COMMERCIAL LEASE
AGREEMENT
THIS COMMERCIAL LEASE AGREEMENT (hereinafter
called the "Lease") is made this 17 day of June, 2008 by and
between Pierpont Slater Properties, which has as its address 5828
Old Bethlehem Pike, Center Valley, PA 18034, or its assignee or
nominee (the "Lessor")
AND
EMBASSY BANK
FOR THE LEHIGH VALLEY , a
Pennsylvania financial institution, which has as its address 100
Gateway Drive, Suite 100, Bethlehem, Pennsylvania 18017 (the
"Lessee").
1.
IMPROVED LEASED PREMISES . In consideration of the rents,
covenants and agreements set forth herein, and subject to the terms
and conditions of this Lease, Lessor hereby leases to Lessee those
certain premises located at Route 378 & Colesville Road, Lower
Saucon Township, Northampton County, PA (the "Improved Lease
Premises"). A description of said Improved Lease Premises is
attached hereto as Exhibit "A".
(a) Lessee's obligations
under this Lease are conditioned upon the approval of this Lease
and the location of such bank branch by the Pennsylvania Department
of Banking and the FDIC for which Lessee shall diligently and in
good faith apply immediately following the execution of this Lease
by the parties hereto. In the event such approvals are not obtained
within 180 days of the date of this Lease, this Lease shall be null
and void and all payments, if any, made by Lessee to Lessor shall
be refunded to Lessee without offset.
2.
TERM .
(a) The term of this
Lease for the Improved Leased Premises shall be Ten (10) years
commencing on the date Lessor has substantially completed the
improvements in accordance with Lessor's Work attached hereto as
Exhibit "B" and a certificate of occupancy is issued by the
applicable municipal authority (the "Commencement
Date").
(b) Lessee shall have the option to
extend the Term of this Lease for four successive five (5) year
terms (each, a "Renewal Term"), on the same terms and conditions
set forth herein, provided that the rental during the original Term
for each Renewal Term, commencing upon the fifth anniversary of the
Commencement Date (i.e. the sixth year of the lease Term) shall
increase at the rate of two and seventy five hundredths percent (
2.75%) per year and as provided in Section 4 hereof. Lessee may
exercise its right to renew the Lease Term by providing Lessor with
written notice of its option to renew the Lease not less than nine
(9) months prior to the expiration of the then current
Term or Renewal Term.
(c) Notwithstanding anything
to the contrary contained herein, the term of this lease
shall be such term that enables Lessee to report and account for
this lease as an operating lease, as that term is generally defined
for accounting purposes. In the event the term set forth above does
not permit such classification, or requires Lessee to report and
account for this lease as a capital lease, the parties shall
negotiate in good faith as to a revised term. If the parties are
unable to agree on the same, this lease shall be null and void and
all payments, if any, made by Lessee to Lessor shall be refunded to
Lessee without offset, excepting those Lease payments made based
upon Lessee's actual occupancy of the Premises.
3.
USE . Lessee shall use the Improved Leased Premises as an
Embassy Bank or any successor bank or, with Lessor's prior written
consent, for any other lawful purpose permitted under zoning and
other applicable laws, ordinances, and regulations.
4.
RENT .
(a) During the first year of
the Term, Lessee shall pay to Lessor as minimum annual rent the sum
of One Hundred Sixty Two Thousand Nine Hundred Dollars
($162,900.00), payable in equal monthly installments of Thirteen
Thousand Five Hundred Seventy Five Dollars ($13,575.00) each.
Thereafter, commencing upon the fourth anniversary of the
Commencement Date, for each Lease year during the Term and any
Renewal Term, minimum annual rent shall equal the minimum annual
rent payable in the immediately preceding Lease year, multiplied by
two and seventy five hundredths percent (2.75%) (e.g., the prior
year's rental plus an increase of 2.75%). Such minimum annual rent
shall be payable in advance, in equal monthly installments on the
first day of each calendar month during the term hereof, without
demand, offset or deduction, and shall be payable in lawful money
of the United States of America.
(b) This Lease is intended to
be a "triple net" lease. Accordingly, Lessee agrees to pay as
additional rent, all charges for utilities, taxes, assessments and
other governmental charges with respect to the Improved Leased
Premises and as may be further provided in this Lease. It is the
parties' intent that Lessee shall pay all such charges directly. In
the event Lessor shall receive any such charges, Lessor shall bill
Lessee for any such charges and Lessee shall promptly pay Lessor
for such charges upon invoice. In the event of nonpayment of
additional rent, Lessor shall have, in addition to all other rights
and remedies, all the rights and remedies provided for herein or by
law in the case of nonpayment of the minimum rent.
(c) For all purposes under
this Lease, rent shall mean both minimum and additional rent. Rent
shall be delivered to Lessor at Lessor's address as set forth
above, or at such other place or to such other person as Lessor may
designate in writing from time to time.
(d) Any and all rent payments
payable under this Lease Agreement shall be paid to Lessor at an
account or accounts maintained at Embassy Bank For The Lehigh
Valley.
(e) Lessor shall provide
Lessee with a LESSEE improvement allowance of One Hundred and Fifty
Thousand Dollars ($150,000.00) for use exclusively for LESSEE fit
out of the Premises.
5.
ALTERATIONS AND IMPROVEMENTS.
(a) Lessee shall not make or
cause to be made any alterations, additions or improvements to the
Improved Leased Premises without the prior written consent of
Lessor. All alterations, additions or improvements approved by
Lessor shall be made solely at Lessee's expense by a contractor
approved by Lessor, shall be made in a good and workmanlike manner
and shall be performed in compliance with all laws, ordinances and
requirements of any and all Federal, State, Municipal and/or other
authorities, the Board of Fire Underwriters and any mortgages to
which the Improved Leased Premises is subject. Any alteration,
addition or improvement made by Lessee under this Section 5, and
any fixtures installed as a part thereof, shall, at Lessor's
option, become the property of Lessor upon the expiration or other
termination of this Lease. Lessor shall have the right, however, to
require Lessee to remove such fixtures at Lessee's cost upon such
termination of this Lease, and Lessee shall promptly remove the
same and repair any damage to the Improved Leased Premises caused
by such removal.
(b) In the event of a lien or
claim of any kind, arising out of the exercise of the rights set
forth hereunder by Lessee, its agents, employees, contractors,
subcontractors, and materialmen, being filed against the interest
of Lessor, any mortgagee and/or against the Improved Leased
Premises, Lessee covenants and agrees that at its expense it will
within thirty (30) days after written notice from Lessor, cause the
Improved Leased Premises and any such interest therein to be
released from the legal effect of such lien or claim, either by
payment or by posting of bond or by the payment into court of the
amount necessary to relieve and release the Improved Leased
Premises or the interest from such claim or in any manner
satisfactory to Lessor and any mortgagee. If Lessee desires to
contest the validity of any lien or claim, Lessee may do so upon
Lessor's prior written consent, provided Lessee sustains the cost
of such contest, and Lessee remains liable to pay or discharge any
lien or claim deemed to be due or payable. Lessee hereby
indemnifies and holds Lessor harmless against any and all
liability, loss or damage sustained by Lessor by reason of such
contest, unless such contest arises from any negligent or
intentional act or omission of Lessor.
6.
UTILITIES . Lessee shall pay, when the same shall become
due, all charges for utilities consumed by it on the Improved
Leased Premises including without limitation electricity, heat and
telephone, and any other utilities, as well as water and sewer
charges, provided such utilities shall be separately metered as to
the Improved Leased Premises. In the event any such utilities shall
not be separately metered, but rather shared with another LESSEE or
with Lessor, the parties hereto shall provide for a mechanism of
equitably allocating the cost of such utility(s). Lessor shall not
be required to furnish to Lessee any utility, janitorial or other
service of any kind whatsoever during the Term of this Lease.
Notwithstanding the preceding, Lessor shall be responsible for all
costs, including parts, labor and municipal assessments, related to
the Leased Premises' "tie in" or "hook up" to the public sewer
system.
7.
MAINTENANCE AND REPAIRS . Lessor has made no representations
concerning the condition of the Improved Leased Premises other than
that the improvements will be completed in accordance with the
agreement between the parties as referred to in Exhibit B hereof.
Lessee shall maintain and be responsible for maintaining and
repairing all portions of the Improved Leased Premises. Lessee, at
its sole cost and expense, shall take good care of the Improved
Leased Premises and will maintain the same in good order and
condition, ordinary wear and tear excepted, and make all necessary
repairs thereto, interior as well as exterior, including and
without limiting the generality of the foregoing, roof and
structural members, including walls, unless such repairs or
maintenance shall be caused by the negligence or willful misconduct
of Lessor, either in connection with the construction thereof or by
any act or omission subsequent to such construction. Lessee shall
be responsible for the routine regular cleaning of the Improved
Leased Premises, and shall keep all portions of the Improved Leased
Premises in a clean and orderly condition, free of unlawful
obstruction, and shall not permit or cause any damage, waste or
injury to the building or other improvements on the Improved Leased
Premises.
8.
REFUSE REMOVAL . Lessee shall provide for its own garbage,
rubbish and refuse disposal and agrees to keep the Improved Leased
Premises free and clear of debris. Lessee agrees to keep all
rubbish, garbage and refuse in covered containers within the
Improved Leased Premises (or at such other location identified by
Lessor) and to have the same removed regularly.
9.
COMPLIANCE . With regard to its use of the Improved Leased
Premises, Lessee shall, at its own expense, comply with all laws,
rules, orders, regulations, and requirements of all Federal, State,
and municipal governments, courts, departments, commissions,
boards, and officers having jurisdiction over the Improved Leased
Premises, the lawful orders, rules, and regulations of the Board of
Fire Underwriters having jurisdiction over the Improved Leased
Premises, any mortgages to which the Improved Leased Premises is
subject, and any rules and regulations of Lessor. Lessee shall have
the right to contest by appropriate legal proceedings, diligently
pursued, without cost or expense to Lessor, the validity of any
governmental law, rule, order, regulation or requirement. Lessee
hereby indemnifies and holds Lessor harmless against any and all
liability, loss, or damage sustained by Lessor by reason of such
contest. Notwithstanding any of the foregoing, Lessee shall
promptly comply with any such law, rule, order, regulation or
requirement if at any time the Improved Leased Premises or any part
thereof shall then be immediately subject to forfeiture or Lessee
shall be subject to criminal liability for non-compliance
therewith.
10.
TAXES . Lessee shall pay as and when the same shall become
due all real property taxes, assessments and other governmental
charges assessed against the Improved Leased Premises during the
Term of this Lease. Lessee shall have the right to contest by
appropriate legal proceedings, diligently pursued, without cost or
expense to Lessor, the validity of any such tax, assessment or
other governmental charge. Lessee hereby indemnifies Lessor against
any and all liability, loss or damage sustained by Lessor by reason
of such contest. Notwithstanding any of the foregoing, Lessee shall
promptly pay any such tax, assessment or other government charge if
at any time the Improved Leased Premises or any part thereof shall
then be immediately subject to forfeiture or Lessee shall be
subject to any criminal liability for nonpayment
thereof.
11.
SURRENDER OF IMPROVED LEASED PREMISES . Lessee covenants
that upon the termination or expiration of this Lease or any
renewal thereof, Lessee shall surrender the Improved Leased
Premises in good order and condition and shall surrender all keys
to the Improved Leased Premises to Lessor at the place then fixed
for the payment of rent. This covenant shall survive termination of
this Lease.
12.
RIGHT OF ENTRY . Upon prior notice and in the presence of an
authorized representative of Lessee (whom Lessee agrees to provide
upon such notice received from Lessor), Lessor and/or its agents
shall have the right to enter upon and inspect the Improved Leased
Premises at all reasonable times and to exhibit the Improved Leased
Premises to prospective purchasers and prospective LESSEEs (but in
this case, only during the last six (6) months of the term of this
Lease). Lessor shall be permitted to affix a "To Let" or "For Sale"
sign on the Improved Leased Premises during the last ninety (90)
days of the term of this Lease in such place as shall not interfere
with the business then being conducted at the Improved Leased
Premises. Lessor acknowledges that Lessee shall operate the
Improved Leased Premises as a bank, and therefore any inspection or
entry upon the Improved Leased Premises shall only occur if all
appropriate security measures shall be complied with.
13.
SIGNS . Lessee shall have the right to Install and maintain
on the Improved Leased Premises such signs and advertising matter
as Lessee may reasonably desire, subject to the prior consent of
Lessor. Lessee shall comply with any laws or ordinances with
respect to such signs or advertising, and shall obtain any
necessary permits. Lessee agrees to maintain such signs or
advertising in good condition, and to repair any damage which may
be caused by erection, maintenance, repair or remo
