WARRANT CONVERSION AGENCY AGREEMENT
___________, 1998
FIRST COLONIAL SECURITIES GROUP INC.
00 Xxxx Xxxxxx Xxxxxxxxx Xxxx
Xxxxx 000
000 Xxxxx Xxxxx 00
Xxxxxxx, XX 00000
Dear Sirs:
Unity Bancorp, Inc., a New Jersey business corporation (the "Company") has
outstanding warrants (the "Warrants") each of which entitles the holder thereof
to purchase 1.5 shares of the Company's Common Stock, par value $______ per
share, (the "Common Stock") at an exercise price of $10.50 per Warrant for a
period of time, which expires at 5:00 P.M., Eastern Standard Time, on December
15, 1997, unless such period of time is extended by the Company (the "Warrant
Expiration Date"). The Company has listed the Warrants on the American Stock
Exchange and currently has an effective registration statement on Form S-3
registering the underlying shares of the Common Stock to be delivered upon the
exercise of such Warrants under Section 5 of the Securities Act of 1933, as
amended (the "Act"). The Common Stock is listed on the NASDAQ National Market.
The Company desires to enter into an agreement with First Colonial
Securities Group Inc. (the "Warrant Conversion Agent") by which it agrees to:
(1) contact holders of the Warrants to solicit the exercise of Warrants by such
holders or to recommend that the holders sell their Warrants in the open market,
and (2) subject to market conditions and other factors, purchase Warrants
available for sale on the open market prior to the Warrant Expiration Date,
exercise such Warrants into the Common Stock (the "Shares") and sell the Shares
through the Warrant Conversion Agent's retail distribution network and to a
lesser extent, through the institutional marketplace (the "Offering").
Furthermore, the Warrant Conversion Agent agrees to solicit interest in the
Common Stock of the Company after the Offering through their institutional and
retail sales network.
During the Offering, the price per share of the Shares to be sold by the
Warrant Conversion Agent will be at prevailing market prices, which will not
exceed the greater of the last sale or current asked price per share of the
Common Stock as reported in the NASDAQ National Market, adjusted for any
concession to dealers, which will not be increased more than once during any
trading day (the "Offer Price"). The Warrant Conversion Agent may also make
sales to securities traders at prices which represent concessions from the Offer
Price. The amount of such concessions is to be determined from time to time by
the Warrant Conversion Agent. Any Shares so offered are offered subject to prior
sale when, as and if received by the Warrant Conversion Agent and subject to
their right to reject orders in whole or in part.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
agree, intending to be legally bound hereby, as follows:
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The Company
represents, warrants to, and agrees with the Warrant Conversion Agent that:
(a) A registration statement on Form S-3, relating to the sale of the
Shares acquired by the Warrant Conversion Agent as contemplated hereby has
been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and has been filed with the
Commission. Copies of such registration statement have been delivered by
the Company to the Warrant Conversion Agent. As used in this Agreement,
unless the context otherwise requires, "Registration Statement" means that
registration statement (together with all documents incorporated therein by
reference) at the time when it becomes effective under the Act; and
"Prospectus" means the prospectus (together with all documents incorporated
therein by reference) included in the Registration Statement with any
changes contained in any prospectus filed with the Commission by the
Company with the consent of the Warrant Conversion Agent pursuant to Rule
424(b) of the Rules and Regulations.
(b) The Registration Statement, any post-effective amendment thereof,
and the Prospectus, as amended or supplemented, including any document
filed by the Company hereafter pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), prior to the termination of the Offering of any the Shares acquired
by the Warrant Conversion Agent hereunder ("Incorporated Document"), will
contain all statements that are required by the Act and the Rules and
Regulations; and the Registration Statement, any post-effective amendment
thereof and the Prospectus as amended or supplemented (including any
Incorporated Documents) will comply in all material respects with the
requirements of the Act and the Rules and Regulations and will 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
therein not misleading; provided that the Company makes no representation
or warranty as to information contained in or omitted from the Registration
Statement or the Prospectus, or any amendments thereof or supplements
thereto, in reliance upon and in conformity with, written information
furnished to the Company by the Warrant Conversion Agent specifically for
inclusion therein.
(c) The authorized and outstanding capital stock of the Company as of
June 30, 1998, is as set forth in the Company's Form 10-QSB for the period
ended June 30, 1998. All of the outstanding shares of capital stock have
been duly authorized, validly issued, fully paid and nonassessable and are
duly listed on the NASDAQ National Market. All of the Warrants are, and the
Shares issuable upon exercise of the Warrants will, when issued, be validly
authorized, issued and outstanding, fully paid and non-assessable with no
personal liability attaching to the ownership thereof, and the Shares will
be listed on the NASDAQ National Market. The capital stock of the Company,
including the Shares, conforms to the description thereof contained or
incorporated by reference in the Prospectus. Except as contemplated by this
Agreement or as disclosed in or contemplated by the Prospectus or any
document incorporated by reference in the Registration Statement, there are
no preemptive or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, the Common Stock created by the
Company or any subsidiary of the Company other than pursuant to the
Company's certificate of incorporation,
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charter, bylaws or other governing documents, and neither the filing of the
Registration Statement nor the offering or sale of the Shares, as
contemplated by this Agreement, gives rise to any rights, other than those
which have been waived or satisfied, for or relating to the registration of
any shares of capital stock or other securities of the Company. Except as
contemplated by this Agreement or as disclosed in or contemplated by the
Prospectus or incorporated by reference in the Registration Statement,
neither the Company nor any subsidiary of the Company has outstanding any
option, warrant, convertible security, or other right permitting or
requiring it to issue, or convert any obligation into, or exchange any
obligation for, shares of capital stock, nor has the Company or any such
subsidiary agreed to issue or sell any shares of capital stock or any such
option, warrant, convertible security or other right.
(d) On and after the date hereof and prior to the Warrant Expiration
Date, there will be no change in the outstanding capital stock of the
Company and the Company will not issue or sell or enter into any agreement
(other than this Agreement), arrangement or understanding of any kind, or
take any action, for the issuance or sale of any capital stock of the
Company or warrants or options for the purchase of capital stock of the
Company or securities convertible into capital stock of the Company without
the prior approval of the Warrant Conversion Agent, except for (i) the
issuance of the Shares upon the exercise of the Warrants and (ii) the
issuance of Common Stock or options pursuant to any existing employee stock
option, stock purchase or restricted stock plans.
(e) As of the close of business on ___________, 1998, there were
_______ outstanding Warrants.
(f) Each Warrant is exercisable, until the close of business on the
Warrant Expiration Date, into 1.5 shares of the Company's Common Stock by
surrender of Warrant Certificates for exercise to FCTC Transfer Services,
LLP, of Iselin, New Jersey (the "Warrant and Transfer Agent"), prior to the
Warrant Expiration Date. The holder of each Warrant may purchase 1.5 fully
paid and nonassessable shares of the Common Stock for $10.50 each by
surrender of Warrant Certificates together with a check made payable to
"Unity Bancorp, Inc." for the exercise price to the Warrant and Transfer
Agent prior to the Warrant Expiration Date.
(g) Neither the Commission nor the Blue Sky or securities authority of
any jurisdiction has issued an order suspending the effectiveness of the
Registration Statement, preventing or suspending the use of the Prospectus,
the Registration Statement or any amendment thereof or supplement thereto,
refusing to permit the effectiveness of the Registration Statement, or
suspending the registration or qualification of the Shares; and none of
such authorities has instituted or threatened to institute any proceedings
with respect to such an order.
(h) Xxxxxx Xxxxxxxx, LLP, whose report appears in certain documents
incorporated by reference in the Registration Statement and the Prospectus,
are independent public or certified accountants with regard to the Company
as required by the Act and the Rules and Regulations.
(i) Except as described in or contemplated by the Registration
Statement and the Prospectus, there has not been any material adverse
change in or adverse development which materially adversely affects the
business, properties, condition (financial or other) or results of
operations of the Company and its subsidiaries taken as a whole from the
dates as of which
2
information is given in the Registration Statement and the Prospectus.
(j) Neither the Company nor any of its subsidiaries is in violation of
its certificate of incorporation, charter, bylaws or other governing
documents, or applicable laws and regulations, or in default under any
agreement, indenture or instrument, the effect of which violation or
default would be material to the Company and its subsidiaries taken as a
whole.
(k) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and the issuance and
delivery of the Shares upon the exercise of the Warrants, will not (i)
conflict with or result in a breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) or require, except for such consents as
have been obtained and are currently in effect, consent under or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to
the terms of any agreement or other instrument to which the Company or any
of its subsidiaries is a party or by which any of such companies or their
respective properties or assets may be bound or violate or conflict with
any judgment, decree, order, statute, rule or regulation of any court or
any public, government or regulatory agency or body which has jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties or assets, which conflicts, breaches, defaults, violations or
liens would, in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole, or (ii) violate or conflict
with any provision of the certificate of incorporation, charter, bylaws, or
other governing documents of the Company or any of its subsidiaries. No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties or
assets is required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby, including the exercise of the Warrants, and the
issuance, sale and delivery of the Shares pursuant to this Agreement,
except the registration under the Act of the Shares, and the consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities or Blue Sky
laws in connection with the acquisition and distribution of the Shares by
the Warrant Conversion Agent.
(l) The Company and each of its subsidiaries have been duly
incorporated, are validly existing and in good standing under the laws of
the jurisdiction of its respective incorporation; is duly qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction in the United States in which its ownership or lease of
property or the conduct of its businesses requires such qualification
(except where the failure to so qualify would not have a material adverse
effect upon the Company and its subsidiaries taken as a whole); and has all
corporate power and authority necessary to own or hold its properties and
to conduct the businesses in which it is engaged.
(m) The financial statements and schedules, including the related
notes, of the Company and its subsidiaries, incorporated by reference in
the Registration Statement or any Prospectus present fairly, and the
financial statements included in any Incorporated Document will present
fairly, the financial condition and results of operations of the entities
purported to be shown
3
thereby at the dates and for the periods indicated, and have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as otherwise noted
therein.
(n) There is no litigation or governmental proceeding pending or, to
the knowledge of the Company, threatened against the Company or any of its
subsidiaries, which might, if adversely determined, materially adversely
affect the purchase and sale of the Shares or which might result in any
material adverse change in the financial condition, results of operations
or business of the Company and its subsidiaries taken as a whole or which
is required to be disclosed in the Registration Statement or the Prospectus
and which is not so disclosed.
(o) There are no contracts or other documents that are required to be
filed as exhibits to the Registration Statement by the Act or by the Rules
and Regulations or which were required to be filed as exhibits to any
document incorporated by reference in the Registration Statement which have
not been so filed.
(p) The documents incorporated by reference in the Registration
Statement and the Prospectus have been, and each Incorporated Document will
be, prepared by the Company in conformity in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder
and such documents have been, or in the case of an Incorporated Document
will be, timely filed as required thereby. Accurate copies of each of the
documents incorporated by reference in the Registration Statement and the
Prospectus have been delivered by the Company to the Warrant Conversion
Agent. The Prospectus (including the documents incorporated therein by
reference) contains all material information concerning the Company and its
business, does not contain an untrue statement of a material fact and does
not omit any information necessary to make the statements therein, in the
context made, not misleading.
(q) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, prior to the
termination of the Offering contemplated by this Agreement, any action
designed to cause or result in, or which has constituted or which would
constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the Shares.
(r) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company has not paid
or declared any dividends or other distributions with respect to its
capital stock (other than regular quarterly cash dividends); and (ii) there
has not been any change in the capital stock (other than (A) the sale of
Common Stock pursuant to this Agreement, (B) the issuance of shares of
Common Stock upon exercise of Warrants disclosed in the Registration
Statement as being outstanding, and (C) the issuance of shares of Common
Stock upon the exercise of outstanding stock options issued pursuant to the
Company's employee and director benefit plans.)
(s) This Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the rights of
creditors generally
4
and by equitable principles and except as obligations of the Company under
the indemnification provisions hereof may be limited under federal or state
securities laws.
(t) The Company and its subsidiaries have all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses
and permits of and from all public, regulatory or governmental agencies and
bodies, material to the ownership of their respective properties and
conduct of their respective businesses as now being conducted and as
described in the Registration Statement and the Prospectus, except for such
authorizations, registrations, qualifications, licenses and permits, the
absence of which, singly or in the aggregate, would not have a material
adverse effect upon the Company, its financial condition or results of
operation, and no such consent, approval, authorization, order,
registration qualification, license or permit contains a materially
burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus. The conduct of the business of the Company
and each of its subsidiaries is in compliance in all material respects with
all applicable federal, state, local and foreign laws and regulations,
except where failure to be so in compliance would not materially adversely
affect the condition, business or results of operation of the Company and
its subsidiaries taken as a whole.
(u) The Company and its subsidiaries have filed all federal, state and
foreign income and franchise tax returns legally required to be filed by
the Company and such subsidiaries and have paid all taxes as shown as due
thereon except for taxes being contested in good faith, and the Company has
no knowledge of any material tax deficiency which has been asserted against
the Company or any subsidiary which could materially and adversely affect
the financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
2. PURCHASE, SALE AND DELIVERY. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, the Company and the Warrant Conversion Agent agree as follows:
(a) It is understood that the Warrant Conversion Agent intends to sell
the Shares at the Offer Price. Nothing contained herein shall limit the
right of the Warrant Conversion Agent, in its discretion, to determine the
price or prices at which, or the time or times when, any such Shares shall
be sold, whether or not prior to the Warrant Expiration Date and whether or
not for long or short accounts.
(b) From the date hereof until 5:00 P.M., Eastern Standard Time, on
the Warrant Expiration Date, the Warrant Conversion Agent intends to
purchase Warrants in the open market or otherwise, in such amounts and at
times and prices as it may deem advisable. The Warrant Conversion Agent
currently intends to exercise the Warrants purchased by it; however, the
Warrant Conversion Agent shall have the right, at its sole discretion, to
sell any Warrants prior to exercise. The Shares may be sold by the Warrant
Conversion Agent at prices prevailing from time to time in the open market.
The Company shall pay to the Warrant Conversion Agent on the Settlement
Date (as hereinafter defined), an amount equal to 3.25% of the aggregate
exercise price paid to the Company with respect to Warrants exercised from
October 14, 1998 through the Warrant Expiration Date, whether exercised by
the Warrant Conversion Agent or by other holders of Warrants (the
"Conversion Fee"), up to a maximum Conversion Fee of $150,000.
5
3. CERTAIN FEES, EXPENSES AND PAYMENTS. As compensation to the Warrant
Conversion Agent for its commitment under this Agreement, the Company will pay
to the Warrant Conversion Agent on the Settlement Date, in addition to the
Conversion Fee, a non-accountable expense allowance in connection therewith of
$35,000. Such amount shall be paid by certified or official bank check or checks
payable in New York Clearing House funds, notwithstanding the termination of
this Agreement by any party hereto.
4. SETTLEMENT DATE. No later than the third business day after; (a) this
Agreement has been terminated by one or more of the parties hereto; (b) all
Warrants have been converted into shares of Common Stock; or (c) the Warrant
Expiration Date, whichever event occurs first, or such other date as shall be
mutually agreed by the parties (the "Settlement Date"), the parties shall
exchange all documents and instruments required by the terms of this Agreement
at the offices of the Warrant Conversion Agent, or such other location as may be
mutually agreed upon by the parties, for the payment by the Company of all fees
and expenses to the Warrant Conversion Agent. The Company shall pay such fees
and expenses to the Warrant Conversion Agent in accordance with Paragraphs 2(b)
and 3 hereof.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees:
(a) To furnish promptly to the Warrant Conversion Agent and to counsel
for the Warrant Conversion Agent an executed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith.
(b) To deliver promptly to the Warrant Conversion Agent such number of
conformed copies of the Registration Statement as originally filed and each
amendment thereto and such number of the Prospectus and each amended or
supplemented Prospectus, and any documents incorporated by reference in any
of the foregoing, as the Warrant Conversion Agent may reasonably request.
(c) To file with the Commission any amendment of the Registration
Statement or any supplement to the Prospectus as the Warrant Conversion
Agent may request for the purpose of describing the Warrant Conversion
Agent's plan of distribution for the Shares acquired by it hereunder or
that may, in the judgment of the Company or the Warrant Conversion Agent,
be required by the Act or requested by the Commission (including the staff
thereof); and to file in a timely manner with the Commission any document
required to be filed with the Commission pursuant to Sections 13, 14 or
15(d) of the Exchange Act and incorporated by reference in the Registration
Statement or the Prospectus.
(d) Prior to filing with the Commission any amendment of the
Registration Statement or supplement to the Prospectus, or to filing any
Prospectus pursuant to Rule 424 of the Rules and Regulations, or to filing
any document incorporated by reference in any of the foregoing, to furnish
copies thereof to the Warrant Conversion Agent and counsel for the Warrant
Conversion Agent and to obtain the consent of the Warrant Conversion Agent
to the filing.
(e) To advise the Warrant Conversion Agent promptly (i) when the
Registration Statement and any post-effective amendment thereto becomes
effective; (ii) of any request or proposed request by the Commission for an
amendment to the Registration Statement, a supplement to the
6
Prospectus or any additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or, to the Company's knowledge,
threat of any proceeding for that purpose; (iv) of receipt by the Company
of any notification with respect to the suspension of the qualification of
the Shares issuable upon the exercise of the Warrants or of the Shares for
sale in any jurisdiction or the initiation or, to the Company's knowledge,
threat of any proceeding for that purpose; and (v) of the happening of any
event which makes untrue any statement of a material fact made in the
Registration Statement or the Prospectus, or which requires the making of a
change in the Registration Statement or the Prospectus in order to make any
material statement therein not misleading.
(f) If the Company is aware that the Commission is contemplating the
issuance of any stop order suspending the effectiveness of the Registration
Statement, to use every reasonable effort to prevent the issuance of such
stop order, and if the Commission shall issue a stop order suspending the
effectiveness of the Registration Statement, to make every reasonable
effort to obtain the lifting of that order at the earliest possible time.
(g) As soon as practicable after the effective date of the
Registration Statement, to make generally available to its security holders
and to deliver to the Warrant Conversion Agent an earnings statement,
conforming with the requirements of Section 11(a) of the Act, covering a
period of at least twelve consecutive months beginning after the effective
date of the Registration Statement, which the Company will satisfy by
complying with Rule 158 under the Act and by making timely filings under
the Exchange Act.
(h) For a period of five years from the effective date of the
Registration Statement, to furnish to the Warrant Conversion Agent copies
of all public reports and all information, documents, reports and financial
statements furnished by the Company to stockholders or the Commission
pursuant to the Exchange Act or any rule or regulation of the commission
thereunder.
(i) To endeavor to qualify the Shares issuable upon the exercise of
the Warrants and the Shares for offer and sale under the securities laws of
such jurisdictions in the United States as the Warrant Conversion Agent may
reasonably request.
(j) To mail or cause to be mailed not later than 5:00 P.M., Eastern
Daylight Time, on the first business day after the Effective Date of the
Registration Statement a notice of the Warrant Expiration Date of all the
outstanding Warrants (the "Notice of Expiration Date") by first class mail
to the registered holders of such Warrants, together with a copy of the
Prospectus, and any other document requested to be delivered and mailed
therewith by the Warrant Conversion Agent.
(k) To pay (i) the costs incident to the preparation, printing and
filing under the Act of the Registration Statement and any amendments and
exhibits thereto, the Prospectus and any amendments or supplements to the
Prospectus and the several documents required to be furnished to the
Warrant Conversion Agent pursuant to this Agreement; (ii) the costs
incident to the preparation, printing, filing and distribution of the
Notice of Expiration Date and such other documents as may be distributed in
connection with the transactions contemplated by this Agreement, to the
Warrant Conversion Agent and the holders of the Warrants; (iii) the fees
and expenses (including fees and disbursements of counsel to the Warrant
Conversion Agent in
7
connection therewith) of qualifying the Common Stock issuable upon exercise
of the Warrants and the Shares under the securities laws of the several
jurisdictions and of preparing and printing "Blue Sky" memoranda, if
necessary; (iv) the fees and expenses of listing the Common Stock issuable
upon exercise of the Warrants and the Shares on the NASDAQ National Market;
(v) all costs incident to the authorization, issuance, sale and delivery of
the Shares and all transfer taxes which may be required to be paid by the
Warrant Conversion Agent in connection with any exercise of the Warrants,
and consummation of the transactions contemplated by this Agreement,
including any transfer taxes payable on the sale of the Shares by the
Warrant Conversion Agent; and (vi) all other costs and expenses incident to
the performance of the obligations of the Company under this Agreement.
(l) To direct the Warrant Agent to advise the Warrant Conversion Agent
prior to the close of business on each business day through the Warrant
Expiration Date of the aggregate number of Warrants and the exercise on the
preceding business day and on a cumulative basis and otherwise to cooperate
with the Warrant Conversion Agent to facilitate the exercise of the
Warrants which shall be delivered to the Warrant and Transfer Agent on or
prior to the Warrant Expiration Date.
(m) To take no action prior to 5:00 P.M., Eastern Daylight Time, on
the Warrant Expiration Date, the effect of which would be to require an
adjustment in the exercise price of the Warrants from the present
indication set forth above.
(n) Not to withdraw or apply for withdrawal of the Registration
Statement prior to such time as the Warrant Conversion Agent shall have
advised the Company that the offering and sale of the Shares by the Warrant
Conversion Agent contemplated by this Agreement shall have been completed.
(o) During the 180 days following the effective date of the
Registration Statement, except with the Warrant Conversion Agent's prior
written consent and except for the issuance of the Shares and the issuance
of shares of the Common Stock or options pursuant to any existing employee
stock option, restricted stock or stock purchase plans, the Company will
not offer for sale, sell or otherwise dispose of, or file a registration
statement under the Act covering, any shares of its Common Stock, or sell
or grant options, or warrants with respect to, or securities convertible
into, any shares of its Common Stock.
6. CONDITION OF WARRANT CONVERSION AGENT OBLIGATIONS. The obligations of
the Warrant Conversion Agent hereunder are subject to the accuracy in all
material respects of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M., Eastern Daylight Time, on _________, 1998, or at such later
date and time as shall be consented to in writing by the Warrant Conversion
Agent (the "Effective Date"); no stop order suspending such effectiveness,
nor any order directed to any document incorporated, or deemed to be
incorporated, by reference in the Registration Statement and the
Prospectus, shall have been issued, and prior to that time no stop order
proceeding shall have been initiated or threatened by the Commission and no
challenge by the Commission by appropriate proceedings shall have been
8
made to the accuracy or adequacy of any document incorporated, or deemed to
be incorporated, by reference in the Registration Statement and the
Prospectus; any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise
shall have been complied with; and the Company shall not have filed with
the Commission the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or any Incorporated Document
without the consent of the Warrant Conversion Agent.
(b) The Warrant Conversion Agent shall not have discovered and
disclosed to the Company, or been informed by the Company, that the
Registration Statement or the Prospectus (including the documents
incorporated therein by reference) or any amendment thereof or supplement
thereto contains an untrue statement of a fact which, in the opinion of
counsel for the Warrant Conversion Agent, may be material or omits to state
a fact which, in the opinion of such counsel, may be material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) Since the respective dates as of which information is given in the
Prospectus there has not been any material change in the capital stock of
the Company or any material adverse change in the indebtedness for money
borrowed of the Company or any material adverse change in, or any
development that materially adversely affects, the business, properties,
financial condition or results of operations of the Company.
(d) Jamieson, Moore, Xxxxxx & Xxxxxx, counsel to the Company, shall
have furnished to the Warrant Conversion Agent its opinion (addressed to
the Warrant Conversion Agent), dated as of the Effective Date, which
opinion shall be in the format provided for and in accordance with the
terms of the Legal Opinion Accord of the ABA Section of Business Law, to
the effect that:
(i) Each of the Company and each of its subsidiaries (A) has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation; (B)
is duly qualified to do business and is in good standing as a foreign
corporation in all jurisdictions in which its ownership of property or
the conduct of its business requires such qualification (except where
the failure to so qualify would not have a material adverse effect
upon the Company and its subsidiaries taken as a whole); and (C) has
all corporate power and authority necessary to own its properties and
conduct the business in which it is engaged as described in the
Registration Statement;
(ii) The Warrants have been duly authorized and validly issued
and are nonassessable, and free of preemptive rights arising under the
Company's certificate of incorporation and bylaws, by operation of
law, or under any document filed as an exhibit to the Registration
Statement or any Incorporated Document, with no personal liability
attaching to the ownership thereof, and are duly listed on the
American Stock Exchange. The shares of Common Stock issuable upon the
exercise of the Warrants will, when issued upon full payment therefor,
be validly authorized, issued and outstanding, fully paid and
non-assessable and free of preemptive rights arising under the
Company's certificate of incorporation and bylaws, by operation of
law, or under any document filed as an exhibit to the Registration
Statement or any Incorporated Document, with no personal liability
attaching to the ownership thereof, and will be listed on the NASDAQ
National Market;
9
(iii) The certificates evidencing the Shares to be sold hereunder
and the shares issued upon the exercise of the Warrants are in due and
proper form under New Jersey law. All corporate action required to be
taken for the authorization, issue, sale and delivery of the Shares
has been validly and sufficiently taken. The notices and procedures
used by the Company to effect the exercise of the Warrants comply with
the terms of the Warrant Certificate;
(iv) There are no preemptive or other rights to subscribe for or
to purchase, and no restrictions upon the voting or transfer of, the
Shares pursuant to the Company's corporate charter and bylaws or any
agreement or other instrument filed as an exhibit to the Registration
Statement or any Incorporated Document; and neither the filing of the
Registration Statement nor the offering or sale of the Shares gives
rise to any rights for or relating to the registration of any shares
of capital stock of the Company or any subsidiary of the Company
arising under the Company's certificate of incorporation and bylaws,
by operation of law, or under any document filed as an exhibit to the
Registration Statement or any Incorporated Document;
(v) The Common Stock conforms as to legal matters to the
statements concerning the Common Stock of the Company contained or
incorporated by reference in the Prospectus, and the authorized and
outstanding shares of capital stock of the Company are as set forth in
the Prospectus;
(vi) Such counsel has no reason to believe that either the
Registration Statement or the Prospectus (including any document
incorporated, or deemed to be incorporated by reference, in the
Prospectus) contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except that counsel need
express no opinion with respect to the financial statements, schedules
and the notes thereto and other financial data included in the
Registration Statement or the Prospectus;
(vii) To counsel's actual knowledge, there is no litigation or
any governmental proceeding pending or threatened against the Company
or any of its subsidiaries which would adversely affect the subject
matter of this Agreement or is required to be disclosed in the
Prospectus which is not disclosed and correctly summarized therein;
(viii) To counsel's actual knowledge, there are no contracts or
other documents which are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations, or
which were required to be filed as exhibits to any document
incorporated by reference in the Prospectus by the Exchange Act or the
rules or regulations thereunder, which have not been filed as exhibits
to the Registration Statement or to such document or incorporated
therein by reference as permitted by the Rules and Regulations or the
rules and regulations under the Exchange Act, as the case may be;
(ix) To counsel's actual knowledge, neither the Company nor any
of its subsidiaries is in violation of its corporate charter or
bylaws, or, in default under any agreement, indenture or instrument
filed as an exhibit to the Registration Statement or to any
Incorporated Document, the effect of which violation or default would
be material to the Company and its subsidiaries taken as a whole;
(x) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement
of the Company; the execution, delivery
10
and performance of this Agreement by the Company, will not conflict
with, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its
subsidiaries pursuant to the terms of, or constitute a default under,
any agreement, indenture or instrument filed as an exhibit to the
Registration Statement or any Incorporated Document, or result in a
violation of the corporate charter or bylaws of the Company or any of
its subsidiaries or any order, rule or regulation known to such
counsel of any court or governmental agency having jurisdiction over
the Company, any of its subsidiaries or their property; and no
consent, authorization or order of, or filing or registration with,
any court or governmental agency is required for the execution,
delivery and performance of this Agreement by the Company, except such
as may be required by the Act, the Exchange Act, or state securities
laws, or such as has been obtained by the Company;
(xi) To the best of such counsel's knowledge, since the end of
its last fiscal year, the Company has filed all documents and
amendments to previously filed documents required to be filed by it
pursuant to Sections 13, 14 or 15(d) of the Exchange Act;
(xii) The Registration Statement is effective under the Act, no
stop order suspending its effectiveness has been issued, and, to the
knowledge of such counsel, no proceeding for that purpose is pending
or threatened by the Commission;
(xiii) To the best of such counsel's knowledge, no order of the
Commission directed to any document incorporated or deemed to be
incorporated in the Prospectus has been issued and no challenge by the
Commission has been made to the accuracy or adequacy of any such
document;
(xiv) The Registration Statement and the Prospectus, when filed
with the Commission, complied as to form in all material respects with
the requirements of the Act and the Rules and Regulations and the
documents incorporated or deemed to be incorporated by reference in
the Prospectus, when filed with the Commission, complied as to form in
all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder, except, in both cases, as to
financial statements and financial and statistical data contained
therein, as to which counsel need not opine;
(xv) The exercisability of the Warrants shall expire at 5:00
P.M., Eastern Standard Time, on the Warrant Expiration Date.
In giving the opinions in subparagraph 6(d), counsel may rely as to matters of
law, other than the law of the United States and the State of New Jersey upon an
opinion or opinions of local counsel, reasonably acceptable to the Warrant
Conversion Agent both as to the identity of local counsel and the form and
substance of the opinion or opinions, who may be counsel for the Company, which
states that the Warrant Conversion Agent as entitled to rely thereon, provided
that any such opinion or opinions are delivered to the Warrant Conversion Agent
and that Jamieson, Moore, Xxxxxx & Xxxxxx shall state that they have no reason
to believe that such opinions are not correct.
(e) Xxxxxx Xxxxxxxx, LLP shall have delivered a letter addressed to
the Warrant Conversion Agent in form and substance satisfactory to the
Warrant Conversion Agent in all respects (including the non-material nature
of the changes or decreases, if any, referred to in
11
clause (iii) below) dated as of the Effective Date:
(i) Confirming that they are independent public accountants
within the meaning of the Act and the Rules and Regulations and
stating that the section of the Registration Statement under the
caption "Experts" is correct insofar as it relates to them;
(ii) Stating that, in their opinion, the consolidated financial
statements of the Company audited by them and incorporated in the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act and the Regulations;
(iii) Stating that, on the basis of specified procedures, which
included a reading of the latest available unaudited interim financial
statements of the Company (with an indication of the date of the
latest available unaudited interim financial statements), a reading of
the minutes of the meetings of the stockholders and the Board of
Directors of the Company and audit and compensation committees of such
Board, if any, and inquiries to certain officers and other employees
of the Company who are or were responsible for financial and
accounting matters and other specified procedures and inquiries,
nothing has come to their attention that would cause them to believe
that (A) the unaudited consolidated financial statements and related
schedules of the Company included in the Registration Statement, if
any (1) do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Rules and
Regulations, or (2) were not fairly presented in conformity with
generally accepted accounting principles on a basis substantially
consistent with that of the audited consolidated financial statements
and related schedules included in the Registration Statement; or (B)
at a specified date, not more than five business days prior to the
date of such letter, there was any change in the capital stock or
consolidated long-term debt of the Company or any decrease in
consolidated interest earning assets, total assets or stockholders'
equity as compared with the amounts shown in the December 31, 1996 and
March 31, 1997 balance sheets of the Company included in the
Registration Statement, other than as set forth in or contemplated by
the Registration Statement and Prospectus, or if there was any change
or decrease, setting forth the amount of such change or decrease; and
(iv) Stating that they have compared specific dollar amounts,
numbers of shares and other information (including any pro forma
information) pertaining to the Company set forth in the Registration
Statement and Prospectus that have been specified by the Warrant
Conversion Agent prior to the date of this Agreement, to the extent
that such amounts, numbers, percentages and information may be derived
from the general accounting or other records of the Company, with the
results obtained from the application of specified readings, inquiries
and other appropriate procedures (which procedures do not constitute
an audit in accordance with generally accepted auditing standards) set
forth in the letter, and found them to be in agreement.
(f) On the Effective Date, the Company shall have furnished to the
Warrant Conversion Agent a certificate addressed to the Warrant Conversion
Agent, dated the Effective Date and executed by any two of the following:
(i) the Chairman of the Board;
(ii) the President; or
12
(iii) any Executive Vice President or the Chief Financial Officer
of the Company stating that:
(A) The representations and warranties of the Company set
forth in Paragraph 1 are true and correct as of the Effective
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied on or prior to the Effective Date;
(B) The Commission has not issued any order preventing or
suspending the use of the Prospectus or any amendment thereof, no
stop order suspending the effectiveness of the Registration
Statement has been issued; and to the best of the knowledge of
the respective signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the Act;
(C) Each of the respective signers of the certificate has
carefully examined the Registration Statement and the Prospectus
and that, in his or her opinion and to the best of his or her
knowledge as of the Effective Date, the statements made in the
Registration Statement and the Prospectus are true and correct,
and neither the Registration Statement nor the Prospectus omits
to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading;
and
(D) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, transaction
nor event has occurred which should have been disclosed in an
amendment to the Registration Statement or in a supplement to or
amendment of any prospectus which has not been disclosed.
All opinions and other documents deliverable hereunder shall be deemed to
be in compliance with the provisions hereof only if they are in form and
substance reasonably satisfactory to counsel for the Warrant Conversion Agent.
All statements in any certificate, letter or other document delivered pursuant
hereto by or on behalf of the Company and executed by an officer of the Company
shall be deemed to constitute representations and warranties of the Company. The
Company will furnish the Warrant Conversion Agent with such conformed copies of
such opinions, certificates, letters and other documents as the Warrant
Conversion Agent shall reasonably request.
If any conditions specified in this Paragraph 6 shall not have been
fulfilled when and as required by this Agreement, this Agreement and all
obligations of the Warrant Conversion Agent hereunder may be canceled at, or at
any time prior to, the Effective Date, by the Warrant Conversion Agent. Any such
cancellation shall be without liability of the Warrant Conversion Agent to the
Company. Notice of such cancellation shall be given to the Company in writing,
or by telegraph or telephone and confirmed in writing.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Warrant Conversion
Agent and each person, if any, who controls the Warrant Conversion Agent within
the meaning of either the Act or the Exchange Act from and against any loss,
claim, damage or liability, joint or several, and any ction in respect thereof,
to which the Warrant Conversion Agent or any such controlling
13
a person may become subject, under the Act, the Exchange Act, or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, any Incorporated
Document, the Notice of Expiration Date or the Registration Statement or
Prospectus as amended or supplemented, any other information provided to holders
of Warrants or any other document filed with the Commission or any state
securities administrator, (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) the breach of any of the
representations and warranties herein by the Company, and promptly shall
reimburse the Warrant Conversion Agent and each such controlling person in
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action, provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or the Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Warrant Conversion Agent concerning the Warrant
Conversion Agent specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability that the Company may otherwise have to
the Warrant Conversion Agent or any of the controlling person of the Warrant
Conversion Agent.
(b) The Warrant Conversion Agent shall indemnify and hold harmless the
Company, each of its directors and officers who signed the Registration
Statement and any person who controls the Company within the meaning of either
the Act or the Exchange Act from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof to which the
Company or any such director, officer or controlling person may become subject,
under the Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Prospectus or the Registration Statement or Prospectus as amended or
supplemented, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company and concerning the Warrant Conversion Agent by or on behalf of the
Warrant Conversion Agent specifically for inclusion therein; and shall reimburse
the Company for any legal and other expenses reasonably incurred by the Company
or by any such director, officer or controlling person in investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action. The foregoing indemnity agreement is in addition to any liability
that the Warrant Conversion Agent may otherwise have to the Company or any of
its directors, officers or controlling persons.
(c) Promptly after receipt by an indemnified party under this Paragraph 7
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Paragraph 7, notify the indemnifying party in writing of the
claim or the commencement of that action, provided that the failure to notify
the indemnifying party shall relieve it from any liability under this Paragraph
7 as to the particular item
14
for which indemnification is being sought, but not from any liability that it
may have to an indemnified party otherwise than under this Paragraph 7. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein, and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Paragraph 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Warrant Conversion Agent shall have the right to employ counsel to represent
the Warrant Conversion Agent and its controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Warrant Conversion Agent against the Company under this Paragraph 7 if,
in the reasonable judgment of the Warrant Conversion Agent, either because there
may be legal defenses available to the indemnified parties which are different
from or additional to those available to the Company, there may exist a conflict
of interest which would make it inappropriate for the same counsel to represent
both the Company and the indemnified parties or for some other reason, it is
advisable for the Warrant Conversion Agent and its controlling persons to be
represented by separate counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the Company. No indemnifying party shall be
liable for any settlement effected without its consent of any claim or action.
(d) If the indemnification provided for in this Paragraph 7 shall for any
reason be unavailable to an indemnified party under Paragraph 7(a) or 7(b) in
respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Warrant Conversion Agent on the other from the Offering of the Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Warrant Conversion Agent on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Warrant Conversion Agent on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
Offering of the Shares (before deducting expenses) received by the Company bear
to the total compensation (after deducting therefrom losses, if any, incurred in
selling the Shares) received by the Warrant Conversion Agent with respect to the
Offering. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Warrant Conversion Agent, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Warrant
Conversion Agent
15
agree that it would not be just and equitable if contributions pursuant to this
Paragraph 7(d) were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Paragraph 7(d) shall be deemed to include,
for purposes of this Paragraph 7(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Paragraph 7(d),
the Warrant Conversion Agent shall not be required to contribute any amount in
excess of the amount by which the compensation (after deducting therefrom
losses, if any, incurred in the sale of the Shares) received by the Warrant
Conversion Agent pursuant to Paragraph 2(b) hereof exceeds the amount of any
damages that the Warrant Conversion Agent shall be required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent representation.
(e) The Warrant Conversion Agent confirms that the statements with respect
to the Offering of the Shares set forth on the cover page of, and under the
caption "Plan of Distribution of Warrant Conversion Agent" in the Prospectus are
correct and the Company and the Warrant Conversion Agent agree that such
statements constitute the only information furnished in writing to the Company
by or on behalf of the Warrant Conversion Agent for inclusion in the
Registration Statement or the Prospectus.
The foregoing contribution agreement shall in no way affect the
contribution liabilities of any person having liability under Section 11 of the
Act other than the Company, its directors and officers, and the Warrant
Conversion Agent and the persons controlling the Company or the Warrant
Conversion Agent.
Promptly after receipt by any party to this Agreement of notice of the
commencement of any action, suit or proceeding, such person will, if a claim for
contribution in respect thereof is to be made against another party (the
"contributing party"), notify the contributing party of the commencement thereof
within a reasonable time thereafter, but the omission so to notify the
contributing party will not relieve the contributing party from any liability it
may have to any party other than for contribution. Any notice given pursuant to
any other paragraph of this Section 7 shall be deemed to be like notice
hereunder. In case any such action, suit or proceeding is brought against any
party, and such person so notifies a contributing party of the commencement
thereof, the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified.
(f) The indemnity agreements contained in this Paragraph 7 and the
representations, warranties and agreements of the Company in Paragraphs 1 and 5
hereof shall survive the completion of the transactions contemplated hereby and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
indemnified party.
16
8. OPEN MARKET TRANSACTIONS.
(a) Commencing upon the Effective Date and until 5:00 P.M., Eastern
Standard Time, on the Warrant Expiration Date, the Warrant Conversion Agent
shall purchase Warrants in the open market in such amounts and at such prices as
the Warrant Conversion Agent may deem advisable.
(b) It is understood that prior to the Effective Date and after the Warrant
Expiration Date, the Warrant Conversion Agent may offer to the public shares of
Common Stock, including shares acquired through the purchase and the exercise of
the Warrants at prices set from time to time by the Warrant Conversion Agent.
Each such price when set will not exceed the greater of the last sale or current
asked price of the Common Stock as reported in the NASDAQ National Market plus
the amount of any concession to dealers, and an offering price on any calendar
day will not be increased more than once during such day.
9. SALES TO SECURITIES DEALERS. The Warrant Conversion Agent may (but shall
be under no obligation to) make sales of the Shares acquired through the
exercise of the Warrants to securities dealers at prices which represent
concessions from the prices at which such Shares are then being offered to the
public. The amount of such concessions is to be determined from time to time by
the Warrant Conversion Agent. Any Shares so offered are offered subject to prior
sale, when, as and if received by the Warrant Conversion Agent and subject to
its right to reject orders in whole or in part.
10. SOLICITING CONVERSIONS. The Warrant Conversion Agent shall be obligated
to assist the Company in soliciting the exercise of the Warrants into shares of
the Common Stock by the holders thereof.
11. NOTICES. Except as otherwise provided in this Agreement:
(a) whenever notice is required by the provisions of this Agreement to
be given to the Company, such notice shall be in writing or by facsimile or
telex addressed to the Company at 00 Xxx Xxxxxxx 00, Xxxxxxx, Xxx Xxxxxx,
00000, Attention: Chairman with a copy to Xxxxxx X. Xxxxxxxx, Jamieson,
Moore, Xxxxxx & Xxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
(b) whenever notice is required by the provisions of this Agreement to
be given to the Warrant Conversion Agent, such notice shall be in writing
or by facsimile or telex addressed to the Warrant Conversion Agent, First
Colonial Securities Group, Inc., 10 Lake Center Executive Park, 000 Xxxxx
Xxxxx 00, Xxxxx 000, Xxxxxxx, Xxx Xxxxxx 00000, Attention: Xxx Xxxxxxxxxxx,
with a copy to Xxxxxxx X. Burdumy, Klehr, Harrison, Harvey, Branzburg &
Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000.
12. EFFECTIVE DATE AND TERMINATION.
(a) The Company, by notice to the Warrant Conversion Agent, or the Warrant
Conversion Agent, by notice to the Company, may terminate this Agreement for the
reasons hereinafter provided in Subparagraphs 12(b) and (c), respectively;
however, the provisions of this Paragraph 12, Paragraphs 2(b), 3, 4, 5(k), 7 and
11 hereof shall at all times be effective and the giving of any notice shall not
affect any obligations of the Company or the Warrant Conversion Agent
thereunder.
(b) This Agreement may be terminated by the Company, by giving notice to
the Warrant
17
Conversion Agent, if (i) trading in the Common Stock or Warrants, as
the case may be, has been suspended by the NASDAQ Stock Market or the American
Stock Exchange, respectively; (ii) the Company has been placed under a
regulatory memorandum of understanding or other written directive by any state
or federal bank supervisory agency; (iii) the Warrant Conversion Agent has
filed, or been involuntarily placed, under the protection of the United States
bankruptcy laws; or (iv) a general banking moratorium shall have been declared
by federal or state authorities.
(c) This Agreement may be terminated by the Warrant Conversion Agent, by
giving notice to the Company, if (i) a general banking moratorium shall have
been declared by federal or state authorities; (ii) the United States is or
becomes engaged in hostilities that result in the declaration of a national
emergency on or after the date hereof; (iii) the Company or any subsidiary shall
have sustained a loss or damage by fire, flood, accident or other calamity which
is material to the property, business or condition (financial or other) of the
Company and the subsidiaries considered as a whole, the Company or any
subsidiary shall have become a party or subject to litigation material to the
Company and the subsidiary considered as a whole, or there shall have been,
since the respective dates as of which information is given in the Registration
Statement or the Prospectus, any material adverse change or development in the
general affairs, condition (financial or other), business, key personnel,
capitalization, properties, results of operations, net worth or business
prospect of the Company and the subsidiaries considered as a whole, whether or
not arising in the ordinary course of business, which loss, damage or change, in
the judgment of the Warrant Conversion Agent shall render it inadvisable to
proceed with the transactions contemplated herein, whether or not such loss
shall have been insured; or (iv) trading in securities generally on the NYSE or
the American Stock Exchange or the over-the-counter market shall have been
suspended or minimum prices shall have been established on such exchange or
market by the Commission or by such exchange.
(d) If notice shall have been given by the Company pursuant to subsection
(a) of this Paragraph 13 hereof terminating this Agreement, or if the Company
shall fail to tender the Shares for delivery to the Warrant Conversion Agent for
any reason permitted under this Agreement, the Company shall nevertheless pay
the Warrant Conversion Agent the fees and expenses as provided under Paragraphs
2(b) and 3 hereof. In any event, the Company shall pay its own expenses in
accordance with Paragraph 5(k).
(e) Any notice referred to in this Paragraph 12 may be given at the
addresses specified in Paragraph 12 hereof in writing or by telegraph or
telephone, and if by telegraph or telephone, shall be immediately confirmed in
writing.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to
the benefit of and be binding upon the Warrant Conversion Agent, the Company and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person
or persons, if any, who control the Warrant Conversion Agent within the meaning
of the Act, and (b) the indemnity agreement of the Warrant Conversion Agent
contained in Paragraph 7 hereof shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person who controls the Company within the
18
meaning of the Act. Nothing in this Agreement is intended or shall be construed
to give any person other than the persons mentioned in the preceding two
sentences any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
14. SURVIVAL OF INDEMNITIES, CONTRIBUTION, WARRANTIES AND REPRESENTATIONS.
The respective indemnity and contribution agreements of the Company and the
Warrant Conversion Agent contained in Section 7 hereof, the representations,
warranties and covenants of the Company contained herein and the representations
and warranties of the Warrant Conversion Agent contained herein shall remain
operative and in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
Warrant Conversion Agent or the Company or any of their respective directors or
officers, or any controlling person referred to in said Section 7, and shall
survive the payment for the Warrants and sale of the Shares.
15. CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) "BUSINESS DAY" means any day which the New York Stock Exchange is
open for trading;
(b) "SUBSIDIARY" has the meaning set forth in Rule 405 of the Rules
and Regulations; and
(c) any representation, warranty or opinion as to the accuracy and
completeness of any document included as an exhibit to the Registration
Statement shall be understood to refer to the authenticity and completeness
of the copy of such document included as such exhibit and not to the
contents of such document (and an opinion, certificate or other document
delivered pursuant to this Agreement may so state).
1. GOVERNING LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey. This Agreement
may be executed in one or more counterparts and, if executed in more than one
counterpart, the executed counterparts shall together constitute a single
instrument.
19
If the foregoing correctly sets forth the agreement between the Company and
the Warrant Conversion Agent, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
UNITY BANCORP, INC.
By: ______________________________
Xxxxxx X. Van Volkenburgh,
Chairman
Accepted:
FIRST COLONIAL SECURITIES GROUP, INC.
By: ______________________________
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