Document:

Exhibit 10.31

 

LEASE

 

Basic Lease Provisions

 

Section  1.

 

1.01                        Date and
Parties.  This Indenture of Lease
made as of the 28th day of January 2004, is between John J.
McArdle  III, Trustee of the Lally 11
Realty Trust, 78 Main Street, Andover, Massachusetts and recorded in the Essex
North District Registry of Deeds in Book
          on Page
        (hereinafter called the “Lessor”)
and Enterprise Bank and Trust. Company, having its principal place of business
at 222 Merrimack Street, Lowell, Massachusetts 01852 (hereinafter called the
“Lessee”). Lessee  is a Massachusetts
corporation with a principal office at 222 Merrimack Street, Lowell,
Massachusetts 01852.

 

1.02                        Premises.
Witnesseth, that in consideration of the rents and covenants herein
reserved and contained on the part of the Lessee to be paid, performed and
observed, the Lessor  does hereby lease
and demise unto the Lessee the premises 
known as 8 and 8R High Street, Andover, Massachusetts consisting of one
two story building as well as a one story building at the rear of the property
(hereinafter called the ‘Premises”). which premises are more particularly
described in Exhibit A attached hereto and incorporated by reference.

 

1.03                        Use.  The Lessee shall use the premises for a
commercial bank or  trust company or for
any financial services use or other commercial or professional  office use which shall be permitted by the
zoning by-law  of the Town of Andover as
the same is from time to time amended.

 

1.04                        Term.  The initial term of this lease shall be
the period of Ten (10) Years commencing on the commencement date (hereafter
defined) and ending ten  (10) years
after the commencement date. The commencement date of this lease shall be the
first day of the following month after the date the Town of Andover issues a
certificate of occupancy.

 

1.05                        Extended
Term.  Provided this lease is in
full force and effect without notice of default to Lessee, or if such notice of
default has been given and the Lessee is acting  promptly and diligently 
to cure the same, the Lessee may extend the term of this  lease for 
up to five (5) consecutive option terms of five years each  (Extended Terms).  The term and all extended terms, if any, shall automatically be
extended for each extended term unless Lessee shall notify Lessor of its
intention to terminate this lease at six (6) months prior to the expiration of
the then existing term.(Notice Date).

 

1.06                        Intentionally
omitted

 

1

 

1.07                        Confirmation
of Commencement. Within thirty (30) days after the commencement date, the
parties shall confirm in writing the Lease’s commencement date and termination
date. The declaration in recordable form shall set forth the specific date of
commencement. The cost of recording and preparation shall be the obligation of
the Lessee.

 

Section 2.                                          RENT
AND SECURITY

 

2.01                        Basic
Rent  For years One (1) through Ten
(10),  Lessee will pay $110,000.00 in
Yearly Fixed Rent (“Rent”) in monthly installments of $9,166.67 on the First
Monthly Payment Due Date and thereafter on the first day of each month in
advance. All rent payments shall he made to the Lessor or the Lessor’s  agent and at such place as the Lessor shall
from time to time in writing designate. The first monthly payment shall be paid
on the commencement date.

 

2.03.                     Renewal Rent.   In the event the Lessee exercises its
option to extend the term of this lease, after the Initial Term, the annual
basic rent which the Lessee shall pay for 
years 11 through 15 (the First Option Term)  shall be $240,000.00 in Yearly Fixed Rent (“Rent”) in monthly
installments of $20,000.00 on the First Monthly Payment Due Date and thereafter
on the first day of each month in advance. All rent payments shall he made to
the Lessor or the Lessor’s agent and at such place as the Lessor shall from
time to time in writing designate. The first monthly payment shall be paid on
the  commencement date of the first
option period.

 

2.03 A.         In the event the
Lessee exercises its option to extend the term of this lease, after the Initial
Term, and after the First Option Term the annual basic rent which the Lessee
shall pay during the each subsequent five year option term  shall be 
(a) the amount  of the annual
basic rent paid during the last month of the Previous  Term plus (b) the product of (I) the said  Annual Basic Rent being charged during the
last month of the prior  term multiplied
by (ii) the amount, expressed as a percentage equal to 100% percent of the
increase, if any, in the index now known as the Producer Price Index for the
Boston Area as published by the Bureau of Labor Statistics, United States
Department of Labor (“PPI”) for the sixty 
month period next preceding the commencement of the current extended
term or the preceding month period of the Initial Term.  The Initial PPI shall be the PPI published
on or most recently prior to the commencement date of the applicable term and
the PPI utilized to calculate the increase shall be the PPI published on or
most recently prior to the commencement of the current extended term or the
preceding sixty  month period .In no
event shall the basic rent be less than the said rent for the prior period.

 

2.04.                     Annual Basic
Rent shall be payable in advance, in equal monthly installments of 1/12th of
the Annual Basic Rent on the first day of each calendar month from and after
the Commencement Date.

 

2.05                        Additional
Rent.  The Lessee shall pay
as additional rent the real estate taxes for the premises beginning on  the commencement date.  The real estate  taxes shall be paid to the Town of Andover  in or within twenty days after the tax bill
for the same is presented to the Lessee. The Lessor agrees to furnish the tax
bill to the Lessee within ten (10) business days after the same is

 

2

 

received.  All such tax payments shall be made to the
municipality by Lessee with proof of payment being furnished to the Lessor on
each occasion that a payment is made.

 

2.06                        Abatement
of Taxes.  The Lessor at the request
of the Lessee shall authorize the Lessee to apply for a tax abatement in the
name of the Lessor for any tax year. 
The Lessee shall pay for all expenses including the cost of appraisals
and all legal expenses.  All legal
documents shall be prepared and paid for by the Lessee.  Copies of all documents filed in connection
with the abatement, shall be sent to the Lessor. All such abated taxes shall
belong to the Lessee.

 

Section 3.                                          AFFIRMATIVE
OBLIGATIONS

 

3.01                        Utilities.  Lessee shall pay to the proper authority
charged with the collection thereof, all charges for the consumption of
electricity, gas, water, sewer, rubbish removal, telephone and other such
services separately metered or billed to Lessee for the Premises.  All such charges shall be paid as the same
from time to time become due.  The
Lessor acknowledges that all utilities which presently  service the building have been brought
directly to the premises and to the building, 
and that the Lessee shall only need to make arrangements for any  upgrades
to the current utilities and to turn on such utilities and  make arrangements for billing for any such
services.  The Lessee shall make its own
arrangements for such utility billing. 
The Lessor shall not be liable for any interruption or failure in the
supply of such utilities to the premises.

 

3.02                        Repairs
and Maintenance.  The Lessee shall
keep the premises in good order; make repairs and replacement to the premises
needed because of Lessee’s use of the premises; and  repair and replace special equipment installed by or at Lessee’s
request.  The Lessee shall be
responsible for repair, replacement and general maintenance of the roof,
foundation, exterior walls, interior walls, all structural components, and all
systems such as mechanical, electrical, HVAC, and plumbing.  Removal of snow and ice from the sidewalks
bordering the Premises and from the parking areas of the Premises shall be the
Lessees responsibility.

 

3.03                        Time for
Repairs and Replacement.  Repairs or
replacements required under Section 3 shall be made within a reasonable
time after receiving notice or having actual knowledge for the need for repair
or replacement.

 

3.04                        Lessor
has no obligation to alter, remodel or improve the Premises in any way.  Lessee agrees to accept the Premises in an
“as is” condition subject to the terms of this lease.   The foregoing notwithstanding, the Lessor shall be responsible
for the repair and maintenance of  a
stone wall located on the premises if in fact owned by the Lessor  and shown on Exhibit A attached hereto and
the removal of the underground  fuel
storage tank.

 

3.05                        Lessee
shall have the right, at its sole cost and expense, to alter, remodel or
improve the Premises and the buildings thereon in any way which in its sole
discretion will be necessary for it to conduct its business on the premises.  The Lessee is given the right to tear down
any portion of the rear building or any additions to the main building now
located on the premises and to

 

3

 

rebuild or replace the
same in such a manner as it deems necessary to conduct its business.  The main building may be altered and
remodeled and improved, but except for additions to the main building, it may
not be torn down and replaced.  If the
lease is assigned by the Lessee, then any subsequent Lessee may not tear down
and rebuild a structure without the consent of the Lessor which consent shall
not be unreasonably withheld or delayed. 
The repair or replacement or remodeling shall not be performed unless
the plans and specifications of the Lessee shall be approved by the Lessor,
which approval Lessor agrees not to delay or withhold unreasonably.  In any event, the approval or disapproval
shall be given to Lessee within thirty (30) days after the same is submitted to
Lessor by Lessee.

 

3.06                        Drawings.  Lessee shall submit to Lessor, on or before
thirty (30) days prior to its commencement of any major work on the
premises,  the Lessee’s drawings and
plans for the work to be performed on the premises.  Lessor, by notice in writing addressed to Lessee, shall indicate
Lessor’s approval of them or clearly specify any objections to them, the
objections in all events to be reasonable. 
The work to be performed by Lessee as described in the drawings   therefor are herein referred to as
“Lessee’s Work.” The Lessor and the Lessee shall discuss in good faith any
reasonable objection made by the Lessor. 
If the parties are unable to agree, the Lessee may commence its work
provided the work complies with the applicable laws and regulations. A copy of
all plans and drawings will be given to the Lessor for his records.

 

3.07                        Lessee
shall bear all costs of preparing the drawings.  Lessor’s approval of the drawings shall not constitute an opinion
or agreement that they are in compliance with law (it being agreed that such compliance
is solely Lessee’s responsibility), nor shall such approval impose any present
or future liability on Lessor or waive any of Lessor’s rights under the Lease.

 

3.08                        Workmanship.  Lessee shall, to the reasonable satisfaction
of Lessor, commence, construct, perform and complete all Lessee’s Work in a
good and workmanlike manner, in 
accordance with the drawings submitted to the  Lessor.

 

3.09                        Permits.  Prior to commencement of construction of
Lessee’s Work, Lessee shall obtain, at its sole cost and expense, any
appropriate insurance, all permits and licenses and other consents and
approvals of all governmental authorities as may be required in connection with
Lessee’s Work and shall deliver copies thereof to Lessor.  Lessee shall, at its sole cost and expense,
furnish to Lessor copies of  all
certificates and approvals with respect to work done by Lessee or on Lessee’s
behalf that may be required from any governmental authority for the issuance of
a certificate of occupancy for the Premises and shall obtain such certificate
and furnish Lessor with a copy of such certificate prior to the commencement of
construction. Lessor shall execute any and all documents required by the
appropriate authorities to enable the Lessee to obtain its approvals and permits.  All policies of insurance required to be
maintained by the Lessee shall be in full force and effect with the
commencement of the construction phase and shall remain in full force and
effect thereafter throughout the term or terms of this lease.

 

3.10                        Compliance
with law.  Lessee’s Work shall be
performed, constructed and installed in

 

4

 

accordance and in full
compliance with all applicable governmental 
requirements, including without limitation all applicable laws,
statutes, codes, ordinances and governmental rules, regulations and orders.

 

3.11                        All
improvements constructed by the Lessee shall become part of the Leased Premises
and title thereto shall vest in Lessor upon installation except as otherwise set
forth in this lease.  All costs of
Lessee’s Work shall be paid by Lessee.

 

3:12                       It
is agreed that any and all improvements made under this Section 3 shall in
no way affect the amount of basic rent or additional rent set forth in this
lease in Section 2.

 

Section 4                                             Lessee’s  Obligation. 
Surrender.

 

4.01                        Upon
the ending date of the initial term or upon the date of the last extension
term, ends, whichever is later, Lessee shall surrender the Premises to the
Lessor.

 

4.02                        On
surrender, Lessee shall remove from the Premises, its personal property, trade
fixtures and repair any damage to the Premises caused by the removal.  Any items not removed by Lessee as required
above, shall be considered abandoned. 
Lessor may dispose of abandoned items as Lessor chooses and bill Lessee
for the cost of disposal, minus any revenues received by Lessor for the
disposal.  It is understood that all
personal property and trade fixtures brought onto the premises by the Lessee
even if affixed to the building, 
including but not limited to vaults and vault components; security
systems,  ATM machines, night deposit
systems, antenna(s) drive-up  teller
components, teller  counter and
under-counter equipment  computer
equipment and related cabling and wiring, furniture, furnishings and the like,
shall be considered personal property for which the Lessee shall have the
absolute right to remove same, subject to its obligations to repair in
paragraph 3.02. Lessee shall not be required to remove any other improvements
made by it during the term of this lease except for the drive up canopy which
shall be removed at the request of the Lessor.

 

4.03                        The
Lessee shall have the right to assign or sublet part of the premises without
the Lessor’s prior consent. 
Notwithstanding such assignment or subleasing, the Lessee shall at all
times remain liable to the Lessor for the payment of all rent and for the full
performance of the terms and conditions of this Lease.  Further, the Lessee shall at all times
occupy the premises as a Lessee and shall occupy not less than a minimum of
twenty-five hundred ( 2500) square feet of the building on the premises.

 

4.04                        Compliance  With Law.  Lessee’s use of the Premises shall, at its own expense conform to
and comply with all zoning, building, environmental, fire, health,  and other codes, regulations, ordinances, or
laws.

 

4.05                        Lessor
Access.  The Lessor or agents
of  the Lessor may, at reasonable times,
enter to view the  Premises.  No visit of the Lessor or its agents shall
take place at times other than

 

5

 

normal business hours of
the Lessee.

 

4.06                        Signs.  The Lessee shall be permitted signage on the
Premises provided the same are placed 
and constructed in accordance with any sign or zoning by-law  of the Town of Andover.  Lessee shall pay for the cost of erecting
and maintaining any and all such signs 
Lessee shall remove the same upon the termination of this lease.

 

4.07                        Satellite
Dish.  Lessee shall be allowed to
install and maintain a satellite dish and antenna or any like item on the roof
of the Building.  All costs of
installation and maintenance shall be borne by the Lessee.  The installation shall be made so as  not to damage the Building or Building
systems.  Lessee shall indemnify Lessor
for any and all damages caused to the building or building systems by the dish
or antenna or the maintenance thereof.

 

SECTION 5.                            NEGATIVE
OBLIGATIONS

 

5.01                        Overloading  and Nuisance.   The  Lessee shall not
injure, overload, deface or permit to be injured, overloaded or  defaced, 
and the Lessee shall not permit, allow or suffer any waste or any
unlawful, improper or  offensive  use of the Premises or any occupancy thereof
that would be injurious to any person, property, or invalidate or increase the
premiums for any insurance on the building.

 

SECTION 6                               INSURANCE

 

6.01                        Fire
Insurance.  Lessee shall  be required to keep the Building insured
against damage and destruction by fire, earthquake, vandalism, and other perils
and its personal property and trade fixtures with “all risks” insurance in an
amount to cover one hundred (100) percent of the replacement cost of the
building and fixtures.  Lessee
shall  also  keep any non-Building-standard improvements made to the premises
at Lessor’s request insured to the same degree as Lessee’s personal  property.

 

6.02                        Liability
Insurance.  Lessee  shall maintain contractual and comprehensive
general liability insurance, including public liability and property damage,
with a minimum combined single limit of liability of not less than one million
dollars ($1,000,000.00) nor more than two million dollars ($2,000,000.00)  for personal injuries or deaths of persons
occurring in or about the Building or Premises and shall name the Lessor as an
additional insured.  The Bank shall also
maintain a Ten Million Dollar ($10,000,000.00) policy.

 

6.03                        Waiver of
Subrogation.  All insurance which is
carried by either party with respect to the premises and building or to
furniture, furnishings, fixtures or equipment therein or alterations or
improvements thereto, whether or not required, if either party so requests and
it can be so written, and it does not result 
in additional premium, or if the requesting party agrees to pay any
additional premium, shall include 
provisions which either designate the requesting party as one of the
insured or deny to the insurer acquisition by subrogation rights of recovery
against the

 

6

 

requesting party.  Each party waives all rights of recovery
against the other for loss or injury against which the waiving party is
protected by insurance containing said provisions, reserving however, any
rights with respect to any excess of loss or injury over the amount recovered
by such insurance.  The policies of
insurance required under section six (6 ) to be maintained by Lessee shall
name as insured parties Lessor and or Lessee, as their respective interests may
appear, and they may be carried under blanket policies maintained by Lessee if
such policies comply with the provisions of section six (6).

 

6.04                        Evidence
of Insurance.  During the
construction phase and on the commencement Date and upon each renewal of its
insurance policies, Lessee  shall give
certificates of insurance to the Lessor. 
The certificate shall specify amounts, types of coverage, the waiver of
subrogation, and the insurance criteria listed in the lease.  The policies shall be renewed or replaced
and maintained by the party responsible for that policy.  If Lessee 
fails to give the required certificate within thirty (30) days after
notice for demand for it, the Lessor 
may obtain and pay for that insurance and  receive reimbursement from the Lessee.  Further all deductibles relating to insurance policies are the
responsibility of the Lessee.

 

6.05                        Indemnification
. Lessee agrees to indemnify and save Lessor harmless from all claims,
actions, damages, liability, cost or expenses at the Premises arising (other
than injury, loss or damage caused by or result from the fault of Lessor or its
agents), (unless otherwise determined by a Court or administrative tribunal),
on account of  (i) any injury or damage
to any person or property on the premises or otherwise resulting from the
Lessee’s use and  maintenance and
occupancy of the Premises or any part thereof or the Lessee’s keeping or
storing of anything or facility thereon; (ii) any violation of this Lease by
Lessee; or (iii) any act, omission or misconduct of Lessee or its agents,
contractors, employees, licensees, sub-lessees or invitees, and for any
hazardous waste placed on the premises by Lessee and arising out of its use of
the premises.

 

Section 7.                                          LOSS
TO PREMISES

 

7.01.                     FIRE AND
CASUALTY LOSS

 

If the demised premises
or any part thereof, shall be damaged or destroyed by fire, the elements or
other casualty, then Lessee shall give notice thereof to Lessor, and except as
hereinafter otherwise provided, Lessee shall, promptly thereafter, repair or
restore the demised premises to substantially the same condition they were in
immediately prior to the casualty. The repair or restoration shall not be
performed unless the plans and specifications prepared by Lessee shall be
approved in writing by Lessor, which approval Lessor agrees not to delay or
withhold unreasonably.  In any event,
Lessor’s approval or disapproval thereof shall be given to Lessee within
fifteen (15)days after the same shall be submitted by Lessee to Lessor. Lessee
shall not be entitled to any abatement or reduction in rent. All insurance
proceeds recovered on account of any damage or destruction by fire, the
elements or other casualty shall be made available for the payment of the cost
of the aforesaid repair or restoration.

 

If the insurance proceeds
shall be less than the cost of repair or restoration, Lessee shall pay the

 

7

 

excess cost. If the
insurance proceeds shall be greater than the cost of repair or restoration the
excess shall belong to Lessee.

 

7.02                           At any
time during the term or terms in the event of fire or other casualty, Lessee
shall not be required to restore or repair premises if it is unable (after
using its best efforts) to obtain a building permit for same under the then
present zoning laws from the building inspector or equivalent. In such event,
this lease may terminate at the option of the Lessee sixty days after notice to
Lessor. Provided, however, Lessee at its option may seek a variance or special
permit or appeal the denial of such building permit.

 

7.03                           In the
event of any termination of the term or extended terms of this lease whereby
the Lessee is not required to rebuild or repair or to restore any damage or
destruction caused by fire or other casualty, the insurance proceeds shall
belong to the Lessor.   

 

7.03                        EMINENT
DOMAIN

 

If during the term of any
part thereof an eminent domain taking shall occur and, if pursuant to the
exercise of the right of condemnation or eminent domain (I) the Premises is
taken or conveyed under threat of the exercising of such right, or (ii) only a
portion of the Premises, is so taken or conveyed and Lessee determines that the
remainder of the Premises is inadequate or unsatisfactory for its purposes,
which determination shall not be arbitrarily or capriciously made, or (iii)
Lessee’s access to the Premises is reduced by such taking or conveyance and Lessee
determines that its access to the Premises is inadequate or unsatisfactory for
its purposes, which determination shall not be arbitrarily or capriciously
made, Lessee shall have the right to terminate this Lease, subject to Lessee’s
rights as set forth below.  Such
termination shall be effective on the date Lessee is required to give up its
occupancy, use, or access whichever is earlier.  The termination of this Lease as provided above shall not operate
to deprive Lessee of the right, and Lessor expressly grants to Lessee the right
to make a claim for an award in condemnation or participate in an award for
loss of business  goodwill, relocation
expenses, Lessee’s leasehold interest and/or lease bonus value, loss or damage
to Fixtures and improvements made by Lessee to the Premises, the value of
Lessee’s unexpired options to extend the Term, or any other claims that Lessee
is permitted or elects to make, or to receive notices and participate in the
condemnation proceedings, including any settlement negotiations, whether
conducted prior to or after the filing of a condemnation proceedings.  The Lessor reserves any and all rights to
make a claim for condemnation.

 

7.04                        In the
case of any taking by Eminent Domain, if this Lease is not terminated as
provided herein, Lessor and Lessee shall agree upon an equitable reduction in
the rent, if any.   If the parties fail
to agree upon such reduction within sixty (60) days from the date Lessee is
required to give up such occupancy, use or access, whichever is earlier, Lessor
and Lessee shall each choose one arbitrator and the two arbitrators so chosen
shall choose a third arbitrator.  The
decision of any two of the arbitrators concerning the rent reduction, if any,
shall be binding on Lessor and Lessee and any expense of the arbitration shall
be divided equally between Lessor and Lessee. 
Any such reduction in rent shall not constitute an election or remedies
by Lessee nor deprive

 

8

 

Lessee of the right to
make a claim for an award in condemnation as set forth above or receive notices
and participate in the condemnation proceedings, including any settlement
negotiations.

 

7.05                        Rebuild
Last 24 Months .  If the premises
are so damaged by fire or other casualty at any time during the last
twenty-four months of any Term and the cost to repair such damage is reasonably
estimated to exceed one-half of the total Annual Fixed Rent payable hereunder
for the period from the estimated completion date of repair until the end of
the Term, and Lessee  determines not to
repair such damage , then and in any event, this Lease and the term thereof may
be terminated at the election of Lessee by a notice to  the Lessor from the Lessee within sixty (60)
days following such fire or other casualty. 
In the event of any termination, this Lease and the Term hereof shall
expire as of such effective termination date as though that were the date
originally stipulated in Section 1 for the end of the Term and the fixed
rent shall be apportioned as of such date and the fire insurance proceeds less
any Lessee expenditures shall be turned over to the lessor.  Except for the final twenty-four months of
the final extended term, the Lessee, unless the lease is terminated, may extend
the term if the loss occurs during any term but the final term so as to allow
the Lessee  to rebuild according to this
lease.

 

Section 8.                                          Defaults-
Remedies

 

8.01                        Events of
Default.  If Lessee shall default in
performance of any of its obligations to pay rent, additional rent or extension
rent, and if such default shall 
continue for fifteen business days after written notice from Lessor  then, and in any such case, Lessor lawfully
may, in addition to and not in derogation of any remedies for any preceding
breach of  covenant,  mail a notice of termination addressed to
Lessee at Lessee’s Original Address as specified in Section 1 or such
other address as noticed in writing to Lessor 
and repossess the same as of Lessor’s former estate and expel Lessee and
those claiming through or under Lessee without prejudice to any remedies
which  might otherwise be used for
arrears of rent or preceding breach of covenant, and upon such entry or mailing
as aforesaid this Lease shall terminate.

 

8.02                        If  within thirty business days after written
notice from Lessor to Lessee specifying any other default or defaults, Lessee
has not commenced diligently to correct the default or defaults so specified or
has not thereafter diligently pursued such correction to completion, in either
case subject to the provisions of Article 7, then, and in any such case,
Lessor lawfully may, in addition to and not in derogation of any remedies for
any preceding breach of  covenant, mail
a notice of termination addressed to Lessee at Lessee’s Original Address as
specified in Article I, or as changed by written notice to Lessor and
repossess the same as of Lessor’s former estate and expel Lessee and those
claiming through or under Lessee without prejudice to any remedies which   might otherwise be used for arrears of rent
or preceding breach of covenant, and upon such entry or mailing as aforesaid
this Lease shall terminate.  There shall
be due to Lessor a late charge for failure of Lessee to pay , annual basic
rent, at the rate of 10% computed until the date the default is cured and
commencing on the date the payment is due.

 

8.03                        Remedies.  In the event that this Lease is terminated
under any of the provisions

 

9

 

contained in
Section 8  or shall be otherwise
terminated for breach of any obligation of Lessee, Lessee covenants to pay
punctually to Lessor all  sums and
perform all the obligations which Lessee covenants in this Lease to pay and to
perform in the same manner and to the same extent and at the same time as if
this Lease had not been terminated.  In
calculating the amounts to be paid by Lessee under the next foregoing covenant,
Lessee shall be credited with any amount paid to Lessor as net proceeds of any
rent obtained by Lessor by re-letting the Leased Premises, after deducting all
Lessor’s expenses in connection with such re-letting, including, without
limitation, all repossession costs, brokerage commissions, fees for legal
services and expenses of repairing the Leased Premises for such re-letting, it
being agreed by Lessee that Lessor may but is not obligated to  (i) rel-let the Leased Premises or any part
or parts thereof, for a term or terms which may, at Lessor’s option, be equal
to or less than or exceed the period which would otherwise have constituted the
balance of the Lease Term, and (ii) make such removals and repairs in the
Leased Premises as Lessor in its reasonable judgment considers advisable or
necessary to rel-let the same, and no action of Lessor in accordance with the
foregoing or failure to rel-let or to collect rent under any re-letting shall
operate or be construed, to the extent permitted by law, to release or reduce
the Lessee’s liability as aforesaid.

 

Nothing contained in this
Lease shall, however, limit or prejudice the right of Lessor to prove for and
obtain in proceedings for bankruptcy or insolvency by reason of the termination
of this Lease, an amount equal to the maximum allowed by any statute or rule of
law in effect at the time when, and governing the proceedings in which, the
damages are to be proved, whether or not the amount be greater, equal to, or
less than the amount of the loss or damages referred to above.

 

8.04                        Remedies
Cumulative.  The specific rights or
remedies to which Lessor or Lessee may resort under the terms of this Lease are
cumulative and are not intended to be exclusive of any other remedies or means
of redress to which Lessor or Lessee, as the case may be, may be lawfully
entitled to in case of  any breach or
threatened breach by either of them of any provisions of this Lease.  No mention in this Lease of any specific
right or remedy shall preclude either party from exercising any other right or
from having any other remedy or from maintaining any other action to which it
may otherwise be entitled either at law or equity.

 

8.05                        Lessor’s
Right to Cure Defaults.  Lessor may,
but shall not be obligated to, cure, at any time, following thirty business
days’ prior written notice to Lessee, except in cases of emergency when no
notice shall be required, any default by Lessee under this Lease; and whenever
Lessor so elects, all costs and expenses incurred by Lessor, including
reasonable attorneys’ fees, in curing a default shall be paid by Lessee to
Lessor on demand.

 

8.06                        Effect of
Waivers of Default.  The failure of
either party to seek redress for violation of, or to insist upon the strict and
literal performance of any term, covenant or condition of this Lease, shall not
be deemed a waiver of such violation or a relinquishment for the future of such
covenant, right or option, nor prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation, but the same shall remain

 

10

 

in full force and
effect.  The receipt by Lessor of rent,
with or without knowledge of  the breach
of any term, covenant or condition hereof shall not be deemed a waiver of such
breach.  No provisions of this Lease
shall be deemed to have been waived by either party unless such waiver be in
writing.

 

8.07.                     Lessor’s
Defaults.  If the Lessor fails to
pay any liens or encumbrances affecting the property and to which this lease
may be subordinate when any of the same may be due or in any other respects
fails to perform any covenant or agreement in this lease contained on the part
of the Lessor, to be performed, then and in such event, after the continuance
of any such failure or default for thirty (30) days after notice has been given
by the Lessee to the Lessor, Lessee may pay said lien or encumbrance and cure
such defaults.  Lessee, after such
thirty (30) day period, may make all necessary payments in connection therein,
including but not limited to the payment of any reasonable attorneys fees,
costs and charges incurred, in connection with any legal action which’.h may
have been brought.  If all such
indebtedness of Lessor is :not fully paid within thirty (30) days after Lessee
has paid the same and Lessor has been given notice same has been paid, Lessee
may elect (1) to deduct such amount from rent subsequently becoming due
hereunder, or (2) extend this lease on the same covenants and conditions as
herein provided until such indebtedness is fully paid by application to
rents.  Encumbrance shall include mortgage
payments where an uncured default exists.

 

SECTION 9.                            NON
DISTURBANCE

 

9.01                        SUBORDINATION
AND NON DISTURBANCE.  This Lease and
all rights of the Lessee hereunder are and shall be subject and subordinate to
the lien of any and all mortgages which may now or hereafter affect the
property or any part thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof, provided that any such
mortgage placed upon the property shall provide that so long as there shall be
no outstanding or continuing event of default in any of the terms, conditions,
covenants or agreements of this lease on the part of the Lessee to be
performed, the Leasehold  estate of the
Lessee  created by this Lease and Lessee’s
peaceful and quiet possession of the property shall be undisturbed by any
foreclosure of any such mortgage and the mortgagee shall recognize this lease
and all its terms and conditions including but not limited to any rights to
extend this lease. The mortgagee shall also consent to the use of all insurance
proceeds for the restoration of the building in the event of fire or other
casualty as herein set forth. The Lessee shall pay all reasonable costs,
expenses and reasonable  attorney’s fees
in connection with the document review under this section of the lease.

 

9.02                        ESTOPPEL  CERTIFICATE.  Either party shall
from time to time, within ten (10) business days after receiving a written
request by the other party, execute and deliver to the Asking Party a written
statement  in recordable form.  This written statement, which may be relied
upon  by  the Asking Party and any third party with whom the asking
party  is dealing shall certify:

 

(I) the accuracy of the
Lease document;

 

11

 

(ii) the Beginning and
Ending Dates of the Lease;

(iii) that the Lease is
unmodified and in full effect or in full effect as modified stating the date
and nature of the modification;

(iv) whether to the
answering party’s  knowledge the asking
party  is in default or whether the
Answering Party has any claims or demands 
against the Asking Party, and if so, specifying the Default, claim, or
demand; and  (v) to  correct any 
reasonably ascertainable facts that are covered by the Lease terms. The
Lessee shall pay all reasonable costs expenses and reasonable attorney’s fees
in connection with the document review under this section of the lease.

 

SECTION 10                        Intentionally
Omitted

 

SECTION 11                        Miscellaneous

 

11.01                 Notices.  Any notices from the Lessor to the
Lessee or from the Lessee to the Lessor relating to the Premises or the
occupancy thereof shall be deemed duly served if forwarded  by Certified Mail, Return Receipt Requested,
or by federal express or other such like carrier as follows:

 

To Lessee at

Enterprise Bank and Trust
Company

222 Merrimack  Street,

Lowell, Massachusetts
01852

 

and to the Lessor at:

 

John J. McArdle, III,
Trustee

Lally II Realty Trust

78 Main Street

Andover, Massachusetts
01810

 

Either party may change
the addresses by giving notice as provided above.

 

11.02                 Broker
Warranty.  Each party warrants that
there has been no real estate broker involved in connection with this
lease.  The party who breaches this
warranty shall defend, hold harmless and indemnify the non-breaching party from
any claims or liability arising from the breach.

 

11.03                 Partial
Invalidity.  If any Lease provision
is invalid or unenforceable to any extent, then that provision shall be excised
from the agreement and the remainder of this Lease shall continue in effect and
be enforceable to the fullest extent permitted by law.

 

11.04                 Waiver.  The failure of either party to exercise  any of its rights is not a waiver of those
rights.  A party waives only those
rights specified in writing signed by the party waiving its

 

12

 

rights.

 

11.05                 Binding  on Successors.  This Lease shall bind the 
parties, their successors, representatives, heirs, executors  and permitted assigns.

 

11.06                 Governing   Law. 
This lease shall be governed by the laws of the Commonwealth of
Massachusetts .

 

11.07                 Recording.   As soon as practical after the effective
date of this lease, the parties shall execute a Notice of Lease in a form
suitable for recording in the Essex 
North District Registry of Deeds. 
The Lessee shall deliver to the Lessor at the termination of the lease
a  discharge of the Notice of Lease in a
form suitable for recording in the said Registry of Deeds.  The cost of 
preparation and the cost of recording shall be borne by the Lessee.

 

11.08                 Survival of
Remedies.  The parties’ remedies
shall survive the ending of this lease when the ending is caused by the Default
of the other party.

 

11.09                 Authority of
Parties.  Each party warrants that
it is authorized  to enter into the
Lease, that the person signing on its behalf is duly authorized to execute the
Lease, that no other signatures are necessary.

 

11.10                 Entire Agreement.  This Lease contains the entire agreement
between the parties about the Premises. 
This Lease shall be modified only by a writing signed by both parties.

 

11.11                 Quiet enjoyment   Lessor agrees that upon Lessee’s paying the
rent and performing and observing the agreements, conditions and other
provisions on its part to be performed and observed, Lessee shall and may
peaceably and quietly have, hold and enjoy the demised premises during the term
of this Lease without any manner of hindrance or molestation from Lessor or
anyone claiming under Lessor, subject, however, to the terms of this Lease and
the encumbrances listed in Exhibit B.

 

SECTION 12.                     Contingencies

 

12.01                 Lessee’s Contingency.
The  Lessee’s obligations under this
lease shall be contingent upon (i) its obtaining all approvals from the
Commissioner of Banks of the Commonwealth of Massachusetts and (ii) the Federal
Deposit Insurance Corporation, and (iii) the Lessee obtaining all of the
necessary approvals, including  any
required curb cuts including any variance or change in zoning from the Town of
Andover and the Commonwealth of Massachusetts to allow Lessee to rehabilitate
and use the demised premises to its satisfaction, including but not limited to,
a full service financial services building with drive up facilities for a
commercial  bank and trust company.  The Lessee’s obligations under this Lease
shall be further contingent upon its obtaining all the necessary approvals and
permits from the Town of Andover to erect its required improvements upon the
demised premises in order to operate the commercial bank and trust

 

13

 

company thereon.

 

12.02                 Lessor’s
Obligations.   Not later than five
(5) days after receipt of notice that Lessee has submitted its permit
applications and prior to the commencement date, the Lessor at its sole cost
and expense shall remove from the leased premises an underground fuel storage
tank located on the premises.  The tank
shall be removed as required by Section 38A of General Laws, Chapter
148.  The Lessor agrees to indemnify and
hold harmless the Lessee from any and all claims for damages arising out of the
tank having been located on the premises and from the removal of the tank.  The Lessor shall indemnify the lessee from
any such damages, costs or expenses, including legal expenses incurred by the
presence of such underground tank and its removal.

 

12.03                 Any claim or
controversy between the Lessor and the Lessee regarding their respective rights
duties or obligations under this lease shall be determined by arbitration.
Such  arbitration shall be before one
disinterested arbitrator or if one cannot be agreed upon before three
disinterested arbitrators one named by the Lessor, one named by the Lessee and
one by the two thus chosen. The arbitrator or arbitrators shall determine the
controversy according to the laws of Massachusetts. All  arbitration proceedings shall occur in
Lowell, Massachusetts or Andover, Massachusetts.  Each arbitrator shall be an attorney with at least ten years of
experience in the real estate field. 
The decision of the arbitrator or arbitrators shall be final. Land lord
and the Lessee shall each pay one half of the cost of such arbitration and each
shall separately pay for its own attorneys fees and expenses.

 

12.04                 Representations.
The Lessor represents that it is the owner of the premises and that the
premises are encumbered only by those liens and mortgages  set forth in Schedule B attached
hereto.

 

12.05                 Preparation  for Permits.   Within ninety (90) days following the date of execution of the
Lease, the Lessee shall submit applications for all approvals from the
Commissioner of Banks and the Federal Deposit Insurance Corporation, and all
approvals deemed necessary to it from the appropriate agencies of the Town of
Andover.  (Preparation Period).  The Lessee shall notify the Lessor one week
in advance prior to the filing of any application.  During the preparation period, the Lessee and its agents and
engineers shall have access to the leased premises.   Lessee shall prosecute the applications process diligently. All
work performed under this Section 12.05 shall be performed  in a manner to cause a minimum of
disturbance to the existing tenants  and
occupants of the premises.

 

12.06                 The Construction
Period.  At the conclusion of the
preparation period and upon the filing of the permit application(s)  and during the construction period, the
Lessee shall pay to the Lessor the monthly sum of Five Thousand Dollars
($5,000.00) plus 1/12 of the annual real estate taxes assessed against the
demised premises.

 

12.07                 When the
Lessee receives all the approvals referenced in Paragraph

 

14

 

12.01, it shall
diligently commence to perform all work deemed necessary by it to rehabilitate
and rebuild the land and the buildings on the demised premises so as to be able
to use the premises for its commercial bank purposes.  (Construction Period).  The
Lessee shall notify the Lessor of the date upon which it is ready to commence
the construction period.

 

12.08                 Not later
than five (5) days after receipt of notice from the Lessee of the submitting of
the application for permits,  the Lessor
at its sole cost and expense shall take all necessary steps to vacate the
premises of all its current Lessees. 
When the premises are fully vacated, the Lessor shall notify the Lessee
and within seven (7) business days following receipt of such notice, the Lessee
shall commence to construct its renovations to the premises.  At all times prior to the building, the
Lessee, its agents, employees and contractors may enter the premises provided
there is no disturbance of the current Lessees.  The Lessee, after giving 30 days notice to Lessor, may terminate
this Lease if it is unable to begin its construction work in or within
ninety  (90) days from the date of the
submission of the application for permits.

 

Executed as a sealed
instrument on the day and date first above 
written.

 

 

	
   

  	
  Lessor:

  
	
   

  	
  Lally II Realty Trust

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ John J.
  McArdle, III

  	
   

  
	
   

  	
  John J. McArdle, III
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Lessee:

  
	
   

  	
  Enterprise Bank and
  Trust Company

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Robert R.
  Gilman

  	
   

  
	
   

  	
  Robert R. Gilman

  
	
   

  	
  Its Senior
  Vice-President

  
				

 

15Exhibit
10.32

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement
(this “Agreement”), dated as of April 1, 2004 (the “Effective Date”), is
made by and among Enterprise Bancorp, Inc., a Massachusetts corporation (the
“Company”), and its wholly owned subsidiary, Enterprise Bank and Trust Company,
a Massachusetts trust company with its main office in Lowell, Massachusetts
(the “Bank”) (the Bank and the Company being collectively referred to herein as
the “Employers”), and John P. Clancy Jr., an individual residing at 11
Tanglewood Drive, Chelmsford, Massachusetts (the “Executive”).  This Agreement shall be effective as of the
date hereof (the “Effective Date”).

 

WHEREAS, the Employers
desire to continue to employ the Executive as President and Treasurer of the
Company and Executive Vice President and Treasurer of the Bank and to enter
into an employment agreement embodying the terms of such relationship;

 

AND WHEREAS, the
Executive is willing to continue to be employed as President and Treasurer of
the Company and Executive Vice President and Treasurer of the Bank on the terms
set forth herein;

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants herein contained, and for
other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Employers and the Executive hereby agree as follows:

 

1.                                       Definitions.

 

1.1                                 “Affiliate”
means any Person effectively controlling, effectively controlled by or
effectively under common control with the Employers.

 

1.2                                 “Board”
means the board of directors of the Company or the Bank, as the case may be.

 

1.3                                 “Cause”
means, when used with respect to the termination of the employment of the
Executive by the Employers, termination due to (a) the Executive’s willful and
continued failure to substantially perform his employment duties (other than
any such failure resulting from the Executive’s incapacity due to physical or
mental illness) or (b) the Executive’s willfully engaging in conduct which is
demonstrably and materially injurious to the Company or the Bank, monetarily or
otherwise.  For purposes of this
definition, no act, or failure to act, on the part of the Executive shall be
deemed “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or omission was in the
best interests of the Company or the Bank.

 

1.4                                 “Change
in Control” has the same meaning as defined in the Company’s 2003 Stock
Incentive Plan, as may be amended and in effect from time to time.

 

1.5                                 “Code”
means the Internal Revenue Code of 1986, as amended, and as in effect from time
to time, and/or any successor code thereto.

 

1.6                                 “Date
of Termination” means the date specified in the Notice of Termination (as such
term is defined in Section 6.8 of this Agreement) or such date that the

 

 

Executive’s employment
terminates if such termination does not require or otherwise depend upon a
prior written notice by the Employers or the Executive, as the case may be,
under the terms of this Agreement; provided, however, that if, within thirty
(30) calendar days after any Notice of Termination is given, the party
receiving such Notice of Termination notifies the other party in writing that a
dispute exists concerning the termination of employment that is the subject of
such Notice of Termination, then the Date of Termination shall be the date on
which such dispute is finally resolved, either by mutual written agreement of
the parties, by a binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction, including all appeals, unless the
time for appeal therefrom has expired and no appeal has been perfected;
provided, further, however, that the Date of Termination shall (a) in no case
be later than the date on which the Term of Employment (as such term is defined
in Section 3 of this Agreement) expires, and (b) be extended by a notice
of dispute as provided above only if such notice is given in good faith and the
party giving such notice pursues the resolution of such dispute with reasonable
diligence.

 

1.7                                 “Good Reason” means, and shall be deemed
to exist if, (a) without the written consent of the Executive, (i) the
Employers fail to appoint or reappoint the Executive as President and Treasurer
of the Company or Executive Vice President and Treasurer of the Bank, (ii)
there occurs any material change by the Employers to the Executive’s function,
duties or responsibilities as set forth in Section 4.1 of this Agreement,
which change would cause the Executive’s position with the Employers to become
one of lesser responsibility, importance or scope from the position and
attributes thereof as set forth in Section 4.1 of this Agreement, (iii)
there occurs any material breach of this Agreement by the Employers or (iv) the
Employers fail to obtain a satisfactory agreement from any successor(s) to
assume and agree to perform the Employers obligations under this Agreement, or
(b) a Change in Control occurs, whether or not the Executive has consented , in
writing or otherwise, to such Change in Control.

 

1.8                                 “Highest
Annual Compensation” means, as determined as of any Date of Termination, the
sum of (a) the highest per annum rate of base salary paid by the Employers to
the Executive at any time during the Term of Employment prior to such Date of Termination,
(b) the highest amount of commission or other compensation (which is not
otherwise included in the base salary and bonus amounts referred in clauses (a)
and (c) hereof) paid by the Employers to the Executive with respect to any
fiscal year of the Employers during the Term of Employment prior to such  Date of Termination, and (c) the highest
annual incentive compensation or other bonus amount paid by the Employers to
the Executive (or which would have been paid but for an election by the
Executive to defer payment to a later period) with respect to any fiscal year
of the Employers during the Term of Employment prior to such Date of
Termination.

 

1.9                                 “Parent”
means any Person which has a direct or indirect legal or beneficial ownership
interest in the Employers, but only if any such Person owns or controls,
directly or indirectly, securities possessing at least 50 percent of the total
combined voting power of all classes of securities of the Employers.

 

1.10                           “Person”
means any natural person or any bank, trust company, credit union, corporation,
firm, unincorporated organization, association, partnership, limited liability
company, trust, estate, joint venture or other business organization or entity.

 

2

 

1.11                           “Subsidiary”
means any Person (other than the Company or the Bank) in which the Employers or
any Parent has a direct or indirect legal or beneficial ownership interest, but
only if the Company or the Parent, as the case may be, owns or controls,
directly or indirectly, securities possessing at least 50 percent of the total
combined voting power of all classes of securities in any such Person.

 

1.12                           “Retirement”
means the termination of the Executive’s employment with the Employers upon the
initiative of the Executive at any time after the Executive attains the age of
65 years old, other than (a) a termination due to death, (b) a termination for
Good Reason or (c) a termination upon the expiration of the Term of Employment.

 

2.                                       Employment.  Subject to the terms and provisions set
forth in this Agreement, the Employers, during the Term of Employment, agree to
employ the Executive as President and Treasurer of the Company and Executive
Vice President and Treasurer of the Bank and the Executive hereby accepts such
employment. The parties acknowledge and agree that the Executive’s employment
by the Employers under this Agreement may not be terminated for any reason
other than as set forth in Section 6 below prior to the expiration of the
Term of Employment.

 

3.                                       Term
of Employment.  The term of
employment under this Agreement shall commence as of the Effective Date and,
subject to extension as provided in this Section 3 or earlier termination
as provided under Section 6 of this Agreement, shall continue through
March 31, 2006 (the “Term of Employment”).  As of the first day of each month of April during which this
Agreement remains in effect (each such day a “Renewal Date”), a one-year
extension of the then current Term of Employment shall automatically be
effected (for example, on April 1, 2005, the Term of Employment shall be
extended from a term ending on March  31, 2006 to a term ending on
March 31, 2007).  Either the
Employers or the Executive may give written notice to the other on or prior to
any given Renewal Date of the intent of the party giving such notice to
terminate this Agreement at the expiration of the two-year period commencing on
such Renewal Date.  Upon the delivery by
either party of any such notice, the Term of Employment shall no longer be
subject to the automatic one-year extension provided for herein, but rather
shall expire upon the conclusion of such final two-year period.

 

4.                                       Positions,
Responsibilities and Duties.

 

4.1                                 Positions
and Duties.  During the Term of
Employment, the Executive shall be employed and shall serve as President and
Treasurer of the Company and Executive Vice President and Treasurer of the
Bank.  In such positions, the Executive
shall have the duties, responsibilities and authorities as determined and
designated from time to time by the Chairman and Chief Executive Officer of the
Employers or the Board and as otherwise provided in the bylaws of the
Employers.  The Executive shall serve
under the direction of, and report only to, the Chairman and Chief Executive Officer
of the Employers.  Notwithstanding the
above, the Executive shall not be required to perform any duties and
responsibilities which would result in the Employers’ or the Executive’s
noncompliance with, or any other violation of, any applicable law, regulation,
regulatory policy or other regulatory requirement.

 

3

 

4.2                                 Attention
to Duties and Responsibilities. 
During the Term of Employment, the Executive shall, except for periods
of absence occasioned by illness, vacation in accordance with Section 5.6
of this Agreement, and any other reasonable leaves of absence in accordance
with any applicable policies, programs, procedures or practices of the
Employers, devote substantially all of his business time to the business and
affairs of the Employers and the Executive shall use his best efforts, business
skills, ability and fidelity to perform faithfully and efficiently the duties
and responsibilities contemplated by this Agreement; provided, however,
that the Executive shall be allowed, to the extent such activities do not
present a conflict of interest or significantly interfere with the performance
by the Executive of his duties and responsibilities hereunder, (a) to manage
the Executive’s personal financial affairs, including his personal investment
portfolio, and (b)(i) to serve on boards of directors or trustees or committees
of civic or charitable organizations or trade associations, and (ii) after
obtaining the consent of the Board, as evidenced by a formally adopted vote or
resolution of the Board and under the terms and conditions specified in any
such vote or resolution, to serve on the board of directors or trustees or
other governing body of any company or other organization or  association or to serve as a general partner
or other type of active manager in any partnership or other type of business
venture; provided, further, however, that all offices or
positions which the Executive currently holds or has held prior to the date of
this Agreement and any other that may be set forth in a schedule attached
to this Agreement are hereby acknowledged by the Employers and designated as
currently consented to positions.

 

5.                                       Compensation
and Other Benefits.

 

5.1                                 Base
Salary.  During the Term of
Employment, the Executive shall receive a base salary of One Hundred
Fifty-Eight Thousand Four Hundred and 00/100 Dollars ($158,400.00) per annum
(such per annum amount being referred to herein as the Executive’s “Base
Salary”), payable in accordance with the Employers’ normal payroll
practices.  The Executive’s Base Salary
shall be reviewed annually by the Board for increase (but not any decrease) in
the Board’s sole discretion.  The
Executive’s Base Salary as may be so increased from time to time during the
Term of Employment shall then constitute the Executive’s “Base Salary” for
purposes of this Agreement.

 

5.2                                 Annual
Bonus.  During the Term of
Employment, the Executive shall be entitled to participate in an equitable
manner with other executive officers of the Employers in such discretionary
bonus payment or awards as may be authorized, declared and paid by the Board to
the Employers’ executive employees.  No
other compensation or additional benefits provided for in this Agreement shall
be deemed to be a substitute for the Executive’s right to receive such bonuses
if, when and as declared and paid by the Board.

 

5.3                                 Incentive,
Retirement, and Savings Plans. 
During the Term of Employment, the Executive shall participate in all
incentive, pension, retirement, savings, stock option and other stock grant and
equity compensation plans, as well as all other employee benefit plans and
programs, which may be maintained from time to time by the Employers for the
benefit of senior executives and/or other employees of the Employers.

 

4

 

5.4                                 Welfare
Benefit Plans.  During the Term of
Employment, the Executive and his spouse and other eligible dependents shall
participate in, and be covered by, all of the health and other welfare benefit
plans and programs that may be maintained from time to time by the Employers
for the benefit of senior executives and/or other employees of the Employers.

 

5.5                                 Expense
Reimbursement.  During the Term of
Employment, the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses, including reasonable business travel expenses,
incurred by the Executive in performing his duties and responsibilities under
this Agreement in accordance with the policies, programs, procedures and practices
of the Employers as in effect at the time the expense was incurred, as the same
may be changed from time to time.

 

5.6           Fringe Benefits; Automobile.  During the Term of Employment, the Executive
shall be eligible to benefit from such fringe benefits and perquisites, in
accordance with the policies, programs, 
procedures and practices of the Employers, as may be in effect and
provided from time to time to senior executives and/or other employees of the
Employers, and shall be entitled to the use of an automobile, of a type
commensurate with the Executive’s office and standing, at the Employers’
expense.

 

6.                                       Termination.

 

6.1                                 Termination
Due to Death.  In the event of the
Executive’s death during the Term of Employment, the Term of Employment shall
thereupon end and his estate or other legal representative, as the case may be,
shall, subject to Section 6.11 of this Agreement, only be entitled to:

 

(a)                                  Base
Salary continuation at the rate in effect (as provided in Section 5.1 of
this Agreement) on the Date of Termination for a period of six months
commencing on such Date of Termination or, if the Board so determines in its
sole discretion and in lieu of such six-month salary continuation, a lump sum
payment equal in amount to such six-month Base Salary continuation; provided,
however, that if the Executive’s death during the Term of Employment occurs
after, or within one year prior to, a Change in Control, then the Executive’s
estate or other legal representative shall receive, in lieu of the payments required
under this Section 6.1(a) and subject to Section 6.9 below, the full
lump sum payment required under Section 6.4(a) below in the event of a
termination of the Executive’s employment after, or within one year prior to, a
Change in Control (and, in the case of the Executive’s death within one year
prior to a Change in Control, any amounts paid under this Section 6.1(a)
prior to the Change in Control shall be taken into account in determining the
total amount payable to the Executive’s estate or other legal representative as
a result of the Change in Control);

 

(b)                                 any
Base Salary accrued but not yet paid as of the Date of Termination;

 

(c)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

5

 

(d)                                 reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(e)                                  payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(f)                                    any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures and practices of
the Employers;

 

(g)                                 continuation
of all health and other welfare benefits provided under Section 5.4 of
this Agreement for the benefit of the Executive’s spouse and other eligible
dependents at the level in effect on the Date of Termination and at no cost to
the Executive’s spouse and such other eligible dependents for a period
commencing on the Date of Termination and ending, with respect to the
Executive’s spouse, on the earlier of her death or remarriage and, with respect
to any other eligible dependent of the Executive, on such date as such
dependent reaches the age of legal emancipation in accordance with the laws of
the Commonwealth of Massachusetts (or, if such continuation of health or other
welfare benefits is not permitted by applicable law, the Employers shall
provide the economic equivalent in lieu thereof); and

 

(h)                                 any
rights to indemnification in accordance with Section 10 of this Agreement.

 

6.2                                 Suspension
for Disability.

 

(a)                                  If,
during the Term of Employment, the Executive shall either qualify to receive
disability benefits under any group long-term disability plan then maintained
by the Employers or, if no such plan is maintained by the Employers, have been
absent from his duties with the Employers on a full-time basis due to physical
or mental illness for six (6) consecutive months, and in either case shall not
have returned to the full-time performance of his duties within thirty (30)
days after written notice of potential suspension has been given to the
Executive by the Employers, then the Executive’s employment shall be deemed to
be suspended on the basis of disability (a “Suspension for Disability”).

 

(b)                                 If
a Suspension for Disability occurs during the Term of Employment, the Employers
shall pay the Executive an amount equal, on a per annum basis, to seventy-five
percent (75%) of the Executive’s Highest Annual Compensation as determined on
the effective date of the Suspension for Disability (assuming, for purposes of
such determination, that the effective date of the Suspension for Disability is
the Date of Termination as referred to in the definition of Highest Annual
Compensation), such amount to be paid out in equal periodic installments in
accordance with the Employers’ ordinary payroll practices during the period
that such payments are required to be made

 

6

 

under this
Section 6.2(b).  These payments
shall commence on the first ordinary payroll payment date of the Employers
after the effective date of the Executive’s Suspension for Disability and will
end on the earliest to occur of the following: 
(i) the date on which the Executive returns to full-time employment with
the Employers; (ii) the Executive’s death; or (iii) the termination by either
party, or the expiration, of the Term of Employment in accordance with the
terms of this Agreement.  After a Suspension
for Disability occurs, the Employers shall be free to fill the Executive’s
positions.  Upon the Executive being
able to return to full-time employment before any termination or the expiration
of the Term of Employment, the Executive shall, at his option, (i) assume the
President and Treasurer position of the Company and Executive Vice President
and Treasurer position of the Bank or, if another individual is then holding
either of such positions and the Executive is not reappointed to both such
positions, assume such other position(s) as may be available with the Employers
at the same Base Salary as was in effect at the time the Suspension for
Disability had commenced and otherwise continue in the employ of the Employers
in accordance with the terms of this Agreement or (ii) if another individual is
then holding either of such positions and the Executive is not reappointed to
both such positions, exercise his right to terminate this Agreement for Good
Reason under Section 6.4 of this Agreement.  The disability payments to be paid to the Executive during a
Suspension for Disability under this Section 6.2(b) shall be in addition
to any payments or other benefits payable to the Executive under any qualified
or nonqualified retirement plans or programs maintained by the Employers but
shall be reduced by any payments received by the Executive during such
Suspension for Disability under any group long-term disability plan maintained
by the Employers.  Notwithstanding any
other provision contained in this Agreement to the contrary, the occurrence of
a Suspension of Disability shall not in any way prevent or otherwise limit the
parties’ exercising any of their respective rights to terminate the Term of
Employment at any time in accordance with the terms of this Agreement.

 

(c)                                  The
Employers shall cause to be continued during any Suspension for Disability all
life, health and other welfare coverages and benefits as were maintained by the
Employers for the benefit of the Executive and his spouse and other eligible
dependents prior to the occurrence of such Suspension for Disability, such
continuation to continue, subject to Section 6.2(d) of this Agreement,
until the expiration of the Term of Employment.

 

(d)                                 Notwithstanding
any other provision to the contrary in this Section 6.2, there shall be no
reduction in the compensation (except as otherwise provided in
Section 6.2(b) above), accrued benefits or pension granted or accruing to
the Executive during the period of any Suspension for Disability and there
shall be no abrogation or limitation of any of the other provisions of this
Agreement that grant rights to the Executive or the Executive’s spouse or other
eligible dependents or the Executive’s estate following the Executive’s death,
Retirement or other applicable termination of employment during the Term of
Employment as a result of any Suspension for 
Disability.

 

7

 

6.3                                 Termination
by the Board for Cause.

 

(a)                                  The
Board may terminate the Executive’s employment hereunder for Cause, as provided
in Section 6.3(b) below.  If the
Board terminates the Executive’s employment under this Section 6.3 for
Cause, the Term of Employment shall thereupon end as set forth below and the
Executive shall, subject to Section 6.11 of this Agreement, only be
entitled to:

 

(i)            any Base Salary
accrued but not yet paid as of the Date of Termination;

 

(ii)           any bonus actually
awarded or commissions actually earned, but not yet paid, as of the Date of
Termination;

 

(iii)          reimbursement for all
expenses (under Section 5.5) incurred as of the Date of Termination, but
not yet paid as of the Date of Termination; and

 

(iv)          payment of the per diem
value of any unused vacation days that   
have accrued during the Term of Employment prior to the Date of
Termination and the unused, unaccrued portion of any vacation days available
through the end (but not beyond) of the calendar year in which the Date of
Termination occurs.

 

(b)                                 In
determining Cause, the alleged acts or omissions of the Executive must be
confirmed beyond a reasonable doubt by not less than two-thirds of the Board
(meaning, for purposes of this Section 6.3(b), the Board excluding the
Executive and any other directors of the Employers who are alleged to have been
involved or otherwise to have an interest in any of such alleged acts or
omissions of the Executive) at a meeting duly called and held for the purpose
of the Board’s making such determination (the “Determination Meeting”). In the
event of such a confirmation by  the
Board, the Employers shall notify the Executive that the Employers intend to
terminate the Executive’s employment for Cause under this Section 6.3 (the
“Confirmation Notice”).  The
Confirmation Notice shall specify the act(s), or omission(s), upon the basis of
which the Board has confirmed the existence of Cause and must be delivered to
the Executive within ten (10) days after the date on which the Determination
Meeting has been held.  If the Executive
notifies the Employers in writing (the “Opportunity Notice”) within ten (10)
days after the Executive has received the Confirmation Notice, the Executive
(together with counsel) shall be provided one opportunity to meet with the
Board (or a sufficient quorum thereof) to discuss such act(s) or
omission(s).  Such opportunity to meet
with the Board shall be fixed and shall occur on a date selected by the Board
(such date being not less than ten (10) nor more than thirty (30) days after
the Employers receive the Opportunity Notice from the Executive).  Such meeting (the “Final Meeting”) shall
take place at the principal offices of the Employers or such other location as
agreed to by the Executive and the Employers. 
During the period commencing on the date on which notice of the
Determination Meeting is duly given to the Board and ending either on the date
of the Determination Meeting, if no determination of Cause is made at the
Determination Meeting, or on the Date of Termination, and not withstanding
anything to

 

8

 

the contrary in this
Agreement, the Executive shall be suspended from employment with the Employers
(with continuing payment of Base Salary and continuation of benefits in
accordance with Section 5 of this Agreement, to the extent such payments
and benefits are not prohibited by applicable law, regulation, regulatory
policy or other regulatory requirement), and the Board may, during such
suspension period, reasonably limit the Executive’s access to the principal
offices and any other premises of the Employers and/or the Executive’s access
to any of the Employers’ assets or personnel. 
If the Board properly sets the date of the Final Meeting and if the
Board (or a sufficient quorum thereof) attends the Final Meeting and in good
faith does not rescind its confirmation of Cause at the Final Meeting or if the
Executive fails to attend the Final Meeting for any reason, the Executive’s
employment by the Employers shall, immediately upon the closing of the Final
Meeting and the delivery to the Executive of the Notice of Termination, be
terminated for Cause under this Section 6.3.  If the Executive does not respond in writing to the Confirmation
Notice in the manner and within the time period specified in this
Section 6.3, the Executive’s employment with the Employers shall, on the
eleventh day after the receipt by the Executive of the Confirmation Notice, be
terminated for Cause under this Section 6.3.  In the event of any dispute hereunder, the Executive shall be
entitled, to the extent not prohibited by applicable law, regulation,
regulatory policy or other regulatory requirement, until the earliest to occur
of (i) the Date of Termination, (ii) the expiration of the then current Term of
Employment or (iii) the resolution of such dispute, to be paid his Base Salary
in accordance with the Employers’ ordinary payroll practices and continue to
receive all other benefits to be provided to the Executive pursuant to
Section 5 hereof, and there shall be no reduction whatsoever of any
amounts subsequently paid to the Executive upon resolution of such dispute as a
result of, or in respect to, such interim payments or coverage.  The procedure set forth in this
Section 6.3 to determine the existence of Cause shall at all times be
subject to the requirements of applicable law, regulation, regulatory policy or
other regulatory requirements.

 

6.4                                 Termination
by Employers Without Cause or by Executive for Good Reason.  The Employers may terminate the Executive’s
employment for any reason and without Cause, or for no reason at all, at any
time during the Term of Employment upon sixty (60) days prior written notice to
the Executive.  The Executive may
terminate his employment for Good Reason at any time during the Term of
Employment upon sixty (60) days prior written notice to the Employers.  If the Employers terminate the Executive’s
employment hereunder without Cause or the Executive terminates his employment
hereunder for Good Reason, then the Term of Employment shall thereupon end and
the Executive shall, subject to Section 6.11 of this Agreement, only be
entitled to:

 

(a)                                  an
aggregate amount equal to two times the Executive’s Highest Annual
Compensation, such amount to be paid out in equal periodic installments in
accordance with the Employers’ ordinary payroll practices over the two-year
period commencing on the first payroll payment date after the Date of
Termination; provided, however, that if such termination by either the
Employers or the Executive occurs at any time during the Term of Employment
after, or within one year prior to, a Change in Control, then the Executive
shall, subject to Section 6.9 below, be entitled to a cash lump sum
payment

 

9

 

equal to two (2) times
the Executive’s Highest Annual Compensation, which lump sum shall be paid
within thirty (30) days following the later of the Date of Termination or the
date of the Change in Control (and, in the case of any such termination within
one year prior to a Change in Control, any amounts paid under this
Section 6.4(a) prior to the Change in Control shall be taken into account
in determining the total amount payable to the Executive as a result of the
Change in Control);

 

(b)                                 any
Base Salary accrued but not yet paid as of the Date of Termination;

 

(c)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(d)                                 reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(e)                                  payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(f)                                    any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures or practices of
the Employers;

 

(g)                                 continuation
of the welfare benefits of the Executive and his spouse and other eligible
dependents at the level in effect (as provided for by Section 5.4 of this
Agreement) on, and at the same out-of-pocket cost to the Executive as of, the
Date of Termination for the two-year period commencing on the Date of
Termination (or, if such continuation is not permitted by applicable law or if
the Board so determines in its sole discretion, the Employers shall provide the
economic equivalent in lieu thereof);

 

(h)                                 reimbursement
for the reasonable fees of a professional out-placement service selected by the
Executive within ninety (90) days after the Date of Termination; and

 

(i)                                     any
rights to indemnification in accordance with Section 10 of this Agreement.

 

In the event of
any dispute hereunder, the Executive shall be entitled until the earliest to
occur of (i) the Date of Termination, (ii) the expiration of the then current
Term of Employment, or (iii) the resolution of such dispute, to be paid his
Base Salary in accordance with the Employers’ ordinary payroll practices and
continue to receive all other benefits to be provided to the Executive pursuant
to Section 5 hereof, and there shall be no reduction whatsoever of any
amounts subsequently paid to the Executive upon resolution of such dispute as a
result of, or in respect to, such interim payments or coverage.

 

10

 

6.5                                 Voluntary
Termination.

 

(a)                                  During the Term of Employment, the
Executive may effect, upon sixty (60) days prior written notice to the
Employers, a Voluntary Termination of his employment hereunder and thereupon
the Term of Employment shall end.  A
“Voluntary Termination” shall mean a termination of employment by the Executive
on his own initiative other than (i) a termination due to death, (ii) a
termination for Good Reason, (iii) a termination due to Retirement, or (iv) a
termination upon expiration of the Term of Employment.

 

(b)                                 Upon
a Voluntary Termination, the Executive shall, subject to Section 6.11 of
this Agreement, only be entitled to:

 

(i)                                     Base
Salary accrued but not yet paid as of the Date of Termination;

 

(ii)                                  any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(iii)                               reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(iv)                              payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(v)                                 any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures or practices of
the Employers; and

 

(vi)                              any
rights to indemnification in accordance with Section 10 of this Agreement;

 

provided, however,
that if a Voluntary Termination occurs within one year prior to a Change in
Control, then the Executive shall receive, in addition to all of the payments
and benefits required under this Section 6.5(b) and subject to
Section 6.9 below, the full lump sum payment required under
Section 6.4(a) above in the event of a termination of the Executive’s
employment after, or within one year prior to, a Change in Control, which lump
sum shall be paid within thirty (30) days following the date of the Change in
Control.

 

6.6                                 Termination
Due to Retirement.  The Executive
may terminate his employment hereunder on the basis of his Retirement upon
sixty (60) days prior written notice to the Employers.  If, during the Term of Employment, the
Executive’s employment is so terminated due to Retirement, the Term of
Employment shall thereupon end and the Executive shall, subject to
Section 6.11 of this Agreement, only be entitled to:

 

(a)                                  Base
Salary accrued but not yet paid as of the Date of Termination;

 

11

 

(b)                                 any
bonus actually awarded or commissions actually earned, but not yet paid, as of
the Date of Termination;

 

(c)                                  reimbursement
for all expenses (under Section 5.5) incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;

 

(d)                                 payment
of the per diem value of any unused vacation days that have accrued during the
Term of Employment prior to the Date of Termination and the unused, unaccrued
portion of any vacation days available through the end (but not beyond) of the
calendar year in which the Date of Termination occurs;

 

(e)                                  any
other compensation and benefits as may be provided in accordance with the terms
and provisions of any applicable plans, programs, procedures or practices of
the Employers;

 

(f)                                    continuation
of the welfare benefits of the Executive, his spouse and other eligible
dependants, if any, at the level in effect (as described in Section 5.4 of
this Agreement) on, and at the same out-of-pocket cost to the Executive as of,
the Date of Termination for the one-year period commencing on the Date of
Termination (or, if such continuation of benefits is not permitted by
applicable law or if the Board so determines in its sole discretion, the
Employers shall provide the economic equivalent in lieu thereof); and

 

(g)                                 any
rights to indemnification in accordance with Section 10 of this Agreement;

 

provided, however,
that if a termination due to Retirement occurs within one year prior to a
Change in Control, then the Executive shall receive, in addition to all of the
payments and benefits required under this Section 6.6 and subject to
Section 6.9 below, the full lump sum payment required under Section 6.4(a)
above in the event of a termination of the Executive’s employment after, or
within one year prior to, a Change in Control, which lump sum shall be paid
within thirty (30) days following the date of the Change in Control.

 

6.7                                 No
Obligation to Mitigate; Offset Under Certain Circumstances.  In the event of any termination of the
Executive’s employment under this Section 6, the Executive shall be under
no obligation to seek other employment or to mitigate damages.  If any termination of the Executive’s employment
occurs after a Change in Control, then there shall be no offset against any
amounts due the Executive under this Agreement for any reason, including,
without limitation, on account of any remuneration attributable to any
subsequent employment that the Executive may obtain.  If any termination of the Executive’s employment occurs prior to
a Change in Control, then the amounts that may be payable by the Employers to
the Executive during any applicable period following the Date of Termination
and prior to the date of any Change in Control under Sections 6.4(a) or 7.3 of
this Agreement may be adjusted, so that any payment paid to the Executive by
the Employers during any such period shall equal the difference between the
total amount that the Employers would otherwise be required to pay to

 

12

 

the Executive for such
period pursuant to Sections 6.4(a) or 7.3, as applicable, and the total amount
of any payments received by the Executive from any third party(ies) during such
period.

 

6.8                                 Notice
of Termination.  Any termination of
the Executive’s employment under this Section 6 requiring advance written
notice shall be communicated by a notice of termination to the other party
hereto given in accordance with Section 11.3 of this Agreement (the
“Notice of Termination”).  The Notice of
Termination, in the case of a termination by the Employers for Cause, or a
termination by the Executive for Good Reason, shall indicate the specific
termination provision in this Agreement relied upon and set forth in reasonable
detail the dates, facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.

 

6.9                                 Code
Section 280G Reduction. 
Anything in this Agreement or in any other agreement, contract,
understanding, plan or program entered into or maintained by the Employers to
the contrary notwithstanding, in the event it shall be determined that any
payment or distribution by the Employers to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (collectively, the “Payments”), would
be subject to the excise tax imposed by Section 4999 of the Code, and/or
any successor provision or section thereto (such excise tax, together with
any interest or penalties incurred by the Executive with respect to such excise
tax, collectively, the “Excise Tax”), and if the Payments less the Excise Tax
would be less than the amount of the Payments that would otherwise be payable
to the Executive without imposition of the Excise Tax, then, to the extent
necessary to eliminate the imposition of the Excise Tax (and taking into
account any reduction in the Payments provided by reason of Section 280G of
the Code in any such other agreement, contract, understanding, plan or
program), the cash and non-cash payments and benefits payable to the Executive
shall be reduced (with the executive being provided with the amount of each
payment and benefit as calculated by the Employers and given ten (10) business
days in which to prioritize the order of reduction of each such payment or
benefit); but only if, by reason of any such reduction, the Payments with any
such reduction shall exceed the Payments less the Excise Tax without any such
reduction.  For purposes of this
Section 6.9, (i) no portion of the Payments, the receipt or enjoyment of
which the Executive shall have effectively waived in writing prior to the Date
of Termination, shall be taken into account, (ii) no portion of the Payments
shall be taken into account that, in the opinion of tax counsel selected in
good faith by the Employers, does not constitute a “parachute payment” within
the meaning of Section 280G(b)(2) of the Code, including without limitation
by reason of Section 280G(b)(4)(A) of the Code, (iii) any payments and/or
benefits under this Agreement or otherwise for services to be rendered on or
after the effective date of a Change in Control shall be reduced only to the
extent necessary so that such payments and/or benefits in their entirety
constitute reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject
to disallowance as deductions, in the opinion of the tax counsel referred to in
the immediately preceding clause (ii) of this sentence, and (iv) the value of
any non-cash payment or benefit or any deferred payment or benefit included in
the Payments shall be determined by the Employers’ independent auditors in
accordance with the principles of Sections 280G(d)(3) and 280G(d)(4) of the
Code and the applicable regulations or proposed regulations under the
Code.  Except as otherwise provided in
this Section 6.9, the foregoing calculations and determinations shall be
made in good faith by the Employers and shall be conclusive and binding

 

13

 

upon the parties.  The Employers shall pay all costs and
expenses incurred in connection with any such calculations or determinations.

 

6.10                           Payment.  Except as otherwise provided in this
Agreement, any payments to which the Executive shall be entitled to under this
Section 6, including, without limitation, any economic equivalent of any
benefit, shall be made, to the extent practicable, within five (5) business
days following the Date of Termination.

 

6.11                           Bank
Regulatory Limitations.  Any
payments made to the Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k)
and any applicable regulations promulgated thereunder.  In addition, to the extent required by
applicable law, regulation, regulatory policy 
or other regulatory requirement, the aggregate amount and/or value of
the compensation paid as a result of any termination of the Executive’s
employment with the Employers, regardless of the reason for any such
termination of employment, shall not exceed the limit prescribed by such
applicable law, regulation, regulatory policy or other regulatory requirement.

 

6.12                           Option
to Serve as Consultant.

 

(a)                                  In
lieu of the Employers terminating the Term of Employment without Cause or the
Executive terminating the Term of Employment for any reason, the parties may
agree that the Executive shall serve as a consultant to the Employers for the
balance of the Term of Employment (as such may be extended pursuant to
Section 3 of this Agreement) in accordance with the terms set forth in
this Section 6.12.  If the
Employers and the Executive so agree that the Executive shall serve as a
consultant to the Employers hereunder, the Executive shall render such services
of an advisory or consultative nature as the Employers may reasonably require
of him from time to time and he shall assist the Employers in their relations
with their employees and customers, such that the Employers shall have the
benefit of the Executive’s experience and knowledge of the Employers’ business
and operations, his reputation and contacts in the industry generally as well
as in the Employers’ market area and his general business experience.

 

(b)                                 During
the period of the Executive’s providing the consulting services contemplated by
Section 6.12(a) above (the “Consulting Period”), the Executive shall
devote approximately one-half of his time during normal business hours to the
business and affairs of the Employers, and shall receive as compensation
therefor an amount equal, on a per annum basis, to fifty percent (50%) of the
Executive’s Highest Annual Compensation as determined as of the date upon which
the Consulting Period commences (assuming, for purposes of such determination,
that the date upon which the Consulting Period commences is the Date of
Termination as referred to in the definition of Highest Annual Compensation),
such amount to be paid out in equal periodic installments in accordance with
the Employers’ ordinary payroll practices during the Consulting Period.

 

(c)                                  During
the Consulting Period, the Executive shall be deemed to be an employee of the
Employers and, on this basis, the Executive shall be entitled to a

 

14

 

continuation of all of
the compensation, payments and other benefits provided to him, his spouse and
other eligible dependents pursuant to Sections 5.3 through 5.6 of this
Agreement in accordance with the terms thereof.  During the Consulting Period, there shall be no affirmative
obligation on the part of the Executive to serve or to continue to serve as a
member of the Board, and any such membership shall be in accordance with the
mutual agreement of the Executive and the Employers.

 

(d)                                 The
Consulting Period may be terminated at any time by either the Employers or the
Executive for any reason, or for no reason at all, upon sixty (60) days prior
written notice to the other party.  If
the Consulting Period is terminated by either the Employers or the Executive
prior to the occurrence of a Change in Control, then, so long as the Consulting
Period has not been terminated by the Employers for Cause and subject to any
applicable provisions of Section 6.12(e) below, such termination shall be
deemed to have occurred, effective as of the date on which the Consulting
Period terminates, on the grounds that would have applied at the time of the
parties’ first entering into the consulting arrangement provided for in this
Section 6.12, if the Employers or the Executive, as the case may be, had
exercised the right of termination then available to such party, and the
Executive shall be entitled to receive all of the payments and benefits set
forth in the applicable provisions of Section 6 of this Agreement on
account of such termination, except that any reference to Base Salary in any
such applicable provision shall mean the amount of annual compensation required
to be paid to the Executive under Section 6.12(b) above; provided,
however, notwithstanding the grounds for termination that may have applied at
the time of the parties’ first entering into the consulting arrangement
provided for in this Section 6.12, if the Employers terminate the
Consulting Period without Cause or the Executive terminates the Consulting
Period for Good Reason (to the extent that the principle of Good Reason may
apply to the Executive’s termination of the Consulting Period pursuant to
clauses (a)(iii) and (a)(iv) of the definition of Good Reason contained above),
then the Executive shall be entitled to receive all of the payments and
benefits set forth in Section 6.4 of this Agreement (including without
limitation Section 6.4(a) above) on account of such termination, except
that the reference to Base Salary in Section 6.4(b) above shall mean the
amount of annual compensation required to be paid to the Executive under
Section 6.12(b) above.  If the
Consulting Period is terminated by either the Employers or the Executive for
any reason, or for no reason at all, following the occurrence of a Change in
Control, then, subject to any applicable provisions of Section 6.12(e)
below, the Executive shall be deemed to have exercised his right to terminate
this Agreement for Good Reason, where such Good Reason is the occurrence of
such Change in Control, effective as of the date on which the Consulting Period
terminates, and the Executive shall be entitled to all of the payments and
benefits set forth in Section 6.4 of this Agreement (including without
limitation Section 6.4(a) above) on account of such termination, except
that the reference to Base Salary in Section 6.4(b) above shall mean the
amount of annual compensation required to be paid to the Executive under
Section 6.12(b) above.  For purposes
of calculating the amount payable to the Executive under Section 6.4(a) of
this Agreement if the Consulting Period is terminated hereunder, to the extent
that any such payment is required, the Executive’s Highest Annual Compensation
shall be determined as of the date on which

 

15

 

the Employers and the
Executive first entered into the consulting arrangement provided for under this
Section 6.12.

 

(e)                                  If
the Consulting Period is terminated as a result of the Executive’s death, then
the Executive’s estate or other legal representative, as the case may be, shall
be entitled to receive the payments and benefits set forth in Section 6.1
of this Agreement, including the payments provided for in Section 6.1(a)
above if the Executive’s death occurs after, or within one year prior to, a
Change in Control, except that the references to Base Salary in Sections 6.1(a)
above, in the case of the Executive’s death prior to a Change in Control, and
6.1(b) above shall mean the amount of annual compensation required to be paid
to the Executive under Section 6.12(b) above.  If the Executive becomes disabled during the Consulting Period,
as such disability is contemplated under Section 6.2(a) of this Agreement,
then all of the terms of Section 6.2 above shall apply, except that the
amount that may be paid to the Executive during any Suspension for Disability
shall equal seventy-five percent (75%) of the amount of the compensation
required to be paid to the Executive under Section 6.12(b) above, the
reference to Base Salary in Section 6.2(b) above shall mean the amount of
annual compensation required to be paid to the Executive under
Section 6.12(b) above, and any and all references in Section 6.2 to
the Executive’s employment, offices, titles, positions or other functions with
the Employers shall mean the consulting arrangement entered into between the
Employers and the Executive pursuant to this Section 6.12.  If the Consulting Period is terminated by
the Employers for Cause, then the Executive shall be entitled to all of the
payments set forth in Section 6.3 of this Agreement, except that the
reference to Base Salary in Section 6.3(a)(i) above shall mean the amount
of annual compensation required to be paid to the Executive under
Section 6.12(b) above.

 

7.                                       Confidential
Information; Noncompetition.

 

7.1                                 Confidentiality.  The Executive shall not, during or after the
period during which he is employed by the Employers, disclose any Confidential
Information (as such term is defined herein) to any Person for any reason or
purpose whatsoever.  The term
“Confidential Information” shall mean all confidential information of or
relating to the Employers and any of their Affiliates, including without limitation
financial information and data, business plans and information regarding
prospects and opportunities (such as, by way of example only, client and
customer lists and acquisition, disposition, expansion, product development and
other strategic plans), but does not include any information that is or becomes
public knowledge by means other than the Executive’s breach or nonobservance of
his obligations described in this Section 7.1.  Notwithstanding the foregoing, the Executive may disclose such Confidential
Information as he may be legally required to do so on the advice of counsel in
connection with any legal or regulatory proceeding; provided, however, that the
Executive shall provide the Employers with prior written notice of any such
required or potentially required disclosure and shall cooperate with the
Employers and use his best efforts under such circumstances to obtain
appropriate confidential treatment of any such Confidential Information that
may be so required to be disclosed in connection with any such legal or
regulatory proceeding.  The Executive’s
obligation to refrain from disclosing any Confidential Information under this
Section 7.1 shall

 

16

 

continue in effect in
accordance with its terms following any termination of this Agreement pursuant
to Section 6 above.

 

7.2                                 Noncompetition.  If the Executive’s employment with the
Employers (including without limitation any employment during a Consulting
Period) is terminated by the Employers or the Executive for any reason, other
than due to death, or for no reason at all or otherwise terminates as a result
of the expiration of the Term of Employment, in any such case prior to a Change
in Control, then during the two-year period following the Date of Termination
or, if a Change in Control occurs at any time during such two-year period, such
shorter period from the Date of Termination up to the date of such Change in
Control, and subject to Section 7.3 hereof, the Executive shall not:  (a) directly or indirectly, whether as
owner, partner, shareholder (other than the holder of 1% or less of the common
stock of any company the common stock of which is listed on a national stock
exchange or quoted on the Nasdaq Stock Market),  be engaged as a consultant, agent, employee or otherwise, engage in
competition with the Employers or any of their Affiliates within a ten (10)
mile radius of any city or town in which the Bank or any Affiliate has a branch
or other office; or (b) hire or attempt to hire, or assist in hiring, any
employees of the Employers or any of their Affiliates, or solicit, encourage or
induce any such employee to terminate his or her relationship with the
Employers or any such Affiliate; or (c) solicit, encourage or induce any
customer or client of the Employers or any of their Affiliates to terminate his
or its relationship with the Employers or any such Affiliate or to do business
with anyone other than the Employers and their Affiliates.

 

7.3                                 Payments.  During the two years or such shorter period
during which the restrictions of Section 7.2 above apply, the Executive
shall be paid, subject to Section 6.7 above, a per annum amount equal to
seventy percent (70%) of the per annum amount required under
Section 6.4(a) of this Agreement in the event of a termination of the
Executive’s employment prior to a Change in Control; provided, however, that,
if the termination of the Executive’s employment that precedes such period of
restriction required under Section 7.2 above has occurred pursuant to
Section 6.4 above, then the Executive shall be paid during such period the
full per annum amount required under Section 6.4(a).  If the period of the restrictions required
under Section 7.2 above follows any termination of a Consulting Period,
then the payments required under this Section 7.3 shall be reduced to a
per annum amount equal to fifty percent (50%) of the per annum amount specified
in Section 6.4(a) of this Agreement, subject to Section 6.7 above and
subject further to any requirement that the full per annum amount under Section 6.4(a)
be paid during such period pursuant to Sections 6.12(d) or 6.12(e) above.  The amount payable under this
Section 7.3 is only payable during the period of restriction that is the
subject of Section 7.2 of this Agreement. 
Inasmuch as such period of restriction shall not apply under any
circumstances after a Change in Control, no amount shall be paid to the
Executive under this Section 7.3 under any circumstances after a Change in
Control (although amounts may otherwise be paid to the Executive, his estate or
other legal representative after a Change in Control under other applicable
provisions of this Agreement).  The
amounts to be paid to the Executive under this Section 7.3 shall be paid
out in equal periodic installments in accordance with the Employers’ ordinary
payroll practices over the two-year or such shorter  period commencing on the first payroll date after the Date of
Termination.

 

17

 

7.4                                 Injunctive
Relief.  The Executive acknowledges
and agrees that the Employers will have no adequate remedy at law, and would be
irreparably harmed, if the Executive breaches or threatens to breach any of the
provisions of this Section 7.  The
Executive agrees that the Employers shall be entitled to equitable and/or injunctive
relief to prevent any breach or threatened breach of this Section 7, and
to specific performance of each of the terms of this Section 7 in addition
to any other legal or equitable remedies that the Employers may have.  The Executive further agrees that he shall
not, in any equity proceeding relating to the enforcement of the terms of this
Section 7, raise the defense that the Employers have an adequate remedy at
law.

 

7.5                                 Special
Severability.  The terms and
provisions of this Section 7 are intended to be separate and divisible
provisions and if, for any reason, any one or more of them is held to be
invalid or unenforceable, neither the validity nor the enforceability of any
other provision of this Agreement shall thereby be affected.

 

8.                                       Arbitration
of Disputes.  Any controversy or
claim arising out of or relating to this Agreement or the breach hereof, other
than an action brought by the Employers for injunctive or other equitable
relief in the enforcement of the Employers’ rights under Section 7 above,
in which case such action may be brought in any court of competent
jurisdiction, shall be settled by arbitration in accordance with the laws of
the Commonwealth of Massachusetts by three arbitrators, one of whom shall be
appointed by the Employers, one by the Executive and the third by the first two
arbitrators.  If the first two
arbitrators cannot agree on the appointment of a third arbitrator, then the
third arbitrator shall be appointed by the American Arbitration Association in
the City of Boston, Massachusetts.  Such
arbitration shall be conducted in the City of Boston, Massachusetts in
accordance with the rules of the American Arbitration Association, except with
respect to the selection of arbitrators which shall be as provided in this
Section 8.  Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.  In the event that it shall be
necessary or desirable for the Executive to retain legal counsel and/or incur
other costs and expenses in connection with the enforcement of any or all of
Executive’s  rights under this
Agreement, the Employers shall pay (or the Executive shall be entitled to
recover from the Employers, as the case may be) the Executive’s reasonable
attorneys’ fees and other reasonable costs and expenses in connection with the
enforcement of said rights (including the enforcement of any arbitration award
in court) regardless of the final outcome, unless and to the extent that the
arbitrators shall determine that the Executive has not acted in good faith or
that under the circumstances recovery by the Executive of all or part of any
such fees and costs and expenses would be inequitable or otherwise unjust.

 

9.                                       Successors.

 

9.1                                 The
Executive.  This Agreement is
personal to the Executive and, without the prior written consent of the
Employers, shall not be assignable by the Executive, except that the
Executive’s rights to receive any compensation or benefits under this Agreement
may be transferred or disposed of pursuant to testamentary disposition,
intestate succession or pursuant to a qualified domestic relations order.  This Agreement shall inure to the benefit of
and be enforceable by the Executive’s heirs, beneficiaries and/or legal
representatives.  In the event of the
Executive’s death prior to the completion by the Employers of all payments due
to the

 

18

 

Executive under this
Agreement, the Employers shall continue to make such payments to the
Executive’s beneficiary(ies) as designated in writing by the Executive to the
Employers prior to his death (or to his estate, if he fails to make such
designation).

 

9.2                                 The
Employers.  This Agreement shall
inure to the benefit of and be binding upon the Employers and their successors
and assigns.  Each of the Company and
the Bank shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of its
businesses and/or assets to assume expressly and agree to perform this
Agreement in the same manner and to the same extent as if no such succession
had taken place.  Failure of either the
Company or the Bank to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation in the same amount and on the same
terms as he would be entitled to hereunder if he terminated this Agreement for
Good Reason following a Change in Control, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed to be the Date of Termination.  As used in this Agreement, “Company,” “Bank”
and “Employers” shall mean the Company, the Bank and the Employers as
hereinbefore defined and any successor to the business and/or assets of either
the Company or the Bank as aforesaid which successor assumes and agrees to
perform this Agreement by operation of law or otherwise.

 

10.                                 Indemnification.  The Executive (and his heirs, executors and
administrators) shall be indemnified and held harmless by the Employers to the
fullest extent permitted by applicable law, regulation, regulatory policy or
other regulatory requirement, against all expenses, liabilities and losses
(including, without limitation, all reasonable attorneys’ fees and all
judgments, fines, excise taxes or penalties and amounts paid or to be paid in
settlement) incurred or suffered by the Executive as a consequence of the
Executive being or having been made a party to, or being or having been
involved in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that the Executive is or was a trustee, director or officer of the Employers or
is or was serving at the request of the Employers as a trustee, director or
officer of another corporation or other entity (including, but not limited to,
a Subsidiary or an Affiliate of the Employers), and such indemnification shall
continue after the Executive shall cease to be an officer, director or
trustee.  The right to indemnification
conferred hereby shall be a contract right and shall also include, to the
extent permitted by applicable law, regulation, regulatory policy or other
regulatory requirement, the right to be paid by the Employers the expenses
incurred in defending any such proceeding in advance of the final disposition
upon receipt by the Employers of an undertaking by or on behalf of the
Executive to repay such amount or a portion thereof, if it shall ultimately be
determined that the Executive is not entitled to be indemnified by the
Employers pursuant hereto or as otherwise authorized by law, regulation,
regulatory policy or other regulatory requirement, but such repayment by the
Executive shall only be in an amount ultimately determined to exceed the amount
to which the Executive was entitled to be indemnified.  The Employers’ acceptance of any such
undertaking by or on behalf of the Executive may not be conditioned upon any
evidence or demonstration by or on behalf of the Executive of any financial
capacity to make any such repayment at the time such undertaking is delivered.

 

19

 

11.                                 Miscellaneous.

 

11.1                           Applicable
Law.  This Agreement shall, to the
extent not superseded by federal law, be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without regard
to principles of conflict of laws.

 

11.2                           Amendments/Waiver.  This Agreement may not be amended, waived,
or modified otherwise than by a written agreement executed by the parties to
this Agreement or their respective successors and legal representatives.  No waiver by any party to this Agreement of
any breach of any term, provision or condition of this Agreement by the other
party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same time, or any prior or subsequent time.

 

11.3                           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed given when received by
hand-delivery to the other party, by facsimile transmission, by overnight
courier, or by registered or certified mail, return receipt requested, postage
prepaid, addressed, if to the Executive, to the Executive at his last address
on file with the Employers and, if to the Employers, to the Employers at their
then current executive offices or to such other address as either party shall
have furnished to the other in writing in accordance herewith.  Notices and communications shall be
effective when actually received by the addressee (which receipt shall be
deemed to have occurred at any time that the addressee refuses or otherwise
attempts to avoid delivery of any such notice or communication).

 

11.4                           Withholdings.  The Employers may withhold from any amounts
payable under this Agreement such taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

 

11.5                           Enforceability.  If any portion or provision of this
Agreement shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as
to which it is so declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.

 

11.6                           Captions.  The captions of this Agreement are for
convenience of reference only, are not part of the terms of this Agreement and
shall have no force or effect in the application or interpretation thereof.

 

11.7                           Entire
Agreement.  This Agreement contains
the entire agreement between the parties to this Agreement concerning the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between
the parties.

 

11.8                           Survivorship.  The respective rights and obligations of the
parties to this Agreement, including, without limitation, any of their
respective rights and obligations under Section 10 of this Agreement,
shall survive any termination of this Agreement or any termination

 

20

 

of the Executive’s
employment hereunder for any reason to the extent necessary to accomplish the
intended preservation of such rights and obligations.

 

IN WITNESS WHEREOF, the
Executive has hereunto set his hand and each of the Employers has caused this
Agreement to be executed in its name and on its behalf by a duly authorized
officer, in each case as an instrument under seal and as of the date set forth
above.

 

	
  ATTEST:

  	
  ENTERPRISE BANCORP,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   /s/ Arnold S.
  Lerner

  	
   

  	
  By:

  	
   /s/ George L.
  Duncan

  	
   

  
	
  Arnold S. Lerner

  	
   

  	
  George
  L. Duncan.

  
	
  Vice Chairman

  	
   

  	
  Chairman
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  ENTERPRISE BANK AND
  TRUST COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   /s/ Arnold S.
  Lerner

  	
   

  	
  By:

  	
   /s/ George L.
  Duncan

  	
   

  
	
  Arnold S. Lerner

  	
   

  	
  George
  L. Duncan

  
	
  Vice Chairman

  	
   

  	
  Chairman
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Robert R. Gilman

  	
   

  	
   /s/ John P.
  Clancy, Jr.

  	
   

  
	
   

  	
   

  	
  John P. Clancy Jr.

  

 

21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}]]