UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: November 8, 1999
REPUBLIC NEW YORK CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 1-7436 13-2764867
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
452 Fifth Avenue, New York, New York 10018
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 525-6100
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Item 5. Other Events
This Current Report on Form 8-K is being filed in connection with (a)
definitive agreement dated as of May 10, 1999 (the "Transaction Agreement") of
Republic New York Corporation ("RNYC") and Safra Republic Holdings S.A. ("SRH")
with HSBC Holdings plc ("HSBC") providing for (1) the merger of RNYC with a
wholly owned subsidiary of HSBC in which each outstanding RNYC common share
would be converted into the right to receive $72.00 in cash and (2) a tender
offer for the outstanding ordinary shares of SRH (other than those owned by
RNYC) at $72.00 per share, and (b) the Stockholders Agreement of even date
therewith providing that Saban S.A., the principal stockholder of RNYC, which is
controlled by RNYC's founder, Edmond J. Safra, has irrevocably undertaken to
vote its 29% stockholding in RNYC in favor of the merger and, in addition, to
accept the tender offer in respect of its 20.8% stockholding in SRH.
In order to facilitate the completion of the merger, the parties to the
merger and the Stockholders Agreement have entered into certain amendments to
the above described agreements whereby, in addition to certain revisions in the
timing of the closing of the merger, Mr. Edmond J. Safra, the principal
stockholder of RNYC has agreed (a) to accept a reduction of $450 million in the
aggregate amount he will receive for his stockholdings in RNYC and (b) in
certain events, to certain further adjustments to Mr. Safra's merger
consideration not to exceed $180 million pursuant to an arrangement between Mr.
Safra and HSBC.
This Current Report on Form 8-K incorporates by reference, and is
qualified in its entirety by, the text of the following documents, each of which
is filed as an exhibit hereto: (i) Amendment No. 1 to the Transaction Agreement
and Plan of Merger dated as of November 8, 1999 by and among HSBC Holdings plc,
RNYC Merger Corporation, Republic New York Corporation and Safra Republic
Holdings S.A.; (ii) Amendment No. 1 to the Stockholders Agreement dated as of
November 8, 1999 by and among HSBC Holdings plc, HSBC North America Inc., RNYC
Holdings Limited, Congregation Beit Yaakov, Saban S.A., Edmond J. Safra and
Republic New York Corporation, which includes as Exhibit A, the Merger
Consideration Adjustment Agreement dated as of November 8, 1999 by and among
RNYC Holdings Limited, HSBC Holdings plc and HSBC North America Inc.; and (iii)
RNYC press release dated November 8, 1999 announcing the agreement to proceed
with the acquisition of RNYC and SRH.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Exhibit Description
2 Amendment No. 1 to Transaction
Agreement and Plan of Merger dated
as of November 8, 1999 by and
among HSBC Holdings plc, RNYC Merger
Corporation, Republic New York
Corporation and Safra Republic
Holdings S.A.
9.1 Amendment No.1 to Stockholders
Agreement dated as of November 8,
1999 by and among HSBC Holdings plc,
HSBC North America Inc., RNYC
Holdings Limited, Congregation Beit
Yaakov, Saban S.A., Edmond J. Safra
and Republic New York Corporation.
9.2 Exhibit A to Amendment No. 1 to
Stockholders Agreement, Merger
Consideration Adjustment Agreement
dated as of November 8, 1999 by and
among RNYC Holdings Limited, HSBC
Holdings plc and HSBC North America
Inc.
99 Press release dated November 8, 1999
announcing the agreement to proceed
to complete the proposed acquisition
of RNYC and SRH by HSBC.
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REPUBLIC NEW YORK CORPORATION
By: /s/ William F. Rosenblum, Jr.
--------------------------------------
William F. Rosenblum, Jr.
Senior Vice President
Date: November 8, 1999
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Exhibit Index
Exhibit No. Exhibit Description
2 Amendment No. 1 to Transaction
Agreement and Plan of Merger dated
as of November 8, 1999 by and
among HSBC Holdings plc, RNYC Merger
Corporation, Republic New York
Corporation and Safra Republic
Holdings S.A.
9.1 Amendment No. 1 to Stockholders
Agreement dated as of November 8,
1999 by and among HSBC Holdings plc,
HSBC Americas Inc., RNYC Holdings
Limited, Congregation Beit Yaakov,
Saban S.A., Edmond J. Safra and
Republic New York Corporation.
9.2 Exhibit A to Amendment No. 1 to
Stockholders Agreement, Merger
Consideration Adjustment Agreement
dated as of November 8, 1999 by and
among RNYC Holdings Limited, HSBC
Holdings plc and HSBC North America
Inc.
99 Press release dated November 8, 1999
announcing the agreement to proceed
to complete the proposed acquisition
of RNYC and SRH by HSBC.
Exhibit 2
AMENDMENT NO. 1 TO TRANSACTION AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 1 TO TRANSACTION AGREEMENT AND PLAN OF MERGER,
dated as of November 8, 1999 (this "Amendment"), by and among HSBC Holdings plc,
a public limited company organized and existing under the laws of England
("Parent"), Republic New York Corporation, a Maryland corporation (the
"Company"), Safra Republic Holdings S.A., a societe anonyme organized and
existing under the laws of Luxembourg ("SRH"), and RNYC Merger Corporation, a
Maryland corporation ("Merger Sub").
WHEREAS, Parent, the Company and SRH entered into that certain
Transaction Agreement and Plan of Merger, dated as of May 10, 1999 (the
"Original Agreement");
WHEREAS, Parent, the Company, SRH and Merger Sub entered into
that certain Joinder Agreement, dated as of May 20, 1999 (the "Joinder
Agreement"), whereby Merger Sub became a party to the Merger Agreement (the
Original Agreement, as amended by the Joinder Agreement and this Amendment, the
"Agreement");
WHEREAS, as a condition to, and concurrently with,
the execution of this Amendment, Parent, HSBC North America Inc. ("US Holdco"),
RNYC Holdings Limited, Congregation Beit Yaakov (together with RNYC Holdings
Limited, the "Stockholder"), Saban S.A. (the "Stockholder Parent"),
Mr. Edmond J. Safra and the Company are entering into an Amendment
(the "Stockholder Agreement Amendment") to that certain Stockholders
Agreement, dated as of May 10, 1999 (the "Original Stockholder Agreement"
and, as amended by the Stockholder Agreement Amendment, the "Stockholder
Agreement"), among Parent, the Stockholder, the Stockholder Parent and
Mr. Edmond J. Safra;
WHEREAS, prior to the date hereof the Board of Directors of
the Company has approved and declared advisable the Agreement and has approved
(including for purposes of Sections 3-601 through 3-604 and 3-701 through 3-709
of the General Corporation Law of the State of Maryland (the "MGCL")) the
Stockholder Agreement, upon the terms and subject to the conditions set forth in
the Agreement and the Stockholder Agreement;
WHEREAS, the Board of Directors of SRH has approved the
Agreement and on May 9, 1999 approved the Offer and recommended the Offer, upon
the terms and subject to the conditions set forth in the Original Agreement;
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with this Amendment;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
Section 1. Defined Terms. Capitalized terms used but not
otherwise defined in this Amendment shall have the meanings ascribed thereto
in the Original Agreement or the Joinder Agreement, as applicable.
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Section 2. Amendments to Original Agreement.
(A) Section 1.4(a) of the Original Agreement shall be deleted
in its entirety and the following substituted therefor:
(a) Outstanding Company Common Stock. Each share of
common stock, par value $5.00 per share, of the Company (the
"Company Common Stock") issued and outstanding immediately
prior to the Effective Time (other than shares of Company
Common Stock held (i) in the Company's treasury ("Treasury
Shares") or (ii) directly or indirectly by Parent or the
Company or any of their respective wholly owned Subsidiaries
(except for Fiduciary and DPC Shares (as defined in Section
1.4(d))) shall become and be converted into the right to
receive $72.00 in cash to be paid, without interest thereon,
as provided in Section 1.5(c) (the "Merger Consideration").
(B) Section 1.5(b) and Section 1.5(c) of the Original
Agreement shall be deleted in their entirety and the following substituted
therefor:
(b) From time to time following the Effective Time,
Parent or Merger Sub shall deposit, or shall cause to be
deposited, with a bank or trust company (which may be an
affiliate of Parent or the Company) (the "Exchange Agent"),
for the benefit of the holders of the Certificates, cash
amounts, as instructed by the Exchange Agent (such cash
(without any interest) being hereinafter referred to as the
"Exchange Fund"), to be paid pursuant to this Article I in
exchange for outstanding shares of Company Common Stock
entitled to receive the Merger Consideration; provided, that,
if the Effective Time occurs after December 17, 1999, neither
Parent nor Merger Sub shall be required to deposit, or cause
to be deposited, any cash amounts with the Exchange Agent
before January 7, 2000.
(c) As promptly as practicable after the Effective
Time, Parent shall send or cause to be sent to each former
holder of record of shares of Company Common Stock (other than
shares that are to be canceled pursuant to Section 1.4(d))
immediately prior to the Effective Time, transmittal materials
for use in exchanging such stockholder's Certificates for the
Merger Consideration. Parent shall cause any check in respect
of the Merger Consideration which such Person shall be
entitled to receive to be delivered to such stockholder upon
delivery to the Exchange Agent of Certificates representing
such shares of Company Common Stock (or indemnity reasonably
satisfactory to Parent and the Exchange Agent, if any of such
Certificates are lost, stolen or destroyed) owned by such
stockholder; provided, that if the Effective Time occurs after
December 17, 1999, in no event shall any check be required to
be mailed before January 7, 2000. No interest will be paid on
any such cash to be paid
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pursuant to this Article I upon such
delivery. Parent or its designee shall be entitled to deduct
and withhold from the Merger Consideration otherwise payable
to any holder of Certificates such amounts (if any) as Parent
or such designee determines are required to be deducted or
withheld under the Internal Revenue Code of 1986, as amended
(the "Code"), or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by Parent or
such designee, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder
of such Certificates.
(C) Section 2.1 of the Original Agreement shall be deleted in
its entirety and the following substituted therefor:
2.1 Closing Date. The closing of the transactions
provided for in this Agreement (the "Closing") shall be held
(a) at the offices of Cleary, Gottlieb, Steen & Hamilton, One
Liberty Plaza, New York, New York 10006, at 10:00 A.M. on the
third business day after the satisfaction or waiver (subject
to applicable law) of the latest to be satisfied or waived of
the conditions (other than those conditions to be satisfied at
the Closing) set forth in Sections 8.1, 8.2 and 8.3 hereof;
provided, that if the conditions in Sections 8.1(a), 8.1(b),
8.2(c) and 8.2(f) shall have been satisfied:
(i) prior to December 31, 1999, Parent, in its
sole discretion, by written notice to the Company and SRH
may elect to schedule the Closing for any date after such
conditions have been satisfied through and including
December 31, 1999, but if the date of satisfaction of the
last of the conditions in Section 8.1(a), 8.1(b), 8.2(c)
and 8.2(f) is before December 28, 1999, Parent may
schedule the Closing for a date later than such third
business day only if Parent and Merger Sub irrevocably
agree in such notice that the reference to the Closing
Date in Section 8.2(a) shall be deemed to refer to the
date which is the third business day following
satisfaction of the last to be satisfied of the conditions
in Sections 8.1(a), 8.1(b), 8.2(c) and 8.2(f) (the
"Original Date"); and
(ii) after December 31, 1999, Parent, after
consulting with the Company, may by written notice to the
Company and SRH elect to schedule the Closing for any date
not less than two business days or more than 35 calendar
days after the satisfaction or waiver (subject to
applicable law) of the latest to be satisfied or waived of
the conditions (other than those conditions to be
satisfied at the Closing) set forth in Sections 8.1, 8.2
and 8.3 hereof only if Parent and Merger Sub irrevocably
agree in such notice that the reference to the Closing
Date in Section 8.2(a) shall be deemed
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to refer to the
earlier of the Original Date and the scheduled Closing
Date;
or (b) at such other place and on such other date as shall be
agreed to by the parties hereto. The date on which the Closing
occurs is hereinafter referred to as the "Closing Date." For
the avoidance of doubt, it is expressly understood that
nothing in Section 2.1(a) shall be deemed to modify or require
waiver of the conditions set forth in Sections 8.1(c), 8.2(b),
8.2(d), 8.2(e), 8.2(g) or 8.2(h). Notwithstanding the
provisions of Section 2.1(a)(i) and Section 2.1(a)(ii), if
Parent exercises its right to schedule the Closing pursuant to
the proviso to either Section 2.1(a)(i) or Section 2.1(a)(ii)
and the Effective Time does not occur on such scheduled date
as a result of the failure of the condition in Section 8.2(b),
then the condition in Section 8.2(a) shall be read to refer to
the rescheduled Closing Date, if any, and not to the Original
Date; provided, that if there is a failure of the condition in
Section 8.2(b) and the failure of any other condition (other
than Section 8.3(c)), the failure of the Effective Time to
have occurred shall be deemed to have been caused by the
failure of the condition in Section 8.2(b). If the Effective
Time does not occur on such scheduled Closing Date for any
other reason, Section 8.2(a) shall continue to be interpreted
as referring to the Original Date for purposes of any Closing
which occurs on or before the date specified in Section 9.1(c)
(including any date specified in the proviso to Section
9.1(c)).
(D) Section 7.13 of the Original Agreement shall be deleted in
its entirety and the following substituted therefor:
7.13. The Offer. Provided that this Agreement shall
not have been terminated in accordance with Article IX, Parent
shall, or shall cause Offer Sub to, commence an offer to
acquire all outstanding shares of SRH Common Stock not owned,
directly or indirectly, by the Company at a price of $72.00
per share of SRH Common Stock. Parent shall, and shall cause
Offer Sub to, accept for payment all shares of SRH Common
Stock tendered to Parent or Offer Sub at, or as soon as
possible following, the Effective Time; provided, that Parent
or Offer Sub shall not be required to make payment for, or
mail checks with respect to, tendered shares of SRH Common
Stock until the seventh calendar day following the Effective
Time, but if the Effective Time occurs after December 17, 1999
in no event earlier than January 10, 2000. The obligation of
Parent or Offer Sub to consummate the Offer and to accept for
payment any shares of SRH Common Stock tendered pursuant
thereto shall be subject only to the conditions set forth in
Article VIII to this Agreement and to the prior or concurrent
consummation of the Merger (collectively, the "Offer
Conditions"), which are for the sole benefit of Parent and
Offer Sub and may be asserted by Parent or Offer Sub
regardless of the circumstances
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giving rise to any such
condition, or waived by Parent or Offer Sub in whole or in
part at any time and from time to time prior to acceptance of
shares for payment in its sole discretion; provided, that in
no event shall Parent or Offer Sub purchase (or accept for
purchase) any shares of SRH Common Stock pursuant to the Offer
if the Merger shall not have occurred or concurrently occur.
The Company and SRH agree that no shares of SRH Common Stock
held by the Company, SRH or any of their respective
Subsidiaries will be tendered to Parent or Offer Sub pursuant
to the Offer. Parent and Offer Sub will not, without the prior
written consent of SRH, (i) decrease or change the form of the
consideration payable in the Offer, (ii) decrease the number
of shares of SRH Common Stock sought pursuant to the Offer,
(iii) impose additional conditions to the Offer or change the
Offer Conditions (provided, that Parent or Investor in its
sole discretion may waive any such conditions and, in
connection therewith, substitute a less restrictive condition)
or (iv) make any other change in the terms or conditions of
the Offer which is materially adverse to the holders of the
shares of SRH Common Stock. Notwithstanding the foregoing,
Parent and SRH may, without the consent of the Company or SRH,
(x) extend the Offer, if at the scheduled expiration date of
the Offer any of the Offer Conditions shall not have been
satisfied or waived, until such time as all conditions are
satisfied or waived, (xi) extend the Offer for any period
required by any statute, rule, regulation, interpretation or
position of any Governmental Authority applicable to the
Offer, and (xii) extend the Offer for any reason on one or
more occasions for an aggregate of not more than 15 business
days beyond the latest expiration date that would otherwise be
permitted under clauses (x) and (xi) of this sentence. Subject
to the Offer Conditions and the terms and conditions of this
Agreement, Parent shall, and Parent shall cause Offer Sub to,
accept for payment all shares of SRH Common Stock validly
tendered and not withdrawn pursuant to the Offer as soon as
practicable after the expiration of the Offer; provided, that
Parent or Offer Sub shall not be required to make payment for,
or mail checks with respect to, tendered shares of SRH Common
Stock until the seventh calendar day following the Effective
Time, but if the Effective Time occurs after December 17, 1999
in no event earlier than January 10, 2000.
(E) The following Section 7.15 shall be added to
Article VII of the Original Agreement.
7.15. Insurance. The Company and SRH shall, and shall
cause their respective Subsidiaries to, keep in place and
maintain, and comply with the terms of, all existing insurance
policies, contracts and cover and all agreements and
arrangements with respect to insurance, where the maximum
amount of coverage exceeds $1 million.
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(F) Section 8.2(a) of the Original Agreement shall be shall be
deleted in its entirety and the following substituted therefor:
(a) Representations and Warranties. Subject to
Section 2.3(b), the representations and warranties of the
Company and of SRH set forth in this Agreement (including the
Amendment) shall be true and correct in all respects as of the
Closing Date (except to the extent such representations and
warranties expressly speak as of a specified earlier date, in
which case such representations and warranties shall be true
as of such earlier date) as though made on and as of the
Closing Date; and Parent shall have received certificates
signed on behalf of each of the Company and of SRH by their
respective Chief Executive Officers and Chief Financial
Officers (or, in the case of SRH, the functional equivalent
thereof) to such effect.
(G) Section 8.2 of the Original Agreement shall be amended by
adding the following clause (h) following clause 8.2(g):
(h) Transfer of Company Common Stock to US Holdco.
Immediately prior to the Effective Time and following the
satisfaction or irrevocable waiver of all conditions set forth
in Sections 8.1, 8.2 (other than this Section 8.2(h)) and 8.3
hereof, RNYC Holdings Limited shall have transferred 6,250,000
shares of Company Common Stock to US Holdco in accordance with
the terms of the Stockholder Agreement.
(H) Section 8.3(a) of the Original Agreement shall be deleted
in its entirety and the following substituted therefor:
(a) Representations and Warranties. Subject to
Section 2.3(b), the representations and warranties of Parent
set forth in this Agreement (including the Amendment) shall be
true and correct, as of the Closing Date (except to the extent
such representations and warranties speak as of a specified
earlier date, in which case such representations and
warranties shall be true as of such earlier date) as though
made on and as of the Closing Date; and the Company shall have
received a certificate signed on behalf of Parent by the Group
Financial Director to such effect.
(I) Section 9.1(c) of the Original Agreement shall be deleted
in its entirety and the following substituted therefor:
(c) by either Parent, the Company or SRH if the
Merger shall not have been consummated on or before January
31, 2000, unless the failure of the Closing to occur by such
date shall be due to the failure of the party seeking to
terminate this Agreement to perform or observe the covenants
and agreements of such party set forth herein; provided, that
if all conditions set forth in Sections 8.1, 8.2 and 8.3
(other than those
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conditions to be satisfied at Closing) shall
have been satisfied and Parent elects to schedule the Closing
pursuant to the proviso to Section 2.1(a)(ii), then such date
shall be the date which is 30 calendar days following the date
so scheduled for Closing.
(J) Section 10.6 of the Original Agreement shall be deleted in
its entirety and the following substituted therefor:
10.6 Entire Agreement. The Agreement (including the
Joinder Agreement, the Amendment, the Company Disclosure
Schedule, the SRH Disclosure Schedule, the exhibits attached
to the Agreement and all other documents and instruments
referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the
subject matter hereof other than the Option Agreement, the
Stockholder Agreement and the Confidentiality Agreement;
provided that Section 5 of the Confidentiality Agreement shall
not affect the representations and warranties of any party
hereto.
(K) The definition of "Material Adverse Effect" in Section
10.12(a) of the Original Agreement shall be amended by adding the following
sentences at the end of the definition:
For all purposes of determining whether there has been, or is
reasonably likely to be, a Material Adverse Effect with
respect to the Acquired Companies, all adverse facts,
circumstances or conditions relating to the Princeton Note
Matter (as defined below) of which, as of the date hereof,
Parent or its representatives have been informed of by the
Company or its representatives or Parent otherwise has
Knowledge shall be disregarded. For purposes hereof, the term
"Princeton Note Matter" shall mean the involvement or alleged
involvement and the actions or omissions or alleged actions or
omissions, if any, of Republic New York Securities
Corporation, the Company and their respective officers,
directors, employees and agents with respect to Martin A.
Armstrong, Princeton Global Management Ltd., Princeton
Economics International Ltd., Cresvale International - Tokyo
Branch and all affiliated Persons and any existing effects or
the reasonably foreseeable effects thereof.
Section 3. Representations and Warranties of the Company. The
Company hereby represents and warrants to Parent as follows:
(a) The Company has full corporate power and authority to
execute and deliver this Amendment and to consummate the transactions
contemplated by the Agreement. The execution and delivery of this Amendment and
the consummation of the transactions contemplated by the Agreement have been
duly and validly approved by the Board of Directors
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of the Company prior to the
date hereof (which approval satisfies in full the requirements of the MGCL
regarding approval by a board of directors), and such approval is in full force
and effect. The Board of Directors of the Company has adopted a resolution
declaring advisable the Merger and the other transactions contemplated by the
Agreement. The Board of Directors of the Company has directed that the Agreement
and the transactions contemplated by the Agreement be submitted to the Company's
stockholders for approval at a meeting of such stockholders and, except for the
approval of the Agreement by the affirmative vote of the holders of a majority
of the votes of the outstanding shares of the Company Common Stock entitled to
vote thereon, no other corporate proceedings on the part of the Company and no
other stockholder votes are necessary to approve the Agreement and to consummate
the transactions contemplated thereby. As of the date hereof, the Board of
Directors of the Company has resolved to recommend that the Company's
stockholders approve the Merger. This Amendment has been duly and validly
executed and delivered by the Company and (assuming due authorization, execution
and delivery by Parent, Merger Sub and SRH) constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms. In addition, the Board of Directors has taken all requisite action
such that the freezeout, special shareholder voting and other requirements
imposed by Sections 3-601 through 3-604 and 3-701 through 3-709 of the MGCL, and
the provisions of any other applicable "freezeout", "fair price", "moratorium",
"control share acquisition" or other similar anti-takeover statute or regulation
enacted under state, federal or foreign laws, are not applicable to the Merger,
the Agreement, the Option Agreement or the Stockholder Agreement or the
transactions contemplated by the Agreement, the Option Agreement and the
Stockholder Agreement. No holder of Company Capital Stock shall have the right
to appraisal or to demand or receive payment of the fair value of such Company
Capital Stock from the Successor Corporation or any other Person pursuant to the
MGCL or otherwise.
(b) Neither the execution and delivery of this Amendment by
the Company, nor the consummation by the Company of the Merger, nor compliance
by the Company with any of the terms or provisions of the Agreement, will (i)
violate any provision of the articles of incorporation or bylaws of the Company
or any of its Subsidiaries or (ii) assuming that the consents and approvals
referred to in Section 3.4 of the Agreement are duly obtained, violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets, or violate, conflict with, result in a breach
of any provision of or the loss of any benefit under, 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 or a right of termination or
cancellation under, accelerate the performance required by or rights or
obligations under, or result in the creation of any Lien (or have any of such
results or effects, upon notice or lapse of time, or both) upon any of the
respective properties or assets of the Company or any of its Subsidiaries under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement, contract, or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party, or by which they or any of their respective properties, assets or
business activities may be bound or affected.
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(c) Except as disclosed previously by the Company to Parent
prior to the date of this Amendment, to the Knowledge of the Company there are
no material facts, events, circumstances or occurrences directly or indirectly
relating to the Princeton Note Matter, including any facts, events,
circumstances or occurrences that would impact the measure of any civil or
criminal damages, penalties, fines or other liabilities that might be levied
against, or incurred by, the Company, SRH and any of their respective
Subsidiaries as a result of, or otherwise relating to, the Princeton Note
Matter.
(d) The Company understands and acknowledges that Parent and
Merger Sub are entering into this Amendment in reliance upon the execution,
delivery and performance by the Stockholder, Stockholder Parent, Mr. Edmond J.
Safra and the Company of the Stockholder Agreement Amendment.
Section 4. Representations and Warranties of SRH. SRH hereby
represents and warrants to Parent as follows:
(a) SRH has full power and authority to execute and deliver
this Amendment and to consummate the transactions contemplated by the Agreement.
The execution and delivery of this Amendment and the consummation of the
transactions contemplated by the Agreement have been duly and validly approved
by the Board of Directors of SRH prior to the date hereof (which approval
satisfies in full the requirements of Luxembourg Law regarding approval by a
board of directors), and such approval is in full force and effect. On May 9,
1999, the Board of Directors of SRH recommended to SRH's stockholders to tender
their Shares of SRH Common Stock in the Offer. No other proceeding on the part
of SRH and no stockholder vote is necessary to approve this Amendment or the
Agreement and to consummate the transactions contemplated by the Agreement. This
Amendment has been duly and validly executed and delivered by SRH and (assuming
due authorization, execution and delivery by Parent, Merger Sub and the Company)
constitutes a valid and binding obligation of SRH, enforceable against SRH in
accordance with its terms. In addition, the Board of Directors of SRH has taken
all requisite action such that the provisions of any applicable "freezeout",
"fair price", "moratorium", "control share acquisition" or other similar
anti-takeover statute or regulation, are not applicable to the Merger, the Offer
or the other transactions contemplated by the Agreement.
(b) Neither the execution and delivery of this Amendment by
SRH, nor the consummation by the Company of the Merger or SRH of the Offer, nor
compliance by SRH with any of the terms or provisions of the Agreement, will (i)
violate any provision of the articles of association (or similar documents) of
SRH or any of its Subsidiaries or (ii) assuming that the consents and approvals
referred to in Section 4.4 of the Agreement are duly obtained, violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to SRH or any of its Subsidiaries or any of their
respective properties or assets, or violate, conflict with, result in a breach
of any provision of or the loss of any benefit under, 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 or a right of termination or
cancellation under, accelerate the performance required by or rights or
obligations under, or result in the creation of any Lien (or have any of such
results or effects upon notice or lapse of time, or both) upon any of the
respective properties
9
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or assets of SRH or any of its Subsidiaries under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement, contract, or other instrument or obligation
to which SRH or any of its Subsidiaries is a party, or by which they or any of
their respective properties, assets or business activities may be bound or
affected.
(c) SRH understands and acknowledges that Parent and Merger
Sub are entering into this Amendment in reliance upon the execution, delivery
and performance by the Stockholder, Stockholder Parent, Mr. Edmond J. Safra and
the Company of the Stockholder Agreement Amendment.
Section 5. Representations and Warranties of Parent.
Parent hereby represents and warrants to the Company and SRH as follows:
(a) Parent and Merger Sub have full corporate power and
authority to execute and deliver this Amendment and to consummate the
transactions contemplated by the Agreement.
(b) The consummation of the transactions contemplated by the
Agreement has been duly and validly approved by a duly authorized committee of
the Board of Directors of Parent and by the Board of Directors of Merger Sub. No
other corporate proceedings on the part of Parent and Merger Sub and no vote of
Parent's stockholders are necessary to consummate the transactions contemplated
hereby.
(c) The execution and delivery of this Amendment by Parent and
Merger Sub has been duly and validly authorized in accordance with applicable
law. This Agreement has been duly and validly executed and delivered by Parent
and Merger Sub and (assuming due authorization, execution and delivery by the
Company and SRH) constitutes a valid and binding obligation of Parent and Merger
Sub, enforceable against Parent and Merger Sub in accordance with its terms.
(d) Neither the execution and delivery of this Amendment by
Parent and Merger Sub, nor the consummation by Parent and Merger Sub of the
Merger and the Offer, nor compliance by Parent and Merger Sub with any of the
terms or provisions of the Agreement, will (i) violate any applicable law or the
memorandum and articles of association, certificate of incorporation, bylaws or
other organizational documents of Parent or Merger Sub, as applicable, or (ii)
assuming that the consents and approvals referred to in Section 5.3 of the
Agreement are duly obtained, violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to Parent or
any of its Subsidiaries or any of their respective properties or assets, or
violate, conflict with, result in a breach of any provision of or the loss of
any benefit under, 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 or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any Lien upon any of the respective
properties or assets of Parent or any of its Subsidiaries under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease,
10
<PAGE>
agreement, contract or other instrument or obligation to
which Parent or any of its Subsidiaries is a party, or by which they or any of
their respective properties or assets may be bound or affected.
Section 6. Counterparts. This Amendment may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
Section 7. Governing Law. Except as required by mandatory
provisions of the MGCL, this Amendment shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such state.
Section 8. The Original Agreement. Except as specifically
amended hereby, the Original Agreement shall continue in full force and effect
in accordance with the provisions thereof in existence on the date hereof.
Unless the context otherwise requires, after the date hereof, any reference to
the Original Agreement shall mean the Original Agreement as amended hereby.
11
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IN WITNESS WHEREOF, Parent, Merger Sub, the Company and SRH
have caused this Amendment to be executed by their respective officers thereunto
duly authorized as of the date first above written.
HSBC HOLDINGS PLC
By: /s/ David J. Shaw
---------------------
Name: David J. Shaw
Title: Authorised Signatory
RNYC MERGER CORPORATION
By: /s/ Gerald A. Ronning
-------------------------
Name: Gerald A. Ronning
Title: President
REPUBLIC NEW YORK CORPORATION
By: /s/ Dov C. Schlein
----------------------
Name: Dov C. Schlein
Name: Chairman and
Chief Executive Officer
SAFRA REPUBLIC HOLDINGS S.A.
By: /a/ A. Leigh Robertson
--------------------------
Name: A. Leigh Robertson
Title: General Manager
and Attorney-in-Fact
By: /s/ Claude Marx
-------------------
Name: Claude Marx
Title: Attorney-in-Fact
Exhibit 9.1
AMENDMENT NO. 1 TO STOCKHOLDERS AGREEMENT
This AMENDMENT NO. 1 TO STOCKHOLDERS AGREEMENT (this
"Amendment"), dated as of November 8, 1999, is entered into by and among RNYC
Holdings Limited, a Gibraltar corporation, ("Principal Stockholder"),
Congregation Beit Yaakov (solely as beneficiary of a life estate of Owned Shares
(as defined below) beneficially owned by Principal Stockholder) (together with
Principal Stockholder, the "Stockholder"), Saban S.A., a Panamanian corporation
("Stockholder Parent"), Mr. Edmond J. Safra ("Mr. Safra"), HSBC Holdings plc, an
English public limited company ("Parent"), HSBC North America Inc., a Delaware
corporation ("US Holdco") and, solely for the purposes of Section 3, Section
4(b), Section 4(e), Section 7 and Section 8 of this Amendment and Section 12,
Section 15 and Section 16 of the Agreement (as defined below), Republic New York
Corporation, a Maryland corporation (the "Company").
WHEREAS, the Stockholder, Stockholder Parent, Mr. Safra and
Parent entered into that certain Stockholders Agreement, dated as of May 10,
1999 (the "Original Agreement" and, as amended by this Amendment, the
"Agreement"); and
WHEREAS, simultaneously with the execution of this Amendment,
Parent, RNYC Merger Corporation, a Maryland corporation ("Merger Sub"), Safra
Republic Holdings, S.A., a societe anonyme organized under the laws of
Luxembourg ("SRH"), and the Company, are entering into Amendment No. 1 (the
"Merger Agreement Amendment") to that certain Transaction Agreement and Plan of
Merger, dated as May 10, 1999 (the "Original Merger Agreement" and, as amended
by the Merger Agreement Amendment and the Joinder Agreement (as defined in the
Merger Agreement Amendment), the "Merger Agreement") among Parent, the Company
and SRH; and
WHEREAS, the Merger Agreement provides for, among other
things, the merger of RNYC Merger Corporation, a Maryland Corporation and a
wholly owned subsidiary of US Holdco, with and into the Company; and
WHEREAS, as an inducement and a condition to their entering
into the Merger Agreement Amendment and incurring the obligations set forth in
the Merger Agreement, Parent has required that Stockholder, Stockholder Parent
and Mr. Safra (individually, a "Stockholder Party" and collectively, the
"Stockholder Parties") and the Company enter into this Amendment; and
WHEREAS, as an inducement and a condition to its entering into
the Merger Agreement Amendment and incurring the obligations set forth in the
Merger Agreement, Parent has required the Principal Stockholder to enter into
the Merger Consideration Adjustment Agreement with Parent and US Holdco in the
form attached hereto as Exhibit A and incorporated by reference herein (the
"Adjustment Agreement"); and
WHEREAS, although none of the parties hereto believes, or has
any reason to believe, that any of the Company and the Stockholder Parties is
obligated to enter into this Amendment or, in the case of the Principal
Stockholder, the Adjustment Agreement or effect the Share Transfer (as defined
below) or has any obligation or liability to any Person in connection
<PAGE>
with the
Princeton Note Matter (as defined in the Merger Agreement Amendment), the
Company and the Stockholder Parties are agreeing to enter into this Amendment
and, in the case of the Principal Stockholder, the Adjustment Agreement and to
effect the Share Transfer in order to facilitate consummation of the Merger and
the Offer;
NOW, THEREFORE, in consideration of the foregoing and the
mutual premises, representations, warranties, covenants and agreements contained
herein and in the Merger Agreement, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Certain Definitions. Capitalized terms used but not defined
in this Amendment or the Original Agreement are used in this Amendment with the
meanings given to such terms in the Merger Agreement.
2. Clarification of Obligations. The parties acknowledge and
agree that all references to the "Merger Agreement", the "Merger" and the
"Offer" in the Original Agreement shall be deemed to refer to the Merger
Agreement as amended pursuant to the Joinder Agreement and the Merger Agreement
Amendment and to the terms of the Merger and the Offer as provided for in the
Merger Agreement as so amended. For the avoidance of doubt, the obligations of
the parties provided in the Original Agreement shall apply to the Agreement as
amended by this Amendment.
3. Joinder of US Holdco and the Company. US Holdco and the
Company each hereby agrees to become a party to, and to satisfy all of the
covenants and obligations provided with respect to it in, the Agreement, as if
US Holdco and the Company were each an original party thereto. Parent,
Stockholder, Stockholder Parent and Mr. Safra hereby consent to the joinder of
US Holdco and the Company to the Agreement in accordance with the terms hereof.
4. Amendments to Original Agreement. (a) The definition of
"Proposed Business Combination" in Section 1 of the Original Agreement shall be
deleted in its entirety and the following substituted therefor:
"Proposed Business Combination" means the
transactions contemplated by the Merger Agreement and Section
15 below.
(b) The following definition is added:
"Amendment" means Amendment No. 1 to this Agreement
dated as of November 8, 1999.
(c) Section 5(a) of the Original Agreement shall be deleted in
its entirety and the following substituted therefor:
(a) Stockholder agrees that any additional shares of
Common Stock acquired by it or over which it acquires
Beneficial Ownership, whether pursuant to existing stock
option agreements, warrants or otherwise, shall be subject to
the provisions of this Agreement except Section 15 below.
Stockholder Parent and Mr. Safra each agree that if it or he
should acquire record or Beneficial Ownership of any shares of
2
<PAGE>
Common Stock, the term Stockholder shall be deemed to be
modified to include it or him, as the case may be.
(d) Section 7 of the Original Agreement shall be deleted in
its entirety and the following substituted therefor:
7. Covenant of Stockholder Parties. Each Stockholder
Party agrees that it will take all action necessary to (i)
permit (a) the Transferred Shares (as defined below) to be
transferred pursuant to Section 15 and the remaining Owned
Shares to be acquired in the Merger and (b) the voting of the
Owned Shares in accordance with the terms of this Agreement
and (ii) prevent creditors in respect of any pledge of Owned
Shares from exercising their rights under such pledge.
(e) The following Sections 15 and 16 shall be added to the
Original Agreement:
15. Transfer of 6,250,000 Owned Shares. (a) Upon the
terms and subject to the conditions of this Agreement, in
order to effect a reduction of $450 million in the aggregate
consideration to be received by the Principal Stockholder in
the Merger, after the Merger Agreement and the Merger have
been approved at the Company Meeting and immediately prior to
the Effective Time, and subject to the conditions set forth
below in this Section 15, the Principal Stockholder shall
convey, transfer and assign to US Holdco without consideration
other than Parent's and Merger Sub's entering into the Merger
Agreement Amendment and the Amendment, and US Holdco shall
accept and receive, 6,250,000 shares of Common Stock (the
"Transferred Shares") free of any liens, claims, options,
proxies, voting agreements, security interests and
encumbrances whatsoever (the "Share Transfer"). At the Closing
(as defined in the Merger Agreement), the Stockholder shall
deliver, or cause to be delivered, to US Holdco certificates
for the Transferred Shares, duly endorsed or together with
duly executed stock powers sufficient to transfer ownership of
the Transferred Shares to US Holdco. The Company shall use all
reasonable efforts to effect the transfer of the Transferred
Shares to US Holdco on the Company's stock transfer books
immediately prior to the Effective Time and to take all other
reasonable action to register the transfer of the Transferred
Shares to US Holdco. For the avoidance of doubt, it is agreed
for the purposes of Section 1.4(a) of the Merger Agreement,
that the Transferred Shares will be owned by US Holdco at the
Effective Time.
(b) Conditions Precedent and Subsequent. (i) The
respective obligations of each of the Principal Stockholder,
the Parent and US Holdco to effect the Share Transfer shall be
subject to the satisfaction or waiver in accordance with the
terms of the Merger Agreement of all of the conditions (other
than the condition set forth in Section 8.2(h) of the Merger
Agreement) set forth in Sections 8.1, 8.2 and 8.3 of the
Merger
3
<PAGE>
Agreement and to the parties' intent to consummate the
Merger immediately following the Share Transfer.
(ii) The obligation of Principal Stockholder to
effect the Share Transfer shall be further subject to receipt
of (x) a certificate signed on behalf of the Parent by its
Group Financial Director and on behalf of Merger Sub by an
executive officer pursuant to which Parent and Merger Sub
acknowledge satisfaction or irrevocable waiver of the
conditions (other than the condition set forth in Section
8.2(h) of the Merger Agreement) set forth in Sections 8.1 and
8.2 of the Merger Agreement and (y) a certificate signed on
behalf of the Company by its Chief Executive Officer and on
behalf of SRH by its Chief Executive Officer pursuant to which
the Company and SRH acknowledge satisfaction or irrevocable
waiver of the conditions set forth in Sections 8.1 and 8.3 of
the Merger Agreement.
(iii) In the event the Merger is not consummated as
contemplated by Section 15(b)(i), the Share Transfer shall be
voided and the Transferred Shares shall be returned to the
Principal Stockholder.
16. Indemnification of Mr. Safra. The Company hereby
agrees to, and Parent hereby agrees from and after the
Effective Time to cause the Successor Corporation to,
indemnify, defend and hold harmless, to the fullest extent
permitted by the MGCL, Mr. Safra in connection with the
Princeton Note Matter in the manner and to the same extent as
officers and directors of the Company are entitled to
indemnification pursuant to the currently existing articles of
incorporation and bylaws of the Company and the Merger
Agreement; provided, that nothing in this Section 16 shall be
deemed to limit the obligations of the Principal Stockholder
under Section 15 or of any of the Stockholder Parties under
the Adjustment Agreement, and under no circumstances shall
Parent, the Company, the Successor Corporation or any of their
respective Subsidiaries or affiliates be required to
indemnify, defend or hold harmless any of the Stockholder
Parties or any other Person with respect to the obligations of
the Principal Stockholder under Section 15 or of any of the
Stockholder Parties under the Adjustment Agreement.
5. Representations, Warranties and Covenants of Stockholder
Parties. Each Stockholder Party hereby represents and warrants to, and agrees
with, Parent and US Holdco as follows (it being understood that the
representations and warranties made by Congregation Beit Yaakov are made
severally and only with respect to the Owned Shares held by it):
(a) Such Stockholder Party has all necessary power and authority and legal
capacity to execute and deliver this Amendment and perform its or his
obligations under the Agreement. No other proceedings or actions on the part of
such Stockholder Party are necessary to authorize the execution, delivery or
performance of the Agreement or the consummation of the transactions
contemplated hereby.
4
<PAGE>
(b) This Amendment has been duly and validly executed and delivered by such
Stockholder Party and constitutes the valid and binding agreement of such
Stockholder Party, enforceable against such Stockholder Party in accordance with
its terms except (i) to the extent limited by applicable bankruptcy, insolvency
or similar laws affecting creditors' rights and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The Stockholder Parties are the sole Beneficial Owners of the Owned Shares.
The Stockholder has good and marketable title to all of the Owned Shares, free
and clear of all liens, claims, options, proxies, voting agreements and security
interests, except for (x) liens, claims, options, proxies, voting agreements and
security interests and (y) pledges of Owned Shares previously disclosed to
Parent, in each case, that would not have a material adverse effect on the
ability of the Stockholder Parent to perform its obligations under the Agreement
or prevent the Stockholder from conveying, transferring and assigning the
Transferred Shares to Merger Sub in accordance with the terms of the Agreement.
The Owned Shares constitute all of the capital stock of the Company Beneficially
Owned by any of the Stockholder Parties and none of the Stockholder Parties or
its or his Affiliates is the Beneficial Owner of, or has any right to acquire
(whether currently upon lapse of time, following the satisfaction of any
conditions, upon the occurrence of any event or any combination of the
foregoing) any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for shares of Common Stock.
(d) Stockholder Parent has sole Beneficial Ownership, free and clear of all
liens, claims, options, proxies, voting agreements and security interests, of
all outstanding capital stock of Stockholder. Mr. Safra has Beneficial Ownership
of all of the outstanding capital stock of Stockholder Parent. No other Person
has any right to acquire (whether currently, upon lapse of time, following
satisfaction of any conditions, upon the occurrence of any event, or any
combination of the foregoing) Beneficial Ownership of, any capital stock of
Stockholder or Stockholder Parent or any securities convertible into or
exchangeable or exercisable for shares of any such capital stock.
(e) Neither the execution and delivery of this Amendment by any Stockholder
Party nor the consummation of the transactions contemplated by the Agreement
will (i) conflict with, result in any violation of, require any consent under or
constitute a default (whether with notice or lapse of time or both) by such
Stockholder Party under such Stockholder Party's constituent documents (in the
case of the Stockholder and Stockholder Parent) or any mortgage, bond,
indenture, agreement, instrument or obligation to which such Stockholder Party
is a party or by which such Stockholder Party or by which any of the Owned
Shares are bound; (ii) violate any judgment, order, injunction, decree or award
of any court, administrative agency or governmental body that is binding on such
Stockholder Party; or (iii) constitute a violation by such Stockholder Party of
any law or regulation of any jurisdiction, in each case except for violations,
conflicts or defaults that would not have a material adverse effect on the
ability of any Stockholder Party to perform its obligations under the Agreement.
(f) Each Stockholder Party understands and acknowledges that Parent is entering
into this Amendment in reliance upon the execution, delivery and performance by
the Company and SRH of the Merger Agreement Amendment.
5
<PAGE>
6. Representations and Warranties of Parent and US Holdco. (a)
Parent represents and warrants to the Stockholder Parties that Parent and US
Holdco have full corporate power and authority to execute and deliver this
Amendment and to perform their respective obligations hereunder. The execution,
delivery and performance of this Amendment by Parent and US Holdco will not
constitute a violation of, conflict with or result in a default under, (i) any
contract, understanding or arrangement to which Parent or US Holdco is a party
or by which it is bound or requires the consent of any other Person or any party
pursuant thereto, (ii) any judgment, decree or order applicable to Parent or US
Holdco, or (iii) assuming that the consents and approvals referred to in Section
4.4 of the Merger Agreement are duly obtained, any law, rule or regulation of
any jurisdiction, in each case except for violations, conflicts or defaults that
would not have a material adverse effect on the ability of the Parent or US
Holdco to perform its obligations under the Agreement; and this Amendment
constitutes a legal, valid and binding agreement on the part of Parent and US
Holdco, enforceable against Parent and US Holdco in accordance with its terms,
except as such enforceability may be limited by principles applicable to
creditors' rights generally or governing the availability of equitable relief.
The execution and delivery by Parent and US Holdco of this Amendment and the
consummation by Parent and US Holdco of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors of Parent and US
Holdco, respectively, and no other corporate proceedings on the part of Parent
or US Holdco are necessary to authorize this Amendment or to consummate the
transactions contemplated hereby. This Amendment has been duly and validly
executed and delivered by Parent and US Holdco.
(b) Each of Parent and US Holdco understands and acknowledges
that the Company and the Stockholder Parties are entering into this Amendment in
reliance upon the execution, delivery and performance by the Parent and Merger
Sub of the Merger Agreement Amendment.
7. Representations and Warranties of the Company. The Company
hereby represents and warrants to, and agrees with, Parent and US Holdco as
follows:
(a) The Company has full corporate power and authority to
execute and deliver this Amendment and to consummate the transactions
contemplated by the Agreement. The execution and delivery of this Amendment and
the consummation of the transactions contemplated by the Agreement have been
duly and validly approved by the Board of Directors of the Company prior to the
date hereof, and such approval is in full force and effect. No other corporate
proceedings on the part of the Company are necessary to approve the Agreement
and to consummate the transactions contemplated thereby. This Amendment has been
duly and validly executed and delivered by the Company and (assuming due
authorization, execution and delivery by Parent, US Holdco and the Stockholder
Parties) constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. In addition, the Board of
Directors of the Company has taken all requisite action such that the freezeout,
special shareholder voting and other requirements imposed by Sections 3-601
through 3-604 and 3-701 through 3-709 of the MGCL, and the provisions of any
other applicable "freezeout", "fair price", "moratorium", "control share
acquisition" or other similar anti-takeover statute or regulation enacted under
state, federal or foreign laws, are not applicable to the transfer of the
Transferred Shares to US Holdco or the other transactions contemplated by the
Agreement.
6
<PAGE>
(b) Neither the execution and delivery of this Amendment by
the Company, nor the compliance by the Company with any of the terms or
provisions of the Agreement, will (i) violate any provision of the articles of
incorporation or bylaws of the Company or any of its Subsidiaries or (ii)
assuming that the consents and approvals referred to in Section 3.4 of the
Merger Agreement are duly obtained, violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to the
Company or any of its Subsidiaries or any of their respective properties or
assets, or violate, conflict with, result in a breach of any provision of or the
loss of any benefit under, 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 or a right of termination or cancellation under, accelerate the
performance required by or rights or obligations under, or result in the
creation of any Lien (or have any of such results or effects, upon notice or
lapse of time, or both) upon any of the respective properties or assets of the
Company or any of its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement, contract, or other instrument or obligation to which the
Company or any of its Subsidiaries is a party, or by which they or any of their
respective properties, assets or business activities may be bound or affected.
(c) The Company understands and acknowledges that Parent and
US Holdco are entering into this Amendment in reliance upon the execution,
delivery and performance by the Company and SRH of the Merger Agreement
Amendment.
8. Miscellaneous.
(a) The Agreement (including this Amendment) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
other than the Merger Agreement, the Option Agreement, and the Confidentiality
Agreement; provided that Section 5 of the Confidentiality Agreement shall not
affect the representations and warranties of any party hereto.
(b) EXCEPT TO THE EXTENT THAT MANDATORY PROVISIONS OF THE
MARYLAND GENERAL CORPORATION LAW ARE APPLICABLE, THIS AMENDMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(c) This Amendment may be executed in counterparts, each of
which shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same instrument.
(d) Except as specifically amended hereby, the Original
Agreement shall continue in full force and effect in accordance with the
provisions thereof in existence on the date hereof. Unless the context otherwise
requires, after the date hereof, any reference to the Original Agreement shall
mean the Original Agreement as amended hereby.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
RNYC HOLDINGS LIMITED HSBC HOLDINGS PLC
By:_______________________ By: /s/ David J. Shaw
----------------------
Name: Name: David J. Shaw
Title: Title: Authorised Signatory
By: /s/ George J. Gillespie III
- --------------------------------
Name: George J. Gillespie III
Title: Attorney-In-Fact HSBC NORTH AMERICA INC.
CONGREGATION BEIT YAAKOV
By: /s/ Gerald A. Ronning
By: /s/ Walter H. Weiner --------------------------
- ------------------------- Name: Gerald A. Ronning
Name: Walter H. Weiner Title: President
SABAN S.A. REPUBLIC NEW YORK CORPORATION
By:_______________________ By: /s/ Dov C. Schlein
Name: -----------------------
Title: Name: Dov C. Schlein
Title: Chairman and
Chief Executive
Officer
By: /s/ George J. Gillespie III
- --------------------------------
Name: George J. Gillespie III
Title: Attorney-In-Fact
EDMOND J. SAFRA
By: /s/ George J. Gillespie III
- --------------------------------
George J. Gillespie III
Attorney-In-Fact
Exhibit 9.2
[Exhibit A to Amendment No. 1 to Stockholders Agreement]
MERGER CONSIDERATION ADJUSTMENT AGREEMENT dated as of November 8, 1999 (this
"Agreement"), among RNYC Holdings Limited, a Gibraltar corporation ("Principal
Stockholder"), HSBC Holdings plc, an English public limited company ("HSBC") and
HSBC North America Inc., a Delaware corporation ("US Holdco").
WHEREAS HSBC, Republic New York Corporation, a Maryland
corporation ("the Company") and Safra Republic Holdings S.A., a Luxembourg
societe anonyme ("SRH"), have entered into a Transaction Agreement and Plan of
Merger dated as of May 10, 1999 (as amended by the Joinder Agreement dated as of
May 20, 1999 and by Amendment No. 1 to the Transaction Agreement and Plan of
Merger dated as of the date hereof (the "Merger Amendment Agreement")) (the
"Merger Agreement"), providing for, among other things, the merger of a wholly
owned subsidiary of US Holdco with and into the Company (the "Merger"),
following which the Company will be a wholly owned subsidiary of US Holdco;
WHEREAS Saban S.A., the Principal Stockholder, Congregation
Beit Yaakov, Mr. Edmond J. Safra ("Mr. Safra"), HSBC and US Holdco entered into
a stockholder agreement dated as of May 10, 1999 (as amended by Amendment No. 1
to Stockholders Agreement dated as of the date hereof) (the "Stockholders
Agreement") relating to the Merger;
WHEREAS the Principal Stockholder and its affiliates own
approximately 29.5% of the outstanding common stock of the Company and will be
entitled to the consideration specified in the Merger Agreement upon
consummation of the Merger Agreement;
WHEREAS as an inducement and a condition to its entering into
the Merger Amendment Agreement and incurring the obligations set forth in the
Merger Agreement, HSBC has required the Principal Stockholder to enter into this
Agreement; and
WHEREAS, although none of the parties hereto believes, or has
any reason to believe, that any Principal Stockholder Entity has any obligation
or liability to any Person in connection with the Princeton Note Matter (as
defined in the Merger Agreement), the parties hereto are executing and
delivering this Agreement in order to assist with the consummation of the Merger
and the other transactions contemplated by the Merger Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the obligations and
agreements contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used but not
defined in this Agreement shall have the respective meanings assigned to such
terms in the Merger Agreement. In addition, for purposes of this
Agreement:
"Account" means the account for the benefit of the Principal
Stockholder held at HSBC, its direct or indirect Subsidiary, or a branch of
either located or acting outside of the United States, designated by the
Principal Stockholder and reasonably acceptable to HSBC.
"Ancillary Expenses" means all legal fees, costs and expenses,
and investigative costs, incurred by any Relevant Party principally, directly or
indirectly, with respect to any claim involving or related to the Princeton Note
Matter, calculated on a pre-tax basis.
"Claim" means an amount of Losses for which a reduction in the
Merger Consideration (calculated in accordance with this Agreement) is sought to
be effected pursuant to a Request for Adjustment.
"Losses" means all losses, liabilities, claims, fines,
penalties, damages (including, without limitation, punitive and exemplary
damages and treble damages) and expenses (but (i) excluding legal fees, costs or
expenses, or investigative costs, incurred by any Relevant Party and (ii)
including indemnity payments (including indemnity payments with respect to legal
fees, expenses and investigative costs incurred by any Person required to be
indemnified under currently existing obligations by any Relevant Party) other
than indemnity payments under Section 16 of the Stockholder Agreement), suffered
or incurred by settlement, judgment or otherwise by any Relevant Party on a
pre-tax basis to the extent arising principally, directly or indirectly, from
any claim, action or proceeding involving or relating to the Princeton Note
Matter whether directly or by virtue of any obligation to so indemnify a Person;
in each case net of any net amounts received under currently existing insurance
policies or as a result of counterclaims, rights of set-off or similar
recoveries ("Offset") principally, directly or indirectly related to the
Princeton Note Matter.
"Principal Stockholder Entities" means any of (a)
notwithstanding any other provisions of this definition
<PAGE>
3
or this Agreement, Mr.
Safra in any capacity (b) the Principal Stockholder or its affiliates or any of
their respective officers, directors, employees, stockholders and controlling
persons (including, without limitation to the generality, Saban S.A.) agents and
representatives, but excluding for the purposes of this clause (b) any
individual who is an officer, director, employee, agent or representative of a
Relevant Party when acting in his or her capacity as such. For the purpose of
this definition, "affiliates" of the Principal Stockholder shall not include the
Company or SRH or any of their respective direct or indirect Subsidiaries.
"Relevant Party" means the Company or any of its Subsidiaries
(including, without limitation, Republic New York Securities Corporation).
"Request for Adjustment" means a notice substantially in the
form of Exhibit A hereto delivered by US Holdco to the Principal Stockholder
pursuant to Section 5 hereof, which shall be executed by the President, the
Chief Executive Officer, or the Chief Financial Officer of US Holdco.
"taxes" shall mean all taxes, however denominated, including
any interest or penalties that may become payable in respect thereof, imposed by
any United States federal, state, local or non-United States ("foreign")
government or any agency or political subdivision of any such government, which
taxes shall include, without limiting the generality of the foregoing, all
income taxes (including, but not limited to, United Kingdom or United States
federal income taxes and state and local income taxes), excise taxes,
environmental taxes, franchise taxes, gross receipts taxes, value added taxes,
stamp taxes, transfer taxes, withholding taxes, and other obligations of the
same or of a similar nature and tax and taxation and similar terms shall be
construed accordingly.
"Taxpayer" means HSBC and its affiliate entities including
without limitation any Relevant Party.
SECTION 2. Termination. This Agreement shall terminate
automatically, without any action by the parties hereto, if the Merger Agreement
terminates prior to the Effective Time or if the Merger Agreement is amended in
a manner adverse to the Principal Stockholder without the Principal
Stockholder's consent.
<PAGE>
4
SECTION 3. Account Arrangements. (a) The Principal Stockholder
hereby instructs US Holdco, on the Principal Stockholder's behalf, to deposit in
the Account $180,000,0000 of the Merger Consideration to which it is entitled
under the Merger Agreement on the date on which such $180,000,000 would
otherwise have been paid to the Principal Stockholder. The Principal Stockholder
hereby agrees that it shall on delivery of the Certificates representing Company
Common Stock to the Exchange Agent direct the Exchange Agent to so deposit such
$180,000,000 of the Merger Consideration into the Account.
(b) The parties agree to treat the Principal Stockholder as
the beneficial owner of the Account, including any income derived from the
Account, for income tax purposes. Any withdrawal by US Holdco from the Account
or any payment made by the Principal Stockholder to US Holdco under the terms of
this Agreement shall be treated as a decrease in the Merger Consideration paid
by US Holdco to the Principal Stockholder and as not taxable to US Holdco or
HSBC. Any payment into the Account (other than the payment contemplated by
Section 3(a)) or to the Principal Stockholder by US Holdco under the terms of
this Agreement shall be treated as an increase in the Merger Consideration paid
by US Holdco to the Principal Stockholder.
(c) The Account shall bear interest for each six month period
at the London InterBank Offered Rate as quoted by HSBC at the beginning of each
six month period for accounts of a similar size. Such interest shall be credited
to the Account at the end of each six month period and shall be paid promptly
thereafter to the Principal Stockholder or its designee.
SECTION 4. Adjustment of Merger Consideration. (a) Subject to
Sections 4(b) to 4(i) (inclusive) and Section 5, from time to time following the
Effective Time, US Holdco may withdraw from the Account, amounts equal to 60% of
the first $300,000,000 of Losses incurred after the time that Losses and
Ancillary Expenses exceed $700,000,000 (calculated on a pre-tax basis), but in
no event more than $180,000,000 (the "Total Amount").
(b) The Principal Stockholder will not have any liability with
respect to the Princeton Note Matter under this Agreement or otherwise in excess
of the Total Amount and any obligation of the Principal Stockholder under this
Agreement shall be satisfied solely out of the Account.
(c) Except as otherwise specifically provided in this
Agreement and Section 15 of the Stockholders Agreement,
<PAGE>
5
HSBC and US Holdco each
acknowledges that it and its Subsidiaries, and to the full extent that HSBC or
US Holdco has the legal authority to do so, their respective officers,
directors, employees, stockholders (in their capacity as such) and
representatives will have no remedy against any Principal Stockholder Entity
with respect to any and all Losses arising directly or indirectly out of or
relating to the Princeton Note Matter. In furtherance of the foregoing, HSBC and
US Holdco each agrees, on behalf of itself and its Subsidiaries, and to the full
extent that either has the legal authority to do so, their respective officers,
directors, employees, stockholders (in their capacity as such) and
representatives, to waive any and all rights, claims and causes of action they
may have against any Principal Stockholder Entity, arising out of or relating
directly or indirectly to the Princeton Note Matter. Except in the case of any
Principal Stockholder Entity nothing herein is intended to waive any rights the
Company, US Holdco or HSBC (or any of their respective Subsidiaries) may have
against any other Person or any such Person in any other capacity.
(d) The final amount of the adjustment to the Merger
Consideration resulting from any Loss and US Holdco's right to withdraw from the
Principal Stockholder's Account provided under this Section 4 shall be (i)
increased to take account of any net tax cost incurred by the Taxpayer arising
from the receipt of payments hereunder (grossed up for such increase) and (ii)
reduced to take account of any net tax benefit actually realized by the Taxpayer
arising from the incurrence or payment of any such Loss. In computing the amount
of any such tax cost or tax benefit, the Relevant Parties shall be deemed to
recognize all other items of income, gain, loss deduction or credit before
recognizing any item arising from the receipt of any payment hereunder or the
incurrence or payment of any Loss; provided, however, that in calculating the
tax benefit in respect of any Loss, the deductibility or other tax effect of all
Losses in the aggregate will be allocated among such Losses on a pro-rata basis.
The amount of a tax benefit shall be determined on the date that the Taxpayer
receives an actual reduction in its tax liability (including a reduction in
estimated tax payments) and shall be subject to adjustment pursuant to the
remainder of this Section 4 if such tax benefit subsequently increases or
decreases.
(e) The Taxpayer shall claim a tax deduction (or, without
limitation, any other available tax benefits) for any Losses, without regard to
the adjustment to Merger Consideration made pursuant to this Agreement, except
to the extent that the Taxpayer has received an opinion of its
<PAGE>
6
independent tax
advisor that there would not be substantial authority for the claiming of such
deduction or other benefit. If the Taxpayer incurs a Loss prior to actually
realizing any tax benefit from such Loss, then the Claim shall initially be for
the full amount arising from the incurrence or payment of such Loss without
regard to any potential tax benefit from such Loss. However, if and to the
extent the Taxpayer actually realizes a tax benefit arising from the incurrence
or payment of such Loss under the principles of Section 2(d) then US Holdco
shall reimburse the Account at such time, or, if subsequent to the closure of
the Account, pay such amount to the Principal Stockholder or its designee. In
the event that a final determination is made whereby a tax benefit described in
the preceding sentence subsequently is disallowed, US Holdco may withdraw the
appropriate amount from the Account.
(f) If (i) the Taxpayer claims a tax benefit in respect of any
Loss, (ii) such claimed tax benefit reduces the amount to be repaid to US Holdco
from the Account under the terms of this Agreement, and (iii) a taxing authority
subsequently claims that such tax benefit was not available to the Taxpayer, the
Taxpayer will contest such contention; provided, however, that the Taxpayer
shall not be required to pursue a judicial proceeding to challenge such
contention if it has received an opinion of its independent tax advisor that it
is not at least more likely than not that the Taxpayer will succeed in the
contest.
(g) Subject to Section 4(h), US Holdco's right to deliver a
Request for Adjustment and to cause an adjustment to the Merger Consideration
pursuant to this Agreement shall end on the Termination Date. The Termination
Date shall be the third anniversary of the Closing Date unless at such date (i)
US Holdco has been notified of claims, demands or proceedings against any
Relevant Party or any Person required to be indemnified by any Relevant Party
under currently existing obligations that it reasonably believes could result in
an adjustment to the Merger Consideration pursuant to this Agreement or US
Holdco reasonably believes such claims, demands or proceedings will be asserted
or instituted or (ii) the amount of the adjustment to the Merger Consideration
resulting from any Loss has been reduced pursuant to Section 4(d) or (e) to
reflect a deduction or other tax benefit which is still subject to disallowance
and which US Holdco reasonably believes is reasonably likely to be challenged by
a relevant tax authority, in either of which events US Holdco may extend the
Termination Date for up to one year by delivering a written notice to the
Principal Stockholder signed by the President, Chief Executive Officer or Chief
Financial
<PAGE>
7
Officer of US Holdco to such effect and stating the extended
Termination Date. The extension right of the preceding sentence also may be
exercised with respect to any extended Termination Date, except that the
Termination Date shall not in any event be extended beyond the sixth anniversary
of the Closing Date.
(h) On the Termination Date, as it may have been extended
pursuant to Section 4(g), US Holdco shall deliver to the Principal Stockholder a
Certificate signed by the President, Chief Executive Officer or Chief Financial
Officer of US Holdco specifying (i) the unresolved actually instituted and
pending claims, demands or proceedings that could result in an adjustment to the
Merger Consideration pursuant to this Agreement, (ii) any Claim as to which
there is a dispute between the parties as to which US Holdco has delivered a
Request for Adjustment prior to the Termination Date, (iii) deductions or other
the tax benefits which have reduced the adjustment to the Merger Consideration
resulting from the amount of any Loss pursuant to Section 4(d) or (e) which are
still subject to disallowance and which US Holdco reasonably believes are
reasonably likely to be challenged by a relevant tax authority (the items
described in (i), (ii) and (iii) being called "Continuing Claims"), and (iv) the
amount remaining in the Account that US Holdco reasonably and in good faith
believes should be available to protect its rights to adjust the Merger
Consideration pursuant to this Agreement (the "Required Amount"). US Holdco's
right to deliver a Request for Adjustment and to adjust the Merger Consideration
pursuant to this Agreement after the Termination Date shall continue only with
respect to such Continuing Claims. Any amount held in the Account in excess of
the Required Amount will be paid to the Principal Stockholder or its designee
promptly after the Termination Date. To the extent any Continuing Claim is
resolved in a manner resulting in a Loss (or in the increase of a Loss), US
Holdco may withdraw from the Account an amount with respect to such Loss in
accordance with this Agreement as it applied to Losses prior to the Termination
Date. Upon final resolution of all Continuing Claims or, if there are not any
Continuing Claims at the Termination Date, after the Termination Date, all
remaining amounts in the Account will be paid promptly to the Principal
Stockholder or its designee and the Account will be closed.
(i) After the third anniversary of the Closing Date, US Holdco
shall periodically (and not less frequently than on each anniversary of the
Closing Date) determine whether the amount in the Account exceeds the amount US
Holdco reasonably and in good faith believes should be available to protect US
Holdco's right to adjust the Merger
<PAGE>
8
Consideration in accordance with this
Agreement, and, in the event it is so determined, the amount of any excess shall
be released to the Principal Stockholder or its designee.
SECTION 5. Adjustment Procedures. (a) In order for US Holdco
to effect a withdrawal from the Account under Section 4, US Holdco must deliver
a Request for Adjustment to the Principal Stockholder in the manner specified by
Section 6 and such Request for Adjustment must contain all applicable
information and representations and warranties required thereby.
(b) Unless the Principal Stockholder raises an objection to
the Claim described in such Request for Adjustment pursuant to Section 5(c), US
Holdco may withdraw no earlier than the day that is 30 days after the Request
for Adjustment was delivered in the manner specified by Section 6 an amount
equal to the amount of the Claim in such Request for Adjustment. US Holdco shall
not withdraw any amount from the Account if the Principal Stockholder has raised
any objections to the Claim made in the Request for Adjustment pursuant to
Section 5(c) until such time as such objections have been resolved pursuant to
Section 7(g) or otherwise.
(c) The Principal Stockholder may object to any Claim made in
such Request for Adjustment by notifying US Holdco of such objection no later
than the day that is 30 days after the Request for Adjustment has been delivered
in the manner specified by Section 6, except that the Principal Stockholder may
only so object for the following reasons:
(i) the Request for Adjustment is not in all material respects
in compliance with the requirements of Section 5(a) above;
or
(ii) the representations contained in the Request for
Adjustment are not accurate in all material respects.
(d) Any dispute that arises as a result of an objection raised
by the Principal Stockholder pursuant to Section 5(c) shall not constitute or
give rise to a Loss of any Relevant Party in respect of such dispute.
(e) After the Effective Time through the Termination Date, US
Holdco will provide quarterly written reports in reasonable detail as to all
matters about which it is aware (after making reasonable inquiry of Relevant
Parties) that is or may become subject to the provisions of
<PAGE>
9
this Agreement;
provided such reports shall not include any information the inclusion of which
in the good faith opinion of US Holdco's counsel threatens to constitute a
waiver of the attorney-client privilege, work product doctrine or other
protection from compulsory disclosure. On the request of the Principal
Stockholder the parties shall enter into a joint defense agreement or similar
arrangement to the extent that, in the good faith opinion of US Holdco's
counsel, such agreement or arrangement would be enforceable against adverse
Persons.
SECTION 6. Notices. All notices or other communications
required or permitted to be given hereunder shall be in writing and shall be
delivered by hand or sent by facsimile, or sent, postage prepaid, by registered,
certified or express mail, or overnight courier service and shall be deemed
given when received, as follows:
(a) if to the Principal Stockholder, to:
RNYC Holdings Limited
Neptune House
Marina Bay
Gibraltar
Attention: The Company Secretary
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Rory Millson
Philip A. Gelston
Fax: (212) 474-3700
(b) if to HSBC, to:
HSBC Holdings plc
10 Lower Thames Street
London EC3R 6AE
United Kingdom
Attention: Group Company Secretary
Fax: 011-44-171-260-8249
<PAGE>
10
with a copy to:
Cleary Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, NY 10006
Attention: James F. Munsell, Esq.
Victor I. Lewkow, Esq.
Fax: (212) 225-3999
(c) if to US Holdco, to:
HSBC North America Inc.
1 HSBC Center
Buffalo, NY 14203
Attention: General Counsel
Fax: (716) 841-5391
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, NY 10006
Attention: James F. Munsell, Esq.
Victor I. Lewkow, Esq.
Fax: (212) 225-3999
SECTION 7. Miscellaneous. (a) This Agreement and the rights
and obligations hereunder shall not be assignable or transferable by any party
without the prior written consent of the other parties hereto; provided,
however, that the rights and obligations of US Holdco may be assigned by
operation of law in respect of any merger or consolidation of US Holdco with the
Company, or any of HSBC's wholly-owned Subsidiaries. Any attempt to assign or
transfer in violation of this Section 7(a) shall be void.
(b) This Agreement is for the sole benefit of the parties
hereto and their permitted assigns and nothing herein expressed or implied shall
give or be construed to give to any person, other than the parties hereto and
such assigns, any legal or equitable rights hereunder.
(c) This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party.
<PAGE>
11
(d) This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to such subject
matter.
(e) If, and to the extent that any Relevant Party receives an
Offset not previously taken into account in determining the amount of Losses,
then US Holdco shall reimburse the Account, or, if subsequent to the closure of
the Account, pay the Principal Stockholder or its designee, an amount accounting
for such Offset (i.e., reflecting a recalculation the Losses incurred and
relevant to an adjustment hereunder that gives effect to such Offset). In
determining the effect of any Offset on the adjustments to the Merger
Consideration made under this Agreement, any Offset that can be specifically
linked to a particular Loss shall be applied against such Loss, any Offset that
cannot be specifically linked to a particular Loss but can be specifically
linked to a particular party shall be applied pro rata to all Losses
attributable to such party and all other Offsets shall be applied pro rata to
all Losses incurred.
(f) This Agreement shall be governed by and construed in
accordance with English law.
(g) (I) Any dispute, controversy or claim arising out of,
relating to or in connection with this Agreement, including, without limitation,
any dispute regarding its validity, or the performance or breach thereof, shall
be finally settled by arbitration administered by the American Arbitration
Association ("AAA"). The arbitration shall be conducted in accordance with the
International Arbitration Rules of the AAA in effect at the time of the
arbitration ("AAA Rules"), except as they may be modified herein or by agreement
of the parties. The place of arbitration shall be New York, New York.
(II) The arbitration shall be commenced by the service by one
party of a notice of arbitration in accordance with the AAA Rules. The
arbitration shall be conducted by a tribunal composed of three arbitrators. Each
of the Principal Stockholder and HSBC shall appoint one arbitrator and deliver
written notification of such appointment to the other parties and to the AAA
within thirty days of the date on which the arbitration commenced. In the event
either the Principal Stockholder or HSBC fails to deliver notification of its
appointment of an arbitrator to the other parties within such thirty-day period,
upon request of either the Principal Stockholder or HSBC the AAA
<PAGE>
12
shall appoint
such arbitrator within thirty days of the AAA's receipt of such request. The two
arbitrators appointed in accordance with the above provisions shall appoint the
third arbitrator and notify the parties in writing of such appointment within
thirty days of their appointment (or within thirty days of the appointment of
the second of them if the two appointments have not been simultaneous). If the
first two appointed arbitrators fail to notify the parties of the appointment of
the third arbitrator within such thirty-day period, then upon request of either
the Principal Stockholder or HSBC the AAA shall appoint the third arbitrator
within thirty days of the AAA's receipt of such request. The third arbitrator
shall serve as chairman of the tribunal.
(III) The arbitration proceedings shall be concluded within
120 days from the date the chairman of the tribunal has been appointed, and the
tribunal shall use its best efforts to issue the final award within fifteen days
after closure of the proceedings. The tribunal may extend these time limits only
if it determines that the interest of justice so requires. Each party agrees
that in the event the tribunal determines that such party breached Section 4 or
Section 5 in any material respect such party shall be obligated to reimburse the
other party for the fees and expenses (including reasonable attorney's fees and
expenses) incurred by such other party in connection with such breach and the
litigation relating to such breach.
(IV) The award rendered by the tribunal shall be final and
binding on the parties. Judgment on the award may be entered in any court of
competent jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
RNYC Holdings Limited,
by /s/George J. Gillespie III
------------------------------
Name: George J. Gillespie III
Title: Attoeney-In-Fact
HSBC NORTH AMERICA, INC.,
by /s/ Gerald A. Ronning
-------------------------
Name: Gerald A. Ronning
Title: President
HSBC HOLDINGS PLC,
by /s/ David Shaw
------------------
Name: David Shaw
Title: Authorised Signatory
<PAGE>
EXHIBIT A
REQUEST FOR ADJUSMENT
To: RNYC Holdings Limited
[Address]
Attention: [ ]
On behalf of HSBC North America Inc. ("US Holdco"), we hereby
notify you of a claim (the "Claim") for Losses to be withdrawn from the Account
under Section 4 of the Merger Consideration Adjustment Agreement dated as of
November 7, 1999 among RNYC Holdings Limited, HSBC Holdings plc and US Holdco
(the "Merger Consideration Adjustment Agreement"). Terms used but not defined in
this Request shall have the meanings assigned to such terms in the Merger
Consideration Adjustment Agreement.
In accordance with Section 5 of the Merger Consideration
Adjustment Agreement, the Company hereby represents and warrants as follows:
1. Amount. The amount of the Claim is $[ ].
2. Basis for Claim. Attached as Annex A hereto is a full,
complete and accurate description in all material respects, together with any
material applicable underlying documents (including, without limitation, court
orders, settlement agreements, fines and bills) of the factual circumstances
giving rise to the Losses to which the Claim relates.
3. Adjustment Limit. The Claim is being made subject to the
limits contained in Section 4 of the Merger Consideration Adjustment Agreement.
The payment of this Claim by RNYC Holdings Limited will not exceed any limits
<PAGE>
contained in Section 4 of the Merger Consideration Adjustment Agreement.
HSBC NORTH AMERICA INC.,
by -----------------------
Name: [ ]
Title:
Exhibit 99
Republic New York Corporation
News Release
For Immediate Release Press Contact: Melissa M. Krantz (212) 525-3800
NYSE Symbol: RNB nvestor Contact: Michael G. Levine(212) 525-8870
To request release by email:[email protected]
Press Releases: http://www.rnb.com
HSBC PLANS TO PROCEED WITH ACQUISITIONS OF REPUBLIC NEW YORK
CORPORATION AND SAFRA REPUBLIC HOLDINGS S.A.
New York, November 8, 1999: HSBC Holdings plc ("HSBC"), Republic New York
Corporation ("RNYC") and Safra Republic Holdings S.A. ("SRH") and Mr. Edmond J.
Safra ("Mr. Safra") have reached agreement to proceed to complete the proposed
acquisitions of RNYC and SRH by HSBC. Subject to regulatory approvals and RNYC
shareholder approval being obtained and the fulfillment of other conditions,
closing is targeted to take place by year-end. Supplemental proxy materials will
be mailed to RNYC stockholders later this week in connection with the adjourned
RNYC stockholders meeting scheduled for November 30, 1999 to consider the
transaction.
Under the agreement, Mr. Safra personally will accept a reduction of US$ 450
million in the aggregate amount he will receive for his shareholdings in RNYC.
(Mr. Safra holds, through corporate interests, shares representing 29 percent
and 21 percent of the issued share capital of RNYC and SRH respectively.) For
other shareholders the financial terms of the acquisitions remain unaltered at
US$ 72 per share for each of RNYC and SRH. Mr. Safra has also confirmed his full
support for the integration of RNYC and SRH into the HSBC Group and has
undertaken to assist personally in ensuring a smooth transition for existing
clients and in the establishment of a new, international private banking brand
to be named HSBC Republic.
Mr. Safra, commenting on the unprecedented act of personally accepting US$ 450
million less for his interest in RNYC, said, "I am taking this action because I
believe that a swift completion of the transaction will be to the benefit of
Republic's clients, shareholders and employees to whom my life's work has been
devoted."
Arrangements have also been agreed between HSBC and Mr. Safra, the effect of
which is that, should certain potential liabilities arising from the Princeton
Note situation result in losses to RNYC that exceed an agreed amount, Mr. Safra
would bear a portion of such excess losses, up to US$ 180 million of such excess
losses.
Mr. Safra added, "Both Republic and HSBC have always acted to maintain the
highest reputations for their institutions. This is just one more example of the
character of both organizations. I am excited for our clients and employees who,
after this transaction, will have access to all the resources of one of the
strongest financial institutions in the world. Not only will I become a major
client of HSBC, but I also intend to take an active role in ensuring a smooth
transition for all our existing clients."
<PAGE>
HSBC Group Chairman, Sir John Bond, said, "I am pleased that, after a period of
uncertainty, we have found a way forward. We have the greatest admiration for
Edmond Safra taking personal action which embodies the spirit and integrity of
Edmond and the franchise he has built.
"When we announced our intention to acquire RNYC and SRH in May this year we
described the benefits to HSBC customers and shareholders of effectively
doubling our international private banking business and extending significantly
our US domestic personal and commercial banking business. The alleged
irregularities which have delayed closing the acquisition occurred in a division
of a securities subsidiary which was unrelated to the core businesses of RNYC
and SRH. The strategic reasons for the acquisitions going ahead remain
compelling."
###
