EXECUTION COPY
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: X. XXXX VAN BORKULO-XXXXX XXXXXXX X. XXXXXXX
________________________ By: ___________________________
X. Xxxx Van Borkulo-Xxxxx, Xxxxxxx X. Xxxxxxx, Chairman,
Secretary President and Chief Executive Officer
DIME FINANCIAL CORPORATION
XXXXXXX X. XXXXXX
By: ____________________________
Xxxxxxx X. Xxxxxx, President and
Chief Executive Officer
ATTEST: LAFAYETTE AMERICAN BANK
X. XXXX VAN BORKULO-XXXXX XXXXXXX X. XXXXXXX
By: ______________________ By: _____________________________
X. Xxxx Van Borkulo-Xxxxx, Xxxxxxx X. Xxxxxxx
Secretary
THE DIME SAVINGS BANK
OF XXXXXXXXXXX
XXXXXXX X. XXXXXX
By: ______________________________
Xxxxxxx X. Xxxxxx, President and
Chief Executive Officer
AGREEMENT OF DFC AND DIME DIRECTORS
Reference is made to the Agreement and Plan of Merger, dated
March 31, 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 31, 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 31, 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
31, 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 30, 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.
