Exhibit 10.1 EXECUTION COPY
AMENDMENT No. 2 TO NETWORK AGREEMENT
This Amendment No. 2 to Network Agreement, dated as of September 29,
2004 (this "Amendment"), is by and among Commerce Bancorp, Inc., a New Jersey
corporation ("Bancorp"), Commerce Bank/Harrisburg, N. A., a national banking
association ("Commerce Harrisburg"), and Pennsylvania Commerce Bancorp, Inc., a
Pennsylvania corporation ("PA Bancorp"). (PA Bancorp and Commerce Harrisburg are
hereinafter both individually and collectively referred to as a "Member").
RECITALS
Since its formation Commerce Harrisburg has been a member of Bancorp's
network of banks (the "Commerce Network") and obtained access to Bancorp's
system of banking comprised of the procedures, trade secrets and other
information which related to the banking business as either originated or
adopted by Bancorp. On January 1, 1997, Bancorp and Commerce Harrisburg entered
into a Network Agreement by which Commerce Harrisburg continued its status as a
member of the Commerce Network and in April of 2002, the Network Agreement was
amended to add PA Bancorp as a party to the Network Agreement and to amend the
Network Agreement as provided therein (the Network Agreement, as amended, the
"Network Agreement").
The parties hereto now wish to further amend the Network Agreement as
provided herein.
NOW, THEREFORE, in consideration of the premises, covenants and
agreements set forth in this Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agree as follows:
1. Amendment to Section 1.2 and New Section 1.3. Section 1.2 of the
Network Agreement is hereby amended and restated in its entirety as follows and
a new Section 1.3 of the Network Agreement is hereby added to read in its
entirety as follows:
1.2 Subject to the termination provisions contained elsewhere
herein, the term of this Network Agreement shall be for a term of
five years beginning on the date hereof, subject, however, to
automatic renewal and extension for additional five year periods
as set forth below.
1.3 Either party may terminate this Agreement on any "fifth
anniversary date" of this Network Agreement by giving to the other
party written notice thereof at least 360 days prior to any such
"fifth anniversary date". The first applicable "fifth anniversary
date" shall be January 1, 2010. As a result of the foregoing
notice being given by either party hereunder, the term will expire
on the applicable "fifth anniversary date", subject to the terms
and conditions set forth herein.
2. New Section 6. New Section 6 of the Network Agreement is hereby
added to read in its entirety as follows:
6. Change In Control.
6.1 Anything in this Network Agreement to the contrary
notwithstanding, in the event there shall have been a "change in
control" (as hereinafter defined) of either PA Bancorp or Commerce
Harrisburg, Bancorp may terminate the Network Agreement upon 360
days prior written notice to the Member. In the event there shall
have been a "change in control" of Bancorp, Member may terminate
this Agreement upon 360 days prior written notice to Bancorp.
6.2 For purposes of this Section 6 of the Network Agreement, a
"change in control" shall mean a change in control of the
applicable party of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934 as amended
(the "Exchange Act"), as enacted and enforced on the date hereof,
whether or not the applicable party is subject to such reporting
requirement; provided that without limitation such a "change in
control" of a party hereto shall have been deemed to conclusively
occur when any of the following events shall have occurred without
the prior written consent of the other parties hereto:
(i) within any period of two consecutive years during the
term of the Network Agreement, a change in at a least a majority
of the members of the board of the applicable party or the
addition of seven or more new members to the board of the
applicable party; or
(ii) a person or group acting in concert as described in
Section 13(d)(2) of the Exchange Act holds or acquires beneficial
ownership within the meaning of Rule 13d-3 promulgated under the
Exchange Act of a number of common shares of the applicable party
which constitutes either (a) more than fifty percent of the shares
which voted in the election of directors of the applicable party
at the shareholders' meeting immediately preceding such
determination or (b) more than thirty percent of the applicable
party's outstanding common shares. For purposes of this Section
6.2 hereof, unexercised warrants or options or unconverted
nonvoting securities shall count, for this purpose, as
constituting beneficial ownership of the applicable party's common
shares into which the warrants or options are exercisable or the
nonvoting convertible securities are convertible, notwithstanding
anything to the contrary contained in Rule 13d-3 of the Exchange
Act; or
(iii) any merger, consolidation, share exchange,
recapitalization, business combination or other similar
transaction in which the other party thereto or its shareholders
will own 30% or more of the combined voting power of the surviving
entity resulting from any such transaction; (b) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of 30%
or more of the assets of the applicable party and its
subsidiaries, taken as a whole, in a single transaction or series
of related transactions; (c) any tender offer or exchange offer
for 30% or more of any class of equity security of the applicable
party or the filing of a registration statement under the
Securities Act of 1933, as amended, in connection therewith; (d)
any other transaction or series of related transactions pursuant
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to which any third party proposes to acquire control of assets of
the applicable party and its subsidiaries having a fair market
value equal to or greater than 30% of the fair market value of all
of the assets of the applicable party and its subsidiaries, taken
as a whole, immediately prior to such transaction; or (e) any
public announcement of a proposal, plan or intention to do any of
the foregoing or any agreement to engage in any of the foregoing.
3. Delete Section 8.1(d). Section 8.1(d) of the Network Agreement is
hereby amended and restated in its entirety as follows:
(d) [INTENTIONALLY OMITTED.]
4. Amendment to Section 8.2. The last sentence of Section 8.2 reading
"In addition, Bancorp may terminate this Network Agreement without cause upon
180 days prior written notice to Member" is hereby deleted in its entirety and
Section 8.2 of the Network Agreement is hereby amended and restated in its
entirety as follows:
8.2 Upon the occurrence of any of the events set forth in
Section 8.1, Bancorp may, without prejudice to any other rights or
remedies contained in this Network Agreement or provided by law or
equity, terminate this Network Agreement upon 360 days prior
written notice, provided, however, that if the event of default is
under Sections 8.1(a), (b), (c) and/or (e), Bancorp shall give
Member written notice of the event of default and provide Member
with 30 days to cure such event of default.
5. Delete Section 8.3. Section 8.3 of the Network Agreement is hereby
deleted in its entirety.
6. Amendment to Section 8.4(c). The last sentence of Section 8.4(c) is
hereby amended and restated in its entirety as follows:
Further, Member shall make such modifications or alterations to
the former Member premises immediately upon termination of this
Network Agreement as may be necessary to prevent the operation of
any business thereon by itself or others in derogation of the
Commerce Network and Member shall ensure that all Member premises
(both on the date of the termination of this Network Agreement and
those created thereafter) shall not infringe upon, make unfair use
of, unfairly compete with or present a confusingly similar look
and feel to, any Commerce Network trade dress as used in the
decor, layout, or other arrangement of Commerce Network premises.
Nothing herein contained shall be construed to require Network to
alter the exterior facade or design or any of Member's branch
banking facility in existence on the date of termination.
7. Counterparts. This Amendment may be executed in several
counterparts, and all such executed counterparts will constitute the same
agreement.
8. Defined Terms. Initially capitalized terms used and not defined in
this Amendment have the meanings ascribed to them in the Network Agreement.
9. Full Force and Effect. Except as amended hereby, the Network
Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties to this Amendment have caused this
Amendment to be duly executed by their respective authorized officers as of the
day and year first above written.
Commerce Bancorp, Inc. Pennsylvania Commerce Bancorp, Inc.
By: /s/ Douglas J. Pauls By: /s/ Gary L. Nalbandian
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Douglas J. Pauls, Senior Vice President Gary L. Nalbandian, President/
and Chief Financial Officer Chief Executive Officer
Commerce Bank/Harrisburg, N. A. Address of Member
100 Senate Avenue
By: /s/ Gary L. Nalbandian East Pennsboro Township
---------------------------- Camp Hill, PA 17011
Gary L. Nalbandian, President/
Chief Executive Officer
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