sixteenth
Fourth Floor Rental Adjustment Years.
(k) Seventeenth and Eighteenth Fourth Floor Rental Adjustment Years=.
Beginning with the yearly period commencing on the first day of the Fifteenth
Fourth Floor Rental Adjustment Year and ending at the close of the day preceding
the fifteenth anniversary of the Fourth Floor Occupancy Date, a rental amount
(the "CPI Rental Amount") for said yearly period shall be calculated by
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increasing the Annual Fixed Rent for Fifteenth and Sixteenth Fourth Floor Rental
Adjustment Years by one half (1/2) of the percentage increase in the Index for
said yearly period. Thereafter for the next succeeding yearly period a new CPI
Rental Amount shall be calculated by increasing the previous yearly CPI Rental
Amount by one half (12) of the percentage increase in the Index for the previous
yearly period. The resulting new CPI Rental Amount, calculated after two years,
shall be the new Annual Fixed Rent for the Seventeenth and Eighteenth Fourth
Floor Rental Adjustment Years.
(1) Nineteenth and Twentieth Fourth Floor Rental Adjustment Years.
Beginning with the yearly period commencing on the first day of the Seventeenth
Fourth Floor Rental Adjustment Year and ending at the close of the day preceding
the seventeenth anniversary of the Fourth Floor Occupancy Date, a rental amount
(the 'CPI Rental Amount") for said yearly period shall be calculated by
increasing the Annual Fixed Rent for Seventeenth and Eighteenth Fourth Floor
Rental Adjustment Years by one half (1/2) of the percentage increase in the
Index for said yearly period. Thereafter for the next succeeding yearly period a
new CPI Rental Amount shall be calculated by increasing the previous yearly CPI
Rental Amount by one half (1/2) of the percentage increase in the Index for the
previous yearly period. The resulting new CPI Rental Amount, calculated after
two years, shall be the new Annual Fixed Rent for the Nineteenth and Twentieth
Fourth Floor Rental Adjustment Years.
4.1.4. Payment Due Dates. Annual Fixed Rent shall be payable in advance, in
equal monthly installments of l/12th of the Annual Fixed Rent on the first day
of each calendar month from and after the Rent Commencement Date.
4.1.5. Proration of Annual Fixed Rent for Partial Months. For any period
that the Tenant is in possession of the Premises at the expiration of any term,
Annual Fixed Rent and Additional Rent shall be prorated on a per diem basis for
such period.
4.1.6. Cessation of Index - No Decreases. In the event the Index ceases to
be published a successor and comparable index shall be chosen by both parties.
Said new index shall be used to calculate adjustments in the Annual Fixed Rent
in the same manner as the Index as aforesaid from the date the Index ceased to
be published. In the event in any yearly period the Index, or any substitute
index decreases, in no event shall the calculations, being the CPI Rental
Amounts, be reduced to less than the previous yearly figure.
4 2. Additional Rent. Tenant covenants and agrees to pay, as Additional
Rent, its Tenant's Proportionate Share of the taxes, betterment assessments and
the like as set forth in Article V, the Parking Lot Taxes as defined in Article
V, Section 5.6 and the operating expenses as set forth in Article XIX which may
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arise or become due during the Lease Term and the Landlord shall be indemnified
and saved harmless by Tenant from and against the same.
4.3. Other Charges. Tenant shall pay directly to the authority charged with
collection thereof all permit and license fees, rates and other governmental
impositions and charges of every kind, which shall during the Lease Term be
charged, levied, assessed, imposed, become due and payable or liens upon or
arise in connection with the use, occupancy, or possession of the Premises by
Tenant, all such payments to be made not less than five (5) days prior to the
last date on which the same may be paid without interest or penalty. Tenant
shall promptly after payment thereof furnish Landlord with reasonable evidence
of such payment.
All taxes, charges, costs and expenses which Tenant assumes or agrees to
pay under the provisions of this Lease, together with all interest and penalties
that may accrue thereon in the event of the Tenant's failure to pay the same as
herein provided, all other damages, costs and expenses which Landlord may suffer
or incur, and any and all sums which may become due, by reason of any default of
Tenant or failure on Tenant's part to comply with the agreements, terms,
covenants and conditions of this Lease on Tenant's part to be performed shall be
deemed Additional Rent and, in the event of non-payment, Landlord shall have all
the rights and remedies herein provided in the case of non-payment of rent.
44. Payment of Additional Rent. Except as otherwise specifically provided
herein, any sum, amount, item or charge designated or considered as Additional
Rent in this Lease shall, following notice to Tenant, on or before the thirtieth
(30th) day after giving of such notice to Tenant, be paid by Tenant to Landlord,
without any set-off or deduction, at Landlord's Original Address, or at such
other location or address as Landlord may designate. Any such notice shall
contain and specify in reasonable detail, an itemized breakdown for the basis of
such Additional Rent. Upon request of Tenant, Landlord shall furnish Tenant with
a copy of such invoices, bills and the like, except for petty cash and other
small miscellaneous items, upon which it based its itemized breakdown.
4.5. Penalty for Late payment of Rent. If payment of Annual Fixed Rent or
Additional Rent are not received by the Landlord within seven (7) business days
of the date when such are due under the provisions hereof, Tenant agrees to pay
to Landlord as Additional Rent three percent (3%) of any amount due. Sums due
hereunder shall be payable in addition to and not in exclusion of the additional
remedies herein provided for to the Landlord.
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4.6. Survival of Rent Obligations. Any obligation of Tenant under this
Article to pay Annual Fixed Rent or Additional Rent, which shall not have been
performed at the expiration of the Term of this Lease, shall survive such
expiration and shall be discharged by payment or payments in cash, as the amount
of the same shall from time to time be determined to be due.
ARTICLE V
TAX PAYMENTS
5.1. Tax Year. For the purpose of this Article V the term Tax Year shall
mean the twelve-month period commencing on July 1, 1989 and ending June 30, 1990
and every twelve-month period commencing on July 1 of each year subsequent to
said yearly period and ending on June 30 of the following calendar year.
5.2. Definition of Taxes and Tax Parcel. For purposes of this Article V the
term taxes shall mean any tax upon the Tax Parcel levied or imposed by any
governmental tax authority as, in addition to, in lieu of, or as a substitute
for, real estate taxes assessed on the date of this Lease and any increase in
the same whether by reason of an increase in the real estate tax rate or the
assessed valuation, or both of the Tax Parcel, or by reason of the levy,
assessment or imposition of any tax, betterment, or assessment on any real
estate as such not now levied, assessed or imposed. The term Tax Parcel shall
mean the Building and the Real Property upon which it sits and as currently
assessed as a separate parcel by the City of Lowell and as shown on the copy of
the tax bill attached hereto as Exhibit D. Specifically excluded is the Real
Property upon which sits the current parking lot, which is assessed as a
separate parcel by the City of Lowell.
5.3. Obligation to pay Tenant's Proportionate Share. Tenant shall be
obligated to pay its Tenant's Proportionate Share of the taxes to Landlord as
follows:
(a) Tenant shall pay to Landlord as Additional Rent, an amount, equal to (i) the
total amount of the taxes for each Tax Year on the Tax Parcel multiplied by (ii)
the Tenant's Proportionate Share apportioned for any fraction of a Tax Year in
which the Commencement Date falls or the Term of this Lease ends.
(b) Landlord shall submit to Tenant, not more than forty-five (45) days and not
less than twenty (20) days prior to the last day on which real estate taxes or
any installments thereon may be paid to the City of Lowell, or to any other
governmental authority, without penalty or interest, a written notice set forth
the amount of Tenant's payment due to Landlord. Landlord's failure to comply
with the foregoing shall not be deemed a waiver by Landlord of Tenant's
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obligation to pay to Landlord any Additional Rent due hereunder. Within fourteen
(14) days after the receipt of such written notice, whether or not such
statement shall be timely, Tenant shall pay to Landlord the payment required
under (a) above.
(c) With respect to any Tax Year which shall commence prior to the Rent
Commencement Date or extend beyond the Term of this Lease, any Additional Rent
payable by Tenant shall be reduced to that proportion of such Additional Rent as
the number of days remaining during the Term of this Lease and falling within
such Tax Year bears to 365. In the event the first day of the Tax Year in the
City of Lowell should be changed after the Rent Commencement Date to a day other
than July 1 so as to change the twelve-month period comprising the Tax Year, in
determining any Additional Rent to be paid by Tenant under this Article V, with
respect to the real estate taxes for the period between July 1 and such changed
first day of the Tax Year, the Tax Amount shall be multiplied by a fraction, the
numerator of which shall be the number of days elapsing during such period, and
the denominator of which shall be 365.
5.4 Tax Refund. If Landlord shall receive any tax refund or
reimbursement of taxes or amount in lieu thereof with respect to any Tax Year,
then out of any balance remaining thereof, after deducting Landlord's expenses
reasonably incurred in obtaining such refund, Landlord shall pay to Tenant,
provided the Tenant is not then in default of any payments due under this Lease,
an amount equal to such refund or reimbursement, or any amount in lieu thereof,
multiplied by the Tenant's Proportionate Share but not exceeding the sum paid by
Tenant as required under Section 5.3. above.
Tenant shall have the right, if Landlord does not file for an abatement
of real estate taxes, to apply at its sole cost and expense for an abatement of
real estate taxes assessed against the Tax Parcel, in its own name or the name
of the Landlord. If Tenant shall file an application for an abatement for any
tax year, Tenant shall prosecute the same to final determination with due
diligence and shall not without Landlord's written consent, which consent shall
not be unreasonably withheld, settle, compromise or discontinue it. Landlord
agrees to cooperate and furnish any pertinent information in its files to Tenant
reasonably required by Tenant in prosecuting the abatement. If Tenant receives
an abatement on the Tax Parcel, the cost and expense of obtaining the abatement
shall be a first charge upon said abatement.
5.5. Real Property and Future Building. Tenant and Landlord recognize
that the taxes being paid by Tenant include only the taxes for the Tax Parcel
They further recognize that under the terms of the National Park Service Lease
that the Landlord may, but is not obligated to erect the Future Building upon a
portion of the Real Property. In the event that Landlord does not erect said
Future Building, and a park is built as contemplated by the National Park
Service Lease, Tenant's obligation to pay its proportionate share of the taxes
shall be construed to include any taxes assessed upon that portion of the Real
Property from the date the park is constructed through the end of the Lease Term
and that portion of the Real Property formerly being the parking lot, shall be
then considered as part of the Tax Parcel.
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5.6. Parking Lot Taxes. Tenant and Landlord recognize that the Real
Property upon which sits the current parking lot, is assessed as a separate tax
parcel by the City of Lowell. From the Rent Commencement Date until such time as
that parcel of land ceases to be used as a parking lot, Tenant agrees that it
shall pay to Landlord, as Additional Rent, Thirty Eight and 10/100 (38.10%)
percent of the real estate taxes (as defined in Section 5.2 above) for said
separate parcel. For purposes of this Section 5.6, the definition in Section
5.1, the obligation to pay in Section 5.3. (b) and (c), the rights under Section
5.4 and the obligations under Section 5 7, shall all be applicable.
5.7. Survival of Obligation. Any obligation of Tenant under this Article V
to pay Additional Rent or on the part of Landlord to pay an amount to Tenant,
which shall not have been performed at the expiration of the Lease Term, shall
survive such expiration and shall be discharged by payment or payments in cash,
as the amount of the same shall from time to time be determined to be due.
ARTICLE VI
Utilities and Services
6.1. Installation of Utilities and Services Provided by Landlord. Landlord
shall provide, or cause to be provided, as part of the original installations
leading to the Premises, the necessary mains, conduits, facilities and fixtures
in order that all utility services may be furnished to the Premises. Landlord
further represents that the electrical and heating and air conditioning
facilities servicing the premises are reasonably adequate for general office and
retail uses. In the event said facilities are not adequate, Landlord agrees to
improve the same at its sole cost and expense so that they are adequate. Should
Tenant require for its uses that such facilities have technical capabilities
which exceed normal requirements, Tenant may improve the same at its sole cost
and expense.
Landlord will, without extra charge, except as provided herein, during the
period the Tenant shall occupy the Premises under the terms hereof furnish
elevator service, plumbing, electrical and heating and air conditioning
facilities and fixtures to service the Premises and furnish electricity for
lighting and lights for the Common Areas but not for the Premises. In addition
to the above, Landlord agrees to clean the exterior of the windows in the
Building at least four times during a calendar year.
6.2. Utilities and Charges Therefor. Tenant agrees to pay or cause to be
paid directly to the provider of or party charged with the collection of, all
charges for water/sewer, gas, electricity, light, heat, and power, telephone, or
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other service used, rendered or supplied to or for the Tenant upon or in
connection with the Premises throughout the term of this Lease, and to indemnify
Landlord and save it harmless against any liability or damages on such account.
Landlord has installed separate utility meters for the Premises and other
separate utility meters throughout the Building for other tenant spaces and
shall, in any lease or other rental agreements for space within the Building,
require each tenant to be responsible for the payment of all utility charges
incurred by them. The Landlord has installed separate utility meters for the
common areas of the Building the charges therefore are to be paid, in part by
Tenant pursuant to Article XIX. It is understood and agreed that,
notwithstanding the fact that Landlord shall supply and furnish such utilities
to the Premises, Landlord shall not be liable for any interruption or failure in
the supply of any such utilities to the Premises.
ARTICLE VII
CARE OF PREMISES AND REPAIRS
7.1. Tenant Repairs. Tenant shall act with care in its use and occupancy of
the Premises and the fixtures therein and, at Tenant's sole cost and expense,
shall make all repairs and replacements to the Premises, structural or
otherwise, necessitated or occasioned by the acts, omissions or negligence of
Tenant or any person claiming through or under Tenant or by the use or occupancy
or manner of use or occupancy of the Premises by Tenant or any such person.
Without affecting Tenant's obligations set forth in the preceding sentence,
Tenant, at Tenant's sole cost and expense, shall also make all repairs and
replacements, as and when necessary, to Tenant's Special Installations
(including but without being limited to any signage on the doors or windows) and
to any alterations made or performed by or on behalf of Tenant or any person
claiming through or under Tenant. In addition to the foregoing, all damage or
injury to the Premises and to its fixtures, appurtenances and equipment or to
the Building or to its fixtures, appurtenances and equipment caused by Tenant
moving property in or out of the Building or by installation or removal of
furniture, fixtures, or other property by Tenant, or caused by Tenant for any
reason whatsoever, shall be repaired, restored or replaced promptly by Tenant to
the reasonable satisfaction of Landlord at Tenant's sole cost and expense. All
such aforesaid repairs, restoration and replacements shall be in quality and
class equal to the original work or installation. Upon receipt of Tenant's
written request Landlord may, at its sole election, cause to be made available
proceeds of Landlord's insurance for repair, in whole or in part, of any such
damage or injury to the Building or to its fixtures, appurtenances, or
equipment.
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In the event that Tenant neglects or fails to make such repairs and
replacements as aforesaid, Landlord shall make such repairs and replacements at
Tenant's expense; and, Tenant shall, upon written notice from Landlord,
reimburse Landlord for all reasonable costs and expenses paid or incurred by
Landlord in effecting such repairs and replacements.
7.2. Landlord Repairs. Except as otherwise provided in Section 7.1. of this
Article VII, Landlord shall make the following repairs as and when necessary:
(i) structural repairs to the Premises and Building; (ii) repairs required in
order to provide the elevator, plumbing, electrical, heating and air
conditioning services to be furnished by Landlord pursuant to this Lease; (iii)
repairs to exterior portions of the Building, including the walls, windows and
roof thereof; and (iv) other repairs to the Building necessary for Tenant's use
and enjoyment of the Premises. Landlord's obligations under the immediately
preceding sentence shall not accrue until after either written notice by Tenant
to Landlord of the necessity for any specific repair or at such time as the need
to make repairs becomes reasonably evident to Landlord. Landlord shall have a
reasonable period of time to respond in effectuating any such repairs and shall
prosecute such repairs with all reasonable speed and due diligence.
7.3. Tenant to Insure Its Own Special Installations and Personal Property.
All personal property of the Tenant or Special Installations in the Premises or
in the Building shall be at the sole risk of the Tenant and Tenant shall,
throughout the Term of this Lease, keep same insured against all loss or damage
by fire or other casualty. The Landlord shall not be liable for any injury or
damage to Tenant or its employees, invitees, occupants or persons in or on the
Premises or to the property of Tenant resulting from the use of the heating,
cooling, electrical or plumbing apparatus or any other cause except that caused
by Landlord's negligence. Landlord shall not, in any event, be liable for
damages or injury resulting from water, steam or other causes except that caused
by Landlord's negligence. Tenant hereby expressly releases Landlord from any
liability incurred or claimed by reason of such damage or injury except that
caused by Landlord's negligence. Landlord shall not be liable in damages nor
shall this Lease be affected for conditions arising or resulting (and which may
affect the Building of which the Premises are a part) due to construction on
contiguous premises.
7.4. Personal Injury and Property Damage Within the Leased Premises. The
Landlord assumes no liability or responsibility whatsoever with respect to the
conduct and operation of the Tenant's business to be conducted in the Premises.
The Landlord shall not be liable for any accident or injury to any person or
persons or property in or about the Premises which are caused by
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the conduct and operation of said business or by virtue of equipment or property
of the Tenant in said Premises. The Tenant agrees to hold the Landlord harmless
against all such claims.
ARTICLE VIII
TENANT'S ADDITIONAL COVENANTS
8.1. Affirmative Covenants. Tenant covenants at its expense, at all times
during the Lease Term and such further time as Tenant occupies the Premises or
any part thereof as follows:
8.1.1. Permitted Uses. To use the Premises for banking rooms and offices
(including all other uses and functions authorized for a bank under the laws of
the United States and the Commonwealth of Massachusetts and including use of
automatic teller machines and drive-up windows brokerage and insurance services,
general office space, professional uses and retail uses, except for retail uses
which sell food. Tenant may use portions of the Premises for storage if it so
desires.
8.1.2. Rules and Regulations. To store all trash and refuse within the
Premises and to be responsible for disposing of the same; to keep all drains
inside the Premises clean; to receive supplies only in the manner and areas
designated by Landlord; and to comply with such other reasonable rules and
regulations as established by Landlord from time to time, provided said rules
and regulations do not add additional cost to Tenant or interfere with Tenant's
normal business operations.
8.1.3. Maintenance. At Tenant's expense to keep the interior of the
Premises including all glass in windows and doors, Tenant's Special
Installations-and all permitted signs, clean, neat and in good order, repair and
condition and to replace any glass in the interior of the Premises or as
installed as part of Tenant's Special Installations, but not that glass
contiguous to the exterior of the Building, which may be damaged or broken with
glass of the same quality. Tenant shall have the right to clean the exterior
glass and windows of the Premises at any time and at its sole cost and expense.
Tenant's obligation to maintain as set forth above is excepted due to damage by
fire, other casualty and reasonable wear and tear.
8.1.4. Compliance with Law. To make all repairs, alterations, additions or
replacements to the Premises after Tenant has received a Certificate of
Occupancy, necessitated or required by any law or ordinance or any order or
regulation of any governmental authority applicable on account of Tenant's use
of the Premises; to keep the Premises equipped with all safety appliances so
required because of such use; to procure any licenses and permits required for
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any such use; to pay all municipal, county or state taxes assessed against the
leasehold interest hereunder, or personal property of any kind owned by or
placed in, upon or about the Premises by Tenant; and to comply with the orders
and regulations of all governmental authorities, except that Tenant may defer
compliance so long as the validity of any such law, ordinance, order or
regulation shall be contested by Tenant in good faith and by appropriate legal
proceedings, if Tenant first gives Landlord written notice thereof. In the event
of such contest, Tenant shall indemnify and hold harmless the Landlord from any
fines, penalties, or other liability arising therefrom.
8.1.5. Payment for Tenant Work. To pay promptly when due the entire cost of
any work to the Premises undertaken by Tenant and to bond against or discharge
any liens for labor or materials within fourteen (14) days after written request
by Landlord; to procure all necessary permits before undertaking such work; and
to do all of such work in a good and workmanlike manner, employing materials of
good quality and complying with all governmental requirements.
8.1.6. Liability Insurance. To maintain in responsible companies qualified
to do business in the state in which the Building is located and in good
standing therein public liability insurance covering the Premises insuring
Landlord as well as Tenant with limits at least equal to those stated in Article
I, Section 1.1 and workmen's compensation insurance with statutory limits
covering all of Tenant's employees working in the Premises, and to deposit
promptly with Landlord certificates for such insurance, and all renewals
thereof, bearing the endorsement that the policies will not be canceled until
after 14 days' written notice to Landlord.
Tenant will maintain general comprehensive public liability insurance with
respect to the Premises and its appurtenances, naming Landlord and Tenant as
insures on an occurrence basis, in amounts not less than $1,000,000 with respect
to injuries or damages to any one person and not less than $1,000,000 with
respect to injuries suffered in any one accident, and not less than $1,000,000
with respect to property damage, occurring upon, in or about the Premises or
arising out of the Tenant's use of the Premises. Tenant shall deliver to
Landlord the policies of such insurance, or certificates thereof for the
Building, simultaneously with the execution hereof and for the Premises at least
fourteen (14) days prior to the Commencement Date and for each renewal policy or
certificate thereof, at least fourteen (14) days prior to the expiration of the
policy it renews. Each such policy shall provide that it may not be modified or
canceled without at least fourteen (14) days' written notice to Landlord. All
policies of insurance to be maintained by Tenant under this Lease shall be
written by responsible insurance companies authorized to do business in the
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Commonwealth of Massachusetts and shall name Landlord and Tenant as insureds as
their respective interests may appear.
8.1.7. Tenant Conformance to Property Insurance Requirements. Tenant shall
not do or permit to be done any act or thing upon the Premises or elsewhere in
the Building or the Real Property which will invalidate or be in conflict with
the Massachusetts standard form of fire, boiler, water damage or other insurance
policies covering the Premises, Building, or Real Property, and will not bring
or keep anything on the Premises, Building or Real Property which shall increase
the rate of any such insurance policy or obstruct or interfere with the rights
of other tenants of the Real Property or Building or in any way injure or annoy
them or those having business with them. Tenant shall comply, in the conduct of
its business and in the making of any alterations, with all rules, orders,
regulations or requirements of the local Board of Fire Underwriters and the New
England Fire Insurance Rating Association or any other body having a similar
function and exercising jurisdiction over the Real Property, the Premises or the
Building.
8.1.8. Landlord's Right to Enter. Landlord shall have the right to enter
upon the Premises, without charge, during business hours and, in case of
emergency, at any time, to examine, inspect or protect the same, to show the
Premises to prospective purchasers or tenants provided, that if showing the
Premises to prospective tenants, the same may not be done except within sixty
(60) days of the end of the Lease Term, to make or facilitate any repairs,
alterations, additions or improvements to the Premises or the Building,
including, but without limitation, to install and maintain in and remove from
the Premises pipes, wires and other conduits, and Tenant shall not be entitled
to any abatement or reduction of rent or damages b reason of any of the
foregoing. Except in case of emergency, any such access shall be performed in
such a manner so as to interfere as little as reasonably possible with the
operation of the business being conducted in the Premises and only upon at lease
twenty four (24) hours advance written notice.
In cases where Landlord shall have the right to enter the Premises, it is
understood that Landlord shall comply with any security arrangements established
from time to time by Tenant, and Tenant agrees that it will always provide
Landlord entry upon the Premises upon reasonable notice, under general
supervision by an employee of Tenant and, in case of emergency, immediate entry
into the Premises under such supervision.
In the event Landlord is making any repairs, alterations, additions or
improvements and the same are made during nonbusiness hours and are of such an
extraordinary nature the Tenant's normal security is reasonably inadequate, then
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any additional security reasonably required by Tenant shall be paid for by
Landlord.
8.1.9. Yield Up of the Premises. At the Termination Date of the Initial
Term, or at the expiration of any Option Term, or earlier termination of this
Lease the Tenant shall remove all trade fixtures and personal property and all
interior partitions installed by Tenant and such other installations made by
Tenant as Landlord may request, and to repair any damage caused by such removal,
and to surrender all keys to the Premises and yield up the Premises, broom-clean
and in the same good order and repair in which Tenant is obliged to keep and
maintain the Premises by the provisions of this Lease excepting only reasonable
wear and tear, damage by fire and/or other insured casualty or conditions
requiring repair by Landlord at Landlord's expense. Landlord shall give Tenant
notice, after the termination of this Lease of any property of Tenant's not so
removed. Tenant shall have thirty (30) days after Landlord sends such notice to
remove its property and if Tenant does not remove its property within thirty
(30) days, it shall be deemed abandoned and may be removed and disposed of by
Landlord in such manner as Landlord shall determine, the cost of such removal
and disposal to be born by Tenant.
8.2. Negative Covenants. Tenant covenants at all times during the Initial
Term and any Option Term and such further time as Tenant occupies the Premises
or any part thereof as follows:
8.2.1. Assignment, Subletting, Etc.
(a) Tenant will not sell, assign or transfer this Lease, in whole or in
part, or sublease all or any part of the Premises, or permit the use or
occupation of all or any part of the Premises by any concessionaire or
licensee without, on each and every occasion, first obtaining Landlord's
written consent, which consent with respect to assignees or sublessees will
not be unreasonably withheld. Landlord's withholding of consent shall be
deemed reasonable if, in Landlord's reasonable discretion, the proposed
assignee or sublessee is not a creditworthy tenant or if the proposed use
of the premises is not similar to the permitted uses allowed hereunder. The
previous sentence is not to be construed as preventing Landlord from
withholding consent for any other valid reason. In connection with any
request by Tenant for such consent to sublet or assign, Tenant shall submit
to Landlord, in writing a statement containing the name of the proposed
subtenant or assignee, such information as to its financial responsibility
and standing as Landlord may require, and all of the terms and provisions
upon which the proposed sub-letting or assignment is to be made, and, in
the case of a sublease, unless the proposed sublet area shall constitute an
entire floor or floors, such statement shall be accompanied by a floor plan
delineating the proposed sublet area. If the rent received by Tenant on
account of a sublease of all or any portion
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of the Premises exceeds the Annual Fixed Rent and Additional Rent allocated
to the space subject to the sublease in the proportion of the area of such
space to the area of the entire Premises, plus actual out-of-pocket
expenses incurred by Tenant in connection with Tenant's subleasing of such
space, including brokerage commissions and the cost of preparing such space
for occupancy by the subtenant, Tenant shall give Landlord notice of the
same and Landlord shall have the option, exercised within thirty (30) days
to assume the sublease and release Tenant from its obligations hereunder
with respect to the subleased space. In the event Landlord does not
exercise its option Tenant shall have the right to receive any excess rent.
(b) Notwithstanding the foregoing provisions of this Section 8.2.1. to the
contrary, Tenant shall have the privilege without the necessity of
obtaining the consent of Landlord, to assign its interest in this Lease to
any corporation which is a successor to Tenant, either by purchase of
Tenant's assets or by merger or consolidation, or to an Affiliate of
Tenant. The term "Affiliate of Tenant" for the purposes of this paragraph
shall mean any corporation, partnership, trust, association or other
business organization, directly or indirectly (through other entities or
otherwise) owned or controlled by, owning or controlling or under common
ownership and control with Tenant. It is recognized by the parties that
Whitelaw Corporation, Inc. is not a bank and that Whitelaw Corporation,
Inc. and its principal, George L. Duncan are in the process of forming a
bank and that upon such formation, this lease is to be assigned to the bank
and said assignment shall be allowed hereunder. However, no such assignment
shall be valid unless, within fourteen (14) days after the execution
thereof, Tenant shall deliver to Landlord (i) a duplicate original
instrument of assignment in form reasonably satisfactory to Landlord, duly
executed by Tenant, and (ii) an instrument in form and substance reasonably
satisfactory to Landlord, duly executed by the assignee, in which such
assignee shall agree to observe and perform, and to be personally bound by
all of the terms, covenants and conditions of this Lease on Tenant's part
to be observed and performed, whether or not accruing prior to or after the
date of such assignment and whether or not relating to matters arising
prior to such assignment.
(c) If Tenant's interest in this Lease is assigned or sublet, whether or
not in violation of the provisions of this Section 8.2.1. Landlord may
collect rent from the assignee or sublessee; if the Premises or any part
thereof are subject to, or occupied by, or used by, any person other than
Tenant, whether or not in violation of this Article, Landlord, after
default by Tenant under this Lease, may collect rent from the subtenant,
user or occupant. In either case, Landlord shall apply the net amount
collected to the rents reserved in this Lease, but neither any such
assignment, sub-letting, occupancy or use, whether with or
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without Landlord's prior consent, nor any such collection or application,
shall be deemed a waiver of any term, covenant or condition of this Lease,
or the acceptance by Landlord of such assignee, subtenant, occupant, or
user as Tenant. The consent by Landlord to any assignment or subletting
shall not relieve Tenant from its obligation to obtain the express prior
consent of Landlord to any further assignment or sub-letting. The listing
of any name other than that of Tenant on any door of the Premises or on any
directory or in any elevator in the Building, or otherwise, shall not
operate to vest in the person so named any right or interest in this Lease
or in the Premises or be deemed to constitute, or serve as a substitute
for, any prior consent of Landlord required under this Section, and it is
understood that any such listing shall constitute a privilege extended by
Landlord which shall be revocable at Landlord's will by notice to Tenant.
Neither any assignment of Tenant's interest in this Lease nor any
subletting, occupancy or use of the Premises or any part hereof by any
person other than Tenant, nor any collection of rent by Landlord from any
person other than Tenant as provided in this paragraph, nor any application
of any such rent as provided in this paragraph shall, in any circumstances,
relieve Tenant of its obligations fully to observe and perform the terms,
covenants and conditions of this Lease on Tenant's part to be observed and
performed.
(d) Tenant shall pay to Landlord promptly, as Additional Rent, all
reasonable legal and other expenses incurred by Landlord in connection with
any request by Tenant for consent required under this Section 8.2.1 up to
an amount not to exceed $2,000.00 in connection with each request.
(e) Any attempted assignment, transfer, mortgage, sublease, pledge or other
encumbrance done without the Landlord's prior written consent shall be
void.
(f) No assignment, transfer, mortgage or other encumbrance, whether or not
approved and no indulgence granted by Landlord shall in any way impair the
continuing primary liability (which after an assignment shall be joint and
several with the assignee) of Tenant hereunder and no approval given in a
particular instance shall be deemed to be a waiver of the obligation to
obtain Landlord's approval in the case of any other assignment.
8.2.2. Overloading, Nuisance, Etc. Not to injure, overload, deface or
otherwise harm the Premises or the Building; nor suffer any waste; nor commit
any nuisance; nor permit the emission of any objectionable noise or odor; nor
burn any trash or refuse within the Building, nor make any use of the Premises
which is improper, offensive or contrary to any law or ordinance or which will
invalidate or increase the cost of any of Landlord's insurance; nor store or
dispose of trash or refuse, on, or otherwise obstruct, the driveways, walks,
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malls, parking areas and other common areas in the Building; nor park trucks or
delivery vehicles outside the Building so as to interfere unreasonably with the
use of any driveways, walks, malls or parking areas.
8.2.3. Installation, Alteration or Additions. Not to take any structural
repairs or structural alterations nor make any installations, alterations,
improvements or additions which obstruct the windows and the view looking from
the exterior of the Premises inward without on each occasion obtaining the prior
written consent of Landlord, and then only pursuant to plans and specifications
approved by Landlord in advance in each instance.
All nonstructural repairs, installations, alterations, improvements or
additions may be performed by Tenant or the bank to whom it will be assigning
this lease without Landlord's consent. No other assignees, sublessees or other
successors in interest to Tenant may make any structural repairs, installations,
alterations, improvements or additions (except for the installation of office
furniture dividers, partitions, drapery and rugs or of fixtures necessary for
the conduct of its business and which are minor and nonstructural in nature)
without on each occasion obtaining prior written consent of Landlord, and then
only pursuant to plans and specifications approved by Landlord in advance in
each instance, except that Landlord shall not unreasonably withhold consent for
nonstructural repairs, alterations and improvements which do not obstruct the
windows and the view looking from the exterior of the Premises inward.
All such repairs, alterations, installations, improvements and additions
shall become the property of the Landlord, provided, however, all articles of
personal property installed by Tenant including but not limited to office
systems, check writing desks, vault and vault doors, wall systems and the like,
and all business machinery and equipment and appurtenances thereto and furniture
owned or placed by Tenant (referred to herein as "Tenant Special Installations")
in the Premises shall remain the property of Tenant and may be removed by Tenant
at any time, provided that Tenant, at its expense, shall repair to the
reasonable satisfaction of Landlord any damage to the Premises or Building
caused by such removal. Landlord may elect to require Tenant to remove all or
any part of the Tenant Special Installations at the expiration of this Lease, in
which event such removal shall be done at Tenant's expense and Tenant shall, at
its expense, repair any damage to the Premises or Building caused by such
removal. If Tenant does not remove its property as aforesaid, such property
shall, if Landlord elects, be deemed to become Landlord's property.
Tenant will procure all necessary permits before making any repairs,
installations, alterations, additions, improvements or removals. Landlord agrees
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that it will cooperate with Tenant in obtaining such permits. Tenant agrees that
all repairs, installations, alterations, improvements and removals done by it or
anyone claiming under it shall be done in a good and workmanlike manner, that
the same shall be done in conformity with all laws, ordinances and regulations
of all public authorities and all insurance inspection or rating bureaus having
jurisdiction, that the structure of the Premises or Building will not be
endangered or impaired and that Tenant will repair any and all damage caused by
or resulting from any such repairs, installations, alterations, additions,
improvements or removals, including, but without limitation, the filling of
holes. Tenant agrees to pay promptly when due all charges for labor and
materials in connection with any work done by Tenant or anyone claiming under
Tenant upon the Premises or Building so that the Premises and Building shall at
all times be free of liens. Tenant agrees to save Landlord harmless from, and
indemnify Landlord against, any and all claims for injury, loss or damage to
person or property caused by or resulting from the doing of any such work.
ARTICLE IX
LIABILITY AND INDEMNIFICATION
9.1. Landlord Liability. Except for damage or injury arising from any
negligence, gross negligence or willful misconduct of the Landlord, Landlord
shall not be liable for any damage or injury to any person or to personal
property of Tenant or of any person, done or occasioned by or from the heating,
elevator, ventilating or air conditioning systems, electric wiring, plumbing,
dampness, water, gas, steam, or other pipes or sewage, or the breaking of any
electric wire, the bursting, leaking or running of water from any tank,
washstand, water closet OI waste pipe, radiator, or any other pipe in, above,
upon, or about the Building or the Premises, or which may at any time hereafter
be so placed; or for any injury or damage to persons or property, including
Tenant's Special Installations, Tenant's Alterations, or Tenants personal
property occassioned by fire, explosion, falling plaster, electricity, smoke or
wind, or water, snow, or ice going upon or coming through or from the street,
roof, sub-surface, windows or otherwise; or for any damage or injuries to
persons or property arising from acts or neglect of any tenant, occupant of, or
visitor of the Building, or any owners or occupants of adjacent or contiguous
property, or for the loss or theft of any property of Tenant however occurring,
including loss of property entrusted to employees of Landlord. Landlord shall
not be liable for any latent defects in the Premises or the Building. In no
event shall Landlord be liable for any loss the risk of which is covered by
Tenant's insurance, subject to the provisions of Article VIII, Section 8.1.6.
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9.2. Tenant Indemnification of Landlord. Tenant agrees to save Landlord
harmless and shall exonerate, defend and indemnify Landlord from and against,
any and all claims, liabilities, losses, damages, costs, expenses and penalties,
of whatsoever nature, arising from any act, omission, or negligence of Tenant or
Tenant's employees, agents, contractors, suppliers, licensees, customers, or
visitors; or arising from any accident, injury or damage whatsoever caused to
any person, including death, or to the property of any person, which shall occur
during the Term of this Lease in or about the Premises, or which shall arise
from any accident, injury or damage occurring outside of the Premises but in or
about the Building (and, without limiting the generality of the foregoing, on or
about the elevators, staircases, public corridors, sidewalks, approaches, roof,
or other appurtenances and facilities used in connection with the Building or
the Premises), where such accident, damage or injury result or is claimed to
have resulted from an act, omission, misconduct or negligence on the part of
Tenant or Tenant's agents, servants, employees, suppliers, licensees, visitors,
or customers; and Tenant shall save Landlord harmless and shall indemnify
Landlord from and against any and all costs and expenses (including reasonable
attorneys' fees) incurred by Landlord by reason of any failure of Tenant to
observe any of Tenant's obligations, covenants, and agreements hereunder.
9.3. Tenant Damage of Premises or Building. All damage or injury to the
Premises or the Building or to its fixtures, appurtenances and equipment caused
by moving the property of Tenant into, out of or within said Building and all
damage otherwise caused by Tenant or by the agents, servants, employees and
visitors of Tenant shall be repaired, restored or replaced by the Tenant, at the
sole expense of the Tenant. In the event that the Tenant shall neglect or fail
to do so then the Landlord shall have the right but not the obligation to make
such necessary repairs, alterations and replacements (structural, nonstructural
or otherwise) and any charge or cost so incurred by the Landlord shall be paid
by the Tenant as Additional Rent within fourteen (14) days after presentation of
a statement therefor.
9.4. Landlord Indemnification of Tenant. Landlord to save Tenant harmless
and shall exonerate, defend and indemnify Tenant from and against, any and all
claims, liabilities, losses, damages, costs, expenses and penalties, of
whatsoever nature, arising from any negligence, gross negligence or willful
misconduct of Landlord or Landlord's employees, agents, contractors, suppliers,
licensees, customers or visitors; or arising from any accident, injury or damage
whatsoever caused to any person, including death, or to the property of any
person, which shall occur during the Term of this Lease in or about the
Premises, or which shall arise from any accident, injury or damage occurring
outside of the Premises but in or about the Building (and without limiting the
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generality of the foregoing, on or about the elevators, staircases, public
corridors, sidewalks, approaches, roof, or other appurtenances and facilities
used in connection with the Building or the Premises), where such accident,
damage or injury results from the negligence, gross negligence or willful
misconduct on the part of Landlord or Landlord's agents, servants, employees,
suppliers, licensees, visitors or customers; and Landlord shall save Tenant
harmless and shall indemnify Tenant from and against any and all costs and
expenses (including reasonable attorneys' fees) incurred by Tenant by reason of
any failure of Landlord to observe any of Landlord's obligations, covenants and
agreements hereunder.
ARTICLE X
DAMAGE BY FIRE OR OTHER CASUALTY
10.1. In the event of loss of, or damage to, the Premises or the Building
by fire or other casualty, the rights and obligations of the parties hereto
shall be as follows:
(a) If as a result of fire or other casualty (whether insured against by
Landlord or not) less than one half (1/2) of the Building is rendered
untenantable in accordance with the National Park Service Lease, Landlord
shall replace or restore the Premises and shall construct and develop
buildings and improvements in accordance with the National Park Service
Lease. If the Premises or any part thereof shall be rendered untenantable
by reason of such damage, whether to the Premises or the Building, the
Annual Fixed Rent (and Additional rent and any payments by landlord to
tenant, as the case may be, pursuant to Article IV) shall thereafter be
suspended or abated proportionately according to the nature and extent to
which the Premises shall have been rendered untenantable for such period
from the date of such damage to the date when such damage shall have been
repaired for the portion of the Premises rendered untenantable. However, if
prior to the date when all of such damage shall have been repaired, any
part of the Demised Premises so damaged shall be rendered tenatantable and
shall be used or occupied by Tenant or any person or persons claiming
though or under Tenant, then the amount by which the Annual Fixed Rent
shall abate shall be equitably apportions for the period from the date of
any such use.
(b) If as a result of fire or other casualty (whether insured against by
Landlord or not) more than one-half (1/2) of the Building is rendered
untenantable in accordance with the national Park Service Lease, Landlord
or tenant may terminate this Lease upon notice to the other party given
within sixty (60) days after such fire or other casualty specifying a date,
not less than twenty (20) days nor more than forty (40) days after the
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giving of such notice, on which the Term of this Lease shall expire as
fully and completely as if such date were the date originally fixed for the
expiration of the term of this lease. If Landlord does not elect to so
terminate this Lease, then Landlord shall proceed to repair the damage to
the Building in accordance with the national Park Service Lease, and the
Annual Fixed Rent, if Tenant does not terminate, shall meanwhile be
apportioned and abated, all as provided in paragraph (a) of this Article X.
(c) In the event a fire or other casualty renders more than one-half (1/2)
of the Building untenantable in accordance with the National Park Service
Lease, and Landlord exercises its option to terminate this Lease pursuant
to section (b) above, then Landlord agrees that, if Tenant desires, it
shall contact the National Park Service and request that it be allowed to
transfer or assign the National Park Service Lease to Tenant so that Tenant
may proceed to repair the damage to the Building. Landlord's obligations
hereunder are expressly conditioned upon Landlord receiving a release from
the National Park Service of its obligations under the National Park
Service lease in the event the assignment to Tenant is consented to.
In connection with such assignment Landlord agrees that if Landlord's
mortgagee, if there be one, allows the insurance proceeds to be collected
to repair the Building and they exceed the outstanding mortgages and other
liens of record, then such excess proceeds after payment of the outstanding
mortgages and other liens, shall, at the option of Tenant, either 1) be
lent to Tenant by Landlord for the repair of the building and to be secured
by a note and leasehold second mortgage for a term of ten years with
principal fully amortized over that time at the rate of prime plus two (2)
percent with a loan to value ratio of Landlord's second mortgage combined
with the first mortgage not to exceed ninety (90%) and upon other
commercially reasonable terms, or 2) be invested by Landlord with Tenant in
an equity position in the Building, provided Landlord and Tenant can agree
on all of the terms and conditions of such an equity position.
In connection with such assignment Landlord agrees that if the
Landlord's mortgagee, if there be one, allows the insurance proceeds to be
collected to repair the Building and they are less than the outstanding
mortgages and other liens of record, then Landlord shall be obligated to
make such assignment free and clear of outstanding mortgages and other
monetary liens In the event the mortgagee does not allow insurance proceeds
to be collected to repair the Building or if there are no excess proceeds,
then Landlord shall have no obligation to lend or invest said proceeds with
or to Tenant.
(d) Landlord shall not be required to repair or replace any of Tenant's
personal property, and no damages, compensation or claim shall be payable
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by Landlord for inconvenience, loss of business or annoyance arising from
any repair or restoration of any portion of the Premises or of the
Building, or from Unavoidable Delays in such repair or restoration, but the
foregoing should not be deemed to relieve Landlord of liability for its
breach of any covenant of this Lease.
(e) The provisions of this Article X shall be considered an express
agreement governing any instance of damage or destruction of the Building
or the Premises by fire or other casualty, and any law now or hereafter in
force providing for such a contingency in the absence of express agreement
shall have no application.
(f) Notwithstanding anything to the contrary set forth in subsections (a)
through (e) above, if, prior to the Rent Commencement Date, the Premises or
any part thereof shall be damaged to the extent of twenty five (2 more by
fire or other casualty, Tenant may Lease upon notice to Landlord given
within fourteen (14) days after such fire or other casualty and after
giving such notice, the Term of this Lease shall expire as fully and
completely as if such date were the date originally fixed for the
expiration of the term of this Lease.
ARTICLE XI
CONDEMNATION
11.1. Event of Taking. In the event of a Taking of the whole of the
Premises, this Lease and the Term of this Lease shall terminate as of the date
of such Taking. If only a part of the Premises shall be so taken, then, at
Landlord's option, Landlord may terminate the Lease upon thirty (30) days' prior
written notice to Tenant; provided, however, if Landlord does not so elect to
terminate, then this Lease and the Term of this Lease shall continue in force
and effect, but, from and after the date of such partial Taking, the Annual
Fixed Rent shall be equitably reduced on the basis of the portion of the
Premises so taken and Landlord shall use its best efforts to put the remaining
portion of the Premises in tenantable condition.
11.2 Right to Receive Awards. Landlord shall have the exclusive right to
receive any and all rights to compensation and awards made for damages to the
Property, Premises, Building and leasehold hereby created, or for any one or
more of them, accruing by reason of a Taking or by reason of anything lawfully
done in pursuance of public or other authority. Tenant hereby releases and
assigns to Landlord all Tenant's right to such awards, and covenants to deliver
such further assignments and assurances thereof as landlord may from time to
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time request, hereby irrevocably designating and appointing Landlord as Tenant's
attorney-in-fact to execute and deliver in Tenant's name and behalf all such
further assignments thereof. However, Tenant reserves any rights to any award
for its moving or relocation expenses or to any other special award not
constituting part of the compensation for the Property and not diminishing the
amount of the award to which Landlord would otherwise be entitled.
ARTICLE XII
FIRE INSURANCE/PROPERTY INSURANCE
12.1. Landlord Insurance. Landlord shall, throughout the Lease Term, at its
expense, keep the Building insured against all loss or damage by fire with
so-called "extended coverage" endorsements in such amount as any first Mortgagee
may require. At a minimum, Landlord shall maintain general comprehensive public
liability insurance with respect to the Building and its appurtenances, naming
Landlord and Tenant as insureds on an occurrence basis, in amounts not less than
$1,000,000.00 with respect to injuries or damages to any one person and not less
than $1,000,000.00 with respect to injuries suffered in any one accident and not
less than $1,000,000.00 with respect to property damage, occurring upon, in or
about the Building or arising out of the Landlord's use of the Building.
12.2. Tenant Insurance. Tenant shall, throughout the Lease Term, at its
expense, keep Tenant's personal property and Special Installations in and about
the Premises insured against all loss or damage by fire with extended coverage
in an amount sufficient to prevent Tenant from becoming a co-insurer.
ARTICLE XIII
DEFAULTS
13.1. Events of Default. If Tenant shall default in performance of any of
its obligations to pay rent, Annual Fixed Rent, Additional Rent or any payments
due hereunder, and if such default shall continue for fifteen days after written
notice from Landlord thereof, or if within thirty days after written notice from
Landlord to Tenant specifying any other default or defaults, Tenant has not
commenced diligently to correct the default or defaults so specified or has not
thereafter diligently pursued such correction to completion, in either case
then, Landlord lawfully may, in addition to and not in derogation of any
remedies for any preceding breach of covenant, immediately or at any time
thereafter and without demand or notice and with or without process of law enter
into and upon the Premises or mail a notice of termination addressed to Tenant
at Tenant's Original Address as specified in Article I, Section 1, and repossess
the same as of Landlord's former estate and expel Tenant and those
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claiming through or under Tenant without prejudice to any remedies which might
otherwise be used for arrears of rent or preceding breach of covenant, and upon
such entry or mailing as aforesaid this Lease shall terminate.
13.2. Remedies. In the event that this lease is terminated under any of the
provisions contained in Articles XI or XII or shall be otherwise terminated for
breach of any obligation of Tenant, Tenant covenants to pay punctually to
Landlord all sums and perform all the obligations which Tenant covenants in this
Lease to pay and to perform in the same manner and to the same extent and at the
same time as if this Lease had not been terminated. In calculating the amounts
to be paid by Tenant under the next foregoing covenant, Tenant shall be credited
with any amount paid to landlord as net proceeds of any rent obtained by
Landlord by reletting the Premises, after deducting all Landlord's expenses in
connection with such reletting, including, without limitation, 211 repossession
costs, brokerage commissions, fees for legal services and expenses of repairing
the Premises for such reletting, it being agreed by Tenant that Landlord may (i)
relet the Premises or any part or parts thereof, for a term or terms which may,
at Landlord's option, be equal to or less than or exceed the period which would
otherwise have constituted the balance of the Lease Term, and (ii) make such
removals and repairs in the Premises as Landlord in its reasonable judgment
considers advisable or necessary to relet the same, and no action of Landlord in
accordance with the foregoing or failure to relet or to collect rent under any
reletting shall operate or be construed, to the extent permitted by law, to
release or reduce the Tenant's liability as aforesaid
Nothing contained in this Lease shall, however, limit or prejudice the
right of Landlord to prove for and obtain in proceedings for bankruptcy or
insolvency by reason of the termination of this Lease, an amount equal to the
maximum allowed by any statute or rule of law in effect at the time when, and
governing the proceedings in which, the damages are to be proved, whether or not
the amount be greater, equal to, or less than the amount of the loss or damages
referred to above.
13.3. Remedies Cumulative. The specific rights or remedies to which
Landlord or Tenant may resort under the terms of this Lease are cumulative and
are not intended to be exclusive of any other remedies or means of redress to
which Landlord or Tenant, as the case may be, may be lawfully entitled to in
case of any breach or threatened breach by either of them of any provisions of
this Lease. No mention in this Lease of any specific right or remedy shall
preclude either party from exercising any other right or from having any other
remedy or from maintaining any other action to which it may otherwise be
entitled either at law or equity.
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13.4. Landlord's Right to Cure Defaults. Landlord may, but shall not be
obligated to, cure, at any time, following thirty days' prior written notice to
Tenant, except in cases of emergency when no notice shall be required, any
default by Tenant under this Lease; and whenever Landlord so elects, all costs
and expenses incurred by Landlord, including reasonable attorneys' fee, in
curing a default shall be paid by Tenant to Landlord on demand.
13.5. Effect of Waivers of Default. The failure of either party to seek
redress for violation of, or to insist upon the strict and literal performance
of any term, covenant or condition of this Lease, shall not be deemed a waiver
of such violation or a relinquishment for the future of such covenant, right or
option, nor prevent a subsequent act, which would have originally constituted a
violation, from having all the force and effect of an original violation, but
the same shall remain in full force and effect. The receipt by Landlord of rent,
with or without knowledge of the breach of any term, covenant or condition
hereof shall not be deemed a waiver of such breach. No provisions of this Lease
shall be deemed to have been waived by either party unless such waiver be in
writing.
13.6. Landlord's Default. Except for breach by Landlord of the covenant of
quiet enjoyment, Landlord shall not be deemed to be in default in the
performance of any of its obligations hereunder unless it shall fail to perform
such obligations and such failure shall continue for a period of fifteen (15)
days after written notice has been given by Tenant to Landlord specifying the
nature of Landlord's default. In the event of any such default which prevents
the Tenant or its subtenant(s) from conducting their usual business, if Landlord
has not commenced to cure any such default on or before the expiration of said
fifteen (15) days, Tenant may elect either: (a) to terminate this Lease entirely
or as to any portion of the Premises affected by the default by giving written
notice thereof to Landlord, whereupon this Lease shall be terminated for those
portions of the Premises specified in the notice and the obligations of Tenant
hereunder shall thereupon cease or (b) may cure such defaults at the Landlord's
expense.
13.7. Landlord's Default Under National Park Service Lease. Landlord and
Tenant recognize that under the National Park Service Lease, Section 21 that the
National Park Service has granted to Landlord's mortgagee a right of notice of
defaults and an opportunity to cure. Landlord agrees to use good faith efforts
to secure an amendment to the National Park Service Lease similar to said
Section 21 which grants to Tenant a right of notice of defaults and an
opportunity to cure. Failure to secure such an amendment shall not be deemed to
be a breach of Landlord's obligations hereunder. In the event said amendment is
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secured, Tenant shall have the right to cure pursuant to Section 13.6 above. In
the event said amendment is not secured Landlord agrees to give Tenant notice of
any default notices it receives under the National Park Service Lease and Tenant
shall have the right to cure a default by Landlord under the National Park
Service lease at Landlord's expense, except that Landlord cannot guarantee said
right to cure will be recognized by the National Park Service.
ARTICLE XIV
SUBROGATION
14.1. Waiver of Subrogation. The Landlord hereby releases the Tenant, to
the extent of the Landlord's insurance coverage, from any and all liability for
any loss or damage caused by fire or any of the extended coverage casualties or
any other casualty insured against, even if such fire or other casualty shall be
brought about by the fault or negligence of the Tenant or its agents, provided,
however, this release shall be in full force and effect only with respect to
loss or damage occurring during such time as the Landlord's policies covering
such loss or damage shall contain a clause to the effect that this release shall
not affect said policies or the right of the Landlord to recover thereunder. The
Landlord agrees that its fire and other casualty insurance policies will include
such a clause so long as the same is includable without extra cost, or if extra
cost is chargeable therefor, so long as the Tenant pays such extra cost. If
extra cost is chargeable therefor, the Landlord will advise the Tenant thereof
and of the amount thereof. The Tenant at its election may pay the same, but
shall not be obligated to do so.
The Tenant hereby releases the Landlord to the extent of the Tenant's
insurance coverage, from any and all liability for any loss or damage caused by
fire or other casualty insured against, even if such fire or other casualty
shall be brought about by the fault or negligence of the Landlord or its agents,
provided, however this release shall be in force and effect only with respect to
loss or damage occurring during such time as the Tenant's policies covering such
loss or damage shall contain a clause to the effect that this release shall not
affect said policies or the right of Tenant to recover thereunder. The Tenant
agrees that its fire and other casualty insurance policies will include such a
clause as long as same is includable without extra cost, or if extra cost is
chargeable therefor, so long as the Landlord pays such extra cost. If extra cost
is chargeable therefor, the Tenant will advise the Landlord thereof and of the
amount thereof. The Landlord at its election, may pay the same, but shall not be
obligated to do so.
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Each party hereby waives all rights of recovery against other for loss or
injury against which the waiving party is protected by insurance containing said
provisions, reserving, however, any rights with respect to any excess of loss
of injury over the amount recovered by such insurance. Neither party shall
acquire as insured under any insurance carried by the other any right to
participate in the adjustment of loss or to receive insurance proceeds and
agrees upon request promptly to endorse and deliver to the other party any
checks or other instruments in payment of loss in which it is named a payee.
ARTICLE XV
RIGHTS OF MORTGAGEE
15.1. Rights of Mortgagee and Subordination. Unless 1andlord exercises the
option set forth in Section 15.2 below, this Lease shall be superior to and
shall not be subordinated to any mortgage or other voluntary lien or other
encumbrance on the Premises, Real Property or the Building, hereinafter in this
Article XV referred to as "the mortgaged premises." No holder of a mortgage
shall be liable either as mortgagee or as assignee, to perform, or be liable in
damages for failure to perform, any of the obligations of Landlord unless and
until such holder shall have entered as mortgagee in possession or until such
holder shall have acquired indefeasible title t the Real Property and the
Building and then only subject to and with the benefit of the provisions of
Article III No Annual Fixed Rent, Additional Rent or any other charge shall be
paid more than ten days prior to the due dates thereof and payments made in
violation of this provision shall (except to the extent that such payments are
actually received by a mortgagee in possession or in the process of foreclosing
its mortgage) be a nullity as against such mortgagee and Tenant shall be liable
for the amount of such payments to such mortgagee. The covenants and agreements
contained in this Lease with respect to the rights, powers and benefits of a
mortgagee (particularly, without limitation thereby, the covenants and
agreements contained in this Article XV) constitute a continuing offer to any
person, corporation or other entity becoming the mortgagee of the mortgaged
premises, and such mortgagee is hereby constituted an obligee of Tenant to the
same extent as though its name was written hereon as such; and such mortgagee
shall be entitled to enforce such provisions in its own name. Tenant agrees on
request of Landlord to execute and deliver from time to time any agreement which
may be necessary to implement the provisions of this Article XV.
15.2. Aqreement to Subordinate. Tenant agrees at the request of Landlord to
subordinate this Lease to any mortgage placed upon the mortgaged premises by
Landlord, provided that the holder of such mortgage enters into an agreement
with Tenant binding upon the successors and assigns of the parties thereto by
the terms of which such holder agrees not to disturb the possession and other
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rights of Tenant under this Lease so long as Tenant continues to perform its
obligations hereunder and in the event of acquisition of title by said holder
through foreclosure proceedings or otherwise, to accept Tenant as tenant of the
Premises under the terms and conditions hereunder or to sell said Premises
and/or the Building subject to this Lease, and Tenant agrees to recognize such
holder or any other person acquiring title to the Premises as Landlord. Tenant
and Landlord agree to execute and deliver any appropriate instruments necessary
to carry out the agreements in this Article XV. Any such mortgage to which this
Lease shall be subordinated may contain such terms, provisions and conditions as
the mortgagee deems usual or customary.
ARTICLE XVI
NATIONAL PARK SERVICE LEASE
16.1. Subordination to National Park Service Lease. Landlord leases the
property at 222 Merrimac Street, Lowell, Massachusetts, of which the Premises
are a part, from the United States of America, acting through Hebert S. Cables,
Jr., Regional Director, North Atlantic Region, National Park Service pursuant to
a written lease dated October 11, 1985, and this demise is in all respects
subject to the terms, covenants and conditions of said lease and subordinate
thereto.
ARTICLE XVII
RENTAL OPTION AND RIGHT OF FIRST REFUSAL
17.1. Rental Option. Tenant shall have the right, by giving Landlord
written notice, prior to December 31, 1989, of its intention to rent the entire
fourth floor of the Building which contains 3,047 square feet. Upon receipt of
such notice Landlord shall have no less than ninety days to deliver the fourth
floor vacant, but may do so in an earlier time by sending notice to Tenant of
such earlier delivery which must be in no event less than thirty (30) days from
the date of the notice. Upon the expiration of ninety days or such shorter
period as Landlord may send notice of to Tenant, Tenant's right to occupy said
fourth floor shall commence. The terms, provisions, covenants and conditions of
this lease shall apply in all respects to Tenants rental of the fourth floor
except that Tenant's Proportionate Share shall be increased by 13.61%. The
Annual Fixed Rent to be paid for the fourth floor space shall be at the square
footage rate and subject to adjustments as described in Article IV. Should
Tenant be in material default or breach of any of its obligations under this
Lease, the option described above shall be null and void.
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17.2. Rental Right of First Refusal. Should the Landlord, during the
Initial Term or any Option Term, elect to rent the remainder or any part thereof
of the Building of which the Premises are a part, or the Future Building, if
built pursuant to the terms of the National Park Service Lease, to another
person or entity, the Tenant shall have a right of first refusal to rent the
portion of the Building or Future Building being offered to the other party on
the same terms and conditions as contained herein and the Tenant is subject to
under this lease. Should Tenant rent more space within the Building or the
Future Building, its Tenant's Proportionate Share shall also increase. Upon the
Tenant's failure to rent such additional space within fourteen (14) days after
written notice thereof from the Landlord, the Landlord shall be free to rent the
portion of the Building or Future Building being offered to the other person
upon such terms and conditions as it deems reasonable. The right of first
refusal shall not apply to existing or future tenants whose tenancy has rights
of first refusal where notice has not been given by Landlord to said tenants or
where they have exercised their rights, nor does it apply to any extension,
renewal or modification of any Lease with an existing tenant, or any assignment
or subleasing by an existing tenant. Should Tenant be in material default or
breach of any of its obligations under this Lease, the right of first refusal
described above shall, if not cured by Tenant within a reasonable time after
Tenant knows of the default or breach, be null and void. The right of first
refusal hereunder shall be deemed continuous and shall be in force and effect
each time Landlord elects to rent the remainder or any part thereof of the
Building or the Future Building.
17.3. Assignment Right of First Refusal. Should the Landlord, during the
Initial Term or any Option Term, elect to assign or transfer its rights under
the National Park Service Lease to another person or entity, the Tenant shall
have a right of first refusal to be the assignee or transferee on the same terms
and conditions as contained in the offer by Landlord to assign or transfer its
rights under the National Park Service Lease to another person or entity. The
Landlord shall give Tenant notice in writing of its desire to assign or transfer
the National Park Service Lease, said notice to contain a copy of a written bona
fide offer from another person or entity. Tenant shall have fourteen days after
receipt of the notice to elect to be the assignee or transferee upon the same
terms and conditions as contained in the written bona fide offer. Tenant agrees
to respond to the written notice by sending Landlord a notice stating either
that it accepts the offer or rejects it, any counter offer being considered a
rejection. In the event Tenant accepts the offer, the Tenant and Landlord agree
to execute such documentation necessary to bind the parties. Failure of Tenant
to send Landlord the notice within 14 days shall be deemed a waiver of its
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rights hereunder. The right of first refusal described above shall not apply to
any assignment or transfer by Landlord to any corporation, partnership, trust,
association or other entity the majority of which is owned or controlled by
First Holding Trust, Old City Hall Limited Partnership or Old City Hall Trust or
by any partner or beneficiary of any of said entities. The right of first
refusal shall also not apply to any assignment or transfer by Landlord to any
person who is a partner or beneficiary of any of said entities.
17.4. Assignment of Right to Build Future Building. The parties recognize
that Landlord has the right under the National Park Service Lease to build the
Future Building. At any time during which Landlord may exercise that right,
Tenant may request Landlord, said request to be in writing, that it desires that
Landlord exercise its right to build the Future Building. The request must be
accompanied by a written appraisal setting forth a fair market appraisal for
rents in first class office buildings in downtown Lowell, Massachusetts. Within
60 days from receipt of the written request, Landlord shall have the option to
accept the written fair market rental value proposed by Tenant or to have its
own fair market appraisal done and propose the same as an alternative, said
option to be made in writing. Failure of Landlord to send a notice choosing an
option shall be deemed an acceptance of the fair market rental value proposed by
Tenant. If Landlord proposes an alternative fair market rental value, Tenant
shall have the option to accept the Landlord's fair market rental value or to
indicate that it desires a third appraisal, said option to be made in writing
within seven days after receipt of Landlord's proposal. Failure of Tenant to
send a notice choosing an option shall be deemed an acceptance of the fair
market rental value proposed by Landlord. If Tenant desires a third appraiser,
the two prior appraisers shall chose a third appraiser to complete an appraisal
within 53 days, the costs of the third appraisal to be borne equally between the
parties. The third appraisal shall be the fair market rental value. Within 7
days from fair market rental value has been accepted by the the option to accept
the same or as determined by appraiser, Tenant shall have the option to make a
to commit to no less than 50% of the space in the Future Building at the fair
market rental value and upon the same general terms and conditions as contained
in this lease. Landlord shall have 14 days to accept Tenants offer, except that
if said 14 day period would end prior to 120 days from Landlords receipt of
Tenants first request, Landlord shall have until said 120th day to accept
Tenants offer and to commit to build the Future Building. In the event Landlord
does not the time a party having the third binding of accept Tenant's offer,
then Landlord agrees that it shall contact the National Park Service and request
that it be allowed to transfer or assign its rights to build the Future Building
under the National Park Service Lease to Tenant. Landlord's obligations
hereunder are expressly conditioned upon Landlord's receiving a release from the
National Park Service of its obligations under the National
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Park Service Lease as it relates to the Future Building in the event the
assignment to Tenant is assented to.
ARTICLE XVIII
TENANT SIGNS
18.1. Landlord to Provide Office Building Directory. Landlord shall provide
a directory tablet in the main lobby of the Building, at its expense, upon which
Landlord will affix Tenant's name.
18.2. Permitted Signs. Tenant shall have the right to affix signs to the
Building exterior directly contiguous to the Premises showing the name of Tenant
and such associated descriptions or logos as it deems proper. In addition,
Tenant shall have the right to affix such lettering or symbols to the windows in
its Premises as it deems proper. All such signs, lettering, symbols and the like
shall be placed at Tenant's sole cost and expense and Tenant agrees to be
responsible for complying with all municipal laws, ordinances and the like as
well as the provisions of the National Park Service Lease and the Lowell
Historic Preservation Commission in making such modifications to or placing
signs, lettering or symbols on the Building or its windows Tenant further agrees
to indemnify and hold Landlord harmless, regardless of fault or by whom such
damage shall be caused, in connection with the placing of any signs, lettering
or symbols upon the Building or its windows.
18.3. Tenant Not Permitted to Erect Signs in Common Areas. Other than as
permitted above, Landlord has not granted to Tenant any rights in or to the
outerside of the outside walls of the Building, including the windows, control
of which is hereby reserved by Landlord. Tenant shall not display or install
lettering or signs in the elevator, the lobbies, or any of the public corridors
or other public areas of the Building.
ARTICLE XIX
REIMBURSEMENT OF EXPENSES
19.1. Definition of Expenses. The aggregate cost and expense incurred by
Landlord, whether or not paid to any person, firm, corporation or other entity
having an interest in or under common ownership with Landlord or any of the
persons, firms, corporations or other entities comprising Landlord, for the
operation, maintenance and management of the Property, including and being
limited to the following expenses:
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(a) charges connected with the cleaning, maintenance and normal day to day
repair of the Building and its systems and the Real Property (except
structural repairs or replacement of Building Systems and any reserves for
those repairs and replacements) including the supplies used in connection
therewith and window and glass door breakage, service contracts with
independent contractors for any of the foregoing and property management
fees at reasonable rates consistent with the type of occupancy and service
rendered;
(b) charges connected with heating, ventilating, and cooling of the common
areas of the Building, Building electricity (in contradistinction to
electricity furnished to tenants), gas, steam and water (including sewer
use rental and any utility tax);
(c) charges for fire, casualty, liability, sprinkler and water damage
insurance carried by Landlord and such other insurance as is required by
any first Mortgagee of this Lease.
19.2. Payment of charges, pro rata share. Within sixty (60) days after the
end of each year during the Lease term or at such shorter intervals (but in no
event at intervals shorter that thirty days) as Landlord desires, Landlord shall
furnish Tenant with a statement setting forth in reasonable detail the Operating
Expenses for such year or shorter interval. Such statement shall set forth the
amount, if any, of any payment due under the section above which payment shall
be calculated by taking the amount of Operating expenses and dividing the same
by the Tenant's Proportionate Share. The obligation to pay the Tenant's
Proportionate Share shall commence after the Rent Commencement Date and shall be
for Operating Expenses after that date. The sums due hereunder shall be due from
Tenant to Landlord within fourteen (14) days of Landlord having deliver a
statement for the same to Tenant.
19.3. Survival of Obligation. Any obligation under this Article XIX or
Tenant to pay such Additional Rent to Landlord shall survive the expiration of
the Lease Term and shall be discharged by payment in cash hen and as the amount
of the same shall be determined to be due.
ARTICLE XX
PERMITTED ALTERATIONS
20.1. Tenant Improvements to Premises. Notwithstanding the provisions of
Article VIII, Tenant may make those alterations to the Premises as described in
Exhibit B attached hereto, which alterations are with the consent of Landlord.
Tenant shall give Landlord notice of when it commences construction of the
Tenant Improvements as well as notice of when it receives a certificate of
occupancy for the work to be described in Exhibit B.
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20.2. ATM and Drive Up Window Notwithstanding the provisions of Article
VIII, Landlord hereby consents to Tenant attempting to place an automatic teller
machine in the Building in the location described in Exhibit B and to be
accessible through a pass card entry system, designed, maintained and paid for
by Tenant, on a twenty four hour basis. Tenant shall further have the right to
attempt to locate a drive up window in the alley behind the building, though
still on the Real Property. Said right shall not apply to the parking lot, which
is the land on which the Future Building may be built.
20.3. Compliance with all laws and agreements. In exercising its rights
pursuant to Sections 20.1 and 20.2. above, Tenant agrees to comply with all
laws, ordinances and agreements as set forth in this lease, specifically
including but not limited to, all municipal zoning ordinances, building codes,
the Lowell Historic Preservation Commission, the National Park Service Lease and
all regulatory approvals governing the operation of a bank.
ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1. Notice from One Party to the Other. Any notice from Landlord to
Tenant or from Tenant to Landlord shall be deemed duly served if mailed by
registered or certified mail addressed, if to Tenant, at the Tenant's Original
Address or such other address as Tenant shall have last designated by notice in
writing to Landlord and, if to Landlord, at the Landlord's Original Address or
such other address as Landlord shall have last designated by notice in writing
to Tenant.
21.2. Quiet Enjoyment. Landlord covenants and agrees that upon Tenant's
paying the Annual Fixed Rent, Additional Rent and any other payments due
hereunder and performing and observing the agreements, conditions and other
provisions on its part to be performed and observed, Tenant shall and may
peaceably and quietly have, hold and enjoy the Premises during the Lease Term
without any manner of hindrance OI molestation from Landlord or anyone claiming
under Landlord, subject, however, to the terms of this Lease and to any mortgage
which may be superior to this Lease.
21.3. Notice of Lease - Lease not to be Recorded. Both parties shall, upon
the request of either, execute, acknowledge and deliver a notice of this Lease,
in recordable form, setting forth, inter alia the Commencement Date and the
Termination Date for the Premises. If this Lease is terminated before the Term
expires under the terms hereof, the parties shall execute, acknowledge and
deliver and record an instrument acknowledging such fact and the actual date of
termination of this Lease.
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21.4. Limitation of Landlord's Liability/Joint and Several Liability.
Subject to the provisions of Article IX, no owner of the Premises shall be
liable under this Lease except for breaches of Landlord's obligations occurring
while owner of the Premises, and, if Landlord is a trust, Landlord's obligations
hereunder shall not be binding upon the Trustees of said Trust individually nor
upon the shareholders or beneficiaries of said Trust, but only upon the Trustees
as trustees and upon their trust estate.
In the event that two or more individuals, corporations, partnerships or
other business associations (or any combination of two or more thereof) shall
sign this Lease as Tenant, the liability of each such individual, corporation,
partnership or other business association to pay rent and perform all other
obligations hereunder shall be deemed to be joint and several. In the event that
the Tenant named in this Lease shall be a partnership or other business
association the members of which are, by virtue of statute or general law not
subject to personal liability then, and in such event, the liability of each
such member shall be deemed to be joint and several notwithstanding such statute
or general law.
21.5. Acts of God. In any case where either party hereto is required to do
any act, delays caused by or resulting from Acts of God, war, civil commotion,
fire or other casualty, labor difficulties, shortages of labor, materials or
equipment, government regulations or other causes, to the extent that any of
which are beyond such party's reasonable control, (all herein referred to
collectively as "Unavoidable Delays") shall not be counted in determining the
time during which work shall be completed, whether such time be designated by a
fixed date, a fixed time or "a reasonable time." "Financial inability" is
expressly excluded as a cause for such delay in performance.
21.6. Capital Improvements. Notwithstanding anything in this Lease to the
contrary, Landlord hereby specifically reserves the right to make capital
improvements, alterations, and/or additions, without limitation, to the
Property, the Building, and/or the Premises; and Landlord shall have the right
in its reasonable discretion to do all things necessary or desireable from time
to time t make any and all capital improvements, alterations, and/or additions,
including but not limited to all rights in and about the Premises and such other
rights, all as set forth in this Lease. Landlord agrees to use reasonable
efforts to not interfere with Tenant's use of the Premises and any improvements
to the Premises shall be done only with Tenant's mutual consent, which consent
shall not be unreasonably withheld, except that no consent is needed if the
repairs are necessary for the structural integrity of the Building, the
mechanical, plumbing, HVAC, or electrical systems contained in the Building or
for building code or health or safety reasons.
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21.7. Status Certificate. Each party agrees from time to time, upon not
less than fifteen (15) days prior written request, to execute, acknowledge and
deliver to each other a statement in writing certifying that this Lease is
unmodified and in full force and effect and that Tenant has no defenses, offsets
or counterclaims against its obligations to pay the Annual Fixed Rent,
Additional Rent and any other charges and to perform its other covenants under
this Lease and that there are no uncured defaults of Landlord or Tenant under
this Lease (or, if there have been any modifications that the same is in full
force and effect as modified and stating the modifications and, if there are any
defenses, offsets, counterclaims, or defaults, setting them forth in reasonable
detail), and the dates to which the Annual Fixed Rent, Additional Rent and any
other charges have been paid. Any such statement delivered pursuant to this
Article XXI, Section 21.7 may be relied upon by any prospective purchaser or
prospective Mortgagee of the Premises or of the Building or any prospective
assignee of any such Mortgage.
21.8. Transferee Liability. The terms, covenants and conditions of this
Lease and all rights, remedies and liabilities herein given to or imposed upon
either of the parties hereto, shall extend to and be binding upon the Landlord
and the Tenant and their respective heirs, successors, executors, administrators
and assigns, except that the landlord named herein and each successive owner of
the Landlord's interest in this Lease shall be liable only for the obligations
of the Landlord accruing during the period of its ownership. If all or any part
of the Landlord's interest in this Lease the Building shall be held or owned
(directly, indirectly or beneficially) by or for any individual, partnership,
tenancy-in-common, joint venture, corporation or trust, it is agreed that no
such owner, joint tenant, beneficiary, trustee, shareholder or corporate entity
shall be personally responsible or liable with respect to any of the the
covenants, conditions or provision of this Lease to be performed by the
Landlord. in the event of a default by the Landlord under this Lease Tenant
agrees that, in all events, Landlord's liability shall be limited to the actual
equity interest of Landlord in the Building for the satisfaction of Tenant's
remedies under Lease.
21.9. No Accord and Satisfaction. No acceptance by Landlord of a lesser sum
than the Annual Fixed Rent, Additional Rent or any other charge then due shall
be deemed to be other than on account of the earliest installment of such rent
or charge due, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as rent or charge be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or pursue any other
remedy in this Lease provided.
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21.10. No obstruction of public alley, parking lot and sidewalk. Landlord
agrees that it shall not obstruct the public alley at the rear of the Real
Property or the parking lot (so long as the same may exist) or sidewalks so as
to unreasonably interfere with Tenant's use of the same in connection with its
use and occupancy of the Premises.
21.11. Option to terminate if regulatory approvals not granted. Landlord
and Tenant recognize that Tenant needs the approval of the Federal Deposit
Insurance Corporation and the Massachusetts Office of the Commissioner of Banks
in order to organize a bank and receive approval to commence operation. Tenant
agrees that it shall apply for such approvals in a timely and diligent manner.
In the event Tenant does not receive such approvals, Tenant shall have the
option to terminate this Lease upon notice to Landlord and thirty days after
giving such notice, the Term of this Lease shall expire as fully and completely
as if such date were the date originally fixed for the expiration of the term of
this Lease.
21.12. Hours of Operation. Landlord agrees that the common areas of the
Building shall be open during the hours from 7:30 A.M. through 9:30 P.M. for the
use of the Tenant. The Tenant may enter the Premises directly from the exterior
of the 8uilding at all times, rather than through the common areas, but may not
conduct retail operations after 9:30 P.M.
21.13. Snow Removal. Landlord and Tenant recognize that Landlord has the
obligation to remove snow and ice from the parking lot and sidewalks and to make
said areas accessible to Tenant's employees, customers and patrons no later than
8:00 A.M. on all business days. Should Landlord fail to perform the snow and ice
removal Tenant shall have the right to do the same and bill Landlord for the
reasonable cost of the removal. Upon receipt of Tenant's bill landlord shall
have thirty days within which to pay the bill. Should Landlord fail to pay the
bill within thirty days, Tenant shall have the right to offset the bill against
the rent hereunder.
21.14. Temporary Trailer. Landlord and Tenant recognize that if the Tenant
Improvements are not completed by January 1, 1989, Tenant may wish to commence
operation of its bank after said date by placing a temporary trailer in the
existing parking lot. Landlord agrees to reasonably cooperate with Tenant in its
efforts to place a trailer in the parking lot, though the parties recognize and
agree that Landlord is under no binding obligation to allow the same. In the
event of a casualty where Tenant has not terminated this Lease and Landlord is
rebuilding the Building, Tenant may place a temporary trailer in the existing
parking lot provided the same does not interfere with the rebuilding of the
Building. The costs of placing a temporary trailer shall be borne by Tenant and
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Tenant shall pay to the Landlord an equitable rent for the same along with
Landlord's associated costs in connection therewith.
21.15. Parking Meters. Tenant intends to petition the City of Lowell to
install parking meters for twenty minute parking in the front of the Building.
Landlord agrees that it will not object to said petition and will reasonably
cooperate with Tenant in its efforts to secure approval for the parking meters.
21.16. Disputes. It is agreed that if at any time a dispute shall arise as
to any amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said party to institute suit for the recovery of such sum, and if
it shall be adjudged that there was no legal obligation on the part of said
party to pay such sum or any part thereof, said party shall be entitled to
recover such sum or so much thereof as it was not legally required to pay under
the provisions of this lease; and if at any time a dispute shall arise between
the parties hereto as to any work to be performed by either of them under the
provisions hereof, the party against whom the obligation to perform the work is
asserted may perform such work and pay the cost thereof "under protest" and the
performance of such work shall in no event be regarded as a voluntary
performance of such work shall in no event be regarded as a voluntary
performance, and there shall survive the right on the part of said party to
institute suit for the recovery of the cost of such work, and, if it shall be
adjudged that there was no legal obligation on the part of such party to perform
the same or any part thereof, said party shall be entitled to recover the cost
of such work or he cost of so much thereof as said party was not legally
required to perform under the provisions of this lease.
21.17. Arbitration. If any question arises between the parties as to any of
their rights and obligations under this Lease, then such questions shall be
settled and finally determined by arbitration in accordance with the rules then
pertaining of the American Arbitration Association or its successor, and the
judgment upon the award rendered shall be binding upon the parties hereto and
may be entered in any court having jurisdiction thereover. Such arbitration
shall be held in the City of Boston, Massachusetts and the cost thereof shall be
borne equally between the parties unless the arbitrators determine the costs
differently.
21.18. Termination Due to Bankruptcy. Notwithstanding any other provisions
contained in this lease, in the event the tenant is closed or taken over by the
banking authority of the Commonwealth of Massachusetts, or other bank
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supervisory authority, the Landlord may terminate the lease only with the
authority, and any such authority shall in any event have the election either to
continue or to terminate the lease: Provided that in the event this lease is
terminated, the maximum claim of Landlord for damages or indemnity for injury
resulting from the rejection or abandonment of the unexpired term of the lease
shall in no event be in an amount exceeding the rent reserved by the lease,
without acceleration, for the year next succeeding the date of the surrender of
the premises to the Landlord, or the date or re-entry of the Landlord, whichever
first occurs, whether before or after the closing of the bank, plus an amount
equal to the unpaid rent accrued, without acceleration up to such date.
21.19. Cost of Moving D.E.Q.E. The parties recognize that the Massachusetts
Department of Environmental of Quality Engineering has equipment in the premises
Teanat is leasing hereunder. Landlord agrees to move said equipment, the cost of
such removal, however, shall be paid by Tenant.
21.20. Applicable Law and Construction. This Lease shall be goverened by
and construed in accordance with the laws of the state in which the Building is
located. Unless repugnant to the context, the words "Landlord" and "Tenant"
appearing in this Lease shall be construed to mean those named in Article 1.1
and their respective heirs, executors, administrators, successors and assigns,
and those claiming through or under them respectively. If there be more than one
tenant, the obligations imposed by this Lease upon Tenant shall be joint and
several. The word "term" shall be construed to include the original term and any
option term.
21.21. Warranties. It is agreed that no warranties or representations,
other than set forth herein, either express or implied in law or in fact, have
been made by Landlord.
21.22. Severability. It is agreed that if any provision of this Lease shall
be determined to be void by any court of competent jurisdiction, then such
determination shall not affect any other provisions of this Lease, all of which
other provisions shall remain in full force and effect; and it is in the
intention of the parties hereto that if any provision of this Lease is capable
of two constructions, one of which wuld render the provosion void and the other
of which would render the provosion valid, then the provision shall have the
meaning which renders it valid.
21.23. Lease as Entire Agreement. This Lease contains the entire and only
agreement between the parties and all prior negotiations, representations,
statements, warranties, understandings and agreements whether written or oral
with respect to the Premises, the Buiding, the real Property or this Lease are
merged in this Lease and any such statements,
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representations, warranties, understandings or agreements, whether oral or
written, not referred to or contained in this Lease shall have no force or
effect. Tenant acknowledges that all represenataions, statements, warranties,
agreements, and understandings upon which Tenant relied in executing this Lease
are contained herein and that Tenant in no way relied upon any other
representations, statements, warranties, agreements, or understandings whether
written or oral. This Lease may not be changed, modified or discharged in any
way, and no executory agreement shal lbe effective to change, modify or
discharge, in whole or in part, this Lease or any obligations under this Leae,
unless such agreement is set forth in a written instrument signed by the
parties.
21.21 Captions. All headings used herein are for convenience only and do
not constitute a part of this Lease and in no way do they limit or amplify the
terms and provisions of this Lease.
WITNESS the execution hereof in triplicate and under seal on the day and
year first above written.
LANDLORD:
FIRST HOLDING TRUST
/s/ By: /s/ Fred Faust
Witness Fred Faust,
Trustee as aforesaid and
not individually
TENANT:
WHITELAW CORPORATION, INC.
/s/ By: /s/ John P. Clancy, Jr.
Witness John P. Clancy, Jr.
Chief Financial Officer
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EXHIBIT 10.2
AMENDMENT TO LEASE
AMENDMENT TO LEASE ("Lease"), dated as of the 28th day of December,
1990, by and between Fred Faust, Trustee of First Holding Trust, with an address
of c/o First Development Group, 28 Parker Ridge Way, Newburyport, Massachusetts
01950 (hereinafter referred to as "Landlord," which term includes his successors
and assigns and any subsequent owner of the Landlord's interest in the Building,
Real Property or Premises) and Enterprise Bank and Trust Company, a
Massachusetts banking corporation with a usual place of business at 222
Merrimack Street, Lowell, Massachusetts 01852 (hereinafter referred to as
"Tenant," which term shall include its successors and assigns).
WHEREAS, the Landlord and Tenant are parties to a lease dated July 22,
1988 for the premises located at 222 Merrimack Street, Lowell, Massachusetts
(the "Lease"), the terms and conditions of which are incorporated by reference
hereto herein as if fully set forth herein; and
WHEREAS, the Landlord and Tenant desire to amend certain provisions of
the Lease.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and the mutual covenants contained
herein, the parties hereby agree to amend the Lease as follows:
A. ARTICLE I, REFERENCE DATA, is hereby amended as follows:
1. The description of the Premises shall be amended by adding the
following paragraph:
1,300 square feet of interior space measured from the center
of outside walls to the center of the common walls on the
ground floor (100 square feet) and the second floor (1,200
square feet) of the Building; (as shown on Exhibit "A"
attached hereto to this Lease Amendment). The ground floor
space shall be hereinafter referred to as the "Ground Floor
Storage Space" and the second floor space shall hereinafter be
referred to as the "Second Floor Space". Together they shall
also hereinafter be referred to as the "Additional Space".
2. The description of the Interior Premises Square Footage shall be
amended by deleting the number of 10,315 square feet of interior space and
substituting in its place the number 11,615 square feet of interior space.
3. The description of the Rent Commencement Date shall be amended by
adding the following paragraph:
<PAGE>
The Rent Commencement Date for the Additional Space shall be January 1,
1991.
4. The description of the Annual Fixed Rent shall be amended by adding
the following:
Second Floor Space at $10,824.00 per year for 1,200 square feet at
$9.02 per square foot, and for the Ground Floor Storage Space at $594.00 per
year for 100 square feet at $5.94 per square foot, both subject to periodic
adjustments as provided in Article IV, Section 4.1.3.
5. The description of the Tenant's Proportionate Share shall be amended
by changing the percentage of 46.09% cited therein and substituting in its place
the percentage of 51.39%.
6. The description of the Exhibits listed in Section 1.3 of the least
shall be amended by adding the following:
Exhibit A to Lease Amendment - Plan showing the Additional Space within
the Building which is being leased pursuant to this Amendment to Lease.
B. ARTICLE II, DEMISED PREMISES is hereby amended by adding to the definition of
the Premises the area as shown on Exhibit A to Lease Amendment entitled Plan of
Additional Leased Premises, initialed by the parties and annexed hereto and made
a part hereof.
C. ARTICLE III, TERM is hereby amended by adding the following paragraph to the
end of Section 3.1.
The Additional Space being leased hereunder shall be for a term
coextant with the term contained in the original lease so that the Lease Term
for the Additional Space terminates on the same day that the Lease Term ended
with respect to the original Premises and the same shall be true for the
exercise of any Option Terms, it being the intent that the Additional Space
being leased hereunder shall be considered to have been leased as if with the
original Premises.
D. ARTICLE IV, RENT shall be amended by adding the following paragraph 4.1.2.
(b).
(b) January 1, 1991 to December 31, 1991. Annual Fixed Rent for the
Second Floor Space of the Premises and the Ground Floor Storage Space of the
Premises commencing on January 1, 1991 and ending at the close of the day on
December 31, 1991 at the rate for the Second Floor Space of Ten Thousand Eight
Hundred Twenty Four and 00/100 ($10,824.00) Dollars per annum, payable in
advance, in monthly installments of Nine Hundred Two and 00/100 ($902.00)
Dollars each and at the rate for the Ground Floor Storage Space of Five Hundred
Ninety Four and 00/100 ($594.00) Dollars per annum, payable in advance in
monthly installments of Forty Nine and 50/100 ($49.50) Dollars per annum each.
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<PAGE>
E. ARTICLE IV, RENT shall be amended by adding the following paragraph 4.1.3.2.
Annual Fixed Rent Adjustments; Second Floor Space and Ground Floor Storage
Space.
4.1.3.2. Annual Fixed Rent Adjustments; Second Floor Space and Ground Floor
Storage Space. During the Initial Term of this Lease and in the event Tenant
exercises any of its options to extend the term of this Lease in accordance with
Article III, the Annual Fixed Rent for the Second Floor Space of the Premises
and the Ground Floor Storage Space of the Premises during such initial and
option terms shall be increased as described below.
(a) January 1, 1992 to December 31, 1992. Annual Fixed Rent for the
Second Floor Space of the Premises and the Ground Floor Storage Space of the
Premises commencing on January 1, 1992 and ending at the close of the day on
December 31, 1992 at the rate for the Second Floor of Eleven Thousand Three
Hundred Eleven and 08/100 ($11,311.08) Dollars per annum, payable in advance, in
monthly installments of Nine Hundred Forty Two and 59/100 ($942.59) Dollars each
and at the rate for the Ground Floor Storage Space of Six Hundred Twenty and
73/100 ($620.73) Dollars per annum, payable in advance in monthly installments
of Fifty One and 73/100 ($51.73) Dollars per annum each.
(b) January 1, 1993 to December 31, 1993. Annual Fixed Rent for the
Second Floor Space of the Premises and the Ground Floor Storage Space of the
Premises commencing on January 1, 1993 and ending at the close of the day on
December 31, 1993 at the rate for the Second Floor Space of Eleven Thousand
Eight Hundred Twenty and 08/100 ($11,820.08) Dollars per annum, payable in
advance, in monthly installments of Nine Hundred Eighty Five and 01/100
($985.01) Dollars each and at the rate for the Ground Floor Storage Space of Six
Hundred Forty Eight and 66/100 ($648.66) Dollars per annum, payable in advance
in monthly installments of Fifty Four and 06/100 ($54.06) Dollars per annum
each.
(c) January 1, 1994 to December 31, 1994. Annual Fixed Rent for the
Second Floor Space of the Premises and the Ground Floor Storage Space of the
Premises commencing on January 1, 1994 and ending at the close of the day on
December 31, 1994 at the rate for the Second Floor Space of Twelve Thousand
Three Hundred Fifty One and 98/100 ($12,351.98) Dollars per annum, payable in
advance, in monthly installments of One Thousand Twenty Nine and 33/100
($1,029.33) Dollars each and at the rate for the Ground Floor Storage Space of
Six Hundred Seventy Seven and 85/100 ($677.85) Dollars per annum, payable in
advance in monthly installments of Fifty Six and 49/100 ($56.49) Dollars per
annum each.
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<PAGE>
(d) January 1, 1995 to December 31, 1995. Annual Fixed Rent for the
Second Floor Space of the Premises and the Ground Floor Storage Space of the
Premises commencing on January 1, 1995 and ending at the close of the day on
December 31, 1995 at the rate for the Second Floor Space of Twelve Thousand Nine
Hundred Seven and 82/100 ($12,907.82) Dollars per annum, payable in advance, in
monthly installments of One Thousand Seventy Five and 65/100 ($1,075.65) Dollars
each and at the rate for the Ground Floor Storage Space of Seven Hundred Eight
and 36/100 ($708.36) Dollars per annum, payable in advance in monthly
installments of Fifty Nine and 03/100 ($59.03) Dollars per annum each.
(e) January 1, 1996 to December 31, 1997. The annual fixed rent payable
pursuant to Article IV, Section 4.1.3.2 (d) above shall be multiplied by one
half (1/2) of the percentage increase in the United States Consumer Price Index,
for U.S. Cities, All Urban Consumers (the "Index") for the yearly period
commencing on the first day of January 1, 1995 and ending at the close of the
day on December 31, 1995. The resulting calculation shall be the new Annual
Fixed Rent for the period from January 1, 1996 to December 31, 1997.
(f) January 1, 1998 to December 31, 1999. Beginning with the yearly
period commencing on the first day of January 1, 1996 and ending on the close of
the day on December 31, 1996, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 1996 to December 31, 1997 by one half (1/2) of
the percentage increase in the Index for the 1996 yearly period. Thereafter for
the next succeeding yearly period (1997) a new CPI Rental Amount shall be
calculated by increasing the previous yearly CPI Rental Amount by one half (1/2)
of the percentage increase in the Index for the 1997 yearly period. The
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the period from January 1, 1998 to December 31, 1999.
(g) January 1, 2000 to December 31, 2001. Beginning with the yearly
period commencing on the first day of January 1, 1998 and ending on the close of
the day on December 31, 1998, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 1998 to December 31, 1999 by one half (1/2) of
the percentage increase in the Index for the 1998 yearly period. Thereafter for
the next succeeding yearly period (1999) a new CPI a new CPI Rental Amount shall
be calculated by increasing the previous yearly CPI Rental Amount by one half
(1/2) of the percentage increase in the Index for the 1999 yearly period. The
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the period from January 1, 2000 to December 31, 2001.
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<PAGE>
(h) January 1, 2002 to December 31, 2003. Beginning with the yearly
period commencing on the first day of January 1, 2000 and ending on the close of
the day on December 31, 2000, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 2000 to December 31, 2001 by one half (1/2) of
the percentage increase in the Index for the 2000 yearly period (2001) a new CPI
Rental Amount shall be calculated by increasing the previous yearly CPI Rental
Amount by one half (1/2) of the percentage increase in the Index for the 2001
yearly period. The resulting new CPI Rental Amount, calculated after two years,
shall be the new Annual Fixed Rent for the period from January 1, 2002 to
December 31, 2003.
(i) January 1, 2004 to December 31, 2005. Beginning with the yearly
period commencing on the first day of January 1, 2002 and ending on the close of
the day on December 31, 2002, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 2002 to December 31, 2003 by one half (1/2) of
the percentage increase in the Index for the 2002 yearly period. Thereafter for
the next succeeding yearly period (2003) a new CPI Rental Amount shall be
calculated by increasing the previous yearly CPI Rental Amount by one half (1/2)
of the percentage increase in the Index for the 2003 yearly period. The
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the period from January 1, 2004 to December 31, 2005.
(j) January 1, 2006 to December 31, 2007. Beginning with the yearly
period commencing on the first day of January 1, 2004 and ending on the close of
the day on December 31, 2004, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 2004 to December 31, 2005 by one half (1/2) of
the percentage increase in the Index for the 2004 yearly period. Thereafter for
the next succeeding yearly period (2005) a new CPI Rental Amount shall be
calculated by increasing the previous yearly CPI Rental Amount by one half (1/2)
of the percentage increase in the Index for the 2005 yearly period. The
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the period from January 1, 2006 to December 31, 2007.
(k) January 1, 2008 to December 31, 2008. Beginning with the yearly
period commencing on the first day of January 1, 2006 and ending on the close of
the day on December 31, 2006, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
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<PAGE>
for the period from January 1, 2006 to December 31, 2007 by one half (1/2) of
the percentage increase in the Index for the 2006 yearly period. Thereafter for
the next succeeding yearly period (2007) a new CPI Rental Amount by one half
(1/2) of the percentage increase in the Index for the 2007 yearly period. The
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the period from January 1, 2008 to December 31, 2008.
F. ARTICLE XVII, RENTAL OPTION AND RIGHT OF FIRST REFUSAL is hereby amended by
adding the following:
The Tenant agrees that it has been notified of the Landlord's intent to
rent space to Dr. Martin Kassan and/or First Development Group in what is
currently known as Suite 230 within the building and by executing this Amendment
to Lease, the Tenant is indicating that it is not interested in exercising its
right of first refusal for said space.
G. The following section 21.25 is added to ARTICLE XXI.
The Tenant is accepting the Additional Space in its as is condition
except that no furniture or furnishings are included in the Additional Space
other than the window, door blinds and light fixtures.
Except as amended herein the parties agree that the terms and provisions of the
Lease are in full force and effect.
WITNESS the execution hereof in triplicate and under seal on the day
and year first above written.
LANDLORD:
/s/ /s/ Fred Faust
Witness Fred Faust, Trustee of First
Holding Trust and not
individually
TENANT:
ENTERPRISE BANK AND TRUST
COMPANY
/s/ /s/ Diane J. Costa
Witness By: Diane J. Costa
Its: Vice President
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<PAGE>
[First floor floorplan showing area marked as 100 sq. ft.]
Additional Ground Floor Rental Area
Exhibit A
<PAGE>
[floor plan]
Exhibit A Suite 220 Old City Hall
EXHIBIT 10.3
SECOND AMENDMENT TO LEASE
SECOND AMENDMENT TO LEASE ("Lease"), dated as of the 15th day of August
1991, by and between Fred Faust, Trustee of First Holding Trust, with an address
c/o First Development Group, P.O. Box 71, Newburyport, Massachusetts 01950
(hereinafter referred to as "Landlord," which term includes his successors and
assigns and any subsequent owner of the Landlord's interest in the Building,
Real Property or Premises) and Enterprise Bank and Trust Company, a
Massachusetts banking corporation with a usual place of business at 222
Merrimack Street, Lowell, Massachusetts 01852 (hereinafter referred to as
"Tenant," which term shall include its successors and assigns).
WHEREAS, the Landlord and Tenant are parties to a lease dated July 22, 1988
and an amendment to lease dated December 28, 1990 for the premises located at
222 Merrimack Street, Lowell, Massachusetts (together the lease and the
amendment to lease are hereinafter referred to as the "Lease"), the terms and
conditions of which are incorporated by reference hereto herein as if fully set
forth herein; and
WHEREAS, the Landlord and Tenant desire to amend certain provisions of the
Lease.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and the mutual covenants contained
herein, the parties hereby agree to amend the Lease as follows:
A. ARTICLE I, REFERENCE DATA, is hereby amended as follows:
1. The description of the Premises shall be amended by adding the following
paragraph:
851 square feet of interior space measured from the center of outside
walls to the center of the common walls on the second floor of the
Building, (as shown on Exhibit "A" attached hereto to this Second
Amendment to Lease). The additional space being rented shall
hereinafter be referred to as the "Second Amendment Additional Space".
2. The description of the Premises shall be amended by deleting that
portion describing the Premises in Article I, Reference Data which make
reference to the Ground Floor Storage Space, which Ground Floor Storage Space is
no longer subject to the terms of this Lease. The reference to Additional Space
in the Amendment to Lease shall be construed to only mean the Second Floor Space
as defined therein.
<PAGE>
3. The description of the Interior Premises Square Footage shall be amended
by deleting the number of 11,615 square feet of interior space and substituting
in its place the number 12,366 square feet of interior space.
4. The description of the Rent Commencement Date shall be amended by adding
the following paragraph:
The Rent Commencement Date for the Second Amendment Additional Space shall
be October 1, 1991.
5. The description of the Annual Fixed Rent shall be amended by adding the
following:
Second Amendment Additional Space at 7,676.02 per year for 851 square feet
at $9.02 per square foot, subject to periodic adjustments as provided in Article
IV, Section 4.1.3.
6. The description of the Tenant's Proportionate Share shall be amended by
changing the percentage of 51.39% cited therein and substituting in its place
the percentage of 54.72%.
7. The description of the Exhibits listed in Section 1.3 of the lease shall
be amended by adding the following:
Exhibit A to Second Amendment to Lease - Plan showing the Second Amendment
Additional Space within the Building which is being leased pursuant to this
Second Amendment to Lease.
B. ARTICLE II, DEMISED PREMISES is hereby amended by adding to the definition of
the Premises the area as shown on Exhibit A to Second Amendment to Lease
entitled Plan of Second Amendment Additional Leased Premises, initialed by the
parties and annexed hereto and made a part hereof.
C. ARTICLE III, TERM is hereby amended by adding the following paragraph to the
end of Section 3.1.
The Second Amendment Additional Space being leased hereunder shall be for a
term coextant with the term contained in the original lease so that the Lease
Term for the Second Amendment Additional Space terminates on the same day that
the Lease Term ended with respect to the original Premises and the same shall be
true for the exercise of any Option Terms, it being the intent that the Second
Amendment Additional Space being leased hereunder shall be considered to have
been leased as if with the original Premises.
D. ARTICLE IV, RENT shall be amended by deleting from Article IV, Rent,
paragraph 4.1.2.(b). the obligation to pay rent for the Ground Floor Storage
Space for the months of October, November and December, 1991.
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<PAGE>
E. ARTICLE IV, RENT shall be amended by deleting from Article IV, Rent,
paragraph 4.1.3.2. all references to pay rent for the Ground Floor Storage
Space.
F. ARTICLE IV, RENT shall be amended by adding the following paragraph 4.1.2.
(c)
(c) October 1. 1991 to December 31. 1991. Annual Fixed Rent for the Second
Amendment Additional Space of the Premises commencing on October 1, 1991 and
ending at the close of the day on December 31, 1991 at the rate of Seven
Thousand Six Hundred Seventy Six and 02/100 ($7,676.02) Dollars per annum,
payable in advance, in monthly installments of Six Hundred Thirty Nine and
67/100 ($639.67) Dollars each.
E. ARTICLE IV, RENT shall be amended by adding the following paragraph 4.1.3.3.
Annual Fixed Rent Adjustments; Second Amendment Additional Space.
4.1.3.3. Annual Fixed Rent Adjustments: Second Amendment Additional Space.
During the Initial Term of this Lease and in the event Tenant exercises any of
its options to extend the term of this Lease in accordance with Article III, the
Annual Fixed Rent for the Second Amendment Additional Space of the Premises
during such initial and option terms shall be increased as described below.
(a) January l. 1992 to December 31. 1992. Annual Fixed Rent for the Second
Amendment Additional Space of the Premises commencing on January 1, 1992 and
ending at the close of the day on December 31, 1992 at the rate of Eight
Thousand Twenty One and 44/100 ($8,021.44) Dollars per annum, payable in
advance, in monthly installments of Six Hundred Sixty Eight and 45/100 ($668.45)
Dollars each.
(b) January l, 1993 to December 31, 1993. Annual Fixed Rent for the Second
Amendment Additional Space of the Premises commencing on January 1, 1993 and
ending at the close of the day on December 31, 1993 at the rate of Eight
Thousand Three Hundred Eighty Two and 41/100 ($8,382.41) Dollars per annum,
payable in advance, in monthly installments of Six Hundred Ninety Eight and
53/100 ($698.53) Dollars each.
(c) January 1. 1994 to December 31. 1994. Annual Fixed Rent for the Second
Amendment Additional Space of the Premises commencing on January 1, 1994 and
ending at the close of the day on December 31, 1994 at the rate of Eight
Thousand Seven Hundred Fifty Nine and 61/100 ($8,759.61) Dollars per annum,
payable in advance, in monthly installments of Seven Hundred Twenty Nine and
97/100 ($729.97) Dollars each.
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<PAGE>
(d) January 1, 1995 to December 31. 1995. Annual Fixed Rent for the Second
Amendment Additional Space of the Premises commencing on January 1, 1995 and
ending at the close of the day on December 31, 1995 at the rate of Nine Thousand
One Hundred Fifty Three and 80/100 ($9,153.8) Dollars per annum, payable in
advance, in monthly installments of Seven Hundred Sixty Two and 82/100 ($762.82)
Dollars each.
(e) January 1, 1996 to December 31, 1997. The annual fixed rent payable
pursuant to Article IV, Section 4.1.3.3 (d) above shall be multiplied by one
half (1/2) of the percentage increase in the United States Consumer Price Index,
for U.S. Cities, All Urban Consumers (the "Index") for the yearly period
commencing on the first day of January 1, 1995 and ending at the close of the
day on December 31, 1995. The resulting calculation shall be the new Annual
Fixed Rent for the period from January 1, 1996 to December 31, 1997.
(f) January 1, 1998 to December 31, 1999. Beginning with the yearly period
commencing on the first day of January 1, 1996 and ending on the close of the
day on December 31, 1996, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 1996 to December 31, 1997 by one half (1/2) of
the percentage increase in the Index for the 1996 yearly period. Thereafter for
the next succeeding yearly period (1997) a new CPI Rental Amount shall be
calculated by increasing the previous yearly CPI Rental Amount by one half (1/2)
of the percentage increase in the Index for the 1997 yearly period. The
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the period from January 1, 1998 to December 31, 1999.
(g) January 1, 2000 to December 31 2001. Beginning with the yearly period
commencing on the first day of January 1, 1998 and ending on the close of the
day on December 31, 1998, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 1998 to December 31, 1999 by one half (1/2) of
the percentage increase in the Index for the 1998 yearly period. Thereafter for
the next succeeding yearly period (1999) a new CPI Rental Amount shall be
calculated by increasing the previous yearly CPI Rental Amount by one half (1/2)
of the percentage increase in the Index for the 1999 yearly period. The
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the period from January 1, 2000 to December 31, 2001.
(h) January 1. 2002 to December 31. 2003. Beginning with the yearly period
commencing on the first day of January 1, 2000 and ending on the close of the
day on December 31, 2000, a rental amount (the "CPI Rental Amount") for said
yearly period shall be
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<PAGE>
calculated by increasing the annual fixed rent payable for the period from
January 1, 2000 to December 31, 2001 by one half (1/2) of the percentage
increase in the Index for the 2000 yearly period. Thereafter for the next
succeeding yearly period (2001) a new CPI Rental Amount shall be calculated by
increasing the previous yearly CPI Rental Amount by one half (1/2) of the
percentage increase in the Index for the 2001 yearly period. The resulting new
CPI Rental Amount, calculated after two years, shall be the new Annual Fixed
Rent for the period from January 1, 2002 to December 31, 2003.
(i) January 1, 2004 to December 31, 2005. Beginning with the yearly period
commencing on the first day of January 1, 2002 and ending on the close of the
day on December 31, 2002, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 2002 to December 31, 2003 by one half (1/2) of
the percentage increase in the Index for the 2002 yearly period. Thereafter for
the next succeeding yearly period (2003) a new CPI Rental Amount shall be
calculated by increasing the previous yearly CPI Rental Amount by one half (1/2)
of the percentage increase in the Index for the 2003 yearly period. The
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the period from January 1, 2004 to December 31, 2005.
(j) January 1, 2006 to December 31, 2007. Beginning with the yearly period
commencing on the first day of January 1, 2004 and ending on the close of the
day on December 31, 2004, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 2004 to December 31, 2005 by one half (1/2) of
the percentage increase in the Index for the 2004 yearly period. Thereafter for
the next succeeding yearly period (2005) a new CPI Rental Amount shall be
calculated by increasing the previous yearly CPI Rental Amount by one half (1/2)
of the percentage increase in the Index for the 2005 yearly period The resulting
new CPI Rental Amount, calculated after two years, shall be the new Annual Fixed
Rent for the period from January lt 2006 to December 31, 2007.
(k) January 1. 2008 to December 31 2008. Beginning with the yearly period
commencing on the first day of January 1, 2006 and ending on the close of the
day on December 31, 2006, a rental amount (the "CPI Rental Amount") for said
yearly period shall be calculated by increasing the annual fixed rent payable
for the period from January 1, 2006 to December 31, 2007 by one half (1/2) of
the percentage increase in the Index for the 2006 yearly period. Thereafter for
the next succeeding yearly period (2007) a new CPI Rental Amount shall be
calculated by increasing the previous yearly CPI Rental Amount by one half (1/2)
of the percentage increase in the Index for the 2007 yearly period. The
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<PAGE>
resulting new CPI Rental Amount, calculated after two years, shall be the new
Annual Fixed Rent for the period from January 1, 2008 to December 31, 2008.
G. The following section 21.26 is added to ARTICLE XXI.
The Tenant is accepting the Second Amendment Additional Space in its as is
condition and no furniture or furnishings are included in the Second Amendment
Additional Space other than the windows door blinds and light fixtures contained
therein.
Except as amended herein the parties agree that the terms and provisions of the
Lease are in full force and effect.
H. The parties agree that for purposes of calculating the Tenant's Proportionate
Share, as specified in Paragraph 6, they relied upon the figure 22,600 square
feet as the amount of net leasable space in the building
WITNESS the execution hereof in triplicate and under seal on the day
and year first above written.
LANDLORD:
/s/ /s/ Fred Faust
Witness Fred Faust, Trustee of First
Holding Trust and not
individually
TENANT:
ENTERPRISE BANK AND TRUST
COMPANY
/s/ /s/ Diane J. Costa
Witness By: Diane J. Costa
Its: Vice President
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<PAGE>
851 Sq. Ft. Suite 230 7-18-91
[Second floor floorplan with certain space marked]
EXHIBIT 10.4
COMMERCIAL LEASE FORM
Premises: Suite #301 & #304
170 Merrimack Street
Lowell, MA 01852
Lessor: Shawmut Bank, N.A.
Lessee: Enterprise Bank and Trust Company
$1,028.33 per month
$12,340.00 per year
Term: One Year (extended)
Commencing: July 1, 1992
Expiring: December 31, 1993
FROM THE OFFICE OF
<PAGE>
STANDARD FORM COMMERCIAL LEASE
1. PARTIES: Shawmut Bank, N.A., pursuant to Article XIX of the
least between Shawmut Bank, N.A. as tenant and
Merrimack Realty Trust as landlord
LESSOR, which expression shall include Shawmut
Bank, heirs, successors, and assigns where the
context so admits, does hereby lease to Enterprise
Bank and Trust Company
LESSEE, which expression shall include Enterprise
Bank & Trust successors, executors,
administrators, and assigns where the context so
admits, and the LESSEE hereby leases the following
2. PREMISES described premises:
Suites #301 & #304
170 Merrimack Street
Lowell, MA 01852
Approximately 429 s.f. +/- for Suite 301
Approximately 805 s.f. +/- for Suite 304
Total s.f. of approximately 1,234 +/-
together with the right to use in common, with others
entitled thereto, the hallways, stairways, and
elevators, necessary for access to said leased
premises, and lavatories nearest thereto.
3. TERM The term of this lease shall be for Nineteen (19)
months commencing on July 1, 1992 and ending on
December 31, 1993. The lessee shall have the right at
its option to extend the initial term of this lease
for (1) additional year, (extended year) to be
exercised by written notice to lessor on or before
October 1, 1993.
4. RENT The LESSEE shall pay to LESSOR rent at the rate of
$12,340.00 dollars per year, payable in advance in
monthly installments of $1,028.33. The rental for
the option period is as described in the attached
rider to lease.
5. SECURITY
DEPOSIT
6. RENT
ADJUSTMENT
7. UTILITIES The LESSOR shall provide and LESSEE shall pay for all
LESSEE'S utilities, water and sewer use, and charges,
except Lessor shall provide electrical service only to
the lessee's meter board. Present electrical service
is 3 phase 4 wire service.
<PAGE>
LESSOR agrees to furnish reasonable heat to
the least premises, the hallways, stairway,
elevators, and lavatories during normal business
hours on regular business days of the heating season
of each year, to furnish elevator service and to
light passageways and stairways during business
hours, and to furnish such cleaning service as is
customary in similar buildings in said city or town,
all subject to interruption due to any accident, to
the making of repairs, alterations or improvements,
to labor difficulties, to trouble in obtaining fuel,
electricity, service or supplies from the sources
from which they are usually obtained for said
building, or to any cause beyond the LESSOR's
control.
8. USE OF The LESSEE shall use the leased premises only for
LEASED the purpose of banking and related financial
PREMISES matters.
9. COMPLIANCE The LESSEE acknowledges that no trade or
WITH LAWS occupation shall be conducted in the leased
premises or use made thereof which will be unlawful,
improper, noisy or offensive, or contrary to any law
or any municipal by-law or ordinance in force in the
city or town in which the premises are situated.
10. FIRE The LESSEE shall not permit any use of leased
INSURANCE premises which will make voidable any insurance on
the property of which the leased premises are a part,
or on the contents of said property or which shall be
contrary to any law or regulation from time to time
established by the New England Fire Insurance Rating
Association, or any similar body succeeding to its
powers. The LESSEE shall on demand reimburse the
LESSOR, and all other tenants, all extra insurance
premiums caused by the LESSEE'S use of the premises.
11.MAINTENANCE The LESSEE agrees to maintain the leased premises
OF PREMISES in the same condition as they are at the
commencement of the term or as they may be put in
during the term of this lease, reasonable wear and
tear, damage by fire and other casualty only
excepted, and whenever necessary, to replace plate
glass and other glass therein, acknowledging that the
leased premises are now in good order and the glass
whole. The LESSEE shall not permit the leased
premises to be overloaded, damaged, stripped, or
defaced, nor suffer any waste, LESSEE shall obtain
written consent of LESSOR before erecting any sign on
the premises.
12.ALTERATIONS- The LESSEE shall not make structural alterations
ADDITIONS or additions to the leased premises, provided the
<PAGE>
LESSOR consents thereto in writing, which consent
shall not be unreasonably withheld or delayed.
All such allowed alterations shall be at LESSEE's
expense and shall be in quality at least equal to
the present contruction. LESSEE shall not permit
any mechanics' liens, or similar liens, to remain
upon the leased premises for labor and material
furnished to LESSEE or claimed to have been
furnished to LESSEE in connection with work of any
character performed or claimed to have been
performed at the direction of LESSEE and shall
cause any such lien to be released of record
forthwith without cost to LESSOR. Any alterations
or improvements made by the LESSEE shall become
the property of the LESSOR at the termination of
occupancy as provided herein.
The lessee may make non structural alterations
without seeking written consent.
13. ASSIGNMENT The LESSEE shall not assign or sublet the whole or
SUBLEASING any part of the leased premises without LESSOR'S
prior written consent, notwithstanding such consent,
LESSEE shall remain liable to LESSOR for the payment
of all rent and for the full performance of the
covenants and conditions of this lease.
14.SUBORDINATION This lease shall be subject and subordinate to any
and all mortgages, deeds of trust and other
instruments in the nature of a mortgage, now or at
any time hereafter, a lien or liens on the property
of which the leased premises are a part and the
LESSEE shall, when requested, promptly execute and
deliver such written instruments shall be necessary
to show the subordination of this lease to said
mortgages, deeds of trust or other such instruments
in the nature of a mortgage.
15. LESSOR'S The LESSOR or agents of the LESSOR may, at
ACCESS reasonable times, enter to view the leased
premises and may remove placards and signs not
approved and affixed as herein provided, and make
repairs and alterations as LESSOR should elect to do
and may show the leased premises to others, and at
any time within three (3) months before the
expiration of the term, may affix to any suitable
part of the leased premises a notice for letting or
selling the leased premises or property of which the
leased premises are a part and keep the same so
affixed without hindrance or molestation.
16. INDEMNIFI- The LESSEE shall save the LESSOR harmless from all
CATION AND loss and damage occasioned by the use or escape
LIABILITY of water or by the bursting of pipes, as well as
from any claim or damage resulting from neglect in
not removing snow and ice from the roof of the
<PAGE>
building or from the sidewalks bordering upon the
premises so leased, or by any nuisance made or
suffered on the leased premises, unless such loss is
caused by the neglect of the LESSOR. The removal of
snow and ice from the sidewalks bordering upon the
leased premises shall be Lessor's responsibility.
17. LESSEE'S The LESSEE shall maintain with respect to the
LIABILITY leased premises and the property, of which the
INSURANCE leased premises are a part, comprehensive public
(fill in) liability insurance in the amount of
$100,000/$300,000 with property damage insurance in
limits of $25,000 in responsible companies qualified
to do business in Massachusetts and in good standing
therein insuring the LESSOR as well as LESSEE against
injury to persons or damage to property as provided.
The LESSEE shall deposit with the LESSOR certificates
for such insurance at or prior to the commencement of
the term, and thereafter within thirty (30) days
prior to the expiration of any such policies. All
such insurance certificates shall provide that such
policies shall not be cancelled without at least ten
(10) days prior written notice to each assured named
therein.
18. FIRE Should a substantial portion of the leased
CASUALTY- premises, or of the property of which they are a
EMINENT a part, be substantially damaged by fire or other
DOMAIN casualty, or be taken by eminent domain, the
LESSOR may elect to terminate this lease. When such
fire, casualty, or taking renders the leased premises
substantially unsuitable for their intended use, a
just and proportionate abatement of rent shall be
made, and the LESSEE may elect to terminate this
lease if:
(a) The LESSOR fails to give written notice
within thirty (30) days of intention to
restore leased premises, or
(b) The LESSOR fails to restore the
leased premises to a condition
substantially suitable for their
intended use within ninety (90) days
of said fire, casualty, or taking.
The LESSOR reserves, and the LESSEE grants to the
LESSOR, all rights which the LESSEE may have for
damages or injury to the leased premises for any
taking by eminent domain, except for damage to the
LESSEE's fixtures, property, or equipment.
19. DEFAULT In the event that:
AND (a) The LESSEE shall default in
BANKRUPTCY the payment of any installment of
rent or other sum herein specified
and such default shall continue for
<PAGE>
ten (10) days after written notice
thereof; or
(b) The LESSEE shall default in the
observance or performance of any
other of the LESSEE's covenants,
agreements, or obligations
hereunder and such default shall
not be corrected within thirty (30)
days after written notice thereof;
or
(c) The LESSEE shall be declared
bankrupt or insolvent according to
law, or, if any assignment shall be
made of LESSEE's property for the
benefit of creditors,
then the LESSOR shall have the right
thereafter, while such default continues, to
re-enter and take complete possession of the
leased premises, to declare the term of this
lease ended, and remove the LESSEE's
effects, without prejudice to any remedies
which might be otherwise used for arrears of
rent or other default. The LESSEE shall
indemnify the LESSOR against all loss of
rent and other payments which the LESSOR may
incur by reason of such termination during
the residue of the term. If the LESSEE shall
default, after reasonable notice thereof, in
the observance or performance of any
conditions or covenants on LESSEE's part to
be observed or performed under or by virtue
of any of the provisions in any article of
this lease, the LESSOR, without being under
any obligation to do so and without thereby
waiving such default, may remedy such
default for the account and at the expense
of the LESSEE. If the LESSOR makes any
expenditures or incurs any obligations for
the payment of money in connection
therewith, including but not limited to,
reasonable attorney's fees in instituting,
prosecuting or defending any action or
proceeding, such sums paid or obligations
insured, with interest at the rate of six
(6) per cent per annum and costs, shall be
paid to the LESSOR by the LESSEE as
additional rent.
20. NOTICE Any notice from the LESSOR to the LESSEE
relating to the leased premises or to the
occupancy thereof, shall be deemed duly
service, if left at the leased premises
addressed to the LESSEE, or, if mailed to
the leased premises, registered or certified
mail, return receipt requested, postage
prepaid, addressed to the LESSEE. Any notice
from the LESSEE to the LESSOR relating to
<PAGE>
the leased premises or to the occupancy thereof,
shall be deemed duly served, if mailed to
the LESSOR by registered or certified mail,
return receipt requested, postage prepaid,
addressed to the LESSOR at such address as
the LESSOR may from time to time advise in
writing. All rent and notices shall be paid
and sent to the LESSSOR at
Shawmut Bank, N.A., Locations &
Facilities - OF 9913
P.O. Box 2176, Boston, MA 02211
21. SURRENDER The LESSEE shall at the expiration or other
termination of this lease remove all LESSEE's
goods and effects from the leased premises,
(including, without hereby limiting the
generality of the foregoing, all signs and
lettering affixed or painted by the LESSEE,
either inside or outside the leased
premises). LESSEE shall deliver to the
LESSOR the leased premises and all keys,
locks thereto, and other fixtures connected
therewith and all alterations and additions
made to or upon the leased premises, in the
same condition as they were at the
commencement of the term, or as they were put
in during the term hereof, reasonable wear
and tear and damage by fire or other casualty
only excepted. In the event of the LESSEE's
failure to remove any of the LESSEE's
property from the premises, LESSOR is hereby
authorized without liability to LESSEE for
loss or damage thereto, and at the sole risk
of LESSEE, to remove and store any of the
property at LESSEE's expense, or to retain
some under LESSOR's control or to sell at
public or private sale, without notice any or
all of the property not so removed and to
apply the net proceeds of such sale to the
payment of any sum due hereunder, or to
destroy such property.
22. OTHER It is also understood and agreed that
PROVISION
See attached rider incorporated hereby by
reference.
<PAGE>
IN WITNESS WHEREOF, the LESSOR and LESSEE
have hereunto set their hands and common
seals this 26 day of May, 1992.
/s/
LESSSOR Shawmut Bank, N.A.
/s/
LESSEE Enterprise Bank & Trust Co.
/s/
Over-Lessor Merrimack Realty Trust
<PAGE>
RIDER TO LEASE AGREEMENT BETWEEN SHAWMUT BANK, N.A.
AND ENTERPRISE BANK AND TRUST COMPANY
22A Notwithstanding anything to the contrary contained herein, for the purposes
of this Lease the following definitions apply:
- Lessor is defined as "Sub-Lessor Shawmut Bank, N.A."
- Lessee is defined as "Sub-Lessee Enterprise Bank &
Trust Company"
- Over-Lessor is defined as "Merrimack Realty Trust"
22B Notwithstanding anything to the contrary contained herein, in any event
whereby the Lease between Over-Lessor and Sub- Lessor is terminated or
expires, Over-Lessor agrees to assume and recognize Lease between
Sub-Lessor and Sub- Lessee, and Sub-Lessee hereby agrees to accept and
recognize Over-Lessor in fulfilling the obligations of this Lease. In any
such event, Sub-Lessor shall have no further obligations or liabilities to
Sub-Lessee.
22C Lessor consents to lessee constructing a connecting door between the suites
at lessee's sole cost in a good workman like manner. Over-Lessor consents
to all improvements to be undertaken by Sub-Lessee.
22D As additional rent, Lessee shall pay in advance on each May 1st, an annual
charge for water, for air-conditional service. The present rate is
$200.00/year. The Lessee will be provided one on-site parking space. The
present rate is $45.00 per month due in advance to be added with the
monthly rental.
22E The rent for the extended year shall be increased in the event there is an
increase of the U.S. - All urban (CPI-U) of the United States Bureau of
Labor Statistics on the date the extended year is to commence over the
consumer price for the first month of the original term. If there is such
an increase in the CPI the yearly rental of $12,340.00 shall be increased
by the percent of such Consumer Price Index, but in no event should the
annual minimum rental during such option be less than $12,340.00.
SHAWMUT BANK, N.A. ENTERPRISE BANK AND TRUST COMPANY
/s/ /s/
Authorized signature Authorized signature
MERRIMACK REALTY TRUST
/s/
Authorized signature
EXHIBIT 10.5
LEASE
Section 1. Basic Lease Provisions
1.01 Date and Parties. This lease (Lease) is made the day of March 1995, between
North Central Investment Limited Partnership, (Landlord and Enterprise Bank and
Trust Company (Tenant). Landlord is a Massachusetts limited partnership with a
principal office at Post Office Box 724 in Leominster, Massachusetts 0143.
Tenant is a Massachusetts corporation with a principal office at 222 Merrimack
Street, Lowell, Massachusetts 01852.
1.02 Premises. The Landlord leases to the Tenant the premises at 2-6 Central
Street in Leominster, Massachusetts which premises are more particularly
described in Exhibit A attached hereto and incorporated by reference. The
premises now consist of a vacant building which shall be torn down and be
replaced with the building.
1.03 Use. The Tenant shall use the premises for a commercial bank or trust
company or for any retail or commercial use which shall be permitted by the
zoning ordinance of the City of Leominster as the same is from time to time
amended.
1.04 Term. The term of this lease shall be the period of sixty months (60)
commencing on the commencement date (hereafter defined) and ending sixty 60)
months after the commencement date. The commencement date shall occur seven-(7)
days after receipt by Tenant of a notice from Landlord that the building has
been substantially completed in accordance with Section 1 09 of this lease.
1.05 Extended Term. Tenant may extend the term of this lease for up to five (5)
consecutive periods of five (5) years each (Extended Terms). The term and the
extended terms, if any, shall automatically be extended for each extended term
unless Tenant shall notify Landlord of its intention to terminate this lease at
least one hundred eighty days (180) prior to the expiration of the then existing
term, or sixty days after a section 6 event, whichever is earlier. (Notice
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<PAGE>
Date). The monthly rental to be paid by Tenant to Landlord, all in the same
manner as provided in section 2, during each extended term provided for in this
lease shall be the amount derived by multiplying the Monthly Rent paid during
the last month of the then current term by a fraction, the numerator of which
shall be the amount of the Producer's Price Index (Finished Price Index) as
reported for Boston, Massachusetts (PPI) available as of the termination date of
the then current term and the denominator of which is the PPI available as of
the commencement date of the then current term. The quotient thereof, shall be
deemed to be the percentage of increase in the producer's price index.
Notwithstanding the foregoing, the monthly rent as defined in Section 1 shall
never be less than $12.50 square feet.
1.06 Right to Terminate. At any time following the first sixty months of this
lease, the Tenant shall have the right to terminate this lease provided Tenant
notifies Landlord of its intention to terminate in writing at least one hundred
eighty days (180) prior to termination.
1.07 Parking. When completed the premises shall afford the Tenant Seven (7)
parking spaces in a lighted, lined and hot topped parking lot. The Landlord
shall attach to this lease a stamped engineer's plan which shows the parking
lot, access to the parking lot and the location of the parking spaces, which
plan shall be Exhibit B which shall be incorporated herein.
1.08 Building. The Landlord, at its expense shall make improvements to the
premises and it shall construct a building to be called the "Enterprise
Building" ("Building") on the premises. The building shall contain 3960 square
feet of space. The building and other improvements shall be completed in a good
and workmanlike manner and comply with all applicable laws, ordinances, rules
and regulations of governmental authorities and in accordance with the Plans
described in Exhibit C which are attached hereto and incorporated by reference.
The building shall be constructed and fit up with those items as shown on the
Draft Fit Up Proposal which is attached hereto as Exhibit D and in accordance
with the plans and specifications described in Exhibit C which is attached
hereto and incorporated herein by reference. The Landlord has not yet completed
the detailed specifications referred to in Exhibit C. The Landlord agrees that
not later than ten (10) days from the date of this lease, he will furnish to the
Tenant the specifications showing all materials which are to be used in
connection with the construction of the building. If the parties are unable to
agree upon the specifications, then the Tenant at its sole option, may terminate
this lease without cost to it.
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<PAGE>
1.09 Substantial Completion. Landlord shall use earnest efforts to substantially
complete the building by July 1, 1995. (Target date). Substantial completion
shall mean:
(A) completing the construction of the building so that (i)
Tenant can use the premises for its intended purposes without material
interference to Tenant conducting its ordinary business activities and (ii) the
only incomplete items are minor or insubstantial details of construction,
mechanical adjustments, or finishing touches like touch up plastering or
painting, and
(B) securing a temporary or permanent certificate of occupancy
from the local municipality
(C) the decoration, fixtures, and equipment to be installed by
Landlord are installed and in good operating order; and
(D) the Premises are ready for the installation of any
equipment, furniture, fixtures, or decoration that Tenant will install; and
(E) the Premises are broom clean.
(F) Tenant's contingencies have been satisfied
1.10. Confirmation of Commencement. Within thirty (30) days after the
commencement date, the parties shall confirm in writing the Lease's commencement
date and termination date. In the event, the term of this lease shall be
extended as provided by section 1, then the commencement date shall be the first
day of any such extension period and the termination shall be the last day of
such extension period.
Section 2. RENT AND SECURITY
2.01 Rent. The Tenant shall pay to the Landlord rent of Two Hundred Thirty Eight
Thousand Three Hundred Ninety Two Dollars ($238,392) for the term, payable in
monthly installments of Three Thousand Nine Hundred Seventy Three Dollars and
Twenty cents ($3,973.20). The rent shall be paid on the first day of each month
during the term to the Landlord at Post Office Box 724, Leominster,
Massachusetts 01453, or as Landlord may specify in writing to the Tenants. The
square foot rental shall be $12.04 per square foot. If the term does not
commence on the first day or end on the last day of the month, the rent for that
partial month shall be pro-rated.
2.02 Additional Rent. The Tenant shall pay to the Landlord as additional rent
the real estate taxes for the premises beginning on the commencement date. The
real estate taxes shall be paid to the Landlord in or within thirty days after
the tax bill for the same is presented to the Tenant. The Landlord agrees to
furnish the tax bill to the Tenant within five (5) days after the same is
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<PAGE>
received. Such payments shall be made to the municipality by Landlord with proof
of payment being furnished to the Tenant on each occasion that a payment is
made. The real estate taxes for the calendar year 1995 shall be pro-rated from
the date of the commencement of this lease.
2.03 Abatement of Taxes. The Landlord at the request of the Tenant shall
authorize the Tenant to apply for a tax abatement in the name of the Landlord
for any tax year, provided the Tenant shall be responsible for all the expenses
associated with the tax abatement proceeding, including the cost of appraisals
and all legal expenses Copies of all documents filed in connection with the
abatement, shall be sent to the Landlord.
Section 3. AFFIRMATIVE OBLIGATIONS
3.01 Utilities. Tenant shall pay to the proper authority charged with the
collection thereof, all charges for the consumption of electricity, gas,
telephone and other such services separately metered or billed to Tenant for the
Premises All such charges shall be paid as the same from time to time become
due. The Landlord acknowledges that it will bring all utilities which are to
service the building directly to the premises and to the building, and that the
Tenant shall only need to make arrangements to turn on such utilities and
arrangements for billing for any such services. The Tenant shall make its own
arrangements for such utility billing. The Landlord shall not be liable for any
interruption or failure in the supply of such utilities to the premises.
3.02 Compliance With Law. The Landlord warrants that it will obtain all of the
necessary municipal approvals as are required to obtain a building permit from
the City of Leominster Building Department. This paragraph will not affect
Landlord's contingency rights under paragraph 12.01.
3.03 Repairs and Maintenance. The Tenant shall keep the premises in good order;
make repairs and replacement to the premises needed because of Tenant's use of
the premises, or primary negligence; repair and replace special equipment
installed by or at Tenant's request, except to the extent the repairs or
replacement are needed because of Landlord's misuse or primary negligence or
Landlord's replacement obligations in paragraph 3.04 and except for items
covered by Landlord's warranty which shall be the responsibility of the
Landlord. The Tenant shall be responsible for repair and general maintenance of
the roof, foundation, exterior walls, interior walls, all structural components,
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<PAGE>
and all systems such as mechanical, electrical, HVAC, and plumbing. Removal of
snow and ice from the sidewalks bordering the Premises and from the parking
areas of the Premises shall be the Tenants responsibility.
3.04 Landlord Repairs and Replacements. The Landlord shall be responsible to
replace the roof, foundation, exterior walls, interior structural walls, all
structural components, and all systems such as mechanical, electrical, HVAC, and
plumbing. Except for repairs or replacements that Tenant must make under section
3, Landlord shall pay for and make all other repairs and replacements to the
Premises. Landlord shall make such repairs and replacements to maintain the
Building in a condition comparable to other first class office buildings in
Leominster.
3.05 Time for Repairs and Replacement. Repairs or replacements required under
section 3 shall be made within a reasonable time after receiving notice or
having-actual knowledge for the need for repair or replacement.
3.06 Tenant's Obligation on Surrender.
a. Upon the ending date of the initial term or the date of the
last extension term, if any, ends, whichever is later, Tenant hall surrender the
Premises to the Landlord in the same condition that the premises were in at the
beginning, except for ordinary war an tear; damage by the elements, fir, and
other casualty; condemnation; damages arising from any cause not require to be
repaired by the Tenant under section 3.
b. On surrender, Tenant shall remove from the Premises, its
personal property, trade fixtures and repair any damage to the Premises caused
by the removal. Any item not removed hy Tenant as required above, shall be
considered abandoned. Landlord may dispose of abandoned items a Landlord chooses
and bill Tenant for the cost of disposal, minus an revenues received by Landlord
for the disposal. It is understood that all personal property and trade fixture
brought onto the premises by the Tenant even if affixed to the building,
including but not limited to vaults and vault components, security systems, ATM
machines, night deposit systems, drive-up teller components, teller counter and
under-counter equipment furniture, furnishings and the like, but not including
Landlord paid for rugs, shall be considered personal property for which the
Tenant shall have the absolute right to remove same, subject to its obligations
to repair in paragraph 3.06 (a).
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<PAGE>
3.07 Assignment Subleasing. The Tenant shall have the right to assign or sublet
the whole or any part of the premises without Landlord's prior written consent.
Notwithstanding such assignment or subleasing, Tenant shall remain liable to
Landlord for the payment of all rent and for the full performance of the
covenant and conditions of this lease.
3.08 Compliance Law. Tenant's use of the Premises shall, at its own expense,
conform to and comply with all zoning building, environmental, fire, health, and
other code, regulations, ordinance, or laws.
3.09 Landlord Access. The Landlord or agents of Landlord may at reasonable
times, enter to view the Premises. No visit of the Landlord or its agents shall
take place at times other than normal business hours of the Tenant.
3.10 Signs. The Tenant shall be permitted signage on the Premises provided the
same are placed and constructed in accordance with any sign or ongoing ordinance
of the City of Leominster. Tenant shall pay for the cost of erecting and
maintaining any and all such signs Tenant shall remove the same upon the
termination of this lease.
SECTION 4. NEGATIVE OBLIGATIONS
4.01 Overloading and Nuisance. The Tenant shall not injure, overload, deface or
permit to be injured, overloaded of defaced, the Premises and the Tenant shall
not permit, allow or suffer any waste or any unlawful, improper or offensive use
of the Premises or any occupancy thereof that would be injurious to any person,
property, or invalidate or increase the premiums for any insurance on the
building.
4.02. Payment of Landlord's Expenses. The Tenant agrees to pay on demand any
Landlord's cost and expenses, including reasonable attorneys fees, incurred by
Landlord in enforcing any obligation of Tenant under this lease.
SECTION 5 INSURANCE
5.01 Fire Insurance. Tenant shall be required to keep the Building insured
against damage and destruction by fire, earthquake, vandalism, and other perils
and its personal property and trade fixtures with "all risks" insurance in an
amount to cover one hundred (100) percent of the replacement cost of the
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<PAGE>
building and fixtures. Tenant shall also keep any non-Building-standard
improvements made to the premises at Tenant's request insured to the same degree
as Tenant's personal property. Tenant's policy shall include an endorsement hat
the insurance will cover damage to the building caused by the negligence of the
Tenant, its officers, and employees in the amount of the full replacement value
of the Building, as the value may exist from time to time.
5.02 Liability Insurance. Each party shall maintain contractual and
comprehensive general liability insurance, including public liability and
property damage, with a minimum combined single limit of liability of two
million dollars ($2,000,000.00) for personal injuries or deaths of persons
occurring in or about the Building and Premises.
5.03 Waiver of Subrogation. All insurance which is carried by either party with
respect to the premises and building or to furniture, furnishings, fixtures or
equipment therein or alterations or improvements thereto, whether or not
required, if either party so requests and it can be so written, and it does not
result in additional premium, or if the requesting party agrees to pay any
additional premium, shall include provisions which either designate the
requesting party as one of the insured or deny to the insurer acquisition by
subrogation rights of recovery against the requesting party. Each party waives
all rights of recovery against the other for loss or injury against which the
waiving party is protected by insurance containing said provisions, reserving
however, any rights with respect to any excess of loss or injury over the amount
recovered by such insurance. The policies of insurance required under section 5
to be maintained by Tenant shall name as insured parties Landlord and Tenant, as
their respective interests may appear, and they may be carried under blanket
policies maintained by Tenant if such policies comply with the provisions of
section five (5).
5.04 Evidence of Insurance. By the Beginning Date and upon each renewal of its
insurance policies, each party shall give certificates of insurance to the other
party. The certificate shall specify amounts, types of coverage, the waiver of
subrogation, and the insurance criteria listed in the lease. The policies shall
be renewed or replaced and maintained by the party responsible for that policy.
If either party fails to give the required certificate within thirty (30) days
after notice for demand for it, the other party may obtain and pay for that
insurance and receive reimbursement from the party required to have the
insurance.
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<PAGE>
5.05 Indemnification. To indemnify and save Landlord harmless from all claims,
actions, damages, liability, cost or expenses at the Premises arising (other
than injury, loss or damage caused by or result from the fault of Landlord or
its agents unless otherwise determined by a Court or administrative tribunal),
on account of (i) any injury or damage to any person or property on the premises
or otherwise resulting from the Tenant's use and maintenance and occupancy of
the Premiss or any party thereof or the Tenant's keeping or storing of anything
or facility thereon; (ii) any violation of this Lease by Tenant; or (iii) any
act, omission or misconduct of Tenant or its agents, contractors, employees,
licenses, subtenants or invites, and for any hazardous waste placed on the
premises by Tenant and arising out of its use of the premises.
Section 6. LOSS OF PREMISES
6.01 FIRE AND CASUALTY LOSS - REBUILD
If the entire Premises or any substantial part thereof shall be damaged
by fire or other insured casualty, then, subject to the last paragraph of this
Section 6, Landlord shall proceed with diligence, subject to the then applicable
statutes, building codes, zoning ordinances and regulations (but only to the
extent of insurance proceeds made available to Landlord) to rebuild or repair in
accordance with Exhibit C and D or cause to be repaired such damages in
accordance with Exhibit C and D or cause to be repaired such damage. The repair
or restoration will not commence until plans and specifications are reviewed by
Tenant and Landlord. The lease may be terminated 180 days after such damage, by
either party if construction has not commenced.
6.02. Abatement of Rent. If the Premises or any part thereof shall have been
rendered unfit for use and occupation hereunder by reason of such damage the
fixed Rent or a just and proportionate part thereof, according to the nature and
extent to which the Premises shall have been so rendered unfit, shall be
suspended or abated until the premises shall have been restored as nearly a
practicable to the condition in which they were immediately prior to such fire
or other casualty.
6.03 Rebuild Last 24 Months. If the Premises are o damaged by fire or other
casualty (whether or not insured) at: any time during the last twenty-four
months of any Term and the cost to repair such damage is reasonably estimated to
exceed one-half of the total Annual Fixed Rent payable hereunder for he period
from the estimated completion date of repair until the end of the Term, and
Landlord determines not to repair such damage, then and in any event, this Lease
and the term thereof may he terminated at the election of Landlord by a notice
from the Landlord to Tenant within sixty (60) days following such fire or other
casualty. In the event of any termination, this Lease and the Term hereof shall
expire as of such effective termination date as though that were the date
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originally stipulated in Section 1 for the end of the Term and the fixed rent
hall apportioned s of such date. Except for the final twenty-four months of the
final extended term, the Tenant, unless the lease is terminated, may extend the
term if the loss occurs during any term but the final term so as to require
Landlord to rebuild according to this Section 6.
6.05 EMINENT DOMAIN
If after the execution of this Lease and prior to the expiration of
the term of this Lease the whole or any substantial part of the premises shall
be taken under the power of eminent domain, then the term of this Lease shall
cease as of the time when Landlord shall be divested of its title in the demised
premises, and minimum rent shall be apportioned and adjusted as of the time of
termination.
If only a part of the demised premises shall be taken under the
power of eminent domain and if the term of this lease shall not be terminated as
aforesaid, then the term of this lease shall continue in full force and effect
and Landlord shall, within a reasonable time after possession is required for
public use, repair and rebuild what may remain of the demised premises so as to
put the same into condition for use and occupancy by Tenant, and a just
proportion of the minimum rent according to the nature and extent of the injury
to the demised premises shall be suspended or abated until what may remain of
the demised premises shall be put into such condition by Landlord, and
thereafter a just proportion of the minimum rent according to the nature and
extent of the part so taken shall be abated for the balance of the term of this
lease. Landlord shall not be required to spend an amount for such repairing and
rebuilding in excess of the amount received by Landlord as damages for such
taking.
6.06 EMINENT DOMAIN AWARD
Landlord reserves to itself and Tenant assigns to Landlord, all
rights to damages accruing on account of any taking under the power of eminent
domain or by reason of any act of any public or quasi public authority for which
damages are payable. Tenant agrees to execute such instruments of assignment as
may be reasonably required by Landlord in any proceeding for the recovery of
such damages if requested by Landlord, and to turn over to Landlord any damages
that may be recovered in such proceeding. It is agreed and understood, however,
that Landlord does not reserve to itself, and Tenant does not assign to
Landlord, any damages specifically payable for trade fixtures whether or not
movable and installed by Tenant or anybody claiming under Tenant at its own cost
and expense. It is further agreed and understood that Landlord does not reserve
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to itself, and Tenant does not assign to Landlord, any damages separately
awarded to Tenant without diminution of the damages otherwise recoverable by
Landlord. In no event, however, shall Tenant be entitled to, and Tenant assigns
to Landlord, any damages payable for the loss of Tenant's leasehold interest in
the demised premises.
Section 7. DEFAULTS - REMEDIES
7.01 If (a) Tenant shall default in the performance of any such of its monetary
obligations under this Lease, and if such default shall continue for five (5)
days after written notice from Landlord to Tenant (provided that Landlord shall
not be required to give such notice more than twice during the Term, the third
such non-payment constituting an Event of Default without the requirement of
notice) or (b) if within thirty (30) business days after written notice from
Landlord to Tenant specifying another default or defaults, Tenant has not
commenced diligently to correct such default or has not thereafter diligently
pursued such correction to completion, or (c) if any assignment shall be made by
Tenant for the benefit of creditors, or if a petition is filed by or against
Tenant under any provision of the Bankruptcy Code and, in the case of
involuntary petition, such petition is not dismissed with ninety (90) days, or
(d) if the Tenant's leasehold interest shall be taken on execution or by other
process of law, attached or subjected to any other involuntary encumbrances,
then and in any such cases Landlord and its agents and servants may lawfully,
immediately or at any time thereafter, and without further notice or demand, and
without prejudice to any other remedies available to Landlord for arrearages of
rent or otherwise, either (i) enter into and upon the Premises or any part
thereof, in the name of the whole, and repossess the same as of Landlord's
former estate or (ii) mail a notice of termination addressed to Tenant and upon
such entry or mailing this Lease shall terminate. In the event that this Lease
is terminated under any of the foregoing provisions, or otherwise for breach of
Tenant's obligations hereunder, then at Landlord's option, Tenant covenants to
pay forthwith to Landlord as compensation the total rent and additional rent
reserved for the residue of the Term, and pay on demand all Landlord's costs and
expenses, including reasonable attorney's fees, incurred by Landlord in
enforcing any obligation of Tenant under this Lease, or in connection with any
request by Tenant for Landlord's consent or approval under this Lease.
In calculating the amounts to be paid by Tenant under the foregoing covenant,
Tenant shall be credited with any amount actually paid to Landlord as
compensation as herein before provided and also with any additional rent
actually obtained by Landlord by reletting the Premises, after deducting the
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expenses of collecting the same. And Tenant further covenants, as an alternative
obligation, at Landlord's election, after any such termination or entry, to pay
punctually to Landlord all the sums and perform all the obligations which Tenant
covenants in this Lease to pay and to perform in the same manner and to the same
extent and at the same times as if this Lease had not been terminated.
Nothing herein contained shall, however, limit or prejudice the right of
Landlord to obtain in proceedings for bankruptcy or insolvency or reorganization
or arrangement with creditors as liquidated damages by reason of such
determination an amount equal to the maximum allowed by any statute or rule of
effect at the time when, and governing the proceedings in which, such damages
are to be proved, whether or not such amount be greater than, equal to, or less
than the amounts referred to above.
7.02. Landlord's Defaults. If the Landlord fails to pay any liens or
encumbrances affecting the property and to which this lease may be subordinate
when any of the same may be due or in any other respects fails to perform any
covenant or agreement in this lease contained on the part of the Landlord, to be
performed, then and in such event, after the continuance of any such failure or
default for ninety (90) days after notice has been given by the Tenant to the
Landlord, Tenant may pay said lien or encumbrance and cure such defaults.
Tenant, after such ninety (90) day period, may make all necessary payments in
connection therein, including but not limited to the payment of any reasonable
attorneys fees, costs and charges incurred, in connection with any legal action
which may have been brought. If all such indebtedness of Landlord is not fully
paid within thirty (30) days after Tenant has paid the same and Landlord has
been given notice same has been paid, Tenant may elect (1) to deduct such amount
from rent subsequently becoming due hereunder, or (2) extend this lease on the
same covenants and conditions as herein provided until such indebtedness is
fully paid by application to rents. Encumbrance shall include mortgage payments
where an uncured default exists.
7.03. Tenant Defaults. If Tenant shall fail to make or perform any payment or
act required by this lease, then Landlord may, make such payment or perform such
act for the account of the Tenant. All amounts so paid by Landlord and all
incidental costs and expenses including attorneys fees and expenses incurred in
connection with such payments or performance, together with interest thereon at
the maximum legal rate, or if no such rate is established at the rate of
eighteen (18) percent per annum from the date of the making of such payment or
of the incurring of such costs and expenses, shall be paid by Tenant to Landlord
on demand. This is an additional remedy of Landlord.
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SECTION 8. NON DISTURBANCE
8.01 SUBORDINATION AND NON-DISTURBANCE. This Lease and all rights of the Tenant
hereunder are and shall be subject and subordinate to the lien of any and all
mortgages which may now or hereafter affect the property or any part thereof and
to all renewals, modifications, consolidations, replacements and extensions
thereof, provided that any such mortgage placed upon the property shall provide
that so long as there shall be outstanding no continuing event of default in any
of the terms, conditions, covenants or agreements of this lease on the part of
the Tenant to be performed, the Leasehold estate of the Tenant created by this
Lease and Tenant's peaceful and quiet possession of the property shall be
undisturbed by any foreclosure of any such mortgage and the mortgagee shall
recognize this lease and all its terms and conditions including but not limited
to any rights to extend this lease and any and all rights of first refusal and
options to purchase which are set forth in this lease. The mortgagee shall
consent to the use of all insurance proceeds for the restoration of the building
in the event of fire or other casualty as herein set forth.
8.02 Estoppel Certificate. Either party shall from time to time, within ten (10)
business days after receiving request by the other party, execute and deliver to
the Asking Party a written statement in recordable form. This written statement,
which may be relied upon by the Asking Party and any third party with whom the
Asking Party is dealing shall certify:
(i) the accuracy of the lease document;
(ii) the Beginning and ending Date of the Lease;
(iii) that the Lease is unmodified and in full effect or in
full effect as modified stating the date and nature of the modification;
(iv) whether to the Answering Party's knowledge the Asking
Party is in default or whether the Answering Party has any claims or demands
against the Asking Party, and if so, specifying the Default, claim, or demand;
and
(v) to other correct and reasonably ascertainable facts that
are covered by the Lease terms.
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SECTION 9 LANDLORD RIGHTS
9.01. Landlord's additional Remedies.
Landlord in addition to the remedies given in this Lease or under the
law, may do any one or more of the following if Tenant commits a Default under
this lease and such default is not cured.
a).No Surrender. Landlord's exercise of any it remedies or its receipt
of Tenant's keys shall not be considered an acceptance or surrender of the
Premises by Tenant. A surrender must be agreed to in a writing signed by both
parties.
b).Tenant Liable For Expenses. Tenant shall also be liable for that
part of the following sum paid by Landlord.
(i) reasonable broker's fees incurred by Landlord for reletting
the Premises.
(ii) the cost of removing and storing Tenant's property;
(iii) the cost of any repairs, alterations, and remodeling
necessary to put the Premises in a condition reasonably acceptable to a new
Tenant; and
(iv) other necessary and reasonable expenses incurred by
Landlord in enforcing its remedies, including attorney's fees.
SECTION 10. OPTIONS AND FIRST REFUSAL
10.01. OPTION TO PURCHASE. Provided Tenant is not in default, of this lease, the
Tenant shall have the option to purchase the premises on the last day of the
basic term or at any time during any extended term at the price of $ 550,000.00,
as adjusted for increases in the producer's price index (finished price index)
as defined in section 1. The Tenant shall give the Landlord sixty (60) days
notice of its intention to purchase the property. On the date of the purchase
the Landlord shall convey the premises in consideration of the payment of the
purchase price, by quitclaim deed, conveying good clear record and marketable
title to the premises free of all liens and encumbrances except this lease and
except for easements and restrictions of record which are listed on Exhibit E
attached hereto. The Landlord may use the purchase price to pay off mortgage
liens and like encumbrances. If Landlord shall be unable to give title, the
Landlord shall use reasonable efforts to remove such defects in title. All
remaining conditions of sale shall be as found in the current Greater Boston
Real Estate Board form purchase and sale agreement as reasonably adjusted for
this transaction.
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10.02 Right of First Refusal - Purchase. If at any time during any term of this
lease, Landlord shall receive and be willing to accept the bone fide offer from
a third party to purchase the property, or if Landlord shall offer to sell the
property to any third party, Landlord shall, if there is no event of default,
promptly transmit to Tenant its offer to sell the property to Tenant upon same
terms and conditions as those offered by or to the third party, together with a
true copy of such original offer. If Tenant shall not accept such offer within
sixty (60) days after it is made, Landlord may, after the expiration of such
sixty (60) day period, sell such interest to a third party upon terms and
conditions as those offered to the Tenant. If Tenant accepts such offer by
notice to Landlord within the time permitted, the offer and acceptance shall
constitute a contract for the sale by Landlord and the purchase by Tenant of the
property at a closing to be held within thirty (30) days following the receipt
by Landlord by Tenants notice of acceptance. On the date of such purchase, the
Landlord shall convey the premises in consideration of the payment of the
purchase price. by quitclaim deed, conveying good clear record and marketable
title to the premises free of all liens and encumbrances except this lease and
except for easements and restrictions of record which are listed on Exhibit E
attached hereto. The Landlord may use the purchase price to pay off mortgage
liens and like encumbrances. If Landlord shall be unable to give title, the
Landlord shall use reasonable efforts to remove such defects in title. All
remaining conditions of sale shall be as found in the current Greater Boston
Real Estate Board form purchase and sale agreement as reasonably adjusted for
this transaction.
10.03. Right of First Refusal - Adjacent Property - Lease. a.) If at any time
during any term of this lease, and upon the termination of the current lease or
leases with tenants of the property owned by Landlord and located at 16 Central
Street in Leominster, the Landlord shall receive and be willing to accept the
bona fide offer from a third party to lease the property owned and/or controlled
by it and located at 16 Central Street, or if Landlord shall offer to lease the
property to any third party, Landlord shall, if there is no event of default,
promptly transmit to Tenant its offer to lease the property to Tenant upon terms
and conditions as those offered by he third party, together with a true copy of
such original offer. If Tenant shall not accept such offer within sixty (60)
days after it is made, Landlord may, after the expiration such sixty (60) day
period, lease such interest to a third party upon terms and conditions as those
offered to the Tenant.
b.) If Tenant accepts such offer by notice to Landlord within
the time permitted, the offer and acceptance shall constitute a contract for
lease by Landlord and by Tenant of the property to be executed within thirty
(30) days following the receipt by Landlord by Tenants notice of acceptance. On
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the date of such leasing, Landlord shall lease the premises free of all tenants
and occupants. The Landlord agrees that it shall not lease all or any portion of
the 16 Central Street building to a third person for a period to exceed three
years. The Landlord shall have a continuing obligation to offer the same for
lease to the Tenant throughout any term of this lease before it enters into a
lease for same with any other person.
10.04. Right of First Refusal-Adjacent Property - Sale. a) If Landlord shall
receive and be willing to accept the bona fide offer from a third party to
purchase the property owned and/or controlled by it and located at 16 Central
Street, or if Landlord shall offer to sell the property to any third party,
Landlord shall, if there is no event of default, promptly transmit to Tenant its
offer to sell the property to Tenant upon terms and conditions exactly similar
to those offered by or to the third party, together with a true copy of such
original offer. If Tenant shall not accept such offer within sixty (60) days
after the expiration of such sixty (60) day period, sell such interest to a
third party upon terms and conditions as those offered to the Tenant.
b) If Tenant accepts such offer by notice to Landlord within the
time permitted, the offer and acceptance shall constitute a contract for the
sale by Landlord and the purchase by Tenant of the property at a closing to be
held within thirty (30) days following the receipt by Landlord by Tenants notice
of acceptance. On the date of such purchase, the Landlord shall convey the
premises in consideration of the payment of the purchase price. by quitclaim
deed, conveying good clear record and marketable title to the premises free of
all liens and encumbrances except this lease and except for easements and
restrictions of record which are listed on Exhibit E attached hereto. The
Landlord may use the purchase price to pay off mortgage liens and like
encumbrances. If Landlord shall be unable to give title, the Landlord shall use
reasonable efforts to remove such defects in title. All remaining conditions of
sale shall be as found in the current Greater Boston Real Estate Board form
purchase and sale agreement as reasonably adjusted for this transaction.
10.05 Additional Space. The Landlord agrees to furnish approximately 1000 square
feet of space to the Tenant in the basement of the building owned by the
Landlord and located at 16 Central Street in Leominster. The Tenant shall have
exclusive access to such storage area and shall use such space for the storage
of its supplies and other like materials. The Landlord agrees that the Tenant,
its customers and employees shall have the right in common with others to park
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vehicle in spaces provided for the Manning Avenue building which is owned by the
Landlord.
SECTION 11 MISCELLANEOUS
11.01 Notices. Unless a Lease provision expressly authorizes verbal notice, all
notices under this Lease shall be in writing and sent by registered or certified
mail, postage prepaid, or by federal express or other such carrier as follows:
To Tenant:
at 2-6 Central Street, Leominster, Massachusetts, 01453
and
222 Merrimack Street, Lowell, Massachusetts 01852
To Landlord: at Post Office Box 724, Leominster
Massachusetts 01453
Either party may change the addresses by giving notice as provided
above.
11.02 Broker Warranty. Each party warrants that there has been no real estate
broker involved in connection with this lease. The party who breaches this
warranty shall defend, hold harmless and indemnify the non-breaching party from
any claims or liability arising from the breach.
11.03 Partial Invalidity. If any Lease provision is invalid or unenforceable to
any extent, then that provision shall be excised from the agreement and the
remainder of this Lease shall continue in effect and be enforceable to the
fullest extent permitted by law.
11.04 Waiver. The failure of either party to exercise any of its rights is not a
waiver of those rights. A party waives only those rights specified in writing
signed by the party waiving its rights.
11.06 Binding on Successors. This Lease shall bind the parties, their
successors, representatives, and permitted assigns.
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11.07 Governing Law. This lease shall be governed by the laws of the
Commonwealth of Massachusetts .
11.08 Recording. As soon as practical after the effective date of this lease,
the parties shall execute a Notice of Lease in a form suitable for recording in
the Registry of Deeds where the property lies.
11.09 Survival of Remedies. The parties' remedies shall survive the ending of
this lease when the ending is caused by the Default of the other party.
11.10 Authority of Parties. Each party warrants that it is authorized to enter
into the Lease, that the person signing on its behalf is duly authorized to
execute the Lease, that no other signatures are necessary.
11.11 Entire Agreement. This Lease contains the entire agreement between the
parties about the Premises. This Lease shall be modified only by a writing
signed by both parties.
11.12 QUIET ENJOYMENT
Landlord agrees that upon Tenant's paying the rent and performing and
observing the agreements, conditions and other provisions on its part to be
performed and observed, Tenant shall and may peaceably and quietly have, hold
and enjoy the demised premises during the term of this Lease without any manner
of hindrance or molestation from Landlord or anyone claiming under Landlord,
subject, however, to the terms of this Lease and the encumbrances listed in
Exhibit E.
SECTION 12. CONTINGENCIES
12.01 Landlord's Contingency. The landlord's obligations under this lease shall
be contingent and conditioned upon its ability to obtain all necessary municipal
approvals as are required to obtain a building permit from the City of
Leominster building department. If such building permit is not obtained in or
within 30 days of the date of this lease, then the Tenant at its option may
cancel this lease. The Landlord agrees to use good faith efforts to obtain such
building permit.
12.02 Tenant's Contingency. The Tenant's obligations under this lease shall be
contingent upon its obtaining all approvals from the Commissioner of Banks of
the Commonwealth of Massachusetts and the Federal Deposit Insurance Corporation
so as to enable the Tenant to operate a commercial bank and trust company in and
upon the premises. The Tenant agrees to make all the necessary applications as
soon as this lease is executed and to proceed with such application in a good
faith manner. If such approvals are not obtained by June 15, 1995, Landlord at
its option may terminate this lease. If there is a termination hereunder, Tenant
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at its sole cost and expense shall remove any items of personal property from
the premises and shall repair and restore the premises to their previous
condition prior to Tenant fit up, in a timely and expeditious manner.
12.03 Hazardous Waste. The Landlord agrees to forthwith employ a sanitary
engineer to undertake a historic and baseline hazardous waste study (STUDY) of
the property. Landlord agrees to furnish a copy of the report to the Tenant in
or within 90 days from the date of this lease. If the study discloses the
existence of hazardous waste which could pose a substantial potential health
hazard to employees and customers of Tenant, the Landlord shall perform a
comprehensive hazardous waste study.
If the report indicates that the condition of the property is such that
its use by the Tenant will constitute a health hazard to the Tenant, its
customers and employees, then the Tenant shall have the option to terminate this
lease unless Landlord and Tenant are able to reach an accommodation to cure or
diminish the hazardous waste condition. The foregoing notwithstanding, Landlord
agrees to indemnify and hold harmless the Tenant of and from any damages,
including but not limited to reimbursement for mandated clean-up, costs of
litigation and the like, arising from any hazardous waste which may exist on the
premises, either at the time of the commencement date of the lease or
subsequently, unless such release or threat of release is due to or caused by
Tenant activities or persons or entities under its control.
LANDLORD: North Central Investment
Limited Partnership
By
Liberty Rental Corp.
Its General Partner
Witness to Robert Ansin By /s/ Robert D. Ansin
/s/ Robert D. Ansin, Vice President
TENANT: Enterprise Bank and Trust Company
Witness to Robert Gilman By /s/ Robert R. Gilman
/s/ Robert R. Gilman
Its Senior Vice-President
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EXHIBIT A
LEGAL DESCRIPTION FOR
8 CENTRAL STREET, LEOMINSTER, MA
A certain tract of land with Baldwin thereon, situated on the easterly
side Central Street, in said Leominster, bounded and described as follow:
BEGINNING at the northwesterly corner thereof at the junction of
Manning Avenue and Central Street;
THENCE by Manning Avenue North 79o 4' East one hundred forty and 67/100
(140.67) feet land formerly of one Wilder;
THENCE by the Wilder land South 0o 17' Eight eighty-four and 92/100
(84.92) feet to a stone bound at the Hills land;
THENCE by the Hills land South 86o 53' West one hundred thirty-five and
5/10 (135.5) feet to Central Street;
THENCE by Central Street North 2o 59' West sixty-five and 72/100
(65.72) feet to the place of beginning.
Excepting therefrom that portion taken for the layout of Central Street
by the City of Leominster by instrument dated December 24, 1928 and recorded
January 7, 1929 in the Worcester Northern District Registry of Deeds in Book
462, Page 420. Said parcel containing 698 square feet and being more
particularly shown on the plan recorded in the Worcester Northern District
Registry of Deeds in Plan Book 46, Page 23.
Excepting therefrom that portion taken by the City of Leominster for
off street parking area by instrument dated December 13, 1954 and recorded
December 20, 1954 in the Worcester Northern District Registry of Deeds in Book
752, Page 360. Said parcel containing 3320 square feet and being more
particularly shown as Lot #2 on plan recorded in the Worcester Northern District
Registry of Deeds in Plan Book 98, Page 17.
<PAGE>
Exhibit D
Draft Fit-Up Proposal
Included:
1. Complete interior fit-up to include:
a) Walls: Drywall with two coats of paint;
Interior walls to be insulated for
sound dampening;
b) Ceilings: Dropped acoustical & drywall per
plan;
c) Glass Partitions: Tempered glass to detail;
d) Offices: Per plan;
e) Doors: Solid flush doors;
f) Countertops: Prefabricated laminates (Formica or
equal)
g) Standard door locks;
h) Entry vestibule;
i) Trim: Colonial, (oak or equivalent);
j) Restrooms: To code requirements;
k) Carpet/Flooring In the event Tenant elects to put
in its own carpeting, Landlord will
reimburse Tenant at $24.00 per
square yard;
l) Lighting; Fixture allowance of $4,000.00
m) Electrical service: 400 amp. service to code
requirements;
n) Plumbing: To code requirements;
o) Heating/HVAC: Roof mounted, gas fired;
2. Complete exterior fit-up to include:
a) Foundation: To code requirements;
b) Floor: Slab on grade;
c) Walls: 12" Concrete;
d) Wall Finish: Brick veneer;
e) Roof: Architectural - 25 year grade/
Single membrane flat rubber roof;
f) Windows: Marvin True Divided Light;
g) All exterior doors;
h) Standard dead bold locks;
i) Site reconfiguration per Bill Hannigan's engineering
plan;
j) Landscaping per plan.
Not Included:
1. Any and all bank-specific items including:
<PAGE>
a) Vault & vault components;
b) Security system(s);
c) ATM(s);
d) Night deposit system(s);
e) Drive-up teller components;
f) Teller counters/under counters
g) Check writer;
h) Furnishings;
i) Signage.
<PAGE>
EXHIBIT E
EXCEPTION SHEET
Rubin's Building
8 Central Street, Leominster, MA
1. Subject to right-of-way as recited in deed from Adolf Ceccarini and
Della M. Ceccarini to Frederick C. England and Samuel; Foster, Jr. dated April
15, 1925 and recorded April 18, 1925 in the Worcester northern District Registry
of Deeds in Book 417, Page 335. Said Easement also being described in a deed
from William Wilder to Savilon E. Wilder dated January 1, 1851 and recorded
January 18, 1851 in the Worcester Northern District Registry of Deeds in Book
469, Page 605 and as recited in deed from William Wilder to Savilon E. Wilder
dated April 28, 1853 and recorded May 15, 1853 in the Worcester Northern
District Registry of Deeds in Book 508, Page 411. In-so-far as same may affect
locus.
2. Subject to Easement granted by Frederick C. England to the City of
Leominster dated June 17, 1929 and recorded June 20, 1929 in the Worcester
Northern District Registry of Deeds in Book 470, Page 103. Said Easement being a
right-of-way for street purposes and is the same premises described in taking by
the City of Leominster dated December 24, 1928 and recorded January 7, 1929 in
the Worcester Northern District Registry of Deeds in Book 462, Page 420.
<PAGE>
EXHIBIT F
EXCEPTION SHEET
16 Central Street, Leominster, MA
l. Subject to right to pass and repass over an eight foot wide strip
adjoining the entire length of the southerly side of the premises as described
in a deed to Peter E. Bovenzi, Trustee of Manning Avenue Realty Trust dated
September 28, 1988 and recorded with the Worcester Northern District Registry of
Deeds in Book 1737, Page 199.
2. Subject to a right of way adjoining the entire length of the
premises and the right to maintain drains a described in a deed from Stamo
Angelopoulos to James G. Gelep, et al, recorded with the Worcester Northern
District Registry of Deeds in Book 535, Page 558.
3. Subject to taking by the City of Leominster for highway purposes as
described in instrument recorded with the Worcester Northern District Registry
of Deeds in Book 462, Page 420.
EXHIBIT 10.6
AGREEMENT entered into as of the 13 day of December 1995 by and between
Enterprise Bank and Trust Company, a Massachusetts corporation (hereinafter
referred to as the "Corporation") and George L. Duncan of Lowell, Massachusetts,
(hereinafter referred to as "Duncan").
W I T N E S S E T H
WHEREAS, Duncan is a highly regarded expert in the field of bank
management;
WHEREAS, the Corporation acknowledges that Duncan's abilities and services
are unique and essential to the future prospects of the Corporation;
WHEREAS, in light of the foregoing, the Corporation desires to employ
Duncan as its Chief Executive Officer and Duncan desires to accept such
employment
NOW, THEREFORE, the parties hereto, each in consideration of the premises
and of the joinder of the other herein, hereby agree as follows:
1. The Corporation hereby employs Duncan and Duncan hereby agrees to be
employed by the Corporation upon the terms and conditions hereinafter set forth.
2. This agreement shall commence on January 1, 1996 and shall be extended
from year to year according to the provisions hereinafter set forth. The minimum
term and any extended term(s) of this agreement shall at all times be three (3)
years unless
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otherwise specifically set forth. This agreement shall be reviewed annually by
the Board of Directors of the Corporation or its designated committee.
3. Duncan agrees to serve during the term or terms of this agreement as the
Chief Executive Officer of the Corporation for so long as he may be elected by
the Board of Directors of the Corporation and he agrees to devote his full time
and best efforts to the performance of his designated duties to the furtherance
of the business of the Corporation.
4. All services which Duncan shall perform for the Corporation and its
subsidiaries while this Agreement is in effect shall be deemed to be services
covered by this Agreement and by the compensation herein provided for, and
Duncan shall not be entitled to any additional compensation thereof for such
additional duties.
5. During the term or any extensions of the term of this agreement,nothing
herein shall preclude Duncan from remaining involved in any business, including
any limited or general partnership, in which he currently participates, or any
future like venture in which he may participate, as a passive investor. Any
future business involvement such as a general partnership for real estate
purposes or other like active investment must be first approved by the Board of
Directors. The Board shall act within a reasonable time regarding a request for
approval of an
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investment when such request is made of it by Duncan.
6. While Duncan shall be employed hereunder, he shall be paid a minimum
base salary at the rate of One Hundred Fifty-Six Thousand Two Hundred Fifty
Dollars($156,250) per annum,to be paid in equal weekly installments, which shall
be subject to periodic upward adjustments as determined by the Board of
Directors of the Corporation. (hereafter referred to as "Base Salary").
7. In addition to his base salary, Duncan shall be entitled (I) to
participate in the Corporation's Benefit Plans, Stock Option Plans, 401k Plans,
Employee Stock Ownership Plan, Bonus Plans, and any other incentive plans of the
Corporation for the benefit of its officers or employees from time to time in
effect (subject to the terms of such plans and subject to the applicable votes
of the Board of Directors in effect from time to time), and (ii) to receive all
such other fringe benefits and perquisites as the Corporation shall from time to
time make available to its officers. For the purposes of this agreement any
payments made to or payable to Duncan under paragraph 6 and paragraph 7 of this
agreement shall at all times be hereafter defined as his "Annual Earnings."
In addition, in the event of the death of Duncan while this agreement is in
effect, the Corporation agrees that Carol Duncan the wife of Duncan and his
children (the "beneficiaries") shall
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remain covered by the health plan of the Corporation and the premium payment
shall be made by the Corporation. The obligation of the Corporation shall
terminate for the children upon their emancipation; and for the wife when she
shall remarry or die, whichever shall first occur.
8. a. During the term or any extended term of this Agreement, if Duncan is
unable to perform the services required of him hereunder because of sickness or
other disability (hereafter called the "Disability Period"), the Corporation may
elect to be relieved of the obligation to pay Duncan his annual earnings and,
upon notice to Duncan, to pay Duncan during the period of his disability at the
rate equal to seventy-five (75%) percent of the highest annual earnings paid him
during the term of this Agreement which occurred prior to his disability less
any amounts payable to him under any group disability plan.
b. The existence of a disability shall not entitle the Corporation to
terminate this agreement for cause as that term is defined in paragraph 16 of
this agreement, nor to terminate his status as an employee of the Corporation.
If Duncan is replaced as Chief Executive Officer of the Corporation during the
disability period according to paragraph 10a of this agreement, then the
obligations of the parties under paragraph 8a of this Agreement shall control
and not those under said
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paragraph 10a.
c. For purposes of this Agreement, Duncan shall be deemed to be
disabled if he shall, in the judgment of the Board of Directors, be unable to
perform his duties hereunder, and he shall be deemed to have recovered from any
such disability if he shall, in the judgment of the Board of Directors, be able
to perform such duties. Any such determination(s) by the Board of Directors
shall be binding upon Duncan. To assist the Board in making such a decision
Duncan agrees that he will submit to a physical examination, at any reasonable
time or times, by any qualified physician designated by the Board.
9. If, during the term or any extended term of this Agreement, there is a
"Business Combination" as defined in the Articles of Organization as from time
to time amended, then, beginning on the effective date of the business
combination, Duncan shall have the option, exercisable by him at any time during
the term or any extended term of this Agreement, upon 60 days advance written
notice to the Corporation, to terminate this Agreement, in which event the
Corporation shall pay Duncan within 60 days following the receipt by it of the
said notice of termination a lump sum of money equal to three (3) times Duncan's
previous highest annual earnings. In addition, Duncan shall be entitled to
receive any additional benefits referred to in paragraph 7 of this agreement
which are not included in annual
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earnings but which are due him under the terms and conditions of the provisions
of any Corporate plan or plans. Duncan, if he exercises the option to terminate
as set forth in this paragraph 9, notwithstanding the obligation to compensate
him under this paragraph, shall be relieved of any restrictions with respect to
competition as set forth in paragraph 12 and paragraph 13 of this agreement.
10. a. If, during the term or any extended term of this Agreement and prior
to any change in ownership, Duncan shall cease to be elected by the Board of
Directors to serve the Corporation as the Chief Executive Officer, other than
for disability under the provisions of paragraph 8, then, beginning on the date
on which Duncan ceased to be so elected, Duncan shall have the options,
exercisable by him at any time during the remainder of the term or any extended
term of this Agreement, upon 60 days advance written notice to the Corporation
to (I) remain as a full-time employee of the Corporation under the terms of this
Agreement; or (ii) terminate this Agreement; or (iii) serve the Corporation as a
consultant for the remainder of the term, or any extended term in lieu of
serving in another capacity.
b. In the event Duncan elects to terminate this Agreement in accordance
with paragraph 10 (a)(ii), Duncan shall receive salary payments from the
Corporation for two (2) years from the
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date the Corporation is notified of his election to terminate. The salary
payments shall equal the highest annual earnings paid to Duncan during any year
of the term or extended term of this Agreement. These salary payments shall be
made in equal weekly installments. In addition, Duncan shall be entitled to
receive all other benefits referred to in paragraph 7 of this Agreement. Duncan
agrees that during the period he is receiving payments under this paragraph 10
b, and in consideration of the compensation to be paid to him hereunder, that he
will not compete, directly or indirectly, with the business of the Corporation
(including any parent or subsidiary entity thereof) or of that of its successors
or assigns. The phrase "compete, directly or indirectly, with the business of
the Corporation or of that of its successors or assigns", as used herein, shall
be deemed to include (without thereby limiting the generality of the same)
engaging or having any interest directly or indirectly as an employee through
the rendering of services or otherwise either alone or in association with
others in the operation of any financial institution with a branch office in
Lowell or any town contiguous to Lowell, which shall include Billerica,
Chelmsford, Dracut, Tewksbury, and Tyngsboro and engaging or having any interest
directly or indirectly as an employee through the rendering of services or
otherwise either alone or in association with others in the operation of any
financial
7
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institution in any City or Town in which Enterprise Bank and Trust Company has a
branch. Duncan further agrees, during the payment period of this paragraph 10b,
not to own an interest exceeding one percent (1%), directly or indirectly as an
owner, partner through stock ownership, investment of capital, lending of money
or property, in any financial institution with a branch in Lowell or any town
contiguous to Lowell, which shall include Billerica, Chelmsford, Dracut,
Tewksbury, and Tyngsboro or in any City or Town in which Enterprise Bank and
Trust Company has a branch. The restrictions as to non competition in this
paragraph 10b shall be in lieu of any restrictions set forth in paragraph 12 and
paragraph 13.
c. In the event Duncan so elects to serve as a consultant, he shall render
such services of an advisory or consultative nature as the Corporation may
require of him from time to time and to assist the Corporation in its relations
with its employees and its customers in order that the Corporation may have the
benefit of his experience and knowledge of its business, his reputation and
contacts in the industry, and his general business experience. During such time
(hereinafter referred to as the "Consultation Period"), Duncan shall devote
approximately half his time to the business and affairs of the Corporation, and
shall receive as compensation therefor a salary at the rate which shall be equal
to fifty (50%) of the highest annual earnings paid
8
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to him during the period in which he served the Corporation in the capacity of
Chief Executive Officer. During the Consultation Period, Duncan shall be deemed
to be an employee of the Corporation and, as such, Duncan shall participate in
the plans and receive the fringe benefits and perquisites referred to in
Paragraph 7 above subject to the provisions of said paragraph. Upon the
termination of the consultation period, Duncan shall be restricted in his
activities according to paragraph 12, and paragraph 13. During each year of the
non-compete period following the termination of the consultation period, Duncan
shall receive salary payments equal to fifty (50%) percent of the highest annual
earnings paid to him during any year of the term or extended term of this
Agreement, notwithstanding the salary payment provisions set forth in paragraph
12.
If the provisions of this paragraph become operable there shall be no
obligation on the part of Duncan to serve or to continue to serve as a member of
the Board of Directors of the Corporation.
11. Duncan agrees that he will not, without the express prior written
consent of the Corporation, whether during the term or any extended term of this
Agreement or thereafter, divulge, communicate or utilize for the benefit of any
other party or person any marketing research, account information or any other
9
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information pertaining to the business or affairs of the Corporation or of any
of its clients, customers, consultants or collaborators, except to such extent
as may be necessary in the ordinary course of performing his duties as to the
Corporation or to comply with legal process. The foregoing notwithstanding,
there is nothing in this Agreement which prohibits Duncan from communicating
directly with all Federal and/or State regulatory authorities concerning the
activities of the Corporation.
12. Duncan agrees not to compete with the Corporation during a two year
non-compete period as defined in this paragraph 12 and in paragraph 13. During
each year of the two-year non-compete period, as further detailed below, Duncan
shall receive salary payments at least equal to seventy percent of the highest
annual earnings paid to him during any year of the term of this Agreement or any
year of any extended term of this agreement. If Duncan is employed during the
two-year non-compete period, by another employer outside of the non-compete
area, or by an employer approved by the Corporation within the non-compete area,
Duncan shall receive salary payments from the Corporation equal to one-hundred
percent of the highest annual earnings paid to him during the term of this
Agreement less any renumeration paid by his new employer. For a period of two
(2) years from the date this agreement is terminated,(The "Non Compete Period")
and subject to the provisions of this agreement which specifically
10
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set forth a contrary intent, Duncan further agrees, in consideration of the
compensation to be paid to him hereunder that, during any non compete period he
will not compete, directly or indirectly, with the business of the Corporation
or of that of its successors or assigns. The phrase "compete, directly or
indirectly, with the business of the Corporation or of that of its successors or
assigns", as used herein, shall be deemed to include (without thereby limiting
the generality of the same) engaging or having any interest, directly or
indirectly, as an employee, through the rendering of services, or otherwise,
either alone or in association with others, in the operation of any financial
institution engaging or having any interest directly or indirectly as an
employee through the rendering of services or otherwise either alone or in
association with others in the operation of any financial institution with a
branch office in Lowell or any town contiguous to Lowell, which shall include
Billerica, Chelmsford, Dracut, Tewksbury, and Tyngsboro and engaging or having
any interest directly or indirectly as an employee through the rendering of
services or otherwise either alone or in association with others in the
operation of any financial institution in any City or Town in which Enterprise
Bank and Trust Company has a branch.
13. During the term or any extended term of this Agreement and during the
non compete period defined in paragraph 12, Duncan
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agrees not to own an interest exceeding one percent (1%), directly or indirectly
as an owner, partner through stock ownership, investment of capital, lending of
money or property, in any financial institution with a branch office in Lowell
or any town contiguous to Lowell, which shall include Billerica, Chelmsford,
Dracut, Tewksbury, and Tyngsboro or in any City or Town in which Enterprise Bank
and Trust Company has a branch.
14. The parties hereto agree that the services of Duncan are of a personal,
special, unique and extraordinary nature and cannot be replaced by the
Corporation and that the violation by Duncan of any of his covenants hereunder
will cause the Corporation irreparable harm which could not reasonably or
adequately be compensated in damages in an action at law, and that the covenants
of Duncan hereunder shall therefore be enforceable both at law and in equity, by
injunction and otherwise. The remedies of the Corporation hereunder, and at law
and in equity, shall be cumulative and not alternative, and shall not be
exhausted by any one or more uses thereof.
15. Upon the expiration of this agreement or other termination in
accordance with the provisions of this Agreement, all obligations of the
Corporation to Duncan hereunder shall forthwith terminate, except for any
obligation to pay any sum or sums of money to Duncan which may have accrued and
are due and payable under this contract and except for any obligation to pay
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<PAGE>
any sum or sums of money to Duncan which may have accrued and are due and
payable under any corporate benefit plan or plans but the obligations of Duncan
shall not be so terminated except and unless set forth specifically in this
agreement.
16. Termination for Cause. Duncan's employment hereunder may be terminated
for cause without further liability on the part of the Corporation by written
notice to Duncan setting forth in reasonable detail the nature of such cause.
The following shall constitute "cause" for such termination: (i) a willful
breach of this contract; or (ii) dishonesty or fraud committed by Duncan with
respect to the Corporation or any subsidiary or affiliate thereof; or (iii)
conviction of a felony by Duncan; or (iv) an order from a regulatory body
directing the corporation to terminate Duncan for cause. For the purpose of this
Section, any action taken by the Corporation shall first require a two-thirds
vote of all the members of the Board of Directors. In the event Duncan shall be
terminated for cause under this paragraph of the agreement, the Corporation
shall be relieved of its obligations to make any payments to Duncan under
paragraph 12 of this agreement and Duncan shall be relieved of any obligations
not to compete under said paragraph 12 and paragraph 13.
17. Any notice hereunder shall be effective when mailed by registered or
certified mail, postage and other charges prepaid, in the case of Duncan,
addressed to him at 710 Andover Street,
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Lowell, Massachusetts 01852, and in the case of the Corporation, addressed to it
c/o Vice Chairman at 222 Merrimack Street, Lowell, Massachusetts 01852 or at
such other address as either of the parties shall have last designated by notice
given in like manner to the other of them.
18. No provision of this Agreement shall be modified or amended except by
an instrument in writing duly executed by the parties hereto, and no custom,
act, payment, favor or indulgence shall grant any additional right to Duncan or
be deemed a waiver by the Corporation of any of Duncan's obligations hereunder
or release Duncan therefrom or impose any additional obligations upon the
Corporation, nor shall any assent, express or implied, by the Corporation to,
waiver by the Corporation of, any breach by Duncan of any term or provision
hereof be deemed to be an assent or waiver by the Corporation to or of any
succeeding breach of the same or any other term or provision. Every term and
provision of this Agreement shall be deemed to be of the essence hereof and
every breach thereof material. This Agreement is personal to and shall not be
assignable by Duncan, but its economic benefits shall inure to the benefit of
Duncan, or his respective heirs, successors and legal representatives.
19. If any term or provision of this Agreement or the application thereof
to any person or circumstance shall to any extent be invalid or unenforceable,
the remainder of this
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Agreement or the application of such term or provision to persons or
circumstances other than those to which it is invalid or unenforceable shall not
be affected thereby, and each term and provision of this Agreement shall be
valid and be enforced to the fullest extent permitted by law; provided, however,
that if the provisions of Paragraph 10 shall be held to be unenforceable and if
Duncan shall not voluntarily abide by said provisions in all respects, then this
Agreement shall ipso facto terminate.
20. This agreement shall terminate as of the earlier of:
a. Thirty-six (36) months after notice is given by the corporation to
Duncan that it no longer desires to extend this agreement;
b. the death of Duncan;
c. the termination of Duncan by the corporation for cause under
paragraph 16 of this agreement;
d. sixty (60) days after notice is given by Duncan to the Corporation
after the existence of a "Business Combination" under paragraph 9
of this agreement;
e. sixty (60) days after notice is given by Duncan to the Corporation
in the event of the failure of the Corporation to elect Duncan as
the Chief Executive Officer of the Corporation under paragraph 10b
of this agreement.
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21. This Agreement shall be construed and enforced in all respects in
accordance with the laws of the Commonwealth of Massachusetts.
22. The phrase Corporation shall include Enterprise Bank and Trust Company
and any parent or subsidiary thereof and any successors and assigns.
WITNESS the execution hereof as an instrument under seal as of the day and
year first above written.
Enterprise Bank and Trust
Company
By /s/
Its Vice Chairman
/s/ George L. Duncan
George L. Duncan
/s/ Philip S. Nyman
Philip S. Nyman
Witness to all
16
EXHIBIT 10.7
AGREEMENT entered into as of the 13 day of December by and between
Enterprise Bank and Trust Company, Massachusetts corporation (hereinafter
referred to as the "Corporation") and Richard W. Main of Lowell, Massachusetts,
(hereinafter referred to as "Main").
W I T N E S S E T H
WHEREAS, Main is a highly regarded expert in the field of bank
management; WHEREAS, the Corporation acknowledges that Main's abilities and
services are unique and essential to the future prospects of the Corporation;
WHEREAS, in light of the foregoing, the Corporation desires to employ
Main as its President and Main desires to accept such employment
NOW, THEREFORE, the parties hereto, each in consideration of the
premises and of the joinder of the other herein, hereby agree as follows:
1. The Corporation hereby employs Main and Main hereby agrees to be
employed by the Corporation upon the terms and conditions hereinafter set forth.
2. This agreement shall commence on January 1, 1996 and shall be
extended from year to year according to the provisions hereinafter set forth.
The minimum term and any extended term(s) of this agreement shall at all times
be two (2) years unless otherwise specifically set forth. This agreement shall
be reviewed annually by the Board of Directors of the Corporation or its
designated committee.
3. Main agrees to serve during the term or terms of this agreement as
the President of the Corporation for so long as he may be elected by the Board
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of Directors of the Corporation and he agrees to devote his full time and best
efforts to the performance of his designated duties to the furtherance of the
business of the Corporation.
4. All services which Main shall perform for the Corporation and its
subsidiaries while this Agreement is in effect shall be deemed to be services
covered by this Agreement and by the compensation herein provided for, and Main
shall not be entitled to any additional compensation thereof for such additional
duties.
5. During the term or any extensions of the term of this agreement,
nothing herein shall preclude Main from remaining involved in any business,
including any limited or general partnership, in which he currently
participates, or any future like venture in which he may participate, as a
passive investor. Any future business involvement such as a general partnership
for real estate purposes or other like active investment must be first approved
by the Board of Directors. The Board shall act within a reasonable time
regarding a request for approval of an investment when such request is made of
it by Main.
6. While Main shall be employed hereunder, he shall be paid a minimum
base salary at the rate of One Hundred Twenty-Four Thousand Three Hundred Forty
Five Dollars ($124,345.00) per annum, to be paid in equal weekly installments,
which shall be subject to periodic upward adjustments as determined by the Board
of Directors of the Corporation. (hereafter referred to as "Base Salary").
7. In addition to his base salary Main shall be entitled to (i)
participate in the Corporation's Benefit Plans, Stock Option Plans, 401k Plans,
Employee Stock Ownership Plan, Bonus Plans, and any other incentive plans of the
Corporation for the benefit of its officers or employees from time to time in
2
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effect (subject to the terms of such plans and subject to the applicable votes
of the Board of Directors in effect from time to time), and (ii) to receive all
such other fringe benefits and perquisites as the Corporation shall from time to
time make available to its officers. For the purposes of this agreement any
payments made to or payable to Main under paragraph 6 and paragraph 7 of this
agreement shall at all times be hereafter defined as his "Annual Earnings."
In addition, in the event of the death of Main while this agreement is
in effect, the Corporation agrees that Donna Main the wife of Main and his
children (the "beneficiaries") shall remain covered by the health plan of the
Corporation and the premium payment shall be made by the Corporation. The
obligation of the Corporation shall terminate for the children upon their
emancipation; and for the wife when she shall remarry or die, whichever shall
first occur.
8. a. During the term or any extended term of this Agreement, if Main is
unable to perform the services required of him hereunder because of sickness or
other disability (hereafter called the "Disability Period"), the Corporation may
elect to be relieved of the obligation to pay Main his annual earnings and, upon
notice to Main, to pay Main during the period of his disability at the rate
equal to seventy-five (75%) percent of the highest annual earnings paid him
during the term of this Agreement which occurred prior to his disability, less
any amounts payable to him under any group disability plan.
b. The existence of a disability shall not entitle the
corporation to terminate this agreement for cause as that term is defined in
paragraph 16 of this agreement, nor to terminate his status as an employee of
the Corporation. If Main is replaced as President of the Corporation during the
disability period according to paragraph 10a of this agreement, then the
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obligations of the parties under paragraph 8a shall control and not those under
said paragraph 10a.
c. For purposes of this Agreement, Main shall be deemed to be
disabled if he shall, in the judgment of the Board of Directors, be unable to
perform his duties hereunder, and he shall be deemed to have recovered from any
such disability if he shall, in the judgment of the Board of Directors, be able
to perform such duties. Any such determination(s) by the Board of Directors
shall be binding upon Main. To assist the Board in making such a decision Main
agrees that he will submit to a physical examination, at any reasonable time or
times, by any qualified physician designated by the Board.
9. If, during the term or any extended term of this Agreement, there is a
"Business Combination" as defined in the Articles of Organization as from time
to time amended, then, beginning on the effective date of the business
combination, Main shall have the option, exercisable by him at any time during
the term or any extended term of this Agreement, upon 60 days' advance written
notice to the Corporation, to terminate this Agreement, in which event the
Corporation shall pay Main within 60 days following the receipt by it of the
said notice of termination a lump sum of money equal to two (2) times Main's
previous highest annual earnings. In addition, Main shall be entitled to receive
any additional benefits referred to in paragraph 7 of this agreement which are
not included in annual earnings but which are due him under the terms and
conditions of the provisions of any Corporate plan or plans. Main, if he
exercises the option to terminate as set forth in this paragraph 9,
notwithstanding the obligation to compensate him under this paragraph, shall be
relieved of any restrictions with respect to competition as set forth in
paragraph 12 and paragraph 13 of this agreement.
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10. a. If, during the term or any extended term of this Agreement and
prior to any change in ownership, Main shall cease to be elected by the Board of
Directors to serve the Corporation as the President, other than for disability
under the provisions of paragraph 8, then, beginning on the date on which Main
ceased to be so elected, Main shall have the options, exercisable by him at any
time during the remainder of the term or any extended term of this Agreement,
upon 60 days advance written notice to the Corporation to (i) remain as a
full-time employee of the Corporation under terms of this Agreement; or (ii)
terminate this Agreement; or (iii) serve the Corporation as a consultant for the
remainder of the term, or any extended term in lieu of serving in another
capacity.
b. In the event Main elects to terminate this Agreement in accordance
with paragraph 10 (a)(ii), Main shall receive, salary payments from the
Corporation for two (2) years from the date the Corporation is notified of his
election to terminate. The salary payments shall equal the highest annual
earnings paid to Main during any year of the term or extended term of this
Agreement. These salary payments shall be made in equal weekly installments. In
addition, Main shall be entitled to receive all other benefits referred to in
paragraph 7 of this Agreement. Main agrees that during the period he is
receiving payments under this paragraph 10 b, and in consideration of the
compensation to be paid to him hereunder, that he will not compete, directly or
indirectly, with the business of the Corporation (including any parent or
subsidiary entity thereof) or of that of its successors or assigns. The phrase
"compete, directly or indirectly, with the business of the Corporation or of
that of its successors or assigns", as used herein, shall be deemed to include
(without thereby limiting the generality of the same) engaging or having any
interest directly or indirectly as an employee through the rendering of services
5
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or otherwise either alone or in association with others in the operation of any
financial institution with a branch office in Lowell or any town contiguous to
Lowell, which shall include Billerica, Chelmsford, Dracut, Tewksbury, and
Tyngsboro and engaging or having any interest directly or indirectly as an
employee through the rendering of services or otherwise either alone or in
association with others in the operation of any financial institution in any
City or Town in which Enterprise Bank and Trust Company has a branch. Main
further agrees, during the payment period of this paragraph 10b, not to own an
interest exceeding one percent (1%), directly or indirectly as an owner, partner
through stock ownership, investment of capital, lending of money or property, in
any financial institution with a branch in Lowell or any town contiguous to
Lowell, which shall include Billerica, Chelmsford, Dracut, Tewksbury, and
Tyngsboro or in any City or Town in which Enterprise Bank and Trust Company has
a branch.. The restrictions as to non competition in this paragraph 10b shall be
in lieu of any restrictions set forth in paragraph 12 and paragraph 13.
c. In the event Main so elects to serve as a consultant, he shall render
such services of an advisory or consultative nature as the Corporation may
require of him from time to time and to assist the Corporation in its relations
with its employees and its customers in order that the Corporation may have the
benefit of his experience and knowledge of its business, his reputation and
contacts in the industry, and his general business experience. During such time
(hereinafter referred to as the "Consultation Period"), Main shall devote
approximately half his time to the business and affairs of the Corporation, and
shall receive as compensation therefor a salary at the rate which shall be equal
to fifty (50%) of the highest annual earnings paid to him during the period in
which he served the Corporation in the capacity of President. During the
6
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Consultation Period, Main shall be deemed to be an employee of the Corporation
and, as such, Main shall participate in the plans and receive the fringe
benefits and perquisites referred to in Paragraph 7 above, subject to the
provisions of said paragraph. Upon the termination of the consultation period,
Main shall be restricted in his activities according to paragraph 12 and
paragraph 13. During each year of the non-compete period following the
termination of the consultation period, Main shall receive salary payments equal
to fifty (50%) percent of the highest annual earnings paid to him during any
year of the term or extended term of this Agreement, notwithstanding the salary
payment provisions set forth in paragraph 12.
If the provisions of this paragraph become operable there shall be no
obligation on the part of Main to serve or to continue to serve as a member of
the Board of Directors of the Corporation.
11. Main agrees that he will not, without the express prior written
consent of the Corporation, whether during the term or any extended term of this
Agreement or thereafter, divulge, communicate or utilize for the benefit of any
other party or person any marketing research, account information or any other
information pertaining to the business or affairs of the Corporation or of any
of its clients, customers, consultants or collaborators, except to such extent
as may be necessary in the ordinary course of performing his duties as to the
Corporation or to comply with legal process. The foregoing notwithstanding,
there is nothing in this Agreement which prohibits Main from communicating
directly with all Federal and/or State regulatory authorities concerning the
activities of the Corporation.
12. Main agrees not to compete with the Corporation during a two year
non-compete period as defined in this paragraph 12 and in paragraph 13.
7
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During each year-of the two-year non-compete period, as further detailed below,
Main shall receive salary payments at least equal to seventy percent of the
highest annual earnings paid to him during any year of the term of this
Agreement or any year of any extended term of this agreement. If Main is
employed during the two-year non-compete period, by another employer outside of
the non-compete area, or by an employer approved by the Corporation within the
non-compete area, Main shall receive salary payments from the Corporation equal
to one-hundred percent of the highest annual earnings paid to him during the
term of this Agreement less any renumeration paid by his new employer. For a
period of two (2) years from the date this Agreement is terminated,(The "Non
Compete Period") and subject to the provisions of this agreement which
specifically set forth a contrary intent, Main further agrees, in consideration
of the compensation to be paid to him hereunder that, during any non compete
period he will not compete, directly or indirectly, with the business of the
Corporation or of that of its successors or assigns. The phrase "compete,
directly or indirectly, with the business of the Corporation or of that of its
successors or assigns", as used herein, shall be deemed to include (without
thereby limiting the generality of the same) engaging or having any interest,
directly or indirectly, as an employee, through the rendering of services, or
otherwise, either alone or in association with others, in the operation of any
financial institution engaging or having any interest directly or indirectly as
an employee through the rendering of services or otherwise either alone or in
association with others in the operation of any financial institution with a
branch office in Lowell or any town contiguous to Lowell, which shall include
Billerica, Chelmsford, Dracut, Tewksbury, and Tyngsboro and engaging or having
any interest directly or indirectly as an employee through the rendering of
8
<PAGE>
services or otherwise either alone or in association with others in the
operation of any financial institution in any City or Town in which Enterprise
Bank and Trust Company has a branch.
13. During the term or any extended term of this Agreement and during the
non compete period defined in paragraph 12, Main agrees not to own an interest
exceeding one percent (1%), directly or indirectly as an owner, partner through
stock ownership, investment of capital, lending of money or property, in any
financial institution with a branch office in Lowell or any town contiguous to
Lowell, which shall include Billerica, Chelmsford, Dracut, Tewksbury, and
Tyngsboro or in any City or Town in which Enterprise Bank and Trust Company has
a branch.
14. The parties hereto agree that the services of Main are of a personal,
special, unique and extraordinary nature and cannot be replaced by the
Corporation, that the violation by Main of any of his covenants hereunder will
cause the Corporation irreparable harm which could not reasonably or adequately
be compensated in damages in an action at law, and that the covenants of Main
hereunder shall therefore be enforceable both at law and in equity, by
injunction and otherwise. The remedies of the Corporation hereunder, and at law
and in equity, shall be cumulative and not alternative, and shall not be
exhausted by any one or more uses thereof.
15. Upon the expiration of this agreement or other termination in
accordance with the provisions of this Agreement, all obligations of the
Corporation to Main hereunder shall forthwith terminate, except for any
obligation to pay any sum or sums of money to Main which may have accrued and
are due and payable under this contract and except for any obligation to pay any
sum or sums of money to Main which may have accrued and are due and payable
under any corporate benefit plan or plans but the obligations of Main shall not
be so terminated except and unless set forth specifically in this agreement.
9
<PAGE>
16. Termination for Cause. Main's employment hereunder may be terminated
for cause without further liability on the part of the Corporation by written
notice to Main setting forth in reasonable detail the nature of such cause. The
following shall constitute "cause" for such termination: (i) a willful breach of
this contract; or, (ii) dishonesty or fraud committed by Main with respect to
the Corporation or any subsidiary or affiliate thereof; or, (iii) conviction of
a felony by Main; or, (iv) an order from a regulatory body directing the
corporation to terminate Main for cause. For the purpose of this Section, any
action taken by the Corporation shall first require a two-thirds vote of all the
members of the Board of Directors. In the event Main shall be terminated for
cause-under this paragraph of the agreement, the Corporation shall be relieved
of its obligations to make any payments to Main under paragraph 12 of this
agreement and Main shall be relieved of any obligations not to compete under
said paragraph 12 and paragraph 13.
17. Any notice hereunder shall be effective when mailed by registered or
certified mail, postage and other charges prepaid, in the case of Main,
addressed to him at 1 Overlook Drive, Chelmsford, Massachusetts 01824, and in
the case of the Corporation, addressed to it c/o Chairman at 222 Merrimack
Street, Lowell, Massachusetts 01852 or at such other address as either of the
parties shall have last designated by notice given in like manner to the other
of them.
18. No provision of this Agreement shall be modified or amended except by
an instrument in writing duly executed by the parties hereto, and no custom,
act, payment, favor or indulgence shall grant any additional right to Main or be
deemed a waiver by the Corporation of any of Main's obligations hereunder or
10
<PAGE>
release Main therefrom or impose any additional obligations upon the
Corporation, nor shall any assent, express or implied, by the Corporation to,
waiver by the Corporation of, any breach by Main of any term or provision hereof
be deemed to be an assent or waiver by the Corporation to or of any succeeding
breach of the same or any other term or provision. Every term and provision of
this Agreement shall be deemed to be of the essence hereof and every breach
thereof material. This Agreement is personal to and shall not be assignable by
Main, but its economic benefits shall inure to the benefit of Main, his
respective heirs, successors and legal representatives.
19. If any term or provision of this Agreement or the application thereof
to any person or circumstance shall to any extent be invalid or unenforceable,
the remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those to which it is invalid or
unenforceable shall not be affected thereby, and each term and provision of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
provided, however, that if the provisions of Paragraph 10 shall be held to be
unenforceable and if Main shall not voluntarily abide by said provisions in all
respects, then this Agreement shall ipso facto terminate.
20. This agreement shall terminate as of the earlier of:
a. twenty-four (24) months after notice is given by the
corporation to Main that it no longer desires to extend
this agreement;
b. the death of Main;
c. the termination of Main by the corporation for cause
under paragraph 16 of this agreement;
d. sixty (60) days after notice is given by Main to the
Corporation after the existence of a "Business
Combination" under paragraph 9 of this agreement;
e. sixty (60) days after notice is given by Main to the
Corporation in the event of the failure of the
Corporation to elect Main as the President of the
Corporation under paragraph 10b of this agreement.
11
<PAGE>
21. This Agreement shall be construed and enforced in all respects in
accordance with the laws of the Commonwealth of Massachusetts.
22. The phrase Corporation shall include Enterprise Bank and Trust
Company and any parent or subsidiary thereof and their successors and assigns.
WITNESS the execution hereof as an instrument under seal as of the day
and year first above written.
Enterprise Bank and Trust Company
By /s/
Its Vice Chairman
/s/ Richard W. Main
Richard W. Main
/s/ Philip S. Nyman
Philip S. Nyman
Witness to all
12
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from unaudited
financial statements of Enterprise Bancorp, Inc. for the period ended June 30,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 0
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 0
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 0
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 0
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 0
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
