Exhibit 10.1

 

Execution Copy

 

UNITY BANCORP, INC.

 

Common Stock
(no par value per share)

 

At Market Issuance Sales Agreement

 

December 1, 2016

 

Keefe, Bruyette & Woods, Inc.

787 Seventh Avenue

4th Floor

New York, New York 10019

 

Ladies and Gentlemen:

 

Unity Bancorp, Inc., a New Jersey corporation (the “Company”), confirms its
agreement (this “Agreement”), with Keefe, Bruyette & Woods, Inc. (“KBW”) or (the
“Distribution Agent”) as follows:

 

1.                                Issuance and Sale of Shares. The Company
agrees that, from time to time during the term of this Agreement, on the terms
and subject to the conditions set forth herein, it may issue and sell through
the Distribution Agent, shares (the “Placement Shares”) of the Company’s voting
common stock, no par value per share (the “Common Stock”), provided however,
that in no event shall the Company issue or sell through the Distribution Agent
such number of Placement Shares that (a) exceeds the dollar value of company
securities registered on, but not yet sold and issued under, the effective
Registration Statement (as defined below) pursuant to which the offering of the
Placement Shares is being made, or (b) exceeds the number of authorized but
unissued shares of Common Stock (the lesser of (a) and (b), the “Maximum
Amount”). Notwithstanding anything to the contrary contained herein, the parties
hereto agree that compliance with the limitations set forth in this Section 1 on
the number of Placement Shares issued and sold under this Agreement shall be the
sole responsibility of the Company and that the Distribution Agent shall have no
obligation in connection with such compliance. The issuance and sale of
Placement Shares through the Distribution Agent will be effected pursuant to the
Registration Statement (as defined below), although nothing in this Agreement
shall be construed as requiring the Company to use the Registration Statement to
issue any Placement Shares.

 

The Company has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (the “Securities
Act”), with the Securities and Exchange Commission (the “Commission”), a
registration statement on Form S-3 (File No. 333-214192), including a base
prospectus, relating to certain securities, including the Placement Shares to be
issued from time to time by the Company, and which incorporates by reference
documents that the Company has filed or will file in accordance with the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the “Exchange Act”). The Company has prepared a
prospectus supplement to the base prospectus included as part of such
registration statement specifically relating to the Placement Shares (the
“Prospectus Supplement”). The Company will furnish to the Distribution Agent,
for use by the Distribution Agent, copies of the base prospectus included as
part of such registration statement,

 

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as supplemented by the Prospectus Supplement, relating to the Placement Shares.
Except where the context otherwise requires, such registration statement,
including all documents filed as part thereof or incorporated by reference
therein, and including any information contained in a Prospectus (as defined
below) subsequently filed with the Commission pursuant to Rule 424(b) under the
Securities Act or deemed to be a part of such registration statement pursuant to
Rule 430B of the Securities Act, is herein called the “Registration Statement.” 
The base prospectus, including all documents incorporated or deemed incorporated
therein by reference to the extent such information has not been superseded or
modified in accordance with Rule 412 under the Securities Act (as qualified by
Rule 430B(g) of the Securities Act), included in the Registration Statement, as
it may be supplemented by the Prospectus Supplement, in the form in which such
base prospectus and/or Prospectus Supplement have most recently been filed by
the Company with the Commission pursuant to Rule 424(b) under the Securities
Act, is herein called the “Prospectus.” Any reference herein to the Registration
Statement, the Prospectus or any amendment or supplement thereto shall be deemed
to refer to and include the documents incorporated or deemed to be incorporated
by reference therein, and any reference herein to the terms “amend,” “amendment”
or “supplement” with respect to the Registration Statement or the Prospectus
shall be deemed to refer to and include the filing after the execution hereof of
any document with the Commission deemed to be incorporated by reference therein
(the “Incorporated Documents”).

 

For purposes of this Agreement, all references to the Registration Statement,
the Prospectus or to any amendment or supplement thereto shall be deemed to
include the most recent copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System, or if applicable, the
Interactive Data Electronic Application system when used by the Commission
(collectively, “EDGAR”).

 

2.                                Placements. Each time that the Company wishes
to issue and sell Placement Shares hereunder (each, a “Placement”), it will
notify the Distribution Agent by email notice (or other method mutually agreed
to in writing by the Parties) of the number of Placement Shares, the time period
during which sales are requested to be made, any limitation on the number of
Placement Shares that may be sold in any one day and any minimum price below
which sales may not be made (a “Placement Notice”), the form of which is
attached hereto as Schedule 1. The Placement Notice shall originate from any of
the individuals from the Company set forth on Schedule 3 (with a copy to each of
the other individuals from the Company listed on such schedule), and shall be
addressed to each of the individuals from the Distribution Agent set forth on
Schedule 3, as such Schedule 3 may be amended from time to time. Provided that
the Company is otherwise in compliance with the terms of this Agreement, the
Placement Notice shall be effective immediately upon receipt by the Distribution
Agent unless and until (i) the Distribution Agent declines to accept the terms
contained therein for any reason, in its sole discretion, (ii) the entire amount
of the Placement Shares thereunder has been sold, (iii) the Company suspends or
terminates the Placement Notice or (iv) this Agreement has been terminated under
the provisions of Section 13. The amount of any discount, commission or other
compensation to be paid by the Company to the Distribution Agent in connection
with the sale of the Placement Shares shall be calculated in accordance with the
terms set forth in Schedule 2. It is expressly acknowledged and agreed that
neither the Company nor the Distribution Agent will have any obligation
whatsoever with respect to a Placement or any Placement Shares unless and until
the Company delivers a Placement Notice to the Distribution Agent and the
Distribution Agent does not decline such Placement Notice pursuant to the terms

 

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set forth above, and then only upon the terms specified therein and herein. In
the event of a conflict between the terms of Sections 2 or 3 of this Agreement
and the terms of a Placement Notice, the terms of the Placement Notice will
control.

 

3.                                Sale of Placement Shares by the Distribution
Agent.

 

a.                                      Subject to the terms and conditions of
this Agreement, for the period specified in a Placement Notice, the Distribution
Agent will use its commercially reasonable efforts consistent with its normal
trading and sales practices and applicable state and federal laws, rules and
regulations and the rules of the Nasdaq Stock Market (“Nasdaq”), to sell the
Placement Shares up to the amount specified in, and otherwise in accordance with
the terms of, such Placement Notice. The Distribution Agent will provide written
confirmation to the Company no later than the opening of the Trading Day (as
defined below) immediately following the Trading Day on which it has made sales
of Placement Shares hereunder setting forth the number of Placement Shares sold
on such day, the compensation payable by the Company to the Distribution Agent
pursuant to Section 2 with respect to such sales, and the Net Proceeds (as
defined below) payable to the Company, with an itemization of the deductions
made by the Distribution Agent (as set forth in Section 5(b)) from the gross
proceeds that it receives from such sales. Subject to the terms of a Placement
Notice, the Distribution Agent may sell Placement Shares by any method permitted
by law deemed to be an “at the market offering” as defined in Rule 415 of the
Securities Act, including without limitation sales made directly on the Nasdaq,
on any other existing trading market for the Common Stock or to or through a
market maker. Subject to the terms of a Placement Notice, the Distribution Agent
may also sell Placement Shares by any other method permitted by law, including
but not limited to negotiated transactions, with the Company’s consent. “Trading
Day” means any day on which Common Stock is purchased and sold on the Nasdaq.

 

4.                                Suspension of Sales. The Company or the
Distribution Agent may, upon notice to the other party in writing (including by
email correspondence to each of the individuals of the other party set forth on
Schedule 3, if receipt of such correspondence is actually acknowledged by any of
the individuals to whom the notice is sent, other than via auto-reply) or by
telephone (confirmed immediately by verifiable facsimile transmission or email
correspondence to each of the individuals of the other party set forth on
Schedule 3), suspend any sale of Placement Shares; provided, however, that such
suspension shall not affect or impair any party’s obligations with respect to
any Placement Shares sold hereunder prior to the receipt of such notice. Each of
the parties agrees that no such notice under this Section 4 shall be effective
against any other party unless it is made to one of the individuals named on
Schedule 3 hereto, as such Schedule may be amended from time to time. During the
period of any such suspension, the Company shall have no obligations under
Section 7(l), Section 7(m) and Section 7(n).

 

5.                                Sale and Delivery to Distribution Agent;
Settlement.

 

a.                                      Sale of Placement Shares. On the basis
of the representations and warranties herein contained and subject to the terms
and conditions herein set forth, upon the Distribution Agent’s acceptance of the
terms of a Placement Notice, and unless the sale of the Placement Shares
described therein has been declined, suspended, or otherwise terminated in
accordance with the terms of this Agreement, the Distribution Agent, for the
period specified in the Placement Notice, will use its commercially reasonable
efforts consistent with its normal

 

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trading and sales practices and applicable law to sell such Placement Shares up
to the amount specified in, and otherwise in accordance with the terms of, such
Placement Notice. The Company acknowledges and agrees that (i) there can be no
assurance that the Distribution Agent will be successful in selling Placement
Shares, (ii) the Distribution Agent will incur no liability or obligation to the
Company or any other person or entity if it does not sell Placement Shares for
any reason other than a failure by the Distribution Agent to use its
commercially reasonable efforts consistent with its normal trading and sales
practices and applicable law and regulations to sell such Placement Shares as
required under this Agreement and (iii) the Distribution Agent shall be under no
obligation to purchase Placement Shares on a principal basis pursuant to this
Agreement, except as otherwise agreed by the Distribution Agent and the Company.

 

b.                                      Settlement of Placement Shares. Unless
otherwise specified in the applicable Placement Notice, settlement for sales of
Placement Shares will occur on the third (3rd) Trading Day (or such earlier day
as is industry practice for regular-way trading) following the date on which
such sales are made (each, a “Settlement Date”). The amount of proceeds to be
delivered to the Company on a Settlement Date against receipt of the Placement
Shares sold (the “Net Proceeds”) will be equal to the aggregate sales price
received by the Distribution Agent, after deduction for (i) the Distribution
Agent’s commission, discount or other compensation for such sales payable by the
Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed by
any governmental or self-regulatory organization in respect of such sales.

 

c.                                       Delivery of Placement Shares. On or
before each Settlement Date, the Company will, or will cause its transfer agent
to, electronically transfer the Placement Shares being sold by crediting the
Distribution Agent’s or its designee’s account (provided the Distribution Agent
shall have given the Company written notice of such designee at least one
Trading Day prior to the Settlement Date) at The Depository Trust Company
through its Deposit and Withdrawal at Custodian System or by such other means of
delivery as may be mutually agreed upon by the parties hereto which in all cases
shall be freely tradable, transferable, registered shares in good deliverable
form. On each Settlement Date, the Distribution Agent will deliver the related
Net Proceeds in same day funds to an account designated by the Company on, or
prior to, the Settlement Date. The Company agrees that if the Company, or its
transfer agent (if applicable), defaults in its obligation to deliver Placement
Shares on a Settlement Date, then in addition to and in no way limiting the
rights and obligations set forth in Section 11(a) hereto, it will (i) hold the
Distribution Agent harmless against any loss, claim, damage, or reasonable,
documented expense (including reasonable and documented legal fees and
expenses), as incurred, arising out of or in connection with such default by the
Company or its transfer agent (if applicable) and (ii) pay to the Distribution
Agent (without duplication) any commission, discount, or other compensation to
which it would otherwise have been entitled absent such default.  The
Distribution Agent agrees that if the Distribution Agent breaches this Agreement
by failing to deliver the applicable Net Proceeds on any Settlement Date for
Placement Shares delivered by the Company, the Distribution Agent will pay the
Company interest based on the effective overnight federal funds rate plus two
(2.00) percentage points until such proceeds, together with such interest, have
been fully paid.

 

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d.                                      Limitations on Offering Size. Under no
circumstances shall the Company cause or request the offer or sale of any
Placement Shares if, after giving effect to the sale of such Placement Shares,
the aggregate number of Placement Shares sold pursuant to this Agreement would
exceed the lesser of (A) together with all sales of Placement Shares under this
Agreement, the Maximum Amount and (B) the amount authorized from time to time to
be issued and sold under this Agreement by the Company’s board of directors, a
duly authorized committee thereof or a duly authorized executive committee, and
notified to the Distribution Agent in writing.  Under no circumstances shall the
Company cause or request the offer or sale of any Placement Shares pursuant to
this Agreement at a price lower than the minimum price authorized from time to
time by the Company’s board of directors, a duly authorized committee thereof or
a duly authorized executive committee, and notified to the Distribution Agent in
writing.

 

e.                                       Alternative Arrangements. If the
Company wishes to issue and sell the Common Stock other than as set forth in
Section 3 of this Agreement (an “Alternative Placement”), it will notify the
Distribution Agent of the proposed terms of such Alternative Placement. If the
Distribution Agent, acting as principal or agent, wishes to accept such proposed
terms (which it may decline to do for any reason in its sole discretion) or,
following discussions with the Company wishes to accept amended terms, the
Distribution Agent and the Company will enter into a terms agreement, setting
forth the terms of such Alternative Placement. The terms set forth in such terms
agreement will not be binding on the Company or the Distribution Agent unless
and until the Company and the Distribution Agent have each executed such terms
agreement accepting all of the terms of such terms agreement. In the event of a
conflict between the terms of this Agreement and the terms of a terms agreement,
the terms of such terms agreement will control.

 

f.                                        Sales Through the Distribution Agent. 
The Company agrees that any offer to sell, any solicitation of an offer to buy,
or any sales of Common Stock or any other equity security of the Company shall
only be effected by or through the Distribution Agent, on any single given date;
provided however, that (i) the foregoing limitation shall not apply to sales
solely to employees, directors or security holders of the Company or its
subsidiaries, or to a trustee or other person acquiring such securities for the
accounts of such person and (ii) such limitation shall not apply (A) on any day
during which no sales are made pursuant to this Agreement or (B) during a period
in which the Company has notified the Distribution Agent that it will not sell
Common Stock under this Agreement and (1) no Placement Notice is pending or
(2) after a Placement Notice has been withdrawn.

 

g.                                       Trading by the Distribution Agent. The
Company consents to the Distribution Agent’s trading Common Stock for such
Distribution Agent’s own account and for the accounts of its clients at the same
time as sale of the Common Stock occurs pursuant to this Agreement.

 

6.                                Representations and Warranties of the Company.
Except as disclosed in the Registration Statement or Prospectus (including the
Incorporated Documents), the Company represents and warrants to, and agrees with
the Distribution Agent that as of the date of this Agreement and as of each
Applicable Time (as defined below), unless such representation, warranty or
agreement specifies a different date or time:

 

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a.                                      Registration Statement and Prospectus.
The transactions contemplated by this Agreement meet the requirements for and
comply with the conditions for the use of Form S-3 under the Securities Act. The
Registration Statement has been filed with the Commission and has been declared
effective under the Securities Act. The Prospectus Supplement will name KBW as
the distribution agent in the section entitled “Plan of Distribution.” The
Company has not received, and has no notice of, any order of the Commission
preventing or suspending the use of the Registration Statement, or threatening
or instituting proceedings for that purpose. The Registration Statement and the
offer and sale of Placement Shares as contemplated hereby meet the requirements
of Rule 415 under the Securities Act and comply in all material respects with
said Rule. Any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement have been so described or
filed. Copies of the Registration Statement, the Prospectus, and any such
amendments or supplements and all documents incorporated by reference therein
that were filed with the Commission on or prior to the date of this Agreement
have been delivered, or are available through EDGAR, to the Distribution Agent
and its counsel. The Company has not distributed and, prior to completion of the
distribution of the Placement Shares, will not distribute any offering material
in connection with the offering or sale of the Placement Shares other than the
Registration Statement, the Prospectus, and any Issuer Free Writing Prospectus
(as defined below) to which the Distribution Agent has consented. The Common
Stock is currently quoted on the Nasdaq Global Market. The Company has not, in
the 12 months preceding the date hereof, received notice from the Nasdaq to the
effect that the Company is not in compliance with the listing or maintenance
requirements of the Nasdaq. The Company has no reason to believe that it will
not in the foreseeable future continue to be in compliance with all such listing
and maintenance requirements.

 

b.                                      No Misstatement or Omission. The
Registration Statement, when it became effective, and the Prospectus, and any
amendment or supplement thereto, on the date of such Prospectus or amendment or
supplement, conformed and will conform in all material respects with the
requirements of the Securities Act. At each Applicable Time, the Registration
Statement and the Prospectus, as of such date, will conform in all material
respects with the requirements of the Securities Act. The Registration
Statement, when it became or becomes effective, did not, and will not, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
The Prospectus and any amendment and supplement thereto, on the date thereof and
at each Applicable Time (defined below), did not or will not include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The documents incorporated by reference in the Prospectus
or any Prospectus Supplement did not, and any further documents filed and
incorporated by reference therein will not, when filed with the Commission,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated in such document or necessary to make the statements in
such document, in light of the circumstances under which they were made, not
misleading. The foregoing shall not apply to statements in, or omissions from,
any such document made in reliance upon, and in conformity with, information
furnished to the Company by the Distribution Agent in writing expressly for use
in the preparation thereof.

 

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c.                                       Conformity with Securities Act and
Exchange Act. The Registration Statement, the Prospectus, any Issuer Free
Writing Prospectus or any amendment or supplement thereto, and the Incorporated
Documents, when such documents were or are filed with the Commission under the
Securities Act or the Exchange Act or became or become effective under the
Securities Act, as the case may be, conformed or will conform in all material
respects with the requirements of the Securities Act and the Exchange Act, as
applicable.

 

d.                                      Financial Information. The consolidated
financial statements of the Company included or incorporated by reference in the
Registration Statement and the Prospectus, together with the related notes and
schedules, present fairly, in all material respects, the consolidated financial
position of the Company and the Subsidiaries (as defined below) as of the dates
indicated and the consolidated results of operations, cash flows and changes in
stockholders’ equity of the Company for the periods specified and have been
prepared in compliance with the requirements of the Securities Act and Exchange
Act, as applicable, and in conformity with generally accepted accounting
principles in the United States (“GAAP”) applied on a consistent basis (except
for such adjustments to accounting standards and practices as are noted therein)
during the periods involved; the other financial and statistical data with
respect to the Company and the Subsidiaries contained or incorporated by
reference in the Registration Statement and the Prospectus, are accurately and
fairly presented and prepared on a basis consistent with the financial
statements and books and records of the Company; there are no financial
statements (historical or pro forma) that are required to be included or
incorporated by reference in the Registration Statement, or the Prospectus that
are not included or incorporated by reference as required; the Company and the
Subsidiaries (as defined below) do not have any material liabilities or
obligations, direct or contingent (including any off balance sheet obligations),
not described in the Registration Statement and the Prospectus which are
required to be described in the Registration Statement or Prospectus; and all
disclosures contained or incorporated by reference in the Registration Statement
and the Prospectus, if any, regarding “non-GAAP financial measures” (as such
term is defined by the rules and regulations of the Commission) comply with
Regulation G of the Exchange Act and Item 10 of Regulation S-K under the
Securities Act, to the extent applicable;

 

e.                                       Conformity with EDGAR Filing. The
Prospectus delivered to the Distribution Agent for use in connection with the
sale of the Placement Shares pursuant to this Agreement will be identical to the
versions of the Prospectus created to be transmitted to the Commission for
filing via EDGAR, except to the extent permitted by Regulation S-T.

 

f.                                        Organization. The Company and any
subsidiary that is a significant subsidiary (as such term is defined in
Rule 1-02 of Regulation S-X promulgated by the Commission) (each, a
“Subsidiary”, collectively, the “Subsidiaries”), are, and will be, duly
organized, validly existing as a corporation or other entity and in good
standing under the laws of their respective jurisdictions of organization. The
Company and the Subsidiaries are, and will be, duly licensed or qualified as a
foreign corporation for transaction of business and in good standing under the
laws of each other jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such license or
qualification, and have all corporate power and authority necessary to own or
hold their respective properties and to conduct their respective businesses as
described in the Registration Statement and the Prospectus, except where the
failure to be so qualified or in good standing or have such power

 

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or authority would not, individually or in the aggregate, have a material
adverse effect or would reasonably be expected to have a material adverse effect
on the general affairs, management, assets, business, operations, earnings,
properties, condition (financial or otherwise), prospects, shareholders’ equity
or results of operations of the Company and the Subsidiaries taken as a whole,
or prevent the consummation of the transactions contemplated hereby (a “Material
Adverse Effect”).

 

g.                                       Subsidiaries.  As of the date hereof,
the Company’s only Subsidiaries are set forth on Schedule 6(g).  The Company
owns directly or indirectly, all of the equity interests of the Subsidiaries
free and clear of any lien, charge, security interest, encumbrance, right of
first refusal or other restriction, and all the equity interests of the
Subsidiaries are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights. As of the date of this Agreement, Unity Bank, a
New Jersey state-chartered commercial bank (the “Bank”), is the only
“significant subsidiary” of the Company.

 

h.                                      Bank Holding Company; State Bank Status.
The Company is duly registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended (the “BHC Act”), and meets in all material
respects the applicable requirements for qualification as such. The activities
of the Company’s Subsidiaries are permitted of subsidiaries of a bank holding
company under applicable law and the rules and regulations of the Federal
Reserve Board set forth in Title 12 of the Code of Federal Regulations. The Bank
is a wholly-owned subsidiary of the Company and holds the requisite authority
from the New Jersey Department of Banking and Insurance (the “New Jersey
Department”) to conduct business as a state-chartered commercial bank under the
laws of the State of New Jersey. The deposit accounts of the Bank are insured up
to applicable limits by the Federal Deposit Insurance Corporation (the “FDIC”)
and all premiums and assessments required to be paid in connection therewith
have been paid when due.

 

i.                                          No Violation or Default. Neither the
Company nor any Subsidiary is (i) in violation of its certificate of
incorporation, charter or bylaws or similar organizational documents; (ii) in
default, and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or to
which any of the property or assets of the Company or any Subsidiary is subject;
or (iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of each of clauses (ii) and (iii) above, for any such
violation or default that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. To the Company’s
knowledge, no other party under any material contract or other agreement to
which it or any Subsidiary is a party is in default in any respect thereunder
where such default would reasonably be expected to have a Material Adverse
Effect.

 

j.                                         No Material Adverse Effect. Since the
date of the most recent financial statements of the Company included or
incorporated by reference in the Registration Statement and Prospectus, there
has not been (i) any Material Adverse Effect, or any development involving a
prospective Material Adverse Effect, in or affecting the business, properties,

 

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management, condition (financial or otherwise), results of operations, or
prospects of the Company and the Subsidiaries taken as a whole, (ii) any
transaction which is material to the Company and the Subsidiaries taken as a
whole, (iii) any obligation or liability, direct or contingent (including any
off-balance sheet obligations), incurred by the Company or the Subsidiaries,
which is material to the Company and the Subsidiaries taken as a whole, (iv) any
material change in the capital stock (other than (A) the grant of additional
options under the Company’s existing stock option plans, (B) changes in the
number of outstanding shares of Common Stock of the Company due to the issuance
of shares upon the exercise or conversion of securities exercisable for, or
convertible into, Common Stock outstanding on the date hereof, (C) as a result
of the issuance of Placement Shares, (D) any repurchases of capital stock of the
Company, (E) as described in a proxy statement filed on Schedule 14A or a
Registration Statement on Form S-4, or (F) otherwise publicly announced) or
outstanding long-term indebtedness of the Company or the Subsidiaries or (v) any
dividend or distribution of any kind declared, paid or made on the capital stock
of the Company or any Subsidiary, other than in each case above in the ordinary
course of business or as otherwise disclosed in the Registration Statement or
Prospectus.

 

k.                                      Capitalization. The issued and
outstanding shares of capital stock of the Company have been validly issued, are
fully paid and non-assessable and, other than as disclosed in the Registration
Statement or the Prospectus, are not subject to any preemptive rights, rights of
first refusal or similar rights. The Company has an authorized, issued and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus as of the dates referred to therein (other than (i) the grant of
additional options under the Company’s existing stock option plans, (ii) changes
in the number of outstanding Common Stock of the Company due to the issuance of
shares upon the exercise or conversion of securities exercisable for, or
convertible into, Common Stock outstanding on the date hereof, (iii) as a result
of the issuance of Placement Shares, or (iv) any repurchases of capital stock of
the Company) and such authorized capital stock conforms to the description
thereof set forth in the Registration Statement and the Prospectus. The
description of the Common Stock in the Registration Statement and the Prospectus
is complete and accurate in all material respects. As of the date referred to
therein, the Company did not have outstanding any rights or warrants to
subscribe for, or any securities or obligations convertible into, or
exchangeable for, or any contracts or commitments to issue or sell (excluding
the grant of options under the Company’s existing stock option plans), any
shares of capital stock or other securities, except as disclosed in the
Registration Statement or the Prospectus.

 

l.                                          S-3 Eligibility.  (i) At the time of
filing the Registration Statement and (ii) at the time of the most recent
amendment thereto for the purposes of complying with Section 10(a)(3) of the
Securities Act (whether such amendment was by post-effective amendment,
incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or
form of prospectus), the Company met the then applicable requirements for use of
Form S-3 under the Securities Act, including compliance with General Instruction
I.B.1 of Form S-3.

 

m.                                  Authorization; Enforceability. The Company
has full legal right, power and authority to enter into this Agreement and
perform the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Company and is a legal, valid and
binding agreement of the Company enforceable against the Company in

 

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accordance with its terms, except to the extent that (i) enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and by general equitable principles and
(ii) the indemnification and contribution provisions of Section 11 hereof may be
limited by federal or state securities laws and public policy considerations in
respect thereof.

 

n.                                      Authorization of Placement Shares. The
Placement Shares, when issued and delivered pursuant to the terms approved by
the board of directors of the Company or a duly authorized committee thereof, or
a duly authorized executive committee, against payment therefor as provided
herein, will be duly and validly authorized and issued and fully paid and
nonassessable, free and clear of any pledge, lien, encumbrance, security
interest or other claim (other than any pledge, lien, encumbrance, security
interest or other claim arising from an act or omission of the Distribution
Agent or a purchaser), including any statutory or contractual preemptive rights,
resale rights, rights of first refusal or other similar rights, and will be
registered pursuant to Section 12 of the Exchange Act. The Placement Shares,
when issued, will conform in all material respects to the description thereof
set forth in or incorporated into the Prospectus.

 

o.                                      No Consents Required. No consent,
approval, authorization, order, registration or qualification of or with any
court or arbitrator or any governmental or regulatory authority is required for
the execution, delivery and performance by the Company of this Agreement, and
the issuance and sale by the Company of the Placement Shares as contemplated
hereby, except for such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable state
securities laws or by the by-laws and rules of the Financial Industry Regulatory
Authority (“FINRA”) or the Nasdaq, including any notices that may be required by
the Nasdaq, in connection with the sale of the Placement Shares by the
Distribution Agent.

 

p.                                      No Preferential Rights. (i) No person,
as such term is defined in Rule 1-02 of Regulation S-X promulgated under the
Securities Act (each, a “Person”), has the right, contractual or otherwise, to
cause the Company to issue or sell to such Person any Common Stock or shares of
any other capital stock or other securities of the Company (other than upon the
exercise of options or warrants to purchase Common Stock or upon the exercise of
options that may be granted from time to time under the Company’s stock option
plans), (ii) no Person has any preemptive rights, rights of first refusal, or
any other rights (whether pursuant to a “poison pill” provision or otherwise) to
purchase any Common Stock or shares of any other capital stock or other
securities of the Company from the Company which have not been duly waived with
respect to the offering contemplated hereby, (iii) no Person has the right to
act as an underwriter or as a financial advisor to the Company in connection
with the offer and sale of the Common Stock, and (iv) no Person has the right,
contractual or otherwise, to require the Company to register under the
Securities Act any Common Stock or shares of any other capital stock or other
securities of the Company, or to include any such shares or other securities in
the Registration Statement or the offering contemplated thereby, whether as a
result of the filing or effectiveness of the Registration Statement or the sale
of the Placement Shares as contemplated thereby or otherwise.

 

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q.                                      Independent Public Accountant. RSM US
LLP (the “Accountant”), whose report on the consolidated financial statements of
the Company is filed with the Commission as part of the Company’s most recent
Annual Report on Form 10-K filed with the Commission and incorporated into the
Registration Statement, are and, during the periods covered by their report,
were independent public accountants within the meaning of the Securities Act and
the Public Company Accounting Oversight Board (United States). To the Company’s
knowledge, with due inquiry, the Accountant is not in violation of the auditor
independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) with respect to the Company.

 

r.                                         Enforceability of Agreements.  All
agreements between the Company and third parties expressly referenced in the
Prospectus, other than such agreements that have expired by their terms or whose
termination is disclosed in documents filed by the Company on EDGAR, are legal,
valid and binding obligations of the Company enforceable in accordance with
their respective terms, except to the extent that (i) enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and by general equitable principles and
(ii) the indemnification provisions of certain agreements may be limited by
federal or state securities laws or public policy considerations in respect
thereof, and except for any unenforceability that, individually or in the
aggregate, would not unreasonably be expected to have a Material Adverse Effect.

 

s.                                        No Litigation. There are no legal,
governmental or regulatory actions, suits or proceedings pending, nor, to the
Company’s knowledge, any legal, governmental or regulatory investigations, to
which the Company or a Subsidiary is a party or to which any property of the
Company or any Subsidiary is the subject that, individually or in the aggregate,
if determined adversely to the Company or any Subsidiary, would reasonably be
expected to have a Material Adverse Effect or materially and adversely affect
the ability of the Company to perform its obligations under this Agreement; to
the Company’s knowledge, no such actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or threatened by others
that, individually or in the aggregate, if determined adversely to the Company
or any Subsidiary, would reasonably be expected to have a Material Adverse
Effect; and (i) there are no current or pending legal, governmental or
regulatory investigations, actions, suits or proceedings that are required under
the Securities Act to be described in the Prospectus that are not described in
the Prospectus including any Incorporated Document; and (ii) there are no
contracts or other documents that are required under the Securities Act to be
filed as exhibits to the Registration Statement that are not so filed.

 

t.                                         Licenses and Permits. The Company and
the Subsidiaries possess or have obtained, all licenses, certificates, consents,
orders, approvals, permits and other authorizations issued by, and have made all
declarations and filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the ownership or
lease of their respective properties or the conduct of their respective
businesses as described in the Registration Statement and the Prospectus (the
“Permits”), except where the failure to possess, obtain or make the same would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any Subsidiary have received written
notice of any proceeding relating to revocation or modification of any such
Permit or has any reason to believe that such Permit will not be renewed in the
ordinary course, except where the

 

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failure to obtain any such renewal would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

u.                                      No Material Defaults. Neither the
Company nor any Subsidiary has defaulted on any installment on indebtedness for
borrowed money or on any rental on one or more long-term leases, which defaults,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The Company has not filed a report pursuant to
Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual
Report on Form 10-K, indicating that it (i) has failed to pay any dividend or
sinking fund installment on preferred stock or (ii) has defaulted on any
installment on indebtedness for borrowed money or on any rental on one or more
long-term leases, which defaults, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.

 

v.                                      Certain Market Activities. Neither the
Company, nor any Subsidiary, nor any of their respective directors, officers or
controlling persons has taken, directly or indirectly, any action designed, or
that has constituted or would reasonably be expected to cause or result in,
under the Exchange Act or otherwise, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Placement Shares.

 

w.                                    Broker/Dealer Relationships. Neither the
Company nor any Subsidiary or any related entities (i) is required to register
as a “broker” or “dealer” in accordance with the provisions of the Exchange Act
or (ii) directly or indirectly through one or more intermediaries, controls or
is a “person associated with a member” or “associated person of a member”
(within the meaning set forth in the FINRA Manual).

 

x.                                      No Reliance. The Company has not relied
upon the Distribution Agent or legal counsel for the Distribution Agent for any
legal, tax or accounting advice in connection with the offering and sale of the
Placement Shares.

 

y.                                      Taxes. The Company and the Subsidiaries
have filed all federal, state, local and foreign tax returns which have been
required to be filed and paid all taxes shown thereon through the date hereof,
to the extent that such taxes have become due and are not being contested in
good faith, except where the failure to do so would not reasonably be expected
to have a Material Adverse Effect. Except as otherwise disclosed in or
contemplated by the Registration Statement or the Prospectus, no tax deficiency
has been determined adversely to the Company or any Subsidiary which has had, or
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. The Company has no knowledge of any federal, state or
other governmental tax deficiency, penalty or assessment which has been or might
be asserted or threatened against it which could have a Material Adverse Effect.

 

z.                                       Title to Real and Personal Property.
The Company and the Subsidiaries have good and valid title in fee simple to all
items of real property and good and valid title to all personal property
described in the Registration Statement or Prospectus as being owned by them
that are material to the businesses of the Company or such Subsidiary, in each
case free and clear of all liens, encumbrances and claims, except those that
(i) do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries or (ii) would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect. Any real property described in the Registration Statement or Prospectus
as

 

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being leased by the Company and the Subsidiaries is held by them under valid,
existing and enforceable leases, except those that (A) do not materially
interfere with the use made or proposed to be made of such property by the
Company or the Subsidiaries or (B) would not be reasonably expected,
individually or in the aggregate, to have a Material Adverse Effect.

 

aa.                               Intellectual Property. The Company and the
Subsidiaries own or possess adequate enforceable rights to use all patents,
patent applications, trademarks (both registered and unregistered), service
marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) (collectively, the “Intellectual Property”), necessary for the
conduct of their respective businesses as conducted as of the date hereof,
except to the extent that the failure to own or possess adequate rights to use
such Intellectual Property would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; the Company and the
Subsidiaries have not received any written notice of any claim of infringement
or conflict which asserted Intellectual Property rights of others, which
infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Effect; there are no pending, or to the Company’s
knowledge, threatened judicial proceedings or interference proceedings against
the Company or its Subsidiaries challenging the Company’s or any of its
Subsidiary’s rights in or to or the validity of the scope of any of the
Company’s or any Subsidiary’s patents, patent applications or proprietary
information; no other entity or individual has any right or claim in any of the
Company’s or any of its Subsidiary’s patents, patent applications or any patent
to be issued therefrom by virtue of any contract, license or other agreement
entered into between such entity or individual and the Company or any Subsidiary
or by any non-contractual obligation, other than by written licenses granted by
the Company or any Subsidiary; the Company and the Subsidiaries have not
received any written notice of any claim challenging the rights of the Company
or its Subsidiaries in or to any Intellectual Property owned, licensed or
optioned by the Company or any Subsidiary which claim, if the subject of an
unfavorable decision would result in a Material Adverse Effect.

 

bb.                               Environmental Laws. The Company and the
Subsidiaries (i) are in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, “Environmental
Laws”); (ii) have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses as described in the Registration Statement and the
Prospectus; and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except, in
the case of any of clauses (i), (ii) or (iii) above, for any such failure to
comply or failure to receive required permits, licenses, other approvals or
liability as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

cc.                                 Disclosure Controls. The Company maintains
systems of internal accounting controls designed to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP

 

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and to maintain asset accountability; (iii) access to assets is permitted only
in accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company is not aware of any material weaknesses in its internal
control over financial reporting (other than as set forth in the Registration
Statement or the Prospectus). Since the date of the latest audited financial
statements of the Company included in the Prospectus, there has been no change
in the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting (other than as set forth in the Registration
Statement or the Prospectus). The Company has established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the
Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company and the Subsidiaries is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company’s Annual Report on Form 10-K or Quarterly Report
on Form 10-Q, as the case may be, is being prepared. The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and
procedures as of a date within 90 days prior to the filing date of the Form 10-K
for the fiscal year most recently ended (such date, the “Evaluation Date”). The
Company presented in its Form 10-K for the fiscal year most recently ended the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the most recent
Evaluation Date. Since the most recent Evaluation Date, there have been no
significant changes in the Company’s internal controls (as such term is defined
in Item 307(b) of Regulation S-K under the Securities Act) or, to the Company’s
knowledge, in other factors that could significantly affect the Company’s
internal controls. To the knowledge of the Company, the Company’s “internal
controls over financial reporting” and “disclosure controls and procedures” are
effective.

 

dd.                               Sarbanes-Oxley Act. There is and has been no
failure on the part of the Company or, to the knowledge of the Company, any of
the Company’s directors or officers, in their capacities as such, to comply with
any applicable provisions of the Sarbanes-Oxley Act and the rules and
regulations promulgated thereunder. Each of the principal executive officer and
the principal financial officer of the Company (or each former principal
executive officer of the Company and each former principal financial officer of
the Company as applicable) has made all certifications required by Sections 302
and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms,
statements and other documents required to be filed by it or furnished by it to
the Commission during the past 12 months. For purposes of the preceding
sentence, “principal executive officer” and “principal financial officer” shall
have the meanings given to such terms in the Exchange Act Rules 13a-15 and
15d-15.

 

ee.                                 Finder’s Fees. Neither the Company nor any
Subsidiary has incurred any liability for any finder’s fees, brokerage
commissions or similar payments in connection with the transactions herein
contemplated, except as may otherwise exist with respect to the Distribution
Agent pursuant to this Agreement.

 

ff.                                   Labor Disputes. No labor disturbance by or
dispute with employees of the Company or any Subsidiary exists or, to the
knowledge of the Company, is threatened which would reasonably be expected to
result in a Material Adverse Effect.

 

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gg.                                 Investment Company Act. Neither the Company
nor any Subsidiary is or, after giving effect to the offering and sale of the
Placement Shares, will be an “investment company” or an entity “controlled” by
an “investment company,” as such terms are defined in the Investment Company Act
of 1940, as amended (the “Investment Company Act”).

 

hh.                               Operations. The operations of the Company and
the Subsidiaries are and have been conducted at all times in compliance with
applicable financial record keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions to which the Company or the Subsidiaries are
subject, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Money Laundering Laws”), except as would not
reasonably be expected to result in a Material Adverse Effect; and no action,
suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any Subsidiary with respect to
the Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.

 

ii.                                       Off-Balance Sheet
Arrangements.         There are no transactions, arrangements and other
relationships between and/or among the Company, and/or, to the knowledge of the
Company, any of its affiliates and any unconsolidated entity, including, but not
limited to, any structured finance, special purpose or limited purpose entity
(each, an “Off Balance Sheet Transaction”) that could reasonably be expected to
affect materially the Company’s liquidity or the availability of or requirements
for its capital resources, including those Off Balance Sheet Transactions
described in the Commission’s Statement about Management’s Discussion and
Analysis of Financial Conditions and Results of Operations (Release Nos.
33-8056; 34-45321; FR-61), required to be described in the Registration
Statement or the Prospectus which have not been described as required.

 

jj.                                     Compliance with Certain Banking
Regulations. The Company has no knowledge of any facts and circumstances, and
has no reason to believe that any facts or circumstances exist, that would cause
the Bank: (i) to be deemed not to be in satisfactory compliance with the
Community Reinvestment Act (“CRA”) and the regulations promulgated thereunder or
to be assigned a CRA rating by federal or state banking regulators of lower than
“satisfactory”; (ii) to be deemed to be operating in violation, in any material
respect, of the Bank Secrecy Act of 1970 (or otherwise known as the “Currency
and Foreign Transactions Reporting Act”), the USA Patriot Act (or otherwise
known as “Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001”); or (iii) to be
deemed not to be in satisfactory compliance, in any material respect, with all
applicable privacy of customer information requirements contained in any federal
and state privacy laws and regulations as well as the provisions of all
information security programs adopted by the Bank.  The most recent regulatory
rating given to the Bank as to compliance with the CRA is “satisfactory.”

 

kk.                               Reports, Registrations and Statements. Since
December 31, 2014, the Company and each Subsidiary have filed all material
reports, registrations and statements, together with any required amendments
thereto, that it was required to file with the Board of Governors of the Federal
Reserve System (the “Federal Reserve”), the FDIC, the New Jersey

 

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Department, and any other applicable federal or state securities or banking
authorities, except where the failure to file any such report, registration or
statement would not reasonably be expected to result in a Material Adverse
Effect. All such reports and statements filed with any such regulatory body or
authority are collectively referred to herein as the “Company Reports.” As of
their respective dates, the Company Reports complied as to form in all material
respects with all the rules and regulations promulgated by the Federal Reserve,
the FDIC, the New Jersey Department, and any other applicable federal or state
securities or banking authorities, as the case may be.

 

ll.                                       Adequate Capitalization. As of
September 30, 2016, the Bank met or exceeded the standards necessary to be
considered “well capitalized” under the FDIC’s regulatory framework for prompt
corrective action.

 

mm.                       Agreements with Regulatory Agencies.  Each of the
Company and the Subsidiaries are in compliance in all material respects with all
applicable laws administered by and regulations of the U.S. Department of the
Treasury, the Federal Reserve, the FDIC, the New Jersey Department and any other
applicable federal or state bank regulatory authority (collectively, the “Bank
Regulatory Authorities”) with jurisdiction over the Company or a Subsidiary. 
Except as otherwise disclosed in the Registration Statement and the Prospectus,
neither the Company nor any Subsidiary  is a party to any written agreement,
cease and desist or consent order, or memorandum of understanding with, or a
party to, any commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of an extraordinary supervisory letter,
formal or informal action, sanction, limitation or restriction nor has the
Company or any Subsidiary adopted any board resolutions at the request of, any
Bank Regulatory Authority (collectively, “Banking Enforcement Action”) that
restricts materially the conduct of its business, or in any manner relates to
its capital adequacy, its credit policies or its management, nor have any of
them been advised by any Bank Regulatory Authority that it is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such Banking Enforcement Action and there is no unresolved
violation, criticism or exception by any Bank Regulatory Authority with respect
to any report or statement relating to any examinations of the Company of any of
its Subsidiaries, which in any case specified in the foregoing clauses, to the
Company’s or the Subsidiaries knowledge, is threatened, and with respect to any
such case specified in the foregoing clauses, is or would reasonably be expected
to be material to, the Company or any Subsidiary.

 

nn.                               Fiduciary Accounts. Neither the Company nor
the Bank exercises fiduciary powers.

 

oo.                               Mortgage Banking Business. Except as has not
had and would not reasonably be expected to result in a Material Adverse Effect:

 

(i)                                     The Company and each of its Subsidiaries
has complied with, and all documentation in connection with the origination,
processing, underwriting and credit approval of any mortgage loan originated,
purchased or serviced by the Company or any of its Subsidiaries satisfied,
(A) all applicable federal, state and local laws, rules and regulations with
respect to the origination, insuring, purchase, sale, pooling, servicing,
subservicing, or filing of claims in connection with mortgage loans, including
all laws relating to real estate settlement procedures, consumer credit
protection, truth in lending laws, usury limitations, fair housing,

 

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transfers of servicing, collection practices, equal credit opportunity and
adjustable rate mortgages, (B) the responsibilities and obligations relating to
mortgage loans set forth in any agreement between the Company or any of its
Subsidiaries and any Agency, Loan Investor or Insurer (each as defined below),
(C) the applicable rules, regulations, guidelines, handbooks and other
requirements of any Agency, Loan Investor or Insurer and (D) the terms and
provisions of any mortgage or other collateral documents and other loan
documents with respect to each mortgage loan; and

 

(ii)                                  No Agency, Loan Investor or Insurer has
(A) claimed in writing that the Company or any of its Subsidiaries has violated
or has not complied with the applicable underwriting standards with respect to
mortgage loans sold by the Company or any of its Subsidiaries to a Loan Investor
or Agency, or with respect to any sale of mortgage servicing rights to a Loan
Investor, (B) imposed in writing restrictions on the activities (including
commitment authority) of the Company or any of its Subsidiaries or (C) indicated
in writing to the Company or any of its Subsidiaries that it has terminated or
intends to terminate its relationship with the Company or any of its
Subsidiaries for poor performance, poor loan quality or concern with respect to
the Company’s or any of its Subsidiaries’ compliance with laws,

 

For purposes of this Section oo: (A) “Agency” means the Federal Housing
Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home
Administration (now known as Rural Housing and Community Development Services),
the Federal National Mortgage Association, the United States Department of
Veterans’ Affairs, the Rural Housing Service of the U.S. Department of
Agriculture or any other federal or state agency with authority to (i) determine
any investment, origination, lending or servicing requirements with regard to
mortgage loans originated, purchased or serviced by the Company or any of its
Subsidiaries or (ii) originate, purchase, or service mortgage loans, or
otherwise promote mortgage lending, including state and local housing finance
authorities; (B) “Loan Investor” means any person (including an Agency) having a
beneficial interest in any mortgage loan originated, purchased or serviced by
the Company or any of its Subsidiaries or a security backed by or representing
an interest in any such mortgage loan; and (C) “Insurer” means a person who
insures or guarantees for the benefit of the mortgagee all or any portion of the
risk of loss upon borrower default on any of the mortgage loans originated,
purchased or serviced by the Company or any of its Subsidiaries, including the
Federal Housing Administration, the United States Department of Veterans’
Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any
private mortgage insurer, and providers of hazard, title or other insurance with
respect to such mortgage loans or the related collateral.

 

pp.                               Risk Management Instruments. Except as has not
had or would not reasonably be expected to result in a Material Adverse Effect,
since December 31, 2013, all material derivative instruments, including, swaps,
caps, floors and option agreements, whether entered into for the Company’s own
account, or for the account of one or more of the Subsidiaries, were entered
into (1) only in the ordinary course of business, (2) in accordance with prudent
practices and in all material respects with all applicable laws, rules,
regulations and regulatory policies and (3) with counterparties believed to be
financially responsible at the time; and each of them constitutes the valid and
legally binding obligation of the Company or one of the Subsidiaries,
enforceable in accordance with its terms. Neither the Company nor the
Subsidiaries, nor, to the knowledge of the Company, any other party thereto, is
in breach of any

 

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of its material obligations under any such agreement or arrangement

 

qq.                               Underwriter Agreements. Other than with
respect to this Agreement, the Company is not a party to any agreement with an
agent or underwriter for any other “at-the-market” or continuous equity
transaction.

 

rr.                                     ERISA. To the knowledge of the Company,
each material employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is
maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and the Subsidiaries
has been maintained in material compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”);
no prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred which would result in a material
liability to the Company with respect to any such plan excluding transactions
effected pursuant to a statutory or administrative exemption; and for each such
plan that is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA, no “accumulated funding deficiency” as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.

 

ss.                                   Forward-Looking Statements. No
forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) (a “Forward-Looking Statement”)
contained in the Registration Statement and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith. The Forward-Looking Statements incorporated by reference in the
Registration Statement and the Prospectus from the Company’s Annual Report on
Form 10-K for the fiscal year most recently ended (i) except for any
Forward-Looking Statement included in any financial statements and notes
thereto, are within the coverage of the safe harbor for forward looking
statements set forth in Section 27A of the Securities Act, Rule 175(b) under the
Securities Act or Rule 3b-6 under the Exchange Act, as applicable, (ii) were
made by the Company with a reasonable basis and in good faith and reflect the
Company’s good faith commercially reasonable best estimate of the matters
described therein as of the respective dates on which such statements were made,
and (iii) to the extent applicable, have been prepared in accordance with Item
10 of Regulation S-K under the Securities Act.

 

tt.                                     Margin Rules. Neither the issuance, sale
and delivery of the Placement Shares nor the application of the proceeds thereof
by the Company as described in the Registration Statement and the Prospectus
will violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System.

 

uu.                               Insurance. The Company and the Subsidiaries
carry, or are covered by, insurance in such amounts and covering such risks as
the Company and the Subsidiaries reasonably believe are adequate for the conduct
of their business and as is customary for companies of similar size engaged in
similar businesses in similar industries.

 

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vv.                               No Improper Practices. (i) Neither the Company
nor, the Subsidiaries, nor to the Company’s knowledge, any of their respective
executive officers has, in the past five years, made any unlawful contributions
to any candidate for any political office (or failed fully to disclose any
contribution in violation of law) or made any contribution or other payment to
any official of, or candidate for, any federal, state, municipal, or foreign
office or other person charged with similar public or quasi-public duty in
violation of any law or of the character required to be disclosed in the
Prospectus; (ii) no relationship, direct or indirect, exists between or among
the Company or, to the Company’s knowledge, the Subsidiaries or any affiliate of
any of them, on the one hand, and the directors, officers and stockholders of
the Company or the Subsidiaries, on the other hand, that is required by the
Securities Act to be described in the Registration Statement and the Prospectus
that is not so described; (iii) no relationship, direct or indirect, exists
between or among the Company or, to the Company’s knowledge, the Subsidiaries or
any affiliate of them, on the one hand, and the directors, officers,
stockholders or directors of the Company or the Subsidiaries, on the other hand,
that is required by the rules of FINRA to be described in the Registration
Statement and the Prospectus that is not so described; (iv) there are no
material outstanding loans or advances or material guarantees of indebtedness by
the Company or the Subsidiaries to or for the benefit of any of their respective
officers or directors or any of the members of the families of any of them; and
(v) the Company has not offered, or caused any placement agent to offer, Common
Stock to any person with the intent to influence unlawfully (A) a customer or
supplier of the Company or the Subsidiaries to alter the customer’s or
supplier’s level or type of business with the Company or the Subsidiaries or
(B) a trade journalist or publication to write or publish favorable information
about the Company or the Subsidiaries or any of their respective products or
services, and, (vi) neither the Company nor the Subsidiaries nor any employee or
agent of the Company or the Subsidiaries has made any payment of funds of the
Company or the Subsidiaries or received or retained any funds in violation of
any law, rule or regulation (including, without limitation, the Foreign Corrupt
Practices Act of 1977), which payment, receipt or retention of funds is of a
character required to be disclosed in the Registration Statement or the
Prospectus.

 

ww.                           Status Under the Securities Act. The Company was
not and is not an ineligible issuer as defined in Rule 405 at the times
specified in Rules 164 and 433 under the Securities Act in connection with the
offering of the Placement Shares.

 

xx.                               No Misstatement or Omission in an Issuer Free
Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date
and as of each Applicable Time (as defined in Section 25 below), did not, does
not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the
Prospectus, including any incorporated document deemed to be a part thereof that
has not been superseded or modified. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus based upon
and in conformity with written information furnished to the Company by the
Distribution Agent specifically for use therein.

 

yy.                               No Conflicts. Neither the execution of this
Agreement, nor the issuance, offering or sale of the Placement Shares, nor the
consummation of any of the transactions contemplated herein and therein, nor the
compliance by the Company with the terms and provisions hereof and thereof will
conflict with, or will result in a breach of, any of the terms and provisions
of, or has constituted or will constitute a default under, or has resulted in or
will

 

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result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of any contract or other
agreement to which the Company may be bound or to which any of the property or
assets of the Company is subject, except (i) such conflicts, breaches or
defaults as may have been waived and (ii) such conflicts, breaches and defaults
that would not reasonably be expected to have a Material Adverse Effect; nor
will such action result (x) in any violation of the provisions of the
organizational or governing documents of the Company, or (y) in any material
violation of the provisions of any statute or any order, rule or regulation
applicable to the Company or of any court or of any federal, state or other
regulatory authority or other government body having jurisdiction over the
Company, except where such violation would not reasonably be expected to have a
Material Adverse Effect.

 

zz.                                 OFAC.

 

i.                                          The Company represents that, neither
the Company nor any Subsidiary (collectively, the “Entity”) nor, to the
knowledge of the Entity, any director, officer, employee, agent, affiliate or
representative of the Entity, is a government, individual, or entity (in this
paragraph (zz), “Person”) that is, or is owned or controlled by a Person that
is:

 

(A)                          the subject of any sanctions administered or
enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control
(“OFAC”), the United Nations Security Council (“UNSC”), the European Union
(“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority
(collectively, “Sanctions”), nor

 

(B)                          located, organized or resident in a country or
territory that is the subject of Sanctions.

 

ii.                                       The Entity represents and covenants
that it will not, directly or indirectly, knowingly use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person:

 

(A)                          to fund or facilitate any activities or business of
or with any Person or in any country or territory that, at the time of such
funding or facilitation, is the subject of Sanctions; or

 

(B)                          in any other manner that will result in a violation
of Sanctions by any Person (including any Person participating in the offering,
whether as underwriter, advisor, investor or otherwise).

 

iii.                                    The Entity represents and covenants
that, except as detailed in the Prospectus, for the past 5 years, it has not
knowingly engaged in, is not now knowingly engaged in, and will not engage in,
any dealings or transactions with any Person, or in any country or territory,
that at the time of the dealing or transaction is or was the subject of
Sanctions.

 

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aaa.                        Reportable Transactions. Neither the Company nor any
of its Subsidiaries has participated in any reportable transaction, as defined
in Treasury Regulation Section 1.6011-4(b)(1).

 

bbb.                        Investment Securities. Each of the Company and its
Subsidiaries has good and marketable title to all securities held by it (except
securities sold under repurchase agreements or held in any fiduciary or agency
capacity) free and clear of any lien, claim, charge, option, encumbrance,
mortgage, pledge or security interest or other restriction of any kind, except
to the extent such securities are pledged in the ordinary course of business
consistent with prudent business practices to secure obligations of the Company
or any of its Subsidiaries and except for such defects in title or liens,
claims, charges, options, encumbrances, mortgages, pledges or security interests
or other restrictions of any kind that would not result in a Material Adverse
Effect. Such securities are valued on the books of the Company and its
subsidiaries in accordance with GAAP.

 

ccc.                           Proprietary Trading by the Distribution Agent.
The Company acknowledges and agrees that the Distribution Agent has informed the
Company that the Distribution Agent may, to the extent permitted under the
Securities Act and the Exchange Act, purchase and sell Common Stock for its own
account while this Agreement is in effect, and shall be under no obligation to
purchase securities on a principal basis pursuant to this Agreement, except as
otherwise agreed by the Distribution Agent in the Placement Notice; provided,
that no such purchase or sales shall take place while a Placement Notice is in
effect (except (i) as agreed by the Company in the Placement Notice or (ii) to
the extent the Distribution Agent may engage in sales of Placement Securities
purchased or deemed purchased from the Company as a “riskless principal” or in a
similar capacity).

 

ddd.                        Stock Transfer Taxes. On each Settlement Date, all
stock transfer or other taxes (other than income taxes) which are required to be
paid in connection with the sale and transfer of the Placement Shares to be sold
hereunder will be, or will have been, fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been fully complied with
by the Company.

 

Any certificate signed by an officer of the Company and delivered to the
Distribution Agent or to counsel for the Distribution Agent pursuant to or in
connection with this Agreement shall be deemed to be a representation and
warranty by the Company, as applicable, to the Distribution Agent as to the
matters set forth therein.

 

7.                                Covenants of the Company.  The Company
covenants and agrees with each of the Distribution Agent that:

 

a.                                      Registration Statement Amendments. After
the date of this Agreement and during any period in which a prospectus relating
to any Placement Shares is required to be delivered by the Distribution Agent
under the Securities Act (including in circumstances where such requirement may
be satisfied pursuant to Rule 172 under the Securities Act) (the “Prospectus
Delivery Period”) (i) the Company will notify the Distribution Agent promptly of
the time when any subsequent amendment to the Registration Statement, other than
documents incorporated by reference or amendments not related to any Placement,
has been filed with the Commission and/or has become effective or any subsequent
supplement to the Prospectus has

 

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been filed and of any request by the Commission for any amendment or supplement
to the Registration Statement or Prospectus related to the Placement or for
additional information related to the Placement, (ii) the Company will prepare
and file with the Commission, promptly upon the Distribution Agent’s request,
any amendments or supplements to the Registration Statement or Prospectus that,
in the Distribution Agent’s reasonable opinion, may be necessary or advisable in
connection with the distribution of the Placement Shares by the Distribution
Agent (provided, however, that the failure of the Distribution Agent to make
such request shall not relieve the Company of any obligation or liability
hereunder, or affect the Distribution Agent’s right to rely on the
representations and warranties made by the Company in this Agreement and
provided, further, that the only remedy the Distribution Agent shall have with
respect to the failure to make such filing shall be to cease making sales under
this Agreement until such amendment or supplement is filed); (iii) the Company
will not file any amendment or supplement to the Registration Statement or
Prospectus relating to the Placement Shares or a security convertible into the
Placement Shares unless a copy thereof has been submitted to the Distribution
Agent within a reasonable period of time before the filing and the Distribution
Agent have not reasonably objected thereto (provided, however, that (A) the
failure of the Distribution Agent to make such objection shall not relieve the
Company of any obligation or liability hereunder, or affect the Distribution
Agent’s right to rely on the representations and warranties made by the Company
in this Agreement and (B) the Company has no obligation to provide the
Distribution Agent any advance copy of such filing or to provide the
Distribution Agent an opportunity to object to such filing if the filing does
not name the Distribution Agent or is not related to the transaction herein
provided; and provided, further, that the only remedy the Distribution Agent
shall have with respect to the failure by the Company to obtain such consent
shall be to cease making sales under this Agreement) and the Company will
furnish to the Distribution Agent at the time of filing thereof a copy of any
document that upon filing is deemed to be incorporated by reference into the
Registration Statement or Prospectus, except for those documents available via
EDGAR; and (iv) the Company will cause each amendment or supplement to the
Prospectus to be filed with the Commission as required pursuant to the
applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any
document to be incorporated therein by reference, to be filed with the
Commission as required pursuant to the Exchange Act, within the time period
prescribed (the determination to file or not file any amendment or supplement
with the Commission under this Section 7(a), based on the Company’s reasonable
opinion or reasonable objections, shall be made exclusively by the Company).

 

b.                                      Notice of Commission Stop Orders. The
Company will advise the Distribution Agent, promptly after it receives notice or
obtains knowledge thereof, of the issuance or threatened issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Placement Shares for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will promptly use its commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such a stop order should be issued. The Company will advise the
Distribution Agent promptly after it receives any request by the Commission for
any amendments to the Registration Statement or any amendment or supplements to
the Prospectus or any Issuer Free Writing Prospectus or for additional
information related to the offering of the Placement Shares or for additional

 

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information related to the Registration Statement, the Prospectus or any Issuer
Free Writing Prospectus.

 

c.                                       Delivery of Prospectus; Subsequent
Changes. During the Prospectus Delivery Period, the Company will comply with all
requirements imposed upon it by the Securities Act, as from time to time in
force, and to file on or before their respective due dates all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other
provision of or under the Exchange Act. If the Company has omitted any
information from the Registration Statement pursuant to Rule 430A under the
Securities Act, it will use its commercially reasonable efforts to comply with
the provisions of and make all requisite filings with the Commission pursuant to
said Rule 430A and to notify the Distribution Agent promptly of all such
filings. If during the Prospectus Delivery Period any event occurs as a result
of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances then existing, not
misleading, or if during such Prospectus Delivery Period it is necessary to
amend or supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will promptly notify the Distribution Agent to
suspend the offering of Placement Shares during such period and the Company will
promptly amend or supplement the Registration Statement or Prospectus (at the
expense of the Company) so as to correct such statement or omission or effect
such compliance; provided, however, that the Company may delay the filing of any
amendment or supplement, if in the judgment of the Company, it is in the best
interest of the Company.

 

d.                                      Listing of Placement Shares. During the
Prospectus Delivery Period, the Company will use its commercially reasonable
efforts to cause the Placement Shares to be listed on the Nasdaq Global Market
and to qualify the Placement Shares for sale under the securities laws of such
jurisdictions in the United States as the Distribution Agent reasonably
designates and to continue such qualifications in effect so long as required for
the distribution of the Placement Shares; provided, however, that the Company
shall not be required in connection therewith to qualify as a foreign
corporation or dealer in securities or file a general consent to service of
process in any jurisdiction.

 

e.                                       Delivery of Registration Statement and
Prospectus.  The Company will furnish to the Distribution Agent and its counsel
(at the reasonable expense of the Company) copies of the Registration Statement,
the Prospectus (including all documents incorporated by reference therein) and
all amendments and supplements to the Registration Statement or Prospectus that
are filed with the Commission during the Prospectus Delivery Period (including
all documents filed with the Commission during such period that are deemed to be
incorporated by reference therein), in each case as soon as reasonably
practicable and in such quantities as the Distribution Agent may from time to
time reasonably request and, at the Distribution Agent’s request, will also
furnish copies of the Prospectus to each exchange or market on which sales of
the Placement Shares may be made; provided, however, that the Company shall not
be required to furnish any document (other than the Prospectus) to the
Distribution Agent to the extent such document is available on EDGAR.

 

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f.                                        Earnings Statement.  The Company will
make generally available to its security holders as soon as practicable, but in
any event not later than 15 months after the end of the Company’s current fiscal
quarter, an earnings statement covering a 12-month period that satisfies the
provisions of Section 11(a) and Rule 158 of the Securities Act.

 

g.                                       Use of Proceeds. The Company will use
the Net Proceeds as described in the Prospectus in the section entitled “Use of
Proceeds.”

 

h.                                      Notice of Other Sales. Without the prior
written consent of the Distribution Agent, the Company will not, directly or
indirectly, offer to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of any Common Stock (other than the Placement Shares offered
pursuant to this Agreement) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire, Common Stock during
the period beginning on the date on which any Placement Notice is delivered to
the Distribution Agent hereunder and ending on the third (3rd) Trading Day
immediately following the final Settlement Date with respect to Placement Shares
sold pursuant to such Placement Notice (or, if the Placement Notice has been
terminated or suspended prior to the sale of all Placement Shares covered by a
Placement Notice, the date of such suspension or termination); and will not
directly or indirectly in any other “at-the-market” or continuous equity
transaction offer to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of any Common Stock (other than the Placement Shares offered
pursuant to this Agreement) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire, Common Stock prior
to the termination of this Agreement; provided, however, that such restrictions
will not be required in connection with the Company’s issuance or sale of
(i) Common Stock, options to purchase Common Stock or Common Stock issuable upon
the exercise of options, pursuant to any employee or director stock option or
benefits plan, stock ownership plan or dividend reinvestment plan (but not
Common Stock subject to a waiver to exceed plan limits in its dividend
reinvestment plan) of the Company whether now in effect or hereafter
implemented; (ii) Common Stock issuable upon conversion of securities or the
exercise of warrants, options or other rights in effect or outstanding, and
disclosed in filings by the Company available on EDGAR or otherwise in writing
to the Distribution Agent, and (iii) Common Stock, or securities convertible
into or exercisable for Common Stock, offered and sold in a privately negotiated
transaction to vendors, customers, strategic partners or potential strategic
partners or other investors conducted in a manner so as not to be integrated
with the offering of Common Stock hereby.

 

i.                                          Change of Circumstances. The Company
will, at any time during the pendency of a Placement Notice advise the
Distribution Agent promptly after it shall have received notice or obtained
knowledge thereof, of any information or fact that would alter or affect in any
material respect any opinion, certificate, letter or other document required to
be provided to the Distribution Agent pursuant to this Agreement.

 

j.                                         Due Diligence Cooperation. During the
term of this Agreement, the Company will cooperate with any reasonable due
diligence review conducted by the Distribution Agent or its representatives in
connection with the transactions contemplated hereby, including, without
limitation, providing information and making available documents and senior
corporate officers, during regular business hours and at the Company’s principal

 

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offices, as the Distribution Agent may reasonably request.

 

k.             Required Filings Relating to Placement of Placement Shares. The
Company agrees that on such dates as the Securities Act shall require, the
Company will (i) file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b) under the Securities Act (each and every
filing under Rule 424(b), a “Filing Date”), which prospectus supplement will set
forth, within the relevant period, the amount of Placement Shares sold through
the Distribution Agent, the Net Proceeds to the Company and the compensation
payable by the Company to the Distribution Agent with respect to such Placement
Shares, and (ii) deliver such number of copies of each such prospectus
supplement to each exchange or market on which such sales were effected as may
be required by the rules or regulations of such exchange or market.

 

l.              Representation Dates; Certificate. Each time during the term of
this Agreement that the Company:

 

i.            amends or supplements (other than a prospectus supplement relating
solely to an offering of securities other than the Placement Shares) the
Registration Statement or the Prospectus relating to the Placement Shares by
means of a post-effective amendment, sticker, or supplement but not by means of
incorporation of documents by reference into the Registration Statement or the
Prospectus relating to the Placement Shares;

 

ii.           files an annual report on Form 10-K under the Exchange Act
(including any Form 10-K/A containing amended financial information or a
material amendment to the previously filed Form 10-K);

 

iii.          files its quarterly reports on Form 10-Q under the Exchange Act;
or

 

iv.          files a current report on Form 8-K containing amended financial
information (other than information “furnished” pursuant to Items 2.02 or 7.01
of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating
to the reclassification of certain properties as discontinued operations in
accordance with Statement of Financial Accounting Standards No. 144) under the
Exchange Act;

 

(Each date of filing of one or more of the documents referred to in clauses i.
through iv. shall be a “Representation Date.”)

 

the Company shall furnish the Distribution Agent (but in the case of clause iv
above only if the Distribution Agent determines that the information contained
in such Form 8-K is material) with a certificate, in the form attached hereto as
Exhibit 7(1). The requirement to provide a certificate under this
Section 7(1) shall be waived for any Representation Date occurring at a time at
which no Placement Notice is pending, which waiver shall continue until the
earlier to occur of the date the Company delivers a Placement Notice hereunder
(which for such calendar quarter shall be considered a Representation Date) and
the next occurring Representation Date on which the Company files its annual
report on Form 10-K. Notwithstanding the foregoing, (i) upon the delivery of the
first Placement Notice hereunder and (ii) if the Company subsequently decides to
sell Placement Shares following a Representation Date when the Company relied on
such

 

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waiver and did not provide the Distribution Agent with a certificate under this
Section 7(1), then before the Distribution Agent sells any Placement Shares, the
Company shall provide the Distribution Agent with a certificate, in the form
attached hereto as Exhibit 7(1), dated the date of the Placement Notice.

 

m.           Legal Opinion. On or prior to the date of the first Placement
Notice given hereunder the Company shall cause to be furnished to the
Distribution Agent written opinions and a negative assurance letter of Windels
Marx Lane & Mittendorf, LLP (“Company Counsel”), or other counsel reasonably
satisfactory to the Distribution Agent, each in form and substance reasonably
satisfactory to the Distribution Agent. Thereafter, within five (5) Trading Days
of each Representation Date with respect to which the Company is obligated to
deliver a certificate in the form attached hereto as Exhibit 7(l) for which no
waiver is applicable, and not more than once per calendar quarter, the Company
shall cause to be furnished to the Distribution Agent a written letter of
Company Counsel in form and substance reasonably satisfactory to the
Distribution Agent, to relate to the Registration Statement and the Prospectus
as then amended or supplemented; provided that, in lieu of such negative
assurance for subsequent periodic filings under the Exchange Act, counsel may
furnish the Distribution Agent with a letter (a “Reliance Letter”) to the effect
that the Distribution Agent may rely on the negative assurance letter previously
delivered under this Section 7(m) to the same extent as if it were dated the
date of such letter (except that statements in such prior letter shall be deemed
to relate to the Registration Statement and the Prospectus as amended or
supplemented as of the date of the Reliance Letter)

 

n.             Comfort Letter. On or prior to the date of the first Placement
Notice given hereunder and within five (5) Trading Days after each subsequent
Representation Date, other than pursuant to Section 7(l)(iii), the Company shall
cause its independent accountants to furnish the Distribution Agent letters (the
“Comfort Letters”), dated the date the Comfort Letter is delivered, which shall
meet the requirements set forth in this Section 7(n); provided, that if
requested by the Distribution Agent, the Company shall cause a Comfort Letter to
be furnished to the Distribution Agent within ten (10) Trading Days of such
request following the date of occurrence of any restatement of the Company’s
financial statements. The Comfort Letter from the Company’s independent
accountants shall be in a form and substance reasonably satisfactory to the
Distribution Agent, (i) confirming that they are an independent public
accounting firm within the meaning of the Securities Act and the PCAOB,
(ii) stating, as of such date, the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily covered by
accountants’ “comfort letters” to underwriters in connection with registered
public offerings (the first such letter, the “Initial Comfort Letter”) and
(iii) updating the Initial Comfort Letter with any information that would have
been included in the Initial Comfort Letter had it been given on such date and
modified as necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.

 

o.             Market Activities. The Company will not, directly or indirectly,
(i) take any action designed to cause or result in, or that constitutes or would
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of Common
Stock or (ii) sell, bid for, or purchase Common Stock in

 

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violation of Regulation M, or pay anyone any compensation for soliciting
purchases of the Placement Shares other than the Distribution Agent.

 

p.             Investment Company Act. The Company will conduct its affairs in
such a manner so as to reasonably ensure that neither it nor the Subsidiaries
will be or become, at any time prior to the termination of this Agreement, an
“investment company,” as such term is defined in the Investment Company Act.

 

q.             No Offer to Sell. Other than an Issuer Free Writing Prospectus
approved in advance by the Company and the Distribution Agent in its capacity as
agent hereunder pursuant to Section 23, neither the Distribution Agent nor the
Company (including its agents and representatives, other than the Distribution
Agent in its capacity as such) will make, use, prepare, authorize, approve or
refer to any written communication (as defined in Rule 405), required to be
filed with the Commission, that constitutes an offer to sell or solicitation of
an offer to buy Placement Shares hereunder.

 

r.              Sarbanes-Oxley Act. The Company will maintain and keep accurate
books and records reflecting its assets and maintain internal accounting
controls in a manner designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP and including those policies and
procedures that (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of the Company, (ii) provide reasonable assurance that transactions are
recorded as necessary to permit the preparation of the Company’s consolidated
financial statements in accordance with GAAP, (iii) that receipts and
expenditures of the Company are being made only in accordance with management’s
and the Company’s directors’ authorization, and (iv) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Company’s assets that could have a material effect on
its financial statements. The Company will maintain such controls and other
procedures, including, without limitation, those required by Sections 302 and
906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that
are designed to ensure that information required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission’s rules and forms, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the Company’s management, including its
principal executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure and to ensure that material information relating to the
Company or the Subsidiaries is made known to them by others within those
entities, particularly during the period in which such periodic reports are
being prepared.

 

8.           Representations and Covenants of the Distribution Agent The
Distribution Agent represents and warrants that it is duly registered as a
broker-dealer under FINRA, the Exchange Act and the applicable statutes and
regulations of each state in which the Placement Shares will be offered and
sold, except such states in which the Distribution Agent is exempt from
registration or such registration is not otherwise required. The Distribution
Agent shall continue,

 

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for the term of this Agreement, to be duly registered as a broker-dealer under
FINRA, the Exchange Act and the applicable statutes and regulations of each
state in which the Placement Shares will be offered and sold, except such states
in which it is exempt from registration or such registration is not otherwise
required, during the term of this Agreement.  The Distribution Agent shall
comply with all applicable law and regulations, including but not limited to
Regulation M, in connection with the transactions contemplated by this
Agreement, including the issuance and sale through the Distribution Agent of the
Placement Shares.

 

9.           Payment of Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
preparation, filing, including any fees required by the Commission, and printing
of the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment and supplement thereto and each Free
Writing Prospectus, in such number as the Distribution Agent shall deem
reasonably necessary, (ii) the printing and delivery to the Distribution Agent
of this Agreement and such other documents as may be required in connection with
the offering, purchase, sale, issuance or delivery of the Placement Shares,
(iii) the preparation, issuance and delivery of the certificates, if any, for
the Placement Shares to the Distribution Agent, including any stock or other
transfer taxes and any capital duties, stamp duties or other duties or taxes
payable upon the sale, issuance or delivery of the Placement Shares to the
Distribution Agent, (iv) the fees and disbursements of the counsel, accountants
and other advisors to the Company, (v) the fees and expenses of the transfer
agent and registrar for the Common Stock, (vi) the filing fees incident to any
review by FINRA of the terms of the sale of the Placement Shares, and (vii) the
fees and expenses incurred in connection with the listing of the Placement
Shares on the Nasdaq Global Market.

 

10.        Conditions to the Distribution Agent’s Obligations. The obligations
of the Distribution Agent hereunder with respect to a Placement will be subject
to the continuing accuracy and completeness of the representations and
warranties made by the Company herein, to the due performance by the Company of
its obligations hereunder, in each case, based on the standards set forth in the
Form of Representation Date Certificate, to the completion by the Distribution
Agent of a due diligence review satisfactory to it in its reasonable judgment,
and to the continuing satisfaction (or waiver by the Distribution Agent in its
sole discretion) of the following additional conditions:

 

a.             Registration Statement Effective. The Registration Statement
shall have become effective and shall be available for the sale of all Placement
Shares contemplated to be issued by any Placement Notice.

 

b.             No Material Notices. None of the following events shall have
occurred and be continuing: (i) receipt by the Company of any request for
additional information from the Commission or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement, the response to which would require any post-effective amendments or
supplements to the Registration Statement or the Prospectus; (ii) the issuance
by the Commission or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt by the Company of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Placement Shares

 

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for sale in any jurisdiction or the initiation or receipt by the Company of any
notification threatening any proceeding for such purpose; or (iv) the occurrence
of any event that makes any material statement made in the Registration
Statement or the Prospectus or any material document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires the making of any changes in the Registration Statement, the Prospectus
or documents so that, in the case of the Registration Statement, it will not
contain any materially untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and, that in the case of the Prospectus, it will not
contain any materially untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

 

c.             No Misstatement or Material Omission. The Distribution Agent
shall not have advised the Company that the Registration Statement or
Prospectus, or any amendment or supplement thereto, contains an untrue statement
of fact that in the Distribution Agent’s reasonable opinion is material, or
omits to state a fact that in the Distribution Agent’s reasonable opinion is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.

 

d.             Material Changes. Except as contemplated in the Prospectus, or
disclosed in the Company’s reports filed with the Commission, there shall not
have been any Material Adverse Effect, or any development that could reasonably
be expected to cause a Material Adverse Effect, or a downgrading in or
withdrawal of the rating assigned to any of the Company’s securities (other than
asset backed securities) by any “nationally recognized statistical rating
organization,” as such term is defined for purposes of Rule 436(g)(2 ) under the
Securities Act, or a public announcement by any such organization that it has
under surveillance or review its rating of any of the Company’s securities
(other than asset backed securities), the effect of which, in the case of any
such action by such rating organization described above, in the reasonable
judgment of the Distribution Agent (without relieving the Company of any
obligation or liability it may otherwise have), is so material as to make it
impracticable or inadvisable to proceed with the offering of the Placement
Shares on the terms and in the manner contemplated in the Prospectus.

 

e.             Legal Opinion. The Distribution Agent shall have received the
opinions and negative assurances of Company Counsel required to be delivered
pursuant Section 7(m) on or before the date on which such delivery of such
opinions are required pursuant to Section 7(m).

 

f.             Comfort Letter. The Distribution Agent shall have received the
Comfort Letter required to be delivered pursuant Section 7(n) on or before the
date on which such delivery of such letter is required pursuant to Section 7(n).

 

g.             Representation Certificate. The Distribution Agent shall have
received the certificate required to be delivered pursuant to Section 7(1) on or
before the date on which delivery of such certificate is required pursuant to
Section 7(1).

 

h.             Secretary’s Certificate.  On or prior to the first Representation
Date, the Distribution Agent shall have received a certificate, signed on behalf
of the Company by its

 

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corporate Secretary, in form and substance reasonably satisfactory to the
Distribution Agent and its counsel.

 

i.              No Suspension. Trading in the Common Stock shall not have been
suspended on the Nasdaq Global Market and the Common Stock shall not have been
delisted from the Nasdaq Global Market.

 

j.              Other Materials. On each date on which the Company is required
to deliver a certificate pursuant to Section 7(1), the Company shall have
furnished to the Distribution Agent such appropriate further information,
certificates and documents as the Distribution Agent may reasonably request. All
such opinions, certificates, letters and other documents will be in compliance
with the provisions hereof. The Company will furnish the Distribution Agent with
such conformed copies of such opinions, certificates, letters and other
documents as the Distribution Agent shall reasonably request.

 

k.             Securities Act Filings Made. All filings with the Commission
required by Rule 424 under the Securities Act to have been filed prior to the
issuance of any Placement Notice hereunder shall have been made within the
applicable time period prescribed for such filing by Rule 424.

 

l.              Approval for Listing. The Placement Shares shall either have
been approved for listing on the Nasdaq Global Market, subject only to notice of
issuance, or the Company shall have filed an application for listing of the
Placement Shares on the Nasdaq Global Market at, or prior to, the issuance of
any Placement Notice.

 

m.           No Termination Event. There shall not have occurred any event that
would permit the Distribution Agent to terminate this Agreement pursuant to
Section 13(a).

 

11.        Indemnification and Contribution.

 

a.             Company Indemnification. The Company agrees to indemnify and hold
harmless the Distribution Agent, its partners, members, directors, officers,
employees and agents and each person, if any, who controls the Distribution
Agent within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act as follows:

 

i.            against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact included in any related
Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

 

ii.           against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body,

 

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commenced or threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 11(d) below) any such settlement is effected
with the written consent of the Company, which consent shall not unreasonably be
delayed or withheld; and

 

iii.          against any and all expense whatsoever, as incurred (including the
reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above, provided, however, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made solely in reliance upon and in
conformity with written information furnished to the Company by the Distribution
Agent expressly for use in the Registration Statement (or any amendment
thereto), or in any related Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto).

 

b.             Indemnification by the Distribution Agent.  The Distribution
Agent agrees to indemnify and hold harmless the Company and its directors and
each officer of the Company who signed the Registration Statement, and each
person, if any, who (i) controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or
is under common control with the Company against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 11(a),
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendments thereto) or in any related Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with information relating to the Distribution Agent and furnished to
the Company in writing by the Distribution Agent expressly for use therein.

 

c.             Procedure. Any party that proposes to assert the right to be
indemnified under this Section 11 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 11, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 11 and (ii) any
liability that it may have to any indemnified party under the foregoing
provision of this Section 11 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses

 

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except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based on advice of counsel
to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time for
all such indemnified party or parties. All such reasonable fees, disbursements
and other charges will be reimbursed by the indemnifying party promptly after
the indemnifying party receives a written invoice relating to such fees,
disbursements and other charges in reasonable detail. An indemnifying party will
not, in any event, be liable for any settlement of any action or claim effected
without its written consent. No indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 11 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent (1) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (2) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.

 

d.             Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 11 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or the
Distribution Agent, the Company and the Distribution Agent will contribute to
the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company
from persons other than the Distribution Agent, such as persons who control the
Company within the meaning of the Securities Act or the Exchange Act, officers
of the Company who signed the Registration Statement and directors of the
Company, who also may be liable for contribution) to which the Company and the
Distribution Agent may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Distribution Agent on the other hand. The relative benefits received by the
Company on the one hand and the Distribution Agent on the other hand shall be
deemed to be in the same proportion as the total Net Proceeds from the sale of
the Placement Shares (before deducting expenses) received by the Company bear to
the total

 

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compensation received by the Distribution Agent (before deducting expenses) from
the sale of Placement Shares on behalf of the Company. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Distribution Agent, on the other hand, with respect to the statements or
omission that resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering.  Such relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Distribution
Agent, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Distribution Agent agree that it would not be just and
equitable if contributions pursuant to this Section 11(d) were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense, or damage, or action in respect thereof, referred to above in this
Section 11(d) shall be deemed to include, for the purpose of this Section 11(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim to the
extent consistent with Section 11(c) hereof. Notwithstanding the foregoing
provisions of this Section 11(d), the Distribution Agent shall not be required
to contribute any amount in excess of the commissions received by it under this
Agreement and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 11(d), any person who controls a party to this
Agreement within the meaning of the Securities Act or the Exchange Act, and any
officers, directors, partners, employees or agents of each of the Distribution
Agent, will have the same rights to contribution as that party, and each officer
and director of the Company who signed the Registration Statement will have the
same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 11(d), will notify any
such party or parties from whom contribution may be sought, but the omission to
so notify will not relieve that party or parties from whom contribution may be
sought from any other obligation it or they may have under this
Section 11(d) except to the extent that the failure to so notify such other
party materially prejudiced the substantive rights or defenses of the party from
whom contribution is sought. Except for a settlement entered into pursuant to
the last sentence of Section 11(c) hereof, no party will be liable for
contribution with respect to any action or claim settled without its written
consent if such consent is required pursuant to Section 11(c) hereof.

 

12.        Representations and Agreements to Survive Delivery.  The indemnity
and contribution agreements contained in Section 11 of this Agreement and all
representations and warranties of the Company herein or in certificates
delivered by the Company pursuant hereto shall survive, as of their respective
dates, regardless of (i) any investigation made by or on behalf of the
Distribution Agent, any controlling persons, or the Company (or any of their
respective officers, directors or controlling persons), (ii) delivery and
acceptance of the Placement Shares and payment therefor or (iii) any termination
of this Agreement.

 

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13.        Termination.

 

a.             The Distribution Agent may terminate this Agreement, by notice to
the Company, as hereinafter specified at any time (1) if there has been, since
the time of execution of this Agreement or since the date as of which
information is given in the Prospectus, any Material Adverse Effect, or any
development that is reasonably likely to have a Material Adverse Effect or, in
the sole judgment of the Distribution Agent, is material and adverse and makes
it impractical or inadvisable to market the Placement Shares or to enforce
contracts for the sale of the Placement Shares, (2) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Distribution Agent, impracticable or inadvisable to market the
Placement Shares or to enforce contracts for the sale of the Placement Shares,
(3) if trading in the Common Stock has been suspended or limited by the
Commission or the Nasdaq Global Market, or if trading generally on the New York
Stock Exchange or the Nasdaq has been suspended or limited, or minimum prices
for trading have been fixed on the New York Stock Exchange or the Nasdaq, (4) if
any suspension of trading of any securities of the Company on any exchange or in
the over-the-counter market shall have occurred and be continuing, (5) if a
major disruption of securities settlements or clearance services in the United
States shall have occurred and be continuing, or (6) if a banking moratorium has
been declared by either U.S. Federal or New York authorities. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 9 (Payment of Expenses), Section 11
(Indemnification and Contribution), Section 12 (Representations and Agreements
to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial)
and Section 19 (Consent to Jurisdiction) hereof shall remain in full force and
effect notwithstanding such termination. If the Distribution Agent elects to
terminate this Agreement as provided in this Section 13(a), the Distribution
Agent shall provide the required notice as specified in Section 14 (Notices).

 

b.             The Company shall have the right, by giving ten (10) days notice
as specified in Section 14 (Notices) to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 9 (Payment of Expenses), Section 11 (Indemnification and
Contribution), Section 12 (Representations and Agreements to Survive Delivery),
Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19
(Consent to Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.

 

c.             The Distribution Agent shall have the right, by giving ten
(10) days notice as specified in Section 14 (Notices) to terminate this
Agreement in its sole discretion at any time after the date of this Agreement.
Any such termination shall be without liability of any party to any other party
except that the provisions of Section 9 (Payment of Expenses), Section 11
(Indemnification and Contribution), Section 12 (Representations and Agreements
to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial)
and Section 19 (Consent to Jurisdiction) hereof shall remain in full force and
effect notwithstanding the termination.

 

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d.             Unless earlier terminated pursuant to this Section 13, this
Agreement shall automatically terminate upon the issuance and sale of all of the
Placement Shares through the Distribution Agent on the terms and subject to the
conditions set forth herein except that the provisions of Section 9 (Payment of
Expenses), Section 11 (Indemnification and Contribution), Section 12
(Representations and Agreements to Survive Delivery), Section 18 (Governing Law
and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof
shall remain in full force and effect notwithstanding such termination.

 

e.             This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 13(a), (b), (c), or (d) above or otherwise by
mutual agreement of the parties; provided, however, that any such termination by
mutual agreement shall in all cases be deemed to provide that Section 9 (Payment
of Expenses), Section 11 (Indemnification and Contribution), Section 12
(Representations and Agreements to Survive Delivery), Section 18 (Governing Law
and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) shall
remain in full force and effect. Upon termination of this Agreement, the Company
shall not have any liability to the Distribution Agent for any discount,
commission or other compensation with respect to any Placement Shares not
otherwise sold by a Distribution Agent under this Agreement.

 

f.             Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided, however, that such
termination shall not be effective until the close of business on the date of
receipt of such notice by the Distribution Agent or the Company, as the case may
be. If such termination shall occur prior to the Settlement Date for any sale of
Placement Shares, such Placement Shares shall settle in accordance with the
provisions of this Agreement.

 

14.        Notices. All notices or other communications required or permitted to
be given by any party to any other party pursuant to the terms of this Agreement
shall be in writing, unless otherwise specified, and if sent to the Distribution
Agent, shall be delivered to:

 

Keefe, Bruyette & Woods, Inc.

787 Seventh Avenue

4th Floor

New York, New York 10019

Attention: General Counsel

Facsimile: (212) 541-6668

 

with a copy to:

 

Silver, Freedman, Taff & Tiernan LLP

3299 K Street, NW, Suite 100

Washington, D.C. 20007

Attention:    Philip R. Bevan

Telephone:  (202) 295-4500

Email:   rbeva@sfttlaw.com

 

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and if to the Company, shall be delivered to:

 

Unity Bancorp, Inc.

64 Old Highway 22

Clinton, New Jersey 08809

Attention: Alan Bedner

Telephone: (908) 713-4308

Email: alan.bedner@unitybank.com

 

with a copy to:

 

Windels Marx Lane & Mittendorf, LLP

120 Albany Street Plaza, 6th Floor

New Brunswick, New Jersey 08901

Attention: Robert A. Schwartz

Telephone:  (732) 846-7600

Email: rschwartz@windelsmarx.com

 

Each party to this Agreement may change such address for notices by sending to
the parties to this Agreement written notice of a new address for such purpose.
Each such notice or other communication shall be deemed given (i) when delivered
personally, by email, or by verifiable facsimile transmission (with an original
to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if
such day is not a Business Day, on the next succeeding Business Day, (ii) on the
next Business Day after timely delivery to a nationally-recognized overnight
courier and (iii) on the Business Day actually received if deposited in the U.S.
mail (certified or registered mail, return receipt requested, postage prepaid).
For purposes of this Agreement, “Business Day” shall mean any day on which the
New York Stock Exchange, the Nasdaq and commercial banks in the City of New York
are open for business.

 

An electronic communication (“Electronic Notice”) shall be deemed written notice
for purposes of this Section 14 if sent to the electronic mail address specified
by the receiving party under separate cover. Electronic Notice shall be deemed
received at the time the party sending Electronic Notice receives confirmation
of receipt by the receiving party. Any party receiving Electronic Notice may
request and shall be entitled to receive the notice on paper, in a nonelectronic
form (“Nonelectronic Notice”) which shall be sent to the requesting party within
ten (10) days of receipt of the written request for Nonelectronic Notice.

 

15.        Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, the Distribution Agent and their respective
successors and the affiliates, controlling persons, officers and directors
referred to in Section 11 hereof. References to any of the parties contained in
this Agreement shall be deemed to include the successors and permitted assigns
of such party. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Neither party may assign its rights or obligations under this
Agreement without the prior written consent of the other party.

 

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16.        Adjustments for Stock Splits. The parties acknowledge and agree that
all share-related numbers contained in this Agreement shall be adjusted to take
into account any share consolidation, stock split, stock dividend, corporate
domestication or similar event effected with respect to the Placement Shares.

 

17.        Entire Agreement; Amendment; Severability. This Agreement (including
all schedules and exhibits attached hereto and Placement Notices issued pursuant
hereto) constitutes the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral, among the
parties hereto with regard to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended except pursuant to a written instrument
executed by the Company and the Distribution Agent. In the event that any one or
more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable as written by a court of
competent jurisdiction, then such provision shall be given full force and effect
to the fullest possible extent that it is valid, legal and enforceable, and the
remainder of the terms and provisions herein shall be construed as if such
invalid, illegal or unenforceable term or provision was not contained herein,
but only to the extent that giving effect to such provision and the remainder of
the terms and provisions hereof shall be in accordance with the intent of the
parties as reflected in this Agreement.

 

18.        GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME. THE COMPANY AND EACH OF THE DISTRIBUTION AGENT EACH
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

19.        CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY
IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH
COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM
OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
(CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE
ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

 

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20.        Use of Information. The Distribution Agent may not use any
information gained in connection with this Agreement and the transactions
contemplated by this Agreement, including due diligence, to advise any party
with respect to transactions not expressly approved by the Company.

 

21.        Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile transmission or
email transmission in the form of a .pdf attachment.

 

22.        Effect of Headings.  The section and Exhibit headings herein are for
convenience only and shall not affect the construction hereof.

 

23.          Permitted Free Writing Prospectuses.  The Company represents and
warrants that it has not made, and agrees that unless it obtains the prior
consent of the Distribution Agent that it will not make, and the Distribution
Agent represents and warrants that is has not made, and agrees that unless it
obtains the prior consent of the Company that it will not make any offer
relating to the Placement Shares that would constitute an Issuer Free Writing
Prospectus, or that would otherwise constitute a “free writing prospectus,” as
defined in Rule 405, required to be filed with the Commission. Any such free
writing prospectus consented to by the Distribution Agent or by the Company, as
the case may be, is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents and warrants that it has treated and agrees
that it will treat each Permitted Free Writing Prospectus as an “issuer free
writing prospectus,” as defined in Rule 433, and has complied and will comply
with the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely filing with the Commission where required,
legending and record keeping. For the purposes of clarity, the parties hereto
agree that all free writing prospectuses, if any, listed in Exhibit 23 hereto
are Permitted Free Writing Prospectuses.

 

24.        Absence of Fiduciary Relationship. The Company acknowledges and
agrees that:

 

a.             the Distribution Agent is acting solely as agent in connection
with the public offering of the Placement Shares and in connection with each
transaction contemplated by this Agreement and the process leading to such
transactions, and no fiduciary or advisory relationship between the Company or
any of its respective affiliates, stockholders (or other equity holders),
creditors or employees or any other party, on the one hand, and the Distribution
Agent, on the other hand, has been or will be created in respect of any of the
transactions contemplated by this Agreement, irrespective of whether or not the
Distribution Agent has advised or is advising the Company on other matters, and
the Distribution Agent has no obligation to the Company with respect to the
transactions contemplated by this Agreement except the obligations expressly set
forth in this Agreement;

 

b.             it is capable of evaluating and understanding, and understands
and accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement;

 

c.             the Distribution Agent has not provided any legal, accounting,
regulatory or tax advice with respect to the transactions contemplated by this
Agreement and it has

 

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consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate;

 

d.             it is aware that the Distribution Agent and its affiliates are
engaged in a broad range of transactions which may involve interests that differ
from those of the Company and the Distribution Agent has no obligation to
disclose such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship or otherwise; and

 

e.             it waives, to the fullest extent permitted by law, any claims it
may have against the Distribution Agent for breach of fiduciary duty or alleged
breach of fiduciary duty in connection with the sale of Placement Shares under
this Agreement and agrees that the Distribution Agent shall not have any
liability (whether direct or indirect, in contract, tort or otherwise) to it in
respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on its behalf or in right of it or the Company, employees or
creditors of Company, other than in respect of the Distribution Agent’s
obligations under this Agreement and to keep information provided by the Company
to the Distribution Agent and their counsel confidential to the extent not
otherwise publicly-available.

 

25.        [Reserved.]

 

26.        Definitions.

 

As used in this Agreement, the following terms have the respective meanings set
forth below:

 

“Applicable Time” means (i) each Representation Date and (ii) the time of each
sale of any Placement Shares pursuant to this Agreement.

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433, relating to the Placement Shares that (1) is required to be
filed with the Commission by the Company, (2) is a “road show” that is a
“written communication” within the meaning of Rule 433(d)(8)(i) whether or not
required to be filed with the Commission, or (3) is exempt from filing pursuant
to Rule 433(d)(5)(i) because it contains a description of the Placement Shares
or of the offering that does not reflect the final terms, in each case in the
form filed or required to be filed with the Commission or, if not required to be
filed, in the form retained in the Company’s records pursuant to Rule 433(g).

 

“Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and
“Rule 433” refer to such rules under the Securities Act.

 

All references in this Agreement to financial statements and schedules and other
information that is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information that is incorporated by reference in the Registration Statement or
the Prospectus, as the case may be; provided, however, that any information that
has been “furnished” to rather than “filed” with the Commission under applicable
Commission rules shall not be deemed to be included, unless otherwise
specifically provided for herein.

 

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All references in this Agreement to the Registration Statement, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to EDGAR; all references in
this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free
Writing Prospectuses that, pursuant to Rule 433, are not required to be filed
with the Commission) shall be deemed to include the copy thereof filed with the
Commission pursuant to EDGAR; and all references in this Agreement to
“supplements” to the Prospectus shall include, without limitation, any
supplements, “wrappers” or similar materials prepared in connection with any
offering, sale or private placement of any Placement Shares by the Distribution
Agent outside of the United States.

 

[Remainder of the page intentionally left blank]

 

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If the foregoing correctly sets forth the understanding between the Company and
the Distribution Agent, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and the Distribution Agent.

 

 

Very truly yours,

 

 

 

 

 

UNITY BANCORP, INC.

 

 

 

 

 

 

By:

/s/ Alan J. Bedner

 

 

Name: Alan J. Bedner

 

 

Title: Executive Vice President & Chief Financial Officer

 

 

 

 

 

ACCEPTED as of the date first-above written:

 

 

 

KEEFE, BRUYETTE & WOODS, INC.

 

 

 

 

 

 

By:

/s/ Lisa Schultz

 

 

Name: Lisa Schultz

 

 

Title: Managing Director and Co-Head of Equity Capital Markets

 

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