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EXHIBIT 2
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated October 22,
1997 (this "Agreement"), is among HUBCO, Inc. ("HUBCO"), a New Jersey
corporation and registered bank holding company, Poughkeepsie Financial Corp. a
Delaware corporation and registered savings and loan holding company ("PFC"),
and Bank of the Xxxxxx, a Federal savings bank wholly owned by PFC ("BTH").
WHEREAS, the respective Boards of Directors of HUBCO and
PFC have each determined that it is in the best interests of HUBCO and PFC and
their respective stockholders for HUBCO to acquire PFC by merging PFC with and
into HUBCO with HUBCO surviving and PFC shareholders receiving the consideration
hereinafter set forth; and
WHEREAS, the respective Boards of Directors of PFC, HUBCO
and BTH have each duly adopted and approved this Agreement and the Board of
Directors of PFC has directed that it be submitted to PFC's shareholders for
approval; and
WHEREAS, As a condition for HUBCO to enter into this
Agreement, HUBCO has required that it receive an option on certain authorized
but unissued shares of PFC Common Stock (as hereinafter defined) and,
simultaneously with the execution of this Agreement, PFC is issuing an option to
HUBCO (the "HUBCO Stock Option") to purchase 2,000,000 shares of the authorized
and unissued PFC Common Stock at an option price of $7.875 per share, subject to
adjustment and subject to the terms and conditions set forth in the agreement
governing the HUBCO Stock Option;
NOW, THEREFORE, intending to be legally bound, the parties
hereto hereby agree as follows:
ARTICLE I - THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as hereafter defined), PFC shall be merged
with and into HUBCO (the "Merger") in accordance with the Delaware General
Corporation Law (the "DGCL") and the New Jersey Business Corporation Act (the
"NJBCA"), and HUBCO shall be the surviving corporation (the "Surviving
Corporation").
1.2 EFFECT OF THE MERGER. At the Effective Time, the
Surviving Corporation shall be considered the same business and corporate entity
as each of HUBCO and PFC and thereupon and thereafter, all the property, rights,
privileges, powers and franchises of each of HUBCO and PFC shall vest in the
Surviving Corporation and the Surviving Corporation shall be subject to and be
deemed to have assumed all of the debts, liabilities, obligations and duties of
each of HUBCO and PFC and shall have succeeded to all of each of their
relationships, as fully and to the same extent as if such property, rights,
privileges, powers, franchises, debts, liabilities, obligations, duties and
relationships had been originally acquired, incurred or entered into by the
Surviving Corporation. In addition, any reference to either of HUBCO and PFC in
any contract
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or document, whether executed or taking effect before or after the Effective
Time, shall be considered a reference to the Surviving Corporation if not
inconsistent with the other provisions of the contract or document; and any
pending action or other judicial proceeding to which either of HUBCO or PFC is a
party shall not be deemed to have abated or to have discontinued by reason of
the Merger, but may be prosecuted to final judgment, order or decree in the same
manner as if the Merger had not been made; or the Surviving Corporation may be
substituted as a party to such action or proceeding, and any judgment, order or
decree may be rendered for or against it that might have been rendered for or
against either of HUBCO or PFC if the Merger had not occurred.
1.3 CERTIFICATE OF INCORPORATION. As of the Effective
Time, the certificate of incorporation of HUBCO shall be the certificate of
incorporation of the Surviving Corporation until otherwise amended as provided
by law.
1.4 BY-LAWS. As of the Effective Time, the By-laws of
HUBCO shall be the By-laws of the Surviving Corporation until otherwise amended
as provided by law.
1.5 DIRECTORS AND OFFICERS. As of the Effective Time,
the directors of HUBCO (including the directors appointed pursuant to Section
5.18 hereof) shall be the directors of the Surviving Corporation. As of the
Effective Time, the officers of HUBCO shall be the officers of the Surviving
Corporation.
1.6 CLOSING DATE, CLOSING AND EFFECTIVE TIME. Unless
a different date, time and/or place are agreed to by the parties hereto, the
closing of the Merger (the "Closing") shall take place at 10:00 a.m., at the
offices of Pitney, Xxxxxx, Xxxx & Xxxxx, 000 Xxxxxx Xxxxx, Xxxxxxx Xxxx, Xxx
Xxxxxx, xx a date determined by HUBCO on at least seven business days notice
(the "Closing Notice") given to PFC, which date (the "Closing Date") shall be
not later than 15 business days following the receipt of all necessary
regulatory and governmental approvals and consents and the expiration of all
statutory waiting periods in respect thereof and the satisfaction or waiver of
all of the conditions to the consummation of the Merger specified in Article VI
hereof (other than the delivery of certificates, opinions and other instruments
and documents to be delivered at the Closing). In the Closing Notice, HUBCO
shall specify the "Determination Date" for purposes of determining the Median
Pre-Closing Price (as hereinafter defined), which date shall be not less than
seven business days nor more than ten business days prior to the Closing Date
set forth in the Closing Notice. The Merger shall become effective (and be
consummated) upon the later of the filing of certificates of merger, in form and
substance satisfactory to HUBCO and PFC, with the Secretary of State of the
State of New Jersey (the "New Jersey Certificate of Merger") and with the
Secretary of State of the State of Delaware (the "Delaware Certificate of
Merger"). The term "Effective Time" shall mean the close of business on the
first day when the certificates of merger in both New Jersey and Delaware have
been so filed. Immediately following the Closing, the New Jersey Certificate of
Merger shall be filed with the New Jersey Secretary of State and the Delaware
Certificate of Merger shall be filed with the Delaware Secretary of State.
ARTICLE II - CONVERSION OF PFC SHARES AND OPTIONS
2.1 CONVERSION OF PFC COMMON STOCK. Each share of
common stock, $.01 par value, of PFC ("PFC Common Stock"), issued and
outstanding immediately prior to the
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Effective Time shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted as follows:
(a) EXCHANGE RATIO. Subject to the provisions of
this Section 2.1, each share of PFC Common Stock issued and outstanding
immediately prior to the Effective Time (excluding shares to be cancelled
pursuant to Section 2.1(d)) shall be converted at the Effective Time into the
number of shares of Common Stock, no par value, of HUBCO ("HUBCO Common Stock")
equal to the exchange ratio (the "Exchange Ratio") determined as follows:
(i) If the Median Pre-Closing Price (as hereinafter
defined) is equal to or greater than $33.33, the
Exchange Ratio shall be 0.300;
(ii) If the Median Pre-Closing Price is less than
$33.33 but greater than $31.25, the Exchange Ratio
shall be equal to the quotient obtained by dividing
$10.00 by the Median Pre-Closing Price and rounding
the result to the nearest one-thousandth; and
(iii) If the Median Pre-Closing Price is equal to or
less than $31.25, the Exchange Ratio shall be 0.320;
provided, however, that if the Median Pre-Closing
Price is less than $25.75, the Board of Directors of
PFC shall have the right, exercisable only until
11:59 p.m. on the third business day following the
Determination Date (or the third business day
following receipt by PFC of the Closing Notice, if
later), to terminate this Agreement by giving HUBCO
notice of such termination, referring to this Section
2.1, and this Agreement shall be terminated pursuant
to such notice and Section 7.1(i), effective as of
11:59 p.m. on the third business day following
receipt of such notice by HUBCO, unless prior to
11:59 p.m. on the third business day following
receipt of such termination notice, HUBCO sends
notice to PFC agreeing that the Exchange Ratio shall
be equal to the quotient obtained by dividing $8.24
by the Median Pre-Closing Price.
The "Median Pre-Closing Price" of HUBCO Common
Stock shall mean the Median Price (as hereinafter defined) calculated based upon
the Closing Price (as hereinafter defined) of HUBCO Common Stock during the 10
trading days ending on and including the Determination Date. The "Closing Price"
shall mean the closing price of HUBCO Common Stock as supplied by the Nasdaq
Stock Market ("NASDAQ") and published in The Wall Street Journal with respect to
a trading day. The "Median Price" shall be determined by taking the price
half-way between the Closing Prices left after discarding the 4 lowest and 4
highest Closing Prices in the 10 day period. A trading day shall mean a day for
which a Closing Price is so supplied and published.
(b) CONVERSION OF PFC CERTIFICATES. At the
Effective Time, all shares of PFC Common Stock (other than those cancelled
pursuant to Section 2.1(d)) shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
certificate previously evidencing any such shares (other than those cancelled
pursuant to Section 2.1(d)) shall thereafter represent the right to receive the
Merger Consideration (as defined in Section 2.2(b)). The holders of such
certificates previously evidencing such shares of PFC Common Stock outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of PFC Common Stock except as otherwise provided herein
or by law.
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Such certificates previously evidencing such shares of PFC Common Stock (other
than those cancelled pursuant to Section 2.1(d)) shall be exchanged for
certificates evidencing shares of HUBCO Common Stock issued pursuant to this
Article II, upon the surrender of such certificates in accordance with this
Article II. No fractional shares of HUBCO Common Stock shall be issued, and, in
lieu thereof, a cash payment shall be made pursuant to Section 2.2(e).
(c) CAPITAL CHANGES. If between the date hereof
and the Effective Time the presently outstanding shares of HUBCO Common Stock
shall have been changed into a different number of shares or a different class,
by reason of any stock dividend, stock split, reclassification,
recapitalization, merger, combination or exchange of shares, the Exchange Ratio
and the definition of Closing Price shall be correspondingly adjusted to reflect
such stock dividend, stock split, reclassification, recapitalization, merger,
combination or exchange of shares; provided, however, that no adjustment shall
be made to reflect the 3% stock dividend which has been declared by HUBCO and is
payable to HUBCO shareholders of record on November 14, 1997.
(d) TREASURY SHARES. All shares of PFC Common
Stock held by PFC in its treasury or owned by HUBCO or by any of HUBCO's
wholly-owned subsidiaries, including Xxxxxx United Bank ("XXXxxx") (other than
shares held as trustee or in a fiduciary capacity and shares held as collateral
on or in lieu of a debt previously contracted) immediately prior to the
Effective Time shall be cancelled.
2.2 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. As of the Effective Time,
HUBCO shall deposit, or shall cause to be deposited, with XXXxxx, Trust
Department, or another bank or trust company designated by HUBCO and reasonably
acceptable to PFC (the "Exchange Agent"), for the benefit of the holders of
shares of PFC Common Stock, for exchange in accordance with this Article II,
through the Exchange Agent, certificates evidencing shares of HUBCO Common Stock
and cash in such amount such that the Exchange Agent possesses such number of
shares of HUBCO Common Stock and such amount of cash as are required to provide
all of the consideration required to be exchanged by HUBCO pursuant to the
provisions of this Article II (such certificates for shares of HUBCO Common
Stock, together with any dividends or distributions with respect thereto, and
cash being hereinafter referred to as the "Exchange Fund"). The Exchange Agent
shall, pursuant to irrevocable instructions, deliver the HUBCO Common Stock and
cash out of the Exchange Fund in accordance with Section 2.1. Except as
contemplated by Section 2.2(f) hereof, the Exchange Fund shall not be used for
any other purpose.
(b) EXCHANGE PROCEDURES. As soon as reasonably
practicable either before or after the Effective Time but in no event more
than five (5) business days after the Effective Time, HUBCO will instruct the
Exchange Agent to mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time evidenced outstanding
shares of PFC Common Stock (the "Certificates"), (i) a letter of
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transmittal (the form and substance of which is reasonably agreed to by HUBCO
and PFC prior to the Effective Time and which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Exchange Agent and which shall
have such other provisions as HUBCO may reasonably specify) and (ii)
instructions for effecting the surrender of the Certificates in exchange for
certificates evidencing shares of HUBCO Common Stock. Upon surrender of a
Certificate for cancellation to the Exchange Agent together with such letter of
transmittal, duly executed, and such other customary documents as may be
required pursuant to such instructions, the holder of such Certificate shall be
entitled to receive in exchange therefor (x) certificates evidencing that number
of whole shares of HUBCO Common Stock which such holder has the right to receive
in respect of the shares of PFC Common Stock formerly evidenced by such
Certificate in accordance with Section 2.1 and (y) cash in lieu of fractional
shares of HUBCO Common Stock to which such holder may be entitled pursuant to
Section 2.2(e) (the shares of HUBCO Common Stock and cash described in clauses
(x) and (y) being collectively referred to as the "Merger Consideration") and
the Certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of shares of PFC Common Stock which is not registered in
the transfer records of PFC, a certificate evidencing the proper number of
shares of HUBCO Common Stock and/or cash may be issued and/or paid in accordance
with this Article II to a transferee if the Certificate evidencing such shares
of PFC Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at any time
after the Effective Time to evidence only the right to receive upon such
surrender the Merger Consideration. HUBCO shall establish appropriate procedures
that will enable holders of unexchanged stock certificates of PFC's predecessors
(which certificates represent shares of, or the right to receive shares of, PFC
Common Stock) to directly exchange such certificates for the Merger
Consideration.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED
SHARES OF HUBCO COMMON STOCK. No dividends or other distributions declared or
made after the Effective Time with respect to HUBCO Common Stock with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of HUBCO Common Stock evidenced thereby,
and no other part of the Merger Consideration shall be paid to any such holder,
until the holder of such Certificate shall surrender such Certificate (or a
suitable affidavit of loss and customary bond). Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificates evidencing shares of HUBCO Common Stock
issued in exchange therefor, without interest, (i) promptly, the amount of any
cash payable with respect to a fractional share of HUBCO Common Stock to which
such holder may have been entitled pursuant to Section 2.2(e) and the amount of
dividends or other distributions with a record date on or after the Effective
Time theretofore paid with respect to such shares of HUBCO Common Stock, and
(ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date on or after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such shares of HUBCO Common Stock.
(d) NO FURTHER RIGHTS IN PFC COMMON STOCK. All
shares of HUBCO Common Stock issued and cash paid upon conversion of the shares
of PFC Common Stock in accordance with the terms hereof shall be deemed to have
been issued or paid in full satisfaction of all rights pertaining to such shares
of PFC Common Stock.
(e) NO FRACTIONAL SHARES OF HUBCO COMMON STOCK.
No certificates or scrip evidencing fractional shares of HUBCO Common Stock
shall be issued upon the surrender for exchange of Certificates and such
fractional share interests will not entitle the owner thereof to vote or to any
rights of a stockholder of HUBCO. Cash shall be paid in lieu of fractional
shares of HUBCO Common Stock, based upon the Median Pre-Closing Price of HUBCO
Common Stock.
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(f) TERMINATION OF EXCHANGE FUND. Any portion of
the Exchange Fund which remains undistributed to the holders of PFC Common
Stock for two years after the Effective Time shall be delivered to HUBCO, upon
demand, and any holders of PFC Common Stock who have not theretofore
complied with this Article II shall thereafter look only to HUBCO for the
Merger Consideration, dividends and distributions to which they are entitled.
(g) NO LIABILITY. Neither HUBCO nor the
Exchange Agent shall be liable to any holder of shares of PFC Common Stock for
any such shares of HUBCO Common Stock or cash (or dividends or distributions
with respect thereto) delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(h) WITHHOLDING RIGHTS. HUBCO shall be entitled
to deduct and withhold, or cause the Exchange Agent to deduct and withhold, from
funds provided by the holder or from the consideration otherwise payable
pursuant to this Agreement to any holder of PFC Common Stock, the minimum
amounts (if any) that HUBCO is required to deduct and withhold with respect to
the making of such payment under the Code (as defined in Section 3.8), or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by HUBCO, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the PFC Common Stock in
respect of which such deduction and withholding was made by HUBCO.
2.3 STOCK TRANSFER BOOKS. At the Effective Time, the
stock transfer books of PFC shall be closed and there shall be no further
registration of transfers of shares of PFC Common Stock thereafter on the
records of PFC. On or after the Effective Time, any Certificates presented to
the Exchange Agent or HUBCO for transfer shall be converted into the Merger
Consideration.
2.4 PFC STOCK OPTIONS. Each Stock Option (as defined
in Section 3.2) outstanding at the Effective Time shall be converted into an
option to purchase HUBCO Common Stock, wherein (i) the right to purchase shares
of PFC Common Stock pursuant to the Stock Option shall be converted into the
right to purchase that same number of shares of HUBCO Common Stock multiplied by
the Exchange Ratio, (ii) the option exercise price per share of HUBCO Common
Stock shall be the previous option exercise price per share of the PFC Common
Stock divided by the Exchange Ratio, and (iii) in all other material respects
the option shall be subject to the same terms and conditions as governed the
Stock Option on which it was based, including the length of time within which
the option may be exercised. Shares of HUBCO Common Stock issuable upon exercise
of Stock Options shall be covered by an effective registration statement on Form
S-8, and HUBCO shall file a registration statement on Form S-8 covering such
shares as soon as possible after the Effective Time.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PFC
References herein to "PFC Disclosure Schedule" shall mean
all of the disclosure schedules required by this Article III, dated as of the
date hereof and referenced to the specific sections and subsections of Article
III of this Agreement, which have been delivered on the date hereof by PFC to
HUBCO. PFC hereby represents and warrants to HUBCO as follows:
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3.1 CORPORATE ORGANIZATION.
(a) PFC is a corporation duly organized and
validly existing under the laws of the State of Delaware. PFC has the corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed and qualified would not have a
material adverse effect on the business, operations, assets or financial
condition of PFC and the PFC Subsidiaries (as defined below), taken as a whole.
PFC is registered as a savings and loan holding company under the Home Owners'
Loan Act, as amended (the "HOLA").
(b) Each PFC Subsidiary and its jurisdiction
of incorporation is listed in the PFC Disclosure Schedule. For purposes of this
Agreement, the term "PFC Subsidiary" means any corporation, partnership, joint
venture or other legal entity in which PFC, directly or indirectly, owns at
least a 50% stock or other equity interest or for which PFC, directly or
indirectly, acts as a general partner, provided that to the extent that any
representation or warranty set forth herein covers a period of time prior to the
date of this Agreement, the term "PFC Subsidiary" shall include any entity which
was a PFC Subsidiary at any time during such period. BTH is a savings bank duly
organized and validly existing in stock form under the laws of the United States
of America. All eligible accounts of depositors issued by BTH are insured by the
Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance
Corporation (the "FDIC") to the fullest extent permitted by law. PSB Associates,
Inc. ("PSB Associates") is a corporation duly organized and in active status
under the laws of the State of New York. PSB Associates is duly licensed to sell
life insurance, mutual funds, variable annuities and unit investment trusts.
Each PFC Subsidiary has the corporate power and authority to own or lease all of
its properties and assets and to carry on its business as it is now being
conducted and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed and
qualified would not have a material adverse effect on the business, operations,
assets or financial condition of PFC and the PFC Subsidiaries, taken as a whole.
(c) The PFC Disclosure Schedule sets forth true
and complete copies of the Certificate of Incorporation and By-laws, as in
effect on the date hereof, of PFC, BTH and PSB Associates.
3.2 CAPITALIZATION. The authorized capital stock of
PFC consists of 40,000,000 shares of PFC Common Stock and 2,000,000 shares of
serial preferred stock, $.01 par value per share ("PFC Preferred Stock"). As of
September 19, 1997, there were 12,700,325, shares of PFC Common Stock issued and
outstanding, including 105,000 shares of treasury stock, and no shares of PFC
Preferred Stock issued and outstanding. As of September 19, 1997, there were
1,275,394 shares of PFC Common Stock issuable upon exercise of outstanding stock
options. The PFC Disclosure Schedule sets forth (i) all options which may be
exercised for issuance of PFC Common Stock (collectively, the "Stock Options")
and the terms upon which the options may be exercised and (ii) true and complete
copies of each plan and a specimen of each form of agreement pursuant to which
any outstanding Stock Option was granted, including a list
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of each outstanding Stock Option issued pursuant thereto. All issued and
outstanding shares of PFC Common Stock, and all issued and outstanding shares of
capital stock of each PFC Subsidiary, have been duly authorized and validly
issued, and are fully paid and nonassessable. The authorized capital stock of
BTH and of PSB Associates is as set forth in the charter documents of BTH and
PSB Associates, respectively contained in the PFC Disclosure Schedule. All of
the outstanding shares of capital stock of each PFC Subsidiary are owned
(directly in the case of BTH, and indirectly in the case of each other PFC
Subsidiary) by PFC and are free and clear of any liens, encumbrances, charges,
restrictions or rights of third parties. Except for the Stock Options issued and
disclosed herein, the HUBCO Stock Option and any rights (the "PFC Rights")
pursuant to the BTH Rights Agreement dated as of May 1, 1988 (the "Rights
Plan"), neither PFC nor any PFC Subsidiary has granted or is bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the transfer, purchase, subscription or issuance of
any shares of capital stock of PFC or any PFC Subsidiary or any securities
representing the right to purchase, subscribe or otherwise receive any shares of
such capital stock or any securities convertible into any such shares, and there
are no agreements or understandings with respect to voting of any such shares.
3.3 AUTHORITY; NO VIOLATION.
(a) Subject to the approval of this Agreement and
the transactions contemplated hereby by all applicable regulatory authorities
and by the stockholders of PFC, and except as set forth in the PFC Disclosure
Schedule, PFC and BTH have the full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby in
accordance with the terms hereof. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the directors of PFC and BTH in accordance with their
respective Certificate of Incorporation and Charter and applicable laws and
regulations. Except for such approvals, no other corporate proceedings not
otherwise contemplated hereby on the part of PFC or BTH are necessary to
consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by PFC and BTH, and constitutes the valid and
binding obligation of each of PFC and BTH, enforceable against PFC and BTH in
accordance with its terms, except to the extent that enforcement may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the rights of
creditors of federal savings associations or their holding companies, (ii)
general equitable principles, and (iii) laws relating to the safety and
soundness of insured depository institutions and except that no representation
is made as to the effect or availability of equitable remedies or injunctive
relief.
(b) Neither the execution and delivery of
this Agreement by PFC or BTH, nor the consummation by PFC or BTH of the
transactions contemplated hereby in accordance with the terms hereof, or
compliance by PFC or BTH with any of the terms or provisions hereof, will (i)
violate any provision of PFC's or BTH's Certificate of Incorporation, Charter or
By-laws, (ii) assuming that the consents and approvals set forth below are duly
obtained, violate any statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction applicable to PFC, BTH or any of their
respective properties or assets, or (iii) except as set forth in the PFC
Disclosure Schedule, violate, conflict with, result in a breach of any
provisions of, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or
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result in the creation of any lien, security interest, charge or other
encumbrance upon any of the respective properties or assets of PFC or BTH under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which PFC or BTH is a party, or by which they or any of their
respective properties or assets may be bound or affected except, with respect to
(ii) and (iii) above, such as individually or in the aggregate will not have a
material adverse effect on the business, operations, assets or financial
condition of PFC and the PFC Subsidiaries, taken as a whole, and which will not
prevent or materially delay the consummation of the transactions contemplated
hereby. Except for consents and approvals of or filings or registrations with or
notices to the Board of Governors of the Federal Reserve System (the "FRB"), the
Office of Thrift Supervision (the "OTS"), the Securities and Exchange Commission
(the "SEC"), and the stockholders of PFC, no consents or approvals of or filings
or registrations with or notices to any third party or any public body or
authority are necessary on behalf of PFC or BTH in connection with (x) the
execution and delivery by PFC and BTH of this Agreement and (y) the consummation
by PFC of the Merger, and the consummation by PFC and BTH of the other
transactions contemplated hereby, except (i) such as are listed in the PFC
Disclosure Schedule and (ii) such as individually or in the aggregate will not
(if not obtained) have a material adverse effect on the business, operations,
assets or financial condition of PFC and the PFC Subsidiaries taken as a whole
or prevent or materially delay the consummation of the transactions contemplated
hereby. To the best of PFC's knowledge, no fact or condition exists which PFC
has reason to believe will prevent it and BTH from obtaining the aforementioned
consents and approvals.
3.4 FINANCIAL STATEMENTS.
(a) The PFC Disclosure Schedule sets forth copies
of the consolidated balance sheets of BTH as of December 31, 1995 and 1996, and
the related consolidated statements of income, changes in stockholders' equity
and cash flows for the periods ended December 31, in each of the three years
1994 through 1996, in each case accompanied by the audit report of Deloitte &
Touche LLP ("Deloitte & Touche"), independent certified public accountants with
respect to BTH, and the unaudited consolidated statement of condition of PFC as
of June 30, 1997 and the related unaudited statements of income and cash flows
for the six months ended June 30, 1997 and 1996, as reported in PFC's Quarterly
Report on Form 10-Q, filed with the SEC (collectively, the "PFC Financial
Statements"). The PFC Financial Statements (including the related notes) have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied during the periods involved (except as may be
indicated therein or in the notes thereto and except for the omission of notes
from interim financial statements), and fairly present the consolidated
financial condition of BTH or PFC, as the case may be, as of the respective
dates set forth therein, and the related consolidated statements of income,
changes in stockholders' equity and cash flows fairly present the results of the
consolidated operations, changes in stockholders' equity and cash flows of PFC
for the respective periods set forth therein.
(b) The books and records of PFC and each of
its Subsidiaries are being maintained in material compliance with applicable
legal and accounting requirements.
(c) Except as and to the extent reflected,
disclosed or reserved against in the PFC Financial Statements (including the
notes thereto), as of June 30, 1997, neither PFC
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nor any PFC Subsidiary had any liabilities, whether absolute, accrued,
contingent or otherwise, material to the business, operations, assets or
financial condition of PFC and the PFC Subsidiaries, taken as a whole, which
were required by GAAP (consistently applied) to be disclosed in PFC's
consolidated statement of condition as of June 30, 1997 or the notes thereto.
Since June 30, 1997, neither PFC nor any PFC Subsidiary has incurred any
liabilities except in the ordinary course of business and consistent with
prudent business practice, except as related to the transactions contemplated by
this Agreement or except as set forth in the PFC Disclosure Schedule.
3.5 BROKER'S AND OTHER FEES. Except for Advest,
Inc. ("Advest"), neither PFC nor any of its Subsidiaries nor any of their
respective directors or officers has employed any broker or finder or incurred
any liability for any broker's or finder's fees or commissions in connection
with any of the transactions contemplated by this Agreement. The agreement with
Advest is set forth in the PFC Disclosure Schedule. Other than pursuant to the
agreement with Advest, there are no fees (other than time charges billed at
usual and customary rates) payable to any consultants, including lawyers and
accountants, in connection with this transaction or which would be triggered by
consummation of this transaction or the termination of the services of such
consultants by PFC or any of its Subsidiaries.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as disclosed in the PFC Disclosure Schedule,
there has not been any material adverse change in the business, operations,
assets or financial condition of PFC and the PFC Subsidiaries, taken as a
whole, since June 30, 1997, and to the best of PFC's knowledge, no fact or
condition exists which PFC believes will cause such a material adverse change
in the future; provided, however, that a material adverse change shall not be
deemed to include (i) any change in the value of the respective investment and
loan portfolios of PFC and the PFC Subsidiaries as the result of a change in
interest rates generally, (ii) any change occurring after the date hereof in
any federal or state law, rule or regulation or in GAAP, which change affects
banking institutions generally, (iii) reasonable expenses incurred in
connection with this Agreement and the transactions contemplated hereby, or
(iv) actions or omissions of PFC or any PFC Subsidiary taken with the prior
written consent of HUBCO in contemplation of the transactions contemplated
hereby (including without limitation any actions taken by PFC or BTH pursuant
to Section 5.13 of this Agreement).
(b) Except as set forth in the PFC Disclosure
Schedule, neither PFC nor any of its Subsidiaries has taken or permitted any of
the actions set forth in Section 5.2 hereof between June 30, 1997 and the date
hereof and, except for execution of this Agreement and the other documents
contemplated hereby, PFC and its Subsidiaries have conducted their respective
businesses only in the ordinary course, consistent with past practice.
3.7 LEGAL PROCEEDINGS. Except as disclosed in the PFC
Disclosure Schedule, and except for ordinary routine litigation incidental to
the business of PFC and the PFC Subsidiaries, neither PFC nor any PFC
Subsidiary is a party to any, and there are no pending or, to the best of PFC's
knowledge, threatened legal, administrative, arbitral or other proceedings,
claims, actions or governmental investigations of any nature against PFC or any
PFC Subsidiary which, if decided adversely to PFC or an PFC Subsidiary, are
reasonably likely to have a material adverse effect on the business,
operations, assets or financial condition of PFC and the
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PFC Subsidiaries taken as a whole. Except as disclosed in the PFC Disclosure
Schedule, neither PFC nor any PFC Subsidiary is a party to any order, judgment
or decree entered in any lawsuit or proceeding which is material to PFC or such
PFC Subsidiary.
3.8 TAXES AND TAX RETURNS. Except as disclosed in the PFC
Disclosure Schedule:
(a) PFC and each PFC Subsidiary has duly filed (and
until the Effective Time will so file) all returns, declarations, reports,
information returns and statements ("Returns") required to be filed by it on or
before the Effective Time in respect of any federal, state and local taxes
(including withholding taxes, penalties or other payments required) and has duly
paid (and until the Effective Time will so pay) all such taxes due and payable,
other than taxes or other charges which are being contested in good faith (and
disclosed to HUBCO in writing) or against which reserves have been established.
PFC and each PFC Subsidiary has established (and until the Effective Time will
establish) on its books and records reserves that are adequate for the payment
of all federal, state and local taxes not yet due and payable, but are incurred
in respect of PFC or such PFC Subsidiary through such date. None of the federal
or state income tax returns of PFC or any PFC Subsidiary have been examined by
the Internal Revenue Service (the "IRS") or the New York Division of Taxation
within the past six years. To the best knowledge of PFC, there are no audits or
other administrative or court proceedings presently pending nor any other
disputes pending with respect to, or claims asserted for, taxes or assessments
upon PFC or any PFC Subsidiary, nor has PFC or any PFC Subsidiary given any
currently outstanding waivers or comparable consents regarding the application
of the statute of limitations with respect to any taxes or Returns.
(b) Neither PFC nor any PFC Subsidiary (i) has
requested any extension of time within which to file any Return, which Return
has not since been filed, (ii) is a party to any agreement providing for the
allocation or sharing of taxes, (iii) is required to include in income any
adjustment pursuant to Section 481(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), by reason of a voluntary change in accounting method
initiated by PFC or such PFC Subsidiary (nor does PFC have any knowledge that
the IRS has proposed any such adjustment or change of accounting method), or
(iv) has filed a consent pursuant to Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply.
(c) From January 1, 1992 until the date hereof, to the
best of PFC's knowledge, there has been no "ownership change" of PFC as defined
in Section 382(g) of the Code.
3.9 EMPLOYEE, DIRECTOR AND OFFICER BENEFIT PLANS.
(a) Except as set forth on the PFC Disclosure
Schedule, neither PFC nor any PFC Subsidiary maintains or contributes to any
"employee pension benefit plan" (the "PFC Pension Plans") within the meaning
of Section 3 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), "employee welfare benefit plan" (the "PFC Welfare Plans") within the
meaning of Section 3 of ERISA, stock option plan, stock purchase plan, deferred
compensation plan, severance plan, bonus plan, employment agreement, director
retirement program or other similar plan, program or arrangement. Neither PFC
nor any PFC Subsidiary has, since September 2, 1974, contributed to any
"Multiemployer Plan," as such term is defined in Section 3(37) of XXXXX.
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(x) XXX has delivered to HUBCO in the PFC
Disclosure Schedules (or previously made available to HUBCO) a complete and
accurate copy of each of the following with respect to each of the PFC Pension
Plans and PFC Welfare Plans, if any: (i) plan document, summary plan
description, and summary of material modifications (if not available, a detailed
description of the foregoing); (ii) trust agreement or insurance contract, if
any; (iii) most recent IRS determination letter, if any; (iv) most recent
actuarial report, if any; and (v) most recent annual report on Form 5500.
(c) The present value of all accrued benefits,
both vested and non-vested, under each of the PFC Pension Plans subject to Title
IV of ERISA, based upon the actuarial assumptions used for funding purposes in
the most recent actuarial valuation prepared by such PFC Pension Plan's actuary,
did not exceed the then current value of the assets of such plans allocable to
such accrued benefits. To the best of PFC's knowledge, the actuarial assumptions
then utilized for such plans were reasonable and appropriate as of the last
valuation date and reflect then current market conditions.
(d) During the last six years, the Pension Benefit
Guaranty Corporation ("PBGC") has not asserted any claim for liability against
PFC or any PFC Subsidiary which has not been paid in full.
(e) All premiums (and interest charges and
penalties for late payment, if applicable) due to the PBGC with respect to each
PFC Pension Plan have been paid. All contributions required to be made to each
PFC Pension Plan under the terms thereof, ERISA or other applicable law have
been timely made, and all amounts properly accrued to date as liabilities of PFC
which have not been paid have been properly recorded on the books of PFC.
(f) Except as disclosed in the PFC Disclosure
Schedule, each of the PFC Pension Plans, PFC Welfare Plans and each other
employee benefit plan and arrangement identified on the PFC Disclosure Schedule
has been operated in compliance in all material respects with the provisions of
ERISA, the Code, all regulations, rulings and announcements promulgated or
issued thereunder, and all other applicable governmental laws and regulations.
Furthermore, except as disclosed in the PFC Disclosure Schedule, if PFC
maintains any PFC Pension Plan, PFC has received or applied for a favorable
determination letter from the IRS which takes into account the Tax Reform Act
of 1986 and (to the extent it mandates currently applicable requirements)
subsequent legislation, and PFC is not aware of any fact or circumstance which
would disqualify any plan.
(g) To the best knowledge of PFC, no non-exempt
prohibited transaction, within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any PFC Welfare Plan or PFC
Pension Plan that would result in any material tax or penalty for PFC or any
PFC Subsidiary.
(h) No PFC Pension Plan or any trust created
thereunder has been terminated, nor have there been any "reportable events"
(notice of which has not been waived by the PBGC), within the meaning of
Section 4034(b) of ERISA, with respect to any PFC Pension Plan.
(i) No "accumulated funding deficiency," within
the meaning of Section 412 of the Code, has been incurred with respect to any
PFC Pension Plan.
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(j) There are no material pending or, to the best
knowledge of PFC, material threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of, or against any of the PFC Pension Plans
or the PFC Welfare Plans, any trusts created thereunder or any other plan or
arrangement identified in the PFC Disclosure Schedule.
(k) Except as disclosed in the PFC Disclosure
Schedule, no PFC Pension Plan or PFC Welfare Plan provides medical or death
benefits (whether or not insured) beyond an employee's retirement or other
termination of service, other than (i) coverage mandated by law or pursuant to
conversion or continuation rights set out in such Plan or an insurance policy
providing benefits thereunder, or (ii) death benefits under any PFC Pension
Plan.
(l) Except with respect to customary health, life
and disability benefits, there are no unfunded benefit obligations which are not
accounted for by reserves shown on the PFC Financial Statements and established
in accordance with GAAP.
(m) With respect to each PFC Pension Plan and PFC
Welfare Plan that is funded wholly or partially through an insurance policy,
there will be no liability of PFC or any PFC Subsidiary as of the Effective Time
under any such insurance policy or ancillary agreement with respect to such
insurance policy in the nature of a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or partially
out of events occurring prior to the Effective Time.
(n) Except (i) for payments and other benefits
due pursuant to the employment agreements included within the PFC Disclosure
Schedule, and (ii) as set forth in the PFC Disclosure Schedule, or as expressly
agreed to by HUBCO in writing either pursuant to this Agreement or otherwise,
the consummation of the transactions contemplated by this Agreement will not (x)
entitle any current or former employee of PFC or any PFC Subsidiary to severance
pay, unemployment compensation or any similar payment, or (y) accelerate the
time of payment or vesting, or increase the amount of any compensation or
benefits due to any current or former employee under any PFC Pension Plan or PFC
Welfare Plan.
(o) Except for the PFC Pension Plans and the PFC
Welfare Plans, and except as set forth on the PFC Disclosure Schedule, PFC
has no deferred compensation agreements, understandings or obligations for
payments or benefits to any current or former director, officer or employee of
PFC or any PFC Subsidiary or any predecessor of any thereof. The PFC Disclosure
Schedule sets forth (or lists, if previously delivered to HUBCO): (i) true and
complete copies of the agreements, understandings or obligations with respect to
each such current or former director, officer or employee, and (ii) the most
recent actuarial or other calculation of the present value of such payments or
benefits.
(p) Except as set forth in the PFC Disclosure
Schedule, PFC does not maintain or otherwise pay for life insurance policies
(other than group term life policies on employees) with respect to any
director, officer or employee. The PFC Disclosure Schedule lists each such
insurance policy and any agreement with a party other than the insurer with
respect to the payment, funding or assignment of such policy. To the best of
PFC's knowledge, neither PFC nor any PFC Pension Plan or PFC Welfare Plan owns
any individual or group insurance policies issued by an insurer which has been
found to be insolvent or is in rehabilitation pursuant to a state proceeding.
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3.10 REPORTS.
(a) The PFC Disclosure Schedule lists, and as to
item (i) below PFC has previously delivered to HUBCO a complete copy of, each
(i) final registration statement, prospectus, annual, quarterly or current
report and definitive proxy statement filed by PFC since January 1, 1996
pursuant to the Securities Act of 1933, as amended (the "1933 Act"), or the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and (ii)
communication (other than general advertising materials and press releases)
mailed by PFC to its stockholders as a class since January 1, 1996, and each
such communication, as of its date, complied in all material respects with all
applicable statutes, rules and regulations and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading; provided
that information as of a later date shall be deemed to modify information as of
an earlier date.
(b) Since January 1, 1996, (i) each of PFC and
BTH has filed all reports that it was required to file under the 1934 Act, and
(ii) each of PFC, BTH and PSB Associates has duly filed all material forms,
reports and documents which it was required to file with each agency charged
with regulating any aspect of its business, in each case in form which was
correct in all material respects, and, subject to permission from such
regulatory authorities, PFC promptly will deliver or make available to HUBCO
accurate and complete copies of such reports. As of their respective dates, each
such form, report, or document, and each such final registration statement,
prospectus, annual, quarterly or current report, definitive proxy statement or
communication, complied in all material respects with all applicable statutes,
rules and regulations and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided that
information contained in any such document as of a later date shall be deemed to
modify information as of an earlier date. The PFC Disclosure Schedule lists the
dates of all examinations of PFC, BTH or PSB Associates conducted by the OTS
since January 1, 1996 and the dates of any responses thereto submitted by PFC,
BTH or PSB Associates.
3.11 PFC AND BTH INFORMATION. The information relating to
PFC and BTH, this Agreement, and the transactions contemplated hereby (except
for information relating solely to HUBCO) to be contained in the Proxy
Statement-Prospectus (as defined in Section 5.6(a) hereof) to be delivered to
stockholders of PFC in connection with the solicitation of their approval of the
Merger, as of the date the Proxy Statement-Prospectus is mailed to stockholders
of PFC, and up to and including the date of the meeting of stockholders to which
such Proxy Statement-Prospectus relates, will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.12 COMPLIANCE WITH APPLICABLE LAW. Except as set forth
in the PFC Disclosure Schedule, PFC and each PFC Subsidiary holds all licenses,
franchises, permits and authorizations necessary for the lawful conduct of its
business and has complied with and is not in default in any respect under any
applicable law, statute, order, rule, regulation, policy and/or guideline of any
federal, state or local governmental authority relating to PFC or such PFC
Subsidiary (including, without limitation, consumer, community and fair lending
laws) (other
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than where the failure to have a license, franchise, permit or authorization or
where such default or noncompliance will not result in a material adverse effect
on the business, operations, assets or financial condition of PFC and the PFC
Subsidiaries taken as a whole), and PFC has not received notice of violation of,
and does not know of any violations of, any of the above.
3.13 CERTAIN CONTRACTS.
(a) Except for plans referenced in Section 3.9 and
as disclosed in the PFC Disclosure Schedule, (i) neither PFC nor any PFC
Subsidiary is a party to or bound by any written contract or any understanding
with respect to the employment of any officers, employees, directors or
consultants, and (ii) the consummation of the transactions contemplated by this
Agreement will not (either alone or upon the occurrence of any additional acts
or events) result in any payment (whether of severance pay or otherwise)
becoming due from PFC or any PFC Subsidiary to any officer, employee, director
or consultant thereof. The PFC Disclosure Schedule lists, and either the PFC
Disclosure Schedule sets forth true and correct copies of or PFC has previously
made available to HUBCO, all severance or employment agreements with officers,
directors, employees, agents or consultants to which PFC or any PFC Subsidiary
is a party.
(b) Except as disclosed in the PFC Disclosure
Schedule and except for loan commitments, loan agreements and loan instruments
entered into or issued by BTH in the ordinary course of business, (i) as of the
date of this Agreement, neither PFC nor any PFC Subsidiary is a party to or
bound by any commitment, agreement or other instrument which is material to the
business, operations, assets or financial condition of PFC and the PFC
Subsidiaries taken as a whole, (ii) no commitment, agreement or other
instrument to which PFC or any PFC Subsidiary is a party or by which any of
them is bound limits the freedom of PFC or any PFC Subsidiary to compete in any
line of business or with any person, and (iii) neither PFC nor any PFC
Subsidiary is a party to any collective bargaining agreement.
(c) Except as disclosed in the PFC Disclosure
Schedule, neither PFC nor any PFC Subsidiary or, to the best knowledge of PFC,
any other party thereto, is in default in any material respect under any
material lease, contract, mortgage, promissory note, deed of trust, loan or
other commitment (except those under which BTH is or will be the creditor) or
arrangement, except for defaults which individually or in the aggregate would
not have a material adverse effect on the business, operations, assets or
financial condition of PFC and the PFC Subsidiaries, taken as a whole.
3.14 PROPERTIES AND INSURANCE.
(a) Except as set forth in the PFC Disclosure
Schedule, PFC or a PFC Subsidiary has good and, as to owned real property,
marketable title to all material assets and properties, whether real or
personal, tangible or intangible, reflected in PFC's consolidated balance sheet
as of December 31, 1996, or owned and acquired subsequent thereto (except to
the extent that such assets and properties have been disposed of for fair value
in the ordinary course of business since December 31, 1996), subject to no
encumbrances, liens, mortgages, security interests or pledges, except (i) those
items that secure liabilities that are reflected in said balance sheet or the
notes thereto or that secure liabilities incurred in the ordinary course of
business after the date of such balance sheet, (ii) statutory liens for amounts
not yet delinquent or which are being contested in good faith, (iii) such
encumbrances, liens, mortgages, security interests, pledges and title
imperfections that are not in the aggregate material to the business,
operations,
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assets, and financial condition of PFC and the PFC Subsidiaries taken as a
whole, and (iv) with respect to owned real property, title imperfections noted
in title reports delivered to HUBCO prior to the date hereof. Except as affected
by the transactions contemplated hereby, PFC or one or more of its Subsidiaries
as lessees have the right under valid and subsisting leases to occupy, use,
possess and control all real property leased by PFC and such Subsidiaries in all
material respects as presently occupied, used, possessed and controlled by PFC
and its Subsidiaries.
(b) The business operations and all insurable
properties and assets of PFC and each PFC Subsidiary are insured for their
benefit against all risks which, in the reasonable judgment of the management
of PFC, should be insured against, in each case under policies or bonds issued
by insurers of recognized responsibility, in such amounts with such deductibles
and against such risks and losses as are in the opinion of the management of
PFC adequate for the business engaged in by PFC and the PFC Subsidiaries. As of
the date hereof, neither PFC nor any PFC Subsidiary has received any notice of
cancellation or notice of a material amendment of any such insurance policy or
bond, and to the best of PFC's knowledge, is not in default under any such
policy or bond, no coverage thereunder is being disputed, and all material
claims thereunder have been filed in a timely fashion. The PFC Disclosure
Schedule sets forth in summary form a list of all insurance policies of PFC and
the PFC Subsidiaries.
3.15 MINUTE BOOKS. The minute books of PFC, BTH and PSB
Associates contain records of all meetings and other corporate action held
of their respective stockholders and Boards of Directors (including committees
of their respective Boards of Directors) that are complete and accurate in all
material respects.
3.16 ENVIRONMENTAL MATTERS. Except as set forth in the PFC
Disclosure Schedule:
(a) Neither PFC nor any PFC Subsidiary has received
any written notice, citation, claim, assessment, proposed assessment or demand
for abatement alleging that PFC or such PFC Subsidiary (either directly or as a
trustee or fiduciary, or as a successor-in-interest in connection with the
enforcement of remedies to realize the value of properties serving as
collateral for outstanding loans) is responsible for the correction or cleanup
of any condition resulting from the violation of any law, ordinance or other
governmental regulation regarding environmental matters, which correction or
cleanup would be material to the business, operations, assets or financial
condition of PFC and the PFC Subsidiaries taken as a whole. PFC has no
knowledge that any toxic or hazardous substances or materials have been
emitted, generated, disposed of or stored on any real property owned or leased
by PFC or any PFC Subsidiary, as OREO or otherwise, or owned or controlled by
PFC or any PFC Subsidiary as a trustee or fiduciary (collectively,
"Properties"), in any manner that violates any presently existing federal,
state or local law or regulation governing or pertaining to such substances and
materials, the violation of which would have a material adverse effect on the
business, operations, assets or financial condition of PFC and the PFC
Subsidiaries, taken as a whole. Except as described in the PFC Disclosure
Schedule, none of the Properties is located in the State of New Jersey or the
State of Connecticut.
(b) PFC has no knowledge that any of the Properties
has been operated in any manner in the three years prior to the date of this
Agreement that violated any applicable federal, state or local law or
regulation governing or pertaining to toxic or hazardous substances
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and materials, the violation of which would have a material adverse effect on
the business, operations, assets or financial condition of PFC and the PFC
Subsidiaries taken as a whole.
(c) To the best of PFC's knowledge, PFC, each
PFC Subsidiary and any and all of their tenants or subtenants have all necessary
permits and have filed all necessary registrations material to permit the
operation of the Properties in the manner in which the operations are currently
conducted under all applicable federal, state or local environmental laws,
excepting only those permits and registrations the absence of which would not
have a material adverse effect upon the operations of requiring the permit or
registration.
(d) To the knowledge of PFC, there are no
underground storage tanks on, in or under any of the Properties and no
underground storage tanks have been closed or removed from any of the Properties
while the property was owned, operated or controlled by PFC or any PFC
Subsidiary.
3.17 RESERVES. As of June 30, 1997, each of the allowance
for loan losses and the reserve for OREO properties in the PFC Financial
Statements was adequate pursuant to GAAP (consistently applied), and the
methodology used to compute each of the loan loss reserve and the reserve for
OREO properties complies in all material respects with GAAP (consistently
applied) and all applicable policies of the OTS.
3.18 NO PARACHUTE PAYMENTS. Except as set forth on the PFC
Disclosure Schedule, no officer, director, employee or agent (or former officer,
director, employee or agent) of PFC or any PFC Subsidiary is entitled now, or
will or may be entitled to as a consequence of this Agreement or the Merger, to
any payment or benefit from PFC, a PFC Subsidiary, HUBCO or any HUBCO Subsidiary
which if paid or provided would constitute an "excess parachute payment," as
defined in Section 280G of the Code or regulations promulgated thereunder.
3.19 AGREEMENTS WITH BANK REGULATORS. Neither PFC nor any
PFC Subsidiary is a party to any agreement or memorandum of understanding with,
or a party to any commitment letter, board resolution submitted to a regulatory
authority or similar undertaking to, or is subject to any order or directive by,
or is a recipient of any extraordinary supervisory letter from, any court,
governmental authority or other regulatory or administrative agency or
commission, domestic or foreign ("Governmental Entity") which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies or its management, except for those the
existence of which has been disclosed in writing to HUBCO by PFC prior to the
date of this Agreement, nor has PFC been advised by any Governmental Entity that
it is contemplating issuing or requesting (or is considering the appropriateness
of issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission, except as disclosed in writing to HUBCO by PFC prior to the date of
this Agreement. Neither PFC nor any PFC Subsidiary is required by Section 32 of
the Federal Deposit Insurance Act to give prior notice to a Federal banking
agency of the proposed addition of an individual to its board of directors or
the employment of an individual as a senior executive officer, except to the
extent caused by BTH's formation of PFC or the reorganization (the
"Reorganization") by which PFC became the holding company for BTH, or except as
otherwise disclosed in writing to HUBCO by PFC prior to the date of this
Agreement.
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3.20 DISCLOSURE. No representation or warranty contained
in Article III of this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements herein
not misleading.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF HUBCO
References herein to the "HUBCO Disclosure Schedule"
shall mean all of the disclosure schedules required by this Article IV, dated as
of the date hereof and referenced to the specific sections and subsections of
Article IV of this Agreement, which have been delivered on the date hereof by
HUBCO to PFC. HUBCO hereby represents and warrants to PFC as follows:
4.1 CORPORATE ORGANIZATION.
(a) HUBCO is a corporation duly organized and
validly existing under the laws of the State of New Jersey. HUBCO has the
corporate power and authority to own or lease all of its properties and assets
and to carry on its business as it is now being conducted, and is duly licensed
or qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed and qualified would not have a
material adverse effect on the business, operations, assets or financial
condition of HUBCO or the HUBCO Subsidiaries (defined below), taken as a whole.
HUBCO is registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended (the "BHCA").
(b) Each of the HUBCO Subsidiaries is listed in
the HUBCO Disclosure Schedule. For purposes of this Agreement, the term "HUBCO
Subsidiary" means any corporation, partnership, joint venture or other legal
entity in which HUBCO, directly or indirectly, owns at least a 50% stock or
other equity interest or for which HUBCO, directly or indirectly, acts as a
general partner, provided that to the extent that any representation or warranty
set forth herein covers a period of time prior to the date of this Agreement,
the term "HUBCO Subsidiary" shall include any entity which was a HUBCO
Subsidiary at any time during such period. Each HUBCO Subsidiary is duly
organized and validly existing under the laws of the jurisdiction of its
incorporation. XXXxxx is duly organized and validly existing under the laws of
the State of New Jersey. Lafayette American Bank and Trust Company ("Lafayette")
is duly organized and validly existing under the laws of the State of
Connecticut. All eligible accounts of depositors issued by XXXxxx and Lafayette
are insured by the Bank Insurance Fund ("BIF") of the FDIC to the fullest extent
permitted by law. Each HUBCO Subsidiary has the corporate power and authority to
own or lease all of its properties and assets and to carry on its business as it
is now being conducted and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed and qualified would not have a material adverse effect on the business,
operations, assets or financial condition of HUBCO and the HUBCO Subsidiaries,
taken as a whole. The HUBCO Disclosure Schedule sets forth true and complete
copies of the Certificate of Incorporation and By-laws of HUBCO as in effect on
the date hereof.
4.2 CAPITALIZATION. The authorized capital stock of
HUBCO consists of 51,500,000 shares of HUBCO Common Stock and 10,300,000 shares
of preferred stock ("HUBCO
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Authorized Preferred Stock"). As of September 30, 1997, there were 21,624,469
shares of HUBCO Common Stock issued and outstanding, excluding 0 shares of
treasury stock. Since such date, and from time to time hereafter, HUBCO may sell
or repurchase shares of HUBCO Common Stock. As of September 30, 1997, there were
22,160 shares of HUBCO Authorized Preferred Stock outstanding, all of which are
designated Series B, no par value, Convertible Preferred Stock.
Except for shares issuable under or arising from the
Agreement and Plan of Merger, dated August 18, 1997 (the "Southington
Agreement"), by and among HUBCO, Lafayette and The Bank of Southington
("Southington"), and except as otherwise described in the HUBCO Disclosure
Schedule, there are no shares of HUBCO Common Stock issuable upon the exercise
of outstanding stock options or otherwise. All issued and outstanding shares of
HUBCO Common Stock and HUBCO Authorized Preferred Stock, and all issued and
outstanding shares of capital stock of HUBCO's Subsidiaries, have been duly
authorized and validly issued, are fully paid, nonassessable and free of
preemptive rights, and are free and clear of all liens, encumbrances, charges,
restrictions or rights of third parties. All of the outstanding shares of
capital stock of the HUBCO Subsidiaries are owned by HUBCO free and clear of any
liens, encumbrances, charges, restrictions or rights of third parties. Except
for the shares issuable under the Southington Agreement and except as otherwise
described in the HUBCO Disclosure Schedule, neither HUBCO nor any HUBCO
Subsidiary has granted or is bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
transfer, purchase or issuance of any shares of capital stock of HUBCO or any
HUBCO Subsidiary or any securities representing the right to purchase, subscribe
or otherwise receive any shares of such capital stock or any securities
convertible into any such shares, and there are no agreements or understandings
with respect to voting of any such shares.
4.3 AUTHORITY; NO VIOLATION.
(a) Subject to the receipt of all necessary
governmental approvals, HUBCO has full corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms hereof. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly approved by the Board of Directors of HUBCO in
accordance with its Certificate of Incorporation and applicable laws and
regulations. Except for such approvals, no other corporate proceedings on the
part of HUBCO are necessary to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by HUBCO and
constitutes a valid and binding obligation of HUBCO, enforceable against HUBCO
in accordance with its terms, except to the extent that enforcement may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership or other similar laws now or hereafter in effect
relating to or affecting the enforcement of creditors' rights generally or the
rights of creditors of bank holding companies, (ii) general equitable
principles, and (iii) laws relating to the safety and soundness of insured
depository institutions and except that no representation is made as to the
effect or availability of equitable remedies or injunctive relief.
(b) Neither the execution or delivery of
this Agreement by HUBCO, nor the consummation by HUBCO of the transactions
contemplated hereby in accordance with the terms hereof, or compliance by HUBCO
with any of the terms or provisions hereof will (i) violate any provision of the
Certificate of Incorporation or By-laws of HUBCO, (ii) assuming
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that the consents and approvals set forth below are duly obtained, violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to HUBCO, any HUBCO Subsidiary, or any of their respective
properties or assets, or (iii) violate, conflict with, result in a breach of any
provision of, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the properties or
assets of HUBCO or any HUBCO Subsidiary under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which HUBCO is a party, or
by which it or any of their properties or assets may be bound or affected,
except, with respect to (ii) and (iii) above, such as individually or in the
aggregate will not have a material adverse effect on the business, operations,
assets or financial condition of HUBCO and the HUBCO Subsidiaries, taken as a
whole, and which will not prevent or materially delay the consummation of the
transactions contemplated hereby. Except for consents and approvals of or
filings or registrations with or notices to the FRB, the OTS and the SEC, no
consents or approvals of or filings or registrations with or notices to any
third party or any public body or authority are necessary on behalf of HUBCO in
connection with (x) the execution and delivery by HUBCO of this Agreement, and
(y) the consummation by HUBCO of the Merger and the other transactions
contemplated hereby, except such as are listed in the HUBCO Disclosure Schedule
or in the aggregate will not (if not obtained) have a material adverse effect on
the business, operations, assets or financial condition of HUBCO. To the best of
HUBCO's knowledge, no fact or condition exists which HUBCO has reason to believe
will prevent it from obtaining the aforementioned consents and approvals.
4.4 FINANCIAL STATEMENTS.
(a) The HUBCO Disclosure Schedule sets forth
copies of the consolidated statements of financial condition of HUBCO as of
December 31, 1995 and 1996, and the related consolidated statements of income,
changes in stockholders' equity and of cash flows for the periods ended December
31, in each of the three fiscal years 1994 through 1996, in each case
accompanied by the audit report of Xxxxxx Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx"),
independent public accountants with respect to HUBCO, and the unaudited
consolidated statement of condition of HUBCO as of June 30, 1997 and the related
unaudited consolidated statements of income and cash flows for the three and six
months ended June 30, 1997 and 1996, as reported in HUBCO's Quarterly Report on
Form 10-Q, filed with the SEC under the 1934 Act (collectively, the "HUBCO
Financial Statements"). The HUBCO Financial Statements (including the related
notes) have been prepared in accordance with GAAP consistently applied during
the periods involved (except as may be indicated therein or in the notes
thereto), and fairly present the consolidated financial position of HUBCO as of
the respective dates set forth therein, and the related consolidated statements
of income, changes in stockholders' equity and of cash flows (including the
related notes, where applicable) fairly present the consolidated results of
operations, changes in stockholders' equity and cash flows of HUBCO for the
respective fiscal periods set forth therein.
(b) The books and records of HUBCO and the HUBCO
Subsidiaries are being maintained in material compliance with applicable legal
and accounting requirements, and reflect only actual transactions.
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(c) Except as and to the extent reflected,
disclosed or reserved against in the HUBCO Financial Statements (including the
notes thereto), as of June 30, 1997 neither HUBCO nor any of the HUBCO
Subsidiaries had any obligation or liability, whether absolute, accrued,
contingent or otherwise, material to the business, operations, assets or
financial condition of HUBCO or any of the HUBCO Subsidiaries which were
required by GAAP (consistently applied) to be disclosed in HUBCO's consolidated
statement of condition as of June 30, 1997 or the notes thereto. Except for the
transactions contemplated by this Agreement, and other proposed acquisitions by
HUBCO since June 30, 1997 reflected in any Form 8-K filed by HUBCO with the SEC,
neither HUBCO nor any HUBCO Subsidiary has incurred any liabilities since June
30, 1997 except in the ordinary course of business and consistent with past
practice.
4.5 BROKER'S AND OTHER FEES. Neither HUBCO nor any of
its directors or officers has employed any broker or finder or incurred any
liability for any broker's or finder's fees or commissions in connection with
any of the transactions contemplated by this Agreement.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. There has not
been any material adverse change in the business, operations, assets or
financial condition of HUBCO and HUBCO's Subsidiaries taken as a whole since
June 30, 1997 and to the best of HUBCO's knowledge, except for the effects of
the transactions contemplated by the Southington Agreement and the agreements by
which HUBCO is to acquire Security National Bank & Trust Company of New Jersey
and its holding company, Fiduciary Investment Company of New Jersey (the
"Effects of Announced Acquisitions"), no facts or condition exists which HUBCO
believes will cause such a material adverse change in the future.
4.7 LEGAL PROCEEDINGS. Except as disclosed in the
HUBCO Disclosure Schedule, and except for ordinary routine litigation incidental
to the business of HUBCO or its Subsidiaries, neither HUBCO nor any of its
Subsidiaries is a party to any, and there are no pending or, to the best of
HUBCO's knowledge, threatened legal, administrative, arbitral or other
proceedings, claims, actions or governmental investigations of any nature
against HUBCO or any of its Subsidiaries which, if decided adversely to HUBCO or
its Subsidiaries, are reasonably likely to have a material adverse effect on the
business, operations, assets or financial condition of HUBCO or its
Subsidiaries. Except as disclosed in the HUBCO Disclosure Schedule, neither
HUBCO nor HUBCO's Subsidiaries is a party to any order, judgment or decree
entered in any lawsuit or proceeding which is material to HUBCO or its
Subsidiaries.
4.8 REPORTS. Since January 1, 1996, HUBCO has filed
all reports that it was required to file with the SEC under the 1934 Act, all of
which complied in all material respects with all applicable requirements of the
1934 Act and the rules and regulations adopted thereunder. As of their
respective dates, each such report and each registration statement, proxy
statement, form or other document filed by HUBCO with the SEC, including without
limitation, any financial statements or schedules included therein, did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading,
provided that information as of a later date shall be deemed to modify
information as of an earlier date. Since January 1, 1996, HUBCO and each HUBCO
Subsidiary has duly filed all material forms, reports and documents which they
were required to file with each agency charged with regulating any aspect of
their business.
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4.9 HUBCO INFORMATION. The information relating to HUBCO
and its Subsidiaries (including, without limitation, information regarding
other transactions which HUBCO is required to disclose), this Agreement and the
transactions contemplated hereby in the Registration Statement and Proxy
Statement-Prospectus (as defined in Section 5.6(a) hereof), as of the date of
the mailing of the Proxy Statement-Prospectus, and up to and including the date
of the meeting of stockholders of PFC to which such Proxy Statement-Prospectus
relates, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Registration Statement shall comply as to form in all
material respects with the provisions of the 1933 Act, the 1934 Act and the
rules and regulations promulgated thereunder.
4.10 COMPLIANCE WITH APPLICABLE LAW. Except as set forth
in the HUBCO Disclosure Schedule, each of HUBCO and HUBCO's Subsidiaries holds
all material licenses, franchises, permits and authorizations necessary for the
lawful conduct of its business, and has complied with and is not in default in
any respect under any applicable law, statute, order, rule, regulation, policy
and/or guideline of any federal, state or local governmental authority relating
to HUBCO or HUBCO's Subsidiaries (including without limitation consumer,
community and fair lending laws) (other than where such default or noncompliance
will not result in a material adverse effect on the business, operations, assets
or financial condition of HUBCO and HUBCO's Subsidiaries taken as a whole) and
HUBCO has not received notice of violation of, and does not know of any
violations of, any of the above.
4.11 FUNDING AND CAPITAL ADEQUACY. At the Effective
Time, after giving pro forma effect to the Merger and any other acquisition
which HUBCO or its Subsidiaries have agreed to consummate, HUBCO will be deemed
"well capitalized" under prompt corrective action regulatory capital
requirements.
4.12 HUBCO COMMON STOCK. As of the date hereof, HUBCO
has available and reserved shares of HUBCO Common Stock sufficient for issuance
pursuant to the Merger and upon the exercise of Stock Options subsequent
thereto. The HUBCO Common Stock to be issued hereunder pursuant to the Merger,
and upon exercise of the Stock Options, when so issued, will be duly authorized
and validly issued, fully paid, nonassessable, free of preemptive rights and
free and clear of all liens, encumbrances or restrictions created by or through
HUBCO, with no personal liability attaching to the ownership thereof. The HUBCO
Common Stock to be issued hereunder pursuant to the Merger, and upon exercise of
the Stock Options, when so issued, will be registered under the 1933 Act and
issued in accordance with all applicable state and federal laws, rules and
regulations.
4.13 AGREEMENTS WITH BANK REGULATORS. Neither HUBCO nor
any HUBCO Subsidiary is a party to any agreement or memorandum of understanding
with, or a party to any commitment letter, board resolution submitted to a
regulatory authority or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
any Government Entity which restricts materially the conduct of its business, or
in any manner relates to its capital adequacy, its credit or reserve policies or
its management, except for those the existence of which has been disclosed in
writing to PFC by HUBCO prior to the date of this Agreement, nor has HUBCO been
advised by any Governmental Entity that it is contemplating issuing or
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requesting (or is considering the appropriateness of issuing or requesting) any
such order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission, except as disclosed
in writing to PFC by HUBCO prior to the date of this Agreement. Neither HUBCO
nor any HUBCO Subsidiary is required by Section 32 of the Federal Deposit
Insurance Act to give prior notice to a Federal banking agency of the proposed
addition of an individual to its board of directors or the employment of an
individual as a senior executive officer, except as disclosed in writing to PFC
by HUBCO prior to the date of this Agreement.
4.14 TAXES AND TAX RETURNS.
(a) HUBCO and HUBCO's subsidiaries have duly
filed (and until the Effective Time will so file) all Returns required to be
filed by them in respect of any federal, state and local taxes (including
withholding taxes, penalties or other payments required) and have duly paid (and
until the Effective Time will so pay) all such taxes due and payable, other than
taxes or other charges which are being contested in good faith (and disclosed to
PFC in writing). HUBCO and HUBCO's subsidiaries have established on their books
and records reserves that are adequate for the payment of all federal, state and
local taxes not yet due and payable, but are incurred in respect of HUBCO
through such date. The HUBCO Disclosure Schedule identifies the federal income
tax returns of HUBCO and its Subsidiaries which have been examined by the IRS
within the past six years. No deficiencies were asserted as a result of such
examinations which have not been resolved and paid in full. The HUBCO Disclosure
Schedule identifies the applicable state income tax returns of HUBCO and its
Subsidiaries which have been examined by the applicable authorities. No
deficiencies were asserted as a result of such examinations which have not been
resolved and paid in full. To the best knowledge of HUBCO, there are no audits
or other administrative or court proceedings presently pending nor any other
disputes pending with respect to, or claims asserted for, taxes or assessments
upon HUBCO or its Subsidiaries, nor has HUBCO or its Subsidiaries given any
currently outstanding waivers or comparable consents regarding the application
of the statute of limitations with respect to any taxes or Returns.
(b) Except as set forth in the HUBCO Disclosure
Schedule, neither HUBCO nor any Subsidiary of HUBCO (i) has requested any
extension of time within which to file any Return which Return has not since
been filed, (ii) is a party to any agreement providing for the allocation or
sharing of taxes, (iii) is required to include in income any adjustment
pursuant to Section 481(a) of the Code, by reason of a voluntary change in
accounting method initiated by HUBCO or any of its Subsidiaries (nor does HUBCO
have any knowledge that the IRS has proposed any such adjustment or change of
accounting method) or (iv) has filed a consent pursuant to Section 341(f) of
the Code or agreed to have Section 341(f)(2) of the Code apply.
4.15 EMPLOYEE BENEFIT PLANS.
(a) HUBCO and its Subsidiaries maintain or
contribute to certain "employee pension benefit plans" (the "HUBCO Pension
Plans"), as such term is defined in Section 3(2)(A) of ERISA, and "employee
welfare benefit plans" (the "HUBCO Welfare Plans"), as such term is defined in
Section 3(1) of ERISA. Since September 2, 1974, neither HUBCO nor its
subsidiaries have contributed to any "Multiemployer Plan", as such term is
defined in Section 3(37) of ERISA.
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(b) HUBCO is not aware of any fact or
circumstance which would disqualify any HUBCO Pension Plan or HUBCO Welfare Plan
that could not be retroactively corrected (in accordance with the procedures of
the IRS).
(c) The present value of all accrued benefits
under each of the HUBCO Pension Plans subject to Title IV of ERISA, based upon
the actuarial assumptions used for purposes of the most recent actuarial
valuation prepared by such HUBCO Pension Plan's actuary, did not exceed the then
current value of the assets of such plans allocable to such accrued benefits.
(d) During the last six years, the PBGC has
not asserted any claim for liability against HUBCO or any of its subsidiaries
which has not been paid in full.
(e) All premiums (and interest charges and
penalties for late payment, if applicable) due to the PBGC with respect to each
HUBCO Pension Plan have been paid. All contributions required to be made to each
HUBCO Pension Plan under the terms thereof, ERISA or other applicable law have
been timely made, and all amounts properly accrued to date as liabilities of
HUBCO which have not been paid have been properly recorded on the books of
HUBCO.
(f) No "accumulated funding deficiency", within
the meaning of Section 412 of the Code, has been incurred with respect to any of
the HUBCO Pension Plans.
(g) There are no pending or, to the best knowledge
of HUBCO, threatened or anticipated claims (other than routine claims for
benefits) by, on behalf of or against any of the HUBCO Pension Plans or the
HUBCO Welfare Plans, any trusts created thereunder or any other plan or
arrangement identified in the HUBCO Disclosure Schedule.
(h) Except with respect to customary health, life
and disability benefits or as disclosed in the HUBCO Disclosure Schedule,
HUBCO has no unfunded benefit obligations which are not accounted for by
reserves shown on the financial statements and established under GAAP or
otherwise noted on such financial statements.
4.16 CONTRACTS. Except as disclosed in the HUBCO
Disclosure Schedule, neither HUBCO nor any of its Subsidiaries, or to the best
knowledge of HUBCO, any other party thereto, is in default in any material
respect under any material lease, contract, mortgage, promissory note, deed of
trust, loan or other commitment (except those under which a banking subsidiary
of HUBCO is or will be the creditor) or arrangement, except for defaults which
individually or in the aggregate would not have a material adverse effect on the
business, operations, assets or financial condition of HUBCO and its
subsidiaries, taken as a whole.
4.17 PROPERTIES AND INSURANCE.
(a) HUBCO and its Subsidiaries have good and, as
to owned real property, marketable title to all material assets and properties,
whether real or personal, tangible or intangible, reflected in HUBCO's
consolidated balance sheet as of December 31, 1996, or owned and acquired
subsequent thereto (except to the extent that such assets and properties have
been disposed of for fair value in the ordinary course of business since
December 31, 1996), subject to no encumbrances, liens, mortgages, security
interests or pledges, except (i) those items that secure liabilities that are
reflected in said balance sheet or the notes thereto or that secure liabilities
incurred in the ordinary course of business after the date of such balance
sheet, (ii) statutory liens
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for amounts not yet delinquent or which are being contested in good faith, (iii)
such encumbrances, liens, mortgages, security interests, pledges and title
imperfections that are not in the aggregate material to the business,
operations, assets, and financial condition of HUBCO and its subsidiaries taken
as a whole and (iv) with respect to owned real property, title imperfections
noted in title reports. Except as disclosed in the HUBCO Disclosure Schedule,
HUBCO and its Subsidiaries as lessees have the right under valid and subsisting
leases to occupy, use, possess and control all property leased by HUBCO or its
Subsidiaries in all material respects as presently occupied, used, possessed and
controlled by HUBCO and its Subsidiaries.
(b) The business operations and all insurable
properties and assets of HUBCO and its Subsidiaries are insured for their
benefit against all risks which, in the reasonable judgment of the management
of HUBCO, should be insured against, in each case under policies or bonds
issued by insurers of recognized responsibility, in such amounts with such
deductibles and against such risks and losses as are in the opinion of the
management of HUBCO adequate for the business engaged in by HUBCO and its
Subsidiaries. As of the date hereof, neither HUBCO nor any of its Subsidiaries
has received any notice of cancellation or notice of a material amendment of
any such insurance policy or bond or is in default under any such policy or
bond, no coverage thereunder is being disputed and all material claims
thereunder have been filed in a timely fashion.
4.18. ENVIRONMENTAL MATTERS. Except as disclosed in the
HUBCO Disclosure Schedule, neither HUBCO nor any of its Subsidiaries has
received any written notice, citation, claim, assessment, proposed assessment or
demand for abatement alleging that HUBCO or any of its Subsidiaries (either
directly or as a successor-in-interest in connection with the enforcement of
remedies to realize the value of properties serving as collateral for
outstanding loans) is responsible for the correction or cleanup of any condition
resulting from the violation of any law, ordinance or other governmental
regulation regarding environmental matters which correction or cleanup would be
material to the business, operations, assets or financial condition of HUBCO and
its Subsidiaries taken as a whole. Except as disclosed in the HUBCO Disclosure
Schedule, HUBCO has no knowledge that any toxic or hazardous substances or
materials have been emitted, generated, disposed of or stored on any property
currently owned or leased by HUBCO or any of its subsidiaries in any manner that
violates or, after the lapse of time is reasonably likely to violate, any
presently existing federal, state or local law or regulation governing or
pertaining to such substances and materials, the violation of which would have a
material adverse effect on the business, operations, assets or financial
condition of HUBCO and its Subsidiaries, taken as a whole.
4.19 RESERVES. As of June 30, 1997, the allowance for
possible loan losses in the HUBCO Financial Statements was adequate based upon
all factors required to be considered by HUBCO at that time in determining the
amount of such allowance. The methodology used to compute the allowance for
possible loan losses complies in all material respects with all applicable FDIC,
Connecticut Department of Banking and New Jersey Department of Banking policies.
As of June 30, 1997, the valuation allowance for OREO properties in the HUBCO
Financial Statements was adequate based upon all factors required to be
considered by HUBCO at that time in determining the amount of such allowance.
4.20 DISCLOSURE. No representation or warranty contained
in Article IV of this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements herein not
misleading.
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ARTICLE V - COVENANTS OF THE PARTIES
5.1 CONDUCT OF THE BUSINESS OF PFC AND BTH. During the
period from the date of this Agreement to the Effective Time, PFC and BTH
shall, and shall cause each PFC Subsidiary to, conduct their respective
businesses only in the ordinary course and consistent with prudent business
practice, except for transactions permitted hereunder or with the prior
written consent of HUBCO, which consent will not be unreasonably withheld.
Each of PFC and BTH also shall use its reasonable best efforts to (i) preserve
its business organization and that of the PFC Subsidiaries intact, (ii)
keep available to itself and the PFC Subsidiaries the present services of
its employees and those of such PFC Subsidiaries, and (iii) preserve for
itself and HUBCO the goodwill of its customers and those of the PFC
Subsidiaries and others with whom business relationships exist.
5.2 NEGATIVE COVENANTS AND DIVIDEND COVENANTS. From the
date hereof to the Effective Time, except as otherwise approved by HUBCO in
writing, or as set forth in the PFC Disclosure Schedule, or as permitted or
required by this Agreement, neither PFC nor BTH will:
(a) change any provision of its Certificate
of Incorporation or By-laws or any similar governing documents;
(b) change the number of shares of its authorized
or issued capital stock (other than upon exercise of stock options or warrants
described on the PFC Disclosure Schedule in accordance with the terms thereof)
or issue or grant any option, warrant, call, commitment, subscription, right to
purchase or agreement of any character relating to its authorized or issued
capital stock, or any securities convertible into shares of such stock, or
split, combine or reclassify any shares of its capital stock, or declare, set
aside or pay any dividend, or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock; provided,
however, that from the date hereof to the Effective Time, PFC may declare, set
aside or pay cash dividends per share of PFC Common Stock aggregating (i) the
cash dividends per share declared, set aside or paid by HUBCO during such period
multiplied by 0.320 (the maximum Exchange Ratio) minus (ii) $0.01 (the amount
per share required to redeem the PFC Rights); provided, further, that the amount
of any such dividends shall be adjusted, if and to the extent necessary in the
opinion of Xxxxxx Xxxxxxxx, independent accountants for HUBCO, so that the
declaration, setting aside and payment of such dividends will not disqualify the
Merger for pooling of interests accounting treatment.
(c) grant any severance or termination pay
(other than pursuant to written policies or contracts of PFC in effect on the
date hereof and disclosed to HUBCO in the PFC Disclosure Schedule) to, or enter
into or amend any employment or severance agreement with, any of its directors,
officers or employees; adopt any new employee benefit plan or arrangement of any
type; or award any increase in compensation or benefits to its directors,
officers or employees, except in each case as specified in Section 5.2 of the
PFC Disclosure Schedule;
(d) sell or dispose of any substantial amount
of assets or voluntarily incur any significant liabilities other than in the
ordinary course of business consistent with past practices and policies or in
response to substantial financial demands upon the business of PFC or BTH;
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(e) make any capital expenditures other than
pursuant to binding commitments existing on the date hereof, expenditures
necessary to maintain existing assets in good repair, and expenditures described
in business plans or budgets previously furnished to HUBCO;
(f) file any applications or make any contract
with respect to branching or site location or relocation;
(g) agree to acquire in any manner whatsoever
(other than to realize upon collateral for a defaulted loan) any business or
entity or make any new investments in securities other than investments in
government or agency bonds having a maturity of less than five years;
(h) make any material change in its accounting
methods or practices, other than changes required in accordance with generally
accepted accounting principles or regulatory authorities;
(i) take any action that would result in any of
its representations and warranties contained in Article III of this Agreement
not being true and correct in any material respect at the Effective Time or that
would cause any of its conditions to Closing not to be satisfied;
(j) without first conferring with HUBCO, make
or commit to make any new loan or other extension of credit in an amount of
$3,000,000 or more, renew for a period in excess of one year any existing loan
or other extension of credit in an amount of $3,000,000 or more, or increase by
$3,000,000 or more the aggregate credit outstanding to any borrower or group of
affiliated borrowers, except such loan initiations, renewals or increases that
are committed as of the date of this Agreement and identified on the PFC
Disclosure Schedule and residential mortgage loans made in the ordinary course
of business in accordance with past practice; or
(k) agree to do any of the foregoing.
5.3 NO SOLICITATION. So long as this Agreement remains
in effect, PFC and BTH shall not, directly or indirectly, encourage or solicit
or hold discussions or negotiations with, or provide any information to, any
person, entity or group (other than HUBCO) concerning any merger or sale of
shares of capital stock or sale of substantial assets or liabilities not in the
ordinary course of business, or similar transactions involving PFC or BTH (an
"Acquisition Transaction"). Notwithstanding the foregoing, PFC may enter into
discussions or negotiations or provide information in connection with an
unsolicited possible Acquisition Transaction if the Board of Directors of PFC,
after consulting with counsel, determines in the exercise of its fiduciary
responsibilities that such discussions or negotiations should be commenced or
such information should be furnished. PFC shall promptly communicate to HUBCO
the terms of any proposal, whether written or oral, which it may receive in
respect of any such Acquisition Transaction and the fact that it is having
discussions or negotiations with a third party about an Acquisition Transaction.
5.4 CURRENT INFORMATION. During the period from the date
of this Agreement to the Effective Time, each of PFC and HUBCO will cause one or
more of its designated
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representatives to confer with representatives of the other party on a monthly
or more frequent basis regarding its business, operations, properties, assets
and financial condition and matters relating to the completion of the
transactions contemplated herein. On a monthly basis, PFC agrees to provide
HUBCO, and HUBCO agrees to provide PFC, with internally prepared profit and loss
statements no later than 21 days after the close of each calendar month. As soon
as reasonably available, but in no event more than 45 days after the end of each
fiscal quarter (other than the last fiscal quarter of each fiscal year) ending
on or after June 30, 1997, PFC will deliver to HUBCO and HUBCO will deliver to
PFC their respective quarterly reports on Form 10-Q, as filed under the 1934
Act. As soon as reasonably available, but in no event more than 90 days after
the end of each calendar year, PFC will deliver to HUBCO and HUBCO will deliver
to PFC their respective Annual Reports on Form 10-K as filed under the 1934 Act.
5.5 ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY.
(a) PFC and BTH shall permit HUBCO and
its representatives, and HUBCO shall permit, and cause each HUBCO Subsidiary to
permit, PFC and its representatives, reasonable access to their respective
properties, and shall disclose and make available to HUBCO and its
representatives, or PFC and its representatives, as the case may be, all books,
papers and records relating to its assets, stock ownership, properties,
operations, obligations and liabilities, including, but not limited to, all
books of account (including the general ledger), tax records, minute books of
directors' and stockholders' meetings, organizational documents, by-laws,
material contracts and agreements, filings with any regulatory authority,
accountants' work papers, litigation files, plans affecting employees, and any
other business activities or prospects in which HUBCO and its representatives or
PFC and its representatives may have a reasonable interest. Neither party shall
be required to provide access to or to disclose information where such access or
disclosure would violate or prejudice the rights of any customer, would
contravene any law, rule, regulation, order or judgment or would waive any
privilege. The parties will use their reasonable best efforts to obtain waivers
of any such restriction (other than waivers of the attorney-client privilege)
and in any event make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
Notwithstanding the foregoing, PFC acknowledges that HUBCO may be involved in
discussions concerning other potential acquisitions and HUBCO shall not be
obligated to disclose such information to PFC except as such information is
disclosed to HUBCO's shareholders generally.
(b) All information furnished by the parties
hereto previously in connection with transactions contemplated by this Agreement
or pursuant hereto shall be used solely for the purpose of evaluating the Merger
contemplated hereby and shall be treated as the sole property of the party
delivering the information until consummation of the Merger contemplated hereby,
and if such Merger shall not occur, each party and each party's advisors shall
return to the other party all documents or other materials containing,
reflecting or referring to such information, will not retain any copies of such
information, shall use its reasonable best efforts to keep confidential all such
information, and shall not directly or indirectly use such information for any
competitive or other commercial purposes. In the event that the Merger
contemplated hereby does not occur, all documents, notes and other writings
prepared by a party hereto or its advisors based on information furnished by the
other party shall be promptly destroyed. The obligation to keep such information
confidential shall continue for five years from the date the proposed Merger is
abandoned but shall not apply to (i) any information which (A) the party
receiving the information can establish by convincing evidence was already in
its
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possession prior to the disclosure thereof to it by the other party; (B) was
then generally known to the public; (C) became known to the public through no
fault of the party receiving such information; or (D) was disclosed to the party
receiving such information by a third party not bound by an obligation of
confidentiality; or (ii) disclosures pursuant to a legal requirement or in
accordance with an order of a court of competent jurisdiction.
5.6 REGULATORY MATTERS.
(a) For the purposes of holding the Stockholders
Meeting (as such term is defined in Section 5.7 hereof), and qualifying under
applicable federal and state securities laws the HUBCO Common Stock to be
issued to PFC stockholders in connection with the Merger, the parties hereto
shall cooperate in the preparation and filing by HUBCO with the SEC of a
Registration Statement including a combined proxy statement and prospectus
satisfying all applicable requirements of applicable state and federal laws,
including the 1933 Act, the 1934 Act and applicable state securities laws and
the rules and regulations thereunder (such proxy statement and prospectus in
the form mailed by PFC and HUBCO to the PFC shareholders together with any and
all amendments or supplements thereto, being herein referred to as the "Proxy
Statement-Prospectus" and the various documents to be filed by HUBCO under the
1933 Act with the SEC to register the HUBCO Common Stock for sale, including
the Proxy Statement-Prospectus, are referred to herein as the "Registration
Statement").
(b) HUBCO shall furnish PFC with such information
concerning HUBCO and its Subsidiaries (including, without limitation,
information regarding other transactions which HUBCO is required to disclose)
as is necessary in order to cause the Proxy Statement-Prospectus, insofar as it
relates to such corporations, to comply with Section 5.6(a) hereof. HUBCO
agrees promptly to advise PFC if at any time prior to the Stockholders Meeting,
any information provided by HUBCO in the Proxy Statement-Prospectus becomes
incorrect or incomplete in any material respect and to provide PFC with the
information needed to correct such inaccuracy or omission. HUBCO shall furnish
PFC with such supplemental information as may be necessary in order to cause
the Proxy Statement-Prospectus, insofar as it relates to HUBCO and its
Subsidiaries, to comply with Section 5.6(a) after the mailing thereof to PFC
shareholders.
(c) PFC shall furnish HUBCO with such information
concerning PFC as is necessary in order to cause the Proxy
Statement-Prospectus, insofar as it relates to PFC, to comply with Section
5.6(a) hereof. PFC agrees promptly to advise HUBCO if at any time prior to the
Stockholders Meeting, any information provided by PFC in the Proxy
Statement-Prospectus becomes incorrect or incomplete in any material respect
and to provide HUBCO with the information needed to correct such inaccuracy or
omission. PFC shall furnish HUBCO with such supplemental information as may be
necessary in order to cause the Proxy Statement-Prospectus, insofar as it
relates to PFC, to comply with Section 5.6(a) after the mailing thereof to PFC
shareholders.
(d) HUBCO shall as promptly as practicable make
such filings as are necessary in connection with the offering of the HUBCO
Common Stock with applicable state securities agencies and shall use all
reasonable efforts to qualify the offering of such stock under applicable state
securities laws at the earliest practicable date. PFC shall promptly furnish
HUBCO with such information regarding PFC shareholders as HUBCO requires to
enable it to
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determine what filings are required hereunder. PFC authorizes HUBCO to utilize
in such filings the information concerning PFC provided to HUBCO in connection
with, or contained in, the Proxy Statement-Prospectus. HUBCO shall furnish PFC's
counsel with copies of all such filings and keep PFC advised of the status
thereof. HUBCO shall as promptly as practicable file the Registration Statement
containing the Proxy Statement-Prospectus with the SEC, and each of HUBCO and
PFC shall promptly notify the other of all communications, oral or written, with
the SEC concerning the Registration Statement and the Proxy
Statement-Prospectus.
(e) HUBCO shall cause the HUBCO Common Stock
issuable pursuant to the Merger to be listed on the NASDAQ at the Effective
Time. HUBCO shall cause the HUBCO Common Stock which shall be issuable pursuant
to exercise of Stock Options to be accepted for listing on the NASDAQ when
issued.
(f) The parties hereto will cooperate with each
other and use their reasonable best efforts to prepare all necessary
documentation, to effect all necessary filings and to obtain all necessary
permits, consents, approvals and authorizations of all third parties and
governmental bodies necessary to consummate the transactions contemplated by
this Agreement as soon as possible, including, without limitation, those
required by the FRB and the OTS. The parties shall each have the right to review
in advance (and shall do so promptly) all filings with, including all
information relating to the other, as the case may be, and any of their
respective subsidiaries, which appears in any filing made with, or written
material submitted to, any third party or governmental body in connection with
the transactions contemplated by this Agreement.
(g) Each of the parties will promptly furnish
each other with copies of written communications received by them or any of
their respective subsidiaries from, or delivered by any of the foregoing to, any
Governmental Entity in respect of the transactions contemplated hereby.
(h) PFC acknowledges that HUBCO is in or may be
in the process of acquiring other banks and financial institutions and that in
connection with such acquisitions, information concerning PFC may be required to
be included in the registration statements, if any, for the sale of securities
of HUBCO or in SEC reports in connection with such acquisitions. PFC agrees to
provide HUBCO with any information, certificates, documents or other materials
about PFC as are reasonably necessary to be included in such other SEC reports
or registration statements, including registration statements which may be filed
by HUBCO prior to the Effective Time. PFC shall use its reasonable efforts to
cause its attorneys and accountants to provide HUBCO and any underwriters for
HUBCO with any consents, comfort letters, opinion letters, reports or
information which are necessary to complete the registration statements and
applications for any such acquisition or issuance of securities. HUBCO shall
reimburse PFC for reasonable expenses thus incurred by PFC should this
transaction be terminated for any reason other than as described in Section
7.1(f). HUBCO shall not file with the SEC any registration statement or
amendment thereto or supplement thereof containing information regarding PFC
unless PFC shall have consented in writing to such filing, which consent shall
not be unreasonably delayed or withheld.
(i) Between the date of this Agreement and
the Effective Time, PFC shall cooperate with HUBCO to reasonably conform PFC's
policies and procedures regarding
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applicable regulatory matters, to those of HUBCO as HUBCO may reasonably
identify to PFC from time to time.
5.7 APPROVAL OF STOCKHOLDERS. PFC will (i) take all
steps necessary duly to call, give notice of, convene and hold a meeting of the
stockholders of PFC (the "Stockholders Meeting") for the purpose of securing the
PFC stockholder approval of this Agreement required by law, (ii) recommend to
the stockholders of PFC the approval of this Agreement and the transactions
contemplated hereby and use its reasonable best efforts to obtain, as promptly
as practicable, such approval, subject to the right not to make a recommendation
or to withdraw a recommendation if either (x) PFC's investment banker withdraws
its fairness opinion prior to the Stockholders Meeting, or (y) PFC's Board of
Directors, after consulting with counsel, determines in the exercise of its
fiduciary responsibilities that such recommendation should not be made or should
be withdrawn, and (iii) cooperate and consult with HUBCO with respect to each of
the foregoing matters.
5.8 FURTHER ASSURANCES.
(a) Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to satisfy the conditions to Closing and to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, using reasonable efforts to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated by this Agreement and using its
reasonable best efforts to prevent the breach of any representation, warranty,
covenant or agreement of such party contained or referred to in this Agreement
and to promptly remedy the same. In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary action. Nothing in this section shall be construed
to require any party to participate in any threatened or actual legal,
administrative or other proceedings (other than proceedings, actions or
investigations to which it is a party or subject or threatened to be made a
party or subject) in connection with consummation of the transactions
contemplated by this Agreement unless such party shall consent in advance and in
writing to such participation and the other party agrees to reimburse and
indemnify such party for and against any and all costs and damages related
thereto if the Merger is not consummated.
(b) HUBCO agrees that from the date hereof to
the Effective Time, except as otherwise approved by PFC in writing or as
permitted or required by this Agreement, HUBCO will not, nor will it permit any
HUBCO Subsidiary to: (i) take any action that would result in any of its
representations and warranties contained in Article IV of this Agreement not
being true and correct in any material respect at the Effective Time, or that
would cause any of its conditions to Closing not to be satisfied; (ii) amend its
Certificate of Incorporation in a manner which would adversely affect in any
manner the terms of the HUBCO Common Stock or the ability of HUBCO to consummate
the Merger; or (iii) make any acquisition that individually or in the aggregate
can reasonably be expected to materially adversely affect the ability of HUBCO
to consummate the Merger on or before October 31, 1998.
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(c) HUBCO, PFC and BTH will use reasonable efforts
to cause the Merger to occur on or before March 31, 1998.
5.9 PUBLIC ANNOUNCEMENTS. HUBCO and PFC shall
cooperate with each other in the development and distribution of all news
releases and other public filings and disclosures with respect to this
Agreement or the Merger transactions contemplated hereby, and HUBCO and PFC
agree that unless approved mutually by them in advance, they will not issue any
press release or written statement for general circulation relating primarily
to the transactions contemplated hereby, except as may be otherwise required by
law or regulation upon the advice of counsel.
5.10 FAILURE TO FULFILL CONDITIONS. In the event that
HUBCO or PFC determines that a material condition to its obligation to
consummate the Merger cannot be fulfilled on or prior to July 31, 1998 (as the
same may be extended in accordance with the following sentence, the "Cutoff
Date") and that it will not waive that condition, it will promptly notify the
other party. The "Cutoff Date" shall be extended to October 31, 1998 if
subsequent to the date hereof HUBCO or one of its Subsidiaries enters into an
agreement relating to another acquisition and HUBCO notifies PFC in writing
that such other acquisition can reasonably be expected to delay the Closing
beyond July 31, 1998 but not beyond October 31, 1998. Except for any
acquisition or merger discussions HUBCO may enter into with other parties, PFC
and HUBCO will promptly inform the other of any facts applicable to PFC or
HUBCO, respectively, or their respective directors or officers, that would be
likely to prevent or materially delay approval of the Merger by any
Governmental Entity or which would otherwise prevent or materially delay
completion of the Merger.
5.11 DISCLOSURE SUPPLEMENTS. From time to time prior to
the Effective Time, each party hereto will promptly supplement or amend (by
written notice to the other) its respective Disclosure Schedules delivered
pursuant hereto with respect to any matter hereafter arising which, if
existing, occurring or known at the date of this Agreement, would have been
required to be set forth or described in such Schedules or which is necessary
to correct any information in such Schedules which has been rendered materially
inaccurate thereby. For the purpose of determining satisfaction of the
conditions set forth in Article VI and subject to Sections 6.2(a) and 6.3(a),
no supplement or amendment to the parties' respective Disclosure Schedules
shall correct or cure any warranty which was untrue when made, but shall enable
the disclosure of subsequent facts or events to maintain the truthfulness of
any warranty.
5.12 TRANSACTION EXPENSES OF PFC.
(a) For planning purposes, PFC shall, within 30
days from the date hereof, provide HUBCO with its estimated budget of
transaction-related expenses reasonably anticipated to be payable by PFC in
connection with this transaction based on facts and circumstances currently
known, including the fees and expenses of counsel, accountants, investment
bankers and other professionals. PFC shall promptly notify HUBCO if or when it
determines that it will expect to exceed its budget.
(b) Promptly after the execution of this Agreement,
PFC shall ask all of its attorneys and other professionals to render current
and correct invoices for all unbilled time and disbursements. PFC shall accrue
and/or pay all of such amounts as soon as possible.
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(c) PFC shall cause its professionals to
render monthly invoices within 15 days after the end of each month. PFC shall
notify HUBCO monthly of all out-of-pocket expenses which PFC has incurred in
connection with this transaction.
(d) HUBCO, in reasonable consultation with PFC,
shall make all arrangements with respect to the printing and mailing of the
Proxy Statement-Prospectus.
5.13 RESERVES. Notwithstanding that PFC believes that it
has established all reserves and taken all provisions for possible loan losses
required by GAAP and applicable laws, rules and regulations, PFC recognizes that
HUBCO may have adopted different loan, accrual and reserve policies (including
loan classifications and levels of reserves for possible loan losses). From and
after the date of this Agreement to the Effective Time and in order to formulate
the plan of integration for the Merger, PFC and HUBCO shall consult and
cooperate with each other with respect to (i) conforming, based upon such
consultation, PFC's loan, accrual and reserve policies to those policies of
HUBCO to the extent appropriate, provided that any required change in PFC's
practices in connection with the matters described in this clause (i) need not
be effected until the parties receive all necessary stockholder, third party and
governmental approvals and consents to consummate the transactions contemplated
hereby, (ii) new extensions of credit or material revisions to existing terms of
credits by BTH, in each case where the aggregate exposure exceeds $3,000,000,
and (iii) conforming, based upon such consultation, the composition of the
investment portfolio and overall asset/liability management position of PFC and
BTH to the extent appropriate.
5.14 INDEMNIFICATION.
(a) For a period of six years after the Effective
Time, HUBCO shall indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof or who becomes prior to the
Effective Time, a director, officer, employee or agent of PFC or BTH or serves
or has served at the request of PFC or BTH in any capacity with any other
person (collectively, the "Indemnitees") against any and all claims, damages,
liabilities, losses, costs, charges, expenses (including, without limitation,
reasonable costs of investigation, and the reasonable fees and disbursements of
legal counsel and other advisers and experts as incurred), judgments, fines,
penalties and amounts paid in settlement, asserted against, incurred by or
imposed upon any Indemnitee by reason of the fact that he or she is or was a
director, officer, employee or agent of PFC or BTH or serves or has served at
the request of PFC or BTH in any capacity with any other person, in connection
with, arising out of or relating to (i) any threatened, pending or completed
claim, action, suit or proceeding (whether civil, criminal, administrative or
investigative), including, without limitation, any and all claims, actions,
suits, proceedings or investigations by or on behalf of or in the right of or
against PFC or BTH or any of their respective affiliates, or by any former or
present shareholder of PFC (each a "Claim" and collectively, "Claims"),
including, without limitation, any Claim which is based upon, arises out of or
in any way relates to the Merger, the Proxy Statement/Prospectus, this
Agreement, any of the transactions contemplated by this Agreement, the
Indemnitee's service as a member of the Board of Directors of PFC or BTH or of
any committee of PFC's or BTH's Board of Directors, the events leading up to
the execution of this Agreement, any statement, recommendation or solicitation
made in connection therewith or related thereto and any breach of any duty in
connection with any of the foregoing, and (ii) the enforcement of the
obligations of HUBCO set forth in this Section 5.14, in each case to the
fullest extent which PFC or BTH would have been
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permitted under any applicable law and their respective Certificates of
Incorporation and By-Laws had the Merger not occurred (and HUBCO shall also
advance expenses as incurred to the fullest extent so permitted).
Notwithstanding the foregoing, but subject to subsection (b) below, HUBCO shall
not provide any indemnification or advance any expenses with respect to any
Claim which relates to a personal benefit improperly paid or provided, or
alleged to have been improperly paid or provided, to the Indemnitee, but HUBCO
shall reimburse the Indemnitee for costs incurred by the Indemnitee with respect
to such Claim when and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and nonappealable,
that the Indemnitee was not improperly paid or provided with the personal
benefit alleged in the Claim.
(b) From and after the Effective Time, HUBCO
shall assume and honor any obligation of PFC or BTH immediately prior to the
Effective Time with respect to the indemnification of the Indemnitees arising
out of the Certificate of Incorporation, Charter or By-Laws of PFC or BTH, or
arising out of any written indemnification agreements between PFC and/or BTH and
such persons disclosed in the PFC Disclosure Schedule, as if such obligations
were pursuant to a contract or arrangement between HUBCO and such Indemnitees.
(c) In the event HUBCO or any of its successors
or assigns (i) reorganizes or consolidates with or merges into or enters into
another business combination transaction with any other person or entity and is
not the resulting, continuing or surviving corporation or entity of such
consolidation, merger or transaction, or (ii) liquidates, dissolves or transfers
all or substantially all of its properties and assets to any person or entity,
then, and in each such case, proper provision shall be made so that the
successors and assigns of HUBCO assume the obligations set forth in this Section
5.14.
(d) HUBCO shall cause PFC's and BTH's officers
and directors to be covered under HUBCO's then current officers' and directors'
liability insurance policy for a period of six years after the Effective Time,
or, in the alternative, to be covered under an extension of PFC's and BTH's
existing officers' and directors' liability insurance policy. However, HUBCO
shall only be required to insure such persons upon terms and for coverages
substantially similar to PFC's and BTH's existing officers' and directors'
liability insurance.
(e) Any Indemnitee wishing to claim
indemnification under this Section 5.14 shall promptly notify HUBCO upon
learning of any Claim, but the failure to so notify shall not relieve HUBCO of
any liability it may have to such Indemnitee if such failure does not materially
prejudice HUBCO. In the event of any Claim (whether arising before or after the
Effective Time) as to which indemnification under this Section 5.14 is
applicable, (x) HUBCO shall have the right to assume the defense thereof and
HUBCO shall not be liable to such Indemnitees for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnitee in
connection with the defense thereof, except that if HUBCO elects not to assume
such defense, or counsel for the Indemnitees advises that there are issues which
raise conflicts of interest between HUBCO and the Indemnitees, the Indemnitees
may retain counsel satisfactory to them, and HUBCO shall pay the reasonable fees
and expenses of such counsel for the Indemnitees as statements therefor are
received; provided, however, that HUBCO shall be obligated pursuant to this
Section 5.14(e) to pay for only one firm of counsel for all Indemnitees in any
jurisdiction with respect to a matter unless the use of one counsel for multiple
Indemnitees would present such counsel with a conflict of interest that is not
waived, and (y) the Indemnitees will cooperate in the defense of any such
matter. HUBCO shall not be liable for
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settlement of any claim, action or proceeding hereunder unless such settlement
is effected with its prior written consent. Notwithstanding anything to the
contrary in this Section 5.14, HUBCO shall not have any obligation hereunder to
any Indemnitee when and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and nonappealable,
that the indemnification of such Indemnitee in the manner contemplated hereby is
prohibited by applicable law or public policy.
5.15 POOLING AND TAX-FREE REORGANIZATION TREATMENT. Prior
to the date hereof, neither HUBCO or PFC has taken any action or failed to take
any action which would disqualify the Merger for pooling of interests accounting
treatment. Before the Effective Time, neither HUBCO nor PFC shall intentionally
take, fail to take, or cause to be taken or not taken any action within its
control, which would disqualify the Merger as a "pooling-of-interests" for
accounting purposes or as a "reorganization" within the meaning of Section
368(a) of the Code. Subsequent to the Effective Time, HUBCO shall not take and
shall cause the Surviving Corporation not to take any action within their
control that would disqualify the Merger as such a "reorganization" under the
Code.
5.16 COMFORT LETTERS. HUBCO shall cause Xxxxxx Xxxxxxxx,
its independent public accountants, to deliver to PFC, and PFC shall cause
Deloitte & Touche, its independent public accountants, to deliver to HUBCO and
to its officers and directors who sign the Registration Statement for this
transaction, a short-form "comfort letter" or "agreed upon procedures" letter,
dated the date of the mailing of the Proxy Statement-Prospectus for the
Stockholders Meeting of PFC, in the form customarily issued by such accountants
at such time in transactions of this type (provided that Xxxxxx Xxxxxxxx and
Deloitte & Touche have been provided with representation letters from HUBCO and
PFC in accordance with Statement on Auditing Standards No. 72).
5.17 AFFILIATES. Promptly, but in any event within two
weeks, after the execution and delivery of this Agreement, PFC shall deliver to
HUBCO (a) a letter identifying all persons who, to the knowledge of PFC, may be
deemed to be affiliates of PFC under Rule 145 of the 1933 Act and the
pooling-of-interests accounting rules, including, without limitation, all
directors and executive officers of PFC and (b) use its reasonable best efforts
to cause each person who may be deemed to be an affiliate of PFC to execute and
deliver to HUBCO a letter agreement, substantially in the form of Exhibit
5.17-1, agreeing to comply with Rule 145 and to refrain from transferring shares
as required by the pooling-of-interests accounting rules. Within two weeks after
the date hereof, HUBCO shall use its reasonable best efforts to cause its
directors and executive officers to enter into letter agreements in the form of
Exhibit 5.17-2 with HUBCO concerning the pooling-of-interests accounting rules.
HUBCO hereby agrees to publish, or file a Form 8-K, Form 10-K or Form 10-Q
containing financial results covering at least 30 days of post-Merger combined
operations of HUBCO and PFC as soon as practicable (but in no event later than
30 days) following the close of the first calendar month ending 30 days after
the Effective Time, in form and substance sufficient to remove the restrictions
set forth in paragraph "B" of Exhibit 5.17-1.
5.18 APPOINTMENT OF DIRECTORS. HUBCO shall cause Xxxxxx
X. Xxxxxxxxxxxxx and Xxxx xxXxxxxxx, Xx. to be appointed at the Effective Time
as directors of HUBCO. The Chairman of the Board of Directors of HUBCO shall
recommend to the HUBCO Board of Directors that Xxxxxx X. Xxxxxxxxxxxxx be
nominated for a three year term as a
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director of HUBCO and that Xxxx xxXxxxxxx, Xx. be nominated for a two year term
as a director of HUBCO at the first HUBCO shareholders meeting held following
the Closing. BTH shall cause such persons as HUBCO shall designate to be
appointed at the Effective Time as directors of BTH. HUBCO will invite all
current directors of BTH to remain as directors of BTH following the Closing and
will ask Xxxxxx X. Xxxxxxxxxxxxx to serve as Chairman of the Board and Chief
Executive Officer of BTH following the Closing.
5.19 RIGHTS PLAN. PFC shall cause the PFC Rights to
be redeemed or terminated and, if requested by HUBCO, PFC shall cause the Rights
Plan to be terminated, in each case effective at or prior to the Closing and
without substantial cost to HUBCO.
5.20 OPERATION OF BTH POST-CLOSING; EMPLOYEE MATTERS.
(a) Following consummation of the Merger, HUBCO
shall operate BTH as a separate bank subsidiary under the name "Bank of the
Xxxxxx." It is HUBCO's current intention that BTH's current main office in
Poughkeepsie, New York, will be maintained as the main office of HUBCO's New
York State banking operations indefinitely following the Closing. Following the
Closing, HUBCO will use reasonable efforts to preserve the historical artifacts
currently located at such Poughkeepsie, New York office. At such time as HUBCO
may relocate the main office of its New York State banking operations HUBCO will
cause such artifacts to be donated to a museum serving the Poughkeepsie, New
York community. HUBCO agrees that it will support PFC's and BTH's efforts to
have such main office listed on the National Registry of Historic Properties.
(b) PFC and BTH acknowledge that HUBCO may choose
to cause BTH to be operated as a New York State-chartered commercial bank as
soon as practicable after the Effective Time, whether by means of conversion,
merger with a phantom bank or otherwise. PFC and BTH shall use reasonable
efforts prior to the Closing to cooperate with and assist HUBCO in accomplishing
that result; provided, that nothing in this Section 5.20(b) shall require BTH to
convert from a federal savings bank to another form of bank prior to the
Closing.
(c) Following consummation of the Merger, HUBCO
shall honor the existing written contracts with officers and employees of PFC
and BTH that are included in the PFC Disclosure Schedule.
(d) Following consummation of the Merger, HUBCO
shall continue to provide the level of post-retirement benefits currently
provided by, or agreed to be provided by, PFC or BTH to those persons identified
in Section 5.20(d) of the PFC Disclosure Schedule, only to the extent such
persons and such benefits are identified in Section 5.20(d) of the PFC
Disclosure Schedule, or HUBCO at its option shall provide other, substantially
equivalent, benefits to such persons.
(e) Prior to, or effective upon, the Closing, PFC
and BTH shall cause their Non-Employee Directors' Retirement Plan to be
terminated and shall fully fund all benefits thereunder so that neither BTH nor
HUBCO as successor to PFC shall have any continuing obligation thereunder. Prior
to such termination, PFC and BTH may amend and fund the Non-Employee Directors'
Retirement Plan in the manner described in Section 5.2 of the PFC Disclosure
Schedule.
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(f) Following consummation of the Merger, HUBCO
shall make available to all employees and officers of PFC or BTH employed by
HUBCO or its Subsidiaries following the Merger ("continuing employees") coverage
under the benefit plans generally available to HUBCO's employees and officers
(including pension and health and hospitalization) on the terms and conditions
available to HUBCO's employees and officers. Following consummation of the
Merger, HUBCO shall honor the severance policies of PFC and BTH previously
disclosed to HUBCO in writing, and HUBCO shall not change such severance
policies (as applicable to persons employed by PFC or BTH on the Closing Date)
for a period of six months following the Effective Time. After the Effective
Time, HUBCO may terminate, merge or change existing PFC or BTH benefit plans.
Continuing employees will receive credit for prior employment by PFC or BTH for
the sole purpose of determining whether such continuing employees are eligible
to participate in or be vested under HUBCO's medical, vacation, sick leave,
disability, pension, and other employee benefit plans. Credit for prior service
will not be given for purposes of benefit accrual under any defined benefit
pension plan of HUBCO.
ARTICLE VI - CLOSING CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS UNDER THIS
AGREEMENT. The respective obligations of each party under this Agreement to
consummate the Merger shall be subject to the satisfaction, or, where
permissible under applicable law, waiver at or prior to the Effective Time of
the following conditions:
(a) APPROVAL OF STOCKHOLDERS; SEC REGISTRATION.
This Agreement and the transactions contemplated hereby shall have been approved
by the requisite vote of the stockholders of PFC. The HUBCO Registration
Statement and Proxy Statement-Prospectus shall have been declared effective by
the SEC and shall not be subject to a stop order or any threatened stop order,
and the issuance of the HUBCO Common Stock shall have been qualified in every
state where such qualification is required under the applicable state securities
laws.
(b) REGULATORY FILINGS. All necessary regulatory
or governmental approvals and consents (including without limitation any
required approval of the FRB, the OTS and the SEC) required to consummate the
transactions contemplated hereby shall have been obtained without any term or
condition which would materially impair the value of PFC and BTH, taken as a
whole, to HUBCO. All conditions required to be satisfied prior to the Effective
Time by the terms of such approvals and consents shall have been satisfied; and
all statutory waiting periods in respect thereof (including the
Xxxx-Xxxxx-Xxxxxx waiting period if applicable) shall have expired.
(c) SUITS AND PROCEEDINGS. No order, judgment
or decree shall be outstanding against a party hereto or a third party that
would have the effect of preventing completion of the Merger; no suit, action or
other proceeding shall be pending or threatened by any governmental body in
which it is sought to restrain or prohibit the Merger; and no suit, action or
other proceeding shall be pending before any court or governmental agency in
which it is sought to restrain or prohibit the Merger or obtain other
substantial monetary or other relief against one or more parties hereto in
connection with this Agreement and which HUBCO or PFC determines in good faith,
based upon the advice of their respective counsel, makes it inadvisable to
proceed with the Merger because any such suit, action or proceeding has a
significant potential
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to be resolved in such a way as to deprive the party electing not to
proceed of any of the material benefits to it of the Merger.
(d) TAX OPINION. HUBCO and PFC shall each
have received an opinion, dated as of the Effective Time, of Pitney, Xxxxxx,
Xxxx & Xxxxx, or of counsel to PFC reasonably acceptable to HUBCO, reasonably
satisfactory in form and substance to PFC and its counsel and to HUBCO, based
upon representation letters reasonably required by such counsel, dated on or
about the date of such opinion, and such other facts and representations as
counsel may reasonably deem relevant, to the effect that: (i) the Merger will be
treated for federal income tax purposes as a reorganization qualifying under the
provisions of Section 368 of the Code; (ii) no gain or loss will be recognized
by PFC; (iii) no gain or loss will be recognized by PFC shareholders upon the
exchange of PFC Common Stock solely for HUBCO Common Stock; (iv) the basis of
any HUBCO Common Stock received in exchange for PFC Common Stock shall equal the
basis of the recipient's PFC Common Stock surrendered on the exchange, reduced
by the amount of cash received, if any, on the exchange, and increased by the
amount of the gain recognized, if any, on the exchange (whether characterized as
dividend or capital gain income); and (v) the holding period for any HUBCO
Common Stock received in exchange for PFC Common Stock will include the period
during which PFC Common Stock surrendered on the exchange was held, provided
such stock was held as a capital asset on the date of the exchange.
(e) POOLING OF INTERESTS. HUBCO shall have received
a letter, dated the Closing Date, from its accountants, Xxxxxx Xxxxxxxx,
reasonably satisfactory to HUBCO and PFC, to the effect that the Merger shall be
qualified to be treated by HUBCO as a pooling-of-interests for accounting
purposes.
6.2 CONDITIONS TO THE OBLIGATIONS OF HUBCO UNDER
THIS AGREEMENT. The obligations of HUBCO under this Agreement shall be further
subject to the satisfaction or waiver, at or prior to the Effective Time, of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES; PERFORMANCE
OF OBLIGATIONS OF PFC AND BTH. Except for those representations which are made
as of a particular date, the representations and warranties of PFC contained in
this Agreement shall be true and correct in all material respects on the Closing
Date as though made on and as of the Closing Date. PFC shall have performed in
all material respects the agreements, covenants and obligations to be performed
by it prior to the Closing Date. With respect to any representation or warranty
which as of the Closing Date has required a supplement or amendment to the PFC
Disclosure Schedule to render such representation or warranty true and correct
in all material respects as of the Closing Date, the representation and warranty
shall be deemed true and correct as of the Closing Date only if (i) the
information contained in the supplement or amendment to the PFC Disclosure
Schedule related to events occurring following the execution of this Agreement
and (ii) the facts disclosed in such supplement or amendment would not either
alone, or together with any other supplements or amendments to the PFC
Disclosure Schedule, materially adversely affect the representation as to which
the supplement or amendment relates.
(b) OPINION OF COUNSEL. HUBCO shall have received
an opinion of counsel to PFC, dated the Closing Date, in form and substance
reasonably satisfactory to HUBCO, substantially in accordance with Exhibit
6.2(b) hereto.
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39
(c) CERTIFICATES. PFC shall have furnished HUBCO
with such certificates of its officers or other documents to evidence
fulfillment of the conditions set forth in this Section 6.2 as HUBCO may
reasonably request.
(d) LEGAL FEES. PFC shall have furnished HUBCO
with letters from all attorneys representing PFC and BTH in any significant
matters confirming that all material legal fees have been paid in full for
services rendered as of the Effective Time.
(e) MERGER-RELATED EXPENSES. PFC shall have
provided HUBCO with an accounting of all merger-related expenses incurred by it
through the Closing Date, including a good faith estimate of such expenses
incurred but as to which invoices have not been submitted as of the Closing
Date. The merger-related expenses of PFC shall be reasonable.
6.3 CONDITIONS TO THE OBLIGATIONS OF PFC UNDER THIS
AGREEMENT. The obligations of PFC under this Agreement shall be further subject
to the satisfaction or waiver, at or prior to the Effective Time, of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES; PERFORMANCE
OF OBLIGATIONS OF HUBCO. Except for those representations which are made as of a
particular date, the representations and warranties of HUBCO contained in this
Agreement shall be true and correct in all material respects on the Closing Date
as though made on and as of the Closing Date. HUBCO shall have performed in all
material respects the agreements, covenants and obligations to be performed by
it prior to the Closing Date. With respect to any representation or warranty
which as of the Closing Date has required a supplement or amendment to the HUBCO
Disclosure Schedule to render such representation or warranty true and correct
in all material respects as of the Closing Date, the representation and warranty
shall be deemed true and correct as of the Closing Date only if (i) the
information contained in the supplement or amendment to the HUBCO Disclosure
Schedule related to events occurring following the execution of this Agreement
and (ii) the facts disclosed in such supplement or amendment would not either
alone, or together with any other supplements or amendments to the HUBCO
Disclosure Schedule, materially adversely effect the representation as to which
the supplement or amendment relates.
(b) OPINION OF COUNSEL TO HUBCO. PFC shall
have received an opinion of counsel to HUBCO, dated the Closing Date, in form
and substance reasonably satisfactory to PFC, substantially in accordance with
Exhibit 6.3(b) hereto.
(c) FAIRNESS OPINION. PFC shall have received
an opinion from Advest dated no more than three days prior to the date the Proxy
Statement-Prospectus is mailed to PFC's stockholders (and, if it shall become
necessary to resolicit proxies thereafter, dated no more than three days prior
to the date of any substantive amendment to the Proxy Statement/Prospectus) to
the effect that, in its opinion, the consideration to be paid to stockholders of
PFC hereunder is fair to such stockholders from a financial point of view
("Fairness Opinion").
(d) CERTIFICATES. HUBCO shall have furnished PFC
with such certificates of its officers or others and such other documents to
evidence fulfillment of the conditions set forth in this Section 6.3 as PFC may
reasonably request.
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ARTICLE VII - TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated prior
to the Effective Time, whether before or after approval of this Agreement by
the stockholders of PFC:
(a) by mutual written consent of the parties hereto;
(b) by HUBCO or PFC (i) if the Effective Time
shall not have occurred on or prior to the Cutoff Date unless the failure of
such occurrence shall be due to the failure of the party seeking to terminate
this Agreement to perform or observe its agreements set forth herein to be
performed or observed by such party at or before the Effective Time, or (ii) if
a vote of the stockholders of PFC is taken and such stockholders fail to approve
this Agreement at the meeting (or any adjournment thereof) held for such
purpose;
(c) by HUBCO or PFC upon written notice to the
other if any application for regulatory or governmental approval necessary to
consummate the Merger and the other transactions contemplated hereby shall have
been denied or withdrawn at the request or recommendation of the applicable
regulatory agency or Governmental Entity or by HUBCO upon written notice to PFC
if any such application is approved with conditions (other than conditions which
are customary in such regulatory approvals) which materially impair the value of
PFC and BTH, taken as a whole, to HUBCO;
(d) by HUBCO if (i) there shall have occurred
a material adverse change in the business, operations, assets, or financial
condition of PFC and BTH, taken as a whole, from that disclosed by PFC in PFC's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (it being
understood that those matters disclosed in the PFC Disclosure Schedule shall not
be deemed to constitute such a material adverse change) or (ii) there was a
material breach in any representation, warranty, covenant, agreement or
obligation of PFC hereunder and such breach shall not have been remedied within
30 days after receipt by PFC of notice in writing from HUBCO to PFC specifying
the nature of such breach and requesting that it be remedied;
(e) by PFC if (i) there shall have occurred
a material adverse change in the business, operations, assets or financial
condition of HUBCO and its Subsidiaries taken as a whole from that disclosed by
HUBCO in HUBCO's Quarterly Report on Form 10-Q for the quarter ended June 30,
1997 except for the Effects of Announced Acquisitions (it being understood that
those matters disclosed in the HUBCO Disclosure Schedule shall not be deemed to
constitute such a material adverse change); or (ii) there was a material breach
in any representation, warranty, covenant, agreement or obligation of HUBCO
hereunder and such breach shall not have been remedied within 30 days after
receipt by HUBCO of notice in writing from PFC specifying the nature of such
breach and requesting that it be remedied;
(f) by PFC, if PFC's Board of Directors shall
have approved an Acquisition Transaction after determining, upon advice of
counsel, that such approval was necessary in the exercise of its fiduciary
obligations under applicable laws;
(g) by HUBCO if the conditions set forth in
Sections 6.1 and 6.2 are not satisfied and are not capable of being satisfied by
the Cutoff Date;
40
41
(h) by PFC if the conditions set forth in
Sections 6.1 and 6.3 are not satisfied and are not capable of being satisfied by
the Cutoff Date; or
(i) by PFC, in accordance with Section 2.1(a)(iii).
7.2 EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement by either HUBCO or PFC pursuant
to Section 7.1, this Agreement (other than Section 5.5(b), the penultimate
sentence of Section 5.6(h), this Section 7.2 and Section 8.1) shall forthwith
become void and have no effect, without any liability on the part of any party
or its officers, directors or stockholders. Nothing contained herein, however,
shall relieve any party from any liability for any breach of this Agreement.
7.3 AMENDMENT. This Agreement may be amended by action
taken by the parties hereto at any time before or after adoption of this
Agreement by the stockholders of PFC but, after any such adoption, no amendment
shall be made which reduces the amount or changes the form of the consideration
to be delivered to the shareholders of PFC without the approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties hereto.
7.4 EXTENSION; WAIVER. The parties may, at any time prior
to the Effective Time of the Merger, (i) extend the time for the performance of
any of the obligations or other acts of the other parties hereto; (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant thereto; or (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party against which the waiver is
sought to be enforced.
ARTICLE VIII - MISCELLANEOUS
8.1 EXPENSES.
(a) Except as otherwise expressly stated herein,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including legal, accounting and investment
banking fees and expenses) shall be borne by the party incurring such costs and
expenses. Notwithstanding the foregoing, PFC may bear the expenses of BTH.
(b) Notwithstanding any provision in this
Agreement to the contrary, in the event that either of the parties shall
willfully default in its obligations hereunder, the non-defaulting party may
pursue any remedy available at law or in equity to enforce its rights and shall
be paid by the willfully defaulting party for all damages, costs and expenses,
including without limitation legal, accounting, investment banking and printing
expenses, incurred or suffered by the non-defaulting party in connection
herewith or in the enforcement of its rights hereunder.
8.2 SURVIVAL. The respective representations,
warranties, covenants and agreements of the parties to this Agreement shall not
survive the Effective Time, but shall terminate as of the Effective Time, except
for Article II, this Section 8.2 and Sections 5.5(b), 5.14, 5.17 and 5.20.
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8.3 NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered personally or by reputable overnight courier or sent by registered or
certified mail, postage prepaid, as follows:
(a) If to HUBCO, to:
HUBCO, Inc.
0000 XxxXxxxxx Xxxx.
Xxxxxx, Xxx Xxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxx, Chairman,
President and Chief Executive Officer
Copy to:
0000 XxxXxxxxx Xxxx.
Xxxxxx, Xxx Xxxxxx 00000
Attn.: X. Xxxx Van Borkulo-Xxxxx, Esq.
And copy to:
Pitney, Xxxxxx, Xxxx & Xxxxx
(Delivery) 000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx
(Mail) X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Attn.: Xxxxxxx X. Xxxxxxx, Esq.
(b) If to PFC or BTH, to:
Poughkeepsie Financial Corp.
000 Xxxx Xxxx
Xxxxxxxxxxxx, Xxx Xxxx 00000
Attn.: Xxxxxx X. Xxxxxxxxxxxxx, Chairman,
President and Chief Executive Officer
Copy to:
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.
Xxx Xxxxxx Xxxxxxxx, 00xx Xxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn.: W. Xxxxxxx Xxxxxxx, Esq.
or such other addresses as shall be furnished in writing by any party, and
any such notice or communications shall be deemed to have been given as of the
date actually received.
8.4 PARTIES IN INTEREST; ASSIGNABILITY. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. Nothing in this Agreement is intended
to confer, expressly or by implication, upon any other person any rights or
remedies under or by reason of this Agreement except the Indemnitees described
in Section 5.14. This Agreement and the rights and obligations of the parties
hereunder may not be assigned.
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8.5 ENTIRE AGREEMENT. This Agreement, which includes
the Disclosure Schedules hereto and the other documents, agreements and
instruments executed and delivered pursuant to or in connection with this
Agreement, contains the entire Agreement between the parties hereto with respect
to the transactions contemplated by this Agreement and supersedes all prior
negotiations, arrangements or understandings, written or oral, with respect
thereto, other than any confidentiality agreements entered into by the parties
hereto.
8.6 COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
8.7 GOVERNING LAW. This Agreement shall be governed by
the laws of the State of New Jersey, without giving effect to the principles of
conflicts of laws thereof.
8.8 DESCRIPTIVE HEADINGS. The descriptive headings of
this Agreement are for convenience only and shall not control or affect the
meaning or construction of any provision of this Agreement.
IN WITNESS WHEREOF, HUBCO, PFC and BTH have caused
this Agreement to be executed by their duly authorized officers and by no less
than a majority of the directors of each of them as of the day and year first
above written.
ATTEST: HUBCO, INC.
By: /s/ X. XXXX VAN BORKULO-XXXXX By: /s/ XXXXXXX X. XXXXXXX
--------------------------------- --------------------------------
Xxxxxxx X. Xxxxxxx, Chairman,
President and Chief Executive
Officer
ATTEST: POUGHKEEPSIE FINANCIAL CORP.
By: /s/ XXXXXXX X. XXXXXXXXX By: /s/ XXXXXX X. XXXXXXXXXXXXX
--------------------------------- --------------------------------
Xxxxxx X. Xxxxxxxxxxxxx, Chairman,
President and Chief Executive
Officer
ATTEST: BANK OF THE XXXXXX
By: /s/ XXXXXXX X. XXXXXXXXX By: /s/ XXXXXX X. XXXXXXXXXXXXX
--------------------------------- --------------------------------
Xxxxxx X. Xxxxxxxxxxxxx, Chairman,
President and Chief Executive
Officer
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AGREEMENT OF PFC AND BTH DIRECTORS
Reference is made to the Agreement and Plan of Merger,
dated October 22, 1997 (the "Merger Agreement"), among HUBCO, Inc., Poughkeepsie
Financial Corp., and Bank of the Xxxxxx. Capitalized terms used herein and not
otherwise defined have the meanings given to them in the Merger Agreement.
Each of the following persons, being all of the directors
of PFC and BTH, solely in such person's capacity as a holder of PFC Common
Stock, agrees to vote or cause to be voted all shares of PFC Common Stock which
are held by such person, or over which such person exercises full voting control
(except as trustee or in a fiduciary capacity, or as nominee), in favor of the
Merger.
It is understood and agrees that this Agreement of PFC and
BTH Directors (this "Agreement") relates solely to the capacity of the
undersigned as shareholders or other beneficial owners of shares of PFC Common
Stock and is not in any way intended to affect the exercise by the undersigned
of the undersigned's responsibilities as directors of PFC or BTH. It is further
understood and agreed that this Agreement is not in any way intended to affect
the exercise by the undersigned of any fiduciary responsibility which the
undersigned may have in respect of any shares of PFC Common Stock held by the
undersigned as of the date hereof.
/s/ XXXXXX X. XXXXXXXXXXXXX /s/ XXXX XXXXXXXXX, XX.
------------------------------- -------------------------------
/s/ XXXXXXXXX X. XXXXXXXX /s/ XXXXXX GOLD
------------------------------- -------------------------------
/s/ XXXXXX X. XXXXXXX /s/ XXXXX X. XXXXXXX
------------------------------- -------------------------------
/s/ JEH X. XXXXXXX
------------------------------- -------------------------------
/s/ XXXXXX X. XXXXXX
------------------------------- -------------------------------
/s/ XXXXX X. XXXXX, XX.
------------------------------- -------------------------------
Dated: October 22, 1997
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EXHIBIT 5.17-1
FORM OF PFC AFFILIATE LETTER
October __, 1997
HUBCO, Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Gentlemen:
I am delivering this letter to you in connection with
the proposed acquisition (the "Merger") of Poughkeepsie Financial Corporation, a
Delaware corporation and registered savings and loan holding company (the
"Company"), by HUBCO, Inc., a New Jersey corporation and registered bank holding
company ("HUBCO"), pursuant to the Agreement and Plan of Merger dated as of
October 22, 1997 (the "Agreement") between the Company, Bank of the Xxxxxx and
HUBCO. I currently own shares of the Company's common stock, $.01 par value
("PFC Common Stock"). As a result of the Merger, I will receive shares of
HUBCO's common stock, no par value ("HUBCO Common Stock") in exchange for my PFC
Common Stock.
I have been advised that as of the date of this letter I
may be deemed to be an "affiliate" of the Company, as the term "affiliate" is
defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and
regulations promulgated under the Securities Act of 1933, as amended (the "1933
Act") by the Securities and Exchange Commission ("SEC") and as the term
"affiliate" is used for purposes of the SEC's rules and regulations applicable
to the determination of whether a merger can be accounted for as a "pooling of
interests" as specified in the SEC's Accounting Series Release 135, as amended
by Staff Accounting Bulletins Nos. 65 and 76 ("ASR 135").
I represent to and agree with HUBCO that:
A. Transfer Review Restrictions. During the period
beginning on the date hereof and ending 30 days prior to the consummation of the
Merger, I shall not sell, transfer, reduce my risk with respect to or otherwise
dispose of ("transfer") any PFC Common Stock owned by me, and I shall not permit
any relative who shares my home, or any person or entity who or which I control,
to transfer any PFC Common Stock owned by such person or entity, without
notifying HUBCO in advance of the proposed transfer and giving HUBCO a
reasonable opportunity to review the transfer before it is consummated. HUBCO,
if advised to do so by its independent public accountants, may instruct me not
to make or permit the transfer because it may interfere with the "pooling of
interests" treatment of the Merger. I shall abide by any such instructions.
B. Transfer Restrictions During Merger Consummation Period.
I shall not transfer any PFC Common Stock owned by me, and I shall not permit
any relative who shares my home, or any person or entity who or which I control,
to transfer any PFC Common Stock owned by such person or entity during the
period beginning 30 days prior to the consummation of the Merger and ending
immediately after financial results covering at least 30 days of post-Merger
combined operations have been published by HUBCO by means of the filing of a
Form 10-Q or Form 8-K under the Securities Exchange Act of 1934, as amended, the
issuance of a quarterly earnings report, or any other public issuance which
satisfies the requirements of ASR 135. For purposes of this
46
paragraph only, "PFC Common Stock" includes HUBCO Common Stock into which my
Poughkeepsie Common Stock is converted.
C. Compliance with Rule 145. I have been advised that
the issuance of HUBCO Common Stock to me pursuant to the Merger will be
registered with the SEC under the 1933 Act on a Registration Statement on Form
S-4. However, I have also been advised that, since I may be deemed to be an
affiliate of the Company at the time the Merger is submitted for a vote of the
Company's stockholders, any transfer by me of HUBCO Common Stock is restricted
under Rule 145 promulgated by the SEC under the 1933 Act. I agree not to
transfer the HUBCO Common Stock received by me or any of my affiliates unless
(i) such transfer is made in conformity with the volume and other limitations of
Rule 145 promulgated by the SEC under the 1933 Act, (ii) in the opinion of
HUBCO's counsel or counsel reasonably acceptable to HUBCO, such transfer is
otherwise exempt from registration under the 1933 Act or (iii) such transfer is
registered under the 1933 Act.
D. Stop Transfer Instructions; Legend on Certificates. I
also understand and agree that stop transfer instructions will be given to
HUBCO's transfer agents with respect to the HUBCO Common Stock received by me
and any of my affiliates and that there will be placed on the certificates of
the HUBCO Common Stock issued to me and any of my affiliates, or any
substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE
TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED OCTOBER
22, 1997 BETWEEN THE REGISTERED HOLDER HEREOF AND HUBCO, INC., A COPY
OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF HUBCO, INC."
E. Consultation with Counsel. I have carefully read
this letter and the Agreement and discussed the requirements of such documents
and other applicable limitations upon my ability to transfer HUBCO Common Stock
to the extent I felt necessary with my counsel or counsel for the Company.
2
47
Execution of this letter is not an admission on my part that
I am an "affiliate" of the Company as described in the second paragraph of this
letter, or a waiver of any rights I may have to object to any claim that I am
such an affiliate on or after the date of this letter. This letter shall
terminate concurrently with any termination of the Agreement in accordance with
its terms.
Very truly yours,
-----------------------------
Name:
Accepted this ___ day of October , 1997 by
HUBCO, INC.
By:
------------------------------
Name:
Title:
3
48
EXHIBIT 5.17-2
FORM OF AFFILIATE LETTER FOR HUBCO AFFILIATES
October ___, 1997
HUBCO, Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Gentlemen:
I am delivering this letter to you in connection with
the proposed merger (the "Merger") of Poughkeepsie Financial Corporation, a
Delaware Corporation and registered savings and loan holding company ("PFC"),
with and into HUBCO, Inc., a New Jersey corporation and registered bank holding
company ("HUBCO"), pursuant to the Agreement and Plan of Merger dated as of
October 22, 1997(the "Agreement") between HUBCO and PFC. I currently own shares
of HUBCO's common stock, no par value ("HUBCO Common Stock").
I have been advised that as of the date of this letter I
may be deemed to be an "affiliate" of HUBCO, as the term "affiliate" is used for
purposes of the rules and regulations of the Securities and Exchange Commission
(the "Commission") applicable to the determination of whether a merger can be
accounted for as a "pooling of interests" as specified in the Commission's
Accounting Series Release 135, as amended by Staff Accounting Bulletins Nos. 65
and 76 ("ASR 135").
I represent and covenant with HUBCO and PFC that:
A. Transfer Restrictions Prior to Merger Consummation.
During the period beginning on the date hereof and ending 30 days prior to the
consummation of the Merger, I shall not sell, transfer, reduce my risk with
respect to or otherwise dispose of ("transfer") any HUBCO Common Stock owned by
me, and I shall not permit any relative who shares my home, or any person or
entity who or which I control, from transferring any HUBCO Common Stock owned by
such person or entity, without notifying HUBCO in advance of the proposed
transfer and giving HUBCO a reasonable opportunity to object to the transfer
before it is consummated. HUBCO, upon advice of its independent public
accountants, may instruct me not to make or permit the transfer because it may
interfere with the "pooling of interests" treatment of the Merger. I shall abide
by any such instructions.
B. Post-Consummation Transfer Restrictions. During the
period beginning 30 days prior to the consummation of the Merger and ending
immediately after financial results covering at least 30 days of post-Merger
combined operations have been published by HUBCO by means of filing of a Form
10-Q or Form 8-K under the Securities Exchange Act of 1934, the issuance of a
quarterly earnings report, or any other public issuance which satisfies the
49
requirements of ASR 135, I shall not transfer any HUBCO Common Stock owned by
me, and I shall not permit any relative who shares my home, or any person or
entity who or which I control, to transfer any HUBCO Common Stock owned by such
person or entity.
C. Consultation with Counsel. I have carefully read
this letter and the Agreement and discussed the requirements of such documents
and other applicable limitations upon my ability to transfer HUBCO Common Stock
to the extent I felt necessary with my counsel or counsel for HUBCO.
Execution of this letter is not an admission on my part that
I am an "affiliate" of HUBCO as described in the second paragraph of this
letter, or a waiver of any rights I may have to object to any claim that I am
such an affiliate on or after the date of this letter. This letter shall
terminate concurrently with any termination of the Agreement in accordance with
its terms.
Very truly yours,
-------------------------------------
Name:
Title:
Accepted this ____ day of
October, 1997 by
HUBCO, INC.
By:
--------------------------------
Name:
Title:
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EXHIBIT 6.2
FORM OF OPINION OF COUNSEL TO PFC
TO BE DELIVERED TO HUBCO ON THE EFFECTIVE TIME
(a) PFC and BTH have full corporate power to carry out
the transactions contemplated in the Agreement. The execution and delivery of
the Agreement and the consummation of the transactions contemplated thereunder
have been duly and validly authorized by all necessary corporate action on the
part of PFC and BTH, and the Agreement constitutes the valid and legally binding
obligations of PFC and BTH enforceable in accordance with its terms, except as
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship, and other laws now or hereafter in effect
relating to or affecting the enforcement of creditors' rights generally or the
rights of creditors of federal savings institutions or their holding companies,
(ii) general equitable principles, and (iii) laws relating to the safety and
soundness of insured depository institutions, and except that no opinion need be
rendered as to the effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is considered in a proceeding
in equity or at law). Subject to satisfaction of the conditions set forth in the
Agreement, neither the transactions contemplated in the Agreement, nor
compliance by PFC and BTH with any of the provisions thereof, will (i) conflict
with or result in a breach or default under (A) the certificate of incorporation
or bylaws of PFC or the charter or bylaws of BTH, or (B) based on certificates
of officers and without independent verification, to the knowledge of such
counsel, any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which PFC or BTH is a party; or (ii) to the
knowledge of such counsel, result in the creation or imposition of any material
lien, instrument or encumbrance upon the property of PFC or BTH, except such
material lien, instrument or obligation that has been disclosed to HUBCO
pursuant to the Agreement, or (iii) violate in any material respect any order,
writ, injunction, or decree known to such counsel, or any statute, rule or
regulation applicable to PFC or BTH.
(b) PFC is a corporation validly existing under the laws
of the State of Delaware and has the corporate power and authority to own or
lease all of its properties and assets and to conduct the business in which it
is currently engaged as described in the Proxy Statement/Prospectus. BTH is a
validly existing federally-chartered savings bank organized under the laws of
the United States of America. The deposits of BTH are insured to the maximum
extent provided by law by the Federal Deposit Insurance Corporation.
(c) PFC is authorized to transact business as a foreign
corporation in the State of New York as of the date hereof.
(d) There is, to the knowledge of such counsel, no
legal, administrative, arbitration or governmental proceeding or investigation
pending or threatened to which PFC or BTH is a party which would, if determined
adversely to PFC or BTH, have a material adverse effect on the business,
properties, results of operations, or condition, financial or otherwise, of PFC
or BTH taken as a whole or which presents a claim to restrain or prohibit the
transactions contemplated by the Agreement.
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(e) No consent, approval, authorization, or order of
any federal or state court or federal or state governmental agency or body, or
to such counsels knowledge of any third party, is required for the consummation
by PFC or BTH of the transactions contemplated by the Agreement, except for such
consents, approvals, authorizations or orders as have been obtained or which
would not have a Material Adverse Effect upon HUBCO upon consummation of the
Merger.
In addition to the foregoing opinions, counsel shall state that on
the sole basis of such counsel's participation in conferences with officers and
employees of PFC in connection with the preparation of the Prospectus/Proxy
Statement and without other independent investigation or inquiry, such counsel
has no reason to believe that the Prospectus/Proxy Statement, including any
amendments or supplements thereto (except for the financial information,
financial statements, notes to financial statements, financial schedules and
other financial or statistical data and stock valuation information contained or
incorporated by reference therein and except for any information supplied by
HUBCO for inclusion therein, as to which counsel need express no belief), as of
the date of mailing thereof and as of the date of the meeting of shareholders of
PFC to approve the Merger, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make any statement therein, in
light of the circumstances under which it was made, not misleading. Counsel may
state in connection with the foregoing that such counsel has not independently
verified and does not assume any responsibility for the accuracy, completeness
or fairness of any information or statements contained in the Prospectus/Proxy
Statement, except with respect to identified statements of law or regulations or
legal conclusions relating to PFC or BTH or the transactions contemplated in the
Agreement and that it is relying as to materiality as to factual matters on
certificates of officers and representatives of the parties to the Agreement and
other factual representations by PFC and BTH.
Such counsel's opinion shall be limited to matters governed
by federal banking and securities laws and by Delaware corporate law and, with
respect to paragraph (c), New York corporate law.
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EXHIBIT 6.3
FORM OF OPINION OF COUNSEL TO HUBCO
TO BE DELIVERED TO PFC ON THE EFFECTIVE TIME
(a) HUBCO is a corporation validly existing under the laws
of the State of New Jersey. HUBCO has the corporate power and authority to own
or lease all of its properties and assets and to carry on its business as
described in the Proxy Statement/Prospectus on pages __ and __ under the caption
"_____________________________." HUBCO is registered as a bank holding company
under the BHCA.
(b) Each Subsidiary of HUBCO listed as such in the
HUBCO Disclosure Schedule is validly existing under the laws of the jurisdiction
of its incorporation.
(c) The authorized capital stock of HUBCO consists
of ____________ shares of common stock, no par value per share ("HUBCO Common
Stock") and _____________ shares of Series B, no par value, Convertible
Preferred Stock (the "Authorized Preferred Stock). Except for to our knowledge,
there are no outstanding subscription rights, options, conversion rights,
warrants or other agreements or commitments of any nature whatsoever (either
firm or conditional) obligating HUBCO to issue, deliver or sell, cause to be
issued, delivered or sold, or restricting HUBCO from selling any additional
HUBCO Common Stock or Authorized Preferred Stock or obligating HUBCO to grant,
extend or enter into any such agreement or commitment. The HUBCO Common Stock to
be issued in connection with the Merger in accordance with Article II of the
Agreement, when so issued in accordance therewith, will be duly authorized,
validly issued, fully paid and non-assessable, free of preemptive rights and
free and clear of all liens, encumbrances or restrictions created by HUBCO.
(d) The Agreement has been authorized, executed and
delivered by HUBCO and constitutes the valid and binding obligations of HUBCO
enforceable in accordance with its terms, except that the enforceability of the
obligations of HUBCO may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, or laws affecting institutions the
deposits of which are insured by the FDIC or other laws heretofore or hereafter
enacted relating to or affecting the enforcement of creditors' rights generally
and by principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). In addition, certain remedial
and other provisions of the Agreement may be limited by implied covenants of
good faith, fair dealing, and commercially reasonable conduct, by judicial
discretion, in the instance of equitable remedies, and by applicable public
policies and laws.
(e) Subject to satisfaction of the conditions set forth in
the Agreement, the execution and delivery of the Agreement and the consummation
of the transactions contemplated thereby will not (i) conflict with or violate
any provision of or result in the breach of any provision of the Certificate of
Incorporation or By-Laws of HUBCO; (ii) based on certificates of officers of
HUBCO and without independent verification, conflict with or violate in any
material respect, or result in a material breach or violation of the terms or
provisions of, or constitute a default under, or result in (whether upon or
after the giving of notice or lapse of time or both) any material obligation
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under, any indenture, mortgage, deed of trust or loan agreement or any other
agreement, instrument, judgment, order, arbitration award or decree of which we
have knowledge (through our representation of HUBCO in connection therewith or
in the course of our representation of HUBCO in connection with the Agreement)
and to which HUBCO is a party or by which HUBCO is bound; or (iii) cause HUBCO
to violate any corporation or banking law applicable to HUBCO.
(f) All actions of the directors and shareholders of
HUBCO required by federal banking law and New Jersey law or by the Certificate
of Incorporation or By-Laws of HUBCO, to be taken by HUBCO to authorize the
execution, delivery and performance of the Agreement and consummation of the
Merger have been taken.
(g) Assuming that there has been due authorization of
the Merger by all necessary corporate and governmental proceedings on the part
of PFC and that PFC has taken all action required to be taken by it prior to the
Effective Time, upon the appropriate filing of the Certificates of Merger in
respect of the Merger with the Delaware Secretary of State and the New Jersey
Secretary of State in accordance with Section 1.6 of the Agreement, the Merger
will become effective at the Effective Time, as such term is defined in Section
1.6, and upon effectiveness of the Merger each share of PFC Common Stock will be
converted as provided in Article II of the Agreement.
(h) No approvals, authorizations, consents or other actions
or filings under federal banking law or New Jersey law ("Approvals") are
required to be obtained by HUBCO in order to permit the execution and delivery
of the Agreement by HUBCO and the performance by HUBCO of the transactions
contemplated thereby other than those Approvals which have been obtained or
those Approvals or consents required to be obtained by PFC.
(i) The Registration Statement has been declared effective
by the Securities and Exchange Commission ("SEC") under the 1933 Act and we are
not aware that any stop order suspending the effectiveness has been issued under
the 1933 Act or proceedings therefor initiated or threatened by the SEC.
We are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Proxy Statement/Prospectus and make no representation that we
have independently verified the accuracy, completeness or fairness of such
statements, but from our examination of the Proxy Statement/Prospectus and our
general familiarity with HUBCO no facts have come to our attention that caused
us to believe that (except for financial statements and other tabular financial
information, and other financial and statistical data and information, as to
which we do not express any belief) the Proxy Statement/Prospectus on the date
of the mailing thereof and on the date of the meeting of stockholders of PFC at
which the Agreement was approved, contained any untrue statement of a material
fact regarding HUBCO or the Merger, or omitted to make a material fact regarding
HUBCO or the Merger therein, in light of the circumstances under which they were
made, not misleading.
We are members of the Bar of the State of New Jersey and
we express no opinion as to any of the laws of any jurisdiction other than the
laws of the State of New Jersey and federal laws and regulations of the United
States of America.
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