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EXHIBIT 2.5
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.
PARTNERSHIP INTEREST PURCHASE AGREEMENT
BY AND AMONG
AFFILIATED MANAGERS GROUP, INC.,
MESIROW ASSET MANAGEMENT, INC.,
MESIROW FINANCIAL HOLDINGS, INC.,
SKYLINE ASSET MANAGEMENT, L.P.,
CERTAIN MANAGERS OF
MESIROW ASSET MANAGEMENT, INC.
AND
THE MANAGEMENT CORPORATIONS NAMED HEREIN
DATED AS OF JUNE 6, 1995
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TABLE OF CONTENTS
Page
SECTION 1. PURCHASE AND SALE OF PARTNERSHIP INTERESTS AND
RESTATEMENT OF PARTNERSHIP AGREEMENT......................... 2
1.1 Sale and Purchase............................................ 2
1.2 Purchase Price............................................... 2
1.3 Closing...................................................... 3
1.4 Restatement of Partnership Agreement......................... 3
SECTION 2. REPRESENTATIONS AND WARRANTIES OF MESIROW ASSET
MANAGEMENT AND MESIROW HOLDINGS.............................. 3
2.1 Organization................................................. 3
2.2 Authority.................................................... 4
2.3 Non-Contravention............................................ 5
2.4 Capitalization............................................... 5
2.5 Indebtedness and Subsidiaries................................ 6
2.6 Business..................................................... 6
2.7 Assets....................................................... 6
2.8 Assets Under Management...................................... 7
2.9 Contracts.................................................... 8
2.10 Employment Arrangements...................................... 8
2.11 Financial Statements......................................... 8
2.12 Ordinary Course of Business.................................. 9
2.13 Litigation and Compliance with Laws.......................... 9
2.14 Broker Dealer................................................ 10
2.15 Code of Ethics............................................... 10
2.16 Insurance Policies........................................... 10
2.17 Absence of Certain Changes................................... 10
2.18 Tax Matters.................................................. 11
2.19 Certain Transactions......................................... 12
2.20 Employee Benefit Plans....................................... 12
2.21 Managers' Health............................................. 13
2.22 Brokerage.................................................... 13
2.23 Mesirow Growth Fund.......................................... 13
2.24 The Skyline Funds............................................ 14
2.25 Material Information......................................... 17
SECTION 3. REPRESENTATIONS AND WARRANTIES OF AMG........................ 17
3.1 Organization................................................. 17
3.2 Authority.................................................... 17
3.3 Non-Contravention............................................ 18
3.4 Investment Representation.................................... 18
(i)
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Page
3.5 Business..................................................... 18
3.6 Litigation and Compliance with Laws.......................... 18
3.7 Broker Dealer................................................ 19
3.8 Brokerage.................................................... 19
SECTION 4. REPRESENTATIONS AND WARRANTIES OF EACH MANAGER AND
EACH MANAGEMENT CORPORATION.................................. 19
4.1 Individual Power and Authority............................... 19
4.2 Corporate Organization and Authority......................... 20
4.3 Non-Contravention............................................ 20
4.5 Litigation and Compliance with Laws.......................... 21
4.6 Brokerage.................................................... 22
4.7 Investment Advisory Representation........................... 22
4.8 Good Health.................................................. 22
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT
CORPORATIONS................................................. 22
5.1 Assets Under Management...................................... 22
5.2 Ordinary Course of Business.................................. 23
5.3 Litigation and Compliance with Laws.......................... 23
SECTION 6. CONDITIONS PRECEDENT TO AMG'S OBLIGATION..................... 23
6.1 Litigation; No Opposition.................................... 23
6.2 Representations, Warranties and Covenants.................... 24
6.3 Advisory Contract Consents................................... 24
6.4 Registration as an Investment Adviser........................ 25
6.5 Other Approvals.............................................. 25
6.6 Asset Transfer............................................... 25
6.7 Non Solicitation/Non Disclosure Agreements................... 25
6.8 Working Capital and Tangible Net Worth of the Partnership.... 25
6.9 Delivery..................................................... 26
6.10 Code of Ethics, etc.......................................... 27
6.11 Resignations................................................. 27
6.12 Elections.................................................... 27
6.13 Termination of Mesirow Growth Fund........................... 28
6.14 New Fund Contracts........................................... 28
6.15 Termination of Existing Advisory and Distribution
Arrangements................................................. 28
6.16 Termination of Covenant Concerning Confidential Information.. 28
SECTION 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF .................. 28
7.1 No Litigation; No Opposition................................. 29
7.2 Representations, Warranties and Covenants.................... 29
(ii)
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7.3 Delivery..................................................... 29
7.4 Advisory Contract Consents................................... 29
7.5 New Fund Distribution Arrangements........................... 30
SECTION 8. COVENANTS OF THE PARTIES..................................... 30
8.1 Client Consents.............................................. 30
8.2 Conduct of Business.......................................... 31
8.3 Preservation of Business and Assets.......................... 32
8.4 Observer Rights and Access................................... 32
8.5 Termination of Reserve Fund Arrangements..................... 32
8.6 Use of Skyline Name.......................................... 32
8.7 SEC Filings.................................................. 32
8.8 Interim Financial Statements................................. 33
8.9 Confidentiality.............................................. 33
8.10 Expenses..................................................... 34
8.11 Covenants With Respect to Section 15(f) of the Investment
Company Act.................................................. 34
8.12 Retirement Plans............................................. 35
8.13 Agreement with Mesirow Financial............................. 35
8.14 Mesirow Growth Fund.......................................... 35
8.15 Tax Compliance............................................... 35
SECTION 9. INDEMNIFICATION.............................................. 36
9.1 Indemnification by Mesirow Asset Management and Mesirow
Holdings..................................................... 36
9.2 Indemnification by Management Corporations................... 36
9.3 Indemnification by AMG....................................... 37
9.4 Survival of Indemnification Obligations...................... 37
9.5 Defense of Claims............................................ 38
9.6 Prompt Payment............................................... 39
SECTION 10. DEFINITIONS.................................................. 39
10.1 Definitions.................................................. 39
10.2 Survival of Representations, Warranties and Covenants........ 42
10.3 Certain Activities........................................... 43
10.4 Termination of Agreement..................................... 43
10.5 Waivers...................................................... 44
10.6 Modifications................................................ 44
10.7 Further Assurances........................................... 44
10.8 Law Governing................................................ 44
10.9 Notices...................................................... 44
10.10 Prior Agreements Superseded.................................. 47
10.11 Assignability................................................ 47
(iii)
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10.12 Captions..................................................... 47
10.13 Gender and Number............................................ 47
10.14 Severability................................................. 47
10.15 Counterparts................................................. 47
Exhibits
Exhibit 1.4(a) Form of Restated Partnership Agreement
Exhibit 1.4(b) Form of Restated Certificate of Limited Partnership
Exhibit 2.1 Form of Partnership Agreement
Exhibit 6.6 Form of Asset Transfer Agreement
Exhibit 6.7 Form of Non Solicitation/Non Disclosure Agreement
Exhibit 6.9(k) Form of Opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
Exhibit 6.9(l) Form of Opinion of ▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇
Exhibit 6.9(m) Form of Trademark, Tradename and Service ▇▇▇▇
Assignment
Exhibit 7.3(f) Form of Opinion of ▇▇▇▇▇▇▇, Procter & ▇▇▇▇
Exhibit 8.1(a) Form of Consent Letter, Version A
Exhibit 8.1(b) Form of Consent Letter, Version B
Schedules
Schedule 2.3 Lender Consents
Schedule 2.4(a) Partnership Capitalization
Schedule 2.6(a) Jurisdictions Where Mesirow Asset Management is
Registered as an Investment Adviser
Schedule 2.6(b) Clients of the Institutional Business
Schedule 2.6(c) Clients of the Portfolio Business
(iv)
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Schedule 2.7(c)(i) Persons Claiming Rights to Trademarks, Trade Names and
Service Marks
Schedule 2.7(c)(ii) List of Trademarks, Trade Names and Service Marks to
be Transferred
Schedule 2.8 Assets under Management in the Institutional Business
Schedule 2.10(a) List of Employees
Schedule 2.10(b) Employment Arrangements
Schedule 2.10(c) Confidentiality, Non Disclosure, Non Solicitation and
Non Competition Agreements
Schedule 2.11 Financial Statements
Schedule 2.17(d) Compensation Increases Since December 31, 1994
Schedule 2.24(e) Skyline Trust Contracts
Schedule 2.24(f) Skyline Trust Tax Matters
Schedule 2.24(m) Skyline Trust Insurance Policies
Schedule 6.6 Partnership Capitalization and Capital Accounts
(v)
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PARTNERSHIP INTEREST PURCHASE AGREEMENT
PARTNERSHIP INTEREST PURCHASE AGREEMENT dated as of June 6, 1995, by and
among Affiliated Managers Group, Inc., a Delaware corporation ("AMG"), Mesirow
Asset Management, Inc., an Illinois corporation ("Mesirow Asset Management"),
Mesirow Financial Holdings, Inc., a Delaware corporation ("Mesirow Holdings"),
Skyline Asset Management, L.P., a Delaware limited partnership (the
"Partnership"), WMD Corp., an Illinois corporation ("Duttoncorp"), KSK Corp., an
Illinois corporation ("Kailincorp"), GXL Corp. an Illinois corporation
("Lutzcorp"), MXM Corp., an Illinois corporation ("Maloneycorp" and, together
with Duttoncorp, Kailincorp and Lutzcorp, the "Management Corporations"), ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ of Hinsdale, Illinois ("▇▇▇▇▇▇"), ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ of
Evanston, Illinois ("Kailin"), ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Glenview, Illinois ("▇▇▇▇")
and Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of Chicago, Illinois ("▇▇▇▇▇▇▇"). ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇
and ▇▇▇▇▇▇▇ are each referred to herein individually as a "Manager" and
collectively as the "Managers."
W I T N E S S E T H:
WHEREAS, Mesirow Asset Management is engaged in the business of providing
investment management and advisory services to private accounts of certain
institutional and individual investors and private investment partnerships, as
well as to portfolio series of certain mutual funds which are registered
investment companies under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, on the date hereof, Mesirow Holdings owns all of the outstanding
capital stock of Mesirow Financial Services, Inc., an Illinois corporation
("Mesirow Financial"), which in turn owns all of the outstanding capital stock
of Mesirow Asset Management; and
WHEREAS, the parties hereto desire to enter into this agreement providing
for the purchase by AMG of all of Mesirow Asset Management's interest in the
Partnership and that, in connection therewith, that the Partnership's
Partnership Agreement be amended and restated in the form attached hereto as
Exhibit 1.4(a) (the "Restated Partnership Agreement"); and
WHEREAS, Mesirow Asset Management, Mesirow Holdings and the other parties
hereto desire and intend, and it is a condition precedent to the obligations of
AMG hereunder, that, one full business day prior to the closing of the
transactions contemplated hereby, Mesirow Holdings will cause Mesirow Asset
Management to, and Mesirow Asset Management will, contribute assets involved in
the institutional division of its investment management business and working
capital to the Partnership, as more fully described below, in exchange for
Partnership Points and a Capital Account therein pursuant to the Asset Transfer
Agreement in the form attached hereto as Exhibit 6.6 (the "Asset Transfer
Agreement"); and
WHEREAS, in order to induce the other parties hereto to enter into this
Agreement, and in order to receive the benefits that will accrue to them if AMG
purchases Mesirow Asset
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Management's interest in the Partnership and the other benefits they will derive
from the transactions contemplated hereby, Mesirow Holdings, Mesirow Asset
Management, the Management Corporations and the Managers have agreed to make
certain representations, warranties and covenants as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto do hereby severally covenant and agree as
follows:
SECTION 1. PURCHASE AND SALE OF PARTNERSHIP INTERESTS AND RESTATEMENT OF
PARTNERSHIP AGREEMENT.
1.1 Sale and Purchase. Subject to the terms, provisions and conditions
contained in this Agreement, and on the basis of the representations, warranties
and covenants herein set forth:
(a) Mesirow Asset Management hereby agrees, and Mesirow Holdings
hereby agrees to cause Mesirow Asset Management, to sell and deliver to AMG,
free and clear of any restrictions, liens, claims, charges, pledges or
encumbrances of any kind or nature whatsoever (collectively, "Claims"), all of
Mesirow Asset Management's interest in the Partnership, which shall include (i)
a Capital Account equal to ********** Dollars ($**) which is one hundred percent
(100%) of the Mesirow Capital Account (as such term is defined in the Restated
Partnership Agreement), and (ii) Partnership Points held by Mesirow Asset
Management on the date of this Agreement as reflected on Schedule 2.4(a) (the
"Purchased Partnership Interest"), and AMG hereby agrees to purchase the
Purchased Interest from Mesirow Asset Management for the Partnership Interest
Purchase Price (as such term is defined in Section 1.2 below).
(b) Mesirow Holdings hereby agrees to assign, sell and transfer all
right, title and interest in and to the Marks (as such term is defined in the
Trademark, Tradename and Service ▇▇▇▇ Assignment in the form of Exhibit 6.9(m)
hereto), together with (i) the registration of the Marks, (ii) the goodwill of
the business symbolized by and associated with the Marks and the registration
thereof, and (iii) the right to ▇▇▇ and recover for, and the right to profits or
damages due or accrued arising out of or in connection with, any and all past,
present or future infringements or dilution of or damage or injury to the Marks
or the registration thereof or such associated goodwill (the "Purchased
Intellectual Property Interest"), and AMG hereby agrees to purchase the
Purchased Intellectual Property Interest from Mesirow Asset Management for the
Intellectual Property Interest Purchase Price (as such term is defined in
Section 1.2 below).
1.2 Purchase Price.
(a) The aggregate purchase price for the Purchased Partnership
Interest shall be ********** Dollars ($**), subject to adjustment as provided in
Section 1.2(b) (as so adjusted, the "Partnership Interest Purchase Price"),
payable at the Closing by wire transfer to an account
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specified by Mesirow Asset Management to AMG in writing at least two business
days prior to the Closing.
(b) In the event that at or prior to the Closing clients of the
Institutional Business of Mesirow Asset Management (including the Skyline
Funds) shall have either (i) terminated advisory agreements (or given notice of
their intention to do so) following December 31, 1994 or (ii) failed to consent
to the transactions contemplated hereby or, in the case of registered
investment companies, failing to enter into Comparable Contracts (collectively,
"Non-Consenting Clients"), such that the Aggregate Contract Payments provided
for in the advisory contracts between Mesirow Asset Management and all such
Non-Consenting Clients exceeds ten percent (10%) of Base Fees, then the
unadjusted purchase price for the Purchased Partnership Interest of **********
Dollars ($**) shall be reduced in an amount equal to Seventy-Five Thousand
Dollars ($75,000) for each one percent (1%) of Aggregate Contract Payments
provided for in the advisory contracts between Mesirow Asset Management and
such Non-Consenting Clients, as a percentage of Base Fees (rounded to the
nearest whole percent), that is in excess of ten percent (10%) of Base Fees,
subject in any event to Section 6.3(c) and Section 7.4 hereof.
(c) The aggregate purchase price for the Purchased Intellectual
Property Interest shall be Twenty Thousand Dollars ($20,000) (the "Intellectual
Property Purchase Price" and, together with the Partnership Interest Purchase
Price, the "Purchase Price"), payable at the Closing by wire transfer to an
account specified by Mesirow Holdings AMG in writing at least two business days
prior to the Closing.
1.3 Closing. The closing of the purchase, sale and acceptance of the
Purchased Interest and the payment therefor (the "Closing") shall take place at
the offices of the Partnership in Chicago, Illinois, at 10:00 a.m., local time,
on the closing date, which shall be the last business day of the calendar month
in which the last of the conditions set forth in Sections 6 and 7 hereof is
fulfilled or waived, or such other date (or at such other place) as shall be
mutually agreed upon by Mesirow Holdings and AMG, and shall be one full business
day after the Asset Transfers, such date being herein called the "Closing Date."
1.4 Restatement of Partnership Agreement. Simultaneously with and at the
Closing, the Partnership Agreement of the Partnership shall be amended and
restated in the form attached hereto as Exhibit 1.4(a), and the Certificate of
Limited Partnership of the Partnership shall be amended and restated in the form
attached hereto as Exhibit 1.4(b) (the "Restated Certificate"), which Restated
Certificate shall have become effective simultaneously with the Closing.
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SECTION 2. REPRESENTATIONS AND WARRANTIES OF MESIROW ASSET MANAGEMENT AND
MESIROW HOLDINGS.
As a material inducement to AMG to enter into this Agreement, Mesirow
Asset Management and Mesirow Holdings, jointly and severally, make each of the
representations, warranties and agreements contained in this Section 2 to AMG.
2.1 Organization. Each of Mesirow Asset Management and Mesirow Financial
is a corporation duly organized, legally existing and in good standing under the
laws of the State of Illinois, and Mesirow Holdings is a corporation duly
organized, legally existing and in good standing under the laws of the State of
Delaware (Mesirow Asset Management, Mesirow Financial and Mesirow Holdings,
together with the Partnership to the extent and during the time that Mesirow
Asset Management is the general partner thereof, hereinafter being referred to
separately as a "Mesirow Entity" and collectively as the "Mesirow Entities").
The Partnership is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Delaware; and a copy of the
Partnership's Limited Partnership Agreement (the "Partnership Agreement") is
attached hereto as Exhibit 2.1. Each of the Mesirow Entities is duly authorized
to conduct its business and is in good standing 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 where the failure to be so
licensed or qualified does not have a Material Adverse Effect on the entity
failing to be so licensed or qualified.
2.2 Authority. (a) Mesirow Asset Management has all requisite corporate
power and authority to own its assets and conduct its business and possesses all
material licenses, franchises, registrations, permits, approvals and other
rights (collectively, "Licenses") necessary to conduct its business as presently
carried on by it. Each of the Mesirow Entities has all requisite corporate power
and authority to execute, deliver and perform this Agreement, the other
Transaction Documents to which it is a party and to carry out the transactions
contemplated herein and therein. This Agreement and each other Transaction
Document to which any Mesirow Entity is a party has been duly and validly
approved by all necessary action of such entity, and this Agreement and each
other such Transaction Document represents or, when executed and delivered, will
represent, the valid and legally binding obligation of such Mesirow Entity,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights.
(b) The Partnership has all requisite partnership power and
authority under the Partnership Agreement (and, after giving effect to the
Closing and the execution, delivery and effectiveness of the Restated
Partnership Agreement, under the Restated Partnership Agreement) and under the
Delaware Act, to own its assets and conduct its business (and, after giving
effect to the Asset Transfers, to conduct the Institutional Business), and
possesses all Licenses necessary to conduct its business (and, after giving
effect to the Asset Transfers, to conduct the Institutional Business). The
Partnership has all requisite partnership power and authority under the
Partnership Agreement (and, after giving effect to the Closing and the
execution, delivery and effectiveness
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of the Restated Partnership Agreement, under the Restated Partnership Agreement)
and under the Delaware Act, to execute, deliver and perform this Agreement, and
the other Transaction Documents to which it is a party and to carry out the
transactions contemplated herein and therein. This Agreement and each other
Transaction Document to which the Partnership is a party has been duly and
validly approved by all necessary action of the Partnership (including all
necessary action of the General Partner) and this Agreement and each other such
Transaction Document represents or, when executed and delivered, will represent
the valid and legally binding obligation of the Partnership, enforceable against
the Partnership in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights.
2.3 Non-Contravention. The execution, delivery and performance of this
Agreement, each other Transaction Document and each other agreement, document
and instrument to be executed, delivered and performed by each of the Mesirow
Entities in connection with the transactions contemplated hereby and thereby
does not and will not: (a) violate any provision of the charter or by-laws, or
partnership agreement, respectively, of such Mesirow Entity; (b) violate,
conflict with, result in a default under, accelerate any obligation under or
give rise to a right of termination of any indenture or loan or credit agreement
or any other contract, agreement, instrument, mortgage, lien, lease, permit,
writ, order, judgment, authorization, injunction, decree, determination,
arbitration award or other obligation to which any Mesirow Entity is a party or
by which it or its assets are bound (except that in order to consummate the
transactions contemplated by this Agreement Mesirow Holdings is required to
obtain consent under each of the loan or credit agreements listed on Schedule
2.3, which consents will have been received prior to the Closing or at any
earlier time required under such agreements); (c) violate or result in a
violation of, or constitute a default under, any provision of any law,
regulation or rule, or any order of, or any restriction imposed by, any court or
other governmental agency, authority or entity; (d) require any Mesirow Entity
to obtain any approval, consent or waiver of, or make any filing with, any
person or entity that has not been obtained or made (except as contemplated by
Sections 6.3 and 6.4, which approvals, consents, waivers or filings, as
applicable, will have been received prior to the Closing or, at any earlier time
required hereunder or under applicable laws, rules and regulations); or (e)
except as provided by this Agreement, result in the creation or imposition of
any Claim on any of the assets of any Mesirow Entity or any of the interests of
Mesirow Asset Management in the Partnership.
2.4 Capitalization.
(a) Mesirow Asset Management is the sole general partner of the
Partnership, and the capitalization of the Partnership is as set forth on
Schedule 2.4(a), with all such interests owned beneficially and of record by the
persons and in the amounts indicated on Schedule 2.4(a), in each case free and
clear of any Claims other than restrictions imposed pursuant to the Partnership
Agreement. All outstanding Partnership Interests have been duly authorized and
validly issued. After giving effect to the Closing, AMG will be the sole general
partner of the Partnership, and will have good title to the Partnership
Interests purchased hereby, free and clear of any Claims other than restrictions
either imposed pursuant to the Partnership Agreement or
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created by, or with the written consent of, AMG. Except as set forth in this
Agreement, there are no existing rights, agreements or commitments obligating or
which might obligate the Partnership or any of its Partners to issue, transfer,
sell or redeem any securities.
(b) The duly authorized capital stock of Mesirow Asset Management
consists of ten thousand (10,000) shares of Common Stock, one dollar ($1.00) par
value per share, one thousand (1,000) of which shares are issued and outstanding
and held by Mesirow Financial, and the duly authorized capital stock of Mesirow
Financial consists of five thousand (5,000) shares of Common Stock, ten dollars
($10.00) par value per share, four hundred (400) of which are issued and
outstanding and held by Mesirow Holdings. All the outstanding shares of capital
stock of Mesirow Asset Management and Mesirow Financial have been duly
authorized and validly issued and are fully paid and nonassessable.
2.5 Indebtedness and Subsidiaries. Neither Mesirow Asset Management nor
the Partnership has any Indebtedness, nor is either of them a party to any
agreement providing for the borrowing or lending of money. After giving effect
to the Asset Transfers and immediately after the Closing, the Partnership will
not have any Indebtedness, nor will it be a party to any agreement providing for
the borrowing or lending of money, except to the extent that AMG as general
partner of the Partnership takes action to cause the Partnership to incur
indebtedness at or after the Closing. The Institutional Business has been
conducted by Mesirow Asset Management directly and not through any subsidiary,
joint venture, partnership or other entity.
2.6 Business. Mesirow Asset Management is engaged solely in the business
of providing investment management and investment advisory services. Mesirow
Asset Management is duly registered as an investment adviser under the Advisers
Act, is duly registered, licensed and qualified as an investment adviser in each
of the jurisdictions set forth on Schedule 2.6(a), which are all jurisdictions
(a) where such registration, licensing or qualification is required in order to
conduct its business or (b) where the failure to be so registered, licensed or
qualified would have a Material Adverse Effect on the Institutional Business.
Mesirow Asset Management has delivered to AMG or its representatives, true and
complete copies of its Form ADV, as amended to date, and has made available
copies of all state registration forms, likewise as amended to date. The
information contained in such forms was true and complete at the time of filing
in all material respects and is true and complete as of the date hereof. Each
Mesirow Entity has filed all material registration forms and holds all other
Licenses required under applicable federal and state laws in connection with the
Institutional Business (as defined below). After giving effect to the Asset
Transfers and the Closing, and after obtaining the consents required by Sections
6.3, 6.4 and 6.5, the Partnership will have all the Licenses necessary to own
the property it receives in the Asset Transfers and to conduct the businesses
presently conducted by Mesirow Asset Management with respect to all clients of
the institutional division of Mesirow Asset Management listed on Schedule 2.6(b)
hereto (the "Institutional Business"), but expressly excluding the investment
advisory and business conducted by Mesirow Asset Management with respect to
clients of its portfolio division listed on Schedule 2.6(c) hereto (the
"Portfolio Business"). The Partnership has conducted no business, owned no
assets and incurred no liabilities except (x) pursuant to the Asset Transfers,
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(y) with the written consent of AMG or (z) as otherwise necessary to facilitate
the transactions contemplated hereby.
2.7 Assets.
(a) The Partnership does not own any real property. The Partnership
does not and will not own any leasehold or other interest in any real property.
(b) Mesirow Asset Management owns all of the assets listed on
Schedule 1(a) of the Asset Transfer Agreement included in Exhibit 6.6 hereto
free and clear of any Claims except for (i) the Claims of the Partnership and
AMG and (ii) minor imperfections of title or insignificant liens which do not,
in the aggregate, detract from the value of such assets, taken as a whole, or
interfere with the present or proposed uses thereof or the Institutional
Business or, following the Asset Transfers, the Partnership. All the assets
listed on Schedule 1(a) of the Asset Transfer Agreement included in Exhibit 6.6
hereto are being transferred to the Partnership as part of the Asset Transfers
and, after giving effect to the Asset Transfers and the Closing, the Partnership
will own all such assets free and clear of any Claims except those set forth in
clause (ii) above.
(c) To the best knowledge of the Mesirow Entities, none of the
Mesirow Entities nor Skyline Trust has infringed or violated, in any way, any
trademark, trade name, patent, copyright, trade secret or other intellectual
property right or contractual relation of another person. None of the Mesirow
Entities nor the Skyline Trust has received any notice, claim or protest
respecting any such infringement or violation. Set forth on Schedule 2.7(c)(i)
is a list of each other Person known to the Mesirow Entities to claim rights to
any trademark, trade name or service ▇▇▇▇ involving the name "Skyline" for use
in the banking or financial services industry, together with a brief description
of such claim; and as to each such Person and claim or otherwise, to the best
knowledge of the Mesirow Entities, there has not been any incident of confusion
with the Institutional Business. Except for (i) the trademarks, trade names and
service marks described on Schedule 2.7(c)(ii), all of which are being
transferred to AMG pursuant to the Assignment of Trademarks and (ii) computer
software that is commercially available in the retail marketplace, Mesirow Asset
Management neither owns nor uses any material franchises, permits, licenses,
trademarks, trade names, patents, patent applications, copyrights, trade
secrets, computer software, formulas, designs, inventions (together,
"Intellectual Property") or ideas, in the conduct of the Institutional Business
as presently conducted, and no such Intellectual Property is necessary for the
conduct of the Institutional Business as proposed to be conducted by the
Partnership after the Closing.
All of the registrations and applications listed on Schedule 2.7(c)(ii)
have been duly registered in, filed in or issued by the United States Patent and
Trademark Office or the corresponding office of other jurisdictions as
identified on said Schedule, and have been properly maintained and renewed in
accordance with all applicable provisions of law and administrative regulations
of the United States and each such jurisdiction. Each Mesirow Entity has taken
all
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steps required in accordance with sound business practice to establish and
preserve its ownership of all Intellectual Property rights listed on Schedule
2.7(c)(ii).
2.8 Assets Under Management. The aggregate assets under management in the
Institutional Business as of December 31, 1994 and March 31, 1995, are
accurately described on Schedule 2.8 hereto. In addition, set forth on Schedule
2.8 is a list as of March 31, 1995, of all investment management, advisory or
sub-advisory contracts constituting the Institutional Business, 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 as of each such date (the "Fee Schedule") and each
guideline, exhibit, schedule or letter agreement in connection therewith. Since
December 31, 1994, no client of the Institutional Business has given any
indication of its intent to terminate or reduce its investment relationship with
Mesirow Asset Management or, after the Asset Transfers and the Closing, the
Partnership, or adjust the Fee Schedule with respect to any contract in a manner
which would reduce the fee to Mesirow Asset Management or the Partnership, as
applicable.
2.9 Contracts. Each of the material contracts, agreements and obligations
used in, constituting or relevant to the Institutional Business, including each
of the investment advisory contracts that constitutes part of the Institutional
Business, is described on Schedule 2.8 hereof. All such contracts are valid and
effective in accordance with their respective terms, and there is not, under any
such contract, an existing material breach or event which, with the giving of
notice or the lapse of time or both, would become such a breach. All of the
rights and obligations of Mesirow Asset Management under each such contract are
being transferred to the Partnership as part of the Asset Transfers and, after
obtaining the consents set forth in Sections 6.3 and 6.4, and giving effect to
the Asset Transfers and the Closing, (a) each such contract will, immediately
after the Closing, remain valid and effective in accordance with its respective
terms, and the Partnership will be entitled to all rights and remedies
thereunder to which Mesirow Asset Management is now entitled, or (b) to the
extent that applicable law or the terms of such contract provide for an
automatic termination thereof upon an assignment thereof, such contract will
have been replaced by a Comparable Contract. Other than this Agreement and such
other agreements and contracts as are contemplated hereby, the Partnership is
not a party to any obligations, agreements, commitments, powers of attorney or
contracts and there are no other contracts relating to the Institutional
Business.
2.10 Employment Arrangements. Attached hereto as Schedule 2.10(a) is a
list of all employees of the Institutional Business. Except as set forth in
Schedule 2.10(b), no Mesirow Entity has any obligation, contingent or otherwise,
in connection with the Institutional Business of Mesirow Asset Management or
with any of the Persons on such Schedule 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 (f) any other employee contract or non-terminable (whether
with or without penalty) employment arrangement (each an
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"Employment Arrangement"). Except as set forth on Schedule 2.10(c), none of the
Persons on Schedule 2.10(a) has any obligation, contingent or otherwise under
any confidentiality, non disclosure, non solicitation or non competition
agreement (the "Employee Contracts"). No Mesirow Entity is in default with
respect to any material term or condition of any of the foregoing, nor, after
obtaining the consents set forth in Section 6.3, will the Asset Transfers or the
Closing result in default, including, without limitation, after the giving of
notice, lapse of time or both. The Partnership has no obligations, contingent or
otherwise, under any Employment Arrangement, and each Employment Arrangement
under which any Mesirow Entity has any obligation on the date of this Agreement
and each Employee Contract under which any of the Persons on Schedule 2.10(a)
has any obligation will, prior to the Closing, have terminated on terms
acceptable to AMG.
2.11 Financial Statements.
(a) Attached hereto as Schedule 2.11 are (i) audited balance sheets
at March 31, 1994 and March 31, 1993, together with unaudited statements of
income for each of the two years in the period ended March 31, 1994, for Mesirow
Asset Management, (ii) unaudited balance sheets at March 31, 1995, together with
the unaudited statements of income for the year ended March 31, 1995, for
Mesirow Asset Management, (iii) unaudited statements of income for the
Institutional Business for each of the three years ended March 31, 1995, and
(iv) audited balance sheets of Mesirow Holdings at March 31, 1994 and March 31,
1993, all of which financial statements, together with the notes thereto
(together with the audited balance sheets at March 31, 1995, together with the
statements of income and cash flows for the year ended March 31, 1995, for
Mesirow Asset Management and Mesirow Holdings, which shall be delivered to AMG
as soon as practicable and in any event prior to the Closing) and together with
the Interim Financial Statements, are collectively referred to as the "Company
Financial Statements."
(b) The Company Financial Statements have been prepared in
accordance with generally accepted accounting principles, methods and practices
consistently applied using the accrual method of accounting and fairly present
in all material respects the financial position of Mesirow Asset Management or
Mesirow Holdings, as applicable, as of the respective dates thereof, and the
results of their respective operations for the respective periods covered
thereby. The audited financial statements have been certified by Mesirow
Holdings's accountants, an independent accounting firm.
(c) Except as and to the extent reflected or reserved therefor in
the balance sheet of Mesirow Asset Management at March 31, 1995 contained in
Schedule 2.11, including the footnotes and schedules thereto (the "Base Balance
Sheet"), or as otherwise set forth as part of Schedule 2.11, Mesirow Asset
Management has no material liability or liabilities arising other than in the
ordinary course of business.
(d) All of the accounts receivable of the Institutional Business,
shown or reflected on the Base Balance Sheet or the Interim Financial
Statements, were valid and
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enforceable claims, and all of the outstanding accounts receivable of the
Institutional Business of Mesirow Asset Management are valid and enforceable
claims, in each case, subject to no known set-offs or counterclaims. All of the
accounts receivable of the Institutional Business of Mesirow Asset Management
are, to the knowledge of each Mesirow Entity, fully collectible in the ordinary
course of business.
2.12 Ordinary Course of Business. Except as specifically contemplated by
this Agreement, since March 31, 1995, Mesirow Asset Management has operated its
business in the normal, usual and customary manner in the ordinary and regular
course of business, consistent in all material respects with prior practice.
2.13 Litigation and Compliance with Laws. There is no litigation or
governmental or other administrative action, suit, proceeding or investigation
(including, without limitation, any voluntary or involuntary proceeding under
the Bankruptcy Code or any action, suit, proceeding or investigation under any
federal or state securities law or regulation) pending or, to the best knowledge
of the Mesirow Entities, threatened, to which any Mesirow Entity or any officer,
director, stockholder or partner thereof is a party before any federal, state,
municipal or other governmental department, commission, board, agency or
instrumentality, domestic or foreign, at law or in equity or otherwise, (i)
which is related to the business, affairs, properties or assets of Mesirow Asset
Management or the Partnership or (ii) which might call into question the
validity or hinder the enforceability or performance of this Agreement or the
other Transaction Documents or any of the transactions contemplated hereby and
thereby or any of the contracts described on Schedule 2.8 hereof. There are no
proceedings pending, or to the best knowledge of the Mesirow Entities and the
Partnership, threatened, relating to the termination of, or limitation of, any
License held by Mesirow Asset Management or the Partnership, including, without
limitation, the registrations as investment advisers of Mesirow Asset Management
and the Partnership under the Advisers Act, or any similar statute or regulation
of any other jurisdiction. Each Mesirow Entity is, and at all times has been, in
material compliance with all laws and governmental rules and regulations,
domestic or foreign, including, without limitation, all federal or state
securities laws applicable to the business or affairs or properties or assets of
Mesirow Asset Management with respect to the Institutional Business or of the
Partnership. None of the Mesirow Entities nor any officer, director, stockholder
or partner thereof is in material default with respect to any judgment, order,
writ, injunction, decree, demand or assessment issued by any court or any
federal, state, municipal or other governmental agency, board, commission,
bureau, instrumentality or department, domestic or foreign, relating to any
aspect of the business or affairs or properties or assets of Mesirow Asset
Management with respect to the Institutional Business or of the Partnership.
2.14 Broker Dealer. None of Mesirow Asset Management, Mesirow Holdings or
the Partnership is a "broker" or "dealer" within the meaning of the Exchange Act
or any state securities laws.
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2.15 Code of Ethics. The Skyline Trust, Mesirow Asset Management and
Mesirow Financial have each adopted a Code of Ethics which complies with all
applicable provisions of Rule 17j-1 promulgated under the Investment Company
Act, a copy of which has been delivered to AMG. There has been no material
violation or allegation of a material violation of such Code of Ethics.
2.16 Insurance Policies. Upon the effectiveness of the Asset Transfers,
the Partnership has in full force and effect such insurance as is customarily
maintained by companies of a size similar to the Institutional Business in the
same or a similar business, with respect to its business, properties and assets
(including, without limitation, errors and omissions liability insurance). The
Partnership is not in material default under any such policy and each of the
Partnership and Mesirow Asset Management will use all commercially reasonable
efforts to continue such policies in full force and effect through the Closing.
After giving effect to the Asset Transfers, each such insurance policy or
equivalent policies will be in full force and effect through the Closing with
the Partnership as the sole owner and beneficiary of each such policy.
2.17 Absence of Certain Changes. Since December 31, 1994, except as
expressly provided for in this Agreement (or with the prior written consent of
AMG), none of the Mesirow Entities has suffered any change which, individually
or in connection with any other changes, has had or could be expected to have a
Material Adverse Effect on the Institutional Business. In addition, except as
expressly contemplated hereby (or with the prior written consent of AMG), since
December 31, 1994, there has not been:
(a) any adverse change in the financial condition, properties,
assets, liabilities, business or operations of the Institutional Business or the
Partnership;
(b) any change in accounting methods or practices by Mesirow Asset
Management or the Partnership;
(c) any declaration, setting aside or payment of any dividend or
other distribution with respect to, or any direct or indirect redemption or
acquisition of, any of the partnership interests of the Partnership;
(d) except for the increases in salary and bonus compensation set
forth on Schedule 2.17(d), any increase in the salary or other compensation
payable or to become payable by any Mesirow Entity to any officers, directors,
consultants or employees of the Institutional Business or of the Partnership, or
the declaration, payment or commitment or obligation of any kind for the payment
by any Mesirow Entity of a bonus or other additional salary or compensation to
any such persons other than in the ordinary course of business as heretofore
conducted, with the prior written consent of AMG, or as expressly contemplated
hereby;
(e) any amendment or termination or, to the best knowledge of each
Mesirow Entity, proposed or threatened amendment or termination, whether written
or oral, of any
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agreement listed on Schedule 2.8, or License to which Mesirow Asset Management
or the Partnership is a party;
(f) loan or contingent liability incurred by Mesirow Asset
Management or the Partnership to any person or entity, or guaranty by Mesirow
Asset Management or the Partnership of any loan or other obligation;
(g) mortgage, pledge or other encumbrance of any of the assets of
the Partnership;
(h) waiver or release of any material right or claim of Mesirow
Asset Management with respect to the Institutional Business or of the
Partnership;
(i) any purchase, sale or other disposition of any of the properties
or assets of the Institutional Business or the Partnership other than in the
ordinary course of business;
(j) any other transaction entered into by Mesirow Asset Management
or the Partnership other than in the ordinary course of business; or
(k) agreement by any of the Mesirow Entities to do, or agreement to
cause the Partnership to do, any of the things described in the preceding
clauses (a)-(j), except as otherwise specifically contemplated hereby.
2.18 Tax Matters. Mesirow Asset Management has (a) paid, or caused to be
paid, all material federal, state, county, local, foreign, and other taxes, and
all deficiencies, or other additions to tax, interest, fines and penalties
(collectively, "Taxes") owed and required to be paid by it (other than current
taxes the liability for which is adequately provided in the Company Financial
Statements), and (b) in accordance with applicable law, filed all federal,
state, county, local and foreign tax returns which are 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. No taxing authority is now asserting
or, to the best knowledge of the Mesirow Entities, threatening to assert against
Mesirow Asset Management or the Partnership, any deficiency or claim for
additional Taxes.
2.19 Certain Transactions. Other than as contemplated by this Agreement
(or any Schedule or Exhibit hereto), none of the officers, directors,
stockholders, partners or employees of any Mesirow Entity is presently a party
to any material transaction with respect to the Institutional Business or the
clients of the Institutional Business listed on Schedule 2.6(b), including,
without limitation, any material contract, agreement or other material
arrangement providing for the furnishing of services to or by or otherwise
requiring payments to or from, any such officer, director, stockholder, partner
or employee, any member of a family of any such officer, director or
stockholder, or any corporation, partnership, trust or other entity in which any
such officer, director, stockholder, partner or employee has an interest or is
an officer, director, stockholder, trustee or partner.
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2.20 Employee Benefit Plans.
(a) The Partnership has never maintained any Employee Plan (as
defined in paragraph (d) below). Each Employee Plan which Mesirow Asset
Management maintains (or has maintained) or which is or was maintained by any
other member of the Controlled Group (as defined in paragraph (d) below) (the
"Plans") which is (or was) intended to be qualified under Section 401(a) of the
Code, has in fact been so qualified from its effective date through and
including the Closing Date (or such Plan's termination date, if earlier). No
event or omission has occurred which would cause any such Plan to lose its
qualification under Section 401(a) of the Code or its related trust to lose its
exemption under Section 501(a) of the Code.
(b) Neither Mesirow Asset Management nor any other member of the
Controlled Group has ever maintained, or had an obligation to contribute to, a
Multiemployer Plan (as defined in Section 4001(a)(13) of ERISA) or a plan
subject to Title IV of ERISA. None of the Plans has ever promised or provided
health care or other non-pension benefits to former employees (other than
benefits required to be provided by Part 6 of Subtitle B of Title I of ERISA).
(c) With respect to each Plan, there has been no "prohibited
transaction", as such term is defined in Section 406 of ERISA and Section 4975
of the Code, which could result in any material tax, penalty or liability of
Mesirow Asset Management. All of the Plans have complied in all material
respects with the requirements prescribed by any and all applicable statutes,
orders or governmental rules or regulations in effect with respect thereto. Each
member of the Controlled Group has performed all material obligations required
to be performed by it under, and is not in any material respect in default under
or in violation of, and none of the Mesirow Entities has any knowledge of any
material default or violation by any other party with respect to, any such Plan.
There are no material actions, suits or claims pending (other than routine
claims for benefits) or, to the best knowledge of each Mesirow Entity
threatened, with respect to any of the Plans. Each member of the Controlled
Group has made all payments due from it to date under or with respect to each
Plan, and all amounts properly accrued to date as liabilities of Mesirow Asset
Management under or with respect to each Plan for the current plan years have
been recorded on the books of Mesirow Asset Management.
(d) For the purposes of this Section, (i) the term "Employee Plan"
or "Plan" includes any employee benefit plan as defined in Section 3(3) of
ERISA, and any bonus, stock option, or other benefit plan or arrangement,
whether or not subject to ERISA, but shall not include any such plan or
arrangement which is, or is similar to, a payroll practice as defined in 29 CFR
Section 2510.3-1(b), and (ii) "Controlled Group" means each Mesirow Entity, and
all the entities within the same "controlled group" as Mesirow Asset Management
within the meaning of Section 302(d)(8)(C) of ERISA.
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(e) To the best knowledge of each Mesirow Entity, there is no matter
pending (other than routine qualification determination filings) with respect to
any of the Plans before the IRS, the PBGC or the Department of Labor.
(f) With respect to any employee benefit plan within the meaning of
Section 3(3) of ERISA which is sponsored, maintained or contributed to, or has
been sponsored, maintained or contributed to by any member of the Controlled
Group, (i) no accumulated funding deficiency, whether or not waived, within the
meaning of Section 302 of ERISA or Section 412 of the Code has been incurred,
and (ii) all contributions (including installments) to such plan required by
Section 302 of ERISA and Section 412 of the Code have been timely made.
2.21 Managers' Health. To the knowledge of the Mesirow Entities (based
solely on each such person's actual knowledge, excluding knowledge obtained from
health or insurance records of any Mesirow Entity with respect to any Manager to
the extent that such records are subject to legal protection or privilege for
the benefit of any Manager), each Manager is in good health.
2.22 Brokerage. None of the Mesirow Entities has incurred any obligation
for a brokerage commission or finders fee in connection with the transaction
contemplated hereby.
2.23 Mesirow Growth Fund.
(a) Compliance with Laws; Legal Proceedings. Mesirow Growth Fund is
in compliance in all material respects with (i) all applicable laws, rules and
regulations, including, without limitation, the Investment Company Act, the
Advisers Act, the Securities Act, the Exchange Act and all applicable state
securities laws and (ii) the investment policies and restrictions set forth in
all offering materials used in connection with the offer or sale of its Units or
interests and with its Agreement of Limited Partnership. There are no legal or
governmental actions, investigations, inquiries or proceedings before any court,
arbitrator or federal, state, local or foreign governmental or regulatory agency
or authority or self-regulatory authority, pending or threatened against Mesirow
Growth Fund or affecting its properties or assets.
(b) Termination. The termination and liquidation of Mesirow Growth
Fund, as described in Section 6.13, and the execution of the transactions
contemplated in connection with such termination and liquidation, does not and
will not: (a) violate any provision of the partnership agreement of Mesirow
Growth Fund, (b) violate or result in a violation of, or constitute a default
under, any provision of any law, regulation or rule, or any order of, or any
restriction imposed by, any court or other governmental agency, authority or
entity (including without limitation Section 17 of the Investment Company Act
and the rules promulgated thereunder); and (c) require Mesirow Growth Fund to
obtain any approval, consent of waiver of, or make any filing with, any person
or entity that has not been obtained or made.
2.24 The Skyline Funds.
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(a) Registration and Regulation of the Trust. The Skyline Trust is
duly registered with the SEC as an investment company under the Investment
Company Act and all shares of each Skyline Fund which have been or are being
offered for sale have been duly registered under the Securities Act and have
been duly registered, qualified or are exempt from registration or qualification
under the securities laws of each state or other jurisdiction in which such
shares have been or are being offered for sale; and no action has been taken by
the Skyline Trust to revoke or rescind any such registration or qualification.
The Skyline Trust and each of the Skyline Funds are in compliance in all
material respects with all applicable laws, rules and regulations, including,
without limitation, the Investment Company Act, the Advisers Act, the Securities
Act, the Exchange Act, the Commodity Exchange Act, the Code and all applicable
state securities laws. The Skyline Trust and each of the Skyline Funds are in
compliance in all material respects with the investment policies and
restrictions set forth in the Skyline Trust's registration statement currently
in effect and the value of each Skyline Fund's net assets is determined using
portfolio valuation methods that comply in all material respects with the
requirements of the Investment Company Act and the terms of the Skyline Trust's
registration statement. There are no legal or governmental actions,
investigations, inquiries or proceedings pending or threatened against the
Skyline Trust or any of the Skyline Funds which would question the right, power
or capacity of Mesirow Asset Management or the Partnership to act as manager or
investment adviser to the Skyline Trust or any of the Skyline Funds contemplated
hereby.
(b) Organization and Standing. The Skyline Trust is a Massachusetts
business trust duly formed, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts. The Skyline Trust has the requisite power
and authority to own all of its properties and asset and to issue its shares of
beneficial interest.
(c) Financial Statements. The books of account and related records
of the Skyline Trust fairly reflect in reasonable detail its assets, liabilities
and transactions in accordance with generally accepted accounting principles
applied on a consistent basis. The audited financial statements of each Skyline
Fund for fiscal years ended December 31, 1994, 1993 and 1992 and the unaudited
financial statements of each Skyline Fund for the quarter ended March 31, 1995
previously delivered to the AMG (the "Skyline Trust's Financial Statements")
present fairly in all material respects the financial position of each Skyline
Fund in accordance with generally accepted accounting principles applied on a
consistent basis as at the dates indicated and the results of operations and
cash flows for the periods then ended (subject, in the case of unaudited
financial statements, to the inclusion of notes and to customary year-end
adjustments which are not expected to be material). The audited financial
statements have been certified by the Skyline Trust's accountants, an
independent accounting firm.
(d) No Material Adverse Changes. Since December 31, 1994, no
material adverse change has occurred in the financial condition, results of
operations, business, assets or liabilities of the Skyline Trust or the status
of any Skyline Fund as a regulated investment company under the Code, other than
changes resulting from any change in general conditions in the
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financial or securities markets or the performance of any investments made by a
Skyline Fund and other than changes occurring in the ordinary course of business
of each Skyline Fund.
(e) Contracts. Except for contracts and agreements set forth on
Schedule 2.24(e), full and complete copies of which have been provided to AMG,
the Skyline Trust (including each Skyline Fund) is not a party to or subject to
any contract with any of the Mesirow Entities or any of their respective
Affiliates or any material contract, debt instrument, plan, lease, franchise,
license or permit (other than permits issued under any state securities law) of
any kind or nature whatsoever. No material default exists under any of the
contracts and agreements listed on Schedule 2.24(e).
(f) Taxes. All Tax returns required to be filed by the Skyline Trust
or the Skyline Funds on or prior to the Closing Date have been or will be timely
filed and such returns are correct in all material respects, and all Taxes shown
as payable on such returns have been or will be timely paid. For any period for
which Federal Tax returns of the Skyline Trust or the Skyline Funds are not
required to have been filed in accordance with the previous sentence by the
Closing Date, the Skyline Trust or the appropriate Skyline Fund has made, or
will make by the Closing Date, an adequate accrual on its books of any Federal
Taxes due or to become due, if any, as a result of actions occurring on or
before the Closing Date. Except as described on Schedule 2.24(f), (i) each
Skyline Fund has qualified as a regulated investment company under the Code in
respect of each taxable year of such Skyline Fund since commencement of its
operations, (ii) as of March 31, 1995, each Skyline Fund was in compliance with
the applicable requirements for qualification as a regulated investment company
under Section 851 of Sub-chapter M of the Code and (iii) each Skyline Fund has
paid any Taxes, including without limitation any excise taxes, it was required
to pay.
(g) Books. The books and records of the Skyline Trust reflecting,
among other things, the purchase and sale of shares of the Skyline Trust by
shareholders of the Skyline Trust, the number of issued and outstanding shares
owned by each shareholder and the state or other jurisdiction in which such
shares were offered and sold, are complete and accurate in all material
respects.
(h) Registration Statement. The registration statement of the
Skyline Trust, a copy of which has been previously furnished to AMG, did not
contain as of the date of filing and of each amendment thereto any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances in which they were made and the current prospectus
and statement of additional information for the Skyline Funds, copies of which
have been previously furnished to AMG, as supplemented by any supplement thereto
dated on or prior to the Closing Date, do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statement therein not misleading.
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(i) Ability to Conduct the Business. The Skyline Trust is not
subject to, or bound by, any judgment, order, writ, injunction or decree of any
court, or of any governmental body, including the SEC, or of any arbitrator,
that, after the Closing Date, would prevent the conduct of business material to
the Skyline Trust in accordance with current practice or have a Material Adverse
Effect on any Skyline Fund.
(j) Litigation or Proceeding. No litigation, investigation, inquiry
or governmental proceeding is pending or, to the best knowledge of the Mesirow
Entities, threatened against or affecting the Skyline Trust or the properties,
assets or business of the Skyline Trust before any court, arbitrator or federal,
state, local or foreign governmental or regulatory agency or authority or
self-regulatory authority (including, but not limited to, the SEC, the
Commodities Futures Trading Commission, the National Association of Securities
Dealers and the Internal Revenue Service) that would be reasonably likely to
have a Material Adverse Effect on any Skyline Fund or delay, hinder or prohibit
the solicitation of proxies from shareholders of the Skyline Trust in the manner
contemplated hereby, or the execution or delivery of the New Fund Contracts by
the Skyline Trust.
(k) Absence of Undisclosed Liabilities. As of the date of this
Agreement, the Skyline Trust has no material debts, obligations or liabilities,
whether due or to become due, absolute, contingent or otherwise, that are
required to be reflected in the Skyline Trust's Financial Statements in
accordance with generally accepted accounting principles, that are not so
reflected, except for debts, obligations or liabilities incurred in the ordinary
course of business since December 31, 1994 or that would not be material.
(l) No Pending Transaction. The Skyline Trust is not a party to or
bound by any agreement, undertaking or commitment (i) to merge or consolidate
with, or acquire all or substantially all of the property and assets of, any
other corporation, trust or person, or (ii) to sell, lease or exchange all or
substantially all of its property and assets to any other corporation, trust or
Person.
(m) Insurance. Attached hereto as Schedule 2.24(m) is a complete and
correct list of all policies of insurance of which the Skyline Trust is the
owner, insured or beneficiary, or covering any of its property, indicating for
each policy the carrier, risks insured, the amounts of coverage, deductible,
premium rate, expiration date and any pending claims thereunder, as of the date
of this Agreement. All such policies are outstanding and in full force and
effect, to the time of Closing, and may either terminate or continue thereafter,
as the case may be. (Mesirow Asset Management shall notify AMG no less than
forty-five (45) days prior to Closing of any intended termination to occur at
the time of Closing.) There is no default with respect to any provision
contained in any such policy, nor has there been any failure to give any notice
or present any claim under such policy in a timely fashion or in the manner or
detail required by the policy, which default or failure, individually or in the
aggregate, could reasonably be expected to affect adversely to a material extent
the ability of the Partnership or the Skyline Trust to recover on a claim under
any such policy. No notice of cancellation or non-renewal with respect to, or
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disallowance of any claim by or on behalf of the Skyline Trust under, any such
policy has been received by any Mesirow Entity, the Skyline Trust or any Skyline
Fund, within the five years preceding the date of this Agreement.
2.25 Material Information. None of the written information or
documentation furnished by any Mesirow Entity to AMG or any of its
representatives contained or contains any untrue statement of a material fact,
nor does it omit to state a material fact necessary to make the statements or
facts contained herein or therein, taken as a whole, not misleading in light of
the circumstances in which they were made. There have been no events or
transactions or information (other than changes in general economic and market
conditions) which has come to the attention of any Mesirow Entity which could
reasonably be expected to materially and adversely affect the business,
prospects, operations, affairs, conditions or assets of the Partnership or of
Mesirow Asset Management with respect to the Institutional Business, which has
not been set forth in this Agreement or in an Exhibit or Schedule hereto.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF AMG
AMG represents and warrants to each of Mesirow Asset Management, Mesirow
Holdings, each Manager and each Management Corporation that:
3.1 Organization. It is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
3.2 Authority. AMG has all requisite corporate power and authority to (a)
own its assets and to conduct its business, and possess all Licenses necessary
to conduct its business as presently carried on, and (b) execute, deliver and
perform this Agreement, the other Transaction Documents and each of the other
agreements, documents and instruments to be executed, delivered and performed by
it in connection with this Agreement and the transactions contemplated herein
and therein. This Agreement, each other Transaction Document, and each other
agreement, document and instrument to be executed, delivered and performed by
AMG in connection with the transactions contemplated herein and therein have
been duly and validly approved by all necessary action of AMG, and this
Agreement, each of the other Transaction Documents and each of such other
agreements, documents and instruments to which it is a party represents, or when
executed will represent, the valid and legally binding obligation of AMG,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights.
3.3 Non-Contravention. The execution, delivery and performance of this
Agreement, each other Transaction Document and each other agreement, document
and instrument to be executed, delivered and performed by AMG in connection with
the transactions contemplated hereby and thereby does not and will not: (a)
violate any provision of the charter or by-laws of AMG; (b) violate, conflict
with, result in a default under, accelerate any obligation under or give
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rise to a right of termination of any indenture or loan or credit agreement or
any other contract, agreement, instrument, mortgage, lien, lease, permit, writ,
order, judgment, authorization, injunction, decree, determination, arbitration
award or other obligation to which AMG is a party or by which it or its assets
are bound; (c) violate or result in a violation of, or constitute a default
under, any provision of any law, regulation or rule, or any order of, or any
restriction imposed by, any court or other governmental agency; (d) require AMG
to obtain any approval, consent or waiver of, or make any filing with, any
person or entity that has not been obtained or made except for approvals,
consents, waivers or filings, as applicable, which will have been received prior
to the Closing or at any earlier time required hereunder or under applicable
laws, rules and regulations.
3.4 Investment Representation.
(a) The Purchased Interest AMG acquires hereunder will be acquired
by it for its own account for investment and not with a view to or for sale in
connection with any distribution thereof or with any present intention of
selling or distributing all or any part thereof. AMG acknowledges that none of
the Purchased Interest has been registered under the Securities Act, or the
securities laws of any state or other jurisdiction, and cannot be disposed of
unless such Purchase Interest is registered under the Securities Act, and any
applicable state laws, or an exemption from such registration is available.
(b) AMG is sufficiently knowledgeable and experienced in the making
of investments of this type so as to be able to evaluate the risks and merits of
its investment and is able to bear the economic risk of its investment in the
Partnership. AMG acknowledges that interests in the Partnership are illiquid,
that no market for interests in the Partnership exists, and that none is
contemplated to be created.
3.5 Business. AMG is and has, since its inception, been engaged solely in
the business of investing in firms which provide investment management and
investment advisory services and activities reasonably related thereto.
3.6 Litigation and Compliance with Laws. There is no litigation or legal
or other action, suit, proceeding or, to AMG's best knowledge, investigation, at
law or in equity, or before any federal, state, municipal or other governmental
department, commission, board, agency or instrumentality, domestic or foreign,
in which AMG or any officer or director thereof is engaged, or, to the best
knowledge of AMG, with which any of them is threatened, in connection with the
business, affairs, properties or assets of AMG or which might call into question
the validity or hinder the enforceability or performance of this Agreement, or
of the other Transaction Documents or any of the other agreements and
transactions contemplated hereby and thereby. None of AMG nor any of its
officers or directors is engaged in any litigation or legal or other actions,
suits, proceedings or, to AMG's best knowledge, investigations, at law or in
equity, or before any federal, state, municipal or other governmental
department, commission, board, agency or instrumentality, domestic or foreign
(including, without limitation, any voluntary or involuntary
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proceedings under the Bankruptcy Code), in each case in connection with the
business, affairs, properties or assets of AMG. AMG is, and at all times has
been, in material compliance with all laws and governmental rules and
regulations, domestic or foreign, including, without limitation, all federal or
state securities laws applicable to the business, affairs, properties or assets
of AMG, except where non-compliance therewith, in any individual instance or any
series of related instances, would not have a Material Adverse Effect on AMG.
None of AMG nor any officer or director thereof, is in material default with
respect to any judgment, order, writ, injunction, decree, demand or assessment
issued by any court or any federal, state, municipal or other governmental
agency, board, commission, bureau, instrumentality or department, domestic or
foreign, relating to any aspect of the business, affairs, properties or assets
of AMG. None of AMG nor any officer or director thereof, is charged or, to the
best knowledge of AMG, threatened with, or under investigation with respect to,
any material violation of any provision of federal, state, municipal or other
law or any administrative rule or regulation, domestic or foreign, affecting AMG
or the transactions contemplated hereby.
3.7 Broker Dealer. AMG is not a "broker" or "dealer" within the meaning of
the Exchange Act or any state securities laws.
3.8 Brokerage. AMG has not incurred any obligation for a brokerage
commission or finders fee in connection with the transactions contemplated
hereby.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF EACH MANAGER AND EACH MANAGEMENT
CORPORATION.
As a material inducement to AMG entering into this Agreement, Duttoncorp
and ▇▇▇▇▇▇ jointly and severally make the following representations with respect
to Duttoncorp and ▇▇▇▇▇▇, Kailincorp and Kailin jointly and severally make the
following representations with respect to Kailincorp and Kailin, Lutzcorp and
▇▇▇▇ jointly and severally make the following representations with respect to
Lutzcorp and ▇▇▇▇ and Maloneycorp and ▇▇▇▇▇▇▇ jointly and severally make the
following representations with respect to Maloneycorp and ▇▇▇▇▇▇▇.
4.1 Individual Power and Authority. Such Manager has full right, power and
authority to execute, deliver and perform this Agreement, the other Transaction
Documents and each of the other agreements, documents and instruments to be
executed, delivered and performed by him in connection with this Agreement and
the transactions contemplated herein and therein. This Agreement, each of the
other Transaction Documents, and each other agreement, document and instrument
to be executed, delivered and performed by such Manager in connection with the
transactions contemplated herein and therein represents, or when executed will
represent, the valid and legally binding obligation of such Manager, enforceable
in accordance with its terms, subject to applicable, bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights.
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4.2 Corporate Organization and Authority. Each Management Corporation is a
corporation duly organized, legally existing and in good standing under the laws
of the State of Delaware. Each Management Corporation is duly authorized to
conduct its business and is in good standing 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 failures to be so authorized
or be in good standing that would not in the aggregate have a Material Adverse
Effect on its business or the ownership or leasing of its properties. Each
Management Corporation has all requisite corporate power and authority to (a)
own its assets and conduct its business and possess all Licenses necessary to
conduct its business as presently carried on by it and as contemplated to be
carried on by it after the Closing hereunder and the closing of the transactions
contemplated hereby, and (b) execute, deliver and perform this Agreement, the
other Transaction Documents to which such Management Corporation is a party and
the transactions contemplated herein and therein. This Agreement, each other
Transaction Document to which such Management Corporation is a party and each
other agreement, document and instrument to be executed, delivered and performed
by such Management Corporation have been duly and validly approved by all
necessary action of such entity, and this Agreement and each of the other
Transaction Documents to which such Management Corporation is a party represents
or, when executed, will represent, the valid and legally binding obligation of
each Management Corporation, as applicable, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights.
4.3 Non-Contravention. The execution, delivery and performance of this
Agreement by such Manager and such Management Corporation, each other
Transaction Document and each other agreement, document and instrument to be
executed, delivered and performed by such Manager or such Management Corporation
in connection with the transactions contemplated hereby and thereby does not and
will not: (a) violate any provision of the charter or by-laws of each Management
Corporation, as applicable; (b) violate, conflict with, result in a default
under, accelerate any obligation under or give rise to a right of termination of
any indenture or loan or credit agreement or any other contract, agreement,
instrument, mortgage, lien, lease, permit, writ, order, judgment, authorization,
injunction, decree, determination, arbitration award or other obligation to
which such Manager or Management Corporation is a party or by which he or it is
bound, or cause the creation of any encumbrance on his or its assets; (c)
violate or result in a violation of, or constitute a default under, any
provision of any law, regulation or rule, or any order of, or any restriction
imposed by, any court or other governmental agency; (d) require such Manager or
Management Corporation to obtain any approval, consent or waiver of, or make any
filing with, any person or entity that has not been obtained or made, which
approvals, consents, waivers or filings, as applicable, will have been received
prior to the Closing, or at any earlier time required hereunder or under
applicable laws, rules and regulations; or (e) except as provided by this
Agreement, result in the creation or imposition of any Claim on any of the
assets of the Partnership or any of the interests of the Manager (directly or
indirectly through any other Person), the Management Corporation or Mesirow
Asset Management in the Partnership.
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4.4 Capitalization.
(a) The duly authorized capital stock of Duttoncorp consists of
1,000 shares of Common Stock, $.01 par value per share, of which 100 shares are
issued and outstanding and held beneficially and of record by ▇▇▇▇▇▇. All the
outstanding shares of capital stock of Duttoncorp have been duly authorized and
validly issued and are fully paid and nonassessable. Except as contemplated by
this Agreement, there are no existing rights, agreements or commitments
obligating or which might obligate Duttoncorp to issue, transfer, sell or redeem
any securities.
(b) The duly authorized capital stock of Kailincorp consists of
1,000 shares of Common Stock, $.01 par value per share, of which 100 shares are
issued and outstanding and held beneficially and of record by Kailin. All the
outstanding shares of capital stock of Kailincorp have been duly authorized and
validly issued and are fully paid and nonassessable. Except as contemplated by
this Agreement, there are no existing rights, agreements or commitments
obligating or which might obligate Kailincorp to issue, transfer, sell or redeem
any securities.
(c) The duly authorized capital stock of Lutzcorp consists of 1,000
shares of Common Stock, $.01 par value per share, of which 100 shares are issued
and outstanding and held beneficially and of record by ▇▇▇▇. All the outstanding
shares of capital stock of Lutzcorp have been duly authorized and validly issued
and are fully paid and nonassessable. Except as contemplated by this Agreement,
there are no existing rights, agreements or commitments obligating or which
might obligate Lutzcorp to issue, transfer, sell or redeem any securities.
(d) The duly authorized capital stock of Maloneycorp consists of
1,000 shares of Common Stock, $.01 par value per share, of which 100 shares are
issued and outstanding and held beneficially and of record by ▇▇▇▇▇▇▇. All the
outstanding shares of capital stock of Maloneycorp have been duly authorized and
validly issued and are fully paid and nonassessable. Except as contemplated by
this Agreement, there are no existing rights, agreements or commitments
obligating or which might obligate Maloneycorp to issue, transfer, sell or
redeem any securities.
4.5 Litigation and Compliance with Laws. There is no litigation or
governmental or administrative action, suit, proceeding or investigation
(including, without limitation, any voluntary or involuntary proceeding under
the Bankruptcy Code or any action, suit, proceeding or investigation under any
federal or state securities law or regulation) pending or, to the best knowledge
of each Manager and each Management Corporation, threatened, before any federal,
state, municipal or other governmental department, commission, board, agency or
instrumentality, domestic or foreign, at law or in equity or otherwise, to which
any Manager or any Management Corporation or any officer, director or
stockholder thereof is a party, (i) which is related to the business, affairs,
properties or assets of any Management Corporation, Mesirow Asset Management or
the Partnership or (ii) which might call into question the validity or hinder
the enforceability or performance of this Agreement or the other Transaction
Documents or any of the contracts described on Schedule 2.8 hereto. Each of the
Managers and Management Corporations
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is, and at all times has been, in material compliance with all laws and
governmental rules and regulations, domestic or foreign, including, without
limitation, all federal or state securities laws applicable to the business,
affairs, properties or assets of each Management Corporation, Mesirow Asset
Management or the Partnership, except where non-compliance therewith, in any
individual instance or any series of related instances, would not have a
Material Adverse Effect on the Institutional Business, Mesirow Asset Management
or the Partnership. None of the Managers or Management Corporations (nor any
officer, director or stockholder thereof), is in material default with respect
to any judgment, order, writ, injunction, decree, demand or assessment issued by
any court or any federal, state, municipal or other governmental agency, board,
commission, bureau, instrumentality or department, domestic or foreign, relating
to any aspect of the business, affairs, properties or assets of any of the
Management Corporations, the Institutional Business, Mesirow Asset Management or
the Partnership. None of the Managers, nor to the best knowledge of the
Managers, any other Person, has violated the Code of Ethics of the Skyline
Trust, Mesirow Asset Management or Mesirow Financial described in Section 2.15
hereof.
4.6 Brokerage. None of the Management Corporations or Managers has
incurred any obligation for a brokerage commission or finders fee in connection
with the transactions contemplated hereby.
4.7 Investment Advisory Representation. Except for advice given to members
of such Manager's immediate family, such Manager does not provide investment
advisory or investment management services to any person or entity, other than
on behalf of Mesirow Asset Management, pursuant to an investment advisory
agreement between Mesirow Asset Management and a client (including for these
purposes a client that is a registered or private investment company).
4.8 Good Health. To his knowledge, such Manager is in good health.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT CORPORATIONS.
As a material inducement to AMG entering into this Agreement, the
Management Corporations, jointly and severally, make the following
representations to AMG.
5.1 Assets Under Management. The aggregate assets under management in the
Institutional Business as of December 31, 1994 and March 31, 1995, are
accurately described on Schedule 2.8 hereto. In addition, set forth on Schedule
2.8 is a list as of March 31, 1995, of all investment management, advisory or
sub-advisory contracts constituting the Institutional Business, 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 and each
guideline, exhibit, schedule or letter agreement in connection therewith. Since
December 31, 1994, except as is set forth on Schedule 2.8 hereto, no client of
the Institutional Business has given any indication of its intent to terminate
or reduce its investment relationship with Mesirow Asset Management or, after
the Asset Transfers and the Closing, the Partnership, or adjust the Fee Schedule
with respect to
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any contract in a manner which would reduce the fee to Mesirow Asset Management
or the Partnership, as applicable.
5.2 Ordinary Course of Business. Since March 31, 1995, the Institutional
Business has been operated in the normal, usual and customary manner in the
ordinary and regular course of business, consistent in all material respects
with prior practice.
5.3 Litigation and Compliance with Laws. To the best knowledge of the
Management Corporations and the Managers, there is no litigation or governmental
or other administrative action, suit, proceeding or investigation (including,
without limitation, any voluntary or involuntary proceeding under the Bankruptcy
Code or any action, suit, proceeding or investigation under any federal or state
securities law or regulation) pending or threatened, to which Mesirow Asset
Management or the Partnership or any officer, director, stockholder or partner
thereof is a party before any federal, state, municipal or other governmental
department, commission, board, agency or instrumentality, domestic or foreign,
at law or in equity or otherwise, (i) which is related to the business, affairs,
properties or assets of the Institutional Business or the Partnership or (ii)
which might call into question the validity or hinder the enforceability or
performance of this Agreement or the other Transaction Documents or any of the
transactions contemplated hereby and thereby. To the best knowledge of the
Management Corporations and the Managers, there are no proceedings pending or
threatened, relating to the termination of, or limitation of, any License held
by Mesirow Asset Management or the Partnership, including, without limitation,
the registrations as investment advisers of Mesirow Asset Management and the
Partnership under the Advisers Act, or any similar statute or regulation of any
other jurisdiction. To the best knowledge of the Management Corporations and the
Managers, Mesirow Asset Management is, and at all times has been, in material
compliance with all laws and governmental rules and regulations, domestic or
foreign, including, without limitation, all federal or state securities laws
applicable to the Institutional Business or the Partnership.
SECTION 6. CONDITIONS PRECEDENT TO AMG'S OBLIGATION.
The obligation of AMG to purchase and accept transfer and delivery of the
Purchased Interest is subject to the satisfaction on or, where appropriate,
prior to the Closing Date, of the following conditions, except to the extent
that any such condition may have been waived in writing by AMG on or prior to
the Closing Date:
6.1 Litigation; No Opposition. No judgment, injunction, order or decree
enjoining or prohibiting any of AMG, Mesirow Asset Management, Mesirow Holdings,
the Partnership, any of the Management Corporations or any of the Managers or
other parties to any of the Transaction Documents, from consummating the
transactions contemplated hereby or thereby shall have been entered and no suit,
action or proceeding shall be pending or threatened at any time prior to or on
the Closing Date 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
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or any of the Transaction Documents, or the consummation of the transactions
contemplated hereby or thereby or which could be expected to have a Material
Adverse Effect on AMG, Mesirow Asset Management or the Partnership.
6.2 Representations, Warranties and Covenants. Each of the representations
and warranties of Mesirow Asset Management, Mesirow Holdings, the Partnership,
each of the Management Corporations, and each of the Managers contained in this
Agreement and in any schedule or exhibit attached hereto (including any
supplement to any such schedule or exhibit) and in each other Transaction
Document and each other agreement, document and instrument to be executed,
delivered and performed by AMG in connection with the transactions contemplated
herein and therein or otherwise made in writing by any of them or on their
behalf shall be true and correct (a) at and as of the date of this Agreement,
(b) at and as of the Asset Transfers as though newly made at such time, and (c)
at and as of the Closing as though newly made at such time, except that the
Company Financial Statements must continue to be true only as of the respective
dates covered thereby. Each and all of the agreements and conditions to be
performed or satisfied by Mesirow Asset Management, Mesirow Holdings, the
Partnership, each of the Management Corporations and each of the Managers
hereunder and under the other Transaction Documents and each other agreement,
document and instrument to be executed, delivered and performed by AMG in
connection with the transactions contemplated herein and therein at or prior to
the Closing shall have been duly performed or satisfied; and Mesirow Asset
Management, Mesirow Holdings, the Partnership, each of the Management
Corporations and each of the Managers shall have furnished AMG with a
certificate or certificates dated as of the Closing Date with respect to each of
the foregoing.
6.3 Advisory Contract Consents.
(a) Mesirow Asset Management and the Partnership (i) shall have, at
least sixty (60) days in advance of the Closing Date, requested the consent from
the clients of the Institutional Business to the transactions contemplated
hereby in the manner set forth in Section 8.2, and, (ii) except as otherwise
agreed in writing by AMG, shall have obtained from each registered investment
company for which Mesirow Asset Management serves as a subadviser (with the
approval by the trustees (including a majority of the independent trustees) and
the shareholders of each such company) new investment advisory contracts
effective as of the Closing that are Comparable Contracts;
(b) the Partnership shall have obtained from each Skyline Fund (with
the approval by the trustees (including a majority of the independent trustees)
and the shareholders of each Skyline Fund) new investment advisory contracts
effective as of the Closing that are Comparable Contracts;
(c) clients of Mesirow Asset Management (including the Skyline
Funds) which are party to advisory agreements that provide for Aggregate
Contract Payments constituting at least seventy-five percent (75%) of the Base
Fees shall have affirmatively consented in writing to
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the transactions contemplated hereby (by countersigning a notice substantially
in the form of Exhibit 8.1(a) or Exhibit 8.1(b) such that the advisory contracts
(or Comparable Contracts as provided above with respect to registered investment
companies) in effect as of the date of this Agreement survive the transactions
contemplated hereby without impermissible assignment; and
(d) at the Closing, Mesirow Asset Management, Mesirow Holdings, each
Management Corporation and each Manager shall deliver a certificate certifying
as to compliance with the foregoing.
6.4 Registration as an Investment Adviser. Mesirow Asset Management and
the Managers shall have caused the Partnership to become registered as an
investment adviser under the Advisers Act and the rules and regulations
promulgated thereunder in all jurisdictions in which Mesirow Asset Management is
registered in connection with the Institutional Business on the date of this
Agreement and in each other jurisdiction where it is desirable for the
Partnership to be registered as an investment adviser in order to conduct after
the Asset Transfers and Closing the Institutional Business presently conducted
by Mesirow Asset Management.
6.5 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 the Partnership shall be able to carry on the
Institutional Business after the Closing Date substantially in the manner now
conducted by Mesirow Asset Management, shall have been taken, made or obtained,
and any and all other material permits, approvals, consents or other action
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.
6.6 Asset Transfer. (a) The transactions contemplated by the Asset
Transfer Agreement in the form attached hereto as Exhibit 6.6 shall have
occurred and at least one (1) full business day shall have elapsed from such
occurrence, (b) such other documents and instruments of transfer as AMG shall
reasonably deem necessary shall have been executed and delivered, and (c) the
Partnership's capitalization, including Partnership Points and options and other
rights to purchase Partnership Points, and the Capital Accounts in the
Partnership shall be as set forth on Schedule 6.6 hereto.
6.7 Non Solicitation/Non Disclosure Agreements. Each Manager and each
Management Corporation shall have entered into a Non Solicitation/Non Disclosure
Agreement with the Partnership (each a "Non Solicitation Agreement") in the form
attached hereto as Exhibit 6.7, and each such Non Solicitation Agreement shall
be in full force and effect.
6.8 Working Capital and Tangible Net Worth of the Partnership. After the
Asset Transfers, and at the Closing, and after taking into account all
transaction costs which are assumed or to be assumed by the Partnership, the
Partnership shall have a tangible net worth (determined
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in accordance with generally accepted accounting principles using the accrual
based method of accounting, consistently applied) of at least $600,000 and at
least $200,000 of working capital (defined as current assets less current
liabilities). The Partnership shall also have all of the assets and cash
necessary for the operation of the Institutional Business consistent with past
practices. After the Asset Transfers and immediately prior to the Closing, the
adjusted tax basis of the assets of the Partnership consisting of office
furniture and computer equipment and other equipment as agreed to by AMG shall
be at least $400,000.
6.9 Delivery. Each Mesirow Entity, the Partnership, each Management
Corporation and each Manager shall have executed (where applicable) and
delivered to AMG (or shall have caused to be executed and delivered to AMG by
the appropriate person) the following:
(a) the Asset Transfer Agreement and all such other documents of
transfer and assignment as AMG may reasonably require;
(b) certified copies of resolutions of the board of directors or
trustees (and, if necessary, the shareholders or partners) of the Mesirow
Entities, each Management Corporation and the Skyline Funds, authorizing the
execution and delivery of each of the Transaction Documents to which such Person
is a party and approving all other actions required to be taken or approved in
connection with this Agreement and the other Transaction Documents and the
transactions contemplated herein and therein;
(c) a copy of the charter and by-laws of Mesirow Asset Management
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 Agreement and Declaration of Trust and by-laws of
the Skyline Trust which, in the case of the Agreement and Declaration of Trust,
is certified as of a recent date by the Secretary of State of the Commonwealth
of Massachusetts;
(e) a certificate issued by the appropriate Secretary of State
certifying that Mesirow Asset Management, Mesirow Financial, Mesirow Holdings,
the Partnership, each Management Corporation and the Skyline Trust is validly
existing and in good standing in such state as of the most recent practicable
date;
(f) a certificate issued by the appropriate Secretary of State of
each state in which each of Mesirow Asset Management and, after giving effect to
the Asset Transfers, the Partnership does business certifying that Mesirow Asset
Management and the Partnership, as applicable, are in good standing in such
state as of the most recent practicable date;
(g) true and correct copies of each of the Transaction Documents,
and all agreements, documents, instruments and certificates delivered or to be
delivered in connection therewith;
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(h) for each of the Managers evidence that such Person has had a
physical examination within ninety (90) 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;
(i) a certificate of the Secretary of Mesirow Asset Management,
Mesirow Financial, Mesirow Holdings, and each of the Management Corporations and
the Skyline Trust, certifying that its respective resolutions, charter and
by-laws described in paragraphs (b) and (c) above are in full force and effect
and have not been amended or modified, and that the officers of such corporation
are those persons named in the certificate;
(j) an opinion from ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel to Mesirow Asset
Management, Mesirow Holdings and the Partnership, in form and substance
materially consistent with Exhibit 6.9(k);
(k) an opinion from ▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, counsel to the Skyline
Trust, in form and substance materially consistent with Exhibit 6.9(l);
(l) a Trademark, Tradename and Service ▇▇▇▇ Assignment, in form and
substance materially consistent with Exhibit 6.9(m);
(m) all records of the Skyline Trust that are customarily maintained
by the Skyline Trust's investment adviser or are required to be maintained by
the adviser under Section 31 of the Investment Company Act and regulations
promulgated thereunder, together with all records customarily maintained on
behalf of the Skyline Trust by its distributor;
(n) complete copies, and access upon the request of the Partnership
to the originals, of all records of the Institutional Business that are
customarily maintained by Mesirow Asset Management or are required to be
maintained under the Advisers Act and regulations promulgated thereunder; and
(o) such other certificates and other documents as ▇▇▇▇▇▇▇, Procter
& ▇▇▇▇ as counsel to AMG may reasonably request in connection with the
transactions contemplated herein and in the other Transaction Documents.
6.10 Code of Ethics, etc. The Partnership shall have adopted such Code of
Ethics, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Policies, Trade Allocation Policies and Supervisory
Procedures Manuals as are acceptable to AMG.
6.11 Resignations. Mesirow Asset Management shall have delivered or caused
to be delivered to AMG the resignations, to be effective upon the Closing, of
all officers of the Skyline Trust who are not the Managers and of all trustees
of the Skyline Trust except ▇▇▇▇▇▇.
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6.12 Elections. Persons acceptable to AMG and the Managers shall have been
duly elected as trustees of the Skyline Trust.
6.13 Termination of Mesirow Growth Fund. At or prior to the Closing,
Mesirow Growth Fund shall have been terminated and all liquidating payments or
similar distributions shall have been made to the limited partners therein, all
in accordance with the terms and provisions of the Mesirow Growth Fund Amended
and Restated Agreement of Limited Partnership dated as of May 5, 1992 and in
accordance with applicable law.
6.14 New Fund Contracts. The Skyline Trust shall have entered into
arrangements satisfactory to AMG with (a) one or more money market mutual
fund(s) to and from which shares of the Skyline Trust may be exchanged and, (b)
if so requested by AMG, a third party distributor, and in connection therewith
the Skyline Trust and the Mesirow Entities shall have given all notices to
shareholders of the Skyline Trust as may be required by applicable law or
regulation and within any required time periods. The agreements described in the
foregoing sentence, together with the advisory agreements described in Section
6.3(b) and any administrative or similar contracts and any plans in connection
therewith that may be determined by AMG to be necessary or appropriate for the
Skyline Trust, shall all have received any approvals of shareholders, trustees
and independent trustees of the Skyline Trust or the Skyline Funds as may be
necessary or appropriate and shall be referred to herein as the "New Fund
Contracts."
6.15 Termination of Existing Advisory and Distribution Arrangements.
Except as contemplated in Section 8.13, all advisory agreements and distribution
arrangements between the Skyline Funds and Mesirow Holdings, Mesirow Asset
Management and any of their Affiliates, shall have been terminated effective as
of the Closing, or in the case of the investment advisory agreement between
Mesirow Asset Management and each of the Skyline Funds, upon effectiveness of
the corresponding agreement with the Partnership as contemplated by Section
6.3(b).
6.16 Termination of Covenant Concerning Confidential Information. At or
prior to the Closing, Mesirow Asset Management shall have delivered to AMG
evidence that (i) each of the agreements listed on Schedule 2.10(c) hereto has
terminated on terms acceptable to AMG and its counsel, and (ii) except as
otherwise consented to by AMG (which consent shall not be unreasonably
withheld), each of such employees from and after the termination of such
agreement shall have no liability or obligation whatsoever under such agreement
to Mesirow Financial or any of its Affiliates.
SECTION 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF MESIROW ASSET MANAGEMENT
AND MESIROW HOLDINGS
The obligations of Mesirow Asset Management to sell and deliver the
Purchased Interest, and of Mesirow Holdings to cause such sale and delivery, to
AMG are subject to the satisfaction at or prior to the Closing Date of the
following conditions, except to the extent that any such
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condition may have been waived in writing by Mesirow Asset Management prior to
the Closing Date.
7.1 No Litigation; No Opposition. No judgment, injunction, order or decree
enjoining or prohibiting any of AMG, any Mesirow Entity, any Management
Corporation or any Manager or other parties to any of the Transaction Documents,
from consummating the transactions contemplated hereby or thereby shall have
been entered and no suit, action or proceeding shall be pending or threatened
prior to or on the Closing Date before or by any court or governmental body
seeking to restrain or prohibit the execution and delivery of this Agreement or
any of the Transaction Documents or the consummation of the transactions
contemplated hereby or thereby.
7.2 Representations, Warranties and Covenants. Each of the representations
and warranties of AMG contained in this Agreement and in any schedule or exhibit
attached hereto (including any supplement to any such schedule or exhibit) and
in each other Transaction Document or otherwise made in writing by AMG or on its
behalf shall be true and correct 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 hereunder and under the other Transaction Documents at or prior
to the Closing Date shall have been duly performed or satisfied in all material
respects; and AMG shall have furnished Mesirow Asset Management and Mesirow
Holdings with a certificate dated as of the Closing Date to the foregoing
effect.
7.3 Delivery. AMG shall have executed and delivered to Mesirow Asset
Management and Mesirow Holdings, the following:
(a) certified copies of resolutions of the board of directors (and,
if necessary, the shareholders) of AMG authorizing the execution of this
Agreement and each of the other Transaction Documents to which AMG is a party;
(b) a copy of the charter and by-laws of AMG which, in the case of
the charter, 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 AMG is validly existing in Delaware as of the most
recent practicable date;
(d) true and correct copies of each of the Transaction Documents,
and all agreements, documents, instruments and certificates delivered or to be
delivered in connection therewith to which AMG is a party;
(e) a certificate of the Secretary of AMG certifying that the
resolutions, charter and by-laws in paragraphs (a) and (b) above are in full
force and effect and have not been amended or modified, and that the officers of
AMG are those persons named in the certificate; and
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(f) an opinion from ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ in form and substance
materially consistent with Exhibit 7.3(f).
7.4 Advisory Contract Consents. At the Closing, clients of Mesirow Asset
Management (including the Skyline Funds) which are party to advisory agreements
that provide for Aggregate Contract Payments constituting at least seventy-five
percent (75%) of the Base Fees shall have affirmatively consented in writing to
the transactions contemplated hereby (by countersigning a notice substantially
in the form of Exhibit 8.1(a) or Exhibit 8.1(b) such that the advisory contracts
(or Comparable Contracts as provided in Sections 6.3(a) and (b) hereof with
respect to registered investment companies) in effect as of the date of this
Agreement survive the transactions contemplated hereby without impermissible
assignment.
7.5 New Fund Distribution Arrangements. The Skyline Trust shall have
entered into arrangements satisfactory to the independent trustees of the
Skyline Trust with respect to the distribution of shares of the Skyline Trust.
SECTION 8. COVENANTS OF THE PARTIES.
From and after the date hereof (subject to Section 11.2 hereof), each of
the Partnership, Mesirow Asset Management and Mesirow Holdings, jointly and
severally, and each Management Corporation and each of the Managers, severally
but not jointly, agrees with AMG that it (or he) will perform the actions
contemplated to be performed by it (or him) under this Section 8, and AMG agrees
with each of the Partnership, Mesirow Asset Management, Mesirow Holdings, each
Management Corporation and each Manager that it will perform the actions
contemplated to be performed by it under this Section 8:
8.1 Client Consents.
(a) As soon as practicable after the date hereof, Mesirow Asset
Management shall notify all its clients (other than the Skyline Funds) of the
transactions contemplated hereby and by the other Transaction Documents. Such
notice shall be substantially in the form of Exhibit 8.1(a) hereto unless
otherwise agreed by Mesirow Asset Management and AMG with respect to a
particular client or group of clients.
(b) On or prior to June 30, 1995, Mesirow Asset Management shall
send to each client who received a notice in substantially the form of Exhibit
8.1(a) hereto, and who has not returned such notice, a notice in substantially
the form of Exhibit 8.1(b) hereto; unless otherwise agreed by Mesirow Asset
Management and AMG with respect to a particular client or group of clients.
(c) The parties hereto will cooperate and use all commercially
reasonable efforts to obtain, as soon as practicable, the written consent of
each client of Mesirow Asset Management (other than the Skyline Funds) to the
assignment of such client's investment advisory contract,
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where such client's investment advisory contract requires such written consent
for the transactions contemplated hereby.
(d) With respect to the Skyline Funds, subject in all cases to the
fiduciary duties to which it may be subject, Mesirow Holdings and Mesirow Asset
Management shall use all commercially reasonable efforts (including, without
limitation, the payment of reasonable printing, soliciting and similar expenses)
to cause each of the Skyline Funds to call a meeting of its shareholders to
consider, and to solicit its shareholders with regard to, the transactions
contemplated hereby, including the investment advisory agreement with the
Partnership contemplated under Section 6.3(b), the subsequent change in control
of the Partnership to occur at the Closing, the investment advisory agreement
contemplated to be in effect at and after the Closing and the election of
trustees as contemplated in Section 6.12, consistent with all of the
requirements of federal securities laws applicable to such solicitation.
8.2 Conduct of Business. Until the Closing, except as specifically
contemplated by this Agreement (or except with the prior written consent of
AMG):
(a) the business of each of Mesirow Asset Management and the
Partnership shall be conducted only in the ordinary course and in a manner
consistent in all material respects with past practices, and in compliance in
all material respects with all applicable laws, rules and regulations;
(b) the Mesirow Entities, the Management Corporations and the
Managers shall not make or assist in making any change in the charter documents
or by-laws of Mesirow Asset Management or in the Partnership Agreement of the
Partnership;
(c) the Partnership shall not (i) declare, set aside, make or pay
any distribution or dividend in respect of its equity interests, or direct or
indirect issuance, redemption, purchase or other acquisition of its own capital
stock or other equity interests, or (ii) make any change in its capitalization,
and none of the Mesirow Entities shall cause or permit any such event;
(d) neither Mesirow Asset Management nor the Partnership shall (i)
create, incur or assume any Indebtedness, (ii) make any loans, advances or
capital contributions to or investments in, any person or entity, (iii) make any
capital expenditure, or (iv) settle any litigation;
(e) neither Mesirow Asset Management nor the Partnership shall
acquire, sell, lease or dispose of any assets other than in the ordinary course
of business;
(f) neither Mesirow Asset Management nor the Partnership shall
mortgage, pledge or subject to any lien, lease, security interest or other
Claim, any properties or assets; and
(g) in each case, except in the ordinary course of business
consistent with past practices, (i) none of the Mesirow Entities or the
Partnership shall increase the rate of
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compensation payable or to become payable to any director, officer, employee or
agent currently employed by Mesirow Asset Management or the Partnership, and
(ii) neither Mesirow Asset Management nor the Partnership (nor Mesirow Holdings
to the extent it may affect Mesirow Asset Management or the Partnership) without
the prior written consent of AMG shall hire any directors, officers, employees
or agents, or enter into any collective bargaining agreement, bonus, stock
option, profit sharing, compensation, pension, welfare, retirement or other
similar arrangement, or any employment contract.
8.3 Preservation of Business and Assets. Until the Closing, each of
Mesirow Asset Management, Mesirow Holdings, the Partnership and each Manager
shall use all commercially reasonable efforts, consistent with past practices,
to: (a) preserve the current Institutional Business, (b) maintain the present
clients of the Institutional Business until the Asset Transfers, and thereafter
to maintain such clients as clients of the Partnership, in each case, on terms
that are at least as favorable as the terms of the agreements between Mesirow
Asset Management and the relevant client as in effect on the date hereof, (c)
preserve the goodwill of Mesirow Asset Management until the Asset Transfers, and
thereafter to preserve such goodwill as goodwill of the Partnership, and (d)
preserve any Licenses required in connection with the business of Mesirow Asset
Management (including without limitation all investment adviser registrations).
In addition, none of Mesirow Asset Management, Mesirow Holdings (to the extent
it may affect Mesirow Asset Management or the Partnership), the Partnership, any
of Management Corporations or any of the Managers shall take any material action
not in the ordinary course of business without giving AMG prior written notice
thereof.
8.4 Observer Rights and Access. Until the Closing, Mesirow Asset
Management shall use all commercially reasonable efforts to cause the board of
trustees of the Skyline Trust to permit a representative of AMG to attend and
observe all meetings of the board of trustees of the Skyline Trust in a
non-voting observer capacity. Mesirow Asset Management and Mesirow Holdings
shall afford to AMG and its representatives free access to the properties and
records of Mesirow Asset Management and Mesirow Holdings (to the extent it may
affect Mesirow Asset Management and the Partnership), the Skyline Funds and the
Partnership in order that AMG may have full opportunity to make such
investigation as it shall desire for purposes consistent with this Agreement.
8.5 Termination of Reserve Fund Arrangements. Mesirow Holdings and Mesirow
Asset Management will cooperate with AMG and the Skyline Funds and will use all
commercially reasonable efforts to terminate, and to cause the Skyline Funds to
terminate, all existing agreements in connection with the Reserve Fund and each
series thereof as such agreements apply to the Skyline Funds.
8.6 Use of Skyline Name. The Mesirow Entities will use all commercially
reasonable efforts to cease all use, and to cause their Affiliates and the
Reserve Fund to cease all use, on and after the Closing Date of the word
"Skyline," and the logo used by the Skyline Trust and all other trademarks,
trade names or service marks related thereto.
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8.7 SEC Filings.
(a) The parties hereto will cooperate to file, as soon as
practicable following the execution of this Agreement and on behalf of the
Partnership, with the SEC a Uniform Application for Investment Adviser
Registration on Form ADV to register the Partnership as an investment adviser
under the Advisers Act, and will cooperate to file the appropriate application
for investment adviser registration as soon as practicable following the
execution of this Agreement on behalf of the Partnership, with all other
jurisdictions in which Mesirow Asset Management is registered as an investment
adviser and in each other jurisdiction where it is desirable for the Partnership
to be registered as an investment adviser in order to conduct after the Asset
Transfers and the Closing the Institutional Business presently conducted by
Mesirow Asset Management (together with the application on Form ADV, the
"Applications").
(b) The parties hereto will cooperate with each other and will each
use all commercially reasonable efforts to cause the Skyline Funds to file a
post-effective amendment to the Skyline Funds' registration statement on Form
N-1A at least sixty (60) days prior to the Closing, which amendment shall
reflect all changes in the Skyline Funds' affairs as a consequence of the
transactions contemplated hereby, and shall cooperate with one another in
causing the Skyline Funds to make any other filing necessary to satisfy
disclosure requirements to enable the public distribution of the shares of
beneficial interest of the Skyline Funds to continue unabated after the Closing.
Each party covenants that any information describing such party or its
Affiliates or provided by such party or its Affiliates or their respective
operations or plans that is contained in any such post-effective amendment will
not contain, at the time any such amendment becomes effective, any untrue
statement of material fact or omit to state any material fact required to be
stated therein, where necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
(c) The parties hereto will cooperate with each other and will each
use all commercially reasonable efforts to cause the Skyline Funds, with the
assistance of counsel to AMG, to prepare and file a proxy statement and related
materials, as contemplated by Section 8.1(d) as soon as practical following the
execution of this Agreement. Each party covenants that any information
describing such party or its Affiliates or provided by such party or its
Affiliates or their respective operations or plans that is contained in any
solicitation materials will not contain, at the time such materials are
furnished or at the time of the shareholder meeting contemplated thereby, any
untrue statement of material fact or omit to state any material fact required to
be stated therein, where necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
8.8 Interim Financial Statements. Until the Closing, on or prior to the
penultimate business day of each calendar month, Mesirow Asset Management shall
furnish to AMG unaudited balance sheets of Mesirow Asset Management as the end
of the preceding month, together with the related unaudited statements of income
and cash flows of the Institutional Business for the period from March 31, 1995
through such month end, which financial statements shall have been
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prepared in accordance with generally accepted accounting principles, methods
and practices using the accrual method of accounting consistently applied
(except that they do not include footnotes) and fairly present in all material
respects the financial position and the results of operations of Mesirow Asset
Management for the period covered thereby and then ended, subject to year-end
audit adjustments which individually, or in the aggregate, are not material
(together, such financial statements are referred to as the "Interim Financial
Statements"). At the time the Interim Financial Statements are given to AMG,
they shall be accompanied by a certificate of Mesirow Asset Management to the
foregoing effect.
8.9 Confidentiality. Each of the parties hereto agrees, on behalf of
itself and its representatives and agents, to keep confidential any and all
information and data of a proprietary or confidential nature with respect to
another party in its possession or which it has received as a result of any
investigation made in connection with this Agreement; provided, however, that
notwithstanding the foregoing, each of the parties hereto shall be free to
disclose any such information or data (a) to the extent required by applicable
law, order, rule or regulation (including without limitation applicable federal
and state securities laws) and (b) during the course of or in connection with
any litigation, arbitration or other proceeding based upon or in connection with
the subject matter of this Agreement; provided, however, that prior to
disclosing any such information in connection with any such litigation,
arbitration or proceeding, the applicable party shall give prior notice to the
other interested parties and shall use reasonable efforts to obtain confidential
treatment therefor. In addition, the timing and content of any news or other
media release regarding the transactions contemplated hereby shall be mutually
agreed to in advance by AMG and Mesirow Holdings.
8.10 Expenses. Except as otherwise expressly provided herein, each of the
parties hereto shall pay its own expenses incident to the negotiation and
consummation of the transactions contemplated by this Agreement and the
Transaction Documents and the preparation and carrying out of this Agreement and
the transactions contemplated hereby or thereby; provided, however, that AMG
shall pay the fees and disbursements of ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ in connection
with the preparation and filing of the proxy statement described in Section
8.8(c) and all filing and registration fees incurred by the Partnership in
connection with the transactions contemplated hereby or pursuant to its
obligations hereunder.
8.11 Covenants With Respect to Section 15(f) of the Investment Company
Act.
(a) In accordance with Section 15(f) of the Investment Company Act
(i) for a period of three (3) years after the effectiveness of the Asset
Transfers, AMG shall not cause, and shall use all commercially reasonable
efforts not to permit, any "interested person" of Mesirow Asset Management or
the Partnership, as such term is defined in the Investment Company Act, to
become or to continue as a member of the Board of Trustees of the Skyline Trust
unless, taking into account such interested person, at least seventy-five
percent (75%) of the members of such Board of Trustees are not interested
persons of Mesirow Asset Management or the Partnership, and (ii) for a period of
two (2) years following the Closing Date, AMG will not engage in or
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cause, and will use all commercially reasonable efforts to prevent any Affiliate
of the Partnership from engaging in or causing, any act, practice or arrangement
that imposes an unfair burden on the Skyline Trust within the meaning of Section
15(f), or if the Partnership or any of its Affiliates shall have obtained an
order from the SEC exempting it from the provisions of Section 15(f) or an
opinion of counsel based on judicial precedents under applicable federal law
with respect to the meaning of Section 15(f), which opinion is reasonably
satisfactory in form and substance to the Board of Trustees of the Skyline
Trust, then this representation shall be deemed to be modified to the extent
necessary to permit the Partnership and its Affiliates to act in a manner
consistent with such exemptive order or legal opinion.
(b) In accordance with Section 15(f) of the Investment Company Act
(i) for a period of three years after the effectiveness of the Asset Transfers,
neither Mesirow Asset Management nor Mesirow Holdings shall knowingly cause, and
shall use all commercially reasonable efforts to cooperate with reasonable
requests made by AMG so as not to permit any "interested person" of Mesirow
Asset Management, as such term is defined in the Investment Company Act, to
become or to continue as a member of the Board of Trustees of the Skyline Trust
unless, taking into account such interested person, at least seventy-five
percent (75%) of the members of such Board of Trustees are not interested
persons of Mesirow Asset Management or the Partnership, and (ii) for a period of
two (2) years following the Closing Date, neither Mesirow Asset Management nor
Mesirow Holdings will engage in or cause, and each will use all commercially
reasonable efforts to prevent any Affiliate of each of them from engaging in or
causing, and act, practice or arrangement that imposes an unfair burden on the
Skyline Trust within the meaning of Section 15(f); provided, however, that if
Mesirow Asset Management or any of its Affiliates shall have obtained an order
from the SEC exempting it from the provisions of Section 15(f) or an opinion of
counsel based on judicial precedents under applicable federal law with respect
to the meaning of Section 15(f), which opinion is reasonably satisfactory in
form and substance to the Board of Trustees of the Skyline Trust, then this
representation shall be deemed to be modified to the extent necessary to permit
Mesirow Asset Management and its Affiliates to act in a manner consistent with
such exemptive order or legal opinion.
8.12 Retirement Plans. As of the effectiveness of the Closing, the
Partnership shall execute and deliver an employee retirement plan satisfactory
to the Managers and AMG, which provides for employee contributions toward
retirement and permits, among other things, the investment of contributions in
the Skyline Funds.
8.13 Agreement with Mesirow Financial. During the period from the Closing
Date through the second anniversary of the Closing Date, Mesirow Holdings shall
take any and all action necessary to cause Mesirow Financial to pay all
compensation or fees received by it pursuant to any selling group, selected
dealer, distribution, service or similar agreement with respect to shares of any
of the Skyline Funds ("Fees") to the registered representative(s) or similar
customer service provider(s) responsible for the customers who hold the shares
of the Skyline Funds with respect to which such fees are being received.
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8.14 Mesirow Growth Fund. The Mesirow Entities shall use all commercially
reasonable efforts to cause the trustees of the Skyline Trust to permit limited
partners in the Mesirow Growth Fund to purchase shares of Skyline Special
Equities Portfolio with a net asset value equal to the fair market value of the
distributions that such limited partners are entitled to receive upon
liquidation of Mesirow Growth Fund. The Mesirow Entities shall cause to be sent
to the limited partners of Mesirow Growth Fund, together with any notice,
report, consent or similar document that sets forth the intention of any of the
Mesirow Entities to take action that will cause Mesirow Growth Fund to
terminate, a notice indicating that such limited partners may make investments
in the Skyline Special Equities Portfolio, together with a prospectus,
application and such other information with respect to the Skyline Special
Equities Portfolio as AMG, the Managers and the Mesirow Entities may reasonably
agree to be appropriate or necessary.
8.15 Tax Compliance. Mesirow Asset Management shall recommend that, and
after such course of action has been approved by the board of trustees of
Skyline Trust shall take all actions necessary to cause, Skyline Special
Equities II, within thirty (30) days after the execution of this Agreement, to
prepare and file an amended federal income tax return for the 1993 tax year (and
any other documentation required by the IRS in connection therewith) and pay any
deficiency related to such tax year and other additions to tax, interest, fines
and penalties relating thereto.
SECTION 9. INDEMNIFICATION.
9.1 Indemnification by Mesirow Asset Management and Mesirow Holdings. From
and after the Closing Date, Mesirow Asset Management and Mesirow Holdings shall
jointly and severally defend, indemnify, save and hold harmless AMG, AMG's
Affiliates and subsidiaries and their respective employees, representatives,
officers, directors, partners and agents, from and against any and all actions,
suits, claims, proceedings, demands, assessments and judgments, costs, Taxes,
losses (including, without limitation, diminution in value), liabilities,
damages, deficiencies and expenses, including without limitation, interest,
penalties, reasonable attorneys' and accountants' fees and all reasonable
amounts paid in investigation, defense or settlement of any of the foregoing,
incurred in connection with, arising out of, resulting from or incident to (a)
any misrepresentation, breach of any warranty, covenant or agreement, the
inaccuracy of any representation, or the default or nonfulfillment of any
agreement on the part of Mesirow Asset Management or Mesirow Holdings and, prior
to the Closing, the Partnership, under this Agreement or any of the Transaction
Documents or any of the documents, instruments or certificates contemplated
hereby or thereby or in any schedule, exhibit, certificate or financial
statement delivered hereunder, or any claim, action or proceeding asserted or
instituted or growing out of any matter or thing covered by such
representations, warranties, covenants or agreements, (b) the operation of
Mesirow Asset Management including, without limitation the operation of the
Partnership prior to the Closing, (c) the administration or management of the
Skyline Funds including, without limitation, the administration or management of
the Skyline Funds prior to the Closing, and the Tax matters described on
Schedule 2.24(f) or (d) any contracts, leases or agreements not assumed by the
Partnership; provided, however, that the indemnification obligations of the
Mesirow Entities hereunder (other than obligations with respect to
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indemnification for Taxes or based upon or related to a breach of any
representation or warranty or covenant with respect to Taxes, Employee Plans or
environmental laws or based upon or related to the Tax matters described on
Schedule 2.24(f)) shall be limited in the aggregate to an amount equal to the
Purchase Price.
9.2 Indemnification by Management Corporations. From and after the Closing
Date, each of the Management Corporations, shall severally defend, indemnify,
save and hold harmless AMG, AMG's Affiliates and subsidiaries, the Managers
(other than any Manager holding stock in such Management Corporation), the other
Management Corporations, and their respective employees, representatives,
officers, directors, partners and agents from and against any and all actions,
suits, claims, proceedings, demands, assessments and judgments, costs, losses
(including, without limitation, diminution in value), liabilities, damages,
deficiencies and expenses, including, without limitation, interest, penalties,
reasonable attorneys' and accountants' fees and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing, incurred in
connection with, arising out of, resulting from or incident to any
misrepresentation, breach of warranty, covenant or agreement, the inaccuracy of
any representation, or the default or nonfulfillment of any agreement, in each
case on the part of such party or their respective stockholders, under this
Agreement or any of the Transaction Documents or any of the documents,
instruments or certificates contemplated hereby or thereby, or any schedule,
exhibit, or certificate delivered hereunder or thereunder, or any claim, action,
or proceeding asserted or instituted or growing out of any matter or thing
covered by such representations, warranties, covenants or agreements.
9.3 Indemnification by AMG.
(a) From and after the Closing Date, AMG shall defend, indemnify,
save and hold harmless Mesirow Asset Management, Mesirow Holdings, the Managers
and the Management Corporations and their respective officers and directors from
and against any and all actions, suits, claims, proceedings, demands,
assessments and judgments, costs, Taxes, losses, liabilities, damages,
deficiencies and expenses, including without limitation, interest, penalties,
reasonable attorneys' and accountants' fees and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing, incurred in
connection with or arising out of or resulting from or incident to any
misrepresentation, breach of any warranty, covenant or agreement, the inaccuracy
of any representation, or the default or nonfulfillment of any agreement on the
part of AMG under this Agreement or any of the Transaction Documents or any of
the documents, instruments, or certificates contemplated hereby or thereby, or
any schedule, exhibit, or certificate delivered hereunder or thereunder, or any
claim, action or proceeding asserted or instituted or growing out of any matter
or thing covered by such representations, warranties, covenants or agreements.
(b) From and after the Closing Date, AMG shall defend, indemnify, save and
hold harmless Mesirow Asset Management, Mesirow Holdings and their respective
officers and directors from and against any and all costs, expenses and
attorneys' fees and disbursements
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incurred in connection with or arising out of or resulting from or incident to
any suit, claim, or proceedings to which any of the foregoing indemnified
parties is made party; provided that such suit, claim or proceeding results from
the operation of the Partnership after the Closing Date, and; provided further
that none of the foregoing indemnified parties is found in such proceeding or
otherwise by a court or tribunal of competent jurisdiction to have acted with,
or failed to act as a result of, willful misconduct, recklessness or gross
negligence.
9.4 Survival of Indemnification Obligations. The indemnification
obligations of Mesirow Asset Management, Mesirow Holdings, the Partnership, each
Management Corporation, and AMG contained in this Section 9 shall terminate
three (3) years after the Closing Date except that with respect to the
representations and warranties contained in Sections 2.18, 2.20, and 2.24(f)
and, to the extent it relates to such Sections, Section 2.25, such
indemnification obligations shall survive until the expiration of the applicable
statutes of limitations, including extensions thereof. Notwithstanding the
foregoing, if prior to such expiration date a specific state of facts shall have
become known which may constitute or give rise to any loss as to which such
indemnity may be payable and an indemnified party shall have given notice of
such facts to the indemnifying party specifying and describing the basis of the
relevant indemnity claim, then the right to indemnification with respect thereto
shall remain in effect without regard to when such matter shall have been
finally determined and disposed of according to the date on which notice of the
applicable claim is given.
9.5 Defense of Claims. If any action, suit, claim, Tax audit, proceeding,
demand, assessment or enforcement action is filed or initiated against any party
entitled to the benefit of indemnity hereunder, the indemnified party shall give
written notice thereof to the indemnifying party or parties as promptly as
practicable (and in any event within thirty (30) days after the service of the
citation or summons); provided, however, that the failure of any indemnified
party to give timely notice shall not affect the rights of such party to
indemnification hereunder except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice and a
reasonable period of time to allow for analysis of the relevant claim, if the
indemnifying party shall acknowledge in writing to such indemnified party that
such indemnifying party shall be obligated under the terms of its indemnity
hereunder for all liabilities of the indemnified party in connection with such
action, suit, claim, tax audit, proceeding, demand, assessment or enforcement
action (subject to the following sentence), then the indemnifying party shall be
entitled, if it so elects and with counsel reasonably satisfactory to the
indemnified party, to take control of the defense and investigation of such
action, suit, claim, tax audit, proceeding, demand, assessment or enforcement
action, and to employ and engage attorneys to handle and defend the same, at the
indemnifying party's cost, risk and expense; and the indemnified party shall
cooperate in all reasonable respects, at the indemnifying party's request and
cost, risk and expense, with the indemnifying party and its attorneys in the
investigation, trial and defense of such action, suit, claim, tax audit,
proceeding, demand, assessment or enforcement action, and any appeal arising
therefrom; provided, however, that the indemnified party may, at its own cost,
participate in such investigation, trial and defense of such action, suit,
claim, tax audit, proceeding, demand, assessment or enforcement action, and any
appeal arising therefrom; and
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provided further, that the indemnifying party shall have an obligation to keep
the indemnified party apprised of the status of the action, suit, claim, tax
audit, proceeding, demand, assessment or enforcement action, to furnish the
indemnified party with all documents and information that the indemnified party
shall reasonably request in connection therewith, and to consult with the
indemnified party prior to acting on major matters involved in such action,
suit, claim, tax audit, proceeding, demand, assessment or enforcement action,
including settlement discussions, it being understood that no settlement of any
action for which indemnification may be payable hereunder shall be made without
the prior written consent of the indemnified party. Notwithstanding any other
provision of this Section 9.5, if an indemnified party withholds its consent to
a settlement or elects to defend any claim, where but for such action the
indemnifying party could have settled such claim, the indemnifying party shall
be required to indemnify the indemnified party only up to a maximum of the bona
fide settlement offer for which the indemnifying party could have settled such
claim. The indemnified party shall be entitled to defend, settle or proceed in
such other manner as it deems fit, in its sole discretion, in connection with
any action, suit, claim, proceeding, demand, assessment or enforcement action as
to which the indemnifying party has not acknowledged its obligations in writing
in accordance with the foregoing sentence; and no actions taken by the
indemnified party in connection therewith shall affect or limit the obligations
of the indemnifying party pursuant to this Section 9.5.
9.6 Prompt Payment. Any indemnity payable pursuant to this Section 9 shall
be paid within the later of ten (10) days of the indemnified party's request
therefor or ten (10) days prior to the date on which the liability upon which
the indemnity is based is required to be satisfied by the indemnified party.
SECTION 10. DEFINITIONS.
10.1 Definitions. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings set forth below.
"Advisers Act" means the Investment Advisers Act of 1940, as the
same may be amended from time to time, and any successor to such act.
"Affiliate" of a Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person. As used in this definition, the term
"control" (including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to (a) vote
twenty-five percent (25%) or more of the outstanding voting securities of such
Person, or (b) otherwise direct the management policies of such Person by
contract or otherwise.
"Aggregate Contract Payments" means the aggregate amount of all
investment advisory, management, administration or similar fees provided for in
investment advisory contracts between Mesirow Asset Management and its clients,
determined on an annualized basis
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and based upon (a) assets under management as of December 31, 1994 or any
subsequent account inception date and (b) the contractual rate of such fees
provided for in the relevant agreement(s).
"Applications" has the meaning set forth in Section 8.8 hereof.
"Asset Transfers" means the consummation of the transactions to be
effected pursuant to the Asset Transfer Agreement, as more fully described in
Section 6.6.
"Asset Transfer Agreement" means that certain Asset Transfer
Agreement, a form of which is attached hereto as Exhibit 6.6.
"Base Fees" means all Aggregate Contract Payments under all
investment advisory contracts constituting the Institutional Business as of
December 31, 1994.
"Capital Account" has the meaning ascribed thereto in the
Partnership Agreement and the Restated Partnership Agreement.
"Claims" has the meaning set forth in Section 1.1(a) hereof.
"Closing" has the meaning ascribed thereto in Section 1.3 hereof.
"Closing Date" has the meaning ascribed thereto in Section 1.3
hereof.
"Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time, and any successor to such code.
"Company Financial Statements" has the meaning set forth in Section
2.11(a) hereof.
"Comparable Contract" means a new contract between the Partnership
and the party or parties to a prior contract with Mesirow Asset Management which
new contract is substantially the same as such prior contract with Mesirow Asset
Management and is at least as favorable in all respects (including without
limitation with respect to advisory fees) to the Partnership as such prior
contract (as in effect on March 31, 1995) was to Mesirow Asset Management.
"Delaware Act" means the Delaware Revised Uniform Limited
Partnership Act (6 Del. C. Section 7-101, et. seq.), as it may be amended from
time to time, and any successor to such act.
"Employee Contract" has the meaning set forth in Section 2.10
hereof.
"Employee Stockholder" has the meaning ascribed thereto in the
Restated Partnership Agreement.
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"Employment Arrangement" has the meaning set forth in Section 2.10
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as the
same may be amended from time to time, and any successor to such act.
"Fee Schedule" has the meaning set forth in Section 2.8 hereof.
"Indebtedness" means all 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 (other than accrued expenses
arising in the ordinary course of business), (iv) under leases that would, in
accordance with generally accepted accounting principles, appears on the balance
sheet of the lessee as liabilities, (v) secured by a lien, (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.
"Interim Financial Statements" has the meaning set forth in Section
8.8 hereof.
"Institutional Business" has the meaning set forth in Section 2.6
hereof.
"Investment Company Act" means the Investment Company Act of 1940,
as the same may be amended from time to time, and any successor to such act.
"License" has the meaning set forth in Section 2.2 hereof.
"Limited Partner" has the meaning ascribed thereto in the Restated
Partnership Agreement.
"Management Corporation" has the meaning set forth in the preamble
hereof.
"Manager" has the meaning set forth in the preamble hereof.
"Material Adverse Effect" means a material adverse effect on the
business, assets, condition (financial or otherwise) or prospects of such Person
or Persons, as the case may be.
"Mesirow Asset Management Financial Statements" has the meaning set
forth in Section 2.11(a) hereof.
"Mesirow Entity"has the meaning set forth in Section 2.1 hereof.
"New Fund Contracts" has the meaning set forth in Section 6.14
hereof.
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"Non Solicitation Agreement" means one of the Non Solicitation/Non
Disclosure Agreements by and among the Partnership, each Employee Stockholder,
and the Limited Partner through which such Employee Stockholder holds his or her
Partnership Interests, in the form attached hereto as Exhibit 6.7.
"Partnership" means Skyline Asset Management, L.P., a Delaware
Limited Partnership.
"Partnership Agreement" means the Partnership's Limited Partnership
Agreement in the form attached hereto as Exhibit 2.1, which Partnership
Agreement shall be amended and restated simultaneously with the Closing.
"Partnership Interests" has the meaning ascribed thereto in the
Restated Partnership Agreement.
"Partnership Points" has the meaning ascribed thereto in the
Restated Partnership Agreement.
"Person" means 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.
"Portfolio Business" has the meaning set forth in Section 2.6
hereof.
"Purchased Interest" has the meaning set forth in Section 1.1
hereof.
"Restated Partnership Agreement" means the Partnership's Amended and
Restated Limited Partnership Agreement in the form attached hereto as Exhibit
1.4(a).
"SEC" has the meaning set forth in Section 2.23 hereto.
"Securities Act" means the Securities Act of 1933, as the same may
be amended from time to time, and any successor to such act.
"Skyline Funds" means Skyline Special Equities Portfolio and Skyline
Special Equities II (including their respective predecessors), each a separate
portfolio series of the Skyline Trust.
"Skyline Trust" means Skyline Fund, a Massachusetts business trust
established pursuant to an Agreement and Declaration of Trust dated February 4,
1987, of which each of the Skyline Funds is a separate series.
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"Subsidiary" means any entity more than fifty percent (50%) of whose
outstanding voting securities, or any partnership, joint venture or other entity
more than fifty percent (50%) of whose total equity interest, are directly or
indirectly owned by such person.
"Taxes" has the meaning set forth in Section 2.18 hereof.
"Transaction Documents" means this Agreement, the Asset Transfer
Agreements (and all the agreements, documents and certificates which are
exhibits thereto), the Non Solicitation Agreements, the Restated Partnership
Agreement, the New Fund Contracts and all the agreements, documents, instruments
and certificates entered into in connection herewith or therewith.
10.2 Survival of Representations, Warranties and Covenants. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall survive the Closing Date and the
consummation of any or all of the transactions contemplated hereby for a period
of three (3) years after the Closing Date except for any representations and
warranties made pursuant to Sections 2.18, 2.20 and 2.24(f) and, to the extent
it relates to such Sections, Section 2.25, which shall survive until the
expiration of the applicable statutes of limitations (if any), including
extensions thereof; provided, however, that if any party has disclosed in the
certificates delivered at the Closing as contemplated by Section 6.2 or Section
7.2 hereof, an exception to the accuracy of a representation or warranty made
herein by such party, and the party or parties to which such certificate was
delivered nevertheless shall have consented to consummate the transactions
contemplated hereby, then such consenting party or parties shall be deemed to
have waived all rights to indemnification under Section 9 hereof (for
themselves, their Affiliates, the Managers, the Management Corporations and all
their respective employees, representatives, officers, directors, partners and
agents) to the extent of such exception. The expiration of any representation or
warranty shall not affect any claim made prior to the date of such expiration.
All covenants herein not fully performed shall survive the Closing Date and
continue thereafter until fully performed. 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.
10.3 Certain Activities. AMG and certain of its Affiliates possess and
intend to possess interests in other business ventures which are competitive
with the Partnership and/or the Mesirow Entities and none of the Partnership,
any of the Mesirow Entities, any of the Management Corporations or any of the
Managers shall have any rights to the ideas, concepts and ventures which AMG may
undertake or suggest to any such entities.
10.4 Termination of Agreement.
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(a) Notwithstanding any other provision herein to the contrary, this
Agreement may be terminated (i) at the election of AMG upon written notice to
Mesirow Holdings and the Managers, if it has become reasonably, objectively
certain that any condition required to be satisfied under Section 6 hereof,
other than a condition that is reasonably within AMG's control, will not be
satisfied on or prior to December 31, 1995 (the "Termination Date") and (ii) at
the election of Mesirow Holdings upon written notice to AMG and the Managers, if
it has become reasonably, objectively certain that any condition required to be
satisfied under Section 7 hereof, other than a condition that is reasonably
within the control of the Mesirow Entities, will not be satisfied on or prior to
the Termination Date.
(b) In the event that this Agreement is terminated at the election of
either AMG or Mesirow Holdings pursuant to Section 10.4(a), except as provided
in Section 10.4(c), the parties hereto shall each bear their own expenses
incident to the negotiation of this Agreement and the Transaction Documents
provided that no party shall be relieved from any liabilities or damages arising
out of its breach of any provision of this Agreement.
(c) The parties hereto have agreed, as a condition of Mesirow Asset
Management's and Mesirow Holding's willingness, and in order to induce Mesirow
Asset Management and Mesirow Holdings, to enter into this Agreement and to
reimburse Mesirow Asset Management and Mesirow Holdings for incurring the costs
and expenses related to entering into this Agreement and the transactions
contemplated hereby, that in the event that this Agreement is terminated at any
time after (x) the Trustees (including a majority of the independent Trustees)
of each Skyline Fund have approved the new advisory contracts contemplated by
Section 6.3(b) and (y) clients of Mesirow Asset Management (excluding the
Skyline Funds) which are party to advisory agreements that provide for Aggregate
Contract Payments constituting at least seventy-five percent (75%) of the Base
Fees (other than Base Fees with respect to the Skyline Funds) shall have
affirmatively consented in writing to the transactions contemplated hereby (by
countersigning a notice substantially in the form of Exhibit 8.1(a) or Exhibit
8.1(b) hereto) such that the advisory contracts in effect on the date of this
Agreement survive the transactions contemplated hereby without impermissible
assignment, by Mesirow Holdings pursuant to Section 10.4(a)(ii) and because of a
failure of the conditions under Section 7 to be satisfied, which failure is
caused by acts or omissions of AMG which acts and omissions are in breach of
this Agreement, then AMG shall make a cash payment to Mesirow Holdings of Five
Hundred Thousand Dollars ($500,000) within a reasonable time (not to exceed
thirty (30) days) after the effectiveness of such termination.
10.5 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 right at a later time to enforce or require performance of
such provision or of any other provision hereof; provided, however, that no such
waiver, unless it, by its own terms, explicitly provides
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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.
10.6 Modifications. Except as otherwise expressly provided in this
Agreement, neither this Agreement (including any exhibits or schedules hereto)
nor any term hereof (or thereof) may be changed, amended, modified, waived,
discharged or terminated except to the extent that the same is effected and
evidenced by the written consent of Mesirow Holdings and AMG.
10.7 Further Assurances. Each of the parties hereto agrees to execute all
such further instruments and documents and to take all such further action as
any other party may reasonably require in order to effectuate the terms and
purposes of this Agreement.
10.8 Law Governing. This Agreement shall be construed under and governed
by the internal laws of the State of Delaware, without giving effect to the
choice or conflicts of law provisions thereof.
10.9 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered as follows:
If to AMG, to:
Affiliated Managers Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
and Chief Executive Officer
With a copy to:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Floor, P.C.
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If to Mesirow Asset Management or Mesirow Holdings, to:
Mesirow Financial
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇,
Chairman, Chief Executive Officer and President
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to the Partnership to:
Skyline Asset Management, L.P.
c/o Mesirow Asset Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn:
With a copy to:
Affiliated Managers Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
and Chief Executive Officer
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And a copy to:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Floor, P.C.
And a copy to:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
8000 Sears Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to any of the Management Corporations or any of the Managers:
[Name of applicable Management Corporation
or Manager]
c/o Mesirow Asset Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: [Name of applicable Manager]
With a copy to:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
8000 Sears Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or such other address or facsimile, telex or telecopy number as such party may
hereafter specify for the purpose by notice to the other parties hereto. Each
such notice, request or other communication shall be effective (i) if given by
facsimile, telex or telecopy, when such facsimile, telex or telecopy is
transmitted to the facsimile, telex or telecopy number specified in this Section
10.9 and the appropriate answer back is received or (ii) if given by any other
means, when actually delivered at the address specified in this Section 10.9.
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10.10 Prior Agreements Superseded. This Agreement together with the
Schedules and Exhibits hereto supersedes all prior understandings and agreements
among the parties relating to the subject matter hereof.
10.11 Assignability. Except as otherwise specifically provided for herein,
neither this Agreement nor any rights or obligations hereunder shall be
assignable by any party to any other person without the written consent of the
other parties. This Agreement shall be binding upon and enforceable by, and
shall inure to the benefit of, the parties hereto and their respective
successors, heirs, executors, administrators and permitted assigns and
transferees, and no others.
10.12 Captions. The captions in this Agreement are for convenience only
and shall not affect the construction or interpretation of any term or provision
hereof.
10.13 Gender and Number. Whenever used herein, the singular number shall
include the plural, the plural shall include the singular, and the use of any
gender shall include all genders.
10.14 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question, invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had been modified or deleted in such a
manner so as to make this Agreement, as so modified, legal and enforceable to
the maximum extent permitted in such jurisdiction or in such case.
10.15 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument as of the date set forth above by such parties
or their duly authorized representatives.
AFFILIATED MANAGERS GROUP, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
MESIROW FINANCIAL HOLDINGS,
INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
MESIROW ASSET MANAGEMENT, INC.,
an Illinois corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
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SKYLINE ASSET MANAGEMENT,
L.P., a Delaware limited partnership
By: Mesirow Asset Management,
Inc., its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
WMD CORP., an Illinois corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
KSK CORP.,
an Illinois corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
GXL CORP.,
an Illinois corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
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MXM CORP.,
an Illinois corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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