Exhibit 2
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[FORM OF]
AMENDMENT NO. 1 TO
PARTNERSHIP ADMISSION AGREEMENT
This AMENDMENT NO. 1 (this "Amendment No. 1") to the PARTNERSHIP ADMISSION
AGREEMENT, dated as of September 23, 1996 (as so amended, the "Agreement") by
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and among New England Investment Companies, L.P., a Delaware limited partnership
("NEIC"), Jurika & Xxxxxx, Inc., a California corporation ("JV"), and the
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stockholders of JV listed on the signature pages thereto (collectively, the
"Stockholders") is entered into as of the 1st day of January, 1997.
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RECITALS
1. The parties to the Agreement desire to amend the Agreement.
2. The purpose of this Amendment No. 1 is to set forth the understanding of
the parties with respect to certain changes to the Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. DEFINITIONS. (a) The following additional terms shall be added to the list
of definitions in the Agreement and shall have the meaning set forth below:
"Deferred Equity Price" means (i) in respect of any calendar quarter
ending prior to the date of any Restructuring, the average Closing
Price of an LP Unit for the last ten Trading Days of the quarter; (ii)
in respect of any calendar quarter beginning after the date of any
Restructuring, (x) the average Closing Price of a Public Equity Unit
for the last ten Trading Days of the quarter multiplied by (y) the
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number of Public Equity Units that would have been received by JV for
each LP Unit, if JV had exchanged LP Units for Public Equity Units on
the last day of such quarter (the number determined pursuant to this
clause (y) for each quarter, the "Exchange Multiplier"); and (iii) in
respect of any calendar quarter in which a Restructuring occurs:
(x) the sum of --
(A)(I) the sum of the Closing Prices of Public Equity Units
for up to the last ten (10) Trading Days of the quarter that
fell on or after the date of the Restructuring multiplied by
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(II) the Exchange Multiplier for such quarter, and
(B)(I) if the number of Trading Days taken into account in
the immediately preceding paragraph (A) is less than ten
(with the amount by which such number is less than ten being
"x"), the sum of the Closing Prices of LP Units for the x
Trading Days immediately preceding the date of the
Restructuring, and (II) otherwise, zero, divided by
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(y) ten.
In the event that following any Restructuring, the capital structure
of NEIC and/or any publicly held entity that is formed or becomes
publicly held in connection with the Restructuring is not contemplated
by the foregoing definition of "Deferred Equity Price", then the
definition shall be amended so as to place JV to the extent possible
in the same position that it would have been in had the Restructuring
occurred in one of the manners contemplated. In addition, in
calculating the Deferred Equity Price in respect of any calendar
quarter, the relevant Closing Prices or the Exchange Multiplier shall
be adjusted to the extent necessary to reflect LP Unit or Public
Equity Unit splits, reverse LP Unit or Public Equity Unit splits,
distributions paid in LP Units or Public Equity Units, as the case may
be, or other capital transactions in respect of the LP Units or Public
Equity Units which would make such an adjustment appropriate.
"Hawaii Assets" means all of JV's right, title and interest to
Investment Contracts with clients located in Hawaii, and all fees
earned by JV with respect to such Investment Contracts from the
Closing Date to the Second Closing Date.
"Public Equity Unit" means a unit of common equity interest in the
publicly held entity, if any, which immediately after any
Restructuring holds LP Units held immediately prior to the
Restructuring by Public Partners of NEIC (as defined in NEIC's
partnership agreement).
"Restructuring" shall have the meaning given to it in NEIC's Amended
and Restated Partnership Agreement dated as of September 15, 1993.
"Second Closing" has the meaning set forth in Section 2.2.
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"Second Closing Date" has the meaning set forth in Section 2.2.
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(b) The following definitions shall be substituted for those
currently included in the Agreement:
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"Closing Price" shall mean (i) on any date prior to the date of any
Restructuring, the closing price on such date for an LP Unit on the
Exchange, and (ii) on any date falling on or after the date of any
Restructuring, the closing price on such date for a Public Equity Unit
on the Exchange, or if Public Equity Units are not listed or admitted
to trading on the Exchange, the closing price on such date for a
Public Equity Unit as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which Public Equity Units
are listed or admitted to trading, or if Public Equity Units are not
listed or admitted to trading on any national securities exchange, the
last quoted price, or if not so quoted, the average of the high bid
and low asked prices on such date for a Public Equity Unit in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system
is no longer in use, the principal other automated quotations system
that may then be in use or, if the Public Equity Units are not quoted
by any such organization, the average of the closing bid and asked
prices for such date for a Public Equity Unit as furnished by a
professional market maker making a market in Public Equity Units
selected by the general partner of NEIC.
"Trading Day" shall mean (i) prior to the date of any Restructuring, a
day during which the Exchange is open for business, and (ii) on or
after any Restructuring, a day on which the principal national
securities exchange on which Public Equity Units are listed or
admitted to trading is open for the transaction of business or, if
Public Equity Units are not listed or admitted to trading on any
national securities exchange, any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(c) The following definitions are hereby amended
"Assets." The last paragraph of the definition of Assets is hereby
amended to read in its entirety as follows:
"provided, however, that, with respect to the transfer by JV to
NEIC contemplated by Section 1.1(a), the term Assets shall
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exclude: (1) all cash, cash equivalents and accounts receivable
in excess of the Minimum Cash/Capital Requirement; (2) the
corporate minute books, stock transfer books and other corporate
records of JV and (3) those assets identified in Schedule 0.1A
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hereto, but shall include any cash, cash equivalents and accounts
receivable attributable to fees from Investment Contracts since
January 1, 1997.
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"Closing Run Rate Revenue." The definition of Closing Run Rate
Revenue is hereby amended by adding a new subsection at the end to
read as follows:
"(iii) Notwithstanding anything to the contrary contained herein
the Closing Run Rate Revenue for the eleven (11) broker wrap
accounts and the Xxxxx Xxxxxx Trust identified on Schedule 0.1(E)
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to this Amendment No. 1 will be the gross advisory fee revenue
that would be earned over the 12 months following January 1, 1997
as to such accounts assuming (i) that such business remains in
force and that both assets under management and fee rates remain
unchanged from those existing on January 1, 1997, and (ii) that
as to the Prudential Retail Clients, such determination shall be
made utilizing all such accounts that remain under management as
of the close of business on December 31, 1996 and as to which JV
has not been notified on or prior to such date that the
Prudential Retail Client intends to discontinue its relationship
with JVLP following the Closing, all as shown on the calculation
of Closing Run Rate Revenue reflected on Schedule 0.1(F) to this
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Amendment No. 1.
"Initial Run Rate Revenue." The definition of Initial Run Rate
Revenue is hereby amended by adding at the end thereof the following
language:
"provided, however, that notwithstanding anything to the contrary
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contained in the foregoing, the Initial Run Rate Revenue for the
eleven (11) broker wrap accounts and the Xxxxx Xxxxxx Trust
identified on Schedule 0.1E to this Amendment No. 1 is
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$9,862,535.
"Principal Stockholders." The definition of Principal Stockholders is
hereby amended and restated to read in its entirety as follows:
"Principal Stockholders" shall mean Xxxxxxx X. Xxxxxx and each
individual stockholder owning of record and beneficially
seven percent (7%) or more of the issued and outstanding
capital stock of JV."
2. AMENDMENT TO SECTION 1.1. A new Section 1.1(d) is hereby added to the
Agreement and shall read in its entirety as follows:
Notwithstanding Sections 1.1(a), (b) and (c), the parties agree that
the Hawaii Assets will be contributed by JV to NEIC at the Second
Closing instead of at the Closing and shall, during the interim
period, be subject to provision of any necessary administrative
services with respect to Investment Contracts included in the Hawaii
Assets as mutually agreed by JV and JVLP. At the Second Closing, JV
shall contribute its Hawaii
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Assets free and clear of any Lien other than those identified in
Section 3.11(a), and NEIC shall assume and become responsible for the
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Assumed Liabilities in respect of such Hawaii Assets, but in no event
including the Excluded Liabilities. Immediately upon completion of
such contribution, NEIC shall contribute, directly or indirectly, to
JVLP all of the Hawaii Assets, subject to the assumption by JVLP of
the Assumed Liabilities in respect of such Hawaii Assets, but in no
event shall such obligations include the Excluded Liabilities."
3. AMENDMENT TO SECTION 1.2.
3.1 Amendment to Section 1.2(a). Section 1.2(a) of the Agreement is
amended by adding in the fifth line thereof, after the word "cash" and
before the parenthetical the following language:
"together with interest thereon since January 1, 1997 through and
including January 3, 1997 at the rate payable in respect of funds
deposited in the Xxxxx & Xxxx Institutional Daily Income Fund."
3.2 Amendment to Section 1.2(b). (a) Section 1.2(b) of the Agreement
shall be amended by deleting the following text beginning in the
fifteenth line thereof: "(with the number of LP Units payable in
respect of a calendar quarter equal to 50% of the Deferred Payment
Amount that accrued during such quarter divided by the average Closing
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Price of LP Units for the last ten Trading Days of the quarter)", and
replacing such text with the following language:
"(with the number of LP Units payable in respect of a calendar quarter
equal to 50% of the Deferred Payment Amount that accrued during such
quarter divided by the Deferred Equity Price for such quarter)."
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(b) Clause (y) of Section 1.2(b) on page 11 of the Agreement is
amended by deleting the clause in its entirety and replacing such text
with the following language:
"(y) ending December 31, 1999 or"
(c) The last sentence of Section 1.2(b) of the Agreement is amended
by deleting the sentence in its entirety and replacing such text with
the following language:
"Notwithstanding anything to the contrary contained in this Section
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1.2(b), the total amount payable by NEIC as the Deferred Payment
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Amount shall not exceed $15 million (disregarding for purposes of such
calculation any increase or decrease in the value of LP Units or
Public Equity Units to which JV may have theretofore become entitled
as of the end of any quarterly period)."
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4. AMENDMENT TO ARTICLE II.
4.1 New Section 2.2. A new Section 2.2 is hereby added to the Agreement
and shall read in its entirety as follows:
"2.2 The closing of the contribution and assumption of Hawaii Assets
(the "Second Closing") will take place within three (3) business days
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after the first to occur of (i) the registration of JVLP as an
investment adviser under the laws of Hawaii or (ii) the elimination of
the requirement that JVLP be so registered under the laws of Hawaii,
at the offices of JVLP, or at such other time and place as the parties
hereto may mutually agree (the "Second Closing Date"). At the Second
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Closing, the following shall occur (and shall be deemed to occur in
immediate succession):
(a) JV shall deliver to NEIC any contribution, assignment and
other instruments relating to the contribution of the Hawaii
Assets to NEIC as NEIC and its counsel may reasonably request in
order to effect such contribution;
(b) NEIC shall deliver to JVLP any contribution, assignment and
other instruments as JV and its counsel may reasonably request in
order to evidence the contribution by NEIC, directly or
indirectly through one or more of its subsidiaries, to JVLP of
the Hawaii Assets; and
(c) JV shall deliver to NEIC, and NEIC shall deliver to JV, the
various certificates, instruments and documents referred to in
Article VII."
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5. REPRESENTATIONS AND WARRANTIES.
5.1 Organization. Section 3.1 of the Agreement is amended by deleting the
last sentence thereof and replacing it with the following language:
"JV is duly qualified to do business as a foreign corporation under
the laws of the States of Florida, Pennsylvania and Indiana and is not
by reason of the nature of its business or the ownership or leasing of
its properties required to be qualified to do business in any other
jurisdiction."
5.2 No Adverse Change. Section 3.7(c) of the Agreement is amended by
deleting the existing language and replacing it with the following language
to read as follows:
"JV has not issued or sold any interest, option, note or other
security (other than as permitted pursuant to Section 5.1(b))."
5.3 Taxes. Section 3.9(g) is amended by deleting the number "$1,000,000"
and replacing it with the number "$1,400,000".
5.4 Litigation; No Practices in Violation of Law. Section 3.15(b) is
hereby amended and restated in its entirety to read as follows:
"(b) Neither JV nor to JV's knowledge any Stockholder has engaged
in or is now engaging in any act, conspiracy or course of conduct
in violation of any applicable federal or state law or regulation
governing business practices, including without limitation
Section 28(e) of the Exchange Act and the regulations promulgated
thereunder or any other federal or state law governing "soft
dollar" transactions, nor has JV or to JV's knowledge any
Stockholder received any notice, claim or protest that such
person is now or has heretofore been so engaged."
5.5 NEIC Financial Statements. Section 4.13 of the Agreement is amended
by deleting from the fifth line thereof the words "changes in partners'
capital."
6. CONDUCT PRIOR TO CLOSING. Section 5.1(a) of the Agreement is amended by
deleting the existing language and replacing it with the following
language:
"issue or sell any interest, option, note or other securities (other
than as permitted pursuant to Section 5.1(b))."
7. CONSENTS AND APPROVALS. Section 6.1(c)(iii) of the Agreement is amended by
adding the following language at the end of such Section:
"Notwithstanding anything to the contrary contained in the foregoing,
NEIC
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agrees that JV may seek the consent of Retail Clients under the
wrap-fee programs sponsored by Prudential Securities ("Prudential") so
long as JV shall have sent a letter in the form of Exhibit 6.1(c) to
such Retail Clients on or before October 31, 1996 and so long as JV
shall have sent a second letter in the form of Exhibit 6.1(c)(iii) to
this Amendment No. 1 to such Retail Clients on or before December 31,
1996; provided, however, that nothing herein shall be deemed to modify
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any of JV's other obligations or the conditions to closing contained
in Article VII hereof including, without limitation, the condition
contained in Section 7.2(d)(iii), which shall remain unaffected
hereby."
8. UPDATED FINANCIAL STATEMENTS. Section 6.11(a) of the Agreement is amended
by deleting the text in its entirety and replacing such text with the
following language:
"Within 45 days following the completion of JV's last fiscal quarter
ending prior to the Closing Date, JV will deliver to NEIC the audited
balance sheet of JV as of the close of its fiscal year ended December
31, 1996, together with the related statements of income, cash flows
and changes in stockholders' equity for the fiscal year then ended,
accompanied by a report of independent auditors and all of which
balance sheet and financial statements (including the notes thereto)
are collectively called the "Interim Financials."
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9. CONDITION PRECEDENT.
9.1 Amendment to Section 7.2(a). Section 7.2(a) of the Agreement is
amended and restated in its entirety to read as follows:
"(a) DELIVERY OF ASSETS. JV shall have delivered to NEIC any
contribution, assignment or other instruments relating to the
contribution of Assets of JV (other than Hawaii Assets) as NEIC
and its counsel reasonably request to effect the contribution and
transfer of JV's Assets (other than Hawaii Assets) to JVLP."
9.2 Amendment to Section 7.3(b). Section 7.3(b) of the Agreement is
amended by deleting the words "Exhibit 7.3(b)" and replacing them with the
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words "New Exhibit 7.3(b)". The New Exhibit 7.3(b) is attached hereto and
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forms a part of the Agreement.
9.3 New Section 7.4. A new Section 7.4 is hereby added to the Agreement
and shall read in its entirety as follows:
"7.4 CONDITIONS PRECEDENT TO SECOND CLOSING. The obligations of
NEIC, JV and the Stockholders to consummate the Second Closing
shall be subject to the fulfillment or waiver at or prior to the
Second Closing of the following conditions:
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(a) INVESTMENT ADVISER REGISTRATION. JVLP shall have been
registered under the laws of Hawaii as an investment adviser or
the requirement that JVLP be so registered shall have been
eliminated.
(b) ABSENCE OF LITIGATION; NO ORDERS. No action or proceeding
shall have been instituted or threatened on or before the Second
Closing Date before any court or governmental body or authority
pertaining to the contribution of the Hawaii Assets, the results
of which could prevent or make illegal the consummation of such
transaction or which could be materially adverse to the business,
financial condition or results of operations of JV, JVLP or NEIC.
Neither NEIC, JVLP nor JV shall be subject to any order, decree
or injunction of a court or agency of competent jurisdiction
which either enjoins or prohibits the consummation of the
contribution of the Hawaii Assets.
(c) CERTIFICATE. JV shall have delivered to NEIC a certificate
dated as of the Second Closing Date and signed on its behalf by
its chief executive officer and its chief financial officer, to
the effect that at the Second Closing, JV shall have good and
sufficient title to the Hawaii Assets, free and clear of all
Liens other than those identified in Section 3.11(a).
10. AMENDMENT TO NON-COMPETITION PROVISIONS
10. Restricted Activities. Section 10.3(b) of the Agreement is amended by
adding at the end thereof the following language:
"Notwithstanding anything in this Agreement to the contrary, none
of the restrictions contained in this Section 10.3(b) or in
Section 8 of the Employment Agreements shall apply to the
rendering of investment advisory services by JV or any
Stockholder in respect of the Hawaii Assets before the Second
Closing."
11. UPDATED SCHEDULES. Pursuant to Section 5.2 of the Agreement, the
following schedules are amended and superseded in their entirety by the
following updated schedules attached to this Amendment No. 1: (a) Schedule
0.1D relating to Terminable Contracts, (b) Schedule 3.19(b)(i) relating to
Relationship Changes, (c) Schedule 7.2(d)(ii) relating to consents of
Terminable Contracts not required and (d) Schedule 3.10 relating to
shareholders.
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12. ADDITIONAL COVENANT. A new Section 10.5 of the Agreement is hereby added:
"10.5. Post Closing Information. After the Closing, JV agrees to
permit NEIC and any advisors, agents and representatives as may be
designated from time to time by NEIC (including, without limitation
attorneys, auditors and financial advisors) access to JV to
communicate with JV's present or former officers, employees and
advisors (including, without limitation, its attorneys, accountants
and financial advisors) and to inspect and copy its records and
documents in its custody, care or control, including, without
limitation, any documents or correspondence submitted to or received
from the SEC, any other state or federal governmental agency or any
state or federal court relating to any pre-closing activities by JV as
an investment adviser which may present any exposure to JVLP. To the
extent JVLP has not done so, JV shall upon request furnish to NEIC
copies of all correspondence and other materials received by JV from
the SEC or sent by JV to the SEC.
13. MISCELLANEOUS
13. Ratification. By their execution of this Amendment No. 1, the
Stockholders hereby ratify, confirm and approve in all respects the
Agreement and all of its provisions.
13. Captions. The Section captions used in this Amendment No. 1 are for
reference purposes only, and shall not in any way affect the meaning
or interpretation of this Agreement.
13. Counterparts. This Amendment No. 1 may be executed in two or more
counterparts, all of which taken together shall constitute one
instrument.
13. Entire Agreement. The Agreement, including this Amendment No. 1, and
the other documents referred to in the Agreement, contain the entire
understanding of the parties hereto with respect to the subject matter
in the Agreement. The Agreement, which includes this Amendment No. 1,
supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement, all as
of the date first written above.
JURIKA & XXXXXX, INC.
By:
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Title: President
STOCKHOLDERS
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Xxxxxxx Xxxxxx
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Xxxxx Xxxxxx
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Xxxxx Xxxxxxxxxxx
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Xxxxxxx Xxx
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Xxxx Xxxx Xxxxx
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Xxxxxx Xxxxxx
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Xxxxx Xxxxxxx
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Xxxxx Xxxxxx
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Xxxx Xxxxxx
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Xxxx Xxxxx
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Xxxx Xxx
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Xxxx Xxxxx
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Xxxxxx Xxxxxx
NEW ENGLAND INVESTMENT COMPANIES, L.P.
By: NEW ENGLAND INVESTMENT COMPANIES,
INC., its general partner
By:
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Title:
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STOCKHOLDER:
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Xxxx Xxxx Xxxxx, Special Trustee
for Xxxxxxx X. Xxxxxx under the
Jurika 1989 Family Trust
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List of Omitted Schedules and Exhibits
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Schedule 0.1(D) Terminable Contracts
Schedule 0.1(E) Initial Run Rate Revenue for certain accounts
Schedule 0.1(F) Closing Run Rate Revenue
Schedule 3.10 Shareholders
Schedule 3.19(b)(i) Relationship Changes
Schedule 7.2(d)(ii) Consents of Terminable Contracts
Exhibit 6.1(c)(iii) Form of Consent Letter
Exhibit 7.3(b) Form of Bonus Plan
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