EXHIBIT 2.1
================================================================================
AGREEMENT AND PLAN OF MERGER
by and among
CDC Finance
CDC Asset Management
CDCAM North America Corporation
CDCAM Partnership, L.P.
CDCAM Partnership II, L.P.
Nvest Corporation
Nvest, L.P.
and
Nvest Companies, L.P.
------------------------
Dated as of June 16, 2000
------------------------
================================================================================
TABLE OF CONTENTS
Page
----
RECITALS
The Parties.......................................................................................................1
The Transactions..................................................................................................1
Agreement of Merger...............................................................................................2
ARTICLE I
CERTAIN DEFINITIONS
1.01 Certain Definitions......................................................................................2
1.02 Terms Generally.........................................................................................10
ARTICLE II
THE TRANSACTIONS
2.01 The Public Partnership Merger...........................................................................11
2.02 The Private Partnership Merger..........................................................................15
2.03 Treatment of Other Equity Interests.....................................................................18
2.04 Closing.................................................................................................19
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Disclosure Schedules....................................................................................20
3.02 Standards...............................................................................................20
3.03 Representations and Warranties of the Sellers...........................................................21
3.04 Representations and Warranties of Buyer.................................................................43
ARTICLE IV
COVENANTS
4.01 Conduct Prior to Closing................................................................................45
4.02 Acquisition Proposals...................................................................................47
4.03 Retention and Other Compensation Related Matters........................................................48
4.04 Filings, Other Actions; Notification....................................................................48
4.05 Investment Company Matters..............................................................................50
4.06 Advisory Agreements.....................................................................................51
4.07 Taxation................................................................................................52
4.08 Access; Information. ...................................................................................53
4.09 Publicity...............................................................................................53
4.10 Takeover Statutes.......................................................................................54
i
4.11 Reasonable Best Efforts.................................................................................54
4.12 Pre-Closing Distributions...............................................................................54
4.13 Expenses................................................................................................54
4.14 Subsidiary Action.......................................................................................54
4.15 Unitholder Approval.....................................................................................54
4.16 Proxy Statement.........................................................................................55
4.17 Indemnification; Directors' and Officers' Insurance.....................................................56
4.18 Financial Obligations of Buyer Parent...................................................................56
4.19 Further Assurances......................................................................................57
ARTICLE V
CONDITIONS
5.01 Conditions to Each Party's Obligation to Effect the Transactions........................................57
5.02 Conditions to Obligations of Buyer......................................................................57
5.03 Conditions to Obligations of the Sellers................................................................59
ARTICLE VI
TERMINATION
6.01 Termination by Mutual Consent...........................................................................60
6.02 Termination by Either Buyer or the Sellers..............................................................60
6.03 Termination by Buyer....................................................................................60
6.04 Termination by General Partner..........................................................................61
6.05 Effect of Termination and Abandonment...................................................................61
6.06 Termination Fee.........................................................................................61
ARTICLE VII
MISCELLANEOUS AND GENERAL
7.01 Survival................................................................................................62
7.02 Waiver; Amendment.......................................................................................63
7.03 Governing Law and Venue; Waiver of Jury Trial...........................................................63
7.04 Waiver of Sovereign Immunity............................................................................64
7.05 Notices.................................................................................................64
7.06 Entire Understanding; Third Party Beneficiaries.........................................................66
7.07 Obligations of Buyer....................................................................................66
7.08 Transfer Taxes..........................................................................................67
7.09 Interpretation..........................................................................................67
7.10 Assignment..............................................................................................67
7.11 Counterparts............................................................................................67
7.12 Specific Performance....................................................................................67
ii
Exhibit A Post-Closing Employee Plan
iii
This AGREEMENT AND PLAN OF MERGER, dated as of June 16, 2000
(this "AGREEMENT"), by and among Nvest Corporation, a Delaware corporation,
Nvest, L.P., a Delaware limited partnership, Nvest Companie., a Delaware limited
partnership, CDC Finance, a French legal entity, CDC Asset Management, a French
legal entity, CDCAM North America Corporation, a Delaware corporation, CDCAM
Partnership, L.P., a Delaware limited partnership, and CDCAM Partnership II,
L.P., a Delaware limited partnership (each, a "PARTY" and, collectively, the
"PARTIES").
RECITALS
A. THE PARTIES. The Parties to this Agreement are as
follows:
CDC Finance is a French legal entity.
CDC Asset Management ("BUYER PARENT"), a French legal entity,
is a majority owned subsidiary of CDC Finance.
CDCAM North America Corporation ("BUYER"), a corporation
organized under the laws of Delaware, is a wholly-owned direct subsidiary of
Buyer Parent.
CDCAM Partnership, L.P. ("PUBLIC PARTNERSHIP MERGER SUB"), a
limited partnership formed under the laws of Delaware.
CDCAM Partnership II, L.P. ("PRIVATE PARTNERSHIP MERGER SUB"),
a limited partnership formed under the laws of Delaware.
Nvest Corporation ("GENERAL PARTNER"), a corporation organized
under the laws of Massachusetts, is the managing general partner of Private
Partnership and the sole general partner of Public Partnership.
Nvest, L.P. ("PUBLIC PARTNERSHIP"), a limited partnership
formed under the laws of Delaware, is the advising general partner of Private
Partnership.
Nvest Companies, L.P. ("PRIVATE PARTNERSHIP") is a limited
partnership formed under the laws of Delaware.
B. THE TRANSACTIONS. The Parties desire and intend to engage
in a series of transactions, which will include (i) a merger of Public
Partnership Merger Sub with and into Public Partnership and (ii) a merger of
Private Partnership Merger Sub with and into Private Partnership.
C. AGREEMENT OF MERGER. This Agreement constitutes an
agreement of merger within the meaning of Section 17-211 of the DE Partnership
Law with respect to each of the Public Partnership Merger and the Private
Partnership Merger.
NOW, THEREFORE, in consideration of the premises, and of the
covenants, representations, warranties and agreements contained herein and in
the other Transaction Documents, the Parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 CERTAIN DEFINITIONS. The following terms are used in this
Agreement with the meanings set forth below:
"ACQUIRED ENTITIES" has the meaning set forth in Section
4.07(a).
"ACQUISITION PROPOSAL" has the meaning set forth in Section
4.02.
"ADJUSTED ASSETS UNDER MANAGEMENT" has the meaning set forth
in Section 2.01(d).
"ADVISORY AGREEMENT" means, with respect to any Person, each
Contract relating to its rendering of investment management or investment
advisory services to a Client, including any sub-advisory or similar agreement.
"AFFILIATE" means, with respect to any specified Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Equity
Interests, by Contract or otherwise; and the terms "controlling" and
"controlled" have correlative meanings to the foregoing. For purposes of the
definition of "control", a general partner or managing member of a Person shall
always be considered to control such Person.
"AGREEMENT" has the meaning set forth in the preamble to this
Agreement.
"APPLICABLE LAW" means any domestic or foreign federal or
state statute, law, ordinance, rule, administrative interpretation, regulation,
order, writ, injunction, directive, judgment, decree, policy, guideline or other
requirement (including those of any Self-Regulatory Organization) applicable to
any of the Parties, any of each of their respective Subsidiaries, or any of the
Parties' or their respective Subsidiaries' properties or assets, as the case may
be.
2
"AUDIT DATE" has the meaning set forth in Section 3.03(h).
"AUTHORITY" means any Governmental Authority or
Self-Regulatory Organization.
"BASE DATE" has the meaning set forth in Section 2.01(d).
"BASE REVENUE RUN-RATE" has the meaning set forth in Section
2.01(d).
"BUYER" has the meaning set forth in Recital A.
"BUYER PARENT" has the meaning set forth in Recital A.
"BUYER REPRESENTATIVES" has the meaning set forth in Section
4.08(a).
"CGM" has the meaning set forth in Section 3.03(k).
"CLIENT" means each Investment Company and each other Person
for which a Subsidiary of Private Partnership is a Service Provider.
"CLOSING" has the meaning set forth in Section 2.04.
"CLOSING DATE" has the meaning set forth in Section 2.04.
"CLOSING REVENUE RUN-RATE" has the meaning set forth in
Section 2.01(d).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPENSATION AND BENEFIT PLAN" shall have the meaning set
forth in Section 3.03(m)(i).
"CONSTITUENT DOCUMENTS" means, with respect to any
corporation, its charter and by-laws; with respect to any partnership, its
certificate of partnership and partnership agreement; with respect to any
limited liability company, its certificate of formation and limited liability
company or operating agreement; with respect to any trust, its declaration or
agreement of trust; and with respect to each other Person, its comparable
constitutional instruments or documents; together in each case, with all
material consents and other instruments delegating authority pursuant to such
Constituent Documents.
"CONTRACT" means, with respect to any Person, any agreement,
indenture, undertaking, debt instrument, contract, guarantee, loan, note,
mortgage, arrangement, license, lease or other commitment, whether written or
oral, to which such Person or any of its
3
Subsidiaries is a party or by which any of them is bound or to which any of
their assets or properties is subject.
"CONTROLLED AFFILIATE" has the meaning set forth in Section
3.03(e).
"CORPORATE SUBSIDIARIES" has the meaning set forth in Section
3.03(l)(vi).
"CSFB" has the meaning set forth in Section 3.03(n).
"DE PARTNERSHIP LAW" means the Delaware Revised Uniform
Limited Partnership Act, 6 Del. C. Sections 17-101 et seq., as amended from
time to time.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section
3.01.
"ENCUMBRANCE" means any lien, encumbrance, mortgage,
restriction, pledge, security interest, right of first refusal, claim or other
encumbrance.
"ENVIRONMENTAL LAW" has the meaning set forth in Section
3.03(t).
"EQUITY INTEREST" means, with respect to any Person, any share
of capital stock of, general, limited or other partnership interest, membership
interest or similar ownership interest in the equity of, such Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means, with respect to any Person, any trade
or business, whether or not incorporated, which together with such Person would
be deemed a "single-employer" within the meaning of Section 4001 of ERISA.
"ERISA CLIENT" has the meaning set forth in
Section 3.03(o)(ii)(F).
"ESCROW ACCOUNT" has the meaning set forth in Section 2.04.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"EXECUTIVE OFFICERS" means those officers of Public
Partnership who file beneficial ownership reports due to their status as
"officers" within the meaning of Rule 16a-1(f) under the Exchange Act.
"FEDERAL RESERVE" means the Board of Governors of the Federal
Reserve System.
4
"FEE TRIGGERING EVENT" has the meaning set forth in Section
6.06(b).
"GAAP" means generally accepted accounting principles in the
United States of America as in effect at the time any applicable financial
statements were prepared.
"GENERAL PARTNER" has the meaning set forth in Recital A.
"GENERAL PARTNER PARENT" means the immediate parent of General
Partner.
"GOVERNMENTAL AUTHORITY" means any United States or foreign
government, any state or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including the SEC, the securities
commission or other authority of any state or foreign jurisdiction, the Federal
Reserve or any other government authority, agency, department, board, commission
or instrumentality of any such government, state or political subdivision
thereof, and any court, tribunal or arbitrator(s) of competent jurisdiction, and
any governmental organization, agency or authority.
"HAZARDOUS SUBSTANCE" has the meaning set forth in Section
3.02(t)(v).
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"INVESTMENT ADVISERS ACT" means the Investment Advisers Act of
1940, as amended, and the rules and regulations promulgated thereunder.
"INVESTMENT COMPANY" means an investment company, as such term
is defined in the Investment Company Act, and any entity that, but for the
provisions of Section 3(c) of such Act, would be an investment company under
such Act. When used herein without such a reference to a specified Person,
"Investment Company" refers to any Investment Company for which Private
Partnership or any Subsidiary of Private Partnership acts as a Service Provider.
"INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended, and the rules and regulations promulgated thereunder.
"INVESTMENT COMPANY ADVISORY AGREEMENT" means any Advisory
Agreement to which an Investment Company is a party.
"INVESTMENT COMPANY BOARD" or "BOARD" means the board of
directors or trustees (or Persons performing similar functions) of an Investment
Company.
"IRS" means the Internal Revenue Service, and any successor
thereto.
5
"MATERIAL ADVERSE EFFECT" means, with respect to any Seller,
any effect that is material and adverse to the financial condition, assets,
properties, management, business or results of operations of Public Partnership,
Private Partnership and their respective Subsidiaries, taken as a whole, or,
with respect to Buyer Parent, Buyer and their respective Subsidiaries, taken as
a whole other than to the extent resulting from changes in U.S. or global
securities markets, currency fluctuations or industry or economic conditions in
general, PROVIDED that a reduction in the Revenue Run-Rate between the Base Date
and the Closing Date in and of itself shall not constitute a Material Adverse
Effect.
"MATERIAL SUBSIDIARIES" shall mean those Persons Previously
Disclosed.
"MULTIEMPLOYER PLAN" has the meaning set forth in Section
3.03(m)(v).
"MULTIPLE EMPLOYER PLAN" has the meaning set forth in Section
3.03(m)(v).
"NASD" means the National Association of Securities Dealers,
Inc., and any successor thereto.
"NON-REGISTERED INVESTMENT COMPANY" means an Investment
Company that is not required to be registered under the Investment Company Act.
"NOTICE" has the meaning set forth in Section 4.06.
"OPTION" shall have the meaning set forth in Section 2.03.
"ORDER" has the meaning set forth in Section 5.01(c).
"PARTNERSHIP EQUITY PLANS" means collectively the Nvest, L.P.
and Nvest Companies, L.P. 2000 Equity Incentive Plan, the Nvest, L.P. and Nvest
Companies, L.P. 1997 Equity Incentive Plan, the Nvest Companies, L.P. Restricted
Unit Plan and the Nvest, L.P. and Nvest Companies, L.P. 1993 Equity Incentive
Plan.
"PARTY" and "PARTIES" have the meaning set forth in the
preamble to the Agreement.
"PAYING AGENT" has the meaning set forth in Section 2.01(f).
"PBGC" has the meaning set forth in Section 3.03(m)(iv).
"PENSION PLAN" means an "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA.
6
"PERSON" means any individual, bank, corporation, company,
partnership (limited or general), limited liability company, association, joint
venture, trust, stock insurance company, unincorporated organization or other
entity or similar contractual arrangement or relationship.
"PREVIOUSLY DISCLOSED" by a Party or Parties means information
set forth in its or their Disclosure Schedule.
"PRIVATE PARTNERSHIP" has the meaning set forth in Recital A.
"PRIVATE PARTNERSHIP CERTIFICATE OF MERGER" has the meaning
set forth in Section 2.02(b).
"PRIVATE PARTNERSHIP EFFECTIVE TIME" has the meaning set forth
in Section 2.02(b).
"PRIVATE PARTNERSHIP GP UNIT" has the meaning set forth in
Section 2.02(d).
"PRIVATE PARTNERSHIP LP UNIT" has the meaning set forth in
Section 2.02(d).
"PRIVATE PARTNERSHIP MERGER" has the meaning set forth in
Section 2.02(a).
"PRIVATE PARTNERSHIP MERGER SUB" has the meaning set forth in
Recital A.
"PRIVATE PARTNERSHIP PARTNERSHIP AGREEMENT" means the Amended
and Restated Agreement of Limited Partnership of Private Partnership.
"PRIVATE PARTNERSHIP SURVIVING PARTNERSHIP" has the meaning
set forth in Section 2.02(a).
"PRIVATE PARTNERSHIP UNITHOLDERS" has the meaning set forth in
Section 2.02(f)(i).
"PRIVATE PARTNERSHIP UNITS" has the meaning set forth in
Section 2.02(d)(iii).
"PRIVATE PARTNERSHIP UNITHOLDERS" has the meaning set forth in
Section 2.02(f)(i).
"PROXY STATEMENT" has the meaning set forth in Section 4.16.
"PUBLIC PARTNERSHIP" has the meaning set forth in Recital A.
"PUBLIC PARTNERSHIP CERTIFICATE OF MERGER" has the meaning set
forth in Section 2.01(b).
"PUBLIC PARTNERSHIP EFFECTIVE TIME" has the meaning set forth
in Section 2.01(b).
7
"PUBLIC PARTNERSHIP GP UNIT" has the meaning set forth in
Section 2.01(d).
"PUBLIC PARTNERSHIP LP UNIT" has the meaning set forth in
Section 2.01(d).
"PUBLIC PARTNERSHIP MERGER" has the meaning set forth in
Section 2.01(a).
"PUBLIC PARTNERSHIP MERGER SUB" has the meaning set forth in
Recital A.
"PUBLIC PARTNERSHIP PARTNERSHIP AGREEMENT" means the Second
Amended and Restated Agreement of Limited Partnership of Public Partnership.
"PUBLIC PARTNERSHIP SURVIVING PARTNERSHIP" has the meaning set
forth in Section 2.01(a).
"PUBLIC PARTNERSHIP UNITHOLDERS" has the meaning set forth in
Section 2.01(f)(i).
"PUBLIC PARTNERSHIP UNITHOLDERS MEETING" has the meaning set
forth in Section 4.15(a).
"PUBLIC PARTNERSHIP UNITS" has the meaning set forth in
Section 2.01(d)(iii).
"REGISTERED INVESTMENT COMPANY" means an Investment Company
registered under the Investment Company Act.
"REPORT" has the meaning set forth in Section 3.03(o)(iii)(H).
"RESTRICTED UNIT" means an award of restricted limited
partnership units in Public Partnership granted pursuant to the Partnership
Equity Plans.
"REVENUE RUN-RATE" has the meaning set forth in Section
2.01(d).
"SEC" means the Securities and Exchange Commission, and any
successor thereto.
"SEC REPORTS" has the meaning set forth in Section 3.03(h).
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"SECURITIES LAWS" means the Securities Act, the Exchange Act,
the Investment Company Act, the Investment Advisers Act and the state "blue sky"
laws, and the rules and regulations promulgated thereunder.
8
"SELF-REGULATORY ORGANIZATION" means the NASD, the National
Futures Association, each national securities exchange in the United States and
each other commission, board, agency or body, whether United States or foreign,
that is charged with the supervision or regulation of brokers, dealers,
securities underwriting or trading, stock exchanges, commodities exchanges,
insurance companies or agents, investment companies or investment advisers, or
to the jurisdiction of which it is otherwise subject.
"SELLER MATERIAL CONTRACT" has the meaning set forth in
Section 3.02(q).
"SELLER PARENT" means Metropolitan Life Insurance Company, an
indirect parent company of General Partner.
"SELLERS" means, collectively, Private Partnership, Public
Partnership and General Partner.
"SERVICE PROVIDER" means any Person who acts as investment
manager, investment adviser or subadviser or who provides distribution or
marketing services.
"SHORTFALL RATIO" has the meaning set forth in Section
2.01(d).
"SPONSORED" means, with respect to any Investment Company, an
Investment Company which has a majority of its officers who are employees of
Private Partnership or any of its Subsidiaries or of which Private Partnership
or any of its Subsidiaries holds itself out as the "Sponsor".
"SUBSIDIARY" of any Person (the "subject Person") means any
Person, whether incorporated or unincorporated, of which (i) at least fifty
percent (50%) of the securities or ownership interests having by their terms
ordinary voting power to elect a majority of the board of directors or managers
or other Persons performing similar functions or (ii) (A) a general partner
interest or (B) a managing membership interest, is directly or indirectly owned
or controlled by the subject Person or by one or more of its Subsidiaries;
PROVIDED, HOWEVER, that the term Subsidiary shall not apply to any Sponsored
Non-Registered Investment Company.
"SUPERIOR PROPOSAL" has the meaning set forth in Section 4.02.
"TAKEOVER STATUTE" means any "interested holder," "fair
price," "moratorium," "control share acquisition" or other similar anti-takeover
statute or regulation.
"TAX" and "TAXES" means any and all federal, state, local or
foreign taxes, charges, fees, levies or other assessments, however denominated,
including, without limitation, all net income, gross income, gross receipts,
gains, sales, use, ad valorem, goods and services, capital, production,
transfer, franchise, windfall profits, license, withholding, payroll,
employment, disability, employer health, excise, estimated, severance, stamp,
occupation,
9
property, environmental, unemployment or other taxes, custom duties, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any taxing
authority whether arising before, on or after the Closing Date.
"TAX RETURNS" mean any return, amended return or other report
(including, without limitation elections, declarations, disclosures, schedules,
estimates and information returns) required to be filed with respect to any Tax.
"TERMINATION DATE" has the meaning set forth in Section 6.02.
"TERMINATION FEE" has the meaning set forth in Section
6.06(a).
"TRANSACTION DOCUMENTS" means this Agreement, the Support and
Cooperation Agreement, Support Agreements with certain unitholders of Private
Partnership and each employment agreement entered into in contemplation of the
Transactions.
"TRANSACTIONS" means, collectively, the Private Partnership
Merger, the Public Partnership Merger and each other transaction contemplated by
Article II of this Agreement.
"12B-1 PLAN" has the meaning set forth in Section 3.03(o)(i).
"UNIT PRICE" has the meaning set forth in Section 2.01(d).
1.02 TERMS GENERALLY. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Agreement include both the
plural and the singular;
(2) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision;
(3) the words "including" and "include" and other words of
similar import shall be deemed to be followed by the phrase "without
limitation"; and
(4) the term "reasonable best efforts" of any Party with
respect to any specified action or result shall mean efforts that a
reasonable Person would make to take such action or accomplish such
result in light of the present intentions of such Party with respect to
the Transactions and the benefits to be obtained by such Party upon the
consummation of the transactions contemplated by the Transaction
Documents.
10
ARTICLE II
THE TRANSACTIONS
2.01 THE PUBLIC PARTNERSHIP MERGER.
(a) THE PUBLIC PARTNERSHIP MERGER. Upon the terms and subject
to the conditions set forth in this Agreement, at the Public
Partnership Effective Time, Public Partnership Merger Sub shall be
merged with and into Public Partnership and the separate partnership
existence of Public Partnership Merger Sub shall thereupon cease (the
"PUBLIC PARTNERSHIP MERGER"). Public Partnership shall be the surviving
entity in the Public Partnership Merger (sometimes hereinafter referred
to as the "PUBLIC PARTNERSHIP SURVIVING PARTNERSHIP"), and the separate
partnership existence of Public Partnership, with all its rights,
privileges, immunities, powers and franchises, shall continue
unaffected by the Public Partnership Merger, except as set forth in
Section 2.01(c). The Public Partnership Merger shall have the effects
specified in Section 17-211(h) of the DE Partnership Law.
(b) PUBLIC PARTNERSHIP EFFECTIVE TIME. On the Closing Date,
immediately following the satisfaction of all the conditions set forth
in Article V, Public Partnership and Public Partnership Merger Sub
shall cause a certificate of merger (the "PUBLIC PARTNERSHIP
CERTIFICATE OF MERGER") to be executed, acknowledged and filed with the
Secretary of State of Delaware as provided in Section 17-211(c) of the
DE Partnership Law. The Public Partnership Merger shall become
effective at the time on the Closing Date specified in the Public
Partnership Certificate of Merger (the "PUBLIC PARTNERSHIP EFFECTIVE
TIME").
(c) THE PUBLIC PARTNERSHIP SURVIVING PARTNERSHIP AGREEMENT.
Effective as of the Public Partnership Effective Time, the Public
Partnership Partnership Agreement shall be amended and restated in its
entirety and a new partnership agreement shall be adopted which limited
partnership agreement shall be in a form to be determined by Buyer
prior to the Closing.
(d) EFFECT ON PARTNERSHIP INTERESTS. At the Public Partnership
Effective Time, as a result of the Public Partnership Merger and
without any action on the part of the holders of any partnership
interest in Public Partnership:
(i) PUBLIC PARTNERSHIP MERGER CONSIDERATION. Each
unit of limited partner interest in Public Partnership issued
and outstanding immediately prior to the Public Partnership
Effective Time (a "PUBLIC PARTNERSHIP LP UNIT"), shall be
converted into the right to receive, without interest, an
amount in cash equal to $40.00 (such amount, as it may be
adjusted in accordance with this Section 2.01(d)(i), the "UNIT
PRICE"), PROVIDED that:
11
(x) in the event that the Revenue Run-Rate
as of the most recent calendar month-end prior to the
Closing Date (the "CLOSING REVENUE RUN-RATE") is less
than 90% of the Revenue Run-Rate as of the Base Date
(the "BASE REVENUE RUN-RATE") and is equal to or
greater than 85% of the Base Revenue Run-Rate, then
the Unit Price shall be reduced by an amount equal to
the Unit Price multiplied by the Shortfall Ratio; and
(y) in the event that the Closing Revenue
Run-Rate is less than 85% of the Base Revenue
Run-Rate, then the Unit Price shall be reduced by an
amount equal to the sum of (A) the Unit Price
multiplied by the Shortfall Ratio and (B) the Unit
Price multiplied by the Additional Shortfall Ratio.
PROVIDED, FURTHER, that the Unit Price as so adjusted
shall not be less than $34.00.
The "SHORTFALL RATIO" shall be equal to the
excess of (i) 90% over (ii) a fraction (expressed as
a percentage) the numerator of which is the Closing
Revenue Run-Rate and the denominator of which is the
Base Revenue Run-Rate.
The "ADDITIONAL SHORTFALL RATIO" shall be
equal to the excess of (i) 85% over (ii) a fraction
(expressed as a percentage) the numerator of which is
the Closing Revenue Run-Rate and the denominator of
which is the Base Revenue Run-Rate.
"REVENUE RUN-RATE" shall mean, as of any
date, the aggregate annualized investment advisory,
investment management and subadvisory fees for all
investment management accounts (other than, in the
case of the Closing Revenue Run-Rate, accounts of
Clients that have not consented in accordance with
Section 4.04(c) or Section 4.06 to the assignment or
deemed assignment of their respective Advisory
Agreements resulting from the Transactions or that
have withdrawn such consents) managed by the
Subsidiaries of Private Partnership and payable to
such Subsidiaries, determined by multiplying the
Adjusted Assets Under Management for each such
account by the applicable fee rate for such account
at such date (excluding any performance-based fees)
or, with respect to calculating the Closing Revenue
Run-Rate, in the case of any Registered Investment
Company that has modified its applicable fee rate, by
such modified fee rate to be in effect for such
account immediately following the Closing. The
calculation of the Closing Revenue Run-Rate shall be
made using
12
substantially the same methodology as the calculation
of the Base Revenue Run-Rate.
"BASE DATE" shall mean April 30, 2000.
"ADJUSTED ASSETS UNDER MANAGEMENT" shall
mean, for any investment management account as of a
particular date, the amount of assets under
management by the Subsidiaries of Private Partnership
in that account as of the Base Date, as adjusted, in
the case of the Closing Revenue Run-Rate, (i) to
reflect net cash flows (additions, withdrawals and
reinvestments), new accounts and terminated accounts
from and after the Base Date and (ii) to exclude any
increase or decrease in assets under management due
to market appreciation or depreciation or currency
fluctuations from and after the Base Date.
For purposes of calculating the Base Revenue Run-Rate and the
Closing Revenue Run-Rate, all accounts of the Clients
Previously Disclosed in section 2.01(d)(i) of the General
Partner's Disclosure Schedules shall be excluded.
(ii) PUBLIC PARTNERSHIP GP UNITS. Each unit of
general partner interest in Public Partnership issued and
outstanding immediately prior to the Public Partnership
Effective Time (a "PUBLIC PARTNERSHIP GP UNIT") shall be
converted into the right to receive, without interest, an
amount in cash equal to the Unit Price.
(iii) CANCELLATIONS OF UNITS, ETC. All such Public
Partnership LP Units and all such Public Partnership GP Units
(collectively, "PUBLIC PARTNERSHIP UNITS"), by virtue of the
Public Partnership Merger and without any action on the part
of the holders thereof, shall no longer be outstanding and
shall be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such Public
Partnership Units shall thereafter cease to have any rights
with respect to such Public Partnership Units, except the
right to receive the Unit Price for each Public Partnership
Unit upon the surrender of such certificate in accordance with
Section 2.01(f).
(e) PUBLIC PARTNERSHIP MERGER SUB. At the Public Partnership
Effective Time, the limited partner interest in Public Partnership
Merger Sub issued and outstanding immediately prior to the Public
Partnership Effective Time shall be converted into and become
exchangeable for the limited partner interest in the Public Partnership
Surviving Partnership and the general partner interest in Public
Partnership Merger Sub issued and outstanding immediately prior to the
Public Partnership Effective Time shall be converted into the general
partner interest in Public Partnership Surviving Partnership.
13
(f) PAYMENT FOR PUBLIC PARTNERSHIP UNITS.
(i) PAYING AGENT. At or prior to the Public
Partnership Effective Time, Buyer shall deposit, or shall
cause to be deposited, with a paying agent selected by Buyer
and not reasonably objected to by Public Partnership (the
"PAYING AGENT"), amounts sufficient in the aggregate to
provide all funds necessary for the Paying Agent to make
payments pursuant to Section 2.01(d)(i) and (ii) to holders of
Public Partnership Units issued and outstanding immediately
prior to the Public Partnership Effective Time ("PUBLIC
PARTNERSHIP UNITHOLDERS").
(ii) PAYMENT PROCEDURES. Promptly after the Public
Partnership Effective Time, Buyer shall cause Public
Partnership Surviving Partnership to cause to be mailed to
each Person who was, at the Public Partnership Effective Time,
a holder of record of issued and outstanding Public
Partnership Units (i) a letter of transmittal specifying that
delivery shall be effected, and the risk of loss and title to
each certificate representing Public Partnership Units shall
pass, only upon delivery of such certificate (or affidavits of
loss in lieu thereof) to the Paying Agent, such letter of
transmittal to be customary in form and substance, and (ii)
instructions for use in effecting the surrender of such
certificates. Upon surrender to the Paying Agent of any such
certificate, together with such letter of transmittal, duly
executed and completed in accordance with the instructions
thereto, Buyer shall cause Public Partnership Surviving
Partnership to promptly cause to be paid to the Person(s)
entitled thereto, by check, the amount to which such Person(s)
are entitled pursuant to Section 2.01(d)(i) or (ii), as the
case may be, after giving effect to any required tax
withholding. No interest will be paid or will accrue on the
amount payable upon the surrender of any such certificate. If
payment is to be made to a Person other than the registered
holder of a certificate surrendered, it shall be a condition
of such payment that the certificate so surrendered shall be
properly endorsed or otherwise in proper form for transfer and
that the Person requesting such payment shall pay any transfer
or other taxes required by reason of the payment to a Person
other than the registered holder of the certificate
surrendered or establish to the satisfaction of Public
Partnership Surviving Partnership or the Paying Agent that
such tax has been paid or is not applicable.
(iii) TRANSFERS. After the Public Partnership
Effective Time, there shall be no transfers on the books and
records of Public Partnership of the Public Partnership Units
that were outstanding immediately prior to the Public
Partnership Effective Time.
(iv) TERMINATION OF PAYMENT FUND. Three hundred and
sixty five (365) days following the Public Partnership
Effective Time, Public Partnership
14
Surviving Partnership or its successor shall be entitled to
cause the Paying Agent to deliver to it any funds (including
any interest received with respect thereto) made available to
the Paying Agent which have not been disbursed to Public
Partnership Unitholders since the Public Partnership Effective
Time, and thereafter such holders shall be entitled to look to
Public Partnership Surviving Partnership only as general
creditors thereof with respect to the cash payable upon due
surrender of such certificates. Notwithstanding the foregoing,
neither the Paying Agent nor any Party hereto shall be liable
to any holder of such certificates for any amount paid to a
public official pursuant to any applicable abandoned property,
escheat or similar law. Public Partnership Surviving
Partnership shall pay all charges and expenses, including
those of the Paying Agent, in connection with the payment of
cash in exchange for Public Partnership Units.
(v) LOST, STOLEN OR DESTROYED PUBLIC PARTNERSHIP
CERTIFICATES. In the event any certificate representing Public
Partnership Units 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 Public Partnership, the posting by such Person
of a bond in customary amount as indemnity against any claim
that may be made against it with respect to such certificate,
the Paying Agent will pay in exchange for such lost, stolen or
destroyed certificate the consideration due to such holder
pursuant to Section 2.01(d)(i) or (ii) upon due surrender of
the Public Partnership Units represented by such certificate.
(g) DISSENTERS' OR APPRAISAL RIGHTS. Public Partnership
Unitholders shall not be entitled to any dissenters' rights or rights
of appraisal with respect to such holders' Public Partnership Units.
(h) ADJUSTMENTS TO PREVENT DILUTION. In the event that
Public Partnership changes the number of Public Partnership Units
issued and outstanding prior to the Public Partnership Effective Time,
by means of a unit split, recapitalization, unit consolidation or
similar transaction, the Unit Price shall be proportionately adjusted.
2.02 THE PRIVATE PARTNERSHIP MERGER.
(a) THE PRIVATE PARTNERSHIP MERGER. Upon the terms and subject
to the conditions set forth in this Agreement, at the Private
Partnership Effective Time, Private Partnership Merger Sub shall be
merged with and into Private Partnership and the separate partnership
existence of Private Partnership Merger Sub shall thereupon cease (the
"PRIVATE PARTNERSHIP MERGER"). Private Partnership shall be the
surviving entity in the Private Partnership Merger (sometimes
hereinafter referred to as the "PRIVATE PARTNERSHIP SURVIVING
PARTNERSHIP"), and the separate partnership existence of Private
Partnership, with all its rights, privileges, immunities, powers and
franchises, shall continue
15
unaffected by the Private Partnership Merger, except as set forth in
Section 2.02(c). The Private Partnership Merger shall have the effects
specified in Section 17-211(h) of the DE Partnership Law.
(b) PRIVATE PARTNERSHIP EFFECTIVE TIME. Immediately following
the consummation of the transactions contemplated by Section 2.01(a),
Private Partnership and Private Partnership Merger Sub will cause a
certificate of merger (the "PRIVATE PARTNERSHIP CERTIFICATE OF MERGER")
to be executed, acknowledged and filed with the Secretary of State of
Delaware as provided in Section 17-211(c) of the DE Partnership Law.
The Private Partnership Merger shall become effective immediately
following the Public Partnership Effective Time, such time to be
specified in the Private Partnership Certificate of Merger (the
"PRIVATE PARTNERSHIP EFFECTIVE TIME"), PROVIDED, HOWEVER, that the
Private Partnership Merger shall not become effective and the
provisions of this Section 2.02 shall have no effect unless the Public
Partnership Merger shall have become effective prior thereto.
(c) THE PRIVATE PARTNERSHIP SURVIVING PARTNERSHIP AGREEMENT.
Effective as of the Private Partnership Effective Time, the Private
Partnership Partnership Agreement shall be amended and restated in its
entirety and a new partnership agreement shall be adopted which limited
partnership agreement shall be in a form to be determined by Buyer
prior to the Closing.
(d) EFFECT ON PARTNERSHIP INTERESTS. At the Private
Partnership Effective Time, as a result of the Private Partnership
Merger and without any action on the part of the holders of any
partnership interest in Private Partnership:
(i) PRIVATE PARTNERSHIP MERGER CONSIDERATION. Each
unit of limited partner interest in Private Partnership issued
and outstanding immediately prior to the Private Partnership
Effective Time (a "PRIVATE PARTNERSHIP LP UNIT") shall be
converted into the right to receive, without interest, an
amount in cash equal to the Unit Price.
(ii) PRIVATE PARTNERSHIP GP UNITS. (A) Each unit of
general partner interest in Private Partnership held by Public
Partnership Surviving Partnership immediately prior to the
Private Partnership Effective Time shall be canceled and
extinguished, and no payment will be made with respect to
those Units and (B) each other unit of general partner
interest in Private Partnership issued and outstanding
immediately prior to the Private Partnership Effective Time (a
"PRIVATE PARTNERSHIP GP UNIT") shall be converted into the
right to receive, without interest, an amount in cash equal to
the Unit Price.
(iii) CANCELLATIONS OF UNITS, ETC. All such Private
Partnership LP Units and all such Private Partnership GP Units
(collectively, "PRIVATE PARTNERSHIP
16
UNITS"), by virtue of the Private Partnership Merger and
without any action on the part of the holders thereof, shall
no longer be outstanding and shall be canceled and retired and
shall cease to exist, and each Private Partnership Unitholder
shall thereafter cease to have any rights with respect to such
Private Partnership Units, except the right to receive the
Unit Price for each Private Partnership Unit in accordance
with Section 2.02(f).
(e) PRIVATE PARTNERSHIP MERGER SUB. At the Private Partnership
Effective Time, the limited partner interest in Private Partnership
Merger Sub issued and outstanding immediately prior to the Private
Partnership Effective Time shall be converted into and become
exchangeable for the limited partner interest in Private Partnership
Surviving Partnership, and the general partner interest in Private
Partnership Merger Sub issued and outstanding immediately prior to the
Private Partnership Effective Time shall be converted into the general
partner interest in Private Partnership Surviving Partnership.
(f) PAYMENT FOR PRIVATE PARTNERSHIP UNITS.
(i) PRIVATE PARTNERSHIP PAYING AGENT. At or prior to
the Private Partnership Effective Time, Buyer shall deposit,
or shall cause to be deposited, with the Paying Agent, amounts
sufficient in the aggregate to provide all funds necessary for
the Paying Agent to make payments pursuant to Section
2.02(d)(i) and (ii), as the case may be, to holders of Private
Partnership Units issued and outstanding immediately prior to
the Private Partnership Effective Time ("PRIVATE PARTNERSHIP
UNITHOLDERS").
(ii) PAYMENT PROCEDURES. Promptly after the Private
Partnership Effective Time, Buyer shall cause Private
Partnership Surviving Partnership to cause to be mailed or
delivered to each Person who was, at the Private Partnership
Effective Time, a holder of record of issued and outstanding
Private Partnership Units a letter of transmittal, such letter
of transmittal to be customary in form and substance. Upon
receipt by the Paying Agent of such letter of transmittal,
duly executed and completed in accordance with the
instructions thereto, Buyer shall cause Private Partnership
Surviving Partnership to promptly cause to be paid to the
Person(s) entitled thereto, by check or by wire, as indicated
on such letter of transmittal, the amount to which such
Person(s) are entitled pursuant to Section 2.02(d)(i) and
2.02(ii), after giving effect to any required tax withholding.
No interest will be paid or will accrue on the amount payable
upon the surrender of any such certificate.
(iii) TRANSFERS. After the Private Partnership
Effective Time, there shall be no transfers on the books and
records of Private Partnership of the Private
17
Partnership Units that were outstanding immediately prior to
the Private Partnership Effective Time.
(iv) TERMINATION OF PAYMENT FUND. Three hundred and
sixty five (365) days following the Private Partnership
Effective Time, Private Partnership Surviving Partnership or
its successor shall be entitled to cause the Paying Agent to
deliver to it any funds (including any interest received with
respect thereto) made available to the Private Partnership
Paying Agent which have not been disbursed to Private
Partnership Unitholders since the Private Partnership
Effective Time, and thereafter such holders shall be entitled
to look to Private Partnership Surviving Partnership only as
general creditors thereof with respect to the cash payable
upon due surrender of such certificates. Notwithstanding the
foregoing, neither the Paying Agent nor any Party hereto shall
be liable to Private Partnership Unitholders for any amount
paid to a public official pursuant to any applicable abandoned
property, escheat or similar law. Private Partnership
Surviving Partnership shall pay all charges and expenses,
including those of the Paying Agent, in connection with the
payment of cash in exchange for Private Partnership Units.
(g) DISSENTERS' OR APPRAISAL RIGHTS. Private Partnership
Unitholders shall not be entitled to any dissenters' rights or rights
of appraisal with respect to such holders' Private Partnership Units.
(h) ADJUSTMENTS TO PREVENT DILUTION. In the event that Private
Partnership changes the number of Private Partnership Units issued and
outstanding prior to the Private Partnership Effective Time, by means
of a unit split, recapitalization, unit consolidation or similar
transaction, the Unit Price shall be proportionately adjusted.
2.03 TREATMENT OF OTHER EQUITY INTERESTS. The Sellers shall
take all actions necessary so that (i) each outstanding option (an "OPTION") to
purchase Public Partnership Units granted to employees, directors or consultants
of the Public Partnership and its Affiliates under the Partnership Equity Plans,
whether or not then vested or exercisable, shall (x) become fully vested and
exercisable immediately prior to the Closing, and (y) be canceled as of the
Closing and thereafter represent the right to receive at the Closing, or as soon
as practicable thereafter, from Private Partnership Surviving Partnership in
consideration for such cancellation an amount in cash equal to the product of
(A) the number of Public Partnership Units previously subject to such Option and
(B) the excess, if any, of the Unit Price over the exercise price per Public
Partnership Unit previously subject to such Option, less any required
withholding taxes; and (ii) the restrictions applicable to each Restricted Unit
granted to employees, directors or consultants of the Public Partnership and its
Affiliates under the Partnership Equity Plans in respect of Public Partnership
Units shall lapse immediately prior to the Closing; it being understood that the
holders of each Restricted Unit shall thereafter be entitled to participate in
the Public Partnership Merger in the same manner as all other Public Partnership
Unitholders. Buyer and Buyer Parent
18
agree to provide sufficient funds to Private Partnership Surviving Partnership
to allow it to meet its obligations under this Section 2.03.
2.04 CLOSING. The closing of the Transactions (the "CLOSING") shall
take place (i) at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four
Times Square, New York, New York at 10:00 A.M. on the fifth business day after
the date on which the last of the conditions set forth in Article V (other than
those conditions that by their nature are to be satisfied at the Closing, but
subject to the fulfillment or waiver of those conditions) that are to be
fulfilled or waived shall have been fulfilled or waived in accordance with this
Agreement (and, in any event, at least ten days after the end of a calendar
month), PROVIDED that, in the sole discretion of General Partner,
(A) the Closing may be delayed in order to
permit the Sellers to obtain Client consents
(PROVIDED that such consents are reasonably expected
to be obtained within 45 days of when the Closing
would otherwise occur and PROVIDED FURTHER, that
Closing may not be delayed beyond the Termination
Date) in order to avoid or mitigate the adjustment to
the Unit Price set forth in the first proviso of
Section 2.01(d)(i), and
(B) the Closing may occur on such fifth
business day (or on such other date permitted by
clause (A) of this Section 2.04(i)), PROVIDED that to
the extent that the Unit Price will be adjusted
pursuant to the first proviso of Section 2.01(d)(i)
solely as a result of the failure of the applicable
Subsidiary of Private Partnership to obtain the
consent of one or more Registered Investment
Companies in accordance with Section 4.04(c) due to
the absence of a quorum at a shareholder meeting,
notwithstanding any other term or provision of this
Article II, (1) the Buyer shall pay the amount of
such adjustment into an escrow account (the "ESCROW
ACCOUNT") to be established with a third party
financial institution with customary terms to be
agreed upon by General Partner and Buyer, (2) if any
such consent or consents are obtained in accordance
with Section 4.04(c) within the period permitted by
Rule 15a-4 under the Investment Company Act, each
Person who was entitled to receive payments under
this Article II shall be promptly paid the excess of
(x) the amount such Person would have been paid under
this Article II (without regard to any required
withholding tax) had all such consents received at or
prior to such time from such consenting Registered
Investment Companies been obtained prior to the
Closing and (y) the aggregate amount previously paid
(or, had no tax withholding been required, the
aggregate amount that would have been paid) to such
Person pursuant to this Article II, plus earnings on
such excess, net of any expenses, including those of
the escrow agent, if any, and less any required tax
withholding and (3) upon the termination of such
period, any amount remaining in such
19
escrow account not required to paid in accordance
with clause (2) of this Section 2.04(i)(B) shall be
promptly paid to Buyer (the parties further agree
that (1) notwithstanding the foregoing, no payment
under this Section 2.04(i)(B) shall be required to be
made until the later of (A) the compliance by the
holder to which any payment is required to be made
with the payment procedures described in Article II
and (B) the earlier of the time at which (i) all such
consents shall have been obtained, (ii) sufficient
consents shall have been obtained such that had such
consents been obtained prior to the Closing no such
adjustment would have been required and (iii) the
expiration of the period permitted by Rule 15a-4
under the Investment Company Act, (2) Buyer shall
instruct the third party financial institution
selected to act as escrow agent to invest the amounts
deposited into the Escrow Account in investments as
agreed to in the escrow agreement, and (3) Buyer
shall be entitled to make all payments to the former
unitholders in accordance with the instructions
received in connection with the compliance with the
payment procedures described in Article II by the
applicable former unitholder), or
(ii) at such other place and time and/or on such
other date as Buyer and General Partner may agree in writing
(the "CLOSING DATE").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 DISCLOSURE SCHEDULES. On or prior to the execution hereof, (i)
Buyer has delivered to General Partner a disclosure schedule and (ii) General
Partner has delivered to Buyer a disclosure schedule (with respect to each such
delivering Party or Parties, its "DISCLOSURE SCHEDULE"), in each case setting
forth, among other things, items the disclosure of which is necessary or
appropriate either in response to an express disclosure requirement contained in
a provision hereof or as an exception to the correspondingly labeled
representation or warranty (or such other representation or warranty to the
extent that it is reasonably apparent that such disclosure is applicable to such
other representation or warranty) made pursuant to Section 3.03 or 3.04, as the
case may be; PROVIDED that the mere inclusion of an item in a Disclosure
Schedule as an exception to a representation or warranty shall not be deemed an
admission by a Party that such item represents such an exception or that such
item is reasonably likely to result in a Material Adverse Effect with respect to
such Party.
3.02 STANDARDS. For purposes of the representations and warranties
set forth in Sections 3.03 and 3.04, no representation or warranty contained in
Section 3.03 (excluding paragraph (i)(D) thereof), in the case of each Seller,
and Section 3.04, in the case of Buyer shall be deemed untrue or incorrect, and
no Party shall be deemed to have breached such a
20
representation or warranty, as a consequence of the existence of any fact, event
or circumstance unless:
(a) in the case of each representation and warranty contained
in paragraphs (b), (c), (f), (g)(ii)(A), (h) and (l)(iii) and (ix) of
Section 3.03, and paragraphs (b), (c) and (d) of Section 3.04 (without
regard to any qualification as to materiality, Material Adverse Effect,
substantially or other words of qualification set forth in such
representations and warranties), such fact, circumstance or event would
cause any such representation and warranty to fail to be true and
correct in any material respect; and
(b) in the case of each other representation and warranty
contained in Section 3.03 and Section 3.04 (other than Section 3.03(d))
(without regard to any qualification as to materiality, Material
Adverse Effect, substantially or other words of qualification set forth
in such representations and warranties) such fact, circumstance or
event, individually or in the aggregate, has had or is reasonably
likely to have a Material Adverse Effect with respect to such Party.
3.03 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Except as
Previously Disclosed, each of the Sellers makes each of the following
representations and warranties.
(a) ORGANIZATION, STANDING AND AUTHORITY. Each of the Sellers
hereby represents and warrants that:
(i) it and each of its Subsidiaries is duly organized
or formed, validly existing and in good standing under the
laws of its jurisdiction of organization or formation, with
full power and authority to own, lease or operate its assets
and to carry on its business as currently conducted;
(ii) it and each of its Subsidiaries is duly
qualified to do business and is in good standing in each state
of the United States and any jurisdiction outside the United
States where its ownership or leasing of property or assets or
the conduct of its business requires it to be so qualified;
and
(iii) prior to the date hereof, it has made available
to Buyer a complete and correct copy, as of the date hereof,
of its Constituent Documents and the Constituent Documents of
each of its Material Subsidiaries, in each case as amended to
such date. As of the date hereof, each such Constituent
Document is in full force and effect.
(b) CAPITALIZATION OF PRIVATE PARTNERSHIP; EQUITY INTERESTS.
Each of the Sellers hereby represents and warrants that:
21
(i) as of May 31, 2000, there were 6,301,582 Private
Partnership GP Units, and 38,078,004 Private Partnership LP
Units issued and outstanding, which together constituted all
of the issued and outstanding Equity Interests in Private
Partnership as of such date;
(ii) as of May 31, 2000, 100 Private Partnership GP
Units were held of record and beneficially by General Partner
free and clear of all Encumbrances by the General Partner, and
6,301,482 Private Partnership GP Units were held of record and
beneficially by Public Partnership free and clear of all
Encumbrances;
(iii) as of May 31, 2000, all of the outstanding
Private Partnership LP Units were held of record by the
Persons set forth in Section 3.03(b) of its Disclosure
Schedule, which also sets forth the number of Private
Partnership LP Units held by each such Person;
(iv) each of the outstanding Private Partnership LP
Units and Private Partnership GP Units was duly authorized and
validly issued, is fully paid, and, subject to Applicable Law,
nonassessable, is not and subject to preemptive rights and was
not issued in violation of any preemptive rights;
(v) as of May 31, 2000, there are no Equity Interests
in Private Partnership to be received by any Person pursuant
to any Contract or Compensation and Benefit Plan;
(vi) as of May 31, 2000, there were no outstanding
rights, options, warrants, conversion rights, redemption
rights, repurchase rights, or agreements, arrangements or
commitments to issue or sell any Private Partnership LP Units,
Private Partnership GP Units or other Equity Interests in
Private Partnership or securities of Private Partnership or
any securities or obligations convertible or exchangeable into
or exercisable for, or giving any Person a right to subscribe
for or acquire, any such Private Partnership LP Units, Private
Partnership GP Units or other Equity Interests or securities
of Private Partnership and no securities or obligations
evidencing such rights are authorized, issued or outstanding;
and
(vii) except as Previously Disclosed, neither Private
Partnership nor any of its Subsidiaries has outstanding any
bonds, debentures, notes or other obligations for borrowed
money the holders of which have the right to vote or which are
convertible into or exercisable for securities having the
right to vote, with the holders of Private Partnership LP
Units or Private Partnership GP Units on any matter.
(c) PUBLIC PARTNERSHIP CAPITALIZATION. Each of the Sellers
hereby represents and warrants that:
22
(i) as of May 31, 2000, there were 110,000 Public
Partnership GP Units and 6,191,482 Public Partnership LP Units
issued and outstanding, which together constituted all of the
issued and outstanding Equity Interests in Public Partnership;
(ii) each Public Partnership GP Unit is held of
record and beneficially by General Partner free and clear of
all Encumbrances;
(iii) each of the outstanding Public Partnership LP
Units and Public Partnership GP Units was and each Public
Partnership Unit issuable pursuant to options will be, when so
issued, duly authorized and validly issued, is or, when so
issued, will be fully paid and, subject to Applicable Law,
nonassessable, is not and, when so issued, will not be subject
to preemptive rights, and was not and, when so issued, will
not be issued in violation of any preemptive rights;
(iv) except for the options to acquire 7,628,857
Public Partnership Units Previously Disclosed pursuant to
clause (v) below, as of May 31, 2000, there were no
outstanding rights, options, warrants, conversion rights,
redemption rights, repurchase rights, or agreements,
arrangements or commitments to issue or sell any Public
Partnership LP Units, Public Partnership GP Units or other
Equity Interests in Public Partnership or securities of Public
Partnership or any securities or obligations convertible or
exchangeable into or exercisable for, or giving any Person a
right to subscribe for or acquire, any such Public Partnership
LP Units, Public Partnership GP Units or other Equity
Interests or securities of Public Partnership and no
securities or obligations evidencing such rights are
authorized, issued or outstanding;
(v) Previously Disclosed is a list, as of May 31,
2000, of any Equity Interests in Public Partnership to be
received by any Person pursuant to any Contract or
Compensation and Benefit Plan, indicating the name of each
such Person, the Contract or Compensation and Benefit Plan
pursuant to which it is entitled or will be entitled to
receive such Equity Interests, the type, class and number of
Equity Interests the Person is or will be entitled to receive
thereunder, the equivalent amount of Public Partnership Units
such Equity Interests represent and the purchase price, if
any, to be paid by such Person in consideration for such
Equity Interests; and
(vi) except as Previously Disclosed, neither Public
Partnership nor any of its Subsidiaries has outstanding any
bonds, debentures, notes or other obligations for borrowed
money the holders of which have the right to vote, or are
convertible into or exercisable for securities having the
right to vote, with the
23
holders of Public Partnership LP Units or Public Partnership
GP Units on any matter.
(d) AGGREGATE CAPITALIZATION. There will be no more than
52,050,000 Private Partnership Units outstanding (assuming all options
to acquire Public Partnership Units have been exercised) at the
Closing.
(e) SUBSIDIARIES AND CONTROLLED AFFILIATES OF PRIVATE
PARTNERSHIP. Each of the Sellers hereby represents and warrants that:
(i) Previously Disclosed is a complete and correct
list of all of the Subsidiaries of Private Partnership and
each Affiliate of Private Partnership controlled by Private
Partnership or any of its Subsidiaries (other than any
Affiliates that individually or in the aggregate are not
material to Private Partnership and its Subsidiaries as a
whole) (a "CONTROLLED AFFILIATE"), together with the
jurisdiction of organization of each such Subsidiary and
Controlled Affiliate;
(ii) except as Previously Disclosed, Private
Partnership owns, directly or indirectly, all of the issued
and outstanding Equity Interests in and other securities of
each of its Subsidiaries, free and clear of any Encumbrances;
(iii) except as Previously Disclosed, each of the
outstanding Equity Interests in and each other security of
each of its Subsidiaries was duly authorized and validly
issued, is fully paid and, subject to Applicable Law,
nonassessable, and was not issued in violation of any
preemptive rights; and
(iv) except as Previously Disclosed, there are no
preemptive or other outstanding rights, options, warrants,
conversion rights, redemption rights, repurchase rights, or
agreements, arrangements or commitments to issue or sell any
Equity Interests of any such Subsidiary or any securities or
obligations convertible or exchangeable into or exercisable
for, or giving any Person a right to subscribe for or acquire,
any such Equity Interests, and no securities or obligations
evidencing such rights are authorized, issued or outstanding.
(f) AUTHORITY; APPROVAL AND FAIRNESS. Each of the Sellers
hereby represents and warrants that:
(i) each such Person has all requisite corporate,
partnership or limited liability company power and authority
and has taken all corporate, partnership or limited liability
company action necessary in order to execute, deliver and
perform its obligations under each of the Transaction
Documents to which it is or will be a party and to consummate,
subject to the adoption of this Agreement by
24
(A) the Public Partnership Unitholders in accordance with the
Public Partnership Partnership Agreement and DE Partnership
Law and (B) the Private Partnership Unitholders in accordance
with the Private Partnership Partnership Agreement and DE
Partnership Law, the transactions contemplated by such
Transaction Documents;
(ii) no Person has any dissenter's, appraisal or
similar right with respect to the consummation of the
Transactions contemplated by this Agreement or the other
Transaction Documents; and
(iii) each Transaction Document to which such Person
is a party is or, when executed and delivered in accordance
with the terms thereof or of this Agreement and assuming the
due authorization, execution and delivery by each other Person
who is a party thereto, will be a valid and binding agreement
of such Person, enforceable against such Person in accordance
with its respective terms, subject to bankruptcy, insolvency
and similar laws of general applicability relating to or
affecting creditors' rights, and subject as to enforceability
to general equity principles.
(g) REGULATORY FILINGS; NO DEFAULTS. Each of the Sellers
hereby represents and warrants as to itself and each of its
Subsidiaries that:
(i) except as Previously Disclosed, no consents,
registrations, approvals, permits or authorizations of, or
notices, reports, registrations or other filings with, any
Authority are required to be made or obtained by any such
Person in connection with the execution, delivery or
performance by it or any of its Subsidiaries of this Agreement
or any other Transaction Document to which it or any of its
Subsidiaries is a party, or to consummate the transactions
hereunder or thereunder except for filings to be made under
the HSR Act and the filings required pursuant to Sections
2.01(b) and 2.02(b); and
(ii) the execution and delivery by it and each of its
Subsidiaries that is a party to a Transaction Document of each
of the Transaction Documents to which such Person is a party
does not, and, subject to the satisfaction of Section
3.03(f)(i) and 3.03(g)(i) above, the consummation of the
transactions thereunder will not, constitute or result in (A)
a breach or violation of, or a default under, its Constituent
Documents or those of any of its Subsidiaries, (B) except as
Previously Disclosed, a breach or violation of, or a default
or loss of benefits under, the acceleration of any obligations
or the creation of an Encumbrance on its assets or those of
its Subsidiaries (with or without notice, lapse of time or
both) pursuant to any Seller Material Contract or any
governmental permit or license held by it or any of its
Subsidiaries or to which any such Person or any of its
25
assets is subject or (C) except as Previously Disclosed, any
change in the rights or obligations of any party under any of
such Contracts.
(h) PUBLIC PARTNERSHIP FINANCIAL STATEMENTS; SEC REPORTS. Each
of the Sellers hereby represents and warrants that:
(i) Public Partnership has filed with the SEC and
made available to Buyer a copy of all reports, registration
statements, proxy statements or information statements filed
with the SEC by Public Partnership since December 31, 1998,
under the Securities Act, or under Section 13(a), 13(c), 14 or
15(d) of the Exchange Act (collectively with any such reports
filed subsequent to the date hereof and as amended, the "SEC
REPORTS");
(ii) as of their respective dates (or, if amended, as
of the date of such amendment), the SEC Reports complied, and
any SEC Reports filed with the SEC subsequent to the date
hereof will comply, in all material respects with the
Securities Act or the Exchange Act, as the case may be, and
the SEC Reports did not, and any SEC Reports filed with the
SEC subsequent to the date hereof will not, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances in
which they were made, not misleading;
(iii) each of the statements of financial condition
of Public Partnership and the consolidated statements of
financial condition of Private Partnership included in or
incorporated by reference into the SEC Reports (including the
related notes and schedules) fairly presents, or if filed
after the date hereof will fairly present, the financial
condition of Public Partnership and Private Partnership as of
its respective date, and each of the related statements of
operations, cash flows and changes in partners' capital of
Public Partnership and each of the related consolidated
statements of operations, cash flows and changes in partners'
capital of Private Partnership included in or incorporated by
reference into the SEC Reports (including the related notes,
statements and schedules) fairly presents, or if filed after
the date hereof will fairly present, the results of
operations, cash flow or changes in partners' capital, as the
case may be, of Public Partnership and Private Partnership for
the periods set forth therein (subject, in the case of
unaudited statements, to the absence of notes and normal
year-end audit adjustments that will not be material in amount
or effect), in each case in accordance with GAAP consistently
applied during the periods involved, except as may be noted
therein;
(iv) except as disclosed in the SEC Reports or as
Previously Disclosed, since December 31, 1999 (the "AUDIT
DATE"), none of Public Partnership, Private Partnership or
their respective Subsidiaries has incurred any material
liability
26
(accrued, contingent or otherwise) other than (A) in the
ordinary course of business consistent with past practice
since the Audit Date or (B) as contemplated by or in
connection with the Transaction Documents; and
(v) the books and records of each of the Sellers and
their respective Subsidiaries and Sponsored Investment
Companies have been maintained in accordance with GAAP in all
material respects and in accordance with good business
practices and all Applicable Laws and reflect only actual
transactions.
(i) ABSENCE OF CERTAIN CHANGES. Each of the Sellers hereby
represents and warrants that, except as disclosed in the SEC Reports
filed prior to the date hereof, as Previously Disclosed, or as
contemplated by the Transaction Documents, since the Audit Date, Public
Partnership, Private Partnership and their respective Subsidiaries have
conducted their respective businesses in the ordinary course and (A)
there has not been, as of the date hereof, any declaration, setting
aside or payment of any dividend or other distribution in respect of
its Equity Interests, except (x) for distributions of any kind not in
excess of such Person's operating cash flow for such period plus prior
reserves or (y) distributions to Private Partnership from any
Subsidiaries thereof; (B) there has not been any change by any such
Persons in accounting principles, practices or methods other than any
change required by a change in GAAP; (C) it has not (i) made or agreed
to make any increase in wages, salaries, compensation, pension, or
other fringe benefits or perquisites payable to any Executive Officers
or, other than in the ordinary course of business consistent with past
practice, to any other directors, managing directors, officers,
consultants or employees of Private Partnership, Public Partnership or
any of their Subsidiaries, (ii) granted or agreed to grant any
severance or termination pay, entered into any contract to make or
grant any severance or termination pay, or paid any bonus, to any
Executive Officers or, other than in the ordinary course of business
consistent with past practice, to any other directors, managing
directors, officers or employees of Private Partnership, Public
Partnership or any of their Subsidiaries; (iii) granted or agreed to
grant any stock appreciation rights or granted any rights to acquire
any Private Partnership Units, Public Partnership Units or any other
Equity Interests in either Public Partnership or Private Partnership or
any of their Subsidiaries to any directors, managing directors,
officers or employees of Private Partnership, Public Partnership or any
of their Subsidiaries, in each case, other than grants to employees
that are not Executive Officers made in the ordinary course of business
consistent with past practice under its Compensation and Benefits
Plans; or (iv) amended or agreed to amend any of the Compensation and
Benefits Plans in a manner that would cause a material increase in the
costs of providing benefits thereunder; and (D) there has occurred no
event and arisen no condition which has resulted in or could reasonably
be expected to result in a Material Adverse Effect with respect to the
Sellers.
(j) LITIGATION. Except as disclosed in the SEC Reports or as
Previously Disclosed, there is no suit, action or proceeding pending
or, to the knowledge of Sellers,
27
threatened against or affecting General Partner, Public Partnership,
Private Partnership or their Subsidiaries or any of their or their
Subsidiaries' assets or properties that individually or in the
aggregate has had or would reasonably be expected (i) to result in a
Material Adverse Effect with respect to the Sellers, Public Partnership
Surviving Partnership or Private Partnership Surviving Partnership,
(ii) as of the date hereof, to impair the ability of the Sellers to
perform their obligations under this Agreement in any material respect
or (iii) as of the date hereof, to delay in any material respect or
prevent the consummation of any of the Transactions, nor is there any
judgment, decree, injunction, rule or order of any Authority or
arbitrator outstanding against the General Partner, Public Partnership,
Private Partnership or any of their Subsidiaries having, or which would
reasonably be expected to result in, a Material Adverse Effect with
respect to the Sellers.
(k) COMPLIANCE WITH APPLICABLE LAWS; PERMITS. Each Seller
hereby represents and warrants that:
(i) it and each of its Subsidiaries is in substantial
compliance with all Applicable Laws;
(ii) it and each of its Subsidiaries is in
substantial compliance with all requirements under Applicable
Law for permits, licenses, authorizations, orders and
approvals of all Authorities that are required in order to
permit such Person to own or lease its properties and assets
and to conduct its business as presently conducted; and all of
such Person's material permits, licenses, certificates of
authority, orders and approvals are in full force and effect
and are current and, to such Seller's knowledge, no suspension
or cancellation of any of them is threatened or is reasonably
likely;
(iii) (A) it and each of its Subsidiaries which is
required to be registered as a broker/dealer, an investment
adviser, a registered representative, a commodity trading
advisor, commodity pool operator, futures commission merchant
or transfer agent (or in a similar capacity) with any
Authority, is duly registered and each such registration is in
full force and effect; and (B) each of the officers and
employees of it and its Subsidiaries and each other Person of
which Private Partnership or its Subsidiaries or any of their
officers or employees is a "person associated with a broker or
dealer", as defined in Section 3(a)(18) of the Exchange Act
that, in any case, is required to be registered or licensed as
a broker/dealer, an investment adviser, a registered
representative, a commodity trading advisor, commodity pool
operator, futures commission merchant, transfer agent or a
sales person (or in a similar capacity) with any Authority, is
duly registered or licensed and each such registration or
license is in full force and effect; except, in the case of
any officer or employee, for any failure to be so registered
or licensed that, individually or in the aggregate, does not
and would not be reasonably likely to,
28
materially affect the business conducted by Public
Partnership, Private Partnership and their Subsidiaries taken
as a whole;
(iv) neither it nor any of its Subsidiaries has
received, since January 1, 1998, any notification or
communication in writing, from any Authority (A) threatening
to revoke or condition the continuation of any material
license, franchise, seat on any exchange, permit, or
governmental authorization or (B) restricting or disqualifying
their activities (except for restrictions generally imposed by
rule, regulation or administrative policy on similarly
regulated Persons generally);
(v) to its knowledge, there are no pending or
threatened investigations, examinations, audits, reviews or
disciplinary proceedings by any Authority, other than
investigations, examinations, audits and reviews that are (A)
conducted in the ordinary course of it, any of its
Subsidiaries or any director, managing director, officer or
employee of any Seller or any such Subsidiary and (B) that are
not reasonably likely to materially adversely affect the
business conducted by Private Partnership, Public Partnership
and its Subsidiaries taken as a whole;
(vi) except as Previously Disclosed, neither any
Seller nor any Subsidiary thereof nor any of their respective
directors, managing directors, executive officers or employees
is subject to any cease and desist, censure or other
disciplinary or similar order issued by, or is a party to any
written agreement, consent agreement, memorandum of
understanding or disciplinary agreement with, or is a party to
any commitment letter or similar undertaking to, or subject to
any order or directive by, or a recipient of any supervisory
letter from, any Authority with respect to the business of
such Person;
(vii) neither it nor any of its Subsidiaries is
registered as, or is required to be registered as, an
investment company under the Investment Company Act;
(viii) each Form ADV filed by each Subsidiary or
Private Partnership that is a registered investment adviser
under the Investment Advisers Act, in its most recent form
filed with the SEC, including any amendments thereto filed
with the SEC, complies in all material respects with the
Investment Advisers Act and is complete and correct in all
significant respects and omits no material facts required to
be stated therein;
(ix) each Form BD filed by each Subsidiary of Private
Partnership that is a registered broker dealer under the
Exchange Act, in its most recent form filed with the SEC,
including any amendments thereto filed with the SEC, complies
in all material respects with the Exchange Act and is complete
and correct in all significant respects and omits no material
facts required to be stated therein; and
29
(x) each Form TA filed by each Subsidiary of Private
Partnership that is a registered transfer agent under the
Exchange Act, in its most recent form filed with the SEC,
including any amendments thereto filed with the SEC, complies
in all material respects with the Exchange Act and is complete
and correct in all significant respects and omits no material
facts required to be stated therein.
(l) TAX MATTERS. Each Seller hereby represents and warrants
that except as Previously Disclosed:
(i) all material Tax Returns required to be filed on
or before the Closing Date by Private Partnership or any of
its Subsidiaries have been, or will be, duly and timely filed
or furnished, the information reflected on those Tax Returns
was, or when filed or furnished will be, accurate and complete
in all material respects, and Private Partnership and each of
its Subsidiaries has, or will have, timely paid all material
Taxes for which it is responsible that are due on or before
the Closing Date, and through the Closing Date will have
maintained adequate reserves on its books in accordance with
GAAP for all Taxes payable by it that have accrued but are not
yet due;
(ii) no assessments, claims or deficiencies for any
material Taxes of Private Partnership or any of its
Subsidiaries have been proposed, asserted, assessed, or
threatened in writing;
(iii) there are no outstanding waivers or agreements
extending the applicable statute of limitations for any period
with respect to any material Taxes of Private Partnership or
any of its Subsidiaries;
(iv) each of Private Partnership and, to the Seller's
knowledge, Capital Growth Management L.P. ("CGM") is and since
its formation has been properly classified as a partnership
for United States federal income Tax purposes and not as an
association taxable as a corporation or a "publicly traded
partnership" within the meaning of Section 7704 of the Code;
(v) each of Private Partnership's Subsidiaries (other
than Subsidiaries organized as corporations (the "CORPORATE
SUBSIDIARIES")) is and since its formation has been properly
characterized as either a partnership or a disregarded entity
for United States federal income Tax purposes and not as an
association taxable as a corporation or a "publicly traded
partnership" as defined in Section 7704(b) of the Code;
(vi) Private Partnership and each Subsidiary of
Private Partnership (other than the Corporate Subsidiaries and
any Subsidiary properly classified as a
30
disregarded entity for United States federal income tax
purposes) and CGM has made a valid election under Section 754
of the Code and such election remains in full force and
effect, and will remain in full force and effect, through the
Closing Date;
(vii) all material Tax Returns required to be filed
on or before the Closing Date by Public Partnership have been,
or will be, duly and timely filed or furnished, the
information reflected on those Tax Returns was, or when filed
or furnished will be, accurate and complete in all material
respects, and Public Partnership has, or will have, timely
paid all material Taxes for which it is responsible that are
due on or before the Closing Date, and through the Closing
Date will have maintained adequate reserves on its books in
accordance with GAAP for all Taxes payable that have accrued
but are not yet due;
(viii) no assessments, claims or deficiencies for any
material Taxes of Public Partnership have been proposed,
asserted, assessed, or threatened in writing;
(ix) there are no outstanding waivers or agreements
extending the applicable statute of limitations for any period
with respect to any material Taxes of Public Partnership;
(x) Public Partnership is and since its formation has
been properly characterized as a partnership for United States
federal income tax purposes and not as an association taxable
as a corporation;
(xi) Public Partnership is an "electing 1987
partnership" as defined in Section 7704(g)(2) of the Code and
has made a valid election pursuant to Section 7704(g)(2) of
the Code, and such election remains in full force and effect,
and will remain in full force and effect through the Closing
Date;
(xii) Public Partnership has made a valid election
under Section 754 of the Code and such election remains in
full force and effect, and will remain in full force and
effect, through the Closing Date;
(xiii) each Sponsored Registered Investment Company
is and since its formation has been a "regulated investment
company" as defined in Section 851(a) of the Code, taking into
account the limitations in Section 851(b) of the Code;
(xiv) each Sponsored Registered Investment Company
has met the requirements of Section 852(a) of the Code for
each taxable year since its formation;
31
(xv) each Sponsored Non-Registered Investment Company
is properly classified as a partnership for United States
federal income tax purposes and not as an association taxable
as a corporation or a "publicly traded partnership" as defined
in Section 7704(b) of the Code;
(xvi) none of Public Partnership, Private Partnership
nor any of their Subsidiaries (other than the Corporate
Subsidiaries) is an "Electing Large Partnership" as defined in
Section 775 of the Code and no "section 197 intangible" of
Public Partnership, Private Partnership or any of their
Subsidiaries is excluded from the definition of an
"amortizable Section 197 intangible" by virtue of Section
197(f)(9) of the Code; and
(xvii) all material Tax Returns required to be filed
on or before the Closing Date by each Sponsored Registered
Investment Company have been, or will be, duly and timely
filed or furnished, the information reflected on those Tax
Returns was, or when filed or furnished will be, accurate and
complete in all material respects, and each Sponsored
Registered Investment Company has, or will have, timely paid
all material Taxes for which it is responsible that are due on
or before the Closing Date, and through the Closing Date will
have maintained adequate reserves on its books in accordance
with GAAP for all Taxes payable that have accrued but are not
yet due.
(m) EMPLOYEE BENEFIT PLANS. Each of the Sellers hereby
represents and warrants that:
(i) Previously Disclosed is a complete and correct
list of all existing bonus, incentive, deferred compensation,
pension, retirement, profit-sharing, thrift, savings, employee
stock ownership, stock bonus, stock purchase, restricted
stock, stock option, severance, welfare and fringe benefit
plans, including but not limited to "employee benefit plans"
within the meaning of Section 3(3) of ERISA, and employment or
severance agreements and all similar plans and agreements of
Public Partnership, Private Partnership and their Subsidiaries
which cover any employee, former employee, consultant, former
consultant, director or former director, member or former
member, stockholder or former stockholder, partner or former
partner, of Public Partnership or Private Partnership or any
of their Subsidiaries or such Person's beneficiaries (the
"COMPENSATION AND BENEFIT PLANS"), excluding offer letters
made in the ordinary course of business. A complete and
correct copy of each material Compensation and Benefit Plan,
all amendments thereto, the most recent actuarial report, if
any, and the most recent determination letter from the IRS, if
any, has been provided or made available to Buyer prior to the
date hereof. Except as Previously Disclosed, contemplated by
the Transaction Documents or as required under Applicable Law
(with respect to
32
modifications or changes to Compensation and Benefit Plans
existing as of the date hereof only), neither Public
Partnership, Private Partnership nor any of their respective
Subsidiaries has any commitment to create any additional
Compensation and Benefit Plan or to modify or change any
existing material Compensation and Benefit Plan;
(ii) each such Compensation and Benefit Plan has been
operated and administered substantially in accordance with its
terms and in substantial compliance with Applicable Law,
including, but not limited to, ERISA and the Code, and any
regulations or rules promulgated thereunder, and all filings,
disclosures and notices required by ERISA and the Code, or any
other Applicable Law have been timely made. Each such
Compensation and Benefit Plan which is a Pension Plan and
which is intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the
IRS, and the Sellers are not aware of any circumstances likely
to result in revocation of any such favorable determination
letter from the IRS. No circumstances exist that are likely to
materially adversely affect the qualified status of any
material Compensation and Benefit Plan or the related trust.
To the knowledge of the Sellers, there is no pending or, to
their knowledge, threatened legal action, suit or claim
relating to such Compensation and Benefit Plans, other than
routine claims for benefits. None of Public Partnership,
Private Partnership nor any of their respective Subsidiaries
has engaged in a transaction, or omitted to take any action,
with respect to any Compensation and Benefit Plan that could
reasonably be expected to subject any of them, any such Plan
or any fiduciary thereof to a tax or penalty imposed by either
Section 4975 of the Code or Section 502 of ERISA in an amount
that would be material, assuming for purposes of Section 4975
of the Code that the taxable period of any such transaction
expired as of the date hereof;
(iii) except as Previously Disclosed, neither Public
Partnership nor Private Partnership nor any of their
respective Subsidiaries or ERISA Affiliates has ever
maintained any Pension Plan subject to Title IV or Section 302
of ERISA or Section 412 or 4971 of the Code;
(iv) except as Previously Disclosed, with respect to
each Compensation and Benefit Plan that is a Pension Plan
subject to Title IV or Section 302 of ERISA or Section 412 or
4971 of the Code and each Pension Plan maintained by an ERISA
Affiliate of Public Partnership or Private Partnership: (1)
there does not exist any accumulated funding deficiency
within the meaning of Section 412 of the Code or Section 302
of ERISA, whether or not waived; (2) the fair market value of
the assets of such Compensation and Benefit Plan equals or
exceeds the actuarial present value of all accrued benefits
under such Plan (whether or not vested), based upon the
actuarial assumptions used to prepare the most recent
actuarial report for such Plan; (3) no reportable event within
the meaning of
33
Section 4043(c) of ERISA for which the 30-day notice
requirement has not been waived has occurred; (4) all premiums
to the Pension Benefit Guaranty Corporation (the "PBGC") have
been timely paid in full; (5) no liability (other than for
premiums to the PBGC) under Title IV of ERISA has been or is
expected to be incurred by Private Partnership, Public
Partnership or any of their respective Subsidiaries; and (6)
the PBGC has not instituted proceedings to terminate any such
Plan and, to the Sellers' knowledge, no condition exists that
presents a risk that such proceedings will be instituted or
which would constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee of
administer, any such Plan;
(v) no Compensation and Benefit Plan is a
"multiemployer plan" within the meaning of Section 4001(a)(3)
of ERISA ("MULTIEMPLOYER PLAN") or a plan that has two or more
contributing sponsors at least two of whom are not under
common control, within the meaning of Section 4063 of ERISA
("MULTIPLE EMPLOYER PLAN"). None of Public Partnership,
Private Partnership or any of their respective Subsidiaries or
ERISA Affiliates has, at any time during the last six years,
contributed to or been obligated to contribute to any
Multiemployer Plan;
(vi) there does not now exist, nor do any
circumstances exist that could result in, any liability (1)
under Title IV or Section 302 of ERISA, (2) under sections 412
and 4971 of the Code, (3) as a result of a failure to comply
with the continuation coverage requirements of section 601 et
seq. of ERISA and Section 4980B of the Code, and (4) under
corresponding or similar provisions of foreign laws or
regulations, that would be a liability of Public Partnership,
Private Partnership or their respective Subsidiaries following
the Closing;
(vii) all contributions required to be made by the
Public Partnership or Private Partnership or their respective
Subsidiaries to any Compensation and Benefit Plan by
Applicable Law or regulation or by any plan document or other
contractual undertaking, and all premiums due or payable with
respect to insurance policies under any Compensation and
Benefit Plan, for any period through the date hereof have been
timely made or paid in full to the extent required to be made
or paid on or before the date hereof. Liabilities in respect
of unfunded compensation plans and programs (including, but
not limited to, deferred compensation plans and annual cash
bonus plans) which are Compensation and Benefit Plans have
been properly accrued and are fully reflected on the financial
statements;
(viii) except as Previously Disclosed, none of
Private Partnership, Public Partnership nor any of their
respective Subsidiaries has any obligation to provide retiree
health and life insurance or other retiree death benefits
under any
34
Compensation and Benefit Plan, other than benefits mandated by
Section 4980B of the Code or other Applicable Law; and
(ix) except as Previously Disclosed or as provided by
Section 2.03 hereof, as provided under any Compensation and
Benefit Plan Previously Disclosed as in effect on the date
hereof or as contemplated by a Transaction Document, the
consummation of the Transactions would not, directly or
indirectly (including, without limitation, as a result of any
termination of employment prior to or following the Closing
Date) (A) entitle any present or former employee, consultant
or director, member, stockholder or partner to any payment
(including severance pay or similar compensation) or an excise
tax gross-up or any increase in compensation, (B) result in
the vesting or acceleration of any benefits under any such
Compensation and Benefit Plan or trigger any payment or
funding (through a grantor trust or otherwise) of compensation
or benefits under any such Compensation and Benefit Plan, (C)
result in any increase in benefits payable under any such
Compensation and Benefit Plan, (D) result in any breach or
violation of, or a default under, any such Compensation and
Benefit Plans or (E) restrict or prohibit the right to amend
or terminate any Compensation and Benefit Plan.
(n) BROKERS AND FINDERS. Each of the Sellers hereby represents
and warrants that neither it, nor its Subsidiaries, nor any of its
general partners, managing members, directors, managing directors,
officers, or employees, if any, has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders
fees in connection with this Agreement or any of the Transactions other
than Credit Suisse First Boston Corporation ("CSFB"), which has been
employed as a financial advisor to Private Partnership and the fees and
expenses of which have been Previously Disclosed and shall be paid by
Private Partnership Surviving Partnership if the Closing occurs and by
Private Partnership if this Agreement is terminated.
(o) INVESTMENT ADVISORY ACTIVITIES. Each of the Sellers hereby
represents and warrants that:
(i) ADVISORY AGREEMENTS, INVESTMENT COMPANIES AND
OTHER CLIENTS. Each Advisory Agreement with the Investment
Companies and each other Advisory Agreement with a Client of a
Subsidiary of Private Partnership is valid, binding, in full
force and effect, and enforceable against such Subsidiary in
accordance with its terms, and as of the date hereof; none of
the Sellers nor any of their Subsidiaries has received written
or oral notice of default under or intent to call a default
under any such Advisory Agreement, and to Seller's knowledge,
there exists no event or condition which (with or without
notice or lapse of time or both) would be a breach or a
default on the part of the applicable Seller entity or on the
part of the other party to such Advisory Agreements, other
than such
35
defaults or breaches that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse
Effect on Public Partnership, Private Partnership and their
Subsidiaries, taken as a whole; each Advisory Agreement with
the Sponsored Registered Investment Companies and to the
Sellers' knowledge, each Advisory Agreement with all other
Sponsored Investment Companies, subject to Section 15 of the
Investment Company Act to which Private Partnership or any of
its Subsidiaries is a party and all distribution plans adopted
by the relevant Investment Company in accordance with Rule
12b-1 under the Investment Company Act (each, a "12b-1 PLAN")
relating to such entities have been duly approved and
continued and have been at all times in compliance with the
Investment Company Act; and each Advisory Agreement with the
Investment Companies and each other Advisory Agreement has
been performed by Private Partnership or the applicable
Subsidiary in accordance with its terms and with the
Investment Company Act and all other Applicable Laws in all
material respects; and each Advisory Agreement with the
Investment Companies and each other Advisory Agreement, has
been performed by Public Partnership or Private Partnership or
the applicable Subsidiary in accordance with its terms and
with the Investment Advisers Act and all other Applicable Laws
in all material respects.
(ii) SPONSORED NON-REGISTERED INVESTMENT COMPANIES.
(A) each Sponsored Non-Registered Investment
Company that is a juridical entity has been duly
organized, and is validly existing and in good
standing under the laws of the jurisdiction of its
organization and has all requisite corporate
partnership, limited liability company, or similar
power and authority, and possesses all rights,
licenses, authorizations and approvals necessary to
entitle it to use its name, to own, lease or
otherwise hold its properties and assets and to carry
on its business as it is now conducted, and is duly
qualified, licensed or registered to do business in
each jurisdiction where it is required to do so under
Applicable Law (except where the failure to do so is
not material to its business);
(B) (1) all outstanding shares or units of
each Sponsored Non-Registered Investment Company have
been issued and sold in substantial compliance with
Applicable Law; and (2) each Sponsored Non-Registered
Investment Company, since inception of operations,
has been operated and is currently operating in
substantial compliance with its respective investment
objectives and policies and Applicable Law;
(C) none of the Sponsored Non-Registered
Investment Companies has been enjoined, indicted,
convicted or made the subject of
36
disciplinary proceedings, consent decrees or
administrative orders on account of any violation of
the Securities Laws;
(D) each Investment Company Board of any
Sponsored Non-Registered Investment Company having
such a Board operates in substantial conformity with
all requirements and restrictions applicable to such
Sponsored Non-Registered Investment Company under all
Applicable Laws to which such Sponsored
Non-Registered Investment Company is subject;
(E) the shares of, units of or interests in
each Sponsored Non-Registered Investment Company have
been duly and validly issued and, except as set forth
in the subscription or constituent documents of such
companies, are fully paid and nonassessable;
(F) each account to which Private
Partnership or any Subsidiary thereof provides
investment management, advisory or subadvisory
services that is (i) an employee benefit plan, as
defined in Section 3(3) of ERISA that is subject to
Title I of ERISA; (ii) a Person acting on behalf of
such a plan; or (iii) any entity whose assets include
the assets of such a plan, within the meaning of
ERISA and applicable regulations (hereinafter
referred to as an "ERISA CLIENT") have been managed
by Private Partnership or its applicable Subsidiary
such that (A) the exercise of such management or
provision of any services is in compliance in all
material respects with the applicable requirements of
ERISA and (B) neither Private Partnership nor any
Subsidiary of Private Partnership has engaged in a
"Prohibited Transaction" within the meaning of
Section 406 of ERISA or Section 4975(c) of the Code
that would subject it to liability or Taxes under
Section 5409 or 502(i) of ERISA or Section 4975(a) of
the Code.
(iii) SPONSORED REGISTERED INVESTMENT COMPANIES.
(A) each Sponsored Registered Investment
Company that is a juridical entity has been duly
organized, and is validly existing and in good
standing under the laws of the jurisdiction of its
organization and has all requisite corporate
partnership, limited liability company, or similar
power and authority, and possesses all rights,
licenses, authorizations and approvals necessary to
entitle it to use its name, to own, lease or
otherwise hold its properties and assets and to carry
on its business as it is now conducted, and is duly
qualified, licensed or registered to do business in
each jurisdiction where it is required to do so under
Applicable Law (except where the failure to do so is
not material to its business);
37
(B) (1) all outstanding shares or units of
each Sponsored Registered Investment Company have
been issued and sold in substantial compliance with
Applicable Law; and (2) each Sponsored Registered
Investment Company, since inception of operations,
has been operated and is currently operating in
substantial compliance with its respective investment
objectives and policies and Applicable Law;
(C) none of the Sponsored Registered
Investment Companies has been enjoined, indicted,
convicted or made the subject of disciplinary
proceedings, consent decrees or administrative orders
on account of any violation of the Securities Laws;
(D) each Investment Company Board of any
Sponsored Registered Investment Company having such a
Board operates in substantial conformity with all
requirements and restrictions applicable to such
Sponsored Registered Investment Company under all
Applicable Laws to which such Sponsored Registered
Investment Company is subject;
(E) except as Previously Disclosed, the
shares or units of beneficial interest of each
Sponsored Registered Investment Company have been
duly and validly issued and are fully paid and
nonassessable and the shares or units of beneficial
interest of each Sponsored Registered Investment
Company are qualified for public offering and sale in
each jurisdiction where offers are made to the extent
required under Applicable Law;
(F) each Subsidiary of the Private
Partnership that is an investment adviser to a
Registered Investment Company has adopted a formal
code of ethics and each Subsidiary of Private
Partnership that is a registered investment adviser
under the Investment Advisers Act has adopted a
written policy regarding insider trading, each of
which substantially complies with Applicable Law. The
policies of such Subsidiary with respect to avoiding
conflicts of interest are as set forth in the most
recent Forms ADV thereof, as amended, and to the
Sellers' knowledge, there have been no material
violations or allegations of violations of such
policies that have occurred or been made that have
not been addressed in accordance with these
procedures;
(G) each Sponsored Registered Investment
Company is, and at all times required under the
Securities Laws has been, duly registered with the
SEC as an investment company under the Investment
Company Act;
38
(H) neither Private Partnership nor any of
its Subsidiaries or Affiliates has any express or
implied understanding or arrangement which would
impose an unfair burden on any of the Sponsored
Registered Investment Companies or would in any way
violate Section 15(f) of the Investment Company Act
as a result of any of the Transactions;
(I) All payments by the Sponsored Registered
Investment Companies relating to the distribution of
their shares (other than payments that are not
required by Applicable Law to be paid pursuant to a
12b-1 Plan) have been made in compliance with the
related 12b-1 Plan and each 12b-1 Plan adopted by a
Fund and the operation of each such 12b-1 Plan
currently complies with Rule 12b-1. No Sponsored
Registered Investment Company has paid or is paying,
directly or indirectly, any amount to any person for
the purpose of financing the distribution of its
shares, except in accordance with a 12b-1 Plan or has
made or is making any other payments that violated or
violate Applicable Law;
(J) Each of the Sponsored Registered
Investment Companies has timely filed all
prospectuses, annual information forms, registration
statements, proxy statements, financial statements,
notices on Form 24F-2, other forms, reports, sales
literature and advertising materials and any other
documents required to be filed with applicable
regulatory or other Authorities, and any amendments
thereto (the "REPORTS"), and has timely paid all fees
and interest required to be paid in connection
therewith. The Reports (i) have been prepared in all
material respects in accordance with the requirements
of Applicable Law, and (ii) did not at the time they
were filed, and with respect to any prospectus, proxy
statement, sales literature or advertising material,
did not during the period of its authorized use,
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 the light of the circumstances under
which they were or are made, not misleading; and
(K) The Investment Company Board of each
Sponsored Registered Investment Company has at all
times been constituted and have operated in
conformity with the requirements and restrictions of
section 10, 15(f) and 16 of the Investment Company
Act.
(p) INELIGIBLE PERSONS. None of Private Partnership or any of
its Subsidiaries, nor any "affiliated person" (as defined in the
Investment Company Act) thereof is ineligible pursuant to Section 9(a)
or 9(b) of the Investment Company Act to serve as an investment adviser
(or in any other capacity contemplated by the Investment Company
39
Act) to a registered investment company nor is there any action,
proceeding or investigation pending or, to the knowledge of the
Sellers, threatened by any Authority, which would result in the
ineligibility of Private Partnership or any of its Subsidiaries or any
of their "affiliated persons" (as defined in the Investment Company
Act) to serve in any such capacities. None of Private Partnership, its
Subsidiaries or any "associated person" (as defined in the Investment
Advisers Act) thereof, as applicable, is ineligible pursuant to Section
203 of the Investment Advisers Act to serve as an investment adviser or
as an associated person of a registered investment adviser, nor is
there any action, proceeding or investigation pending or, to the
knowledge of the Sellers, threatened by any Authority, that would
reasonably be expected to result in the ineligibility of Private
Partnership, its Subsidiaries or any of their associated persons or, to
the knowledge of the Sellers, that would reasonably be expected to
provide a basis for a proceeding that would result in such
ineligibility. None of the Private Partnership, its Subsidiaries or any
of their associated persons thereof is ineligible pursuant to Section
15(b) of the Exchange Act to serve as a broker-dealer or as an
associated person to a registered broker-dealer.
(q) CONTRACTS. Except as Previously Disclosed or as otherwise
provided in this Agreement, none of Public Partnership, Private
Partnership, nor any of their Subsidiaries is a party to, and none of
the properties or assets of Public Partnership, Private Partnership or
any of their Subsidiaries is bound by, any Contract (i) which, upon the
consummation of the Transactions or the approval of the holders of
Private Partnership Units or Public Partnership Units of the
Transactions will (either alone or upon the occurrence of any
additional acts or events) result in any payment (whether of severance
pay or otherwise) becoming due from Public Partnership, Private
Partnership, Buyer, Buyer Parent, Surviving Private Partnership,
Surviving Public Partnership, or any of their respective Subsidiaries
to any officer or employee thereof; (ii) which is a "material contract"
(as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) to be performed after the date of this Agreement; (iii) with or to
a labor union or guild (including any collective bargaining agreement);
(iv) (including any stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan) any of the benefits of
which will be increased, or the vesting of the benefits of which will
be accelerated upon the consummation of the Transactions or the
approval of the holders of Private Partnership Units or Public
Partnership Units of the Transactions or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement; (v) granting any material
Encumbrance on any material asset of Public Partnership or Private
Partnership or any of their Subsidiaries; (vi) that is a material
contract with (A) General Partner or any of its Affiliates or (B) any
current or former (to the extent that any obligations of Public
Partnership or Private Partnership are outstanding under such contract)
officer, director or employee of Public Partnership or Private
Partnership or any of their Subsidiaries other than Previously
Disclosed Compensation and Benefit Plans; (vii) under which General
Partner, Public Partnership or Private Partnership or any of their
Subsidiaries has borrowed or may borrow any money from, has guaranteed
any borrowing by any Person, or issued or may issue any
40
note, bond, debenture or other evidence of indebtedness to, any Person,
or any other note, bond, debenture or other evidence of indebtedness of
Public Partnership or Private Partnership or any of its Subsidiaries,
in each case in excess of $5,000,000 individually and $15,000,000 in
the aggregate; (viii) that is any material currency exchange, interest
rate exchange, commodity exchange or similar contract; (ix) that is a
contract for any material joint venture or similar arrangement; or (x)
that is a contract that includes any noncompetition or nonsolicitation
covenant or any exclusive dealing or similar arrangement that limits to
any material extent the freedom of Public Partnership, Private
Partnership or any of their Subsidiaries to compete (geographically or
otherwise) in any line of business or will, after the Closing, so limit
competition by the Public Partnership Surviving Partnership, Private
Partnership Surviving Partnership or their Subsidiaries (collectively,
the "SELLER MATERIAL CONTRACTS"). Each of the Seller Material Contracts
is valid, binding, in full force and effect, and is enforceable against
Public Partnership, Private Partnership and/or their Subsidiaries, as
the case may be, in accordance with its terms. As of the date hereof,
neither Public Partnership, Private Partnership nor any of their
Subsidiaries has received written or oral notice of cancellation of or
default under or intent to cancel or call a default under any of the
Seller Material Contracts. Public Partnership, Private Partnership and
each of its Subsidiaries has performed all material obligations
required to be performed by it to date under the Seller Material
Contracts, and to Sellers' knowledge there exists no event or condition
which (with or without notice or lapse of time or both) would be a
breach or a default on the part of Public Partnership, Private
Partnership or any of their Subsidiaries or on the part of the other
party to such Seller Material Contracts.
(r) INSURANCE. Each insurance policy (including insurance
policies and fidelity bonds relating to the Sponsored Investment
Companies, and the assets, properties and employees of the Sellers and
their Subsidiaries) and bond of the Sellers and their Subsidiaries is
in full force and effect, all premiums due and payable thereon have
been paid and none of the Sellers nor any of their Subsidiaries has
received written notice from any insurer or agent of any intent to
cancel any such insurance policy or bond.
(s) TECHNOLOGY AND INTELLECTUAL PROPERTY. Each of the Sellers
and their Subsidiaries and the Sponsored Investment Companies has (and
upon consummation of the transactions contemplated hereby will have)
ownership of, or such other rights by license, lease or other agreement
in and to, all intellectual property necessary to conduct the business
of the Private Partnership and its Subsidiaries and the Sponsored
Investment Companies substantially in the manner presently conducted,
and the consummation of the Transactions as contemplated hereby does
not and will not conflict with, alter or impair any such ownership or
rights. None of the Sellers or their respective Affiliates has granted
any option or license of any kind to any third party relating to any
technology or intellectual property owned, used, filed by or licensed
to the Sellers or their Subsidiaries (and used in conducting the
business of such entity) or the marketing or distribution thereof. All
such material technology has been maintained in confidence in
accordance
41
with protection procedures customarily used in the industry to protect
rights of like importance. None of the Sellers, their Subsidiaries or
the Sponsored Investment Companies has, to the Seller's knowledge,
infringed or violated any trademark, trade name, copyright, patent,
trade secret right or other proprietary right of others, nor, to the
Sellers' knowledge, has any other Person infringed on a continuing
basis any rights that the Sellers or any of their Subsidiaries has in
the intellectual property. Each of the Sellers, their Subsidiaries and
the Sponsored Investment Companies owns or licenses all computer
software developed or currently used by it which is material to the
conduct of its business as currently conducted and has the right to use
such software without infringing upon the intellectual property rights
(including trade secrets rights) of any third party. None of the
Sellers, any of their Subsidiaries or any of the Sponsored Investment
Companies has received notice of any claim respecting any such
violation or infringement.
(t) ENVIRONMENTAL MATTERS. The Sellers and their Subsidiaries
have complied in all material respects with all applicable
Environmental Laws, and none of the Sellers or any of their
Subsidiaries is subject to any actual or, to the knowledge of the
Sellers, threatened investigation, claim or liability under any
Environmental Law. "Environmental Law" means (i) any federal, state,
foreign or local law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, common law, legal
doctrine, order, judgment, decree, injunction, requirement or agreement
with any governmental entity, (x) relating to the protection,
preservation or restoration of the environment (including, without
limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface land, subsurface land, plant and animal life or
any other natural resource), or to human health or safety, or (y) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of Hazardous Substances (as hereinafter defined), in each case
as amended and as now in effect. "Hazardous Substance" means any
substance presently listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated,
under any Environmental Law, whether by type or by quantity, including
any substance containing any such substance as a component.
(u) OPINION OF FINANCIAL ADVISOR. CSFB has delivered to the
board of directors of General Partner its opinion, dated the date
hereof, accompanied by an authorization to include such opinion in the
Proxy Statement to the effect that, as of the date of this Agreement,
the Unit Price is fair, from a financial point of view, to the holders
of Private Partnership Unitholders and Public Partnership Unitholders.
(v) ANNUALIZED ADVISORY FEE REVENUES. The aggregate annualized
investment advisory, investment management and subadvisory fees for all
investment management accounts managed by the Subsidiaries of Private
Partnership or by CGM and payable to such Persons (excluding such fees from
Clients set forth in section 2.01(d) of the General Partner's Disclosure
Schedule), determined as of April 30, 2000 in good faith in
42
accordance with the methodology described and applied in section 3.03(v) of the
General Partner's Disclosure Schedule, is approximately $539 million.
3.04 REPRESENTATIONS AND WARRANTIES OF BUYER. Except as Previously
Disclosed, each of the Buyer and Buyer Parent makes each of the following
representations and warranties as to itself, Buyer, Public Partnership Merger
Sub and Private Partnership Merger Sub, PROVIDED that no representation and
warranty with respect or relating to Public Partnership Merger Sub or Private
Partnership Merger Sub, as the case may be, will be deemed made until the
Closing Date:
(a) ORGANIZATION, STANDING AND AUTHORITY.
(i) It is duly organized or formed, validly existing
and, if organized in a jurisdiction recognizing the concept of
good standing, in good standing under the laws of its
jurisdiction of organization, as Previously Disclosed, with
full power and authority to own, lease or operate its assets
and to carry on its business as currently conducted;
(ii) it is duly qualified to do business and is in
good standing in each state of the United States where its
ownership or leasing of property or assets or the conduct of
its business requires it to be so qualified; and
(iii) prior to the date hereof, Buyer has made
available to Sellers a complete and correct copy, as of the
date hereof, of the Constituent Documents of each such Person,
in each case as amended to such date. As of the date hereof,
each such Constituent Document is in full force and effect.
(b) AUTHORITY; APPROVAL.
(i) It has all requisite corporate, partnership or
limited liability company power and authority and has taken
all corporate, partnership or limited liability company action
necessary in order to execute, deliver and perform its
obligations under each of the Transaction Documents to which
it is or will be a party and to consummate the transactions
contemplated thereby; and
(ii) each Transaction Document to which it is a party
is or, when executed and delivered in accordance with the
terms thereof or of this Agreement and assuming the due
authorization, execution and delivery by each other Person who
is a party thereto, will be a valid and binding agreement of
it, enforceable against it in accordance with its respective
terms, subject to bankruptcy, insolvency and similar laws of
general applicability relating to or affecting creditors'
rights, and subject as to enforceability to general equity
principles.
(c) REGULATORY FILINGS; NO DEFAULTS.
43
(i) No consents, approvals, permits or authorizations
of, or notices, reports, registrations or other filings with,
any Authority or third party are required to be made or
obtained by it in connection with the execution, delivery or
performance by any such Person of this Agreement or any other
Transaction Document to which it is a party, or to consummate
the transactions hereunder or thereunder except for filings to
be made under the HSR Act, the filing of a notification with
the European Commission under Council Regulation (EEC) No.
4064/89, the filing of a notice with the Supervisory Board of
Buyer Parent and the filings required pursuant to Sections
2.01(b) and 2.02(b); and
(ii) the execution and delivery by it of each of the
Transaction Documents to which it is a party does not, and,
subject to the satisfaction of Section 3.04(c)(i) above, the
consummation of the transactions thereunder will not,
constitute or result in a breach or violation of, or a default
under, the Constituent Documents of any such Person.
(d) INVESTMENT COMPANY ACT. As of the date hereof, neither
Buyer Parent nor any Subsidiary of Buyer Parent has entered into any
Contract (disregarding for this purpose any of the Transaction
Documents) which would impose an "unfair burden" (within the meaning of
Section 15(f) of the Investment Company Act) on any of the Sponsored
Investment Companies of Private Partnership after the Closing.
(e) BROKERS AND FINDERS. Each of Buyer Parent and Buyer hereby
represents and warrants that neither it, nor its Subsidiaries, nor any
of its general partners, managing members, directors, managing
directors, officers, or employees, if any, has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or
finders fees in connection with this Agreement or any of the
Transactions other than Donaldson, Lufkin & Jenrette, which has been
employed as a financial advisor to Buyer Parent and Buyer and the fees
and expenses of which shall be borne by Buyer Parent and Buyer.
(f) BUYER FINANCING. Buyer Parent and Buyer have, or prior to
the Public Partnership Effective Time will have, sufficient funds to
enable it to pay the consideration required to be paid by the Buyer
pursuant to Article II and to perform its obligations hereunder.
44
ARTICLE IV
COVENANTS
4.01 CONDUCT PRIOR TO CLOSING. Except as otherwise provided herein,
each Seller shall, and each Seller shall cause each of its Subsidiaries to,
conduct its business and each of their respective businesses, as the case may
be, in the ordinary and usual course and use reasonable best efforts to
preserve its business organization and their respective business
organizations and assets intact and maintain existing relations and goodwill
with customers, suppliers, distributors, creditors, lessors, employees and
business associates. Without limiting the generality of the foregoing, from
the date hereof until the Closing, except as contemplated in any Transaction
Document or as Previously Disclosed, each such Seller as to itself, shall
not, and each Seller shall cause each of its Subsidiaries not to, do any of
the following without the prior written consent of Buyer, which shall not be
unreasonably withheld or delayed:
(a) issue, sell, pledge, grant, allocate, dispose of or
encumber any Equity Interests in it or any of its Subsidiaries or any
options, warrants, conversion or other rights or understandings of any
kind, contingent or otherwise, to purchase any such Equity Interests
other than upon exercise of any Previously Disclosed outstanding
Options in accordance with the terms of the Partnership Equity Plans;
(b) admit any new partner or member other than in the ordinary
course of its business;
(c) directly or indirectly, adjust, split, combine or
reclassify any of its or its Subsidiaries' Equity Interests or change
or agree to change in any manner the rights of such Equity Interests or
liquidate or dissolve any Seller or any of Sellers' Subsidiaries;
(d) declare, set aside, make or pay any dividend or other
distribution in cash, stock or property in respect of its Equity
Interests, or repurchase, redeem or otherwise acquire, directly or
indirectly, any of its Equity Interests, PROVIDED that (i) the Public
Partnership and Private Partnership shall be permitted to make
distributions required by Section 4.12 and (ii) Subsidiaries of Private
Partnership shall be permitted to make distributions to Private
Partnership;
(e) other than in the ordinary course of its business
transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of
or encumber any of its or their material property or assets, tangible
or intangible, or incur, modify, cancel or waive any material
indebtedness or other liability or obligation;
(f) make, authorize or commit for any capital expenditures
other than in the ordinary course of business of their respective
businesses, as the case may be, or, by any means, make any acquisition
of, or investment in, assets or stock of any other Person or
45
entity, provided that the investment restrictions contained in this
clause (f) shall not apply to investments committed to as of the date
hereof and Previously Disclosed or made in the ordinary course of
business;
(g) terminate, establish, adopt, enter into, or make any new
grants or awards, under any Compensation and Benefit Plan or amend or
otherwise modify any Compensation and Benefit Plan in a manner that
would increase the benefits provided thereunder to any Executive
Officer or, other than in the ordinary course of business
consistent with prior practice, any other person;
(h) amend, supplement or restate its or any of its
Subsidiaries' Constituent Documents, as the case may be, or enter into
any Written Consents which in effect amend, supplement or restate such
Constituent Documents;
(i) implement or adopt any change in any respect of its
accounting practices, policies or principles other than as may be
required by GAAP;
(j) enter into or renew or terminate any Seller Material
Contract with any other Seller or any Affiliate or Subsidiary of any
Seller, or make any amendment or modification to any such agreement if
such entry, renewal, termination, amendment or modification would have
a Material Adverse Effect on Public Partnership or Private Partnership;
(k) take any action that might reasonably be expected to be
or to result in "an addition of a substantial new line of business"
with respect to Public Partnership (within the meaning of Section
7704(g)(2) of the Code) or that might reasonably be expected to cause
Public Partnership to cease to be an "electing 1987 partnership" under
that section;
(l) settle any claim, action or proceeding involving any
liability for money damages in excess of $1,500,000 or any material
restrictions upon any of its operations;
(m) except as and to the extent required, after consultation
with outside legal counsel, in the exercise of the fiduciary
obligations of the Sellers, in the case of any Investment Company,
request that any action be taken by any of the Investment Company
Boards, other than as contemplated by this Agreement and other than
routine actions taken in the ordinary course of business that would not
materially adversely affect such Seller or Investment Company;
(n) voluntarily divest itself of management of any Client or
any assets under management other than in the ordinary course of
business;
46
(o) accelerate the billing or other realizations of advisory
fees payable by Clients to Private Partnership or any of its
Subsidiaries or delay the payment of liabilities beyond the ordinary
course of business;
(p) except as required by Applicable Law, increase the
compensation of any Executive Officer or, other than in the ordinary
course of business consistent with prior practice, any other current or
former employee, managing director, officer, director or consultant of
the General Partner, Public Partnership, Private Partnership or their
respective Subsidiaries, or enter into, adopt, amend or commit
to enter into, adopt or amend any employment, consulting, severance,
change of control or incentive pay agreement with or for the benefit of
any Executive Officer or, other than in the ordinary course of business
consistent with prior practice, any other current or former employee,
managing director, officer, director or consultant of any such Person;
(q) take any action or fail to take any action that would or
could reasonably be expected to result in any of the representations or
warranties set forth in Section 3.03 of the Agreement being or becoming
untrue (subject to the standard set forth in Section 3.02); or
(r) authorize or enter into an agreement to do any of the
foregoing.
4.02 ACQUISITION PROPOSALS. Each of the Sellers agrees that it will
not and will cause each of its Subsidiaries, if any, and its and any such
Subsidiaries' respective executive officers and directors not to, and each
such Seller agrees to direct its and any such Subsidiaries' employees, agents
and representatives (including, without limitation, any investment banker,
attorney or accountant retained by it or any of its Subsidiaries) not to
initiate or solicit directly or indirectly, any inquiries or the making of
any proposal or offer (including, without limitation, any proposal or offer
to stockholders, members or unitholders) with respect to a merger,
reorganization, share exchange, consolidation or similar transaction
involving, or any purchase of all or any significant portion of the assets or
any Equity Interests in, any Seller or any of its Subsidiaries (any such
proposal or offer being hereinafter referred to as an "ACQUISITION PROPOSAL")
or directly or indirectly engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with, any
Person relating to an Acquisition Proposal, or otherwise facilitate any
effort or attempt to make or implement an Acquisition Proposal; PROVIDED,
HOWEVER, that nothing contained in this Section 4.02 shall prevent any Seller
or its managing member, general partner or management board from (A) in the
case of Public Partnership or its management board or representatives,
complying with Rule 14e-2 promulgated under the Exchange Act with regard to
an Acquisition Proposal or providing any other legally required disclosure to
the partners of Private Partnership and Public Partnership; (B) providing
information to, or engaging in any negotiations or discussions with, any
Person who has made an unsolicited bona fide written Acquisition Proposal (i)
if the board of directors of the General Partner, determines, in good faith
after consultation with outside legal counsel, that providing such
information and engaging in such discussions or negotiations is
47
required to comply with its fiduciary duties under Applicable Law
and (ii) if, prior to furnishing any non-public information to any
such party, Private Partnership and/or Public Partnership, as
applicable, shall have entered into a confidentiality agreement on
customary terms as advised by outside legal counsel; or (C)
recommending such an Acquisition Proposal to the members, partners
or unitholders of such Seller and withdrawing the prior
recommendation of this Agreement, if and only to the extent that,
in each such case referred to in clause (B) or (C) above, the board
of directors of the General Partner, determines, in good faith
after consultation with outside legal counsel, that taking such
action is required to comply with its fiduciary duties under
Applicable Law (any such Acquisition Proposal, a "SUPERIOR
PROPOSAL"). Each Seller agrees that it will notify Buyer Parent and
Buyer promptly (within twenty-four hours of receipt) if any such
inquiries, proposals or offers are received by, any such
information is requested from, or any such discussions or
negotiations are 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
proposals or offers and thereafter shall keep Buyer Parent and
Buyer reasonably informed on the status and terms of any such
proposals or offers and the status of any such discussions or
negotiations. Each such Seller shall, and shall cause each
Subsidiary and each of such Sellers' and Subsidiaries' employees,
agents and representatives (including any investment banker,
attorney or accountant) to, immediately cease and cause to be
terminated any activities, discussions or negotiations conducted
prior to the date of this Agreement with any parties other than
Buyer Parent and Buyer with respect to any of the foregoing.
4.03 RETENTION AND OTHER COMPENSATION RELATED MATTERS. Prior to the
Closing, Private Partnership shall implement an employee retention plan
containing terms and provisions set forth on Exhibit A hereto. Buyer Parent
agrees that it shall cause Private Partnership Surviving Partnership to honor
the terms of such retention plan following the Closing and that it shall, or
shall cause Private Partnership Surviving Partnership to, make available the
funds that are necessary to make the payments under such retention plan.
4.04 FILINGS, OTHER ACTIONS; NOTIFICATION.
(a) Each of the Sellers and Buyer shall cooperate with each
other and shall cause their respective Subsidiaries to use their
respective reasonable best efforts to, and propose to the Sponsored
Investment Companies that they take or cause to be taken all actions,
and do or cause to be done all things necessary, proper or advisable on
its part under the Transaction Documents and Applicable Law to
consummate and make effective the Transactions as soon as practicable,
including preparing and filing as promptly as practicable all
documentation to effect all necessary notices, reports and other
filings and to obtain as promptly as practicable all consents,
registrations, approvals, permits and authorizations necessary or
advisable to be obtained from any third party and any Authority in
order to consummate the Transactions. Subject to Applicable Laws
relating to the exchange of information, Buyer Parent, Buyer, Private
Partnership, Public Partnership and General Partner shall, to the
extent practicable, consult the other on and
48
obtain consent with respect to all the information relating to Buyer
Parent, Buyer or the Sellers, as the case may be, and any of their
respective Subsidiaries that appear in any filing made with, or
written materials submitted to, any Authority or third party in
connection with the Transactions and the parties hereto shall
cooperate in such efforts. In exercising the foregoing right, Buyer
Parent, Buyer and the Sellers shall act reasonably and as promptly
as reasonably practicable.
(b) Buyer Parent, Buyer and each of the Sellers shall, upon
request by another Party, cooperate with and furnish to such Party all
information concerning itself, its Subsidiaries, general partners,
members, directors, officers and unitholders and such other matters as
may be reasonably necessary or advisable in connection with any
statement, filing, notice or application required to be made by or on
behalf of any of Buyer Parent, Buyer, the Sellers, or any of their
respective Subsidiaries to any Authority in connection with the
Transactions.
(c) To the extent that the rights of any Seller or any
Subsidiary thereof under any agreement, including any Advisory
Agreement, may not be assigned by operation of law or the terms of the
applicable agreement without the consent or approval of another party
thereto or terminates upon any such assignment, each of the Sellers
shall use its reasonable efforts to obtain, and to cause its
Subsidiaries, if any, to obtain, any such consent in accordance with
this Section 4.04(c) and Section 4.06. Without limiting the generality
of the foregoing, Private Partnership and each of General Partner and
Public Partnership, as general partners of Private Partnership, as
promptly as practicable shall (i) use, and use its reasonable best
efforts to cause each Registered Investment Company to use, its
reasonable best efforts to obtain, or cause to be obtained, the
approval of the Investment Company Boards and the shareholders of such
Registered Investment Company, pursuant to the provisions of Section 15
of the Investment Company Act applicable thereto, of a new Advisory
Agreement for such Registered Investment Company with the applicable
Subsidiary of Private Partnership serving as adviser or subadviser to
such Registered Investment Company, such agreement containing terms
(other than fee rates) that are not materially less favorable to such
Subsidiary than terms contained in the Advisory Agreement existing on
the date hereof and becoming effective upon the Closing, (ii) use its
reasonable best efforts to cause each Registered Investment Company to
prepare, file with and cause to be cleared by the SEC and all other
Authorities having jurisdiction thereover, as promptly as practicable
after the date hereof, all proxy solicitation materials required to be
distributed to shareholders of the Registered Investment Companies with
respect to the actions recommended for shareholder approval by the
Investment Company Boards and (iii) use its reasonable best efforts to
cause each Registered Investment Company to mail such proxy
solicitation materials to such shareholders promptly after clearance by
the SEC and cause to be submitted to a meeting of shareholders of such
Registered Investment Company as soon as practicable after such mailing
the proposals described in clause (ii) above, all such consents and
such proxy
49
solicitation, to be in form and substance reasonably
satisfactory to Buyer and in compliance with Section 3.03(o).
Each of (i) the proxy solicitation materials to be distributed to
the shareholders of each Registered Investment Company in connection
with the approvals described in Section 4.04 of this Agreement and
(ii) the materials provided or to be provided to the applicable
Investment Company Boards in connection with the approvals required
in connection with this Agreement have provided or will provide all
information necessary in order to make the disclosure of information
therein satisfy the requirements of all Applicable Law (including
Section 14 of the Exchange Act and Sections 15, 20 and 36(b) of the
Investment Company Act) in all material respects (except to the
extent that information supplied by or on behalf of Buyer Parent or
its Subsidiaries was incomplete) and such materials and information
(except to the extent supplied by or on behalf of Buyer Parent or
its Subsidiaries) will be complete in all material respects and will
not contain (at the time such materials or information are
distributed, filed or provided, as the case may be) any statement
which, at the time and in the light of the circumstances under which
it is made, is false or misleading in any material respect, and will
not omit to state any fact necessary in order to make the statements
therein not false or misleading in any material respect or (with
respect to information included in proxy statements) necessary to
correct any statement or any earlier communication with respect to
the solicitation of a proxy for the same meeting or subject matter
which has become false or misleading in any material respect.
4.05 INVESTMENT COMPANY MATTERS.
(a) Buyer Parent and the Buyer acknowledge that each of the
Sellers has entered into this Agreement in reliance upon the benefits
and protections provided by Section 15(f) of the Investment Company
Act. Each of Buyer Parent and the Buyer shall not take, and each of
them shall use reasonable best efforts to cause its Affiliates not to
take, any action not contemplated by this Agreement that would have the
effect, directly and indirectly, of causing the requirements of any of
the provisions of Section 15(f) of the Investment Company Act not to be
met in respect of this Agreement and the Transactions, and each of them
shall not fail to take, and, after the Closing, shall use reasonable
best efforts to cause each Affiliate of the Buyer Parent to not fail to
take, any action if the failure to take such action would have the
effect, directly or indirectly, of causing the requirements of any of
the provisions of Section 15(f) of the Investment Company Act not to be
met in respect of this Agreement and the Transactions. In that regard,
each of Buyer Parent and the Buyer shall conduct its business and
shall, subject to the applicable fiduciary duties to the Sponsored
Registered Investment Companies, use its reasonable best efforts to
cause each of its Affiliates to conduct its business so as to assure
that, insofar as within the control of Buyer Parent, the Buyer or their
respective Affiliates:
50
(i) for a period of three years after the Closing, at
least 75% of the members of the Investment Company Boards of
each Sponsored Registered Investment Company are not (A)
"interested persons" of the investment adviser of such
Sponsored Registered Investment Company after the Closing, or
(B) "interested persons" of the present investment manager of
such Sponsored Registered Investment Company; and
(ii) for a period of two years after the Closing,
there shall not be imposed on any Sponsored Registered
Investment Company an "unfair burden" as a result of the
Transactions, or any terms, conditions or understandings
applicable thereto;
PROVIDED, HOWEVER, that if Buyer Parent, Buyer or any of their
Affiliates shall have obtained an order from the SEC exempting it from
the provisions of Section 15(f), while still maintaining the "safe
harbor" provided by Section 15(f), then this covenant shall be deemed
to be modified to the extent necessary to permit Buyer Parent, Buyer
and their Affiliates to act in a manner consistent with such SEC
exemptive order.
(b) For a period of three years from the Closing, neither
Buyer Parent nor Buyer shall, and Buyer Parent and Buyer shall use
reasonable best efforts to cause their respective Affiliates not to,
voluntarily engage in any transaction that would constitute an
"assignment" of any Advisory Agreement with any Sponsored Registered
Investment Company currently managed by any Private Partnership or its
Subsidiaries to which Buyer Parent, the Buyer or any such Affiliate is
a party, without first obtaining a covenant in all material respects
the same as that contained in this Section 4.05. Notwithstanding
anything to the contrary contained herein, the covenants of the Parties
contained in this Section 4.05 are intended only for the benefit of the
Parties and holders of their respective Equity Interests immediately
prior to the Closing and for no other Person.
(c) The terms used in quotations in this Section 4.05 shall
have the meanings set forth in Sections 2(a)(4), 2(a)(19) and 15(f) of
the Investment Company Act.
4.06 ADVISORY AGREEMENTS. If consent to the assignment or
deemed assignment of an Advisory Agreement with Clients of Private
Partnership or its Subsidiaries (other than Clients that are Registered
Investment Companies) as a result of the Transactions is required by
Applicable Law or by such Clients' Advisory Agreement, as soon as
reasonably practicable following the date hereof, Private Partnership
shall, and shall cause each of its Subsidiaries to, send a notice (the
"NOTICE") informing such Clients of the Transactions, requesting
written consent to the assignment of such Client's Advisory Agreement
and informing such Client: (a) of the intention to complete the
Transactions, which will result in a deemed assignment of such Advisory
Agreement; (b) of Private Partnership's or its Subsidiaries' intention
to continue to provide the advisory services
51
pursuant to the existing Advisory Agreement with such Client after
the Closing; and (c) that the consent of such Client will be deemed
to have been granted if such client continues to accept such
advisory services for a period of at least forty-five (45) days
after the sending of the Notice without termination. Buyer agrees
that consent for any Advisory Agreement with a Client (other than
Clients that are Registered Investment Companies) to the assignment
or deemed assignment resulting from the Transactions shall be deemed
given for all purposes hereunder (i) if no consent is required under
Applicable Law or the respective Advisory Agreement, (ii) upon receipt
of the written consent requested in the Notice or (iii) if such consent
is required under Applicable Law or the respective Advisory Agreement,
and if the written consent requested in any Notice is not received
within forty-five (45) days of mailing the Notice to a Client, to the
extent permissible under Applicable Law and the applicable Advisory
Agreement (provided, that such Client shall not have affirmatively
stated to any of the Sellers or any of their Affiliates that it does
not so consent or terminated its respective Advisory Agreement prior to
the Closing) (the "NEGATIVE CONSENT PROCEDURE"). Buyer shall be
provided a reasonable opportunity to review all such consent materials
to be used by Private Partnership and such Subsidiaries prior to
distribution. Private Partnership and such Subsidiaries shall make
available to Buyer copies of any and all substantive correspondence
between them and Clients or representatives or counsel of such Clients
relating to the consent solicitation provided for in this Section 4.06.
Prior to the Private Partnership Effective Time, neither Buyer Parent,
nor Buyer, nor any of their respective Affiliates shall contact, in
writing or otherwise, any Client or any other Person who acts as an
adviser to or "gatekeeper" for any Client without the prior written
approval of General Partner.
4.07 TAXATION.
(a) From and after the Closing Date, all Tax examinations,
audits and contests relating to periods or partial periods ending prior
to or on the Closing Date relating to Private Partnership or any of its
Subsidiaries (other than the Corporate Subsidiaries) or Public
Partnership (such entities, the "ACQUIRED ENTITIES"), shall be
controlled by Seller Parent; PROVIDED, HOWEVER, that if any settlement
of any such examination, audit or contest would materially and
adversely impact a Tax return or Tax position of Buyer or any of its
Subsidiaries with respect to a period or partial period beginning on or
after the Closing Date, Seller Parent shall not enter into such
settlement without the consent of Buyer which shall not be unreasonably
withheld.
(b) Public Partnership and Private Partnership will prepare
and file, or cause to be prepared and filed, all Tax Returns that
include the business and operations of the Acquired Entities for any
period or partial period ending prior to or on the Closing Date,
subject to prior approval by Seller Parent.
52
(c) Each of the Acquired Entities (other than the Corporate
Subsidiaries and any Subsidiary of Private Partnership that is a
disregarded entity for United States federal income Tax purposes) shall
make an election, or, if an election has previously been made, continue
such election in effect, under Section 754 of the Code and any
comparable provision of any other Tax law for the year in which the
Closing occurs.
4.08 ACCESS; INFORMATION.
(a) Each of General Partner, Public Partnership and Private
Partnership agrees that upon reasonable notice and subject to
Applicable Laws relating to the exchange of information, it shall
afford or cause its Subsidiaries to afford Buyer Parent, Buyer and the
officers, employees, counsel, financial advisors, auditors, accountants
and other authorized representatives of Buyer Parent and Buyer
(collectively, the "BUYER REPRESENTATIVES"), such access throughout the
period prior to the Closing to the books, records (including, without
limitation, any Tax Returns and work papers of independent auditors),
offices, properties and personnel of such Person, its Subsidiaries and
any Sponsored Investment Company and to such other information as Buyer
may reasonably request and, during such period, it shall promptly
furnish or make available to Buyer Parent and Buyer and, at the request
of Buyer Parent or Buyer, to any Buyer Representatives (i) a copy of
each report, schedule and other document filed by it or its
Subsidiaries pursuant to the requirements of federal or state
securities laws, and (ii) all other financial and operating data and
other information concerning the business, properties, assets and
personnel of it and its Subsidiaries as Buyer Representative may
reasonably request. Promptly following the date hereof, General Partner
shall use its reasonable best efforts to provide its calculation of the
Base Revenue Run-Rate, together with supporting details, to Buyer
Parent.
(b) The provisions of the confidentiality agreement, dated as
of May 12, 2000, among Public Partnership, Private Partnership, Seller
Parent and Buyer Parent shall survive the execution of this Agreement
and shall apply with respect to all information made available to Buyer
Representatives pursuant to this Section 4.08.
4.09 PUBLICITY. The Parties hereby confirm that they have consented to
the initial press releases announcing the execution of this Agreement to be
released jointly by Public Partnership, Private Partnership and Buyer Parent and
separately by Seller Parent. No Party hereto will issue, and each Party will use
reasonable best efforts to cause its Affiliates not to issue, any additional
press release or otherwise make any additional public announcement with respect
to the Transactions without the prior consent of the other Parties, such consent
not to be unreasonably withheld or delayed, except as and to the extent that
such Party or any of its Affiliates determines in good faith that it is so
obligated by Applicable Law, in which case such Party shall consult, to the
extent practicable, with the other Parties prior to issuing such press release
or making such public announcement.
53
4.10 TAKEOVER STATUTES. If any Takeover Statute is or may become
applicable to any of the Transactions, each of the Sellers and their respective
boards of directors, general partners, managing members or managing boards, as
applicable, shall grant such approvals and take such actions as are necessary so
that such transactions may be consummated as promptly as practicable on the
terms contemplated by the Transaction Documents, and otherwise act to eliminate
or minimize the effects of such statute or regulation on such Transactions.
4.11 REASONABLE BEST EFFORTS. Subject to the terms and conditions of
this Agreement, each of the Sellers shall, and shall cause each of its
Subsidiaries, if any, to, and shall use its reasonable best efforts to cause
each of the Sponsored Investment Companies to, and each of Buyer Parent and
Buyer shall take, or cause to be taken, all actions, and shall do, or cause to
be done, all things necessary, proper or desirable, or advisable under
Applicable Laws, so as to fulfill all conditions and obligations on its part to
be performed or fulfilled under the Transaction Documents, to permit
consummation of the Transactions as promptly as practicable and otherwise to
enable consummation of the Transactions, and shall cooperate fully with each of
the other Parties to that end.
4.12 PRE-CLOSING DISTRIBUTIONS. Public Partnership and Private
Partnership shall distribute prior to the Closing the excess of (i) 80% of their
respective operating cash flow with respect to the period beginning January 1,
2000 and ending on the Closing Date over (ii) the amount of their operating cash
flow distributed between January 1, 2000 and the date of execution of this
Agreement.
4.13 EXPENSES. Each Party will bear all expenses incurred by it in
connection with this Agreement and the Transactions; PROVIDED, HOWEVER, that (i)
Buyer shall bear 50% of the expenses incurred by Private Partnership and its
Subsidiaries in connection with the solicitation of shareholders of Registered
Investment Companies contemplated by Section 4.04(c) and (ii) Public Partnership
and Buyer shall each bear 50% of the expenses incurred by Public Partnership in
connection with the solicitation of Public Partnership Unitholders, as
contemplated by Section 4.16.
4.14 SUBSIDIARY ACTION. To the extent that action on the part of a
Subsidiary of a Party is necessary in order for such Party to fulfill any of its
obligations under this Agreement, then each such obligation shall be deemed to
include an undertaking on the part of such Party to cause such Subsidiary to
take such necessary action.
4.15 UNITHOLDER APPROVAL. Each of the Sellers shall take, in accordance
with Applicable Law and each of their and Public Partnership's and Private
Partnership's Constituent Documents, all action necessary to:
(a) convene appropriate meetings of Public Partnership
Unitholders to consider and vote upon the approval and adoption of this
Agreement, the Public Partnership Merger, and any other matters
required to be approved by Public Partnership
54
Unitholders for consummation of the Public Partnership Merger
(including any adjournment or postponement thereof, the "PUBLIC
PARTNERSHIP UNITHOLDERS MEETING") as promptly as practicable after
the Proxy Statement is cleared by the SEC; and
(b) obtain written consents of Private Partnership
Unitholders to approve the adoption of this Agreement, the Private
Partnership Merger, and any other matters required to be approved by
Private Partnership Unitholders for consummation of the Private
Partnership Merger as promptly as practicable after the date hereof.
General Partner, as general partner of Public Partnership and of Private
Partnership, shall recommend (unless General Partner determines, in good faith
after consultation with outside legal counsel, that it must not make such
recommendation and/or must withdraw any prior recommendation in connection with
the Public Partnership Merger, if it is to comply with its fiduciary duties
under Applicable Law), and Public Partnership and Private Partnership shall take
all reasonable, lawful action to solicit, such approval by Public Partnership
Unitholders and by Private Partnership Unitholders.
4.16 PROXY STATEMENT. (a) Each of the Sellers shall cooperate with
Public Partnership to, and Public Partnership shall, prepare a proxy statement
to be filed by Public Partnership with the SEC in connection with the Public
Partnership Merger (including all other proxy solicitation materials of Public
Partnership, the "PROXY STATEMENT"). 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 Proxy Statement; and, promptly after
clearance by the SEC, Public Partnership shall mail the Proxy Statement to the
Public Partnership Unitholders.
(b) Each of the Parties agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied
by it for inclusion or incorporation by reference in the Proxy
Statement and any amendment or supplement thereto will, at the date of
mailing to Public Partnership Unitholders and at the time of the Public
Partnership Unitholders Meeting, contain any statement, which, at such
times and in the light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or which omits
to state any material fact necessary in order to make the statements
therein not false or misleading. Each of the Parties further agrees
that if it shall become aware prior to the Closing 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 Parties
and to take the necessary steps to amend or supplement the Proxy
Statement. All documents that Public Partnership is responsible for
filing with the SEC in connection with the Public Partnership Merger
will comply as to form and substance in all material aspects with the
applicable requirements of the Exchange Act.
55
(c) Buyer shall have the right to review in advance and to
approve all the information relating to Buyer and any of its Affiliates
proposed to appear in the Proxy Statement or any amendment or
supplement thereto submitted to the SEC in connection with the
Transactions contemplated by this Agreement. In exercising the
foregoing right, Buyer shall act reasonably and as promptly as
practicable.
4.17 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) Buyer agrees that from the Closing, and for a period of
six (6) years thereafter, Buyer shall continue the benefits of any
provision of any partnership, limited liability company or
indemnification agreement pursuant to which any Seller, its Affiliates
or any of their directors, officers, members, partners or other
controlling persons is or may be entitled to exculpation or
indemnification; and Buyer shall cause Public Partnership Surviving
Partnership and Private Partnership Surviving Partnership to honor any
such provision and to pay any amounts to which such Seller or any of
such other Persons would properly be entitled thereunder; PROVIDED,
HOWEVER, that Seller Parent, General Partner and any other Subsidiary
of Seller Parent (other than Public Partnership, Private Partnership
and their Subsidiaries) and the directors and officers of Seller Parent
and persons serving as directors or officers at the request of Seller
Parent as of the date hereof shall not be entitled to be exculpated or
indemnified pursuant to any such provision for claims, damages or costs
to the extent resulting from any fact or circumstance that, between the
date hereof and the Closing, constituted a breach by the Sellers of any
representations or warranties contained in this Agreement.
(b) Buyer acknowledges that Public Partnership Surviving
Partnership and Private Partnership Surviving Partnership intend to
maintain directors' and officers' liability insurance policy with a
financially sound carrier with terms, conditions, limits and deductions
(or retentions) at least as favorable as carried as of the date of this
Agreement for partners, members, managing members, directors and
officers of Private Partnership and Public Partnership and for
directors and officers of General Partner for claims arising from
wrongful acts prior to the Closing and Buyer agrees that, for a period
of six (6) years following the Closing, Buyer shall not take any
affirmative action which causes the termination or cancellation of such
insurance coverage unless Buyer shall replace such insurance coverage
with comparable insurance coverage; PROVIDED, HOWEVER, that Public
Partnership Surviving Partnership and Private Partnership Surviving
Partnership, considered in the aggregate, shall in no event be required
to expend pursuant to this Section 4.17(b) more than an amount per year
equal to 150% of the current premiums paid by Public Partnership and
Private Partnership (such premiums having been Previously Disclosed),
considered in the aggregate, for such insurance.
4.18 FINANCIAL OBLIGATIONS OF BUYER PARENT. CDC Finance agrees to cause
Buyer Parent and Buyer to fullfill all of its financial obligations under this
Agreement.
56
4.19 FURTHER ASSURANCES. As of and following the Closing, consistent
with the terms and conditions hereof, Buyer shall, and each of the Sellers shall
and shall cause each of their respective Subsidiaries to, and shall use
reasonable best efforts to cause its Affiliates (including for this purpose any
Sponsored Investment Company) to, promptly execute, acknowledge and deliver such
instruments, certificates and other documents and take such other action as a
Party may reasonably require in order to carry out any of the transactions
contemplated by the Transaction Documents or for a Party to obtain the benefits
contemplated by any of the Transaction Documents. Following the Closing Date,
the Parties shall cooperate with one another to prepare and file all documents
and forms and amendments thereto as may be required by Applicable Law with
respect to the Transactions.
ARTICLE V
CONDITIONS
5.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE TRANSACTIONS.
The respective obligation of each Party to effect the Transactions is subject to
the satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(a) GOVERNMENTAL AND REGULATORY CONSENTS. (i) The waiting
period (and any extension thereof) applicable to the consummation of
the Transactions under the HSR Act shall have expired or been
terminated and (ii) the Commission of the European Union shall have
approved the transaction contemplated by this Agreement under
Regulation (EEC) No. 4064/89 of the Council of the European Union.
(b) PARTNERSHIP UNITHOLDER APPROVAL. This Agreement and the
Transactions shall have been duly approved by the affirmative vote of
Public Partnership Unitholders and the affirmative vote or written
consent of Private Partnership Unitholders to the extent required by
Section 17-211 of the DE Partnership Law, other Applicable Laws and the
Constituent Documents of Public Partnership and Private Partnership.
(c) NO INJUNCTION. No court or other Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, law, ordinance, rule, regulation, judgment,
decree, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and restrains, enjoins or otherwise
prohibits consummation of the Transactions (collectively, an "ORDER").
5.02 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer and
Buyer Parent to effect the Transactions are also subject to the satisfaction, or
waiver by Buyer at or prior to the Closing, of the following conditions:
57
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each of the Sellers set forth in Section 3.03, shall
be true and correct as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (except
that representations and warranties that by their terms speak as of
the date of this Agreement or some other date shall be true and
correct as of such date) and Buyer shall have received a certificate
of an executive officer of General Partner to such effect; PROVIDED,
HOWEVER, that for purposes of this paragraph, such representations
and warranties (other than the representations set forth in Section
3.03(d)) shall be deemed to be true and correct unless the failure
or failures of such representations and warranties to be so true and
correct, either individually or in the aggregate, and without giving
effect to the standard set forth in Section 3.02 or to any
qualification as to materiality, Material Adverse Effect,
substantiality or other words of qualification set forth in such
representations or warranties, will have a Material Adverse Effect
on Private Partnership, Public Partnership and their Subsidiaries,
taken as a whole, or on Private Partnership Surviving Partnership,
Public Partnership Surviving Partnership and their Subsidiaries,
taken as a whole.
(b) PERFORMANCE OF OBLIGATIONS OF THE SELLERS. Each of the
Sellers shall have performed in all material respects the obligations
required to be performed by it under this Agreement and the other
Transaction Documents at or prior to the Closing, and Buyer shall have
received a certificate of an executive officer of General Partner to
such effect.
(c) COMPLIANCE WITH SECTION 15(f) OF THE INVESTMENT COMPANY
ACT. (i) At least seventy-five percent (75%) of the members of the
Investment Company Boards of each Sponsored Registered Investment
Company which has approved a new investment advisory contract shall not
be "interested persons" (as such term is defined in the Investment
Company Act) of that Subsidiary of Private Partnership Surviving
Partnership that will act as investment adviser to such Investment
Companies following the Closing, of Private Partnership or of any
Affiliate of Private Partnership that was the investment adviser of any
such Investment Company immediately preceding the Closing; and (ii) the
requirements of Section 15(f)(1)(B) of the Investment Company Act shall
have been complied with in that no "unfair burden" shall have been
imposed on any of the Sponsored Registered Investment Companies as a
result of this Agreement, the transactions contemplated hereunder, new
Investment Company Advisory Agreements or otherwise.
(d) CONTINUED EMPLOYMENT. At least 50% of the group Previously
Disclosed shall have entered into an employment agreement,
substantially in the form set forth on Schedule 5.02(d), with Buyer
that is in full force and effect; and Buyer shall not be aware of any
basis that would reasonably be expected to cause employment agreements
with fewer than 50% of such group to be in full force and effect.
58
(e) EMPLOYMENT AGREEMENTS. Other than due to the death or
disability of the employee party thereto, the employment agreements
attached as Schedule 5.02(e), between Buyer and the individuals
Previously Disclosed relating to the terms of employment of such
individuals by Buyer shall be in full force and effect and Buyer shall
not be aware of any basis that would reasonably be expected to cause
any of such agreements to no longer be in full force and effect.
(f) REVENUE RUN-RATE. The Closing Revenue Run-Rate shall not
be less than 80% of the Base Revenue Run-Rate.
(g) THIRD PARTY CONSENTS. The Sellers shall have received all
consents or approvals as may be necessary to be obtained from any third
party in connection with the consummation of the Transactions (other
than consents in respect of Advisory Agreements), unless the failure to
obtain such consents or approvals, individually or in the aggregate,
would not have a Material Adverse Effect on Public Partnership, Private
Partnership and their Subsidiaries taken as a whole.
5.03 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligation of the
Sellers to effect the Transactions is also subject to the satisfaction, or
waiver by General Partner at or prior to the Closing, of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer and Buyer Parent set forth in Section 3.04, subject
to the standard set forth in Section 3.02, shall be true and correct as
of the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date (except that representations and
warranties that by their terms speak as of the date of this Agreement
or some other date shall be true and correct as of such date) and
General Partner shall have received a certificate of an executive
officer of Buyer to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF BUYER. Each of Buyer, Buyer
Parent, Public Partnership Merger Sub and Private Partnership Merger
Sub shall have performed in all material respects the obligations
required to be performed by it under this Agreement and the Transaction
Documents at or prior to the Closing, and an officer of the General
Partner shall have received a certificate of an executive officer of
Buyer to such effect.
59
ARTICLE VI
TERMINATION
6.01 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the Transactions may be abandoned at any time prior to Closing by mutual
written consent of Buyer and General Partner.
6.02 TERMINATION BY EITHER BUYER OR THE SELLERS. This Agreement may be
terminated and the Transactions may be abandoned at any time prior to the
Closing by (i) Buyer or by (ii) General Partner if (a) the Transactions shall
not have been consummated by December 31, 2000 (the "TERMINATION DATE"), whether
such date is before or after the date of approval by the Public Partnership
Unitholders or the Private Partnership Unitholders, (b) any Order permanently
restraining, enjoining or otherwise prohibiting consummation of the Transaction
shall become final and non-appealable, or (c) this Agreement shall fail to
receive the requisite vote for adoption by the Public Partnership Unitholders at
the Public Partnership Unitholders Meeting or any adjournment or postponement
thereof or shall fail to receive the requisite written consents for adoption by
the Private Partnership Unitholders in accordance with the materials provided by
General Partner to the Private Partnership Unitholders for the purposes of
obtaining such written consent (or, if a meeting of the Private Partnership
Unitholders is held to obtain such consent, if this Agreement shall fail to
receive the requisite vote for adoption by the Private Partnership Unitholders
at such meeting of any adjournment or postponement thereof); PROVIDED that the
right to terminate this Agreement pursuant to clause (a) above shall not be
available to any Party that has breached in any material respect its obligations
under this Agreement in any manner that shall have proximately and substantially
contributed to the occurrence of the failure of the Transactions to be
consummated.
6.03 TERMINATION BY BUYER. This Agreement may be terminated by written
notice provided by Buyer and the Transactions may be abandoned at any time prior
to the Closing, whether before or after the approval by the Public Partnership
Unitholders or Private Partnership Unitholders referred to in Section 5.01(b),
if (i) General Partner shall have (A) failed to recommend or shall have
withdrawn or adversely modified its approval or recommendation of this
Agreement, (B) failed to reconfirm its recommendation of this Agreement or the
Public Partnership Merger within five business days after a written request by
Buyer to do so, (C) recommended to Public Partnership Unitholders or Private
Partnership Unitholders an Acquisition Proposal or (D) a tender offer or
exchange offer for 15% or more of the outstanding Public Partnership Units is
commenced, and the General Partnership fails to recommend against acceptance of
such tender offer or exchange offer by the Public Partnership Unitholders
(including by taking no position with respect to the acceptance of such tender
offer or exchange offer by the Public Partnership Unitholders) within the time
period required pursuant to Rule 14e-2 of the Exchange Act, or (ii) there has
been a breach by any Seller of any representation, warranty, covenant or
agreement contained in this Agreement that (x) would entitle Buyer to assert
that the conditions to its obligations hereunder set forth in Section 5.02(a) or
(b) have not
60
been satisfied and (y) is not curable or, if curable, is not cured
within 30 days after written notice of such breach is given by Buyer to the
Party committing such breach.
6.04 TERMINATION BY GENERAL PARTNER. This Agreement may be terminated
by the written consent of General Partner and the Transactions may be abandoned:
(a) at any time prior to the approval of the Private
Partnership Unitholders if (i) after receiving a BONA FIDE Superior
Proposal, the board of directors of General Partner determines, in
good faith and after consulting with outside legal counsel, that
taking such action is required to comply with its fiduciary duties
under Applicable Law, (ii) the board of directors of General Partner
notifies Buyer Parent and Buyer in writing that it intends to enter
into such an agreement, attaching the most current version of such
agreement to such notice, (iii) Buyer does not make, within five
business days of receipt of the General Partner's written
notification of its intention, an offer that the board of directors
of General Partner determines, in good faith after consultation with
its advisors, is at least as favorable, from a financial point of
view, to the members, partners or unitholders, as the case may be,
as the Superior Proposal and (iv) simultaneously with such
termination such Seller pays or causes Private Partnership to pay to
Buyer in immediately available funds the Termination Fee described
in Section 6.06; or
(b) if at any time prior to the Closing there has been a
breach by Buyer of any covenant, representation, warranty or agreement
contained in this Agreement that (x) would entitle General Partner to
assert that the conditions to its obligations hereunder set forth in
Section 5.03(a) or (b) have not been satisfied and (y) is not curable
or, if curable, is not cured within thirty (30) days after written
notice of such breach is given by the General Partner.
6.05 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination
of this Agreement and the abandonment of the Transactions pursuant to this
Article VI, this Agreement (other than as set forth in Sections 6.06 and 7.01)
shall become void and of no effect with no liability on the part of any Party
(or of any of its directors, officers, controlling persons, employees, agents,
legal and financial advisors or other representatives); PROVIDED, HOWEVER,
except as otherwise provided herein, no such termination shall relieve any Party
of any liability or damages resulting from any wilful breach of this Agreement.
6.06 TERMINATION FEE.
(a) Upon the occurrence of a Fee Triggering Event, Private
Partnership agrees to pay Buyer, and Buyer shall be entitled to payment
of, a fee of $66.5 million (the "TERMINATION FEE"). Except as provided
in Section 6.04(a). Such payment shall be made to Buyer in immediately
available funds within three business days after the occurrence of the
Fee Triggering Event.
61
(b) The term "FEE TRIGGERING EVENT" shall mean any of the
following events or transactions occurring on or after the date hereof:
(i) this Agreement is terminated by the General
Partner pursuant to Section 6.04(a); or
(ii) this Agreement is terminated by Buyer
pursuant to Section 6.02(c) or 6.03(i) and, within 12
months after such termination, a Seller either (A) enters
into a binding agreement with any Person providing for a
transaction implementing an Acquisition Proposal or (B)
consummates an Acquisition Proposal.
(c) General Partner shall notify Buyer promptly in writing of
the occurrence of any Fee Triggering Event.
(d) The payment by the Public Partnership or Private
Partnership of the Termination Fee required to be made by this Section
6.06 shall constitute liquidated damages for any breach by any of the
Sellers (other than a willful breach by any of the Sellers) of this
Agreement although a breach is not necessary for any payment to be
required to be made under this Section 6.06.
(e) Each of the Sellers acknowledges that the agreements
contained in this Section 6.06 are an integral part of the Transactions
and that, without these agreements, neither Buyer nor any of its
Subsidiaries would have entered into this Agreement or any of the other
Transaction Documents; accordingly, if Private Partnership fails to
promptly pay the amount due pursuant to this Section 6.06, and, in
order to obtain such payment, Buyer or any of its Subsidiaries
commences a suit which results in a judgment against the Sellers for
the Termination Fee, the Private Partnership shall pay to Buyer its
reasonable costs and expenses (including reasonable attorneys' fees) in
connection with such suit, together with interest on the amount of the
Termination Fee at the prime rate of Citibank N.A. in effect on the
date such payment was required to be made.
ARTICLE VII
MISCELLANEOUS AND GENERAL
7.01 SURVIVAL. Each of the covenants of the Sellers and Buyer set forth
in Sections 4.03, 4.05, 4.07, 4.08(b), 4.13, 4.14 (but only with respect to
actions to be taken after Closing), 4.17 and 4.18 (but only with respect to
actions to be taken after Closing) shall survive the consummation of the
Transactions until the satisfaction of such covenants in accordance with each of
their terms. Each of the representations and warranties of the Sellers and Buyer
set forth in Sections 3.03 and 3.04, respectively, shall survive only until the
Closing. Sections 3.03(n),
62
3.04(e), 4.09, 4.13, 6.05, 6.06, 7.01, 7.03, 7.04, 7.05, 7.06, 7.08 and 7.10
shall survive the termination of this Agreement. All other covenants and
agreements in this Agreement shall not survive the termination of this
Agreement.
7.02 WAIVER; AMENDMENT. Prior to the Closing, any provision of this
Agreement may be (i) waived by the Party benefitted by the provision, (ii)
amended or modified at any time, by an agreement in writing among the Parties
executed in the same manner as this Agreement or (iii) amended or modified by
an agreement in writing among Buyer Parent, Buyer, General Partner, Public
Partnership and Private Partnership and executed in the same manner as this
Agreement, provided, that no such amendment or modification pursuant to
clause (iii) shall (A) in the case of any such amendment or modification
proposed after the Public Partnership Unitholders shall have approved this
Agreement and the Public Partnership Merger at the Public Partnership
Unitholders Meeting, alter or change the amount or kind of consideration to
be received by Public Partnership Unitholders and holders of Private
Partnership Units pursuant to this Agreement without such Party's consent,
(B) reasonably be expected to materially impede or delay the consummation of
any of the Transactions or (C) constitute a waiver of any provision of this
Agreement other than in accordance with clause (i) of this Section 7.02.
7.03 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
(a) This Agreement shall be deemed to be made in and in all
respects shall be interpreted, construed and governed by and in
accordance with the law of the State of New York applicable to
contracts made and to be performed entirely within such state (except
to the extent mandatory provisions of U.S. federal law or the DE
Partnership Law are applicable).
(b) Each Party (i) consents to submit itself to the personal
jurisdiction of any federal court or New York State court located in
the State and City of New York in the event any dispute arises out of
or relates to the Transaction Documents or any of the Transactions,
(ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court,
including, without limitation, a motion to dismiss on the grounds of
forum non conveniens and (iii) agrees that it will not bring any action
arising out of or relating to the Transaction Documents or any of the
Transactions in any court other than a federal court or New York State
court sitting in the State and City of New York.
(c) Each Party acknowledges and agrees that any controversy
which may arise under the Transaction Documents or the Transaction is
likely to involve complicated and difficult issues, and therefore each
such 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 the Transaction Documents
or the Transactions. Each Party certifies and acknowledges that (i) no
representative, agent or attorney of any other Party has represented,
expressly or otherwise, that such other Party would not,
63
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 the Transaction
Documents to which it is a Party by, among other things, the mutual
waivers and certifications in this Section 7.03.
7.04 WAIVER OF SOVEREIGN IMMUNITY. To the extent that Buyer Parent,
Buyer, Public Partnership Surviving Partnership or Private Partnership
Surviving Partnership has any sovereign immunity under the laws of France or
any other country or in accordance with any international treaty to which the
French Republic is a signatory or from which France is a non-signatory
beneficiary, each of Buyer Parent, Buyer, Public Partnership Surviving
Partnership or Private Partnership Surviving Partnership hereby waives the
defense of sovereign immunity for all purposes, including, without
limitation, defenses with respect to the commencement of litigation, court
proceedings relating thereto, any pre- or post-award attachment, any pre- or
post judgment attachment, or execution of any award or judgment.
7.05 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any Party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, by
nationally recognized overnight courier, or by facsimile:
IF TO CDC FINANCE:
CDC Finance
56 Rue de Lille
Paris 75007 FRANCE
Attention: Isabelle Bouillot
Facsimile: 33-1-40-49-7439
Telephone: 33-1-40-49-5450
WITH A COPY TO:
Adam D. Chinn, Esq.
Wachtell, Lipton, Rosen and Katz
51 W. 52nd Street
New York, New York 10019
Facsimile: (212) 403-2000
Telephone: (212) 403-1000
IF TO BUYER, BUYER PARENT, PUBLIC PARTNERSHIP
MERGER SUB OR PRIVATE PARTNERSHIP MERGER SUB:
CDC Asset Management
Immeuble Atlantique Montparnasse
64
7 Place des Cinq Martyrs du Lycee Buffon
BP 541, 75725 Paris Cedex 15 FRANCE
Attention: Louise Laidi
Facsimile: 33-1-42-79-5320
Telephone: 33-1-42-79-5617
WITH A COPY TO:
Adam D. Chinn, Esq.
Wachtell, Lipton, Rosen and Katz
51 W. 52nd Street
New York, New York 10019
Facsimile: (212) 403-2000
Telephone: (212) 403-1000
IF TO PRIVATE PARTNERSHIP OR PUBLIC PARTNERSHIP:
Nvest, L.P.
399 Boylston Street
Boston, Massachusetts 02116
Attention: Jeffrey D. Plunkett
Facsimile: (617) 578-1082
Telephone: (617) 578-1925
WITH A COPY TO:
Ralph Arditi, Esq.
Skadden, Arps, Slate, Meagher
& Flom LLP
Four Times Square
New York, New York 10036
Facsimile: (212) 735-2000
Telephone: (212) 735-3000
IF TO GENERAL PARTNER PRIOR TO CLOSING:
Nvest Corporation
399 Boylston Street
Boston, Massachusetts 02116
Attention: Jeffrey D. Plunkett
Facsimile: (617) 578-1082
Telephone: (617) 578-1925
65
WITH A COPY TO:
Ralph Arditi, Esq.
Skadden, Arps, Slate, Meagher
& Flom LLP
Four Times Square
New York, New York 10036
Facsimile: (212) 735-2000
Telephone: (212) 735-3000
IF TO GENERAL PARTNER AFTER THE CLOSING:
c/o Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attention: Gary Beller
Facsimile: (212) 679-4523
Telephone: (212) 578-5899
WITH A COPY TO:
Ralph Arditi, Esq.
Skadden, Arps, Slate, Meagher
& Flom LLP
Four Times Square
New York, New York 10036
Facsimile: (212) 735-2000
Telephone: (212) 735-3000
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
7.06 ENTIRE UNDERSTANDING; THIRD PARTY BENEFICIARIES. This Agreement
and each of the other Transaction Documents represent the entire understanding
of the Parties with reference to the Transactions and supersede any and all
other oral or written agreements heretofore made. 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. Seller Parent shall be a
third-party beneficiary with respect to Sections 4.07 and 4.09 of this
Agreement.
7.07 OBLIGATIONS OF BUYER. Whenever this Agreement requires a
Subsidiary of Buyer Parent to take any action, such requirement shall be deemed
to include an undertaking on the part of Buyer Parent to cause such Subsidiary
to take such action.
66
7.08 TRANSFER TAXES. All transfer (including real estate transfer),
transfer gains, documentary, sales, use, stamp, registration and other such
Taxes (including penalties and interest) incurred in connection with the
Transactions, other than such Taxes that are the primary obligation of the
partners of Public Partnership or Private Partnership under Applicable Law,
shall be paid by Buyer when due.
7.09 INTERPRETATION. The table of contents and headings herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated.
7.10 ASSIGNMENT. This Agreement shall not be assignable by operation of
law or otherwise, except with the consent of all of the Parties.
7.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
7.12 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
67
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date set forth above.
CDC FINANCE
By: /s/ Isabelle Bouillot
---------------------------------------------
Name: Isabelle Bouillot
Title: Chief Executive Officer
CDC ASSET MANAGEMENT
By: /s/ Daniel Roy
---------------------------------------------
Name: Daniel Roy
Title: President du Directoire
CDCAM NORTH AMERICA CORPORATION
By: /s/ Christian Fersing
---------------------------------------------
Name: Christian Fersing
Title: Chief Executive Officer
CDCAM PARTNERSHIP, L.P.
By: CDCAM North America, LLC, its general partner
By: /s/ Mireille Chetioui
-----------------------------------------
Name: Mireille Chetioui
Title: Vice President
CDCAM PARTNERSHIP II, L.P.
By: CDCAM North America, LLC, its general partner
By: /s/ Louise Laidi
-----------------------------------------
Name: Louise Laidi
Title: Vice President
68
NVEST CORPORATION
By: /s/ Peter S. Voss
---------------------------------------------
Name: Peter S. Voss
Title: Chairman and Chief Executive Officer
NVEST, L.P.
By: Nvest Corporation, its general partner
By: /s/ Peter S. Voss
---------------------------------------------
Name: Peter S. Voss
Title: Chairman and Chief Executive Officer
NVEST COMPANIES, L.P.
By: Nvest Corporation, its managing general
partner
By: /s/ Peter S. Voss
---------------------------------------------
Name: Peter S. Voss
Title: Chairman and Chief Executive Officer
69