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Exhibit 10.6
 
Village Comer EMBASSY Lease 022503

LEASE AGREEMENT

This LEASE AGREEMENT is made this 21 day of March, 2003, by and between

VILLAGE CORNER, LLC, a Pennsylvania limited liability company, as Landlord
(hereinafter sometimes called "Landlord")
And

EMBASSY BANK FOR THE LEHIGH VALLEY, as Tenant (hereinafter sometimes called
"Tenant").

RELEVANT FACTS

A.                Landlord plans to construct an office building (hereinafter
sometimes referred to as the Building) on its real property. Tenant desires to
lease a portion of the Building from Landlord and Landlord desires to lease such
premises to Tenant.

B.                Tenant hereby acknowledges that it has read this Lease and is
cognizant of the fact that this Lease contains restrictions upon the activities
which may be conducted in the Building and other restrictions and provisions
applicable to this Lease. Tenant agrees that all activities conducted by it, its
employees, agents, partners and shareholders and anyone claiming by, through or
under Tenant in any part of the Building shall be in accordance with the terms,
covenants and conditions of this Lease including, without limitation, Paragraph
1.2 which pertains to use of Building, assignment and subleasing, specifically
prohibited uses and other matters.

1.                 Lease of Premises.

1.1       Leased Premises.     Landlord hereby demises and leases to Tenant and
Tenant hereby leases from Landlord, on the terms and conditions herein set
forth, that portion of the Building consisting of:

approximately 3,584 rentable sq. ft., designated as SUITES 8 and 9

on the building plans maintained by the Landlord. The leased space is sometimes
referred to herein as the "Premises", and its location is shown on the attached
Exhibit "A".

The Premises are leased with bare, exterior walls insulated but not covered with
drywall, and with plumbing and electrical lines and HVAC service brought to the
Premises, as depicted in Landlord's shell building plans. All other finishes and
improvements, including without limitation, internal walls and partitions,
diffusers, terminal units, internal duct work, thermostats, paint, wall
coverings, carpets, tile, cabinets, plumbing fixtures, outlets, switches,
lighting and other fixtures, subpanels as required shall be the responsibility
of Tenant to construct and install.

The building and the leased premises, when completed, will be in compliance with
all applicable building, safety and fire codes and with the Americans with
Disabilities Act.

It is understood the drive thru window and canopy construction will be at the
tenant's expense. It is understood the approximate cost for said construction
will be between $15,000-$! 8,000. It is further understood appropriate
documentation will be provided to substantiate the final cost.

All interior finish improvements to the Premises shall be obtained from a
competent construction contractor of Tenant's choice, provided, however, that
Landlord shall approve the selection of Tenant's contractor (and its
subcontractors) prior to the commencement of any work at the Premises. Tenant
shall be responsible for completing these interior finishes and improvements to
the Premises in accordance with the written architectural and construction
agreements approved by Landlord, whose approval shall not be unreasonably
withheld or delayed. Tenant shall pay any and all costs necessary to complete
these interior finishes and improvements.

Prior to the commencement of any improvements to finish the interior of the
Premises, Tenant and any contractor working in or on the Premises shall execute
a Stipulation Against Liens to be recorded in the Office of the Clerk of Courts,
Lehigh County, Pennsylvania, at Tenant's expense.

1.2        Use of Premises.     The Premises shall be used by Tenant solely as
a:

RETAIL BANK BRANCH

 
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Village Comer EMBASSY Lease 022503

and the business activities related thereto and for no other purposes, with the
sole exception that with the prior written consent of Landlord, in its sole
discretion, the Premises may be used for other approved purposes.

Tenant shall not use or permit any part of the Premises to be used for any
unlawful purpose. Tenant shall be solely responsible for obtaining all required
zoning and occupancy permits.

Landlord agrees that, during the term of this lease, Landlord shall not lease or
permit to be occupied any other portion to the Building to a Tenant for a use by
such Tenant similar to or in competition with the use of the Premises by Tenant
set forth in this paragraph.

1.3      Quiet Enjoyment.     Landlord warrants and represents that it has the
right and authority to lease the Premises to Tenant. Tenant, upon the payment of
all rents herein reserved and upon the performance of all terms of this lease,
shall at all times during the lease term peaceably and quietly enjoy the
Premises without any disturbance from Landlord.

1.4       Landlords Right of Entry.     Landlord and its agents and employees
shall have the right to enter the Premises at all reasonable times, and upon
twenty-four (24) hours prior notice to Tenant, in order to examine it, to show
it to prospective purchasers, mortgagees or tenants, to make repairs,
alterations, improvements or additions as Landlord may deem necessary or
desirable, to place upon the Premises "for sale" and "for rent" signs, and for
any other purpose whatsoever. Landlord's right of entry hereunder does not
extend to personal property, documents and files possessed or owned by the
Tenant and located upon the Premises. Landlord shall exercise its right of entry
only in the presence of Tenant, or its designee, except in the case of
emergency.

2.                Term of Lease.

2.1            Initial Term.     The term of this Lease for the Premises shall
be a period of five (5) years (hereinafter the "Initial Term") beginning on the
date (herein sometimes called the "Commencement Date") of substantial completion
of the Premises. Substantial completion shall be deemed to have occurred thirty
(30) days after the Premises may be occupied for the uses herein provided as
evidenced by a Certificate of Occupancy issued by the applicable municipal
authority or, in the absence of such Certificate, as determined by Landlord's
Architect. Landlord and Tenant shall sign a written statement in the form of
Exhibit "B" hereto setting forth the Commencement Date and termination date of
the Initial Term. In the event that either Landlord or Tenant causes any delay
in the substantial completion of the Premises so that the Premises are
substantially completed on a date later than when it would have been
substantially completed, but for such delay, then the Commencement Date shall be
deemed to have occurred on the date when the Premises would have been
substantially completed but for such delay. In the event that substantial
completion of the Premises is delayed because of late delivery of fixtures,
equipment or other materials necessary to complete the Premises to comply with
Tenant's requirements, then the Commencement Date shall be deemed to have
occurred on the date when the Premises would have been substantially completed
but for such late delivery. Landlord and Tenant agree that Landlord shall use
its best efforts to cause the leased premises to be delivered to Tenant for
commencement of fit-out no later than November 1, 2003. In the event that
Landlord delays delivery of the Premises to Tenant for fit-out beyond such date,
Tenant shall receive a rental credit equal to one hundred (100%) percent of the
monthly installment of Rent for each month or portion thereof of such delay.

2.2           Option Term.     Tenant shall have the right or option to lease
the Premises for four additional terms (hereinafter sometimes called the "Option
Term") of five (5) years each for a total of twenty (20) years following the
termination of the Initial Term. Such options shall be exercised by Tenant
sending written notice to Landlord of its intention to exercise this option at
least six (6) months prior to the expiration of the Initial Term and each
subsequent term, time being of the essence. Tenant's right to extend the term
for each Option Term shall automatically be extinguished as if it had never
existed if Tenant fails to exercise its option in the required manner within the
required period of time. If Tenant shall duly exercise its right or option to
lease the Premises for such Option Terms, all terms and conditions herein shall
remain the same, except that (i) Tenant shall have no further right to extend
the term of this Lease; and (ii) the Base Rent (hereinafter defined) at the
commencement of such Option Term shall be adjusted to Fair Market Value as
provided in Paragraph 3.3

2.3           Additional Term.     Upon the termination of the Initial Term if
the options under Paragraph 2.2 are not exercised, or upon the expiration of the
Option Terms, this lease shall continue upon the same terms and conditions for a
further period of one (1) year and so on from year to year unless or until
terminated by either Landlord or Tenant giving to other party written notice of
termination at least ninety (90) days prior to the expiration of the then
current term; provided, however, that upon the commencement of the Additional
Term and upon each annual anniversary thereof, the Base Rent (as hereinafter
defined) shall be adjusted to Fair Market Value as provided in Paragraph 3.3.

 
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Village Corner EMBASSY Lease 022503

3.                Rent.

3.1        Base Rent.      For the Initial Term of this Lease, Tenant shall pay
to Landlord an annual base rental of

SEVENTY-SEVEN THOUSAND FIFTY-SIX and 00/100 ($77,056.00) Dollars per year

(equal to $21.50 per rentable sq. ft. per year) payable in advance, in equal
monthly installments of

SIX THOUSAND FOUR HUNDRED TWENTY-ONE and 33/100 ($6,421.33) Dollars,

on or before the first day of each month (such annual amount is hereinafter
sometimes called "Base Rent"). On the second anniversary of the Commencement
Date and annually thereafter, as of the anniversary of the Commencement Date,
the Base Rent shall be adjusted to Fair Market Value as provided in Paragraph
3.3.

3.2       Payment of Rent.     Both Base Rent and Additional Rent (as defined in
Paragraph 3.4) shall be payable without demand, setoff or deduction whatsoever
except as may be specifically provided in this Lease. Rent shall be payable at
such place as Landlord may from time to time designate. In the event that this
Lease commences or expires in the middle of a month, rental for the portion of
such month shall be prorated, and payable in advance.

3.3       Adjustment to Fair Market Value.    Whenever this Lease calls for
adjustment of the Base Rent to Fair Market Value, the same shall be accomplished
by multiplying the Base Rent installment for the month immediately preceding the
adjustment date by twelve (12) (the "Product") and then by adding thereto a sum
equal to the Product multiplied by the cumulative rate of change (expressed as a
percentage) in the Consumer Price Index, Northeast Pennsylvania B/C from the
last adjustment date to arrive at the annual Base Rent for the succeeding
period.

3.4       Additional Rent.     Tenant shall pay to Landlord, in addition to the
Base Rent specified hereinabove, from the Commencement Date and continuing
through the term of this Lease and any renewal terms hereof, as Additional Rent,

TEN THOUSAND SEVEN HUNDRED FIFTY-TWO and 00/100 ($10,752.00) Dollars

(equal to $3.00 per rentable sq. ft. per year) payable in advance, in equal
monthly installments of

EIGHT HUNDRED NINETY-SIX and 00/100 ($896.00) Dollars

representing ELEVEN percent (11%) of Landlord's total projected operating
expenses.

For the initial twelve (12) months of the term of this Lease, Landlord's
operating expenses shall be fixed at $3.00 per rentable sq. ft.

The total of the base rent plus additional rent shall be:
EIGHTY-SEVEN  THOUSAND  EIGHT  HUNDRED   SEVEN   and  96/100   ($87,807.96)  Dollars
annually or

SEVEN THOUSAND THREE HUNDRED SEVENTEEN and 33/100 ($7,317.33) Dollars monthly
for the first year.
As used in this Lease, the term operating expenses shall mean the reasonable
costs incurred by Landlord in the management, operation and maintenance of the
Building and its common areas, including, but not limited to, the cost of
maintenance, real property taxes and assessments, common area utilities,
non-hazardous waste removal, supplies, ground usage, property management and
fire, casualty and liability insurance. Operating expenses shall not include
depreciation, interest on and amortization of debt, repairs, alterations, or
additions that under generally accepted accounting principles are properly
classified as capital expenditures, or costs incurred in the solicitation or
execution of leases.

A copy of the calculated operating expenses will be provided upon written
request.

 
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Village Comer EMBASSY Lease 022503

3.5        Changes in Operating Expenses.     If Landlord's operating expenses
during the first twelve (12) months of the Term or such portion thereof as shall
end on June 30 of the following year, exceed the sum fixed hereinabove in
Paragraph 3.4, Landlord shall so notify Tenant by September 30 of the second
year of the Term, and commencing on October 1 of the second year of the Term,
Tenant shall pay to Landlord in the following nine (9) month period Tenant's
percentage share of the increased operating expenses in nine (9) equal monthly
installments.

If Landlord's operating expenses during the first twelve (12) months of the Term
or such portion thereof as shall end on June 30 of the second year, are less
than the sum fixed hereinabove in Paragraph 3.4, Landlord shall so notify Tenant
by September 30 of the second year of the Term, and commencing October 1 of each
year Tenant receive a credit in the following nine (9) month period Tenant's
percentage share of the decreased operating expenses in nine (9) equal monthly
installments.

Thereafter, from year (commencing July 1) to year (ending June 30) during the
Term, Landlord shall calculate its annual operating expenses and deliver to
Tenant Landlord's statement showing its operating expenses, any increase or
decrease in which shall be collected from or credited to Tenant by Landlord in
the same manner as stated herein following the initial twelve (12) months of the
Term or such portion as shall end on June 30.

3.6       Tenants Space Ratio.     The percentage specified in Paragraph 3.4 of
this Lease is that percentage determined by dividing the square footage of the
Premises, as the numerator, by the total square footage of the Building less the
common areas, as the denominator, as set forth in Exhibit "A" attached hereto.
In the event that the completed Building, Premises or common areas contain
different square footage than that set forth in the attached Exhibit, then
Tenant's Space Ratio, and the corresponding percentage, shall be recalculated
based upon the actual as built conditions.

3.7       Utilities.     Landlord and Tenant agree that separate utility
metering for any and all utilities will be installed for the Premises. Tenant
shall pay directly to the appropriate utility company or authority all utility
charges and fees for utilities used of consumed in, on or at the Premises which
are separately metered. Tenant shall indemnify and save and hold Landlord
harmless from and against all fees, charges, expenses, penalties, interest and
other charges with respect to utility service which is separately metered and
provided directly to the Premises. If requested, Tenant shall furnish to
Landlord, within ten (10) days after the date any amount is payable by Tenant
directly to a utility supplier proof of payment satisfactory to Landlord.

3.8       Interest.      Tenant shall pay as additional rent without demand and
without setoff all sums of money or charges required to be paid by Tenant under
this Lease, whether or not the same be designated rent. If such amounts or
charges are not paid at the time provided in this Lease, they shall nevertheless
if not paid when due, be collectible as additional rent with the next
installment of the rent thereafter falling due hereunder and shall bear interest
from the due date thereof to the date of payment at the rate of fifteen (15%)
percent per annum. Nothing in this Paragraph 3.8 shall prevent or hinder or
delay Landlord from pursuing any remedy which may be available at law or in
equity or pursuant to the terms of this Lease by reason of such failure by
Tenant to pay sums when due.

3.9        Security Deposit.     In lieu of a Security Deposit, Tenant shall pay
the first month's rent upon the signing of this lease as a good faith deposit
for the full and faithful performance by Tenant of the terms and conditions of
this Lease. Tenant waives any requirement that such payment be held in any
escrow account or in any other way segregated from Landlord's other funds.
Tenant further waives any requirement that such payment be held in any interest
bearing account.
 
Landlord may apply all or any part of the deposit required to cure any default
of Tenant under the terms and conditions of this Lease. In the event of such
application, Tenant must deposit with the Landlord the amount applied to cure
its default immediately on notice from Landlord of the nature and amount of the
application.
 
If Landlord transfers its interest in the Lease, it may do either of the
following: (1) return the deposit to Tenant, without interest, any deductions
made and not replaced by Tenant; or (2) transfer the deposit, without interest,
minus any deductions made and not replaced by Tenant, to Landlord's successor in
interest. In the event Landlord transfers all or any portion of the deposit
under this Paragraph, upon such transfer Landlord shall be relieved of all
obligations with regard to the deposit, and all of rights and obligations
regarding such good faith deposit shall accrue to the transferee. Landlord shall
give Tenant notice of any such transfer, including the name and address of the
transferee and the amount transferred.

4.                Casualty Loss.

4.1        Total Destruction     If the Premises or the Building are totally
destroyed by fire, flood or other casualty, or if the Building or Leased
Premises should be so damaged by such cause that the rebuilding or repairs
cannot, in Landlord's reasonable judgment, be completed within ninety (90)
working days and at a cost not to exceed One Hundred Fifty and no/00 ($150.00)
Dollars per rentable sq. ft. excluding Tenant's finishes, Landlord shall give
written notice of such determination to Tenant and this Lease shall terminate,
and rent be abated for the unexpired portion of the Lease, effective as of the
date of determination.

 
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Village Comer EMBASSY Lease 022503

4.2            Partial Destruction     If the Premises are damaged by fire,
flood or other casualty, but not to such an extent that rebuilding or repairs
cannot reasonably be completed within ninety (90) working days at a cost not to
exceed One Hundred Fifty and no/00 ($150.00) Dollars per rentable sq. ft.
excluding Tenant's finishes, this Lease shall not be terminated, but Base and
Additional Rent shall be abated pro rata for the number of days during which
Tenant is reasonably unable to utilize the Premises for its intended purposes.

5.               Insurance.

Landlord shall maintain and keep in effect throughout the term of this Lease a
liability insurance policy with a minimum combined single limit of not less than
One Million and no/100 ($1,000,000.00) Dollars for personal injury and property
damage, and shall purchase casualty insurance for not less than the full
replacement cost of the Premises other than the Tenant's interior finish
improvements. Such casualty policy shall satisfy all coinsurance requirements of
the policy and may contain a commercially reasonable deductible and shall be
included in Landlord's policy for the Building. Tenant, at Tenant's sole cost
and expense, shall maintain and keep in effect throughout the term of this Lease
(1) a premises general liability insurance policy with a minimum combined single
limit of not less than One Million and no/100 ($1,000,000.00) Dollars, for
personal injury and property damage, and (2) broad form casualty insurance for
the full replacement cost of Tenant's interior finish improvements. In the event
of an insured casualty loss of the Building, at Landlord's option, this Lease
shall be terminated in its entirety. In the event of a casualty loss of less
than all of the Building, the insurance proceeds shall be applied at Landlord's
option to repair or replace the damage and, if applicable, in accordance with
the provisions of Landlord's financing documents to which this Lease is
subordinate. The aforementioned policies of insurance shall name as the insured
Landlord and Tenant as their interests may appear, and shall contain standard
mortgagee endorsements for any holders of mortgage(s) on the Premises. In the
event of a loss due to any casualty or peril for which Landlord or Tenant has
agreed to provide insurance, each party shall look solely to its insurance
(including policies maintained by the other party where the damaged party is
named as the additional insured) for recovery. To the extent permissible by
their insurers, Landlord and Tenant hereby grant to each other, on behalf of an
insurer providing insurance to either of them with respect to the Premises, the
improvements thereon and the equipment, a waiver of any right of subrogation
which any insurer of one party may acquire against the other by virtue of the
payment of any loss under such insurance. Landlord and Tenant agree to furnish
each other suitable evidence by certificate or copies of such insurance policies
indicating that such insurance is in force and includes, if available, the
above-described waiver of subrogation and other clauses.

6.                Maintenance of Premises.

6.1        Tenant's Obligation.      Throughout the term of this Lease, Tenant
shall, at its sole cost and expense, make all necessary repairs, maintenance,
and replacements to keep the Premises in good order and repair, including all
floor and wall coverings, all doors, the ceiling system, all light fixtures and
bulbs, reasonable wear and tear alone excepted. Tenant shall not be obligated to
maintain, repair or replace portions of the building systems which also service
other tenants or which also service common areas. Tenant shall, at its sole cost
and expense, make all necessary repairs, replacements and maintenance the need
for which is caused by or results from the acts or negligence of Tenant or
Tenant's employees, agents, contractors, subtenants or invitees. The quality of
all work performed by or on behalf of Tenant, and the quality of all materials
furnished, by or on behalf of Tenant, shall be of a quality at least equal to
the quality of the original construction. Tenant shall periodically maintain the
Premises, as needed, so that the appearance of the Premises is at all times at
least consistent with the prevailing quality of the appearance of similar first
class buildings in the Lehigh Valley.

6.2        Landlord's Obligation.     Landlord shall be responsible for all
repairs and maintenance which are not the express responsibility of Tenant as
provided above, including, but not limited to the roof, exterior walls,
foundation, building systems not serving solely the Premises, roof-mounted air
conditioning units not serving solely the Premises, elevators, exterior windows
and common areas.

6.3       Surrender.      Upon the termination of this Lease, whenever occurring
or howsoever caused, Tenant shall surrender the Premises and all improvements
and replacements constructed or placed thereon, broom clean, in good condition
and repair, and in the same condition, maintenance and repair as Tenant has
agreed in Paragraph 6.1 above, reasonable wear and tear excepted. Provided that
Tenant is not in default hereunder at the termination of this Lease, Tenant may,
at Tenant's sole cost and expense, remove from the Premises Tenant's equipment
and Tenant's trade fixtures not attached to the Premises in any manner. Tenant,
at Tenant's sole cost and expense shall repair any damage caused by such
removal. Tenant's removal of the foregoing items and repair of any damage caused
thereby shall be effectuated during the week immediately prior to the
termination of this Lease. Tenant shall comply with all laws, rules, ordinances
and directives applicable to all work performed by Tenant or on Tenant's behalf.

 
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Village Comer EMBASSY Lease 022503

6.4        Improvements.     Tenant shall have the right to make and install
such improvements, additions, fixtures, equipment, and installations in the
Premises as Tenant shall desire, subject to Landlord's prior written consent,
which consent shall not be unreasonably withheld. Tenant shall comply with all
laws, rules, ordinances and directives applicable to all work performed by
Tenant or on Tenant's behalf. Tenant shall obtain all required permits and
approvals with respect to all such work, Tenant shall not commence any such work
unless and until Tenant has complied with all of Landlord's requirements with
respect thereto, including, without limitation, requirements for insurance,
mechanics lien waivers, approval of contractors and subcontractors and approval
of plans and specifications. All improvements, additions, fixtures, and
installations, other than movable equipment, including without limitation, items
which are an integral part of the Building or a building system (such as
fixtures, plumbing, and telephone, electrical and other utility lines) shall be
the property of the Landlord on termination of the Lease and may not be removed
by Tenant. However, it is understood that the vault placed in this location may
be removed at tenant's expense or, in the alternative, may remain on the
premises at the termination of the lease providing that it will be the
responsibility and the expense of Tenant to restore the vacated area to
Landlord's satisfaction. Tenant may also remove certain other improvements
attached to the Premises provided they can be removed without causing material
damage and under the same terms of the preceding sentence.
 
7.                Signs.

Tenant shall not place or allow to be placed any stand, booth, sign or show case
upon the doorsteps, vestibules or outside walls or pavements of the Premises,
the Building or any common areas of the Building, or paint, place, erect or
cause to be painted, placed or erected any sign, projection or devise on or in
any part of the Premises, the Building or any common areas of the Building,
except as provided for herein.

Tenant shall be permitted a sign on the exterior pole signboard. The size and
design of such sign shall be approved by Landlord, in writing, prior to
installation. Tenant shall be solely responsible, at Tenant's sole cost and
expense, for the cost of Tenant's sign, including, but not limited to, design,
construction, and installation.

Tenant shall be responsible, at Tenant's sole cost and expense, for the
identification lettering of Tenant's Premises, which lettering shall be approved
by Landlord, in writing, prior to installation. Tenant shall, at Tenant's sole
cost and expense, insert a sign or other identifier on the exterior of the
Building designating Tenant's use of the Premises, subject to approval, in
writing, prior to installation, by Landlord.

Tenant shall remove any sign, projection or device painted, placed or erected,
if permission has been granted and restore the walls, etc., to their former
conditions, at or prior to the expiration of this lease.

In case of the breach of this covenant (in addition to all other remedies given
to Landlord in case of the breach of any conditions or covenants of this lease)
Landlord shall have the privilege of removing said stand, booth sign, showcase,
projection or device, and restoring said walls, etc., to their former condition,
and Tenant, at Landlord's option, shall be liable to Landlord for any and all
expenses so incurred by Landlord.

8.                Rules and Regulations; Parking.

8.1        Rules and Regulations.     Landlord shall have the right from time to
time to promulgate, adopt, amend, supplement, and modify rules and regulations
applicable to (i) the Building; (ii) each demised space therein; (iii) the
parking areas which are made available to the Building; (iv) the common area
within the Building; and (v) all other areas which in any way affect the
Building or its use or operation.. Tenant agrees to abide by, and comply with,
all of the terms and provisions of the rules and regulations in effect from time
to time as if such rules and regulations were specifically set forth in this
Lease. Landlord agrees that all rules and regulations shall, to the extent
practicable, apply uniformly to all building tenants.

8.2        Parking.     Landlord confirms that the successful operation of the
Building is dependent upon sufficient accessible parking being available to
customers, clients, patients, tenants in the Building, and their employees.
Therefore, Landlord agrees that all tenants and their employees may park their
vehicles in those portions of the parking lot constructed by Landlord. However,
all tenants and their employees shall park their vehicles only in those portions
of the parking lot constructed by Landlord designated by Landlord for tenant and
employee parking. To enable this provision to be enforced, Tenant shall furnish
Landlord, upon demand from time to time, with the state automobile license
number assigned to the vehicles utilized by Tenant and its employees who work in
the Premises. Tenant shall be responsible for compliance with this provision and
shall require its employees to comply with it. Three (3) parking spaces in front
of the building shall be allocated and designated for Embassy Bank's use
only.   There is ample parking on the west side of the building for bank
use.   Landlord may modify, amend, suspend, or otherwise change this Paragraph
8.2 by exercising from time to time its rights pursuant to Paragraph 8.1.

 
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9.                Trash Removal and Landlord's Services.

Except as specifically set forth in this Lease, Landlord shall not be obligated
to supply or provide any services to Tenant or to the Premises. Landlord's
system for the removal of trash from the Premises shall be for the removal of
normal office trash such as papers and cups and shall not be for the removal of
any items (hereinafter called Special Items) which, by law, require special
handling or special disposal such as, by example only, radioactive material,
explosive material, toxins or human parts. Tenant shall remove and dispose of
all Special Items, as its sole cost and expense in accordance with all
applicable laws, ordinances, rules and regulations.

10.              Compliance with Laws and Governmental Regulations.
 
10.1     Governmental Rules.     Tenant shall throughout the term of this Lease,
at its sole expense, promptly comply with all laws, ordinances, rules,
directives and regulations of all federal, state and municipal governments and
appropriate departments, commissions, boards and offices thereof, and the orders
and regulations of the National Board of Fire Underwriters, or any other body
now or hereafter exercising similar functions, which may be applicable to the
Premises, Tenant, or the use thereto by Tenant.

10.2      Permits.  Tenant at its sole cost and expense, shall obtain all
permits and authorizations required for Tenant's activities in the Building. In
the event any occupant of the Premises desires to provide services therein to
customers, clients, patients or others which cannot be legally provided therein
unless Building itself has certain licenses, certificates, and facilities, then
such services shall not be provided unless the Building has all such required
certificates, licenses, and facilities. Landlord is not required to obtain any
such certificates, licenses or facilities other than the customary Certificates
of Occupancy for the Building.

10.3      Safety.     Tenant shall conduct all of its activities in the Premises
in a safe manner so as not to create any risks to the Building or any occupant
or invitee of the Building. At Tenant's expense, Tenant shall cause the Premises
to contain all necessary safety features for the activities conducted therein
such as, by example only, lead shielded walls if Tenant uses X-ray equipment.

10.4      Insurance Reimbursement.     Without in any way relieving Tenant of
any obligations imposed by Paragraph 10.1 above, Tenant shall promptly reimburse
Landlord upon demand, if anything, done or not done in the Premises causes an
increase in the cost to Landlord for any insurance carried by Landlord.

11.              Assignments and Subletting.

Tenant shall have the right to sublet the Premises on such terms and to such
parties (subject to the use restrictions set forth in Paragraph 1 above and all
other terms and conditions hereof) with the prior written consent of Landlord
which shall not be unreasonably withheld. No sublease shall in any manner
relieve or release Tenant from its obligations as Tenant under this lease.
Tenant shall not under any circumstances have the right to mortgage, pledge or
hypothecate this Lease. All subleases shall be in writing on a form approved by
Landlord in writing in advance. No sublease shall be effective unless and until
all requirements of Landlord have been satisfied.

12.               Mechanics Liens.

Tenant shall not cause or permit to be created, remain, and shall discharge any
lien, encumbrance or charge which might be or become a lien or encumbrance upon
the Building, the Premises or any part thereof or the income therefrom,
including, without limitation, any mechanics, laborers or materialmans lien or
charge.

13.               Subordination; Non-Disturbance.

This Lease shall be subject and subordinate at all times to the lien of any
mortgages, security interests and other encumbrances now or hereafter placed
upon the Building or any part thereof and to all renewals, modifications,
amendments, consolidations, replacements and extensions thereof. Tenant shall
promptly execute and deliver in recordable form any instruments which may be
reasonably required by Landlord in confirmation of such subordination upon
Landlord's request. Tenant shall attorn to and recognize the holder of any
mortgage(s) or any purchaser at a foreclosure sale under any mortgage(s) or any
transferee who acquires the Building by deed in lieu of foreclosure, and the
successors and assigns of such purchasers, as Landlord for the unexpired balance
(and any extensions, if exercised) of the term of this Lease upon the same terms
and conditions set forth herein. In the event Landlord subjects the Building to
any mortgage or other financing, Landlord shall use its best efforts to assure
that this Lease shall be superior to the lien of any or all such mortgages or
financing or any part thereof and to all renewals, modifications, amendments,
consolidations, replacements and extensions thereof.

 
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Village Corner EMBASSY Lease 022503

Any and all Subordinatioiifs) signed by Embassy Bank in favor of any mortgagee
of the Landlord will provide that the mortgagee(s) be subject to Tenant's
non-disturbance rights, as set forth in paragraph 1.3 of this lease.

14.               Public Taking.

If the Building becomes the subject of condemnation, an eminent domain
proceeding or a like court proceeding which materially affects the conduct of
Tenant's business in the Premises, Landlord or Tenant may terminate this Lease
upon written notice to the other party delivered within ninety (90) days of the
date title vests in the condemner. All compensation or damages awarded or paid
upon the total, partial or temporary taking of the Building shall be the
property of Landlord; provided, however, that nothing herein contained shall be
construed to preclude Tenant from prosecuting any claim directly against the
condemning authority for business dislocation damages, moving expenses, removal
expenses, and depreciation to, damage to or cost of the removal of,
transportation of and reinstallation of the removable stock, goods, fixtures,
furniture, machinery, equipment and other personal property of the Tenant or any
other damages which are payable to tenants under the provision of the Eminent
Domain Code of Pennsylvania and under any other applicable law, provided, in
each instance, that any sums awarded to Tenant do not in any way diminish or
otherwise adversely affect the amount of any award(s) which may be payable to
Landlord. Tenant shall not be precluded from prosecuting any other claim
directly against the condemning authority in such condemnation proceedings or
otherwise for any damages allowed to Tenant by law if such claim shall not
diminish or otherwise adversely affect Landlord's award. If the condemnation
shall result in the taking of only a portion of the Building and shall not
materially adversely affect the conduct of Tenant's business in the Premises,
this Lease and Tenant's obligations hereunder, including, without limitation,
the payment in full of all Base Rent and Additional Rent, shall continue in full
force and effect.

15.               Indemnification.

Tenant shall indemnify and save harmless Landlord from and against any and all
claims arising from the occupancy, conduct, operation or management of the
Premises or from any work or thing whatsoever done or which was not done in or
on the Premises, or arising from any breach or default on the part of the Tenant
in the performance of any covenant or agreement on the part of Tenant to be
performed pursuant to the terms of this Lease, or under the law, or arising from
any act, neglect or negligence of Tenant, or any of its agents, contractors,
servants, employees, or licensees, or arising from any accident, injury or
damage whatsoever occurring during the term of this Lease, in or about the
Premises, and from and against all costs, expenses and liabilities incurred in
connection with any such claim or action or proceeding brought thereon
(including without limitation the fees of attorneys, investigators and experts);
and in case any action or proceeding be brought against Landlord by reason of
any such claim, Tenant upon notice from Landlord covenants at Tenant's cost and
expense to resist or defend such action or proceeding or to cause it to be
resisted or defended by an insurer.

The indemnification of the Landlord will not apply to the Landlord's own
negligence or willful acts.

16.              Default by Tenant; Termination and Entry; Distraint.

16.1      Default.     In the event Tenant shall at any time be in default in
the payment of rent herein
reserved, or of any other sum required to be paid by Tenant under this Lease, or
in the performance of or compliance with any of the terms, covenants, conditions
or provisions of this Lease, or compliance with any rule or regulation
promulgated by Landlord, or if Tenant shall file a petition for relief under the
federal Bankruptcy Code or shall have filed against it a petition in bankruptcy
or insolvency which is not discharged within forty-five (45) days of filing, or
Tenant shall make an assignment for the benefit of creditors or shall file any
proceedings for reorganization or an arrangement under any federal or state law,
or if any proceedings for the appointment of a receiver shall be instituted by
any creditor of Tenant under any state or federal law which is not discharged
within forty-five (45) days of filing, or if Tenant is levied upon and is about
to be sold out upon the Premises under execution or other legal process, or if
the Premises shall be deserted abandoned or vacated, or if Tenant fails to
continuously conduct its business activities in the Premises, the occurrence of
any such event shall constitute an event of default and a breach under this
Lease. 16.2 Termination and Entry. Upon the occurrence of any event of default
or breach of this Lease, Tenant shall receive written notice thereof and shall
have a period of five (5) days, in the case of a monetary default, or thirty
(30) days, in the case of a nonmonetary default, within which to cure said
default or, only in the case of a nonmonetary default, have thirty (30) days to
notify Landlord that it is proceeding in good faith to cure said default or
breach. In the event that Tenant has failed within said period to cure the
default or breach, or provide the notice aforesaid, then in addition to any
other rights or remedies Landlord may have under this Lease or at law or in
equity, Landlord shall have the right to terminate this Lease and the term
hereby created without any right on the part of Tenant to waive the forfeiture
by payment of any sum due or by other performance of any condition, term or
covenant broken. In such event Landlord shall have the right to re-enter or
repossess the Premises, either by force, summary proceedings, surrender or
otherwise, and dispossess and remove therefrom the Tenant, and any other
occupants thereof, and their effects, without being liable for any prosecution
therefore. Landlord may store such effects at Tenant's expense and/or dispose of
all or any of them at any time(s) without being liable to Tenant in any manner.
In such event Landlord may, at its option, relet the Premises or any part
thereof for such term as Landlord desires and in such event Tenant shall be
liable for and shall pay to Landlord, as and for liquidated and agreed current
damages for Tenant's default, all rent then due and the rent for the unexpired
balance of the lease term less the net proceeds of any reletting after deduction
of all Landlord's expenses in connection with such reletting, including, without
limitation all repossession costs, brokerage commissions, legal expenses,
attorneys fees, and costs of alterations. Such reletting and liquidation damages
shall not apply if the lessee pursuant to such reletting defaults.
Notwithstanding the foregoing, upon default hereunder the balance of the rent
unpaid for the remainder of the term of this Lease, together with all other
charges, payments, costs and expenses herein agreed to be paid by Tenant, and
all costs and reasonable attorneys fees of Landlord (whether internal or
external) incurred and likely to be incurred in connection with any default or
the collection of sums due from Tenant hereunder, shall become immediately due
and payable without any notice or demand whatsoever by Landlord and may be
collected by distraint or any other means. It is agreed that the Landlord will
exercise reasonable efforts to mitigate its damages.

 
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Village Comer EMBASSY Lease 022503
 

16.3      U.C.C. Rights.      Upon default by Tenant, Landlord shall have and
may exercise any of or all of the rights and remedies provided to a secured
party under the Uniform Commercial Code then in force in Pennsylvania provided,
however, that upon request of Tenant, Landlord shall execute a waiver of its
lien as to leased or financed equipment or fixtures in favor of any bank,
leasing company or other lender providing financing for Tenant.

16.4      Assignee's Rights.      The right by Landlord to exercise any and all
rights upon a default may also be exercised by any assignee of this Lease or of
Landlord's right, title and interest in this Lease in the name of the Landlord
or in the name of such assignee. Landlord and Tenant acknowledge Landlord's
right to assign its rights in this Lease and Tenant hereby consents to such
assignment and upon written notice from Landlord and an assignee agrees to make
any and all payments hereunder directly to said assignee.

16.5      Non-exclusivity.     No right or remedy herein conferred upon or
reserved to Landlord is intended to be exclusive of any other right or remedy
herein or by law provided but each shall be cumulative and in addition to every
other right or remedy given herein or now or hereafter existing at law or in
equity by statute.

16.6     Waiver. No waiver by Landlord of any breach by Tenant of any of
Tenant's obligations, agreements or covenants herein shall be a waiver of any
subsequent breach or of any obligation, agreement or covenant, nor shall any
forbearance by Landlord to seek a remedy for any breach by Tenant be a waiver by
Landlord of any rights and remedies with respect to such breach or default or
with respect to any other breach or default.

16.7      Cure by Landlord.     If Tenant shall be in default hereunder,
Landlord may, but shall not be
obligated to, in addition to any other rights which Landlord may have, cure such
default on behalf of Tenant. In such event Tenant shall reimburse Landlord upon
demand for any sums paid or costs incurred by Landlord in curing such default,
including an administration fee of fifteen percent (15%) per annum of all sums
advanced by Landlord as aforesaid, which sums, costs and fee shall be deemed
Additional Rent payable hereunder.

17.              Notices.

Notices required or provided for in the Lease Agreement shall be given in
writing by personal hand delivery or United States certified mail, postage
prepaid, addressed as follows:

To Landlord at:
Vincent A. Palumbo, Manager

Village Corner, LLC
1612 W. Allen Street 2nd floor
Allentown, PA, 18102

 
With a Simultaneous
Copy to:
Charles E. Shoemaker, Jr., Esquire

727-729 North 19th Street
Allentown, PA,   18104

To Tenant at:
Embassy Bank

P.O. Box 20405
Lenigh Valley, PA, 18002-0405
Attn. David M. Lobach Jr.

 
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Village Coiner EMBASSY Lease 022503
 
With a Simultaneous
Copy to:
Attorney Fred Jacobs

214 Bushkill Street
Easton, PA, 18042-1886
 
or to such other address or persons as the parties may designate by notice in
accordance with this paragraph. Payments of rent hereunder shall be made to
Landlord at the address from time to time designated as aforesaid for the giving
of notice.

18.              Effect of Agreement.

18.1      Construction.     This Lease shall constitute the entire agreement of
the parties and supersedes all prior or contemporaneous agreements and
understandings, and there are no other terms and conditions other than those set
forth herein. No covenant or condition not expressed in this Lease shall be
effective to interpret, change, or restrict this Lease. No change, termination
or attempted waiver of any of the provisions of this Lease shall be binding on
the parties unless in writing. The rights, obligations, duties and agreements of
the parties hereto shall inure to and be binding on their respective heirs,
administrators, executors, personal representatives, successors and assigns,
except as otherwise herein provided.

Nothing herein expressed or implied is intended or shall be construed to confer
upon or to give to any person or entity, other than the parties hereto, their
respective heirs, administrators, executors, personal representatives,
successors and assigns and their respective partners or shareholders, or any of
them, any rights or remedies under or by reason of this Lease.

18.2     Invalid Provisions.      If any term, condition, clause or provision of
this Lease is determined to be invalid or unenforceable, then all other terms,
conditions, clauses or provisions herein set forth shall nevertheless be valid
and continue in full force and effect.

18.3     Applicable Law, Jurisdiction and Venue. This Lease and the
interpretation and construction thereof shall be governed by the laws of the
Commonwealth of Pennsylvania. This Lease may not be recorded without the consent
of Landlord and Tenant, and any such recordation without written consent shall
be of no effect and, if recorded by Tenant, shall, at the option of Landlord, be
an event of default hereunder by Tenant.

The parties hereto agree that the sole and exclusive jurisdiction and venue for
and with regard to the resolution of any and all disputes between the parties
hereto shall be vested in the Court of Common Pleas of Lehigh County,
Pennsylvania.

18.4      Headings.      The headings and captions in this Lease shall be given
no effect and are only for convenience.

18.5     Pledge of Lease.     Tenant shall not pledge its interest in this Lease
or grant any security interest in its interest in this Lease or otherwise
hypothecate this Lease. The immediately preceding sentence shall apply in all
events including, without limitation, in the event of any financing obtained by
Tenant involving the Premises or in the event of any loan whatsoever.

IN WITNESS THEREOF, the parties hereto have executed this Lease Agreement under
seal the day andyear first above written, intending to be legally bound thereby.

ATTEST:
 
LANDLORD:
            /s/ Mary Shelley   /s/ Vincent A. Palumbo      
Village Corner, LLC
     
By:
Vincent A. Palumbo, Manager
                     
WITNESS:
 
TENANT:
              /s/ Elmer Gates   /s/ David M. Lobach Jr.      
Embassy Bank
     
By:
David M. Lobach Jr.  

 
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ADDENDUM
TO
LEASE AGREEMENT
 
The following shall be added and/or amended and made part of the Lease Agreement
entered into between the undersigned parties on     March 21,    2003, 2003.

Section 1.1    Leased Premises     The following is to be added as the second
paragraph - "The building and the leased premises shall be constructed in a good
and workmanlike manner and in conformity with the building plans and
specifications which are attached as Exhibit "C." The Landlord will correct or
cause to be corrected any defects in materials or workmanship provided a list of
all such defects is given to Landlord within ninety (90) days of Tenant's
occupancy."

Section 1.2    Use of Premises     The following sentence shall be added at the
end of Section 1.2 - "No suites or space In the Village Corner complex will be
leased to or used by any Tenant for the conduct of a check cashing or pay day
loan business, pawn shop, massage parlor, retailer of 'sexual aids' or similar
type businesses."

Section 1.4    Landlord's Right of Entry     The first sentence is amended to
read "Landlord and its agents and employees shall have the right to enter the
Premises at all reasonable times, and upon twenty-four (24) hours prior notice
to Tenant, In order to examine it, to show it to prospective purchasers,
mortgagees or tenants, to make repairs, alterations, Improvements or additions
as Landlord may deem necessary or desirable and for any other purpose
whatsoever. However no 'for sale' or 'for rent' signs shall be placed inside or
on the Premises."

Section 2.1    Initial Term     The first and second sentences are replaced by
the following: The term of this Lease for the Premises shall be a period of five
(5) years (hereinafter the "Initial Term") beginning on the date (herein
sometimes called the "Commencement Date") of substantial completion of the
Premises or upon physical occupancy of the Tenant whichever occurs first
Substantial completion shall be deemed to have occurred thirty (30) days after
the Premises may be occupied for the uses herein provided as evidenced by a
Certificate of Occupancy issued by the applicable municipal authority.

Section 3.1    Base Rent     The last sentence of the first paragraph shall be
amended to read "Beginning with the twenty-fifth (25th) month following the
Commencement Date and annually thereafter, as of the anniversary of the
Commencement Date, the Base Rent shall be adjusted to Fair Market Value as
provided in Paragraph 3.3."
 
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Section 3.5    Changes in Operating Expenses. Insert the following statement
between the first and second paragraph of this section "Tenant will be given the
opportunity to review, obtain reasonable verification of and consult with the
Landlord for thirty (30) days after each September 30 concerning adjustments in
Tenant's percentage share of the increased operating expenses before the
adjustments have to be paid over the next nine months."

Section 3.9    Security Deposit.     This section is amended to read: "In lieu
of a Security Deposit, Tenant shall pay the first month's rent upon the signing
of this lease as a good faith deposit for the full and faithful performance by
Tenant of the terms and conditions of this Lease." The remainder of this section
is stricken.

Section 4.1     Casualty Loss.    The wording 'effective as of the date of
determination' is changed to read 'effective as of the date of destruction'

Section 6.4
    Improvements.    This   Section  shall  be   replaced  in  its  entirety  by  the
following: "Tenant shall have the right, at Tenant's expense, to make and
install such improvements, additions, fixtures, equipment, and installations in
the Premises as Tenant shall desire, subject to Landlord's prior written
consent, which consent shall not be unreasonably withheld. Tenant shall comply
with all laws, rules, ordinances and directives applicable to all work performed
by Tenant or on Tenant's behalf. Tenant shall obtain all required permits and
approvals with respect to all such work, Tenant shall not commence any such work
unless and until Tenant has complied with all of Landlord's requirements with
respect thereto, including, without limitation, requirements for insurance,
mechanics lien waivers, approval of contractors and subcontractors and approval
of plans and specifications. All improvements, additions, fixtures, and
installations (including the proposed canopy), other than movable equipment,
including without limitation, items which are an integral part of the Building
or a building system (such as fixtures, plumbing, and telephone, electrical and
other utility lines) shall be the property of the Landlord on termination of the
Lease and may not be removed by Tenant." However, it is understood that the
vault, ATM machines, night depositories, drive-thru equipment and other bank
equipment placed in this location may be removed at Tenant's expense or, in the
alternative, may remain on the premises at the termination of the lease
providing that it will be the responsibility and the expense of Tenant to
restore the vacated area to Landlord's satisfaction.

Section 10.2  Approvals       Insert as 10.2.1 'Tenant's obligations under this
Lease are conditioned upon the approval of the Lease and the location of the
premises by the Pennsylvania Department of Banking and the FDIC for which Tenant
shall diligently apply following the signing hereof.   In the event such
approvals cannot be obtained, this Lease shall be void and all deposits and
rentals previously paid by Tenant shall be refunded without offset."

 
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Section 16.1     Insolvency     Insert as 16.1.1 "Not withstanding any other
provisions contained in this Lease, in the event (a) Tenant or its successors or
assignees shall become insolvent or bankrupt, or their interests under the Lease
shall be levied upon or sold under execution or other legal process, or (b) the
depository institution then operating on the Premises is closed, or is taken
over by any depository institution supervisory authority (hereinafter referred
to as the "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 Landlord for rent, damages or indemnity for
injury resulting from the termination, rejection, or abandonment of the
unexpired Lease shall by law in no event exceed all accrued and unpaid rent to
the date of termination."

All other terms and conditions of the Lease Agreement shall remain in full force
and effect.

IN WITNESS THEREOF, the parties hereto have executed this Addendum to Lease
Agreement under seal the day and year set forth below, intending to be legally
bound thereby.

ATTEST:
 
LANDLORD:
   
Village Corner, LLC
                   
/s/ Mary Shelley
 
By:
/S/ Vincent A. Palumbo
   
Vincent A. Palumbo, Managing Partner
   
Village Corner, LLC
             
Date:
 3-18
, 2003
         
WITTNESS/ATTEST:
 
TENANT;
   
EMBASSY BANK
         
 
 
BY:
/s/ David M. Lobach Jr.
             
TITLE:
CEO
             
Date:
3/21
, 2003

 
 
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