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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 14, 1995
HUBCO, INC.
(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of incorporation)
1-10699 22-2405746
(Commission File Number) (IRS Employer Identification No.)
1000 MacArthur Boulevard, Mahwah, New Jersey 07430
(Address of principal executive offices)
(201) 236-2640
(Registrant's telephone number, including area code)
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<PAGE>
Item 5. Other Events.
1. On August 14, 1995, HUBCO, Inc. ("HUBCO") issued a press
release announcing the signing of an agreement with United
National Bancorp to provide data processing and imaged item
processing services.
The joint venture will provide imaged item processing,
imaged lock box processing and statement rendering services,
supporting telephone and P.C. bank access and depositor bill
paying services. A fully integrated data processing banking
package will be provided through the company, subject to
requisite regulatory approvals.
2. On August 21, 1995, HUBCO issued a press release announcing
the signing of a definitive agreement (the "Merger
Agreement") with Growth Financial Corp., a New Jersey
corporation and registered bank holding company ("Growth"),
whereby Growth will be merged with and into HUBCO (the
"Merger"). Growth is the parent company of Growth Bank, a
New Jersey-chartered commercial bank, which will be merged
with and into Hudson United Bank, a wholly-owned subsidiary
of HUBCO.
Under the terms of the Merger Agreement, Growth shareholders
will receive an exchange of stock intended to have a value
of approximately $14.64 per Growth share. The exchange
ratio will be between .69 and .81 of a share of HUBCO's
common stock, no par value ("HUBCO Common Stock") in
exchange for each share of Growth's common stock, $1.00 par
value per share ("Growth Common Stock"), subject to
adjustment under certain defined circumstances. The
exchange ratio will be determined prior to the closing of
the Merger based upon the average price per share of HUBCO
Common Stock measured during a pricing period.
Growth also announced its plan to immediately initiate
quarterly cash dividend payments. In connection with the
transaction, Growth has issued an option to HUBCO which,
based on certain defined events, could result in the
issuance of 336,850 new shares of Growth Common Stock to
HUBCO. The Merger, which is expected to be treated as a
tax-free exchange to holders of Growth common stock, will be
accounted for as a pooling of interests.
The Merger is subject to approval by Federal and State bank
regulatory authorities and the shareholders of Growth.
Growth Bank, headquartered in Basking Ridge, New Jersey, has
assets of $130 million and three branch offices serving
Morris and Somerset counties. HUBCO, with assets of $1.6
billion, is the eighth largest commercial banking company
headquartered in New Jersey and the largest bank holding
company headquartered in Bergen County.
The managements of HUBCO and Growth expect the Merger to
close during the first quarter of 1996.
Item 7. Exhibits.
99.1 Press Release dated August 14, 1995
99.2 Stock Purchase and Stockholder Agreement dated as
of August 11, 1995 among HUB Financial Services,
Inc., HUBCO, Inc., and United National Bancorp
99.3 Form of Data Processing Service and Clearing
Agency Agreement
99.4 Form of Administrative Services Agreement
99.5 Press Release dated August 21, 1995
2 Agreement and Plan of Merger dated as of August
18, 1995 among HUBCO, Inc., Hudson United Bank,
Growth Financial Corp. and Growth Bank
99.6 Stock Option Agreement dated August 18, 1995
between HUBCO, Inc. and Growth Financial Corp.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
HUBCO, INC.
Dated: August 24, 1995 By: D. LYNN VAN BORKULO-NUZZO
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D. Lynn Van Borkulo-Nuzzo
Executive Vice President
<PAGE>
INDEX TO EXHIBITS
99.1 Press Release dated August 14, 1995
99.2 Stock Purchase and Stockholder Agreement dated as of
August 11, 1995 among HUB Financial Services, Inc.,
HUBCO, Inc., and United National Bancorp
99.3 Form of Data Processing Service and Clearing Agency
Agreement
99.4 Form of Administrative Services Agreement
99.5 Press Release dated August 21, 1995
2 Agreement and Plan of Merger dated as of August 18,
1995 among HUBCO, Inc., Hudson United Bank, Growth
Financial Corp. and Growth Bank
99.6 Stock Option Agreement dated August 18, 1995 between
HUBCO, Inc. and Growth Financial Corp.
Exhibit 99.1
FOR IMMEDIATE RELEASE
August 14, 1995
HUBCO, INC. AND UNITED NATIONAL BANCORP ANNOUNCE
A DATA PROCESSING JOINT VENTURE
Mahwah, New Jersey, August 14, 1995 -- HUBCO, Inc.
(NASDAQ:HUBC) and United National Bancorp (NASDAQ: UNBJ) New
Jersey's eight and tenth largest commercial banking companies
today announced the signing of an agreement to provide data
processing and imaged item processing services.
The joint venture will provide imaged item processing,
imaged lock box processing and statement rendering services,
supporting telephone and P.C. bank access and depositor bill
paying services. A fully integrated data processing banking
package will be provided through this Company subject to
requisite regulatory approvals.
The sharing of technology and operational expenses will
provide efficiencies for both organizations which are expected to
reduce product development and delivery costs and provide greater
MIS expertise.
Services offered by this joint venture will be expanded to
meet market needs in the rapidly evolving banking industry.
Exhibit 99.2
STOCK PURCHASE AND STOCKHOLDER AGREEMENT
STOCK PURCHASE AND STOCKHOLDER AGREEMENT (this
"Agreement") dated as of August 11, 1995, among HUB Financial
Services, Inc., a New Jersey corporation (the "Company"), HUBCO,
Inc., a New Jersey corporation ("HUBCO") and UNITED NATIONAL
BANCORP, a New Jersey corporation ("UNB").
The parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
SECTION 1.01. CERTAIN DEFINITIONS. As used in this
Agreement, the following terms shall have the meanings specified
below:
"AFFILIATE" shall mean, when used with respect to a
specified Person, another Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by
or is under common control with the Person specified.
"BCA" shall mean the Business Corporation Act of the
State of New Jersey.
A Person shall be deemed the "BENEFICIAL OWNER" of, and
shall be deemed to "BENEFICIALLY OWN", any securities which such
Person or any of its Affiliates would be deemed to "beneficially
own" within the meaning of Rule 13d-3 under the Exchange Act if
the references to "within 60 days" in Rule 13d-3(d)(i) were
omitted.
"BOARD" shall mean the board of directors of the
Company.
"BUSINESS PLAN" shall mean the Business Plan of the
Company from time to time in effect.
"BUSINESS DAY" shall mean any day other than a day
which is a Saturday or Sunday or other day on which commercial
banks in New Jersey are authorized or required to remain closed.
"CERTIFICATE OF INCORPORATION" shall mean the
certificate of incorporation of the Company in the form of
Exhibit D.
A "CHANGE OF CONTROL" shall have occurred with respect
to a corporation for the purposes of this Agreement if:
(A) any of the following transactions shall be
consummated:
(i) a merger, consolidation, combination or exchange
with any other Person in which all common stock of such
corporation outstanding immediately prior thereto represents
(either by remaining outstanding or being converted into
common stock of the surviving corporation) less than 50% of
the common stock of such corporation or the surviving entity
outstanding immediately after such merger or consolidation;
or
(ii) the sale or disposition by such corporation
(in one transaction or a series of transactions) of all
or substantially all such corporation's assets;
(B) a plan of liquidation or dissolution of such
corporation is submitted to and approved by the stockholders of
such corporation; or
(C) any Person (other than (i) a trustee or other
fiduciary holding securities under an employee benefit plan of
such corporation or (ii) a Person owned directly or indirectly by
the stockholders of such corporation in substantially the same
proportions as their ownership of stock of such corporation) is
or becomes the beneficial owner, directly or indirectly, of 25%
or more of the common stock of such corporation.
"CLOSING" shall mean the closing of the purchase and
sale of the UNB Shares and the execution of the other Operative
Agreements, as set forth in Section 2.01.
"CLOSING DATE" shall mean the date on which the Closing
shall occur.
"COMMON STOCK" shall mean the Common Stock, no par
value, of the Company.
"COMPANY LEASE" shall mean one or more leases for space
between the Company and HUBCO, in the form annexed hereto as
Exhibit B, except that the Company's premises under the Lease are
15,873 square feet and the lease payments thereunder shall be
adjusted to reflect this increase.
"CONTRACT" shall mean contract, indenture, mortgage,
lease, deed, commitment, agreement, arrangement or legally
binding understanding.
As used in this Agreement, "CONTROL" (including, with
its correlative meanings, "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise).
"DISPOSE", with respect to Common Stock of the Company,
shall mean to sell, exchange, assign, transfer, pledge,
hypothecate or otherwise dispose of any interest, except by
operation of law in connection with a merger or consolidation of
the Holder thereof or the Company.
"EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934.
"FAIR MARKET VALUE" shall mean the fair market value of
the Company as a going concern in a sale on an arm's length basis
between an informed and willing buyer and an informed and willing
seller under no compulsion to buy or sell, taking into account
all the facts and circumstances then prevailing, including the
Company's business at the time of valuation, the terms of the
Operative Agreements and other Contracts to which the Company is
then a party and the effects, if any, of the sale on such
business, Operative Agreements and Contracts, assuming
consummation of the sale of the Company to a party not affiliated
with UNB or HUBCO or any subsequent Holder.
"FRB" shall mean the Board of Governors of the Federal
Reserve System or the Federal Reserve Bank of New York acting
under delegated authority.
"GAAP" shall mean generally accepted accounting
principles.
"HOLDER" shall mean any registered holder of Common
Stock.
"HUBCO SHARES" shall mean 500 Shares, which constitute
the Shares owned by HUBCO after the sale of the UNB Shares to
UNB.
"INITIAL SHARES" shall mean the HUBCO Shares and the
UNB Shares.
"JUDGMENT" shall mean any judgment, order, decree or
arbitral award.
"LIEN" shall mean, with respect to any asset, (i) any
mortgage, deed of trust, lien, pledge, charge, security interest,
easement, covenant, right of way, restriction, equity or
encumbrance of any nature whatsoever in or on such asset, and
(ii) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement
relating to such asset.
"LITIGATION" shall mean any written claim, action,
lawsuit, arbitration or proceeding.
"OPERATIVE AGREEMENTS" shall mean this Agreement, the
Servicing Agreements, the Company Lease and other attachments and
exhibits thereto.
"PERSON" shall mean any individual, firm, corporation,
partnership, trust, joint venture or other entity.
"SEC" shall mean the Securities and Exchange Commission
or any successor commission or agency having similar powers.
"SECURITIES ACT" shall mean the Securities Act of 1933.
"SHARES" shall mean shares of Common Stock.
"SERVICING AGREEMENT" shall mean the data processing
servicing agreement between the Company and Hudson United Bank
and United National Bank, each in the form set forth as Exhibit A
to this Agreement. "HUDSON SERVICING AGREEMENT" shall mean the
Servicing Agreement between the Company and Hudson United Bank.
"UNB SERVICING AGREEMENT" shall mean the Servicing Agreement
between the Company and United National Bank.
"TRANSFER" shall mean to sell, transfer or assign.
"TRANSACTIONS" shall mean all of the transactions
contemplated hereby, as defined in Section 3.01(a), including the
sale by HUBCO to UNB of the UNB Shares, the purchase by UNB of
the UNB Shares, and the execution and performance of the
Servicing Agreements.
"UNB SHARES" shall mean 500 Shares, purchased by UNB
under Section 2.01 hereof.
SECTION 1.02. TERMS GENERALLY. The definitions in
Sections 1.01 and elsewhere in this Agreement shall apply equally
to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation". Any reference in
this Agreement to a "day" or a number of "days" (without the
explicit qualification of "Business") shall be interpreted as a
reference to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular
calendar day, and such calendar day is not a Business Day, then
such action or notice shall be deferred until, or may be taken or
given, on the next Business Day.
ARTICLE II
PURCHASE AND SALE OF SHARES
SECTION 2.01. PURCHASE OF SHARES AND EXECUTION OF
OPERATIVE AGREEMENTS.
(a) At the Closing, in reliance upon the
representations and warranties set forth in this Agreement, and
upon the terms and subject to the conditions set forth herein,
(i) HUBCO shall sell to UNB, and UNB shall purchase 500 Shares of
the Common Stock (the "UNB Shares") for the amount specified in
Section 2.02 (the "Purchase Price") payable as provided in
Section 2.03 and (ii) UNB shall cause United National Bank to
enter into the UNB Servicing Agreement. In connection with the
UNB Servicing Agreement, United National Bank shall have
provided, at its sole cost, all necessary hook-ups to the Company
and obtained all terminals for use at United National Bank to
utilize the hook-up.
(b) At the Closing, in reliance upon the
representations and warranties set forth in this Agreement, and
upon the terms and subject to the conditions set forth herein,
HUBCO shall (i) cause Hudson United Bank to enter into the Hudson
Servicing Agreement (ii) enter into the Company Lease and (iii)
terminate the existing lease with the Company and the existing
servicing agreement between the Company and Hudson United Bank.
(c) At the Closing, in reliance upon the
representations and warranties set forth in this Agreement, and
upon the terms and subject to the conditions set forth herein,
the Company shall (i) enter into the UNB Servicing Agreement, the
Hudson Servicing Agreement and the Company Lease, and (ii)
terminate the existing lease for space for the Company and the
existing Service Agreement between the Company and Hudson United
Bank.
SECTION 2.02. CALCULATION OF PURCHASE PRICE. The
aggregate Purchase Price payable by UNB for the UNB Shares shall
be the sum of the following:
(a) 135% of 50% of the cost of the equipment owned by
the Company on the date hereof, as listed on Schedule 1 hereof;
(b) less 135% of 50% of the cost of any equipment on
Schedule 1 which is lost, stolen, destroyed or disposed of by the
Company on or before the Closing, unless with respect to any
lost, stolen or destroyed equipment only, the equipment is
replaced with substantially similar equipment;
(c) plus 50% of the equipment purchased and paid for
by the Company after the date hereof and before the Closing with
the consent of UNB, which consent shall not be unreasonably
withheld.
SECTION 2.03. PAYMENT OF PURCHASE PRICE. UNB shall
pay HUBCO the Purchase Price by check or wire transfer, in the
sole discretion of UNB. UNB shall advise HUBCO in writing 5
Business Days prior to the Closing of the method by which UNB
shall pay the Purchase Price.
SECTION 2.04. CLOSING. (a) The Closing will take
place at 10:00 a.m. on a date to be specified by the parties
after satisfaction or waiver of the last of the conditions set
forth in Article III to be met to the satisfaction of, or waived
by, each party. The Closing shall occur at a place to be agreed
by the parties.
(b) At the Closing, (i) UNB shall pay to HUBCO the
Purchase Price by check or wire transfer, (ii) HUBCO shall
deliver to the Company stock certificates for 500 Shares for
transfer into the name of UNB, (iii) each party shall execute and
deliver each Operative Agreement to which it is a party that has
not previously been executed, and (iv) the Company shall deliver
to UNB stock certificates representing the UNB Shares registered
in the name of UNB.
SECTION 2.05. LEGENDS. Each stock certificate
evidencing the Initial Shares shall bear the following legends at
the time of issuance:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OFFERED
FOR SALE EXCEPT IN COMPLIANCE WITH SUCH ACT AND LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT
TRANSFERABLE, EXCEPT IN ACCORDANCE WITH THE PROCEDURES
AND RESTRICTIONS SET FORTH IN THE STOCK PURCHASE AND
STOCKHOLDER AGREEMENT DATED AS OF AUGUST , 1995,
AMONG THE CORPORATION, HUBCO, INC. AND UNITED NATIONAL
BANCORPORATION ("STOCKHOLDER AGREEMENT"), COPIES OF
WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION AND ARE AVAILABLE TO ANY HOLDER WITHOUT
CHARGE UPON WRITTEN REQUEST THEREFOR. ANY PURPORTED
TRANSFER IN VIOLATION OF SUCH RESTRICTIONS SHALL BE
VOID AND OF NO EFFECT. AS USED HEREIN, 'TRANSFER'
SHALL MEAN SALE, EXCHANGE, ASSIGNMENT, TRANSFER,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF ANY
INTEREST IN A SHARE EXCEPT BY OPERATION OF LAW IN
CONNECTION WITH A MERGER OR CONSOLIDATION OF THE
CORPORATION.
THE VOTING OF THE SECURITIES EVIDENCED BY THIS
CERTIFICATE IS SUBJECT TO THE PROVISIONS OF THE
STOCKHOLDER AGREEMENT.
ARTICLE III
CONDITIONS TO CLOSING
SECTION 3.01. CONDITIONS TO EACH PARTY'S OBLIGATIONS.
The obligations of UNB and HUBCO to purchase and sell the UNB
Shares and to enter into the other Operative Agreements to which
they are parties, are subject to the satisfaction or waiver, as
of the Closing Date, of the following conditions:
(a) GOVERNMENTAL APPROVALS. All governmental
approvals necessary for the consummation of the transactions
contemplated hereby (the "Transactions") shall have been obtained
and all waiting periods imposed by any governmental authority or
law shall have expired and any such approvals shall not impose
any burdensome condition.
(b) NO INJUNCTIONS OR LITIGATION. No injunction
restraining or preventing the consummation of the Transactions
shall be in effect, and no litigation shall be pending or
threatened by or before any governmental authority that would
restrain or prevent the consummation of the Transactions or
impose any burdensome condition.
(c) OTHER OPERATIVE AGREEMENTS. The parties to each
other Operative Agreement shall have entered into all such other
Operative Agreements, each of which shall be in full force and
effect (except each such other Operative Agreement may be
similarly conditioned on the entering into of all other Operative
Agreements).
(d) APPROVALS. All approvals of any third party
necessary for the consummation of the Transactions shall have
been obtained.
(e) EMPLOYMENT MATTERS. (i) UNB and HUBCO shall have
agreed upon the names and positions for all employees. Each
person designated by HUBCO and UNB as an initial employee of the
Company shall have accepted employment with the Company on
initial terms reasonably satisfactory to HUBCO and UNB and signed
standard non-disclosure agreements reasonably satisfactory to
HUBCO and UNB (which actions in each case may be conditional on
the Closing occurring).
(ii) The Company shall have established initial
policies requiring all employees of the Company to accept
terms of employment based upon standard non-disclosure
agreements reasonably satisfactory to HUBCO and UNB.
(iii) The Company shall have adopted initial
policies, reasonably satisfactory to HUBCO and UNB,
relating to relocation of employees, employee incentive
compensation and benefit plans.
(f) BUSINESS PLAN. The Company shall have approved
the initial Business Plan which shall provide, among other
things, that servicing to Hudson United Bank and United National
Bank under the Servicing Agreements shall be calculated on an
approximately break-even basis. The Business Plan shall have
been agreed to by UNB and HUBCO.
(g) EQUIPMENT. All of the equipment listed on
Schedule 1 and Schedule 1-L shall have been contributed to the
Company by HUBCO, without cost or obligation to the Company, and
all of such equipment shall be owned free and clear of any liens
or encumbrances by the Company.
(h) LICENSES. The licensor of the software licenses
used or to be used to provide servicing under the Servicing
Agreements shall have consented and agreed to permit the Company
to undertake the servicing contemplated hereby without
terminating the rights of Hudson United Bank and United National
Bank to be serviced separately.
SECTION 3.02. CONDITIONS TO HUBCO'S OBLIGATIONS. The
obligations of HUBCO to sell the HUBCO Shares and enter into the
Operative Agreements to which it is a party are subject to the
satisfaction (or waiver by HUBCO), as of the applicable Closing
Date, of the following additional conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company and UNB made in
each Operative Agreement shall be true and correct in all
material respects as of the Closing Date, as if made on and as of
the Closing Date.
(b) PERFORMANCE OF OBLIGATIONS. The Company and UNB
shall have performed or complied in all material respects with
their respective covenants and agreements contained in the
Operative Agreements required to be performed or complied with by
the Company or UNB on or prior to the Closing Date.
(c) DELIVERY OF COMPANY CERTIFICATES. The Company
shall have delivered to HUBCO the following (in each case dated
the Closing Date, unless otherwise indicated):
(i) a certificate of the Chief Executive Officer and
the Secretary of the Company to the effect that the
conditions specified in Sections 3.02(a) and 3.02(b) have
been satisfied with respect to the Company;
(ii) a certified copy of the Certificate of
Incorporation of the Company as filed with the Secretary of
the State of New Jersey, dated a recent date; and
(iii) such other certificates or documents as
HUBCO or its counsel may reasonably request relating to
the satisfaction of the conditions to the Closing and
as to which HUBCO shall have notified UNB at least 10
days prior to Closing.
(d) DELIVERY OF UNB CERTIFICATES. UNB shall have
delivered to HUBCO the following (in each case dated the Closing
Date, unless otherwise indicated):
(i) a certificate of an authorized signatory of
UNB to the effect that the conditions specified in
Sections 3.02(a) and 3.02(b) have been satisfied with
respect to UNB; and
(ii) such other certificates or documents as
HUBCO or its counsel may reasonably request relating to
the satisfaction of the conditions to the Closing and
as to which HUBCO shall have notified UNB at least 10
days prior to Closing.
(e) PROCEEDINGS SATISFACTORY. All corporate and legal
proceedings required to be taken by the Company and UNB in
connection with the Transactions and all documents and papers
relating to such transactions shall be reasonably satisfactory in
form and substance to HUBCO and its counsel, and HUBCO shall have
received all such certified or other copies of all such documents
as HUBCO or its counsel shall reasonably require.
SECTION 3.03. CONDITIONS TO UNB'S OBLIGATIONS. The
obligations of UNB to purchase and pay for the UNB Shares and
enter into the Operative Agreements to which it is a party are
subject to the satisfaction (or waiver by UNB), as of the Closing
Date, of the following additional conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company and HUBCO made in
each Operative Agreement shall be true and correct in all
material respects as of the Closing Date, as if made on and as of
the Closing Date.
(b) PERFORMANCE OF OBLIGATIONS. The Company and HUBCO
shall have performed or complied with in all material respects
their respective covenants and agreements contained in the
Operative Agreements required to be performed or complied with by
the Company or HUBCO on or prior to the Closing Date.
(c) DELIVERY OF COMPANY CERTIFICATES. The Company
shall have delivered to UNB the following:
(i) the documents referred to in Sections 3.02(c)(i)-
(iii); and
(ii) such other certificates or documents as UNB or
its counsel may reasonably request relating to the
satisfaction of the conditions to the applicable Closing and
as to which UNB shall have notified the Company at least 10
days prior to Closing.
(d) DELIVERY OF HUBCO CERTIFICATES. HUBCO shall have
delivered to UNB the following (in each case dated the Closing
Date, unless otherwise indicated):
(i) a certificate of an authorized signatory of HUBCO
to the effect that the conditions specified in Sections
3.03(a) and 3.03(b) have been satisfied with respect to
HUBCO; and
(ii) such other certificates or documents as UNB or
its counsel may reasonably request relating to the
satisfaction of the conditions to the Closing and as to
which UNB shall have notified HUBCO at least 10 days prior
to Closing.
(e) PROCEEDING SATISFACTORY. All corporate and legal
proceedings required to be taken by the Company and HUBCO in
connection with the Transactions and all documents and papers
relating to such transactions shall be reasonably satisfactory in
form and substance to UNB and its counsel, and UNB shall have
received all such certified or other copies of all such documents
as UNB or its counsel shall reasonably require.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY. The Company hereby represents and warrants to UNB, on
the date hereof and on and as of the Closing Date, as follows:
(a) ORGANIZATION AND STANDING OF THE COMPANY. The
Company:
(i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of New
Jersey;
(ii) has all requisite corporate power and authority
and possesses all permits and approvals from governmental
authorities necessary to enable it to own, lease or
otherwise hold its properties and assets and to carry on its
business as contemplated by the Business Plan; and
(iii) is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where
it is required by the nature of its business as contemplated
by the Business Plan to be so qualified.
(b) AUTHORITY. The Company has all requisite
corporate power and authority to enter into this Agreement and
the other Operative Agreements and to consummate the
Transactions. The execution and delivery by the Company of this
Agreement and the other Operative Agreements and the consummation
by the Company of the Transactions have been duly authorized by
all necessary corporate action on the part of the Company. This
Agreement and the other Operative Agreements have been, or will
at the Closing have been, duly executed and delivered by the
Company and constitute, or will at the Closing constitute, legal,
valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms. The
execution and delivery by the Company of this Agreement and the
other Operative Documents do not and did not, and the
consummation of the Transactions and compliance with the terms of
the Operative Agreements will not, conflict with, result in any
violation of or default (with or without notice or lapse of time
or both) under, give rise to a right of termination, cancellation
or acceleration of any material obligation or to the loss of any
material benefit under or result in or require the creation,
imposition or extension of any lien or encumbrance upon any of
the properties or assets of the Company under (i) any contract,
(ii) any provision of the Certificate of Incorporation or By-laws
of the Company or (iii) any judgment or law. No governmental
approval or approval of any other Person is required to be
obtained or made by the Company in connection with the execution
and delivery of this Agreement or the other Operative Agreement
or the consummation of the Transactions.
(c) CAPITALIZATION OF THE COMPANY. Immediately prior
to the Closing, the authorized capital of the Company shall
consist of: 1,000 shares of Common Stock, of which 1,000 Shares
will be issued and outstanding as of the Closing Date and held by
HUBCO. The outstanding Shares have been duly authorized and
validly issued (including, without limitation, issued in
compliance with applicable federal and state securities laws),
fully-paid and non-assessable. The Company is not authorized to
issue preferred shares and there are no outstanding warrants,
options, conversion privileges, preemptive rights or other rights
or agreements to purchase or otherwise acquire or issue any
equity securities of the Company, nor has the issuance of any of
the aforesaid rights to acquire securities of the Company been
authorized. The Company is not a party or subject to any
agreement or understanding and, to the Company's knowledge, there
is no agreement or understanding between any persons and/or
entities, which affects or relates to the voting or giving of
written consents with respect to any security other than as set
forth in this Agreement.
(d) LITIGATION. There is no action, proceeding or
investigation pending against the Company, or threatened, or any
basis therefor known to the Company. There is no judgment,
decree or order of any court in effect against the Company, and
the Company is not in default with respect to any order of any
governmental authority to which the Company is a party or by
which it is bound. There is no action, suit, proceeding or
investigation by the Company currently pending or which the
Company presently intends to initiate. The Company is not aware
of any pending or threatened claims against the Company.
(e) EQUIPMENT OWNED AND LEASED; TITLE TO PROPERTIES;
LIENS AND ENCUMBRANCES. Schedule 1 lists all of the items of
equipment (including hardware and software) owned by the Company,
identifies the equipment and lists its original cost and
acquisition date. Schedule 1-L lists all of the equipment leased
by the Company, identifies the equipment, shows the lease term
and shows the periodic costs and provides the information for
such equipment as would be listed on Schedule 1. All of the
equipment on Schedule 1-L as of the Closing has been transferred
to the Company, free and clear of all liens and encumbrances,
including the encumbrance of any leases. All of the information
on Schedule 1 and Schedule 1-L is correct, complete and accurate.
The Company has good and marketable title to all of its
properties and assets, both real and personal, and has good title
to all its leasehold interests, in each case subject to no
mortgage, pledge, lien, security interest, conditional sale
agreement, encumbrance or charge, other than the lien of current
taxes not yet due and payable.
(f) TAXES. All federal, state, local and foreign tax
returns required to be filed by the Company have been filed and
are true in all material respects, and all taxes, assessments,
fees and other governmental charges upon the Company, or upon any
of its properties, income or franchises, shown in such returns to
be due and payable have been paid. The Company has accrued on
its books any taxes not yet due and payable.
(g) DESCRIPTION OF COMPANY'S BUSINESS. The Company's
business is as described on Schedule 3. The Company has all
necessary governmental permits and approvals to carry on such
business.
(h) INSURANCE. Schedule 2 lists all of the insurance
that will be maintained by the Company on and after the Closing.
The insurance listed on Schedule 2 is of a type and in an amount
which similarly situated businesses normally carry.
(i) PERMITS. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of
its business as now being conducted by it, the lack of which
would be material to the Company, and believes it can obtain,
without undue burden or expense, any similar authority for the
conduct of its business as planned to be conducted. The Company
is not in default in any material respect under any of such
franchises, permits, license or other similar authority.
(j) BALANCE SHEET. Schedule 4 contains a balance
sheet and income statement for the last fiscal quarter with
respect to the Company, prepared in accordance with GAAP. There
has been no material adverse change in such financial statements
since the last quarter and such statements are representative of
the financial condition of the Company in the last twelve months.
(k) LICENSES. Schedule 5 lists all of the licenses
used by the Company (or to be used) to perform any services under
the Servicing Agreements and, as of the Closing, the licensor
shall have consented to allow the Company to service Hudson
United Bank and United National Bank using such licenses.
(l) ENVIRONMENTAL ISSUES. To the best of the
Company's knowledge, information and belief, no toxic wastes,
pollutants asbestos, PCB's or other toxic substances are located
upon or beneath any of the premises owned, leased, or operated,
in whole or in part, by the Company (the "Premises") nor has any
debris been buried beneath the surface of the Premises, nor has
the Company caused any such substances to be located upon or
beneath or buried beneath the surface of the Premises nor have
the Premises ever been used by the Company, any tenant or any
other person at any time, whether or not during the term of any
lease or ownership by the Company, to generate, refine, produce,
store, handle, transfer, process or transport any "Hazardous
Substance" or "Hazardous Waste", as such terms are defined in
N.J.S.A. 58:10-23.11.(b)(k) and/or N.J.A.C. 7:1-3.3 and the
Premises will not have been, or be, so used by any party at any
time, nor has the Company or any other person caused, by action
or omission, the releasing, spilling, pumping, pouring, emitting,
emptying or dumping of such "Hazardous Substances" or "Hazardous
Wastes" into the waters of the State of New Jersey where damages
may have resulted to the lands, waters, fish, shellfish,
wildlife, biota, air or other resources owned, managed, held in
trust or otherwise controlled by the State of New Jersey. The
Company has received no notice of any outstanding violation of
any governmental law, rule, statute, ordinance or regulation
(including, but not limited to, environmental laws, rules,
statutes, ordinances or regulation) delivered at any time by or
on behalf of the Company in connection with the transactions
contemplated by this Agreement. HUBCO and the Company, jointly
and severally, agree to hold UNB harmless and indemnify it for
all losses, damages, and expenses incurred as a result of any
representation set forth herein not being true.
(m) FULL DISCLOSURE. The representations and
warranties of the Company contained in this Agreement, and the
other provisions of this Agreement, when read together, do not
contain any untrue statement of a material fact or omit any
material fact necessary to make the statements contained therein
or herein in view of the circumstances under which they were made
not misleading.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF HUBCO
AND UNB. Each of HUBCO and UNB represents and warrants to each
other party that, as of the date of this Agreement and as of the
Closing date, with respect to itself:
(a) ORGANIZATION AND STANDING. Such party:
(i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of
its incorporation; and
(ii) has all requisite corporate power and corporate
authority necessary to enable it to use its corporate name
and to own, lease or otherwise hold its properties and
assets and to carry on its business as presently conducted.
(b) AUTHORITY. Such party has all requisite corporate
power and corporate authority to enter into this Agreement and
the other Operative Agreements to which it is a party and to
consummate the Transactions. The execution and delivery by such
party of this Agreement and the other Operative Agreements to
which it is a party and the consummation by such party of the
Transactions have been duly authorized by all necessary corporate
action on the part of such party. This Agreement and the other
Operative Agreements to which it is a party have been, or will at
the Closing have been, duly executed and delivered by such party
and constitute, or will at the Closing constitute, its legal,
valid and binding obligations, enforceable against such party in
accordance with their respective terms. The execution and
delivery by such party of this Agreement and the other Operative
Agreements to which it is a party do not and did not, and the
consummation of the Transactions and compliance with the terms of
the Operative Agreements to which it is a party will not,
conflict with, result in any violation of or default (with or
without notice or lapse of time or both) under, give rise to a
right of termination, cancellation or acceleration of any
material obligation or to the loss of any material benefit under
or result in or require the creation, imposition or extension of
any lien or other encumbrance upon any of its properties or
assets under (A) any contract, (B) any provision of its
constitutive documents or (C) any judgment or law, except, with
respect to clauses (A) or (C), for such conflicts, violations,
defaults, rights or losses that, individually or in the
aggregate, would not have a material adverse effect on such
party's ability to perform its obligations under this Agreement
and the other Operative Agreements to which it is a party in
accordance with their respective terms. No governmental
approval, approval or consent of any other person is required to
be obtained or made by such party or any of its Affiliates in
connection with the execution and delivery of this Agreement or
the other Operative Agreements to which it is a party or the
consummation of the Transactions, except for (i) the approval of
the FRB for UNB to purchase the UNB Shares and to enter into this
Agreement and the other Operative Agreements; and (ii) the
approval of the FRB for HUBCO to sell to UNB the UNB Shares and
to enter into this Agreement and the other Operative Agreements.
(c) BROKERS OR FINDERS. No Person is or will be
entitled to any broker's or finder's fee or any other commission
or similar fee from such party in connection with any of the
Transactions.
(d) SECURITIES ACT. The Initial Shares when purchased
by such party pursuant to this Agreement or otherwise were, or
are being, acquired for its own account for the purpose of
investment only and not with a view to any public distribution
thereof. Such party is an "accredited investor" within the
meaning of Rule 501 under the Securities Act.
(e) SOURCE OF FUNDS. Such party will not acquire the
Initial Shares to be purchased by it with the assets of any
"employee benefit plan" as defined in ERISA.
(f) LABOR RELATIONS. With respect to any employees of
such party who have or will accept employment with the Company in
accordance with Sections 3.01(d) and 6.03, there is no existing
collective bargaining agreement with a labor union covering such
employee and no other contract, agreement, suit or claim (or
basis therefore) between the current employer and the employee,
except for the employee confidentiality agreements attached
hereto as Exhibit F.
ARTICLE V
COVENANTS OF THE PARTIES PENDING THE CLOSING
SECTION 5.01. COVENANTS PENDING THE CLOSING. (a)
From the date of this Agreement to the Closing Date, each party
agrees (except (i) as expressly contemplated by this Agreement,
or (ii) to the extent that the other parties shall otherwise
consent in writing) that such party shall carry on its respective
business (to the extent that it relates to the Transactions only)
in the usual, regular and ordinary course in substantially the
same manner as heretofore conducted.
(b) Each party shall take all actions reasonably
necessary or appropriate to ensure that the conditions to Closing
set forth herein to be satisfied by such party are satisfied on
or prior to the Closing Date and to obtain (and cooperate with
the other parties in obtaining) the governmental approvals
required to be obtained or made by it in connection with any of
the Transactions, except that such party shall not be required to
accept or comply with any Burdensome Condition. Each party shall
afford to the other parties and their representatives access to
properties, books and records relating to the Company and to the
Transactions, subject to appropriate confidentiality
restrictions, sufficient to permit such other parties to perform
adequately their due diligence and business reviews.
SECTION 5.02. CONSTITUTIVE DOCUMENTS. The Company
shall have as its Certificate of Incorporation Exhibit D, but
reflecting a name change to United Financial Services, Inc. or
(if such name is unavailable) a name mutually agreed to by HUBCO
and UNB, and (ii) have adopted as its By-laws the By-laws
attached as Exhibit E, if not already adopted.
ARTICLE VI
CONTINUING COVENANTS OF THE COMPANY
SECTION 6.01. FINANCIAL STATEMENTS. So long as HUBCO
and UNB own Shares of the Company, the Company shall deliver to
each of UNB and HUBCO:
(i) as soon as practicable following the end of each
fiscal year (and in any event not later than 60 days after
the end of such fiscal year), consolidated statements of
income, changes in stockholders' equity and cash flows of
the Company for such year and a consolidated balance sheet
of the Company as at the end of such year, together with
appropriate notes to such financial statements, in each case
setting forth in comparative form the corresponding figures
for the preceding fiscal year and from the budget for the
fiscal year then ended, together with an opinion directed to
the Company of independent public accountants to the effect
that such financial statements have been prepared in
conformity with GAAP applied on a basis consistent with
prior years;
(ii) as soon as practicable following the end of each
fiscal quarter (and in any event not later than 15 days
after the end of such fiscal quarter), consolidated
statements of income and cash flows of the Company for such
fiscal quarter and for the period from the beginning of the
then current fiscal year to the end of such fiscal quarter
and a consolidated balance sheet of the Company as at the
end of such fiscal quarter, in each case setting forth in
comparative form the corresponding figures for the
corresponding periods in the preceding fiscal year and from
the budget for such fiscal quarter and the then current
fiscal year to date, all in reasonable detail and
accompanied by a certificate from the principal accounting
or financial officer of the Company to the effect that such
financial statements have been prepared under such officer's
supervision and that, although such financial statements do
not contain the footnotes and other disclosures required to
be presented in interim financial statements by GAAP, such
financial statements have been prepared in accordance with
GAAP.
SECTION 6.02. BUSINESS PLAN. The Company, at the
Closing, and annually thereafter, shall adopt a Business Plan by
action of its Board of Directors. The initial Business Plan
shall (i) specify the charges to be made under the Servicing
Agreements, (ii) shall generally set forth that the servicing
charges under the Servicing Agreements have been calculated to be
sufficient to permit the Company to run at an approximately
break-even level or a slight profit, (iii) if there is a need for
additional funds to purchase new equipment to be used in the
business, the Board of Directors in its discretion may seek to
have HUBCO and UNB contribute new capital in proportion to their
Share ownership or create a cash reserve from servicing charges
(and take into account such need for additional cash in setting
servicing charges). The Company shall at all times conduct its
business and affairs in a manner substantially consistent with
the Business Plan. If at any time the Company does not have a
Business Plan, the Company shall conduct its business and affairs
in a manner substantially consistent with the Business Plan in
effect for the most recent fiscal year for which the Company had
a Business Plan.
SECTION 6.03. EMPLOYEE MATTERS. (a) Immediately
following the Closing, the Company will make offers of employment
to such employees of HUBCO and UNB as HUBCO and UNB shall agree
and specify to the Company prior to the Closing Date. Such
offers shall expire after 30 days if not previously accepted.
The initial terms of employment by the Company of such employees
shall be set by the Company with the prior approval of HUBCO and
UNB. HUBCO and UNB will each use its best efforts (which shall
neither require nor preclude the provision of financial
incentives) to encourage its respective specified employees to
accept employment with the Company.
(b) After the Closing, HUBCO or UNB may from time to
time provide the Company with the names of employees of such
party the employment of whom by the Company such party believes
would be advantageous to the Company. The Company shall be
responsible for decisions regarding the employment by the Company
of such employees. HUBCO and UNB will each use its best efforts
(which shall neither require nor preclude the provision of
financial incentives) to encourage its respective named employees
to accept employment with the Company.
(c) The parties acknowledge that the Company is the
sole employer of its employees. Subject to the express terms of
this Agreement and the Amended Certificate, the Company will be
solely responsible for administering the employment relationship
between itself and all its employees. This responsibility shall
include the establishment and administration of personnel
policies and practices, supervision, assignment of work, hiring,
training, discipline and performance reviews, benefits,
compensation, other conditions of employment and termination of
employment. The term "employee" as used herein does not include
independent contractors, employees of independent contractors or
temporary employment agency employees.
(d) Each employee shall be required to sign an
employee confidentiality agreement which shall insure that
financial and customer information for each customer of the
Company shall remain confidential and not be shared with any
other customer or person.
SECTION 6.04. APPOINTMENT OF OFFICERS. Immediately
prior to or at the Closing, the Company shall act to appoint as
officers of the Company the persons agreed to by UNB and HUBCO
and such officers may thereafter be removed or changed by the
Board of Directors of the Company.
SECTION 6.05. COMPLIANCE WITH LAW; BHC LIMITATIONS.
The Company shall operate its business in compliance with all
applicable laws and regulations and shall observe and comply with
any limitations imposed upon the activities of a bank holding
company or its subsidiaries by Regulation Y of the FRB, which the
Company hereby agrees is applicable unless notified in writing to
the contrary by the FRB or provided with a written opinion of
legal counsel to the Company.
ARTICLE VII
CONTINUING COVENANTS OF HUBCO AND UNB
SECTION 7.01. APPOINTMENT OF DIRECTORS; VOTING OF
SHARES. (a) Except as provided in Section 7.02, in each
election of directors of the Company (whether at a meeting or by
written consent in lieu of a meeting) HUBCO and UNB shall each
vote or cause to be voted all Shares beneficially owned by it,
and otherwise use its respective best efforts, so as to elect as
the Directors (i) three persons selected in writing by HUBCO and
(ii) three persons selected in writing by UNB.
(b) Unless waived in writing, the Company shall
provide HUBCO and UNB with not less than 15 days prior written
notice of any intended mailing of notice to stockholders of the
Company for a meeting at which directors are to be elected.
(c) If any director shall cease to be a director of
the Company, HUBCO and UNB shall each vote or cause to be voted
all Shares beneficially owned by it to immediately replace such
person with a nominee selected by the party who selected the
former director.
(d) If HUBCO or UNB fails or refuses to vote its
Shares as required by, or votes its shares in contravention of
this Section, the other shall have an irrevocable proxy pursuant
to Section 5-19 of the BCA, coupled with an interest, so as to
vote such Shares in accordance with this Section, and HUBCO and
UNB each hereby grants to the other such irrevocable proxy.
(e) This Section shall terminate upon the earliest of
(i) the fifteenth anniversary of the Closing Date or (ii) if
HUBCO or UNB cease to beneficially own Shares in the Company.
SECTION 7.02. ELECTION OF DIRECTORS AFTER A CHANGE OF
CONTROL. If there is a Change of Control affecting HUBCO or UNB,
the shareholder of the Company not undergoing a Change of Control
shall be entitled to elect four of the six directors of the
Company commencing immediately upon the date of the Change of
Control. The Company shall hold a stockholder's meeting
immediately following the Change of Control to effectuate such
election or the shareholders shall act by unanimous written
consent. If the subsidiary of the shareholder undergoing the
Change of Control terminates its Servicing Agreement in
connection with the Change of Control, then after the effective
date of such termination, all six directors of the Company shall
be elected solely by the shareholder not affected by the Change
of Control. A subsequent Change of Control affecting the
shareholder then entitled to elect four (or six) of the directors
shall not deprive such shareholder of its rights hereunder. All
of the provisions of Section 7.01, other than Section 7.01(9),
shall apply to this Section 7.02, as if set forth in this Section
7.02.
SECTION 7.03. RESTRICTIONS ON DISPOSAL OF VOTING
SECURITIES BY HUBCO AND UNB. (a) Any purported Disposal of
Voting Securities in violation of this Section shall be void and
of no effect. This Section shall not apply to a Transfer of
Shares pursuant to Section 7.04.
(b) HUBCO and UNB may not Dispose of any Shares of the
Company otherwise than in compliance with the Securities Act and
all other applicable Laws.
(c) HUBCO and UNB may not Dispose of any Shares of the
Company without the prior written consent of the other, except as
set forth in paragraph (d).
(d) After the fifth anniversary of the Closing, HUBCO
or UNB (the "Transferring Holder") may transfer any Shares for
cash, and only for cash, pursuant to the terms of this paragraph
(d). The Transferring Holder must first give the other party 30
days prior written notice of its intention to Transfer for cash
any Shares, identifying the proposed transferee and specifying
all proposed terms of the Transfer. The notice shall be
accompanied by a copy of a bona fide written proposal by a third
party to purchase shares. Such written notice shall constitute
an offer by the Transferring Holder to the other, irrevocable for
30 days, to sell all (but not less than all) the Shares to the
other party. Within 30 days after receipt of the notice the
receiving party shall give an irrevocable written notice to the
Transferring Holder whether (i) such other party consents to the
proposed Transfer or (ii) such other party elects to purchase the
Shares so offered for the same price as that specified in the
notice. If such other party fails to give such a notice by the
end of such 30 day period, such other party shall be deemed to
have consented to the proposed Transfer. If such other party
expressly consents to the Transfer or consents to the Transfer by
failure to give such notice within 30 days, the Transferring
Holder shall have the right, exercisable not later than 120 days
after the date of giving the original written notice, to sell the
Shares to the proposed transferee on the terms set forth in the
notice. Neither HUBCO nor UNB may Transfer any Shares to a third
party unless the proposed buyer shall have (A) agreed in writing
to be bound by this Section 7.03 with respect to subsequent
Transfers and (B) acknowledged in writing its understanding and
acceptance of the other applicable terms hereof. The closing of
any purchase and sale of Shares to HUBCO or UNB pursuant to this
paragraph shall take place within 30 days of the receipt by the
Transferring Holder of the acceptance of the offer. At any such
closing, (i) the Transferring Holder shall deliver to the
purchaser certificates representing the Shares being purchased,
and duly endorsed in favor of the purchaser, against payment of
the applicable purchase price by wire transfer of same day funds
and (ii) the Transferring Holder shall give customary
representations and warranties.
SECTION 7.04. BUY-OUT PROVISIONS. (a) If (i) HUBCO
holds any Shares and a Change of Control of UNB occurs, (ii) UNB
holds any Shares and a Change of Control of HUBCO occurs or (iii)
more than three years shall have passed since the Closing, HUBCO
continues to hold Shares and UNB continues to hold Shares and
either HUBCO or UNB elects to utilize this Section, or (iv) HUB
and UNB continue to hold the Initial Shares and have reached a
disagreement and such disagreement shall not have been resolved
within a 60-day period and the two CEOs shall have agreed that an
impasse is declared with respect to such matter, then either
HUBCO or UNB may utilize the buy-out provisions of this Section.
(b) If any of the events set forth in (a) have
occurred and the only servicing that the Company is undertaking
is for Hudson United Bank and United National Bank, either party
may request that the other party purchase its shares for cost.
"Cost" shall mean the cost of the shares to UNB on the Closing of
this Agreement. In the event either party exercises this right,
the party purchasing these shares shall receive representations
from the other party that are typical in such a situation and
shall have the benefit of all existing Operative Agreements.
However, the party whose shares have been purchased may terminate
the Servicing Agreement in accordance with the terms thereof, by
terminating the service on one year's notice and paying a six
month termination fee and the Company lease may also be
terminated on one year's prior notice by the party terminating
the Agreement. A Closing shall be held on such time and date as
the parties shall agree.
If the Company is servicing another bank or financial
institution, at the time a party offers to sell its shares under
the provisions of Section 1, then the following rules shall apply
within ten business days of a written notice from the other party
that it is offering to sell its shares, HUBCO and UNB shall each
elect an independent appraiser, nationally recognized as
qualified to appraise data processing businesses, each of whom
shall deliver an appraisal of Fair Market Value to an independent
person (to be agreed by HUBCO and UNB and, in the absence of such
agreement, the independent accountants of the Company) within 20
Business Days of its selection as an appraiser. If the higher
appraisal is more than 20% greater than the lower appraisal, the
independent person shall notify HUBCO and UNB and each appraiser
of that fact (but not of the amounts). In such a case, the two
appraisers shall within 10 Business Days of such notification
from the independent person agree on a third independent
appraiser nationally recognized as qualified to appraise
businesses in the data processing industry, who shall deliver its
appraisal of Fair Market Value to the Independent person within
20 Business Days of the selection of such third appraiser, and
Fair Market Value shall be the median of the three appraisals.
If the higher of the first two appraisals is not more than 20%
greater than the lower of the first two appraisals, Fair Market
Value shall be the arithmetic mean of the first two appraisals
and there shall not be any third appraisal. The independent
person shall promptly give written notice of Fair Market Value to
each of HUBCO and UNB.
HUBCO and UNB shall each submit a sealed notice (a
"Notice") to the independent person within 30 days of the
determination of Fair Market Value, stating that such party will
or will not purchase for cash all the Shares owned by the other
at the percentage of Fair Market Value represented by such
Shares. Upon receipt of both HUBCO's and UNB's Notice, and in
any event no later than the end of such 30 day period, the
independent person shall give written notice to HUBCO and UNB of
the contents of each written notice to HUBCO and UNB of the
Notice received by the independent person.
If one party states in its Notice that it will purchase
and the other states in its Notice that it will not purchase (or
fails to submit a Notice within the 30 day period), the former
will purchase all the Shares owned by the latter, and the latter
will sell all such Shares to the former, at the percentage of
Fair Market Value represented by such Shares.
If HUBCO and UNB each state in its respective Notice
that it will purchase, the party who first requested the buyout
shall sell all the Shares owned by it to the other, and the other
party shall purchase all such Shares, at the percentage of Fair
Market Value represented by such Shares.
If HUBCO and UNB each state in its respective Notice
that it will not purchase, then the party that first requested
the buy-out shall purchase the Shares of the other.
(c) The closing of any purchase and sale of Shares
pursuant to the Section shall take place on the date and at the
location designated by the purchaser in a written notice to the
seller. Such date shall not be more than 30 nor less than 10
days after the date on which the obligations under this Section
to purchase and sell such Shares arose, except that such 30 day
period shall be extended as necessary in order to comply with any
applicable law. At any such closing, (i) the seller shall
deliver to the purchaser certificates representing all Shares
owned by the seller, duly endorsed in favor of the purchaser,
against payment of the applicable purchase price by wire transfer
of same day funds and (ii) the seller shall give customary
representations and warranties comparable to those contained in
this Agreement relating to absence of liens and the purchaser
shall give customary representations and warranties as contained
in this Agreement.
(d) If the buy-out occurs by reason of a Change of
Control of HUBCO or UNB, such party shall pay all costs of the
appraisals and any related court proceedings incurred by the
other party in enforcing this Agreement. Otherwise, HUBCO and
UNB will pay all costs of the appraisals on an equal basis and
each shall bear its own costs.
SECTION 7.05. NOTICE OF CHANGE OF CONTROL. HUBCO and
UNB shall notify the other parties promptly upon the occurrence
of a Change of Control of such party (but not later than 30 days
after the earlier of (i) the occurrence of, or (ii) the execution
of an agreement, the consummation of which will result in, a
Change of Control). The obligations of HUBCO or UNB under this
Section shall terminate upon the other ceasing to own Shares.
SECTION 7.06. HUBCO INDEMNIFICATION. HUBCO shall
indemnify and hold harmless the Company from (i) any loss,
expense (including reasonable attorneys fees), damage, claim or
suit arising out of the activities or business operations of the
Company prior to the Closing (but not for any activities or
business operations thereafter), (ii) any liability not disclosed
on the balance sheet of the Company annexed hereto as Schedule 4
and (iii) any sales tax or use tax incurred by the Company on or
prior to the Closing or in connection with the transfer of the
equipment on Schedule 1 or Schedule 1-L to the Company. UNB
shall have the right to enforce this provision on behalf of the
Company if the Company fails to do so. The obligation of HUBCO
under this Section shall expire two years after the Closing
except with respect to any claims made by the Company (or UNB)
against HUBCO prior to the expiration of such two year period.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. TERMINATION. This Agreement may be
terminated prior to the Closing (but not thereafter):
(a) By mutual written consent of the parties hereto.
(b) By UNB if there shall have occurred a material
adverse change in the business, operations, assets, or financial
condition of the Company from that disclosed by the Company on
the date of this Agreement.
(c) By HUBCO or UNB if any condition to Closing
specified under Article III hereof applicable to such party
cannot reasonably be met after giving the other party a
reasonable opportunity to cure any such condition.
SECTION 8.02. EFFECT OF TERMINATION. In the event of
the termination and abandonment of this Agreement by either HUBCO
or UNB pursuant to Section 8.01, this Agreement shall forthwith
become void and have no effect, without any liability on the part
of any party or its officers, directors or stockholders, except
as provided in Section 9.01. Nothing contained herein, however,
shall relieve any party from any liability for any breach of this
Agreement.
SECTION 8.03. AMENDMENT. This Agreement may be
amended by mutual agreement of the parties. This Agreement may
not be amended except by an instrument in writing signed on
behalf of HUBCO, UNB and the Company.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. EXPENSES. 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, except that the costs of Pitney, Hardin,
Kipp & Szuch shall be borne by the Company or one-half by each of
UNB and HUBCO. In the event that this Agreement is terminated
pursuant to Section 8.01, each of UNB and HUBCO shall bear 50% of
the costs of Pitney, Hardin, Kipp & Szuch and 50% of the loss
incurred by the Company upon ordering equipment, attributable to
the anticipated servicing of United National Bank.
SECTION 9.02. NOTICES. All notices or other
communications which are required or permitted hereunder shall be
in writing and sufficient if delivered personally or sent by
telecopier with confirming copy sent the same day by registered
or certified mail, postage prepaid, as follows:
(a) If to HUBCO, to:
HUBCO, Inc.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Attn.: Mr. Kenneth T. Neilson
President and Chief Executive Officer
Telecopier No. 201-236-2649
Copy to:
Hudson United Bank
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Attn: D. Lynn Van Borkulo-Nuzzo, Esq.
Telecopier No. 201-236-2649
(b) If to UNB, to:
United National Bancorp
1130 Route 22 East
Bridgewater, NJ 08807
Attn: Thomas C. Gregor
Chairman, President and CEO
Telecopier No. 908-429-0357
Copy to:
United National Bancorp
1130 Route 22 East
Bridgewater, NJ 08807
Attn: Ralph L. Straw, Esq.
Telecopier No. 908-707-8247
(c) If to Company, copy to:
Pitney, Hardin, Kipp & Szuch
Delivery:
200 Campus Drive
Florham Park, New Jersey 07932
Mail:
P.O. Box 1945
Morristown, New Jersey 07962-1945
Attn.: Ronald H. Janis, Esq.
Telecopier No. (201) 966-1550
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 so delivered or telecopied and
mailed.
SECTION 9.03. PARTIES IN INTEREST. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted
assigns. No assignment of this Agreement may be made except upon
the written consent of the other parties hereto. 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.
SECTION 9.04. SURVIVAL OF WARRANTIES. The
representations, warranties and covenants of the parties
contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing;
provided, however, that the representations and warranties need
only be accurate as of the date of such execution and delivery
and as of the Closing.
SECTION 9.05. ENTIRE AGREEMENT. This Agreement, which
includes the Exhibits and 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.
SECTION 9.06. 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.
SECTION 9.07. GOVERNING LAW. This Agreement shall be
governed by the laws of the State of New Jersey and the United
States of America, as applicable, without giving effect to the
principles of conflicts of laws thereof.
SECTION 9.08. 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, UNB, HUBCO and the Company have
caused this Agreement to be executed by their duly authorized
officers as of the day and year first above written.
ATTEST: HUBCO, INC.
By: /s/ CHRISTINA L. MAIER By: /s/ D. LYNN VAN BORKULO-NUZZO
---------------------- -----------------------------
D. Lynn Van Borkulo-Nuzzo
Executive Vice President
ATTEST: UNITED NATIONAL BANCORPORATION
By: /s/ DONALD L. MALWITZ By: /s/ THOMAS C. GREGOR
--------------------- -----------------------------
Donald L. Malwitz, Treasurer Thomas C. Gregor, President
ATTEST: HUB FINANCIAL SERVICES, INC.
By: /s/ D. LYNN VAN BORKULO-NUZZO By: /s/ JAMES McDONALD
----------------------------- -----------------------------
Secretary James McDonald, Vice President
Exhibit 99.3
EXHIBIT A
DATA PROCESSING SERVICE AND
CLEARING AGENCY AGREEMENT
This Agreement is made this _____ day of ___________, 1995,
between ______________ (hereinafter the "Bank"), having its
principal place of business at ____________________________,
________________________, New Jersey _____, and HUB Financial
Services, Inc. (hereinafter "HFSI"), having its principal place
of business at 1000 MacArthur Blvd., Mahwah, New Jersey 07430.
WHEREAS, the Bank is a commercial bank, and desires to
obtain data processing and check-clearing services, and,
WHEREAS, HFSI is a New Jersey corporation capable of
providing the desired services,
NOW THEREFORE, it is hereby agreed:
I. SCOPE OF SERVICES
A) DATA PROCESSING
1. HFSI agrees to provide overnight data processing
services on the D-3000 system for all deposit accounts, loan
records, mortgage records, general ledger accounts, standard
collection screens, and CIF.
All work will be processed in the order in which it is
received on a first-come, first-serve basis. The services
to be provided shall include:
* Encoding of foreign items to be included in the
outgoing cash letter.
* Updating of individual account records.
* Computer imaging of all items processed to be
retained on behalf of the Bank for the time period
required by state and federal regulation.
* Production of daily reports to be delivered to the
Bank not later than 10:00 a.m. on each day except
Saturday, Sunday, or a legal holiday.
* Access to account information via CRTs, with cost
of CRTs to be borne by the Bank.
* Interface to D-3000 general ledger.
* Other reports to be generated for each record type
on a mutually-agreed basis.
* Periodic statements to be generated for each
account requiring a statement.
* Calculate interest.
* Tax year IRS reporting.
2. The Bank agrees to deliver all work to HFSI's Data
Processing Center located at 1000 MacArthur Blvd., Mahwah,
New Jersey, periodically throughout each work day in the
following manner:
* To the maximum extent practical, in batches not to
exceed 100 items, unless a single deposit exceeds
100 items.
* In accordance with instructions received from
HFSI.
B) CHECK CLEARING
1. HFSI agrees to act as an agent and attorney-
in-fact for the Bank and provide inclearing and
outgoing services:
* Endorse all items as Bank of First Deposit in the
name of the Bank.
* Batch and prepare daily cash letters.
* Present all checks for clearing through East
Rutherford Operations Center ("EROC") of Federal
Reserve Bank, or other expedited method.
* Notify depository banks of outgoing returns over
$2,500, expeditiously in accordance with
Regulation CC.
* Receive from the Bank notification of returns
received by the Bank and follow instructions of
the Bank with regard to such returns.
* Notify bank of first deposit promptly of all
outgoing return items over $2,500.
* Handle all return items in accordance with
instructions from the Bank.
* Comply with Regulation CC for timeliness of check
processing.
* Exception item processing as instructed by Bank.
* Process electronic funds transfers as requested
pursuant to the Bank's instructions.
* Produce imaged items for each checking account
statement.
* Provide Imaged statements.
2. The Bank hereby appoints HFSI as its agent and
attorney-in-fact for purposes of performing check clearing
functions, and agrees with HFSI to:
* Deliver as soon as possible all daily work to
HFSI's Transit Area and in any event not later
than 6:30 p.m. local time on each work day.
* Notify HFSI of any changes in the Bank's policy on
Funds Availability.
* Give timely instruction to HFSI with regard to
return items, such instruction shall not be later
than 12:00 Noon of the day in which the item must
be processed.
* The Bank shall be responsible for promptly
reviewing reports on unapplied items and research
them for prompt disposition by the Bank.
C) Other Reports and Services may be provided as
mutually agreed.
II. PROGRAMMING CHANGES
"Custom" programming services will not be provided by HFSI,
other than custom changes already utilized by the Bank or future
custom changes agreed to by HFSI. The Bank represents that it
has reviewed the programs to be provided by HFSI and has
determined them to be sufficient for the Bank's purposes.
The Bank may revise the products and services offered, the
method of operations and documentation used. HFSI will use "best
efforts" to make enhancements necessary to comply promptly within
existing program parameters.
HFSI will use its best efforts (i) to comply with mandatory
Federal and New Jersey law and regulations and (ii) make required
enhancements or program changes in a timely manner to conform to
Federal or state law or regulation, at no cost to the Bank.
III. FEES
A) CONVERSION FEES. The Bank agrees to pay HFSI a
conversion fee of $0. This conversion fee shall
include the cost of conversion consultants and the cost
of converting existing records to HFSI's data
processing system.
B) DATA PROCESSING FEES. The Bank agrees to pay for
the services hereunder in accordance with the fees on
Schedule "A" attached hereto and any changes which may
be made to Schedule A and are in effect from time to
time.
HFSI shall have the right to change the fees
charged on Schedule A at any time with the prior
written consent of the Bank and shall have the right to
change the fees charged on Schedule A at least once
each calendar year without the consent of the Bank.
HFSI agrees to notify the Bank of any fee changes at
least 30 days prior to the effective date of the
change, unless the changes shall be as mutually agreed
in writing. Any change in Schedule A shall be applied
to both Hudson United Bank and United National Bank.
C) OTHER COSTS TO BE PAID BY THE BANK
1. The Bank agrees to pay for the cost of CRT's,
modems, printers, telephone line charges, ATM's, data
lines, and any other cost associated with direct access
to computer records.
2. The Bank agrees to pay for any envelopes, forms or
other stationery items to be specifically imprinted to
identify the Bank. Such items shall be ordered by HFSI.
3. HFSI agrees to mail all customer statements,
correspondence and reports, but the Bank shall pay the cost
of postage.
4. Micro fiche will be provided to the Bank, and the
Bank agrees to pay all costs incurred in processing the
micro fiche.
5. The Bank agrees to pay for transportation, delivery
or mailing of reports, records and other materials provided
under this Agreement.
D) COSTS TO BE BORNE BY HFSI. HFSI shall provide, at no
additional cost, any stock paper, IRS forms, or other
stationery items not identifying the Bank specifically.
IV. CONFIDENTIALITY OF DATA
Both parties acknowledge that in connection with the
performing of its duties hereunder, it may be provided with, or
have access to, written information and data which is proprietary
to the other. Both parties agree to keep all such information
and data confidential, and shall not disclose anything, in whole
or in part, to any third party without the other party's prior
written consent, except, however, that HFSI may disclose
materials to a third party who is assisting HFSI with computer
programs or other work to be conducted under this Agreement,
provided HFSI takes reasonable steps to protect the
confidentiality of such data and information.
V. DUTY OF CARE
HFSI shall perform all services hereunder as it would for
its own accounts. Any failures by the Bank or HFSI to perform on
time will be reviewed periodically by the parties.
VI. TERM
This Agreement shall remain in full force and effect for a
period of five years from the date hereof (the "Term"). The Term
shall be automatically extended for an additional one year, each
year on the anniversary date hereof (so that the Term always
remains five years in length from the annual anniversary date)
unless written notification by either party to the other of its
intent not to renew, is given prior to the anniversary date.
This Agreement may be terminated upon the mutual written
consent of the parties.
Upon termination in accordance with the terms of this
Agreement, HFSI agrees to cooperate with the Bank in delivering
records in accordance with the Bank's instructions. HFSI shall
not be responsible for conversion of records to any other format,
nor shall HFSI be responsible for the creation of new records not
normally produced for the Bank.
VII. EARLY TERMINATION; BREACH
A) During the Term of this Agreement, HFSI shall be the
exclusive data processing agent for the Bank for the work
set forth in Section I(A)1 of this Agreement.
B) Notwithstanding the provisions hereof regarding the
Term, the Bank may terminate this Agreement prior to the end
of Term upon compliance with the following provisions:
(i) Prior to a Change of Control of the parent
company of the Bank (as the term Change of Control is
defined in the Stock Purchase and Stockholders
Agreement among HFSI, HUBCO, Inc. and United National
Bancorp (the "Stock Purchase Agreement")), the Bank may
terminate this Agreement on and after December 31, 1997
if (i) after December 31, 1997 the Bank gives HFSI 12
months prior written notice of the termination date,
and (ii) within three months of giving a termination
notice, the Bank agrees to pay and on the termination
date does pay to HFSI a termination fee equal to the
average fees paid (or payable, if not paid) by the Bank
during the six calendar months preceding the notice of
termination, and (iii) the parent company of the Bank
offers to sell (with a closing date on or before the
termination date) the shares of HFSI owned by it in
accordance with Section 7.04 of the Stock Purchase
Agreement.
(ii) After a Change of Control of the parent
company of the Bank (as the term Change of Control is
defined in the Stock Purchase Agreement), the Bank may
terminate this Agreement at any time if (i) the Bank
gives HFSI 12 months prior written notice of the
termination date, (ii) within three months of giving a
termination notice, the Bank agrees in writing to pay
and on the termination date does pay to HFSI a
termination fee equal to six times the average monthly
fees paid (or payable, if not paid) by the Bank to HFSI
for servicing by HFSI hereunder during the six calendar
months preceding the notice of termination, and (iii)
the parent company of the Bank offers to sell (with a
closing date on or before the termination date) the
shares of HFSI owned by it in accordance with Section
7.04 of the Stock Purchase Agreement.
C) After a Change of Control, the Bank may terminate this
Agreement only due to a material and persistent failure to
perform by HFSI, which conduct represents a gross departure
from the prior performance of HFSI hereunder, after prior
written notice of the failure to HFSI and a reasonable
opportunity for HFSI to cure such failure and then only if
the failure was not caused by the Bank or its parent or any
change in their conduct or needs. Prior to a Change of
Control, the Bank may terminate this Agreement only due to a
material and persistent failure to perform by HFSI after
prior written notice of the failure to HFSI and a reasonable
opportunity for HFSI to cure such failure. If this
Agreement is terminated by the Bank, or breached by the Bank
so as to constitute a termination prior to the end of Term,
except in accordance with the express provisions of
paragraphs (B) or (C) of Article VII, then the Bank shall be
obligated to pay HFSI (i) all of the fees it would have paid
to HFSI during the remainder of the Term (using as a measure
thereof, the average monthly fees paid by the Bank through
the termination date or date of breach) plus (ii) all of the
costs and expenses of HFSI in recovering such amounts,
including but not limited to, the legal fees and expenses
incurred by HFSI in seeking advice about and bringing any
legal action to enforce HFSI's rights hereunder.
VIII. INDEPENDENT CONTRACTOR
It is specifically agreed by the parties that the
relationship of HFSI to the Bank is that of an Independent
Contractor.
IX. NON-ASSIGNABILITY
This Agreement may not be assigned without the prior written
consent of the other party; provided, however, that a merger or
consolidation of the Bank shall not be deemed a transfer.
X. FORCE MAJEURE
Neither party shall be responsible for delays or failure in
performance resulting from acts beyond its control. Such acts
shall include, but not be limited to, Acts of God, strikes,
lockouts, riots, Acts of War, governmental regulation, fire,
earthquakes, or other disasters.
XI. HOURS OF OPERATION
HFSI will operate its data center for processing of work
during the following hours:
Continuous: 7:00 a.m. Monday to 8:00 a.m. Saturday
Other time, including holidays: On call by beeper for
emergency purposes.
HFSI reserves the right to close the center on legal
holidays.
XII. NOTICES
Any notices required hereunder shall be sent by certified
mail, return receipt requested, and shall be sent to the
following addresses until either party notifies the other, in
writing, of a Change in Notice address:
If to the Bank:
____________________
____________________
____________________
____________________
If to HFSI:
HUB Financial Services, Inc.
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
Attention: President
XIII. ENTIRE AGREEMENT
This Agreement and the attachments hereto constitute the
complete terms and conditions between the Bank and HFSI covering
performance hereunder.
Any modifications, supplements or terminations may be made
only by a written instrument executed by both parties.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey and the
United States of America, as applicable.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first appearing above.
ATTEST: [Bank]
______________________________ By:__________________________
Secretary/Cashier Executive Vice President
ATTEST: HUB FINANCIAL SERVICES, INC.
______________________________ By:__________________________
Secretary President
Exhibit 99.4
EXHIBIT C
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement, executed as of the _____ day of ________,
1995, by and between Hudson United Bank, a corporation under the
laws of the State of New Jersey, and having its principal place
of business at 3100 Bergenline Avenue, Union City, New Jersey
07087 (hereinafter "HUB"), and HUB Financial Services, Inc., a
corporation under the laws of the State of New Jersey, and having
its principal place of business at 1000 MacArthur Blvd., Mahwah,
New Jersey 07430 (hereinafter "HFSI"),
WITNESSETH: That
WHEREAS, HFSI is in the business of providing data
processing to banks, and desires to obtain administrative support
services for itself, and,
WHEREAS, HUB is a commercial bank capable of providing the
required services,
NOW THEREFORE, it is hereby agreed as follows:
ARTICLE I
SCOPE OF SERVICES
HUB agrees to provide HFSI with the services set forth
herein:
A) ACCOUNTING SERVICES
1. HUB shall create separate general ledger
accounts for HFSI as needed for complete and accurate
record keeping in accordance with generally-accepted
accounting principles.
2. HFSI shall generate all original entries to General
Ledger. HUB shall not be responsible for the accuracy or
validity of entries so generated by HFSI.
3. All General Ledger transactions will be posted
by HUB daily, and a daily proof will be performed on
all general ledger accounts to ascertain that "in
proof" balance is maintained.
4. Monthly reports will be prepared by HUB, and
provided to HFSI, with copies to HUBCO, Inc. and United
National Bancorp.
5. HUB shall also prepare such interim management
reports as requested by HFSI.
6. HUB shall prepare, for review and signature by
HFSI, quarterly and annual Statements of Condition, 941
Tax Returns, State and Federal Income Tax Returns.
7. HUB shall provide complete payroll services.
B) CASH MANAGEMENT
1. HUB shall calculate HFSI's cash position
daily, and shall advise HFSI of funds available for
short term investment.
2. HFSI shall notify HUB of demands upon its cash
position.
3. HUB shall invest and reinvest for HFSI in
overnight or term Fed Funds, as authorized by HFSI.
C) BUDGETING
1. Not later than November 30th of each
year, HFSI will provide HUB with projections for
various income and expense items for the
forthcoming year.
2. HUB will assist HFSI with projections, if so
requested.
3. Based upon the projections and actual
experience for the current year, HUB will prepare
a budget proposal for HFSI's planning purposes.
D) ASSET/LIABILITY MANAGEMENT
1. HUB shall advise HFSI for asset/liability
management purposes.
E) INVESTMENT SERVICES
As instructed by HFSI, HUB shall act as Agent for HFSI
in the purchase and sale of securities for the account of HFSI.
No purchase instructions shall be carried out by HUB if
there are insufficient available funds for settlement.
HUB makes no representations as to the advisability of
any investments, and does not act as an investment advisor or a
broker in any security transactions.
HUB shall provide accounting and record keeping
services for HFSI's investment portfolio.
F) EXAMINATIONS
HUB shall audit all functions of HFSI at least annually
and shall provide a written report of the findings.
Further, HUB shall coordinate with HFSI in order to be
of assistance in the conduct of any audits or examinations
of HFSI by regulators or independent accountants.
G) MARKETING
HUB shall coordinate with HFSI and provide marketing
support as requested.
H) COMPLIANCE
HUB shall review all regulatory and statutory
requirements for the business to be conducted by HFSI and
shall advise on acceptable policy and procedure.
ARTICLE II
DUTY OF CARE
HUB shall perform all services hereunder as it would for its
own accounts.
ARTICLE III
CONFIDENTIALITY OF INFORMATION
Both parties recognize that in connection with the
performance of duties hereunder, it may be provided with, or have
access to, information which is of a confidential nature. Both
parties agree to maintain confidentiality of records and
information, and shall disclose nothing (in whole or in part) to
any third party without the other party's prior consent.
ARTICLE IV
TERM
This Agreement shall remain in full force and effect for a
period of one year from the date hereof.
The term shall be automatically extended for additional
successive one-year periods unless written notification is given
by either party to the other, two months prior to the expiration
date, of their intent to terminate the Agreement.
This Agreement may also be terminated upon (i) the mutual
written consent of the parties or (ii) after the first one year
term, by HFSI upon 60 days prior written notice of its intent to
terminate the agreement.
Upon termination, HUB agrees to cooperate with HFSI in
delivering records in accordance with HFSI's instructions. HUB
shall not be responsible for conversion of records to any other
format, nor shall HUB be responsible for the creation of new
records not normally produced for HFSI hereunder.
ARTICLE V
INDEPENDENT CONTRACTOR
It is specifically agreed by the parties that the
relationship of HUB to HFSI is one of Agency, and that HUB is an
independent contractor in providing any services hereunder.
ARTICLE VI
NON-ASSIGNABILITY
HFSI agrees to pay HUB for the accounting/administrative
services provided hereunder, as follows:
During the initial first-year of the term:
$5,797.25 per month, or any portion thereof.
For each subsequent year, compensation as mutually agreed in
writing, which shall be established for each subsequent year
three months prior to the expiration date of the present term.
In addition to the monthly administrative fee provided for
above, HFSI agrees to reimburse HUB for its out-of-pocket
expenses in funding any payroll services and other out of pocket
expenses upon receipt of invoices setting forth the itemized
expenses incurred by HUB.
ARTICLE VII
CO-MINGLING OF FUNDS
HUB shall maintain separate accounts for HFSI, and no funds
belonging to HFSI shall be co-mingled with funds belonging to
HUB.
ARTICLE VIII
INSPECTION OF RECORDS
All records and books pertaining to HFSI shall be available
to HFSI, its representatives, regulators or auditors for the
purposes of inspection, examination or audit at all reasonable
times, with or without notice.
ARTICLE IX
FIDELITY BOND
HUB agrees to maintain at all times and at its own expense,
a fidelity bond which shall insure against any losses resulting
from the dishonest, fraudulent, criminal or negligent acts or
errors or omissions on the part of officers, employees or other
persons acting on behalf of HUB. The deductible on such bond
shall be not more than $250,000.
ARTICLE X
NOTICE
All notices or requests which may be or are required to be
given or sent by either party to the other under the provisions
of this Agreement shall be in writing and shall be deemed to have
been properly sent or given either by personal delivery, by
overnight courier, or by certified mail to:
a) If intended for HUB:
Hudson United Bank
Controllers Office
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
b) If intended for HFSI:
HUB Financial Services, Inc.
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
Attn: President
Either party may designate, by notice given, as above
provided, a new address to which any such notice or request may
thereafter be given or sent.
ARTICLE XI
APPLICABLE LAW
This Agreement shall be construed in accordance with the
laws of the State of New Jersey and the United States of America,
as applicable.
ARTICLE XII
This Agreement constitutes the complete terms and conditions
between HUB and HFSI covering performance hereunder. This
Agreement supersedes any prior agreements, written or oral, with
respect to the subject matter hereof.
Modifications may be made only by a written instrument
executed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first appearing above.
ATTEST: HUDSON UNITED BANK
___________________________ By:_____________________________
D. Lynn Van Borkulo-Nuzzo
Secretary President
ATTEST: HUB FINANCIAL SERVICES, INC.
___________________________ By:_____________________________
Secretary President
Exhibit 99.5
FOR IMMEDIATE RELEASE
August 21, 1995
HUBCO, INC. AND GROWTH FINANCIAL CORP.
SIGN A DEFINITIVE MERGER AGREEMENT
Mahwah, New Jersey, August 21, 1995 - HUBCO, INC. (NASDAQ:HUBC),
and GROWTH FINANCIAL CORP. (NASDAQ:GRFC) announced today the
signing of a definitive agreement. Hubco, Inc. will acquire
Growth Financial Corp. and will merge Growth Bank into Hudson
United Bank, a wholly owned subsidiary of HUBCO. Under the terms
of the Agreement, Growth shareholders will receive an exchange of
stock having a value of approximately $14.64 per Growth share.
The exchange ratio will be between .69 and .81 share of HUBCO
common stock in exchange for each of Growth's shares subject to
adjustment under certain defined circumstances. The exchange
ratio will be determined prior to closing based upon HUBCO's
average price per share measured during a pricing period.
Growth also announced its plan to immediately initiate quarterly
cash dividend payments. In connection with the transaction,
Growth has issued an option to HUBCO which, based on certain
defined events, could result in the issuance of new Growth common
shares to HUBCO equal to 19.9% of the total proforma shares
outstanding inclusive of existing option shares. The
transaction, which is expected to be treated as a tax-free
exchange to holders of Growth common stock, will be accounted for
as a pooling of interests.
The merger is subject to approval by Federal and State bank
regulatory authorities and the shareholders of Growth. Growth
Bank, headquartered in Basking Ridge, New Jersey, has assets of
$130 million and three branch offices serving Morris and Somerset
counties. HUBCO, Inc., with assets of $1.6 billion, is the
eighth largest commercial banking company headquartered in New
Jersey and the largest bank holding company headquartered in
Bergen County.
HUBCO has fifty-eight branch offices, primarily in Bergen,
Hudson, Essex and Passaic counties.
HUBCO's President and Chief Executive Officer Kenneth T. Neilson
commented, "This acquisition expands HUBCO's presence in Morris
County and for the first time, expands Hudson United Bank into
Somerset County. The investments which HUBCO has made over the
past year in technology and new products should be well received
by customers."
Growth Bank's President and Chief Executive Officer Dale G.
Potter stated, "The combination of Growth and HUBCO will enhance
Growth's ability to serve its consumer base though a more
efficient means of product delivery and substantially expand its
service offerings to both the consumer and the business community
in Morris and Somerset counties. Both banks place a strong
emphasis on providing personal service to their customers which,
when combined with HUBCO's greater resources, adds value to the
Growth franchise and strengthens its capacity to compete in the
markets it serves."
The management of HUBCO, Inc. and Growth Bank said they expect
the merger to close during the first quarter of 1996.
Exhibit 2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of
August 18, 1995 ("Agreement"), is among HUBCO, Inc. ("Hubco"), a
New Jersey corporation and registered bank holding company,
Hudson United Bank (the "Bank"), a New Jersey chartered
commercial banking corporation, wholly-owned by Hubco, Growth
Financial Corp., a New Jersey corporation ("GFC") and registered
bank holding company, and Growth Bank, a New Jersey chartered
bank, wholly owned by GFC ("Growth").
WHEREAS, Hubco desires to acquire GFC and GFC's Board
of Directors has determined, based upon the terms and conditions
hereinafter set forth, that the acquisition is in the best
interests of GFC and its stockholders. The acquisition will be
accomplished by merging GFC with and into Hubco with Hubco
surviving and GFC shareholders receiving the consideration
hereinafter set forth. Immediately after the merger of GFC into
Hubco, Growth shall be merged with and into the Bank with the
Bank surviving; and
WHEREAS, the Boards of Directors of GFC, Hubco, the
Bank and Growth have duly adopted and approved this Agreement and
the Board of Directors of GFC has directed that it be submitted
to GFC's shareholders for approval; and
WHEREAS, simultaneously with the execution of this
Agreement, GFC is issuing an option to Hubco to purchase 336,850
shares of the authorized and unissued GFC Common Stock (as
hereinafter defined) at an option price of $12.25 per share,
subject to adjustment and subject to the terms and conditions set
forth in the Option Agreement;
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),
GFC shall be merged with and into Hubco (the "Merger") in
accordance the New Jersey Business Corporation Act ("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 GFC and thereupon and
thereafter, all the property, rights, privileges, powers and
franchises of each of Hubco and GFC 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 GFC 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, 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
GFC 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
GFC 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 GFC if
the Merger had not occurred.
1.3. CERTIFICATE OF INCORPORATION. As of the
Effective Time, the certificate of incorporation of Hubco as it
exists at the Effective Time shall be the certificate of
incorporation of the Surviving Corporation and shall not be
amended by this Agreement or the Merger but thereafter may be
amended as provided by law.
1.4. BY-LAWS. As of the Effective Time, the By-laws
of Hubco shall be the By-laws of the Surviving Corporation until
otherwise amended as provided by law.
1.5. DIRECTORS AND OFFICERS. As of the Effective
Time, the directors and officers of Hubco shall become the
directors and officers of the Surviving Corporation.
1.6. EFFECTIVE TIME AND CLOSING. The Merger shall
become effective (and be consummated) upon the filing of a
certificate of merger (the "Certificate of Merger"), in form and
substance satisfactory to Hubco and GFC, with the Secretary of
State of the State of New Jersey. The term "Effective Time"
shall mean the close of business on the first day when the
Certificate of Merger has been so filed. A closing (the
"Closing") shall take place prior to the Effective Time at 10:00
a.m., on a date mutually agreeable and as soon as practicable
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), at the offices of Pitney, Hardin, Kipp
& Szuch, 200 Campus Drive, Florham Park, New Jersey, or at such
other place, time or date as Hubco and GFC may mutually agree
upon. Notwithstanding the foregoing, the Closing shall not occur
prior to January 15, 1996 without the consent of each party
hereto. Immediately following the Closing, the Certificate of
Merger shall be filed with the New Jersey Secretary of State.
1.7 THE BANK MERGER. Immediately following the
Effective Time, Growth 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"), except that at the Effective Time, Growth may
be operated as "Hudson United Bank, Growth Division". Upon the
consummation of the Bank Merger, the separate existence of Growth
shall cease and the Surviving Bank shall be considered the same
business and corporate entity as each of Growth and the Bank and
all of the property, rights, privileges, powers and franchises of
each of Growth 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 Growth and
the Bank and shall have succeeded to all or each of their
relationships, fiduciary or otherwise, as fully and to the same
extent as if such property, rights, privileges, powers,
franchises, debts, obligations, duties and relationships had been
originally acquired, incurred or entered into by the Surviving
Bank. Upon the consummation of the Bank Merger, the certificate
of incorporation and by-laws of the Bank shall become the
certificate of incorporation and by-laws of the Surviving Bank
and the officers and directors of the Bank shall be the officers
and directors of the Surviving Bank. Following the execution of
this Agreement, Growth 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 Banking of the State of New Jersey and the
Federal Deposit Insurance Corporation (the "FDIC") for approval
of the Bank Merger.
ARTICLE II - CONVERSION OF GFC SHARES
2.1. CONVERSION OF GFC COMMON STOCK. Each share of
common stock, par value $1.00 per share, of GFC ("GFC Common
Stock"), issued and outstanding immediately prior to the
Effective Time (other than Dissenting Shares defined in Section
2.4) shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted as follows:
(a) EXCHANGE RATIO. Subject to the provisions of this
Section 2.1, each share of GFC Common Stock issued and
outstanding immediately prior to the Effective Time (excluding
any treasury shares, shares held by Hubco and Dissenting Shares)
shall be converted at the Effective Time into the right to
receive that number of shares (the "Exchange Ratio") of common
stock, without par value, of HUBCO ("Hubco Common Stock") as
shall equal the quotient (rounded to the nearest one-thousandth)
of $14.64 (the "Intended Value Per Share") divided by the Median
Pre-Closing Price of Hubco Common Stock; PROVIDED, HOWEVER, that
if such quotient is less than 0.69 then the Exchange Ratio shall
be 0.69 (the "Minimum Exchange Ratio") and if such quotient is
greater than 0.81 the Exchange Ratio shall be 0.81 (the "Maximum
Exchange Ratio"), and PROVIDED, FURTHER, that the Exchange Ratio
determined as set forth above shall be further adjusted pursuant
to Section 2.1(b) hereto.
(b) EXCHANGE RATIO ADJUSTMENTS. 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
Minimum Exchange Ratio and Maximum Exchange Ratio shall each be
correspondingly adjusted to reflect such stock dividend, stock
split, reclassification, recapitalization, combination or
exchange of shares.
(c) MEDIAN PRE-CLOSING PRICE. The determination of
the Exchange Ratio in Exhibit 2.1 is based on the "Median Pre-
Closing Price" of Hubco Common Stock. The Median Pre-Closing
Price shall mean the Median Price (as hereinafter defined) of
Hubco Common Stock calculated based upon the Closing Price (as
hereinafter defined) of Hubco Common Stock during the first 20 of
the 25 consecutive trading days immediately preceding the date of
the Closing. The Closing Price shall mean the closing price of
Hubco Common Stock as supplied by the National Association of
Securities Dealers Automated Quotation System and published in
THE WALL STREET JOURNAL during the first 20 of the 25 consecutive
trading days immediately preceding the date of the Closing. The
Median Price shall be determined by taking the average of the
Closing Prices left after discarding the 9 lowest and 9 highest
Closing Prices in the 20 day period. A trading day shall mean a
day for which a Closing Price is so supplied and published.
(d) CANCELLATION OF GFC CERTIFICATES. After the
Effective Time, all shares of GFC Common Stock (other than those
cancelled pursuant to Section 2.1 (e)) shall no longer be
outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each certificate previously evidencing
any such shares (other than Dissenting Shares and those cancelled
pursuant to Section 2.1 (e)) 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 GFC Common Stock outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to
such shares of GFC Common Stock except as otherwise provided
herein or by law. Certificates previously evidencing shares of
GFC Common Stock (other than Dissenting Shares and those
cancelled pursuant to Section 2.1(e)) shall be exchanged for
certificates evidencing shares of Hubco Common Stock issued
pursuant to this Article II, upon the surrender of such
certificates in accordance with this Article II. No fractional
shares of Hubco Common Stock shall be issued, and, in lieu
thereof, a cash payment shall be made pursuant to Section 2.2(e).
(e) TREASURY SHARES. All shares of GFC Common Stock
held by GFC in its treasury or owned by Hubco or the Bank (other
than shares held as trustee or in a fiduciary capacity and shares
held as collateral on or in lieu of a debt previously contracted)
immediately prior to the Effective Time shall be cancelled.
2.2. EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. As of the Effective Time, Hubco
shall deposit, or shall cause to be deposited, with a bank or
trust company designated by Hubco, which may be Hudson United
Bank, Trust Department (the "Exchange Agent"), for the benefit of
the holders of shares of GFC 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 GFC Common Stock
(other than Dissenting Shares) (the "Certificates"), (i) a letter
of transmittal (which is reasonably agreed to by Hubco and GFC
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. 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 GFC Common
Stock formerly evidenced by such Certificate in accordance with
Section 2.1, (B) cash in lieu of fractional shares of Hubco
Common Stock to which such holder may be entitled pursuant to
Section 2.2(e) and (C) 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) and (C) being collectively, the
"Merger Consideration") and the Certificates so surrendered shall
forthwith be cancelled. In the event of a transfer of ownership
of shares of GFC Common Stock which is not registered in the
transfer records of GFC, a certificate evidencing the proper
number of shares of Hubco Common Stock may be issued in
accordance with this Article II to a transferee if the
Certificate evidencing such shares of GFC 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. In the
event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if
required by the Exchange Agent, the posting by such person of a
bond in such amount as the Exchange Agent may direct as indemnity
against any claim that may be made against it with respect to
such Certificate, the Exchange Agent will issue in exchange for
such lost, stolen destroyed Certificate the Merger Consideration
deliverable in respect thereof pursuant to this Agreement. Until
surrendered as contemplated by this Section 2.2, each Certificate
shall be deemed at any time after the Effective Time to evidence
only the right to receive upon such surrender the Merger
Consideration.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES
OF HUBCO COMMON STOCK. No dividends or other distributions
declared or made after the Effective Time with respect to Hubco
Common Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect
to the shares of Hubco Common Stock evidenced thereby, and no
other part of the Merger Consideration shall be paid to any such
holder, until the holder of such Certificate shall surrender such
Certificate. 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 GFC COMMON STOCK. All shares
of Hubco Common Stock issued upon conversion of the shares of GFC
Common Stock in accordance with the terms hereof shall be deemed
to have been issued in full satisfaction of all rights pertaining
to such shares of GFC 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 per whole share of Hubco Common
Stock.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the
Exchange Fund which remains undistributed to the holders of GFC
Common Stock for two years after the Effective Time shall be
delivered to Hubco, upon demand, and any holders of GFC 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 GFC Common Stock for any such
shares of Hubco Common Stock (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 the consideration otherwise payable pursuant to
this Agreement to any holder of shares of GFC 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
Internal Revenue Code of 1986 as amended (the "Code"), or any
provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Hubco, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to
the holder of the shares of GFC 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 GFC shall be closed and there shall be no
further registration of transfers of shares of GFC Common Stock
thereafter on the records of GFC. On or after the Effective
Time, any Certificates presented to the Exchange Agent or Hubco
for any reason shall be converted into the Merger Consideration.
2.4. GFC STOCK OPTIONS. Hubco agrees to honor each
Stock Option (as defined in Section 3.2) to purchase shares of
GFC Common Stock, in accordance with the terms set forth in
Section 3.2 of the GFC Disclosure Schedule with respect to the
optionee, number of shares subject to option and exercise price.
At the Effective Time, each option shall be converted into Hubco
Common Stock in accordance with the following formula:
(a) Each outstanding Stock Option shall be valued on
the basis of The Median Pre-Closing Price for Hubco multiplied by
the Exchange Ratio and subtracting the stated exercise price for
each Stock Option from the product therefrom (the "Option
Value"), and
(b) Shares of Hubco Common Stock shall be issued in
exchange for Stock Options on the basis of a fraction, the
numerator of which shall be the Option Value and the denominator
of which shall be The Median Pre-Closing Price of Hubco Common
Stock.
(c) Cash shall be paid in lieu of fractional shares.
2.5. DISSENTING SHARES. Notwithstanding anything in
this Agreement to the contrary, any holder of GFC Common Stock
shall have the right to dissent in the manner provided in
N.J.S.A. 14A:11-1 et seq. of the New Jersey Business Corporation
Act (the "BCA"), and if all necessary requirements of the BCA are
met, such shares shall be entitled to payment of the fair value
of such shares in accordance with the provisions of the BCA
("Dissenting Shares"), provided, however, that (i) if any holder
of Dissenting Shares shall subsequently withdraw his demand for
appraisal of such shares within 60 days of the Effective Time,
or, with the written consent of the Surviving Corporation, any
time thereafter, or (ii) if any holder fails to follow the
procedures for establishing his entitlement to appraisal rights
as provided in the BCA, the right to appraisal of such shares
shall be forfeited and such shares shall thereupon be deemed to
have been converted into the right to receive and to have become
exchangeable for, as of the Effective Time, the Merger
Consideration.
2.6. 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.
2.7 BANK COMMON STOCK. The shares of Common Stock of
the Bank outstanding 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 GFC
References herein to "GFC Disclosure Schedules" 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 GFC to Hubco. GFC
hereby represents and warrants to Hubco as follows:
3.1. CORPORATE ORGANIZATION.
(a) GFC is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
Jersey. GFC 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 GFC and
its Subsidiary (as defined below), taken as a whole. GFC is
registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHCA").
(b) Growth is the only Subsidiary of GFC. When used
with reference to GFC, the term "Subsidiary" means any
corporation, partnership, joint venture or other legal entity in
which GFC, directly or indirectly, owns at least a 50% stock or
other equity interest or for which GFC, directly or indirectly,
acts as a general partner. Growth is a state chartered
commercial bank duly organized and validly existing in stock form
and in good standing under the laws of the State of New Jersey.
All eligible accounts of depositors issued by Growth are insured
by the Bank Insurance Fund of the FDIC to the fullest extent
permitted by law. Growth 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 GFC and
Growth, taken as a whole. The GFC Disclosure Schedule sets forth
true and complete copies of the Certificate of Incorporation and
By-laws, as in effect on the date hereof, of GFC and Growth.
Except as set forth in Disclosure Schedule 3.1(b) Growth and GFC
does 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
GFC consists of 5,000,000 shares of GFC Common Stock, par value
$1.00 per share ("GFC Common Stock") and 2,000,000 shares of
preferred stock, par value $5.00 per share ("GFC Preferred
Stock"). As of the date hereof, there are 1,692,750 shares of
GFC Common Stock issued and outstanding. No shares of GFC
Preferred Stock are issued and outstanding. As of the date
hereof, there are 388,589 shares of GFC Common Stock issuable
upon exercise of outstanding stock options of which 50,778 shares
are issuable to The Summit Bancorporation. GFC Disclosure
Schedule 3.2 sets forth all options which may be exercised for
issuance of GFC Common Stock and the terms upon which the options
may be exercised. (such Options are referred to in the aggregate
as the outstanding "Stock Options"). The GFC Disclosure Schedule
sets forth true and complete copies of the GFC Option Plans and
Option Grants and a true and complete list of each outstanding
Stock Option issued pursuant thereto. GFC has previously
provided to Hubco copies of all grant agreements or written
evidence of such grants reflecting all Options granted. All
issued and outstanding shares of GFC Common Stock, and all issued
and outstanding shares of capital stock of Growth, have been duly
authorized and validly issued, are fully paid, and nonassessable.
The authorized capital stock of Growth consists of 2,500,000
shares of common stock, $5.00 par value per share. All of the
outstanding shares of capital stock of Growth are owned by GFC
and are free and clear of any liens, encumbrances, charges,
restrictions or rights of third parties. Except for the Options
issued and disclosed herein and the Option granted to Hubco
pursuant to the Stock Option Agreement dated the date hereof,
neither GFC nor Growth 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 GFC or Growth or any securities representing the right to
purchase, subscribe or otherwise receive any shares of such
capital stock or any securities convertible into any such shares,
and there are no agreements or understandings with respect to
voting of any such shares.
3.3. AUTHORITY; NO VIOLATION.
(a) Subject to the approval of this Agreement and the
transactions contemplated hereby by all applicable regulatory
authorities and by the stockholders of GFC, GFC and Growth 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 Board of Directors of GFC in accordance with the
certificate of incorporation of GFC and applicable laws and
regulations and by the Board of Directors of the Bank in
accordance with its certificate of incorporation and applicable
laws and regulations. Except for such approvals, no other
corporate proceedings on the part of GFC or Growth are necessary
to consummate the transactions so contemplated. This Agreement
has been duly and validly executed and delivered by GFC and
Growth, and constitutes valid and binding obligations of GFC and
Growth, enforceable against GFC and Growth in accordance with its
terms.
(b) Neither the execution and delivery of this
Agreement by GFC or Growth, nor the consummation by GFC or Growth
of the transactions contemplated hereby in accordance with the
terms hereof, or compliance by GFC or Growth with any of the
terms or provisions hereof, will (i) violate any provision of
GFC's or Growth's Certificate of Incorporation or By-laws, (ii)
assuming that the consents and approvals set forth below are duly
obtained, violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to GFC,
Growth or any of their respective properties or assets, or (iii)
except as set forth in the GFC 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
GFC or Growth 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 GFC
or Growth 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 GFC and
Growth, taken as a whole, and which will not prevent or 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 New Jersey Department of Banking
("Department"), the New Jersey Department of Environmental
Protection the ("DEP"), the SEC, other applicable government
authorities, and the stockholders of GFC, 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 GFC or Growth in connection with (x) the execution and
delivery by GFC of this Agreement and (y) the consummation by GFC
of the Merger and the other transactions contemplated hereby.
3.4. FINANCIAL STATEMENTS.
(a) The GFC Disclosure Schedule sets forth copies of:
(i) the consolidated statements of condition of GFC as of
December 31, 1993 and 1994, and the related consolidated
statements of income, changes in stockholders' equity and cash
flows for the periods ended December 31, in each of the three
years 1992 through 1994, in each case accompanied by the audit
report of KPMG Peat Marwick LLP, independent public accountants
with respect to GFC, and the unaudited consolidated statements of
condition of GFC as of June 30, 1995 and June 30, 1994 and (ii)
the unaudited consolidated statements of income and cash flows
for the six months ended June 30, 1995 as reported in GFC's
Quarterly Report on Form 10-Q, filed with the SEC under the
Securities Exchange Act of 1934, as amended ("1934 Act")
(collectively, the "GFC Financial Statements"). The GFC
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 GFC as of the respective dates set forth therein, and the
related consolidated statements of income, changes in
stockholders' equity and cash flows fairly present the results of
the consolidated operations, changes in stockholders' equity and
cash flows of GFC for the respective periods set forth therein.
(b) The books and records of GFC and Growth 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 GFC Financial Statements (including
the notes thereto), as of June 30, 1995, neither GFC nor Growth
had any liabilities, whether absolute, accrued, contingent or
otherwise, material to the business, operations, assets or
financial condition of GFC and Growth, taken as a whole which
were required by GAAP (consistently applied) to be disclosed in
GFC's consolidated statement of condition as of June 30, 1995 or
the notes thereto. Since June 30, 1995, GFC and Growth have not
incurred any liabilities except in the ordinary course of
business and consistent with prudent banking practice, except as
related to the transactions contemplated by this Agreement.
3.5. BROKER'S AND OTHER FEES. Except for McConnell,
Budd & Downes, Inc., neither GFC or Growth nor any of their
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 McConnell,
Budd & Downes, Inc., is set forth in the GFC Disclosure Schedule.
There are no fees (other than time charges billed at usual and
customary rates) payable to any consultants, including lawyers
and accountants, in connection with this transaction or which
would be triggered by consummation of this transaction or the
termination of the services of such consultants by GFC or Growth.
3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as disclosed in Section 3.6 of the GFC
Disclosure Schedule, there has not been any material adverse
change in the business, operations, assets or financial condition
of GFC and Growth, taken as a whole, since June 30, 1995 and to
the best of GFC's knowledge, no facts or condition exists which
GFC believes will cause such a material adverse change in the
future.
(b) Except as set forth in the GFC Disclosure
Schedule, neither GFC nor Growth has taken or permitted any of
the actions set forth in Section 5.2 hereof between June 30, 1995
and the date hereof and, except for execution of this Agreement,
GFC has conducted its business only in the ordinary course,
consistent with past practice.
3.7. LEGAL PROCEEDINGS. Except as disclosed in the
GFC Disclosure Schedule, and except for ordinary routine
litigation incidental to the business of GFC or Growth, neither
GFC nor Growth is a party to any, and there are no pending or, to
the best of GFC's knowledge, threatened legal, administrative,
arbitral or other proceedings, claims, actions or governmental
investigations of any nature against GFC or Growth. Except as
disclosed in the GFC Disclosure Schedule, neither GFC nor Growth
is a party to any order, judgment or decree entered in any
lawsuit or proceeding.
3.8. TAXES AND TAX RETURNS.
(a) GFC and Growth have duly filed (and until the
Effective Time will so file) all returns, declarations, reports,
information returns and statements ("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 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). GFC and Growth have established (and until
the Effective Time will establish) 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 GFC or Growth through such date. None of the federal
or state income tax returns of GFC or Growth 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 GFC, 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 GFC or Growth, nor has GFC or Growth 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 GFC Disclosure
Schedule, neither GFC nor Growth (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 of
1986 Code, as amended (the "Code"), by reason of a voluntary
change in accounting method initiated by GFC or Growth (nor does
GFC 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.
3.9. EMPLOYEE BENEFIT PLANS.
(a) Except as disclosed in Section 3.9 of the GFC
Disclosure Schedule, neither GFC nor Growth maintains or
contributes to any "employee pension benefit plan" (the "GFC
Pension Plans"), as such term is defined in Section 3 of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), "employee welfare benefit plan" (the "GFC Welfare
Plans"), as such term is defined in Section 3 of ERISA, stock
option plan, stock purchase plan, deferred compensation plan,
severance plan, bonus plan, employment agreement or other similar
plan, program or arrangement. Neither GFC nor Growth has, since
September 2, 1974, contributed to any "Multiemployer Plan", as
such term is defined in Section 3(37) of ERISA.
(b) Except as set forth in Section 3.9 of the GFC
Disclosure Schedule, each of the GFC Pension Plans is intended to
be a qualified plan within the meaning of Section 401(a) of the
Code and has been determined by the IRS to be so qualified, and
GFC is not aware of any fact or circumstance which would
adversely affect the qualified status of any such plan.
(c) Each of the GFC Pension Plans and each of the GFC
Welfare Plans 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.
(d) Neither GFC nor Growth, nor, to the best knowledge
of GFC, any trustee, fiduciary or administrator of any GFC
Pension Plan or GFC Welfare Plan or any trust created thereunder,
has engaged in a prohibited transaction, as such term is defined
in Section 4975 of the Code, which could subject GFC or Growth,
or, to the best knowledge of GFC, any trustee, fiduciary or
administrator thereof, to the tax or penalty on prohibited
transactions imposed by said Section 4975.
(e) No GFC Pension Plan or any trust created
thereunder has been terminated, nor have there been any
"reportable events" for which the 30 day notice has not been
waived with respect to any GFC Pension Plan, as that term is
defined in Section 4043(b) of ERISA.
(f) Except as disclosed in Section 3.9 of the GFC
Disclosure Schedule, there are no pending, or, to the best
knowledge of GFC, threatened or anticipated claims (other than
routine claims for benefits) by, on behalf of or against any of
the GFC Pension Plans or the GFC Welfare Plans or any trusts
related thereto.
3.10. REPORTS.
(a) The GFC Disclosure Schedule lists, and GFC has
previously delivered to Hubco a complete copy of, each (i) final
registration statement, prospectus, annual, quarterly or special
report and definitive proxy statement filed by GFC since January
1, 1991 pursuant to the Securities Act of 1933, as amended ("1933
Act"), or the 1934 Act and (ii) communication (other than general
advertising materials and press releases) mailed by GFC to its
stockholders as a class since January 1, 1991, and each such
final registration statement, prospectus, annual, quarterly or
special report, definitive proxy statement or communication, as
of its date, complied in all material respects with all
applicable statutes, rules and regulations enforced or
promulgated by the SEC and, as of said dates, 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) GFC and Growth has, since January 1, 1991, duly
filed with the FDIC, the FRB and the Department in form and
substance which was correct in all material respects the monthly,
quarterly and annual financial reports required to be filed under
applicable laws and regulations, and, subject to permission from
such regulatory authorities, GFC promptly will deliver or make
available to Hubco accurate and complete copies of such reports.
The GFC Disclosure Schedule lists all examinations of GFC or
Growth conducted by either the FRB, the FDIC or the Department
since January 1, 1991 and the dates of any responses thereto
submitted by GFC or Growth.
3.11. GFC AND GROWTH INFORMATION. The information
relating to GFC and Growth to be contained in the Proxy
Statement/Prospectus (as defined in Section 5.6(a) hereof) to be
delivered to stockholders of GFC in connection with the
solicitation of their approval of the Merger, as of the date the
Proxy Statement/Prospectus is mailed to stockholders of GFC, and
up to and including the date of the meeting of stockholders to
which such Proxy Statement/Prospectus relates, will not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
3.12. COMPLIANCE WITH APPLICABLE LAW. Except as set
forth in the GFC Disclosure Schedule, each of GFC and Growth
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 GFC or Growth (other than where such
default or noncompliance will not result in a material adverse
effect on the business, operations, assets or financial condition
of GFC and Growth taken as a whole) and GFC has not received
notice of violation of, and does not know of any violations of,
any of the above.
3.13. CERTAIN CONTRACTS.
(a) Except for plans referenced in Section 3.9 and as
disclosed in the GFC Disclosure Schedule, (i) neither GFC nor
Growth is a party to or bound by any written contract or
understanding (whether written or oral) 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 GFC or Growth to
any officer, employee, director or consultant thereof. The GFC
Disclosure Schedule sets forth true and correct copies of all
severance or employment agreements with officers, directors,
employees, agents or consultants to which GFC or Growth is a
party.
(b) Except as disclosed in the GFC Disclosure Schedule
and except for loan commitments, loan agreements and loan
instruments entered into or issued in the ordinary course of
business, (i) as of the date of this Agreement, neither GFC nor
Growth 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 GFC and Growth taken as a whole,
(ii) no commitment, agreement or other instrument to which GFC or
Growth is a party or by which either of them is bound limits the
freedom of GFC or Growth to compete in any line of business or
with any person, and (iii) neither GFC nor Growth is a party to
any collective bargaining agreement.
(c) Except as disclosed in the GFC Disclosure
Schedule, neither GFC nor Growth or, to the best knowledge of
GFC, 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 Growth 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 GFC and Growth, taken as a
whole.
3.14. PROPERTIES AND INSURANCE.
(a) GFC and Growth 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
GFC's consolidated balance sheet as of December 31, 1994, 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, 1994),
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 GFC and Growth 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, GFC
and Growth as lessees have the right under valid and subsisting
leases to occupy, use, possess and control all real property
leased by GFC and Growth in all material respects as presently
occupied, used, possessed and controlled by GFC and Growth.
(b) The business operations and all insurable
properties and assets of GFC and Growth are insured for their
benefit against all risks which, in the reasonable judgment of
the management of GFC, 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
GFC adequate for the business engaged in by GFC and Growth. As
of the date hereof, neither GFC nor Growth 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.
3.15. MINUTE BOOKS. The minute books of GFC and
Growth contain accurate records of all meetings and other
corporate action held of their respective stockholders and Boards
of Directors (including committees of their respective Boards of
Directors).
3.16. ENVIRONMENTAL MATTERS. Except as disclosed in
the GFC Disclosure Schedule, neither GFC nor Growth has received
any written notice, citation, claim, assessment, proposed
assessment or demand for abatement alleging that GFC or Growth
(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, other than corrections or
cleanups which, in the aggregate, are immaterial to GFC and
Growth. Except as disclosed in the GFC Disclosure Schedule, GFC
has no knowledge that any toxic or hazardous substances or
materials have been emitted, generated, disposed of or stored on
any non-residential property currently owned or leased by GFC or
Growth, or owned or leased in the five years prior to the date of
this Agreement in any manner that violates any presently existing
federal, state or local law or regulation governing or pertaining
to such substances and materials, other than violations which, in
the aggregate, are immaterial to GFC and Growth. Except as
disclosed in the GFC Disclosure Schedule, all property formerly
owned or leased by GFC or Growth which was subject to the
provisions of the Industrial Site Recovery Act, N.J.S.A. 13:1K-6,
et seq. as amended ("ISRA"), complied with all applicable
provisions of ISRA at the time such property was sold or
transferred.
3.17. RESERVES. As of June 30, 1995, each of the
allowance for loan losses and the reserve for OREO properties in
the GFC Financial Statements was adequate pursuant to GAAP
(consistently applied), and the methodology used to compute each
of the loan loss reserve and the reserve for OREO properties
complies in all material respects with GAAP (consistently
applied).
3.18. NO PARACHUTE PAYMENTS. No officer, director,
employee or agent (or former officer, director, employee or
agent) of GFC or Growth 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 GFC, Growth, Hubco or the Bank which
if paid or provided would constitute an "excess parachute
payment", as defined in Section 280G of the Code or regulations
promulgated thereunder.
3.19. AGREEMENTS WITH BANK REGULATORS. Neither GFC
nor Growth 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 GFC prior to the date of this Agreement, nor has GFC
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 GFC prior to the date of this Agreement.
Neither GFC nor Growth 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 GFC
prior to the date of this Agreement.
3.20. DISCLOSURE. No representation or warranty
contained in Article III of this Agreement contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements herein not misleading.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF HUBCO
References herein to the "Hubco Disclosure Schedule"
shall mean all of the disclosure schedules required by this
Article IV, dated as of the date hereof and referenced to the
specific sections and subsections of Article IV of this
Agreement, which have been delivered on the date hereof by Hubco
to GFC. Hubco hereby represents and warrants to GFC 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 or
its subsidiaries (defined below), taken as a whole. Hubco is
registered as a bank holding company under the BHCA.
(b) Each of the subsidiaries of Hubco are listed in
the Hubco Disclosure Schedule. The term "subsidiary", when used
with reference to Hubco, 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. Each subsidiary of Hubco is duly organized and validly
existing and in good standing under the laws of the jurisdiction
of its incorporation. The Bank is a state-chartered commercial
bank whose deposits are insured by the Bank Insurance Fund of the
FDIC to the fullest extent permitted by law. Each 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
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 its subsidiaries, taken as a
whole. The Hubco Disclosure Schedule sets forth true and
complete copies of the certificate of incorporation and by-laws
of Hubco as in effect on the date hereof.
4.2. CAPITALIZATION. The authorized capital stock of
Hubco consists of 25,000,000 shares of Hubco Common Stock,
without par value, and 4,500,000 shares of preferred stock
("Hubco Preferred Stock"). There are no shares of Hubco
Preferred Stock outstanding. As of July 31, 1995, there were
13,110,947 shares of Hubco Common Stock issued and outstanding
and 432,500 shares of Hubco Common Stock issuable upon the
exercise of outstanding options. Since such date, and from time
to time hereafter, Hubco may sell or repurchase shares of its
Common Stock; PROVIDED, that between such date and the date of
this Agreement, Hubco has not repurchased any shares of its
Common Stock except for purchases which may have been made for
the benefit of Hubco dividend reinvestment, ESOP or other plans
which provide for stock purchases with respect to which Hubco
management does not influence the timing or amount ("Automatic
Repurchases"), and provided further that Hubco agrees not to
repurchase any of its stock, except for Automatic Repurchases,
during the ten day period immediately preceding the 25-trading
day period in which the Median Pre-Closing Price is determined.
Except for shares issuable under the Hubco, Inc. 1995 Stock
Option Plan (the "Hubco Options") and shares issuable to Robert
F. Mangano pursuant to a grant of non-qualified options ("Non-
Qualified Option Plan"), 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 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 Hubco's subsidiaries are
owned by Hubco free and clear of any liens, encumbrances,
charges, restrictions or rights of third parties. Except for the
Hubco Options, Hubco's obligations under the Non-Qualified Option
Plan and Hubco's agreement to sell 50% of the outstanding shares
of HUB Financial Services, Inc., neither Hubco nor Hubco's
subsidiaries 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 Hubco's
subsidiaries 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) Hubco and the Bank have full corporate power and
authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby in accordance with the terms
hereof. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly approved by the Board of Directors of Hubco and
the Bank in accordance with their respective certificates of
incorporation and applicable laws and regulations. No other
corporate proceedings on the part of Hubco or the Bank are
necessary to consummate the transactions so contemplated, except
if shareholder approval of Hubco shall be required for any
reason. As of the date hereof, the approval of Hubco's
shareholders is not required in order for Hubco to consummate the
Merger; should such shareholder approval be required in the
future for any reason, Hubco will use its best efforts to
promptly cause such shareholder approval to be obtained. Without
limiting the preceding sentence, the Board of Directors of Hubco
will: promptly call a meeting of Hubco shareholders to vote on
the Merger; recommend that Hubco shareholders approve the Merger;
and vote their shares of Hubco Common Stock in favor of the
Merger. This Agreement has been duly and validly executed and
delivered by Hubco and the Bank and constitutes valid and
binding obligations of Hubco and the Bank, enforceable against
Hubco and the Bank in accordance with its terms.
(b) Neither the execution or delivery of this
Agreement by Hubco or the Bank, nor the consummation by Hubco or
the Bank of the transactions contemplated hereby in accordance
with the terms hereof or compliance by Hubco or the Bank with any
of the terms or provisions hereof will (i) violate any provision
of the Certificate of Incorporation or By-laws of Hubco or the
Bank, (ii) assuming that the consents and approvals set forth
below are duly obtained, violate any statute, code, ordinance,
rule, regulation, judgment, order, writ, decree or injunction
applicable to Hubco or the Bank 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
respective properties or assets of Hubco or the Bank under, any
of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which Hubco or the Bank is a
party, or by which Hubco or the Bank or any of their properties
or assets may be bound or affected, except, with respect to (ii)
and (iii) above, such as individually or in the aggregate will
not have a material adverse effect on the business, operations,
assets or financial condition of Hubco and Hubco's subsidiaries,
taken as a whole, and which will not prevent or 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 Department, the FRB, the Secretary of
State of New Jersey, the SEC, applicable state securities bureaus
or commissions, and any approval of Hubco's shareholders, 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 (a) the execution
and delivery by Hubco and the Bank of this Agreement, and (b) the
consummation by Hubco of the Merger and the other transactions
contemplated hereby. 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
(i) the consolidated statements of financial condition of Hubco
as of December 31, 1993 and 1994, 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 1992 through 1994, in each case accompanied by the
audit report of Arthur Andersen LLP, independent public
accountants with respect to Hubco and the unaudited consolidated
statements of condition of Hubco as of June 30, 1994 and June 30,
1995 and (ii) the unaudited consolidated statements of income and
cash flows for the six months then ended 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
condition 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 results of the
consolidated operations and changes in stockholders' equity and
of cash flows of Hubco for the respective periods set forth
therein.
(b) The books and records of Hubco and the Bank 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 June 30, 1995 neither Hubco nor any of
its 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 its subsidiaries which were required by GAAP (consistently
applied) to be disclosed in Hubco's consolidated statement of
condition as of June 30, 1995 or the notes thereto. Since June
30, 1995, neither Hubco nor any of its subsidiaries have incurred
any liabilities, except in the ordinary course of business and
consistent with prudent banking practice.
4.5. BROKERAGE FEES. Neither Hubco nor any of its
directors or officers has employed any broker or finder or
incurred any liability for any broker's or finder's fees or
commissions in connection with any of the transactions
contemplated by this Agreement.
4.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. There has
not been any material adverse change in the business, operations,
assets or financial condition of Hubco and Hubco's subsidiaries
taken as a whole since June 30, 1995 and to the best of Hubco's
knowledge, no facts or condition exists which Hubco believes will
cause such a material adverse change in the future.
4.7. LEGAL PROCEEDINGS. Except as disclosed in the
Hubco Disclosure Schedule, and except for ordinary routine
litigation incidental to the business of Hubco or its
subsidiaries, neither Hubco nor any of its subsidiaries is a
party to any, and there are no pending or, to the best of
Hubco's knowledge, threatened legal, administrative, arbitral or
other proceedings, claims, actions or governmental investigations
of any nature against Hubco or any of its subsidiaries which, if
decided adversely to Hubco or its subsidiaries, would have a
material adverse effect on the business, operations, assets or
financial condition of Hubco or its subsidiaries. Except as
disclosed in the Hubco Disclosure Schedule, neither Hubco nor
Hubco's subsidiaries is a party to any order, judgment or decree
entered in any lawsuit or proceeding which is material to Hubco
or its subsidiaries.
4.8. COMPLIANCE WITH APPLICABLE LAW.
(a) Since January 1, 1991, Hubco has filed all
reports, registration statements and filings that it was required
to file with the SEC under the 1933 Act and the 1934 Act, all of
which complied in all material respects with all applicable
requirements of the 1933 Act or the 1934 Act, as the case may be,
and the rules and regulations adopted thereunder. As of their
respective dates, each such report, registration statement, form
or other document, 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, 1991, Hubco and the Bank have
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.
(b) Hubco and the Bank have, since January 1, 1991,
duly filed with the FDIC and the Department in form and substance
which was correct in all material respects the monthly, quarterly
and annual financial reports required to be filed under
applicable laws and regulations, and, subject to permission from
such regulatory authorities, Hubco promptly will deliver or make
available to GFC accurate and complete copies of such reports.
The Hubco Disclosure Schedule lists all examinations of Hubco or
the Bank conducted by either the FRB, the FDIC or the Department
since January 1, 1991 and the dates of any responses thereto
submitted by Hubco or the Bank.
(c) 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 (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.
4.9. HUBCO AND BANK INFORMATION. The information
relating to Hubco and the Bank, 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 GFC 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 and the rules and regulations promulgated
thereunder.
4.10. FUNDING AND CAPITAL ADEQUACY. At the Effective
Time, after taking into account the transactions contemplated
hereby, Hubco and the Bank will have sufficient capital to
satisfy all applicable regulatory capital requirements.
4.11. HUBCO COMMON STOCK. At the Effective Time, the
Hubco Common Stock to be issued pursuant to the Merger 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 pursuant to the Merger will be
registered under the 1933 Act and issued in accordance with all
applicable state and federal laws, rules and regulations and will
be listed on the NASDAQ National Market.
4.12. TAXES AND TAX RETURNS.
(a) Hubco and the Bank have duly filed 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 has duly paid all such taxes due and
payable, other than taxes or other charges which are being
contested in good faith (and disclosed to GFC in writing). Hubco
and the Bank 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 or the Bank through such date. The Hubco Disclosure
Schedule identifies the federal income tax returns of Hubco and
the Bank which have been examined by 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 the Bank 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 the Bank, nor has Hubco or the Bank 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 the Bank nor any other 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 the
Bank (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.
4.13. CONTRACTS. Except as disclosed in the Hubco
Disclosure Schedule, neither Hubco nor the Bank, or to the best
knowledge of Hubco, any 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 Bank 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
the Bank, taken as a whole.
4.14. PROPERTIES AND INSURANCE.
(a) Hubco and the Bank 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, 1994, 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, 1994),
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 the Bank 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 the Bank as lessees have the right
under valid and subsisting leases to occupy, use, possess and
control all property leased by Hubco or the Bank in all material
respects as presently occupied, used, possessed and controlled by
Hubco and the Bank.
(b) The business operations and all insurable
properties and assets of Hubco and the Bank 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 the Bank.
As of the date hereof, neither Hubco nor the Bank 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.
4.15. ENVIRONMENTAL MATTERS. Except as disclosed in
the Hubco Disclosure Schedule, neither Hubco nor the Bank has
received any written notice, citation, claim, assessment,
proposed assessment or demand for abatement alleging that Hubco
or the Bank (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 the Bank
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
the Bank or any other Subsidiary 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
the Bank, taken as a whole. Except as disclosed in the Hubco
Disclosure Schedule, all property formerly owned or leased by
Hubco or the Bank which was subject to the provisions of ISRA,
complied with all applicable provisions of ISRA at the time such
property was sold or transferred.
4.16. RESERVES. As of June 30, 1995, the allowance for
loan losses in the Hubco Financial Statements was adequate based
upon all factors required to be considered by Hubco in
determining the amount of such allowance. The methodology used
to compute the loan loss reserve complies in all material
respects with all applicable FDIC and Department policies. As of
June 30, 1995, the reserve for OREO properties in the Hubco
Financial Statements was adequate based upon all factors required
to be considered by Hubco in determining the amount of such
reserve.
4.17. AGREEMENTS WITH BANK REGULATORS. Neither Hubco
nor the Bank 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 GFC
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 GFC by Hubco prior to the date of this Agreement.
Neither Hubco nor the Bank 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 GFC by Hubco
prior to the date of this Agreement.
4.18. OWNERSHIP OF GFC COMMON STOCK. Excluding the
shares which Hubco may acquire pursuant to the Stock Option
Agreement of even date herewith by and between Hubco and GFC,
neither Hubco nor any of its subsidiaries, directly or
indirectly, beneficially owns, or has any agreement, arrangement
or understanding for the purposes of acquiring, holding, voting
or disposing of, any shares of GFC Common Stock.
4.19. DISCLOSURES. 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 GFC. During the
period from the date of this Agreement to the Effective Time, GFC
shall, and shall cause Growth to, conduct their respective
businesses only in the ordinary course and consistent with
prudent banking practice, except for transactions permitted
hereunder or with the prior written consent of Hubco, which
consent will not be unreasonably withheld. GFC also shall use
its best efforts to (i) preserve its business organization and
that of Growth intact, (ii) keep available to itself the present
services of its employees and those of Growth, and (iii) preserve
for itself and Hubco the goodwill of its customers and those of
Growth and others with whom business relationships exist.
5.2. NEGATIVE COVENANTS.
(a) GFC agrees that from the date hereof to the
Effective Time, except as otherwise approved by Hubco in writing
or as permitted or required by this Agreement, it will not, nor
will it permit Growth to:
(i) change any provision of its Certificate of
Incorporation or By-laws or any similar governing documents
of GFC or Growth;
(ii) change the number of shares of its
authorized or issued capital stock or issue or grant any
option, warrant, call, commitment, subscription, right to
purchase or agreement of any character relating to the
authorized or issued capital stock of GFC or Growth, 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, GFC may declare, set aside and pay cash
dividends per share of GFC Common Stock at the same time or
promptly after cash dividends with respect to the same
period are declared, set aside or paid by Hubco, provided
that the record date for GFC dividends shall be no earlier
than the record date for the associated Hubco dividends and
the amount of dividends per share of GFC Common Stock shall
not exceed $.12 per calendar quarter and shall not exceed
$.36 in the aggregate from the date hereof through the
Effective Time;
(iii) grant any severance or termination pay
(other than pursuant to policies or contracts of GFC in
effect on the date hereof and disclosed to Hubco pursuant
hereto) 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 with respect to employee increases in the
ordinary course of business and consistent with past
practices and policies, and except that GFC may pay bonuses
to its employees as specified in Section 5.2(a)(iii) of the
GFC Disclosure Schedule (but not in excess of the amounts
set forth therein);
(iv) 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 GFC or
Growth;
(v) make any capital expenditures other than
pursuant to binding commitments existing on the date hereof
and other than expenditures necessary to maintain existing
assets in good repair;
(vi) file any applications or make any contract
with respect to branching or site location or relocation,
except with respect to the proposed Morristown branch, about
which GFC shall keep Hubco fully and promptly informed;
(vii) agree to acquire in any manner whatsoever
(other than to realize upon collateral for a defaulted loan)
any business or entity;
(viii) make any material change in its accounting
methods or practices, other than changes required in
accordance with generally accepted accounting principles or
regulatory authorities;
(ix) 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;
(x) without Hubco's prior consent which shall not
be unreasonably withheld, 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; or
(xi) agree to do any of the foregoing.
5.3. NO SOLICITATION. GFC and Growth 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 GFC or Growth (an "Acquisition
Transaction"). Notwithstanding the foregoing, GFC may enter into
discussions or negotiations or provide any information in
connection with an unsolicited possible Acquisition Transaction
if the Board of Directors of GFC, 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. GFC will 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 GFC 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, GFC agrees to provide Hubco, and Hubco agrees to
provide GFC, with internally prepared profit and loss statements
no later than 15 days after the close of each calendar month.
As soon as reasonably available, but in no event more than 45
days after the end of each fiscal quarter (other than the last
fiscal quarter of each fiscal year) ending on or after September
30, 1995, GFC will deliver to Hubco and Hubco will deliver to GFC
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, GFC will deliver to Hubco and Hubco will deliver to GFC
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) GFC and Growth shall permit Hubco and its
representatives, and Hubco and the Bank shall permit GFC and its
representatives, reasonable access to their respective
properties, and shall disclose and make available to Hubco and
its representatives, or GFC and its representatives as the case
may be, all books, papers and records relating to its assets,
stock ownership, properties, operations, obligations and
liabilities, including, but not limited to, all books of account
(including the general ledger), tax records, minute books of
directors' and stockholders' meetings, organizational documents,
by-laws, material contracts and agreements, filings with any
regulatory authority, accountants' work papers, litigation files,
plans affecting employees, and any other business activities or
prospects in which Hubco and its representatives or GFC 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 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, GFC
acknowledges that Hubco may be involved in discussions concerning
other potential acquisitions and Hubco shall not be obligated to
disclose such information to GFC 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 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 two 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 Stockholders
Meeting referred to in Section 5.7 hereof and qualifying under
applicable federal and state securities laws the Hubco Common
Stock to be issued to GFC stockholders in connection with the
Merger, the parties hereto shall cooperate in the preparation and
filing by Hubco of a Registration Statement with the SEC which
shall include an appropriate 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 GFC to
the GFC 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 GFC with such information
concerning Hubco and its subsidiaries 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 GFC if at any time prior to the GFC
shareholders' meeting referred to in Section 5.7 hereof, any
information provided by Hubco in the Proxy Statement/Prospectus
becomes incorrect or incomplete in any material respect and to
provide GFC with the information needed to correct such
inaccuracy or omission. Hubco shall furnish GFC with such
supplemental information as may be necessary in order to cause
the Proxy Statement/Prospectus, insofar as it relates to Hubco
and its subsidiaries, to comply with Section 5.6(a) after the
mailing thereof to GFC shareholders.
(c) GFC shall furnish Hubco with such information
concerning GFC and Growth to cause the Proxy
Statement/Prospectus, insofar as it relates to such corporations,
to comply with Section 5.6(a) hereof. GFC agrees promptly to
advise Hubco if at any time prior to the GFC shareholders'
meeting, referred to in Section 5.6(a) hereof, any information
provided by GFC in the Proxy Statement/Prospectus becomes
incorrect or incomplete in any material respect and to provide
Hubco with the information needed to correct such inaccuracy or
omission. GFC shall furnish Hubco with such supplemental
information as may be necessary in order to cause the Proxy
Statement/Prospectus, insofar as it relates to GFC and Growth to
comply with Section 5.6(a) after the mailing thereof to GFC
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. GFC shall promptly furnish Hubco with such
information regarding the GFC shareholders as Hubco requires to
enable it to determine what filings are required hereunder. GFC
authorizes Hubco to utilize in such filings the information
concerning GFC and Growth provided to Hubco in connection with,
or contained in, the Proxy Statement/Prospectus. Hubco shall
furnish GFC's counsel with copies of all such filings and keep
GFC advised of the status thereof. Hubco and GFC shall as
promptly as practicable file the Registration Statement
containing the Proxy Statement/Prospectus with the SEC, and each
of Hubco and GFC shall promptly notify the other of all
communications, oral or written, with the SEC concerning the
Registration Statement and the Proxy Statement/Prospectus.
(e) Hubco shall cause the Hubco Common Stock issuable
pursuant to the Merger to be listed on the National Association
of Securities Dealers Automated Quotation ("NASDAQ") System at
the Effective Time.
(f) The parties hereto will cooperate with each other
and use their best efforts to prepare all necessary
documentation, to effect all necessary filings and to obtain all
necessary permits, consents, approvals and authorizations of all
third parties and governmental bodies necessary to consummate the
transactions contemplated by this Agreement as soon as possible,
including, without limitation, those required by the FDIC, the
FRB, the Department and the DEP. The parties shall each have the
right to review in advance all filings with, including all
information relating to the other, as the case may be, and any of
their respective subsidiaries, which appears in any filing made
with, or written material submitted to, any third party or
governmental body in connection with the transactions
contemplated by this Agreement.
(g) Each of the parties will promptly furnish each
other with copies of written communications received by them or
any of their respective subsidiaries from, or delivered by any of
the foregoing to, any governmental body in respect of the
transactions contemplated hereby with respect to the Merger.
(h) GFC 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
GFC 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. GFC agrees to
provide Hubco with any information, certificates, documents or
other materials about GFC 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. GFC 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 or any such acquisition or issuance of securities.
Hubco shall reimburse GFC for reasonable expenses thus incurred
by GFC should this transaction be terminated for any reason other
than Section 7.1(i). Hubco shall not file with the SEC any
registration statement or amendment thereto or supplement thereof
containing information regarding GFC unless GFC shall have
consented to such filing. GFC shall not unreasonably delay or
withhold any such consent. GFC acknowledges that Hubco
shareholder approval may be required for the Merger in the event
another acquisition is announced prior to the Closing Date.
5.7. APPROVAL OF STOCKHOLDERS. GFC will (a) take all
steps necessary duly to call, give notice of, convene and hold a
meeting of the stockholders of GFC (the "Stockholders Meeting")
for the purpose of securing the approval of stockholders of this
Agreement, (b) 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 its investment banker withdraws its
fairness opinion prior to the Stockholders' Meeting, recommend to
the stockholders of GFC the approval of this Agreement and the
transactions contemplated hereby and use its best efforts to
obtain, as promptly as practicable, such approvals, and (c)
cooperate and consult with Hubco with respect to each of the
foregoing matters.
To the extent Hubco or its counsel deems it necessary,
Hubco shall take all steps necessary to obtain the approval of
its shareholders as promptly as possible. In connection
therewith, Hubco shall take all steps necessary to duly call,
give notice and convene a meeting of its shareholders for such
purpose.
5.8. FURTHER ASSURANCES. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to
use its 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 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.
Hubco agrees that from the date hereof to the Effective
Time, except as otherwise approved by GFC in writing or as
permitted or required by this Agreement, it will not, nor will it
permit the Bank to take any action that would result in any of
its representations and warranties contained in Article IV of
this Agreement not being true and correct in any material respect
at the Effective Time or that would cause any of its conditions
to Closing not to be satisfied or that would constitute a breach
or default of its obligations under this Agreement or which is
reasonably likely to delay or jeopardize the receipt of any of
the regulatory approvals required hereby (except that any delay
in the receipt of any regulatory approval required hereby arising
from an action taken by HUBCO or the Bank with respect to the
possible acquisition of any other banking or financial
institutions shall not give rise to a claim by GFC that Hubco has
breached this provision).
From and after the execution and delivery of this
Agreement and until the Effective Time, HUBCO and the Bank will:
(a) Conduct their business and operate only in the
usual ordinary course of business and maintain
their properties, books, contracts, business,
operations, commitments, records, loans,
investments and any trust operations in accordance
with generally accepted accounting principles;
(b) conduct their business and operate only in
accordance with sound business and banking
practices; and
(c) remain in good standing with all applicable
banking regulatory authorities.
5.9. PUBLIC ANNOUNCEMENTS. Hubco and GFC 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 transaction contemplated
hereby, and Hubco and GFC 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
transaction contemplated hereby, except as may be otherwise
required by law or regulation in the opinion of counsel.
5.10. FAILURE TO FULFILL CONDITIONS. In the event
that Hubco or GFC determines that a material condition to its
obligation to consummate the transactions contemplated hereby
cannot be fulfilled on or prior to June 30, 1996 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, GFC and Hubco will promptly
inform the other of any facts applicable to GFC 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 authority or which would otherwise
prevent or materially delay completion of the Merger.
5.11. RETENTION OF EMPLOYEES, CERTAIN EXECUTIVE
OFFICERS OF GROWTH; BENEFITS.
(a) Following consummation of the Merger, to the
extent practicable, the Bank will use its best efforts to retain
Growth's existing officers and employees ("employees"), with
levels of aggregate total compensation (salary plus benefits)
similar to those currently provided by Growth.
(b) Following consummation of the Merger, the Bank
intends to make available to all employees of Growth employed by
the Bank coverage under the benefit plans generally available to
the Bank's employees (including pension and health and
hospitalization) on the terms and conditions available to the
Bank's newly hired employees. At Hubco's option, GFC's 401(k)
plan will either be terminated or rolled over into Hubco's 401(k)
plan; in either event, all employer and employee contributions to
GFC's 401(k) plan will become fully vested as of the Effective
Time. Employees of Growth employed by the Bank will not receive
credit for prior employment by GFC or Growth, except that credit
for prior service will be given for the sole purpose of
determining whether such employees are eligible to participate in
the Bank's medical, vacation, sick leave, disability, 401(k),
pension, and other employee benefit plans. No prior existing
condition limitation shall be imposed with respect to any medical
coverage plan of the Bank.
(c) Following consummation of the Merger, Hubco shall
honor those written employment, change in control and termination
agreements by and between GFC and/or Growth and certain employees
set forth in Section 5.11(c) of the GFC Disclosure Schedule and
shall honor the calculations as to payments set forth in Section
5.11(c) of the GFC Disclosure Schedule.
(d) At or prior to the Effective Time, all employee
participants in GFC's "SERP" plan described in Section 5.11(d) of
the GFC Disclosure Schedule shall become 100% vested in all
rights and benefits under such plan, such plan shall be
terminated by GFC at or prior to the Effective Time, and all
amounts due to participants under such plan shall be paid out to
the participants by GFC.
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 such Schedules shall correct or cure any warranty
which was untrue when made, but shall enable the disclosure of
subsequent facts or events to maintain the truthfulness of any
warranty.
5.13. TRANSACTION EXPENSES OF GFC AND HUBCO. GFC
shall advise Hubco monthly of all out-of-pocket expenses which
GFC has incurred in connection with this transaction. Hubco
shall make all arrangements with respect to the printing and
mailing of the Proxy Statement/Prospectus and, subject to Section
8.1(b) hereof, Hubco shall pay all expenses related to such
printing and mailing. In addition, Hubco shall pay all expenses
and fees related to filing of the Proxy Statement/Prospectus and
related documents with the SEC and filings pursuant to state
"blue sky" laws and regulations in connection with the Merger.
5.14. AFFILIATES. Simultaneous with the execution and
delivery of this Agreement, GFC shall deliver to Hubco copies of
letter agreements, each substantially in the form of Exhibit
5.14, executed by all directors and executive officers of GFC.
Promptly, but in any event within two weeks, after the execution
and delivery of this Agreement, GFC shall deliver to Hubco (a) a
letter identifying all persons who, to the knowledge of GFC, may
be deemed to be affiliates of GFC under Rule 145 of the
Securities Act, including, without limitation, all directors and
executive officers of GFC and (b) copies of letter agreements,
each substantially in the form of Exhibit 5.14, executed by each
such person so identified as an affiliate of GFC, for whom a
signed "affiliate's letter" has not previously been delivered to
Hubco.
5.15. POOLING AND TAX-FREE REORGANIZATION TREATMENT.
Prior to the date hereof, Hubco has not taken any action or
failed to take any action which would disqualify the Merger for
pooling of interests accounting treatment, and before the
Effective Time neither Hubco nor GFC 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, or as a "pooling-of-interests" for accounting purposes
unless Hubco agrees to waive the condition contained in Section
6.2(c).
5.16. COMPLIANCE WITH THE INDUSTRIAL SITE RECOVERY
ACT. GFC, at its sole cost and expense, shall obtain prior to
the Effective Time, either: (a) a Letter of Non-Applicability
from the DEP stating that none of the facilities located in New
Jersey owned or operated by GFC (each, a "Facility") is an
"industrial establishment," as such term is defined under ISRA;
(b) a Remediation Agreement issued by the DEP pursuant to ISRA
authorizing the consummation of the transactions contemplated by
this Agreement; (c) a Negative Declaration approval, Remedial
Action Workplan approval, No Further Action letter or other
document or documents issued by the DEP advising that the
requirements of ISRA have been satisfied with respect to each
Facility subject to ISRA; or (d) an opinion of counsel, in form
and substance reasonably satisfactory to Hubco, that ISRA is
inapplicable to, or has been complied with in respect of, each
Facility. In the event GFC obtains a remediation Agreement, GFC
will post or have posted an appropriate Remediation Funding
Source or will have obtained the DEP's approval to self- guaranty
any Remediation Funding Source required under any such
Remediation Agreement.
5.17. INDEMNIFICATION. Hubco agrees that it will, and
will cause the Bank to, after the Effective Time, and to the
fullest extent permitted by applicable law and the corporate
documents of Hubco and the Bank, provide to the directors and
officers of GFC indemnification equivalent to that provided by or
available under the Certificate of Incorporation and Bylaws of
GFC or permissible to the fullest extent permitted under the BCA
with respect to acts or omissions occurring prior to the
Effective Time, including without limitation the authorization of
this Agreement and the transactions contemplated hereby, for a
period of six years from the Effective Time, or in the case of
claims made prior to the end of such six year period, until such
claims are finally resolved. To the extent permitted by
applicable law, Hubco or the Bank shall advance expenses as
incurred for legal counsel and otherwise in connection with the
foregoing indemnification. In order to satisfy this obligation,
Hubco will procure continuing director and officer liability
coverage for officers, directors and employees of GFC and Growth
for a period of six years after the Effective Time from a
reputable insurance company issuing such policies, with terms and
conditions (other than the amount of premiums) substantially
similar to or better than those in effect under GFC's existing
directors' and officers' insurance policy.
ARTICLE VI - CLOSING CONDITIONS
6.1. CONDITIONS OF 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 GFC STOCKHOLDERS; SEC REGISTRATION.
This Agreement and the transactions contemplated hereby shall
have been approved by the requisite vote of the stockholders of
GFC and, if necessary in the opinion of Hubco's counsel, the
stockholders of Hubco. The Hubco Registration Statement shall
have been declared effective by the SEC and shall not be subject
to a stop order or any threatened stop order, and the issuance of
the Hubco Common Stock shall have been qualified in every state
where such qualification is required under the applicable state
securities laws.
(b) REGULATORY FILINGS. All necessary regulatory or
governmental approvals and consents (including without limitation
any required approval of the FDIC, the Department, the FRB and
the DEP) required to consummate the transactions contemplated
hereby shall have been obtained without any term or condition
which would materially impair the value of GFC and Growth, 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 Hart-Scott-Rodino
waiting period if applicable) shall have expired.
(c) SUITS AND PROCEEDINGS. No order, judgment or
decree shall be outstanding against a party hereto or a third
party that would have the effect of preventing completion of the
Merger; no suit, action or other proceeding shall be pending or
threatened by any governmental body in which it is sought to
restrain or prohibit the Merger; and no suit, action or other
proceeding shall be pending before any court or governmental
agency in which it is sought to restrain or prohibit the Merger
or obtain other substantial monetary or other relief against one
or more parties hereto in connection with this Agreement and
which Hubco or GFC 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 GFC each shall have
received an opinion of Pitney, Hardin, Kipp & Szuch dated as of
the Closing Date, in form and substance reasonably satisfactory
to Hubco and to GFC and its counsel, based, in each case, upon
representation letters substantially in the form of Exhibit 6.1
and as otherwise required by Pitney, Hardin, Kipp & Szuch, that
for federal and state income tax purposes, the Merger will
qualify as a tax-free reorganization under Section 368(a) of the
Code, and except with regard to cash received in exchange for
fractional shares, that no gain or loss will be recognized by the
holders of GFC Common Stock in exchange for their shares of Hubco
Common Stock.
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 GFC AND GROWTH. Except for those representations
which are made as of a particular date, the representations and
warranties of GFC contained in this Agreement shall be true and
correct in all material respects on the date of the Closing
("Closing Date") as though made on and as of the Closing Date.
GFC 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 GFC 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) either (x) the facts
disclosed in such supplement or amendment would not either alone,
or together with any other supplements or amendments to the GFC
Disclosure Schedule, materially adversely effect the
representation as to which the supplement or amendment relates or
(y) such supplement or amendment remedied any material breach in
accordance with Section 7.1(d)(ii).
(b) OPINION OF COUNSEL. Hubco shall have received an
opinion of counsel to GFC, dated the Closing Date, in form and
substance reasonably satisfactory to Hubco, covering the matters
set forth on Exhibit 6.2 hereto.
(c) POOLING OF INTERESTS. Hubco shall have received
assurances from its accountants, Arthur Anderson LLP, to the
effect that the Merger shall be qualified to be treated by Hubco
as a pooling-of-interest for accounting purposes.
(d) CERTIFICATES. GFC 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.
(e) NO PARACHUTE PAYMENTS. No payments under any
Severance Agreement or any other plan or arrangement with GFC or
Growth will constitute an "excess parachute payment," as defined
in Section 280G of the Code or regulations promulgated
thereunder.
(f) LEGAL FEES. GFC shall have furnished Hubco with
letters from all attorneys representing GFC and Growth in any
matters certifying that all legal fees have been paid in full for
services rendered as of the Effective Time.
(g) MERGER RELATED EXPENSE. GFC 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
GFC shall be reasonable.
(h) DISSENTING SHARES. As of the Closing Date, the
number of shares of GFC Common Stock as to which dissenters'
rights shall have been demanded and not withdrawn or voided
pursuant to operation of law shall be less than 10% of the number
of shares of GFC Common Stock issued and outstanding.
6.3. CONDITIONS TO THE OBLIGATIONS OF GFC UNDER THIS
AGREEMENT. The obligations of GFC under this Agreement shall be
further subject to the satisfaction or waiver, at or prior to the
Effective Time, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
OBLIGATIONS OF HUBCO. Except for those representations which are
made as of a particular date, the representations and warranties
of Hubco contained in this Agreement shall be true and correct in
all material respects on the Closing Date as though made on and
as of the Closing Date. Hubco shall have performed in all
material respects, the agreements, covenants and obligations to
be performed by it prior to the Closing Date. With respect to
any representation or warranty which as of the Closing Date has
required a supplement or amendment to the Hubco Disclosure
Schedule to render such representation or warranty true and
correct in all material respects as of the Closing Date, the
representation and warranty shall be deemed true and correct as
of the Closing Date only if (i) the information contained in the
supplement or amendment to the Disclosure Schedule related to
events occurring following the execution of this Agreement and
(ii) the facts disclosed in such supplement or amendment would
not either alone, or together with any other supplements or
amendments to the Hubco Disclosure Schedule, materially adversely
effect the representation as to which the supplement or amendment
relates.
(b) OPINION OF COUNSEL TO HUBCO. GFC shall have
received an opinion of counsel to Hubco, dated the Closing Date,
in form and substance reasonably satisfactory to GFC, covering
the matters set forth on Exhibit 6.3 hereto.
(c) FAIRNESS OPINION. GFC shall have received an
opinion from McConnell, Budd & Downes, Inc., dated no more than
three days prior to the date the Proxy Statement/Prospectus is
mailed to GFC's stockholders, to the effect that, in its opinion,
the consideration to be paid to stockholders of GFC hereunder is
fair to such stockholders from a financial point of view
("Fairness Opinion"), and Hubco shall not have taken any action
(including the announcement of any other proposed acquisition)
which causes McConnell, Budd & Downes, Inc. to withdraw its
Fairness Opinion prior to the Closing.
(d) MINIMUM MEDIAN PRE-CLOSING PRICE. The Median Pre-
Closing Price shall be no less than $14.75; PROVIDED, that if GFC
chooses not to consummate the Merger due to the failure of this
condition, then GFC shall be obligated to reimburse Hubco and the
Bank for all of their expenses in connection with this Agreement
and the transactions contemplated hereby, including without
limitation legal, accounting and printing fees and expenses.
(e) CERTIFICATES. Hubco shall have furnished GFC with
such certificates of its officers or others and such other
documents to evidence fulfillment of the conditions set forth in
this Section 6.3 as GFC 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 stockholders of GFC:
(a) by mutual written consent of the parties hereto;
(b) by Hubco or GFC (i) if the Effective Time shall
not have occurred on or prior to June 30, 1996 unless the failure
of such occurrence shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe its
agreements set forth herein to be performed or observed by such
party at or before the Effective Time, or (ii) if a vote of the
stockholders of GFC is taken and such stockholders fail to
approve this Agreement at the meeting (or any adjournment
thereof) held for such purpose, or (iii) if a vote of the
stockholders of Hubco is taken and such stockholders fail to
approve this Agreement at the meeting (or any adjournment
thereof) held for such purpose.
(c) by Hubco or GFC 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 authority or by Hubco upon written notice to GFC if
any such application is approved with conditions which materially
impair the value of GFC and Growth, taken as a whole, to Hubco.
(d) by Hubco if (i) there shall have occurred a
material adverse change in the business, operations, assets, or
financial condition of GFC and Growth, taken as a whole, from
that disclosed by GFC in GFC's Quarterly Report on Form 10-Q for
the six months ended June 30, 1995 and GFC's Annual Report on
Form 10-K for the year ended December 31, 1994; or (ii) there was
a material breach in any representation, warranty, covenant,
agreement or obligation of GFC hereunder and such breach shall
not have been remedied within 30 days after receipt by GFC of
notice in writing from Hubco to GFC specifying the nature of such
breach and requesting that it be remedied.
(e) by GFC, if (i) there shall have occurred a
material adverse change in the business, operations, assets or
financial condition of Hubco and its subsidiaries taken as a
whole from that disclosed by Hubco in Hubco's Quarterly Report on
Form 10-Q for the six months ended June 30, 1995 and Hubco's
Annual Report on Form 10-K for the fiscal year ended December 31,
1994; 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 GFC specifying the
nature of such breach and requesting that it be remedied.
(f) by Hubco if the conditions set forth in Section
6.2 are not satisfied and are not capable of being satisfied by
June 30, 1996.
(g) by GFC if the conditions set forth in Section 6.3
are not satisfied; and are not capable of being satisfied by June
30, 1996; PROVIDED, that if GFC chooses to terminate this
Agreement due to the failure of the condition set forth in
Section 6.3(d), then GFC shall be obligated to reimburse Hubco
and the Bank for all of their expenses in connection with this
Agreement and the transactions contemplated hereby, including
without limitation legal, accounting and printing fees and
expenses.
(h) by GFC, if GFC'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.
7.2. EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement by either Hubco or
GFC pursuant to Section 7.1, this Agreement (other than Section
5.5(b) and Section 8.1) shall forthwith become void and have no
effect, without any liability on the part of any party or its
officers, directors or stockholders. Nothing contained herein,
however, shall relieve any party from any liability for any
breach of this Agreement.
7.3. AMENDMENT. This Agreement may be amended by
action taken by the parties hereto at any time before or after
adoption of this Agreement by the stockholders of GFC but, after
any such adoption, no amendment shall be made which reduces or
changes the amount or form of the consideration to be delivered
to the shareholders of GFC without the approval of such
stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties hereto.
7.4. EXTENSION; WAIVER. The parties may, at any time
prior to the Effective Time of the Merger, (i) extend the time
for the performance of any of the obligations or other acts of
the other parties hereto; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any
document delivered pursuant thereto; or (iii) waive compliance
with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or
waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party against which the waiver
is sought to be enforced.
ARTICLE VIII - MISCELLANEOUS
8.1. EXPENSES.
(a) Except as otherwise expressly stated herein, all
costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby (including legal, accounting
and investment banking fees and expenses) shall be borne by the
party incurring such costs and expenses. Notwithstanding the
foregoing, Hubco may bear the expenses of the Bank and GFC may
bear the expenses of Growth.
(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 this Section 8.2
and the provisions of Section 5.5(b).
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.
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
Attn.: Kenneth T. Neilson, President
and Chief Executive Officer
Copy to:
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
Attn.: D. Lynn Van Borkulo-Nuzzo, Esq.
And copy to:
Pitney, Hardin, Kipp & Szuch
(Delivery) 200 Campus Drive
Florham Park, New Jersey
(Mail) P.O. Box 1945
Morristown, New Jersey 07962-1945
Attn.: Michael W. Zelenty, Esq.
(b) If to GFC, to:
Growth Financial Corp.
(Delivery) 1500 Route 202
Harding Township, New Jersey
(Mail) P.O. Box 401
Basking Ridge, New Jersey 07920
Attn.: President and Chief Executive Officer
Copy to:
John Bruno, Esq.
Muldoon, Murphy & Faucette
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20015
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. 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.
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.
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, GFC and Growth
have caused this Agreement to be executed by their duly
authorized officers as of the day and year first above written.
ATTEST: HUBCO, Inc.
By: /s/ D. LYNN VAN BORKULO-NUZZO By: /s/ KENNETH T. NEILSON
----------------------------- -----------------------------
D. Lynn Van Borkulo-Nuzzo, Kenneth T. Neilson, President
Secretary and Chief Executive Officer
ATTEST: GROWTH FINANCIAL CORP.
By: /s/ RICHARD G. WHITEHEAD By: /s/ DALE G. POTTER
----------------------------- -------------------------
Richard G. Whitehead, Dale G. Potter, President
Assistant Secretary and Chief Executive Officer
ATTEST: HUDSON UNITED BANK
By: /s/ D. LYNN VAN BORKULO-NUZZO By: /s/ KENNETH T. NEILSON
----------------------------- -----------------------------
D. Lynn Van Borkulo-Nuzzo, Kenneth T. Neilson, President
Secretary and Chief Executive Officer
ATTEST: GROWTH BANK
By: /s/ RICHARD G. WHITEHEAD By: /s/ DALE G. POTTER
----------------------------- -------------------------
Richard G. Whitehead, Dale G. Potter, President
Assistant Secretary and Chief Executive Officer
Exhibit 99.6
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") dated
August 18, 1995, is by and between HUBCO, Inc., a New Jersey
corporation and registered bank holding company ("HUBCO") for
Hudson United Bank ("HUB"), and Growth Financial Corp., a New
Jersey corporation and registered bank holding company ("GFC")
for Growth Bank (the "Bank").
BACKGROUND
1. HUBCO, HUB, GFC and the Bank have executed an
Agreement and Plan of Merger (the "Merger Agreement") pursuant to
which HUBCO will acquire GFC through a merger of GFC with and
into HUBCO (the "Merger").
2. As an inducement to HUBCO to enter into the Merger
Agreement and in consideration for such entry, GFC desires to
grant to HUBCO an option to purchase authorized but unissued
shares of common stock of GFC in an amount and on the terms and
conditions hereinafter set forth.
AGREEMENT
In consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger
Agreement, HUBCO and GFC, intending to be legally bound hereby,
agree:
1. GRANT OF OPTION. GFC hereby grants to HUBCO the
option to purchase 336,850 shares of common stock, $1.00 par
value (the "Common Stock") of GFC at an exercise price of $12.25
per share (the "Option Price"), on the terms and conditions set
forth herein (the "Option").
2. EXERCISE OF OPTION. This Option shall not be
exercisable until the occurrence of a Triggering Event (as such
term is hereinafter defined). Upon or after the occurrence of a
Triggering Event (as such term is hereinafter defined), HUBCO may
exercise the Option, in whole or in part, at any time or from
time to time until the termination of this Agreement in
accordance with Section 19 and in accordance with the terms and
conditions hereof.
The term "Triggering Event" means the occurrence of any
of the following events:
A person or group (as such terms are defined in the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations thereunder) other than HUBCO or an
affiliate of HUBCO, without HUBCO's prior written consent:
a. acquires beneficial ownership (as such term
is defined in Rule 13d-3 as promulgated under the Exchange Act)
of at least 20% of the then outstanding shares of Common Stock;
b. subsequent to the date hereof enters into a
written letter of intent or an agreement with GFC pursuant to
which such person or any affiliate of such person would (i) merge
or consolidate, or enter into any similar transaction with GFC,
(ii) acquire all or a significant portion of the assets or
liabilities of GFC, or (iii) acquire beneficial ownership of
securities representing, or the right to acquire beneficial
ownership or to vote securities representing 10% or more of the
then outstanding shares of Common Stock;
c. makes a filing with any bank or thrift
regulatory authorities or publicly announces a bona fide proposal
(a "Proposal") for (i) any merger, consolidation or acquisition
of all or a significant portion of all the assets or liabilities
of GFC or any other business combination involving GFC, or (ii)
a transaction involving the transfer of beneficial ownership of
securities representing, or the right to acquire beneficial
ownership or to vote securities representing, 20% or more of the
outstanding shares of Common Stock, and thereafter, if such
Proposal has not been Publicly Withdrawn (as such term is
hereinafter defined) at least 15 days prior to the meeting of
stockholders of GFC called to vote on the Merger and GFC
stockholders fail to approve the Merger by the vote required by
applicable law at the meeting of stockholders called for such
purpose; or
d. makes a bona fide Proposal and thereafter,
but before such Proposal has been Publicly Withdrawn, GFC
willfully takes any action in any manner which would materially
interfere with its desire or ability to enter into a definitive
Merger Agreement or its ability to consummate the Merger or
materially reduce the value of the transaction to HUBCO.
The term "Triggering Event" also means the taking of
any direct or indirect action by GFC or any of its directors,
officers or agents to invite or solicit any proposal which has as
its purpose a tender offer for the shares of GFC Common Stock, a
merger, consolidation, plan of exchange, plan of acquisition or
reorganization of GFC, or a sale of shares of GFC Common Stock or
any significant portion of its assets or liabilities.
The term "significant portion" means 25% of the assets
or liabilities of GFC.
"Publicly Withdrawn", for purposes of clauses (c) and
(d) above, shall mean an unconditional bona fide withdrawal of
the Proposal coupled with a public announcement of no further
interest in pursuing such Proposal or in acquiring any
controlling influence over GFC or in soliciting or inducing any
other person (other than HUBCO or any affiliate) to do so.
Notwithstanding the foregoing, the Option may not be
exercised at any time (i) in the absence of any required
governmental or regulatory approval or consent necessary for GFC
to issue the Option Shares or HUBCO to exercise the Option or
prior to the expiration or termination of any waiting period
required by law, or (ii) so long as any injunction or other
order, decree or ruling issued by any federal or state court of
competent jurisdiction is in effect which prohibits the sale or
delivery of the Option Shares.
GFC shall notify HUBCO promptly in writing of the
occurrence of any Triggering Event known to it, it being
understood that the giving of such notice by GFC shall not be a
condition to the right of HUBCO to exercise the Option. GFC will
not take any action which would have the effect of preventing or
disabling GFC from delivering the Option Shares to HUBCO upon
exercise of the Option or otherwise performing its obligations
under this Agreement.
In the event HUBCO wishes to exercise the Option, HUBCO
shall send a written notice to GFC (the date of which is
hereinafter referred to as the "Notice Date") specifying the
total number of Option Shares it wishes to purchase and a place
and date for the closing of such a purchase (a "Closing");
provided, however, that a Closing shall not occur prior to two
days after the later of receipt of any necessary regulatory
approvals and the expiration of any legally required notice or
waiting period, if any.
3. PAYMENT AND DELIVERY OF CERTIFICATES. At any
Closing hereunder (a) HUBCO will make payment to GFC of the
aggregate price for the Option Shares so purchased by wire
transfer of immediately available funds to an account designated
by GFC, (b) GFC will deliver to HUBCO a stock certificate or
certificates representing the number of Option Shares so
purchased, free and clear of all liens, claims, charges and
encumbrances of any kind or nature whatsoever created by or
through GFC, registered in the name of HUBCO or its designee, in
such denominations as were specified by HUBCO in its notice of
exercise and bearing a legend as set forth below and (c) HUBCO
shall pay any transfer or other taxes required by reason of the
issuance of the Option Shares so purchased.
Unless a registration statement is filed and declared
effective under Section 4 hereof, a legend will be placed on each
stock certificate evidencing Option Shares issued pursuant to
this Agreement, which legend will read substantially as follows:
The shares of stock evidenced by this certificate
have not been registered for sale under the Securities
Act of 1933 (the "1933 Act"). These shares may not be
sold, transferred or otherwise disposed of unless a
registration statement with respect to the sale of such
shares has been filed under the 1933 Act and declared
effective or, in the opinion of counsel reasonably
acceptable to Growth Financial Corp., said transfer
would be exempt from registration under the provisions
of the 1933 Act and the regulations promulgated
thereunder.
4. REGISTRATION RIGHTS. Upon or after the occurrence
of a Triggering Event and upon receipt of a written request from
HUBCO, GFC shall prepare and file a registration statement with
the Securities and Exchange Commission, covering the Option and
such number of Option Shares as HUBCO shall specify in its
request, and GFC shall use its best efforts to cause such
registration statement to be declared effective in order to
permit the sale or other disposition of the Option and the Option
Shares, provided that HUBCO shall in no event have the right to
have more than one such registration statement become effective.
In connection with such filing, GFC shall use its best
efforts to cause to be delivered to HUBCO such certificates,
opinions, accountant's letters and other documents as HUBCO shall
reasonably request and as are customarily provided in connection
with registrations of securities under the Securities Act of
1933, as amended. All expenses incurred by GFC in complying with
the provisions of this Section 4, including without limitation,
all registration and filing fees, printing expenses, fees and
disbursements of counsel for GFC and blue sky fees and expenses
shall be paid by HUBCO. Underwriting discounts and commissions
to brokers and dealers relating to the Option Shares, fees and
disbursements of counsel to HUBCO and any other expenses incurred
by HUBCO in connection with such registration shall be borne by
HUBCO. In connection with such filing, GFC shall indemnify and
hold harmless HUBCO against any losses, claims, damages or
liabilities, joint or several, to which HUBCO may become subject,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any
untrue statement with respect to GFC or alleged untrue statement
with respect to GFC of any material fact with respect to GFC
contained in any preliminary or final registration statement or
any amendment or supplement thereto, or arise out of a material
fact with respect to GFC required to be stated therein or
necessary to make the statements therein with respect to GFC not
misleading; and GFC will reimburse HUBCO for any legal or other
expense reasonably incurred by HUBCO in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that GFC will not be
liable in any case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement of omission or alleged
omission made in such preliminary or final registration statement
or such amendment or supplement thereto in reliance upon and in
conformity with written information furnished by or on behalf of
HUBCO specifically for use in the preparation thereof. HUBCO
will indemnify and hold harmless GFC to the same extent as set
forth in the immediately preceding sentence but only with
reference to written information specifically furnished by or on
behalf of HUBCO for use in the preparation of such preliminary or
final registration statement or such amendment or supplement
thereto; and HUBCO will reimburse GFC for any legal or other
expense reasonably incurred by GFC in connection with
investigating or defending any such loss, claim, damage,
liability or action.
5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the
event of any change in the Common Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations,
conversions, exchanges of shares or the like, then the number and
kind of Option Shares and the Option Price shall be appropriately
adjusted.
Subject to the last sentence of this paragraph, in the
event any capital reorganization or reclassification of the
Common Stock, or any consolidation, merger or similar transaction
of GFC with another entity, or in the event any sale of all or
substantially all of the assets of GFC shall be effected in such
a way that the holders of Common Stock shall be entitled to
receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale,
lawful and adequate provisions (in form reasonably satisfactory
to the holder hereof) shall be made whereby the holder hereof
shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions specified herein and in
lieu of the Common Stock immediately theretofore purchasable and
receivable upon exercise of the rights represented by this
Option, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for the number
of shares of Common Stock immediately theretofore purchasable and
receivable upon exercise of the rights represented by this Option
had such reorganization, reclassification, consolidation, merger
or sale not taken place; provided, however, that if such
transaction results in the holders of Common Stock receiving only
cash, the holder hereof shall be paid the difference between the
Option Price and such cash consideration without the need to
exercise the Option. Notwithstanding the foregoing, if the
holder hereof is given reasonable notice and opportunity to
exercise this option and receive the Option Shares prior to any
merger of GFC, then the holder's rights with respect to this
option shall be limited to such right to exercise the option and
receive the Option Shares prior to the merger and it shall not
required as a condition to the merger that provision be made to
convert this into an option to acquire the consideration payable
or issuable in the merger.
6. FILINGS AND CONSENTS. Each of HUBCO and GFC will
use its best efforts to make all filings with, and to obtain
consents of, all third parties and governmental authorities
necessary to the consummation of the transactions contemplated by
this Agreement.
Exercise of the Option herein provided shall be subject
to compliance with all applicable laws including, in the event
HUBCO is the holder hereof, approval of the Board of Governors of
the Federal Reserve System and GFC agrees to cooperate with and
furnish to the holder hereof such information and documents as
may be reasonably required to secure such approvals.
7. REPRESENTATIONS AND WARRANTIES OF GFC. GFC hereby
represents and warrants to HUBCO as follows:
a. DUE AUTHORIZATION. GFC has full corporate
power and authority to execute, deliver and perform this
Agreement and all corporate action necessary for execution,
delivery and performance of this Agreement has been duly taken by
GFC.
b. AUTHORIZED SHARES. GFC has taken and, as
long as the Option is outstanding, will take all necessary
corporate action to authorize and reserve for issuance all shares
of Common Stock that may be issued pursuant to any exercise of
the Option.
c. NO CONFLICTS. Neither the execution and
delivery of this Agreement nor consummation of the transactions
contemplated hereby (assuming all appropriate regulatory
approvals) will violate or result in any violation or default of
or be in conflict with or constitute a default under any term of
the certificate of incorporation or by-laws of GFC or, to its
knowledge, any agreement, instrument, judgment, decree, statute,
rule or order applicable to GFC.
8. SPECIFIC PERFORMANCE. The parties hereto
acknowledge that damages would be an inadequate remedy for a
breach of this Agreement and that the obligations of the parties
hereto shall be specifically enforceable. Notwithstanding the
foregoing, HUBCO shall have the right to seek money damages
against GFC for a breach of this Agreement.
9. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof.
10. ASSIGNMENT OR TRANSFER. HUBCO may not sell, assign
or otherwise transfer its rights and obligations hereunder, in
whole or in part, to any person or group of persons other than to
an affiliate of HUBCO. HUBCO represents that it is acquiring the
Option for HUBCO's own account and not with a view to or for sale
in connection with any distribution of the Option. HUBCO is
aware that presently neither the Option nor the Option Shares are
being offered by a registration statement filed with, and
declared effective by, the Securities and Exchange Commission,
but instead are being offered in reliance upon the exemption from
the registration requirements pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
11. AMENDMENT OF AGREEMENT. By mutual consent of the
parties hereto, this Agreement may be amended in writing at any
time, for the purpose of facilitating performance hereunder or to
comply with any applicable regulation of any governmental
authority or any applicable order of any court or for any other
purpose.
12. VALIDITY. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.
13. NOTICES. All notices, requests, consents and other
communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when
delivered personally, by express service, cable, telegram or
telex, or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties as follows:
If to HUBCO:
HUBCO, Inc.
1000 MacArthur Blvd.
Mahwah, NJ 07430
Attn.: Kenneth T. Neilson
President & C.E.O.
With copies to:
D. Lynn Van Borkulo-Nuzzo, Esq.
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
and
Pitney, Hardin, Kipp & Szuch
(Delivery) 200 Campus Drive
Florham Park, New Jersey 07932-0950
(Mail) P.O. Box 1945
Morristown, New Jersey 07962-1945
Attn.: Michael W. Zelenty, Esq.
If to GFC:
Growth Financial Corp.
(Delivery) 1500 Route 202
Harding Township, New Jersey
(Mail) P.O. Box 401
Basking Ridge, New Jersey 07920
Attn.: President and Chief Executive Officer
With a copy to:
John Bruno, Esq.
Muldoon, Murphy & Faucette
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20015
or to such other address as the person to whom notice is to be
given may have previously furnished to the others in writing in
the manner set forth above (provided that notice of any change of
address shall be effective only upon receipt thereof).
14. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New
Jersey.
15. CAPTIONS. The captions in the Agreement are
inserted for convenience and reference purposes, and shall not
limit or otherwise affect any of the terms or provisions hereof.
16. WAIVERS AND EXTENSIONS. The parties hereto may, by
mutual consent, extend the time for performance of any of the
obligations or acts of either party hereto. Each party may
waive (i) compliance with any of the covenants of the other party
contained in this Agreement and/or (ii) the other party's
performance of any of its obligations set forth in this
Agreement.
17. PARTIES IN INTEREST. This Agreement shall be
binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Agreement,
except as provided in Section 10 permitting HUBCO to assign its
rights and obligations hereunder only to an affiliate of HUBCO.
18. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same
agreement.
19. TERMINATION. This Agreement shall terminate upon
either (i) the termination of the Merger Agreement as provided
therein or (ii) the consummation of the transactions contemplated
by the Merger Agreement; provided, however, that if termination
of the Merger Agreement occurs after the occurrence of a
Triggering Event, this Agreement shall not terminate until 18
months after the later of the date of the termination of the
Merger Agreement or the consummation of any proposed transactions
which constitute the Triggering Event.
IN WITNESS WHEREOF, each of the parties hereto,
pursuant to resolutions adopted by its Board of Directors, has
caused this Agreement to be executed by its duly authorized
officer, all as of the day and year first above written.
GROWTH FINANCIAL CORP.
By: /s/ DALE G. POTTER
-----------------------------
Dale Potter, President and
Chief Executive Officer
HUBCO, Inc.
By: /s/ D. LYNN VAN BORKULO-NUZZO
-----------------------------
D. Lynn Van Borkulo-Nuzzo
Executive Vice President
