1
EXHIBIT 10.71
RESTRUCTURING CONTRIBUTION AND ISSUANCE AGREEMENT
This Restructuring Contribution and Issuance Agreement dated as of
December 31, 1997 (this "Agreement"), is entered into by and between the Public
Unitholders of PIMCO Advisors L.P., a Delaware limited partnership ("PIMCO
Advisors"), and Xxxxxxxxxxx Capital, L.P., a Delaware limited partnership
("Opcap LP"). Initially capitalized terms used herein and not otherwise defined
herein are defined in the Amended and Restated Agreement of Limited Partnership
of PIMCO Advisors L.P. dated October 31, 1997 (the "PIMCO Advisors Partnership
Agreement").
RECITALS:
WHEREAS, pursuant to Section 16.1 of the PIMCO Advisors Partnership
Agreement, if the General Partners of PIMCO Advisors determine that as a result
of, among other things, the enactment of legislation, there is a substantial
risk of an Adverse Partnership Tax Event or a Tax Realization Event, the
General Partners have the authority to effect one or more Restructurings of
PIMCO Advisors, including, but not limited to, (a) the creation of one or more
Business Entities controlled by the General Partners, Affiliates of the
General Partners or Affiliates of PIMCO Advisors, (b) the transfer of all or
any part of the business or assets of PIMCO Advisors to one or more existing or
newly-created Business Entities in exchange for interests in such Business
Entities, (c) the initiation of exchange or redemption transactions which will
permit and may automatically effect, without the consent of any Limited
Partner, the exchange of some or all of the PIMCO Advisors LP Units for
interests in one or more existing or newly-created Business Entities, (d) the
imposition of substantial restrictions on the transferability of some or all of
the PIMCO Advisors LP Units, and (e) causing PIMCO Advisors and any one or
more Successor Entities to enter into agreements governing their relationships
following the restructuring, on terms and conditions determined by the General
Partners, including agreements relating to the issuance of and sale of
securities of the Successor Entity, the acquisition by a Successor Entity of
businesses or assets and the contribution of such businesses or assets to PIMCO
Advisors in exchange for PIMCO Advisors Units, the adoption by a Successor
Entity of employee benefit plans for the benefit of PIMCO Advisors employees
and the exchange of outstanding PIMCO Advisors units for securities of the
Successor Entity upon request by the holders of PIMCO Advisors Units;
WHEREAS, pursuant to Section 16.3 of the PIMCO Advisors Partnership
Agreement, the General Partners have the authority to execute, deliver and
perform all documents and instruments, and to take all actions and do such
things that the General Partners deem necessary and appropriate in connection
with any Restructuring pursuant to Article XVI of the PIMCO Advisors
Partnership Agreement, without the approval of the Public Unitholders (the
"Authorization");
WHEREAS, the General Partners of PIMCO Advisors have determined that as
a result of legislation enacted as part of the Taxpayer Relief Act of 1997,
there will be an Adverse Partnership Tax Event unless the PIMCO Advisors Class
A LP Units cease to be publicly traded
2
prior to January 1, 1997, and have determined it appropriate to effect a
Restructuring of PIMCO Advisors wherein each Public Unitholder will contribute
its PIMCO Advisors LP Units to Opcap LP in exchange for an equal number of
units of limited partner interest in Opcap LP ("Opcap LP Units");
WHEREAS, the restructuring will result in each Public Unitholder
ceasing to be a Limited Partner of PIMCO Advisors and being admitted as a
limited partner of Opcap LP;
WHEREAS, pursuant to Sections 9.01 and 13.06 of the Amended and
Restated Agreement of Limited Partnership of Xxxxxxxxxxx Capital, L.P. dated
March 14, 1991, as amended (the "Opcap LP Partnership Agreement"), the general
partner of Opcap LP has the authority to issue additional limited partner
interests and admit additional limited partners upon making an Assignment
Determination and a Tax Determination, as those terms are defined in the Opcap
LP Partnership Agreement, and upon obtaining an opinion of a nationally
recognized investment banking firm that such issuance is fair to the limited
partners who are not affiliates of the general partner from a financial point
of view (a "Fairness Opinion");
WHEREAS, the general partner of Opcap LP has made an Assignment
Determination and a Tax Determination, and has obtained a Fairness Opinion from
Lazard Freres & Company LLC;
WHEREAS, PIMCO Partners G.P., a California general partnership ("PGP"),
and Opcap LP, as general partners of PIMCO Advisors and pursuant to the power
and authority granted to them under the PIMCO Advisors Partnership Agreement
including, without limitation, Sections 16.1 and 16.3, desire to cause the
PIMCO Advisors LP Units held by the Public Unitholders to be contributed to
Opcap LP in exchange for an equal number of Opcap LP Units; and
WHEREAS, PGP, as the general partner of Opcap LP, desires to cause
Opcap LP to accept contributions from the Public Unitholders of their PIMCO
Advisors LP Units in exchange for issuance of an equal number of Opcap LP Units
and to admit the Public Unitholders as limited partners of Opcap LP;
NOW, THEREFORE, the undersigned, in consideration of the premises,
covenants and agreements contained herein, do hereby agree as follows:
1. Contribution. Pursuant to the Authorization, in exchange for an
equal number of Opcap LP Units, each Public Unitholder, individually, and the
Public Unitholders, collectively, upon the execution and delivery of this
Agreement by the parties hereto as of the date hereof, do hereby contribute,
transfer and convey all their PIMCO Advisors LP Units to Opcap LP. Upon
execution of this Agreement, Opcap LP does hereby assume the rights and
obligations assigned to such units in the PIMCO Advisors Partnership Agreement.
2. Issuance and Admission. In exchange for the contribution to
Opcap LP of the PIMCO Advisors LP Units, Opcap LP does hereby issue to each
Public Unitholder a number of Opcap LP Units equal to the number of PIMCO
Advisors LP Units contributed by such Public Unitholder pursuant to Section 1.
Concurrent with the contribution and issuance of the units of limited partner
interest herein, each Public Unitholder is hereby admitted as a limited partner
of Opcap LP. Upon the issuance of the Opcap LP Units as set forth herein, PGP
in its capacity as
2
3
general partner of Opcap LP shall cause Opcap LP to issue one or more
certificates evidencing the number of Opcap LP Units so issued. PGP shall also
cause the registration of the issuance of Opcap LP Units issued hereunder.
3. Acceptance and Binding. Pursuant to the Authorization, each
Public Unitholder does hereby become a limited partner of Opcap LP, accepts all
of the terms and conditions of the Opcap LP Partnership Agreement and agrees to
comply with and be bound by the Opcap LP Partnership Agreement, as the same may
be amended from time to time including granting the power of attorney in
accordance with Article XVII of the Opcap LP Partnership Agreement.
4. Books and Records. The parties hereto shall take all actions
necessary under the Delaware Revised Uniform Limited Partnership Act, the PIMCO
Advisors Partnership Agreement and the Opcap LP Partnership Agreement to
evidence the contribution of the PIMCO Advisors LP Units to Opcap LP, the
issuance of the Opcap LP Units to the Public Unitholders, and the admission of
the Public Unitholders as limited partners in Opcap LP.
5. Binding Effect. This Agreement shall be binding upon, and shall
enure to the benefit of, the parties hereto and their respective successors and
assigns.
6. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
7. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware, all rights
and remedies being governed by such laws, without regard to its conflict of
laws rules.
[Signatures Follow]
3
4
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed as of the day and year first above written.
PUBLIC UNITHOLDERS
All Public Unitholders of PIMCO Advisors
L.P. pursuant to authorizations recited
in favor of or granted to the General
Partner under Section 16.3 of the
Amended and Restated Agreement of
Limited Partnership of PIMCO Advisors
L.P. dated October 31, 1997, as amended
By: PIMCO PARTNERS, G.P.,
General Partner
By: PACIFIC INVESTMENT MANAGEMENT
COMPANY, a General Partner
By:
--------------------------------
Name:
Title:
By: PIMCO PARTNERS LLC,
a General Partner
By:
--------------------------------
Name:
Title:
4
