AGREEMENT AND PLAN OF MERGER
AMONG
UNITED NATIONAL BANCORP
AND
UNITED NATIONAL BANK
AND
▇▇▇▇▇▇▇▇▇▇ BANK
Dated: November 12, 1996
1 Articles of Association of United National Bank as they will exist on the
Effective Date. The Articles may be amended prior to the Effective Date.
TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER...............................................................1
1.1. The Merger.......................................................1
1.2. Effect of the Merger.............................................1
1.3. Articles of Association..........................................2
1.4. Bylaws...........................................................2
1.5. Directors and Officers...........................................2
1.6. Effective Time and Closing.......................................2
1.7. Capital Stock....................................................2
ARTICLE II
CONVERSION OF ▇▇▇▇▇▇▇▇▇▇ SHARES..........................................3
2.1. Conversion of ▇▇▇▇▇▇▇▇▇▇ Common Stock............................3
(a) Exchange Ratio...........................................3
(b) Fractional Shares; Average Closing Price.................3
(c) Capital Changes..........................................3
(d) Cancellation of ▇▇▇▇▇▇▇▇▇▇ Certificates..................3
(e) ▇▇▇▇▇▇▇▇▇▇ Stock Options.................................4
2.2. Exchange of Shares...............................................4
2.3. Dissenting Shares................................................6
2.4 UNB Common Stock.................................................6
2.5 Certain ▇▇▇▇▇▇▇▇▇▇ Shares Retired................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇▇▇▇.............................6
3.1. Organization.....................................................7
3.2. Capitalization...................................................7
3.3. Authority; No Violation..........................................8
3.4. Financial Statements.............................................9
3.5. Financial Advisor; 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...........................................10
3.9. Employee Benefit Plans..........................................11
3.10. Reports.........................................................12
3.11. ▇▇▇▇▇▇▇▇▇▇ Information..........................................12
3.12. Compliance with Applicable Law..................................13
(a) General.................................................13
(b) CRA 13
3.13. Certain Contracts..............................................13
3.14. Properties and Insurance.......................................14
3.15. Minute Books...................................................14
3.16. Environmental Matters..........................................14
3.17. Reserves.......................................................15
3.18. Disclosure.....................................................15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF UNB AND UNITED.......................................................15
4.1. Corporate Organization..........................................15
4.2. Capitalization..................................................16
4.3. Authority; No Violation.........................................17
4.4. Financial Statements............................................18
4.5. Brokerage and Other Fees........................................18
4.6. Absence of Certain Changes or Events............................19
4.7. United Information..............................................19
4.8. Capital Adequacy................................................19
4.9. United Common Stock.............................................19
4.10. Legal Proceedings...............................................19
4.11. Taxes and Tax Returns...........................................20
4.12. Employee Benefit Plans..........................................20
4.13. Reports.........................................................20
4.14. Compliance with Applicable Law..................................20
4.15. Properties and Insurance........................................21
4.16. Minute Books....................................................21
4.17. Environmental Matters...........................................21
4.18. Reserves........................................................22
4.19. Disclosures.....................................................22
ARTICLE V
COVENANTS OF THE PARTIES................................................22
5.1. Conduct of the Business of ▇▇▇▇▇▇▇▇▇▇...........................22
5.2. Negative Covenants and Dividend Covenants.......................22
5.3. No Solicitation.................................................23
5.4. Current Information.............................................24
5.5. Access to Properties and Records; Confidentiality...............24
5.6. Regulatory Matters..............................................26
5.7. Approval of Stockholders........................................27
5.8. Further Assurances..............................................28
5.9. Public Announcements............................................28
5.10. Failure to Fulfill Conditions..................................28
5.11. Disclosure Supplements.........................................28
5.12. Indemnification................................................29
5.13. Pooling and Tax-Free Reorganization Treatment..................29
5.14. Affiliates.....................................................30
5.15. Compliance with the Industrial Site Recovery Act...............30
5.16 ▇▇▇▇▇▇▇▇▇▇ Options.............................................30
5.17 Employment Agreement...........................................30
ARTICLE VI
CLOSING CONDITIONS......................................................31
6.1. Conditions of Each Party's Obligations Under this
Agreement......................................................31
(a) Approval of Stockholders; SEC Registration.............31
(b) Regulatory Filings.....................................31
(c) Suits and Proceedings..................................31
(d) Tax Free Exchange......................................31
(e) Form S-8 For Stock Options.............................32
6.2. Conditions to the Obligations of United Under this
Agreement......................................................32
(a) Representations and Warranties; Performance
of Obligations of ▇▇▇▇▇▇▇▇▇▇...........................32
(b) Consents...............................................32
(c) Opinion of Counsel.....................................32
(d) Pooling of Interests...................................32
(e) Certificates...........................................32
6.3. Conditions to the Obligations of ▇▇▇▇▇▇▇▇▇▇ Under this
Agreement..............................................33
(a) Representations and Warranties; Performance of
Obligations of United..................................33
(b) Opinion of Counsel to United...........................33
(c) Fairness Opinion.......................................33
(d) Certificates...........................................33
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER.......................................33
7.1. Termination.....................................................33
7.2. Effect of Termination...........................................35
7.3. Amendment.......................................................35
7.4. Extension; Waiver...............................................35
ARTICLE VIII
MISCELLANEOUS...........................................................35
8.1. Expenses........................................................35
8.2. Notices.........................................................35
8.3. Parties in Interest.............................................36
8.4. Entire Agreement................................................37
8.5. Counterparts....................................................37
8.6. Governing Law...................................................37
8.7. Descriptive Headings............................................37
EXHIBITS
Certificate of ▇▇▇▇▇▇▇▇▇▇ Directors
Schedule 5.14 - Form of ▇▇▇▇▇▇▇▇▇▇ Affiliate Letter
Schedule 6.2 - Form of Opinion of Counsel to ▇▇▇▇▇▇▇▇▇▇
Schedule 6.3 - Form of Opinion of Counsel to United
Schedule 1.3 - Articles of Association of United National Bank
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of November 12,
1996 ("Agreement"), is among United National Bancorp, a corporation chartered
under the laws of the State of New Jersey ("United"), United National Bank, a
national banking association and subsidiary of United ("UNB"), and ▇▇▇▇▇▇▇▇▇▇
Bank, a commercial bank chartered under the laws of the State of New Jersey
("▇▇▇▇▇▇▇▇▇▇").
WHEREAS, United and UNB desire to acquire ▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇▇'▇ Board of Directors has determined, based upon the terms and
conditions hereinafter set forth, that the acquisition is in the best interests
of ▇▇▇▇▇▇▇▇▇▇ and its stockholders, each of the Board of Directors of
▇▇▇▇▇▇▇▇▇▇, United and UNB have duly adopted and approved this Agreement and the
Board of Directors of ▇▇▇▇▇▇▇▇▇▇ has directed that immediately after the Due
Diligence Period (as hereafter defined), it be submitted to its shareholders for
approval; and
WHEREAS, the acquisition will be accomplished by merging
▇▇▇▇▇▇▇▇▇▇ into UNB with UNB as the surviving bank, and ▇▇▇▇▇▇▇▇▇▇ shareholders
receiving the consideration hereinafter set forth; and
WHEREAS, simultaneously with the execution of this Agreement,
▇▇▇▇▇▇▇▇▇▇ is issuing an option to United to purchase 133,000 shares of the
authorized and unissued ▇▇▇▇▇▇▇▇▇▇ Common Stock (as hereafter defined) at an
option price of $14.00 per share, subject to the terms and conditions set forth
in the Stock Option Agreement (the "United Stock Option").
NOW, THEREFORE, in consideration of the forgoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound, the parties hereto 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 defined in Section 1.6), ▇▇▇▇▇▇▇▇▇▇ shall
be merged with and into UNB under the charter of UNB (the "Merger") in
accordance with the National Bank Act and the New Jersey Banking Act of 1948, as
amended, and UNB shall be the surviving bank (the "Surviving Bank").
1.2. Effect of the Merger. At the Effective Time, the
Surviving Bank shall be considered the same business and corporate entity as
each of ▇▇▇▇▇▇▇▇▇▇ and UNB and thereupon and thereafter, all the property,
rights, powers and franchises of each of ▇▇▇▇▇▇▇▇▇▇ and UNB shall vest in the
Surviving Bank and the Surviving Bank shall be subject to and be deemed to have
assumed all of the debts, liabilities, obligations and duties of each of
▇▇▇▇▇▇▇▇▇▇ and UNB and shall have succeeded to all of each of their
relationships, fiduciary or otherwise, as fully and to the same extent as if
such property rights, privileges, powers, franchises, debts, obligations, duties
and relationships had been originally acquired, incurred or entered into by the
Surviving Bank.
1.3. Articles of Association. The Articles of Association of
UNB as they exist immediately prior to the Effective Time shall continue as the
Articles of Association of the Surviving Bank, as set forth in Schedule 1.3,
until otherwise amended as provided by law; provided however, that UNB shall
have the right, between the date hereof and the Closing, to amend its Articles
of Association and upon the acceptance of such amendment by the OCC (as
hereafter defined), the Articles of Association as so amended shall be
substituted for Schedule 1.3.
1.4. Bylaws. The Bylaws of UNB as they exist immediately prior
to the Effective Time shall continue as the Bylaws of the Surviving Bank until
otherwise amended as provided by law.
1.5. Directors and Officers. The directors and officers of UNB
as of the Effective Time shall continue as the directors and officers of the
Surviving Bank.
1.6. Effective Time and Closing. The Merger shall become
effective (and be consummated) upon the date specified in a notice to the
Comptroller of the Currency (the "OCC") filed by UNB with the approval of
▇▇▇▇▇▇▇▇▇▇, which approval shall not be unreasonably withheld or delayed. The
date and time specified in such notice shall be the "Effective Time". A closing
(the "Closing") shall take place prior to the Effective Time at 10:00 a.m., on a
day mutually agreed to by United and ▇▇▇▇▇▇▇▇▇▇ within thirty (30) days
following the receipt of all necessary regulatory and governmental approvals and
consents and the expiration of all statutory waiting periods in respect thereof
and the satisfaction or waiver of the conditions to the consummation of the
Merger specified in Article VI hereof (other than the delivery of certificates,
opinions and other instruments and documents to be delivered at the Closing), at
the office of Pitney, ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, Florham Park, New Jersey, or at such
other place, time or date as UNB and ▇▇▇▇▇▇▇▇▇▇ may mutually agree upon. The
notice from UNB to the OCC shall specify as the Effective Time the close of
business on the date of the Closing as agreed to by UNB and ▇▇▇▇▇▇▇▇▇▇.
1.7. Capital Stock. As of September 30, 1996, UNB had capital
of $79,221,000, divided into 512,778 shares of common stock, each of $2.50 par
value, $39,149,000 of surplus, and undivided profits of $34,908,000. As of
September 30, 1996, ▇▇▇▇▇▇▇▇▇▇ had capital of $8,979,839, divided into 665,392
shares of common stock, each of $5.00 par value, $3,284,592 of surplus, and
$2,368,287 of undivided profits. At the Effective Time, the amount of capital
stock of UNB shall be $88,200,839, divided into 1,843,562 shares of common
stock, each of $2.50 par value, and UNB shall have a surplus of $42,433,592 and
undivided profits, including capital reserves, which when combined with the
capital and surplus will be equal to the combined capital structures of UNB and
▇▇▇▇▇▇▇▇▇▇ as stated in the preceding two sentences, adjusted however, for
earnings and expenses and dividends declared and paid by ▇▇▇▇▇▇▇▇▇▇ between
September 30, 1996 and the Effective Time.
ARTICLE II
CONVERSION OF ▇▇▇▇▇▇▇▇▇▇ SHARES
2.1. Conversion of ▇▇▇▇▇▇▇▇▇▇ Common Stock. Each share of
common stock, par value $5.00 per share, of ▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇ Common
Stock"), issued and outstanding immediately prior to the Effective Time (other
than shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock retired pursuant to Section 2.5 and
Dissenting Shares as defined in Section 2.3) shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted as follows:
(a) Exchange Ratio. Subject to the provisions of this Section
2.1, each share of ▇▇▇▇▇▇▇▇▇▇ Common Stock issued and outstanding immediately
prior to the Effective Time (excluding shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock retired
pursuant to Section 2.5 and Dissenting Shares) shall be converted at the
Effective Time into the right to receive .7647 shares (the "Exchange Ratio") of
common stock, $2.50 par value, of United ("United Common Stock").
(b) Fractional Shares; Average Closing Price. No fractional
shares of United Common Stock shall be issued, and, in lieu thereof, a cash
payment shall be made based on the Average Closing Price. The Average Closing
Price of United Common Stock shall mean the Average Price (as hereinafter
defined) calculated based upon the Closing Price (as hereinafter defined) of
United Common Stock during the first 20 of the 25 consecutive trading days
immediately preceding the date of the Closing. The Closing Price shall mean the
closing price of United Common Stock as supplied by the National Association of
Securities Dealers Automated Quotation National Market System ("NASDAQ/NMS") and
published in The Wall Street Journal during the first 20 of the 25 consecutive
trading days immediately preceding the date of the Closing. The Average Price
shall be determined by taking the average of Closing Prices in the 20 day
period. A trading day shall mean a day for which a Closing Price is so supplied
and published.
(c) Capital Changes. If between the date of this Agreement and
the Effective Time the outstanding shares of United Common Stock shall have been
changed into a different number of shares or a different class, by reason of any
stock dividend, stock split, reclassification, recapitalization, combination or
exchange of shares, the Exchange Ratio shall be correspondingly adjusted to
reflect such stock dividend, stock split, reclassification, recapitalization,
combination or exchange of shares; provided, however, that no adjustment shall
be made for the 6% stock dividend declared by United on September 18, 1996 to
holders of record October 15, 1996 (the "September Stock Dividend").
(d) Cancellation of ▇▇▇▇▇▇▇▇▇▇ Certificates. After the
Effective Time, each such share of ▇▇▇▇▇▇▇▇▇▇ Common Stock shall no longer be
outstanding and shall automatically be cancelled, and each of the certificates
(the "Certificates") previously evidencing any such shares of ▇▇▇▇▇▇▇▇▇▇ Common
Stock outstanding immediately prior to the Effective Time (other than shares of
▇▇▇▇▇▇▇▇▇▇ Common Stock retired pursuant to Section 2.5 and Dissenting Shares)
shall thereafter represent the right to receive the consideration pursuant to
Section 2.1(a) and 2.1(b) hereof. The holders of the Certificates shall cease to
have any rights with respect to such shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock except as
otherwise provided herein or by law. The Certificates shall be exchanged for
certificates evidencing shares of United Common Stock issued pursuant to this
Article II, upon the surrender of such Certificates in accordance with this
Article II.
(e) ▇▇▇▇▇▇▇▇▇▇ Stock Options. At the Effective Time, each
outstanding option to purchase ▇▇▇▇▇▇▇▇▇▇ Common Stock (a "▇▇▇▇▇▇▇▇▇▇ Option")
granted under the stock option plans for directors or the plans for officers and
employees of ▇▇▇▇▇▇▇▇▇▇ (both the "▇▇▇▇▇▇▇▇▇▇ Option Plans") shall be converted
as follows, at the election of the holder of such ▇▇▇▇▇▇▇▇▇▇ Option (an
"optionee"); provided, however, that optionees who have received ▇▇▇▇▇▇▇▇▇▇
Options under the ▇▇▇▇▇▇▇▇▇▇ Option Plan for non-employee directors must receive
the consideration under paragraph (ii) below and may not receive the
consideration under paragraph (i) below:
(i) into an option to purchase United Common Stock,
wherein (x) the right to purchase shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock
pursuant to the ▇▇▇▇▇▇▇▇▇▇ Option shall be converted into the right to
purchase that same number of shares of United Common Stock multiplied
by the Exchange Ratio (as adjusted), (y) the option exercise price per
share of United Common Stock shall be the previous option exercise
price per share of the ▇▇▇▇▇▇▇▇▇▇ Common Stock divided by the Exchange
Ratio (as adjusted) and (z) in all other material respects the option
shall be subject to the same terms and conditions as governed the
▇▇▇▇▇▇▇▇▇▇ Option on which it was based, including the length of time
within which the option may be exercised; or
(ii) if the ▇▇▇▇▇▇▇▇▇▇ Option is fully vested at the
Closing, into the right to receive immediately after the Effective Time
a number of whole shares of United Common Stock which is the quotient
obtained by dividing:
(A) the excess of (x) the product obtained by
multiplying (i) the number of shares of ▇▇▇▇▇▇▇▇▇▇ Common
Stock covered by the ▇▇▇▇▇▇▇▇▇▇ Option, times (ii) the
Exchange Ratio (as adjusted), times (iii) the Average Closing
Price, less (y) the aggregate exercise price for the
▇▇▇▇▇▇▇▇▇▇ Option; by
(B) the Average Closing Price.
No fractional shares of United Common Stock shall be issued pursuant to
this Section 2.1(e)(ii), and in lieu thereof, each optionee who would
otherwise be entitled to a fractional interest will receive an amount
in cash determined by multiplying such fractional interest by the
Average Closing Price.
2.2. Exchange of Shares.
(a) ▇▇▇▇▇▇▇▇▇▇ and United hereby appoint United National Bank,
Trust Department or such other bank as United shall designate (the "Exchange
Agent") as the Exchange Agent for purposes of effecting the conversion of
▇▇▇▇▇▇▇▇▇▇ Common Stock and ▇▇▇▇▇▇▇▇▇▇ Options. All fees and expenses of the
Exchange Agent shall be paid by United. As soon as practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record (a
"Record Holder") of a Certificate or Certificates, a mutually agreed upon letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent), and instructions for use in effecting the
surrender of the Certificates in exchange for United Common Stock (and cash in
lieu of fractional shares). Upon surrender of a Certificate for exchange and
cancellation to the Exchange Agent, together with such letter of transmittal,
duly executed, the Record Holder shall be entitled to promptly receive in
exchange for such Certificate the consideration as provided in Section 2.1
hereof and the Certificates so surrendered shall be cancelled. The Exchange
Agent shall not be obligated to deliver or cause to be delivered to any Record
Holder the consideration to which such Record Holder would otherwise be entitled
until such Record Holder surrenders the Certificate for exchange or, in default
thereof, an appropriate Affidavit of Loss and Indemnity Agreement and/or a bond
as may be reasonably required in each case by United. Notwithstanding the time
of surrender of the Certificates, Record Holders (other than holders of
Dissenting Shares) shall be deemed shareholders of United for all purposes from
the Effective Time, except that United shall withhold the payment of dividends
from any Record Holder until such Record Holder effects the exchange of
Certificates for United Common Stock. (Such Record Holder shall receive such
withheld dividends, without interest, upon effecting the share exchange.) With
respect to each outstanding ▇▇▇▇▇▇▇▇▇▇ Option, the Exchange Agent shall, 30 days
prior to Closing, distribute option election forms to each optionee and, upon
receipt from the optionee of a properly completed option election, shall, after
the Effective Time, distribute to the optionee United Common Stock or an
amendment to the option grant evidencing the conversion of the grant to an
option to purchase United Common Stock in accordance with Section 2.1 hereof.
(b) After the Effective Time, there shall be no transfers on
the stock transfer books of ▇▇▇▇▇▇▇▇▇▇ of the shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock
which were outstanding immediately prior to the Effective Time and, if any
Certificates representing such shares are presented for transfer, they shall be
cancelled and exchanged for the consideration pursuant to Section 2.1 hereof.
(c) If payment of the consideration pursuant to Section 2.1
hereof is to be made in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it shall be a condition of such
payment that the Certificate so surrendered shall be properly endorsed (or
accompanied by an appropriate instrument of transfer) and otherwise in proper
form for transfer, and that the person requesting such payment shall pay to the
Exchange Agent in advance any transfer or other taxes required by reason of the
payment to a person other than that of the registered holder of the Certificate
surrendered, or required for any other reason, or shall establish to the
reasonable satisfaction of the Exchange Agent that such tax has been paid or is
not payable.
(d) No certificates or scrip evidencing fractional shares of
United Common Stock shall be issued upon the surrender for exchange of
Certificates and such fractional share interests will not entitle the owner
thereof to vote or to any rights of a stockholder of United. Cash shall be paid
in lieu of fractional shares of United Common Stock, based upon the Average
Closing Price of United Common Stock.
2.3. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, any holder of ▇▇▇▇▇▇▇▇▇▇ Common Stock shall have the
right to dissent in the manner provided in the National Bank Act, 12 U.S.C.
Section 215a, and if all necessary requirements of the National Bank Act are
met, such shares shall be entitled to payment in cash from UNB of the fair value
of such shares as determined in accordance with the National Bank Act. All
shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock as to which the holder properly exercises
dissenters' rights in accordance with the National Bank Act shall constitute
"Dissenting Shares" unless and until such rights are waived by the party
initially seeking to exercise such rights.
2.4 UNB Common Stock. The shares of common stock of UNB
outstanding immediately prior to the Effective Time shall not be affected by the
Merger but shall be the same number of shares of the Surviving Bank.
2.5 Certain ▇▇▇▇▇▇▇▇▇▇ Shares Retired. Each share of
▇▇▇▇▇▇▇▇▇▇ Common Stock that is either (a) owned by United or any direct or
indirect wholly-owned subsidiary of United (other than shares held in trust
accounts, managed accounts or in any similar manner as trustee or in a fiduciary
capacity and shares held as collateral or in lieu of a debt previously
contracted) or (b) held in the treasury of ▇▇▇▇▇▇▇▇▇▇ shall be cancelled and
retired and no capital stock of United, cash or other consideration shall be
paid or delivered in exchange therefor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇▇▇▇
References herein to "▇▇▇▇▇▇▇▇▇▇ 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 or
will be delivered within 15 days of the date hereof pursuant to Section 5.11(a),
by ▇▇▇▇▇▇▇▇▇▇ to United and UNB. ▇▇▇▇▇▇▇▇▇▇ hereby represents and warrants to
United and UNB as follows:
3.1. Organization.
(a) ▇▇▇▇▇▇▇▇▇▇ is a New Jersey banking corporation whose
deposits are insured by the Bank Insurance Fund of the Federal Deposit Insurance
Corporation ("FDIC") to the fullest extent permitted by law. ▇▇▇▇▇▇▇▇▇▇ is duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. ▇▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇▇.
(b) The only subsidiary of ▇▇▇▇▇▇▇▇▇▇ is listed in the
▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule. The term "Subsidiary", when used in this
Agreement with respect to ▇▇▇▇▇▇▇▇▇▇, means any corporation, joint venture,
association, partnership, trust or other entity in which ▇▇▇▇▇▇▇▇▇▇ has,
directly or indirectly, at least a 50 percent interest or acts as a general
partner. The ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule sets forth true and complete copies
of the Certificate of Incorporation and Bylaws of ▇▇▇▇▇▇▇▇▇▇ as in effect on the
date hereof. Except as set forth in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule,
▇▇▇▇▇▇▇▇▇▇ does not own or control, directly or indirectly, any equity interest
in any corporation, company, association, partnership, joint venture or other
entity and owns no real estate, except real estate used for its banking
premises.
(c) Each Subsidiary of ▇▇▇▇▇▇▇▇▇▇ is duly organized and
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. Each Subsidiary of ▇▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇▇ or any of its Subsidiaries. The ▇▇▇▇▇▇▇▇▇▇
Disclosure Schedule sets forth true and complete copies of the Articles of
Association and Bylaws of the Subsidiary as in effect on the date hereof.
3.2. Capitalization. The authorized capital stock of
▇▇▇▇▇▇▇▇▇▇ consists of 2,000,000 shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock. As of
October 31, 1996, there were 665,392 shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock issued
and outstanding and no shares issued and held in the treasury. As of October 31,
1996, there were 60,051 shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock issuable upon exercise
of outstanding options granted pursuant to the ▇▇▇▇▇▇▇▇▇▇ Stock Option Plans.
All issued and outstanding shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock, and all issued and
outstanding shares of capital stock of ▇▇▇▇▇▇▇▇▇▇'▇ Subsidiary, have been duly
authorized and validly issued, are fully paid and nonassessable. The authorized
but unissued shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock are not subject to pre-emptive
rights. All of the outstanding shares of capital stock of ▇▇▇▇▇▇▇▇▇▇'▇
Subsidiary are owned by ▇▇▇▇▇▇▇▇▇▇ free and clear of any liens, encumbrances,
charges, restrictions or rights of third parties. Except for the United Stock
Option and options granted under the ▇▇▇▇▇▇▇▇▇▇ Option Plans, neither ▇▇▇▇▇▇▇▇▇▇
nor the ▇▇▇▇▇▇▇▇▇▇ Subsidiary has nor 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 ▇▇▇▇▇▇▇▇▇▇
or the ▇▇▇▇▇▇▇▇▇▇ Subsidiary or any securities representing the right to
purchase or otherwise receive any shares of such capital stock or any securities
convertible into or representing the right to subscribe for 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 the stockholders of ▇▇▇▇▇▇▇▇▇▇, and subject
to the parties obtaining all necessary regulatory approvals, ▇▇▇▇▇▇▇▇▇▇ has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby in accordance with the terms
hereof. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Board of Directors of ▇▇▇▇▇▇▇▇▇▇. Except for the approvals described in
paragraph (b) below, no other corporate proceedings on the part of ▇▇▇▇▇▇▇▇▇▇
are necessary to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by ▇▇▇▇▇▇▇▇▇▇ and constitutes
the valid and binding obligation of ▇▇▇▇▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇▇▇▇▇
in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by
▇▇▇▇▇▇▇▇▇▇, nor the consummation by ▇▇▇▇▇▇▇▇▇▇ of the transactions contemplated
hereby in accordance with the terms hereof, or compliance by ▇▇▇▇▇▇▇▇▇▇ with any
of the terms or provisions hereof, will (i) violate any provision of
▇▇▇▇▇▇▇▇▇▇'▇ Certificate of Incorporation or other governing instrument or
Bylaws, (ii) assuming that the consents and approvals set forth below are duly
obtained, violate any statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction applicable to ▇▇▇▇▇▇▇▇▇▇ or any of its
properties or assets, or (iii) except as set forth in the ▇▇▇▇▇▇▇▇▇▇ 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 properties or assets of
▇▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇▇ is a party, or by which it or any
of its properties or assets may be bound or affected except, with respect to
(ii) and (iii) above, such as individually and in the aggregate will not have a
material adverse effect on the business, operations, assets or financial
condition of ▇▇▇▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇▇▇▇ Subsidiary on a consolidated basis,
or the ability of ▇▇▇▇▇▇▇▇▇▇ to consummate the transactions contemplated hereby.
Except for consents and approvals of or filings or registrations with or notices
to the third parties listed in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, the OCC, the
Commissioner of Banking of the State of New Jersey (the "Commissioner"), the
Securities and Exchange Commission (the "SEC"), and the stockholders of
▇▇▇▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇▇▇ in connection with (x) the execution and delivery by
▇▇▇▇▇▇▇▇▇▇ of this Agreement and (y) the consummation by ▇▇▇▇▇▇▇▇▇▇ of
transactions contemplated hereby.
3.4. Financial Statements.
(a) The ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule sets forth copies of
the statements of condition of ▇▇▇▇▇▇▇▇▇▇ as of December 31, 1993, 1994 and
1995, and the related statements of income, 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 KPMG Peat Marwick, LLP,
independent public accountants with respect to ▇▇▇▇▇▇▇▇▇▇, and the unaudited
statements of condition and related statements of income, stockholders' equity
and cash flows of ▇▇▇▇▇▇▇▇▇▇ for the periods ended March 31, June 30, and
September 30, 1996, as filed with the FDIC (collectively, the "▇▇▇▇▇▇▇▇▇▇
Financial Statements"). The ▇▇▇▇▇▇▇▇▇▇ Financial Statements (including the
related notes) have been prepared in accordance with generally accepted
accounting principles consistently applied during the periods involved (except
as approved by such independent public accountants and disclosed therein), and
fairly present the financial condition of ▇▇▇▇▇▇▇▇▇▇ as of the respective dates
set forth therein, and the related statements of income, stockholders' equity
and cash flows fairly present the results of the operations, stockholders'
equity and cash flows of ▇▇▇▇▇▇▇▇▇▇ for the respective periods set forth
therein.
(b) The books and records of ▇▇▇▇▇▇▇▇▇▇ have been and are
being maintained in material compliance with applicable legal and accounting
requirements, and reflect only actual transactions.
(c) Except as and to the extent reflected, disclosed or
reserved against in the ▇▇▇▇▇▇▇▇▇▇ Financial Statements (including the notes
thereto), as of September 30, 1996 neither ▇▇▇▇▇▇▇▇▇▇ nor any of its
Subsidiaries had or has, as the case may be, any liabilities, whether absolute,
accrued, contingent or otherwise, which are material to the business,
operations, assets or financial condition of ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇
Subsidiary. Since September 30, 1996 and to the date hereof, neither ▇▇▇▇▇▇▇▇▇▇
nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary has incurred any liabilities except in the
ordinary course of business and consistent with prudent banking practice, and
except as specifically contemplated by this Agreement or relating to other
matters disclosed in this Agreement.
(d) As of September 30, 1996, ▇▇▇▇▇▇▇▇▇▇ had stockholder's
equity of $8,979,839, 665,392 Shares of Common Stock outstanding, Options
(granted under the ▇▇▇▇▇▇▇▇▇▇ Option Plans) outstanding permitting the holders
to purchase 60,051 shares of Common Stock for an aggregate exercise price of
$500,000, and an Allowance for Possible Loan Losses of $803,435. Without
limiting or qualifying the materiality of any other representation, warranty or
covenant in this Agreement, the representations contained in this paragraph
3.4(d) were a material inducement to United in determining the Exchange Ratio
and if these numbers were inaccurate when made and such inaccuracy is material,
United shall have the right to terminate this Agreement due to material breach
of a representation by ▇▇▇▇▇▇▇▇▇▇.
3.5. Financial Advisor; Broker's and Other Fees. ▇▇▇▇▇▇▇▇▇▇
has retained Finpro Financial Services, Inc. ("Finpro") to render a fairness
opinion. Neither ▇▇▇▇▇▇▇▇▇▇ 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. Except as set forth in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, there are
no fees (other than time charges billed at usual and customary rates) payable to
any consultants, including lawyers and accountants, in connection with this
transaction or which would be triggered by consummation of this transaction or
the termination of the services of such consultants by ▇▇▇▇▇▇▇▇▇▇.
3.6. Absence of Certain Changes or Events.
(a) Except as set forth in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule,
there has not been any material adverse change in the business, operations,
assets or financial condition of ▇▇▇▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇▇▇▇ Subsidiary on a
consolidated basis since September 30, 1996, and to the best of ▇▇▇▇▇▇▇▇▇▇'▇
knowledge, no facts or conditions exist which ▇▇▇▇▇▇▇▇▇▇ believes will cause or
is likely to cause such a material adverse change in the future.
(b) Except as set forth in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule,
▇▇▇▇▇▇▇▇▇▇ has not taken or permitted any of the actions set forth in Section
5.2 hereof between September 30, 1996 and the date hereof and each of ▇▇▇▇▇▇▇▇▇▇
and the ▇▇▇▇▇▇▇▇▇▇ Subsidiary has conducted its business only in the ordinary
course, consistent with past practice.
3.7. Legal Proceedings. Except as disclosed in the ▇▇▇▇▇▇▇▇▇▇
Disclosure Schedule, neither ▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary is a party
to any, and there are no pending or, to the best of ▇▇▇▇▇▇▇▇▇▇'▇ knowledge,
threatened, material legal, administrative, arbitral or other proceedings,
claims, actions or governmental investigations of any nature against ▇▇▇▇▇▇▇▇▇▇
or any ▇▇▇▇▇▇▇▇▇▇ Subsidiary or against any present or former Farrington officer
or director in their capacity as a ▇▇▇▇▇▇▇▇▇▇ officer or director. Except as
disclosed in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, neither ▇▇▇▇▇▇▇▇▇▇ nor any
▇▇▇▇▇▇▇▇▇▇ Subsidiary is a party to any material order, judgment or decree
entered against ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇ Subsidiary in any lawsuit or
proceeding.
3.8. Taxes and Tax Returns.
(a) ▇▇▇▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇▇▇▇ 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 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 each ▇▇▇▇▇▇▇▇▇▇
Subsidiary has established (and until the Effective Time will establish) on its
books and records reserves that it reasonably believes are adequate for the
payment of all federal, state and local taxes not yet due and payable, but are
anticipated to be incurred in respect of ▇▇▇▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇▇▇▇
Subsidiary through the Effective Time. Except as set forth in the ▇▇▇▇▇▇▇▇▇▇
Disclosure Schedule, the federal income tax returns of ▇▇▇▇▇▇▇▇▇▇ and each
▇▇▇▇▇▇▇▇▇▇ Subsidiary have been examined by the Internal Revenue Service (the
"IRS") (or are closed to examination due to the expiration of the applicable
statute of limitations) and no deficiencies were asserted as a result of such
examinations which have not been resolved and paid in full. Except as set forth
in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, the applicable state income tax returns
of ▇▇▇▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇▇▇▇ Subsidiary have been examined by the
applicable authorities (or are closed to examination due to the expiration of
the statute of limitations) and no deficiencies were asserted as a result of
such examinations which have not been resolved and paid in full. To the best
knowledge of ▇▇▇▇▇▇▇▇▇▇, there are no audits or other administrative or court
proceedings presently pending, or claims asserted, for taxes or assessments upon
▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇ Subsidiary nor has ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇
Subsidiary given any currently outstanding waivers or comparable consents
regarding the application of the statute of limitations with respect to any
taxes or tax Returns.
(b) Except as set forth in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule,
neither ▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary (i) has requested any extension
of time within which to file any tax 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 ▇▇▇▇▇▇▇▇▇▇ (nor
does ▇▇▇▇▇▇▇▇▇▇ have any knowledge that the IRS has proposed any such adjustment
or change of accounting method) and (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 in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule,
neither ▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary maintains or contributes to any
"employee pension benefit plan", within the meaning of Section 3(2)(A) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), "employee
welfare benefit plan", within the meaning of Section 3(1) of ERISA, stock option
plan, stock purchase plan, deferred compensation plan, severance plan, bonus
plan, employment agreement or other similar plan, program or arrangement.
Neither ▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary has, since September 2, 1974,
contributed to any "Multiemployer Plan", within the meaning of Sections 3(37)
and 4001(a)(3) of ERISA.
(b) Except with respect to customary health and disability
benefits, there are no unfunded benefits obligations which are not accounted for
by reserves shown on the ▇▇▇▇▇▇▇▇▇▇ Financial Statements and established under
generally accepted accounting principles, or otherwise noted on such ▇▇▇▇▇▇▇▇▇▇
Financial Statements.
(c) Except as agreed to by United in writing or set forth in
the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, the consummation of the transactions
contemplated by this Agreement will not (i) entitle any current or former
employee of ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇ Subsidiary to severance pay or any
similar payment or (ii) accelerate the time of payment, vesting, or increase the
amount, of any compensation due to any current or former employee of ▇▇▇▇▇▇▇▇▇▇
or any ▇▇▇▇▇▇▇▇▇▇ Subsidiary under any ▇▇▇▇▇▇▇▇▇▇ benefit plan.
(d) No officer; director, employee or agent (or former
officer, director, employee or agent) of ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇ Subsidiary
is entitled now, or will be entitled as a consequence of this Agreement or the
Merger, to any payment or benefit from ▇▇▇▇▇▇▇▇▇▇, United or UNB which if paid
or provided would constitute an "excess parachute payment", as defined in
Section 280G of the Code or regulations promulgated thereunder.
3.10. Reports.
(a) Each communication mailed by ▇▇▇▇▇▇▇▇▇▇ to all of its
stockholders since January 1, 1993, and each annual, quarterly or special
report, and proxy statement, as of its date, complied in all material respects
with all applicable statutes, rules and regulations enforced or promulgated by
the applicable regulatory agency 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
disclosures as of a later date shall be deemed to modify disclosures as of an
earlier date.
(b) ▇▇▇▇▇▇▇▇▇▇ has, since January 1, 1993, duly filed with the
FDIC in correct form the quarterly and annual reports required to be filed under
applicable laws and regulations, and ▇▇▇▇▇▇▇▇▇▇ promptly will deliver or make
available to United accurate and complete copies of such reports. The ▇▇▇▇▇▇▇▇▇▇
Disclosure Schedule lists all examinations of ▇▇▇▇▇▇▇▇▇▇ conducted by either the
FDIC or the New Jersey Department of Banking since January 1, 1993 and the dates
of any responses thereto submitted by ▇▇▇▇▇▇▇▇▇▇.
3.11. ▇▇▇▇▇▇▇▇▇▇ Information. The information relating to
▇▇▇▇▇▇▇▇▇▇ to be contained in the Proxy Statement/Prospectus (as defined in
Section 5.6(a) hereof) to be delivered to stockholders of ▇▇▇▇▇▇▇▇▇▇ in
connection with the solicitation of their approval of this Agreement and the
transactions contemplated hereby, as of the date the Proxy Statement/Prospectus
is mailed to stockholders of ▇▇▇▇▇▇▇▇▇▇, and up to and including the date of the
meeting of stockholders to which such Proxy Statement/Prospectus relates, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The information relating to
▇▇▇▇▇▇▇▇▇▇ in the Registration Statement (as defined in Section 5.6(a) hereof),
as of the date of the filing thereof, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
3.12. Compliance with Applicable Law.
(a) General. Except as set forth in the ▇▇▇▇▇▇▇▇▇▇ Disclosure
Schedule, ▇▇▇▇▇▇▇▇▇▇ and its Subsidiary hold all material licenses, franchises,
permits and authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to each, 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 ▇▇▇▇▇▇▇▇▇▇ and its Subsidiary (other than where such
defaults or non-compliances will not, alone or in the aggregate, result in a
material adverse effect on the business, operations, assets or financial
condition of ▇▇▇▇▇▇▇▇▇▇ and its Subsidiary on a consolidated basis) and neither
▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary has received notice of violation of,
nor does it know of any violations (other than violations which will not, alone
or in the aggregate, result in a material adverse effect on the business,
operations, assets or financial condition of ▇▇▇▇▇▇▇▇▇▇ and its Subsidiary on a
consolidated basis) of, any of the above.
(b) CRA. Without limiting the foregoing, except as set forth
in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, ▇▇▇▇▇▇▇▇▇▇ has complied in all material
respects with the Community Reinvestment Act ("CRA") and received a CRA rating
of "satisfactory" as of its last examination, and ▇▇▇▇▇▇▇▇▇▇ has not received
any written notice from any persons asserting that such person would object to
the consummation of this Merger due to the CRA performance of or rating of
▇▇▇▇▇▇▇▇▇▇.
3.13. Certain Contracts.
(a) Except as disclosed in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule,
(i) neither ▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary is a party to or bound by
any contract or understanding (whether written or, to the best of its knowledge,
oral) with respect to the employment or termination of any present or former
officers, employees, directors or consultants. The ▇▇▇▇▇▇▇▇▇▇ Disclosure
Schedule sets forth true and correct copies of all written employment agreements
or termination agreements with officers, employees, directors, or consultants to
which either ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇ Subsidiary is a party.
(b) Except as disclosed in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule,
(i) as of the date of this Agreement, neither ▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇
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 either ▇▇▇▇▇▇▇▇▇▇ or its Subsidiary, (ii) no commitment, agreement
or other instrument to which ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇ Subsidiary is a party
or by which it is bound limits the freedom of ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇
Subsidiary to compete in any line of business or with any person, and (iii)
neither ▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary is a party to any collective
bargaining agreement.
(c) Except as disclosed in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule,
neither ▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary nor, to the best knowledge of
▇▇▇▇▇▇▇▇▇▇, any other party thereto, is in default in any material respect under
any material lease, contract, mortgage, promissory note, deed of trust, loan
agreement or other commitment or arrangement.
3.14. Properties and Insurance.
(a) ▇▇▇▇▇▇▇▇▇▇ and its Subsidiary have good and, as to owned
real property, if any, marketable title to all material assets and properties,
whether real or personal, tangible or intangible, reflected in ▇▇▇▇▇▇▇▇▇▇'▇
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 such balance sheet or the notes thereto or incurred in the ordinary
course of business after the date of such balance sheet, (ii) statutory liens
for amounts not yet delinquent or which are being contested in good faith, (iii)
such encumbrances, liens, mortgages, security interests, pledges and title
imperfections that are not in the aggregate material to the business,
operations, assets, and financial condition of ▇▇▇▇▇▇▇▇▇▇ and its Subsidiary
taken as a whole and (iv) with respect to owned real property, if any, title
imperfections noted in title reports delivered to United prior to the date
hereof. ▇▇▇▇▇▇▇▇▇▇ and its Subsidiary, as lessees, have the right under valid
and subsisting leases to occupy, use, possess and control, in all material
respects, all real property leased by them, as presently occupied, used,
possessed and controlled by them.
(b) The ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule lists all policies of
insurance and bonds covering business operations and insurable properties and
assets of ▇▇▇▇▇▇▇▇▇▇ and its Subsidiary, all risks insured against, and the
amount thereof and deductibles relating thereto. Except as set forth in the
▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, as of the date hereof, neither ▇▇▇▇▇▇▇▇▇▇ nor
any ▇▇▇▇▇▇▇▇▇▇ Subsidiary has received any notice of cancellation or notice of a
material amendment of any such insurance policy or bond and neither of them is
in default in any material respect under such policy or bond, and, to the best
of ▇▇▇▇▇▇▇▇▇▇'▇ knowledge, no coverage thereunder is being disputed and all
material claims thereunder have been filed in a timely fashion.
3.15. Minute Books. The minute books of ▇▇▇▇▇▇▇▇▇▇ and its
Subsidiary contain accurate records of all meetings and other corporate action
held of their respective stockholders and Boards of Directors (including
committees of their respective Boards of Directors).
3.16. Environmental Matters. Except as disclosed in the
▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, neither ▇▇▇▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇▇▇▇ Subsidiary
has received any written notice, citation, claim, assessment, proposed
assessment or demand for abatement alleging that ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇
Subsidiary (either directly or as a successor-in-interest in connection with the
enforcement of remedies to realize the value of properties serving as collateral
for outstanding loans) is responsible for the correction or clean-up of any
condition material to the business, operations, assets or financial condition of
▇▇▇▇▇▇▇▇▇▇ or its Subsidiary. Except as disclosed in the ▇▇▇▇▇▇▇▇▇▇ Disclosure
Schedule, ▇▇▇▇▇▇▇▇▇▇ has no knowledge that any toxic or hazardous substances or
materials have been emitted, generated, disposed of or stored on any property
owned or leased by ▇▇▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇▇▇▇ Subsidiary in any manner that
violates or, after the lapse of time may violate, any presently existing
federal, state or local law or regulation governing or pertaining to such
substances and materials.
3.17. Reserves. The allowance for possible loan and lease
losses in the September 30, 1996 ▇▇▇▇▇▇▇▇▇▇ Financial Statements was adequate at
the time based upon past loan loss experiences and potential losses in the
portfolio at the time to cover all known or reasonably anticipated loan losses.
3.18. Disclosure. There are no material facts concerning the
business, operations, assets or financial condition of ▇▇▇▇▇▇▇▇▇▇ which have not
been disclosed to United which would have a material adverse effect on the
business, operations or financial condition of ▇▇▇▇▇▇▇▇▇▇. 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 UNB AND UNITED
References herein to the "United 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
United to ▇▇▇▇▇▇▇▇▇▇. United hereby represents and warrants to ▇▇▇▇▇▇▇▇▇▇ as
follows:
4.1. Corporate Organization.
(a) United is a corporation duly organized and validly
existing and in good standing under the laws of the State of New Jersey. United
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 United or any of
its Subsidiaries (defined below). United is registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHCA").
(b) Each of the Subsidiaries of United are listed in the
United Disclosure Schedule. The term "Subsidiary" when used in this Agreement
with reference to United means any corporation, joint venture, association,
partnership, trust or other entity in which United has, directly or indirectly,
at least a 50 percent interest or acts as a general partner. Each Subsidiary of
United is duly organized and validly existing and in good standing under the
laws of the jurisdiction of its incorporation. UNB is a national bank whose
deposits are insured by the Bank Insurance Fund of the FDIC to the fullest
extent permitted by law. Each Subsidiary of United 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 United or any of its Subsidiaries. The United Disclosure
Schedule sets forth true and complete copies of the Articles of Association and
Bylaws of UNB as in effect on the date hereof.
4.2. Capitalization. The authorized capital stock of United
consists of 5,000,000 shares of United Common Stock and 300,000 shares of
preferred stock ("Preferred Stock"). As of September 30, 1996, there were
3,854,964 (including the September Stock Dividend) shares of United Common Stock
issued and outstanding, including 43,995 treasury shares and 5,623 shares of
restricted stock granted under the United National Bancorp Long-Term Stock Based
Incentive Plan (the "United Option Plan") and there were no shares of Preferred
Stock outstanding. Since such date, and from time to time hereafter, United may
repurchase shares of its Common Stock. Since September 30, 1996, to and
including the date of this Agreement, no additional shares of United Common
Stock have been issued except in connection with the exercise of options granted
under the United Stock Option Plan or grants of restricted stock under the
United Option Plan. As of September 30, 1996, except for 145,231 shares of
United Common Stock issuable upon exercise of outstanding stock options granted
pursuant to the United Option Plan and the Non-Employee Director Stock Option
Plan (the "United Director Option Plan"), there were no shares of United Common
Stock issuable upon the exercise of outstanding stock options or otherwise. All
issued and outstanding shares of United Common Stock, and all issued and
outstanding shares of capital stock of United's Subsidiaries, have been duly
authorized and validly issued, are fully paid, nonassessable and free of
preemptive rights, and are free and clear of all liens, encumbrances, charges,
restrictions or rights of third parties. All of the outstanding shares of
capital stock of United's Subsidiaries are owned by United free and clear of any
liens, encumbrances, charges, restrictions or rights of third parties. Except
for the options referred to above under the United Option Plan, the United
Director Option Plan and the September Stock Dividend, neither United nor any of
United's Subsidiaries has 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 United or
United's Subsidiaries or any securities representing the right to otherwise
receive any shares of such capital stock or any securities convertible into or
representing the right to purchase or subscribe for any such shares, and there
are no agreements or understandings with respect to voting of any such shares.
No additional grants of awards, or exercises of outstanding awards, under the
United Option Plan or United Director Option Plan, or exercises of Warrants, or
repurchases of United Common Stock, prior to the Effective Time shall be
required to be disclosed or reported to ▇▇▇▇▇▇▇▇▇▇ to keep the representations
in this section true or correct.
4.3. Authority; No Violation.
(a) United and UNB have full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms hereof. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly approved by the Board of Directors of United
and UNB. Except for the approval of United as a shareholder of UNB and as
required by the NASDAQ/NMS listing rules, no other corporate proceedings on the
part of United and UNB are necessary to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
United and UNB and constitutes a valid and binding obligation of United and UNB,
enforceable against United and UNB in accordance with its terms.
(b) Neither the execution or delivery of this Agreement nor
the consummation by United and UNB of the transactions contemplated hereby in
accordance with the terms hereof, will (i) violate any provision of the
Certificate of Incorporation, Articles of Association or other governing
instrument or Bylaws of United or UNB, (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 United or UNB or any of their respective properties or assets, or
(iii) violate, conflict with, result in a breach of any provision of, constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of, accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or other encumbrance upon any of the properties or assets of
United or UNB 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 United or UNB is a party, or by which United
or UNB or any of their properties or assets may be bound or affected, except,
with respect to (ii) and (iii) above, such as individually and in the aggregate
will not have a material adverse effect on the business, operations, assets or
financial condition of United and United's Subsidiaries on a consolidated basis,
or the ability of United and UNB to consummate the transactions contemplated
hereby. Except for consents and approvals of or filings or registrations with or
notices to the OCC, the Commissioner, the SEC, applicable state securities
bureaus or commissions, and the National Association of Securities Dealers,
Inc., 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
United or UNB in connection with (a) the execution and delivery by United or UNB
of this Agreement and (b) the consummation by United of the Merger and the other
transactions contemplated hereby. To the best of United's knowledge, no fact or
condition exists which United has reason to believe will prevent it or UNB from
obtaining the aforementioned consents and approvals within the time frame
contemplated hereby.
4.4. Financial Statements.
(a) United has previously delivered to ▇▇▇▇▇▇▇▇▇▇ copies of
the consolidated statements of financial condition of United as of December 31,
1993, 1994 and 1995, 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 KPMG Peat Marwick, LLP, the current independent public
accountants with respect to United or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, previously the
independent public accountants with respect to United, and the unaudited
consolidated statements of condition of United as of March 31, June 30, and
September 30, 1996, and the related unaudited consolidated statements of income,
changes in stockholders' equity and cash flows for the three months then ended
as reported in United's Quarterly Reports on Form 10-Q, filed with the SEC under
the Securities and Exchange Act of 1934, as amended (the "1934 Act")
(collectively, the "United Financial Statements"). The United Financial
Statements (including the related notes), have been prepared in accordance with
generally accepted accounting principles consistently applied during the periods
involved (except as approved by such independent public accountants and
disclosed therein), and fairly present the consolidated financial position of
United and its consolidated subsidiaries as of the respective dates set forth
therein, and the related consolidated statements of income, changes in
stockholders' equity and of cash flows (including the related notes, where
applicable) fairly present the results of the consolidated operations and
changes in stockholders' equity and of cash flows of United and its consolidated
subsidiaries for the respective fiscal periods set forth therein.
(b) The books and records of United have been and are being
maintained in material compliance with applicable legal and accounting
requirements, and reflect only actual transactions.
(c) Except as and to the extent reflected, disclosed or
reserved against in the United Financial Statements (including the notes
thereto), as of September 30, 1996 neither United nor any of its Subsidiaries
had or has, as the case may be, any obligation or liability, whether absolute,
accrued, contingent or otherwise, which are material to the business,
operations, assets or financial condition of United or any of its Subsidiaries.
Since September 30, 1996, neither United nor any of its Subsidiaries have
incurred any liabilities, except in the ordinary course of business and
consistent with prudent banking practice.
4.5. Brokerage and Other Fees. Neither United nor UNB nor any
of their respective directors or officers has employed any broker or finder or
incurred any liability for any broker's or finder's fees or commissions in
connection with any of the transactions contemplated by this Agreement.
4.6. Absence of Certain Changes or Events. There has not been
any material adverse change in the business, operations, assets or financial
condition of United and United's Subsidiaries on a consolidated basis since
September 30, 1996 and to the best of United's knowledge, no fact or condition
exists which United believes will cause or is likely to cause such a material
adverse change in the future.
4.7. United Information. The information relating to United,
this Agreement and the transactions contemplated hereby in the Proxy
Statement/Prospectus (as defined in Section 5.6(a) hereof), as of the date of
the mailing of the Proxy Statement/Prospectus, and up to and including the date
of the meeting of stockholders of ▇▇▇▇▇▇▇▇▇▇ to which such Proxy
Statement/Prospectus relates, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The information relating to United, this Agreement and the
transactions contemplated hereby in the Registration Statement (as defined in
Section 5.6(a) hereof), as of the date of the filing thereof, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
4.8. Capital Adequacy. At the Effective Time, after taking
into effect the Merger and the transactions contemplated hereunder, United will
have sufficient capital to satisfy all applicable regulatory capital
requirements.
4.9. United Common Stock. At the Effective Time, the United
Common Stock to be issued pursuant to the terms of Section 2.1, when so issued,
shall be duly authorized, validly issued, fully paid, and non-assessable, free
of preemptive rights and free and clear of all liens, encumbrances or
restrictions created by or through United.
4.10. Legal Proceedings. Except as disclosed in the United
Disclosure Schedule, neither United nor any of its Subsidiaries is a party to
any, and there are no material pending or, to the best of United's knowledge,
threatened, legal, administrative, arbitral or other proceedings, claims,
actions or governmental investigations of any nature against United or any of
its Subsidiaries which, if decided adversely to United, or any of its
Subsidiaries, would have a material adverse effect on the business, operations,
assets or financial condition of United and its Subsidiaries on a consolidated
basis. Except as disclosed in the United Disclosure Schedule, neither United nor
any of United's Subsidiaries is a party to any order, judgment or decree entered
against United or any such Subsidiary in any lawsuit or proceeding which would
have a material adverse affect on the business, operations, assets or financial
condition of United and its Subsidiaries on a consolidated basis.
4.11. Taxes and Tax Returns. United and each of its
Subsidiaries has duly filed (and until the Effective Time will so file) all
Returns required to be filed by it 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. United and each of its Subsidiaries have established (and until the
Effective Time will establish) on its books and records reserves that it
reasonably believes are adequate for the payment of all federal, state and local
taxes not yet due and payable, but anticipated to be incurred in respect of
United and its Subsidiaries through the Effective Time. No deficiencies exist or
have been asserted based upon the federal income tax returns of United and UNB.
To the best knowledge of United, there are no audits or other administrative or
court proceedings pending, or claims asserted, for taxes or assessments upon
United or any of its Subsidiaries.
4.12. Employee Benefit Plans.
(a) United and its Subsidiaries maintain or contribute to
certain "employee pension benefit plans" (the "United Pension Plans"), as such
term is defined in Section 3 of ERISA, and "employee welfare benefit plans" (the
"United Welfare Plans"), as such term is defined in Section 3 of ERISA. Since
September 2, 1974, neither United nor its Subsidiaries have contributed to any
"Multiemployer Plan", as such term is defined in Section 3(37) of ERISA.
(b) Each of the United Pension Plans and each of the United
Welfare Plans has been operated in compliance in all material respects with the
provisions of ERISA, the Code, all regulations, rulings and announcements
promulgated or issued thereunder, and all other applicable governmental laws and
regulations.
4.13. Reports.
(a) Each communication mailed by United to all of its
stockholders since January 1, 1993, and each annual, quarterly or special
report, and proxy statement as of its date, complied in all material respects
with all applicable statutes, rules and regulations enforced or promulgated by
the applicable regulatory agency 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
disclosures as of a later date shall be deemed to modify disclosures as of an
earlier date.
(b) United and UNB have, since January 1, 1993, duly filed
with the SEC, OCC and the FRB in correct form the monthly, quarterly and annual
reports required to be filed under applicable laws and regulations, and United,
upon request, promptly will deliver or make available to ▇▇▇▇▇▇▇▇▇▇ accurate and
complete copies of such reports.
4.14. Compliance with Applicable Law. United and its
Subsidiaries hold all material licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses under and
pursuant to each, 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 or the
NASDAQ/NMS relating to United and its Subsidiaries (other than where such
default or non-compliance will not result in a material adverse effect on the
business, operations, assets or financial condition of United and its
Subsidiaries on a consolidated basis), and neither United nor any of its
Subsidiaries has received notice of violation of, nor does it know of any
violations (other than violations which will not, alone or in the aggregate,
result in a material adverse effect on the business operations, assets or
financial condition of United and its Subsidiaries on a consolidated basis) of,
any of the above.
4.15. Properties and Insurance.
(a) United and its Subsidiaries have good and, as to owned
real property, marketable title to all material assets and properties, whether
real or personal, tangible or intangible, reflected in United'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). United
and its Subsidiaries as lessees have the right under valid and subsisting leases
to occupy, use, possess and control in all material respects, all real property
leased by them as presently occupied, used, possessed and controlled by them.
(b) The business operations and all insurable properties and
assets of United and its Subsidiaries are insured for their benefit against all
risks which, in the reasonable judgment of the management of United should be
insured against, with such deductibles and against such risks and losses as are
in the opinion of the management of United adequate for the business engaged in
by United and its Subsidiaries. As of the date hereof, United has not received
any notice of cancellation of or material amendment to any such insurance policy
or bond and is not in default in any material respect under any such policy or
bond, and, to the best of its knowledge, no coverage thereunder is being
disputed and all material claims thereunder have been filed in a timely fashion.
4.16. Minute Books. The minute books of United and its
Subsidiaries contain accurate records of all meetings and other corporate action
held of their respective stockholders and Boards of Directors (including
committees of their respective Boards of Directors).
4.17. Environmental Matters. Except as disclosed in the United
Disclosure Schedule, neither United nor any of its Subsidiaries has received any
written notice, citation, claim, assessment, proposed assessment or demand for
abatement alleging that United or any of its Subsidiaries (either directly or as
a successor-in-interest in connection with the enforcement of remedies to
realize the value of properties serving as collateral for outstanding loans) is
responsible for the correction or clean-up of any condition material to the
business, operations, assets or financial condition of United or its
Subsidiaries. Except as disclosed in the United Disclosure Schedule, United has
no knowledge that any toxic or hazardous substances or materials have been
emitted, generated, disposed of or stored on any property owned or leased by
United or any of its Subsidiaries in any manner that violates or, after the
lapse of time may violate, any presently existing federal, state or local law or
regulation governing or pertaining to such substances and materials, the
violation of which would have a material adverse effect on the business,
operations, assets or financial condition of United and its Subsidiaries on a
consolidated basis.
4.18. Reserves. The allowance for possible loan and lease
losses in the September 30, 1996 United Financial Statements was adequate based
at the time upon past loan loss experiences and potential losses in the
portfolio at the time to cover all known or reasonably anticipated loan losses.
4.19. Disclosures. Except for other acquisition transactions
which have not yet been publicly disclosed by United, there are no material
facts concerning the business, operations, assets or financial condition of
United which would have a material adverse effect on the business, operations or
financial condition of United which have not been disclosed to ▇▇▇▇▇▇▇▇▇▇
directly or indirectly by access to any filing by United under the 1934 Act. No
representation or warranty contained in Article IV of this Agreement contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements herein not misleading.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of the Business of ▇▇▇▇▇▇▇▇▇▇. During the period
from the date of this Agreement to the Effective Time, ▇▇▇▇▇▇▇▇▇▇ shall conduct
its business and engage in transactions permitted hereunder only in the ordinary
course and consistent with prudent banking practice, except with the prior
written consent of United, which consent will not be unreasonably withheld.
▇▇▇▇▇▇▇▇▇▇ also shall use its best efforts to (i) preserve its business
organization intact, (ii) keep available to itself the present services of its
employees and (iii) preserve for itself and United the goodwill of its customers
and others with whom business relationships exist, in each case provided that
▇▇▇▇▇▇▇▇▇▇ shall not be required to take any unreasonable or extraordinary act
or any action which would conflict with any other term of this Agreement.
5.2. Negative Covenants and Dividend Covenants. ▇▇▇▇▇▇▇▇▇▇
agrees that from the date hereof to the Effective Time, except as otherwise
approved by United in writing, or as permitted or required by this Agreement or
as contained in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, it will not:
(a) change any provision of its Certificate of Incorporation
or Bylaws or any similar governing documents;
(b) change the number of shares of its authorized capital
stock or issue any more shares of ▇▇▇▇▇▇▇▇▇▇ Common Stock (other than pursuant
to the exercise of options granted under the ▇▇▇▇▇▇▇▇▇▇ Option Plans as of the
date hereof) or other capital stock or issue or grant any option, warrant, call,
commitment, subscription, right to purchase or agreement of any character
relating to the authorized or issued capital stock of ▇▇▇▇▇▇▇▇▇▇ 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, or redeem or otherwise
acquire any shares of such capital stock;
(c) grant any severance or termination pay (other than
pursuant to policies of ▇▇▇▇▇▇▇▇▇▇ in effect on the date hereof and disclosed to
United in the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule or as agreed to by United in
writing) to, or enter into or amend any employment agreement with, any of its
directors, officers or employees; adopt any new employee benefit plan or
arrangement of any type or amend any such existing benefit plan or arrangement;
or award any increase in compensation or benefits to its directors, officers or
employees except with respect to salary increases and bonuses for employees in
the ordinary course of business and consistent with past practices and policies;
(d) sell or dispose of any substantial amount of assets or
incur any significant liabilities other than in the ordinary course of business
consistent with past practices and policies;
(e) make any capital expenditures outside of the ordinary
course of business other than pursuant to binding commitments existing on the
date hereof and other than expenditures necessary to maintain existing assets in
good repair;
(f) file any applications or make any contract with respect to
branching or site location or relocation;
(g) agree to acquire in any manner whatsoever (other than to
realize upon collateral for a defaulted loan) any business or entity;
(h) make any material change in its accounting methods or
practices, other than changes required in accordance with generally accepted
accounting principles; or
(i) agree to do any of the foregoing.
5.3. No Solicitation. ▇▇▇▇▇▇▇▇▇▇ 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 United)
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 ▇▇▇▇▇▇▇▇▇▇ (an "Acquisition Transaction").
Notwithstanding the foregoing, ▇▇▇▇▇▇▇▇▇▇ may (i) enter into discussions or
negotiations or provide information in connection with an unsolicited possible
Acquisition Transaction if the Board of Directors of ▇▇▇▇▇▇▇▇▇▇, after
consulting with counsel, determines that such discussions or negotiations should
be commenced in the exercise of its fiduciary responsibilities or such
information should be furnished in the exercise of its fiduciary
responsibilities; and (ii) respond to inquiries from its shareholders in the
ordinary course of business. ▇▇▇▇▇▇▇▇▇▇ will immediately communicate to United
the terms of any proposal, whether written or oral, which it may receive in
respect of any Acquisition Transaction and the fact that it is having
discussions or negotiations with, or supplying information to, a third party in
connection with a possible Acquisition Transaction.
5.4. Current Information. During the period from the date of
this Agreement to the Effective Time, ▇▇▇▇▇▇▇▇▇▇ will, at the request of United,
cause one or more of its designated representatives to confer on a monthly or
more frequent basis with representatives of United regarding ▇▇▇▇▇▇▇▇▇▇'▇
business, operations, properties, assets and financial condition and matters
relating to the completion of the transactions contemplated herein. Without
limiting the foregoing, after granting any loan or extension of credit by
renewal or otherwise, ▇▇▇▇▇▇▇▇▇▇ will send to United a description (i.e., a copy
of the loan documents) for each new loan or extension of credit, and each
renewal of an existing loan or extension of credit, in excess of $50,000. 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 after the date of this Agreement, ▇▇▇▇▇▇▇▇▇▇ will deliver to United
▇▇▇▇▇▇▇▇▇▇'▇ call reports filed with the FDIC and United will deliver to
▇▇▇▇▇▇▇▇▇▇ United's 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 fiscal year, ▇▇▇▇▇▇▇▇▇▇ will deliver to United and United
will deliver to ▇▇▇▇▇▇▇▇▇▇ their respective Annual Reports.
5.5. Access to Properties and Records; Confidentiality.
(a) ▇▇▇▇▇▇▇▇▇▇ shall permit United and its agents and
representatives, including, without limitation, officers, directors, employees,
attorneys, accountants and financial advisors (collectively, "Representatives"),
and United and UNB shall permit ▇▇▇▇▇▇▇▇▇▇ and its Representatives reasonable
access to their respective properties, and shall disclose and make available to
United and its Representatives or ▇▇▇▇▇▇▇▇▇▇ and its Representatives, as the
case may be, all books, papers and records relating to their respective 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, bylaws, material contracts and agreements, filings with any
regulatory authority, independent auditors' work papers (subject to the receipt
by such auditors of a standard access representation letter), litigation files,
plans affecting employees, and any other business activities or prospects in
which United and its representatives or ▇▇▇▇▇▇▇▇▇▇ 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 or would contravene any law, rule,
regulation, order or judgment. The parties will use their best efforts to obtain
waivers of any such restriction and in any event make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply. ▇▇▇▇▇▇▇▇▇▇ acknowledges that United may be involved in
discussions concerning other potential acquisitions and United shall not be
obligated to disclose such information to ▇▇▇▇▇▇▇▇▇▇ except as such information
is publicly disclosed by United.
(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 Representatives
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 keep confidential all such information, and shall not
directly or indirectly use such information for any competitive or commercial
purposes or any other purpose not expressing permitted hereby. Each party hereto
shall inform its Representatives of the terms of this Section 5.5. Any breach of
this Section 5.5 by a Representative of a party hereto shall conclusively be
deemed to be a breach thereof by such party. In the event that the Merger
contemplated hereby does not occur or this Agreement is terminated, all
documents, notes and other writings prepared by a party hereto or its
Representatives based on information furnished by the other party, and all other
documents and records obtained from another party hereto in connection herewith,
shall be promptly destroyed. The obligation to keep such information
confidential shall continue for five (5) 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 other than as a result of a disclosure by any
party hereto or its Representative; (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, regulatory or
examination requirement or in accordance with an order of a court of competent
jurisdiction, provided that in the event of any disclosure required by this
clause (ii), the disclosing party will give at least ten (10) days prior written
notice of such disclosure to the other parties and shall not disclose any such
information without an opinion of counsel supporting its position that such
information must be disclosed.
(c) In addition to all other remedies that may be available to
any party hereto in connection with a breach by any other party hereto of its or
its Representative's obligations hereunder, each party hereto shall be entitled
to specific performance and injunctive and other equitable relief. Each party
hereto waives, and agrees to use its best efforts to cause its Representatives
to waive, any requirement to secure or post a bond in connection with any such
relief.
(d) Without limiting the foregoing, United and UNB, directly
or through agents, for a period of 30 calendar days (the "Due Diligence Period")
following the date of this Agreement, shall have the right to perform due
diligence on ▇▇▇▇▇▇▇▇▇▇ and a complete acquisition audit of ▇▇▇▇▇▇▇▇▇▇. Within
the Due Diligence Period, United shall have the right to terminate this
Agreement if the due diligence review by United or any Disclosure Schedules
provided by ▇▇▇▇▇▇▇▇▇▇ after the date hereof causes United to reach a conclusion
about the financial condition, business, assets or the quality of the
representations and warranties of ▇▇▇▇▇▇▇▇▇▇, adverse from conclusions about the
same matters which United's senior executives held at the time United executed
this Agreement. 122513A01110696
5.6. Regulatory Matters.
(a) For the purposes of holding the meeting of ▇▇▇▇▇▇▇▇▇▇
stockholders and registering or otherwise qualifying under applicable federal
and state securities laws United Common Stock to be issued to Record Holders in
connection with the Merger, the parties hereto shall cooperate in the
preparation and filing by United of a Registration Statement with the SEC which
shall include an appropriate proxy statement and prospectus satisfying all
applicable requirements of applicable state and federal laws, including the
Securities Act of 1933, as amended (the "1933 Act"), the 1934 Act and applicable
state securities laws and the rules and regulations thereunder. (Such proxy
statement and prospectus in the form mailed by ▇▇▇▇▇▇▇▇▇▇ to the ▇▇▇▇▇▇▇▇▇▇
shareholders and optionees, together with any and all amendments and supplements
thereto, is herein referred to as the "Proxy Statement/Prospectus" and the
various documents to be filed by United under the 1933 Act with the SEC to
register for sale the United Common Stock to be issued to Record Holders and
optionees, including the Proxy Statement/Prospectus, and the Proxy Statement for
United stockholders, if necessary, together with any and all amendments and
supplements thereto, are referred to herein as the "Registration Statement").
(b) United shall furnish information concerning United as is
necessary in order to cause the Proxy Statement/Prospectus, insofar as it
relates to United, to comply with Section 5.6(a) hereof. United agrees promptly
to advise ▇▇▇▇▇▇▇▇▇▇ if at any time prior to the ▇▇▇▇▇▇▇▇▇▇ shareholder meeting
referred to in Section 5.7 hereof, any information provided by United in the
Proxy Statement/Prospectus becomes incorrect or incomplete in any material
respect and to provide ▇▇▇▇▇▇▇▇▇▇ with the information needed to correct such
inaccuracy or omission. United shall furnish ▇▇▇▇▇▇▇▇▇▇ with such supplemental
information as may be necessary in order to cause the Proxy
Statement/Prospectus, insofar as it relates to United, to comply with Section
5.6(a) after the mailing thereof to ▇▇▇▇▇▇▇▇▇▇ shareholders.
(c) ▇▇▇▇▇▇▇▇▇▇ shall furnish United with such information
concerning ▇▇▇▇▇▇▇▇▇▇ as is necessary in order to cause the Proxy
Statement/Prospectus and Registration Statement, insofar as it relates to
▇▇▇▇▇▇▇▇▇▇, to comply with Section 5.6(a) hereof. ▇▇▇▇▇▇▇▇▇▇ agrees promptly to
advise United if, at any time prior to the ▇▇▇▇▇▇▇▇▇▇ shareholder's meeting
referred to in Section 5.7 hereof, information provided by ▇▇▇▇▇▇▇▇▇▇ in the
Proxy Statement/Prospectus becomes incorrect or incomplete in any material
respect and to provide United with the information needed to correct such
inaccuracy or omission. ▇▇▇▇▇▇▇▇▇▇ shall furnish United with such supplemental
information as may be necessary in order to cause the Proxy Statement/Prospectus
and Registration Statement, insofar as it relates to ▇▇▇▇▇▇▇▇▇▇, to comply with
Section 5.6(a) after the mailing thereof to ▇▇▇▇▇▇▇▇▇▇ shareholders.
(d) United shall promptly make such filings as are necessary
in connection with the offering of the United Common Stock with applicable state
securities agencies and shall use all reasonable efforts to qualify the offering
of the United Common Stock under applicable state securities laws at the
earliest practicable date. ▇▇▇▇▇▇▇▇▇▇ shall promptly furnish United with such
information regarding the ▇▇▇▇▇▇▇▇▇▇ shareholders as United requires to enable
it to determine what filings are required hereunder. ▇▇▇▇▇▇▇▇▇▇ authorizes
United to utilize in such filings the information concerning ▇▇▇▇▇▇▇▇▇▇ provided
to United in connection with, or contained in, the Proxy Statement/ Prospectus.
United shall furnish ▇▇▇▇▇▇▇▇▇▇ with drafts of all such filings, shall provide
▇▇▇▇▇▇▇▇▇▇ the opportunity to comment thereon, and shall keep ▇▇▇▇▇▇▇▇▇▇ advised
of the status thereof. United and ▇▇▇▇▇▇▇▇▇▇ shall as promptly as practicable
file the Registration Statement containing the Proxy Statement/Prospectus with
the SEC and the OCC, and each of United and ▇▇▇▇▇▇▇▇▇▇ shall promptly notify the
other of all communications, oral or written, with the SEC and OCC concerning
the Registration Statement and the Proxy Statement/Prospectus.
(e) United shall cause the United Common Stock to be issued in
connection with the Merger to be listed on the NASDAQ/NMS.
(f) The parties hereto will cooperate with each other and use
their best efforts to prepare all necessary documentation, to effect all
necessary filings and to obtain all necessary permits, consents, approvals and
authorizations of all third parties and governmental bodies necessary to
consummate the transactions contemplated by this Agreement as soon as possible,
including, without limitation, those required by the OCC. The parties shall each
have the right to review in advance and comment on all information relating to
the other, as the case may be, 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. United and UNB shall cause
their application to the OCC to be filed (i) within 60 days of the date hereof,
so long as ▇▇▇▇▇▇▇▇▇▇ provides all information necessary to complete the
application within 45 days of the date hereof, or (ii) within 15 days after all
such information is provided, if ▇▇▇▇▇▇▇▇▇▇ does not provide all such
information within such 45 day period. United shall provide to ▇▇▇▇▇▇▇▇▇▇ drafts
of all filings and applications referred to in this Section 5.6(f) and shall
give ▇▇▇▇▇▇▇▇▇▇ the opportunity to comment thereon prior to their filing.
(g) Each of the parties will promptly furnish each other with
copies of written communications received by them or any of their respective
Subsidiaries from, or delivered by any of the foregoing to, any governmental
body in respect of the transactions contemplated hereby.
5.7. Approval of Stockholders. ▇▇▇▇▇▇▇▇▇▇ will (a) take all
steps reasonably necessary duly to call, give notice of, convene and hold a
meeting of the stockholders of ▇▇▇▇▇▇▇▇▇▇ as soon as reasonably practicable for
the purpose of securing the approval by such stockholders of this Agreement, (b)
subject to the qualification set forth in Section 5.3 hereof, recommend to the
stockholders of ▇▇▇▇▇▇▇▇▇▇ the approval of this Agreement and the transactions
contemplated hereby and use its best efforts to obtain, as promptly as
practicable, such approval, and (c) cooperate and consult with United with
respect to each of the foregoing matters. Except as set forth in the ▇▇▇▇▇▇▇▇▇▇
Disclosure Schedule, in connection therewith, it is anticipated that each
director of ▇▇▇▇▇▇▇▇▇▇ shall vote his or her shares of ▇▇▇▇▇▇▇▇▇▇ in favor of
the Merger.
5.8. Further Assurances. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things reasonably 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. 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 otherwise 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.
5.9. Public Announcements. The parties hereto shall cooperate
with each other in the development and distribution of all news releases and
other public disclosures with respect to this Agreement or any of the
transactions contemplated hereby, except as may be otherwise required by law or
regulation or as to which the party releasing such information has used its best
efforts to discuss with the other party in advance.
5.10. Failure to Fulfill Conditions. In the event that United
or ▇▇▇▇▇▇▇▇▇▇ determines that a material condition to its obligation to
consummate the transactions contemplated hereby cannot be fulfilled on or prior
to August 1, 1997, and that it will not waive that condition, it will promptly
notify the other party. Except for any acquisition or merger discussions United
may enter into with other parties, ▇▇▇▇▇▇▇▇▇▇ and United will promptly inform
the other of any facts applicable to ▇▇▇▇▇▇▇▇▇▇ or United, respectively, or
their respective directors, officers or Subsidiaries, that would be likely to
prevent or materially delay approval of the Merger by any governmental authority
or which would otherwise prevent or materially delay completion of the Merger.
5.11. Disclosure Supplements.
(a) ▇▇▇▇▇▇▇▇▇▇ has delivered to United as of the date hereof
certain items which presently constitute the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule.
▇▇▇▇▇▇▇▇▇▇ shall have the right to provide supplements, additions and
corrections to the ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedules for a period of 15 calendar
days after the date hereof and such supplements and additions or corrections
provided within that 15-day period shall be deemed to have been provided on the
date hereof and to qualify the representations and warranties of ▇▇▇▇▇▇▇▇▇▇ as
of such date. However, during the Due Diligence Period, United shall have the
right, as hereafter provided, to exercise its termination right based upon the
supplements, additions and corrections so provided.
(b) In addition to ▇▇▇▇▇▇▇▇▇▇'▇ rights during the first 15-day
period under Section 5.11(a) above, 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,
no supplement or amendment to such Schedules shall correct or cure any warranty
which was untrue when made, but supplements or amendments may be used to
disclose subsequent facts or events to maintain the truthfulness of any
warranty.
5.12. Indemnification. United agrees that it will, or if it is
not permitted to do so under applicable law, it will cause UNB to, after the
Effective Time, and to the extent permitted by applicable law, provide to the
former and then current directors and officers of ▇▇▇▇▇▇▇▇▇▇ indemnification
equivalent to that provided by the Certificate of Incorporation and By-laws of
▇▇▇▇▇▇▇▇▇▇ with respect to acts or omissions occurring prior to the Effective
Time, whether asserted prior to or after the Effective Time, including without
limitation, the authorization of this Agreement and the transactions
contemplated hereby, for a period of six years from the Effective Time, or in
the case of matters occurring prior to the Effective Time which have not been
resolved prior to the sixth anniversary of the Effective Time, until such
matters are finally resolved. To the extent permitted by applicable law, United
or UNB (as applicable) shall advance expenses to former and current officers and
directors of ▇▇▇▇▇▇▇▇▇▇ in connection with the foregoing indemnification.
5.13. Pooling and Tax-Free Reorganization Treatment. Neither
United nor ▇▇▇▇▇▇▇▇▇▇ shall intentionally take, fail to take or cause to be
taken or not be taken, any action within its control, whether before or after
the Effective Time, which would disqualify the Merger as a "pooling of
interests" for accounting purposes or as a "reorganization" within the meaning
of Section 368(a) of the Code. United and ▇▇▇▇▇▇▇▇▇▇ acknowledge that United
expects the transaction to be accounted for as a "purchase" transaction.
5.14. Affiliates.
(a) Promptly, but in any event within two weeks, after the
execution and delivery of this Agreement, (i) ▇▇▇▇▇▇▇▇▇▇ shall deliver to United
(x) a letter identifying all persons who, to the knowledge of ▇▇▇▇▇▇▇▇▇▇, may be
deemed to be "affiliates" of ▇▇▇▇▇▇▇▇▇▇ under Rule 145 of the 1933 Act,
including without limitation all directors and executive officers of ▇▇▇▇▇▇▇▇▇▇
and (y) a letter identifying all persons who, to the knowledge of ▇▇▇▇▇▇▇▇▇▇,
may be deemed to be "affiliates" of ▇▇▇▇▇▇▇▇▇▇ as that term is used for purposes
of qualifying for "pooling of interests" accounting treatment; and (ii) United
shall identify to ▇▇▇▇▇▇▇▇▇▇ all persons who, to the knowledge of United, may be
deemed "affiliates" of United as that term is used for purposes of qualifying
for "pooling of interests" accounting treatment.
(b) Each person who may be deemed an affiliate of ▇▇▇▇▇▇▇▇▇▇
(under either Rule 145 of the 1933 Act or the accounting treatment rules) shall
execute a letter substantially in the form of Schedule 5.14 hereto agreeing to
be bound by the restrictions of Rule 145, as set forth in Schedule 5.14 and
agreeing to be bound by the rules which permit the Merger to be treated as a
pooling of interests for accounting purposes. In addition, United shall cause
its affiliates (as that term is used for purposes of qualifying for pooling of
interests) to execute a letter within two weeks of the date hereof, in which
such persons agree to be bound by the rules which permit the Merger to be
treated as a pooling of interests for accounting treatment.
5.15. Compliance with the Industrial Site Recovery Act.
▇▇▇▇▇▇▇▇▇▇, at its sole cost and expense, shall obtain prior to the Effective
Time, either: (a) a Letter of Non-Applicability from the New Jersey Department
of Environmental Protection and Energy ("NJDEPE") stating that none of the
facilities located in New Jersey owned or operated by ▇▇▇▇▇▇▇▇▇▇ (each, a
"Facility") is an "industrial establishment," as such term is defined under the
Industrial Site Recovery Act ("ISRA"); (b) a Remediation Agreement issued by the
NJDEPE pursuant to ISRA authorizing the consummation of the transactions
contemplated by this Agreement; or (c) a Negative Declaration approval, Remedial
Action Workplan approval, No Further Action letter or other document or
documents issued by the NJDEPE advising that the requirements of ISRA have been
satisfied with respect to each Facility subject to ISRA. In the event ▇▇▇▇▇▇▇▇▇▇
obtains a Remediation Agreement, ▇▇▇▇▇▇▇▇▇▇ will post or have posted an
appropriate Remediation Funding Source or will have obtained the NJDEPE's
approval to self-guaranty any Remediation Funding Source required under any such
Remediation Agreement.
5.16 ▇▇▇▇▇▇▇▇▇▇ Options. From and after the Effective Time,
each ▇▇▇▇▇▇▇▇▇▇ Option which is converted to an option to purchase United Common
Stock under Section 2.1(e)(i) shall be administered, operated and interpreted by
a committee comprised of members of the Board of Directors of United appointed
by the Board of Directors of United. United shall reserve for issuance the
number of shares of United Common Stock issuable upon the exercise of such
converted ▇▇▇▇▇▇▇▇▇▇ Options. United shall also register promptly after the
Effective Time, if not previously registered pursuant to the 1933 Act, the
shares of United Common Stock authorized for issuance under the ▇▇▇▇▇▇▇▇▇▇
Options so converted for the benefit of each person who becomes an employee of
United or UNB, but shall not be obligated to register the shares of United
Common Stock under the 1933 Act for directors of ▇▇▇▇▇▇▇▇▇▇ or for persons who
do not become employees of United or UNB.
5.17 Employment Agreement. Within 30 days of the Closing, in
cancellation of his employment agreement and as a full release for all other
severance and similar payments due him from ▇▇▇▇▇▇▇▇▇▇ or claims against
▇▇▇▇▇▇▇▇▇▇, United shall pay ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ an amount equal to 2.99 times
the annual average of his base salary, cash incentive compensation and cash
bonus paid to ▇▇▇▇▇▇▇▇▇▇ during the five calendar years preceding the Closing.
In no event shall the amount paid to ▇▇▇▇▇▇▇▇▇▇ cause a breach of Section
3.9(d). Prior to any payment, ▇▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇▇ shall provide
documentation reasonably satisfactory to United with respect to ▇▇▇▇▇▇▇▇▇▇'▇
base salary, cash incentive compensation and cash bonus during such five year
period.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions of Each Party's Obligations Under this
Agreement. The respective obligations of each party under this Agreement to
consummate the Merger shall be subject to the satisfaction, or, where
permissible under applicable law, waiver at or prior to the Effective Time of
the following conditions:
(a) Approval of Stockholders; SEC Registration. This Agreement
and the transactions contemplated hereby shall have been approved by the
requisite vote of the stockholders of ▇▇▇▇▇▇▇▇▇▇ and, if necessary, United. The
Registration Statement shall have been declared effective by the SEC and shall
not be subject to a stop order or any threatened stop order, and the issuance of
the United Common Stock shall have been qualified in every state where such
qualification is required under the applicable state securities laws. The United
Common Stock to be issued in connection with the Merger, shall have been
approved for listing on the NASDAQ/NMS.
(b) Regulatory Filings. All necessary regulatory or
governmental approvals and consents (including without limitation any required
approval of the OCC) required to consummate the transactions contemplated hereby
shall have been obtained without any term or condition which would materially
impair the value of ▇▇▇▇▇▇▇▇▇▇, taken as a whole, to United. 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 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 United or ▇▇▇▇▇▇▇▇▇▇ determines in good faith, based
upon the advice of their respective counsel, makes it inadvisable to proceed
with the Merger because any such suit, action or proceeding has a significant
potential to be resolved in such a way as to deprive the party electing not to
proceed of any of the material benefits to it of the Merger.
(d) Tax Free Exchange. United and ▇▇▇▇▇▇▇▇▇▇ shall have
received an opinion, satisfactory to United and ▇▇▇▇▇▇▇▇▇▇, of Pitney, ▇▇▇▇▇▇,
▇▇▇▇ & ▇▇▇▇▇, counsel for United, to the effect that the transactions
contemplated hereby will result in a reorganization (as defined in Section
368(a) of the Code), and accordingly no gain or loss will be recognized for
federal income tax purposes to United, ▇▇▇▇▇▇▇▇▇▇ or UNB or to the shareholders
of ▇▇▇▇▇▇▇▇▇▇ who exchange their shares of ▇▇▇▇▇▇▇▇▇▇ for United Common Stock
(except to the extent that cash is received in lieu of fractional shares of
United Common Stock).
(e) Form S-8 For Stock Options. United shall have agreed to
file, no later than 15 days after the Closing, a Registration Statement on Form
S-8 to cover any ▇▇▇▇▇▇▇▇▇▇ Stock Options which will continue as United Stock
Options, except for ▇▇▇▇▇▇▇▇▇▇ Stock Options held by persons who were directors
of ▇▇▇▇▇▇▇▇▇▇ or who will not become employees of United or UNB.
6.2. Conditions to the Obligations of United Under this
Agreement. The obligations of United 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 ▇▇▇▇▇▇▇▇▇▇. The representations and warranties of ▇▇▇▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇▇▇▇ shall have
performed in all material respects the agreements, covenants and obligations
necessary 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 ▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule to render such
representation or warranty true and correct as of the Closing Date, the
representation and warranty shall be deemed true and correct as of the Closing
Date only if (i) the information contained in the supplement or amendment to the
Disclosure Schedule related to events occurring following the execution of this
Agreement and (ii) the facts disclosed in such supplement or amendment would not
either alone, or together with any other supplements or amendments to the
▇▇▇▇▇▇▇▇▇▇ Disclosure Schedule, materially adversely effect the representation
as to which the supplement or amendment relates.
(b) Consents. United shall have received the written consents
of any person whose consent to the transactions contemplated hereby is required
under the applicable instrument.
(c) Opinion of Counsel. United shall have received an opinion
of counsel to ▇▇▇▇▇▇▇▇▇▇, dated the date of the Closing, in form and substance
reasonably satisfactory to United covering the matters set forth in Schedule
6.2.
(d) Pooling of Interests. The Merger shall be qualified to be
treated by United as a pooling-of-interests for accounting purposes.
(e) Certificates. ▇▇▇▇▇▇▇▇▇▇ shall have furnished United with
such certificates of its officers or others (without personal liability) and
such other documents to evidence fulfillment of the conditions set forth in this
Section 6.2 as United may reasonably request.
6.3. Conditions to the Obligations of ▇▇▇▇▇▇▇▇▇▇ Under this
Agreement. The obligations of ▇▇▇▇▇▇▇▇▇▇ 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 United. The representations and warranties of United 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. United and UNB shall have
performed in all material respects, the agreements, covenants and obligations to
be performed by them 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 United Disclosure Schedule to render such
representation or warranty true and correct as of the Closing Date, the
representation and warranty shall be deemed true and correct as of the Closing
Date only if (i) the information contained in the supplement or amendment to the
Disclosure Schedule related to events occurring following the execution of this
Agreement and (ii) the facts disclosed in such supplement or amendment would not
either alone, or together with any other supplements or amendments to the United
Disclosure Schedule, materially adversely effect the representation as to which
the supplement or amendment relates.
(b) Opinion of Counsel to United. ▇▇▇▇▇▇▇▇▇▇ shall have
received an opinion of counsel to United, dated the date of the Closing, in form
and substance reasonably satisfactory to ▇▇▇▇▇▇▇▇▇▇, covering the matters set
forth in Schedule 6.3.
(c) Fairness Opinion. ▇▇▇▇▇▇▇▇▇▇ shall have received an
opinion from Finpro as of the date the Proxy Statement/Prospectus is mailed to
▇▇▇▇▇▇▇▇▇▇'▇ stockholders, to the effect that, in its opinion, the consideration
to be paid to stockholders of ▇▇▇▇▇▇▇▇▇▇ hereunder is fair to such stockholders.
(d) Certificates. United shall have furnished ▇▇▇▇▇▇▇▇▇▇ with
such certificates of its officers or others (without personal liability) and
such other documents to evidence fulfillment of the conditions set forth in this
Section 6.3 as ▇▇▇▇▇▇▇▇▇▇ may reasonably request.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. Termination. This Agreement may be terminated prior to
the Effective Time, whether before or after approval of this Agreement by the
stockholders of ▇▇▇▇▇▇▇▇▇▇:
(a) By mutual written consent of the parties hereto.
(b) By United or ▇▇▇▇▇▇▇▇▇▇ (i) if the Effective Time shall
not have occurred on or prior to August 1, 1997, or (ii) if a vote of the
stockholders of ▇▇▇▇▇▇▇▇▇▇ or, if necessary, of United, is taken and such
stockholders fail to approve this Agreement at the meeting (or any adjournment
thereof) held for such purpose, unless in each case 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.
(c) By United or ▇▇▇▇▇▇▇▇▇▇ upon written notice to the other
if any application for regulatory or governmental approval necessary to
consummate the Merger and the other transactions contemplated hereby shall have
been denied or withdrawn at the request or recommendation of the applicable
regulatory agency or governmental authority or by United upon written notice to
▇▇▇▇▇▇▇▇▇▇ if any such application is approved with conditions which materially
impair the value of ▇▇▇▇▇▇▇▇▇▇, taken as a whole, to United, unless any 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 Date.
(d) By United if (i) there shall have occurred a material
adverse change in the business, operations, assets, or financial condition of
▇▇▇▇▇▇▇▇▇▇ from that disclosed by ▇▇▇▇▇▇▇▇▇▇ on the date of this Agreement, or
(ii) there was a material breach in any representation, warranty, covenant,
agreement or obligation of ▇▇▇▇▇▇▇▇▇▇ hereunder.
(e) By ▇▇▇▇▇▇▇▇▇▇, if (i) there shall have occurred a material
adverse change in the business, operations, assets or financial condition of
United, UNB or United and its Subsidiaries on a consolidated basis from that
disclosed by United on the date of this Agreement; or (ii) there was a material
breach in any representation, warranty, covenant, agreement or obligation of
United hereunder.
(f) By United or ▇▇▇▇▇▇▇▇▇▇ if any condition to Closing
specified under Article VI hereof applicable to such party cannot reasonably be
met after giving the other party a reasonable opportunity to cure any such
condition.
(g) By United during the Due Diligence Period if the due
diligence review by United or any Disclosure Schedules provided by ▇▇▇▇▇▇▇▇▇▇
after the date hereof causes United to reach a conclusion about the financial
condition, business, assets or the quality of the representations and warranties
of ▇▇▇▇▇▇▇▇▇▇, adverse from conclusions about the same matters which United's
senior executives held at the time United executed this Agreement; or
(h) By ▇▇▇▇▇▇▇▇▇▇ if the Average Closing Price is less than
$28.50 per share. This amount shall be adjusted for any capital change after the
date hereof, as provided in Section 2.1(c). Provided, however, that (i) United
shall have the right to increase the Exchange Ratio to a number (taken to four
decimal places) such that each Share of ▇▇▇▇▇▇▇▇▇▇ Common Stock is exchanged for
United Common Stock which has a value, based upon the Average Closing Price,
which is as high as the value which would have been received if the Average
Closing Price had been $28.50 and (ii) if United agrees in writing to the
increased Exchange Ratio, at or before the Closing, ▇▇▇▇▇▇▇▇▇▇ shall not have
the right to terminate this Agreement under this paragraph 7.1(h). In order to
calculate the required increase in the Exchange Ratio, the Exchange Ratio shall
be multiplied by a fraction, the numerator of which is $28.50 and the
denominator of which is the Average Closing Price.
122513A01110696
7.2. Effect of Termination. In the event of the termination
and abandonment of this Agreement by either United or ▇▇▇▇▇▇▇▇▇▇ pursuant to
Section 7.1, this Agreement (except the provisions of Section 5.5(b) hereof)
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 mutual action
taken by the parties hereto at any time before or after adoption of this
Agreement by the stockholders of ▇▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇▇ without the
approval of such stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of United and ▇▇▇▇▇▇▇▇▇▇.
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. 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.
8.2. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by telecopier with confirming copy sent the same day by
registered or certified mail, postage prepaid, as follows:
If to United:
United National Bancorp
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
P.O. Box 6000
Bridgewater, New Jersey 08807-0010
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman, President & CEO
With a copy to:
Pitney, ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to ▇▇▇▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President & CEO
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
721 Route 202-206
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
so delivered or telecopied and mailed.
8.3. Parties in Interest. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No assignment of this Agreement may be made
except upon the written consent of the other parties hereto. No person or entity
shall be deemed a third-party beneficiary under this Agreement, other than
current and former directors and officers of ▇▇▇▇▇▇▇▇▇▇ with respect to Section
5.12 hereof.
8.4. Entire Agreement. This Agreement, which includes the
Disclosure Schedules hereto and the other documents, agreements and instruments
executed and delivered pursuant to or in connection with this Agreement,
contains the entire Agreement between the parties hereto with respect to the
transactions contemplated by this Agreement and supersedes all prior
negotiations, arrangements or understandings, written or oral, with respect
thereto.
8.5. 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.
8.6. 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.
8.7. Descriptive Headings. The descriptive headings of this
Agreement are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agreement.
IN WITNESS WHEREOF, United, UNB and ▇▇▇▇▇▇▇▇▇▇ have caused
this Agreement to be executed by their duly authorized officers as of the day
and year first above written.
ATTEST: UNITED NATIONAL BANCORP
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- By: -----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chairman, President and CEO
ATTEST: ▇▇▇▇▇▇▇▇▇▇ BANK
By: /S/ ▇▇▇▇▇▇▇ ▇. DINO /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------- By: -----------------------
▇▇▇▇▇▇▇ ▇. Dino, Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
President and CEO
ATTEST: UNITED NATIONAL BANK
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- By: -----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. Cashier ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chairman, President and CEO
-37-
CERTIFICATE OF ▇▇▇▇▇▇▇▇▇▇ DIRECTORS
Reference is made to the Agreement and Plan of Merger, dated
November 12, 1996 (the "Agreement"), among United National Bancorp, United
National Bank and ▇▇▇▇▇▇▇▇▇▇ Bank. Capitalized terms used herein have the
meanings given to them in the Agreement.
Each of the following persons, being all of the directors of
▇▇▇▇▇▇▇▇▇▇ Bank, agrees to vote or cause to be voted all shares of ▇▇▇▇▇▇▇▇▇▇
Common Stock which are held by such person, or over which such person exercises
full voting control, in favor of the Merger.
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. Dino
/S/ MSGR. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Msgr. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇