AGREEMENT BETWEEN
CAPE BANCORP, INC.
AND
XXXXX X. XXXXX AND PATRIOT FINANCIAL PARTNERS, L.P.
This Agreement is made this 9th day of February 2009 by and between (i)
Xxxxx X. Xxxxx ("Xxxxx") and Patriot Financial Partners, L.P. ("Patriot"), as
that term is defined in paragraph 4(vi), each having an office at Xxxx Center,
0000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, and (ii) Cape
Bancorp, Inc. ("Cape"), having an office at 000 Xxxxx Xxxx Xxxxxx, Xxxx May
Xxxxx Xxxxx, Xxx Xxxxxx 00000.
RECITALS
WHEREAS, Xxxxx has confirmed his interest in serving on the Board of
Directors of Cape and Cape Bank;
WHEREAS, Cape's Board has received a recommendation from the Nominating and
Corporate Governance Committee to appoint Xxxxx to the Board, and the Board has
met and interviewed Xxxxx and has reviewed his qualifications and experience,
and believes that Xxxxx'x membership on the Board of Directors of Cape would
serve the long-term interests of Cape and its stockholders; and
WHEREAS, in consideration of the Board's decision to appoint Xxxxx to the
Board of Directors of Cape, Patriot and Xxxxx have agreed to enter into this
Agreement with Cape;
NOW, THEREFORE, in consideration of the recitals and the representations,
warranties, covenants and agreements contained herein, and other good and
valuable consideration, the parties hereto agree as follows:
1. Representations and Warranties of Patriot. Patriot hereby represents and
warrants to Cape as follows:
(i) Exhibit A sets forth the total number of shares of capital stock of
Cape which are beneficially owned by Patriot or any affiliate of Patriot (as
such terms are defined in paragraphs 4(vi) and 4(ii) hereof, respectively, with
each entity or individual included in the definition of Patriot referred to
individually as a "Patriot Group Member").
(ii) Patriot has fully disclosed in Exhibit A the total number of shares of
capital stock of Cape which it and each Patriot Group Member beneficially owns
(and to the best of their knowledge, each affiliate of Patriot owns), and
neither Patriot nor any Patriot Group Member has a right to vote any shares of
the capital stock of Cape other than as disclosed in Exhibit A.
(iii) Patriot has full and complete authority to enter into this Agreement
and to bind to the terms of this Agreement the entire number of shares of the
capital stock of Cape in which it or any Patriot Group Member has a beneficial
ownership interest and this Agreement constitutes a valid and binding agreement
of Patriot.
(iv) Xxxxx hereby represents and warrants that he has the authority to bind
Patriot to this Agreement and that by his signature below he binds himself and
Patriot.
2. Covenants of Cape. Cape covenants and agrees that during the Term of
this Agreement, as defined in paragraph 6 hereof:
(i) Simultaneous with the execution and delivery of this Agreement, the
Board of Directors of Cape will appoint Xxxxx to fill the current vacancy on the
Board of Directors of Cape for an initial term commencing at the February 2009
meeting of Cape's Board of Directors and ending at the time of Cape's 2011
annual meeting of stockholders.
(ii) Simultaneous with the execution and delivery of this Agreement, Cape
shall take such action as may be necessary to (a) appoint Xxxxx to fill the
current vacancy on the Board of Directors of Cape Bank for an initial term
commencing at the February 2009 meeting of Cape Bank's Board of Directors and
ending at the time of Cape Bank's 2009 annual meeting of sole stockholder, and
(b) elect Xxxxx to the Board of Directors of Cape Bank at the 2009 annual
meeting of sole stockholder to the class of directors whose terms expire at the
2011 annual meeting of sole stockholder .
(iii) After such appointments effected pursuant to paragraphs 2(i) and
2(ii) above, so long as Patriot beneficially owns at least 4.9% of the issued
and outstanding shares of common stock of Cape, Cape will be required to
nominate Xxxxx to its Board of Directors and to recommend to Cape's stockholders
the election of Xxxxx at Cape's annual meeting of stockholders, subject to the
exercise of each Cape director's fiduciary duties. If Patriot no longer
beneficially owns the minimum number of shares of common stock of Cape specified
in the prior sentence, Cape will have no further obligations under this
paragraph 2(iii). Cape shall use its reasonable best efforts to have Xxxxx
elected as a director of Cape and Cape shall solicit proxies for Xxxxx to the
same extent as it does for any of its other nominees to the Board of Directors.
In addition to the foregoing, so long as Patriot owns at least 4.9% of Cape's
issued and outstanding shares of common stock, Cape shall take all necessary
steps to have Xxxxx continue to be elected as a director of Cape Bank and shall
vote its shares of Cape Bank stock in favor of Xxxxx'x election as a director of
Cape Bank, in each case subject to the exercise of Cape's fiduciary duties.
3. Covenants of Xxxxx and Patriot. Each of Xxxxx and Patriot covenants and
agrees that during the Term of this Agreement:
(i) They shall not acquire, or offer or agree to acquire, or act in concert
with any affiliate, group or other person to acquire, or offer or agree to
acquire, directly or indirectly, beneficial ownership of, or the right to vote,
any shares of capital stock of Cape or any securities convertible into such
capital stock that would result in Patriot's beneficial ownership (as would be
reported pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
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amended) in the aggregate of 19.9 % or more of any class of voting securities of
Cape.
(ii) They shall not directly or indirectly solicit, or act in concert with
any affiliate, group or other person to solicit, "proxies," or directly or
indirectly become a "participant" or otherwise engage in any "solicitation" (as
such terms are defined in Regulation 14A under the Securities Exchange Act of
1934, as amended) with respect to any matter not recommended or approved by
Cape's Board of Directors or engage in any of the foregoing activities on behalf
of any nominee for election as a director who is not supported or was not
nominated by Cape's Board of Directors.
(iii) They shall not directly or indirectly submit or encourage the
submission of any nomination for election as director or any stockholder
proposal for business at a meeting of Cape's stockholders.
(iv) They shall vote, and shall require each Patriot Group Member to vote,
all shares beneficially owned (a) in favor of any nominee for election as
director submitted by Cape's Board of Directors, (b) against any nominee for
election as director not submitted by, or who is opposed by Cape's Board of
Directors, and (c) in accordance with the recommendations of Cape's Board of
Directors on all procedural matters. Furthermore, they shall not, nor shall they
act in concert with any affiliate, group or other person to join with or assist
any person or entity, directly or indirectly in opposing, or make any statement
in opposition to, any director nomination submitted by Cape's Board of Directors
to a vote of Cape's stockholders.
(v) They shall not vote, nor shall they act in concert with any affiliate,
group or other person to vote, for any nominee or nominees for election to the
Board of Directors of Cape, other than those nominated by Cape's Board of
Directors, and no Patriot Group Member shall consent to become a nominee for
election as a director of Cape unless such person has been nominated by Cape's
Board of Directors.
(vi) They shall not directly or indirectly act in concert with any group or
other person to acquire Cape, and if any offer or inquiry concerning an offer to
acquire Cape shall be received they shall refer such offer or inquiry directly
and solely to the Chairman of the Board of Directors and/or to the Chief
Executive Officer of Cape.
(vii) They shall not directly or indirectly participate or act in concert
with any affiliate, group or other person to participate, by encouragement or
otherwise, in any litigation against or derivatively on behalf of Cape, except
for testimony which may be required by law, and except as may occur in the
ordinary course of business with respect to any loan, deposit or other
transaction where a Patriot Group Member or an affiliate is dealing with Cape as
a customer.
(viii) They shall not provide, nor shall they act in concert with any
person to provide, any funds, services or facilities, to any person in support
of any activity by such person that would be a violation of their covenants
under the provisions of this paragraph 3 if undertaken by any of them.
(ix) Nothing contained in this paragraph 3 shall be interpreted to prohibit
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Xxxxx from voting, as a director, in such manner as he deems appropriate on any
matter which may come before the Board of Directors or any committee of Cape or
Cape Bank, nor shall the same prohibit him from including in any disclosure by
Cape under the Securities Exchange Act of 1934, any statement explaining his
vote if he is required by law or regulation to include such an explanation in
such disclosure.
4. Definitions. As used in this Agreement, the following terms shall have
the meanings indicated, unless the context otherwise requires:
(i) The term "acquire" means every type of acquisition, whether
effected by purchase, exchange, operation of law or otherwise.
(ii) The term "acting in concert" means (i) knowing participation in a
joint activity or conscious parallel action towards a common goal whether
or not pursuant to an express agreement, or (ii) a combination of pooling
of voting or other interests in the securities of an issuer for a common
purpose pursuant to any contract, understanding, relationship, agreement or
other arrangement, whether written or otherwise.
(iii) The term "affiliate" means a person or entity that directly, or
indirectly through one or more intermediaries, controls or is controlled
by, or is under common control with, another person.
(iv) The terms "beneficial ownership" or "beneficially owned" shall be
determined pursuant to Rule 13d-3 under the Securities Exchange Act of
1934.
(v) The term "control" (including the terms "controlling," "controlled
by," and "under common control with") means the possession, direct or
indirect, or the power to direct or cause the direction of the management,
activities or policies of a person or organization, whether through the
ownership of capital stock, by contract, or otherwise.
(vi) The term "Patriot Financial Partners, L.P." or "Patriot" shall
mean Patriot Financial Partners, L.P., a Delaware limited partnership;
Patriot Financial Partners Parallel, L.P., a Delaware limited partnership;
Patriot Financial Partners GP, L.P., a Delaware limited partnership;
Patriot Financial Partners GP, LLC, a Delaware limited liability company;
W. Xxxx Xxxxxx; Xxx X. Xxxxxx; Xxxxx X. Xxxxx; and/or any person affiliated
with the persons specified in this paragraph.
(vii) The term "person" includes an individual, group acting in
concert, a corporation, a partnership, an association, a joint stock
company, a trust, an unincorporated organization or similar company, a
syndicate, or any other group formed for the purpose of acquiring, holding
or disposing of the equity securities of Cape.
(viii) The term "vote" means to vote in person or by proxy, or to give
or authorize the giving of any consent as a stockholder on any matter.
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5. Remedies. Cape and Patriot acknowledge and agree that a breach or
threatened breach by either party may give rise to irreparable injury
inadequately compensable in damages, and accordingly each party shall be
entitled to injunctive relief to prevent a breach of the provisions hereof and
to enforce specifically the terms and provisions hereof in any state or federal
court having jurisdiction, in addition to any other remedy to which such
aggrieved party may be entitled to at law or in equity. In the event either
party institutes any legal action to enforce such party's rights under, or
recover damages for breach of, this Agreement, the prevailing party or parties
in such action shall be entitled to recover from the other party or parties all
costs and expenses, including but not limited to actual attorneys' fees, court
costs, witness fees, disbursements and any other expenses of litigation or
negotiation, incurred by such prevailing party or parties. Each Patriot Group
Member shall have the right of contribution from the each other Patriot Group
Member for any damages paid or expenses incurred (including attorneys' fees)
pursuant to this provision.
6. Term. This Agreement shall remain in effect (the "Term of this
Agreement") until the later of (i) the completion of the 2011 annual meeting of
stockholders of Cape, and (ii) the date Xxxxx is no longer a member of the Board
of Directors of Cape and Cape Bank.
7. Publicity. Any press release or other publicity with respect to this
Agreement or any provisions hereof shall be jointly prepared and issued by the
parties hereto. During the Term of this Agreement, no party to this Agreement
shall cause, discuss, cooperate or otherwise aid in the preparation of any press
release or other publicity concerning any other party to this Agreement or its
operations without prior approval of such other party.
8. Notices. All notice requirements and other communications shall be
deemed given when delivered or on the third succeeding business day after being
mailed by registered or certified mail, return receipt requested, addressed to
Patriot and Cape below:
Patriot: Xxxxx X. Xxxxx
Xxxx Center, 0000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxx, Esq.
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, XX, 00xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Cape: Xxxxxxx X. Xxxxxx, President
and Chief Executive Officer
Cape Bancorp, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxx May Court House, New Jersey 08210
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With a copy to: Xxxx Xxxx, Esq.
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, PC
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
9. Governing Law and Choice of Forum. Maryland law, unless applicable
federal law or regulation is deemed controlling, shall govern the construction
and enforceability of this Agreement. Any and all actions concerning any dispute
arising hereunder shall be filed and maintained in a state or federal court, as
appropriate, sitting in the State of New Jersey, in either Cape May County or
Atlantic County.
10. Severability. If any term, provision, covenant or restriction of this
Agreement is held by any governmental or regulatory authority or a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
11. Survival of Representations. Warranties and Agreements. All
representations, warranties, covenants and agreements made herein shall survive
the execution and delivery of this Agreement.
12. Amendments. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.
13. Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original, but each of which together shall constitute one and
the same agreement.
14. Duty to Execute. Each party agrees to execute any and all documents,
and to do and perform any and all acts and things necessary or proper to
effectuate or further evidence the terms and provisions of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned or duly authorized officers thereof as of the day and year first
above written.
/s/ Xxxxx X. Xxxxx
-------------------------------------------
Xxxxx X. Xxxxx, personally and as agent for
the persons and entities named in Paragraph
4(vi)
/s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx, President and Chief
Executive Officer, Cape Bancorp, Inc. and
Cape Bank.
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Exhibit A
The following are members of the Patriot Financial Group:
o Patriot Financial Partners, L.P., a Delaware limited partnership (the
"Patriot Fund");
o Patriot Financial Partners Parallel, L.P., a Delaware limited
partnership (the "Patriot Parallel Fund" and together with the Patriot
Fund, the "Funds");
o Patriot Financial Partners GP, L.P., a Delaware limited partnership
and general partner of the Funds ("Patriot GP");
o Patriot Financial Partners GP, LLC, a Delaware limited liability
company and general partner of Patriot GP ("Patriot LLC"); and
o W. Xxxx Xxxxxx, Xxx X. Xxxxxx and Xxxxx X. Xxxxx as general partners
of the Funds and Patriot GP and as members of Patriot LLC.
The members of Patriot Financial Group and their affiliates beneficially own the
following number of shares of common stock of Cape:
Patriot Fund beneficially owns 655,051 shares of common stock of Cape.
Patriot Parallel Fund beneficially owns 221,154 shares of common stock of Cape.
Because (i) Messrs. Xxxxxx, Xxxxxx and Xxxxx serve as general partners of the
Funds and Patriot GP and as members of Patriot LLC, (ii) Patriot LLC serves as
general partner of Patriot GP and (iii) Patriot GP serves as general partner of
the Funds, each of Messrs Xxxxxx, Xxxxxx and Xxxxx, Patriot LLC and Patriot GP
may be deemed to beneficially own the 876,205 shares of common stock of Cape
held by the Funds.
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