EXHIBIT 2.1
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STOCK PURCHASE AGREEMENT
by and among
OLD MUTUAL (US) HOLDINGS INC.,
NWQ INVESTMENT MANAGEMENT COMPANY, INC.
and
THE ▇▇▇▇ NUVEEN COMPANY
dated as of May 28, 2002
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TABLE OF CONTENTS
Page
ARTICLE I
THE TRANSACTION
Section 1.1. General......................................................................................13
Section 1.2. Closing......................................................................................13
Section 1.3. Instruments of Transfer; Payment of Purchase Consideration...................................13
Section 1.4. Post-Closing Working Capital Adjustment......................................................14
Section 1.5. Revenue Run-Rate Adjustment..................................................................15
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE OLD MUTUAL PARTIES ABOUT THE COMPANY
Section 2.1. Organization and Related Matters.............................................................17
Section 2.2. No Subsidiaries..............................................................................17
Section 2.3. Authority; No Violation......................................................................17
Section 2.4. Consents and Approvals.......................................................................18
Section 2.5. Authorized Capitalization; Ownership of Shares...............................................18
Section 2.6. Regulatory Documents.........................................................................19
Section 2.7. Financial Statements; Absence of Liabilities.................................................20
Section 2.8. Ineligible Persons...........................................................................20
Section 2.9. Contracts....................................................................................21
Section 2.10. Funds and Clients............................................................................21
Section 2.11. Investment Company Advisory Agreements; Non-Investment Company Advisory Agreements...........23
Section 2.12. No Broker....................................................................................23
Section 2.13. Legal Proceedings............................................................................23
Section 2.14. Compliance with Applicable Law...............................................................23
Section 2.15. Insurance....................................................................................24
Section 2.16. Employee Benefit Plans; ERISA................................................................25
Section 2.17. Technology and Intellectual Property.........................................................26
Section 2.18. Ownership and Use of Properties and Assets...................................................27
Section 2.19. Filing Documents.............................................................................27
Section 2.20. Environmental Matters........................................................................28
Section 2.21. Transactions with Affiliates.................................................................28
Section 2.22. No Broker/Dealer Operations..................................................................28
Section 2.23. Absence of Certain Changes...................................................................28
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Section 3.1. Ownership of Shares..........................................................................29
Section 3.2. Corporate Existence and Power................................................................29
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Section 3.3. Authority; No Violation......................................................................29
Section 3.4. Consents and Approvals.......................................................................30
Section 3.5. No Broker....................................................................................30
Section 3.6. Legal Proceedings............................................................................30
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 4.1. Organization and Related Matters.............................................................30
Section 4.2. Authority; No Violation......................................................................31
Section 4.3. Consents and Approvals.......................................................................31
Section 4.4. Legal Proceedings............................................................................32
Section 4.5. No Other Broker..............................................................................32
Section 4.6. Section 15 of the Investment Company Act.....................................................32
Section 4.7. Investment Purpose...........................................................................32
Section 4.8. Cash Consideration...........................................................................32
ARTICLE V
COVENANTS
Section 5.1. Conduct of Business by the Company...........................................................32
Section 5.2. Section 15 of the Investment Company Act: Company Covenants.................................35
Section 5.3. Non-Investment Company Advisory Agreement Consents...........................................36
Section 5.4. Insurance....................................................................................36
Section 5.5. Section 15 of the Investment Company Act: Buyer's Covenants.................................36
Section 5.6. Employees, Employee Benefits.................................................................37
Section 5.7. Further Assurances...........................................................................38
Section 5.8. Efforts of Parties to Close..................................................................38
Section 5.9. Confidentiality and Announcements............................................................38
Section 5.10. Access; Certain Communications...............................................................39
Section 5.11. Regulatory Matters; Third Party Consents.....................................................40
Section 5.12. Notification of Certain Matters..............................................................41
Section 5.13. Expenses.....................................................................................41
Section 5.14. Third Party Proposals........................................................................41
Section 5.15. Employee Payments............................................................................42
Section 5.16. Information in Proxy Materials of PBF; Filing Documents......................................43
Section 5.17. Non-Solicitation.............................................................................43
Section 5.18. Use of NWQ Name..............................................................................44
Section 5.19. Pilgrim ▇▇▇▇▇▇ Fund..........................................................................44
Section 5.20. Delivery of Closing Revenue Run-Rate Schedule................................................46
Section 5.21. Permitted Distributions; Payment of Intercompany Balances....................................46
Section 5.22. Termination of Revenue Sharing Termination Agreement.........................................47
Section 5.23. [Intentionally Omitted]......................................................................47
Section 5.24. Pre-Closing Transfer of Shares...............................................................47
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ARTICLE VI
CONDITIONS TO THE CONSUMMATION
OF THE TRANSACTION
Section 6.1. Mutual Conditions............................................................................47
Section 6.2. Conditions to Buyer's Obligations............................................................48
Section 6.3. Conditions to the Obligations of the Old Mutual Parties......................................49
ARTICLE VII
TERMINATION
Section 7.1. Termination..................................................................................49
Section 7.2. Survival after Termination...................................................................50
ARTICLE VIII
TAX MATTERS
Section 8.1. Tax Representations..........................................................................51
Section 8.2. Section 338(h)(10) Election..................................................................52
Section 8.3. Tax Indemnification..........................................................................53
Section 8.4. Filing of Tax Returns........................................................................54
Section 8.5. Tax Refunds..................................................................................54
Section 8.6. Assistance and Cooperation...................................................................54
Section 8.7. Contests.....................................................................................55
Section 8.8. Tax Sharing Agreements.......................................................................56
Section 8.9. Coordination; Survival.......................................................................56
Section 8.10. Transfer Taxes...............................................................................56
ARTICLE IX
INDEMNIFICATION
Section 9.1. Indemnification by Holdings..................................................................57
Section 9.2. Indemnification by Buyer.....................................................................57
Section 9.3. Calculation and Payment of Losses............................................................58
Section 9.4. Termination of Indemnification...............................................................58
Section 9.5. Procedures...................................................................................59
Section 9.6. Exclusive Remedy.............................................................................60
Section 9.7. Enforcement..................................................................................61
ARTICLE X
MISCELLANEOUS
Section 10.1. Amendments; Waiver...........................................................................61
Section 10.2. Entire Agreement.............................................................................61
Section 10.3. Survival of Representations, Warranties and Covenants........................................61
Section 10.4. No Other Representations and Warranties......................................................62
Section 10.5. Interpretation...............................................................................62
Section 10.6. Severability.................................................................................62
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Section 10.7. Notices......................................................................................63
Section 10.8. Binding Effect; Persons Benefiting; No Assignment............................................63
Section 10.9. Counterparts.................................................................................64
Section 10.10. Waiver of Jury Trial.........................................................................64
Section 10.11. Governing Law................................................................................64
Section 10.12. Consent to Jurisdiction......................................................................64
Exhibit 1 - Knowledge of Buyer
Exhibit 1.1 - Knowledge of Old Mutual Parties
Exhibit 1.2 - Wrap Account Programs
Exhibit 2.7 - Financial Statements
Exhibit 5.15(a) - Calculation of Accrued Bonus Pool Amount
Exhibit 5.15(b) - Employee Payments
Exhibit 5.17(a) - Broad Group Employees
Exhibit 5.17(b) - Core Group Employees
Exhibit 6.2(iv) - Closing Date Employees
Exhibit 9.2(a) - Specified Liabilities
Exhibit A-1 - Individuals Entering into Employment Agreements
Exhibit A-2 -Individuals Executing Releases
Exhibit B - Form of Opinion of Holdings' Counsel
Exhibit C - Form of Opinion of Buyer's Counsel
Annex A - Certain Shared Liabilities
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of May 28, 2002 (this "Agreement"), by
and among OLD MUTUAL (US) HOLDINGS INC., a Delaware corporation ("Holdings"),
NWQ INVESTMENT MANAGEMENT COMPANY, INC., a Massachusetts corporation (the
"Company" and, together with Holdings, the "Old Mutual Parties" and each an "Old
Mutual Party"), and THE ▇▇▇▇ NUVEEN COMPANY, a Delaware corporation ("Buyer").
WHEREAS, pursuant to the terms and subject to the conditions of this
Agreement, Buyer wishes to acquire all of the Shares (as defined herein); and
WHEREAS, pursuant to the terms and subject to the conditions of this
Agreement, Holdings as the sole member of Old Mutual Asset Managers (US) LLC, a
Delaware limited liability company ("OMAM"), the sole stockholder of the
Company, wishes to sell all of the Shares to Buyer; and
WHEREAS, Buyer and certain key employees of the Company desire to form
Investment Management Acquisition Company, LLC a newly formed Delaware limited
liability company to operate the business from and after the Closing (the
"LLC");
WHEREAS, the Persons listed on Exhibit A-1 hereto each have entered into an
employment agreement with Buyer and the LLC dated as of the date hereof (the
"Employment Agreements") to be effective as of the Closing and the persons set
forth on Exhibit A-2, have each entered into a release in favor of Holdings,
OMAM and the Company (the "Employee Releases") to be effective as of the
Closing; and
WHEREAS, simultaneous with the execution of this Agreement, Buyer and
Holdings have entered into a Strategic Alliance Agreement, pursuant to which
Buyer may enter into advisory and/or sub-advisory relationships with affiliates
(as defined in such Strategic Alliance Agreement) of Holdings; and
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, subject to the conditions and other terms
herein set forth the parties hereto hereby agree as follows:
Definitions: For all purposes of this Agreement, the following terms shall
have the respective meanings set forth under this "Definitions" heading (such
definitions to be equally applicable to both the singular and plural forms of
the terms herein defined):
"Acquisition Proposal" shall have the meaning set forth in Section 5.14.
"Adjusted Assets Under Management" shall mean, for any account of any
Client or Fund, as of a particular date, the amount of assets under management
by the Company in that account as of the Base Date, as adjusted, in the case of
the Closing Wrap Account Revenue Run-Rate and the Closing Other Account Revenue
Run-Rate, (i) to reflect net cash flows (additions, withdrawals, written notices
of withdrawal, written commitments to invest, and reinvestments
but excluding, with respect to Wrap Account Programs only, any fee withdrawals
and any individual cash flows of less than $500 that are not reflected in the
net flow data), new accounts and terminated accounts from and after the Base
Date, (ii) to exclude any increase or decrease in assets under management due to
market appreciation or depreciation and any currency fluctuations from and after
the Base Date and (iii) to exclude, as of the Base Date, $95,272,551 of assets
under management with respect to the NWQ Value Equity Portfolio of the
Aegon/Transamerica Series Fund, Inc. that were sub-advised by the Company as of
the Base Date but that subsequently became sub-advised by Pilgrim ▇▇▇▇▇▇ &
Associates Ltd. under a sub-advisory agreement between Pilgrim ▇▇▇▇▇▇ &
Associates Ltd. and Aegon/Transamerica Series Fund, Inc., dated as of May 1,
2002 ("Transferred Assets").
"Adjusted Run-Rate Ratio" shall have the meaning set forth in Section
1.5(c).
"Adjustment Amount" shall mean the Working Capital Amount as of the Closing
(i) less $2.4 million and (ii) plus the aggregate amount of payments made by the
Company pursuant to Section 5.15(b), determined in accordance with Section 1.4,
the definition of Working Capital Amount and the Adjustment Amount Balance
Sheet.
"Adjustment Amount Balance Sheet" shall mean the unaudited balance sheet of
the Company as of the Closing Date, prepared in accordance with GAAP.
"Adjustment Amount Documents" shall have the meaning set forth in Section
1.4(a).
"Adjustment Threshold" shall have the meaning set forth in Section 1.5(c).
"Advisers Act" shall mean the Investment Advisers Act of 1940, as amended,
and the rules and regulations of the SEC thereunder.
"Affiliate" shall mean any individual, partnership, corporation, entity or
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the Person specified.
For purposes of this Agreement, (i) each of Holdings and OMAM (but no other
direct or indirect Subsidiaries or parents of Holdings or OMAM) shall be deemed
Affiliates of the Company, and vice versa, prior to the Closing, (ii) Buyer
shall be deemed an Affiliate of the Company, and vice versa, after the Closing
and (iii) none of the Funds or any Person in which a Fund holds an ownership
interest shall be deemed an Affiliate of the Company, Buyer or Holdings.
"African Exchanges" shall mean the Johannesburg Securities Exchange and the
Malawi, Namibian and Zimbabwe Stock Exchanges.
"Agreement" has the meaning set forth in the preamble hereto.
"Allocation Report" shall have the meaning set forth in Section 8.2(b).
"Applicable Law" shall mean any domestic or foreign federal, state or local
statute, law (whether statutory or common law), ordinance, rule, administrative
interpretation, regulation, order, writ, injunction, directive, judgment,
decree, policy, guideline or other
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requirement (including those of the NASD, NYSE, London Stock Exchange or any
other self-regulatory organization) applicable to any Old Mutual Party, any
Fund, any Client or Buyer, or any of their respective Affiliates, stockholders,
properties, assets, officers, directors, employees or agents, as the case may
be.
"Base Blended Revenue Run-Rate" shall mean the sum of (i) the Base Wrap
Account Revenue Run-Rate plus (ii) the Base Other Account Revenue Run-Rate.
"Base Date" shall mean March 28, 2002.
"Base Other Account Revenue Run-Rate" shall mean $20,982,994, which
constitutes the Other Account Revenue Run-Rate as of the Base Date, and which
was calculated in accordance with the definition of Other Account Revenue
Run-Rate.
"Base Wrap Account Revenue Run-Rate" shall mean $14,079,230, which
constitutes the Wrap Account Revenue Run-Rate as of the Base Date, and which was
calculated in accordance with the definition of Wrap Account Revenue Run-Rate.
"Business Day" shall mean any day that the NYSE is normally open for
trading and that is not a Saturday, a Sunday or a day on which banks in the
Cities of Chicago, Los Angeles or Boston are authorized or required to close for
regular banking business.
"Buyer" has the meaning set forth in the preamble hereto.
"Buyer Disclosure Schedule" shall have the meaning set forth in the
introduction to Article IV.
"Buyer Indemnitees" shall have the meaning set forth in Section 9.1(a).
"Buyer Indemnity Cap" shall mean $40,000,000.
"Buyer Indemnity Limitation Exception" shall have the meaning set forth in
Section 9.3(b).
"Buyer Qualified Plan" shall have the meaning set forth in Section 5.6(a).
"Canada Advisory Agreements" shall mean the Portfolio Management Agreement,
dated as of September 17, 2001, between Integra Capital Corporation and the
Company and the Portfolio Management Agreement, dated as of October 1, 2001,
between Integra Capital Corporation and the Company.
"Centralized Entity" shall mean any Holdings Controlled Affiliate
established to, or which does, provide centralized services in the United States
to one or more other Holdings Controlled Affiliates.
"Client" shall mean a Person who has an Investment Advisory Account with
the Company.
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"Closing" shall have the meaning set forth in Section 1.2.
"Closing Blended Ratio" shall mean a ratio, the numerator of which is the
Closing Blended Revenue Run-Rate, and the denominator of which is the Base
Blended Revenue Run-Rate.
"Closing Blended Revenue Run-Rate" shall mean the sum of (i) the Closing
Wrap Account Revenue Run-Rate plus (ii) the Closing Other Account Revenue
Run-Rate.
"Closing Date" shall have the meaning set forth in Section 1.2.
"Closing Other Account Revenue Run-Rate" shall mean the Other Account
Revenue Run-Rate as of the fifth Business Day prior to the Closing Date.
"Closing Wrap Account Revenue Run-Rate" shall mean the Wrap Account Revenue
Run-Rate as of the fifth Business Day prior to the Closing Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall have the meaning set forth in the preamble hereto.
"Company Balance Sheet" shall have the meaning set forth in Section 2.7.
"Company Charter" shall mean the articles of organization of the Company,
as in effect as of the date hereof.
"Company Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company.
"Company Disclosure Schedule" shall have the meaning set forth in the
introduction to Article II.
"Company Employees" shall have the meaning set forth in Section 5.6(a).
"Company Financial Statements" shall have the meaning set forth in Section
2.7.
"Company Material Adverse Effect" shall mean a material adverse effect on
the business, assets, liabilities, financial condition or results of operations
of the Company or on the ability of any of the Old Mutual Parties to timely
complete the transactions contemplated hereby or timely perform their respective
obligations hereunder, other than any change, effect, event or occurrence to the
extent resulting from (i) the announcement of the execution of this Agreement or
the pendency of the Transaction, including the Company's loss of employees or
Clients to the extent resulting therefrom, (ii) the declaration and payment of
any dividend or distribution by the Company in accordance with Section 5.21 of
this Agreement, (iii) the United States economy in general or (iv) changes in
legal or regulatory conditions to the extent generally affecting the investment
advisory and asset management industry, which, in the case of clauses (iii) and
(iv), does not affect the Company to a materially greater extent than such
change, effect, event or occurrence affects other Persons in the industry in
which the Company competes; provided that a
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reduction in the Other Account Revenue Run-Rate or the Wrap Account Revenue
Run-Rate between the Base Date and the Closing Date in and of itself shall not
constitute a Company Material Adverse Effect.
"Company Plan" has the meaning set forth in Section 2.16(a).
"Company's Accountant" shall mean KPMG, LLP.
"Computer Software" shall have the meaning set forth in Section 2.17.
"Confidentiality Agreement" shall mean that certain letter agreement with
an effective date of March 24, 2002 between Holdings and Buyer.
"Consent Period" shall have the meaning set forth in Section 1.5(c).
"Contracts" shall have the meaning set forth in Section 2.9.
"Controlled Group Liability" means any and all liabilities (i) under Title
IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and 4971
of the Code, (iv) 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 (v) under corresponding or similar provisions of foreign laws or
regulations, other than such liabilities that arise solely out of, or relate
solely to, the Company Plans listed in Section 2.16(a) of the Company Disclosure
Schedule.
"Controlling Party" shall have the meaning set forth in Section 8.7(c).
"Disagreement" shall have the meaning set forth in Section 1.4(b).
"Elections" shall have the meaning set forth in Section 8.2(a).
"Employee Releases" shall have the meaning set forth in the recitals
hereto.
"Employment Agreements" shall have the meaning set forth in the recitals
hereto.
"Encumbrance" shall mean any lien, pledge, mortgage, security interest,
claim, charge, easement, limitation, commitment, encroachment, restriction
(other than any restriction on transferability imposed by federal or state
securities laws) or other encumbrance of any kind or nature whatsoever (whether
absolute or contingent).
"Environmental Law" means 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 Authority, relating
to (i) 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 (ii) the exposure
to, or the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production, release or disposal of Hazardous
Substances, in each case as amended and as now in effect.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules, regulations and class exemptions of the Department of
Labor thereunder.
"ERISA Client" shall have the meaning set forth in Section 2.10(c)(iii).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC thereunder.
"Excluded Taxes" means (i) any Taxes of the Company for any Pre-Closing
Period, (ii) any Taxes of Parent, Holdings, OMAM or any of their Affiliates
(other than the Company) for which the Company may be liable under Section
1.1502-6 of the Treasury Regulations (or any similar provision of state, local
or foreign Tax law) and (iii) any Taxes described in Section 8.10 for which
Holdings is responsible pursuant to such Section 8.10. For purposes of this
Agreement, in the case of any taxable year or period beginning before and ending
after the Closing Date, (i) Property Taxes of the Company allocable to the
Pre-Closing Period shall be equal to the amount of such Property Taxes for the
entire taxable year or period multiplied by a fraction, the numerator of which
is the number of days during the taxable year or period that are in the
Pre-Closing Period and the denominator of which is the number of days in the
entire taxable year or period, and (ii) Taxes (other than Property Taxes) of the
Company for the Pre-Closing Period shall be computed as if such taxable year or
period ended as of the close of business on the Closing Date.
"Fee Reductions" shall have the meaning set forth in Section 2.10(a).
"Fund" shall mean an investment company (or series thereof) registered
under the Investment Company Act for which the Company provides advisory or
subadvisory services pursuant to an Investment Company Advisory Agreement,
excluding any investment company registered under the Investment Company Act for
which the Company (i) has been engaged as a subadvisor and (ii) has not begun
managing any assets.
"Fund Boards" shall mean the boards of directors or trustees of the Funds.
"GAAP" shall mean generally accepted accounting principles as used in the
United States of America as in effect at the time any applicable financial
statements were or are prepared or any act requiring the application of GAAP was
or is performed.
"Governmental Authority" shall mean 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, or any other
authority, agency, department, board, commission or instrumentality of the
United States, any State of the United States or any political subdivision
thereof or any foreign jurisdiction, and any court, tribunal or arbitrator(s) of
competent jurisdiction, and any United States or foreign governmental or
non-governmental self-regulatory organization, agency or authority (including
the NYSE, the London Stock Exchange, the African Exchanges and the NASD).
"Hazardous Substance" means any substance listed, defined, designated or
classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, under any
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Environmental Law, whether by type or by quantity, and any other substance
containing any such substance as a component.
"Holdings" shall have the meaning set forth in the preamble hereto.
"Holdings Controlled Affiliate" means a controlled Affiliate (within the
meaning of the first sentence only of the definition of "Affiliate") of
Holdings.
"Holdings Plan" shall have the meaning set forth in Section 5.6(c).
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" shall have the meaning set forth in Section 9.5(a).
"Independent Accounting Firm" shall mean PricewaterhouseCoopers LLP, or
such other nationally recognized independent public accounting firm mutually
agreed to by Holdings and Buyer.
"Initial Purchase Consideration" shall mean, subject to the Revenue
Run-Rate Adjustment and the PBF Adjustment, $120 million.
"Intellectual Property" means all trademarks, service marks, trademark
applications, trademark registrations, service ▇▇▇▇ applications, trade names,
copyrights, copyright registrations, designs, design registrations, patents
(including all reissues, divisions, continuations and extensions thereof),
patent applications, proprietary rights, logos, names and other intellectual
property rights.
"Interim Sub-Advisory Agreement" shall have the meaning set forth in
Section 5.19(a).
"Investment Advisory Account" shall mean an account (other than an account
of a registered investment company), including broker-sponsored, institutional
and private client accounts, for which the Company provides discretionary or
non-discretionary advisory or subadvisory services pursuant to a Non-Investment
Company Advisory Agreement.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the SEC thereunder.
"Investment Company Advisory Agreement" shall mean an investment advisory
agreement entered into by the Company for the purpose of providing investment
advisory or subadvisory services to an investment company registered under the
Investment Company Act or to any series of such investment company.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" or "Known" with respect to each of the Old Mutual Parties means
those facts that are known after reasonable inquiry by any member of senior
management of the
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Old Mutual Parties set forth on Exhibit 1.1 hereto; and with respect to Buyer
means those facts that are known after reasonable inquiry by any member of
senior management of Buyer set forth on Exhibit 1 hereto.
"LLC" shall have the meaning set forth in the recitals hereto.
"Loss" shall mean any and all claims, losses, liabilities, costs,
penalties, fines and amounts paid or expenses incurred (including reasonable
fees for attorneys, accountants, consultants and experts), damages, obligations
to third parties, expenditures, judgments, awards or settlements that are
imposed upon or otherwise incurred by the relevant party.
"Multiemployer Plan" means any "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA.
"NASD" means the National Association of Securities Dealers, Inc., NASD
Regulation, Inc. and their respective subsidiaries.
"Negative Consent Notice" shall have the meaning set forth in Section 5.3.
"NIAC" shall have the meaning set forth in Section 5.19(a).
"Non-Consenting Account" shall mean each Client that has not consented in
accordance with Section 5.3 to, and each Fund whose Fund Board or, where
required, whose shareholders have not in accordance with Section 5.2 approved
of, the assignment (including by any deemed assignment as provided in such
Sections) of its respective Non-Investment Company Advisory Agreement or
Investment Company Advisory Agreement, as applicable, resulting from the
Transaction or that has withdrawn in writing such consent or approval on or
prior to the fifth Business Day before the Closing Date.
"Non-Controlling Party" shall have the meaning set forth in Section 8.7(c).
"Non-Investment Company Advisory Agreement" shall mean any written or oral
investment advisory agreement entered into by the Company for the purpose of
providing investment advisory services to a Person other than an investment
company registered under the Investment Company Act or series thereof.
"Non-Registered Fund" shall mean any Client that, but for the provisions of
Section 3(c) of the Investment Company Act, would be an "investment company"
within the meaning of the Investment Company Act.
"Notice" shall have the meaning set forth in Section 5.3.
"Notice of Disagreement" shall have the meaning set forth in Section
1.4(b).
"NYSE" shall mean The New York Stock Exchange, Inc.
"Old Mutual Party" and "Old Mutual Parties" shall have the meaning set
forth in the preamble hereto.
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"Old Mutual Indemnity Cap" shall mean $40,000,000.
"Old Mutual Indemnity Limitation Exception" shall have the meaning set
forth in Section 9.3(c).
"OMAM" shall have the meaning set forth in the recitals hereto.
"Other Account Revenue Run-Rate" shall mean, as of any date, the aggregate
annualized investment advisory, investment management and subadvisory fees for
all Clients and Funds (other than (i) Wrap Account Programs, (ii) PBF, and (iii)
with respect to the Closing Other Account Revenue Run-Rate only, Non-Consenting
Accounts) payable to the Company, determined by multiplying the Adjusted Assets
Under Management for each such account as of such date by the applicable fee
rate (net of any Fee Reductions) for such account at such date (excluding any
performance-based fees). The calculation of the Closing Other Account Revenue
Run-Rate shall be made using the same methodology as used for the calculation of
the Base Other Account Revenue Run-Rate.
"Parent" shall mean Old Mutual plc, a public limited company organized
under the laws of England and Wales.
"PBF" shall mean PBHG Special Equity Fund.
"PBF Adjustment" shall have the meaning set forth in Section 5.19(d)(ii).
"PBF Refund" shall have the meaning set forth in Section 5.19(d)(i).
"PBF Reorganization" shall have the meaning set forth in Section 5.19(a).
"Permanent Sub-Advisory Agreement" shall have the meaning set forth in
Section 5.19(a).
"Permits" shall have the meaning set forth in Section 2.14(a).
"Permitted Encumbrances" shall have the meaning set forth in Section 2.18.
"Person" shall mean any individual, corporation, company, partnership
(limited or general), limited liability company, joint venture, association,
trust or other business entity.
"Plans" shall have the meaning set forth in Section 2.16(a).
"Post-Closing Consenting Account" shall have the meaning set forth in
Section 1.5(c).
"Post-Closing Period" shall mean any taxable year or period that begins
after the Closing Date and, with respect to any taxable year or period beginning
before and ending after the Closing Date, the portion of such taxable year or
period beginning after the Closing Date.
"Pre-Closing Period" shall mean any taxable year or period that ends on or
before the Closing Date and, with respect to any taxable year or period
beginning before and ending
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after the Closing Date, the portion of such taxable year or period ending on and
including the Closing Date.
"Proceedings" shall have the meaning set forth in Section 2.13.
"Property Taxes" means real, personal and intangible ad valorem property
taxes.
"Purchase Consideration" shall mean an amount equal to the Initial Purchase
Consideration plus the Adjustment Amount plus the sum of all Revenue Run-Rate
Adjustment Payments minus the PBF Refund, if any.
"Qualified Plans" shall have the meaning set forth in Section 2.16(c).
"Registered IP" shall have the meaning set forth in Section 2.17.
"Regulatory Documents" shall mean, with respect to a Person, all forms,
reports, registration statements, schedules and other documents filed, or
required to be filed, by such Person pursuant to the Securities Laws or the
rules and regulations of any self-regulatory organization.
"Restricted Information" shall mean any and all non-public information
relating to the Company, its business or operations including identity of and
the mandates of the Company's clients as of or during the three years prior to
the Closing Date, the Company's fee structures and arrangements as of or during
the three years prior to the Closing Date and the Company's current business
plans and historical financial statements as of or during the three years prior
to the Closing Date. Notwithstanding the foregoing, Restricted Information shall
not include information that (i) is or becomes part of the public domain other
than as a result of any disclosure by a Restricted Person, (ii) is lawfully
disclosed to a Restricted Person by a third party not bound by an obligation of
confidentiality or (iii) was shared prior to the Closing between the Company, on
the one hand, and Holdings, OMAM or any Centralized Entity, on the other hand,
relating to the structure and management of Wrap Account Programs,
multi-disciplinary accounts and product offerings of the type or similar in
nature to the type listed on Exhibit 1.2 including potential new programs,
structures and offerings for existing or new sponsors.
"Restricted Person" shall have the meaning set forth in Section 5.9(b).
"Retained Liabilities" shall have the meaning set forth in Section 9.1(a).
"Revenue Run-Rate Adjustment" shall have the meaning set forth in Section
1.5(a).
"Revenue Run-Rate Adjustment Payment" shall have the meaning set forth in
Section 1.5(c).
"Revenue Run-Rate Holdback" shall have the meaning set forth in Section
1.5(c).
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"Revenue Sharing Termination Agreement" means the Letter Agreement, dated
December 15, 2000, among United Asset Management Corporation, Old Mutual Asset
Managers (US), Inc., the Company, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇, including all exhibits thereto.
"SEC" shall mean the Securities and Exchange Commission, and any successor
thereto.
"Section 338(h)(10) Forms" shall have the meaning set forth in Section
8.2(b).
"Securities" shall mean any securities as defined in the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder.
"Securities Laws" shall mean the Securities Act, the Exchange Act, the
Investment Company Act, the Advisers Act, state "blue sky" laws, all applicable
foreign securities laws, and the rules and regulations promulgated thereunder.
"Seller Disclosure Schedule" shall have the meaning set forth in the
introduction to Article III.
"Shares" shall mean all of the outstanding shares of Company Common Stock.
"Subsidiary" of a Person shall mean any other Person 50% or more of the
voting stock (or of any other form of other voting or controlling equity
interest in the case of a Person that is not a corporation) of which is
beneficially owned by the Person directly or indirectly through one or more
other Persons; provided, that "Subsidiary" shall not include (i) any Fund or any
Person in which a Fund holds an ownership interest and (ii) any investment
account advised or managed by a Person on behalf of another party.
"Supplemental Closing" shall have the meaning set forth in Section 1.4(e).
"Supplemental Closing Date" shall have the meaning set forth in Section
1.4(e).
"Tax Benefit" shall mean a Tax deduction, Tax credit or other Tax benefit.
"Tax Claim" means any claim with respect to Taxes made by any Governmental
Authority that, if pursued successfully, would reasonably be expected to serve
as the basis for a claim for indemnification under Article VIII.
"Tax Proceeding" shall have the meaning set forth in Section 8.7(b).
"Tax Return" shall mean any return, report, information statement, schedule
or other document (including any related or supporting information and including
any Form 1099 or other document or report required to be provided by the Company
to third parties) with respect to Taxes, including any document required to be
retained or provided to any Governmental Authority pursuant to 31 U.S.C.
Sections 5311-5328 and regulations promulgated
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thereunder, relating to the Company or any consolidated group of which the
Company was a member at the applicable time, and any amended Tax Returns.
"Taxes" shall mean all federal, provincial, territorial, state, municipal,
local, foreign or other taxes, imposts, rates, levies, assessments and other
charges (and all interest and penalties thereon and additions thereto imposed by
any Governmental Authority), including, without limitation, all income, excise,
franchise, gains, capital, real property, goods and services, transfer, value
added, gross receipts, windfall profits, severance, ad valorem, personal
property, production, sales, use, license, stamp, documentary stamp, mortgage
recording, employment, payroll, social security, unemployment, disability,
estimated or withholding taxes, and all customs and import duties, and all
interest and penalties thereon and additions thereto imposed by any Governmental
Authority.
"Technology" shall mean all trade secrets, conf
idential information, data,
databases, inventions, know-how, formulae, processes, procedures, research
records, records of inventions, test information, market surveys and marketing
know-how of the Company.
"Termination Date" shall have the meaning set for th in Section
7.1(a)(vii).
"Third Party Claim" shall have the meaning set forth in Section 9.5(a).
"timely" in relation to the ability of the parties to effect the
Transaction means their ability to effect the Transaction prior to the
Termination Date.
"Transaction" shall have the meaning set forth in Section 1.1.
"Treasury Rate" shall mean the applicable interest rate payable on United
States Treasury obligations with a maturity date most closely corresponding to
the appropriate payment period.
"Treasury Regulations" shall mean regulations promulgated under the Code.
"Voting Debt" shall have the meaning set forth in Section 2.5.
"Wire Transfer" shall mean a payment in immediately available funds by wire
transfer in lawful money of the United States of America to such account or to a
number of accounts as shall have been designated by written notice from the
receiving party to the paying party.
"Working Capital Amount" shall mean (i) cash, cash equivalents and current
prepaid assets and receivables of the Company arising in the ordinary course of
business calculated consistent with past practice and in accordance with GAAP
less (ii) all current liabilities of the Company calculated consistent with past
practice and in accordance with GAAP (provided that no amount will be deducted
in relation to (x) that component of current liabilities that is comprised of
accrued compensation related to the payments due to be made on January 1, 2003
and January 1, 2004 pursuant to Annex I to Exhibit A of the Revenue Sharing
Termination Agreement and (y) the Shared Liabilities (as defined in Annex A)),
all as reflected on the Adjustment Amount Balance Sheet; it being understood
that the Working Capital Amount shall
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be calculated after giving effect to any transaction effected in accordance with
Sections 5.15 and 5.21, but before giving effect to any infusion to the Company
of cash or other assets by Buyer on the Closing Date.
"Wrap Account Program" shall mean each of the programs listed on Exhibit
1.2 hereto and any similar program entered into by the Company prior to the
Closing.
"Wrap Account Revenue Run-Rate" shall mean, as of any date, the aggregate
annualized investment advisory, investment management and subadvisory fees
payable under all Wrap Account Programs (other than, with respect to the Closing
Wrap Account Revenue Run-Rate only, Wrap Account Programs or, where required
under Applicable Law or under the relevant Contract, investors thereunder that
have not consented in accordance with Section 5.3 to the assignment (including
by any deemed assignment as provided in such Section) of their respective
Non-Investment Company Advisory Agreements resulting from the Transaction or
that have withdrawn in writing such consent on or prior to the fifth Business
Day before the Closing Date ) payable to the Company, determined by multiplying
the Adjusted Assets Under Management for each such Wrap Account Program as of
such date by the applicable fee rate (net of any Fee Reductions) for such Wrap
Account Program at such date (excluding any performance-based fees). The
calculation of the Closing Wrap Account Revenue Run-Rate shall be made using the
same methodology as used for the calculation of the Base Wrap Account Revenue
Run-Rate.
ARTICLE I
THE TRANSACTION
Section 1.1. General. Upon the terms and subject to the conditions hereof,
Holdings agrees to sell, transfer, assign, convey and deliver, free and clear of
any Encumbrances, to Buyer, and Buyer agrees to purchase and accept from
Holdings, the Shares for the Purchase Consideration (the "Transaction").
Section 1.2. Closing. The consummation of the Transaction (the "Closing")
shall take place at the offices of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., local time, on the fifth
Business Day after all of the conditions set forth in Article VI hereof (other
than conditions which relate to actions to be taken at the Closing) have been
satisfied or waived by the parties entitled to the benefits thereto or at such
other date, time and place as Buyer and Holdings shall mutually agree in writing
(the date on which the Closing takes place being referred to herein as the
"Closing Date").
Section 1.3. Instruments of Transfer; Payment of Purchase Consideration.
(a) Not less than two Business Days prior to the Closing Date, Holdings
shall deliver to Buyer Wire Transfer instructions designating the accounts to
which the Initial Purchase Consideration shall be paid by Buyer at the Closing.
(b) At the Closing, Holdings shall deliver, or shall cause to be delivered,
to Buyer the following:
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(i) The share certificate or certificates representing the Shares,
duly endorsed in blank or accompanied by stock powers duly executed in
blank in proper form for transfer, with all appropriate stock transfer tax
stamps affixed;
(ii) the documents required to be delivered pursuant to Section 6.2;
and
(iii) such additional instruments, documents or certificates as may be
reasonably requested by Buyer.
(c) At the Closing , Buyer shall deliver, or shall cause to be delivered,
to Holdings the following:
(i) an amount in cash equal to the Initial Purchase Consideration,
delivered by Wire Transfer as instructed by Holdings;
(ii) the documents required to be delivered pursuant to Section 6.3;
and
(iii) such additional instruments, documents or certificates as may be
reasonably requested by Holdings.
Section 1.4. Post-Closing Working Capital Adjustment.
(a) As soon as reasonably practicable following the Closing Date, and in no
event more than 60 Business Days thereafter, Buyer shall prepare and deliver to
Holdings the Adjustment Amount Balance Sheet, together with the schedules
calculating the Adjustment Amount and setting forth such calculations in
reasonable detail (collectively, the "Adjustment Amount Documents").
(b) Within ten Business Days after delivery to Holdings of the Adjustment
Amount Documents (during which period Buyer shall cause the Company to provide
access to such working papers and information relating to the preparation of the
Adjustment Amount Documents as may be reasonably requested by Holdings),
Holdings may dispute all or a portion of such Adjustment Amount Documents by
giving written notice (a "Notice of Disagreement") to Buyer setting forth in
reasonable detail the basis for any such dispute (any such dispute being
hereinafter called a "Disagreement"). The parties shall promptly commence good
faith negotiations with a view to resolving all such Disagreements. If Holdings
does not provide a Notice of a Disagreement to Buyer within the ten-Business Day
period set forth in this paragraph (b), Holdings shall be deemed to have
irrevocably accepted such Adjustment Amount Documents in the form delivered to
it by Buyer.
(c) If Holdings shall deliver a Notice of Disagreement and Buyer does not
dispute all or any portion of such Notice of Disagreement by giving written
notice to Holdings setting forth in reasonable detail the basis for such dispute
within ten Business Days following the delivery of such Notice of Disagreement,
Buyer shall be deemed to have irrevocably accepted the Adjustment Amount
Documents as modified in the manner described in the Notice of Disagreement.
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(d) If Buyer shall dispute a Notice of Disagreement by delivery of written
notice to Holdings within the ten-Business Day period set forth in the preceding
subsection (c), and within the ten Business Days following the delivery to
Holdings of the notice of such dispute, the parties do not resolve the
Disagreement (as evidenced by a written agreement between them), such
Disagreement shall thereafter be referred to the Independent Accounting Firm for
a resolution of such Disagreement in accordance with the terms of this
Agreement. Buyer and Holdings shall instruct the Independent Accounting firm
that the determinations of such firm with respect to any Disagreement shall be
rendered within ten Business Days after referral of the Disagreement to such
firm or as soon thereafter as reasonably possible. Such determinations shall be
final and binding upon the parties, the amount so determined shall be used to
complete the final Adjustment Amount Documents and the parties agree that the
procedures set forth in this Section 1.4 shall be the sole and exclusive remedy
with respect to the determination of the Adjustment Amount. Each of Buyer and
Holdings shall use its commercially reasonable efforts to cause the Independent
Accounting Firm to render its determination within the ten-Business Day period
described in the second sentence in this subsection (d), and each shall
cooperate with such firm and provide such firm with access to the books,
records, personnel and representatives of it and such other information as such
firm may require in order to render its determination. All of the fees and
expenses of any Independent Accounting Firm retained pursuant to this paragraph
(d) shall be shared equally by Buyer and Holdings.
(e) Promptly after the Adjustment Amount Documents have been finally
determined in accordance with this Section 1.4 (including by means of a deemed
acceptance of such documents by Holdings or Buyer as provided in paragraphs (b)
and (c), respectively, of this Section 1.4), but in no event later than five
Business Days following such final determination (the "Supplemental Closing
Date"), the parties hereto shall hold a supplemental closing (the "Supplemental
Closing"), either by telephone or in person at a mutually convenient location.
If the Adjustment Amount is positive, Buyer shall deliver, or shall cause to be
delivered, to Holdings on the Supplemental Closing Date an amount in cash equal
to the Adjustment Amount by Wire Transfer as set forth in written instructions
from Holdings. If the Adjustment Amount is negative, Holdings shall deliver to
Buyer on the Supplemental Closing Date an amount in cash equal to the absolute
value of the Adjustment Amount by Wire Transfer as set forth in written
instructions from Buyer. In any case, the amount payable at the Supplemental
Closing shall be accompanied by interest thereon calculated at the Treasury Rate
for the period from the Closing Date up to but not including the Supplemental
Closing Date.
Section 1.5. Revenue Run-Rate Adjustment.
(a) If the Closing Blended Ratio is less than 90%, an amount equal to the
Revenue Run-Rate Holdback shall be deducted from the Initial Purchase
Consideration and the Purchase Consideration (the "Revenue Run-Rate Adjustment")
and no payment shall be made with respect thereto under this Article I except as
set forth in Section 1.5(b).
(b) Promptly (but in any event no later than five Business Days) following
the last day of each Consent Period for which the Adjusted Run-Rate Ratio is
greater than 80%, Buyer shall pay to Holdings an amount in cash equal to the
Revenue Run-Rate Adjustment Payment for such Consent Period, if any, plus
interest thereon calculated at the Treasury Rate for
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the period from the Closing Date up to but not including the date of payment, by
Wire Transfer as set forth in written instructions from Holdings.
(c) The following terms used in this Section 1.5 shall have the meanings
set forth below:
"Adjusted Run-Rate Ratio" for any Consent Period shall mean a ratio, the
numerator of which is the sum of the Closing Blended Revenue Run-Rate plus the
amount by which the Closing Blended Revenue Run-Rate would have exceeded the
Closing Blended Revenue Run-Rate had all Post-Closing Consenting Accounts with
respect to such Consent Period or any prior Consent Period given or been deemed
to have given their consent as of the fifth Business Day before the Closing
Date, and the denominator of which is the Base Blended Revenue Run-Rate.
"Adjustment Threshold" shall mean (i) 80%, in the case of the first Consent
Period, and (ii) the greater of (A) 80% and (B) the Adjusted Run-Rate Ratio for
the prior Consent Period, in the case of all other Consent Periods.
"Consent Period" shall mean (i) the period from the fourth Business Day
prior to the Closing Date through and including the thirtieth (30th) day
following the Closing Date, (ii) the period from the thirty-first (31st) day
following the Closing Date through and including the sixtieth (60th) day
following the Closing Date and (iii) the period from the sixty-first (61st) day
following the Closing Date through and including the ninetieth (90th) day
following the Closing Date.
"Post-Closing Consenting Account" with respect to any Consent Period shall
mean a Person (other than a Person that was a Post-Closing Consenting Account
with respect to any prior Consent Period) that was a Non-Consenting Account as
of the fifth Business Day before the Closing Date and whose consent to or
approval of the assignment of its Non-Investment Company Advisory Agreement or
Investment Advisory Agreement, as applicable, resulting from the Transaction is
obtained during such Consent Period and is not withdrawn prior to the last day
of such Consent Period and, for the final Consent Period only, shall also
include any Person that was a Non-Consenting Account as of the fifth Business
Day before the Closing Date (other than a Person that is or was a Post-Closing
Consenting Account with respect to any Consent Period) that continues to be a
Client or Fund on the ninetieth (90th) day following the Closing Date.
"Revenue Run-Rate Adjustment Payment" for any Consent Period shall mean an
amount equal to the product of (i) the Adjusted Run-Rate Ratio for such Consent
Period minus the Adjustment Threshold, multiplied by (ii) $120,000,000; provided
that (x) if the Adjusted Run-Rate Ratio for such Consent Period is greater than
90%, then such Adjusted Run-Rate Ratio shall be deemed to be 90% and (y) in no
event shall the aggregate of all Revenue Run-Rate Adjustment Payments exceed
$12,000,000.
"Revenue Run-Rate Holdback" shall mean an amount equal to the product of
(i) 90% minus the Closing Blended Ratio, multiplied by (ii) $120,000,000;
provided that in no event shall the Revenue Run-Rate Holdback exceed
$12,000,000.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE OLD MUTUAL PARTIES
ABOUT THE COMPANY
Except as set forth in the written disclosure schedule previously delivered
to Buyer by the Old Mutual Parties (the "Company Disclosure Schedule"), each of
the Old Mutual Parties, jointly and severally, hereby represents and warrants to
Buyer as follows:
Section 2.1. Organization and Related Matters. The Company is a
corporation, duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts. The Company has the corporate power
and authority and possesses all material governmental franchises, licenses,
permits, authorizations and approvals necessary to carry on its business
substantially in the manner as it is now being conducted and to own, lease and
operate all of its properties and assets. The Company is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned, leased or operated by it makes such qualification or licensing
necessary except where the failure to be so licensed or qualified would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. The copy of the Company Charter delivered to Buyer
prior to the execution of this Agreement is a complete and correct copy of such
instrument as in effect on the date hereof.
Section 2.2. No Subsidiaries. The Company has no Subsidiaries and does not
beneficially own directly or indirectly any capital stock, membership interest,
partnership interest, joint venture interest or other equity interest in any
Person.
Section 2.3. Authority; No Violation.
(a) The Company has full corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly approved by all requisite corporate action on the part of the
Company, and no other corporate proceedings on the part of the Company are
necessary to approve this Agreement or to authorize or consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and (assuming the due authorization,
execution and delivery of this Agreement by the other parties hereto)
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by the Old Mutual
Parties nor the consummation by the Old Mutual Parties of any of the
transactions contemplated hereby to be performed by them, nor compliance by the
Old Mutual Parties with any of the terms or provisions hereof, will (i) violate
any provision of the Company Charter or the bylaws of the Company or (ii)
assuming that the consents and approvals referred to in Section 2.4 are duly
obtained, (x) violate, conflict with or require any notice, filing, consent,
waiver or approval under any Applicable Law to which the Company or any of its
properties, contracts or other assets are subject or (y) violate, conflict with,
result in a breach of any provision of or the loss of
-17-
any benefit under, constitute a default (or an event which, with or without
notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, accelerate
or result in a right of acceleration of the performance required by, result in
the creation of any Encumbrance upon the Company Common Stock or the properties,
contracts or other assets of the Company under, or require any notice, approval,
waiver or consent under, any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which the Company
is a party, or by which the Company or any of its properties or assets may be
bound or affected, other than, in the case of clauses (x) and (y) and other than
with respect to Encumbrances upon the Company Common Stock, any such items that
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
Section 2.4. Consents and Approvals. Except for (i) consents, approvals and
notices as are set forth in Sections 5.2 and 5.3 of this Agreement and in
Section 2.4 of the Company Disclosure Schedule, (ii) the applicable filings
under the HSR Act, (iii) compliance with and filings under the U.S. federal
Securities Laws as may be required in connection with this Agreement and the
transactions contemplated hereby and (iv) those consents, approvals and notices
that may be required solely by reason of the participation of Buyer (as opposed
to any other third party) in the Transaction and the other transactions
contemplated hereby, no consents or approvals of or filings, declarations or
registrations with any Governmental Authority or any third party are necessary
in connection with (x) the execution and delivery by the Company of this
Agreement and (y) the consummation by the Company of the Transaction and/or the
other transactions contemplated hereby so as to permit the Company and PBF to
continue their respective businesses and operations after the Closing Date in
substantially the same manner as conducted on the date hereof. Except as set
forth in Section 2.4 of the Company Disclosure Schedule, with respect to the
Canada Advisory Agreements, no approval of or filing, declaration or
registration with any Governmental Authority or third person is required in
connection with the execution and delivery by the Company of this Agreement or
the consummation by the Company of the Transactions contemplated hereby.
Section 2.5. Authorized Capitalization; Ownership of Shares. The authorized
capital stock of the Company consists of 200,000 shares of Company Common Stock,
all of which are outstanding. OMAM, as of the date hereof, is, and, immediately
prior to the Closing, Holdings will be, the direct record and beneficial owner
of all of the outstanding capital stock of the Company, which is represented
solely by the Shares. There are no shares of capital stock or other equity or
ownership interests of any kind in the Company issued, reserved for issuance or
outstanding other than the Shares. All of the Shares are duly authorized,
validly issued, fully paid, nonassessable and free of any pre-emptive rights and
are not subject to any voting trust agreement (or similar agreement) or other
contract restricting or otherwise relating to the voting, dividend rights or
disposition of the Shares. There is no outstanding option, warrant, convertible
or exchangeable security, right, subscription, call, right of first refusal,
legally binding commitment, pre-emptive right or other agreement or right of any
kind to purchase or otherwise acquire (including by exchange or conversion) from
the Company, OMAM, Holdings or any other Person any capital stock of the
Company. There are no outstanding obligations of the Company to redeem,
repurchase or otherwise acquire any of the Company Common Stock. There are no
bonds, debentures, notes or other indebtedness generally having the right to
vote (or convertible into, or exchangeable for, Securities or limited liability
company or partnership
-18-
interests having the right to vote) on any matters that holders of Shares may
consent or vote ("Voting Debt"). There are no options, warrants, rights,
convertible or exchangeable Securities, "phantom" limited liability company or
partnership interests (or similar "phantom" Securities), stock (or other
ownership) appreciation rights, stock (or other ownership) performance units,
commitments, contracts, arrangements or undertakings of any kind to which Parent
or any of its Subsidiaries is a party or by which any of them is bound (i)
obligating the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, existing or additional capital stock (or other ownership
interests) of the Company or any security convertible into or exercisable or
exchangeable for any of the foregoing or for Voting Debt, (ii) obligating the
Company to issue, grant, extend or enter into any such option, warrant, call,
right, security commitment, contract, arrangement or undertaking, (iii) that
give any Person the right to receive any economic benefit or right similar to or
derived from the economic benefits and rights accruing to holders of the Company
Common Stock or (iv) that give rise to a right to receive any payment from the
Company or, following the Closing, Buyer or any of its Affiliates (within the
meaning of the first sentence only of the definition of "Affiliate") upon the
execution of this Agreement or the consummation of the Transaction or any of the
other transactions contemplated hereby.
Section 2.6. Regulatory Documents.
(a) Since January 1, 1999, the Company and PBF have timely filed all forms,
reports, registration statements, schedules and other documents, together with
any amendments required to be made with respect thereto, that were required to
be filed with any Governmental Authority, including the SEC and the NASD, and
have timely paid in full all fees and assessments due and payable in connection
therewith other than such failures to timely file or pay that would not,
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect or a material adverse effect on PBF. Since January 1,
1996, the Company has been (i) duly registered as an investment adviser under
the Advisers Act and under all applicable state statutes (if required to be so
registered under Applicable Law) and (ii) duly registered and licensed under all
other Applicable Laws or exempt therefrom, except, in the case of clause (ii),
as would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. Section 2.6(a) of the Company Disclosure
Schedule lists the jurisdictions in which the Company is registered as an
investment adviser or is required to give notice that it is acting as an
investment adviser and in which it is required to be registered or licensed in
any other capacity pursuant to any of the Securities Laws. Each such
registration or license is, and when required by Applicable Law has been, in
full force and effect.
(b) As of their respective dates, the Regulatory Documents of each of the
Company and PBF complied in all material respects with Applicable Laws as in
effect at the time the Regulatory Documents were filed, and none of such
Regulatory Documents of the Company or PBF, as of their respective dates or as
of such other dates as so required under Applicable Law, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Company has
previously delivered to Buyer a true, correct and complete copy of each such
Regulatory Document filed with the SEC by the Company after January 1, 1999 and
prior to the date hereof, and will deliver or make available to Buyer promptly
after the filing thereof a true, correct and complete copy of
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each Regulatory Document filed with the SEC by the Company after the date hereof
and prior to the Closing Date.
Section 2.7. Financial Statements; Absence of Liabilities. Attached as
Exhibit 2.7 hereto are true and correct copies of (i) the audited balance sheets
of the Company as of December 31, 2000 and 2001, and the related audited
statements of income, changes in shareholders' equity and cash flows for the
fiscal years ended December 31, 2000 and 2001, in each case accompanied by the
audit report of the Company's Accountant, with respect to the Company and (ii)
the unaudited balance sheets of the Company as of March 31, 2001 and 2002, and
the related statements of income, changes in shareholders' equity and cash flows
for the three month periods ended March 31, 2001 and 2002, with respect to the
Company (the financial statements referred to above being referred to as the
"Company Financial Statements" and the balance sheet as of December 31, 2001
being referred to as the "Company Balance Sheet"). The balance sheets referred
to in the previous sentence (including the related notes, where applicable)
present fairly in all material respects the financial position of the Company as
of the dates thereof, and the other financial statements referred to in this
Section 2.7 (including the related notes thereto, where applicable) present
fairly in all material respects the results of the Company's operations and cash
flows for the respective fiscal periods therein set forth (subject to normal
year-end audit adjustments in amounts consistent with the prior year in the case
of unaudited statements), in each case in accordance with GAAP consistently
applied (except as indicated in the related notes thereto); each of the
financial statements referred to in this Section 2.7 (including the related
notes, where applicable) complies in all material respects with GAAP; and each
of such financial statements (including the related notes, where applicable) has
been prepared in all material respects in accordance with GAAP consistently
applied during the periods involved and consistent with the books and records of
the Company. Except for (i) those liabilities that are fully reflected or
reserved against on the Company Balance Sheet or fully disclosed in the related
notes thereto and (ii) liabilities incurred in the ordinary course of business
consistent with past practice since the date of the Company Balance Sheet and
which are not material, individually or in the aggregate, the Company does not
have any liabilities or obligations of any nature, whether absolute, accrued,
contingent or other and whether due or to become due, which would be required to
be shown or reserved against on a balance sheet (or described in the notes
thereto) prepared in accordance with GAAP. The books and records of the Company
have been maintained in accordance with good business practices and all
Applicable Laws and reflect only actual transactions.
Section 2.8. Ineligible Persons. Neither the Company nor any of its
directors, officers or the employees listed on Exhibit 5.17(a) 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 Act) to a registered investment company nor is there any action,
proceeding or investigation pending or, to the Knowledge of the Old Mutual
Parties, threatened by any Governmental Authority, which would result in the
ineligibility of the Company or any of its officers, directors or the employees
listed on Exhibit 5.17(a) to serve in any such capacities. Neither the Company
nor any of its officers, directors or the employees listed on Exhibit 5.17(a) is
ineligible pursuant to Section 203 of the 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 Old Mutual Parties, threatened by any Governmental Authority that would
reasonably be expected to result in the
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ineligibility of the Company or any of such persons or, to the Knowledge of the
Old Mutual Parties, that would provide a basis for such ineligibility.
Section 2.9. Contracts. Section 2.9 of the Company Disclosure Schedule sets
forth a complete and accurate list as of the close of business on the day
preceding the date hereof of all written or oral contracts, agreements,
guarantees, leases and executory commitments to which the Company is a party or
by which any of its properties or assets are bound which: (i) contain
obligations of the Company in excess of $50,000; (ii) involve payments based, in
whole or in part, on profits, revenues, fee income or other financial
performance measures of the Company; (iii) are employment, management,
consulting or substantially similar agreements; (iv) are severance or
substantially similar agreements pursuant to which the Company has any
continuing obligations; (v) include any noncompetition or nonsolicitation
covenant or any exclusive dealing or similar arrangement that limits the ability
of the Company to compete (geographically or otherwise) in any line of business;
or (vi) are otherwise material to the businesses, properties or assets of the
Company, including any Investment Company Advisory Agreements, distribution
agreements and Non-Investment Company Advisory Agreements (all such contracts,
agreements, guarantees, leases and commitments (whether or not set forth in
Section 2.9 of the Company Disclosure Schedule) hereinafter are referred to
collectively as the "Contracts"). As of the date hereof, each of the Contracts
is a legal, valid and binding obligation of the Company and, to the Knowledge of
the Old Mutual Parties, of each other party thereto and is in full force and
effect and enforceable against the Company (assuming the due authorization,
execution and delivery by the other parties thereto) and, to the Knowledge of
the Old Mutual Parties, each other party thereto, in each case in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or affecting
creditors generally and by the availability of equitable remedies (whether in
proceedings at law or in equity). As of the date hereof, the Company has not
received written or, to the Knowledge of the Old Mutual Parties, oral notice of
cancellation of or material default or breach under or intent to cancel or call
a default under any of the Contracts specified in clauses (i) to (vi) above. The
Company has performed all material obligations required to be performed by it to
date under the Contracts, and, assuming receipt of the consents and approvals
set forth in clauses (i) through (iv) of Section 2.4, there exists no event or
condition which with or without notice or lapse of time or both would be a
default or breach on the part of the Company or on the part of the other party
to such Contracts other than any such defaults and breaches as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. None of Parent, Holdings or OMAM has entered into any
confidentiality agreement that remains in effect with any Person (other than
Buyer) in connection with the proposed sale of the Company or any portion of the
Company's business.
Section 2.10. Funds and Clients.
(a) Section 2.10(a) of the Company Disclosure Schedule sets forth (other
than for PBF): (i) a true, complete and correct list, as of the Base Date, of
each Fund and of all of the Clients, identifying the Funds and the Clients for
which the Company is the investment advisor, subadvisor or distributor; (ii) the
total net assets (as defined for purposes of the Investment Company Act) under
management for each of the Funds, calculated in accordance with the Investment
Company Act, as of 4:00 p.m. New York time on the Base Date, and the total net
assets under management for each Client, calculated based on the closing prices
on the
-21-
applicable stock exchanges or NASDAQ, as the case may be, as of 4:00 pm New York
time (or such later time as the Company values such assets in the ordinary
course of business) on the Base Date; (iii) a true, complete and correct
schedule setting forth the calculation of the Base Wrap Account Revenue Run-Rate
and the Base Other Account Revenue Run-Rate; (iv) the stated fees payable to the
Company by each Fund and each Client under the applicable Investment Company
Advisory Agreement or Non-Investment Company Advisory Agreement as of the Base
Date; (v) as to each Fund, as of the date hereof, the terms of any fee waivers,
expense reimbursement (or assumption) arrangements, unreimbursed payments being
made by the Company to brokers, dealers or other Persons with respect to the
distribution of shares of a Fund or services provided to Fund shareholders; (vi)
as to each Fund, as of the date hereof, the rate and method of computation of
any subadvisory fees payable to any Person by the Company with respect to such
Fund; (vii) as to each Client, as of the date hereof, the terms and methods of
computation of any referral or servicing fees, if any, payable by the Company to
any Person; and (viii) the annualized advisory or subadvisory fees payable to
the Company by each Fund and Client based upon the total net assets under
management for the Fund or the total net assets under management for the Client,
determined as set forth in clause (ii) of this Section 2.10(a) and net of the
amounts set forth in clauses (v) and (vi) of this Section 2.10(a); provided,
however, that the parties acknowledge and agree that the information with
respect to Aegon/Transamerica Series Fund, Inc. excludes information relating to
the Transferred Assets. No Client is a Non-Registered Fund. For purposes of this
Agreement, the fee waivers, reimbursements (or assumption) arrangements,
payments and referral or servicing fees described in clauses (v) and (vii) are
referred to as "Fee Reductions."
(b) Schedule 2.10(b) of the Company Disclosure Schedule sets forth the
information required to be disclosed for other Funds under clauses (i) through
(viii) of Section 2.10(a) with respect to PBF. PBF is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the requisite corporate, trust or partnership power and
authority, and possesses all rights, licenses, authorizations and approvals,
governmental or otherwise, necessary to entitle it to use its name, to own,
lease or otherwise hold its properties and assets and to carry on its business
substantially in the manner 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. PBF 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 or is a series thereof and is otherwise in
compliance, and operates in accordance, with all Applicable Laws except where
the failure to so comply would not have a material adverse effect on PBF. PBF
has not 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. All outstanding ownership units of PBF have
been duly and validly issued and are fully paid and nonassessable. The books and
records of PBF have been maintained in all material respects in accordance with
good business practices and all Applicable Laws and reflect only actual
transactions.
(c) Each Client to which the Company 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) an entity whose assets include
the assets of such a plan within the meaning of ERISA and applicable regulations
(an "ERISA Client") has been managed by the Company such that (x) the
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exercise of such management or provision of any services is in compliance in all
material respects with the applicable requirements of ERISA and (y) the Company
has not 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,
other than Taxes that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
Section 2.11. Investment Company Advisory Agreements; Non-Investment
Company Advisory Agreements.
(a) Since December 31, 1999, (i) each Investment Company Advisory Agreement
subject to Section 15 of the Investment Company Act has been performed by the
Company in accordance with its terms and with the Investment Company Act and all
other Applicable Laws in all material respects,and (ii) the investment advisory
agreement between PBF and its investment advisor has been performed by such
investment advisor in accordance with its terms and with the Investment Company
Act and all other Applicable Laws in all material respects.
(b) Since December 31, 1999, each Non-Investment Company Advisory Agreement
has been performed by the Company in accordance with its terms and with the
Advisers Act and all other Applicable Laws in all material respects.
Section 2.12. No Broker. No broker, finder or similar intermediary has
acted for or on behalf of, or is entitled to any broker's, finder's or similar
fee or other commission from, the Company or any of its Affiliates in connection
with this Agreement or the transactions contemplated hereby.
Section 2.13. Legal Proceedings. There are no legal, administrative,
arbitral or other proceedings (including disciplinary proceedings), claims,
suits, actions or governmental or regulatory investigations or inquiries of any
nature (collectively, "Proceedings") that are pending or, to the Knowledge of
the Old Mutual Parties, threatened against the Company or PBF or any of their
respective properties, assets or businesses which, if determined adversely to
the Company would reasonably be expected, individually or in the aggregate, to
have a Company Material Adverse Effect, or that challenge the validity or
propriety of the transactions contemplated by this Agreement, and there is no
injunction, order, judgment, decree or regulatory restriction (which regulatory
restrictions are particular to the Company and not generally applicable to
investment advisors) imposed upon the Company or PBF or any of their respective
properties, assets or businesses.
Section 2.14. Compliance with Applicable Law.
(a) Each of the Company and PBF holds, and at all times has held, all
licenses, franchises, directed exemptive orders, directed "no-action" positions,
decrees, permits and authorizations required under Applicable Law (collectively,
"Permits") necessary for the lawful ownership, operation and use of its
properties and assets and the conduct of its businesses under and pursuant to,
has complied with each, and neither the Company nor PBF is in default under any,
Applicable Law relating to the Company or PBF or any of their respective assets,
-23-
properties or operations; and there are no outstanding violations of any of the
foregoing; and neither the Company nor PBF has received any notice asserting any
such violation, defaults or failures to comply, except for such Permits the
failure of which to hold or to have held would, or any such violations or
defaults that would not, reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect. The Company and PBF have
been and are in compliance with all Permits, except where the failure to be in
compliance would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect.
(b) Except for normal examinations conducted by any Governmental Authority
in the regular course of the business of the Company (a complete and accurate
copy of each correspondence from or to such Governmental Authority in connection
with which has previously been provided by the Company to Buyer), since December
31, 1999 no Governmental Authority has, to the Knowledge of the Old Mutual
Parties, initiated, and no Governmental Authority has provided written or, to
the Knowledge of the Old Mutual Parties, oral notice to any of the Old Mutual
Parties, OMAM or PBF of any threatened proceeding or investigation into the
business or operations of the Company or PBF or any of their members, officers,
directors, employees or controlling persons in their capacity as such with the
Company or PBF; and, to the Knowledge of the Old Mutual Parties, no such
proceeding or investigation is contemplated. Except as set forth in Section
2.14(b) of the Company Disclosure Schedule, there is no deficiency, violation or
exception claimed or asserted in writing by any Governmental Authority with
respect to any examination of the Company or PBF that has not been resolved in
all material respects.
(c) The Company has at all times since December 31, 1999 rendered
investment advisory services to investment advisory clients with whom the
Company is or was a party to an Investment Company Advisory Agreement or
Non-Investment Company Advisory Agreement in material compliance with all
applicable requirements, if any, as to portfolio composition and portfolio
management, including the terms of such Investment Company Advisory Agreement or
Non-Investment Company Advisory Agreement, as the case may be, written
instructions from such clients, the organizational documents of such clients,
prospectuses and board of director or trustee directives.
(d) Since December 31, 1999, each officer and employee of the Company
required by Applicable Law to be registered or licensed as a broker-dealer or as
a registered representative thereof, and each Person of which any such officer
or employee is a "person associated with a broker or dealer" as defined in
Section 3(a)(18) of the Exchange Act, is, and at all times while an officer or
employee of the Company has been, duly registered or licensed as such under the
provisions of Applicable Law and has complied with Applicable Law in all
material respects in connection with the offering and sale of any Securities,
including shares of or interests in the Funds.
Section 2.15. Insurance. Each insurance policy (including insurance
policies and fidelity bonds relating to PBF) and bond covering the Company or
its assets, properties or employees is in full force and effect, all premiums
due and payable thereon have been paid and neither the Company nor, if the
policyholder is Parent or a Subsidiary of Parent (other than the Company), any
such policyholder has received written notice from any insurer or agent of any
-24-
intent to cancel any such insurance policy or bond, and no such insurance policy
is occurrence-based. A complete and accurate list of each such policy and bond
is set forth in Section 2.15 of the Company Disclosure Schedule.
Section 2.16. Employee Benefit Plans; ERISA.
(a) Section 2.16(a) of the Company Disclosure Schedule includes a list of
all employee benefit, compensation, bonus, incentive, deferred compensation,
capital appreciation, pension, profit sharing, retirement, option, equity or
equity-based, employment, change of control, severance, reduction-in-force,
termination pay or similar plans, programs, policies, practices, arrangements or
agreements, and all life, hospitalization, medical or other welfare or employee
benefit insurance or fringe benefit plans, programs, policies, practices,
arrangements or agreements in effect as of the date hereof that are sponsored or
maintained by the Company, Parent, Holdings or OMAM or to which the Company,
Parent, Holdings or OMAM contributes or is obligated to contribute, pay premiums
or make other payments, whether actual or contingent, with respect to or on
behalf of current or former employees of the Company (the "Plans"). Section
2.16(a) of the Company Disclosure Schedule identifies each Plan as either (i) a
Plan maintained by the Company solely for the benefit of current or former
employees of the Company or its subsidiaries ("Company Plan") or (ii) a Plan
maintained by Parent, Holdings, OMAM or any of their respective Subsidiaries
(other than the Company), but under which the Company is a participating
employer. None of the Plans is subject to the laws of any jurisdiction outside
of the United States.
(b) With respect to each Plan, the Company has delivered to Buyer a true,
correct and complete copy of each writing constituting a part of such Plan,
including without limitation all plan documents and amendments thereto, benefit
schedules, trust agreements, insurance contracts and other funding vehicles, the
most recent Form 5500 and accompanying schedules, if any, the current summary
plan description and any material modifications thereto, if any, the most recent
financial reports, if any, and the most recent determination letter from the
IRS. Except as specifically provided in the foregoing documents delivered to
Buyer, there are no amendments to any Plan that have been adopted or approved
nor has Parent, Holdings, OMAM, the Company undertaken to make any such
amendments or to adopt or approve any new Plan.
(c) The IRS has issued a favorable determination letter with respect to
each Plan that is intended to be a "qualified plan" within the meaning of
Section 401(a) of the Code ("Qualified Plans") that has not been revoked. Each
trust created under any Qualified Plan is exempt under Section 501(a) of the
Code. There are no existing circumstances nor any events that have occurred nor
any amendments to a Qualified Plan that have been adopted that are reasonably
likely to affect adversely the qualified status of any Qualified Plan or the
related trust. No Plan that is an employee pension benefit plan, as defined in
Section 3(2) of ERISA is subject to Title IV of ERISA or Section 302 of ERISA or
Section 412 or 4971 of the Code.
(d) Each Plan is in compliance in all material respects with all Applicable
Laws, including ERISA and the Code, and each Plan has been administered in all
material respects in accordance with its terms and Applicable Laws. To the
Knowledge of the Old Mutual Parties there is not now, nor do any circumstances
exist that could give rise to, any requirement for the posting of security with
respect to a Plan or the imposition of any lien on the
-25-
assets of the Company under ERISA or the Code. No Plan is, or during the six
years prior to the date hereof has been, a 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. Each Plan that is a "group
health plan" (as defined in Section 607(l) of ERISA and Section 5000(b)(1) of
the Code) has complied in all material respects with the requirements of Part 6
of Subtitle B of Title I of ERISA and of Section 4980B of the Code. No Plan
provides post-termination welfare benefits other than as required by law.
(e) All contributions required to be made to any 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 funding any Plan, for
any period through the date hereof, have been timely made or paid in full or, to
the extent not required to be made or paid on or before the date hereof, have
been fully reflected on the Company Financial Statements.
(f) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or in
conjunction with any other event) result in, cause the accelerated vesting,
funding or delivery of, or increase the amount or value of (including the
forgiveness of indebtedness), any payment or benefit to any employee, officer or
director of the Company, or result in any limitation on the right of the Company
to amend, merge, terminate or receive a reversion of assets from any Plan or
related trust. Without limiting the generality of the foregoing, no amount paid
or payable (whether in cash, in property, or in the form of benefits) by Parent,
Holdings, OMAM or the Company in connection with the transactions contemplated
hereby (either solely as a result thereof or as a result of such transactions in
conjunction with any other event) will be an "excess parachute payment" within
the meaning of Section 280G of the Code.
(g) There are no pending claims (other than claims for benefits in the
ordinary course), lawsuits, investigations by any Governmental Authority with
respect to which notice has been given to any of the Old Mutual Parties,
termination proceedings or arbitrations which have been asserted or instituted,
or to the Knowledge of the Old Mutual Parties threatened or anticipated, against
the Plans which could reasonably be expected to result in any material liability
of the Company to the Pension Benefit Guaranty Corporation, the Department of
Treasury, the Department of Labor or any Plan participant or beneficiary.
(h) Since January 1, 2001, the Company has not increased the compensation
or benefits (other than (i) regularly scheduled increases of welfare benefits
(ii) changes in individual bonus amounts and (iii) regular annual merit-based
increases in base salary, in each case in the ordinary course of business)
provided pursuant to a Plan in any material respect.
Section 2.17. Technology and Intellectual Property. All Intellectual
Property that is registered with any Governmental Authority by the Company, or
subject to an application for registration with any Governmental Authority
submitted by or on behalf of the Company, is listed in Section 2.17 of the
Company Disclosure Schedule (the "Registered IP"), which also sets forth a list
of all jurisdictions in which such Registered IP is registered or registrations
have been applied for and all registration and application numbers. All
Registered IP owned by the Company has been duly registered in, filed in or
issued by the appropriate Governmental Authority where such registration, filing
or issuance is necessary for the conduct of the business
-26-
of the Company substantially in the manner presently conducted. The Company 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 Company
substantially in the manner presently conducted, and the consummation of the
transactions contemplated hereby does not and will not materially conflict with,
materially alter, or materially impair any such ownership or rights. Neither the
Company nor Parent or any of its other Subsidiaries 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 Company or the
marketing or distribution thereof. The Company has not infringed or violated any
trademark, trade name, copyright, patent, trade secret right or other
proprietary right of others, nor, to the Knowledge of the Old Mutual Parties,
has any other Person infringed on a continuing basis any rights that the Company
has in the Intellectual Property owned by the Company, other than as would not,
individually or in the aggregate, be reasonably expected to have a Company
Material Adverse Effect. The Company owns or licenses all computer software
developed or currently used by it which is material to the conduct of its
business as currently conducted ("Computer Software") and has the right to use
such software without infringing upon the Intellectual Property rights
(including trade secrets rights) of any third party, other than as would not,
individually or in the aggregate, be reasonably expected to have a Company
Material Adverse Effect. The Company has not received notice of any claim
respecting any violation or infringement of the Computer Software by the
Company.
Section 2.18. Ownership and Use of Properties and Assets. The Company owns,
or has a license or other agreement to use (in each case with third parties that
are not Affiliates (within the meaning of the first sentence only of the
definition of "Affiliate") of the Company), all of the material assets,
properties and rights of every type and description, real, personal, tangible
and intangible, used in the conduct of, or primarily relating to, the business
of the Company. The Company does not own in fee any real property. Section 2.18
of the Company Disclosure Schedule sets forth a true and complete list of all
real property and interests in real property leased or subleased by the Company.
All buildings and all fixtures, equipment and other real or tangible property
and assets held under leases or subleases by the Company are held under valid
leases or subleases, free and clear of all Encumbrances, other than (i)
Encumbrances of carriers, warehousemen, mechanics, materialmen and other similar
persons incurred in the ordinary course of business for sums not yet delinquent
or being contested in good faith, (ii) easements, quasi-easements, licenses,
covenants, rights-of-way, rights of re-entry or other similar restrictions,
(iii) zoning, building, subdivision or other similar requirements or
restrictions, in each case which do not materially impair the use, utility or
value of the applicable property affected or encumbered thereby for the purposes
for which currently used (such Encumbrances set forth in clauses (i), (ii) and
(iii), "Permitted Encumbrances").
Section 2.19. Filing Documents. None of the information regarding the
Company or any of its Affiliates (within the meaning of the first sentence only
of the definition of "Affiliate") or PBF supplied or to be supplied by or on
behalf of the Company on or prior to the Closing Date for inclusion in any
documents to be filed with any Governmental Authority in connection with the
transactions contemplated hereby will, at the respective times such documents
are filed with any Governmental Authority, 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
-27-
make the statements therein, in light of the circumstances under which they were
made, not misleading.
Section 2.20. Environmental Matters. Other than as would not, individually
or in the aggregate, have a Company Material Adverse Effect, the Company has
complied with all applicable Environmental Laws, and the Company is not subject
to any actual or, to the Knowledge of the Old Mutual Parties, threatened
investigation, claim or liability under or relating to any Environmental Law.
Other than as would not, individually or in the aggregate, have a Company
Material Adverse Effect, to the Knowledge of the Old Mutual Parties, the
properties currently leased, subleased, operated or used by the Company
(including soils, groundwater, surface water, buildings or other structures) are
not contaminated with any Hazardous Substance, and the Company is not subject to
material liability for any Hazardous Substance disposal or contamination on any
property owned or operated or formerly owned or operated by the Company or on
any third party property or as a result of any Hazardous Substance having been
transported from any of the properties owned or operated or formerly owned or
operated by the Company.
Section 2.21. Transactions with Affiliates. Except for this Agreement and
the other agreements contemplated to be entered into in connection with the
transactions contemplated hereby, no contract, agreement, understanding or
arrangement between the Company on the one hand, and Parent or any Affiliate
(within the meaning of the first sentence only of the definition of Affiliate)
of Parent (other than the Company), on the other hand, will continue in effect
subsequent to the Closing Date. After the Closing, neither Parent nor any
Affiliate (within the meaning of the first sentence only of the definition of
Affiliate) of Parent (other than the Company) will have any interest in any
property (real or personal, tangible or intangible) or contract, agreement,
understanding or arrangement of the Company used in or pertaining to the
business of the Company. Neither Parent nor any Affiliate (within the meaning of
the first sentence only of the definition of Affiliate) of Parent (other than
the Company) provides any material services to the Company.
Section 2.22. No Broker/Dealer Operations. The Company does not conduct any
broker/dealer operations or any operations that would require the Company to be
registered as a broker-dealer with any Governmental Authority.
Section 2.23. Absence of Certain Changes. Since the date of the Company
Balance Sheet, (a) the Company has conducted its business only in the ordinary
course, consistent with past practice, and (b) there has not been (i) any
Company Material Adverse Effect or any development or combination of
developments, that, individually or in the aggregate, has had or is reasonably
likely to have a Company Material Adverse Effect; (ii) any material change by
the Company in accounting principles, practices or methods other than as
required by GAAP or Applicable Law; (iii) any declaration, setting aside or
payment of any dividend or other distribution in respect of any capital stock of
the Company; or (iv) any combination, recapitalization, redenomination of
ownership interests in the Company or other similar transaction or issuance or
authorization of any issuance of any ownership interests, or right to acquire
any ownership interests, in the Company other than the Shares.
-28-
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Except as set forth in the written disclosure schedule previously delivered
to Buyer by Holdings (the "Seller Disclosure Schedule"), Holdings represents and
warrants to Buyer as follows:
Section 3.1. Ownership of Shares. As of the date hereof, OMAM owns
beneficially and of record and has good and valid title to all of the Shares,
free and clear of any Encumbrances. Immediately prior to the Closing, Holdings
will own beneficially and of record and will have good and valid title to all of
the Shares, free and clear of any Encumbrances; and assuming Buyer has the
requisite power and authority to be the lawful owner of the Shares, upon
deliveries to Buyer at the Closing contemplated by Section 1.3(b)(i) and
delivery in full of the Initial Purchase Consideration in accordance with
Section 1.3(c)(i) hereof, good and valid title to the Shares will pass to Buyer,
free and clear of any Encumbrances.
Section 3.2. Corporate Existence and Power. Holdings is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, and has all corporate or other powers required to carry out its
responsibilities under this Agreement.
Section 3.3. Authority; No Violation.
(a) Holdings has full corporate and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby, and the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly approved by all requisite corporate action on the part of
Holdings, and no other corporate proceedings on the part of Holdings are
necessary to approve this Agreement or to authorize or consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Holdings and (assuming the due authorization,
execution and delivery of this Agreement by the other parties hereto)
constitutes a valid and binding obligation of Holdings enforceable against
Holdings in accordance with its terms. Holdings has all corporate power and
authority necessary to cause OMAM to transfer the Shares to Holdings pursuant to
Section 5.24.
(b) Neither the execution and delivery of this Agreement by Holdings nor
the consummation by Holdings of any of the transactions contemplated hereby to
be performed by it, nor compliance by Holdings with any of the terms or
provisions hereof, nor the transfer of the Shares to Holdings contemplated by
Section 5.24, will (i) violate any provision of the articles of incorporation,
charter or bylaws or comparable organizational documents, as applicable, of
Holdings or OMAM or (ii) assuming that the consents and approvals referred to in
Section 2.4 are duly obtained, (x) violate, conflict with or require any notice,
filing, consent, waiver or approval under any Applicable Law to which Holdings,
OMAM or Parent or any of their respective properties, contracts or other assets
are subject or (y) violate, conflict with, result in a breach of any provision
of or the loss of any benefit under, constitute a default (or an event which,
with or without notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or cancellation
under, accelerate or result in a right of acceleration of the performance
required by, result in the creation of any Encumbrance upon
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the properties, contracts or other assets of Holdings or OMAM under, or require
any notice, approval, waiver or consent under, any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Holdings or OMAM is a party, or by which Holdings or OMAM or
any of its properties or assets, may be bound or affected, other than, in the
case of clauses (x) and (y), any such items that would not be reasonably likely,
individually or in the aggregate, to have a Company Material Adverse Effect or
to prevent or materially delay the consummation of the Transaction or any of the
other transactions contemplated by this Agreement.
Section 3.4. Consents and Approvals. Except for consents, approvals and
notices referred to in Section 2.4 and those the failure of which to obtain or
make would not reasonably be expected, individually or in the aggregate, to
prevent or materially delay the consummation of the Transaction, no consents or
approvals of or filings or registrations with any Governmental Authority or any
third party are necessary in connection with (i) the execution and delivery by
Holdings of this Agreement and (ii) the consummation by Holdings of the
transactions as contemplated hereby.
Section 3.5. No Broker. No broker, finder or similar intermediary has acted
for or on behalf of, or is entitled to any broker's, finder's or similar fee or
other commission from, Holdings, OMAM or the Company or any of their Affiliates
in connection with this Agreement or the transactions contemplated hereby.
Section 3.6. Legal Proceedings. There are no Proceedings that are pending
or, to the Knowledge of Holdings, threatened against or relating to Parent or
any of its Subsidiaries (other than the Company) and affecting the properties,
assets or businesses of the Company that would reasonably be expected,
individually or in the aggregate, to have a material adverse effect on the
ability of Holdings to timely complete the transactions contemplated hereby or
timely perform its obligations hereunder or that challenge the validity or
propriety of the transactions contemplated by this Agreement, and there is no
injunction, order, judgment, decrees, or regulatory restrictions imposed upon
Parent or any of its Subsidiaries (other than the Company) that would be
reasonably expected, individually or in the aggregate, to have a material
adverse effect on the ability of Holdings to timely complete the transactions
contemplated hereby or timely perform its obligations hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth in the written disclosure schedule previously delivered
to Holdings and the Company by Buyer (the "Buyer Disclosure Schedule"), Buyer
represents and warrants to Holdings and the Company as follows:
Section 4.1. Organization and Related Matters. Buyer is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has the corporate power and authority to carry on its business
as it is now being conducted and to own, lease and operate all of its properties
and assets.
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Section 4.2. Authority; No Violation.
(a) Buyer has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Buyer, and no other corporate action on the part
of Buyer is necessary to approve this Agreement or authorize or consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Buyer and (assuming the due authorization, execution
and delivery of this Agreement by each of the Old Mutual Parties) constitutes a
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms.
(b) Neither the execution and delivery of this Agreement by Buyer nor the
consummation by Buyer of the transactions contemplated hereby to be performed by
it, nor compliance by Buyer with any of the terms or provisions hereof, will (i)
violate any provision of the certificate of incorporation or bylaws of Buyer,
(ii) assuming that the consents and approvals referred to in Section 4.3 are
duly obtained, (x) violate, conflict with or require any notice, filing, consent
or approval under any Applicable Law to which Buyer or any of its Subsidiaries
or any of its properties, contracts or other assets are subject, or (y) violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with or without notice or lapse
of time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate or result in a
right of acceleration of the performance required by, result in the creation of
any Encumbrance upon the properties, contracts or other assets of Buyer under,
or require any notice, approval or consent under, any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Buyer or any of its Subsidiaries is a party, or by which
Buyer or any of its Subsidiaries, or any of its or their properties or assets,
may be bound or affected, other than, in the case of clauses (x) and (y), any
such items that would not be reasonably likely, individually or in the
aggregate, to have a material adverse effect on the ability of Buyer to timely
complete the transactions contemplated hereby or timely perform its obligations
hereunder or to prevent or materially delay the consummation of the Transaction
or any of the other transactions contemplated by this Agreement.
Section 4.3. Consents and Approvals. Except for (i) consents, approvals and
notices as are set forth in Section 4.3 of the Buyer Disclosure Schedule, (ii)
the applicable filings under the HSR Act, (iii) compliance with and filings
under the U.S. federal Securities Laws as may be required in connection with
this Agreement and the transactions contemplated hereby, (iv) those consents,
approvals and notices that may be required solely by reason of the participation
of the Old Mutual Parties (as opposed to any other third party) in the
Transaction and other transactions contemplated hereby and (v) those the failure
of which to obtain or make would not reasonably be expected, individually or in
the aggregate, to prevent or materially delay the consummation of the
Transaction, no consents or approvals of or filings or registrations with any
Governmental Authority or any third party are necessary in connection with (x)
the execution and delivery by Buyer of this Agreement and (y) the consummation
by Buyer of the transactions as contemplated hereby.
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Section 4.4. Legal Proceedings. There are no Proceedings that are pending
or, to the Knowledge of Buyer, threatened against or relating to Buyer or any of
its Subsidiaries that would reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the ability of Buyer to timely
complete the transactions contemplated hereby or timely perform its obligations
hereunder or that challenge the validity or propriety of the transactions
contemplated by this Agreement, and there is no injunction, order, judgment,
decree, or regulatory restriction imposed upon Buyer or any of its Subsidiaries
that would reasonably be expected, individually or in the aggregate, to have a
material adverse effect on the ability of Buyer to timely complete the
transactions contemplated hereby or timely perform its obligations hereunder.
Section 4.5. No Other Broker. Other than ▇▇▇▇▇▇ ▇▇▇▇▇▇ Securities Inc., the
fees and expenses of which will be paid by Buyer, no broker, finder or similar
intermediary has acted for or on behalf of, or is entitled to any broker's,
finder's or similar fee or other commission from, Buyer or any of its Affiliates
in connection with this Agreement or the transactions contemplated hereby.
Section 4.6. Section 15 of the Investment Company Act. Neither Buyer nor
any of its Subsidiaries has any express or implied understanding or arrangement
which would impose an "unfair burden" (as such term is used in Section 15(f) of
the Investment Company Act) on any of the Funds or would in any way violate
Section 15(f) of the Investment Company Act, as a result of the transactions
contemplated hereby.
Section 4.7. Investment Purpose. Buyer is acquiring the Shares for the
purpose of investment and not with a view to, or for offer or sale in connection
with, any public distribution thereof in violation of the registration
requirements of the Securities Act. Buyer has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of its purchase of the Shares and has been provided access to personnel
and books of the Company and an opportunity to meet and ask questions of
representatives of the Company and Holdings for purposes of making its
evaluation. Notwithstanding the foregoing, no investigation made by or on behalf
of Buyer shall in any way affect any representations, warranties, covenants or
agreements made by any of the Old Mutual Parties pursuant to this Agreement.
Section 4.8. Cash Consideration. Buyer will as of the Closing have
sufficient cash available to it to pay the Initial Purchase Consideration and,
as and when due hereunder, the payment of any Adjustment Amount and of any
Revenue Run-Rate Adjustment Payment.
ARTICLE V COVENANTS
Section 5.1. Conduct of Business by the Company. During the period from the
date of this Agreement and continuing through the Closing Date, except as
expressly contemplated or permitted by this Agreement, including as set forth in
Section 5.1 of the Company Disclosure Schedule, or with the prior written
consent of Buyer, the Company shall (subject to Applicable Law) (a) carry on its
business in the ordinary course consistent with past practice; (b) use
commercially reasonable efforts to preserve its present business organization
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and relationships; (c) use commercially reasonable efforts to keep available the
present services of its employees; and (d) use commercially reasonable efforts
to preserve its rights, franchises, goodwill and relations with its customers
and others with whom it conducts business. Without limiting the generality of
the foregoing, except as expressly permitted or required by this Agreement or as
expressly set forth in Section 5.1 of the Company Disclosure Schedule or
consented to in writing by Buyer, the Company shall not directly or indirectly:
(i) amend or agree to amend the Company Charter or the Company's
bylaws, or merge with or into or consolidate with, or agree to merge with
or into or consolidate with, any other Person, subdivide or in any way
reclassify any of its capital stock, or change or agree to change in any
manner the rights of its capital stock or liquidate or dissolve;
(ii) (x) issue, sell, redeem or acquire any capital stock or any other
ownership interest in the Company or create any Subsidiaries; (y) issue,
sell or grant any option, warrant, convertible or exchangeable security,
right, "phantom" partnership (or other ownership) interest (or similar
"phantom" security), restricted partnership (or other ownership) interest,
subscription, call, unsatisfied pre-emptive right or other agreement or
right of any kind to purchase or otherwise acquire (including by exchange
or conversion) any of its capital stock or any other ownership interests;
or (z) enter into any contracts, agreements or arrangements to issue,
redeem, acquire or sell any of its capital stock or any other ownership
interests;
(iii) incur any long-term indebtedness;
(iv) incur any indebtedness for borrowed money or guarantee the
indebtedness of other Persons;
(v) (w) make any change in its accounting methods or practices for Tax
or accounting purposes, (x) make any change in depreciation or amortization
policies or rates adopted by it for Tax or accounting purposes, (y) make
any Tax election or (z) settle or compromise any Tax liability, except in
the case of any such liability to the extent accrued or reserved for on the
Company Balance Sheet, in each case if, as it relates to Taxes only (as
opposed to accounting), doing so could reasonably be expected to adversely
affect Buyer, any Affiliate of Buyer or, following the Closing, the
Company;
(vi) make any loan or advance to any of its Affiliates, officers,
directors, employees, consultants, agents or other representatives (other
than reasonable and customary travel advances made in the ordinary course
of business consistent with past practice) or to Parent or any of its
Subsidiaries (other than the Company) or their respective officers,
directors, employees, consultants, agents or representatives;
(vii) sell, transfer, lease, offer to sell, abandon or make any other
disposition of any of its assets except in the ordinary course of business
not in excess of $50,000 in the aggregate, or grant or suffer to exist, or
agree to grant or suffer to exist, any Encumbrance (other than Permitted
Encumbrances) on any material amount of its assets;
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(viii) incur, assume or guarantee, or agree to incur, assume or
guarantee, any liability or obligation (whether or not currently due and
payable) relating to its business or any of its assets except in the
ordinary course of business consistent with past practice in amounts not in
excess of $50,000 in the aggregate;
(ix) settle any Proceeding involving any liability for money damages
in excess of $50,000 in the aggregate or any restrictions upon any of its
operations;
(x) create, renew, amend, terminate or cancel, any Contract other than
in the ordinary course of business consistent with past practice; provided,
that the Company may not enter into any contracts or agreements that
include any non-competition or non-solicitation covenant or any exclusive
dealing or similar arrangement that limits the ability of the Company or,
following the Closing, Buyer or any of its Affiliates to compete
(geographically or otherwise) in any line of business;
(xi) enter into, or agree to enter into, any contract, agreement or
arrangement or any financial transaction with any of its officers,
directors, consultants, agents or representatives, Affiliates or the Funds
or with Parent or any of its Subsidiaries or their respective officers,
directors, consultants, agents or representatives, except (x) in the case
of Funds, pursuant to Investment Company Advisory Agreements existing and
in effect on the date hereof or rules or exemptive orders under the
Investment Company Act and (y) in the case of consultants, pursuant to
contracts existing and in effect on the date hereof;
(xii) declare or make any dividends or declare or make any other
distributions of any kind, other than dividends or distributions made in
accordance with Section 5.21;
(xiii) acquire or agree to acquire in any manner, including by way of
merger, consolidation, or purchase of an equity interest or assets, any
business of any Person or other business organization or division thereof;
(xiv) enter into, amend, modify, terminate or renew any Plan,
collective bargaining agreement or other contract with any labor
organization, or other written employment, consulting, severance or similar
agreements or arrangements with any officers or employees of the Company,
or grant any salary or wage increase or increase in severance or
termination pay or increase any employee benefit or hire any new employee
for a senior management position, except (x) reasonable and customary
individual increases in compensation to non-officer employees in the
ordinary course of business consistent with past practice, (y) changes that
are required by Applicable Law and (z) to satisfy contractual commitments
existing as of the date hereof and disclosed in Section 2.16(a) of the
Company Disclosure Schedule;
(xv) take any action to accelerate any material rights or benefits, or
make any material determinations relating to the transactions contemplated
hereby or otherwise not in the ordinary course of business consistent with
past practice, under any collective
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bargaining agreement or Plan including any employment, indemnification,
severance or termination agreement;
(xvi) except as and to the extent required, based on the written
advice of counsel, in the exercise of the fiduciary obligations of the
Company, in the case of any Fund, request that any action be taken by any
of the Fund Boards, other than as contemplated by this Agreement and other
than routine actions taken in the ordinary course of business, consistent
with past practice that would not materially adversely affect the Company
or such Fund;
(xvii) voluntarily divest itself of management of any Fund or Client,
where assets under management at the time of divestiture would not in the
aggregate for all such divestitures exceed $5,000,000;
(xviii) accelerate the billing or other realizations of advisory or
performance fees payable by Funds or Clients to the Company or delay the
payment of liabilities beyond the ordinary course of business consistent
with past practice;
(xix) make or incur any capital expenditures in excess of $50,000 in
the aggregate other than those that have been approved in writing or
budgeted as of the date hereof and disclosed in writing to Buyer prior to
the execution of this Agreement;
(xx) cancel any indebtedness or waive any claims or rights in amounts
in excess of $50,000 in the aggregate;
(xxi) enter into any lease of real property, except any renewals of
existing leases in the ordinary course of business and consistent with past
practice, with respect to which Buyer shall have the right to participate;
or
(xxii) authorize, commit or agree (by contract or otherwise) to do any
of the foregoing.
Section 5.2. Section 15 of the Investment Company Act: Company Covenants.
(a) Each of the Old Mutual Parties will, and Holdings will cause OMAM to,
use its commercially reasonable efforts to obtain, and to cause the Funds to
obtain, as promptly as practicable, the approval of the Fund Boards and the
shareholders of each Fund, if and to the extent such approval is required
pursuant to the provisions of Section 15 of the Investment Company Act
applicable thereto, of a new Investment Company Advisory Agreement for such Fund
with the Company serving as adviser or subadviser, such agreement having the
same advisory fees in effect as of the date hereof and becoming effective upon
the Closing, and which agreement will otherwise be substantially on the same
terms as currently in effect.
(b) Buyer shall cooperate with the Old Mutual Parties, including without
limitation making management representatives available, to the extent reasonably
requested by the Old Mutual Parties, in connection with obtaining the consents
and approvals described in this Section 5.2.
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Section 5.3. Non-Investment Company Advisory Agreement Consents. As soon as
reasonably practicable following the date hereof, the Company shall send notices
complying with Applicable Law (each a "Notice"), informing its Clients of the
transactions contemplated by this Agreement and requesting the written consent
or approval of the assignment or deemed assignment if Client consent to such
assignment or deemed assignment is required by Applicable Law or is required
under the respective Non-Investment Company Advisory Agreement for such
assignment or deemed assignment resulting from the Transaction. Buyer agrees
that consent for any Non-Investment Company Advisory Agreement to the assignment
or deemed assignment resulting from the Transaction shall be deemed given for
all purposes hereunder (i) if no consent is required under Applicable Law or the
respective Non-Investment Company Advisory Agreements, (ii) upon receipt of the
written consent requested in the Notice or (iii) to the extent permissible under
Applicable Law and if no consent is required under the applicable Non-Investment
Company Advisory Agreement, if forty-five (45) days shall have passed since the
sending of written notice ("Negative Consent Notice") to a Client (which
Negative Consent Notice may be included in the Notice) requesting written
consent as aforesaid and informing such Client: (a) of the intention to complete
the Transaction, which will result in a deemed assignment of such Non-Investment
Company Advisory Agreement; (b) of the Company's intention to continue to
provide the advisory services pursuant to the existing Non-Investment Company
Advisory Agreement with such Client after the Closing if such Client does not
terminate such agreement prior to 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 Negative Consent Notice without termination (provided, that such
Client shall not have affirmatively stated to any Old Mutual Party or OMAM that
it does not so consent or terminated its respective Non-Investment Company
Advisory Agreement prior to the Closing). Buyer shall be provided a reasonable
opportunity to review all such consent materials to be used by the Company prior
to distribution, and such materials shall be in form and substance reasonably
satisfactory to Buyer and Holdings. The Old Mutual Parties shall provide to
Buyer copies of any and all substantive correspondence between any of them or
OMAM and Clients or representatives or counsel of such Clients relating to any
consent solicitation.
Section 5.4. Insurance. The Old Mutual Parties will, and Holdings will
cause OMAM to, use their commercially reasonable efforts to maintain in effect
and to pay all premiums due thereon, for the period ending on the Closing Date
until the Closing Date with respect to insurance policies and fidelity bonds
covering the Company (including insurance policies and fidelity bonds relating
to the Company, its assets and employees) on the date hereof or to procure
comparable replacement policies and bonds (or such replacement coverage as is
obtainable on a commercially reasonable basis) and maintain such policies and
bonds in effect until the Closing.
Section 5.5. Section 15 of the Investment Company Act: Buyer's Covenants.
Buyer shall use its best efforts to assure compliance with the conditions of
Section 15(f) of the Investment Company Act with respect to PBF. Without
limiting the foregoing, Buyer agrees that: (i) for a period of not less than
three years after the date of consummation of the PBF Reorganization, Buyer
shall use its best efforts to assure that no more than 25% of the members of the
Fund Board of the Reorganized Fund shall be "interested persons" (as defined for
purposes of Section 15(f)(1)(A) of the Investment Company Act) of Buyer (or such
other entity
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that is an Affiliate of Buyer that acts as adviser or subadviser to the
Reorganized Fund); and (ii) neither Buyer nor any of its Affiliates, for a
period of at least two years after the date of the consummation of the PBF
Reorganization, shall have any express or implied understanding, arrangement or
intention to impose an "unfair burden" (as such term is used in Section 15(f) of
the Investment Company Act) on PBF as a result of the transactions contemplated
herein. Notwithstanding anything to the contrary contained herein, the covenants
of Buyer contained in this Section 5.5 are intended only for the benefit of the
parties hereto. Buyer shall notify and discuss with the board of trustees of the
Reorganized Fund the requirements of Section 15(f) of the Investment Company Act
as they apply to the Reorganized Fund.
Section 5.6. Employees, Employee Benefits.
(a) Following the Closing Date, Buyer shall cause the Company to provide
insurance coverage under welfare benefit plans to the employees of the Company
as of the Closing (the "Company Employees") that is substantially comparable in
the aggregate to the insurance coverage currently provided to such employees
under the welfare benefit plans of the Company. Following the Closing Date, the
Company Employees shall be eligible to become participants in the Buyer 401(k)
and Profit Sharing Plan (the "Buyer Qualified Plan") and the Buyer Scholarship
Plan, in each case, in accordance with their terms as in effect from time to
time. Except as expressly provided in the prior sentence or as otherwise agreed
upon by the Company and the Buyer, the Company Employees shall not be eligible
to participate in the employee benefit or compensation plans, programs or
arrangements of Buyer.
(b) From and after the Closing Date, with respect to any group health plans
under which the Company Employees are eligible to receive benefits, Buyer will,
or will cause the Company to, (i) cause any pre-existing conditions or
limitations and eligibility waiting periods (to the extent such limitations or
waiting periods did not apply to a Company Employee under the comparable plans
of the Company) to be waived with respect to a the Company Employee and their
eligible dependents and (ii) give each Company Employee credit, for the plan
year in which the Company Employee becomes eligible to receive benefits under
such plans, towards applicable deductibles and annual out-of-pocket limits for
expenses incurred prior to the time of such eligibility. Solely for purposes of
the vesting of benefits under the Buyer Qualified Plan, each Company Employee
shall receive service credit for employment with the Company (or its
predecessor), to the same extent such service was recognized by the OMAM for
such purpose under the tax-qualified defined contribution plan in which the
Company Employees were eligible to participate immediately prior to the Closing.
For purposes of eligibility to participate in the Buyer Scholarship Plan, each
Company Employee shall receive service credit for employment with the Company
(or its predecessor).
(c) Buyer shall permit each Company Employee who is a participant in the
United Asset Management Corporation Profit Sharing and 401(k) Plan (the
"Holdings Plan"), and who elects to transfer his or her account balance under
the Holdings Plan, to roll over his or her account balance (including any
outstanding loans thereunder) to the Buyer Qualified Plan, as soon as
practicable following the Closing in accordance with the terms of the Buyer
Qualified Plan. Holdings agrees to use and to cause OMAM to use its best efforts
to cooperate with Buyer, its agents and designees to ensure a smooth transfer of
accounts, records and recordkeeping to effect the transfers described in the
previous sentence. Holdings further agrees to take and to
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cause OMAM to take such actions as are necessary, including securing the
cooperation of the recordkeeper, trustee and other service providers of Holdings
Plan, to effect such transfers.
(d) Nothing in this Agreement, express or implied, shall be construed to
prevent Buyer from terminating, amending or modifying to any extent or in any
respect at any time or from time to time (i) Buyer's employment relationship
with any employee, including any Company Employee, (ii) the terms and conditions
of the employment of any employee, including the Company Employees, (iii) any of
the Company Plans or (iv) any of the Buyer's employee benefit plans, including
the Buyer Qualified Plan and the Buyer Scholarship Plan. Nothing in this Section
5.6 shall be construed to provide a contract of employment, or to provide any
other promise of future employment or benefits, to the Company Employees.
Section 5.7. Further Assurances. Each party to this Agreement shall execute
such documents and other papers and perform such further acts as may be
reasonably required to carry out the provisions hereof and the transactions
contemplated hereby. Upon the request of Buyer, the Old Mutual Parties shall,
Holdings shall cause OMAM to, and Holdings shall use its reasonable best efforts
to cause the other Holdings Controlled Affiliates to, promptly execute and
deliver such further instruments of assignment, transfer, conveyance,
endorsement, direction or authorization and other documents as Buyer may
reasonably request to effectuate the purposes of this Agreement (it being
understood and agreed that any such instruments and other documents shall not
provide for any representations or warranties or covenants that are not
expressly contemplated by or expressly provided for in this Agreement). This
Section 5.7 shall not apply to PBF, which is subject to the provisions of
Section 5.19.
Section 5.8. Efforts of Parties to Close. Subject to Section 5.11, during
the period from the date of this Agreement through the Closing Date, each party
hereto shall use its commercially reasonable efforts to fulfill or obtain the
fulfillment of the conditions precedent to the consummation of the transactions
contemplated hereby, including the execution and delivery of any documents,
certificates, instruments or other papers that are reasonably required for the
consummation of the transactions contemplated hereby. During the period from the
date of this Agreement and continuing through the Closing, except as required by
Applicable Law or with the prior written consent of Buyer, in the case of any of
the Old Mutual Parties, or Holdings, in the case of Buyer, no party to this
Agreement shall knowingly take any action which, or knowingly fail to take any
action the failure of which to be taken, would, or could reasonably be expected
to: (i) result in any of the representations and warranties set forth in this
Agreement on the part of the party taking or failing to take such action being
or becoming untrue in any material respect; (ii) result in any conditions to the
Closing set forth in Article VI not being satisfied; or (iii) result in any
material violation of one or more provisions of this Agreement.
Section 5.9. Confidentiality and Announcements.
(a) The parties agree to be bound by and comply with the provisions set
forth in the Confidentiality Agreement, the provisions of which are hereby
incorporated herein by reference; provided, however, that effective upon the
Closing, Buyer's obligations under the Confidentiality Agreement shall terminate
with respect to information to the extent relating to the Company or its
business or operations and with respect to disclosure relating to the
transactions contemplated hereby.
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(b) For a period of four years from and after the Closing, Holdings shall,
and shall cause OMAM and the Centralized Entities and its and their respective
officers, directors, employees and advisors (other than any directors of OMAM or
Holdings who are not officers or employees of Holdings, OMAM or any Centralized
Entity) (each a "Restricted Person") to, keep confidential and not use for its
benefit or for the benefit of any other Person, and will not disclose to any
other Person, any and all Restricted Information. For the avoidance of doubt,
there shall be no restriction on the use or disclosure by Holdings, OMAM and the
Centralized Entities or their respective officers, directors, employees and
advisors of information described in clause (iii) of the second sentence of the
definition of Restricted Information. Holdings shall be liable hereunder for any
failure by any Restricted Person to comply with this Section 5.9(b); provided,
however, that Holdings shall not be liable under this Section 5.9(b) with
respect to any disclosure of Restricted Information to the extent such
disclosure is (i) compelled by legal process (by interrogatories, subpoena,
civil investigative demand or similar process) so long as the last sentence of
this Section 5.9(b) has been complied with or (ii) in the opinion of its
counsel, required by Applicable Law (including without limitation the Securities
Act, the Exchange Act or any U.S. national or foreign stock exchange). Prior to
making any disclosure of Restricted Information otherwise permitted pursuant to
clause (i) of the proviso to the first sentence of this Section 5.9(b), the
Restricted Person proposing to make such disclosure shall provide the Company
with prompt written notice of the legal process requiring such disclosure so
that the Company may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Section 5.9(b). If, in the absence
of a protective order or other remedy or the receipt of a waiver made by the
Company, the Restricted Person is nonetheless, in the opinion of its counsel,
legally compelled to disclose Restricted Information to any tribunal or else
stand liable for contempt or suffer other censure or penalty, the Restricted
Person may, without liability on the part of Holdings hereunder, disclose to
such tribunal only that portion of such information which such counsel advises
the Restricted Person is legally required to be disclosed, provided that the
Restricted Person exercises its reasonable best efforts to preserve the
confidentiality of such information, including by cooperating with the Company
to obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded such information by such tribunal. The
parties acknowledge that the Company and Buyer, on the one hand, and Holdings
and its Affiliates (within the meaning of the first sentence only of the
definition of "Affiliate"), on the other hand, will compete following the
Closing.
(c) Subject to Sections 5.11(a) and (b), prior to the Closing the parties
to this Agreement shall consult with each other as to the form, substance and
timing of any press release or other public disclosure related to this Agreement
or the transactions contemplated hereby and no such press release or other
public disclosure shall be made without the consent of the other parties, which
consent shall not be unreasonably withheld or delayed; provided, however, that
the parties may make such disclosure to the extent required by Applicable Law or
the applicable rules of the African Exchanges, based on advice of counsel, after
making all reasonable best efforts under the circumstances to consult with each
other prior to such disclosure.
Section 5.10. Access; Certain Communications. Between the date of this
Agreement and the Closing Date, to the extent not prohibited by Applicable Laws
relating to the exchange of information, each of the Old Mutual Parties shall,
and Holdings shall cause OMAM to, afford to Buyer and its authorized agents and
representatives access, upon reasonable notice
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and during normal business hours, to all properties of, and all contracts,
documents and information of or relating to the assets, liabilities, business,
customers, Funds, Clients, employees, operations, personnel and other aspects of
the business of, and all personnel of, the Company; provided, however, that such
access shall be conducted in a manner which does not unreasonably interfere with
the Old Mutual Parties' normal operations, customers, and employee relations;
and provided further, that Holdings and OMAM shall be required to provide access
to information regarding Funds, Clients and customers of the Company only to the
extent such information relates to the Company or the Company's business or, in
the case of PBF, the transactions contemplated hereby.
Section 5.11. Regulatory Matters; Third Party Consents.
(a) The parties to this Agreement shall cooperate with each other and use
their commercially reasonable efforts to promptly prepare and file (on a
confidential basis if reasonably requested by the other parties) all necessary
documentation, to effect (on a confidential basis if reasonably requested by the
other parties) all applications, notices, petitions and filings, and to obtain
as promptly as practicable all permits, consents, approvals, waivers and
authorizations of all third parties and Governmental Authorities that are
necessary or advisable to timely consummate the transactions contemplated by
this Agreement, including any filing to be made under the HSR Act, which filings
shall be made as promptly as reasonably practicable (and in no event later than
30 days of the date of this Agreement), and requests for required consents under
the Contracts (provided that efforts to obtain Client and Fund consents are
covered in Sections 5.2 and 5.3). Buyer and the Company agree to take all
reasonable steps necessary to satisfy any conditions or requirements imposed by
any Governmental Authority in connection with the consummation of the
transactions contemplated by this Agreement, other than those conditions or
requirements, in the aggregate, the satisfaction of which are reasonably likely
to result in either a Company Material Adverse Effect or a material adverse
effect on the ability of Buyer to timely consummate the Transaction pursuant to
the terms hereof or a material adverse effect on the business, assets,
liabilities, financial condition or results of operations of Buyer and its
Subsidiaries, taken as a whole. The parties to this Agreement will have the
right to review in advance, and will consult with the other parties on, all the
information relating to Buyer or the Company, as the case may be, that appears
in any filing made with, or written materials submitted to, any third party or
any Governmental Authority in connection with the transactions contemplated by
this Agreement. The parties to this Agreement agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Authorities necessary or
advisable to consummate the transactions contemplated by this Agreement and that
each party will keep the other parties apprised in a timely manner of the status
of matters relating to completion of the transactions contemplated herein. Each
of the parties hereto agrees that none of the information regarding it or any of
its Affiliates (within the meaning of the first sentence only of the definition
of "Affiliate") supplied or to be supplied by it or to be supplied on its behalf
specifically for inclusion in any documents to be filed with any Governmental
Authority in connection with the transactions contemplated hereby will, at the
respective times such documents are filed with any Governmental Authority,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
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(b) Each of the parties to this Agreement shall promptly advise each other
upon receiving any communication relating to the transactions contemplated by
this Agreement or otherwise materially affecting its ability to timely
consummate the Transaction pursuant to the terms hereof from any Governmental
Authority whose consent or approval is required for consummation of the
transactions contemplated by this Agreement.
Section 5.12. Notification of Certain Matters. Each party to this Agreement
shall give prompt notice to the other parties, to the extent Known by such
party, of (i) the occurrence, or failure to occur, of any event or existence of
any condition that has caused or could reasonably be expected to cause any of
its representations or warranties contained in this Agreement to be untrue or
inaccurate in any material respect at any time after the date of this Agreement,
up to and including the Closing Date, (ii) the occurrence of any matter or event
that would reasonably be expected to have a Company Material Adverse Effect,
(iii) any failure on its part to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement, (iv) any notice or other communication from any
Person alleging that the consent of such Person is or may be required in
connection with the consummation of the Transaction, and (v) any lawsuit, action
or proceeding pending or, to the applicable party's Knowledge, threatened
against the party or the parties relating to the Transaction; provided, however,
that no party shall have any liability for breach of this Section 5.12 except to
the extent that another party has been actually prejudiced by such breach.
Section 5.13. Expenses. Except as expressly provided otherwise in this
Agreement (including without limitation Sections 1.4, 5.19 and 8.10), the
parties shall each bear their respective direct and indirect expenses incurred
in connection with the negotiation and preparation of this Agreement and the
consummation of the transactions contemplated hereby; provided that any amounts
relating to any financial advisor, legal, accounting or other transaction fees
incurred by the Company or any of its Affiliates in connection with this
Agreement and the transactions contemplated herein (other than amounts relating
to counsel to the members of management of the Company in connection with the
preparation and negotiation of the Employment Agreements, the LLC Agreement or
other employment agreements between the applicable employee of the Company, on
the one hand, and Buyer and/or its Subsidiaries (including, following the
Closing, the Company and its successor), on the other hand, in connection with
the Transaction) shall be paid prior to the Closing or shall be fully accrued on
the Adjustment Amount Documents. Each of Buyer and Holdings shall share equally
all the costs and expenses of preparing, printing and mailing the proxy
statements and related solicitation documents and other expenses relating to
obtaining the approvals contemplated by Sections 5.2 and 5.3.
Section 5.14. Third Party Proposals. None of the Old Mutual Parties shall,
nor shall they permit any of their respective Subsidiaries, officers, directors,
employees, representatives or agents, including any investment banker, attorney
or accountant engaged by any of them, to, directly or indirectly solicit,
encourage or facilitate inquiries or proposals, or enter into any agreement,
with respect to, or initiate or participate in any negotiations or discussions
with any Person concerning, any acquisition or purchase of all or a substantial
portion of the assets of, or of any equity interest or capital stock in, the
Company, or any merger or business combination with the Company, or except as
may otherwise be permitted by Section 5.2, 5.3 or 5.19, any voluntary assignment
of any investment advisory, subadvisory,
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administrative or distribution agreements of the Company, in each case other
than in respect of the Transaction (each, an "Acquisition Proposal"; provided,
however, that an Acquisition Proposal shall not include any changes in the
arrangements with the Funds other than PBF), or furnish any information to any
Person contacting them or making an inquiry with respect to a potential
Acquisition Proposal; it being understood and agreed that the term "Acquisition
Proposal" shall not include any acquisition or purchase of any of the assets of,
or equity interests in, Holdings or OMAM (other than assets of, or equity
interests in, the Company), or any merger or business combination between
Holdings or OMAM and any third party. The Old Mutual Parties shall notify Buyer
within 48 hours (but not less than one Business Day), if any Acquisition
Proposal (including the terms thereof) is received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated with, any of the Old Mutual Parties, any of their respective
Subsidiaries, officers, directors, employees, representatives or agents,
including any investment banker, attorney or accountant engaged by any of them.
It is understood that any violation of the restrictions set forth in this
Section 5.14 by any executive officer of any of the Old Mutual Parties or any
investment banker, attorney or other advisor or representative of the Old Mutual
Parties, shall be deemed to be a breach of this Section 5.14 by the Old Mutual
Parties. The Old Mutual Parties shall, and shall cause their respective
Subsidiaries, officers, directors, employees, representatives and advisors to,
immediately cease or cause to be terminated any existing activities, including
discussions or negotiations with any parties, conducted prior to the date hereof
with respect to any Acquisition Proposal and shall seek to have all materials
distributed to Persons in connection therewith by the Old Mutual Parties or any
of their respective Subsidiaries, officers, directors, employees,
representatives or advisors returned to the Company promptly or destroyed. None
of the Old Mutual Parties or any of their respective Subsidiaries, officers,
directors, employees, representatives or agents, including any investment
banker, attorney or accountant engaged by any of them, shall amend, modify,
waive or terminate, or otherwise release any Person from, any standstill,
confidentiality or similar agreement or arrangement currently in effect in
relation to an Acquisition Proposal. The Old Mutual Parties shall cause their
respective officers, directors, agents, advisors and Subsidiaries to comply with
the provisions of this Section 5.14.
Section 5.15. Employee Payments.
(a) Immediately prior to the Closing, the Company shall pay to certain of
its employees an aggregate amount (the "Accrued Bonus Pool Amount") equal to (i)
the Company's 30% profit sharing bonus pool for the period from January 1, 2002
through the month-end prior to the Closing Date, plus (ii) the Stub-Period
Amount (as defined below), such Accrued Bonus Pool Amount to be calculated in
accordance with Exhibit 5.15(a), with the allocation of such Accrued Bonus Pool
Amount to be determined by the Board of Directors of the Company with the
consent (not to be unreasonably withheld or delayed) of Holdings.
For purposes of this Agreement, the "Stub-Period Amount" means an amount
equal to 30% of the product of: (1) an amount equal to (x) the Adjusted Prior
Quarter End Revenue Run-Rate (as defined below) divided by twelve (12), minus
(y) the Company's average monthly expenses for the period from January 1, 2002
through the month-end prior to the Closing, and (2) a fraction, the numerator of
which is the number of days that have elapsed after the month-end prior to the
Closing Date (but not including the Closing Date) and the denominator of which
is the number of days in the month in which the Closing occurs.
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For purposes of the foregoing, the "Adjusted Prior Quarter End Revenue
Run-Rate" means the aggregate annualized investment advisory, investment
management and subadvisory fees payable to the Company from: (i) all Clients and
Funds (including Wrap Account Programs and PBF) as of the last Business Day of
the calendar quarter-end prior to the Closing (the "Quarter End Date"),
determined by multiplying (A) the amount of assets under management by the
Company for each such Client and Fund as of such Quarter End Date, by (B) the
applicable fee rate (net of any Fee Reductions) for each such Client or Fund as
of such Quarter End Date (excluding any performance based-fees); plus (ii) any
new account of any Client or Fund (other than Wrap Account Programs) obtained
after the Quarter End Date, as of the month-end prior to the Closing (the "Month
End Date"), determined by multiplying (A) the opening account balance of each
such new account, by (B) the applicable fee rate (net of any Fee Reductions) for
each such new account as of the date upon which the Company commenced management
of such new account (excluding any performance based-fees); minus (iii) any
account of any Client or Fund (other than Wrap Account Programs) terminated
after the Quarter End Date, as of the month-end prior to the Closing (the "Month
End Date"), determined by multiplying (A) the amount of assets under management
by the Company for each such terminated account as of such Quarter End Date, by
(B) the applicable fee rate (net of any Fee Reductions) for each such terminated
account as of such Quarter End Date (excluding any performance based-fees).
(b) Immediately prior to the Closing, the Company shall make payments to
the employees of the Company in the amounts set forth on Exhibit 5.15(b).
Section 5.16. Information in Proxy Materials of PBF; Filing Documents.
Buyer, on the one hand, and the Old Mutual Parties, on the other hand, agree
that the information and data that is or will be provided by or on behalf of
such party specifically for inclusion in (i) the report pursuant to Section 15
of the Investment Company Act and (ii) the proxy materials to be furnished to
shareholders of PBF or of any other Fund to the extent shareholder approval is
required under Applicable Law or the applicable Investment Company Advisory
Agreement for the purpose of approving an interim or new Investment Company
Advisory Agreement with the Company to take effect after the Closing will not
contain, at the time (i) they are presented to the board of trustees of PBHG
Funds as part of the report pursuant to Section 15 of the Investment Company Act
and (ii) the proxy materials are first mailed to the shareholders of PBF or of
any other Fund to the extent shareholder approval is required under Applicable
Law or the applicable Investment Company Advisory Agreement or at the time of
the meeting thereof, any untrue statement of a material fact, or omit to state
any material fact required to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 5.17. Non-Solicitation.
(a) Holdings understands that Buyer shall be entitled to protect and
preserve the going concern value of the business of the Company to the extent
provided herein and that Buyer would not have entered into this Agreement absent
the provisions of this Section 5.17 and, therefore, agrees that until the second
anniversary of the Closing Date, (i) Holdings shall not, and shall cause OMAM
and the Centralized Entities and its and their respective directors, officers,
employees, representatives and agents not to, directly or indirectly, (A)
solicit, encourage or
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induce any person listed on Exhibit 5.17(a) to leave the employment of the
Company (or any successors thereto) or (B) hire any of such persons listed on
Exhibit 5.17(a) and (ii) Holdings shall cause each other Holdings Controlled
Affiliate and their respective directors, officers, employees, representatives
and agents not to, directly or indirectly (A) solicit, encourage or induce any
person listed on Exhibit 5.17(b) to leave the employment of the Company (or any
successor thereto) or (B) hire any of such persons listed on Exhibit 5.17(b);
provided that it shall not be a violation of clauses (i)(A) or (ii)(A) above to
engage in general employment solicitation activities, such as newspaper
advertisements, that are not directed specifically at employees of the Company;
provided further that the provisions of clause (i) hereof shall not apply to any
Person who is both (x) a director, officer or employee of OMAM or a Centralized
Entity on the one hand, and (y) any other Holdings Controlled Affiliate on the
other hand acting in his or her capacity as such with such other Holdings
Controlled Affiliate.
(b) Notwithstanding any other provision of this Agreement, it is understood
and agreed that remedies at law would be inadequate in the case of any breach of
the covenants contained in this Section 5.17, and Buyer shall be entitled to
equitable relief in respect thereof, including the remedy of specific
performance, with respect to any breach of such covenants, without the need to
show any proof of damages.
Section 5.18. Use of NWQ Name. Holdings agrees that from and after the
Closing, except as set forth in Section 5.18 of the Company Disclosure Schedule,
Holdings and its Subsidiaries shall have no rights to the use of the "NWQ" name
or ▇▇▇▇ or any formatives thereof, and Holdings shall take all actions as may be
necessary to terminate as of the Closing the use of the "NWQ" name or ▇▇▇▇ or
any formatives thereof by Holdings, OMAM or any of their respective
Subsidiaries.
Section 5.19. Pilgrim ▇▇▇▇▇▇ Fund.
(a) Holdings will use its reasonable best efforts to obtain, and will cause
Pilgrim ▇▇▇▇▇▇ & Associates Ltd. to use its reasonable best efforts to obtain,
as promptly as practicable, the approvals of the board of trustees of PBHG Funds
and (as necessary) the shareholders of PBF, pursuant to the provisions of
Section 15 of the Investment Company Act applicable thereto and in the manner
required by the declaration of trust and the other organizational documents of
PBF, as applicable, of (i) a sub-advisory agreement (the "Interim Sub-Advisory
Agreement") between Pilgrim ▇▇▇▇▇▇ & Associates Ltd. and the Company (or its
successor) to cover the interim period following the Closing (and the resultant
change of control of the Company), which agreement will satisfy the conditions
of Rule 15a-4 under the Investment Company Act, (ii) a sub-advisory agreement
(the "Permanent Sub-Advisory Agreement") between Pilgrim ▇▇▇▇▇▇ & Associates,
Ltd. and the Company (or its successor) to take effect upon PBF shareholder
approval of the Permanent Sub-Advisory Agreement, and (iii) a reorganization
(the "PBF Reorganization") of PBF into a newly-formed series of Nuveen
Investment Trust II, a Massachusetts business trust, or other appropriate entity
identified by Buyer, as contemplated below (the "Reorganized Fund").
(b) The new Interim Sub-Advisory Agreement and Permanent Sub-Advisory
Agreement will be identical in all material respects to the sub-advisory
agreement currently in effect between Pilgrim ▇▇▇▇▇▇ & Associates Ltd. and the
Company (the "Current Sub-Advisory
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Agreement"). Pilgrim ▇▇▇▇▇▇ & Associates Ltd. shall terminate and use its
reasonable best efforts to cause the board of trustees of PBHG Funds to
terminate the Permanent Sub-Advisory Agreement if shareholders of PBF approve
the PBF Reorganization. In connection with the PBF Reorganization, a new
sub-advisory agreement will be entered into between the Company and Nuveen
Institutional Advisory Corp., a Delaware corporation and SEC-registered
investment adviser, or other appropriate entity identified by Buyer ("NIAC")
("New Sub-Advisory Agreement") and a new investment advisory agreement will be
entered into between the Reorganized Fund and NIAC ("New Advisory Agreement").
The New Sub-Advisory Agreement and New Advisory Agreement will be identical in
all material respects to the Current Sub-Advisory Agreement and the advisory
agreement currently in effect between Pilgrim ▇▇▇▇▇▇ & Associates Ltd. and PBF
("Current Advisory Agreement"), respectively, except that (i) the investment
adviser shall be NIAC, (ii) each agreement shall be effective upon the
consummation of the PBF Reorganization and shall have an initial term of not
more than two years, and (iii) the fees paid to the Company pursuant to the New
Sub-Advisory Agreement may be higher or lower than those currently paid pursuant
to the Current Sub-Advisory Agreement. Notwithstanding the foregoing, the gross
advisory fees paid to NIAC pursuant to the New Advisory Agreement (including
fees paid by NIAC to the Company pursuant to the New Sub-Advisory Agreement)
shall not be greater than those paid pursuant to the Current Advisory Agreement.
(c) The Old Mutual Parties and Buyer will each use their reasonable best
efforts to cause an Agreement and Plan of Reorganization to be entered into
between PBHG Funds and Nuveen Investment Trust II, and/or another appropriate
entity, providing for the reorganization of PBF from a separate series of PBHG
Funds into a separate series of Nuveen Investment Trust II (or such other
entity), upon terms and conditions substantially similar to those set forth in
the Agreement and Plan of Reorganization made as of October 22, 2001 by and
between UAM Funds, Inc. and PBHG Funds; provided that the occurrence of the
Closing shall be a condition to the parties' respective obligations to
consummate such reorganization under such agreement; and provided, further, that
Holdings shall bear all out-of-pocket expenses relating to the PBF
Reorganization.|
(d) (i) Provided that the Closing shall have theretofore occurred, Holdings
will pay to Buyer an amount in cash equal to $1.5 million (the "PBF Refund")
plus interest thereon calculated at the Treasury Rate for the period from the
Closing Date up to but not including the date of payment, by Wire Transfer as
set forth in written instructions from Buyer, on the earlier to occur, if any,
of (a) the second Business Day following the date on which the board of trustees
of PBHG Funds or the shareholders of PBF shall have voted upon, and shall not
have approved, the Interim Sub-Advisory Agreement, the Permanent Sub-Advisory
Agreement or the Reorganization in accordance herewith or (b) November 7, 2002
(or such later date prior to the expiration of the Interim Sub-Advisory
Agreement as Buyer may determine in its sole discretion), in the event that the
Interim Sub-Advisory Agreement, the Permanent Sub-Advisory Agreement or the PBF
Reorganization shall not have been approved on or before the date seven days
prior to such date and the PBF Reorganization shall not have been completed on
or before such date, provided that the failure of such reorganization to have
been completed on or before such date shall not have been caused by a material
breach by Buyer of its obligations under this Section 5.19 or its covenants
under the Agreement and Plan of Reorganization contemplated by paragraph (c) of
this Section 5.19. In the event that the PBF Refund is paid hereunder, Holdings
shall have no further obligation under this Section 5.19 to cause the PBF
Reorganization. In the
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event that the PBF Reorganization is effected after the PBF Refund has been
paid, (i) Buyer shall refund to Holdings the PBF Refund plus interest thereon
calculated at the Treasury Rate for the period from the payment date up to but
not including the date of payment and (ii) Holdings shall pay Buyer an amount
equal to the advisory fees that PBF paid Pilgrim ▇▇▇▇▇▇ & Associates Ltd. for
the period from November 7, 2002 through the date of the PBF Reorganization plus
interest thereon calculated at the Treasury Rate for the relevant period up to
but not including the date of payment. Both such payments shall be made by Wire
Transfer as set forth in written instructions from the respective recipient on
the second Business Day following the date of the PBF Reorganization.
(ii) In the event that, prior to the Closing, the board of trustees of PBHG
Funds or the shareholders of PBF shall have voted upon, and shall not have
approved, the Interim Sub-Advisory Agreement, the Permanent Sub-Advisory
Agreement or the PBF Reorganization in accordance herewith, the Initial Purchase
Consideration and the Purchase Consideration shall be reduced by an amount equal
to $1.5 million (the "PBF Adjustment") and Holdings shall have no further
obligation to effect the PBF Reorganization under this Section 5.19.
Section 5.20. Delivery of Closing Revenue Run-Rate Schedule. The Old Mutual
Parties will deliver to Buyer not later than the third Business Day prior to the
Closing Date, a true, complete and correct schedule setting forth in reasonable
detail the calculation of the Closing Wrap Account Revenue Run-Rate and the
Closing Other Account Revenue Run-Rate. The Old Mutual Parties and Buyer shall
consult and cooperate with respect to the preparation of such schedule. Buyer
shall have an opportunity to review the schedule setting forth the calculation
of the Closing Wrap Account Revenue Run-Rate and the Closing Other Account
Revenue Run-Rate and, if the Closing occurs, unless Buyer shall have raised an
objection within 14 days after the Closing Date, Buyer and Holdings shall be
deemed to have irrevocably accepted such schedule.
Section 5.21. Permitted Distributions; Payment of Intercompany Balances.
Following the date hereof and prior to the Closing Date, the Company may declare
and make any cash distributions; provided that such distributions will not
result in the Working Capital Amount being less than $2.4 million less the
aggregate amount payable by the Company pursuant to Section 5.15(b). Immediately
prior to the Closing, the Old Mutual Parties will take all action necessary such
that all intercompany receivables, payables, loans, notes and investments then
existing between the Company, on the one hand, and Parent or any of its
Subsidiaries (other than the Company), on the other hand, other than advisory or
subadvisory fees arising in the ordinary course of business, consistent with
past practice, shall be settled by way of capital contribution (with respect to
intercompany payables or loans or notes due to Parent or any of its
Subsidiaries) or by way of dividend in kind (with respect to receivables of the
Company owed by Parent or any of its Subsidiaries, including any amounts payable
under the license agreement dated October 21, 1992, between United Asset
Management Trademark Inc. and the Company, which shall be cancelled effective as
of the Closing with no continuing obligations thereafter). As of the Closing,
the Company shall have no long-term liabilities that would be required to be
reflected in a balance sheet (or the notes thereto) prepared in accordance with
GAAP (other than the real property leases set forth in Section 2.18 of the
Company Disclosure Schedule).
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Section 5.22. Termination of Revenue Sharing Termination Agreement. The
parties hereto acknowledge and agree that, effective as of the Closing, the
obligations of Holdings and OMAM to the Company under the provisions of the
Revenue Sharing Termination Agreement shall terminate without any liability on
the part of Holdings or OMAM and without any further action on the part of
Holdings, OMAM or the Company, and that the Company shall, as against Holdings
and OMAM, forthwith cease to have any rights thereunder and shall cease to be a
participant in the Long Term Incentive Plan established by OMAM and described in
Exhibit B to the Revenue Sharing Termination Agreement.
Section 5.23. Intentionally Omitted.
Section 5.24. Pre-Closing Transfer of Shares. Immediately prior to the
Closing, Holdings will cause OMAM to transfer the Shares to Holdings, by way of
a dividend or against legally sufficient consideration, free and clear of any
Encumbrances. Prior to such transfer of the Shares, Holdings shall, and shall
cause OMAM to, take all corporate or limited liability company action necessary
to approve and effect such transfer.
ARTICLE VI
CONDITIONS TO THE CONSUMMATION OF THE TRANSACTION
Section 6.1. Mutual Conditions. The obligations of each party to this
Agreement to consummate the Transaction shall be subject to the satisfaction of
each of the following conditions:
(i) No order, injunction or decree issued by any Governmental
Authority of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Transaction shall be in effect. No
proceeding initiated by any Governmental Authority seeking an injunction to
restrain or prohibit the consummation of the Transaction shall be pending.
No statute, rule, regulation, order, injunction or decree shall have been
enacted, entered, promulgated or enforced by any Governmental Authority
which prohibits, restricts in any material manner or makes illegal the
consummation of the Transaction;
(ii) All consents, waivers, authorizations and approvals legally
required from all Governmental Authorities to consummate the Transaction,
without the imposition of conditions or requirements, in the aggregate, the
satisfaction of which by Buyer or its Subsidiaries or the Company are
reasonably likely to result in either a material adverse effect on the
business, assets, liabilities, financial condition or results of operations
of Buyer and its Subsidiaries, taken as a whole, or a Company Material
Adverse Effect, shall have been obtained and shall remain in full force and
effect as of the Closing Date; and
(iii) In respect of the notifications of the parties hereto pursuant
to the HSR Act, the applicable waiting period and any extensions thereof
shall have expired or terminated.
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Section 6.2. Conditions to Buyer's Obligations. The obligations of Buyer to
consummate the Transaction shall be subject to the satisfaction of each of the
following conditions, any of which may be waived in writing by Buyer:
(i) For purposes of this Section 6.2(i), the accuracy of the
representations and warranties of the Old Mutual Parties set forth in this
Agreement shall be assessed as of the date of this Agreement and shall be
assessed as of the Closing Date with the same effect as though all such
representations and warranties had been made again on and as of the Closing
Date (provided that the accuracy of the representations and warranties that
speak as of a specific date shall be assessed only as of such date). The
representations and warranties set forth in Sections 2.3(a), 2.5, 3.1 and
3.3(a), shall be true and correct. The representations and warranties of
the Old Mutual Parties set forth in Articles II, III and VIII of this
Agreement (other than the representations and warranties set forth in
Sections 2.3(a), 2.5, 3.1 and 3.3(a)) shall be true and correct except for
such inaccuracies which do not, and are not reasonably likely to,
individually or in the aggregate, result in a Company Material Adverse
Effect; provided that for purposes of this sentence, those representations
and warranties that are qualified by references to "material," "Company
Material Adverse Effect" or variations thereof shall be deemed not to
include such qualifications;
(ii) Each of the Old Mutual Parties, as applicable, shall have
performed and complied in all material respects with all agreements,
covenants, obligations and conditions required by this Agreement to be
performed or complied with by them at or prior to the Closing;
(iii) The Old Mutual Parties shall have delivered to Buyer a
certificate, dated as of the Closing Date signed on behalf of the Company
by its Chief Executive Officer and signed on behalf of Holdings by an
appropriate senior officer thereof confirming the satisfaction of the
conditions contained in paragraphs (i) and (ii) of this Section 6.2;
(iv) No employee of the Company listed on Exhibit 6.2(iv) who has
entered into an Employment Agreement shall have (A) repudiated his
Employment Agreement, (B) died or become permanently disabled or (C) taken
or failed to take any action that would constitute "Cause" under his
Employment Agreement had such action been taken immediately following the
effective time of such Employment Agreement;
(v) (i) The Closing Wrap Account Revenue Run-Rate shall not be less
than 90% of the Base Wrap Account Revenue Run-Rate; and (ii) the Closing
Other Account Revenue Run-Rate shall not be less than 70% of the Base Other
Account Revenue Run Rate;
(vi) Buyer shall have received an opinion dated the Closing Date of
Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to Holdings, substantially in the form
attached hereto as Exhibit B; and The board of trustees of PBHG Funds shall
have considered and shall have taken action upon the approval of the
Interim Sub-Advisory Agreement, the Permanent Sub-Advisory Agreement and
the PBF Reorganization.
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Section 6.3. Conditions to the Obligations of the Old Mutual Parties. The
obligation of the Old Mutual Parties to consummate the Transaction shall be
subject to satisfaction of each of the following conditions, which may be waived
in writing by Holdings:
(i) For purposes of this Section 6.3(i), the accuracy of the
representations and warranties of Buyer set forth in this Agreement shall
be assessed as of the date of this Agreement and shall be assessed as of
the Closing Date with the same effect as though all such representations
and warranties had been made again on and as of the Closing Date (provided
that the accuracy of the representations and warranties that speak as of a
specific date shall be assessed only as of such date). The representations
and warranties set forth in Sections 4.2(a) and 4.8 shall be true and
correct. The representations and warranties of Buyer set forth in Article
IV of this Agreement (other than the representations and warranties set
forth in Sections 4.2(a) and 4.8) that are qualified as to materiality
shall be true and correct and the representations and warranties of Buyer
set forth in Article IV of this Agreement that are not so qualified shall
be true and correct in all material respects;
(ii) Buyer shall have performed and complied in all material respects
with all agreements, covenants, obligations and conditions required by this
Agreement to be performed or complied with by it at or prior to the
Closing;
(iii) Buyer shall have delivered to the Old Mutual Parties a
certificate, dated as of the Closing Date, signed on behalf of Buyer by an
appropriate senior officer thereof confirming the satisfaction of the
conditions contained in paragraphs (i) and (ii) of this Section 6.3; and
(iv) Holdings shall have received an opinion dated the Closing Date of
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, counsel to Buyer, substantially in the form
attached hereto as Exhibit C.
ARTICLE VII
TERMINATION
Section 7.1. Termination.
(a) This Agreement may be terminated prior to the Closing as follows:
(i) by written consent of Holdings and Buyer;
(ii) by Holdings or Buyer, if any order of any Governmental Authority
permanently restraining, enjoining or otherwise prohibiting the
consummation of the Transaction shall have become final and non-appealable;
provided, that, the party seeking to terminate this Agreement pursuant to
this Section 7.1(a)(ii) and its Affiliates that are parties hereto, if any,
shall have used commercially reasonable efforts to prevent the entry of and
to remove such order;
(iii) by Buyer if any condition to the obligations of Buyer hereunder
becomes incapable of fulfillment other than as a result of a breach by
Buyer of any covenant or agreement contained in this Agreement, and such
condition is not waived by Buyer;
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(iv) by Holdings, if any condition to the obligations of Holdings
hereunder becomes incapable of fulfillment other than as a result of a
breach by any of the Old Mutual Parties of any covenant or agreement
contained in this Agreement, and such condition is not waived by such
parties;
(v) by Holdings, if there shall be a breach by Buyer of any
representation or warranty, or any covenant or agreement contained in this
Agreement which would result in a failure of a condition set forth in
Section 6.3 and which breach cannot be cured or has not been cured by the
earlier of (x) 20 Business Days after the giving of written notice to Buyer
of such breach and (y) the Termination Date;
(vi) by Buyer, if there shall be a breach by any of the Old Mutual
Parties of any representation or warranty, or any covenant or agreement
contained in this Agreement which would result in a failure of a condition
set forth in Section 6.2 and which breach cannot be cured or has not been
cured by the earlier of (x) 20 Business Days after the giving of written
notice to the applicable Old Mutual Party of such breach and (y) the
Termination Date; or
(vii) by Holdings or Buyer, if the Closing does not occur by the close
of business on September 30, 2002 (the "Termination Date"); provided, that
notwithstanding the foregoing, a party who is or whose Affiliate is in
material breach of any of its obligations or representations, warranties,
covenants or agreements contained in this Agreement shall not have the
right to terminate this Agreement pursuant to this clause (vii).
(b) The termination of this Agreement shall be effectuated by the delivery
by the party terminating this Agreement to each other party of a written notice
of such termination. If this Agreement so terminates, it shall become null and
void and have no further force or effect, except as provided in Section 7.2.
Section 7.2. Survival after Termination. If this Agreement is terminated in
accordance with Section 7.1 hereof and the transactions contemplated hereby are
not consummated, this Agreement shall become void and of no further force and
effect, without any liability on the part of any party hereto, except for the
provisions of Sections 2.12, 3.5, 4.5, 5.9(a) (the first sentence only), 5.9(d)
and 5.13 and this Section 7.2. Notwithstanding the foregoing, nothing in this
Section 7.2 shall relieve any party to this Agreement of liability for a breach
of any provision of this Agreement or any agreement made as of the date hereof
or subsequent thereto pursuant to this Agreement.
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ARTICLE VIII
TAX MATTERS
Section 8.1. Tax Representations. Except as set forth in the Company
Disclosure Schedule, each of the Old Mutual Parties, jointly and severally,
hereby represents and warrants to Buyer as follows:
(a) All material Tax Returns of the Company required to be filed on or
before the Closing Date have been timely filed or will be timely filed on or
before the Closing Date in accordance with all Applicable Laws, and all such Tax
Returns are true, correct and complete in all material respects;
(b) The Company has timely paid all Taxes shown to be due on such Tax
Returns;
(c) The Company has made adequate provision in the Company Financial
Statements for all Taxes payable by the Company for all periods reflected
therein;
(d) There is no action, suit, proceeding, investigation, assessment,
adjustment, audit or claim now proposed in writing or pending against or with
respect to the Company in respect of any Tax;
(e) The Company has not received any notice of deficiency or assessment
from any Governmental Authority with respect to liabilities for Taxes of the
Company which have not been paid or finally settled;
(f) There are no outstanding waivers or other agreements extending any
statutory periods of limitation for the assessment of Taxes of the Company;
(g) All income Tax Returns of the Company through the year ended December
31, 1992, have been examined and the examination concluded or are Tax Returns
with respect to which the applicable period for assessment, giving effect to
waivers and extensions, has expired;
(h) There are no material liens for Taxes upon the assets of the Company
except for liens for current Taxes not yet due;
(i) Holdings and OMAM are not subject to withholding under Section 1445 of
the Code with respect to any of the transactions contemplated hereby;
(j) The Company has never been (i) a member of any affiliated,
consolidated, combined or unitary group of which Holdings is not the common
parent corporation or (ii) a party to any written or unwritten tax sharing
agreement or indemnity agreement (or other arrangement or practice for the
sharing of Taxes);
(k) The Company is a member of the affiliated group of which Holdings is
the common parent corporation within the meaning of Section 1504(a)(1) of the
Code;
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(l) To the Knowledge of the Old Mutual Parties, the Company does not have
any liability for the Taxes of any Person other than the Company;
(m) There are no outstanding powers of attorney enabling any party to
represent the Company with respect to Tax matters;
(n) The Company, in all material respects, (i) has duly withheld and
collected and paid over to the proper Governmental Authority (or are properly
holding for payment) with respect to all employees, all employee income, social
security and unemployment Taxes for all taxable periods and (ii) will duly
withhold, collect and pay to the proper Governmental Authority all such Taxes
that become due on or before the Closing Date; and
(o) To the Knowledge of the Old Mutual Parties and except for Funds as to
which the Company is not the sponsor, (i) each of the Funds has elected to be
treated as a regulated investment company under Subchapter M of the Code, and
has qualified as such for each taxable year (or portion thereof) since its
inception until and including the Closing Date; (ii) each of the Funds has
timely filed all material Tax Returns required to be filed by it and paid all
material Taxes due and required to be paid by such Fund; (iii) no deficiencies
for any Taxes have been proposed, assessed or asserted by any Governmental
Authority against any Fund; (iv) no Tax Return of any Fund is currently being
audited by any Government Authority and there has been no waivers of statutes of
limitations by any Fund; (v) each Fund has (A) met the requirements of Section
852(a) of the Code for each taxable year since its inception, (B) incurred a
deduction for dividends paid, as defined by Section 561 of the Code sufficient
to reduce investment company taxable income, as defined by Section 852(b)(2) of
the Code, to a level sufficient to avoid federal or state income tax liability
at the Fund level for each taxable year since its inception, and (C) met the
distribution requirements of Section 4982(b) of the Code to avoid the imposition
of tax provided for in Section 4982(a), with respect to each calendar year since
its formation; (vi) to the extent that any Fund earned a net capital gain, as
defined by Section 1222(11) of the Code, an equal or exceeding amount of capital
gain dividend, as defined by Section 852(b)(3)(C) of the Code, was distributed,
or in the alternative, undistributed capital gains were treated in accordance
with Section 852(b)(3)(D), for each taxable year since the Fund's inception;
(vii) to the extent that any Fund earned interest excludable from gross income
under Section 103(a) of the Code over amounts disallowed as deductions under
Sections 265 and 171(a)(2) of the Code, and intended to distribute such interest
as tax exempt income to its shareholders, an equal amount of exempt-interest
dividend, as defined by Section 852(b)(5) of the Code, was distributed for each
taxable year since its formation; and (viii) each Fund which is invested in by a
separate account of an insurance company is and has been managed in a way to
ensure compliance with the Section 817 diversification rules, with respect to
each calendar year since its formation.
Section 8.2. Section 338(h)(10) Election.
(a) Holdings and Buyer shall jointly make timely and irrevocable elections
under Section 338(h)(10) of the Code and, if permissible, similar elections
under any applicable state or local income tax laws for the Company. Holdings,
the Company and Buyer shall, and Holdings shall cause OMAM to, report the
transactions consistent with such elections under Section 338(h)(10) of the Code
or any similar state, local or foreign tax provision (the
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"Elections") and shall take no position contrary thereto unless and to the
extent required to do so pursuant to a determination (as defined in Section
1313(a) of the Code or any similar state, local or foreign tax provision).
(b) Buyer shall be responsible for preparing drafts of all forms,
attachments and schedules necessary to effectuate the Elections (including,
without limitation, Internal Revenue Service Form 8023 and any similar forms
under applicable state or local income tax laws (the "Section 338 Forms")). At
least 120 days prior to the latest date for the filing of each Section 338 Form,
Buyer shall furnish Holdings with a copy of each such draft Section 338 Form
prepared by Buyer together with a copy of a report (the "Allocation Report") of
the proposed allocation. If within 90 days of Holdings' receipt of such Section
338 Form and Allocation Report, Holdings shall not have objected in writing to
such Section 338 Form or Allocation Report, such Section 338 Form and Allocation
Report shall be final and binding on both parties without any further
adjustment. If at least 30 days prior to the latest date for the filing of such
Section 338 Form, Holdings and Buyer cannot agree upon the final form and
content of such Section 338 Form or the allocation pursuant to Section 8.2(c),
any disagreement with respect to such Section 338 Form or the allocation shall
be resolved, at least 10 days before the last day for the filing of such Section
338 Form, by the Independent Accounting Firm. The resolution of the Independent
Accounting Firm shall be final and binding on all parties without any further
adjustment. The Section 338 Form and the Allocation Report shall be amended to
reflect the resolution of the Independent Accounting Firm and, once amended,
shall be final and binding on all parties without any further adjustment. The
costs, expenses and fees of the Independent Accounting Firm shall be borne
equally by Holdings and Buyer. Once such Section 338 Form is final and no later
than the last date for filing of such Section 338 Form, Holdings and Buyer shall
execute such Section 338 Form, and Buyer shall file such Section 338 Form with
the applicable taxing authority.
(c) Buyer and Holdings agree that none of them shall, or shall permit any
of their Affiliates to, take any action to modify the Section 338 Forms
following the execution thereof, or to modify or revoke the Elections following
the filing of the Section 338 Forms, without the written consent of Buyer and
Holdings, as the case may be.
(d) Buyer and Holdings shall, and shall cause their respective Affiliates
to, file all Tax Returns in a manner consistent with the information contained
in the Section 338 Forms filed pursuant to Section 8.2(b) and the final
Allocation Report.
Section 8.3. Tax Indemnification.
(a) Except to the extent reflected as a liability in the Adjustment Amount
Documents as finally determined in accordance with Section 1.4, Holdings shall
pay or cause to be paid, shall be liable for, and shall indemnify, defend and
hold Buyer and its Affiliates (including the Company after the Closing Date)
harmless from and against, without duplication (i) any and all Excluded Taxes
(other than Taxes resulting from an action taken by Buyer, the Company, or any
Subsidiary of Buyer on the Closing Date but after the Closing that is outside of
the ordinary course of business) and (ii) any and all Losses incurred by Buyer
or any of its Affiliates to the extent arising out of or resulting from the
breach of a representation or warranty
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(disregarding any materiality qualification therein), agreement or covenant
made in this Article VIII by any of the Old Mutual Parties.
(b) Buyer shall pay or cause to be paid, shall be liable for, and shall
indemnify, defend and hold Holdings and its Affiliates harmless from and against
(i) any and all Taxes (including Taxes resulting from an action taken by Buyer,
the Company, or any Subsidiary of Buyer on the Closing Date but after the
Closing that is outside of the ordinary course of business) of the Company other
than Excluded Taxes and (ii) any and all Losses incurred by Holdings or its
Affiliates to the extent arising out of or resulting from the breach of an
agreement or covenant made in this Article VIII by Buyer.
(c) Payment in full of any amount due under this Section 8.3 shall be made
to the affected party in immediately available funds at least two business days
before the date payment of the Taxes to which such payment relates is due, or,
if no Tax is payable, within fifteen days after written demand is made for such
payment.
Section 8.4. Filing of Tax Returns.
(a) Holdings shall timely prepare and file or shall cause to be timely
prepared and filed (i) any combined, consolidated or unitary Tax Return that
includes Holdings, and (ii) any Tax Return of the Company due on or before the
Closing Date. Holdings shall timely prepare or cause to be timely prepared any
income Tax Return of the Company due after the Closing Date (giving effect to
any validly obtained extensions) for any Pre-Closing Period and deliver such Tax
Return to Buyer for filing.
(b) Buyer shall, except to the extent that such Tax Returns are the
responsibility of Holdings under Section 8.4(a), timely prepare and file or
shall cause to be timely prepared and filed all Tax Returns with respect to the
Company.
(c) For any Tax Return of the Company with respect to a Pre-Closing Period
or a taxable year or period beginning before and ending after the Closing Date
that is the responsibility of Buyer under Section 8.4(b), Buyer shall deliver to
Holdings for its review, comment and approval (which approval shall not be
unreasonably withheld or delayed) a copy of such proposed Tax Return
(accompanied, where appropriate, by an allocation between the Pre-Closing Period
and the Post-Closing Period of the Taxes shown to be due on such Tax Return) at
least twenty (20) Business Days prior to the due date (giving effect to any
validly obtained extension thereof).
Section 8.5. Tax Refunds. Except to the extent reflected as an asset in the
Adjustment Amount Documents as finally determined in accordance with Section
1.4, any refund with respect to Taxes of the Company for the Pre-Closing Period
shall be allocated to Holdings and shall promptly be paid to Holdings. Any other
refund with respect to Taxes of the Company shall be allocated to Buyer and
shall be promptly paid to Buyer.
Section 8.6. Assistance and Cooperation. From and after the Closing Date,
each of Holdings and Buyer shall:
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(a) assist in all reasonable respects (and cause their respective
affiliates to assist) the other party in preparing any Tax Returns of the
Company which such other party is responsible for preparing and filing;
(b) cooperate in all reasonable respects in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of the Company or
any Affiliate of the Company;
(c) make available to the other and to any taxing authority as reasonably
requested all information, records, and documents relating to Taxes of the
Company;
(d) provide timely notice to the other in writing of any pending or
threatened tax audits or assessments of the Company for taxable periods for
which the other may have a liability under this Agreement;
(e) furnish the other with copies of all correspondence received from any
taxing authority in connection with any tax audit or information request with
respect to the Company with respect to any such taxable period; and
(f) make available to Holdings and to any taxing authority as reasonably
requested all information, records, and documents of the Company in connection
to any matter relating to Taxes of Holdings.
Section 8.7. Contests.
(a) If any Governmental Authority asserts a Tax Claim, then the party
hereto first receiving notice of such Tax Claim promptly shall provide written
notice thereof to the other party or parties hereto; provided, however, that the
failure of such party to give such prompt notice shall not relieve the other
party of any of its obligations under this Article VIII, except to the extent
that the other party is actually prejudiced thereby. Such notice shall specify
in reasonable detail the basis for such Tax Claim and shall include a copy of
the relevant portion of any correspondence received from the Governmental
Authority.
(b) Holdings shall have the right to control, at its own expense, any
audit, examination, contest, litigation or other proceeding by or against any
taxing authority (a "Tax Proceeding") in respect of the Company for any taxable
period that ends on or before the Closing Date; provided, however, that (i)
Holdings shall consult with Buyer before taking any significant action in
connection with such Tax Proceeding if such Tax Proceeding could adversely
affect Buyer, any Affiliate of Buyer or, following the Closing Date, the
Company, and (ii) Holdings shall not settle, compromise or abandon any such Tax
Proceeding, if such action would adversely affect Buyer, any Affiliate of Buyer
or the Company, without obtaining the prior written consent of Buyer, which
consent shall not be unreasonably withheld or delayed.
(c) In the case of a Tax Proceeding for a taxable year or period of the
Company beginning before and ending after the Closing Date, the Controlling
Party shall have the right to control, at its own expense, such Tax Proceeding;
provided, however, that (i) the Controlling Party shall provide the
Non-controlling Party with a timely and reasonably detailed account of each
stage of such Tax Proceeding, (ii) the Controlling Party shall consult with the
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Non-controlling Party before taking any significant action in connection with
such Tax Proceeding, (iii) the Controlling Party shall consult with the
Non-controlling Party and offer the Non-controlling Party an opportunity to
comment before submitting any written materials prepared or furnished in
connection with such Tax Proceeding, (iv) the Controlling Party shall defend
such Tax Proceeding diligently and in good faith as if it were the only party in
interest in connection with such Tax Proceeding, (v) the Non-controlling Party
shall be entitled to participate in such Tax Proceeding, at its own expense, if
such Tax Proceeding could have an adverse impact on the Non-controlling Party or
any of its Affiliates and (vi) the Controlling Party shall not settle,
compromise or abandon any such Tax Proceeding without obtaining the prior
written consent, which consent shall not be unreasonably withheld or delayed, of
the Non-controlling Party if such settlement, compromise or abandonment could
have an adverse impact on the Non-controlling Party or any of its Affiliates.
"Controlling Party" shall mean whichever of Holdings or Buyer is reasonably
expected to bear the greater Tax liability in connection with a Tax Proceeding
for a taxable year or period beginning before and ending after the Closing Date,
and "Non-controlling Party" shall mean whichever of Holdings or Buyer is not the
Controlling Party with respect to such Tax Proceeding.
(d) Buyer shall have the right to control, at its own expense, any Tax
Proceeding involving the Company (other than any Tax Proceeding described in
Section 8.7(b) or (c)); provided, however, that (i) Buyer shall consult with
Holdings before taking any significant action in connection with such Tax
Proceeding if such Tax Proceeding could adversely affect Holdings or any
Affiliate of Holdings, and (ii) Buyer shall not settle, compromise or abandon
any such Tax Proceeding, if such action would adversely affect Holdings or any
Affiliate of Holdings, without obtaining the prior written consent of Holdings,
which consent shall not be unreasonably withheld or delayed.
Section 8.8. Tax Sharing Agreements. Anything in any other agreement to the
contrary notwithstanding, all liabilities and obligations between Parent,
Holdings, OMAM or any of their Affiliates (other than the Company) on the one
hand and the Company on the other hand, under any Tax allocation or Tax sharing
agreement in effect prior to the Closing Date (other than this Agreement) shall
cease and terminate as of the Closing Date as to all past, present and future
taxable periods.
Section 8.9. Coordination; Survival. Except as expressly provided in
Section 9.3, claims for indemnification with respect to Taxes shall be governed
exclusively by this Article VIII and Section 9.6 and not by any other provision
of Article IX. The indemnification provisions of this Article VIII shall survive
until the expiration of the relevant statutes of limitations.
Section 8.10. Transfer Taxes. The first $50,000 of any sales, use,
transfer, stamp, documentary, recording or similar Taxes imposed upon the
transactions contemplated hereby shall be borne equally by Holdings and Buyer.
Any such Taxes in excess of $50,000 shall be borne by Holdings.
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ARTICLE IX
INDEMNIFICATION
Section 9.1. Indemnification by Holdings.
(a) From and after the Closing, Holdings shall be liable for, and shall
indemnify Buyer, the Company and the LLC (the "Buyer Indemnitees"), against and
hold them harmless from, any Losses suffered or incurred by any such Buyer
Indemnitee (other than a Loss relating to Taxes, for which the indemnification
provisions set forth in Section 8.3 shall govern) arising from, relating to or
otherwise in respect of (i) any inaccuracy or breach of any representation or
warranty made by any of the Old Mutual Parties in or pursuant to Article II or
Article III of this Agreement (it being agreed that solely for purposes of
establishing whether any matter is indemnifiable pursuant to this clause (i),
the accuracy of the representations and warranties made by the Old Mutual
Parties shall be determined without giving effect to any qualifications relating
to materiality (including Company Material Adverse Effect)), (ii) any breach,
noncompliance or nonfulfillment by the Company or any Old Mutual Party of any
covenant, agreement or undertaking to be complied with or performed by any of
them pursuant to this Agreement (other than covenants, agreements or
undertakings set forth in Article VIII), (iii) any Controlled Group Liability,
and (iv) the Retained Liabilities (as defined in Item 1 of Schedule 2.13 of the
Company Disclose Schedule). Notwithstanding the foregoing, Holdings shall not be
required to indemnify any Buyer Indemnitee in respect of any Shared Liabilities,
except as and to the extent set forth on Annex A.
(b) Holdings shall not be required to indemnify any Buyer Indemnitee, and
shall not have any liability under Section 9.1(a)(i) (other than in respect of
any breach of the representations contained in Section 2.5 or Section 3.1)
unless the aggregate of all Losses for which Holdings would, but for this
Section 9.1(b), be liable thereunder exceeds on a cumulative basis an amount
equal to $4,000,000 and then only to the extent of any such excess.
Section 9.2. Indemnification by Buyer.
(a) From and after the Closing, Buyer shall indemnify Holdings, against and
hold it harmless from, any Losses suffered or incurred by Holdings (other than
any Loss relating to Taxes, for which the indemnification provisions set forth
in Section 8.3 shall govern) arising from, relating to or otherwise in respect
of (i) any inaccuracy or breach of any representation or warranty made by Buyer
in or pursuant to Article IV of this Agreement (it being agreed that solely for
purposes of establishing whether any matter is indemnifiable pursuant to this
clause (i), the accuracy of the representations and warranties made by Buyer
shall be determined without giving effect to any qualifications relating to
materiality (including material adverse effect on Buyer)), (ii) any breach,
noncompliance or nonfulfillment by Buyer of any covenant, agreement or
undertaking to be complied with or performed by it pursuant to this Agreement
and (iii) the matters set forth on Exhibit 9.2(a) (the "Specified Liabilities").
Notwithstanding the foregoing, Buyer shall not be required to indemnify Holdings
in respect of any Shared Liabilities, except as and to the extent set forth on
Annex A.
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(b) Buyer shall not be required to indemnify Holdings, and shall not have
any liability under Section 9.2(a)(i) (other than in respect of any breach of
the representations contained in Section 4.8), unless the aggregate of all
Losses for which Buyer would, but for this Section 9.2(b), be liable thereunder
exceeds on a cumulative basis an amount equal to $4,000,000 and then only to the
extent of any such excess.
Section 9.3. Calculation and Payment of Losses.
(a) The amount of any Loss for which indemnification is provided under
Article VIII or this Article IX shall be net of any amounts actually recovered
by the indemnified party under insurance policies with respect to such Loss and
shall be (i) increased to take account of any net Tax cost (other than a
reduction in Tax basis) incurred by the indemnified party arising from the
receipt of indemnity payments hereunder (grossed up for such increase) and (ii)
reduced to take account of any net Tax Benefit realized by the indemnified party
arising from the incurrence or payment of any such Loss, in each case when and
as such Tax cost or Tax Benefit is actually realized through an increase or
reduction of Taxes otherwise due. Any indemnity payment under this Agreement
shall be treated as an adjustment to the Purchase Consideration for Tax
purposes, unless a final determination (which shall include the execution of a
Form 870-AD or successor form) with respect to the indemnified party or any of
its Affiliates causes any such payment not to be treated as an adjustment to the
Purchase Consideration for United States Federal income Tax purposes.
(b) Subject to Section 9.5(b), the aggregate indemnification obligations of
Holdings pursuant to this Article IX shall not exceed the Old Mutual Indemnity
Cap; provided, that such limitation shall not apply (i) to any Loss to the
extent related to an inaccuracy, breach, violation or nonfulfillment of any
provision in Article VIII, (ii) to any Loss to the extent resulting from a
breach of the representations contained in Section 2.5 or Section 3.1, (iii) to
any Loss to the extent related to any Controlled Group Liability, (iv) to any
Loss for which indemnification is provided under Section 9.1(a)(ii) or (v) to
any Losses in respect of Retained Liabilities (a "Buyer Indemnity Limitation
Exception"); provided, further, that in the case of clause (ii), the aggregate
indemnification obligation of Holdings with respect thereto, and without
consideration of any other amounts that may be due under this Article IX, shall
not exceed $140 million.
(c) Subject to Section 9.5(b), the aggregate indemnification obligations of
Buyer pursuant to this Article IX shall not exceed the Buyer Indemnity Cap;
provided that such limitation shall not apply (i) to any Loss to the extent
related to an inaccuracy, breach, violation or nonfulfillment of any provision
in Article VIII, or (ii) to any Loss for which indemnification is provided under
Section 9.2(a)(ii) and Section 9.2(a)(iii) (an "Old Mutual Indemnity Limitation
Exception").
Section 9.4. Termination of Indemnification. The obligations to indemnify
and hold harmless any Person pursuant to Section 9.1(a) or 9.2(a) shall
terminate when the applicable representation or warranty or covenant terminates
pursuant to Section 10.3; provided, that such obligations to indemnify and hold
harmless shall not terminate with respect to any item as to which the Person to
be indemnified shall have, before the expiration of the applicable period,
previously made a bona fide claim by delivering a notice of such claim pursuant
to Section 9.5 to
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the indemnifying party; and provided, further, that in the event of a Buyer
Indemnity Limitation Exception or an Old Mutual Indemnity Limitation Exception,
the obligation to indemnify shall continue until the expiration of the
applicable statute of limitations.
Section 9.5. Procedures.
(a) Third Party Claims. In order for a Person (the "Indemnified Party") to
be entitled to any indemnification provided for under Section 9.1 or 9.2 in
respect of, arising out of or involving a claim made by any third Person against
the Indemnified Party (a "Third Party Claim"), such Indemnified Party must
notify the indemnifying party in writing of the Third Party Claim promptly
following receipt by such Indemnified Party of written notice of the Third Party
Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure. Thereafter, the Indemnified Party shall deliver to the indemnifying
party, as promptly as practicable following the Indemnified Party's receipt
thereof, copies of all notices and documents (including court papers) received
by the Indemnified Party relating to the Third Party Claim that are not
separately addressed to the indemnifying party.
(b) Assumption. If a Third Party Claim is made against an Indemnified
Party, the indemnifying party shall be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense thereof with counsel
selected by the indemnifying party; provided, however, that such counsel is not
reasonably objected to by the Indemnified Party. Should the indemnifying party
so elect to assume the defense of a Third Party Claim, the indemnifying party
shall not be liable to the Indemnified Party for any reasonable legal expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof. If the indemnifying party assumes such defense, the Indemnified Party
shall have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying party shall
control such defense. Notwithstanding the election of the indemnifying party to
assume the defense of such Third Party Claim, the Indemnified Party shall have
the right to employ separate counsel and to participate in the defense of such
Third Party Claim, and the indemnifying party shall bear the reasonable fees and
expenses of such separate counsel (i) if the parties to any such action or
proceeding (including impleaded parties) include any of the Old Mutual Parties
(other than the Company) and representation of both parties would, in the
reasonable opinion of counsel for the Indemnified Party, be inappropriate due to
a conflict of interest or (ii) if the indemnifying party shall not have employed
counsel (other than counsel that is reasonably objected to by the Indemnified
Party) within a reasonable time after the Indemnified Party has given notice of
the institution of a Third Party Claim in compliance with Section 9.5(a). The
indemnifying party shall be liable for the reasonable fees and expenses of
counsel employed by the Indemnified Party for any period during which the
indemnifying party has not assumed the defense thereof; provided that such
counsel is not reasonably objected to by the indemnifying party. If the
indemnifying party chooses to defend or prosecute a Third Party Claim, all the
Indemnified Parties shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information that
are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
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explanation of any material provided hereunder. If the indemnifying party
assumes the defense of a Third Party Claim, the Indemnified Party shall not
admit any liability with respect to, or settle, compromise or discharge, or
offer to settle, compromise or discharge, such Third Party Claim without the
indemnifying party's prior written consent (which consent shall not be
unreasonably withheld or delayed); provided, however, that if the indemnifying
party withholds its consent to a settlement of a Third Party Claim, Losses with
respect to which would be subject to the Buyer Indemnity Cap or the Old Mutual
Indemnity Cap, (i) for an amount equal to or less than the Buyer Indemnity Cap
or the Old Mutual Indemnity Cap, as the case may be, minus any amounts
previously paid by the indemnifying party or parties for Losses subject to the
limitations set forth in Section 9.3(b) or 9.3(c), as applicable, and the Third
Party Claim ultimately results in Losses in excess of such amount, the
indemnifying party shall be liable to the Indemnified Party for all Losses from
such Claim (notwithstanding the limitations set forth in Section 9.3(b) or
Section 9.3(c), as applicable) or (ii) for an amount in excess of the Buyer
Indemnity Cap or the Old Mutual Indemnity Cap, as applicable, minus any amounts
previously paid by the indemnifying party or parties for Losses subject to the
limitations set forth in Section 9.3(b) or 9.3(c), as applicable, and the Third
Party Claim ultimately results in Losses in excess of the proposed settlement
amount, the indemnifying party shall be liable to the Indemnified Party
(notwithstanding the limitations set forth in Section 9.3(b) or 9.3(c), as
applicable) for all Losses from such Third Party Claim less an amount equal to
the difference between (A) the amount of the proposed settlement to which the
indemnifying party did not consent and (B) the Buyer Indemnity Cap or the Old
Mutual Indemnity Cap, as the case may be, minus any amount previously paid by
the indemnifying party or parties for Losses subject to the limitations set
forth in Section 9.3(b) or 9.3(c), as applicable. If the indemnifying party
assumes the defense of a Third Party Claim, the Indemnified Party shall agree to
any settlement, compromise or discharge of a Third Party Claim that the
indemnifying party may recommend and that by its terms obligates the
indemnifying party to pay the full amount of the liability in connection with
such Third Party Claim, which releases the Indemnified Party completely in
connection with such Third Party Claim and that would not otherwise materially
adversely affect the Indemnified Party.
(c) Other Claims. In the event any Indemnified Party should have a claim
against any indemnifying party under Section 9.1 or 9.2 that does not involve a
Third Party Claim being asserted against or sought to be collected from such
Indemnified Party, the Indemnified Party shall deliver notice of such claim with
reasonable promptness to the indemnifying party. Subject to Sections 9.5 and
10.3, the failure by any Indemnified Party so to notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may have to
such Indemnified Party under Section 9.1 or 9.2, except to the extent that the
indemnifying party shall have been actually prejudiced by such failure.
Section 9.6. Exclusive Remedy. The parties hereto hereby acknowledge and
agree that, from and after the Closing, except (i) in the case of common law
fraud, (ii) with respect to matters for which the remedy of specific
performance, injunctive relief or other non-monetary equitable remedies are
available or (iii) with respect to claims in respect of Taxes (which shall be
governed by Article VIII), the sole and exclusive remedy of the parties hereto
with respect to any and all monetary claims arising from any breach of any
representation or warranty or covenant set forth herein shall be pursuant to the
indemnification provisions set forth in this Article IX.
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Section 9.7. Enforcement. The provisions of Sections 9.1(a) and 9.2(a) are
intended to be for the benefit of, and shall be enforceable by, each of the
Buyer Indemnitees and Holdings and their respective successors and permitted
assigns.
ARTICLE X
MISCELLANEOUS
Section 10.1. Amendments; Waiver. This Agreement may not be amended,
altered or modified except by written instrument executed by Holdings, the
Company and Buyer. Subject to the last sentence of this Section 10.1, any
agreement on the part of Holdings and Buyer to waive (i) any inaccuracies in the
representations and warranties contained herein by any of the Old Mutual
Parties, on the one hand, or Buyer, on the other hand, or in any document,
certificate or writing delivered pursuant hereto by any of the Old Mutual
Parties, on the one hand, or Buyer, on the other hand, or (ii) compliance with
any of the agreements, covenants or conditions contained herein, shall be valid
only if set forth in an instrument in writing signed on behalf of the party or
parties against whom the waiver is to be effective. No such waiver shall
constitute a waiver of, or estoppel with respect to, any subsequent or other
inaccuracy, breach or failure to strictly comply with the provisions of this
Agreement. Buyer shall not be permitted to waive the Company's compliance with
Section 5.15(b) with respect to the payment required to be made thereunder to
any employee of the Company who has entered into an employment agreement with
Buyer and the Company, to be effective from and after the Closing, including the
Employment Agreements, without the prior written consent of such employee;
provided that, for the avoidance of doubt, the parties agree that with respect
to such persons who have not entered into such employment agreements, any such
waiver by Buyer of such compliance shall not be deemed to alter or affect the
Company's obligations to such employee under his or her existing employment
agreement.
Section 10.2. Entire Agreement. This Agreement (including the Company
Disclosure Schedule, the Seller Disclosure Schedule, the Buyer Disclosure
Schedule, any other schedules, certificates, lists and documents referred to
herein, and any documents executed by the parties simultaneously herewith or
pursuant thereto) and the Confidentiality Agreement constitute the entire
agreement of the parties hereto, except as provided herein, and supersedes all
prior agreements and understandings, discussions, negotiations and
communications, written and oral, among the parties with respect to the subject
matter hereof.
Section 10.3. Survival of Representations, Warranties and Covenants. All
representations and warranties in this Agreement or in any instrument executed
and delivered in fulfillment of the requirements of this Agreement, and any
covenants or other agreements the performance of which is specified to occur on
or prior to the Closing Date or the Closing, shall survive the Closing until
March 31, 2004, except that the representations and warranties in Sections 2.5,
2.10(c), 2.14, 3.1 and 8.1 shall not terminate, but shall continue until the
expiration of the statute of limitations relating thereto. All covenants or
other agreements which by their terms are required to be performed after the
Closing shall survive the Closing indefinitely or for such lesser period of time
as may be specified herein.
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Section 10.4. No Other Representations and Warranties. Except for the
representations and warranties contained in Articles II and III of this
Agreement and in Section 8.1 or as may be set forth in any closing certificate
delivered hereunder, neither Holdings nor the Company nor any other Affiliate of
Parent (within the meaning of the first sentence only of the definition of
"Affiliate") makes any express or implied representation or warranty on behalf
of Holdings or the Company, and Holdings and the Company hereby disclaim any
such representation or warranty whether by Holdings, the Company, or any of
their respective Affiliates (within the meaning of the first sentence only of
the definition of "Affiliate"), officers, directors, employees, agents or
representatives or any other Person. Except for the representations and
warranties contained in Article IV of this Agreement or as may be set forth in
any closing certificate delivered hereunder, Buyer makes no express or implied
representation or warranty, and Buyer hereby disclaims any such representation
or warranty whether by Buyer or any of its Affiliates (within the meaning of the
first sentence only of the definition of "Affiliate"), officers, directors,
employees, agents or representatives or any other Person.
Section 10.5. Interpretation.
(a) When a reference is made in this Agreement to Sections or Schedules,
such reference shall be to a Section of or Schedule to this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The phrases "the date of this
Agreement," "the date hereof" and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to the date set forth in the first
paragraph of this Agreement.
(b) Each of the Company Disclosure Schedule, the Seller Disclosure Schedule
and the Buyer Disclosure Schedule shall set forth 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 one or more of
such party's representations or warranties or one or more of its covenants
contained in Article V, in each case making reference to the particular section
of this Agreement requiring such disclosure or to which exception is being
taken. Notwithstanding anything to the contrary in the preceding sentence,
disclosure of information in one section of the Company Disclosure Schedule, the
Seller Disclosure Schedule or the Buyer Disclosure Schedule shall constitute
disclosure of such information for the purposes of each other section of such
disclosure schedule but only to the extent that the specific relevance of such
disclosure as an exception to the representation, warranty or covenant
corresponding to such other section of such disclosure schedule is readily
apparent from such disclosure. The inclusion of any information in any section
of the Company Disclosure Schedule, the Seller Disclosure Schedule or the Buyer
Disclosure Schedule or other document delivered by any of the parties hereto
pursuant to this Agreement shall not be deemed to be an admission or evidence of
the materiality of such item, nor shall it establish a standard of materiality
for any purpose whatsoever.
Section 10.6. Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the
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remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
Section 10.7. Notices. Unless otherwise provided herein, all notices and
other communications hereunder shall be in writing and shall be deemed given if
(i) delivered in person, (ii) transmitted by telecopy (with written confirmation
and a copy of the notice or other communication mailed by certified or
registered mail, return receipt requested) or (iii) delivered by an express
courier (with written confirmation), to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
If to Holdings, or to the Company prior to the Closing Date:
Old Mutual (US) Holdings Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President & General Counsel
with a copy (which shall not constitute notice) to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Buyer or to the Company after the Closing Date:
The ▇▇▇▇ Nuveen Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Section 10.8. Binding Effect; Persons Benefiting; No Assignment. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their
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respective successors and assigns and any transferee of all or substantially all
of the assets of such party and its Subsidiaries taken as a whole, other than
(i) in the case of Holdings, any direct or indirect Subsidiary of Holdings or
Old Mutual plc, and (ii) in the case of Buyer, any direct or indirect Subsidiary
of Buyer or its corporate parent. Except as otherwise expressly set forth in
Article IX, no provision of this Agreement is intended or shall be construed to
confer upon any entity or Person other than the parties hereto and their
respective successors and permitted assigns any right, remedy or claim under or
by reason of this Agreement or any part hereof. This Agreement may not be
assigned by any of the parties hereto without the prior written consent of
Buyer, in the case of any assignment by an Old Mutual Party, or Holdings, in the
case of any assignment by Buyer.
Section 10.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement, it being understood that
all of the parties need not sign the same counterpart.
Section 10.10. Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 10.11. Governing Law. THIS AGREEMENT, THE LEGAL RELATIONS BETWEEN
THE PARTIES AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF, SHALL BE GOVERNED
BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO APPLICABLE CHOICE OF LAW PROVISIONS THEREOF.
Section 10.12. Consent to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally submits to the jurisdiction of any state or
federal court sitting in New York, New York and irrevocably agrees that all
actions or proceedings arising out of or relating to this agreement or the
transactions contemplated hereby shall be litigated exclusively in such courts.
Each of the parties hereto agrees not to commence any legal proceedings related
hereto except in such courts. Each of the parties hereto irrevocably waives any
objection which he or it may now or hereafter have to the laying of the venue of
any such proceeding in any such court and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
OLD MUTUAL (US) HOLDINGS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
NWQ INVESTMENT MANAGEMENT
COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
THE ▇▇▇▇ NUVEEN COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
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