AGREEMENT OF SALE

Exhibit 10 (p)

AGREEMENT OF SALE

THIS AGREEMENT OF SALE is made as of June 1, 2005, between DNB FIRST, NATIONAL ASSOCIATION (formerly known as Downingtown National Bank), with principal place of business at 4 Brandywine Avenue, Downingtown, PA 19335 (the “ Seller ”), and PAPERMILL BRANDYWINE COMPANY, LLC, a Pennsylvania limited liability company with principal place of business at 521 West Lancaster Avenue, Haverford, PA 19041 (the “ Buyer ”).

Background

A. Seller is the sole and exclusive owner in fee simple of certain premises comprising approximately 0.9 acres of ground, with improvements, known as Tax Map Parcel Nos. 1108004900, 1108005000 and 1108005001, situate on Brandywine Avenue, in the Borough of Downingtown, Chester County, Commonwealth of Pennsylvania (collectively, the “ Premises ”).

B. Buyer wishes to purchase and Seller wishes to sell the Premises on the terms and conditions hereinafter set forth.

NOW, THEREFORE, the parties hereto, each intending to be legally bound hereby, do mutually covenant and agree as follows:

1. Sale . Seller agrees to sell, and Buyer agrees to purchase, the Premises upon the terms and conditions of this Agreement. Notwithstanding anything herein to the contrary, all machinery, equipment and fixtures used in Seller’s business which are not an integral part of the Premises, now or hereafter located on the Premises, are agreed by the parties not to constitute fixtures (whether or not physically appended to the Premises) and such assets are not being sold to Buyer hereunder and do not constitute part of the Premises.

2. Purchase Price; Deposit; Financing .

(a) The Purchase Price of the Premises shall be One Million Seven Hundred Thousand Dollars ($1,700,000.00), payable in collected funds at “Settlement” (as hereinafter defined).

(b) Buyer is depositing with Seller this date, in collected funds, the sum of $170,000.00 (10% of the Purchase Price) on account of part of the Purchase Price (the “Deposit”). Seller will credit Buyer with the amount of the Deposit against the Purchase Price at Settlement. Seller shall segregate the Deposit in a non-interest, demand deposit account that identifies it as an escrow account relating to this Agreement. Seller shall not be permitted or obligated to, disburse the Deposit except upon (i) the joint written consent of Seller, of the one part, and Buyer or Buyer’s legal counsel, of the other part, or (ii) court order.

(c) Buyer shall not be obligated to complete Settlement under this Agreement if Seller does not provide Buyer with purchase money mortgage financing (the “Mortgage Loan”) on terms and conditions of a loan commitment (the “Loan Commitment”) consistent with the term sheet attached hereto as Exhibit A . Buyer and Seller mutually acknowledge and agree that

 

 

 

the foregoing provisions for the Mortgage Loan are material inducements to each party to enter into this Agreement. Notwithstanding any other provision of this Agreement: (i) a failure to close on the Mortgage Loan due to a material breach by Seller of the terms or conditions of the Loan Commitment shall be deemed a “Seller Default” (as hereinafter defined); (ii) a failure to close on the Mortgage Loan due to a material breach by Buyer of the terms or conditions of the Loan Commitment shall be deemed a “Buyer Default” (as hereinafter defined). A failure to close on the Mortgage Loan that is due to neither a material breach by Seller nor a material breach by Buyer of the terms or conditions of the Loan Commitment shall not be a Buyer Default or a Seller Default but shall be deemed a termination of this Agreement by mutual agreement and in such case Seller shall refund the Deposit to Buyer, without interest, and thereupon the parties shall have no further liability to each other whatsoever.

3. Settlement . Settlement hereunder (“Settlement”) shall be held at the offices of Stradley, Ronon, Stevens & Young, LLP, 30 Valley Stream Parkway, Malvern, PA 19355 or such other place as the parties may mutually designate, at a date and time mutually agreeable to the Buyer and Seller, but in any event on or before the date that is the earlier of (i) fifteen (15) days following issuance of final, unappealable development approvals for the proposed development of the adjoining property owned by Papermill Brandywine Company, LLC, and (ii) December 1, 2005 (the “Settlement Date”).

(a) Seller shall convey good and marketable title to the Premises, free and clear of all liens, restrictions, easements, encumbrances, leases, tenancies and other title objections, except for (i) existing building restrictions of record, (ii) ordinances, (iii) easements of record, (iv) privileges and rights of service companies, (iv) facts which an accurate survey may disclose, (v) other matters of record or conditions visible upon the ground, and (vi) the other specific exceptions or matters, if any, listed on Schedule 4 attached hereto and made part hereof, or insurable as aforesaid at ordinary rates by a reputable title insurance company licensed to sell title insurance in Pennsylvania (“Title Company”) on an ALTA Owner’s Policy. Seller shall be responsible for removing all mortgages, liens and other monetary encumbrances granted by Seller that encumber the Premises.

(b) Title to the Premises shall be conveyed by Seller’s special warranty deed, subject as aforesaid (the “ Deed ”).

(c) In the event title to the Premises cannot be conveyed at Settlement as described in subsection (a) of this Section, Buyer shall have the option of (i) terminating this Agreement by written notice to Seller, and in such case Seller shall refund the Deposit to Buyer, without interest, and thereupon the parties shall have no further liability to each other whatsoever, or (ii) taking such title as Seller can convey without abatement of the Purchase Price.

(d) Seller shall be required to comply with all notices of violation of law or municipal ordinances, orders or other requirements imposed by any governmental entity, agency, or department having authority as to the Premises, which are sent or delivered prior to the date of this Agreement. Buyer shall be required to comply with all notices of violation of law or

 

 

 

municipal ordinances, orders or other requirements imposed by any governmental entity, agency, or department having authority as to the Premises, which are sent or delivered on or after to the date of this Agreement.

5. Seller’s Warranties, and Representations.   Seller makes no representation or warranty regarding the title to or condition of the Premises, except as expressly set forth herein, and Buyer agrees to accept the Premises, and all improvements, fixtures, equipment, and systems therein, in their present “AS IS” condition, subject to the condition for delivery of title at Settlement provided elsewhere in this Agreement. Buyer acknowledges that Seller has afforded Buyer free, complete and unrestricted access for purposes of conducting due diligence to the extent Buyer wishes to do so. Notwithstanding the foregoing, Seller represents and warrants to Buyer that:

(a) Seller is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America and is qualified to do business in the Pennsylvania. Seller has full power and authority to own its assets, to carry on its business as and where such business is now conducted and to execute, deliver and perform this Agreement and all other documents and agreements contemplated hereby and to fully consummate the transaction contemplated hereby upon the terms and conditions herein provided.

(b) The execution, delivery and performance of this Agreement and all other documents required to effect the transactions contemplated hereby, and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by all necessary corporate action as required pursuant to the Articles of Association or Bylaws of Seller. This Agreement and any other document or instrument contemplated hereby, after execution and delivery by Seller to Buyer, will constitute valid and binding obligations of Seller enforceable in accordance with their respective terms.

(c) The zoning classification of the Premises is C-1, under which the legal uses are “General Commercial,” and that Seller has not received any notice of any uncured violation of any building, safety, fire or housing ordinances with respect to the Premises or any other law or municipal ordinance, order, or requirement from any governmental entity, agency, or department having authority as to the Premises.

(d) To the best of Seller’s knowledge, there are no investigations, actions, claims, lawsuits, or proceedings pending relating to the Premises in any court or before any court or by any federal, state or local governmental agency which would have a material adverse effect on the transactions contemplated hereby or adversely affect Seller’s ability to perform its obligations under this Agreement.

(e) There are no pending or proposed eminent domain or condemnation proceedings affecting the Premises as to which Seller has received notice or has knowledge.

(f) There are no pending or proposed assessments for public improvements against the Premises as to which Seller has received notice or has knowledge.

(g) Seller has received no notice from any insurance carrier for the Premises requiring or notifying Seller as to the need to undertake any repairs, alterations or construction or to take any action on or with respect to the Premises.

 

 

 

(h) Access to a public road or street may require issuance of a highway occupancy permit from the Department of Transportation or other approvals from the Borough of Downingtown.

(i) Seller has not burned, discarded, discharged, dumped, emitted, exhausted, released, spilled or otherwise disposed of any Hazardous Substances (hereinafter defined) on the Premises, or knowingly permitted any Hazardous Substances to be burned, discarded, discharged, dumped, emitted, exhausted, released, spilled or otherwise disposed of on the Premises. Seller has no knowledge that any Hazardous Substances are located at the Premises. Seller has received no notice or demand from any governmental authority or private party requiring the removal of any Hazardous Substances from the Premises. Seller has no knowledge of any underground storage tanks under the Premises. As used herein, "Hazardous Substances" shall mean any petroleum, hazardous, toxic or dangerous waste, substance or material defined as such in, or for purposes of the Comprehensive Environmental Response, Compensation and Liability Act, any so called “superfund or superlien” law or any other federal, state or local statute, law, ordinance, code, rule, regulations, order, decree or other requirement of any governmental authority regulating, relating to, or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material as now in effect and applicable to the Premises. The building and all other improvements and fixtures constituting any portion of the Premises do not contain any hazardous building materials or toxic substances including, without limitation, asbestos or any other substance containing asbestos, mold, lead-based paints or PCBs.

(j) Utility services and facilities necessary for the operation of the Premises as it is now being operated, are installed and connected.

(k) The systems (including, but not limited to, HVAC, plumbing, electrical and mechanical), will be in the same condition on the date of Settlement as they are on the date of this Agreement, reasonable wear and tear, and damage by insured casualty or condemnation, excepted.

(l) The Premises constitutes less than 50% of the property owned by Seller in the Commonwealth of Pennsylvania.

(m) All leases, contracts, guarantees, warranties, financial statements, operating statements and all other books and records or other documentation delivered to Buyer pursuant to this Agreement or in connection with the execution hereof are, to the best of Seller’s knowledge, true, complete and correct copies. Within ten (10) days of the date hereof, Seller will, or shall have delivered to Buyer, all documents and information relating to the Premises in Seller’s possession that have or may have any material economic impact on the transaction contemplated hereby or any material impact on the operation and condition of the Premises.

(n) Except for the Lease, there are not now, nor will there be at the Settlement, any contracts, leases or agreements (including, without limitation service contracts and/or management agreements), written or oral, relating to the Premises, to which Seller is a party.

 

 

 

(o) On the date of Settlement, all leasing, brokerage or other commissions due prior to, on or after the date of Settlement in connection with any leases executed prior to the date of Settlement will have been paid and Buyer shall not be required to assume any such obligation to pay any leasing, brokerage or other commissions.

Each of the representations and warranties set forth above or made in writing pursuant to this Agreement, shall be true and correct as of the date hereof and as of the date of Settlement, and shall be deemed to be material. The representations and warranties set forth in Sections 5(a), (b), (g), (l), (m), (n) and (o) shall survive the execution and delivery of this Agreement and Settlement hereunder, but the other representations and warranties set forth in this Section shall be deemed to expire or be waived upon Buyer’s completion of Settlement.

6. Buyer’s Warranties, and Representations.   Buyer represents and warrants to Seller that:

(a) Buyer is a business corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and is qualified to do business in the Pennsylvania. Buyer has full power and authority to own its assets, to carry on its business as and where such business is now conducted and to execute, deliver and perform this Agreement and the Lease and all other documents and agreements contemplated hereby and to fully consummate the transaction contemplated hereby upon the terms and conditions herein provided.

(b) The execution, delivery and performance of this Agreement and all other documents required to effect the transactions contemplated hereby, and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by all necessary organizational action as required pursuant to the Certificate of Organization and Operating Agreement of Buyer. This Agreement, the Lease and any other document or instrument contemplated hereby, after execution and delivery by Buyer to Seller, will constitute valid and binding obligations of Buyer enforceable in accordance with their respective terms.

(c) To the best of Buyer’s knowledge, there are no investigations, actions, claims, lawsuits, or proceedings pending relating to Buyer in any court or before any court or by any federal, state or local governmental agency which would have a material adverse effect on the transactions contemplated hereby or adversely affect Buyer’s ability to perform its obligations under this Agreement or the Lease.

7. Operations Prior to Settlement . Between the date of this Agreement and the date of Settlement:

(a) Without expense to Buyer, Seller shall maintain the Premises in its present condition, ordinary wear and tear excepted.

(b) Seller shall permit Buyer and Buyer’s representatives access to all portions of the Premises from the date hereof until Settlement during normal business hours upon reasonable prior notice from Buyer to Seller, for the purpose of inspecting, measuring, appraising, testing and making surveys of the Premises. Buyer shall not unreasonably interfere with any ongoing business, activities or operations of Seller or its agents on the Premises and shall restore any area on the Premises disturbed in the course of Buyer's testing to the conditions existing prior to any tests

 

 

 

conducted by Buyer, and shall indemnify Seller against any costs, expenses or damages incurred by Seller as a result of such expenses. The provisions of this Section shall survive Settlement and any other termination of this Agreement. 

(c) Seller shall not enter into any contract, lease or other agreement for, on behalf of, or affecting the Premises which cannot be terminated without charge, cost, penalty or premium.

(d) Seller shall not create or knowingly permit any liens, easements, encumbrances or other clouds on the title to the Premises to be created hereafter.

(e) Seller shall promptly deliver to Buyer copies of any written notice received by Seller regarding all actions, suits or other proceedings affecting title to the Premises, or the use, possession or occupancy thereof, or which may adversely affect the Premises.

(f) Seller shall be entitled, but not obligated, to relocate or remove the generator located on the Premises, but if it does so, it shall be at Seller’s expense.

(a) At Settlement hereunder, Seller shall deliver to Buyer the following:

(i) The Deed to the Premises duly executed and acknowledged by Seller, and in proper form for recording, for recording by the title company.

(ii) A Certificate of the Secretary or Assistant Secretary of Seller certifying a true and correct copy of the Resolution of the Board of Directors of Seller approving and authorizing the execution and performance of this Agreement by Seller and other documents at Settlement.

(iii) Such affidavits and other documents as may be reasonably required by the title insurer in order to complete Settlement and insure Buyer’s title.

(v) Duly executed certificates required by Section 1445 of the Internal Revenue Code that Seller is not a foreign person within the meaning of said Section 1445.

(b) At Settlement hereunder, the Buyer shall deliver to Seller the following:

(i) The unpaid balance of the Purchase Price due under Section 2 of this Agreement, in collected funds.

(ii) Such affidavits and other documents as may be reasonably required by the title insurer in order to complete Settlement and insure Buyer’s title.

(c) At and subject to Settlement hereunder, Seller and Buyer shall execute and deliver to each other a lease, with Buyer as landlord and Seller as tenant, covering the Premises, in the form attached hereto as Exhibit B and made part hereof (the “ Lease” ) and a Parking

 

 

 

Easement Agreement among Buyer, Seller and Papermill Brandywine Company, LLC in the form attached as Exhibit A to the Lease (the “Parking Easement Agreement”).

(a) Seller’s obligations to sell the Premises and to perform its other obligations are subject to the satisfaction of the following conditions as of the Settlement:

(i) Payment to Seller of the Purchase Price referred to in Section 2 of this Agreement.

(ii) Buyer’s execution and delivery to Seller of all agreements and documents required of Buyer to be executed and delivered at Settlement pursuant to this Agreement.

(iii) Buyer shall have performed all of their obligations and agreements contained in this Agreement to be performed and complied with by Buyer prior to Settlement.

(iv) Buyer shall be prepared and able to accept and complete closing on the Mortgage Loan in accordance with the terms of the Loan Commitment, but Seller shall not be entitled to assert this condition if Buyer’s unwillingness to accept and close on the Mortgage Loan is due to Seller’s breach of any of the terms or conditions of the Loan Commitment.

(b) Buyer’s obligations to purchase the Premises and to perform its other obligations are subject to the satisfaction of the following conditions as of the Settlement date.

(i) Delivery by Seller to Buyer of the Deed in accordance with this Agreement.

(ii) Seller’s execution and delivery to Buyer of all agreements and documents required of Seller to be executed and delivered at Settlement pursuant to this Agreement.

(iii) All representations and warranties of Seller contained in this Agreement shall be true and in all material respects at Settlement and Seller shall have performed and complied with all of its obligations under this Agreement which are to be performed or complied with by Seller prior to Settlement.

(iv) Seller shall be prepared and able to fund the Mortgage Loan to Buyer in accordance with the terms of the Loan Commitment, but Buyer shall not be entitled to assert this condition if Seller’s unwillingness to fund the Mortgage Loan is due to Buyer’s breach of any of the terms or conditions of the Loan Commitment.

(v) Papermill Brandywine Company, LLC shall have received final and unappealable development approval from Downingtown Borough for the proposed development of the adjoining property owned by Papermill Brandywine Company, LLC.

 

 

10. Fire or Other Insurable Casualty . If at any time after the date of this Agreement and prior to the date of Settlement any portion of the Premises is destroyed or damaged as a result of fire or any other casualty whatsoever, the parties shall nevertheless be obligated to complete Settlement and enter into the Lease. Seller agrees to maintain its present insurance on the Premises until Settlement. The proceeds of any insurance paid or payable with respect to a casualty occurring hereafter to the Premises shall be applied in the manner provided in the Lease.

11. Eminent Domain . Seller covenants and warrants that Seller has not heretofore received notice of any condemnation proceeding or other proceedings in the nature of eminent domain in connection with the Premises, nor, to the best of Seller’s knowledge, is any such action proposed, threatened or anticipated. In the event Seller or Buyer receives any notice of condemnation proceedings, or other proceedings in the nature of eminent domain, it will forthwith send a copy of such notice to the other party, and both parties shall have the right, jointly, to negotiate for, to agree to or to contest all offers and awards. If the entire Premises is taken by a notice delivered prior to Settlement, this Agreement shall be terminated and Seller shall retain exclusive rights to any awards or damages. If less than all of the Premises is taken by a notice delivered prior to Settlement, Buyer shall have the option to: (i) terminate this Agreement (in which event the Deposit shall be paid to Buyer), or (ii) complete the Settlement hereunder, in which event Buyer shall pay the full Purchase Price, and Seller will assign all of its rights in any awards (other than relocation damages, which Seller shall be entitled to claim and retain) to Buyer; provided, however, that Seller shall have an option by providing written notice to Buyer prior to Buyer being obligated to make the foregoing election of (i) or (ii) above to not enter into the Lease.

(a) There shall be no apportionment of, real estate taxes, water and sewer rents, gas and electricity, rents or license fees, if any, or any other item that is otherwise customarily properly apportionable charges since Seller shall remain liable for such payments to the extent provided under the Lease.

(b) All real estate transfer taxes shall be borne equally by Buyer and Seller and paid by Seller or the title company.

(c) Buyer shall pay the costs of recording the Deed and any expenses and fees of Settlement, except that each party will pay its own legal fees and other expenses relating to its performance of the terms and conditions of this Agreement.

(d) Buyer shall be responsible for paying the costs of any inspections and tests, and any surveys required by the Buyer, its mortgagee or title insurer.

13. 1031 Exchange . Seller may elect, upon notice to Buyer given prior to the Settlement, to exchange title in the Premises for other property of like kind and qualifying use within the meaning of Section 1031 of the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder (the "1031 Exchange Transaction"). In order to facilitate the 1031 Exchange Transaction, Seller may retain the services of a Qualified Intermediary within the meaning of Treas. Reg. 1.1031(k)-1(g)(4), which shall provide services to Seller in

 

 

 

connection with Seller's 1031 Exchange Transaction. Seller expressly reserves the right to assign its rights under this Agreement to a Qualified Intermediary on or before the Settlement Date. However, this assignment in no way relieves Seller of any obligations or duties under this Agreement. By executing this Agreement, Buyer agrees to cooperate with Seller and the Qualified Intermediary, at no additional cost to Buyer, to effect the 1031 Exchange Transaction and to execute and deliver any and all documents that reasonably may be required to effect the 1031 Exchange Transaction.

 

(b) If Seller violates or fails to fulfill or perform any of the terms or conditions of this Agreement applicable to it (a “Seller Default”), Buyer may terminate this Agreement and receive a return of the Deposit, and shall have any and all rights and remedies at law or in equity including, without limitation, the remedy of specific performance to the extent available under applicable law or at equity.

(c) Buyer and Seller hereby acknowledge that the foregoing are fair and reasonable estimates of Seller's and Buyer’s respective damages on a default by the other, which may be incapable of precise determination, constitutes the parties' present reasonable estimate of the same, and not a penalty.

15. Notices . All notices, requests and demands hereunder shall be deemed to have been given by a party to the other party when hand delivered or deposited in the United States mail, postage prepaid, registered or certified mail, return receipt requested, addressed as follows:

If to Seller:	DNB First, National Association
	4 Brandywine Avenue
	Downingtown, PA 19335
	Attention: William J. Hieb, President
With a copy to:	David F. Scranton, Esquire
	Stradley, Ronon, Stevens & Young, LLP
	30 Valley Stream Parkway
	Malvern, PA 19355

 

 

If to Buyer:	Papermill Brandywine Company, LLC
	521 West Lancaster Avenue
	Haverford, PA 19041
	Attn: Thomas Deignan, President
With a copy to:	Scott C. Butler, Esquire
	Kaplin Stewart Meloff Reiter & Stein
	Building 640
	350 Sentry Parkway
	P.O. Box 3037
	Blue Bell, PA 19422-0765

 

16. Brokerage Commissions . The parties warrant to each other that neither has dealt with any broker or other intermediary with respect to this transaction in any manner that would create a right to a fee or commission. If any broker or other intermediary claims a fee, commission or other compensation with respect to this transaction, the party alleged to have created the right to such commission or compensation shall be responsible for defending against such commission or compensation claim(s) and shall indemnify and hold the other party harmless of, from and with respect to any such claim(s), including the cost of defense thereof. The provisions of this Section shall survive Settlement and any other termination of this Agreement.

17. Miscellaneous .

(a) This Agreement together with the Lease, contains the entire agreement between Seller and Buyer, superseding and voiding any and all prior agreements, both oral and written, relating to the Premises, and there are no other terms, obligations, covenants, representations, statements, or conditions, oral or otherwise, of any kind whatsoever. Upon the signing of this Agreement, the confidentiality agreement previously entered into between Seller and Papermill Brandywine Company, LLC shall not apply to the terms and conditions of this Agreement, the Lease, the Parking Easement Agreement or any exhibit to either of them, or the terms and conditions of any of the foregoing.

(b) Examination or review of this Agreement by or on behalf of either party shall not be construed as approval or acceptance hereof and this Agreement shall not be effective until executed by duly authorized signatories of both parties. Because each party has been separately represented by counsel and has had an adequate opportunity to review and propose revisions to drafts of this Agreement, neither party shall assert or have the benefit of any legal doctrine providing presumptions against the other party as a drafter of this Agreement.

(c) This Agreement may not be assigned by Buyer, nor may Buyer’s performance of its obligations delegated, by operation of law or otherwise, without the prior written approval of Seller; provided, however, that immediately prior to Settlement, Buyer shall have the right to assign its rights under this Agreement to an entity under the common control as Buyer, subject to the following conditions: (i) Buyer shall notify Seller in writing of such assignment and shall provide Seller with a complete copy of any assignment instruments or agreements; (ii) the assignee shall be subject to all of the terms and conditions of this Agreement, including without limitation the obligation to enter into the Lease and the Parking Easement Agreement on the

 

 

 

terms and conditions set forth in this Agreement; and (iii) Seller in its capacity as mortgage lender shall have been given sufficient notice of the name and ownership of the assignee, together with such further information as Seller may reasonably request, in order to facilitate Seller’s review, as mortgage lender, of the impact of the identity and ownership of the assignee upon the credit of the proposed mortgage and to give Seller, as mortgage lender, reasonable time to prepare mortgage loan documents in the assignee’s name (Seller’s right to approve or disapprove the assignee under the Mortgage Commitment shall not be restricted by this provision but shall be governed by the terms of the Mortgage Commitment).

(d) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

(e) The parties agree that time of Settlement is of the essence of this Agreement, unless extended by mutual consent.

(f) No change, amendment, or modification shall be made to this Agreement unless in writing and then only on condition that the party to be bound thereby shall have executed such instrument.

(g) This Agreement may be executed in multiple counterparts, and all of such counterparts shall be deemed part of the same agreement and each an original hereof. It shall not be necessary for each party to sign both counterparts, so long as each party has executed at least one counterpart, and delivered a counterpart signed by such party to the other. Execution of a counterpart may be effected by delivery of a facsimile copy of an executed counterpart.

(h) This Agreement shall be construed and enforced in accordance with and governed by the internal laws of the Commonwealth of Pennsylvania, without reference to rules of choice of law or conflict of law, and by any pre-empting federal law.

(i) This Agreement shall not be recorded in the Office of the Recorder of Deeds of Chester County or in any other office or place of public record. 

[The balance of this page is intentionally left blank.]

 

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this Agreement to be duly executed as of the day and year first above written.

 

 

 

 

EXHIBIT A

Mortgage Loan Commitment Letter

 

 

 

 

EXHIBIT B

Form of Lease

AGREEMENT OF LEASE

 

THIS AGREEMENT OF LEASE is made as of ____________, 2005, by and between ___________________, a _______________ with principal place of business at _____________________________ (“Lessor”) and DNB FIRST, NATIONAL ASSOCIATION (formerly known as Downingtown National Bank), with principal place of business at 4 Brandywine Avenue, Downingtown, PA 19335 ("Lessee").

 

W I T N E S S E T H :

 

1. Demise and Lease; Permitted Use.  

 

(a) Lessor, for and in consideration of the payment of the rentals hereinafter specified, and the performance of the terms, covenants and agreements herein contained, hereby demises and leases unto Lessee and Lessee hereby lets from the Lessor certain premises comprising approximately 0.9 acres of ground, with improvements, known as Tax Map Parcel Nos. 1108004900, 1108005000 and 1108005001, situate on Brandywine Avenue, in the Borough of Downingtown, Chester County, Commonwealth of Pennsylvania (the “Leased Premises”).  Lessee’s use of the Leased Premises is subject to the burdens of and entitles the Lessee to the benefits of, the Parking Easement Agreement among Lessee, Lessor and Papermill Brandywine Company, LLC, dated contemporaneously herewith, the form of which is attached hereto as Exhibit A , and intended to be filed of public record (the “Parking Easement Agreement”).

 

(b) Lessee shall be authorized to use the Leased Premises for: (i) general administrative office use; a financial services center; loan production; customer meetings; a bank, and all uses necessary or incidental to the foregoing (including, without limitation, the sale of mutual funds, securities and other financial and insurance products), maintenance of automated teller machine(s) ("ATMs") to the extend permitted under other provisions of this Lease, safe deposit facilities and office and office related uses, (ii) commercial and professional office use to the extent permitted by applicable law from time to time, and (iii) subject to the prior written consent of the Lessor, which shall not be unreasonably withheld, any other lawful use permitted by applicable law from time to time at the Leased Premises (collectively, the “Permitted Uses”). Lessee shall have the right, in order to maintain proper security and maintenance for the operation of its business, to have pickups or deliveries made from or to the Leased Premises by carriers of cash, securities, instruments, records or other materials commonly transported by such carriers and to permit the use of such portions of the Leased Premises as shall be reasonably required for such purposes.

 

2. Term; Lessee’s Early Termination Option; Renewal Options.

 

(a) Subject to Lessee’s “Early Termination Option” as provided in subsection (c) of this Section, this Lease shall be for a period (the “Initial Term”) beginning on the date of this Lease ending on December 1, 2010.

 

 

 

(b) Lessee shall have separate options to renew this Lease for three (3) additional, successive terms of five (5) years each (each, a “Renewal Term”), with each Renewal Term commencing consecutively upon the expiration of the Term as it may have been previously extended (the Initial Term and any Renewal Terms are sometimes herein referred to collectively as the “Term.”) All of the terms and conditions applicable to the Term of this Lease shall also apply during each Renewal Term, except that during each Renewal Term, the Base Rent shall be a fair market rental taking into account all of the terms and conditions of this Lease, but in no event shall the Base Rent decrease below the amount payable during the immediately prior year. Each renewal option shall be exercisable by written notice to Lessor at least 180 days prior to the end of the then current Term, so long as Lessee is not then in Default hereunder on the notice date or at the commencement of the renewal term. If, within 15 days after Lessee’s written notic