MERGER CONSIDERATION ADJUSTMENT AGREEMENT dated as of November 8, 1999 (this
"Agreement"), among RNYC Holdings Limited, a Gibraltar corporation ("Principal
Stockholder"), HSBC Holdings plc, an English public limited company ("HSBC") and
HSBC North America Inc., a Delaware corporation ("US Holdco").
WHEREAS HSBC, Republic New York Corporation, a Maryland corporation ("the
Company") and Safra Republic Holdings S.A., a Luxembourg societe anonyme
("SRH"), have entered into a Transaction Agreement and Plan of Merger dated as
of May 10, 1999 (as amended by the Joinder Agreement dated as of May 20, 1999
and by Amendment No. 1 to the Transaction Agreement and Plan of Merger dated as
of the date hereof (the "Merger Amendment Agreement")) (the "Merger Agreement"),
providing for, among other things, the merger of a wholly owned subsidiary of US
Holdco with and into the Company (the "Merger"), following which the Company
will be a wholly owned subsidiary of US Holdco;
WHEREAS Saban S.A., the Principal Stockholder, Congregation Beit ▇▇▇▇▇▇,
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇. ▇▇▇▇▇"), HSBC and US Holdco entered into a stockholder
agreement dated as of May 10, 1999 (as amended by Amendment No. 1 to
Stockholders Agreement dated as of the date hereof) (the "Stockholders
Agreement") relating to the Merger;
WHEREAS the Principal Stockholder and its affiliates own approximately
29.5% of the outstanding common stock of the Company and will be entitled to the
consideration specified in the Merger Agreement upon consummation of the Merger
Agreement;
WHEREAS as an inducement and a condition to its entering into the Merger
Amendment Agreement and incurring the obligations set forth in the Merger
Agreement, HSBC has required the Principal Stockholder to enter into this
Agreement; and
WHEREAS, although none of the parties hereto believes, or has any reason to
believe, that any Principal Stockholder Entity has any obligation or liability
to any Person in connection with the Princeton Note Matter (as defined in the
Merger Agreement), the parties hereto are executing and delivering this
Agreement in order to assist with the consummation of the Merger and the other
transactions contemplated by the Merger Agreement.
NOW, THEREFORE, in consideration of the obligations and agreements
contained herein, the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used but not defined in this
Agreement shall have the respective meanings assigned to such terms in the
Merger Agreement. In addition, for purposes of this Agreement:
"Account" means the account for the benefit of the Principal Stockholder
held at HSBC, its direct or indirect Subsidiary, or a branch of either located
or acting outside of the United States, designated by the Principal Stockholder
and reasonably acceptable to HSBC.
"Ancillary Expenses" means all legal fees, costs and expenses, and
investigative costs, incurred by any Relevant Party principally, directly or
indirectly, with respect to any claim involving or related to the Princeton Note
Matter, calculated on a pre-tax basis.
"Claim" means an amount of Losses for which a reduction in the Merger
Consideration (calculated in accordance with this Agreement) is sought to be
effected pursuant to a Request for Adjustment.
"Losses" means all losses, liabilities, claims, fines, penalties, damages
(including, without limitation, punitive and exemplary damages and treble
damages) and expenses (but (i) excluding legal fees, costs or expenses, or
investigative costs, incurred by any Relevant Party and (ii) including indemnity
payments (including indemnity payments with respect to legal fees, expenses and
investigative costs incurred by any Person required to be indemnified under
currently existing obligations by any Relevant Party) other than indemnity
payments under Section 16 of the Stockholder Agreement), suffered or incurred by
settlement, judgment or otherwise by any Relevant Party on a pre-tax basis to
the extent arising principally, directly or indirectly, from any claim, action
or proceeding involving or relating to the Princeton Note Matter whether
directly or by virtue of any obligation to so indemnify a Person; in each case
net of any net amounts received under currently existing insurance policies or
as a result of counterclaims, rights of set-off or similar recoveries ("Offset")
principally, directly or indirectly related to the Princeton Note Matter.
"Principal Stockholder Entities" means any of (a) notwithstanding any other
provisions of this definition or this Agreement, ▇▇. ▇▇▇▇▇ in any capacity (b)
the Principal Stockholder or its affiliates or any of their respective officers,
directors, employees, stockholders and controlling persons (including, without
limitation to the generality, Saban S.A.) agents and representatives, but
excluding for the purposes of this clause (b) any individual who is an officer,
director, employee, agent or representative of a Relevant Party when acting in
his or her capacity as such. For the purpose of this definition, "affiliates" of
the Principal Stockholder shall not include the Company or SRH or any of their
respective direct or indirect Subsidiaries.
"Relevant Party" means the Company or any of its Subsidiaries (including,
without limitation, Republic New York Securities Corporation).
"Request for Adjustment" means a notice substantially in the form of
Exhibit A hereto delivered by US Holdco to the Principal Stockholder pursuant to
Section 5 hereof, which shall be executed by the President, the Chief Executive
Officer, or the Chief Financial Officer of US Holdco.
"taxes" shall mean all taxes, however denominated, including any interest
or penalties that may become payable in respect thereof, imposed by any United
States federal, state, local or non-United States ("foreign") government or any
agency or political subdivision of any such government, which taxes shall
include, without limiting the generality of the foregoing, all income taxes
(including, but not limited to, United Kingdom or United States federal income
taxes and state and local income taxes), excise taxes, environmental taxes,
franchise taxes, gross receipts taxes, value added taxes, stamp taxes, transfer
taxes, withholding taxes, and other obligations of the same or of a similar
nature and tax and taxation and similar terms shall be construed accordingly.
"Taxpayer" means HSBC and its affiliate entities including without
limitation any Relevant Party.
SECTION 2. Termination. This Agreement shall terminate automatically,
without any action by the parties hereto, if the Merger Agreement terminates
prior to the Effective Time or if the Merger Agreement is amended in a manner
adverse to the Principal Stockholder without the Principal Stockholder's
consent.
SECTION 3. Account Arrangements. (a) The Principal Stockholder hereby
instructs US Holdco, on the Principal Stockholder's behalf, to deposit in the
Account $180,000,0000 of the Merger Consideration to which it is entitled under
the Merger Agreement on the date on which such $180,000,000 would otherwise have
been paid to the Principal Stockholder. The Principal Stockholder hereby agrees
that it shall on delivery of the Certificates representing Company Common Stock
to the Exchange Agent direct the Exchange Agent to so deposit such $180,000,000
of the Merger Consideration into the Account.
(b) The parties agree to treat the Principal Stockholder as the beneficial
owner of the Account, including any income derived from the Account, for income
tax purposes. Any withdrawal by US Holdco from the Account or any payment made
by the Principal Stockholder to US Holdco under the terms of this Agreement
shall be treated as a decrease in the Merger Consideration paid by US Holdco to
the Principal Stockholder and as not taxable to US Holdco or HSBC. Any payment
into the Account (other than the payment contemplated by Section 3(a)) or to the
Principal Stockholder by US Holdco under the terms of this Agreement shall be
treated as an increase in the Merger Consideration paid by US Holdco to the
Principal Stockholder.
(c) The Account shall bear interest for each six month period at the London
InterBank Offered Rate as quoted by HSBC at the beginning of each six month
period for accounts of a similar size. Such interest shall be credited to the
Account at the end of each six month period and shall be paid promptly
thereafter to the Principal Stockholder or its designee.
SECTION 4. Adjustment of Merger Consideration. (a) Subject to Sections 4(b)
to 4(i) (inclusive) and Section 5, from time to time following the Effective
Time, US Holdco may withdraw from the Account, amounts equal to 60% of the first
$300,000,000 of Losses incurred after the time that Losses and Ancillary
Expenses exceed $700,000,000 (calculated on a pre-tax basis), but in no event
more than $180,000,000 (the "Total Amount").
(b) The Principal Stockholder will not have any liability with respect to
the Princeton Note Matter under this Agreement or otherwise in excess of the
Total Amount and any obligation of the Principal Stockholder under this
Agreement shall be satisfied solely out of the Account.
(c) Except as otherwise specifically provided in this Agreement and Section
15 of the Stockholders Agreement, HSBC and US Holdco each acknowledges that it
and its Subsidiaries, and to the full extent that HSBC or US Holdco has the
legal authority to do so, their respective officers, directors, employees,
stockholders (in their capacity as such) and representatives will have no remedy
against any Principal Stockholder Entity with respect to any and all Losses
arising directly or indirectly out of or relating to the Princeton Note Matter.
In furtherance of the foregoing, HSBC and US Holdco each agrees, on behalf of
itself and its Subsidiaries, and to the full extent that either has the legal
authority to do so, their respective officers, directors, employees,
stockholders (in their capacity as such) and representatives, to waive any and
all rights, claims and causes of action they may have against any Principal
Stockholder Entity, arising out of or relating directly or indirectly to the
Princeton Note Matter. Except in the case of any Principal Stockholder Entity
nothing herein is intended to waive any rights the Company, US Holdco or HSBC
(or any of their respective Subsidiaries) may have against any other Person or
any such Person in any other capacity.
(d) The final amount of the adjustment to the Merger Consideration
resulting from any Loss and US Holdco's right to withdraw from the Principal
Stockholder's Account provided under this Section 4 shall be (i) increased to
take account of any net tax cost incurred by the Taxpayer arising from the
receipt of payments hereunder (grossed up for such increase) and (ii) reduced to
take account of any net tax benefit actually realized by the Taxpayer arising
from the incurrence or payment of any such Loss. In computing the amount of any
such tax cost or tax benefit, the Relevant Parties shall be deemed to recognize
all other items of income, gain, loss deduction or credit before recognizing any
item arising from the receipt of any payment hereunder or the incurrence or
payment of any Loss; provided, however, that in calculating the tax benefit in
respect of any Loss, the deductibility or other tax effect of all Losses in the
aggregate will be allocated among such Losses on a pro-rata basis. The amount of
a tax benefit shall be determined on the date that the Taxpayer receives an
actual reduction in its tax liability (including a reduction in estimated tax
payments) and shall be subject to adjustment pursuant to the remainder of this
Section 4 if such tax benefit subsequently increases or decreases.
(e) The Taxpayer shall claim a tax deduction (or, without limitation, any
other available tax benefits) for any Losses, without regard to the adjustment
to Merger Consideration made pursuant to this Agreement, except to the extent
that the Taxpayer has received an opinion of its independent tax advisor that
there would not be substantial authority for the claiming of such deduction or
other benefit. If the Taxpayer incurs a Loss prior to actually realizing any tax
benefit from such Loss, then the Claim shall initially be for the full amount
arising from the incurrence or payment of such Loss without regard to any
potential tax benefit from such Loss. However, if and to the extent the Taxpayer
actually realizes a tax benefit arising from the incurrence or payment of such
Loss under the principles of Section 2(d) then US Holdco shall reimburse the
Account at such time, or, if subsequent to the closure of the Account, pay such
amount to the Principal Stockholder or its designee. In the event that a final
determination is made whereby a tax benefit described in the preceding sentence
subsequently is disallowed, US Holdco may withdraw the appropriate amount from
the Account.
(f) If (i) the Taxpayer claims a tax benefit in respect of any Loss, (ii)
such claimed tax benefit reduces the amount to be repaid to US Holdco from the
Account under the terms of this Agreement, and (iii) a taxing authority
subsequently claims that such tax benefit was not available to the Taxpayer, the
Taxpayer will contest such contention; provided, however, that the Taxpayer
shall not be required to pursue a judicial proceeding to challenge such
contention if it has received an opinion of its independent tax advisor that it
is not at least more likely than not that the Taxpayer will succeed in the
contest.
(g) Subject to Section 4(h), US Holdco's right to deliver a Request for
Adjustment and to cause an adjustment to the Merger Consideration pursuant to
this Agreement shall end on the Termination Date. The Termination Date shall be
the third anniversary of the Closing Date unless at such date (i) US Holdco has
been notified of claims, demands or proceedings against any Relevant Party or
any Person required to be indemnified by any Relevant Party under currently
existing obligations that it reasonably believes could result in an adjustment
to the Merger Consideration pursuant to this Agreement or US Holdco reasonably
believes such claims, demands or proceedings will be asserted or instituted or
(ii) the amount of the adjustment to the Merger Consideration resulting from any
Loss has been reduced pursuant to Section 4(d) or (e) to reflect a deduction or
other tax benefit which is still subject to disallowance and which US Holdco
reasonably believes is reasonably likely to be challenged by a relevant tax
authority, in either of which events US Holdco may extend the Termination Date
for up to one year by delivering a written notice to the Principal Stockholder
signed by the President, Chief Executive Officer or Chief Financial Officer of
US Holdco to such effect and stating the extended Termination Date. The
extension right of the preceding sentence also may be exercised with respect to
any extended Termination Date, except that the Termination Date shall not in any
event be extended beyond the sixth anniversary of the Closing Date.
(h) On the Termination Date, as it may have been extended pursuant to
Section 4(g), US Holdco shall deliver to the Principal Stockholder a Certificate
signed by the President, Chief Executive Officer or Chief Financial Officer of
US Holdco specifying (i) the unresolved actually instituted and pending claims,
demands or proceedings that could result in an adjustment to the Merger
Consideration pursuant to this Agreement, (ii) any Claim as to which there is a
dispute between the parties as to which US Holdco has delivered a Request for
Adjustment prior to the Termination Date, (iii) deductions or other the tax
benefits which have reduced the adjustment to the Merger Consideration resulting
from the amount of any Loss pursuant to Section 4(d) or (e) which are still
subject to disallowance and which US Holdco reasonably believes are reasonably
likely to be challenged by a relevant tax authority (the items described in (i),
(ii) and (iii) being called "Continuing Claims"), and (iv) the amount remaining
in the Account that US Holdco reasonably and in good faith believes should be
available to protect its rights to adjust the Merger Consideration pursuant to
this Agreement (the "Required Amount"). US Holdco's right to deliver a Request
for Adjustment and to adjust the Merger Consideration pursuant to this Agreement
after the Termination Date shall continue only with respect to such Continuing
Claims. Any amount held in the Account in excess of the Required Amount will be
paid to the Principal Stockholder or its designee promptly after the Termination
Date. To the extent any Continuing Claim is resolved in a manner resulting in a
Loss (or in the increase of a Loss), US Holdco may withdraw from the Account an
amount with respect to such Loss in accordance with this Agreement as it applied
to Losses prior to the Termination Date. Upon final resolution of all Continuing
Claims or, if there are not any Continuing Claims at the Termination Date, after
the Termination Date, all remaining amounts in the Account will be paid promptly
to the Principal Stockholder or its designee and the Account will be closed.
(i) After the third anniversary of the Closing Date, US Holdco shall
periodically (and not less frequently than on each anniversary of the Closing
Date) determine whether the amount in the Account exceeds the amount US Holdco
reasonably and in good faith believes should be available to protect US Holdco's
right to adjust the Merger Consideration in accordance with this Agreement, and,
in the event it is so determined, the amount of any excess shall be released to
the Principal Stockholder or its designee.
SECTION 5. Adjustment Procedures. (a) In order for US Holdco to effect a
withdrawal from the Account under Section 4, US Holdco must deliver a Request
for Adjustment to the Principal Stockholder in the manner specified by Section 6
and such Request for Adjustment must contain all applicable information and
representations and warranties required thereby.
(b) Unless the Principal Stockholder raises an objection to the Claim
described in such Request for Adjustment pursuant to Section 5(c), US Holdco may
withdraw no earlier than the day that is 30 days after the Request for
Adjustment was delivered in the manner specified by Section 6 an amount equal to
the amount of the Claim in such Request for Adjustment. US Holdco shall not
withdraw any amount from the Account if the Principal Stockholder has raised any
objections to the Claim made in the Request for Adjustment pursuant to Section
5(c) until such time as such objections have been resolved pursuant to Section
7(g) or otherwise.
(c) The Principal Stockholder may object to any Claim made in such Request
for Adjustment by notifying US Holdco of such objection no later than the day
that is 30 days after the Request for Adjustment has been delivered in the
manner specified by Section 6, except that the Principal Stockholder may only so
object for the following reasons:
(i) the Request for Adjustment is not in all material respects in
compliance with the requirements of Section 5(a) above; or
(ii) the representations contained in the Request for Adjustment are
not accurate in all material respects.
(d) Any dispute that arises as a result of an objection raised by the
Principal Stockholder pursuant to Section 5(c) shall not constitute or give rise
to a Loss of any Relevant Party in respect of such dispute.
(e) After the Effective Time through the Termination Date, US Holdco will
provide quarterly written reports in reasonable detail as to all matters about
which it is aware (after making reasonable inquiry of Relevant Parties) that is
or may become subject to the provisions of this Agreement; provided such reports
shall not include any information the inclusion of which in the good faith
opinion of US Holdco's counsel threatens to constitute a waiver of the
attorney-client privilege, work product doctrine or other protection from
compulsory disclosure. On the request of the Principal Stockholder the parties
shall enter into a joint defense agreement or similar arrangement to the extent
that, in the good faith opinion of US Holdco's counsel, such agreement or
arrangement would be enforceable against adverse Persons.
SECTION 6. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile, or sent, postage prepaid, by registered, certified or
express mail, or overnight courier service and shall be deemed given when
received, as follows:
(a) if to the Principal Stockholder, to:
RNYC Holdings Limited
Neptune House
Marina Bay
Gibraltar
Attention: The Company Secretary
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to HSBC, to:
HSBC Holdings plc
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: Group Company Secretary
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to US Holdco, to:
HSBC North America Inc.
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 7. Miscellaneous. (a) This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by any party without the prior
written consent of the other parties hereto; provided, however, that the rights
and obligations of US Holdco may be assigned by operation of law in respect of
any merger or consolidation of US Holdco with the Company, or any of HSBC's
wholly-owned Subsidiaries. Any attempt to assign or transfer in violation of
this Section 7(a) shall be void.
(b) This Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any person, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.
(c) This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to the other party.
(d) This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to such subject
matter.
(e) If, and to the extent that any Relevant Party receives an Offset not
previously taken into account in determining the amount of Losses, then US
Holdco shall reimburse the Account, or, if subsequent to the closure of the
Account, pay the Principal Stockholder or its designee, an amount accounting for
such Offset (i.e., reflecting a recalculation the Losses incurred and relevant
to an adjustment hereunder that gives effect to such Offset). In determining the
effect of any Offset on the adjustments to the Merger Consideration made under
this Agreement, any Offset that can be specifically linked to a particular Loss
shall be applied against such Loss, any Offset that cannot be specifically
linked to a particular Loss but can be specifically linked to a particular party
shall be applied pro rata to all Losses attributable to such party and all other
Offsets shall be applied pro rata to all Losses incurred.
(f) This Agreement shall be governed by and construed in accordance with
English law.
(g) (I) Any dispute, controversy or claim arising out of, relating to or in
connection with this Agreement, including, without limitation, any dispute
regarding its validity, or the performance or breach thereof, shall be finally
settled by arbitration administered by the American Arbitration Association
("AAA"). The arbitration shall be conducted in accordance with the International
Arbitration Rules of the AAA in effect at the time of the arbitration ("AAA
Rules"), except as they may be modified herein or by agreement of the parties.
The place of arbitration shall be New York, New York.
(II) The arbitration shall be commenced by the service by one party of a
notice of arbitration in accordance with the AAA Rules. The arbitration shall be
conducted by a tribunal composed of three arbitrators. Each of the Principal
Stockholder and HSBC shall appoint one arbitrator and deliver written
notification of such appointment to the other parties and to the AAA within
thirty days of the date on which the arbitration commenced. In the event either
the Principal Stockholder or HSBC fails to deliver notification of its
appointment of an arbitrator to the other parties within such thirty-day period,
upon request of either the Principal Stockholder or HSBC the AAA shall appoint
such arbitrator within thirty days of the AAA's receipt of such request. The two
arbitrators appointed in accordance with the above provisions shall appoint the
third arbitrator and notify the parties in writing of such appointment within
thirty days of their appointment (or within thirty days of the appointment of
the second of them if the two appointments have not been simultaneous). If the
first two appointed arbitrators fail to notify the parties of the appointment of
the third arbitrator within such thirty-day period, then upon request of either
the Principal Stockholder or HSBC the AAA shall appoint the third arbitrator
within thirty days of the AAA's receipt of such request. The third arbitrator
shall serve as chairman of the tribunal.
(III) The arbitration proceedings shall be concluded within 120 days from
the date the chairman of the tribunal has been appointed, and the tribunal shall
use its best efforts to issue the final award within fifteen days after closure
of the proceedings. The tribunal may extend these time limits only if it
determines that the interest of justice so requires. Each party agrees that in
the event the tribunal determines that such party breached Section 4 or Section
5 in any material respect such party shall be obligated to reimburse the other
party for the fees and expenses (including reasonable attorney's fees and
expenses) incurred by such other party in connection with such breach and the
litigation relating to such breach.
(IV) The award rendered by the tribunal shall be final and binding on the
parties. Judgment on the award may be entered in any court of competent
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
RNYC Holdings Limited,
by _______________________________
Name:
Title:
HSBC NORTH AMERICA INC.,
by _______________________________
Name:
Title:
HSBC HOLDINGS PLC,
by _______________________________
Name:
Title:
EXHIBIT A
REQUEST FOR ADJUSTMENT
To: RNYC HOLDINGS LIMITED
[Address]
Attention: [ ]
On behalf of HSBC North America Inc. ("US Holdco"), we hereby notify you of
a claim (the "Claim") for Losses to be withdrawn from the Account under Section
4 of the Merger Consideration Adjustment Agreement dated as of November 7, 1999
among RNYC Holdings Limited, HSBC Holdings plc and US Holdco (the "Merger
Consideration Adjustment Agreement"). Terms used but not defined in this Request
shall have the meanings assigned to such terms in the Merger Consideration
Adjustment Agreement.
In accordance with Section 5 of the Merger Consideration Adjustment
Agreement, the Company hereby represents and warrants as follows:
1. Amount. The amount of the Claim is $[ ].
2. Basis for Claim. Attached as Annex A hereto is a full, complete and
accurate description in all material respects, together with any material
applicable underlying documents (including, without limitation, court orders,
settlement agreements, fines and bills) of the factual circumstances giving rise
to the Loss to which the Claim relates.
3. Adjustment Limit. The Claim is being made subject to the limits
contained in Section 4 of the Merger Consideration Adjustment Agreement. The
payment of this Claim by RNYC Holdings Limited will not exceed any limits
contained in Section 4 of the Merger Consideration Agreement.
HSBC NORTH AMERICA INC.,
by _______________________________
Name:
Title:
