1
EXHIBIT 2.2
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST FILED WITH THE COMMISSION. ASTERISKS (*) IDENTIFY WHERE SUCH
CONFIDENTIAL INFORMATION HAS BEEN OMITTED. THE OMITTED PORTIONS HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
AGREEMENT AND PLAN OF REORGANIZATION
by and among
AFFILIATED MANAGERS GROUP, INC.
as "AMG"
AMG MERGER SUB, INC.
as "Merger Sub"
GEOCAPITAL CORPORATION
the "Company"
GEOCAPITAL, LLC
the "LLC"
and
the Stockholders of the Company
Dated August 15, 1997
2
AGREEMENT AND PLAN OF REORGANIZATION
INDEX
Page
SECTION 1. THE MERGER.................................................. 2
1.1 The Merger.................................................. 2
1.2 Effective Time.............................................. 2
1.3 Effects of the Merger....................................... 2
1.4 Certificate of Incorporation................................ 2
1.5 By-Laws..................................................... 2
1.6 Directors and Officers...................................... 2
1.7 Conversion of Securities of the Company..................... 3
1.8 Time and Place of Closing................................... 3
1.9 Further Assurances.......................................... 4
SECTION 2. RESTATEMENT OF LLC AGREEMENT................................ 4
2.1 Restatement of LLC Agreement................................ 4
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS................................................ 4
3.1 Making of Representations and Warranties.................... 4
3.2 Organization and Qualification of the Company and the LLC... 4
3.3 Capitalization; Beneficial Ownership........................ 5
3.4 Subsidiaries................................................ 5
3.5 Authority of the Company.................................... 6
3.6 Real and Personal Property.................................. 7
3.7 Assets Under Management..................................... 7
3.8 Financial Statements........................................ 8
3.9 Taxes....................................................... 9
3.10 Collectibility of Accounts Receivable....................... 11
3.11 Absence of Certain Changes.................................. 11
3.12 Ordinary Course............................................. 12
3.13 Banking Relations........................................... 12
3.14 Intellectual Property....................................... 13
3.15 Contracts................................................... 14
3.16 Litigation.................................................. 15
3.17 Compliance with Laws........................................ 16
3.18 Business; Registrations..................................... 16
3.19 Insurance................................................... 17
3.20 Powers of Attorney.......................................... 17
3.21 Finder's Fee................................................ 17
3.22 Corporate Records; Copies of Documents...................... 17
3.23 Transactions with Interested Persons........................ 18
(i)
3
Page
3.24 Employee Benefit Programs.................................. 18
3.25 Directors, Officers and Employees.......................... 20
3.26 Code of Ethics............................................. 21
3.27 Certain Representations and Warranties as to Collective
Investment Vehicles........................................ 22
3.28 Disclosure................................................. 23
3.29 No Implied Representation.................................. 24
SECTION 4. REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL
STOCKHOLDERS............................................... 24
4.1 Authority and Organization................................. 24
4.2 Ownership of LLC Interests................................. 26
4.3 Finder's Fee............................................... 26
4.4 Investment Advisory Representation......................... 26
4.5 Agreements................................................. 26
4.6 Employment Data............................................ 27
4.7 Investment Intent.......................................... 27
SECTION 5. COVENANTS OF THE STOCKHOLDERS.............................. 27
5.1 Making of Covenants and Agreements......................... 27
5.2 Client Consents............................................ 27
5.3 Authorizations............................................. 27
5.4 Authorization from Others.................................. 28
5.5 Conduct of Business........................................ 28
5.6 Financial Statements....................................... 30
5.7 Preservation of Business and Assets........................ 30
5.8 Observer Rights and Access................................. 30
5.9 Notice of Default.......................................... 30
5.10 Consummation of Agreement.................................. 31
5.11 Cooperation of the Company and Stockholders................ 31
5.12 No Solicitation of Other Offers............................ 31
5.13 Confidentiality............................................ 31
5.14 Policies and Procedures.................................... 32
5.15 Violation of Existing LLC Agreement........................ 32
5.16 Subsidiaries; Investments in Other Persons................. 32
5.17 LLC Interests.............................................. 32
5.18 Employee Programs.......................................... 32
5.19 Foreign Qualifications..................................... 32
5.20 Liens...................................................... 32
SECTION 6. REPRESENTATIONS AND WARRANTIES OF AMG...................... 33
6.1 Making of Representations and Warranties................... 33
6.2 Organization of AMG........................................ 33
(ii)
4
Page
6.3 Capitalization............................................. 33
6.4 Subsidiaries............................................... 33
6.5 Authority of AMG........................................... 33
6.6 Financial Statements....................................... 34
6.7 Absence of Changes......................................... 34
6.8 Litigation................................................. 34
6.9 Compliance with Laws....................................... 35
6.10 Finder's Fee............................................... 35
6.11 Permits.................................................... 35
6.12 Merger Sub................................................. 35
6.13 Acquisition of Shares for Investment....................... 35
6.14 No Implied Representations................................. 35
SECTION 7. COVENANTS OF AMG........................................... 36
7.1 Making of Covenants and Agreement.......................... 36
7.2 Confidentiality............................................ 36
7.3 Cooperation of AMG......................................... 36
7.4 Consummation of Agreement.................................. 36
7.5 Organization and Authorization of Merger Sub............... 36
SECTION 8. CONDITIONS TO THE OBLIGATIONS OF AMG AND
MERGER SUB................................................. 37
8.1 Litigation; No Opposition.................................. 37
8.2 Representations, Warranties and Covenants.................. 37
8.3 Advisory Contract Consents................................. 38
8.4 Registration as an Investment Adviser and Registration of
Investment Adviser Representatives......................... 39
8.5 Other Approvals............................................ 40
8.6 Transfer................................................... 40
8.7 Restated LLC Agreement..................................... 40
8.8 Non Solicitation/Non Disclosure Agreements................. 40
8.9 Employment Agreements...................................... 40
8.10 Agreements With Respect to Private Funds................... 40
8.11 Capitalization, Net Worth and Working Capital of the LLC... 41
8.12 Delivery................................................... 41
8.13 Evidence of Insurability................................... 42
8.14 Insurance Policies......................................... 43
8.15 Policies and Procedures.................................... 43
8.16 Material Adverse Change.................................... 43
8.17 HSR Act.................................................... 43
8.18 License to Use Name........................................ 43
(iii)
5
Page
SECTION 9. CONDITIONS TO OBLIGATIONS OF THE COMPANY................... 43
9.1 No Litigation; No Opposition............................... 43
9.2 Representations, Warranties and Covenants.................. 43
9.3 Advisory Client Consent.................................... 44
9.4 Employment Agreements...................................... 44
9.5 Material Adverse Change.................................... 44
9.6 Delivery................................................... 44
9.7 Tax Opinion................................................ 45
9.8 HSR Act.................................................... 45
9.9 Preferred Shares........................................... 45
SECTION 10. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED................ 45
10.1 Termination................................................ 45
10.2 Effect of Termination; Expenses............................ 46
10.3 Right to Proceed........................................... 46
SECTION 11. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING............... 46
11.1 Survival of Representations, Warranties and Covenants...... 46
11.2 Regulatory Filings......................................... 47
SECTION 12. INDEMNIFICATION............................................ 47
12.1 Indemnification by the Stockholders........................ 47
12.2 Limitations on Indemnification by the Stockholders......... 48
12.3 Indemnification by AMG..................................... 48
12.4 Limitation on Indemnification by AMG....................... 49
12.5 Notice; Defense of Claims.................................. 49
12.6 Satisfaction of the Stockholders' Indemnification
Obligations................................................ 50
SECTION 13. DEFINITIONS................................................ 50
13.1 Definitions................................................ 50
SECTION 14. MISCELLANEOUS.............................................. 54
14.1 Fees and Expenses.......................................... 54
14.2 Dispute Resolution......................................... 54
14.3 Waivers.................................................... 54
14.4 Governing Law.............................................. 55
14.5 Notices.................................................... 55
14.6 Entire Agreement........................................... 57
14.7 Assignability; Binding Effect.............................. 57
14.8 Amendments................................................. 57
14.9 Consent to Jurisdiction.................................... 57
14.10 Captions and Gender........................................ 57
14.11 Execution in Counterparts.................................. 58
(iv)
6
14.12 Publicity and Disclosures.................................. 58
EXHIBITS
Exhibit 1.2 - Form of Certificate of Merger
Exhibit 2.1 - Form of Restated LLC Agreement
Exhibit 5.2A - Form of Client Consent (Affirmative)
Exhibit 5.2B - Form of Client Consent (Negative)
Exhibit 8.6 - Form of Asset Transfer Agreement
Exhibit 8.8 - Form of Non Solicitation Agreement
Exhibit 8.9 - Form of Employment Agreement
Exhibit 8.10A - Form of Agreement With Respect to Xxxxxxxx
Exhibit 8.10B - Form of Agreement With Respect to Applewood
Exhibit 8.12(k) - Form of Opinion(s) of Counsel to the Company, the
Stockholders and the Management Corporations
Exhibit 8.12(l) - Form of Release
Exhibit 8.12(n) - Form of Subscription Agreement
Exhibit 8.18 - Form of License Agreement
Exhibit 9.6(f) - Form of Opinion of Counsel to AMG and Merger Sub
SCHEDULES
Schedule 1.7 - Allocation of Merger Consideration
Schedule 3.3(b) - Capital Stock; Voting Agreements
Schedule 3.3(c) - LLC Capitalization pre-Closing
Schedule 3.5 - Approvals; Waivers
Schedule 3.6(a) - Real Property
Schedule 3.6(b) - Personal Property
Schedule 3.7 - Advisory Contracts; Assets Under Management
Schedule 3.8 - Financial Statements
Schedule 3.9 - Taxes
Schedule 3.10 - Accounts Receivable
Schedule 3.11 - Adverse Change
Schedule 3.13 - Banking Relationships
Schedule 3.14 - Intellectual Property
Schedule 3.15 - Contracts; Commitments
Schedule 3.19 - Insurance
Schedule 3.23 - Transaction with Interested Persons
Schedule 3.24 - Employee Benefits
Schedule 3.25(a) - Directors and Officers; Certain Employees
Schedule 3.25(b) - Employees Health
Schedule 3.25(c) - Employment Arrangements
Schedule 4.1(c) - Capitalization of the Management Corporations
(v)
7
Schedule 4.4 - Investment Advisers
Schedule 4.6 - Employment Data
Schedule 5.5 - Conduct of Business; Exceptions
Schedule 6.3 - Capitalization of AMG
Schedule 6.4 - Subsidiaries of AMG
Schedule 6.6 - Financial Statements of AMG
Schedule 6.7 - Adverse Change with respect to AMG
Schedule 6.8 - Litigation with respect to AMG
(vi)
8
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT entered into as of August 15, 1997, by and among Affiliated
Managers Group, Inc., a Delaware corporation ("AMG"), AMG Merger Sub, Inc., a
Delaware Corporation and a wholly owned subsidiary of AMG ("Merger Sub"),
GeoCapital Corporation, a Delaware corporation (the "Company"), GeoCapital, LLC,
a Delaware limited liability company (the "LLC"), Xxxxx Xxxxxx, Xxxxx X.
Xxxxxxxxx, Xxxx Xxxxxx, Xxxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxxx
and Xxxxxx X. Xxxxxxxxx (together, the "Stockholders" and, each individually, a
"Stockholder").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the business of providing investment
management and advisory services to private accounts of certain institutional
and individual investors;
WHEREAS, the Stockholders own of record and beneficially all of the issued
and outstanding capital stock of the Company, consisting of one hundred (100)
shares of the Company's Common Stock, $1.00 par value per share (the "Company
Common Stock");
WHEREAS, the parties hereto desire, and the Boards of Directors of AMG and
the Company have each determined that it is in the best interests of their
respective stockholders, and the stockholders of the Company have determined to
enter into this agreement providing for the acquisition by AMG, by means of a
merger of the Company into Merger Sub, of all of the Company's interest in the
LLC and further desire that, in connection therewith, the LLC's Existing Limited
Liability Company Agreement be amended and restated into the Restated LLC
Agreement (as these and other capitalized terms are defined in Section 13.1);
WHEREAS, the parties hereto desire and intend, and it is a condition
precedent to the obligations of AMG and Merger Sub hereunder, that five full
business days prior to the closing of the transactions contemplated hereby, the
Company will, and the Stockholders will cause the Company to, contribute
substantially all the assets and liabilities of the Company to the LLC, as more
fully described below, in exchange for LLC Points and a Capital Account in the
LLC pursuant to the Asset Transfer Agreement; and
WHEREAS, to induce AMG to enter into this Agreement, and to receive the
benefits that will accrue to them if the Company merges with and into Merger Sub
as contemplated hereby, the Company, the LLC and the Stockholders have agreed to
make certain representations, warranties and covenants as set forth herein.
NOW, THEREFORE, to consummate said merger and in consideration of the
mutual agreements set forth herein and other valuable consideration, the receipt
and adequacy whereof are hereby acknowledged, the parties hereto agree as
follows:
9
SECTION 1. THE MERGER.
1.1 THE MERGER. Subject to the terms, provisions and conditions contained
in this Agreement, and on the basis of the representations, warranties and
covenants herein set forth, at the Effective Time (as such term is defined in
Section 1.2), in accordance with this Agreement and the Delaware General
Corporation Law, the Company hereby agrees to, and the Stockholders hereby agree
to use their respective best efforts to cause the Company to, merge with and
into Merger Sub (the "Merger"). Merger Sub shall be the surviving corporation
(sometimes referred to herein as the "Surviving Corporation") of the Merger and
shall continue its corporate existence under the laws of the State of Delaware
as a subsidiary of AMG, but shall change its name to "GeoCapital Corporation."
Upon consummation of the Merger, the separate corporate existence of the Company
shall terminate.
1.2 EFFECTIVE TIME. The Merger shall become effective as set forth in the
certificate of merger in the form attached hereto as Exhibit 1.2 (the
"Certificate of Merger") which shall be filed with the Secretary of State of the
State of Delaware on the date of the Closing (as defined in Section 1.8). The
term "Effective Time" shall be the date and time when the Merger becomes
effective, as set forth in the Certificate of Merger. The parties hereto agree
to execute, act on and make all filings or other recordings required in
connection with the Merger.
1.3 EFFECTS OF THE MERGER. At and after the Effective Time, the Merger
shall have the effects provided herein and set forth in the applicable
provisions of the Delaware General Corporation Law. Without limiting the
generality of the foregoing and subject thereto, at the Effective Time, all the
property, rights, privileges, powers and franchises of the Company and Merger
Sub shall vest in the Surviving Corporation, and all debts, liabilities,
obligations, restrictions, disabilities and duties of the Company and Merger Sub
shall become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation (it being understood that (i) the
Stockholders shall be liable for certain liabilities set forth in Section 12 of
this Agreement and (ii) all liabilities of the Company, other than the Excluded
Liabilities (as such term is defined in the Asset Transfer Agreement) shall have
been transferred to the LLC pursuant to the Asset Transfer).
1.4 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of the
Surviving Corporation shall be the Certificate of Incorporation of Merger Sub
immediately prior to the Effective Time, until thereafter amended in accordance
with applicable law and such Certificate.
1.5 BY-LAWS. Unless otherwise determined by AMG prior to the Effective
Time, the By-Laws of the Surviving Corporation shall be the By-Laws of Merger
Sub immediately prior to the Effective Time, until thereafter amended in
accordance with applicable law and such By-Laws.
1.6 DIRECTORS AND OFFICERS. Unless otherwise determined by AMG prior to
the Effective Time, the initial directors and officers of the Surviving
Corporation shall be the directors and officers of Merger Sub immediately prior
to the Effective Time, each to hold office in
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accordance with the Certificate of Incorporation and By-laws of the Surviving
Corporation until their respective successors are duly elected or appointed and
qualified.
1.7 CONVERSION OF SECURITIES OF THE COMPANY.
(a) At the Effective Time, all of the shares of Company Common Stock
issued and outstanding immediately prior to the Effective Time and all rights
attached thereto, shall, by virtue of this Agreement and without any action on
the part of the holder thereof, be converted into the right to receive, subject
to adjustment as provided in this Section 1.7, (i) cash in the aggregate amount
of Fourteen Million and Four Hundred Thousand Dollars ($14,400,000) and (ii) ten
thousand six hundred sixty-six and two-thirds (10,666 2/3) shares of Preferred
Stock (the "Preferred Shares") of AMG having an aggregate purchase price of Nine
Million Six Hundred Thousand Dollars ($9,600,000) (together, the "Merger
Consideration"). The Merger Consideration shall be payable to the Stockholders
in the specific amounts set forth in Schedule 1.7 hereto.
(b) If, as of the Closing, the Company shall have received Consents
from clients whose investment advisory agreements provide for the payment (based
on the Contract Value of each such investment advisory agreement) of fees
constituting less than ninety-five percent (95%) of the Base Fees, then (i) the
cash amount delivered to each Stockholder pursuant to clause (i) of Section
1.7(a) above, will be reduced to an amount equal to the product of (A) the cash
amount set forth in Schedule 1.7 opposite such Stockholder's name, multiplied by
(B) a fraction (the "Adjustment Fraction"), (x) the numerator of which shall be
the sum of the Contract Values of each investment advisory agreement of the
Company which has not been terminated at or prior to the Closing, and with
respect to which the Client of the Company has given its Consent, plus an
additional amount equal to five percent (5%) of Base Fees, and (y) the
denominator of which shall be the Base Fees, and (ii) the number of Preferred
Shares delivered by AMG to each Stockholder pursuant to clause (ii) of Section
1.7(a) above will be reduced to a number equal to the product of (A) the number
of Preferred Shares set forth in Schedule 1.7 opposite such Stockholder's name,
multiplied by (B) the Adjustment Fraction.
(c) All of the shares of Company Common Stock converted into the
right to receive the Merger Consideration pursuant to this Section 1.7 shall no
longer be outstanding and shall automatically be canceled and shall ceased to
exist, and each certificate previously representing any such shares of Company
Common Stock shall thereafter represent only the right to receive the portion of
the Merger Consideration into which the shares of Company Common Stock
represented by such certificate have been converted pursuant to this Section
1.7. Certificates previously representing shares of Company Common Stock shall
be surrendered at the Closing and shall be exchanged for Merger Consideration
paid in consideration therefor, without any interest thereon.
1.8 TIME AND PLACE OF CLOSING. The closing of the Merger and the related
transactions provided for in this Agreement (herein called the "Closing") shall
be held at the offices of Xxxxxxx, Procter & Xxxx LLP at Exchange Place, Boston,
Massachusetts at 10:00 a.m. local time
3
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on the date of the Closing, which shall be five (5) business days after the
fulfillment or waiver of each of the conditions set forth in Sections 8 (other
than Section 8.13) and 9 (other than Section 9.4) hereof or at such other place,
or an earlier or later date or time as may be mutually agreed upon by AMG and
the Company.
1.9 FURTHER ASSURANCES. The Stockholders shall (and shall use their best
efforts to cause the Company to), from time to time after the Closing, at the
request of AMG and without further consideration, execute and deliver further
instruments of transfer and assignment and take such other action as AMG may
reasonably require to fully implement the provisions of this Agreement.
SECTION 2. RESTATEMENT OF LLC AGREEMENT.
2.1 RESTATEMENT OF LLC AGREEMENT. Simultaneously with the Closing, the
Existing LLC Agreement shall be amended and restated in substantially the form
attached hereto as Exhibit 2.1.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS.
3.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement to
AMG and Merger Sub to enter into this Agreement and consummate the transactions
contemplated hereby, the Stockholders jointly and severally hereby make to AMG
and Merger Sub the representations and warranties contained in this Section 3;
provided, however, each of the Stockholders severally and not jointly, makes the
representations set forth in Section 3.3(b) hereof and each Stockholder
severally and not jointly makes any other representation or warranty made solely
by such Stockholder. None of the Stockholders shall have any right of indemnity
or contribution from the Company or the LLC (or any other right against the
Company or the LLC) with respect to any breach of a representation or warranty
hereunder.
3.2 ORGANIZATION AND QUALIFICATION OF THE COMPANY AND THE LLC.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware with full corporate
power and authority to own or lease its properties and to conduct its business
in the manner and in the places where such properties are owned or leased or
such business is currently conducted or proposed to be conducted. The copies of
the Company's Certificate of Incorporation, as amended to date (the "Certificate
of Incorporation"), certified by the Secretary of State of the State of
Delaware, and of the Company's By-laws, as amended to date, certified by the
Company's Secretary, and heretofore made available to AMG's counsel, are
complete and correct, and no amendments thereto are pending. The Company is not
in violation of any term of its Certificate of Incorporation or By-laws.
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(b) The Company is duly qualified to do business as a foreign
corporation under the laws of each jurisdiction in which the nature of its
business or the ownership or leasing of its properties requires such
qualification, except for those jurisdictions where the failure to so qualify,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company.
(c) The copies of the LLC's Existing LLC Agreement, certified by the
Secretary of the Company in its capacity as manager member of the LLC, and of
the LLC's Existing Certificate of Formation, certified by the Secretary of State
of the State of Delaware, and heretofore delivered to AMG's counsel, are
complete and correct, and no amendments thereto are pending (except, in each
case, as contemplated by Section 2 hereof).
3.3 CAPITALIZATION; BENEFICIAL OWNERSHIP.
(a) The authorized capital stock of the Company consists only of one
hundred (100) shares of Common Stock, $1.00 par value per share, all of which
shares are duly and validly authorized, issued, outstanding, fully paid and
non-assessable and none of which are held directly or indirectly by the Company
or in its treasury. There are no outstanding options, warrants, rights,
commitments, preemptive rights or agreements of any kind for the issuance or
sale of, or outstanding securities convertible into, any additional shares of
capital stock of any class of the Company. None of the Company's capital stock
has been issued in violation of any federal or state law.
(b) Each Stockholder owns beneficially and of record the shares of
the Company's capital stock set forth opposite such Stockholder's name in
Schedule 3.3(b) hereto, free and clear of any Claims. The Stockholders are the
only beneficial or record holders of the Company's capital stock, and the shares
of capital stock shown in Schedule 3.3(b) are the only shares of capital stock
of the Company held by each Stockholder or with respect to which such
Stockholder has any rights. Except as set forth in Schedule 3.3(b) attached
hereto, there are no voting trusts, voting agreements, proxies or other
agreements, instruments or undertakings with respect to the voting of the
capital stock of the Company to which the Company or any of the Stockholders is
a party. No Stockholder has any right of appraisal with respect to the Company's
capital stock.
(c) The records showing that the Company and the Stockholders are
the sole members of the LLC, and the capitalization of the LLC (with respect to
capital accounts and interests in profits), are included in Schedule 3.3(c)
hereto. There are no other records of the LLC and the LLC has not considered,
approved or taken any action other than as set forth in such records. All such
interests are owned beneficially by the Persons and in the amounts indicated in
said Schedule 3.3(c), and no such Person has taken (or omitted to take) any
action that would result in any transfer, hypothecation, mortgage or other claim
being imposed on such interests and no claim has arisen by operation of law with
respect to any such interests.
3.4 SUBSIDIARIES. Other than the Company's interest in the LLC, the
Company has no, nor has it ever had any, subsidiaries or investments in any
other Person.
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3.5 AUTHORITY OF THE COMPANY.
(a) The Company has full right, authority and power to enter into
this Agreement and each agreement, document and instrument to be executed and
delivered by the Company pursuant to, or as contemplated by, this Agreement and
to carry out the transactions contemplated hereby and thereby. The execution,
delivery and performance by the Company of this Agreement and each such other
agreement, document and instrument have been duly authorized by all necessary
action of the Company and the Stockholders (including without limitation under
Section 251 of the Delaware General Corporation Law), and no other action on the
part of the Company or any Stockholder is required in connection therewith.
This Agreement and each agreement, document and instrument executed and
delivered by the Company pursuant to, or as contemplated by, this Agreement
constitutes, or when executed and delivered will constitute, valid and binding
obligations of the Company enforceable in accordance with their terms. The
execution, delivery and performance by the Company of this Agreement and each
such other agreement, document and instrument:
(i) does not and will not violate any provision of the
Certificate of Incorporation or By-laws of the Company, each as amended to
date;
(ii) does not and will not violate any laws of the United
States, or any state or other jurisdiction (domestic or foreign)
applicable to the Company or require the Company to obtain any approval,
consent or waiver of, or make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made, except as
specifically identified in Schedule 3.5 or Schedule 3.7 which approvals,
consents and waivers identified in such Schedules shall have been received
or made prior to the Closing (except, with respect to investment advisory
agreements, to the extent permitted by Section 8.3 hereof with respect to
the percentage of investment advisory agreements that may terminate prior
to the Closing) or, at any earlier time required hereunder or under
applicable laws, rules and regulations or the provisions of any agreement,
contracts or instruments; and
(iii) except as set forth on Schedule 3.5, does not and will
not result in a breach of, constitute a default under, accelerate any
obligation under, or give rise to a right of termination of, any
agreement, contract, instrument, mortgage, lien, lease, permit,
authorization, order, writ, judgment, injunction, decree, determination or
arbitration award to which the Company is a party or by which the property
of the Company is bound or affected, or result in the creation or
imposition of any Claim on any of the Company's assets or any Person's
interest in the Company.
(b) The Company (in its capacity as manager member of the LLC) has
taken all action required by the Existing LLC Agreement and the Delaware Act to
cause the LLC to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by the LLC pursuant to, or as
contemplated by, this Agreement and to carry out the transactions
6
14
contemplated hereby and thereby and no other action on the part of the LLC, the
Company or any other member is required in connection therewith.
3.6 REAL AND PERSONAL PROPERTY.
(a) All of the real property leased by the Company is identified in
Schedule 3.6(a). The Company does not own any real property. The Company does
not lease, sublease or otherwise provide (with or without rent or other
consideration and with or without a written agreement) any real property to any
Person, except as described in Schedule 3.6(a). All leases with respect to real
property to which the Company is party are identified in Schedule 3.6(a), and
true and complete copies thereof have been made available to AMG. Each of said
leases has been duly authorized and executed by the parties thereto and is in
full force and effect. The Company is not in default under any of said leases,
nor has any event occurred which, with notice or the passage of time, or both,
would give rise to such a default. To the Company's knowledge, the other party
to each of said leases is not in default under any of said leases and there is
no event which, with notice or the passage of time, or both, would give rise to
such a default.
(b) Attached hereto as Schedule 3.6(b) is a list of all the assets
of the Company including Intellectual Property and including as part of such
Schedule, the tax basis of each such asset. Except as set forth in Schedule
3.6(b) hereto, as of the date hereof, the Company owns all its assets free and
clear of any Claims. The assets listed in Schedule 3.6(b) hereto include all the
material assets used in, and all the assets necessary or desirable for, the
conduct of the business of the Company as currently conducted and are suitable
and in an appropriate condition for such purpose.
3.7 ASSETS UNDER MANAGEMENT.
(a) The aggregate assets under management by the Company as of March
31, 1997, June 30, 1997 and August 8, 1997 are accurately set forth in Schedule
3.7 hereto. In addition, set forth in Schedule 3.7 is a list as of December 31,
1997, March 31, 1997 and June 30, 1997, of all investment management, advisory
or sub-advisory contracts setting forth the name of the client under each such
contract, the amount of assets under management with respect to each such
contract, the fee schedule in effect with respect to each such contract and any
material fee adjustments or material adjustments in the amount of assets under
management (it being understood and agreed that adjustments in assets under
management greater than $500,000 are material) implemented between April 1, 1997
and August 12, 1997, or presently proposed to be instituted, the consent
required for the assignment of each such contract other than those that by their
terms terminate upon assignment (which are so identified), and the country, if
other than the United States of America, of which the client is a citizen.
Except as set forth in Schedule 3.7 and expressly described thereon, there are
no contracts, arrangements or understandings pursuant to which the Company has
undertaken or agreed to cap, waive or reimburse any or all fees or charges
payable by any of the clients set forth in Schedule 3.7 or pursuant to any of
the contracts set forth in Schedule 3.7. Except as is set forth in Schedule 3.7
hereto, no client of the Company has stated an intention to terminate or reduce
its investment relationship with the Company, or has requested
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an adjustment to the fee schedule with respect to any contract in a manner which
would reduce the fee to the Company (or, after giving effect to the Asset
Transfer (assuming the due authorization, validity and enforceability of the
Asset Transfer Agreement), the fee to the LLC).
(b) Each account to which the Company provides Investment Management
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 (hereinafter referred to
as an "ERISA Client") have been managed by the Company such that the Company in
the exercise of such management is in compliance in all material respects with
the applicable requirements of ERISA. Schedule 3.7 identifies each Client that
is an ERISA Client with an appropriate footnote. The Company is not required,
under any contract to which it is a party, to be a qualified professional asset
manager (as such term is used in Prohibited Transaction Class Exemption 84-14).
(c) Set forth in Schedule 3.7 is a list of each client with which
the Company has a fee based on performance or otherwise provides for
compensation on the basis of a share of capital gains upon or capital
appreciation of the funds (or any portion thereof) of any client, together with
a complete description of such fee or compensation. In addition, with respect to
the performance fee applicable to the Minnesota Account set forth in Schedule
3.7, is a calculation of such fee since the inception of the fee and an
indication of the deficit balance as of the date of this Agreement, which shall
be updated as of a date within five (5) business days prior to the date of the
Closing.
3.8 FINANCIAL STATEMENTS.
(a) The Company has delivered to AMG the following financial
statements, copies of which are attached hereto as Schedule 3.8:
(i) Audited balance sheets of the Company at September 30,
1994, September 30, 1995 and September 30, 1996, and audited statements of
income, retained earnings and cash flows for each of the three (3) years
then ended. The audited balance sheet of the Company at September 30, 1996
(including the notes thereto) is referred to hereinafter as the "Base
Balance Sheet."
(ii) An unaudited balance sheets of the Company at December
31, 1996 and March 31, 1997 and June 30, 1997 and statements of income for
the period then ended, certified by the Company's chief financial officer.
All of the foregoing financial statements have been prepared in accordance
with GAAP using the accrual method of accounting, applied consistently during
the periods covered thereby (except that the Company's unaudited financial
statements do not include footnote disclosure and, other than such statements
prepared for the period ending June 30, 1997, are on a cash basis method of
accounting), are complete and correct and present fairly the financial condition
of the
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Company at the dates of said statements and the results of its operations for
the periods covered thereby.
(b) As of the date of the Base Balance Sheet, the Company did not
have any liabilities of any nature, whether accrued, absolute, contingent or
otherwise, asserted or unasserted, known or unknown (including, without
limitation, liabilities as guarantor or otherwise with respect to obligations of
others, liabilities for Taxes due or then accrued or to become due, or
contingent or potential liabilities relating to activities of the Company or the
conduct of its businesses prior to the date of the Base Balance Sheet regardless
of whether claims in respect thereof had been asserted as of such date), except
immaterial liabilities incurred in the ordinary course of business of the
Company, consistent with past practices, or those stated or adequately reserved
against on the Base Balance Sheet, or reflected in Schedules furnished to AMG
hereunder as of the date hereof.
(c) As of the date hereof (including, with respect to the giving of
this representation pursuant to Section 8.2 hereof at the Closing, after giving
effect to the Asset Transfer) (assuming the due authorization, validity and
enforceability of the Asset Transfer Agreement), the Company has not had and
will not have any liabilities of any nature, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown (including,
without limitation, liabilities as guarantor or otherwise with respect to
obligations of others, or liabilities for taxes due or then accrued or to become
due or contingent or potential liabilities relating to activities of the Company
or the conduct of its business prior to the date hereof, regardless of whether
claims in respect thereof had been asserted as of such date), except liabilities
that are: (i) stated or adequately reserved against on the Base Balance Sheet or
the notes thereto, (ii) reflected in Schedules furnished to AMG hereunder on the
date hereof, or (iii) immaterial and were incurred after the date of, and
permitted under, this Agreement.
3.9 TAXES.
(a) The Company has paid or caused to be paid all federal, state,
local, foreign or add-on and other taxes, customs duties, government fee or like
amount, including, without limitation, income taxes, estimated taxes,
alternative minimum taxes, franchise taxes, sales taxes, use taxes, ad valorem
or value added taxes, capital stock taxes, employment and payroll-related taxes,
withholding taxes, and transfer taxes, stamp taxes, occupation taxes, windfall
projects taxes, and all deficiencies, or other additions to tax, interest, fines
and penalties owed by it (collectively, "Taxes"), required to be paid by it,
whether disputed or not. The unpaid Taxes of the Company (i) did not, as of
December 31, 1996 exceed the reserve for Tax liability (rather than the reserve
for deferred Taxes established to reflect timing differences between book and
tax income) set forth in the Base Balance Sheet (rather than in any notes
thereto) and (ii) do not exceed that reserve as adjusted for the passage of time
through the date hereof and the date of the Closing in accordance with the past
custom and practice of the Company in filing its Tax Returns. All Taxes required
to be withheld by the Company, including, but not limited to, Taxes arising as a
result of payments to foreign persons or to employees of the Company, have been
collected and withheld,
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and have been either paid to the respective governmental agencies, set aside in
accounts for such purpose, or accrued, reserved against, and entered upon the
books and records of the Company.
(b) The Company has, in accordance with applicable law, filed all
federal, state, local and foreign tax returns required to be filed by it, and
all such returns correctly and accurately set forth the amount of any Taxes
relating to the applicable period. A list of all federal, state, local and
foreign income Tax returns filed with respect to the Company for taxable periods
ended on or after December 31, 1990, is set forth in Schedule 3.9 attached
hereto, and said Schedule indicates those Tax returns that have been audited or
currently are the subject of an audit. For each taxable period of the Company
ended on or after December 31, 1990, the Company has made available to AMG
correct and complete copies of all federal, state, local and foreign income tax
returns, examination reports and statements of deficiencies assessed against or
agreed to by the Company.
(c) Neither the IRS nor any other governmental authority responsible
for the imposition or collection of any Tax (a "Taxing Authority") is now
asserting or, to the knowledge of the Company or any Stockholder, threatening in
writing to assert against the Company any deficiency or claim for additional
Taxes. No claim has ever been made by a Taxing Authority in a jurisdiction where
the Company does not file reports and returns that the Company is or may be
subject to taxation by that jurisdiction. There are no security interests on any
of the assets of the Company that arose in connection with any failure (or
alleged failure) to pay any Taxes, except for Taxes that are not yet due and
payable or that are being contested in good faith and against which reserves
have been taken in accordance with GAAP.
(d) There has not been any audit of any tax return filed by the
Company, no such audit is in progress, and the Company has not been notified in
writing by any Taxing Authority that any such audit is contemplated or pending.
No extension of time with respect to any date on which a Tax return was or is to
be filed by the Company is in force, and no waiver or agreement by the Company
is in force for the extension of time for the assessment or payment of any
Taxes.
(e) The Company has never been a member of an "affiliated group" (as
defined in Section 1504(a) of the Code). The Company has never filed, or been
required to file, a consolidated, combined or unitary tax return with any other
entity. The Company is not a party to any tax sharing agreement.
(f) The Company (and any predecessor of the Company) has been a
validly electing S corporation within the meaning of Sections 1361 and 1362 of
the Code at all times during its existence, and the Company will be an S
corporation up to the Effective Date.
(g) None of the Company's payroll, property, or receipts, or other
factors used in a particular state's apportionment or allocation formula results
in an apportionment or allocation of business income to any state other than New
York, California or Minnesota, and the Company
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has no non-business income that is allocated, apportioned or otherwise sourced
to any state other than New York, California or Minnesota.
3.10 COLLECTIBILITY OF ACCOUNTS RECEIVABLE. All of the accounts receivable
of the Company shown or reflected on the Company's balance sheet as of June 30,
1997, included as part of Schedule 3.8, or existing at the date this
representation is given (less the reserve for bad debts set forth on the
Company's balance sheet as of June 30, 1997 included as part of Schedule 3.8 are
and will be at the Closing, valid and enforceable claims, fully collectible and
subject to no set off or counterclaim. The Company does not have any accounts or
loans receivable from any person, firm or corporation or other entity which is
affiliated with the Company or from any director, officer, stockholder, member
or employee of the Company except as disclosed in Schedule 3.10 hereto.
3.11 ABSENCE OF CERTAIN CHANGES. Except as disclosed in Schedule 3.11
attached hereto or as expressly provided for herein, since the date of the Base
Balance Sheet there has not been any:
(a) change in the condition (financial or otherwise), properties,
assets, liabilities, business, operations or prospects of the Company which
change by itself or in conjunction with all other such changes, whether or not
arising in the ordinary course of business, could have a Material Adverse Effect
on the Company;
(b) amendment or termination or, to the best knowledge of the
Company and each of the Stockholders, proposed or threatened amendment or
termination, whether written or oral, of any agreement listed in Schedule 3.7
hereto;
(c) obligation or liability of any nature, whether accrued,
absolute, contingent or otherwise, asserted or unasserted, known or unknown
(including, without limitation (i) liabilities for Taxes due or to become due,
or (ii) contingent or potential liabilities relating to services provided by the
Company or the conduct of the business of the Company since the date of the Base
Balance Sheet regardless of whether claims in respect thereof have been
asserted, or (iii) contingent liabilities incurred by the Company as guarantor
or otherwise with respect to the obligations of the Company or others), incurred
by the Company other than obligations and liabilities incurred in the ordinary
course of business consistent with the terms of this Agreement (it being
understood that liability claims in respect of services provided shall not be
deemed to be incurred in the ordinary course of business);
(d) material Claim placed on any of the properties or assets of the
Company;
(e) cancellation of any material debt or claim owing to, or waiver
of any material right of, the Company;
(f) purchase, sale or other disposition, or any agreement or other
arrangement for the purchase, sale or other disposition, of any of the
properties or assets of the Company other
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than pursuant to the Asset Transfer or in the ordinary course of business
consistent with past practices;
(g) damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of the Company;
(h) declaration, setting aside or payment of any dividend or
distribution by the Company, or the making of any other distribution in respect
of the capital stock of the Company , or any direct or indirect redemption,
purchase or other acquisition by the Company of its own capital stock or
interests, respectively;
(i) change in the compensation payable or to become payable by the
Company to any of their respective officers, employees, agents or independent
contractors other than normal merit increases in accordance with its usual
practices, or any bonus payment or arrangement made to or with any of such
officers, employees, agents or independent contractors;
(j) change with respect to the officers or management of the
Company;
(k) material payment or discharge of a Claim or liability of the
Company;
(l) obligation or liability incurred by the Company to any of their
respective officers, directors, stockholders, members or employees, or any loans
or advances made by the Company to any of their respective officers, directors,
stockholders, members or employees, except normal compensation and expense
allowances payable to officers or employees in the ordinary course of business
consistent with past practices;
(m) change in accounting methods or practices, or billing or
collection policies used by the Company;
(n) other transaction entered into by the Company other than
transactions in the ordinary course of business consistent with past practices;
or
(o) agreement or understanding, whether in writing or otherwise, for
the Company to take any of the actions specified in paragraphs (a) through (n)
above.
3.12 ORDINARY COURSE. Since the date of the Base Balance Sheet, other than
with respect to transactions specifically contemplated herein, the Company has
conducted its business only in the ordinary course and consistently with its
prior practices. Since its formation, the LLC has only conducted those
operations necessary for the performance of its obligations hereunder and
activities necessary in connection herewith and therewith.
3.13 BANKING RELATIONS. Schedule 3.13 includes a list of all of the
checking accounts, savings accounts, borrowing arrangements or similar
arrangements which the Company has with
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a banking institution and indicates with respect to each of such arrangements
the person or persons authorized in respect thereof.
3.14 INTELLECTUAL PROPERTY.
(a) Except as described in Schedule 3.14, the Company has exclusive
ownership of, or exclusive license to use, all patent, copyright, trade secret,
trademark, trade name, service xxxx, formulas, designs, inventions or other
proprietary rights (collectively, "Intellectual Property") used or to be used in
the business of the Company as presently conducted. All of the rights of the
Company in such Intellectual Property are freely transferable. There are no
claims or demands of any other Person pertaining to any of such Intellectual
Property and no proceedings have been instituted, or are pending or to the
knowledge of the Company threatened, which challenge the rights of the Company
in respect thereof. The Company has the right to use, free and clear of any
claims or rights of other Person, all customer lists, investment or other
processes, computer software (other than rights of other Persons in computer
software that is generally available to the public in the retail marketplace),
systems, data compilations, research results and other information required for
or incident to its services or its business as presently conducted.
(b) There are no patents, patent applications, trademarks, trademark
applications and registrations and registered copyrights which are owned by or
licensed to the Company or used or to be used by the Company in its business as
presently conducted or contemplated.
(c) All licenses or other agreements under which the Company is
granted rights in items of Intellectual Property which are material to the
business or operations of the Company are listed in Schedule 3.14. All said
licenses or other agreements are in full force and effect, there is no material
default by any party thereto, and, except as set forth in Schedule 3.14, all of
the rights of the Company thereunder are freely assignable. To the knowledge of
the Company and the Stockholders, the licensors under said licenses and other
agreements have and had all requisite power and authority to grant the rights
purported to be conferred thereby. True and complete copies of all such licenses
or other agreements, and any amendments thereto, have been provided to AMG.
(d) Other than as part of the Asset Transfer or with respect to the
name "GeoCapital" as described in Schedule 3.14, the Company has not granted
rights to others in Intellectual Property owned or licensed by the Company. With
respect to the name "GeoCapital," all rights granted to others are solely the
right to use such name for limited purposes (and do not include any right to
sublease or assign such right) and are subject to the Company's right to revoke
such grant.
(e) The Company's business practices to establish and preserve its
ownership of all Intellectual Property rights with respect to its services and
rights in and to other Intellectual Property conform to practices generally
applied in the investment advisory industry. The Company has not made any of
such information available to any Person other than employees of the Company,
except pursuant to written agreements requiring the recipients to maintain the
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confidentiality of such information and appropriately restricting the use
thereof. The Company has no knowledge of any infringement by others of any
Intellectual Property rights of the Company.
(f) The present business, activities and products of the Company do
not infringe any rights of any other person in Intellectual Property. No
proceeding charging the Company with infringement of any Intellectual Property
of any other person or entity has been filed or, to the knowledge of the
Company, is threatened to be filed. The Company is not making unauthorized use
of any confidential information or trade secrets of any person, including
without limitation, any former employer of any past or present employee of the
Company. Except as set forth in Schedule 3.14, neither the Company, nor, to the
knowledge of the Company and the Stockholders, any of the Company's employees
have any agreements or arrangements with any persons other than the Company
related to confidential information or trade secrets of such persons or
restricting any such employee's ability to engage in business activities of any
nature. The activities of the employees on behalf of the Company do not violate
any such agreements or arrangements known to the Company.
3.15 CONTRACTS. Except for contracts, commitments, plans, agreements and
licenses described in Schedule 3.6, Schedule 3.7, Schedule 3.14 or Schedule 3.15
(true and complete copies of which have been made available to AMG), the Company
is not a party to or subject to any:
(a) investment management or investment advisory or sub-advisory
contract or any other contract for the provision of investment management or
other similar services;
(b) plan or contract providing for bonuses, pensions, options, stock
(or beneficial interest) purchases (or other securities or phantom equity
purchases), deferred compensation, retirement payments, profit sharing, or the
like;
(c) employment contract or contract for services which is not
terminable at will by the Company without liability for any penalty or severance
payment;
(d) contract or agreement for the purchase of any assets, material
or equipment except purchase orders in the ordinary course for less than $10,000
each, such orders not exceeding $50,000 in the aggregate;
(e) other contracts or agreements creating any obligations of the
Company of $50,000 or more with respect to any such contract or agreement not
specifically disclosed elsewhere under this Agreement;
(f) contract or agreement not made in the ordinary course of
business (including, without limitation, any contract for the sale of all or any
material portion of the assets of the Company or any contract for the purchase
of all or any material portion of the assets of any other entity) other than the
Asset Transfer Agreement and the agreements contemplated thereby;
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(g) contract with any investment or research consultant, solicitor
or sales agent;
(h) contract containing covenants limiting the freedom of the
Company (or its respective Affiliates) to compete in any line of business or
with any person or entity;
(i) license agreement (as licensor or licensee);
(j) agreement providing for the borrowing or lending of money, and
the Company has no obligations: (i) for borrowed money, (ii) evidenced by bonds,
debentures, notes or similar instruments, (iii) to pay the deferred purchase
price of property or services, (iv) under leases that would, in accordance with
GAAP, appear on the balance sheet of the lessee as a liability, (v) secured by a
Claim, (vi) in respect of letters of credit, or bankers acceptances, contingent
or otherwise, or (vii) in respect of any guaranty or endorsement or other
obligations to be liable for the debts of another person or entity; or
(k) other material contract or agreement to which the Company is a
party or by which it is bound.
Each of the contracts described in Schedule 3.6(a), Schedule 3.7, Schedule
3.14, Schedule 3.15 or Schedule 3.24 is valid and effective in accordance with
its respective terms, and there is not, under any such contract, an existing
breach or event which, with the giving of notice or the lapse of time or both,
would become such a breach. All of the consents necessary to effectuate the
transfer of each such contract to the LLC pursuant to the Asset Transfer
Agreement are set forth in Schedule 3.5 and Schedule 3.7. The Company has
complied and is in compliance with the client's guidelines and restrictions set
forth in any contract described in Schedule 3.7, including, without limitation,
any limitation set forth in the applicable prospectus, offering memorandum or
marketing material for a collective investment vehicle or governing documents
for any client.
3.16 LITIGATION. There is no litigation or legal (or other) action, suit,
proceeding or, to the Company's and the Stockholders' knowledge, investigation,
at law or in equity, or before any federal, state, municipal or other
governmental department, commission, bureau, board, agency or instrumentality,
domestic or foreign (including, without limitation, any voluntary or involuntary
proceedings under the Bankruptcy Code or any action, suit, proceeding or
investigation under any foreign, federal or state securities law, rule or
regulation), in which the Company or any officer, director, stockholder, or
member or employee thereof is engaged, or, to the knowledge of the Company and
the Stockholders, with which any of them is threatened, in connection with the
business, affairs, properties or assets of the Company, or which might call into
question the validity or hinder the enforceability or performance of this
Agreement, or of the other agreements, documents and instruments contemplated
hereby and the transactions contemplated hereby and thereby. There are no
proceedings pending, or to the knowledge of the Company or any of the
Stockholders, threatened, relating to the termination of, or limitation of, the
rights of the Company under its registration under the Advisers Act, as an
investment adviser, or any similar or related rights under any registrations or
qualifications with various states or other jurisdictions.
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3.17 COMPLIANCE WITH LAWS. The Company is, and at all times has been, in
material compliance with all laws and governmental rules and regulations,
domestic or foreign, including, without limitation, the Advisers Act, the
Investment Company Act, the Exchange Act, ERISA, the Commodity Exchange Act and
the Securities Act and the regulations promulgated under each of them; the rules
and regulations of self-regulatory organizations including, without limitation,
the NASD and each applicable exchange (as defined under the Exchange Act); and
all other foreign, federal or state securities laws and regulations applicable
to the business or affairs or properties or assets of the Company (collectively
"Investment Laws and Regulations"). None of the Company or any officer,
director, member, stockholder or employee thereof, is in default with respect to
any judgment, order, writ, injunction, decree, demand or assessment relating to
any aspect of the business or affairs or properties or assets of the Company and
issued by any court or any federal, state, municipal or other governmental
agency, board, commission, bureau, instrumentality or department, domestic or
foreign, or by any self-regulatory authority. None of the Company nor any
officer, director, member, stockholder or employee thereof, is charged or, to
the knowledge of the Company or any of the Stockholders, under investigation
with respect to, any violation of any provision of foreign, federal, state,
municipal or other law or any administrative rule or regulation, domestic or
foreign, including, without limitation, any Investment Laws and Regulations,
affecting the Company or the transactions contemplated hereby.
3.18 BUSINESS; REGISTRATIONS.
(a) The Company is and has, since its inception, been engaged solely
in the business of providing Investment Management Services. The Company does
not provide Investment Management Services to (i) any of the Private Funds, or
any other issuer that would be an investment company (within the meaning of the
Investment Company Act) but for the exemptions contained in Section 3(c)(1),
Section 3(c)(7), the final clause of Section 3(c)(3) or the third or fourth
clauses of Section 3(c)(11) of the Investment Company Act, (ii) any issuer,
registered under the laws of the appropriate securities regulatory authority in
the jurisdiction in which the issuer is domiciled (other than the United States
or the States thereof), which is or holds itself out as engaged primarily in the
business of investing, reinvesting or trading in securities or (iii) any issuer
that is an investment company (within the meaning of the Investment Company
Act).
(b) The Company is and has, since its inception, been duly
registered as an investment adviser under the Advisers Act. The Company is duly
registered, licensed and qualified as an investment adviser in all jurisdictions
where such registration, licensing or qualification is required in order to
conduct its business and where the failure to be so registered, licensed or
qualified could have a Material Adverse Effect on the Company. The Company is in
compliance with all foreign, federal and state laws requiring registration,
licensing or qualification as an investment adviser. The Company has made
available to AMG or its representatives, true and complete copies of its most
recent Form ADV, as amended to date, and has made available copies of all
foreign and state registration forms, likewise as amended to date. The
information contained in such forms was true and complete at the time of filing
and the Company has made all amendments to such forms as it is required to make
under any applicable laws. Neither the
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Company nor, to the knowledge of the Company and the Stockholders, any person
"associated" (as defined under the Advisers Act or under the Commodity Exchange
Act, as appropriate) with the Company, has been convicted of any crime or is or
has engaged in any conduct that would be a basis for denial, suspension or
revocation of registration of an investment adviser under Section 203(e) of the
Advisers Act or Rule 206(4)-4(b) thereunder, or of similar action under the
Commodity Exchange Act, and to the knowledge of the Company and the
Stockholders, there is no proceeding or investigation that is reasonably likely
to become the basis for any such disqualification, denial, suspension or
revocation. The Company has all permits, registrations, licenses, franchises,
certifications and other approvals (collectively, the "Licenses") required from
foreign, federal, state or local authorities in order for it to conduct the
businesses it presently conducts. The Company is not subject to any limitation
imposed in connection with one or more of the Licenses which is reasonably
likely to have a material adverse effect on the condition (financial or
otherwise), properties, assets, liabilities, business, operations or prospects
of the Company or AMG. The Company is not a "broker" or "dealer" within the
meaning of the Exchange Act, or a "commodity pool operator" or "commodity
trading adviser" within the meaning of the Commodity Exchange Act. None of the
Company or its officers and employees is required to be registered as a broker
or dealer, a commodity trading adviser, a commodity pool operator, a futures
commission merchant, an introducing broker, a registered representative or
associated person, a counseling officer, an insurance agent, a sales person or
in any similar capacity with the SEC, the Commodity Futures Trading Commission,
the National Futures Association, the NASD or the securities commission of any
state or any self-regulatory body.
3.19 INSURANCE. The Company has in full force and effect such insurance
as, to the knowledge of the Company, is customarily maintained by companies of
similar size in the same or a similar business, with respect to its businesses,
properties and assets (including, without limitation, errors and omissions
liability insurance) and all bonds required by ERISA and by any contract to
which the Company is a party, all as listed in Schedule 3.19 hereto. The Company
is not in default under any such insurance policy or bond.
3.20 POWERS OF ATTORNEY. Neither the Company nor with respect to the
Company Common Stock, any Stockholder, has any outstanding power of attorney.
3.21 FINDER'S FEE. Neither the Company nor any Stockholder has incurred or
become liable for any broker's commission or finder's fee relating to or in
connection with the transactions contemplated by this Agreement.
3.22 CORPORATE RECORDS; COPIES OF DOCUMENTS. The record books of the
Company accurately record all corporate action taken by its respective
stockholders or members and board of directors and committees, as applicable,
and true and complete copies of the originals of such documents have been made
available to AMG for review. The Company and the Stockholders have made
available for inspection and copying by AMG and its counsel true and correct
copies of all documents referred to in this Agreement or in the Schedules
delivered to AMG in connection herewith.
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3.23 TRANSACTIONS WITH INTERESTED PERSONS. Except as set forth in Schedule
3.23, neither the Company nor any stockholder, member, officer, supervisory
employee or director of the Company or, to the knowledge of the Company or any
of the Stockholders, any of their respective spouses or family members, is a
party to any material transaction or material contract or arrangement with the
Company, or owns directly or indirectly on an individual or joint basis any
interest in, or serves as an officer or director or in another similar capacity
of, any competitor or client of the Company, or any organization which has a
material contract or arrangement with the Company (in each case, other than as
expressly contemplated hereby).
3.24 EMPLOYEE BENEFIT PROGRAMS.
(a) Schedule 3.24 hereto lists every Employee Program (as defined
below) that has been maintained (as defined below) by the Company at any time
during the three-year period ending on the date of the Closing.
(b) Each Employee Program which has ever been maintained by the
Company and which has at any time been intended to qualify under Section 401(a)
or 501(c)(9) of the Code has received a favorable determination or approval
letter from the IRS regarding its qualification under such section. The Company
does not know, and has no reason to know, of any event or omission that has
occurred which would cause any such Employee Program to lose its qualification
under the applicable Code section.
(c) The Company does not know, and has no reason to know, of any
failure of any party to comply with any laws applicable to the Employee Programs
that have been maintained by the Company. With respect to any Employee Program
ever maintained by the Company, there has occurred no "prohibited transaction,"
as defined in Section 406 of the ERISA or Section 4975 of the Code, or breach of
any duty under ERISA or other applicable law (including, without limitation, any
health care continuation requirements or any other tax law requirements, or
conditions to favorable tax treatment, applicable to such plan), which could
result, directly or indirectly, in any taxes, penalties or other liability to
the LLC, Merger Sub or AMG. No litigation, arbitration, or governmental
administrative proceeding (or investigation) or other proceeding (other than
those relating to routine claims for benefits) is pending or threatened with
respect to any such Employee Program.
(d) Neither the Company nor any ERISA Affiliate has incurred any
liability under title IV of ERISA which has not been paid in full prior to the
Closing. There has been no "accumulated funding deficiency" (whether or not
waived) with respect to any Employee Program ever maintained by the Company or
any Affiliate and subject to Code Section 412 or ERISA Section 302. With respect
to any Employee Program maintained by the Company or an ERISA Affiliate and
subject to title IV of ERISA, there has been no (nor will be any as a result of
the transaction contemplated by this Agreement) (i) "reportable event," within
the meaning of ERISA Section 4043, or the regulations thereunder (for which
notice the notice requirement is not waived under 29 C.F.R. Part 2615) and (ii)
no event or condition which presents a material risk of plan termination or any
other event that may cause the Company or any ERISA Affiliate to incur
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liability or have a lien imposed on its assets under title IV of ERISA. All
payments and/or contributions required to have been made (under the provisions
of any agreements or other governing documents or applicable law) with respect
to all Employee Programs ever maintained by the Company or any Affiliate, for
all periods prior to the Closing, either have been made or have been accrued
(and all such unpaid but accrued amounts are described on Schedule 3.24). Except
as described in Schedule 3.24, no Employee Program maintained by the Company or
an Affiliate and subject to title IV of ERISA (other than a Multiemployer Plan)
has any "unfunded benefit liabilities" within the meaning of ERISA Section
4001(a)(18), as of the Closing Date. Neither the Company nor any Affiliate has
ever maintained a Multiemployer Plan. None of the Employee Programs ever
maintained by the Company or any Affiliate has ever provided health care or any
other non-pension benefits to any employees after their employment is terminated
(other than as required by part 6 of subtitle B of title I of ERISA) or has ever
promised to provide such post-termination benefits. Any Employee Program which
has been subject to Title IV of ERISA has been terminated in accordance with
Section 4041 of ERISA and the regulations promulgated thereunder.
(e) With respect to each Employee Program maintained by the Company
within the three (3) years preceding the Closing, complete and correct copies of
the following documents (if applicable to such Employee Program) have previously
been made available to AMG: (i) all documents embodying or governing such
Employee Program, and any funding medium for the Employee Program (including,
without limitation, trust agreements) as they may have been amended; (ii) the
most recent IRS determination or approval letter with respect to such Employee
Program under Code Sections 401 or 501(c)(9), and any applications for
determination or approval subsequently filed with the IRS; (iii) the three (3)
most recently filed IRS Forms 5500, with all applicable schedules and
accountants' opinions attached thereto; (iv) the summary plan description for
such Employee Program (or other descriptions of such Employee Program provided
to employees) and all modifications thereto; (v) any insurance policy (including
any fiduciary liability insurance policy) related to such Employee Program; (vi)
any documents evidencing any loan to an Employee Program that is a leveraged
employee stock ownership plan; and (vii) all other materials reasonably
necessary for AMG to perform any of its responsibilities with respect to any
Employee Program subsequent to the Closing (including, without limitation,
health care continuation requirements).
(f) Each Employee Program listed on Schedule 3.24 may be amended,
terminated, modified or otherwise revised by the Company, including the
elimination of any and all future benefit accruals under any Employee Program
(except claims incurred but not reported under any welfare plan or any benefit
described in Section 411(d)(6) of the Code).
(g) The GeoCapital Corporation Defined Benefit Pension Plan met the
requirements of Section 4021(b)(13) of ERISA at all times and as a result, was
not required make any filings with the Pension Benefit Guaranty Corporation
including without limitation, filings in connection with the termination of such
plan.
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(h) For purposes of this section:
(i) "Employee Program" means (A) all employee benefit plans
within the meaning of ERISA Section 3(3), including, but not limited to,
multiple employer welfare arrangements (within the meaning of ERISA
Section 3(4)), plans to which more than one unaffiliated employer
contributes and employee benefit plans (such as foreign or excess benefit
plans) which are not subject to ERISA; and (B) all stock option plans,
bonus or incentive award plans, severance pay policies or agreements,
deferred compensation agreements, supplemental income arrangements,
vacation plans, and all other employee benefit plans, agreements, and
arrangements not described in (A) above. In the case of an Employee
Program funded through an organization described in Code Section
501(c)(9), each reference to such Employee Program shall include a
reference to such organization.
(ii) An entity "maintains" an Employee Program if such entity
sponsors, contributes to, or provides (or has promised to provide)
benefits under such Employee Program, or has any obligation (by agreement
or under applicable law) to contribute to or provide benefits under such
Employee Program, or if such Employee Program provides benefits to or
otherwise covers employees of such entity, or their spouses, dependents,
or beneficiaries.
(iii) An entity is an "ERISA Affiliate" of the Company if it
would have ever been considered a single employer with the Company under
ERISA Section 4001(b) or part of the same "controlled group" as the
Company for purposes of ERISA Section 302(d)(8)(C).
(iv) "Multiemployer Plan" means a (pension or non-pension)
employee benefit plan to which more than one employer contributes and
which is maintained pursuant to one or more collective bargaining
agreements.
3.25 DIRECTORS, OFFICERS AND EMPLOYEES.
(a) Schedule 3.25(a) hereto contains a true and complete list of all
current directors and officers of the Company. In addition, Schedule 3.25(a)
hereto contains a list of all managers, employees and consultants of the Company
who, individually, have received or are scheduled to receive compensation from
the Company for the fiscal year ending December 31, 1997, in excess of $75,000.
In each case such Schedule includes the current job title and aggregate annual
compensation of each such individual.
(b) To the knowledge of the Company and the Stockholders, each
employee listed in Schedule 3.25(b) hereto is in good health.
(c) The Company employs 16 full-time employees and 5 part-time
employees, all of whom are listed in Schedule 3.25(c) (the "Employees") and
generally enjoys good employer-employee relationships. Except as specifically
described in Schedule 3.25(c), no consultant or
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other Person other than the Employees renders Investment Management Services to
or on behalf of the Company. Except as set forth in Schedule 3.25(c) hereto (or
Schedule 3.15 or Schedule 3.24 hereto), the Company does not have any
obligation, contingent or otherwise, under (a) any employment, collective
bargaining or other labor agreement, (b) any written or oral agreement
containing severance or termination pay arrangements, (c) any deferred
compensation agreement, retainer or consulting arrangements, (d) any pension or
retirement plan, any bonus or profit-sharing plan, any stock option or stock
purchase plan, or (e) any other employee contract or non-terminable (whether
with or without penalty) employment arrangement (each an "Employment
Arrangement"). The Company is not in default with respect to any material term
or condition of any Employment Arrangement, nor will the Closing or the Asset
Transfer (or the transactions contemplated hereby or thereby, assuming the due
authorization, validity and enforceability of the Asset Transfer Agreement)
result in any such default, including, without limitation, after the giving of
notice, lapse of time or both. The Company is not delinquent in payments to any
of its employees for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed for it to the date hereof or amounts
required to be reimbursed to such employees. Upon termination of the employment
of any of said employees, none of the LLC, Merger Sub nor AMG would, by reason
of the transactions contemplated under this Agreement or anything done prior to
the Closing, be liable to any of said employees for so-called "severance pay" or
any other payments except as set forth in the Restated LLC Agreement. The
Company has not made any payments, is not obligated to make any payments, and is
not a party to any agreement that under certain circumstances could obligate
Merger Sub or the LLC to make any payments that will not be deductible under
Section 280G of the Code. The Company does not have any policy, practice, plan
or program of paying severance pay or any form of severance compensation in
connection with the termination of employment. The Company is in compliance with
all applicable laws and regulations respecting labor, employment, fair
employment practices, work place safety and health, terms and conditions of
employment, and wages and hours. To the knowledge of the Company or the
Stockholders there are no charges of employment discrimination or unfair labor
practices against or involving the Company. To the knowledge of the Company or
the Stockholders there are no grievances, complaints or charges that have been
filed against the Company under any dispute resolution procedure that might have
a Material Adverse Effect on the Company, Merger Sub, the LLC or AMG or the
conduct of their respective businesses, and there is no arbitration or similar
proceeding pending and no claim therefor has been asserted. The Company has in
place all employee policies required by applicable laws, rules and regulations,
and there have been no violations or alleged violations of any of such policies.
None of the Company or any of the Stockholders has received notice that any of
the Company's employment policies or practices is currently being audited or
investigated by any federal, state or local government agency. The Company is,
and at all times since November 6, 1986 has been, in compliance with the
requirements of the Immigration Reform Control Act of 1986, except as would not
have a Material Adverse Effect on the Company.
3.26 CODE OF ETHICS. The Company has a written policy regarding xxxxxxx
xxxxxxx and a Code of Ethics which complies with all applicable provisions of
Section 204A of the Advisers Act a copy of which has been delivered to AMG prior
to the date hereof. All employees of the Company and other Persons listed on
Schedule 3.25(a) have executed acknowledgments that they
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are bound by the provisions of such Code of Ethics and xxxxxxx xxxxxxx policy.
The policies of the Company with respect to avoiding conflicts of interest are
as set forth in the Company's most recent Form ADV or incorporated by reference
therein. There have been no material violations or allegations of material
violations of such Code of Ethics, xxxxxxx xxxxxxx policy or conflicts policy.
3.27 CERTAIN REPRESENTATIONS AND WARRANTIES AS TO COLLECTIVE INVESTMENT
VEHICLES.
(a) True, correct and complete copies of all of the current
investment advisory agreements and distribution or underwriting contracts,
administrative services and other services agreements, if any, and
organizational and offering documents, pertaining to each of the Private Funds
(i) have been made available to AMG prior to the date hereof and (ii) are in
full force and effect. Such offering materials as of the dates as of which they
were prepared and distributed did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(b) Each of the Private Funds is duly organized, validly existing
and in good standing in the jurisdiction in which it is organized and has all
requisite power and authority to conduct its business in the manner and in the
places where such business is currently conducted. Each Private Fund is and has,
since its inception, been engaged solely in the business of an investment
company. Each Private Fund is and has, since its inception, been in compliance
with all foreign, federal and state laws requiring registration, licensing or
qualification as an investment company and all Investment Laws and Regulations.
(c) AMG has been furnished true, correct and complete copies of the
audited financial statements, prepared in accordance with GAAP, of each of the
Private Funds for the past three fiscal years (or such shorter period as such
Private Fund shall have been in existence), and unaudited financial statements,
prepared in accordance with GAAP, of each of the Private Funds for the first
six-months of its most recent fiscal year if the date of the Private Fund's
fiscal year end and six-month period financial statements are hereinafter
referred to as a "Fund Financial Statement." Each of the Fund Financial
Statements is consistent with the books and records of each of the Private
Funds, and presents fairly the consolidated financial position of each of the
Private Funds in accordance with GAAP applied on a consistent basis (except as
otherwise noted therein) at the respective date of such Fund Financial
Statements and the results of operations and cash flows for the respective
periods indicated, except in the case of the interim financial statements which
are subject to normal year-end adjustments which in the aggregate are not
material. The Fund Financial Statements reflect and disclose all material
changes in accounting principles and practices adopted by each of the Private
Funds during the periods covered by each Fund Financial Statement. The books of
account of each of the Private Funds fairly reflect their respective
transactions. None of the Private Funds has any direct or indirect liabilities
other than (i) liabilities fully and adequately reflected or reserved against on
the balance sheets contained in the Fund Financial Statements, (ii) immaterial
liabilities incurred in the ordinary course of
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business of the Company consistent with past practices and (iii) liabilities
incurred since the date of the fund Financial Statements and incurred in the
ordinary course of business.
(d) There are no restrictions imposed pursuant to any Investment
Laws and Regulations, consent judgments or SEC orders on or with regard to any
of the Private Funds. Since inception, each of the Private Funds has been
excluded from the definition of an investment company under the Investment
Company Act by virtue of Section 3(c)(1) thereof and has been duly registered or
licensed and in good standing under the laws of each jurisdiction in which such
qualification is necessary, except where the failure to be duly registered and
in compliance would not have a Material Adverse Effect on the respective Private
Fund or the Company.
(e) All interests of each of the Private Funds were sold pursuant to
a valid and effective exemption from registration under the Securities Act and
have been duly authorized and are validly issued. Each of the Private Funds'
investments have been made in accordance with its respective investment policies
and restrictions in effect at the time the investments were made and at all
times when the investments were held.
(f) All consent solicitation materials to be prepared for use by the
Private Funds in connection with the transactions contemplated by this Agreement
at the time such information is provided or used, as then amended or
supplemented, and any information disseminated in respect of the transactions
contemplated hereby at the time such information is disseminated, in each case,
will, insofar as it contains or consists of information supplied by the Company
or the Stockholders, be accurate and complete and will not contain any untrue
statement of a material fact, or omit to state any material fact (i) required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading or (ii) necessary
to correct any statement in any earlier communication that has become false or
misleading.
(g) There is no litigation or legal (or other) action, suit,
proceeding or investigation at law or in equity pending or, to the best
knowledge of the Company and the Stockholders after due inquiry, threatened in
any court or before or by any governmental agency or instrumentality,
department, commission, board, bureau or agency, or before any arbitrator, by or
against any of the Private Funds, or any officer or director thereof. There are
no judgements, injunctions, orders or other judicial or administrative mandates
outstanding against or affecting any of the Private Funds or any officer or
director thereof.
3.28 DISCLOSURE. The representations, warranties and statements contained
in this Agreement and the agreements, documents and instruments contemplated
hereby, and in the certificates, exhibits and schedules delivered by the Company
and the Stockholders to AMG pursuant to this Agreement or any of such other
agreements, documents and instruments, do not contain any untrue statement of a
material fact, and, when taken together, do not omit to state a material fact
required to be stated therein or necessary in order to make such
representations, warranties or statements not misleading in light of the
circumstances under which they were made. There are no facts (other than changes
in general economic or market conditions) which presently
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or may in the future have a material adverse effect on the condition (financial
or otherwise), properties, assets, liabilities, business, operations or
prospects of the Company.
3.29 NO IMPLIED REPRESENTATION. Notwithstanding any provision of this
Agreement, it is the explicit intent of each party hereto that none of the
Company or the Stockholders is making any representation or warranty whatsoever,
express or implied, beyond those expressly given in this Agreement including,
but not limited to, any implied representation as to condition, merchantability,
suitability or fitness for a particular purpose as to any of the physical assets
owned by the Company. It is understood that any cost estimates, projections or
other financial predictions provided to AMG or any of its affiliates, agents or
representatives are not and shall not be deemed to be representations or
warranties of any of the Company or the Stockholders.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL STOCKHOLDERS.
As a material inducement to AMG and Merger Sub to enter into this
Agreement and consummate the transactions contemplated hereby, each Stockholder
hereby severally makes to AMG each of the representations and warranties set
forth in this Section 4 with respect to such Stockholder. In addition, each
Stockholder which is a party to the Restated LLC Agreement and which has elected
to form a Management Corporation to receive his or her LLC Points jointly and
severally with such Management Corporation makes the representations and
warranties set forth in this Section 4 with respect to such Management
Corporation. No Stockholder or Management Corporation shall have any right of
indemnity or contribution from the Company or the LLC (or any other right
against the Company or the LLC) with respect to the breach of any representation
or warranty hereunder.
4.1 AUTHORITY AND ORGANIZATION.
(a) Such Stockholder has full right, authority, power and capacity
to enter into this Agreement and each agreement, document and instrument to be
executed and delivered by or on behalf of such Stockholder pursuant to, or as
contemplated by, this Agreement and to carry out the transactions contemplated
hereby and thereby. This Agreement and each agreement, document and instrument
executed and delivered by such Stockholder pursuant to this Agreement
constitutes, or when executed and delivered will constitute, a valid and binding
obligation of such Stockholder, enforceable in accordance with its respective
terms. The execution, delivery and performance by the Stockholder of this
Agreement and each such other agreement, document and instrument have been duly
authorized by all necessary action (corporate, trust or otherwise) of each
Stockholder which is not an individual, and no other action on the part of such
Stockholder is required in connection therewith. The execution, delivery and
performance of this Agreement and each such agreement, document and instrument:
(i) does not and will not violate any provision of the
organizational documents of any Stockholder which is not a natural person,
or any laws of the United States or any state or other jurisdiction
applicable to such Stockholder, or require such
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Stockholder to obtain any approval, consent or waiver from, or make any
filing with, any person or entity (governmental or otherwise) that has not
been obtained or made; and
(ii) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of, any agreement, contract, instrument, mortgage, lien,
lease, permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which such Stockholder is a party or
by which the property of such Stockholder is bound or affected, or result
in the creation or imposition of any Claim on any assets of the Company or
the LLC or on the capital stock of the Company owned by such Stockholder.
(b) Each Management Corporation is duly organized validly existing
and in good standing under the laws of its state of organization with full power
and authority to own and lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased and such
business is currently conducted or proposed to be conducted. The copies of each
Management Corporation's organizational documents (including any certificate of
organization, by-laws, declaration of trust, certificate of organization,
limited liability company operating agreement or similar documents) as amended
to date, certified by the appropriate Secretary of State or, if such documents
are of a type not typically certified by a Secretary of State, certified by such
Management Corporation's secretary, trustee or similar authorized person, and
heretofore delivered to AMG's counsel, are complete and correct and no
amendments thereto are pending. No Management Corporation is in violation of any
term of its organizational documents.
(c) The authorized and issued equity of each Management Corporation
is as set forth in Schedule 4.1(c) hereof, which schedule includes the record
and beneficial holders thereof. All the outstanding equity of each Management
Corporation has been duly authorized and validly issued and is fully paid and
nonassessable. There are no outstanding options, warrants, rights, commitments,
preemptive rights or agreements for the issuance or sale of, or outstanding
securities convertible into, capital of any Management Corporation.
(d) Each Management Corporation has full right, authority and
corporate power to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Management
Corporation pursuant to, or as contemplated by, this Agreement and to carry out
the transactions contemplated hereby and thereby. This Agreement and each
agreement, document and instrument executed and delivered by such Management
Corporation pursuant to this Agreement constitutes, or when executed and
delivered will constitute, a valid and binding obligation of such Management
Corporation, enforceable in accordance with its respective terms. The execution,
delivery and performance by each Management Corporation of this Agreement and
each such other agreement, document and instrument have been duly authorized by
all necessary action of each Management Corporation, and no other action on the
part of any Management Corporation or its stockholder is required in connection
therewith. The execution, delivery and performance of this Agreement and each
such agreement, document and instrument:
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(i) does not and will not violate any provision of the charter
of by-laws of any Management Corporation, or any laws of the United States
or any state or other jurisdiction applicable to such Management
Corporation, or require such Management Corporation to obtain any
approval, consent or waiver from, or make any filing with, any person or
entity (governmental or otherwise) that has not been obtained or made; and
(ii) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of, any agreement, contract, instrument, mortgage, lien,
lease, permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which such Management Corporation is
a party or by which the property of such Management Corporation is bound
or affected, or result in the creation or imposition of any Claim on any
assets of the Company or the LLC or on interests of such Management
Corporation in the LLC, or any interests of a Stockholder in such
Management Corporation.
4.2 OWNERSHIP OF LLC INTERESTS. The LLC Interests shown as owned by each
Stockholder and Management Corporation, respectively, in the records set forth
in Schedule 3.3(c) hereof constitute all the interests in the LLC or rights to
purchase interests in the LLC which are held by such Person, directly or
indirectly.
4.3 FINDER'S FEE. No Stockholder or Management Corporation has incurred or
become liable for any broker's commission or finder's fee relating to or in
connection with the transactions contemplated by this Agreement.
4.4 INVESTMENT ADVISORY REPRESENTATION. Such Stockholder does not serve as
an investment adviser (within the meaning of the Advisers Act) to, or provide,
directly or indirectly, Investment Management Services to, any person or entity,
other than on behalf of the Company (and, after giving effect to the Asset
Transfer (assuming the due authorization, validity and enforceability of the
Asset Transfer Agreement), the LLC) pursuant to an investment advisory agreement
between the Company (and, after giving effect to the Asset Transfer, the LLC)
and a client thereof, except as set forth in Schedule 4.4.
4.5 AGREEMENTS. Such Stockholder is not a party to any non-competition,
trade secret or confidentiality agreement with any party other than the Company
or the LLC. There are no agreements or arrangements not contained herein or
disclosed in a Schedule hereto, to which such Stockholder or Management
Corporation is a party relating to the business of the Company or the LLC or to
such Stockholder's or Management Corporation's rights and obligations as a
stockholder, member, director, officer or employee of the Company or the LLC.
Such Stockholder does not own, directly or indirectly, on an individual or joint
basis, any interest in, or serve as an officer or director of, any organization
which has a contract or arrangement with the Company or the LLC.
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4.6 EMPLOYMENT DATA. Such Stockholder's (i) date of birth, and (ii) date
of commencement of employment with the Company, are both accurately reflected in
Schedule 4.6 hereto.
4.7 INVESTMENT INTENT. Each Stockholder who acquires Preferred Shares will
make such acquisition for investment for such Stockholder's own account, and
such Stockholder has no present intention of selling, granting participations in
or otherwise distributing the same. Each Stockholder represents and warrants
that he is an "accredited investor" within the meaning of Rule 501 promulgated
by the SEC under the Securities Act.
SECTION 5. COVENANTS OF THE STOCKHOLDERS.
5.1 MAKING OF COVENANTS AND AGREEMENTS. The Stockholders jointly and
severally hereby make the covenants and agreements set forth in this Section 5
and the Stockholders jointly and severally agree to use their respective best
efforts to cause the Company and the LLC to comply with such agreements and
covenants. No Stockholder shall have any right of indemnity or contribution from
the Company or the LLC (or any other right against the Company or the LLC) with
respect to the breach of any covenant or agreement hereunder.
5.2 CLIENT CONSENTS.
(a) As soon as practicable after the date hereof, but in any event
prior to August 8, 1997, the Company shall notify each of its clients of the
transactions contemplated hereby and by the other agreements, documents and
instruments contemplated hereby. Such notice shall be in the form of Exhibit
5.2A hereto with respect to those clients whose contracts require affirmative
written consent for their assignment and in the form of Exhibit 5.2B with
respect to those clients whose contracts do not require affirmative written
consent for their assignment (in each case, with such changes thereto as may be
agreed to by AMG in writing).
(b) On or prior to September 8, 1997, the Company shall send to each
client who was sent, but who has not by such date returned, the notice in
substantially the form of Exhibit 5.2A or Exhibit 5.2B hereto countersigned
indicating approval of the transactions contemplated hereby, an additional
notice in form and substance acceptable to AMG.
(c) The Company and the LLC shall use their respective best efforts
to, and the Stockholders shall use their best efforts to cause the Company and
the LLC to, obtain consents from their clients in the manner contemplated by
this Section 5.2.
5.3 AUTHORIZATIONS.
(a) The LLC shall, and the Company and each of the Stockholders
shall use their best efforts to cause the LLC to: (i) file, as soon as
practicable after the date hereof, and in any event prior to August 15, 1997,
with the SEC, a Uniform Application for Investment Adviser Registration on Form
ADV to register the LLC as an investment adviser under the Advisers Act;
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and (ii) file the appropriate applications for investment adviser registration
as soon as practicable with all other jurisdictions in which the Company is
registered as an investment adviser and in each other jurisdiction where it is
necessary or desirable for the LLC to be registered as an investment adviser in
order to conduct its businesses (including, without limitation, the businesses
currently conducted by the Company) after the Asset Transfer (assuming the due
authorization, validity and enforceability of the Asset Transfer Agreement) and
the Closing.
(b) The Stockholders shall, and the Company and the LLC shall use
their best efforts to cause all applicable Employees to, file, as soon as
practicable after the date hereof, such applications for licensing, registration
or qualification of investment adviser representatives (within the meaning of
Rule 203A-3(a) under the Advisers Act, upon effectiveness) in each jurisdiction
where such applicable investment adviser representative has a place of business
(within the meaning of Rule 203A-3(b) under the Advisers Act, upon
effectiveness) and in each other jurisdiction where it is necessary or desirable
to effect such licensing, registration or qualification in order to conduct the
business of the LLC (including, without limitation, the business currently
conducted by the Company) after the Asset Transfer and the Closing.
(c) The LLC will, and the Company and each of the Stockholders will
use their best efforts to cause the LLC to, obtain all authorizations, consents,
orders and approvals of federal, state and local regulatory bodies and officials
that may be or become necessary for their respective execution and delivery of,
and the performance of their respective obligations pursuant to, this Agreement
and the other agreements, documents and instruments contemplated hereby, and for
the LLC to conduct the businesses presently being conducted by the Company.
5.4 AUTHORIZATION FROM OTHERS. The Stockholders, the Company and the LLC
will use their respective best efforts to obtain all authorizations, consents,
approvals and permits of others required to permit the consummation by the
Stockholders, the Company and the LLC of the transactions contemplated by this
Agreement.
5.5 CONDUCT OF BUSINESS. Between the date of this Agreement and the
Closing, except as set forth in Schedule 5.5 hereto, without the prior written
consent of AMG:
(a) the Company will conduct its business only in the ordinary
course of business, and consistent with past practices, and the LLC will only
conduct those operations necessary for the performance of its obligations
hereunder and activities necessary in connection therewith (provided, that after
giving effect to the Asset Transfer (assuming the due authorization, validity
and enforceability of the Asset Transfer Agreement), the LLC will conduct the
business it obtains in the Asset Transfer in the ordinary course of business and
consistent with the past practices of the Company);
(b) neither the Company nor the LLC will (i) make (or incur any
obligation to make) any purchase, sale or disposition of any asset or property
other than as specifically provided for in the Asset Transfer, or in the
ordinary course of business consistent with past practices, or (ii) mortgage,
pledge, subject to a Claim or otherwise encumber any of its properties or assets
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(including, without limitation, with respect to the Company, its interest in the
LLC), nor permit any of the foregoing to exist;
(c) neither the Company nor the LLC will incur any contingent or
fixed obligations or liabilities including, without limitation, any liability
(contingent or fixed) as a guarantor or otherwise with respect to the
obligations of others except, with respect to the Company (and, with respect to
the LLC, after the Asset Transfer (assuming the due authorization, validity and
enforceability of the Asset Transfer Agreement)), in the ordinary course of
business consistent with the past practices of the Company;
(d) the Company will not make or incur any obligation to make a
change in its Certificate of Incorporation, By-laws or authorized or issued
capital stock, and the LLC will not make or incur any obligation to make any
change in the Existing LLC Agreement (other than the restatement into the
Restated LLC Agreement as contemplated by Section 2.1 hereof);
(e) neither the Company nor the LLC will declare, set aside or pay
any dividend or distribution, make (or incur an obligation to make) any other
distribution in respect of its capital stock or interests or make (or incur an
obligation to make) any direct or indirect redemption, purchase or other
acquisition of its stock or interests if as a result of such dividend,
distribution, redemption, purchase or acquisition, the Company would be unable
to satisfy the conditions set forth in Section 8.11;
(f) neither the Company nor the LLC will make any change in the
compensation payable or to become payable to any of the Company's officers,
employees, agents or independent contractors, and neither the Company nor the
LLC will hire any directors, officers, employees or agents (other than to fill
vacant positions at the Company), or enter into any collective bargaining
agreement, bonus, equity, option, profit sharing, compensation, welfare,
retirement, or other similar arrangement, or any employment contract;
(g) the Company will not make any change in its borrowing
arrangements, and the LLC will not enter into any borrowing arrangements;
(h) the Company will use its best efforts to prevent any change with
respect to its management and supervisory personnel and banking arrangements;
(i) the Company will have in effect and maintain at all times all
insurance of the kind, in the amount and with the insurers set forth in Schedule
3.19 hereto or equivalent insurance with any substitute insurers approved in
writing by AMG, and prior to the Asset Transfer the LLC will have in effect and
thereafter maintain at all times all insurance of the kind, in the amount and
with the insurers set forth in Schedule 3.19 hereto or equivalent insurance with
any substitute insurers approved in writing by AMG; and
(j) neither the Company nor the LLC will settle any material
litigation.
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5.6 FINANCIAL STATEMENTS. Until the Closing, the Company will furnish AMG
with unaudited monthly balance sheets and statements of income and retained
earnings and cash flows of the Company and the LLC on a consolidated and
consolidating basis within ten (10) days after each month end for each month
ending more than ten (10) days prior to the Closing, certified by the Chairman
of the Company, which financial statements shall be prepared in accordance with
GAAP applied consistently using the accrual method of accounting, shall be
complete and correct in all material respects and shall present fairly in all
material respects the financial condition of the Company and the LLC at the
dates of said statements and the results of their operations for the periods
covered thereby.
5.7 PRESERVATION OF BUSINESS AND ASSETS. Until the Closing, each of the
Company, the LLC and each of the Stockholders shall use their best efforts to:
(a) preserve the current business of the Company, (b) maintain the present
clients of the Company, in each case, on terms that are at least as favorable as
the terms of the agreement between the Company and the relevant client as in
effect on the date hereof, (c) preserve the goodwill of the Company, and (d)
preserve any Licenses required for, or useful in connection with, the business
of the Company (including without limitation all investment adviser
registrations). In addition, none of the Stockholders shall take any material
action not in the ordinary course of business relating to the Company or which
might have a material adverse effect on the transactions contemplated hereby,
without the prior consent of AMG.
5.8 OBSERVER RIGHTS AND ACCESS. Until the Closing: (a) a representative of
AMG shall be entitled to attend and observe all meetings of the Company's
stockholders and directors (or a committee thereof) in a non-voting observer
capacity, (b) AMG shall be entitled to receive all notices and information
furnished by the Company to its stockholders and directors (or a committee
thereof), as well as copies of the minutes of any meetings of the Company's
stockholders and directors (or a committee thereof), and (c) the Company's
stockholders or directors (or a committee thereof) shall not take any action by
written consent in lieu of a meeting unless AMG shall have been given at least
five (5) business days prior written notice which includes a copy of such
written consent by which such action is proposed to be taken. The Company and
the LLC shall afford to AMG and its representatives and agents free access,
during normal business hours and with reasonable notice, to the properties and
records of the Company and the LLC in order that AMG may have full opportunity
to make such investigation as it shall desire for purposes consistent with this
Agreement.
5.9 NOTICE OF DEFAULT. Promptly upon the occurrence of, or promptly upon
the Company, the LLC or a Stockholder becoming aware of the impending or
threatened occurrence of, any event which would cause or constitute a breach or
default, or would have caused or constituted a breach or default had such event
occurred or been known to the Company, the LLC or such Stockholder prior to the
date hereof, of any of the representations, warranties or covenants of the
Company, the LLC or the Stockholders contained in or referred to in this
Agreement or in any Schedule or Exhibit referred to in this Agreement, the
Company, the LLC and such Stockholder shall give detailed written notice thereof
to AMG, and the Company and the Stockholders shall use their best efforts to
prevent or promptly remedy the same.
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5.10 CONSUMMATION OF AGREEMENT. The Stockholders shall, and shall cause
the Company and the LLC to, use their respective best efforts to perform and
fulfill all conditions and obligations to be performed and fulfilled by each of
them under this Agreement, to the end that the transactions contemplated by this
Agreement shall be fully carried out.
5.11 COOPERATION OF THE COMPANY AND STOCKHOLDERS. The Stockholders shall,
and shall cause the Company and the LLC to, cooperate with all reasonable
requests of AMG and AMG's counsel in connection with the consummation of the
transactions contemplated hereby and the making of any filings required in
connection therewith, including without limitation, filings under the HSR Act.
In addition, the Stockholders shall, and shall cause the Company and the LLC to,
cooperate fully, as and to the extent requested by AMG and AMG's counsel, in
connection with the filing of tax returns and any audit, litigation or other
proceeding with respect to Taxes.
5.12 NO SOLICITATION OF OTHER OFFERS. Until a date which is six (6) months
after a termination of this Agreement other than (i) a termination pursuant to
Section 10.1(b) as a result of a material breach by the Company of this
Agreement, in which case until a date which is twelve (12) months after a
termination of this Agreement or (ii) a termination pursuant to Section 10.1(c)
as a result of a material breach by AMG, in which case until the date of such
termination, none of the Company, the LLC, any of the Stockholders, or any of
their representatives will, directly or indirectly, solicit, encourage, assist,
initiate discussions or engage in negotiations with, provide any information to,
or enter into any agreement or transaction with, any person, other than AMG,
relating to the possible acquisition of any capital stock of the Company, the
Company, any equity interests of the LLC or any of the assets of the Company or
the LLC, except for the sale of assets by the Company in the ordinary course of
business consistent with past practices and the terms of this Agreement.
5.13 CONFIDENTIALITY. The Company, the LLC and the Stockholders agree
that, unless and until the Closing has been consummated, each of the Company,
the LLC, the Stockholders and their officers, directors, members, agents and
representatives will hold in strict confidence, and will not use, any
confidential or proprietary data or information obtained from AMG with respect
to its business or financial condition except for the purpose of evaluating,
negotiating and completing the transaction contemplated hereby. Information
generally known in AMG's industry or which has been disclosed to the Company,
the LLC or the Stockholders by third parties which have a right to do so shall
not be deemed confidential or proprietary information for purposes of this
Agreement. If the transactions contemplated by this Agreement are not
consummated, the Company, the LLC and the Stockholders will return, and cause
their respective officers, directors, members, agents and representatives to
return, to AMG (or certify that they have destroyed) all copies of such data and
information, including but not limited to financial information, customer lists,
business and corporate records, worksheets, test reports, tax returns, lists,
memoranda, and other documents prepared by or made available to the Company, the
LLC or the Stockholders (and their officers, directors, members, agents and
representatives) in connection with the transaction.
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5.14 POLICIES AND PROCEDURES. The Company, the LLC and the Stockholders
shall, and shall cause the Employees of the Company to, cooperate with and
assist in such compliance audits and regulatory reviews as may reasonably be
requested by AMG.
5.15 VIOLATION OF EXISTING LLC AGREEMENT. Between the date of this
Agreement and the Closing, none of the Stockholders, the Company nor the LLC
will take any action that is in violation of any term or provision of the
Existing LLC Agreement or would be in violation of any term or provision of the
Restated LLC Agreement if such Restated LLC Agreement were then in effect.
5.16 SUBSIDIARIES; INVESTMENTS IN OTHER PERSONS. Between the date of this
Agreement and the Closing, none of the Stockholders, the Company nor the LLC
will take any action to acquire, form or otherwise establish any subsidiary of
the Company or the LLC or cause the Company or the LLC to make any investment in
any other Person.
5.17 LLC INTERESTS. Between the date of this Agreement and the Closing,
(a) the LLC will take no action to issue any rights or interests in addition to
or different from the interests in the LLC shown in the records set forth on
Schedule 3.3(c), (b) the LLC will take no action that will cause the interests
in the LLC set forth on Schedule 3.3(c) to be revoked, repurchased, rescinded,
terminated, liquidated, transferred, amended or modified in any manner and (c)
no Stockholder will sell, assign, pledge or otherwise transfer or restrict such
Stockholder's interests in the LLC without the prior written consent of AMG. At
the Closing, the LLC shall issue the interests and rights therein set forth in
the Restated LLC Agreement to the Members (as defined in the Restated LLC
Agreement) and shall take such actions as may be reasonably directed by AMG in
connection therewith.
5.18 EMPLOYEE PROGRAMS. Between the date of this Agreement and the
Closing, the LLC will not maintain any Employee Program other than the Employee
Programs listed on Schedule 3.24.
5.19 FOREIGN QUALIFICATIONS. The LLC shall qualify to do business as a
foreign limited liability company under the laws of each jurisdiction where the
Company is, as of the date of this Agreement, qualified to do business as a
foreign corporation and under the laws of each jurisdiction in which the nature
of the business it will conduct after giving effect to the Asset Transfer, or
the ownership or leasing of the properties it will receive in the Asset
Transfer, requires such qualification, except for those jurisdictions where the
failure to so qualify, individually or in the aggregate, would not have a
Material Adverse Effect on the LLC.
5.20 LIENS. Between the date of this Agreement and the Closing, the LLC
shall not cause or permit any of the assets listed in Schedule 3.6(b) to be or
become subject to any Claim.
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SECTION 6. REPRESENTATIONS AND WARRANTIES OF AMG.
6.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement to
the Company and the Stockholders to enter into this Agreement and consummate the
transactions contemplated hereby, AMG hereby makes the representations and
warranties to the Company and the Stockholders contained in this Section 6.
6.2 ORGANIZATION OF AMG. AMG is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with full
corporate power and authority to own or lease its properties and to conduct its
business in the manner and in the places where such properties are owned or
leased or such business is conducted by it.
6.3 CAPITALIZATION. As of the date of this Agreement, the duly authorized
capital stock of AMG consists of those classes, series and numbers of shares as
are set forth in Schedule 6.3 hereto. In addition, set forth in Schedule 6.3
hereto are the numbers of shares of each such class and series which are issued
and outstanding or with respect to which options have been granted as of the
date of this Agreement. All the outstanding shares of capital stock of AMG have
been duly authorized and validly issued and are fully paid and nonassessable.
6.4 SUBSIDIARIES. Except as set forth on Schedule 6.4, as of the date of
this Agreement AMG does not have any ownership interest in any corporation,
partnership, limited liability company, limited liability partnership, joint
venture or other entity. Schedule 6.4 includes a notation indicating which
entities are registered as investment advisers under the Advisers Act and which
are members of IMRO.
6.5 AUTHORITY OF AMG. AMG has full right, authority and power to enter
into this Agreement, the Restated LLC Agreement, and each other agreement,
document and instrument to be executed and delivered by AMG pursuant to or as
contemplated by, this Agreement and subject to approval of its stockholders with
respect to and the effectiveness of an amendment of its Amended and Restated
Certificate of Incorporation, to carry out the transactions contemplated hereby
and thereby. Except with respect to an amendment of AMG's Amended and Restated
Certificate of Incorporation to authorize the Preferred Stock, the execution,
delivery and performance by AMG of this Agreement, the Restated LLC Agreement
and each such other agreement, document and instrument have been duly authorized
by all necessary corporate action of AMG; no other action on the part of AMG is
required in connection therewith; and this Agreement, and each other agreement,
document and instrument executed and delivered by AMG pursuant to this Agreement
constitute, or when executed and delivered will constitute, valid and binding
obligations of AMG enforceable in accordance with their terms. The execution,
delivery and subject to approval of its stockholders with respect to and the
effectiveness of an amendment of its Amended and Restated Certificate of
Incorporation performance by AMG of this Agreement, the Restated LLC Agreement
and each such other agreement, document and instrument:
(i) does not and will not violate any provision of the
Certificate of Incorporation or By-laws of AMG;
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(ii) does not and will not violate any laws of the United
States or of any state or any other jurisdiction applicable to AMG or
require AMG to obtain any approval, consent or waiver of, or make any
filing with, any person or entity (governmental or otherwise) which has
not been obtained or made, except for such filings and approvals as may be
necessary under the HSR Act or which will otherwise be obtained prior to
the Closing; and
(iii) does not and will not result in a breach of, constitute
a default under, accelerate any obligation under, or give rise to a right
of termination of any indenture, loan or credit agreement, or other
agreement, contract, instrument, mortgage, lien, lease, permit,
authorization, order, writ, judgment, decree, determination or arbitration
award to which AMG is a party and which is material to the business and
financial condition of AMG and its affiliated organizations on a
consolidated basis.
6.6 FINANCIAL STATEMENTS.
(a) AMG has delivered to the Company audited balance sheets of AMG
at December 31, 1995 and December 31, 1996, and audited statements of income,
cash flows and stockholders equity for the years then ended, copies of which are
attached hereto as Schedule 6.6.
(b) Said financial statements have been prepared in accordance with
generally accepted accounting principles using the accrual method of accounting,
are complete and correct and present fairly the financial condition of AMG at
the date of said statements and the results of its operations for the period
covered thereby (except that AMG's unaudited financial statements do not include
footnote disclosure or year-end adjustments).
6.7 ABSENCE OF CHANGES. Except as disclosed in Schedule 6.8 or Schedule
6.7 attached hereto or as expressly provided for herein, since December 31, 1996
there has not been any (a) change in the condition (financial or otherwise),
properties, assets, liabilities, business, operations or prospects of AMG, which
change by itself or in conjunction with all other such changes, could have a
Material Adverse Effect on AMG and its Affiliates, or (b) declaration, setting
aside or payment of any dividend or other distribution in respect of the capital
stock of AMG. Notwithstanding the foregoing, no representation is given herein
with respect to (i) the terms or conditions on which AMG is negotiating, or may
have negotiated, debt and/or equity financings, or (ii) the terms or conditions
on which AMG is negotiating or may have negotiated investments in investment
management companies, which investments have not closed, or (iii) any impact on
the condition (financial or otherwise) properties, assets, liabilities,
operations or business relating to any investment of AMG, which investment may
not have closed.
6.8 LITIGATION. There is no litigation pending against AMG or Merger Sub
which would prevent or hinder the consummation of the transactions contemplated
by this Agreement. Notwithstanding the foregoing, set forth on Schedule 6.8
hereto is a description of certain litigation matters.
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6.9 COMPLIANCE WITH LAWS. AMG (with respect to AMG and Merger Sub only,
and not its other Affiliates) is, and at all times has been, in material
compliance with all Investment Laws and Regulations applicable to it, except to
the extent that noncompliance would not have a Material Adverse Effect on AMG
and its Affiliates. None of AMG, Merger Sub nor any officer, director or
employee thereof is in default with respect to any judgment, order, writ,
injunction, decree, demand or assessment relating to any aspect of the business
or affairs or properties or assets of AMG and issued by any court or any
federal, state, municipal or other governmental agency, board, commission,
bureau, instrumentality or department, domestic or foreign, or by any
self-regulatory authority. AMG, nor any officer, director or employee thereof,
is charged or, to the best knowledge of AMG, under investigation with respect
to, any violation of any provision of foreign, federal, state, municipal or
other law or any administrative rule or regulation, domestic or foreign,
including, without limitation, any Investment Laws and Regulations, affecting
AMG, Merger Sub or the transactions contemplated hereby.
6.10 FINDER'S FEE. Neither AMG nor Merger Sub has incurred or become
liable for any broker's commission or finder's fee relating to or in connection
with the transactions contemplated by this Agreement.
6.11 PERMITS. AMG has all material Licenses presently required from
foreign, federal, state or local authorities in order for AMG to conduct the
business presently being conducted by AMG, except for those Licenses, the
absence of which could not reasonably be expected to prevent or hinder the
consummation of the transactions contemplated by this Agreement.
6.12 MERGER SUB. Merger Sub is a newly formed wholly-owned subsidiary of
AMG that contains no assets or liabilities other than those incident to its
formation and the consummation of the transactions contemplated hereby.
6.13 ACQUISITION OF SHARES FOR INVESTMENT. AMG 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 of Company Common Stock. AMG
confirms that the Stockholders and the Company have made available to AMG the
opportunity to ask questions of the officers and management employees of the
Company and to acquire additional information about the business and financial
condition of the Company and the LLC. AMG is acquiring the shares of Company
Common Stock for investment and not with a view toward or for sale in connection
with any distribution thereof in violation of any federal or state securities or
"blue sky" law, or with any present intention of distributing or selling such
shares in violation or any federal or state securities or "blue sky" law. AMG
understands and agrees that the shares of Company Common Stock may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
without registration under the Securities Act of 1933, as amended, except
pursuant to an exemption from such registration available under such Act, and
without compliance with state, local and foreign securities laws, in each case,
to the extent applicable.
6.14 NO IMPLIED REPRESENTATIONS. Notwithstanding any provision of this
Agreement, it is the explicit intent of each party hereto that neither AMG nor
Merger Sub is making any
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representation or warranty whatsoever, express or implied, beyond those
expressly given in this Agreement. It is understood that any cost estimates,
projections or other financial predictions provided to the Company, the
Stockholders or any of their affiliates, agents or representatives are not and
shall not be deemed to be representations or warranties of AMG or Merger Sub.
SECTION 7. COVENANTS OF AMG.
7.1 MAKING OF COVENANTS AND AGREEMENT. AMG hereby makes the covenants and
agreements set forth in this Section 7.
7.2 CONFIDENTIALITY. AMG agrees that, unless and until the Closing has
been consummated, each of AMG, Merger Sub and their respective officers,
directors, agents and representatives will hold in strict confidence, and will
not use, any confidential or proprietary data or information obtained from the
Company or the Stockholders with respect to its business or financial condition
except for the purpose of evaluating, negotiating and completing the transaction
contemplated hereby and except for disclosures to AMG's lenders and other
financing sources and except to the extent required by any Investment Laws and
Regulations. Information generally known in the Company's industry or which has
been disclosed to AMG or Merger Sub by third parties which have a right to do so
shall not be deemed confidential or proprietary information for purposes of this
Agreement. If the transactions contemplated by this Agreement are not
consummated, AMG will return, and will cause Merger Sub and their respective
officers, directors, agents and representatives to return, to the Company (or
certify that they have destroyed) all copies of such data and information,
including but not limited to financial information, customer lists, business and
corporate records, worksheets, test reports, tax returns, lists, memoranda, and
other documents prepared by or made available to AMG (and Merger Sub and their
respective officers, directors, agents and representatives) in connection with
the transaction.
7.3 COOPERATION OF AMG. AMG shall cooperate and shall cause Merger Sub to
cooperate with all reasonable requests of the Company in connection with the
Company's compliance with its covenants in Sections 5.2, 5.3 and 5.4 hereof. AMG
shall cooperate and shall cause Merger Sub to cooperate with all reasonable
requests of the Company and the Company's counsel in connection with the
consummation of the transactions contemplated hereby, including without
limitation, filings under the HSR Act.
7.4 CONSUMMATION OF AGREEMENT. AMG shall use its best efforts to perform
and fulfill and to cause Merger Sub to perform and fulfill all conditions and
obligations to be performed and fulfilled by AMG or Merger Sub, as applicable,
under this Agreement, to the end that the transactions contemplated by this
Agreement shall be fully carried out.
7.5 ORGANIZATION AND AUTHORIZATION OF MERGER SUB. AMG shall take such
action as is necessary or appropriate to organize Merger Sub as a wholly owned
subsidiary of AMG and (as the sole stockholder of Merger Sub) to authorize
Merger Sub to become a party to this Agreement and perform and carry out the
transactions contemplated by this Agreement.
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SECTION 8. CONDITIONS TO THE OBLIGATIONS OF AMG AND MERGER SUB.
The obligations of AMG and Merger Sub to consummate this Agreement and the
transactions contemplated hereby are subject to the fulfillment (or waiver by
AMG), prior to or at the Closing, of the following conditions precedent:
8.1 LITIGATION; NO OPPOSITION. No judgment, injunction, order or decree
enjoining or prohibiting any of AMG, Merger Sub, the Company, the LLC, any of
the Stockholders, any of the Management Corporations or any of the other parties
to this Agreement or any of the agreements, documents and instruments
contemplated hereby, from consummating the transactions contemplated hereby or
thereby, shall have been entered and no suit, action or proceeding shall be
pending at any time prior to or on the date of the Closing before or by any
court or governmental body seeking to restrain or prohibit, or seeking damages
or other relief in connection with, the execution and delivery of this Agreement
or any of the agreements, documents and instruments contemplated hereby, or the
consummation of the transactions contemplated hereby or thereby or which could
be expected to have a Material Adverse Effect on the LLC, Merger Sub or AMG.
8.2 REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Each of the representations and warranties of each of the
Stockholders contained in this Agreement and in any Schedule or Exhibit attached
hereto and in each other agreement, document, instrument or certificate
contemplated hereby or otherwise made in writing by any of them or made by any
person authorized by them to make representations on their behalf, shall be true
and correct in all material respects (except for such representations and
warranties that are qualified by their terms as to materiality, which
representations and warranties as so qualified shall be true in all respects) as
of the date of this Agreement and at and as of the Closing as though newly made
at such time; except that
(i) the representations in Section 3.7 shall also be made with
respect to assets under management and advisory contracts as of a date
which is no more than ten (10) days prior to the Closing (but is prior to
the Asset Transfer), instead of being made with respect to assets under
management and advisory contracts as of the date of the Closing;
(ii) the representations in Section 3.15 shall be true and
correct as of the date of this Agreement and shall be made at and as of
the Closing with any change since such date having occurred in compliance
with the terms and conditions of this Agreement including, without
limitation, the provisions of Section 5.5; and
(iii) the representations and warranties in Sections 3.6,
3.14(a), 3.14(b), 3.14(c), 3.25(c) and the first sentence of Section
3.18(a) with respect to the Company shall be true and correct in all
material respects (except for such representations and warranties that are
qualified by their terms as to materiality, which representations and
warranties as
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so qualified shall be true in all respects) only as of the date of this
Agreement and at and as of the date of the Asset Transfer.
(b) Upon the assumption that the Asset Transfer has occurred in
accordance with the terms of the Asset Transfer Agreement, each of the
representations and warranties of each of the Stockholders contained in the
following Sections of this Agreement with respect to the Company: 3.4
(Subsidiaries), 3.6 (Real and Personal Property), 3.8(c) (Financial Statements),
3.9 (Taxes), 3.10 (Collectibility of Accounts Receivable), 3.11 (Absence of
Certain Changes), 3.12 (Ordinary Course), 3.13 (Banking Relations), 3.14
(Intellectual Property), 3.15 (Contracts), 3.16 (Litigation), 3.17 (Compliance
with Laws), 3.18 (Business; Registrations), 3.19 (Insurance), 3.20 (Powers of
Attorney), 3.21 (Finder's Fee), 3.22 (Corporate Records; Copies of Documents),
3.23 (Transactions with Interested Persons), 3.24 (Employee Benefit Programs),
3.25 (Directors; Officers and Employees), 3.26 (Code of Ethics), 3.28
(Disclosure) and 3.29 (No Implied Representation) shall be true and correct in
all material respects (except for such representations and warranties that are
qualified by their terms as to materiality, which representations and warranties
as so qualified shall be true in all respects) at and as of the Closing with
respect to the LLC and all references therein to the Company and its
Stockholders shall be deemed to be references to the LLC and its Members,
respectively.
(c) Each and all of the agreements and conditions to be performed or
satisfied by the Company, the LLC, each of the Stockholders hereunder and under
the other agreements, documents and instruments contemplated hereby at or prior
to the Closing shall have been duly performed or satisfied.
(d) The Company, the LLC, each of the Stockholders shall have
furnished AMG and Merger Sub with a certificate or certificates dated as of the
date of the Closing with respect to each of the foregoing.
8.3 ADVISORY CONTRACT CONSENTS. Clients of the Company whose advisory
agreements provide for the payment (based on the Contract Value of each such
advisory agreement) of fees constituting at least eighty-five percent (85%) of
the Base Fees shall have Consented to the transactions contemplated hereby. For
purposes of this Section 8.3:
(i) "Base Fees" shall mean the annual advisory fees (other
than incentive or performance fees) payable to the Company under all its
contracts calculated based on assets under management and the fee
schedules set forth in the relevant agreements as of December 31, 1996;
(ii) "Consent" shall mean (A) with respect to a client whose
contract by its terms terminates upon the consummation of the transactions
contemplated hereby, that the LLC shall have entered into a new contract
on substantially equivalent terms which contract is effective after giving
effect to the Asset Transfer and the Closing, (B) with respect to a client
whose contract requires written consent from a party or parties thereto
for it to survive the transactions contemplated hereby, that the Company
shall have
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obtained all such written consents as may be required under such contract,
and (C) with respect to a client whose contract does not require written
consent from any party thereto for it to survive the transactions
contemplated hereby, that the Company shall have obtained such consents as
may be required under such contract (including, with respect to the
requirement for contracts to include provisions requiring consent to
transfer set forth under the Advisers Act, that the Company has complied
with Section 5.2 hereof with respect to such contract). Notwithstanding
the foregoing, no client of the Company shall be deemed to have given its
Consent if such client has expressed an intent to terminate or
significantly reduce its investment relationship with the Company (or,
after giving effect to the Asset Transfer (assuming the due authorization,
validity and enforceability of the Asset Transfer Agreement) and the
Closing, the LLC) or to adjust the fee schedule with respect to one or
more of its contracts in a manner that would materially reduce the fee to
the LLC.
(iii) "Contract Value" shall mean, (A) with respect to an
advisory contract which was in effect on June 30, 1997, the product of
four (4) and the quarterly advisory fees (other than incentive or
performance fees) payable to the Company as of June 30, 1997 (adjusted for
any additions and/or withdrawals since June 30,1997 and for any amendments
to the fee schedule since such date), and (B) with respect to an advisory
contract which is entered into by the Company after June 30,1997, the
annual advisory fees (other than incentive or performance fees) payable to
the Company based on the fee schedule and assets under management set
forth in the relevant agreement on the date of such agreement (adjusted
for any additions or withdrawals since that date and for any amendments to
the fee schedule since such date). For purposes of the definition of
"Contract Value," each so called "wrap-fee" program shall be considered an
advisory contract and the addition and withdrawal of participants in each
such program shall be treated as an addition or withdrawal of funds.
At the Closing, the Company shall deliver a certificate certifying as to
compliance with the foregoing, which certificate includes the calculation of
compliance, including a list in the form of subsection (a) of Schedule 3.7 of
all investment management or advisory contracts as of the date of calculation,
including all the categories of information set forth in subsection (a) of
Schedule 3.7.
8.4 REGISTRATION AS AN INVESTMENT ADVISER AND REGISTRATION OF INVESTMENT
ADVISER REPRESENTATIVES.
(a) The LLC shall have become registered as an investment adviser
under the Advisers Act and the rules and regulations promulgated thereunder, and
under the laws of each state where such a registration may be necessary or
desirable (in the opinion of AMG) to enable the LLC, after giving effect to the
Asset Transfer (assuming the due authorization, validity and enforceability of
the Asset Transfer Agreement) and the Closing, to conduct the businesses
presently conducted by the Company.
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(b) All applicable Employees shall have become registered as
investment adviser representatives (within the meaning of Rule 203A-3(a) under
the Advisers Act, upon effectiveness) of the LLC under the laws of each state
where such a registration may be necessary or desirable (in the opinion of AMG)
to enable the LLC, after giving effect to the Asset Transfer (assuming the due
authorization, validity and enforceability of the Asset Transfer Agreement) and
the Closing, to conduct the business presently conducted by the Company.
8.5 OTHER APPROVALS. Except as otherwise specifically contemplated hereby,
all actions by or in respect of, or filings with, any governmental body, agency,
or official or authority required to permit the consummation of the transactions
contemplated hereby so that after the Asset Transfer (assuming the due
authorization, validity and enforceability of the Asset Transfer Agreement) and
the Closing, the LLC shall be able to carry on the business presently being
conducted by the Company, in the manner now conducted by the Company, shall have
been taken, made or obtained, and any and all other material permits, approvals,
consents or other actions necessary to consummate the transactions hereunder
shall have been received or taken, and none of such permits, approvals or
consents shall contain any provisions which, in the reasonable judgment of AMG,
are unduly burdensome.
8.6 TRANSFER. (a) The transactions contemplated by the Asset Transfer
Agreement in the form attached hereto as Exhibit 8.6 (and the schedules and
exhibits thereto) shall have occurred (assuming the due authorization, validity
and enforceability of the Asset Transfer Agreement) and (b) such other and
additional documents and instruments of transfer as AMG shall reasonably deem
necessary in connection therewith, shall have been executed, delivered and
performed.
8.7 RESTATED LLC AGREEMENT. Each Stockholder who is receiving (direct or
indirect) interests in the LLC (and, in the case of each Stockholder who has
elected to form a corporation to receive his or her interests in the LLC, such
Management Corporation) has executed and delivered the Restated LLC Agreement.
8.8 NON SOLICITATION/NON DISCLOSURE AGREEMENTS. Each Employee Stockholder
(and in the case of each Stockholder who has elected to form a wholly-owned
corporation to receive his or her interests in the LLC, such Management
Corporation) shall have entered into a Non Solicitation/Non Disclosure Agreement
with the LLC and its Manager Member (each a "Non Solicitation Agreement") in the
form attached hereto as Exhibit 8.8, and each such Non Solicitation Agreement
shall be in full force and effect.
8.9 EMPLOYMENT AGREEMENTS. Each of Xxxxx Xxxxxx and Xxxxx X. Xxxxxxxxx,
shall have entered into an Employment Agreement with the LLC and its Manager
Member in the form attached hereto as Exhibit 8.9 (the "Employment Agreements"),
and each such Employment Agreement shall be in full force and effect.
8.10 AGREEMENTS WITH RESPECT TO PRIVATE FUNDS. The Stockholders and the
managers or general partners of each Private Fund shall have entered into
agreements in the form attached hereto as Exhibit 8.10A and Exhibit 8.10B, and
each such agreement shall be in full force in effect
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(having been approved by all necessary consents or approvals and after the
making of any necessary filings).
8.11 CAPITALIZATION, NET WORTH AND WORKING CAPITAL OF THE LLC. The LLC's
capitalization, including capital and profits interests and other rights to
purchase interests in the LLC shall be as set forth in Schedule 3.3(c) hereto.
At the Closing, and after giving effect to the Asset Transfer (assuming the due
authorization, validity and enforceability of the Asset Transfer Agreement) and
taking into account all transaction costs of the LLC, the LLC shall have a
tangible net worth (determined in accordance with GAAP using the accrual based
method of accounting, consistently applied) of at least $3,600,000, working
capital (defined as current assets less current liabilities and excluding, for
these purposes, the accounts receivable listed in Schedule 3.10) of at least
$3,263,000 and cash on hand of at least $100,000 or such greater net worth,
working capital or amount of cash on hand as shall be necessary for the
operation of the business of the LLC consistent with past practices of the
Company.
8.12 DELIVERY. Each of the Company, the Stockholders and the Management
Corporations shall have executed (where applicable) and delivered to AMG (or
shall have caused to be executed and delivered to AMG by the appropriate person
including, without limitation, the LLC) the following:
(a) the Asset Transfer Agreement (including all agreements and
documents which are schedules thereto) and all such other documents of transfer
and assignment as AMG may reasonably require in connection therewith;
(b) certified copies of resolutions of the board of directors (and,
if necessary, the shareholders) of the Company and each Management Corporation
authorizing the execution of this Agreement and each of the agreements,
documents and instruments contemplated hereby to which the Company or a
Management Corporation is a party (and which the Company executes on behalf of
the LLC);
(c) a copy of the charter and by-laws of the Company and each of the
Management Corporations which, in the case of the charter, is certified as of a
recent date by the Secretary of State of the relevant state of incorporation;
(d) a copy of the Certificate of Formation of the LLC certified as
of a recent date by the Secretary of State of the State of Delaware;
(e) a copy of the Limited Liability Company Agreement of the LLC as
in effect immediately prior to the restatement into the Restated LLC Agreement;
(f) a certificate issued by the appropriate Secretary of State
certifying that the Company and each of the Management Corporations is validly
existing and in good standing in such state as of the most recent practicable
date;
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(g) a certificate issued by the appropriate Secretary of State of
each state in which each of the Company and, after giving effect to the Asset
Transfer, the LLC does business certifying that each of the Company and the LLC,
as applicable, are in good standing in such state as of the most recent
practicable date;
(h) true and correct copies of each of the agreements, documents and
instruments contemplated hereby (including, without limitation, the Restated LLC
Agreement), and all agreements, documents, instruments and certificates
delivered or to be delivered in connection therewith;
(i) for each of the individuals listed in Schedule 3.25(b), evidence
that such person has had a physical examination within thirty (30) days prior to
the Closing, including a letter from a licensed physician familiar with such
person's health indicating that such person is in good health at such date;
(j) a certificate of the Secretary of the Company, the LLC and each
of the Management Corporations, certifying that the resolutions, charter,
limited liability company agreement and by-laws in paragraphs (b), (c) and (e)
above are in full force and effect and have not been amended or modified, and
that the officers of such corporation or limited liability company are those
persons named in the certificate;
(k) an opinion from counsel to the Company, the Stockholders and the
Management Corporations, in substantially the form of Exhibit 8.12(k) hereto;
(l) a release of the LLC from all liabilities other than those
arising out of the transactions or agreements contemplated hereby, from each of
the Company and the Stockholders in the form attached hereto as Exhibit 8.12(l);
(m) all corporate record books of the Company, including minutes of
all meetings of stockholders, directors and committees of the Board of
Directors, if any, and the stock records of the Company (including all original
stock certificates surrendered by the Stockholders);
(n) a Subscription Agreement in the form attached as Exhibit 8.12(n)
hereto;
(o) the Certification attached to the signature pages hereto
certifying stockholder approval of this Agreement; and
(p) such other Certificates and documents as are required hereby or
are reasonably requested by AMG.
8.13 EVIDENCE OF INSURABILITY. AMG shall have received such evidence as it
shall deem necessary or appropriate as to the insurability of each of the
Persons listed in Schedule 3.25(b) hereto as and in amounts contemplated by
Section 3.5(e) of the Restated LLC Agreement with respect to both key-man life
insurance and disability insurance policies.
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8.14 INSURANCE POLICIES. Each of the Company and the LLC shall have in
place insurance policies (a) with respect to the Company, covering liabilities
of directors and officers, in such amounts as AMG shall reasonably deem
necessary, and (b) with respect to the LLC, as contemplated by Section 3.19.
8.15 POLICIES AND PROCEDURES. The LLC and its employees shall have adopted
such maternity leave and similar employment policies, Code of Ethics, xxxxxxx
xxxxxxx policies, policies with respect to soft dollars, trade allocation
policies, client intake procedures and Supervisory Procedures Manuals as are
reasonably acceptable to AMG.
8.16 MATERIAL ADVERSE CHANGE. There shall have been no event or condition
or events or conditions, which, either individually or in the aggregate, could
have a material adverse effect on the condition (financial or otherwise),
properties, assets, liabilities, business operations or prospects of the LLC,
and AMG shall be provided with a certificate from the Chairman of the Company to
that effect at the Closing.
8.17 HSR ACT. Any applicable waiting period under the HSR Act (including
any extensions thereof) shall have expired or been terminated.
8.18 LICENSE TO USE NAME. The Company and the LLC shall have entered into
an agreement substantially in the form of Exhibit 8.18 attached hereto granting
to GeoCapital Ventures a limited irrevocable license to use the name
"GeoCapital."
SECTION 9. CONDITIONS TO OBLIGATIONS OF THE COMPANY.
The obligation of the Company to consummate this Agreement and the
transactions contemplated hereby is subject to the fulfillment (or waiver by the
Company), prior to or at the Closing, of the following conditions precedent:
9.1 NO LITIGATION; NO OPPOSITION. No judgment, injunction, order or decree
enjoining or prohibiting any of AMG, the Company, the LLC, any of the
Stockholders, the Management Corporations or other parties to this Agreement or
any of the agreements, documents and instruments contemplated hereby, from
consummating the transactions contemplated hereby, or thereby shall have been
entered and no suit, action or proceeding shall be pending or threatened on the
date of Closing before or by any court or governmental body seeking to restrain
or prohibit the execution and delivery of this Agreement or any of the
agreements, documents or instruments contemplated hereby or the consummation of
the transactions contemplated hereby or thereby.
9.2 REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the representations
and warranties of AMG contained in this Agreement and in any Schedule or Exhibit
attached hereto and in the other agreements, documents or instruments
contemplated hereby or otherwise made in writing by AMG or by any person
authorized by AMG to make representations on its behalf shall be true and
correct in all material respects at and as of the Closing as though newly made
at such time. Each and all the agreements and conditions to be performed or
satisfied by AMG
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hereunder and under the other agreements, documents as instruments contemplated
hereby at or prior to the Closing shall have been duly performed or satisfied.
AMG shall have furnished the Stockholders with a certificate dated as of the
date of the Closing to the foregoing effect.
9.3 ADVISORY CLIENT CONSENT. The condition set forth in Section 8.3 shall
have been met.
9.4 EMPLOYMENT AGREEMENTS. Merger Sub, as Manager Member of the LLC, shall
have caused the LLC to execute and deliver at the Closing the Employment
Agreements of each of Xxxxx Xxxxxx and Xxxxx X. Xxxxxxxxx.
9.5 MATERIAL ADVERSE CHANGE. There shall have been no change in the
condition (financial or otherwise), properties, assets, liabilities, business,
operations or prospects of AMG, which change by itself or in conjunction with
all other such changes, could have a Material Adverse Effect on AMG and its
Affiliates and the Company shall be provided with a certificate from the
President or any Senior Vice President of AMG to that effect at the Closing.
Notwithstanding the foregoing, this Section 9.5 shall not apply the entrance
into any letter of intent, commitment letter, contract or other agreement with
respect to, or the incurrence of any debt, claim or obligation arising from, (i)
debt and/or equity financings which AMG is negotiating, or may have negotiated,
or (ii) investments in investment management companies which AMG is negotiating
or may have negotiated, which investments have not closed, or (iii) the
properties, assets, liabilities, operations or business relating to any
investment of AMG, which investment may not have closed.
9.6 DELIVERY. AMG shall have executed and delivered to the Company, the
following:
(a) certified copies of resolutions of the board of directors of AMG
and Merger Sub authorizing the execution of this Agreement and each of the other
agreements, documents or instruments contemplated hereby to which AMG is a
party;
(b) a copy of the Amended and Restated Certificate of Incorporation
and By-laws of AMG and Merger Sub which, in the case of the Certificate of
Incorporation, is certified as of a recent date by the Secretary of State of the
State of Delaware;
(c) a certificate issued by the Secretary of State of the State of
Delaware certifying that each of AMG and Merger Sub is validly existing and in
good standing in Delaware as of the most recent practicable date;
(d) true and correct copies of each of the agreements, documents and
instruments contemplated hereby (including, without limitation, the Restated LLC
Agreement) to which AMG or Merger Sub is a party, and all agreements, documents,
instruments and certificates delivered or to be delivered in connection
therewith by AMG or Merger Sub, as applicable;
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(e) a certificate of the Secretary of AMG and Merger Sub certifying
that (i) the resolutions, Amended and Restated Certificate of Incorporation and
By-laws in paragraphs (a) and (b) above are in full force and effect and have
not been amended or modified, (ii) the Preferred Shares have been duly
authorized and if, when and as issued hereunder will be validly issued, fully
paid and nonassessable and (iii) that the officers of AMG are those persons
named in the certificate;
(f) an opinion from Xxxxxxx, Procter & Xxxx LLP in substantially the
form of Exhibit 9.6(f) hereto; and
(g) the Certification attached to the signature pages hereto.
9.7 TAX OPINION. The Company shall have received an opinion of Wachtell,
Lipton, Xxxxx & Xxxx, counsel to the Company, dated the date of the Closing,
based upon facts and assumptions set forth in such opinion, to the effect that
(i) the Merger will constitute a "reorganization" within the meaning of Section
368(a) of the Code and (ii) the Company, AMG and Merger Sub will each be a party
to such reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, counsel may require and rely upon representations
contained in letters from the Company, AMG and the Stockholders.
9.8 HSR ACT. Any applicable waiting period under the HSR Act (including
any extensions thereof) shall have expired or been terminated.
9.9 PREFERRED SHARES. AMG shall have amended its Amended and Restated
Certificate of Incorporation to authorize the issuance of the Preferred Shares.
SECTION 10. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED.
10.1 TERMINATION. At any time prior to the Closing, this Agreement may be
terminated as follows:
(a) by mutual written consent of AMG and the Company;
(b) by AMG, pursuant to written notice by AMG to the Company and the
Stockholders, if any of the conditions set forth in Section 8 of this Agreement
have not been satisfied at or prior to October 31, 1997, or if it has become
reasonably and objectively certain that any of such conditions, will not be
satisfied at or prior to October 31, 1997, such written notice to set forth such
conditions which have not been or will not be so satisfied; and
(c) by the Company, pursuant to written notice by the Company to
AMG, if any of the conditions set forth in Section 9 of this Agreement have not
been satisfied at or prior to October 31, 1997, or if it has become reasonably
and objectively certain that any of such conditions, will not be satisfied at or
prior to October 31, 1997, such written notice to set forth such conditions
which have not been or will not be so satisfied.
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10.2 EFFECT OF TERMINATION; EXPENSES.
(a) All obligations of the parties hereunder shall cease upon any
termination pursuant to Section 10.1; provided, however, that (i) such
termination shall not relieve any party hereto of any liability for any willful
breach of this Agreement and related agreement and (ii) the provisions of this
Section 10, Sections 5.12, 5.13, and 7.2, and the provisions of Section 14
hereof shall survive any termination of this Agreement.
(b) If this Agreement is terminated pursuant to Section 10.1(b) as a
result of a material breach by the Company of this Agreement, the Company shall
be liable to AMG for all actual out-of-pocket expenses incurred by AMG in
connection with the entering into of this Agreement. If this Agreement is
terminated pursuant to Section 10.1(c) as a result of a material breach by AMG
of this Agreement, AMG shall be liable to the Company for all actual
out-of-pocket expenses incurred by the Company in connection with the entering
into of this Agreement. For purposes of this Section 10.2(b), it is understood
that the failure to satisfy a condition shall not in and of itself constitute a
breach of this Agreement. In all other circumstances, expenses shall be paid as
contemplated in Section 14.1.
10.3 RIGHT TO PROCEED. Anything in this Agreement to the contrary
notwithstanding, if any of the conditions specified in Section 8 hereof have not
been satisfied, AMG shall have the right to proceed with the transactions
contemplated hereby without waiving any of its rights hereunder, and if any of
the conditions specified in Section 9 hereof have not been satisfied, the
Company shall have the right to proceed with the transactions contemplated
hereby without waiving any of their rights hereunder.
SECTION 11. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
11.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
representations, warranties, agreements and obligations herein or in any
schedule, exhibit or certificate delivered by any party to any other party
incident to the transactions contemplated hereby are material, shall be deemed
to have been relied upon by the other party and shall survive the Closing until
the date that is sixty (60) days following AMG's receipt of audited financial
statements of the LLC for the period ending December 31, 1998, except for the
representations and warranties made in Sections 3.9, 3.24 and, to the extent it
relates thereto, Section 3.28, which shall survive until the expiration of the
applicable statute of limitations, if any and except that all covenants herein
not fully performed shall survive the Closing and continue thereafter until
fully performed. The expiration of any representation or warranty shall not
affect any claim made prior to the date of such expiration. Any investigation,
audit or other examination that may have been made or may be made at any time by
or on behalf of the party to whom any such representation or warranty is made
shall not limit or diminish such representations and warranties, and the parties
may rely on the representations and warranties set forth in this Agreement
irrespective of any information obtained by them by any investigation, audit or
examination or otherwise.
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11.2 REGULATORY FILINGS. Each of the Company and the Stockholders will
cooperate with AMG and Merger Sub and their counsel to enable AMG, Merger Sub
and the LLC to make any and all regulatory filings required by them with respect
to the LLC or the transactions contemplated hereby (including, by way of example
and not of limitation, the filing of tax returns).
SECTION 12. INDEMNIFICATION.
12.1 INDEMNIFICATION BY THE STOCKHOLDERS. The Stockholders jointly and
severally with respect to the representations, warranties and covenants of the
Stockholders and of each Stockholder severally but not jointly with respect to
the representations and warranties that relate only to such Stockholder agree
subsequent to the Closing to indemnify and hold the LLC, Merger Sub, AMG and
their respective subsidiaries and Affiliates and persons serving as officers,
directors, partners stockholders or employees thereof (individually a "AMG
Indemnified Party" and collectively the "AMG Indemnified Parties") harmless from
and against any damages, liabilities, losses (including, without limitation,
diminution in value), taxes, fines, penalties, costs, and expenses (including,
without limitation, reasonable fees of counsel) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing), and, if the AMG
Indemnified Party is the LLC, net of any insurance proceeds actually received by
the LLC (less the aggregate premiums paid by the LLC for such insurance), which
may be sustained or suffered by any of them arising out of or based upon any of
the following matters:
(a) fraud, intentional misrepresentation or a deliberate or willful
breach by the Company, the LLC or any Stockholder or Management Corporation of
any of their representations, warranties or covenants under this Agreement or
any agreement, document or instrument contemplated hereby or in any certificate,
schedule or exhibit delivered pursuant hereto or thereto;
(b) any breach of any representation, warranty or covenant of the
Company, the LLC or any Stockholder or Management Corporation under this
Agreement or under any agreement, document or instrument contemplated hereby, or
in any certificate, schedule or exhibit delivered pursuant hereto or thereto, or
by reason of any claim, action or proceeding asserted or instituted growing out
of any matter or thing constituting such a breach;
(c) the activities, conduct, business or operation of the Company or
the LLC prior to the Closing, or arising out of facts, events or circumstances
regarding the Company or the LLC existing prior to the Closing other than
executory obligations to be performed after the Closing that arise pursuant to
the obligations expressly assumed by the LLC as Assumed Obligations pursuant to
the Asset Transfer Agreement; and
(d) any payments required to be made to the Minnesota State Board of
Investment on account of the performance of the Company in managing assets under
the control of the Minnesota State Board of Investment (the "Minnesota Account")
prior to the Closing (including, without limitation, an account of (i) Residual
(as such term is described on Exhibit C
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to the Minnesota Agreement) in existence on the date of Closing, (ii) any
Carryover (as such term is described on Exhibit C to the Minnesota Agreement) in
existence on the date of Closing, and (iii) the performance of the Minnesota
Account prior to the date of Closing).
12.2 LIMITATIONS ON INDEMNIFICATION BY THE STOCKHOLDERS. Notwithstanding
the foregoing, the right of AMG Indemnified Parties to indemnification under
Section 12.1 other than Section 12.1(d) shall be subject to the following
provisions:
(a) No indemnification shall be payable pursuant to an AMG
Indemnified Party with respect to claims asserted to Section 12.1(b) or 12.1(c)
above, unless the aggregate amount of all claims for indemnification pursuant to
Section 12.1 shall exceed $250,000 in the aggregate, whereupon the full amount
of such claims shall be recoverable in accordance with the terms hereof.
(b) No indemnification shall be payable to an AMG Indemnified Party
with respect to claims asserted pursuant to Section 12.1(b) or 12.1(c) above
(exclusive of any claims for indemnification for Taxes or based upon or related
to a breach of any representation, warranty or covenant with respect to Taxes or
tax related matters (whether or not the representation which is breached
specifically relates to Taxes), Employee Programs or Investment Laws and
Regulations) in amounts in excess of the sum of (i) **confidential treatment
requested** Dollars ($**confidential treatment requested**) and (ii) any and all
amounts of principal under any promissory note issued to such Stockholder (or
the Management Corporation of which he is a stockholder) pursuant to the
provisions of Section 3.12 of the Restated LLC Agreement (whether or not then
due and payable) in accordance with the terms of such note.
(c) No indemnification shall be payable to an AMG Indemnified Party
with respect to claims asserted pursuant to Section 12.1(b) or 12.1(c) above
(exclusive of any claims for indemnification for Taxes or based upon or related
to a breach of any representation, warranty or covenant with respect to Taxes or
tax related matters (whether or not the representation which is breached
specifically relates to Taxes), Employee Programs or Investment Laws and
Regulations) after the date that is sixty (60) days following AMG's receipt of
audited financial statements of the LLC for the period ended December 31, 1998
(the "Indemnification Cut-Off Date"); provided, however, that such expiration
shall not affect any claim with respect to which notice was given in the manner
contemplated by Section 12.5 hereof prior to the Indemnification Cut-Off Date.
12.3 INDEMNIFICATION BY AMG. AMG agrees to indemnify and hold the
Stockholders harmless from and against any damages, liabilities, losses and
expenses (including, without limitation, reasonable fees of counsel) of any kind
or nature whatsoever (whether or not arising out of third-party claims and
including all amounts paid in investigation, defense or settlement of the
foregoing) which may be sustained or suffered by the Stockholders (directly or
indirectly through their interests in the LLC net of insurance proceeds and tax
benefits received by the LLC) arising out of or based upon any breach of any
representation, warranty or covenant made by AMG in this Agreement or in any
agreement, document or instrument contemplated hereby, or
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in any certificate, schedule or exhibit delivered pursuant hereto or thereto, or
by reason of any claim, action or proceeding asserted or instituted growing out
of any matter or thing constituting such a breach.
12.4 LIMITATION ON INDEMNIFICATION BY AMG. Notwithstanding the foregoing,
the right of the Stockholders to indemnification under Section 12.3 shall be
subject to the following provisions:
(a) No indemnification shall be payable to the Stockholders with
respect to claims asserted pursuant to Section 12.3 above unless the total of
all claims for indemnification pursuant to Section 12.3 shall exceed $250,000 in
the aggregate, whereupon the full amount of such claims shall be recoverable in
accordance with the terms hereof.
(b) No indemnification shall be payable to the Stockholders with
respect to claims asserted pursuant to Section 12.3 above in amounts in excess
of **confidential treatment requested** Dollars ($**confidential treatment
requested**).
(c) No indemnification shall be payable to the Stockholders with
respect to claims asserted pursuant to Section 12.3 above after the
Indemnification Cut-Off Date; provided, however, that such expiration shall not
affect any claim with respect to which notice was given in the manner
contemplated by Section 12.5 hereof prior to the Indemnification Cut-Off Date.
12.5 NOTICE; DEFENSE OF CLAIMS. An indemnified party may make claims for
indemnification hereunder by giving written notice thereof to the indemnifying
party within the period in which indemnification claims can be made hereunder.
If indemnification is sought for a claim or liability asserted by a third party,
the indemnified party shall also give written notice thereof to the indemnifying
party promptly after it receives notice of the claim or liability being
asserted, but the failure to do so shall not relieve the indemnifying party from
any liability except to the extent that it is prejudiced by the failure or delay
in giving such notice. Such notice shall summarize the bases for the claim for
indemnification and any claim or liability being asserted by a third party.
Within twenty (20) days after receiving such notice the indemnifying party shall
give written notice to the indemnified party stating whether it disputes the
claim for indemnification and whether it will defend against any third party
claim or liability at its own cost and expense. If the indemnifying party fails
to give notice that it disputes an indemnification claim within twenty (20) days
after receipt of notice thereof, it shall be deemed to have accepted and agreed
to the claim, which shall become immediately due and payable. The indemnifying
party shall be entitled to direct the defense against a third party claim or
liability with counsel selected by it (subject to the consent of the indemnified
party, which consent shall not be unreasonably withheld) as long as the
indemnifying party is conducting a good faith and diligent defense. The
indemnified party shall at all times have the right to fully participate in the
defense of a third party claim or liability at its own expense directly or
through counsel; provided, however, that if the named parties to the action or
proceeding include both the indemnifying party and the indemnified party and the
indemnified party is advised that representation of both parties by the same
counsel would be inappropriate under applicable standards of professional
conduct, the indemnified party may engage separate counsel at the expense of the
indemnifying party. If no such notice of intent
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to dispute and defend a third party claim or liability is given by the
indemnifying party, or if such good faith and diligent defense is not being or
ceases to be conducted by the indemnifying party, the indemnified party shall
have the right, at the expense of the indemnifying party, to undertake the
defense of such claim or liability (with counsel selected by the indemnified
party), and to compromise or settle it, exercising reasonable business judgment.
If the third party claim or liability is one that by its nature cannot be
defended solely by the indemnifying party, then the indemnified party shall make
available such information and assistance as the indemnifying party may
reasonably request and shall cooperate with the indemnifying party in such
defense, at the expense of the indemnifying party.
12.6 SATISFACTION OF THE STOCKHOLDERS' INDEMNIFICATION OBLIGATIONS. In
order to satisfy the indemnification obligations of the Stockholders pursuant to
Section 10.1 above, an AMG Indemnified Party shall have the right (in addition
to collecting directly from the Stockholders) to set off its indemnification
claims against any and all amounts of interest and principal under any
promissory note issued to such Stockholder (or the Management Corporation of
which he is a stockholder) pursuant to the provisions of Section 3.12(e) of the
Restated LLC Agreement (whether or not then due and payable) in accordance with
the terms of such note.
SECTION 13. DEFINITIONS.
13.1 DEFINITIONS. For purposes of this Agreement and the Exhibits and
Schedules hereto, the following terms shall have the respective meanings set
forth in this Section 13.1.
"Adjustment Fractions" shall have the meaning specified in Section
1.7(b)(i).
"Advisers Act" shall mean the Investment Advisers Act of 1940, as the same
may be amended from time to time, and any successor to such act.
"Affiliate" shall mean, with respect to any person or entity (herein the
"first party"), any other person or entity that directly or indirectly controls,
or is controlled by, or is under common control with, such first party. The term
"control" as used herein (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to (a)
vote fifty percent (50%) or more of the outstanding voting securities of such
person or entity, or (b) otherwise direct the management or policies of such
person or entity by contract or otherwise.
"AMG" shall have the meaning specified in the preamble hereto.
"AMG Indemnified Party" shall have the meaning specified in Section 12.1
hereof.
"Asset Transfer" shall mean each of the transactions contemplated by the
Asset Transfer Agreement as well as each of the other agreements, documents and
instruments contemplated thereby.
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"Asset Transfer Agreement" shall mean the Asset Transfer Agreement in the
form attached hereto as Exhibit 8.6.
"Base Balance Sheet" shall have the meaning specified in Section 3.8
hereof.
"Base Fees" shall have the meaning specified in Section 8.3 hereof.
"Certificate of Incorporation" shall mean the Company's Certificate of
Incorporation, as amended to the date of this Agreement.
"Certificate of Merger" shall have the meaning specified in Section 1.2
hereof.
"Claims" shall mean any restrictions, liens, claims, charges, security
interests, assignments, mortgages, deposit arrangements, pledges or encumbrances
of any kind or nature whatsoever.
"Closing" shall have the meaning specified in Section 1.8 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and any successor code thereto. For purposes of this Agreement, all
references to Sections of the Code shall include any predecessor provisions to
such Sections and any similar provisions of federal, state, local or foreign
law.
"Commodity Exchange Act" shall mean the Commodity Exchange Act, 7 U.S.C.
Section 1 et. seq., as the same may be amended from time to time, and any
successor to such act.
"Company" shall have the meaning specified in the preamble hereto.
"Consent" shall have the meaning specified in Section 8.3 hereof.
"Contract Value" shall have the meaning specified in Section 8.3 hereof.
"Delaware Act" shall mean the Delaware Limited Liability Company Act, 6
Del. C. Section 18-101, et. seq., as amended from time to time, and any
successor to such act.
"Effective Time" shall have the meaning specified in Section 1.2 hereof.
"Employees" shall have the meaning specified in Section 3.25(c) hereof.
"Employment Agreement" shall have the meaning specified in Section 8.9
hereof.
"Employment Arrangement" shall have the meaning specified in Section
3.25(c) hereof.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor to such act.
"ERISA Client" shall have the meaning specified in Section 3.7(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor to such act.
"Existing Certificate of Formation" shall mean the Certificate of
Formation of the LLC, as amended to the date of this Agreement.
"Existing LLC Agreement" shall mean the Limited Liability Company
Agreement of the LLC dated as of August __, 1997, which is the Limited Liability
Company Agreement of the LLC on the date of this Agreement and immediately prior
to its amendment and restatement into the Restated LLC Agreement.
"GAAP" shall mean United States generally accepted accounting principles
as in effect from time to time.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"IMRO" shall mean the United Kingdom Investment Management Regulatory
Organization Ltd., or any successor organization thereto.
"Indemnification Cut-Off Date" shall have the meaning specified in Section
12.2(c) hereof.
"Intellectual Property" shall have the meaning specified in Section
3.14(a).
"Investment Company Act" shall mean the Investment Company Act of 1940, as
the same may be amended from time to time, and any successor to such act.
"Investment Laws and Regulations" shall have the meaning specified in
Section 3.17.
"Investment Management Services" shall mean any services which involve (a)
the management of an investment account or fund (or portions thereof or a group
of investment accounts or funds), or (b) the giving of advice with respect to
the investment and/or reinvestment of assets or funds (or any group of assets or
funds), and activities related or incidental thereto.
"IRS" shall mean the Internal Revenue Service.
"Licenses" shall have the meaning specified in Section 3.18(b) hereof.
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"LLC" shall mean GeoCapital, LLC, a Delaware limited liability company.
"LLC Points" shall have the meaning specified in the Restated LLC
Agreement.
"Management Corporation" shall have the meaning specified in the preamble
hereof.
"Material Adverse Effect" shall mean, with respect to a Person, a material
adverse effect on the condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects of such Person.
"Merger" shall have the meaning specified in Section 1.1 hereof.
"Merger Consideration" shall have the meaning specified in Section 1.7
hereof.
"Minnesota Account" shall have the meaning specified in Section 12.1(d)
hereof.
"Minnesota Agreement" shall mean the Investment Advisory Agreement dated
as of July 1, 1993 between the Company and the Minnesota State Board of
Investment.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Non Solicitation Agreement" shall mean a Non Solicitation/Non Disclosure
Agreement substantially in the form attached hereto as Exhibit 8.8.
"Person" shall mean any individual, partnership (general or limited),
corporation, limited liability company, limited liability partnership,
association, trust, joint venture, unincorporated organization, and any
government, governmental department or agency or political subdivision thereof.
"Preferred Shares" shall have the meaning specified in Section 1.7(a)
hereof.
"Preferred Stock" shall mean Series B-1 Preferred Stock, $.01 par value
per share, of AMG; provided, however, that if AMG has created or believes it is
likely to create a class or series of convertible preferred stock, then at the
option of AMG, "Preferred Stock" shall mean Class D Preferred Stock, $.01 par
value per share on substantially the terms and conditions provided to the
Stockholders by AMG as of the date of this Agreement as being the terms and
conditions of the proposed Class C Preferred Stock, $.01 per value per share.
"Private Funds" shall mean Applewood Associates, L.P., Xxxxxxxx Partners,
L.P. and Xxxxxxxx Foreign Partners, L.P.
"Restated LLC Agreement" shall mean the Amended and Restated Limited
Liability Company Agreement of the LLC in substantially the form attached hereto
as Exhibit 2.1, as the same may be amended from time to time in accordance with
its terms.
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"SEC" shall mean the Securities and Exchange Commission, or any successor
agency thereto.
"Securities Act" shall mean the Securities Act of 1933, as the same may be
amended from time to time, and any successor to such act.
"Stockholder" shall have the meaning specified in the preamble hereof.
"Surviving Corporation" shall have the meaning specified in Section 1.1
hereof.
"Taxes" shall have the meaning specified in Section 3.9(a) hereof.
"Taxing Authority" shall have the meaning specified in Section 3.9(c)
hereof.
SECTION 14. MISCELLANEOUS.
14.1 FEES AND EXPENSES. Subject to Section 10.2(b), the rights and
obligations of the parties with respect to fees and expenses are set forth in
this Section 14.1. AMG shall pay its own expenses incident to the negotiation
and consummation of the transactions contemplated by this Agreement and the
agreements, instruments and documents contemplated hereby, including without
limitation, any filing fees under the HSR Act. The Stockholders shall pay their
own expenses and the expenses of the Company and the LLC incident to the
negotiation and consummation of the transactions contemplated by this Agreement
and the agreements, instruments and documents contemplated hereby, including
without limitation the reasonable costs of such reviews or audits as may be
requested by AMG pursuant to Section 5.14 and the reasonable costs incurred in
connection with the policies and procedures contemplated in Section 8.15;
provided, however, that AMG shall pay the filing and registration fees incurred
by the LLC in connection with the transactions contemplated hereby.
14.2 DISPUTE RESOLUTION. All disputes arising in connection with this
Agreement shall be resolved by binding arbitration in accordance with the
applicable rules of the American Arbitration Association. The arbitration shall
be held in The Commonwealth of Massachusetts before a single arbitrator selected
in accordance with Section 12 of the American Arbitration Association Commercial
Arbitration Rules who shall have substantial business experience in the
investment advisory industry, and shall otherwise be conducted in accordance
with the American Arbitration Association Commercial Arbitration Rules.
14.3 WAIVERS. Any waiver of any terms or conditions or of the breach of
any covenant, representation or warranty of this Agreement in any one instance,
shall not operate as or be deemed to be or construed as a further or continuing
waiver of any other breach of such term, condition, covenant, representation or
warranty or any other term, condition, covenant, representation or warranty, nor
shall any failure or delay at any time or times to enforce or require
performance of any provision hereof operate as a waiver of or affect in any
manner such party's
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right at a later time to enforce or require performance of such provision or of
any provision hereof; provided, however, that no such waiver, unless it, by its
own terms, explicitly provides to the contrary, shall be construed to effect a
continuing waiver of the provision being waived and no such waiver in any
instance shall constitute a waiver in any other instance or for any other
purpose or impair the right of the party against whom such waiver is claimed in
all other instances or for all other purposes to require full compliance. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
14.4 GOVERNING LAW. This Agreement shall be construed under and governed
by the internal laws of The Commonwealth of Massachusetts without regard to its
conflict of laws provisions.
14.5 NOTICES. Any notice, request, demand or other communication required
or permitted hereunder shall be in writing and shall be deemed to have been
given if delivered or sent by facsimile transmission, upon receipt, or if sent
by registered or certified mail, upon the sooner of the date on which receipt is
acknowledged or the expiration of three days after deposit in United States post
office facilities properly addressed with postage prepaid. All notices to a
party will be sent to the addresses set forth below or to such other address or
person as such party may designate by notice to each other party hereunder:
TO AMG: Affiliated Managers Group, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx, Senior Vice President
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxx Fries
Facsimile No.: (000) 000-0000
TO Merger Sub: c/o Affiliated Managers Group, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx, Senior Vice President
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxx Fries
Facsimile No.: (000) 000-0000
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TO COMPANY: GeoCapital Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
With a copy to: Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxxxx
Facsimile No.: (000) 000-0000
TO ANY STOCKHOLDER: c/o GeoCapital Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
With a copy to: Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxxxx
Facsimile No.: (000) 000-0000
TO THE LLC:
Prior to the Closing to: GeoCapital Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
Following the Closing to: c/o Affiliated Managers Group, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx, Senior Vice President
Facsimile No.: (000) 000-0000
Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.
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14.6 ENTIRE AGREEMENT. This Agreement, including the Schedules and
Exhibits referred to herein and the other writings specifically identified
herein or contemplated hereby, is complete, reflects the entire agreement of the
parties with respect to its subject matter, and supersedes all previous written
or oral negotiations, commitments and writings. No promises, representations,
understandings, warranties and agreements have been made by any of the parties
hereto except as referred to herein or in such Schedules and Exhibits or in such
other writings; and all inducements to the making of this Agreement and the
transactions contemplated hereby which were relied upon by either party hereto
have been expressed herein or in such Schedules or Exhibits or in such other
writings.
14.7 ASSIGNABILITY; BINDING EFFECT. This Agreement or any of the
obligations or rights hereunder (i) may only be assigned by AMG to an entity
under the control of AMG other than with the prior written consent of the
Company, and (ii) may not be assigned by any of the Company, the LLC or the
Stockholders without the prior written consent of AMG. This Agreement shall be
binding upon and enforceable by, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
14.8 AMENDMENTS. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by AMG and the Company, or in the case of a
waiver, the party waiving compliance.
14.9 CONSENT TO JURISDICTION. Each of the parties hereby consents to
personal jurisdiction, service of process and venue in the federal or state
courts sitting in the Commonwealth of Massachusetts for any claim, suit or
proceeding arising under this Agreement, or in the case of a third party claim
subject to indemnification hereunder, in the court where such claim is brought
and hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such state court or, to the extent
permitted by law, in such federal court. Each of the parties hereby irrevocably
consents to the service of process in any such action or proceeding by the
mailing by certified mail of copies of any service or copies of the summons and
complaint and any other process to such party at the address specified in
Section 14.5 hereof. The parties agree that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit or in any other manner permitted by law and shall affect the right of a
party to service legal process or to bring any action or proceeding in the
courts of other jurisdictions.
14.10 CAPTIONS AND GENDER. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter,
as the context may require.
14.11 EXECUTION IN COUNTERPARTS. For the convenience of the parties and to
facilitate execution, this Agreement may be executed by facsimile (if followed
by an original delivered
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within two (2) business days) in two or more counterparts, each of which shall
be deemed an original, but all of which shall constitute one and the same
document.
14.12 PUBLICITY AND DISCLOSURES. No press releases or public disclosure,
either written or oral, of the transactions contemplated by this Agreement,
shall be made by a party to this Agreement without the prior knowledge and
written consent of AMG and the Company, except as may be otherwise required by
applicable laws, rules and regulations (including, without limitation, the
Securities Act, the Exchange Act and the rules and regulations promulgated
thereunder).
[END OF TEXT]
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date set forth above by their duly authorized
representatives.
AMG:
AFFILIATED MANAGERS GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------
Name: Xxxxxxx X. Xxxx
Title: President and CEO
MERGER SUB:
AMG MERGER SUB, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: President
COMPANY:
GEOCAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
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LLC:
GEOCAPITAL, LLC
By: GeoCapital Corporation, manager
member
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
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STOCKHOLDERS:
/s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
/s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx
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Certifications
The undersigned, being the Secretary of Merger Sub, hereby certifies that
this Agreement has been adopted by the Board of Directors of Merger Sub pursuant
to Section 251(f) of the Delaware General Corporation Law and that (1) this
Agreement does not amend the Certificate of Incorporation, (2) each outstanding
share of Merger Sub prior to the Merger is identical to those shares outstanding
after the Effective Date, and (3) no shares of Merger Sub are to be issued or
delivered pursuant to this Agreement.
__________________________________
Xxxxxxxxx Xxxxxx
Secretary
Dated: _____________, 1997
The undersigned, being the Secretary of GeoCapital Corporation, hereby
certifies that all of the outstanding shares of each class of GeoCapital
Corporation entitled to vote on this Agreement have voted for the adoption of
such Agreement.
__________________________________
[Xxxxx Xxxxxxxxx]
Secretary
Dated: _____________, 1997
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