ex10_7.htm


    
      
        

      

      Exhibit 10.7

       

      LEASE
AGREEMENT

       

      THIS
LEASE AGREEMENT (the "Lease"), made, entered into, and effective on March 17,
2006, by and between FRANK
BANKO ("Landlord") and EMBASSY BANK FOR THE LEHIGH
VALLEY("Tenant").

       

      WITNESSETH:

       

      For and
in consideration of the mutual covenants and agreements contained herein, the
parties agree as follows:

       

      ARTICLE
I

      DEFINITIONS

       

      
        	
                1.1

              	
                BASIC DATA
      SUMMARY

              


      

       

      The
following is a summary of some of the basic data set forth elsewhere in this
Lease. This summary is intended to serve as a compilation of data for reference
purposes only and in the event of any conflict between the terms of this summary
and the remaining provisions of this Lease, the remaining provisions of this
Lease shall control; notwithstanding the foregoing, capitalized terms used
herein and not otherwise defined shall have the meanings set forth in this
Section.

       

      
        	
                Leased
      Premises:

              	
                The
      first floor of the building at the corner of 9th
      Avenue and West Broad Street, commonly known as 925 West Broad Street,
      Bethlehem, Pennsylvania, such first floor consisting as of the date of
      this Lease, of approximately 2,588 square feet of space. The leased
      premises shall also include, when constructed, a "drive through"
      consisting of an additional 330 square feet (the
    "Premises").

              


      

      


      
        	
                Landlord:

              	
                Frank
      Banko

              


      

      


      
        	
                Landlord's
      Address:

              	
                950
      N. West End Boulevard Quakertown, PA
18951

              


      

      


      
        	
                Tenant:

              	
                Embassy
      Bank For the Lehigh Valley

              


      

      


      
        	
                Tenant's
      Address:

              	
                100
      Gateway Drive, Suite 100 Bethlehem, PA
18017

              


      

      


      
        	
                Tenant's
      Trade Name:

              	
                Embassy
      Bank

              


      

      


      
        	
                Use
      of the Premises:

              	
                Banking
      offices including drive through

              


      

      


      
        	
                Term
      of Lease:

              	
                Five
      (5) years, subject to renewal options as set forth
  below

              


      

      


      
        	
                Commencement
      Date:

              	
                The
      date the Premises are delivered to Tenant for occupancy estimated to be
      March 31, 2006

              


      


      
        
           


        

        
          1

          
            

          

        

        
           


        

      


      
        	
                Minimum
      Rental:

              	
                $45,000.00
      per annum for the initial five-year term and the first five-year renewal
      term, payable in monthly installments of $3,750.00 per month ($15.42 per
      square foot per year), with increases thereafter during the remaining
      renewal terms as set forth in Article IV
below.

              


      

      


      
        	
                Leasehold
      Improvements:

              	
                None
      to be paid or reimbursed by Landlord.   All leasehold
      improvements, including the cost of construction of the drive through,
      shall be the responsibility of and at the cost of
  Tenant

              


      

      


      
        	
                Security
      Deposit:

              	
                None.

              


      

      


      
        	
                Tenant
      Expenses:

              	
                Tenant
      shall pay one-half of all real estate taxes, water, sewer, garbage
      collection, snow removal and landscaping costs relating to the building.
      Tenant shall pay for all electric service to the Premises, which shall be
      separately metered. Tenant shall also maintain liability insurance for an
      amount not less than $3,000,000.00, naming Landlord as an additional
      insured and shall be responsible for all interior maintenance of the
      Premises, including replacing any broken
  windows.

              


      

      


      
        	
                Renewal
      Options:

              	
                Tenant
      shall have four renewal options of five (5) years each and a final renewal
      option of four (4) years, eleven months. Such renewal options must be
      exercised in writing at least one hundred eighty (180) days prior to the
      end of the preceding term.

              


      

       

       

      
        	
                1.2

              	
                LEASE YEAR

              


      

       

      The first
year of this Lease Agreement shall commence on the Commencement Date. Each
successive lease year shall commence on the same date of each year thereafter
during the term of the lease and any renewal terms.

      


       

      ARTICLE II

      DEMISE OF PREMISES AND IMPROVEMENTS

       

      Landlord
hereby leases and demises to Tenant and Tenant hereby leases and takes from
landlord the Premises upon the terms, conditions, covenants and provisions set
forth herein. Landlord and Tenant hereby acknowledge and agree mat the rentable
square footage of the Premises as of the date of this Lease is 2,588 square
feet, not including the 330 square foot drive through to be
constructed.
  

      
        
          
             


          

          
            2

            
              

            

          

          
             


          

        

      

       

      
        	
                2.1

              	
                CONDITION OF
      PREMISES

              


      

       

      Tenant
hereby accepts the Premises in its "AS IS" condition. Tenant acknowledges that,
except for the environmental representation set forth in paragraph 11.7 below,
Landlord has made no representations or warranties whatsoever regarding the
condition of the Premises or its suitability for use by Tenant.

       

       

      ARTICLE
III

      TERM - OBLIGATION TO PAY
RENT - TERMINATION

       

      
        	
                3.1

              	
                TERM

              


      

       

      This
Lease Agreement shall be binding upon the parties from the date hereof, it being
understood and agreed that the term of this Lease shall commence on the first
day of the first lease year and shall continue, unless sooner terminated as
provided herein, for a period of five (5) lease years thereafter.

       

      Tenant
shall have four (4) renewal options of five (5) years each and a fifth and final
renewal option of four (4) years, eleven (11) months. Such renewal options must
be exercised in writing by Tenant at least one hundred eighty (180) days prior
to the end of the preceding term.

       

      
        	
                3.2

              	
                TENANT'S OBLIGATION TO
      PAY RENT

              


      

       

      Tenant's
obligation to pay rent and all other charges set forth in Article IV hereof
shall commence on the "Commencement Date". In the event any of the conditions
set forth in Paragraph 13.1 below are not satisfied, and Tenant gives Landlord
written notice of termination within the 120-day period, Tenant's obligation to
pay rent and other charges shall cease, but Landlord shall be entitled to retain
all rent and other charges paid by Tenant to Landlord to that date.

       

      
        	
                3.3

              	
                ESTOPPEL
      AGREEMENTS

              


      

       

      Tenant
agrees that from time to time at reasonable intervals (but not more than three
(3) times in any one (1) lease Year), within fifteen (15) days after written
request by Landlord, Tenant will execute, acknowledge and deliver to Landlord,
or to such other party as may be designated by Landlord in its reasonable
discretion, a certificate stating that to the best of Tenant's knowledge (i)
this Lease is in full force and effect and has not been modified, supplemented
or amended in any way, except as indicated in such certificate; (ii) all
conditions and agreements under this Lease to be performed by Landlord have been
satisfied or performed, except as set forth in said certificate; (iii) there are
no existing defenses or offsets, except as indicated in said certificate; (iv)
Tenant has not paid any rental in advance, except as indicated in said
certificate; (v) Tenant is not in default in the payment of rent or any of the
other obligations required of Tenant under this Lease; (v) Tenant has paid
minimum rentals as of the date set forth in the certificate; and (vii) other
reasonable matters as may be requested by Landlord or its designee. Landlord
agrees that from time to time at reasonable intervals (but not more than three
(3) times in any one (1) lease year), within fifteen (15) days after written
request by Tenant, Landlord will execute, acknowledge and deliver to Tenant, or
to such other party as may be designated by Tenant in its reasonable discretion,
a certificate stating that to the best of Landlord's knowledge (1) this Lease is
in full force and effect and has not been modified, supplemented or amended in
any way, except as indicated in such certificate; (b) all conditions and
agreements under this Lease to be performed by Landlord have been satisfied or
performed, except as set forth certificate; (c) there are no existing defenses
or offsets, except as indicated in said certificate; (d) Tenant has not paid any
rental in advance, except as indicated in said certificate; (e)Tenant is not in
default in the payment of rent or any of the other obligations required of
Tenant under this Lease; (f) Tenant has paid minimum rentals as of the date set
forth in the certificate; and (g) other reasonable matters as may be requested
by Tenant or its designee.
  

      
        
          
             


          

          
            3

            
              

            

          

          
             


          

        

      

       

      ARTICLE
IV

      TENANT
PAYMENTS

       

      
        	
                4.1

              	
                MINIMUM
      RENT

              


      

       

      Tenant
covenants and agrees to pay Landlord as Minimum Rent for the Premises, without
demand, deduction, abatement, or setoff, except as specifically provided herein,
the minimum rental as set forth in Article I above. The minimum rent shall
increase to $15.75 per square foot per year in the eleventh lease year, to
$16.25 per square foot in the sixteenth lease year, to $16.75 per square foot in
the twenty-first lease year and to $17.25 per square foot in the twenty sixth
lease year.

       

      Minimum
Rent shall be payable in advance on the first day of each full calendar month
for which rental is due hereunder. Tenant shall be allowed a ten-day grace
period for the payment of rent after the first day of each month before Tenant
shall be in default for non-payment.

       

      Any
Minimum Rent due for a portion of a month at the beginning or end of the lease
shall be pro-rated based on the number of days in such month.

       

      
        	
                4.2

              	
                TAXES

              


      

       

      Tenant
agrees to pay one-half of all ad valorem real property taxes and assessments of
every kind and nature assessed against the land and building which contains the
Premises within ten (10) days of receipt of an invoice therefor from Landlord,
which invoice shall be accompanied by documentation of Landlord's payment of the
ad valorem property taxes and/or other assessments with respect to the Premises
for which Landlord seeks reimbursement

       

      
        	
                4.3

              	
                FIRE AND CASUALTY INSURANCE
      ON TENANT IMPROVEMENTS

              


      

       

      Tenant
will maintain such fire and casualty insurance coverages on its improvements
made to the Premises as is reasonable for commercial properties of the size,
character and nature of the Premises in an amount equal to the full replacement
cost of such improvements naming Landlord and Tenant as insureds as their
interests may appear. Tenant shall provide evidence of such insurance to
Landlord at the commencement of the lease term and on an annual basis
thereafter. Landlord shall maintain fire and casualty insurance on the building
of which the Premises are a part, in an amount equal to the full replacement
cost thereof and as is reasonable for commercial properties of the size, nature
and character of the building.


      
        
           


        

        
          4

          
            

          

        

        
           


        

      

       

      
        	
                4.4

              	
                UTILITIES

              


      

       

      Tenant
shall immediately reimburse Landlord upon presentation of invoices therefore for
one-half of all charges for any and all services to the Premises during the term
of the lease for water, sewer, garbage collection, ice and snow removal and
exterior landscape services. Tenant shall pay for its own use of all
electricity, which shall be separately metered.

       

      
        	
                4.5

              	
                LATE
      PAYMENTS

              


      

       

      In the
event Tenant shall fail to pay rent or other charges within ten (10) days after
the date when due, then such sums shall bear interest at the highest contract
rate permitted under the laws of the Commonwealth of Pennsylvania in any event
not to exceed twelve (12%) percent per annum, calculated from the date due. Such
interest shall be considered additional rent under the provisions hereof, the
non-payment of which shall be considered a default on the part of Tenant and
shall entitle Landlord to exercise all of its rights and privileges
hereunder.

       

       

      ARTICLE
V

      TENANT'S USE OF PREMISES AND
REGULATIONS RELATED THERETO

       

      
        	
                5.1

              	
                USE CLAUSE -
      REGULATIONS

              


      

       

      Tenant
shall not use the Premises or any part thereof for any purposes other than
banking offices including a drive through, notwithstanding any of the foregoing
to the contrary, Landlord shall not unreasonably withhold or delay its consent
to any request by Tenant to use the Premises for any other purpose, provided
that, such purpose shall not be considered to be a noxious or offensive use and
shall be in compliance with applicable zoning and other laws. In addition to the
foregoing, Tenant shall:

       

      
        	
                 
      

              	
                (a)

              	
                Keep
      the interior and exterior of the Premises and all glass, doors and windows
      of the Premises clean.

              


      

       

      
        	
                 
      

              	
                (b)

              	
                Replace
      promptly at Tenant's expense, with glass of a like kind and quality, any
      plate glass or window glass of the Premises, which may become cracked or
      broken.

              


      

       

      
        	
                 
      

              	
                (c)

              	
                Maintain
      the Premises at Tenant's expense in a clean, orderly and sanitary
      condition free of offensive odors from garbage, spoilage or the like,
      insects, rodents, vermin and other
pests.

              


      


      
        
           


        

        
          5

          
            

          

        

        
           


        

      

       

      
        	
                 
      

              	
                (d)

              	
                Keep
      rubbish, garbage, trash and other refuse in proper containers in the
      interior of the Premises. Tenant shall place its refuse for collection in
      a space designated by Landlord.

              


      

       

      
        	
                 
      

              	
                (e)

              	
                Comply
      with all laws, ordinances and rules and regulations of the United States,
      Commonwealth of Pennsylvania, and County of Northampton or any agencies
      thereof to the extent the same relate to Tenant's use of the Premises, and
      further to comply with all recommendations of any public or private agency
      having authority over insurance rates with respect to Tenant's use of the
      Premises.

              


      

       

       

      
        	
                5.2

              	
                ALTERATIONS TO
      PREMISES BY TENANT

              


      

       

      Tenant
shall not alter the exterior of the Premises and/or signs, and shall not make
any structural alterations, renovations or additions to the Premises or any part
thereof without first obtaining Landlord's written approval of such alterations,
which approval shall not be unreasonably withheld or delayed.

       

      
        	
                5.3

              	
                SIGNS AND
      DISPLAYS

              


      

       

      Tenant
shall have the right, at Tenant's expense, to install signs at the Premises,
provided the design and location must (i) be approved by Landlord, in its
discretion (not to be unreasonably withheld or delayed), and (ii) comply with
all applicable local governmental regulations. Tenant shall have the right to
have its name displayed on any existing exterior signs identifying tenants in
the building.

       

      
        	
                5.4

              	
                LIENS AND
      OTHER

              


      

       

      Any work
performed by Tenant on the Premises shall be performed in good and workmanlike
manner. Prior to the commencement of any such work by any contractor,
subcontractor, laborer or materialman, Tenant shall furnish Landlord with copies
of Stipulations vs. Liens signed by all such persons and provide evidence that
the same have been duly recorded at the Northampton County Prothonotary's
Office.

       

      Should
mechanics', materialmen's or other liens or claims thereof be filed against the
Premises by reason of Tenant's acts or omissions or because of a claim against
Tenant, Tenant shall use best efforts to cause the lien to be canceled and
discharged of record by bond or otherwise within thirty (30) days after receipt
of notice from Landlord. Should Tenant fail to cause such lien to be discharged
or bonded within such time period, Tenant shall be in default hereunder, and
Landlord may exercise any or all remedies available to Landlord pursuant to this
Lease, or in lieu thereof, Landlord may at its option, within the sixty (60)
days next following Tenant's failure and upon prior written notice to Tenant,
discharge the same by paying the amount claimed to be due, and Tenant shall pay
as additional rent on demand the amount so paid and all reasonable costs and
expenses incurred by Landlord including reasonable attorney's fees in processing
such discharge.


      
        
           


        

        
          6

          
            

          

        

        
           


        

      

       

      Tenant
shall secure at its expense any and all building permits and other governmental
approvals necessary in connection with any of Tenant's improvements or
alterations to the Premises.

       

      
        	
                5.5

              	
                INSPECTIONS BY
      LANDLORD

              


      

       

      Tenant
shall permit Landlord, its agents and employees to enter all parts of the
Premises during business hours for the purpose of inspecting the same and
enforcing and carrying out any provision hereof; provided, however, all
inspections by Landlord other than in the case of an emergency, shall only be
made after not less than twenty-four (24) hours written notice to Tenant and
shall not unreasonably interfere with Tenant's operations at the
Premises.

       

       

      ARTICLE
VI

      REPAIRS AND
MAINTENANCE

       

      
        	
                6.1

              	
                MAINTENANCE AND
      REPAIRS

              


      

       

      All
repairs to all electric, plumbing, and other mechanical systems including the
heating, ventilating and air conditioning units and systems serving the Premises
(such units and systems, the "HVAC"), shall be made by Landlord. Tenant shall
maintain and repair as necessary the interior of the Premises, including
interior plumbing and electric fixtures and light bulb replacement. Landlord
shall keep the parking lot, steps and walkways of the building free from ice and
snow and shall maintain the exterior landscaping. Tenant shall not overload the
floor slab, electric wiring, or utilities serving the Premises or located within
the Premises and shall install at Tenant's sole expense, after first obtaining
Landlord's written approval, which shall not be unreasonably withheld or
delayed, any additional electric wiring which may be required by applicable law
in connection with Tenant's apparatus, equipment, or fixtures. Landlord shall be
responsible for the maintenance of the roof, exterior walls and parking
lot.

       

      
        	
                6.2

              	
                SURRENDER OF PREMISES
      IN PROPER REPAIR

              


      

       

      Tenant
shall surrender the Premises at the expiration of the term hereof or at such
other time as Tenant may be required to vacate the Premises pursuant to the
provisions hereof, broom clean, reasonable wear and tear and damage by fire or
other casualty covered by the insurance provisions of this Lease, excepted,
provided that Tenant shall not be required to surrender the installations,
equipment and mechanical systems on or serving the Premises, including, without
limitation, the HVAC, the roof, roof membrane, and roof covering in any
particular repair or condition beyond the repair or condition of the same as of
the date of this Lease. At the expiration or earlier termination of this Lease,
Tenant shall not remove any structural alterations or structural improvements
made to the Premises by Tenant, provided that Tenant shall have the right to
remove, at its election all of its trade fixtures, movable equipment and
furniture, ATM machines, security systems, signs, bank vaults and safety deposit
boxes and Tenant shall be obligated to remove all of the same if requested to do
so by Landlord. Tenant agrees to repair all damage to the Premises as a result
of the removal of any of the foregoing items. Any such items that remain on the
Premises after the expiration of the Lease shall be deemed to have been
abandoned and shall become the property of Landlord.


      
        
           


        

        
          7

          
            

          

        

        
           


        

      

       

      ARTICLE
VII

      COMMON
AREAS

       

      7.1           Tenant,
its customers and employees shall have the right to use, at no additional cost
to Tenant, the 587 square feet common entrance area serving both floors of the
building. Tenant shall have the right, at its expense, to improve the appearance
of this area.

       

       

      ARTICLE
VIII

      INSURANCE -
INDEMNITY

       

      
        	
                8.1

              	
                TENANT LIABILITY
      INSURANCE

              


      

       

      Tenant
shall keep in force at Tenant's expense as long as this Lease remains in effect
and during such other time as Tenant occupies the Premises or any part thereof,
commercial general liability insurance for Tenant, Landlord and Landlord's
mortgagee, if applicable, as their interests may appear covering the Premises,
with companies qualified to do business in the Commonwealth of Pennsylvania in
good standing therein and otherwise satisfactory to Landlord, in its reasonable
discretion, with limits of (i) One Million and No/100 Dollars ($1,000,000.00),
with respect to each occurrence, (ii) One Million and No/100 Dollars
($1,000,000.00) with respect to personal injury or death of a single person, and
(iii) Three Million and No/100 Dollars ($3,000,000.00) general
aggregate.  All insurance maintained by Tenant shall (a) be in form
reasonably acceptable to Landlord, (b) name Landlord and Landlord's mortgagee,
as an additional insured, and (c) contain an endorsement providing that such
insurance may not be terminated or cancelled for any reason until after thirty
(30) days written notice to Landlord, and, if requested by Landlord, to
Landlord's mortgagee. All such insurance shall also contain a provision that no
act or omission of Tenant will affect or limit the obligation of the insurer to
pay on behalf of Landlord the amount of the loss sustained by, or claim made
against, Landlord. Tenant shall in addition keep in force workers' compensation
or similar insurance to the extent required by law. Tenant shall deposit the
policy or policies of such insurance or a certificate of certificates thereof
with Landlord no less than ten (10) days prior to the commencement of the term
hereof. Should Tenant fail to carry or keep in force such insurance, Landlord
may, upon prior written notice to Tenant, cause such insurance to be issued and
in such event Tenant agrees to pay as additional rental hereunder any reasonable
premium for such insurance promptly upon Landlord's written demand
therefor.


      
        
           


        

        
          8

          
            

          

        

        
           


        

      

       

      
        	
                8.2

              	
                TENANT
      INDEMNITY

              


      

       

      Tenant
covenants, at its expense, at all times during the term hereof to defend and
save Landlord, its agents, employees and contractors, harmless and indemnified
from all injury, cost, liability, loss, claims, actions, expenses or damages
(including, without limitation, attorney's fees) to any person or property,
arising from, related to, or in any way connected with the use or occupancy of
the Premises or the conduct or operation of Tenant's business, unless such
injury, loss, claims, or damage are attributable to the gross negligence or
intentional misconduct of Landlord, its agents or employees. Landlord and its
agents and employees shall not be liable for, and Tenant waives all claims for,
loss or damage to Tenant's business or damage to person or property sustained by
Tenant or any other party claiming through Tenant resulting from any accident or
occurrence (unless caused by or resulting from the gross negligence or
intentional misconduct of Landlord) in or upon the Premises. All personal
property belonging to Tenant or any other person in the Premises shall be there
at the sole risk of Tenant or such other person, and neither Landlord, its
agents nor employees shall be liable for any damage to, theft of
misappropriation of such property, unless said employees of Landlord engage in
willful misconduct or gross negligence.

       

      
        	
                8.3

              	
                DELETED

              


      

       

      
        	
                8.4

              	
                DAMAGE OR
      DESTRUCTION

              


      

       

      In the
event the Premises shall be damaged due to fire, the elements, unavoidable
accident or other casualty, Landlord shall provide Tenant with an estimate of
the time period required to repair or restore the Premises and shall then cause
the damage to the Premises (not including Tenant's betterments or improvements)
to be repaired or restored with due diligence to substantially the same
condition as existed immediately prior to such damage, and this Lease shall
continue in full force and effect, subject to any abatement rights of Tenant
provided herein; provided, however, that Landlord shall not be required to
expend in such repair more than the proceeds of insurance recovered or
recoverable with respect to such damage (i.e., the full replacement cost of the
Premises). Tenant shall upon written notice from Landlord promptly restore,
replace or repair Tenant's betterments and improvements to the Premises and
other property items required to be insured by Tenant pursuant to Section 4.3
hereof.

       

      If the
cost of restoring the Premises (not including Tenant's betterments or
improvements) to their condition prior to damage shall exceed the amount
recoverable in any insurance policies carried by Landlord, or if the Premises
are damaged by any casualty not insured against, Landlord, in the event Tenant
elects (in writing) not to make such repairs, shall have the right to terminate
this Lease by giving Tenant written notice of its election to do so within
thirty (30) days after the date on which the damage occurs, whereupon this Lease
shall terminate as of the date on which the damage occurred and all rent payable
hereunder shall be equitably adjusted as of said date. In the event Landlord
fails to give such notice, this Lease shall continue, and Landlord shall cause
the Premises (not including Tenant's betterments and improvements) to be
repaired and restored with due diligence to substantially the same condition as
existed immediately prior to such damage, and Tenant shall promptly restore,
replace or repair Tenant's betterments and improvements to the Premises and
other property items required to be insured by Tenant pursuant to Section 4.3
hereof.


      
        
           


        

        
          9

          
            

          

        

        
           


        

      

       

      If Tenant
is unable to reasonably occupy the premises following a casualty, as long as the
damage to the premises was not caused by the Tenant's gross negligence or
willful misconduct, the Tenant's obligation to pay rent under this Lease shall
abate during the period Tenant is unable to conduct its business on the
Premises.

       

       

      ARTICLE IX

      TRANSFER OF TENANT'S
INTEREST

       

      
        	
                9.1

              	
                ASSIGNMENT AND
      SUBLETTING

              


      

       

      Tenant
shall not sublet the Premises in whole or in part or sell, assign, lien,
encumber, or in any manner transfer this Lease or assign or delegate the
management or permit the use of the Premises or any part thereof by anyone other
than Tenant without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed, provided the Tenant is not in default
under the terms of this Lease Agreement. Landlord and Tenant acknowledge and
agree that the foregoing provisions have been freely negotiated by the parties
hereto and that Landlord would not have entered into this Lease without Tenant's
consent to the terms of this Section 9.1. No assignment, transfer, mortgage,
sublease or other encumbrance by Tenant and no indulgence granted by Landlord to
any assignee or subtenant, shall in any way impair the continuing primary
liability (which after an assignment shall be joint and several with the
assignee) of Tenant hereunder, and no approval in a particular instance shall be
deemed to be a waiver of the obligation to obtain Landlord's approval in any
other case.

       

       

      ARTICLE
X

      DEFAULT BY TENANT AND
REMEDIES OF LANDLORD

       

      
        	
                10.1

              	
                REMEDIES CUMULATIVE -
      EFFECT OF WAIVER

              


      

       

      The
following occurrences are "Events of Default":

       

      
        	
                 
      

              	
                (a)

              	
                Tenant
      defaults in the due and punctual payment of rent, and the default
      continues for ten (10) days after mailing of written notice of the
      default; provided however. Tenant shall be entitled to only three (3)
      notices per calendar year and thereafter Tenant shall be in default for
      failure to pay rent without the necessity of written notice from Landlord;
      without the necessity of written notice from
  Landlord;

              



        
          
             


          

          
            10

            
              

            

          

          
             


          

        

      

       

      
        	
                 
      

              	
                (b)

              	
                Tenant
      vacates or abandons the Premises, provided that Tenant is not obligated to
      continuously operate its business at the Premises so long as Tenant
      continues to pay any and all rent due and payable
    hereunder.

              


      

       

      
        	
                 
      

              	
                (c)

              	
                This
      Lease of the Premises or any part of the Premises are taken upon execution
      or by other process of law directed against Tenant, or are taken upon or
      subjected to any attachment by any creditor of Tenant or claimant against
      Tenant, and the attachment is not discharged within sixty (60) days after
      its levy;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                Tenant
      files a petition in bankruptcy or insolvency or for reorganization or
      arrangement under the bankruptcy laws of the United States or under any
      insolvency act of any state, or is dissolved, or makes an assignment for
      the benefit of creditors;

              


      

       

      
        	
                 
      

              	
                (e)

              	
                Involuntary
      proceedings under any bankruptcy laws or insolvency act or for the
      dissolution of Tenant are instituted against Tenant, or a receiver or
      trustee is appointed for all or substantially all of Tenant's property,
      and the proceeding is not dismissed or the receivership or trusteeship is
      not vacated within sixty (60) days after the institution or
      appointment;

              


      

       

      
        	
                 
      

              	
                (f)

              	
                Tenant
      fails to take possession of the Premises on the Commencement Date of the
      term; and

              


      

       

      
        	
                 
      

              	
                (g)

              	
                Tenant
      breaches any of the other agreements, terms, covenants, or conditions that
      this Lease requires Tenant to perform, and the breach continues for a
      period of thirty (30) days after written notice by Landlord to Tenant, or
      such further period of time in the event it is not feasible for Tenant to
      cure such failure within such thirty-day period, provided that, Tenant
      shall have begun to perform such covenant within such period and to
      diligently pursue the completion of the same within a reasonable time
      thereafter.

              


      

       

      If any
one or more events of default set forth in this paragraph occurs, then Landlord
may, at its election, either:

       

      (a)           Terminate
this Lease by written notice to Tenant, whereupon Tenant's right to possession
of the Premises will cease and the Lease will be terminated. In such case,
Tenant shall be liable to Landlord for damages in an amount equal to the rent
and other sums that would have been owing by Tenant under this Lease for the
balance of the term if this Lease had not been terminated, all of which sums
shall immediately be due and payable by Tenant. In addition, if this Lease is
terminated, Landlord will be entitled to recover from Tenant: (i) all of the
unpaid rent and other unpaid sums to the date of termination; and (ii) any other
reasonable amount necessary to compensate Landlord for any expenses and costs
proximately caused by Tenant's failure to perform its obligations under this
Lease or that in the ordinary course would be likely to result from that
failure. Provided, however, that Landlord agrees to take commercially reasonable
steps to mitigate its damages by reletting the premises and in the event
Landlord is successful in doing so, Tenant shall have a right of offset for such
amounts as may be received by Landlord upon such reletting.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (b)           (1)           Re-enter
and take possession of the Premises, without terminating the Lease, relet the
Premises or any part of the Premises, either alone or in conjunction with other
portions of the building of which the Premises are a part, in Landlord's or
Tenant's name but for the account of Tenant, for such term or terms (which may
be greater or less than the period that would otherwise have constituted the
balance of the term of this Lease) and on such terms and conditions (which may
include concessions of free rent, and the alteration and repair of the Premises)
as Landlord, in its reasonable discretion, may determine. Landlord may collect
and receive the rents for the Premises. Landlord will not be responsible or
liable for any failure to re-let the Premises, or any part of the Premises, or
for any failure to collect any rent due upon reletting, provided that Landlord
shall be obligated to take commercially reasonable steps to mitigate its damages
by reletting the Premises. No re-entry or taking possession of the Premises by
Landlord will be construed as an election on Landlord's part to terminate this
Lease unless a written notice of such intention is given to Tenant. No notice
from Landlord under this Lease or under a forcible entry and detainer statute or
similar law will constitute an election by Landlord to terminate this Lease
unless the notice specifically says so. Landlord reserves the right following
any re-entry or reletting, or both, to exercise its right to terminate this
Lease by giving Tenant written notice, and, in that event, the Lease will
terminate as specified in the notice.

       

      (2)           If
Landlord elects to take possession of the Premises according to this paragraph
(b) without terminating the Lease, Tenant will pay Landlord the rent and other
sums that would have been payable under this Lease if such repossession had not
occurred, less the net proceeds, if any, of any reletting of the Premises after
deducting all of Landlord's reasonable expenses incurred in connection with such
reletting, including without limitation, all reasonable repossession costs,
brokerage commissions, legal expenses, attorneys' fees, expenses of employees,
alteration, remodeling, repair costs, and expenses of preparation for reletting.
Tenant will pay such amounts to Landlord monthly on the days on which the rent
and all other amounts owing under this Lease would have been payable if
possession had not been retaken, and Landlord will be entitled to receive the
rent and other amounts from Tenant on those days.

       

      (c)           Suit
or suits for the recovery of the rents and other amounts and damages set forth
in this paragraph may be brought by Landlord, from time to time, at Landlord's
election, and nothing in this Lease will be deemed to require Landlord to await
the date on which the term of this Lease expires. Each right and remedy in this
Lease will be cumulative and will be in addition to every other right or remedy
in this Lease or existing at law or in equity or by statute or otherwise,
including without limitation, suits for injunctive relief and specific
performance.


      
        
           


        

        
          12

          
            

          

        

        
           


        

      

       

      
        	
                10.2

              	
                NO LANDLORD
      LIEN

              


      

       

      Landlord
hereby waives any and all rights to any Landlord's lien provided by law or to
seize or distrain against the property of Tenant in the absence of a Court Order
of Judgment authorizing Landlord to do so.

       

       

      ARTICLE
XI

      MISCELLANEOUS

       

      
        	
                11.1

              	
                BINDING

              


      

       

      The
covenants, conditions and agreements herein contained shall inure to the benefit
of and be binding upon Landlord, its successors and assigns, and shall be
binding upon Tenant, its successors and assigns of Tenant to whom the assignment
by Tenant has been consented to by Landlord. Nothing contained in this Lease
shall in any manner restrict Landlord's right to assign or encumber this Lease
in its sole discretion, and it is further agreed, anything to the contrary
herein contained notwithstanding, that in the event Landlord sells its interest
in the Premises, Landlord shall be relieved of all further obligations hereunder
(except obligations with respect to damages for which Landlord is liable
hereunder) provided that the successor the Landlord expressly assumes such
obligations.

       

      
        	
                11.2

              	
                SUBORDINATION AND
      NON-DISTURBANCE

              


      

       

      Tenant
agrees that this Lease is subordinate and subject to any bona fide mortgage,
deed of trust, or any other hypothecation for security which has been or which
hereafter may be placed upon the Premises or property of Landlord of which they
are a part. This provision is self-operative and shall not require any further
documentation to evidence or effectuate this subordination. Notwithstanding the
foregoing, however, Tenant agrees to execute any documents which may be required
or requested by Landlord to evidence such subordination. Provided that any such
superior interest holder shall not disturb Tenant's possession of the Premises
and rights under the Lease so long as Tenant is not in default hereunder beyond
any applicable notice or cure period.

       

      
        	
                11.3

              	
                ATTORNMENT

              


      

       

      Should
Landlord assign this Lease or otherwise sell or transfer the Premises, Tenant
shall be bound to said assignee or transferee under all the terms, covenants and
conditions of this Lease for the balance of the term hereof remaining after such
succession, and Tenant shall attorn to such succeeding party as its Landlord
under this Lease promptly upon any such succession. Tenant agrees that should
any party so succeeding to the interest of Landlord require a separate agreement
of "Attornment Agreement", provided the same does not modify any of the
provisions of this Lease, has no adverse effects upon Tenant's continued
occupancy of the Premises, and provides that such assignee will not disturb
Tenant's possession of the Premises and rights under the Lease (so long as
Tenant is not in default beyond any applicable notice or cure
period).


      
        
           


        

        
          13

          
            

          

        

        
           


        

      

       

      
        	
                11.4

              	
                RECORDING

              


      

       

      Tenant
shall not record this Lease without Landlord's prior written consent. Any such
recording at the election of Landlord, shall render this Lease null and
void.

       

      
        	
                11.5

              	
                QUIET
      ENJOYMENT

              


      

       

      Tenant
shall, subject to the provisions this Lease and all matters of record on the
date hereof, peaceably and quietly hold and enjoy the Premises during the term
hereof and any renewal terms without hindrance or interruption by Landlord so
long as Tenant performs and observes all of the terms, covenants, agreements and
conditions to be performed and observed by Tenant hereunder and pays all sums
due from Tenant for rent, additional rent or reimbursement for sums advanced by
Landlord on Tenant's behalf in accordance with the provisions
hereof.

       

      
        	
                11.6

              	
                EMINENT
      DOMAIN

              


      

       

      If the
whole or any part of the Premises shall be taken under the power of eminent
domain, whether by condemnation or friendly acquisition, this Lease shall
terminate as to the part so taken on the date Tenant is required to yield
possession thereof to the condemning or acquiring authority and all rent payable
hereunder shall be equitably adjusted as of such date. If such eminent domain
materially, adversely affects Tenant's ability to conduct a banking business on
the Premises, this Lease shall terminate as of the date Tenant is obligated to
yield possession. Tenant shall have no right to any award or compensation in
connection with any exercise of the power of eminent domain; provided, however,
nothing contained herein shall prevent Tenant from claiming, proving and
receiving awards for its losses, so long as such award does not diminish the
amount of any award to Landlord.

       

      
        	
                11.7

              	
                ENVIRONMENTAL
      MATTERS

              


      

       

      Tenant
shall not cause or permit any of its employees, agents, contractor,
subcontractors or any others occupying or present on the Premises to generate,
manufacture, store, dispose or release on, about or under the Hazardous Material
(as hereinafter defined) to be brought upon, kept, or used in or about the
Premises by Tenant, its agents, employees, contractors or invitees. Tenant shall
not discharge, leak, or emit, or permit to be discharged, leaked, or emitted,
any material into the atmosphere, ground, sewer system, or any body of water, if
that material (as is reasonably determined by the Landlord, or any governmental
authority) does or may pollute or contaminate the same, or may adversely affect
(a) the health, welfare, or safety of persons whether located in the Premises or
elsewhere, or (b) the condition, use or enjoyment of the Premises or any other
real or personal property. As used herein, the term "Hazardous Material" means
(i) any "hazardous waste" as defined by the Resource Conservation and Recovery
act of 1976, as amended from time to time, and the regulations promulgated
thereunder; (ii) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended from
time to time, and regulations promulgated thereunder; (iii) any oil, petroleum
products, and their by-products; (iv) any substance that is or becomes regulated
by any federal, state, or local governmental authority, and (v) include all
hazardous and toxic substances, waste, materials, compounds, pollutants and
contaminants (including without limitation, asbestos, polychlorinated biphenyls
and petroleum products) which are included under or regulated by the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. §9601, et seq., the Resource Conservation and Recover Act, 42
U.S.D. §6901, et seq., the Water Quality Act of 1987, 33 U.S.C. §1251, et seq.,
the Clean Air Act, 42 U.S.C. §7401, et seq., the Hazardous Substances Control
Act of Pennsylvania, and any other federal, state, or local statute, ordinance,
law, code, rule, regulation or order regulating or imposing liability (including
strict liability) or standards of conduct regarding Hazardous Substances
(hereinafter and hereinabove the "Environmental Laws")


      
        
           


        

        
          14

          
            

          

        

        
           


        

      

       

      Tenant
further agrees that it will indemnify Landlord, its successors and assigns, and
hold it harmless from and against any and all liabilities, damages, losses,
costs and expenses, including reasonable attorney's fees incurred by Landlord,
as a result of Hazardous Substances being brought upon, located on or removed
from the Property by Tenant or as a result of violation of any of the
Environmental Laws by Tenant.

       

      Landlord
represents that no portion of the Premises has been used to store, release, use,
bury or deposit hazardous material during Landlord's ownership of the Premises
and that to Landlord's knowledge, there are no underground storage tanks on the
Premises.

       

      
        	
                11.8

              	
                ENTIRE
      AGREEMENT

              


      

       

      This
Lease and any Exhibits attached hereto, set forth the entire agreement between
parties concerning the Premises and no subsequent agreement, amendment, change
or addition to this Lease shall be binding upon either party unless reduced in
writing and signed by each party.

       

      
        	
                11.9

              	
                ADDRESSES -
      NOTICES

              


      

       

      Each
provision of this instrument or of any applicable governmental laws, ordinances,
regulations, or other requirements with reference to the sending, mailing, or
delivery of any notice by Landlord to Tenant or with reference to these sending,
mailing, or delivery of any notice or the Landlord to Tenant or with reference
to these sending, mailing, or delivery of any notice or the making of any
payment by Tenant to Landlord shall be deemed to be complied with when and if
the following steps are taken:


      
        
           


        

        
          15

          
            

          

        

        
           


        

      

       

      (a)           All
rent and other payments required to be made by Tenant to Landlord hereunder
shall be payable to Landlord at the address hereinbelow set forth or at such
other address as Landlord may specify from time to time by written notice
delivered in accordance herewith. Tenant's obligations to pay rent and any other
amounts to Landlord under the terms and of this Lease shall not be deemed
satisfied until such rent and other amounts have been actually received by
Landlord in immediately-available funds.

       

      (b)           Any
notice or document required or permitted to be delivered hereunder shall be
deemed to be delivered whether actually received or not when deposited in the
United States Mail, postage prepaid, Certified or Registered Mail, return
receipt requested, addressed to the parties hereto at the respective addresses
set out below, or at other such addresses as they have heretofore specified by
written notice delivered in accordance therewith.

       

      
        
          
            
              
                	
                        Landlord:

                      	
                        Frank
      Banko

                        950
      N. West End Boulevard

                        Quakertown,
      PA 18951

                      
	 
      	 
      
	 
      	 
      
	With
      a copy in like manner to:	 
	
                        Tenant:

                      	
                        Embassy
      Bank For The Lehigh Valley

                        100
      Gateway Drive, Suite 100

                        Bethlehem,
      PA 18017

                      
	 
      	 
      
	 
      	 
      
	
                        With
      a copy in like manner to:

                      	
                        Jacobs
      & Jacobs

                        214
      Bushkill Street

                        Easton,
      PA 18042

                      


              

            

          

        

      

       

       

      
        	
                11.10

              	
                RELATIONSHIP OF THE
      PARTIES

              


      

       

      This
Lease shall in no way create the relationship of partner or joint venturer
between Landlord and Tenant.

       

      
        	
                11.11

              	
                GOVERNING
      LAW

              


      

       

      The laws
of the Commonwealth of Pennsylvania shall govern the interpretation, the
validity, performance and enforcement of this Lease.


      
        
           


        

        
          16

          
            

          

        

        
           


        

      

       

      
        	
                11.12

              	
                SEVERABILITY

              


      

       

      In the
event any term, covenant or condition of this Lease or the application thereof
to any person or circumstance shall to any extent be invalid or unenforceable,
the remainder of this Lease, or the application of such term, covenant or
condition to persons or circumstances 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 enforceable to the full extent
permitted by law.

       

      
        	
                11.13

              	
                TIME OF
      ESSENCE

              


      

       

      Time is
of the essence in this Lease.

       

       

      ARTICLE
XII

      SECURITY
DEPOSIT

       

      DELETED.

       

       

      ARTICLE
XIII

      ADDITIONAL CONDITIONS AND
TERMS

       

      13.1          All
of Tenant's obligations under this Lease are conditioned upon Tenant obtaining
banking regulatory approvals for the operation of a branch office at the site
and obtaining all required zoning, planning, highway access, building permits
and other necessary governmental approvals for the construction of a bank branch
office, including drive thru, and signage. All of such due diligence and
approvals shall be conducted within 120 days of the signing of this Lease and
shall be diligently conducted and applied for by Tenant. In the event Tenant
notifies Landlord within the 120-day period that any of such contingencies have
not been satisfied, this Lease Agreement shall be null and void and neither
party shall have any rights against the other.

       

      13.2          Notwithstanding
any other provisions contained in this Lease, in the event (a) Tenant 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 at the Leased Premises is closed,
or is taken over by any depository institution supervisory authority
(hereinafter referred to as the "Authority") during the term of this Lease,
Landlord may, in either such event, terminate this Lease only with the
concurrence of any Receiver or Liquidator appointed by such Authority or
pursuant to appropriate order of the Court with jurisdiction over such case or
proceeding, or upon the expiration of the stated term of this Lease, 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 Minimum Rent and Additional Rent
to the date of termination.


      
        
           


        

        
          17

          
            

          

        

        
           


        

      


      13.3          Tenant
shall have the use of not less than six off-street parking spaces in the parking
lot serving the building at no additional cost.

       

       

       IN
WITNESS WHEREOF, the parties hereto have duly executed this instrument in
quadruplicate, individually or through their authorized officers, agents or
attorney-in-fact, as the case may be or required, with the intent to be legally
bound hereby, causing their respective seals to be affixed hereto the day and
year first above written.

       

      
        
          
            
              
                
                  
                    	 
      	 	
                            LANDLORD:

                          
	 
      	 	 
      
	
                            /s/
      Frank Banko

                          	 	
                            By

                          	
                            /s/
      Frank Banko

                          
	 
      	 	 
      	
                            Frank
      Banko

                          
	 
      	 	 
      	 
      
	 
      	 	 
      	 
      
	
                            Attest:

                          	 	
                            TENANT:

                          
	 
      	 	
                            EMBASSY
      BANK FOR THE LEHIGH VALLEY

                          
	 
      	 	 
      	 
      
	 
      	 	
                            By

                          	
                            /s/
      David M. Lobach Jr.

                          
	
                            /s/
      Judith A. Hunsicker

                          	 	 
      	
                            Name:
      David M. Lobach Jr.

                          
	
                            Secretary

                          	 	 
      	
                            Title:
      CEO

                          


                  

                

              

            

          

        

      

       

       

      18