SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A-1
Under the Securities Exchange Act of 1934
Republic New York Corporation
(Name of Issuer)
Common Stock, Par Value $5.00 Per Share
(Title of Class of Securities)
760719104
(CUSIP Number)
Richard E. T. Bennett
General Manager and Group Legal Adviser
HSBC Holdings plc
10 Lower Thames Street
London EC3R 6AE
United Kingdom
44-171-260-0926
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 8, 1999
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box: [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
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HSBC Holdings plc ("HSBC") hereby amends as set forth below its Statement
on Schedule 13D filed on May 19, 1999 relating to the common stock, par value
$5.00 per share (the "RNYC Common Stock"), of Republic New York Corporation
("RNYC") (such Statement on Schedule 13D, the "Schedule 13D"). All capitalized
terms used in this Amendment and not otherwise defined herein have the meanings
ascribed to such terms in the Schedule 13D.
Item 4. Purpose of Transaction
Item 4 is supplemented as follows:
A press release issued by HSBC on November 8, 1999 is attached hereto as
Exhibit 99.4 and is also incorporated herein by reference.
As of November 8, 1999, the Stockholder, Saban S.A., Mr. Edmond J. Safra,
RNYC, HSBC and HSBC North America Inc. ("US Holdco") entered into Amendment No.
1 to the Stockholders Agreement (the "Stockholders Agreement Amendment"). The
Stockholders Agreement Amendment is attached hereto as Exhibit 99.5 and is
incorporated herein by reference.
Also as of November 8, 1999, HSBC, RNYC Merger Corporation, RNYC and SRH
entered into Amendment No. 1 to the Merger Agreement (the "Merger Agreement
Amendment"). The Merger Agreement Amendment is attached hereto as Exhibit 99.6
and is incorporated herein by reference.
In addition, as of November 8, 1999, HSBC, US Holdco and Holdings entered
into a Merger Consideration Adjustment Agreement (the "Merger Consideration
Adjustment Agreement"). The Merger Consideration Adjustment Agreement is
attached hereto as Exhibit 99.7 and is incorporated herein by reference.
The preceding description of the Stockholders Agreement Amendment, the
Merger Agreement Amendment and the Merger Consideration Adjustment Agreement,
copies of which are filed as exhibits hereto, is not intended to be complete and
is qualified in its entirety by reference to the full text of such amendments
and agreement.
Item 7. Materials to be Filed as Exhibits
Item 7 is supplemented as follows:
99.4 Press Release dated November 8, 1999.
99.5 Amendment No. 1 to Stockholders Agreement, dated as of November 8, 1999.
99.6 Amendment No. 1 to Transaction Agreement and Plan of Merger, dated as of
November 8, 1999.
99.7 Merger Consideration Adjustment Agreement, dated as of November 8, 1999.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
November 8, 1999
HSBC HOLDINGS PLC
/s/ Douglas J. Flint
------------------------------
Name: Douglas J. Flint
Title: Group Finance Director
<PAGE>
Exhibit
Number Description
- ----------------------------------------------------------------
99.4 Press Release dated November 8, 1999.
99.5 Amendment No. 1 to Stockholders Agreement, dated as of November 8, 1999.
99.6 Amendment No. 1 to Transaction Agreement and Plan of Merger, dated as of
November 8, 1999.
99.7 Merger Consideration Adjustment Agreement, dated as of November 8, 1999.
8 November 1999
HSBC PLANS TO PROCEED WITH ACQUISITIONS OF
REPUBLIC NEW YORK CORPORATION AND
SAFRA REPUBLIC HOLDINGS S.A.
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. Depending on regulatory approvals and RNYC shareholder approval being
obtained and the fulfilment of other conditions, closing is targeted to take
place by year end. It is expected that supplemental proxy materials will be
mailed to RNYC stockholders later this week in connection with the adjourned
RNYC stockholders meeting scheduled for 30 November 1999 to consider the
transaction.
Under the agreement, Mr Safra personally will accept a reduction of USD450
million in the aggregate amount he will receive for his shareholding in RYNC.
(Mr Safra holds, through corporate interests, shares representing 29 per cent
and 21 per cent of the issued share capital of RNYC and SRH respectively.) For
other shareholders the financial terms of the acquisitions remain unaltered at
USD72 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 USD450
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 up to USD180 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 organisations. 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."
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."
For further information, please contact:
Michael Broadbent/Richard Beck Mike Stephenson
Group Corporate Affairs Group Investor Relations
Tel: 0171 260 9182/6757 Tel: 0171 260 7255
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 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 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
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.
(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.
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.
(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.
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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: ________________________
Name: Name: David J. Shaw
Title: Title: Authorised Signatory
By: _____________________________
Name:
Title: HSBC NORTH AMERICA INC.
CONGREGATION BEIT YAAKOV
By: ________________________
Name: Gerald A. Ronning
By: _____________________________ Title: President
Name: Walter H. Weiner
SABAN S.A. REPUBLIC NEW YORK CORPORATION
By: _____________________________ By: __________________________
Name: Name: Dov C. Schlein
Title: Title: Chairman and
Chief Executive Officer
By: _____________________________
Name:
Title:
EDMOND J. SAFRA
By: _____________________________
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.
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 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 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 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.
(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 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 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.
(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 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, 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.
<PAGE>
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: _____________________________
Name: David J. Shaw
Title: Authorised Signatory
RNYC MERGER CORPORATION
By: _____________________________
Name: Gerald A. Ronning
Title: President
REPUBLIC NEW YORK CORPORATION
By: _____________________________
Name: Dov C. Schlein
Title: Chairman and
Chief Executive Officer
SAFRA REPUBLIC HOLDINGS S.A.
By: _____________________________
Name: A. Leigh Robertson
Title: General Manager
and Attorney-in-Fact
By: _____________________________
Name: Claude Marx
Title: Attorney-in-Fact
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.
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 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.
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, 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 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 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 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 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
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.
(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 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 _______________________________
Name:
Title:
<PAGE>
HSBC NORTH AMERICA INC.,
by _______________________________
Name:
Title:
<PAGE>
HSBC HOLDINGS PLC,
by _______________________________
Name:
Title:
<PAGE>
EXHIBIT A
REQUEST FOR ADJUSTMENT
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 Loss 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
contained in Section 4 of the Merger Consideration Agreement.
HSBC NORTH AMERICA INC.,
by _______________________________
Name:
Title:
