Preview | Agreement and Plan of Merger |

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

FIRST REPUBLIC BANK,

BWC FINANCIAL CORP.

AND

BANK OF WALNUT CREEK

Dated as of May 20, 2006

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TABLE OF CONTENTS

ARTICLE I DEFINITIONS		1
Section 1.1	Definitions	1
ARTICLE II THE MERGER		11
Section 2.1	The Company Merger	11
Section 2.2	The Bank Merger	11
Section 2.3	Closing	11
Section 2.4	Company Merger Effective Time	11
Section 2.5	Bank Merger Effective Time	11
Section 2.6	Effect of the Company Merger	12
Section 2.7	Effect of the Bank Merger	12
Section 2.8	Articles of Incorporation of the Surviving Corporation After Company Merger	12
Section 2.9	Articles of Incorporation of the Surviving Corporation After Bank Merger	12
Section 2.10	Bylaws of the Surviving Corporation After Company Merger	12
Section 2.11	Bylaws of the Surviving Corporation After Bank Merger	12
Section 2.12	Directors and Officers of the Surviving Corporation	12
Section 2.13	Alternative Structure	13
ARTICLE III CONSIDERATION; CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES		13
Section 3.1	Conversion of Securities	13
Section 3.2	Fractional Shares	14
Section 3.3	Shares of Dissenting Holders	14
Section 3.4	Surrender and Exchange of Certificates	15
Section 3.5	Stock Options	17
Section 3.6	Adjustment Resulting from BWC Real Estate Sale.	18
Section 3.7	Cancellation of Bank Capital Stock	18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND BANK		18
Section 4.1	Organization and Qualification of Company and Subsidiaries	18
Section 4.2	Certificate of Incorporation and Bylaws; Corporate Books and Records	19
Section 4.3	Capitalization	19
Section 4.4	Subsidiaries	20
Section 4.5	Authority.	20
Section 4.6	No Conflict; Required Filings and Consents	22
Section 4.7	Permits; Compliance with Law.	22
Section 4.8	SEC Filings; Financial Statements	24
Section 4.9	Regulatory Matters	25
Section 4.10	Absence of Certain Changes or Events	26
Section 4.11	Employee Benefit Plans	26

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Section 4.12	Labor and Other Employment Matters	29
Section 4.13	Transactions with Interested Persons	30
Section 4.14	Material Contracts	30
Section 4.15	Litigation	30
Section 4.16	Environmental Matters	31
Section 4.17	Intellectual Property	31
Section 4.18	Taxes	32
Section 4.19	Insurance	35
Section 4.20	Properties	35
Section 4.21	Derivative Transactions	36
Section 4.22	FDIC Offering Circular and Proxy Statement	36
Section 4.23	Opinion of Financial Advisor	37
Section 4.24	Brokers	37
Section 4.25	No Other Merger or Business Combination Agreements	37
Section 4.26	Allowance For Loan Losses	37
Section 4.27	Voting Agreements	37
Section 4.28	No Brokered Deposits	37
Section 4.29	Member in Good Standing..	37
Section 4.30	Loan Portfolio	38
Section 4.31	Dissenting Shareholders	38
Section 4.32	BWC Real Estate.	38
Section 4.33	Cumulative Breach	38
ARTICLE V REPRESENTATIONS AND WARRANTIES OF ACQUIROR		39
Section 5.1	Organization and Qualification; Articles of Incorporation and Bylaws.	39
Section 5.2	Capitalization	39
Section 5.3	Subsidiaries	40
Section 5.4	Authority	40
Section 5.5	No Conflict; Required Filings and Consents	40
Section 5.6	Litigation	41
Section 5.7	Compliance With Law.	41
Section 5.8	FDIC Filings; Financial Statements; Regulatory Reports	41
Section 5.9	Regulatory Matters	43
Section 5.10	Absence of Certain Changes or Events	43
Section 5.11	Taxes	44
Section 5.12	Derivative Transactions	44
Section 5.13	FDIC Offering Circular and Proxy Statement	44
Section 5.14	No Brokers	45
ARTICLE VI MUTUAL COVENANTS OF THE PARTIES		45
Section 6.1	Reasonable Best Efforts	45
Section 6.2	Preparation of FDIC Offering Circular and Proxy Statement	45
Section 6.3	Appropriate Actions; Consents; Filings	46
Section 6.4	Public Announcements	47
Section 6.5	Tax Treatment of the Company Merger and the Bank Merger	47
Section 6.6	Notification of Certain Matters	48

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Section 6.7	Antitrust Laws	48
Section 6.8	Control of the Companys Business	49
Section 6.9	Takeover Statutes	49
ARTICLE VII COVENANTS OF THE COMPANY AND THE BANK		49
Section 7.1	Access to Information Concerning Properties and Records	49
Section 7.2	Conduct of the Business of the Company and the Bank Pending the Closing Date	50
Section 7.3	No Solicitation of Other Offers	54
Section 7.4	Company Shareholder Meeting and Approval	56
Section 7.5	Pre-Closing Adjustments	56
Section 7.6	Human Resources Issues	57
Section 7.7	BWC Real Estate Sale	57
Section 7.8	ESOP.	57
Section 7.9	Fee Schedule and Estimate	58
Section 7.10	Closing Financial Statements	59
Section 7.11	Filings	59
Section 7.12	Non-USRPHC Certificate	60
Section 7.13	Stockholder Litigation	60

ARTICLE VIII COVENANTS OF ACQUIROR		60
Section 8.1	Reservation and Issuance of Acquiror Shares	60
Section 8.2	NYSE	60
Section 8.3	Directors and Officers Insurance	60
Section 8.4	Advisory Board	61
ARTICLE IX CONDITIONS PRECEDENT		61
Section 9.1	Conditions Precedent to Each Partys Obligation to Effect the Company Merger and Bank Merger	61
Section 9.2	Conditions Precedent to Companys Obligation to Effect the Company Merger and the Bank Merger	62
Section 9.3	Conditions Precedent to Acquirors Obligation to Effect the Company Merger and the Bank Merger	63
ARTICLE X TERMINATION AND ABANDONMENT		65
Section 10.1	Termination	65
Section 10.2	Effect of Termination	67
ARTICLE XI MISCELLANEOUS		69
Section 11.1	Fees and Expenses	69
Section 11.2	Representations and Warranties	69
Section 11.3	Extension; Waiver	70
Section 11.4	Notices	70
Section 11.5	Entire Agreement	71
Section 11.6	Binding Effect; Benefit; Assignment	71
Section 11.7	Amendment and Modification	71
Section 11.8	Further Actions	71
Section 11.9	Table of Contents; Headings	71
Section 11.10	Counterparts	72

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Section 11.11	APPLICABLE LAW	72
Section 11.12	Severability	72
Section 11.13	Interpretation	72
Section 11.14	Specific Enforcement	73
Section 11.15	Waiver of Jury Trial	73

Exhibits

A	Voting Agreement
B	Key Employees
C	Retiring Employees

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of May 20, 2006 (this Agreement), by and among FIRST REPUBLIC BANK, a Nevada chartered commercial bank (Acquiror), BWC FINANCIAL CORP., a corporation organized under the laws of California (the Company) and BANK OF WALNUT CREEK, a California chartered commercial bank (the Bank).

W I T N E S S E T H:

WHEREAS, the Company operates as a one-bank holding company for its wholly owned Subsidiary, the Bank;

WHEREAS, the respective Board of Directors of the Company, the Bank and the Acquiror deem it in their respective entities and shareholders best interest for the Company to merge with and into Acquiror (the Company Merger) and the Bank to merge with and into Acquiror (the Bank Merger), upon the terms and subject to the conditions of this Agreement and in accordance with California General Corporation Law and the Nevada Revised Statutes;

WHEREAS, each of the Company Merger and the Bank Merger is intended to be treated for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended;

WHEREAS, Acquiror is unwilling to enter into this Agreement unless each of the directors and certain of the officers of the Company (the Company Affiliated Shareholders), concurrently with the execution and delivery of this Agreement, enter into an agreement with the Acquiror in the form of Exhibit A (the Voting Agreement) providing, among other things, that each of the Company Affiliated Shareholders will, upon the terms and subject to the conditions of such agreement, vote all of the shares of common stock of the Company owned by such Company Affiliated Shareholder in favor of the Company Merger and the Bank Merger;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representations, warranties and agreements herein contained, the parties intending to be legally bound, hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. When used in this Agreement, the following terms have the respective meanings specified therefor below (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

Acquiror has the meaning set forth in the Preamble.

Acquiror Balance Sheet has the meaning set forth in Section 5.8(c).

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Acquiror Board means the Board of Directors of Acquiror.

Acquiror Bylaws has the meaning set forth in Section 5.1(b).

Acquiror Charter has the meaning set forth in Section 5.1(b).

Acquiror Confidentiality Agreement means the confidentiality agreement between the Company and Acquiror dated May 4, 2006.

Acquiror Disclosure Schedule has the meaning set forth in the first sentence of Article V.

Acquiror FDIC Filings has the meaning set forth in Section 5.8(a).

Acquiror Permit means any permit, authorization, license, certificate, approval and/or clearance of any Governmental Entity necessary for the Acquiror and each of its Subsidiaries to own, lease and operate its properties or to carry on their respective businesses substantially in the manner described in the Acquiror FDIC Filings filed prior to the date hereof and substantially as those businesses are being conducted as of the date hereof.

Acquiror Shares means the shares of common stock, $0.01 par value, of the Acquiror.

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