Exhibit 10.8
DOMINION PROPERTIES, L.P.
Two Bala Plaza, Suite 525, Bala Cynwyd, PA 19004
(610) 667-0421
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June 4, 1996
Mr. William Bromley
President
First Sterling Bank
80 West Lancaster Avenue
Devon, PA 19333
Dear Mr. Bromley:
Pursuant to our several discussions, we are writing to confirm
agreement with respect to First Sterling Bank's existing leasehold for
approximately 13,000 square feet on the fourth floor of 80 West Lancaster
Avenue. You have advised of First Sterling's desire to consider a long term
strategic plan which may involve an alliance with a third party organization or
organizations under circumstances which may alter First Sterling's use of all or
a portion of such space. We have negotiated and agreed that, subject to
consummation of any such combination, merger or affiliation which results in the
change in control of First Sterling Bank on or before March 31, 1997, First
Sterling shall have the right at any time hereafter to modify the leasehold as
it pertains to the fourth floor space. First Sterling may exercise its right to
modify said leasehold by providing fifteen (15) days written notice accompanied
by payment to Dominion Properties of $375,000, as a result of which, effective
the later of December 31, 1996 or fifteen (15) days subsequent to said written
notice and payment, the lease of said fourth floor space shall, (a) be reduced
by 50% of the existing leasehold on the fourth floor; (b) the term of such
modified tenancy on the fourth floor shall be reduced to five years commencing
from the effective date of the modification and continuing for 60 months. First
Sterling's right to sublet shall continue as provided in the existing lease
agreement.
Further, as a result of such modification, the overall rental
under the lease of December 7, 1995 shall be amended to reflect the reduction in
base rental and adjustment of electricity allocation to reflect the 50%
reduction in the fourth floor tenancy, as follows:
2
Prorated
Share
Monthly Annual Building
Period Sq. Ft. Base Rent Base Rent Electricity
------ ------- --------- --------- -----------
1/1/96-12/31/96 23164 $36,482.00 $437,784.00 44.55%
1/1/97-12/31/97(1) 16332 $26,493.64 $317,923.72 31.41%
1/1/98-12/31/98 16332 $27,288.45 $327,461.39 31.41%
1/1/99-12/31/99 16332 $28,107.11 $337,285.30 31.41%
1/1/00-12/31/00 16332 $28,950.32 $347,403.81 31.41%
1/1/01-12/31/01 16332 $29,818.83 $357,825.97 31.41%
1/1/02-12/31/02 9500 $17,865.37 $214,384.47 18.27%
1/1/03-12/31/03 9500 $18,401.33 $220,815.99 18.27%
1/1/04-12/31/04 9500 $18,953.37 $227,440.48 18.27%
1/1/05-12/31/05 9500 $19,521.98 $234,263.70 18.27%
(1)Assumes notice on January 1, 1997; reduction in tenancy and commencement of
revised term will be initiated by timing of notice after December 31, 1996.
With respect to renewal options related to the fourth floor
space, provided First Sterling is the occupant of the modified lease for the
fourth floor space, it shall have the right to renew its occupancy of the
modified tenancy by exercising the renewal options under paragraphs 36 of the
lease dated December 7, 1995. Such renewal options are for the exclusive benefit
of First Sterling and shall not be transferrable or assignable to any sublet
tenant. The renewal options for the first floor space shall continue as provided
in the existing lease.
Subject to First Sterling remaining in good standing as a
tenant of the first floor space under the agreement of December 7, 1995, the ten
restricted parking spaces (paragraph 27(a)) adjacent to the Building shall be
provided and continued under the lease agreement.
The lease agreement of December 7, 1995 provides certain
signage benefits (paragraphs 32 and 33) to First Sterling as the principal
occupant of the Building. If the lease modification provided for herein is
exercised and the occupancy of First Sterling is reduced, Landlord's obligation
signage and the committed name of the Building shall be modified as provided for
herein. As long as First Sterling leases and occupies 20,000 square feet of
space, the existing lease provisions relating to signage and Building name shall
remain as provided in the December 7, 1995 lease. If the lease and occupancy of
First Sterling is less than 20,000 square feet, Landlord shall have the right to
recapture the name of the Building and to modify exterior signage now provided
to First Sterling. In such recapture, Landlord shall identify First Sterling's
operation and occupancy by providing First Sterling with 25 lineal feet of on
Building signage, in an area and of a type agreeable to Landlord and consistent
with local governmental rules and regulations.
3
You have asked for clarification of First Sterling's
obligation for HVAC Maintenance under paragraph 37 of the lease agreement. This
will confirm that the obligations under this paragraph are limited to HVAC items
on the 9500 square feet of the first floor space.
First Sterling's other lease obligation provided in the lease
agreement of December 7, 1995 shall continue without change, abatement or
modification.
It is specifically understood and agreed the option for the
above lease modification is being provided as an accommodation to First
Sterling's consideration of a strategic alliance or combination which will
result in a change of control of First Sterling Bank and is subject to
consummation of such alliance or combination. The rights of modification
provided for herein shall not be exercisable or effective if such alliance or
combination does not occur on or prior to March 31, 1997 at which time First
Sterling's right to modify shall be deemed null and void.
Kindly acknowledge your consent to the above agreement by
executing and returning a copy of this agreement to the undersigned.
Acknowledged and Agreed to Sincerely,
this 4th day of June , 1996 Dominion Properties
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By: \s\ William H. Bromley By: \s\ Arthur J. Kania, Jr.
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William H. Bromley Arthur J. Kania, Jr.
President
First Sterling Bank