AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of January 26,
1999 ("Agreement"), is among HUBCO, Inc. ("HUBCO"), a New Jersey corporation and
registered bank holding company, Xxxxxx United Bank (the "Bank"), a New Jersey
state-chartered commercial banking corporation and wholly-owned subsidiary of
HUBCO, Little Falls Bancorp, Inc., a New Jersey corporation and registered
savings and loan holding company ("LFB"), and Little Falls Bank, a
federally-chartered savings bank and wholly-owned subsidiary of LFB (the
"Association").
RECITALS
The respective Boards of Directors of HUBCO and LFB have each
determined that it is in the best interests of HUBCO and LFB and their
respective shareholders for HUBCO to acquire LFB by merging LFB with and into
HUBCO with HUBCO surviving and LFB shareholders receiving the consideration
hereinafter set forth. Immediately after the merger of LFB into HUBCO, the
Association shall be merged with and into the Bank with the Bank surviving.
The respective Boards of Directors of LFB, HUBCO, the Bank and
the Association have each duly adopted and approved this Agreement and the Board
of Directors of LFB has directed that it be submitted to LFB'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 LFB Common Stock (as hereinafter defined) and, simultaneously with the
execution of this Agreement, LFB is issuing an option to HUBCO (the "HUBCO Stock
Option") to purchase certain shares of the authorized and unissued LFB 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), LFB shall be merged
with and into HUBCO (the "Merger") in accordance with the New Jersey Business
Corporation Act (the "NJBCA") and HUBCO shall be the surviving corporation (the
"Surviving Corporation").
1.2. Effect of the Merger. At the Effective Time, the
Surviving Corporation shall be considered the same business and corporate entity
as each of HUBCO and LFB and thereupon and thereafter, all the property, rights,
privileges, powers and franchises of each of HUBCO and LFB 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 LFB 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 LFB 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 LFB 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 LFB 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. Bylaws. As of the Effective Time, the Bylaws of HUBCO
shall be the Bylaws 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 LFB, which date (the "Closing Date")
shall be not more than twenty (20) business days following the receipt of all
necessary regulatory, governmental and shareholder 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 bank regulatory approvals (and waivers, if
applicable) necessary for consummation of the Merger have been received
(disregarding any waiting period) and either party has notified the other in
writing that all such approvals (and waivers, if applicable) have been received.
Simultaneous with or immediately following the Closing, HUBCO and LFB shall
cause to be filed a certificate of merger, in form and substance satisfactory to
HUBCO and LFB, with the Secretary of State of the State of New Jersey (the
"Certificate of Merger"). The Certificate of Merger shall specify the "Effective
Time" of the Merger, which Effective Time shall be a date and time following the
Closing agreed to by HUBCO and LFB (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 Certificate of Merger, the
Merger shall become effective upon (and the "Effective Time" shall be) the time
of the filing of the Certificate of Merger.
1.7 The Bank Merger. Immediately following the Effective Time,
the Association shall be then merged with and into the Bank (the "Bank Merger")
in accordance with the provisions of the New Jersey Banking Act of 1948, as
amended (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 Association shall cease and the Surviving Bank shall
be considered the same business and corporate entity as each of the Association
and the Bank and all of the property, rights, privileges, powers and franchises
of each of the Association 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 Association 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 Bylaws of the Bank
shall be the certificate of incorporation and Bylaws of the Surviving Bank and
the officers and directors of the Bank shall be the officers and directors of
the Surviving Bank. Following the execution of this Agreement, the Association
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 New Jersey Department of Banking and Insurance (the
"Department"), the Federal Deposit Insurance Corporation (the "FDIC"), and the
Office of Thrift Supervision (the "OTS") for approval of the Bank Merger.
1.8 Liquidation Account. The liquidation account established
by the Association pursuant to the plan of conversion adopted in connection with
its conversion from mutual to stock form shall, to the extent required by
applicable law, continue to be maintained by HUBCO after the Bank Merger for the
benefit of those persons and entities who were savings account holders of the
Association on the eligibility and supplemental eligibility record dates for
such conversion and who continue from time to time to have rights therein. If
acquired by the rules and regulations of the OTS, the Surviving Bank will amend
its certificate of incorporation to provide specifically for the continuation of
the liquidation account previously established by the Association.
ARTICLE II - CONVERSION OF LFB SHARES
2.1. Conversion of LFB Common Stock. Each share of common
stock, par value $0.10 per share, of LFB ("LFB 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 Ratio and Cash Election. Subject to the other
provisions of this Section 2.1, each share of LFB Common Stock issued and
outstanding immediately prior to the Effective Time (other than Excluded Shares,
as hereinafter defined) shall be converted at the Effective Time into (i) the
right to receive 0.65 shares (the "Exchange Ratio") of common stock, no par
value ("HUBCO Common Stock") of HUBCO, or (ii) the right to receive $20.64 in
cash, without interest (the "Per Share Cash Amount"), or (iii) the right to
receive a combination of shares of HUBCO Common Stock and cash determined in
accordance with subparagraph (d) of this Section 2.1; provided, however, that,
(i) in any event, if between the date of this Agreement 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, combination or
exchange of shares, the Exchange Ratio, the Median Pre-Closing Price and related
items shall be correspondingly adjusted to reflect such stock dividend, stock
split, reclassification; and
(ii) If the Median Pre-Closing Price of HUBCO Common Stock is
$29.00 or less, the Exchange Ratio shall be increased, but not beyond 0.7000, to
a number (rounded to four decimals) equal to the quotient, the numerator of
which is $19.00 and the denominator of which is the Median Pre-Closing Price of
HUBCO Common Stock. If the Median Pre-Closing Price of HUBCO Common Stock is
$34.50 or more, the Exchange Ratio shall be decreased, but not beyond 0.6000, to
a number (rounded to four decimals) equal to the quotient, the numerator of
which is $22.3795 and the denominator of which is the Median Pre-Closing Price
of HUBCO Common Stock; and
(iii) 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").
After the Effective Time, all such shares of LFB Common Stock
shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist, and each certificate previously evidencing any such
shares 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 LFB Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares of LFB
Common Stock except as otherwise provided herein or by law. Such certificates
previously evidencing such shares of LFB Common Stock shall be exchanged for (i)
certificates evidencing shares of HUBCO Common Stock issued in accordance with
the allocation procedures of this Section 2.1 and/or (ii) cash payable in
accordance with the allocation procedures of this Section 2.1, in each case upon
the surrender of such certificates in accordance with the provisions of Section
2.2, without interest. No fractional shares of HUBCO Common Stock may be issued,
and, in lieu thereof, a cash payment shall be made pursuant to Section 2.2(e).
(b) Ratio of HUBCO Common Stock to Cash. Subject to Section
2.1(k), the number of shares of LFB Common Stock to be converted into the right
to receive cash in the Merger (the "Cash Election Number") shall be equal to 49%
(the "Cash Percentage") of the number of shares of LFB Common Stock outstanding
immediately prior to the Effective Time. Subject to Section 2.1(k), the number
of shares of LFB Common Stock to be converted into the right to receive HUBCO
Common Stock in the Merger (the "Stock Election Number") shall be equal to 51%
(the "Stock Percentage") of the number of shares of LFB Common Stock outstanding
immediately prior to the Effective Time.
(c) Elections by Holders of Stock or Cash. Subject to the
allocation and election procedures set forth in this Section 2.1, each record
holder immediately prior to the Effective Time of shares of LFB Common Stock
will be entitled (i) to elect to receive cash for all of such shares (a "Cash
Election"), (ii) to elect to receive HUBCO Common Stock for all of such shares
(a "Stock Election"), or (iii) to indicate that such record holder has no
preference as to the receipt of cash or HUBCO Common Stock for such shares (a
"Non-Election"). All such elections shall be made on a form designed for that
purpose (a "Form of Election") and in form and substance satisfactory to HUBCO
and LFB. Holders of record of shares of LFB Common Stock who hold such shares as
nominees, trustees or in other representative capacities (a "Representative")
may submit multiple Forms of Election, provided that each such Form of Election
covers all the shares of LFB Common Stock held by each Representative for a
particular beneficial owner.
(d) Oversubscription for Cash Election. If the aggregate
number of shares of LFB Common Stock covered by Cash Elections (the "Cash
Election Shares") exceeds the Cash Election Number, all shares of LFB Common
Stock covered by Stock Elections (the "Stock Election Shares") and all shares of
LFB Common Stock covered by Non-Elections (the "Non-Election Shares") shall be
converted into the right to receive HUBCO Common Stock, and the Cash Election
Shares shall be converted into the right to receive HUBCO Common Stock and cash
in the following manner:
(i) the Exchange Agent (as hereinafter defined) will select
from among the holders of Cash Election Shares, by random selection, a
sufficient number of such holders ("Stock Designees") such that the
number of shares of LFB Common Stock held by the Stock Designees will,
when added to the number of Stock Election Shares and Non-Election
Shares, be equal as closely as practicable to the Stock Election
Number, and all such Shares of LFB Common Stock held by the Stock
Designees shall be converted into the right to receive HUBCO Common
Stock; and
(ii) the Cash Election Shares not held by Stock Designees
shall be converted into the right to receive cash.
(e) Oversubscription for Stock Election. If the aggregate
number of Stock Election Shares exceeds the Stock Election Number, all Cash
Election Shares and all Non-Election Shares shall be converted into the right to
receive cash, and all Stock Election Shares shall be converted into the right to
receive HUBCO Common Stock or the right to receive cash in the following manner:
(i) the Exchange Agent (as hereinafter defined) will select
from among the holders of Stock Election Shares, by random selection, a
sufficient number of such holders ("Cash Designees") such that the
number of shares of LFB Common Stock held by the Cash Designees will,
when added to the number of Cash Election Shares and Non-Election
Shares, be equal as closely as practicable to the Cash Election Number,
and all such Shares of LFB Common Stock held by the Cash Designees
shall be converted into the right to receive cash; and
(ii) the Stock Election Shares not held by Cash Designees
shall be converted into the right to receive HUBCO Common Stock.
(f) Selection of Non-Election Shares If No Oversubscription.
In the event that neither paragraph (d) nor subparagraph (e) above is
applicable, all Cash Election Shares shall be converted into the right to
receive cash, all Stock Election Shares shall be converted into the right to
receive HUBCO Common Stock, and the Non-Election Shares shall be converted into
either the right to receive HUBCO Common Stock or the right to receive cash by
random selection by the Exchange Agent so that the Stock Election Number and the
Cash Election Number equal their respective percentages of the number of shares
of LFB Common Stock outstanding as closely as possible.
The random selection process to be used by the Exchange Agent
pursuant to paragraphs (e) and (f) of this Section 2.1 will consist of drawing
by lot or such other process (other than pro rata selection) as the Exchange
Agent deems equitable and necessary to effect the allocations described in such
paragraphs. A selection will be disregarded if, as a consequence, the Stock
Election Number or the Cash Election Number would be exceeded by more than 1,000
shares.
(g) Procedures for Holders' Elections. Elections shall be made
by holders of LFB Common Stock by mailing to the Exchange Agent a Form of
Election. To be effective, a Form of Election must be properly completed, signed
and submitted to the Exchange Agent by the holder and accompanied by the
certificates representing the shares of LFB Common Stock as to which the
election is being made (or properly completed, signed and submitted to the
Exchange Agent by an appropriate bank or trust company in the United States or a
member of a registered national securities exchange or the National Association
of Securities Dealers, Inc. (the "NASD")). HUBCO will have the discretion, which
it may delegate in whole or in part to the Exchange Agent, to determine whether
Forms of Election have been properly completed, signed and submitted and to
disregard immaterial defects in Forms of Election. The good faith decision of
HUBCO (or the Exchange Agent) in such matters shall be conclusive and binding,
provided that HUBCO (and the Exchange Agent) does not act unreasonably and shall
promptly notify LFB of its decision in writing. Neither HUBCO nor the Exchange
Agent will be under any obligation to, but HUBCO and the Exchange Agent may (if
they choose to do so), notify any person of any defect in a Form of Election
submitted to the Exchange Agent. The Exchange Agent shall also make all
computations contemplated by this Section 2.1 and all such computations shall be
conclusive and binding on the holders of LFB Common Stock, provided that the
Exchange Agent does not act unreasonably.
(h) Failure of Holder to Elect. For the purposes hereof, a
holder of LFB Common Stock who does not submit a Form of Election which is
received by the Exchange Agent prior to the Election Deadline (as hereinafter
defined) shall be deemed to have made a Non-Election. If HUBCO or the Exchange
Agent shall determine that any purported Cash Election or Stock Election was not
properly made, such purported Cash Election or Stock Election shall, unless
cured by the Election Deadline (as hereafter defined), be deemed to be of no
force and effect and the shareholder or Representative making such purported
Cash Election or Stock Election shall, for purposes hereof, be deemed to have
made a Non-Election.
(i) Mailing of Election Forms to Holders and Deadline. HUBCO
and LFB shall each use its best efforts to mail the Form of Election to all
persons who are holders of record of LFB Common Stock on the record date for the
Stockholders Meeting (as defined in Section 5.7) and who become holders of LFB
Common Stock during the period between the record date for the Stockholders
Meeting and 10:00 a.m. New York time, on at least the date fifteen calendar days
prior to the anticipated Effective Time and to make the Form of Election
available to all persons who become holders of LFB Common Stock subsequent to
such day and no later than the close of business on the Election Deadline. A
Form of Election must be received by the Exchange Agent by the close of business
on the third business day prior to the Closing (the "Election Deadline") in
order to be effective. All elections will be irrevocable.
(j) Excluded Shares. Each share of LFB Common Stock held in
the treasury of LFB or any of LFB's wholly-owned subsidiaries and each share of
LFB Common Stock owned by HUBCO or 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 cancelled; provided, however,
that the LFB Common Stock held by the LFB Employee Stock Ownership Plan and
Trust (the "LFB ESOP") and the Little Falls Bank Management Stock Bonus Plan
(the "LFB MSBP") and the 1998 Directors Stock Compensation Plan and the 1997
Directors Stock Compensation Plan shall not be covered by this paragraph.
(k) Increase in Stock Election Number Due to Tax Opinion. If
the tax opinion referred to in Section 6.1(d) and to be delivered at the Closing
(The "Tax Opinion") cannot be rendered (as reasonably determined by Pitney,
Xxxxxx, Xxxx & Xxxxx and concurred in by Xxxxxxx, Spidi, Sloane & Xxxxx, P.C.)
as a result of the Merger potentially failing to satisfy continuity of interest
requirements under applicable federal income tax principles relating to
reorganizations under Section 368(a) of the Code (as hereafter defined in
Section 3.8), then the Stock Percentage shall be automatically increased and the
Cash Percentage shall be automatically decreased to the minimum extent necessary
to enable the Tax Opinion to be rendered.
2.2. Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, HUBCO shall
deposit, or shall cause to be deposited, with a bank or trust company designated
by HUBCO, which may be Xxxxxx United Bank, Trust Department (the "Exchange
Agent"), for the benefit of the holders of shares of LFB 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
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, 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 LFB
Common Stock (the "Certificates"), (i) a letter of transmittal (which is
reasonably agreed to by HUBCO and LFB and 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 shall be in such
form and have such other provisions as HUBCO may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for certificates evidencing shares of HUBCO Common Stock or cash. 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 (A) 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 LFB Common Stock formerly evidenced by such
Certificate in accordance with Section 2.1, (B) cash to which such holder is
entitled to receive in respect of the shares of LFB Common Stock formerly
evidenced by such Certificate in accordance with Section 2.1, (C) cash in lieu
of fractional shares of HUBCO Common Stock to which such holder may be entitled
pursuant to Section 2.2(e) and (D) any dividends or other distributions to which
such holder is entitled pursuant to Section 2.2(c), (the shares of HUBCO Common
Stock, dividends, distributions and cash described in clauses (A), (B), (C) and
(D) being collectively, the "Merger Consideration") and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of shares of LFB Common Stock which is not registered in the transfer
records of LFB, 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 LFB
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 applicable type and amount of 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. 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 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 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. No interest shall be paid on the Merger Consideration.
(d) No Further Rights in LFB Common Stock. All shares of HUBCO
Common Stock issued and cash paid upon conversion of the shares of LFB 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 LFB Common
Stock.
(e) No Fractional Shares. No certificates or scrip evidencing
fractional shares of HUBCO Common Stock shall be issued upon the surrender for
exchange of Certificates and such fractional share interests will not entitle
the owner thereof to vote or to any rights of a stockholder of HUBCO. Cash shall
be paid in lieu of fractional shares of HUBCO Common Stock, based upon the
Median Pre-Closing Price of HUBCO Common Stock.
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of LFB Common Stock for two
years after the Effective Time shall be delivered to HUBCO, upon demand, and any
holders of LFB Common Stock who have not theretofore complied with this Article
II shall thereafter look only to HUBCO for the Merger Consideration to which
they are entitled.
(g) No Liability. Neither HUBCO nor the Bank shall be liable
to any holder of shares of LFB 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 LFB 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 LFB 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 LFB shall be closed and there shall be no further registration
of transfers of shares of LFB Common Stock thereafter on the records of LFB. 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. LFB Stock Options. Other than the HUBCO Stock Option, all
options which may be exercised for issuance of LFB Common Stock (each, a "Stock
Option" and collectively the "Stock Options") are described in the LFB
Disclosure Schedule and are issued and outstanding pursuant to the LFB 1996
Stock Option Plan (the "LFB Stock Option Plan") 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 LFB Stock Option Plan and
the Option Grant Agreements, including those relating to vesting and conversion
in connection with a change in control of LFB. 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 LFB 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 LFB 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 3.8 hereof). 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.
2.5. HUBCO Common Stock. The shares of HUBCO Common Stock
outstanding or held in treasury immediately prior to the Effective Time shall
not be effected by the Merger but shall be the same number of shares of the
Surviving Corporation.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF LFB
References herein to "LFB 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 LFB to HUBCO.
LFB hereby represents and warrants to HUBCO as follows:
3.1. Corporate Organization.
(a) LFB is a corporation duly organized and validly
existing under the laws of the State of New Jersey. LFB 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 LFB and the LFB
Subsidiaries (as defined below), taken as a whole. LFB is registered as a
savings and loan holding company under the Home Owners' Loan Act, as amended
(the "HOLA").
(b) Each LFB Subsidiary and its jurisdiction of
incorporation is listed in the LFB Disclosure Schedule. For purposes of this
Agreement, the term "LFB Subsidiary" means any corporation, partnership, joint
venture or other legal entity in which LFB, directly or indirectly, owns at
least a 50% stock or other equity interest or for which LFB, 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 "LFB Subsidiary" shall include any entity which
was a LFB Subsidiary at any time during such period. The Association is a
federally chartered bank duly organized and validly existing in stock form under
the laws of the United States. All eligible accounts of depositors issued by the
Association are insured by the Savings Association Insurance Fund of the FDIC
(the "SAIF") or the Bank Insurance Fund of the FDIC ("BIF") to the fullest
extent permitted by law. Each LFB 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 LFB and the LFB
Subsidiaries, taken as a whole.
(c) The LFB Disclosure Schedule sets forth true and
complete copies of the Certificate of Incorporation or Charter and Bylaws, as in
effect on the date hereof, of LFB and each LFB Subsidiary. Except as set forth
in Disclosure Schedule 3.1(b), the Association and LFB do not own or control,
directly or indirectly, any equity interest in any corporation, company,
association, partnership, joint venture or other entity.
3.2. Capitalization. The authorized capital stock of LFB
consists of 10,000,000 shares of LFB Common Stock and 5,000,000 shares of
preferred stock, $0.10 par value per share ("LFB Preferred Stock"). As of the
date hereof, there were 2,477,525 shares of LFB Common Stock issued and
outstanding and 564,225 treasury shares and no shares of LFB Preferred Stock
issued or outstanding. As of January 1, 1999, there were 247,161 shares of LFB
Common Stock issuable upon exercise of outstanding stock options. The LFB
Disclosure Schedule contains (i) a list of all Stock Options, their exercise
prices and expiration dates, and (ii) true and complete copies of the LFB Stock
Option Plan and a specimen of each form of Option Grant Agreement pursuant to
which any outstanding Stock Option was granted, including a list of each
outstanding Stock Option issued pursuant thereto. All Stock Options will be
fully vested on the Closing Date, in each case in accordance with the terms of
the LFB Stock Option Plan and Option Grant Agreements pursuant to which such
Stock Options were granted. No Stock Option is exercisable more than 90 days
after the termination of employment except in the case of death or disability
when the Stock Option may be exercised for up to one year after the termination
of employment. All issued and outstanding shares of LFB Common Stock, and all
issued and outstanding shares of capital stock of each LFB 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 LFB or any LFB Subsidiary.
Except for the Stock Options listed on the LFB Disclosure Schedule and the award
of 8,845 Plan Share Awards under the 1998 Directors Stock Compensation Plan, and
the 84,148 unvested shares under the 1998 Directors Stock Compensation Plan,
1997 Directors Stock Compensation Plan and the 1996 Management Stock Bonus Plan
for which shares are held in trust and the HUBCO Stock Option, neither LFB nor
the Association 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 LFB or the Association 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 LFB, and except as set forth in the LFB Disclosure Schedule,
LFB and the Association 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 LFB and the Association in
accordance with their respective Certificate of Incorporation and Bylaws and
applicable laws and regulations. Except for such approvals, no other corporate
proceedings not otherwise contemplated hereby on the part of LFB or the
Association are necessary to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by LFB and the
Association, and constitutes a valid and binding obligation of each of LFB and
the Association, enforceable against LFB and the Association 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 federally 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 LFB or the Association, nor the consummation by LFB or the
Association of the transactions contemplated hereby in accordance with the terms
hereof, or compliance by LFB or the Association with any of the terms or
provisions hereof, will (i) violate any provision of LFB's or the Association's
Certificate of Incorporation or Charter or Bylaws, (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 LFB, the Association or any of their respective properties or
assets, or (iii) except as set forth in the LFB 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 LFB or the
Association 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 LFB or the Association 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 LFB and the LFB 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 OTS, the Department, the New
Jersey Department of Environmental Protection (the "DEP") (if required), the New
Jersey Secretary of State, the Securities and Exchange Commission (the "SEC"),
and the shareholders of LFB, 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 LFB or the Association in connection with (x) the
execution and delivery by LFB of this Agreement and (y) the consummation by LFB
of the Merger, and the consummation by LFB and the Association of the other
transactions contemplated hereby, except (i) such as are listed in the LFB
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 LFB and the LFB Subsidiaries taken as a whole
or prevent or materially delay the consummation of the transactions contemplated
hereby. To the best of LFB's knowledge, no fact or condition exists which LFB
has reason to believe will prevent it and the Association from obtaining the
aforementioned consents and approvals.
3.4. Financial Statements.
(a) The LFB Disclosure Schedule sets forth copies of
the consolidated statements of financial condition of LFB 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 Radics & Co., LLC, independent public accountants with
respect to LFB ("R&C"), and the unaudited consolidated statement of condition of
LFB as of September 30, 1998 and the related unaudited consolidated statements
of income and cash flows for the nine months ended September 30, 1998 and 1997,
as reported in LFB's Quarterly Report on Form 10-Q, filed with the SEC under the
Securities Exchange Act of 1934, as amended ("1934 Act") (collectively, the "LFB
Financial Statements"). The LFB 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 LFB 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 LFB
for the respective periods set forth therein.
(b) The books and records of LFB 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 LFB Financial Statements (including the notes
thereto), as of September 30, 1998, neither LFB nor any LFB Subsidiary had any
liabilities, whether absolute, accrued, contingent or otherwise, material to the
business, operations, assets or financial condition of LFB and the LFB
Subsidiaries, taken as a whole which were required by GAAP (consistently
applied) to be disclosed in LFB's consolidated statement of condition as of
September 30, 1998 or the notes thereto, except to the extent of the 1998
Directors Stock Compensation Plan and any payments to be made upon benefits
acceleration upon a change in control under various benefit plans. Since
September 30, 1998, neither LFB nor any LFB 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 LFB Disclosure Schedule.
3.5. Broker's and Other Fees. Except for FinPro, Inc.
("FinPro"), neither LFB 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
FinPro is set forth in the LFB Disclosure Schedule. Other than pursuant to the
agreement with FinPro, 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 LFB or any its Subsidiaries.
3.6. Absence of Certain Changes or Events.
(a) Except as disclosed in the LFB Disclosure
Schedule, there has not been any LFB Material Adverse Change (as hereinafter
defined) since September 30, 1998 and to the best of LFB's knowledge, no fact or
condition exists which LFB believes will cause such an LFB Material Adverse
Change in the future. "LFB Material Adverse Change" means any change which is
material and adverse to the consolidated financial condition, results of
operations, business or assets of LFB and the LFB Subsidiaries taken as a whole,
other than (i) a change in the value of the respective investment and loan
portfolios of LFB and the LFB 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 savings
institutions generally, (iii) reasonable expenses incurred in connection with
this Agreement and the transactions contemplated hereby, (iv) payments to
executive officers or other employees of LFB or the Association pursuant to
agreements or arrangements with such persons, which agreements or arrangements
are included in the LFB Disclosure Schedule, or (v) actions or omissions of LFB
or any LFB Subsidiary either specifically permitted by this Agreement or taken
with the prior written consent of HUBCO in contemplation of the transactions
contemplated hereby (including without limitation any actions taken by LFB or
the Association pursuant to Section 5.15 of this Agreement).
(b) Neither LFB nor any LFB Subsidiary has taken or
permitted any of the actions set forth in Section 5.2 hereof between September
30, 1998 and the date hereof and, except for execution of this Agreement, and
the other documents contemplated hereby, LFB and each LFB Subsidiary has
conducted their respective businesses only in the ordinary course, consistent
with past practice.
3.7. Legal Proceedings. Except as disclosed in the LFB
Disclosure Schedule, and except for ordinary routine litigation incidental to
the business of LFB and the LFB Subsidiaries, neither LFB nor any LFB Subsidiary
is a party to any, and there are no pending or, to the best of LFB's knowledge,
threatened legal, administrative, arbitral or other proceedings, claims, actions
or governmental investigations of any nature against LFB or any LFB Subsidiary
which, if decided adversely to LFB or any LFB Subsidiary, are reasonably likely
to have a material adverse effect on the business, operations, assets or
financial condition of LFB and the LFB Subsidiaries taken as a whole. Except as
disclosed in the LFB Disclosure Schedule, neither LFB nor any LFB Subsidiary is
a party to any order, judgment or decree entered in any lawsuit or proceeding
which is material to LFB or such LFB Subsidiary.
3.8. Taxes and Tax Returns.
(a) LFB and each LFB 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.
LFB and each LFB 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 LFB or such LFB Subsidiary through such date. None of the federal
or state income tax returns of LFB or any LFB Subsidiary have been examined by
the Internal Revenue Service (the "IRS") or the New Jersey Division of Taxation
within the past six years. To the best knowledge of LFB, except as disclosed in
the LFB Disclosure Schedule, 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 LFB or any LFB Subsidiary,
nor has LFB or any LFB 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 disclosed in the LFB Disclosure
Schedule, neither LFB nor any LFB 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 LFB or such LFB Subsidiary
(nor does LFB 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)
Neither LFB nor any LFB Subsidiary has any tax loss carryforwards.
3.9. Employee Benefit Plans.
(a) Except as set forth on the LFB Disclosure
Schedule, neither LFB nor any LFB Subsidiary maintains or contributes to any
"employee pension benefit plan" (the "LFB 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 "LFB 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 LFB nor any LFB Subsidiary has, since September
2, 1974, contributed to any "Multiemployer Plan," within the meaning of Section
3(37) of ERISA.
(b) LFB has previously delivered to HUBCO, and
included in the LFB Disclosure Schedule, a complete and accurate copy of each of
the following including any amendments thereto with respect to each of the LFB
Pension Plans and LFB 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 and financial statement, if any; and (v) most recent annual
report on Form 5500. The Little Falls Bancorp, Inc. Employee Stock Ownership
Plan (the "LFB ESOP") owns approximately 9.8% of the outstanding LFB Common
Stock; the LFB ESOP owes approximately $2.2 million to LFB which is expected to
be fully discharged by payment to HUBCO from the cash merger consideration
payable to the LFB ESOP upon consummation of the Merger.
(c) Except as disclosed in the LFB Disclosure
Schedule, the present value of all accrued benefits, both vested and non-vested,
under each of the LFB 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 LFB 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 LFB'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
LFB or any LFB 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 LFB
Pension Plan have been paid. All contributions required to be made to each LFB
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 LFB
which have not been paid have been properly recorded on the books of LFB .
(f) Except as disclosed in the LFB Disclosure
Schedule, each of the LFB Pension Plans, LFB Welfare Plans and each other
employee benefit plan and arrangement identified on the LFB 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 LFB Disclosure Schedule, if LFB
maintains any LFB Pension Plan, LFB 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 LFB is not aware of any fact or circumstance which
would disqualify any plan.
(g) To the best knowledge of LFB, 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 LFB Welfare Plan or LFB
Pension Plan that would result in any material tax or penalty for LFB or any LFB
Subsidiary.
(h) No LFB 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
4043(b) of ERISA, with respect to any LFB Pension Plan.
(i) Except as disclosed in the LFB Disclosure
Schedule, no "accumulated funding deficiency," within the meaning of Section 412
of the Code, has been incurred with respect to any LFB Pension Plan.
(j) There are no material pending, or, to the best
knowledge of LFB, material threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of, or against any of the LFB Pension Plans
or the LFB Welfare Plans, any trusts created thereunder or any other plan or
arrangement other than as identified in the LFB Disclosure Schedule.
(k) Except as disclosed in the LFB Disclosure
Schedule, no LFB Pension Plan or LFB 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 LFB Pension
Plan.
(l) Except with respect to customary health, life and
disability benefits or as disclosed in the LFB Disclosure Schedule, there are no
unfunded benefit obligations which are not accounted for by reserves shown on
the LFB Financial Statements and established in accordance with GAAP.
(m) With respect to each LFB Pension Plan and LFB
Welfare Plan that is funded wholly or partially through an insurance policy,
there will be no liability of LFB or any LFB Subsidiary as of the Effective Time
under any such insurance policy or ancillary agreement with respect to such
insurance policy in the nature of a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or partially
out of events occurring prior to the Effective Time.
(n) Except (i) for payments and other benefits due
pursuant to the employment agreements included within the LFB Disclosure
Schedule, and (ii) as set forth in the LFB Disclosure Schedule, or as expressly
agreed to by HUBCO in writing either pursuant to this Agreement or otherwise, or
as required by law, the consummation of the transactions contemplated by this
Agreement will not (x) entitle any current or former employee of LFB or any LFB
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 LFB
Pension Plan or LFB Welfare Plan.
(o) Except for the LFB Pension Plans and the LFB
Welfare Plans, and except as set forth on the LFB Disclosure Schedule, LFB has
no deferred compensation agreements, understandings or obligations for payments
or benefits to any current or former director, officer or employee of LFB or any
LFB Subsidiary or any predecessor of any thereof. The LFB 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 LFB Disclosure
Schedule, LFB 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 LFB 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 LFB `s knowledge, neither LFB nor any LFB Pension Plan or LFB 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 LFB Disclosure
Schedule, LFB does not maintain any retirement plan or retiree medical plan or
arrangement for directors. The LFB Disclosure Schedule sets forth the complete
documentation and actuarial evaluation of any such plan.
(r) On or before the date hereof, LFB has caused the
Little Falls Savings Bank Directors Consultation and Retirement Plan (the
"Director Retirement Plan") to be terminated at the Effective Time and has
obtained in writing the consent of every participant to such termination and
such consents are part of the LFB Disclosure Schedule. LFB has also caused the
[Post-Retirement Health Plan] to be terminated at the Effective Time and each
participant therein has consented to such termination and the consent is
contained in the Disclosure Schedule.
3.10. Reports.
(a) The LFB Disclosure Schedule lists, and as to item
(i) below LFB 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 LFB 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, dividend checks, and
press releases) mailed by LFB 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) LFB has filed all
reports that it was required to file with the SEC under the 1934 Act, and (ii)
LFB and the Association 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,
LFB 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 LFB Disclosure Schedule lists the dates of all examinations of
LFB or the Association conducted by either the FDIC or the OTS since January 1,
1996 and the dates of any responses thereto submitted by LFB or the Association.
3.11. LFB and Association Information. The information
relating to LFB and the Association, 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 LFB in connection with the
solicitation of their approval of the Merger, as of the date the Proxy
Statement-Prospectus is mailed to shareholders of LFB, 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 LFB Disclosure Schedule, LFB and each LFB 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 LFB or such LFB
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 LFB and the LFB Subsidiaries taken as a whole) and LFB 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
disclosed in the LFB Disclosure Schedule, (i) neither LFB nor any LFB 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 LFB or any
LFB Subsidiary to any officer, employee, director or consultant thereof. The LFB
Disclosure Schedule sets forth true and correct copies of all severance or
employment agreements with officers, directors, employees, agents or consultants
to which LFB or any LFB Subsidiary is a party.
(b) Except as disclosed in the LFB Disclosure
Schedule and except for loan commitments, loan agreements and loan instruments
entered into or issued by the Association in the ordinary course of business,
(i) as of the date of this Agreement, neither LFB nor any LFB 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 LFB and
the LFB Subsidiaries taken as a whole, (ii) no commitment, agreement or other
instrument to which LFB or any LFB Subsidiary is a party or by which either of
them is bound limits the freedom of LFB or any LFB Subsidiary to compete in any
line of business or with any person, and (iii) neither LFB nor any LFB
Subsidiary is a party to any collective bargaining agreement.
(c) Except as disclosed in the LFB Disclosure
Schedule, neither LFB nor any LFB Subsidiary or, to the best knowledge of LFB,
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 Association 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 LFB and the LFB Subsidiaries, taken as a whole.
3.14. Properties and Insurance.
(a) Except as set forth in the LFB Disclosure
Schedule, LFB or a LFB 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 LFB's consolidated balance sheet
as of September 30, 1998, 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 September 30, 1998), 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 LFB and the LFB 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, LFB 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 LFB and
such Subsidiaries in all material respects as presently occupied, used,
possessed and controlled by LFB and its Subsidiaries.
(b) Except as set forth in the LFB Disclosure
Schedule, the business operations and all insurable properties and assets of LFB
and each LFB Subsidiary are insured for their benefit against all risks which,
in the reasonable judgment of the management of LFB, 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 LFB adequate for the business
engaged in by LFB and the LFB Subsidiaries. As of the date hereof, neither LFB
nor any LFB 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 LFB
Disclosure Schedule sets forth in summary form a list of all insurance policies
of LFB and the LFB Subsidiaries.
3.15. Minute Books. The minute books of LFB and the LFB
Subsidiaries contain 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) that are complete and accurate in all
material respects.
3.16. Environmental Matters. Except as set forth in the LFB
Disclosure Schedule:
(a) Neither LFB nor any LFB Subsidiary has received
any written notice, citation, claim, assessment, proposed assessment or demand
for abatement alleging that LFB or such LFB 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 LFB and the LFB Subsidiaries taken as a whole. LFB 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 LFB or
any LFB Subsidiary, as REO or otherwise, or owned or controlled by LFB or any
LFB 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 LFB and the LFB Subsidiaries, taken
as a whole. Except as described in the LFB Disclosure Schedule, none of the
Properties is located outside the State of New Jersey.
(b) LFB 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 LFB and the LFB Subsidiaries taken
as a whole.
(c) To the best of LFB's knowledge, LFB, each LFB
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 that require the permit or
registration.
(d) Except as disclosed in the LFB Disclosure
Schedule, to the knowledge of LFB, 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 LFB or any LFB Subsidiary.
3.17. Reserves. As of September 30, 1998, the allowance for
loan losses in the LFB Financial Statements was adequate pursuant to GAAP
(consistently applied), and the methodology used to compute the loan loss
reserve complies in all material respects with GAAP (consistently applied) and
all applicable policies of the OTS. As of September 30, 1998, the reserve for
REO properties (or if no reserve, the carrying value of REO properties) in the
LFB Financial Statements was adequate pursuant to GAAP (consistently applied),
and the methodology used to compute the reserve for REO properties (or if no
reserve, the carrying value of REO properties) complies in all material respects
with GAAP (consistently applied) and all applicable policies of the OTS.
3.18. No Parachute Payments. No officer, director, employee or
agent (or former officer, director, employee or agent) of LFB or any LFB
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 LFB, a LFB
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. Except as disclosed in
the LFB Disclosure Schedule, neither LFB nor any LFB 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 LFB prior to the date of this Agreement, nor has LFB 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 LFB prior to the date of this Agreement. Neither LFB nor
any LFB 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 LFB prior
to the date of this Agreement.
3.20. Year 2000 Compliance. LFB and the LFB Subsidiaries have
taken all reasonable steps necessary to address the software, accounting and
record keeping issues raised in order for the data processing systems used in
the business conducted by LFB and the LFB Subsidiaries to be substantially Year
2000 compliant on or before the end of 1999 and, except as set forth in the LFB
Disclosure Schedule, LFB does not expect the future cost of addressing such
issues to be material.
3.21. Reorganization. As of the date hereof, after reviewing
the terms of this Agreement with LFB's attorneys, LFB does not have any reason
to believe that the Merger will fail to qualify as a reorganization under
Section 368(a) of the Code.
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 LFB. HUBCO hereby represents and warrants to LFB 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 Bank Holding Company Act of 1956, as amended (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 New Jersey. Lafayette American Bank ("Lafayette") is duly
organized and validly existing under the laws of the State of Connecticut. All
eligible accounts of depositors issued by the Bank and Lafayette are insured by
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 Bylaws of HUBCO 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
December 31, 1998, there were 40,411,521 shares of HUBCO Common Stock issued and
outstanding, and 221,683 shares of treasury stock, and 500 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, HUBCO has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby in accordance with the terms hereof. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly approved by the Board of Directors of HUBCO in accordance with
its Certificate of Incorporation and applicable laws and regulations. Except for
such approvals, no other corporate proceedings on the part of HUBCO are
necessary to consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by HUBCO and constitutes a valid
and binding obligation of HUBCO, enforceable against HUBCO in accordance with
its terms, except to the extent that enforcement may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the rights of
creditors of bank holding companies, (ii) general equitable principles, and
(iii) laws relating to the safety and soundness of insured depository
institutions and except that no representation is made as to the effect or
availability of equitable remedies or injunctive relief.
(b) Neither the execution or delivery of this
Agreement by HUBCO, nor the consummation by HUBCO of the transactions
contemplated hereby in accordance with the terms hereof, or compliance by HUBCO
with any of the terms or provisions hereof will (i) violate any provision of the
Certificate of Incorporation or Bylaws of HUBCO, (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 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 OTS, the SEC,
the Department, or the Secretary of State of New Jersey, and the possible need
under the NASDAQ rules to obtain HUBCO 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 in connection with
(x) the execution and delivery by HUBCO of this Agreement, and (y) the
consummation by HUBCO of the Merger and the other transactions contemplated
hereby, except such as are listed in the HUBCO Disclosure Schedule or in the
aggregate will not (if not obtained) have a material adverse effect on the
business, 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, 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 Xxxxxx Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx"), independent public
accountants with respect to HUBCO and the unaudited consolidated statement of
condition of HUBCO as of September 30, 1998 and the related unaudited
consolidated statements of income and cash flows for the nine months ended
September 30, 1998 and 1997, as reported in HUBCO's Quarterly Report on Form
10-Q, filed with the SEC under the 1934 Act (collectively, the "HUBCO Financial
Statements"). The HUBCO Financial Statements (including the related notes) have
been prepared in accordance with GAAP consistently applied during the periods
involved (except as may be indicated therein or in the notes thereto), and
fairly present the consolidated financial position of HUBCO as of the respective
dates set forth therein, and the related consolidated statements of income,
changes in stockholders' equity and of cash flows (including the related notes,
where applicable) fairly present the consolidated results of operations, changes
in stockholders' equity and cash flows of HUBCO for the respective fiscal
periods set forth therein.
(b) The books and records of HUBCO and the HUBCO
Subsidiaries are being maintained in material compliance with applicable legal
and accounting requirements, and reflect only actual transactions.
(c) Except as and to the extent reflected, disclosed
or reserved against in the HUBCO Financial Statements (including the notes
thereto), as of September 30, 1998 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 September 30, 1998 or the notes thereto. Except for
the transactions contemplated by this Agreement, and the other proposed
acquisitions by HUBCO reflected in any press release issued or Form 8-K filed by
HUBCO with the SEC since September 30, 1998, neither HUBCO nor any HUBCO
Subsidiary has incurred any liabilities since September 30, 1998 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 September 30, 1998 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 of operations, 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 and known to LFB, other than changes
resulting from facts not disclosed to, or otherwise known by, LFB on or prior to
the date hereof, or (v) the entry, after the date hereof, by HUBCO or any HUBCO
Subsidiary into an agreement to acquire another entity.
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 LFB 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, and will be approved or listed for trading on NASDAQ.
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 LFB 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 LFB 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 LFB
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 LFB 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 within the
past six years. 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.
(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.
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. Except as disclosed in the HUBCO
Disclosure Schedule, neither HUBCO nor any of its Subsidiaries has received any
written notice, citation, claim, assessment, proposed assessment or demand for
abatement alleging that HUBCO or any of its Subsidiaries (either directly or as
a successor-in-interest in connection with the enforcement of remedies to
realize the value of properties serving as collateral for outstanding loans) is
responsible for the correction or cleanup of any condition resulting from the
violation of any law, ordinance or other governmental regulation regarding
environmental matters which correction or cleanup would be material to the
business, operations, assets or financial condition of HUBCO and its
Subsidiaries taken as a whole. Except as disclosed in the HUBCO Disclosure
Schedule, HUBCO has no knowledge that any toxic or hazardous substances or
materials have been emitted, generated, disposed of or stored on any property
currently owned or leased by HUBCO or any of its subsidiaries in any manner that
violates or, after the lapse of time is reasonably likely to violate, any
presently existing federal, state or local law or regulation governing or
pertaining to such substances and materials, the violation of which would have a
material adverse effect on the business, operations, assets or financial
condition of HUBCO and its Subsidiaries, taken as a whole.
4.19 Reserves. As of September 30, 1998, 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
and New Jersey Department of Banking policies. As of September 30, 1998, 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 for the data processing systems used
in the business conducted by HUBCO and the HUBCO Subsidiaries 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.
4.21 Reorganization. As of the date hereof, after reviewing
the terms of this Agreement, with HUBCO's attorneys, HUBCO does not have any
reason to believe that the Merger will fail to as a reorganization under Section
368(a) of the Code.
4.22 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 LFB. During the period from
the date of this Agreement to the Effective Time, LFB and the Association shall,
and shall cause each LFB Subsidiary to, conduct their respective businesses only
in the ordinary course and consistent with past practice, except for
transactions permitted hereunder or with the prior written consent of HUBCO,
which consent will not be unreasonably withheld, provided, however, that the
Association may in its sole discretion cause the 1998 Directors Stock
Compensation Plan to purchase up to 8,845 shares of LFB Common Stock for
delivery to Plan participants, pursuant to the terms of the Plan. Each of LFB
and the Association also shall use its reasonable best efforts to (i) preserve
its business organization and that of the LFB Subsidiaries intact, (ii) keep
available to itself and the LFB Subsidiaries the present services of their
respective employees, and (iii) preserve for itself and HUBCO the goodwill of
its customers and those of the LFB 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
LFB Disclosure Schedule, or as permitted or required by this Agreement, neither
LFB nor the Association will:
(a) change any provision of its Certificate of
Incorporation or any similar governing documents;
(b) change any provision of its Bylaws 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 LFB 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, LFB may declare, set
aside or pay its regular dividends on the LFB Common Stock in a quarterly amount
equal to $0.06 per share, with the dividend payment dates to be coordinated with
HUBCO, it being the intention of the parties that the shareholders of LFB
receive dividends for any particular calendar quarter on either the LFB 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 the Association to pay dividends
on its capital stock to LFB;
(d) grant any severance or termination pay (other
than pursuant to policies or contracts of LFB in effect on the date hereof and
disclosed to HUBCO in the LFB 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 (i) as required by law or (ii) as specified in
Section 5.2 of the LFB 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 LFB or the
Association;
(f) make any capital expenditures in excess of
$50,000 in the aggregate, 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, except as set forth in Section 5.2 of the LFB Disclosure
Schedule;
(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 or
make any new investments in securities other than investments in government,
municipal or agency bonds having a maturity of less than five years;
(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 LFB
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, LFB and the Association 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 LFB or the
Association (an "Acquisition Transaction"). Notwithstanding the foregoing, LFB
may enter into discussions or negotiations or provide information in connection
with an unsolicited possible Acquisition Transaction if the Board of Directors
of LFB, 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. LFB 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 LFB 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, LFB
agrees to provide HUBCO, and HUBCO agrees to provide LFB, with internally
prepared profit and loss statements no later than 25 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), LFB will deliver to HUBCO and HUBCO will deliver to LFB
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, LFB will deliver to HUBCO and HUBCO will
deliver to LFB 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) LFB and the Association shall permit HUBCO and
its representatives, and HUBCO shall permit, and cause each HUBCO Subsidiary to
permit, LFB and its representatives, reasonable access to their respective
properties, and shall disclose and make available to HUBCO and its
representatives, or LFB 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 (excluding information related to merger
matters), organizational documents, Bylaws, 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 LFB 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, LFB acknowledges that
HUBCO may be involved in discussions concerning other potential acquisitions and
HUBCO shall not be obligated to disclose such information to LFB 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.
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 LFB 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 LFB and HUBCO to the LFB 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 LFB 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 LFB 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 promptly to provide LFB with
the information needed to correct such inaccuracy or omission. HUBCO shall
promptly furnish LFB 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 LFB shareholders.
(c) LFB shall furnish HUBCO with such information
concerning LFB as is necessary in order to cause the Proxy Statement-Prospectus,
insofar as it relates to LFB, to comply with Section 5.6(a) hereof. LFB agrees
promptly to advise HUBCO if at any time prior to the Shareholders' Meeting, any
information provided by LFB in the Proxy Statement-Prospectus becomes incorrect
or incomplete in any material respect and promptly to provide HUBCO with the
information needed to correct such inaccuracy or omission. LFB shall promptly
furnish HUBCO with such supplemental information as may be necessary in order to
cause the Proxy Statement-Prospectus, insofar as it relates to LFB and the
Association to comply with Section 5.6(a) after the mailing thereof to LFB
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. LFB shall promptly furnish HUBCO with
such information regarding the LFB shareholders as HUBCO requires to enable it
to determine what filings are required hereunder. LFB authorizes HUBCO to
utilize in such filings the information concerning LFB and the Association
provided to HUBCO in connection with, or contained in, the Proxy
Statement-Prospectus. HUBCO shall furnish LFB's counsel with copies of all such
filings and keep LFB advised of the status thereof. HUBCO and LFB shall as
promptly as practicable file the Registration Statement containing the Proxy
Statement-Prospectus with the SEC, and each of HUBCO and LFB 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 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 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 Entities
necessary to consummate the transactions contemplated by this Agreement as soon
as possible, including, without limitation, those required by the FDIC, the FRB,
the OTS, the Department, the SEC and (if required) 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 Entity 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) LFB 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 LFB 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. HUBCO shall
provide LFB and its counsel with copies of such registration statements at the
time of filing. LFB agrees to provide HUBCO with any information, certificates,
documents or other materials about LFB 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.
LFB 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 LFB for reasonable expenses thus incurred by
LFB 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 LFB unless LFB 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, LFB shall cooperate with HUBCO to reasonably conform LFB's
policies and procedures regarding applicable regulatory matters to those of
HUBCO, as HUBCO may reasonably identify to LFB from time to time, provided,
however, that implementation of such conforming actions may at LFB's discretion
be delayed until the time period following receipt of shareholder and all
regulatory approvals, as provided at Section 5.15.
5.7. Approval of Shareholders. LFB will (i) take all steps
necessary duly to call, give notice of, convene and hold a meeting of the
shareholders of LFB (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) LFB'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 LFB 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.
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 LFB 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, the Bank, LFB and the Association will use
reasonable efforts to cause the Merger to occur on or before June 30, 1999.
5.9. Public Announcements. HUBCO and LFB 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 LFB 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 LFB determines that a material condition to its obligation to consummate the
transactions contemplated hereby cannot be fulfilled on or prior to September
30, 1999 (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, LFB and HUBCO will promptly
inform the other of any facts applicable to LFB 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 LFB to honor the existing written employment and severance contracts
with officers and employees of LFB and Association that are included in the LFB
Disclosure Schedule.
(b) Following consummation of the Merger, the Bank
will decide whether to continue each of the Association and/or LFB's pension and
welfare plans for the benefit of employees of the Association and LFB, or to
have such employees become covered under a HUBCO Pension and Welfare Plan. If
HUBCO decides to cover Association and LFB employees under a HUBCO Pension and
Welfare Plan, such employees will receive credit for prior years of service with
the Association and/or LFB for purposes of determining eligibility to
participate, and vesting, if applicable. No prior existing condition exclusion
limitation or uninsured waiting periods shall be imposed with respect to any
medical coverage plan as a result of the Merger.
(c) Any person who was serving as an employee of
either LFB or the Association immediately prior to the Effective Time (other
than those employees covered by either a written employment agreement or the
arrangements set forth in Section 5.11 of the LFB Disclosure Schedule) whose
employment is terminated by HUBCO or the Bank or any of the HUBCO Subsidiaries
within one year after the Effective Time (unless termination of such employment
is for Cause (as defined below)) shall be entitled to a severance payment from
the Bank equal in amount to two weeks' base pay for each full year such employee
was employed by LFB or the Association or any successor or predecessor thereto
or other LFB Subsidiary, subject to a minimum of two weeks' severance and a
maximum of 26 weeks' severance, together with any accrued but unused and unpaid
vacation leave with respect to the calendar year in which termination occurs.
For purposes of this Section 5.11, "Cause" shall mean termination because of the
employee's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, failure to perform stated duties or
willful violation of any law, rule, or regulation (other than traffic violations
or similar offenses).
(d)(i) Each participant in the LFB ESOP not fully
vested will, in accordance with the terms of the LFB ESOP, become fully vested
in his or her LFB ESOP account as of the Effective Time. As soon as practicable
after the execution of this Agreement, LFB and the Association will cooperate to
cause the LFB ESOP to be amended, if necessary, and other action taken, in a
manner reasonably acceptable to LFB and HUBCO, to provide that the LFB ESOP will
terminate according to its terms upon the Effective Time. Between the date
hereof and the Effective Time, the existing LFB ESOP indebtedness shall be paid
in the ordinary course of business pursuant to the existing loan amortization
schedule and LFB or the Association shall make such contributions to the LFB
ESOP as necessary to fund such payments. Any indebtedness of the LFB ESOP
remaining as of the Effective Time shall be repaid from the Trust associated
with the LFB ESOP through application of cash proceeds or sale of the HUBCO
Common Stock received by the LFB ESOP; provided, however, that any related sale
or distribution of shares by the LFB ESOP shall be effected in accordance with
the requirements of federal and any applicable state securities laws and
regulations, including any rules of the NASD. Upon the repayment of the LFB ESOP
loan, the remaining funds in the LFB ESOP suspense account will be allocated (to
the extent permitted by Sections 401(a), 415 or 4975 of the Code and the
applicable laws and regulations including, without limitation, the applicable
provisions of ERISA) to LFB ESOP participants (as determined under the terms of
the LFB ESOP). LFB and HUBCO agree that, subject to the conditions described
herein, as soon as practicable after the Effective Time and repayment of the LFB
ESOP loan, participants in the LFB ESOP shall be entitled at their election to
have the amounts in their LFB ESOP accounts either distributed to them in a lump
sum or rolled over to another tax-qualified plan (including HUBCO or Bank plans
to the extent permitted by HUBCO) or individual retirement account.
(ii) The actions relating to termination of the LFB
ESOP will be adopted conditioned upon the consummation of the Merger and upon
receiving a favorable determination letter from the Internal Revenue Service
("IRS") with regard to the continued qualification and termination of the LFB
ESOP after any required amendments. LFB will submit appropriate requests for any
such determination letter to the IRS and will use their best efforts to seek the
issuance of such letter as soon as practicable following the date hereof. LFB
and HUBCO will adopt such additional amendments to the LFB ESOP as may be
reasonably required by the IRS as a condition to granting such determination
letter, provided that such amendments do not (A) substantially change the terms
outlined herein, (B) have a Material Adverse Change other than as disclosed in
the LFB Disclosure Schedule on LFB or (C) result in an additional material
liability to HUBCO.
(iii) As of and following the Effective Time, HUBCO
shall cause the LFB ESOP to be maintained for the exclusive benefit of employees
and other persons who were participants or beneficiaries therein prior to the
Effective Time and proceed with termination of the LFB ESOP through distribution
of its assets in accordance with its terms subject to the amendments described
herein and as otherwise may be required to comply with applicable law or to
obtain a favorable determination from the IRS as to the continuing qualified
status of the LFB ESOP, provided, however, that no such termination
distributions of the LFB ESOP shall occur after the Effective Time until a
favorable termination letter has been received from the IRS. LFB shall cause the
LFB ESOP to be amended, effective as of the Effective Time, to provide that the
administrative committee thereof shall consist of two individuals appointed by
HUBCO as of the Effective Time.
(e) HUBCO may elect to continue or terminate LFB's
defined benefit pension plan or merge such plan into HUBCO's defined benefit
pension plan.
(f) HUBCO may elect to continue LFB's 401(k) plan or
merge such plan into HUBCO's 401(k) plan. Employees of LFB and the Association
who become employees of HUBCO or any HUBCO Subsidiary shall either continue in
LFB's 401(k) plan or become entitled to participate in the applicable HUBCO
retirement savings plan ("401(k) Plan") in accordance with its terms.
(g) HUBCO will honor the Little Falls Bank Directors
Consultation and Retirement Plan, as it has been amended to terminate at the
Effective Time and pay-out not more than $400,000 (all of which shall have been
accrued on the books of LFB by Closing) in the aggregate to the participants
thereunder in full satisfaction of the Association's and LFB's obligations.
HUBCO will also honor the Directors Health Benefits Plan as it has been amended
to terminate at the Effective Time and pay-out not more than the $230,000, which
has been accrued on the books of LFB as a liability of LFB in connection
therewith, to the participants thereunder in full satisfaction of the
Association and LFB's obligations thereunder.
(h) At the Effective Time LFB may pay its employees
for all unused vacation as of the Effective Time.
(i) HUBCO at the Closing will offer each director of
LFB a position on a HUBCO advisory board for a period of 36 months with
continuation of current director fees (only for any director receiving direct
fees on the date of this Agreement) of $1,440 per month to such director during
such period as scheduled in the LFB Disclosure Schedule.
(j) As of the Effective Time, all awards under LFB's
Stock Option MSBP and Director Plans shall be vested and non-forfeitable.
(k) Association and LFB shall continue its employee,
officer and director bonus policies as scheduled in the LFB Disclosure Schedule
through Closing.
(l) As of the Effective Time, LFB and the Association
shall terminate Xxxxxxx X. Xxxxxxx as President and Chief Executive Officer upon
payment of a $200,000 lump sum. On or before Effective Time, HUBCO shall enter
into a Consulting Agreement as detailed at Schedule 5.11(l) of the LFB
Disclosure Schedule.
(m) No employment agreements between the Association
and its employees shall be renewed from the date of this Agreement through the
Effective Time.
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 LFB.
(a) For planning purposes, LFB shall, within 30 days
from the date hereof, provide HUBCO with its estimated budget of
transaction-related expenses reasonably anticipated to be payable by LFB in
connection with this transaction based on facts and circumstances then currently
known, including the fees and expenses of counsel, accountants, investment
bankers and other professionals. LFB 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,
LFB shall ask all of its attorneys and other professionals to render current and
correct invoices for all unbilled time and disbursements within 30 days. LFB
shall accrue and/or pay all of such amounts as soon as possible.
(c) LFB shall cause its professionals to render
monthly invoices within 30 days after the end of each month. LFB shall advise
HUBCO monthly of all out-of-pocket expenses which LFB has incurred in connection
with this transaction.
(d) HUBCO, in reasonable consultation with LFB, 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 LFB or the Association
or serves or has served at the request of LFB or the Association 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 LFB or the Association or
serves or has served at the request of LFB or the Association 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 LFB or the Association or any of
their respective affiliates, or by any former or present shareholder of LFB
(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 LFB or the Association or of any committee of LFB's or the
Association's Board of Directors, the events leading up to the execution of this
Agreement, any statement, recommendation or solicitation made in connection
therewith or related thereto and any breach of any duty in connection with any
of the foregoing, or (ii) the enforcement of the obligations of HUBCO set forth
in this Section 5.14, in each case to the fullest extent which LFB or the
Association would have been permitted under any applicable law and their
respective Certificates of Incorporation or Bylaws 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 LFB or the Association immediately prior to
the Effective Time with respect to the indemnification of the Indemnitees
arising out of the Certificate of Incorporation or Bylaws of LFB or the
Association, or arising out of any written indemnification agreements between
LFB and/or the Association and such persons disclosed in the LFB 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 LFB's and the Association's
officers and directors to be covered under a run-off rider applicable to LFB and
the Association 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 at HUBCO's option, to be covered under a tail extension of LFB's and
the Association'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 LFB's and the Association'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 LFB
believes that it has established all reserves and taken all provisions for
possible loan losses required by GAAP and applicable laws, rules and
regulations, LFB 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, LFB and HUBCO shall consult and cooperate with each other with respect
to (i) conforming to the extent appropriate, based upon such consultation, LFB's
loan, accrual and reserve policies and LFB'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 LFB from time to time, (ii) new extensions of
credit or material revisions to existing terms of credits by the Association, 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 LFB and the Association to the
extent appropriate; provided that any required change in LFB's practices in
connection with the matters described in clause (i) or (iii) above need not be
effected (A) more than five days prior to the Effective Time and (B) unless and
until HUBCO agrees in writing that all conditions precedent to the Determination
Date have occurred and HUBCO has provided the Closing Notice. No accrual or
reserve made by LFB or any LFB Subsidiary pursuant to this subsection, or any
litigation or regulatory proceeding arising out of any such accrual or reserve,
shall constitute or be deemed to be a breach or violation of any representation,
warranty, covenant, condition or other provision of this Agreement or to
constitute a termination event within the meaning of Section 7.1(d) or Section
7.1(g) hereof.
5.16 Tax-Free Reorganization Treatment. Before the Effective
Time, neither HUBCO nor LFB 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 "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.
5.17 Comfort Letters. HUBCO shall cause Xxxxxx Xxxxxxxx, its
independent public accountants, to deliver to LFB, and LFB shall cause R&C, 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 LFB,
in the form customarily issued by such accountants at such time in transactions
of this type.
5.18 Affiliates. Promptly, but in any event within two weeks,
after the execution and delivery of this Agreement, LFB shall deliver to HUBCO
(a) a letter identifying all persons who, to the knowledge of LFB, may be deemed
to be affiliates of LFB under Rule 145 of the 1933 Act, including, without
limitation, all directors and executive officers of LFB and (b) cause each
officer and director, and use its reasonable best efforts to cause each other
person who may be deemed to be an affiliate of LFB, to execute and deliver to
HUBCO a letter agreement, substantially in the form of Exhibit 5.18, agreeing to
comply with Rule 145.
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 Shareholders; SEC Registration. This
Agreement and the transactions contemplated hereby shall have been approved by
the requisite vote of the shareholders of LFB 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 OTS, the Department, the FRB, the SEC and (if
necessary) the DEP) required to consummate the transactions contemplated hereby
shall have been obtained without the imposition of any non-standard or
non-customary term or condition which would materially impair the value of LFB
and the Association, 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 Entity 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 Entity 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 LFB 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 LFB shall each have
received an opinion, dated as of the Effective Time, of Pitney, Xxxxxx, Xxxx &
Xxxxx, reasonably satisfactory in form and substance to LFB 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(a) of the Code;
(ii) no gain or loss shall be recognized upon the exchange of LFB Common Stock
solely for Hubco Common Stock; (iii) in the case of LFB shareholders who receive
cash in whole or in part in exchange for their LFB Common Stock, gain, if any,
realized by the recipient on the exchange shall be recognized, but in an amount
not in excess of the amount of such cash; (iv) in the case of LFB shareholders
who recognize gain on the exchange of their LFB Common Stock and in whose hands
such stock was a capital asset on the date of the exchange, such gain shall be
treated as capital gain (long-term or short-term, depending on the shareholders'
respective holding periods for their LFB Common Stock), except in the case of
any such shareholder as to which the exchange has the effect of a dividend
within the meaning of Section 356(a)(2) of the Code by reason of the
applicability of the stock attribution rules of Section 318 of the Code, it
being understood that the applicability of such attribution rules to any
particular shareholder shall depend on such shareholder's particular factual
circumstances; (v) the basis of any Hubco Common Stock received in exchange for
LFB Common Stock shall equal the basis of the recipient's LFB 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 (vi)
the holding period for any Hubco Common Stock received in exchange for LFB
Common Stock will include the period during which the LFB Common Stock
surrendered on the exchange was held, provided such stock was held as a capital
asset on the date of the exchange.
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 LFB and the Association. Except for those representations which
are made as of a particular date, the representations and warranties of LFB
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, except to the
extent waived pursuant to Section 5.12 hereof. LFB 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 LFB
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 LFB 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 LFB, dated the Closing Date, in form and substance
reasonably satisfactory to HUBCO, substantially to the effect set forth in
accordance with Exhibit 6.2(b) hereto.
(c) Certificates. LFB 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. LFB shall have furnished HUBCO with
letters from all attorneys representing LFB and the Association in any matters
confirming that all legal fees in excess of $5,000 have been paid in full for
services rendered as of the Effective Time.
(e) Merger Related Expense. LFB 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 LFB, other than printing expenses (which are within the
control of HUBCO), shall be reasonable, taking into account normal and customary
billing rates, fees and expenses for similar transactions. Any amounts less than
10 percent over budget shall be presumed reasonable.
(f) Termination of Director Retirement,
Post-Employment Health Benefit Plans and Option Grants. LFB shall have
effectively terminated the Director Retirement Plan with no more than $400,000
in required payments and all of the participants shall have agreed to the
termination of such Plan and the limitation on such payments and the waiver of
any other payments or benefits. LFB shall have effectively terminated the
January 1, 1995 Director Health Benefits Plan ("Directors Health Benefits
Plan")with payments no more than the amount accrued as of the Effective Time on
its books (which shall be no more than $230,000 above the amount accrued on the
date hereof) and all of the participants shall have agreed to the termination of
such Plan and the waiver of any other payments or benefits. The Directors of LFB
and/or the Association shall, irrespective of any provision in this Agreement or
in the LFB Stock Option Plan or any of the Option Grant Agreements, consent to
the expiration of all outstanding stock options awarded by LFB to the directors,
if not exercised within 90 days from the Effective Time.
6.3. Conditions to the Obligations of LFB Under this
Agreement. The obligations of LFB 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, except to the extent waived
pursuant to Section 5.12 hereof. 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 affect the representation as to which the supplement or
amendment relates.
(b) Opinion of Counsel to HUBCO. LFB shall have
received an opinion of counsel to HUBCO, dated the Closing Date, in form and
substance reasonably satisfactory to LFB, substantially to the effect set forth
in accordance with Exhibit 6.3(b) hereto.
(c) Fairness Opinion. LFB shall have received an
opinion from FinPro, dated no more than three days prior to the date the Proxy
Statement-Prospectus is mailed to LFB'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
LFB hereunder is fair to such shareholders from a financial point of view
("Fairness Opinion") and such Fairness Opinion shall be updated as of the
Effective Time.
(d) Certificates. HUBCO shall have furnished LFB with
such certificates of its officers and such other documents to evidence
fulfillment of the conditions set forth in this Section 6.3 as LFB may
reasonably request.
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 LFB:
(a) by mutual written consent of the parties hereto;
(b) by HUBCO or LFB (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 LFB is taken and such shareholders fail to approve this
Agreement at the meeting (or any adjournment or postponement thereof) held for
such purpose (provided that the terminating party shall not be in material
breach of any of its obligations under Section 5.7 hereof), 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 (provided that
the terminating party shall not be in material breach of any of its obligations
under Section 5.7 hereof);
(c) by HUBCO or LFB 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 LFB
if any such application is approved with conditions (other than conditions which
are customary or standard in such regulatory approvals) which would materially
impair the value of LFB and the Association, taken as a whole, to HUBCO;
(d) by HUBCO if (i) there shall have occurred an LFB
Material Adverse Change from that disclosed by LFB in LFB's Quarterly Report on
Form 10-Q for the nine months ended September 30, 1998 (it being understood that
those matters disclosed in the LFB Disclosure Schedule shall not be deemed to
constitute such a material adverse effect) or (ii) there was a material breach
in any representation, warranty, covenant, agreement or obligation of LFB
hereunder and such breach shall not have been remedied within 30 days after
receipt by LFB of notice in writing from HUBCO to LFB specifying the nature of
such breach and requesting that it be remedied;
(e) by LFB, if (i) there shall have occurred a HUBCO
Material Adverse Change from that disclosed by HUBCO in HUBCO's Report on Form
10-Q for the nine months ended September 30, 1998, which change shall have
resulted in a material adverse effect on HUBCO (it being understood that those
matters disclosed in the HUBCO Disclosure Schedule shall not be deemed to
constitute such a material adverse effect); 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 LFB specifying the nature of such
breach and requesting that it be remedied;
(f) by LFB, if LFB'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 and have agreed in writing that a Triggering Event has
occurred under the HUBCO Stock Option;
(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; or
(h) by LFB 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.
7.2. Effect of Termination. In the event of the termination
and abandonment of this Agreement by either HUBCO or LFB 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 LFB 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 LFB 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, LFB may bear the expenses of the
Association.
(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.: Xxxxxxx X. Xxxxxxx, Esq.
(b) If to LFB, to:
Little Falls Bancorp, Inc.
00 Xxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxxxx, President
and Chief Executive Officer
Copy to:
Xxxxxxx, Spidi, Sloane & Xxxxx, P.C.
One Franklin Square
0000 X Xxxxxx, X.X., Xxxxx 000X
Xxxxxxxxxx, X.X. 00000
Attn.: Xxxxxxx Xxxxx, 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, LFB and the Association
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: ________________________ By: ___________________________
X. Xxxx Van Borkulo-Xxxxx, Xxxxxxx X. Xxxxxxx, Chairman,
Secretary President and Chief Executive Officer
ATTEST: LITTLE FALLS BANCORP, INC.
By: ________________________ By: ________________________________
Xxxxxx X. Xxxxx
Corporate Secretary Chairman
ATTEST: XXXXXX UNITED BANK
By: ________________________ By: _________________________________
X. Xxxx Van Borkulo-Xxxxx Xxxxxxx X. Xxxxxxx, Chairman,
Secretary President and Chief Executive Officer
ATTEST: LITTLE FALLS BANK
By: ________________________ By: ________________________________
Xxxxxx X. Xxxxx
Corporate Secretary Chairman
AGREEMENT OF LFB AND ASSOCIATION DIRECTORS
Reference is made to the Agreement and Plan of Merger, dated
as of January 26, 1999 (the "Merger Agreement"), among HUBCO, Inc. ("HUBCO"), a
New Jersey corporation and registered bank holding company, Xxxxxx United Bank
(the "Bank"), a New Jersey state-chartered commercial banking corporation and
wholly-owned subsidiary of HUBCO, Little Falls Bancorp, Inc., a New Jersey
corporation and registered savings and loan holding company ("LFB"), and Little
Falls Bank, a federally chartered bank and wholly-owned subsidiary of LFB (the
"Association"). 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
LFB and the Association, solely in such person's capacity as a holder of LFB
Common Stock, agrees to vote or cause to be voted all shares of LFB Common Stock
which are held by such person as of the voting record date for the Shareholders
Meeting, 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,
unless HUBCO or the Bank is then in breach or default in any material respect
with regard to any covenant, agreement, representation or warranty contained in
the Agreement.
It is understood and agreed that this Agreement of LFB and
Association Directors (this "Agreement") relates solely to the capacity of the
undersigned as shareholders or other beneficial owners of shares of LFB Common
Stock and is not in any way intended to affect the exercise by the undersigned
of the undersigned's responsibilities as directors of LFB or the Association. 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 LFB Common Stock held by
the undersigned as of the date hereof.
The undersigned also hereby consents at the Effective Time to
(i) the termination of the Director Retirement Plan, with the pay-out thereunder
as detailed in the attached schedule, (ii) the termination of any and all
retiree health benefits provided by the Association and/or LFB including the
Directors Health Benefits Plan, and (iii) the expiration of all stock options
granted to the undersigned that are not exercised within 90 days from the
Effective Time.
I have carefully read the Merger Agreement and this 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.
__________________________________ _________________________________
Xxxxx X. Xxxxxx Xxxxxx X. Xxxxx
__________________________________ _________________________________
Xxxx X. Xxxxxxx Xxxxxx Xxxxxx
__________________________________ _________________________________
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
__________________________________ _________________________________
Xxxxxxx X. Xxxxxxx
Dated: As of January 26, 1999
EXHIBIT 5.18
FORM OF AFFILIATE LETTER FOR LFB AFFILIATES
_____________, 1999
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 Little Falls Bancorp, Inc. ("LFB"), by
HUBCO, Inc., a New Jersey corporation and registered bank holding company
("HUBCO"), pursuant to the Agreement and Plan of Merger dated as of _________,
1999 (the "Agreement") between LFB, its thrift 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 LFB Common
Stock. As a result of the Merger, I will receive shares of HUBCO Common Stock in
exchange for my LFB Common Stock.
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of LFB, 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").
I represent to and agree with HUBCO that:
A. 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 LFB at the time the Merger is submitted for a vote of LFB'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.
B. 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 AS OF
____________, 1999 BETWEEN THE REGISTERED HOLDER HEREOF AND HUBCO,
INC., A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF
HUBCO, INC."
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 LFB.
Execution of this letter is not an admission on my part that I
am an "affiliate" of LFB 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 _______, 1999 by
HUBCO, INC.
By: ______________________________
Name:
Title:
EXHIBIT 6.2
FORM OF OPINION OF COUNSEL TO LFB
TO BE DELIVERED TO HUBCO ON THE EFFECTIVE TIME
(a) LFB and the Association 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 LFB and the Association, and the Agreement constitutes a
valid and legally binding obligation of LFB and the Association 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 federally chartered
savings banks or their holding companies, (ii) general equitable principles,
(iii) laws relating to the safety and soundness of insured depository
institutions, and (iv) implied covenants of good faith, fair dealing and
commercially reasonable conduct and by applicable public policies and laws, 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 LFB and the
Association with any of the provisions thereof, will (i) conflict with or result
in a breach or default under (A) the certificate of incorporation or bylaws of
LFB or the charter or bylaws of the Association, or (B) based on certificates of
officers of LFB and the Association and without independent verification, to the
actual knowledge of such counsel, any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which LFB or the Association is a
party and which was referenced in the LFB Disclosure Schedule; or (ii) to the
actual knowledge of such counsel, result in the creation or imposition of any
material lien, instrument or encumbrance upon the property of LFB or the
Association, 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
corporation, banking or securities statute, rule or regulation applicable to LFB
or the Association.
(b) LFB is a corporation validly existing under the laws of
the State of New Jersey, the Association is a validly existing federally
chartered bank under the laws of the United States and each of LFB and the
Association 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. The deposits of the
Association are insured to the maximum extent provided by law by the Federal
Deposit Insurance Corporation.
(c) Each LFB Subsidiary listed as such in the LFB Disclosure
Schedule is validly existing under the laws of the jurisdiction of its
incorporation.
(d) There is, to the actual knowledge of such counsel, no
legal, administrative, arbitration or governmental proceeding or investigation
pending or threatened to which LFB or the Association is a party which would, if
determined adversely to LFB or the Association, have a material adverse effect
on the business, properties, results of operations, or condition, financial or
otherwise, of LFB or the Association taken as a whole or which presents a claim
to restrain or prohibit the transactions contemplated by the Agreement, except
any proceeding or investigation disclosed to HUBCO.
(e) No consent, approval, authorization, or order of any
federal or state court or federal or state banking or securities agency or body,
or to such counsel's actual knowledge of any third party under any note, bond,
mortgage, indenture, license, agreement or other instrument referred to in the
LFB Disclosure Schedule, is required for the consummation by LFB or the
Association 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 LFB 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 LFB 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 LFB
or the Association or the transactions contemplated in the Agreement and that it
is relying as to materiality as to factual matters on certificates of officers
and representatives of the parties to the Agreement and other factual
representations by LFB and the Association.
Such counsel's opinion shall be limited to matters governed by
the corporate and banking laws and the federal securities and banking laws and
regulations of the United States of America.
EXHIBIT 6.3
FORM OF OPINION OF COUNSEL TO HUBCO
TO BE DELIVERED TO LFB ON THE EFFECTIVE TIME
(a) HUBCO is a corporation validly existing under the laws of
the State of New Jersey, the Bank is a validly existing New Jersey
state-chartered commercial banking corporation under the laws of the State of
New Jersey and each of HUBCO and the Bank 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 under the laws of the jurisdiction of
its incorporation.
(c) The authorized capital stock of HUBCO consists of
____________ shares of common stock, no par value per share ("HUBCO Common
Stock") and _____________ shares of Series B, no par value, Convertible
Preferred Stock (the "Authorized Preferred Stock). Except for
to our knowledge, there are no outstanding subscription rights, options,
conversion rights, warrants or other agreements or commitments of any nature
whatsoever (either firm or conditional) obligating HUBCO to issue, deliver or
sell, cause to be issued, delivered or sold, or restricting HUBCO from selling
any additional HUBCO Common Stock or Authorized Preferred Stock or obligating
HUBCO to grant, extend or enter into any such agreement or commitment. The HUBCO
Common Stock to be issued in connection with the Merger in accordance with
Article II of the Agreement, when so issued in accordance therewith, will be
duly authorized, validly issued, fully paid and non-assessable, free of
preemptive rights and free and clear of all liens, encumbrances or restrictions
created by HUBCO.
(d) The Agreement has been authorized, executed and delivered
by HUBCO and the Bank and constitutes a valid and binding obligation of HUBCO
and the Bank enforceable in accordance with its terms, except that the
enforceability of the obligations of HUBCO and the Bank 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 Bylaws of HUBCO or the Charter and Bylaws of the Bank; (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
the Bank in connection therewith or in the course of our representation of HUBCO
and the Bank in connection with the Agreement) and to which HUBCO or the Bank is
a party or by which HUBCO or the Bank is bound; or (iii) cause HUBCO or the Bank
to violate any corporation or banking law applicable to HUBCO.
(f) All actions of the directors and shareholders of HUBCO and
the Bank required by federal banking laws and regulations and New Jersey law or
by the Certificate of Incorporation or Bylaws of HUBCO and the Bank, to be taken
by HUBCO and the Bank 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
LFB and that LFB has taken all action required to be taken by it prior to the
Effective Time, upon the appropriate filing of the Certificate of Merger in
respect of the Merger with the New Jersey Secretary of State in accordance with
Section 1.6 of the Agreement, the Merger will become effective at the Effective
Time, as such term is defined in Section 1.6, and upon effectiveness of the
Merger each share of LFB Common Stock will be converted as provided in Article
II of the Agreement.
(h) No approvals, authorizations, consents or other actions or
filings under federal banking law or New Jersey law ("Approvals") are required
to be obtained by HUBCO or the Bank in order to permit the execution and
delivery of the Agreement by HUBCO or the Bank and the performance by HUBCO or
the Bank of the transactions contemplated thereby other than those Approvals
which have been obtained or those Approvals or consents required to be obtained
by LFB.
(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 statement, 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 LFB at which the Agreement was
approved, contained any untrue statement of a material fact regarding HUBCO or
the Merger, or omitted to state a material fact regarding HUBCO or the Merger
therein, in light of the circumstances under which they were made, not
misleading.
We are members of the Bar of the State of New Jersey and we
express no opinion as to any of the laws of any jurisdiction other than the laws
of the State of New Jersey and federal laws and regulations of the United States
of America.
EXHIBIT 1.7
SUBSIDIARY AGREEMENT AND PLAN OF MERGER
This Subsidiary Agreement and Plan of Merger (this
"Agreement") is dated as of January 26, 1999, among XXXXXX UNITED BANK (the
"Bank"), a New Jersey state-chartered banking corporation and a wholly-owned
subsidiary of HUBCO, Inc., a New Jersey corporation ("HUBCO"), Little Falls Bank
(the "Association"), a federally chartered savings bank and a wholly-owned
subsidiary of Little Falls Bancorp, Inc., a New Jersey corporation ("LFB"). The
principal office of the Bank is located at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxx,
Xxx Xxxxxx. The Bank has capital of $________, divided into _______ shares of
common stock, each of par value $___ per share (the "Bank Common Stock"),
capital surplus of $_______ and undivided profits, including capital reserves,
of $_________, as of _____________ ____, 1999. The principal office of the
Association is located at _________________________, ______________, New Jersey.
The Association has capital of $_________ divided into ____ shares of common
stock, each of $____ par value (the "Association Common Stock"), capital surplus
of $_________ and undivided profits, including capital reserves, of $_________,
as of ____________ ____, 1999.
WHEREAS, the respective Board of Directors of HUBCO, LFB, the
Bank and the Association has approved, and deem it advisable and in the best
interests of their respective shareholders to consummate, the business
combination transaction between HUBCO and LFB set forth in the Agreement and
Plan of Merger, dated as of January 26, 1999 (the "HUBCO Merger Agreement"), by
and among HUBCO, LFB, the Bank and the Association, pursuant to which LFB will
merge with and into HUBCO (the "HUBCO Merger"); and
WHEREAS, not less than a majority of each of the Boards of
Directors of the Bank and the Association have approved, and deem it advisable
to consummate, the subsidiary merger provided for herein (the "Subsidiary
Merger") and in the HUBCO Merger Agreement, in accordance with the provisions of
applicable law;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein and in the HUBCO Merger Agreement, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 Effective Time of the Subsidiary Merger. Subject to the
provisions of this Agreement, the Subsidiary Merger shall become effective in
accordance with the terms of the Certificate of Merger pursuant to N.J.S.A.
17:9A-137 (the "Certificate of Merger") which shall be filed with the New Jersey
Department of Banking and Insurance (the "Banking Department") immediately
following the Effective Time (as defined in Section 1.6 of the HUBCO Merger
Agreement). The term "Subsidiary Merger Effective Time" shall be the date and
time when the Subsidiary Merger becomes effective, as set forth in the
Certificate of Merger.
1.2 Closing. Notwithstanding anything to the contrary
contained in the HUBCO Merger Agreement, the closing of the Subsidiary Merger
will take place immediately subsequent to the HUBCO Merger on the date and at
the location specified in the HUBCO Merger Agreement with respect to the HUBCO
Merger or at such other time, date or place as may be agreed to by the parties
hereto (the "Closing Date").
1.3. Effect of the Subsidiary Merger.
(a) At the Subsidiary Merger Effective Time:
(i) the separate existence of the Association shall
cease and the Association shall be merged with and into the Bank (the Bank is
sometimes referred to as herein as the "Surviving Bank");
(ii) the Certificate of Incorporation of the Bank as
in effect immediately prior to the Subsidiary Merger Effective Time shall be the
Certificate of Incorporation of the Surviving Bank until duly amended in
accordance with applicable law, and the name of the Surviving Bank shall be
Xxxxxx United Bank;
(iii) the Bylaws of the Bank as in effect immediately
prior to the Subsidiary Merger Effective Time shall be the Bylaws of the
Surviving Bank;
(iv) the main office and branch offices of the Bank
established and authorized immediately prior to the Subsidiary Merger Effective
Time and listed on Exhibit A attached hereto and the main office and branch
offices of the Association established and authorized immediately prior to the
Subsidiary Merger Effective Time and listed on Exhibit B attached hereto shall
become established and authorized branch offices of the Surviving Bank;
(v) the directors of the Bank immediately prior to
the Subsidiary Merger Effective Time shall be the directors of the Surviving
Bank, each to hold office in accordance with the Certificate of Incorporation
and Bylaws of the Surviving Bank until their respective successors are duly
elected or appointed and qualified (the names of the directors of the Surviving
Bank are listed on Exhibit C attached hereto); and
(vi) the executive officers of the Bank immediately
prior to the Subsidiary Merger Effective Time shall be the executive officers of
the Surviving Bank, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Bank until their respective successors
are duly elected or appointed and qualified (the names of the executive officers
of the Surviving Bank are listed on Exhibit D attached hereto);
(b) At and after the Subsidiary Merger Effective
Time, the Subsidiary Merger shall have all the effects set forth in N.J.S.A.
17:9A-139 and, in connection therewith, all assets of the Bank and the
Association as they exist at the Subsidiary Merger Effective Time shall pass to
and vest in the Surviving Bank without any conveyance or other transfer. The
Surviving Bank shall be responsible for all liabilities and obligations of every
kind and description of each of the Association and the Bank existing as of the
Subsidiary Merger Effective Time, whether matured or unmatured, accrued,
absolute, contingent or otherwise, and whether or not reflected or reserved
against on balance sheets, books of account or records of the Association or the
Bank.
(c) The business of the Surviving Bank shall be that
of a New Jersey commercial banking corporation, which shall be conducted as its
headquarters or main office at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxx, Xxx Xxxxxx
and its established and authorized branch offices which are listed on Exhibits A
and B.
ARTICLE II
EFFECT OF THE SUBSIDIARY MERGER ON THE CAPITAL
OF THE CONSTITUENT BANKS; EXCHANGE OF CERTIFICATES
2.1 Effect on the Association Capital Stock. At the Subsidiary
Merger Effective Time, by virtue of the Subsidiary Merger and without any action
on the part of the holder of any shares of the Association Common Stock, all
shares of the Association Common Stock (other than shares of the Association
Common Stock that are owned by the Association as treasury stock) shall become
and be converted into the right to receive that number of shares of common
stock, __ par value of the Bank as shall in the aggregate have a fair market
value equal to the fair market value of the shares of the Association Common
Stock being exchanged at the Subsidiary Merger Effective Time. All shares of the
Association Common Stock that are owned by the Association as treasury stock
shall automatically be canceled and retired and shall cease to exist and no
stock of the Bank or other consideration shall be delivered in exchange
therefor.
2.2 The Bank Common Stock. The shares of the Bank Common Stock
issued and outstanding immediately prior to the Subsidiary Merger Effective Time
shall remain outstanding and unchanged after the Subsidiary Merger.
2.3 Capital of Surviving Bank. The amount of capital stock of
the Surviving Bank immediately following the Subsidiary Merger Effective Time
shall be $_________, divided into ________ shares of common stock, each of $____
par value, and immediately following the Subsidiary Merger Effective Time, the
Surviving Bank shall have a surplus of $_________ and undivided profits,
including capital reserves, which, when combined with the capital and surplus,
will be equal to the combined capital structures of the Association and the Bank
referred to in the preamble of this Agreement, adjusted, however, for normal
earnings and expenses between ___________ ____, 1999 and the Subsidiary Merger
Effective Time.
ARTICLE III
COVENANTS
3.1 Covenants of the Bank and The Association. During the
period from the date of this Agreement and continuing until the Subsidiary
Merger Effective Time, each of the parties hereto agrees to observe and perform
all agreements and covenants of HUBCO, LFB, the Bank and the Association in the
HUBCO Merger Agreement that pertain or are applicable to the Bank and the
Association, respectively. Each of the parties hereto agrees to use all
reasonable 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 consummate and make effective the transactions contemplated by
this Agreement, subject to and in accordance with the applicable provisions of
the HUBCO Merger Agreement.
3.2 Liquidation Account. The liquidation account established
by the Association pursuant to the plan of conversion adopted in connection with
its conversion from mutual to stock form shall, to the extent required by
applicable law, continue to be maintained by HUBCO after the Bank Merger for the
benefit of those persons and entities who were savings account holders of the
Association on the eligibility and supplemental eligibility record dates for
such conversion and who continue from time to time to have rights therein. If
required by the rules and regulations of the OTS, the Surviving Bank will amend
its certificate of incorporation to provide specifically for the continuation of
the liquidation account previously established by the Association.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions to Each Party's Obligation To Effect the
Subsidiary Merger. The respective obligations of each party to effect the
Subsidiary Merger shall be subject to the satisfaction prior to the Closing Date
of the following conditions:
(a) Satisfaction of Conditions. Each condition to
consummation of the HUBCO Merger contained in the HUBCO Merger Agreement shall
have been satisfied (or waived by the party or parties entitled to assert such
condition), and each party shall have received a certificate from the other
party to the effect that all of the conditions to its obligation to consummate
the HUBCO Merger contained in the HUBCO Merger Agreement have been satisfied or
waived.
(b) No Injunctions or Restraints; Illegality. No
order, injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the Subsidiary Merger shall be in effect. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered, promulgated or
enforced by any Governmental Entity which prohibits, restricts or makes illegal
the consummation of the Subsidiary Merger.
(c) Shareholder Approvals. This Agreement and the
transactions contemplated hereby shall have been duly approved, ratified and
confirmed in accordance with applicable law and the respective certificate of
incorporation and By-laws of the Association and the Bank by the affirmative
vote of the shareholders of the Association and the Bank, such vote adopted at a
meeting of each such sole shareholder or by each such shareholder's written
consent in lieu thereof.
(d) Other Approvals. Other than the filings and
approvals provided for by Section 1.1, all requisite regulatory approvals
relating to the Subsidiary Merger shall have been filed, occurred or been
obtained and shall continue to be in full force and effect. In addition, all
consents, approvals and permits of and notices to non-governmental third parties
that are necessary to consummate the Subsidiary Merger shall have been filed,
occurred or been obtained and shall continue to be in full force and effect.
ARTICLE V
TERMINATION AND AMENDMENT
5.1 Termination. This Agreement shall be terminated
immediately and without any action on the part of the Association or the Bank
upon termination of the HUBCO Merger Agreement. This Agreement may be terminated
at any time prior to the Subsidiary Merger Effective Time by mutual consent of
the Bank and the Association in a written instrument, if the Board of Directors
of each so determines by a vote of a majority of the members of its entire
board.
5.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 5.1, this Agreement shall forthwith become void
and there shall be no liability or obligation under this Agreement on the part
of the Bank, the Association or their respective officers, directors or
affiliates.
5.3 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
ARTICLE VI
GENERAL PROVISIONS
6.1 Definitions. All capitalized terms which are used but not
defined herein shall have the meanings set forth in the HUBCO Merger Agreement.
6.2 Non-survival of Agreements. None of the agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except to the extent set forth in the HUBCO Merger
Agreement.
6.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to the Bank or the Association, respectively, at the
addresses for notices to HUBCO or LFB , respectively, as set forth in the HUBCO
Merger Agreement, with copies to the persons referred to therein.
6.4 Counterparts. This Agreement may be adopted, certified and
executed in separate counterparts, each of which shall be considered one and the
same agreement and shall become effective when all counterparts have been signed
by each of the parties and delivered to the other party, it being understood
that both parties need not sign the same counterpart.
6.5 Entire Agreement. Except as otherwise set forth in this
Agreement or the HUBCO Merger Agreement (including the documents and the
instruments referred to herein or therein), this Agreement constitutes the
entire agreement, and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
6.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New Jersey without regard
to any applicable conflicts of law.
6.7 Binding Effect. This Agreement is intended to be binding
on any successors of the parties.
6.8 Assignment. Except as provided herein, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party.
IN WITNESS WHEREOF, the Bank and the Association have caused
this Agreement to be signed by their duly authorized officers, under the
respective seal of such entities, all as of the date first above written.
ATTEST XXXXXX UNITED BANK
By: __________________________ By: ______________________________
X. Xxxx Van Borkulo-Xxxxx, Xxxxxxx X. Xxxxxxx, Chairman,
Secretary President and Chief Executive Officer
ATTEST LITTLE FALLS BANK
By: _________________________ By: _____________________________
______________________ Xxxxxxx X. Xxxxxxx
Corporate Secretary President and Chief Executive Officer
EXHIBIT A
Names and Locations of the Main Office and Branch Offices of the Bank
EXHIBIT B
Names and Locations of the Main Office and Branch Offices of the Association
EXHIBIT C
Names of the Directors of the Surviving Bank
EXHIBIT D
Names of the Executive Officers of the Surviving Bank
