November 15, 1999
Mr. Todd Schiffman
Associate Director
United States Securities
and Exchange Commission
Washington, D.C. 20549
Re: Vision Bancshares, Inc.
Form SB-2, Filed September 28, 1999
File No. 333-88073
Dear Mr. Schiffman:
We have received your letter dated October 28, 1999,
containing comments on the above referenced Form SB-2. Set forth
below are the responses of Vision Bancshares, Inc. to those
comments. The responses are numbered according to the numbering
sequence in your October 28, 1999 letter, but the text of your
comments has not been repeated. References to page numbers of the
amended filing refer to the page numbers of the hard copy which is
being filed as a courtesy copy with your office.
General
1. Terms such as "Registration Statement" and "Prospectus"
have not been capitalized in the amended filing.
2. The term "Company" has been dropped from the amended
filing and the registrant is referred to as "Vision Bancshares."
Similarly, the Bank is referred to as "Vision Bank."
3. Terms such as the "Securities and Exchange Commission,"
the "Federal Deposit Insurance Corporation," and the names of other
regulatory bodies have not been defined in the document. Rather,
they are referred to either by their full name or by an appropriate
short-hand version such as "SEC" or "Federal Reserve Board."
4. The repetitive material noted in your comment has been
deleted as has certain other items that may have been repetitive
such as a textual description of executive compensation that was
redundant with the table on page 41 that followed it.
Outside Front Cover Page of Prospectus
5. The cross-reference to the risk factors has been
highlighted by bold type.
6. The requested revision has been made.
7. The latest possible extension date for the filing has been
made as indicated on pages 1 and 10.
Outside Back Cover Pages of Prospectus
8. The table of contents has been moved to the outside back
cover page of the prospectus, and the dealer prospectus delivery
statement in accordance with Item 502 of Regulation S-B has been
added.
Prospectus Summary - page 3
9. The date for commencement of operations at page 2 has been
updated.
10. The discussion regarding regulatory approvals has been
revised and placed under a separate caption on page 2. A "Use of
Proceeds" heading has been added on page 3 for the summary
paragraphs on use of proceeds.
11. The "risk factor" summary section has been deleted in
accordance with your comment.
12. The language "among other things" referenced in your
comment has been deleted as unnecessary.
Risk Factors - page 5
13. The last sentence referred to under the risk factor that
begins "We are a new business enterprise . . . " on page 5 has been
revised. We do not believe that sentence is a separate risk
factor, but the revision is intended to clarify its appropriateness
for that risk factor section.
In addition, the risk factor referenced in your comment number
13 under the heading "financial estimates are based on assumptions
. . . " has been deleted inasmuch as there are very limited
financial estimates given in the prospectus. Accordingly, this
does not appear to be a material risk. However, a new caption on
page 9 has been added for the second paragraph under that heading
referenced in your comment number 13.
14. The captions referenced in your comment 14 have been
revised. In addition, other captions have also been revised in
response to your comment.
15. This risk factor on page 5 has been revised in accordance
with your comment.
16. The heading referenced in this comment has been revised on
page 6 in accordance with your comment.
17. This risk factor has been eliminated. Please see the
response to comment number 13 above.
18. An additional risk factor has been added on page 9.
19. An additional risk factor has been added on page 9.
Terms of the Offering - page 8
20. The escrow agent has been named on page 11.
Use of Proceeds - page 9
21. The table on page 12 has been revised and additional
revisions to the text following the table have been made.
In addition, a risk factor on page 7 has been added relating
to management discretion over the use of proceeds.
22. Additional disclosure has been made on pages 12-13.
Management's Discussion and Analysis of Financial Condition and
Plan of Operations - page 12
23. A revision has been made on page 17 in response to this
comment.
Other Assumptions - page 22
24. The paragraph under this heading has been deleted as
superfluous.
Business of the Bank - Proposed Loan and Deposit Services - page 23
25. Additional disclosure has been added to pages 31-33.
26. Additional disclosure has been added on pages 31.
Certain Relationships and Related Transactions - page 30
27. Additional disclosure has been made on page 43.
Change in Control Provisions - page 32
28. Clarifying language on page 46 has been added in response
to this comment.
Notes to Financial - page 46
29. A revision to footnote 6 has been made in response to this
comment.
Part II - Item 28. Undertakings - page II-2
30. The undertaking required by Item 512(a) has been added to
Item 28.
Exhibits - page II-5
31. Revisions to the exhibit index and exhibits have been
made.
32. Revisions have been made to Exhibit 21.
Other
33. The registrant is aware of the age of the financial
statement requirements.
34. Manually signed and updated accountants' consents have
been included at Exhibit 23.1.
We would be happy to answer any questions or respond to
further comments you may have.
Sincerely,
/s/ Michael D. Waters
_____________________
Michael D. Waters
MDW/trh
cc: Ms. Sonia Lee, Esquire
Mr. J. Daniel Sizemore
<PAGE>
As Filed with the Securities and Exchange Commission on November 16, 1999
Registration No. 333-88073
_________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
VISION BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Alabama 6711 63-1230752
(State of incorporation or (Primary Standard Industrial (I.R.S. Employer
organization) Classification Code Number) Identification No.)
224 West 19th Avenue
Building E
Gulf Shores, Alabama 36542
(334) 967-4212
(Address and Telephone Number of Registrant's Principal Executive Offices)
2201 West 1st Street
Gulf Shores, Alabama 36542
(Address of Principal Place of Business or Intended Principal Place of Business)
with copies to:
J. Daniel Sizemore Michael D. Walters
224 West 19th Avenue Blach & Bingham LLP
Building E 2 Dexter Avenue
Gulf Shores, Alabama 36542 Montgomery, Alabama 36104
(334) 967-4212 (334) 834-6500
(Name, Address and Telephone Number
of Agent for Service of Process)
Approximate date of commencement As soon as practicable following the
of proposed sale to the public: effective date of this Registration
Statement.
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check
the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]_________________________________________
If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
______________________________________________________________________
If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
______________________________________________________________________
If delivery of the prospectus is expected to be made pursuant
to Rule 434, check the following box. [ ] ___________________________
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
<PAGE>
The information in this prospectus is not complete and may be
changed. We are not allowed to sell these securities until the
registration statement that we have filed with the Securities and
Exchange Commission becomes effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer
to buy these securities in any state where the offer or sale is
not permitted.
(Preliminary Prospectus Dated November 16, 1999; Subject to Completion.)
Vision Bancshares, Inc.
1,000,000 Shares of Common Stock
Purchase Price of $10.00 per Share
This prospectus describes an offer by Vision Bancshares, Inc.
of shares of its common stock at a purchase price of $10 per share.
Vision Bancshares is being organized as a bank holding company for
Vision Bank in Gulf Shores, Alabama. Vision Bank is also being
organized as a new bank. Thus, your purchase of the shares will
represent an investment in a start-up banking venture.
SEE "RISK FACTORS" AT PAGE 5 FOR A DISCUSSION OF THE MATERIAL
RISKS THAT YOU SHOULD CONSIDER BEFORE YOU INVEST.
Offering Price Per Minimum Proceeds to Vision Bancshares
Share.................$10.00 if 800,000 shares are sold...$8.0 million
Selling Discounts or Maximum Proceeds to Vision Bancshares
Commissions......... $ 0 if 1,000,000 shares are sold....$10 million
No public market currently exists for our shares and no public
market is expected to develop. The offering price may not reflect
the value of our shares after the offering.
Our address and telephone number are: 2201 West 1st Street,
Gulf Shores, Alabama 36542; (334) 967-4212.
The minimum purchase per purchaser is 100 shares and the
maximum purchase allowed is 25,000 shares. Funds will be placed in
an escrow account with an unaffiliated bank until the minimum of
800,000 shares has been sold. The offering will terminate no later
than March 31, 2000.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense. The shares offered by this prospectus are not deposits and
are not insured by the Federal Deposit Insurance Corporation or any
other governmental agency.
The date of this prospectus is _______________, 1999
<PAGE>
VISION BANCSHARES, INC.
1,000,000 SHARES OF COMMON STOCK
TABLE OF CONTENTS
Page
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . 5
Terms of Offering . . . . . . . . . . . . . . . . . . . . . . 10
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 12
Pro Forma Capitalization . . . . . . . . . . . . . . . . . . 13
Business of Vision Bank . . . . . . . . . . . . . . . . . . 14
Supervision and Regulation . . . . . . . . . . . . . . . . . 33
Directors and Officers . . . . . . . . . . . . . . . . . . . 37
Security Ownership of Management and
Principal Security Holders . . . . . . . . . . . . . . . . 47
Description of Capital Stock . . . . . . . . . . . . . . . . 49
Marketability of Securities . . . . . . . . . . . . . . . . . 51
Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . 52
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . 52
Financial Report to Shareholders . . . . . . . . . . . . . . 53
Index to Financial Statements . . . . . . . . . . . . . . . F-1
YOU SHOULD RELY ON INFORMATION CONTAINED IN THIS DOCUMENT OR
INFORMATION THAT WE HAVE REFERRED TO YOU. WE HAVE NOT AUTHORIZED
ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.
Until ________________, 2000, all dealers that effect transactions
in these securities, whether or not participating in this offering,
may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.
<PAGE>
SUMMARY
The following gives you a brief description of some matters
that are more fully described in other parts of this prospectus.
You should read this prospectus in full before deciding to invest
in the shares.
Vision Bancshares. . . . . Vision Bancshares is an Alabama corporation formed in
1999 to be a bank holding company for Vision Bank.
Vision Bancshares will file reports with the
Securities and Exchange Commission for fiscal
year 1999. After December 31, 1999, Vision
Bancshares will be required to file such
reports for a fiscal year only if it has 300
or more shareholders at the beginning of such
fiscal year.
Vision Bank. . . . . . . . We expect Vision Bank to commence operations in
January, 2000. Vision Bank will operate as a
community bank, emphasizing prompt
personalized customer service to individuals
and businesses located in Baldwin County, Alabama.
We plan to offer a broad array of competitively
priced products and services including:
* demand deposits
* regular savings accounts
* money market deposits
* certificates of deposit
* individual retirement accounts
* safe-deposit boxes and
* commercial, consumer and personal loans
J. Daniel Sizemore will serve as chairman and
chief executive officer of Vision Bank. Mr.
Sizemore has 20 years of banking experience.
Regulatory Approvals. . . The directors of Vision Bancshares
and Vision Bank consist of 15
persons. The organizers of Vision
Bank, which consist of 14 of these
15 persons, have made or will make
the following regulatory
applications to:
* the Alabama Banking Department to
organize and incorporate Vision Bank
under Alabama law;
* the Federal Deposit Insurance
Corporation to become an insured bank
under the Federal Deposit Insurance Act;
and
* the Board of Governors of the Federal
Reserve System for permission for Vision
Bancshares to become a bank holding
company under federal law.
Issuance of the shares offered by this
prospectus are subject to all of these
regulatory approvals.
The Offering. . . . . . . Shares to be Sold. Vision Bancshares is
offering a minimum of 800,000 shares of its
common stock, $1.00 par value per share, at a
price of $10.00 per share. The directors of
Vision Bancshares intend to acquire an aggregate
of at least 422,700 shares at an aggregate
price of $4,277,000 in the offering.
Use of Proceeds. If the minimum number of
shares are sold, Vision Bancshares will
receive proceeds of $8,000,000, before
payment of expenses of the offering. We
estimate expenses to be $70,980.
Vision Bancshares will invest $7,500,000 of
the total minimum proceeds as capital in
Vision Bank. Vision Bancshares will retain
approximately $500,000 as working capital for
Vision Bancshares, before deducting expenses
associated with the offering.
Increase in Shares. At any time prior to
termination of the offering, Vision
Bancshares may, at its discretion, increase
this offering by any amount up to an
additional 200,000 shares. An increase could
bring the total maximum number of shares sold
in this offering to 1,000,000 shares
representing $10,000,000 of total proceeds.
The additional proceeds of up to $2,000,000
will be retained by Vision Bancshares for
working capital, but could be invested in
Vision Bank, if needed.
Purchase Limits. There is a minimum purchase
of 100 shares in the offer representing a
minimum purchase price of $1,000. No person
may purchase more than 25,000 shares, except
that this limit does not apply to the
proposed directors. Vision Bancshares may
reject subscriptions for shares for any
reason. The offering will terminate upon the
earlier to occur of (i) Vision Bancshares's
receipt of a number of subscriptions that
Vision Bancshares deems sufficient, assuming
subscriptions for at least 800,000 shares
have been received; (ii) cancellation of the
offering by Vision Bancshares; or (iii) March
31, 2000.
Commissions. J. Daniel Sizemore is acting as
agent for Vision Bancshares in the offering.
Mr. Sizemore will not be paid any direct or
indirect remuneration for soliciting any
purchaser of shares. Vision Bancshares has
not hired a securities broker-dealer or
underwriter to sell the shares and does not
plan to do so.
Other Terms. Vision Bancshares may decline
any subscription, and cancel accepted
subscriptions, until all required regulatory
approvals have been received. Vision
Bancshares will issue the shares that have
been properly subscribed, paid for and
accepted promptly after the receipt of all
required regulatory approvals.
Escrow. Subscription funds will be placed in
escrow with an unaffiliated bank until the
minimum number of shares has been sold.
Cautionary Statement
About Forward-Looking
Statements. . . . . . . . This prospectus uses certain forward-looking
statements about the financial projections,
proposed operations and business of Vision
Bancshares. The words "estimate," "project,"
"intend," "anticipate," "expect," "believe" and
similar expressions identify forward-looking
statements. These forward-looking statements
are subject to risks and uncertainties that could
cause actual results to differ materially from
those contemplated in such statements. Because
forward-looking statements involve risks
and uncertainties, there are important factors
that could cause actual results to differ
materially from those expressed or implied by
the forward-looking statements. Those factors
are risks associated with starting a new business,
a potential delay in beginning operations, our
dependence on our directors and key
personnel, the potential adverse effect of
competition, interest rate risks, the potential
adverse effect of unpredictable economic
conditions, potential limitations on growth
resulting from low lending limits, risks
associated with the year 2000 and other factors
discussed under "Risk Factors" at page 5.
RISK FACTORS
Any investment you make in the shares offered by this
prospectus will carry a number of risks. In addition to the
information elsewhere in this prospectus, you should pay close
attention to the following:
Because we are a new business enterprise, we have no operating
history that could provide you a basis upon which to assess
either our past or our future performance.
Vision Bancshares and Vision Bank will be newly-formed.
This means they will be subject to all the risks incident to a
new business, including the absence of any history of operations
and performance. Vision Bancshares will have no significant on-
going operations and will act primarily as the parent company of
Vision Bank. Thus, the success of Vision Bancshares will depend
solely on the success of Vision Bank. A new bank generally
encounters problems, expenses and difficulties as a start-up
business. In particular, our Bank will have to attract deposits
and loan business, and many customers who make deposits with or
obtain loans from Vision Bank may have to decide to move their
business from other banks in the area. As a result of these
factors, we do not expect Vision Bank to make a profit in its
first year of operation, and because Vision Bank is a start-up
business, we can make no predictions about future profits.
The banking business involves risks over which management has
little, if any, direct control.
The banking business is subject to risks that are part of
the business of banking and over which management has little
control. These risks are:
* Loan Losses - Making loans involves the risk that loans
will not be repaid by the borrower. Vision Bank will
reserve for potential loan losses, but there is no
precise method of predicting loan losses and reserves
could be insufficient to absorb losses.
* Changes in Interest Rates - Changes in interest rates,
especially increasing rates, can have a negative impact
on profitability, especially if loans made at lower
rates are long-term loans.
* Asset/Liability Management - Vision Bank's
profitability can be affected by the spread between its
interest income and interest expense. If interest
expense is greater than interest income, or if interest
expense increases at a rate higher than interest
income, profitability could be affected negatively.
Because we will be significantly smaller than the majority of our
competitors, we may lack the financial and technological
resources to compete successfully.
Banking is a highly competitive business. Vision Bank will
compete for customers and employees with banks that are more
established as well as with other financial and depository
institutions. Many of these institutions have much greater
financial resources and experience. The banking business is
becoming more dependent on technology, and many customers of
banks are utilizing new ways to conduct their banking business
such as through the use of personal computers and the Internet.
This technology is enabling financial institutions to reach
potential customers in geographic areas and in ways not
previously served by these institutions. In addition,
legislation recently passed by Congress will permit banks and
bank holding companies to acquire and operate securities firms,
insurance companies, and other businesses in the financial
services industry. This legislation may be particularly helpful
to larger banks. We believe there is a need for an independent,
locally-owned bank in Vision Bank's proposed market area. We
also believe that Vision Bank will have the benefit of
experienced management. Nevertheless, our Bank may not be able
to compete successfully or profitably with other financial
institutions.
Because we are a start-up corporation, we will not pay dividends
for the foreseeable future.
As a start-up corporation, it is not likely that Vision
Bancshares or Vision Bank will achieve in its early years of
operations a level of profitability that would justify or allow
the payment of dividends. We believe the following factors will
affect Vision Bancshares's ability to pay dividends in the near
future:
* Vision Bancshares will not likely generate any
significant earnings on its own, and it will depend
upon the payment to it of dividends by Vision Bank if
it is to pay dividends on the shares.
* We expect that for at least the first three years of
operation all earnings will be retained by Vision Bank
for Vision Bank's future needs.
* State and federal banking laws restrict the payment of
dividends by banks, and in no event may dividends be
paid by Vision Bank during the first three years of
operation without the approval of the Alabama Banking
Department and the Federal Deposit Insurance
Corporation.
Because our offering price has been determined arbitrarily by us,
the offering price does not necessarily reflect the value of our
stock.
We have established the offering price of $10.00 per share
arbitrarily. That price bears no relationship to Vision Bank's
projected assets, possible future earnings, book value or other
generally accepted valuation criteria. Accordingly, the offering
price of the shares is not an indication of their value or the
value of Vision Bank. You should not assume that the shares can
be sold in the future for a price at or above the offering price.
Because our business success will depend significantly on key
management personnel, the departure of those personnel could
impair operations.
Vision Bank will depend greatly upon its senior management.
We believe that Vision Bank will have a strong senior management
team and that Vision Bank's incentive compensation and employment
arrangements will enhance its management and operations. J.
Daniel Sizemore will serve as CEO and chairman of Vision
Bancshares and Vision Bank. Mr. Sizemore has 20 years in the
banking business. The loss to Vision Bank of the services of Mr.
Sizemore, or any of its proposed senior management, or the
inability to attract other experienced banking personnel could
adversely affect Vision Bank's business. Some of these adverse
effects could include the loss of personal contacts with existing
or potential customers as well as the loss of special technical
knowledge, experience and skills of such individuals who are
responsible for the operations of Vision Bank.
We may not allocate all of the net proceeds of this offer in the
most profitable manner.
Vision Bank will be capitalized with at least $7.5 million.
Our board of directors and management will have broad discretion
in allocating a total of approximately $5.1 million, or 64%, of
the net proceeds of the offering. We cannot predict the precise
extent to which we will allocate these funds-generating assets,
capital assets or liquidity, but we expect to allocate most of
these funds to loans to customers. This allocation will directly
affect our earnings, and, as a result, it will be difficult to
predict our results or operations. Although we intend to utilize
the funds to serve Vision Bank's best interests, we cannot
assure you that our allocation will ultimately reflect the most
profitable application of these proceeds.
Our computer systems, or those of our service providers,
suppliers or customers, may not operate properly on year 2000-
sensitive dates.
Vision Bancshares and Vision Bank will rely on computers for
the daily conduct of business and for data processing. There is
general concern in the U.S. and world economies that on January
1, 2000 computers will be unable to "read" the new year and as a
consequence there could be widespread computer malfunctions.
Specifically, the year 2000 issue confronting Vision
Bancshares, Vision Bank and Vision Bank's suppliers, customers,
customers' suppliers and competitors centers on the inability of
computer systems to recognize the year 2000 and other year 2000-
sensitive dates. Many existing computer programs and systems
originally were programed with six-digit dates that provided only
two digits to identify the calendar year in the date field. With
the impending new millennium, these programs and computers may
recognize '00" as the year 1900 rather than the year 2000. Like
most financial service providers, Vision Bancshares and its
operations may be affected significantly by the year 2000 issue
as a result of its dependence on computer-generated financial
information. Software, hardware and equipment both within and
outside Vision Bancshares's and Vision Bank's direct control, and
third parties with whom Vision Bancshares and Vision Bank
electronically or operationally interface (including customers
and third party vendors providing data processing, information
systems management, computer system maintenance and credit bureau
information) are likely to be affected. If computer systems are
not able to identify the year 2000, many computer applications
could fail or create erroneous results. Consequently, many
calculations that rely on date field information, such as
interest, payment or due dates and other operating functions,
could generate significantly misstated results, and Vision
Bancshares and Vision Bank could lose their ability to process
transactions, prepare statements or engage in similar normal
business activities. In addition, under certain circumstances,
failure to address adequately the year 2000 issue could adversely
affect the viability of Vision Bank's suppliers and creditors and
the creditworthiness of its borrowers. If not adequately
addressed, the year 2000 issue could ultimately have a
significant adverse impact on Vision Bancshares's and Vision
Bank's products, services and competitive condition and, in turn,
their financial condition and results of operations.
Because Vision Bancshares and Vision Bank will be newly
organized businesses, Vision Bancshares will not have existing
"legacy" systems or equipment requiring year 2000 testing and
remediation. Rather, Vision Bancshares has purchased or will
purchase all of its office equipment, hardware and software and
has obtained outsourcing service commitments from vendors and
service providers that can certify that their products and
services are year 2000 compliant. We believe that Vision
Bancshares will be able to obtain these products and services
from vendors and service providers that can supply the necessary
certificao, however, it will either forego acquiring the product
or service until the required certification is forthcoming or, if
the product or service is essential to its operations, arrange
for independent testing and verification of year 2000 compliance.
If shares are issued in the future at a price less than the book
value of the common stock, the issuance of those shares would
cause a reduction in the book value and perhaps the market value
of existing shares.
Vision Bancshares's articles of incorporation permit Vision
Bancshares to issue 10,000,000 shares of common stock. At least
800,000 shares will be outstanding after this offer. Those
shares outstanding do not include the proposed issuance of
145,000 shares subject to issuance upon exercise of options to be
granted under Vision Bancshares's stock option plans and 7,500
shares reserved for issuance under the Employee Stock Purchase
Plan. Future issuance of any new shares could cause a dilution
in the value of the shares issued pursuant to this offering, and
outstanding at the time of the issuance of shares in the future.
If no trading market for our shares develops, you may find it
difficult to resell your shares.
Although the shares offered by this prospectus have been
registered under applicable securities laws, Vision Bancshares
has no plan to list the shares on any public trading market.
Thus, it is likely that no active trading market, or price
quotations, for the shares will develop. It may not be possible
for you to readily liquidate your investment in the shares.
Because the directors of Vision Bancshares will own approximately
55 percent of the outstanding common stock, they will have more
influence over actions requiring a shareholder vote than you may
have
Our directors will own approximately 55 percent of Vision
Bancshares common stock after this offer. As a result, they will
be able to control the outcome of director elections or block a
significant transaction that might otherwise be favored by the
shareholders who are not directors.
Because our articles of incorporation contains provisions that
may deter a change in control, you may be deprived of an
opportunity to sell your shares at a premium over market prices.
Our articles of incorporation contain two provisions that
may deter an attempt to change or gain control of Vision
Bancshares. First, the articles authorize a separate class of
preferred stock, the terms of which may be established by the
board of directors. Preferred stock could be issued to persons
selected by, and friendly to, the board of directors. Second,
they provide that directors shall be elected to terms of three
years with approximately one-third of the board elected each
year, and directors may only be removed by the shareholders for
cause. Thus, two director elections would be required to change
a majority of the board. These provisions could make it more
difficult to change control of Vision Bancshares. As a result,
you may be deprived of opportunities to sell some or all of your
shares at prices that represent a premium over market prices.
Regulatory requirements may impose additional costs on Vision
Bank and adversely affect profitability.
State and federal banking laws will have a material effect
on the business and operations of Vision Bancshares and Vision
Bank. The operation of Vision Bank and Vision Bancshares will at
all times be subject to these laws, regulations and procedures.
The purpose of those laws is to protect the financial stability
of the banking system and consumer and commercial confidence in
that system and is not to protect investors. Vision Bancshares
and Vision Bank will be required to comply with all such laws,
regulations and procedures.
TERMS OF THE OFFERING
The Offering - Terms of Purchase
Vision Bancshares is offering the shares at a cash price of
$10.00 per share. There is no established public market for the
shares and we expect no established market to develop. The
offering price of the shares was determined arbitrarily by Vision
Bancshares based upon the amount of capital needed by Vision
Bancshares and a per share price that Vision Bancshares deemed to
be reasonable and attractive to potential investors in Vision
Bank's local market area.
This offering is for a minimum of 800,000 shares, subject to
a possible increase at the discretion of Vision Bancshares to any
amount greater than 800,000 shares but not exceeding 1,000,000
shares. Any decision to increase the offering will be made by
Vision Bancshares in its discretion. Vision Bancshares is likely
to increase the offering if there is a demand for the shares.
Vision Bancshares believes that widespread ownership of the
shares in the Gulf Shores and South Alabama area will be
beneficial for the business of Vision Bank, and, therefore, if
more than the minimum of 800,000 shares can be sold, Vision
Bancshares is likely to sell as many shares as possible subject
to the maximum limit of 1,000,000 shares. In no event will
subscriptions for more than 1,000,000 shares be accepted.
The offering will terminate upon the earlier to occur of the
following: (i) Vision Bancshares's receipt of a number of
subscriptions deemed sufficient by Vision Bancshares assuming the
minimum of 800,000 shares can be sold; (ii) cancellation of the
offering by Vision Bancshares; or (iii) March 31, 2000. If by
March 31, 2000, any shares remain unsubscribed, the organizers of
Vision Bancshares may, but are not required to, subscribe for any
unsold shares. If by that date, Vision Bancshares has not
received subscriptions for at least 800,000 shares, the offering
will be terminated and all subscriptions which have been accepted
up to that time will be canceled.
Vision Bancshares reserves the right to decline all or any
part of any subscription. There is no requirement that
persons subscribing for shares agree to open or maintain accounts
with Vision Bank. However, preference may be given to persons
who have indicated their intention to conduct business with
Vision Bank.
In all circumstances, the formation of Vision Bancshares and
the issuance of the shares is subject to appropriate regulatory
approvals, and Vision Bancshares reserves the right to cancel
accepted subscription offers at the direction of the appropriate
banking agencies or otherwise, until the date Vision Bancshares
has received all required regulatory approvals.
Shares duly subscribed and paid for will be issued upon
acceptance by Vision Bancshares as soon as practicable after
Vision Bancshares receives all such required regulatory
approvals.
Procedure for Subscribing for Shares
The shares will be offered by J. Daniel Sizemore, as agent
for Vision Bancshares, through personal contact with potential
investors. No commissions, finders fees, or other remuneration
has or will be paid to Mr. Sizemore or any other person in
connection with the offer and sale of the shares.
If you wish to purchase shares you must sign a subscription
agreement and deliver the subscription agreement along with a
check in the amount of the purchase price for the shares you wish
to purchase to Vision Bancshares on or before the date of
termination of the offering (or mail it so that it is received by
that date), at P.O. Box 1248, Gulf Shores, Alabama 36547;
telephone (334) 967-4212; attention J. Daniel Sizemore. A
subscription agreement will be delivered to you after the
effective date of the registration statement of which this
prospectus is a part. Until you receive a subscription agreement
from us, you should not tender any funds for the purchase of
shares.
You must purchase at least 100 shares and you may not
purchase more than 25,000 shares. These purchase limits do not
apply to Vision Bancshares' proposed directors.
Escrow Account
Until subscriptions for the minimum amount of $8,000,000
have been received, payments for shares will be deposited in an
interest-bearing escrow account established for the purpose of
this offering at National Bank of Commerce of Birmingham,
Birmingham, Alabama, as the escrow agent. Funds will be held in
the escrow until Vision Bancshares has received payment for at
least 800,000 shares and has received approval from the Alabama
Banking Department and the FDIC for the formation of Vision Bank.
Thereafter all funds received in payment for shares, plus
interest earned on such funds, less the escrow agent's fees and
expenses, will at that time be delivered to Vision Bancshares and
the shares will be issued to you as soon as practicable
thereafter. If Vision Bancshares cancels the offering and any
subscriptions accepted up to that time (whether because the
offering has not been fully subscribed, because subscribers have
not made timely payment for their shares, because of failure to
obtain all required regulatory approvals, or for any other
reason), then any funds remitted by you in payment for your
shares, plus any interest earned on the funds, will be returned
to you on a pro rata basis based on the number of days on deposit
in the escrow. If the expenses of the escrow agent exceed the
total interest earned on the escrowed funds, those costs will be
paid by the organizers of Vision Bancshares.
After Vision Bancshares has accepted subscriptions for at
least 800,000 shares of common stock, Vision Bancshares will
accept additional subscriptions without escrow until the maximum
of 1,000,000 shares have been sold, the offer is terminated or
March 31, 2000, whichever first occurs.
The form of the escrow agreement is included as an exhibit
to the registration statement of which this prospectus is a part.
USE OF PROCEEDS
The proceeds from the sale of the shares by Vision
Bancshares will aggregate at least $8,000,000. From the total
minimum proceeds of $8,000,000, Vision Bancshares will pay the
legal, printing and other expenses associated with this offering,
estimated at $70,980. At least $7,500,000 of the offering
proceeds will be invested by Vision Bancshares as capital in
Vision Bank. In general, these proceeds will then be used by
Vision Bank to pay organizational expenses and pre-operating
expenses incurred before Vision Bank opens for business, to pay
operating expenses for the first twelve months after Vision Bank
opens for business, to make leasehold improvements and acquire
furniture and equipment for Vision Bank's premises, and for
general corporate purposes. We estimate that these funds will be
utilized by Vision Bank in the amounts set forth below:
Organizational and
pre-operating expenses . . . . . . . . . . . . . . $ 291,500
First year operating expenses:
Salaries and benefits. . . . . . . . $ 620,100
Interest on deposits. . . . . . . . $ 566,300
Net occupancy expenses. . . . . . . . $ 120,900
Furniture and Equipment. . . . . . . $ 124,800
Provision for loan losses. . . . . . $ 288,000
Other operating expenses. . . . . . . $ 349,000
Total first year operating expenses:. . . . . . .$2,069,100
Funds to be used for loans to customers,
investments and general corporate purposes. . . . . . . $5,139,400
Total $7,500,000
We expect that most of the $5.1 million noted above for
loans, investments and general corporate purposes will be used by
Vision Bank to fund loans to customers.
Vision Bancshares will retain approximately $500,000 from
the proceeds of the offering, before deducting expenses
associated with the offering and after investing $7,500,000 in
Vision Bank. These funds will be used for unanticipated costs,
and could be invested in Vision Bank as additional capital to
fund loans, defray expenses, or other general corporate purposes.
We expect that the proceeds from the offering will satisfy Vision
Bancshares's and Vision Bank's capital requirements for at least
the next 12 months. Vision Bancshares does not anticipate the
need to raise additional capital during that period.
If the offering is increased and the maximum of 1,000,000
shares are sold, representing $10,000,000 in proceeds, the
additional proceeds raised will be invested in Vision Bank for
the purpose primarily of funding loans, but such funds could also
be used for investments and to pay operating costs.
The foregoing amounts are estimates, are based upon
information and assumptions Vision Bancshares believes accurate
and reasonable, and actual expenditures could vary, perhaps
significantly, from these estimates. In particular, the projected
expenditures reflect, among other things, the assumptions and
projections of management that Vision Bank will be able to
attract deposits during its first year of operation. Because
banking regulations and sound banking practice require the
maintenance of certain levels and ratios of assets, deposits and
equity capital, it is possible that expenditures would have to be
reduced or that, at some point in the future, additional capital
would have to be raised by Vision Bancshares.
PRO FORMA CAPITALIZATION
The following table sets forth as of August 31, 1999 the pro
forma capitalization of Vision Bancshares after accounting for
the payment for and issuance of the shares described in this
offering.
Stockholder's equity:
Common stock, $1.00 par value:
10,000,000 shares authorized,
800,000 shares to be outstanding (1) $ 800,000
Additional paid-in capital (2) 7,200,000
Accumulated Deficit (181,820)
Total capitalization: $7,818,180
(1) This table assumes the minimum of 800,000 shares are sold
for an aggregate of $8,000,000. It does not reflect an
aggregate 145,000 shares which could be granted under stock
option plans, or 7,500 shares reserved for issuance under
Vision Bancshares's Employee Stock Purchase Plan, or a
possible increase in the offering.
(2) Does not include offering expense of approximately $70,980
(consisting primarily of legal, accounting and printing
expenses and registration fees).
BUSINESS OF VISION BANK
General
Vision Bancshares was organized as an Alabama corporation on
July 16, 1999. When approval from the Federal Reserve Board is
received, Vision Bancshares will be licensed as a bank holding
company.
When incorporated and organized, Vision Bank will be a state
banking corporation organized under the laws of the State of
Alabama. Vision Bank proposes to provide general retail and
commercial banking services principally to customers in Gulf
Shores and Baldwin County, Alabama. Vision Bank does not propose
to provide trust or fiduciary services in the initial two years
of operation, but may do so in the future.
Vision Bank's primary location will be 2201 West 1st Street,
Gulf Shores, Alabama 36542 with a branch at 25051 Canal Street,
Orange Beach, Alabama 36561, and its phone number is (334) 967-
4212. Its mailing address is P.O. Box 1248, Gulf Shores, Alabama
36547. Vision Bancshares will also be located at this address.
Vision Bancshares will not have any significant operations and
will serve primarily as the parent company for Vision Bank.
Under the Bank Holding Company Act of 1956, Vision Bancshares, as
a bank holding company, may engage in certain bank related
businesses that Vision Bank may not conduct, although Vision
Bancshares has no present plans for such activities. See
"Supervision and Regulation." Vision Bancshares will have no
employees, and its officers and directors will receive no
compensation for their services to Vision Bancshares but,
instead, they will be compensated for services performed in
comparable capacities for Vision Bank.
Vision Bank's lobby hours of operation will be 9 a.m. to 5
p.m. Monday through Thursday, 9 a.m. to 6 p.m. on Friday, and
closed on Saturday. Drive-in hours will be 8 a.m. to 5 p.m.
Monday through Thursday, 8 a.m. to 6 p.m. Friday, and 8 a.m. to
12 noon Saturday. Vision Bank anticipates having 12 to 15
employees.
Vision Bank will contract for off-premise electronic data
processing services.
Available Information
Vision Bancshares is not a public company and currently
files no reports with the Securities and Exchange Commission or
any other agency. Upon the effective date of the registration
statement of which this prospectus is a part and at least for the
fiscal year ending December 31, 1999, Vision Bancshares will be
subject to the informational requirements of the Securities
Exchange Act of 1934, and in accordance therewith will file
annual, quarterly and periodic reports with the SEC. Such
reports and other information can be inspected and copied at the
public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the SEC's Regional Offices in New York (7 World Trade
Center, Suite 1300, New York, New York 10048) and Chicago
(Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661). Copies of such materials can be
obtained from the public reference section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Information on the operation of the public reference
facilities of the SEC may be obtained by calling the SEC at 1-
800-SEC-0330. The Commission also maintains a Web Site that
contains reports and other information regarding registrants that
file electronically with the Commission at http://www.sec.gov.
These reports include Vision Bancshares' registration statement.
Vision Bancshares has filed with the SEC a registration
statement (No. 333-88073) on Form SB-2 under the Securities Act
of 1933, registering the shares to be issued pursuant to this
prospectus. This prospectus does not contain all of the
information set forth in the registration statement and the
exhibits thereto. For further information regarding Vision
Bancshares and the shares offered hereby, you may review the
complete registration statement, including all of its amendments
and exhibits. Statements contained in this prospectus or in any
document incorporated by reference herein as to the contents of
documents are necessarily summaries of the documents, and each
statement is qualified in its entirety by reference to the copy
of the applicable document filed with the Commission.
Assuming the registration statement becomes effective in
1999, Vision Bancshares must file reports with the Commission for
fiscal year 1999. The obligation of Vision Bancshares to file
such reports for any fiscal year after 1999 will be suspended if,
for any such fiscal year, Vision Bancshares has less than 300
shareholders on the first day of such fiscal year. If the
registration statement becomes effective in 2000, Vision
Bancshares will file such reports for 2000, and for any fiscal
year thereafter if Vision Bancshares has 300 or more shareholders
at the beginning of any such fiscal year.
Bank Premises
Vision Bank intends to lease a building, consisting of two
stories and approximately 9,600 square feet, located at 2201 West
1st Street, Gulf Shores, AL 36542 for its main office. The
building is under construction and will be owned by Gulf Shores
Investment Group, LLC, an entity owned by certain organizers of
Vision Bancshares. Construction should be completed within nine
months. Pending completion of the building, Vision Bank will
operate out of a temporary modular building on the site. The
site is located in the downtown area of the city, with a
residential area behind Vision Bank. Downtown Gulf Shores is a
civic area; approximately two miles south is the beach, located
shopping centers are within 1/2 mile of downtown. Highway 59
near the bank site offers access to and from the downtown
district. Surrounding the bank office building are other large
and small office buildings with new construction across the
street and behind the building. The location is convenient to
both residential areas and businesses.
Vision Bank intends to provide customary banking services,
in-lobby safe deposit boxes to its customers, and is considering
various options regarding convenient, cost-effective access to
automated teller machines. As a key aspect of its marketing
strategy, Vision Bank intends to provide courier services for its
more significant banking relationships, including individuals, in
an effort to improve banking convenience, and reduce parking
needs. Vision Bank intends to serve the retail and business
needs of the community as one of the few locally owned,
independent banks in the area. In addition, the organizers have
expertise and business development skills in the areas of small
business and real estate lending. Vision Bank will also have
more extensive operating hours than any competing institution.
The proposed branch will be located on Canal Street in
Orange Beach approximately 10 miles east of Gulf Shores, in a one
story building consisting of approximately 3,500 square feet, to
be owned by Gulf Shores Investment Group, LLC and leased to
Vision Bank. Construction should be completed within 12 months.
Pending completion, the branch will operate out of a temporary
modular building on the site. The property is flanked by small
businesses and is located near a prime traffic conduit. The
variety of the surrounding businesses will encourage use at
diverse hours; the site is located next to a retail center,
across the street from a movie theater, adjacent to a
governmental authority and less than one block from Columbia
Southern University.
These lease arrangements for the main and branch office
sites are subject to FDIC approval. If the FDIC does not approve
these lease arrangements, Vision Bank will acquire the land for
its main office at a price of $350,000 and the land for its
branch office at a price of $275,000. Construction costs for the
bank buildings will be $1,150,000 for the main office and
$425,000 for the branch office. Vision Bank would most likely
finance these costs from a commercial lender.
Management intends to insure its properties adequately.
Management's Discussion and Analysis of Financial Condition
and Plan of Operations
The following discussion of the financial condition of Vision
Bancshares should be read in conjunction with Vision Bancshares's
financial statements and related notes, which are included in this
prospectus. See "Index to Financial Statements."
Vision Bancshares was organized as an Alabama corporation on
July 16, 1999. Since inception, the main activities of Vision
Bancshares have been centered on seeking, interviewing and
selecting Vision Bancshares's directors and officers, applying
for a state bank charter, applying for Federal Deposit Insurance
Corporation deposit insurance, applying to become a bank holding
company and raising equity capital through this offering.
The operations of Vision Bancshares from its inception
through the close of the offering have been and will continue to
be funded by advances received from the organizers. The
organizers have agreed to contribute a total of $350,000, of
which $140,000 was outstanding at August 31, 1999. Management
anticipates that Vision Bancshares will repay any advances from
the organizers after the closing of this offering.
Vision Bank does not anticipate any significant changes in
the number of its employees. Vision Bank expects to employ
between 12 to 15 people during its first year.
Liquidity and Interest Rate Sensitivity. Since Vision
Bancshares has been in the organizational stage, there are no
results to present at this time. Nevertheless, once Vision Bank
commences operations, net interest income, Vision Bancshares's
primary source of earnings, will fluctuate with significant
interest rate movements. To lessen the impact of these margin
swings, management intends to structure the balance sheet so that
repricing opportunities exist for both assets and liabilities in
roughly equivalent amounts at approximately the same time
intervals. Imbalance in these repricing opportunities at any
point in time constitute interest rate sensitivity.
Interest rate sensitivity refers to the responsiveness of
interest-bearing assets and liabilities to changes in market
interest rates. The rate sensitive position, or gap, is the
difference in the volume of rate sensitive assets and liabilities
at a given time interval. The general objective of gap
management is to manage actively rate sensitive assets and
liabilities so as to reduce the impact of interest rate
fluctuations on the net interest margin. Management will
generally attempt to maintain a balance between rate sensitive
assets and liabilities as the exposure period is lengthened to
minimize Vision Bank's overall interest rate risks.
The asset mix of the balance sheet will be evaluated
regularly in terms of several variables: yield, credit quality,
appropriate funding sources and liquidity. To manage effectively
the liability mix of the balance sheet, management plans to focus
on expanding the various funding sources.
As Vision Bank continues to grow, management will
continuously structure its rate sensitivity position in an effort
to hedge against rapidly rising or falling interest rates.
Vision Bank's asset and liability management committee of its
board of directors will meet on a quarterly basis to develop
management's strategy for the upcoming period. Such strategy
includes anticipations of future interest rate movements.
Liquidity represents the ability to provide steady sources
of funds for loan commitments and investment activities, as well
as to maintain sufficient funds to cover deposit withdrawals and
payment of debt and operating obligations. These funds can be
obtained by converting assets to cash or by attracting new
deposits. Vision Bank's primary source of liquidity will come
from its ability to maintain and increase deposits.
Management knows of no trends, demands, commitments, events
or uncertainties that should result in or are reasonably likely
to result in Vision Bancshares's liquidity increasing or
decreasing in any material way in the foreseeable future, other
than this offering.
Capital Adequacy. There are now two primary measures of
capital adequacy for banks and bank holding companies: (1) risk-
based capital guidelines and (2) the leverage ratio.
The risk-based capital guidelines measure the amount of a
bank's required capital in relation to the degree of risk
perceived in its assets and its off-balance sheet items. Under
the risk-based capital guidelines, capital is divided into two
"tiers." Tier 1 capital consists of common shareholders' equity,
noncumulative and cumulative (bank holding companies only)
perpetual preferred stock and minority interest. Goodwill is
subtracted from the total. Tier 2 capital consists of the
allowance for loan losses, hybrid capital instruments, term
subordinated debt and intermediate term preferred stock. Banks
are required to maintain a minimum risk-based capital ratio of
8.0%, with at least 4.0% consisting of Tier 1 capital.
The second measure of capital adequacy relates to the
leverage ratio. The FDIC and the Alabama Department of Banking
have established a 3.0% minimum leverage ratio requirement. The
leverage ratio is computed by dividing Tier 1 capital into total
assets. For banks that have not received the highest regulatory
rating by their primary regulator (which includes Vision Bank),
the minimum leverage ratio should be 3.0% plus an additional
cushion of at least 1% to 2%, depending upon risk profiles and
other factors.
A new rule was recently promulgated by the Federal Reserve
Board and the FDIC that adds a measure of interest rate risk to
the determination of supervisory capital adequacy. In connection
with this new rule, the agencies have also proposed a measurement
process to measure interest rate risk. Under this proposal, all
items reported on the balance sheet, as well as off-balance sheet
items, would be reported according to maturity, repricing dates
and cash flow characteristics. A bank's reporting position would
be multiplied by duration-based risk factors and weighted
according to rate sensitivity. The net risk weighted position
would be used in assessing capital adequacy. The objective of
this complex proposal is to determine the sensitivity of a bank
to various rising and declining interest rate scenarios.
Management believes that the net proceeds of this offering
should satisfy Vision Bancshares's and Vision Bank's cash
requirements for at least the three-year period following the
opening of Vision Bank. Accordingly, management does not
anticipate that it will be necessary to raise additional funds
for the operation of Vision Bancshares or Vision Bank over the
next three years. For additional information regarding material
expenditures during such period, see "Use of Proceeds."
Market Area and Demographic Information
The organizers are well acquainted with the communities of
South Baldwin County, Alabama. The attractive coastline draws
considerable tourism to the area and fosters strong activity in
the retail and housing areas of the local economy. Bordering
communities house industries that range from electronics to
health care. The banking industry has shown strong growth in the
past five years as well, although only one independent bank is
headquartered in the area. The organizers have identified
several services and products which a local bank could offer
competitively to the community within an expanding banking
market: personal banking; expanded hours; and a commitment to
fostering local real estate growth through lending.
The Primary Service Area (PSA) for Vision Bank will be South
Baldwin County, which includes the coastal communities of Gulf
Shores and Orange Beach, the cities in which Vision Bank will
establish offices. South Baldwin County is defined as the area
of the County south of U.S. Highway 98.
The Secondary Service Area (SSA) for Vision Bank encompasses
the remainder of Baldwin County and portions of neighboring
Escambia County in Florida, primarily Perdido Key. The
organizers believe that at least 75 percent of Vision Bank's
proposed customers will be businesses and residents located in
the PSA and SSA.
Baldwin County is the seventh-largest county in the State of
Alabama. Although smaller, Baldwin County is growing much more
rapidly than neighboring Mobile County. South Baldwin County is
known for its beautiful beaches and is a major tourist
destination, thus attracting people from all over the state and
country. The area has grown considerably over the past several
years, with strong residential and commercial construction,
particularly in the towns of Orange Beach and Gulf Shores. The
following table summarizes various economic indicators of Baldwin
County.
<TABLE>
<CAPTION>
ITEM PAST 5 YEARS
1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C>
Population 115,809 119,966 124,257 128,820 132,828
No. of housing starts
(residential building
permits) 1,914 1,591 1,526 1,661 1,869
Industrial & commercial
building permits issued 359 397 496 490 473
Retail sales ($000s) 811,454 865,483 922,424 1,092,483 1,101,896
</TABLE>
Tourism is a major industry in South Baldwin County.
According to the Gulf Coast Convention and Visitors Bureau, the
Gulf Coast area, which includes Gulf Shores, Orange Beach and
Fort Morgan, has an inventory of 219 hotels, motels and
condominiums, for a total of 13,214 available units.
Further, a new hurricane evacuation route, which would
originate in Gulf Shores and include a bridge near one of the
proposed bank locations, is planned for the area. This route
would connect Gulf Shores directly to Interstate 10, and provide
increased and easier access to the coastal communities of South
Baldwin County. Increased visitation would be expected to
promote further growth in related industries in the area.
Population
Based on population projections prepared by the Center for
Business and Economic Research of the University of Alabama,
Baldwin County is projected to be the fourth fastest growing
county in the state between 1995 and 2000. South Baldwin County,
the PSA, is fueling much of this growth. The area grew from
28,203 persons in 1990 to an estimated 39,801 residents in 1997.
Out of 443 cities and towns in Alabama, the town of Orange Beach
had the fourth greatest percentage increase in population between
the years of 1990 and 1996, nearly doubling its population. The
town of Foley ranked 15th, increasing its population by almost
one-third, and Gulf Shores ranked 28th in population growth, with
an increase of almost 24 percent. The following table depicts
population estimates and projections for Baldwin County overall
as well as key locations in the PSA and SSA. All of these areas
experienced sizeable growth in population between 1990 and 1996.
This growth is projected to continue over the next several years,
as indicated in the table below.
<TABLE>
Population of Service Area
<CAPTION>
------------Estimates-----------
1990 2003 % Change
Census 1992 1994 1996 1998(1) Projection 1990-1996
<S> <C> <C> <C> <C> <C> <C> <C>
Baldwin County 98,920 106,226 115,809 124,257 130,168 147,419 25.6%
Foley 4,937 5,499 5,936 6,433 N/A N/A 30.3%
Gulf Shores 3,261 3,467 3,680 4,029 4,316 4,855 23.6%
Orange Beach 2,253 2,420 2,547 3,327 3,845 4,722 47.7%
Perdido Key, Florida 1,326 N/A N/A N/A 2,022 2,348 N/A
</TABLE>
The resident population of the PSA is only part of the
overall population picture. Tourism is a major industry. Many
people reside in South Baldwin for the warmer months, and others
for even smaller amounts of time. During the summer months when
people flock to the coastal areas, the population of South
Baldwin increases dramatically. Based on information presented
in the following table, the seasonal population in the cities of
Gulf Shores and Orange Beach is almost six times the resident
population.
<TABLE>
Seasonal Population and Projections - Gulf Coast Area
<CAPTION>
1988 1998 2000
<S> <C> <C> <C>
Gulf Shores 15,744 29,744 40,944
Orange Beach 18,236 25,836 32,484
Unincorporated 3,732 4,876 5,808
Total 37,712 60,456 79,236
</TABLE>
Estimates of the population by age groups show that there is
a slightly higher-than-average percentage of retirees in Baldwin
County (15% versus 13% nationally), but also a sizeable
concentration in the age groups that comprise most of the labor
force (ages 25-64, for a total of 52%):
<TABLE>
1995 Population by Age - Baldwin County
<CAPTION>
Number %
<S> <C> <C>
Total Population 119,966 100%
Ages 0-4 8,244 7%
Ages 5-17 21,957 18%
Ages 18-24 9,565 8%
Ages 25-44 34,549 29%
Ages 45-64 27,227 23%
Age 65+ 18,424 15%
</TABLE>
Industry and Employment
The PSA is renowned as a vacation destination and businesses
in the area reflect this fact. Hotels, restaurants and retail
centers are among the top employers in the PSA. Also present are
businesses that benefit from the robust construction. The
portion of the PSA that is not immediately bordering on the coast
has a more diverse mix of businesses, with a mixture of
manufacturing, electronics, government and health care
businesses. The following table lists the top 20 employers in
South Baldwin County.
<TABLE>
Top 20 Employers in South Baldwin County
September, 1998
<CAPTION>
Full-Time
Equivalent
Company Product/Service Employment
<S> <C> <C>
Riviera Center Outlet Mall Retail 1,200
Packard Hughes Interconnect Electronic Products 825
South Baldwin Hospital Medical 450
BF Goodrich Aerospace Thrust Reversers 447
Wal Mart Super Center Retail 430
Hazel's Family of Restaurants Restaurants 365
Perdido Beach Resort Hotel 350-375
Solutia Manufacturing Company Aluminum Castings 350
Gulf Telephone Telecommunications 338
Voyagers Gulf Beach Hotel, Inc. Hotel 260
Gulf State Park Recreation, Motel 250
Vulcan, Inc. Aluminum & Steel Products 206
Foley Nursing Home Nursing Home 175
Baldwin County EMC Utilities 174
Bon Secour Fisheries Seafood Processing 170
Riviera Utilities Utilities 164
City of Gulf Shores Municipal Government 144
City of Foley Municipal Government 117
Peavey Electronics Sound Equipment 95
Reynolds Ready Mix Ready Mix Concrete 90
</TABLE>
Unemployment in Baldwin County was 3.2 percent in May, 1999,
which was well below the state and national unemployment rates.
The size of the labor force continues to grow, as the number of
persons employed in Baldwin County has increased almost 70
percent since 1990. The composition of the labor force is 80
percent in service-producing jobs, and the remaining 20 percent
work in goods-producing jobs, which includes manufacturing and
construction. Construction employment in the Gulf Coast area was
estimated to be 1,009 by Dun & Bradstreet's Marketplace Report as
of the second quarter of 1999. The overall employment mix in
Baldwin County is comparable to the nation's job mix. All of
these indicate a robust and diversified economy in the County.
The following table denotes trends in employment for the County.
<TABLE>
Baldwin County Labor Force Information
1990 - 1998
<CAPTION>
1990 1992 1994 1996 1998
<S> <C> <C> <C> <C> <C>
Civilian Labor Force (1) 46,360 52,140 57,970 64,210 68,670
Employed persons living in County (1) 43,910 48,930 55,240 61,400 66,800
Unemployment Rate (1) 5.3% 6.2% 4.7% 4.4% 2.7%
Persons working in Baldwin County (2) 27,300 31,520 36,810 41,620 46,230
Goods-Producing Employment (2) 6,350 6,440 7,320 7,860 9,000
Service-Producing Employment (2) 20,940 25,080 29,490 33,760 37,230
<FN>
(1) Based on place of residence.
(2) Based on place of work.
</FN>
</TABLE>
Baldwin County had the fifth highest per capita income in
1997 in the State of Alabama at $22,431. This is 108 percent of
the State's per capita income and 111 percent of the Mobile
area's per capita income. As indicated in the following table,
median household income is much higher in the coastal cities
than in Baldwin County overall.
<TABLE>
Household Income for Service Area
<CAPTION>
1998
Median
Household
Area Income
<S> <C>
Baldwin County, Alabama $ 35,431
Gulf Shores, Alabama $ 42,461
Orange Beach, Alabama $ 42,688
Perdido Key, Florida $ 49,708
</TABLE>
Competitors & Growth in Deposits
Banking is a highly competitive business, and Vision Bank
will be competing for customers primarily in Baldwin County.
The following banks and savings and loan institutions are
located in Baldwin County:
<TABLE>
<CAPTION>
DISTANCE FROM
LOCATION DEPOSITS BANK
NAME OF INSTITUTION (City and State) ($000's omitted) (miles)
<S> <C> <C> <C>
AmSouth Bank Foley, AL $35,090 10.5
AmSouth Bank Gulf Shores, AL $50,227 .4
Citizen's Bank, Inc. Foley, AL $ 1,080 10.6
Colonial Bank (West Laurel) Foley, AL $97,841 10.5
Colonial Bank (So. McKenzie) Foley, AL $ 3,330 10.5
Colonial Bank Gulf Shores, AL $34,606 .2
Colonial Bank Lillian, AL $ 6,686 18.1
Colonial Bank Orange Beach, AL $ 7,636 .7
First Gulf Bank Foley, AL $11,404 10.5
First Gulf Bank
(W. Ft. Morgan Road) Gulf Shores, AL $17,249 .9
First Gulf Bank
(W. Ft. Morgan Road) Gulf Shores, AL $35,765 .7
Regions Bank Elberta, AL $36,166 13.6
Regions Bank (W. Roosevelt) Foley, AL $67,738 10.5
Regions Bank Foley, AL $ 76 10
Regions Bank Gulf Shores, AL $62,007 .9
Regions Bank Orange Beach, AL $10,818 7
South Alabama Bank Foley, AL $ 1,304 10.6
SouthTrust Bank Foley, AL $32,062 10.7
SouthTrust Bank Gulf Shores, AL $35,999 .5
Union Planters Bank Foley, AL $ 3,795 10.4
United Bank Foley, AL $22,008 10.3
United Bank Lillian, AL $ 3,152 18
Whitney National Bank Foley, AL $ 89 10.5
Whitney National Bank Gulf Shores, AL $16,712 .4
Whitney National Bank Orange Beach, AL $10,414 6.9
</TABLE>
Baldwin County Banking Market
The banking market in Baldwin County totaled $1.476 billion
in deposits as of June 30, 1998. Eleven institutions operate a
total of 56 branches in the County. The County's banking market
is dominated by five large multi-branch commercial banks, with
several smaller regional banks as noted below:
<TABLE>
Market Share of FDIC-Insured Deposits in Baldwin County
By Banking Institution; Sorted by Market Share
June 10, 1998
<CAPTION>
Total
No. of Offices Deposits Market
Insitution Name Headquarters in Baldwin Co. ($000s) Share
<S> <C> <C> <C> <C>
Regions Bank Birmingham, AL 12 $ 389,342 26.4%
SouthTrust Bank, NA Birmingham, AL 7 $ 256,061 17.4%
Colonial Bank Montgomery, AL 8 $ 215,699 14.6%
AmSouth Bank Birmingham, AL 7 $ 212,642 14.4%
Compass Bank Birmingham, AL 4 $ 195,355 13.2%
First Gulf Bank Gulf Shores, AL 6 $ 96,618 6.6%
Citizen's Bank, Inc. Robertsdale, AL 4 $ 49,782 3.4%
Whitney National Bank New Orleans, LA 3 $ 27,215 1.8%
United Bank Atmore, AL 2 $ 25,160 1.7%
Union Planters Bank, NA Memphis, TN 2 $ 6,482 0.4%
South Alabama Bank Mobile, AL 1 $ 1,304 0.1%
Total 56 $1,475,660 100%
</TABLE>
There are no banks located in Perdido Key, Florida, which is
considered part of the SSA.
The banking market in Baldwin County grew at an average
annual rate of 8.3 percent from mid-1994 through mid-1998, from
deposits totaling $1.074 billion to $1.476 billion as of June 30,
1998.
Primary Service Area Banking Market
Within South Baldwin County, the PSA, there are ten banking
institutions with 25 offices. The entire PSA market had $603.3
million in aggregate deposits as of June 30, 1998. Two
institutions have over 50 percent of the area's market share for
deposits - Regions and Colonial. Compass Bank, which has a
strong presence in the County, does not have an office in the
PSA. First Gulf Bank is the only independent bank with
headquarters in the PSA. Its market share is close to 11
percent. The following table lists deposits and market share by
institution in the PSA.
<TABLE>
Market Share of FDIC-Insured Deposits in PSA
By Institution; Sorted by Market Share
June 30, 1998
<CAPTION>
No. of Total
Offices in Deposits Market
Name PSA ($000s) Share
<S> <C> <C> <C>
Regions Bank 5 $176,805 29.3%
Colonial Bank 5 150,099 24.9%
AmSouth Bank 2 85,317 14.1%
SouthTrust Bank 2 68,061 11.3%
First Gulf Bank 3 64,418 10.7%
Whitney National Bank 3 27,215 4.5%
United Bank 2 25,160 4.2%
Union Planters Bank 1 3,795 0.6%
South Alabama Bank 1 1,304 0.2%
Citizen's Bank, Inc. 1 1,080 0.2%
Total 25 $603,254 100.0%
</TABLE>
The South Baldwin banking market grew at an annual rate of
10.9 percent from mid-1994 through mid-1998. The number of
banking offices doubled in the area during this time, growing
from 12 branch locations in 1994 to 25 in 1998.
Because of the market dominance of the top two commercial
banks which control over 50 percent of deposits in the PSA, a new
entrant could increase competition and provide the public with
greater choices for obtaining banking services. The overall
strength of the banking market also provides all competing
institutions with additional opportunities for growth.
Deposit and Loan Assumptions
The organizers developed a peer group to use as a basis for
determining Vision Bank's projected deposit and loan growth mix.
Seven banks that serve the PSA have been included in this "Peer
Group." Assets for these peer institutions as of December 31,
1998 ranged from $112 million to $38 billion. Included in the
Peer Group is one bank headquartered in Vision Bank's primary
service area of South Baldwin County.
The following table contains deposit and market share
information for each banking office in the PSA as of June 30,
1998.
<TABLE>
Market Share of FDIC-Insured Deposits in South Baldwin County
By Bank Branch; Sorted by Market Share
June 30, 1998
<CAPTION>
Total
Deposits Market
Name City ($000s) Share
<S> <C> <C> <C>
AmSouth Bank - McKenzie Street Foley $35,090 5.8%
AmSouth Bank - Hwy 59 Gulf Shores 50,227 8.3%
Citizen's Bank, Inc. - Orange Ave. Foley 1,080 0.2%
Colonial Bank - West Laurel Foley 97,841 16.2%
Colonial Bank - So. McKenzie Street Foley 3,330 0.6%
Colonial Bank - Gulf Shores Pkwy. Gulf Shores 34,606 5.7%
Colonial Bank - US Hwy 98 Lillian 6,686 1.1%
Colonial Bank - Perdido Bch Blvd. Orange Beach 7,636 1.3%
First Gulf Bank - Hwy 59 Foley 11,404 1.9%
First Gulf Bank - W. Fort Morgan Rd. Gulf Shores 17,249 2.9%
First Gulf Bank - W. Fort Morgan Rd. Gulf Shores 35,765 5.9%
Regions Bank - East State St. Elberta 36,166 6.0%
Regions Bank - W. Roosevelt Foley 67,738 11.2%
Regions Bank Foley 76 0.0%
Regions Bank - Gulf Shores Pkwy. Gulf Shores 62,007 10.3%
Regions Bank - Orange Bch Blvd. Orange Beach 10,818 1.8%
South Alabama Bank - So. McKenzie Foley 1,304 0.2%
SouthTrust Bank - McKenzie Foley 32,062 5.3%
SouthTrust Bank - Hwy 59 Gulf Shores 35,999 6.0%
Union Planters Bank - 1190 So. McKenzie Foley 3,795 0.6%
United Bank - 516 So. McKenzie Foley 22,008 3.6%
United Bank - Hwy 98 Lillian 3,152 0.5%
Whitney National Bank - So. McKenzie Foley 89 0.0%
Whitney National Bank - Gulf Shores Pkwy. Gulf Shores 16,712 2.8%
Whitney National Bank - Org. Bch. Blvd. Orange Beach 10,414 1.7%
Total $603,254 100.0%
</TABLE>
Deposit Assumptions
The deposit growth potential for Vision Bank is strong. The
average annual growth rate of aggregate deposits in South Baldwin
County between 1994 and 1998 equaled 10.9 percent. The table
below demonstrates that not only have deposits grown, but also
the number of bank branches has more than doubled from 1994
through 1998. As of June 30, 1998 deposits totaled $603.3
million in the PSA, and there were 25 banking offices.
<TABLE>
Growth in Deposits
1994 - 1998
<CAPTION>
Average
Annual
1994 1995 1996 1997 1998 Growth
<S> <C> <C> <C> <C> <C> <C>
Total Deposits ($000) $399.054 $426.535 $481.231 $540.145 $603.254 10.9%
Offices 12 12 17 20 25
</TABLE>
Vision Bank's share of projected deposits is based on an
analysis of the average deposit growth rate in the PSA since
1994. It was assumed that total market deposits would continue
annual growth for the next three years equal to the average
growth rate experienced from June 30, 1994 to June 30, 1998.
Given this growth assumption, total aggregate deposits in South
Baldwin County at the end of the third year of operation are
projected at $822.8 million.
Deposit levels for Vision Bank are based on the organizers'
estimates of available business in Vision Bank's PSA, given the
projected market growth rates. It is believed that Vision Bank
will achieve market share gains in each of the first three years
of operation. For reference, the Peer Group Deposit Mix is as
follows:
Peer Group Deposit Mix
Demand Deposits 14.9%
Now Accounts 3.6%
CD's under $100,000 34.9%
CD's over $100,000 12.2%
MMA and Savings 34.4%
Loan Assumptions
The organizers believe that the loan demand within the
market areas is substantial. Commercial and real estate loans
will be the prevalent loan types for Vision Bank. The organizers
recognize that South Baldwin County offers both tourism and
manufacturing-based lending opportunities. The initial
prospective customers of Vision Bank will include professional
contacts of the organizers - a group with a long and successful
history in the real estate and small business community. The
customer base will be grown with expanded manufacturing and
service-based clients as Vision Bank's community visibility
heightens. The targeted customers are businesses and
corporations of various sizes and in various industries and
professions which have banking needs that include operating
accounts, cash management services, lines of credit, term loans
and real estate loans.
The organizers have significant knowledge of the Gulf Shores
market. It is the belief of the organizers, based on discussions
with prospective customers, that the projected loan levels are
achievable, without sacrificing loan quality. The loan to
deposit ratio for the peer groups as of June 30, 1998 was 75.6%.
The organizers anticipate that Vision Bank will have a
loan/deposit ratio of 80 percent for each of its first three
years of operation.
The organizers have assumed that prevailing interest rates
will continue to exist. However, the organizers recognize the
risks associated with increasing rates, which may be the
operating environment when Vision Bank opens for business. The
business plan is based on the premise that Vision Bank will
attempt to maintain a constant positive spread between the
interest earned in investments and loans, and the interest cost
incurred on deposits. The positive spread will be achieved by
generally offering floating rate loans. Fixed rate loans will be
offered only when their maturities match the projected maturities
of long term certificates of deposits or other borrowings.
The organizers have assumed that the pricing for loans will
continue to be very competitive and has assumed the following
interest rates in Vision Bank's three year business plan:
Assumptions of Interest on Loans
Commercial Loans 8.00%-9.00%
Real Estate Loans 8.00%
Consumer Loans 9.00%
Federal Funds Sold 4.80%
Other Investments 5.50%
Assumptions on Interest Rates on Deposits
Now Accounts 3.50%
Savings Accounts 4.90%
Money Market Accounts 3.50%
CDs Less than $100,000 5.25%
CDs Over $100,000 5.25%
Asset and Liability Structure
The asset/liability mix of Vision Bank will be designed to
earn a maximum rate of return within the confines of reasonable
liquidity, interest sensitivity, and credit risk. The
anticipated mix of loans will cover a broad enough segment of the
market to prevent concentrations of credit in any loan type or
industry segment. The loan mix will be similar to that of other
Gulf Shores community banks. The mix of loans will allow
reasonable liquidity due to maturity schedules and amortization.
The mix of loans will be related to loan growth in the
marketplace and the interest sensitivity requirements of Vision
Bank.
The liability mix will not differ significantly from that of
other banks in the marketplace. The target deposit customer will
often maintain interest bearing transaction and savings accounts.
Time deposits will be kept short but may be extended based on the
liquidity and growth expectation of Vision Bank. Large time
deposits and brokered deposits will not be sought.
The investment portfolio will consist primarily of short
maturities, but may be extended based on the liquidity and growth
expectations of Vision Bank. The loan portfolio will be
comprised primarily of adjustable rate loans with average
maturities of less than five years.
Vision Bank will have a funds management policy that will
attempt to match maturities and interest rate sensitivity of
assets and liabilities, allowing for reasonable tolerance. The
organizers realize that a perfect match of assets and liability
interest rates sensitivity is not possible and may not be
desirable in some cases.
Business Strategy
Vision Bank expects to develop as a full-service commercial
banking organization by initially developing the extensive
relationship networks of the proposed president and senior
lender. Prospective customers are businesses and corporations of
various sizes and in various industries and professions which
have banking needs that include operating accounts, cash
management services, lines of credit, term loans and real estate
loans. It is also expected that Vision Bank will have the
opportunity to bid for the operating accounts of public agencies
in the City of Gulf Shores and Orange Beach. The organizers are
aware of the increased processing and administrative costs of
handling public operating accounts and are aware of the pledging
requirements for public deposits. The organizers also intend to
develop banking relationships with the seasonal residents of Gulf
Shores, individuals who generally are wealthy and who have not
yet developed significant ties with any of the financial
institutions in the area.
Through strategic alliances yet to be finalized with either
third-party vendors or correspondent banks, Vision Bank expects
to offer specialized services to enhance the personal nature of
the banking relationship and provide greater value as a way of
capturing and retaining customer loyalty. These services will
include courier service, internet banking through Vision Bank's
data processing vendor, investment services, debit cards, credit
cards, and payroll services.
In order to accommodate the credit needs of the businesses
and corporations that have been identified as likely prospective
customers, Vision Bank expects to enter into loan participations
with several correspondent banks that are familiar with the
marketplace and with Vision Bank's officers and credit standards.
Examples of such correspondent banking relationships could be
several large Alabama banks such as Compass, National Bank of
Commerce, The Banker's Bank, and SouthTrust. Vision Bank expects
to have numerous opportunities to consider financing for small
businesses and certain entrepreneurial organizations, and will
extend credit through participation in the Small Business
Administration programs. It is expected that these loans, if
any, will be organized and then packaged and sold to enhance fee
income for Vision Bank.
Vision Bank plans to engage in aggressive direct marketing
and officer calling during the first year of operation to achieve
loan and deposit goals and to fully implement Vision Bank's
strategy to acquire banking relationships of the targeted
contacts of the organizers. Depending on the success of this
effort, Vision Bank will expand marketing and promotional efforts
as appropriate, including expanding staff to include a full-time
business development officer.
Proposed Deposit Services
Vision Bank proposes to offer the following deposit-related
products to its customers:
Consumer Deposit Products Miscellaneous Services
Regular Checking ATM/Debit Card
Interest Checking Night Depository
Money Market Checking Safe Deposit Boxes
Senior (Age 50+) Checking Stop Payments
Regular Savings Collections
Certificates of Deposit Direct Deposits
Individual Retirement Accounts Savings Bonds
Wire Transfers
Commercial Deposit Products Bank by Mail
Travelers Checks
Regular Business Checking Official Checks
Regular Business Interest Checking MasterCard/Visa
Money Market Checking Automatic Transfer
Regular Savings Courier Service
Certificates of Deposit Overdraf Protection
Vision Bank has no pre-determined deposit composition. The
deposit mix and other services will depend upon market conditions
and customer demand.
Loans and Loan Policy
Vision Bank intends to offer the following types of loans in
the following approximate amounts relative to total loans:
Commercial Loans - 42%
Installment Loans - 37.5%
Single Pay Loans - 12.5%
Real Estate Loans - 8.3%
Vision Bank has not yet adopted a formal loan policy, but we
expect that the underwriting and other criteria for loans that we
make will be consistent with prudent banking practices. For
example, the primary credit risk associated with any loan is the
creditworthiness of the borrower and the primary source of
repayment for any loan will be the borrower's financial strength.
Adequate collateral for loans will normally be required. However,
collateral value will not make a non-creditworthy borrower
creditworthy. Personal guarantees will be required when the
value or marketability of the collateral is in doubt or, in the
case of a commercial loan, the commercial enterprise carries
additional risk. Credit risk insurance will be offered as an
option, but will only be required when management determines that
the risk indicates need for insurance.
We do not expect that any category of loan made by Vision
Bank will represent a significantly higher degree of risk than
any other category.
We expect that Vision Bank's loan policy will provide for
various levels of officer lending authority, with a requirement
of loan committee approval or full board approval for loans that
exceed certain amounts or loans that otherwise carry unusual
risk.
In addition, we expect that Vision Bank will have in place
on the date of opening loan requirements that are specified for
various types of loans to be made. For example:
* We will require a first or second mortgage on any real
estate loan equal to a specified minimum percentage of
the loan amount. These percentages may vary based on
the type of loan, such as a loan-to-value limit of 65
percent for raw land, 80 percent for construction
loans, and 85 percent for 1-4 family residential loans.
* We will generally limit commercial loans to short-term
loans to local businesses, with amortization of the
loan for a greater period sometimes permitted. Long
term commercial loans may be made when the economic
feasibility of the loan is established, the term of the
loan does not exceed its economic purpose, and an
acceptable repayment schedule can be demonstrated.
* We will require independent appraisals on all
residential and commercial loans secured by real
estate.
* Consumer loans will normally be made for the purchase
of automobiles, recreational equipment, and equity
lines of credit. Personal signature loans will
generally be limited to well established customers who
have a sound credit history.
Loans will be made at both fixed and variable rates,
depending upon market and competitive conditions.
Vision Bank will not extend credit to any member of its
board of directors or any executive officer unless the extension
is on substantially the same terms and conditions, including
interest rate and collateral, as those prevailing for comparable
transactions with non-affiliated borrowers and does not involve
more than the normal risk of repayment. Such extensions must
also have prior board of director approval with the related-party
abstaining from the approval.
SUPERVISION AND REGULATION
Bank holding companies and banks are regulated extensively
under both federal and state law. The following information
describes some but not all of the applicable statutory and
regulatory provisions, and it is qualified in its entirety by
reference to the particular statutory and regulatory provisions.
Any change in applicable law or regulation may have a material
effect on the business of Vision Bancshares and Vision Bank.
Vision Bancshares
Vision Bancshares will be a bank holding company registered
with, and subject to supervision by, the Board of Governors of
the Federal Reserve System under the Bank Holding Company Act of
1956 (the "BHC Act"). The Federal Reserve Board may examine
Vision Bancshares and Vision Bank.
The BHC Act requires prior Federal Reserve Board approval
for, among other things, the acquisition by a bank holding
company of direct or indirect ownership or control of more than
5% of the voting shares or substantially all the assets of any
bank, or for a merger or consolidation of a bank holding company
with another bank holding company. With certain exceptions, the
BHC Act prohibits a bank holding company from acquiring direct or
indirect ownership or control of any voting shares of any company
which is not a bank or bank holding company and from engaging
directly or indirectly in any activity other than banking or
managing or controlling banks or performing services for its
authorized subsidiaries. A bank holding company may, however,
engage in or acquire an interest in a company that engages in
activities which the Federal Reserve Board has determined, by
regulation or order, to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto.
Recent legislation passed by Congress will permit bank holding
companies to acquire securities, insurance and other financial
services related businesses and, thus, permit bank holding
companies to engage in a wide range of financial activities
not previously permitted.
Vision Bancshares and Vision Bank will be subject to the
Federal Reserve Act, Section 23A. Section 23A defines "covered
transactions" to include extensions of credit and limits a bank's
covered transactions with any single affiliate to no more than
10% of a bank's capital and surplus. Covered transactions with
all affiliates combined are limited to no more than 20% of a
bank's capital and surplus. All covered and exempt transactions
between a bank and its affiliates must be on terms and conditions
consistent with safe and sound banking practices and a bank and
its subsidiaries are prohibited from purchasing low quality assets
from Vision Bank's affiliates. Finally, Section 23A requires that
all of a bank's extensions of credit to an affiliate be
appropriately secured by collateral. Vision Bancshares and Vision
Bank will also be subject to Federal Reserve Act, Section 23B,
which further limits transactions among affiliates.
Vision Bancshares's ability to pay dividends will depend
upon the earnings and financial condition of Vision Bank and
certain legal requirements. The Federal Reserve Board has stated
that bank holding companies should not pay dividends except out
of current earnings and unless the prospective rate of earnings
retention by Vision Bancshares appears consistent with its
capital needs, asset quality and overall financial condition.
In the future, Vision Bancshares will rely upon the payment
to it, if any, of dividends by Vision Bank for the payment of
dividends on its shares of common stock.
Vision Bank
Vision Bank will be a state bank organized under the laws of
the State of Alabama and its deposits will be insured by the
"FDIC" up to the maximum amount permitted by law. Vision Bank
will be subject to regulation, supervision and regular
examination by the Superintendent of the Alabama State Banking
Department and the FDIC. Federal and state banking laws and
regulations regulate, among other things, the scope of the
banking business conducted by Vision Bank, its loans and investments,
reserves against deposits, mergers and acquisitions, borrowings,
dividends, minimum capital requirements, and the locations of
branch offices and certain facilities.
Under the Alabama Banking Code, a state bank may not declare
or pay a dividend in excess of 90% of the net earnings of such
bank until the surplus of the bank is equal to at least 20% of
its capital, and thereafter the prior written approval of the
Superintendent is required if the total of all dividends declared
by the bank in any calendar year exceeds the total of its net
earnings for that year combined with its retained net earnings
for the preceding two years less any required transfers to
surplus. No dividends, withdrawals or transfers may be made from
the bank's surplus without prior written approval of the
Superintendent. As a newly organized bank, Vision Bank may not
pay dividends during its first three years of operation without
the prior approval of the Superintendent and the FDIC.
The various federal bank regulators, including the Federal
Reserve Board, have adopted a risk-based capital requirement for
assessing bank and bank holding company capital adequacy. These
standards establish minimum capital standards in relation to the
relative credit risk of assets and off-balance sheet exposures.
Capital is classified into two tiers. Tier I capital consists of
common shareholders' equity and perpetual preferred stock
(subject to certain limitations) and is reduced by goodwill and
minority interests in the common equity accounts of consolidated
subsidiaries. Tier II capital consists of the allowance for
possible loan losses (subject to certain limitations) and certain
subordinated debt. The risk-based capital guidelines require
financial institutions to maintain specific defined credit risk
factors (risk-adjusted assets). The minimum Tier I capital ratio
is 4.0%, and the combined Tier I and Tier II capital to risk-
weighted assets ratio is 8.0%. The Federal Reserve Board also
has adopted regulations which supplement the risk-based capital
guidelines to include a minimum leverage ratio of Tier I capital
to total assets of 3.0% to 5.0%.
The Federal Reserve Board's risk based capital guidelines
will be applied to Vision Bancshares and Vision Bank on a
consolidated basis. This will limit Vision Bancshares's ability
to engage in acquisitions financed by debt. The FDIC has adopted
similar risk-based capital requirements that are applicable to
Vision Bank. The Federal Reserve Board, the FDIC and the
Superintendent have imposed minimum capital (leverage)
requirements. Those rules may affect the future development of
Vision Bancshares's long-term business and capital plans, and may
affect its ability to acquire additional financial institutions
and other companies.
Support of Subsidiary Institutions
Under Federal Reserve Board policy, Vision Bancshares will
be expected to act as a source of financial strength for, and to
commit resources to support, Vision Bank. This support may be
required at times when, without this Federal Reserve Board
policy, Vision Bancshares might not be inclined to provide it.
In addition, any capital loans by Vision Bancshares to Vision
Bank may be repaid only after its deposits and certain other
indebtedness are repaid in full. In the event of a bank holding
company's bankruptcy, any commitment by the bank holding company
to a federal bank regulatory agency to maintain the capital of a
banking subsidiary will be assumed by the bankruptcy trustee and
entitled to a priority of payment.
Prompt Corrective Action
The Federal Deposit Insurance Corporation Improvement Act of
1991 establishes a system of prompt corrective action to resolve
the problems of undercapitalized institutions. Under this
system, the federal banking regulators have established five
capital categories (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized), are required to take certain mandatory
supervisory actions, and are authorized to take other
discretionary actions, with respect to institutions in the three
undercapitalized categories. The severity of the action will
depend upon the capital category in which the institution is
placed. Generally, subject to a narrow exception, the banking
regulator must appoint a receiver or conservator for an
institution that is critically undercapitalized. The federal
banking agencies have specified by regulation the relevant
capital level for each category.
An institution that is categorized as undercapitalized,
significantly undercapitalized or critically undercapitalized is
required to submit an acceptable capital restoration plan to its
appropriate federal banking agency. A bank holding company must
guaeets its capital restoration plan, subject to certain
limitations. The controlling holding company's obligation to
fund a capital restoration plan is limited to the lesser of 5% of
an undercapitalized subsidiary's assets or the amount required to
meet regulatory capital requirements. An undercapitalized
institution is also generally prohibited from increasing its
average total assets, making acquisitions, establishing any
branches or engaging in any new line of business, except under an
accepted capital restoration plan or with FDIC approval. In
addition, the appropriate federal banking agency may test an
undercapitalized institution in the same manner as it treats a
significantly undercapitalized institution if it determines that
those actions are necessary.
FDIC Insurance Assessments
The FDIC has adopted a risk-based assessment system for
insured depositary institutions that takes into account the risks
attributable to different categories and concentrations of assets
and liabilities. The system assigns an institution to one of
three capital categories: (1) well capitalized; (2) adequately
capitalized; and (3) undercapitalized. These three categories
are substantially similar to the prompt corrective action
categories described above, with the "undercapitalized" category
including institutions that are undercapitalized, significantly
undercapitalized, and critically undercapitalized for prompt
corrective action purposes. The FDIC also assigns an institution
to one of three supervisory subgroups within each capital group.
The supervisory subgroup to which an institution is assigned is
based on a supervisory evaluation that the institution's primary
federal regulator provides to the FDIC and information that the
FDIC determines to be relevant to the institution's financial
condition and the risk posed to the deposit insurance funds. The
FDIC then determines an institution's insurance assessment rate
based on the institution's capital category and supervisory
category. Under the risk-based assessment system, there are nine
combinations of capital groups and supervisory subgroups to which
different assessment rates are applied. Assessments range from 0
to 27 cents per $100 of deposits, depending on the institution's
capital group and supervisory subgroup.
In addition, effective January 1, 1997, the FDIC imposed
assessments to help pay off the $780 million in annual interest
payments on the $8 billion Financing Corporation bonds issued in
the late 1980s as part of the government rescue of the thrift
industry. The FDIC will assess banks at a rate of 1.3 cents per
$100 deposits until December 31, 1999. Thereafter, it will add
approximately 2.4 cents per $100 of deposits to each assessment.
The FDIC may terminate its insurance of deposits if it finds
that the institution has engaged in unsafe and unsound practices,
is in an unsafe or unsound condition to continue operations or
has violated any applicable law, regulation, rule, order, or
condition imposed by the FDIC.
Other Legislative Action
Other legislative and regulatory proposals regarding changes
in banking, and the regulation of banks, thrifts and other
financial institutions are considered from time to time by the
executive branch of the federal government, Congress and various
state governments. Some of those proposals, if adopted, could
significantly change the regulation of banks and the financial
services industry. It cannot be predicted whether any proposals
will be adopted, and, if adopted, how these will affect Vision
Bancshares or Vision Bank.
Monetary and Fiscal Policy
Banking is a business which depends on interest rate
differentials. In general, the difference between the interest
paid by a bank on its deposits and its other borrowings and the
interest received by a bank on its loans to customers and its
securities holdings constitutes the major portion of a bank's
earnings. Thus, the earnings and growth of Vision Bancshares and
Vision Bank will be subject to the influence of economic
conditions generally, both domestic and foreign, and also to the
monetary and fiscal policies of the United States and its
agencies, particularly the Federal Reserve Board. The Federal
Reserve Board regulates the supply of money through various
means, including open-market dealings in United States government
securities, the discount rate at which members may borrow, and
reserve requirements on deposits and funds availability
regulations. These instruments are used in varying combinations
to influence the overall growth of bank loans, investments and
deposits and also affect interest rates charged on loans or paid
on deposits. The policies of the Federal Reserve Board have had
a significant effect on the operating results of commercial banks
in the past and will continue to do so in the future. The nature
and timing of any future changes in Federal Reserve Board
policies and their impact on Vision Bancshares cannot be
predicted.
DIRECTORS AND OFFICERS
Background
The organizers of Vision Bancshares together with Olen
Crawford will serve as members of the board of directors of
Vision Bancshares, or Vision Bank, or both. The table below lists
the directors and executive officers of Vision Bancshares.
<TABLE>
<CAPTION>
Position
with Vision
Bancshares and Principal Occupation
Name and Age Vision Bank for the Last Five Years
<S> <C> <C>
J. Daniel Sizemore, 51 Proposed CEO and Proposed CEO and
Chairman of the Chairman
Board of Vision Bancshares
of Vision Bancshares and Vision Bank
& Vision Bank since April, 1999;
President and Chief
Executive
Officer, The Bank,
Birmingham, Alabama
1998 - 1999;
President and Chief
Executive
Officer, Commerce
Bank
of Alabama,
Albertville, Alabama
1994 - 1998
James R. Owen, Jr., 47 Director of Vision President, Gulf Shores
Bancshares & Vision Title Insurance Co., Inc.
Bank (Title Insurance Company)
Olen E. Crawford,47 Vision Banchsares Business Developer
Director (self-employed) since 1998;
President, Call Points
Business Unit of Vialog
Communication 1997-1998;
Executive Vice President,
Conference Source
International,
1992-1997
Joe C. Campbell, 53 Vision Bancshares District Manager, ALFA
Director Insurance Company
(General Insurance)
Donald W. Peak, 59 Director of Vision President, Forest Manor
Bancshares & Vision Nursing Home, Inc.
Bank (long-term care facility);
President, Phoenix
Therapy Associates
(rehabilitation
therapy); President,
Central Medical
Supplies of Alabama
(durable medical equipment)
Thomas Gray Skipper, 28(1) Vision Bancshares Vice President, Scotch
Director Plywood Company
Gordon Barnhill, Jr., 44 Director of Vision Owner, Barnhill Land
Bancshares & Vision and Real Estate
Bank (Real Estate Business)
and farmer
Daniel M. Scarbrough, Director of Vision Vice President, Community
M.D., 54 Bancshares & Vision Health Systems, Inc. since
Bank Private practice of medicine
prior to July 4, 1997
Patrick Willingham, CPA, Director of Vision President and CEO,
54 Bancshares & Vision Community Health
Bank Systems, Inc.
(Certified Public
Accountant)
S. Millard Johnson, 75 Vision Bancshares Retired Business Executive
Director
William T. Carlson, Jr., 48 Vision Bancshares Of Counsel,
Director Capell & Howard, P.C.
(Lawyer)
Rick A. Phillips, 47 Director of Vision Owner, Professional Real
Bancshares & Vision Estate Partners, Inc.
Bank (Real Estate Brokerage
and Marketing)
William D. Moody, 52 Director of Vision President, Alpha Development
Bancshares & Vision Group, Inc.
Bank (Real Estate Development)
George W. Skipper, III, Vision Bancshares Vice President, Skipper
54 (1) Director Insurance
(General Insurance)
Julian Brackin, 49 Vision Bancshares Partner, Brackin and
Director McGriff, P.C.
(Attorney)
Nancy Jayne Jackson, 42 Senior Vice President Senior Vice President,
Vision Bancshares; Senior
Vice President, Operations
Ready Bank, Ft. Walton
Beach, Florida, 1999; Vice
President and Information
Systems Auditor, Aliant
Bank, Montgomery, Alabama
prior to 1999.
<FN>
(1) George W. Skipper, III is the father of Thomas Gray Skipper.
</FN>
</TABLE>
Election and Terms of Board of Directors
Directors of Vision Bancshares will be elected annually for
three year terms. The terms will be staggered with approximately
one-third of the directors being elected each year for three year
terms. The following directors will serve until the 2000 annual
meeting: Messers. Barnhill, Brackin, Campbell, Carlson and
Crawford. Directors Johnson, Moody, Owen, Peak and Phillips will
serve until the 2001 annual meeting, and directors Scarbrough,
Sizemore, George W. Skipper, III, Thomas Gray Skipper and
Willingham will serve until the 2002 annual meeting. Directors
of Vision Bank will be elected annually and serve one year terms.
Officers of Vision Bancshares and Vision Bank serve at the
discretion of the respective boards of directors.
During Vision Bank's first fiscal year, directors will not
receive any fees for serving in that capacity. Thereafter,
director fees may be paid in amounts determined by the board of
directors of Vision Bank. Directors who are employees of Vision
Bank will receive no compensation for serving as bank directors.
The directors of Vision Bancshares could receive director fees
from Vision Bancshares paid out of the capital retained by Vision
Bancshares.
Vision Bancshares's articles of incorporation set the
minimum number of directors at 6 and the maximum at 20, with the
exact number to be determined by resolution of the directors.
Initially, there are expected to be 15 members of the board, as
shown above. It is presently contemplated that Vision Bank will
employ a senior vice president and that the person holding that
position will be appointed by the other board members as a member
of the board of directors.
Committees of the Board
The board of directors of Vision Bank will initially have an
audit committee, loan committee and investment committee.
The audit committee, consisting of Messrs. Patrick
Willingham, Gordon Barnhill, Rick A. Phillips and Daniel M.
Scarbrough, will recommend to the board of directors the
independent accountants to be selected as Vision Bancshares'
auditors, review the audit plan, financial statement and audit
results, review with internal and independent auditors and bank
examiners Vision Bank's accounting practices and policies, and
overall accounting and financial controls, and conduct an
appropriate review of any related party transactions and
potential conflict of interest situations.
The investment committee will consist of Messrs. J. Daniel
Sizemore, James R. Owen, Jr., William D. Moody, Gordon Barnhill,
and Daniel M. Scarbrough. In addition, it is anticipated that a
senior vice president of Vision Bank will serve on this
committee. The investment committee will be charged with
reviewing Vision Bank's investment portfolio and investment
activities.
The loan committee will include Messrs. J. Daniel Sizemore,
James R. Owen, Jr., Patrick Willingham, William D. Moody and
Rick A. Phillips, as well as Vision Bank's senior loan officer.
Executive Compensation
Officers of Vision Bancshares and Vision Bank will serve at
the discretion of the board of directors.
The following tables show on a prospective basis for 1999
the anticipated annual rate of compensation and stock option
grants to be paid to Vision Bancshares' chairman and chief
executive officer.
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation Long Term
Compensation
Award
Name and Securities
Principal Other Annual Underlying
Position Year Salary ($) Bonus ($) Compensation Options (#)
<S> <C> <C> <C> <C> <C>
J. Daniel Sizemore
Chairman and CEO 1999 $120,000 (1) $0 35,000 (2)
<FN>
(1) Bonuses will be determined annually.
(2) The exercise price is $10.00 per share.
</FN>
</TABLE>
<TABLE>
Options to be Granted
<CAPTION>
Number of
Securities % of Total
Underlying Options Exercise
Options to Granted to Price Expiration
Name be Granted Employees ($/Sh) Date
<S> <C> <C> <C> <C>
J. Daniel Sizemore 35,000 70% $10 10 Year
</TABLE>
Employment Agreements
J. Daniel Sizemore has an employment agreement with Vision
Bancshares to serve as president and chief executive officer of
Vision Bancshares and chairman and chief executive officer of
Vision Bank. The agreement has a three year term and may be
renewed daily for a continuous three year term. The agreement
may only be terminated upon three years notice except that the
agreement may be terminated by Vision Bancshares at any time for
cause. Mr. Sizemore will receive a base salary of $120,000 per
year, and be entitled to certain benefits such as life insurance,
a $750 per month automobile allowance, and country club and civic
dues. The agreement also provides that Mr. Sizemore will receive
options of 35,000 shares of Vision Bancshares's common stock at a
price of $10 per share.
Certain Relationships and Related Transactions
Gulf Shores Investment Group, LLC (the "Investment Group")
is an Alabama limited liability company that proposes, subject to
regulatory approval, to own the real estate and construct and own
the buildings for Vision Bank's main office and branch office.
The Investment Group will be formed by those persons who are
directors of Vision Bancshares, except Olen E. Crawford . The
lease agreement for Vision Bank's main office will have a three
year term and will provide for annual lease payments of $155,295,
payable monthly with additional rental payments made based upon
certain operating costs of the building. The lease may be
extended for three, three year terms. Vision Bank will operate
out of a temporary modular unit owned by Vision Bank for
approximately nine months and will pay $2,630 per month in ground
lease payments to the Investment Group.
The lease for the branch office will have a three year term
and provide for annual lease payments of $63,000, payable
monthly, with additional rental payments made based upon certain
operating costs of the building. The lease may be extended for three,
three year terms. It is anticiapted that the construction of
the branch office will not be completed until approximately
August, 2000. In the meantime, the Investment Group will lease
the ground for the branch to Vision Bank at a monthly lease of
$1,975. Vision Bank will maintain a temporary modular building
on this site for use as the branch bank premises. The Investment
Group will purchase the site of this branch from George W.
Skipper, III, and Thomas Grey Skipper, organizers and directors
of Vision Bancshares, for a purchase price of $275,000.
Each of the organizers has signed an agreement providing
that each person will contribute up to a maximum of $25,000 to
pay his pro rata portion of the organizational expenses for
Vision Bank and Vision Bancshares. The agreement provides that
upon receipt of appropriate regulatory approvals, Vision Bank
will reimburse the organizers for these expenses. From these
contributions, Vision Bancshares paid $17,500 on an option to
purchase the land on which Vision Bank will be located and $7,280
to architects for building plans. The Investment Group will
reimburse Vision Bancshares for these payments.
The foregoing lease arrangements are subject to approval of
the FDIC. If the FDIC does not approve the lease arrangements,
Vision Bank will buy the real estate and construct and own the
bank buildings at such sites.
In the opinion of the directors of Vision Bancshares, the
terms of these lease agreements (including the purchase price for
the branch site) and reimbursements for costs between the
Investment Group and Vision Bancshares or Vision Bank are at
least as favorable as those that could have been obtained from an
unaffiliated party.
In the future, Vision Bank may make loans to its directors
and officers in the ordinary course of business. Such loans, or
other banking transactions involving these persons, will be made
on the same terms, including interest rate and collateral
requirements, that Vision Bank would make to the general public.
Incentive Stock Compensation Plan
The board of directors of Vision Bancshares has adopted an
Incentive Stock Compensation Plan. The directors believe an
incentive program will be an important asset in attracting and
retaining qualified personnel and motivating their efforts on
behalf of Vision Bank and its interests. This plan will be
submitted to a vote of Vision Bancshares shareholders at the
first meeting of shareholders.
The following discussion outlines some of the essential
features of this plan, but is qualified in its entirety by
reference to the full text of the plan which is included as an
exhibit to the registration statement of which this prospectus is
a part.
All key employees of Vision Bank are eligible to participate
in this plan. The selection of participants is entirely within
the discretion of the stock option plan committee which is to be
comprised of two or more members of the board of directors of
Vision Bancshares designated by resolution. The plan will be
administered by the committee, which has the exclusive right,
subject to the provisions of the plan, to interpret its provisions
and to prescribe, amend and rescind rules and regulations for its
administration.
Vision Bancshares has reserved a total of 75,000 shares of
common stock for issue under the plan. For "incentive stock
options" qualified as such under section 422(a) of the Internal
Revenue Code, the aggregate value of the shares for which an
employee may be granted options in any year cannot exceed
$100,000, measured by the fair market value at date of grant,
plus any unused carryover of this annual limitation. The price
of the option cannot be less than 100% of the fair market value
of the shares on the date the option is granted, except as to
persons who hold more than 10% of the voting power of Vision
Bancshares, in which case the option price cannot be less than
110% of fair market value.
No option may be exercised more than ten years after it is
granted. An option becomes exercisable, subject to the foregoing
limitation, any time after it is granted unless vesting
requirements are imposed with the grant. An option must be
exercised within 90 days of retirement, and within 90 days of
other termination from Vision Bancshares or Vision Bank. All
vesting requirements on options may be waived if there is a
change of control, or potential change of control of Vision
Bancshares.
The board of directors of Vision Bancshares has granted
options to Mr. Sizemore for 35,000 shares and plans to grant
options to other officers for an aggregate of 15,000 shares.
These options are exercisable at $10.00 per share, and otherwise
on the terms described above.
The plan also provides that notwithstanding any other
provision in the plan or any agreement under the plan, Vision
Bancshares's primary bank regulator shall at any time have the
right to require any holder of options to exercise such options
or forfeit options not exercised if Vision Bancshares's capital
falls below minimum capital required by Vision Bancshares'
primary bank regulator.
Employee Stock Purchase Plan
The board of directors of Vision Bancshares has also adopted
an Employee Stock Purchase Plan, which is intended to qualify
under Section 423(b) of the Internal Revenue Code. Under this
plan eligible Bank employees may purchase shares of Vision
Bancshares through a payroll deduction plan. We believe it is
important that employees of Vision Bank have an opportunity to
invest in Vision Bancshares's future, and that this plan can
be a valuable incentive for employees. This plan will also be
submitted to a vote at Vision Bancshares' first shareholders meeting.
The form of the Employee Stock Purchase Plan was filed as an
exhibit to the registration statement of which this prospectus is
a part. The following discussion outlines some of the essential
features of the plan, but is qualified in its entirety by
reference to the full text of the plan.
Generally, all active full-time employees of Vision Bank are
eligible to participate in the Employee Stock Purchase Plan. No
employee may be permitted to subscribe for shares if immediately
after subscribing he or she would own shares (including those
which may be purchased under outstanding subscriptions under the
Employee Stock Purchase Plan) representing 5% or more of the
total combined voting power or value of all classes of stock of
Vision Bancshares.
Employees will have the opportunity to subscribe to purchase
shares at a series of offerings occurring at six-month intervals.
Offering periods will be for 15 days. The total number of shares
available under all offerings on a cumulative basis is 7,500. To
subscribe to purchase shares, an employee must sign a
subscription agreement specifying the number of shares he or she
will purchase. During an offering period, an employee may
subscribe for a minimum of 10 shares and a maximum of 50. An
employee may subscribe to purchase stock in more than one
offering period.
The purchase price of a share must not be less than 85% of
the fair market value of the shares on the date offered.
No employee may subscribe to purchase shares under the
Employee Stock Purchase Plan if doing so would permit his or her
rights to purchase shares under all stock purchase plans of
Vision Bancshares to accrue at a rate which exceeds $25,000 of
the fair market value of such shares (determined at the time such
right to subscribe is granted) for each calendar year in which
such right to subscribe is outstanding at any time. Pursuant to
this limitation, Mr. Sizemore will not be eligible to participate
in the Employee Stock Purchase Plan.
Each employee who subscribes to purchase shares during an
offering period must sign an authorization for payroll deductions
by Vision Bank to pay the purchase price of the subscribed
shares. Payment will be made in equal regular installments, at
least monthly, over a period of 12 calendar months.
Employees will not have voting or other rights of
shareholders with respect to any shares covered by subscription
agreements until the date the full purchase price of all shares
covered by such subscription agreement has been paid.
Director Stock Plan
The board of directors of Vision Bancshares has adopted a
Director Stock Plan. This plan permits stock options to be
granted to directors and permits directors to receive director
fees in stock in lieu of cash.
The following discussion outlines some of the essential
features the plan which is included as an exhibit to the
registration statement of which this prospectus is a part.
The plan will be administered by the compensation committee
of the board, which has the exclusive right, subject to the
provisions of the plan, to interpret its provisions and to
prescribe, amend and rescind rules and regulations for its
administration.
Vision Bancshares has reserved a total of 70,000 shares of
common stock for issue under the plan and plans to issue options
to each non-employee director in the amount of 5,000 shares each.
J. Daniel Sizemore, as a full-time employee, will not receive
options under this plan because he has received options under the
Vision Bancshares Incentive Stock Compensation Plan described
above.
No option may be exercised more than ten years after it is
granted. Subject to the foregoing limitation, an option becomes
exercisable any time after it is granted, unless it is subject to
vesting requirements at the time of grant. The exercise price
for each option shall be the fair market value of the option on
the date of grant.
Under the plan, members of the board of directors may elect
to receive shares of common stock as restricted stock in lieu of
receiving cash director fees at an amount equal to the cash fees
that would be due to be paid divided by 75 percent of the fair
market value of the common stock.
The plan also provides that notwithstanding any other
provision in the plan or any agreement under the plan, Vision
Bancshares' primary bank regulator shall at any time have the
right to require any holder of options to exercise such options
or forfeit options not exercised if Vision Bancshares' capital
falls below minimum capital required as determined by Vision
Bancshares' primary bank regulator.
Change in Control Provisions
Both the Incentive Stock Compensation Plan and the Director
Stock Plan provide that if a change in control or potential
change in control of Vision Bancshares occurs, options
outstanding that are not yet exercisable as a result of vesting
requirements may nevertheless be exercised. Also, in lieu of
exercise, Vision Bancshares has the right to pay cash to the
holder equal to the "change of control price." The change of
control price is the highest price paid or offered in a change of
control or potential change of control within the preceding 60
days. A change in control occurs when a person or entity
acquires 20 percent or more of Vision Bancshares' common stock or
when certain other events occur such as a change in two-thirds of
the board of directors that is not recommended by the incumbent
directors.
A potential change in control occurs when Vision Bancshares
enters into an agreement that would result in a change of control
or a person or entity acquires 5 percent or more of Vision
Bancshares common stock and the board of directors determines by
resolution that such acquisition constitutes a change in control.
Indemnification of Directors and Officers
The bylaws of Vision Bancshares provide that Vision
Bancshares will indemnify its and Vision Bank's officers,
directors, employees and agents to the extent permitted by the
Alabama Business Corporation Act. That Act permits a corporation
to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, against
expenses (including attorney's fees), judgments, fines and
settlements incurred by him in connection with any such suit or
proceeding. In order to receive indemnification, the person must
have acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the corporation,
and, in the case of a derivative action on behalf of the
corporation, that he not be adjudged to be liable for negligence
or misconduct.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of Vision Bancshares or Vision Bank,
pursuant to the foregoing provisions, or otherwise, Vision
Bancshares has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than payment by Vision Bancshares
of expenses incurred or paid by a director, officer or controlling
person of Vision Bancshares in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, Vision Bancshares will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL SECURITY HOLDERS
The following table shows the proposed beneficial ownership
of the shares of common stock of the directors and executive
officers of Vision Bancshares, assuming the minimum of 800,000
shares will be outstanding after completion of the offer. The
directors intend to purchase directly or indirectly an aggregate
of at least 422,700 shares at a purchase price of $10.00 per
share.
<TABLE>
<CAPTION>
Number of Shares of Percentage
Name and Address Common Stock to be Owned Ownership
<S> <C> <C>
J. Daniel Sizemore 67,500 (1) 8.08% (1)
33343 River Road
Orange Beach, AL 36561
James R. Owen, Jr. 25,000 3.125%
P.O. Box 895
Gulf Shores, AL 36547
Olen E. Crawford 50,000 6.25%
7001 Val Monte Drive
Guntersville, AL 35976
Joe C. Campbell 30,000 3.75%
110 Eagle Drive
Albertville, AL 35951
Donald W. Peak 25,000 3.125%
2401 32nd Street
Northport, AL 35476
Thomas Gray Skipper 25,000 3.125%
1452 Drewry Road
Monroeville, AL 36460
Gordon Barnhill, Jr. 25,000 3.125%
Post Office Box 644
Robertsdale, AL 36567
Daniel M. Scarbrough, M.D. 25,000 (2) 3.125%
30815 Peninsula Drive
Orange Beach, AL 36561
Patrick Willingham, CPA 25,000 (3) 3.125%
30475 Harbour Drive
Orange Beach, AL 36561
S. Millard Johnson 25,100 (4) 3.137%
P.O. Box 375
216 W. Canal Road
Gulf Shores, AL 36547
William T. Carlson, Jr. 25,100 (5) 3.137%
3038 Taralane Drive
Birmingham, AL 35216
Rick A. Phillips 30,000 3.75%
Post Office Box 3351
Gulf Shores, AL 36547
William D. Moody 30,000 3.75%
4170 Spinnaker Drive
Unit #1020-D
Gulf Shores, AL 36542
George W. Skipper, III 25,000 3.125%
307 Skipper Drive
Jackson, AL 36545
Julian Brackin 25,000 3.125%
1261 Patrick Street
Daphne, AL 36526
Nancy Jayne Jackson 0 0%
9055 Eagle Lane
Foley, AL 36535
All Directors and Officers
as a group (16 persons) 457,500 (6) 54.81%
<FN>
(1) Includes 35,000 shares subject to options to be granted to
Mr. Sizemore under the Incentive Stock Compensation Plan.
(2) Dr. Scarbrough is medical director of Community Health
Systems, a non-profit corportion, which will acquire
50,000 shares. Dr. Scarbrough disclaims any beneficial
ownership of those shares. See footnotes (4) and (5).
(3) Mr. Willingham is chairman of the board of Community Health
Sysems. Mr. Willingham disclaims any beneficial ownership
over shares to be acquired by that entity. See footnotes
(2), (4) and (5).
(4) Mr. Johnson is a director of Community Health Systems and
will own 100 shares directly. Mr. Johnson will vote 25,000
of the 50,000 shares to be owned by that entity. See
footnote (2).
(5) Mr. Carlson is a director of Community Health Systems and
will own 100 shares directly. Mr. Carlson will vote 25,000
of the 50,000 shares to be owned by that entity. See
footnote (2).
(6) Includes options referenced in footnote (1). The percentage
for the group assumes that shares subject to options have
been issued.
</FN>
</TABLE>
DESCRIPTION OF CAPITAL STOCK
The following summarizes certain provisions of Vision
Bancshares's capital stock. Additional information regarding the
capital stock is set forth in the articles of incorporation and
bylaws of Vision Bancshares that are included as exhibits to the
registration statement of which this prospectus is a part and in
the applicable provisions of the Alabama Business Corporation Act
under which Vision Bancshares is incorporated and by which its
corporate affairs will be governed.
General
The authorized capital stock of Vision Bancshares consists
of 10,000,000 shares of common stock, $1.00 par value per share,
100 shares of which are currently issued to Daniel Sizemore for
organizational purposes, and 1,000,000 shares of preferred stock,
par value $1.00 per share, none of which is outstanding. A
minimum of 800,000 and a maximum of 1,000,000 shares of common
stock are offered by this prospectus. In addition, an aggregate
of 152,500 shares of common stock are reserved for issuance under
Vision Bancshares's stock option plans and the Employee Stock
Purchase Plan.
The preferred stock may be issued from time to time as a
class without series, or if so determined by the board of
directors, either in whole or in part in one or more series. The
voting rights, and such designations, preferences and relative,
participating, optional or other special rights, if any, and the
qualifications, limitations or restrictions thereof, if any,
including, but not limited to, the dividend rights, conversion
rights, redemption rights and liquidation preferences, if any, of
any wholly unissued series of preferred stock (or of the entire
class of preferred stock if none of such shares has been issued),
the number of shares constituting any such series and the terms
and conditions of the issue thereof may be fixed by resolution of
the board of directors. The preferred stock may have a
preference over the common stock with respect to the payment of
dividends and the distribution of assets in the event of the
liquidation or winding-up of Vision Bancshares and such other
preferences as may be fixed by the board of directors.
Voting
Holders of the shares are entitled to one vote per share on
all matters to be voted upon by shareholders. Vision
Bancshares's articles of incorporation provide that directors are
elected for three year terms. The holders of the shares of
common stock do not have cumulative voting rights, which means
that the holders of more than one-half of the outstanding shares
can elect all of the directors.
Shareholders may call special meetings of shareholders if
they own 10 percent or more of the outstanding shares of common
stock of Vision Bancshares. Shareholders may take action without
a shareholder meeting only by a written consent signed by all
shareholders entitled to vote on the subject matter at a
shareholder meeting.
The board of directors may increase or decrease by 30
percent or less the number of directors last elected by
shareholders and may fill any vacancies so created. Increases or
decreases in the number of directors by more than 30 percent may
only be made by shareholders, with shareholders filling any
vacancies as a result of such increase.
Dividends
Shareholders may receive dividends when and if declared by
the board of directors in accordance with applicable law. See
"Dividend Policy."
Other Rights
Holders of shares of common stock are entitled to share
ratably in the assets of Vision Bancshares legally available for
distribution to its shareholders in the event of liquidation,
dissolution or winding up of Vision Bancshares. Shareholders
have no preemptive, subscription, redemption or conversion
rights. All outstanding shares of common stock and the shares to
be issued in this offering will be, upon payment therefor and
issuance, fully paid and non-assessable.
Possible Issuance of Shares - Certain Anti-Takeover Effects
Under Vision Bancshares's articles of incorporation, and
after reserving for the maximum of 1,000,000 shares that could be
issued in the offer and 152,500 shares that may be issued under
benefit plans, the board of directors may issue up to an
additional 8,847,500 shares of Vision Bancshares's common stock
without further approval or authorization of the shareholders. It
is possible that additional shares could be issued in the future
and that such issuance could cause dilution in the value of
shares then outstanding. The existence of authorized shares
could enable the board of directors to issue shares to persons
friendly to current management, which could render more difficult
or discourage any attempt to gain control of Vision Bancshares by
a proxy contest, tender offer, merger or other means that is not
favored by management.
The authority of the board of directors to issue preferred
stock with such rights and privileges, including voting rights,
as it may deem appropriate could also enable the board to deter
or prevent a change in control despite a shift in the ownership
of the common stock.
Because directors are elected for three year terms, with
approximately one-third of the board elected each year, two
elections will be required to change a majority of the members of
the board. This method could delay, or make more difficult, a
change in the board or in control of Vision Bancshares.
Directors may only be removed by shareholders for cause.
MARKETABILITY OF SECURITIES
Although the 1,000,000 shares offered by this prospectus
will be registered under applicable state and federal securities
laws, we do not expect that a public trading market, or public
price quotations of the shares, will develop. Investors should
expect to hold their shares for an indefinite period of time.
After the offering, Vision Bancshares will have reserved
152,500 shares of common stock for issuance under its stock
plans. No holders of shares of common stock or options have the
right to require that Vision Bancshares undertake the
registration of their shares or to include their shares in any
registration statement undertaken by Vision Bancshares.
The shares sold in the offering will be freely tradeable
without restriction under the Securities Act of 1933, unless the
shares are held by persons deemed to be "affiliates" of Vision
Bancshares. An affiliate of an issuer is defined in Rule 144
under the Securities Act as a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by,
or is under common control with the issuer. Rule 405 under the
Securities Act defines the term "control" to mean the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of the person whether through the
ownership of voting securities, by contract or otherwise. All
directors of Vision Bancshares will be deemed to be affiliates.
The 457,500 shares of common stock held by affiliates will be
subject to restrictions on resale contained in the provisions of
Rule 144.
In general, under Rule 144, persons who are affiliates of
Vision Bancshares will be entitled to sell within any 90-day
period that number of shares which does not exceed the greater of
1% of the then outstanding shares or the average weekly trading
volume of the shares during the four calendar weeks preceding the
sale.
A condition to the use of Rule 144 is that Vision Bancshares
file public reports at the SEC or that information that would be
included in such reports be otherwise publicly available. Vision
Bancshares will file such reports for the fiscal year in which
its registration statement for the shares becomes effective, but
may not be required to file such reports for fiscal years
thereafter. Hence, Rule 144 may not be available for resales by
affiliates in the future.
DIVIDEND POLICY
We do not expect Vision Bank or Vision Bancshares to realize
a profit during its initial year of operation, and it is not
likely during the first few years that Vision Bancshares will
generate sufficient profit to justify or allow it to pay
dividends. Vision Bancshares will rely on the payment of
dividends to it by Vision Bank in order to provide funds for the
payment of dividends by it to its shareholders. In no event
during the first three years of operations can any dividends be
declared or paid by Vision Bank without the approval of the
Alabama Banking Department and the Federal Deposit Insurance
Corporation. In addition, banking regulations restrict the
payment of dividends under certain circumstances. Future
dividend policy of Vision Bancshares will be subject therefore
not only to banking regulations, but to the discretion of the
directors, and will be contingent on Vision Bank's financial
condition, capital requirements, general business conditions and
other factors. We do not expect cash dividends to be paid during
at least the first three years of operation, and all earnings
will be retained for Vision Bank's future needs.
LEGAL MATTERS
Certain legal matters regarding the shares offered hereby
will be passed upon for Vision Bancshares by Balch & Bingham,
LLP, Montgomery, Alabama.
EXPERTS
The financial statements of Vision Bancshares contained in
this prospectus have been included in reliance upon the report of
Mauldin & Jenkins LLC, Albany, Georgia, independent certified
public accountants, and upon the authority of such firm as
experts in accounting and auditing.
FINANCIAL REPORTS TO SHAREHOLDERS
Assuming the registration statement of which this prospectus
is a part becomes effective in 1999, Vision Bancshares will file
public reports with the Securities and Exchange Commission for
1999. As part of these reports, Vision Bancshares will file an
annual report on Form 10-K for the fiscal year ending December
31, 1999, which will contain audited financial statements.
Thereafter, whether Vision Bancshares will be required to file
such reports will depend upon the number of shareholders in
Vision Bancshares. If the number is less than 300 at the
beginning of any fiscal year, no reports at the Securities and
Exchange Commission will be required for that fiscal year.
Vision Bancshares will likely distribute an annual report to its
shareholders reviewing the previous year's operations, but the
report may not contain audited financial statements on Vision
Bancshares if Vision Bancshares is no longer required to file
public reports at the Securities and Exchange Commission.
<PAGE>
VISION BANCSHARES, INC.
(A Development Stage Company)
FINANCIAL REPORT
AUGUST 31, 1999
INDEX TO FINANCIAL STATEMENTS
Page
INDEPENDENT AUDITOR'S REPORT F-2
FINANCIAL STATEMENTS
Balance sheet as of August 31, 1999 F-3
Statement of loss and accumulated deficit F-4
for the period from July 16, 1999, date of
inception, to August 31, 1999
Statement of stockholder's deficit for F-5
the period from, July 16, 1999, date of
inception to August 31, 1999
Statement of cash flows for the period from F-6
July 16, 199, date of inception,
to August 31, 1999
Notes to financial statements F-7
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Vision Bancshares, Inc.
Gulfshores, Alabama
We have audited the accompanying balance sheet of Vision
Bancshares, Inc., a development stage company, as of August 31,
1999, and the related statements of loss and accumulated deficit,
stockholder's deficit and cash flows for the period from July 16,
1999, date of inception, to August 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Vision Bancshares, Inc. as of August 31, 1999, and the results of
its operations and its cash flows for the period from July 16,
1999, date of inception, to August 31, 1999, in conformity with
generally accepted accounting principles.
/s/ Mauldin & Jenkins, L.L.C.
Albany, Georgia
September 13, 1999
<PAGE>
<TABLE>
VISION BANCHSARES, INC.
(A Development Stage Company)
BALANCE SHEET
AUGUST 31, 1999
ASSETS
<S> <C>
Cash in bank $ 27,058
Other assets 24,780
$ 51,838
LIABILITIES AND STOCKHOLDER'S DEFICIT
LIABILITIES
Due to organizers $ 140,000
Other liabilities 90,000
Total liabilities 230,000
COMMITMENTS
STOCKHOLDER'S DEFICIT
Common stock, $1 par value; 10,000,000
shares authorized; 100 shares
issued and outstanding 100
Additional paid-in capital 3,558
Deficit accumulated during the development stage (181,820)
Total stockholder's deficit (178,162)
$ 51,838
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<TABLE>
VISION BANCHSARES, INC.
(A Development Stage Company)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
PERIOD FROM JULY 16, 1999, DATE OF INCEPTION,
TO AUGUST 31, 1999
<S> <C>
Income $ -
Expenses
Organizational expense 110,447
Personnel expense 57,476
Interest 2,658
Postage and telephone 2,054
Rental expense 1,933
Automobile expense 1,205
Education and training 3,551
Dues 1,300
Miscellaneous 1,196
181,820
Net loss for the period and accumulated deficit $ (181,820)
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
VISION BANCHSARES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDER'S DEFICIT
PERIOD FROM JULY 16, 1999, DATE OF INCEPTION,
TO AUGUST 31, 1999
<CAPTION>
Deficit
Accumulated
Additional During the Total
Common Stock Paid-in Development Stockholders'
Shares Par Value Capital Stage Deficit
<S> <C> <C> <C> <C> <C>
Issue of common stock 100 $ 100 $ 900 $ - $ 1,000
Imputed interest on advances from
organizer credited to capital
surplus - - 2,658 - 2,658
Net loss for the period from
July 16, 1999, date of
inception, to August 31, 1999 - - - (181,820) (181,820)
Balance, August 31, 1999 100 $ 100 $ 900 $ (181,820) $ (178,162)
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
VISION BANCSHARES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
PERIOD FROM JULY 16, 1999, DATE OF INCEPTION,
TO AUGUST 31, 1999
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (181,820)
Adjustment to reconcile net loss to net cash used in
operating activities:
Imputed interest on advances from organizer 2,658
Other prepaids and accruals, net 65,220
Net cash used in operating activities (113,942)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from advances by organizer 140,000
Proceeds from issuance of common stock 1,000
Net cash provided by financing activities 141,000
Net increase in cash 27,058
Cash at beginning of period -
Cash at end of period $ 27,058
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
VISION BANCSHARES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
Vision Bancshares, Inc. (the "Company") was organized as an Alabama
Corporation on July 16, 1999 to operate as a bank holding company
pursuant to the Federal Bank Holding Company Act of 1956, as
amended, and to purchase 100% of the issued and outstanding capital
stock of Vision Bank (the "Bank"), an association to be organized
under the laws of the State of Alabama, which will conduct a
general banking business in Gulf Shores, Alabama. The organizers
have filed an application with the State of Alabama Department of
Banking (the "ADB") to charter the proposed bank. The Company has
filed an application to become a bank holding company with the
Board of Governors of the Federal Reserve System (the "Federal
Reserve") and the ADB. Upon obtaining regulatory approval, the
Company will be a registered bank holding company subject to
regulation by the Federal Reserve and the ADB.
Activities since inception have consisted of the organizers of the
Company and the Bank engaging in organizational and preopening
activities necessary to obtain regulatory approvals and to prepare
to commence business as a financial institution.
Significant Accounting Policies
Basis of Presentation
The financial statements have been prepared on the accrual basis in
accordance with generally accepted accounting principles.
Income Taxes
The Company will be subject to Federal and state income taxes when
taxable income is generated. No income taxes have been accrued
because of operating losses incurred during the preopening period.
Fiscal Year
The Company will adopt a calendar year for both financial reporting
and tax reporting purposes.
NOTE 2. OTHER ASSETS
Other assets consist of $17,500 paid as an option on the purchase
of land on which the proposed bank will be constructed and $7,280
paid to architects for building plans. The Company intends to
lease the building to serve as the Bank's main office. The Bank's
premises will be owned by an entity owned by certain organizers of
the Company. The Company expects the amounts included in other
assets to be reimbursed by the entity which will own the building
and lease it to the Bank
NOTE 3. DUE TO ORGANIZER
Organizers have advanced $140,000 to the Company to pay for
organizational expenses and other expenditures. The advances are
noninterest bearing. In the event that the requisite approvals are
obtained and the proposed stock offering is successfully completed,
a portion of the proceeds of the offering will be used to repay the
organizer's advances, without interest, to the extent such
repayment is allowed by regulatory authorities. To the extent that
repayment is not allowed by regulatory authorities, such advances,
if any, will be considered as contributed capital.
Interest on advances from the organizer has been imputed at the
prime rate of interest, which is currently 8.25%.
NOTE 4. EMPLOYMENT AGREEMENT
The Company has entered into an employment agreement with the
proposed President and Chief Executive Officer of the Company and
Chairman and Chief Executive Officer of the Bank. The agreement has
a three year term and may be renewed daily for a continuous three
years. The agreement may only be terminated upon three years'
notice except that the agreement may be terminated by the Company
at any time for cause. The agreement provides for a base annual
salary of $120,000, with up to 30% of base salary as a bonus, a
monthly car allowance of $750, reimbursement for business travel,
country club and civic dues, and life and disability insurance.
The agreement also provides that the proposed officer will receive
options of 35,000 shares of the Company's common stock at a price
of $10 per share.
NOTE 5. YEAR 2000 ISSUES
The Company and the Bank will rely heavily upon computers for the
conduct of their business and for their information processing
systems. Industry experts have expressed concern that there may be
widespread computer malfunctions on January 1, 2000 if computers
are unable to read the new year. The Company and the Bank will
generally rely on software and hardware developed by independent
third parties to provide the information systems used by them. The
Company is currently negotiating with vendors and intends to seek
assurances from any selected third party hardware or software
systems providers that any products provided by them will be Year
2000 compliant.
The Company believes that any information systems purchased
including hardware and software products will be adequately
programmed to address the Year 2000 issue. Based on information
currently available, management believes that it will not incur
significant costs in connection with the Year 2000 issue.
Nevertheless, some of the hardware and software products that
either the Company or the Bank acquires may not be Year 2000
compliant, and one cannot predict with certainty the costs the
Company or the Bank will incur to respond to any Year 2000 issue.
NOTE 6. COMMON STOCK OFFERING
The Company plans to commence a public offering to sell a minimum
of 800,000 and a maximum of 1,000,000 shares of the Company's $1
par value common stock at a price of $10 per share. The organizers
and directors intend to purchase an aggregate of 422,500 shares of
common stock in the offering at a price of $10 per share.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
The Company is an Alabama corporation. Section 10-2B-8.50 et.
seq. of the Alabama Business Corporation Act (the "ABCA") empowers
an Alabama corporation to indemnify any person who is made a party
to any proceeding because he or she is or was a director, officer,
employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or
agent of another corporation or enterprise. A corporation may
indemnify such person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action,
suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. A corporation may, in advance of the final disposition of
any civil, criminal, administrative or investigative action, suit
or proceeding, pay the expenses (including attorneys' fees)
incurred by any officer or director in defending such action,
provided that the director or officer undertakes to repay such
amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation.
An Alabama corporation may not indemnify officers and
directors in connection with any action by or in the right of the
corporation in which the officer or director is adjudged to be
liable to the corporation, or any other action charging improper
personal benefit to the officer or director in which the officer or
director is adjudged to be liable to the corporation on the basis
that personal benefit was improperly received by him or her.
Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses (including
attorneys' fees) which he actually and reasonably incurred in
connection therewith.
The indemnification provided by statute (discussed above) is
not deemed to be exclusive of any other rights to which an officer
or director may be entitled under any corporation's bylaws,
agreement, vote or otherwise.
The Company's Articles of Incorporation provides that a
director shall not be held personally liable to the Company or its
shareholders for monetary damages for any action taken, or any
failure to take any action as a director, except this provision
shall not eliminate the liability of a director for (i) the amount
of a financial benefit received by a director to which he or she is
not entitled; (ii) an intentional infliction of harm on the Company
or the shareholders; (iii) a violation of Section 10-2B-8.33 of the
Alabama Business Corporation Act (regarding unlawful
distributions); (iv) an intentional violation of criminal law; or
(v) a breach of a director's duty of loyalty to the Company or its
shareholders. It is the intention that the directors of the
Company be protected from personal liability to the fullest extent
permitted by the Alabama Business Corporation Act as it now or
hereafter exists. If at any time in the future the Alabama
Business Corporation Act is modified to permit further or
additional limitations on the extent to which directors may be held
personally liable to the Company, the protection afforded by these
provisions in the Company's Articles of Incorporation shall be
expanded to afford the maximum protection permitted under such law.
The Company's Bylaws provide that the Company shall indemnify
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed claim, action, suit
or proceeding, whether civil, criminal, administrative or
investigative, including appeals and whether formal or informal by
reason of the fact that he is or was a director, officer, employee
or agent of the Company, or is or was serving at the request of the
Company as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, to the fullest extent authorized
by Alabama Law against all expense, liability and loss reasonably
incurred by such indemnitee in such action, suit or proceeding.
The Company's Bylaws also provide for mandatory advancement of
expenses to such indemnitees, provided certain conditions are
satisfied.
The Company's Bylaws also provide that the Company may
maintain insurance, at its expense, to protect itself and any
director, officer, employee or agent of the Company or of another
corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss.
Item 25. Other Expenses of Issuance and Distribution.
Registration fee under the Securities Act of 1933, as amended $ 2,780
Accounting fees 15,000
Legal fees 34,000
Financial Printing and EDGAR filing fees 13,200
Transfer Agent fees ------
Blue Sky Fees 5,000
Miscellaneous 1,000
Total $ 70,980
Item 26. Recent Sales of Unregistered Securities.
None.
Item 27. Exhibits and Financial Statement Schedules.
An index to Exhibits attached to this registration statement
appears at page II-7 hereof.
Item 28. Undertakings
(a) The undersigned registrant hereby undertakes that it
will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this
registration statement to:
(i) Include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
registration statement. Notwithstanding the
foregoing, any increase or decrease in volume
of securities offered (if the total dollar
value of securities offered would not exceed
that which was registered) and any deviation
from the low or high end of the estimated
maximum offering range may be reflected in the
form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no
more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act,
treat each post-effective amendment as a new
registration statement of the securities offered,
and the offering of the securities at that time to
be the initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain
unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors,
officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification
is against the public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question
whether such indemnification by it is against public
policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
[Signature Pages and Exhibits follow]
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
SB-2 and authorized this Registration Statement to be signed on its
behalf by the undersigned, in the City of Gulf Shores, State of
Alabama, on November 12, 1999.
Vision Bancshares, Inc.
By: /s/ J. Daniel Sizemore
_______________________________
J. Daniel Sizemore,
Chairman and Chief
Executive Officer
In accordance with the requirements of the Securities Act of
1933, this Registration Statement has been signed by the following
persons in the capacities indicated on November 12, 1999.
SIGNATURE TITLE
/s/ J. Daniel Sizemore Chairman and Chief Executive Officer
______________________________ Principal Financial Officer
(J. Daniel Sizemore)
______________________________ Director
(James Ryan Owen, Jr.)
/s/ Joe C. Campbell* Director
______________________________
(Joe C. Campbell)
/s/ Donald W. Peak* Director
______________________________
(Donald W. Peak)
/s/ Thomas Gray Skipper* Director
______________________________
(Thomas Gray Skipper)
/s/ Gordon Barnhill, Jr.* Director
______________________________
(Gordon Barnhill, Jr.)
/s/ Daniel W. Scarborough* Director
______________________________
(Daniel W. Scarborough, M.D.)
/s/ Patrick Willingham* Director
______________________________
(Patrick Willingham, C.P.A.)
/s/ S. Millard Johnson* Director
______________________________
(S. Millard Johnson)
______________________________ Director
(William T. Carlson, Jr.)
/s/ Rick A. Phillips* Director
______________________________
(Rick A. Phillips)
/s/ William D. Moody* Director
______________________________
(William D. Moody)
/s/ George W. Skipper, III* Director
______________________________
(George W. Skipper, III)
/s/ Julian Brackin* Director
______________________________
(Julian Brackin)
*By: /s/ J. Daniel Sizemore
_________________________
J. Daniel Sizemore
Attorney-in-Fact
November 12, 1999
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
3.1 Amended and Restated Articles of Incorporation
of Vision Bancshares, Inc.
3.2 Bylaws of Vision Bancshares, Inc., included at
Exhibit 3.2 of the original registration
statement (no. 333-88073) of which this
amendment is a part and incorporated herein by
reference.
4.1 Sections 3.03 and 3.04 and Article VI of the
Articles of Incorporation contained at Exhibit
3.1 hereof and incorporated herein by
reference and Article II and Section 2 of
Article III of the Bylaws contained at Exhibit
3.2 of the original registration statement
(no. 333-88073) of which this amendment is a
part and incorporated herein by reference.
5 Opinion of Balch & Bingham LLP as to legality
of the shares to be issued by the Company
10.1 Incentive Stock Option Plan, included at
Exhibit 10.1 of the original registration
statement (no. 333-88073) of which this
amendment is a part and incorporated herein by
reference.
10.2 Director Stock Option Plan, included at
Exhibit 10.2 of the original registration
statement (no. 333-88073) of which this
amendment is a part and incorporated herein by
reference.
10.3 Employee Stock Purchase Plan, included at
Exhibit 10.3 of the original registration
statement (no. 333-88073) of which this
amendment is a part and incorporated herein by
reference.
10.4 Form of Escrow Agreement with National Bank of
Commerce, Birmingham, Alabama.
10.5 Forms of Ground Lease and Facilities Lease
Agreements (four agreements) with Gulf Shores
Investment Group, LLC.
10.6 Subscription Agreement, included at Exhibit
10.6 of the original registration statement
(no. 333-88073) of which this amendment is a
part and incorporated herein by reference.
21 List of Subsidiaries of Vision Bancshares,
Inc.
23.1 Consent of Mauldin & Jenkins, LLC, Independent
Certified Public Accountants
23.2 Consent of Balch & Bingham (included in the
opinion in Exhibit 5)
24 Power of Attorney for Officers and Directors
included in the signature page of the original
registration statement (no. 333-88073) of
which this amendment is a part and
incorporated herein by reference.
<PAGE>
Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
VISION BANCSHARES, INC.
The undersigned, acting as incorporator under the Alabama
Business Corporation Act adopts the following Articles of
Incorporation:
ARTICLE I
Name
The name of this corporation (the "Corporation") shall be:
VISION BANCSHARES, INC.
ARTICLE II
Purposes
The nature of the business of the Corporation and its objects,
purposes and powers are:
(a) To provide financial related services and all related
activities;
(b) To manage, purchase or acquire by assignment, transfer
or otherwise, and hold, mortgage or otherwise pledge, and to sell,
exchange, transfer, deal in and in any manner dispose of, real or
personal property of any kind, class, interest, or type,
wheresoever situated, and to exercise, carry out and enjoy any
license, power, authority, concession, right or privilege which any
corporation may make or grant in connection therewith;
(c) To subscribe for, acquire, hold, sell, assign, transfer,
mortgage, pledge, or in any manner dispose of shares of stock,
bonds or other evidences of indebtedness or securities issued or
created by any other corporation of Alabama or any other state or
any foreign country and, while the owner thereof, to exercise the
rights, privileges and powers of ownership, including the rights to
vote thereon, to the same extent as a natural person may do,
subject to the limitations, if any, on such rights now or hereafter
provided by the laws of Alabama;
(d) To acquire the goodwill, rights, assets and properties,
and to undertake the whole or any part of the liabilities, of any
person, firm, association or corporation; to pay for the same in
cash, the stock or other securities of the Corporation, or
otherwise, to hold, or in any manner dispose of, the whole or any
part of the property so acquired; to conduct in any lawful manner
the whole or any part of the business so acquired; and to exercise
all the powers necessary or convenient in and about the conduct and
management of such business; and
(e) To make contracts, including guarantee and suretyship
contracts and indemnity agreements, incur liabilities, borrow
money, issue its notes, bonds and other obligations (which may be
convertible into or include the option to purchase other securities
of the Corporation), secure any of its obligations (or the
obligations of others for whom it can make guarantees, whether or
not a guarantee is made) by mortgage or pledge of or creation of
security interests in any of its property, franchises, or income,
and, without limiting the generality of the foregoing; (a) make
contracts of guarantee and suretyship and indemnity agreements that
are necessary or convenient to the conduct, promotion or attainment
of the business of the contracting Corporation, (b) make contracts
of guarantee and suretyship and indemnity agreements that are
necessary or convenient to the conduct, promotion or attainment of
the business of (i) an entity that is wholly owned, directly or
indirectly, by the contracting Corporation or (ii) a person that
owns, directly or indirectly, all of the outstanding stock of the
contracting Corporation or (iii) an entity that is wholly owned,
directly or indirectly, by a person that owns, directly or
indirectly, all of the outstanding stock of the Corporation;
(f) To lend money, invest and reinvest its funds, and
receive and hold real and personal property as security for
repayment;
(g) To be a promoter, incorporator, partner, member,
trustee, associate, or manager of any domestic or foreign
corporation, partnership, joint venture, trust or other entity;
(h) To pay pensions and establish pension plans, pension
trusts, profit sharing plans, share bonus plans, share option
plans, or other welfare, benefit or incentive plans for any or all
of its current, future or former directors, officers, employees and
agents;
(i) To make donations for the public welfare or for
charitable, scientific or educational purposes;
(j) In general, to carry on any other lawful business
whatsoever in connection with the foregoing or which is calculated,
directly or indirectly, to promote the interest of the Corporation
or to enhance the value of its properties.
The enumeration herein of the powers, objects and purposes of the
Corporation shall not be deemed to exclude or in any way limit by
inference any powers, objects or purposes which the Corporation is
empowered to exercise, whether expressly by purpose or by any of
the laws of the State of Alabama or any reasonable construction of
such laws.
ARTICLE III
Capital Stock
3.01 The total number of shares of all classes of capital
stock ("Shares") which the Corporation shall have the authority to
issue is Eleven Million (11,000,000), consisting of Ten Million
(10,000,000) shares of $1.00 par value common stock, and One
Million (1,000,000) shares of $1.00 par value preferred stock.
3.02 Distributions with respect to all classes and series
of Shares shall be made only when, as and if authorized by the
Board of Directors; provided, however, that no distribution may be
made if, after giving it effect, (i) the Corporation would not be
able to pay its debts as they become due in the usual course of
business; or (ii) the Corporation's total assets would be less than
the sum of its total liabilities.
3.03 Preferred Shares. Shares of Preferred Stock may be
issued from time to time in one or more series as may be determined
by the Board of Directors, each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative, if
made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting power
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and
restrictions of such series, including, but without limiting the
generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series,
which number may be increased or decreased (but not below
the number of shares then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and conditions
on which, dividends, if any, on Preferred Stock of such
series shall be paid, the extent of the preference or
relation, if any, of such dividends to the dividends
payable on any other class or classes or series of the
same or other classes of stock and whether such dividends
shall be cumulative or noncumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may
be redeemed;
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale
of assets, dissolution or winding-up of the Corporation;
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock
of such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock.
3.04 No Preemptive Rights. None of the shareholders of
the Corporation shall have, and each shareholder is hereby
expressly denied, any preferential or preemptive right to subscribe
for or purchase any class of shares, including treasury shares, or
other securities or obligations of the Corporation.
ARTICLE IV
Miscellaneous
In furtherance and not in limitation of the powers conferred
by law, the following provisions for the regulation of the
Corporation, its directors and shareholders are hereby established:
4.01 A director shall not be held personally liable to the
Corporation or its shareholders for monetary damages for any action
taken, or any failure to take any action as a director, except this
provision shall not eliminate the liability of a director for (i)
the amount of a financial benefit received by a director to which
he or she is not entitled; (ii) an intentional infliction of harm
on the Corporation or the shareholders; (iii) a violation of
Section 10-2B-8.33 of the Alabama Business Corporation Act; (iv) an
intentional violation of criminal law; or (v) a breach of a
director's duty of loyalty to the Corporation or its shareholders.
It is the intention that the directors of the Corporation be
protected from personal liability to the fullest extent permitted
by the Alabama Business Corporation Act as it now or hereafter
exists. If at any time in the future the Alabama Business
Corporation Act is modified to permit further or additional
limitations on the extent to which directors may be held personally
liable to the Corporation, the protection afforded by this Section
4.01 shall be expanded to afford the maximum protection permitted
under such law. Any repeal or modification of this Section 4.01 by
the shareholders of the Corporation shall be prospective only, and
shall not diminish the rights, or expand the personal liability of
a director of the Corporation with respect to any act or omission
occurring prior to the time of such repeal or modification.
4.02 The Corporation reserves the right to amend, alter,
change or repeal any provision contained in these Articles of
Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon shareholders herein are
granted subject to this reservation.
ARTICLE V
Registered Office and Agent
The location and mailing address of the Corporation's
registered office shall be 224 West 19th Avenue, Building E, Gulf
Shores, Alabama 36542 and the registered agent at such address
shall be J. Daniel Sizemore.
ARTICLE VI
Board of Directors
All of the authority of the Corporation shall be exercised by
or under the direction of the Board of Directors. For their own
government, the Directors may adopt bylaws that are not
inconsistent with the Articles or these Regulations.
The number of Directors shall be not less than six (6) persons
nor more than twenty (20) persons, as determined from time to time
by the Board of directors. Except as hereinafter provided,
Directors shall be elected at the Annual Meeting of Shareholders
and the Board of Directors shall be divided into three classes, as
nearly equal in number as possible and each of which shall have at
least two (2) Directors, which classes shall be designated as
"Class I Directors," "Class II Directors" and "Class III
Directors." At the 2000 Meeting, each Class I director shall be
elected to serve for a period of three years and until his
successor is elected or until his earlier resignation, removal from
office, or death. At the 2001 Meeting, each Class II Director
shall be elected to serve for a period of three years and until his
successor is elected or until his earlier resignation, removal from
office, or death. At the 2002 Meeting, each Class III director
shall be elected to serve for a period of three years and until his
successor is elected or until his earlier resignation removal from
office, or death. At each succeeding Annual Meeting of
Shareholders beginning in 2003, successors to the Class of
Directors whose term expires at that annual meeting shall be
elected for a three-year term and until his successor shall have
been elected and shall qualify, or until his earlier death,
resignation or removal. If the number of Directors is changed, any
increase or decrease in the number of Directors shall be
apportioned by the Board among the two classes so that the number
of directors in each class remains as nearly equal as possible;
provided, however, that no decrease in the number of Directors
shall shorten the term of any incumbent Director. A Director
elected to fill a vacancy shall hold office during the term to
which his predecessor had been elected and until his successor
shall have been elected and shall qualify, or until his earlier
death, resignation or removal. Directors may only be removed by
the shareholders for cause.
ARTICLE VII
Incorporator
The name and address of the Incorporator of the Corporation is
as follows:
Name Address
____ _______
J. Daniel Sizemore Post Office Box 1248
Gulf Shores, Alabama 36547
Dated the _____ day of October, 1999.
_________________________
J. Daniel Sizemore
Incorporator
This Instrument was prepared by:
Jenny McCain
Balch & Bingham LLP
1901 Sixth Avenue North, Suite 2600
Birmingham, Alabama 35203
(205) 251-8100
<PAGE>
Exhibit 5
November 12, 1999
Vision Bancshares, Inc.
2201 West 1st Street
Gulf Shores, Alabama 36545
Re: Registration Statement on Form SB-2, Amendment No. 1,
relating to the issuance of shares of common stock of
Vision Bancshares, Inc.
Gentlemen:
We are familiar with the proceedings taken and proposed to be
taken by Vision Bancshares, Inc., an Alabama corporation (the
"Company") in connection with the proposed public issuance by the
Company of shares of its common stock, par value of $1.00 per
share. We have also acted as counsel for the Company in connection
with the preparation and filing with the Securities and Exchange
Commission under the Securities Act of 1933, of a Registration
Statement on Form SB-2, and Amendment No. 1 thereto. In this
connection we have reviewed such documents and matters of law as we
have deemed relevant and necessary as a basis for the opinions
expressed herein.
Upon the basis of the foregoing, we are of the opinion that:
(i) The Company is a corporation duly organized and
existing under the laws of the State of Alabama;
(ii) The shares of common stock of the Company
referred to above, to the extent actually issued, will, when so
issued, be duly and validly authorized and issued and will be fully
paid and non-assessable shares of common stock of the Company;
(iii) Under the laws of the State of Alabama, no
personal liability attaches to the ownership of the shares of
common stock of the Company.
We hereby consent to the filing of this opinion as an exhibit
to the above-referenced registration statement and to the reference
to our firm in the related prospectus under the heading "Legal
Matters." In consenting to the inclusion of our opinion in the
Registration Statement, Amendment No. 1, we do not thereby admit
that we are a person whose consent is required pursuant to Section
7 of the Securities Act of 1933, as amended.
Sincerely yours,
BALCH & BINGHAM LLP
By: /s/ Michael D. Waters
_____________________
Michael D. Waters
MDW/trh
<PAGE>
Exhibit 10.4
This Escrow Agreement is entered into and effective this _____day
of ____________, 1999, by and between VISION BANCSHARES, INC. (the
"Company") and the National Bank of Commerce of Birmingham ("Escrow
Agent" or "Agent").
WITNESSETH:
WHEREAS, the Company, proposed to be known as VISION BANCSHARES,
INC., proposes to offer for sale up to 1,000,000 shares of its
$1.00 par value common stock (the "Common Stock"), which shares
shall be registered under the Securities Act of 1933, as amended.
The shares will be sold in a public offering ("Offering") at a
price of $10.00 each. The minimum subscription per subscriber is
100 shares.
WHEREAS, the Company has requested the escrow Agent to serve as the
depository for the payment of subscription proceeds ("Payments")
received by the Company from investor(s) who are subscribing to
purchase shares of Common Stock in the Company pursuant to, and in
accordance with, the terms and conditions contained in the
Company's Prospectus and Subscription Agreements thereto, dated
_____________________________________________;
WHEREAS, the Offering will terminate at March 31, 2000 ("The
Offering Period"), and, if during the Offering Period the minimum
number of shares have been subscribed to, the Offering will
terminate.
NOW THEREFORE, in consideration for the premises and understandings
contained herein, the parties agree as follows:
(1) The Company hereby appoints and designates the Escrow
Agent solely for the Purposes set forth herein and for no other
purposes. The Escrow Agent acknowledges and accepts said
appointment and designation. The Company understands that the
Escrow Agent, by accepting said appointment and designation, in no
way endorses the merits of the offering of the shares described
herein. The company agrees to notify any person acting on its
behalf that the position of Escrow Agent does not constitute such
an endorsement, and to prohibit said person from the use of the
Agent's name as an endorser for such offering. The Company further
agrees to allow the Escrow Agent to review any sales literature in
which the Agent's name appears and which is used in connection with
such offering.
(2) The Company shall deliver all payments received in
purchase of the shares (the "Subscription Funds") to the Escrow
Agent in the form in which they are received by the next business
day after their receipt by the Company. Upon receipt of payments,
the escrow agent shall deposit such funds in the escrow account.
The Company shall also deliver to the Escrow Agent completed copies
of Subscription Agreements for each subscriber, along with such
subscriber's name, address, number of shares subscribed and social
security or taxpayer identification number.
(3) Subscription Funds shall be held and disbursed by the
Escrow Agent in accordance with the terms of this Agreement.
(4) In the event any Subscription Funds are dishonored for
payment for any reason, the Escrow Agent agrees to orally notify
the Company thereof as soon as practicable and to confirm same in
writing and to return the dishonored Subscription Funds to the
company in the form in which they were delivered.
(5) Should the Company elect to accept a subscription for
less than the number of shares shown in the purchaser's
Subscription Agreement, by indicating such lesser number of shares
on the written acceptance of the Company transmitted to the escrow
Agent, the Agent shall deposit such payment in the escrow account
and then, upon separate instruction from the Company, remit within
ten (10) days after such deposit to such subscriber at the address
shown in his Subscription Agreement that amount of his Subscription
funds in excess of the amount which constitutes full payment for
the number of subscribed shares accepted by the Company as shown in
the Company's written acceptance, without interest or diminution.
Said address shall be provided by the Company to the Escrow Agent
as requested.
(6) Definitions as used herein:
(a) "Total Receipts" shall mean the sum of all
Subscription Funds delivered to the Escrow Agent pursuant
to this agreement, less (i) all Subscription Funds
returned pursuant to Paragraphs (4) and (5) hereof and
(ii) all Subscription Funds which have not been paid by
the financial institution upon which they are drawn.
(b) "Expiration Date" shall mean March 31, 2000.
(c) The Company will notify the Escrow Agent in writing
of the effective date of the Prospectus as soon as
practicable after such date has been determined.
(d) "Closing Date" shall mean the business day on which
the Company, after determining that all of the Offering
conditions have been met, selects in it sole discretion.
The Closing Date shall be confirmed to the Escrow Agent
in writing by the Company.
(e) "Escrow Release Conditions" shall mean that (i) the
Company has not cancelled the Offering, and (ii) that the
Company has received final approval from the appropriate
regulatory entity to charter the Bank as well as final
approval for deposit insurance from the FDIC.
(7) If, on or before the Expiration Date, (i) the Total
Receipts held by the Escrow Agent equal or exceed $8,000,000 and
(ii) the Escrow Release Conditions have been satisfied, the Escrow
Agent shall;
(a) No later than 2:00 PM, one day prior to Closing
Date (as that term is defined herein), deliver to the
Company all Subscription Agreements provided to the
Escrow Agent; and
(b) On the Closing Date, no later than 2:00 PM, upon
receipt of 24-hour written instructions from the Company,
remit all amounts representing Subscription Funds, plus
any profits or earnings, held by the Escrow Agent
pursuant hereto to the Company in accordance with such
instructions.
(8) If (i) the Escrow Release Conditions are not met by the
Expiration Date, or (ii) the Offering is canceled by the Company at
any time prior to the Expiration Date, then the Escrow Agent shall
promptly remit to each subscriber at the address set forth in his
Subscription Agreement an amount equal to the amount of his
Subscription Funds.
(9) Pending disposition of the Subscription Funds under this
Agreement, the Escrow Agent will invest collected Subscription
Funds, in Overnight Fed Funds.
(10) The obligations as Escrow Agent hereunder shall terminate
upon the Agent's transferring all funds held hereunder pursuant to
the terms of Paragraphs (7) or (8) herein, as applicable.
(11) The Escrow Agent shall be protected in acting upon any
written notice, request, waiver, consent, certificate, receipt,
authorization, or other paper or document which the Agent believes
to be genuine and what it purports to be.
(12) The Escrow Agent shall not be liable for anything which
the Agent may do or refrain from doing in connection with this
Escrow Agreement, except for the Agent's own willful misconduct or
gross negligence or breach of this contract.
(13) The Escrow Agent may confer with legal counsel in the
event of any dispute or questions as to the construction of any of
the provisions hereof, or the Agent's duties hereunder, and shall
incur no liability and shall be fully protected in acting in
accordance with the opinions and instructions of such counsel. Any
and all reasonable expenses and legal fees in this regard will be
paid by the Company.
The Escrow Agent may, but shall not be required to, defend
itself in any legal proceedings which may be instituted against it,
or it may, but shall not be required to, institute legal
proceedings in respect of the Escrow Funds, or any part thereof.
The Company shall indemnify and hold harmless the Escrow Agent
against the cost and expense of any such defense or action.
(14) In the event of any disagreement between the Company and
any other person resulting in adverse claims and demands being made
in connection with any Subscription Funds involved herein or
affected hereby, the Agent shall be entitled to refuse to comply
with any such claims or demands as long as such disagreement may
continue, and in so refusing, shall make no delivery or other
disposition of any Subscription Funds then held under this
Agreement, and in so doing shall be entitled to continue to refrain
from acting until (a) the right of adverse claimants shall have
been finally settled by binding arbitration or finally adjudicated
in a court of competent jurisdiction assuming and having
jurisdiction of the Subscription Funds involved herein or affected
hereby or (b) all differences shall have been adjusted by agreement
and the Agent shall have been notified in writing of such agreement
signed by the parties hereto. In the event of such disagreement
the Agent may, but need not, tender into the registry or custody of
any court of competent jurisdiction Jefferson County, Alabama all
money or property in the Agent's hands under the terms of this
Agreement, together with such legal proceedings as the Agent deems
appropriate and thereupon to be discharged from all further duties
under this Agreement. The filing of any such legal proceeding
shall not deprive the Agent of compensation earned prior to such
filing. The Escrow Agent shall have no obligation to take any
legal action in connection with this Agreement or towards its
enforcement, or to appear in, prosecute or defend any action or
legal proceeding which would or might involve the Agent in any
reasonable cost, expense, loss or liability unless indemnification
shall be furnished.
(15) The Escrow Agent may resign or the Company may terminate
this agreement for any reason, upon thirty (30) days written notice
to the counter-party. Upon the expiration of such thirty (30) day
notice period, the Escrow Agent may deliver all Subscription Funds
and Subscription Agreements in possession under this Escrow
agreement to any successor Escrow Agent appointed by the Company,
or if no successor Escrow Agent has been appointed, to any court of
competent jurisdiction. Upon either such delivery, the Escrow
Agent shall be released from any and all liability under this
Escrow Agreement. A termination under this paragraph shall in no
way change the terms of Paragraphs (14) and (16) affecting
reimbursement of reasonable expenses, indemnity and fees.
(16) All notices and communications hereunder shall be in
writing and shall be deemed to be duly given if sent by registered
or certified mail return receipt requested, to the respective
addresses set forth herein. The Escrow Agent shall not be charged
with knowledge of any fact, including but not limited to
performance or non-performance of any condition, unless the Escrow
Agent has actually received written notice thereof from the
Company or its authorized representative clearly referring to this
Escrow Agreement.
(17) The rights created by this Escrow Agreement shall inure
to the benefit of, and the obligations created hereby shall be
binding upon, the successors and assigns of the Escrow Agent and
the parties hereto. The indemnity of the Escrow Agent by the
Company shall survive the termination of this agreement.
(18) This Escrow Agreement shall be construed and enforced
according to the laws of the State of Alabama.
(19) This Escrow Agreement shall terminate and the Escrow
Agent shall be discharged of all responsibility hereunder at such
time as the Escrow Agent shall have completed all duties hereunder.
(20) This Escrow Agreement may be executed in several
counterparts, which taken together shall constitute a single
document.
(21) This Escrow Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to
the transactions described herein and supersedes all prior
agreements or understandings, written or oral, between the parties
with respect thereto.
(22) If any provision of this Escrow Agreement is declared by
a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall nevertheless continue
in full force and effect without being impaired or invalidated in
any way.
(23) The Company shall provide the Escrow Agent with its
Employer identification Number as assigned by the Internal Revenue
Service. Additionally, the Company shall complete and return to
the Escrow Agent any and all tax forms or reports required to be
maintained or obtained by the Escrow Agent.
(24) The authorized signature of the Escrow Agent hereto is
consent that a signed copy hereof may be filed with the various
regulatory authorities of the State of Alabama and with any Federal
Government agencies or regulatory authorities.
In Agreement and acceptance by National Bank of Commerce of
Birmingham of the Escrow Agreement with VISION BANCSHARES, INC.
(Company), for the purpose of organizing a financial institution to
be known as VISION BANK.
________________________________
Company
Address:
Fax:
Phone:
By: ____________________________
Authorized Signature
Title: __________________________
(Type Name and Title)
Attest: ________________________ ADDITIONAL AUTHORIZED SIGNER
Date
By:_____________________________ Name:___________________________
Additional Authorized Signature
Title: _________________________ Title:__________________________
(Type Name and Title)
(SEAL)
NATIONAL BANK OF COMMERCE OF BIRMINGHAM
Address: 1927 First Avenue North
Birmingham, AL 35203
or
P. O. Box 10686
Birmingham, AL 35202
Attest:_________________________ Fax: (205) 521-9388
Date
By:_____________________________ By:______________________________
Authorized Signature
Title:__________________________ Title: William Billingsley:
Senior Vice President
___________________________
(Type Name and Title)
<PAGE>
Exhibit 10.5
VISION GROUND LEASE
BETWEEN
VISION INVESTMENT GROUP, LLC,
an Alabama limited liability company
AND
VISION BANK,
an Alabama banking corporation
__________________________ , 1999
<PAGE>
INDEX
Section 1. Premises; Tenant Affiliate 2
Section 2. Term 2
Section 3. Rent 2
Section 4. Rent to Be Net to Landlord 2
Section 5. Use of Premises 3
Section 6. Taxes and Utility Expenses 3
Section 7. Improvements, Repairs, Additions, Replacements 4
Section 8. Requirements of Public Authority 4
Section 9. Covenant Against Liens 5
Section 10. Assignment and Subletting 5
Section 11. Indemnity 5
Section 12. Insurance 5
Section 13. Eminent Domain 6
Section 14. Utility Easements 6
Section 15. Mortgages 6
Section 16. Leasehold Mortgages 7
Section 17. Agency 7
Section 18. Quiet Enjoyment 8
Section 19. Defaults 8
Section 20. Waivers 9
Section 22. Notices 9
Section 23. Certificates 10
Section 24. Governing Law 10
Section 25. Partial Invalidity 10
Section 26. Short Form Lease/Counterparts 10
Section 27. Interpretation 11
Section 28. Brokerage 11
Section 29. No Amendment 11
Section 30. Successors 11
<PAGE>
STATE OF ALABAMA )
COUNTY OF BALDWIN )
VISION GROUND LEASE
THIS GROUND LEASE is entered into as of______________________,
1999 by and between Vision Investment Group, LLC, an Alabama
limited liability company ("Landlord") and Vision Bank, an Alabama
banking corporation ("Tenant").
W I T N E S S E T H:
In consideration of Ten Dollars ($10.00), the mutual covenants
contained herein and for other good and valuable consideration, and
intending to be legally bound hereby, Landlord and Tenant hereby
agree with each other as follows:
Section 1. Premises; Tenant Affiliate. Landlord hereby
leases to Tenant, and Tenant hereby leases from Landlord, subject
to the provisions hereof, the unimproved land at 2201 West 1st
Avenue, Gulf Shores, Alabama (the "Premises"). All rights and
obligations of Tenant hereunder may be enjoyed, exercised or
performed by Tenant and/or any one or more Tenant Affiliates.
"Tenant Affiliate" shall mean any entity controlling, controlled
by, or under common control with, Tenant.
Section 2. Term.
The term of this Lease shall be for the period of ninety-nine
(99) years beginning on the date hereof (the "Commencement Date"),
unless sooner terminated as herein provided. This lease may be
terminated by the Tenant at any time, provided that no such
termination shall relieve any party of any obligation accruing
prior to such termination.
In order to be effective, any notice of termination (i) must
be in writing, (ii) must specifically refer to this Lease and state
that the Tenant has elected to terminate this Lease, (iii) must
specifically state the date when this Lease will end, and (iv) must
be signed by two (2) Authorized Representatives of the Tenant (as
specified in Section 22).
Section 3. Rent. Tenant shall pay Landlord for the
Premises per annum rent equal to the sum of $2,640 per month during
the term of this Lease.
Section 4. Rent to Be Net to Landlord. The rent payable
hereunder shall be net to Landlord, so that this Lease shall yield
to Landlord the net annual rent specified herein during the term of
this Lease without deduction for ad valorem taxes, utilities,
insurance of Tenant and improvements, repairs and maintenance of
the Premises and other public assessments levied against real
property generally.
Section 5. Use of Premises. During the term hereof, the
Premises may be used by Tenant for any purposes lawful to its
business.
Section 6. Taxes and Utility Expenses.
(a) (1) During the term of this Lease, Tenant shall
discharge punctually, when due, all taxes, assessments and all
other governmental charges (herein referred to as "Taxes") which
during the term of this Lease shall become payable, with respect to
the Premises or any part thereof, or any buildings, appurtenances,
or equipment owned or leased by Tenant thereon or therein or any
part thereof, under or by virtue of all present or future laws,
ordinances, or regulations of any governmental authority whatsoever
("Applicable Law"), together with all interest and penalties
thereon (all of which shall also be included in the term "Taxes" as
heretofore defined) and all charges for water, sewer, steam, heat,
gas, hot water, electricity, light and power, and other services,
furnished to the Premises or the occupants thereof (herein referred
to as "Utility Expenses").
(2) Tenant shall exhibit to Landlord satisfactory
evidence of such payment of taxes upon written demand for the same
by Landlord.
(b) All such Taxes shall be apportioned pro rata between
Landlord and Tenant as of the Rent Commencement Date and upon
termination of this Lease.
(c) Tenant or its designees shall have the right to
contest all such Taxes by legal proceedings, or in such other
manner as it may deem suitable (which, if instituted, Tenant or its
designees shall conduct at its own cost, and free of any expense to
Landlord, and, if necessary, in the name of and with the
cooperation of Landlord and Landlord shall execute all documents
necessary to accomplish the foregoing), with respect to which
Tenant shall defend and hold Landlord harmless from any liability
arising therefrom. Notwithstanding the foregoing, Tenant promptly
shall pay all such Taxes if at any time the Premises or any part
thereof shall then immediately be subject to forfeiture, or if
Landlord shall be subject to any criminal liability arising out of
the nonpayment thereof.
(d) Any refunds or rebates on account of the Taxes paid by
Tenant under the provisions of this Lease shall belong to Tenant,
or if received by Landlord, held in trust and paid to Tenant
forthwith.
(e) Except as specifically set forth herein, nothing
herein shall require or be construed to require Tenant to pay any
transfer, franchise, income, profit, excise or other taxes that are
or may be imposed upon Landlord, its successors or assigns.
Section 7. Improvements, Repairs, Additions, Replacements.
(a) Tenant shall have the right, at its own cost and
expense, to install on any part or all of the Premises, at any time
and from time to time, temporary building structures for banking
purposes, provided, however, that Landlord may designate areas of
the Premises which shall be reserved to Landlord's control for
purposes of building construction.
(b) Except as expressly provided herein, Landlord shall
not be required to furnish any services or facilities or to make
any improvements, repairs, or alterations in or to the Premises
during the term of this Lease.
(c) Until the expiration or sooner termination of this
Lease, all buildings and improvements situated or erected on the
Premises and the fixtures, building and other equipment and other
items installed thereon and any alteration, change or addition
thereto shall remain personal property and title thereto shall
remain solely in Tenant. Tenant alone shall be entitled to deduct
all depreciation and other tax items on Tenant's income tax returns
for any such buildings, building and other equipment, other
improvements and other items, including all additions, changes, or
alterations.
(d) Unless Tenant has purchased the Premises, on the last
day or sooner termination of the term of this Lease, Tenant shall
quit and surrender the Premises, and the permanent improvements
then thereon, but Tenant shall have the right to remove all other
items of property from the Premises, including without limitation,
all temporary buildings, and all fixtures, equipment and systems.
It is understood and agreed that nothing herein shall be construed
as giving Tenant a right or option to purchase the Premises.
Section 8. Requirements of Public Authority.
(a) During the term of this Lease, Tenant shall, at its
own cost, observe and comply with all Applicable Laws affecting the
Premises.
(b) Tenant shall have the right to contest by appropriate
legal proceedings in the name of the Tenant or, if legally
required, Landlord, or both, without cost to Landlord, the validity
or application of any Applicable Law, and, if by the terms of any
such Applicable Law, compliance therewith legally may be delayed
pending the prosecution of any such proceeding, Tenant may delay
such compliance therewith until the final determination of such
proceeding.
(c) Landlord agrees to execute and deliver any appropriate
papers or other instruments which may be necessary or proper to
permit Tenant so to contest the validity or application of any such
Applicable Law and to fully cooperate with Tenant in such contest.
Tenant shall indemnify and hold Landlord harmless from any
liability arising out of such documents executed pursuant to the
request of Tenant.
Section 9. Covenant Against Liens. If, because of any act
or omission of Tenant, any mechanic's lien or other lien for the
payment of money shall be filed against any portion of the
Premises, within ninety (90) days after written notice from
Landlord to Tenant of the filing thereof, Tenant shall, at its own
cost, (i) cause the same to be discharged of record, or (ii) cause
the same to be bonded, or (iii) provide Landlord with an owner's
title policy insuring over such lien, or (iv) escrow funds
sufficient to pay the lien pending the outcome of the proceedings
related thereto. In addition, Tenant shall indemnify and save
harmless Landlord against and from all costs, liabilities, suits,
penalties, claims, and demands, including reasonable counsel fees,
resulting therefrom.
Section 10. Assignment and Subletting. Except as
otherwise provided in this Section 10, Tenant may assign, sublease,
mortgage, or otherwise encumber this Lease and its rights and
interests herein or hereunder (in whole or in part or parts) and
may permit its subtenants likewise to do so, without requiring
Landlord's consent therefor. Tenant agrees to furnish to Landlord
written notice of the assignment of this Lease within thirty (30)
days thereafter, together with the name and address of the
assignee. Upon any assignment of this Lease Tenant shall be deemed
released from any and all obligations under this Lease to the
extent such obligations are assumed by the assignee.
Section 11. Indemnity. At all times prior to the time
that full and exclusive possession of the Premises is delivered to
Tenant, (i) Tenant shall indemnify and save harmless Landlord from
and against any and all liability, damage, penalties or judgments
arising from injury or death to persons or damage to property
sustained by anyone on and about the Premises resulting from any
act or acts or omission or omissions of Tenant, or Tenant's
officers, agents, servants, employees, contractors, or sublessees;
and (ii) Landlord shall indemnify and save harmless Tenant from and
against any and all liability, damage, penalties or judgments
arising from injury or death to persons or damage to property
sustained by anyone on and about the Premises resulting from any
act or acts or omission or omissions of Landlord, or Landlord's
officers, agents, servants, employees, or contractors.
Section 12. Insurance. Landlord shall not be required to
maintain any insurance on any of the improvements. To the extent
Tenant desires, Tenant may keep the buildings and improvements
erected by Tenant on the Premises at any time insured for the
benefit of Tenant against loss or damage by fire and customary
extended coverage. Tenant shall be entitled to hold all such
policies or certificates thereof. All proceeds payable at any time
and from time to time by any insurance company under such policies
shall be payable to Tenant. Landlord shall not be entitled to, and
shall have no interest in, proceeds of any such insurance or any
part thereof. Landlord shall, at Tenant's cost, cooperate fully
with Tenant in order to obtain the largest appropriate recovery and
execute any and all consents and other instruments and take all
other actions necessary or desirable in order to effectuate the
same and to cause such proceeds to be paid. Tenant shall indemnify
and hold Landlord harmless from any liability arising out of such
consents given or actions taken at the request of Tenant.
Section 13. Eminent Domain.
(a) If the whole or any material part of the Premises
shall be taken for any public or quasi-public use under any statute
or by right of eminent domain or by private purchase in lieu
thereof, then, at the option of Tenant, this Lease shall terminate
and Tenant shall be entitled to all proceeds thereof.
(b) In the event that less than a material part of the
Premises shall be taken, the Lease shall continue, and Tenant shall
be entitled to all of the award.
(c) The parties hereto agree to cooperate in applying for
and in prosecuting any claim for such taking.
Section 14. Utility Easements. Tenant shall have the
right to enter into agreements with utility providers creating
easements in favor of such parties in order to service Tenant and
any subtenants of the buildings and improvements on the Premises,
and Landlord agrees to consent thereto and to execute any and all
documents and agreements, and to take all other actions, in order
to effectuate the same, all at Tenant's cost.
Section 15. Mortgages.
(a) During the term of this Lease, Landlord shall not have
the right or power to mortgage or otherwise create any security or
other lien or encumbrance upon the fee interest in the Premises, or
buildings, improvements, fixtures, equipment or other property
thereon, or any part thereof. These provisions shall not be
construed to prevent or excuse Landlord from executing and
delivering the mortgages and other agreements and documents
referred to in Section 16 in order to enable Tenant and every
successor and assign of Tenant to exercise and effectuate such
rights and powers.
(b) In the event that Tenant or any subtenant shall
mortgage its estate in the Premises, and the mortgagee or holder of
the indebtedness secured by such mortgage shall notify Landlord in
writing of the execution of such mortgage and of the name and place
for service of notice upon such mortgagee or holder of
indebtedness, then and in such event Landlord hereby agrees for the
benefit of such mortgagee or holder of indebtedness from time to
time:
(a) That Landlord shall give to any such mortgagee or
holder of indebtedness, simultaneously with service
upon Tenant, a duplicate of any and all notices or
demands given by Landlord to Tenant from time to
time.
(b) That such mortgagee or holder of indebtedness shall
have the privilege of performing any of the
Tenant's covenants hereunder or of curing any
defaults by Tenant hereunder.
(c) That, no right, privilege or option to cancel or
terminate this lease, which is available to Tenant
shall be deemed to have been exercised effectively
unless joined in by any such mortgagee or holder of
the indebtedness.
(d) Should this lease be terminated at any time for any
reason prior to its normal expiration date, then
and in that event such mortgagee or subsequent
holder of the indebtedness acceptable to Landlord
shall have an irrevocable option for a period of
sixty (60) days from the effective date of such
termination in which to enter into a new lease
agreement, as Tenant, with Landlord for the
remainder of the rental term hereunder and renewal
option terms, on the same terms as the within lease
agreement.
(e) In the event such mortgagee or holder of the
indebtedness shall foreclose any such mortgage,
then the Landlord agrees to recognize the mortgagee
or such holder or other purchaser at such
foreclosure sale as the lessee hereunder for the
remainder of the rental term and renewal option
periods, on the same terms as the within lease
agreement.
Section 16. Leasehold Mortgages. Landlord hereby grants
to Tenant and every successor and assign of Tenant (including, but
not limited to, any sublessee of Tenant, but only with Tenant's
prior consent) the right, without Landlord's prior written consent,
to mortgage its interests in, to or under this Lease, or any part
or parts thereof, and otherwise to assign and/or convey all or any
part of Tenant's interest in or rights under this Lease to any
lenders as collateral for loans.
Section 17. Agency. In addition to any other rights that
Tenant may have pursuant to this Lease, if Landlord fails to
execute, acknowledge, and deliver any instrument required of
Landlord to effectuate the provisions of this Lease, Tenant shall
be entitled to specific performance of such obligations.
Section 18. Quiet Enjoyment.
(a) Landlord covenants that Tenant, upon observing and
keeping the covenants, and conditions of this Lease on its part to
be kept, shall have undisturbed use and enjoyment of the Premises
during the term of this Lease.
(b) Landlord represents and warrants to Tenant that it has
fee simple title to the Premises and the power and authority to
execute and deliver this Lease and to carry out and perform all
covenants to be performed by it hereunder. Landlord further
represents and warrants to and covenants with Tenant:
(1) That the Premises is free from all encumbrances,
liens, defects in title, violations of law, leases, tenancies,
easements, restrictions and agreements except as set forth on
Exhibit D annexed hereto and made a part hereof.
(2) That at the time of the commencement of the term,
sole and undisturbed physical possession of the entire Premises
will be delivered to Tenant free and clear of all liens, defects in
title, encumbrances, restrictions, agreements, easements,
tenancies, and violations of law except as set forth on Exhibit D.
(3) That title to the fee of the Premises shall not
be conveyed unless Tenant shall provide its written consent on the
instrument of conveyance.
(4) That any permitted conveyance of any interest in
the Premises shall be subject to this Lease.
(5) That no party has or shall have any right to
strip or surface mine any portion of the Premises and Landlord
shall not grant, convey, assign or otherwise transfer any rights to
oil, gas, coal, sand, gravel, clay or any similar substances or
minerals in, on or under the Premises.
(6) That (i) Landlord is a validly existing limited
liability corporation under the laws of the State of Alabama; (ii)
Landlord has all necessary power and authority to execute, deliver
and perform this Lease (iii) Landlord has taken all necessary
action to authorize the execution, delivery and performance of this
Lease and (iv) Landlord is not a party to any contract, decree or
other restriction which would interfere with or prohibit the
execution, delivery and performance of any obligation under this
Lease.
Section 19. Defaults.
(a) Tenant's failure to perform any of the agreements
herein contained on Tenant's part to be performed and the
continuance of such failure without the curing of same for a period
of sixty (60) days after receipt by Tenant of notice in writing
from Landlord specifying in detail the nature of such failure, and
provided Tenant shall not cure said failure as provided in Section
19(b), shall constitute an event of default hereunder. Upon an
event of default, Landlord may, at its option, give to Tenant
written notice of its election to declare the Tenant in default
under this Lease, and Landlord shall have the rights and remedies
set forth in this Section 19. Simultaneously with the sending of
the notice to Tenant hereinabove provided for, Landlord shall send
a copy of such notice to any mortgagees of the Premises or portions
thereof that Tenant may identify in writing from time to time. The
curing of any default within the above time limits by any of the
aforesaid parties or combination thereof, shall constitute a curing
of any default hereunder with like effect as if Tenant had cured
same hereunder. Notwithstanding anything to the contrary contained
herein, in the event that any defaults of Tenant shall be cured in
any manner herein provided, such defaults shall be deemed never to
have occurred and Tenant's right hereunder shall continue
unaffected by such defaults.
(b) In the event that Landlord gives notice of a default
of such a nature that it cannot be cured within such sixty (60) day
period, such default shall not be deemed to continue so long as
Tenant, after receiving such notice, proceeds reasonably diligently
to cure the default and continues to take all steps necessary to
complete the same within a period of time which, under all
prevailing circumstances, shall be reasonable. No default shall be
deemed to continue if and so long as Tenant shall be so proceeding
to cure the same in good faith or be delayed in or prevented from
curing the same by any event beyond Tenant's reasonable control.
(c) In the event Tenant is in default under this Lease and
such default is not cured within any applicable time period, the
sole remedy of Landlord shall be to recover damages for such
default. In no event shall Landlord have the right or remedy to
terminate this Lease because of any default.
Section 20. Waivers. Failure of Landlord or Tenant to
complain of any act or omission on the part of the other party, no
matter how long the same may continue, shall not be deemed to be a
waiver by said party of any of its rights hereunder. No waiver by
Landlord or Tenant at any time, express or implied, of any breach
of any provision of this Lease shall be deemed a waiver of a breach
of any other provision of this Lease or a consent to any subsequent
breach of the same or any other provision. No acceptance by
Landlord or Tenant of any partial payment shall constitute an
accord or satisfaction, but shall only be deemed a part payment on
account.
Section 22. Notices. No notice, approval, consent, or
other communication authorized or required by this Lease shall be
effective unless same shall be in writing and sent postage prepaid
by United States registered or certified mail, return receipt
requested, directed to the other party at its address set forth
below, or such other address as either party may designate by
notice given from time to time in accordance with this Section 22.
To Landlord:
To Tenant:
with a copy to
Section 23. Certificates. Either party shall, without
charge, at any time and from time to time hereafter, within ten
(10) days after written request of the other, certify by written
instrument duly executed and acknowledged to any mortgagee, or
proposed mortgagee, or any other person or entity specified in such
request: (a) as to whether this Lease has been supplemented or
amended, and if so, the substance and manner of such supplement or
amendment; (b) as to the validity and force and effect of this
Lease, in accordance with its tenor as then constituted; (c) as to
the existence of any default thereunder; (d) as to the existence of
any offsets, counterclaims or defenses thereto on the part of such
other party; (e) as to the commencement and expiration dates of the
term of this Lease; and (f) as to any other matters as may
reasonably be so requested. Any such certificate may be relied
upon by the party requesting it and any other person or entity to
whom the same may be exhibited or delivered, and the consents of
such certificate shall be binding on the party executing same.
Section 24. Governing Law. This Lease and the performance
thereof shall be governed, interpreted, construed, and regulated by
the laws of the State of Alabama.
Section 25. Partial Invalidity. If any provision of this
Lease or the application thereof to any person or circumstance
shall, at any time or to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such provision
to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and be enforced to the
fullest extent permitted by law.
Section 26. Short Form Lease/Counterparts. The parties
will at any time, at the request of either one, promptly execute
duplicate originals of an instrument, in recordable form, which
will constitute a memorandum or short form of Lease, setting forth
a description of the Premises, the term of this Lease and any other
provisions thereof as either party may request. Either party may,
at its own expense, record this Lease or such memorandum or short
form in the public records of the county and state where the
Premises is located. This Lease may be executed in two or more
counterparts, each of which shall constitute an original, but which
taken together shall constitute one and the same instrument.
Section 27. Interpretation. Wherever herein the singular
number is used, the same shall include the plural, and the
masculine gender shall include the feminine and neuter genders, and
vice versa, as the context shall require. The section headings
used herein are for reference and convenience only, and shall not
enter into the interpretation hereof. This Lease may be executed
in several counterparts, each of which shall be an original, but
all of which shall constitute one and the same instrument. The
terms "Landlord" and "Tenant" whenever used herein shall mean only
the owner at the time of Landlord's or Tenant's interest herein,
and upon any sale or assignment of the interest of either Landlord
or Tenant herein, their respective successors in interest and/or
assigns shall, during the term of their ownership of their
respective estates herein, be deemed to be Landlord or Tenant, as
the case may be. This Lease was drafted by and negotiated by
Landlord and Tenant jointly, each of which was represented by
separate counsel. This Lease and the relationship of Landlord and
Tenant shall not be construed as a partnership or joint venture,
but shall be construed only as Landlord and Tenant.
Section 28. Brokerage. Each of Tenant and Landlord
represents and warrants to the other that it has dealt with no
broker, agent or other person in connection with this transaction
and that no broker, agent or other person brought about this
transaction, and agrees to indemnify and hold the other harmless
from and against any claims by any broker, agent or other person
claiming a commission or other form of compensation by virtue of
having dealt with it with regard to the leasing of the Premises.
Section 29. No Amendment. This agreement may not be
modified or canceled except by writing subscribed by the parties.
Section 30. Successors. Except as herein otherwise
expressly provided, the covenants, conditions and agreements
contained in this Lease shall bind and inure to the benefit of
Landlord and Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and seals the day and year first above written with the
intent that this instrument constitute and have the effect of a
sealed instrument at law.
LANDLORD
________
Witness or Attest: VISION INVESTMENT GROUP, LLC
__________________________ By:_________________________
Its:_____________________
TENANT
______
Witness or Attest: VISION BANK
__________________________ By:_________________________
Its:_____________________
<PAGE>
GROUND LEASE
BETWEEN
GULF SHORES INVESTMENT GROUP, LLC,
an Alabama limited liability company
AND
VISION BANK,
an Alabama banking corporation
____________________________, 1999
<PAGE>
INDEX
Section 1. Premises; Tenant Affiliate 2
Section 2. Term 2
Section 3. Rent 2
Section 4. Rent to Be Net to Landlord 2
Section 5. Use of Premises 3
Section 6. Taxes and Utility Expenses 3
Section 7. Improvements, Repairs, Additions, Replacements 4
Section 8. Requirements of Public Authority 4
Section 9. Covenant Against Liens 5
Section 10. Assignment and Subletting 5
Section 11. Indemnity 5
Section 12. Insurance 5
Section 13. Eminent Domain 6
Section 14. Utility Easements 6
Section 15. Mortgages 6
Section 16. Leasehold Mortgages 7
Section 17. Agency 7
Section 18. Quiet Enjoyment 8
Section 19. Defaults 8
Section 20. Waivers 9
Section 22. Notices 9
Section 23. Certificates 10
Section 24. Governing Law 10
Section 25. Partial Invalidity 10
Section 26. Short Form Lease/Counterparts 10
Section 27. Interpretation 11
Section 28. Brokerage 11
Section 29. No Amendment 11
Section 30. Successors 11
<PAGE>
STATE OF ALABAMA )
COUNTY OF BALDWIN )
VISION GROUND LEASE
THIS GROUND LEASE is entered into as of ____________________,
1999 by and between Gulf Shores Investment Group, LLC, an Alabama
limited liability company ("Landlord") and Vision Bank, an Alabama
banking corporation ("Tenant").
W I T N E S S E T H:
In consideration of Ten Dollars ($10.00), the mutual covenants
contained herein and for other good and valuable consideration, and
intending to be legally bound hereby, Landlord and Tenant hereby
agree with each other as follows:
Section 1. Premises; Tenant Affiliate. Landlord hereby
leases to Tenant, and Tenant hereby leases from Landlord, subject
to the provisions hereof, the unimproved land at 25051 Canal
Street, Orange Beach, Alabama (the "Premises"). All rights and
obligations of Tenant hereunder may be enjoyed, exercised or
performed by Tenant and/or any one or more Tenant Affiliates.
"Tenant Affiliate" shall mean any entity controlling, controlled
by, or under common control with, Tenant.
Section 2. Term.
The term of this Lease shall be for the period of one (1) year
beginning on the date hereof (the "Commencement Date"), unless
sooner terminated as herein provided. This lease may be terminated
by the Tenant at any time, provided that no such termination shall
relieve any party of any obligation accruing prior to such
termination. In addition, the Tenant may extend the term of the
lease for one (1) year by providing the Landlord with written
notice thirty (30) days prior to the expiration of the original
term.
In order to be effective, any notice of termination (i) must
be in writing, (ii) must specifically refer to this Lease and state
that the Tenant has elected to terminate this Lease, (iii) must
specifically state the date when this Lease will end, and (iv) must
be signed by two (2) Authorized Representatives of the Tenant (as
specified in Section 22).
Section 3. Rent. Tenant shall pay Landlord for the
Premises per annum rent equal to the sum of $1,975 per month during
the term of this Lease.
Section 4. Rent to Be Net to Landlord. The rent payable
hereunder shall be net to Landlord, so that this Lease shall yield
to Landlord the net annual rent specified herein during the term of
this Lease without deduction for ad valorem taxes, utilities,
insurance of Tenant and improvements, repairs and maintenance of
the Premises and other public assessments levied against real
property generally.
Section 5. Use of Premises. During the term hereof, the
Premises may be used by Tenant for any purposes lawful to its
business.
Section 6. Taxes and Utility Expenses.
(a) (1) During the term of this Lease, Tenant shall
discharge punctually, when due, all taxes, assessments and all
other governmental charges (herein referred to as "Taxes") which
during the term of this Lease shall become payable, with respect to
the Premises or any part thereof, or any buildings, appurtenances,
or equipment owned or leased by Tenant thereon or therein or any
part thereof, under or by virtue of all present or future laws,
ordinances, or regulations of any governmental authority whatsoever
("Applicable Law"), together with all interest and penalties
thereon (all of which shall also be included in the term "Taxes" as
heretofore defined) and all charges for water, sewer, steam, heat,
gas, hot water, electricity, light and power, and other services,
furnished to the Premises or the occupants thereof (herein referred
to as "Utility Expenses").
(2) Tenant shall exhibit to Landlord satisfactory
evidence of such payment of taxes upon written demand for the same
by Landlord.
(b) All such Taxes shall be apportioned pro rata between
Landlord and Tenant as of the Rent Commencement Date and upon
termination of this Lease.
(c) Tenant or its designees shall have the right to
contest all such Taxes by legal proceedings, or in such other
manner as it may deem suitable (which, if instituted, Tenant or its
designees shall conduct at its own cost, and free of any expense to
Landlord, and, if necessary, in the name of and with the
cooperation of Landlord and Landlord shall execute all documents
necessary to accomplish the foregoing), with respect to which
Tenant shall defend and hold Landlord harmless from any liability
arising therefrom. Notwithstanding the foregoing, Tenant promptly
shall pay all such Taxes if at any time the Premises or any part
thereof shall then immediately be subject to forfeiture, or if
Landlord shall be subject to any criminal liability arising out of
the nonpayment thereof.
(d) Any refunds or rebates on account of the Taxes paid by
Tenant under the provisions of this Lease shall belong to Tenant,
or if received by Landlord, held in trust and paid to Tenant
forthwith.
(e) Except as specifically set forth herein, nothing
herein shall require or be construed to require Tenant to pay any
transfer, franchise, income, profit, excise or other taxes that are
or may be imposed upon Landlord, its successors or assigns.
Section 7. Improvements, Repairs, Additions, Replacements.
(a) Tenant shall have the right, at its own cost and
expense, to install on any part or all of the Premises, at any time
and from time to time, temporary building structures for banking
purposes, provided, however, that Landlord may designate areas of
the Premises which shall be reserved to Landlord's control for
purposes of building construction.
(b) Except as expressly provided herein, Landlord shall
not be required to furnish any services or facilities or to make
any improvements, repairs, or alterations in or to the Premises
during the term of this Lease.
(c) Unless Tenant has purchased the Premises, on the last
day or sooner termination of the term of this Lease, Tenant shall
quit and surrender the Premises, and the permanent improvements
then thereon, but Tenant shall have the right to remove all other
items of property from the Premises, including without limitation,
all temporary buildings, and all fixtures, equipment and systems
installed by Tenant at Tenant's expense. It is understood and
agreed that nothing herein shall be construed as giving Tenant a
right or option to purchase the Premises.
Section 8. Requirements of Public Authority.
(a) During the term of this Lease, Tenant shall, at its
own cost, observe and comply with all Applicable Laws affecting the
Premises.
(b) Tenant shall have the right to contest by appropriate
legal proceedings in the name of the Tenant or, if legally
required, Landlord, or both, without cost to Landlord, the validity
or application of any Applicable Law, and, if by the terms of any
such Applicable Law, compliance therewith legally may be delayed
pending the prosecution of any such proceeding, Tenant may delay
such compliance therewith until the final determination of such
proceeding.
(c) Landlord agrees to execute and deliver any appropriate
papers or other instruments which may be necessary or proper to
permit Tenant so to contest the validity or application of any such
Applicable Law and to fully cooperate with Tenant in such contest.
Tenant shall indemnify and hold Landlord harmless from any
liability arising out of such documents executed pursuant to the
request of Tenant.
Section 9. Covenant Against Liens. If, because of any act
or omission of Tenant, any mechanic's lien or other lien for the
payment of money shall be filed against any portion of the
Premises, within ninety (90) days after written notice from
Landlord to Tenant of the filing thereof, Tenant shall, at its own
cost, (i) cause the same to be discharged of record, or (ii) cause
the same to be bonded, or (iii) provide Landlord with an owner's
title policy insuring over such lien, or (iv) escrow funds
sufficient to pay the lien pending the outcome of the proceedings
related thereto. In addition, Tenant shall indemnify and save
harmless Landlord against and from all costs, liabilities, suits,
penalties, claims, and demands, including reasonable counsel fees,
resulting therefrom.
Section 10. Assignment and Subletting. Except as
otherwise provided in this Section 10, Tenant may assign, sublease,
mortgage, or otherwise encumber this Lease and its rights and
interests herein or hereunder (in whole or in part or parts) and
may permit its subtenants likewise to do so, without requiring
Landlord's consent therefor. Tenant agrees to furnish to Landlord
written notice of the assignment of this Lease within thirty (30)
days thereafter, together with the name and address of the
assignee. Upon any assignment of this Lease Tenant shall be deemed
released from any and all obligations under this Lease to the
extent such obligations are assumed by the assignee.
Section 11. Indemnity. At all times prior to the time
that full and exclusive possession of the Premises is delivered to
Tenant, (i) Tenant shall indemnify and save harmless Landlord from
and against any and all liability, damage, penalties or judgments
arising from injury or death to persons or damage to property
sustained by anyone on and about the Premises resulting from any
act or acts or omission or omissions of Tenant, or Tenant's
officers, agents, servants, employees, contractors, or sublessees;
and (ii) Landlord shall indemnify and save harmless Tenant from and
against any and all liability, damage, penalties or judgments
arising from injury or death to persons or damage to property
sustained by anyone on and about the Premises resulting from any
act or acts or omission or omissions of Landlord, or Landlord's
officers, agents, servants, employees, or contractors.
Section 12. Insurance. Landlord shall not be required to
maintain any insurance on any of the improvements. To the extent
Tenant desires, Tenant may keep the buildings and improvements
erected by Tenant on the Premises at any time insured for the
benefit of Tenant against loss or damage by fire and customary
extended coverage. Tenant shall be entitled to hold all such
policies or certificates thereof. All proceeds payable at any time
and from time to time by any insurance company under such policies
shall be payable to Tenant. Landlord shall not be entitled to, and
shall have no interest in, proceeds of any such insurance or any
part thereof. Landlord shall, at Tenant's cost, cooperate fully
with Tenant in order to obtain the largest appropriate recovery and
execute any and all consents and other instruments and take all
other actions necessary or desirable in order to effectuate the
same and to cause such proceeds to be paid. Tenant shall indemnify
and hold Landlord harmless from any liability arising out of such
consents given or actions taken at the request of Tenant.
Section 13. Eminent Domain.
(a) If the whole or any material part of the Premises
shall be taken for any public or quasi-public use under any statute
or by right of eminent domain or by private purchase in lieu
thereof, then, at the option of Tenant, this Lease shall terminate
and Tenant shall be entitled to all proceeds thereof.
(b) In the event that less than a material part of the
Premises shall be taken, the Lease shall continue, and Tenant shall
be entitled to all of the award.
(c) The parties hereto agree to cooperate in applying for
and in prosecuting any claim for such taking.
Section 14. Utility Easements. Tenant shall have the
right to enter into agreements with utility providers creating
easements in favor of such parties in order to service Tenant and
any subtenants of the buildings and improvements on the Premises,
and Landlord agrees to consent thereto and to execute any and all
documents and agreements, and to take all other actions, in order
to effectuate the same, all at Tenant's cost.
Section 15. Mortgages.
(a) During the term of this Lease, Landlord shall not have
the right or power to mortgage or otherwise create any security or
other lien or encumbrance upon the fee interest in the Premises, or
buildings, improvements, fixtures, equipment or other property
thereon, or any part thereof which would be inconsistent with the
Tenant's use of the Premises for housing a temporary bank building
and related parking.
Section 16. Leasehold Mortgages. Tenant, only with
Landlord's prior written consent, may mortgage its interests in, to
or under this Lease, or any part or parts thereof.
Section 17. Agency. In addition to any other rights that
Tenant may have pursuant to this Lease, if Landlord fails to
execute, acknowledge, and deliver any instrument required of
Landlord to effectuate the provisions of this Lease, Tenant shall
be entitled to specific performance of such obligations.
Section 18. Quiet Enjoyment.
(a) Landlord covenants that Tenant, upon observing and
keeping the covenants, and conditions of this Lease on its part to
be kept, shall have undisturbed use and enjoyment of the Premises
during the term of this Lease.
(b) Landlord represents and warrants to Tenant that it has
fee simple title to the Premises and the power and authority to
execute and deliver this Lease and to carry out and perform all
covenants to be performed by it hereunder. Landlord further
represents and warrants to and covenants with Tenant:
(1) That the Premises are free from all encumbrances,
liens, defects in title, violations of law, leases, tenancies,
easements, restrictions and agreements except as set forth on
Exhibit D annexed hereto and made a part hereof.
(2) That at the time of the commencement of the term,
sole and undisturbed physical possession of the entire Premises
will be delivered to Tenant free and clear of all liens, defects in
title, encumbrances, restrictions, agreements, easements,
tenancies, and violations of law except as set forth on Exhibit D.
(3) That title to the fee of the Premises shall not
be conveyed unless Tenant shall provide its written consent on the
instrument of conveyance.
(4) That any permitted conveyance of any interest in
the Premises shall be subject to this Lease.
(5) That no party has or shall have any right to
strip or surface mine any portion of the Premises and Landlord
shall not grant, convey, assign or otherwise transfer any rights to
oil, gas, coal, sand, gravel, clay or any similar substances or
minerals in, on or under the Premises.
(6) That (i) Landlord is a validly existing limited
liability corporation under the laws of the State of Alabama; (ii)
Landlord has all necessary power and authority to execute, deliver
and perform this Lease (iii) Landlord has taken all necessary
action to authorize the execution, delivery and performance of this
Lease and (iv) Landlord is not a party to any contract, decree or
other restriction which would interfere with or prohibit the
execution, delivery and performance of any obligation under this
Lease.
Section 19. Defaults.
(a) Tenant's failure to perform any of the agreements
herein contained on Tenant's part to be performed and the
continuance of such failure without the curing of same for a period
of thirty (30) days after receipt by Tenant of notice in writing
from Landlord specifying in detail the nature of such failure, and
provided Tenant shall not cure said failure as provided in Section
19(b), shall constitute an event of default hereunder. Upon an
event of default, Landlord may, at its option, give to Tenant
written notice of its election to declare the Tenant in default
under this Lease, and Landlord shall have the rights and remedies
set forth in this Section 19. Simultaneously with the sending of
the notice to Tenant hereinabove provided for, Landlord shall send
a copy of such notice to any mortgagees of the Premises or portions
thereof that Tenant may identify in writing from time to time. The
curing of any default within the above time limits by any of the
aforesaid parties or combination thereof, shall constitute a curing
of any default hereunder with like effect as if Tenant had cured
same hereunder. Notwithstanding anything to the contrary contained
herein, in the event that any defaults of Tenant shall be cured in
any manner herein provided, such defaults shall be deemed never to
have occurred and Tenant's right hereunder shall continue
unaffected by such defaults.
(b) In the event that Landlord gives notice of a default
of such a nature that it cannot be cured within such thirty (30)
day period, such default shall not be deemed to continue so long as
Tenant, after receiving such notice, proceeds reasonably diligently
to cure the default and continues to take all steps necessary to
complete the same within a period of time which, under all
prevailing circumstances, shall be reasonable. No default shall be
deemed to continue if and so long as Tenant shall be so proceeding
to cure the same in good faith or be delayed in or prevented from
curing the same by any event beyond Tenant's reasonable control.
(c) In the event Tenant is in default under this Lease and
such default is not cured within any applicable time period, the
Landlord shall be to recover damages for such default as well as
terminating the Lease effective immediately upon issuance of
notice.
Section 20. Waivers. Failure of Landlord or Tenant to
complain of any act or omission on the part of the other party, no
matter how long the same may continue, shall not be deemed to be a
waiver by said party of any of its rights hereunder. No waiver by
Landlord or Tenant at any time, express or implied, of any breach
of any provision of this Lease shall be deemed a waiver of a breach
of any other provision of this Lease or a consent to any subsequent
breach of the same or any other provision. No acceptance by
Landlord or Tenant of any partial payment shall constitute an
accord or satisfaction, but shall only be deemed a part payment on
account.
Section 22. Notices. No notice, approval, consent, or
other communication authorized or required by this Lease shall be
effective unless same shall be in writing and sent postage prepaid
by United States registered or certified mail, return receipt
requested, directed to the other party at its address set forth
below, or such other address as either party may designate by
notice given from time to time in accordance with this Section 22.
To Landlord:
To Tenant:
with a copy to
Section 23. Certificates. Either party shall, without
charge, at any time and from time to time hereafter, within ten
(10) days after written request of the other, certify by written
instrument duly executed and acknowledged to any mortgagee, or
proposed mortgagee, or any other person or entity specified in such
request: (a) as to whether this Lease has been supplemented or
amended, and if so, the substance and manner of such supplement or
amendment; (b) as to the validity and force and effect of this
Lease, in accordance with its tenor as then constituted; (c) as to
the existence of any default thereunder; (d) as to the existence of
any offsets, counterclaims or defenses thereto on the part of such
other party; (e) as to the commencement and expiration dates of the
term of this Lease; and (f) as to any other matters as may
reasonably be so requested. Any such certificate may be relied
upon by the party requesting it and any other person or entity to
whom the same may be exhibited or delivered, and the consents of
such certificate shall be binding on the party executing same.
Section 24. Governing Law. This Lease and the performance
thereof shall be governed, interpreted, construed, and regulated by
the laws of the State of Alabama.
Section 25. Partial Invalidity. If any provision of this
Lease or the application thereof to any person or circumstance
shall, at any time or to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such provision
to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and be enforced to the
fullest extent permitted by law.
Section 26. Short Form Lease/Counterparts. The parties
will at any time, at the request of either one, promptly execute
duplicate originals of an instrument, in recordable form, which
will constitute a memorandum or short form of Lease, setting forth
a description of the Premises, the term of this Lease and any other
provisions thereof as either party may request. Either party may,
at its own expense, record this Lease or such memorandum or short
form in the public records of the county and state where the
Premises is located. This Lease may be executed in two or more
counterparts, each of which shall constitute an original, but which
taken together shall constitute one and the same instrument.
Section 27. Interpretation. Wherever herein the singular
number is used, the same shall include the plural, and the
masculine gender shall include the feminine and neuter genders, and
vice versa, as the context shall require. The section headings
used herein are for reference and convenience only, and shall not
enter into the interpretation hereof. This Lease may be executed
in several counterparts, each of which shall be an original, but
all of which shall constitute one and the same instrument. The
terms "Landlord" and "Tenant" whenever used herein shall mean only
the owner at the time of Landlord's or Tenant's interest herein,
and upon any sale or assignment of the interest of either Landlord
or Tenant herein, their respective successors in interest and/or
assigns shall, during the term of their ownership of their
respective estates herein, be deemed to be Landlord or Tenant, as
the case may be. This Lease was drafted by and negotiated by
Landlord and Tenant jointly, each of which was represented by
separate counsel. This Lease and the relationship of Landlord and
Tenant shall not be construed as a partnership or joint venture,
but shall be construed only as Landlord and Tenant.
Section 28. Brokerage. Each of Tenant and Landlord
represents and warrants to the other that it has dealt with no
broker, agent or other person in connection with this transaction
and that no broker, agent or other person brought about this
transaction, and agrees to indemnify and hold the other harmless
from and against any claims by any broker, agent or other person
claiming a commission or other form of compensation by virtue of
having dealt with it with regard to the leasing of the Premises.
Section 29. No Amendment. This agreement may not be
modified or canceled except by writing subscribed by the parties.
Section 30. Successors. Except as herein otherwise
expressly provided, the covenants, conditions and agreements
contained in this Lease shall bind and inure to the benefit of
Landlord and Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and seals the day and year first above written with the
intent that this instrument constitute and have the effect of a
sealed instrument at law.
LANDLORD
________
Witness or Attest: GULF SHORES INVESTMENT GROUP, LLC
__________________________ By:_______________________________
Its:___________________________
TENANT
______
Witness or Attest: VISION BANK
__________________________ By:_______________________________
Its:___________________________
<PAGE>
Lease Agreement
for
Banking Facilities
VISION BANK
Gulf Shores, Alabama
TABLE OF CONTENTS
1. LEASED PREMISES. 1
2. LEASE TERM. 1
2.1 Continuance During Term. 1
2.2 Delay in Completion; Fault of Tenant. 1
2.3 Delay in Completion; Fault of Landlord. 1
2.4 Failure to Deliver Leased Premises;
Right to Cancel 2
2.5 Acceptance of Leased Premises. 2
2.6 Renewal Options. 2
3. USE. 2
3.1 Permitted Use. 2
3.2 Legal Use and Violation of Insurance Coverage. 2
3.3 Nuisance. 2
4. BASE RENTAL. 2
5. OPERATING COST. 3
6. OPERATING COST ADJUSTMENT. 3
7. SERVICES TO BE FURNISHED BY LANDLORD. 4
7.1 Defined Services. 4
7.2 Failure or Interruption of Defined Services. 4
7.3 Repairs by Landlord. 4
8. IMPROVEMENTS TO THE LEASED PREMISES. 4
9. GRAPHICS. 4
10. CARE OF THE LEASED PREMISES BY TENANT. 4
10.1 Condition of Leased Premises at Commencement;
Notice to Landlord. 4
10.2 No Waste; Regulated Materials. 5
11. REPAIRS AND ALTERATIONS BY TENANT. 5
11.1 Repair by Tenant. 5
11.2 Compliance with Laws; Repair by Landlord. 5
11.3 Alterations or Additions by Tenant. 5
11.4 Property of Landlord. 5
12. LAWS, REGULATIONS AND RULES. 5
12.1 Applicable Ordinances. 6
12.2 Building Rules. 6
13. ENTRY BY LANDLORD. 6
14. FURNITURE, FIXTURES AND PERSONAL PROPERTY. 6
15. TAXES ON TENANT'S PROPERTY. 6
16. ASSIGNMENT AND SUBLETTING. 6
16.1 No Assignment Without Consent. 6
16.2 Sublease. 6
16.3 Further Assignment. 7
16.4 Assigns and Sublessees. 7
16.5 Transfers by Landlord. 7
17. MECHANIC'S LIEN. 7
17.1 Tenant Not to Permit Liens. 7
17.2 Rights of Landlord; Additional Rent. 7
18. INSURANCE. 7
18.1 Landlord. 7
18.2 Tenant. 8
18.3 Insurance -- General. 8
18.4 Subrogation. 8
19. CASUALTY DAMAGE. 8
20. CONDEMNATION. 9
21. INDEMNITY. 9
21.1 Indemnification by Tenant. 9
21.2 Indemnification by Landlord. 9
21.3 No Liability. 9
22. DAMAGES FROM CERTAIN CAUSES. 10
23. EVENTS OF DEFAULT/REMEDIES 10
23.1 Events of Default by Tenant. 10
23.2 Landlord's Remedies for Tenant Default. 10
23.3 Landlord's Remedies are Cumulative. 12
23.4 Obligation to Pay Rent is Independent;
No Setoff. 12
23.5 Special Rights of Depository Institution
Supervisory Authority. 12
24. PEACEFUL ENJOYMENT. 12
24.1 Rights of Tenant. 12
24.2 Limitation. 13
25. HOLDING OVER. 13
25.1 Rental Amount. 13
25.2 No Extension of Term. 13
26. SUBORDINATION. 13
26.1 Subject to Mortgages and Certain Leases. 13
26.2 Subordination of Lease Agreement. 13
26.3 Approval of Lease Agreement by Landlord's
Mortgagee. 13
26.4 Attorney-in-Fact. 13
26.5 Estoppel Certificates; Financial Certificates. 13
26.6 Attornment. 14
26.7 Notice to Mortgagees. 14
27. ATTORNEY'S FEES. 14
28. NO IMPLIED WAIVER. 14
28.1 No Waiver. 14
28.2 Partial Payment. 14
29. PERSONAL LIABILITY. 14
30. FORCE MAJEURE. 14
31. RELATIONSHIP OF PARTIES. 15
32. MISCELLANEOUS. 15
32.1 Severability. 15
32.2 Recordation. 15
32.3 Governing Law. 15
32.4 Time of Performance. 15
32.5 Commissions. 15
32.6 Parking. 15
32.7 Effect of Delivery of this Lease Agreement. 15
32.8 Section Headings. 15
32.9 Entire Agreement. 15
32.10 Successors and Assigns. 15
32.11 Notices. 15
32.12 Gender. 16
32.13 Time of the Essence. 16
32.14 Building Name. 17
32.15 No Merger. 17
33. EXHIBITS AND SCHEDULES. 17
Exhibit A Floor Plan of Leased Premises
Schedule 1 Work Letter
<PAGE>
STATE OF ALABAMA
COUNTY OF BALDWIN
LEASE AGREEMENT
This Lease Agreement made and entered into on this the ______
day of____________________________, 1999, between GULF SHORES
INVESTMENT GROUP, LLC an Alabama limited liability company
(hereinafter called "Landlord"), and VISION BANK, an Alabama
banking corporation (hereinafter called "Tenant"). Tenant's
address for purposes hereof until commencement of the term of this
Lease Agreement shall be c/o Daniel J. Sizemore, agent for bank in
organization, P. O. Box 1248, Gulf Shores, Alabama 36547, and
thereafter shall be the Leased Premises (hereinafter defined).
W I T N E S S E T H:
1. LEASED PREMISES.
Subject to and upon the terms, provisions and conditions
hereinafter set forth, and each in consideration of the duties,
covenants and obligations of the other hereunder, Landlord does
hereby lease, demise and let to Tenant and Tenant does hereby lease
from Landlord those certain premises (the "Leased Premises") in the
building (the "Building") located at 2201 West 1st Avenue, Gulf
Shores, Alabama, such Leased Premises being approximately 8500
square feet of Rentable Area, as reflected on the floor plan of
such Leased Premises attached hereto and made a part hereof as
Exhibit A.
The Rentable Area of the Leased Premises has been estimated.
If the final design of the Leased Premises reflects Rentable Area
of the Leased Premises which is different than that specified
above, then the Rentable Area will be adjusted, upward or downward,
as may be appropriate.
2. LEASE TERM.
2.1 Continuance During Term. This Lease Agreement shall
continue in force during a period beginning on the Commencement Date
(hereafter defined) and ending on midnight on the date which is
three (3) years after the first day of the first calendar month
immediately following the calendar month in which the Commencement
Date occurs (the "Lease Term"), unless this Lease Agreement is
sooner terminated or extended to a later date under any other term
or provision of this Lease Agreement. For purposes of this Lease,
the term "Commencement Date" shall mean the earlier of (a) the date
the Leased Premises are ready for occupancy by Tenant for the
operation of its business, or (b)_________________________________,
2000. The term "ready for occupancy" shall mean the earlier of (i)
the date on which a certificate of occupancy for the Leased
Premises is issued by the city in which the Leased Premises are
located, or (ii) the date on which Landlord's architect (as defined
in the Work Letter Agreement between Landlord and Tenant attached
as Schedule 1 hereto _ the "Work Letter") issues a certificate of
substantial completion for the Leased Premises.
2.2 Delay in Completion; Fault of Tenant. If, by the
Commencement Date, the Leased Premises have not been substantially
completed pursuant to Work Letter due to omission, delay or default
by Tenant or anyone acting under or for Tenant, including but not
limited to (i) Tenant's failure timely to obtain approved plans,
or (ii) delay in delivery of materials for Tenant's Extra Work
(hereinafter defined), the obligations of Tenant under this Lease
Agreement(including without limitation, the obligation to pay
rent) shall nonetheless commence as of the Commencement Date.
2.3 Delay in Completion; Fault of Landlord. If, by the date
specified in Section 2.1, the Leased Premises are not substantially
completed due to default on the part of Landlord or for any other
cause (other than those causes set forth in Section 2.2), then
(except as provided in Section 2.4 below) as Tenant's sole remedy
for the delay in Tenant's occupancy of the Leased Premises, the
Commencement Date shall be delayed and the rent herein provided
shall not commence until the earlier of (i) actual occupancy by
Tenant, or (ii) substantial completion of the work that Landlord
has agreed to perform.
2.4 Failure to Deliver Leased Premises; Right to Cancel. If
Landlord fails to deliver the Leased Premises substantially
complete on or before _________________________________, 2000,
Tenant shall have the right to cancel this Lease Agreement by
giving Landlord notice to that effect at any time within fifteen
(15) days after such date. Except for Tenant's right to cancel as
herein provided, Landlord shall have no other liability for failure
to complete the Leased Premises or deliver possession thereof, and
in the event Tenant exercises its option to cancel, the parties
hereto shall be mutually released from all obligations under the
terms of this Lease Agreement, except the provisions of Section 22
below shall survive such cancellation.
2.5 Acceptance of Leased Premises. Subject to the provisions
of Section 2.4, Tenant agrees to accept possession of the Leased
Premises when the Leased Premises have been substantially
completed, with all facilities in operating order. If there are
any punch list items remaining to be done that will not interfere
with the conduct of Tenant's business on the Leased Premises,
Tenant will nevertheless accept delivery of possession and allow
Landlord to complete such finishing items.
2.6 Renewal Options. Provided that no Event of Default has
occurred under this Lease and is continuing, Tenant shall have an
option to renew this Lease for three additional terms of three (3)
year each on the same terms and conditions as set forth here.
{SELECTION: Rental increases to be CPI or by mutual agreement
through third party appraiser.}
3. USE.
3.1 Permitted Use. The Leased Premises are to be used and
occupied by Tenant solely for general office purposes, including
but not limited to the operation of a bank.
3.2 Legal Use and Violation of Insurance Coverage. Tenant agrees
not to occupy or use, or permit any portion of the Leased Premises
to be occupied or used for any business or purpose that is
unlawful, disreputable or deemed to be extra-hazardous. Tenant
will not keep any substance or carry on or permit any operation
which might emit offensive gas, smoke, fumes, dust, odors, waste
products or conditions into other portions of the Building, or use
any apparatus which might make undue noise or set up vibrations in
the Building. Tenant will not permit anything to be done which
would increase the fire and extended coverage insurance rate on the
Building or contents, and if there is any increase in such rates by
reason of acts of Tenant, then Tenant agrees to pay such increase
promptly upon demand therefor by Landlord.
3.3 Nuisance. Tenant agrees to conduct its business and control
its agents, employees, invitees and visitors in such manner as not
to create any nuisance, or interfere with, annoy or disturb any
other tenant or Landlord in the operation of the Building.
4. BASE RENTAL.
Tenant hereby agrees to pay a base annual rental (herein
called the "Base Rental") of $155,295 at the rate of $18.27 per
square foot of Rentable Area. The Tenant shall also pay, as
additional rent, all such other sums of money as shall become due
and payable by Tenant to Landlord under this Lease Agreement. The
Base Rental shall be due and payable in twelve (12) equal
installments of $12,941.25 on the first day of each calendar month
during the initial term and any extensions or renewals thereof, and
Tenant hereby agrees to pay such rent to Landlord monthly in
advance without demand and without any reduction, abatement,
counterclaim or setoff, at such address as may be designated by
Landlord. The "Base Rental," and any other additional rental shall
be collectively referred to as "Rent" or "rent." If the term of
this Lease Agreement as heretofore established commences on other
than the first day of a month or terminates on other than the last
day of a month, then the Rent provided for herein for such month or
months shall be prorated and the installment or installments so
prorated shall be paid in advance. All past due installments of
rent shall bear interest at the lesser of (i) the maximum rate
permitted by applicable law, or (ii) three (3) percentage points
above the Prime Rate (hereinafter defined), from the date due until
paid. The term "Prime Rate" for purposes of this Lease Agreement,
shall mean the rate as published in the Wall Street Journal on the
date or dates on which reference to the Prime Rate is being made
(or in the event no such quotation is available on such date, as
quoted on the day most immediately preceding the date of
determination on which such a quotation was available), and shall
not be subject to adjustment, but shall in no event exceed the
maximum rate provided by applicable law.
5. OPERATING COST.
"Operating Cost," as that term is used herein, shall consist
of all operating expenses of the Building not borne by Tenant
through separate billing and payment. Operating Cost shall be
computed on an accrual basis and shall consist of all costs and
expenses incurred by Landlord to maintain all facilities used in
the operation of the Building and such additional facilities now
and in the future as may be determined by Landlord to be necessary
to the Building. All operating expenses shall be determined in
accordance with generally accepted accounting principles, which
shall be consistently applied. The term "operating expenses" as
used herein shall mean all expenses and costs (but not specified
costs that are separately billed to and paid by specific tenants)
of every kind and nature that Landlord shall pay or become
obligated to pay because of or in connection with the ownership and
operation of the Building as a result of the following:
(a) Cost of repairs, replacements and general
maintenance (excluding repairs and general
maintenance paid by proceeds of insurance or by
Tenant or other third parties and not reimbursed by
Landlord, and alterations attributable solely to
tenants of the Building other than Tenant).
(b) Amortization of capital improvements made to the
Building subsequent to the Commencement Date of
this Lease Agreement that will improve the
operating efficiency or security of the Building at
the direction of tenant or that may be required by
a regulatory body having jurisdiction.
Notwithstanding any other provision herein to the contrary, it
is agreed that in the event the Building is not fully occupied
during any partial year or any full calendar year, the Operating
Cost for such period shall be the estimated amount that the
Operating Cost would have been had the Building been fully
occupied.
6. OPERATING COST ADJUSTMENT.
For each calendar year ending after the Commencement Date
during the Term of this Lease and any renewals or extensions
thereof, Tenant agrees to pay to Landlord, as an adjustment to Base
Rental, Tenant's Proportionate Share of the actual Operating Cost
for such calendar year ("Basic Cost Excess"). During each calendar
year of this Lease following the initial calendar year, and in
addition to the Base Rental, as adjusted pursuant to Section 5
hereof, Tenant shall make monthly payments equal to 1/12th of the
Basic Cost Excess determined for the previous calendar year (the
"Operating Cost Adjustment"). At the end of each such calendar
year, the total Operating Cost Adjustment paid by Tenant during
that calendar year shall be compared by Landlord to the Basic Cost
Excess for such year. If the total Operating Cost Adjustment paid
by Tenant for such calendar year is less than the amount actually
due, then Tenant shall pay the difference, as Rent, to Landlord
within ten (10) days after receipt of notice of the amount due. If
the total Operating Cost Adjustment paid by Tenant for such
calendar year is more than the amount actually due, the excess
shall, at Landlord's option, be paid to Tenant, or be credited by
Landlord against the next payment of Rent becoming due. The effect
of this reconciliation payment is that Tenant will pay its
Proportionate Share of the Basic Cost Excess and no more.
At the commencement of each calendar year, Tenant shall
continue to pay the monthly Operating Cost Adjustment based on rate
which was in effect during the previous calendar year until such
time as written notice of the revised Operating Cost Adjustment and
a statement of any additional rent due for the months already
elapsed in the new calendar year are received from Landlord. Such
notice and statement shall be provided by Landlord within a
reasonable period of time after the end of any calendar year for
which a Operating Cost Adjustment is applicable. Tenant shall
commence making payment of any such revised Operating Cost
Adjustment on the next rent due date following receipt of such
notice, and thereafter shall make monthly rent payments based on
the revised Operating Cost Adjustment until notified by Landlord of
a new revised rate as set forth above. Landlord's failure to so
notify Tenant within a reasonable period of time after the closing
of any calendar year for which additional rent is due under the
provisions of this Section shall not release Tenant from paying nor
diminish Tenant's obligation to pay such additional rent.
Tenant's "Proportionate Share", as used herein, shall be the
percentage derived by dividing the Rentable Area of the Leased
Premises by the total Rentable Area contained in the Building.
Should this Lease Agreement commence or terminate at any time other
than the first day of a calendar year, the computations set forth
in this Section shall be prorated for the partial year.
7. SERVICES TO BE FURNISHED BY LANDLORD.
7.1 Defined Services. Landlord agrees to use its best efforts
to furnish Tenant the following services (the "Defined Services"):
[NONE CONTEMPLATED]
7.2 Failure or Interruption of Defined Services. The failure
by Landlord to any extent to furnish, or the interruption or
termination of, the Defined Services, in whole or in part,
resulting from causes beyond the reasonable control of Landlord,
shall not render Landlord liable in any respect nor be construed as
an eviction (constructive or otherwise) of Tenant, nor work an
abatement of rent, nor relieve Tenant from the obligation to
fulfill any covenant or agreement of this Lease Agreement. In the
event of any such interruption or termination of any of the Defined
Services, Landlord shall use its best efforts to restore said
services.
7.3 Repairs by Landlord. Unless otherwise expressly stipulated
herein, Landlord shall not be required to make any improvements or
repairs of any kind or character on the Leased Premises during the
Term, except such repairs as may be required by normal maintenance
operations, which shall include repairs to the exterior walls,
corridors, windows, roof and other such structural elements and
equipment of the Building, and such additional maintenance as may
be necessary because of damages by persons other than Tenant, its
agents, employees, invitees or visitors. Landlord shall be
responsible for the maintenance , repair and clean-up of and water
leaks or seepage into the Building or the Premises.
8. IMPROVEMENTS TO THE LEASED PREMISES.
The Work Letter attached as Schedule 1 hereto sets forth the
Landlord's and Tenant's responsibilities with regard to the
Leasehold Improvements. Landlord agrees to provide those
improvements and allowances to Tenant as may be specified in the
Work Letter.
9. GRAPHICS.
Landlord shall provide and install, at Tenant's cost, all
letters or numerals at doors to the Leased Premises. All such
letters and numerals shall be in the standard graphics for the
Building, and no others shall be used or permitted on the Leased
Premises without Landlord's prior written consent. No signs,
symbol or identifying mark shall be put upon the Building, or in
the halls, elevators, staircases, entrances, parking areas or upon
the doors or walls, without prior written consent of Landlord.
10. CARE OF THE LEASED PREMISES BY TENANT.
10.1 Condition of Leased Premises at Commencement; Notice to
Landlord. The taking of possession of the Leased Premises by
Tenant shall be conclusive evidence as against Tenant (a) that it
accepts the Leased Premises as suitable for the purposes for which
same are leased, subject to "punch list" items to be installed or
repaired by Landlord contained in a punch list which must be
submitted, if at all, to Landlord by Tenant within ten (10) days
after the Commencement Date; (b) that it accepts the Property as
being in a good and satisfactory condition; and (c) that Tenant
waives any defects in the Leased Premises and its appurtenances and
in all other parts of the Property. Any subsequent modifications
to the Leased Premises required by governmental laws, rules or
regulations, including without limitation modifications required
under the Americans with Disabilities Act of 1990 and similar
legislation, shall be the sole responsibility of Tenant. Landlord
shall not be liable to Tenant or any of its agents, employees,
licenses, servants or invitees for any injury or damage to person
or property due to the condition or design of or any defect in the
Building or its mechanical systems and equipment which may exist or
occur, or due to the leaking of gas, water, sewer, or steam unless
such injury or damage is due to the gross negligence or willful
misconduct of Landlord (but not including the negligence or willful
misconduct of Landlord's contractors); and Tenant, with respect to
itself and its agents, employees, licensees, servants and invitees
shall have the responsibility for all risks of injury or damage to
person or property, either proximate or remote, by reason of the
condition of the Leased Premises or the Property except for injury
or damage caused by the gross negligence or willful misconduct of
Landlord. Except as specifically set forth herein, no promises of
the Landlord to alter, remodel, repair or improve the Leased
Premises or the Building and no representations respecting the
condition of the Leased Premises or the Building have been made by
Landlord to Tenant. At all times during the Lease Term, including
any extensions thereof, Tenant agrees to give Landlord prompt
notice of any apparent defective condition in or about the Leased
Premises.
10.2 No Waste; Regulated Materials. Tenant shall not commit waste
or allow any waste to be committed on any portion of the Leased
Premises, and at the termination of this Lease Agreement, Tenant
shall deliver the Leased Premises to Landlord in as good condition
as at the date of the commencement of the term of this Lease
Agreement, ordinary wear and use excepted. Tenant shall not treat,
store, handle, generate, locate on, discharge from, or dispose on
the Leased Premises or the Building any materials regulated,
controlled, limited or restricted by governmental laws, rules,
regulations or ordinances.
11. REPAIRS AND ALTERATIONS BY TENANT.
11.1 Repair by Tenant. Tenant shall, at Tenant's own cost and
expense, repair any damage done to the Building, or any part
thereof, including replacement of damaged portions or items, caused
by Tenant or Tenant's agents, guests, employees, invitees,
licensees, customers or visitors, and Tenant covenants and agrees
to make all such repairs as may be required to restore the Building
to as good a condition as it was in prior to such damage. Tenant
further agrees to maintain and keep the interior of the Leased
Premises in good repair and condition at Tenant's expense. Repair
and replacement parts, materials and equipment shall be of a
quality equivalent to those initially installed in the Building or
Leased Premises.
11.2 Compliance with Laws; Repair by Landlord. All such
work or repairs by Tenant shall be effected in compliance with all
applicable laws; provided, however, if Tenant fails to make such
repairs or replacements promptly, Landlord may, at its option, make
repairs or replacements, and Tenant shall pay to Landlord the cost
thereof, within ten (10) days of Landlord's demand therefor, as
additional rent.
11.3 Alterations or Additions by Tenant. Tenant agrees with
Landlord not to make or allow to be made any alterations to the
Leased Premises except in compliance with the provisions of this
Section.
(a) Tenant shall be entitled to make minor alterations
such as placing items on the walls of the Leased
Premises so long as once they are removed, Tenant
repairs any damage caused thereby. Any and all
such alterations, physical additions, or
improvements, when made to the Leased Premises by
Tenant, shall at once become the property of
Landlord and shall be surrendered to Landlord upon
the termination of this Lease by lapse of time or
otherwise; provided, however, this paragraph shall
not apply to movable equipment or furniture owned
by Tenant. If, however, Landlord so requests in
writing, Tenant will, immediately prior to
termination of this Lease, remove any and all
physical additions to the Leased Premises,
including partitions, and will repair any damage
caused by such removal, all at Tenant's cost.
(b) If the Tenant performs any construction work on the
Leased Premises, Tenant's work will be performed
with materials of good quality. Tenant shall not
do any construction work or alterations, nor shall
Tenant install any equipment without first
obtaining Landlord's written approval of the plans
and specifications therefor. The approval of the
Landlord of such plans and specifications shall not
constitute the assumption of any liability on the
part of the Landlord for their accuracy or their
conformity with requirements of any building code,
or other municipal or governmental regulation or
ordinance, and Tenant shall be solely responsible
for such plans. Tenant shall be responsible for all
necessary permits, governmental or otherwise, to
include special use permits, signage permits, etc.
11.4 Property of Landlord. Any and all alterations to the Leased
Premises shall become the property of Landlord upon termination of
this Lease Agreement (except for movable equipment or furniture
owned by Tenant).
12. LAWS, REGULATIONS AND RULES.
12.1 Applicable Ordinances. Tenant shall comply with all
applicable laws, ordinances, rules and regulations of any
governmental entity, agency or authority having jurisdiction over
the Leased Premises or Tenant's use of the Leased Premises.
12.2 Building Rules. Tenant shall comply with the Building Rules
adopted by Landlord and set forth in Schedule 2 hereto, as they may
be amended by Landlord from time to time ( the "Building Rules"),
and will cause all of its agents, employees, invitees and visitors
to do so. All changes to the Building Rules will be furnished by
Landlord to Tenant in writing.
13. ENTRY BY LANDLORD.
Tenant shall permit Landlord or its agents or representatives
to enter into and upon any part of the Leased Premises upon prior
notice and at all reasonable hours (and in emergencies at all
times) to inspect the condition, occupancy or use, to show the
Leased Premises to prospective purchasers, mortgagees, tenants or
insurers, or to clean or make repairs, alterations or additions.
Tenant shall not be entitled to any abatement or reduction of rent
by reason of this right of entry.
14. FURNITURE, FIXTURES AND PERSONAL PROPERTY.
Tenant may remove its trade fixtures, office supplies and
movable office furniture and equipment not attached to the Building
provided: (a) such removal is made within (30) days after the
termination of the Term of this Lease; (b) Tenant is not in default
of any obligation or covenant under this Lease at the time of such
removal at Tenant's sole cost and expense. All other property at
the Leased Premises and alterations and additions to the Leased
Premises (including wall-to-wall carpet, paneling or other wall
covering) and any other article attached or affixed to the floor,
wall or ceiling of the Leased Premises shall become the property of
Landlord and shall remain upon and be surrendered with the Leased
Premises as a part thereof at the termination of this Lease, by
lapse of time or otherwise, Tenant hereby waiving all rights to any
payment or compensation therefor. If, however, Landlord so
requests in writing, Tenant will, immediately prior to termination
of this Lease, remove any and all alterations, additions, fixtures,
equipment and property placed or installed by it in the Leased
premises, and not permanently affixed thereto, and will repair any
damage caused by such removal, all at Tenant's cost.
15. TAXES ON TENANT'S PROPERTY.
Tenant shall be liable for all taxes levied or assessed
against personal property, furniture or fixtures placed by Tenant
in the Leased Premises. If any such taxes for which Tenant is
liable are levied or assessed against Landlord or Landlord's
property and if Landlord elects to pay the same or if the assessed
value of Landlord's property is increased by inclusion of personal
property, furniture or fixtures placed by Tenant in the Leased
Premises, and Landlord elects to pay the taxes based on such
increase, then Landlord shall notify Tenant, and Tenant shall pay
to Landlord upon demand that part of such taxes for which Tenant is
liable hereunder.
16. ASSIGNMENT AND SUBLETTING.
16.1 No Assignment Without Consent. Tenant shall not assign,
sublease, transfer, pledge, or encumber this Lease Agreement or any
interest therein without Landlord's prior written consent. Any
attempted assignment, sublease or other transfer or encumbrance by
Tenant in violation of the terms and covenants of this paragraph
shall be void.
16.2 Assignment or Sublease. In the event Tenant shall desire to
assign this Lease Agreement or sublet the Leased Premises or any
part thereof, Tenant shall give Landlord written notice of such
desire, along with the name of the proposed assignee or sublessee
and a copy of the proposed assignment or sublease instrument, at
least ninety (90) days in advance of the date on which Tenant
desires to make such assignment or sublease. Landlord shall then
have a period of thirty (30) days following receipt of such notice
within which to notify Tenant in writing that Landlord elects
either (i) to permit Tenant to assign or sublet such space, (ii) to
refuse such request to assign or sublease such space (which refusal
may be made by Landlord without regard to any commercially
reasonable standard), or (iii) to terminate this Lease Agreement as
to the space so affected as of the date so specified by Tenant in
which event Tenant will be relieved of all obligations arising
thereafter as to such space. Any rent or other payments otherwise
due Tenant as a result of assignment or subletting of all or any
portion of the Leased Premises in excess of the rent due Landlord
by Tenant on such space hereunder shall be payable as additional
rent to Landlord by Tenant promptly upon receipt by Tenant, and
Tenant hereby assigns all rights it might have or ever acquire in
any such proceeds to Landlord. If Landlord should fail to notify
Tenant in writing of such election within said thirty (30) day
period, Landlord shall be deemed to have elected option (i) above.
No assignment or subletting by Tenant shall relieve Tenant of any
obligation under this Lease Agreement. Any consent of Landlord
hereunder is subject to receipt by Landlord of an executed copy of
the sublease or assignment.
16.3 Further Assignment. Notwithstanding Landlord's consent on
any one occasion, the rights of Landlord set forth in Section 16.2
shall apply to any further subletting or assignment.
16.4 Assigns and Sublessees. The provisions of this Section 16
shall be binding on any permitted assigns or sublessees of Tenant.
16.5 Transfers by Landlord. Landlord shall have the right to
transfer and assign, in whole or in part, all its rights and
obligations hereunder and in the Building and the Leased Premises
referred to herein, and in such event and upon such transfer
Landlord shall be released from any further obligations hereunder,
and Tenant agrees to look solely to such successor in interest of
Landlord for the performance of such obligations.
17. MECHANIC'S LIEN.
17.1 Tenant Not to Permit Liens. Tenant will not create or
permit to be created or to remain, and will discharge, any lien
(including, but not limited to, the liens of mechanics, laborers,
artisans or materialmen for work or materials alleged to be done,
furnished or delivered in connection with the Leased Premises),
encumbrance, or other charge upon the Leased Premises or any part
thereof, upon Landlord's interest therein, or upon Tenants
leasehold interest; provided, that Tenant shall not be required to
discharge any such liens, encumbrances or charges as may be placed
upon the Leased Premises or Building by the act of anyone other
than Tenant or Tenant's agents, employees, servants or contractors.
Provided that any Landlord's Mortgagee consents thereto in writing
and Tenant complies with all requirements of such Landlord's
Mortgagee with respect thereto and provided further, Tenant
furnishes security reasonably acceptable to Landlord and any such
Landlord's Mortgagee, Tenant shall have the right to contest, in
good faith by appropriate legal proceedings, the validity or amount
of any mechanics', laborers' , artisans' or materialmen's lien or
other claimed lien. On final determination of such lien or such
claim for lien, Tenant will immediately pay any judgement rendered
with all proper costs and charges and shall have such lien released
or judgement satisfied at Tenant's sole expense. Tenant will pay,
protect and indemnify Landlord, within ten (10) days after demand
therefor, from and against all liabilities, losses, claims,
damages, costs and expenses, including reasonable attorneys' fees,
incurred by Landlord by reasons of the filing of any lien and/or
removal of same.
17.2 Rights of Landlord; Additional Rent. If any such lien is
claimed against the Leased Premises, then, in addition to any other
right or remedy of Landlord, Landlord may, but shall not be
obligated to, discharge the same. Any amount paid by Landlord for
such purposes shall be paid by Tenant to Landlord as additional
rent within ten (10) days of Landlord's demand therefor.
18. INSURANCE.
18.1 Landlord. Landlord shall, at all times during the term of
this Lease Agreement, maintain a policy or policies of insurance,
issued by and binding upon some solvent insurance company, insuring
the Building and the Landlord's Work (as specified in the Work
Agreement) against loss or damage by fire, or other insurable
hazards and contingencies in such amount as Landlord deems
appropriate; provided that Landlord shall not be obligated to
insure any furniture, equipment, machinery, goods, supplies or
other personal property or trade fixtures that Tenant may bring or
obtain upon the Leased Premises, or any additional improvements
that Tenant may construct thereon. If the annual premiums charged
Landlord for such casualty insurance exceed the standard premium
rates because the nature of Tenant's operations result in
extra-hazardous exposure, then Tenant shall upon receipt of
appropriate premium invoices reimburse Landlord for such increases
in such premium; provided that this provision shall not be
construed so as to allow or permit, and Tenant hereby agrees not to
(i) use, or allow the use of, the Leased Premises for any hazardous
use, or (ii) allow, install, store or permit any hazardous or
regulated materials on or in the Leased Premises without in each
instance the Landlord's express written consent. Tenant shall
maintain at its expense, in an amount equal to the full replacement
cost, fire and extended coverage insurance on all of its personal
property, including removable trade fixtures, located in the Leased
Premises and in such additional amounts as are required to meet
Tenant's obligations pursuant to Section 20 hereof.
18.2 Tenant. Tenant shall, during the Term and at its sole
expense, obtain and keep in force, with Tenant, Landlord, and the
mortgagees of Landlord, named as insureds, as their respective
interests may appear, (i) comprehensive general liability insurance
coverage, personal injury, bodily injury, broad form property
damage, operations hazard, owner's protective coverage, contractual
liability and products and completed operations liability in limits
not less than $1,000,000.00 inclusive, and (ii) fire and extended
coverage insurance for Tenant's property (personal property,
fixtures and leasehold improvements in excess of Landlord's Work)
in or on the Leased Premises for the full replacement value
thereof.
18.3 Insurance -- General. All policies of insurance to be
provided or obtained by Tenant under this Lease Agreement shall (i)
name Landlord and mortgagees of Landlord as additional insureds,
and (ii) provide for notice to Landlord at least thirty (30) days
before any cancellation or termination of said insurance. Tenant
shall, upon request of Landlord, furnish Landlord with certificates
of insurance evidencing Tenant's compliance with the provisions of
this Section 19.
18.4 Subrogation. Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant each hereby waives (to the
extent that the party sustaining such loss is compensated by
insurance proceeds) any and all rights of recovery, claim, action
or cause of action, against the other, its agents, officers, or
employees, for any loss or damage that may occur to the Leased
Premises, or any improvements thereto, or the Property, or any
personal property of such party therein, by reason of fire, the
elements, or any other cause which would be insured against under
the terms of the fire and extended coverage insurance policies
referred to in Sections 18.1 and 18.2 above, regardless of cause or
origin, including negligence of the other party hereto, its agents,
officers or employees, and covenants that no insurer shall hold any
right of subrogation against such other party, and to procure a
waiver of subrogation on the part of each of their insurers by an
endorsement to all insurance policies whereby an insurer recognizes
the agreements made by the Landlord and Tenant in this Section
18.4; provided, however, this Section 189.4 shall be inapplicable
if it would have the effect, but only to the extent that it would
have the effect of invalidating any insurance coverage of Landlord
or Tenant.
19. CASUALTY DAMAGE.
If the Leased Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice
thereof to Landlord. In case the Building shall be so damaged that
the substantial alteration or reconstruction of the Building shall,
in Landlord's sole opinion, be required (whether or not the Leased
Premises shall have been damaged by such casualty) or in the event
any mortgagee of Landlord's should require that the insurance
proceeds payable as a result of a casualty be applied to the
payment of the mortgage debt or in the event of any material
uninsured loss to the Building, Landlord may, at its option,
terminate this Lease Agreement by notifying Tenant in writing of
such termination within ninety (90) days after the date of such
damage. If Landlord does not thus elect to terminate this Lease
Agreement, Landlord shall commence and proceed with reasonable
diligence to restore the Building to substantially the same
condition in which it was immediately prior to the happening of the
casualty, except that Landlord's obligation to restore shall not
exceed the scope of the work required to be done by Landlord in
originally constructing the Building and as set forth in the Work
Letter, nor shall Landlord be required to spend for such work an
amount in excess of the insurance proceeds actually received by
Landlord as a result of the casualty. When the Leased Premises
have been restored by Landlord to the extent of the Landlord's Work
set forth in the Work Letter, Tenant shall complete the restoration
of the Leased Premises, including the reconstruction of all
improvements in excess of the Landlord's Work and the restoration
of Tenant's furniture and equipment. Landlord shall not be liable
for any inconvenience or annoyance to Tenant or injury to the
business of Tenant resulting in any way from such damage or the
repair thereof, except that, subject to the provisions of the next
sentence, Landlord shall allow Tenant a fair diminution of rent
during the time and to the extent the Leased Premises are unfit for
occupancy. If the Leased Premises or any other portion of the
Building be damaged by fire or other casualty resulting from the
fault or negligence of Tenant or any of Tenant's agents, employees,
or invitees, the rent hereunder shall not be diminished during the
repair of such damage, and Tenant shall be liable to Landlord for
the cost of the repair and restoration of the Building and the
Leased Premises caused thereby to the extent such cost and expense
is not covered by insurance proceeds under policies provided by
either Landlord or Tenant hereunder. If Landlord has elected to
repair and reconstruct the Leased Premises, then the Term shall be
extended by a period of time equal to the period of such repair and
reconstruction.
20. CONDEMNATION.
If the whole or substantially the whole of the Building or the
Leased Premises should be taken for any public or quasi-public use,
by right of eminent domain or otherwise or should be sold in lieu
of condemnation, then this Lease Agreement shall terminate as of
the date when physical possession of the Building or the Leased
Premises is taken by the condemning authority. If less than the
whole or substantially the whole of the Building or the Leased
Premises is thus taken or sold, Landlord (whether or not the Leased
Premises are affected thereby) may terminate this Lease Agreement
by giving written notice thereof to Tenant, in which event this
Lease Agreement shall terminate as of the date when physical
possession of such portion of the Building or Leased Premises is
taken by the condemning authority. If this Lease Agreement is not
so terminated upon any such partial taking or sale, the rent
payable hereunder shall be diminished by an equitable amount based
on the portion of the Leased Premises taken, if any, and Landlord
shall, to the extent Landlord deems feasible, restore the Building
and the Leased Premises to substantially their former condition,
but such work shall not exceed the scope of the work done by
Landlord in originally constructing the Building and as set forth
in the Work Letter, nor shall Landlord in any event be required to
spend for such work an amount in excess of the amount received by
Landlord as compensation for such damage. All amounts awarded upon
a taking of any part or all of the Building or the Leased Premises
shall belong to Landlord, and Tenant shall not be entitled to and
expressly waives all claim to any such compensation, including any
award or ascertainment for the value of Tenant's leasehold estate,
which value is hereby assigned to the Landlord. If this Lease
should be terminated under any provision of this Section 21, Rent
shall be payable up to the date that possession is taken by the
taking authority, and Landlord will refund to Tenant any prepaid,
unaccrued Rent less any sum then owing by Tenant to Landlord.
21. INDEMNITY.
21.1 Indemnification by Tenant. Tenant will indemnify Landlord
for, and hold harmless Landlord from and against (a) all fines,
suits, claims, demands, liabilities, and actions (including costs
and expenses of defending against all such actions) resulting or
alleged to result from any breach, violation or nonperformance of
any covenant or condition hereof by Tenant, and (b) all claims,
demands, actions, damages, loss, cost, liabilities, expenses and
judgments suffered by, recovered from or asserted against Landlord
on account of injury or damage to person or property to the extent
that any such damage or injury may be incident to, arise out of, or
be caused by an act, omission, negligence or misconduct on the part
of Tenant or any of its agents, servants, employees, contractors,
patrons, guests, licensees or invitees or of any other person
entering upon the Leased Premises under or with the express or
implied invitation or permission of Tenant or when any such injury
or damage is the result, proximate or remote, of the violation by
Tenant or any of it agents, servants, employees, contractors,
patrons, guests, licensees or invitees of any law, ordinance or
governmental order of any kind or of any of the Rules and
Regulations included in this Lease (as such Rules and Regulations
may hereafter at any time or from time to time be amended or
supplemented), or when any such injury or damage may in any other
way arise from or out of the occupancy or use by Tenant, its
agents, servants, employees, contractors, patrons, guests,
licensees or invitees of the Leased Premises.
21.2 Indemnification by Landlord. Landlord will indemnify Tenant
for, and hold harmless Tenant from and against (a) all fines,
suits, claims, demands, liabilities, and actions (including costs
and expenses of defending against all such actions) resulting or
alleged to result from any breach, violation or nonperformance of
any covenant or condition hereof by Landlord, and (b) all claims,
demands, actions, damages, loss, cost, liabilities, expenses and
judgments suffered by, recovered from or asserted against Tenant on
account of injury or damage to person or property to the extent
that any such damage or injury may be incident to, arise out of, or
be caused by an act, omission, negligence or misconduct on the part
of Landlord or any of its agents, servants, employees or
contractors, or when any such injury or damage is the result,
proximate or remote, of the violation by Landlord or any of it
agents, servants, employees or contractors of any law, ordinance or
governmental order of any kind.
21.3 No Liability. Neither Landlord nor Tenant shall be
responsible or liable to the other, their respective officers,
employees, agents, contractors, subcontractors, customers or
invitees, for bodily injury, death or property damage to the extent
occasioned by the acts or omissions of any other tenant in the
Building or such tenant's officers, employees, agents, contractors,
subcontractors, customers or invitees within the Building.
22. DAMAGES FROM CERTAIN CAUSES.
Landlord shall not be liable to Tenant for any loss or damage
to any property, or injury to or death of any person, occasioned by
theft, fire, act of God or the public enemy, injunction, riot,
strike, insurrection, war, requisition or order of governmental
body or authority or any other cause beyond the control of
Landlord.
23. EVENTS OF DEFAULT/REMEDIES.
23.1 Events of Default by Tenant. In the event of any failure of
Tenant to pay any rental or other sums of money when due hereunder;
or any failure to observe or perform any other of the terms,
conditions or covenants of this Lease, including but not limited to
the Building Rules, to be observed or performed by Tenant for more
than ten (10) days after written notice thereof shall have been
given to Tenant; or if the Tenant's leasehold interest shall be
taken on execution or other process of law against Tenant; or if
Tenant or an agent of Tenant shall falsify any report required to
be furnished to Landlord pursuant to the terms of this Lease; or if
Tenant shall fail to accept the Leased Premises, or to promptly
move into, take possession of, and operate its business on the
Leased Premises when the Leased Premises are substantially
complete; or if Tenant ceases to do business in or abandons any
substantial portion of the Leased Premises; or if Tenant should at
any time during the continuance of the Lease remove or attempt to
remove the goods, furniture, effects, improvements and personal
property brought thereon out of or from the Leased Premises (except
in the ordinary course of business), without having paid in full
all rent and other applicable charges which shall become due during
the term of this Lease; or, if Tenant or any Guarantor of this
Lease shall become bankrupt or insolvent, or file a petition in
bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all or a portion of
Tenant's or any Guarantor's property; or if a petition or answer
proposing the adjudication of Tenant or any Guarantor as a bankrupt
or its reorganization under any present or future federal or state
bankruptcy or similar law shall be filed in any court and such
petition or answer shall not be discharged or denied within sixty
(60) days after the filing thereof; or if Tenant or any Guarantor
makes an assignment for the benefit of creditors, or petitions for
or enters into an arrangement, or suffers this Lease to be taken
under any writ of execution, then, in any of such events, Tenant
shall be deemed in breach and default of this Lease and Landlord,
in its discretion and at its election, and in addition to all other
rights and remedies it may have in law or in equity, shall also be
entitled to those rights and remedies enumerated in Section 23.2
below.
23.2 Landlord's Remedies for Tenant Default. Subject to Section
23.5 hereof:
(a) In the event of a default by Tenant as set forth in
Section 23.1 of this Lease or in any other Section
of this Lease, the Landlord, at its option (without
further notice or demand of any kind to Tenant or
any other person except as hereinafter expressly
provided) shall have, in addition to all the legal
and equitable remedies, and the remedies described
elsewhere in this Lease, the following described
remedies:
(i) Landlord shall have the right to proceed by
attachment, suit or otherwise to collect any
delinquent rent or other amounts due Landlord
hereunder. In the event it is necessary for
Landlord to bring suit for rental payments or
other charges as they accrue or in order to
collect any damages, Landlord shall have the
right to allow such rental or deficiencies to
accumulate and to bring an action on several
or all of the deficiencies at one time. Any
such suit shall not prejudice in any way the
right of Landlord to bring a similar action
for subsequent rental or damage deficiencies.
(ii) Landlord may elect to accelerate the rent due
under this Lease by giving notice of such
election to Tenant and, in such event, Tenant
shall pay at once to Landlord a sum of money
equal to the rentals and other charges to be
paid by Tenant (as specified in Section
23.2(b) below) to Landlord for the balance of
the stated term of this Lease, and Landlord
shall have the right to proceed by attachment,
suit or otherwise to collect such sum or other
amounts due Landlord hereunder.
(iii) Landlord may elect to terminate this Lease by
written notice to Tenant specifying the date
the Lease will terminate, which shall not be
less than three (3) days after the giving of
such notice, and upon such date this Lease and
Lease Term shall end. Landlord may
immediately repossess the Leased Premises and
Tenant shall pay at once to Landlord as
damages a sum of money equal to the rentals
and other charges to be paid by Tenant (as
specified in Section 23.2(b) below) to
Landlord for the balance of the stated term of
this Lease, and Landlord shall have the right
to proceed by attachment, suit or otherwise to
collect such sum or other amounts due Landlord
hereunder.
(iv) Landlord may elect to terminate Tenant's right
of possession without terminating this Lease,
in which event Tenant agrees to surrender
possession and vacate the Leased Premises
immediately and deliver the possession to
Landlord, and Tenant hereby grants Landlord
full and free license to enter in and upon the
Leased Premises or any part thereof, and to
expel or remove Tenant or any other person or
party who may be occupying or within the
Leased Premises or any part thereof, and
remove any and all property therefrom. Such
property may be removed and stored in a public
warehouse or elsewhere at the cost of and for
the account of Tenant without terminating this
Lease or releasing Tenant in whole or in part
from Tenant's obligations to pay rent and
other charges and perform any of the
covenants, conditions and agreements to be
performed by Tenant as provided in this Lease
and without being deemed in any manner guilty
of trespass, eviction or forcible entry or
detainer, and without becoming liable for any
loss or damage which may be occasioned
thereby, and without relinquishing Landlord's
rights as herein provided. If Landlord
re-enters the Leased Premises without
terminating this Lease, then Landlord may
relet the Leased Premises or any part or parts
thereof, either in the name of Landlord,
Tenant or otherwise, for a term which may at
Landlord's option be less than or exceed the
period which would otherwise have constituted
the balance of the Lease Term and upon such
other terms and conditions as Landlord, in its
sole discretion, may deem advisable. Tenant
or the legal representative of Tenant shall
pay Landlord for each month of the period
which would otherwise have constituted the
balance of the Lease Term, any deficiency
between (i) one monthly installment of Rent
that would have been payable for the month in
question but for such re-entry or termination,
and all charges that otherwise would have
become due, and (ii) the net amount, if any,
of the rents collected on account of the lease
or leases of the Leased Premises for each
month of the period which would otherwise have
constituted the balance of the Lease Term. The
refusal or failure of Landlord to relet the
Leased Premises or any part or parts thereof
shall not release or affect Tenant's liability
for damages; provided, however, that Landlord
shall use reasonable efforts to relet the
Leased Premises. There shall be added to the
said deficiency such expenses as Landlord may
incur in connection with any reletting (such
as court costs, reasonable attorneys' fees and
disbursement, brokerage and expenses for
putting and keeping the Leased Premises in
good order or for preparing the same for
reletting). Any deficiency shall be paid in
monthly installments by Tenant on the rent day
specified in this Lease and any suit brought
to collect the amount of the deficiency for
any month shall not prejudice in any way the
rights of Landlord to collect the deficiency
for any subsequent month by a similar
proceeding. No such re-entry or taking
possession of the Leased Premises by Landlord
shall be construed as an election on its part
to terminate this Lease unless a written
notice of such termination be given to Tenant
or unless the termination thereof be decreed
by a court of competent jurisdiction. Any
amount collected by Landlord from subsequent
tenants in excess of that provided for in this
Lease for the same rental period shall be
credited to Tenant in reduction of Tenant's
liability for any rental period in which the
amount collected by Landlord shall be less
than that provided for by this Lease, but
Tenant shall only be entitled to receive any
such excess rentals at the end of the Lease
Term and without interest. In all events
Landlord may terminate the Lease for such
breach at any time thereafter and after such
termination Tenant shall not be entitled to
any claim whatsoever, of any kind or nature,
for any excess rental that may be collected by
Landlord. The reletting of the Leased
Premises beyond the date originally fixed for
expiration of the term of the Lease shall not
be deemed to release Tenant from his
obligations hereunder. An election to
re-enter the Leased Premises (without
terminating the Lease) and the reletting or
not reletting of the Leased Premises shall not
thereafter prevent Landlord from electing to
terminate the Lease for such previous breach.
In the event it is necessary for Landlord to
bring suit for such rental payments or other
charges as they accrue or in order to collect
any damages, Landlord shall have the right to
allow such rental or deficiencies to
accumulate and to bring an action on several
or all of the deficiencies at one time. Any
such suit shall not prejudice in any way the
right of Landlord to bring a similar action
for subsequent rental or damage deficiencies.
(b) For purposes of computing the rentals and other
charges due in the event that Landlord elects to
accelerate the rents hereunder pursuant to Section
23.2(a)(ii), or elects to terminate this Lease
pursuant to Section 23.2(a)(iii), the rental
payments payable to Landlord under this Lease shall
include the monthly Rent and other charges due
monthly hereunder. In addition, damages shall
include interest on past due rentals and other
charges and Landlord's court costs and reasonable
attorneys fees incurred in connection with the
termination of this Lease because of Tenant's
breach.
(c) If Tenant defaults in any of its obligations
hereunder, then Landlord, to the extent not
otherwise recovered, shall be entitled to recover
its reasonable attorneys' fees and court costs
incurred by reason of Tenant's default. If Tenant
shall default under any of the terms and provisions
of this Lease on its part to be performed or
observed, Landlord shall be entitled to interest on
any monies expended on behalf of Tenant and any
costs or expenses incurred by Landlord, at a rate
per annum equal to the interest rate set forth in
Section 4.
(d) In addition to the above-mentioned remedies, and in
no way limiting, excluding or waiving any remedy
available to Landlord as a result of a default by
Tenant, Landlord shall be entitled, upon Tenant's
default pursuant to Section 23.1, to sue for and
recover from Tenant an amount equal to the sum of
all Base Rental abatements, tenant finish
allowances and all other concessions received by
Tenant prior to such event of default
(collectively, "Tenant Concessions"); and any
Tenant Concessions that would benefit Tenant after
the occurrence of an event of default shall
automatically be deemed terminated as of the date
of the occurrence of such event of default.
23.3 Landlord's Remedies are Cumulative. All the remedies of
Landlord in the event of Tenant default shall be cumulative and, in
addition, Landlord may pursue any other remedies permitted by law
or in equity. Forbearance by Landlord to enforce one or more of
the remedies upon an event of default shall not constitute a waiver
of such default.
23.4 Obligation to Pay Rent is Independent; No Setoff. The
obligation of Tenant to pay all Rent provided to be paid by Tenant
and the obligations of Tenant to perform Tenant's other covenants
and duties hereunder constitute independent and unconditional
obligations to be performed at all times provided for hereunder,
save and except only when an abatement thereof or reduction therein
is herein above expressly provided for and not otherwise. Tenant
waives and relinquishes all rights which Tenant might have to claim
any nature of lien against, withhold, deduct or offset against, any
Rent and other sums provided hereunder to be paid Landlord by
Tenant.
23.5 Special Rights of Depository Institution Supervisory
Authority. Notwithstanding any other provisions contained in this
Lease, in the event (a) Tenant or its successors or assignees shall
become insolvent or bankrupt, or if it or their interests under
this Lease shall be levied upon or sold under execution or other
legal process, or (b) the depository institution then operating on
the Leased Premises is closed, or is taken over by any depository
institution supervisory authority ("Authority"), Landlord may, in
either such event, terminate this Lease only with the concurrence
of any Receiver or Liquidator appointed by such Authority;
provided, that in the event this Lease is terminated by the
Receiver or Liquidator, the maximum claim of Lessor for rent,
damages, or indemnity for injury resulting from the termination,
rejection, or abandonment of the unexpired Lease shall by law in no
event be in an amount greater than all accrued and unpaid rent to
the date of termination.
24. PEACEFUL ENJOYMENT.
24.1 Rights of Tenant. Subject to the other terms hereof
including, without limitation, the provisions of Section 27.1,
Tenant shall and may peacefully enjoy the Leased Premises against
all persons claiming by, through or under Landlord, provided that
Tenant pays the rent and other sums herein recited to be paid by
Tenant and performs all of Tenant's covenants and agreements in
this Lease Agreement.
24.2 Limitation. The foregoing covenant and any and all other
covenants of the Landlord shall be binding upon Landlord and its
successors only with respect to breaches occurring during its or
their respective periods of ownership of the Leased Premises.
Tenant specifically acknowledges that Landlord will make repairs,
alterations and improvements to the Building from time to time
("Building Work"), and that such Building Work may create noise
audible within the Leased Premises and dust and noise within the
common areas of the Building. Tenant agrees that Landlord shall
have the right from time to time to conduct such Building work, and
that such noise and dust related to the Building Work shall not be
deemed or claimed by Tenant to be a nuisance, a breach or
disturbance of the Tenant's right of peaceful and quiet enjoyment,
a breach of any of the Landlord's obligations hereunder, or any
sort of constructive eviction.
25. HOLDING OVER.
25.1 Rental Amount. If Tenant holds over without Landlord's
written consent after expiration or other termination of this Lease
Agreement, or if Tenant continues to occupy the Leased Premises
after termination of Tenant's right of possession pursuant to the
provisions of Section 23.2, Tenant shall throughout the entire
holdover period pay rent equal to twice the Rent that would have
been applicable had the term of this Lease Agreement continued
through the period of such holding over by Tenant.
25.2 No Extension of Term. No possession by Tenant after the
expiration of the term of this Lease Agreement shall be construed
to extend the term of this Lease Agreement unless Landlord has
consented to such possession in writing.
26. SUBORDINATION.
26.1 Subject to Mortgages and Certain Leases. This Lease Agreement
is and shall be subject and subordinate to any mortgage, or other
lien created by Landlord, whether now existing or hereafter arising
upon the Leased Premises, or upon the Building and to any renewals,
refinancing and extensions thereof, and to any ground or primary
lease in existence at the date hereof, if any, or that may be
executed subsequent to the date hereof, and to any and all
supplements, modifications and extensions thereof heretofore or
hereafter made, but Tenant agrees that any such mortgagee or lessor
shall have the right at any time to subordinate such mortgage, or
the lien thereof, or such lease to this Lease Agreement on such
terms and subject to such conditions as such mortgagee or lessor
may deem appropriate in its discretion.
26.2 Subordination of Lease Agreement. Tenant agrees upon demand
to execute such further instruments subordinating this Lease
Agreement to any mortgage or other lien or ground or primary lease
now existing or hereafter placed upon the Leased Premises or the
Building as a whole, or attorning to the holder of any such liens
or leases, as Landlord may request.
26.3 Approval of Lease Agreement by Landlord's Mortgagee. The
terms of this Lease Agreement are subject to approval by the
Landlord's mortgagee(s), and such approval is a condition precedent
to Landlord's obligations hereunder.
26.4 Attorney-in-Fact. If Tenant should fail to execute any
subordination or other agreement required by this Section 26,
promptly as requested, Tenant hereby irrevocably constitutes
Landlord as its attorney-in-fact to execute such instrument in
Tenant's name, place and stead, it being agreed that such power is
one coupled with an interest.
26.5 Estoppel Certificates; Financial Certificates. Tenant agrees
that it will from time to time upon request by Landlord execute and
deliver to such persons as Landlord shall request, a statement in
recordable form certifying that this Lease Agreement is unmodified
and in full force and effect (or if there have been modifications,
that the same is in full force and effect as so modified), stating
the dates to which rent and other charges payable under this Lease
Agreement have been paid, stating that Landlord is not in default
hereunder (or if Tenant alleges a default stating the nature of
such alleged default) and further stating such other matters as
Landlord or such persons shall reasonably require. At any time
upon Landlord's request, Tenant agrees to deliver to Landlord
current financial statements of Tenant (with an opinion by a
certified public accountant (if available)), including a balance
sheet and a profit and loss statement for at least two (2) years,
all prepared in accordance with generally accepted accounting
principles consistently applied.
26.6 Attornment. Tenant shall, in the event of the sale or
assignment of Landlord's interest in the building of which the
Leased Premises form a part, or in the event of any proceedings
brought for the foreclosure of, or in the event of exercise of the
power of sale under, any mortgage made by Landlord covering the
Leased Premises, attorn to the purchaser and recognize the
purchaser as Landlord under this Lease Agreement.
26.7 Notice to Mortgagees. In the event of any act or omission by
Landlord which would give Tenant the right to damages from Landlord
or the right to terminate this Lease by reason of a constructive or
actual eviction from all or part of the Leased Premises or
otherwise, Tenant shall not sue for such damages or exercise any
such right to terminate until (a) it shall have given written
notice of such act or omission to Landlord and to the holder(s)
(collectively, the "Landlord's Mortgagee") of the indebtedness or
other obligations secured by any first mortgage or first deed of
trust affecting the Leased Premises, if the name and address of the
Landlord's Mortgagee shall previously have been furnished to Tenant
and (b) a reasonable period of time for remedying such act or
omission shall have elapsed following the giving of such notice,
during which time Landlord and Landlord's Mortgagee, or either of
them, their agents or employees, shall be entitled to enter upon
the Leased Premises and do therein whatever may be necessary to
remedy such act or omission. During the period after the giving of
such notice and during the remedying of such act or omission, the
Rent payable by Tenant for such period as provided in this Lease
shall be abated and apportioned only to the extent that any part of
the Leased Premises shall be untenantable.
27. ATTORNEY'S FEES.
Tenant will pay, in addition to the rents and other sums
agreed to be paid hereunder, all collection and court costs
incurred by Landlord, and Landlord's reasonable attorney's fees
incurred for the collection of unpaid rents or the enforcement,
defense or interpretation of Landlord's rights under this Lease
Agreement, whether such fees and costs be incurred out of court, at
trial, on appeal or in bankruptcy proceedings.
28. NO IMPLIED WAIVER.
28.1 No Waiver. The failure of Landlord to insist at any time upon
the strict performance of any covenant or agreement or to exercise
any option, right, power or remedy contained in this Lease
Agreement shall not be construed as a waiver or a relinquishment
thereof for the future.
28.2 Partial Payment. No payment by Tenant or receipt by Landlord
of a lesser amount than the monthly installment of rent due under
this Lease Agreement shall be deemed to be other than payment on
account of the earliest rent due, nor shall any endorsement or
statement on any check or any letter accompanying any check or
payment as rent 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 rent or pursue any other
remedy provided in this Lease Agreement.
29. PERSONAL LIABILITY.
The liability of Landlord (and any partner, stockholder,
officer or director of Landlord) to Tenant for any default by
Landlord under this Lease Agreement shall be limited to the
interest of Landlord in the Building, and Tenant agrees to look
solely to Landlord's interest in the Building for the recovery of
any judgment from the Landlord, it being intended that Landlord
(and any partner, stockholder, officer or director of Landlord)
shall not be personally liable for any judgment or deficiency.
30. FORCE MAJEURE.
Whenever a period of time is herein prescribed for the taking
of any action by Landlord, Landlord shall not be liable or
responsible for, and there shall be excluded from the computation
of such period of time, any delays due to strikes, riots, acts of
God, shortages of labor or materials, war, governmental laws,
regulations or restrictions, financing, or any other cause
whatsoever beyond the control of Landlord.
31. RELATIONSHIP OF PARTIES.
Nothing contained in this Lease Agreement shall be deemed or
construed by the parties hereto, nor by any third party, as
creating the relationship of principal and agent or of partnership
or of joint venture between the parties hereto, it being understood
and agreed that neither the method of computation of rent, nor any
other provisions contained herein, nor any acts of the parties
herein, shall be deemed to create any relationship between the
parties hereto other than the relationship of Landlord and Tenant.
32. MISCELLANEOUS.
32.1 Severability. If any term or provision of this Lease
Agreement, or the application thereof to any person or circumstance
shall, to any extent, be invalid or unenforceable, the remainder of
this Lease Agreement or the application of such term or provision
to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Lease Agreement shall be valid and
enforced to the fullest extent permitted by law.
32.2 Recordation. Tenant agrees not to record this Lease Agreement
or any memorandum hereof without the prior written consent of
Landlord. Landlord may record this Lease Agreement or a memorandum
thereof, at its sole election. Tenant shall, upon request by
Landlord, at any time execute a short form lease in recordable form
setting forth the essential elements of this Lease, including, but
not limited to, the names of the parties, the term of the Lease and
the description of the Leased Premises.
32.3 Governing Law. This Lease Agreement and the rights and
obligations of the parties hereto are governed by the laws of the
state of Alabama.
32.4 Time of Performance. Except as may be otherwise expressly
provided herein, time is of the essence of this Lease Agreement
with respect to all obligations.
32.5 Commissions. Tenant warrants and represents to Landlord that
no real estate broker and/or salesman has been involved by Tenant
in this Lease, and hereby indemnifies and agrees to hold harmless
and defend Landlord against any loss, claim, expense or liability
with respect to any commissions or brokerage fees claimed on
account of the execution and/or renewal of this Lease Agreement due
to any action of the Tenant.
32.6 Parking. Landlord grants to Tenant the right to use forty-two
parking spaces in the surface parking located adjacent to the
Building.
32.7 Effect of Delivery of this Lease Agreement. Landlord has
delivered a copy of this Lease Agreement to Tenant for Tenant's
review only, and the delivery hereof does not constitute an offer
to Tenant or an option to lease. This Lease Agreement shall not be
effective until a copy executed by both Landlord and Tenant is
delivered to and accepted by Landlord.
32.8 Section Headings. The section or subsection headings are used
for convenience of reference only and do not define, limit or
extend the scope or intent of the sections or this Lease Agreement.
32.9 Entire Agreement. This Lease and any attached schedules,
exhibits and riders constitute the entire agreement between
Landlord and Tenant and no prior or contemporaneous oral promises
or representations shall be binding. This Lease shall not be
amended, changed or extended except by written instrument signed by
both parties hereto.
32.10 Successors and Assigns. All of the covenants, agreements,
terms and conditions to be observed and performed by the parties
hereto shall be applicable to and binding upon their respective
heirs, personal representatives, successors and, to the extent
assignment is permitted hereunder, their respective assigns.
32.11 Notices.
(a) To Landlord: The Tenant shall pay the rent and shall
forward all notices to Landlord at the following address
(or at such other place as Landlord may hereafter
designate in writing):
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
with a copy to:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
(b) To Tenant: The Landlord shall forward all notices to
Tenant at the following address (or at such other place
as Tenant may hereafter designate in writing):
VISION BANK
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
with a copy to:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
(c) Any notice provided for in this Lease Agreement must,
unless otherwise expressly provided herein, be in
writing, and may, unless otherwise expressly provided, be
given or be served by depositing the same in the United
States mail or overnight delivery service, postage or
charges prepaid, and addressed to the party to be
notified, or by delivering the same in person to an
officer of such party.
(d) Notice deposited in the mail or given to an overnight
delivery service in the manner hereinabove shall be
effective upon receipt, unless such mail or delivery is
unclaimed, in which event notice shall be effective five
(5) days after the date of mailing or delivery.
32.12 Gender. The pronouns of any gender shall include the other
genders, and either the singular or the plural shall include the
other.
32.13 Time of the Essence. In all instances where Tenant is
required hereunder to pay any sum or do any act at a particular
time or within an indicated period, it is understood that time is
of the essence.
32.14 Building Name. Landlord agrees that, so long as this Lease,
and any renewals or replacements hereto is in effect, the Building
shall be designated and known as the Vision Bank Building.
32.15 No Merger. There shall be no merger of this Lease or of the
leasehold estate hereby created with the fee estate in the Leased
Premises or any part thereof by reason of the fact that the same
person may acquire or hold, directly or indirectly, this Lease or
the leasehold estate hereby created or any interest in this Lease
or in such leasehold estate as well as the fee estate in the Leased
Premises or any interest in such fee estate.
33. EXHIBITS AND SCHEDULES.
In addition to Exhibit A and Schedule 1, the following
numbered exhibits are attached hereto and incorporated herein and
made a part of this Lease for all purposes:
Exhibit Number Description
Exhibit A Floor Plan of Lease Premises
Schedule I Work Letter Agreement
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease Agreement in multiple original counterparts effective as of
the day and year first above written.
LANDLORD:
_________
WITNESS: GULF SHORES INVESTMENT GROUP, LLC
_________________________ By:__________________________________
Its:______________________________
TENANT:
_______
WITNESS OR ATTEST: VISION BANK
__________________________ By:__________________________________
Its:______________________________
<PAGE>
Lease Agreement
for
Banking Facilities
VISION BANK
Orange Beach, Alabama
<PAGE>
TABLE OF CONTENTS
1. LEASED PREMISES. 1
2. LEASE TERM. 1
2.1 Continuance During Term. 1
2.2 Delay in Completion; Fault of Tenant. 1
2.3 Delay in Completion; Fault of Landlord. 1
2.4 Failure to Deliver Leased Premises;
Right to Cancel. 2
2.5 Acceptance of Leased Premises. 2
2.6 Renewal Options. 2
3. USE. 2
3.1 Permitted Use. 2
3.2 Legal Use and Violation of Insurance Coverage. 2
3.3 Nuisance. 2
4. BASE RENTAL. 2
5. OPERATING COST. 3
6. OPERATING COST ADJUSTMENT. 3
7. SERVICES TO BE FURNISHED BY LANDLORD. 4
7.1 Defined Services. 4
7.2 Failure or Interruption of Defined Services. 4
7.3 Repairs by Landlord. 4
8. IMPROVEMENTS TO THE LEASED PREMISES. 4
9. GRAPHICS. 4
10. CARE OF THE LEASED PREMISES BY TENANT. 4
10.1 Condition of Leased Premises at Commencement;
Notice to Landlord. 4
10.2 No Waste; Regulated Materials. 5
11. REPAIRS AND ALTERATIONS BY TENANT. 5
11.1 Repair by Tenant. 5
11.2 Compliance with Laws; Repair by Landlord. 5
11.3 Alterations or Additions by Tenant. 5
11.4 Property of Landlord. 5
12. LAWS, REGULATIONS AND RULES. 5
12.1 Applicable Ordinances. 6
12.2 Building Rules. 6
13. ENTRY BY LANDLORD. 6
14. FURNITURE, FIXTURES AND PERSONAL PROPERTY. 6
15. TAXES ON TENANT'S PROPERTY. 6
16. ASSIGNMENT AND SUBLETTING. 6
16.1 No Assignment Without Consent. 6
16.2 Sublease. 6
16.3 Further Assignment. 7
16.4 Assigns and Sublessees. 7
16.5 Transfers by Landlord. 7
17. MECHANIC'S LIEN. 7
17.1 Tenant Not to Permit Liens. 7
17.2 Rights of Landlord; Additional Rent. 7
18. INSURANCE. 7
18.1 Landlord. 7
18.2 Tenant. 8
18.3 Insurance -- General. 8
18.4 Subrogation. 8
19. CASUALTY DAMAGE. 8
20. CONDEMNATION. 9
21. INDEMNITY. 9
21.1 Indemnification by Tenant. 9
21.2 Indemnification by Landlord. 9
21.3 No Liability. 9
22. DAMAGES FROM CERTAIN CAUSES. 10
23. EVENTS OF DEFAULT/REMEDIES. 10
23.1 Events of Default by Tenant. 10
23.2 Landlord's Remedies for Tenant Default. 10
23.3 Landlord's Remedies are Cumulative. 12
23.4 Obligation to Pay Rent is Independent;
No Setoff. 12
23.5 Special Rights of Depository Institution
Supervisory Authority. 12
24. PEACEFUL ENJOYMENT. 12
24.1 Rights of Tenant. 12
24.2 Limitation. 13
25. HOLDING OVER. 13
25.1 Rental Amount. 13
25.2 No Extension of Term. 13
26. SUBORDINATION. 13
26.1 Subject to Mortgages and Certain Leases. 13
26.2 Subordination of Lease Agreement. 13
26.3 Approval of Lease Agreement by Landlord's
Mortgagee. 13
26.4 Attorney-in-Fact. 13
26.5 Estoppel Certificates; Financial Certificates. 13
26.6 Attornment. 14
26.7 Notice to Mortgagees. 14
27. ATTORNEY'S FEES. 14
28. NO IMPLIED WAIVER. 14
28.1 No Waiver. 14
28.2 Partial Payment. 14
29. PERSONAL LIABILITY. 14
30. FORCE MAJEURE. 14
31. RELATIONSHIP OF PARTIES. 15
32. MISCELLANEOUS. 15
32.1 Severability. 15
32.2 Recordation. 15
32.3 Governing Law. 15
32.4 Time of Performance. 15
32.5 Commissions. 15
32.6 Parking. 15
32.7 Effect of Delivery of this Lease Agreement. 15
32.8 Section Headings. 15
32.9 Entire Agreement. 15
32.10 Successors and Assigns. 15
32.11 Notices. 15
32.12 Gender. 16
32.13 Time of the Essence. 16
32.14 Building Name. 17
32.15 No Merger. 17
33. EXHIBITS AND SCHEDULES. 17
Exhibit A Floor Plan of Leased Premises
Schedule 1 Work Letter
<PAGE>
STATE OF ALABAMA
COUNTY OF BALDWIN
LEASE AGREEMENT
This Lease Agreement made and entered into on this the
________ day of _________________________________________, 1999,
between GULF SHORES INVESTMENT GROUP, LLC an Alabama limited
liability company (hereinafter called "Landlord"), and VISION BANK,
an Alabama banking corporation (hereinafter called "Tenant").
Tenant's address for purposes hereof until commencement of the term
of this Lease Agreement shall be c/o Daniel J. Sizemore, agent for
bank in organization, P. O. Box 1248, Gulf Shores, Alabama 36547,
and thereafter shall be the Leased Premises (hereinafter defined).
W I T N E S S E T H:
1. LEASED PREMISES.
Subject to and upon the terms, provisions and conditions
hereinafter set forth, and each in consideration of the duties,
covenants and obligations of the other hereunder, Landlord does
hereby lease, demise and let to Tenant and Tenant does hereby lease
from Landlord those certain premises (the "Leased Premises") in the
building (the "Building") located at 25051 Canal Street, Orange
Beach, Alabama, such Leased Premises being approximately 3500
square feet of Rentable Area, as reflected on the floor plan of
such Leased Premises attached hereto and made a part hereof as
Exhibit A.
The Rentable Area of the Leased Premises has been estimated.
If the final design of the Leased Premises reflects Rentable Area
of the Leased Premises which is different than that specified
above, then the Rentable Area will be adjusted, upward or downward,
as may be appropriate.
2. LEASE TERM.
2.1 Continuance During Term. This Lease Agreement shall
continue in force during a period beginning on the Commencement Date
(hereafter defined) and ending on midnight on the date which is
three (3) years after the first day of the first calendar month
immediately following the calendar month in which the Commencement
Date occurs (the "Lease Term"), unless this Lease Agreement is
sooner terminated or extended to a later date under any other term
or provision of this Lease Agreement. For purposes of this Lease,
the term "Commencement Date" shall mean the earlier of (a) the date
the Leased Premises are ready for occupancy by Tenant for the
operation of its business, or (b) ______________________________,
2000. The term "ready for occupancy" shall mean the earlier of (i)
the date on which a certificate of occupancy for the Leased
Premises is issued by the city in which the Leased Premises are
located, or (ii) the date on which Landlord's architect (as defined
in the Work Letter Agreement between Landlord and Tenant attached
as Schedule 1 hereto -- the "Work Letter") issues a certificate of
substantial completion for the Leased Premises.
2.2 Delay in Completion; Fault of Tenant. If, by the Commencement
Date, the Leased Premises have not been substantially completed
pursuant to Work Letter due to omission, delay or default by Tenant
or anyone acting under or for Tenant, including but not limited to
(i) Tenant's failure timely to obtain approved plans, or (ii) delay
in delivery of materials for Tenant's Extra Work (hereinafter
defined), the obligations of Tenant under this Lease Agreement
(including without limitation, the obligation to pay rent) shall
nonetheless commence as of the Commencement Date.
2.3 Delay in Completion; Fault of Landlord. If, by the date
specified in Section 2.1, the Leased Premises are not substantially
completed due to default on the part of Landlord or for any other
cause (other than those causes set forth in Section 2.2), then
(except as provided in Section 2.4 below) as Tenant's sole remedy
for the delay in Tenant's occupancy of the Leased Premises, the
Commencement Date shall be delayed and the rent herein provided
shall not commence until the earlier of (i) actual occupancy by
Tenant, or (ii) substantial completion of the work that Landlord
has agreed to perform.
2.4 Failure to Deliver Leased Premises; Right to Cancel. If
Landlord fails to deliver the Leased Premises substantially
complete on or before ________________________________, 2000,
Tenant shall have the right to cancel this Lease Agreement by
giving Landlord notice to that effect at any time within fifteen
(15) days after such date. Except for Tenant's right to cancel as
herein provided, Landlord shall have no other liability for failure
to complete the Leased Premises or deliver possession thereof, and
in the event Tenant exercises its option to cancel, the parties
hereto shall be mutually released from all obligations under the
terms of this Lease Agreement, except the provisions of Section 22
below shall survive such cancellation.
2.5 Acceptance of Leased Premises. Subject to the provisions of
Section 2.4, Tenant agrees to accept possession of the Leased
Premises when the Leased Premises have been substantially
completed, with all facilities in operating order. If there are
any punch list items remaining to be done that will not interfere
with the conduct of Tenant's business on the Leased Premises,
Tenant will nevertheless accept delivery of possession and allow
Landlord to complete such finishing items.
2.6 Renewal Options. Provided that no Event of Default has
occurred under this Lease and is continuing, Tenant shall have an
option to renew this Lease for three additional terms of three (3)
year each on the same terms and conditions as set forth here.
{SELECTION: Rental increases to be CPI or by mutual agreement
through third party appraiser.}
3. USE.
3.1 Permitted Use. The Leased Premises are to be used and
occupied by Tenant solely for general office purposes, including
but not limited to the operation of a bank.
3.2 Legal Use and Violation of Insurance Coverage. Tenant agrees
not to occupy or use, or permit any portion of the Leased Premises
to be occupied or used for any business or purpose that is
unlawful, disreputable or deemed to be extra-hazardous. Tenant
will not keep any substance or carry on or permit any operation
which might emit offensive gas, smoke, fumes, dust, odors, waste
products or conditions into other portions of the Building, or use
any apparatus which might make undue noise or set up vibrations in
the Building. Tenant will not permit anything to be done which
would increase the fire and extended coverage insurance rate on the
Building or contents, and if there is any increase in such rates by
reason of acts of Tenant, then Tenant agrees to pay such increase
promptly upon demand therefor by Landlord.
3.3 Nuisance. Tenant agrees to conduct its business and control
its agents, employees, invitees and visitors in such manner as not
to create any nuisance, or interfere with, annoy or disturb any
other tenant or Landlord in the operation of the Building.
4. BASE RENTAL.
Tenant hereby agrees to pay a base annual rental (herein
called the "Base Rental") of $63,000 at the rate of $18.00 per
square foot of Rentable Area. The Rentable Area is 3500 square
feet. The Tenant shall also pay, as additional rent, all such
other sums of money as shall become due and payable by Tenant to
Landlord under this Lease Agreement. The Base Rental shall be due
and payable in twelve (12) equal installments of $5,250 on the
first day of each calendar month during the initial term and any
extensions or renewals thereof, and Tenant hereby agrees to pay
such rent to Landlord monthly in advance without demand and without
any reduction, abatement, counterclaim or setoff, at such address
as may be designated by Landlord. The "Base Rental," and any other
additional rental shall be collectively referred to as "Rent" or
"rent." If the term of this Lease Agreement as heretofore
established commences on other than the first day of a month or
terminates on other than the last day of a month, then the Rent
provided for herein for such month or months shall be prorated and
the installment or installments so prorated shall be paid in
advance. All past due installments of rent shall bear interest at
the lesser of (i) the maximum rate permitted by applicable law, or
(ii) three (3) percentage points above the Prime Rate (hereinafter
defined), from the date due until paid. The term "Prime Rate" for
purposes of this Lease Agreement, shall mean the rate as published
in the Wall Street Journal on the date or dates on which reference
to the Prime Rate is being made (or in the event no such quotation
is available on such date, as quoted on the day most immediately
preceding the date of determination on which such a quotation was
available), and shall not be subject to adjustment, but shall in no
event exceed the maximum rate provided by applicable law.
5. OPERATING COST.
"Operating Cost," as that term is used herein, shall consist
of all operating expenses of the Building not borne by Tenant
through separate billing and payment. Operating Cost shall be
computed on an accrual basis and shall consist of all costs and
expenses incurred by Landlord to maintain all facilities used in
the operation of the Building and such additional facilities now
and in the future as may be determined by Landlord to be necessary
to the Building. All operating expenses shall be determined in
accordance with generally accepted accounting principles, which
shall be consistently applied. The term "operating expenses" as
used herein shall mean all expenses and costs (but not specified
costs that are separately billed to and paid by specific tenants)
of every kind and nature that Landlord shall pay or become
obligated to pay because of or in connection with the ownership and
operation of the Building as a result of the following:
(a) Cost of extraordinary repairs and replacements
(excluding repairs and general maintenance paid by
proceeds of insurance or by Tenant or other third
parties and not reimbursed by Landlord, and
alterations attributable solely to tenants of the
Building other than Tenant).
(b) Amortization of capital improvements made to the
Building subsequent to the Commencement Date of
this Lease Agreement that will improve the
operating efficiency or security of the Building at
the direction of tenant or that may be required by
a regulatory body having jurisdiction.
Notwithstanding any other provision herein to the contrary, it
is agreed that in the event the Building is not fully occupied
during any partial year or any full calendar year, the Operating
Cost for such period shall be the estimated amount that the
Operating Cost would have been had the Building been fully
occupied.
6. OPERATING COST ADJUSTMENT.
For each calendar year ending after the Commencement Date
during the Term of this Lease and any renewals or extensions
thereof, Tenant agrees to pay to Landlord, as an adjustment to Base
Rental, Tenant's Proportionate Share of the actual Operating Cost
for such calendar year ("Basic Cost Excess"). During each calendar
year of this Lease following the initial calendar year, and in
addition to the Base Rental, as adjusted pursuant to Section 5
hereof, Tenant shall make monthly payments equal to 1/12th of the
Basic Cost Excess determined for the previous calendar year (the
"Operating Cost Adjustment"). At the end of each such calendar
year, the total Operating Cost Adjustment paid by Tenant during
that calendar year shall be compared by Landlord to the Basic Cost
Excess for such year. If the total Operating Cost Adjustment paid
by Tenant for such calendar year is less than the amount actually
due, then Tenant shall pay the difference, as Rent, to Landlord
within ten (10) days after receipt of notice of the amount due. If
the total Operating Cost Adjustment paid by Tenant for such
calendar year is more than the amount actually due, the excess
shall, at Landlord's option, be paid to Tenant, or be credited by
Landlord against the next payment of Rent becoming due. The effect
of this reconciliation payment is that Tenant will pay its
Proportionate Share of the Basic Cost Excess and no more.
At the commencement of each calendar year, Tenant shall
continue to pay the monthly Operating Cost Adjustment based on rate
which was in effect during the previous calendar year until such
time as written notice of the revised Operating Cost Adjustment and
a statement of any additional rent due for the months already
elapsed in the new calendar year are received from Landlord. Such
notice and statement shall be provided by Landlord within a
reasonable period of time after the end of any calendar year for
which a Operating Cost Adjustment is applicable. Tenant shall
commence making payment of any such revised Operating Cost
Adjustment on the next rent due date following receipt of such
notice, and thereafter shall make monthly rent payments based on
the revised Operating Cost Adjustment until notified by Landlord of
a new revised rate as set forth above. Landlord's failure to so
notify Tenant within a reasonable period of time after the closing
of any calendar year for which additional rent is due under the
provisions of this Section shall not release Tenant from paying nor
diminish Tenant's obligation to pay such additional rent.
Tenant's "Proportionate Share", as used herein, shall be the
percentage derived by dividing the Rentable Area of the Leased
Premises by the total Rentable Area contained in the Building.
Should this Lease Agreement commence or terminate at any time other
than the first day of a calendar year, the computations set forth
in this Section shall be prorated for the partial year.
7. SERVICES TO BE FURNISHED BY LANDLORD.
7.1 Defined Services. Landlord agrees to use its best efforts to
furnish Tenant the following services (the "Defined Services"):
[NONE CONTEMPLATED]
7.2 Failure or Interruption of Defined Services. The failure by
Landlord to any extent to furnish, or the interruption or
termination of, the Defined Services, in whole or in part,
resulting from causes beyond the reasonable control of Landlord,
shall not render Landlord liable in any respect nor be construed as
an eviction (constructive or otherwise) of Tenant, nor work an
abatement of rent, nor relieve Tenant from the obligation to
fulfill any covenant or agreement of this Lease Agreement. In the
event of any such interruption or termination of any of the Defined
Services, Landlord shall use its best efforts to restore said
services.
7.3 Repairs by Landlord. Unless otherwise expressly stipulated
herein, Landlord shall not be required to make any improvements or
repairs of any kind or character on the Leased Premises during the
Term, except such repairs as may be required by normal maintenance
operations, which shall include repairs to the exterior walls,
corridors, windows, roof and other such structural elements and
equipment of the Building, and such additional maintenance as may
be necessary because of damages by persons other than Tenant, its
agents, employees, invitees or visitors. Landlord shall be
responsible for the maintenance , repair and clean-up of and water
leaks or seepage into the Building or the Premises.
8. IMPROVEMENTS TO THE LEASED PREMISES.
The Work Letter attached as Schedule 1 hereto sets forth the
Landlord's and Tenant's responsibilities with regard to the
Leasehold Improvements. Landlord agrees to provide those
improvements and allowances to Tenant as may be specified in the
Work Letter.
9. GRAPHICS.
Landlord shall provide and install, at Tenant's cost, all
letters or numerals at doors to the Leased Premises. All such
letters and numerals shall be in the standard graphics for the
Building, and no others shall be used or permitted on the Leased
Premises without Landlord's prior written consent. No signs,
symbol or identifying mark shall be put upon the Building, or in
the halls, elevators, staircases, entrances, parking areas or upon
the doors or walls, without prior written consent of Landlord.
10. CARE OF THE LEASED PREMISES BY TENANT.
10.1 Condition of Leased Premises at Commencement; Notice to
Landlord. The taking of possession of the Leased Premises by
Tenant shall be conclusive evidence as against Tenant (a) that it
accepts the Leased Premises as suitable for the purposes for which
same are leased, subject to "punch list" items to be installed or
repaired by Landlord contained in a punch list which must be
submitted, if at all, to Landlord by Tenant within ten (10) days
after the Commencement Date; (b) that it accepts the Property as
being in a good and satisfactory condition; and (c) that Tenant
waives any defects in the Leased Premises and its appurtenances and
in all other parts of the Property. Any subsequent modifications
to the Leased Premises required by governmental laws, rules or
regulations, including without limitation modifications required
under the Americans with Disabilities Act of 1990 and similar
legislation, shall be the sole responsibility of Tenant. Landlord
shall not be liable to Tenant or any of its agents, employees,
licenses, servants or invitees for any injury or damage to person
or property due to the condition or design of or any defect in the
Building or its mechanical systems and equipment which may exist or
occur, or due to the leaking of gas, water, sewer, or steam unless
such injury or damage is due to the gross negligence or willful
misconduct of Landlord (but not including the negligence or willful
misconduct of Landlord's contractors); and Tenant, with respect to
itself and its agents, employees, licensees, servants and invitees
shall have the responsibility for all risks of injury or damage to
person or property, either proximate or remote, by reason of the
condition of the Leased Premises or the Property except for injury
or damage caused by the gross negligence or willful misconduct of
Landlord. Except as specifically set forth herein, no promises of
the Landlord to alter, remodel, repair or improve the Leased
Premises or the Building and no representations respecting the
condition of the Leased Premises or the Building have been made by
Landlord to Tenant. At all times during the Lease Term, including
any extensions thereof, Tenant agrees to give Landlord prompt
notice of any apparent defective condition in or about the Leased
Premises.
10.2 No Waste; Regulated Materials. Tenant shall not commit waste
or allow any waste to be committed on any portion of the Leased
Premises, and at the termination of this Lease Agreement, Tenant
shall deliver the Leased Premises to Landlord in as good condition
as at the date of the commencement of the term of this Lease
Agreement, ordinary wear and use excepted. Tenant shall not treat,
store, handle, generate, locate on, discharge from, or dispose on
the Leased Premises or the Building any materials regulated,
controlled, limited or restricted by governmental laws, rules,
regulations or ordinances.
11. REPAIRS AND ALTERATIONS BY TENANT.
11.1 Repair by Tenant. Tenant shall, at Tenant's own cost and
expense, repair any damage done to the Building, or any part
thereof, including replacement of damaged portions or items, caused
by Tenant or Tenant's agents, guests, employees, invitees,
licensees, customers or visitors, and Tenant covenants and agrees
to make all such repairs as may be required to restore the Building
to as good a condition as it was in prior to such damage. Tenant
further agrees to maintain and keep the interior of the Leased
Premises in good repair and condition at Tenant's expense. Repair
and replacement parts, materials and equipment shall be of a
quality equivalent to those initially installed in the Building or
Leased Premises.
11.2 Compliance with Laws; Repair by Landlord. All such work or
repairs by Tenant shall be effected in compliance with all
applicable laws; provided, however, if Tenant fails to make such
repairs or replacements promptly, Landlord may, at its option, make
repairs or replacements, and Tenant shall pay to Landlord the cost
thereof, within ten (10) days of Landlord's demand therefor, as
additional rent.
11.3 Alterations or Additions by Tenant. Tenant agrees with
Landlord not to make or allow to be made any alterations to the
Leased Premises except in compliance with the provisions of this
Section.
(a) Tenant shall be entitled to make minor alterations
such as placing items on the walls of the Leased
Premises so long as once they are removed, Tenant
repairs any damage caused thereby. Any and all
such alterations, physical additions, or
improvements, when made to the Leased Premises by
Tenant, shall at once become the property of
Landlord and shall be surrendered to Landlord upon
the termination of this Lease by lapse of time or
otherwise; provided, however, this paragraph shall
not apply to movable equipment or furniture owned
by Tenant. If, however, Landlord so requests in
writing, Tenant will, immediately prior to
termination of this Lease, remove any and all
physical additions to the Leased Premises,
including partitions, and will repair any damage
caused by such removal, all at Tenant's cost.
(b) If the Tenant performs any construction work on the
Leased Premises, Tenant's work will be performed
with materials of good quality. Tenant shall not
do any construction work or alterations, nor shall
Tenant install any equipment without first
obtaining Landlord's written approval of the plans
and specifications therefor. The approval of the
Landlord of such plans and specifications shall not
constitute the assumption of any liability on the
part of the Landlord for their accuracy or their
conformity with requirements of any building code,
or other municipal or governmental regulation or
ordinance, and Tenant shall be solely responsible
for such plans. Tenant shall be responsible for all
necessary permits, governmental or otherwise, to
include special use permits, signage permits, etc.
11.4 Property of Landlord. Any and all alterations to the Leased
Premises shall become the property of Landlord upon termination of
this Lease Agreement (except for movable equipment or furniture
owned by Tenant).
12. LAWS, REGULATIONS AND RULES.
12.1 Applicable Ordinances. Tenant shall comply with all
applicable laws, ordinances, rules and regulations of any
governmental entity, agency or authority having jurisdiction over
the Leased Premises or Tenant's use of the Leased Premises.
12.2 Building Rules. Tenant shall comply with the Building Rules
adopted by Landlord and set forth in Schedule 2 hereto, as they may
be amended by Landlord from time to time ( the "Building Rules"),
and will cause all of its agents, employees, invitees and visitors
to do so. All changes to the Building Rules will be furnished by
Landlord to Tenant in writing.
13. ENTRY BY LANDLORD.
Tenant shall permit Landlord or its agents or representatives
to enter into and upon any part of the Leased Premises upon prior
notice and at all reasonable hours (and in emergencies at all
times) to inspect the condition, occupancy or use, to show the
Leased Premises to prospective purchasers, mortgagees, tenants or
insurers, or to clean or make repairs, alterations or additions.
Tenant shall not be entitled to any abatement or reduction of rent
by reason of this right of entry.
14. FURNITURE, FIXTURES AND PERSONAL PROPERTY.
Tenant may remove its trade fixtures, office supplies and
movable office furniture and equipment not attached to the Building
provided: (a) such removal is made within (30) days after the
termination of the Term of this Lease; (b) Tenant is not in default
of any obligation or covenant under this Lease at the time of such
removal at Tenant's sole cost and expense. All other property at
the Leased Premises and alterations and additions to the Leased
Premises (including wall-to-wall carpet, paneling or other wall
covering) and any other article attached or affixed to the floor,
wall or ceiling of the Leased Premises shall become the property of
Landlord and shall remain upon and be surrendered with the Leased
Premises as a part thereof at the termination of this Lease, by
lapse of time or otherwise, Tenant hereby waiving all rights to any
payment or compensation therefor. If, however, Landlord so
requests in writing, Tenant will, immediately prior to termination
of this Lease, remove any and all alterations, additions, fixtures,
equipment and property placed or installed by it in the Leased
premises, and not permanently affixed thereto, and will repair any
damage caused by such removal, all at Tenant's cost.
15. TAXES ON TENANT'S PROPERTY.
Tenant shall be liable for all taxes levied or assessed
against personal property, furniture or fixtures placed by Tenant
in the Leased Premises. If any such taxes for which Tenant is
liable are levied or assessed against Landlord or Landlord's
property and if Landlord elects to pay the same or if the assessed
value of Landlord's property is increased by inclusion of personal
property, furniture or fixtures placed by Tenant in the Leased
Premises, and Landlord elects to pay the taxes based on such
increase, then Landlord shall notify Tenant, and Tenant shall pay
to Landlord upon demand that part of such taxes for which Tenant is
liable hereunder.
16. ASSIGNMENT AND SUBLETTING.
16.1 No Assignment Without Consent. Tenant shall not assign,
sublease, transfer, pledge, or encumber this Lease Agreement or any
interest therein without Landlord's prior written consent. Any
attempted assignment, sublease or other transfer or encumbrance by
Tenant in violation of the terms and covenants of this paragraph
shall be void.
16.2 Assignment or Sublease. In the event Tenant shall desire to
assign this Lease Agreement or sublet the Leased Premises or any
part thereof, Tenant shall give Landlord written notice of such
desire, along with the name of the proposed assignee or sublessee
and a copy of the proposed assignment or sublease instrument, at
least ninety (90) days in advance of the date on which Tenant
desires to make such assignment or sublease. Landlord shall then
have a period of thirty (30) days following receipt of such notice
within which to notify Tenant in writing that Landlord elects
either (i) to permit Tenant to assign or sublet such space, (ii) to
refuse such request to assign or sublease such space (which refusal
may be made by Landlord without regard to any commercially
reasonable standard), or (iii) to terminate this Lease Agreement as
to the space so affected as of the date so specified by Tenant in
which event Tenant will be relieved of all obligations arising
thereafter as to such space. Any rent or other payments otherwise
due Tenant as a result of assignment or subletting of all or any
portion of the Leased Premises in excess of the rent due Landlord
by Tenant on such space hereunder shall be payable as additional
rent to Landlord by Tenant promptly upon receipt by Tenant, and
Tenant hereby assigns all rights it might have or ever acquire in
any such proceeds to Landlord. If Landlord should fail to notify
Tenant in writing of such election within said thirty (30) day
period, Landlord shall be deemed to have elected option (i) above.
No assignment or subletting by Tenant shall relieve Tenant of any
obligation under this Lease Agreement. Any consent of Landlord
hereunder is subject to receipt by Landlord of an executed copy of
the sublease or assignment.
16.3 Further Assignment. Notwithstanding Landlord's consent on any
one occasion, the rights of Landlord set forth in Section 16.2
shall apply to any further subletting or assignment.
16.4 Assigns and Sublessees. The provisions of this Section 16
shall be binding on any permitted assigns or sublessees of Tenant.
16.5 Transfers by Landlord. Landlord shall have the right to
transfer and assign, in whole or in part, all its rights and
obligations hereunder and in the Building and the Leased Premises
referred to herein, and in such event and upon such transfer
Landlord shall be released from any further obligations hereunder,
and Tenant agrees to look solely to such successor in interest of
Landlord for the performance of such obligations.
17. MECHANIC'S LIEN.
17.1 Tenant Not to Permit Liens. Tenant will not create or permit
to be created or to remain, and will discharge, any lien
(including, but not limited to, the liens of mechanics, laborers,
artisans or materialmen for work or materials alleged to be done,
furnished or delivered in connection with the Leased Premises),
encumbrance, or other charge upon the Leased Premises or any part
thereof, upon Landlord's interest therein, or upon Tenants
leasehold interest; provided, that Tenant shall not be required to
discharge any such liens, encumbrances or charges as may be placed
upon the Leased Premises or Building by the act of anyone other
than Tenant or Tenant's agents, employees, servants or contractors.
Provided that any Landlord's Mortgagee consents thereto in writing
and Tenant complies with all requirements of such Landlord's
Mortgagee with respect thereto and provided further, Tenant
furnishes security reasonably acceptable to Landlord and any such
Landlord's Mortgagee, Tenant shall have the right to contest, in
good faith by appropriate legal proceedings, the validity or amount
of any mechanics', laborers' , artisans' or materialmen's lien or
other claimed lien. On final determination of such lien or such
claim for lien, Tenant will immediately pay any judgement rendered
with all proper costs and charges and shall have such lien released
or judgement satisfied at Tenant's sole expense. Tenant will pay,
protect and indemnify Landlord, within ten (10) days after demand
therefor, from and against all liabilities, losses, claims,
damages, costs and expenses, including reasonable attorneys' fees,
incurred by Landlord by reasons of the filing of any lien and/or
removal of same.
17.2 Rights of Landlord; Additional Rent. If any such lien is
claimed against the Leased Premises, then, in addition to any other
right or remedy of Landlord, Landlord may, but shall not be
obligated to, discharge the same. Any amount paid by Landlord for
such purposes shall be paid by Tenant to Landlord as additional
rent within ten (10) days of Landlord's demand therefor.
18. INSURANCE.
18.1 Landlord. Landlord shall, at all times during the term of
this Lease Agreement, maintain a policy or policies of insurance,
issued by and binding upon some solvent insurance company, insuring
the Building and the Landlord's Work (as specified in the Work
Agreement) against loss or damage by fire, or other insurable
hazards and contingencies in such amount as Landlord deems
appropriate; provided that Landlord shall not be obligated to
insure any furniture, equipment, machinery, goods, supplies or
other personal property or trade fixtures that Tenant may bring or
obtain upon the Leased Premises, or any additional improvements
that Tenant may construct thereon. If the annual premiums charged
Landlord for such casualty insurance exceed the standard premium
rates because the nature of Tenant's operations result in
extra-hazardous exposure, then Tenant shall upon receipt of
appropriate premium invoices reimburse Landlord for such increases
in such premium; provided that this provision shall not be
construed so as to allow or permit, and Tenant hereby agrees not to
(i) use, or allow the use of, the Leased Premises for any hazardous
use, or (ii) allow, install, store or permit any hazardous or
regulated materials on or in the Leased Premises without in each
instance the Landlord's express written consent. Tenant shall
maintain at its expense, in an amount equal to the full replacement
cost, fire and extended coverage insurance on all of its personal
property, including removable trade fixtures, located in the Leased
Premises and in such additional amounts as are required to meet
Tenant's obligations pursuant to Section 20 hereof.
18.2 Tenant. Tenant shall, during the Term and at its sole
expense, obtain and keep in force, with Tenant, Landlord, and the
mortgagees of Landlord, named as insureds, as their respective
interests may appear, (i) comprehensive general liability insurance
coverage, personal injury, bodily injury, broad form property
damage, operations hazard, owner's protective coverage, contractual
liability and products and completed operations liability in limits
not less than $1,000,000.00 inclusive, and (ii) fire and extended
coverage insurance for Tenant's property (personal property,
fixtures and leasehold improvements in excess of Landlord's Work)
in or on the Leased Premises for the full replacement value
thereof.
18.3 Insurance -- General. All policies of insurance to be
provided or obtained by Tenant under this Lease Agreement shall (i)
name Landlord and mortgagees of Landlord as additional insureds,
and (ii) provide for notice to Landlord at least thirty (30) days
before any cancellation or termination of said insurance. Tenant
shall, upon request of Landlord, furnish Landlord with certificates
of insurance evidencing Tenant's compliance with the provisions of
this Section 19.
18.4 Subrogation. Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant each hereby waives (to the
extent that the party sustaining such loss is compensated by
insurance proceeds) any and all rights of recovery, claim, action
or cause of action, against the other, its agents, officers, or
employees, for any loss or damage that may occur to the Leased
Premises, or any improvements thereto, or the Property, or any
personal property of such party therein, by reason of fire, the
elements, or any other cause which would be insured against under
the terms of the fire and extended coverage insurance policies
referred to in Sections 18.1 and 18.2 above, regardless of cause or
origin, including negligence of the other party hereto, its agents,
officers or employees, and covenants that no insurer shall hold any
right of subrogation against such other party, and to procure a
waiver of subrogation on the part of each of their insurers by an
endorsement to all insurance policies whereby an insurer recognizes
the agreements made by the Landlord and Tenant in this Section
18.4; provided, however, this Section 189.4 shall be inapplicable
if it would have the effect, but only to the extent that it would
have the effect of invalidating any insurance coverage of Landlord
or Tenant.
19. CASUALTY DAMAGE.
If the Leased Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice
thereof to Landlord. In case the Building shall be so damaged that
the substantial alteration or reconstruction of the Building shall,
in Landlord's sole opinion, be required (whether or not the Leased
Premises shall have been damaged by such casualty) or in the event
any mortgagee of Landlord's should require that the insurance
proceeds payable as a result of a casualty be applied to the
payment of the mortgage debt or in the event of any material
uninsured loss to the Building, Landlord may, at its option,
terminate this Lease Agreement by notifying Tenant in writing of
such termination within ninety (90) days after the date of such
damage. If Landlord does not thus elect to terminate this Lease
Agreement, Landlord shall commence and proceed with reasonable
diligence to restore the Building to substantially the same
condition in which it was immediately prior to the happening of the
casualty, except that Landlord's obligation to restore shall not
exceed the scope of the work required to be done by Landlord in
originally constructing the Building and as set forth in the Work
Letter, nor shall Landlord be required to spend for such work an
amount in excess of the insurance proceeds actually received by
Landlord as a result of the casualty. When the Leased Premises
have been restored by Landlord to the extent of the Landlord's Work
set forth in the Work Letter, Tenant shall complete the restoration
of the Leased Premises, including the reconstruction of all
improvements in excess of the Landlord's Work and the restoration
of Tenant's furniture and equipment. Landlord shall not be liable
for any inconvenience or annoyance to Tenant or injury to the
business of Tenant resulting in any way from such damage or the
repair thereof, except that, subject to the provisions of the next
sentence, Landlord shall allow Tenant a fair diminution of rent
during the time and to the extent the Leased Premises are unfit for
occupancy. If the Leased Premises or any other portion of the
Building be damaged by fire or other casualty resulting from the
fault or negligence of Tenant or any of Tenant's agents, employees,
or invitees, the rent hereunder shall not be diminished during the
repair of such damage, and Tenant shall be liable to Landlord for
the cost of the repair and restoration of the Building and the
Leased Premises caused thereby to the extent such cost and expense
is not covered by insurance proceeds under policies provided by
either Landlord or Tenant hereunder. If Landlord has elected to
repair and reconstruct the Leased Premises, then the Term shall be
extended by a period of time equal to the period of such repair and
reconstruction.
20. CONDEMNATION.
If the whole or substantially the whole of the Building or the
Leased Premises should be taken for any public or quasi-public use,
by right of eminent domain or otherwise or should be sold in lieu
of condemnation, then this Lease Agreement shall terminate as of
the date when physical possession of the Building or the Leased
Premises is taken by the condemning authority. If less than the
whole or substantially the whole of the Building or the Leased
Premises is thus taken or sold, Landlord (whether or not the Leased
Premises are affected thereby) may terminate this Lease Agreement
by giving written notice thereof to Tenant, in which event this
Lease Agreement shall terminate as of the date when physical
possession of such portion of the Building or Leased Premises is
taken by the condemning authority. If this Lease Agreement is not
so terminated upon any such partial taking or sale, the rent
payable hereunder shall be diminished by an equitable amount based
on the portion of the Leased Premises taken, if any, and Landlord
shall, to the extent Landlord deems feasible, restore the Building
and the Leased Premises to substantially their former condition,
but such work shall not exceed the scope of the work done by
Landlord in originally constructing the Building and as set forth
in the Work Letter, nor shall Landlord in any event be required to
spend for such work an amount in excess of the amount received by
Landlord as compensation for such damage. All amounts awarded upon
a taking of any part or all of the Building or the Leased Premises
shall belong to Landlord, and Tenant shall not be entitled to and
expressly waives all claim to any such compensation, including any
award or ascertainment for the value of Tenant's leasehold estate,
which value is hereby assigned to the Landlord. If this Lease
should be terminated under any provision of this Section 21, Rent
shall be payable up to the date that possession is taken by the
taking authority, and Landlord will refund to Tenant any prepaid,
unaccrued Rent less any sum then owing by Tenant to Landlord.
21. INDEMNITY.
21.1 Indemnification by Tenant. Tenant will indemnify Landlord
for, and hold harmless Landlord from and against (a) all fines,
suits, claims, demands, liabilities, and actions (including costs
and expenses of defending against all such actions) resulting or
alleged to result from any breach, violation or nonperformance of
any covenant or condition hereof by Tenant, and (b) all claims,
demands, actions, damages, loss, cost, liabilities, expenses and
judgments suffered by, recovered from or asserted against Landlord
on account of injury or damage to person or property to the extent
that any such damage or injury may be incident to, arise out of, or
be caused by an act, omission, negligence or misconduct on the part
of Tenant or any of its agents, servants, employees, contractors,
patrons, guests, licensees or invitees or of any other person
entering upon the Leased Premises under or with the express or
implied invitation or permission of Tenant or when any such injury
or damage is the result, proximate or remote, of the violation by
Tenant or any of it agents, servants, employees, contractors,
patrons, guests, licensees or invitees of any law, ordinance or
governmental order of any kind or of any of the Rules and
Regulations included in this Lease (as such Rules and Regulations
may hereafter at any time or from time to time be amended or
supplemented), or when any such injury or damage may in any other
way arise from or out of the occupancy or use by Tenant, its
agents, servants, employees, contractors, patrons, guests,
licensees or invitees of the Leased Premises.
21.2 Indemnification by Landlord. Landlord will indemnify Tenant
for, and hold harmless Tenant from and against (a) all fines,
suits, claims, demands, liabilities, and actions (including costs
and expenses of defending against all such actions) resulting or
alleged to result from any breach, violation or nonperformance of
any covenant or condition hereof by Landlord, and (b) all claims,
demands, actions, damages, loss, cost, liabilities, expenses and
judgments suffered by, recovered from or asserted against Tenant on
account of injury or damage to person or property to the extent
that any such damage or injury may be incident to, arise out of, or
be caused by an act, omission, negligence or misconduct on the part
of Landlord or any of its agents, servants, employees or
contractors, or when any such injury or damage is the result,
proximate or remote, of the violation by Landlord or any of it
agents, servants, employees or contractors of any law, ordinance or
governmental order of any kind.
21.3 No Liability. Neither Landlord nor Tenant shall be
responsible or liable to the other, their respective officers,
employees, agents, contractors, subcontractors, customers or
invitees, for bodily injury, death or property damage to the extent
occasioned by the acts or omissions of any other tenant in the
Building or such tenant's officers, employees, agents, contractors,
subcontractors, customers or invitees within the Building.
22. DAMAGES FROM CERTAIN CAUSES.
Landlord shall not be liable to Tenant for any loss or damage
to any property, or injury to or death of any person, occasioned by
theft, fire, act of God or the public enemy, injunction, riot,
strike, insurrection, war, requisition or order of governmental
body or authority or any other cause beyond the control of
Landlord.
23. EVENTS OF DEFAULT/REMEDIES.
23.1 Events of Default by Tenant. In the event of any failure of
Tenant to pay any rental or other sums of money when due hereunder;
or any failure to observe or perform any other of the terms,
conditions or covenants of this Lease, including but not limited to
the Building Rules, to be observed or performed by Tenant for more
than ten (10) days after written notice thereof shall have been
given to Tenant; or if the Tenant's leasehold interest shall be
taken on execution or other process of law against Tenant; or if
Tenant or an agent of Tenant shall falsify any report required to
be furnished to Landlord pursuant to the terms of this Lease; or if
Tenant shall fail to accept the Leased Premises, or to promptly
move into, take possession of, and operate its business on the
Leased Premises when the Leased Premises are substantially
complete; or if Tenant ceases to do business in or abandons any
substantial portion of the Leased Premises; or if Tenant should at
any time during the continuance of the Lease remove or attempt to
remove the goods, furniture, effects, improvements and personal
property brought thereon out of or from the Leased Premises (except
in the ordinary course of business), without having paid in full
all rent and other applicable charges which shall become due during
the term of this Lease; or, if Tenant or any Guarantor of this
Lease shall become bankrupt or insolvent, or file a petition in
bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all or a portion of
Tenant's or any Guarantor's property; or if a petition or answer
proposing the adjudication of Tenant or any Guarantor as a bankrupt
or its reorganization under any present or future federal or state
bankruptcy or similar law shall be filed in any court and such
petition or answer shall not be discharged or denied within sixty
(60) days after the filing thereof; or if Tenant or any Guarantor
makes an assignment for the benefit of creditors, or petitions for
or enters into an arrangement, or suffers this Lease to be taken
under any writ of execution, then, in any of such events, Tenant
shall be deemed in breach and default of this Lease and Landlord,
in its discretion and at its election, and in addition to all other
rights and remedies it may have in law or in equity, shall also be
entitled to those rights and remedies enumerated in Section 23.2
below.
23.2 Landlord's Remedies for Tenant Default. Subject to Section
23.5 hereof:
(a) In the event of a default by Tenant as set forth in
Section 23.1 of this Lease or in any other Section
of this Lease, the Landlord, at its option (without
further notice or demand of any kind to Tenant or
any other person except as hereinafter expressly
provided) shall have, in addition to all the legal
and equitable remedies, and the remedies described
elsewhere in this Lease, the following described
remedies:
(i) Landlord shall have the right to proceed by
attachment, suit or otherwise to collect any
delinquent rent or other amounts due Landlord
hereunder. In the event it is necessary for
Landlord to bring suit for rental payments or
other charges as they accrue or in order to
collect any damages, Landlord shall have the
right to allow such rental or deficiencies to
accumulate and to bring an action on several
or all of the deficiencies at one time. Any
such suit shall not prejudice in any way the
right of Landlord to bring a similar action
for subsequent rental or damage deficiencies.
(ii) Landlord may elect to accelerate the rent due
under this Lease by giving notice of such
election to Tenant and, in such event, Tenant
shall pay at once to Landlord a sum of money
equal to the rentals and other charges to be
paid by Tenant (as specified in Section
23.2(b) below) to Landlord for the balance of
the stated term of this Lease, and Landlord
shall have the right to proceed by attachment,
suit or otherwise to collect such sum or other
amounts due Landlord hereunder.
(iii) Landlord may elect to terminate this Lease by
written notice to Tenant specifying the date
the Lease will terminate, which shall not be
less than three (3) days after the giving of
such notice, and upon such date this Lease and
Lease Term shall end. Landlord may
immediately repossess the Leased Premises and
Tenant shall pay at once to Landlord as
damages a sum of money equal to the rentals
and other charges to be paid by Tenant (as
specified in Section 23.2(b) below) to
Landlord for the balance of the stated term of
this Lease, and Landlord shall have the right
to proceed by attachment, suit or otherwise to
collect such sum or other amounts due Landlord
hereunder.
(iv) Landlord may elect to terminate Tenant's right
of possession without terminating this Lease,
in which event Tenant agrees to surrender
possession and vacate the Leased Premises
immediately and deliver the possession to
Landlord, and Tenant hereby grants Landlord
full and free license to enter in and upon the
Leased Premises or any part thereof, and to
expel or remove Tenant or any other person or
party who may be occupying or within the
Leased Premises or any part thereof, and
remove any and all property therefrom. Such
property may be removed and stored in a public
warehouse or elsewhere at the cost of and for
the account of Tenant without terminating this
Lease or releasing Tenant in whole or in part
from Tenant's obligations to pay rent and
other charges and perform any of the
covenants, conditions and agreements to be
performed by Tenant as provided in this Lease
and without being deemed in any manner guilty
of trespass, eviction or forcible entry or
detainer, and without becoming liable for any
loss or damage which may be occasioned
thereby, and without relinquishing Landlord's
rights as herein provided. If Landlord
re-enters the Leased Premises without
terminating this Lease, then Landlord may
relet the Leased Premises or any part or parts
thereof, either in the name of Landlord,
Tenant or otherwise, for a term which may at
Landlord's option be less than or exceed the
period which would otherwise have constituted
the balance of the Lease Term and upon such
other terms and conditions as Landlord, in its
sole discretion, may deem advisable. Tenant
or the legal representative of Tenant shall
pay Landlord for each month of the period
which would otherwise have constituted the
balance of the Lease Term, any deficiency
between (i) one monthly installment of Rent
that would have been payable for the month in
question but for such re-entry or termination,
and all charges that otherwise would have
become due, and (ii) the net amount, if any,
of the rents collected on account of the lease
or leases of the Leased Premises for each
month of the period which would otherwise have
constituted the balance of the Lease Term. The
refusal or failure of Landlord to relet the
Leased Premises or any part or parts thereof
shall not release or affect Tenant's liability
for damages; provided, however, that Landlord
shall use reasonable efforts to relet the
Leased Premises. There shall be added to the
said deficiency such expenses as Landlord may
incur in connection with any reletting (such
as court costs, reasonable attorneys' fees and
disbursement, brokerage and expenses for
putting and keeping the Leased Premises in
good order or for preparing the same for
reletting). Any deficiency shall be paid in
monthly installments by Tenant on the rent day
specified in this Lease and any suit brought
to collect the amount of the deficiency for
any month shall not prejudice in any way the
rights of Landlord to collect the deficiency
for any subsequent month by a similar
proceeding. No such re-entry or taking
possession of the Leased Premises by Landlord
shall be construed as an election on its part
to terminate this Lease unless a written
notice of such termination be given to Tenant
or unless the termination thereof be decreed
by a court of competent jurisdiction. Any
amount collected by Landlord from subsequent
tenants in excess of that provided for in this
Lease for the same rental period shall be
credited to Tenant in reduction of Tenant's
liability for any rental period in which the
amount collected by Landlord shall be less
than that provided for by this Lease, but
Tenant shall only be entitled to receive any
such excess rentals at the end of the Lease
Term and without interest. In all events
Landlord may terminate the Lease for such
breach at any time thereafter and after such
termination Tenant shall not be entitled to
any claim whatsoever, of any kind or nature,
for any excess rental that may be collected by
Landlord. The reletting of the Leased
Premises beyond the date originally fixed for
expiration of the term of the Lease shall not
be deemed to release Tenant from his
obligations hereunder. An election to
re-enter the Leased Premises (without
terminating the Lease) and the reletting or
not reletting of the Leased Premises shall not
thereafter prevent Landlord from electing to
terminate the Lease for such previous breach.
In the event it is necessary for Landlord to
bring suit for such rental payments or other
charges as they accrue or in order to collect
any damages, Landlord shall have the right to
allow such rental or deficiencies to
accumulate and to bring an action on several
or all of the deficiencies at one time. Any
such suit shall not prejudice in any way the
right of Landlord to bring a similar action
for subsequent rental or damage deficiencies.
(b) For purposes of computing the rentals and other
charges due in the event that Landlord elects to
accelerate the rents hereunder pursuant to Section
23.2(a)(ii), or elects to terminate this Lease
pursuant to Section 23.2(a)(iii), the rental
payments payable to Landlord under this Lease shall
include the monthly Rent and other charges due
monthly hereunder. In addition, damages shall
include interest on past due rentals and other
charges and Landlord's court costs and reasonable
attorneys fees incurred in connection with the
termination of this Lease because of Tenant's
breach.
(c) If Tenant defaults in any of its obligations
hereunder, then Landlord, to the extent not
otherwise recovered, shall be entitled to recover
its reasonable attorneys' fees and court costs
incurred by reason of Tenant's default. If Tenant
shall default under any of the terms and provisions
of this Lease on its part to be performed or
observed, Landlord shall be entitled to interest on
any monies expended on behalf of Tenant and any
costs or expenses incurred by Landlord, at a rate
per annum equal to the interest rate set forth in
Section 4.
(d) In addition to the above-mentioned remedies, and in
no way limiting, excluding or waiving any remedy
available to Landlord as a result of a default by
Tenant, Landlord shall be entitled, upon Tenant's
default pursuant to Section 23.1, to sue for and
recover from Tenant an amount equal to the sum of
all Base Rental abatements, tenant finish
allowances and all other concessions received by
Tenant prior to such event of default
(collectively, "Tenant Concessions"); and any
Tenant Concessions that would benefit Tenant after
the occurrence of an event of default shall
automatically be deemed terminated as of the date
of the occurrence of such event of default.
23.3 Landlord's Remedies are Cumulative. All the remedies of
Landlord in the event of Tenant default shall be cumulative and, in
addition, Landlord may pursue any other remedies permitted by law
or in equity. Forbearance by Landlord to enforce one or more of
the remedies upon an event of default shall not constitute a waiver
of such default.
23.4 Obligation to Pay Rent is Independent; No Setoff. The
obligation of Tenant to pay all Rent provided to be paid by Tenant
and the obligations of Tenant to perform Tenant's other covenants
and duties hereunder constitute independent and unconditional
obligations to be performed at all times provided for hereunder,
save and except only when an abatement thereof or reduction therein
is herein above expressly provided for and not otherwise. Tenant
waives and relinquishes all rights which Tenant might have to claim
any nature of lien against, withhold, deduct or offset against, any
Rent and other sums provided hereunder to be paid Landlord by
Tenant.
23.5 Special Rights of Depository Institution Supervisory
Authority. Notwithstanding any other provisions contained in this
Lease, in the event (a) Tenant or its successors or assignees shall
become insolvent or bankrupt, or if it or their interests under
this Lease shall be levied upon or sold under execution or other
legal process, or (b) the depository institution then operating on
the Leased Premises is closed, or is taken over by any depository
institution supervisory authority ("Authority"), Landlord may, in
either such event, terminate this Lease only with the concurrence
of any Receiver or Liquidator appointed by such Authority;
provided, that in the event this Lease is terminated by the
Receiver or Liquidator, the maximum claim of Lessor for rent,
damages, or indemnity for injury resulting from the termination,
rejection, or abandonment of the unexpired Lease shall by law in no
event be in an amount greater than all accrued and unpaid rent to
the date of termination.
24. PEACEFUL ENJOYMENT.
24.1 Rights of Tenant. Subject to the other terms hereof
including, without limitation, the provisions of Section 27.1,
Tenant shall and may peacefully enjoy the Leased Premises against
all persons claiming by, through or under Landlord, provided that
Tenant pays the rent and other sums herein recited to be paid by
Tenant and performs all of Tenant's covenants and agreements in
this Lease Agreement.
24.2 Limitation. The foregoing covenant and any and all other
covenants of the Landlord shall be binding upon Landlord and its
successors only with respect to breaches occurring during its or
their respective periods of ownership of the Leased Premises.
Tenant specifically acknowledges that Landlord will make repairs,
alterations and improvements to the Building from time to time
("Building Work"), and that such Building Work may create noise
audible within the Leased Premises and dust and noise within the
common areas of the Building. Tenant agrees that Landlord shall
have the right from time to time to conduct such Building work, and
that such noise and dust related to the Building Work shall not be
deemed or claimed by Tenant to be a nuisance, a breach or
disturbance of the Tenant's right of peaceful and quiet enjoyment,
a breach of any of the Landlord's obligations hereunder, or any
sort of constructive eviction.
25. HOLDING OVER.
25.1 Rental Amount. If Tenant holds over without Landlord's
written consent after expiration or other termination of this Lease
Agreement, or if Tenant continues to occupy the Leased Premises
after termination of Tenant's right of possession pursuant to the
provisions of Section 23.2, Tenant shall throughout the entire
holdover period pay rent equal to twice the Rent that would have
been applicable had the term of this Lease Agreement continued
through the period of such holding over by Tenant.
25.2 No Extension of Term. No possession by Tenant after the
expiration of the term of this Lease Agreement shall be construed
to extend the term of this Lease Agreement unless Landlord has
consented to such possession in writing.
26. SUBORDINATION.
26.1 Subject to Mortgages and Certain Leases. This Lease Agreement
is and shall be subject and subordinate to any mortgage, or other
lien created by Landlord, whether now existing or hereafter arising
upon the Leased Premises, or upon the Building and to any renewals,
refinancing and extensions thereof, and to any ground or primary
lease in existence at the date hereof, if any, or that may be
executed subsequent to the date hereof, and to any and all
supplements, modifications and extensions thereof heretofore or
hereafter made, but Tenant agrees that any such mortgagee or lessor
shall have the right at any time to subordinate such mortgage, or
the lien thereof, or such lease to this Lease Agreement on such
terms and subject to such conditions as such mortgagee or lessor
may deem appropriate in its discretion.
26.2 Subordination of Lease Agreement. Tenant agrees upon demand
to execute such further instruments subordinating this Lease
Agreement to any mortgage or other lien or ground or primary lease
now existing or hereafter placed upon the Leased Premises or the
Building as a whole, or attorning to the holder of any such liens
or leases, as Landlord may request.
26.3 Approval of Lease Agreement by Landlord's Mortgagee. The
terms of this Lease Agreement are subject to approval by the
Landlord's mortgagee(s), and such approval is a condition precedent
to Landlord's obligations hereunder.
26.4 Attorney-in-Fact. If Tenant should fail to execute any
subordination or other agreement required by this Section 26,
promptly as requested, Tenant hereby irrevocably constitutes
Landlord as its attorney-in-fact to execute such instrument in
Tenant's name, place and stead, it being agreed that such power is
one coupled with an interest.
26.5 Estoppel Certificates; Financial Certificates. Tenant agrees
that it will from time to time upon request by Landlord execute and
deliver to such persons as Landlord shall request, a statement in
recordable form certifying that this Lease Agreement is unmodified
and in full force and effect (or if there have been modifications,
that the same is in full force and effect as so modified), stating
the dates to which rent and other charges payable under this Lease
Agreement have been paid, stating that Landlord is not in default
hereunder (or if Tenant alleges a default stating the nature of
such alleged default) and further stating such other matters as
Landlord or such persons shall reasonably require. At any time
upon Landlord's request, Tenant agrees to deliver to Landlord
current financial statements of Tenant (with an opinion by a
certified public accountant (if available)), including a balance
sheet and a profit and loss statement for at least two (2) years,
all prepared in accordance with generally accepted accounting
principles consistently applied.
26.6 Attornment. Tenant shall, in the event of the sale or
assignment of Landlord's interest in the building of which the
Leased Premises form a part, or in the event of any proceedings
brought for the foreclosure of, or in the event of exercise of the
power of sale under, any mortgage made by Landlord covering the
Leased Premises, attorn to the purchaser and recognize the
purchaser as Landlord under this Lease Agreement.
26.7 Notice to Mortgagees. In the event of any act or omission by
Landlord which would give Tenant the right to damages from Landlord
or the right to terminate this Lease by reason of a constructive or
actual eviction from all or part of the Leased Premises or
otherwise, Tenant shall not sue for such damages or exercise any
such right to terminate until (a) it shall have given written
notice of such act or omission to Landlord and to the holder(s)
(collectively, the "Landlord's Mortgagee") of the indebtedness or
other obligations secured by any first mortgage or first deed of
trust affecting the Leased Premises, if the name and address of the
Landlord's Mortgagee shall previously have been furnished to Tenant
and (b) a reasonable period of time for remedying such act or
omission shall have elapsed following the giving of such notice,
during which time Landlord and Landlord's Mortgagee, or either of
them, their agents or employees, shall be entitled to enter upon
the Leased Premises and do therein whatever may be necessary to
remedy such act or omission. During the period after the giving of
such notice and during the remedying of such act or omission, the
Rent payable by Tenant for such period as provided in this Lease
shall be abated and apportioned only to the extent that any part of
the Leased Premises shall be untenantable.
27. ATTORNEY'S FEES.
Tenant will pay, in addition to the rents and other sums
agreed to be paid hereunder, all collection and court costs
incurred by Landlord, and Landlord's reasonable attorney's fees
incurred for the collection of unpaid rents or the enforcement,
defense or interpretation of Landlord's rights under this Lease
Agreement, whether such fees and costs be incurred out of court, at
trial, on appeal or in bankruptcy proceedings.
28. NO IMPLIED WAIVER.
28.1 No Waiver. The failure of Landlord to insist at any time upon
the strict performance of any covenant or agreement or to exercise
any option, right, power or remedy contained in this Lease
Agreement shall not be construed as a waiver or a relinquishment
thereof for the future.
28.2 Partial Payment. No payment by Tenant or receipt by Landlord
of a lesser amount than the monthly installment of rent due under
this Lease Agreement shall be deemed to be other than payment on
account of the earliest rent due, nor shall any endorsement or
statement on any check or any letter accompanying any check or
payment as rent 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 rent or pursue any other
remedy provided in this Lease Agreement.
29. PERSONAL LIABILITY.
The liability of Landlord (and any partner, stockholder,
officer or director of Landlord) to Tenant for any default by
Landlord under this Lease Agreement shall be limited to the
interest of Landlord in the Building, and Tenant agrees to look
solely to Landlord's interest in the Building for the recovery of
any judgment from the Landlord, it being intended that Landlord
(and any partner, stockholder, officer or director of Landlord)
shall not be personally liable for any judgment or deficiency.
30. FORCE MAJEURE.
Whenever a period of time is herein prescribed for the taking
of any action by Landlord, Landlord shall not be liable or
responsible for, and there shall be excluded from the computation
of such period of time, any delays due to strikes, riots, acts of
God, shortages of labor or materials, war, governmental laws,
regulations or restrictions, financing, or any other cause
whatsoever beyond the control of Landlord.
31. RELATIONSHIP OF PARTIES.
Nothing contained in this Lease Agreement shall be deemed or
construed by the parties hereto, nor by any third party, as
creating the relationship of principal and agent or of partnership
or of joint venture between the parties hereto, it being understood
and agreed that neither the method of computation of rent, nor any
other provisions contained herein, nor any acts of the parties
herein, shall be deemed to create any relationship between the
parties hereto other than the relationship of Landlord and Tenant.
32. MISCELLANEOUS.
32.1 Severability. If any term or provision of this Lease
Agreement, or the application thereof to any person or circumstance
shall, to any extent, be invalid or unenforceable, the remainder of
this Lease Agreement or the application of such term or provision
to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Lease Agreement shall be valid and
enforced to the fullest extent permitted by law.
32.2 Recordation. Tenant agrees not to record this Lease Agreement
or any memorandum hereof without the prior written consent of
Landlord. Landlord may record this Lease Agreement or a memorandum
thereof, at its sole election. Tenant shall, upon request by
Landlord, at any time execute a short form lease in recordable form
setting forth the essential elements of this Lease, including, but
not limited to, the names of the parties, the term of the Lease and
the description of the Leased Premises.
32.3 Governing Law. This Lease Agreement and the rights and
obligations of the parties hereto are governed by the laws of the
state of Alabama.
32.4 Time of Performance. Except as may be otherwise expressly
provided herein, time is of the essence of this Lease Agreement
with respect to all obligations.
32.5 Commissions. Tenant warrants and represents to Landlord that
no real estate broker and/or salesman has been involved by Tenant
in this Lease, and hereby indemnifies and agrees to hold harmless
and defend Landlord against any loss, claim, expense or liability
with respect to any commissions or brokerage fees claimed on
account of the execution and/or renewal of this Lease Agreement due
to any action of the Tenant.
32.6 Parking. Landlord grants to Tenant the right to use forty-two
parking spaces in the surface parking located adjacent to the
Building.
32.7 Effect of Delivery of this Lease Agreement. Landlord has
delivered a copy of this Lease Agreement to Tenant for Tenant's
review only, and the delivery hereof does not constitute an offer
to Tenant or an option to lease. This Lease Agreement shall not be
effective until a copy executed by both Landlord and Tenant is
delivered to and accepted by Landlord.
32.8 Section Headings. The section or subsection headings are used
for convenience of reference only and do not define, limit or
extend the scope or intent of the sections or this Lease Agreement.
32.9 Entire Agreement. This Lease and any attached schedules,
exhibits and riders constitute the entire agreement between
Landlord and Tenant and no prior or contemporaneous oral promises
or representations shall be binding. This Lease shall not be
amended, changed or extended except by written instrument signed by
both parties hereto.
32.10 Successors and Assigns. All of the covenants, agreements,
terms and conditions to be observed and performed by the parties
hereto shall be applicable to and binding upon their respective
heirs, personal representatives, successors and, to the extent
assignment is permitted hereunder, their respective assigns.
32.11 Notices.
(a) To Landlord: The Tenant shall pay the rent and shall
forward all notices to Landlord at the following address
(or at such other place as Landlord may hereafter
designate in writing):
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
with a copy to:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
(b) To Tenant: The Landlord shall forward all notices to
Tenant at the following address (or at such other place
as Tenant may hereafter designate in writing):
VISION BANK
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
with a copy to:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
(c) Any notice provided for in this Lease Agreement must,
unless otherwise expressly provided herein, be in
writing, and may, unless otherwise expressly provided, be
given or be served by depositing the same in the United
States mail or overnight delivery service, postage or
charges prepaid, and addressed to the party to be
notified, or by delivering the same in person to an
officer of such party.
(d) Notice deposited in the mail or given to an overnight
delivery service in the manner hereinabove shall be
effective upon receipt, unless such mail or delivery is
unclaimed, in which event notice shall be effective five
(5) days after the date of mailing or delivery.
32.12 Gender. The pronouns of any gender shall include the other
genders, and either the singular or the plural shall include the
other.
32.13 Time of the Essence. In all instances where Tenant is
required hereunder to pay any sum or do any act at a particular
time or within an indicated period, it is understood that time is
of the essence.
32.14 Building Name. Landlord agrees that, so long as this Lease,
and any renewals or replacements hereto is in effect, the Building
shall be designated and known as the Vision Bank Building.
32.15 No Merger. There shall be no merger of this Lease or of the
leasehold estate hereby created with the fee estate in the Leased
Premises or any part thereof by reason of the fact that the same
person may acquire or hold, directly or indirectly, this Lease or
the leasehold estate hereby created or any interest in this Lease
or in such leasehold estate as well as the fee estate in the Leased
Premises or any interest in such fee estate.
33. EXHIBITS AND SCHEDULES.
In addition to Exhibit A and Schedule 1, the following
numbered exhibits are attached hereto and incorporated herein and
made a part of this Lease for all purposes:
Exhibit Number Description
Exhibit A Floor Plan of Lease Premises
Schedule I Work Letter Agreement
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease Agreement in multiple original counterparts effective as of
the day and year first above written.
LANDLORD:
_________
WITNESS: GULF SHORES INVESTMENT GROUP, LLC
__________________________ By:______________________________
Its:__________________________
TENANT:
_______
WITNESS OR ATTEST: VISION BANK
__________________________ By:______________________________
Its:__________________________
<PAGE>
Exhibit 21
1. Vision Bank (in organization), an Alabama banking corporation.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the incorporation by reference of our
report dated September 13, 1999, relating to the financial
statements of Vision Bancshares, Inc. in the Registration Statement
on Form SB-2, Amendment No. 1, and Prospectus, and to the reference
to our firm therein under the caption "Experts."
/s/ Mauldin & Jenkins
Albany, Georgia
November 12, 1999
