-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, B/PMgixiJ0i66meUqMzwAso+SQId0y/L+7SUucmLUdghC7kfC2jreXR+gaoPyFMh tervYSwZN0SzqMguDZlb+g== 0000927796-95-000006.txt : 19950608 0000927796-95-000006.hdr.sgml : 19950608 ACCESSION NUMBER: 0000927796-95-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950227 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950302 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VALLEY NATIONAL BANCORP CENTRAL INDEX KEY: 0000714310 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 222477875 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-11179 FILM NUMBER: 95517936 BUSINESS ADDRESS: STREET 1: 1445 VALLEY RD CITY: WAYNE STATE: NJ ZIP: 07474 BUSINESS PHONE: 2013058800 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) - FEBRUARY 27, 1995 VALLEY NATIONAL BANCORP (Exact Name of Registrant as Specified in Charter) NEW JERSEY (State or Other Jurisdiction of Incorporation) 0-11179 22-2477875 (Commission File Number) (IRS Employer Identification No.) 1445 VALLEY ROAD, WAYNE, NEW JERSEY 07470 (Address of Principal Executive Offices) (201) 305-8800 (Registrant's Telephone Number) Item 5 - Other Events 1. On February 27, 1995, Valley National Bancorp ("Valley") entered into a definitive merger agreement with Lakeland First Financial Group, Inc. ("Lakeland"), by which Valley will acquire Lakeland, the holding company for Lakeland Savings Bank, a $661 million, 16-branch bank headquartered in Succasunna, New Jersey. The parties had signed a letter of intent on January 26, 1995. As previously announced, Lakeland will be merged into Valley. The acquisition of Lakeland is designed as a tax-free merger in which each of the 3,901,770 outstanding shares of Lakeland's common stock, $0.10 per share will be exchanged for 1.225 shares of Valley's common stock, no par value ("Valley Common Stock"). In connection with the execution of the letter of intent, Lakeland also granted Valley an option to acquire 1,250,000 shares of Lakeland's authorized but unissued common stock. The acquisition of Lakeland is conditioned upon necessary bank regulatory approvals, the approval of Lakeland's shareholders and other customary conditions. The parties anticipate that the merger will be consummated in the third quarter of this year. 2. On February 28, 1995, Valley completed the previously announced merger with American Union Bank ("American Union"), a $55 million, two-office bank headquartered in Union, New Jersey. As a result of the merger, American Union shareholders received .50 shares of Valley Common Stock for each share of American Union's common stock. American Union has 549,970 outstanding shares of common stock. Item 7. Exhibits 99.1 Press Release, dated February 27, 1995 99.2 Press Release, dated February 28, 1995 99.3 Agreement and Plan of Merger dated as of February 27, 1995 among Valley, Lakeland, Valley National Bank and Lakeland Savings Bank SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VALLEY NATIONAL BANCORP Dated: March 1, 1995 By: /s/ GERALD H. LIPKIN ------------------------- Gerald H. Lipkin Chairman and Chief Executive Officer INDEX TO EXHIBITS 99.1 Press Release, dated February 27, 1995 99.2 Press Release, dated February 28, 1995 99.3 Agreement and Plan of Merger dated as of February 27, 1995 among Valley, Lakeland, Valley National Bank and Lakeland Savings Bank EX-99.1 2 EXHIBIT 99.1 Exhibit 99.1 For Immediate Release: February 27, 1995 VALLEY NATIONAL BANCORP AND LAKELAND FIRST FINANCIAL GROUP SIGN DEFINITIVE MERGER AGREEMENT WAYNE, NJ -- Gerald H. Lipkin, Chairman and Chief Executive Officer of Valley National Bancorp (NYSE:VLY) and Mike Halpin, President and Chief Executive Officer of Lakeland First Financial Group, Inc. (NASDAQ:LLSL) jointly announced today that they have signed a definitive merger agreement by which Valley will acquire Lakeland, the holding company for Lakeland Savings Bank, a $661 million, 16- branch bank headquartered in Succasunna, NJ. The parties had signed a letter of intent on January 26, 1995. The merger will expand Valley's branch network in Morris County and extend it into two new counties, Sussex and Warren. "With a current return on assets of 1.41% and a return on equity over 18%, Lakeland represents the type or superior performing organization that Valley seeks to coin with in expanding its franchise," said Gerald H. Lipkin. As previously announced, Lakeland will be merged into Valley. The acquisition of Lakeland is designed as a tax-free merger in which each of the 3,901,770 outstanding shares of Lakeland common stock will be exchanged for 1.225 shares of Valley common stock. In connection with the execution of the letter of intent, Lakeland also granted Valley an option to acquire 1,250,000 shares of Lakeland's authorized but unissued common stock. In its most recent merger, completed in November, 1994, Valley acquired RockBank, a $190 million institution based in North Plainfield. That merger added five branches in Middlesex, Somerset and Union counties to the Valley network. During November, 1994, Valley signed a definitive merger agreement pursuant to which Valley agreed to acquire American Union Bank, a $55 million, two- office bank headquartered in Union, NJ. It is anticipated that this merger will be consummated on February 28, 1995. Mike Halpin indicated that "the merger will bring together two great banking institutions creating a much stronger franchise and market presence in northern New Jersey. As a result of the merger, Lakeland will be able to provide an expanded array of banking services to its customers such as investment management and trust services, and cash management services as well as many convenient branch locations." The acquisition is conditioned upon necessary bank regulatory approvals, the approval of Lakeland's shareholders and other customary conditions. The parties anticipate that the merger will be consummated in the third quarter of this year. Valley National Bank, the principal subsidiary or Valley National Bancorp, currently has $3.7 billion in assets and operates 62 branches in 41 communities in Bergen, Essex, Hudson, Middlesex, Morris, Passaic, Somerset and Union counties. EX-99.2 3 EXHIBIT 99.2 Exhibit 99.2 For Immediate Release: February 28, 1995 VALLEY NATIONAL BANCORP COMPLETES MERGER WITH AMERICAN UNION BANK WAYNE, NJ -- Gerald H. Lipkin, Chairman and Chief Executive Officer of Valley National Bancorp (NYSE:VLY) announced today the comple- tion of the previously announced merger with American Union Bank, based in Union, New Jersey. As a result of the merger, American Union shareholders received .50 shares of Valley common stock for each share of American Union common stock that they own. American Union has 549,970 outstanding shares of common stock. American Union has approximately $55 million in assets and operates two branch offices in Union and Roselle Park. Lipkin noted, "The merger with American Union is consistent with Valley's strategy of growth within New Jersey through acquisitions of other strong financial institutions." The merger increases Valley National's total assets to approximate- ly $3.7 billion and its branch network to 64 offices in 43 communities in Bergen, Essex, Hudson, Middlesex, Morris, Passaic, Somerset, and Union counties. On February 27, 1995, Valley signed a definitive merger agreement by which Valley agreed to acquire Lakeland First Financial Group, Inc., the holding company for Lakeland Savings Bank, a $661 million, 16-branch bank headquartered in Succasunna, NJ. The definitive merger agreement was negotiated pursuant to the previously announced letter of intent signed by the parties. The merger will expand Valley's branch network in Morris County and extend it into two new counties, Sussex and Warren. EX-99.3 4 EXHIBIT 99.3 Exhibit 99.3 AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER, dated as of February 27, 1995 ("Agreement"), is among Valley National Bancorp, a New Jersey corporation and registered bank holding company ("Valley"), Valley National Bank, a national banking association ("VNB"), Lakeland First Financial Group, Inc., a New Jersey corporation and registered bank holding company ("Lakeland") and Lakeland Savings Bank, a savings bank chartered under the laws of New Jersey (the "Bank"). Valley desires to acquire Lakeland and Lakeland's Board of Directors has determined, based upon the terms and conditions hereinafter set forth, that the acquisition is in the best interests of Lakeland and its stockholders. The acquisition will be accomplished by merging Lakeland into Valley with Valley as the surviving corporation and, at the same time, merging the Bank into VNB with VNB as the surviving bank, and Lakeland shareholders receiving the consideration hereinafter set forth. The Boards of Directors of Lakeland, Valley, the Bank and VNB have duly adopted and approved this Agreement and the Board of Directors of Lakeland has directed that it be submitted to its shareholders for approval. Lakeland and Valley entered into a letter of intent, dated January 26, 1995 (the "Letter of Intent"), and a Stock Option Agreement, dated January 26, 1995 (the "Valley Stock Option"), in contemplation of entering into this Agreement. Accordingly, the parties hereto agree as follows: ARTICLE I THE MERGER 1.1. THE MERGER. Subject to the terms and conditions of this Agreement, at the Effective Time (as hereafter defined), Lakeland shall be merged with and into Valley (the "Merger") in accordance with the New Jersey Business Corporation Act and Valley shall be the surviving corporation (the "Surviving Corporation"). Immediately following the Effective Time, the Bank shall be merged with and into VNB as provided in Section 1.7 hereof. 1.2. EFFECT OF THE MERGER. At the Effective Time (as hereafter defined), the Surviving Corporation shall be considered the same business and corporate entity as each of Lakeland and Valley and thereupon and thereafter, all the property, rights, powers and franchises of each of Lakeland and Valley shall vest in the Surviving Corporation and the Surviving Corporation shall be subject to and be deemed to have assumed all of the debts, liabilities, obligations and duties of each of Lakeland and Valley and shall have succeeded to all of each of their relationships, fiduciary or otherwise, as fully and to the same extent as if such property rights, privileges, powers, franchises, debts, obligations, duties and relationships had been originally acquired, incurred or entered into by the Surviving Corporation. 1.3. CERTIFICATE OF INCORPORATION. The certificate of incorporation of Valley as it exists immediately prior to the Effective Time shall not be amended by the Merger, but shall continue as the certificate of incorporation of the Surviving Corporation until otherwise amended as provided by law. 1.4. BYLAWS. The bylaws of Valley as they exist immediately prior to the Effective Date shall continue as the by- laws of the Surviving Corporation until otherwise amended as provided by law. 1.5. DIRECTORS AND OFFICERS. The directors and officers of Valley as of the Effective Time shall continue as the directors and officers of the Surviving Corporation with the additions provided for in Section 5.15 hereof. 1.6. EFFECTIVE TIME AND CLOSING. The Merger shall become effective (and be consummated) upon the filing of the certificate of merger (the "Certificate of Merger") with the New Jersey Secretary of State. The term "Effective Time" shall mean the date and time when the Certificate of Merger is so filed. A closing (the "Closing") shall take place prior to the Effective Time at 10:00 a.m., on the first day of the month next following the receipt of all necessary regulatory and governmental approvals and consents and the expiration of all statutory waiting periods in respect thereof and the satisfaction or waiver of the conditions to the consummation of the Merger specified in Article VI hereof (other than the delivery of certificates, opinions and other instruments and documents to be delivered at the Closing), at Valley's main office or at such other place, time or date as Valley and Lakeland may mutually agree upon. When all necessary regulatory and governmental approvals and consents have been received and all statutory waiting periods in respect thereto are scheduled to expire on a date certain (or have already expired) and all other conditions to the consummation of the Merger specified in Article VI hereof (other than the delivery of certificates, opinions and other instruments and documents to be delivered at the Closing) have been met, then the parties shall schedule a date for the Closing (the "Scheduled Closing Date"). Immediately following the Closing, the Certificate of Merger shall be filed with the New Jersey Secretary of State. 1.7. THE BANK MERGER. Immediately following the Effective Time, the Bank shall be merged with and into VNB (the "Bank Merger") in accordance with the provisions of the National Bank Act and the New Jersey Banking Act of 1948, as amended, and VNB shall be the surviving bank (the "Surviving Bank"). Upon the consummation of the Bank Merger, the separate existence of the Bank shall cease and the Surviving Bank shall be considered the same business and corporate entity as each of the Bank and VNB and all of the property, rights, powers and franchises of each of the Bank and VNB shall vest in the Surviving Bank and the Surviving Bank shall be deemed to have assumed all of the debts, liabilities, obligations and duties of each of the Bank and VNB and shall have succeeded to all of each of their relationships, fiduciary or otherwise, as fully and to the same extent as if such property rights, privileges, powers, franchises, debts, obligations, duties and relationships had been originally acquired, incurred or entered into by the Surviving Bank. Upon the consummation of the Bank Merger, the articles of association and bylaws of VNB shall become the articles of association and bylaws of the Surviving Bank and the officers, employees and directors of VNB and the officers and employees of the Bank shall be the officers, employees and directors of the Surviving Bank with such additions from the directors of Lakeland as specified herein. In connection with the execution of this Agreement, the Bank and VNB shall execute and deliver a separate merger agreement (the "Bank Merger Agreement") in the form of Appendix A, annexed hereto, for delivery to the OCC (as hereafter defined) and the Commissioner (as hereafter defined) for approval of the Bank Merger. ARTICLE II CONVERSION OF LAKELAND SHARES 2.1. CONVERSION OF LAKELAND SHARES AND OPTIONS. Each share of common stock, $0.10 par value, of Lakeland ("Lakeland Common Stock"), issued and outstanding immediately prior to the Effective Time, and each validly outstanding option to purchase Lakeland Common Stock, shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted, paid or cancelled as follows: (a) LAKELAND COMMON STOCK. Each share of Lakeland Common Stock shall be converted into and represent the right to receive 1.225 (the "Exchange Ratio") shares of Valley's common stock, no par value ("Valley Common Stock"), subject to adjustments as set forth in this subsection 2.1(a). (i) The Exchange Ratio and the Average Closing Price (as hereafter defined) shall be appropriately adjusted for any stock split, stock dividend, stock combination, reclassification or similar transaction ("Capital Change") effected by Valley with respect to Valley Common Stock between January 26, 1995 and the Effective Date. The parties shall mutually agree upon such adjustment in writing or, if unable to agree, shall arbitrate the dispute, using a mutually agreed upon arbitrator whose decision shall be final and non- appealable. (ii) No fractional shares of Valley Common Stock will be issued, and in lieu thereof, each holder of Lakeland Common Stock who would otherwise be entitled to a fractional interest will receive an amount in cash determined by multiplying such fractional interest by the Average Closing Price (as hereafter defined). (iii) The "Average Closing Price" shall mean the average price of Valley Common Stock calculated based upon the closing price during the first 10 of the 15 consecutive trading days immediately preceding the Closing. The Average Closing Price shall be determined by (x) first, recording the closing price (the "Daily Price") of Valley Common Stock reported on the New York Stock Exchange and published in THE WALL STREET JOURNAL during the first 10 of the 15 consecutive trading days immediately preceding the Closing; and (y) second, computing the average of the Daily Prices in the 10 day period. (b) LAKELAND STOCK OPTIONS. At the Effective Time, each outstanding option to purchase Lakeland Common Stock (a "Lakeland Option") granted under the Stock Option Plans of Lakeland (the "Lakeland Option Plans") shall be converted, at the election of the holder of such Lakeland Option (an "optionee"), as follows: (i) into an option to purchase Valley Common Stock, wherein (x) the right to purchase shares of Lakeland Common Stock pursuant to the Lakeland Option shall be converted into the right to purchase that same number of shares of Valley Common Stock multiplied by the Exchange Ratio, (y) the option exercise price per share of Valley Common Stock shall be the previous option exercise price per share of the Lakeland Common Stock divided by the Exchange Ratio and (z) in all other material respects the option shall be subject to the same terms and conditions as governed the Lakeland Option on which it was based, including the length of time within which the option may be exercised and for any options which are "incentive stock options" (as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), the adjustments shall be and are intended to be effected in a manner which is consistent with Section 424(a) of the Code; or (ii) if the Lakeland Option is fully vested at the Closing, into the right to receive immediately after the Effective Time a number of whole shares of Valley Common Stock equal to (x) the excess of the sum determined by multiplying (A) the number of shares of Lakeland Common Stock covered by the Lakeland Option, times (B) the Exchange Ratio, times (C) the Average Closing Price, less (y) the aggregate exercise price for the Lakeland Option (z) divided by the Average Closing Price. No fractional shares of Valley Common Stock shall be issued pursuant to this Section 2.1(b)(ii), and in lieu thereof, each optionee who would otherwise be entitled to a fractional interest will receive an amount in cash determined by multiplying such fractional interest by the Average Closing Price. 2.2. EXCHANGE OF SHARES. (a) Lakeland and Valley hereby appoint Valley National Bank, Trust Department (the "Exchange Agent") as the Exchange Agent for purposes of effecting the conversion of Lakeland Common Stock and Lakeland Options. As soon as practicable after the Effective Time, the Exchange Agent shall mail to each holder of record (a "Record Holder") of a certificate or certificates which, immediately prior to the Effective Time represented outstanding shares of Lakeland Common Stock (the "Certificates"), a mutually agreed upon 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 Valley Common Stock (and cash in lieu of fractional shares) as provided in Section 2.1. Upon surrender of a Certificate for exchange and cancellation to the Exchange Agent, together with such letter of transmittal, duly executed, the Record Holder shall be entitled to promptly receive in exchange for such Certificate the consideration as provided in Section 2.1 hereof and the Certificates so surrendered shall be cancelled. The Exchange Agent shall not be obligated to deliver or cause to be delivered to any Record Holder the consideration to which such Record Holder would otherwise be entitled until such Record Holder surrenders the Certificate for exchange or, in default thereof, an appropriate Affidavit of Loss and Indemnity Agreement and/or a bond as may be reasonably required in each case by Valley. Notwithstanding the time of surrender of the Certificates, Record Holders shall be deemed shareholders of Valley for all purposes from the Effective Time, except that Valley shall withhold the payment of dividends from any Record Holder until such Record Holder effects the exchange of Certificates for Valley Common Stock. (Such Record Holder shall receive such withheld dividends, without interest, upon effecting the share exchange.) With respect to each outstanding Lakeland Option the Exchange Agent shall, 10 days prior to Closing, distribute option election forms to each optionee and, upon receipt from the optionee of a properly completed option election, shall after the Effective Time distribute to the optionee Valley Common Stock or an amendment to the option grant evidencing the conversion of the grant to an option to purchase Valley Common Stock in accordance with Section 2.1 hereof. (b) After the Effective Time, there shall be no transfers on the stock transfer books of Lakeland of the shares of Lakeland Common Stock which were outstanding immediately prior to the Effective Time and, if any Certificates representing such shares are presented for transfer, they shall be cancelled and exchanged for the consideration as provided in Section 2.1 hereof. (c) If payment of the consideration pursuant to Section 2.1 hereof is to be made in a name other than that in which the Certificate surrendered in exchange therefor is registered, it shall be a condition of such payment 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 payment shall pay to the Exchange Agent in advance any transfer or other taxes required by reason of the payment to a person other than that of the registered holder of the Certificate surrendered, or required for any other reason, or shall establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable. 2.3. NO DISSENTERS' RIGHTS. Consistent with the provisions of the New Jersey Business Corporation Act, no shareholder of Lakeland shall have the right to dissent. 2.4. VALLEY SHARES. The shares of Valley Common Stock outstanding at the Effective Time shall not be affected by the Merger, but along with the additional shares of Valley Common Stock to be issued as provided in Section 2.1 hereof, shall become the outstanding common stock of the Surviving Corporation. ARTICLE III REPRESENTATIONS AND WARRANTIES OF LAKELAND References herein to "Lakeland Disclosure Schedule" shall mean all of the disclosure schedules required by this Article III, dated as of the date hereof and referenced to the specific sections and subsections of Article III of this Agreement, which have been delivered on the date hereof by Lakeland to Valley. Lakeland hereby represents and warrants to Valley as follows: 3.1. CORPORATE ORGANIZATION. (a) Lakeland is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. Lakeland 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 so licensed or qualified would not have a material adverse effect on the business, operations, assets or financial condition of Lakeland on a consolidated basis. Lakeland is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended ("BHCA"). (b) Each of the Subsidiaries of Lakeland are listed in the Lakeland Disclosure Schedule. The term "Subsidiary", when used in this Agreement with respect to Lakeland, means any corporation, joint venture, association, partnership, trust or other entity in which Lakeland has, directly or indirectly at least a 50% interest or acts as a general partner. Each Subsidiary of Lakeland is duly organized, validly existing and in good standing under the laws of its state of incorporation. The Bank is a New Jersey savings bank whose deposits are insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation ("FDIC") to the fullest extent permitted by law. Each Subsidiary of Lakeland 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 so licensed or qualified would not have a material adverse effect on the business, operations, assets or financial condition of Lakeland and its Subsidiaries. The Lakeland Disclosure Schedule sets forth true and complete copies of the Certificate of Incorporation and Bylaws of Lakeland and each Lakeland Subsidiary as in effect on the date hereof. Except as set forth in the Lakeland Disclosure Schedule, Lakeland does not own or control, directly or indirectly, any equity interest in any corporation, company, association, partnership, joint venture or other entity and owns no real estate, except (i) residential real estate acquired through foreclosure or deed in lieu of foreclosure in each individual instance with a fair market value less than $500,000 and (ii) real estate used for its banking premises. 3.2. CAPITALIZATION. The authorized capital stock of Lakeland consists of 15,000,000 shares of Lakeland Common Stock and 5,000,000 shares of preferred stock ("Lakeland Preferred Stock"). As of February 3, 1995, there were 3,901,770 shares of Lakeland Common Stock issued and outstanding and no shares issued and held in the treasury. There are no shares of Lakeland Preferred Stock issued or outstanding. As of February 3, 1995, there were 110,157 shares of Lakeland Common Stock issuable upon exercise of outstanding Lakeland Options granted to directors, officers and employees of the Bank pursuant to the Lakeland Option Plan. The Lakeland Disclosure Schedule sets forth true and complete copies of the Lakeland Option Plans and of each outstanding Lakeland Option. All issued and outstanding shares of Lakeland Common Stock, and all issued and outstanding shares of capital stock of each Lakeland Subsidiary, have been duly authorized and validly issued, are fully paid, and nonassessable. The authorized capital stock of the Bank consists of 10,000,000 shares of common stock, $2.00 par value. All of the outstanding shares of capital stock of each Lakeland Subsidiary are owned by Lakeland and are free and clear of any liens, encumbrances, charges, restrictions or rights of third parties. Except for the Lakeland Options and the Valley Stock Option, neither Lakeland nor any Lakeland Subsidiary has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the transfer, purchase or issuance of any shares of capital stock of Lakeland or any Lakeland Subsidiary or any securities representing the right to purchase or otherwise receive any shares of such capital stock or any securities convertible into or representing the right to purchase or subscribe for any such shares, and there are no agreements or understandings with respect to voting of any such shares. 3.3. AUTHORITY; NO VIOLATION. (a) Subject to the approval of this Agreement and the transactions contemplated hereby by the shareholders of Lakeland, and subject to the parties obtaining all necessary regulatory approvals, Lakeland and the Bank have full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby in accordance with the terms hereof. 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 each of Lakeland and the Bank. The execution and delivery of the Bank Merger Agreement has been duly and validly approved by the Board of Directors of the Bank. Except for the approvals described in paragraph (b) below, no other corporate proceedings on the part of Lakeland or the Bank are necessary to consummate the transactions contemplated hereby (except for the approval by Lakeland of the Bank Merger Agreement). This Agreement has been duly and validly executed and delivered by Lakeland and the Bank, and constitutes valid and binding obligations of Lakeland and the Bank, enforceable against Lakeland and the Bank in accordance with its terms. (b) Neither the execution and delivery of this Agreement by Lakeland and the Bank, nor the consummation by Lakeland and the Bank of the transactions contemplated hereby in accordance with the terms hereof, or compliance by Lakeland and the Bank with any of the terms or provisions hereof, will (i) violate any provision of Lakeland's or the Bank's Certificate of Incorporation or other governing instrument or Bylaws, (ii) assuming that the consents and approvals set forth below are duly obtained, violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Lakeland or the Bank or any of their respective properties or assets, or (iii) except as set forth in the Lakeland Disclosure Schedule, violate, conflict with, result in a breach of any provisions of, 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, accelerate the performance required by, or result in the creation of any lien, security interest, charge or other encumbrance upon any of the respective properties or assets of Lakeland or the Bank 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 Lakeland or the Bank is a party, or by which either or both of them or any of their respective properties or assets may be bound or affected except, with respect to (ii) and (iii) above, such as individually and in the aggregate will not have a material adverse effect on the business, operations, assets or financial condition of Lakeland and its Subsidiaries on a consolidated basis, and which will not prevent or delay the consummation of the transactions contemplated hereby. Except for consents and approvals of or filings or registrations with or notices to the Comptroller of the Currency ("OCC"), the Commissioner of Banking of the State of New Jersey (the "Commissioner"), the Board of Governors of the Federal Reserve System ("FRB"), the Securities and Exchange Commission ("SEC"), the New Jersey Secretary of State, and the shareholders of Lakeland, no consents or approvals of or filings or registrations with or notices to any third party or any public body or authority are necessary on behalf of Lakeland or the Bank in connection with (x) the execution and delivery by Lakeland and the Bank of this Agreement and (y) the consummation by Lakeland and the Bank of transactions contemplated hereby and (z) the execution and delivery by the Bank of the Bank Merger Agreement and the consummation by the Bank of the transactions contemplated thereby. 3.4. FINANCIAL STATEMENTS. (a) The Lakeland Disclosure Schedule sets forth copies of the consolidated statements of condition of Lakeland as of June 30, 1992, 1993 and 1994, and the related consolidated statements of income, stockholders' equity and cash flows for the periods ended June 30 in each of the three years 1992 through 1994, in each case accompanied by the audit report of Stephen P. Radics, independent public accountants with respect to Lakeland, and the unaudited consolidated statements of condition and related consolidated statements of income, stockholders' equity and cash flows of Lakeland for the periods ended September 30, 1994 and December 31, 1994, as filed with the SEC on Form 10-Q under the Securities Exchange Act of 1934, as amended (the "1934 Act") (collectively, the "Lakeland Financial Statements"). The Lakeland Financial Statements (including the related notes) have been prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied during the periods involved, and fairly present the consolidated financial condition of Lakeland as of the respective dates set forth therein, and the related consolidated statements of income, stockholders' equity and cash flows fairly present the results of the consolidated operations, stockholders' equity and cash flows of Lakeland for the respective periods set forth therein. (b) The books and records of Lakeland and its Subsidiaries have been and are being maintained in material compliance with applicable legal and accounting requirements, and reflect only actual transactions. (c) Except as and to the extent reflected, disclosed or reserved against in the Lakeland Financial Statements (including the notes thereto), as of December 31, 1994 neither Lakeland nor any of its Subsidiaries had any material liabilities, whether absolute, accrued, contingent or otherwise material to the business, operations, assets or financial condition of Lakeland or any of its Subsidiaries. Since December 31, 1994 and to the date hereof, neither Lakeland nor any of its Subsidiaries have incurred any material liabilities except in the ordinary course of business and consistent with prudent banking practice, except as specifically contemplated by this Agreement. 3.5. BROKERAGE FEES. Neither Lakeland nor any of its Subsidiaries nor any of their respective directors or officers has employed any broker or finder or incurred any liability for any broker's or finder's fees or commissions in connection with any of the transactions contemplated by this Agreement, except for Hopper Soliday & Co., Inc. ("Hopper Soliday"). Copies of the agreements with Hopper Soliday are set forth in the Lakeland Disclosure Schedule. 3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. (a) There has not been any material adverse change in the business, operations, assets or financial condition of Lakeland and its Subsidiaries on a consolidated basis since December 31, 1994 and to Lakeland's knowledge, no facts or conditions exist which Lakeland believes will cause or is likely to cause such a material adverse change in the future. (b) Except as set forth in the Lakeland Disclosure Schedule, neither Lakeland nor any of its Subsidiaries has taken or permitted any of the actions set forth in Section 5.2 hereof between December 31, 1994 and the date hereof and Lakeland and the Lakeland Subsidiaries have conducted their business only in the ordinary course, consistent with past practice. 3.7. LEGAL PROCEEDINGS. Except as disclosed in the Lakeland Disclosure Schedule, neither Lakeland nor any of its Subsidiaries is a party to any, and there are no pending or, to Lakeland's knowledge, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental investigations of any nature against Lakeland or any of its Subsidiaries. Except as disclosed in the Lakeland Disclosure Schedule, neither Lakeland nor any of its Subsidiaries is a party to any order, judgment or decree entered against Lakeland or any Lakeland Subsidiary in any lawsuit or proceeding. 3.8. TAXES AND TAX RETURNS. (a) To its knowledge, Lakeland and each Lakeland Subsidiary have duly filed (and until the Effective Time will so file) all returns, declarations, reports, information returns and statements ("Returns") required to be filed by them in respect of any federal, state and local taxes (including withholding taxes, penalties or other payments required) and each has duly paid (and until the Effective Time will so pay) all such taxes due and payable, other than taxes or other charges which are being contested in good faith (and disclosed to Valley in writing). Lakeland and each Lakeland Subsidiary have established (and until the Effective Time will establish) on their books and records reserves for the payment of all federal, state and local taxes not yet due and payable, but incurred in respect of Lakeland or any Lakeland Subsidiary through such date, which reserves are, to the knowledge of Lakeland, adequate for such purposes. Except as set forth in the Lakeland Disclosure Schedule, the federal income tax returns of Lakeland and its Subsidiaries have been examined by the Internal Revenue Service (the "IRS") (or are closed to examination due to the expiration of the applicable statute of limitations) and no deficiencies were asserted as a result of such examinations which have not been resolved and paid in full. Except as set forth in the Lakeland Disclosure Schedule, the applicable state income tax returns of Lakeland and its Subsidiaries have been examined by the applicable authorities (or are closed to examination due to the expiration of the statute of limitations) and no deficiencies were asserted as a result of such examinations which have not been resolved and paid in full. To the knowledge of Lakeland, there are no audits or other administrative or court proceedings presently pending nor any other disputes pending, or claims asserted for, taxes or assessments upon Lakeland or any of its Subsidiaries, nor has Lakeland or any of its Subsidiaries given any currently outstanding waivers or comparable consents regarding the application of the statute of limitations with respect to any taxes or tax Returns. (b) Except as set forth in the Lakeland Disclosure Schedule, neither Lakeland nor any of its Subsidiaries (i) has requested any extension of time within which to file any tax Return which Return has not since been filed, (ii) is a party to any agreement providing for the allocation or sharing of taxes, (iii) is required to include in income any adjustment pursuant to Section 481(a) of the Code, by reason of a voluntary change in accounting method initiated by Lakeland or any Lakeland Subsidiary (nor does Lakeland have any knowledge that the IRS has proposed any such adjustment or change of accounting method) or (iv) has filed a consent pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply. 3.9. EMPLOYEE BENEFIT PLANS. Except as disclosed in the Lakeland Disclosure Schedule: (a) Neither Lakeland nor any of its Subsidiaries maintains or contributes to any "employee pension benefit plan", within the meaning of Section 3(2)(A) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") (the "Lakeland Pension Plans"), "employee welfare benefit plan", within the meaning of Section 3(1) of ERISA (the "Lakeland Welfare Plans"), stock option plan, stock purchase plan, deferred compensation plan, severance plan, bonus plan, employment agreement or other similar plan, program or arrangement. Neither Lakeland nor any of its Subsidiaries has, since September 2, 1974, contributed to any "Multiemployer Plan", within the meaning of Sections 3(37) and 4001(a)(3) of ERISA. (b) Lakeland has delivered to Valley a complete and accurate copy of each of the following with respect to each of the Lakeland Pension Plans and Lakeland Welfare Plans: (i) plan document, summary plan description, and summary of material modifications (if not available, a detailed description of the foregoing); (ii) trust agreement or insurance contract, if any; (iii) most recent IRS determination letter, if any; (iv) most recent actuarial report, if any; and (v) most recent annual report on Form 5500. (c) The present value of all accrued benefits under each of the Lakeland Pension Plans subject to Title IV of ERISA, based upon the actuarial assumptions used for purposes of the most recent actuarial valuation prepared by such Pension Plan's actuary, did not exceed the then current value of the assets of such plans allocable to such accrued benefits. (d) During the last five years, the Pension Benefit Guaranty Corporation (the "PBGC") has not asserted any claim for liability against Lakeland or any of its Subsidiaries which has not been paid in full. (e) All premiums (and interest charges and penalties for late payment, if applicable) due to the PBGC with respect to each Lakeland Pension Plan have been paid. All contributions required to be made to each Lakeland Pension Plan under the terms thereof, ERISA or other applicable law have been timely made, and all amounts properly accrued to date as liabilities of Lakeland and its Subsidiaries which have not been paid have been properly recorded on the books of Lakeland and its Subsidiaries. (f) To the knowledge of Lakeland, each of the Lakeland Pension Plans, the Lakeland Welfare Plans and each other plan and arrangement identified on the Lakeland Disclosure Schedule has been operated in compliance in all material respects with the provisions of ERISA, the Code, all regulations, rulings and announcements promulgated or issued thereunder, and all other applicable governmental laws and regulations. Furthermore, the IRS has issued a favorable determination letter with respect to each of the Lakeland Pension Plans and Lakeland is not aware of any fact or circumstance which would disqualify either plan, that could not be retroactively corrected (in accordance with the procedures of the IRS). (g) To the knowledge of Lakeland, within the past two plan years no non-exempt prohibited transaction, within the meaning of Section 4975 of the Code or Section 406 of ERISA, has occurred with respect to any of the Lakeland Welfare Plans or Lakeland Pension Plans. (h) No Lakeland Pension Plan or any trust created thereunder has been terminated, nor have there been any "reportable events", within the meaning of Section 4034(b) of ERISA, with respect to any of the Lakeland Pension Plans. (i) To the knowledge of Lakeland, no "accumulated funding deficiency", within the meaning of Section 412 of the Code, has been incurred with respect to any of the Lakeland Pension Plans. (j) There are no pending, or, to the knowledge of Lakeland, threatened or anticipated claims (other than routine claims for benefits) by, on behalf of or against any of the Lakeland Pension Plans or the Lakeland Welfare Plans, any trusts related thereto or any other plan or arrangement identified in the Lakeland Disclosure Schedule. (k) No Lakeland Pension or Welfare Plan provides medical or death benefits (whether or not insured) beyond an employee's retirement or other termination of service, other than (i) coverage mandated by law, or (ii) death benefits under any Lakeland Pension Plan. (l) Except with respect to customary health, life and disability benefits or as disclosed in the Lakeland Disclosure Schedule, there are no unfunded benefits obligations which are not accounted for by reserves shown on the financial statements and established under GAAP, or otherwise noted on such financial statements. (m) With respect to each Lakeland Pension and Welfare Plan that is funded wholly or partially through an insurance policy, there will be no liability of Lakeland or any Lakeland Subsidiary as of the Effective Time under any such insurance policy or ancillary agreement with respect to such insurance policy in the nature of a retroactive rate adjustment, loss sharing arrangement or other actual or contingent liability arising wholly or partially out of events occurring prior to the Effective Time. (n) Except as hereafter agreed to by Valley in writing, the consummation of the transactions contemplated by this Agreement will not (i) entitle any current or former employee of Lakeland or any Lakeland Subsidiary to severance pay or any similar payment, or (ii) accelerate the time of payment, vesting, or increase the amount, of any compensation due to any current employee or former employee under any Lakeland Pension or Welfare Plan. 3.10. REPORTS. (a) Each communication mailed by Lakeland to its stockholders since January 1, 1992, and each annual, quarterly or special report, proxy statement or communication, as of its date, complied in all material respects with all applicable statutes, rules and regulations enforced or promulgated by the applicable regulatory agency and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; provided that disclosures as of a later date shall be deemed to modify disclosures as of an earlier date. (b) Lakeland and the Bank have, since January 1, 1992, duly filed with the FDIC and the FRB in correct form in all material respects the monthly, quarterly and annual reports required to be filed under applicable laws and regulations, and Lakeland promptly will deliver or make available to Valley accurate and complete copies of such reports. The Lakeland Disclosure Schedule lists all examinations of Lakeland or the Bank conducted by either the New Jersey Department of Banking, FDIC or the FRB since January 1, 1992 and the dates of any responses thereto submitted by Lakeland or the Bank. 3.11. LAKELAND AND BANK INFORMATION. The information relating to Lakeland and the Bank to be contained in the Proxy Statement/Prospectus (as defined in Section 5.6(a) hereof) to be delivered to stockholders of Lakeland in connection with the solicitation of their approval of this Agreement and the transactions contemplated hereby, as of the date the Proxy Statement/Prospectus is mailed to stockholders of Lakeland, and up to and including the date of the meeting of stockholders to which such Proxy Statement/Prospectus relates, 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 under which they were made, not misleading. 3.12. COMPLIANCE WITH APPLICABLE LAW. (a) GENERAL. Except as set forth in the Lakeland Disclosure Schedule, each of Lakeland and the Lakeland Subsidiaries hold all material licenses, franchises, permits and authorizations necessary for the lawful conduct of its business under and pursuant to each, and has complied with and is not in default in any respect under any, applicable law, statute, order, rule, regulation, policy and/or guideline of any federal, state or local governmental authority relating to Lakeland or the Bank (other than where such defaults or non-compliances will not, alone or in the aggregate, result in a material adverse effect on the business, operations, assets or financial condition of Lakeland and its Subsidiaries on a consolidated basis) and Lakeland has not received notice of violation of, and does not know of any violations of, any of the above. (b) CRA. Without limiting the foregoing, to its knowledge the Bank has complied in all material respects with the Community Reinvestment Act ("CRA") and Lakeland has no reason to believe that any person or group would object to the consummation of this Merger due to the CRA performance of or rating of the Bank. Except as listed on the Lakeland Disclosure Schedule, no person or group has adversely commented upon the Bank's CRA performance. 3.13. CERTAIN CONTRACTS. (a) Except as disclosed in the Lakeland Disclosure Schedule under this Section or Section 3.5, (i) neither Lakeland nor any Lakeland Subsidiary is a party to or bound by any contract or understanding (whether written or oral) with respect to the employment or termination of any present or former officers, employees, directors or consultants. The Lakeland Disclosure Schedule sets forth true and correct copies of all employment agreements or termination agreements with officers, employees, directors, or consultants to which Lakeland or any Lakeland Subsidiary is a party. (b) Except as disclosed in the Lakeland Disclosure Schedule, (i) as of the date of this Agreement, neither Lakeland nor any Lakeland Subsidiary is a party to or bound by any commitment, agreement or other instrument which contemplates the payment by Lakeland or any Lakeland Subsidiary of amounts in excess of $100,000, or which has a term extending beyond December 31, 1995 and cannot be terminated by Lakeland or its subsidiary without consent of the other party thereto, (ii) no commitment, agreement or other instrument to which Lakeland or any Lakeland Subsidiary is a party or by which any of them is bound limits the freedom of Lakeland or any Lakeland Subsidiary to compete in any line of business or with any person, and (iii) neither Lakeland nor any Lakeland Subsidiary is a party to any collective bargaining agreement. (c) Except as disclosed in the Lakeland Disclosure Schedule, neither Lakeland nor any Lakeland Subsidiary nor, to the knowledge of Lakeland, any other party thereto, is in default in any material respect under any material lease, contract, mortgage, promissory note, deed of trust, loan or other commitment or arrangement. 3.14. PROPERTIES AND INSURANCE. (a) Lakeland and its Subsidiaries have good and, as to owned real property, marketable title to all material assets and properties, whether real or personal, tangible or intangible, reflected in Lakeland's consolidated balance sheet as of December 31, 1994, or owned and acquired subsequent thereto (except to the extent that such assets and properties have been disposed of for fair value in the ordinary course of business since December 31, 1994), subject to no encumbrances, liens, mortgages, security interests or pledges, except (i) those items that secure liabilities that are reflected in such balance sheet or the notes thereto or incurred in the ordinary course of business after the date of such balance sheet, (ii) statutory liens for amounts not yet delinquent or which are being contested in good faith, (iii) such encumbrances, liens, mortgages, security interests, pledges and title imperfections that are not in the aggregate material to the business, operations, assets, and financial condition of Lakeland and its Subsidiaries taken as a whole and (iv) with respect to owned real property, title imperfections noted in title reports delivered to Valley prior to the date hereof. Lakeland and its Subsidiaries as lessees have the right under valid and subsisting leases to occupy, use, possess and control all property leased by them in all material respects as presently occupied, used, possessed and controlled by them. (b) The Lakeland Disclosure Schedule lists all policies of insurance covering business operations and all insurable properties and assets of Lakeland and its Subsidiaries showing all risks insured against, in each case under valid, binding and enforceable policies or bonds, with such amounts and such deductibles as are specified. As of the date hereof, neither Lakeland nor any of its Subsidiaries has received any notice of cancellation or notice of a material amendment of any such insurance policy or bond or is in default under such policy or bond, no coverage thereunder is being disputed and all material claims thereunder have been filed in a timely fashion. 3.15. MINUTE BOOKS. The minute books of Lakeland and its Subsidiaries contain records that are accurate in all material respects of all meetings and other corporate action held of their respective stockholders and Boards of Directors (including committees of their respective Boards of Directors). 3.16. ENVIRONMENTAL MATTERS. Except as disclosed in the Lakeland Disclosure Schedule, neither Lakeland nor any of its Subsidiaries has received any written notice, citation, claim, assessment, proposed assessment or demand for abatement alleging that Lakeland or any of its Subsidiaries (either directly or as a successor-in-interest in connection with the enforcement of remedies to realize the value of properties serving as collateral for outstanding loans) is responsible for the correction or clean-up of any condition material to the business, operations, assets or financial condition of Lakeland or its Subsidiaries. Except as disclosed in the Lakeland Disclosure Schedule, Lakeland has no knowledge that any toxic or hazardous substances or materials have been emitted, generated, disposed of or stored on any property owned or leased by Lakeland or any of its Subsidiaries in any manner that violates or, after the lapse of time may violate, any presently existing federal, state or local law or regulation governing or pertaining to such substances and materials. 3.17. RESERVES. As of the date hereof, the reserve for loan and lease losses in the Lakeland Financial Statements is , to Lakeland's knowledge, adequate based upon past loan loss experiences and potential losses in the current portfolio to cover all known or anticipated loan losses. 3.18. NO PARACHUTE PAYMENTS. No officer, director, employee or agent (or former officer, director, employee or agent) of Lakeland or any Lakeland Subsidiary is entitled now, or will or may be entitled to as a consequence of this Agreement or the Merger, to any payment or benefit from Lakeland, a Lakeland Subsidiary, Valley or VNB which if paid or provided would constitute an "excess parachute payment", as defined in Section 280G of the Code or regulations promulgated thereunder. 3.19 DISCLOSURE. There are no material facts concerning the business, operations, assets or financial condition of Lakeland or its Subsidiaries which could have a material adverse effect on the business, operations or financial condition of Lakeland or its Subsidiaries on a consolidated basis which have not been disclosed to Valley directly or indirectly by access to any filing by Lakeland under the 1934 Act. The representations and warranties contained in Article III of this Agreement are accurate in all material respects. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF VALLEY References herein to the "Valley Disclosure Schedule" shall mean all of the disclosure schedules required by this Article IV, dated as of the date hereof and referenced to the specific sections and subsections of Article IV of this Agreement, which have been delivered on the date hereof by Valley to Lakeland. Valley hereby represents and warrants to Lakeland as follows: 4.1. CORPORATE ORGANIZATION. (a) Valley is a corporation duly organized and validly existing and in good standing under the laws of the State of New Jersey. Valley 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 so licensed or qualified would not have a material adverse effect on the business, operations, assets or financial condition of Valley or its Subsidiaries (defined below). Valley is registered as a bank holding company under the BHCA. (b) Each of the Subsidiaries of Valley are listed in the Valley Disclosure Schedule. The term "Subsidiary" when used in this Agreement with reference to Valley, means any corporation, joint venture, association, partnership, trust or other entity in which Valley has, directly or indirectly, at least a 50% interest or acts as a general partner. Each Subsidiary of Valley is duly organized and validly existing and in good standing under the laws of the jurisdiction of its incorporation. VNB is a national bank whose deposits are insured by the Bank Insurance Fund of the FDIC to the fullest extent permitted by law. Each Subsidiary of Valley 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 so licensed or qualified would not have a material adverse effect on the business, operations, assets or financial condition of Valley and its Subsidiaries. 4.2. CAPITALIZATION. The authorized capital stock of Valley consists solely of 37,537,500 shares of Valley Common Stock. As of December 31, 1994, there were 28,828,404 shares of Valley Common Stock issued and outstanding net of treasury stock, and 121,696 treasury shares. Since such date, and from time to time hereafter, Valley may repurchase shares of its Common Stock. Since December 31, 1994, to and including the date of this Agreement, no additional shares of Valley Common Stock have been issued except in connection with exercises of options granted under the Long-Term Stock Incentive Plan of Valley (the "Valley Option Plan") or grants of restricted stock under the Valley Option Plan or upon exercise of outstanding Warrants (as hereafter defined). As of December 31, 1994, except for: (a) 485,624 shares of Valley Common Stock issuable upon exercise of outstanding stock options and stock appreciation rights granted pursuant to the Valley Option Plan, (b) up to 565,065 shares issuable upon exercise of the outstanding warrants issued by Valley in connection with the acquisition of Mayflower Financial Corporation (the "Warrants"), and (c) 10,312 shares of Valley Common Stock issuable upon exercise of outstanding stock options granted to a consultant for Valley, there were no shares of Valley Common Stock issuable upon the exercise of outstanding stock options or otherwise. All issued and outstanding shares of Valley Common Stock, and all issued and outstanding shares of capital stock of Valley's Subsidiaries, have been duly authorized and validly issued, are fully paid, nonassessable and free of preemptive rights, and are free and clear of all liens, encumbrances, charges, restrictions or rights of third parties. All of the outstanding shares of capital stock of Valley's Subsidiaries are owned by Valley free and clear of any liens, encumbrances, charges, restrictions or rights of third parties. Except for the options and stock appreciation rights referred to above under the Valley Option Plan and the Warrants, and 274,985 shares of Valley Common Stock to be issued in connection with the Agreement and Plan of Merger, dated as of November 9, 1994, among Valley, VNB, American Union Bank (the "American Union Agreement"), neither Valley nor any of Valley's Subsidiaries has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the transfer, purchase or issuance of any shares of capital stock of Valley or Valley's Subsidiaries or any securities representing the right to otherwise receive any shares of such capital stock or any securities convertible into or representing the right to purchase or subscribe for any such shares, and there are no agreements or understandings with respect to voting of any such shares. 4.3. AUTHORITY; NO VIOLATION. (a) Valley and VNB have full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby in accordance with the terms hereof. Valley has a sufficient number of authorized but unissued shares of Valley Common Stock to pay the consideration for the Merger set forth in Section 2.1 of this Agreement. 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 each of Valley and VNB. No other corporate proceedings on the part of Valley and VNB are necessary to consummate the transactions contemplated hereby (except for the approval by Valley of the Bank Merger Agreement). This Agreement has been duly and validly executed and delivered by Valley and VNB and constitutes a valid and binding obligation of Valley and VNB, enforceable against Valley and VNB in accordance with its terms. (b) Neither the execution or delivery of this Agreement nor the consummation by Valley and VNB of the transactions contemplated hereby in accordance with the terms hereof, will (i) violate any provision of the Certificate of Incorporation or Bylaws of Valley or the Articles of Association or Bylaws of VNB, (ii) assuming that the consents and approvals set forth below are duly obtained, violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Valley or VNB or any of their respective properties or assets, or (iii) violate, conflict with, result in a breach of any provision of, 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, accelerate the performance required by, or result in the creation of any lien, security interest, charge or other encumbrance upon any of the properties or assets of Valley or VNB 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 Valley or VNB is a party, or by which Valley or VNB or any of their properties or assets may be bound or affected, except, with respect to (ii) and (iii) above, such as in the aggregate will not have a material adverse effect on the business, operations, assets or financial condition of Valley and Valley's Subsidiaries on a consolidated basis, or the ability of Valley and VNB to consummate the transactions contemplated hereby. Except for consents and approvals of or filings or registrations with or notices to the OCC, the Commissioner, the FRB, the New Jersey Secretary of State, the SEC, or applicable state securities bureaus or commissions, no consents or approvals of or filings or registrations with or notices to any third party or any public body or authority are necessary on behalf of Valley or VNB in connection with (a) the execution and delivery by Valley or VNB of this Agreement, (b) the consummation by Valley of the Merger and the other transactions contemplated hereby and (c) the execution and delivery by VNB of the Bank Merger Agreement and the consummation by VNB of the Bank Merger and other transactions contemplated thereby. To Valley's knowledge, no fact or condition exists which Valley has reason to believe will prevent it or VNB from obtaining the aforementioned consents and approvals. 4.4. FINANCIAL STATEMENTS. (a) Valley has previously delivered to Lakeland copies of the consolidated statements of financial condition of Valley as of December 31, 1991, 1992 and 1993, the related consolidated statements of income, changes in stockholders' equity and of cash flows for the periods ended December 31 in each of the three fiscal years 1991 through 1993, in each case accompanied by the audit report of KPMG Peat Marwick LLP, independent public accountants with respect to Valley, and the unaudited consolidated statements of condition of Valley as of March 30, 1994, June 30, 1994 and September 30, 1994, and the related unaudited consolidated statements of income, changes in stockholders' equity and cash flows for the three months then ended as reported in Valley's Quarterly Reports on Form 10-Q, filed with the SEC under the 1934 Act (collectively, the "Valley Financial Statements"). The Valley Financial Statements (including the related notes), have been prepared in accordance with generally accepted accounting principles consistently applied during the periods involved, and fairly present the consolidated financial position of Valley as of the respective dates set forth therein, and the related consolidated statements of income, changes in stockholders' equity and of cash flows (including the related notes, where applicable) fairly present the results of the consolidated operations and changes in stockholders' equity and of cash flows of Valley for the respective fiscal periods set forth therein. (b) The books and records of Valley and its subsidiaries have been and are being maintained in material compliance with applicable legal and accounting requirements, and reflect only actual transactions. (c) Except as and to the extent reflected, disclosed or reserved against in the Valley Financial Statements (including the notes thereto), as of September 30, 1994 neither Valley nor any of its Subsidiaries had or has, as the case may be, any material obligation or liability, whether absolute, accrued, contingent or otherwise, material to the business, operations, assets or financial condition of Valley or any of its Subsidiaries. Since September 30, 1994, neither Valley nor any of its Subsidiaries have incurred any material liabilities, except in the ordinary course of business and consistent with prudent banking practice. 4.5. BROKERAGE FEES. Except for fees to be paid to MG Advisors, Inc., neither Valley nor VNB nor any of their respective directors or officers has employed any broker or finder or incurred any liability for any broker's or finder's fees or commissions in connection with any of the transactions contemplated by this Agreement. 4.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. There has not been any material adverse change in the business, operations, assets or financial condition of Valley and Valley's Subsidiaries on a consolidated basis since September 30, 1994 and to Valley's knowledge, no fact or condition exists which Valley believes will cause or is likely to cause such a material adverse change in the future. 4.7. VALLEY INFORMATION. The information relating to Valley and its subsidiaries, this Agreement and the transactions contemplated hereby in the Registration Statement and Proxy Statement/Prospectus (as defined in Section 5.6(a) hereof), as of the date of the mailing of the Proxy Statement/Prospectus, and up to and including the date of the meeting of stockholders of Lakeland to which such Proxy Statement/Prospectus relates, 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 under which they were made, not misleading. 4.8. CAPITAL ADEQUACY. At the Effective Time, after taking into effect the Merger and the transactions contemplated hereunder, Valley will have sufficient capital to satisfy all applicable regulatory capital requirements. 4.9. VALLEY COMMON STOCK. At the Effective Time, the Valley Common Stock to be issued pursuant to the terms of Section 2.1, when so issued, shall be duly authorized, validly issued, fully paid, and non-assessable, free of preemptive rights and free and clear of all liens, encumbrances or restrictions created by or through Valley, with no personal liability attaching to the ownership thereof. 4.10. LEGAL PROCEEDINGS. Except as disclosed in the Valley Disclosure Schedule, neither Valley nor its Subsidiaries is a party to any, and there are no pending or, to Valley's knowledge, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental investigations of any nature against Valley or any of its Subsidiaries which, if decided adversely to Valley, or any of its Subsidiaries, would have a material adverse effect on the business, operations, assets or financial condition of Valley and its Subsidiaries on a consolidated basis. Except as disclosed in the Valley Disclosure Schedule, neither Valley nor any of Valley's Subsidiaries is a party to any order, judgment or decree entered against Valley or any such Subsidiary in any lawsuit or proceeding which would have a material adverse effect on the business, operations, assets or financial condition of Valley and its Subsidiaries on a consolidated basis. 4.11. TAXES AND TAX RETURNS. To the knowledge of Valley, Valley and its Subsidiaries have duly filed (and until the Effective Time will so file) all Returns required to be filed by them in respect of any federal, state and local taxes (including withholding taxes, penalties or other payments required) and have duly paid (and until the Effective Time will so pay) all such taxes due and payable, other than taxes or other charges which are being contested in good faith. Valley and its Subsidiaries have established (and until the Effective Time will establish) on their books and records reserves for the payment of all federal, state and local taxes not yet due and payable, but incurred in respect of Valley and its Subsidiaries through such date, which reserves are, to the knowledge of Valley, adequate for such purposes. No deficiencies exist or have been asserted based upon the federal income tax returns of Valley and VNB. 4.12. EMPLOYEE BENEFIT PLANS. (a) Valley and its Subsidiaries maintain or contribute to certain "employee pension benefit plans" (the "Valley Pension Plans"), as such term is defined in Section 3 of ERISA, and "employee welfare benefit plans" (the "Valley Welfare Plans"), as such term is defined in Section 3 of ERISA. Since September 2, 1974, neither Valley nor its Subsidiaries have contributed to any "Multiemployer Plan", as such term is defined in Section 3(37) of ERISA. (b) To the knowledge of Valley, each of the Valley Pension Plans and each of the Valley Welfare Plans has been operated in compliance in all material respects with the provisions of ERISA, the Code, all regulations, rulings and announcements promulgated or issued thereunder, and all other applicable governmental laws and regulations. (c) To the knowledge of Valley, no "accumulated funding deficiency" within the meaning of Section 412 of the Code has been incurred with respect to any of the Valley Pension Plans. (d) Except with respect to customary health, life and disability benefits or as disclosed on the Valley Disclosure Schedule, there are no unfunded benefit obligations which are not accounted for by reserves shown on the financial statements of Valley and established under GAAP or otherwise noted on such financial statements. 4.13. REPORTS. (a) Each communication mailed by Valley to its stockholders since January 1, 1992, and each annual, quarterly or special report, proxy statement or communication, as of its date, complied in all material respects with all applicable statutes, rules and regulations enforced or promulgated by the applicable regulatory agency and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; provided that disclosures as of a later date shall be deemed to modify disclosures as of an earlier date. (b) Valley and VNB have, since January 1, 1992, duly filed with the OCC and the FRB in correct form in all material respects the monthly, quarterly and annual reports required to be filed under applicable laws and regulations, and Valley, upon written request from Lakeland, promptly will deliver or make available to Lakeland accurate and complete copies of such reports. The Valley Disclosure Schedule lists the dates of all examinations of Valley or VNB conducted by either the OCC, the FRB or the FDIC since January 1, 1992, and the dates of any responses thereto submitted by Valley or VNB. 4.14. COMPLIANCE WITH APPLICABLE LAW. Valley and its Subsidiaries hold all material licenses, franchises, permits and authorizations necessary for the lawful conduct of their respective businesses under and pursuant to each, and has complied with and is not in default in any respect under any, applicable law, statute, order, rule, regulation, policy and/or guideline of any federal, state or local governmental authority relating to Valley and its Subsidiaries (other than where such default or non-compliance will not result in a material adverse effect on the business, operations, assets or financial condition of Valley and its Subsidiaries on a consolidated basis) and Valley has not received notice of violations of, and does not know of any violations of, any of the above. Without limiting the foregoing, to its knowledge VNB has complied in all material respects with the CRA and Valley has no reason to believe that any person or group would object to the consummation of the Merger due to the CRA performance or rating of VNB. To the knowledge of Valley, except as listed on the Valley Disclosure Schedule, no person or group has adversely commented upon VNB's CRA performance. 4.15. PROPERTIES AND INSURANCE. (a) Valley and its Subsidiaries have good and, as to owned real property, marketable title to all material assets and properties, whether real or personal, tangible or intangible, reflected in Valley's consolidated balance sheet as of December 31, 1993, or owned and acquired subsequent thereto (except to the extent that such assets and properties have been disposed of for fair value in the ordinary course of business since December 31, 1993), subject to no encumbrances, liens, mortgages, security interests or pledges, except (i) those items that secure liabilities that are reflected in such balance sheet or the notes thereto or incurred in the ordinary course of business after the date of such balance sheet, (ii) statutory liens for amounts not yet delinquent or which are being contested in good faith, (iii) such encumbrances, liens, mortgages, security interests, pledges and title imperfections that are not in the aggregate material to the business, operations, assets, and financial condition of Valley and its subsidiaries taken as a whole and (iv) with respect to owned real property, title imperfections noted in title reports delivered to Lakeland prior to the date hereof. Valley and its Subsidiaries as lessees have the right under valid and subsisting leases to occupy, use, possess and control all property leased by them in all material respects as presently occupied, used, possessed and controlled by them. (b) The business operations and all insurable properties and assets of Valley and its Subsidiaries are insured for their benefit against all risks which, in the reasonable judgment of the management of Valley should be insured against, in each case under valid, binding and enforceable policies or bonds, with such deductibles and against such risks and losses as are in the opinion of the management of Valley adequate for the business engaged in by Valley and its Subsidiaries. As of the date hereof, neither Valley nor any of its Subsidiaries has received any notice of cancellation or notice of a material amendment of any such insurance policy or bond or is in default under such policy or bond, no coverage thereunder is being disputed and all material claims thereunder have been filed in a timely fashion. 4.16. MINUTE BOOKS. The minute books of Valley and its Subsidiaries contain records that are accurate in all material respects of all meetings and other corporate action held of their respective stockholders and Boards of Directors (including committees of their respective Boards of Directors). 4.17. ENVIRONMENTAL MATTERS. Except as disclosed in the Valley Disclosure Schedule, neither Valley nor any of its Subsidiaries has received any written notice, citation, claim, assessment, proposed assessment or demand for abatement alleging that Valley or any of its Subsidiaries (either directly or as a successor-in-interest in connection with the enforcement of remedies to realize the value of properties serving as collateral for outstanding loans) is responsible for the correction or clean-up of any condition material to the business, operations, assets or financial condition of Valley or its Subsidiaries. Except as disclosed in the Valley Disclosure Schedule, Valley has no knowledge that any toxic or hazardous substances or materials have been emitted, generated, disposed of or stored on any property owned or leased by Valley or any of its Subsidiaries in any manner that violates or, after the lapse of time may violate, any presently existing federal, state or local law or regulation governing or pertaining to such substances and materials, the violation of which would have a material adverse effect on the business, operations, assets or financial condition of Valley and its Subsidiaries on a consolidated basis. 4.18. RESERVES. As of the date hereof, the reserve for loan and lease losses in the Valley Financial Statements is, to Valley's knowledge, adequate based upon past loan loss experiences and potential losses in the current portfolio to cover all known or anticipated loan losses. 4.19. DISCLOSURES. Except for other acquisition transactions which Valley may not yet have publicly disclosed, there are no material facts concerning the business, operations, assets or financial condition of Valley which could have a material adverse effect on the business, operations or financial condition of Valley which have not been disclosed to Lakeland directly or indirectly by access to any filing by Valley under the 1934 Act. The representations and warranties contained in Article IV of this Agreement are accurate in all material respects. ARTICLE V COVENANTS OF THE PARTIES 5.1. CONDUCT OF THE BUSINESS OF LAKELAND. During the period from the date of this Agreement to the Effective Time, Lakeland shall, and shall cause each of its Subsidiaries to, conduct its respective business and engage in transactions permitted hereunder only in the ordinary course and consistent with prudent banking practice, except with the prior written consent of Valley, which consent will not be unreasonably withheld. Lakeland also shall use its best efforts to (i) preserve its business organization and that of each Lakeland Subsidiary intact, (ii) keep available to itself the present services of its employees and those of its Subsidiaries, provided that neither Lakeland nor any of its Subsidiaries shall be required to take any unreasonable or extraordinary act or any action which would conflict with any other term of this Agreement, and (iii) preserve for itself and Valley the goodwill of its customers and those of its Subsidiaries and others with whom business relationships exist. 5.2. NEGATIVE COVENANTS AND DIVIDEND COVENANTS. (a) Lakeland agrees that from the date hereof to the Effective Time, except as otherwise approved by Valley in writing or as permitted or required by this Agreement, it will not, nor will it permit any of its Subsidiaries to: (i) change any provision of its Certificate of Incorporation or Bylaws or any similar governing documents; (ii) except for the issuance of Lakeland Common Stock pursuant to the present terms of the outstanding Lakeland Options, change the number of shares of its authorized or issued common or preferred stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement of any character relating to the authorized or issued capital stock of Lakeland or any Lakeland Subsidiary or any securities convertible into shares of such stock, or split, combine or reclassify any shares of its capital stock, or redeem or otherwise acquire any shares of such capital stock, or declare, set aside or pay any dividend, or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than Lakeland's regular quarterly dividends of $.15 per share and one special dividend, to be declared after the Scheduled Closing Date has been set, in an amount such that between January 26, 1995 and the Closing Date, Lakeland shareholders will receive dividends equivalent to those they would have received as Valley shareholders during the same time period if the Merger had closed on January 26, 1995; (iii) grant any severance or termination pay (other than pursuant to policies of Lakeland in effect on the date hereof and disclosed to Valley in the Lakeland Disclosure Schedule or as agreed to by Valley in writing) to, or enter into or amend any employment agreement with, any of its directors, officers or employees, other than the severance payment to William H. McNear, Chairman of Lakeland's Board of Directors, in the amount of $150,000 in settlement of his Retainer Agreement with Lakeland upon the Effective Time (which payment shall be reduced in such manner and to such extent so that, when aggregated with all other payments to be made to such person by Lakeland, such payment shall not be deemed an "excess parachute payment" in accordance with Section 280G of the Code or be subject to the excise tax provided in Section 4999(a) of the Code); adopt any new employee benefit plan or arrangement of any type or amend any such existing benefit plan or arrangement; or award any increase in compensation or benefits to its directors, officers or employees except with respect to salary increases in the ordinary course of business and consistent with past practices and policies; (iv) sell or dispose of any substantial amount of assets or incur any significant liabilities other than in the ordinary course of business consistent with past practices and policies; (v) make any capital expenditures in excess of $100,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair; (vi) file any applications or make any contract with respect to branching or site location or relocation, other than branching initiatives already underway as disclosed to Valley on the Lakeland Disclosure Schedule. Any such initiative requiring a competitive bid to an independent third party or requiring a competitive bid to an instrumentality of a government or quasi-governmental body will be disclosed only on a direct confidential basis; (vii) agree to acquire in any manner whatsoever (other than to foreclose on collateral for a defaulted loan) any business or entity; (viii) make any material change in its accounting methods or practices, other than changes required in accordance with generally accepted accounting principles; (ix) take any action that would result in any of the representations and warranties contained in Article III of this Agreement not being true and correct in any material respect at the Effective Time; or (x) agree to do any of the foregoing. (b) Valley agrees that from the date hereof to the Effective Time, except as otherwise approved by Lakeland in writing or as permitted or required by this Agreement, it will not, nor will it permit any of it Subsidiaries to: (i) take any action that is intended or may reasonably be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect, or that may result in any condition, agreement or covenant set forth in this Agreement not being satisfied; (ii) take or cause to be taken any action which would disqualify the Merger as a tax free reorganization under Section 368 of the Code; (iii) consolidate with or merge with any other person or entity in which Valley is not the surviving entity, or convey, transfer or lease its properties and assets substantially as an entirety to any person or entity unless such person or entity shall expressly assume the obligations of Valley under this Agreement; or (iv) authorize or enter into any agreement or commitment to do any of the foregoing. 5.3. NO SOLICITATION. Lakeland and the Bank shall not, directly or indirectly, encourage or solicit or hold discussions or negotiations with, or provide any information to, any person, entity or group (other than Valley) concerning any merger or sale of shares of capital stock or sale of substantial assets or liabilities not in the ordinary course of business, or similar transactions involving Lakeland or the Bank (an "Acquisition Transaction"). Notwithstanding the foregoing, Lakeland may enter into discussions or negotiations or provide information in connection with an unsolicited possible Acquisition Transaction if the Board of Directors of Lakeland, after consulting with counsel, determines that such discussions or negotiations should be commenced in the exercise of its fiduciary responsibilities or such information should be furnished in the exercise of its fiduciary responsibilities. Lakeland will promptly communicate to Valley the terms of any proposal, whether written or oral, which it may receive in respect of any Acquisition Transaction and the fact that it is having discussions or negotiations with, or supplying information to, a third party in connection with a possible Acquisition Transaction. 5.4. CURRENT INFORMATION. During the period from the date of this Agreement to the Effective Time, Lakeland will cause one or more of its designated representatives to confer on a monthly or more frequent basis with representatives of Valley regarding Lakeland's business, operations, properties, assets and financial condition and matters relating to the completion of the transactions contemplated herein. Without limiting the foregoing, Lakeland will send to Valley a monthly list of each new loan or extension of credit, and each renewal of an existing loan or extension of credit, in excess of $500,000, made during such month, and provide Valley with a copy of the loan offering for any such loan, extension of credit, or renewal upon request. As soon as reasonably available, but in no event more than 45 days after the end of each fiscal quarter (other than the last fiscal quarter of each fiscal year) ending after the date of this Agreement, Lakeland will deliver to Valley the Bank's call reports filed with the Commissioner and FDIC and Lakeland's quarterly reports on Form 10-Q as filed with the SEC under the 1934 Act, and Valley will deliver to Lakeland Valley's quarterly reports on Form 10-Q, as filed with the SEC under the 1934 Act, and VNB's call reports filed with the OCC and the FDIC. As soon as reasonably available, but in no event more than 90 days after the end of each fiscal year, Lakeland will deliver to Valley and Valley will deliver to Lakeland their respective audited Annual Reports, in each case as filed on Form 10-K with the SEC under the 1934 Act. 5.5. ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY. (a) Lakeland and the Bank shall permit Valley and its representatives, and Valley and VNB shall permit Lakeland and its representatives, accompanied by an officer of the respective party, reasonable access to their respective properties, and shall disclose and make available to Valley and its representatives or Lakeland and its representatives as the case may be, all books, papers and records relating to their respective assets, stock ownership, properties, operations, obligations and liabilities, including, but not limited to, all books of account (including the general ledger), tax records, minute books of directors' and stockholders' meetings, organizational documents, bylaws, material contracts and agreements, filings with any regulatory authority, independent auditors' work papers (subject to the receipt by such auditors of a standard access representation letter), litigation files, plans affecting employees, and any other business activities or prospects in which Valley and its representatives or Lakeland and its representatives may have a reasonable interest. Neither party shall be required to provide access to or to disclose information where such access or disclosure would violate or prejudice the rights of any customer or would contravene any law, rule, regulation, order or judgment. The parties will use their best efforts to obtain waivers of any such restriction and in any event make appropriate substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence apply. Lakeland acknowledges that Valley may be involved in discussions concerning other potential acquisitions and Valley shall not be obligated to disclose such information to Lakeland except as such information is publicly disclosed by Valley. (b) All information furnished by the parties hereto previously in connection with transactions contemplated by this Agreement or pursuant hereto shall be used solely for the purpose of evaluating the Merger contemplated hereby and shall be treated as the sole property of the party delivering the information until consummation of the Merger contemplated hereby and, if such Merger shall not occur, each party and each party's advisors shall return to the other party all documents or other materials containing, reflecting or referring to such information, will not retain any copies of such information, shall use its best efforts to keep confidential all such information, and shall not directly or indirectly use such information for any competitive or other commercial purposes. In the event that the Merger contemplated hereby does not occur, all documents, notes and other writings prepared by a party hereto or its advisors based on information furnished by the other party shall be promptly destroyed. The obligation to keep such information confidential shall continue for five years from the date the proposed Merger is abandoned but shall not apply to (i) any information which (A) the party receiving the information can establish by convincing evidence was already in its possession prior to the disclosure thereof to it by the other party; (B) was then generally known to the public; (C) became known to the public through no fault of the party receiving such information; or (D) was disclosed to the party receiving such information by a third party not bound by an obligation of confidentiality; or (ii) disclosures pursuant to a legal requirement or in accordance with an order of a court of competent jurisdiction. 5.6. REGULATORY MATTERS. (a) For the purposes of holding the meeting of Lakeland shareholders referred to in Section 5.7 hereof and registering or otherwise qualifying under applicable federal and state securities laws Valley Common Stock to be issued to Record Holders and optionees in connection with the Merger, the parties hereto shall cooperate in the preparation and filing by Valley of a Registration Statement with the SEC which shall include an appropriate proxy statement and prospectus satisfying all applicable requirements of applicable state and federal laws, including the Securities Act of 1933, as amended (the "1933 Act"), the 1934 Act and applicable state securities laws and the rules and regulations thereunder. (Such proxy statement and prospectus in the form mailed by Lakeland to the Lakeland shareholders and optionees together with any and all amendments or supplements thereto, is herein referred to as the "Proxy Statement/Prospectus" and the various documents to be filed by Valley under the 1933 Act with the SEC to register for sale the Valley Common Stock to be issued to Record Holders and optionees, including the Proxy Statement/Prospectus, are referred to herein as the "Registration Statement"). (b) Valley shall furnish information concerning Valley as is necessary in order to cause the Proxy Statement/Prospectus, insofar as it relates to Valley, to comply with Section 5.6(a) hereof. Valley agrees promptly to advise Lakeland if at any time prior to the Lakeland shareholder meeting referred to in Section 5.7 hereof, any information provided by Valley in the Proxy Statement/Prospectus becomes incorrect or incomplete in any material respect and to provide Lakeland with the information needed to correct such inaccuracy or omission. Valley shall furnish Lakeland with such supplemental information as may be necessary in order to cause the Proxy Statement/Prospectus, insofar as it relates to Valley, to comply with Section 5.6(a) after the mailing thereof to Lakeland shareholders. (c) Lakeland shall furnish Valley with such information concerning Lakeland and the Bank as is necessary in order to cause the Proxy Statement/Prospectus, insofar as it relates to such corporations, to comply with Section 5.6(a) hereof. Lakeland agrees promptly to advise Valley if, at any time prior to the Lakeland shareholder's meeting referred to in Section 5.6(a) hereof, information provided by Lakeland in the Proxy Statement/Prospectus becomes incorrect or incomplete in any material respect and to provide Valley with the information needed to correct such inaccuracy or omission. Lakeland shall furnish Valley with such supplemental information as may be necessary in order to cause the Proxy Statement/Prospectus, insofar as it relates to Lakeland and the Bank, to comply with Section 5.6(a) after the mailing thereof to Lakeland shareholders. (d) Valley shall as promptly as practicable, at its sole expense, make such filings as are necessary in connection with the offering of the Valley Common Stock with applicable state securities agencies and shall use all reasonable efforts to qualify the offering of the Valley Common Stock under applicable state securities laws at the earliest practicable date. Lakeland shall promptly furnish Valley with such information regarding the Lakeland shareholders as Valley requires to enable it to determine what filings are required hereunder. Lakeland authorizes Valley to utilize in such filings the information concerning Lakeland and the Bank provided to Valley in connection with, or contained in, the Proxy Statement/ Prospectus. Valley shall furnish Lakeland with copies of all such filings and keep Lakeland advised of the status thereof. Valley and Lakeland shall as promptly as practicable file the Registration Statement containing the Proxy Statement/Prospectus with the SEC, and each of Valley and Lakeland shall promptly notify the other of all communications, oral or written, with the SEC concerning the Registration Statement and the Proxy Statement/Prospectus. (e) Valley shall cause the Valley Common Stock to be issued in connection with the Merger to be listed on the New York Stock Exchange. (f) The parties hereto will cooperate with each other and use their best efforts to prepare all necessary documentation, to effect all necessary filings and to obtain all necessary permits, consents, waivers, approvals and authorizations of all third parties and governmental bodies necessary to consummate the transactions contemplated by this Agreement as soon as possible, including, without limitation, those required by the OCC and the FRB. The parties shall each have the right to review in advance all information relating to the other, as the case may be, and any of their respective subsidiaries, which appears in any filing made with, or written material submitted to, any third party or governmental body in connection with the transactions contemplated by this Agreement. Valley and VNB shall cause at least a draft of their respective applications to the FRB and an actual application to the OCC to be filed within 45 days of the date hereof, so long as Lakeland and the Bank provide all information necessary to complete the application within 30 days of the date hereof. (g) Each of the parties will promptly furnish each other with copies of written communications received by them or any of their respective subsidiaries from, or delivered by any of the foregoing to, any governmental body in respect of the transactions contemplated hereby. 5.7. APPROVAL OF SHAREHOLDERS. Lakeland will (a) take all steps necessary duly to call, give notice of, convene and hold a meeting of the shareholders of Lakeland as soon as reasonably practicable for the purpose of securing the approval by such shareholders of this Agreement, (b) subject to the qualification set forth in Section 5.3 hereof, recommend to the shareholders of Lakeland the approval of this Agreement and the transactions contemplated hereby and use its best efforts to obtain, as promptly as practicable, such approvals, and (c) cooperate and consult with Valley with respect to each of the foregoing matters. In connection therewith, each director of Lakeland agrees (i) to vote in favor of the Merger, and (ii) take such action as is necessary or is reasonably required by Valley to consummate the Merger. 5.8. FURTHER ASSURANCES. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to satisfy the conditions to Closing and to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, using reasonable efforts to lift or rescind any injunction or restraining order or other order adversely affecting the ability of the parties to consummate the transactions contemplated by this Agreement and using its best efforts to prevent the breach of any representation, warranty, covenant or agreement of such party contained or referred to in this Agreement and to promptly remedy the same. Nothing in this section shall be construed to require any party to participate in any threatened or actual legal, administrative or other proceedings (other than proceedings, actions or investigations to which it is otherwise a party or subject or threatened to be made a party or subject) in connection with consummation of the transactions contemplated by this Agreement unless such party shall consent in advance and in writing to such participation and the other party agrees to reimburse and indemnify such party for and against any and all costs and damages related thereto. 5.9. PUBLIC ANNOUNCEMENTS. The parties hereto shall cooperate with each other in the development and distribution of all news releases and other public disclosures with respect to this Agreement or any of the transactions contemplated hereby, except as may be otherwise required by law or regulation or as to which the party releasing such information has used its best efforts to discuss with the other party in advance. 5.10. FAILURE TO FULFILL CONDITIONS. In the event that Valley or Lakeland determines that a material condition to its obligation to consummate the transactions contemplated hereby cannot be fulfilled on or prior to October 31, 1995 and that it will not waive that condition, it will promptly notify the other party. Except for any acquisition or merger discussions Valley may enter into with other parties, Lakeland and Valley will promptly inform the other of any facts applicable to Lakeland or Valley, respectively, or their respective directors or officers, that would be likely to prevent or materially delay approval of the Merger by any governmental authority or which would otherwise prevent or materially delay completion of the Merger. 5.11. DISCLOSURE SUPPLEMENTS. From time to time prior to the Effective Time, each party hereto will promptly supplement or amend (by written notice to the other) its respective Disclosure Schedules delivered pursuant hereto with respect to any matter hereafter arising which, if existing, occurring or known at the date of this Agreement, would have been required to be set forth or described in such Schedules or which is necessary to correct any information in such Schedules which has been rendered materially inaccurate thereby. For the purpose of determining satisfaction of the conditions set forth in Article VI, no supplement or amendment to such Schedules shall correct or cure any warranty which was untrue when made, but supplements or amendments may be used to disclose subsequent facts or events to maintain the truthfulness of any warranty. 5.12. TRANSACTION EXPENSES OF LAKELAND. Lakeland shall mutually agree with Valley about printing arrangements for the Proxy Statement/Prospectus before entering into any binding contract for such expenses. 5.13. CLOSING. The parties hereto shall cooperate and use reasonable efforts to try to cause the Effective Time to occur on July 1 or October 1, 1995. 5.14. INDEMNIFICATION. After the Effective Time, to the extent permitted by applicable law, and the Certificate of Incorporation or Articles of Association, Valley agrees that it will, or will cause VNB to, provide to the directors and officers of Lakeland and the Bank indemnification equivalent to that provided by the Certificate of Incorporation and Bylaws of each of Lakeland and the Bank with respect to acts or omissions occurring prior to the Effective Time, including without limitation, the authorization of this Agreement and the transactions contemplated hereby, for a period of six years from the Effective Time, or in the case of matters occurring prior to the Effective Time which have not been resolved prior to the sixth anniversary of the Effective Time, until such matters are finally resolved. To the extent permitted by applicable law, and the Certificate of Incorporation or Articles of Association, Valley or VNB (as applicable) shall advance expenses in connection with the foregoing indemnification. 5.15. NEW VALLEY DIRECTORS; OFFICERS. (a) DIRECTORS. As of the Effective Time, Valley shall cause its Board of Directors to take action to appoint at the Effective Time two directors of Lakeland to the Board of Directors of Valley. One of the Lakeland directors to be so elected shall be William H. McNear and the other director shall be selected by the nominating committee of the Board of Directors of Valley from two nominees submitted by the Board of Directors of Lakeland. In addition, John Grabovetz shall be designated as a Director Emeritus of Valley at the Effective Time. (b) OFFICERS. As of the Effective Time, Valley shall appoint Michael Halpin a First Senior Vice President of VNB and Valley shall assume in writing Mr. Halpin's employment contract, a copy of which is included in the Lakeland Disclosure Schedule. 5.16. EMPLOYMENT MATTERS. Valley intends to continue the employment of all officers and employees of the Bank, and to the extent practical, at the same location, with the same or equivalent salary and benefits. Valley intends to have all Lakeland employees participate in the benefits and opportunities available to all Valley employees. 5.17. POOLING AND TAX-FREE REORGANIZATION TREATMENT. Neither Valley nor Lakeland shall intentionally take, fail to take or cause to be taken or not be taken, any action within its control, whether before or after the Effective Time, which would disqualify the Merger as a "pooling of interests" for accounting purposes or as a "reorganization" within the meaning of Section 368(a) of the Code. 5.18 LAKELAND OPTION PLAN. From and after the Effective Time, each Lakeland Option which is converted to an option to purchase Valley Common Stock under Section 2.1(b)(i) shall be administered, operated and interpreted by a committee comprised of members of the Board of Directors of Valley appointed by the Board of Directors of Valley. Valley shall reserve for issuance the number of shares of Valley Common Stock necessary to satisfy Valley's obligations. Valley shall also register, if not previously registered pursuant to the 1933 Act, the shares authorized for issuance under the Lakeland Options so converted. 5.19. AFFILIATES. (a) Promptly, but in any event within 30 days, after the execution and delivery of this Agreement, (i) Lakeland shall deliver to Valley (x) a letter identifying all persons who, to the knowledge of Lakeland, may be deemed to be affiliates of Lakeland under Rule 145 of the 1933 Act, including without limitation all directors and executive officers of Lakeland and (y) a letter identifying all persons who, to the knowledge of Lakeland, may be deemed to be affiliates of Lakeland as that term (affiliate) is used for purposes of qualifying for pooling-of-interests accounting treatment; and (ii) Valley shall identify to Lakeland all persons who, to the knowledge of Valley, may be deemed affiliates of Valley as that term (affiliates) is used for purposes of qualifying for pooling-of-interests accounting treatment. (b) Lakeland shall cause each director of Lakeland to, and Lakeland shall use its best efforts to cause each executive officer of Lakeland and each other person who may be deemed an affiliate of Lakeland (under either Rule 415 of the 1933 Act or the accounting treatment rules) to, execute and deliver to Valley within 30 days after the execution and delivery of this Agreement, a letter substantially in the form of Exhibit 5.19 hereto agreeing to be bound by the restrictions of Rule 145, as set forth in Exhibit 5.19 and agreeing to be bound by the rules which permit the Merger to be treated as a pooling of interests for accounting purposes. In addition, Valley shall cause each director and executive officer of Valley to, and Valley shall use its best efforts to cause each other person who may be deemed an affiliate of Valley (as that term is used for purposes of qualifying for pooling of interests) to, execute and deliver to Valley within 30 days after the execution and delivery of this Agreement, a letter in which such persons agree to be bound by the rules which permit the Merger to be treated as a pooling of interests for accounting treatment. (c) Valley agrees to publish financial results covering at least 30 days of combined operations of Valley and Lakeland as soon as practicable after consummation of the Merger. 5.20. COMPLIANCE WITH THE INDUSTRIAL SITE RECOVERY ACT. Lakeland, at its sole cost and expense, shall use its best efforts to obtain prior to the Effective Time, with respect to each facility located in New Jersey owned or operated by Lakeland or any Lakeland Subsidiary (each, a "Facility"), either: (a) a Letter of Non-Applicability ("LNA") from the New Jersey Department of Environmental Protection ("NJDEP") stating that the Facility is not an "industrial establishment," as such term is defined under the Industrial Site Recovery Act ("ISRA"); (b) a Remediation Agreement issued by the NJDEP pursuant to ISRA authorizing the consummation of the transactions contemplated by this Agreement; (c) a Negative Declaration approval, Remedial Action Workplan approval, No Further Action letter or other document or documents issued by the NJDEP advising that the requirements of ISRA have been satisfied with respect to the Facility; or (d) an opinion addressed to Valley from New Jersey legal counsel reasonably acceptable to Valley to the effect that ISRA has been complied with, or is inapplicable, with respect to the Facility. In the event Lakeland obtains a Remediation Agreement, Lakeland will post or have posted an appropriate Remediation Funding Source or will have obtained the NJDEP's approval to self-guaranty any Remediation Funding Source required under any such Remediation Agreement. ARTICLE VI CLOSING CONDITIONS 6.1. CONDITIONS OF EACH PARTY'S OBLIGATIONS UNDER THIS AGREEMENT. The respective obligations of each party under this Agreement to consummate the Merger shall be subject to the satisfaction, or, where permissible under applicable law, waiver at or prior to the Effective Time of the following conditions: (a) APPROVAL OF LAKELAND SHAREHOLDERS; SEC REGISTRATION. This Agreement and the transactions contemplated hereby shall have been approved by the requisite vote of the shareholders of Lakeland. The Registration Statement shall have been declared effective by the SEC and shall not be subject to a stop order or any threatened stop order, and the issuance of the Valley Common Stock shall have been qualified in every state where such qualification is required under the applicable state securities laws. The Valley Common Stock to be issued in connection with the Merger, including Valley Common Stock to be issued for the Lakeland Options, shall have been approved for listing on the New York Stock Exchange. (b) REGULATORY FILINGS. All necessary regulatory or governmental approvals and consents (including without limitation any required approval of the OCC and any approval or waiver required by the FRB) required to consummate the transactions contemplated hereby shall have been obtained without any term or condition which would materially impair the value of Lakeland and the Bank, taken as a whole, to Valley or which would materially impair the value of Valley and VNB, taken as a whole, to Lakeland. All conditions required to be satisfied prior to the Effective Time by the terms of such approvals and consents shall have been satisfied; and all statutory waiting periods in respect thereof shall have expired. (c) SUITS AND PROCEEDINGS. No order, judgment or decree shall be outstanding against a party hereto or a third party that would have the effect of preventing completion of the Merger; no suit, action or other proceeding shall be pending or threatened by any governmental body in which it is sought to restrain or prohibit the Merger or the Bank Merger; and no suit, action or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit the Merger or the Bank Merger or obtain other substantial monetary or other relief against one or more parties hereto in connection with this Agreement and which Valley or Lakeland determines in good faith, based upon the advice of their respective counsel, makes it inadvisable to proceed with the Merger because any such suit, action or proceeding has a significant potential to be resolved in such a way as to deprive the party electing not to proceed of any of the material benefits to it of the Merger or the Bank Merger. (d) TAX FREE EXCHANGE. Valley and Lakeland shall have received an opinion, satisfactory to Valley and Lakeland, of Pitney, Hardin, Kipp & Szuch, counsel for Valley, to the effect that the transactions contemplated hereby will result in a reorganization (as defined in Section 368(a) of the Code), and accordingly no gain or loss will be recognized for federal income tax purposes to Valley, Lakeland, VNB or the Bank or to the shareholders of Lakeland who exchange their shares of Lakeland for Valley Common Stock (except to the extent that cash is received in lieu of fractional shares of Valley Common Stock). (e) POOLING OF INTERESTS. The Merger shall be qualified to be treated by Valley as a pooling-of-interests for accounting purposes and Valley shall have received a letter from KPMG Peat Marwick LLP (and a concurring or back-up letter from Stephen P. Radics, as necessary or appropriate to enable KPMG Peat Marwick to issue its letter) to the effect that the Merger will qualify for pooling-of-interests accounting treatment if closed and consummated in accordance with the Agreement. 6.2. CONDITIONS TO THE OBLIGATIONS OF VALLEY UNDER THIS AGREEMENT. The obligations of Valley under this Agreement shall be further subject to the satisfaction or waiver, at or prior to the Effective Time, of the following conditions: (a) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS OF LAKELAND AND BANK. The representations and warranties of Lakeland contained in this Agreement shall be true and correct in all material respects on the Closing Date as though made on and as of the Closing Date. Lakeland shall have performed in all material respects the agreements, covenants and obligations necessary to be performed by it prior to the Closing Date. With respect to any representation or warranty which as of the Closing Date has required a supplement or amendment to the Lakeland Disclosure Schedule to render such representation or warranty true and correct as of the Closing Date, the representation and warranty shall be deemed true and correct as of the Closing Date only if (i) the information contained in the supplement or amendment to the Disclosure Schedule related to events occurring following the execution of this Agreement and (ii) the facts disclosed in such supplement or amendment would not either alone, or together with any other supplements or amendments to the Lakeland Disclosure Schedule, materially adversely effect the representation as to which the supplement or amendment relates. (b) CONSENTS. Valley shall have received the written consents of any person whose consent to the transactions contemplated hereby is required under the applicable instrument. (c) OPINION OF COUNSEL. Valley shall have received an opinion of counsel to Lakeland, dated the date of the Closing, in form and substance reasonably satisfactory to Valley, covering the matters set forth on Schedule 6.2 hereto and any other matters reasonably requested by Valley. (d) BANK ACTION. The Bank shall have taken all necessary corporate action to effectuate the Bank Merger immediately following the Effective Time. (e) CERTIFICATES. Lakeland shall have furnished Valley with such certificates of its officers or other documents to evidence fulfillment of the conditions set forth in this Section 6.2 as Valley may reasonably request. (f) ENVIRONMENTAL LAW COMPLIANCE. Lakeland shall have obtained, with respect to each Facility, an LNA, a Remediation Agreement, a Negative Declaration approval, a Remedial Action Workplan approval (in which event Lakeland will post or have posted an appropriate Remediation Funding Source or will have obtained the NJDEP's approval to self-guaranty any Remediation Funding Source required under any such Remediation Agreement), a No Further Action letter or other document or documents issued by the NJDEP advising that the requirements of ISRA have been satisfied with respect to the Facility or an opinion of the type referred to in Section 5.20(d) hereof. 6.3. CONDITIONS TO THE OBLIGATIONS OF LAKELAND UNDER THIS AGREEMENT. The obligations of Lakeland under this Agreement shall be further subject to the satisfaction or waiver, at or prior to the Effective Time, of the following conditions: (a) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS OF VALLEY. The representations and warranties of Valley contained in this Agreement shall be true and correct in all material respects on the Closing Date as though made on and as of the Closing Date. Valley shall have performed in all material respects, the agreements, covenants and obligations to be performed by it prior to the Closing Date. With respect to any representation or warranty which as of the Closing Date has required a supplement or amendment to the Valley Disclosure Schedule to render such representation or warranty true and correct as of the Closing Date, the representation and warranty shall be deemed true and correct as of the Closing Date only if (i) the information contained in the supplement or amendment to the Disclosure Schedule related to events occurring following the execution of this Agreement and (ii) the facts disclosed in such supplement or amendment would not either alone, or together with any other supplements or amendments to the Valley Disclosure Schedule, materially adversely effect the representation as to which the supplement or amendment relates. (b) OPINION OF COUNSEL TO VALLEY. Lakeland shall have received an opinion of counsel to Valley, dated the date of the Closing, in form and substance reasonably satisfactory to Lakeland, covering the matters set forth on Schedule 6.3 hereto. (c) FAIRNESS OPINION. Lakeland shall have received an opinion from Hopper Soliday as of the date of this Agreement and the date the Proxy Statement/Prospectus is mailed to Lakeland's stockholders, to the effect that, in its opinion, the consideration to be paid to stockholders of Lakeland hereunder is fair to such stockholders from a financial point of view. (d) LAKELAND DIRECTORS AND OFFICERS. Valley shall have taken all action necessary to appoint two directors of Lakeland to the Board of Directors of Valley, shall have appointed Michael Halpin a First Senior Vice President of Valley and shall have assumed in writing the contract of Michael Halpin, all as provided in Section 5.15 and shall appoint John Grabovetz as Director Emeritus. (e) CERTIFICATES. Valley shall have furnished Lakeland with such certificates of its officers or others and such other documents to evidence fulfillment of the conditions set forth in this Section 6.3 as Lakeland may reasonably request. (f) VNB ACTION. VNB shall have taken all necessary corporate action to effectuate the Bank Merger immediately following the Effective Time. ARTICLE VII TERMINATION, AMENDMENT AND WAIVER 7.1. TERMINATION. This Agreement may be terminated prior to the Effective Time, whether before or after approval of this Agreement by the stockholders of Lakeland: (a) By mutual written consent of the parties hereto. (b) By Valley or Lakeland (i) if the Effective Time shall not have occurred on or prior to October 31, 1995 or (ii) if a vote of the stockholders of Lakeland is taken and such stockholders fail to approve this Agreement at the meeting (or any adjournment thereof) held for such purpose, unless in each case the failure of such occurrence shall be due to the failure of the party seeking to terminate this Agreement to perform or observe its agreement set forth herein to be performed or observed by such party (or the directors of Lakeland) at or before the Effective Time. (c) By Valley or Lakeland upon written notice to the other if any application for regulatory or governmental approval necessary to consummate the Merger and the other transactions contemplated hereby shall have been denied or withdrawn at the request or recommendation of the applicable regulatory agency or governmental authority or by Valley upon written notice to Lakeland if any such application is approved with conditions which materially impair the value of Lakeland and the Bank, taken as a whole, to Valley. (d) By Valley if (i) there shall have occurred a material adverse change in the business, operations, assets, or financial condition of Lakeland or the Bank, taken as a whole, from that disclosed by Lakeland on the date of this Agreement; or (ii) if the net operating income excluding security gains and losses (after tax but excluding expenses related to this Agreement) of Lakeland for any full fiscal quarter after December 31, 1994, is materially less than the net income of Lakeland for each of the last two fiscal quarters of calendar year 1994; or (iii) there was a material breach in any representation, warranty, covenant, agreement or obligation of Lakeland hereunder. (e) By Lakeland, if (i) there shall have occurred a material adverse change in the business, operations, assets or financial condition of Valley or VNB from that disclosed by Valley on the date of this Agreement; or (ii) if the net operating income excluding security gains and losses (after tax but excluding expenses related to this Agreement) of Valley for any full fiscal quarter after December 31, 1994, is materially less than the net income of Valley for each of the last two fiscal quarters of calendar year 1994; or (iii) there was a material breach in any representation, warranty, covenant, agreement or obligation of Valley hereunder. (f) By Valley or Lakeland if any condition to Closing specified under Article VI hereof applicable to such party cannot reasonably be met after giving the other party a reasonable opportunity to cure any such condition. (g) By Lakeland in the event that, as provided in Section 5.3 hereof, the fiduciary responsibilities of the Board of Directors of Lakeland established under applicable law require Lakeland to participate or authorize participation in any Acquisition Transaction. 7.2. EFFECT OF TERMINATION. In the event of the termination and abandonment of this Agreement by either Valley or Lakeland pursuant to Section 7.1, this Agreement shall forthwith become void and have no effect, without any liability on the part of any party or its officers, directors or stockholders. Nothing contained herein, however, shall relieve any party from any liability for any breach of this Agreement. 7.3. AMENDMENT. This Agreement may be amended by mutual action taken by the parties hereto at any time before or after adoption of this Agreement by the stockholders of Lakeland but, after any such adoption, no amendment shall be made which reduces or changes the amount or form of the consideration to be delivered to the shareholders of Lakeland without the approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of Valley and Lakeland. 7.4. EXTENSION; WAIVER. The parties may, at any time prior to the Effective Time of the Merger, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto; (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant thereto; or (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party against which the waiver is sought to be enforced. ARTICLE VIII MISCELLANEOUS 8.1. EXPENSES. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby (including legal, accounting and investment banking fees and expenses) shall be borne by the party incurring such costs and expenses, except that the cost of printing and mailing the Proxy Statement/Prospectus shall be borne equally by the parties hereto if the transaction is terminated. 8.2. NOTICES. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered personally or sent by telecopier with confirming copy sent the same day by registered or certified mail, postage prepaid, as follows: (a) If to Valley, to: Valley National Bancorp 1445 Valley Road Wayne, New Jersey 07474-0558 Attn.: Gerald H. Lipkin Chairman and Chief Executive Officer Telecopier No. (201) 305-0024 Copy to: Pitney, Hardin, Kipp & Szuch Delivery: 200 Campus Drive Florham Park, New Jersey 07932 Mail: P.O. Box 1945 Morristown, New Jersey 07962-1945 Attn.: Ronald H. Janis, Esq. Telecopier No. (201) 966-1550 (b) If to Lakeland, to: Lakeland First Financial Group, Inc. 250 Route 10 Succasunna, New Jersey 07876 Attn: Michael Halpin, President and Chief Executive Officer Telecopier No. (201) 584-2234 Copy to: Malizia, Spidi, Sloane and Fisch, P.C. 1301 K Street, N.W., Suite 700 East Washington, D.C. 20005 Attn: John J. Spidi, Esq. Telecopier No. (202) 434-4661 or such other addresses as shall be furnished in writing by any party, and any such notice or communications shall be deemed to have been given as of the date so delivered or telecopied and mailed. 8.3. PARTIES IN INTEREST. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing in this Agreement is intended to confer, expressly or by implication, upon any other person any rights or remedies under or by reason of this Agreement, except for the indemnitees covered by Section 5.14 hereof, the persons referred to in Section 5.15 and the persons signing letter agreements pursuant to Section 5.19 hereof who shall be entitled to the benefits of such Section 5.19. No assignment of this Agreement may be made except upon the written consent of the other parties hereto. 8.4. ENTIRE AGREEMENT. This Agreement, which includes the Disclosure Schedules hereto and the other documents, agreements and instruments executed and delivered pursuant to or in connection with this Agreement, contains the entire Agreement between the parties hereto with respect to the transactions contemplated by this Agreement and supersedes all prior negotiations, arrangements or understandings, written or oral, with respect thereto, including the Letter of Intent. If any provision of this Agreement is found invalid, it shall be considered deleted and shall not invalidate the remaining provisions. 8.5. COUNTERPARTS. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and each of which shall be deemed an original. 8.6. GOVERNING LAW. This Agreement shall be governed by the laws of the State of New Jersey, without giving effect to the principles of conflicts of laws thereof. 8.7. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. 8.8 SURVIVAL. All representations, warranties and, except to the extent specifically provided otherwise herein, agreements and covenants, other than those agreements and covenants set forth in Sections 5.14, 5.15 and 5.18 which shall survive the Merger, shall terminate as of the Effective Time. [Remainder of Page Intentionally Blank] IN WITNESS WHEREOF, Valley, VNB, the Bank and Lakeland have caused this Agreement to be executed by their duly authorized officers as of the day and year first above written. ATTEST: VALLEY NATIONAL BANCORP By: /s/ PETER SOUTHWAY By: /s/ GERALD H. LIPKIN ------------------------- ------------------------- Peter Southway, President Gerald H. Lipkin Chairman and Chief Executive Officer ATTEST: LAKELAND FIRST FINANCIAL GROUP, INC. By: /s/ WILLIAM H. McNEAR By: /s/ MICHAEL HALPIN ------------------------- ------------------------- William H. McNear, Michael Halpin, President Chairman and Chief Executive Officer ATTEST: VALLEY NATIONAL BANK By: /s/ PETER SOUTHWAY By: /s/ GERALD H. LIPKIN ------------------------- ------------------------- Peter Southway, President Gerald H. Lipkin Chairman and Chief Executive Officer ATTEST: LAKELAND SAVINGS BANK By: /s/ WILLIAM H. McNEAR By: /s/ MICHAEL HALPIN ------------------------- ------------------------- William H. McNear, Michael Halpin, President Chairman and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----