PURCHASE AND ASSUMPTION AGREEMENT
This Agreement, dated as of March 2, 1998, is by and between HUBCO,
Inc., a bank holding company having its principal place of business in Mahwah,
New Jersey ("Buyer"), and First Union National Bank, a national banking
association having its principal place of business in Charlotte, North Carolina
("Seller").
I. DEFINITIONS
1.1 Certain Defined Terms.
Some of the capitalized terms appearing in this Agreement are
defined below. The definition of a term expressed in the singular also applies
to that term as used in the plural and vice versa.
"Affiliate" means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, a specified Person, except in those cases where the
controlling Person exercises control solely in a fiduciary capacity.
"Amount of Premium" has the meaning set forth in Section 3.1
of this Agreement.
"Assets" has the meaning set forth in Section 2.1 of this
Agreement.
"Benefit Plan" means any pension, profit-sharing, or other
employee benefit, fringe benefit, severance or welfare plan maintained by or
with respect to which contributions are made by, Seller or any of its Affiliates
with respect to Seller's employees.
"Branches" means those branch offices of Seller listed on
Schedule 1.1 to this Agreement.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday
or Friday on which Seller is open for business.
"CBCT" means customer branch communications terminal.
"Cash Reserve Lines of Credit" means those consumer lines of
credit made available to customers of the Branches as a protection against
overdrafts on Deposit Accounts.
"Cash Reserve Loans" means those loans outstanding on the
Closing Date pursuant to Cash Reserve Lines of Credit.
"Closing" means the purchase of the Assets by Buyer and the
assumption of the Liabilities by Buyer on the Closing Date.
"Closing Date" has the meaning set forth in Section 9.1 of
this Agreement.
"Commercial Loans" means those commercial loans of Seller
listed on Schedule 1.2 to this Agreement.
"Deposit Accounts" means the deposit accounts at the Branches,
the balances of which are included in the Deposits or would be so included if
the Deposit Account had a positive balance.
"Deposits" means all deposits (as defined in 12 U.S.C. Section
1813(l)) which are booked at the Branches on the Closing Date, including in each
case accrued but unpaid interest and both collected and uncollected funds, but
excluding (i) deposits held in accounts for which Seller acts as fiduciary
(other than deposits held by Retirement Plans), (ii) deposits constituting
official checks, travelers checks, money orders or certified checks, or (iii)
deposits held in CAP Accounts.
"Equipment Leases" means those operating and financial leases
and conditional sales contracts covering Fixed Assets which Seller may assign to
Buyer without restriction or with the lessor's written consent.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means any entity that is considered one
employer with Seller under Section 4001 of ERISA or Section 414 of the Internal
Revenue Code of 1986, as amended.
"Federal Funds Rate" means, for any day, the rate per annum
(expressed on a basis of calculation of actual days in a year) equal to the
"near closing bid" federal funds rate published in The Wall Street Journal on
the Business Day following the Closing Date.
"Fixed Assets" means all fixtures (including signage poles),
leasehold improvements, furnishings (excluding artwork owned by Seller), vaults,
safe deposit boxes, equipment (including, for example, all ATM machines, but
excluding any computer or telecommunications equipment), supplies (other than
forms and other supplies which bear Seller's name or logo), and other personal
property, which are owned or (to the extent of Seller's interest as lessee)
leased by Seller, which are located at the Branches on the Closing Date.
"Governmental Entity" means any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government having authority in the
United States, whether federal, state or local.
"Hazardous Material" means any substance presently listed,
defined, designated or classified as hazardous, toxic, radioactive or dangerous
or otherwise regulated, under any applicable state or federal law relating to
the protection, preservation or restoration of the environment, including, but
not limited to, the following federal environmental laws: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendment and Reauthorization Act, the Water Pollution Control Act of 1972, the
Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act
of 1976, the Solid Waste Disposal Act, the Toxic Substances Control Act and the
Insecticide, Fungicide and Rodenticide Act, each as amended.
"Leased Branches" means all premises of the Branches which are
leased under the Real Property Leases.
"Liabilities" has the meaning set forth in Section 2.2 of this
Agreement.
"Mediator" means the firm of KPMG Peat Marwick LLP or if such
firm declines to perform the functions of the Mediator specified in this
Agreement, then another firm of certified public accountants mutually agreeable
to Seller and Buyer.
"Overdrafts" means those overdrafts of the book balance of any
Deposit Accounts which are not subject to Cash Reserve Lines of Credit.
"Person" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.
"Real Property" means the land (including the improvements
thereon) owned by Seller on which any Branches are located.
"Real Property Leases" means the lease agreements pursuant to
which any Branches are leased by Seller.
"Retirement Plans" means those non-discretionary individual
retirement accounts and qualified retirement plan accounts relating to the
Deposits for which Seller acts as custodian or trustee.
"Training Expenses" means the overtime and out-of-pocket
expenses (meals and mileage) incurred by Seller as a result of Buyer's training
schedule prior to Closing.
"Welfare Benefit Plans" means those Benefit Plans which are
"welfare benefit plans" as defined by ERISA.
II. PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1 Purchase of Assets.
Subject to the terms and conditions of this Agreement, Seller agrees
to sell, assign and transfer possession of and all right, title and interest of
Seller in and to the following assets to Buyer (the "Assets") and Buyer agrees
to purchase the same from Seller, as of the close of business on the Closing
Date:
(a) the Real Property;
(b) the Fixed Assets;
(c) cash on hand in the Branches;
(d) the Cash Reserve Loans;
(e) the Overdrafts;
(f) Seller's rights under the Cash Reserve Lines of Credit and
any safe deposit box rental agreements relating to safe deposit boxes
located at the Branches; and
(g) the Commercial Loans.
2.2 Assumption of Liabilities.
Buyer agrees to assume, pay, perform and discharge the
following liabilities of Seller (the "Liabilities") as of the close of business
on the Closing Date:
(a) the Deposits and all terms and agreements relating to the
Deposit Accounts;
(b) Seller's duties and responsibilities relating to the
Deposits with respect to: (i) the abandoned property laws of any state,
(ii) any legal process which is served on Seller on or before the
Closing Date with respect to claims against or for the Deposits that is
not against Seller over and above the amount of the Deposits and which
is identified by Seller on Schedule 1.3 to this Agreement on or prior
to the Closing Date; or (iii) any other applicable law;
(c) Seller's duties and responsibilities with respect to the
Real Property Leases and the Equipment Leases;
(d) Seller's duties and responsibilities with respect to the
Cash Reserve Lines of Credit, Cash Reserve Loans, and the Commercial
Loans;
(e) Seller's duties and responsibilities with respect to the
safe deposit boxes located at the Branches; and
(f) Seller's duties and responsibilities with respect to the
Retirement Plans.
2.3 Transfer of Records.
(a) At the Closing, Seller also shall transfer to Buyer
possession and all right, title and interest of Seller in and to all
books and records relating to the Assets and the Liabilities which are
maintained at the Branches.
(b) All books and records relating to the Assets and the
Liabilities held by either Seller or Buyer after the Closing Date shall
be maintained in accordance with (and for the period provided in) that
party's standard recordkeeping policies and procedures. Throughout such
period, the party holding such books and records shall comply with the
reasonable request of the other party to provide copies of specified
documents, at the expense of the requesting party. The requesting party
shall give reasonable notice of any such request.
2.4 Tax Matters.
(a) Notwithstanding Section 2.5, Buyer shall pay to Seller or
the relevant taxing jurisdiction (as appropriate under the
circumstances), or reimburse Seller if Seller shall have paid, any
sales and use taxes and any interest and penalties thereon which are
payable or arise as a result of this Agreement or the consummation of
any of the transactions contemplated by this Agreement.
(b) Notwithstanding Section 2.5, Buyer shall pay to Seller or
the relevant taxing jurisdiction (as appropriate under the
circumstances), or reimburse Seller if Seller shall have paid, any real
property transfer, recording and similar documentary taxes arising out
of the transfer of the Real Property, the Leased Branches, the Real
Property Leases and the Fixed Assets.
2.5 Proration of Certain Expenses.
Subject to the provisions of Section 2.4, all rentals, real
estate taxes, personal property taxes (tangible or intangible), and utility,
water and sewer charges and assessments, as well as semiannual assessments paid
to the Bank Insurance Fund or the Savings Association Insurance Fund with
respect to the Deposits, shall be prorated between Buyer and Seller as of the
close of business on the Closing Date.
2.6 Back Office Conversion.
Seller and Buyer shall cooperate with each other and shall use
their reasonable best efforts (consistent with their internal day-to-day
operations) in order to cause the timely transfer of information concerning the
Assets and the Liabilities which is maintained on Seller's data processing
systems so that Buyer can incorporate such information into Buyer's data
processing systems no later than the opening of business on the Business Day
following the Closing Date.
2.7 Processing of Certain Items After Closing.
A draft of the written practices and procedures under which
Buyer and Seller shall handle all items (including, for example, automated
clearing house and electronic funds transfer items) relating to the Assets and
the Liabilities, which are presented or returned following the Closing Date, and
any claims relating to such items are attached to this Agreement as Exhibit A,
including certain other matters relating to consummation of the transactions
contemplated hereby (the "Working Agreement"). As promptly as practicable
following the execution of this Agreement, the parties agree to finalize the
Working Agreement.
2.8 Information Returns.
Buyer shall file all required information returns with the
Internal Revenue Service with respect to interest paid on the Deposits after the
Closing Date, interest received on the Cash Reserve Loans after the Closing
Date, and any other information returns required with respect to the Assets and
the Liabilities for the periods beginning after the Closing Date. Seller will
file all required information returns with the Internal Revenue Service and any
information returns required by state or local tax authorities with respect to
interest paid on the Deposits on or before the Closing Date, interest received
on the Cash Reserve Loans on or before the Closing Date, and any other
information returns required with respect to the Assets and the Liabilities for
periods ending on or before the Closing Date.
III. CONSIDERATION
3.1 Calculation.
In consideration of Buyer's purchase of the Assets and its
assumption of the Liabilities, Seller agrees to pay to Buyer an amount equal to
the Deposits, plus accrued interest thereon, less the sum of the following, in
each case calculated as of the close of business on the Closing Date:
(a) $1,678,000, representing the purchase price of the Fixed
Assets;
(b) $1,605,000, representing the purchase price of the Real
Property not listed on Schedule 1.4 of this Agreement;
(c) the fair market value of the Real Property listed on
Schedule 1.4 of this Agreement, as determined by an appraiser mutually
agreed upon by Buyer and Seller;
(d) the principal amount of the Cash Reserve Loans, plus
accrued interest thereon;
(e) the principal amount of the Commercial Loans, plus accrued
interest thereon;
(f) the amount of cash on hand at the Branches;
(g) the principal amount of the Overdrafts;
(h) the net amount (which may be a negative amount) of taxes
payable by Buyer and Seller under Section 2.4 (i.e., the amount payable
by Buyer less the amount payable by Seller);
(i) the net amount (which may be a negative amount) of any
adjustments under Section 2.5 (i.e., the amount payable by Buyer less
the amount payable by Seller);
(j) an amount equal to ten (10) percent of the average of the
monthly Deposit average for the three calendar months preceding the
month during which the Closing Date occurs (the "Amount of Premium");
provided, however, that for purposes of calculating the Amount of
Premium, the amount of Deposits shall not include brokered deposits;
and
(k) the Training Expenses.
3.2 Settlement.
(a) Not later than the first Saturday following the Closing
Date, Seller shall deliver to Buyer the Closing Statement prepared in
accordance with Seller's customary practices and procedures used in
preparing financial statements, substantially in the form of Exhibit B
to this Agreement, which shall be completed as of the close of business
on the Closing Date and be the basis of the payment to be made to
Buyer's account on the Monday following the Closing Date (the
"Settlement Payment").
(b) The parties shall cooperate in the preparation of the
Adjusted Closing Statement within 30 days after the Closing Date which
shall be prepared in accordance with Seller's customary practices and
procedures used in preparing financial statements, substantially in the
form of Exhibit C to this Agreement, which shall be completed as of the
close of business on the Closing Date. On the Business Day after Buyer
and Seller agree to the Adjusted Closing Statement, or Buyer and Seller
receive notice of any determination of the Adjusted Closing Statement
under subsection (c) (the "Adjusted Settlement Date"), Seller shall pay
to Buyer (or Buyer shall pay to Seller, as the case may be) an amount
(the "Adjustment Payment") equal to the amount due stated on the
Adjusted Closing Statement, plus interest from the day after the
Closing Date until the calendar day before the Adjustment Payment is
made at a rate per annum (calculated daily based on a 360-day year)
equal to the Federal Funds Rate.
(c) If the parties are unable to agree on the Adjusted Closing
Statement within 30 days after the Closing Date, either party may
submit the matter to the Mediator, which shall determine all disputed
portions of the Adjusted Closing Statement in accordance with the terms
and conditions of this Agreement within 30 days after the submission.
The parties shall each pay half of the fees and expenses of the
Mediator, except that the Mediator may assess the full amount of its
fees and expenses against either party if it determines that party
negotiated the Adjusted Closing Statement in bad faith. The Adjusted
Closing Statement, as agreed upon by the parties and/or determined
under this subsection, shall be final and binding upon the parties.
(d) The Settlement Payment and the Adjustment Payment shall
each be made by wire transfer of immediately available funds to the
account of the party receiving the payment, which account shall be
identified by the party receiving the funds to the other party not less
than two Business Days prior to such payment.
IV. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller makes the following representations and warranties to Buyer.
4.1 Power and Authority.
(a) Seller has the corporate power and authority to enter into
and perform this Agreement. The execution and delivery of this
Agreement has been duly authorized by all necessary corporate action by
Seller. Upon execution and delivery by both parties, this Agreement
will constitute a valid and binding obligation of Seller, enforceable
in accordance with its terms, subject to conservatorship, receivership,
and a court's right under general principles of equity to refuse to
direct specific performance.
(b) The performance of this Agreement by Seller will not
violate any provision of the Articles of Association or Bylaws of
Seller, or any applicable law, rule, regulation, or order or any
contract or instrument by which Seller is bound, except for such
violations which alone, or taken in the aggregate, would not reasonably
be expected to have a material adverse effect on the financial
condition, business or operations of the Branches, taken as a whole, or
the consummation of the transactions contemplated by this Agreement (a
"Seller Material Adverse Effect").
4.2 Litigation and Regulatory Proceedings.
There are no actions, complaints, petitions, suits or other
proceedings, or any decree, injunction, judgment, order or ruling, entered,
promulgated or pending or (to Seller's knowledge) threatened against Seller or
any of the Assets or the Liabilities, which alone, or taken in the aggregate,
reasonably would be expected to have a Seller Material Adverse Effect. No
governmental agency has notified Seller that it would oppose or not approve or
consent to the transactions contemplated by this Agreement and Seller knows of
no reason for any such opposition, disapproval or nonconsent.
4.3 Consents and Approvals.
Except for required regulatory approvals, no consents,
approvals, filings or registrations with any third party or any public body,
agency or authority are required in connection with Seller's consummation of the
transactions contemplated by this Agreement, other than any required lessor
consents to the assignment of the Real Property Leases and the Equipment Leases
and as may be required as a result of any facts or circumstances relating solely
to Buyer.
4.4 Real Property.
(a) Schedule 4.4 contains a list of all the Real Property.
(b) Seller has good and marketable title to the Real Property,
free and clear of all encumbrances, except for easements and
restrictions of record, applicable zoning laws, the rights of landlords
under any ground leases relating to the Real Property, the rights of
any tenants, and liens for taxes and assessments not delinquent.
4.5 Fixed Assets.
Seller has good and marketable title to the Fixed Assets, free
and clear of all encumbrances, claims, charges, security interests, or liens, if
any, which do not materially detract from the value of or interfere with the use
of the Fixed Assets.
4.6 Ownership of Cash Reserve Loans.
Seller has full power and authority to hold each Cash
Reserve Loan, and has good title to the Cash Reserve Loans free and clear of all
liens and encumbrances. Seller is authorized to sell and assign the Cash Reserve
Loans to Buyer and, upon such assignment, Buyer will have the rights of Seller
with respect to the Cash Reserve Loans in accordance with the terms and
conditions thereof.
4.7 Validity of and Compliance with Real Property Leases.
The Real Property Leases are valid and existing leases under
which Seller, as lessee, is entitled to possession of the leased premises. To
Seller's knowledge, no event has occurred and is continuing, which constitutes a
default under any of the Real Property Leases. Subject to Seller obtaining any
necessary landlord consents, the assignment of such leases will transfer to
Buyer all of Seller's rights under the Real Property Leases.
4.8 Compliance with Certain Laws.
The Deposit Accounts and the Cash Reserve Lines of Credit were
opened, extended or made, and have been maintained, in accordance with all
applicable federal and state laws, regulations, rules and orders, and the
Branches have been operated in compliance with Seller's policies and procedures
and all applicable federal and state laws, regulations, rules and orders, except
for such instances of noncompliance which do not have, and are not reasonably
likely to have, a Seller Material Adverse Effect.
4.9 FDIC Insurance.
The Deposits are insured by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund and the Savings Association
Insurance Fund to the extent permitted by law, and all premiums and assessments
required to be paid in connection therewith have been paid when due by Seller.
4.10 Ownership of Commercial Loans.
Seller has full power and authority to hold each Commercial
Loan and has good title to the Commercial Loans free and clear of all liens and
encumbrances. Seller is authorized to sell and assign the Commercial Loans to
Buyer and, upon such assignment, Buyer will have the rights of Seller with
respect to the Commercial Loans in accordance with the terms and conditions
thereof.
4.11 Employment Contracts.
There are no employment or individual severance contracts
between Seller and any of the employees of the Branches.
V. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer makes the following representations and warranties to Seller.
5.1 Power and Authority.
(a) Buyer has the corporate power and authority to enter into
and perform this Agreement. The execution and delivery of this
Agreement has been duly authorized by all necessary corporate action by
Buyer. Upon execution and delivery by both parties, this Agreement will
constitute a valid and binding obligation of Buyer, enforceable in
accordance with its terms subject to conservatorship, receivership, and
a court's right under general principles of equity to refuse to direct
specific performance.
(b) The performance of this Agreement by Buyer will not
violate any provision of the Certificate of Incorporation, Bylaws or
similar governing documents of Buyer, or any applicable law, rule,
regulation, or order or any contract or instrument by which Buyer is
bound except for such violations which alone, or taken in the
aggregate, would not reasonably be expected to have a material adverse
effect on the consummation of the transactions contemplated by this
Agreement (a "Buyer Material Adverse Effect").
5.2 Litigation and Regulatory Proceedings.
There are no actions, complaints, petitions, suits or other
proceedings, or any decree, injunction, judgment, order or ruling, entered,
promulgated or pending or (to Buyer's knowledge) threatened against Buyer or any
of its properties or assets which alone, or taken in the aggregate, reasonably
would be expected to have a Buyer Material Adverse Effect. No governmental
agency has notified Buyer that it would oppose or not approve or consent to the
transactions contemplated by this Agreement, and Buyer knows of no reason for
any such opposition, disapproval or nonconsent.
5.3 Consents and Approvals.
Except for required regulatory approvals, no consents,
approvals, filings or registrations with any third party or any public body,
agency or authority are required in connection with Buyer's consummation of the
transactions contemplated by this Agreement other than what may be required as a
result of any facts or circumstances relating solely to Seller.
VI. ADDITIONAL AGREEMENTS OF SELLER
6.1 Access to Seller's Premises, Records and Personnel.
(a) Upon execution of this Agreement, Seller shall give Buyer
and its representatives such access to the Branches as Buyer may
reasonably request, provided that Buyer does not unreasonably interfere
with the Branches' business operations. Seller shall not be required to
provide access to or to disclose information where such access or
disclosure might violate or prejudice the rights of any customer or
employee or would be contrary to law, rule, regulation or any legal or
regulatory order or process or any fiduciary duty or binding agreement
entered into prior to the date of this Agreement.
(b) Anything contained in this Agreement to the contrary
notwithstanding, Seller shall not be required to disclose, or to cause
the disclosure to Buyer or its representatives (or provide access to
any offices, properties, books or records of Seller, that could result
in the disclosure to such Persons or others), of any tax returns and/or
any work papers relating thereto or any other confidential information
relating to income or franchise taxes or other taxes of Seller, or
trade secrets, patent or trademark applications, or product research
and development belonging to or performed by or for Seller, nor shall
Seller be required to permit or to cause others to permit Buyer or its
representatives to copy or remove from the offices or properties of
Seller any documents, drawings or other materials that might reveal any
such confidential information; provided, however, Buyer shall have
access to tax returns to the extent that liability for the taxes at
issue could be imposed on Buyer.
(c) At Buyer's request, Seller shall authorize and permit
certain of its officers and members of management to engage in
discussions with Buyer for the purposes of discussing the Branches'
business and negotiating and concluding management employment
contracts, employee benefit plans, and new incentive plans and Buyer
shall maintain the confidentiality of any information furnished by such
officers or members of management of Seller pursuant to such
discussions with Buyer.
6.2 Matters Relating to Branch Closing.
In the event that Buyer intends to close any of the Branches
on the Closing Date or before ninety (90) days thereafter, Buyer and Seller
agree to the following:
(a) Subject to subsection (b), Seller and Buyer shall prepare
Branch closing notices to Seller's customers, to be mailed by Seller at
Buyer's request and expense, at such time as shall be mutually agreed
upon between Buyer and Seller. Seller and Buyer also shall prepare
another notice to Seller's customers, to be mailed by Seller at Buyer's
request and expense, of Buyer's impending acquisition of the Branches
within ten Business Days following Seller's receipt of notice that
Buyer has obtained any and all required regulatory approvals for the
transactions contemplated by this Agreement or such earlier date as
Seller and Buyer may mutually agree upon. After Seller mails this
notice, Buyer shall be permitted to provide to Seller material to be
sent, at Buyer's expense, to the depositors, borrowers and other
customers of the Branches concerning the proposed acquisition and
Buyer's products. Each party's communication shall be subject to the
approval of the other party, which approval shall not be unreasonably
withheld.
(b) Unless Buyer shall certify in writing at the time that (x)
Buyer is not aware of the occurrence of any event or condition, which,
if not corrected, would be reasonably expected to result in the failure
of any condition to Closing under Sections 9.3 or 9.4; (y) Buyer has no
reason to believe that any regulatory approval required under Section
9.3(a) will not be forthcoming, and (z) no challenge has been
threatened or filed and is pending with respect to any such regulatory
approval:
(i) Buyer shall not take any action with respect to
any of the Branches which would require that notices be posted
or provided to customers or regulators, as required by 12
U.S.C. Section 1831r-1, on or prior to the Closing Date; and
(ii) Seller shall not be required to participate in
the closing of any Branch or in any notice to customers
relating to such a closing.
(c) Notwithstanding the foregoing, Buyer agrees that it will
not close the Newark/Springfield Avenue Branch prior to one year after
the Closing Date.
6.3 Regulatory Approvals.
Seller agrees to use its reasonable best efforts to obtain
promptly any regulatory approval on which its consummation of the transactions
contemplated by this Agreement is conditioned. Seller also agrees to cooperate
with Buyer in obtaining any regulatory approval which Buyer must obtain before
the Closing. Seller shall notify Buyer promptly of any significant development
with respect to any application it files under this Section. Seller also shall
provide Buyer with a copy of any regulatory approval it receives under this
Section, promptly after Seller's receipt of the same.
6.4 Conduct of Business.
Except as provided in this Agreement or as may otherwise be
agreed upon by Buyer, Seller will continue to carry on the business at the
Branches until the Closing in the ordinary course of business, consistent with
prudent business practices. Seller shall not terminate the operation of any
Branch, unless those operations cease due to events beyond Seller's control.
Seller will notify Buyer of any event of which Seller obtains knowledge which
would make any of Seller's representations under Article IV of this Agreement
false in any material respect.
6.5 Covenant of Seller not to Compete.
Seller hereby agrees not to purchase or open a de novo brick
and mortar branch facility (excluding any ATMs or CBCTs) within an area
extending one (1) mile in all directions from the location of each Branch for a
period of two (2) years from the Closing Date; provided, however, that Seller,
or its affiliates, shall be expressly permitted to acquire a financial
institution notwithstanding the fact that the financial institution to be
acquired has a branch or other facility in such location, and provided, further,
that the consolidation of one or more of Seller's branches in Clifton, New
Jersey into a new branch or facility in any such location shall not be
prohibited by this Section 6.5.
6.6 Covenant of Seller Not to Solicit.
Seller hereby agrees that from the date of this Agreement and
for a period of two (2) years after the Closing Date, Seller shall not
specifically target and solicit customers of the Branches whose Deposits are
being purchased by the Seller; provided, however, that nothing in this section
shall (i) restrict general mass mailings, telemarketing calls, statement
stuffers, advertisements or other similar communications whether in print, on
radio or television, or by other means that are directed to the general public
or to a group of customers who may include customers of the Branches, provided
that such group is defined by criteria other than solely as customers of the
Branches, or (ii) otherwise prevent Seller from taking such actions as may be
required to comply with any applicable federal or state laws, rules or
regulations or from servicing or communicating with the then-current customers
of Seller or its affiliates.
VII. ADDITIONAL AGREEMENTS OF BUYER
7.1 Regulatory Approvals.
Buyer agrees to use its reasonable best efforts to obtain
promptly any regulatory approval on which its consummation of the transactions
contemplated by this Agreement is conditioned. Buyer also agrees to cooperate
with Seller in obtaining any regulatory approval which Seller must obtain before
the Closing. Buyer shall notify Seller promptly of any significant development
with respect to any application it files under this Section. Buyer also shall
provide Seller with a copy of any regulatory approval it receives under this
Section, promptly after Buyer's receipt of the same.
7.2 Change of Name, Etc.
Immediately after the Closing, Buyer will (a) change the name
and logo on all documents and facilities relating to the Assets and the
Liabilities to Buyer's name and logo, (b) notify all persons whose Cash Reserve
Loans, Commercial Loans or Deposits are transferred under this Agreement of the
consummation of the transactions contemplated by this Agreement, and (c) provide
all appropriate notices to the Federal Deposit Insurance Corporation and any
other regulatory authorities required as a result of the consummation of such
transactions. Buyer agrees not to use any forms or other documents bearing
Seller's name or logo after the Closing without the prior written consent of
Seller, and, if such consent is given, Buyer agrees that all such forms or other
documents to which such consent relates will be stamped or otherwise marked in
such a way that identifies Buyer as the party using the form or other document.
As soon as practicable and, in any event, within two calendar days after the
Closing Date, Buyer will issue new checks reflecting its transit and routing
number to customers of the Branches with check writing privileges. Buyer shall
use its best efforts to encourage these customers to begin using such checks and
cease using checks bearing Seller's name.
7.3 Real Property.
(a) Except as expressly set forth herein, Buyer hereby acknowledges and
agrees that: (i) Buyer is expressly purchasing the Real Property in its existing
condition "AS IS, WHERE IS, AND WITH ALL FAULTS" with respect to any facts,
circumstances, conditions and defects; (ii) Seller has no obligation to repair
or correct any such facts, circumstances, conditions or defects or to compensate
Buyer for same; (iii) Seller has specifically bargained for the assumption by
Buyer of all responsibility to inspect and investigate the Real Property and of
all risk of adverse conditions; and (iv) Buyer has or will have prior to the
Closing undertaken all such physical inspections and examinations of the Real
Property as Buyer deems necessary or appropriate as to the condition of the Real
Property. Except as expressly set forth herein, Buyer acknowledges that Seller
has made no representations or warranties and shall have no liability to Buyer
(and Buyer hereby waives any right to recourse against Seller) with respect to
the conditions of the soil, the existence or nonexistence of hazardous
substances, any past use of the Real Property, the economic feasibility of the
Real Property, or the Real Property's compliance or noncompliance with all laws,
rules or regulations affecting the Real Property.
(b) Buyer may, at Buyer's option, within sixty (60) days from
the date of this Agreement, undertake such physical inspections and examinations
of the Real Property and the Leased Real Property, and the legal title thereto,
including such inspections of the buildings thereon, as Buyer deems necessary or
appropriate. The cost of any such inspections and examinations shall be
responsibility of Buyer.
(i) If Buyer shall discover a Material Defect, as
defined herein, as a result of Buyer's inspections and
examinations Buyer shall give Seller written notice as soon as
possible describing the facts or conditions constituting such
Material Defect and the measures which Buyer reasonably
believes are necessary to correct such Material Defect. Seller
shall promptly notify Buyer whether Seller elects to cure such
Material Defect or terminate the Agreement with respect to
such Branch, unless Buyer elects to waive such Material
Defect. If Seller elects to cure, then Seller shall have until
the Closing Date, or such later time as shall be mutually
agreeable to the parties which agreement shall not be
unreasonably withheld, in which to cure such Material Defect
to Buyer's reasonable satisfaction and, unless such cure is
after the Closing Date, Seller's reasonable cure shall be a
condition to Buyer's obligation to purchase the Assets and
assume the Liabilities with respect to such Branch under this
Agreement. "Material Defect" shall mean the existence of (x) a
lien or encumbrance on the legal title to the Real Property,
except as previously disclosed in writing to Buyer by Seller,
which materially detracts from the value of the Real Property,
(y) any discharge, disposal, release, threatened release or
emission of any Hazardous Material in the ground or the
structure of the Branch or the existence of any underground
storage tank for which the Buyer has been advised in writing
by its legal counsel that Buyer could become responsible for
the assessment, removal or remediation of such discharge,
disposal, release, threatened release, emission, the existence
of such tank or for other corrective action, (z) with respect
to the buildings, material deficiencies in the plumbing,
electrical, HVAC, drive thru air transport system, roof,
walls, or foundations.
(ii) With regard to the Leased Branches, Buyer and
Seller understand that conducting the inspections and
affecting the cure of a Material Defect, if any, may require
the action or the consent of the lessor. In the event that the
lessor elects not to undertake such action or give such
consent relating to the cure of a Material Defect, then Buyer
may terminate the Agreement with respect to such Branch.
(c) No information or the contents of any environmental
audits, nor the results of any investigation of the real estate
conducted pursuant to this section, including, but not limited to, the
contents of the report issued in connection therewith, shall be
disclosed by Buyer or its agents, consultants or employees to any third
party without Seller's prior written approval, unless and until Buyer
is legally compelled to make such disclosure under applicable laws or
until Buyer completes its purchase of the Real Property pursuant to
this Agreement. Notwithstanding the foregoing, Buyer may disclose such
matters to its directors, executive officers, legal counsel and such
employees who are reasonably required to receive such disclosure (such
parties being referred to as "Buyer" for purposes of this section), the
specific identities of whom shall be supplied to Seller prior to any
permitted disclosure to such party by Buyer. If this Agreement is
terminated for any reason, Buyer shall immediately deliver and/or
return to Seller any and all documents, plans and other items furnished
to Buyer pursuant to this section.
VIII. SELLER'S EMPLOYEES
8.1 Transferred Employees.
(a) Buyer will offer to employ all of Seller's employees who
are employed at the Branches on the Closing Date. From and after the
Closing Date, Buyer shall provide the employees of Seller who are
offered employment with Buyer, and who accept such employment, with a
salary or hourly wage comparable to that earned by them at the time of
the Closing. (Such employees who become employees of Buyer after the
Closing shall be referred to as "Transferred Employees.")
(b) Seller is responsible for the filing of Forms W-2 with the
Internal Revenue Service and any required filing with state tax
authorities, with respect to wages and benefits paid to each
Transferred Employee for periods ending on or prior to the Closing
Date.
8.2 Employee Benefits.
(a) (i) Following the Closing, Buyer shall not have any
liability or obligation under any Benefit Plans or any other program or
arrangement of Seller or an ERISA Affiliate thereof under which any
current or former employee of Seller or any of its Affiliates has any
right to any benefits;
(ii) Upon the Closing, the participation of Transferred
Employees in the Benefit Plans shall cease in accordance with the terms
of such plans; and
(iii) With respect to the Transferred Employees, Seller shall
be responsible for any welfare benefits or claims which, by reason of
events which take place on or prior to the Closing Date, become payable
under the terms of any Welfare Benefit Plan. With respect to
Transferred Employees, Buyer shall be responsible for any welfare
benefits or claims which become payable by reason of events that take
place after the Closing Date.
(b) (i) From and after the Closing Date, Buyer shall provide
the Transferred Employees with the employee benefits, if any, provided
to employees of Buyer and its Affiliates, subject to the terms of
Buyer's benefit plans;
(ii) Buyer will grant for purposes of vacation benefits,
severance pay and all welfare benefit plans (as defined in ERISA) past
service credit to all Transferred Employees for periods of time
credited to such Transferred Employees under the Welfare Benefit Plans.
In addition, Buyer's plans and programs shall be applied to the
Transferred Employees without regard to any limitations relating to
preexisting conditions or required physical examinations that would not
otherwise apply under the respective Welfare Benefit Plans to the
extent that such Transferred Employees are covered by the Welfare
Benefit Plans on the Closing Date;
(iii) Buyer shall take whatever action is necessary, including
amendment of its 401-K savings plan, to grant to each Transferred
Employee past service credit for all purposes (including any waiting
period) under Buyer's 401-K savings plan for all periods of service
credited to each such Transferred Employee under the Seller's 401-K
savings plan. Within 45 days after the Closing Date, Seller shall
provide to Buyer such information as Buyer reasonably requires to
establish the service for the Transferred Employees credited under the
Seller's 401-K savings plan; and
(iv) Buyer will grant to each Transferred Employee past
service credit for service which has been granted under Seller's
defined benefit pension plan, for all purposes, other than benefit
accrual, under Buyer's defined benefit pension plan.
8.3 Training.
Seller shall permit Buyer to train the Transferred Employees
before Closing with regard to Buyer's operations, policies and procedures at
Buyer's sole cost and expense. This training shall take place outside of
business hours and may, at Seller's option, take place at the Branches.
IX. CLOSING AND CONDITIONS TO CLOSING
9.1 Time and Place of Closing.
The Closing shall be on a date mutually agreed upon by the
parties (the "Closing Date") which shall be on a Friday and shall be no more
than 60 days after the last regulatory approval necessary for the Closing has
been obtained (without regard to any statutory waiting periods following such
approval). The Closing shall take place at Seller's offices located at 000 Xxxxx
Xxxx, 0xx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000, at 10:00 a.m. on the Closing Date, or
at a time and place otherwise determined by mutual agreement of the parties.
9.2 Exchange of Closing Documents.
The parties shall exchange drafts of all documents to be
delivered at the Closing (other than the Closing Statement) at least ten
Business Days prior to the Closing Date.
9.3 Buyer's Conditions to Closing.
Buyer's obligations to purchase the Assets and assume the
Liabilities is contingent upon and subject to the fulfillment of the following
conditions in all material respects:
(a) the parties obtaining all regulatory approvals which are
required in order for them to proceed with the transactions
contemplated by this Agreement and the expiration of any required
waiting period without the commencement of adverse proceedings by any
governmental authority with jurisdiction over the transactions
contemplated by this Agreement;
(b) each representation and warranty of Seller in this
Agreement being true and correct in all material respects as of the
Closing Date and all covenants and conditions of Seller to be performed
or met by Seller on or before the Closing Date having been performed or
met in all material respects;
(c) Seller's delivery to Buyer of the following documents in
form and substance reasonably satisfactory to Buyer:
(i) special warranty deeds conveying the Real
Property;
(ii) bills of sale, assignments and other instruments
of transfer sufficient to convey to Buyer all of Seller's
right, title, and interest in and to the remaining Assets;
(iii) a certificate executed by an appropriate
officer of Seller attesting, to the officer's best knowledge,
to Seller's compliance with the conditions set forth in
Section 9.3(b); and
(iv) estoppel certificates executed by the lessors of
the Leased Branches; and
(d) Buyer's agreement to receive the Closing Statement and the
Settlement Payment as provided in Section 3.2.
9.4 Seller's Conditions to Closing.
Seller's obligation to sell the Assets and transfer the
Liabilities to Buyer is contingent upon and subject to the fulfillment of the
following conditions in all material respects:
(a) the parties obtaining all regulatory approvals which are
required in order for them to proceed with the transactions
contemplated by this Agreement and the expiration of any required
waiting period without the commencement of adverse proceedings by any
governmental authority with jurisdiction over the transactions
contemplated by this Agreement;
(b) each representation and warranty of Buyer in this
Agreement being true and correct in all material respects as of the
Closing Date and all covenants and conditions of Buyer to be performed
or met by Buyer on or before the Closing Date having been performed or
met in all material respects;
(c) Buyer's delivery to Seller of the following documents in
form and substance reasonably satisfactory to Seller:
(i) one or more executed assumptions of the Real
Property Leases;
(ii) one or more executed instruments assuming the
remaining Liabilities; and
(iii) a certificate executed by an appropriate
officer of Buyer attesting, to the officer's best knowledge,
to Buyer's compliance with the conditions set forth in Section
9.4(b).
9.5 Survival of Representations and Warranties.
Unless provided otherwise in this Agreement, Buyer's and
Seller's representations and warranties under this Agreement or contained in any
certificate or instrument delivered by either party at the Closing shall survive
for a period of one year following the Closing Date.
X. TERMINATION
10.1 Termination by Either Party.
Either party may terminate this Agreement upon written notice
to the other if:
(a) as a result of any breach of any representation, warranty
or covenant, the party terminating this Agreement has given the other
party written notice of such breach and such breach is not cured within
30 days thereafter;
(b) the Closing does not occur within two hundred seventy
(270) days after the date of this Agreement; or
(c) the other party so agrees in writing.
The termination of this Agreement under subsection (a) shall
not absolve the breaching party from any liability to the other party arising
out of its breach of this Agreement.
XI. MISCELLANEOUS
11.1 Continuing Cooperation.
(a) On and after the Closing Date, Seller agrees to execute,
acknowledge and deliver such documents and instruments as Buyer may
reasonably request to vest in Buyer the full legal and equitable title
to the Assets and Liabilities.
(b) On and after the Closing Date, Buyer shall execute,
acknowledge and deliver such documents and instruments as Seller may
reasonably request to relieve and discharge Seller from its obligations
with respect to the Liabilities.
(c) Seller and Buyer shall cooperate with each other in
connection with any examination conducted by any tax authority
subsequent to the Closing Date by promptly providing upon request
information relating to the tax liability of any business operated by
Seller or Buyer with respect to the Branches and promptly informing the
other of the institution of, any material developments concerning, and
the outcome of, the same.
(d) Except as provided in Section 7.2, no interest in or right
to use First Union National Bank's logo or the name "First Union" or
any other similar word, name, symbol or device in which Seller has any
interest by itself or in combination with any other word, name, symbol
or device, or any similar variation of any of the foregoing
(collectively, the "Retained Names and Marks") is being transferred to
Buyer pursuant to the transactions contemplated hereby. Unless
permitted pursuant to Section 7.2, Buyer shall not after the Closing
Date in any way knowingly use any materials or property, whether or not
in existence on the Closing Date, that bear any Retained Name or Xxxx.
Buyer agrees that Seller shall have no responsibility for claims by
third parties arising out of, or relating to, the use by the Buyer of
any Retained Name or Xxxx after the Closing Date, and Buyer agrees to
indemnify and hold harmless Seller from any and all claims (and all
expenses, including reasonable attorneys' fees and disbursements
incurred in connection with any such claim) that may arise out of the
use thereof by Buyer.
11.2 Merger and Amendment.
This Agreement sets out the complete agreement of the parties
with respect to the matters discussed in this Agreement, and it supersedes all
prior agreements between the parties, whether written or oral, which apply to
these matters. No provision of this Agreement may be changed or waived except as
expressly stated in a document executed by both parties.
11.3 Dispute Resolution.
(a) Neither Seller nor Buyer shall assert any claim arising
out of or relating to this Agreement (except with respect to claims to
be handled under the Working Agreement or submitted to the Mediator
under Section 3.2(c)), unless:
(i) except for claims arising under or in respect of
Sections 2.4, 2.5 or 11.1(d), the amount in dispute with
respect to any claim exceeds $5,000.00;
(ii) except for claims arising in respect of Sections
2.4, 2.5 or 11.1(d), the aggregate amount of all claims by
Buyer or Seller (as the case may be) which satisfy the
preceding clause exceeds $50,000.00, in which case a claim may
be asserted only to the extent that such threshold has been
exceeded;
(iii) except for claims arising under Sections 2.4,
2.5, or 11.1(d), the aggregate amount of all claims by Buyer
or Seller (as the case may be) shall not exceed the Amount of
Premium; and
(iv) except for claims arising under Sections 2.4,
2.5 or 11.1(d), the notification required by Section 11.3(b)
(if any) is given on or before the first anniversary of the
Closing Date.
(b) The parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by
negotiations, as provided in this subsection (b). Either party may give
the other party written notice of any dispute not resolved in the
normal course of business. Executives of both parties at comparable
levels at least one step above the personnel who have previously been
involved in the dispute shall meet at a mutually acceptable time and
place within ten days after delivery of such notice, and thereafter as
often as they reasonably deem necessary, to exchange relevant
information and to attempt to resolve the dispute. If the matter has
not been resolved by these persons within 30 days of the disputing
party's notice, or if the parties fail to meet within ten days, the
dispute shall be referred to more senior executives of both parties who
have authority to settle the dispute and who shall likewise meet to
attempt to resolve the dispute. All negotiations under this subsection
(b) are confidential and shall be treated as compromise and settlement
negotiations for purposes of the Federal Rules of Evidence, applicable
state rules of evidence, and common law. The procedures set forth above
will be followed in advance of litigation of any dispute between the
parties; nevertheless, either party may seek a preliminary injunction
or other provisional judicial relief if in its judgment such an action
is necessary to avoid irreparable damage or to preserve the status quo.
Despite any such action, the parties will continue to participate in
good faith in the procedures set forth in this subsection (b).
(c) Neither party shall have any liability for lost profits or
punitive damages with respect to any claim arising out of or relating
to this Agreement. The sole recourse and remedy of a party hereto for
breach of this Agreement by the other party hereto shall be against
such other party and its assets, and no officer, director, employee,
stockholder or affiliate of any party shall be liable at law or in
equity for the breach by such party of any of its obligations under
this Agreement.
11.4 Indemnification.
After the Closing Date, and unless otherwise provided in the
Agreement:
(a) Buyer shall indemnify and hold Seller harmless from and
against all claims, lawsuits, costs (including reasonable counsel fees)
and liabilities which arise out of or relate to transactions or
operations at the Branches after the Closing Date, and from any loss or
damage resulting from any breach by Buyer of any representation,
warranty or covenant of Buyer contained in this Agreement. If any claim
or lawsuit is made or commenced as to which Seller proposes to demand
such indemnification, it shall notify Buyer with reasonable promptness;
provided, however, that any failure by Seller to notify Buyer shall not
relieve Buyer from its obligations hereunder, except to the extent that
Buyer is actually prejudiced by such failure to give notice. Buyer
shall have the option of defending such claim or lawsuit with counsel
of its own choosing at its own cost and expense and such counsel shall,
to the extent consistent with its professional responsibilities,
cooperate with Seller and any counsel designated by Seller. Buyer shall
be liable for any settlement of any claim or lawsuit against Seller
made with Buyer's written consent, which consent shall not be
unreasonably withheld.
(b) Seller shall indemnify and hold Buyer harmless from and
against all claims, lawsuits, costs (including reasonable counsel fees)
and liabilities which arise out of or relate to transactions or
operations at the Branches on or before the Closing Date, and from any
loss or damage resulting from any breach by Seller of any
representation, warranty or covenant of Seller contained in this
Agreement. If any claim or lawsuit is made or commenced as to which
Buyer proposes to demand such indemnification, it shall notify Seller
with reasonable promptness; provided, however, that any failure by
Buyer to notify Seller shall not relieve Seller from its obligations
hereunder, except to the extent the Seller is actually prejudiced by
such failure to give notice. Seller shall have the option of defending
such claim or lawsuit with counsel of its own choosing at its own cost
and expense and such counsel shall, to the extent consistent with its
professional responsibilities, cooperate with Buyer and any counsel
designated by Buyer. Seller shall be liable for any settlement of any
claim or lawsuit against Buyer made with Seller's written consent,
which consent shall not be unreasonably withheld.
(c) Any claims for indemnification brought under this Section
shall be subject to the provisions of Section 11.3.
11.5 Counterparts.
This Agreement may be executed in any number of counterparts,
each of which will constitute an original, but all of which taken together shall
constitute one and the same instrument.
11.6 Exhibits and Schedules.
All exhibits and schedules referred to in this Agreement shall
constitute a part of this Agreement.
11.7 Assignment.
This Agreement is not assignable by either party without the
written consent of the other party, which consent shall not be unreasonably
withheld, except that Buyer may assign this Agreement, in whole or in part, to
its subsidiary banks, provided, that any such assignment by Buyer will not
relieve it of its liabilities or obligations hereunder, and provided, further,
that it is understood and agreed that (i) there shall be a single Closing as set
forth in Section 9.1 of the Agreement, (ii) a single data processing conversion,
and (iii) a single settlement of items between Buyer and Seller on the Closing
Date.
11.8 Headings.
The headings contained in this Agreement are inserted for
convenience only and shall not affect the meaning of this Agreement or any of
its provisions.
11.9 Notices.
Any notice under this Agreement shall be made in writing and
shall be deemed given when delivered in person, when delivered by first class
mail postage prepaid (in which case the notice shall be deemed given on the
third Business Day following the date on which the notice is postmarked), or
when delivered by facsimile transmission, which transmission also shall be sent
by first class mail, postage prepaid before the second Business Day following
the transmission (in which case the notice shall be deemed given on the day
transmitted if transmitted before or during normal business hours or, otherwise,
on the next succeeding Business Day) to the parties at the respective addresses
set forth below or at such other addresses as each party shall inform the other
in writing.
If to Seller to: Xxxxxxxx Xxxxx
Senior Vice President
First Union National Bank
000 Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
with a copy to: Xxxxx X. Xxxxx, Esq.
Senior Vice President
and Deputy General Counsel
First Union Corporation
One First Union Center, Xxx-0000,
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
If to Buyer to: Xxxxxxxxx Xxxxxxxxx
Senior Vice President & Controller
HUBCO, Inc.
0000 XxxXxxxxx Xxxx.
Xxxxxx, Xxx Xxxxxx 00000
with a copy to: X. Xxxx Van Borkulo-Xxxxx, Esq,
Executive Vice President & General Counsel
HUBCO, Inc.
0000 XxxXxxxxx Xxxx.
Xxxxxx, Xxx Xxxxxx 00000
11.10 Expenses.
Unless specifically stated to the contrary in this Agreement,
each party will assume and pay for the expenses it incurs with respect to the
purchase and sale of the Assets and assumption of the Liabilities under this
Agreement; provided, however, that Buyer shall pay all fees and expenses
associated with the regulatory application process. Each party shall be
responsible for any fee payable to any agent, broker or finder acting on its
behalf in this transaction.
11.11 Public Announcements.
Each party shall consult with the other before making any
announcement or other public communication with respect to the transactions
contemplated by this Agreement and shall furnish a copy of the text to the other
party of the announcement or other communication.
11.12 Governing Law; Jurisdiction.
This Agreement and the legal relations between the parties
shall be governed by and construed in accordance with the laws of the State of
New Jersey applicable to contracts made and to be performed entirely within the
State of New Jersey.
11.13 No Third Party Beneficiaries.
The parties intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any Person other than
Seller and Buyer.
IN WITNESS WHEREOF, each of the parties to this Agreement has caused
this Agreement to be executed by a duly authorized officer as of the date
written on page one of this Agreement.
HUBCO, INC.
By:/s/ X. Xxxx Van Borkulo-Xxxxx
--------------------------------
Its:Executive Vice President
FIRST UNION NATIONAL BANK
By:/s/ Xxxxxxxx Xxxxx
--------------------------------
Its:Senior Vice President
