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): April 28, 1996
HOMETOWN BANCORPORATION, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-16272 06-1199559
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification Number)
20 West Avenue, Darien, Connecticut 06820
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (203) 656-2265
N/A
(Former name or former address, if changed since last report)
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2
ITEM 5. OTHER EVENTS
On April 29, 1996, Hometown Bancorporation, Inc. ("HOMETOWN") issued
a press release announcing that Hometown, its wholly owned subsidiary,
The Bank of Darien (the "BANK OF DARIEN"), HUBCO, Inc. ("HUBCO") and its
wholly owned subsidiary Hudson United Bank ("HUDSON UNITED") had entered
into an Agreement and Plan of Merger dated April 28, 1996 (the "MERGER
AGREEMENT"). Pursuant to the Merger Agreement, Hometown would be merged
with and into HUBCO and, upon consummation of the merger, each
outstanding share of Common Stock, par value $1.00, of Hometown
("HOMETOWN COMMON STOCK") would be converted into the right to receive
$17.75 in cash. Holders of options to purchase Hometown Common Stock
under Hometown's Stock Option Plan would receive cash equal to the
difference between $17.75 and the exercise price of an option multiplied
by the number of shares covered by such option.
Simultaneously with the execution of the Merger Agreement, Hometown
and HUBCO entered into a Stock Option Agreement dated April 28, 1996
(the "STOCK OPTION AGREEMENT") pursuant to which HUBCO would have the
right, under specified circumstances, to purchase up to 435,000 shares
of Hometown Common Stock at a price of $13.75 per share.
Consummation of the merger of Hometown and HUBCO is subject to
customary conditions, including but not limited to receipt of necessary
federal and state regulatory approvals and approval by the stockholders
of Hometown.
In accordance with General Instruction F to Form 8-K, a copy of
Hometown's press release dated April 29, 1996 is attached hereto as
Exhibit 20 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
2(1) Form of Agreement and Plan of Merger dated April 28, 1996
among HUBCO, Inc., Hudson United Bank, Hometown Bancorporation,
Inc. and The Bank of Darien.
2(2) Form of Stock Option Agreement dated April 28, 1996 by and
between HUBCO, Inc. and Hometown Bancorporation, Inc.
20 Press Release dated April 29, 1996 of Hometown Bancorporation,
Inc.
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3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
HOMETOWN BANCORPORATION, INC.
Date: May 10, 1996 By: /S/ KEVIN E. GAGE
Kevin E. Gage
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DOCUMENT
2(1) Form of Agreement and Plan of Merger dated April 28, 1996
among HUBCO, Inc., Hudson United Bank, Hometown Bancorporation,
Inc. and The Bank of Darien.
2(2) Form of Stock Option Agreement dated April 28, 1996 by and
between HUBCO, Inc. and Hometown Bancorporation, Inc.
20 Press Release dated April 29, 1996 of Hometown
Bancorporation, Inc.
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AGREEMENT AND
PLAN OF MERGER
by
and
among
HUBCO, INC.
and
HUDSON UNITED BANK
and
HOMETOWN BANCORPORATION, INC.
and
THE BANK OF DARIEN
Dated: April 28, 1996
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TABLE OF CONTENTS
Page
ARTICLE I - THE MERGER.......................................................1
1.1 The Merger.................................................1
1.2 Effect of the Merger.......................................1
1.3 Certificate of Incorporation...............................2
1.4 By-laws....................................................2
1.5 Directors and Officers.....................................2
1.6 Effective Time and Closing.................................2
1.7 The Bank Merger............................................3
ARTICLE II - CONVERSION OF HBI SHARES........................................3
2.1 Conversion of HBI Common Stock.............................3
2.2 Conversion Procedures......................................4
2.3 Stock Transfer Books.......................................5
2.4 HBI Stock Options..........................................6
2.5 Dissenting Shares..........................................6
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF HBI..........................6
3.1 Corporate Organization.....................................6
3.2 Capitalization.............................................7
3.3 Authority; No Violation....................................8
3.4 Financial Statements.......................................9
3.5 Broker's and Other Fees...................................10
3.6 Absence of Certain Changes or Events......................10
3.7 Legal Proceedings.........................................10
3.8 Taxes and Tax Returns.....................................11
3.9 Employee Benefit Plans....................................12
3.10 Reports...................................................14
3.11 HBI and Darien Information................................15
3.12 Compliance with Applicable Law............................15
3.13 Certain Contracts.........................................16
3.14 Properties and Insurance..................................16
3.15 Minute Books..............................................17
3.16 Environmental Matters.....................................17
3.17 Reserves..................................................18
3.18 No Parachute Payments.....................................19
3.19 Agreements with Bank Regulators...........................19
3.20 Disclosure................................................19
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF HUBCO........................19
4.1 Corporate Organization....................................20
4.2 Capitalization............................................20
4.3 Authority; No Violation...................................21
4.4 Financial Statements......................................22
4.5 Broker's and Other Fees...................................23
4.6 HUBCO and Bank Information................................23
4.7 Disclosures...............................................23
ARTICLE V - COVENANTS OF THE PARTIES........................................24
5.1 Conduct of the Business of HBI............................24
5.2 Negative Covenants........................................24
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5.3 No Solicitation...........................................25
5.4 Current Information.......................................26
5.5 Access to Properties and Records; Confidentiality.........26
5.6 Regulatory Matters........................................27
5.7 Approval of Stockholders..................................29
5.8 Further Assurances........................................29
5.9 Public Announcements......................................30
5.10 Failure to Fulfill Conditions.............................30
5.11 Employee Matters..........................................31
5.12 Disclosure Supplements....................................31
5.13 Transaction Expenses of HBI and HUBCO.....................31
5.14 Indemnification. ........................................32
5.15 Bank Merger...............................................34
5.16 Rights Plan...............................................34
ARTICLE VI - CLOSING CONDITIONS.............................................34
6.1 Conditions to Each Party's Obligations Under this
Agreement.................................................34
6.2 Conditions to the Obligations of HUBCO Under this
Agreement.................................................35
6.3 Conditions to the Obligations of HBI Under this
Agreement.................................................37
ARTICLE VII - TERMINATION, AMENDMENT AND WAIVER.............................37
7.1 Termination...............................................38
7.2 Effect of Termination.....................................39
7.3 Amendment.................................................39
7.4 Extension; Waiver.........................................39
ARTICLE VIII - MISCELLANEOUS................................................39
8.1 Expenses..................................................39
8.2 Survival..................................................40
8.3 Notices...................................................40
8.4 Parties in Interest; Assignability........................40
8.5 Entire Agreement..........................................40
8.6 Counterparts..............................................41
8.7 Governing Law.............................................41
8.8 Descriptive Headings......................................41
8.9 Knowledge.................................................41
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated April 28, 1996 (this
"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, Hometown
Bancorporation, Inc., a Delaware corporation ("HBI") and registered bank holding
company, and The Bank of Darien, a Connecticut chartered bank, wholly owned by
HBI ("Darien").
WHEREAS, the respective Boards of Directors of HUBCO and HBI
have each determined that it is in the best interests of HUBCO and HBI and their
respective stockholders for HUBCO to acquire HBI by (i) merging HBI with and
into HUBCO with HUBCO surviving and HBI shareholders receiving the consideration
hereinafter set forth, and (ii) in HUBCO's discretion, simultaneously with the
merger of HBI into HUBCO, by merging Darien with and into the Bank with the Bank
surviving; and
WHEREAS, the Boards of Directors of HBI, HUBCO, the Bank and
Darien have duly adopted and approved this Agreement and the Board of Directors
of HBI has directed that it be submitted to HBI's shareholders for approval; and
WHEREAS, simultaneously with the execution of this Agreement,
HBI is issuing an option to HUBCO to purchase 435,000 shares of the authorized
and unissued HBI Common Stock (as hereinafter defined) at an option price of
$13.75 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), HBI shall be merged
with and into HUBCO (the "Merger") in accordance the Delaware General
Corporation Law (the "DGCL") 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 HBI and thereupon and thereafter, all the property, rights,
privileges, powers and franchises of each of HUBCO and HBI 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 HBI and shall have succeeded to all of each of their
relationships, as fully and to the same extent as if such
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property, rights, privileges, powers, franchises, debts, liabilities,
obligations, duties and relationships had been originally acquired, incurred or
entered into by the Surviving Corporation. In addition, any reference to either
of HUBCO and HBI 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 HBI 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 HBI 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 later of the filing of certificates of
merger, in form and substance satisfactory to HUBCO and HBI, with the Secretary
of State of the State of New Jersey (the "New Jersey Certificate of Merger") and
with the Secretary of State of the State of Delaware (the "Delaware Certificate
of Merger"). The term "Effective Time" shall mean the close of business on the
first day when the certificates of merger in both New Jersey and Delaware have
been so filed. 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) (the "Closing Date"), 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 HBI may mutually agree upon. Immediately
following the Closing, the New Jersey
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Certificate of Merger shall be filed with the New Jersey Secretary of State and
the Delaware Certificate of Merger shall be filed with the Delaware Secretary of
State.
1.7 THE BANK MERGER. At HUBCO's option, at the Effective Time,
and simultaneously with the Merger, Darien shall be merged with and into the
Bank (the "Bank Merger") in accordance with the provisions of Section 36a-125 of
the Banking Law of Connecticut. In the Bank Merger the Bank shall be the
surviving bank (the "Surviving Bank"), except that Darien may be operated as
"Hudson United Bank, Darien Division." Upon the consummation of the Bank Merger,
if any, the separate existence of Darien shall cease and the Surviving Bank
shall be considered the same business and corporate entity as each of Darien and
the Bank, and all of the property, rights, privileges, powers and franchises of
each of Darien 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 Darien 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,
liabilities, obligations, duties and relationships had been originally acquired,
incurred or entered into by the Surviving Bank. Upon the consummation of the
Bank Merger, if any, 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. At HUBCO's option, following the execution of this
Agreement, Darien and the Bank shall execute and deliver a merger agreement,
both in form and substance reasonably satisfactory to the parties hereto, for
delivery to the Commissioner of Banking of the State of New Jersey, the
Connecticut Commissioner of Banking (the "Connecticut Commissioner"), and the
Federal Deposit Insurance Corporation (the "FDIC") for approval of the Bank
Merger. At HUBCO's option, instead of merging Darien into the Bank, HUBCO may
merge Darien into any other banking subsidiary of HUBCO as if such subsidiary
was the Bank.
ARTICLE II - CONVERSION OF HBI SHARES
2.1 CONVERSION OF HBI COMMON STOCK. At the Effective
Time, by virtue of the Merger and without any action on the part of
the holders thereof:
(a) Cancelled Shares. Each share of common stock,
par value $1.00 per share, of HBI ("HBI Common Stock"), which is held by HBI as
a treasury share, and any shares of HBI Common Stock owned by Darien or any
other direct or indirect subsidiary of HBI (except as trustee or in a fiduciary
capacity, or as nominee), shall be cancelled and retired, and no payment shall
be made with respect thereto.
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(b) Shares to be Exchanged; Exchange Price. Each
remaining issued and outstanding share of HBI Common Stock shall be converted
into the right to receive $17.75 per share in cash (the "Exchange Price").
2.2 CONVERSION PROCEDURES.
(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 HBI Common
Stock, for exchange in accordance with this Article II, through the Exchange
Agent, cash sufficient to provide all of the consideration required to be
exchanged by HUBCO pursuant to the provisions of this Article II (the "Exchange
Fund"). The Exchange Agent shall, pursuant to irrevocable instructions, deliver
cash out of the Exchange Fund in accordance with Section 2.1. Except as
contemplated by Section 2.2(d) hereof, the Exchange Fund shall not be used for
any other purpose.
(b) Procedures. Promptly after the Closing Date,
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 HBI Common Stock (other than Dissenting Shares)
(the "Certificates"), (i) a letter of transmittal (which is reasonably agreed to
by HUBCO and HBI 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 cash. Upon surrender
of a Certificate for cancellation to the Exchange Agent together with such
letter of transmittal, duly executed, and such other customary documents as may
be required pursuant to such instructions, the holder of such Certificate shall
be entitled to receive in exchange therefor cash which such holder has the right
to receive in respect of the shares of HBI Common Stock formerly evidenced by
such Certificate in accordance with Section 2.1 (the "Merger Consideration") and
the Certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of shares of HBI Common Stock which is not registered in
the transfer records of HBI, the Merger Consideration may be paid in accordance
with this Article II to a transferee if the Certificate evidencing such shares
of HBI 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 reasonably required by the Exchange Agent, the posting by such
person of a bond in such amount as the Exchange Agent may reasonably direct as
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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, or
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,
without interest.
(c) No Further Rights in HBI Common Stock. All
Merger Consideration paid upon conversion of the shares of HBI Common Stock in
accordance with the terms hereof shall be deemed to have been paid in full
satisfaction of all rights pertaining to such shares of HBI Common Stock.
(d) Termination of Exchange Fund. Any portion of
the Exchange Fund which remains undistributed to the holders of HBI Common Stock
for two years after the Effective Time shall be delivered to HUBCO, upon demand,
and any holders of HBI 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.
(e) No Liability. Neither HUBCO nor the Bank
shall be liable to any holder of shares of HBI Common Stock for any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(f) Withholding Rights. HUBCO shall be entitled
to deduct and withhold, or cause the Exchange Agent to deduct and withhold, from
the Merger Consideration otherwise payable to any holder of a Certificate 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 Certificate 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 HBI shall be closed and there shall be no further registration
of transfers of shares of HBI Common Stock thereafter on the records of HBI. 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 HBI STOCK OPTIONS. At the Effective Time, each Stock
Option (as such term is defined in Section 3.2) listed on the HBI Disclosure
Schedule, whether or not then exercisable, shall, by virtue of the Merger,
automatically and without any action on the part of the holder thereof, be
converted into the right to receive
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cash in an amount equal to (i) the excess of the Exchange Price, without
interest, over the exercise price per share provided in such Stock Option,
multiplied by (ii) the number of shares of HBI Common Stock subject to such
Stock Option.
2.5 DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, any holder of HBI Common Stock shall have the right
to dissent in the manner provided in Section 262 of the DGCL, and if all
necessary requirements of the DGCL are met, such shares shall be entitled to
payment of the fair value of such shares in accordance with the provisions of
the DGCL ("Dissenting Shares"), provided, however, that (i) if any holder of
Dissenting Shares shall subsequently withdraw such holder's 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 such holder's entitlement to
appraisal rights as provided in the DGCL, 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.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF HBI
References herein to "HBI Disclosure Schedule" shall mean all
of the disclosure schedules required by this Article III, dated as of the date
hereof and referenced to the specific sections and subsections of Article III of
this Agreement, which have been delivered on the date hereof by HBI to HUBCO.
HBI hereby represents and warrants to HUBCO as follows:
3.1 CORPORATE ORGANIZATION.
(a) HBI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
HBI 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 HBI and the HBI
Subsidiaries (as defined below), taken as a whole. HBI is registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended (the
"BHCA").
(b) Darien is the only current HBI Subsidiary.
For purposes of this Agreement, the term "HBI Subsidiary" means any
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corporation, partnership, joint venture or other legal entity in which HBI,
directly or indirectly, owns at least a 50% stock or other equity interest or
for which HBI, directly or indirectly, acts as a general partner, provided that
to the extent that any representation or warranty set forth herein covers a
period of time prior to the date of this Agreement, the term "HBI Subsidiary"
shall include any entity which was an HBI Subsidiary at any time during such
period. Darien 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
Connecticut. All eligible accounts of depositors issued by Darien are insured by
the Bank Insurance Fund of the FDIC to the fullest extent permitted by law. Each
HBI 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 HBI and the HBI
Subsidiaries, taken as a whole.
(c) The HBI Disclosure Schedule sets forth true
and complete copies of the Certificate of Incorporation and Bylaws, as in effect
on the date hereof, of HBI and Darien.
3.2 CAPITALIZATION. The authorized capital stock of HBI
consists of ten million shares of HBI Common Stock, par value $1.00 per share,
and two million shares of preferred stock, par value $1.00 per share ("HBI
Preferred Stock"). As of April 8, 1996, there are 1,706,496 shares of HBI Common
Stock issued and outstanding. No shares of HBI Preferred Stock are issued and
outstanding. As of April 8, 1996, there are 129,600 shares of HBI Common Stock
issuable upon exercise of outstanding stock options. The HBI Disclosure Schedule
sets forth (i) all options which may be exercised for issuance of HBI Common
Stock (collectively, the "Stock Options") and the terms upon which the options
may be exercised, and (ii) true and complete copies of each plan and each
individual agreement pursuant to which any Stock Option was granted, including a
list of each outstanding Stock Option issued pursuant thereto. All issued and
outstanding shares of HBI Common Stock, and all issued and outstanding shares of
capital stock of each HBI Subsidiary, have been duly authorized and validly
issued, are fully paid, and nonassessable. The authorized capital stock of
Darien consists of 1,000,000 shares of common stock, $5.00 par value per share.
All of the outstanding shares of capital stock of each HBI Subsidiary are owned
by HBI and are free and clear of any liens, encumbrances, charges, restrictions
or rights of third parties. Except for the Stock Options issued and disclosed
herein and the Stock Option granted to HUBCO pursuant to the Stock Option
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Agreement dated the date hereof, neither HBI nor Darien 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 HBI or Darien 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 HBI, HBI and Darien 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 at least
seventy-five percent (75%) of the members of the Boards of Directors of HBI and
Darien in accordance with their respective Certificates of Incorporation and
applicable laws and regulations. Except for such approvals, no other corporate
proceedings on the part of HBI or Darien are necessary to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by HBI and Darien, and constitutes the valid and binding
obligation of each of HBI and Darien, enforceable against HBI and Darien in
accordance with its terms.
(b) Neither the execution and delivery of this
Agreement by HBI or Darien, nor the consummation by HBI or Darien of the
transactions contemplated hereby in accordance with the terms hereof, or
compliance by HBI or Darien with any of the terms or provisions hereof, will (i)
violate any provision of HBI's or Darien'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 HBI, Darien or any of their
respective properties or assets, or (iii) except as set forth in the HBI
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 HBI or Darien 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 HBI or Darien 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
<PAGE>
individually or in the aggregate will not have a material adverse effect on the
business, operations, assets or financial condition of HBI and the HBI
Subsidiaries, taken as a whole, and which will not prevent or materially delay
the consummation of the transactions contemplated hereby. Except for consents
and approvals of or filings or registrations with or notices to the Board of
Governors of the Federal Reserve System (the "FRB"), the FDIC, the Connecticut
Commissioner, the Connecticut Department of Environmental Protection (the
"DEP"), the Securities and Exchange Commission (the "SEC"), other applicable
government authorities, and the stockholders of HBI, 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 HBI or Darien in connection with
(x) the execution and delivery by HBI and Darien of this Agreement and (y) the
consummation by HBI of the Merger, the consummation by Darien of the Bank
Merger, if any, and the consummation by HBI and Darien of the other transactions
contemplated hereby, except (i) such as are listed in the HBI Disclosure
Schedule and (ii) such as individually or in the aggregate will not (if not
obtained) have a material adverse effect on the business, operations, assets or
financial condition of HBI and the HBI Subsidiaries taken as a whole or prevent
or materially delay the consummation of the transactions contemplated hereby. To
the best of HBI's knowledge, no fact or condition exists which HBI has reason to
believe will prevent it from obtaining the aforementioned consents and
approvals.
3.4 FINANCIAL STATEMENTS.
(a) The HBI Disclosure Schedule sets forth copies
of the consolidated balance sheets of HBI as of December 31, 1994 and 1995, 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
1993 through 1995, in each case accompanied by the audit report of Price
Waterhouse LLP, independent public accountants with respect to HBI
(collectively, the "HBI Financial Statements"). The HBI 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 HBI 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 HBI
for the respective periods set forth therein.
(b) The books and records of HBI and Darien are
being maintained in material compliance with applicable legal and
accounting requirements.
<PAGE>
(c) Except as and to the extent reflected, dis-
closed or reserved against in the HBI Financial Statements (including the notes
thereto), as of December 31, 1995, neither HBI nor any HBI Subsidiary had any
liabilities, whether absolute, accrued, contingent or otherwise, material to the
business, operations, assets or financial condition of HBI and the HBI
Subsidiaries, taken as a whole, which were required by GAAP (consistently
applied) to be disclosed in HBI's consolidated statement of condition as of
December 31, 1995 or the notes thereto. Since December 31, 1995, HBI and Darien
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 Brown Brothers
Harriman & Co. ("Brown"), neither HBI or Darien 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 Brown is set
forth in the HBI Disclosure Schedule. Other than pursuant to the agreement with
Brown, 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 HBI
or Darien.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as disclosed in the HBI Disclosure
Schedule, there has not been any material adverse change in the business,
operations, assets or financial condition of HBI and the HBI Subsidiaries, taken
as a whole, since December 31, 1995, and to the best of HBI's knowledge, no fact
or condition exists which HBI believes will cause such a material adverse change
in the future.
(b) Except as set forth in the HBI Disclosure
Schedule, neither HBI nor Darien has taken or permitted any of the actions set
forth in Section 5.2 hereof between December 31, 1995 and the date hereof and,
except for execution of this Agreement and the other documents contemplated
hereby, HBI has conducted its business only in the ordinary course, consistent
with past practice.
3.7 LEGAL PROCEEDINGS. Except as disclosed in the HBI
Disclosure Schedule, and except for ordinary routine litigation incidental to
the business of HBI and the HBI Subsidiaries, neither HBI nor any HBI Subsidiary
is a party to any, and there are no pending or, to the best of HBI's knowledge,
threatened legal, administrative, arbitral or other proceedings, claims, actions
or governmental investigations of any nature against HBI or any HBI Subsidiary
which, if decided adversely to HBI or an HBI Subsidiary,
<PAGE>
are reasonably likely to have a material adverse effect on the business,
operations, assets or financial condition of HBI and the HBI Subsidiaries taken
as a whole. Except as disclosed in the HBI Disclosure Schedule, neither HBI nor
any HBI Subsidiary is a party to any order, judgment or decree entered in any
lawsuit or proceeding which is material to HBI or such HBI Subsidiary.
3.8 TAXES AND TAX RETURNS.
(a) HBI and each HBI Subsidiary has duly filed
(and until the Effective Time will so file) all returns, declarations, reports,
information returns and statements ("Returns") required to be filed by it on or
before the Effective Time in respect of any federal, state and local taxes
(including withholding taxes, penalties or other payments required) and has duly
paid (and until the Effective Time will so pay) all such taxes due and payable,
other than taxes or other charges which are being contested in good faith (and
disclosed to HUBCO in writing) or against which reserves have been established.
HBI and each HBI Subsidiary has established (and until the Effective Time will
establish) on its books and records reserves that are adequate for the payment
of all federal, state and local taxes not yet due and payable, but are incurred
in respect of HBI or such HBI Subsidiary through such date. None of the federal
or state income tax returns of HBI or any HBI Subsidiary have been examined by
the Internal Revenue Service (the "IRS") or the Connecticut Division of Taxation
within the past six years. To the best knowledge of HBI, 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 HBI or any HBI Subsidiary, nor has HBI or any HBI Subsidiary given any
currently outstanding waivers or comparable consents regarding the application
of the statute of limitations with respect to any taxes or Returns.
(b) Neither HBI nor any HBI Subsidiary (i) has
requested any extension of time within which to file any Return, which Return
has not since been filed, (ii) is a party to any agreement providing for the
allocation or sharing of taxes, (iii) is required to include in income any
adjustment pursuant to Section 481(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), by reason of a voluntary change in accounting method
initiated by HBI or such HBI Subsidiary (nor does HBI 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 set forth on the HBI Disclosure
Schedule, neither HBI nor any HBI Subsidiary maintains or contributes to any
"employee pension benefit plan" (the "HBI Pension
<PAGE>
Plans") within the meaning of Section 3 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), "employee welfare benefit plan" (the
"HBI Welfare Plans") within the meaning of Section 3 of ERISA, stock option
plan, stock purchase plan, deferred compensation plan, severance plan, bonus
plan, employment agreement, director retirement program or other similar plan,
program or arrangement. Neither HBI nor any HBI Subsidiary has, since September
2, 1974, contributed to any "Multiemployer Plan," as such term is defined in
Section 3(37) of ERISA.
(b) HBI has delivered to HUBCO in the HBI Dis-
closure Schedules a complete and accurate copy of each of the following with
respect to each of the HBI Pension Plans and HBI Welfare Plans, if any: (i) plan
document, summary plan description, and summary of material modifications (if
not available, a detailed description of the foregoing); (ii) trust agreement or
insurance contract, if any; (iii) most recent IRS determination letter, if any;
(iv) most recent actuarial report, if any; and (v) most recent annual report on
Form 5500.
(c) The present value of all accrued benefits,
both vested and non-vested, under each of the HBI Pension Plans subject to Title
IV of ERISA, based upon the actuarial assumptions used for funding purposes in
the most recent actuarial valuation prepared by such HBI Pension Plan's actuary,
did not exceed the then current value of the assets of such plans allocable to
such accrued benefits. To the best of HBI's knowledge, the actuarial assumptions
then utilized for such plans were reasonable and appropriate as of the last
valuation date and reflect then current market conditions.
(d) During the last six years, the Pension Benefit
Guaranty Corporation ("PBGC") has not asserted any claim for liability against
HBI or any HBI Subsidiary which has not been paid in full.
(e) All premiums (and interest charges and penal-
ties for late payment, if applicable) due to the PBGC with respect to each HBI
Pension Plan have been paid. All contributions required to be made to each HBI
Pension Plan under the terms thereof, ERISA or other applicable law have been
timely made, and all amounts properly accrued to date as liabilities of HBI
which have not been paid have been properly recorded on the books of HBI.
(f) Each of the HBI Pension Plans, HBI Welfare
Plans and each other employee benefit plan and arrangement identified on the HBI
Disclosure Schedule has been operated in compliance in all material respects
with the provisions of ERISA, the Code, all regulations, rulings and
announcements promulgated or issued thereunder, and all other applicable
governmental laws and regulations. Furthermore, if HBI maintains any HBI Pension
Plan, HBI has received or applied for a favorable determination letter from the
<PAGE>
IRS which takes into account the Tax Reform Act of 1986 and subsequent
legislation, and HBI is not aware of any fact or circumstance which would
disqualify any plan.
(g) To the best knowledge of HBI, no non-exempt
prohibited transaction, within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any HBI Welfare Plan or HBI
Pension Plan that would result in any material tax or penalty for HBI or any HBI
Subsidiary.
(h) No HBI Pension Plan or any trust created
thereunder has been terminated, nor have there been any "reportable events"
(notice of which has not been waived by the PBGC), within the meaning of Section
4034(b) of ERISA, with respect to any HBI Pension Plan.
(i) No "accumulated funding deficiency," within
the meaning of Section 412 of the Code, has been incurred with respect to any
HBI Pension Plan.
(j) There are no material pending, or, to the best
knowledge of HBI, material threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of, or against any of the HBI Pension Plans
or the HBI Welfare Plans, any trusts created thereunder or any other plan or
arrangement identified in the HBI Disclosure Schedule.
(k) No HBI Pension Plan or HBI Welfare Plan pro-
vides medical or death benefits (whether or not insured) beyond an employee's
retirement or other termination of service, other than (i) coverage mandated by
law, or (ii) death benefits under any HBI Pension Plan.
(l) Except with respect to customary health, life
and disability benefits, there are no unfunded benefit obligations which are not
accounted for by reserves shown on the HBI Financial Statements and established
under GAAP or otherwise noted on such Financial Statements.
(m) With respect to each HBI Pension Plan and HBI
Welfare Plan that is funded wholly or partially through an insurance policy,
there will be no liability of HBI or any HBI Subsidiary as of the Effective Time
under any such insurance policy or ancillary agreement with respect to such
insurance policy in the nature of a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or partially
out of events occurring prior to the Effective Time.
(n) Except for benefits due pursuant to the
employment agreements included within the HBI Disclosure Schedule and as set
forth in the HBI Disclosure Schedule or as agreed to by HUBCO in writing either
pursuant to this Agreement or otherwise,
<PAGE>
the consummation of the transactions contemplated by this Agreement will not (i)
entitle any current or former employee of HBI or any HBI Subsidiary to severance
pay, unemployment compensation or any similar payment, or (ii) accelerate the
time of payment or vesting, or increase the amount of any compensation or
benefits due to any current or former employee under any HBI Pension Plan or HBI
Welfare Plan.
(o) Except for the HBI Pension Plans and the HBI
Welfare Plans, and except as set forth on the HBI Disclosure Schedule, HBI has
no deferred compensation agreements, understandings or obligations for payments
or benefits to any current or former director, officer or employee of HBI or any
HBI Subsidiary or any predecessor of any thereof. The HBI Disclosure Schedule
sets forth (i) true and complete copies of the agreements, understandings or
obligations with respect to each such current or former director, officer or
employee, and (ii) the most recent actuarial or other calculation of the present
value of such payments or benefits.
(p) Except as set forth in the HBI Disclosure
Schedule, HBI does not maintain or otherwise pay for life insurance policies
(other than group term life policies on employees) with respect to any director,
officer or employee. The HBI Disclosure Schedule lists each such insurance
policy and any agreement with a party other than the insurer with respect to the
payment, funding or assignment of such policy. To the best of HBI's knowledge,
neither HBI nor any HBI Pension Plan or HBI Welfare Plan owns any individual or
group insurance policies issued by an insurer which has been found to be
insolvent or is in rehabilitation pursuant to a state proceeding.
3.10 REPORTS.
(a) The HBI Disclosure Schedule lists, and HBI 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 HBI since January 1, 1994 pursuant to the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended (the "1934
Act"), and (ii) communication (other than general advertising materials and
press releases) mailed by HBI to its stockholders as a class since January 1,
1994.
(b) Since January 1, 1994, (i) HBI has filed all
reports that it was required to file with the SEC under the 1934 Act, and (ii)
HBI and Darien each has duly filed all material forms, reports and documents
which they were required to file with each agency charged with regulating any
aspect of their business, in each case in form which was correct in all material
respects, and, subject to permission from such regulatory authorities, HBI
promptly will deliver or make available to HUBCO accurate and
<PAGE>
complete copies of such reports. As of their respective dates, each such form,
report, or document, and each such final registration statement, prospectus,
annual, quarterly or special report, definitive proxy statement or
communication, complied in all material respects with all applicable statutes,
rules and regulations and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided that
information contained in any such document as of a later date shall be deemed to
modify information as of an earlier date. The HBI Disclosure Schedule lists the
dates and substance of all examinations of HBI or Darien conducted by either the
FRB, the FDIC or the Connecticut Commissioner since January 1, 1994 and the
dates and substance of any responses thereto submitted by HBI or Darien.
3.11 HBI AND DARIEN INFORMATION. The information relating to
HBI and Darien, this Agreement, and the transactions contemplated hereby (except
for information relating solely to HUBCO) to be contained in the Proxy Statement
(as defined in Section 5.6(a) hereof) to be delivered to stockholders of HBI in
connection with the solicitation of their approval of the Merger, as of the date
the Proxy Statement is mailed to stockholders of HBI, and up to and including
the date of the meeting of stockholders to which such Proxy Statement 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. HBI and each HBI
Subsidiary holds all licenses, franchises, permits and authorizations necessary
for the lawful conduct of its business and has complied with and is not in
default in any respect under any applicable law, statute, order, rule,
regulation, policy and/or guideline of any federal, state or local governmental
authority relating to HBI or such HBI Subsidiary (including, without limitation,
consumer, community and fair lending laws) (other than where the failure to have
a license, franchise, permit or authorization or where such default or
noncompliance will not result in a material adverse effect on the business,
operations, assets or financial condition of HBI and the HBI Subsidiaries taken
as a whole), and HBI 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 HBI Disclosure Schedule, (i) neither HBI nor Darien 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
<PAGE>
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 HBI or Darien
to any officer, employee, director or consultant thereof. The HBI Disclosure
Schedule sets forth true and correct copies of all severance or employment
agreements with officers, directors, employees, agents or consultants to which
HBI or Darien is a party.
(b) Except as disclosed in the HBI 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 HBI nor any HBI Subsidiary is a party to or bound by any
commitment, agreement or other instrument which is material to the business,
operations, assets or financial condition of HBI and the HBI Subsidiaries taken
as a whole, (ii) no commitment, agreement or other instrument to which HBI or
any HBI Subsidiary is a party or by which any of them is bound limits the
freedom of HBI or any HBI Subsidiary to compete in any line of business or with
any person, and (iii) neither HBI nor any HBI Subsidiary is a party to any
collective bargaining agreement.
(c) Except as disclosed in the HBI Disclosure
Schedule, neither HBI nor any HBI Subsidiary or, to the best knowledge of HBI,
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 Darien 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 HBI and the HBI Subsidiaries, taken as a whole.
3.14 PROPERTIES AND INSURANCE.
(a) HBI or an HBI Subsidiary has good and, as to
owned real property, marketable title to all material assets and properties,
whether real or personal, tangible or intangible, reflected in HBI's
consolidated balance sheet as of December 31, 1995, 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, 1995), 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 condi-
<PAGE>
tion of HBI and the HBI Subsidiaries taken as a whole, and (iv) with respect to
owned real property, title imperfections noted in title reports delivered to
HUBCO prior to the date hereof. Except as affected by the transactions
contemplated hereby, HBI and Darien as lessees have the right under valid and
subsisting leases to occupy, use, possess and control all real property leased
by HBI and Darien in all material respects as presently occupied, used,
possessed and controlled by HBI and Darien.
(b) The business operations and all insurable
properties and assets of HBI and each HBI Subsidiary are insured for their
benefit against all risks which, in the reasonable judgment of the management of
HBI, 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 HBI
adequate for the business engaged in by HBI and the HBI Subsidiaries. As of the
date hereof, neither HBI nor any HBI Subsidiary has received any notice of
cancellation or notice of a material amendment of any such insurance policy or
bond, and to the best of HBI's knowledge, is not in default under any such
policy or bond, no coverage thereunder is being disputed, and all material
claims thereunder have been filed in a timely fashion. The HBI Disclosure
Schedule sets forth in summary form a list of all insurance policies of HBI and
the HBI Subsidiaries.
3.15 MINUTE BOOKS. The minute books of HBI and Darien contain
records of all meetings and other corporate action held of their respective
stockholders and Boards of Directors (including committees of their respective
Boards of Directors) that are complete and accurate in all material respects.
3.16 ENVIRONMENTAL MATTERS.
(a) Neither HBI nor any HBI Subsidiary has
received any written notice, citation, claim, assessment, proposed assessment or
demand for abatement alleging that HBI or such HBI Subsidiary (either directly
or as a trustee or fiduciary, or as a successor-in-interest in connection with
the enforcement of remedies to realize the value of properties serving as
collateral for outstanding loans) is responsible for the correction or cleanup
of any condition resulting from the violation of any law, ordinance or other
governmental regulation regarding environmental matters, which correction or
cleanup would be material to the business, operations, assets or financial
condition of HBI and the HBI Subsidiaries taken as a whole. HBI has no knowledge
that any toxic or hazardous substances or materials have been emitted,
generated, disposed of or stored on any real property owned or leased by HBI or
any HBI Subsidiary, as OREO or otherwise, or owned or controlled by HBI or any
HBI Subsidiary as a trustee or fiduciary (collectively, "Properties"), in any
manner that violates any presently existing federal, state or local law or
regulation governing or
<PAGE>
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 HBI and the HBI Subsidiaries, taken as a whole. None of the
Properties is in the State of New Jersey.
(b) HBI has no knowledge that any of the Prop-
erties has been operated in any manner in the three years prior to the date of
this Agreement that violated any applicable federal, state or local law or
regulation governing or pertaining to toxic or hazardous substances and
materials, the violation of which would have a material adverse effect on the
business, operations, assets or financial condition of HBI and the HBI
Subsidiaries taken as a whole.
(c) To the best of HBI's knowledge, HBI, each HBI
Subsidiary and any and all of their tenants or subtenants have all necessary
permits and have filed all necessary registrations material to permit the
operation of the Properties in the manner in which the operations are currently
conducted under all applicable federal, state or local environmental laws,
excepting only those permits and registrations the absence of which would not
have a material adverse effect upon the operations requiring the permit or
registration.
(d) To the knowledge of HBI, there are no under-
ground storage tanks on, in or under any of the Properties and no underground
storage tanks have been closed or removed from any of the Properties while the
property was owned, operated or controlled by HBI or any HBI Subsidiary.
(e) Except as set forth on the HBI Disclosure
Schedule, HBI has no knowledge that any of the Properties meets the statutory
criteria of an "Establishment" as that term is defined pursuant to the
Connecticut Transfer of Establishments Act, P.A.
95-183 (the "Connecticut Transfer Act").
3.17 RESERVES. As of December 31, 1995, each of the allowance
for loan losses and the reserve for OREO properties in the HBI Financial
Statements was adequate pursuant to GAAP (consistently applied), and the
methodology used to compute each of the loan loss reserve and the reserve for
OREO properties complies in all material respects with GAAP (consistently
applied) and all applicable policies of the FDIC and the Connecticut
Commissioner.
3.18 NO PARACHUTE PAYMENTS. No officer, director, employee or
agent (or former officer, director, employee or agent) of HBI or any HBI
Subsidiary is entitled now, or will or may be entitled to as a consequence of
this Agreement or the Merger, to any payment or benefit from HBI, an HBI
Subsidiary, HUBCO or the Bank which if paid or provided would constitute an
"excess para-
<PAGE>
chute payment," as defined in Section 280G of the Code or regulations
promulgated thereunder.
3.19 AGREEMENTS WITH BANK REGULATORS. Neither HBI nor any HBI
Subsidiary is a party to any agreement or memorandum of understanding with, or a
party to any commitment letter, board resolution submitted to a regulatory
authority or similar undertaking to, or is subject to any order or directive by,
or is a recipient of any extraordinary supervisory letter from, any court,
governmental authority or other regulatory or administrative agency or
commission, domestic or foreign ("Governmental Entity") which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies or its management, nor has HBI 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 HBI prior to the date of this Agreement. Neither HBI nor
any HBI Subsidiary is required by Section 32 of the Federal Deposit Insurance
Act to give prior notice to a Federal banking agency of the proposed addition of
an individual to its board of directors or the employment of an individual as a
senior executive officer, except as disclosed in writing to HUBCO by HBI 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 HBI. HUBCO hereby represents and warrants to HBI 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
<PAGE>
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 the HUBCO Subsidiaries (defined below), taken as a whole.
HUBCO is registered as a bank holding company under the BHCA.
(b) Each of the HUBCO Subsidiaries is listed in
the HUBCO Disclosure Schedule. For purposes of this Agreement, the term "HUBCO
Subsidiary" means any corporation, partnership, joint venture or other legal
entity in which HUBCO, directly or indirectly, owns at least a 50% stock or
other equity interest or for which HUBCO, directly or indirectly, acts as a
general partner. Each HUBCO Subsidiary 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 duly organized and validly
existing and in good standing under the laws of the State of New Jersey. All
eligible accounts of depositors issued by the Bank are insured by the Bank
Insurance Fund of the FDIC to the fullest extent permitted by law. Each HUBCO
Subsidiary has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted
and is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing would not have a material adverse effect
on the business, operations, assets or financial condition of HUBCO and the
HUBCO Subsidiaries, 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 solely of 25,000,000 common shares, no par value ("HUBCO Common
Stock"), and 4,500,000 shares of preferred stock ("HUBCO Authorized Preferred
Stock"), provided that HUBCO intends to submit a proposal at HUBCO's next Annual
Meeting of Shareholders to increase HUBCO's authorized capital stock to
50,000,000 shares of HUBCO Common Stock and 10,000,000 shares of HUBCO
Authorized Preferred Stock. As of March 31, 1996, there were 14,342,949 shares
of HUBCO Common Stock issued and outstanding, excluding 713,534 shares of
treasury stock. From time to time hereafter, HUBCO may sell or repurchase shares
of HUBCO Common Stock. There are no shares of HUBCO Authorized Preferred Stock
outstanding. Except for shares issuable under the Agreement and Plan of Merger,
dated February 5, 1996 (the "Satellite Agreement"), between HUBCO and Satellite
American Bank and Trust Company ("Satellite"), the HUBCO 1995 Stock Option Plan,
and stock options issued to the former Chief Executive Officer of Urban National
Bank (the "HUBCO Stock Option Plans"), there are no shares of HUBCO Common Stock
issuable upon the exercise of outstanding stock options or other-
<PAGE>
wise. All issued and outstanding shares of HUBCO Common Stock, and all issued
and outstanding shares of capital stock of the HUBCO Subsidiaries, have been
duly authorized and validly issued, are fully paid, nonassessable and free of
preemptive rights, and are free and clear of all liens, encumbrances, charges,
restrictions or rights of third parties. All of the outstanding shares of
capital stock of the HUBCO Subsidiaries are owned by HUBCO free and clear of any
liens, encumbrances, charges, restrictions or rights of third parties. Except
for the shares issuable under the HUBCO Stock Option Plans and HUBCO's
obligations under the Satellite Agreement, neither HUBCO nor any HUBCO
Subsidiary has granted or is bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
transfer, purchase or issuance of any shares of capital stock of HUBCO or any
HUBCO Subsidiary or any securities representing the right to purchase, subscribe
or otherwise receive any shares of such capital stock or any securities
convertible into any such shares, and there are no agreements or understandings
with respect to voting of any such shares.
4.3 AUTHORITY; NO VIOLATION.
(a) Subject to the receipt of all necessary
governmental approvals, HUBCO and the Bank have full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Boards of Directors of HUBCO and the Bank in accordance with their respective
Certificates of Incorporation and applicable laws and regulations. Except for
such approvals, no other corporate proceedings on the part of HUBCO or the Bank
are necessary to consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by HUBCO and the Bank and
constitutes the valid and binding obligation 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 and the Bank, nor the consummation by HUBCO and the Bank of
the transactions contemplated hereby in accordance with the terms hereof, or
compliance by HUBCO and 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
<PAGE>
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 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 HUBCO and the HUBCO Subsidiaries, taken as a whole, and
which will not prevent or materially delay the consummation of the transactions
contemplated hereby. Except for consents and approvals of or filings or
registrations with or notices to the FDIC, the New Jersey Department of Banking
(the "Department"), the FRB, the Secretary of State of New Jersey, or other
applicable Governmental Entities, no consents or approvals of or filings or
registrations with or notices to any third party or any public body or authority
are necessary on behalf of HUBCO in connection with (x) the execution and
delivery by HUBCO and the Bank of this Agreement, and (y) the consummation by
HUBCO and the Bank of the Merger, the Bank Merger, if any, and the other
transactions contemplated hereby, except such as are listed in the HUBCO
Disclosure Schedule or in the aggregate will not (if not obtained) have a
material adverse effect on the business, operations, assets or financial
condition of HUBCO. To the best of HUBCO's knowledge, no fact or condition
exists which HUBCO has reason to believe will prevent it from obtaining the
aforementioned consents and approvals.
4.4 FINANCIAL STATEMENTS.
(a) The HUBCO Disclosure Schedule sets forth
copies of the consolidated statements of financial condition of HUBCO as of
December 31, 1994 and 1995, and the related consolidated statements of income,
changes in stockholders' equity and of cash flows for the periods ended December
31, in each of the three fiscal years 1993 through 1995, in each case
accompanied by the audit report of Arthur Andersen & Co., independent public
accountants with respect to HUBCO (collectively, the "HUBCO Financial
Statements"). The HUBCO Financial Statements (including the related notes) have
been prepared in accordance with GAAP consistently applied during the periods
involved (except as may be indicated therein or in the notes thereto), and
fairly present the consolidated financial position of HUBCO as of the respective
dates set forth therein, and the related consolidated statements of income,
changes in stockholders' equity and of cash flows (including the related notes,
where applicable) fairly present the consolidated results of operations, changes
in stockholders' equity and cash flows of HUBCO for the respective fiscal
periods set forth therein.
<PAGE>
(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, dis-
closed or reserved against in the HUBCO Financial Statements (including the
notes thereto), as of December 31, 1995 neither HUBCO nor any of the HUBCO
Subsidiaries had any obligation or liability, whether absolute, accrued,
contingent or otherwise, material to the business, operations, assets or
financial condition of HUBCO or any of the HUBCO Subsidiaries which were
required by GAAP (consistently applied) to be disclosed in HUBCO's consolidated
statement of condition as of December 31, 1995 or the notes thereto. Except for
the proposed acquisition of Satellite, the transactions contemplated by this
Agreement, and other proposed acquisitions by HUBCO since December 31, 1995
reflected in any Form 8-K filed by HUBCO with the SEC, neither HUBCO nor any
HUBCO Subsidiary has incurred any liabilities since December 31, 1995 except in
the ordinary course of business and consistent with past practice.
4.5 BROKER'S AND OTHER FEES. Neither HUBCO nor any of its
directors or officers has employed any broker or finder or incurred any
liability for any broker's or finder's fees or commissions in connection with
any of the transactions contemplated by this Agreement.
4.6 HUBCO AND BANK INFORMATION. The information relating to
HUBCO and the Bank to be contained in the Proxy Statement (as defined in Section
5.6(a) hereof), as of the date of the mailing of the Proxy Statement, and up to
and including the date of the meeting of stockholders of HBI to which such Proxy
Statement 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.
4.7 SUFFICIENCY OF FUNDS. HUBCO has, and at the Effective Time
will have, sufficient funds to consummate the transactions contemplated hereby
and to pay the related fees and expenses.
4.8 DISCLOSURE. No representation or warranty contained in
Article IV of this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements herein not
misleading.
<PAGE>
ARTICLE V - COVENANTS OF THE PARTIES
5.1 CONDUCT OF THE BUSINESS OF HBI. During the period from the
date of this Agreement to the Effective Time, HBI shall, and shall cause Darien
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. HBI also shall use its best efforts to (i) preserve its
business organization and that of Darien intact, (ii) keep available to itself
and Darien the present services of its employees and those of Darien, and (iii)
preserve for itself and HUBCO the goodwill of its customers and those of Darien
and others with whom business relationships exist.
5.2 NEGATIVE COVENANTS.
(a) HBI 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 Darien to:
(i) change any provision of its Certificate
of Incorporation or By-laws or any similar governing
documents of HBI or Darien;
(ii) change the number of shares of its
authorized or issued capital stock (other than upon exercise
of stock options described or the HBI Disclosure Schedule in
accordance with the terms thereof and issuance of up to 15
shares of HBI Common Stock per quarter pursuant to existing
employee incentive plans) 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 HBI or Darien, 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;
(iii) grant any severance or termination
pay (other than pursuant to policies or contracts of HBI 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 (x) with respect to
officer or employee increases in the ordinary course of
business, consistent
<PAGE>
with past practices and policies and in any event not in
excess of 6% per year and (y) as noted in the HBI
Disclosure Schedule;
(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 HBI or
Darien;
(v) make any capital expenditures other
than pursuant to binding commitments existing on the date
hereof, expenditures necessary to maintain existing assets in
good repair, and expenditures described in business plans or
budgets previously finished to HUBCO;
(vi) file any applications or make any
contract with respect to branching or site location or
relocation;
(vii)agree to acquire in any manner whatso-
ever (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, make or
commit to make any new loan or other extension of credit in an
amount of $500,000 or more, renew for a period in excess of
one year any existing loan or other extension of credit in an
amount of $500,000 or more, or increase by $500,000 or more
the aggregate credit outstanding to any borrower or group of
affiliated borrowers, except such loan initiations, renewals
or increases that are committed as of the date of this
Agreement and identified on the HBI Disclosure Schedule and
residential mortgage loans made in the ordinary course of
business in accordance with past practice; or
(xi) agree to do any of the foregoing.
<PAGE>
5.3 NO SOLICITATION. HBI and Darien 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 HBI or Darien (an "Acquisition Transaction").
Notwithstanding the foregoing, HBI may enter into discussions or negotiations or
provide any information in connection with an unsolicited possible Acquisition
Transaction if the Board of Directors of HBI, 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. HBI 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 HBI 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, HBI
agrees to provide HUBCO, and HUBCO agrees to provide HBI, 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 June 30, 1996, HBI will deliver to HUBCO
and HUBCO will deliver to HBI 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, HBI will
deliver to HUBCO and HUBCO will deliver to HBI 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) HBI and Darien shall permit HUBCO and its
representatives, and HUBCO and the Bank shall permit HBI and its
representatives, reasonable access to their respective properties, and shall
disclose and make available to HUBCO and its representatives, or HBI 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'
<PAGE>
work papers, litigation files, plans affecting employees, and any other business
activities or prospects in which HUBCO and its representatives or HBI 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, HBI acknowledges
that HUBCO may be involved in discussions concerning other potential
acquisitions and HUBCO shall not be obligated to disclose such information to
HBI 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 five years from the date the proposed Merger is
abandoned but shall not apply to (i) any information which (A) the party
receiving the information can establish by convincing evidence was already in
its possession prior to the disclosure thereof to it by the other party; (B) was
then generally known to the public; (C) became known to the public through no
fault of the party receiving such information; or (D) was disclosed to the party
receiving such information by a third party not bound by an obligation of
confidentiality; or (ii) disclosures pursuant to a legal requirement or in
accordance with an order of a court of competent jurisdiction.
5.6 REGULATORY MATTERS.
(a) For the purposes of holding the Stockholders
Meeting (as such term is defined in Section 5.7 hereof), the parties hereto
shall cooperate in the preparation and filing with the SEC of a proxy statement
satisfying all applicable requirements of applicable state and federal laws,
including the 1934 Act and
<PAGE>
applicable state securities laws and the rules and regulations thereunder (such
proxy statement in the form mailed by HBI to the HBI shareholders, together with
any and all amendments or supplements thereto, being herein referred to as the
"Proxy Statement").
(b) HUBCO shall furnish HBI with such information
concerning HUBCO and its subsidiaries as is necessary in order to cause the
Proxy Statement, insofar as it relates to such corporations, to comply with
Section 5.6(a) hereof. HUBCO agrees promptly to advise HBI if at any time prior
to the HBI shareholders' meeting referred to in Section 5.7 hereof, any
information provided by HUBCO in the Proxy Statement becomes incorrect or
incomplete in any material respect and to provide HBI with the information
needed to correct such inaccuracy or omission. HUBCO shall furnish HBI with such
supplemental information as may be necessary in order to cause the Proxy
Statement, insofar as it relates to HUBCO and its subsidiaries, to comply with
Section 5.6(a) after the mailing thereof to HBI shareholders.
(c) HBI agrees promptly to advise HUBCO if at any
time prior to the HBI Stockholders Meeting any information provided by HBI in
the Proxy Statement becomes incorrect or incomplete in any material respect and
to provide HUBCO and the HBI shareholders with the information needed to correct
such inaccuracy or omission. HBI shall ensure that the Proxy Statement, insofar
as it relates to HBI and Darien, complies with Section 5.6(a) from the date of
the mailing thereof to HBI shareholders until the Stockholders Meeting.
(d) HUBCO and HBI shall as promptly as practicable
file the Proxy Statement with the SEC, and each of HUBCO and HBI shall promptly
notify the other of all communications, oral or written, with the SEC concerning
the Proxy Statement.
(e) 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 Connecticut Commissioner. The parties shall each have the
right to review in advance (and shall do so promptly) all filings with,
including all information relating to the other, as the case may be, and any of
their respective subsidiaries, which appears in any filing made with, or written
material submitted to, any third party or governmental body in connection with
the transactions contemplated by this Agreement.
(f) 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
<PAGE>
foregoing to, any Governmental Entity in respect of the transactions
contemplated hereby.
(g) HBI 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 HBI 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. HBI agrees to
provide HUBCO with any information, certificates, documents or other materials
about HBI 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. HBI shall use its reasonable efforts to
cause its attorneys and accountants to provide HUBCO and any underwriters for
HUBCO with any consents, comfort letters, opinion letters, reports or
information which are necessary to complete the registration statements and
applications for any such acquisition or issuance of securities. HUBCO shall
reimburse HBI for reasonable expenses thus incurred by HBI should this
transaction be terminated for any reason other than as described in Section
7.1(h). HUBCO shall not file with the SEC any registration statement or
amendment thereto or supplement thereof containing information regarding HBI
unless HBI shall have consented to such filing, which consent shall not be
unreasonably delayed or withheld.
(h) Between the date of this Agreement and the
Effective Time, HBI shall cooperate with HUBCO to reasonably conform HBI's
policies and procedures regarding applicable regulatory matters, including
without limitation Federal Reserve, Bank Secrecy Act and FDIC matters, to those
of HUBCO as HUBCO may reasonably identify to HBI from time to time.
5.7 APPROVAL OF STOCKHOLDERS. HBI will (i) take all steps
necessary duly to call, give notice of, convene and hold a meeting of the
stockholders of HBI (the "Stockholders Meeting") for the purpose of securing the
approval of stockholders of this Agreement, (ii) subject to the qualification
set forth in Section 5.3 hereof and the right not to make a recommendation or to
withdraw a recommendation if its investment banker withdraws its fairness
opinion prior to the Stockholders Meeting, recommend to the stockholders of HBI
the approval of this Agreement and the transactions contemplated hereby and use
its best efforts to obtain, as promptly as practicable, such approval, and (iii)
cooperate and consult with HUBCO with respect to each of the foregoing matters.
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.
<PAGE>
5.8 FURTHER ASSURANCES.
(a) 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.
(b) HUBCO agrees that from the date hereof to the
Effective Time, except as otherwise approved by HBI 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 HBI that HUBCO has breached this provision).
5.9 PUBLIC ANNOUNCEMENTS. HUBCO and HBI shall cooperate with
each other in the development and distribution of all news releases and other
public filings and disclosures with respect to this Agreement or the Merger
transactions contemplated hereby, and HUBCO and HBI agree that unless approved
mutually by them in advance, they will not issue any press release or written
statement for general circulation relating primarily to the transactions
<PAGE>
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
HBI determines that a material condition to its obligation to consummate the
transactions contemplated hereby cannot be fulfilled on or prior to February 28,
1997 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, HBI and HUBCO will promptly inform the other of any
facts applicable to HBI or HUBCO, respectively, or their respective directors or
officers, that would be likely to prevent or materially delay approval of the
Merger by any Governmental Entity or which would otherwise prevent or materially
delay completion of the Merger.
5.11 EMPLOYEE MATTERS.
(a) Following consummation of the Merger, HUBCO
shall honor the existing written contracts with officers and employees of HBI
and Darien that are included in the HBI Disclosure Schedule.
(b) Following consummation of the Merger, HUBCO
shall make available to all employees and officers of Darien employed by the
Bank coverage under the benefit plans generally available to HUBCO's employees
and officers (including pension and health and hospitalization) on the terms and
conditions available to the Bank's employees and officers, and shall honor the
severance policies of HBI and Darien previously disclosed to HUBCO in writing.
After the Effective Time, HUBCO may terminate, merge or change existing HBI and
Darien benefit plans. Employees of Darien employed by the Bank will receive
credit for prior employment by Darien for the sole purpose of determining
whether such employees are eligible to participate in or be vested under the
Bank's medical, vacation, sick leave, disability, pension, and other employee
benefit plans. Credit for prior service will not be given for purposes of
benefit accrual under any defined benefit pension plan of HUBCO. No prior
existing condition limitation shall be imposed with respect to any medical
coverage plan of the Bank.
5.12 DISCLOSURE SUPPLEMENTS. From time to time prior to the
Effective Time, each party hereto will promptly supplement or amend (by written
notice to the other) its respective Disclosure Schedules delivered pursuant
hereto with respect to any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such Schedules or which is necessary to correct any
information in such Schedules which has been rendered materially inaccurate
thereby. For the purpose of determining satisfaction of the conditions set forth
in Article VI and subject to Sections 6.2(a) and 6.3(a), no supplement or
amendment to the parties'
<PAGE>
respective Disclosure Schedules shall correct or cure any warranty which was
untrue when made, but shall enable the disclosure of subsequent facts or events
to maintain the truthfulness of any warranty.
5.13 TRANSACTION EXPENSES OF HBI AND HUBCO.
(a) For planning purposes, HBI shall, within 15
days from the date hereof, provide HUBCO with its estimated budget of
transaction-related expenses reasonably anticipated to be payable by HBI in
connection with this transaction, including the fees and expenses of counsel,
accountants, investment bankers and other professionals. HBI shall promptly
notify HUBCO if or when it determines that it will expect to exceed its budget.
(b) Promptly after the execution of this Agree-
ment, HBI shall ask all of its attorneys and other professionals to render
current and correct invoices for all unbilled time and disbursements. HBI shall
accrue and/or pay all of such amounts as soon as possible.
(c) HBI shall advise HUBCO monthly of all out-of-
pocket expenses which HBI has incurred in connection with this
transaction.
(d) HUBCO, in reasonable consultation with HBI,
shall make all arrangements with respect to the printing and mailing of the
Proxy Statement 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 and related documents
with the SEC and filings pursuant to state "blue sky" laws and regulations in
connection with the Merger, if any.
5.14 INDEMNIFICATION.
(a) For a period of six years after the Effective
Time, HUBCO shall indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date hereof or who becomes prior to the
Effective Time, a director, officer, employee or agent of HBI or Darien or
serves or has served at the request of HBI or Darien in any capacity with any
other person (collectively, the "Indemnitees") against any and all claims,
damages, liabilities, losses, costs, charges, expenses (including, without
limitation, reasonable costs of investigation, and the reasonable fees and
disbursements of legal counsel and other advisers and experts as incurred),
judgments, fines, penalties and amounts paid in settlement, asserted against,
incurred by or imposed upon any Indemnitee by reason of the fact that he or she
is or was a director, officer, employee or agent of HBI or Darien or serves or
has served at the request of HBI or Darien in any capacity with any other
person, in connection with, arising out of or relating to (i)
<PAGE>
any threatened, pending or completed claim, action, suit or proceeding (whether
civil, criminal, administrative or investigative), including, without
limitation, any and all claims, actions, suits, proceedings or investigations by
or on behalf of or in the right of or against HBI or Darien or any of their
respective affiliates, or by any former (but not any present) shareholder of HBI
(collectively, "Claims"), including, without limitation, any Claim which is
based upon, arises out of or in any way relates to the Merger, this Agreement,
any of the transactions contemplated by this Agreement, the Indemnitee's service
as a member of the Board of Directors or HBI or Darien or of any committee of
HBI's Board of Directors, the events leading up to the execution of this
Agreement, any statement, recommendation or solicitation made in connection
therewith or related thereto and any breach of any duty in connection with any
of the foregoing, or (ii) the enforcement of the obligations of HUBCO set forth
in this Section 5.14, in each case to the fullest extent permitted under any of
(x) applicable law, (y) the Certificate of Incorporation of HBI or Darien, as
applicable, or (z) the By-Laws of HBI or Darien, as applicable (and HUBCO shall
also advance expenses as incurred to the fullest extent permitted under any
thereof).
(b) From and after the Effective Time, HUBCO shall
assume and honor any obligation of HBI or Darien immediately prior to the
Effective Time with respect to the indemnification of the Indemnitees arising
out of the Certificate of Incorporation or ByLaws of HBI or Darien as if such
obligations were pursuant to a contract or arrangement between HUBCO and such
Indemnitees.
(c) In the event HUBCO or any of its successors or
assigns (i) reorganizes or consolidates with or merges into or enters into
another business combination transaction with any other person or entity and is
not the resulting, continuing or surviving corporation or entity of such
consolidation, merger or transaction, or (ii) liquidates, dissolves or transfers
all or substantially all of its properties and assets to any person or entity,
then, and in each such case, proper provision shall be made so that the
successors and assigns of HUBCO assume the obligations set forth in this Section
5.14.
(d) HUBCO shall cause HBI's and Darien's officers
and directors to be covered under HUBCO's then current officers' and directors'
liability insurance policy for a period of six years after the Effective Time,
or, in the alternative, to be covered under an extension of HBI's and Darien's
existing officers' and directors' liability insurance policy. However, HUBCO
shall only be required to insure such persons upon terms and for coverages
substantially similar to HBI's and Darien's existing officers' and directors'
liability insurance.
(e) Any Indemnitee wishing to claim indemnifica-
tion under this Section 5.14 shall promptly notify HUBCO upon
<PAGE>
learning of any Claim, but the failure to so notify shall not relieve HUBCO of
any liability it may have to such Indemnitee if such failure does not materially
prejudice HUBCO. In the event of any Claim (whether arising before or after the
Effective Time) as to which indemnification under this Section 5.14 is
applicable, (x) HUBCO shall have the right to assume the defense thereof and
HUBCO shall not be liable to such Indemnitees for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnitee in
connection with the defense thereof, except that if HUBCO elects not to assume
such defense, or counsel for the Indemnitees advises that there are issues which
raise conflicts of interest between HUBCO and the Indemnitees, the Indemnitees
may retain counsel satisfactory to them, and HUBCO shall pay the reasonable fees
and expenses of such counsel for the Indemnitees as statements therefor are
received; provided, however, that HUBCO shall be obligated pursuant to this
Section 5.14(e) to pay for only one firm of counsel for all Indemnitees in any
jurisdiction with respect to a matter unless the use of one counsel for multiple
Indemnitees would present such counsel with a conflict of interest that is not
waived, and (y) the Indemnitees will cooperate in the defense of any such
matter. HUBCO shall not be liable for settlement of any claim, action or
proceeding hereunder unless such settlement is effected with its prior written
consent. Notwithstanding anything to the contrary in this Section 5.14, HUBCO
shall not have any obligation hereunder to any Indemnitee when and if a court of
competent jurisdiction shall ultimately determine, and such determination shall
have become final and nonappealable, that the indemnification of such Indemnitee
in the manner contemplated hereby is prohibited by applicable law or public
policy.
5.15 BANK MERGER. Notwithstanding that HBI believes that it
has established all reserves and taken all provisions for possible loan losses
required by GAAP and applicable laws, rules and regulations, HBI recognizes that
HUBCO has adopted different loan, accrual and reserve policies (including loan
classifications and levels of reserves for possible loan losses). From and after
the date of this Agreement to the Effective Time and in order to formulate the
plan of integration for the Bank Merger, HBI and HUBCO shall consult and
cooperate with each other with respect to (i) conforming, based upon such
consultation, HBI's loan, accrual and reserve policies to those policies of
HUBCO to the extent appropriate, provided that any required change in HBI's
practices in connection with the matters described in this clause (i) need not
be effected until the parties receive all necessary governmental approvals and
consents to consummate the transactions contemplated hereby, (ii) new extensions
of credit or material revisions to existing terms of credits by Darien, in each
case where the aggregate exposure exceeds $500,000.00, and (iii) conforming,
based upon such consultation, the composition of the investment portfolio and
overall asset/liability management position of HBI and Darien to the extent
appropriate.
<PAGE>
5.16 RIGHTS PLAN. Prior to the Closing Date, HBI will
redeem all rights issued to the shareholders of HBI pursuant to the
Common Shares Rights Agreement dated September 20, 1990 in
accordance with the terms of such agreement.
ARTICLE VI - CLOSING CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS UNDER THIS
AGREEMENT. The respective obligations of each party under this Agreement to
consummate the Merger shall be subject to the satisfaction, or, where
permissible under applicable law, waiver at or prior to the Effective Time of
the following conditions:
(a) Approval of HBI Stockholders. This Agreement
and the transactions contemplated hereby shall have been approved by the
requisite vote of the stockholders of HBI and, if necessary in the opinion of
HUBCO's counsel, the stockholders of HUBCO.
(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 Connecticut
Commissioner) required to consummate the transactions contemplated hereby shall
have been obtained without any term or condition which would materially impair
the value of HBI and Darien, 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 HBI 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.
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:
<PAGE>
(a) Representations and Warranties; Performance of
Obligations of HBI and Darien. Except for those representations which are made
as of a particular date, the representations and warranties of HBI 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. HBI
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 HBI 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 HBI 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 HBI Disclosure Schedule, materially adversely
affect the representation as to which the supplement or amendment relates.
(b) Opinion of Counsel. HUBCO shall have received
an opinion of counsel to HBI, dated the Closing Date, in form and substance
reasonably satisfactory to HUBCO, covering the matters customarily covered in
opinions of counsel in transactions of this type.
(c) Certificates. HBI shall have furnished HUBCO
with such certificates of its officers or other documents to evidence
fulfillment of the conditions set forth in this Section 6.2 as HUBCO may
reasonably request.
(d) No Parachute Payments. No payments under any
severance agreement or any other plan or arrangement with HBI or Darien will
constitute an "excess parachute payment," as defined in Section 280G of the Code
or regulations promulgated thereunder.
(e) Legal Fees. HBI shall have furnished HUBCO
with letters from all attorneys representing HBI and Darien in any matters
certifying that all legal fees have been paid in full for services rendered as
of the Effective Time.
(f) Merger-Related Expense. HBI shall have pro-
vided 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 HBI shall be reasonable.
(g) Connecticut DEP Compliance. With respect to
any Properties which are Establishments under the Connecticut
Transfer Act, prior to the Closing HBI shall have delivered to
<PAGE>
HUBCO an appropriate Form in form and content acceptable to the DEP and prior to
the Closing shall have fully accrued on HBI's books and disclosed to HUBCO the
entire anticipated costs associated with any requested or reasonably anticipated
clean-up.
6.3 CONDITIONS TO THE OBLIGATIONS OF HBI UNDER THIS AGREEMENT.
The obligations of HBI under this Agreement shall be further subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) Representations and Warranties; Performance of
Obligations of HUBCO. Except for those representations which are made as of a
particular date, the representations and warranties of HUBCO contained in this
Agreement shall be true and correct in all material respects on the Closing Date
as though made on and as of the Closing Date. HUBCO shall have performed in all
material respects the agreements, covenants and obligations to be performed by
it prior to the Closing Date. With respect to any representation or warranty
which as of the Closing Date has required a supplement or amendment to the HUBCO
Disclosure Schedule to render such representation or warranty true and correct
in all material respects as of the Closing Date, the representation and warranty
shall be deemed true and correct as of the Closing Date only if (i) the
information contained in the supplement or amendment to the HUBCO Disclosure
Schedule related to events occurring following the execution of this Agreement
and (ii) the facts disclosed in such supplement or amendment would not either
alone, or together with any other supplements or amendments to the HUBCO
Disclosure Schedule, materially adversely effect the representation as to which
the supplement or amendment relates.
(b) Opinion of Counsel to HUBCO. HBI shall have
received an opinion of counsel to HUBCO, dated the Closing Date, in form and
substance reasonably satisfactory to HBI, covering the matters customarily
covered in opinions of counsel in transactions of this type.
(c) Fairness Opinion. HBI shall have received an
opinion from Brown, dated no more than three days prior to the date the Proxy
Statement is mailed to HBI's stockholders, to the effect that, in its opinion,
the consideration to be paid to stockholders of HBI 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 Brown to withdraw its Fairness Opinion prior
to the Closing.
(d) Certificates. HUBCO shall have furnished HBI
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 HBI may
reasonably request.
<PAGE>
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 HBI:
(a) by mutual written consent of the parties
hereto;
(b) by HUBCO or HBI (i) if the Effective Time
shall not have occurred on or prior to February 28, 1997 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 HBI 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 required by law or
applicable Nasdaq rules, such vote 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 HBI upon written notice to the
other if any application for regulatory or governmental approval necessary to
consummate the Merger and the other transactions contemplated hereby shall have
been denied or withdrawn at the request or recommendation of the applicable
regulatory agency or Governmental Entity or by HUBCO upon written notice to HBI
if any such application is approved with conditions which materially impair the
value of HBI and Darien, 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 HBI and Darien, taken as a whole, from that disclosed by HBI in
HBI's Annual Report on Form 10-K for the year ended December 31, 1995; or (ii)
there was a material breach in any representation, warranty, covenant, agreement
or obligation of HBI hereunder and such breach shall not have been remedied
within 30 days after receipt by HBI of notice in writing from HUBCO to HBI
specifying the nature of such breach and requesting that it be remedied;
(e) by HBI, if 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 HBI 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 satis-
fied by February 28, 1997;
<PAGE>
(g) by HBI if the conditions set forth in Section
6.3 are not satisfied and are not capable of being satisfied by
February 28, 1997;
(h) by HBI, if HBI'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 HBI pursuant to Section 7.1,
this Agreement (other than Section 5.5(b), the penultimate sentence of Section
5.6(g), 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 HBI 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 HBI 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 HBI may bear the expenses of Darien.
<PAGE>
(b) Notwithstanding any provision in this Agree-
ment to the contrary, in the event that either of the parties shall willfully
default in its obligations hereunder, the non-defaulting party may pursue any
remedy available at law or in equity to enforce its rights and shall be paid by
the willfully defaulting party for all damages, costs and expenses, including
without limitation legal, accounting, investment banking and printing expenses,
incurred or suffered by the non-defaulting party in connection herewith or in
the enforcement of its rights hereunder.
8.2 SURVIVAL. The respective representations, warranties,
covenants and agreements of the parties to this Agreement shall not survive the
Effective Time, but shall terminate as of the Effective Time, except for Article
II, this Section 8.2 and Sections 5.5(b), 5.11 and 5.14.
8.3 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or by reputable overnight courier or sent by registered or certified
mail, postage prepaid, as follows:
(a) If to HUBCO, to:
HUBCO, Inc.
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 HBI, to:
Hometown Bancorporation, Inc.
20 West Avenue
Darien, Connecticut 06820-0513
Attn.: Kevin E. Gage, President
and Chief Executive Officer
<PAGE>
Copy to:
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York 10112
Attn.: Peter G. Smith, Esq.
or such other addresses as shall be furnished in writing by any party, and any
such notice or communications shall be deemed to have been given as of the date
actually received.
8.4 PARTIES IN INTEREST; ASSIGNABILITY. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Nothing in this Agreement is intended to
confer, expressly or by implication, upon any other person any rights or
remedies under or by reason of this Agreement except the Indemnitees described
in Section 5.14. This Agreement and the rights and obligations of the parties
hereunder may not be assigned.
8.5 ENTIRE AGREEMENT. This Agreement, which includes the
Disclosure Schedules hereto and the other documents, agreements and instruments
executed and delivered pursuant to or in connection with this Agreement,
contains the entire Agreement between the parties hereto with respect to the
transactions contemplated by this Agreement and supersedes all prior
negotiations, arrangements or understandings, written or oral, with respect
thereto, other than any confidentiality agreements entered into by the parties
hereto.
8.6 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and each of which shall be deemed an original.
8.7 GOVERNING LAW. This Agreement shall be governed by
the laws of the State of New Jersey, without giving effect to the
principles of conflicts of laws thereof.
8.8 DESCRIPTIVE HEADINGS. The descriptive headings of
this Agreement are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agree-
ment.
8.9 KNOWLEDGE. Representations made herein which are qualified
by the phrase to the best of HBI's knowledge or similar phrases refer as of the
date hereof to the best knowledge of the Chief Executive Officer, the Chief
Financial Officer and the Chief Lending Officer of HBI and thereafter refer to
the best knowledge of any senior officer of HBI or any HBI Subsidiary.
Representations made herein which are qualified by the phrase to the best of
HUBCO's knowledge or similar phrases refer as of the date hereof to the best of
the knowledge of the President and Chief
<PAGE>
Executive Officer, the Executive Vice President/Legal and the Chief Financial
Officer of HUBCO and thereafter refer to the best knowledge of any senior
officer of HUBCO or any HUBCO Subsidiary.
<PAGE>
IN WITNESS WHEREOF, HUBCO, the Bank, HBI and Darien have
caused this Agreement to be executed by their duly authorized officers as of the
day and year first above written.
ATTEST: HUBCO, INC.
By:________________________ By:___________________________
, Kenneth T. Neilson, President
Secretary and Chief Executive Officer
ATTEST: HOMETOWN BANCORPORATION, INC.
By:________________________ By:___________________________
, Kevin E. Gage, President
Secretary and Chief Executive Officer
ATTEST: HUDSON UNITED BANK
By:________________________ By:___________________________
, Kenneth T. Neilson, President
Secretary and Chief Executive Officer
ATTEST: THE BANK OF DARIEN
By:________________________ By:__________________________
, Kevin E. Gage, President
Secretary and Chief Executive Officer
<PAGE>
CERTIFICATE OF HBI AND DARIEN DIRECTORS
Reference is made to the Agreement and Plan of Merger, dated
April 28, 1996 (the "Agreement"), among HUBCO, Inc., Hudson United Bank,
Hometown Bancorporation, Inc., and The Bank of Darien. Capitalized terms used
herein have the meanings given to them in the Agreement.
Each of the following persons, being all of the directors of
HBI and Darien, agrees to vote or cause to be voted all shares of HBI Common
Stock which are held by such person, or over which such person exercises full
voting control (except as trustee or in a fiduciary capacity, or as nominee), in
favor of the Merger.
Dated: April 28, 1996
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") dated April 28,
1996, is by and between HUBCO, Inc., a New Jersey corporation and registered
bank holding company ("HUBCO") for Hudson United Bank (the "Bank"), and Hometown
Bancorporation, Inc., a Delaware corporation and registered bank holding company
("HBI") for The Bank of Darien ("Darien").
BACKGROUND
1. HUBCO, the Bank, HBI and Darien have executed an Agreement
and Plan of Merger (the "Merger Agreement") pursuant to which HUBCO will acquire
HBI through a merger of HBI with and into HUBCO (the "Merger").
2. As an inducement to HUBCO to enter into the Merger
Agreement and in consideration for such entry, HBI desires to grant to HUBCO an
option to purchase authorized but unissued shares of common stock of HBI 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 HBI,
intending to be legally bound hereby, agree:
1. GRANT OF OPTION. HBI hereby grants to HUBCO the option to
purchase 435,000 shares of common stock, $1.00 par value (the "Common Stock") of
HBI at an exercise price of $13.75 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, 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.
As used in this Agreement, 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;
<PAGE>
b. enters into a letter of intent or an agreement,
whether oral or written, with HBI pursuant to which such person or any affiliate
of such person would (i) merge or consolidate, or enter into any similar
transaction with HBI, (ii) acquire all or a significant portion of the assets or
liabilities of HBI, or (iii) acquire beneficial ownership of securities
representing, or the right to acquire beneficial ownership or to vote securities
representing, 20% or more of the then outstanding shares of Common Stock;
c. makes a filing with any bank 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 HBI or any other business combination involving
HBI, 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
HBI called to vote on the Merger and HBI stockholders fail to approve the Merger
by the vote required by applicable law at the meeting of stockholders called for
such purpose;
d. makes a bona fide Proposal and thereafter, but
before such Proposal has been Publicly Withdrawn, HBI willfully takes any action
in any manner which would materially interfere with its desire or ability to
consummate the Merger or materially reduce the value of the Merger transaction
to HUBCO; or
e. which is the holder of more than 5% of the
Common Stock solicits proxies in opposition to approval of the Merger.
The term "Triggering Event" also means the taking of any
direct or indirect action by HBI 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 HBI Common Stock, a merger, consolidation, plan of exchange, plan of
acquisition or reorganization of HBI, or a sale of shares of HBI Common Stock or
25% or more of the assets or liabilities of HBI.
"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 HBI or in soliciting or inducing any
other person (other than HUBCO or any affiliate) to do so.
<PAGE>
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 HBI to issue the shares of Common Stock
subject to the Option (as such number of shares may be adjusted pursuant to
Section 5 hereof, 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.
HBI 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 HBI shall not be a condition to the right of HUBCO to exercise the
Option. HBI will not take any action which would have the effect of preventing
or disabling HBI 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 HBI (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, 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 HBI of the aggregate price for the
Option Shares so purchased by wire transfer of immediately available funds to an
account designated by HBI, (b) HBI 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 HBI, 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
<PAGE>
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 Hometown
Bancorporation, Inc., 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, HBI 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 HBI 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, HBI 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 HBI 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 HBI 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, HBI 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 HBI or alleged untrue statement with respect to HBI of
any material fact contained in any preliminary or final registration statement
or any amendment or supplement thereto, or arise out of a material fact with
respect to HBI required to be stated therein or necessary to make the statements
therein with respect to HBI not misleading; and HBI 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, that HBI 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
<PAGE>
written information furnished by or on behalf of HUBCO specifically for use in
the preparation thereof. HUBCO will indemnify and hold harmless HBI 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 HBI for any
legal or other expense reasonably incurred by HBI 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
(i) any capital reorganization or reclassification of the Common Stock, or (ii)
any consolidation, merger or similar transaction of HBI with another entity, or
(iii) any sale of all or substantially all of the assets of HBI, 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, 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 HBI,
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.
<PAGE>
6. FILINGS AND CONSENTS. Each of HUBCO and HBI 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
HBI 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 HBI. HBI hereby
represents and warrants to HUBCO as follows:
a. DUE AUTHORIZATION. HBI 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 HBI.
b. AUTHORIZED SHARES. HBI has taken and, as long
as the Option is outstanding, will take all necessary corporate action to
authorize and reserve for issuance the Option Shares.
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 HBI or, to its
knowledge, any agreement, instrument, judgment, decree, statute, rule or order
applicable to HBI.
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 HBI 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
<PAGE>
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, 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.
<PAGE>
If to HBI, to:
Hometown Bancorporation, Inc.
20 West Avenue
Darien, Connecticut 06820-0513
Attn.: Kevin E. Gage, President
and Chief Executive Officer
Copy to:
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York 10112
Attn.: Peter G. Smith, Esq.
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, that if termination of the
<PAGE>
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.
20. EFFECTIVENESS AND TERMINATION FEE. Solely for the purposes
of the Connecticut Banking Laws, Section 36a-184, this Agreement shall not be
considered effective until and unless it is submitted to and approved by the
Commissioner of the Connecticut Department of Banking (the "Commissioner"). HBI
shall pay Earth a termination fee of $3,000,000 (the "Termination Fee"),
forthwith on demand, in lieu of all its other rights hereunder, if each of the
following conditions are met: (a) the Option never becomes effective due to a
failure by the Commissioner to make a determination that the Option may be
exercised, after a request for approval by Earth to do so is submitted by Earth
to the Commissioner, and either the Commissioner makes a determination that the
Option may not be exercised or a period of five months elapses from the date the
request is submitted by Earth; (b) a Triggering Event has occurred, which would
allow Earth to exercise the Option; and (c) HBI is merged or acquired by another
financial institution within 18 months following the Triggering Event. In the
event that Earth is due the Termination Fee hereunder and HBI fails to pay such
Fee on demand by Earth, HBI shall in addition reimburse Earth for the legal fees
and expenses incurred by Earth in seeking to enforce and in collecting the
Termination Fee.
<PAGE>
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.
HOMETOWN BANCORPORATION, INC.
By:___________________________
HUBCO, INC.
By:___________________________
HOMETOWN BANCORPORATION INC.
20 WEST AVENUE DARIEN, CT 06820
NEWS RELEASE
FOR FURTHER INFORMATION CONTACT:
Kevin E. Gage, President and
Chief Executive Officer of
Hometown Bancorporation, Inc./
The Bank of Darien
(203) 662-2546
FOR IMMEDIATE RELEASE
APRIL 29, 1996
HUBCO, INC. AND HOMETOWN BANCORPORATION, INC. SIGN A DEFINITIVE
AGREEMENT
Darien, CT, April 29, 1996 -- HUBCO, Inc. (NASDAQ:HUBC) and Hometown
Bancorporation, Inc. (NASDAQ:HTWN) announced today the signing of a
definitive agreement. HUBCO, Inc. will acquire the stock of Hometown
Bancorporation by merger and merge its subsidiary, The Bank of Darien,
into Lafayette American Bank and Trust Company which is merging with
HUBCO under a definitive agreement dated February 6, 1996. Under the
terms of the Hometown Agreement, Hometown shareholders will receive
$17.75 per share in cash. In connection with the transaction, Hometown
has issued an option to HUBCO which, based on certain defined events,
could result in the issuance of 435,000 Hometown common shares to HUBCO.
The transaction, which is expected to close during the third quarter
will be accounted for under the purchase accounting method.
The merger is subject to approval by Federal and Connecticut bank
regulatory authorities and the shareholders of Hometown, as well as
other customary conditions. Hometown Bancorporation, Inc. is a $210
million commercial bank headquartered in Darien, Connecticut with
offices in Darien and Westport. HUBCO, Inc. owns Hudson United Bank with
assets of $1.7 billion and more than 60 offices in Northern New Jersey
and under its agreement with Lafayette American will have nineteen
Connecticut offices primarily in Fairfield and New Haven counties with
over $720 million in assets.
HUBCO's President and Chief Executive Officer, Kenneth T. Neilson
commented, "This acquisition will expand HUBCO's Connecticut franchise
in Fairfield County and is expected to be accretive to earnings per
share. Hometown's market area both expands and overlaps that of
Lafayette American. The investments which HUBCO has made in products and
technology over the past eighteen months will bring new services to
Hometown customers while continuing HUBCO's drive to increase revenues
and achieve efficiencies. This merger represents a continuation of
HUBCO's strategy to develop a chain of efficient community banking
institutions providing local services to their customers and communities
while achieving efficiencies through technology, centralized processing
and strong incentive programs."
Kevin E. Gage, President and Chief Executive Officer of Hometown stated,
"We believe this transaction is favorable to both the Stockholders and
customers of Hometown. HUBCO shares our belief in community banking and
is committed to delivering the high standard of service and
professionalism which our customers have come to expect. Through
HUBCO's added products and services, as well as technological
enhancements used in the delivery of those products and services, HUBCO
will be filling a void presently existing in the Connecticut
marketplace."
This will be HUBCO's fifteenth acquisition in the last five and one half
years.
###
