EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
REPUBLIC SECURITY FINANCIAL CORPORATION
AND
WACHOVIA CORPORATION
DATED AS OF OCTOBER 29, 2000
TABLE OF CONTENTS
ARTICLE 1 TRANSACTIONS AND TERMS OF MERGER....................................2
1.1 Merger.................................................................2
1.2 Time and Place of Closing..............................................2
1.3 Effective Time.........................................................2
1.4 Integration............................................................2
1.5 Plan of Merger.........................................................3
ARTICLE 2 TERMS OF MERGER.....................................................3
2.1 Articles of Incorporation..............................................3
2.2 Bylaws.................................................................3
2.3 Directors and Officers.................................................3
ARTICLE 3 MANNER OF CONVERTING SHARES.........................................3
3.1 Conversion of Shares...................................................3
3.2 Anti-Dilution Provisions...............................................4
3.3 Shares Held by Republic or Buyer.......................................4
3.4 Fractional Shares......................................................4
3.5 Conversion of Stock Rights.............................................4
ARTICLE 4 EXCHANGE OF SHARES..................................................6
4.1 Exchange Procedures....................................................6
4.2 Rights of Former Republic Stockholders.................................7
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF Republic..........................7
5.1 Organization, Standing, and Power......................................7
5.2 Authority; No Breach of Agreement......................................8
5.3 Capital Stock..........................................................9
5.4 Republic Subsidiaries..................................................9
5.5 SEC Filings; Financial Statements.....................................10
5.6 Absence of Undisclosed Liabilities....................................11
5.7 Absence of Certain Changes or Events..................................11
5.8 Tax Matters...........................................................11
5.9 Assets................................................................12
5.10 Environmental Matters................................................13
5.11 Compliance with Laws.................................................14
5.12 Labor Relations......................................................15
5.13 Employee Benefit Plans...............................................15
5.14 Material Contracts...................................................18
5.15 Legal Proceedings....................................................19
5.16 Reports..............................................................19
5.17 Statements True and Correct..........................................19
5.18 Tax and Regulatory Matters...........................................20
5.19 Intellectual Property................................................20
5.20 State Takeover Laws..................................................21
5.21 Charter Provisions...................................................21
5.22 Rights Agreement.....................................................21
5.23 Derivatives..........................................................21
5.24 Fairness Opinion.....................................................21
5.25 No Brokers...........................................................21
5.26 Republic Indenture...................................................22
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF Buyer............................22
6.1 Organization, Standing, and Power.....................................22
6.2 Authority; No Breach of Agreement.....................................22
6.3 Capital Stock.........................................................23
6.4 Buyer Subsidiaries....................................................23
6.5 SEC Filings; Financial Statements.....................................24
6.6 Absence of Certain Changes or Events..................................24
6.7 Compliance with Laws..................................................24
6.8 Legal Proceedings.....................................................25
6.9 Statements True and Correct...........................................25
6.10 Tax and Regulatory Matters...........................................26
ARTICLE 7 CONDUCT OF BUSINESS PENDING CONSUMMATION...........................26
7.1 Affirmative Covenants of Republic.....................................26
7.2 Negative Covenants of Republic........................................26
7.3 Negative Covenants of Buyer...........................................29
7.4 Adverse Changes in Condition..........................................29
7.5 Reports...............................................................29
ARTICLE 8 ADDITIONAL AGREEMENTS..............................................30
8.1 Registration Statement; Proxy Statement; Stockholder Approval.........30
8.2 Applications..........................................................31
8.3 Filings with State Offices............................................31
8.4 Agreement as to Efforts to Consummate.................................31
8.5 Investigation and Confidentiality.....................................31
8.6 Press Releases........................................................32
8.7 Certain Actions.......................................................32
8.8 Tax Treatment.........................................................33
8.9 State Takeover Laws...................................................33
8.10 Charter Provisions...................................................33
8.11 Rights Agreement.....................................................33
8.12 Agreement of Affiliates..............................................34
8.13 Employee Benefits and Contracts......................................34
8.14 Indemnification......................................................35
8.15 Exemption from Liability Under Section 16(b).........................36
8.16 Assumption of Republic Debentures....................................37
8.17 Accountants' Letters.................................................37
8.18 Certain Policies.....................................................37
8.19 Local Advisory Board.................................................37
8.20 Amendment of Indenture...............................................38
8.21 Formation of Newco...................................................38
8.22 Defeasance of Republic Senior Debenture..............................38
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS
TO CONSUMMATE......................................................38
9.1 Conditions to Obligations of Each Party...............................38
9.2 Conditions to Obligations of Buyer and Newco..........................39
9.3 Conditions to Obligations of Republic.................................41
ARTICLE 10 TERMINATION.......................................................42
10.1 Termination..........................................................42
10.2 Effect of Termination................................................43
10.3 Non-Survival of Representations and Covenants........................43
ARTICLE 11 MISCELLANEOUS.....................................................43
11.1 Definitions..........................................................43
11.2 Expenses.............................................................52
11.3 Waiver of Jury Trial.................................................52
11.4 Entire Agreement.....................................................52
11.5 Amendments...........................................................53
11.6 Waivers..............................................................53
11.7 Assignment...........................................................53
11.8 Notices..............................................................54
11.9 Governing Law........................................................54
11.10 Counterparts........................................................54
11.11 Captions............................................................55
11.12 Interpretations.....................................................55
11.13 Severability........................................................55
Exhibits
Exhibit 1.........Plan of Merger
Exhibit 2.........Amendment of Republic Rights Agreement
Exhibit 3.........Agreement of Affiliates
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this " Agreement") is
made and entered into as of October 29, 2000, by and between REPUBLIC
SECURITY FINANCIAL CORPORATION ("Republic"), a corporation organized and
existing under the Laws of the State of Florida, with its principal office
located in West Palm Beach, FL; and WACHOVIA CORPORATION ("Buyer"), a
corporation organized and existing under the Laws of the State of North
Carolina, with its principal offices located in Winston-Salem, NC and
Atlanta, GA.
PREAMBLE
The Boards of Directors of Republic and Buyer are of the
opinion that the transactions described herein are in the best interests of
the parties to this Agreement and their respective stockholders. This
Agreement provides for the acquisition of Republic by Buyer pursuant to the
merger of Republic with and into a wholly owned subsidiary of Buyer to be
organized under the laws of the State of North Carolina ("Newco"). At the
effective time of the merger, the outstanding shares of the capital stock
of Republic shall be converted into shares of the common stock of Buyer
(except as provided herein). As a result, stockholders of Republic shall
become stockholders of Buyer, and each of the subsidiaries of Republic
shall continue to conduct its business and operations as an indirect
subsidiary of Buyer. The transactions described in this Agreement are
subject to the approvals of the stockholders of Republic, the Board of
Governors of the Federal Reserve System, and certain state regulatory
authorities, and the satisfaction of certain other conditions described in
this Agreement. It is the intention of the parties to this Agreement that
the Merger for federal income tax purposes shall qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal
Revenue Code and that this Agreement shall constitute a "plan of
reorganization" for purposes of Section 368 of the Internal Revenue Code.
As conditions and inducements to Buyer's entering into this Agreement,
Republic has entered into a Termination Fee Agreement with Buyer, the
President and Chief Executive Officer of Republic has entered into an
Employment Agreement with Buyer and the non-employee directors of Republic
have entered into Noncompetition Agreements with Buyer.
Certain terms used in this Agreement are defined in
Section 11.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the
mutual warranties, representations, covenants, and agreements set forth
herein, the Parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time, Republic shall be merged with and into Newco in accordance
with the provisions of Section 607.1107 of the FBCA and Section 55-11-07 of
the NCBCA and with the effect provided in Section 607.1106 of the FBCA and
Section 55-11-06 of the NCBCA, respectively (the "Merger"). Newco shall be
the Surviving Corporation resulting from the Merger and shall continue to
be governed by the Laws of the State of North Carolina. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been
approved and adopted by the respective Boards of Directors of Republic and
Buyer and will be approved and adopted by the Board of Directors of Newco
upon its formation.
1.2 TIME AND PLACE OF CLOSING. The consummation of the Merger (the
"Closing") shall take place at 6:00 P.M. on the date that the Effective
Time occurs (or the immediately preceding day if the Effective Time is
earlier than 9:00 A.M.), or at such other time as the Parties, acting
through their duly authorized officers, may mutually agree. The place of
Closing shall be at such location as may be mutually agreed upon by the
Parties.
1.3 EFFECTIVE TIME. The Merger and the other transactions contemplated by
this Agreement shall become effective on the date and at the time the
Florida Articles of Merger reflecting the Merger shall become effective
with the Secretary of State of the State of Florida and the North Carolina
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of North Carolina (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually
agreed upon by the duly authorized officers of each Party, the Parties
shall use their reasonable efforts to cause the Effective Time to occur on
such date as may be designated by Buyer within the fifth business day to
occur after the last of the conditions set forth in Article 9 (other than
the conditions relating to items to be delivered on the day of the Closing)
shall have been satisfied or waived in accordance with the terms of this
Agreement (or, at the election of Buyer, on the first business day of the
month immediately succeeding the month in which such day occurs).
1.4 INTEGRATION. Following the Effective Time, the Parties currently intend
to effectuate, or cause to be effectuated, the combination (the "Subsidiary
Combination") of the business of Republic Security Bank with that of
Wachovia Bank, National Association. Subject to the terms of this
Agreement, Republic agrees to cooperate with Buyer and to take all
reasonable actions prior to or following the Effective Time, including
executing all requisite documentation, as may be reasonably requested by
Buyer to effect the Subsidiary Combination. Subject to the terms of this
Agreement, Republic also agrees to cooperate with Buyer and to take all
reasonable restructuring steps for regulatory purposes, as may be
reasonably requested by Buyer to merge or otherwise consolidate such legal
entities to the extent desirable for regulatory or other reasons.
1.5 PLAN OF MERGER. The Parties agree to enter into (and Buyer agrees to
cause Newco to enter into) a separate plan of merger, in substantially the
form of Exhibit 1 (the "Plan of Merger"), for purposes of any filing
requirement.
ARTICLE 2
TERMS OF MERGER
2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of Newco in
effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation after the Effective Time until
otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of Newco in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Newco in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws
of the Surviving Corporation. The officers of Newco in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws
of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the
part of Buyer, Newco or Republic, or the stockholders of any of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of Newco Common Stock issued and outstanding immediately
prior to the Effective Time shall remain issued and outstanding from and
after the Effective Time.
(b) Each share of Republic Common Stock (including any associated stock
purchase rights but excluding shares held by any Republic Company or any
Buyer Company, in each case other than in a fiduciary capacity or as a
result of debts previously contracted) issued and outstanding at the
Effective Time shall cease to be outstanding and shall by virtue of this
Agreement and without any action on the part of the holder thereof, be
converted into and exchangeable for the number of shares (the "Exchange
Ratio") of the common stock, par value $5.00 per share of Buyer ("Buyer
Common Stock"), rounded to the nearest ten-thousandth of a share,
determined by dividing 7.00 by the Average Closing Price (as defined
below); provided that (i) if the Average Closing Price is equal to or
greater than $56.2375, the Exchange Ratio shall be .1245 (the "Minimum
Exchange Ratio") and (ii) if the Average Closing Price is equal to or less
than $46.0125, the Exchange Ratio shall be .1521 (the "Maximum Exchange
Ratio").
3.2 ANTI-DILUTION PROVISIONS. In the event Republic changes the number of
shares of Republic Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock, the Exchange Ratio, the
Minimum Exchange Ratio and the Maximum Exchange Ratio shall be
proportionately adjusted. In the event Buyer changes the number of shares
of Buyer Common Stock issued and outstanding prior to the Effective Time as
a result of a stock split, stock dividend, or similar recapitalization with
respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or
similar recapitalization for which a record date is not established) shall
be prior to the Effective Time, the formula for calculating the Minimum
Exchange Ratio and the Maximum Exchange Ratio shall be adjusted
appropriately.
3.3 SHARES HELD BY REPUBLIC OR BUYER. Each of the shares of Republic Common
Stock held by any Republic Company or by any Buyer Company, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted, shall be cancelled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of Republic Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of Buyer Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to a fractional part of a share of
Buyer Common Stock multiplied by the market value of one share of Buyer
Common Stock at the Effective Time. The market value of one share of Buyer
Common Stock at the Effective Time shall be the closing price of Buyer
Common Stock on the New York Stock Exchange (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source
selected by Buyer) on the last trading day preceding the Effective Time. No
such holder will be entitled to dividends, voting rights, or any other
rights as a stockholder in respect of any fractional shares.
3.5 CONVERSION OF STOCK RIGHTS.
(a) Except as provided in Section 3.5 (d), at the Effective Time, each
award, option, or other right to purchase or acquire shares of Republic
Common Stock pursuant to stock options, stock appreciation rights
("SAR's"), or stock awards and awards or other rights the value of which is
determined by reference to the value of shares of Republic Common Stock
("Republic Rights"), in each case granted by Republic under the Republic
Stock Plans, which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become rights with respect to
Buyer Common Stock, and Buyer shall assume each Republic Right, in
accordance with the terms of the Republic Stock Plan and stock option
agreement by which it is evidenced, except that from and after the
Effective Time, (i) Buyer and its Compensation Committee shall be
substituted for Republic and the Committee of Republic's Board of Directors
(including, if applicable, the entire Board of Directors of Republic)
administering such Republic Stock Plan, (ii) each Republic Right assumed by
Buyer may be exercised solely for shares of Buyer Common Stock (or cash in
the case of stock appreciation rights), (iii) the number of shares of Buyer
Common Stock subject to such Republic Right shall be equal to the number of
shares of Republic Common Stock subject to such Republic Right immediately
prior to the Effective Time multiplied by the Exchange Ratio and rounding
down to the nearest whole share, and (iv) the per share exercise price (or
similar threshold price, in the case of stock awards) under each such
Republic Right shall be adjusted by dividing the per share exercise (or
threshold) price under each such Republic Right by the Exchange Ratio and
rounding up to the nearest cent. In addition, notwithstanding the
provisions of clauses (iii) and (iv) of the first sentence of this Section
3.5(a), each Republic Right which is an "incentive stock option" shall be
adjusted as required by Section 424 of the Internal Revenue Code and the
regulations promulgated thereunder, so as not to constitute a modification,
extension, or renewal of the option, within the meaning of Section 424(h)
of the Internal Revenue Code. At or prior to the Effective Time, Republic
shall take all action, if any, necessary with respect to the Republic Stock
Plans to permit the foregoing provisions of this Section 3.5(a) and the
proviso to the first sentence of Section 3.5(b).
(b) At the Effective Time, Buyer shall assume the Republic Stock Option
Plans; provided that such assumption shall be only in respect of the
Republic Rights assumed pursuant to Section 3.5(a) and that Buyer shall
have no obligation to make any additional grants or awards under assumed
Republic Stock Plans. As soon as reasonably practicable after the Effective
Time, Buyer shall deliver to the participants in each Republic Stock Plan
an appropriate notice setting forth such participant's rights pursuant
thereto and Republic Rights pursuant to such Republic Stock Plan shall
continue in effect on the same terms and conditions (subject to the
adjustments required by Section 3.5(a) after giving effect to the Merger),
and Buyer shall comply with the terms of each Republic Stock Plan to
ensure, to the extent required by, and subject to the provisions of, such
Republic Stock Plan, that Republic Rights which qualified as incentive
stock options prior to the Effective Time continue to qualify as incentive
stock options after the Effective Time. At or prior to the Effective Time,
Buyer shall take all corporate action necessary to reserve for issuance
sufficient shares of Buyer Common Stock for delivery upon exercise of
Republic Rights assumed by it in accordance with this Section 3.5. As soon
as reasonably practicable (but in no event more than 15 days) after the
Effective Time, Buyer shall file a registration statement on Form S-3 or
Form S-8, as the case may be (or any successor or other appropriate forms),
with respect to the shares of Buyer Common Stock subject to such options
and shall use its reasonable efforts to maintain the effectiveness of such
registration statements (and maintain the current status of the prospectus
or prospectuses contained therein) for so long as such options remain
outstanding. With respect to those individuals who subsequent to the Merger
will be subject to the reporting requirements under Section 16(a) of the
1934 Act, where applicable, Buyer shall administer the Republic Stock Plan
assumed pursuant to this Section 3.5 in a manner that complies with Rule
16b-3 promulgated under the 1934 Act, to the extent it has been so
administered through the Effective Time.
(c) All restrictions or limitations on transfer with respect to Republic
Common Stock awarded under the Republic Stock Plans or any other plan,
program, or arrangement of any Republic Company, to the extent that such
restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall
remain in full force and effect with respect to shares of Buyer Common
Stock into which such restricted stock is converted pursuant to Section 3.1
of this Agreement.
(d) Notwithstanding any other provision in this Section 3.5, (i) Republic
shall take all of the actions set forth in paragraph 2 of Section 7.2(b) of
the Republic Disclosure Memorandum with respect to SAR's of Republic at the
time set forth in that paragraph and (ii) at the Effective Time each of the
SAR's of Republic referred to in such paragraph shall have been fully
satisfied and shall have ceased to exist.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Buyer and
Republic shall cause EquiServe Trust Company, N.A. or another exchange
agent selected by Buyer (the "Exchange Agent") to mail to the former
stockholders of Republic appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of Republic Common Stock shall
pass, only upon proper delivery of such certificates to the Exchange
Agent). The Exchange Agent may establish reasonable and customary rules and
procedures in connection with its duties. After the Effective Time, each
holder of shares of Republic Common Stock (other than shares to be canceled
pursuant to Section 3.3 of this Agreement) issued and outstanding at the
Effective Time promptly upon surrender of the certificate or certificates
representing such shares to the Exchange Agent, together with properly
completed transmittal materials, shall receive in exchange therefor the
consideration provided in Section 3.1 of this Agreement, together with all
undelivered dividends and other distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2 of this Agreement. To
the extent required by Section 3.4 of this Agreement, each holder of shares
of Republic Common Stock issued and outstanding at the Effective Time also
shall receive, upon surrender of the certificate or certificates
representing such shares, cash in lieu of any fractional share of Buyer
Common Stock to which such holder may be otherwise entitled (without
interest). Until so surrendered, each outstanding certificate of Republic
Common Stock shall be deemed for all purposes, other than as provided below
with respect to voting and the payment of dividends or other distributions,
to represent the consideration into which the number of shares of Republic
Common Stock represented thereby prior to the Effective Time shall have
been converted. Buyer shall not be obligated to deliver the consideration
to which any former holder of Republic Common Stock is entitled as a result
of the Merger until such holder surrenders such holder's certificate or
certificates representing the shares of Republic Common Stock for exchange
as provided in this Section 4.1. The certificate or certificates of
Republic Common Stock so surrendered shall be duly endorsed as the Exchange
Agent may require. Any other provision of this Agreement notwithstanding,
neither the Surviving Corporation, Republic, nor the Exchange Agent shall
be liable to a holder of Republic Common Stock for any amounts paid or
property delivered in good faith to a public official pursuant to any
applicable abandoned property Law.
4.2 RIGHTS OF FORMER REPUBLIC STOCKHOLDERS. At the Effective Time, the
stock transfer books of Republic shall be closed as to holders of Republic
Common Stock immediately prior to the Effective Time and no transfer of
Republic Common Stock by any such holder shall thereafter be made or
recognized. Until exchanged in accordance with the provisions of Section
4.1 of this Agreement, each certificate theretofore representing shares of
Republic Common Stock (other than shares to be canceled pursuant to Section
3.3 of this Agreement) shall from and after the Effective Time represent
for all purposes only the right to receive the consideration provided in
Sections 3.1 and 3.4 of this Agreement in exchange therefor. Former
stockholders of record of Republic shall not be entitled to vote after the
Effective Time at any meeting of Buyer stockholders until such holders have
exchanged their certificates representing Republic Common Stock for
certificates representing Buyer Common Stock in accordance with the
provisions of this Agreement. Whenever a dividend or other distribution is
declared by Buyer on the Buyer Common Stock, the record date for which is
at or after the Effective Time, the declaration shall include dividends or
other distributions on all shares of Buyer Common Stock issuable pursuant
to this Agreement, but no dividend or other distribution payable to the
holders of record of Buyer Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any certificate
representing shares of Republic Common Stock issued and outstanding at the
Effective Time until such certificate is exchanged as provided in Section
4.1 of this Agreement. However, upon exchange of such Republic Common Stock
certificate, both the Buyer Common Stock certificate (together with all
such undelivered dividends or other distributions without interest) and any
undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to
each share represented by such certificate. In the event any Republic
Common Stock certificate shall have been lost, stolen, or destroyed, upon
the making of an affidavit of that fact by the person claiming such
certificate to be lost, stolen, or destroyed and, if required by Buyer, the
posting by such person of a bond in such amount as Buyer may reasonably
direct as indemnity against any claim that may be made against it with
respect to such certificate, the Exchange Agent shall issue in exchange for
such lost, stolen, or destroyed certificate, the shares of Buyer Common
Stock and cash in lieu of fractional shares deliverable in respect thereof
pursuant to this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF REPUBLIC
Republic hereby represents and warrants to Buyer as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Republic is a corporation duly
organized, validly existing, and in good standing under the Laws of the
State of Florida, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its Material
Assets. Republic is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed
is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Republic.
5.2 AUTHORITY; NO BREACH OF AGREEMENT.
(a) Republic has the corporate power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and the
Termination Fee Agreement and to consummate the transactions contemplated
hereby and thereby. The execution, delivery, and performance of this
Agreement and the Termination Fee Agreement, and the consummation of the
transactions contemplated herein and therein, including the Merger, have
been duly and validly authorized by all necessary corporate action
(including valid authorization and adoption of this Agreement and the
Termination Fee Agreement by Republic's duly constituted Board of
Directors) in respect thereof on the part of Republic, subject in the case
of consummation of the Merger to the approval of this Agreement by the
holders of a majority of the shares of Republic Common Stock entitled to
vote thereon, which is the only stockholder vote required for consummation
of the Merger by Republic. Assuming due authorization, execution, and
delivery of this Agreement by Buyer, this Agreement represents a legal,
valid, and binding obligation of Republic, enforceable against Republic in
accordance with its terms (except in all cases as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
receivership, conservatorship, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding may be
brought).
(b) Except as set forth in Section 5.2 of the Republic Disclosure
Memorandum, neither the execution and delivery of this Agreement by
Republic, nor the consummation by Republic of the transactions contemplated
hereby, nor compliance by Republic with any of the provisions hereof, will
(i) conflict with or result in a breach of any provision of Republic's
Articles of Incorporation or Bylaws, or (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the
creation of any Lien on any Asset of any Republic Company under, any
Contract, Order or Permit of any Republic Company, where such Default or
Lien, or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Republic, or
(iii) subject to receipt of the requisite Consents referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to any
Republic Company or any of their respective Material Assets.
(c) Other than as disclosed in Section 5.2 of the Republic Disclosure
Memorandum, and other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation or both with respect to
any employee benefit plans, or under the HSR Act, and other than Consents,
filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Republic, no notice to, filing with, or Consent of, any
public body or authority or self-regulatory authority is necessary for the
consummation by Republic of the Merger and the other transactions
contemplated in this Agreement or the Termination Fee Agreement.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Republic consists, as of the date of
this Agreement, of (i) 500,000,000 shares of Republic Common Stock, of
which 48,614,060 (exclusive of treasury stock) shares are issued and
outstanding as of the date of this Agreement and not more than 52,228,654
(exclusive of treasury stock) shares will be issued and outstanding at the
Effective Time, and (ii) 20,000,000 shares of Republic Preferred Stock,
none of which is outstanding. All of the issued and outstanding shares of
Republic Common Stock are duly and validly issued and outstanding and are
fully paid and nonassessable. None of the outstanding shares of Republic
Common Stock has been issued in violation of any preemptive rights of the
current or past stockholders of Republic (and are not subject to any
preemptive rights). Republic has reserved not more than 5,800,000 shares of
Republic Common Stock for issuance on the exercise of outstanding stock
options and warrants.
(b) Except as set forth in Section 5.3(a) of this Agreement (with respect
to shares of capital stock) or Section 5.3(b) of the Republic Disclosure
Memorandum or as provided in the Republic Rights Agreement, there are no
shares of capital stock or other equity securities of Republic outstanding
and no outstanding Rights relating to the capital stock of Republic. The
number of shares of Republic Common Stock (or other capital stock of
Republic) that are issuable upon exercise of any outstanding Rights as of
the date of this Agreement is set forth in Section 5.3(b) of Republic's
Disclosure Memorandum.
5.4 REPUBLIC SUBSIDIARIES. Republic has disclosed in Section 5.4 of the
Republic Disclosure Memorandum all Republic Subsidiaries. Except as set
forth in Section 5.4 of the Republic Disclosure Memorandum, Republic or one
of its wholly owned Subsidiaries owns all of the issued and outstanding
shares of capital stock of each Republic Subsidiary. No equity securities
of any Republic Subsidiary are or may become required to be issued (other
than to Republic or a wholly owned Republic Subsidiary) by reason of any
Rights, and there are no Contracts by which any Republic Subsidiary is
bound to issue (other than to Republic or a wholly owned Republic
Subsidiary) additional shares of its capital stock or Rights or by which
any Republic Company is or may be bound to transfer any shares of the
capital stock of any Republic Subsidiary (other than to Republic or a
wholly owned Republic Subsidiary). There are no Contracts relating to the
rights of any Republic Company to vote or to dispose of any shares of the
capital stock of any Republic Subsidiary. All of the shares of capital
stock of each Republic Subsidiary held by a Republic Company are fully paid
and nonassessable (except pursuant to 12 U.S.C. ss.55) and are owned by the
Republic Company free and clear of any Lien. Each Republic Subsidiary is
either a bank or a corporation, and is duly organized, validly existing,
and (to the extent applicable) in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate
its Assets and to carry on its business as now conducted. Each Republic
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Republic. Each Republic Subsidiary that is a depository
institution is an "insured depository institution" as defined in the
Federal Deposit Insurance Act and applicable regulations thereunder, and
the deposits in which are insured by the Bank Insurance Fund or Savings
Association Insurance Fund to the fullest extent permitted by Law. The
minute book and other organizational documents (and all amendments thereto)
for Republic and each Republic Subsidiary that is a "Significant
Subsidiary" (as such term is defined in Regulation S-X promulgated under
the ▇▇▇▇ ▇▇▇) have been made available to Buyer for its review, and are
true and complete as in effect as of July 31, 2000. No Material actions
have been taken by the Board of Directors of Republic or any such Republic
Subsidiary since such date, other than such actions taken to authorize the
execution of this Agreement and the consummation of the transactions
contemplated herein, and to authorize actions described in the Republic
Disclosure Memorandum. Republic does not own beneficially, directly or
indirectly, any equity securities or similar interests of any Person, or
any interest in a partnership or joint venture of any kind, other than
equity securities or interests (i) of Republic Subsidiaries, (ii) of any
entity acquired through foreclosure in the ordinary course of business or
(iii) that are owned or controlled in a fiduciary capacity in the ordinary
course of business
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Republic has filed and made available to Buyer all of Republic's SEC
Documents required to be filed with the SEC since December 31, 1995
(collectively, the "Republic SEC Reports"). The Republic SEC Reports (i) at
the time filed, complied in all Material respects with the applicable
requirements of the 1933 Act and the 1934 Act, as the case may be, and (ii)
did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a Material fact or omit to state a
Material fact required to be stated in such Republic SEC Reports or
necessary in order to make the statements in such Republic SEC Reports, in
light of the circumstances under which they were made, not misleading.
Except for any Republic Subsidiaries that are registered as a broker,
dealer, or investment advisor or filings required due to fiduciary holdings
of the Republic Subsidiaries, none of Republic's Subsidiaries is required
to file any forms, reports, or other documents with the SEC.
(b) Each of the Republic Financial Statements (including, in each case, any
related notes) contained in the Republic SEC Reports, including any
Republic SEC Reports filed after the date of this Agreement until the
Effective Time, complied or will comply as to form in all Material respects
with the applicable published rules and regulations of the SEC with respect
thereto, was prepared or will be prepared in accordance with GAAP applied
on a consistent basis throughout the periods involved (except as may be
indicated in the notes to such financial statements, or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC), and fairly
presented or will fairly present the consolidated financial position of
Republic and its Subsidiaries as at the respective dates and the
consolidated results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or
are subject to normal and recurring year-end adjustments which were not or
will not be Material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Republic Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Republic, except Liabilities which
are accrued or reserved against in the consolidated balance sheets of
Republic as of June 30, 2000 or included in the Republic Financial
Statements filed after such date but before the date of this Agreement (or
reflected in the notes thereto), Liabilities incurred in the ordinary
course of business subsequent to June 30, 2000, Liabilities to be incurred
in connection with the transactions contemplated by this Agreement or the
Termination Fee Agreement (in each case in accordance with the terms of
this Agreement and the Termination Fee Agreement), and except as set forth
in Section 5.6 of the Republic Disclosure Memorandum. No Republic Company
has incurred or paid any Liability since December 31, 1999, except for such
Liabilities incurred or paid in the ordinary course of business consistent
with past business practices and which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Republic.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1999, except
as disclosed in the Republic Financial Statements delivered prior to the
date of this Agreement or as otherwise disclosed in the Republic Disclosure
Memorandum, there have been no events, changes, or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Republic.
5.8 TAX MATTERS. Except as set forth in Section 5.8 of the
Republic Disclosure Memorandum:
(a) Since December 31, 1994, all Material Tax Returns required to be filed
by or on behalf of any of the Republic Companies have been timely filed, or
requests for extensions have been timely filed, granted, and have not
expired for periods ended on or before December 31, 1999, and all Material
Tax Returns filed are complete and accurate in all Material respects. All
Tax Returns for periods ending on or before the date of the most recent
fiscal year end immediately preceding the Effective Time will be timely
filed or requests for extensions will be timely filed. All Taxes shown on
filed Tax Returns have been paid. There is no audit examination,
deficiency, or refund Litigation with respect to any Taxes, that is
reasonably likely to result in a determination that would have,
individually or in the aggregate, a Material Adverse Effect on Republic,
except to the extent reserved against in the Republic Financial Statements
dated prior to the date of this Agreement. All Material Taxes and other
Material Liabilities due with respect to completed and settled examinations
or concluded Litigation have been paid.
(b) None of the Republic Companies has executed an extension or waiver of
any statute of limitations on the assessment or collection of any Tax due
(excluding such statutes that relate to years currently under examination
by the Internal Revenue Service or other applicable taxing authorities)
that is currently in effect.
(c) Adequate provision for any Material Taxes due or to become due for any
of the Republic Companies for the period or periods through and including
the date of the respective Republic Financial Statements has been made and
is reflected on such Republic Financial Statements.
(d) Each of the Republic Companies is in Material compliance with, and its
records contain the information and documents (including properly completed
IRS Forms W-9) necessary to comply with, in all material respects,
applicable information reporting and Tax withholding requirements under
federal, state, and local Tax Laws, and such records identify with
specificity all accounts subject to backup withholding under Section 3406
of the Internal Revenue Code.
(e) None of the Republic Companies has made any payments, is obligated to
make any payments, or is a party to any contract, agreement, or other
arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal
Revenue Code.
(f) There are no Material Liens with respect to Taxes upon any of the
Assets of the Republic Companies.
(g) There has not been an ownership change, as defined in Internal Revenue
Code Section 382(g), of the Republic Companies (other than with respect to
Republic Companies acquired directly or indirectly by Republic) that
occurred during or after any Taxable Period in which such Republic
Companies incurred a net operating loss that carries over to any Taxable
Period ending after December 31, 1999.
(h) No Republic Company has filed any consent under Section 341(f) of the
Internal Revenue Code concerning collapsible corporations.
(i) No Republic Company has or has had a permanent establishment in any
foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country, including any operation
for which a provision in any applicable tax treaty or convention between
the United States and such foreign country corresponding to the provision
on permanent establishments in the U.S. Model Income Tax Treaty applies to
such operation.
5.9 ASSETS. Except as set forth in Section 5.9 of the Republic Disclosure
Memorandum, the Republic Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets other than such
defects and liens which are not reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on Republic. All tangible
properties used in the businesses of the Republic Companies are in good
condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with Republic's past practices. All
Assets which are Material to Republic's business on a consolidated basis,
held under leases or subleases by any of the Republic Companies, are held
under valid Contracts enforceable in accordance with their respective terms
(except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceedings may be
brought), and each such Contract is in full force and effect. The Republic
Companies currently maintain insurance (that is in full force and effect)
in amounts, scope and coverage reasonably necessary for their operations.
Except as set forth in Section 5.9 of the Republic Disclosure Memorandum,
none of the Republic Companies has received notice from any insurance
carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased.
Except as set forth in Section 5.9 of the Republic Disclosure Memorandum,
there are no claims pending under such policies of insurance and no notices
have been given by any Republic Company under such policies. No Republic
Company is in Material Default under such policies of insurance. The Assets
of the Republic Companies include all Material Assets required to operate
the business of the Republic Companies as presently conducted.
5.10 ENVIRONMENTAL MATTERS. Except as disclosed in Section 5.10 of the
Republic Disclosure Memorandum:
(a) Each Republic Company, its Participation Facilities, and, to the
Knowledge of Republic, its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those instances of
non-compliance which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Republic.
(b) There is no Litigation pending or, to the Knowledge of Republic,
threatened before any court, governmental agency, or authority, or other
forum in which any Republic Company or any of its Participation Facilities
has been or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating
to the release into the environment of any Hazardous Material, whether or
not occurring at, on, under, or involving a site owned, leased, or operated
by any Republic Company or any of its Participation Facilities, except for
such Litigation pending or threatened that is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Republic.
(c) There is no Litigation pending, or to the Knowledge of Republic,
threatened before any court, governmental agency, or board, or other forum
in which any of its Loan Properties (or Republic in respect of such Loan
Property) has been or, with respect to threatened Litigation, may
reasonably be expected to be named as a defendant or potentially
responsible party (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release
into the environment of any Hazardous Material, whether or not occurring
at, on, under, or involving a Loan Property, except for such Litigation
pending or threatened that is not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Republic.
(d) To the Knowledge of Republic, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c), except such as is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Republic.
(e) To the Knowledge of Republic, during the period of (i) any Republic
Company's ownership or operation of any of their respective current
properties, (ii) any Republic Company's participation in the management of
any Participation Facility, or (iii) any Republic Company's holding of a
security interest in a Loan Property, there have been no releases of
Hazardous Material in, on, under, or affecting (or potentially affecting)
such properties, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Republic.
Prior to the period of (i) any Republic Company's ownership or operation of
any of their respective current properties, (ii) any Republic Company's
participation in the management of any Participation Facility, or (iii) any
Republic Company's holding of a security interest in a Loan Property, to
the Knowledge of Republic, there were no releases of Hazardous Material in,
on, under, or affecting any such property, Participation Facility, or Loan
Property, except such as are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Republic.
5.11 COMPLIANCE WITH LAWS. Republic is duly registered as a bank holding
company under the BHC Act. Each Republic Company has in effect all Permits
necessary for it to own, lease, or operate its Material Assets and to carry
on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Republic, and there has occurred no Default
under any such Permit, other than Defaults which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
Republic. None of the Republic Companies:
(a) is in violation of any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Republic; and
(b) has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Republic Company is
not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Republic, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Republic, or (iii) requiring any
Republic Company (x) to enter into or consent to the issuance of a cease
and desist order, formal agreement, directive, commitment, or memorandum of
understanding, or (y) to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any Material
manner relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends (and no Republic Company has
entered into, consented to or adopted any of the preceding). To Republic's
Knowledge, no grounds for any of the foregoing in this Section 5.11(b)
exist.
5.12 LABOR RELATIONS. No Republic Company is the subject of any Litigation
asserting that it or any other Republic Company has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state Law) or seeking to compel it or any other Republic Company
to bargain with any labor organization as to wages or conditions of
employment, nor is any Republic Company a party to or bound by any
collective bargaining agreement, Contract, or other agreement or
understanding with a labor union or labor organization, nor is there any
strike or other labor dispute involving any Republic Company, pending or,
to the Knowledge of Republic, threatened, or to the Knowledge of Republic,
is there any activity involving any Republic Company's employees seeking to
certify a collective bargaining unit or engaging in any other organization
activity.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Republic has disclosed in Section 5.13 of the Republic Disclosure
Memorandum, and has delivered or made available to Buyer prior to the
execution of this Agreement correct and complete copies in each case of,
all Republic Benefit Plans, including, but not limited to, any trust
instruments and insurance contracts forming a part of any Republic Benefit
Plans and all amendments thereto. For purposes of this Agreement, "Republic
Benefit Plans" means all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay,
vacation, bonus, or other compensation or incentive plan, all other
employee programs or agreements, all medical, vision, dental, or other
health plans, all life insurance plans, and all other employee benefit
plans or fringe benefit plans, including "employee benefit plans" as that
term is defined in Section 3(3) of ERISA maintained by, sponsored in whole
or in part by, or contributed to by, any Republic Company for the benefit
of employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate. Any of the Republic Benefit
Plans which is an "employee welfare benefit plan," as that term is defined
in Section 3(l) of ERISA, or an "employee pension benefit plan," as that
term is defined in Section 3(2) of ERISA, is referred to herein as a
"Republic ERISA Plan." Any Republic ERISA Plan which is also subject to
Section 412 of the Internal Revenue Code or Section 302 of ERISA is
referred to herein as a "Republic Pension Plan." Neither Republic nor any
Republic Company has an "obligation to contribute" (as defined in ERISA
Section 4212) to a "multiemployer plan" (as defined in ERISA Sections
4001(a)(3) and 3(37)(A)). Each "employee pension benefit plan," as defined
in Section 3(2) of ERISA, ever maintained by any Republic Company, that was
intended to qualify under Section 401(a) of the Internal Revenue Code is
disclosed as such in Section 5.13 of the Republic Disclosure Memorandum.
(b) Republic has delivered or made available to Buyer prior to the
execution of this Agreement correct and complete copies of the following
documents: (i) all trust agreements or other funding arrangements for such
Republic Benefit Plans (including insurance contracts), and all amendments
thereto, (ii) with respect to any such Republic Benefit Plans or
amendments, all determination letters, Material rulings, Material opinion
letters, Material information letters, or Material advisory opinions issued
by the Internal Revenue Service, the United States Department of Labor, or
the Pension Benefit Guaranty Corporation after December 31, 1994, (iii)
annual reports or returns, audited or unaudited financial statements,
actuarial valuations and reports, and summary annual reports prepared for
any Republic Benefit Plan with respect to the most recent plan year and
(iv) the most recent summary plan descriptions and any Material
modifications thereto.
(c) All Republic Benefit Plans are in compliance with the applicable terms
of ERISA, the Internal Revenue Code, and any other applicable Laws, other
than instances of noncompliance which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Republic.
Each Republic ERISA Plan which is intended to be qualified under Section
401(a) of the Internal Revenue Code has received a favorable determination
letter from the Internal Revenue Service, and Republic is not aware of any
circumstances likely to result in revocation of any such favorable
determination letter or the loss of qualification of such Republic Benefit
Plan under Section 401(a) of the Internal Revenue Code. Each trust created
under any Republic ERISA Plan has been determined to be exempt from Tax
under Section 501(a) of the Internal Revenue Code and Republic is not aware
of any circumstance which will or could reasonably result in revocation of
such exemption. With respect to each Republic Benefit Plan to the Knowledge
of Republic, no event has occurred which will or could reasonably give rise
to a loss of any intended Tax consequences under the Internal Revenue Code
or to any Tax under Section 511 of the Internal Revenue Code that is
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect on Republic. There is no Material pending or, to the
Knowledge of Republic, threatened Litigation relating to any Republic ERISA
Plan.
(d) No Republic Company has engaged in a transaction with respect to any
Republic Benefit Plan that, assuming the Taxable Period of such transaction
expired as of the date of this Agreement, would subject any Republic
Company to a tax or penalty imposed by either Section 4975 of the Internal
Revenue Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on Republic. Neither Republic nor, any administrator or fiduciary of any
Republic Benefit Plan (or any agent of any of the foregoing) has engaged in
any transaction, or acted or failed to act in any manner with respect to
any Republic Benefit Plan which could subject Republic to any direct or
indirect Liability (by indemnity or otherwise) for breach of any fiduciary,
co-fiduciary, or other duty under ERISA, where such Liability, individually
or in the aggregate, is reasonably likely to have a Material Adverse Effect
on Republic. No oral or written representation or communication with
respect to any aspect of the Republic Benefit Plans has been made to
employees of any Republic Company which is not in conformity with the
written or otherwise preexisting terms and provisions of such plans, where
any Liability resulting from such non-conformity is reasonably likely to
have a Material Adverse Effect on Republic. Each Republic ERISA Plan which
is intended to be part of a voluntary employees' beneficiary association
within the meaning of Section 501(c)(9) of the Internal Revenue Code has
(i) received an opinion letter from the Internal Revenue Service
recognizing its exempt status under Section 501(c)(9) of the Internal
Revenue Code and (ii) filed a timely notice with the Internal Revenue
Service pursuant to Section 505(c) of the Internal Revenue Code, and
Republic is not aware of circumstances likely to result in the loss of the
exempt status of such Republic ERISA Plan under Section 501(c)(9) of the
Internal Revenue Code.
(e) No Republic Pension Plan has any "unfunded current liability," as that
term is defined in Section 302(d)(8)(A) of ERISA, and the fair market value
of the Assets of any such plan exceeds the plan's "benefit liabilities," as
that term is defined in Section 4001(a)(16) of ERISA, when determined under
actuarial factors that would apply if the plan terminated in accordance
with all applicable legal requirements. Since the date of the most recent
actuarial valuation, there has been (i) no Material change in the financial
position or funded status of any Republic Pension Plan, (ii) no change in
the actuarial assumptions with respect to any Republic Pension Plan, and
(iii) no increase in benefits under any Republic Pension Plan as a result
of plan amendments or changes in applicable Law, any of which is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on Republic. Neither any Republic Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA, currently
maintained by any Republic Company, or the single-employer plan of any
entity which is considered one employer with Republic under Section 4001 of
ERISA or Section 414 of the Internal Revenue Code or Section 302 of ERISA
(whether or not waived) (a "Republic ERISA Affiliate") has an "accumulated
funding deficiency" within the meaning of Section 412 of the Internal
Revenue Code or Section 302 of ERISA and no Republic ERISA Affiliate has an
outstanding funding waiver. All required contributions with respect to an
Republic Pension Plan or any single-employer plan of an Republic ERISA
Affiliate have been timely made and there is no lien or expected to be a
lien under Internal Revenue Code Section 412(n) or ERISA Section 302(f) or
Tax under Internal Revenue Code Section 4971. No Republic Company has
provided, or is required to provide, security to an Republic Pension Plan
or to any single-employer plan of an Republic ERISA Affiliate pursuant to
Section 401(a)(29) of the Internal Revenue Code. All premiums required to
be paid under ERISA Section 4006 have been timely paid by Republic, except
to the extent any failure to timely pay would not have a Material Adverse
Effect on Republic.
(f) No Liability under Title IV of ERISA has been or is expected to be
incurred by any Republic Company with respect to any defined benefit plan
currently or formerly maintained by any of them or by any Republic ERISA
Affiliate that has not been satisfied in full (other than Liability for
Pension Benefit Guaranty Corporation premiums, which have been paid when
due, except for Liabilities that, individually or in the aggregate, would
not have a Material Adverse Effect on Republic). Except as set forth in
Section 5.13 of the Republic Disclosure Memorandum, no notice of a
"reportable event", within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived or extended, other
than pursuant to PBGC Reg. Section 4043.66, has been required to be filed
for any Republic Pension Plan or any Republic ERISA Affiliate within the
12-month period ending on the date hereof.
(g) Except as set forth in Section 5.13 of the Republic Disclosure
Memorandum, no Republic Company has any obligations for retiree health and
retiree life benefits under any of the Republic Benefit Plans other than
with respect to benefit coverage mandated by applicable Law. Except as set
forth in Section 5.13 of the Republic Disclosure Memorandum, the Republic
Companies may amend or terminate such Republic Benefit Plans without
incurring any liability thereunder.
(h) Except as set forth in Section 5.13 of the Republic Disclosure
Memorandum, there has been no amendment to, announcement by Republic or any
Republic Company relating to, or change in employee participation or
coverage under, any Republic Benefit Plan that would increase materially
the expense of maintaining such Republic Benefit Plan above the level of
expense incurred therefor for the most recent fiscal year. Except as
disclosed in Section 5.13 of the Republic Disclosure Memorandum, neither
the execution of this Agreement nor the consummation of the transactions
contemplated hereby will (1) entitle any employees of Republic or any of
its Subsidiaries to severance pay or any increase in severance pay upon any
termination of employment prior to or after the date hereof, (2) accelerate
the time of payment or vesting or trigger any payment or funding (through a
grantor trust or otherwise) of compensation or benefits under, increase the
amount payable or trigger any other material obligation pursuant to, any of
the Republic Benefit Plans, (3) cause Republic to record additional
compensation expense on its income statement with respect to any stock
option or other equity award, or (4) result in any payments under any of
the Republic Benefit Plans which would not be deductible under Section
162(m) or Section 280G of the Internal Revenue Code.
(i) The aggregate dollar amount to be paid immediately prior to the
Effective Time pursuant to paragraphs 1, 2, 6 and 7 of Section 7.2(b) of
the Republic Disclosure Memorandum will not exceed $20 million (excluding
the cost of any continuing obligations and excluding any payments resulting
from compensating any officer or director of Republic for any excise tax
imposed by Section 4999 of the Internal Revenue Code or any interest or
penalties that are incurred with respect to such excise tax).
5.14 MATERIAL CONTRACTS. Except as set forth in the Republic Disclosure
Memorandum and except for Contracts filed as exhibits to Republic's Form
10-K for the fiscal year ended December 31, 1999 (or as an exhibit to
another Republic SEC Report filed before the date of this Agreement and
which Contract has been identified to Buyer), as of the date of this
Agreement, none of the Republic Companies, nor any of their respective
Assets, businesses, or operations, is a party to, or is bound or affected
by, or receives benefits under, (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate payments to any
Person in any calendar year in excess of $75,000, (ii) any Contract
relating to the borrowing of money by any Republic Company or the guarantee
by any Republic Company of any such obligation (other than Contracts
evidencing deposit liabilities, purchases of federal funds, fully-secured
repurchase agreements, and Federal Home Loan Bank advances of depository
institution Subsidiaries, trade payables, and Contracts relating to
borrowings or guarantees made in the ordinary course of business), (iii)
any exclusive dealing Contract or other Contract that materially limits the
ability of any Republic Company to compete in any line of business or with
any Person or in any area or that would so limit its ability (or the
ability of the Surviving Corporation or any of its Affiliates) after the
Effective Time and (iv) any other Contract or amendment thereto that is a
"material contract" within the meaning of Item 601(b)(10) of the SEC's
regulation S-K (together with all Contracts referred to in Sections 5.9 and
5.13(a) of this Agreement, the "Republic Contracts"). With respect to each
Republic Contract: (i) the Contract is in full force and effect; (ii) no
Republic Company is in Default thereunder, other than Defaults which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Republic; (iii) no Republic Company has repudiated or
waived any Material provision of any such Contract; and (iv) no other party
to any such Contract is, to the Knowledge of Republic, in Default in any
Material respect, other than Defaults which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Republic, or has repudiated or waived any Material provision thereunder.
Except for Federal Home Loan Bank advances or as set forth in Section 5.14
of the Republic Disclosure Memorandum, all of the indebtedness of any
Republic Company for money borrowed is repayable at any time by such
Republic Company without penalty or premium.
5.15 LEGAL PROCEEDINGS.
(a) There is no Litigation instituted or pending, or, to the Knowledge of
Republic, threatened against any Republic Company, or against any Asset,
interest, or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Republic,
nor are there any Orders of any Regulatory Authorities, other governmental
authorities, or arbitrators outstanding against any Republic Company, that
are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Republic.
(b) Section 5.15(b) of the Republic Disclosure Memorandum includes a
summary report of all Litigation as of the date of this Agreement to which
any Republic Company is a party and which names a Republic Company as a
defendant or cross-defendant.
5.16 REPORTS. Since December 31, 1996, or the date of organization if
later, each Republic Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that
it was required to file with any Regulatory Authorities, except failures to
file which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Republic. As of their respective
dates, each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all Material
respects with all applicable Laws.
5.17 STATEMENTS TRUE AND CORRECT. None of the information supplied or to be
supplied by any Republic Company or any Affiliate thereof regarding
Republic or such Affiliate for inclusion in the Registration Statement to
be filed by Buyer with the SEC will, when the Registration Statement
becomes effective, contain any untrue statement of a Material fact, or omit
to state any Material fact required to be stated thereunder or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. None of the information supplied or to be
supplied by any Republic Company or any Affiliate thereof for inclusion in
the Proxy Statement to be mailed to Republic's stockholders in connection
with the Stockholders' Meeting will, when first mailed to the stockholders
of Republic, contain any misstatement of Material fact, or omit to state
any Material fact required to be stated thereunder or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement or any
amendment thereof or supplement thereto, at the time of the Stockholders'
Meeting, omit to state any Material fact required to be stated thereunder
or necessary to correct any Material statement in any earlier communication
with respect to the solicitation of any proxy for the Stockholders'
Meeting. All documents that any Republic Company or any Affiliate thereof
is responsible for filing with any Regulatory Authority in connection with
the transactions contemplated hereby will comply as to form in all Material
respects with the provisions of applicable Law.
5.18 TAX AND REGULATORY MATTERS. No Republic Company or any Affiliate
thereof has taken or agreed to take any action, and as of the date hereof
Republic has no Knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement. As of the date
hereof, to the Knowledge of Republic there exists no fact, circumstance, or
reason why the requisite Consents referred to in Section 9.1(b) of this
Agreement cannot be received in a timely manner.
5.19 INTELLECTUAL PROPERTY. All of the Intellectual Property rights of
Republic and the Republic Subsidiaries are in full force and effect and, if
applicable, constitute legal, valid, and binding obligations of the
respective parties thereto, and there have not been, and, to the Knowledge
of Republic, there currently are not, any Defaults thereunder by Republic
or a Republic Subsidiary, where such Default is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Republic.
Republic or a Republic Subsidiary owns or is the valid licensee of all such
Intellectual Property rights free and clear of all Liens or claims of
infringement. Neither Republic nor any of the Republic Subsidiaries nor, to
the Knowledge of Republic, their respective predecessors has infringed the
Intellectual Property rights of others and, to the Knowledge of Republic,
none of the Intellectual Property rights as used in the business conducted
by Republic or the Republic Subsidiaries infringes upon or otherwise
violates the rights of any Person, nor has any Person asserted a claim of
such infringement. Except as disclosed in Section 5.19 of the Republic
Disclosure Memorandum, neither Republic nor the Republic Subsidiaries is
obligated to pay any royalties to any Person with respect to any such
Intellectual Property. Republic or a Republic Subsidiary owns or has the
valid right to use all of the Intellectual Property rights which it is
presently using, or in connection with performance of any material Contract
to which it is a party. No officer, director, or employee of Republic or
the Republic Subsidiaries is party to any Contract which requires such
officer, director, or employee to assign any interest in any Intellectual
Property or keep confidential any trade secrets, proprietary data, customer
information, or other business information or, except as disclosed in
Section 5.19 of the Republic Disclosure Memorandum, which restricts or
prohibits such officer, director, or employee from engaging in activities
competitive with any Person, including Republic or any of the Republic
Subsidiaries.
5.20 STATE TAKEOVER LAWS. Each Republic Company has taken all necessary
action to exempt the transactions contemplated by this Agreement and the
Termination Fee Agreement from any applicable "moratorium," "control
share," "fair price," "business combination," or other anti-takeover laws
and regulations of any state (collectively, "Takeover Laws") including
Sections 607.0901 and 607.0902 of the FBCA.
5.21 CHARTER PROVISIONS. Each Republic Company has taken all action so that
the entering into of this Agreement and the Termination Fee Agreement and
the consummation of the Merger and the other transactions contemplated by
this Agreement or the Termination Fee Agreement do not and will not result
in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws, or other governing instruments of any Republic
Company or restrict or impair the ability of Buyer or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a stockholder
with respect to, shares of any Republic Company that may be directly or
indirectly acquired or controlled by it.
5.22 RIGHTS AGREEMENT. Republic has taken all necessary action (including,
if required, redeeming all of the outstanding stock purchase rights or
amending or terminating the Republic Rights Agreement) so that the entering
into of this Agreement and the Termination Fee Agreement, and consummation
of the Merger and the other transactions contemplated hereby and thereby do
not and will not result in any Person becoming able to exercise any stock
purchase rights under the Republic Rights Agreement or enabling or
requiring the stock purchase rights to be separated from the shares of
Republic Common Stock to which they are attached or to be triggered or to
become exercisable. Republic has approved the amendment to the Republic
Rights Agreement substantially in the form of Exhibit 2 hereto.
5.23 DERIVATIVES. All interest rate swaps, caps, floors, option agreements,
futures and forward contracts, and other similar risk management
arrangements, whether entered into for Republic's own account, or for the
account of one or more of the Republic Subsidiaries or their customers,
were entered into (i) in accordance with prudent business practices and all
applicable Laws, and (ii) with counterparties believed to be financially
responsible.
5.24 FAIRNESS OPINION. Republic has received an opinion of Sandler ▇'▇▇▇▇▇
& Partners LP, dated as of the date of this Agreement, to the effect that,
in the opinion of such firm, the Exchange Ratio is fair, from a financial
point of view, to the stockholders of Republic.
5.25 NO BROKERS. No action has been taken by Republic that would give rise
to any valid claim against any Party for a brokerage commission, finder's
fee or other like payment with respect to the transactions contemplated by
this Agreement other than the Contract with Sandler ▇'▇▇▇▇▇ & Partners LP,
a copy of which has been previously delivered to Buyer.
5.26 REPUBLIC INDENTURE. No "Default" or "Event of Default" has
occurred under the Indenture (as defined in Section 9.2(f)), as such terms
are used in the Indenture.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Republic as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Buyer is a corporation duly
organized, validly existing, and in good standing under the Laws of the
State of North Carolina. Following its formation, Newco will be a
corporation duly organized, validly existing and in good standing under the
Laws of the State of North Carolina. Buyer has, and Newco will have, the
corporate power and authority to carry on its business as now conducted and
to own, lease, and operate its Material Assets. Buyer is, and Newco will
be, duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Buyer.
6.2 AUTHORITY; NO BREACH OF AGREEMENT.
---------------------------------
(a) Buyer has, and Newco will have, the corporate power and authority
necessary to execute, deliver, and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery, and performance of this Agreement and the consummation
of the transactions contemplated herein, including the Merger, have been
duly and validly authorized by all necessary corporate action in respect
thereof on the part of Buyer and will be duly and validly authorized by all
necessary corporate action in respect thereof on the part of Newco. This
Agreement represents a legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, and upon its
execution and delivery by Newco, this Agreement will represent a legal,
valid and binding obligation of Newco, enforceable against Newco in
accordance with its terms (except in all cases as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
receivership, conservatorship, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding may be
brought).
(b) Neither the execution and delivery of this Agreement by Buyer or Newco,
nor the consummation by Buyer or Newco of the transactions contemplated
hereby, nor compliance by Buyer or Newco with any of the provisions hereof,
will (i) conflict with or result in a breach of any provision of Buyer's
Articles of Incorporation or By-laws or Newco's Articles of Incorporation
or Bylaws, (ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any Asset of
any Buyer Company under, any Contract, Order or Permit of any Buyer
Company, where such Default or Lien, or any failure to obtain such Consent,
is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Buyer, or (iii) subject to receipt of the requisite
Consents referred to in Section 9.1(b) of this Agreement, violate any Law
or Order applicable to any Buyer Company or any of their respective
Material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws (including with respect to the listing on the New York
Stock Exchange of Buyer Common Stock to be issued in the Merger),
applicable state corporate and securities Laws, and rules of the NASD, and
other than Consents required from Regulatory Authorities, and other than
notices to or filings with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation with respect to any employee benefit plans, or
under the HSR Act, and other than Consents, filings, or notifications
which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Buyer, no
notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by Buyer or Newco of the Merger and the
other transactions contemplated in this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of Buyer consists, as of
the date of this Agreement, of 1,000,000,000 shares of Buyer Common Stock,
of which not more than 204,000,000 (exclusive of treasury stock) shares
were issued and outstanding as of September 30, 2000, and 50,000,000 shares
of preferred stock, par value $5.00 per share, of Buyer, of which no shares
were outstanding as of September 30, 2000. All of the issued and
outstanding shares of Buyer Common Stock are, and all of the shares of
Buyer Common Stock to be issued in exchange for shares of Republic Common
Stock upon consummation of the Merger, when issued in accordance with the
terms of this Agreement, will be, duly and validly issued and outstanding
and fully paid and nonassessable. None of the outstanding shares of Buyer
Common Stock has been, and none of the shares of Buyer Common Stock to be
issued in exchange for shares of Republic Common Stock upon consummation of
the Merger will be, issued in violation of any preemptive rights of the
current or past stockholders of Buyer.
6.4 BUYER SUBSIDIARIES. Other than as is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Buyer, (i)
Buyer or one of its wholly owned Subsidiaries owns all of the issued and
outstanding shares of capital stock of each Buyer Subsidiary that is a
"Significant Subsidiary" (as such term is defined in Regulation S-X
promulgated under the 1934 Act), (ii) no equity securities of any such
Buyer Subsidiary are or may become required to be issued (other than to
Buyer or a wholly owned Buyer Subsidiary) by reason of any Rights, (iii)
there are no Contracts by which any such Buyer Subsidiary is bound to issue
(other than to Buyer or a wholly owned Buyer Subsidiary) additional shares
of its capital stock or Rights or by which any such Buyer Company is or may
be bound to transfer any shares of the capital stock of any Buyer
Subsidiary (other than to Buyer or a wholly owned Buyer Subsidiary), (iv)
there are no Contracts relating to the rights of any Buyer Company to vote
or to dispose of any shares of the capital stock of any such Buyer
Subsidiary and (v) all of the shares of capital stock of each such Buyer
Subsidiary held by a Buyer Company are fully paid and nonassessable (except
pursuant to 12 U.S.C. ss.55) and are owned by the Buyer Company free and
clear of any Lien. Each Buyer Subsidiary is duly organized, validly
existing, and (to the extent applicable) in good standing under the Laws of
the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate
its Assets and to carry on its business as now conducted. Each Buyer
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Buyer.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Buyer has filed all of Buyer's SEC Documents required to be filed with
the SEC since January 1 of the second complete fiscal year preceding the
date of this Agreement (collectively, the "Buyer SEC Reports"). The Buyer
SEC Reports (i) at the time filed, complied in all Material respects with
the applicable requirements of the 1933 Act and the 1934 Act, as the case
may be, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the
date of such filing) contain any untrue statement of a Material fact or
omit to state a Material fact required to be stated in such Buyer SEC
Reports or necessary in order to make the statements in such Buyer SEC
Reports, in light of the circumstances under which they were made, not
misleading.
(b) Each of the Buyer Financial Statements (including, in each case, any
related notes) contained in the Buyer SEC Reports, including any Buyer SEC
Reports filed after the date of this Agreement until the Effective Time,
complied or will comply as to form in all Material respects with the
applicable published rules and regulations of the SEC with respect thereto,
was or will be prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the
notes to such financial statements or, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC), and fairly presented or will fairly
present the consolidated financial position of Buyer and its Subsidiaries
as at the respective dates and the consolidated results of its operations
and cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be Material in amount or
effect.
6.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1999, except
as disclosed in the Buyer Financial Statements delivered prior to the date
of this Agreement, there have been no events, changes or occurrences which
have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Buyer.
6.7 COMPLIANCE WITH LAWS. Buyer is duly registered as a financial holding
company under the BHC Act. Each Buyer Company has in effect all Permits
necessary for it to own, lease, or operate its Material Assets and to carry
on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Buyer, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Buyer.
None of the Buyer Companies:
(a) is in violation of any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Buyer; and
(b) has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Buyer Company is not
in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Buyer, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Buyer, or (iii) requiring any Buyer
Company (x) to enter into or consent to the issuance of a cease and desist
order, formal agreement, directive, commitment, or memorandum of
understanding, or (y) to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any manner
relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends (and no Buyer Company has entered
into, consented to or adopted any of the preceding). To Buyer's Knowledge,
no grounds for any of the foregoing in this Section 6.7(b) exist.
6.8 LEGAL PROCEEDINGS. Other than as set forth in the Buyer SEC Reports
filed on or before the date of this Agreement, there is no Litigation
instituted or pending, or, to the Knowledge of Buyer, threatened against
any Buyer Company, or against any Asset, employee benefit plan, interest,
or right of any of them, that is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Buyer, nor are there any
Orders of any Regulatory Authorities, other governmental authorities, or
arbitrators outstanding against any Buyer Company, that are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on Buyer.
6.9 STATEMENTS TRUE AND CORRECT. None of the information supplied or to be
supplied by any Buyer Company or any Affiliate thereof regarding Buyer or
such Affiliate for inclusion in the Registration Statement to be filed by
Buyer with the SEC will, when the Registration Statement becomes effective,
contain any untrue statement of a Material fact, or omit to state any
Material fact required to be stated thereunder or necessary to make the
statements therein not misleading. None of the information supplied or to
be supplied by any Buyer Company or any Affiliate thereof for inclusion in
the Proxy Statement to be mailed to Republic's stockholders in connection
with the Stockholders' Meeting, will, when first mailed to the stockholders
of Republic, contain any misstatement of Material fact, or omit to state
any Material fact required to be stated thereunder or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement or any
amendment thereof or supplement thereto, at the time of the Stockholders'
Meeting, omit to state any Material fact required to be stated thereunder
or necessary to correct any Material statement in any earlier communication
with respect to the solicitation of any proxy for the Stockholders'
Meeting. All documents that any Buyer Company or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all Material
respects with the provisions of applicable Law.
6.10 TAX AND REGULATORY MATTERS. No Buyer Company or any Affiliate thereof
has taken or agreed to take any action, and as of the date hereof Buyer has
no Knowledge of any fact or circumstance that is reasonably likely to (i)
prevent the Merger from qualifying as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code, or (ii) materially impede
or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement. As of the date hereof, to the Knowledge
of Buyer there exists no fact, circumstance, or reason why the requisite
Consents referred to in Section 9.1(b) of this Agreement cannot be received
in a timely manner.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF REPUBLIC. Unless the prior written consent of
Buyer shall have been obtained, and except as otherwise expressly
contemplated herein or set forth in Section 7.1 or Section 7.2 of the
Republic Disclosure Memorandum, Republic shall and shall cause each of its
Subsidiaries to (i) operate its business only in the usual, regular, and
ordinary course, (ii) preserve intact its business organization and Assets
and maintain its rights and franchises and(iii) use its reasonable efforts
to maintain its current employee relationships.
7.2 NEGATIVE COVENANTS OF REPUBLIC. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement,
Republic covenants and agrees that, except as set forth in Section 7.2 of
the Republic Disclosure Memorandum, it will not do or agree or commit to
do, or permit any of its Subsidiaries to do or agree or commit to do, any
of the following without the prior written consent of Buyer, which consent
shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws, or other governing
instruments of any Republic Company, or
(b) incur, guarantee, or otherwise become responsible for, any additional
debt obligation or other obligation for borrowed money (other than
indebtedness of a Republic Company to Republic or wholly owned Republic
Subsidiary) in excess of an aggregate of $500,000 (for the Republic
Companies on a consolidated basis), except in the ordinary course of
business consistent with past practices (which shall include, for Republic
Subsidiaries that are depository institutions, creation of deposit
liabilities, purchases of federal funds, advances from the Federal Reserve
Bank or Federal Home Loan Bank, and entry into repurchase agreements fully
secured by U.S. government or agency securities, to the extent each are
conducted in the ordinary course and consistent with past practice), or
impose, or suffer the imposition, on any Asset of any Republic Company of
any Material Lien or permit any such Material Lien to exist (other than in
connection with deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary course of
business consistent with past practice, the satisfaction of legal
requirements in the exercise of trust powers, and Liens in effect as of the
date hereof that are disclosed in the Republic Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any Rights with respect to any shares, of the
capital stock of any Republic Company, or make, declare, pay or set aside
for payment any dividend or other distribution in respect of any capital
stock of any Republic Company; provided that (i) Republic may (to the
extent legally able to do so), but shall not be obligated to, declare and
pay regular quarterly cash dividends on the Republic Common Stock in an
amount per share not to exceed $.06 and (ii) Republic Subsidiaries that are
wholly owned by Republic or another wholly owned Republic Subsidiary may
pay dividends to Republic or such other wholly owned Republic Subsidiary;
and provided, further, that, notwithstanding the provisions of Section 1.3
after December 31, 2000, the Board of directors of Republic shall cause its
regular quarterly dividend record dates and payment dates for Republic
Common Stock to be the same as Buyer's regular quarterly dividend record
dates and payment dates for Buyer's Common Stock, and Republic shall not
thereafter change its regular dividend payment dates and record dates (it
being the intention of the Parties hereto that holders of Republic Common
Stock shall not receive more than one dividend, or fail to receive one
dividend, for any single calendar quarter); or
(d) except for this Agreement or pursuant to the exercise of Rights
outstanding as of the date of this Agreement and pursuant to the terms
thereof in existence on the date of this Agreement, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise permit
to become outstanding, any additional shares of Republic Common Stock or
any capital stock of any Republic Company or any Rights with respect to any
of the preceding (including any stock appreciation right, and any option,
warrant, conversion, or other right to acquire any such stock, or any
security convertible into any such stock); or
(e) adjust, split, combine, or reclassify any capital stock of any Republic
Company or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of such capital stock, or sell,
lease, mortgage, or otherwise dispose of or otherwise encumber (i) any
shares of capital stock of any Republic Subsidiary (unless any such shares
of stock are sold or otherwise transferred to Republic or a wholly owned
Republic Subsidiary) or (ii) any Asset other than in the ordinary course of
business consistent with past practice for reasonable and adequate
consideration; or
(f) except for purchases of U.S. Treasury securities or U.S. Government
agency securities, which in either case have maturities of three years or
less, purchase any securities or make any Material investment, either by
purchase of stock or securities, contributions to capital, Asset transfers,
or purchase of any Assets, in any Person other than a wholly-owned Republic
Subsidiary, or otherwise acquire direct or indirect control over any
Person, other than in connection with (i) foreclosures in the ordinary
course of business, (ii) acquisitions of control by a depository
institution Subsidiary in its fiduciary capacity, or (iii) the creation of
new wholly-owned Subsidiaries organized to conduct or continue activities
otherwise permitted by this Agreement; or
(g) enter into or amend or renew any employment, consulting, severance or
similar Contract or arrangements with any director, officer, employee or
consultant of any Republic Company, or grant any salary or wage increase or
increase any employee benefit (including incentive or bonus payments),
except (i) for normal individual increases in compensation to employees in
the ordinary course of business consistent with past practice, (ii) for
other changes that are required by Law, (iii) as expressly provided in
Section 7.2 of the Republic Disclosure Memorandum, or (iv) for grants of
awards to newly hired employees consistent with past practice; or
(h) enter into, establish, adopt or amend (except (i) as may be required by
Law, (ii) as, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any of the following or (iii) as
expressly provided in Section 7.2 of the Republic Disclosure Memorandum)
any pension, retirement, stock option, stock purchase, savings, profit
sharing, deferred compensation, consulting, bonus, severance, group
insurance or other employee benefit, incentive or welfare contract, plan or
arrangement, or any trust agreement (or similar arrangement) related
thereto, in respect of any director, officer, employee or consultant of any
Republic Company, or take any action to accelerate the vesting or
exercisability of stock options, restricted stock or other compensation or
benefits payable thereunder; or
(i) make or change any Material Tax election, change any Material annual
Tax accounting period, adopt or change any Material method of Tax
accounting, enter into any material closing agreement, settle any material
Tax claim or assessment, surrender or compromise any right to claim a
material Tax refund, consent to any extension or waiver of the limitations
period applicable to any material Tax claim or assessment, in each case,
other than any of the foregoing actions that (i) are not Material and which
are taken in the ordinary and usual course of business consistent with past
practice or (ii) are required to conform to changes in Tax Laws; or
(j) implement or adopt any change in its accounting principles, practices
or methods or systems of internal accounting controls, except as may be
required to conform to changes in regulatory accounting requirements or
GAAP; or
(k) commence any Litigation (other than as necessary for the prudent
operation of its business or as Republic may deem necessary to enforce its
rights under this Agreement) or settle any Litigation (other than any
Litigation involving solely money damages in an amount, individually or in
the aggregate for all such settlements, that is not Material and that does
not involve or create precedent for claims, actions or proceedings that are
reasonably likely to be Material; or
(l) except in the ordinary course of business, enter into, modify, amend,
or terminate any Material Contract or waive, release, compromise, or assign
any Material rights or claims; or
(m) knowingly take any action that is intended or is reasonably likely to
result in (i) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any Material respect at any time at
or prior to the Effective Time, (ii) any of the conditions to the Merger
set forth in Article 9 not being satisfied, (iii) a Material violation of
any provision of this Agreement or (iv) a delay in the Effective Time
beyond the date set forth in Section 10.1(e) of this Agreement, except, in
each case, as may be required by Law; or
(n) except as required by Law, (i) implement or adopt any Material change
in its interest rate and other risk management policies, procedures or
practices; (ii) fail to follow its existing policies or practices with
respect to managing its exposure to interest rate and other risk; or (iii)
fail to use commercially reasonable means to avoid any material increase in
its aggregate exposure to interest rate risk.
7.3 NEGATIVE COVENANTS OF BUYER. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Buyer
covenants and agrees that it will not, or permit any of its Subsidiaries
to, without the prior written consent of Republic, which consent shall not
be unreasonably withheld, knowingly take any action that is intended or is
reasonably likely to result in (i) any of its representations and
warranties set forth in this Agreement being or becoming untrue in any
Material respect at any time at or prior to the Effective Time, (ii) any of
the conditions to the Merger set forth in Article 9 not being satisfied,
(iii) a Material violation of any provision of this Agreement or (iv) a
delay in the Effective Time beyond the date set forth in Section 10.1(e) of
this Agreement; except, in each case, as may be required by Law.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of
its Subsidiaries which (i) is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on it or (ii) would cause or
constitute a Material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.5 REPORTS. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of
this Agreement and the Effective Time and shall deliver to the other Party
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the SEC, such
financial statements will fairly present the consolidated financial
position of the entity filing such statements as of the dates indicated and
the consolidated results of operations, changes in stockholders' equity,
and cash flows for the periods then ended in accordance with GAAP (subject
in the case of interim financial statements to normal recurring year-end
adjustments that are not Material). As of their respective dates, such
reports filed with the SEC will comply in all Material respects with the
Securities Laws and will not contain any untrue statement of a Material
fact or omit to state a Material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory Authority
shall be prepared in accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER APPROVAL. Buyer
agrees to prepare the Registration Statement (including the Proxy Statement
and all related documents). Each of the Parties agrees to cooperate, and to
cause its Subsidiaries to cooperate, with the other, its counsel and its
accountants, in preparation of the Registration Statement and the Proxy
Statement; and provided that Republic and its Subsidiaries have cooperated
as required above, Buyer agrees to file the Registration Statement with the
SEC as soon as reasonably practicable. Each of the Parties shall use its
reasonable efforts to cause the Registration Statement to become effective
under the 1933 Act as promptly as practicable after the filing thereof, and
Buyer shall use its reasonable efforts to take any action required to be
taken under the applicable state Blue Sky or securities Laws in connection
with the issuance of the shares of Buyer Common Stock upon consummation of
the Merger. Republic shall furnish all information concerning it, its
directors and officers and the holders of its capital stock as Buyer may
reasonably request for inclusion in the Registration Statement. Republic
shall call and cause to be convened a Stockholders' Meeting, to be held as
soon as reasonably practicable after the Registration Statement is declared
effective by the SEC, for the purpose of voting upon approval of this
Agreement and such other related matters as it deems appropriate. In
connection with the Stockholders' Meeting, (i) the Board of Directors of
Republic shall recommend to its stockholders the approval of the matters
submitted for approval, and (ii) the Board of Directors and officers of
Republic shall use their reasonable efforts to obtain such stockholders'
approval, provided that Republic may withdraw, modify, or change in an
adverse manner to Buyer its recommendations if the Board of Directors of
Republic, after having consulted with and based upon the advice of outside
counsel, determines in good faith that the failure to so withdraw, modify,
or change its recommendation could reasonably constitute a breach of the
fiduciary duties of Republic's Board of Directors under applicable Law. In
addition, nothing in this Section 8.1 or elsewhere in this Agreement shall
(i) prohibit accurate disclosure by Republic of information that is
required to be disclosed in the Registration Statement or the Proxy
Statement or in any other document required to be filed with the SEC
(including, without limitation, a Solicitation/Recommendation Statement on
Schedule 14D-9) or otherwise required to be publicly disclosed by
applicable Law or regulations or rules of the NASD or (ii) relieve Republic
from its obligation to call and convene the Stockholders' Meeting. Each of
Buyer and Republic further agrees that if it shall become aware prior to
the Effective Time of any information furnished by it that would cause any
of the statements in the Proxy Statement to be false or misleading with
respect to any material fact, or to omit to state any material fact
necessary to make the statements therein not false or misleading, to
promptly inform the other party thereof and to take the necessary steps to
correct the Proxy Statement.
8.2 APPLICATIONS. Buyer and Republic and their respective Subsidiaries
shall promptly prepare and file, and cooperate with each other in the
preparation and, where appropriate, filing of, applications with all
Regulatory Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents necessary to
consummate the transactions contemplated by this Agreement. Each Party will
have the right to review in advance, and to the extent practicable each
will consult with each other, subject to applicable laws relating to the
exchange of information, with respect to all written information submitted
to all Regulatory Authorities, and will provide the other with copies of
written communications received by it from any Regulatory Authorities, in
each case with respect to the transactions contemplated hereby.
8.3 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, Buyer shall cause Newco to execute and file
the North Carolina Articles of Merger with the Secretary of State of the
State of North Carolina and the Florida Articles of Merger with the
Secretary of State of the State of Florida in connection with the Closing.
8.4 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper,
or advisable under applicable Laws to consummate and make effective, as
soon as reasonably practicable after the date of this Agreement, the
transactions contemplated by this Agreement, including, without limitation,
(i) using its reasonable efforts to lift or rescind any Order adversely
affecting its ability to consummate the transactions contemplated herein
and to cause to be satisfied the conditions referred to in Article 9 of
this Agreement and (ii) if necessary, the filing of any amendments or
supplements to the Registration Statement or Proxy Statement or a
resolicitation of proxies as a consequence of an acquisition or business
combination of Buyer or any of its Subsidiaries; provided, that nothing
herein shall preclude either Party from exercising its rights under this
Agreement. Each Party shall use, and shall cause each of its Subsidiaries
to use, its reasonable efforts to obtain all Consents necessary or
desirable for the consummation of the transactions contemplated by this
Agreement. Each Party agrees, upon request, to furnish the other party with
all information concerning itself, its Subsidiaries, directors, officers
and stockholders and such other matters as may be necessary or advisable in
connection with any filing, notice or application by or on behalf of such
other Party with respect to any such Consent.
8.5 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep the other Party
advised of all Material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or
cause to be made such investigation of the business and properties of it
and its Subsidiaries and of their respective financial and legal conditions
as the other Party reasonably requests, provided that such investigation
shall be reasonably related to the transactions contemplated hereby and
shall not interfere unnecessarily with normal operations. No investigation
by a Party shall affect the representations and warranties of the other
Party.
(b) Each Party shall, and shall cause its advisers and agents to, maintain
the confidentiality of all confidential information furnished to it by the
other Party concerning its and its Subsidiaries' businesses, operations,
and financial positions to the extent required by, and in accordance with,
confidentiality agreements between the Parties, and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to
the Effective Time, each Party shall promptly return or certify the
destruction of all documents and copies thereof, and all work papers
containing confidential information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the
other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a
Material breach of any representation, warranty, covenant, or agreement of
the other Party or which has had or is reasonably likely to have a Material
Adverse Effect on the other Party; provided, however, that the giving of
such notice shall not be dispositive of the occurrence of such breach or a
Material Adverse Effect.
(d) Neither Party nor any of their respective Subsidiaries shall be
required to provide access to or to disclose information where such access
or disclosure would violate or prejudice the rights of its customers,
jeopardize the attorney-client or similar privilege with respect to such
information or contravene any Law, Order or Contract entered into prior to
the date of this Agreement. The Parties will use their reasonable efforts
to make appropriate substitute disclosure arrangements, to the extent
practicable, in circumstances in which the restrictions of the preceding
sentence apply.
8.6 PRESS RELEASES. Prior to the Effective Time, Buyer and Republic shall
consult with each other as to the form and substance of any press release
materially related to this Agreement or any other transaction contemplated
hereby; provided, that nothing in this Section 8.6 shall be deemed to
prohibit any Party from making any disclosure which its counsel deems
necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law or by the rules of the New York Stock Exchange.
8.7 CERTAIN ACTIONS. Except with respect to this Agreement and the
transactions contemplated hereby, no Republic Company nor any Affiliate
thereof nor any Representative thereof retained by any Republic Company
shall, directly or indirectly, initiate, solicit, encourage or knowingly
facilitate (including by way of furnishing information) any inquiries or
the making of any Acquisition Proposal. Notwithstanding anything herein to
the contrary, Republic and its Board of Directors shall be permitted (i) to
the extent applicable, to comply with Rule 14d-9 and Rule 14e-2 promulgated
under the 1934 Act with regard to an Acquisition Proposal, (ii) to engage
in any discussions or negotiations with, or provide any information to, any
Person in response to an unsolicited bona fide written Acquisition Proposal
by any such Person, if and only to the extent that (a) Republic's Board of
Directors concludes in good faith and consistent with its fiduciary duties
to Republic's stockholders under applicable Law that such Acquisition
Proposal would reasonably be expected to result in a Superior Proposal, (b)
prior to providing any information or data to any Person in connection with
an Acquisition Proposal by any such Person, Republic's Board of Directors
receives from such Person an executed confidentiality agreement containing
terms at least as stringent as those contained in the Republic
Confidentiality Agreement, and (c) prior to providing any information or
data to any Person or entering into discussions or negotiations with any
Person, Republic's Board of Directors notifies Buyer promptly of such
inquiries, proposals, or offers received by, any such information requested
from, or any such discussions or negotiations sought to be initiated or
continued with, any of its Representatives indicating, in connection with
such notice, the name of such Person and the material terms and conditions
of any inquiries, proposals or offers. Republic agrees that it will, and
will cause its officers, directors and Representatives to, immediately
cease and cause to be terminated any activities, discussions, or
negotiations existing as of the date of this Agreement with any parties
conducted heretofore with respect to any Acquisition Proposal. Republic
agrees that it will use reasonable best efforts to promptly inform its
directors, officers, key employees, agents, and Representatives of the
obligations undertaken in this Section 8.7. Nothing in this Section 8.7
shall (i) permit Republic to terminate this Agreement (except as
specifically provided in Article 10 of this Agreement) or (ii) affect any
other obligation of Buyer or Republic under this Agreement.
8.8 TAX TREATMENT. Each of the Parties undertakes and agrees to use its
reasonable efforts to cause the Merger, and to take no action which would
cause the Merger not, to qualify for treatment as a "reorganization" within
the meaning of Section 368(a) of the Internal Revenue Code for federal
income tax purposes.
8.9 STATE TAKEOVER LAWS. Each Republic Company shall take all necessary
steps to exempt the transactions contemplated by this Agreement from, and
if necessary, the Parties shall challenge the validity or applicability of,
any applicable Takeover Laws.
8.10 CHARTER PROVISIONS. Each Republic Company shall take all necessary
action to ensure that the entering into of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby
do not and will not result in the grant of any rights to any Person under
the Articles of Incorporation, Bylaws, or other governing instruments of
any Republic Company or restrict or impair the ability of Buyer or any of
its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any Republic Company that may be
directly or indirectly acquired or controlled by it.
8.11 RIGHTS AGREEMENT. Republic shall take all necessary action (including,
if required, redeeming all of the outstanding stock purchase rights or
amending or terminating the Republic Rights Agreement) so that the entering
into of this Agreement and consummation of the Merger and the other
transactions contemplated hereby do not and will not result in any Person
becoming able to exercise any stock purchase rights under the Republic
Rights Agreement or enabling or requiring the stock purchase rights to be
separated from the shares of Republic Common Stock to which they are
attached or to be triggered or to become exercisable. Republic shall use
all reasonable efforts to enter into an amendment to the Republic Rights
Agreement as soon as practicable after the date hereof (and in any event
prior to the Effective Time) in substantially the form of Exhibit 2.
8.12 AGREEMENT OF AFFILIATES. Republic has disclosed in Section 8.12 of the
Republic Disclosure Memorandum each Person whom it reasonably believes may
be deemed an "affiliate" of Republic for purposes of Rule 145 under the
1933 Act. Republic shall use its reasonable efforts to cause each Person
who may be deemed to be an "affiliate" of Republic for purposes of Rule 145
under the 1933 Act as of the date of the Stockholders' Meeting to deliver
to Buyer not later than the Effective Time, a written agreement, in
substantially the form of Exhibit 3, providing that such Person will not
sell, pledge, transfer, or otherwise dispose of the shares of Republic
Common Stock held by such Person except as contemplated by such agreement
or by this Agreement and will not sell, pledge, transfer, or otherwise
dispose of the shares of Buyer Common Stock to be received by such Person
upon consummation of the Merger except in compliance with applicable
provisions of the 1933 Act and the rules and regulations thereunder. Shares
of Buyer Common Stock issued to such affiliates of Republic in exchange for
shares of Republic Common Stock shall not be transferable, regardless of
whether each such affiliate has provided the written agreement referred to
in this Section 8.12 (and Buyer shall be entitled to place restrictive
legends upon certificates for shares of Buyer Common Stock issued to
affiliates of Republic pursuant to this Agreement to enforce the provisions
of this Section 8.12), except as provided herein. Buyer shall not be
required to maintain the effectiveness of the Registration Statement under
the 1933 Act for the purposes of resale of Buyer Common Stock by such
affiliates.
8.13 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time, Buyer
shall provide generally to officers and employees of the Republic
Companies, who at or after the Effective Time become employees of a Buyer
Company ("Continuing Employees"), employee benefits under employee benefit
plans (other than stock option or other plans involving the potential
issuance of Buyer Common Stock except as set forth in this Section 8.13),
on terms and conditions which when taken as a whole are substantially
similar to those currently provided by the Buyer Companies to their
similarly situated officers and employees. For purposes of participation
and vesting (but not accrual of benefits) under such employee benefit
plans, (i) service under any qualified defined benefit plans of any
Republic Company or any of its predecessors shall be treated as service
under Buyer's qualified defined benefit plans, (ii) service under any
qualified defined contribution plans of any Republic Company or any of its
predecessors shall be treated as service under Buyer's qualified defined
contribution plans, and (iii) service under any other employee benefit
plans of any Republic Company or any of its predecessors shall be treated
as service under any similar employee benefit plans maintained by Buyer.
Buyer shall cause the Buyer welfare benefit plans that cover the Continuing
Employees after the Effective Time to (i) waive any waiting period and
restrictions and limitations for preexisting conditions or insurability
(except for pre-existing conditions that were excluded under Republic's
welfare benefit plans), and (ii) cause any deductible, co-insurance, or
maximum out-of-pocket payments made by the Continuing Employees under
Republic's welfare benefit plans to be credited to such Continuing
Employees under the Buyer welfare benefit plans, so as to reduce the amount
of any deductible, co-insurance, or maximum out-of-pocket payments payable
by the Continuing Employees under the Buyer welfare benefit plans. The
continued coverage of the Continuing Employees under the employee benefits
plans maintained by Republic and/or any Republic Subsidiary immediately
prior to the Effective Time during a transition period shall be deemed to
provide the Continuing Employees with benefits that are no less favorable
than those offered to other employees of Buyer and its Subsidiaries,
provided that after the Effective Time there is no Material reduction
(determined on an overall basis) in the benefits provided under the
Republic employee benefit plans. Buyer shall and shall cause Republic and
its Subsidiaries to honor all employment, severance, consulting, and other
compensation Contracts disclosed in Sections 7.2 or 8.13 of the Republic
Disclosure Memorandum to Buyer between any Republic Company and any current
or former director, officer, or employee thereof, and all provisions for
vested benefits or other vested amounts earned or accrued through the
Effective Time under the Republic Benefit Plans. Except as expressly
provided in this Section 8.13, nothing contained herein shall in any way
limit or restrict the ability of Buyer to amend, modify, or terminate any
employee benefit plan, including any Republic Benefit Plan, following the
Effective Time. Buyer shall be responsible for the fees related to the
termination of the Republic Benefit Plans.
8.14 INDEMNIFICATION.
(a) From and after the Effective Time and for a period of six years
thereafter, Buyer shall indemnify, defend and hold harmless the present
directors and officers of the Republic Companies (each, an "Indemnified
Party") against all costs or expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative
or investigative, arising out of actions or omissions occurring at or prior
to the Effective Time (including, without limitation, the transactions
contemplated by this Agreement) to the fullest extent that Republic is
permitted to indemnify (and advance expenses to) its directors and officers
under the laws of the State of Florida, the Republic's Articles of
Incorporation and Republic's Bylaws as in effect on the date hereof;
provided that any determination required to be made with respect to whether
an officer's or director's conduct complies with the standards set forth
under Florida law, such Articles of Incorporation and such Bylaws shall be
made by independent counsel (which shall not be counsel that provides
material services to Buyer) selected by Buyer and reasonably acceptable to
such officer or director; and provided, further, that in the absence of
applicable Florida judicial precedent to the contrary, such counsel, in
making such determination, shall presume such officer's or director's
conduct complied with such standard and Buyer shall have the burden to
demonstrate that such officer's or director's conduct failed to comply with
such standard. All rights to indemnification in respect of any claim
assertion or made within the six-year period referred to above shall
continue until the final disposition of such claim.
(b) For a period of three years from the Effective Time, Buyer shall use
its reasonable efforts to provide that portion of director's and officer's
liability insurance that serves to reimburse the present and former
officers and directors of Republic or any of its Subsidiaries (determined
as of the Effective Time) (as opposed to Republic) with respect to claims
against such directors and officers arising from facts or events which
occurred before the Effective Time, which insurance shall contain at least
the same coverage and amounts, and contain terms and conditions no less
advantageous, as that coverage currently provided by Republic; provided,
however, that in no event shall Buyer be required to expend more than 150
percent of the current amount expended by Republic (the "Insurance Amount")
to maintain or procure such directors and officers insurance coverage;
provided, further, that if Buyer is unable to maintain or obtain the
insurance called for by this Section 8.14(b), Buyer shall use its
reasonable best efforts to obtain as much comparable insurance as is
available for the Insurance Amount; provided, further, that officers and
directors of Republic or any Subsidiary may be required to make application
and provide customary representations and warranties to Buyer's insurance
carrier for the purpose of obtaining such insurance.
(c) Any Indemnified Party wishing to claim indemnification under Section
8.14(a), upon learning of any claim, action, suit, proceeding or
investigation described above, shall promptly notify Buyer thereof;
provided that the failure so to notify shall not affect the obligations of
Buyer under Section 8.14(a) unless and to the extent that Buyer is actually
prejudiced as a result of such failure.
(d) If Buyer or any of its successors or assigns shall consolidate with or
merge into any other Person and shall not be the continuing or surviving
Person of such consolidation or merger or shall transfer all or
substantially all of its Assets to any Person, then and in each case,
proper provision shall be made so that the successors and assigns of Buyer
shall assume the obligations set forth in this Section 8.14.
(e) The provisions of this Section 8.14 are intended to be for the benefit
of and shall be enforceable by, each Indemnified Party, his or her heirs
and representatives.
8.15 EXEMPTION FROM LIABILITY UNDER SECTION 16(B). If Republic delivers to
Buyer in a timely fashion prior to the Effective Time accurate information
regarding those officers and directors of Republic subject to the reporting
requirements of Section 16(a) of the 1934 Act (the "Republic Insiders"),
the number of shares of Republic Common Stock held or to be held by each
such Republic Insider expected to be exchanged for the Buyer Common Stock
in the Merger, and the number and description of the options to purchase
shares of Republic Common Stock held by each such Republic Insider and
expected to be converted into options to purchase the Buyer Common Stock in
the Merger, the Board of Directors of Buyer, or a committee of non-employee
directors thereof (as such term is defined for purposes of Rule 16b-3(d)
under the 1934 Act), shall reasonably promptly thereafter, and in any event
prior to the Effective Time, adopt a resolution providing that the receipt
by the Republic Insiders of the Buyer Common Stock in exchange for shares
of Republic Common Stock, and of options to purchase shares of the Buyer
Corporation Common Stock upon conversion of options to purchase Republic
Common Stock, in each case pursuant to the transactions contemplated by
this Agreement and to the extent such securities are listed in the
information provided by Republic, are approved by such Board of Directors
or by such committee thereof, and are intended to be exempt from Liability
pursuant to Section 16(b) of the 1934 Act, such that any such receipt shall
be so exempt. Republic shall take all such steps as may be required to
cause the transactions contemplated by Section 3.5 and any other
dispositions of Republic equity securities (including derivative
securities) in connection with this Agreement by each individual who is a
director or officer of Republic to be exempt under Rule 16b-3 promulgated
under the 1934 Act.
8.16 ASSUMPTION OF REPUBLIC DEBENTURES. Newco agrees to assume all
obligations under the Indenture, including executing any supplemental
indenture thereto.
8.17 ACCOUNTANTS' LETTERS. Republic shall use its reasonable efforts to
cause to be delivered to Buyer, and to Buyer's directors and officers who
sign the Registration Statement, a letter of Ernst & Young LLP independent
auditors with respect to Republic, dated (i) the date on which the
Registration Statement shall become effective and (ii) a date shortly prior
to the Effective Time, and addressed to Buyer, and such directors and
officers, in form and substance customary for "comfort" letters delivered
by independent accountants in accordance with Statement of Accounting
Standards No. 72.
8.18 CERTAIN POLICIES. Prior to the Effective Time, Republic shall,
consistent with generally accepted accounting principles and on a basis
mutually satisfactory to it and Buyer, modify and change its loan,
litigation and real estate valuation policies and practices (including loan
classifications and levels of reserves) so as to be applied on a basis that
is consistent with those of Buyer; provided, however, that Republic shall
not be obligated to take any such action pursuant to this Section 8.18
unless and until Buyer acknowledges that all conditions to its obligation
to consummate the Merger have been satisfied or waived and all rights to
terminate this Agreement have been waived.
8.19 LOCAL ADVISORY BOARD. From the Effective Time until the earlier of
time that (i) the Subsidiary Combination is consummated or (ii) Buyer
otherwise determines to replace the directors of Republic Security Bank,
Buyer shall permit the non-employee directors of Republic Security Bank as
of the date of this Agreement to continue as directors thereof. From the
earlier of (i) and (ii) in the preceding sentence, Buyer will cause
Wachovia Bank, N.A. to create a local advisory board for Palm Beach,
Florida and to appoint to the advisory board each such non-employee
director who is willing to serve. The local advisory board and each
director's appointment will continue in accordance with Wachovia Bank,
N.A.'s customary practices for a minimum period of two years from the
Effective Time. From the Effective Time, each continuing member of Republic
Security Bank's Board of directors or of the advisory board shall receive
fees in accordance with Buyer's usually and customary practices, but in no
event less than $1,200 annually (with an appropriate reduction in fees for
unattended meetings). Service on the Board of Directors of Republic
Security Bank and the advisory board shall be treated as service with Buyer
for purposes of any Republic Rights outstanding at the Effective Time under
Republic's 1991 Director Stock Option Plan, 1993 Director Stock Option
Plan, 1997 Performance Incentive Plan, or the plans of any company
previously acquired by Republic. Notwithstanding any other provision in
this Section 8.19, Buyer shall not be obligated to permit any person to
continue as a director of Republic Security Bank or to serve on the
advisory board unless such director shall have exercised on or prior to the
Effective Time each of the options and warrants that are beneficially owned
by him or her and that would be in-the-money at the Effective Time.
8.20 AMENDMENT OF INDENTURE. As promptly as practicable after the date
hereof, Republic shall use reasonable efforts to amend the Indenture in
such manner as shall be necessary to permit either Buyer's counsel or
Republic's counsel to render the opinion contemplated by Section 9.1(g).
8.21 FORMATION OF NEWCO. As soon as practicable following the date of this
Agreement, Buyer shall cause Newco to be duly organized as a wholly owned
subsidiary of Buyer and to become a party to this Agreement by executing
and delivering a supplement hereto.
8.22 DEFEASANCE OF REPUBLIC SENIOR DEBENTURE. At the request of Buyer,
Republic agrees that it will use all reasonable efforts promptly to take
each of the actions contemplated by Section 11.05 of the Indenture,
provided that Republic is not required to make the deposit contemplated by
Section 11.05(a) of the Indenture unless Buyer has agreed (pursuant to an
agreement reasonably satisfactory to Republic) to lend Republic the funds
necessary therefor on terms that are substantially equivalent to the
remaining terms of the Senior Debenture except (1) the use of proceeds
would be limited to making the deposit contemplated by Section 11.05(a) of
the Indenture and (2) the loan would need to be repaid before any change in
control of Republic.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations of
each Party to perform this Agreement and to consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of
the following conditions, unless waived by both Parties pursuant to Section
11.6 of this Agreement:
(a) STOCKHOLDER APPROVAL. The stockholders of Republic shall have
approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by
Law and by the provisions of any governing instruments.
(b) REGULATORY APPROVALS. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities required for
consummation of the Merger shall have been obtained or made and shall be in
full force and effect, all waiting periods required by Law shall have
expired and no such Consent shall contain any conditions, restrictions or
requirements which would, individually or in the aggregate, have a Material
Adverse Effect on Buyer or Republic.
(c) CONSENTS AND APPROVALS. Each Party shall have obtained any and all
Consents required for consummation of the Merger (other than those referred
to in Section 9.1(b) of this Agreement) or for the preventing of any
Default under any Contract, Order or Permit of such Party which in the case
of non-governmental Consents, if not obtained or made, is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
such Party, and no such Consent shall contain any conditions, restrictions
or requirements which would, individually or in the aggregate, have a
Material Adverse Effect on Buyer or Republic.
(d) LEGAL PROCEEDINGS. No court or governmental or Regulatory Authority of
competent jurisdiction shall have enacted, issued, promulgated, enforced,
or entered any Law or Order (whether temporary, preliminary, or permanent)
or taken any other action which prohibits, restricts, or makes illegal
consummation of the transactions contemplated by this Agreement.
(e) REGISTRATION STATEMENT. The Registration Statement shall be effective
under the 1933 Act, no stop order suspending the effectiveness of the
Registration Statement shall have been issued, no action, suit, proceeding,
or investigation by the SEC to suspend the effectiveness thereof shall have
been initiated and be continuing, and all necessary approvals under state
securities Laws or the 1933 Act or 1934 Act relating to the issuance or
trading of the shares of Buyer Common Stock issuable pursuant to the Merger
shall have been received.
(f) LISTING. The shares of Buyer Common Stock to be issued in the Merger
shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
9.2 CONDITIONS TO OBLIGATIONS OF BUYER AND NEWCO. The obligations of Buyer
and Newco to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Buyer pursuant to Section 11.6(a) of
this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section 9.2(a),
the accuracy of the representations and warranties of Republic set forth in
this Agreement shall be assessed as of the date of this Agreement and as of
the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties of Republic
set forth in Sections 5.3 and 5.26 of this Agreement shall be true and
correct (except for inaccuracies which are de minimis in amount). The
representations and warranties of Republic set forth in Sections 5.13(h),
5.13(i), 5.17, 5.20, 5.21, 5.22, 5.24, and 5.25 of this Agreement shall be
true and correct in all Material respects. There shall not exist
inaccuracies in the representations and warranties of Republic set forth in
this Agreement (including the representations and warranties set forth in
Sections 5.3, 5.13(h), 5.13(i), 5.17, 5.20, 5.21, 5.22, 5.24, 5.25 and
5.26) such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a Material Adverse Effect on Republic; provided
that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material, " Material,"
"Material Adverse Effect," or variations thereof, or to the "Knowledge" of
Republic or to a matter being "known" by Republic shall be deemed not to
include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the agreements
and covenants of Republic to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all
Material respects.
(c) CERTIFICATES. Republic shall have delivered to Buyer (i) a certificate,
dated as of the Effective Time and signed on Republic's behalf by its duly
authorized officers, to the effect that the conditions set forth in Section
9.2(a) and 9.2(b) of this Agreement have been satisfied, and (ii) certified
copies of resolutions duly adopted by Republic's Board of Directors and
stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement, and
the consummation of the transactions contemplated hereby, all in such
reasonable detail as Buyer and its counsel shall request.
(d) BUYER'S TAX OPINION. Buyer shall have received a written opinion from
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ("Buyer's Counsel"), in a form reasonably satisfactory
to Buyer ("Buyer's Tax Opinion"), dated the date of the Effective Time,
substantially to the effect that, (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, (ii) no gain or loss will be recognized by holders of Republic Common
Stock who exchange all of their Republic Common Stock solely for Buyer
Common Stock pursuant to the Merger (except with respect to any cash
received in lieu of a fractional share interest in Buyer Common Stock),
(iii) the tax basis of the Buyer Common Stock received by holders of
Republic Common Stock who exchange all of their Republic Common Stock
solely for Buyer Common Stock in the Merger will be the same as the tax
basis of the Republic Common Stock surrendered in exchange for the Buyer
Common Stock (reduced by an amount allocable to a fractional share interest
in Buyer Common Stock for which cash is received), and (iv) the holding
period of the Buyer Common Stock received by holders who exchange all of
their Republic Common Stock solely for Buyer Common Stock in the Merger
will be the same as the holding period of the Republic Common Stock
surrendered in exchange thereof, provided that such Republic Common Stock
is held as a capital asset at the Effective Time. In rendering Buyer's Tax
Opinion, Buyer Counsel shall be entitled to rely upon representations of
officers of Republic and Buyer reasonably satisfactory in form and
substance to such counsel.
(e) EMPLOYMENT AGREEMENTS. The Employment Agreement entered into with ▇▇▇▇
▇. ▇▇▇▇▇▇ shall be in full force and effect (other than as a consequence of
death or disability). The Noncompetition Agreements entered into with the
non-employee directors of Republic shall be in full force and effect (other
than as a consequence of death or disability).
(f) INDENTURE. Either Buyer's Counsel (as defined in Section 9.2(d)) or
Republic's Counsel (as defined in Section 9.3(d)), or other counsel
reasonably acceptable to Buyer, shall have delivered, or shall be prepared
to deliver, the opinion contemplated by Section 11.05(d) of the Indenture,
dated as of June 30, 1997 between First Palm Beach Bancorp, Inc. and The
Bank of New York, as trustee (the "Trustee"), relating to the 10.35% Senior
Debentures due 2002 of Republic (the "Indenture") in form satisfactory to
the Trustee, and no event or circumstance shall have occurred that would
cause the conditions contained in Section 11.05 of the Indenture to be not
able to be satisfied as of the Effective Time.
9.3 CONDITIONS TO OBLIGATIONS OF REPUBLIC. The obligations of Republic to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by Republic pursuant to Section 11.6(b) of this
Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section 9.3(a),
the accuracy of the representations and warranties of Buyer set forth in
this Agreement shall be assessed as of the date of this Agreement and as of
the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties of Buyer
set forth in Section 6.3 of this Agreement shall be true and correct
(except for inaccuracies which are de minimis in amount). The
representations and warranties of Buyer set forth in Section 6.9 of this
Agreement shall be true and correct in all Material respects. There shall
not exist inaccuracies in the representations and warranties of Buyer set
forth in this Agreement (including the representations and warranties set
forth in Sections 6.3 and 6.9) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse
Effect on Buyer; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to
"material," "Material," "Material Adverse Effect," or variations thereof,
or to the "Knowledge" of Buyer or to a matter being "known" by Buyer shall
be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the agreements
and covenants of Buyer to be performed and complied with pursuant to this
Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all
Material respects.
(c) CERTIFICATES. Buyer shall have delivered to Republic (i) a certificate,
dated as of the Effective Time and signed on Buyer's behalf by its duly
authorized officers, to the effect that the conditions set forth in Section
9.3(a) and 9.3(b) of this Agreement have been satisfied, and (ii) certified
copies of resolutions duly adopted by Buyer's Board of Directors evidencing
the taking of all corporate action necessary to authorize the execution,
delivery, and performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable detail as Republic
and its counsel shall request.
(d) REPUBLIC'S TAX OPINION. Republic shall have received a written opinion
from Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP ("Republic's Counsel"), in a
form reasonably satisfactory to Republic ("Republic's Tax Opinion"), dated
the date of the Effective Time, substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion
which are consistent with the state of facts existing at the Effective
Time, the Merger will be treated as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code. In rendering Republic's Tax
Opinion, Republic's Counsel may require and rely upon representations and
covenants, including those contained in certificates of Buyer, Republic,
and others, reasonably satisfactory in form and substance to Republic's
Counsel.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the stockholders of
Republic, this Agreement may be terminated and the Merger abandoned at any
time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of Buyer and the Board of
Directors of Republic; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of Republic and Section 9.3(a)
of this Agreement in the case of Buyer or in Material breach of any
covenant or other agreement contained in this Agreement) in the event of an
inaccuracy of any representation or warranty of the other Party contained
in this Agreement which cannot be or has not been cured within 30 days
after the giving of written notice to the breaching Party of such
inaccuracy and which inaccuracy would provide the terminating Party the
ability to refuse to consummate the Merger under the applicable standard
set forth in Section 9.2(a) of this Agreement in the case of Republic and
Section 9.3(a) of this Agreement in the case of Buyer; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of Republic and Section 9.3(a)
in the case of Buyer or in Material breach of any covenant or other
agreement contained in this Agreement) in the event of a Material breach by
the other Party of any covenant or agreement contained in this Agreement
which cannot be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach; or
(d) By the Board of Directors of either Party in the event (i) any Consent
of any Regulatory Authority required for consummation of the Merger and the
other transactions contemplated hereby shall have been denied by final
nonappealable action of such authority, or (ii) the stockholders of
Republic fail to vote their approval of the matters submitted for the
approval by such stockholders at the Stockholders' Meeting where the
transactions were presented to such stockholders for approval and voted
upon; or
(e) By the Board of Directors of either Party in the event that the Merger
shall not have been consummated by June 30, 2001, if the failure to
consummate the transactions contemplated hereby on or before such date is
not caused by any breach of this Agreement by the Party electing to
terminate pursuant to this Section 10.1(e); or
(f) At any time prior to the Stockholders' Meeting, by the Board of
Directors of Buyer if the Board of Directors of Republic shall have failed
to make its recommendation referred to in Section 8.1, withdrawn such
recommendation or modified or changed such recommendation in a manner
adverse in any respect to the interests of Buyer.
10.2 EFFECT OF TERMINATION. In the event of the termination and abandonment
of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, and none of Buyer,
Republic, any of their respective Subsidiaries, or any of the officers or
directors of any of them, shall have any Liability of any nature whatsoever
hereunder or in conjunction with the transactions contemplated hereby,
except that (i) the provisions of Section 8.5(b), this Section 10.2,
Section 10.3, and Article 11 of this Agreement shall survive any such
termination and abandonment, and (ii) a termination of this Agreement shall
not relieve the breaching Party from Liability for an uncured willful
breach of a representation, warranty, covenant, or agreement of such Party
contained in this Agreement. The Termination Fee Agreement shall be
governed by its terms as to its termination.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time, except for those covenants
and agreements which by their terms apply in whole or in part after the
Effective Time.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender offer
or exchange offer or any proposal for a merger, acquisition of all of the
stock or Assets of, or other business combination involving such Party or
any of its Subsidiaries or the acquisition of a substantial equity interest
in, or a substantial portion of the Assets of, such Party or any of its
Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person; (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger, including the
Exhibits delivered pursuant hereto and incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets, properties, businesses,
and rights of such Person of every kind, nature, character, and
description, whether real, personal, or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.
"AVERAGE CLOSING PRICE" shall mean the average of the daily closing prices
of Buyer Common Stock as reported on the New York Stock Exchange (as
reported by The Wall Street Journal or, if not reported thereby, another
authoritative source) for the fifteen consecutive trading days in which
such shares are traded on the New York Stock Exchange ending at the close
of trading on the day preceding the Effective Time. If the price of Buyer
Common Stock is adjusted at any time following the first day of such period
and prior to the Effective Time by reason of any action by Buyer of the
nature described in the second sentence of Section 3.2, then all prices
preceding such adjustment shall themselves be adjusted so as to be
comparable with those following such adjustment.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"BUYER COMPANIES" shall mean, collectively, Buyer and all Buyer
Subsidiaries.
"BUYER CONFIDENTIALITY AGREEMENT" that certain Confidentiality Agreement,
dated October 25, 2000, by and between Buyer and Republic.
"BUYER FINANCIAL STATEMENTS" shall mean (i) the consolidated statements of
condition (including related notes and schedules, if any) of Buyer as of
June 30, 2000 and as of December 31, 1999 and 1998, and the related
statements of income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the six months ended
June 30, 2000 and for each of the three years ended December 31, 1999,
1998, and 1997, as filed by Buyer in SEC Documents, and (ii) the
consolidated statements of condition of Buyer (including related notes and
schedules, if any) and related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to periods
ended subsequent to June 30, 2000.
"BUYER SUBSIDIARIES" shall mean the Subsidiaries of Buyer.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets, or business.
"DEFAULT" shall mean (i) any breach or violation of or default under any
Contract, Order, or Permit, (ii) any occurrence of any event that with the
passage of time or the giving of notice or both would constitute a breach
or violation of or default under any Contract, Order, or Permit, or (iii)
any occurrence of any event that with or without the passage of time or the
giving of notice would give rise to a right to terminate or revoke, change
the current terms of, or renegotiate, or to accelerate, increase, or impose
any Liability under, any Contract, Order, or Permit.
"EMPLOYMENT AGREEMENT" means the employment agreement between Buyer and
▇▇▇▇ ▇. ▇▇▇▇▇▇ dated the date of this Agreement and in the form provided by
Buyer.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which
are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq., and other Laws relating to emissions, discharges,
releases, or threatened releases of any Hazardous Material, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"FBCA" shall mean the Florida 1989 Business Corporation Act.
"FLORIDA ARTICLES OF MERGER" shall mean the Articles of Merger executed by
Newco and filed with the Secretary of State of the State of Florida
relating to the Merger as contemplated by Section 1.1 of this Agreement.
"GAAP" shall mean generally accepted accounting principles, consistently
applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil
(and specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and
any polychlorinated biphenyls).
"HSR ACT" shall mean Section 7A of the ▇▇▇▇▇▇▇ Act, as added by Title II of
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents, trademarks, service
marks, service names, trade names, applications therefor, technology rights
and licenses, computer software (including any source or object codes
therefor or documentation relating thereto), trade secrets, franchises,
know-how, inventions and other intellectual property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to a Person (including references to such
Person being aware of a particular matter) shall mean the personal
knowledge of the chairman, president, or chief financial officer of such
Person, after due investigation.
"LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities, or business, including those promulgated, interpreted,
or enforced by any Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, or expense (including
costs of investigation, collection, and defense), claim, deficiency,
guaranty, or endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for property Taxes not
yet due and payable, and (ii) for depository institution Subsidiaries of a
Party, pledges to secure deposits, and other Liens incurred in the ordinary
course of the banking business.
"LITIGATION" shall mean any action, arbitration, cause of action, claim,
complaint, criminal prosecution, demand letter, governmental or other
examination or investigation, hearing, inquiry, administrative or other
proceeding, or notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting a Party, its
business, its Assets (including Contracts related to it), or the
transactions contemplated by this Agreement, but shall not include regular,
periodic examinations of depository institutions and their Affiliates by
Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned, leased, or operated by the
Party in question or by any of its Subsidiaries or in which such Party or
Subsidiary holds a security or other interest (including an interest in a
fiduciary capacity), and, where required by the context, includes the owner
or operator of such property, but only with respect to such property.
"MATERIAL" for purposes of this Agreement shall be determined in light of
the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine
materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change, or
occurrence which, individually or together with any other event, change, or
occurrence, has a Material adverse impact on (i) the financial condition,
results of operations, or business of such Party and its Subsidiaries,
taken as a whole, or (ii) the ability of such Party to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that "Material
Adverse Effect" shall not be deemed to include the impact of (a) changes in
banking and similar Laws of general applicability or interpretations
thereof by courts or governmental authorities, (b) changes in GAAP or
regulatory accounting principles generally applicable to banks and their
holding companies, (c) actions and omissions of a Party (or any of its
Subsidiaries) taken with the prior informed written consent of the other
Party in contemplation of the transactions contemplated hereby, and (d)
compliance with the provisions of this Agreement (in accordance with its
terms and including, without limitation, the fees and expenses described in
this Article 11) on the operating performance of the Parties.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NCBCA" shall mean the North Carolina Business Corporation Act.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"NONCOMPETITION AGREEMENTS" shall mean the noncompetition agreements
between Buyer and each of the non-employee directors of Republic, each
dated the date of this Agreement and in the form provided by Buyer.
"NORTH CAROLINA ARTICLES OF MERGER" shall mean the certificate of merger to
be executed by Newco and filed with the Secretary of State of the State of
North Carolina, relating to the Merger as contemplated by Section 1.1 of
this Agreement.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local, or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in which the
Party in question or any of its Subsidiaries participates in the
management, as such term is defined in CERCLA (including, but not limited
to, participating in a fiduciary capacity), and, where required by the
context, said term means the owner or operator of such facility or
property, but only with respect to such facility or property.
"PARTY" shall mean either Republic or Buyer (and, where necessary or
appropriate, Newco), and "PARTIES" shall mean both Republic and Buyer (and,
where necessary or appropriate, Newco).
"PERMIT" shall mean any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any Person is a party or that is or may
be binding upon or inure to the benefit of any Person or its securities,
Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial, or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by Republic to
solicit the approval of its stockholders of the transactions contemplated
by this Agreement, which shall include the prospectus of Buyer relating to
the issuance of the Buyer Common Stock to holders of Republic Common Stock.
"REASONABLE EFFORTS" shall mean the reasonable best efforts of a Party, but
shall not require any Party to take any commercially unreasonable action.
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form S-4,
or other appropriate form, including any pre-effective or post-effective
amendments or supplements thereto, filed with the SEC by Buyer under the
1933 Act with respect to the shares of Buyer Common Stock to be issued to
the stockholders of Republic in connection with the transactions
contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation, the Office of
Thrift Supervision, all state regulatory agencies having jurisdiction over
the Parties and their respective Subsidiaries, the NASD, and the SEC.
"REPRESENTATIVE" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative of a Person.
"REPUBLIC COMMON STOCK" shall mean the $.01 par value common stock of
Republic.
"REPUBLIC COMPANIES" shall mean, collectively, Republic and all Republic
Subsidiaries.
"REPUBLIC CONFIDENTIALITY AGREEMENT" shall mean that certain
Confidentiality Agreement, dated September 1, 2000 by, and between Republic
and Wachovia.
"REPUBLIC DISCLOSURE MEMORANDUM" shall mean the written information
entitled "Republic Disclosure Memorandum" delivered prior to the execution
of this Agreement to Buyer describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section or subsection of this Agreement under
which such disclosure is being made. The inclusion of any matter in this
document shall not be deemed an admission or otherwise to imply that any
such matter is Material for purposes of this Agreement.
"REPUBLIC FINANCIAL STATEMENTS" shall mean (i) the consolidated statements
of condition (including related notes and schedules, if any) of Republic as
of June 30, 2000, and the related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) for the six months ended June 30, 2000, (ii) the
consolidated statements of condition (including related notes and
schedules, if any) of Republic for each of the three years ended December
31, 1999, 1998, and 1997, filed by Republic in SEC documents and (iii) the
consolidated statements of condition of Republic (including related notes
and schedules, if any) and related statement of income, change in
stockholders equity, and cash flows (including related notes and schedules,
if any) included in SEC Documents filed with respect to periods ended
subsequent to June 30, 2000.
"REPUBLIC PREFERRED STOCK" shall mean the $.01 par value preferred stock of
Republic.
"REPUBLIC RIGHTS AGREEMENT" shall mean the Rights Agreement by and between
Republic and IBJ ▇▇▇▇▇▇▇▇ Bank and Trust Company, dated as of April 14,
1995.
"REPUBLIC STOCK PLANS" shall mean the existing stock option and other
stock-based compensation plans of Republic, including, without limitation,
the stock option plans and programs of any Persons acquired by Republic or
a Republic Subsidiary.
"REPUBLIC SUBSIDIARIES" shall mean the Subsidiaries of Republic.
"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to (or the value
of which is wholly or partially derived from), or securities or rights
convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional shares
of its capital stock or other Rights.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC DOCUMENTS" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to
be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
"STOCKHOLDERS' MEETING" shall mean the meeting of the stockholders of
Republic to be held pursuant to Section 8.1 of this Agreement, including
any adjournment or adjournments thereof.
"SUBSIDIARIES" shall have the meaning ascribed to such term in Rule 1-02 of
Regulation S-X of the SEC; provided, there shall not be included any entity
acquired through foreclosure in the ordinary course of business or any
entity the equity securities of which are owned or controlled in a
fiduciary capacity in the ordinary course of business.
"SUPERIOR PROPOSAL" means, with respect to Republic, any written
Acquisition Proposal made by a Person other than Buyer which is for (i) (a)
a merger, reorganization, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution, or similar
transaction involving Republic as a result of which either (1) Republic's
stock-holders prior to such transaction (by virtue of their ownership of
Republic's shares) in the aggregate cease to own at least 50% of the voting
securities of the entity surviving or resulting from such transaction (or
the ultimate parent entity thereof) or (2) the individuals comprising the
Board of Directors of Republic prior to such transaction do not constitute
a majority of the board of directors of such ultimate parent entity, (b) a
sale, lease, exchange, transfer, or other disposition of at least 50% of
the assets of Republic and its Subsidiaries, taken as a whole, in a single
transaction or a series of related transactions, or (c) the acquisition,
directly or indirectly, by a Person of beneficial ownership of 50% or more
of the common stock of Republic whether by merger, consolidation, share
exchange, business combination, tender, or exchange offer or otherwise, and
(ii) which is otherwise on terms which the Board of Directors of Republic
in good faith concludes (after consultation with its financial advisors and
outside counsel), taking into account, among other things, all legal,
financial, regulatory, and other aspects of the proposal (including the
impact of the exercise of the Termination Fee Agreement) and the Person
making the proposal, (a) would, if consummated, result in a transaction
that is more favorable to its stockholders (in their capacities as
stockholders), from a financial point of view, than the transactions
contemplated by this Agreement, and (b) is reasonably capable of being
completed.
"SURVIVING CORPORATION" shall mean Newco as the surviving corporation
resulting from the Merger.
"TAX" OR "TAXES" shall mean all federal, state, local, and foreign taxes,
charges, fees, levies, imposts, duties, or other assessments, including
income, gross receipts, excise, employment, sales, use, transfer, license,
payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties,
capital stock, paid-up capital, profits, withholding, Social Security,
single business and unemployment, disability, real property, personal
property, registration, ad valorem, value added, alternative or add-on
minimum, estimated, or other tax or governmental fee of any kind
whatsoever, imposed or required to be withheld by the United States or any
state, local, or foreign government or subdivision or agency thereof,
including any interest, penalties, or additions thereto.
"TAXABLE PERIOD" shall mean any period prescribed by any governmental
authority, including the United States or any state, local, or foreign
government or subdivision or agency thereof for which a Tax Return is
required to be filed or Tax is required to be paid.
"TAX RETURN" shall mean any report, return, information return, or other
information required to be supplied to a taxing authority in connection
with Taxes, including any return of an affiliated or combined or unitary
group that includes a Party or its Subsidiaries.
"TERMINATION FEE AGREEMENT" means the letter agreement between Buyer and
Republic, dated the date of this Agreement and providing for the payment of
a fee by Republic under certain circumstances in connection with or
following the termination of this Agreement.
(b) The terms set forth below shall have the meanings ascribed thereto in
the referenced sections:
Closing Section 1.2
Continuing Employees Section 8.13
Covered Parties Section 8.13(b)
Effective Time Section 1.3
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(b)
Indemnified Parties Section 8.14(a)
Merger Section 1.1
Buyer SEC Reports Section 6.5(a)
Buyer's Counsel Section 9.2(d)
Buyer's Tax Opinion Section 9.2(d)
Republic Benefit Plans Section 5.13(a)
Republic Contracts Section 5.14
Republic ERISA Affiliate Section 5.13(e)
Republic ERISA Plan Section 5.13(a)
Republic Insiders Section 8.15
Republic Pension Plan Section 5.13(a)
Republic Rights Section 3.5(a)
Republic SEC Reports Section 5.5(a)
Republic's Counsel Section 9.3(d)
Republic's Tax Opinion Section 9.3(d)
Takeover Laws Section 5.20
Tax Opinion Section 9.1(f)
(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2, each of the Parties
shall bear and pay all direct costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated hereunder,
including filing, registration, and application fees, printing fees, and
fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel, except that Buyer shall bear and pay the
filing fees payable in connection with the Registration Statement and the
Proxy Statement and that Buyer and Republic each shall bear and pay one
half of the printing costs incurred in connection with the printing of the
Registration Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party
of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
11.3 WAIVER OF JURY TRIAL. Each Party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each Party hereby
irrevocably and unconditionally waives any right such Party may have to a
trial by jury in respect of any litigation directly or indirectly arising
out of or relating to this Agreement, or the transactions contemplated by
this Agreement. Each Party certifies and acknowledges that (i) no
Representative of the other Party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to
enforce the foregoing waiver, (ii) each Party understands and has
considered the implications of this waiver, (iii) each Party makes this
waiver voluntarily, and (iv) each party has been induced to enter into this
Agreement by, among other things, the mutual waivers and certifications in
this Section 11.3.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein, this
Agreement (including the Republic Disclosure Memorandum) together with the
Republic Confidentiality Agreement, the Buyer Confidentiality Agreement and
the Termination Fee Agreement constitutes the entire agreement between the
Parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereto,
written or oral, which shall remain in effect. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, other than as provided
in Sections 8.14 and 8.19 of this Agreement and Section 7.2 of the Republic
Disclosure Memorandum.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before
or after stockholder approval of this Agreement has been obtained;
provided, that the provisions of this Agreement relating to the manner or
basis in which shares of Republic Common Stock will be exchanged for Buyer
Common Stock shall not be amended (except in accordance with Section 3.1(b)
of this Agreement) after the Stockholders' Meeting without the requisite
approval of the holders of the issued and outstanding shares of Republic
Common Stock entitled to vote thereon.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, Buyer, acting through its Board of
Directors, chief executive officer, chief financial officer, or other
authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by Republic, to waive or extend
the time for the compliance or fulfillment by Republic of any and all of
its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of Buyer under this Agreement,
except any condition which, if not satisfied, would result in the violation
of any Law. No such waiver shall be effective unless in writing signed by a
duly authorized officer of Buyer except that any unfulfilled conditions
shall be deemed to have been waived at the Effective Time.
(b) Prior to or at the Effective Time, Republic, acting through its Board
of Directors, chief executive officer, chief financial officer, or other
authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by Buyer, to waive or extend the
time for the compliance or fulfillment by Buyer of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of Republic under this Agreement, except any
condition which, if not satisfied, would result in the violation of any
Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Republic except that any unfulfilled conditions shall
be deemed to have been waived at the Effective Time.
(c) The failure of any Party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such Party at a
later time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this
Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by the Parties and their respective
successors and assigns.
11.8 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by
hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the
addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
Republic: REPUBLIC SECURITY FINANCIAL CORPORATION
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman, President, and Chief Executive
Officer
Copy to Counsel: SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Buyer: WACHOVIA CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
Copy to Counsel: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
11.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the Laws of the State of North Carolina, without regard to
any applicable principles of conflicts of Laws, except to the extent that
the Laws of the State of Florida relate to the consummation of the Merger.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether
under any rule of construction or otherwise. No Party to this Agreement
shall be considered the draftsman. The Parties acknowledge and agree that
this Agreement has been reviewed, negotiated, and accepted by all Parties
and their attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as fairly to accomplish the purposes
and intentions of the Parties.
11.13 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf and its corporate seal to be
hereunto affixed and attested by officers thereunto as of the day and year
first above written.
REPUBLIC SECURITY FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. Ballot By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________ ____________________
▇▇▇▇▇▇ ▇. Ballot ▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary Chairman, President, and
Chief Executive Officer
[CORPORATE SEAL]
WACHOVIA CORPORATION
By: /s/ Stanhope ▇. ▇▇▇▇▇
_______________________
Stanhope ▇. ▇▇▇▇▇
Senior Executive Vice President