SECOND AMENDMENT OF SHAREHOLDERS' AGREEMENT
THIS AMENDMENT is made as of this ____ day of ________, 199_,
by and among CRUSADER HOLDING CORPORATION, a Pennsylvania corporation ("CHC"),
THOMAS J. KNOX ("Knox"), BRUCE A. LEVY ("Levy"), DANIEL DILELLA ("DiLella"),
JOEL S. LAWSON III ("Lawson"), BRIAN MCADAMS ("McAdams"), RONALD CAPLAN
("Caplan") and D. WALTER COHEN ("Cohen").
CHC, Knox and Levy (Knox and Levy 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, CHC was
recapitalized, shares of CHC's class A common stock, par value $.01 per share
(the "Class A Common Stock") were issued to the Initial Shareholders and
promissory notes executed by CHC were issued to the Initial Shareholders, all as
more particularly described therein.
On January 31, 1997, the Initial Shareholders, CHC and
DiLella, Lawson, McAdams and Caplan (each an "Additional Shareholder") entered
into an Amendment to the Shareholder Agreement (the "Amendment") pursuant to the
terms of which shares of Class A Common Stock were issued to DiLella, Lawson,
McAdams and Caplan and promissory notes executed by CHC were issued to DiLella,
Lawson, McAdams and Caplan, all as more particularly described therein.
On January 31, 1997 Cohen (an "Additional Shareholder" and,
together with DiLella, Lawson, McAdams and Caplan, the "Additional
Shareholders") entered into a Joinder Agreement, pursuant to the terms of which
Cohen agreed to be bound by the Shareholders' Agreement and the Amendment
thereto. The Initial Shareholders and the Additional Shareholders are sometimes
individually referred to herein as a "Shareholder" and collectively as the
The Shareholders and CHC now wish to amend the Shareholders'
Agreement to permit termination of the Shareholders' Agreement upon the closing
on an initial public offering.
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 and the Amendment, as
further 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 CHC's Class A
Common Stock purchased by the Additional Shareholders. 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 CHC.
2. Paragraph 14 of the Shareholders' Agreement is hereby
deleted in its entirety and replaced by the following:
14. Term of Agreement. This Agreement shall terminate
upon the first to occur of the following events:
(a) the written agreement by all of the Shareholders
of CHC who are, at that time, bound by the terms of this Agreement;
(b) the closing of the sale of shares of Class A
Common Stock, or such other shares of common stock with attributes
substantially similar to those of the Class A Common Stock, in a
initial public offering, which shall mean an underwritten public
offering (whether on a "best efforts" or "firm commitment" basis) for
the account of CHC of Class A Common Stock or securities convertible
into Class A Common Stock, where the aggregate sale price of the
securities included in such sale (after deduction of the underwriting
commissions, discounts and concessions) is at least $10,000,000;
(c) the dissolution, bankruptcy, or receivership of
(d) the cessation of CHC's business, whether by sale
of assets, liquidation, or otherwise.
(e) In the event that CHC ceases to do business due
to liquidation, the Shareholders agree that the net proceeds of
liquidation remaining after payment of all liabilities to third parties
of CHC shall be distributed as follows:
(i) First, to repay in full the Notes;
(ii) Then, to redeem the common stock of
3. 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.
4. All other terms and provisions of the Shareholders'
Agreement shall remain unchanged and in full force and effect.
5. 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.
CRUSADER HOLDING CORPORATION, a
Thomas Knox, Chairman
THOMAS J. KNOX
BRUCE A. LEVY
JOEL S. LAWSON III
D. WALTER COHEN