Document:

exv10w4

 

     RUTGERS-CAMDEN BUSINESS INCUBATOR

LEASE AGREEMENT

     THIS LEASE AGREEMENT (the “Lease”) is made this 1ST day of September 2007 by and between
RUTGERS-CAMDEN TECHNOLOGY CAMPUS, Inc., 200 Federal Sheet, Camden, N.J. 08103 (the “Landlord” or
“RCTC”) and

Cloud Tech Sensors Inc.

200 Federal St.

2nd Floor, Suite 222

Camden, NJ, 08013

(the “Tenant” or “Client Company”).

WITNESSETH

     WHEREAS, RCTC is a not for profit corporation whose mission is to promote economic
development, business growth and foster entrepreneurship;

     WHEREAS, RCTC carries out its mission by maintaining a business incubator at 200 Federal
Street and leasing space in its business incubator to companies who seek to participate in its
incubator program;

     WHEREAS, Client Company wishes to lease space from RCTC and to participate in the business
incubator program;

     NOW, THEREFORE, in consideration of the foregoing and the mutual promises and obligations of
the parties set out herein, the parties further agree, as follows:

     1. Parties: The parties to this Lease Agreement (“Lease”) are the Landlord and the
Tenant, who are identified as follows:

Landlord:

Rutgers Camden Technology Campus, Inc.

200 Federal Street

Camden, New Jersey 08103

Tenant:

Cloud Tech Sensors Inc.

200 Federal St.

2nd Floor, Suite 222

Camden, NJ, 08013

     1. Leased Premises: The property which the Landlord leases to Tenant
and which Tenant leases from Landlord under this Lease consists Suite No. 222 known as the
Rutgers-Camden Business Incubator at Number, 200 Federal Street, 2nd Floor, Camden City,
Camden County, New Jersey 08103 (“Leased Premises”).

     2. Use_of Leased Premises: Tenant represents to Landlord that it will use the Leased
Premises for the exclusive purpose of operating a medical sensor company business, consistent with
the application submitted by the Client Company to RCTC. Tenant shall not use the Leased Premises
for any other purposes without the prior written consent from Landlord. In addition, Tenant
agrees that its use of the Leased Premises will not violate Local zoning laws, applicable fire or
health regulations, or any other local, state or federal law or regulation. Tenant shall comply
with the reasonable requirements of the Landlord’s insurer of the building and lands in and upon
which the leased Premises are located. Tenant shall not make any use of the property which will
adversely affect its insurability or insurance rates.

1

 

	 	3.	 	Term of the Lease/Cancellation: This initial term of this Lease is for one
(1) year commencing on September 1, 2007 (the Commencement Date”) and expire on August
3, 2008. Provided Tenant shall not be in default under any provision of this Lease, not
in violation of RCTC incubator rules, and all payments owed to RCTC are current,
Tenant shall be granted annual options to extend the term hereof for four (4)
additional one year terms consistent with the Terms of this Lease.

	 	4.	 	Landlord or Tenant may cancel this lease by delivering to the other thirty
(30) days prior written notice of cancellation of this Lease (“Cancellation Notice”)
prior to August 31, 2008 and each one year anniversary thereafter. Upon the
expiration of such thirty (30) day period, this Lease shall terminate and no longer be
valid, except that all affirmative obligations of the Tenant under this Lease shall
survive the cancellation of the Lease, except for Tenant’s obligation to pay future
Rent.
	 
	 	5.	 	Rental Amount: The total amount of Real Tenant shall pay to the
Landlord for Leased Premises is ($1175) per month (the “Rent”). Landlord is entitled
to increase the Rent upon the expiration of 12 months from the Commencement Date and
each and every subsequent 12 month period from the Commencement Date
during the term of this Lease. Landlord shall give Tenant at least 30 days prior
written notice of any such rental increase.
	 
	 	6.	 	Payment of Rent. Landlord shall provide an invoice showing amounts due
for rent and any other services provided to Tenant. Invoices shall be supplied on a
monthly basis at the first day of the month and Tenant shall have 5 days to pay
amounts for Rent and other services incurred as indicated on the invoices. Payment
shall be made at the address of the Landlord stated above unless Landlord shall notify
Tenant otherwise.

     7. Late Payment Charge: If the Rent is RECEIVED by the Landlord after the Fifth
(5th) day of the month, the Tenant shall pay to the Landlord, in addition to the Rent, a
10% late charge, without any notice.

     8. Security: On or before the Commencement Date, Tenant shall deliver to Landlord a
security deposit equal to one month’s Rent to be held as a security for the full and faithful
performance by Tenant of all required obligations of Tenant under this Lease. Landlord shall have
the unrestricted use of these funds and shall not be obligated to pay any interest thereon to
Tenant. Landlord may use the security to pay any and all obligations of Tenant to Landlord or
others under this Lease, and in such case Tenant shall immediately restore the security deposit to
its original amount. The security deposit, less any amounts used to pay Tenant’s obligations under
this Lease, shall be returned to Tenant 30 days after Tenant vacates and surrender possession of
the Leased Premises to Landlord. Tenant may not offset the deposit against Rent due under this
Lease.

     9. Success Fee: Client Company shall fully comply with the RCTC Success fee Policy,
attached hereto as Exhibit “A”.

     10. Utilities:

          a. Electric, Heat, and Air Conditioning: Landlord shall provide normal Electricity,
heat, and air conditioning which may service the Leased Premises at no cost to Tenant.

          Landlord understands that many high technology companies rely on computers that are left on
24 hours a day and such usage of electricity will not be considered excessive. However, if
Landord determines that Client Company is using a disproportionately high amount of utilities or,
in the event of a greater than typical increase in the cost of utilities, as determined by
Landlord, Landlord may impose a

2

 

surcharge on Client Company that shall be payable as additional Rent under this Lease, provided
prior notice is given to Client Company.

          b. Telephone: Tenant shall make its own arrangements for cellular telephone service
and shall be responsible for payment directly to the telephone company provider. All hard line
telephonic communications services including service, telephone, fax lines, and other equipment,
shall be purchased through Landlord and paid according to the terms of Landlord’s plan and
directions as, Landlord has purchased a suite of telephone services which shall be used by all
tenants utilizing such services. Such services will be terminated within five (5) days of
non-payment without any further notice.

          c. Internet Services: Landlord agrees to provide high speed internet services to
Tenant and Tenant agrees to purchase same from Landlord. However, if Tenant uses more than 25% of
total available facility internet bandwidth, Landlord may require Tenant to contract separately for
Internet Service. DMZ (Demilitarized Zone) access is available for tenants desiring external IPS
for development servers. Support of these servers is the responsibility of the Tenant and setup
charges do apply. The development servers will meet the following conditions to be granted DMZ
access:

Current Anti virus software

No objectionable or illegal content is being hosted.

Machines are not being used for illegal purposes.

Machines are not “production or mission critical” servers of the tenant’s company.

Machines will not be engaged in SPAMing

All service packs and patches are up to date.

          Client Company shall not use wireless internet services and shall pay to RCTC, in the same
fashion and timing as rental payments under Paragraph “5” above, $79.00 per month for high speed
internet services for use in the Demised Premises. Landlord is entitled to increase amount upon
expiration of the twelve (12) months from the Commencement Date. However, such increases shall not
exceed 10% in any year and RCTC must give 30 days prior written notice to Client Company of such
increases.

          Other conditions – if any machine is expected to be in violation of or expected of taking
part in potentially destructive activities, they will be disconnected until deemed safe or in
compliance.

          All computer, internet and IT equipment shall be used and maintained in strict compliance
with the RCTC’s rules ( amended from time to time) for use of such equipment and may be
immediately disconnected and/ or disabled if in violation.

          d. Water and Sewer: Landlord shall provide normal water and sewer to the Leased
Premises.

          e. Trash: Landlord shall provide for normal daily trash collection and removal at no
cost to Tenant.

          f. Hazardous Materials: In the event the Tenant shall use, generate or store hazardous
materials (i.e. paint cans, petroleum oil, etc.) with the Landlord’s prior consent, Tenant shall,
at Tenant’s sole expense, be responsible for using and/ or storing them consistent with all laws,
regulations, and ordinances. Tenant shall also, at its sole expense be responsible for their
disposal in full compliance with all laws, regulations, and ordinances.

     11. Maintenance and Repair of Buildings: The Tenant shall maintain the Leased Premise
in as good condition as existed on the Commencement Date, ordinary wear and tear excepted. Tenant
shall keep and surrender the Leased Premises in broom, clean and orderly condition. Tenant shall
be liable for all cost of repairs, replacements and damages to the Leased Premises during the
term of this Lease caused by the acts, negligence, misuse or omissions by Tenant, Tenant’s
employees, agents and/or visitors.

3

 

     12. Maintenance of Grounds: The Building owner, not Landlord, is responsible for the
maintenance of the exterior grounds and for the removal of the snow from driveways, parking areas
and sidewalks.

     13. Alterations and Improvements: Tenant shall make no alteration or improvements to
the Leased Premises without the prior written consent of the Landlord.

     14. Signs: Tenant shall not erect or place any signs on or outside of the building or
outside of its Leased Premises, without the prior written consent of the Landlord, which consent
may be withheld in Landlord’s sole discretion. All government approvals required to erect signage
shall be obtained at Tenant’s sole cost and expense. All signs installed by Tenant shall be
maintained by Tenant in good condition and Tenant shall remove all such signs at the termination of
this Lease and shall repair any damage caused by such installation, existence or removal.

     15. Parking: Tenant, its employees, agents and invitees shall make reasonable use of
the available parking facilities and shall comply with all rules relating to same.

     16. Locks and Keys: All locks attached to the Demised Premises must be installed by
Landlord. Landlord shall provide Tenant with access to the 2nd Floor entrance to the Business
Incubator where the Demised Premise is located. Tenant shall return all keys and access cards to
Landlord immediately upon expiration or termination of the Lease. Tenant is responsible for all
payments regarding keys, locks, locksmith charges and the like.

     17. Landlord’s Right of Entry: Tenant shall permit Landlord and its agents or
employees to enter the Leased Premises at all reasonable time and following reasonable notice
(except in the event of an emergency) for purposes of inspection, maintenance, or making repairs or
alterations or additions, as well as to exhibit the Leased Premise to prospective tenants, or any
other person having a legitimate interest therein. Landlord will make reasonable efforts not to
inconvenience Tenant in exercising the foregoing rights, bat shall not be liable for any loss
occupancy or quiet enjoyment while exercising the foregoing rights.

     18. Delivery to Tenant: All deliveries of goods, supplies and equipment to Tenant
are the responsibility of Tenant. Landlord shall not be responsible or available for accepting any
deliveries to Tenant. Landlord does not operate a shipping and receiving area that is available to
the Tenant.

     19. Indemnification and Insurance:

          a. Tenant shall indemnify, hold harmless and defend Landlord from and against any and all
costs, expenses, liabilities, judgments, losses, damages, suits, actions, fines, penalties, claims
or demands (including reasonable attorney’s fees ), of any kind and asserted by or on behalf of any
person, business, independent contractor or governmental authority, arising out of or in any way
connected with Tenant’s use of the Demised Premises, and Landlord shall not be liable to Tenant on
account of (i) any failure by Tenant to perform my of the agreements, terms, covenants or
conditions of the Lease to be performed by Tenant, (ii) any governmental authority, or (iii) any
accident, death or personal injury, or damage to property, which shall occur on, about, or within
the Business Incubator and Demised Premises except as the same was caused by the willful or
negligent act of Landlord, employees or agents. The obligations of the Client Company under this
Provision shall survive any expiration or termination of the Lease.

          b. During the term of this Lease or any renewal thereof, Tenant shall at its sole expense
maintain comprehensive general liability insurance against claims for personal injury, death or
property damage with respect to the Leased Premises, and the building and land on which it is
situated, in such adequate amount as shall be reasonably requested by Landlord from time to time,
but not less than $1,000,000 for bodily injury and for property
damage and $100,000 fire liability, with such insurance company or companies as shall be
reasonably satisfactory to Landlord from time to time. All such policies and renewals thereof shall
name the Landlord as an additional insured and shall

4

 

contain a breach of warranty endorsement that the coverage shall not be void as to Landlord for any
misrepresentation, act or omission of Tenant. On or before the Commencement Date of the term of
this Lease, and thereafter not less than fifteen (15) days prior to the expiration dates of said
policy or policies, Tenant shall provide copies of policies or certificates of insurance evidencing
coverage required by this Lease. Tenant shall also maintain, at its sole expense all other forms of
insurance, and in the amounts, as required under Landlord’s Lease with the New Jersey Economic
Development Authority.

          c. All policies of insurance shall provide (i) that no material change or cancellation of said
policies shall be made without thirty (30) days prior written notice to Landlord or Tenant, (ii)
that any loss otherwise payable to the Landlord shall be payable notwithstanding any act or
negligence of the Landlord or Tenant which might otherwise result in the forfeiture of said
insurance, (iii) that the insurance company issuing these shall have no right of subrogation
against the Landlord, and (iv) that as to the interest of Landlord, the insurance afforded by the
policy shall not be invalidated by any breach or violation by Tenant of any of the warranties,
declarations or conditions in the policy. Insurance company providing certificates of insurance
shall be rated “A” or above with a financial VI or above according to Best Key Rating Guide and
Standard and Poor’s Rating Guide.

          d. Tenant shall insure the Leased Premises and Tenant shall insure Tenant’s fixtures,
equipment, machinery, tenant improvement and betterment and contents including, but not limited to,
all equipment, furnishings and inventory against or damage by fire and such other risks as may be
included in the broadest form of extended coverage insurance including sprinkler leakage and rent
insurance in such amounts and from such companies as shall be reasonably requested by Landlord from
time to time. Landlord shall be the loss payee on the fire policy and an insured on the liability
policy.

     20. Waiver of Subrogation: With respect to fire and extended coverage insurance
policies of Landlord and Tenant, and only to the extent that such policies permit, Landlord hereby
releases Tenant and Tenant hereby releases Landlord from liability for loss or damages on or to the
Leased Premises or the contents thereof to the extent such loss or damages is covered by such
policies.

     21. Miscellaneous Additional Provisions:

	 	a.	 	Consistent with its operation of an incubator program, RCTC
may from time to time provide business advice to and consult with Client
Company either directly or through a third party. In such an event neither
RCTC or the third party is responsible for the quality or correctness of the
advice and Client Company shall bring no claims against RCTC and or the Third
Party, on account of the advice, assistance, consultations, services, etc.
	 
	 	b.	 	Consistent with it operation of an incubator program, RCTC
may, from time to time require periodic information regarding the Client
Company’s business. For example, such information may include identification
of owners and key employees, the number of employees, amount of capital
invested in company, business plans, status of business, revenues, etc.
Providing this information is designed to enable RCTC to provide advice to the
Client Company. Thus, Client Company shall timely comply with all such
requests.
	 
	 	c.	 	Client Company shall use the Demised Premises consistent with
the operation of its business in the context of a shared business incubator
environment and shall not disturb, disrupt or interfere with other tenants,
incubator management, their guests, contractors and any other activities
occurring in the Incubator.

5

 

	 	d.	 	No smoking or use of candles or open flames of any nature are permitted in
the Building and in the demised premises at any time.
	 
	 	e.	 	Actions required to be taken by Landlord under its Lease
with the N.J. Economic Development Authority and/ or in compliance
with Government orders and laws and regulations shall not be a
default or breach of this Lease, shall not be cause for termination by Tenant
and shall not subject Landlord to any liability.

     22. Environmental Provisions:

          d. SIC Number: The Standard Industrial Classification Numbers(s) (SIC) of the Tenant is/are ______

          b. Environmental Laws: The Tenant shall at all times comply with all federal, state, county
and municipal environmental laws. Landlord shall have the right to enforce Tenant’s compliance with
same, to immediately terminate this Lease for Tenant’s violation of same, and to recover for
damages, including consequential damages, resulting from such violations.

          c. Environmental Reports: With regard to Tenant’s activities on the Leased Premises:

               (1) Tenant shall promptly provide Landlord with all documentation and correspondence provided
to New Jersey Department of Environmental Protection (“NJDEP”) pursuant to the Worker and
Community Right to Know Act, N.J.S.A. 34:5A-1, et seq. and the regulations promulgated thereunder
(“Right to Know Act”).

               (2) Tenant shall promptly provide Landlord with all reports and notices made by Tenant
pursuant to the Hazardous Substance Discharge-Reports and Notices Act, N.J.S.A, 13:1K-15, et seq.
and the regulations promulgated thereunder (“Reports and Notices Act”).

               (3) Tenant shall promptly supply Landlord with any notices, correspondence and submissions
made by Tenant to any state environmental agency, the United States Environmental Protection Agency
(EPA), the United States Occupational Safety and Health Administration (OSHA), or my other local,
state or federal authority which requires submission of any information concerning environmental
matters or hazardous wastes or substance.

          d. Activities: Except by express written consent of the Landlord, Tenant shall not possess
or permit any person which it employs or with which it deals to possess upon the Leased Premises
any hazardous substance or waste to which it would be required to file an environmental report
under the preceding paragraph.

          e. ISRA Compliance: Tenant shall, at Tenant’s own expense, comply with the
Industrial Site Recovery Act, N.J.S.A. 13:1K-6, et seq. and the regulations promulgated thereunder
(“ISRA”). Tenant shall, at Tenant’s own expense, make all submissions to, provide all information
to, and comply with all requirements of the Bureau of Industrial Site Evaluation (the “Bureau”) of
the NJDEP. Should the Bureau or any other division of NJDEP determine that a cleanup plan be
prepared and that a cleanup be undertaken because of any spills or discharges of hazardous
substances or wastes at the Leased Premises which occur during the Term of this Lease, then Tenant
shall, at Tenant’s own expense, prepare and submit the required plans and financial assurances, and
carry out the approved plans. Tenant’s obligations under this paragraph shall arise if there is any
closing, terminating or transferring of operations of an industrial establishment at the premises
pursuant to ISRA. At no expense to Landlord, Tenant shall promptly provide all information
requested by Landlord for preparation on non- applicability affidavits and shall save harmless from
all fines, suits, procedures, claims and actions of any kind arising out of or in any way
connected with any spills or

6

 

discharges of hazardous substances or wastes at the Leased Premises, or the lands and building in
which the Leased Premises are located, which occur during the term of this Lease; and from all
fines, suits, procedures, claims and actions of any kind arising out of Tenant’s failure to provide
all information, make all submissions and take all actions required by the ISRA Bureau or any other
division of NJDEP. Tenant’s obligations and liabilities under this paragraph shall continue so long
as Landlord remains responsible for any spills or discharges of hazardous substances or wastes
which occur during the term of this Lease at the Leased Premises or in, on or under the building
and/or the the lands where the Leased Premises is located. This section shall survive the
expiration or early termination of this Lease. Tenant’s failure to abide by the terms of this
section shall be restrainable by injunction.

          f. Assignment or Subletting: This Lease may not be assigned, nor the Leased Premises
sublet, without the prior written consent of the Landlord, which consent may be withheld in
Landlord’s sole discretion.

          g. Vacancy: Tenant shall not permit the Leased Premises to be vacant or unoccupied
during the Term of the Lease.

     23. Fire or Casualty: If the Leased Premises should be damaged by fire or other
casualty during the Term of the Lease:

          a. If the Leased Premises are unfit for tenancy, the Rent shall be abated from the date of the
damages until the date of repair of the Leased Premises.

          b. If Landlord’s reasonable estimate of the time required for repair exceeds ninety (90)
days, the Landlord or Tenant may terminate the Lease.

          c. Tenant will give full cooperation in permitting repairs, including temporarily
vacating the Leased Premises if requested by Landlord.

          d. Any and all insurance proceeds received by Landlord or Tenant on account of damage or
destruction to the Leased Premises, less the actual costs fees and expenses incurred in adjusting
the loss, shall be applied by Landlord, at Landlord’s sole discretion, to repair, replace, alter,
restore or rebuild any part or all of the Leased Premises, unless required by the holder of any
mortgage or other encumbrance on the Leased Premises to be applied in reduction of the obligation
secured thereby.

     24. Surrender of Possession: Tenant shall vacate and surrender possession of the
Leased Premises to Landlord upon expiration of the Term of the Lease, in broom clean and the same
condition in which Tenant received it, normal wear and tear excepted.

     25. Waiver of Claims: Except as otherwise provided in this Lease, Tenant agrees
that Landlord and Landlord’s trustees, employees, affiliates, board members, officers, agents and
servants shall not be liable to Tenant, and Tenant hereby releases said parties from all liability,
for any and all loss of life, personal injury, damage to or loss of property, or loss or
interruption of business occurring to Tenant, its agents, servants, employees, invitees, licensees,
visitors or any other person, firm, corporation or entity, in or about or arising out of the Leased
Premises, from any cause whatsoever unless resulting from the gross negligence or willful
misconduct of Landlord or Landlord’s agents, servants or employees. In no event, whatsoever, shall
Landlord be liable to Tenant for any consequential or incidental damages or penalties or fines
incurred or imposed upon Tenant during the term of the Lease. In no event will Client Company bring
any claim against any employee, agent, officer, board member, contractor, of Landlord in his or her
personal capacity.

     26. Landlord’s Obligations: Landlord’s obligations hereunder shall be binding upon
Landlord only for the period of time that Landlord is in ownership of the Leased Premises, and upon
termination of that ownership, Tenant, except as to any obligations which have then matured shall
look solely to Landlord’s successor in interest in the Leased Premises for the
satisfaction of each and every obligation of Landlord hereunder.

7

 

     27. Landlord’s Liability: Landlord shall have no personal liability under any of the
terms, conditions or covenants of this Lease and Tenant shall look solely to the equity of the
Landlord in the Leased Premises for the satisfaction of any claim, remedy or cause accruing to
Tenant as a result of the breach of any action of Lease by Landlord.

     28. Events of Default: Tenant shall be in default under this Lease upon the happening of any
of the following events:

          a. Tenant’s failure to pay the Rent or any other charge for which it may be liable, or any
portion of it, for a period extending fifteen (15) days or more after its due date, without the need
for demand or notice from Landlord.

          b. Seizure of the Tenant’s Leasehold interest by execution or other legal process.

          c. Tenant making an assignment for the benefit of creditors, or filing a voluntary petition of
bankruptcy.

          d. Tenant failing to obtain dismissal of an involuntary bankruptcy petition within sixty (60)
days of its filing.

          e. Any misrepresentation or warranty made by Tenant is determined to be false or incorrect in
any material respect.

          f. Tenant failing to obey or breaching any of the rules and regulations adopted by the
Landlord concerning Tenant’s use of the Leased Premise and the a parking lot, land and building
where the Leased Premises is located, or any amendments or modification to such rules and
regulation and any and all rules relating to the business incubator program.

          g. If Tenant has abandoned the Leased Premises or if the Leased Premises shall be
permitted to become vacant for more than 30 consecutive days.

          h. Tenant’s habitual late payment of Rent, which shall for purposes of this Lease deemed to
mean the Tenant’s failure or late payment of Rent three (3) times in any twelve (12) month period.

          i. Tenant recording this lease or any memorandum of Lease or a copy there of without the prior
written consent of Landlord.

          j. Tenant subletting all or part of the Leased Premises or assigning Tenant’s rights under this
Lease without the prior written consent of Landlord.

          k. Tenant’s failure to comply with any other provisions of the Lease extending thirty
(30) days or more after delivery of notice to Tenant of its non-compliance.

     29. Landlord’s Remedies: In the event of Tenant’s default, Landlord shall have the
following rights, any one or more of which may be exercised by Landlord without limit and in such
order, or concurrently, as Landlord may decide in Landlord’s sole discretion:

          a. Landlord may (but shall not be required to) perform for the account of Tenant any such
default of Tenant and immediately recover as additional rent any expenditure made and the amount of
an obligations incurred in connection therewith, plus interest at the rate of eight percent (8%)
per annum;

          b. Landlord may accelerate all rent and additional rent due for the term of this Lease and
declare the same to be immediately due and payable;

          c. Landlord, at its option, may serve notice upon Tenant that this lease shall cease and
expire and become absolutely void on the date specified in such notice, to be not less than five
(5) business days after the date of such notice, without any right on

8

 

the part
of the Tenant to save the forfeiture by payment of any sum due or by the performance of
any terms, provision, covenant, agreement or condition broken; and, thereupon and at the expiration
of the time limit in such notice, this Lease and the term hereof granted, as well as the right,
title and interest of the Tenant hereunder, shall wholly cease and expire and become void.
Thereupon, Tenant shall immediately quit and surrender to Landlord the leased Premises, and
Landlord may enter into and repossess the Leased Premises by summary proceedings, detainer,
ejectment or otherwise and remove all occupants thereof and, at Landlord’s option, any property
thereon without being liable to indictment, prosecution or damages thereof. No such expiration or
termination of this Lease shall relieve Tenant of its liability and obligations under this Lease,
whether or not the Leased Premises shall be relet;

          d. Landlord may, at any time after the occurrence of any event of default, re-enter and
repossess the Leased Premises and any part thereof and attempt in its own name to relet all or any
part of such Leased Premises for and upon such terms and to such persons, firms, or corporations
and for such period or periods as Landlord, in its sole discretion, shall determine, including the
term beyond the termination of this Lease; and Landlord shall not be required to accept any tenant
offered by Tenant or observe any Instruction given by Tenant about such reletting or do any act or
exercise any care or diligence with respect to such reletting or to the mitigation of damages.

          e. Landlord shall have the right of injunction, in the event of a breach or threatened breach
by Tenant of any of the agreements, conditions, covenants or terms hereof, to restrain the same and
the right to invoke any remedy allowed by law or in equity, whether or not other remedies,
indemnity or reimbursements are herein provided. Landlord shall have the right of distraint upon
Tenant’s goods upon adequate notice consistent with due process.

          f. Landlord shall have the right to institute a dispossession action by summary proceeding to
evict Tenant and shall be entitled to receive in such proceedings all Rents and additional rents
due and owing by Tenant under this Lease, together with all costs and expenses, including
reasonable attorney’s fees, incurred by Landlord in enforcing the terms, conditions and provisions
of this Lease.

          g. Nothing contained herein shall be construed as limiting or precluding the recovery by
Landlord against Tenant of any damages to which Landlord may lawfully be entitled under this Lease
at law or in equity.

          h. The right and remedies given to Landlord in this Lease are distinct, separate and
cumulative remedies and no one of them, whether or not exercised by Landlord, shall be deemed to be
an exclusion of any of the others, and may be exercised by Landlord in any manner or order as
Landlord shall elect in its sole discretion.

          i. In the event Tenant fails to vacate the Leased Premises upon the expiration of this or any
extended term hereunder or upon early termination of this lease, Tenant shall pay to Landlord
double the monthly rental payment for the month in which this Lease expired or terminated as
liquidating damages and in the event that Tenant holds over for more than sixty (60) days, the rent
for such additional periods shall be double the monthly rental due and payable for the month in
which the Lease expired or Landlord may pursue any other remedy.

          j. In addition to all remedies provided herein or by law, Tenant shall pay to Landlord its
reasonable attorney’s fees and costs, including court costs, incurred as a result of Landlord’s
enforcement of any term, condition or provision of this Lease, whether or not suit is filed by
Landlord.

     30. Governing Law: This Lease shall be governed, construed and enforced in accordance
with the laws of the State of New Jersey. All actions hereunder shall be brought in the Superior
Court of New Jersey with venue in Camden County.

     31. Notices: Whenever in this Lease it shall be required or permitted
that notice or demand be given or served by either party to this Lease, such notices shall be in

9

 

writing and shall be served personally or forwarded by certified mail, return receipt requested,
postage prepaid, addressed in the case of Landlord to the address stated in the first section of
this Lease, attention Frank S. Keith, Executive Director, and in the case of the Tenant, to the
address of the Leased Premises. Either party may change its address to which such notice shall he
delivered by giving written notice of such change to the other party as herein provided. Service of
any notice shall be effective upon delivery. If the certificate mail is returned undeliverable,
then service shall be effective upon the date of mailing of such notice by regular United States
postal service, postage prepaid.

     32. Entire Contract; Amendment: This Lease contains all the agreements, conditions,
understanding and representations and warranties made between Landlord and Tenant with respect to
the subject matter hereof and may not be amended or modified orally in any manner other than by
agreement in writing, signed by both parties hereto or their respective successors in interest. The
acceptance or depositing of any payment delivered by Tenant to Landlord i) before the commencement
of this Lease shall not be deemed or construed as an acceptance or execution of this Lease by the
Landlord, or ii) if after commencement of this Lease, as a waiver of any of Landlord’s right and
remedies hereunder or at law or in equity.

     33. Parties Bound: The respective rights and obligations provided in this Lease
shall bind and inure to the benefit of the parties hereto, their legal representatives, heirs,
successors and assigns; provided, however, that no rights shall inure to the benefit of a successor
or assign of Tenant without the prior written consent by Landlord.

     34. No Recording: Tenant may not record this Lease or any memorandum of the Lease
without Landlord’s prior written consent. Tenant’s failure to strictly comply with this section
shall be deemed a default by Tenant under this Lease and Tenant shall be liable to Landlord for all
costs, including reasonable attorney’s fees, incurred by Landlord to remove such Lease or
memorandum of Lease of record.

     35. Rules and Regulations: Tenant agrees to comply with the rules and regulations
established by the Landlord from time to time, which Landlord agrees will be applied uniformly to
all tenants. Tenant acknowledges and agrees that a violation of any rule or regulation established
by Landlord hereunder shall be deemed a default by Tenant under this Lease. The existing rules and
regulations, as amended from time to time, will be distributed to Tenant separately, from time to
time.

     36. Business Interruption: Landlord shall not be responsible to Tenant for any
damage or inconvenience caused by interruption of business or inability to occupy or use the
Leased Premises for any reason whatsoever.

     37. Severability: If any provision of this Lease shall prove to be invalid, void or
illegal, it shall in no way affect any other provision hereof and the remaining provisions shall
nevertheless remain in full force and effect.

     38. Use of Information in Advertising: Landlord and any agent employed by Landlord
shall be permitted to utilize the name of Tenant or user of the Leased Premises, and other general
information about the Tenant in advertising and promotional material utilized by Landlord.

     39. Abandoned Property: Any property of Tenant remaining at the Leased Premises on
or after the date of expiration or early termination of this Lease is subject to the following:

          a. Landlord may, without the obligation to do so, remove and store the Tenant’s property.
However, Tenant shall be required to pay Landlord any and all sums due under the Lease, together
with the cost of removing Tenant’s property in order to redeem Tenant’s property;

          b. If Tenant’s property has not been redeemed within 15 days of the expiration or early
termination of the Lease or Tenant’s abandonment of the Leased

10

 

Premises, then Tenant agrees that for purposes of this Lease Landlord may consider
such property as abandoned by the Tenant;

          c. Tenant agrees that Landlord may move and dispose of all abandoned property by
the Tenant without any obligation or liability to Tenant and Landlord shall not be
accountable to Tenant for the use of proceeds of sales of such abandoned property;

          d. In any event, whatsoever, Tenant agrees that Landlord shall have no liability
for loss, theft or damage of Tenant’s property remaining in the Leased Premises at the
expiration or early termination of the Lease. It is Tenant’s responsibility to insure
Tenant’s property in accordance with Paragraph 18 herein.

     40. Condition Precedent: As an express condition precedent for the
effectiveness of this Lease, Tenant must have signed and delivered to Landlord the
“Agreement to Enter Rutgers-Camden Business Incubator Program.”

     41. Waiver of Jury Trial: Landlord and Tenant waive trial by jury in any
matter pertaining to this Lease, except for a personal injury or property damage claim.

     42. Right to Quiet Enjoyment: Landlord agrees that if Tenant pays the Rent
and all other sums due under this Lease and is not in default under any of the terms or
provisions of this Lease, then it may peaceably and quietly have, hold and enjoy the
premises for the term of this Lease.

     43. Nonwaiver by Landlord: Failure of Landlord to insist upon a strict
performance of any term, condition or covenant in this Lease shall not be deemed a
waiver of any right or remedies that Landlord may have, shall not prevent Landlord from
enforcing its rights at a later time (unless Landlord has waived such right in writing)
and shall not be deemed a waiver of any subsequent breach or default in the terms,
conditions and covenants contained in this Lease.

     Copy Received: Tenant hereby acknowledges receiving a copy of this Lease,

     IN WITNESS WHERREOF, the parties agree to be legally bound and have set their hands
and seal this 

12th day of September, 2007.

	 	 	 	 	 	 	 
	WITNESSED/ATTESTED:

	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Cloud Tech Sensors Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ James L. Tricon	 	 
	 

	 	 	 	 

Signature
	 	 
	 

	 	 	 	President & CEO	 	 
	 

	 	 	 	 
Title	 	 
	 
	 	 	 	 	 	 
	ATTESTED:

	 	 	 	LANDLORD: Rutgers Camden Technology Campus, Inc.	 	 
	 
	 	 	 	 	 	 
	/s/
Stephanie Stahl

	 	By:
	 	Frank S Keith	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	/s/ Frank S Keith	 	 
	 

	 	 	 	 

Signature
	 	 
	 

	 	 	 	Executive Director	 	 
	 

	 	 	 	 
Title	 	 

11ex10-1.htm

     

    Exhibit
      10.1

    

    
      EMPLOYMENT
        AGREEMENT

    

    
      

    

    
      AGREEMENT,
        dated this 27th day of September, 2007, among First Defiance Financial Corp.
        ("First Defiance") an Ohio-chartered corporation and savings and loan holding
        company, First Federal Bank of the Midwest ("First Federal"), a federally
        chartered stock savings bank, both of which are located in Defiance, Ohio,
        and
        William J. Small (the "Executive"). First Defiance and First Federal are
        referred to jointly herein as the "Companies."

    

    
      

    

    
      WITNESSETH:

    

    
      

    

    
      WHEREAS,
        the Executive is presently Chairman, President and Chief Executive Officer
        of
        First Defiance and Chairman and Chief Executive Officer of First
        Federal;

    

    
      

    

    
      WHEREAS,
        the Companies desire to continue to retain the Executive's services in such
        capacities; and

    

    
      

    

    
      WHEREAS,
        the Executive is serving the Companies pursuant to the terms of a previous
        Agreement dated December 21, 1998 (the “Prior Agreement”);

    

    
      

    

    
      WHEREAS,
        parties desire to amend and restate the Prior Agreement;

    

    
      

    

    
      NOW
        THEREFORE, in consideration of the premises and the mutual agreements herein
        contained, the parties hereby agree as follows:

    

    
      

    

    
      1.           Definitions.
        The following words and terms shall have the meanings set forth below for
        the
        purposes of this Agreement:

    

    
      

    

    
      (a)           Annual
        Compensation. The Executive's "Annual Compensation" for purposes of this
        Agreement shall be deemed to mean the average annual Compensation paid to
        the
        Executive by the Companies during the five most recent taxable years ending
        prior to the date of termination.

    

    
      

    

    
      (b)           Base
        Salary.  "Base Salary" shall have the meaning set forth in Section
        3(a) hereof.

       

    

    
      (c)           Bonus.  "Bonus"
        shall have the meaning set forth in Section 3(a) hereof.

    

    
      

    

    
      (d)           Cause.  "Cause"
        shall mean personal dishonesty, incompetence, willful misconduct, breach
        of
        fiduciary duty involving personal profit, intentional failure to perform
        stated
        duties, willful violation of any law, rule or regulation (other than traffic
        violations or similar offenses) or final cease-and-desist order or material
        breach of any provision of this  Agreement.  For purposes of
        this paragraph, no act or failure to act on the Executive's part shall be
        considered "willful" unless done, or omitted to be done, by the Executive
        not in
        good faith and without reasonable belief that the Executive's action or omission
        was in the best interest of the Companies.

    

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    
      (e)           Change
        in Control of First Defiance. "Change in Control" of First Defiance shall
        have
        the meaning set forth in Section 409A(a)(2)(A)(v) of the
        Code.

    

    
      

    

    
      (f)           Code.  "Code"
        shall mean the Internal Revenue Code of 1986, as amended.

    

    
      

    

    
      (g)           Compensation.  "Compensation"
        shall have the meaning set forth in Section 3(a) hereof.

    

    
      

    

    
      (h)           Date
        of Termination.  "Date of Termination" shall mean (i) if the
        Executive's employment is terminated by the Companies for any reason, the
        date
        on which a Notice of Termination is given or such later date as may be specified
        by the Companies in such Notice, or (ii) if the Executive's employment is
        terminated by the Executive, the date of termination shall be a date not
        less
        than 30 days from the date the Notice of Termination is delivered by the
        Executive to the Companies, unless the Companies, in their sole discretion,
        designate an earlier date.

    

    
      

    

    
      (i)           Disability.
        "Disability" shall mean any physical or mental impairment that qualifies
        the
        Executive for disability benefits under the applicable long-term disability
        plan
        maintained by the Companies or any subsidiary or, if no such plan applies,
        which
        would qualify the Executive for disability benefits under the Federal Social
        Security System.

    

    
      

    

    
      (j)           Good
        Reason.  "Good Reason" shall mean:

    

    
      

    

    
      
        	
              	
                (i)

              	
                Without
                  the Executive's express written
                  consent:

              

      

    

    
      

    

    
      (a)           the
        assignment by the Companies to the Executive of any duties that, in the
        Executive's good faith determination, are materially inconsistent with the
        Executive's positions, duties, responsibilities and status with the Companies
        immediately prior to such assignment, or in the event of a Change in Control,
        immediately prior to such a Change in Control of First
        Defiance;

    

    
      

    

    
      (b)           in
        the Executive's good faith determination, a material change in the Executive's
        reporting responsibilities, titles or offices as an employee and as in effect
        immediately prior to such change or, in the event of a Change in Control,
        immediately prior to such a Change in Control of First Defiance;
        or

    

    
      

    

    
      (c)           any
        removal of the Executive from or any failure to re-elect the Executive to
        the
        offices of Chairman, President and Chief Executive Officer of First Defiance
        and
        Chairman and Chief Executive Officer of First Federal, except in connection
        with
        cause, Disability, Retirement, or the Executive's death;

    

    
      

    

    
      
        	
              	
                (ii)

              	
                Without
                  the Executive's express written consent, a reduction by
                  the

              

      

    

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    
      Companies
        in the Executive's Base Salary, as the same may be increased from time to
        time,
        or fringe benefits;

    

    
      

    

    
      (iii)           The
        principal executive office of the Companies is relocated outside of the
        Defiance, Ohio area or, without the Executive's express written consent,
        the
        Companies require the Executive to be based anywhere other than an area in
        which
        the Companies' principal executive office is located, except for required
        travel
        on business of the Companies to an extent substantially consistent with the
        Executive's present business travel obligations;

    

    
      

    

    
      (iv)           Without
        the Executive's express written consent, the Companies fail to provide the
        Executive with the same fringe benefits that were provided to the Executive
        immediately prior to a Change in Control of First Defiance, or with a package
        of
        fringe benefits (including paid vacations) that, though one or more of such
        benefits may vary from those in effect immediately prior to such Change in
        Control, is substantially comparable in all material respects to such fringe
        benefits taken as a whole;

    

    
      

    

    
      (v)           Any
        purported termination of the Executive's employment for Cause, Disability
        or
        Retirement that is not effected pursuant to a Notice of Termination satisfying
        the requirements of paragraph (1) below; or

    

    
      

    

    
      (vi)           The
        failure by First Defiance to obtain the assumption of and agreement to perform
        this Agreement by any successor as contemplated in Section 10
        hereof.

    

    
      

    

    
      (k)           IRS.  “IRS”
        shall mean the Internal Revenue Service.

    

    

    
      (l)           Notice
        of Termination.  "Notice of Termination" shall mean a dated notice
        that (i) indicates the specific termination provision in this Agreement relied
        upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
        to provide a basis for termination of Executive's employment under the provision
        so indicated, (iii) specifies a Date of Termination, and (iv) is given in
        the
        manner specified in Section 11 hereof.

    

    
      

    

    
      (m)           Retirement.  "Retirement"
        shall mean voluntary termination by the Employee in accordance with the
        Companies' retirement policies, including early retirement, generally applicable
        to their salaried employees.

    

    
      

    

    
      2.           Term
        of Employment.

    

    
      

    

    
      (a)           The
        Companies hereby employ the Executive as Chairman, President, and Chief
        Executive Officer of First Defiance and Chairman and Chief Executive Officer
        of
        First Federal.  Executive hereby accepts said employment and agrees to
        render such services to the Companies on the terms and conditions set forth
        in
        this Agreement. The term of employment under this Agreement shall be a
        three-year term, which shall be deemed to have commenced on

    

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    
      January
        1, 2007. However, at a meeting of the Companies' Board of Directors no later
        than 30 days prior to the first anniversary of the date of this Agreement
        and
        each anniversary thereafter, the Board of Directors of the Companies shall
        consider and review (with appropriate corporate documentation thereof, and
        after
        taking into account all relevant factors including the Executive's performance
        and the merits of a three-year agreement) a one-year extension of the term
        under
        this Agreement, and the term shall continue to extend, unless either the
        Board
        of Directors does not approve such extension and provides written notice
        to the
        Executive of such event or the Executive gives written notice to the Companies
        of the Executive's election not to extend the term, in each case, with such
        written notice to be given not less than thirty (30) days prior to any such
        anniversary date. References herein to the term of this Agreement shall refer
        both to the initial term and successive terms.

    

    
      

    

    
      (b)           During
        the term of this Agreement, the Executive shall perform such executive services
        for the Companies as may be consistent with his titles and from time to time
        assigned to him by the Companies' Board of Directors; provided, however,
        that
        the Executive shall not be precluded from (i) vacations and other leave time
        in
        accordance with section 3(c) below; (ii) reasonable participation in community,
        civic, charitable, or similar organizations; (iii) reasonable participation
        in
        industry-related activities; or (iv) pursuing personal investments that do
        not
        interfere or conflict with the performance of Executive's duties to the
        Companies.

    

    
      

    

    
      3.           Compensation
        and Benefits.

    

    
      

    

    
      (a)           The
        Companies shall compensate and pay Executive for his services during the
        term of
        this Agreement at a minimum base annual salary of $278,932.00 ("Base Salary"),
        which may be increased from time to time in such amounts as may be determined
        by
        the Companies' Board of Directors and may not be decreased without the
        Executive's express written consent. In addition to his Base Salary, the
        Executive shall be entitled to receive during the term of this Agreement
        a bonus
        based on such terms and conditions as are set forth from time to time in
        the
        Companies' incentive bonus program (the "Bonus"). The Executive's Base Salary
        and Bonus are referred to herein as his "Compensation."

    

    
      

    

    
      (b)           During
        the term of the Agreement, Executive shall be entitled to participate in
        and
        receive the benefits of any pension or other retirement benefit plan, deferred
        compensation, profit sharing, stock option, management recognition, employee
        stock ownership, or other plans, benefits and privileges given to employees
        and
        executives of the Companies, to the extent commensurate with his then duties
        and
        responsibilities, as fixed by the Board of Directors of the Companies including,
        but not limited to, the following: (i) the Companies shall pay membership
        dues
        for the Executive for membership in such organizations, including country
        clubs
        and professional organizations, as are approved by the Companies from time
        to
        time; and (ii) the Companies shall, at their discretion, provide the use
        of an
        automobile (the terms and conditions for the Executive's use and possession
        of
        the automobile and the quality of the automobile provided for the Executive's
        use shall be consistent with, or not less favorable than, the past practices
        of
        the Companies) or an automobile expense reimbursement. The Companies shall
        not
        make any changes in such plans, benefits or privileges that would adversely
        affect Executive's rights or benefits thereunder, unless such change occurs
        pursuant to a program applicable to all executive officers of the Companies
        and
        does not result in a proportionately

    

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    
      greater
        adverse change in the rights of or benefits to Executive as compared with
        any
        other executive officer of the Companies. Nothing paid to Executive under
        any
        plan or arrangement presently in effect or made available in the future shall
        be
        deemed to be in lieu of the salary payable to Executive pursuant to Section
        3(a)
        hereof.

    

    
      

    

    
      (c)           During
        the term of this Agreement, Executive shall be entitled to paid annual vacation
        in accordance with the policies as established from time to time by the Board
        of
        Directors of the Companies, which shall in no event be less than four weeks
        per
        annum. Executive shall not be entitled to receive any additional compensation
        from the Companies for failure to take a vacation, nor shall Executive be
        able
        to accumulate unused vacation time from one year to the next, except to the
        extent authorized by the Board of Directors of the Companies.

    

    
      

    

    
      4.           Expenses.  The
        Companies shall reimburse Executive or otherwise provide for or pay for all
        reasonable expenses incurred by Executive in furtherance or in connection
        with
        the business of the Companies, including, but not by way of limitation,
        traveling expenses and all reasonable entertainment expenses (whether incurred
        at the Executive's residence, while traveling or otherwise), subject to such
        reasonable documentation and other limitations as may be established by the
        Board of Directors of the Companies. If such expenses are paid in the first
        instance by Executive, the Companies shall reimburse the Executive
        therefor.

    

    
      

    

    
      5.           Termination.

    

    
      

    

    
      (a)           The
        Companies shall have the right, at any time upon prior Notice of Termination,
        to
        terminate the Executive's employment hereunder for any reason, including
        without
        limitation termination for Cause, Disability or Retirement.

    

    
      

    

    
      (b)           Executive
        shall have the right, upon prior Notice of Termination, to terminate his
        employment hereunder for any reason.

    

    
      

    

    
      (c)           In
        the event that (i) Executive's employment is terminated by the Companies
        for
        Cause, Disability or Retirement or in the event of the Executive's death,
        or
        (ii) Executive terminates his employment hereunder other than for Good Reason,
        Executive shall have no right pursuant to this Agreement to compensation
        or
        other benefits for any period after the applicable Date of
        Termination.

    

    
      

    

    
      (d)           In
        the event that Executive's employment is terminated by the Companies for
        other
        than Cause, Disability, Retirement or the Executive's death or such employment
        is terminated by the Executive (i) due to failure by the Companies to comply
        with any material provision of this Agreement, or (ii) for Good Reason, in
        either case which failure or Good Reason has not been cured within a period
        of
        thirty (30) days after a written notice of non-compliance has been given
        by
        Executive to the Companies, then the Companies shall, subject to the provisions
        of Section 6 hereof, if applicable;

    

    
      

    

    
      
        	
              	
                (1)

              	
                pay
                  to the Executive, in a lump sum payment on the first business day
                  of the
                  month following the Date of Termination, an amount equal to 2.00
                  times the
                  Annual Compensation but not more than twice the annual compensation
                  limitation in effect under Section 401(a)(17)
                  for

              

      

    

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    
      
        	
              	
                 

              	
                the
                  year which includes the Date of Termination;
                  and

              

      

    

    
      

    

    
      
        	
              	
                (2)

              	
                pay
                  to the Executive, in a lump sum payment on the first business day
                  of the
                  seventh month following the Date of Termination, an amount equal
                  to the
                  excess of 2.99 times the Annual Compensation over the amount of
                  the
                  payment made to the Executive under subparagraph (d)(i);
                  and

              

      

    

    
      

    

    
      
        	
              	
                (3)

              	
                maintain
                  and provide for a period ending at the earlier of (i) the expiration
                  of
                  the remaining term of employment pursuant hereto prior to the Notice
                  of
                  Termination, (ii) the end of the second full calendar year following
                  the
                  year which includes the date of termination, or (iii) the date
                  of the
                  Executive's full-time employment by another employer (provided
                  that the
                  Executive is entitled under the terms of such employment to benefits
                  substantially similar to those described in this subparagraph (3)),
                  at no
                  cost to the Executive, the Executive's continued participation
                  in all
                  group insurance, life insurance, health and accident, disability
                  and other
                  employee benefit plans, programs and arrangements in which the
                  Executive
                  was entitled to participate  immediately prior to the Date of
                  Termination (other than retirement plans or stock compensation
                  plans of
                  the Companies), provided that in the event that the Executive's
                  participation in any plan, program or arrangement as provided in
                  this
                  subparagraph (3) is barred, or during such period any such plan,
                  program
                  or arrangement is discontinued or the benefits thereunder are materially
                  reduced, the Companies shall arrange to provide the Executive with
                  benefits substantially similar to those that the Executive was
                  entitled to
                  receive under such plans, programs and arrangements immediately
                  prior to
                  the Date of Termination.  Notwithstanding the forgoing, the
                  Companies may in lieu of providing for continuation of the forgoing
                  benefits, pay to the Executive in a lump sum cash payment an amount
                  equal
                  to the Companies’ cost of providing such benefits to Executive during the
                  month immediately prior to the Executive’s termination of employment,
                  times the number of months that were remaining in the term of Executive’s
                  employment prior to the Notice of
                  Termination.

              

      

    

    
      

    

    
      6.           Limitation
        of Benefits under Certain Circumstances.  If the payments and benefits
        pursuant to Section 5 hereof, either alone or together with other payments
        and
        benefits that Executive has the right to receive from the Companies, would
        constitute a "parachute payment" under Section 280G of the Code, the payments
        and benefits pursuant to Section 5 hereof shall be reduced, in the manner
        determined by the Executive, by the amount, if any, that is the minimum
        necessary to result in no portion of the payments and benefits under Section
        5
        being non-deductible to either of the Companies pursuant to Section 280G
        of the
        Code and subject to the excise tax imposed under Section 4999 of the Code.
        The
        determination of any reduction in the payments and benefits to be made pursuant
        to Section 5 shall be based upon the opinion of independent tax counsel selected
        by the Companies' independent public accountants

    

    

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    
      and
        paid
        by the Companies.  Such counsel shall be reasonably acceptable to the
        Companies and Executive; shall promptly prepare the foregoing opinion, but
        in no
        event later than thirty (30) days from the Date of Termination; and may use
        such
        actuaries as such counsel deems necessary or advisable for the purpose. In
        the
        event that the Companies and/or the Executive do not agree with the opinion
        of
        such counsel, (i) the Companies shall pay to the Executive the maximum amount
        of
        payments and benefits pursuant to Section 5, as selected by the Executive,
        which
        such opinion indicates that there is a high probability do not result in
        any
        payments and benefits being non-deductible to the Companies and subject to
        the
        imposition of the excise tax imposed under Section 4999 of the Code (the
        “Permitted Amount”), and (ii) the Companies may request, and provided that the
        amount not paid to the Executive because it was above the Permitted Amount
        exceeds 5% of the total amount of payments and benefits owed to Executive
        by the
        Companies pursuant to the terms of this Agreement, Executive shall have the
        right to demand that the Companies request, a ruling from the IRS as to whether
        the disputed payments and benefits pursuant to Section 5 hereof have such
        consequences. Any such request for a ruling from the IRS shall be promptly
        prepared and filed by the Companies, but in no event later than thirty (30)
        days
        from the date of the opinion of counsel referred to above, and shall be subject
        to the Executive's approval prior to filing, which shall not be unreasonably
        withheld. The Companies and Executive agree to be bound by any ruling received
        from the IRS and to make appropriate payments to each other to reflect any
        such
        rulings, together with interest at the applicable federal rate provided for
        in
        Section 7872(f)(2) of the Code. Nothing contained herein shall result in
        a
        reduction of any payments or benefits to which the Executive may be entitled
        upon termination of employment under any circumstances other than as specified
        in this Section 6, or a reduction in the payments and benefits specified
        in
        Section 5 below zero.

    

    
      

    

    
      7.           Mitigation;
        Exclusivity of Benefits.

    

    
      

    

    
      (a)           The
        Executive shall not be required to mitigate the amount of any benefits hereunder
        by seeking other employment or otherwise, nor shall the amount of any such
        benefits be reduced by any compensation earned by the Executive as a result
        of
        employment by another employer after the Date of Termination or
        otherwise.

    

    
      

    

    
      (b)           The
        specific arrangements referred to herein are not intended to exclude any
        other
        benefits that may be available to the Executive upon a termination of employment
        with the Companies pursuant to employee benefit plans of the Companies or
        otherwise.

    

    
      

    

    
      8.           Withholding.
        All payments required to be made by the Companies hereunder to the Executive
        shall be subject to the withholding of such amounts, if any, relating to
        tax and
        other payroll deductions as the Companies may reasonably determine should
        be
        withheld pursuant to any applicable law or regulation.

    

    
      

    

    
      9.           Covenant
        Not to Compete and Confidential Information

    

    
      

    

    (a)           Throughout
      the employment of Executive under this Agreement and for a period of one year
      after termination of employment for any reason, Executive agrees that he will
      not, except on behalf of the Companies or with the written consent of the
      Companies:

    

    
      	
               

            	
              (1)

            	
              engage
                in any business activity, directly or indirectly, on his
                own

            

    

    

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    behalf
      or
      as a partner, stockholder (except by ownership of less than 1% of the
      outstanding stock of a publicly held corporation), director, trustee, principal,
      agent, employee, consultant or otherwise of any person, firm or corporation,
      which is engaged in any activity in which the Companies or any parent,
      subsidiary or affiliate of the Companies is engaged at the time;

    

    
      	
               

            	
              (2)

            	
              allow
                the use of his name by or in connection with any business that is
                competitive with any activity in which the Companies or any parent,
                subsidiary or affiliate of the Companies is engaged,
                or

            

    

    

    
      	
               

            	
              (3)

            	
              offer
                employment to or employ, for himself or on behalf of any competitor
                of the
                Companies or any parent, subsidiary or affiliate, any person who
                at any
                time within the prior three years shall have been employed by the
                Companies or any parent, subsidiary or affiliate of the
                Companies.

            

    

    

    (b)           The
      parties acknowledge that this Section 9 is fair and reasonable under the
      circumstances.  It is the desire and intent of the parties that the
      provisions of this Section 9 shall be enforced to the fullest extent permitted
      by law.  Accordingly, if any particular portion of this Section 9
      shall be adjudicated to be invalid or unenforceable, this Section 9 shall be
      deemed amended to:

    

    
      	
               

            	
              (1)

            	
              reform
                the particular portion to provide for such maximum restrictions as
                will be
                valid and enforceable, or if that is not
                possible,

            

    

    

    
      	
               

            	
              (2)

            	
              delete
                the portion found invalid or unenforceable, such reformation or deletion
                to apply only with respect to the operation of this Section 9 in
                the
                particular jurisdiction in which such adjudication is
                made.

            

    

    

    (c)           During
      the term of Executive’s employment, the covenants contained in this Section 9
      shall apply without regard to geographic location.  Upon the
      termination of Executive’s employment, the covenants contained in this Section 9
      shall be limited to a twenty-five (25) mile radius of any office of the
      Companies.

    

    (d)           Notwithstanding
      any other provision of this Agreement to the contrary, in the event Executive
      violates the above restrictive covenants, all amounts otherwise owing to
      Executive by the Companies shall be forfeited by Executive and the Companies,
      in
      addition to any other remedy, shall be under no further obligation to
      Executive.

    

    (e)           Executive
      shall not at any time, in any manner, while employed by the Companies or
      thereafter, either directly or indirectly, except in the course of carrying
      out
      the Companies business or as previously authorized in writing on behalf of
      the
      Companies, disclose or communicate to any person, firm, or corporation, any
      information of any kind concerning any matters affecting or relating to the
      Companies’ business or any of its data, figures, projections, estimates,
      customer lists, tax records, personnel histories, and accounting procedures,
      without

    

    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    regard
      to
      whether any or all of such information would otherwise be deemed confidential
      or
      material.

    

    
      10.           Assignability.
        The Companies may assign this Agreement and their rights hereunder in whole,
        but
        not in part, to any corporation, bank or other entity with or into which
        either
        of the Companies may hereafter merge or consolidate or to which either of
        the
        Companies may transfer all or substantially all of their respective assets,
        if
        in any such case said corporation, bank or other entity shall by operation
        of
        law or expressly in writing assume all obligations of the Companies hereunder
        as
        fully as if it had been originally made a party hereto, but may not otherwise
        assign this Agreement or its rights hereunder. The Executive may not assign
        or
        transfer this Agreement or any rights or obligations
        hereunder.

    

    
      

    

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

    

    
      

    

    
      	
              To
                First Defiance:

            	
              First
                Federal Financial Corp.

            
	 	
              601
                Clinton Street

            
	 	
              Defiance,
                Ohio 43512

            
	 	 
	
              To
                First Federal:

            	
              First
                Federal Bank of the Midwest

            
	 	
              601
                Clinton Street

            
	 	
              Defiance,
                Ohio 43512

            
	 	 
	
              To
                the Executive:

            	
              William
                J. Small

            
	 	
              1689
                Oak Pointe Lane

            
	 	
              Defiance,
                OH 43512

            

    

    
      

    

    
      12.           Supersedes
        Prior Agreement; Amendment; Waiver.  This Agreement supersedes the
        Prior Agreement.  No provisions of this Agreement may be modified,
        waived or discharged unless such waiver, modification or discharge is agreed
        to
        in writing signed by the Executive and such officer or officers as may be
        specifically designated by the Board of Directors of the Companies to sign
        on
        their behalf. No waiver by any party hereto at any time of any breach by
        any
        other party hereto of, or compliance with, any condition or provision of
        this
        Agreement to be performed by such other party shall be deemed a waiver of
        similar or dissimilar provisions or conditions at the same or at any prior
        or
        subsequent time.

    

    
      

    

    
      13.           Governing
        Law.  The validity, interpretation, construction and performance of
        this Agreement shall be governed by the laws of the United States where
        applicable and otherwise by the substantive laws of the State of
        Ohio.

    

    
      

    

    
      14.           Nature
        of Obligations.  Nothing contained herein shall create or require the
        Companies to create a trust of any kind to fund any benefits that may be
        payable
        hereunder, and to the extent that the Executive acquires a right to receive
        benefits from the Companies hereunder, such right shall be no greater than
        the
        right of any unsecured general creditor of the Companies.

    

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    
      

    

    
      15.           Headings.  The
        section headings contained in this Agreement are for reference purposes only
        and
        shall not affect in any way the meaning or interpretation of this
        Agreement.

    

    
      

    

    
      16.           Validity.  The
        invalidity or unenforceability of any provision of this Agreement shall not
        affect the validity or enforceability of any other provisions of this Agreement,
        which shall remain in full force and effect.

    

    
      

    

    
      17.           Counterparts.  This
        Agreement may be executed in one or more counterparts, each of which shall
        be
        deemed to be an original but all of which together will constitute one and
        the
        same instrument.

    

    
      

    

    
      18.           Regulatory
        Actions.  The following provisions shall be applicable to the parties
        to the extent that they are required to be included in the employment agreements
        between a savings association and its employees pursuant to Section 563.39
        (b)
        of the Regulations Applicable to All Savings Associations, 12 C.F.R. 563.39(b),
        or any successor thereto, and shall be controlling in the event of a conflict
        with any other provision of this Agreement, including without limitation
        Section
        5 hereof.

    

    
      

    

    
      (a)           If
        Executive is suspended from office and/or temporarily prohibited from
        participating in the conduct of the Companies' affairs pursuant to notice
        served
        under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance
        Act
        ("FDIA")(12 U.S.C. 1818 (e)(3) and 1818(g)(1)), the Companies' obligations
        under
        this Agreement shall be suspended as of the date of service,
        unless  stayed by appropriate proceedings.  If the charges
        in the notice are dismissed, the Companies may, in their discretion: (i)
        pay
        Executive all or part of the compensation withheld while its obligations
        under
        this Agreement were suspended, and (ii) reinstate (in whole or in part) any
        of
        its obligations which were suspended.

    

    
      

    

    
      (b)           If
        Executive is removed from office and/or permanently prohibited from
        participating in the conduct of the Companies' affairs by an order issued
        under
        Section 8(e)(4) or Section  8(g)(1) of the FDIA (12 U.S.C. 1818(e)(4)
        and (g)(1)), all obligations of the Companies under this Agreement shall
        terminate as of the effective date of the order, but vested rights of Executive
        and the Companies as of the date of termination shall not be
        affected.

    

    
      

    

    
      (c)           If
        the Companies are in default, as defined in Section 3(x)(1) of the FDIA (12
        U.S.C. 1813(x)(l)), all obligations under this Agreement shall terminate
        as of
        the date of default, but vested rights of Executive and the Companies as
        of the
        date of termination shall not be affected.

    

    
      

    

    
      (d)           All
        obligations under this Agreement shall be terminated pursuant to 12 C.F.R.
        563.39(b)(5) (except to the extent that it is determined that continuation
        of
        the Agreement for the continued operation of the Companies is
        necessary):  (i) by the Director of the Office of Thrift Supervision
        ("OTS"),

    

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    
      or
        his/her designee, at the time the Federal Deposit Insurance Corporation ("FDIC")
        or Resolution Trust Corporation enters into an agreement to provide assistance
        to or on behalf of First Federal under the authority contained in Section
        13 (c)
        of the FDIA (12 U.S.C. 1823(c)); or (ii) by the Director of the OTS, or his/her
        designee, at the time the Director or his/her designee approves a supervisory
        merger to resolve problems related to operation of the Companies or when
        the
        Companies are determined by the Director of the OTS to be in an unsafe or
        unsound condition, but vested rights of Executive and the Companies as of
        the
        date of termination shall not be affected.

    

    
      

    

    
      19.           Regulatory
        Prohibition.  Notwithstanding any other provision of this Agreement to
        the contrary, any payment made to the Executive pursuant to this Agreement,
        or
        otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
        Section 1828(K) and any regulations promulgated thereunder.

    

    
      

    

    
      20.           Additional
        Restriction on Distributions to Key Employees.

    

    
      

    

    
      (a)           Notwithstanding
        the provisions of this Agreement providing for payment of benefits upon
        termination of employment, if at the time a benefit would otherwise be payable,
        Executive is a “specified employee” [as defined below], and the payment provided
        for would be deferred compensation with the meaning of Code section 409A,
        the
        distribution of the Executive’s benefit may not be made until six months after
        the date of the Executive’s separation from service with the Company [as that
        term may be defined in Section 409A(a)(2)(A)(i) of the Code and relevant
        regulations], or, if earlier the date of death of the Executive. This
        requirement shall remain in effect only for periods in which the stock of
        the
        Company is publicly traded on an established securities
        market.

    

    

    (b)           For
      purposes of this Section 20 a “specified employee” shall mean any Executive of
      the Company who is a “key employee” of the Company within the meaning of Code
      section 416(i) as of the last day of the calendar year preceding the date
      of the termination of employment. This shall include any Executive who is
      (i) a 5-percent owner of the Company’s common stock, or (ii) an
      officer of the Company with annual compensation from the Company of $130,000.00
      or more, or (iii) a 1-percent owner of Company’s common stock with annual
      compensation from the Company of $150,000.00 or more (or such higher annual
      limit as may be in effect for years subsequent to 2005 pursuant to indexing
      section 416(i) of the Code).

    

    (c)           The
      provisions of this Section 20 have been adopted only in order to comply with
      the
      requirements added by Code section 409A. These provisions shall be
      interpreted and administered in a manner consistent with the requirements of
      Code section 409A, together with any regulations or other guidance which
      may be published by the Treasury Department or Internal Revenue Service
      interpreting such Code section 409A.

    

    

    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

          Exhibit
            10.1

        

      

    

    

    

    
      IN
        WITNESS WHEREOF, this Agreement has been executed as of the date first above
        written.

    

    
      

    

    
      	
              Attest:

            	
               

            	
              FIRST
                DEFIANCE FINANCIAL CORP.

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
              /s/
                John W. Boesling

            	
               

            	
              By:

            	
              /s/
                John C. Wahl

            
	
               John
                W. Boesling, Secretary

            	
               

            	
               

            	
              Name:
                John C. Wahl

            
	
               

            	
               

            	
               

            	
              Title:  Executive
                V.P., C.F.O.

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
              Attest:

            	
               

            	
              FIRST
                FEDERAL BANK

            
	
               

            	
               

            	
              OF
                THE MIDWEST

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
              /s/
                John W. Boesling

            	
               

            	
              By:

            	
              /s/
                John C. Wahl

            
	
               John
                W. Boesling, Secretary

            	
               

            	
               

            	
              Name:
                John C. Wahl

            
	
               

            	
               

            	
               

            	
              Title:  Executive
                V.P., C.F.O.

            
	
               

            	
               

            	
               

            	
               

            
	
              Witness:

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
              /s/
                Danielle Norden

            	
               

            	
               

            	
              /s/
                William J. Small

            
	
               

            	
               

            	
               

            	
              William
                J. Small

            

    

    

    12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}]]