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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 18, 1999
UNITY BANCORP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-12431 22-3282551
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
64 OLD HIGHWAY 22, CLINTON, NEW JERSEY 08809
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (908) 730-7630
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Item 2. Acquisition or Disposition of Assets.
On February 18, 1999, the Registrant, through its First Community Bank
subsidiary acquired Certified Mortgage Associates Inc. ("CMA"), a Marlboro, New
Jersey based correspondent mortgage banker. The Registrant paid the shareholders
of CMA $2.8 million (the "Purchase Price"). The Purchase Price was paid in cash
and shares of the Registrant's common stock, with $1.7 million of the Purchase
Price paid in cash and $1.1 million paid in shares of the Registrant's common
stock, valued at the average of the bid ask price for the stock during the first
twenty trading days in the thirty trading day period prior to consummation of
the transaction. The Registrant issued 102,459 shares of its common stock. The
transaction will be accounted for as a purchase, and the Registrant will
recognize $3,000,000.00 in intangible assets, consisting primarily of the value
of the employment agreements of the executives retained from CMA, which it will
amortize over eight years.
In addition, the principals of CMA, including Barry Habib, entered into
employment agreements with the Registrant that call for an initial term of five
years with options to extend the term for an additional three years. A copy of
the Agreement and Plan of Merger, and the Amended Plan of Merger, are annexed
hereto as Exhibit 2(i) and 2(ii).
Item 7. Exhibits.
The following exhibits are filed with this Current Report on Form 8-K:
Exhibit No. Description
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2(i) Agreement and Plan of Merger dated as of December
11, 1998, between Registrant and Certified
Mortgage Associates, Inc.
2(ii) Amendment Agreement to Plan of Merger dated
February 18, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Unity
Bancorp, Inc. has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITY BANCORP, INC.
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(Registrant)
Dated: February 18, 1999 By: /s/ KEVIN KILLIAN
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Chief Financial Officer
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EXHIBIT INDEX
CURRENT REPORT ON FORM 8-K
Exhibit No. Description Page
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2(i) Agreement and Plan of Merger dated as of December 11, 1998,
between Registrant and Certified Mortgage Associates, Inc. 5-51
2(ii) Amendment Agreement to Plan of Merger dated February 18, 1999. 52-53
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EXHIBIT 2(i)
Agreement and Plan of Merger
dated as of December 11, 1998
among
Unity Bancorp, Inc.
and
Certified Mortgage Associates, Inc.
AGREEMENT AND PLAN OF MERGER
This Agreement is made and entered into as of this 11th day of December,
1998, by and among CERTIFIED MORTGAGE ASSOCIATES, INC. ("Company"), BARRY HABIB
("Habib"), NORMAN HUNTER ("Hunter") and CRAIG FRANKEL ("Frankel") (collectively,
"Stockholders"); UNITY BANCORP, INC., a Delaware corporation ("UBI") and FIRST
COMMUNITY BANK ("Bank").
PRELIMINARY RECITALS
Stockholders own all of the issued and outstanding shares of the Common
Stock (the "Stock") of the Company, and are the sole stockholders of the
Company. The Company operates a business (the "Business") consisting of
correspondent mortgage banking. Pursuant to this Agreement, the Bank will form a
new subsidiary ("Newco"), and merge the subsidiary with and into the Company,
with the Company being the surviving entity.
The Schedules (collectively, the "Disclosure Schedules") annexed hereto
have been furnished by the Company and the Stockholders at the Closing (as such
term is defined in Section 3.1 hereof) and such Schedules are hereby
incorporated herein as a part of this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties, and
mutual promises contained herein, the parties do hereby agree as follows:
1. THE MERGER
1.1. THE MERGER. Subject to the terms and conditions of this Agreement, at
the Closing Date (as hereafter defined in Section 3.1 hereof), Newco shall be
merged with an into the Company (the "Merger") in accordance with the provisions
of the New Jersey Business
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Corporation Act (the "BCA") and the Company shall be the surviving company (the
"Surviving Company").
1.2. EFFECT OF THE MERGER. At the Closing Date the separate existence of
Newco shall cease and the Surviving Company shall be considered the same
business and corporate entity as each of Newco and the Company and all of the
property, rights, powers and franchises of each Newco and the Company shall vest
in the Surviving Company and the Surviving Company shall be deemed to have
assumed all of the debts, liabilities, obligations and duties of Newco and the
Company 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 Company.
1.3. CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of CMA
as it exists immediately prior to the Closing Date shall not be amended by the
Merger, but shall continue as the Certificate of Incorporation of the Surviving
Company until otherwise amended as provided by law.
1.4. BYLAWS. The Bylaws of Company as they exist immediately prior to the
Closing Date shall continue as the bylaws of the Surviving Company until
otherwise amended as provided by law.
1.5. DIRECTORS AND OFFICERS. The directors and officers of Newco as of the
Closing Date shall become the directors and officers of the Surviving Company,
except as otherwise provided herein.
1.6. TAX-FREE ORGANIZATION. For Federal income tax purposes, the parties
intend that the Merger be treated as a tax-free reorganization (the
"Reorganization") within the meaning of Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended (the "Code"). Each party agrees and covenants
to report the Merger in accordance with such intent for federal income tax
purposes, including filing such information statements and maintaining such
records as are required by applicable Treasury Regulations.
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2. PURCHASE PRICE, CONVERSION OF STOCK; ATTENDANCE AT BOARD MEETINGS
2.1. AGGREGATE CONSIDERATION. In consideration for the Merger, UBI shall
pay an amount equal to the sum of $2,800,000 (the "Purchase Price"). The
Purchase Price shall be paid in shares of common stock, no par value, of UBI
(the "Common Stock"). In calculating the aggregate number of shares of Common
Stock to which Stockholders shall be entitled in satisfaction of the Purchase
Price, the Purchase Price will be divided by the fair market value of the Common
Stock determined by the average of the final bid and asked price of the Common
Stock for the first twenty (20) trading days in the thirty (30) trading days
prior to the closing of the transactions contemplated hereby. Upon the Closing
Date, each outstanding share of stock shall be converted into the right to
receive a proportionate share of the total number of shares of Common Stock to
be issued in satisfaction of the Purchase Price.
2.2. RESTRICTIONS ON THE COMMON STOCK. Stockholders acknowledge that the
shares of Common Stock issued in satisfaction of the Purchase Price are being
issued without registration under Section 5 of the Securities Act of 1933, as
amended (the "Securities Act") pursuant to the exemption from registration
provided under Section 4(2) for sales not involving a public offering. In
connection therewith, the Stockholders hereby make the following representations
to the UBI, and acknowledge that the UBI is relying upon such representations in
claiming exemption provided under Section 4(2) of the Securities Act:
(a) Knowledge and Experience. The Stockholders have such knowledge and
experience in financial and business matters or are represented by an
independent investment representative that has such knowledge and experience in
financial and business matters such that the Stockholders, either alone or with
their independent investment representative, is capable of evaluating the
information provided by the UBI or information to which the Stockholders have
been given access by the UBI and are capable of evaluating the merits and risks
of the Common Stock.
(b) Access to Information. By reason of the Stockholders' business or
financial experience, or the business or financial experience of their
independent investment representative who is not an officer, director or
employee of the UBI nor is acting on behalf of the UBI, either directly or
indirectly, the Stockholders have the capacity and have taken all steps
necessary to protect their own interests in connection with the acquisition of
the Common Stock. The
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Stockholders have had access to sufficient information concerning UBI to make an
informed decision concerning the acquisition of the Common Stock.
(c) Stockholders' Liquidity. The Stockholders have adequate means of
providing for their current needs and personal contingencies and have no need
for liquidity in connection with the Common Stock. The Stockholders acknowledge
that they may have to bear the economic risk of the Common Stock for an
indefinite period of time, subject to Section 2.3 below and the Stockholders can
bear a complete loss in the value of the Common Stock.
(d) Restrictions on Transfers; Investment Intent. The Stockholders
acknowledge and understand that the Common Stock has not been registered with
the Securities and Exchange Commission or any other federal or state
governmental agency and agree that: (i) the Common Stock is being acquired for
investment, not with any present intention to resell or with a view toward
distribution; and (ii) the Common Stock is not freely tradeable for one (1) year
after the date the Common Stock is issued, subject to Section 2.3 below.
2.3. REGISTRATION RIGHTS.
(a) For a period commencing upon the Closing (as defined below) and
ending 180 days thereafter, Stockholders, jointly, shall have the right, one
time, to require UBI to file a registration statement on a form of general use
(and, if available to UBI, will use Form S-3) under the Securities Act in order
to permit the sale or other disposition the shares of Common Stock in accordance
with the intended method of sale or other distribution requested by the
Stockholders. Stockholders shall provide all information reasonably requested by
UBI for inclusion in any such registration statement to filed hereunder. UBI
will use its best efforts to cause such registration statement first to become
effective and then to remain effective under Rule 415 for a period of up to
twenty-four (24) months thereafter (the "Registration Period"). In addition, if
during the twenty-four (24) month period beginning upon the Closing Date, UBI
files with the Securities and Exchange Commission (the "SEC") a registration
statement under Section 5 of the Securities Act on a form permitting the
registration of shares for selling security holders, upon written request of
Stockholders, UBI will include on such registration statement such shares of
Common Stock as Stockholders shall reasonably request. The rights contained in
the foregoing sentence shall be subject to the limitations contained in the
following sentence as if the inclusion of Stockholders'
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shares of Common Stock constituted a new registration statement. The obligations
of UBI hereunder to file a registration statement and to maintain its
effectiveness may be suspended for one or more periods of time not exceeding
sixty (60) days in the aggregate if the Board of Directors of UBI shall have
determined, in consultation with its investment banker and counsel, as
appropriate, (i) that the filing of such registration statement or the
maintenance of its effectiveness would require disclosure of non-public
information that would materially and adversely affect UBI and UBI shall have
received an opinion of counsel to the same effect, or (ii) that the filing of
such registration statement or the maintenance of its effectiveness, would
negatively impact UBI's ability to undertake a capital offering. Such
registration effected under this Section 2.3 shall be at Buyer's expense, except
for underwriting commissions and the fees and disbursements of Stockholder's
counsel attributable to the registration of the Common Stock. If requested by
Stockholders, in connection with any such registration, UBI will become a party
to any underwriting agreement relating to the sale of shares of Common Stock,
but only to the extent of obligating itself in respect of representations,
warranties, indemnities and other agreements customarily included by an issuing
company in such underwriting agreements between an underwriter and a selling
shareholder.
(b) UBI represents and warrants that it meets the requirements for the
use of Form S-3 for registration of the sale by the Stockholders of the Common
Stock and UBI shall file all reports required to be filed by UBI with the SEC in
a timely manner so as to maintain such eligibility for the use of Form S-3.
(c) UBI acknowledges that an indeterminate number of shares of Common
Stock shall be registered pursuant to Rule 416 under the Securities Act so as to
include in any registration statement that includes the Stockholders' Common
Stock any and all shares of Common Stock which may become issuable to prevent
dilution resulting from stock splits, stock dividends or similar transactions.
(d) UBI shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the registration statement
covering the Common Stock and the prospectus used in connection with the
registration statement as may be necessary to keep such registration statement
effective at all times during the Registration Period, and, during such
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period, comply with the provisions of the Securities Act with respect to the
disposition of all shares of the Stockholders' Common Stock covered by the
registration statement until such time as all of such shares of the
Stockholders' Common Stock have been disposed of in accordance with the intended
methods of disposition by the Stockholders as set forth in the registration
statement. UBI's obligations hereunder are subject to UBI's right to suspend
registration in the circumstances provided for under (a) above.
(e) UBI shall furnish to each Stockholder whose shares of Common Stock
are included in the registration statement, and to their legal counsel (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by UBI, one copy of the registration statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, each letter written by or on behalf of UBI to the
SEC or the Staff of the SEC (including, without limitation, any request to
accelerate the effectiveness of any registration statement or amendment
thereto), and each item of correspondence from the SEC or the Staff of the SEC,
in each case relating to such registration statement (other than any portion, if
any, thereof which contains information for which UBI has sought confidential
treatment), (ii) on the date of effectiveness of the registration statement or
any amendment thereto, a notice stating that the registration statement or
amendment has been declared effective, and (iii) such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as a Stockholder may reasonably
request in order to facilitate the disposition of the shares of Common Stock
owned by the Stockholder.
(f) UBI shall use its best efforts to (i) register and qualify a
Stockholder's shares of Common Stock covered by a registration statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as each Stockholder who holds shares of Common Stock being offered
reasonably requests, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions
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reasonably necessary or advisable to qualify the shares of Common Stock for sale
in such jurisdictions.
(g) As promptly as practicable after becoming aware of such event, UBI
shall notify each Stockholder of any event, of which UBI has knowledge, as a
result of which the prospectus included in a registration statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and use its best efforts promptly to prepare a
supplement or amendment to the registration statement to correct such untrue
statement or omission, and deliver such number of copies of such supplement or
amendment to each investor as such Stockholder may reasonably request; provided,
however, that UBI's obligation to supplement or amend such registration
statement may be suspended in the circumstances set forth under paragraph (a)
above regarding the suspension of UBI's obligation to undertake registration.
(h) UBI shall use its best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a registration statement, and, if
such an order is issued, to obtain the withdrawal of such order at the earliest
practicable time (including in each case by amending or supplementing such
registration statement) and to notify each Stockholder who holds Common Stock
being sold (or, in the event of an underwritten offering, the managing
underwriters) of the issuance of such order and the resolution thereof (and if
such registration statement is supplemented or amended, deliver such number of
copies of such supplement or amendment to each Stockholder as such Stockholder
may reasonably request).
(i) UBI, at the Stockholders' sole cost, shall permit a single legal
counsel designated by the Stockholders holding a majority of shares of Common
Stock that are to be included on a registration statement to review the
registration statement and all amendments and supplements thereto a reasonable
period of time prior to their filing with the SEC, and not file any document in
a form to which such counsel reasonably objects and will not request
acceleration of the effectiveness of any Registration Statement without prior
notice to such counsel.
(j) UBI shall use its best efforts to promptly list the shares of
common stock covered by the registration statement on the same trading market
where UBI's Common Stock then trades.
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(k) UBI shall comply with all applicable laws related to a
registration statement and offering and sale of securities and all applicable
rules and regulations of governmental authorities in connection therewith
(including, without limitation, the Securities Act and the Exchange Act, and the
rules and regulations promulgated by the SEC thereunder). UBI shall take all
such other actions as any Stockholder or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of the Common Stock.
(l) All expenses, other than underwriting discounts and commissions
and the fees of Stockholders' counsel, incurred in connection with all
registrations, filings or qualifications pursuant to this Section 2.3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees shall be borne by UBI. The Stockholders shall
be responsible for any fees of their counsel. In addition, UBI shall pay all of
the Stockholders' costs and expenses (including legal fees) incurred in
connection with the enforcement of the rights of the Stockholders hereunder.
(m) To the extent permitted by law, UBI will indemnify, hold harmless
and defend each Stockholder who holds Common Stock, (each an "Indemnified
Person"), against any joint or several losses, claims, damages, liabilities or
expenses (collectively, together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened, in
respect thereof, "Claims") to which any of them may become subject insofar as
such Claims arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a registration statement or the omission
or alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, (except, to the extent
that UBI has notified Stockholders under Section (g) hereof that such
registration statement includes an untrue statement of a material fact or an
omission to state a material fact required to be stated therein and further that
UBI has notified Stockholders that it is entitled to suspend the effectiveness
of such registration statement under Section (a) hereof, and such claim arises
out of Shareholders continued sales of Common Stock notwithstanding such notice
and suspension); (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of such registration statement, or contained in the final
prospectus (as amended or supplemented, if UBI files any
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amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading, or (iii) any violation or alleged violation by UBI of
the Securities Act, the Exchange Act, any other applicable securities law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Common Stock (the
matters in the foregoing clauses (i) through (iii) being, collectively
"Violations"). UBI shall reimburse the Stockholder and each other Indemnified
Person, promptly, as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification contained in this
subsection (m) shall not apply to a Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to UBI by such Indemnified Person expressly for use in the
registration statement or any such amendment thereof or supplement thereto. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Common Stock by a Stockholder.
(n) In the event the Company fails to comply with the provisions of
Section 2.3(a), the Company shall be obligated to pay to the Stockholders, in
the aggregate, interest on the entire Purchase Price at a rate of 5.0% per
annum, commencing on the date upon which registration was first requested by the
Stockholders until the registration statement covering the shares of Common
Stock requested to be registered by the Stockholders is declared effective by
the SEC (the "Commencement Date") and payable monthly commencing one month from
and after the Commencement Date. Such payment shall be made in shares of Common
Stock, which will be subject to the same registration rights as the shares of
Common Stock issued in satisfaction of the Purchase Price. Such payment of the
Common Stock hereunder shall be in addition to, and not in lieu of, any other
claims or rights that the Stockholders may have for damages resulting from UBI's
failure to comply with the provisions of Section 2.3(a) hereof, including, but
not limited to, a claim for consequential damages.
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2.4 ATTENDANCE AT BOARD MEETINGS. One representative on behalf of the
Stockholders (the "Representative") shall be permitted to attend, as an
observer, each meeting of UBI's Board of Directors (the "Board"). The
Stockholders hereby agree that the Representative shall be Habib. UBI shall, as
long as any of the Stockholders remains a stockholder of UBI, give the
Representative written notice (a "Meeting Notice") at the same time that notice
is given to members of the Board (to the extent written notice is provided to
the members of the Board; to the extent only telephone notice is provided, the
Representative shall also receive telephone notice), which Meeting Notice shall
include, without limitation, all information and material provided to the
members of the Board.
3. THE CLOSING
3.1. TIME AND PLACE OF CLOSING. Upon five (5) days notice from one party
hereunder to the other that the conditions set forth in this Article 3 and in
Articles 8 and 9 are satisfied or waived, or on such date as the parties may
mutually agree (the "Closing Date"), a closing (the "Closing") shall take place
at the offices of Jamieson, Moore, Peskin & Spicer, P.C., 300 Alexander Park,
CN-5276, Princeton, New Jersey 08543.
3.2. DOCUMENTS REQUIRED AT CLOSING. At the Closing, Stockholders and/or the
Company shall deliver to UBI the following documents:
(a) a certificate of merger executed by a duly authorized officer of
the Company in the form annexed hereto as Exhibit 3.2(a);
(b) certificate executed by Stockholders and the Company, dated the
Closing Date, reasonably satisfactory in form and substance to
UBI, certifying that the conditions specified in Sections 8.1 and
8.2 hereof have been satisfied in all material respects;
(c) a Certificate of Good Standing and certified Certificate of
Incorporation of Company from the Secretary of State of New
Jersey, dated no earlier than fifteen (15) days prior to the
Closing Date;
(d) the opinion of Zukerman Gore & Brandeis, LLP, counsel for
Stockholders, dated as of the Closing Date and reasonably
acceptable to UBI;
(e) such consents and waivers of third parties as may be necessary to
consummate the transactions contemplated by this Agreement;
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(f) the written consent of each regulatory authority whose consent is
required with regard to the Permits (as defined in Section 4.13
hereof) and consummation of the transactions contemplated by this
Agreement;
(g) certified copies of the resolutions of the Board of Directors of
the Company in connection with the execution of this Agreement
and the consummation of the transactions contemplated hereby.
(h) canceled stock certificates representing the Stock.
3.3. DOCUMENTS REQUIRED FROM UBI AT THE CLOSING. At the Closing, UBI shall
deliver to Stockholders the following documents:
(a) Certified copies of the resolutions approved by the board of
directors of UBI in connection with the execution of this
Agreement and the consummation of the transactions contemplated
hereby, and a certificate executed by an officer of UBI, dated
the Closing Date, reasonably satisfactory in form and substance
to Stockholders, certifying that the conditions specified in
Sections 9.1 and 9.2 hereof have been satisfied in all material
respects;
(b) Certificate of Good Standing and certified Certificate of
Incorporation for UBI from the Secretary of State of Delaware,
dated no earlier than fifteen (15) days prior to the Closing
Date;
(c) the opinion of Jamieson, Moore, Peskin & Spicer, counsel for UBI
which shall include, without limitation, an opinion as to the
issuance of the Common Stock hereunder, dated as of the Closing
Date and in a form reasonably acceptable to Stockholders.
(d) Certificates of Common Stock issued in the names of the
Stockholders (in such denominations as reasonably requested by
the Stockholders), which certificates, in the aggregate,
represent shares of Common Stock having a fair market value, as
determined in accordance with Section 2.1 above, equal to the
Purchase Price.
(e) the opinion of Jamieson, Moore, Peskin & Spicer, counsel for UBI,
to the extent that the Merger will constitute a tax free
reorganization pursuant to Section 368(a)(1)(B) of the Code.
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3.4 TAX COVENANTS AND REPRESENTATIONS OF UBI AND THE BANK.
(a) Representations and Warranties. UBI and the Bank (the "UBI
Parties") hereby represent and warrant to each of the Stockholders, as follows:
(A) Neither of the UBI Parties is an "investment company" as
defined in Section 368(a)(2)(F) of the Code.
(B) The Bank owns 100% of the outstanding shares of capital stock
and otherwise is in control (within the meaning of Section
368(c) of the Code) of Newco. UBI owns 100% of the outstanding
capital stock and otherwise is in control (within the meaning
of Section 368(c) of the Code) of the Bank.
(C) Newco has been formed solely from the purpose of consummating
the Merger, and Newco has not conducted and will not conduct
any business activities or other operations of any kind other
than the issuance of its stock to the Bank prior to the
Merger. Newco will have no liabilities assumed by the Company,
and will not transfer to the Company any assets subject to
liabilities, in the Merger.
(D) Neither UBI nor the Bank have a current plan, arrangement or
intention to cause the Company on or after the Closing to
issue additional shares of the Company's capital stock that
would cause the Bank to lose control, or otherwise result in
the Bank losing control (in both cases within the meaning of
Section 368(c)(1) of the Code), of the Company.
(E) None of UBI, the Bank or Newco has any current plan,
arrangement or intention to liquidate the Company; to merge
the Company with or into another corporation other than Newco;
to sell or otherwise dispose of the stock of the Company; or
to sell or otherwise dispose (or cause to be sold or otherwise
disposed) of any of the Company's assets, including the assets
of Newco acquired in the Merger, except for dispositions made
in the ordinary course of business or transfers described in
Section 368(a)(2)(C) of the Code.
(F) UBI has no plan, arrangement or intention to directly or
indirectly reacquire any of the Common Stock issued in the
Merger.
(b) Tax Covenants.
(A) Continuity of Business Enterprise. As of the Closing Date and
thereafter, UBI will cause the Company to continue the
historic business of the Company or use a significant portion
of the historic business assets of the Company in a manner
that satisfies the continuity of business enterprise
requirement described in Section 1.368-1(d) of the Treasury
Regulations.
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(B) Certain Filings. UBI shall timely file, or cause the Company
to timely file, as the case may be, with the Internal Revenue
Service and any other applicable governmental or taxing
authority, complete and accurate statements and documents, and
shall maintain, or cause to be maintained, as the case may be,
such reports, records, information and documents, with respect
to UBI, Newco and the Company as required by Sections
1.368-3(a) and 1.368-3(c) of the Treasury Regulations or other
applicable law relative to the Merger and the qualification of
the Merger as a tax-free reorganization for income tax
purposes.
(C) Indemnification. Without regard to, or limitation of, the
provisions of Section 10 hereof, UBI agrees to defend,
indemnify and hold harmless the Stockholders from and against
any interest, penalty or other addition to tax for which any
of them may become liable if the Merger fails to qualify as a
reorganization within the meaning of Section 368(a) of the
Code solely by reason or as a result of a breach of (A) the
foregoing covenants of UBI in Section 3.4(a) hereof or (B) any
of the representations and warranties of UBI and/or Newco
under Section 3.4(b) hereof.
4. STOCKHOLDERS' AND THE COMPANY'S REPRESENTATIONS AND WARRANTIES
Notwithstanding any other term or provision of this Agreement or any
agreement or document executed or delivered in connection with the transactions
contemplated by this Agreement, whenever a representation or warranty contained
in this Agreement, or in any agreement or document executed in connection with
the transactions contemplated by this Agreement, is made "to Stockholders'
knowledge," or "to the Company's knowledge", the Stockholders, or the Company,
as the case may be, shall be deemed to have knowledge of any facts contrary to
any such representation or warranty if, and only if, such fact or facts are
actually known by the Stockholders or by the Company through its officers. The
statements contained in this paragraph are in limitation of, and not in
expansion of, any representation or warranty contained in this Agreement or in
any agreement or document in connection with the transactions contemplated by
this Agreement.
The Stockholders the Company hereby represent and warrant to, and agree
with, UBI as follows:
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4.1. BINDING EFFECT; ENFORCEABILITY. This Agreement has been duly and
validly executed and delivered by Stockholders and the Company and constitutes
the valid and binding obligation of Stockholders, and the Company enforceable
against Stockholders and the Company in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally and general principals of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or at law).
4.2. NO CONFLICTS. Except as set forth on Schedule 4.2 attached hereto, the
execution, delivery and performance by Stockholders and the Company of this
Agreement and any other agreements, instruments and documents to be executed and
delivered by the Company and Stockholders in connection herewith ("Ancillary
Documents"), the consummation of the transactions contemplated hereby or
thereby, and compliance with any of the provisions hereof or thereof, will not
(a) conflict with or result in a breach of any provision of Company's
Certificate of Incorporation or By-Laws, (b) with or without the giving of
notice or lapse of time or both, violate any (i) judgment, order, writ or decree
applicable to Company or Stockholders and which violation would have a material
adverse effect on the Company, its business, results of operations or prospects;
or (ii) to the knowledge of Stockholders, any law to which Company or
Stockholders is subject, or (c) result in the breach, conflict, default, or
modification of or with any term, provision, covenant or condition of (or give
rise to any right of termination, cancellation, or acceleration under) the
provisions of any material agreement, note, lien, mortgage, indenture, lease, or
other instrument or obligation by which Company or Stockholders may be bound or
to which they may be subject.
4.3. NO CONSENTS. Except as set forth on Schedule 4.3 attached hereto, no
consent, authorization or approval of, or filing with or exemption by any
governmental, public or self-regulatory body or authority or any other person is
required in connection with the execution and delivery by Stockholders and the
Company of this Agreement or any Ancillary Document, or the consummation of any
of the transactions contemplated hereby or thereby. The execution, delivery, and
performance by Stockholders and the Company of this Agreement or any Ancillary
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Document will not result in the imposition of any lien, mortgage, security
interest, pledge, encumbrance, easement, claim, or other restriction or charge
(each an "Encumbrance") on any of the assets of the Company, and will not alter
or impair any of the assets of the Company nor UBI's ability to utilize same in
the same manner in which they are currently utilized by Company in connection
with the Business.
4.4. TITLE TO AND CONDITION OF PROPERTY
(a) Except as set forth on Schedule 4.4, the Company does not own any
real property. Except as set forth on Schedule 4.4 (which includes all
mechanics' liens, landlord liens under leases, equipment leases/financings,
security interests and any other specific items affecting the Company's
property), Company has good title to all the assets or properties it owns or
uses in the Business, free and clear of any Encumbrance of any nature
whatsoever.
(b) All properties and other assets owned by the Company or used by
the Company in the conduct of the Business are in operating condition and repair
(ordinary wear and tear and damage from casualty which is fully covered by
insurance excepted), have been adequately maintained in accordance with
documented procedures, and except as otherwise set forth on Schedule 4.4 annexed
hereto, none of such property with an initial purchase price in excess of $5,000
requires any maintenance or repairs except for routine maintenance and repairs
that are not material in nature or in cost.
4.5. MATERIAL CONTRACTS. Schedule 4.5 attached hereto contains a complete
list of all written Contracts (as defined below) of Company (or of Stockholders
in connection with the Business). Each Contract is valid, in full force and
effect and enforceable in accordance with its terms, and Company has fulfilled,
or taken all action reasonably necessary to enable the same to be fulfilled when
due, all of its obligations under each Contract subject to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors rights generally and general principals of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or at law). There
has not occurred any default, or any event which, with notice or lapse of time
or both, would constitute an event of default thereunder, will become a default
by Company, nor to the knowledge of Stockholders have there occurred any default
by others or any event which, with
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notice or lapse of time or both, would constitute an event of default under any
Contract. Neither Company nor, to the knowledge of Stockholders, any other party
is in arrears in respect of the performance or satisfaction of the terms or
conditions on its part to be performed or satisfied under any Contract and no
waiver or indulgence has been granted by any of the parties thereto.
As used in this Agreement, "Contract" means any contracts, orders, leases,
licenses, or agreements or other commitments, whether written or oral.
4.6. LITIGATION. Except as set forth on Schedule 4.6 attached hereto, there
are no actions, suits, proceedings, arbitrations, claims, investigations or
inquiries ("Litigation") pending or, to the knowledge of Stockholders,
threatened, before or by any foreign or United States federal, state, municipal,
or other governmental, administrative or self-regulatory instrumentality or
agency (or any private arbitration tribunal), against or relating to the Company
or the Business. There is not in existence any order, judgment or decree of any
court or other tribunal or any agency or self-regulatory body enjoining Company
from taking or requiring Company to take action of any kind or to which Company
or the Business or any of the Company's assets or properties is subject or by
which any of them is bound.
4.7. BALANCE SHEET; NO MATERIAL ADVERSE CHANGE
(a) Stockholders have delivered to UBI copies of an unaudited balance
sheet and income statement of Company (the "Financial Statement") as of
September 30, 1998 (the "Statement Date"). The Financial Statement has been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with that of the Company's audited financial statements for
the year ended December 31, 1997, is correct and complete and fairly presents
the financial position of the Company as of the Statement Date in all material
respects.
(b) Since the Statement Date, except as set forth on Schedule 4.7
attached hereto, Company has not:
(i) suffered the occurrence of any events which, individually
or in the aggregate, have had, or might reasonably be
expected to have, a material adverse effect on the
financial condition, results of operations, assets,
properties, business or prospects of the Company;
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(ii) waived or released any rights pertaining to the Company or
any of its assets material to the operations or prospects
of the Company or properties of any material value;
(iii) transferred or granted any rights with respect to any of
its assets or properties;
(iv) except in the ordinary course of business, made or granted
any general wage or salary increase to persons employed by
Company (each and all of the foregoing being herein
referred to as "Employees");
(v) except in the ordinary course of business, made any
increase in or commitment to increase any benefits for
Employees or adopted or made any commitments to adopt any
additional benefit plan for Employees;
(vi) changed any accounting principle, practice or method used
for financial reporting purposes by the Company;
(vii) amended or made any other change to the Certificate of
Incorporation or Bylaws of the Company;
(viii) declared, set aside or made payment of any dividend or
distribution (whether in cash, stock, or property) in
respect of the capital stock of the Company or any direct
or indirect redemption, purchase or other acquisition of
shares of such capital stock or any split, combination or
reclassification of such capital stock;
(ix) mortgaged or encumbered any of the assets of the Company;
(x) issued any shares of capital stock or other equity
securities or obligations or securities convertible into or
exchangeable for shares of capital stock or other equity
securities;
(xi) borrowed any funds;
(xii) made any capital expenditure or execution of any lease or
incurrence of any liability therefore; and
(xiii) authorized, approved, agreed or committed to do any of the
foregoing.
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4.8. BROKERS OR FINDERS. Except as disclosed on Schedule 4.8 hereto, no
broker or finder has been retained by or authorized to act on behalf of any
Stockholder or the Company who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement.
4.9. TAXES AND TAX RETURNS.
(a) The Company has duly filed (and until the Closing Date will so
file) all returns, declarations, reports, information returns and statements
("Returns") required to be filed by it in respect of any Federal, state and
local taxes (including, withholding taxes, penalties or other payments required)
and has duly paid (and until the Closing Date will so pay) all such taxes due
and payable, other than taxes or other charges which are being contested in good
faith (and which have been disclosed to UBI on Schedule 4.9 annexed hereto). The
Company maintains on its books and records reserves that are adequate for the
payment of all Federal, state and local taxes not yet due and payable, but are
incurred or will be incurred in respect of the Company through the Closing Date.
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 the Company, nor has the Company 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 Schedule 4.9, the Company (i) has not
requested any extension of time within which to file any tax Return which Return
has not since been filed, (ii) is not a party to any agreement providing for the
allocation or sharing of taxes, (iii) is not required to include in income any
adjustment pursuant to Section 481(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), by reason of a voluntary change in accounting method
initiated by the Company (nor does the Company have any knowledge that the IRS
has proposed any such adjustment or change of accounting method) or (iv) has not
filed a consent pursuant to Section 341(f) of the Code or agreed to have Section
341(f) (2) of the Code apply.
4.10. ACCURACY. No representation or warranty of Stockholders or the
Company in this Agreement contains any material misstatement of fact or omits
any material fact necessary to be stated in order to make the statements herein
not misleading.
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4.11. OPERATION OF THE BUSINESS. The business of the Company presently
consists of and has at all times that Stockholders have owned all of the capital
stock of Company consisted of and been limited to correspondent mortgage
banking. Company is not restricted by any agreement or understanding to which it
is a party with any other party from carrying on the Business anywhere in the
world.
4.12. INSURANCE. Attached hereto as Schedule 4.12 is a complete list of all
insurance policies of Company or the Stockholders, the coverage of which
policies is applicable, in whole or in part, to the Business. All policies
listed on Schedule 4.12, copies of which have not previously been provided to
UBI, shall be provided to UBI prior to the Closing. Neither Company nor the
Stockholders have failed to give any notice or present any claim under any such
policy or bond and there are no claims outstanding under any such policy or bond
as to which any insurance company is denying liability or defending under a
reservation of rights clause or otherwise.
4.13. COMPLIANCE WITH APPLICABLE LAWS; PERMITS.
(a) To Stockholders' knowledge, neither the use by the Company of any
of its assets of properties nor the conduct of the Business by Company violates
any laws, statutes, ordinances, rules, regulations, decrees or orders of the
United States (federal, state or local) or any other jurisdiction in which the
Company does business (each and all of the foregoing being herein referred to as
"Laws"). The Company has not received any notice of any violation of Law by the
Company, and to Stockholders' knowledge no basis for the allegation of any such
violation exists.
(b) The Company holds all necessary Permits from every jurisdiction,
whether federal, state, county, municipal, or foreign necessary for the lawful
operation of the Business as Company currently conducts the Business; provided,
however, that the foregoing shall only apply to Permits which the failure to
obtain would materially impair the Company in the operation of the Business.
"Permit" as used herein means any licenses, permits, approvals or registrations,
authorizations, franchises or other approvals from any domestic (federal, state
or local) governmental, public or self-regulatory body or authority. By way of
example, and not by way of limitation, Company holds all necessary New Jersey
Department of Banking and Insurance permits required to conduct the Business.
Schedule 4.13(b) hereto lists all Permits held by Company in connection with the
Business. All of the Permits listed on Schedule 4.13(b) are in
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full force and effect and none of such Permits have been revoked, and there is
no proceeding pending, nor to the Company's knowledge, threatened by any
administrative agency seeking to revoke, terminate or impair any such licenses,
permits or approvals. Company is not in default under, and to Stockholders'
knowledge, no condition exists that with notice or lapse of time, or both, would
constitute a default under any Permit listed on Schedule 4.13(b). As to any such
Permit that has expired or is about to expire, Company has promptly applied for
a renewal of the same and expects the same to be renewed in the usual course.
(c) Except as disclosed on Schedule 4.13(c) hereto, no consent of,
approval of, or notification to the authority issuing any Permit is necessary
due to the execution of or the consummation of the transactions contemplated by
this Agreement. Upon consummation of the transactions contemplated by this
Agreement, the Company will continue to be entitled to all authority and
benefits conferred by such Permit and shall be lawfully entitled to use such
Permit in connection with the operation of the Business.
4.14. BOOKS AND RECORDS. All books of account and other financial records
of Company are (i) in all material respects complete and correct; (ii)
maintained in compliance with Law, and (iii) accurately reflected on the
Financial Statement.
4.15. EMPLOYEES, LABOR RELATIONS, ETC.
(a) Schedule 4.15(a) attached hereto sets forth the name, position and
salary or wages of each Employee of Company as of the date hereof. Except as set
forth on such Schedule, no Employee has delivered written or, to the knowledge
of Stockholders, oral notice of his or her intention to resign or retire.
(b) To Stockholders' knowledge, Company has withheld all amounts
required by applicable law or contract to be withheld from the wages or salaries
of the Employees and is not liable for any arrears of wages or any taxes or
penalties for failure to comply with any of the foregoing or for payment to any
trust or other fund or to any authority with respect to unemployment
compensation, Social Security or other benefits for such Employees. To the best
of Stockholders' knowledge, Company has not engaged in any unfair labor practice
or discriminated on the basis of race, age, sex or otherwise in its employment
conditions or practices with respect to the Employees. Except as set forth on
Schedule 4.6, there is no pending or, to the
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knowledge of Stockholders, threatened collective bargaining representation
questions respecting any Employees.
4.16. EMPLOYEE BENEFIT PLANS, ETC.
(a) Schedule 4.16(a) attached hereto contains a true and complete list
of each plan, contract, program, policy or arrangement, including, but not
limited to, pension, bonus, section 401(k) deferred compensation, incentive
compensation, supplemental retirement, severance or termination pay,
hospitalization, medical, retiree health, life insurance, dental, disability,
salary continuation, vacation, supplemental unemployment benefits,
profit-sharing, or retirement plan, contract, program, policy or arrangement,
maintained, contributed to, or required to be contributed to, by Company or by
any of its affiliates for the benefit of any Employee or former Employee,
whether or not any of the foregoing is funded, whether formal or informal and
whether or not subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") (collectively, the "Benefit Plans"). Company has delivered
to UBI true and complete copies of the Benefit Plans (or policies) listed on
Schedule 4.16(a).
(b) Except as specifically set forth on Schedule 4.16(b), there is no,
nor has there ever been, any multiemployer plan (as defined in ERISA Section
3(37)) covering Employees or a past or present withdrawal therefrom.
(c) Full payment has been made of all amounts which Company is
required, under applicable law or under any Benefit Plan or any agreement
relating to any Benefit Plan to which Company is a party, to have paid as
contributions thereto as of the last day of the most recent fiscal year of such
Benefit Plan ended prior to the date hereof.
(d) For purposes of this Section, any reference to the term "Company"
shall be deemed to refer also to any entity which is under common control or
affiliated with Company within the meaning of Section 4001 of ERISA and the
rules and regulations thereunder and/or Section 414 of the Code and the rules
and regulations thereunder.
4.17. ENVIRONMENTAL MATTERS.
4.17.1. For the purposes of this Agreement, the following terms shall
be defined as follows:
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"Environmental Conditions" shall mean any environmental contamination
or pollution or threatened contamination or pollution of, or the Release or
threatened Release of Hazardous Materials into, surface soils, subsurface soils,
sewage systems, surface water, groundwater, land or air.
"Environmental Laws" shall mean all federal, state and local laws,
statutes, rules, ordinances, regulations, decisional law, governmental,
administrative or judicial orders or decrees or other legal requirements of any
kind governing pollution or contamination of the environment, occupational
health and safety or protection of public health, presently in effect and
hereinafter adopted, including, but not limited to, the Federal Water Pollution
Control Act, 33 U.S.C. ss.ss. 1231-1387; the Resource Conservation and Recovery
Act, 42 U.S.C. ss.ss. 6901-6991 ("RCRA"); the Clean Air Act, 42 U.S.C.
ss.ss.7401-7642; and the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. ss.ss. 9601-9675("CERCLA"); and the rules and
regulations promulgated thereunder.
"Environmental Liabilities of the Business" shall mean all
liabilities, claims, actions or causes of action of any kind or nature
whatsoever arising from or under Environmental Laws ("Liabilities"), which
Liabilities arise or result from or are related to (i) the operations of the
Company on or before the Closing, or (ii) the ownership, operation, management,
control or use of any of the Facilities or any other properties by Company on or
before the Closing, including but not limited to:
(a) Failure by Company, or any agents, servants, employees or
contractors of Company to comply with Environmental Laws applicable to the
Business or any of the Facilities;
(b) Environmental Conditions occurring or existing at, on or under any
of the Facilities on or before the Closing;
(c) Treatment, storage, disposal or Release at any location of
Hazardous Materials used, generated, handled, originating at or transported from
any of the Facilities;
(d) Orders, notices, decrees, directives or information requests of
any governmental agencies requiring investigation or cleanup of Environmental
Conditions on, at, under or emanating from any of the Facilities or any other
properties or otherwise compelling compliance with Environmental Laws; and
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(e) Claims of third parties alleging damages arising from personal
injury, property damage or damage to natural resources arising from or related
in any way to Environmental Conditions on, at, under or emanating from any of
the Facilities or the conduct of the Business by Company.
"Environmental Permits" shall mean all permits, authorizations,
approvals, registrations, certificates, licenses or consents required under or
issued pursuant to Environmental Laws.
"Facilities" shall mean the plants, offices, facilities and all
related real property currently or at any time in the past owned, occupied,
operated, managed, leased, used or controlled by Company.
"Hazardous Materials" shall mean all chemical, biological, organic,
inorganic or infectious pollutants, contaminants, hazardous, flammable or toxic
substances, materials or wastes of whatever kind or nature, whether liquid,
solid or gaseous, including without limitation, pollutants, contaminants,
substances, materials or wastes regulated under, defined, listed or included in
any Environmental Laws. For the purpose of this Agreement, the term "Hazardous
Materials" shall include without limitation all of the types of "medical wastes"
listed in 42 U.S.C. ss.6992a(a).
"Release" shall mean any discharge, spill, leak, pumping, pouring,
emitting, emptying, injection or dumping.
4.17.2 Except as set forth on Schedule 4.17, to Stockholders'
knowledge:
(a) Company has not conducted or operated and currently does not
conduct or operate at any of the Facilities and there is not now nor has there
ever been located on the Facilities, any areas or vessels used or intended for
the treatment, storage or disposal of Hazardous Materials, including, but not
limited to, any storage areas, drum storage areas, surface impoundments,
incinerators, land fills, tanks, lagoons, ponds, waste piles, or deep well
injection systems;
(b) Company has not transported for treatment, storage, or disposal
any Hazardous Materials or entered into any contract or agreement, or otherwise
arranged, for the
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transportation, storage, or disposal of any such Hazardous Materials at any
location, including, without limitation, any treatment, storage or disposal
facility;
(c) There are no Environmental Conditions, including without
limitation, the Release of any Hazardous Materials, related to the Business, or
arising out of Company's operation of any of its assets or properties, the use,
operation or occupancy by Company of the Facilities or conduct of the Business
which would constitute or have constituted a violation of Environmental Law, or
that reasonably could be expected to result in an obligation by Company, its
assigns or its successors in interest to effect any environmental cleanup or
remediation;
(d) No federal, state or local government or agency has asserted or
created an Encumbrance upon any or all of the Company's assets or properties as
a result of any use, Release, or cleanup of any Hazardous Materials nor has any
such use, Release, or cleanup occurred which could reasonably be expected to
result in the assertion or creation of such an Encumbrance.
(e) Company possesses all Environmental Permits necessary in order to
conduct the Business as it is now being conducted. Each Environmental Permit
issued to Company is in full force and effect. Company is in material compliance
with all requirements, terms and provisions of the Environmental Permits issued
to Company. Company shall take all necessary actions to have such Environmental
Permits renewed or reissued to Company prior to the Closing Date so as to allow
UBI to continue the Business without interruption after the Closing Date; and
(f) The Business is, and at all times has been, in material compliance
with all Environmental Permits and Environmental Laws applicable to the Business
or the Facilities.
4.18. ABSENCE OF UNDISCLOSED LIABILITIES. Company has no liabilities or
obligations of any nature which relate to or could reasonably be expected to
affect the Business, whether absolute, accrued, contingent or otherwise, and
whether due or to become due, except (a) as set forth in Schedule 4.18 hereto,
(b) as and to the extent disclosed or reserved against in the Financial
Statement, and (c) liabilities and obligations that (i) are incurred by the
Company after the Statement Date in the ordinary course of business consistent
with prior practice and (ii) individually and in the aggregate are not material
to the Business and have not had or resulted in, and cannot be reasonably
expected in the aggregate to have or result in, a material adverse effect.
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4.19. ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither Company, the
Stockholders, nor to the knowledge of Stockholders and the Company, any officer,
employee or agent of Company or any other person acting on their respective
behalf has, directly or indirectly, within the past five years, given or agreed
to give any gift or similar benefit to any customer, supplier, governmental
employee or other person who is or may be in a position to help or hinder the
Company (or assist Company in connection with any actual or proposed
transaction) which (i) might subject Company to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (ii) if not given in
the past, might have had a material adverse effect upon the Company, its
operations or financial condition, (iii) if not continued in the future, might
have a material adverse effect on the Company, its operations and financial
condition or subject Company to suit or penalty in any private or governmental
litigation or proceeding, or (iv) for any of the purposes described in Section
162(c) of the Internal Revenue Code of 1986, as amended (the "Code").
4.20. CORPORATE EXISTENCE. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of New Jersey
and has all requisite corporate power and authority to own or lease and operate
its properties and assets and to carry on its business as presently conducted.
The Company is duly qualified as a foreign corporation, and is in good standing,
in each jurisdiction listed on Schedule 4.20 hereto which are the only states
where the failure to be so qualified would have a material adverse effect on the
Business.
4.21. CERTIFICATE OF INCORPORATION AND BYLAWS. The Stockholders have
heretofore furnished to UBI complete and correct copies of the Company's
Certificate of Incorporation, as amended to date, certified by the Secretary of
State of the State of New Jersey, and the Company's bylaws, as currently in
effect.
4.22. SUBSIDIARIES. The Company has no subsidiaries, nor does it own,
directly or indirectly, any ownership, equity, profits or voting interest in any
corporation, partnership, joint venture or other person, and has no agreement or
commitment to purchase any such interest.
4.23. CAPITALIZATION. The authorized capital stock of the Company consists
of 1,000 shares of common stock, no par value, of which 1,000 shares are issued
and outstanding, all of which are owned of record and beneficially by
Stockholders. All such shares have been duly authorized and validly issued, are
fully paid and nonassessable, and were not issued in violation of
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any preemptive rights. The Stockholders hold the shares free and clear of any
Encumbrance, other than that certain Stockholder's Agreement dated April, 1994
(copies of which have been provided to UBI and its counsel) which shall be
terminated by all parties thereto prior to or upon the Closing. There is
outstanding no security, option, warrant, right, call, subscription, agreement,
commitment or understanding of any nature whatsoever, fixed or contingent, that
directly or indirectly (i) calls for the issuance, sale, pledge or other
disposition of any shares or of any other capital stock of the Company or any
securities convertible into, or other rights to acquire, any such shares or
other capital stock of the Company or (ii) obligates the Company or Stockholders
to grant, offer or enter into any of the foregoing or (iii) relates to the
voting or control of such shares, capital stock, securities or rights.
4.24. ACCOUNTS/NOTES RECEIVABLE. Accounts receivable reflected on the
Financial Statement, and all accounts receivable arising since the Statement
Date, and which remain uncollected, represent bona fide claims against debtors
for services performed or other charges arising on or before the date hereof,
and the services which gave rise to said accounts were performed in accordance
with the applicable orders, contracts or customer requirements. Such accounts
receivable are subject to no defenses, rights of setoff or counterclaims, and
have not been compromised by Stockholders or the Company and are fully
collectible within ninety (90) days of the Closing Date in the ordinary course
of business without cost to UBI in collection efforts therefore.
4.25 COMPANY'S BUSINESS
(a) Intentionally omitted.
(b) Except as set forth on Schedule 4.25(b) hereto, since December 31,
1997, no complaints have been asserted in writing by any of the parties with
which the Company has an agreement as set forth on Schedule 4.25(c) hereto (each
such party, a"Material Client") against the Company or its affiliates in respect
of any transactions involving, and any services provided by, the Company to any
Material Client which, if adversely settled or determined, would have an adverse
effect on the ability of the Company to execute and deliver this Agreement,
perform its obligations hereunder consummate the transactions contemplated
hereby or continue to conduct the Business. Except as set forth in Schedule
4.25(b) hereto, no Material Client has, at any time
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since December 31, 1997 canceled or otherwise terminated, or threatened or given
notice of its intention to cancel or otherwise terminate, its relationship with
the Company, or decreased, or threatened or given notice of its intention to
decrease, the level of transactions involving, and the level of services
provided by the Company. Except as set forth in Schedule 4.25(b), neither
Stockholders nor the Company have any knowledge or information that any Material
Client intends to cancel or otherwise terminate or to substantially reduce its
utilization of the services provided by the Company, either as a result of the
transactions contemplated hereby or otherwise.
(c) Schedule 4.25(c) here to sets forth a complete list of the sources
of funding used by the Company in the origination of mortgage loans. The Company
has provided UBI with copies of any agreements or understandings between the
Company and such parties regarding the funding and/or sale of mortgage loans.
The Company is not in default and to Stockholders' knowledge no condition exists
that with notice, or lapse of time, or both, would constitute a default under
any such agreement, and no party has given the Company notice that it will
substantially modify its relationship with the Company.
5. BUYER'S REPRESENTATIONS AND WARRANTIES
UBI hereby represents and warrants to, and agrees with, Stockholders and
the Company as follows:
5.1. AUTHORITY; BINDING EFFECT; ENFORCEABILITY. UBI is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware. The execution and delivery by UBI of this Agreement and all other
instruments and documents to be executed and delivered by UBI in connection
herewith (collectively, the "Ancillary UBI Documents") and the consummation by
UBI of the transactions contemplated herein and therein, have been duly and
validly authorized by Buyer's Board of Directors. This Agreement has been duly
and validly executed and delivered by UBI, and constitutes the valid and binding
obligation of UBI, enforceable against UBI in accordance with its terms, except
to the extent that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally. When duly and validly executed and delivered by
UBI, the Ancillary UBI Documents will constitute the valid and binding
obligation of UBI, enforceable against UBI in accordance with their respective
terms, except to the extent that
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enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally. UBI has all requisite corporate power and authority to enter
into this Agreement and all Ancillary UBI Documents, and to perform its
obligations hereunder and thereunder.
5.2. NO CONFLICTS. The execution and delivery by UBI of this Agreement and
any Ancillary UBI Documents, the consummation by UBI of the transactions
contemplated hereby and thereby, and compliance by UBI with any of the
provisions hereof and thereof will not (a) conflict with or result in a breach
of any provision of Buyer's Certificate of Incorporation or By-Laws, (b) with or
without the giving of notice or lapse of time or both, violate any (i) judgment,
order, writ or decree of any Court applicable to UBI or (ii) any Law to which
UBI is subject, or (c) result in the material breach, conflict, default, or
modification of or with any terms, provisions, covenant or condition of (or give
rise to any right of termination, cancellation, or acceleration under) the
provisions of any agreement, note, lien, mortgage, indenture, lease, or other
instrument or obligation by which UBI may be bound.
5.3. NO CONSENTS. Except as set forth on Schedule 5.3, no consent,
authorization or approval of, or filing with or exemption by any governmental,
public or self-regulatory body, authority or any other person is required to be
obtained by UBI in connection with the execution and delivery by UBI of this
Agreement or any Ancillary UBI Document, or the consummation by UBI of any of
the transactions contemplated hereby or thereby.
5.4. BROKERS OR FINDERS. Exhibit as provided under Section 8.8, no broker
or finder has been involved in this transaction on behalf of UBI and no party
will be obligated to pay any brokers' or finders' fees in connection with this
transaction as a consequence of any action or inaction on Buyer's part.
5.5 CAPITALIZATION. The capitalization of UBI, including the authorized
capital stock, the number of shares issued and outstanding, the number of shares
issuable and reserved for issuance pursuant to UBI's stock option plans, the
number of shares issuable and reserved for issuance pursuant to securities
exercisable or exchangeable for, or convertible into, any shares of capital
stock is set forth on Schedule 5.5 hereto. All of such outstanding shares of
capital stock have been, or upon issuance in accordance with the terms of any
such warrants, options or
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preferred stock, will be, validly issued, fully paid and non-assessable. No
shares of capital stock of UBI are subject to preemptive rights or any other
similar rights of the stockholders of UBI or any liens or encumbrances. Except
as disclosed on such Schedule 5.5, as of the Closing Date, there will be no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital stock
of UBI or any of its subsidiaries, or arrangements under which UBI or any of its
subsidiaries is or may become bound to issue additional shares of capital stock
of UBI or any of its subsidiaries, except such as may be required under any
agreement to which UBI or the Bank may be a party calling for the acquisition of
any stock, assets or business from any party, and which is entered into after
the date hereof. Except as set forth on Schedule 5.5, there are no securities or
instruments containing antidilution or similar provisions that will be triggered
by the issuance of the Common Stock in accordance with the terms of this
Agreement. The Company has furnished to the Stockholders true and correct copies
of UBI's Certificate of Incorporation as in effect on the date hereof
("Certificate of Incorporation"), UBI's By-laws as in effect on the date hereof
(the "By-Laws"), and all other instruments and agreements governing securities
convertible into or exercisable or exchangeable for capital stock of UBI.
5.6 ISSUANCE OF SHARES. The shares of Common Stock are duly authorized and,
upon issuance in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances created by UBI and will not be subject to preemptive rights or
other similar rights of stockholders of UBI and will not impose personal
liability on the holders thereof.
5.7 COMPLIANCE WITH NEW JERSEY PROVISIONS. Each of the UBI Parties has
complied, or will comply prior to Closing, in all respects will all applicable
provisions of New Jersey law in connection with the Merger.
6. COVENANTS OF THE PARTIES
6.1. COMMUNICATIONS. Except as may otherwise be required by law, rules and
regulations, Stockholders and the Company, on the one hand, and the UBI Parties,
on the other hand, shall not, without the prior written approval of the other:
(i) make any communication to any person (including, but not limited to, any
employees) regarding the subject matter and
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contents of this Agreement, or (ii) disclose the existence of this Agreement or
any of the terms hereof to any person. Stockholders acknowledge that UBI is a
publicly traded reporting company under the Securities Exchange Act of 1934, as
amended, and as such UBI has a legal obligation to disclose the terms of this
transaction. UBI agrees to confer with Stockholders regarding the form and
content of such public announcement.
6.2. BEST EFFORTS. The parties hereto shall each use their best efforts to
cause the fulfillment of the conditions set forth in Sections 8 and 9 prior to
the Closing.
6.3. BROTMAN FEE. UBI agrees to pay to Mr. Joel Brotman a fee of $28,000
for his services in connection with the origination of this transaction.
6.4 REPORTS UNDER THE EXCHANGE ACT. UBI agrees to:
(a) file with the SEC in a timely manner and make and keep available
all reports and other documents required of UBI under the Securities Act and the
Exchange Act in order to comply with the applicable provisions of Rule 144
promulgated under the Securities Act, or any other similar rule or regulation of
the SEC that may provide an exemption from the registration requirements with
respect to the public sale or resale of the Common Stock ("Rule 144"), for so
long as UBI remains subject to such requirements and the filing and availability
of such reports and other documents is required; and
(b) furnish to each Stockholder for so long as such Stockholder owns
shares of Common Stock, promptly upon request, (i) a written statement by UBI
that it has complied with the reporting requirements of Rule 144, the Securities
Act and the Exchange Act, (ii) a copy of the recent annual or quarterly report
of the UBI and such other reports and documents so filed by UBI, and (iii) such
other information as may be reasonably requested to permit the Stockholders to
sell such securities under Rule 144 without compliance with the registration
requirements of Section 5 of the Securities Act.
7. STOCKHOLDERS' AND COMPANY'S COVENANTS TO BE PERFORMED PRIOR TO THE CLOSING
7.1. ACCESS TO COMPANY'S PROPERTIES, BOOKS AND RECORDS; COOPERATION.
Between the date of this Agreement and the Closing, Stockholders and Company
shall (a) give UBI and its
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authorized representatives reasonable access to all facilities and properties of
Company and to the books and records of Company (and permit UBI to make copies
thereof), (b) cause Company's employees and its advisors (including, without
limitation, its auditors, attorneys, financial advisors and other consultants
and agents) to furnish UBI and its authorized representatives with such
financial and operating data and other information with respect to Company and
the Business (including, but not limited to, the work papers of Company's
independent certified public accountants relating to Company and its
affiliates), and to discuss with UBI and its authorized representatives the
affairs of Company, all as UBI may from time to time reasonably request;
provided, however that UBI and its duly authorized representative shall not
improperly disclose the same, (c) allow UBI and its authorized representatives
to have access to Company's customers, suppliers and other third parties and (d)
will permit UBI and its authorized representatives reasonable access to such
personnel of the Company during normal business hours as may be necessary or
useful to UBI in its review of the Company's properties, assets, or any Company
documents relating to any facility, for the purpose of performing an
environmental assessment.
7.2. UPDATING OF REPRESENTATIONS AND WARRANTIES
(a) Between the date of this Agreement and the Closing, Stockholders
and the Company shall give notice to UBI promptly upon becoming aware of (a) any
material inaccuracy in a representation or warranty set forth in Section 4 or in
any Schedule or (b) any event or state of facts which, if it had occurred or
existed on or prior to the date of this Agreement, would have caused any such
representation, warranty and/or Schedule to be materially inaccurate. Any such
notice shall describe such inaccuracy, event or state of facts in reasonable
detail. Any information included in any such notice shall constitute a
representation or warranty as though made by Stockholders and the Company in
Section 4 hereof but shall not affect the condition to Buyer's obligation
contained in Section 8 that the representations and warranties of Stockholders
and the Company shall be true on and as of the date they were made and as of the
Closing Date as though made at such time. In connection with any nonmaterial
matter arising or made known to Stockholders that, if existing or occurring or
known to them at or prior to the date of this Agreement, would have been
required to be set forth or described in the Disclosure Schedules or which is
necessary to correct any information in the Disclosure Schedules or in any
representation
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and warranty of Stockholders that has been rendered inaccurate thereby in
connection with any Disclosure Schedule prior to the Closing Date, Stockholders
shall provide to UBI an amended Disclosure Schedule in connection therewith on
the Closing Date.
(b) Upon the occurrence of any event or condition giving rise to the
obligation to give notice pursuant to Section 7.2(a) hereof, Stockholders and
the Company shall have, for the period beginning on such date and ending ten
days after that date upon which the Closing was otherwise to be held, the
opportunity to take any action necessary to cure the event or condition giving
rise to any inaccuracy in any representation or warranty set forth in Section 4
or any Schedule. If, after taking any such curative action during such period,
such representation or warranty shall no longer be inaccurate, the condition to
Buyer's obligation to close which is set forth in Section 8.1 shall be deemed to
have been fulfilled, and Stockholders shall have no liability for breach of such
representation or warranty under this Agreement.
(c) Any inaccuracy in the representations and warranties contained in
this Agreement shall be deemed waived by reason of the fact that UBI knew prior
to Closing that any such representation or warranty is inaccurate in any
material respect and failed to disclose such inaccuracy in writing to
Stockholders prior to the Closing Date. For purposes of this provision, a fact
shall only be deemed to be known by UBI if such fact is actually known to the
Chairman of the Board or President of UBI.
7.3. CONDUCT OF THE BUSINESS PRIOR TO CLOSING. From the date hereof to the
Closing, except as expressly called for by this Agreement or otherwise consented
to by UBI in writing, Stockholders will, or cause to the Company to:
(a)(i) carry on the Business in the usual and ordinary course in
substantially the same manner as heretofore conducted, (ii) not institute any
changes not in the ordinary course of business and consistent, where applicable,
with past practice, and (iii) use commercially reasonable efforts to preserve
intact in all material respects Company's present business organization, to
maintain, preserve and keep in full force and effect the existence, rights, and
franchises of the Company, to maintain the quality of services provided by
Company, to keep available the services of its present employees, and to
preserve good relationships with customers,
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suppliers, distributors and others having business dealings with Company, so
that they will be available to UBI after the Closing;
(b) continue to maintain in all material respects all of the assets
and properties of the Company in the manner heretofore maintained;
(c) keep in full force and effect its current insurance policies
covering the Company and the Business;
(d) continue to fulfill all of Company's obligations under all
material Contracts to which the Company is a party;
(e) maintain Company's books of account and records in the usual,
regular and ordinary manner including, without limitation, maintaining proper
accounting controls;
(f) comply with all Laws, ordinances, rules and regulations, the
violation of which would have a material adverse effect on the conduct of the
Business or the Company's assets, results of operations or prospects;
(g) not (i) grant any increase in the salary of any Employee except
normal wage or salary increases for Employees in the ordinary course of business
and consistent with past practice; (ii) by means of any bonus or pursuant to any
plan or arrangement or otherwise, increase by any amount the benefits or
compensation of any such Employee, provided, however, the Company shall be
permitted to pay to the Employees listed on Schedule 7.3(g) hereof, a one-time
retention bonus in the aggregate amount of $105,000, with each Employee listed
on Schedule 7.3(g) receiving a bonus in the amount set forth next to their name;
(h) maintain in full force and effect, by renewal if necessary, all of
the Permits disclosed on Schedule 4.13(b) hereto;
(i) not take, or permit or suffer to be taken, any action which is
represented and warranted in Section 4.7. hereof not to have been taken since
the Statement Date;
(j) not take, or permit of suffer to be taken, any action that would
cause or tend to cause the conditions upon the obligations of the parties hereto
to effect the transactions contemplated hereby not to be fulfilled; including,
without limitation, taking, causing to be taken, or permitting or suffering to
be taken or to exist any action, condition or thing that would cause
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the representations and warranties made in Article 4 herein not to be true,
correct and accurate as of the Closing;
(k) obtain all requisite approvals, Permits, waivers and consents from
governmental agencies and third parties for consummation of the transactions
contemplated hereby and required for the operation of the Business after the
Closing, and take all action necessary to keep the same in full force and effect
as of and after the Closing;
(l) not change its certificate of incorporation or bylaws or merge or
consolidate or obligate itself to do so with or into any other entity; or
(m) agree to take any action as set forth in items (a) through (l) of
this Section 7.3
7.4. NO SHOP. Between the date hereof and the Closing Date, no Stockholder
shall, directly or indirectly, through any advisor, agent or otherwise, except
in connection with the transaction contemplated hereby, and the Company shall
not, directly or indirectly, through any advisor, agent or otherwise (a)
solicit, initiate or encourage the submission of proposals or offers from any
person relating to any merger, acquisition or purchase of all or (other than in
the ordinary course of business) any portion of the assets of, or any equity
interest in, Company or any business combination involving Company (a
"Transaction"), or participate in any negotiation regarding, or otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other person to do or seek a Transaction, and (b)
except with the prior written consent of UBI, disclose, directly or indirectly,
to any person any information concerning Company's business and properties or
afford to any person access to the properties, books or records of Company.
Stockholders and Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any parties other than UBI conducted
heretofore with respect to any Transaction. Stockholders and Company shall
promptly notify UBI if any such proposal or offer, or any inquiry or contact
with any person with respect thereto, is made and shall, in any such notice to
UBI, indicate in reasonable detail the identity of the offerer and the terms and
conditions of any proposal or offer.
7.5. STOCKHOLDER MATTERS. Stockholders agree to take all such actions
required of them, as stockholders or directors of the Company, to effectuate the
Merger, including but not
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limited to promptly calling a meeting of shareholders of the Company to vote
upon the Merger and, as shareholders, to vote in favor of the Merger.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF UBI
The obligations of UBI under this Agreement are subject to the delivery of
the documents and other items set forth in Sections 3.2 and 3.4 and the
satisfaction, at or prior to the Closing Date, of each of the following
conditions, and Stockholders and the Company shall exert their best efforts to
cause each such condition to be so fulfilled:
8.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Stockholders and the Company contained in this Agreement shall be
true in all material respects on the date hereof and on and as of the Closing
Date with the same effect as if they were made on and as of the Closing Date.
8.2. PERFORMANCE OF AGREEMENTS. Stockholders and the Company shall have
performed in all material respects all obligations and agreements and complied
in all material respects with all covenants contained in this Agreement or in
any Ancillary Document to be performed and complied with or by Stockholder and
the Company on or before the Closing Date, unless expressly waived by UBI in
writing, including, by way of example and not by way of limitation, termination
of that certain Stockholders Agreement referenced under Section 2.3 hereof.
Stockholders shall provide UBI with written evidence of such termination.
8.3. LEGAL PROCEEDINGS. There shall be no law, and no order shall have been
entered and not vacated by a court or administrative agency of competent
jurisdiction in any litigation, which (a) enjoins, restrains, makes illegal or
prohibits consummation of the transactions contemplated hereby or by any
Ancillary Document, (b) requires separation of a significant portion of the
assets of the Company after the Closing or (c) restricts or interferes with, in
any material way, the operation of the Business after the Closing or materially
adversely affects the financial condition, results of operations, properties,
assets, business or prospects of the Company; and there shall be no Litigation
pending before a court or administrative agency of competent jurisdiction, or
threatened, seeking to do, or which, if successful, would have the effect of,
any of the foregoing.
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8.4. CONSENTS. There shall have been obtained (a) all Permits required for
the consummation of the transactions contemplated hereunder, and (b) all
consents to the assignment of the Contracts listed on Schedule 4.5(a) hereto,
all of which shall be in full force and effect. Any Encumbrance on any asset or
property of the Company shall have been discharged in full prior to or at the
Closing.
8.5. FINANCIAL CONDITION. From the Statement Date through the date of the
Closing, there shall not have been any material adverse change in the financial
condition, results of operations or business of the Company, whether or not
arising in the ordinary course of business.
8.6. EMPLOYMENT AGREEMENTS. Each of Habib, Hunter, Frankel and Paul Fitch
and Rob Meelheim (the "Key Employees") will have duly executed and delivered
employment agreements. Except for each of the Stockholders, UBI shall have the
right, but not the obligation, from and after the Closing Date, to continue to
offer "at will" employment to personnel employed by the Company on the Closing
Date, on the terms and conditions acceptable to UBI.
8.7. APPROVALS. UBI shall have obtained all necessary governmental or
regulatory approvals to permit Bank to acquire the Stock and operate the Company
as an operating subsidiary under New Jersey law and the regulations of the New
Jersey Department of Banking and Insurance, and to conduct the Business. In
addition, UBI shall have obtained the approvals of all necessary regulatory
authorities to the transfer of ultimate ownership of those Permits listed on
Schedule 4.13(b) hereto, and no such approvals shall contain conditions which
would materially affect value of the Company to the UBI or materially affect the
operation of the Business after consummation of the transactions contemplated
herein.
8.8. TRANSACTION REDATED EXPENSES. Merger related expenses incurred by the
Company or for which the Company may be liable, including specifically legal and
other professional fees and the Company's share of the fee owed to Joel Brotman,
shall not exceed $78,000.
8.9. POOLING-OF-INTERESTS ACCOUNTING. UBI shall have received from Arthur
Andersen, LLP, its independent auditors, an opinion that the Merger will be
accounted for under the pooling-of-interests method of accounting. UBI
represents to Stockholders that it knows of no reason why the proposed Merger
should not qualify for pooling-of-interests accounting or, upon
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the reissuance of certain shares by UBI, cannot be made to qualify for
pooling-of-interests treatment. In the event that the Merger will not qualify
for pooling-of-interests treatment for any reason other than a change of policy,
procedure or regulation regarding pooling-of-interests accounting treatment by
the Securities and Exchange Commission or the Financial Accounting Standards
Board and UBI elects to terminate this Agreement, UBI shall pay to the
Stockholders their actual out-of-pocket expenses incurred in connection with the
Merger, up to the maximum amount of $50,000. Stockholders shall provide UBI with
a written account of such expenses, and UBI shall pay such expenses within 10
days of the receipt of such written accounting.
9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF STOCKHOLDERS AND THE COMPANY
The obligations of Stockholders and the Company under this Agreement are
subject to the delivery of the documents and other items set forth in Sections
3.3 and 3.4 and the satisfaction, at or prior to the Closing, of each of the
following conditions, and UBI shall exert its best efforts to cause each such
condition to be so fulfilled:
9.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of UBI contained in this Agreement or in any Ancillary UBI Document
shall be true in all material respects on and as of the Closing Date with the
same effect as if they were made on and as of the Closing Date, except (i) as
affected by the transactions contemplated hereby, and (ii) that any such
representation and warranty made as of a specified date (other than the Closing
Date) shall be true and correct in all material respects when made and as of the
Closing Date.
9.2. PERFORMANCE OF AGREEMENTS. UBI shall have performed in all material
respects all obligations and agreements and complied in all material respects
with all covenants contained in this Agreement or in any Ancillary UBI Document
to be performed and complied with by it on or before the Closing Date, unless
waived by Stockholders and the Company.
9.3. LEGAL PROCEEDINGS. There shall be no Law and no order shall have been
entered and not vacated by a court or administrative agency of competent
jurisdiction in any Litigation, which enjoins, restrains, makes illegal or
prohibits consummation of the transactions contemplated hereby or by any
Ancillary Document; and there shall be no Litigation pending
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before a court or administrative agency of competent jurisdiction, or
threatened, seeking to do, or which, if successful, would have the effect of,
any of the foregoing.
10. INDEMNIFICATION
10.1. LOSSES. For purposes of this Agreement, the terms "Loss" or "Losses"
shall mean each and all of the following items, namely, claims, losses,
liabilities, damages, fines, penalties, costs and expenses (including, without
limitation, interest which may be imposed in connection therewith), reasonable
fees and disbursements of counsel and other experts, and the cost to the person
seeking indemnification (the "Indemnitee") of any funds expended by reason of
the occurrence of any of the events enumerated in Section 10.2 hereof or
incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof or in enforcing the provisions of this Agreement or any
Ancillary Document.
10.2. INDEMNIFICATION
(a) Subject to the limitations set forth in Section 10.3 below, and in
accordance with the procedures set forth in Section 10.4 (if applicable),
Stockholders shall jointly and severally indemnify UBI against and hold it
harmless from, and shall not assert any claim of liability against UBI for, any
and all actual Losses resulting from or arising out of: (i) any inaccuracy in or
breach of any representation or warranty made by Stockholders in this Agreement
or in any Ancillary Document, (ii) any non-fulfillment or breach or default in
the performance by Stockholders of any of the covenants or agreements made by
Stockholders herein or in any Ancillary Document; (iii) any liability
(including, without limitation, Environmental Liabilities of the Business) of
Company or Stockholders, including any liability arising out of the ownership of
the Company or conduct of the Business prior to the Closing; and (iv) any
failure by Stockholders to deliver the Stock to UBI free and clear of all
Encumbrances.
(b) Subject to the limitations set forth in Section 10.3 below, and in
accordance with the procedures set forth in Section 10.4 (if applicable), UBI
shall indemnify Stockholders against any and all Losses resulting from or
arising out of: (i) any inaccuracy in or breach of any representation or
warranty made by UBI in this Agreement or in any Ancillary Document, and (ii)
any non-fulfillment or breach or default in the performance by UBI of any of the
covenants or agreements made by UBI herein or in any Ancillary Document.
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10.3 LIMITATIONS. The indemnification for breaches of representations or
warranties provided for in subsections 10.2(a)(i) and 10.2(b)(i) shall be
limited as follows:
(i) Stockholders shall not be required to indemnify UBI under this
Section 10, and UBI shall not be required to indemnify Stockholders under this
Section 10, unless the aggregate amount for which indemnity would otherwise be
required hereunder exceeds $300,000 (the "Indemnification Basket"), in which
case Stockholders or UBI, as the case may be, shall be responsible for all such
indemnifiable amounts due pursuant to this Section 10 in excess of the
Indemnification Basket, up to a maximum amount equal to the Purchase Price (the
"Indemnification Cap"). The indemnification obligation of any party hereto shall
be satisfied through a cash payment to the party seeking indemnification, but
the aggregate indemnification obligation of the Stockholders, on the one hand or
UBI, on the other, shall in no event exceed the Purchase Price.
(ii) Any indemnifiable liability or reimbursement under this Section
10 shall be limited to the amount of actual damages (of any nature) subject to
indemnification actually sustained by a party hereto, net of any applicable
insurance payments actually received, other reimbursement or tax benefit
actually realized by such party.
(iii) If an Indemnifying Party (as such term is defined in Section
10.4 hereof) has indemnified an Indemnified Party(as such term is defined in
Section 10.4 hereof) pursuant to this Agreement, the Indemnifying Party shall be
subrogated to the rights of the Indemnified Party in respect of the matter as to
which the indemnity related and may pursue the same at the Indemnifying Party's
expense. If an Indemnified Party obtains a recovery of all or any part of any
amount that an Indemnifying Party has paid to such Indemnified Party or which an
Indemnifying Party has reimbursed an Indemnified Party, such Indemnified Party
shall promptly pay or cause to be paid to the Indemnifying Party an amount equal
to such recovery.
(iv) After the Closing, Article 10 shall provide the exclusive remedy
for any misrepresentation or breach of warranty, covenant or any Ancillary
Agreement or other claim arising out of this Agreement.
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10.4. PROCEDURE
(a) If a claim by a third party is made against a party hereto (an
"Indemnified Party"), and if an Indemnified Party intends to seek indemnity with
respect thereto under this Section 10, the Indemnified Party shall promptly
notify the party required to indemnify the Indemnified Party pursuant to this
Section 10 (an "Indemnifying Party") of such claim (the "Indemnity Notice");
provided, however, that failure by an Indemnified Party to notify an
Indemnifying Party of such claim shall not effect the Indemnified Party's right
to seek indemnification so long as the Indemnifying Party is not materially
prejudiced by such failure to have been notified of such claim. The Indemnifying
Party shall have ten (10) days after receipt of the Indemnity Notice to
undertake, conduct and control, through counsel of its own choosing and at its
expense, but reasonably acceptable to the Indemnified Party, the settlement or
defense thereof, and the Indemnified Party shall cooperate with it in connection
therewith; provided, however, that with respect to settlements entered into by
the Indemnifying Party, the Indemnifying Party shall obtain the release of the
claiming party in favor of the Indemnified Party. If the Indemnifying Party
undertakes, conducts and controls the settlement or defense of such claim, the
Indemnifying Party shall permit the Indemnified Party to participate in such
settlement or defense through counsel chosen by the Indemnified Party, providing
that the fees and expenses of such counsel shall be borne by the Indemnified
Party. With respect to indemnification provided for hereunder, the Indemnified
Party shall not pay or settle any such claim so long as the Indemnifying Party
is reasonably contesting any such claim in good faith. Notwithstanding the
immediately preceding sentence, the Indemnified Party shall have the right to
pay or settle any such claims, provided that in such event it shall waive any
right to indemnity therefor by the Indemnifying Party.
(b) Subject to the limitations set forth in Section 10.03 hereof, if
the Indemnifying Party does not notify the Indemnified Party within fifteen (15)
days after the receipt of the Indemnified Party's notice of a claim of indemnity
hereunder that it elects to undertake the defense thereof, the Indemnified Party
shall have the right to contest, settle or compromise the claim in the exercise
of its good faith reasonable judgment at the expense of the Indemnifying Party
subject to the other terms and provisions of this Section 10.
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10.5 LIABILITY OF STOCKHOLDERS. Notwithstanding anything contained in this
Agreement to the contrary, the obligation of each of Frankel and Hunter to
indemnify UBI hereunder shall be several but not joint, with each of Frankel and
Hunter being liable for a maximum amount equal to a fraction, the numerator of
which shall equal the total portion of the Purchase Price that has then been
received by each of Frankel or Hunter, as the case may be, pursuant to Section 2
hereof and the denominator of which shall equal the total amount of the Purchase
Price paid pursuant to Section 2 hereof that has then been received by all of
the stockholders. Nothing contained in this provision shall effect the
indemnification obligation of Habib, who shall be fully liable for any and all
indemnification obligations owed by Stockholders to UBI hereunder.
11. TERMINATION
11.1. IN GENERAL. This Agreement may be terminated at any time prior to the
Closing Date:
(1) by either Stockholders or UBI by written notice to the other party
if the Closing shall not have occurred by 5:00 P.M. eastern time on April 30,
1999, unless such date shall be extended by the mutual written consent of
Stockholders and UBI and further provided that the party seeking to terminate
the Agreement shall not be in default of any covenant, agreement or condition
hereunder;
(2) by UBI by written notice to Stockholders and the Company, if (i)
the representations and warranties of Stockholders shall not have been true and
correct in all material respects (in the case of any representation or warranty
containing any materiality qualification) or in all respects (in the case of any
representation or warranty without any materiality qualification) as of the date
when made or (ii) if any of the conditions set forth in Section 8 shall not have
been, or if it becomes apparent that any of such conditions will not be
fulfilled or waived by 5:00 P.M., eastern time on April 30, 1999, unless such
failure shall be due to the failure of UBI to perform or comply with any of the
covenants, agreements or conditions hereof to be performed or complied with by
it prior to the Closing; or
(3) by Stockholders by written notice to UBI if (i) the
representations and warranties of UBI shall not have been true and correct in
all material respects (in the case of any
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representation or warranty containing any materiality qualification) or in all
respects (in the case of any representation or warranty without any materiality
qualification) as of the date when made or (ii) if any of the conditions set
forth in Section 9 shall not have been, or if it becomes apparent that any of
such conditions will not be, fulfilled or waived by 5:00 P.M. eastern time on
April 30, 1999, unless such failure shall be due to the failure of any Company
to perform or comply with any of the covenants, agreements or conditions hereof
to be performed or complied with by it prior to the Closing.
11.2. EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to the provisions of Section 11.1, this Agreement shall
become null and void and have no force and effect, without any liability to any
party in respect hereof or of the transactions contemplated hereby on the part
of any party hereto, or any of its directors, officers, employees, agents,
consultants, representatives, advisers, stockholders or affiliates, except for
any liability resulting from such party's breach of this Agreement provided that
if such termination shall result from the (i) failure to perform a covenant of
this Agreement or (ii) breach by any party hereto of any representation or
warranty or agreement contained herein, such party shall be fully liable for any
and all actual Losses incurred or suffered by any other party as a result of
such failure or breach.
12. MISCELLANEOUS
12.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties hereto agree
that the representations and warranties contained in this Agreement or in any
Ancillary Document shall survive the Closing for a period of one (1) year.
Anything to the contrary in this Section 12.1 notwithstanding, (i) any
representation or warranty which survives the Closing pursuant hereto shall
survive the time it would otherwise terminate pursuant to this Section 12.1 if
notice of the breach or violation or possible breach or violation thereof giving
rise to a right or a possible right to indemnification shall have been given to
the other party, prior to such time; and (ii) each party's right to
indemnification for the other party's fraudulent misrepresentations or breaches
of warranty shall survive without limitation as to time. Other than as provided
under Section 7.2(c) hereof, all such representations and warranties shall be
binding regardless of any investigation made at any time by the parties.
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<PAGE>
12.2. FURTHER ASSURANCES. The parties hereto agree that each will
execute and deliver to the other any and all documents in addition to those
expressly provided for herein that may be necessary or appropriate to (a) vest
in UBI title to and possession of the Stock, and (b) otherwise carry out the
provisions of this Agreement and each of the Ancillary Documents, whether
before, at, or after the Closing. Stockholders further agree that at any time
and from time to time after the Closing, it will execute and deliver to UBI such
further conveyances, assignments, or other written assurances as UBI may
reasonably request.
12.3. NOTICES. Any and all notices, demands or requests required or
permitted to be given under this Agreement shall be given in writing and sent,
(i) by registered or certified U.S. mail, return receipt requested, (ii) by
hand, (iii) by overnight courier or (iv) by telecopier, addressed to the parties
hereto at their addresses set forth above or such other addresses as they may
from time-to-time designate by written notice, given in accordance with the
terms of this Section, together with copies thereof as follows:
If to UBI, to:
Unity Bancorp, Inc.
64 Old Route 22
Clinton, New Jersey
Attention: Chairman
Fax: (908) 730-8781
With a copy to:
Jamieson, Moore, Peskin & Spicer, P.C.
177 Madison Avenue
Morristown, New Jersey 07960
Attention: Robert A. Schwartz, Esq.
Fax: (973) 984-9549
If to Stockholders, to:
Barry Habib
1 Brittany Drive
Colts Neck, New Jersey 07722
Fax: [NUMBER]
Craig Frankel
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<PAGE>
51 Rustic Way
Freehold, New Jersey 07728
Fax: [NUMBER]
Norman Hunter
24 Linda Drive
Jackson, New Jersey 08527
Fax: [NUMBER]
With a copy to:
Zukerman Gore & Brandeis, LLP
900 Third Avenue, 8th Floor
New York, N.Y. 10022
Attention: Nathaniel S. Gore, Esq.
Fax: (212) 223-6433
Notices given as provided in this Section shall be deemed effective: (i) on
the date hand delivered, (ii) on the first business day following the sending
thereof by overnight courier, (iii) on the seventh calendar day (or, if it is
not a business day, then the next succeeding business day thereafter) after the
depositing thereof into the exclusive custody of the U.S. Postal Service and
(iv) on the date telecopied, provided that a copy of the notice is also sent by
overnight courier or U.S. mail.
12.4. EXPENSES. Each party shall bear and be solely responsible for all
expenses incurred by it in connection with and incident to the negotiation and
preparation of this Agreement and the Ancillary Documents and the consummation
of the transactions contemplated herein and therein, whether or not such
transactions are consummated as contemplated herein.
12.5. ENTIRE AGREEMENT; MODIFICATION AND WAIVER. This Agreement (including
the Exhibits attached hereto, the Schedules, and the Ancillary Documents) sets
forth the entire agreement between the parties relating to the subject matter
hereof and supersedes all prior negotiations and writings between the parties.
This Agreement and each Ancillary Document may be modified or amended only by a
writing executed by all the parties affected by such modification or amendment;
and compliance with the terms and conditions hereof or thereof may
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<PAGE>
be waived only by a writing signed by the party or parties entitled to the
benefit of such term or condition.
12.7. BINDING EFFECT. This Agreement and each Ancillary Document shall be
binding upon and shall inure to the benefit of each corporate party hereto, its
successors and assigns, and each individual party hereto and his heirs, personal
representatives, successors and assigns.
12.8. SCHEDULES; EXHIBITS. The Schedules and the Exhibits attached hereto
are an integral part of this Agreement as if fully re-written herein. In the
event that any matter might properly be disclosed on more than one Schedule,
such matter, if adequately disclosed on any applicable Schedule, shall be deemed
to have been disclosed for purposes of all other applicable Schedules if each
such applicable Schedule contains a specific cross-reference to the matter.
12.9. HEADINGS. The section and paragraph headings in this Agreement and in
each Ancillary Document have been inserted solely for convenience of reference
and do not themselves constitute a part of this Agreement or such Ancillary
Document.
12.10. COUNTERPARTS. This Agreement and each Ancillary Document may be
executed in two or more counterparts, all of which when taken together shall
constitute one and the same instrument.
12.11. GOVERNING LAW. This Agreement and each Ancillary Document shall be
governed by and construed in accordance with the laws of the State of New Jersey
applicable to contracts made and to be wholly performed within such state.
12.12. ASSIGNMENT. No assignment by any party of this Agreement or any
Ancillary Document or any right or obligation hereunder or thereunder may be
made without the prior written consent of the other party; provided, however,
that UBI may assign its rights and obligations hereunder or thereunder to any
corporation, one hundred percent of the issued and outstanding stock of which is
owned, directly or indirectly, by UBI.
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<PAGE>
12.13. NO THIRD PARTY BENEFICIARIES
Nothing contained in this Agreement or in any Ancillary Document shall
create or be deemed to create any rights or benefits in any third parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
STOCKHOLDERS:
--------------------------------------------------
BARRY HABIB
--------------------------------------------------
NORMAN HUNTER
--------------------------------------------------
CRAIG FRANKEL
CERTIFIED MORTGAGE ASSOCIATES, INC.
By: ______________________________________________
BARRY HABIB, President
UNITY BANCORP, INC.
By:_______________________________________________
Name: ROBERT J. VAN VOLKENBURGH
Title: Chairman and Chief Executive Officer
Page 50 of 53
EXHIBIT 2(II)
AMENDMENT AGREEMENT
This Amendment Agreement is made and entered into as of this 18th day of
February, 1999 by and among CERTIFIED MORTGAGE ASSOCIATES ("Company"), BARRY
HABIB ("Habib"), NORMAN HUNTER ("Hunter") and CRAIG FRANKEL ("Frankel")
(collectively, "Stockholders"), UNITY BANCORP, INC., a Delaware corporation
("UBI"), and FIRST COMMUNITY BANK (the "Bank").
WHEREAS, the parties hereto are parties to that certain Agreement and Plan
of Merger dated as of December 11, 1998 (the "Merger Agreement");
WHEREAS, the parties hereto have determined that it is in their mutual best
interests to Merger Agreement amend certain of the terms and conditions
contained in the Merger Agreement.
NOW, THEREFORE, in consideration of their representations, warranties and
mutual promises contained herein, the parties hereto agree to amend the Merger
Agreement as follows:
1. Section 1.6 of the Merger Agreement is hereby deleted in its
entirety.
2. Section 2.1 of the Merger Agreement is hereby deleted in its
entirety, and replaced with the following:
"2.1 -- Aggregate Consideration. In consideration for the Merger,
UBI shall pay an amount equal to the sum of $2,800,000 (the "Purchase
Price"). The Purchase Price shall be paid as follows: $1,700,000 will
be paid in cash (the "Cash Purchase Price") and $1,100,000 (the "Stock
Purchase Price") shall be paid in shares of common stock, no par value
of UBI (the "Common Stock"). In calculating the aggregate number of
shares of common stock to which Stockholders shall be entitled in
satisfaction of the Stock Purchase Price, the Stock Purchase Price
will be divided by the fair market value of the Common Stock
determined by the average of the bid and asked price of the Common
Stock for the first 20 trading days in thirty (30) days prior to
closing of the transactions contemplated hereby. Upon the Closing
Date, each outstanding shall of stock shall be converted into the
right to receive a proportionate share of the Cash Purchase Price and
the Stock Purchase Price."
3. Section 3.3(e) of the Merger Agreement is deleted in its entirety,
and replaced with the following: "(e) The Cash Purchase Price by wire, bank
check or other next day funds."
4. Section 3.4 of the Merger Agreement is deleted in its entirety.
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5. Section 8.9 of the Merger Agreement is deleted in its entirety.
6. Except as provided herein, all the terms and conditions of the
Merger Agreement shall remain in full force and effect, unchanged from the
date of the Merger Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Agreement of this 18th day of February, 1999.
STOCKHOLDERS:
-------------------------------------------
BARRY HABIB
-------------------------------------------
NORMAN HUNTER
-------------------------------------------
CRAIG FRANKEL
CERTIFIED MORTGAGE ASSOCIATES, INC.
By:________________________________________
BARRY HABIB, President
UNITY BANCORP, INC.
By:________________________________________
ROBERT J. VAN VOLKENBURGH
Chairman and Chief Executive Officer
Page 52 of 53
