Document:

Exhibit 10.10

 

Mudrick Capital Acquisition Corporation

527 Madison Avenue, 6th Floor

New York, NY 10022

 

January 24, 2018

 

Mudrick Capital Acquisition Holdings LLC

527 Madison Avenue, 6th Floor

New York, NY 10022

 

		Re:	Forward Purchase Contract

 

Ladies and Gentlemen:

 

We are pleased to accept
the offer Mudrick Capital Acquisition Holdings LLC (the “Subscriber” or “you”) has made to
purchase an aggregate of (i) 2,500,000 units (the “Units”) of Mudrick Capital Acquisition Corporation, a Delaware
corporation (the “Company”), each Unit comprising one share of Class A common stock of the Company, par value
$0.0001 per share (“Class A Common Stock” or “Share”) and one warrant exercisable to purchase
one Share (“Warrant”) and (ii) 625,000 Shares (the “Forward Purchase Shares”), for an aggregate
purchase price of $25,000,000. The Units, the securities underlying the Units and the Forward Purchase Shares, collectively, are
hereinafter referred to as the “Securities”. Each Warrant is exercisable to purchase one Share at an exercise
price of $11.50 per Share during the period commencing on the later of (i) twelve (12) months from the date of the closing of the
Company’s initial public offering of units, each comprising one share of Class A Common Stock and one Warrant (the “IPO”),
such IPO expected as of the date hereof to generate gross proceeds to the Company in the amount of $200,000,000 (exclusive of the
over-allotment option to be granted to the underwriters) and (ii) thirty (30) days following the consummation of the Company’s
initial business combination (the “Business Combination”) and expiring on the fifth anniversary of the consummation
of the Business Combination. No fractional shares of Class A Common Stock will be issued upon exercise of the Warrants. The terms
(this “Agreement”) on which the Company is willing to sell the Securities to the Subscriber, and the Company
and the Subscriber’s agreements regarding such Securities, are as follows:

 

1. Purchase of the Securities.
For the sum of $25,000,000 (the “Purchase Price”), the Company agrees to sell the Securities to the Subscriber,
and the Subscriber hereby agrees to purchase the Securities from the Company, subject to the terms and subject to the conditions
set forth in this Agreement.

 

2. Representations,
Warranties and Agreements.

  

2.1 Subscriber’s
Representations, Warranties and Agreements. To induce the Company to issue the Securities to the Subscriber, the Subscriber
hereby represents and warrants to the Company and agrees with the Company as follows:

 

2.1.1 No Government
Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon or made any recommendation
or endorsement of the offering of the Securities.

  

2.1.2 No Conflicts.
The execution, delivery and performance of this Agreement and the consummation by the Subscriber of the transactions contemplated
hereby do not violate, conflict with or constitute a default under (i) the formation and governing documents of the Subscriber,
(ii) any agreement, indenture or instrument to which the Subscriber is a party, (iii) any law, statute, rule or regulation to which
the Subscriber is subject, or (iv) any agreement, order, judgment or decree to which the Subscriber is subject.

 

2.1.3 Organization and
Authority. The Subscriber is a Delaware limited liability company, validly existing and in good standing under the laws of
Delaware and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement.
Upon execution and delivery by you, this Agreement is a legal, valid and binding agreement of Subscriber, enforceable against Subscriber
in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting the enforcement of

 

     

     

    

 

creditors’ rights
generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).

  

2.1.4 Experience, Financial
Capability and Suitability. Subscriber is: (i) sophisticated in financial matters and is able to evaluate the risks and benefits
of the investment in the Securities and (ii) able to bear the economic risk of its investment in the Securities for an indefinite
period of time because the Securities have not been registered under the Securities Act (as defined below) and therefore cannot
be sold unless subsequently registered under the Securities Act or an exemption from such registration is available. Subscriber
is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests.
Subscriber must bear the economic risk of this investment until the Securities are sold pursuant to: (i) an effective registration
statement under the Securities Act or (ii) an exemption from registration available with respect to such sale. Subscriber is able
to bear the economic risks of an investment in the Securities and to afford a complete loss of Subscriber’s investment in
the Securities.

 

2.1.5 Access to Information;
Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had the opportunity to ask questions
of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations,
business and prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all information
so obtained. In determining whether to make this investment, Subscriber has relied solely on Subscriber’s own knowledge and
understanding of the Company and its business based upon Subscriber’s own due diligence investigation and the information
furnished pursuant to this paragraph. Subscriber understands that no person has been authorized to give any information or to make
any representations which were not furnished pursuant to this Section 2 and Subscriber has not relied on any other representations
or information in making its investment decision, whether written or oral, relating to the Company, its operations and/or its prospects.

 

2.1.6 Regulation D Offering.
Subscriber represents that it is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under
the Securities Act of 1933, as amended (the “Securities Act”) and acknowledges the sale contemplated hereby
is being made in reliance on a private placement exemption to “accredited investors” within the meaning of Section
501(a) of Regulation D under the Securities Act or similar exemptions under federal or state law.

 

2.1.7 Investment Purposes.
The Subscriber is purchasing the Securities solely for investment purposes, for the Subscriber’s own account and not for
the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof. The Subscriber
did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning of
Rule 502 under the Securities Act.

 

2.1.8 Restrictions on
Transfer; Shell Company. Subscriber understands the Securities are being offered in a transaction not involving a public offering
within the meaning of the Securities Act. Subscriber understands the Securities will be “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act and Subscriber understands that any certificates representing the Securities
will contain a legend in respect of such restrictions. If in the future the Subscriber decides to offer, resell, pledge or otherwise
transfer the Securities, such Securities may be offered, resold, pledged or otherwise transferred only pursuant to: (i) registration
under the Securities Act, or (ii) an available exemption from registration. Subscriber agrees that if any transfer of its Securities
or any interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to deliver
to the Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber agrees not
to resell the Securities. Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be available
to the Subscriber for the resale of the Securities until one (1) year following consummation of the Business Combination, despite
technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.

 

2.1.9 No Governmental
Consents. No governmental, administrative or other third party consents or approvals are required, necessary or appropriate
on the part of Subscriber in connection with the transactions contemplated by this Agreement.

 

2.2 Company’s Representations,
Warranties and Agreements. To induce the Subscriber to purchase the Securities, the Company hereby represents and warrants
to the Subscriber and agrees with the Subscriber as follows:

 

2.2.1 Organization and
Corporate Power. The Company is a Delaware corporation and is qualified to do business in every jurisdiction in which the failure
to so qualify would reasonably be expected to have a material adverse effect on the financial condition, operating results or assets
of the Company. The Company possesses all requisite corporate power and authority necessary to carry out the transactions contemplated
by this Agreement.

 

     

     

    

 

2.2.2 No Conflicts.
The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated
hereby do not violate, conflict with or constitute a default under (i) the Certificate of Incorporation or Bylaws of the Company,
(ii) any agreement, indenture or instrument to which the Company is a party or (iii) any law, statute, rule or regulation to which
the Company is subject, or (iv) any agreement, order, judgment or decree to which the Company is subject.

 

2.2.3 Title to Securities.
Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Securities will be duly and validly issued, fully
paid and non-assessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof the Subscriber will have or
receive good title to the Securities, free and clear of all liens, claims and encumbrances of any kind, other than (a) transfer
restrictions under federal and state securities laws, and (b) liens, claims or encumbrances imposed due to the actions of the Subscriber.
The Company will reserve sufficient Shares to permit full exercise of the Warrants.

 

2.2.4 No Adverse Actions.
There are no actions, suits, investigations or proceedings pending, threatened against or affecting the Company which: (i) seek
to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement or (ii) question
the validity or legality of any transactions or seeks to recover damages or to obtain other relief in connection with any transactions.

 

2.2.5 Authorization.
All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, the Securities, the performance of all obligations of the Company required pursuant thereto, and
the authorization, issuance (or reservation for issuance) of the Securities, has been taken. This Agreement constitutes and, when
issued, the Units and Warrants will constitute valid and legally binding obligations of the Company, enforceable in accordance
with their respective terms, subject to: (i) judicial principles limiting the availability of specific performance, injunctive
relief, and other equitable remedies and (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect generally relating to or affecting creditors’ rights.

 

2.2.6 Capitalization.
The authorized capital stock of the Company on the date hereof, consists of 100,000,000 shares of Class A Common Stock, no shares
of which are issued and outstanding, 10,000,000 shares of Class B common stock, par value $0.0001 per share (“Class B
Common Stock” and, collectively with the Class A Common Stock, the “Common Stock”), 5,750,000 shares
of which are issued and outstanding (including up to 750,000 shares subject to forfeiture in the event that the underwriters’
over-allotment option is not exercised in full), and 1,000,000 shares of preferred stock, no shares of which are issued and outstanding.
All issued and outstanding shares of the Class B Common Stock (a) have been duly authorized and validly issued, and (b) are fully
paid and non-assessable. The rights, preferences, privileges and restrictions of the Common Stock are as stated in the Certificate
of Incorporation currently on file with the Delaware Secretary of State. There are no outstanding rights, options, warrants, preemptive
rights, rights of first refusal or similar rights for the purchase or acquisition from the Company of any securities of the Company.

 

2.2.7 No Governmental
Consents. No governmental, administrative or other third party consents or approvals are required, necessary or appropriate
on the part of the Company in connection with the transactions contemplated by this Agreement, other than the filing of a Form D
with the Securities and Exchange Commission and such state Blue Sky, FINRA and NASDAQ consents and approvals as may be required.

 

3. Settlement Date
and Delivery.

 

3.1 Closing. The settlement
of the forward purchase contract for the purchase and sale of the Securities hereunder (the “Closing”) shall
be held at the same date and time as the closing of the Business Combination (the date of the Closing being referred to as the
“Closing Date”). At the Closing, the Company will issue to the Subscriber the Units and the Forward Purchase
Shares, each registered in the name of the Subscriber, against delivery of the Purchase Price in cash via wire transfer to an account
specified in writing by the Company no later than five (5) business days prior to the Closing.

 

3.2 Conditions to Closing
of the Company.

 

The Company’s obligations to sell and
issue the Securities at the Closing are subject to the fulfillment of the following conditions:

 

3.2.1 Representations.
The representations made by the Subscriber in Section 2 of this Agreement shall be true and correct in all material respects when
made, and shall be true and correct in all material respects on the applicable Closing Date.

 

     

     

    

 

3.2.2 Blue Sky.
The Company shall have obtained all necessary Blue Sky law permits and qualifications, or secured an exemption therefrom, required
by any state for the offer and sale of the Securities.

 

3.3 Conditions to Closing
of the Subscriber.

 

The Subscriber’s obligation to purchase
the Securities at the Closing is subject to the fulfillment on or prior to the Closing Date of each of the following conditions:

 

3.3.1 Representations
and Warranties Correct. The representations and warranties made by the Company in Section 2 hereof shall be true and correct
in all material respects when made and shall be true and correct in all material respects on and as of the Closing Date (unless
they specifically speak as of another date in which case they shall be true and correct in all material respects as of such date)
with the same force and effect as if they had been made on and as of said date.

 

3.3.2 Covenants.
All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the Closing
Date shall have been performed or complied with in all material respects.

 

3.3.3 Blue Sky.
The Company shall have obtained all necessary Blue Sky law permits and qualifications, or secured an exemption therefrom, required
by any state for the offer and sale of the Securities.

 

3.3.5 Registration Rights
Agreement. The Company and Subscriber shall have entered into a registration rights agreement (the “Registration Rights
Agreement”), as referenced in Section 5.5, in a form customary for transactions of the type contemplated hereby.

 

3.3.6 IPO Closing.
The Company shall have consummated an IPO raising at least $200,000,000 in gross proceeds.

 

3.3.7 Business Combination.
The conditions to the closing of the Business Combination, including the approval of the Company’s stockholders, if applicable,
shall have been satisfied or met.

 

4. Terms of the
Units and Warrants.

 

4.1 The Warrants will be
substantially identical to the warrants to be included in the units offered in the IPO as set forth in the Warrant Agreement to
be entered into with Continental Stock Transfer and Trust Company at or prior to the IPO (the “Warrant Agreement”),
except that the Warrants: (i) will be non-redeemable so long as they are held by the initial holder thereof (or any of its permitted
transferees), and (ii) are exercisable on a “cashless” basis if held by Subscriber or its permitted transferees.

 

4.2 The Units and their component
parts will be substantially identical to the units to be offered in the IPO except that the Units and component parts are being
offered and sold pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable
only after they are registered in accordance with the Registration Rights Agreement to be signed on or before the date of the Company’s
registration statement to be filed in connection with the IPO, as amended at the time it becomes effective (the “Registration
Statement”).

 

5. Restrictions
on Transfer.

 

5.1 Securities Law Restrictions.
Subscriber hereby agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Securities unless,
prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws
with respect to the Securities proposed to be transferred shall then be effective or (b) the Company has received an opinion of
counsel for the Company that such registration is not required because such transaction is exempt from registration under the Securities
Act and the rules promulgated by the Securities and Exchange Commission thereunder and under all applicable state securities laws.

 

5.2 Lock up. Subscriber
hereby agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Forward Purchase Shares
until the earlier to occur of (the “Lock up”): (a) one year after the completion of the Business Combination
or (b) the date following the completion of the Business Combination on which the Company completes a liquidation, merger, stock
exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their
shares of Class A Common Stock for cash, securities or other property. Notwithstanding the foregoing,

 

     

     

    

 

if the last sale price of
the Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Business Combination,
the Forward Purchase Shares will be released from the Lock up.

 

5.3 Restrictive Legends.
All certificates representing the Securities shall have endorsed thereon legends substantially as follows:

 

“THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL
FOR THE COMPANY, IS AVAILABLE.”

 

All certificates representing the Forward Purchase Shares shall
have endorsed thereon legends substantially as follows:

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE
TERM OF THE LOCKUP EXCEPT PURSUANT TO ITS TERMS.”

 

5.4 Additional Units or
Substituted Securities. In the event of the declaration of a share dividend, the declaration of an extraordinary dividend payable
in a form other than Common Stock, a spin-off, a share split, an adjustment in conversion ratio, a recapitalization or a similar
transaction affecting the Company’s outstanding Common Stock without receipt of consideration (other than those occurring
at the time of the IPO in connection with a change in the size of the offering), any new, substituted or additional securities
or other property which are by reason of such transaction distributed with respect to any Securities subject to this Section 5.4
or into which such Securities thereby become convertible shall immediately be subject to this Section 5.4 and Section 3. Appropriate
adjustments to reflect the distribution of such securities or property shall be made to the number and/or class of Securities subject
to this Section 5.4 and Section 3. The Securities shall not be subject to forfeiture upon failure of the underwriters to exercise
their over-allotment option in the IPO.

 

5.5 Registration Rights.
Subscriber acknowledges that the Securities are being purchased pursuant to an exemption from the registration requirements of
the Securities Act and will become freely tradable only after certain conditions are met or they are registered pursuant to the
Registration Rights Agreement.

 

6. Other Agreements.

 

6.1 Further Assurances.
Each of the Company and Subscriber agrees to execute such further instruments and to take such further action as may reasonably
be necessary to carry out the intent of this Agreement.

 

6.2 Notices. All notices,
statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally
or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address
designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number
as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently provided
to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication
so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following
receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight
courier service or five (5) days after mailing if sent by mail.

 

6.3 Entire Agreement.
This Agreement, together with that certain Insider Letter to be entered into between Subscriber and the Company, substantially
in the form to be filed as an exhibit to the Registration Statement, embodies the entire agreement and understanding between the
Subscriber and the Company with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly
set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this
Agreement.

 

6.4 Modifications and
Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by all
parties hereto.

 

     

     

    

 

6.5 Waivers and Consents.
The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document
executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or
shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each
such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not
constitute a continuing waiver or consent.

 

6.6 Assignment. The
rights and obligations under this Agreement may not be assigned by either party hereto without the prior written consent of the
other party, except to an affiliate of the Subscriber.

 

6.7 Benefit. All statements,
representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure
to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement shall be construed
to create any rights or obligations except among the parties hereto, and no person or entity shall be regarded as a third-party
beneficiary of this Agreement.

 

6.8 Governing Law.
This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the
laws of New York applicable to contracts wholly performed within the borders of such state, without giving effect to the conflict
of law principles thereof.

 

6.9 Severability.
In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in
this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent
that such court deems it reasonable and enforceable, and as so limited shall remain in full force and effect. In the event that
such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement
shall nevertheless remain in full force and effect.

 

6.10 No Waiver of Rights,
Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and
no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party. No
single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance
of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the
exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto shall not constitute a waiver
of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this
Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in
any circumstances without such notice or demand.

 

6.11 Survival of Representations
and Warranties. All representations and warranties made by the parties hereto in this Agreement or in any other agreement,
certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof and any investigations
made by or on behalf of the parties.

 

6.12 No Broker or Finder.
Each of the parties hereto represents and warrants to the other that no broker, finder or other financial consultant has acted
on its behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to create any liability
on the other. Each of the parties hereto agrees to indemnify and save the other harmless from any claim or demand for commission
or other compensation by any broker, finder, financial consultant or similar agent claiming to have been employed by or on behalf
of such party and to bear the cost of legal expenses incurred in defending against any such claim.

 

6.13 Headings and Captions.
The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way
modify or affect the meaning or construction of any of the terms or provisions hereof.

 

6.14 Counterparts.
This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

6.15 Construction.
The words “include,” “includes,” and “including” will be deemed to be
followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include
any other gender, and

 

     

     

    

 

words in the singular form
will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,”
“herein,” “hereof,” “hereby,” “hereunder,” and words
of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties
hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party
hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which
such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first
representation, warranty, or covenant.

 

6.16 Mutual Drafting.
This Agreement is the joint product of the Subscriber and the Company and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.

 

7. Tender or Redemption
of Shares. The Subscriber agrees not to tender any Shares in connection with a tender or redemption offer presented to the
Company’s stockholders in connection with the Business Combination.

 

8. Indemnification.
Each party shall indemnify the other against any loss, cost or damages (including reasonable attorney’s fees and expenses)
incurred as a result of such party’s breach of any representation, warranty, covenant or agreement in this Agreement.

 

9. Term. The Subscriber’s
obligation to acquire the Securities hereunder, and the Company’s obligation to sell the Securities hereunder, shall be in
effect until the earlier of (i) the consummation of the Business Combination within the time frame permitted by the Company’s
amended and restated certificate of incorporation (the “Charter”), which, as of the date hereof, is expected
to be 24 months from the consummation of the IPO, including any extensions beyond such term effected pursuant to the terms of the
Charter, and (ii) the liquidation of the Company in the event that the Company is unable to consummate the Business Combination
within the time frame permitted by the Charter (including any extensions).

 

10. Disclosure.
The Subscriber hereby acknowledges that (i) the terms of this Agreement will be disclosed in the Registration Statement, (ii) this
Agreement will be filed with the Securities and Exchange Commission as an exhibit to the Registration Statement and (iii) the Company
will disclose the terms of this Agreement to potential IPO investors and to potential Business Combination targets.

 

11. Waiver of Claims
Against Trust. The Subscriber hereby acknowledges that it is aware that the Company will establish a trust account (the “Trust
Account”) for the benefit of its public stockholders upon the closing of the IPO. The Subscriber, for itself and its
affiliates, hereby agrees that it has no right, title, interest or claim of any kind in or to any monies held in the Trust Account,
or any other asset of the Company as a result of any liquidation of the Company, except for redemption and liquidation rights,
if any, the Subscriber may have in respect of any Shares issued as part of the units sold in the IPO (“Public Shares”)
held by the Subscriber. The Subscriber hereby agrees that it shall have no right of set-off or any right, title, interest or claim
of any kind (“Claim”) to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to,
or to any monies in, the Trust Account that it may have now or in the future, except for redemption and liquidation rights, if
any, the Subscriber may have in respect of any Public Shares held by the Subscriber. In the event the Subscriber has any Claim
against the Company under this Agreement, the Subscriber shall pursue such Claim solely against the Company and its assets outside
the Trust Account and not against the property or any monies in the Trust Account, except for redemption and liquidation rights,
if any, the Subscriber may have in respect of any Public Shares held by the Subscriber.

 

[Signature Page Follows]

 

     

     

    

 

If the foregoing accurately sets forth our understanding
and agreement, please sign the enclosed copy of this Agreement and return it to us.

 

	 	Very truly yours,
	 	 	 
	 	MUDRICK CAPITAL ACQUISITION CORPORATION
	 	 	 
	 	By: 	/s/ Jason Mudrick
	 	Name:  	Jason Mudrick
	 	Title:  	Chief Executive Officer

 

	Accepted and agreed this 24th day of January, 2018.
	 
	Mudrick Capital Acquisition Holdings LLC
	 
	By: MUDRICK CAPITAL MANAGEMENT, L.P.,
	its managing member
	 
	By: MUDRICK CAPITAL MANAGEMENT, LLC,
	its general partner

 

	By:	/s/ Jason Mudrick	 
	Name:	Jason Mudrick	 
	Title:	Sole MemberEMPLOYMENT AGREEMENT

This Employment Agreement (this "Agreement") is made effective as of January 25, 2018 (the "Effective Date"), by and between Standard AVB Financial Corp., a Maryland corporation (the "Company"), Standard Bank, PaSB, a Pennsylvania state-chartered savings bank (the "Bank") and Timothy K. Zimmerman (the "Executive").  The Company, Bank and Executive are sometimes collectively referred to herein as the "parties."

WITNESSETH

WHEREAS, Executive is currently employed as Chief Executive Officer of the Company and Bank (collectively, the Company and Bank shall be referred to in this Agreement as the "Employer");

WHEREAS, the Employer desires to assure itself of the continued availability of the Executive's services as provided in this Agreement; and

 WHEREAS, the Executive is willing to serve the Employer on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the terms and conditions hereinafter provided, the parties hereby agree as follows:

1.    POSITION AND RESPONSIBILITIES.

Executive shall serve as Chief Executive Officer of the Employer until June 30, 2020 and thereafter the Executive's title shall be as mutually agreed to by the parties.  During the term of this Agreement, Executive shall continue to render such administrative and management services to the Employer as are currently rendered and as are customarily performed by persons situated in a similar executive capacity. Executive's other duties shall be such as the Board of Directors of the Employer (collectively, and as applicable, the "Board of Directors" or "Board") may from time to time reasonably direct.  During the term of this Agreement, Executive also agrees to continue to serve, if elected, as a Director of the Bank and an officer and/or director of any subsidiary or affiliate of the Bank and to carry out the duties and responsibilities reasonably appropriate to those offices.

2.    TERM AND DUTIES.

(a) Three Year Contract.  The term of this Agreement shall commence as of the Effective Date and shall continue for a period of thirty-six (36) full calendar months. The term of this Agreement shall be extended for one day each day so that a constant thirty-six (36) calendar month term shall remain in effect, until such time as the Board or Executive elects not to extend the term of the Agreement by giving written notice to the other party in accordance with the terms of this Agreement, in which case the term of this Agreement shall be fixed and shall end on the third anniversary of the date of such written notice.

 

(b) Termination of Agreement.  Notwithstanding anything contained in this Agreement to the contrary, either Executive or the Employer may terminate Executive's employment with the Employer at any time during the term of this Agreement, subject to the terms and conditions of this Agreement.

(c) Continued Employment Following Expiration of Term.  Nothing in this Agreement shall mandate or prohibit a continuation of Executive's employment following the expiration of the term of this Agreement, upon such terms and conditions as the Employer and Executive may mutually agree.

(d) Duties; Membership on Other Boards.  During the term of this Agreement, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of absence approved by the Board, Executive shall devote substantially all of his business time, attention, skill, and efforts to the faithful performance of his duties hereunder, including activities and services related to the organization, operation and management of the Employer; provided, however, that, Executive may serve, or continue to serve, on the boards of directors of, and hold any other offices or positions in, business companies or business or civic organizations, which, in the Board's judgment, will not present any conflict of interest with the Employer, or materially affect the performance of Executive's duties pursuant to this Agreement.  Executive shall provide the Board of Directors annually for its approval a list of organizations for which the Executive acts as a director or officer.

3.    COMPENSATION, BENEFITS AND REIMBURSEMENT.

(a) Base Salary.  In consideration of Executive's performance of the duties set forth in Section 2, the Employer shall provide Executive the compensation specified in this Agreement.  The Employer shall pay Executive a salary of $350,000 per year ("Base Salary").  The Base Salary shall be payable biweekly, or with such other frequency as officers of the Employer are generally paid. During the term of this Agreement, the Base Salary shall be reviewed at least annually by the Board or by a committee designated by the Board, and the Employer may increase, but not decrease (except for a decrease that is generally applicable to all employees) Executive's Base Salary. Any increase in Base Salary shall become "Base Salary" for purposes of this Agreement.

(b) Bonus and Incentive Compensation.  Executive shall be entitled to equitable participation in incentive compensation and bonuses in any plan or arrangement of the Employer in which Executive is eligible to participate.  Nothing paid to Executive under any such plan or arrangement will be deemed to be in lieu of other compensation to which Executive is entitled under this Agreement.  Employer will use its best efforts to develop, as soon as practicable, a management incentive plan, either as part of an existing incentive plan or through a new incentive plan, pursuant to which Employer will agree to provide Executive with an annual cash incentive opportunity that is competitive with the Employer's market place and peer group as designed and approved by the Compensation Committee and Board.

(c) Employee Benefits.  The Employer shall provide Executive with employee benefit plans, arrangements and perquisites substantially equivalent to those in which Executive was participating or from which he was deriving benefit immediately prior to the commencement

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 of the term of this Agreement, and the Employer shall not, without Executive's prior written consent, make any changes in such plans, arrangements or perquisites that would adversely affect Executive's rights or benefits thereunder, except as to any changes that are applicable to all participating employees. In addition to the Base Salary provided in Section 3(a), the Employer shall provide the Executive with an automobile (whether Employer-owned or leased) suitable to the position of Chief Executive Officer of the Employer, which automobile shall be for Executive's business and personal use, and the Employer will pay the cost of such automobile, including insurance, repairs and fuel.  In addition, and subject to the prior approval of the Compensation Committee of the Employer, the Employer shall reimburse or pay Executive amounts sufficient to establish or maintain membership in any club or organization (business, social or otherwise) which will benefit the Employer (including such fees or dues relating to the use of the club or organization).  Without limiting the generality of the foregoing provisions of this Section 3(c), Executive will be entitled to participate in and receive benefits under any employee benefit plans including, but not limited to, retirement plans, supplemental retirement plans, pension plans, profit-sharing plans, health-and-accident insurance plans, medical coverage or any other employee benefit plan or arrangement made available by the Employer in the future to its senior executives, including any stock benefit plans, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements.

(d) Paid Time Off.  Executive shall be entitled to paid vacation time each year during the term of this Agreement (measured on a fiscal or calendar year basis, in accordance with the Employer's usual practices), as well as sick leave, holidays and other paid absences in accordance with the Employer's policies and procedures for senior executives.  Any unused paid time off during an annual period shall be treated in accordance with the Employer's personnel policies as in effect from time to time.

(e) Expense Reimbursements.  The Employer shall also pay or reimburse Executive for all reasonable travel, entertainment and other reasonable expenses incurred by Executive during the course of performing his obligations under this Agreement, including, without limitation, fees for memberships in such clubs and organizations as Executive and the Board shall mutually agree are necessary and appropriate in connection with the performance of his duties under this Agreement, upon presentation to the Employer of an itemized account of such expenses in such form as the Employer may reasonably require, provided that such payment or reimbursement shall be made as soon as practicable but in no event later than March 15 of the year following the  year in which such right to such payment or reimbursement occurred.

4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

(a) Upon the occurrence of an Event of Termination (as herein defined) during the term of this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs within eighteen (18) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used in this Agreement, an "Event of Termination'' shall mean and include any one or more of the following:

 

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(i)

	
the involuntary termination of Executive's employment hereunder by the Employer for any reason other than termination governed by Section 5 (in connection with or following a Change in Control), Section 6 (due to Disability or death), Section 7 (due to Retirement), or  Section 8 (for Cause), provided that such termination constitutes a "Separation from Service" within the meaning of Section 409A of the Internal Revenue Code ("Code"); or

	
(ii)

	
Executive's resignation from the Employer's employ upon any of the following, unless consented to by Executive:

(A) failure to appoint Executive to the position set forth in Section 1, or a material change in Executive's function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Employer);

(B) a relocation of Executive's principal place of employment to a location that is more than 25 miles from the location of the Employer's principal executive offices as of the date of this Agreement;

(C) a material reduction in Base Salary (except for any reduction that is part of a reduction in pay that is generally applicable to officers or employees of the Employer);

(D) a liquidation or dissolution of the Employer; or

(E) a material breach of this Agreement by the Employer.

Upon the occurrence of any event described in clause (ii) above, Executive shall have the right to elect to terminate his employment under this Agreement by resignation for "Good Reason" upon not less than thirty (30) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days) after the event giving rise to the right to elect, which termination by Executive shall be an Event of Termination.  The Employer shall have thirty (30) days to cure the condition giving rise to the Event of Termination, provided that the Employer may elect to waive said thirty (30) day period.

(b) Upon the occurrence of an Event of Termination, the Employer shall pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum cash payment equal to two times the sum of (i) Executive's highest annual rate of Base Salary paid to Executive at any time under this Agreement, plus (ii) the average of the bonuses earned in the two fiscal years immediately preceding the year in which the Event of Termination occurs (including any bonus(es) paid by Allegheny Valley Bank).  Such payments shall be paid in a lump sum on the 30th day following the Executive's Separation from Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains 

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other employment following the Event of Termination.  Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release of his claims against the Employer, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement (the "Release"), and (ii) the payments and benefits shall begin on the 30th day following the date of the Executive's Separation from Service, provided that before that date, the Executive has signed (and not revoked) the Release and the Release is irrevocable under the time period set forth under applicable law.

(c) Upon the occurrence of an Event of Termination, the Employer shall provide, at the Employer's expense, nontaxable medical (including any employer contributions to a health savings account), health, vision and dental coverage substantially comparable, as reasonably available, to the coverage maintained by the Employer for Executive prior to the Event of Termination, except to the extent such coverage may be changed in its application to all Employer's employees for: (i) the remaining term of the Agreement but not to exceed eighteen (18) months, and (ii) if the remaining term of the Agreement is more than eighteen (18) months, the Employer shall, in addition to providing continued insurance coverage for eighteen(18) months, make a cash payment to the Executive in an amount equal to the product of (x) the monthly premium (including any employer contributions to a health savings account) in effect as of the date of the Event of Termination for the level of coverage in effect for Executive under the Employer's group health plans, times (y) the number of months in the remaining term of the Agreement that exceed eighteen (18), with such payment made at the same time cash severance is paid under Section 4(b).  Notwithstanding the foregoing, if applicable law (including, but not limited to, laws prohibiting discriminating in favor of highly compensated employees), or, if participation by the Executive is not permitted under the terms of the applicable health plans, or if providing such benefits would subject the Employer to penalties, then the Employer shall pay the Executive a cash lump sum payment reasonably estimated to be equal to the premiums for such nontaxable medical, health, vision and dental coverage, with such payment to be made by lump sum within thirty (30) business days of the Date of Termination, or if later, the date on which the Employer determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the foregoing reasons.

(d) For purposes of this Agreement, a "Separation from Service" shall have occurred if the Employer and Executive reasonably anticipate that either no further services will be performed by the Executive after the date of the Event of Termination (whether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination.  For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii).  If Executive is a Specified Employee, as defined in Code Section 409A and any payment to be made under sub-paragraph (b) or (c) of Section 4 or sub-paragraph (c) or (d) of Section 5 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be delayed and shall be paid on the first day of the seventh month following Executive's Separation from Service.

 

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5. CHANGE IN CONTROL.

(a) Any payments made to Executive pursuant to this Section 5 are in lieu of any payments that may otherwise be owed to Executive pursuant to this Agreement under Section 4, such that Executive shall either receive payments pursuant to Section 4 or pursuant to Section 5, but not pursuant to both Sections.

(b) For purposes of this Agreement, the term "Change in Control" shall mean:

		(1)	
Merger:  The Company or the Bank merges into or consolidates with another entity, or merges another Bank or corporation into the Bank or the Company, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or consolidation;

		(2)	
Acquisition of Significant Share Ownership:  A person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the Company's or the Bank's voting securities; provided, however, this clause (2) shall not apply to beneficial ownership of the Company's or the Bank's voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities;

		(3)	
Change in Board Composition:  During any period of two consecutive years, individuals who constitute the Company's or the Bank's Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority of the Company's or the Bank's Board of Directors; provided, however, that for purposes of this clause (c), each director who is first elected by the board (or first nominated by the board for election by the stockholders or corporators) by a vote of at least two-thirds (2/3) of the directors who were directors at the beginning of the two-year period shall be deemed to have also been a director at the beginning of such period; or

		(4)	
Sale of Assets:  The Company or the Bank sells to a third party all or substantially all of its assets.

(c) Upon the occurrence of a Change in Control followed within eighteen (18) months by an Event of Termination (as defined in Section 4 hereof), Executive, shall receive as severance pay or liquidated damages, or both, a lump sum cash payment equal to three times the sum of (i) Executive's highest annual rate of Base Salary paid to Executive at any time under this Agreement, plus (ii) the average of the bonuses earned in the two fiscal years immediately preceding the year in which the Change in Control occurs (including any bonus(es) paid by Allegheny Valley Bank).  Such payment shall be paid in a lump sum within ten (10) days of the Executive's Separation from Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following the Event of Termination.

 

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(d)      Upon the occurrence of a Change in Control followed within eighteen (18) months by an Event of Termination (as defined in Section 4 hereof), the Employer (or its successor) shall provide at the Employer's (or its successor's) expense, nontaxable medical (including any employer contributions to a health savings account), health, vision and dental coverage substantially comparable, as reasonably available, to the coverage maintained by the Employer for Executive prior to his termination, except to the extent such coverage may be changed in its application to all Employer's employees and then the coverage provided to Executive shall be commensurate with such changed coverage.  Such coverage shall cease eighteen (18) months following the termination of Executive's employment, and, in addition to providing continued insurance coverage for eighteen (18) months, the Employer shall make a cash payment to the Executive in an amount equal to the product of (x) the monthly premium (including any employer contributions to a health savings account) in effect as of the date of the Event of Termination for the level of coverage in effect for Executive under the Employer's group health plans, times (y) eighteen (18), with such payment made at the same time cash severance is paid under Section 5(d).  Notwithstanding the foregoing, if applicable law (including, but not limited to, laws prohibiting discriminating in favor of highly compensated employees), or, if participation by the Executive is not permitted under the terms of the applicable health plans, or if providing such benefits would subject the Employer to penalties, then the Employer shall pay the Executive a cash lump sum payment reasonably estimated to be equal to the premiums for such nontaxable medical, health, vision and dental coverage, with such payment to be made by lump sum within ) business days of the Date of Termination, or if later, the date on which the Employer determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the foregoing reasons.  

6. TERMINATION FOR DISABILITY OR DEATH.

(a) Termination of Executive's employment based on "Disability" shall be construed to comply with Section 409A of the Internal Revenue Code and shall be deemed to have occurred if: (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months; (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months, Executive is receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer; or (iii) Executive is determined to be totally disabled by the Social Security Administration. The provisions of Sections 6(b) and (c) shall apply upon the termination of the Executive's employment based on Disability.  Upon the determination that Executive has suffered a Disability, disability payments hereunder shall commence within thirty (30) days.

(b) Executive shall be entitled to receive benefits under all short-term or long-term disability plans maintained by the Employer for its executives.  To the extent such benefits are less than Executive's Base Salary, the Employer shall pay the Executive a monthly payment

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equal to seventy-five percent (75%) of Executive's monthly rate of base salary. These disability payments shall commence within thirty (30) days of the date of Executive's termination due to Disability and will end on the earlier of (i) the date Executive returns to the full-time employment of the Employer in the same capacity as he was employed prior to his termination for Disability; (ii) the date the Executive begins full-time employment with another employer; (iii) three years from the date of the Executive's termination due to Disability; or (iv) the date of Executive's death. Notwithstanding any other provision to the contrary, the Employer's obligation for any payments required to be made under this Section 6(b) shall be reduced by any proceeds received by Executive from disability income insurance or any other disability policy or plan maintained by the Employer for Executive which was paid for by the Employer as partial satisfaction of its obligation under this Section 6(b).

(c) The Employer shall cause to be continued nontaxable medical, health, vision and dental coverage substantially comparable, as reasonably available, to the coverage maintained by the Employer for Executive prior to the termination of his employment based on Disability, except to the extent such coverage may be changed in its application to all Employer employees or not available on an individual basis to an employee terminated based on Disability.  This coverage shall cease upon the earlier of: (i) the date the payments cease to be made under Section 6(b), or (ii) such insurance cannot be provided under COBRA as described under Section 4980B(f)(2)(B) of the Code.  If such insurance can no longer be provided under COBRA, the Employer shall make a cash payment to the Executive in an amount equal to the monthly premium in effect as of the date of the disability for the level of coverage in effect for Executive under the Employer's group health plans, with such payment made at the same time disability is paid under Section 6(b), and such payments shall cease when payments cease to be made under Section 6(b).   Notwithstanding the foregoing, if applicable law (including, but not limited to, laws prohibiting discriminating in favor of highly compensated employees), or, if participation by the Executive is not permitted under the terms of the applicable health plans, or if providing such benefits would subject the Employer to penalties, then the Employer shall pay the Executive a cash lump sum payment reasonably estimated to be equal to the premiums for such nontaxable medical, health, vision and dental coverage, with such payment to be made by lump sum within ten business days of the Date of Termination, or if later, the date on which the Employer determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the foregoing reasons.  

(d) In the event of Executive's death during the term of this Agreement, his estate, legal representatives or named beneficiaries (as directed by Executive in writing) shall be paid Executive's Base Salary at the rate in effect at the time of Executive's death in accordance with the regular payroll practices of the Employer for a period of one (1) year from the date of Executive's death, and the Employer shall continue to provide non-taxable medical, health, vision and dental insurance benefits normally provided for Executive's family (in accordance with its customary co-pay percentages) for twelve (12) months after Executive's death.  Such payments are in addition to any other life insurance benefits that Executive's beneficiaries may be entitled to receive under any employee benefit plan maintained by the Employer for the benefit of Executive, including, but not limited to, the Employer's tax-qualified retirement plans.

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7. TERMINATION UPON RETIREMENT.

Termination of Executive's employment based on "Retirement" shall mean termination of Executive's employment at any time after Executive reaches age 65 or in accordance with any retirement policy established by the Board with Executive's consent as it applies to him.  Upon termination of Executive based on Retirement, no amounts or benefits shall be due Executive under this Agreement, and Executive shall be entitled to all benefits under any retirement plan of the Employer and other plans to which Executive is a party.

8. TERMINATION FOR CAUSE.

(a) The Employer may terminate Executive's employment at any time, but any termination other than termination for "Cause," as defined herein, shall not prejudice Executive's right to compensation or other benefits under this Agreement.  Executive shall have no right to receive compensation or other benefits for any period after termination for "Cause."  The term "Cause" as used herein, shall exist when there has been a good faith determination by the Board that there shall have occurred one or more of the following events with respect to the Executive:

	
(1)

	
personal dishonesty in performing Executive's duties on behalf of the Employer;

	
(2)

	
incompetence in performing Executive's duties on behalf of the Employer;

	
(3)

	
willful misconduct that in the judgment of the Board will likely cause economic damage to the Employer or injury to the business reputation of the Employer;

	
(4)

	
breach of fiduciary duty involving personal profit;

	
(5)

	
material breach of the Employer's Code of Ethics;

	
(6)

	
intentional failure to perform stated duties under this Agreement after written notice thereof from the Board;

	
(7)

	
willful violation of any law, rule or regulation (other than traffic violations or similar offenses) that reflect adversely on the reputation of the Employer, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order; or

	
(8)

	
material breach by Executive of any provision of this Agreement.

Notwithstanding the foregoing, Cause shall not be deemed to exist unless there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than seventy-five percent (75%) of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to the Executive and an opportunity for the Executive to be heard before the Board), finding that in the good faith opinion of the Board

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the Executive was guilty of conduct described above and specifying the particulars thereof.  Prior to holding a meeting at which the Board is to make a final determination whether Cause exists, if the Board determines in good faith at a meeting of the Board, by not less than a majority of its entire membership, that there is probable cause for it to find that the Executive was guilty of conduct constituting Cause as described above, the Board may suspend the Executive from his duties hereunder for a reasonable period of time not to exceed fourteen (14) days pending a further meeting  at which the Executive shall be given the opportunity to be heard before the Board.  Upon a finding of Cause, the Board shall deliver to the Executive a Notice of Termination, as more fully described in Section 10 below.

(b) For purposes of this Section 8, no act or failure to act, on the part of Executive, shall be considered "willful" unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive's action or omission was in the best interests of the Employer.  Any act, or failure to act, based upon the direction of the Board or based upon the advice of counsel for the Employer shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Employer.

9.     RESIGNATION FROM BOARDS OF DIRECTORS

In the event of Executive's termination of employment due to an Event of Termination, Executive's service as a director of the Employer and any affiliate of the Employer shall immediately terminate.  This Section 9 shall constitute a resignation notice for such purposes.

10.      NOTICE.

(a) Any purported termination by the Employer for Cause shall be communicated by Notice of Termination to Executive.  If, within thirty (30) days after any Notice of Termination for Cause is given, Executive notifies the Employer that a dispute exists concerning the termination, the parties shall promptly proceed to arbitration, as provided in Section 20.  Notwithstanding the pendency of any such dispute, the Employer shall discontinue paying Executive's compensation until the dispute is finally resolved in accordance with this Agreement.  If it is determined that Executive is entitled to compensation and benefits under Section 4 or 5, the payment of such compensation and benefits by the Employer shall commence immediately following the date of resolution by arbitration, with interest due Executive on the cash amount that would have been paid pending arbitration (at the prime rate as published in The Wall Street Journal from time to time).

(b) Any other purported termination by the Employer or by Executive shall be communicated by a "Notice of Termination" (as defined in Section 10(c)) to the other party.  If, within thirty (30) days after any Notice of Termination is given, the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the parties shall promptly proceed to arbitration as provided in Section 20.  Notwithstanding the pendency of any such dispute, the Employer shall continue to pay Executive his Base Salary, and other compensation and benefits in effect when the notice giving rise to the dispute was given (except as to termination of Executive for Cause); provided, however, that such payments and benefits shall not continue beyond the date that is 36 months from the date the Notice of 

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Termination is given.  In the event the voluntary termination by Executive of his employment is disputed by the Employer, and if it is determined in arbitration that Executive is not entitled to termination benefits pursuant to this Agreement, he shall return all cash payments made to him pending resolution by arbitration, with interest thereon at the prime rate as published in The Wall Street Journal from time to time, if it is determined in arbitration that Executive's voluntary termination of employment was not taken in good faith and not in the reasonable belief that grounds existed for his voluntary termination.  If it is determined that Executive is entitled to receive severance benefits under this Agreement, then any continuation of Base Salary and other compensation and benefits made to Executive under this Section 10 shall offset the amount of any severance benefits that are due to Executive under this Agreement.

(c) For purposes of this Agreement, a "Notice of Termination" shall mean a written notice that shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated.

11.    POST-TERMINATION OBLIGATIONS.

(a) One Year Non-Solicitation.  Executive hereby covenants and agrees that, for a period of one year following his termination of employment with the Employer, he shall not, without the written consent of the Employer, either directly or indirectly (i) solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any officer or employee of the Employer, or any of their respective subsidiaries or affiliates, to terminate his employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any business whatsoever that competes with the business of the Employer, or any of their direct or indirect subsidiaries or affiliates or has headquarters or offices within twenty-five (25) miles of the locations in which the Employer has business operations or has filed an application for regulatory approval to establish an office, or (ii) solicit business from any customer of the Employer or their subsidiaries, divert or attempt to divert any business from the Employer or their subsidiaries, or induce, attempt to induce, or assist others in inducing or attempting to induce any agent, customer or supplier of the Employer or any other person or entity associated or doing business with the Employer (or proposing to become associated or to do business with the Employer) to terminate such person's or entity's relationship with the Employer (or to refrain from becoming associated with or doing business with the Employer) or in any other manner to interfere with the relationship between the Employer and any such person or entity.

(b) One Year Non-Competition.  Executive hereby covenants and agrees that, for a period of one year following his termination of employment with the Employer, he shall not, without the written consent of the Employer, either directly or indirectly become an officer, employee, consultant, director, independent contractor, agent, sole proprietor, joint venturer, greater than 5% equity owner or stockholder, partner or trustee of any savings association, savings and loan association, savings and loan holding company, credit union, bank or bank holding company, insurance company or agency, any mortgage or loan broker or any other financial services entity or business that competes with the business of the Employer or its affiliates or has headquarters or offices within twenty-five (25) miles of Monroeville, Pennsylvania.  

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Notwithstanding the foregoing, this non-competition restriction shall not apply if Executive's employment is terminated following a Change in Control or if the Employer terminates the Executive for a reason other than Cause (as defined in this Agreement).

(c)   As used in this Agreement, "Confidential Information" means information belonging to the Employer which is of value to the Employer in the course of conducting its business and the disclosure of which could result in a competitive or other disadvantage to the Employer. Confidential Information includes, without limitation, financial information, reports, and forecasts; inventions, improvements and other intellectual property; trade secrets; know-how; designs, processes or formulae; software; market or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) which have been discussed or considered by the management of the Employer. Confidential Information includes information developed by the Executive in the course of the Executive's employment by the Employer, as well as other information to which the Executive may have access in connection with the Executive's employment.  Confidential Information also includes the confidential information of others with which the Employer has a business relationship. Notwithstanding the foregoing, Confidential Information does not include information in the public domain.  The Executive understands and agrees that the Executive's employment creates a relationship of confidence and trust between the Executive and the Employer with respect to all Confidential Information.  At all times, both during the Executive's employment with the Employer and after its termination, the Executive will keep in confidence and trust all such Confidential Information, and will not use or disclose any such Confidential Information without the written consent of the Employer, except as may be necessary in the ordinary course of performing the Executive's duties to the Employer.

(d) Executive shall, upon reasonable notice, furnish such information and assistance to the Employer as may reasonably be required by the Employer, in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party; provided, however, that Executive shall not be required to provide information or assistance with respect to any litigation between the Executive and the Employer or any of its subsidiaries or affiliates.

(e) All payments and benefits to Executive under this Agreement shall be subject to Executive's compliance with this Section 11.  The parties hereto, recognizing that irreparable injury will result to the Employer, its business and property in the event of Executive's breach of this Section 11, agree that, in the event of any such breach by Executive, the Employer will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive and all persons acting for or with Executive. Executive represents and admits that Executive's experience and capabilities are such that Executive can obtain employment in a business engaged in other lines and/or of a different nature than the Employer, and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood.  Nothing herein will be construed as prohibiting the Employer from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of damages from Executive.

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12.    SOURCE OF PAYMENTS.

Notwithstanding any provision in this Agreement to the contrary, payments and benefits, as provided for under this Agreement, will be paid by the Company and Bank in proportion to the level of activity and the time expended by Executive on activities related to the Company and Bank, respectively, as determined by the Employer.

13.    EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreement between the Employer or any predecessor of the Employer and Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to Executive of a kind elsewhere provided.  No provision of this Agreement shall be interpreted to mean that Executive is subject to receiving fewer benefits than those available to him without reference to this Agreement.

14.    NO ATTACHMENT; BINDING ON SUCCESSORS.

(a) Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void, and of no effect.

(b) This Agreement shall be binding upon, and inure to the benefit of, Executive and the Bank and their respective successors and assigns.

15.    MODIFICATION AND WAIVER.

(a) This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

(b) No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future as to any act other than that specifically waived.

16.    REQUIRED PROVISIONS.

(a) The Employer may terminate Executive's employment at any time, but any termination by the Board other than termination for Cause shall not prejudice Executive's right to compensation or other benefits under this Agreement.  Executive shall have no right to receive compensation or other benefits for any period after termination for Cause.

(b) If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Employer's affairs by a notice served under Section 8(e)(3) 

13

[12 USC §1818(e)(3)] or 8(g)(1) [12 USC §1818(g)(1)] of the Federal Deposit Insurance Act, the Employer's obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Employer may in its discretion (i) pay Executive all or part of the compensation withheld while its contract obligations were suspended and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

(c) If Executive is removed and/or permanently prohibited from participating in the conduct of the Employer's affairs by an order issued under Section 8(e)(4) [12 USC §1818(e)(4)] or 8(g)(1) [12 USC §1818(g)(1)] of the Federal Deposit Insurance Act, all obligations of the Employer under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

(d) If the Employer is in default as defined in Section 3(x)(1) [12 USC §1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the Employer under this Agreement shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.

(e) All obligations under this Agreement shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of the Employer, (i) by either the Office of the Comptroller of the Currency or the Board of Governors of the Federal Reserve System (collectively, the "Regulator") or his or her designee, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Employer under the authority contained in Section 13(c) [12 USC §1823(c)] of the Federal Deposit Insurance Act; or (ii) by the Regulator or his or her designee at the time the Regulator or his or her designee approves a supervisory merger to resolve problems related to operation of the Employer or when the Employer is determined by the Regulator to be in an unsafe or unsound condition.  Any rights of the parties that have already vested, however, shall not be affected by such action.

(f) Notwithstanding anything herein contained to the contrary, any payments to Executive by the Employer, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.

17.    SEVERABILITY.

If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.

18.    HEADINGS FOR REFERENCE ONLY.

The headings of sections and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

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19.    GOVERNING LAW.

This Agreement shall be governed by the laws of the Commonwealth of Pennsylvania except to the extent superseded by federal law.

20.    ARBITRATION.

Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil litigation and without any trial by jury to resolve such claims, conducted by a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the main office of the Employer, in accordance with the rules of the American Arbitration National Rules for the Resolution of Employment Disputes ("National Rules") then in effect.  One arbitrator shall be selected by Executive, one arbitrator shall be selected by the Employer and the third arbitrator shall be selected by the arbitrators selected by the parties.  If the arbitrators are unable to agree within fifteen (15) days upon a third arbitrator, the arbitrator shall be appointed for them from a panel of arbitrators selected in accordance with the National Rules.  Judgment may be entered on the arbitrator's award in any court having jurisdiction.

21.    INDEMNIFICATION.

(a) Executive shall be provided with coverage under a standard directors' and officers' liability insurance policy, and shall be indemnified for the term of this Agreement and for a period of six years thereafter to the fullest extent permitted under applicable law against all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit or proceeding in which he may be involved by reason of his having been a director or officer of the Employer or any affiliate (whether or not he continues to be a director or officer at the time of incurring such expenses or liabilities), such expenses and liabilities to include, but not be limited to, judgments, court costs and attorneys' fees and the cost of reasonable settlements (such settlements must be approved by the Board), provided, however, Executive shall not be indemnified or reimbursed for legal expenses or liabilities incurred in connection with an action, suit or proceeding arising from any illegal or fraudulent act committed by Executive.  Any such indemnification shall be made consistent with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and the regulations issued thereunder in 12 C.F.R. Part 359.

(b) Any indemnification by the Employer shall be subject to compliance with any applicable regulations of the Federal Deposit Insurance Corporation.

22.    NOTICE.

For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:

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To the Employer:

	
Chairman of the Board

Standard Bank

2640 Monroeville Blvd.

Monroeville, Pennsylvania 15146

 

	
To Executive:

 

	
Timothy K. Zimmerman

At the address last appearing on

the personnel records of the Bank

 

	 	 

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IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed by their duly authorized representatives, and Executive has signed this Agreement, on the date first above written.

	 	
STANDARD BANK

	 	 
	 	 
	 	 
	 	
By: /s/ Terence L. Graft 

      Chairman of the Board

	 	 
	 	
STANDARD AVB FINANCIAL CORP.

	 	 
	 	 
	 	
By: /s/ Terence L. Graft

      Chairman of the Board

	 	 
	 	 
	 	 
	 	
EXECUTIVE:

	 	 
	 	 
	 	
 /s/ Timothy K. Zimmerman 

Timothy K. Zimmerman

17

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