EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of March 31, 1998
("AGREEMENT"), is among HUBCO, Inc. ("HUBCO"), a New Jersey corporation
and registered bank holding company, Lafayette American Bank (the
"BANK"), a Connecticut state-chartered commercial banking corporation and
wholly-owned subsidiary of HUBCO, Dime Financial Corporation, a
Connecticut corporation and registered bank holding company ("DFC"), and
The Dime Savings Bank of Wallingford, a state savings bank and wholly-
owned subsidiary of DFC (the "DIME").
RECITALS
The respective Boards of Directors of HUBCO and DFC have each
determined that it is in the best interests of HUBCO and DFC and their
respective shareholders for HUBCO to acquire DFC by merging DFC with and
into HUBCO with HUBCO surviving and DFC shareholders receiving the
consideration hereinafter set forth. Immediately after the merger of DFC
into HUBCO, the Dime shall be merged with and into the Bank with the Bank
surviving.
The respective Boards of Directors of DFC, HUBCO, the Bank and
the Dime have each duly adopted and approved this Agreement and the Board
of Directors of DFC has directed that it be submitted to DFC's
shareholders for approval.
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 DFC Common Stock (as hereinafter defined) and, simultaneously
with the execution of this Agreement, DFC is issuing an option to HUBCO
(the "HUBCO STOCK OPTION") to purchase certain shares of the authorized
and unissued DFC Common Stock 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), DFC shall be
merged with and into HUBCO (the "MERGER") in accordance the New Jersey
Business Corporation Act (the "NJBCA") and the Connecticut Business
Corporation Act ("CBC") 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 DFC and thereupon and thereafter, all the
property, rights, privileges, powers and franchises of each of HUBCO and
DFC 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 DFC 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 DFC in
any contract 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 DFC 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 DFC 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 and officers of HUBCO shall be the directors and officers of
the Surviving Corporation.
1.6 CLOSING, CLOSING DATE, DETERMINATION DATE 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 five business days notice (the "CLOSING NOTICE") given to DFC,
which date (the "CLOSING DATE") shall be not less than seven nor more
than 10 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 the first date on which all
federal and state bank regulatory approvals (and waivers, if applicable)
necessary for consummation of the Merger shall have been received and
either party shall have informed the other party that all such federal
and state bank regulatory approvals (and waivers, if applicable) have
been received. Simultaneous with or immediately following the Closing,
HUBCO and DFC shall cause to be filed (a) a certificate of merger, in
form and substance satisfactory to HUBCO and DFC, with the Secretary of
State of the State of New Jersey (the "New Jersey CERTIFICATE OF MERGER")
and (b) a certificate of merger, in form and substance satisfactory to
HUBCO and DFC, with the Secretary of State of Connecticut (the
"Connecticut Certificate of Merger"). Each Certificate of Merger shall
specify as the "EFFECTIVE TIME" of the Merger, which Effective Time shall
be a date and time following the Closing agreed to by HUBCO and DFC
(which date and time the parties currently anticipate will be the close
of business on the Closing Date). In the event the parties fail to
specify the date and time in the merger certificates, the Merger shall
become effective upon (and the "EFFECTIVE TIME" shall be) the later of
the time of the filing of the New Jersey Certificate of Merger or the
Connecticut Certificate of Merger.
1.7 THE BANK MERGER. Immediately following the Effective
Time, the Dime shall be then merged with and into the Bank (the "BANK
MERGER") in accordance with the provisions of Section 36a-125 of the
Banking Law of Connecticut (the "BANKING ACT"). In the Bank Merger, the
Bank shall be the surviving bank (the "SURVIVING BANK"). Upon the
consummation of the Bank Merger, the separate existence of the Dime shall
cease and the Surviving Bank shall be considered the same business and
corporate entity as each of the Dime and the Bank and all of the
property, rights, privileges, powers and franchises of each of the Dime
and the Bank shall vest in the Surviving Bank and the Surviving Bank
shall be deemed to have assumed all of the debts, liabilities,
obligations and duties of each of the Dime and the Bank and shall have
succeeded to all or each of their relationships, fiduciary or otherwise,
as fully and to the same extent as if such property, rights, privileges,
powers, franchises, debts, obligations, duties and relationships had been
originally acquired, incurred or entered into by the Surviving Bank.
Upon the consummation of the Bank Merger, the certificate of
incorporation and By-Laws of the Bank shall be the certificate of
incorporation and By-Laws of the Surviving Bank and the officers and
directors of the Bank shall be the officers and directors of the
Surviving Bank, except as provided in Section 5.20 hereof. Following the
execution of this Agreement, the Dime and the Bank shall execute and
deliver a merger agreement (the "BANK MERGER AGREEMENT"), both in form
and substance reasonably satisfactory to the parties hereto,
substantially as set forth in EXHIBIT 1.7 hereto, for delivery to the
Commissioner of the Connecticut Department of Banking (the "DEPARTMENT")
and the Federal Deposit Insurance Corporation (the "FDIC") for approval
of the Bank Merger.
ARTICLE II - CONVERSION OF DFC SHARES
2.1. CONVERSION OF DFC COMMON STOCK. Each share of common
stock, par value $1.00 per share, of DFC ("DFC COMMON STOCK"), issued and
outstanding immediately prior to the Effective Time (other than Excluded
Shares, as hereinafter defined) shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted as
follows:
(a) EXCHANGE OF COMMON STOCK; EXCHANGE RATIO. Subject
to the provisions of this Section 2.1, each share of DFC Common Stock
issued and outstanding immediately prior to the Effective Time (excluding
any treasury shares and shares to be canceled pursuant to Section 2.1(d)
hereof) shall be converted at the Effective Time into the right to
receive a certain number (the "EXCHANGE RATIO") of shares of Common
Stock, no par value, of HUBCO ("HUBCO COMMON STOCK") determined in
accordance with the next sentence, subject to adjustment as provided in
Section 2.1(c) and subject to the payment of cash in lieu of fractional
shares in accordance with Section 2.2(e). The Exchange Ratio shall be a
number between 1.05 and .93, with the exact number determined from the
quotient, rounded to the nearest thousandth, obtained by dividing $38.25
by the Median Pre-Closing Price (as defined in Section 2.2(e)) of HUBCO
Common Stock, except if the quotient is greater than 1.05, the Exchange
Ratio shall be 1.05 and if the quotient is less than .93, the Exchange
Ratio shall be .93.
(b) CANCELLATION OF DFC CERTIFICATES. After the
Effective Time, all such shares of DFC Common Stock (other than those
canceled pursuant to Section 2.1(d)) shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and
each certificate previously evidencing any such shares (other than those
canceled 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 DFC
Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares of DFC Common Stock
except as otherwise provided herein or by law. Such certificates
previously evidencing such shares of DFC Common Stock (other than those
canceled 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 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 Median Pre-Closing Price shall be
correspondingly adjusted to reflect such stock dividend, stock split,
reclassification, recapitalization, merger, combination or exchange of
shares.
(d) EXCLUDED SHARES. All shares of DFC Common Stock
held by DFC in its treasury or owned by HUBCO or by any of HUBCO's
wholly-owned subsidiaries (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 ("EXCLUDED
SHARES") shall be canceled.
2.2. EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. As of the Effective Time, HUBCO
shall deposit, or shall cause to be deposited, with Xxxxxx United Bank,
Trust Department or another bank or trust company designated by HUBCO and
reasonably acceptable to DFC (the "EXCHANGE AGENT"), for the benefit of
the holders of shares of DFC 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 any event
no later than five 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 DFC Common Stock (the "CERTIFICATES"),
(i) a letter of transmittal (the form and substance of which is
reasonably agreed to by HUBCO and DFC 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 and cash in lieu of fractional
shares. 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 DFC 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 Certificates so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of shares
of DFC Common Stock which is not registered in the transfer records of
DFC, 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
DFC 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.
(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 DFC COMMON STOCK. All shares of
HUBCO Common Stock issued and cash paid upon conversion of the shares of
DFC 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 DFC Common Stock.
(e) NO FRACTIONAL SHARES; MEDIAN PRE-CLOSING PRICE. 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 shareholder of HUBCO. Cash shall be paid in lieu of
fractional shares of HUBCO Common Stock, based upon the Median Pre-
Closing Price per whole share of HUBCO Common Stock. The "MEDIAN PRE-
CLOSING 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 consecutive trading day period which ends on
(and includes) the Determination Date. The "CLOSING PRICE" shall mean
the closing price of HUBCO Common Stock as supplied by the NASDAQ Stock
Market and published in THE WALL STREET JOURNAL. A "TRADING DAY" shall
mean a day for which a Closing Price is so supplied and published. (The
NASDAQ Stock Market, or such other national securities exchange on which
HUBCO Common Stock may be traded after the date hereof, is referred to
herein as "NASDAQ")
(f) TERMINATION OF EXCHANGE FUND. Any portion of the
Exchange Fund which remains undistributed to the holders of DFC Common
Stock for two years after the Effective Time shall be delivered to HUBCO,
upon demand, and any holders of DFC 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, the Bank nor the
Exchange Agent shall be liable to any holder of shares of DFC 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 DFC 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 DFC 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 DFC shall be closed and there shall be no further
registration of transfers of shares of DFC Common Stock thereafter on the
records of DFC. 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. DFC STOCK OPTIONS. The Stock Options (as defined in
Section 3.2) described in the DFC DISCLOSURE SCHEDULE are issued and
outstanding pursuant to the 1986 Stock Option and Incentive Plan, the
City Savings Bank of Meriden Stock Option Plan, the 1986 Stock Option
Plan for Outside Directors, Non-Qualified Stock Option Agreements, as
amended, for Xxxxxxx X. Xxxxxxx and M. Xxxxxx Xxxxxxx, the 1996 Stock
Option and Incentive Plan, the Chairman's 1996 Non-Qualified Stock Option
Agreement, and the 1996 Stock Option Plan for Outside Directors (the "DFC
STOCK OPTION PLANS") and the agreements pursuant to which such Stock
Options were granted (each, an "OPTION GRANT AGREEMENT"). HUBCO
acknowledges and agrees to honor the provisions of the DFC Stock Option
Plan and the Option Grant Agreement, including those relating to vesting
and conversion in connection with a change in control of DFC. Each Stock
Option outstanding at the Effective Time (each a "CONTINUING STOCK
OPTION") shall be converted into an option to purchase HUBCO Common
Stock, wherein (i) the right to purchase shares of DFC Common Stock
pursuant to the Continuing 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
DFC 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 Continuing Stock Option on which it was based,
including the length of time within which the option may be exercised
(which shall not be extended except that the holder of a Stock Option who
continues in the service of HUBCO or a subsidiary of HUBCO shall not be
deemed to have terminated service for purposes of determining the
Continuing Stock Option exercise period) and for all Continuing Stock
Options, such adjustments shall be and are intended to be effected in a
manner which is consistent with Section 424(a) of the Code (as defined in
Section 3.2 hereof). If a Stock Option Grant Agreement also provided for
a Stock Appreciation Right, the Stock Appreciation Right shall also
continue (subject to the same adjustments as are provided for Continuing
Stock Options). Shares of HUBCO Common Stock issuable upon exercise of
Continuing Stock Options shall be covered by an effective registration
statement on Form S-8, and HUBCO shall use its reasonable best efforts to
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 DFC
References herein to "DFC 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 DFC to HUBCO. DFC hereby represents and warrants to HUBCO as
follows:
3.1. CORPORATE ORGANIZATION
(a) DFC is a corporation duly organized and validly
existing under the laws of the State of Connecticut. DFC has the
corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted, and is
duly licensed or qualified to do business in each jurisdiction in which
the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing
or qualification necessary, except where the failure to be so licensed or
qualified would not have a material adverse effect on the business,
operations, assets or financial condition of DFC and the DFC Subsidiaries
(as defined below), taken as a whole. DFC is registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended
(the "BHCA").
(b) Each DFC Subsidiary and its jurisdiction of
incorporation is listed in the DFC DISCLOSURE SCHEDULE. For purposes of
this Agreement, the term "DFC SUBSIDIARY" means any corporation,
partnership, joint venture or other legal entity in which DFC, directly
or indirectly, owns at least a 50% stock or other equity interest or for
which DFC, 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
"DFC SUBSIDIARY" shall include any entity which was a DFC Subsidiary at
any time during such period. The Dime is a Connecticut state-chartered
savings bank duly organized and validly existing in stock form under the
laws of the State of Connecticut. All eligible accounts of depositors
issued by the Dime are insured by the Bank Insurance Fund of the FDIC
(the "BIF") to the fullest extent permitted by law. Each DFC 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 or qualified would not have a material adverse effect
on the business, operations, assets or financial condition of DFC and the
DFC Subsidiaries, taken as a whole.
(c) The DFC DISCLOSURE SCHEDULE sets forth true and
complete copies of the Certificate of Incorporation and By-Laws, as in
effect on the date hereof, of DFC and each DFC Subsidiary. Except as set
forth in Disclosure Schedule 3.1(b), the Dime and DFC do not own or
control, directly or indirectly, any equity interest in any corporation,
company, partnership, joint venture or other entity.
3.2. CAPITALIZATION. The authorized capital stock of DFC
consists of 9,000,000 shares of DFC Common Stock and 1,000,000 shares of
preferred stock. None of the preferred stock has been issued. As of
March 27, 1998, there were 5,248,067 shares of DFC Common Stock issued
and outstanding and 351,607 treasury shares. As of March 27, 1998,
there were 496,160 shares of DFC Common Stock issuable upon exercise of
outstanding stock options and stock appreciation rights. The DFC
DISCLOSURE SCHEDULE sets forth (i) all options and stock appreciation
rights which may be exercised for issuance of DFC Common Stock
(collectively, the "STOCK OPTIONS"), their strike prices and exercise
dates, 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 of each outstanding Stock Option issued
pursuant thereto. All issued and outstanding shares of DFC Common Stock,
and all issued and outstanding shares of capital stock of each DFC
Subsidiary, have been duly authorized and validly issued, are fully paid,
nonassessable and free of preemptive rights and are free and clear of any
liens, encumbrances, charges, restrictions or rights of third parties
imposed by DFC or any DFC Subsidiary. Except for the Stock Options and
the HUBCO Stock Option, neither DFC nor the Dime has granted nor 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 DFC or the
Dime 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 shareholders of DFC, and the approval of the Bank Merger
Agreement by DFC as sole shareholder of the Dime, DFC and the Dime 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 DFC and the Dime
in accordance with their respective Certificate of Incorporation and By-
Laws and applicable laws and regulations. Except for such approvals, no
other corporate proceedings not otherwise contemplated hereby on the part
of DFC or the Dime are necessary to consummate the transactions so
contemplated. This Agreement has been duly and validly executed and
delivered by DFC and the Dime, and constitutes the valid and binding
obligation of each of DFC and the Dime, enforceable against DFC and the
Dime 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 Connecticut state-chartered
savings banks 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 DFC or the Dime, nor the consummation by DFC or the Dime of the
transactions contemplated hereby in accordance with the terms hereof, or
compliance by DFC or the Dime with any of the terms or provisions hereof,
will (i) violate any provision of DFC's or the Dime's Certificate of
Incorporation 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 DFC, the Dime or any of their respective properties or assets, or
(iii) except as set forth in the DFC DISCLOSURE SCHEDULE, violate,
conflict with, result in a breach of any provisions of, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of, accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or other encumbrance upon any of the respective
properties or assets of DFC or the Dime 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 DFC or the Dime 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 DFC and the DFC 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 FDIC, the Department, the
Connecticut Department of Environmental Protection (the "DEP"), the
Securities and Exchange Commission (the "SEC"), and the shareholders of
DFC, 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 DFC or the Dime in connection with (x) the execution and
delivery by DFC of this Agreement and (y) the consummation by DFC of the
Merger, and the consummation by DFC and the Dime of the other
transactions contemplated hereby, except (i) such as are listed in the
DFC 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 DFC and the DFC
Subsidiaries taken as a whole or prevent or materially delay the
consummation of the transactions contemplated hereby. To the best of
DFC's knowledge, no fact or condition exists which DFC has reason to
believe will prevent it and the Dime from obtaining the aforementioned
consents and approvals.
3.4. FINANCIAL STATEMENTS.
(a) The DFC DISCLOSURE SCHEDULE sets forth copies of the
consolidated statements of financial condition of DFC as of December 31,
1996 and 1997, 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 1995 through 1997, in each case
accompanied by the audit report of KPMG Peat Marwick LLP, independent
public accountants with respect to DFC ("PEAT MARWICK"), filed with the
SEC under the Securities Exchange Act of 1934, as amended ("1934 ACT")
(collectively, the "DFC FINANCIAL STATEMENTS"). The DFC 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 fairly present the consolidated financial
condition of DFC 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 shareholders' equity and cash flows of DFC for the
respective periods set forth therein.
(b) The books and records of DFC 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 DFC Financial Statements (including the notes
thereto), as December 31, 1997, neither DFC nor any DFC Subsidiary had
any liabilities, whether absolute, accrued, contingent or otherwise,
material to the business, operations, assets or financial condition of
DFC and the DFC Subsidiaries, taken as a whole which were required by
GAAP (consistently applied) to be disclosed in DFC's consolidated
statement of condition as of December 31, 1997 or the notes thereto.
Since December 31, 1997, neither DFC nor any DFC 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 DFC
DISCLOSURE SCHEDULE.
3.5. BROKER'S AND OTHER FEES. Except for X.X. Xxxxxxx & Sons,
Inc. ("X.X. XXXXXXX") and First Albany Corporation ("FIRST ALBANY"),
neither Dime Financial Corporation 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 X.X. Xxxxxxx and the agreement with
First Albany are set forth in the DFC DISCLOSURE SCHEDULE. Other than
pursuant to the agreement with X.X. Xxxxxxx and First Albany or as set
forth in the DFC DISCLOSURE SCHEDULE, 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 DFC or any its
Subsidiaries.
3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as disclosed in the DFC DISCLOSURE SCHEDULE,
there has not been any material adverse change in the business,
operations, assets or financial condition of DFC and any DFC Subsidiary,
taken as a whole, since December 31, 1997 and to the best of DFC's
knowledge, no fact or condition exists which DFC 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 DFC and the
DFC 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 DFC or any DFC Subsidiary taken with the prior
written consent of HUBCO in contemplation of the transactions
contemplated hereby (including without limitation any actions taken by
DFC or the Dime pursuant to Section 5.15 of this Agreement).
(b) Except as set forth in the DFC DISCLOSURE SCHEDULE,
neither DFC nor any DFC Subsidiary has taken or permitted any of the
actions set forth in Section 5.2 hereof between December 31, 1997 and the
date hereof and, except for execution of this Agreement, and the other
documents contemplated hereby, DFC and each DFC Subsidiary has conducted
their respective businesses only in the ordinary course, consistent with
past practice.
3.7. LEGAL PROCEEDINGS. Except as disclosed in the DFC
DISCLOSURE SCHEDULE, and except for ordinary routine litigation
incidental to the business of DFC and the DFC Subsidiaries, neither DFC
nor any DFC Subsidiary is a party to any, and there are no pending or, to
the best of DFC's knowledge, threatened legal, administrative, arbitral
or other proceedings, claims, actions or governmental investigations of
any nature against DFC or any DFC Subsidiary which, if decided adversely
to DFC or any DFC Subsidiary, are reasonably likely to have a material
adverse effect on the business, operations, assets or financial condition
of DFC and the DFC Subsidiaries taken as a whole. Except as disclosed in
the DFC DISCLOSURE SCHEDULE, neither DFC nor any DFC Subsidiary is a
party to any order, judgment or decree entered in any lawsuit or
proceeding which is material to DFC or such DFC Subsidiary.
3.8. TAXES AND TAX RETURNS.
(a) DFC and each DFC 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. DFC and each DFC
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 DFC or such DFC Subsidiary through such date.
None of the federal or state income tax returns of DFC or any DFC
Subsidiary have been examined by the Internal Revenue Service (the "IRS")
or the Connecticut Department of Revenue Services within the past six
years. To the best knowledge of DFC, 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 DFC or any DFC Subsidiary, nor has DFC or any DFC
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) Except as set forth in the DFC DISCLOSURE SCHEDULE,
neither DFC nor any DFC 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 DFC or such DFC Subsidiary (nor does DFC 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) The DFC DISCLOSURE SCHEDULE lists all of DFC's and
any DFC Subsidiary's federal, state and local tax loss carry forwards
including the year in which such tax loss carry forward was accumulated.
3.9. EMPLOYEE BENEFIT PLANS.
(a) Except as set forth on the DFC DISCLOSURE SCHEDULE,
neither DFC nor any DFC Subsidiary maintains or contributes to any
"employee pension benefit plan" (the "DFC PENSION PLANS") within the
meaning of such term in Section 3(2)(A) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), "employee welfare benefit
plan" (the "DFC WELFARE PLANS") within the meaning of such term in
Section 3(1) 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 DFC nor any DFC Subsidiary has, since September 2,
1974, contributed to any "Multiemployer Plan," within the meaning of
Section 3(37) of ERISA.
(b) DFC has previously delivered to HUBCO, and included
in the DFC DISCLOSURE SCHEDULEs, a complete and accurate copy of each of
the following with respect to each of the DFC Pension Plans and DFC
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 DFC 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 DFC
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
DFC '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 DFC or any DFC 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 DFC
Pension Plan have been paid. All contributions required to be made to
each DFC 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 DFC which have not been paid have been properly recorded
on the books of DFC .
(f) Except as disclosed in the DFC DISCLOSURE SCHEDULE,
each of the DFC Pension Plans, DFC Welfare Plans and each other employee
benefit plan and arrangement identified on the DFC 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 DFC
DISCLOSURE SCHEDULE, if DFC maintains any DFC Pension Plan, DFC 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
DFC is not aware of any fact or circumstance which would disqualify any
plan, other than operational defects which could be retroactively
corrected (in accordance with the procedures of the IRS) without a
material adverse effect on DFC and the DFC Subsidiaries taken as a whole.
(g) To the best knowledge of DFC, 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 DFC Welfare Plan
or DFC Pension Plan that would result in any material tax or penalty for
DFC or any DFC Subsidiary.
(h) No DFC 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 DFC Pension Plan.
(i) No "accumulated funding deficiency," within the
meaning of Section 412 of the Code, has been incurred with respect to any
DFC Pension Plan.
(j) There are no material pending, or, to the best
knowledge of DFC, material threatened or anticipated claims (other than
routine claims for benefits) by, on behalf of, or against any of the DFC
Pension Plans or the DFC Welfare Plans, any trusts created thereunder or
any other plan or arrangement identified in the DFC DISCLOSURE SCHEDULE.
(k) Except as disclosed in the DFC DISCLOSURE SCHEDULE,
no DFC Pension Plan or DFC 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 DFC 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 DFC Financial Statements and
established in accordance with GAAP.
(m) With respect to each DFC Pension Plan and DFC
Welfare Plan that is funded wholly or partially through an insurance
policy, there will be no liability of DFC or any DFC 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 and the 1998 corporate bonus plan
included within the DFC DISCLOSURE SCHEDULE, and (ii) as set forth in the
DFC 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 DFC or any DFC 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 DFC Pension Plan
or DFC Welfare Plan.
(o) Except for the DFC Pension Plans and the DFC Welfare
Plans, and except as set forth on the DFC DISCLOSURE SCHEDULE, DFC has
no deferred compensation agreements, understandings or obligations for
payments or benefits to any current or former director, officer or
employee of DFC or any DFC Subsidiary or any predecessor of any thereof.
The DFC DISCLOSURE SCHEDULE sets forth: (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 DFC DISCLOSURE SCHEDULE,
DFC 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 DFC DISCLOSURE SCHEDULE lists each such
insurance policy and includes a copy of each agreement with a party other
than the insurer with respect to the payment, funding or assignment of
such policy. To the best of DFC 's knowledge, neither DFC nor any DFC
Pension Plan or DFC 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.
(q) Except as set forth in the DFC DISCLOSURE SCHEDULE,
DFC does not maintain any retirement plan or retiree medical plan or
arrangement for directors. The DFC DISCLOSURE SCHEDULE sets forth the
complete documentation and actuarial evaluation of any such plan.
3.10. REPORTS.
(a) The DFC DISCLOSURE SCHEDULE lists, and as to item (i)
below DFC 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 DFC since January 1, 1996
pursuant to the Securities Act of 1933, as amended ("1933 ACT"), or the
1934 Act and (ii) communication (other than general advertising materials
and press releases) mailed by DFC to its shareholders 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) DFC has filed all reports
that it was required to file with the SEC under the 1934 Act, and (ii)
DFC and the Dime each 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, DFC 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 DFC DISCLOSURE SCHEDULE lists the
dates of all examinations of DFC or the Dime conducted by either the FRB,
the FDIC or the Department since January 1, 1996 and the dates of any
responses thereto submitted by DFC or the Dime.
3.11. DFC AND DIME INFORMATION. The information relating to
DFC and the Dime, 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 shareholders of DFC in connection with the
solicitation of their approval of the Merger, as of the date the Proxy
Statement-Prospectus is mailed to shareholders of DFC, and up to and
including the date of the meeting of shareholders 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 DFC DISCLOSURE SCHEDULE, DFC and each DFC 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 DFC or such DFC Subsidiary (including, without
limitation, consumer, community and fair lending laws) (other 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 DFC
and the DFC Subsidiaries taken as a whole) and DFC 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 except
as disclosed in the DFC DISCLOSURE SCHEDULE, (i) neither DFC nor any DFC
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 DFC or any DFC
Subsidiary to any officer, employee, director or consultant thereof. The
DFC DISCLOSURE SCHEDULE sets forth true and correct copies of all
severance or employment agreements with officers, directors, employees,
agents or consultants to which DFC or any DFC Subsidiary is a party.
(b) Except as disclosed in the DFC DISCLOSURE SCHEDULE
and except for loan commitments, loan agreements and loan instruments
entered into or issued by the Dime in the ordinary course of business,
(i) as of the date of this Agreement, neither DFC nor any DFC 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 DFC and the DFC Subsidiaries taken as a whole, (ii) no
commitment, agreement or other instrument to which DFC or any DFC
Subsidiary is a party or by which either of them is bound limits the
freedom of DFC or any DFC Subsidiary to compete in any line of business
or with any person, and (iii) neither DFC nor any DFC Subsidiary is a
party to any collective bargaining agreement.
(c) Except as disclosed in the DFC DISCLOSURE SCHEDULE,
neither DFC nor any DFC Subsidiary or, to the best knowledge of DFC, 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 the Dime 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 DFC and the DFC
Subsidiaries, taken as a whole.
3.14. PROPERTIES AND INSURANCE.
(a) Except as set forth in the DFC DISCLOSURE SCHEDULE,
DFC or a DFC 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 DFC's consolidated balance
sheet as of December 31, 1997, 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,
1997), 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,
assets, and financial condition of DFC and the DFC 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, DFC 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 DFC and such Subsidiaries in all material respects as presently
occupied, used, possessed and controlled by DFC and its Subsidiaries.
(b) The business operations and all insurable properties
and assets of DFC and each DFC Subsidiary are insured for their benefit
against all risks which, in the reasonable judgment of the management of
DFC, 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 DFC adequate for the business engaged in by DFC and
the DFC Subsidiaries. As of the date hereof, neither DFC nor any DFC
Subsidiary 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.
The DFC DISCLOSURE SCHEDULE sets forth in summary form a list of all
insurance policies of DFC and the DFC Subsidiaries.
3.15. MINUTE BOOKS. As of the date of this Agreement, the
minute books of DFC and the DFC Subsidiaries contain accurate records of
all meetings and other corporate action held of their respective
shareholders and Boards of Directors (including committees of their
respective Boards of Directors) through a date not later than 30 days
prior to the date of this Agreement, and except for the Merger, no
material corporate actions were considered or approved by the
shareholders or Boards of Directors (or committees thereof) between such
date and the date of this Agreement which are not fully disclosed in the
DFC DISCLOSURE SCHEDULE. On the Closing Date, the minute books of DFC
and the DFC Subsidiaries shall contain accurate records of all meetings
and other corporate action held of their respective shareholders and
Boards of Directors (including committees of their respective Boards of
Directors) through the Closing Date.
3.16. Environmental Matters. Except as set forth in the DFC
DISCLOSURE SCHEDULE:
(a) Neither DFC nor any DFC Subsidiary has received any
written notice, citation, claim, assessment, proposed assessment or
demand for abatement alleging that DFC or such DFC 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
DFC and the DFC Subsidiaries taken as a whole. DFC 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
DFC or any DFC Subsidiary, as OREO or otherwise, or owned or controlled
by DFC or any DFC 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 DFC and the DFC Subsidiaries, taken as a whole.
(b) DFC 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 and
materials, the violation of which would have a material adverse effect on
the business, operations, assets or financial condition of DFC and the
DFC Subsidiaries taken as a whole.
(c) To the best of DFC's knowledge, DFC, each DFC
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 DFC, 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 DFC or any DFC
Subsidiary.
3.17. RESERVES. As of December 31, 1997, each of the allowance
for loan losses and the reserve for OREO properties in the DFC 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 FDIC and the
Department.
3.18. NO PARACHUTE PAYMENTS. Except as set forth in the DFC
DISCLOSURE SCHEDULE, no officer, director, employee or agent (or former
officer, director, employee or agent) of DFC or any DFC 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 DFC, a DFC
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 DFC nor any DFC
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 DFC prior to the date of this
Agreement, nor has DFC 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 DFC prior to the date of this Agreement. Neither DFC nor any
DFC 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 HUBCO by DFC prior to the date of this Agreement.
3.20. YEAR 2000 COMPLIANCE. DFC and the DFC Subsidiaries have
taken all reasonable steps necessary to address the software, accounting
and record keeping issues raised in order to be substantially Year 2000
compliant on or before the end of 1999 and DFC does not expect the future
cost of addressing such issues to be material. Neither DFC nor Dime has
received a rating from any bank regulatory agency in year 2000 compliance
as of the date hereof.
3.21. INVESTMENTS. Dime represents that it will communicate in
good faith its business decisions regarding investments. Section 3.21 of
the DFC DISCLOSURE SCHEDULE sets forth, as of the date hereof: (i) the
Dime Funds and Investment Policy (the "DIME INVESTMENT POLICY"), (ii) the
projected Maturities and estimated Cash Flows, by month, which DFC and
Dime management anticipates receiving and reinvesting, and (iii) all firm
commitments (each, a "COMMITMENT") by which either DFC or Dime is
obligated to make an investment, whether of Cash Flow, Maturities or
Sales Proceeds (each, an "INVESTMENT"). For purposes of this Agreement,
"CASH FLOW" means earnings on Investments and return of capital from
Investments (including principal paydowns, prepayments and redemptions of
Investments). "MATURITIES" means scheduled maturities of instruments.
"Cash Flow" and "Maturities" specifically exclude proceeds ("SALES
PROCEEDS") from the voluntary sale or other transfer of instruments by
DFC or Dime.
3.22. 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 DFC. HUBCO hereby represents and warrants to DFC as
follows:
4.1. CORPORATE ORGANIZATION.
(a) HUBCO is a corporation duly organized and validly
existing and in good standing 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 and is in
good standing 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, qualified or in good standing
would not have a material adverse effect on the business, operations,
assets or financial condition of HUBCO and the HUBCO Subsidiaries
(defined below), taken as a whole. HUBCO is registered as a bank holding
company under the BHCA.
(b) Each HUBCO Subsidiary 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 an 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. The Bank is a
state-chartered commercial banking corporation duly organized and validly
existing under the laws of the State of Connecticut. Xxxxxx United Bank
("HUB") is duly organized and validly existing under the laws of the
State of New Jersey. All eligible accounts of depositors issued by the
Bank and HUB are insured by the Bank Insurance Fund of the FDIC ("BIF")
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 or
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 and the Bank as in effect on the date hereof.
4.2. CAPITALIZATION. The authorized capital stock of HUBCO
consists of 53,045,000 common shares, no par value ("HUBCO COMMON
STOCK"), and 10,300,000 shares of preferred stock ("HUBCO AUTHORIZED
PREFERRED STOCK"). As of March 26, 1998, there were 22,648,970 shares of
HUBCO Common Stock issued and outstanding, and no shares of treasury
stock, and 1,000 shares of HUBCO Authorized Preferred Stock outstanding,
all of which were designated Series B, no par value, Convertible
Preferred Stock. Except as 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
as 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 and the possible need under NASDAQ rules (as hereinafter
defined) to obtain HUBCO shareholder approval, HUBCO and the Bank have
full corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby in accordance with
the terms hereof. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly approved by the Boards of Directors of HUBCO and the Bank in
accordance with their respective Certificate of Incorporation and
applicable laws and regulations. Except for such approvals, no other
corporate proceedings on the part of HUBCO or the Bank are necessary to
consummate the transactions so contemplated. This Agreement has been
duly and validly executed and delivered by HUBCO and the Bank and
constitutes a valid and binding obligation of HUBCO and the Bank,
enforceable against HUBCO and the Bank 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 or the Bank, nor the consummation by HUBCO or the Bank of the
transactions contemplated hereby in accordance with the terms hereof, or
compliance by HUBCO or the Bank with any of the terms or provisions
hereof will (i) violate any provision of the Certificate of Incorporation
or By-Laws of HUBCO or the Bank, (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 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 or the Bank 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,
operation, 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 FDIC, the FRB, the Department, the Secretary of State of New
Jersey and the Secretary of State of Connecticut and the possible need
under NASDAQ rules (as hereafter defined) to obtain shareholder approval,
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 or the Bank in connection with (x) the execution and
delivery by HUBCO or the Bank of this Agreement, and (y) the consummation
by HUBCO or the Bank 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, operation, assets or financial condition
of HUBCO and the HUBCO Subsidiaries, taken as a whole. 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, 1996 and 1997, 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 two fiscal years 1996 through
1997, in each case accompanied by the audit report of Xxxxxx Xxxxxxxx LLP
("XXXXXX XXXXXXXX"), independent public accountants with respect to HUBCO
(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.
(c) Except as and to the extent reflected, disclosed or
reserved against in the HUBCO Financial Statements (including the notes
thereto), as of December 31, 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 December 31, 1997 or the notes
thereto. Except for the transactions contemplated by this Agreement, and
the other proposed acquisitions by HUBCO reflected in any Form 8-K filed
by HUBCO with the SEC since December 31, 1997, neither HUBCO nor any
HUBCO Subsidiary has incurred any liabilities since December 31, 1997
except in the ordinary course of business and consistent with past
practice (including for other pending or contemplated acquisitions).
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 HUBCO Material Adverse Change since December 31, 1997 and to the best
of HUBCO's knowledge, no facts or condition exists which HUBCO believes
will cause a HUBCO Material Adverse Change in the future. "HUBCO
MATERIAL ADVERSE CHANGE" means any change which is material and adverse
to the consolidated financial condition, results, business or assets of
HUBCO and the HUBCO Subsidiaries taken as a whole, other than (i) a
change in the value of the respective investment and loan portfolios of
HUBCO and the HUBCO Subsidiaries as the result of a change in interest
rates generally, (ii) a 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,
(iv) changes resulting from acquisitions by HUBCO or any HUBCO Subsidiary
pending on the date hereof as set forth in the HUBCO DISCLOSURE SCHEDULE
(other than changes resulting from facts not disclosed to, or otherwise
known by, DFC on or prior to the date hereof as to which HUBCO shall bear
the burden of proof in any dispute pertaining thereto), (v) the entry,
after the date hereof, by HUBCO or any HUBCO Subsidiary into an agreement
to acquire another entity, or (vi) matters disclosed in the HUBCO
DISCLOSURE SCHEDULE.
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, taken as a
whole. Except as disclosed in the HUBCO DISCLOSURE SCHEDULE, neither
HUBCO nor any of its 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.
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 DFC 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 DFC by HUBCO prior to the date of this Agreement, nor has
HUBCO 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 DFC 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 DFC 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 DFC 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.
(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. To the best of HUBCO's knowledge, the actuarial
assumptions then utilized for such plans were reasonable and appropriate
as of the last valuation date and reflected then current market
conditions.
(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 material 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.
(i) Except as disclosed in the HUBCO DISCLOSURE SCHEDULE,
each of the HUBCO Pension Plans, HUBCO Welfare Plans and each other
employee benefit plan and arrangement identified on the HUBCO 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 HUBCO DISCLOSURE SCHEDULE, if HUBCO maintains any HUBCO Pension Plan,
HUBCO 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 HUBCO is not aware of any fact or circumstance which
would disqualify any plan, other than operational defects which could be
retroactively corrected (in accordance with the procedures of the IRS)
without a material adverse effect on HUBCO and the HUBCO Subsidiaries
taken as a whole.
(j) To the best knowledge of HUBCO, 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 HUBCO Welfare Plan
or HUBCO Pension Plan that would result in any material tax or penalty
for HUBCO or any HUBCO Subsidiary.
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, 1997, 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, 1997), 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, 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.
(a) 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.
(b) HUBCO 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
and materials, the violation of which would have a material adverse
effect on the business, operations, assets or financial condition of
HUBCO and the HUBCO Subsidiaries taken as a whole.
4.19. RESERVES. As of December 31, 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 December 31, 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. YEAR 2000 COMPLIANCE. HUBCO and the HUBCO Subsidiaries
have taken all reasonable steps necessary to address the software,
accounting and record keeping issues raised in order to be substantially
Year 2000 compliant on or before the end of 1999 and HUBCO does not
expect the future cost of addressing such issues to be material. Neither
HUBCO nor any HUBCO Subsidiary has received a rating of less than
satisfactory from any bank regulatory agency with respect to Year 2000
compliance.
4.21. 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.
ARTICLE V - COVENANTS OF THE PARTIES
5.1. CONDUCT OF THE BUSINESS OF DFC. During the period from
the date of this Agreement to the Effective Time, DFC and the Dime shall,
and shall cause each DFC 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 DFC and the Dime also shall use its
reasonable best efforts to (i) preserve its business organization and
that of the DFC Subsidiaries intact, (ii) keep available to itself and
the DFC Subsidiaries the present services of their respective employees,
and (iii) preserve for itself and HUBCO the goodwill of its customers and
those of the DFC Subsidiaries and others with whom business relationships
exist.
5.2. NEGATIVE COVENANTS. From the date hereof to the Effective
Time, except as otherwise approved by HUBCO in writing, or as set forth
in the DFC DISCLOSURE SCHEDULE, or as permitted or required by this
Agreement, neither DFC nor the Dime will:
(a) change any provision of its Certificate of
Incorporation or any similar governing documents;
(b) change any provision of its By-Laws without the
consent of HUBCO which consent shall not be unreasonably withheld;
(c) change the number of shares of its authorized or
issued capital stock (other than upon exercise of stock options or
warrants described on the DFC 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, DFC may declare, set aside or pay
dividends on the DFC Common Stock in a quarterly amount equal to $0.12
per share, with the dividend payment dates to be coordinated with HUBCO,
it being the intention of the parties that the shareholders of DFC
receive dividends for any particular calendar quarter on either the DFC
Common Stock or the HUBCO Common Stock acquired in exchange therefor
pursuant to the terms of this Agreement but not both; PROVIDED FURTHER,
that nothing contained herein shall be deemed to affect the ability of
Dime to pay dividends on its capital stock to DFC.
(d) grant any severance or termination pay (other than
pursuant to policies or contracts of DFC in effect on the date hereof and
disclosed to HUBCO in the DFC 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 DFC DISCLOSURE SCHEDULE.
(e) 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 DFC
or the Dime.
(f) 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.
(g) file any applications or make any contract with
respect to branching or site location or relocation.
(h) agree to acquire in any manner whatsoever (other than
to realize upon collateral for a defaulted loan) any business or entity.
(i) make any material change in its accounting methods or
practices, other than changes required in accordance with generally
accepted accounting principles or regulatory authorities.
(j) 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;
(k) without first conferring with HUBCO, make or commit
to make any new loan or other extension of credit in an amount of
$500,000 or more, renew for a period in excess of one year any existing
loan or other extension of credit in an amount of $500,000 or more, or
increase by $500,000 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 DFC DISCLOSURE SCHEDULE and residential mortgage
loans made in the ordinary course of business in accordance with past
practice; or
(l) agree to do any of the foregoing.
5.3. NO SOLICITATION. So long as this Agreement remains in
effect, DFC and the Dime 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 DFC or the Dime (an "ACQUISITION TRANSACTION").
Notwithstanding the foregoing, DFC may enter into discussions or
negotiations or provide information in connection with an unsolicited
possible Acquisition Transaction if the Board of Directors of DFC, 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. DFC 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 DFC and HUBCO will cause
one or more of its designated 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, DFC agrees to provide HUBCO,
and HUBCO agrees to provide DFC, with internally prepared profit and loss
statements no later than 15 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), DFC will deliver to HUBCO and HUBCO will deliver to
DFC their respective quarterly reports on Form 10-Q, as filed with the
SEC under the 1934 Act. As soon as reasonably available, but in no event
more than 90 days after the end of each calendar year, DFC will deliver
to HUBCO and HUBCO will deliver to DFC their respective Annual Reports on
Form 10-K as filed with the SEC under the 1934 Act.
5.5. ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY.
(a) DFC and the Dime shall permit HUBCO and its
representatives, and HUBCO shall permit, and cause each HUBCO Subsidiary
to permit, DFC and its representatives, reasonable access to their
respective properties, and shall disclose and make available to HUBCO and
its representatives, or DFC 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 shareholders' 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 DFC 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, DFC acknowledges that HUBCO may be involved in discussions
concerning other potential acquisitions and HUBCO shall not be obligated
to disclose such information to DFC 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 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. Notwithstanding the
foregoing provision, counsel for each party hereto may retain one copy of
all information in its files for archival purposes.
5.6. REGULATORY MATTERS.
(a) For the purposes of holding the Shareholders 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 DFC shareholders 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 DFC and HUBCO to the DFC
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 DFC 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 DFC if at any
time prior to the Shareholders' Meeting any information provided by HUBCO
in the Proxy Statement-Prospectus becomes incorrect or incomplete in any
material respect and to provide DFC with the information needed to
correct such inaccuracy or omission. HUBCO shall furnish DFC with such
supplemental information as may be necessary in order to cause the Proxy
Statement-Prospectus, insofar as it relates to HUBCO and the HUBCO
Subsidiaries, to comply with Section 5.6(a) after the mailing thereof to
DFC shareholders.
(c) DFC shall furnish HUBCO with such information
concerning DFC as is necessary in order to cause the Proxy Statement-
Prospectus, insofar as it relates to DFC, to comply with Section 5.6(a)
hereof. DFC agrees promptly to advise HUBCO if at any time prior to the
Shareholders' Meeting, any information provided by DFC 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. DFC shall furnish HUBCO with such supplemental
information as may be necessary in order to cause the Proxy Statement-
Prospectus, insofar as it relates to DFC and the Dime to comply with
Section 5.6(a) after the mailing thereof to DFC 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. DFC shall
promptly furnish HUBCO with such information regarding the DFC
shareholders as HUBCO requires to enable it to determine what filings are
required hereunder. DFC authorizes HUBCO to utilize in such filings the
information concerning DFC and the Dime provided to HUBCO in connection
with, or contained in, the Proxy Statement-Prospectus. HUBCO shall
furnish DFC's counsel with copies of all such filings and keep DFC
advised of the status thereof. HUBCO and DFC shall as promptly as
practicable file the Registration Statement containing the Proxy
Statement-Prospectus with the SEC, and each of HUBCO and DFC 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 FDIC, the FRB, the Department and the DEP. Without
limiting the foregoing, the parties shall use reasonable business efforts
to file for approval or waiver by the appropriate bank regulatory
agencies within 45 days after the date hereof. 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) DFC 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 DFC 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. DFC agrees to provide HUBCO with any information,
certificates, documents or other materials about DFC 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. DFC 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 DFC for reasonable expenses thus incurred by DFC
should this transaction be terminated for any reason. HUBCO shall not
file with the SEC any registration statement or amendment thereto or
supplement thereof containing information regarding DFC unless DFC 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, DFC shall cooperate with HUBCO to reasonably conform DFC's policies
and procedures regarding applicable regulatory matters, to those of HUBCO
as HUBCO may reasonably identify to DFC from time to time.
5.7. APPROVAL OF SHAREHOLDERS. DFC, as sole shareholder of
Dime, will approve the Bank Merger Agreement. DFC will (i) take all
steps necessary duly to call, give notice of, convene and hold a meeting
of the shareholders of DFC (the "SHAREHOLDERS MEETING") for the purpose
of securing the approval of shareholders of this Agreement, (ii) subject
to the qualification set forth in Section 5.3 hereof and the right not to
make a recommendation or to withdraw a recommendation if (x) its
investment banker withdraws its fairness opinion prior to the
Shareholders' Meeting or (y) DFC's Board of Directors, after consulting
with counsel, determines in the exercise of its fiduciary duties that
such recommendation should not be made or should be withdrawn, recommend
to the shareholders of DFC the approval of this Agreement and the
transactions contemplated hereby and use its reasonable best efforts to
obtain, as promptly as practicable, such approval, and (iii) cooperate
and consult with HUBCO with respect to each of the foregoing matters.
If it becomes necessary under NASDAQ rules or applicable laws
to obtain HUBCO shareholder approval, HUBCO shall take all steps
necessary to obtain the approval of its shareholders as promptly as
possible. In connection therewith, HUBCO shall take all steps necessary
to duly call, give notice and convene a meeting of its shareholders for
such purpose.
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 DFC in writing or as
permitted or required by this Agreement, HUBCO will use reasonable
business efforts to maintain and preserve intact its business
organization, properties, leases, employees and advantageous business
relationships, and HUBCO will not, nor will it permit any HUBCO
Subsidiary to, take any action: (i) 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, or prior to, the
Effective Time, or (ii) that would cause any of its conditions to Closing
not to be satisfied, or (iii) that would constitute a breach or default
of its obligations under this Agreement.
(c) HUBCO, Bank, DFC and the Dime will use reasonable
efforts to cause the Merger to occur on or before August 31, 1998.
5.9. PUBLIC ANNOUNCEMENTS. HUBCO and DFC 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 DFC 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 DFC determines that a material condition to its obligation to
consummate the transactions contemplated hereby cannot be fulfilled on or
prior to December 31, 1998 (the "CUTOFF DATE") and that it will not waive
that condition, it will promptly notify the other party. Except for any
acquisition or merger discussions HUBCO may enter into with other
parties, DFC and HUBCO will promptly inform the other of any facts
applicable to DFC 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. EMPLOYEE MATTERS.
(a) Following consummation of the Merger, HUBCO agrees
with DFC to honor the existing written employment and severance contracts
with officers and employees of DFC and Dime that are included in the DFC
Disclosure Schedule.
(b) Following consummation of the Merger, the Bank will
decide whether to continue each of the Dime and/or DFC's pension and
welfare plans for the benefit of employees of Dime and DFC, or to have
such employees become covered under a HUBCO Pension and Welfare Plan. If
HUBCO decides to cover Dime and DFC employees under a HUBCO Pension and
Welfare Plan, such employees will receive credit for prior years of
service with Dime and/or DFC for purposes of determining eligibility to
participate, and vesting and eligibility for early retirement benefits,
other than qualification for the "Rule of 85," if applicable. No prior
existing condition limitation shall be imposed with respect to any
medical coverage plan as a result of the Merger.
(c) Following the consummation of the Merger, the Bank
shall honor Dime's severance policy as specified in Section 5.2(d) of the
DIME DISCLOSURE SCHEDULE for six months and to recognize years of service
completed while employed by DFC and/or Dime for purposes of such policy.
Following the expiration of the foregoing severance policy, any years of
service recognized for purposes of this Section 5.11(c) will be taken
into account under the terms of any applicable severance policy of HUBCO.
(d) HUBCO intends to continue to make charitable
contributions consistent with past practices of Dime, as is consistent
with prudent banking. HUBCO will offer comparable employment to all Dime
branch employees in good standing. HUBCO will use its best efforts to
offer comparable employment to all other Dime employees in good standing.
Comparable employment shall mean similar employment at a location less
than 35 miles from their current location and as specified in the DFC
DISCLOSURE SCHEDULE.
(e) Employees of DFC or Dime who continue as employees of
HUBCO or Bank following the Closing shall be entitled initially to the
amount of vacation time per year to which they were previously entitled
under the applicable DFC or Dime vacation policy or, if greater, the
amount of vacation time per year to which they would be entitled under
the applicable HUBCO or Bank. Thereafter, increases in the amount of
vacation time per year shall be based solely on the applicable HUBCO or
Bank vacation policy.
5.12. 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 which corrects any
representation or warranty which was untrue when made shall eliminate the
other party's right (if any) to terminate this Agreement based on the
original untruth of the representation or warranty; PROVIDED, that the
other party shall be deemed to have waived such right if it does not
exercise such right within 15 days after receiving the correcting
supplement or amendment.
5.13. TRANSACTION EXPENSES OF DFC.
(a) For planning purposes, DFC shall, within 15 days
from the date hereof, provide HUBCO with its estimated budget of
transaction-related expenses reasonably anticipated to be payable by DFC
in connection with this transaction, including the fees and expenses of
counsel, accountants, investment bankers and other professionals. DFC
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, DFC
shall ask all of its attorneys and other professionals to render current
and correct invoices for all unbilled time and disbursements. DFC shall
accrue and/or pay all of such amounts as soon as possible.
(c) DFC shall cause its professionals to render monthly
invoices within 15 days after the end of each month. DFC shall advise
HUBCO monthly of all out-of-pocket expenses which DFC has incurred in
connection with this transaction.
(d) HUBCO, in reasonable consultation with DFC, shall
make all arrangements with respect to the printing and mailing of the
Proxy Statement-Prospectus.
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 DFC or the
Dime or serves or has served at the request of DFC or the Dime 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 DFC or the Dime or serves or has
served at the request of DFC or the Dime 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 DFC or
the Dime or any of their respective affiliates, or by any former or
present shareholder of DFC (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 DFC or
the Dime or of any committee of DFC's or the Dime's Board of Directors,
the events leading up to the execution of this Agreement, any statement,
announcement, recommendation or solicitation made in connection therewith
or related thereto (or the absence of any of the foregoing) and any
breach of any duty in connection with any of the foregoing, or (ii) the
enforcement of the obligations of HUBCO set forth in this Section 5.14,
in each case to the fullest extent which DFC or the Dime would have been
permitted under any applicable law and their respective Certificates of
Incorporation 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 DFC or the Dime immediately prior to
the Effective Time with respect to the indemnification of the Indemnitees
arising out of the Certificate of Incorporation or By-Laws of DFC or the
Dime, or arising out of any written indemnification agreements between
DFC and/or the Dime and such persons disclosed in the DFC 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 DFC's and the Dime'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 DFC's and the Dime'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 DFC's and
the Dime'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 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 BANK POLICIES AND BANK MERGER. Notwithstanding that DFC
believes that it has established all reserves and taken all provisions
for possible loan losses required by GAAP and applicable laws, rules and
regulations, DFC 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 Bank Merger, DFC and HUBCO shall consult and
cooperate with each other with respect to (i) conforming to the extent
appropriate, based upon such consultation, DFC's loan, accrual and
reserve policies and DFC's other policies and procedures regarding
applicable regulatory matters, including without limitation Federal
Reserve, the Bank Secrecy Act and FDIC matters, to those policies of
HUBCO as HUBCO may reasonably identify to DFC from time to time, (ii) new
extensions of credit or material revisions to existing terms of credits
by Bank, in each case where the aggregate exposure exceeds $500,000, and
(iii) conforming, based upon such consultation, the composition of the
investment portfolio and overall asset/liability management position of
DFC and the Dime to the extent appropriate; PROVIDED that any required
change in DFC's practices in connection with the matters described in
clause (i) or (iii) above need not be effected until the parties receive
all necessary governmental approvals and consents to consummate the
transactions contemplated hereby,
5.16 COMPLIANCE WITH ANTITRUST LAWS. Each of HUBCO and DFC
shall use its reasonable best efforts to resolve such objections, if any,
which may be asserted with respect to the Merger under antitrust laws,
including, without limitation, the Xxxx-Xxxxx-Xxxxxx Act. In the event a
suit is threatened or instituted challenging the Merger as violative of
antitrust laws, each of HUBCO and DFC shall use its reasonable best
efforts to avoid the filing of, resist or resolve such suit. HUBCO and
DFC shall use their reasonable best efforts to take such action as may be
required: (a) by the Antitrust Division of the Department of Justice or
the Federal Trade Commission in order to resolve such objections as
either of them may have to the Merger under antitrust laws, or (b) by any
federal or state court of the United States, in any suit brought by a
private party or governmental entity challenging the Merger as violative
of antitrust laws, in order to avoid the entry of, or to effect the
dissolution of, any injunction, temporary restraining order, or other
order which has the effect of preventing the consummation of the Merger.
Reasonable best efforts shall include, but not be limited to, the proffer
by HUBCO of its willingness to accept an order agreeing to the
divestiture, or the holding separate, of any assets of HUBCO or DFC,
except to the extent that any such divestitures or holding separate
arrangement would have a material adverse effect on HUBCO. The entry by
a court, in any suit brought by a private party or governmental entity
challenging the Merger as violative of antitrust laws, of an order or
decree permitting the Merger, but requiring that any of the businesses,
product lines or assets of HUBCO or DFC be divested or held separate
thereafter shall not be deemed a failure to satisfy the conditions
specified in Section 6.1 hereof except to the extent that any
divestitures or holding separate arrangement would have a material
adverse effect on HUBCO and HUBCO shall not have voluntarily consented to
such divestitures or holding separate arrangements. For the purposes of
this Section 5.16, the divestiture or the holding separate of a branch or
branches of the Bank with, in the aggregate, less than $50,000,000 in
assets shall not be considered to have a material adverse effect on
HUBCO.
5.17 POOLING AND TAX-FREE REORGANIZATION TREATMENT. Prior to
the date hereof, neither HUBCO or DFC 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 DFC 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.
5.18 COMFORT LETTERS. HUBCO shall cause Xxxxxx Xxxxxxxx, its
independent public accountants, to deliver to DFC, and DFC shall cause
Peat Marwick, 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 Shareholders Meeting of DFC, in the form customarily
issued by such accountants at such time in transactions of this type.
5.19 AFFILIATES. Promptly, but in any event within two weeks,
after the execution and delivery of this Agreement, DFC shall deliver to
HUBCO (a) a letter identifying all persons who, to the knowledge of DFC,
may be deemed to be affiliates of DFC under Rule 145 of the 1933 Act and
the pooling-of-interests accounting rules, including, without limitation,
all directors and executive officers of DFC and (b) use its reasonable
best efforts to cause each person who may be deemed to be an affiliate of
DFC to execute and deliver to HUBCO a letter agreement, substantially in
the form of EXHIBIT 5.19-1, 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 5.19-2 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 DFC 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 5.19-1.
5.20 APPOINTMENTS. HUBCO agrees to cause five current
directors of Dime to be appointed to the Board of Directors of the
Surviving Bank and to invite each other director of Dime to serve on a
regional advisory board of the Surviving Bank.
5.21 INVESTMENT POLICY. From the date hereof through and
including June 15, 1998, DFC and Dime shall limit their Investment of
Cash Flow and Maturities to instruments which are permissible under the
Dime Investment Policy. From and including June 16, 1998 through the
Effective Time, DFC and Dime shall limit their Investment of Cash Flow
and Maturities to instruments which are permissible under the HUBCO
Investment Policy. From the date hereof through the Effective Time, DFC
and Dime shall limit their Investment of Sales Proceeds to instruments
which are permissible under the HUBCO Investment Policy. From the date
hereof through the Effective Time, DFC and Dime shall: (i) provide notice
to HUBCO, prior to or contemporaneous with each Investment, of the
intended nature and amount of such Investment, (ii) provide HUBCO written
reports of each week's Investments promptly following such week, and
(iii) not make any Commitments which would obligate either of them to
make an Investment at any time after June 15, 1998 which would not be
permissible under the HUBCO Investment Policy.
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 DFC SHAREHOLDERS; SEC REGISTRATION. This
Agreement and the transactions contemplated hereby shall have been
approved by the requisite vote of the shareholders of DFC, and if
required, by the requisite vote of the shareholders of HUBCO. The HUBCO
Registration Statement shall have been declared effective by the SEC and
shall not be subject to a stop order or any threatened stop order, and
the issuance of the 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 FDIC, the Department, the FRB, the SEC and the
DEP) required to consummate the transactions contemplated hereby shall
have been obtained without any term or condition which would materially
impair the value of DFC and the Dime, 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 DFC determines in good faith, based upon the advice of their
respective counsel, makes it inadvisable to proceed with the Merger
because any such suit, action or proceeding has a significant potential
to be resolved in such a way as to deprive the party electing not to
proceed of any of the material benefits to it of the Merger.
(d) TAX OPINION. HUBCO and DFC shall each have received
an opinion, dated as of the Effective Time, of Pitney, Xxxxxx, Xxxx &
Xxxxx, reasonably satisfactory in form and substance to DFC 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 such 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
DFC; (iii) no gain or loss will be recognized by the DFC shareholders
upon the exchange in the Merger of DFC Common Stock into HUBCO Common
Stock (except with respect to cash received in lieu of a fractional share
interest in DFC Common Stock; (iv) the tax basis of any HUBCO Common
Stock received in exchange for DFC Common Stock shall equal the basis of
the recipient's DFC 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 DFC Common
Stock will include the period during which DFC 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 DFC, 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 DFC AND THE DIME. Except for those representations which
are made as of a particular date, the representations and warranties of
DFC 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. DFC 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 DFC 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
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 DFC 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 DFC, dated the Closing Date, in form and substance
reasonably satisfactory to HUBCO, substantially in accordance with
Exhibit 6.2(b) hereto.
(c) CERTIFICATES. DFC 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. DFC shall have furnished HUBCO with
letters from all attorneys representing DFC and the Dime in any matters
confirming that all material legal fees have been paid in full for
services rendered as of the Effective Time.
(e) MERGER RELATED EXPENSE. DFC 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 DFC shall be
reasonable.
(f) YEAR 2000 COMPLIANCE. Neither DFC nor Dime shall
have received a rating of less than satisfactory from any bank regulatory
agency in year 2000 compliance.
6.3. CONDITIONS TO THE OBLIGATIONS OF DFC UNDER THIS AGREEMENT.
The obligations of DFC 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 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. DFC shall have received
an opinion of counsel to HUBCO, dated the Closing Date, in form and
substance reasonably satisfactory to DFC, substantially in accordance
with Exhibit 6.3(b) hereto.
(c) FAIRNESS OPINION. DFC shall have received an opinion
from X.X. Xxxxxxx, dated no more than three days prior to the date the
Proxy Statement-Prospectus is mailed to DFC's shareholders (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 shareholders of DFC hereunder is fair to such
shareholders from a financial point of view ("FAIRNESS OPINION").
(d) CERTIFICATES. HUBCO shall have furnished DFC 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
DFC may reasonably request.
(e) BANK DIRECTOR APPOINTMENT. Five directors, nominated
by DFC and acceptable to HUBCO, shall have been added to the Board of
Directors of the Bank.
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 shareholders of DFC:
(a) by mutual written consent of the parties hereto;
(b) by HUBCO or DFC (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 shareholders of DFC is taken and such
shareholders fail to approve this Agreement at the meeting (or any
adjournment or postponement thereof) held for such purpose, or (iii) if a
vote of the shareholders of HUBCO is required by applicable NASDAQ rules,
such vote is taken and such shareholders fail to approve this Agreement
at the meeting (or any adjournment or postponement thereof) held for such
purpose;
(c) by HUBCO or DFC 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 DFC if any such application is approved with conditions
(other than conditions which are customary in such regulatory approvals)
which would materially impair the value of DFC and the Dime, 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 DFC and the Dime, taken as a whole, from that disclosed by
DFC in DFC's Annual Report on Form 10-K for the year ended December 31,
1997 (it being understood that those matters disclosed in the DFC
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 DFC
hereunder and such breach shall not have been remedied within 30 days
after receipt by DFC of notice in writing from HUBCO to DFC specifying
the nature of such breach and requesting that it be remedied;
(e) by DFC, if (i) there shall have occurred a HUBCO
Material Adverse Change from that disclosed by HUBCO in HUBCO's Annual
Report on Form 10-K for the year ended December 31, 1997; 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 DFC specifying the nature of such breach and requesting that it be
remedied;
(f) by DFC, if DFC'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;
(h) by DFC 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 DFC, if (either before or after its approval by
the shareholders of DFC) its Board of Directors so determines by a vote
of a majority of the members of its entire Board, at any time during the
three (3) business day period commencing with the Determination Date, if
the Median Pre-Closing Price of HUBCO Common Stock Average Price on the
Determination Date is less than $31.43. Notwithstanding the foregoing,
if DFC elects to exercise its termination right pursuant to this
subsection (i), it shall give prompt written notice to HUBCO (provided
that such notice of election to terminate may be withdrawn at any time
within the aforementioned three (3) business day period)). During the
three (3) business day period commencing with its receipt of such notice,
HUBCO shall have the option of increasing the consideration to be
received by the holders of DFC Common Stock hereunder by increasing the
Exchange Ratio to equal a number (rounded to four decimals) equal to a
quotient, the numerator of which is $33.00 and the denominator of which
is the Median Pre-Closing Price of HUBCO Common Stock. If HUBCO makes an
election contemplated by the preceding sentence, within such three (3)
business day period, it shall give prompt written notice to DFC of such
election and the revised Exchange Ratio, whereupon no termination shall
have occurred pursuant to this subsection (i) and this Agreement shall
remain in effect in accordance with its terms (except as the Exchange
Ratio shall have been so modified), and any references in this Agreement
to "EXCHANGE RATIO" shall thereafter be deemed to refer to the Exchange
Ratio as adjusted pursuant to this subsection.
7.2. EFFECT OF TERMINATION. In the event of the termination
and abandonment of this Agreement by either HUBCO or DFC 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 shareholders. 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 shareholders of DFC 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 DFC without the
approval of such shareholders. 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, DFC
may bear the expenses of the Dime.
(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), 5.8(a) and
5.14.
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 Xxxxxxxxx
Xxxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxxxx, Chairman, President and Chief
Executive Officer
Copy to:
HUBCO, Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attn.: X. Xxxx Van Borkulo-Xxxxx, Esq.
And copy to:
Pitney, Xxxxxx, Xxxx & Xxxxx
(mail to) X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
(deliver to) 000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attn.: Xxxxxx X. Xxxxx, Esq.
(b) If to DFC, to:
Dime Financial Corp.
00 Xxxxxx Xxxx
Xxxxxxxxxxx, XX 0000
Attention: Xxxxxxx X. Xxxxxx, President and Chief
Executive Officer
Copy to:
Day. Xxxxx & Xxxxxx
CityPlace I
Xxxxxxxx, XX 00000
Attention Xxxx X. XxXxxxxxx, 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.
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, the Bank, DFC and the Dime have caused this
Agreement to be executed by their duly authorized officers as of the day
and year first above written.
ATTEST: HUBCO, INC.
By: /s/ X. Xxxx Van Borkulo-Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
X. Xxxx Van Borkulo-Xxxxx, Xxxxxxx X. Xxxxxxx, Chairman,
Secretary President and Chief Executive Officer
ATTEST: DIME FINANCIAL CORPORATION
By: ________________________ By: /s/ Xxxxxxx X. Xxxxxx
By: Xxxxxxx X. Xxxxxx, President and Chief
Executive Officer
Title:
ATTEST: LAFAYETTE AMERICAN BANK
By: /s/ X. Xxxx Van Borkulo-Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
X. Xxxx Van Borkulo-Xxxxx, Xxxxxxx X. Xxxxxxx
Secretary
ATTEST: THE DIME SAVINGS BANK
OF WALLINGFORD
By: ________________________ By: /s/ Xxxxxxx X. Xxxxxx
By: Xxxxxxx X. Xxxxxx, President and Chief
Executive Officer
Title:
AGREEMENT OF DFC AND DIME DIRECTORS
Reference is made to the Agreement and Plan of Merger, dated
March __, 1998 (the "MERGER AGREEMENT"), among HUBCO, Inc. ("HUBCO"), a
New Jersey corporation and registered bank holding company, Lafayette
American Bank (the "BANK"), a New Jersey state-chartered commercial
banking corporation and wholly-owned subsidiary of HUBCO, Dime Financial
Corporation, a Connecticut corporation and registered bank holding
company ("DFC"), and The Dime Savings Bank of Wallingford, a Connecticut
state-chartered savings bank and wholly-owned subsidiary of DFC (the
"DIME"). 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
DFC and the Dime, solely in such person's capacity as a holder of DFC
Common Stock, agrees to vote or cause to be voted all shares of DFC
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 agreed that this Agreement of DFC and Dime
Directors (this "AGREEMENT") relates solely to the capacity of the
undersigned as shareholders or other beneficial owners of shares of DFC
Common Stock and is not in any way intended to affect the exercise by the
undersigned of the undersigned's responsibilities as directors of DFC or
the Dime. 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 DFC Common Stock held by the undersigned as of the date hereof.
Dated: As of March __, 1998
EXHIBIT 5.19-1
FORM OF AFFILIATE LETTER FOR DFC AFFILIATES
March __, 1998
HUBCO, Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Gentlemen:
I am delivering this letter to you in connection with the
proposed acquisition (the "MERGER") of Dime Financial Corp. (the "DFC"),
by HUBCO, Inc., a New Jersey corporation and registered bank holding
company ("HUBCO"), pursuant to the Agreement and Plan of Merger dated
March __, 1998 (the "AGREEMENT") between DFC, its bank subsidiary, HUBCO
and its bank subsidiary. Capitalized terms used herein and not otherwise
defined have the meanings assigned to them in the Agreement. I currently
own shares of DFC Common Stock. As a result of the Merger, I will
receive shares of HUBCO Common Stock in exchange for my DFC Common Stock.
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of DFC, 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 DFC 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 DFC 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 in writing a copy of which is provided to me, 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 DFC 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 DFC 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 paragraph only, "DFC
Common Stock" includes HUBCO Common Stock as 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 DFC at the time the Merger is submitted for a vote
of DFC's shareholders, 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 any 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 MARCH __, 1998 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 DFC.
Execution of this letter is not an admission on my part that I
am an "affiliate" of DFC 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 _______, 199__ by
HUBCO, INC.
By: ______________________________
Name:
Title:
EXHIBIT 5.19-2
FORM OF AFFILIATE LETTER FOR HUBCO AFFILIATES
March __, 1998
HUBCO, Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Gentlemen:
I am delivering this letter to you in connection with the
proposed merger (the "Merger") of Dime Financial Corp. ("DFC") with and
into HUBCO, Inc., a New Jersey corporation and registered bank holding
company ("HUBCO"), pursuant to the Agreement and Plan of Merger dated
March __, 1998 (the "AGREEMENT") between DFC, its bank subsidiary, HUBCO
and its bank subsidiary. 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 "SEC") 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 and covenant with HUBCO and DFC 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 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
________________, 199_ by
HUBCO, INC.
By: ________________________________
Name:
Title:
EXHIBIT 6.2(b)
FORM OF OPINION OF COUNSEL TO DFC
TO BE DELIVERED TO HUBCO ON THE EFFECTIVE TIME
(a) DFC and Dime 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 DFC and Dime, and the Agreement
constitutes the valid and legally binding obligations of DFC and Dime
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 Connecticut state-chartered capital stock savings banks 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 DFC and Dime with any of the provisions
thereof, will (i) conflict with or result in a breach or default under
the certificate of incorporation or bylaws of DFC or the charter or
bylaws of Dime, or (ii) based exclusively on certificates of officers and
without independent verification, to the knowledge of such counsel, (A)
conflict with or result in a breach or default under any note, bond,
mortgage, indenture, license, agreement or other instrument or obligation
to which DFC or Dime is a party; or (B) result in the creation or
imposition of any material lien, instrument or encumbrance upon the
property of DFC or Dime, 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 DFC or Dime.
(b) DFC is a corporation validly existing and in good standing
under the laws of the State of Connecticut, Dime is a validly existing
capital stock savings bank under the laws of the State of Connecticut and
each of DFC and Dime 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 on pages __ and __ under the
caption "_____________________" in the Proxy Statement-Prospectus.
(c) There is, to the knowledge of such counsel, no legal,
administrative, arbitration or governmental proceeding or investigation
pending or threatened to which DFC or Dime is a party which would, if
determined adversely to DFC or Dime, have a material adverse effect on
the business, properties, results of operations, or condition, financial
or otherwise, of DFC or Dime taken as a whole or which presents a claim
to restrain or prohibit the transactions contemplated by the Agreement.
(d) No consent, approval, authorization, or order of any
federal or state court or federal or state governmental agency or body,
or to such counsel's knowledge of any third party, is required for the
consummation by DFC or Dime 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 DFC 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 DFC
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 DFC or Dime or to their participation in
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 DFC and Dime.
Such counsel's opinion shall be limited to matters governed by
the laws of the State of Connecticut and federal laws and regulations of
the United States of America.
EXHIBIT 6.3(b)
FORM OF OPINION OF COUNSEL TO HUBCO
TO BE DELIVERED TO DFC ON THE EFFECTIVE TIME
(a) HUBCO is a corporation validly existing and in good
standing under the laws of the State of New Jersey, the Lafayette is a
validly existing Connecticut state-chartered commercial banking
corporation under the laws of the State of Connecticut and each of HUBCO
and Lafayette 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 HUBCO Subsidiary listed as such in the HUBCO
Disclosure Schedule is validly existing and in good standing 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, or pursuant to the
Continuing Stock Options, 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 Lafayette and constitutes the valid and binding obligations
of HUBCO and Lafayette enforceable in accordance with its terms, except
that the enforceability of the obligations of HUBCO and Lafayette 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 or the
Charter and By-Laws of Lafayette; (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 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 and Lafayette in connection therewith or in the
course of our representation of HUBCO and Lafayette in connection with
the Agreement) and to which HUBCO or Lafayette is a party or by which
HUBCO or Lafayette is bound; or (iii) cause HUBCO or Lafayette to violate
any corporation or banking law applicable to HUBCO.
(f) All actions of the directors and shareholders of HUBCO and
Lafayette required by federal banking laws and regulations, New Jersey
law and Connecticut banking law or by the Certificate of Incorporation or
By-Laws of HUBCO and Lafayette, to be taken by HUBCO and Lafayette 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 DFC and Dime and that DFC and Dime have 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
New Jersey Secretary of State and the Connecticut 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 DFC 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 laws, New Jersey law or Connecticut banking
law ("Approvals") are required to be obtained by HUBCO or Lafayette in
order to permit the execution and delivery of the Agreement by HUBCO or
Lafayette and the performance by HUBCO or Lafayette of the transactions
contemplated thereby other than those Approvals which have been obtained
or those Approvals or consents required to be obtained by DFC or Dime.
(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 DFC 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, Connecticut banking law and federal
laws and regulations of the United States of America.
Index of Schedules
2.4 Stock Option Plans
3.1(b) Subsidiaries
3.1(c) Certificates of Incorporation and Bylaws
3.2 Stock Options
3.3(b) Violations of Certain Obligations
3.4(a) Financial Statements
3.4(c) Liabilities Incurred Since 12/31/97
3.5 Copies of Agreements
3.6(a) Material Adverse Changes
3.6(b) Section 5.2 Actions
3.7 Legal Proceedings
3.8 Taxes and Tax Returns
3.9(a) DFC Pension and Welfare Plans
3.9(b) DFC Pension and Welfare Plan Documents
3.9(f) DFC Pension and Welfare Plan Compliance
3.9(k) Post-Retirement or Termination Benefits
3.9(o) Deferred Compensation and Related Agreements
3.9(n) Severance and Related Compensation
3.9(p) Life Insurance Policies
3.9(q) Directors' Retirement Plans or Retirees' Medical Plans
3.10(a) SEC Filings and Shareholder Communications
3.10(b) Examination Dates
3.12 Compliance with Applicable Law
3.13(a) Certain Employment and Related Agreements
3.13(b) Material Non-Loan Agreements
3.13(c) Material Defaults
3.14(a) Encumbered Assets
3.14(b) Insurance
3.16(a) Environmental Violations
3.16(b) Hazardous Substances and Materials
3.16(c) Environmental Permits
3.16(d) Underground Storage Tanks
3.18 Excess Parachute Payments
4.1 Corporate Organization
4.2 Capitalization
4.3 Authority; No Violation
4.4 Financial Statements
4.7 Legal Proceedings
4.10 Compliance With Applicable Law
4.14 Taxes and Tax Returns
4.15 Employee Benefit Plans
4.16 Contracts
4.17 Properties and Insurance
4.18 Environmental Matters
5.2(d) Negative Covenants
5.2(j) Establishment of Trust
5.11(d) Comparable Employment
5.14(d) Indemnification
The registrant agrees to furnish supplementarily a copy of any omitted
schedule to the Securities and Exchange Commission upon request.
