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Exhibit 10.8
COMMERCIAL LEASE AGREEMENT
 

THIS COMMERCIAL LEASE AGREEMENT (hereinafter called the "Lease") is made this 17
day of June, 2008 by and between Pierpont Slater Properties, which has as its
address 5828 Old Bethlehem Pike, Center Valley, PA 18034, or its assignee or
nominee (the "Lessor")

AND

EMBASSY BANK FOR THE LEHIGH VALLEY, a Pennsylvania financial institution, which
has as its address 100 Gateway Drive, Suite 100, Bethlehem, Pennsylvania 18017
(the "Lessee").

1.           IMPROVED LEASED PREMISES. In consideration of the rents, covenants
and agreements set forth herein, and subject to the terms and conditions of this
Lease, Lessor hereby leases to Lessee those certain premises located at Route
378 & Colesville Road, Lower Saucon Township, Northampton County, PA (the
"Improved Lease Premises"). A description of said Improved Lease Premises is
attached hereto as Exhibit "A".

  (a)   Lessee's obligations under this Lease are conditioned upon the approval
of this Lease and the location of such bank branch by the Pennsylvania
Department of Banking and the FDIC for which Lessee shall diligently and in good
faith apply immediately following the execution of this Lease by the parties
hereto. In the event such approvals are not obtained within 180 days of the date
of this Lease, this Lease shall be null and void and all payments, if any, made
by Lessee to Lessor shall be refunded to Lessee without offset.

2.           TERM.
 
  (a)   The term of this Lease for the Improved Leased Premises shall be Ten
(10) years commencing on the date Lessor has substantially completed the
improvements in accordance with Lessor's Work attached hereto as Exhibit "B" and
a certificate of occupancy is issued by the applicable municipal authority (the
"Commencement Date").
 
  (b)  Lessee shall have the option to extend the Term of this Lease for four
successive five (5) year terms (each, a "Renewal Term"), on the same terms and
conditions set forth herein, provided that the rental during the original Term
for each Renewal Term, commencing upon the fifth anniversary of the Commencement
Date (i.e. the sixth year of the lease Term) shall increase at the rate of two
and seventy five hundredths percent ( 2.75%) per year and as provided in Section
4 hereof. Lessee may exercise its right to renew the Lease Term by providing
Lessor with written notice of its option to renew the Lease not less than nine
(9)  months prior to the expiration of the then current Term or Renewal Term.
 
  (c)   Notwithstanding anything to the contrary contained herein, the term
of  this lease shall be such term that enables Lessee to report and account for
this lease as an operating lease, as that term is generally defined for
accounting purposes. In the event the term set forth above does not permit such
classification, or requires Lessee to report and account for this lease as a
capital lease, the parties shall negotiate in good faith as to a revised term.
If the parties are unable to agree on the same, this lease shall be null and
void and all payments, if any, made by Lessee to Lessor shall be refunded to
Lessee without offset, excepting those Lease payments made based upon Lessee's
actual occupancy of the Premises.

 
 

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3.           USE. Lessee shall use the Improved Leased Premises as an Embassy
Bank or any successor bank or, with Lessor's prior written consent, for any
other lawful purpose permitted under zoning and other applicable laws,
ordinances, and regulations.

4.           RENT.

  (a)   During the first year of the Term, Lessee shall pay to Lessor as minimum
annual rent the sum of One Hundred Sixty Two Thousand Nine Hundred Dollars
($162,900.00), payable in equal monthly installments of Thirteen Thousand Five
Hundred Seventy Five Dollars ($13,575.00) each. Thereafter, commencing upon the
fourth anniversary of the Commencement Date, for each Lease year during the Term
and any Renewal Term, minimum annual rent shall equal the minimum annual rent
payable in the immediately preceding Lease year, multiplied by two and seventy
five hundredths percent (2.75%) (e.g., the prior year's rental plus an increase
of 2.75%). Such minimum annual rent shall be payable in advance, in equal
monthly installments on the first day of each calendar month during the term
hereof, without demand, offset or deduction, and shall be payable in lawful
money of the United States of America.

  (b)   This Lease is intended to be a "triple net" lease. Accordingly, Lessee
agrees to pay as additional rent, all charges for utilities, taxes, assessments
and other governmental charges with respect to the Improved Leased Premises and
as may be further provided in this Lease. It is the parties' intent that Lessee
shall pay all such charges directly. In the event Lessor shall receive any such
charges, Lessor shall bill Lessee for any such charges and Lessee shall promptly
pay Lessor for such charges upon invoice. In the event of nonpayment of
additional rent, Lessor shall have, in addition to all other rights and
remedies, all the rights and remedies provided for herein or by law in the case
of nonpayment of the minimum rent.

  (c)   For all purposes under this Lease, rent shall mean both minimum and
additional rent. Rent shall be delivered to Lessor at Lessor's address as set
forth above, or at such other place or to such other person as Lessor may
designate in writing from time to time.

  (d)   Any and all rent payments payable under this Lease Agreement shall be
paid to Lessor at an account or accounts maintained at Embassy Bank For The
Lehigh Valley.

  (e)   Lessor shall provide Lessee with a LESSEE improvement allowance of One
Hundred and Fifty Thousand Dollars ($150,000.00) for use exclusively for LESSEE
fit out of the Premises.

5.           ALTERATIONS AND IMPROVEMENTS.

  (a)   Lessee shall not make or cause to be made any alterations, additions or
improvements to the Improved Leased Premises without the prior written consent
of Lessor. All alterations, additions or improvements approved by Lessor shall
be made solely at Lessee's expense by a contractor approved by Lessor, shall be
made in a good and workmanlike manner and shall be performed in compliance with
all laws, ordinances and requirements of any and all Federal, State, Municipal
and/or other authorities, the Board of Fire Underwriters and any mortgages to
which the Improved Leased Premises is subject. Any alteration, addition or
improvement made by Lessee under this Section 5, and any fixtures installed as a
part thereof, shall, at Lessor's option, become the property of Lessor upon the
expiration or other termination of this Lease. Lessor shall have the right,
however, to require Lessee to remove such fixtures at Lessee's cost upon such
termination of this Lease, and Lessee shall promptly remove the same and repair
any damage to the Improved Leased Premises caused by such removal.

 
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  (b)   In the event of a lien or claim of any kind, arising out of the exercise
of the rights set forth hereunder by Lessee, its agents, employees, contractors,
subcontractors, and materialmen, being filed against the interest of Lessor, any
mortgagee and/or against the Improved Leased Premises, Lessee covenants and
agrees that at its expense it will within thirty (30) days after written notice
from Lessor, cause the Improved Leased Premises and any such interest therein to
be released from the legal effect of such lien or claim, either by payment or by
posting of bond or by the payment into court of the amount necessary to relieve
and release the Improved Leased Premises or the interest from such claim or in
any manner satisfactory to Lessor and any mortgagee. If Lessee desires to
contest the validity of any lien or claim, Lessee may do so upon Lessor's prior
written consent, provided Lessee sustains the cost of such contest, and Lessee
remains liable to pay or discharge any lien or claim deemed to be due or
payable. Lessee hereby indemnifies and holds Lessor harmless against any and all
liability, loss or damage sustained by Lessor by reason of such contest, unless
such contest arises from any negligent or intentional act or omission of Lessor.

6.           UTILITIES. Lessee shall pay, when the same shall become due, all
charges for utilities consumed by it on the Improved Leased Premises including
without limitation electricity, heat and telephone, and any other utilities, as
well as water and sewer charges, provided such utilities shall be separately
metered as to the Improved Leased Premises. In the event any such utilities
shall not be separately metered, but rather shared with another LESSEE or with
Lessor, the parties hereto shall provide for a mechanism of equitably allocating
the cost of such utility(s). Lessor shall not be required to furnish to Lessee
any utility, janitorial or other service of any kind whatsoever during the Term
of this Lease. Notwithstanding the preceding, Lessor shall be responsible for
all costs, including parts, labor and municipal assessments, related to the
Leased Premises' "tie in" or "hook up" to the public sewer system.

7.           MAINTENANCE AND REPAIRS. Lessor has made no representations
concerning the condition of the Improved Leased Premises other than that the
improvements will be completed in accordance with the agreement between the
parties as referred to in Exhibit B hereof. Lessee shall maintain and be
responsible for maintaining and repairing all portions of the Improved Leased
Premises. Lessee, at its sole cost and expense, shall take good care of the
Improved Leased Premises and will maintain the same in good order and condition,
ordinary wear and tear excepted, and make all necessary repairs thereto,
interior as well as exterior, including and without limiting the generality of
the foregoing, roof and structural members, including walls, unless such repairs
or maintenance shall be caused by the negligence or willful misconduct of
Lessor, either in connection with the construction thereof or by any act or
omission subsequent to such construction. Lessee shall be responsible for the
routine regular cleaning of the Improved Leased Premises, and shall keep all
portions of the Improved Leased Premises in a clean and orderly condition, free
of unlawful obstruction, and shall not permit or cause any damage, waste or
injury to the building or other improvements on the Improved Leased Premises.

 
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8.           REFUSE REMOVAL. Lessee shall provide for its own garbage, rubbish
and refuse disposal and agrees to keep the Improved Leased Premises free and
clear of debris. Lessee agrees to keep all rubbish, garbage and refuse in
covered containers within the Improved Leased Premises (or at such other
location identified by Lessor) and to have the same removed regularly.

9.           COMPLIANCE. With regard to its use of the Improved Leased Premises,
Lessee shall, at its own expense, comply with all laws, rules, orders,
regulations, and requirements of all Federal, State, and municipal governments,
courts, departments, commissions, boards, and officers having jurisdiction over
the Improved Leased Premises, the lawful orders, rules, and regulations of the
Board of Fire Underwriters having jurisdiction over the Improved Leased
Premises, any mortgages to which the Improved Leased Premises is subject, and
any rules and regulations of Lessor. Lessee shall have the right to contest by
appropriate legal proceedings, diligently pursued, without cost or expense to
Lessor, the validity of any governmental law, rule, order, regulation or
requirement. Lessee hereby indemnifies and holds Lessor harmless against any and
all liability, loss, or damage sustained by Lessor by reason of such contest.
Notwithstanding any of the foregoing, Lessee shall promptly comply with any such
law, rule, order, regulation or requirement if at any time the Improved Leased
Premises or any part thereof shall then be immediately subject to forfeiture or
Lessee shall be subject to criminal liability for non-compliance therewith.

10.         TAXES. Lessee shall pay as and when the same shall become due all
real property taxes, assessments and other governmental charges assessed against
the Improved Leased Premises during the Term of this Lease. Lessee shall have
the right to contest by appropriate legal proceedings, diligently pursued,
without cost or expense to Lessor, the validity of any such tax, assessment or
other governmental charge. Lessee hereby indemnifies Lessor against any and all
liability, loss or damage sustained by Lessor by reason of such contest.
Notwithstanding any of the foregoing, Lessee shall promptly pay any such tax,
assessment or other government charge if at any time the Improved Leased
Premises or any part thereof shall then be immediately subject to forfeiture or
Lessee shall be subject to any criminal liability for nonpayment thereof.

11.         SURRENDER OF IMPROVED LEASED PREMISES. Lessee covenants that upon
the termination or expiration of this Lease or any renewal thereof, Lessee shall
surrender the Improved Leased Premises in good order and condition and shall
surrender all keys to the Improved Leased Premises to Lessor at the place then
fixed for the payment of rent. This covenant shall survive termination of this
Lease.

12.         RIGHT OF ENTRY. Upon prior notice and in the presence of an
authorized representative of Lessee (whom Lessee agrees to provide upon such
notice received from Lessor), Lessor and/or its agents shall have the right to
enter upon and inspect the Improved Leased Premises at all reasonable times and
to exhibit the Improved Leased Premises to prospective purchasers and
prospective LESSEEs (but in this case, only during the last six (6) months of
the term of this Lease). Lessor shall be permitted to affix a "To Let" or "For
Sale" sign on the Improved Leased Premises during the last ninety (90) days of
the term of this Lease in such place as shall not interfere with the business
then being conducted at the Improved Leased Premises. Lessor acknowledges that
Lessee shall operate the Improved Leased Premises as a bank, and therefore any
inspection or entry upon the Improved Leased Premises shall only occur if all
appropriate security measures shall be complied with.

 
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13.         SIGNS. Lessee shall have the right to Install and maintain on the
Improved Leased Premises such signs and advertising matter as Lessee may
reasonably desire, subject to the prior consent of Lessor. Lessee shall comply
with any laws or ordinances with respect to such signs or advertising, and shall
obtain any necessary permits. Lessee agrees to maintain such signs or
advertising in good condition, and to repair any damage which may be caused by
erection, maintenance, repair or removal of such signs or advertising.

14.         LIABILITY AND OTHER INSURANCE. Lessee shall, during the entire term
hereof, keep in fall force and effect policies of comprehensive liability and
property damage insurance, with respect to the Improved Leased Premises and the
business operated by Lessee in and upon the Improved Leased Premises, in which
the limits of bodily injury liability and property damage liability shall be
mutually agreed upon. The policy (or policies) shall name Lessor, and any
persons, firms, or corporations designated by Lessor, mortgagees, if any, and
Lessee as insured and shall contain a clause that the insurer will not cancel or
modify the insurance without first giving the named parties thirty (30) days
prior written notice. Copies of the policy or certificates of accord or
insurance shall be delivered to Lessor upon the Commencement Date. If Lessee
shall not comply with its covenants made in this section, Lessor may, at its
option, cause insurance as aforesaid to be issued and in such event, Lessee
agrees to pay the premium for such insurance promptly upon Lessor's demand as
additional rent.

15.         WAIVER OF SUBROGATION. Neither Lessee nor anyone claiming by,
through, under or on behalf of Lessee, shall have any claim, right of action, or
right of subrogation against Lessor for or based upon any loss or damage caused
by any casualty, including but not limited to fire or explosion, relating to the
Improved Leased Premises or property therein. Notwithstanding the preceding,
such waiver of subrogation shall not be self-operative, but rather shall only be
effective upon the application by Lessee and the issuance of an appropriate
endorsement to Lessee's insurance policy(s).

16.         INDEMNITY. Lessee hereby agrees to indemnify, hold harmless and
defend, at its own expense, Lessor from and against any and all claims, actions,
damages, liability, judgments and expenses, including without limitation
reasonable attorneys' fees, which may be imposed upon or incurred by or asserted
against Lessor or Lessor's interest in the Improved Leased Premises, by reason
of any loss of life, personal injury or claim of injury, or damage to property
or claim of damage to property in or about the Improved Leased Premises,
howsoever caused, arising out of or relating to the occupancy or use by Lessee,
its employees, agents or invitees, of the Improved Leased Premises, including
without limitation the streets, alleys, sidewalks or parking areas, and
including without limitation any environmental liability, unless such claims,
damages, liability, judgments and expenses are caused by the negligence or
willful misconduct of Lessor. In addition, Lessee shall indemnify, defend and
hold Lessor harmless from and against any and all expenses incurred by Lessor
arising out of or relating to Lessee's failure to pay or perform its obligations
under this Lease.

 
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17.         CASUALTY. In the event that the Improved Leased Premises, or any
portion thereof, are damaged or destroyed by any cause whatsoever, Lessee shall
commence such restoration as soon as possible after such occurrence, but in no
event later than ninety (90) days thereafter, and shall diligently pursue such
repair or restoration to completion, with a contractor approved by Lessor. Rent
shall be equitably abated based on the area of the Improved Leased Premises
rendered untenantable, if any, during the period of such untenantability.
Notwithstanding the foregoing, if destruction of more than forty percent (40%)
of the Improvements on the Improved Leased Premises occurs at any point in the
last three (3) years of the then-current Term of the Lease or if any destruction
of more than ten percent (10%) of the improvements on the Improved Leased
Premises occurs in the last year of the then current Term of the Lease, then
Lessee shall have the right to terminate the Lease.

18.         EMINENT DOMAIN. If the entire Improved Leased Premises shall be
taken by reason of condemnation or under eminent domain proceedings, Lessee may
terminate this Lease as of the date when possession of the Improved Leased
Premises is so taken by the condemning entity. If a portion of the Improved
Leased Premises, including without limitation the building, site improvements,
parking or access, shall be taken under eminent domain or by reason of
condemnation to such an extent that the taking materially adversely affects
Lessee's use of the Improved Leased Premises, Lessee shall have the option to
terminate this Lease by written notice to Lessor within forty-five (45) days of
such taking. If this Lease is not so terminated, Lessee may at its sole cost and
expense, and with a contractor acceptable to Lessor, restore the remaining
portions of the Improved Leased Premises as Lessee deems necessary or
appropriate (subject to applicable law). In such event, rent shall be equitably
adjusted commensurate with the partial taking. For purposes of this Section 18,
(i) a partial taking shall be deemed to include loss or impairment of access to
and from the Improved Leased Premises and (ii) grants or conveyances made in
lieu or in anticipation of or under threat of a taking or condemnation shall be
deemed a taking. Both parties shall pursue their own damage awards with respect
to any such taking, provided however that Lessee shall be entitled to, and
nothing herein shall prevent Lessee from seeking, an award for taking of or
damage to Lessee's trade fixtures and any award for Lessee's moving expenses, so
long as said awards do not diminish the award to which Lessor is entitled.

19.         DEFAULT. The occurrence of any one or more of the following events
shall constitute an "Event of Default" hereunder:
 
  (a)   Lessee shall fail to pay in full when due, any installment of rent or
any other sum payable by Lessee hereunder, and such failure shall continue for a
period often (10) days;

 
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  (b)   Lessee shall fail to perform or observe (or cause or permit any such
failure) any other covenant, term, condition, agreement or obligation to be
performed or observed by Lessee under this Lease, and such failure shall
continue for twenty (20) days after written notice thereof from Lessor to
Lessee; provided however that a failure as described in this Section 19(b) shall
not constitute a default if it is curable but cannot with reasonable diligence
be cured by Lessee within a period of twenty (20) days, so long as Lessee
promptly commences cure and proceeds to cure the failure with reasonable
diligence and in good faith.

  (c)   The insolvency of Lessee, as evidenced by (i) the adjudication of Lessee
as a bankrupt or insolvent; (ii) the filing of a petition seeking reorganization
of Lessee or an arrangement with creditors, or any other petition seeking
protection of any bankruptcy or insolvency law; (iii) the filing of a petition
seeking the appointment of a receiver, trustee or liquidator of Lessee or of all
or any part of Lessee's assets or property; (iv) an assignment by Lessee for the
benefit of creditors; or (v) the levy against any portion of Lessee's assets or
property by any sheriff or other officer.

  (d)  Notwithstanding any other provisions contained in this Lease Agreement,
in the event (a) Lessee or its successors or assignees shall become subject to a
bankruptcy case pursuant to Title 11 of the U.S. Code or similar proceeding
during the term of this Lease or (b) the depository institution then operating
the Improved Leased Premises is closed, or it taken over by any depository
institution supervisory authority (hereinafter referred to as the "Authority")
during the term of this Lease, Lessor may, in either such event, terminate this
Lease only with the concurrence of any Receiver or Liquidator appointed by such
Authority or pursuant to the appropriate order of the Court with jurisdiction
over such case or proceeding, or upon the expiration of the stated term of this
Lease as provided herein, provided that in the event this Lease is terminated by
the Receiver or Liquidator, the maximum claim of Lessor for rent, damages or
indemnity resulting from the termination, rejection, or abandonment of the
unexpired Lease shall by law in no event exceed all accrued and unpaid rent and
additional rent to the date of termination.

20.         REMEDIES. Upon the occurrence of any Event of Default, Lessor shall
have the following rights and remedies in addition to all other rights and
remedies otherwise available at law or in equity:

  (a)   If Lessee shall at any time fail to pay any sum, charge, or imposition
or perform any other act on its part to be performed, then Lessor, after ten
(10) days written notice to Lessee and without waiving or releasing Lessee from
any obligation hereunder, may pay such charge or sum of money or make any other
payment or perform any other act on the Lessee's part to be made or performed,
and may enter upon the Improved Leased Premises for any such purpose, and take
all such action thereon as may be necessary therefor. All sums so paid by Lessor
and all costs and expenses incurred by Lessor in connection with the performance
of any such act, together with interest thereon at the rate often percent (10%)
per annum from the respective dates of Lessor's making of each such payment or
incurring of each such cost and expense, shall constitute additional rent
payable by Lessee under this Lease and Lessor shall have the same remedies for
the collection thereof as in the case of a failure to pay rent.

 
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  (b)   At the option of Lessor and upon written notice to Lessee, this Lease,
without waiver of any other rights of Lessor herein, may be terminated and
declared void, without any right on the part of Lessee to save forfeiture by
payment of any sum due or by performance of any term, covenant, or condition
broken and Lessor may re-enter and possess the Improved Leased Premises without
demand or notice, with or without process of law, using such reasonable force as
may be necessary, without being deemed guilty of trespass, eviction, forcible
entry, conversion or becoming liable for any loss or damage which may be
occasioned thereby. In such event, Lessor shall be entitled to recover from
Lessee all damages incurred by Lessor by reason of Lessee's default including,
but not limited to, the cost of recovering possession of the Improved Leased
Premises; expenses of reletting, including necessary renovation and alteration
of the Improved Leased Premises; reasonable attorneys' fees; rent payment
through the balance of the term; or the difference between the rent to be paid
by the Lessee pursuant to this Lease and the rent charges collected by Lessor
upon reletting;

  (c)   Intentionally deleted.

  (d)   Lessor may retake possession of the Improved Leased Premises without
terminating the Lease, in which case this Lease shall continue in effect whether
or not Lessee shall have abandoned the Improved Leased Premises. In such event,
Lessor shall be entitled to enforce all of Lessor's rights and remedies under
this Lease, including the right to recover the rent and any other charges and
adjustments as may become due hereunder;

  (e)   At Lessor's option, the entire rent and other charges which would have
become due during the balance of the lease term or renewal thereof shall be
accelerated and shall at once become due and payable as if by the terms of this
Lease it were all payable in advance, without presentment, demand, notice of
nonpayment, protest, notice of protest, or other notice, all of which are hereby
expressly waived by Lessee;

  (f)   Lessee shall pay Lessor a ten percent (10%) late charge for any rent
payment not paid when due.

  (g)   Upon the occurrence of an Event of Default and the exercise by Lessor of
any of the remedies set forth above in subsections (b), (d) or (e), Lessor shall
use its best efforts to relet the Improved Lease Premises, and shall
appropriately credit Lessee for any rents received, after Lessor recovers its
reasonable costs incurred by reason of Lessee's breach and Lessor's exercise of
its rights hereunder.

21.         CUMULATIVE REMEDIES. Lessor shall have and may exercise ail remedies
available to Lessor hereunder and at law and in equity and all such remedies
shall be cumulative, concurrent, and nonexclusive. The waiver of or failure to
exercise any one or more rights or remedies shall be wholly without prejudice to
the exercise and enforcement of any other right or remedy, whether herein
expressly provided for or given by law or in equity.
 
22.         SUBORDINATION AND ATTORNMENT TO LEASEHOLD MORTGAGEE.

 
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  (a)   Lessee agrees that this Lease shall be subordinate to any mortgages that
may hereafter be placed upon the Lessor's interest in the Improved Lease
Premises and to any and all advances to be made thereunder, and all renewals,
replacements, and extensions thereof, without the necessity of any further
instrument or act on the part of Lessee. This Lease Agreement is expressly
contingent upon Lessor executing, and causing Lessor's mortgagees to execute, a
customary subordination and non-disturbance agreement ("SNDA"). Lessor shall
also cause any future mortgagee of Lessor to execute a similar SNDA.

  (b)   Lessee shall, in the event any proceedings are brought for the
foreclosure of any mortgage made by Lessor covering the Improved Leased
Premises, attorn to the purchaser upon any such foreclosure and sale and
recognize such purchaser as the Lessor under this Lease.

23.         ESTOPPEL CERTIFICATE. Both parties agree, within fifteen (15) days
after the other party's written request, to execute, acknowledge and deliver to
the requesting party a written instrument in recordable form certifying (i)
whether this Lease is in full force and effect and whether there have been any
modifications, supplements, side agreements or amendments and, if so, stating
such modifications, supplements, side agreements and amendments; (ii) the date
to which rent has been paid; (iii) the amount of any prepaid rent and any credit
due Lessee if any; (iv) the Commencement Date and whether any option to renew
the Term has been exercised and, if so, the day that Renewal Term expires; (v)
whether either party is in default in the performance of any covenant, agreement
or condition contained in this Lease and, if so, specifying each such default;
and (vi) such other matters as Lessor or Lessor's mortgagee, or Lessee or
Lessee's leasehold mortgagee may reasonably require. Any such instrument
delivered pursuant to this section may be relied upon by Lessor and Lessee, and
any mortgagee or permitted assignee of any of them, and any prospective
purchaser of the Improved Leased Premises.

24.         MEMORANDUM OF LEASE AND RECORDING. This Lease is expressly
contingent upon Lessor and Lessee executing a Memorandum of Lease hereof, in
form reasonably satisfactory to each of them, and Lessee may record such
Memorandum of Lease in the office of the Recorder of Deeds of and for
Northampton County, Pennsylvania.

25.         ASSIGNMENT AND SUBLETTING. Neither Lessee or its successors or
permitted assigns shall assign this Lease or any interest therein, sublet the
whole or any portion of the Improved Leased Premises or subject its interest in
this Lease to any leasehold mortgage without the prior written consent of
Lessor. No assignment or sublease shall release Lessee from its obligations to
perform the terms, covenants, and conditions of this Lease.

26.         BINDING OBLIGATION. Each and every provision of this Lease shall
bind and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

27.         PROHIBITED ACTS. Lessee shall not use or operate any equipment or
machinery or in any way use the Improved Leased Premises in a way which is
harmful to the Improved Leased Premises. Lessee shall not cause or permit any
hazardous substances to be utilized at, on or in the Improved Leased Premises
except with the prior written consent of Lessor and in strict compliance with
all applicable environmental laws, ordinances, rules and regulations. Lessee
shall not do or allow to be done any acts, omissions, or activity which would
cause the fire, hazard, or any other insurance now in force or hereinafter to be
placed on the Improved Leased Premises or building, or any part thereof, to
become void, suspended, or rated as a more hazardous risk than at the date of
the execution of this Lease. Furthermore, Lessee shall not be permitted to act
or conduct business in any way that is against any applicable law.

 
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28.         LESSOR'S FURTHER AGREEMENTS.

  (a)   Right of First Refusal. In the event Lessor and a third party enter into
a written agreement or letter of intent for the sale of the premises, Lessee
shall have a right of first refusal whereby Lessee may purchase the premises
from Lessor on the same terms and conditions as the third party has offered.
Lessee shall exercise said right of first refusal, within thirty (30) days of
receiving written notice of the intended third party sale. In the event Lessee
fails to exercise such right, Lessor shall be free to sell the premises on the
terms disclosed to Lessee. Any such sale shall be under and subject to the terms
of this lease.

  (b)   During the Term and any Renewal Term and subject to the conditions
hereinafter set forth in (i) and (ii) below, Lessor agrees that it will not sell
or lease any real property or interest therein located within five (5) mile(s)
of the Improved Leased Premises to another bank which competes with Lessee in
the Lehigh Valley, provided however that (i) Lessee is still existing as the
same legal entity as on the date of this Lease and has not been sold, merged or
acquired, and (ii) Lessee is not in default of any of its obligations under this
Lease.

  (c)   Lessor agrees that Lessee may, at its option, declare this Lease void
and of no further effect if, prior to the Commencement Date, the billboard signs
located on the Property are not removed.
 
29.         CONSTRUCTION AND INTERPRETATION. This Lease shall be considered as
having been made, executed, and delivered in the Commonwealth of Pennsylvania,
and all questions regarding its validity, interpretation, or construction shall
be construed in accordance with the laws of this Commonwealth. Words contained
herein that are gender specific, singular, or plural, shall, if the context
permits, be construed to include all genders, and both singular and plural
forms.

30.         WAIVER. No waiver by Lessor of any breach by Lessee of any of its
obligations, agreements, or covenants hereunder and no failure of Lessor to
exercise available remedies allowed upon the occurrence of an Event of Default,
shall be a waiver of any subsequent breach of obligations, agreements, or
covenants and nor shall it be a waiver by Lessor of its rights or remedies with
respect to such or any subsequent Event of Default.

31.         ENTIRE AGREEMENT. This Lease and any exhibits attached hereto and
forming a part hereof set forth all of the covenants, promises, agreements,
conditions, and understanding between Lessor and Lessee concerning the Improved
Leased Premises, and there are no covenants, promises, agreements, conditions,
or understandings, either oral or written, between the parties other than as are
herein set forth. No subsequent alteration, amendment, 10 change or addition to
this Lease shall be binding upon either Lessor or Lessee unless the same is
reduced to writing and executed by Lessor and Lessee.

 
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32.         NOTICES. All notices, elections, requests, demands or other
communications with respect to this Lease shall be in writing and shall be
deemed to have been given when hand delivered, when deposited with a reputable
overnight delivery service (such as Federal Express) or when deposited in a
postal depository maintained by the United States Postal Service, first class
certified mail, postage prepaid to Lessor or Lessee at the addresses recited in
the Preamble to this Lease, or to such other address as designated in writing by
Lessor or Lessee.

33.         PARTIAL INVALIDITY. If any term, covenant, or condition of this
Lease or the application thereof to any person, partnership, association,
corporation, or other entity, is determined to be invalid or unenforceable, the
remainder of this Lease, or the application of such term, covenant, or condition
to persons, partnerships, associations, corporations or other entities other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant, or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by law.

34.         HEADINGS. Any headings preceding the text of the sections set forth
herein are inserted solely for convenience and shall not in any way define,
limit, or describe the scope, intent, or meaning of such sections, and such
headings shall not constitute a part of this Lease.

35.         QUIET ENJOYMENT. Lessor agrees that Lessee, on payment of the rent
and all other charges provided for in this Lease and Lessee's fulfillment of all
obligations under the covenants, agreements and conditions of this Lease shall
and may (subject to the exceptions, reservations, terms and conditions of this
Lease, superior mortgages, and matters of record) peaceably and quietly have,
hold and enjoy the Improved Leased Premises for the Term without interference by
or from Lessor or any party claiming through or under Lessor.

36.         TIME OF THE ESSENCE. Time is of the essence in the performance by
Lessee of its obligations hereunder.

[Signature page follows.]

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

 
 
LESSOR:
WITNESS: 
PIERPONT SLATER PROPERTIES
      Cinthia L. Morley
By:
/s/ Andrew F. S. Warner     Name:
Andrew F. S. Warner
    Title:
President - Partner
             
LESEE:
ATTEST/WITNESS:
EMBASSY BANK FOR THE LEHIGH VALLEY
      Cinthia L. Morley
By:
/s/ David M. Lobach Jr.     Name:
David M. Lobach Jr.
    Title:
CEO

 
 
 

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