AMENDMENT OF SHAREHOLDERS' AGREEMENT
THIS AMENDMENT is made as of this 31st day of January, 1997,
by and among CRUSADER HOLDING CORPORATION, a Pennsylvania corporation (the
"Company"), XXXXXX XXXX ("Xxxx"), XXXXX XXXX ("Xxxx"), XXXXXX XXXXXXX
("XxXxxxx"), XXXX X. XXXXXX, III ("Xxxxxx"), XXXXX XXXXXXX ("XxXxxxx") and
XXXXXX XXXXXX ("Xxxxxx").
Background
The Company, Xxxx and Levy (Xxxx and Xxxx sometimes,
individually, an "Initial Shareholder" and collectively, the "Initial
Shareholders") entered into a subscription and shareholders' agreement dated as
of March 1, 1996 (the "Shareholders' Agreement") pursuant to the terms of which,
inter alia, the Company was recapitalized, shares of the Company's class A
common stock, par value $.01 (the "Class A Common Stock") were issued to the
Initial Shareholders and promissory notes (the "Initial Notes") executed by the
Company were issued to the Initial Shareholders, all as more particularly
described therein.
On the date hereof, DiLella, Lawson, XxXxxxx and Xxxxxx (each,
an "Additional Shareholder" and collectively, the "Additional Shareholders") are
purchasing shares of the Class A Common Stock and are receiving promissory notes
(each, an "Additional Note" and collectively, the "Additional Notes") executed
by the Company. The Initial Shareholders and the Additional Shareholders are
sometimes individually referred to herein as a "Shareholder" and collectively as
the "Shareholders."
In conjunction with the purchase of shares of the Company's
Class A Common Stock as provided herein, the Additional Shareholders desire to
become bound by the terms and provisions of the Shareholders' Agreement. In
addition, all of the parties hereto desire to amend the Shareholders' Agreement
as provided herein.
Agreement
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. The Additional Shareholders hereby agree to be bound by all
of the terms and provisions of the Shareholders' Agreement, as amended hereby,
as though they executed the Shareholders' Agreement as of the date thereof.
Hereafter, (a) all references in the Shareholders' Agreement to "Shareholders"
shall be deemed to refer to the Initial Shareholders and the
Additional Shareholders and (b) all references in the Shareholders' Agreement to
"Shares" shall be deemed to include the shares of the Company's Class A Common
Stock purchased by the Additional Shareholders on the date hereof. The
definitions of Initial Shareholder, Initial Shareholders, Additional Shareholder
and Additional Shareholders are hereby incorporated into the terms and
provisions of the Shareholders' Agreement. For purposes of this Amendment, the
term "Additional Shareholder" shall also include any other person who
subsequently becomes a shareholder of the Company.
2. The opening paragraph of Paragraph 7 of the Shareholders'
Agreement is hereby deleted in its entirety and replaced by the following:
7. Restrictions on Transfer and Issuance. Except as
expressly provided in this Agreement, no Shareholder shall
sell, assign, transfer, give, bequeath, devise, donate or
otherwise dispose of, or pledge, deposit or otherwise
encumber, in any way or manner whatsoever, whether voluntarily
or involuntarily (a "Transfer"), any of the Shares now or
hereafter owned (of record or beneficially) by him without the
express prior written consent of the Initial Shareholders.
Shareholders shall Transfer Shares only in accordance with the
provisions of this Agreement.
3. The first two lines of Paragraph 7(b) of the Shareholders'
Agreement are deleted in their entirety and replaced by the following: "Except
as expressly provided in this Agreement, or except with the prior written
consent of the Initial Shareholders, CHC shall not..."
4. Paragraph 8 of the Shareholders' Agreement is hereby
deleted in its entirety and replaced by the following:
8. Permitted Transfers. Subject to the restrictions
contained in paragraph 7(a) above, the other express
provisions of this Agreement and applicable law, (a) any
Shareholder may Transfer his Shares to CHC or to any existing
Shareholder, or (b) any Shareholder may Transfer by creation
of trust instruments, by will or other estate planning device
his Shares to members of his immediate family and (c) Shares
may be Transferred by succession to a guardian ad litem or
other personal representative in the event of a disability of
a Shareholder, all without the prior consent thereto of CHC or
of any other Shareholder, and (d) either Initial Shareholder
may Transfer his Shares to any other person or entity upon
receipt of the prior written consent thereto of the other
Initial
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Shareholder but without the prior consent thereto of CHC or of
any other Shareholder.
5. Paragraph 9(b) of the Shareholders' Agreement is hereby
deleted in its entirety and replaced by the following:
(b) Voluntary Sale by a Shareholder. The
voluntary sale of Shares owned by any Additional Shareholder
which is a natural person. A voluntary sale by either or both
of the Initial Shareholders of their respective Shares, or any
portion thereof, shall not be subject to the terms of this
Paragraph 9.
6. In the event that both of the Initial Shareholders agree to
sell all of their Shares to a third party, upon the request of the Initial
Shareholders, or either of them, the Additional Shareholders shall sell their
Shares to such third party on the same terms and conditions.
7. In the event any Additional Shareholder resigns or is asked
to resign from the Board of Directors of Crusader Bank, such Additional
Shareholder shall sell all of his Shares to the Company. The purchase price
shall be equal to the adjusted book value of such Shares (net of all outstanding
Initial Notes and Additional Notes) plus the unpaid principal balance of such
Additional Shareholder's Additional Note.
8. The Initial Shareholders represent and warrant to the
Additional Shareholders that, as of the date hereof,
(a) the Company is authorized to issue up to
10,000,000 shares of Class A Common Stock and 1,060,000 are issued and
outstanding;
(b) the Company is authorized to issue up to 500,000
class B common stock with a par value of $.01 and no such class B common stock
is issued and outstanding; and
(c) the aggregate principal amount outstanding under
the Initial Notes is $2,920,889.
9. Each Additional Shareholder hereby represents, warrants and
acknowledges to the Company, the Initial Shareholders and each other Additional
Shareholder as follows:
(a) The sale of the Additional Shares and the
issuance of the Additional Noes have not been registered under the Securities
Act of 1933, as amended (the "Securities Act") or registered or qualified under
any state securities laws ("Blue Sky Laws") and the Additional Shares and
Additional Notes cannot be sold or transferred without compliance with the
registration
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provisions of the Securities Act or any applicable Blue Sky Laws or without
compliance with available exemptions, if any, thereunder. Therefor, each
Additional Shareholder represents and warrants that (i) the Additional Shares
being acquired by him and the Additional Note being issued to him are being
acquired solely for his own account for investment, not as a nominee or agent,
and are not being acquired for subdivision, fractionalization, resale or
distribution and (ii) he has no contract, undertaking, agreement or arrangement
with any person or entity to sell, transfer or pledge to such person or entity
or anyone else all or any portion of the Additional Shares or the Additional
Notes being acquired by or issued to him and he has no present plans or
intentions to enter into any such contract, undertaking or arrangement.
(b) Each of the Additional Shareholders has served as
a member of the Board of Directors of Crusader Bank, which comprises the
Company's only current operating activity. In connection with the acquisition of
the Additional Shares and the issuance of the Additional Notes, no Additional
Shareholder has relied upon any representations or warranties of any director,
shareholder, officer, employee or agent of the Company or Crusader Bank, other
than as to the amount of the issued and outstanding shares of the Company's
stock and the aggregate principal amount outstanding under the Initial Notes.
(c) Each of the Additional Shareholders has conducted
his own due diligence regarding the economic consequences of his investment in
the Company and the Company has made available to him all appropriate books and
records of the Company and Crusader Bank in connection with such investment.
(d) Each of the Additional Shareholders acknowledges
that any and all management fees received by the Company from Crusader Bank
under that certain management agreement dated as of March 1, 1996 (the
"Management Agreement") executed by the Company and Crusader Bank, as it may be
amended from time to time, or dividends received by the Company in lieu of such
fees, inure exclusively to the benefit of the Initial Shareholders.
10. This Amendment may be executed in one or more counterparts
with the same effect as if all parties hereto had signed the same document. All
counterparts shall be construed together and shall constitute one Amendment.
11. All other terms and provisions of the Shareholders'
Agreement shall remain unchanged and in full force and effect.
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12. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
ATTEST: CRUSADER HOLDING COMPANY, a
Pennsylvania corporation
By:/s/ Xxxxxx X. Xxxxxxx By:/s/ Xxxxxx Xxxx
------------------------ -------------------------
Xxxxxx X. Xxxxxxx, Xxxxxx Xxxx, Chairman
Secretary
WITNESSES:
/s/ Xxxxx Xxxx /s/ Xxxxxx Xxxx [SEAL]
---------------------------- ----------------------------------
XXXXXX XXXX
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxx Xxxx [SEAL]
---------------------------- ----------------------------------
XXXXX XXXX
/s/ Xxxxx Xxxx /s/ Xxxxxx XxXxxxx [SEAL]
---------------------------- ----------------------------------
XXXXXX XXXXXXX
/s/ Xxxxx Xxxx /s/ Xxxx X. Xxxxxx III [SEAL]
---------------------------- ----------------------------------
XXXX X. XXXXXX, III
/s/ Xxxxx Xxxx /s/ Xxxxx XxXxxxx [SEAL]
---------------------------- ----------------------------------
XXXXX XXXXXXX
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxx Xxxxxx [SEAL]
---------------------------- ----------------------------------
XXXXXX XXXXXX
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