Document:

Exhibit 10.7

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (“Lease”) is made as of the 1” day of June, 2012 by and between RlCHARD B. and WENDY A. BOYER (“Lessor”), and EXCHANGE UNDERWRITERS, INC., a Pennsylvania corporation (“Tenant”).

 

WITNESSETH:

 

WHEREAS, in consideration of the rents, covenants and agreements hereinafter set forth, the parties hereto do enter into the following agreement:

 

ARTICLE I

LEASED PREMISES AND TERM

 

1.1                               Leased premises.

 

Lessor hereby leases to Tenant, and Tenant hereby rents from Lessor, all of the following property owned by Lessor and located in Canonsburg, Washington County, Pennsylvania: 0) all that certain lot on which the Building (as defined below) is located, as more fully described on Exhibit A attached hereto (the “Land”), and (ii) that certain office building known and numbered as 121 West Pike Street, Canonsburg, Pennsylvania (the “Building”, and collectively with the Land, the “Premises”).

 

1.2                               Lease Term.

 

The term of this Lease shall commence on June 1, 2012 and shall end on May 31, 2017 (the “Lease Term”). Tenant shall have the option to renew the Lease for one additional five (5)-year period, upon all of the terms set forth herein, but at a market rental determined by an independent qualified real estate appraiser, the expense of which shall be equally shared by Lessor and Tenant. Tenant shall exercise the option by giving Lessor written notice thereof at least ninety (90) days prior to the expiration of the initial five-year term.

 

ARTICLE 2

RENT

 

2.1                               Minimum Rent.

 

During the five-year Lease Term, Tenant covenants and agrees to pay to Lessor, without notice, demand, counterclaim or setoff, at Lessor’s address for notices specified herein, as rent (“Minimum Monthly Rent”) for the Premises an amount equal to One Thousand Seven Hundred and 00/100 ($1,700.00) per month. Minimum Monthly Rent shall be payable in advance of the first day of the Lease Term and on the first day of each and every calendar month thereafter during the Lease Term. The payment shall be proratably reduced in the case of any partial calendar month for which such payment is made.

 

2.2                               Miscellaneous Rent Provisions.

 

All Minimum Monthly Rent payments and all other amounts to be paid by Tenant hereunder (“Additional Rent”) which are not paid within five (5) days of the date thereof shall be subject to late charge of five percent (5%) of the amount due.

 

2.3                               Real Estate Taxes.

 

Lessor shall, throughout the Lease Term, pay all real estate taxes (as hereinafter defined) assessed or imposed upon the Premises.

 

 

2.4                               Lessor’s Expenses.

 

If Lessor pays any monies or incurs any expense to correct a breach of this Lease by Tenant or to do anything in this Lease required to be done by Tenant, or incurs any expense (including, but not limited to, attorneys’ fees and court costs) as a result of Tenants’ failure to perform any of Tenant’s obligations under this Lease, all amounts so paid or incurred shall, after five (5) days’ notice to Tenant, be considered Additional Rent payable by Tenant with the first Minimum Monthly Rent installment thereafter becoming due and payable, and may be collected as provided by law in the case of rent.

 

ARTICLE 3

UTILITIES

 

Tenant shall pay as Additional Rent hereunder all charges for steam, electricity, gas, water, sewer, telephone service and other utilities furnished to the Premises, whether furnished by Lessor or directly by a utility company. Tenant covenants that all such charges shall be promptly paid directly to the providers of such services when due and shall indemnify and hold Lessor harmless from any fees, charges or assessments by any such utility company. In the event that Lessor is required to pay any utility service fees for the Premises, such fees shall be deemed Additional Rent hereunder.

 

ARTICLE 4

CONDUCT OF BUSINESS BY TENANT

 

4.1                               Use of Premises.

 

The Premises shall be occupied and used by Tenant solely as office space, and Tenant shall not use or permit or suffer the use of the Premises for any other business or purpose.

 

4.2                               Operation  by Tenant.

 

Tenant covenants and agrees that it will: store garbage, trash, rubbish and other refuse in proper waste containers on the Premises, and remove the same frequently and regularly and, if directed by Lessor, by such means and methods and at such times and intervals as are designated by Lessor, all at Tenant’s cost; not permit any objectionable advertising medium visible Or audible outside the Premises; keep all mechanical equipment in good working order and condition; not commit or permit waste or nuisance upon the Premises, not permit or cause unpleasant odors or unreasonable noise to emanate or be dispelled from the Premises; comply with all laws, ordinances, rules and regulations of governmental, public private and other authorities and agencies with respect to the use or occupancy of the Premises, and including but not limited to the Williams-Steiger Occupational Safety and Health Act; not permit any noxious, toxic, or corrosive fuel or gas, dust, dirt or fly ash on the Premises; not place a load on any floor of the Premises which exceeds the floor load per square foot which such floor was designed to carry.

 

4.3                               Painting, Decorating, Displays. Alterations.

 

Tenant will not, without Lessor’s prior written consent, paint, decorate or change the architectural treatment of any part of the exterior of the Premises nor any part of the interior of the Premises visible from the exterior nor make any structural alterations, additions or changes in the Premises, and will promptly remove any paint, decoration, alteration, addition or changes applied or installed without Lessor’s approval and restore the Premises to an acceptable condition or take such other action with respect thereto as Lessor directs.

 

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4.4                               Liability of Lessor.

 

Lessor shall not be liable to Tenant or to Tenant’s employees, agents, licensees, invitees or visitors, or to any other person whomsoever, for (i) any injury or damage to person or property occurring in, on, over or under the Premises or any part thereof, whether arising from latent or patent defects, or from repair or defect in or failure of: pipes or wiring, or the backing up of drains or the bursting or leaking of pipes, faucets, and plumbing fixtures, or gas, water, steam, electricity or oil leaking, escaping, or flowing into the Premises, unless caused by the negligence or willful misconduct of Lessor; or (ii) any loss or damage to any property or person occasioned by theft, fire, act of God, public enemy, injunction, riot, insurrection, war, court order, requisition, or order of governmental authority, or any other matter beyond the control of Lessor. Tenant agrees that all personal property upon the Premises shall be at the risk on Tenant only, and that Lessor shall not be liable for any damage thereto or theft thereof.

 

4.5                               Tenant’s Indemnification of Lessor.

 

Tenant agrees that it will indemnify and hold and save Lessor whole and harmless of, from and against (i) all fines, suits, loss, cost, liability, claims, demands, actions, and judgments of every kind and character by reason of any breach, violation, or nonperformance of any term, provision, covenant, agreement, or condition on the part of Tenant hereunder; and (ii) all claims, demands, actions, damages, loss, cost, liabilities, expenses, and judgments suffered by, recovered from or asserted against Lessor on account of injury or damage to person or property to the extent that any such damage or injury may be incident to, arise out of, or be caused, either proximately or remotely, wholly or in part, by an act, omission, negligence, or misconduct on the part of Tenant or any of its agents, servants, employees, contractors, patrons, guests, licensees, or invitees or of any other person entering upon the Premises under or with the express or implied invitation or permission of Tenant or when any such injury or damage is the result, proximate or remote, of the violation by Tenant or any of its agents, servants, employees, contractors, patrons, guests, licensees, or invitees of any law, ordinance, or governmental order of any kind, or when ally such injury or damage may in any other way arise from or out of the occupancy or use by Tenant, its agents, servants, employees, contractors, patrons, guests, licensees, or invitees, of the Premises.

 

4.6                               Certain Rights Reserved By Lessor.

 

Lessor shall have the following rights, exercisable without notice and without liability to Tenant for damage or injury to property, persons, or business and without effecting an eviction, constructive or actual, or disturbance of Tenant’s use of possession or giving rise to ally claim for setoff or abatement of rent:

 

A.            To retain at all times, and to use in appropriate instances, keys to all doors within and into the Premises. No locks shall be changed or added without the prior written consent of Lessor.

 

B.            To have and retain a paramount title to the Premises free and clear of any act of Tenant purporting to burden or encumber them.

 

ARTICLE 5

MAINTENANCE OF LEASED PREMISES

 

5.1                               Repairs.

 

Lessor shall be responsible for major structural repairs to the Premises (such as roof, exterior walls, foundation and parking areas) and, unless this Lease is terminated pursuant to Section 5.4 below, repairs and replacements necessitated by fire and other casualties. All other repairs (including, without limitation, repairs to the principal systems relating to the Premises, such as HVAC, plumbing and electrical) shall be the responsibility of Tenant.

 

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5.2                               Maintenance by Tenant.

 

Except as otherwise provide in Section 5.1 above, Tenant shall at all times keep the Premises (including all entrances, vestibules, sidewalks and outside areas) and all equipment, partitions, window and window frames and moldings, glass doors, door openers and fixtures in good order, condition and repair and clear, orderly, sanitary and safe, damage by unavoidable casualty excepted (including, but not limited to, doing such things as are necessary to cause the Premises to comply with applicable laws, ordinances, rules, regulations and orders of governmental and public bodies and agencies). If replacement of equipment, fixtures and appurtenances located therein is necessary, Tenant shall replace the same with new equipment, fixtures and appurtenances, and repair any and all damage done in or by such replacement. Tenant shall maintain the grass and grounds, and keep the sidewalks and outside areas surrounding the Building free from snow, ice, or any other obstructions and maintain said areas in a safe condition. If Tenant fails to perform its obligations hereunder, Lessor may (but shall not be obligated to), after thirty (30) days notice, perform Tenant’s obligations or perform work resulting from Tenant’s acts or omissions and add the cost of the same to the next installment of Minimum Monthly Rent due hereunder. If the obligation to be performed is of a nature requiring action before the expiration of thirty (30) days, such notice will not be required.

 

5.3                               Surrender of Premises.

 

At the expiration of the Lease Term, Tenant shall surrender the Premises in the same condition as they were in on the commencement date, reasonable wear and tear and damage by casualty excepted, and deliver all keys for, and all combinations of locks, safes and vaults in, the Premises to Lessor at Lessor’s notice address.

 

5.4                               Casualty.

 

Should the Premises be damaged, destroyed or rendered unfit, wholly or partially, for use and occupancy by fire or other casualty, Lessor shall, at its option, either promptly replace or repair the same, or terminate this Lease, or permit Tenant to replace or repair the same if Tenant should so desire. If the damage is such that restoration within ninety (90) days is not feasible, then Tenant shall have the right to terminate this Lease. Rent shall be proratably abated during any period of restoration.

 

5.5                               Condemnation.

 

If, during the Lease Term, all of the Premises should be taken for any public or quasi-public use under any law, ordinance, or regulation or by right of eminent domain, or should the Premises be sold to the condemning authority under threat of condemnation, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective as of the date of the taking of possession of the Premises by the condemning authority. If less than all of the Premises shall be taken for any public or quasi-public use under any law, ordinance or regulation, or by right of eminent domain, or should be sold to the condemning authority under threat of condemnation, at Lessor’s option this Lease shall not terminate, but Lessor shall forthwith at its sole expense restore and reconstruct the building and other improvements situated on the Premises, provided such restoration and reconstruction shall make the same reasonably tenantable and suitable for the uses for which the Premises are leased. The rent payable hereunder during the unexpired portion of this Lease shall be adjusted equitably. In any event, any condemnation award, or purchase price in lieu thereof, for the taking of all or any portion of the Premises shall be the property of Lessor whether such award or purchase price shall be made as compensation for diminution in value of the leasehold or for the taking of the fee, and Tenant hereby assigns to Lessor all its right, title and interest in and to any such award or purchase price. Nothing contained herein, however, shall be deemed to preclude Tenant from obtaining, or to give Lessor any interest in, any award to lessee for moving expenses or for loss of or damage to Tenant’s fixtures, equipment or other property or for damages for cessation or interruption of Tenant’s business.

 

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ARTICLE 6

INSURANCE

 

Tenant agrees to carry public liabili1y insurance on the Premises during the Lease Term, covering the Tenant and naming the Lessor as an additional named insured, with terms and companies satisfactory to Lessor, with limits of not less than $1,000,000 for bodily injury, including death, and personal injury for anyone occurrence, $500,000 property damage insurance, or a combined single limit of $1,000,000. Tenant’s insurance will include contractual liabili1y coverage recognizing this Lease, and provide that Lessor and Tenant shall be give a minimum ofthir1y (30) days written notice by the insurer prior to cancellation, termination or reduction in such insurance coverages. Lessor shall carry insurance against fire and other risks of physical loss or damage to the Premises ill the amount of the full replacement value thereof. All of the insurance coverages carried by Lessor and Tenant shall waive subrogation with respect to the other party. Each party shall, from time to time upon request, provide the other party with certificates or copies of the policies, evidencing that such insurance is in full force and effect and stating the terms thereof.

 

ARTICLE 7

ASSIGNMENT, SUBLETTING AND CONCESSIONS

 

Tenant shall not sell, assign, mortgage, pledge or in any manner transfer this Lease or any interest therein, not sublet all or any part of the Premises, nor license concessions nor lease departments therein, without the prior written consent of Lessor, which shall not be unreasonably withheld.

 

ARTICLE 8

DEFAULT BY TENANT

 

8.1                               Right to Re-Enter.

 

The following shall be considered for all purposes to be defaults under and breaches of this Lease: (a) ally failure of Tenant to pay any Minimum Monthly Rent or Additional Rent within (l0) days after the due date thereof; (b) any failure by Tenant to perform or observe any of the other terms, provisions, conditions and covenants of this Lease for more than ten (10 days after written notice from Lessor of such failure; (c) the bankruptcy or insolvency of Tenant or the filing by or against Tenant of a petition in bankruptcy or for reorganization or arrangement or for the appointment of a receiver or trustee of all or a portion of Tenant’s proper1y, or Tenant’s assignment for the benefit of creditors; (d) if Tenant abandons or vacates or ceases to conduct its business on the Premises; (e) this Lease or Tenant’s interest herein or in the Premises are executed upon or attached; or (f) the Premises come into the hands of any person other than as expressly permitted under this lease, through fault of Tenant. In any such event, Lessor, in addition to all other rights or remedies it may have, shall have the right thereupon or at any time thereafter to terminate this Lease by giving notice to Tenant stating the date upon which such termination shall be effective, and shall have the right, either before or after any such termination, to re-enter and take possession of the Premises, remove all persons and property from the Premises, store such property at Tenant’s expense, and sell such property, if necessary to satisfy and deficiency in payments by Tenant as required hereunder, all without notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage occasioned thereby.

 

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8.2                               Acceleration.

 

Besides all other rights or remedies it may have by law or in equity, Lessor shall have the right, upon default by Tenant hereunder: (i) to declare all rent and other payments for the entire unexpired term of this Lease at once due and payable and, if not paid forthwith upon Lessor’s demand, then to resort to legal process for collection of all accelerated payments due under this Lease; or (ii) to terminate this Lease and resort to legal process for collection of damages and/or eviction; or (iii) re-enter and attempt to relet without terminating this Lease and remove all persons and property from the Premises, and to remove and store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby.

 

8.3                               Right to Relet.

 

If Lessor re-enters the Premises as above provided, or if it takes possession pursuant to legal proceedings or otherwise, it may either terminate this Lease or it may, from time to time, without terminating this Lease, make such alterations and repairs as it deems advisable to relet the Premises, and relet the Premises or any part thereof for such term or terms (which may extend beyond the Lease Term) and at such rentals and upon such other terms and conditions as Lessor in its sole discretion deems advisable; upon each such reletting, all rentals received by Lessor therefrom shall be applied, first, to any indebtedness other than rent due hereunder from Tenant to Lessor; second, to pay any costs and expenses of reletting, including brokers’ and attorneys’ fees and costs of alterations and repairs; third, to rent due hereunder, and the residue, if any, shall be held by Lessor and applied in payment of future rent as it becomes due hereunder. If rentals received from such reletting during any month are less than that to be paid during that month by Tenant hereunder, Tenant shall immediately pay any such deficiency to Lessor. No re-entry or taking possession of the Premises by Lessor shall be construed as an election to terminate this Lease unless a written notice of such termination is given by Lessor.

 

ARTICLE 9

ACCESS BY LESSOR

 

Lessor, its agents and employees, shall have the right to enter the Premises from time to time at reasonable times, in such manner as not to interfere with Tenant’s operations, to examine the same, show them to prospective purchasers and other persons, and make (without any obligation to do so) such repairs, alterations, improvements or additions as Lessor deems desirable. Rent shall not abate while any such repairs, alterations, improvements or additions are being made. In addition, during any apparent emergency, Lessor or its agent may enter the Premises forcibly, and at any time, without liability therefor and without in any manner affecting Tenant’s obligations under this Lease. Nothing herein contained, however, shall be deemed to impose upon Lessor any obligation, responsibility or liability whatsoever for any care, maintenance or repair, except as otherwise herein expressly provided.

 

ARTICLE 10

HOLDING OVER, SUCCESSORS

 

10.1                        Holding Over.

 

If Tenant holds over or occupies the Premises beyond the Lease Term, Tenant shall pay Lessor a sum equal to 125% of the Minimum Monthly Rent, prorated for the number of days of such holding over.

 

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10.2                        Successors.

 

All rights and liabilities herein given to or imposed upon the respective parties hereto shall bind and inure to the several respective successors and permitted assigns of the parties. Lessor, at any time and from time to time, may make an assignment of its interest in this Lease and, in the event of such assignment; Lessor and its successors and assigns (other than the assignee of Lessor’s interest in this Lease) shall be released from any and all liability thereafter accruing hereunder.

 

ARTICLE 11

QUIET ENJOYMENT

 

If Tenant pays the rents and other amounts herein provided, observes and performs all the covenants, terms and conditions hereof, Tenant shall peaceably and quietly hold and enjoy the Premises for the Lease Term without interruption by Lessor or any person or persons claiming by, through or under Lessor, subject, nevertheless, to the terms and conditions of this Lease.

 

ARTICLE 12

PURCHASE OPTION

 

12.1                        Grant of Option.

 

At any time during the Lease Term, Tenant shall have the first right and option to purchase the Premises, at a price determined in the manner set forth below:

 

A.            If Tenant wishes to exercise its option, Tenant shall notify Lessor in writing of its interest in purchasing the Premises.

B.            Within thirty (30) days of Lessor’s receipt of such notice, the parties shall either (i) mutually agree upon the value of the Premises, or (ii) mutually agree upon the selection of a certified appraiser to determine such value. In the event that they are unable to so agree, then the Lessor shall appoint one certified appraiser, the Tenant shall appoint another, and the two appraisers so selected shall appoint a third. Each such appraiser shall within thirty (30) days of his appointment, submit a written appraisal, and the three appraisals shall be averaged. Thereafter, the appraisal which varies the most from the average shall be disregarded, and the remaining two appraisers shall be averaged. The result shall be the value of the Premises.

C.            Within ten (10) days after determination of the value of the Premises (the “Determined Value”), Tenant shall notify Lessor in writing as to whether tenant wishes to exercise its purchase option at a price equal to the Determined Value. Such notice shall legally bind the Lessor to sell, and the Tenant to purchase, the Premises upon the terms and conditions set forth in Section 12.2 below.

 

12.2                        Terms of Purchase and Sale.

 

The consummation of the purchase and sale of the Premises (the “Closing”) shall be held under the following conditions:

 

A.            At the closing, the purchase price shall be payable to Lessor by certified or cashier’s check or by wire transfer. Tenant shall receive no credit for rent paid to Lessor during the Lease Term.

B.            The Closing shall be held within thirty (30) days of the date of Tenant’s notice to Lessor of Tenant’s election to purchase described in Section 12.1 C, and shall be at such time and place as is agreed by the parties.

 

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C.            At the Closing, Lessor shall, by general warranty deed, grant and convey to Tenant, in fee simple, free and clear of all liens and encumbrances (except any restrictions, reservations, easements and rights of way or record, none of which shall materially impair the use of the Premises), good and marketable title (and such as will be insurable by any responsible title insurance company at regular rates to the Premises).

D.            The conveyance shall be made together with all improvements and all easements and appurtenances appertaining.

E.             Realty transfer taxes shall be equally shared by the parties, and all costs in connection with obtaining title insurance, recording fees and similar charges shall be paid in accordance with local real estate practice.

F.              Tenant shall pay all Minimum Monthly Rent and Additional Rent up to the date of closing.

 

ARTICLE 13

MISCELLANEOUS

 

13.1                        Waiver

 

No waiver by Lessor or Tenant of any breach of any term, covenant or condition hereof shall be deemed a waiver of the same or any subsequent breach of the same or any other term, covenant or condition. The acceptance of rent by Lessor shall not be deemed a waiver of any earlier breach by Tenant of any term, covenant or condition hereof, regardless of Lessor’s knowledge of such breach when such rent is accepted. No covenant, term or condition of this Lease shall be deemed waived by Lessor or Tenant unless waived in writing.

 

13.2                        Entire Agreement.

 

There are no representations, covenants, warranties, promises, agreements, conditions or undertakings, oral or written, between Lessor and Tenant other than herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Lessor or Tenant unless in writing and signed by them

 

13.3                        Force Majeure.

 

If either party hereto shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, inability to procure material, failure of power, restrictive governmental laws or regulations, riots, insurrection war or other reason of a like nature not the fault of the party delayed in performing work or doing acts required under this Lease (excluding, however the obligation of Tenant to pay Minimum Rent or Additional Rent hereunder), the period for the performance of any such act shall be extended for a period equivalent to the period of such delay.

 

13.4                        Notices.

 

All notices from tenant to Lessor required or permitted by any provision of this lease shall be directed to Lessor as follows:

 

Richard B. Boyer

Wendy A. Boyer

132 Beverly Road

Pittsburgh, PA 15216

 

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All notices from Lessor to Tenant required or permitted hereunder shall be directed as follows:

 

Exchange Underwriters, Inc.

121 West Pike Street

Canonsburg, PA 15317

Attn: President

 

With a copy to:

First Federal Savings Bank

P.O. Box 369

Donner at Sixth

Monessen, PA 15062

Attn: President

 

All notices to be given hereunder by either party shall be in writing and delivered in person or sent by registered or certified mail, return receipt requested, postage prepaid, or by any express delivery service, addressed to the party intended to be notified at the address set forth above. Either party may, at any time, or from to time, notify the other in writing of a substitute address for that above set forth, and thereafter notices shall be directed to such substitute address. Notice given as aforesaid shall be sufficient service thereof and shall be deemed given as of the date delivered, when personally delivered, or on the third business day after being sent by registered or certified mail, or on the first business days after being sent by express delivery service.

 

13.5                        Captions and Section Numbers.

 

This lease shall be construed without reference to titles of articles and sections, which are inserted only for convenience of reference.

 

13.6                        Applicable Law.

 

This Lease shall be construed under the laws of the Commonwealth of Pennsylvania.

 

13.7                        Subordination.

 

This Lease and all rights of Tenant hereunder are subject and subordinate (i) to any mortgage or deed of trust which does now or may hereafter affect the Premises and (ii) to any and all increases, renewals, modifications, consolidations, replacements, and extensions of any such mortgage. This provision is hereby declared by Lessor and Tenant to be self-operative and no further instrument shall be required to effect such subordination of this Lease. Tenant shall, however, upon demand at any time or times execute, acknowledge, and deliver to Lessor any and all instruments and certificates that may be necessary or propel’ to more effectively subordinate this Lease and all rights of Tenant hereunder to any such mortgage or deed of trust or to confirm or evidence such subordination. In the event Tenant shall fail or neglect to ·execute, acknowledge, and deliver any such subordination agreement or certificate, Lessor may, in addition to any other remedies it may have, as the agent and attorney-in-fact of Tenant, execute, acknowledge, and deliver the same and Tenant hereby irrevocably nominates, constitutes and appoints Lessor as Tenant’s proper and legal agent and attorney in fact for such purposes. Tenant covenants and agrees, in the event any proceedings are brought for the foreclosure of any such mortgage or deed of trust, to attorney to the purchaser upon any such foreclosure sale or trustee’s sale if so requested by such purchaser and to recognize such purchaser as the Lessor under this Lease.

 

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13.8                        Estoppel Certificate.

 

Tenant will, at any time and from time to time, upon not less than twenty (20) days’ prior notice by Lessor, execute, acknowledge, and deliver to Lessor a statement in writing executed by Tenant certifying that this Lease is the entire agreement between the parties and is unmodified and in full effect (or, if there have been modifications, that this Lease is in full effect as modified, and setting forth such modifications) and the date to which the rent has been paid, that the Tenant has accepted the Premises, and either stating that to the knowledge of the signer of such certificate, no default exists hereunder or specifying each such default of which the signer may have knowledge; it being intended that any such statement by Tenant may be relied upon by any prospective purchaser or mortgagee of the Premises.

 

13.9                        Memorandum of Lease.

 

Upon the request of either party, Lessor and Tenant shall execute a Memorandum of Lease with respect to this Lease, and record the same in the office of the real estate records where the Premises are located.

 

IN WITNESS WHEREOF, Lessor and Tenant have signed and sealed this Lease Agreement as of the day and year first above written.

 

	
 
    	
TENANT:
    
	
 
    	
 
    
	
LESSOR:
    	
EXCHANGE   UNDERWRITERS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Richard B. Boyer
    	
 
    	
 
    
	
Richard   B. Boyer
    	
By:
    	
/s/ Patrick G. O’Brien
    
	
 
    	
Name:
    	
Patrick   G. O’Brien
    
	
 
    	
Title:
    	
CEO
    
	
 
    	
 
    
	
/s/ Wendy A. Boyer
    	
 
    	
 
    
	
Wendy   A. Boyer
    	
 
    

 

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EXHIBIT A

 

Description of Land

 

121 West Pike Street

Canonsburg, P A 15317

2-Story Building with basement

 

11Exhibit 10.15

 

CHANGE IN CONTROL

SEVERANCE AGREEMENT

 

THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (the “Agreement”) is entered into as of SEPTEMBER  30, 2011, by and between FIRST FEDERAL SAVINGS BANK (the “Bank”) and HENRY B. BROWN III (the “Executive”) and FEDFIRST FINANCIAL CORPORATION, the holding company for the Bank (the “Company”), as guarantor.

 

WHEREAS, the Executive has made significant contributions to the success of the Bank and the Company; and

 

WHEREAS, the Bank and the Company wish to provide additional incentives for the Executive to remain in the employment of the Bank and the Company.

 

NOW THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

 

1.                                      Termination after a Change in Control.

 

(a)                                 Cash benefit. Notwithstanding any other provisions in this Agreement, if the Executive’s employment terminates involuntarily but without Cause or voluntarily but with Good Reason, in either case within 12 months after a Change in Control, the Bank shall make a lump-sum cash payment to the Executive in an amount equal to two (2) times the Executive’s base salary (at the rate in effect immediately prior to the Change in Control or, if higher, the rate in effect when the Executive terminates employment).  Unless a delay in payment is required under Section 1(b) of this Agreement, the payment required under this Section 1(a) shall be made within five (5) business days after the Executive’s employment termination.

 

The amount payable to the Executive hereunder shall not be reduced to account for the time value of money or discounted to present value. If the Executive’s employment terminates involuntarily but without Cause before the Change in Control occurs but after discussions regarding the Change in Control commence, then for purposes of this Agreement the Executive’s employment shall be deemed to have terminated immediately after the Change in Control and, unless delay is required under Section 1(b) of this Agreement, the Executive shall be entitled to the cash benefit under this Section 1(a) within five (5) business days after the Change in Control.

 

If, following a Change in Control, the Executive is offered a “Comparable Position” by the acquirer and the Executive declines the position, the Executive will not be entitled to any benefits under this Agreement.  For purposes of this Agreement, a “Comparable Position” shall mean a position that would:

 

(i) provide the Executive with a base salary and benefits that are substantially comparable in the aggregate to those provided to the Executive prior to the Change in Control,

 

(ii) provide the Executive with an opportunity for variable bonus compensation that is comparable to the opportunity provided to the Executive prior to the Change in Control,

 

(iii) be in a location that would not require the Executive to increase his one way commute by more than twenty-five (25) miles as compared to the Executive’s commuting distance immediately prior to the Change in Control, and

 

(iv) have job skill requirements and duties that are substantially comparable to the requirements and duties of the position held by the Executive prior to the Change in Control.

 

 

(b)                                  Payment of the benefit. If the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) as of his termination of employment and the cash severance benefit under Section 1(a) of this Agreement is considered deferred compensation under Section 409A of the Code and an exemption from the six-month delay requirement for specified employees under Section 409A(a)(2)(B)(i) of the Code is not available, payment of the benefit under Section 1(a) of this Agreement shall be delayed and shall be made to the Executive in a single lump sum without interest on the first business day of the seventh (7th) month after the month in which the Executive’s employment terminates.

 

(c)                                  Change in Control defined.

 

For purposes of this Agreement, a “Change in Control” means and shall be deemed to have occurred upon the occurrence of any of the following events:

 

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

 

(ii)                                  Acquisition of Significant Share Ownership:  There is filed, or required to be filed, a report on Schedule 13D or another form or schedule (other than Schedule 13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner(s) of 25% or more of a class of the Company’s voting securities, but this clause (ii) shall not apply to beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities.

 

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

 

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

 

(d)                                  Involuntary termination with Cause defined. For purposes of this Agreement involuntary termination of the Executive’s employment shall be considered involuntary termination with Cause if the Executive shall have been terminated for any of the following reasons:

 

(i)                                 Executive’s personal dishonesty;

 

(ii)                              Executive’s incompetence;

 

(iii)                           Executive’s willful misconduct;

 

(iv)                          Executive’s breach of fiduciary duty involving personal profit;

 

(v)                             Executive’s intentional failure to perform the duties and responsibilities of his position with the Company and the Bank; or

 

(vi)                          Executive’s willful violation of any law, rule or regulation (other than traffic violations or similar offenses) that reflects adversely on the reputation of the Bank or the Company, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order.

 

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For purposes of this Agreement, no act or failure to act on the Executive’s part shall be deemed to have been intentional if it was due primarily to an error in judgment or negligence. An act or failure to act on the Executive’s part shall be considered intentional if it is not in good faith and if it is without a reasonable belief that the action or failure to act is in the Bank’s best interests. Any act or failure to act based upon authority granted by resolutions duly adopted by the board of directors or based upon the advice of counsel for the Bank shall be conclusively presumed to be in good faith and in the Bank’s best interests.

 

(e)                                   Voluntary termination with Good Reason defined. For purposes of this Agreement a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (i) and (ii) of this paragraph (e) are satisfied.

 

(i)                                 a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if any of the following occur without the Executive’s advance written consent, and the term Good Reason shall mean the occurrence of any of the following without the Executive’s advance written consent.

 

(A)                               a material diminution of the Executive’s base salary,

 

(B)                            a material diminution of the Executive’s authority, duties, or responsibilities, or

 

(C)                            a change by more than fifty (50) miles in the geographic location at which the Executive must perform services which would result in a longer commute in terms of miles for the Executive.

 

(ii)                              the Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (i) within sixty (60) days after the initial existence of the condition, and the Bank shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (i) must occur within six months after the initial existence of the condition.

 

2.                                      Continuation of Benefits.

 

(a)                                  Benefits. Subject to Section 2(b) of this Agreement, if the Executive’s employment terminates involuntarily but without Cause, or voluntarily but for Good Reason within twelve (12) months after a Change in Control, the Bank shall continue or cause to be continued life and health insurance coverage substantially identical to the coverage maintained for the Executive before termination and in accordance with the same schedule prevailing before employment termination. The insurance coverage shall cease twenty-four (24) months after the Executive’s termination.

 

(b)                                 Alternative lump-sum cash payment. If (x) under the terms of the applicable policy or policies for the insurance benefits specified in Section 2(a) of this Agreement it is not possible to continue the Executive’s coverage, or (y) if when employment termination occurs the Executive is a specified employee within the meaning of Section 409A of the Code, if any of the continued insurance coverage benefits specified in Section 2(a) of this Agreement would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available for that particular insurance benefit, instead of continued insurance coverage under Section 2(a) of this Agreement, the Bank shall pay or cause to be paid to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain that particular insurance benefit had the Executive’s employment not terminated, assuming continued coverage for twenty-four (24) months. The lump-sum payment shall be made within five (5) business days after employment termination or, if the Executive is a specified employee within the meaning of Section 409A of the Code and an exemption from the six-month delay requirement for specified employees under Section 409A(a)(2)(B)(i) of the Code is not available, on the first business day of the seventh month after the month in which the Executive’s employment terminates.

 

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3.                                      Termination for Which No Benefits Are Payable. Despite anything in this Agreement to the contrary, the Executive shall be entitled to no benefits under this Agreement if the Executive’s employment terminates with Cause, if the Executive dies while actively employed by the Bank, or if the Executive becomes totally disabled while actively employed by the Bank. For purposes of this Agreement, the term “totally disabled” means that because of injury or sickness the Executive is unable to perform the Executive’s duties. The benefits, if any, payable to the Executive or the Executive’s beneficiary or estate relating to the Executive’s death or disability shall be determined solely by such benefit plans or arrangements as the Bank may have with the Executive relating to death or disability, not by this Agreement.

 

4.                                      Term of Agreement.

 

(a)                                  The term of this Agreement shall include: (i) the initial term, consisting of the period commencing on the date of this Agreement and ending September 30, 2013, plus (ii) any and all extensions of the initial term made pursuant to this Section 4.

 

(b)                                  Commencing on September 30, 2012 (the “Renewal Date”) and continuing on each anniversary of the Renewal Date thereafter, the disinterested members of the Boards of Directors may extend the Agreement term, so that the remaining term of the Agreement, following Board action, will be two (2) years, unless Executive elects not to extend the term of this Agreement by giving proper written notice.  The Board of Directors will review the Agreement and Executive’s performance annually for purposes of determining whether to extend the Agreement term and will include the rationale and results of its review in the minutes of the meetings.  The Board of Directors will notify Executive as soon as possible after each annual review whether it has determined to extend the Agreement.

 

(c)                                   Notwithstanding the foregoing, in the event the Executive terminates employment with the Company and the Bank prior to a Change in Control, this Agreement will terminate as of the effective date of the Executive’s termination of employment.

 

5.                                      Limitation of Benefits Under Certain Circumstances.  If the payments and benefits pursuant to Sections 1 and 2 of this Agreement, either alone or together with other payments and benefits the Executive has the right to receive from the Bank, would constitute a “parachute payment” under Section 280G of the Code, the payments and benefits shall be reduced or revised, in the manner determined by the Executive, by the amount, if any, which is the minimum necessary to result in no portion of the payments and benefits being non-deductible pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the code.  The Bank’s independent public accountants will determine any reduction in the payments and benefits; the Bank will pay for the accountants’ opinion.  If the Bank and/or the Executive do not agree with the accountants’ opinion, the Bank will pay to the Executive the maximum amount of payments and benefits pursuant to Sections 1 and 2 of this Agreement, as selected by Executive, that the opinion indicates have a high probability of not causing any of the payments and benefits to be non-deductible and subject to the excise tax imposed under Section 4999 of the Code.  The Bank may also request, and the Executive has the right to demand that, a ruling from the IRS as to whether the disputed payments and benefits have such tax consequences.  The Bank will promptly prepare and file the request for a ruling from the IRS, but in no event will the Bank make this filing later than thirty (30) days from the date of the accountant’s opinion referred to above.  The request will be subject to the Executive’s approval prior to filing; the Executive shall not unreasonably withhold his approval.  The Bank and the Executive agree to be bound by any ruling received from the IRS and to make appropriate payments to each other to reflect any IRS rulings, together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.  Nothing contained in this Agreement shall result in a reduction of any payments or benefits to which the Executive may be entitled upon termination of employment other than pursuant to Sections 1 and 2 hereof, or a reduction in the payments and benefits specified below zero.

 

6.                                      This Agreement Is Not an Employment Contract. The parties hereto acknowledge and agree that (x) this Agreement is not a management or employment agreement and (y) nothing in this Agreement shall give the Executive any rights or impose any obligations to continued employment by the Bank or any subsidiary or successor of the Bank.

 

7.                                      Withholding of Taxes.  The Bank may withhold from any benefits payable under this Agreement all Federal, state, local or other taxes as may be required by law, governmental regulation, or ruling.

 

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8.                                      Successors and Assigns.

 

(a)                                  This Agreement shall be binding upon the Bank and any successor to the Bank, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank by purchase, merger, consolidation, reorganization, or otherwise. But this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank. By agreement in form and substance satisfactory to the Executive, the Bank shall require any successor to all or substantially all of the business or assets of the Bank expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform had no succession occurred.

 

(b)                                  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

 

(c)                                   This Agreement is personal in nature. Without written consent of the other party, neither party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement except as expressly provided in this Section 8. Without limiting the generality of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8, the Bank shall have no liability to pay any amount to the assignee or transferee.

 

9.                                      Notices. Any notice under this Agreement shall be deemed to have been effectively made or given if in writing and personally delivered, delivered by mail properly addressed in a sealed envelope, postage prepaid by certified or registered mail, delivered by a reputable overnight delivery service, or sent by facsimile. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank at the time of the delivery of the notice, and properly addressed to the Bank if addressed to the board of directors at the Bank’s executive offices.

 

10.                               Captions and Counterparts. The headings and subheadings in this Agreement are included solely for convenience and shall not affect the interpretation of this Agreement. 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 shall constitute one and the same agreement.

 

11.                               Amendments and Waivers. No provision of this Agreement may be modified, waived, or discharged unless the waiver, modification, or discharge is agreed to in a writing signed by the Executive and by the Bank. No waiver by either party hereto at any time of any breach by the other party hereto or waiver of compliance with any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

12.                               Severability. The provisions of this Agreement are severable. The invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions of this Agreement. Any provision held to be invalid or unenforceable shall be reformed to the extent and solely to the extent necessary to make it valid and enforceable.

 

13.                               Governing Law, Jurisdiction and Forum.  This Agreement shall be construed under and governed by the internal laws of the Commonwealth of Pennsylvania, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than Pennsylvania.  By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Pennsylvania.

 

14.                               Entire Agreement. This Agreement constitutes the entire agreement between the Bank, the Company and the Executive concerning the subject matter. No rights are granted to the Executive under this Agreement other than those specifically set forth. No agreements or representations, oral or otherwise, expressed or implied concerning the subject matter hereof have been made by either party that are not set forth expressly in this Agreement.

 

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15.                               No Mitigation Required.  The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall any profits, income, earnings, or other benefits from any source whatsoever create any mitigation, offset, reduction, or any other obligation on the part of the Executive hereunder or otherwise.

 

16.                               Internal Revenue Code Section 409A.  The Bank, the Company and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code.  If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, the provision shall be applied in a manner consistent with those requirements, despite any contrary provision of this Agreement. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A of the Code, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision. References in this Agreement to Section 409A of the Code include rules, regulations, and guidance of general application issued by the Department of the Treasury under Section 409A of the Code.

 

17.                               Source of Payments.  All payments provided in this Agreement shall be timely paid in cash or check from the general funds of the Bank.  The Company, however, unconditionally guarantees payment and provision of all amounts and benefits due hereunder to Executive and, if such amounts and benefits due from the Bank are not timely paid or provided by the Bank, such amounts and benefits shall be paid or provided by the Company.

 

IN WITNESS WHEREOF, the parties have executed this Change in Control Severance Agreement as of the date first written above.

 

 

	
 
    	
FIRST   FEDERAL SAVINGS BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Patrick G. O’Brien
    
	
 
    	
Duly Authorized Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Henry   B. Brown III
    
	
 
    	
Henry B. Brown, III
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FEDFIRST   FINANCIAL CORPORATION
    
	
 
    	
(as guarantor)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Patrick G. O’Brien
    
	
 
    	
Duly Authorized Officer
    

 

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