Exhibit 10.3


 


STOCK PLEDGE AGREEMENT


 


THIS STOCK PLEDGE AGREEMENT (“Agreement” or “Pledge”)
is made and entered into this 20th day of November, 2009, by and between FIRST
CHESTER COUNTY CORPORATION, a Pennsylvania business corporation having its
principal office at 9 North High Street, West Chester, Pennsylvania 19380 (the “Pledgor”),
and GRAYSTONE TOWER BANK, a Pennsylvania chartered bank having an office at 112
Market Street, Harrisburg, Pennsylvania (the “Pledgee”).


 


Background:


 


A.            Pursuant
to that certain Loan Agreement of even date herewith between Pledgor, as
borrower, and Pledgee, as lender, Pledgee has extended to Pledgor a
non-revolving term loan in the principal sum of Four Million Dollars
($4,000,000.00) (the “Loan”).  The Loan
is evidenced by a Promissory Note of even date herewith, as may be amended from
time to time, in the face amount of Four Million Dollars ($4,000,000.00) (the “Note”).


 


B.            To
induce Pledgee to provide the Loan to Pledgor, and as security for the payment
of all of Pledgor’s obligations in connection with and/or under the Loan and
the Note, as may be amended, from time to time, and any and all other
contracts, agreements and obligations of Pledgor to Pledgee (collectively, the “Obligations”),
Pledgor desires to pledge to Pledgee 30,000 shares of common stock, $20.00 par
value per share (“Stock”) of First National Bank of Chester County (the “Bank”).


 


NOW, THEREFORE, for and in consideration of the
matters recited above, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, Pledgor agrees as follows:


 


1.             Security Interest.  Pledgor hereby pledges and grants to Pledgee
a security interest in and a first lien on all of the shares of Stock in the
Bank now owned or hereafter acquired by Pledgor, and all cash, securities and
property paid and/or distributed to or for the benefit of Pledgor or its
assignee as a consequence of Pledgor’s ownership of the Stock, or any portion
thereof (collectively, the “Collateral”). Pledgor hereby represents and
warrants to Pledgee that, on the date of this Agreement, Pledgor owns 30,000
shares of Stock in the Bank, free and clear of any liens, claims and
encumbrances, which represents all of the issued and outstanding shares of
common stock of the Bank.


 


2.             Obligations Secured.  The Collateral and the continuing security
interest granted herein shall secure the satisfaction in full of all
Obligations and all amounts payable under the Note and Loan Agreement.


 

















 


3.             Delivery of Stock and
Assignments.  Concurrently
with the execution of this Agreement, all original certificates and instruments
representing or evidencing 30,000 shares of Stock owned in the name of Pledgor
shall be delivered to and held by or on behalf of Pledgee pursuant hereto and
shall be in suitable form for transfer by delivery, accompanied by duly
executed instruments of transfer or assignments in blank, in such form as
Pledgee may request.


 


4.             Covenants.  Pledgor covenants and agrees that until all
Obligations are satisfied and the amounts due and owing under the Note have
been paid in full, Pledgor shall:


 


4.1     Sale of Collateral.  Not sell, transfer, assign or otherwise
dispose of the Collateral, or any portion thereof, without the prior written consent
of Pledgee.


 


4.2     Creation of Liens.  Not create, incur or permit to exist any
pledge, encumbrance, trust, lien, security interest or charge of any kind on
the Collateral, or any portion thereof.


 


4.3     Additional Documents and
Future Actions.  Pledgor
will take such actions and provide Pledgee, from time to time, with such
agreements, financing statements and additional instruments, documents or
information as Pledgee may reasonably deem necessary or advisable to perfect,
protect and maintain its security interests in the Collateral or any portion
thereof, to permit Pledgee to protect its interest in the Collateral or any
portion thereof, and/or to carry out the terms hereof.  Pledgor irrevocably authorizes the filing of
carbon, photographic or other copies of this Pledge, or of a financing
statement, as a financing statement, and agrees that such filing shall be
sufficient as a financing statement.


 


4.4     Requested Information.   Pledgor shall deliver to Pledgee such data
and information in respect of the financial condition and affairs of Pledgor
and the value of the Collateral as Pledgee may request, from time to time.


 


5.               Default.  The occurrence of an Event of Default as
defined under the Note or Loan Agreement and/or the failure of Pledgor to
perform any of its obligations hereunder shall constitute a default (“Default”)
hereunder.


 


6.               Voting, Distribution and
Other Rights of Pledgor and Pledgee.


 


6.1     Prior to a Default.  So long as no Default shall have occurred and
is continuing, Pledgor shall be entitled to continue to exercise any and all
voting and other rights arising under the Collateral and to receive and retain
any and all dividends, distributions and interest, declared, distributed or
paid, with respect to the Collateral, or any portion thereof.


 


6.2     After a Default.  Upon a Default and at all times thereafter:


 


(a)      Voting and Dividends.  Pledgee shall be entitled to exercise any and
all voting and other consensual rights arising under the Collateral and to
receive and retain any and all 


 


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dividends, distributions and interest, declared, distributed or paid,
with respect to the Collateral, or any portion thereof.


 


(b)     Sale of Collateral.  Pledgee may exercise in respect of the
Collateral any and all of the rights and remedies of a secured party upon
default under the Pennsylvania Uniform Commercial Code. In addition to the
foregoing, Pledgee may accept and take possession and title to the Stock in
full or partial satisfaction of the Obligations then owing by Pledgor to
Pledgee under the Note.  Pledgee may also
sell the Collateral, or any part thereof, in one or more blocks at public or
private sale, at any exchange or otherwise or for future delivery, and at such
price or prices and upon such other terms as are commercially reasonable.
Notwithstanding the foregoing, Pledgee shall not be obligated to make any sale
of Collateral.


 


(c)      Application of Proceeds.  Any cash held by Pledgee as Collateral and
all cash proceeds received by Pledgee in respect of any sale of, collection
from, or other realization upon the Collateral, or any portion thereof, may be
held by Pledgee as Collateral for, and/or then or at any time after a Default
applied in whole or in part by Pledgee against all or any Obligations and sums
owing by Pledgor under the Note.  Any
surplus of such cash or cash proceeds held by Pledgee and remaining after
payment in full of the sums owing under the Note shall be returned to Pledgor.


 


7.               Reasonable Care.  Pledgee shall exercise reasonable care in the
custody and preservation of the Collateral in its possession.


 


8.               Return of Collateral.  Upon the satisfaction by the Pledgor of all
of its Obligations under the Note and the termination or full performance of
any agreement, contract or other arrangement as may exist between Pledgor and
Pledgee for the transfer or sale of any of the shares of Stock to Pledgee, this
Agreement and the security interest given in the Collateral shall be
terminated. Within ten (10) days thereof, the Pledgee shall deliver the
Collateral to Pledgor.


 


9.               Miscellaneous.


 


9.1 Communications
and Notices. Any notice given pursuant to this Agreement shall
be in writing, and may be telecopied, delivered by hand, mailed by first-class
certified mail, return receipt requested, postage prepaid, or dispatched by
next-day delivery service addressed, if to Pledgor or Pledgee, at the following
addresses, or at such other address as the addressee may designate in writing:


 


If to Pledgor:


 


First Chester County Corporation


9 North High Street


West Chester, PA 
19380


Attn:


 


3

















 


If to Pledgee:


 


Graystone Tower Bank


112 Market Street


Harrisburg, PA 
17101


Attn:  Carl D.
Lundblad, General Counsel


 


Any communications given by mail in accordance herewith are deemed to
have been given three (3) business days after the date of the mailing, if
a domestic mailing, or five (5) business days after the date of the
mailing, if oversees; any communications sent by next day delivery service are
deemed to have been given the day after being sent; and communications given by
any other means are deemed to have been given when sent or delivered, as the
case may be.


 


9.2 Severability.  The provisions of this Pledge are deemed to
be severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force
and effect.


 


9.3 Headings.  The headings of the Articles, Sections,
paragraphs and clauses of this Pledge are inserted for convenience only and
shall not be deemed to constitute a part of this Pledge.


 


9.4 Binding
Effect.  This Pledge and
all rights and powers granted hereby will bind and inure to the benefit of the
parties hereto and their respective heirs, executors, personal representatives
and permitted successors and assigns, as applicable.


 


9.5 Amendment.  No modification of this Pledge shall be
binding or enforceable unless in writing and signed by or on behalf of the
party against whom enforcement is sought.


 


9.6 Governing
Law.  This Pledge has been
made, executed and delivered in the Commonwealth of Pennsylvania, United States
of America, and shall be construed in accordance with and governed by the laws
of such State.


 


9.7  No Third-Party
Beneficiaries.  The rights
and benefits of this Pledge shall not inure to the benefit of any third party.


 


9.8 Counterparts.  This Pledge may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Pledge by signing
any such counterpart.


 


9.9 No Joint
Venture.  Nothing
contained herein is intended to permit or authorize Pledgee to make any
contract on behalf of Pledgor, nor shall this Pledge be construed as creating a
partnership, joint venture or making Pledgee an investor in Pledgor.


 


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9.10 Jurisdiction
and Venue. For the purpose of any suit, action or proceeding
arising out of or relating to this Pledge, Pledgor hereby irrevocably consents
and submits to the jurisdiction and venue of any of the courts of the
Commonwealth of Pennsylvania, United States of America in and for the County of
Dauphin and irrevocably agrees to accept service of process by certified mail,
return receipt requested, postage prepaid, to its address set forth herein, in
lieu of personal service.  Pledgor
irrevocably waives any objection which it may now or hereafter have to the
venue of any such suit, action or proceeding brought in such court and any
claim that such suit, action or proceeding brought in such court has been
brought in an inconvenient forum, and agrees that service of process in
accordance with the foregoing sentence shall be deemed in every respect
effective and valid personal service of process upon Pledgor.  The provisions of this paragraph shall not
limit or otherwise affect the right of Pledgee to institute and conduct an
action in any other appropriate manner, jurisdiction or court.


 


9.11 Waiver of
Jury Trial.  Pledgor does
hereby waive the right to trial by jury in any action arising hereunder, or
otherwise in connection herewith.


 


9.12  Indemnification.  Pledgor hereby agrees to indemnify, defend
and hold Pledgee harmless from any loss, expense or damage on account of
anything arising out of or in connection with this Pledge, unless caused solely
by Pledgee’s gross negligence or willful misconduct.  This indemnity shall survive the repayment of
the Note.


 


9.13 Scrivener.  Each and every provision of this Pledge has
been mutually negotiated, prepared and drafted and, in connection with the
construction of any provision hereof, no consideration shall be given to the
issue of which party actually prepared, drafted, requested, deleted or
negotiated any provision of this Pledge.


 


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IN WITNESS WHEREOF, Pledgor has executed this Pledge
as of the day and year first above written.


 


	
   

  	
  PLEDGOR:

  
	
   

  	
   

  
	
   

  	
  FIRST CHESTER COUNTY CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Featherman, III

  
	
   

  	
  Name: John A. Featherman, III

  
	
   

  	
  Title: Chairman, CEO and President

  
	
   

  	
   

  	
   

  
	
   

  	
  PLEDGEE:

  
	
   

  	
   

  
	
   

  	
  GRAYSTONE TOWER BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Merrill

  
	
   

  	
  Name:

  	
  Mark Merrill

  
	
   

  	
  Title:

  	
  EVP/CFO

  



 


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