AGREEMENT AND PLAN OF MERGER

1.1.   The Merger .  Subject to the terms and conditions of this Agreement, in accordance with the Pennsylvania Business Corporation Law (the “PBCL”), at the Effective Time (as defined in Section 1.2 hereof), the Company shall merge with and into Parent.  Parent shall be the surviving corporation (hereinafter sometimes called the “Surviving Corporation”) in the Merger, and shall continue its corporate existence under the laws of the Commonwealth of Pennsylvania.  Upon consummation of the Merger, the separate corporate existence of the Company shall cease.

1.2.   Effective Time .  Subject to the provisions of this Agreement, articles of merger complying with the PBCL (the “Articles of Merger”) shall be duly prepared, executed and delivered for filing with the Department of State of the Commonwealth of Pennsylvania (the “Department”) on the Closing Date (as defined in Section 10.1 hereof).  The Merger shall become effective at such time as the Articles of Merger are filed by the Department or at such later time as may be specified in the Articles of Merger (such time being the “Effective Time”).

1.3.   Effects of the Merger .  At and after the Effective Time, the Merger shall have the effects set forth in Section 1929 of the PBCL.

1.4.   Conversion of Company Common Stock .

(a)   At the Effective Time, subject to the other provisions of this Article I and Sections 2.2(f) and 9.1(g) hereof, each share of the common stock, $0.01 par value per share, of the Company (the “Company Common Stock”) issued and outstanding immediately prior to the Effective Time (other than shares of Company Common Stock held directly or indirectly by Parent or the Company or any of their respective Subsidiaries (as defined below) (except for DPC Shares, as such term is defined in Section 1.4(d) hereof)) shall, by virtue of this Agreement and without any action on the part of the holder thereof, cease to be outstanding and be converted into the right to receive a fraction (subject to adjustment as provided for herein, the “Exchange Ratio”) of a share of Parent Common Stock, calculated as of the Determination Date, whose numerator is $10.00 and whose denominator is the Average Closing Price, provided , however , that in no event shall the Exchange Ratio be greater than 0.38 or less than 0.34 (the “Merger Consideration”).

(b)   All of the shares of Company Common Stock converted into the Merger Consideration pursuant to this Article I shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a certificate or direct registration statement previously representing any such shares of Company Common Stock (each a “Certificate”) shall thereafter cease to have any rights with respect to such securities, except the right to receive (i) the Merger Consideration, (ii) any dividends and other distributions in accordance with Section 2.2(c) hereof, and (iii) any cash to be paid in lieu of any fractional share of Parent Common Stock in accordance with Section 2.2(f) hereof.

(c)   If, between the date of this Agreement and the Effective Time, the shares of Parent Common Stock shall be changed into a different number or class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or a stock dividend thereon shall be declared with a record date within such period, proportionate adjustments shall be made to the Exchange Ratio and any references in this Agreement to “Exchange Ratio” shall thereafter be deemed to refer to the Exchange Ratio after giving effect to any adjustment made pursuant to this Section 1.4(c).

(d)   At the Effective Time, all shares of Company Common Stock that are owned directly or indirectly by Parent or the Company or any of their respective Subsidiaries (other than shares of Company Common Stock held by Parent or the Company or any of their respective Subsidiaries in respect of a debt previously contracted (any such shares of Company Common Stock, and shares of Parent Common Stock which are similarly held, whether held directly or indirectly by Parent or the Company, being referred to herein as “DPC Shares”)) shall be cancelled and shall cease to exist, and no stock of Parent, cash or other consideration shall be delivered in exchange therefor.  All shares of Parent Common Stock that are owned by the Company or any of its Subsidiaries shall become treasury stock of Parent.

1.5.   Option Plans; Stock Options; Other Convertible Securities .

(a)   Each stock option to purchase Company Common Stock (a “Company Option”) and the Company’s Amendment and Restatement No. 3 to the Stock Option Plan and Restricted Stock Plan of Republic First Bancorp, Inc. (the “Company Option Plan”), shall be assumed by Parent in a transaction described in Section 409A or Section 424(a), as applicable, of the Code, subject, in the event the Option Plan Amendment is submitted to a vote of the Company’s shareholders, to the approval of the Option Plan Amendment by the Company’s shareholders.  Each Company Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such Company Option immediately prior to the Effective Time, except that (i) each Company Option (other than the Specified Awards) will be fully vested and immediately exercisable (regardless of the vested status of such Company Option immediately prior to the Effective Time) for that number of shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon the exercise of such assumed Company Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.  If deemed necessary or appropriate by the Company and Parent, the Company shall submit the Option Plan Amendment to a vote of the Company’s shareholders at the Company Shareholder Meeting and shall use its best efforts to obtain approval of the Option Plan Amendment by the Company’s shareholders.  If the Option Plan Amendment is submitted to a vote of the Company’s shareholders and the Company’s shareholders do not approve the Option Plan Amendment, the holder of each Company Option shall have only those rights with respect to such Company Option as are provided under the applicable award, the Company Option Plan and applicable law.  If it is not deemed necessary or appropriate to submit the Option Plan Amendment to a vote of the Company's shareholders, or if the Option Plan Amendment is submitted to a vote of the Company's shareholders and is approved by the Company's shareholders, then, in either case, promptly after the Effective Time, Parent shall deliver or shall cause the Surviving Corporation to deliver to the holders of Company Options, notices describing the conversion of such Company Options into Parent Options.  The agreements evidencing the Company Options shall continue in effect on the same terms and conditions (modified as described in this Section 1.5(a)) and Parent shall comply with such terms.  Prior to the Effective Time, Parent shall reserve for issuance the number of shares of Parent Common Stock necessary to satisfy Parent’s obligations under this Section 1.5(a).  As soon as practicable after the Effective Time, Parent shall file a registration statement or statements on Form S-8 (or any successor form) with respect to the shares of Parent Common Stock subject to Company Options assumed by Parent pursuant to this Agreement.

(b)   At and after the Effective Time, the outstanding convertible Company Trust Preferred Securities and the Company’s outstanding Fixed Rate Junior Subordinated Convertible Debt Securities due 2038 (collectively, the “Company Convertible Securities”) shall be convertible (in accordance with the provisions of the Trust IV Documents) into that number of shares of Parent Common Stock equal to the product of the number of shares

of Company Common Stock into which such Company Convertible Securities could have been converted immediately prior to the Effective Time, multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Common Stock, subject to adjustment for events subsequent to the Effective Time.  Parent shall make or shall cause the Surviving Corporation to deliver to the holders of Company Convertible Securities notices describing the effects of the Merger on such Company Convertible Securities.  The Trust IV Documents shall continue in effect on the same terms and conditions (modified as described in this Section 1.5(b) and supplemented by any supplemental indenture with the trustee of the applicable Company Trust) and Parent shall comply or shall cause the Surviving Corporation to comply with such terms.  Prior to the Effective Time, Parent shall reserve for issuance the number of shares of Parent Common Stock necessary to satisfy Parent’s obligations under this Section 1.5(b).

(c)   Prior to the Effective Time, Parent and the Company shall take all such steps as may be required to cause any acquisitions of Parent equity securities (including derivative securities with respect to any Parent equity securities) and dispositions of Company equity securities (including derivative securities with respect to any Company equity securities) resulting from the transactions contemplated by this Agreement by each individual who is anticipated to be subject to the reporting requirements of Section 16(a) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), with respect to Parent or who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company, to be exempt under Rule 16b-3 promulgated under the Exchange Act.

1.6.   Parent Common Stock .  Except for shares of Parent Common Stock owned by the Company or any of its Subsidiaries (other than DPC Shares), which shall be converted into treasury stock of Parent as contemplated by Section 1.4 hereof, the shares of Parent Common Stock issued and outstanding immediately prior to the Effective Time shall be unaffected by the Merger and such shares shall remain issued and outstanding.

1.7.   Articles of Incorporation .  At the Effective Time, the Articles of Incorporation of Parent, as in effect immediately prior to the Effective Time, as amended by the Authorized Share Amendment, shall be the Articles of Incorporation of the Surviving Corporation.

1.8.   Bylaws .  At the Effective Time, the Bylaws of Parent, as in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation until thereafter amended in accordance with applicable law.

1.9.   Directors and Officers .

(a)   At and after the Effective Time, the directors of Parent shall consist of the Parent Directors and Company Directors who shall continue as or become directors of Parent in accordance with Section 7.13 hereof, each to hold office in accordance with the Articles of Incorporation and Bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and qualified.

(b)   The officers of Parent immediately prior to the Effective Time shall be the officers of the Surviving Corporation, each to hold office in accordance with the

Articles of Incorporation and Bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and qualified.

1.10.   Tax Consequences .  It is intended that the Merger shall constitute a reorganization within the meaning of Section 368(a) of the Code and that this Agreement shall constitute a plan of reorganization for the purposes of Section 368 of the Code and the Treasury Regulations thereunder.

2.1.   Parent to Make Shares and Cash Available .  At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, with a bank or trust company (which may be a Subsidiary of Parent) (the “Exchange Agent”) selected by Parent and reasonably satisfactory to the Company, for the benefit of the holders of Certificates, for exchange in accordance with this Article II (i) certificates representing the shares of Parent Common Stock to be issued pursuant to Section 1.4 and Section 2.2(a) in exchange for outstanding shares of Company Common Stock and (ii) the cash in lieu of fractional shares to be paid in accordance with Section 2.2(f) hereof. Such cash and certificates for shares of Parent Common Stock, together with any dividends or distributions with respect thereto, are hereinafter referred to as the “Exchange Fund.”

2.2.   Exchange of Shares .

(a)   As soon as practicable after the Effective Time, and in no event more than three business days thereafter, the Exchange Agent shall mail to each holder of record of a Certificate or Certificates a form letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent) and instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration.  The Exchange Agent shall request street name or nominee record holders to forward the letter of transmittal and instructions to the appropriate beneficial owner(s) of the shares of Company Common Stock represented by such Certificate or Certificates.  The Company shall have the right to review both the letter of transmittal and the instructions prior to the Effective Time and provide reasonable comments thereon.

(b)   Upon surrender of a Certificate or Certificates for exchange and cancellation to the Exchange Agent, together with a properly executed letter of transmittal, the holder of such Certificate or Certificates shall be entitled to receive in exchange therefor (i) a certificate representing that number of whole shares of Parent Common Stock which such holder of Company Common Stock became entitled to receive pursuant to the provisions of Article I hereof and/or (ii) the amount of cash in lieu of fractional shares, if any, which such holder has the right to receive in respect of the Certificate or Certificates surrendered pursuant to Section 2.2(f).  The Certificate or Certificates so surrendered shall forthwith be cancelled.  At Parent’s option, the shares of Parent Common Stock which such holder of Company Common Stock became entitled to receive shall be uncertificated and registered on the stock books of Parent

without the issuance of a certificate; however, a certificate shall be issued upon such holder’s request. No interest will be paid or accrued on the cash in lieu of fractional shares or the unpaid dividends and distributions, if any, payable to holders of Certificates.

(c)   No dividends or other distributions declared after the Effective Time with respect to Parent Common Stock and payable to the holders of record thereof shall be paid to the holder of any unsurrendered Certificate until the holder thereof shall surrender such Certificate in accordance with this Article II.  After the surrender of a Certificate in accordance with this Article II, the record holder thereof shall be entitled to receive any such dividends or other distributions, without any interest thereon, which theretofore had become payable with respect to shares of Parent Common Stock issuable in exchange for such Certificate.

(d)   If any certificate representing shares of Parent Common Stock is to be issued in a name other than that in which the Certificate surrendered in exchange therefor is registered, it shall be a condition of the issuance thereof that the Certificate so surrendered shall be properly endorsed (or accompanied by an appropriate instrument of transfer) and otherwise in proper form for transfer, and that the person requesting such exchange shall (i) pay to the Exchange Agent in advance any transfer or other Taxes required by reason of the issuance of a certificate representing shares of Parent Common Stock in any name other than that of the registered holder of the Certificate surrendered (ii) establish to the satisfaction of the Exchange Agent that any applicable tax has been paid or that no tax is payable with respect thereto.

(e)   After the Effective Time, there shall be no transfers on the stock transfer books of the Company of the shares of Company Common Stock which were issued and outstanding immediately prior to the Effective Time.  If, after the Effective Time, Certificates representing such shares are presented for transfer to the Exchange Agent, they shall be cancelled and exchanged for shares of Parent Common Stock and/or cash in lieu of fractional shares as provided in this Article II.

(f)   Notwithstanding anything to the contrary contained herein, no certificates or scrip representing fractional shares of Parent Common Stock shall be issued upon the surrender for exchange of Certificates, no dividend or distribution with respect to Parent Common Stock shall be payable on or with respect to any fractional share, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a shareholder of Parent.  In lieu of the issuance of any such fractional share, Parent shall pay to each former shareholder of the Company who otherwise would be entitled to receive a fractional share of Parent Common Stock an amount in cash determined by multiplying (i) the   Average Closing Price by (ii) the fraction of a share of Parent Common Stock which such holder would otherwise be entitled to receive pursuant to Section 1.4 hereof.

(g)   Any portion of the Exchange Fund that remains unclaimed by the shareholders of the Company for 12 months after the Effective Time shall be paid to Parent.  Any shareholders of the Company who have not theretofore complied with this Article II shall thereafter look only to Parent for payment of the Merger Consideration, the cash in lieu of fractional shares and/or the unpaid dividends and distributions on the Parent Common Stock deliverable in respect of each share of Company Common Stock such shareholder holds as determined pursuant to this Agreement, in each case, without any interest thereon.  

Notwithstanding the foregoing, none of Parent, the Company, the Exchange Agent or any other person shall be liable to any former holder of shares of Company Common Stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.

(h)   In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such person of a bond in such amount as Parent may reasonably direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof pursuant to this Agreement.

4.1.   Corporate Organization .

(a)   The Company is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania.  The Company has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each

jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be licensed or qualified would not have a Material Adverse Effect (as defined below) on the Company.  The Company is duly registered as a bank holding company under the BHC Act.  The Articles of Incorporation and Bylaws of the Company, copies of which have previously been made available to Parent, are true and correct copies of such documents as in effect as of the date of this Agreement.  As used in this Agreement, the term “Material Adverse Effect” means, with respect to Parent or the Company, as the case may be, a material adverse effect on (i) the business, results of operations or financial condition of such party and its Subsidiaries taken as a whole, other than any such effect attributable to or resulting from (1) any change following the date of this Agreement in banking or similar laws, rules or regulations of general applicability or interpretations thereof by courts or governmental authorities, (2) any change or the effectiveness of any change following the date of this Agreement in GAAP or regulatory accounting principles applicable to banks, thrifts or their holding companies generally, (3) changes following the date of this Agreement attributable to or resulting from changes in general economic conditions, including changes in the prevailing level of interest rates, (4) any action or omission of the Company or Parent, or any of the respective Subsidiaries of either of them, taken in accordance with the terms of this Agreement or with the prior written consent of the other party hereto, (5) any expenses incurred by such party in connection with this Agreement or the transactions contemplated hereby, (6) the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence, after the date hereof, of any military or terrorist attack upon or within the United States, or any of its territories, possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, except to the extent that such engagement or occurrence has a disproportionate adverse effect on such party, or (7) the announcement of this Agreement and of the transactions contemplated by this Agreement, or (ii) the ability of such party and its Subsidiaries to consummate the transactions contemplated hereby.

(b)   The Company Bank is a commercial bank duly organized, validly existing and in good standing under the laws of Commonwealth of Pennsylvania.  The deposit accounts of the Company Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by law, and all premiums and assessments required to be paid in connection therewith have been paid.  The Company’s other Subsidiaries are duly organized, validly existing and in good standing under the laws of their respective jurisdictions of incorporation or organization.  Each of the Company’s Subsidiaries has the corporate (or equivalent) power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or the location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be licensed or qualified would not have a Material Adverse Effect on such Subsidiary.  The articles of incorporation, bylaws and similar governing documents of each Subsidiary of the Company, copies of which have previously been made available to Parent, are true and correct copies of such documents as in effect as of the date of this Agreement.  As used in this Agreement, the word “Subsidiary” when used with respect to any party means any corporation, limited liability company, partnership or other organization, whether incorporated or

unincorporated, which is consolidated with such party for financial reporting purposes and also includes any statutory trust, if such trust is not consolidated for financial reporting.

(c)   The minute books of the Company and each of its Subsidiaries contain true and correct records of all meetings and other corporate (or equivalent) actions held or taken since January 1, 2005 through September 30, 2008 of their respective shareholders, members or partners, as the case may be, and Boards of Directors or similar governing authority (including committees thereof).

4.2.   Capitalization .

(a)   As of the date of this Agreement, the authorized capital stock of the Company consists of 20,000,000 shares of Company Common Stock, $0.01 par value per share and 10,000,000 shares of preferred stock, $0.01 par value per share.  As of October 31, 2008, there were 10,614,950 shares of Company Common Stock issued and outstanding, no shares of preferred stock of the Company issued or outstanding and 416,303 shares of Company Common Stock held in the Company’s treasury.  As of the date of this Agreement, there were no shares of Company Common Stock reserved for issuance upon exercise of outstanding stock options or otherwise except for 1,540,000 shares of Company Common Stock reserved pursuant to the Company Option Plan and 1,661,538 shares of Company Common Stock reserved for issuance upon the conversion of the outstanding convertible Company Trust Preferred Securities.  All of the issued and outstanding shares of Company Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.  Except as referred to above or reflected in Section 4.2(a) of the Company Disclosure Schedule, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of Company Common Stock or any other equity security of the Company or any securities representing the right to purchase or otherwise receive any shares of Company Common Stock or any other equity security of the Company.  As of the date of this Agreement, the names of the optionees or grantees of restricted stock, the grant date of each option to purchase Company Common Stock or restricted stock grant, the number of shares subject to each such option or grant, the restriction period of each restricted stock grant and the price at which each such option may be exercised under the Company Option Plans are set forth in Section 4.2(a) of the Company Disclosure Schedule. Each Company Option was granted with an exercise price of not less than fair market value of a share of Company Common Stock as of the date such Company Option was granted and there has been no backdating of any Company Option.

(b)   Section 4.2(b) of the Company Disclosure Schedule sets forth a true and correct list of all of the Subsidiaries of the Company.  Except for the Company Trust Preferred Securities and as set forth in Section 4.2(b) of the Company Disclosure Schedule, the Company owns, directly or indirectly, all of the issued and outstanding shares of the capital stock or other equity interests of each of such Subsidiaries, free and clear of all liens, charges, encumbrances and security interests whatsoever, and all of such shares or equity interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.  No Subsidiary of the Company, other than the Company Trusts, is bound by any outstanding subscriptions, options,

warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity interest of such Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity interest of such Subsidiary.

4.3.   Authority; No Violation .

(a)   The Company has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly approved by the Board of Directors of the Company.  The Board of Directors of the Company has directed that this Agreement and the transactions contemplated hereby be submitted to the Company’s shareholders for approval and adoption at a meeting of such shareholders and, except for the approval and adoption of this Agreement by the requisite vote of the Company’s shareholders, no other corporate proceedings on the part of the Company are necessary to approve and adopt this Agreement and to consummate the Merger.  This Agreement has been duly and validly executed and delivered by the Company and (assuming due authorization, execution and delivery by Parent) this Agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency, receivership and similar laws affecting creditors’ rights and remedies generally.

(b)   Except as may be set forth in Section 4.3(b) of the Company Disclosure Schedule, neither the execution and delivery of this Agreement by the Company, nor the consummation by the Company of the transactions contemplated hereby, nor compliance by the Company with any of the terms or provisions hereof, will (i) violate any provision of the Articles of Incorporation or Bylaws of the Company or the articles of incorporation, bylaws or similar governing documents of any of its Subsidiaries, or (ii) assuming that the consents and approvals referred to in Section 4.4 hereof are duly obtained, (x) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to the Company or any of its Subsidiaries, or any of their respective properties or assets, or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any lien, pledge, security interest, charge or other encumbrance upon any of the respective material properties or assets of the Company or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of its Subsidiaries is a party, or by which they or any of their respective material properties or assets may be bound or affected, except for such as would not have a Material Adverse Effect.

4.4.   Consents and Approvals .  Except for (a) the filing with the SEC of the Proxy Statement-Prospectus, the filing of such reports under Section 13(a) of the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby, (b) the approval of this Agreement by the requisite vote of the shareholders of the Company, (c)

the filing of the Articles of Merger with the Department, (d) supplemental indentures with trustees of the Company Trusts, and (e) such filings, authorizations or approvals as may be set forth in Section 4.4 of the Company Disclosure Schedule, no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality (each a “Governmental Entity”) or with any third party are required to be made by the Company in connection with (1) the execution and delivery by the Company of this Agreement and (2) the consummation by the Company of the Merger.

4.5.   SEC Reports .  The Company has previously made available to Parent a true and correct copy of each (a) final registration statement, prospectus, report, schedule and definitive proxy statement filed since December 31, 2004 by the Company with the SEC pursuant to the Securities Act or the Exchange Act (the “Company Reports”) and (b) communication mailed by the Company to its shareholders since December 31, 2004, and no such Company Report (either when filed or at its effective time, if applicable) or communication (when mailed) contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading, except that information as of a later date shall be deemed to modify information as of an earlier date.  The Company has filed all Company Reports and other documents required to be filed by it under the Securities Act and the Exchange Act since December 31, 2004, and, as of their respective dates, all Company Reports complied in all material respects with the published rules and regulations of the SEC with respect thereto.

4.6.   Regulatory Reports .  Except as may be set forth in Section 4.6 of the Company’s Disclosure Schedule, the Company and each of its Subsidiaries have timely filed all reports, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file since December 31, 2004 with any agency regulating its business (each a “Regulatory Agency”), including (i) the Federal Reserve Board, (ii) the FDIC, (iii) the Pennsylvania Department of Banking or the New Jersey Department of Banking and Insurance (each a “State Regulator”) and (iv) the NASDAQ Stock Market, and have paid all fees and assessments due and payable in connection therewith.  Except for normal examinations conducted by a Regulatory Agency in the regular course of the business of the Company and its Subsidiaries, and except as may be set forth in Section 4.6 of the Company Disclosure Schedule, no Regulatory Agency has initiated any proceeding or, to the knowledge of the Company, investigation into the business or operations of the Company or any of its Subsidiaries since December 31, 2004, and there is no unresolved violation, criticism, or exception by any Regulatory Agency with respect to any report or statement relating to any examinations of the Company or any of its Subsidiaries, where the relevant Regulatory Agency has communicated that such violation, criticism, or exception, if left unresolved, shall result in an enforcement action, or where such constitutes a violation of an existing enforcement action.

4.7.   Financial Statements .  The Company has previously made available to Parent copies of (a) the consolidated balance sheet of the Company and its Subsidiaries (other than the Company Trusts) as of December 31 for the fiscal year 2007, and the related consolidated statements of income, shareholders’ equity and cash flows for the fiscal years 2006 and 2007, accompanied by the audit report of its independent public accountants with respect to the Company (the “2007 Audited Financial Statements”) and (b) the consolidated balance sheet

of the Company and its Subsidiaries (other than the Company Trusts) as of June 30, 2008, and the related consolidated statements of income, shareholders’ equity and cash flows for the six-month period then ended (the “June 30 Unaudited Financial Statements”).  Except as described in Section 4.7 of the Company Disclosure Schedule, each of the December 31, 2007 and June 30, 2008 consolidated balance sheets of the Company (including the related notes, where applicable) fairly present the consolidated financial position of the Company and its Subsidiaries (other than the Company Trusts) as of the date of such balance sheet, and the other financial statements referred to in this Section 4.7 (including the related notes, where applicable) fairly present, and the financial statements to be filed with the SEC after the date hereof will fairly present (subject, in the case of each of the unaudited statements, to recurring audit adjustments normal in nature and amount), the results of the consolidated operations and consolidated financial position of the Company and its Subsidiaries (other than the Company Trusts) for the respective fiscal periods or as of the respective dates therein set forth; each of such statements (including the related notes, where applicable) complies, and the financial statements to be filed with the SEC after the date hereof will comply, in all material respects, with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto; and each of such statements (including the related notes, where applicable) has been, and the financial statements to be filed with the SEC after the date hereof will be, prepared in accordance with GAAP consistently applied during the periods involved, except as indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC.  The books and records of the Company and its Subsidiaries are being maintained in accordance with GAAP and any other applicable legal and accounting requirements.

4.8.   Broker’s Fees .  Neither the Company nor any Subsidiary of the Company nor any of their respective officers or directors has employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with any of the transactions contemplated by this Agreement, except that the Company has engaged, and will pay a fee or commission to, Sandler in accordance with the terms of a letter agreement dated August 21, 2008, between Sandler and the Company, a true and correct copy of which has been previously made available by the Company to Parent.

4.9.   Absence of Certain Changes or Events .

(a)   Except as may be set forth in Section 4.9(a) of the Company Disclosure Schedule, or as disclosed in the 2007 Audited Financial Statements or the June 30 Unaudited Financial Statements (together the “Financial Statements”) or any Company Report (as defined in Section 4.5) filed with the SEC prior to the date of this Agreement, since December 31, 2007, neither the Company nor any Subsidiary of the Company, as applicable, had any liabilities, obligations or loss contingencies of any nature (whether absolute, accrued, contingent or otherwise) of a type required to be reflected in such Financial Statements or the footnotes thereto or any Company Report which are not fully reflected or reserved against therein or fully disclosed in a footnote thereto, except for liabilities, obligations and loss contingencies which are not material individually or in the aggregate or which are incurred in the ordinary course of business, consistent with past practice and subject, in the case of any unaudited statements, to normal, recurring audit adjustments and the absence of footnotes.

(b)   Except as may be set forth in Section 4.9(b) of the Company Disclosure Schedule or as disclosed in the Financial Statements or any Company Report filed with the SEC prior to the date of this Agreement, since December 31, 2007 the Company and its Subsidiaries have carried on their respective businesses in the ordinary course consistent with their past practices.

(c)   Except as may be set forth in Section 4.9(c) of the Company Disclosure Schedule, since December 31, 2007 neither the Company nor any of its Subsidiaries has (i) with respect to any executive officer or director, increased the wages, salaries, compensation, pension, or other fringe benefits or perquisites payable from the amount thereof in effect as of December 31, 2007 (other than increases in wages or salaries with respect to any such individual equaling less than 10%), granted any severance or termination pay, entered into any contract to make or grant any severance or termination pay, or paid any bonus (except for bonus payments and severance or termination payments made in the ordinary course of business consistent with past practices), (ii) suffered any strike, work stoppage, slowdown, or other labor disturbance, (iii) been a party to a collective bargaining agreement, contract or other agreement or understanding with a labor union or organization, or (iv) had any union organizing activities.

4.10.   Legal Proceedings .

(a)   Except as may be set forth in Section 4.10(a) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to any, and there are no pending or, to the Company’s knowledge, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature, against the Company or any of its Subsidiaries, including any such proceeding requesting equitable relief or challenging the validity or propriety of the transactions contemplated by this Agreement.

(b)   Except as may be set forth in Section 4.10(b) of the Company Disclosure Schedule, there is no injunction, order, judgment or decree imposed upon the Company, any of its Subsidiaries or the assets of the Company or any of its Subsidiaries.

4.11.   Taxes .

(a)   Except as may be set forth in Section 4.11(a) of the Company Disclosure Schedule, each of the Company and its Subsidiaries has (i) duly and timely filed (including applicable extensions granted without penalty) all material Tax Returns (as hereinafter defined) required to be filed at or prior to the Effective Time, and all such Tax Returns are true and correct in all material respects, and (ii) paid in full or made adequate provision in the financial statements of the Company (in accordance with GAAP) for all Taxes required to be paid by them, whether or not shown to be due on such Tax Returns.

(b)   Except as set forth in Section 4.11(b) of the Company Disclosure Schedule, as of the date hereof (i) neither the Company nor any of its Subsidiaries has requested any extension of time within which to file any Tax Returns in respect of any taxable year which have not since been filed and no request for waivers or agreements for extension of the time to assess any Taxes are pending, outstanding or in effect; (ii) with respect to each taxable period of

the Company and its Subsidiaries, the federal and state income Tax Returns of the Company and its Subsidiaries have been audited by the IRS or appropriate state tax authorities through December 31, 2004   or the time for assessing and collecting income Tax with respect to such taxable period has closed and such taxable period is not subject to review; (iii) there are no claims, audits or assessments pending against the Company or any of its Subsidiaries for any alleged deficiency in Taxes, and the Company has not been notified in writing of any proposed Tax claims, audits or assessments against the Company or any of its Subsidiaries (other than, in each case, claims, audits or assessments for which adequate reserves in the financial statements of the Company have been established); (iv) there are no material liens for Taxes upon the assets of the Company or any of its Subsidiaries, other than liens for current Taxes not yet due and payable or contested in good faith by appropriate proceedings; (v) all Taxes required to be withheld, collected or deposited by or with respect to the Company and its Subsidiaries have been timely withheld, collected or deposited, as the case may be, and, to the extent required, have been paid to the relevant taxing authority; (vi) neither the Company nor any of its Subsidiaries is required to include in income any adjustment pursuant to Section 481(a) of the Code (or any similar provision of law or regulations) by reason of a change in accounting method; (vii) except with respect to the affiliated group of corporations of which the Company is the common parent (as defined by Section 1504(a) of the Code), neither the Company nor any of its Subsidiaries is a party to any Tax allocation or Tax sharing agreement or otherwise has any liability for the Taxes of any person (A) as a transferee or successor, (B) by contract, (C) under Section 1.1502-6 of the Treasury regulations (or any similar provision of state, local or foreign Law), or (D) otherwise; (viii) neither the Company nor any of its Subsidiaries has entered into any transaction that is either a “listed transaction” or that the Company believes in good faith is a “reportable transaction” (both as defined in Treas. Reg. Section 1.6011-4, as modified by periodically updated Revenue Procedures and other applicable published Internal Revenue Service guidance); (ix) neither the Company nor any of its Subsidiaries has been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code; and (x) neither the Company nor and of its Subsidiaries has been a distributing corporation or controlled corporation in a transaction within the past three years intended or purported to be governed by Code Section 355 or 361.

4.12.   Employees .

(a)   Section 4.12(a) of the Company Disclosure Schedule sets forth a true and correct list of each deferred compensation plan, incentive compensation plan, equity compensation plan, “welfare” plan, fund or program (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)); “pension” plan, fund or program (within the meaning of Section 3(2) of ERISA); each employment, termination or severance agreement; and each other employee benefit plan, fund, program, agreement or arrangement, in each case, that is sponsored, maintained or contributed to or required to be contributed to by the Company or any of its ERISA Affiliates, for the benefit of any employee or former employee, director or consultant of the Company or any Subsidiary or with respect to which the Company or any Subsidiary has any liability or obligation, contingent or otherwise (the “Plans”).

(b)   The Company has heretofore made available to Parent with respect to each of the Plans true and correct copies of each of the following documents, if applicable: (i) the Plan document and any amendment thereto (or if there is no Plan document, a summary of the material terms of the Plan); (ii) any related trust or other funding vehicle; (iii) the actuarial report and annual report for such Plan for the most recent two years for which such reports are available; (iv) the most recent determination letter from the IRS for such Plan, and (v) the most recent summary plan description and related summaries of material modifications.

(c)   Except as may be set forth in Section 4.12(c) of the Company Disclosure Schedule: each of the Plans has been established and has at all times been operated and administered in material compliance with the applicable law, including the Code and ERISA; there is no material liability relating to the Plans (with materiality determined with respect to the Plans in the aggregate) that has not been disclosed on the Company’s financial statements in accordance with GAAP and any other applicable legal and accounting requirements and such liability with respect to any Plan will not materially increase as a result of the Merger; with respect to each of the Plans intended to be “qualified” within the meaning of Section 401(a) of the Code, the Company has received a favorable determination notification or opinion letter from the IRS, and, to the Company’s knowledge, no event has occurred that would reasonably be expected to affect such determination; each of the Plans has been timely amended to comply with current law and regulations (or time remains to make such amendments under Section 401(b) of the Code or other similar statutory, regulatory or administrative relief); no Plan has an accumulated or waived funding deficiency within the meaning of Section 412 of the Code; neither the Company nor any of its ERISA Affiliates has incurred, directly or indirectly, any current or contingent liability to or on account of a Plan pursuant to Title IV of ERISA (other than liability for premiums due the PBGC (which premiums have been paid when due)); to the knowledge of the Company, no proceedings have been instituted to terminate any Plan that is subject to Title IV of ERISA; no “reportable event,” as such term is defined in Section 4043(c) of ERISA, has occurred with respect to any Plan that is subject to Title IV of ERISA (other than a reportable event with respect to which the thirty day notice period has been waived); to the Company’s knowledge, no non-exempt “prohibited transaction” (within the meaning of Section 4975 of the Code or Section 406 of ERISA) or breach of any fiduciary duty described in Section 404 of ERISA has occurred that could result in any material liability, direct or indirect, for the Company or any of its ERISA Affiliates or any shareholder, officer, director or employee of the Company or an ERISA Affiliate; except as required by COBRA or any similar State law, neither the Company nor any of its Subsidiaries has any liability with respect to post-termination health, medical or life insurance benefits for retired, former or current employees of the Company or any of its Subsidiaries; each Plan that is a group health plan (within the meaning of section 5000(b)(1) of the Code) complies, and in each and every case has complied, with all material requirements of ERISA and section 4980B of the Code; no condition exists that presents a material risk to the Company of incurring a liability to or on account of a Plan pursuant to Title IV of ERISA (other than liability for premiums due the PBGC); all amounts that the Company and its ERISA Affiliates are required to pay as contributions to the Plans as of the last day of the most recent fiscal year of each of the Plans have been paid or properly accrued; all benefits accrued under any funded or unfunded Plan have been paid, accrued or otherwise adequately reserved in accordance with GAAP; and all monies withheld from employee paychecks with respect to Plans have been transferred to the appropriate Plan or otherwise applied to pay premiums or benefits in a timely manner as required by applicable law; no contract, Plan or

arrangement (written or otherwise) (including provisions that become operative by virtue of this Agreement) covering any disqualified individual (within the meaning of Section 280G(c) of the Code) of the Company or any of its Subsidiaries provides for payments (including but not limited to liability associated with any gross-up payment under any such contract, Plan or arrangement) that may result in any nondeductible compensation under Section 280G(a) of the Code or may result in an excise tax payable by such disqualified individuals under Section 4999 of the Code solely as a result of the transactions contemplated by this Agreement; neither the Company nor any of its ERISA Affiliates have ever participated in or contributed to (or been required to contribute to) a multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA); there are no pending or, to the knowledge of the Company, threatened or anticipated (i) claims (other than routine claims for benefits) by, on behalf of or against any of the Plans or any trusts related thereto, or (ii) any audit or investigation by any Governmental Entity with respect to a Plan; each Plan that is subject to Section 409A of the Code has been maintained and operated in good faith based on the regulations promulgated by the IRS and related IRS guidance issued with respect to Section 409A of the Code; all persons classified by the Company or its ERISA Affiliates as independent contractors satisfy and have at all times satisfied the requirements of applicable law to be so classified; and the Company and its ERISA Affiliates have fully and accurately reported their compensation on IRS Forms 1099 when required to do so; and no individuals are currently providing services to the Company or its ERISA Affiliates pursuant to an employee leasing agreement or similar type of arrangement, nor is the Company or its ERISA Affiliates party to any such arrangement.

4.13.   Company Information .  The information relating to the Company and its Subsidiaries which is provided to Parent by the Company for inclusion in the Proxy Statement-Prospectus and the registration statement on Form S-4 (the “S-4”) in which the Proxy Statement-Prospectus will be included or in any other document filed with any Regulatory Agency in connection herewith, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading.  The Proxy Statement-Prospectus (except for such portions thereof that relate to Parent or any of its Subsidiaries) will comply with the provisions of the Exchange Act and the rules and regulations thereunder.

4.14.   Compliance with Applicable Law .  The Company and each of its Subsidiaries holds all material licenses, franchises, permits and authorizations necessary for the lawful conduct of their respective businesses under and pursuant to all, and have complied, in all material respects, with and are not in default in any material respect under any, law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries has received notice of any violations of any of the above.

4.15.   Certain Contracts .

(a)   Except as set forth in Section 4.15(a) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to or bound by any contract (whether written or oral) (i) with respect to the employment of any directors, (ii) which, upon the consummation of the transactions contemplated by this Agreement, will result in any payment or benefits (whether of severance pay or otherwise) becoming due that would not otherwise be

payable in the absence of the transactions contemplated by this Agreement, or the acceleration, increase or vesting of any rights to any payment or benefits, from Parent, the Company, the Surviving Corporation or any of their respective Subsidiaries to any officer, director or consultant of the Company or any of its Subsidiaries, (iii) as of the date of this Agreement which is a material contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed after the date of this Agreement that has not been filed or incorporated by reference in the Company Reports, (iv) which is a consulting agreement (including data processing, software programming and licensing contracts) not terminable on 90 days or less notice involving the payment of more than $100,000 per annum in the case of any one such agreement or $200,000 in total payments in the case of any one such agreement, or (v) which materially restricts the conduct of any line of business by the Company or any of its Subsidiaries.  Each contract of the type described in clause (iii) of this Section 4.15(a), whether or not set forth in Section 4.15(a) of the Company Disclosure Schedule, is referred to herein as a “Company Contract.”  The Company has previously delivered or made available to Parent true and correct copies of each contract of the type described in Section 4.15(a) of the Company Disclosure Schedule.

(b)   Except as set forth in Section 4.15(b) of the Company Disclosure Schedule, (i) each Company Contract is valid and binding and in full force and effect, (ii) the Company and each of its Subsidiaries has performed all obligations required to be performed by it to date under each Company Contract, (iii) no event or condition exists which, to the knowledge of the Company, constitutes or, after notice or lapse of time or both, would constitute, a default on the part of the Company or any of its Subsidiaries under any Company Contract, and (iv) no other party to any Company Contract is, to the knowledge of the Company, in default in any material respect thereunder.

4.16.   Agreements with Regulatory Agencies .  Except as may be set forth in Section 4.16 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is or since December 31, 2004 has been subject to any cease-and-desist or other order issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or is a recipient of any extraordinary supervisory letter from, or has adopted any board resolution at the request of any Regulatory Agency (each, whether or not set forth on Section 4.16 of the Company Disclosure Schedule, a “Regulatory Agreement”), that restricts the conduct of its business or that in any manner relates to its capital adequacy, its credit policies, its management or its business, nor has the Company or any of its Subsidiaries been advised by any Regulatory Agency that it is considering issuing or requesting any Regulatory Agreement.

4.17.   Environmental Matters .  Except as may be set forth in Section 4.17 of the Company Disclosure Schedule:

(a)   To the knowledge of the Company, each of the Company and its Subsidiaries, and each of the Participation Facilities and the Loan Properties (each as hereinafter defined), is in compliance, in all material respects, with applicable federal, state and local laws, regulations and ordinances, and with all applicable decrees, orders and contractual obligations relating to pollution or the discharge of, or exposure to, Hazardous Materials (as hereinafter defined) in the environment or workplace (“Environmental Laws”);

(b)   There is no suit, claim, action or proceeding pending or, to the knowledge of the Company, threatened, before any Governmental Entity or other forum in which the Company or any of its Subsidiaries has been named as a defendant, or, to the knowledge of the Company, the subject of which is any Participation Facility or any Loan Property, (x) for alleged noncompliance (including by any predecessor) with any Environmental Laws, or (y) relating to the release, threatened release or exposure to any Hazardous Material whether or not occurring at or on a site owned, leased or operated by the Company or any of its Subsidiaries; and

(c)   To the knowledge of the Company, during the period of (x) the Company’s or any of its Subsidiaries’ ownership or operation of any of their respective current or former properties, (y) the Company’s or any of its Subsidiaries’ participation in the management of any Participation Facility, or (z) the Company’s or any of its Subsidiaries’ interest in a Loan Property, there has been no release of Hazardous Materials in, on, under or affecting any such property, Participation Facility or Loan Property in a manner that requires any material remediation under any applicable Environmental Law.  To the knowledge of the Company, prior to the period of (x) the Company’s or any of its Subsidiaries’ ownership or operation of any of their respective current or former properties, (y) the Company’s or any of its Subsidiaries’ participation in the management of any Participation Facility, or (z) the Company’s or any of its Subsidiaries’ interest in a Loan Property, there was no release of Hazardous Materials in, on, under or affecting any such property, Participation Facility or Loan Property in a manner than requires any material remediation under any Environmental Law.