Exhibit 10.2
EXECUTION COPY
TRANSITION
AGREEMENT
This TRANSITION AGREEMENT (“
Agreement ”) is effective as of December 30, 2008
(“ Effective Date ”) by and between TD Bank,
N.A., a national banking association, and Commerce Bancorp LLC
(formerly known as Commerce Bancorp, Inc.) a Delaware limited
liability company (“ Commerce Bancorp ,” and
together with TD Bank, N.A., “ TD ”), on the one
hand, and Commerce Bank/Harrisburg, a Pennsylvania banking
association (“ Commerce Harrisburg ” as
successor to Commerce Bank/Harrisburg, N.A., " Commerce N.A.
"), and Pennsylvania Commerce Bancorp, Inc., a Pennsylvania
corporation (“ PA Bancorp ,” and, together with
Commerce Harrisburg and Commerce N.A., “ Harrisburg
”), on the other hand. Each of Harrisburg and TD
is referred to herein as “ Party ” and
collectively as “ Parties .”
WHEREAS, Commerce Bancorp, Commerce
Bank/Harrisburg, N.A. (the predecessor to Commerce Harrisburg) and
PA Bancorp are parties to that Network Agreement dated January 1,
1997 (as amended in April 2002 and September 29, 2004, the “
Network Agreement ”) and Commerce Bank N.A. (now known
as TD Bank, N.A.) (“ CBNA ”), and Commerce
Bank/Harrisburg, N.A. are parties to that Master Services Agreement
dated July 21, 2006 (together with its addenda, the “
Master Services Agreement ”);
WHEREAS, the Parties wish to terminate the
Network Agreement and the Master Services Agreement prior to the
expiration of their current term (together, the “ Prior
Agreements ”), and have determined that it will be
mutually beneficial to provide Harrisburg with an orderly and
reasonable transition of certain services and branding, and both
Parties have agreed to cooperate in good faith to achieve such
transition;
NOW, THEREFORE, in consideration of the promises
and mutual agreements set forth herein, and other good and valuable
consideration the receipt and adequacy of which are hereby
acknowledged, the Parties hereto agree as follows:
ARTICLE I – PRIOR
AGREEMENTS
Section
1.1.
Network Agreement .
(a) Commerce
Bancorp, Commerce Harrisburg and PA Bancorp hereby amend the
Network Agreement, pursuant to Section 13 thereof, to add a new
Section 1.4 as follows: “The parties may terminate
this Agreement at any time, for any reason or no reason, by mutual
agreement.”
(b) Commerce
Bancorp, Commerce Harrisburg and PA Bancorp hereby amend the
Network Agreement, pursuant to Section 13 thereof, so that any
obligations of any party thereunder that were intended to survive
its expiration or termination, either explicitly or implicitly,
will not survive such event. Such non-survival will not
affect or modify the Parties’ obligations under this
Agreement.
(c) Effective
immediately after the effect of the amendments in Section 1.1(a)
and (b) and 1.2(a), Commerce Bancorp, Commerce Harrisburg and PA
Bancorp hereby terminate the Network Agreement.
(d) In
full and final satisfaction of any obligations of TD to provide
marketing assistance to Harrisburg under Section 4.1(d) of the
Network Agreement, TD will pay Harrisburg the non-refundable amount
of $250,000 on the Effective Date.
Section
1.2.
Master Services Agreement .
(a) TD
Bank, N.A. (as successor to CBNA) and Commerce Harrisburg hereby
amend the Master Services Agreement, pursuant to Section 12
thereof, so that any obligations of any party thereunder that were
intended to survive its expiration or termination, either
explicitly or implicitly, will not survive such
event. Such non-survival will not affect or modify the
Parties’ obligations under this Agreement.
(b) Effective
immediately after the effect of the amendments in Sections 1.1 and
1.2(a), TD Bank, N.A. (as successor to CBNA) and Commerce
Harrisburg hereby terminate the Master Services
Agreement.
Section
1.3.
Releases .
(a) Subject
to Harrisburg’s payment of any fee obligations accruing under
the Prior Agreements prior to the Effective Date (which fees are
set forth on Exhibit A hereto), TD hereby forever and irrevocably
releases and discharges Harrisburg and its Affiliates and their
respective officers, directors, employees, agents and
representatives (such Affiliates and all such persons, “
Related Parties ”) from all pending and potential
claims, demands, actions, suits, liabilities, losses, obligations,
fees and costs of whatever nature, whether known or unknown,
pending or future, certain or contingent (“
Liabilities ”) arising out of or relating to (i) the
Prior Agreements (and the Lewis Road sublease referenced in Section
3.3) and Harrisburg’s compliance therewith and performance or
non-performance thereunder; (ii) any rights and remedies reserved
by TD in the August 26, 2008 and October 9, 2008 letters from
Simpson Thacher & Bartlett LLP to J. Douglas Baldridge of
Venable LLP; and (iii) Harrisburg's marketing campaign and all
customer communications made by or on behalf of Harrisburg or its
Affiliates prior to the Effective Date to announce
Harrisburg’s new brand and the Republic Merger (as defined in
Section 4.1(b)). The term “ Affiliates
” shall mean any person or entity that directly or indirectly
controls, is controlled by, or is under common control with a
Party, and for greater certainty, with respect to TD, does not
include TD AMERITRADE Holding Corporation.
(b) Subject
to TD’s compliance with the payment obligations set forth in
Sections 1.1(d) and 3.3, Harrisburg hereby forever and irrevocably
releases and discharges TD and its Related Parties from all
Liabilities arising out of or relating to (i) the Prior Agreements
(and the Lewis Road sublease referenced in Section 3.3) and
TD’s compliance therewith and performance or non-performance
thereunder; (ii) the allegations in the August 21, 2008 and October
2, 2008 letters from J. Douglas Baldridge of Venable LLP to Simpson
Thacher & Bartlett LLP; and (iii) TD’s marketing campaign
and all customer communications made by or on behalf of TD or its
Affiliates prior to the Effective Date to announce TD’s new
brand in the United States.
(c) The
releases in Sections 1.3(a) and (b) shall not affect either
Party’s right to bring a claim, action, suit, arbitration or
other proceeding (“ Action ”) against the other
Party
based upon (i)
a breach of this Agreement (including any breaches of Articles II,
III and IV herein) or any other separate agreement
between the Parties or their respective Related Parties (other than
the Prior Agreements and the Lewis Road agreement); (ii) any
act or omission of either Party not arising out of or relating to
the Prior Agreements (except to the extent specifically released by
Sections 1.3(a)(ii) or 1.3(a)(iii) and 1.3(b)(ii) or 1.3(b)(iii);
or (iii) or specifically limited by Section 1.3(d)).
(d) The
releases in Sections 1.3(a) and (b) shall not affect either
Party’s right to bring an Action against the other Party or
the other Party's Related Parties for any direct damages, proceeds,
settlements or awards paid by the first Party to a third party (and
any out-of-pocket attorney's fees paid by the first Party to defend
such third party Action) to the extent arising from or relating to
a third-party Action brought against the first Party or one of its
Related Parties for any misuse, mishandling or unauthorized access
to or disclosure of such third party’s confidential
information by the other Party or the other Parties' Affiliates at
any time prior to the Effective Date, including with respect to
third-party claims for breach of privacy laws and regulations
against a Party or its Related Parties caused by the other Party or
the other Party's Related Parties. Each Party represents
to the other Party that such Party does not know or have reason to
know of any basis for any such third-party Action as of the
Effective Date.
ARTICLE II –
SERVICES
Section
2.1.
Services .
(a) From
and after the Effective Date, TD will provide (or cause to be
provided) to Harrisburg the services listed on Schedule A
(the " Services ") until the following cessation dates: (i)
for the accommodation banking services (" Accommodation Banking
Services "), until 11:59 pm on December 31, 2008 (or as soon as
practicable thereafter, to the extent a delay in cessation is
caused by any third-party action beyond TD’s reasonable
control); (ii) all services described on Schedule A-1 (" Core
Services "), until 11:59 pm on July 15, 2009, or at
Harrisburg's option, provided that Harrisburg gives TD at
least five (5) days advance notice for such extension, until 11:59
pm on August 15, 2009 and (iii) for the services described on
Schedule A-2 (" Tail Services "), until 11:59 pm on August
15, 2009. Pursuant to Section 2.1(e), Harrisburg may
terminate individual services or all services in (ii) and (iii)
above at a date earlier than as set forth above.
(b) TD
shall provide, or cause the Services to be provided (i) by
competent professionals in the same scope and manner and with
quality and service standards consistent with past practice for the
provision of such services to Harrisburg prior to the Effective
Date; and (ii) in compliance with all applicable laws, rules and
regulations. TD shall not allow any Services to be
changed during the Services Term (as defined in Section 8.1), other
than non-material changes that do not adversely affect their
timeliness, features or functionality. TD shall not
suspend or allow any Services to be suspended or discontinued
during their respective terms, except in accordance with Section
3.2. Further, TD shall be responsible for correcting, at
its expense, errors caused by TD, its Affiliates or contractors in
the performance of the Services or the retrieval or provision of
any data or images to Harrisburg.
(c) TD
may retain third parties to assist in providing the Services,
provided that (i) TD is liable hereunder for their
compliance with this Agreement; (ii) upon request, such third
parties will sign reasonable agreements to protect any Confidential
Information (as defined in Article IX) of Harrisburg; and (iii) if
Harrisburg wishes to continue any of the Services provided by such
third parties after the Services Term, Harrisburg shall contract
directly with such third parties and be solely and directly
responsible for all applicable fees.
(d) The
Parties agree that TD is initially obligated to provide only those
specific services included in the Services, even if other services
were provided to Harrisburg under the Network Agreement or Master
Services Agreement. If at any time after the Effective
Date, either Party discovers that TD or any of its Affiliates has
historically provided any other service to Harrisburg that is not
initially listed on Schedule A (each, a “
Historical Service ”), TD will provide or cause such
Historical Service to be provided to Harrisburg in a manner that is
consistent or substantially consistent with past practice, for the
Services Term and for the fees historically charged to Harrisburg,
and such Historical Service shall be included in the definition of
“Services” for all purposes hereunder. If at
any time after the Effective Date, the Parties agree, in the sole
discretion of each Party, for TD to provide to Harrisburg (i) new
services that are not included in the Services or the Historical
Services or (ii) any material modifications or supplements to the
Services or Historical Services as currently provided as of the
Effective Date (each of (i) and (ii), an “ Additional
Service ”), the Parties shall execute additional addenda
to be included in Schedule A and such Additional Services
shall be included in the definition of “Services” for
all purposes hereunder.
(e) Harrisburg
may terminate the provision of any Service hereunder for
convenience, effective 30 days after written notice thereof to
TD. Upon the effective date of such termination, TD
shall have no further obligation to provide any such Service, and
fees for the terminated Service will no longer accrue but all other
terms and conditions in this Agreement shall remain in full force
and effect.
(f) If
the Republic Merger (as defined in Section 4.1(b)) changes
Harrisburg's requirements under any pre-existing Services, the
Parties will cooperate in good faith to accommodate changes that
are nominal in nature and that do not increase the cost to TD of
providing such Services in a material way, such as for example, the
addition of logos or new names provided by Harrisburg that comply
with Article IV to materials traditionally processed by TD for
Harrisburg; the inclusion of Harrisburg merger mailer announcements
that comply with Article IV and Section 6.2 in customer
communications and statements traditionally processed by TD; and
minor alterations in the manner information is reported or
organized, to be able to identify data relating to
Harrisburg. Harrisburg will pay all incremental
out-of-pocket fees of TD and a mutually agreed amount for
TD’s incremental internal costs as a result of the above
changes. For clarity, Harrisburg acknowledges and agrees
that TD is not required to accommodate any request for Services by
Harrisburg to integrate with Harrisburg the back-end or
infrastructure of Republic First Bancorp, Inc. as a result of the
Republic Merger , or
to assist with or provide marketing communications to be made by or
on behalf of the Republic First Bancorp, Inc. business after the
Republic Merger. The Services, as required to be
provided in this Agreement, shall continue to be provided after the
Republic Merger solely with respect to Harrisburg’s legacy
branches and business operations and the continuation of such
business
operations
(including new branches of the Harrisburg business) after the
relevant transaction is effectuated.
(g) Both
Parties acknowledge and agree that (subject to Section 2.6) no
Services will be provided to Harrisburg after August 15,
2009.
Section
2.2.
Project Team . TD hereby designates Robert W.
Pompey and his designees, and Harrisburg hereby designates Mark A.
Ritter and his designees, to act as lead coordinators and contact
persons for the Services and related transition matters (the
“ Project Team Managers ”), which may be amended
by either Party upon notice. The Parties acknowledge
that they have, as of the Effective Date, agreed upon a transition
project plan (the “ Transition Plan ”) that
identifies the tasks and efforts that are necessary for an orderly
transition of the Services to Harrisburg and agree to make all
commercially reasonable best efforts to perform in a timely and
reasonable manner their respective requests for information, tasks,
duties and obligations thereunder, and to direct all communications
regarding the Transition Plan to the Project Team
Managers. Each Party shall keep its Project Team Manager
apprised of all material issues regarding the Transition Plan
throughout the Services Term. If a Party becomes aware
of any problems regarding the Transition Plan or any circumstances
that may cause or have caused a delay in Harrisburg’s
transition process, it shall promptly inform its Project Team
Manager and that Project Team Manager shall promptly inform the
Project Team Manager of the other Party and such persons shall, as
may be appropriate, confer in good faith on the appropriate
response, amend the Transition Plan accordingly, and design a
responsive plan of action in order to ensure that all the Services
can be transitioned in an orderly manner by the end of the Services
Term.
Section
2.3.
Cooperation .
(a) Each
Party shall provide the other Party and the other Party's vendors
and contractors with all resources, notices and cooperation as may
be reasonably necessary or desirable for (i) performance of the
Services, (ii) effectuation of the Transition Plan in a timely
manner (including without limitation any related
testing, data and image retrieval and conversion, and systems
transition); (ii) resolution of any problems with respect to the
Services or the Transition Plan; and (iii) timely, orderly and
cost-effective transition of Harrisburg from use of the
Services. Both Parties agree that time is of the essence
in the performance of their respective obligations required in
order for the transition of Harrisburg to be accomplished in an
effective and orderly manner by the dates set forth in Section 2.1
above.
(b) Each
Party shall provide the other Party and the other Party's vendors
and contractors with reasonable access to its relevant personnel,
premises, equipment and information, provided that such
access (i) will be pursuant to a reasonably necessary request by
the other Party, and (ii) complies with reasonable provisions of
confidentiality. Without limiting the generality of the
foregoing, TD agrees that it will take all necessary actions during
the Services Term to effectuate the retrieval, conversion and
migration of Harrisburg’s data and images to
Harrisburg’s systems in a timely manner within the dates set
forth in Section 2.1 above. The Parties agree to
cooperate further in good faith to effect Harrisburg’s
transition of Services as contemplated under this
Agreement.
(c) During
and for a reasonable time after the Services Term, TD agrees to be
reasonably responsive to Harrisburg's and its successors’
reasonable requests for data, materials and information relating to
Services that were provided pursuant to this Agreement or the Prior
Agreements and/or data and information that was collected or stored
as a result thereof. Harrisburg agrees to pay TD’s
reasonable expenses to comply with such requests after the Services
Term.
(d) The
Parties agree to cooperate in good faith in the event either Party
is required to respond to any governmental request for information
relating to the Services that were provided pursuant to this
Agreement or the Prior Agreements and/or data and information that
was collected or stored as a result thereof, or any audit with
respect thereto.
Section
2.4.
Transition Milestones . The Parties agree to use
commercially reasonable best efforts to complete the milestone
events set forth in Schedule B . For clarity, any
failure by Harrisburg or TD to meet the milestone events set forth
in Schedule B will not affect Harrisburg’s right to
receive the incentive fees set forth in Section
3.4. Whenever a milestone date is materially missed, the
Parties agree to confer promptly to develop a plan of action to
keep the transition on course to meet the dates set forth in
Section 2.1(a). Nothing herein is intended to take away
from the Project Team Managers the flexibility to mutually agree to
changes in the Transition Plan, provided that neither
Project Team Manager shall have the authority to request or consent
to an extension of any dates set forth in Section
2.1(a).
Section
2.5.
Personnel . Each of TD and Harrisburg agrees that
TD is an independent contractor of Harrisburg, and this Agreement
does not create a partnership, agency, fiduciary or joint venture
relationship between the Parties or an employment relationship
between a Party and the other Party’s employees or
contractors. Neither Party is authorized to enter into
agreements or create obligations on behalf of the other
Party. Each Party shall be solely responsible for, with
respect to its own employees and contractors: (i) filing on a
timely basis, tax returns, payments and all other documents with
respect thereto; (ii) paying all compensation, workers’
compensation, disability benefits, taxes and unemployment
insurance; (iii) making all withholdings and deductions; and (iv)
maintaining their eligibility or entitlement (or lack thereof) to
any benefit under any employee benefit plan (including, without
limitation, those that are subject to the Employee Retirement
Income Security Act of 1974, as amended), incentive, compensation
or other employee program or policy.
Section
2.6.
Harrisburg Data and Images . TD agrees to
retrieve and deliver to Harrisburg in a timely manner the data and
images of Harrisburg required for the effectuation of the
Transition Plan and milestone events set forth on Schedule B
. All such data and images shall be and remain at all
times the property of Harrisburg, whether in the possession or
control of TD, its Related Parties or its
contractors. TD shall pay its own internal and
out-of-pocket costs with respect to the foregoing, including costs
for CGI or any other contractors and suppliers it engages in
connection therewith and for all equipment and software purchased
by or on behalf of TD prior to the Effective Date. Any
costs with respect to hardware, software, equipment or third party
rights to be incurred pursuant to this Section 2.6 after the
Effective Date shall be governed by Section 3.4
hereunder. Notwithstanding Section 2.1(a)(iii), the
Parties acknowledge and agree that the Transition Plan cannot be
completed until and unless at least seven (7) years of Harrisburg
data and images are accurately retrieved and delivered to
Harrisburg. TD agrees that
if TD has not
provided to Harrisburg all data and images necessary for the full
transition of Harrisburg's banking operations by August 15, 2009,
TD will at its expense continue to store and provide access to such
data and images for Harrisburg until such provision of data and
images is complete and TD has delivered to Harrisburg, in a medium,
to be mutually agreed to by the parties, all such data and
images. TD agrees that at no time will Harrisburg be
denied both (x) possession of its data and images and (y)
TD’s services with respect to storing and allowing access to
same.
ARTICLE III –
FEES
Section
3.1.
Fees for Services . Harrisburg shall pay TD the
fees specified in Schedule A for the Services, subject to
any terms and conditions therein. Other than the fees
specified on Schedule A and the reimbursement of certain
pass-through expenses as set forth in Section 3.4, no other
compensation is due to TD for the Services provided
hereunder. For any such fees that are charged on a
per-unit basis per Schedule A , TD shall not increase the
per-unit rates during the Term, except to pass through (i) its own
higher out-of-pocket costs solely to the extent arising under
existing third-party agreements under which TD procures the item
(e.g., the costs of credit reports furnished by third parties),
(ii) increases of external costs beyond TD’s control (e.g.,
increases in postage or shipping costs), in a manner consistent
with historical practice, or (iii) higher costs pursuant to Section
2.1(f). For clarity, Harrisburg acknowledges that (a) if
Harrisburg increases the volume of Services provided by TD on a
per-unit basis, its overall cost for such Services will increase,
and (b) no fees paid by Harrisburg for the Services shall be
construed as a payment for the use of any intellectual property of
TD during the Term, whether pursuant to Section 4.1(a) or
otherwise. Absent any conflicting language in
Schedule A , which shall control in such circumstances, or a
new written agreement signed by the Parties, TD shall send invoices
to Harrisburg, and Harrisburg shall pay such invoices, in
accordance with historical practices. Any undisputed
amounts payable shall bear interest from the fifth day after their
due date, at a rate of 1% over the prime interest rate published by
The Wall Street Journal on such date.
Section
3.2.
Suspension of Services . If Harrisburg fails to
pay any undisputed amounts due for the Services, and fails to cure
within 30 days after written notice from TD, TD shall have the
right, upon notice to Harrisburg, to suspend providing the
applicable Services until such payment, together with any interest
thereon as provided in Section 3.1, is received. TD
shall send notice of suspension at least five days prior to the
suspension date. The Services Term shall not be modified
or extended in any manner as a result of any such period of
suspension.
Section
3.3.
Furniture and Lease Payments. On the
Effective Date, TD will pay Harrisburg the non-refundable amounts
of (i) $107,527.79 for call center furniture previously provided to
TD and invoiced by Harrisburg, and (ii) $42,472.21 for rent on the
Lewis Road office space sublease. Upon receipt of the
foregoing payments, the furniture shall be fully paid for and the
Lewis Road sublease will automatically terminate.
Section
3.4.
Other Fees and Expenses . Absent any specific
provisions to the contrary in this Agreement, each Party agrees to
pay all internal and out-of-pocket fees, costs and expenses
(including personnel salaries and increases, contractor and vendor
fees) it and its Affiliates incur in connection with the Transition
Plan and Harrisburg’s transition from the Prior
Agreements and
all activities performed in connection therewith .
If either Party incurs an expense in connection with
the purchase or acquisition of hardware, software, equipment or
third-party rights that will remain with and be owned, leased or
licensed by the other Party after the Services Term, the Party that
will retain such hardware, software, equipment or third-party
rights will be responsible for the expense associated with its
purchase or acquisition and shall have the right to agree in
advance to the price and terms upon which it will be purchased or
acquired. If from and after the Effective Date, the
Parties agree that hardware, software, equipment or third-party
rights must be purchased or acquired during the Services Term that
will not be retained by either Party thereafter, the Parties must
agree beforehand as to the price and purchase
terms. When such items are no longer needed, the Parties
will make a reasonable effort to sell such items and shall split
evenly any proceeds obtained from the sale thereof.
Section
3.5.
Incentive Fee . TD will pay to Harrisburg a
non-refundable fee for reimbursement of transition costs (“
Incentive Fee ”) as follows: (i) US
$6,000,000 if (a) all Services other than Tail Services
terminate by July 15, 2009 (except any continuation of
accommodation banking caused by TD) and (b) subject to
Section 2.6, all Tail Services terminate by or on August 15, 2009;
or (ii) US $3,250,000 if (a) all Services other than Tail Services
terminate on or after July 16, 2009 but before or on August 15,
2009 and (b) subject to Section 2.6, all Tail Services
terminate by or on August 15, 2009. Harrisburg will not
be penalized, and will not lose its right to receive the above
Incentive Fee, if it misses any of the above deadlines due to delay
caused by TD or its Affiliates or their respective
contractors. If Harrisburg qualifies for the Incentive
Fee, it will be paid by TD on August 17, 2009 by check or wire
transfer. Harrisburg agrees that TD is obligated to pay
an Incentive Fee only if Harrisburg meets either of the above sets
of deadlines, and Harrisburg agrees that it will not be entitled to
any pro rata payment for any partial satisfaction
thereof. If the Services are terminated by the dates
noted above, the Incentive Fee shall be paid to Harrisburg and TD
shall not withhold such payment on account of alleged breaches of
other provisions of this Agreement or based on any other dispute or
action between the Parties or their Affiliates.
ARTICLE IV –
TRADEMARKS AND TRADE DRESS
Section
4.1.
License .
(a) From
the Effective Date until the earlier of (i) September 30, 2009 or
(ii) the date that Harrisburg notifies TD in writing that
Harrisburg no longer needs the license herein (the “
License Term ”), TD hereby grants Harrisburg a
non-exclusive, royalty-free license to use the trademarks, service
marks, logos and domain names of TD and its Affiliates set forth on
Schedule C and the name “Commerce
Bank/Harrisburg” (the “ Prior Marks ”) in
the form and manner consistent with past practice. For
clarity, Harrisburg may use the Prior Marks only on corporate
offices, centers (including the Lewis Road facility), and bank
branches that are physically located in the Pennsylvania counties
comprising the territory on Schedule D (the “
Territory ”), but may use the Prior Marks, subject to
the last sentence of Section 4.1(b)(iv), in websites, customer and
corporate communications, advertising and promotional materials
published, accessible or distributed anywhere to promote
Harrisburg’s banking operations located in the
Territory.
(b) (i) During
the License Term, Harrisburg may use the Prior Marks only in their
exact form depicted on Schedule C , or, with respect to
“Commerce Bank/Harrisburg” in the form and manner
consistent with past practice and, except as provided in
subsections (ii) and (iii) below, may not combine any Prior Marks
with other trademarks. Subject to the foregoing sentence
and the other provisions of this Article IV, Harrisburg may, during
the License Term, adopt new branding that incorporates the Prior
Marks in the regular course of its business to designate new
financial products and services and conduct customer promotions for
the Harrisburg operations.
(ii) During
the License Term, subject to the proviso in Section 4.1(b)(iii),
Harrisburg may use the names “Commerce Bank,”
“Commerce Bank/Harrisburg” and Pennsylvania Commerce
Bancorp, Inc. as a trademark (including in the Frutiger or Univers
Black Oblique typefaces and/or in the color red), and/or use the
red “C” logo, in each case, in the same communication
as Harrisburg’s proposed new Primary Brand (as defined in
Section 4.2(a)) and/or the names and logos of Republic First
Bancorp, Inc. and its banking subsidiary, solely (a) in direct
mailings and other direct communications (including, by way of
example, in on-premises bank branch announcements and materials) to
its existing customers and/or on the website www.commercepc.com (or
any other websites operated or controlled by Harrisburg), to
announce or promote that the merger between PA Bancorp and Republic
First Bancorp, Inc. (the “ Republic Merger ”) is
planned or has occurred and/or that there will be a transition of
the “Commerce Bank” brand to the new Primary Brand; (b)
as otherwise required for regulatory and governmental purposes; or
(c) as permitted as a “fair use” under applicable
law. By way of example, Harrisburg may use “[new
Primary Brand] Bank, formerly Commerce Bank” and "Commerce
Bank will become [new Primary Brand] Bank" but may not use
“[new Primary Brand] Commerce Bank.”
(iii)
Without limiting Section 4.1(b)(ii), Harrisburg may also use (a)
the names “Commerce Bank,” “Commerce
Bank/Harrisburg” and Pennsylvania Commerce Bancorp, Inc. as a
trademark (including in the Frutiger or Univers Black Oblique
typefaces and/or in the color red) and/or (b) use the red
“C” logo, in each case, in the same communication as
Harrisburg’s proposed new Primary Brand (as defined in
Section 4.2(a)) and/or the names and logos of Republic First
Bancorp, Inc. and its banking subsidiary, in the Territory from the
Effective Date until September 30, 2009, to announce or promote
that the Republic Merger is planned or has occurred and/or that
there will be a transition of the “Commerce Bank” brand
to the new Primary Brand, and solely: (i) for signage,
collateral, and other physical or tangible materials owned,
controlled or leased by Harrisburg or the surviving entity of the
Republic Merger (the “ Republic Survivor ”) that
are physically located within the Territory; (ii) for advertising
placement in newspapers, magazines or other print media that are
exclusively or primarily distributed and targeted or directed
towards residents in the Territory (including the most
Territory-specific edition available of print media with wider
general circulation), subject to a reasonable disclaimer making
clear that Harrisburg is not an affiliate of TD such as, by way of
example, “Commerce Bank is not an affiliate of TD
Bank”; (iii) for advertising placement in radio and
television stations that are exclusively or primarily targeted or
directed towards residents in the Territory, subject to a
reasonable disclaimer making clear that Harrisburg is not an
affiliate of TD such as, by way of example, “Commerce Bank is
not an affiliate of TD Bank”; and (iv) on the website
www.commercepc.com (or any other websites operated or controlled by
Harrisburg); provided that , in each case of such uses in
subsections 4.1(b)(ii) and (iii),
Harrisburg will
not (x) suggest, in violation of applicable law, that TD or its
Affiliates is affiliated with or endorses Harrisburg, Republic
First Bancorp, Inc. or the Republic Survivor, (y) display the
“Commerce Bank” and/or “Commerce
Bank/Harrisburg” trademark and/or the red “C”
logo in an unfavorable visual manner (e.g., distorting or breaking
the “C” logo), and/or (z) depict the likeness of any
past or current "director" or "senior executive officer" (each as
defined in 12 C.F.R. 5.51(c)(1) and (3), respectively) of TD or its
predecessors or of its Affiliates. For clarity,
Harrisburg will not breach this Section 4.1(b)(iii) or the last
sentence of Section 4.1(b)(iv) if persons outside the Territory
access, possess, view or hear any materials or media that comply
with the above criteria in (i)-(iv) so long as Harrisburg otherwise
complies with this Section 4.1(b)(iii).
(iv) Without
limiting Section 4.1(a), 4.1(b)(ii) or (iii) or Section 4.2(d)
below, Harrisburg may at any time during or after the License Term
also use the names “Commerce Bank/Harrisburg” and/or
“Pennsylvania Commerce Bancorp, Inc.,” alone or with
other names or logos, in a type font or other manner that does not
give it substantial prominence or distinction, not in the color
red, not using the standalone “C” logo, and not in the
Frutiger or Univers Black Oblique type font on any materials or in
any media inside or outside the Territory (including in connection
with Harrisburg’s transition to a new Primary Brand, the
Republic Merger, communications to customers of Republic First
Bancorp, Inc., employment descriptions in individual biographies,
and for legal and regulatory purposes) and such use shall be
considered “fair use” provided that such use
does not otherwise suggest, in violation of applicable law, that TD
or its Affiliates is affiliated with or endorses Harrisburg,
Republic First Bancorp, Inc. or the Republic
Survivor. Without limiting Section 4.1(a) with respect
to Prior Marks other than the exact trademarks “C,”
“Commerce,” or “Commerce Bank,” Harrisburg
agrees that, during the License Term, it will not use the name
“Commerce Bank” or “Commerce” or a
standalone “C” logo on any materials for wide or
general public distribution outside the Territory (excluding
Harrisburg websites and communications to existing customers
outside the Territory who bank at Harrisburg branches within the
Territory) or in any print, radio or television media exclusively
or primarily targeted or directed towards residents outside the
Territory, except for use of the name “Commerce
Bank/Harrisburg” and/or “Pennsylvania Commerce Bancorp,
Inc.” and except as otherwise required for legal or
regulatory purposes or employment and similar descriptions in
individual biographies.
(c) Harrisburg
will use such Prior Marks solely in a manner and solely in
connection with products and services that maintain quality levels
consistent with those employed by Harrisburg prior to the Effective
Date. Subject to the foregoing obligation and the other
provisions of this Article IV, Harrisburg may create or acquire
from others new materials, merchandise and promotional programs and
banking products that bear the Prior Marks and the other names
referenced in Section 4.1(b)(ii) solely as permitted by Section
4.1(b) above. Any goodwill of the Prior Marks generated
by Harrisburg’s use thereof shall inure to TD as
owner. Harrisburg shall not, during or after the License
Term, directly or indirectly, contest the validity or ownership of
any registered trademarks or pending applications on Schedule
C .
(d) At
the end of the License Term, Harrisburg has no obligation to
destroy or return to TD (or to cause third parties to destroy or
return to TD or to Harrisburg ) or to refuse to honor any
documents, materials or items bearing the Prior Marks that are no
longer in its or its Affiliates’ possession or control
(including checks, check covers, debit cards, credit
cards,
deposit slips
and withdrawal slips in the possession of
customers). Harrisburg has no obligation to request the
deletion of the Prior Marks after the Term from any Yellow Pages or
other directory listings, trade directories, third-party web sites,
governmental records (except as provided in Section 4.4), or other
third-party publications and materials not controlled by Harrisburg
or its Affiliates, provided that Harrisburg will not renew
or take other actions to prolong the use or display of the Prior
Marks by such sources after the License Term and will reasonably
cooperate with TD in all attempts to cancel or end such use or
display.
(e) Notwithstanding
anything to the contrary in Section 4.6 below, if a Party becomes
aware of any accidental, unintentional, nominal, or residual use of
a Prior Mark or a mark on Schedule E by Harrisburg after the
License Term that is inconsistent with the provisions of this
Article IV, it shall promptly notify the other
Party. Such use shall not breach this Agreement, if
Harrisburg immediately takes corrective action to cease or remove
such use, subject to Section 4.1(d).
(f) Harrisburg
acknowledges and agrees that TD has no obligation, either express
or implied, to (I) extend this trademark license after September
30, 2009; or (II) take any action after such date to assist
harrisburg in transitioning to new trademarks or in mitigating its
costs or expenses in connection therewith. Harrisburg
waives all of its rights (under this Agreement or otherwise) to
request or claim any of the foregoing.
Section
4.2.
Harrisburg’s New Trademarks .
(a)
Primary Trademark . Harrisburg agrees that, by
September 30, 2009, Harrisburg will adopt a new primary trademark,
service mark, and logo to replace the “Commerce Bank”
trademark and the “C” logo (“ Primary
Brand ”) that does not (i) begin with “Com,”
(ii) contain the word “commerce” or any composite or
foreign equivalent thereof (e.g., Commerz or CommerceOne); (iii)
use a standalone “C” in a logo in any color or font;
(iv) contain any of the word-only trademarks or service marks
listed on Schedule C , or any of the terms on Schedule
E (or their foreign equivalents), in each case, in any font or
color; (v) contain any of the exact logos on Schedule C ,
and/or (vi) use the Frutiger or Univers Black Oblique
fonts. Harrisburg may change its Primary Brand at any
time before or after September 30, 2009, and agrees that all of the
above criteria will apply to any new Primary Brand, except the
requirement in subsection 4.2(a)(i) shall expire on September 30,
2012.
(b)
Other Trademarks . Harrisburg agrees that, after
the License Term, Harrisburg will not adopt or use for banking,
financial or insurance services any other trademark, service mark,
logo or domain name (subject to Section 4.4) that (i) contains the
word “commerce” or any composite or foreign equivalent
thereof (e.g., Commerz or CommerceOne); (ii) uses a standalone
“C” in a logo in any color or font; or (iii) contains
any of the word-only trademarks or service marks listed on
Schedule C , or any of the terms on Schedule E (or
their foreign equivalents), in each case, in any font or color,
(iv) contain any of the exact logos on Schedule C ,
provided that Harrisburg may adopt and use or announce the
term “Red [day of week]” after September 30,
2010. Harrisburg agrees that until September 30, 2012,
Harrisburg will not adopt or use in the banking, financial or
insurance services any trademark, service mark, logo or domain name
in the Frutiger or Univers Black Oblique fonts, provided
that if a Party
becomes aware
of any accidental, unintentional, nominal or residual use of either
font before such date, it shall promptly notify the other Party,
and such use shall not breach this Agreement if Harrisburg
immediately takes such action to cease or remove such
use.
(c)
Other Generic Terms . Notwithstanding any other
provisions of this Article IV, at any time during and after the
License Term, TD agrees that Harrisburg or its
successors may use (i) the words on Schedule E in their
fair, generic or descriptive sense, and (ii) any word or element
contained in a trademark on Schedule C that is not listed on
Schedule E in a fair, generic or descriptive sense, or as
part of trademarks, service marks, slogans and other branding,
whether standing alone or contained in another trademark,
provided that Sections 4.2(a) or (b) are not
violated.
(d)
Fair Use . Notwithstanding any other provision of
this Article IV, TD agrees that, during and after the License Term,
Harrisburg has the right to make “fair use” of
TD’s trademarks and service marks under U.S. law, provided
that such right shall not be construed or asserted to limit any
of Harrisburg’s obligations under Sections 4.1(b)(iv) (last
sentence), 4.2(a) or 4.2(b). Except for the provision on
agreed “fair use” in Section 4.1(b)(iv) with respect to
“Commerce Bank/Harrisburg,” and without limiting
Harrisburg’s obligations under Sections 4.2(a) or (b), each
Party reserves its rights as to whether any other use by Harrisburg
of the “Commerce” or “Commerce Bank” name
(other than as “Commerce Bank/Harrisburg”) after the
License Term constitutes a “fair use” under U.S. law,
and Harrisburg agrees that the release in Section 4.6 shall not
apply to any such use.
Section
4.3.
Coin Counters and ATM Machines .
(a) Harrisburg
agrees that, after September 30, 2009, it will not adopt or use any
trade dress or look and feel for any “Penny Arcade”
coin counters displayed at Harrisburg bank branches that uses or
displays (i) the name “Penny” and/or
“Arcade”; (ii) a character named
“Penny” or a juvenile female character that is
substantially similar under U.S. copyright law or confusingly
similar under U.S. trademark law to TD’s current
“Penny” character; (iii) the audio and/or visual
material displayed on TD’s “Penny Arcade” coin
counter screens as of the Effective Date; and/or (iv) any of
the Prior Marks or the trademarks listed on Schedule E
. TD agrees that if Harrisburg complies with the
criteria in subsections (i)-(iv), TD, for itself and its
Affiliates, hereby forever and irrevocably releases and discharges
Harrisburg from all Liabilities arising out of or relating to any
claim by TD or its Affiliates that Harrisburg’s or its
Affiliates’ (including successors thereto) continued display
or use of the coin counters located in Harrisburg’s bank
branches from and after the License Term tarnishes, disparages,
infringes, dilutes, or misappropriates TD’s or its
Affiliates’ trademark, trade dress, copyright, design rights,
patent, or other intellectual property rights, or is otherwise
actionable by TD or its Affiliates under deceptive trade practices
or other commercial laws. For the avoidance of doubt,
the foregoing releases shall not imply that such continued use of
the coin counters after the License Term may not be subject to
claims by third parties unrelated to TD or TD's Affiliates based on
rights of such third parties not acquired or derived from TD or
TD's Affiliates.
(b) Harrisburg
further agrees that, after September 30, 2009, it will not adopt or
use any new trade dress or look and feel for any Harrisburg ATM
banking machine that uses or displays any of the Prior Marks or the
trademarks listed on Schedule E . TD agrees that
if
Harrisburg
complies with the prior sentence, TD, for itself and its
Affiliates, hereby forever and irrevocably releases and discharges
Harrisburg and its Affiliates (including successors
thereto) from all Liabilities arising out of or relating
to any claim by TD or its Affiliates that Harrisburg’s or its
Affiliates’ continued display or use of the ATM banking
machines located in Harrisburg’s bank branches or other
locations within the Territory from and after the License Term
tarnishes, disparages, infringes, dilutes or misappropriates
TD’s or its Affiliates’ trademark, trade
dress, copyright, design rights, patent, or other intellectual
property rights, or is otherwise actionable by TD or its Affiliates
under deceptive trade practices or other commercial
laws. For the avoidance of doubt, the foregoing releases
shall not imply that such continued use of the ATM machines after
the License Term may not be subject to claims by third
parties unrelated to TD or TD's Affiliates based on rights of such
third parties not acquired or derived from TD or TD's
Affiliates.
(c) The
releases in Section 4.3(a) and (b) apply to coin counters and ATM
banking machines that Harrisburg may, in the regular course of
business, place in new Harrisburg branches in the Territory during
the License Term. For the avoidance of doubt, such
releases shall not apply to any claim brought against Harrisburg by
a third party relating to any new ATM banking machines and/or coin
counters of Harrisburg.
Section
4.4.
Corporate Filings . Harrisburg agrees that, by
September 30, 2009, it will have made all filings and taken all
actions at all applicable government agencies or offices to change
its corporate, trade and similar names to names that comply with
Section 4.2. Harrisburg shall notify TD promptly after
the effect of such name changes. The Parties agree that
failure of a governmental agency or office to process or approve by
September 30, 2009 any filings made by Harrisburg prior thereto
shall not be a breach of this Section 4.4, provided, however
, that for the sake of clarity, Harrisburg acknowledges that
notwithstanding the foregoing, it shall not have any right to use
the Prior Marks after the License Term except as otherwise
permitted in Section 4.2(d) and the sentence below. By
December 31, 2009, Harrisburg will promptly, at TD’s option
and expense, cancel or transfer to TD all domain names of
Harrisburg containing any term on Schedule E , and TD and
Harrisburg agree that from the end of the License Term until
December 31, 2009, Harrisburg may use the domain name
www.commercepc.com solely to redirect Internet users to the website
of the Republic Survivor (or such other replacement website owned
or controlled by Harrisburg)..
Section
4.5.
Branded Materials .
(a) Harrisburg
will cease using all stationery, office supplies, customer or
collateral items ( e.g ., “C” banks) containing
Prior Marks (“ Branded Supplies ”) after
September 30, 2009. After the License Term, Harrisburg
and its Related Parties may continue using similar stationery,
supplies and customer or collateral items but they may not depict
the Prior Marks. After the Effective Date, at
Harrisburg’s request, TD will provide Harrisburg with all
Branded Supplies in TD’s possession that TD no longer uses,
at a mutually-agreed discounted price. Harrisburg will,
at TD’s option, promptly destroy all Branded Supplies in its
possession after September 30, 2009 or promptly make all Branded
Supplies available for retrieval by TD (in the case of retrieval,
at the place where the items are located and at TD’s
cost). TD shall notify Harrisburg of which of the above
options it elects (which may vary for different types of Branded
Supplies) by April 1, 2009. Unless different
arrangements have been made by the
Parties, items
not retrieved within 30 days of the date by which Harrisburg has
notified TD that it has earlier ceased using a particular Branded
Supply will be destroyed or reasonably disposed of by
Harrisburg.
(b) Harrisburg
and its Related Parties may use, copy, create derivative works of,
distribute copies of and display in perpetuity any internal
procedures, training manuals and other technical or business
documentation relating to such procedures or manuals (“
Technical Materials ”) that are in Harrisburg’s
possession, custody or control as of the Effective Date,
provided that all such materials used after the License Term
do not depict any of the Prior Marks, and further provided
that this shall not require any removal of Prior Marks from
legal documents, existing files and records and official forms or
from back-up tapes and archived documents so long as such
documents, forms, files, records and tapes are not generally
visible to customers. After the Effective Date, at
Harrisburg’s request, TD will provide Harrisburg with all
Technical Materials in its possession that TD no longer uses,
redacted at TD’s option to remove all Prior Marks, at no
additional charge.
(c) Harrisburg
will remove all Prior Marks from all of its décor, fixtures,
murals, artwork, rugs, carpets, furniture, signage and promotional,
customer or collateral items (including pens, lollipops, dog
biscuits and stamps), materials and content in any media or format
(including online, interactive displays and all user interfaces)
that are in Harrisburg’s possession, custody or control and
are used by or visible to the public (such materials that depict
the Prior Marks are referred to as “ Customer
Materials ”) by September 30, 2009. The same
or similar Customer Materials may continue to be used after
September 30, 2009, except that they may not depict the Prior
Marks. Harrisburg will, at TD’s option, promptly
destroy all Customer Materials in its possession after September
30, 2009 or promptly make all Customer Materials available for
retrieval by TD (in the case of retrieval, at the place where the
items are located and at TD’s cost). TD shall
notify Harrisburg of which of the above options it elects (which
may vary for different types of Customer Materials) by April 1,
2009. Unless different arrangements have been made by
the Parties, items not retrieved within 30 days of the date when
Harrisburg has earlier ceased using a particular Customer Material
will be destroyed or reasonably disposed of by
Harrisburg.
Section
4.6.
Proprietary Rights Release .
(a) To
the extent that Harrisburg complies with the provisions of Article
IV, TD, for itself and its Affiliates, hereby forever and
irrevocably releases and discharges Harrisburg from all Liabilities
arising out of or relating to any claim by TD or its Affiliates (or
the respective successors to their rights) that Harrisburg’s
use or display of any trademarks, service marks, logos, domain
names, trade dress, “look and feel”, or designs, of TD
in existence as of the Effective Date tarnishes, disparages,
infringes, dilutes or misappropriates TD’s or its
Affiliates’ (subject to Section 4.6(a)(iii) below) trademark,
service mark, copyright, design rights, logos, domain name, trade
dress rights or other intellectual property rights existing or
claimed as of the Effective Date, or violates any deceptive trade
practices or other commercial laws. This release and the
other releases in this Article IV do not waive TD’s or its
Affiliates’ rights under the last sentence in Section 4.2(d)
or to bring an Action against Harrisburg alleging that
(i) Harrisburg has not complied with Article IV, in a timely
manner or otherwise, (ii) Harrisburg is infringing or diluting
any new intellectual property rights that TD or its
Affiliates
create, invent or adopt after the Effective Date, and Harrisburg
reserves its defenses and counterclaims with respect thereto and
nothing in this Agreement shall release any claims or rights with
respect thereto, or (iii) Harrisburg is infringing or diluting the
“TD” name and/or green shield logo or any other
intellectual property rights of The Toronto-Dominion Bank, TD Bank,
N.A. or its Affiliates, other than those rights relating to the
“Commerce Bank” banking system, Commerce Bancorp LLC,
its subsidiaries and predecessors. If Harrisburg does
not comply with any provision of Article IV, such non-compliance
will not void this release in its entirety, but such release will
not be in effect and may not be raised as a defense to any such
instance of non-compliance.
(b) Except
as expressly provided in this Article IV, TD for itself and its
Affiliates agrees that Harrisburg and its successors do not need to
change, remove, delete or cease using, on account of any right of
TD or its Affiliates, any other branding, name, trade dress, domain
name, look and feel, policy, procedure, method of doing business,
forms, office documentation and supplies and collateral materials
that Harrisburg has used in connection with its Commerce Bank
banking operations prior to and up to the end of the License
Term.
Section
4.7.
Effect on Affiliates . Harrisburg agrees that the
provisions of this Article IV shall bind Harrisburg and its
Affiliates existing as of the Effective Date (“ Current
Affiliates ”). Despite the foregoing, if any
Current Affiliates are deemed not to be bound hereby, Harrisburg
agrees that it shall be liable to TD for breach of this Article IV
for any act or omission by any Current Affiliate that would breach
this Article IV if committed by
Harrisburg. Notwithstanding Section 10.2(a), if
Harrisburg is acquired by or merged into any third party after the
Effective Date (an “ Acquiror ”), or if
Harrisburg acquires another banking company after the Effective
Date (an “ Acquired Business ”)
Harrisburg’s obligations in Sections 4.1-4.5 and TD’s
release in Section 4.6 shall be unchanged with respect to
Harrisburg’s legacy branches and business operations and the
continuation of such business operations (including new branches of
the Harrisburg business) after the relevant transaction is
effectuated, but shall not bind or extend to or from any legacy
branches of the Acquiror or the Acquired Business (including new
branches of the Acquiror or the Acquired Business), and the Parties
and their Affiliates and any Person acquired or acquiring such
business would reserve their rights in this regard. For
clarity, if Harrisburg acquires “Comet Bank” or is
acquired by “Comet Bank,” (x) Harrisburg’s
obligations in Sections 4.1-4.5 and release in Section 4.6 would
not bind or extend to the legacy Comet Bank branches; (y) TD and
its Affiliates would reserve all rights to assert infringement or
other claims arising from the use of Comet Bank’s trade dress
and trademarks and Comet Bank will reserve all rights and defenses
with respect thereto; and (z) Harrisburg could not use the Prior
Marks in connection with any bank branches of “Comet
Bank” in the Territory. This section does not
alter, modify, or limit the provisions of Section 4.1(b)
above.
ARTICLE V – REPRESENTATIONS
AND WARRANTIES
Section
5.1.
By Each Party . Each Party represents and
warrants to the other Party that: (i) the warranting Party has full
power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement, (ii) this Agreement
has been duly executed and delivered by the warranting Party and,
assuming the due execution and delivery of this Agreement by both
Parties, constitutes a valid and binding agreement of the
warranting Party enforceable against the warranting Party in
accordance with its terms, except as such
enforceability
may be limited by bankruptcy, insolvency, receivership, moratorium,
reorganization or similar laws affecting the enforcement of
creditors’ rights generally and general equitable principles,
and (iii) it has all necessary rights to provide the releases in
Section 1.3.
Section
5.2.
By TD . TD further represents and warrants to
Harrisburg that it shall provide the Services in a timely manner by
competent professionals in the same scope and manner and with the
quality
