Document:

EXHIBIT 10.1

 

AMENDED AND RESTATED PURCHASE AGREEMENT

 

BY
AND BETWEEN

 

IMD
PARENT LLC,

 

LEHMAN
BROTHERS HOLDINGS INC.

 

AND

 

THE
OTHER SELLERS NAMED HEREIN

 

 

dated
as of October 3, 2008

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  5

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Certain Definitions

  	
  5

  
	
  1.2

  	
  Other Definitional and
  Interpretive Matters

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  PURCHASE AND SALE OF
  ASSETS; ASSUMPTION OF LIABILITIES

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Purchase and Sale of
  Assets

  	
  38

  
	
  2.2

  	
  Excluded Assets

  	
  38

  
	
  2.3

  	
  Assumption of
  Liabilities

  	
  38

  
	
  2.4

  	
  Excluded Liabilities

  	
  39

  
	
  2.5

  	
  Assumption, Assignment,
  Cure Amounts

  	
  41

  
	
  2.6

  	
  Further Conveyances and
  Assumptions

  	
  42

  
	
  2.7

  	
  Bulk Sales Laws

  	
  44

  
	
  2.8

  	
  Purchase Price

  	
  44

  
	
  2.9

  	
  Payment of Purchase
  Price

  	
  44

  
	
  2.10

  	
  Pre-Closing Base
  Purchase Price Adjustment

  	
  45

  
	
  2.11

  	
  Post-Closing True-Ups

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  CLOSING AND TERMINATION

  	
  49

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Closing Date

  	
  49

  
	
  3.2

  	
  Certain Closing
  Deliveries

  	
  49

  
	
  3.3

  	
  Termination of
  Agreement

  	
  50

  
	
  3.4

  	
  Procedure Upon
  Termination

  	
  52

  
	
  3.5

  	
  Effect of Termination

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS AND WARRANTIES
  REGARDING THE COMPANY GROUP AND THE BUSINESS

  	
  54

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Organization and Good
  Standing

  	
  54

  
	
  4.2

  	
  Authorization of
  Agreement

  	
  54

  
	
  4.3

  	
  Capitalization

  	
  55

  
	
  4.4

  	
  Subsidiaries

  	
  55

  
	
  4.5

  	
  Conflicts and Consents

  	
  55

  
	
  4.6

  	
  Financial Statements

  	
  56

  
	
  4.7

  	
  Undisclosed Liabilities

  	
  57

  
	
  4.8

  	
  Absence of Certain
  Developments

  	
  57

  
	
  4.9

  	
  Taxes

  	
  57

  
	
  4.10

  	
  Real Property

  	
  59

  
	
  4.11

  	
  Title to Purchased
  Assets

  	
  60

  
	
  4.12

  	
  Intellectual Property
  Rights

  	
  60

  
	
  4.13

  	
  Material Contracts

  	
  61

  
	
  4.14

  	
  Employee Benefits Plans

  	
  62

  
	
  4.15

  	
  Labor

  	
  65

  

 

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  4.16

  	
  Litigation

  	
  65

  
	
  4.17

  	
  Compliance with Laws;
  Permits

  	
  65

  
	
  4.18

  	
  Sufficiency of Assets

  	
  70

  
	
  4.19

  	
  Insurance

  	
  70

  
	
  4.20

  	
  No Other
  Representations or Warranties; Schedules

  	
  70

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  REPRESENTATIONS AND
  WARRANTIES REGARDING THE SELLER

  	
  71

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Organization and Good
  Standing

  	
  71

  
	
  5.2

  	
  Authorization of
  Agreement

  	
  71

  
	
  5.3

  	
  Ownership of the
  Interests

  	
  71

  
	
  5.4

  	
  Conflicts and Consents

  	
  71

  
	
  5.5

  	
  Litigation

  	
  72

  
	
  5.6

  	
  Financial Advisors

  	
  72

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  REPRESENTATIONS AND
  WARRANTIES OF THE PURCHASER

  	
  72

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Organization and Good
  Standing

  	
  72

  
	
  6.2

  	
  Authorization of
  Agreement

  	
  72

  
	
  6.3

  	
  Conflicts and Consents

  	
  73

  
	
  6.4

  	
  Litigation

  	
  73

  
	
  6.5

  	
  Investment Intention

  	
  73

  
	
  6.6

  	
  Financial Advisors

  	
  74

  
	
  6.7

  	
  Guarantees

  	
  74

  
	
  6.8

  	
  Arrangement with
  Portfolio Managers

  	
  74

  
	
  6.9

  	
  Acknowledgement

  	
  74

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  COVENANTS

  	
  75

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Access to Information

  	
  75

  
	
  7.2

  	
  Conduct of the Business
  Pending the Closing

  	
  76

  
	
  7.3

  	
  Preservation of Back
  Office Support

  	
  78

  
	
  7.4

  	
  Consents

  	
  78

  
	
  7.5

  	
  Regulatory Approvals

  	
  79

  
	
  7.6

  	
  Further Assurances; Etc.

  	
  80

  
	
  7.7

  	
  Preservation of Records

  	
  81

  
	
  7.8

  	
  Publicity

  	
  81

  
	
  7.9

  	
  Employee Benefits

  	
  81

  
	
  7.10

  	
  Tax Matters

  	
  85

  
	
  7.11

  	
  [Reserved]

  	
  88

  
	
  7.12

  	
  Client Brokerage
  Consents

  	
  88

  
	
  7.13

  	
  Client Investment
  Advisory Consents

  	
  89

  
	
  7.14

  	
  Public Fund Investment
  Advisory Consents

  	
  90

  
	
  7.15

  	
  Section 15 of the
  Investment Company Act

  	
  91

  

 

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  7.16

  	
  Administration

  	
  92

  
	
  7.17

  	
  Qualification of the
  Public Funds

  	
  92

  
	
  7.18

  	
  [Reserved]

  	
  93

  
	
  7.19

  	
  Real Property Leases

  	
  93

  
	
  7.20

  	
  Competing Transaction

  	
  94

  
	
  7.21

  	
  [Reserved]

  	
  94

  
	
  7.22

  	
  Deferred Transfers

  	
  94

  
	
  7.23

  	
  Right to Exclude,
  Delay, Etc.

  	
  96

  
	
  7.24

  	
  Trust Companies

  	
  96

  
	
  7.25

  	
  Bankruptcy Pleadings

  	
  96

  
	
  7.26

  	
  Withdrawal of Seller
  Capital

  	
  98

  
	
  7.27

  	
  Lehman Commitments to
  Funds

  	
  98

  
	
  7.28

  	
  Director Resignations

  	
  99

  
	
  7.29

  	
  Taxing Authority
  Notification

  	
  99

  
	
  7.30

  	
  Employee Securities
  Company

  	
  99

  
	
  7.31

  	
  Artwork

  	
  100

  
	
  7.32

  	
  Transition Services
  Obligations

  	
  100

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  CONDITIONS TO CLOSING

  	
  102

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Conditions Precedent to
  Obligation of the Purchaser

  	
  102

  
	
  8.2

  	
  Conditions Precedent to
  Obligation of the Seller

  	
  104

  
	
  8.3

  	
  Frustration of Closing
  Conditions

  	
  105

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  INDEMNIFICATION

  	
  105

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Survival of
  Representations and Warranties

  	
  105

  
	
  9.2

  	
  Indemnification by the
  Seller

  	
  105

  
	
  9.3

  	
  Indemnification by the
  Purchaser

  	
  105

  
	
  9.4

  	
  Certain Limitations on
  Indemnification

  	
  105

  
	
  9.5

  	
  Tax Treatment of
  Indemnity Payments

  	
  106

  
	
  9.6

  	
  Survival of
  Indemnification

  	
  106

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  MISCELLANEOUS

  	
  106

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Payment of Sales, Use
  or Similar Taxes

  	
  106

  
	
  10.2

  	
  Expenses

  	
  106

  
	
  10.3

  	
  Entire Agreement;
  Amendments and Waivers

  	
  106

  
	
  10.4

  	
  Notices

  	
  107

  
	
  10.5

  	
  Binding Effect; No
  Third-Party Beneficiaries; Assignment

  	
  108

  
	
  10.6

  	
  Enforcement

  	
  108

  
	
  10.7

  	
  Counterparts

  	
  109

  
	
  10.8

  	
  GOVERNING LAW;
  SUBMISSION TO JURISDICTION; CONSENT TO SERVICE OF PROCESS; WAIVER OF JURY
  TRIAL

  	
  109

  
	
  10.9

  	
  Treatment as
  Administrative Expenses

  	
  110

  

 

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Bid
  Procedures Order

  	
   

  
	
  Exhibit B

  	
  Form of Sale Order

  	
   

  

 

 

AMENDED
AND RESTATED PURCHASE AGREEMENT

 

This
Amended and Restated Purchase Agreement (this “Agreement”), is made and
entered into as of October 3, 2008, by and between IMD Parent LLC, a
Delaware limited liability company (the “Purchaser”), Lehman Brothers
Holdings Inc., a Delaware corporation (“Parent”), and the entities
listed on Schedule I (such entities, together with Parent, individually
and collectively, the “Seller”).

 

W
I T N E S S E T H:

 

WHEREAS,
Parent is a debtor-in-possession under title 11 of the United States Code, 11
U.S.C. § 101 et seq. (the “Bankruptcy Code”), and filed a voluntary
petition for relief under chapter 11 of the Bankruptcy Code on September 15,
2008 in the United States Bankruptcy Court for the Southern District of New
York;

 

WHEREAS,
the Seller and its Subsidiaries presently conduct the Business;

 

WHEREAS,
the Seller desires to sell, transfer and assign to the Purchaser, and the
Purchaser desires to purchase, acquire and assume from the Seller, pursuant to
Sections 363 and 365 of the Bankruptcy Code and otherwise, all of the Purchased
Assets and Assumed Liabilities free and clear of any and all Claims and Liens,
all as more specifically provided herein; and

 

WHEREAS,
the Seller and the Purchaser entered into the Purchase Agreement dated as of September 29,
2008 (the “Original Purchase Agreement”) and now wish to amend and
restate the Original Purchase Agreement in its entirety as set forth herein,
with effect from the execution and delivery of the Original Purchase Agreement
on September 29, 2008 (the “Execution Date”).

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1           Certain Definitions.

 

(a)           For
purposes of this Agreement, the following terms shall have the meanings
specified in this Section 1.1:

 

“Acquired
Subsidiary” means any member of the Company Group, the equity interests of
which are purchased directly or indirectly by the Purchaser hereunder.

 

“Acquired
Subsidiary Tax Proceeding” has the meaning set forth in Section 7.10(d).

 

5

 

“Active”
means, as of a specified time, with respect to a Person employed in the NB
Business as a member of a Team as of the Execution Date, that, as of the
specified time, such Person (i) has entered into a definitive employment
agreement in form and substance satisfactory to the Purchaser with respect to
such Person’s continued employment in the Business after the Closing and (ii) has
not retired, resigned, become disabled, died or otherwise ceased to perform
services for such Team in a manner consistent with such Person’s employment
agreement.  For the avoidance of doubt,
term sheets and similar documentation shall not be treated as definitive
employment agreements for purposes of this definition.

 

“Actual
EBITDA” means the product of (i) 2 times
(ii) EBITDA for the two fiscal quarters ended May 31, 2008, as
calculated from the Audited Financial Statements; provided for purposes
of such calculation, (A) compensation expense shall be deemed to include
all compensation, whether paid in cash or deferred, as if such compensation was
paid in full in cash ratably over the fiscal year for which such compensation
was awarded and (B) the methodology for allocating dedicated costs to the
Business (including the percentage allocation to the NB Business) shall be the
same as was used in preparing the NB Business Financial Information.

 

“Administered
Assets” has the meaning set forth in Section 7.16.

 

“Administrator”
has the meaning set forth in Section 7.16.

 

“Advisory
Contract” has the meaning set forth in Section 4.13(c).

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person, and the term “control” (including
the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.  Notwithstanding the foregoing definition of “Affiliate,”
no Fund shall be deemed an Affiliate of Seller or Parent for purposes of this
Agreement, neither of the Trust Companies shall be deemed an Affiliate of
Seller or Parent for purposes of this Agreement and no portfolio company of any
direct or indirect equity holder of the Purchaser shall be deemed an Affiliate
of Purchaser or any of its Subsidiaries.

 

“Aggregate
Fixed Income Revenue Run-Rate” means the aggregate Fixed Income Revenue
Run-Rate, calculated as of the close of business in New York on a given
measurement date, of all Clients of the Fixed Income Business that are
Consenting Fixed Income Clients as of such date.

 

“Agreement”
has the meaning set forth in the preamble.

 

“Allocation”
has the meaning set forth in Section 7.10(f).

 

6

 

“Ancillary
Agreements” means the Transition Services Agreements, Subleases and any
other agreement entered into on or prior to the Closing Date in connection with
the consummation of the transactions contemplated hereby (but does not include
any Retention Arrangements).

 

“Assumed
Liabilities” has the meaning set forth in Section 2.3.

 

“Auction”
has the meaning set forth in the Bid Procedures Order.

 

“Audited
Financial Statements” means the final audited statement of the special
purpose combined financial position and statement of operations of the NB
Business as of and for the two fiscal-quarter period ended May 31, 2008,
prepared in accordance with GAAP on a full carve out basis with the exception
that such financial statements shall (i) be on a pre-tax income basis and
will not include the current and deferred provision for income taxes and
related tax assets or liabilities, (ii) exclude any additional push-down
of fixed asset balances and depreciation and amortization, asset impairment
charges and interest income (not including the revenue associated with the
margin debits) and expense outside of amounts historically recorded within the
NB Business Financial Information and (iii) be prepared on a going-concern
basis

 

“Balance
Sheet Date” has the meaning set forth in Section 4.6(a).

 

“Bankruptcy
Case” means any case, now or hereafter, filed under chapter 11 or 7 of the
Bankruptcy Code by Seller or any Subsidiary of Parent or any case under SIPA
filed against a Subsidiary of Parent.

 

“Bankruptcy
Code” has the meaning set forth in the recitals.

 

“Bankruptcy
Court” means the United States Bankruptcy Court for the Southern District
of New York or such other court as has jurisdiction over a Bankruptcy Case.

 

“Bankruptcy
Rules” means the United States Federal Rules of Bankruptcy Procedure and
any local rules of the Bankruptcy Court.

 

“BarCap”
means Barclays Capital Inc.

 

“BarCap
APA” has the meaning set forth in the definition of “Excluded Assets”.

 

“BarCap
TSA” has the meaning set forth in the definition of “Purchased Assets”.

 

“Base
Aggregate Fixed Income Revenue Run-Rate” means $129,000,000.00, as
presented on Schedule 1.1(a), which constitutes the aggregate Fixed
Income Revenue Run-Rate of all Clients, calculated as of the close of business
in New York on the Base Date.

 

7

 

“Base
Aggregate NB Revenue Run-Rate” means, with respect to any Team, the amount
set forth opposite such Team’s name under the column Captioned “Run Rate
Revenues ($ Millions)” on the Team Run Rate Schedule.

 

“Base
Date” means September 19, 2008, except (a) with respect to the
WRAP products set forth on Schedules 1.1(a) and 1.1(b), the “Base
Date” means August 31, 2008 and (b) with respect to those segments
set forth under “Institutional FI Management” on Schedule 1.1(a), the “Base
Date” means September 18, 2008.

 

“Base
Purchase Price” has the meaning set forth in Section 2.8.

 

“Bid
Procedures Order” means an Order of the Bankruptcy Court, substantially in
the form attached hereto as Exhibit A, approving the Bidding
Procedures.

 

“Bidding
Procedures” has the meaning ascribed to it in the Bid Procedures Order.

 

“Broker-Dealer
Subsidiaries” has the meaning set forth in Section 4.17(f).

 

“Business”
means the investment management business conducted by the Seller and its
Affiliates, which for purposes of this Agreement includes the businesses and
the Funds set forth on Schedule 1.1(d) but excludes the businesses
and the Funds set forth on Schedule 1.1(e), and which, during the
periods covered by the Financial Statements, generated the revenues and
earnings reflected therein, and which, for avoidance of doubt, includes the
business of providing asset management, investment advisory services and, where
applicable, brokerage and distribution services, to the Clients reflected on
the Excel file provided prior to the Execution Date by Parent to Purchaser in
the calculation of the Total Base Aggregate NB Revenue Run-Rate, the Clients
reflected on the Excel file previously provided by Parent to Purchaser in the
calculation of the Base Aggregate Fixed Income Revenue Run-Rate and the Clients
of the other businesses and Funds set forth in Schedule 1.1(d), but excludes
any portions of that business represented by the Excluded Assets and the
Excluded Liabilities.

 

“Business
Day” means any day of the year on which national banking institutions in
the City of New York are open to the public for conducting business and are not
required or authorized to close.

 

“Cash”
means the amount of cash, bank deposits and cash equivalents, as reflected in
bank or brokerage statements, less, to
the extent included therein, deposits, escrowed funds, prepaid charges and
expenses or other restricted cash balances, and less
the amounts of any unpaid checks, drafts and wire transfers issued on or prior
to the date of determination.

 

“Claims”
has the meaning set forth in Section 101(5) of the Bankruptcy Code.

 

8

 

“Client”
means any Fund or other Person to which any member of the Company Group,
directly or indirectly, provides investment advisory services pursuant to an
investment advisory Contract.

 

“Closing”
has the meaning set forth in Section 3.1.

 

“Closing
Cash” has the meaning set forth in Section 2.11(a).

 

“Closing
Cash Target” means $203,000,000, plus (a) the
aggregate amount of the following Liabilities, determined immediately prior to
the Closing Date: (i) with respect to any services rendered by Transferred
Employees in any period ending on or before the Closing Date, all Liabilities
for (A) accrued but unpaid salary and all other compensation-related
Liabilities to Transferred Employees, to the extent required to be paid by
Purchaser or its Subsidiaries in accordance with Section 7.9(b),
determined (except with respect to compensation described in clause (i)(B) of
this definition) in accordance with GAAP, and (B) the aggregate amount of
the incentive compensation and bonuses, to the extent required to be paid by
Purchaser or its Subsidiaries to Transferred Employees and accrued, in each
case, pursuant to Section 7.9(c) that have not been paid prior
to the Closing, the amount of which shall be determined in accordance with Section 7.9(c);
(ii) Taxes of any Acquired Subsidiary for any pre-Closing period,
including any Pre-Closing Straddle Period, and any other Taxes in respect of
the Purchased Assets for which the Purchaser or any Subsidiary of the Purchaser
may be liable after the Closing, determined in accordance with GAAP (excluding
for this purpose deferred Taxes); (iii) all Liabilities of any member of
the Company Group to Parent, the Seller or any of their respective Affiliates
(other than members of the Company Group) that are not discharged on or prior
to the Closing Date; (iv) $92,000,000, which represents an agreed
estimated present value of the earn-out Liabilities set forth on Schedule
1.1(f) (to the extent that amount has not come due in accordance with
its terms without any acceleration of any portion thereof and has not been paid
on or prior to Closing); and (v) all accounts payable, including payables
to brokers, dealers and clients, and all accrued expenses, of the Business,
determined in accordance with GAAP plus (b) the
pro-rated portion of any Management Fees, carried-interest, incentive fees and
other fees based on assets under management or investment performance, in each
case, paid on or before Closing that have yet to be earned as of the Closing
Date, and minus (c) the pro-rated
portion of any Management Fees that have been earned but not paid in cash as of
the Closing Date that are receivable from Persons other than the Debtors, any
other Person subject to insolvency or bankruptcy or any of their respective
Affiliates, plus (d) the product of (I) $400,000,000
times (II) a fraction, the
numerator of which shall be the Base Purchase Price, less
the Estimated Aggregate Additional Adjustment or the Final Aggregate Additional
Adjustment, as the case may be, plus the
Closing Other Liabilities Adjustment and the denominator of which shall be the
Base Purchase Price.  Notwithstanding
anything to the contrary in clause (ii) of this definition of “Closing
Cash Target”, Liabilities of any Acquired Subsidiary, or in respect of any
Purchased Asset, arising pursuant to Treasury Regulation Section 1.1502-6
(or any predecessor or successor thereof or any analogous or similar provision
under state, local or foreign Tax Law) shall 

 

9

 

only be taken into account to the extent such Liabilities have become
fixed and determinable as of the time when Closing Cash Target is determined.

 

“Closing
Date” has the meaning set forth in Section 3.1.

 

“Closing
Other Liabilities Adjustment” means all Liabilities based on facts and
circumstances first arising before the Closing (other than (i) Liabilities
with respect to Taxes and (ii) Liabilities of any Acquired Subsidiary to
the extent Purchaser would not have been liable for such Liabilities had
Purchaser purchased such Acquired Subsidiary’s assets instead of equity
interests in such Acquired Subsidiary) of the Business or any Seller or any of
its Affiliates (a) for which the Purchaser or any of its Subsidiaries may
be liable after the Closing and (b) that are not included in the
calculation of the Closing Cash Target.

 

“Closing
S&P Adjustment” means (a) if the S&P Percentage is less than or
equal to zero, zero and, (b) if the S&P Percentage is greater than
zero, a dollar amount equal to the (i) product of 0.5 times
the S&P Percentage of the Total Base Aggregate NB Revenue Run-Rate multiplied by (ii) 7.5.

 

“Closing
Schedule” has the meaning set forth in Section 2.11(a).

 

“Closing
Schedule Calculation” has the meaning set forth in Section 2.11(b).

 

“Co-Invest
Fund” has the meaning set forth in Section 7.30.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Companies”
means, collectively, the entities listed on Schedule II.

 

“Company
Benefit Plan” has the meaning set forth in Section 4.14(a).

 

“Company
Documents” has the meaning set forth in Section 4.2.

 

“Company
Group” means, collectively, the Companies and their direct and indirect
Subsidiaries.

 

“Company
Plans” has the meaning set forth in Section 7.9(a).

 

“Competing
Transaction” is defined in Section 7.20(a).

 

“Confidentiality
Agreements” means (a) the confidentiality agreement, dated as of July 28,
2008, by and between Hellman & Friedman Advisors LLC and Parent and (b) the
confidentiality agreement, dated as of July 30, 2008, by and between Bain
Capital Partners, LLC and Parent.

 

“Consenting
Fixed Income Client” means, as of any date:

 

10

 

(a)           with respect to Clients of the Fixed
Income Business that are not Funds, any Client that as of such date has
provided written consent, or is deemed to have provided so-called implied or
negative consent in accordance with Section 7.13 (or that is not
required under applicable law or the applicable investment advisory agreement
to consent), to the assignment or deemed assignment of its investment advisory
agreement as a result of the transactions contemplated by this Agreement;

 

(b)           with respect to Clients of the Fixed
Income Business that are Public Funds, any Public Fund that as of such date (i) has
entered into a New Public Fund Investment Advisory Agreement and Other Public
Funds Agreements in accordance with Section 7.14(a) and (ii) has
obtained the shareholder approvals specified in Section 7.14(b);
and

 

(c)           with respect to Clients of the Fixed
Income Business that are Private Funds, any Private Fund whose investors (or
the relevant person or group duly authorized to act on behalf of investors in
the relevant capacity) have given the written consent to such matters related
to the transactions contemplated by this Agreement as the Purchaser requests in
order to approve and make effective such matters under the applicable
provisions of the fund documents for such Private Fund.

 

“Consenting
NB Client” means, as of any date:

 

(a)           with respect to Clients of the NB
Business that are not Funds, any Client that as of such date has provided
written consent, or is deemed to have provided so-called implied or negative
consent in accordance with Section 7.13 (or that is not required
under applicable Law or the applicable investment advisory agreement to
consent), to the assignment or deemed assignment of its investment advisory
agreement as a result of the transactions contemplated by this Agreement;

 

(b)           with respect to Clients of the NB
Business that are Public Funds, any Public Fund that as of such date (i) has
entered into a New Public Fund Investment Advisory Agreement and Other Public
Funds Agreements in accordance with Section 7.14(a) and (ii) has
obtained the shareholder approvals specified in Section 7.14(b);
and

 

(c)           with respect to Clients of the NB
Business that are Private Funds, any Private Fund whose investors (or the
relevant person or group duly authorized to act on behalf of investors in the
relevant capacity) have given the written consent to such matters related to
the transactions contemplated by this Agreement as the Purchaser requests in
order to approve and make effective such matters under the applicable
provisions of the fund documents for such Private Fund.

 

“Contract”
means any contract, agreement, release, consent, covenant, indenture, bond,
mortgage, loan, lease or license.

 

“Cure
Amounts” has the meaning set forth in Section 2.5(c).

 

11

 

“Debtors”
means Parent and any Subsidiary of Parent or any member of the Company Group
that is the subject of a proceeding under chapter 11 or chapter 7 of the
Bankruptcy Code or under SIPA at any time prior to the Closing Date.

 

“Deferred
Transfer Purchased Asset” has the meaning set forth in Section 7.22(a).

 

“Deferred
Transfer Assumed Liability” has the meaning set forth in Section 7.22(b).

 

“Departure
Percentage” means (i) the Departure Percentage Aggregate NB Revenue
Run-Rate, divided by (ii) the
Total Base Aggregate NB Revenue Run-Rate, expressed as a percentage.

 

“Departure
Percentage Aggregate NB Revenue Run-Rate” means the sum of (a) the
Base Aggregate NB Revenue Run-Rate of all Clients of Teams for which all Key
Persons or all Principal Persons are Active as of the Closing Date, plus (b) 50% of the Base
Aggregate NB Revenue Run-Rate of all Clients of Teams for which one and only
one Principal Person is Active as of the Closing Date, plus
(c) the Base Aggregate NB Revenue Run-Rate of all Clients that are not
Clients of any Team.

 

“Designation
Notice” means a notice delivered by the Purchaser, in its sole and absolute
discretion, to the Seller designating any Seller or any member of the Company Group
as an entity that will sell, assign, convey and deliver to the Purchaser the
Purchased Assets, free and clear of all Liens and Claims pursuant to sections
363 and 365 of the Bankruptcy Code in a voluntary proceeding under the
Bankruptcy Code in connection with the transactions contemplated herein, which
notice shall be delivered to Parent no earlier than forty-five (45) days after
the Execution Date and no later than sixty (60) days after the Execution Date.

 

“Documents”
means all files, documents, instruments, papers, books, reports, records,
tapes, microfilms, photographs, letters, budgets, forecasts, ledgers, journals,
title policies, customer lists, regulatory filings, operating data and plans,
technical documentation (design specifications, functional requirements,
operating instructions, logic manuals, flow charts, etc.), user documentation
(installation guides, user manuals, training materials, release notes, working
papers, etc.), marketing documentation (sales brochures, flyers, pamphlets, web
pages, etc.), and other similar material related to or necessary for the
conduct of the Business and the Purchased Assets in each case whether or not in
electronic form.

 

“EBITDA” means, with respect to any specified
fiscal period, the combined net income of the NB Business, (a) increased
by the following (in each case to the extent deducted in determining combined
net income): (i) combined income tax expense, (ii) combined interest
expense and (iii) combined depreciation and amortization expense; and (b) excluding
the following (in each case to the extent included in determining combined net
income): (i) interest income (not including the revenue 

 

12

 

associated with referral fees associated with margin debits that are
recorded as interest income), (ii) carried-interest, profit-sharing and
other performance-based income, (iii) the impact of any mark-to-market of
investments, (iv) extraordinary or non-recurring revenue items, (v) costs
and expenses that have historically been treated as shared costs (but not costs
and expenses that have historically been treated as direct charge or dedicated
allocations) allocated from Parent and its Affiliates, to the NB Business and
other members of the Company Group involved in the conduct of the NB Business
(the “Shared LEH Allocations” as referenced in Schedule 4.6) and (vii) the
Historic Adjustments as set forth on Schedule 1.1(i).

 

“EBITDA
Adjustment” means:

 

(a)           if Target EBITDA is equal to or less
than Actual EBITDA, $0; or

 

(b)           if Target EBITDA exceeds Actual
EBITDA and clause (c) is not applicable, a dollar amount equal to the
product of (i) the amount by which Target EBITDA exceeds Actual EBITDA multiplied by (ii) 7.5; or

 

(c)           if Parent validly elected in
accordance with this Agreement to cause the Estimated EBITDA Adjustment to
equal $190,000,000, $190,000,000.

 

“ERISA”
has the meaning set forth in Section 4.14(a).

 

“ERISA
Affiliate” has the meaning set forth in Section 4.14(d).

 

“Estimated Aggregate Additional Adjustment”
means (a) the sum of (i) the Estimated Closing NB Adjustment plus (ii) the Estimated EBITDA
Adjustment plus (iii) the Estimated
Other Liabilities Adjustment plus (iv) the
Estimated Closing S&P Adjustment; or (b) at the election of Parent
(which shall be delivered in writing to Purchaser no later than five Business
Days prior to Closing Date), $850,000,000.

 

“Estimated
Closing Cash” has the meaning set forth in Section 2.10(a).

 

“Estimated
Closing Cash Excess” means the positive amount, if any, by which Estimated
Closing Cash is more than the Estimated Closing Cash Target.

 

“Estimated
Closing Cash Shortfall” means the positive amount, if any, by which the
Estimated Closing Cash Target exceeds Estimated Closing Cash.

 

“Estimated
Closing Cash Target” has the meaning set forth in Section 2.10(a).

 

“Estimated
Closing NB Adjustment” means:

 

(a)           if the Preliminary Closing NB Revenue
Run-Rate Percentage equals or exceeds 100%, then $0;

 

13

 

(b)           if the Preliminary Closing NB Revenue
Run-Rate Percentage is less than 100%, but greater than or equal to 70%, a
dollar amount equal to the product of (i) 0.5 multiplied
by (ii) the difference between (A) the Total Base
Aggregate NB Revenue Run-Rate, minus (B) the
Preliminary Closing Aggregate NB Revenue Run-Rate, multiplied
by (iii) 7.5; or

 

(c)           if the Preliminary Closing NB Revenue
Run-Rate Percentage is less than 70%, a dollar amount equal to the product of (i) 0.5
multiplied by (ii) 30% of the
Total Base Aggregate NB Revenue Run-Rate, multiplied by
(iii) 7.5.

 

“Estimated
Closing S&P Adjustment” has the meaning set forth in Section 2.10(a).

 

“Estimated
EBITDA Adjustment” has the meaning set forth in Section 2.10(a).

 

“Estimated
Other Liabilities Adjustment” has the meaning set forth in Section 2.10(a).

 

“Exchange
Act” means the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder, as amended from time to time.

 

“Excluded
Assets” shall mean the following assets, properties, interests and rights of
Seller and its Subsidiaries (other than the Acquired Subsidiaries, except with
respect to clause (r) of this definition of “Excluded Assets”):

 

(a)           the
assets primarily associated with the ICG business of Parent and its Affiliates
(which provides equities and fixed income capital markets execution services to
midsized institutional clients);

 

(b)           the
assets primarily associated with the CTS business of Parent and its Affiliates
(which provides cash management services to primarily corporate clients and some
high net worth clients);

 

(c)           the
assets primarily associated with the Satori business of Parent and its
Affiliates (which provides investment advisory services to private investment
partnerships and managed accounts);

 

(d)           the
assets primarily associated with the LibertyView business of Parent and its
Affiliates (which provides investment advisory services to private investment
partnerships that use the LibertyView brand name);

 

(e)           the
assets that were sold to BarCap pursuant to that certain Asset Purchase
Agreement among Parent, Lehman Brothers Inc., LB 745 LLC and BarCap, dated as
of September 16, 2008 (as amended or modified prior to the Execution Date,
the “BarCap APA”), including the assets described in the BarCap APA
relating to the Private Investment Management business of Parent and its
Affiliates (which provides traditional 

 

14

 

brokerage and comprehensive investment, wealth advisory, trust and
capital markets execution services to high net worth individuals and
institutional clients);

 

(f)            the
equity interests in, and business conducted by, the Trust Companies; but for
the avoidance of doubt, this exclusion shall not apply to Purchased Contracts
pursuant to which the Business provides advisory or sub-advisory services to
the Trust Companies or clients of the Trust Companies;

 

(g)           the
assets primarily associated with the private equity business of Parent and its
Affiliates other than the assets associated with the Funds and related entities
set forth on Schedule 1.1(j) (the “Acquired Private Equity
Business”);

 

(h)           the
assets primarily associated with the asset management business of Parent and
its Affiliates located in Europe and Asia other than the assets of the business
segments set forth on Schedule 1.1(k);

 

(i)            [Reserved];

 

(j)            the
Hedge Fund Minority Stake Investments;

 

(k)           the
funded amount of Parent’s and/or its Affiliates’ limited partner and
side-by-side capital commitments to the Funds (which for the avoidance of
doubt, does not include funded commitments in respect of special limited
partnership interests and general partnership interests);

 

(l)            seed
capital invested in the Business’ asset management products (which shall be
returned to Seller pursuant to the terms of the relevant fund documents but
subject to the withdrawal limitations as set forth in Section 7.26);

 

(m)          any
investment by Parent or any of its Affiliates as principal in, and the funded
amount of Parent’s and or its Affiliates capital commitments as principal to,
any third-party managed funds;

 

(n)           the
shares of capital stock, limited liability company membership, general and
limited partnership, and other equity interests, of Seller and its Subsidiaries
(other than the shares of capital stock, limited liability company membership,
general and limited partnership, and other equity interests that are treated as
Purchased Assets by reason of clauses (l) and (n) of the definition
thereof);

 

(o)           the
Excluded Contracts and any accounts receivable to the extent arising out of any
Excluded Contract;

 

(p)           any
Intellectual Property Rights that do not constitute Purchased Intellectual
Property;

 

(q)           any
(i) confidential personnel and medical records pertaining to any Excluded
Employee; (ii) other books and records that Seller is required by Law to 

 

15

 

retain or that Parent reasonably determines are necessary to retain
including, without limitation, Tax Returns, financial statements, and corporate
or other entity filings; provided, however, that Purchaser shall
have the right to make copies of any portions of such retained books and
records that relate to the Business or any of the Purchased Assets; and (iii) minute
books, stock ledgers and stock certificates of Subsidiaries of the Seller the
equity interests of which are not included in the Purchased Assets;

 

(r)            any
claim, right or interest of Parent or any of its Subsidiaries (including any of
the Acquired Subsidiaries) in or to any refund, rebate, abatement, credit or
other recovery for Taxes, together with any interest due thereon or penalty
rebate arising therefrom, for any Tax period (or portion thereof) ending on or
before the Closing Date, other than any such refund, rebate, credit or other
recovery arising from or attributable to the carryback of a loss or credit from
a period ending after the Closing Date; provided, however, if it
is possible under applicable law to carry back both (i)  a loss  or credit of an Acquired Subsidiary or the
Purchaser or any Subsidiary of the Purchaser for a period ending after the
Closing Date (a “Purchaser Loss”) and (ii) any other loss or credit
(a “Seller Loss”) to the same tax period, then the Seller shall be
entitled to any refund, rebate, credit or other recovery for such period in
respect of  the Seller Loss if the Seller
Loss is required under such law to be utilized before the Purchaser Loss, and
the Purchaser shall be entitled to any refund, rebate, credit or other recovery
for such period in respect of  the
Purchaser Loss if the Purchaser Loss is required under such law to be utilized
before the Seller Loss, except  in each
case to the extent such refund, rebate, credit or other recovery previously has
been paid to the other party.

 

(s)           all
real property leases of Seller and its Subsidiaries, and all rights and
obligations appurtenant thereto, other than the Transferred Real Property
Leases;

 

(t)            if
so elected by the Purchaser in its sole and absolute discretion at any time
prior to the Closing Date, any or all of the equity interests in, or assets of,
any member of the Company Group that is the general partner or managing member
of, or the management company or investment advisor to, any Private Fund whose
investors have not approved and made effective (or approved to be made
effective in connection with the Closing), in accordance with the applicable
provisions of the fund documents of such Private Fund, such amendments to the
fund documents of such Private Fund and such other matters as the Purchaser may
propose in connection with the Closing;

 

(u)           any
margin debit balances in respect of loans advanced by the Seller or its
Subsidiaries;

 

(v)           any
deposits or prepaid charges and expenses to the extent paid in connection with
or relating to any Excluded Assets;

 

(w)          the
assets specified on Schedule 1.1(l) as being expressly set aside,
segregated or held for the purpose of satisfying the Excluded Liabilities
specified thereon;

 

16

 

(x)           any and all
assets designated as Excluded Assets by the Purchaser pursuant to Section 7.23;

 

(y)           the assets and
other properties specified on Schedule 1.1(m), which are under the
control or direction of the respective administrator, liquidator, trustee or
similar entity specified thereon;

 

(z)           all fine art
paintings and sculptures owned by any member of the Company Group;

 

(aa)         any assets
exclusively related to Excluded Liabilities described in Section 2.4(e),
(f), (g), (h), (j) and (k); and

 

(bb)        any rights,
claims, choses in action, or other causes of action, against any Person (other
than an Acquired Subsidiary), whether or not asserted or known,  based on facts existing or events occurring
in any period ending on or prior to the Closing, to the extent such rights,
claims, choses in action or other causes of action arise from or relate to any
of the foregoing or any Excluded Liabilities for which neither the Purchaser
nor any of its Subsidiaries would be liable after the Closing by operation of
law or otherwise.

 

“Excluded
Contracts” means all Contracts, arrangements or understandings, whether
written or oral, between any member of the Company Group on the one hand, and
the Seller or any of its Affiliates, on the other hand, and all Contracts of
Seller and its Subsidiaries (other than the Acquired Subsidiaries), other than the
Purchased Contracts.

 

“Excluded
Employee” has the meaning set forth in Section 7.9(a).

 

“Excluded
Liabilities” has the meaning set forth in Section 2.4.

 

“Execution
Date” has the meaning set forth in the recitals.

 

“Final Aggregate Additional Adjustment” means (a) an amount
equal to the sum of (i) the Final True-Up Date NB Adjustment plus (ii) the Final EBITDA
Adjustment plus (iii) the Final
Other Liabilities Adjustment plus (iv) the
Final S&P Adjustment; or (b) if Parent validly elected in accordance
with this Agreement to cause the Estimated Aggregate Additional Adjustment to
equal $850,000,000, an amount equal to $850,000,000.

 

“Final
Closing Cash” has the meaning set forth in Section 2.11(e).

 

“Final
Closing Cash Target” has the meaning set forth in Section 2.11(e).

 

“Final
Closing S&P Adjustment” has the meaning set forth in Section 2.11(e).

 

17

 

“Final EBITDA Adjustment” has the meaning set forth in Section 2.11(e).

 

“Final Measurement Date NB Adjustment” has the meaning set forth
in Section 2.11(e).

 

“Final Order” shall mean an Order of any court of competent
jurisdiction for which either (i) the period for the filing of a timely
appeal of such Order shall have expired and such Order is not stayed, amended
or modified without the Purchaser’s prior written consent or (ii) in the
event there are any timely filed motions for a new trial, to alter or amend the
judgment or for reconsideration or any appeals, all such motions or appeals
shall have been resolved without any reversal, vacation or modification of such
Order and the period for the filing of a timely appeal of such Order shall have
expired.

 

“Final Other Liabilities Adjustment” has the meaning set forth
in Section 2.11(e).

 

“Final True-Up Date NB Adjustment” has the meaning set forth in Section 2.11(e).

 

“Financial Information” has the meaning set forth in Section 4.6(a).

 

“Financial Statements” means the Financial Information and the
NBH Financials.

 

“FINRA” means the Financial Industry Regulatory Authority.

 

“Fixed Income Assets Under Management” means, for any Client as
of the close of business in New York on a particular measurement date, the
amount, expressed in U.S. dollars, of assets under management or assets with
respect to model portfolios by the Fixed Income Business for such Client as of
the Base Date. In calculating Fixed Income Assets Under Management for a date
that is after the Base Date, the calculation shall be:

 

(a)           adjusted
to reflect the net cash flows (i.e., additions, including, in the case of
Funds, reinvestments of distributions or dividends, and redemptions and
withdrawals, including, in the case of Funds, dividends and distributions)
after the applicable Base Date, but on or prior to the measurement date with
respect to the accounts of such Clients from and after the Base Date;

 

(b)           reduced
for accounts that, after the Base Date and on or prior to the measurement date,
are terminated or with respect to which notices of termination or indications
of an intention to terminate are received and not revoked;

 

(c)           not
adjusted for any increase or decrease in the amount of assets under management
for any Client accounts due to market appreciation or depreciation or changes
in foreign exchange rates, in each case, from and after the Base Date; and

 

18

 

(d)           not
adjusted for any increase or, with respect to the assets identified on Schedule
1.1(n), decrease after the Base Date in the amount of assets invested in
any Fund by Parent or any of its controlled Affiliates acting as principal on
its own behalf or in a fiduciary capacity on behalf of Clients where Parent or
such controlled Affiliate has investment discretion.

 

For purposes of this definition: (i) any assets under management
for any account for which the Seller or members of the Company Group act as
investment adviser and sub-adviser will be counted only once; (ii) any
assets under management for any set of accounts, one of which invests in the
other will be counted only once if members of the Company Group or the Seller
act as investment adviser to both; (iii) withdrawals and redemptions, or
indications of an intention to withdraw or redeem, shall be taken into account
when they are actually funded out of the applicable account or, if earlier and
not revoked prior to the measurement date, the date the applicable notice of
withdrawal or redemption or indication of intention to withdraw or redeem is
received, and (iv) in the case of a Person that becomes a Client after the
Base Date, or a Client that establishes a new account after the Base Date, the
adjustments described above shall be reflected from and after the date such Person
becomes a Client or such new account is established, as applicable. Notwithstanding
anything else in the Agreement to the contrary, any calculation of Fixed Income
Assets Under Management shall not include any assets under management or assets
under supervision for Free State of Saxony (Germany).

 

“Fixed Income Business” means the portion of the Business that
offers U.S. fixed income, liquidity and municipal mutual funds and WRAPs, U.S.
institutional cash, short duration and municipal products, structured products,
investment grade core and index, high yield, loans, and other fixed-income
asset management products and services other than fixed income securities
managed within, or on behalf of, the private asset management business.

 

“Fixed Income Revenue Run-Rate” means, with respect to any
Client as of any date, the aggregate annualized Management Fees payable by such
Client to the Fixed Income Business, determined by multiplying, with respect to
each account of such Client, (a) the Fixed Income Assets Under Management
for such Client as of the applicable date with respect to such account by (b) the
applicable annual fee rate (expressed as a percentage) at which such Client
pays Management Fees to the Fixed Income Business with respect to such account
as of the date of the most recent billed invoice; provided, however,
that in the case of any account of such Client of which the investment adviser
is not wholly-owned by members of the Company Group that conduct the Fixed
Income Business, the Fixed Income Revenue Run-Rate shall be calculated by
multiplying the foregoing product by the aggregate percentage participation of
the members of the Company Group that conduct the Fixed Income Business in the
revenues or income, as applicable, of such investment adviser with respect to
such account. For purposes of this definition, the “applicable annual fee rate”
for any Client account shall be adjusted if applicable to take into account any
fee waiver, cap, expense reimbursement or rebate arrangements, or any agreements
regarding reallowance of administration or sub- or co-

 

19

 

administration fees in effect as of such date
in connection with such account that have not already been taken into account
in the calculation of Fixed Income Revenue Run-Rate. The calculation of the
Fixed Income Revenue Run-Rate of any Client shall in all cases be determined
using the same methodology used to determine the Fixed Income Revenue Run-Rates
reflected in the fixed income revenue run-rate Excel file previously provided
by Parent to Purchaser.

 

“Fixed Income Revenue Run-Rate Percentage” means, as of any
given date, the Aggregate Fixed Income Revenue Run-Rate, as of such date,
divided by the Base Aggregate Fixed Income Revenue Run-Rate, expressed as a
percentage.

 

“Foreign Plan” has the meaning set forth in Section 4.14(h).

 

“Fund” means any partnership, limited liability company or other
investment vehicle to which any member of the Company Group, directly or
indirectly, provides investment advisory services or serves as the general
partner, managing member or in any similar capacity.

 

“Fund Amendments” has the meaning set forth in Section 7.4(b).

 

“Furniture and Equipment” means all furniture, fixtures,
furnishings, equipment, vehicles, leasehold improvements, and other tangible
personal property owned or used by Seller and its Subsidiaries (other than the
Acquired Subsidiaries) in the conduct of the Business, including all desks,
chairs, tables, Hardware, copiers, telephone lines and numbers, telecopy
machines and other telecommunication equipment, cubicles and miscellaneous
office furnishings and supplies.

 

“GAAP” means U.S. generally accepted accounting principles as in
effect from time to time.

 

“Governmental Body” means any government, court, regulatory,
investigative or administrative agency, commission or authority, or other
governmental instrumentality, arbitral body or Self-Regulatory Organization,
federal, state or local, domestic, foreign or multinational.

 

“Guarantees” has the meaning set forth in Section 6.7.

 

“Hardware” means any and all computer and computer-related
hardware, networks and peripherals, including but not limited to, information
and communication systems, computers, file servers, facsimile servers,
scanners, color printers, laser printers and networks.

 

“Hedge Fund Minority Stake Investments” means Parent’s and its
Affiliates’ minority stake investments in the following asset management firms,
including Parent’s and its Affiliates’ investments on a principal basis in any
such firms’ underlying managed funds: 
D.E. Shaw & Co., Ospraie Management, Spinnaker Capital, R3
Capital 

 

20

 

Partners, One William Street Capital, Field
Street Capital Management, GLG Partners, BlueBay Asset Management, Synergy and
Integrated Asset Management.

 

“Holdback Amount” means (a) if the Audited Financial
Statements have been delivered to Purchaser prior to the Closing, an amount
equal to $140,000,000 or (b) if the Audited Financial Statements have not
been delivered to Purchaser prior to the Closing, an amount equal to
$390,000,000.

 

“Holdback Release Amount” means (a) if Parent validly
elected in accordance with this Agreement to cause the Estimated Aggregate
Additional Adjustment to equal $850,000,000, the Holdback Amount or (b) if
Parent did not validly elect in accordance with this Agreement to cause the
Estimated Aggregate Additional Adjustment to equal $850,000,000, an amount
equal to the Holdback Amount minus
$140,000,000.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.

 

“Interests” has the meaning set forth in Section 4.3.

 

“Intellectual Property Licenses” means (a) any grant to a
third person of any license, immunity, a covenant not to sue or otherwise any
right to use or exploit, any of the Purchased Intellectual Property owned by
the Seller or any of its Subsidiaries, controlled by Seller or any Subsidiary
as a sublicensor, or the use or exploitation of which is otherwise controlled
by Seller or any Subsidiary; and (b) any grant to Seller or any of its
Subsidiaries of a license, immunity or covenant not to sue or otherwise any
right to exploit any Purchased Intellectual Property or other Intellectual
Property Rights by any third party.

 

“Intellectual Property Rights” means all of the rights arising
from or in respect of intellectual property rights, however denominated,
throughout the world, whether or not registered, including the following:  (a) patents, patent applications, any
reissues, reexaminations, divisionals, continuations, continuations-in-part and
extensions thereof; (b) trademarks, service marks, trade names, service
names, industrial designs or similar design rights, product configuration,
trade dress rights, Internet domain names, identifying symbols, logos, emblems,
slogans, signs, insignia, and other brand or source identifiers, as well as all
goodwill associated with the foregoing (collectively, “Marks”); (c) copyrights
and other proprietary works of authorship, and registrations and applications
therefor; (d) trade secrets, proprietary data, and other proprietary or
protected information, including data or information that any Person is
obligated to treat as proprietary through Contract, binding policies of any
trade or professional association, or other private or consensual arrangement; (e) rights
of privacy and publicity, and moral rights; and (f) all applications,
registrations, permits, claims and rights of action arising from or relating to
any of the foregoing.

 

“Investment Advisers Act” means the Investment Advisers Act of
1940 and the rules and regulations promulgated thereunder, as amended from
time to time.

 

21

 

“Investment Company Act” means the Investment Company Act of
1940 and the rules and regulations promulgated thereunder, as amended from
time to time.

 

“Investment Company Financial Statements” has the meaning set
forth in Section 4.6(b).

 

“IRS” means the United States Internal Revenue Service and, to
the extent relevant, the United States Department of Treasury.

 

“Key Person” means, with respect to a Team, each Person
designated as a “Key Person” on the Team Run Rate Schedule.

 

“Knowledge of the Company” means the actual knowledge of those
Persons identified on Schedule 1.1(o).

 

“Landlord Consent” shall mean any consent or approval from any
landlord under an underlying Transferred Real Property Lease or Subleased Real
Property Lease which is required pursuant to the terms of such Transferred Real
Property Lease or Subleased Real Property Lease in order to effectuate the
applicable assignment or sublease and/or any waivers from any landlord to the
extent that any landlord under an underlying Transferred Real Property Lease or
Subleased Real Property Lease has recapture and/or termination rights that
would be triggered by the proposed assignment or sublease.

 

“Law” means any law or statute, code, ordinance, common-law
doctrine, rule or regulation having the force of law, issued by any
Governmental Body.

 

“Legal Proceeding” means any judicial or administrative action,
suit or proceeding by or before a Governmental Body.

 

“Liability” means any debt, liability, commitment or obligation
of any kind, whether fixed, contingent or absolute, matured or unmatured,
liquidated or unliquidated, accrued or not accrued, asserted or not asserted,
known or unknown, determined, determinable or otherwise, whenever or however
arising (including, whether arising out of any Contract or tort based on
negligence or strict liability).

 

“Lehman Brothers Pension Scheme (UK)”  means
the Lehman Brothers Pension Scheme, which was established by a deed dated 15 June 1965.

 

“Lien” means any mortgage, pledge, security interest, adverse
claim, right of first refusal, option, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention agreement or lease in
the nature thereof), any sale of receivables with recourse against the Business
or their respective assets, any filing or agreement to file a financing
statement as debtor under the uniform commercial code as in effect in the State
of New York or any similar statute (other than to reflect ownership by a third
party of property leased to the Business under a lease which is not in the
nature 

 

22

 

of a conditional sale or title retention
agreement), or any subordination arrangement in favor of another Person.

 

“Loss” or “Losses” has the meaning set forth in Section 9.2.

 

“Management Fees” means any investment advisory, administration,
investment management, sponsor, subadvisory, supervisory, and similar
management or advisory fees (including custody and other fees for trust
accounts), in each case that are computed by reference to assets under
management and are payable to any member of the Company Group in respect of any
Fund or Client account, which, for the avoidance of doubt, excludes (a) Performance
Fees, (b) transaction-based fees or referral fees and (c) any
extraordinary or non-recurring revenue items.

 

“Mark(s)” has the meaning ascribed to it in the definition of
Intellectual Property Rights set forth above.

 

“Material Adverse Effect” means any change, event, occurrence or
effect that, individually or in the aggregate, has had or could reasonably be
expected to have a material adverse effect on the business, financial condition
or results of operations of the Business taken as a whole, other than any such
change, event, occurrence or effect resulting from (i) the announcement of
the execution of this Agreement and of the transactions contemplated hereby
(including the impact on customers and employees), (ii) changes after the
Execution Date in the United States or world economy or in United States or
global financial market conditions (including changes in interest rates or
prices of securities generally), (iii) changes after the Execution Date in
general political conditions in the United States or worldwide, (iv) changes
in legal or regulatory conditions to the extent generally affecting the
investment advisory and asset management industry, (v) any failure to meet
forecasts or projections, in and of itself (as opposed to the facts and
circumstances underlying any such failure, which will not be  excluded), (vi) the commencement of any
Bankruptcy Case at the written request of the Purchaser, (vii) any
decrease in the S&P 500 Index and (viii) any matter for which an
adjustment to the Base Purchase Price would be made pursuant to this Agreement
(to the extent of such adjustment); provided, however, that
changes, events, occurrences and effects resulting from items (ii), (iii) and
(iv) will only be excluded if they do not have a disproportionate effect
on the Business relative to other businesses in the investment advisory and
asset management industries.

 

“Material Contracts” has the meaning set forth in Section 4.13(a).

 

“Measurement Date” means a day selected by the Purchaser as the
Measurement Date by notice to the Parent no later than the opening of trading
on the New York Stock Exchange on such day, which day may be the True-Up Date
or a day that is 15, 30, 45, 60, 75, 90, 105 or 120 days after the True-Up Date
(or, if any such day is not a Business Day, the first Business Day after such
day); provided, however, that if the Purchaser does not make such
a selection, then the Measurement Date shall be the 

 

23

 

date that is 120 days after the True-Up Date
(or, if such day is not a Business Day, the first Business Day after such day).

 

“Measurement Date Aggregate NB Revenue Run-Rate” means the sum
of (a) the aggregate NB Revenue Run-Rate, calculated in each case as of
the close of business in New York on the Measurement Date, of all Consenting NB
Clients of Teams for which any Key Person or one or more Principal Persons was
not Active as of either the Closing Date or the True-Up Date, plus (b) the aggregate NB
Revenue Run-Rate, calculated as of the close of business in New York on the
True Up Date, of (i) all Consenting NB Clients of Teams for which all Key
Persons and all Principal Persons were Active on both the Closing Date and the
True-Up Date and (ii) all Consenting NB Clients that are not Clients of
any Team; provided, however, that the aggregate NB Revenue
Run-Rate shall be $0 for all Consenting NB Clients of Non-Term Sheet Teams for
which any Key Person is, or both Principal Persons are, not Active at the
Closing Date and not Active at the Measurement Date.

 

“Measurement Date Holdback Amount” means an amount equal to the
Holdback Amount minus the
Holdback Release Amount.

 

“Measurement Date NB Adjustment” means:

 

(a)           if the Measurement Date NB Revenue Run-Rate
Percentage equals or exceeds 100%, then $0;

 

(b)           if the Measurement Date NB Revenue Run-Rate
Percentage is less than 100%, but greater than or equal to 70%, a dollar amount
equal to the product of (i) 0.5 multiplied by
(ii) the difference between (A) the Total Base Aggregate NB Revenue
Run-Rate minus (B) the Measurement Date
Aggregate NB Revenue Run-Rate multiplied by
(iii) 7.5; or

 

(c)           if the Measurement Date NB Revenue Run-Rate
Percentage is less than 70%, a dollar amount equal to the product of (i) 0.5
multiplied by (i) 30% of the
Total Base Aggregate NB Revenue Run-Rate multiplied by
(iii) 7.5.

 

“Measurement Date NB Revenue Run-Rate Percentage” means the
Measurement Date Aggregate NB Revenue Run-Rate, divided
by the Total Base Aggregate NB Revenue Run-Rate, expressed as a
percentage.

 

“Measurement Date Schedule” has the meaning set forth in Section 2.11(c).

 

“Measurement Date Schedule Calculation” has the meaning set
forth in Section 2.11(c).

 

“NB Adjusted Assets Under Management” means, for any Client as
of the close of business in New York on a particular measurement date, the
amount, expressed 

 

24

 

in U.S. dollars, of assets under management
or other assets with respect to model portfolios by the NB Business for that
Client as of the Base Date. In calculating NB Adjusted Assets Under Management
for a date that is after the Base Date, the calculation shall be:

 

(a)           adjusted
to reflect the net cash flows (i.e., additions, including, in the case of
Funds, reinvestments of distributions or dividends, and redemptions and
withdrawals, including, in the case of Funds, dividends and distributions)
after the Base Date and on or prior to the measurement date with respect to the
accounts of such Clients;

 

(b)           reduced
for accounts that, after the Base Date and on or prior to the measurement date,
are terminated or with respect to which notices of termination or indications
of an intent to terminate are received and not revoked;

 

(c)           not
adjusted for any increase or decrease in the amount of assets under management
for any Client due to market appreciation or depreciation or currency fluctuations,
in each case, from and after the Base Date; and

 

(d)           not
adjusted for any increase or, with respect to the assets identified on Schedule
1.1(p), decrease after the Base Date in the amount of assets invested in
any Fund by Parent or any of its controlled Affiliates acting as principal on
its own behalf or in a fiduciary capacity on behalf of Clients where Parent or
such controlled Affiliate has investment discretion.

 

For purposes of this definition: (i) any assets under management
for any Client account for which the Seller or members of the Company Group act
as investment adviser and sub-adviser will be counted only once; (ii) any
assets under management for any set of Client accounts, one of which invests in
the other will be counted only once if members of the Company Group or the
Seller act as investment advisor to both; (iii) withdrawals and
redemptions, or indications of an intention to withdraw or redeem, shall be
taken into account when they are actually funded out of the applicable account
or, if earlier and not revoked prior to the measurement date, the date the
applicable notice of withdrawal or redemption or indication of intention to
withdraw or redeem is received; provided that transfers from one Fund
associated with the Business to another Fund associated with the Business will
be considered to have taken place on the date such transfer is credited to the
transferee Fund; and (iv) in the case of a Person that becomes a Client
after the Base Date, or a Client that establishes a new account after the Base
Date, the adjustments described above shall be reflected from and after the
date such Person becomes a Client or such new account is established, as
applicable.

 

“NB Business” means the portion of the Business that is the
private asset management business (including relevant fixed income securities
managed within, or on behalf of, the private asset management business),
equities mutual fund, equities closed end fund, equities sub-advised fund,
equities WRAP (Managed Account Group and model portfolio assets), equities
global balanced portfolio, and the equities institutional 

 

25

 

separate accounts businesses. The NB Business
does not include the Fixed Income Business.

 

“NB Business Financial Information” has the meaning set forth in
Section 4.6(a).

 

“NB Revenue Run-Rate” means, with respect to any Client as of
any date, the aggregate annualized Management Fees payable by such Client to
the NB Business, determined by multiplying, with respect to each account of
such Client, (a) the NB Adjusted Assets Under Management for such Client
as of the applicable date with respect to such account by (b) the
applicable annual fee rate (expressed as a percentage) at which such Client
pays Management Fees to the NB Business with respect to such account as of the
then most recent billed invoice; provided, however, that in the
case of any Client account of which the investment adviser is not wholly-owned
by one or more members of the Company Group that conduct the NB Business, NB
Revenue Run-Rate shall be calculated by multiplying the foregoing product by
the aggregate percentage participation of the members of the Company Group in
the revenues or income, as applicable, of such investment adviser with respect
to such Client account. For purposes of this definition, the “applicable annual
fee rate” for any Client account shall be adjusted if applicable to take into
account any fee waiver, cap, expense reimbursement or rebate arrangements, or
any agreements regarding reallowance of administration or sub- or
co-administration fees in effect as of such date in connection with such Client
account. As of any date after the Base Date, NB Revenue Run-Rate of any Client
will be reduced to give effect to any known reduction in the Management Fees
related to assets under management for which the Trust Companies provide trust
services (even if such reduction has yet to become effective). The calculation
of the NB Revenue Run-Rate of any Client shall in all cases be determined using
the same methodology used to determine the NB Revenue Run-Rates reflected in
the NB revenue run-rate Excel file previously provided to Purchaser.

 

“New Debtor” has meaning set forth in Section 7.25(g).

 

“NBH Financials” has the meaning set forth in Section 4.6(a).

 

“New Public Fund Investment Advisory Agreement” has the meaning
set forth in Section 7.14(a).

 

“Non-exclusive Intellectual Property Rights” has the meaning set
forth in Section 2.6(e).

 

“Non-Term Sheet Team” means any Team that is not a Term Sheet
Team.

 

“OCC” has the meaning set forth in Section 2.4(q).

 

“Offeree” has the meaning set forth in Section 7.9(a).

 

26

 

“Order” means any order, injunction, judgment, decree or ruling
of a Governmental Body.

 

“Original Purchase Agreement” has the meaning set forth in the
recitals.

 

“Other Public Fund Agreements” has the meaning set forth in Section 7.14(a).

 

“Parent” has the meaning set forth in the preamble.

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pensions Regulator” means the Pensions Regulator established
under section 1 of the UK Pensions Act.

 

“Performance Fees” means any carried-interest, incentive or
other fees based on investment-performance.

 

“Permits” means any approvals, authorizations, consents,
licenses, permits, registrations or certificates of  a Governmental Body.

 

“Permitted Exceptions” means (i) statutory liens for Taxes,
assessments or other governmental charges not yet delinquent or the amount or
validity of which is being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established in accordance with
GAAP, (ii) mechanics’, carriers’, workers’, repairers’, landlords’,
warehouse and similar Liens arising or incurred in the ordinary course of
business not yet delinquent, (iii) zoning, entitlement and other land use
and environmental regulations by any Governmental Body, (iv) the title and
rights of lessors, lessees, licensors and licensees, as applicable, under
leases and licenses executed in the ordinary course of business, (v) all
defects, exceptions, restrictions, easements, rights of way and encumbrances
disclosed in any policies of title insurance made available to the Purchaser
and (vi) other imperfections in title, charges, easements, restrictions
and encumbrances which do not impair in any material respect the existing use
of the related assets in the Business currently conducted.

 

“Person” means any individual, corporation, limited liability
company, general partnership, limited partnership, trust, Governmental Body or
other entity.

 

“Post-Closing Straddle Period” has the meaning set forth in the
definition of “Seller Taxes”.

 

“PPF” means the Board of the Pension Protection Fund established
under section 107 of the UK Pensions Act.

 

“Pre-Closing Straddle Period” has the meaning set forth in the
definition of “Seller Taxes”.

 

27

 

“Preliminary Calculation Date” means the date that is ten (10) calendar
days prior to the Closing Date; provided that if such date is not a
Business Day, the Business Day immediately preceding such date.

 

“Preliminary Closing Aggregate NB Revenue Run-Rate” means the
sum of the aggregate NB Revenue Run-Rate, calculated, in each case, as of the
close of business in New York on the Preliminary Calculation Date, of (a) all
Consenting NB Clients of Term Sheet Teams as of such date, plus
(b) all Consenting NB Clients of Non-Term Sheet Teams for which all Key
Persons are, or at least one Principal Person is, Active on the Closing Date, plus (c) all Consenting NB
Clients that are not Clients of any Team.

 

“Preliminary Closing NB Revenue Run-Rate Percentage” means the
Preliminary Closing Aggregate NB Revenue Run-Rate, divided
by the Total Base Aggregate NB Revenue Run-Rate, expressed as a
percentage.

 

“Principal Person” means, with respect to a Team, each Person
designated as a “Principal Person” on the Team Run Rate Schedule.

 

“Private Fund” means any Fund other than a Public Fund.

 

“Public Fund” means any Fund, the interests in which are
publicly offered and that is registered or required to be registered with the
SEC as an investment company under the Investment Company Act.

 

“Purchase Price” has the meaning set forth in Section 2.8.

 

“Purchased Assets” means, subject to Section 7.23,
all of the assets of Seller and its Subsidiaries (other than the Acquired
Subsidiaries) owned, held or used primarily in connection with the Business
(other than the Excluded Assets), including;

 

(a)           all Cash;

 

(b)           all deposits (including customer deposits,
security deposits for rent, electricity, telephone or otherwise and required
capital deposits), escrowed funds for Assumed Liabilities and prepaid charges
and expenses of the Seller and such Subsidiaries associated with the Business;

 

(c)           the Transferred Real Property Leases,
together with all improvements, fixtures and other appurtenances thereto and
right in respect thereof;

 

(d)           the Furniture and Equipment;

 

(e)           the Purchased Intellectual Property and all
income, royalties, damages and payments due or payable at the Closing or
thereafter relating to the Purchased Intellectual Property (including damages
and payments for past or future infringements or misappropriations thereof),
the right to register, prosecute, maintain and 

 

28

 

defend the Purchased Intellectual Property before any public or private
agency or registrar, the right to sue and recover damages for past of future
infringements or misappropriations thereof and the right to fully and entirely
stand in the place of the Seller or any such Subsidiaries in all matters
related thereto;

 

(f)            the Purchased Contracts;

 

(g)           all Documents that are used in, held for use
in or intended to be used in, or that arise in connection with, or are
necessary to carry on or are related to the operation of the Business,
including documents relating to products, services, marketing, advertising,
promotional materials, Purchased Intellectual Property, personnel files for
Transferred Employees and all files, customer files and documents (including
credit information), account agreements, books and records required to be
maintained in connection with the Business under applicable Law, compliance
manuals, supervisory policies and procedures, customer lists, supplier lists,
records, literature, and correspondence, whether or not physically located on
any of the premises referred to in clause (c) above, but excluding (i) personnel
files for Excluded Employees of Seller or such Subsidiaries who are not
Transferred Employees, (ii) such files as may be required under applicable
Law regarding privacy, (iii) Documents which Seller or any such Subsidiary
is not permitted to transfer pursuant to any contractual confidentiality
obligation owed to any third party, and (iv) any Documents primarily
related to any Excluded Assets;

 

(h)           all books and records of the Business, which
shall include (i) all account statements and all worksheets and other
documentation necessary to demonstrate the calculation of the performance or
rate of return of each Client account, as required by applicable Law, including
(x) Rule 204-2(a) (16) under the Investment Advisers Act, (y) Rule 482
under the Securities Act, and (z) as otherwise required by the SEC or
FINRA or the staffs thereof, and (ii) all other book and records of the
Business required to be maintained under applicable Law, including Rule 204-2
under the Investment Advisers Act;

 

(i)            all Permits used by Seller or any of such
Subsidiaries in the Business to the extent assignable under applicable Law;

 

(j)            all supplies owned by Seller or any of such
Subsidiaries and used in connection with the Business;

 

(k)           all rights of the Seller or any of such
Subsidiaries under non-disclosure, confidentiality, non-compete or
non-solicitation agreements with employees, contractors and agents of Seller or
any of such Subsidiaries or with third parties to the extent relating to the
Business, the Bidding Procedures or the Purchased Assets (or any portion
thereof);

 

(l)            all of the Interests;

 

29

 

(m)          all avoidance actions and similar rights and
causes of action, including causes of action under Sections 544 through 553 of
the Bankruptcy Code, against any of the Acquired Subsidiaries or the Purchaser,
any of its Affiliates or any portfolio company of any direct or indirect equity
holder of the Purchaser or any of its Affiliates;

 

(n)           without duplication of any other Purchased
Assets, any or all of the equity interests in, or assets of, any direct or
indirect Subsidiary of Seller that the Seller and Purchaser may mutually agree
on or prior to the entry of the Sale Order (in which case such Subsidiary will
thereafter be considered an Acquired Subsidiary for all purposes of this
Agreement);

 

(o)           all past and present goodwill and other
intangible assets associated with or symbolized by the Business, including
customer and supplier lists and the goodwill associated with the Purchased
Intellectual Property;

 

(p)           any insurance proceeds or rights to
insurance proceeds from the occurrence of any casualty or event with respect to
any Purchased Asset except to the extent such proceeds are in respect of an
Excluded Liability or any amount paid by Seller prior to the Closing;

 

(q)           the assets primarily used in connection with
the portion of the business of Parent and its Affiliates that manages, advises
and operates the China Long-Short Fund;

 

(r)            a non-exclusive sub-license to Parent’s
rights under Section 8.9 of the BarCap APA with respect to use of the
LEHMAN and LEHMAN BROTHERS names, and any logos or Marks containing such terms
and common variations thereof, in the Business and other non-Mark Intellectual
Property Rights used in or covering such Business, but only to the extent such
rights relate to the Business;

 

(s)           Parent’s rights under the Transition
Services Agreement between Parent and BarCap dated as of September 20,
2008 (the “BarCap TSA”) as they relate to services provided to the
Business;

 

(t)            the general partner and special limited
partner interests in the Funds included in the Business;

 

(u)           any rights, claims, choses in action, or
other causes of action, against third parties, whether or not asserted or known,
existing as of the Closing that arise from or relate to any of the foregoing;

 

(v)           the Acquired Private Equity Business;

 

(w)          property and liability insurance policies,
including any fidelity, crime surety or other similar bonds that are primarily
associated with the Business, but 

 

30

 

only to the extent permitted by the terms of such policy; provided,
however, any right to bring claims in connection with events prior to
the Closing under such claims made insurance policies that relate to Excluded
Liabilities shall not be a Purchased Asset; and

 

(x)            all track record and related historical
performance data related to the Business.

 

“Purchased Contracts” has the meaning set forth in Section 2.5(a).

 

“Purchased Intellectual Property” means the Purchased Marks and
all other Intellectual Property Rights, Software and Technology throughout the
world that are used in, related to, or otherwise necessary for the Business,
including all Intellectual Property Rights that are owned by the Seller and its
Subsidiaries (other than the Acquired Subsidiaries), used by the Seller or any
such Subsidiary pursuant to transferable license interests, or are otherwise
sublicensable or transferable by the Seller or any such Subsidiary to
Purchaser, that are embodied in or arise from the Purchased Assets (in each
case subject to Section 2.6(c)).

 

“Purchased Interests” has the meaning set forth in Section 6.5.

 

“Purchased Marks” means the following:  (i) the NEUBERGER
BERMAN brand, including all Marks incorporating the brand or
embodying the goodwill associated with the brand, and any variation or version
thereof, whether or not registered, throughout the world; (ii) subject to
the terms of the BarCap APA, all other Marks throughout the world that are used
in, related to, or otherwise necessary for the Business, including Marks used
in the Business pursuant to license, to the extent such license interests are
transferable; (iii) all goodwill arising from or associated with the
foregoing; (iv) all documents and materials (in any media format) bearing
or embodying the foregoing; (v) all rights, claims, and causes of action
arising from or relating to the foregoing.

 

“Purchaser” has the meaning set forth in the preamble.

 

“Purchaser Documents” has the meaning set forth in Section 6.2.

 

“Referee” has the meaning set forth in Section 2.11(d).

 

“Related Contract” means all Contracts of the Seller and its
Subsidiaries (other than the Acquired Subsidiaries) primarily related to the
conduct of the Business.

 

“Relevant Transaction” has the meaning given in Section 7.9(f).

 

“Registered Intellectual Property” has the meaning set forth in Section 4.12(a).

 

“Reimbursement Amount” means the reasonable out-of-pocket fees,
costs and expenses of the Purchaser and its Affiliates (including fees, costs
and expenses of counsel and any other professionals retained by the Purchaser
or its Affiliates) in 

 

31

 

connection with the transactions contemplated
by this Agreement, the negotiation, investigation, preparation, execution and
delivery of this Agreement and any related agreements, documents and pleadings,
or the Bankruptcy Case, or any other attempted acquisition of all or part of
the Business, including any fees, costs and expenses incurred in connection
with litigation, contested matters, adversary proceedings or negotiations
necessitated by any proceedings relating to the foregoing, in an amount not to
exceed an aggregate of $35,000,000 which shall be paid as set forth in Section 3.5
hereof.

 

“Representatives” means, with respect to any Person, any
authorized officers, directors, employees, managers, partners, investment
bankers, financial advisors, attorneys, accountants, consultants or other
agents or representatives of such Person.

 

“Residual Intellectual Property Rights” has the meaning set
forth in Section 2.6(d).

 

“Retention Arrangements” means any agreements, plans or other
documents establishing an employee retention program established by the
Purchaser with respect to the transactions contemplated by this Agreement and
the operation of the Business by the Purchaser after the Closing.

 

“S&P Percentage” means 100%, minus
the higher of (i) the closing price of the S&P 500 Index for the day
on which the Bid Procedures Order is entered (or, if such day is not a trading
day, the first trading day after such day) divided by 1202.77, expressed as a
percentage, or (ii) the average closing price of the S&P 500 Index for
the three consecutive full trading days immediately preceding the Closing Date
divided by 1202.77, expressed as a percentage.

 

“Sale Hearing” means the hearing of the Bankruptcy Court to
consider approval of the Sale Order.

 

“Sale Motion” means the motion or motions of the Seller, in form
and substance reasonably satisfactory to the Purchaser and the Seller, seeking
approval of the  Bid Procedures Order and
Sale Order.

 

“Sale Order” means an Order of the Bankruptcy Court,
substantially in the form attached as Exhibit B to this Agreement,
that, among other things, approves the entry into this Agreement and the
Ancillary Agreements by each member of the Company Group that becomes subject
to the Bankruptcy Case.

 

“Sale Proposal” means any proposal or offer from any Person or “group”
(as defined in Section 13(d) of the Exchange Act), other than the
Purchaser and its Affiliates, relating to any acquisition (whether in a single
transaction or a series of related transactions) of all or any portion of the
Business.

 

32

 

“Schedules” means the schedules delivered by the parties hereto,
as applicable, on the Execution Date in connection with the execution and
delivery of the Original Purchase Agreement.

 

“SEC” has the meaning set forth in Section 4.17(f).

 

“Securities Act” has the meaning set forth in Section 6.5.

 

“Self-Regulatory Organization” means any domestic or foreign
securities exchange, commodities exchange, registered securities association,
the Municipal Securities Rulemaking Board, National Futures Association, or any
domestic or foreign clearing corporation, securities depository or contract
market on which any member of the Company Group does business.

 

“Seller” has the meaning set forth in the preamble.

 

“Seller Documents” has the meaning set forth in Section 5.2.

 

“Seller Taxes” means (i) any and all Taxes imposed on the
Purchaser (solely to the extent attributable to the Purchased Assets or any
Acquired Subsidiary), the Purchased Assets or any Acquired Subsidiary for
taxable periods ending on or before the Closing Date and for Pre-Closing
Straddle Periods, (ii) any Loss arising or resulting from a breach or
inaccuracy of the representations and warranties set forth in Section 4.9(c)(ii) or
Section 4.9(h) as such representations would read if “three
years” were replaced with “ten years” or a breach of the covenants set forth in
Section 7.2(xi) or Section 7.10, (iii) any and all
Taxes of any member of a consolidated, combined, or unitary group of which any
Acquired Subsidiary (or any predecessor thereof) is or was a member of on or
prior to the Closing Date, by reason of the liability of such Acquired
Subsidiary  (or any predecessor thereof)
pursuant to Treasury Regulation Section 1.1502-6(a) (or any
predecessor or successor thereof or any analogous or similar provision under
state, local, or foreign Tax Law), and (iv) any and all Taxes of any
Person imposed on any Purchased Asset or Acquired Subsidiary as a transferee or
successor, by contract or pursuant to any law, rule or regulation, which
Taxes relate to an event or transaction occurring before the Closing.

 

In the case of any taxable period that includes (but does not end on)
the Closing Date (a “Straddle Period”), the amount of Taxes imposed on
the Purchaser, the Purchased Assets or any Acquired Subsidiaries, as
applicable, for such Straddle Period shall be allocated between the portion of
the Straddle Period ending on, and including, the Closing Date (the “Pre-Closing
Straddle Period”) and the portion of the Straddle Period beginning after
the Closing Date (the “Post-Closing Straddle Period”). The amount of
Taxes imposed on the Purchaser, the Purchased Assets or any Acquired
Subsidiaries for any Straddle Period that is based on or measured by income or
receipts and any employment Taxes, withholding Taxes and sale or use Taxes
shall be allocated between the Pre-Closing Straddle Period and the Post-Closing
Straddle Period based on an interim closing of the books as of the close of
business on the Closing Date (provided 

 

33

 

that, with respect to any Acquired Subsidiary
that is a tax-paying entity in a particular Tax jurisdiction (other than a
jurisdiction in which the transactions contemplated by this Agreement result in
an adjustment to the basis of the assets of such Acquired Subsidiary), in
calculating the Tax liability of such Acquired Subsidiary in such Tax
jurisdiction, depreciation and amortization deductions for such Acquired
Subsidiary shall be allocated between the Pre-Closing Straddle Period and the
Post-Closing Straddle Period in proportion to the number of days in each such
period), and the amount of other Taxes imposed on the Purchaser, the Purchased
Assets or any Acquired Subsidiaries for any Straddle Period shall be allocated
to the Pre-Closing Straddle Period and the Post-Closing Straddle Period in
proportion to the number of days in each such period.

 

“Seller Termination Fee” means $70,000,000.

 

“Services” has the meaning set forth in Section 7.32(a).

 

“SIPA” means the Securities Investor Protection Act (as
amended).

 

“SIPC” means the Securities Investor Protection Corporation.

 

“SIPC Trustee” has the meaning set forth in Section 7.25(h).

 

“Software” means any and all (i) computer programs
including any and all software implementations of algorithms, models and
methodologies and application programming interfaces, whether in source code or
object code, (ii) databases and compilations, including any and all data
and collections of data, whether machine readable or otherwise, (iii) descriptions,
flow charts and other work product used to design, plan, organize and develop
any of the foregoing, screen displays, user interfaces, report formats,
firmware, development tools, templates, menus, buttons and icons, and (iv) all
software-related specifications documentation including user manuals and other
training documentation related to the foregoing.

 

“Solicitation Period” has the meaning set forth in Section 7.20(b).

 

“Sponsor” means each of Hellman & Friedman Capital
Partners VI, L.P. and Bain Capital Fund X, L.P.

 

“Straddle Period” has the meaning set forth in the definition of
“Seller Taxes”.

 

“Sublease” has the meaning set forth in Section 7.19(b).

 

“Subleased Real Property Leases” means the real property leases
listed on Schedule 1.1(q).

 

“Subsidiary” means with respect to any Person, any corporation,
limited liability company, partnership, trust or other entity of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary 

 

34

 

voting power (or, in the case of a
partnership, limited liability company or other similar entity, more than 50%
of the general partnership, managing member or similar interests) are owned,
directly or indirectly, by such Person. For the avoidance of doubt, no Fund
shall be deemed to be a Subsidiary for purposes of this Agreement.

 

“Successful Bidder” has the meaning ascribed to it in the Bid
Procedures Order.

 

“Target EBITDA” means $374,000,000.

 

“Tax” or “Taxes” means (i) all federal, state, local
or foreign taxes, charges, fees, imposts, levies or other assessments,
including all net income, gross receipts, capital, sales, use, ad valorem,
value added, transfer, franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security (or similar, including FICA),
unemployment, excise, severance, premium, escheat, windfall profits,
environmental, disability, registration, alternative or add-on minimum, stamp,
occupation, property and estimated taxes, customs duties, fees, assessments and
charges of any kind whatsoever, (ii) all interest, penalties, fines,
additions to tax or additional amounts imposed by any Taxing Authority in
connection with any item described in clause (i), whether or not disputed, and (iii) any
obligations to indemnify or otherwise assume or succeed to liability for items
in (i) or (ii) of any other Person.

 

“Taxing Authority” means the IRS and any other Governmental Body
responsible for the administration of any Tax.

 

“Tax Return” means any declaration, return, report or statement
required to be filed with respect to any Tax (including any attachments
thereto, and any amendment thereof), including any information return, claim
for refund, amended return or declaration of estimated Tax, and including,
where permitted or required, combined, consolidated or unitary returns for any
group of entities that includes the Seller or any of its subsidiaries.

 

“Tax Statement” has the meaning set forth in Section 7.10(a).

 

“Team” means each team of investment professionals employed in
the NB Business, as set forth on the Team Run Rate Schedule.

 

“Team Run Rate Schedule” means the schedule allocating the Total
Base Aggregate NB Revenue Run-Rate among Teams (except for the portion indicated
thereon as being allocated to “All other teams”), which was delivered to the
Purchaser substantially contemporaneously with the execution and delivery of
this Amended and Restated Purchase Agreement and was based on the NB revenue
run-rate and team allocation Excel files that were also delivered to the
Purchaser substantially contemporaneously with the execution and delivery of
this Amended and Restated Purchase Agreement.

 

35

 

“Technology” means, collectively, all designs, formulae,
algorithms, procedures, methods, techniques, ideas, know-how, business and
marketing information, research and development, technical data, programs,
subroutines, tools, materials, specifications, processes, inventions (whether patentable
or unpatentable and whether or not reduced to practice), apparatus, creations,
improvements, works of authorship and other similar materials, non-public or
confidential information, and all recordings, graphs, drawings, reports,
analyses, and other writings, and other tangible embodiments of the foregoing,
in any form whether or not specifically listed herein, and all related
technology.

 

“Term Sheet Team” means any Team designated as a “Term Sheet
Team” on the Team Run Rate Schedule.

 

“Termination Date” has the meaning set forth in Section 3.3(b).

 

“Total Base Aggregate NB Revenue Run-Rate” means $897,700,000,
which is the sum of the aggregate NB Revenue Run-Rates for all Clients as
presented on Schedule 1.1(b), which was prepared from the NB revenue
run-rate Excel file previously provided to the Purchaser, which file sets forth
the aggregate NB Revenue Run-Rate of all Clients calculated as of the close of
business in New York on the Base Date.

 

“Total Business Financial Information” has the meaning set forth
in Section 4.6(a).

 

“Transfer Taxes” has the meaning set forth in Section 10.1.

 

“Transferred Employee” has the meaning set forth in Section 7.9(a).

 

“Transferred Real Property Leases” means the real property
leases listed on Schedule 1.1(r) and any other real property leases
designated as Purchased Contracts pursuant to Section 2.5.

 

“Transition Period” has the meaning set forth in Section 7.32(a).

 

“Transition Services Agreements” means (a) the BarCap TSA
and (b) one or more transition services agreements to be entered into on
or prior to the Closing Date among some or all of the Purchaser and the members
of the Company Group, on the one hand, and the Seller or certain of its
Affiliates, on the other hand.

 

“Treasury Regulations” means the Income Tax Regulations
promulgated under the Code, as amended.

 

“True-Up Date” means the later of (a) the six-month
anniversary of the date the Bid Procedures Order is entered (or if such
anniversary date is not a Business Day, the first Business Day after such
anniversary date) and (b) the two month anniversary of the Closing Date
(or if such anniversary date is not a Business Day, the first Business Day
after such anniversary date).

 

36

 

“True Up Date Aggregate NB Revenue Run-Rate” means the sum of
the aggregate NB Revenue Run-Rate, calculated in each case as of the close of
business in New York on the True Up Date, of (a) all Consenting NB Clients
of Term Sheet Teams as of such date, plus (b) all
Consenting NB Clients of Non-Term Sheet Teams for which all Key Persons are, or
at least one Principal Person is, Active on the Closing Date or the True-Up
Date, plus (c) all Consenting NB
Clients that are not Clients of any Team.

 

“True Up Date Aggregate NB Revenue Run-Rate Percentage” means
the True Up Date Aggregate NB Revenue Run-Rate, divided
by the Total Base Aggregate NB Revenue Run-Rate, expressed as a
percentage.

 

“True Up Date NB Adjustment” means:

 

(a)           if the True Up Date Aggregate NB Revenue
Run-Rate Percentage equals or exceeds 100%, then $0;

 

(b)           if the True Up Date Aggregate NB Revenue
Run-Rate Percentage is less than 100%, but greater than or equal to 70%, a
dollar amount equal to the product of (i) 0.5 multiplied
by (ii) the difference between (A) the Total Base
Aggregate NB Revenue Run-Rate, minus (B) the
True Up Aggregate NB Revenue Run-Rate, multiplied by
(iii) 7.5; or

 

(c)           if the True Up Date Aggregate NB Revenue
Run-Rate Percentage is less than 70%, a dollar amount equal to the product of (i) 0.5
multiplied by (ii) 30% of the
Total Base Aggregate NB Revenue Run-Rate multiplied by
(ii) 7.5.

 

“Trust Companies” means Lehman Brothers Trust Company of
Delaware and Lehman Brothers Trust Company, N.A.

 

“UK Pensions Act” means the Pensions Act 2004.

 

1.2           Other Definitional
and Interpretive Matters.

 

Unless otherwise expressly
provided, for purposes of this Agreement, the following rules of
interpretation shall apply:

 

Including. The word “including” or any
variation thereof means (unless the context of its usage otherwise requires) “including,
without limitation,” and shall not be construed to limit any general statement
that it follows to the specific or similar items or matters immediately
following it.

 

Interpretation. All references to the “Business”
or the “business” or “businesses” of the Companies and their Subsidiaries shall
be interpreted for all purposes to exclude any and all Excluded Assets and
Excluded Liabilities.

 

37

 

Effectiveness. This Agreement amends and
restates the Original Purchase Agreement in its entirety, with effect from the
execution and delivery of the Original Purchase Agreement on the Execution
Date.

 

ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

 

2.1           Purchase and Sale of
Assets. On the terms and subject to the conditions set forth in this
Agreement, at the Closing (as defined below), the Purchaser shall purchase,
acquire and accept (or cause one or more of its Subsidiaries to purchase,
acquire and accept) from the Seller and its Subsidiaries, and the Seller shall
sell, transfer, assign, convey and deliver (or cause to be sold, transferred,
assigned, conveyed and delivered) to Purchaser or one or more of its
Subsidiaries, all of Seller’s and its applicable Subsidiaries’ right, title and
interest in, to and under the Purchased Assets, free and clear of all Claims
and Liens, subject to Section 7.16 and Permitted Exceptions, to the
extent applicable pursuant to section 363(f) and section 365 of the
Bankruptcy Code.

 

2.2           Excluded Assets.
Nothing herein contained shall be deemed to sell, transfer, assign or convey
any Excluded Assets to Purchaser or any of its Subsidiaries, and Seller
(directly and indirectly) shall retain all right, title and interest to, in and
under the Excluded Assets.

 

2.3           Assumption of
Liabilities. On the terms, and subject to the conditions, set forth in this
Agreement, at the Closing, the relevant Subsidiary of the Purchaser to which
the Purchaser has assigned the right to purchase assets of an entity that is a
member of the Seller pursuant to Section 10.5 (or, if the Purchaser
has made no such assignment, the Purchaser) shall assume, effective as of the
Closing, and shall timely perform and discharge in accordance with their
respective terms, the following Liabilities of such entity that is a member of
the Seller (collectively, the “Assumed Liabilities”):

 

(a)           all Liabilities
incurred after the Closing Date in connection with the ownership or operation
of the Business, in each case to the extent based on facts and circumstances
first arising after the Closing;

 

(b)           all Liabilities under
the Purchased Contracts, in each case to the extent based on facts and
circumstances first arising after the Closing;

 

(c)           all Liabilities assumed
under Section 7.9;

 

(d)           50% of all Transfer
Taxes to the extent provided in Section 10.1;

 

(e)           all Liabilities under
Transferred Real Property Leases, in each case to the extent based on facts and
circumstances first arising after the Closing;

 

38

 

(f)            Liabilities under the
BarCap APA arising from the exploitation or use after the Closing Date by the
Purchaser or its Subsidiaries after the Closing Date of the LEHMAN and LEHMAN
BROTHERS names and any logos containing such names in the Business and other
non-Mark intellectual property used after the Closing Date in or covering such
Business;

 

(g)           Liabilities under the
BarCap TSA arising from the Purchaser’s or its Subsidiaries’ receipt or use
after the Closing Date of services provided thereunder as well as the
obligations as an assignee in part of the BarCap TSA to provide services
thereunder and otherwise comply with the applicable terms of that agreement
from and after the Closing Date;

 

(h)           the unfunded amount of
the Parent’s or its Affiliates’ general partner or special limited partner
capital commitments associated with the Funds that are included in the Business
for periods commencing after the Closing Date;

 

(i)            all Liabilities
described in clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and (a)(v) of
the definition of “Closing Cash Target” to the extent such Liabilities are
taken into account in determining the Final Closing Cash Target and all
Liabilities described in the definition of Closing Other Liabilities Adjustment
to the extent such Liabilities are taken into account in determining the Final
Closing Other Liabilities Adjustment; and

 

(j)            all Liabilities listed
on Schedule 2.3(j).

 

2.4           Excluded Liabilities.
Notwithstanding anything herein to the contrary, neither the Purchaser nor any
Subsidiary of the Purchaser to which the Purchaser has assigned the right to
assume any of the Purchased Assets shall assume or be liable for any
Liabilities of the Seller or any of its Affiliates other than the Assumed
Liabilities the Purchaser or such Subsidiary has assumed, and the Seller or its
Affiliates (other than the Acquired Subsidiaries) shall retain and be
responsible for all other Liabilities of the Seller and its Affiliates (the “Excluded
Liabilities”), including (i) all Liabilities of Seller and its
Affiliates to the extent they do not arise out of the Business and (ii) the
following Liabilities:

 

(a)           all Liabilities related
to the ownership or operation of the Business in any period ending on or prior
to the Closing, including claims arising out of pre-Closing events, occurrences
or circumstances regarding auction rate securities issued, underwritten, sold
or distributed by Parent or any of its Affiliates, or with respect to which
Parent or any of its Affiliates acts (or has purported to act) as remarketing
agent or in a similar capacity to provide liquidity support in any market for
such securities;

 

(b)           all Liabilities with
respect to litigation, or other regulatory, statutory, fiduciary or employment-related
claims made in respect of events, transactions, occurrences or circumstances
occurring at or prior to the Closing;

 

39

 

(c)           all Liabilities with
respect to the unfunded amount of Parent’s and/or its Affiliates’ limited
partner and side-by-side capital commitments to the Funds (which, for the
avoidance of doubt, does not include the unfunded capital commitments of
special limited partnership interests and general partnership interests);

 

(d)           all Liabilities with
respect to the unfunded amount of Parent’s and/or its Affiliates’ capital
commitments on a principal basis to any third-party managed funds;

 

(e)           all Liabilities arising
out of or related to defined benefit pension plans including the Lehman Brothers
Holdings Inc. Retirement Plan and the Lehman Brothers Pension Scheme (UK);

 

(f)            all Liabilities
arising under Section 412 or 430 of the Code, or Section 302 or Title
IV of ERISA arising in respect of any Company Benefit Plan or by reason of any
member of the Company Group being treated through the Closing Date as a member
of a group under common control under Section 4001(a)(3) that
includes the Seller;

 

(g)           all Liabilities arising
out of or relating to any supplemental executive retirement plan, program,
arrangement or agreement;

 

(h)           all Liabilities arising
out of or related to individual account-based savings plans including the
Lehman Brothers Savings Plan or the Lehman Brothers UK Savings Plan, including
any liability related to the common stock of Seller held under any such plan;

 

(i)            all Liabilities
arising under or related to the BarCap APA and the BarCap TSA (each as amended
from time to time) and the transactions contemplated thereby (other than the
Assumed Liabilities specified in Section 2.3(f) or Section 2.3(g));

 

(j)            all Liabilities with
respect to carried interest plans, phantom carried interest plans and similar
arrangements unless the related assets are transferred to Purchaser pursuant to
the transactions contemplated by this Agreement;

 

(k)           except as expressly
assumed by Purchaser pursuant to Section 7.9, all Liabilities
related to the employment, termination of employment, or potential employment
of any Person relating to or arising out of any period on or prior to the
Closing;

 

(l)            all Liabilities for
severance (including statutory severance) or separation pay or benefits arising
directly out of the transactions contemplated by this Agreement and accruing in
the period before, on or immediately following the Closing, including any such
Liabilities arising under the laws of the United Kingdom, the European Union or
Hong Kong;

 

40

 

(m)          all Liabilities with
respect to any employee of the Seller or any of its Affiliates who does not
become a Transferred Employee with respect to any period;

 

(n)           all Liabilities
relating to any Excluded Asset;

 

(o)           all Liabilities with
respect to any and all Seller Taxes to the extent not reflected in the
determination of the Closing Cash Target;

 

(p)           all Liabilities
incurred by the Purchaser or any Acquired Subsidiary as a result of waiving the
Seller’s compliance with any “bulk sale” Laws pursuant to Section 2.7;

 

(q)           all Liabilities arising
out of or relating to (i) the Agreement, entered into on or about October 29,
2003, by and between Parent and the Office of the Comptroller of the Currency
(the “OCC”), (ii) the Capital Assurances and Liquidity Maintenance
Agreement, dated as of November 4, 2003, by and between Neuberger Berman
Trust Company, N.A., and Parent, and (iii) the Agreement, entered into on
or about October 29, 2003, by and between Neuberger Berman Trust Company,
N.A., and the OCC; and

 

(r)            all Liabilities listed
on Schedule 2.4(r).

 

2.5           Assumption,
Assignment, Cure Amounts.

 

(a)           No later than five (5) Business
Days after delivery of the Designation Notice or the period expires to deliver
such notice, the Purchaser shall have the right upon notice to Seller to
designate any Related Contract as a Contract to be assumed and/or assigned (as
applicable) pursuant to this Section 2.5 (such Contracts, the “Purchased
Contracts”). In the event that a Debtor is a party to a Purchased Contract,
Seller shall, or cause its Subsidiaries to, assume and assign such Purchased
Contract to Purchaser (or its designee) pursuant to Section 365 of the
Bankruptcy Code. In the event that a Debtor is not a party to a Purchased
Contract, such Purchased Contract shall be assigned to the Purchaser (or its
designee); provided, however, that Seller’s obligation to assign
any Transferred Real Property Leases under this sentence is subject to the
Seller obtaining the Landlord Consents). Purchaser shall use commercially
reasonable efforts to designate Related Contracts as Purchased Contracts before
the Sale Hearing. Until a date that is five (5) days before Closing, the
Purchaser shall have the right, upon notice to the Seller, to remove without
penalty any Related Contract designated as a Purchased Contract (other than a
Transferred Real Property Lease) from the list of Purchased Contracts, in which
case such Related Contract shall become an Excluded Contract.

 

(b)           On or prior to the
Closing, the Seller shall assume and at the Closing assign to Purchaser (or its
designee) those Transferred Real Property Leases to which a Debtor is a party
pursuant to Section 365 of the Bankruptcy Code. With respect to those
Transferred Real Property Leases to which a Seller but not a Debtor is a party,
such Transferred Real Property Leases shall be assigned to the Purchaser (or
its designee) 

 

41

 

on the Closing Date; provided, however, that
Seller’s obligation to assign such Transferred Real Property Leases under this
sentence is subject to the Seller obtaining the Landlord Consents. The Seller
(or, as applicable, the relevant Subsidiaries) and Purchaser will cooperate and
use commercially reasonable efforts in obtaining the Landlord Consents and
shall otherwise comply in all respects with the terms and provisions of the
underlying lease in connection with the assignment; provided, however, that
Seller shall not be obligated to incur any expenses in connection with
obtaining such Landlord Consents.

 

(c)           Seller shall be
obligated to pay or cause to be paid any and all amounts accrued or otherwise
owed prior to the Closing Date (collectively, the “Cure Amounts”) under
any Purchased Contract, Subleased Real Property Lease or Transferred Real
Property Lease. In the event of any dispute relating to any Cure Amount, Seller
shall escrow such funds in a manner approved by the Bankruptcy Court for
payment of Cure Amounts pending resolution of any dispute regarding such Cure
Amount. The Seller is responsible for
the verification of all Cure Amounts, including all administrative
responsibilities associated therewith, in its Bankruptcy Case and otherwise and
shall use reasonable best efforts to establish the proper Cure Amount, if any,
for each Purchased Contract, Transferred Real Property Lease or
Subleased Real Property Lease, including taking all reasonable actions with
respect to the filing and prosecution of any pleadings and proceedings in the
Bankruptcy Court and the service and delivery of any related notices or
pleadings.

 

(d)           The Purchaser or its
designee shall be obligated to pay any amounts for services rendered, goods
provided or benefits obtained from and after the Closing Date under each
Purchased Contract, Transferred Real Property Lease or Sublease. Any amounts
for services rendered, goods provided or benefits obtained under the Purchased
Contract or a Transferred Real Property Lease or Subleased Real Property Lease
during the period until the Closing Date shall be an Excluded Liability. Purchaser
(or its designee) shall be required to provide adequate assurance of future
performance with respect to such Purchased Contracts, Transferred Real Property
Leases and Subleases and, notwithstanding anything to the contrary, neither
Parent nor any Seller shall have liability for Purchaser’s failure to satisfy
such requirements of the Bankruptcy Code.

 

2.6           Further Conveyances
and Assumptions. Subject to the terms and conditions hereof:

 

(a)           From time to time
following the Closing, Seller shall, or shall cause its Subsidiaries to, make
available to Purchaser such data in personnel records of Transferred Employees
as is reasonably necessary for Purchaser and its Subsidiaries to transition
such employees into Purchaser’s and its Subsidiaries’ records.

 

(b)           From time to time
following the Closing, without further consideration, Seller and Purchaser
shall, and shall cause their respective Subsidiaries to, do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged or 

 

42

 

delivered, all such further conveyances,
deeds, assignments, notices, assumptions, releases, acquaintances, powers of
attorney and assurances (including any notarization, authentication,
legalization and consularization of the signatures of Seller’s and its
Affiliates’ Representatives), and such other instruments, and shall take such
further actions, as may be reasonably necessary or appropriate to assure fully
to Purchaser and its Subsidiaries and their respective successors or assigns,
all of the properties, rights, titles, interests, estates, remedies, powers and
privileges intended to be conveyed to Purchaser or its Subsidiaries under this
Agreement and the Ancillary Agreements, and to assure fully to Seller and its
Subsidiaries and their successors and assigns, the assumption of the
liabilities and obligations intended to be assumed by Purchaser or its
Subsidiaries under this Agreement and the Ancillary Agreements, and to
otherwise make effective the transactions contemplated hereby and thereby.

 

(c)           If any third-party
consent or agreement is required for the assignment of any Intellectual
Property Licenses to Purchaser and such consent cannot be obtained, then, to
the extent permitted by applicable Law and by Contract, Seller shall sublicense
whatever rights they are permitted to sublicense under the respective
Intellectual Property Licenses; provided such sublicense is at no cost
to Seller. If Seller is permitted to assign or sublicense any Intellectual
Property License to Purchaser only at a one time, fixed payment or an ongoing
fee, Seller shall notify Purchaser thereof and, only if Purchaser or any of its
Subsidiaries agrees in writing to be responsible to pay such payment or fee, as
applicable, Seller shall assign or shall sublicense whatever rights it is
permitted to assign or sublicense under the respective Intellectual Property Licenses,
subject to the payment or fee being paid by Purchaser or any of its
Subsidiaries.

 

(d)           If, pursuant to the
transactions carried out under this Agreement Purchaser does not acquire
Intellectual Property Rights owned or controlled by the Seller that have been
exploited in the Business in the ordinary course of its operations (“Residual
Intellectual Property Rights”), then Seller shall and hereby does grant to
Purchaser, the perpetual, irrevocable, fully paid up, royalty free, worldwide,
non-exclusive right and license to exploit such Residual Intellectual Property
Rights in connection with the Business and other asset management and
investment advisory activities in the manner in which such Residual
Intellectual Property Rights were exploited prior to the Closing Date. The
license granted herein is assignable and sublicensable by Purchaser; provided
that it may only be assigned or sublicensed to a Person who is engaged in (or
owns or controls a Person who is engaged in) the Business, as conducted from
time to time, or a portion thereof.

 

(e)           If, pursuant to the
transactions carried out under this Agreement Purchaser acquires Intellectual
Property Rights used by Seller or any of its Subsidiaries outside of the scope
of the Business in the ordinary course of Seller’s or any of its Subsidiaries’
operations (“Non-exclusive Intellectual Property Rights”), Purchaser
shall and hereby does grant to Seller and its Subsidiaries, the perpetual,
irrevocable, fully paid up, royalty free, worldwide, non-exclusive right and
license to exploit such Non-exclusive Intellectual Property Rights outside the
field of the Business in the manner in which such Non-exclusive Intellectual
Property Rights were exploited prior to the 

 

43

 

Closing Date. The license
granted herein is assignable and sublicensable by Seller or any of its
Subsidiaries, as applicable, in whole or in part; provided that it may
only be assigned or sublicensed to a Person who is engaged in (or owns or
controls a Person who is engaged in) those aspects of the business in which the
relevant Non-exclusive Intellectual Property Rights were used prior to Closing
Date, or a portion thereof.

 

2.7           Bulk Sales Laws.
Purchaser hereby waives compliance by Seller and its Subsidiaries with the
requirements and provisions of any “bulk-transfer” Laws of any jurisdiction
that may otherwise be applicable with respect to the sale and transfer of any
or all of the Purchased Assets to Purchaser.

 

2.8           Purchase Price. The
aggregate purchase price for the Purchased Assets shall equal $2,150,000,000
(the “Base Purchase Price”), subject to adjustment as provided in Sections
2.9 and 2.11 (such sum, as so adjusted, the “Purchase Price”).

 

2.9           Payment of Purchase
Price.

 

(a)           On the Closing Date, the
Purchaser (i) shall pay, or cause to be paid, to the Seller an amount
equal to the Base Purchase Price less (A) the
Estimated Closing Cash Shortfall (if the Estimated Closing Cash Target is
greater than the Estimated Closing Cash) plus (B) the
Estimated Closing Cash Excess (if Estimated Closing Cash is greater than the
Estimated Closing Cash Target) less  (C) the Estimated Aggregate Additional
Adjustment less (D) the Holdback
Amount.

 

(b)           If (i) Estimated
Closing Cash minus the Estimated Closing
Cash Target exceeds (ii) Final Closing Cash minus
the Final Closing Cash Target plus the
Holdback Release Amount, then the Seller shall pay cash in the amount of such
excess to the Purchaser or its designees by wire transfer of immediately
available United States funds into an account to be designated by the Purchaser.
If (i) Final Closing Cash minus the
Final Closing Cash Target plus the
Holdback Release Amount exceeds (ii) Estimated Closing Cash minus the Estimated Closing Cash
Target, then the Purchaser shall pay, or cause to be paid, cash in the amount
of such excess to the Seller or its designees by wire transfer of immediately
available United States funds into an account to be designated by the Seller.

 

(c)           Subject to Section 2.11(g),
if the Final Aggregate Additional Adjustment exceeds the Estimated Aggregate
Additional Adjustment, then the Seller shall pay cash in the amount of such
excess to the Purchaser or its designees by wire transfer of immediately
available United States funds into an account to be designated by the Purchaser.
Subject to Section 2.11(g), if the Estimated Aggregate Additional
Adjustment exceeds the Final Aggregate Additional Adjustment, then the
Purchaser shall pay, or cause to be paid, cash in the amount of such excess to
the Seller or its designees by wire transfer of immediately available United
States funds into an account to be designated by the Seller.

 

44

 

(d)           Subject to Section 2.11(g),
if the Final Measurement Date NB Adjustment exceeds the sum of the Final
True-Up Date NB Adjustment plus the
Measurement Date Holdback Amount, then the Seller shall pay cash in the amount
of such excess to the Purchaser or its designees by wire transfer of
immediately available United States funds into an account to be designated by
the Purchaser. Subject to Section 2.11(g), if the sum of the Final
True-Up Date NB Adjustment plus the
Measurement Date Holdback Amount exceeds the Final Measurement Date NB
Adjustment, then the Purchaser shall pay, or cause to be paid, cash in the
amount of such excess to the Seller or its designees by wire transfer of
immediately available United States funds into an account to be designated by
the Seller.

 

(e)           All payments required
to be made under Section 2.9(b) or Section 2.9(c) will
be made within 10 days after the components of all such payments (other than
the Holdback Release Amount) have been determined pursuant to Section 2.11
and may be set off against any amounts owed by the Seller to Purchaser under
this Agreement (in the case of a payment by Purchaser) or by Purchaser to
Seller under this Agreement (in the case of a payment by Seller). To the extent
each of the Seller and the Purchaser would otherwise be entitled to a payment
under Section 2.9(b) or Section 2.9(c), such
payments shall be netted against each other. Any payment required to be made
under Section 2.9(d) will be made within 10 days after the components
of such payment (other than the Measurement Date Holdback Amount) have been
determined pursuant to Section 2.11 and may be set off against any amounts
owed by the Seller to Purchaser under this Agreement (in the case of a payment
by Purchaser) or by Purchaser to Seller under this Agreement (in the case of a
payment by Seller). If not paid by the date required under this Section 2.9(e),
any payment required under this Section 2.9(e) shall bear
interest from and including such date to but excluding the date of payment at a
rate per annum equal to the rate of interest published from time to time by The
Wall Street Journal, Eastern Edition, as the “prime rate” at JPMorgan Chase
Bank. Such interest shall be payable at the same time as the payment to which
it relates and shall be calculated daily on the basis of a year of 365 days and
the actual number of days elapsed.

 

(f)            The Purchaser shall
make, or cause to be made, any payment it is required to make to the Seller
pursuant to Section 2.9(a), Section 2.9(b), Section 2.9(c) or
Section 2.9(d) (i) by wire transfer of immediately
available United States funds into an account to be designated by the Seller, (ii) by
an in-kind transfer to the Seller or its designees (which may be effected by
book-entry transfer) of any auction rate securities acquired by the Purchaser
or its designees that were held in the accounts of Clients at any time prior to
the Closing, which securities will be valued at par plus accrued but unpaid
interest or dividends, as the case may be, for purposes of this Section 2.9
or (iii) any combination of the foregoing.

 

2.10         Pre-Closing Base
Purchase Price Adjustment.

 

(a)           Not later than five (5) Business
Days prior to the Closing Date, or in the case of clause (iii) below,
immediately after the close of business on the day before the Closing Date, the
Seller shall provide the Purchaser with its best estimates of the 

 

45

 

following calculations and other items along
with the evidence and other information that support those estimates:

 

(i)            the Preliminary
Closing Aggregate NB Revenue Run-Rate and the Estimated Closing NB Adjustment
(if any);

 

(ii)           the aggregate amount of
Cash that will be held by the Acquired Subsidiaries or otherwise acquired by
the Purchaser and its Subsidiaries as a Purchased Asset as of the Closing (“Estimated
Closing Cash”), the Closing Cash Target (the “Estimated Closing Cash
Target”), the components of the Closing Cash Target and the Estimated
Closing Cash Shortfall or the Estimated Closing Cash Excess as the case may be;

 

(iii)          the Closing S&P
Adjustment (the “Estimated Closing S&P Adjustment”);

 

(iv)          the Closing Other
Liabilities Adjustment (the “Estimated Other Liabilities Adjustment”);
and

 

(v)           Actual EBITDA and the
EBITDA Adjustment (the “Estimated EBITDA Adjustment”), which estimates
will be based on the Audited Financial Statements, if they are then available,
or the best financial information available to the Seller, if the Audited
Financial Statements are not then available; provided, that at the
election of Parent by written notice delivered to Purchaser no later than five (5) Business
Days prior to the Closing Date, the Estimated EBITDA Adjustment will be
$190,000,000.

 

(b)           The parties shall
cooperate in good faith to attempt to resolve prior to the Closing any disputes
related to any calculation or other item that is the subject of any of the
foregoing estimates or any evidence or other information related thereto.

 

2.11         Post-Closing True-Ups.

 

(a)           No later than 45 days
after the later of (i) the True-Up Date and (ii) the date the final
Audited Financial Statements are delivered to the Purchaser, the Purchaser
shall deliver to the Seller a schedule (the “Closing Schedule”) that
sets forth its calculations of:

 

(i)            the True-Up Date
Aggregate NB Revenue Run-Rate and the True-Up Date NB Adjustment;

 

(ii)           the actual aggregate amount
of Cash held by the Acquired Subsidiaries or otherwise acquired by the
Purchaser and its Subsidiaries as a Purchased Asset as of the Closing (“Closing
Cash”), the Closing Cash Target and the components of Closing Cash and the
Closing Cash Target;

 

(iii)          the Closing S&P
Adjustment;

 

46

 

(iv)          the Closing Other Liabilities Adjustment; and

 

(v)           Actual EBITDA and the EBITDA Adjustment.

 

(b)           If the Seller disagrees with the Purchaser’s calculations
of the True-Up Date NB Adjustment, Closing Cash or the Closing Cash Target,
Closing S&P Adjustment, Closing Other Liabilities Adjustment or EBITDA
Adjustment or any other calculation on the Closing Schedule delivered pursuant
to Section 2.11(a) (each of the foregoing, a “Closing
Schedule Calculation”), the Seller may, within 30 days after delivery of
the documents referred to in Section 2.11(a) related to such
calculation, deliver a notice to the Purchaser disagreeing with such
calculation and setting forth the Seller’s calculation of any such amount.  Any such notice of disagreement shall specify
those items or amounts as to which the Seller disagrees, and the Seller shall
be deemed to have agreed with all other items and amounts contained in the
Closing Schedule Calculations or otherwise reflected in the Closing Schedule.

 

(c)           No later than 45 days after the later of (i) the
Measurement Date and (ii) the date the final Audited Financial Statements
are delivered to the Purchaser, the Purchaser shall deliver to the Seller a
schedule (the “Measurement Date Schedule”) that sets forth its
calculations of the Measurement Date Aggregate NB Revenue Rate and the
Measurement Date NB Adjustment.  If the
Seller disagrees with the Purchaser’s calculations of the Measurement Date NB
Adjustment or any other calculation on the Measurement Date Schedule delivered
pursuant to this Section 2.11(c) (each of the foregoing, a “Measurement
Date Schedule Calculation”), the Seller may, within 30 days after delivery
of the documents referred to in this Section 2.11(c) related
to such calculation, deliver a notice to the Purchaser disagreeing with such
calculation and setting forth the Seller’s calculation of such amount.  Any such notice of disagreement shall specify
those items or amounts as to which the Seller disagrees, and the Seller shall
be deemed to have agreed with all other items and amounts contained in the
Measurement Date Schedule Calculations or otherwise reflected in the
Measurement Date Schedule.

 

Notwithstanding the foregoing provisions of
this Section 2.11(c), if the Final True-Up Date NB Adjustment has
not been determined as contemplated by Section 2.11(e) at the
time the Purchaser would otherwise be required to deliver the Measurement Date
Schedule, then the Purchaser will be entitled to defer delivery of the
Measurement Date Schedule and its calculations of the Measurement Date
Aggregate NB Revenue Rate and the Measurement Date NB Adjustment until ten
business days after the amount of the Final True-Up Date NB Adjustment has been
determined as contemplated by Section 2.11(e).

 

(d)           If a notice of disagreement shall be duly delivered
pursuant to Section 2.11(b) or Section 2.11(c),
the Purchaser and the Seller shall, during the 20 days following each such
delivery, use their reasonable best efforts to reach agreement on the disputed
items or amounts in order to determine any disputed calculations included in
such delivery.  If, during either such
period, the Purchaser and the Seller are unable to reach such agreement, they
shall promptly thereafter cause a local office of an 

 

47

 

independent accounting firm of nationally
recognized standing reasonably satisfactory to the Purchaser and the Seller
(which local office shall not have any material relationship with the Purchaser
or the Seller or any of their respective Affiliates) (the “Referee”),
promptly to review this Agreement and the disputed items or amounts for the
purpose of calculating any disputed Closing Schedule Calculations or
Measurement Date Schedule Calculations. In making such calculations, the
Referee shall consider only those items or amounts in the Closing Schedule or
Measurement Date Schedule or in the Purchaser’s calculations of the Closing
Schedule Calculations or Measurement Date Schedule Calculations as to which the
Seller has disagreed.  The Referee shall
deliver to the Purchaser and the Seller, as promptly as practicable, a report
setting forth such calculations of any disputed Closing Schedule Calculations
or Measurement Date Schedule Calculations. 
Such report shall be final and binding upon the Purchaser and the
Seller. The cost of such review and report shall be allocated between the
Seller and the Purchaser in the same proportion that the aggregate amount of
the items unsuccessfully disputed by each (as finally determined by the
Referee) bears to the total amount of the disputed items.

 

(e)           For purposes of this Agreement, “Final Closing Cash”
or “Final Closing Cash Target” or any of the “Final True-Up Date NB
Adjustment”, “Final Closing S&P Adjustment”, “Final EBITDA
Adjustment”, “Final Other Liabilities Adjustment”  or “Final Measurement Date NB Adjustment”
means, respectively, the amount of Closing Cash or the Closing Cash Target or
the amount of the True-Up Date NB Adjustment, Closing S&P Adjustment,
EBITDA Adjustment, Closing Other Liabilities Adjustment or Measurement Date NB
Adjustment, as the case may be, (i) as shown in the Purchaser’s
calculation delivered pursuant to Section 2.11(a) or Section 2.11(c),
as the case may be, if no notice of disagreement with respect thereto is duly
delivered pursuant to Section 2.11(b) or Section 2.11(c),
as the case may be; or (ii) if such a notice of disagreement is delivered,
(A) as agreed by the Purchaser and the Seller pursuant to Section 2.11(d) or
(B) in the absence of such agreement, as shown in the Referee’s report
delivered pursuant to Section 2.11(d); provided that in no event (x) shall
the Final Closing Cash Target, Final True-Up Date NB Adjustment, Final Closing
S&P Adjustment, Final EBITDA Adjustment, Final Other Liabilities Adjustment
or  Final Measurement Date NB Adjustment
be more than the Purchaser’s calculation thereof delivered pursuant to Section 2.11(a) or
Section 2.11(c), as the case may be, or less than the Seller’s
calculation of thereof delivered pursuant to Section 2.11(b) or
Section 2.11(c), as the case may be, or (y) shall Final
Closing Cash be less than the Purchaser’s calculation thereof delivered
pursuant to Section 2.11(a) or more than the Seller’s
calculation of thereof delivered pursuant to Section 2.11(b).

 

(f)            The Purchaser and the Seller agree that they will
cooperate and assist in the preparation of the Closing Schedule, the Closing
Schedule Calculations and in the conduct of the audits and reviews referred to
in this Section 2.11, including the making available to the extent
necessary of books, records, work papers and personnel.

 

(g)           Notwithstanding anything to the contrary in this
Agreement, if Parent validly elected in accordance with this Agreement to cause
the Estimated 

 

48

 

Aggregate Additional Adjustment to equal
$850,000,000, then (i) none of the True-Up Date NB Adjustment, Closing
S&P Adjustment, Closing Other Liabilities Adjustment (except as set forth
in clause (ii) below), EBITDA Adjustment or Measurement Date NB Adjustment
will be eligible to be included on the Closing Schedule or Measurement Date
Schedule (the latter of which shall not be delivered) or the subject of a
post-Closing adjustment to the Base Purchase Price under Section 2.9(c) or
Section 2.9(d) or any review or dispute of such adjustments
under this Section 2.11, and (ii) the provisions of this Section 2.11
will apply only to Closing Cash, the Closing Cash Target and the components of
Closing Cash and the Closing Cash Target (including, only for purposes of
clause (d) of the definition of “Closing Cash Target”, the Closing Other
Liabilities Adjustment).

 

ARTICLE III

CLOSING AND TERMINATION

 

3.1           Closing Date. 
The closing of the sale and purchase of the Purchased Assets provided
for in Section 2.1 (the “Closing”) shall take place at the
offices of Weil, Gotshal & Manges LLP located at 767 Fifth Avenue, New
York, New York 10153 at 10:00 a.m. (New York City time) on the third
Business Day after the satisfaction or waiver of the conditions set forth in Article VIII
(other than conditions that by their nature are to be satisfied at the Closing,
but subject to the satisfaction or waiver of those conditions at such time),
unless another time, date or place is agreed to in writing by the parties
hereto.  It is agreed by the parties
hereto that the delivery of the Audited Financial Statements is not a condition
to the Closing.  The date on which the
Closing is held is referred to herein as the “Closing Date”.

 

3.2           Certain Closing Deliveries.  At the Closing:

 

(a)           Each of the Purchaser and the Seller shall deliver, or
shall cause to be delivered, to the other party, each Ancillary Agreement to
which it or any of its Affiliates is a party, duly executed.

 

(b)           The Seller shall deliver to the Purchaser and/or its designated
Subsidiaries the following items, each in form and substance reasonably
satisfactory to the Purchaser:

 

(i)            a duly executed, reasonably customary bill of sale;

 

(ii)           duly executed, reasonably customary assignment and
assumption agreements (subject to the limitations set forth in Section 2.5(b) and
the receipt of the applicable Landlord Consents and including a separate
assignment and assumption agreement for each Transferred Real Property Lease)
and duly executed assignments of the U.S. and Canadian trademark registrations
and applications included in the Purchased Intellectual Property, in a form
suitable for recording in the U.S. and 

 

49

 

Canadian trademark office, and general assignments of all other
Purchased Intellectual Property;

 

(iii)          as applicable, a certificate from each entity selling
assets pursuant to this Agreement, duly executed by such entity, that such
entity is not a “foreign person” within the meaning of Section 1445 of the
Code;

 

(iv)          duly executed Subleases with respect to the Subleased Real
Property Leases, subject to Section 7.19(b) and Section 7.19(c) and
the receipt of the applicable Landlord Consents; and

 

(v)           all other instruments of conveyance and transfer, in form
and substance reasonably acceptable to Purchaser, as may be necessary to convey
the Purchased Assets to Purchaser and its Subsidiaries or as Purchaser may
reasonably request.

 

(c)           The Purchaser shall deliver to the Seller, each in form
and substance reasonably satisfactory to the Seller:

 

(i)            a duly executed, reasonably customary assignment and
assumption agreement, subject to the limitations set forth in Section 2.5(b) and,
to the extent necessary, the receipt of the applicable Landlord Consents and
including a separate assignment and assumption agreement for each Transferred
Real Property Lease); and

 

(ii)           duly executed Subleases with respect to the Subleased Real
Property Leases, subject to Section 7.19(b) and Section 7.19(c) and
the receipt of the applicable Landlord Consents.

 

3.3           Termination of Agreement.  This Agreement may be terminated prior to the
Closing as follows:

 

(a)           by mutual written consent of the Purchaser and the Seller;

 

(b)           by the Purchaser or the Seller in the event that the
Closing has not been consummated on or prior to June 30, 2009 (such date,
the “Termination Date”); provided, however, that the right
to terminate this Agreement under this Section 3.3(b) shall
not be available to a party if the failure of the Closing to be consummated on
or before the Termination Date is primarily due to the failure of such party to
perform any of its obligations under this Agreement;

 

(c)           by the Purchaser or the Seller upon a final non-appealable
determination by a Governmental Body of competent jurisdiction denying an
approval that is necessary for the consummation of the transactions
contemplated hereby; provided, however, that the right to
terminate this Agreement under this Section 3.3(c) shall not
be available to a party if such denial is primarily due to the failure of such
party to perform any of its obligations under this Agreement;

 

50

 

(d)           by the Purchaser in the event (i) none of the
representations and warranties of the Purchaser shall have become and continue
to be untrue in a manner that would cause the condition set forth in Section 8.2(a) not
to be satisfied and there has been no failure by the Purchaser to perform its
covenants in such a manner as would cause the condition set forth in Section 8.2(b) not
to be satisfied, and (ii) there shall have been a breach of the Seller’s
representations and warranties in this Agreement or a failure by the Seller or
any member of the Company Group to perform their respective covenants in this
Agreement, in any such case in a manner that the conditions to the Closing set
forth in Section 8.1(a) or Section 8.1(b) would
not be satisfied if such breach or failure occurred or was continuing as of the
date on which the Closing was to occur; provided, however, that
the Purchaser shall provide notice to the Seller as soon as practicable after
becoming aware of any such breach described in clause (ii) above; and provided
further that if such breach is curable by the Seller through the
exercise of its commercially reasonable efforts then, so long as the Seller
continues to exercise such commercially reasonable efforts, the Purchaser may
not terminate this Agreement under this Section 3.3(d) prior
to the earlier of (A) the Termination Date and (B) the 30th day
following the date the Seller receives notice of such breach from the Purchaser
and only if such breach or failure by Seller remains uncured on such date;

 

(e)           by the Seller in the event (i) none of the
representations and warranties of the Seller shall have become and continue to
be untrue in a manner that would cause the condition set forth in Section 8.1(a) not
to be satisfied and there has been no failure by the Seller or any Company to
perform its covenants in such a manner as would cause the condition set forth
in Section 8.1(b) not to be satisfied, and (ii) there
shall have been a breach of the Purchaser’s representations and warranties in
this Agreement or a failure by the Purchaser to perform its covenants in this
Agreement, in any such case in a manner that the conditions to the Closing set
forth in Section 8.2(a) or Section 8.2(b) would
not be satisfied if such breach or failure occurred or was continuing as of the
date on which the Closing was to occur; provided, however, that
the Seller shall provide notice to the Purchaser as soon as practicable after
becoming aware of any such breach described in clause (ii) above; and provided
further that if such breach is curable by the Purchaser through the
exercise of its commercially reasonable efforts then, so long as the Purchaser
continues to exercise such commercially reasonable efforts, the Seller may not
terminate this Agreement under this Section 3.3(e) prior to
the earlier of (A) the Termination Date and (B) the 30th day
following the date the Purchaser receives notice of such breach from the Seller
and only if such breach or failure by the Purchaser remains uncured on such
date;

 

(f)            by the Purchaser, upon notice to Parent, if at the
Auction, the Purchaser is not selected as the Successful Bidder (as defined in
the Bid Procedures Order);

 

(g)           by Purchaser, upon notice to Parent, if (i) the Bid
Procedures Order, in form and substance reasonably satisfactory to the
Purchaser, is not entered before the later of (A) ten (10) days after
the date of the filing of the Sale Motion and (B) the first available date
on the Bankruptcy Court’s calendar that is at least ten (10) days 

 

51

 

after the filing of the Sale Motion, or if after such entry, such Bid
Procedures Order is stayed, reversed, amended or vacated or modified without
Purchaser’s prior written consent and such Bid Procedures Order ceases to be
reinstated after a period of five (5) Business Days during which Purchaser
will work in good faith with the Debtors in an attempt to have such Bid
Procedures Order entered in a manner reasonably acceptable to Purchaser and the
Debtors or (ii) the Sale Order, in form and substance reasonably
satisfactory to Purchaser, has not been entered in the Bankruptcy Case of
Parent and each entity designated in the Designation Notice prior to the
sixty-third (63rd) day after entry of the Bid Procedures Order, or the first
available date on the Bankruptcy Court’s calendar that is at least sixty-three
(63) days after entry of the Bid Procedures Order, or if after such entry, such
Sale Order is stayed, reversed, amended, vacated or modified without Purchaser’s
prior written consent and such Sale Order ceases to be reinstated after a
period of ten (10) Business Days during which Purchaser will work in good
faith with the Debtors in an attempt to have such Sale Order reinstated in a
manner reasonably acceptable to Purchaser and the Debtors, (iii) any
Bankruptcy Case that relates to any Purchased Asset is involuntarily converted
to a case under Chapter 7 of the Bankruptcy Code, a trustee or examiner is
appointed in any such Bankruptcy Case, any such Bankruptcy Case is dismissed or
(iv) Parent, Seller or any Affiliate of Parent breaches Section 7.20(a),
Section 7.25(f) or Section 7.25(g);

 

(h)           by the Seller, upon notice to the Purchaser, if the
Purchaser is not the Successful Bidder at the Auction or a sale order has been
entered with respect to a Competing Transaction; or

 

(i)            by Purchaser, upon notice to the Sellers, if Parent has
made an election that would cause a condition set forth in either Sections
8.1(k) or 8.1(l) not to be satisfied.

 

3.4           Procedure Upon Termination.  In the event of termination by the Purchaser
or the Seller, or both, pursuant to Section 3.3, written notice
thereof shall forthwith be given by the terminating party to the Purchaser or
Parent, as applicable, and this Agreement shall terminate, and the purchase of
the Purchased Assets hereunder shall be abandoned, without further action by
the Purchaser or the Parent.

 

3.5           Effect of Termination.

 

(a)           In the event that this Agreement is validly terminated in
accordance with Sections 3.3 and 3.4, then each of the parties
shall be relieved of its duties and obligations arising under this Agreement
after the date of such termination and such termination shall be without
liability to the Purchaser, the Seller or their respective Affiliates; provided,
however, that the obligations of the parties set forth in the
Confidentiality Agreements, in this Section 3.5, and in Article X
shall survive any such termination and shall be enforceable hereunder.

 

(b)           In the event of termination of this Agreement

 

52

 

(i)            (A) by Purchaser or Seller pursuant to Section 3.3(b),
or by Purchaser pursuant to Section 3.3(i), Seller shall cause to
be paid to Purchaser the Reimbursement Amount by wire transfer of immediately
available funds to an account designated by the Purchaser as promptly as
possible (but in any event within two (2) Business Days) following such
termination and (B) if prior to such termination, a  proposal or offer is made in respect of a
Competing Transaction, which offer or proposal has not been withdrawn and
within twelve (12) months following such termination, Seller enters into a
definitive agreement with respect to a Competing Transaction or a Competing
Transaction is consummated, Seller shall cause to be paid to Purchaser the
Seller Termination Fee by wire transfer of immediately available funds to an
account designated by the Purchaser as promptly as possible (but in any event
within two (2) Business Days) following such consummation;

 

(ii)           (A) by Purchaser pursuant to Section 3.3(d) or
Section 3.3(g)(ii) or Section 3.3(g)(iv), Seller
shall cause to be paid to Purchaser the Reimbursement Amount by wire transfer
of immediately available funds to an account designated by the Purchaser as
promptly as possible (but in any event within two (2) Business Days)
following such termination and (B) within twelve (12) months following
such termination, Seller enters into a definitive agreement with respect to a
Competing Transaction or a Competing Transaction is consummated, Seller shall
cause to be paid to Purchaser the Seller Termination Fee by wire transfer of
immediately available funds to an account designated by the Purchaser as
promptly as possible (but in any event within two (2) Business Days)
following such consummation;

 

(iii)          by Purchaser pursuant to Section 3.3(f) or
by Seller pursuant to Section 3.3(h), Seller shall cause to be paid
to Purchaser the Seller Termination Fee and the Reimbursement Amount by wire
transfer of immediately available funds to an account designated by the
Purchaser as promptly as possible (but in any event within two (2) Business
Days) following such termination; or

 

(iv)          by Purchaser pursuant to Section 3.3(g)(iii),
Seller shall cause to be paid to Purchaser the Reimbursement Amount by wire
transfer of immediately available funds to an account designated by the
Purchaser as promptly as possible (but in any event within two (2) Business
Days) following such termination.

 

(c)           Each of the parties hereto acknowledges that the
agreements contained in Section 3.5(b) are an integral part of
the transactions contemplated by this Agreement and that neither the Seller
Termination Fee nor the Reimbursement Amount is a penalty, but rather
constitute liquidated damages in a reasonable amount that will compensate the
party receiving such payment in the circumstances in which the Seller
Termination Fee or Reimbursement Amount, as applicable, is payable for the
efforts and resources expended and opportunities foregone while negotiating
this Agreement and the Ancillary Agreements, working towards implementation of
the transactions contemplated by this Agreement, and in reliance on this Agreement
and on the expectation of the consummation of the transactions contemplated
hereby, which amount would otherwise be impossible to calculate with precision.

 

53

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY GROUP AND THE BUSINESS

 

Except as
otherwise disclosed or identified in reasonable detail in the Parent’s reports
and other documents filed with the SEC prior to September 19, 2008 (other
than (x) in risk factors or forward-looking statements or similar language
in such reports or other documents and (y) exhibits to any such reports or
other documents to the extent not otherwise disclosed or identified in
reasonable detail in such reports or other documents), or set forth on the
corresponding disclosure schedule delivered to the Purchaser by the Seller
prior to execution of this Agreement (it being understood that any matter
disclosed in a Schedule by Seller shall be deemed to constitute disclosure with
respect to other representations and warranties of Seller to the extent
reasonably apparent on the face of such disclosure), the Seller hereby
represents and warrants to the Purchaser that:

 

4.1           Organization and Good Standing.

 

(a)           Each member of the Company Group is a corporation, limited
liability company, or limited partnership, as the case may be, duly organized,
validly existing and, other than the entities set forth on Schedule 4.1(a),
in good standing under the laws of its respective jurisdiction of incorporation
or formation and has all requisite corporate, limited partnership, as the case
may be, or limited liability company power and authority to own, lease and
operate its properties and to carry on its business as now conducted.

 

(b)           Each member of the Company Group is duly qualified or
authorized to do business as a foreign corporation, limited liability company,
or limited partnership, as the case may be, and is in good standing under the
laws of each jurisdiction in which it owns or leases real property and each
other jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where the
failure to be so qualified, authorized or in good standing would not have a
Material Adverse Effect.

 

4.2           Authorization of Agreement.  Subject to any approval required in a
Bankruptcy Case, or other insolvency, receivership or similar proceedings, each
Subsidiary of the Seller has all requisite power and authority to execute and
deliver each Contract, document or certificate contemplated by this Agreement
or to be executed by such Subsidiary in connection with the consummation of the
transactions contemplated by this Agreement (including this Agreement, the “Company
Documents”) and to consummate the transactions contemplated hereby.  The execution and delivery of each Company
Document and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite action on the part of the
applicable Subsidiary.  Each of the
Company Documents will be, at or prior to the Closing, duly and validly
executed and delivered by the applicable Subsidiary of the Seller.  Each of the 

 

54

 

Company Documents, when executed and delivered, will constitute the
legal, valid and binding obligation of the Subsidiary of the Seller executing
and delivering such Company Document, enforceable against  it in accordance with its terms.

 

4.3           Capitalization. 
All of the issued and outstanding equity interests of each Company (the “Interests”)
are duly authorized, validly issued, fully paid and non-assessable (to the
extent such concepts are applicable). 
The Interests constitute 100% of the authorized, issued and outstanding
equity interests of the Companies. 
Neither the Seller nor any of its Affiliates has issued any option or
warrant covering, any right to subscribe for, or any securities convertible
into or exchangeable or exercisable for, any equity interests in any member of
the Company Group.

 

4.4           Subsidiaries.

 

(a)           Schedule 4.4 sets forth the name of each Subsidiary
of any Company, and, with respect to each such Subsidiary, (i) the
jurisdiction in which it is incorporated or organized and (ii) the
percentage of each of its equity ownership interests held by Seller or any of
its Subsidiaries.

 

(b)           The outstanding shares of capital stock or comparable
equity ownership interests of each Subsidiary of any Company are validly
issued, fully paid and non-assessable, and all such shares or other equity
interests are wholly-owned, directly or indirectly, by the Companies free and
clear of any and all Liens except transfer restrictions under applicable
securities laws.  No subsidiary of any
Company has issued any option or warrant covering, any right to subscribe for,
or any securities convertible into or exchangeable or exercisable for, any
shares of capital stock of, or comparable equity ownership interests in, any
member of the Company Group.

 

4.5           Conflicts and Consents.

 

(a)           Except as set forth on Schedule 4.5(a), and subject
to any default, acceleration, or similar event that could occur as a result of
the filing of a Bankruptcy Case after the Execution Date (and assuming the
making of the filings and notifications, and receipt of the consents, waivers,
approvals, Orders, Permits, Contracts and authorizations contemplated by Section 4.5(b) or
listed on Schedule 4.5(a)(ii)), none of the execution and delivery by
the Subsidiaries of Seller of the Company Documents, the consummation of the
transactions contemplated hereby or thereby, or compliance by the Subsidiaries
of Seller with any of the provisions hereof or thereof, will conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of acceleration, additional payment,
termination or cancellation under, any provision of (i) the certificate of
incorporation or by-laws, or comparable charter and organizational documents,
of such Subsidiaries of Seller or any Fund, (ii) any Material Contract to
which any Subsidiary of Seller or any Fund is a party, (iii) any Order of
any Governmental Body applicable to any Subsidiary of Seller or any Fund or by
which any of their respective properties or assets of Subsidiary of Seller are
bound or (iv) any applicable Law, other than, in the case of clauses (ii),
(iii) and (iv), 

 

55

 

such conflicts, violations, defaults, terminations or cancellations
that would not have a Material Adverse Effect.

 

(b)           Subject to any approval required in a Bankruptcy Case,
except as set forth on Schedule 4.5(b), no consent, waiver, approval,
Order, Permit, Contract or authorization of, or declaration or filing with, or
notification to, any Governmental Body is required on the part of any Subsidiary
of Seller or any Fund in connection with the execution and delivery of this
Agreement or the Company Documents or the compliance by such Subsidiaries of
Seller or any Fund with any of the provisions hereof or thereof, or the
consummation of the transactions contemplated hereby or thereby, other than (i) FINRA
and other applicable Self-Regulatory Organization notifications or consents, (ii) filings,
consents, approvals or notices required under the Investment Company Act or the
Investment Advisers Act, (iii) compliance with the applicable requirements
of the HSR Act and (iv) those the failure of which to obtain or make would
not have a Material Adverse Effect.

 

4.6           Financial Statements.

 

(a)           Set forth in Schedule 4.6 are copies of (a) the
combined financial information for the NB Business and the Business for the
year ended November 30, 2007, (b) the combined financial information
for the NB Business and the Business for the six (6) months ended May 31,
2008, (such date, the “Balance Sheet Date”; clause (a) and (b) respectively
describing the “NB Business Financial Information” and “Total Business
Financial Information” and together, the “Financial Information”),
and (c) the audited financial statements of Neuberger Berman LLC and
Neuberger Berman Management Inc. for the years ended November 30, 2005,
2006 and 2007( “NBH Financials”). 
The NBH Financials have been prepared in accordance with GAAP, which
have been consistently applied, and present fairly in all material respects,
the financial position, results of operations and changes in net assets of the
relevant entities at the dates, and for the periods, stated therein, and, as of
the dates thereof and for the periods covered thereby.  The Financial Information was prepared in
good faith from the books and records of the NB Business and Business and
present fairly in all material respects the operating performance of the NB
Business and the Business for the periods indicated therein except for (i) the
exclusion of the provision for income taxes, (ii) compensation expense has
not been adjusted to reflect the issuance of current and prior periods stock
awards issued as part of any deferred compensation plan, (iii) selling,
general and administrative allocations from the Parent and or Affiliates and or
divisional corporate have been categorized as dedicated allocations and are not
reflective of the underlying expense categories, and (iv) the exclusion of
historical interest expense, interest income (not including the revenue
associated with the margin debits), depreciation, intangible amortization and
the Historic Adjustments (as defined in Schedule 4.6).

 

(b)           Investment Company Financial Statements.  The most recent audited and unaudited
financial statements relating to the Public Funds contained in, respectively,
the annual and semi-annual reports to shareholders of the Public Funds
(complete and correct copies of all of which the Seller represent and warrant
have been 

 

56

 

delivered to Purchaser) (collectively, the “Investment Company
Financial Statements”) have been prepared in accordance with GAAP, which
have been consistently applied, and present fairly in all material respects,
the financial position, results of operations and changes in net assets of each
Public Fund at the dates, and for the periods, stated therein, and, as of the
dates thereof and for the periods covered thereby, did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading.  In the case of interim periods, all
adjustments relating to the Public Funds, consisting only of normal recurring
items immaterial in amount, have been made subject to year-end audit
adjustments.

 

4.7           Undisclosed Liabilities.  Neither the Seller (with respect to the
Business) nor any member of the Company Group has any liability (other than an
Excluded Liability for which the Purchaser and its Subsidiaries would not be
liable after the Closing by operation of law or otherwise) which, if known,
would be required to be reflected or reserved against on a balance sheet of the
Seller or any member of the Company Group prepared in accordance with GAAP or
on the notes thereto, except liabilities (a) reflected or reserved against
on the balance sheet schedules or the notes thereto included in the Financial
Statements or the NBH Financials, (b) expressly contemplated by this
Agreement or (c) as would not, as of the Execution Date, have a Material
Adverse Effect.

 

4.8           Absence of Certain Developments.  Since the Balance Sheet Date and prior to the
Execution Date and other than the effects of the Parent’s Bankruptcy, except as
set forth on Schedule 4.8, (i) the Seller, the Companies and their
Subsidiaries have conducted the Business only in the ordinary course of
business (except as expressly contemplated by this Agreement) and (ii) there
has not been any change, event or occurrence with respect to the Business that
has had or would reasonably be expected to have a Material Adverse Effect.

 

4.9           Taxes. 
Except as set forth on Schedule 4.9:

 

(a)           The Seller (as relates to the Purchased Assets) and each
of the members of the Company Group have each timely filed (taking into account
requests for applicable extensions) all U.S. federal Tax Returns and all
material state, local and non-U.S. Tax Returns required to be filed by it, all
such Tax Returns were correct and complete and prepared in accordance with
applicable laws and regulations, in each case, in all material respects, and
all Taxes required to be paid by the Seller (as relates to the Purchased
Assets) or the members of the Company Group (whether or not shown on any Tax
Return) have been fully and timely paid or are reflected in accordance with
GAAP as a reserve for Taxes on the most recent financial statements included in
the Financial Statements;

 

(b)           no material deficiencies for any Taxes have been proposed,
asserted or assessed, in writing, against the Seller (in respect of the
Purchased Assets) or any member of the Company Group that are still pending;
the Seller has caused to be 

 

57

 

provided true, correct and complete copies of all income and franchise
Tax Returns, examination reports, and statements of deficiencies filed,
assessed against, or agreed to by the Seller at any time during the past three
taxable years;

 

(c)           (i) no extensions of the period for assessment of any
Taxes are in effect with respect to any Purchased Asset or any member of the
Company Group, and neither the Seller nor any of the members of the Company
Group has in effect any application for any such extension and (ii) no
closing agreements, private letter rulings, technical advice memoranda or
similar agreements relating to Taxes have been entered into or issued by any
Taxing Authority with or in respect of any Purchased Asset or any member of the
Company Group, in each case, within the past three taxable years;

 

(d)           all material Taxes required to be withheld by any member
of the Company Group have been withheld and have been duly and timely paid to
the proper Taxing Authority, and the Seller and each member of the Company
Group has complied in all material respects with all reporting and
recordkeeping obligations relating thereto;

 

(e)           no income or franchise Tax Return in respect of any
Purchased Asset or of any member of the Company Group is under current
examination by any Taxing Authority, and neither the Seller (in respect of the
Purchased Assets) nor any of the members of the Company Group have received any
written notice from a Taxing Authority that such Taxing Authority intends to
conduct any such examination;

 

(f)            Schedule 4.9(f) lists each member of the
Company Group that is or ever has been treated as a domestic corporation for
U.S. Tax purposes or, by operation of law or otherwise, is a successor to an
entity treated as a domestic corporation for U.S. Tax purposes;

 

(g)           each Fund intended to be a “regulated investment company” has
properly and effectively elected to be a “regulated investment company” within
the meaning of Section 851 of the Code; each such Fund has, for each of
the three prior taxable years, qualified, and continues to qualify for
treatment as a “regulated investment company” (i.e., subchapter M of the Code
has applied to such Fund for each such taxable year) and has complied, during
each of the past three taxable years, and continues to comply with all
applicable provisions of law necessary to preserve such Fund’s eligibility for
such treatment; no such Fund is a party to any agreement or arrangement that
would require it to include in income following the Closing amounts that would
cause such Fund to fail the income test described in Section 851(b)(2) of
the Code; each such Fund has timely filed all Tax Returns required to be filed
by it and has timely paid all Taxes that such Fund was required to pay for each
prior taxable year and all such Tax Returns were true, correct and complete in
all material respects; and no such Fund owns any assets that it received from a
corporation described in subchapter C of the Code in a carry-over basis
transaction;

 

(h)           no member of the Company Group is or has been required to
make, within the last three taxable years, any adjustment pursuant to Code Section 481(a) 

 

58

 

(or any predecessor provision) or any similar provision of state, local
or foreign tax law by reason of any change in any accounting methods, and there
is no application pending by any member of the Company Group with any Taxing
Authority requesting permission for any changes in any of such member of the
Company Group’s accounting methods for Tax purposes, and no Taxing Authority
has proposed any such adjustment or change in accounting method with respect to
any member of the Company Group;

 

(i)            no member of the Company Group has received written
notice of any claim by any Taxing Authority in a jurisdiction where it does not
file Tax Returns such that it is or may be subject to taxation by that
jurisdiction;

 

(j)            no member of the Company Group is a party to any tax
sharing, allocation, indemnity or similar agreement or arrangement (whether or
not written) pursuant to which it will have any obligation to make any payments
after the Closing;

 

(k)           there are no Liens for Taxes upon any of the Purchased
Assets or any assets of any member of the Company Group, except for Permitted
Exceptions;

 

(l)            no member of the Company Group has any liability for any
Taxes payable by reason of Contract, assumption, transferee liability,
operation of Law, or Treasury Regulation Section 1.1502-6(a) (or any
predecessor or successor thereof or any analogous or similar provision under
Law);

 

(m)          no member of the Company Group has been required within the
last six taxable years, and no member of the Company Group is currently
required, to make any disclosure to the IRS pursuant to, and no member of the
Company Group has participated within the last six taxable years in, any tax
shelter within the meaning of, Section 6111 or 6222A of the Code or Section 1.6011-4
of the Treasury Regulations promulgated thereunder; and

 

(n)           no member of the Company Group is a United States real
property holding company within the meaning of Code Section 897(c)(2) during
the period specified in Code Section 897(c)(1)(A)(ii).

 

All references
to Seller or the members of the Company Group in this Section 4.9,
other than in Section 4.9(f), shall include predecessors to such
Persons.  This Section 4.9
and Section 4.14 represent the sole and exclusive representations
and warranties regarding Tax matters.

 

4.10         Real Property. 
No member of the Company Group owns fee title to any real property.
Except as would not have a Material Adverse Effect, neither the Seller nor any
member of the Company Group is in default under any of the Transferred Real
Property Leases or Subleased Real Property Leases. There are no third parties
in possession of the premises leased pursuant to the Transferred Real Property
Leases set forth on Schedule 1.1(r).

 

59

 

4.11         Title to Purchased Assets.  Other than the fee interest in the real
property subject to the Transferred Real Property Leases or Subleased Real
Property Leases (in which the Seller or a member of the Company Group has a
valid leasehold interest), Intellectual Property Rights licensed to Seller or a
member of the Company Group (for which the Seller or a member of the Company
Group has a valid license) and the personal property subject to personal
property leases (in which the Seller or a member of the Company Group has a
valid leasehold interest), Seller owns (directly or indirectly) each of the
Purchased Assets and the assets of the Company Group, and, at the Closing,
Purchaser and/ or one or more of its Subsidiaries (including the Acquired
Subsidiaries) will be vested with good title to, or a valid leasehold interest
in, or a valid license to, such Purchased Assets and the assets of the Acquired
Subsidiaries, free and clear of all Liens, other than Permitted Exceptions, to
the fullest extent permissible under Section 363(f) of the Bankruptcy
Code.

 

4.12         Intellectual Property Rights.

 

(a)           Schedule 4.12(a) sets forth a complete list of
all patents, registered trade and service marks, registered domain names,
registered designs, registered copyrights, and all applications for any of the
foregoing, owned by any member of the Company Group or, if used exclusively in
the Business by Parent or any of its other Subsidiaries (collectively, the “Registered
Intellectual Property”).  Except as
set forth in Schedule 4.12(a), and as would not have a Material Adverse
Effect, such member of the Company Group or Seller or one of its other
Subsidiaries, as the case may be, is the sole and exclusive owner of all
rights, title and interests in or arising from the Registered Intellectual
Property free and clear of all Liens other than Liens which are Permitted
Exceptions.  To the Knowledge of the
Company, no third party is infringing, misappropriating, or otherwise violating
any Intellectual Property Right of such member of the Company Group or Seller
or such other Subsidiary.

 

(b)           Except as would not have a Material Adverse Effect, to the
Knowledge of Company, neither the Seller (with respect to the Business) nor any
member of the Company Group nor any products or services sold or licensed by
the Seller (with respect to the Business) or any member of the Company Group,
nor the consummation of the transactions contemplated by this Agreement has
infringed misappropriated or violated, or will, immediately following the
Closing, infringe, misappropriate or violate the Intellectual Property Rights
of any third party.  Except as would not
have a Material Adverse Effect, neither the Seller (with respect to the
Business) nor any member of the Company Group have received any written communication
alleging or indicating that Seller or any member of the Company Group has
infringed, misappropriated, or otherwise violated the Intellectual Property
Rights of any third party, or that any Intellectual Property Rights purported
to be owned or exclusively licensed by Seller or any member of the Company
Group are invalid, unenforceable, or owned (partially or entirely) by a third
party.  Except as would not have a
Material Adverse Effect, immediately following the Closing, the Purchaser, or a
Subsidiary of the Purchaser, and each of them, will own, or have by authorized
license 

 

60

 

the right to use in the ordinary manner, all Intellectual Property
Rights used or exploited in connection with the Business in the ordinary course
of business.

 

(c)           Except as would not cause a Material Adverse Effect, the
Seller (with respect to the Business) and members of the Company Group have
established adequate measures and met all legal and contractual requirements
regarding data security, privacy, the use of data and information.  With respect to data security, privacy and
the use of data and information, each member of the Company Group is, and the
consummation of the transactions contemplated by this agreement will be, in
compliance with all Contracts and requirements of Law.  Without limitation, and except as would not
cause a Material Adverse Effect, the Seller (with respect to the Business) and
each member of the Company Group has established adequate measures, and met all
legal and contractual requirements pertaining to:  (i) the protection of trade secret
information in its possession, custody or control; (ii) the protection of
the confidentiality, integrity and security of their computer systems,
databases, and websites (and all information, transactions and content stored
or contained therein or transmitted thereby) against any unauthorized use,
access, interruption, modification or corruption in conformance with financial
industry generally accepted good data processing and security practices; and, (iii) the
collection, use, importation, or exportation of personally identifiable
information.  Except as set forth on Schedule
4.12(c), there have been no security breaches relating to, violations of
any security policy regarding or any unauthorized access or unauthorized use of
any data or information within the past two (2) years.

 

4.13         Material Contracts.

 

(a)           Schedule 4.13(a) sets forth all of the
following Contracts to which the Seller (with respect to the Business) or any
member of the Company Group is a party, or by which any of the assets of any
Seller (with respect to the Business) or any member of the Company Group are
bound, as of the Execution Date (collectively, the “Material Contracts”):

 

(i)            Contracts
providing that the Seller (with respect to the Business) or any member of the
Company Group shall not compete in any line of business or geographic area or
that will restrict the ability of the Purchaser or any Affiliate of the
Purchaser to compete in any line of business or geographic area after the
Closing Date;

 

(ii)           Contracts
between the Seller or any of its Affiliates (other than members of the Company
Group), on the one hand, and any member of the Company Group, on the other, in
each case that will remain in effect following the Closing Date;

 

(iii)          any
bonus or any other incentive compensation, deferred compensation, severance,
salary continuation, pension, profit sharing or retirement Contract or plan, or
any other employee benefit plan or arrangement relating to persons employed by
the Seller or any of its Affiliates in connection 

 

61

 

with the
Business under which Purchaser or any member of the Company Group may have any
Liability, in each case that is not listed on Schedule 4.14(a);

 

(iv)          Contracts
relating to the incurrence of indebtedness for borrowed money in excess of
$5,000,000 (other than inter-company transactions with Affiliates that will be
settled at or prior to the Closing and indebtedness of the Funds);

 

(v)           Contracts
which require the expenditure of more than $5,000,000 in the aggregate in any
future 12-consecutive-month period that are not terminable on notice of 90 days
or less without further liability;

 

(vi)          Contracts
pertaining to the licensing of Intellectual Property Rights or information
technology systems used or otherwise exploited in the ordinary course of the
business of any member of the Company Group, other than software licenses
entered into on standard terms involving commercially available software
involving fees and payments of less than $150,000 over the course of
twelve-consecutive months; and

 

(vii)         any
labor or collective bargaining agreements.

 

(b)           Except as has not had and would not have a Material
Adverse Effect, each Material Contract and each other Contract required to be
set forth on Schedule 4.13(a) is in full force and effect and is
valid, binding and enforceable in accordance with its terms.  Except as has not had and would not have a
Material Adverse Effect, neither the Seller nor any member of the Company Group
nor, to the Knowledge of the Company, any other party thereto, is in default
under the terms of any Material Contract, and the carrying out and completion
of the transactions contemplated by this Agreement will not cause a breach of
or default under any Material Contract, or result in the acceleration of any
obligation, the loss or restriction of rights, or the requirement to pay
additional fees or penalties, under any Material Contract.

 

(c)           Each contract under which any member of the Company Group
serves as an investment adviser or sub-adviser (each an “Advisory Contract”)
is valid and effective in accordance with its respective terms, and there is
not, under any such Advisory 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.  As of the Base Date, (i) the
Total Base Aggregate NB Revenue Run-Rate was $898,000,000, as indicated on Schedule 1.1(b),
and (ii) the Base Aggregate Fixed Income Revenue Run-Rate was
$129,000,000, as indicated on Schedule 1.1(a).

 

4.14         Employee Benefits Plans.

 

(a)           Schedule 4.14(a) lists each material “employee
benefit plan” (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”)), each material bonus,
incentive compensation, equity-based 

 

62

 

incentive, deferred compensation, retirement, fringe benefit or other
employee benefit plan or agreement sponsored and maintained by (i) any
member of the Company Group with respect to any current or former employees,
consultants, independent contractors, or directors of any member of the Company
Group or (ii) any Seller or any Subsidiary of any Seller with respect to
any persons employed by the Seller or any of its Subsidiaries primarily in
connection with the Business, and each other employee benefit or compensation
plan, program, or arrangement pursuant to which the Seller or any Subsidiary of
Seller has (as of the Execution Date) or reasonably expects the Purchaser will
have (as a result of the transactions contemplated by this Agreement) any
liability (each, a “Company Benefit Plan”); provided that the
Seller shall not be required to list on Schedule 4.14(a) any
Company Benefit Plan disclosed in Parent’s reports and other documents filed
with the SEC prior to September 19, 2008. 
Except as disclosed in Parent’s reports and other documents filed with
the SEC prior to September 19, 2008, the Seller has made available to the
Purchaser correct and complete copies of each Company Benefit Plan (or, in the
case of any such Company Benefit Plan that is unwritten, a description of all
material terms thereof).  Each Company
Benefit Plan has been maintained in compliance with its terms and the
applicable provisions of ERISA, the Code and all other applicable Laws except
for any non-compliance that would not have a Material Adverse Effect.  Neither the Seller (with respect to the Business)
nor any member of the Company Group has incurred any liability under Section 502
of ERISA or any excise tax under Chapter 43 of the Code, nor does any
circumstance exist that could reasonably be expected to result in any such
liability or excise tax that would have a Material Adverse Effect.

 

(b)           As of September 15, 2008, each contribution, premium
and payment required (whether by applicable Law or under applicable plan terms)
or expected to be made under or in respect of the Company Benefit Plans has
been timely made, or, in the case of any such contribution, premium or payment
that is not yet due, has been properly accrued and reflected (or an adequate
reserve in respect thereof has been established) in the financial statements of
the Company Group except as would not reasonably be expected to result in a
Material Adverse Effect.

 

(c)           Except as would not reasonably be expected to result in a
Material Adverse Effect, each Company Benefit Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS, and, to the Knowledge of the Company, no
circumstances exist that could be reasonably expected to adversely affect the
qualified status of any such Company Benefit Plan.

 

(d)           Except as set forth on Schedule 4.14(d), no member
of the Company Group, and no other entity that is or at any relevant time would
have been treated as a single employer with any member of the Company Group
under Section 414(b), (c), (m), or (n) of the Code or Section 4001(b) of
ERISA (an “ERISA Affiliate”), contributes to or has any obligation to
contribute to any multiemployer plan as defined in Section 3(37) of ERISA,
nor is any Company Benefit Plan subject to Section 302 or Title IV of
ERISA or Section 412 of the Code. 
Except as would not reasonably be expected to result in a material
liability, no member of the Company Group 

 

63

 

and no other ERISA Affiliate has incurred any liability under Title IV
or Section 302 of ERISA that has not been satisfied in full, and no
condition or circumstance exists or is contemplated, including without
limitation the transactions contemplated hereby, that presents a material risk
to any member of the Company Group or any ERISA Affiliate of incurring any such
liability, other than liability for premiums due the PBGC (which premiums have
been paid when due).  If any Company
Benefit Plan were to terminate, there would be no amount of unfunded benefit
liabilities (as defined in Section 4001(a)(17) of ERISA) with respect to
such Company Benefit Plan that would result in a Material Adverse Effect.

 

(e)           To the Knowledge of the Company and except as set forth in
Schedule 4.14(e), (i) the PBGC has not initiated any proceeding, or
asserted any rights, under Section 4041 or 4042 of ERISA and (ii) neither
Seller nor any member of the Company Group has received an inquiry, whether
written or oral, from the PBGC, under its so-called “Early Warning Program” or
otherwise, regarding the funded status of any pension plan of the Seller or any
member of the Company Group.  As of the
Execution Date, no notice or action has been taken to terminate the Lehman
Brothers Holdings Inc. Retirement Plan.

 

(f)            Except as set forth on Schedule 4.14(f), the
consummation of the transactions contemplated by this Agreement will not
(either alone or together with any other event) entitle any person employed by
the Seller or any of its Subsidiaries primarily in connection with the Business
to any bonus, severance, retirement, job security or other benefit, or accelerate
the time of payment or vesting or trigger any payment of funding (through a
grantor trust or otherwise) of compensation or benefits under, or increase the
amount payable or trigger any other obligation pursuant to, any Company Benefit
Plan.

 

(g)           Except as set forth on Schedule 4.14(g), there are
no pending or, to the Knowledge of the Company, threatened claims (other than
claims for benefits in the ordinary course), audits, investigations by any
Governmental Bodies or otherwise or Legal Proceedings with respect to any
Company Benefit Plan that would result in a Material Adverse Effect.

 

(h)           Without limiting the generality of (a) through (g) above
and except as would not reasonably be expected to result in a Material Adverse
Effect or as set forth on Schedule 4.14(h), with respect to each Company
Benefit Plan (1) that is subject to the laws of a jurisdiction other than
the United States (whether or not United States law also applies) (a “Foreign
Plan”) and (2) for which the Purchaser or any of its Subsidiaries may
have liability by operation of law or otherwise: (i) to the extent
required by applicable Law or the terms of such Foreign Plans, the fair market
value of the assets of each funded Foreign Plan, the liability of each insurer
for any Foreign Plan funded through insurance or the book reserve established
for any Foreign Plan, together with any accrued contributions, is sufficient in
all material respects to provide for the accrued benefit obligations with
respect to all current and former participants in such plan, based upon
reasonable actuarial assumptions, and no transaction contemplated by this
Agreement shall cause such assets, reserve or insurance obligations to be
materially less than such 

 

64

 

benefit obligations, and (ii) each Foreign Plan required to be
registered has been registered and has been maintained in good standing with
applicable regulatory authorities.

 

4.15         Labor.

 

(a)           Except as set forth in Schedule 4.15(a), (i) neither
the Seller (with respect to the Business) nor any member of the Company Group
is party to, or otherwise subject to, any labor or collective bargaining
agreements and no employee of the Seller (with respect to the Business) or any
member of the Company Group is represented by a labor union; (ii) there
are no material lockouts, or strikes pending, or threatened between the Seller
(with respect to the Business) or any member of the Company Group, on the one
hand, and their respective employees, on the other hand, and there have been no
such material lockouts or strikes for the past three years; and (iii) there
is not currently, and has not been for the past three years, any proceeding, or
to the Knowledge of the Company any activity, of any labor organization (or
representative thereof) or employee or group of employees to organize employees
of the Seller (with respect to the Business) or any member of the Company
Group.

 

(b)           Except as set forth in Schedule 4.15(b), the Seller
has provided to the Purchaser copies of all executive employment agreements
(with respect to the Business) that carry annual compensation in excess of
$100,000, and is in material compliance with all employment agreements,
consulting and other service contracts, written employee or human resources
personnel policies (to the extent they contain enforceable obligations),
handbooks or manuals, and severance or separation agreements.

 

4.16         Litigation.  As
of the Execution Date, other than the Parent’s Bankruptcy Case or litigations
referred to in Excluded Liabilities, there are no Legal Proceedings pending or,
to the Knowledge of the Company, threatened against any Seller or any of its
Affiliates or any member of the Company Group before any Governmental Body
which, if adversely determined, would have a Material Adverse Effect.  Neither Seller nor any of its Affiliates is
subject to any Order of any Governmental Body that materially impacts the
operation of the Business.

 

4.17         Compliance with Laws; Permits.

 

(a)           Since January 1, 2005, the Seller (with respect to
the Business) and each member of the Company Group has been, and currently is,
in compliance with all Laws of Governmental Bodies applicable to the Business
as currently conducted, except for noncompliance that has not had and would not
have a Material Adverse Effect.

 

(b)           The Seller (with respect to the Business) and each member
of the Company Group (i) has all Permits which are required for the lawful
operation of the Business as currently conducted, other than those the failure
of which to possess would not have a Material Adverse Effect and (ii) have,
to the extent required, made, or will make, all filings necessary to request
the timely renewal or issuance of all Permits prior 

 

65

 

to the Closing for each of them to own, operate and maintain their
respective assets and to conduct the Business as conducted prior to the
Closing, except for those filings the failure of which has not had and would
not have a Material Adverse Effect.

 

(c)           Neither the Seller (with respect to the Business) nor any
member of the Company Group is in default or violation (and no event has
occurred which, with notice or the lapse of time or both, would constitute a
default or violation) of any term or condition of any Permit to which it is a
party, except where such default or violation has not had and would not have a
Material Adverse Effect.

 

(d)           The Seller (with respect to the Business) and each member
of the Company Group that acts as an investment adviser that is required to be registered
is duly registered as an investment adviser under the Investment Advisers Act
and the Seller (with respect to the Business) and each member of the Company
Group that acts as an investment adviser, unless exempt from registration, is
registered, licensed and qualified in all jurisdictions where the conduct of
its business requires such registration, licensing or qualification, except
where the failure to be so registered, licensed or qualified has not had and
would not have a Material Adverse Effect.

 

(e)           Neither the Seller (with respect to the Business) nor any
member of the Company Group that acts as an investment adviser or, to the
Knowledge of the Company, any person “associated” (as defined in the Investment
Advisers Act) with the Seller nor any such member of the Company Group, is
ineligible or disqualified pursuant to Section 203 of the Investment
Advisers Act to serve as a registered investment adviser or person “associated”
(as defined in the Investment Advisers Act) with a registered investment
adviser, nor is there any Legal Proceeding pending or, to the Knowledge of the
Company, threatened in writing, by any Governmental Body, which would
reasonably be expected to become the basis for any such ineligibility or
disqualification.

 

(f)            Each member of the Company Group that is required to be
registered as a broker or a dealer with the Securities and Exchange Commission
(the “SEC”), the securities commission or similar authority of any state
or foreign Governmental Bodies is duly registered as such (and is listed on Schedule
4.17(f))with its respective jurisdictions of registration and
Self-Regulatory Organization memberships, 
and referred to herein as the “Broker-Dealer Subsidiaries”) and
such registrations are in full force and effect, and each Broker-Dealer
Subsidiary is a member in good standing with FINRA and all applicable
Self-Regulatory Organizations, and each Broker-Dealer Subsidiary’s Uniform
Application for Broker-Dealer Registration on Form BD, as amended as of
the Execution Date, and each of its other registrations, forms and other
reports filed with any Governmental Body in connection with its activities as a
broker or a dealer is in compliance in all material respects with the
applicable requirements of the Exchange Act and other Law and does 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 statements therein, in
light of the circumstances under which they were made, not misleading, and no Broker-Dealer
Subsidiary has exceeded in any material way with respect to its business, the
business activities enumerated in any membership agreements 

 

66

 

or other limitations imposed in connection with its registrations,
forms (including Form BDs) and other reports filed with any Governmental
Body.

 

(g)           The Seller (with respect to the Business) and each of the
respective directors, officers and employees of the members of the Company
Group who is required to be registered in any capacity, including as a
principal, a registered representative or a salesperson (or any limited
subcategory thereof) with the SEC, the securities commission or similar
authority of any Governmental Body is duly registered as such and such
registrations are in full force and effect, in each case, except where the
failure to be so registered has not had and would not have a Material Adverse
Effect.

 

(h)           Neither the Seller (with respect to the Business) nor any
member of the Company Group, nor, to the Knowledge of the Company, any of their
respective directors, officers, managers, employees or other agents or
representatives: (w) has received any written notification or
communication from any Governmental Body (A) asserting that any such Person
is not in compliance, in any material respect, with any Law or Permit or has
otherwise engaged in any unlawful business practice, (B) threatening to
suspend, materially modify the terms of, or revoke any such Person’s Permit,
franchise, seat or membership in any securities exchange, commodities exchange
or Self-Regulatory Organization, or governmental authorization, (C) requiring
any such Person to enter into a cease and desist order, acceptance, waiver and
consent agreement or memorandum of understanding (or requiring the managers
thereof to adopt any resolution or policy), or (D) materially restricting
or disqualifying such Person’s activities (except for restrictions generally
imposed by (1) rule, regulation or administrative policy on brokers or dealers
generally or (2) a Self-Regulatory Organization) or (E) that such
Person is the subject of any  Legal
Proceeding; (x) is aware of any pending or threatened Legal Proceeding by
any Governmental Body against the Seller (with respect to the Business) or any
member of the Company Group, or any manager, officer, director, employee, agent
or representative thereof; (y) since January 1, 2005 has been nor
currently is required to be registered as a broker or a dealer (other than the
Broker-Dealer Subsidiaries), national securities exchange, commodity trading
advisor, commodity pool operator, clearing agency, municipal securities dealer,
government securities dealer, futures commission merchant or exchange or
transfer agent under any Law and is not so registered; or (z) since January 1,
2005, has been the subject of any customer complaint involving an amount
exceeding, individually or in the aggregate, $1,500,000.

 

(i)            Since January 1, 2005, neither the Seller (with
respect to the Business) nor any member of the Company Group that acts as a
broker or a dealer nor, to the Knowledge of the Company, any of its respective “associated
persons of a broker or dealer” (as defined in the Exchange Act) has been, or
currently is, ineligible or disqualified pursuant to Section 15, Section 15B
or Section 15C of the Exchange Act to serve as a broker-dealer or as an “associated
person of a broker or dealer” (as defined in the Exchange Act), nor is there
any Legal Proceeding pending or, to the Knowledge of the Company, threatened in
writing, by any Governmental Body, which would reasonably be expected to become
the basis for any such ineligibility or disqualification, nor, to the Knowledge
of the Company, is there any reasonable basis for a proceeding or 

 

67

 

investigation, whether formal or informal, preliminary or otherwise,
that is reasonably likely to result in any such ineligibility or
disqualification.

 

(j)            Each of the Broker-Dealer Subsidiaries is in compliance
in all material respects with Regulation T of the Board of Governors of the
Federal Reserve System, NASD Rule 2520 and the margin rules or
similar rules of a Self-Regulatory Organization of which it is a member,
including the rules governing the extension or arrangement of credit to
customers, and neither the Seller (with respect to the Business) nor any member
of the Company Group (other than the Broker-Dealer Subsidiaries) has or does
extend or arrange credit for any customer within the meaning of Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System.

 

(k)           Each of the Broker-Dealer Subsidiaries is in compliance
with all applicable regulatory net capital requirements and no distribution of
cash from a Broker-Dealer Subsidiary after the Execution Date, where such
action occurs prior to the Closing, will result in such Broker-Dealer
Subsidiary not being in compliance with applicable regulatory capital
requirements, and Schedule 4.17(k) sets forth, with respect to each
of the Broker-Dealer Subsidiaries, the required net capital for such Broker
Dealer Subsidiary as of July 31, 2008 and the actual net capital of such
Broker-Dealer Subsidiary as of July 31, 2008.

 

(l)            To the Knowledge of the Company, no facts or
circumstances exist that would (i) cause FINRA, any Self-Regulatory
Organization or any other Governmental Body not to approve the transfer of
control and ownership of the Business and the Broker-Dealer Subsidiaries under
this Agreement; or (ii) cause FINRA, any Self-Regulatory Organization or
any other Governmental Body to revoke or restrict the Broker-Dealers
Subsidiaries’ Permits to operate in any jurisdiction as a broker or a dealer
after the change in ownership and control of the Business contemplated by this
Agreement;

 

(m)          With respect to the Seller and each member of the Company
Group that serves in a capacity described in Section 9(a) or 9(b) of
the Investment Company Act with respect to a Fund, (i) neither the Seller
nor such member of the Company Group is (taking into account any applicable
exemption) ineligible under such Section 9(a) or 9(b) to serve
in such capacity, (ii) no “affiliated person” (as defined in Section 2(a)(3) of
the Investment Company Act) of the Seller or such member of the Company Group
is (taking into account any applicable exemption) ineligible under such Section 9(b) to
serve as an “affiliated person” of the Seller or such member of Company Group
and (iii) there is no Legal Proceeding pending or, to the Knowledge of the
Company, threatened in writing by any Governmental Body, which would reasonably
be expected to become the basis for any such ineligibility to serve in such
capacity under such Section 9(a) or 9(b) or the ineligibility
under such Section 9(b) of such “affiliated person” to serve as an “affiliated
person” of such member of the Company Group.

 

(n)           Since January 1, 2006, each Fund has had and now has
all permits, licenses, certificates of authority, orders and approvals of, and
has made all filings, 

 

68

 

applications and registrations with, federal, state, local or foreign
governmental or regulatory bodies, and self-regulatory bodies, that are
required (including by the rules of any self-regulatory body) in order to
permit such Fund to carry on its respective business as presently conducted,
except where the failure to have had or have any such permits, licenses,
certificates of authority, orders or approvals, or make any filings,
applications and registrations, is not reasonably likely to have a material adverse
effect on the Funds; and all such permits, licenses, certificates of authority,
registrations, orders and approvals are in full force and effect.

 

(o)           Since January 1, 2005, each Client account and each
Fund, for which the Purchaser or any of its Subsidiaries will act as a general
partner, managing member, management company or investment advisor after the
Closing, has at all times been operated in compliance in all material respects
with all federal and state laws, rules, regulations and orders applicable to it
or its business, and consummation of the transactions contemplated by this
Agreement will not result in any violation of such laws, rules, regulations,
orders or any procedures adopted by any governing body of any Client account or
Fund.

 

(p)           None of the Seller, a member of the Company Group or any
of the Public Funds have, or at any time since January 1, 2005 have had,
any agreements or understandings (i) with any individual shareholder or
group of shareholders to permit or encourage the practice of short-term buying
or selling of Public Fund shares or (ii) relating to the receipt and
transmission of orders to purchase or redeem Public Fund shares after 4:00 p.m.
Eastern time, other than arrangements with financial intermediaries (including
retirement plan administrators) who are to receive orders from investors prior
to 4:00 p.m. Eastern time.

 

(q)           Since January 1, 2006, the Seller (with respect to
the Business), each member of the Company Group and each Client account
(relating to the Business) has complied and is in compliance in all material
respects with the objectives, guidelines and restrictions of such Client
account, including as set forth in the applicable prospectuses, statements of
additional information, confidential offering memoranda, private placement
memoranda or other offering, advertising or marketing materials of or account
guidelines or instructions for such Client account.

 

(r)            No Public Fund owns any shares or other interests in any
hedge fund, which, for the avoidance of doubt, shall not include any
unregistered money market funds.

 

(s)           The Companies have maintained all books and records of the
Business (including, without limitation, all account statements and all
worksheets and other documentation necessary to demonstrate the calculation of
the performance or rate of return of each Client account) as required by Rule 204-2
under the Investment Advisers Act and other applicable Law.

 

69

 

4.18         Sufficiency of Assets.  After giving effect to (i) the rights
obtained under the Transition Services Agreements and (ii) the
transactions contemplated by this Agreement, except for Administered Assets
that are not acquired by the Purchaser or one of its Subsidiaries at or prior
to the Closing, the Purchaser and its Subsidiaries, collectively, will own or
have the right to use all of the assets necessary to conduct the Business in
all material respects in substantially the same manner conducted by the Seller,
its Affiliates and the Company Group (including the Funds) on and prior to the
Base Date.

 

4.19         Insurance.  Schedule
4.19 sets forth as of the Execution Date a complete list of all insurance
policies related to the business currently conducted by any Public Fund (true
and current copies of which have been supplied to the Purchaser).  No Public Fund is in default under or with
respect to any of such policies, nor has the Seller or any member of the
Company Group or any Public Fund received any written or oral notice of
cancellation or termination with respect to any of such policies.  The fidelity insurance of each Public Fund
has been maintained in accordance with all requirements of applicable law.  No claim relating to any Public Fund has been
made under any of such insurance policies within the last five years and, to
the Knowledge of the Company, there is no event or condition that is reasonably
likely to give rise to any such claim.

 

4.20         No Other Representations or Warranties; Schedules.  Except for the representations and warranties
contained in this Article IV (as modified by the Schedules hereto and the
SEC reports referred to in the introductory paragraph of Article IV
(to the extent specified therein)), Article V or any certificates
delivered in connection with the Closing, no Person makes any other express or
implied representation or warranty with respect to any member of the Company
Group or the transactions contemplated by this Agreement, and the Seller
disclaims any other representations or warranties, whether made by the Seller
or any of their respective Affiliates, officers, directors, employees, agents
or representatives.  Except for the
representations and warranties contained in Article IV hereof (as
modified by the Schedules hereto and the SEC reports referred to in the
introductory paragraph of Article IV (to the extent specified
therein)), Article V or any certificates delivered in connection
with the Closing, (i) the Seller hereby disclaims all liability and
responsibility for any representation, warranty, projection, forecast,
statement, or information made, communicated, or furnished (orally or in
writing) to the Purchaser or its Affiliates or representatives (including any
opinion, information, projection, or advice that may have been or may be
provided to Purchaser by any director, officer, employee, agent, consultant, or
representative the Seller or any of their respective Affiliates), and (ii) no
Person makes any representations or warranties to Purchaser regarding the
probable success or profitability of any member of the Company Group.  The disclosure of any matter or item in any
Schedule hereto shall not be deemed to constitute an acknowledgment that any
such matter is required to be disclosed. 
Nothing in this Section 4.20 or in Section 6.9
will relieve any Person from any liability for fraud.

 

70

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER

 

The Seller hereby represents and warrants to the Purchaser that:

 

5.1           Organization and Good Standing.  Each Seller is a corporation, limited
liability company, limited partnership, limited company or public limited
company, as the case may be, duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is currently
registered.

 

5.2           Authorization of Agreement.  Subject to any approval required in a
Bankruptcy Case, the Seller has all requisite power and authority to execute
and deliver this Agreement and each other agreement, document or certificate
contemplated by this Agreement or to be executed by the Seller in connection
with the consummation of the transactions contemplated by this Agreement (the “Seller
Documents”), and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement
and the Seller Documents and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all requisite action on the
part of the Seller.  This Agreement has
been, and each of the Seller Documents will be at or prior to the Closing, duly
and validly executed and delivered by the Seller and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement constitutes the legal, valid and binding obligations of the
Seller, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and subject, as to enforceability,
to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity).

 

5.3           Ownership of the Interests.  The Seller owns the Interests free and clear
of any and all Liens (other than transfer restrictions under applicable Laws).

 

5.4           Conflicts and Consents.

 

(a)           Except as set forth in Schedule 4.5(a) and
subject to any default, acceleration or similar event which could occur as a
result of the filing of a Bankruptcy Case after the Execution Date, assuming
the making of the filings and notifications, and receipt of the consents,
waivers, approvals, Orders, Permits, Contracts and authorizations, contemplated
by Section 5.4(b)), none of the execution and delivery by the
Seller of this Agreement or the Seller Documents, the consummation of the
transactions contemplated hereby or thereby, or compliance by the Seller with
any of the provisions hereof or thereof, will conflict with, result in any
violation of or default, result in any acceleration or loss of obligations or
rights, or result in the payment of additional fees or penalties (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination or cancellation under, any provision of (i) the certificate of
incorporation or by-laws of the Seller, (ii) any Material Contract to
which the Seller is a party, (iii) any 

 

71

 

Order of any Governmental Body applicable to
the Seller or by which any of the properties or assets of the Seller are bound
or (iv) any applicable Law, other than, in the case of clauses (ii), (iii) and
(iv), such conflicts, violations, defaults, terminations or cancellations that
would not have a material adverse effect on the Seller’s ability to consummate
the transactions contemplated hereby.

 

(b)           Subject to any approval required in a Bankruptcy Case,
except as set forth on Schedule 4.5(b), no consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with, or
notification to, any Governmental Body is required on the part of the Seller in
connection with the execution and delivery of this Agreement or the Seller
Documents or the compliance by the Seller with any of the provisions hereof or
thereof, or the consummation of the transactions contemplated hereby or
thereby, other than (i) to the extent applicable, FINRA and other
applicable Self-Regulatory Organization notifications or consents, (ii) compliance
with the applicable requirements of the HSR Act and (iii) those the
failure of which to obtain or make would not have a material adverse effect on
the Seller’s ability to consummate the transactions contemplated hereby.

 

5.5           Litigation. 
There are no Legal Proceedings pending or, to the knowledge of the
Seller, threatened against the Seller that would have a material adverse effect
on the Seller’s ability to consummate the transactions contemplated hereby.

 

5.6           Financial Advisors. 
Except for Barclays Capital Inc. and Lazard Freres & Co. LLC,
the fees and expenses of which shall be borne by the Seller, no Person has
acted, directly or indirectly, as a broker, finder or financial advisor for the
Seller, its Affiliates or any member of the Company Group in connection with
the transactions contemplated hereby.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser hereby represents and warrants to the Seller that:

 

6.1           Organization and Good Standing.  The Purchaser is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite limited liability company power and
authority to own, lease and operate properties and carry on its business.  The Purchaser was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement.

 

6.2           Authorization of Agreement.  The Purchaser has all requisite limited
liability company power and authority to execute and deliver this Agreement and
each other agreement, document or certificate contemplated by this Agreement to
be executed by the Purchaser in connection with the consummation of the
transactions contemplated by this Agreement (the “Purchaser Documents”),
and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement
and the 

 

72

 

Purchaser Documents and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite limited liability company action on the part of the
Purchaser.  This Agreement has been, and
each of the Purchaser Documents will be at or prior to the Closing, duly and
validly executed and delivered by the Purchaser and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement constitutes the legal, valid and binding obligations of the
Purchaser, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity).

 

6.3           Conflicts and Consents.

 

(a)           Except as set forth in Schedule 6.3, none of the
execution and delivery by the Purchaser of this Agreement or the Purchaser
Documents, the consummation of the transactions contemplated hereby or thereby,
or compliance by the Purchaser with any of the provisions hereof or thereof,
will conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination
or cancellation under, any provision of (i) the certificate of formation
or operating agreement of the Purchaser, (ii) any Contract to which the
Purchaser is a party, (iii) any Order of any Governmental Body applicable
to the Purchaser or by which any of the properties or assets of the Purchaser
are bound or (iv) any applicable Law other than, in the case of clause (iii) and
(iv), such conflicts, notations, defaults, terminations or cancellations that
would not have a material adverse effect on the Purchaser’s ability to
consummate the transactions contemplated hereby.

 

(b)           Except compliance with the applicable requirements of the
HSR Act and as set forth on Schedule 6.3, no consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with, or
notification to, any Governmental Body is required on the part of the Purchaser
in connection with the execution and delivery of this Agreement or the
Purchaser Documents or the compliance by the Purchaser with any of the provisions
hereof or thereof, or the consummation of the transactions contemplated hereby
or thereby, other than (i) Self-Regulatory Organization notifications or
consents, (ii) compliance with the applicable requirements of the HSR Act
and (iii) those the failure of which to obtain or make would not have a
material adverse effect on the Purchaser’s ability to consummate the
transactions contemplated hereby.

 

6.4           Litigation. 
There are no Legal Proceedings pending or, to the knowledge of the
Purchaser, threatened, against the Purchaser that would have a material adverse
effect on the Purchaser’s ability to consummate the transactions contemplated
hereby.

 

6.5           Investment Intention.  The Purchaser is acquiring any Interests sold
pursuant to the terms of this Agreement, if any (the “Purchased Interests”)
for its own 

 

73

 

account, for investment purposes and not with
a view to the distribution thereof in contravention of any Law.  The Purchaser is an “accredited investor” as
such term is defined in the rules promulgated under the Securities Act of
1933, as amended (the “Securities Act”), and has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in the Purchased Interests.  The Purchaser understands that the Purchased
Interests have not been registered under the Securities Act or any other
securities or “blue sky” law and cannot be sold unless subsequently registered
or an exemption from registration is available.

 

6.6           Financial Advisors. 
Except for the fees and expenses of financial and other advisors that
shall be borne by the Purchaser, no Person has acted, directly or indirectly,
as a broker, finder or financial advisor for the Purchaser in connection with
the transactions contemplated by this Agreement and no Person is entitled to
any fee or commission or like payment in respect thereof.

 

6.7           Guarantees. 
Concurrently with the execution of this Agreement, the Purchaser has
delivered to the Seller a duly executed guarantee of each of the Sponsors (the “Guarantees”).

 

6.8           Arrangement with Portfolio Managers.  The portfolio managers listed on Schedule
6.8 attached hereto have entered into letter agreements, substantially in
the form provided to the Seller prior to the Execution Date, with the Purchaser
regarding continued employment in the Business following the Closing Date.

 

6.9           Acknowledgement. 
Notwithstanding anything to the contrary herein, the Purchaser
acknowledges and agrees that:

 

(a)           none of the Companies nor the Seller is making any
representations or warranties whatsoever, express or implied, beyond those
expressly given by the Seller in Article IV, Article V
or any certificates given in connection with the Closing (as modified by the
Schedules and the SEC reports referred to in the introductory paragraph to Article IV
(to the extent specified therein));

 

(b)           except for the covenants herein and in the Ancillary
Agreements and except for the representations and warranties contained in Article IV,
Article V or any certificates given in connection with the Closing,
the Purchased Interests, and the properties, assets and the business of the
Companies and their Subsidiaries, are being transferred on a “where is” and, as
to condition, “as is” basis;

 

(c)           the Purchaser has not been induced by, or relied upon, any
representations, warranties or statements (written or oral, express or implied,
or otherwise), made by any Person, that are not expressly set forth in Article IV,
Article V or any certificates given in connection with the Closing
(and, without limiting the generality of the foregoing, the Purchaser
acknowledges that, except for such representations and warranties, (i) no
representations or warranties are made with respect 

 

74

 

to any projections, forecasts, estimates,
budgets or prospect information that may have been made available to the
Purchaser or any of its Affiliates or representatives, and (ii) none of
the Seller or its Affiliates will have or be subject to any liability to the
Purchaser or any other Person resulting from the distribution or making
available to the Purchaser or its representatives (or their use of) any such
information or any information contained in any confidential memoranda relating
to any Company or any Subsidiary of any Company or contained in any “data rooms”
to which the Purchaser or its representatives may have been given access); and

 

(d)           the Purchaser has conducted, to its satisfaction, its own
independent investigation of the condition, operations, business and prospects
of the Companies and their Subsidiaries.

 

ARTICLE VII

COVENANTS

 

7.1           Access to Information.

 

(a)           Prior to the Closing, the Purchaser shall be entitled,
through its officers and representatives (including its legal advisors,
accountants and sources of financing and their representatives), to make such
additional reasonable investigation of the Business and such additional
reasonable examination of the books and records of the members of the Company
Group and of the Seller with respect to the Business as the Purchaser
reasonably requests, including for the purpose of assisting Seller with the
preparation of audited financial statements of the Business.  Any such investigation and examination shall
be conducted during regular business hours upon reasonable advance notice and
under reasonable circumstances.  The
Seller shall cause its and its Subsidiaries’ employees and other
representatives to cooperate reasonably with the Purchaser and the Purchaser’s
representatives in connection with such investigation and examination, and the
Purchaser and its representatives shall cooperate with the Seller and its
representatives and shall use reasonable efforts to minimize any disruption to
the Business. Notwithstanding anything herein to the contrary, such
investigation or examination need not be permitted to the extent that it would
require the Seller or any of its Subsidiaries to disclose any information
subject to attorney-client privilege or to disclose any information in
violation of any applicable Law or in violation of any confidentiality
obligation to which the Seller or any of its Subsidiaries is bound so long as
the Seller notifies Purchaser in advance that it is withholding such information
and makes reasonable efforts to provide such information in a way that does not
violate any such agreement or law or waive any such privilege.

 

(b)           The Purchaser shall preserve and keep the business records
(including electronic documents and email) transferred to it by the Seller for
the time and in the manner specified by applicable Law and, for a period of
seven years after the Closing (or earlier if the Seller notifies the Purchaser
that such preservation is no longer necessary), the Purchaser shall cause its
Subsidiaries to give the Seller reasonable access 

 

75

 

during the Purchaser’s regular business hours
upon reasonable advance notice and under reasonable circumstances to books and
records transferred to the Purchaser and its Subsidiaries hereunder to the
extent necessary for the preparation of financial statements, regulatory
filings or Tax returns of the Seller or its Affiliates in respect of periods
ending on or prior to Closing, or in connection with any Legal Proceedings,
inspection, investigation or examination relating to any such period.  The Seller shall be entitled to make copies
of the books and records to which it is entitled to access pursuant to this
paragraph.  In addition, after the Closing,
the Seller shall give access to its books and records and cooperate with the
Purchaser in connection with the preparation of financial statements and other
financial or other information about the Business.  Notwithstanding the foregoing, the parties
shall only be required to comply with applicable discovery rules with
respect to information relevant to disputes between the parties.

 

7.2           Conduct of the Business Pending the Closing.  Prior to the Closing, except (a) as
required by applicable Law, (b) as otherwise expressly contemplated by
this Agreement (including the actions taken or to be taken in connection with
the consummation of the transactions contemplated hereby and the Bidding
Procedures) or (c) with the prior written consent of the Purchaser, (1) the
Seller, with respect to the Business, shall and shall cause each member of the
Company Group to conduct the Businesses in all material respects in the
ordinary course of business consistent with past practice and (2) the
Seller (with respect to the Business) shall not, and shall cause each member of
the Company Group not to (it being understood that Parent has the right without
the consent of Purchaser to cause any of Parent’s Subsidiaries the equity
interests or assets of which are not Purchased Assets to commence a Bankruptcy
Case and in such event, Parent will use its commercially reasonable efforts to
notify Purchaser in advance of any such Bankruptcy Case):

 

(i)            declare
or pay any dividend or other cash distribution to the extent doing so would
impair the ability of the Business to operate in the ordinary course;

 

(ii)           issue
or sell any shares of capital stock, limited liability company membership
interests or other equity ownership interests, of any member of the Company
Group, or grant options, warrants or other rights to purchase any shares of
capital stock, limited liability company membership interests or other equity
ownership interests of any member of the Company Group;

 

(iii)          increase
the compensation payable or the benefits provided to any of its officers or
employees or adopt, modify, or amend any employee benefit plan, other than (A) as
required pursuant to applicable Law, (B) as required by the terms of
Contracts or employee benefit plans or arrangements in effect on the Execution
Date, (C) increases (made in the ordinary course of business and
consistent with past practices) in salaries, wages and benefits of employees
who (after taking into account all such increases) receive less than $500,000
per annum in annual compensation and (D) as set forth on Schedule
7.2(iii);

 

76

 

(iv)          enter
into any employment agreement not terminable at will without severance benefits
other than (A) employment agreements providing for total annual compensation
not to exceed $500,000 per person and $2,500,000 in the aggregate and (B) severance
benefits pursuant to Parent’s existing plan in accordance with past practice;

 

(v)           sell
or license any of its material properties or assets, except (A) sales and
licenses in the ordinary course of business, (B) pursuant to Contracts in
effect on the Execution Date, (C) dispositions of obsolete or worthless
assets, (D) transfers among such Company and its Subsidiaries;

 

(vi)          subject
any of its material properties to a Lien, except for Permitted Exceptions;

 

(vii)         make
any acquisition (including by merger) of the capital stock, or a division or
(except in the ordinary course of business) other material portion of the
assets, of any other Person for consideration in excess of $5,000,000 in the
aggregate;

 

(viii)        enter
into any merger or consolidation with any Person;

 

(ix)           adopt
a plan or agreement of complete or partial liquidation or dissolution;

 

(x)            incur
any indebtedness for borrowed money having an outstanding principal amount in
excess of $5,000,000 (excluding intercompany transactions with Affiliates that
will be settled at or prior to the Closing);

 

(xi)           make
any new, or change or revoke any existing, material election with respect to
Taxes; file an amended Tax Return or enter into any closing agreement with
respect to, or settle, any Tax liability that would adversely affect the
Purchaser, any Purchaser Subsidiary to which the Purchaser has assigned the
right to purchase the assets of a member of the Company Group pursuant to Section 10.5
or any Acquired Subsidiary after the Closing; consent to any extension (except
in the ordinary course of business) or waiver of the limitations period
applicable to any Tax claim or assessment with respect to any Taxes of any
member of the Company Group; change any Tax accounting method or taxable period
of any member of the Company Group; provided, however, nothing in this clause
(xi) shall prohibit or restrict the Seller or any of its Affiliates from making
any election, entering into any closing agreement, settling any Tax liability,
consenting to any extension or waiver of limitations period, filing or amending
any Tax Return or changing any Tax accounting method or tax period with respect
to any consolidated, combined or unitary group of which the Seller or any of
its Affiliates is or was a member, except to the extent that such action would
increase the Tax liability of the Purchaser or any of its Subsidiaries
(including, 

 

77

 

after the Closing, any Acquired Subsidiary) for any period ending after
the Closing Date;

 

(xii)          enter
into any Contract not to compete in any line of business or geographic area
that could bind the Purchaser or any of its Affiliates after the Closing;

 

(xiii)         enter
into any Advisory Contract except in the ordinary course of business consistent
with past practice, or amend, terminate or provide or grant any waiver under
any Material Contract or Advisory Contract;

 

(xiv)        agree
to reduce, waive, cap or subject to rebate the compensation paid by any Client
other than in the ordinary course of business consistent with past practice and
which reductions, waivers, caps and rebates will be reflected in the applicable
revenue run rate calculations for purposes of Article II;

 

(xv)         enter
into any agreement or transaction with an Affiliate that is not a member of the
Company Group other than as permitted by Schedule 7.2(xv);

 

(xvi)        accelerate
or permit to be accelerated the collection of management fees or any other
receivable related to the Business;

 

(xvii)       delay
or permit to  be delayed the payment of
any payables by the Business;

 

(xviii)      fail
to make any filing, pay any fee, or take any other action necessary to maintain
the ownership, validity and enforceability of any  material Intellectual Property Rights related
to the Business;

 

(xix)         make
any change in accounting methods, principles or practices except as required by
GAAP; or

 

(xx)          agree
to do anything prohibited by this Section 7.2.

 

7.3           Preservation of Back Office Support.  Seller will use all commercially reasonable
efforts to preserve prior to the Closing the functionality of its and its
Affiliates back offices and the availability of its personnel and systems that
have historically provided services to the Business.

 

7.4           Consents.

 

(a)           Seller shall use, and shall cause its Subsidiaries to use,
commercially reasonable efforts, and the Purchaser shall cooperate with the
Seller, to obtain at the earliest practicable date all consents (other than
with respect to brokerage and investment advisory agreements, the subject
matter of which is covered in Sections 7.12, 7.13 and 7.14)
and approvals required to consummate the transactions contemplated by this
Agreement; provided, however, that no party shall be obligated to

 

78

 

pay any consideration (or grant any financial
accommodation) to any third party from whom consent or approval is requested.

 

(b)           The Seller shall use, and shall cause its Subsidiaries to
use,  commercially reasonable efforts to
obtain, at the earliest practicable date, the requisite investor approval of
such amendments to the fund documents of any Fund as the Purchaser may propose
(“Fund Amendments”).  The
Purchaser may designate as “Excluded Assets” any assets or capital stock of any
entity serving as the general partner or managing member of, or the management
company or investment advisor to, any Fund whose investors do not approve Fund
Amendments by the Closing or may elect to delay the purchase and sale of any
such assets or capital stock until such time as such Fund Amendments are
approved; provided, however, that no such action may be
undertaken if such action would delay the Closing.

 

7.5           Regulatory Approvals.  Subject to all of the terms and conditions
hereof:

 

(a)           Each of the parties hereto shall cooperate with the other
parties and use their respective commercially reasonable efforts to promptly (i) take,
or cause to be taken, all actions, and do, or cause to be done, all things
necessary, proper or advisable to cause the other party’s conditions to Closing
to be satisfied as promptly as practicable and to consummate the Closing in the
most expeditious manner practicable, and (ii) obtain all approvals,
consents, registrations, permits, authorizations and other confirmations from
any Governmental Body or third party necessary, proper or advisable to
consummate the transactions contemplated by this Agreement.  In furtherance and not in limitation of the
foregoing, each party hereto agrees to cooperate to make the appropriate
application to FINRA and each party hereto agrees to make an appropriate filing
of a Notification and Report Form pursuant to the HSR Act with respect to
the transactions contemplated by this Agreement as promptly as practicable and
in any event within ten (10) Business Days of the Execution Date and to
supply as promptly as practicable any additional information and documentary
material that may be requested pursuant to the HSR Act and use its commercially
reasonable efforts to take, or cause to be taken, all other actions consistent
with this Section 7.5 necessary to cause the expiration or
termination of the applicable waiting periods under the HSR Act (including any
extensions thereof) as soon as practicable (including by requesting early
termination of the waiting period under the HSR Act).

 

(b)           Each of the parties hereto shall use its commercially
reasonable efforts to (i) cooperate in all respects with each other in
connection with any filing or submission with a Governmental Body in connection
with the transactions contemplated by this Agreement and in connection with any
investigation or other inquiry by or before a Governmental Body relating to the
transactions contemplated by this Agreement, including any such proceeding initiated
by a private party, and (ii) keep the other party reasonably informed in
all material respects and on a reasonably timely basis of any material
communication received by such party from, or given by such party to, the FTC,
the Antitrust Division of the Department of Justice, FINRA, the SEC or any
other 

 

79

 

Governmental Body, in each case regarding any
of the transactions contemplated by this Agreement.

 

7.6           Further Assurances; Etc.

 

(a)           Subject to all of the terms and conditions hereof, each of
the parties shall use its commercially reasonable efforts to (i) take all
actions, both prior to and after the Closing, necessary or appropriate to
consummate and implement the transactions contemplated by this Agreement and (ii) cause
the fulfillment at the earliest practicable date of all of the conditions to
the other party’s obligations to consummate the transactions contemplated by
this Agreement.  Without limiting the
generality of the foregoing, from the Execution Date until the Closing, the
Seller shall not, and shall cause its Affiliates not to, assign or otherwise
transfer from the Business to any Person any asset, right, property or interest
of a type treated or expected to be treated as a Purchased Asset under this
Agreement, or assign or otherwise transfer to the Business any Liability of a
type treated or expected to be treated as an Excluded Liability under this
Agreement.  Parent will take all actions,
necessary and desirable, to the extent reasonably within its power and control
to cause any of its Subsidiaries, which is the owner of any of the Purchased
Assets that has otherwise not executed and delivered this Agreement, to execute
and deliver to Purchaser a joinder to this Agreement.

 

(b)           Without limiting the foregoing, on and after the Closing
Date, each party shall cooperate with the other party, without any further
consideration, to cause to be executed and delivered, all instruments,
including instruments of conveyance, assignment and transfer, and to make all
filings with, and to obtain all consents, under any permit, license, agreement,
indenture or other instrument, and to take all such other actions as either
party may request to take by any other party from time to time, consistent with
the terms of this Agreement, in order to effectuate the provisions and purposes
of this Agreement and the Ancillary Agreements and, to the extent necessary, (i) the
transfer to the Purchaser or any Subsidiary of the Purchaser of any asset used
primarily in connection with the conduct of the Business, or that is otherwise
necessary to cause the representation of Seller in Section 4.18 to
be true and correct and (ii) the transfer of any Excluded Asset from the
Purchaser or any Subsidiary of the Purchaser to any Seller and the assumption
by the Seller of any Excluded Liability; provided that neither party
shall be obligated to make any payment, incur any obligation or grant any
concession to any Governmental Body in connection therewith, other than the
payment of ordinary and customary fees.

 

(c)           In the event that at any time and from time to time
(whether prior to, at or after the Closing), Seller or any of its Affiliates
shall receive or otherwise possess any Purchased Asset or any asset that is the
property of the Purchaser or any of its Subsidiaries, Seller shall or shall
cause such Affiliate to promptly transfer such asset in the form received to
the Purchaser or any Subsidiary of the Purchaser.

 

(d)           In the event that at any time and from time to time
(whether prior to, at or after the Closing), the Purchaser or any Subsidiary of
the Purchaser shall receive 

 

80

 

or otherwise possess any Excluded Asset,
Purchaser shall cause such member of the Company Group to promptly transfer
such Excluded Asset in the form received to Seller.

 

(e)           As soon as practicable, and in any event prior to the
Closing, Purchaser may request Seller to consider establishing and if so
requested Seller shall use commercially reasonable efforts to establish a new
limited liability company formed and licensed and registered as a broker dealer
and investment adviser with the SEC, FINRA, other Self-Regulatory
Organizations, Government Bodies, and U.S. states and territories and
subsequently having the accounts of any existing broker dealer/investment
adviser conducting the Business transferred to such new entity.

 

(f)            Seller shall use commercially reasonable efforts to
deliver the Audited Financial Statements to Purchaser as promptly as
practicable following the Execution Date, and in any event prior to February 28,
2009.

 

7.7           Preservation of Records.  The Seller and the Purchaser agree that each
of them shall preserve and keep the business records held by them relating to
the Business for a period of seven years (or such longer period as may be
required under applicable Law) from the Closing Date and shall make such
business records available to the other as may be reasonably required by such
party in connection with, among other things, any insurance claims by, Legal
Proceedings or tax audits against or governmental investigations of the Seller
or the Purchaser or any of their respective Affiliates to the extent required
to enable the Seller or the Purchaser to comply with their respective obligations
under this Agreement and each other agreement, document or instrument
contemplated hereby or thereby; provided, however, that the
Seller may deliver such business records to the Purchaser if the Seller winds
down its affairs prior to the end of such seven year period.

 

7.8           Publicity. 
Neither the Seller nor the Purchaser shall issue, or permit any of its
respective Affiliates to issue, any press release or public announcement
concerning this Agreement or the transactions contemplated hereby without
obtaining the prior written approval of the other party hereto, which approval
will not be unreasonably withheld or delayed, unless, in the sole judgment of
the Seller or the Purchaser, as applicable, disclosure is otherwise required by
applicable Law or by the applicable rules of any stock exchange on which
the Parent, Seller or the Purchaser lists securities.

 

7.9           Employee Benefits.

 

(a)           Effective as of the Execution Date, Purchaser shall be
entitled to offer, or to cause one of its Subsidiaries to offer, to employ each
Offeree with the Purchaser or any of its Subsidiaries.  For purposes of this Agreement, the term “Offeree”
means each active employee of Seller or any Subsidiary of Seller (other than an
employee of an Acquired Subsidiary but including an employee of any member of
the Company Group that becomes one of the entities comprised by the Seller
pursuant to Section 7.23), who has been employed primarily in
connection with the Business as of the Execution Date.  Each Offeree to whom Purchaser or one of its
Subsidiaries has extended such an 

 

81

 

offer and who accepts Purchaser’s, or one of
its Subsidiary’s, offer of employment, together with each person who is
employed at Closing by an Acquired Subsidiary or whose employment transfers to
Purchaser or a Subsidiary of Purchaser automatically by operation of law, shall
be referred to herein as a “Transferred Employee”. An Offeree who
reports for work and performs work for the entity (Purchaser or its Subsidiary,
as applicable) that offered such Offeree employment pursuant to the first
sentence of this Section 7.9(a) on the first Business Day
immediately following the Closing on which such Offeree is scheduled to work
shall be deemed for all purposes of this Agreement to have accepted such entity’s
(Purchaser’s or its Subsidiary’s, as applicable) offer of employment and shall
be deemed to be a Transferred Employee. 
Each Person who is not a Transferred Employee shall be referred to
herein as an “Excluded Employee”. 
Under the employee benefit plans, policies and arrangements established
by Purchaser or its Subsidiaries after the Closing (the “Company Plans”)
covering any Transferred Employee, each Transferred Employee shall be credited
with his or her period of service with the Seller or the applicable member of
the Company Group and their respective predecessors before the Closing Date,
for purposes of eligibility and vesting (other than with respect to new equity
plans or awards) and not for benefit accrual purposes, to the extent credited
under any similar type of employee benefit plan, policy or arrangement
applicable to such Transferred Employee immediately prior to the Closing Date; provided
that the foregoing shall not apply to the extent that its application would
result in a duplication of benefits with respect to the same period of
service.  The Purchaser shall cause its
Subsidiaries to provide uninterrupted medical benefits coverage of Transferred
Employees and their eligible spouses and dependents from and after the Closing
Date under one or more Company Plans, and such Company Plans shall not deny the
Transferred Employees coverage on the basis of pre-existing conditions (except
to the extent such a denial of coverage was in effect under a comparable plan applicable
to such Transferred Employee immediately prior to the Closing Date) and shall
credit the Transferred Employees for any deductibles and out-of-pocket expenses
paid in the year of initial participation in the Company Plans.  Seller shall not, prior to Closing, take
action to terminate the Lehman Brothers Holdings Inc. Retirement Plan without
first consulting with Purchaser.

 

(b)           After the Closing, the Purchaser shall, or shall cause one
or more of its Subsidiaries to, assume and be solely responsible for providing
and paying (i) cash incentive compensation and/or bonuses to Transferred
Employees with respect to any performance periods that have started as of the
Closing Date but have not ended on or prior to the Closing Date, including with
respect to the portion of the performance period prior to the Closing Date, (ii) accrued
and unpaid salaries or wages as of the Closing Date, (iii) unused vacation
or other paid time off to the extent earned as of the Closing Date, and (iv) any
and all educational or training assistance for Transferred Employees for
academic or training periods that have not been completed as of the Closing
Date in accordance with the terms of the applicable educational or training
program (a summary of which has been provided to the Purchaser).  For the avoidance of doubt, except as
otherwise agreed by any Transferred Employee or group of Transferred Employees
with Purchaser or a Subsidiary of Purchaser, all payments of bonuses and
incentive 

 

82

 

compensation should be made substantially in
accordance with the terms and conditions of the plans, policies and
arrangements in effect immediately prior to the Closing for such Transferred
Employees except as permitted by Section 7.9(c).

 

(c)           With respect to the period from December 1, 2007,
until the Closing Date, the Seller shall, and shall cause the Company Group, to
accrue for liabilities in respect of incentive compensation and bonuses payable
to Transferred Employees in amounts no less than the amounts set forth on Schedule
7.9(c) and based on the formula specified thereon (per diem in the
case of employees customarily paid discretionary bonuses) (regardless of when
such incentive compensation and bonuses are expected to be paid) and the Company
Group shall (and Seller on or prior to the Closing, and Purchaser following
Closing, shall cause its Subsidiaries to) pay all such formulaic incentive
compensation and bonuses, and, except as the Purchaser otherwise agrees in
writing, 100% of such discretionary incentive compensation and bonuses, to
Transferred Employees in cash at the time in the year when compensation of such
type has been paid according to past practices, as specified on Schedule
7.9(c); for purposes of such accruals, amounts previously paid in forms
other than cash shall be deemed not to have been paid.

 

(d)           On or prior to Closing, Seller shall, and shall cause each
member of the Company Group to, accelerate vesting of all employee benefits of
Transferred Employees provided under the Lehman Brothers Holdings Inc.
Retirement Plan and the Lehman Brothers Savings Plan.

 

(e)           Parent shall, and shall cause its Subsidiaries to, use
reasonable efforts to consult with Purchaser with respect to the allocation and
timing of the payment of bonuses to be paid to any employee who is employed
primarily in connection with the Business by Parent or any of its Subsidiaries.

 

(f)            The Seller undertakes to the Purchaser to provide all
material information within 30 Business Days after execution of this Agreement
in relation to any act or omission to which a member of the Company Group or
any of its directors, officers or employees is or was party which, in the light
of all relevant factors (including the factors referred to in sections 38(7) and
43(7) of the UK Pensions Act), may in the reasonable opinion of the Seller
cause the Pensions Regulator to exercise its powers so as to impose liabilities
on the Purchaser, the Purchaser’s Subsidiaries, or any member of the Company
Group, or any of their directors, officers or employees under sections 38-51 of
the UK Pensions Act (“Relevant Transaction”).

 

(g)           The Seller agrees to use reasonable commercial efforts to
reach agreement as soon as practicable with the trustees of the Lehman Brothers
Pension Scheme (UK), the Pensions Regulator and the PPF, to obtain a clearance
statement in favour of the Companies, the Purchaser and Purchaser’s
Subsidiaries from the Pensions Regulator, under sections 42 and 46 of the UK
Pensions Act in respect of the following:

 

(i)            the transaction governed by this Agreement; and

 

83

 

(ii)           if any member of the Company Group or any of its
directors, officers or employees is or was a party to any Relevant Transaction,
the Relevant Transaction, under which the Pensions Regulator confirms (on a
basis that is not conditional upon any member of the Company Group or any
associated or connected company fulfilling any obligations, other than a
one-off payment to the Lehman Brothers Pension Scheme (UK) or the PPF) that it
will not issue to any member of the Company Group or any of its directors, officers
or employees:

 

(A)          a contribution notice under sections
38, 47 or 55 of the UK Pensions Act or (to the extent the Pensions Regulator is
willing to provide such confirmation) under forthcoming amendments to the UK
Pensions Act (or any other legislation) made in connection with the
announcement by the UK Department for Work and Pensions dated 14 April 2008;
or

 

(B)           a financial support direction under
section 43 of the UK Pensions Act.

 

(h)           It is agreed that Seller and its advisers shall prepare
and submit the clearance application to the Pensions Regulator and shall have
principal conduct of all matters relating to the clearance application and
correspondence with the Pensions Regulator.  
Purchaser agrees to cooperate with the Parent and the Seller in all
matters relating to the process described in Section 7.9(g) above,
including without limitation by:

 

(i)            providing any such information as may be within the
control of the Purchaser and is necessary to respond to questions raised by the
trustees, the Pensions Regulator or the PPF; and

 

(ii)           keeping Seller promptly informed of all communications
received from the Pensions Regulator, the PPF and the trustees of the Lehman
Brothers Pension Scheme (UK) in relation to the clearance application and
providing Seller with draft copies of all communications relevant to the
trustee discussions and clearance application at such time as will allow Seller
a reasonable opportunity to comment on such submission or communication before
it is submitted; take into account any reasonable comments and promptly provide
Seller with a copy of all such communication in the form submitted except that
confidential information contained in such submission or communication may be
redacted.

 

(i)            At the Purchaser’s option and to such extent as Purchaser
may reasonably specify, the Purchaser may directly or through one or more
designated parties participate in the process referred to in Section 7.9(g) above,
and for these purposes hold discussions with the trustees of the Lehman Brothers
Pension Scheme (UK), the Pensions Regulator and the PPF provided that the
Purchaser (or any party designated by the Purchaser) will not hold or initiate
any independent discussions with such trustees, the Pensions Regulator or the
PPF without inviting and giving the Seller a reasonable opportunity to join
such discussions.

 

84

 

(j)            In the event that a payment is required to be made to the
Lehman Brothers Pension Scheme (UK) or the PPF to enable a clearance statement
to be issued by the Pensions Regulator in accordance with Section 7.9(g) the
Seller and Purchaser agree that, to the extent that such payment has not been
made by the Parent or any of its subsidiaries prior to Closing, the amount of
such payment shall be included as a Liability in the calculation of the Closing
Other Liabilities Adjustment.

 

(k)           Nothing contained herein shall be construed as requiring,
and neither the Seller nor any member of the Company Group shall take any
action that would have the effect of requiring the Purchaser to continue any
specific employee benefit plan or to continue the employment of any specific
person.  Nothing in this Agreement is
intended to establish, create or amend, nor shall anything in this Agreement be
construed as establishing, creating or amending, any employee benefit plan,
practice or program of the Purchaser, any of its Affiliates or any Company
Benefit Plan, nor shall anything in this Agreement create or be construed as
creating any contract of employment or as conferring upon any Transferred
Employee or upon any other person, other than the parties to this Agreement in
accordance with its terms, any rights to enforce any provision of this
Agreement under ERISA or otherwise.

 

7.10         Tax Matters.

 

(a)           The Purchaser shall provide the Seller with draft Tax
Returns for any of the Acquired Subsidiaries for any Straddle Period, as well
as any other Tax Return of any of the Acquired Subsidiaries that could
adversely affect the Seller.  The
Purchaser shall provide to the Seller any Tax Return described in the preceding
sentence at least thirty (30) days prior to the due date for filing such Tax
Returns, together with a statement setting forth the amount of Seller Taxes
attributable to such Tax Returns for which the Seller would be responsible
pursuant to Section 9.2 (after taking into account any adjustment
to the Closing Target Cash) (the “Tax Statement”), and at least fifteen
(15) days prior to the due date for the filing of such Tax Returns, the Seller
shall notify the Purchaser of the existence of any objection(s) the Seller
may have to any items set forth on such draft Tax Return or Tax Statement, and
if, after consulting in good faith, the Purchaser and the Seller are unable to
resolve such objection(s), such objection(s) shall be resolved as provided
in Section 7.10(b).  The
Seller shall pay to the relevant Acquired Subsidiary the Taxes as calculated on
the Tax Statement at least five (5) days prior to the due date (including
any extensions) for the filing of the Tax Return to which the Tax Statement
relates.  Notwithstanding anything to the
contrary in this Section 7.10(a), neither the Purchaser nor any of
its Affiliates (including, after the Closing, the Acquired Subsidiaries) shall,
without the prior written consent of the Seller (such consent not to be
unreasonably withheld, conditioned or delayed), make or change any election of
or with respect to any of the Acquired Subsidiaries, or amend, refile or
otherwise modify (or grant an extension of any applicable statute of
limitations with respect to) any Tax Return of any of the Acquired
Subsidiaries, if the making or changing of such election, or the amendment,
refiling or modification of such Tax Return, could increase the amount of 

 

85

 

Seller Taxes for which the Seller would be
required to indemnify the Purchaser pursuant to Section 9.2.

 

(b)           With respect to any Tax Return described in Section 7.10(a),
if, after consulting in good faith with one another as provided in Section 7.10(a),
the Seller and the Purchaser are unable to resolve any objection(s) with
respect to any items on such Tax Return, such objection(s) shall be
referred to an independent accounting firm mutually acceptable to the Purchaser
and the Seller for resolution on a basis consistent with the past practices of
the Acquired Subsidiaries with respect to such items.  If such independent accounting firm is unable
to make a determination with respect to any disputed item within five (5) days
prior to the due date for the filing of the Tax Return in question, then the
Purchaser may file such Tax Return on the due date therefor without such
determination having been made and without the Seller’s consent.  Notwithstanding the filing of such Tax Return,
such independent accounting firm shall make a determination with respect to any
disputed item, and the amount of Seller Taxes for which the Seller is
responsible under Section 9.2. shall be as determined by such
independent accounting firm.  The fees
and expenses of such independent accounting firm shall be paid one-half by the
Purchaser and one-half by the Seller.

 

(c)           The Purchaser, the Seller, and the Acquired Subsidiaries
shall, to the extent permitted by applicable Law, elect with the relevant
Governmental Body to treat for all purposes the Closing Date as the last day of
a taxable period of each Acquired Subsidiary (including Acquired Subsidiaries
that are treated as partnerships for U.S. tax purposes).  The Purchaser, the Seller and the Acquired
Subsidiaries shall cooperate fully, as and to the extent reasonably requested
by each other, in connection with the filing of Tax Returns and any audit,
inquiry, litigation or other proceeding with respect to Taxes.  Such cooperation shall include the retention
and (upon the other party’s request) the provision of records and information
which are reasonably relevant to any such audit, inquiry, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder.  From the Execution Date until
Closing, the Seller shall assist Purchaser, as and to the extent reasonably
requested, in completing the Tax due diligence in respect of the Acquired
Subsidiaries or Purchased Assets, including by providing the Purchaser with
records and information, which are reasonably relevant to such inquiry, or
making employees available on a mutually convenient basis to provide additional
information or explanation. The party requesting any such information will bear
all of the reasonable out-of-pocket costs and expenses reasonably incurred in
connection with providing such information.

 

(d)           The Purchaser shall have the sole right to control any
audit or examination by any Governmental Body, initiate any claim for refund,
and contest, resolve and defend against any assessment for additional Taxes,
notice of Tax deficiency or other adjustment of Taxes of, or relating to, the
income, assets or operations of any Acquired Subsidiary (collectively, “Acquired
Subsidiary Tax Proceedings”); provided, however, if any
Acquired Subsidiary Tax Proceeding could reasonably be expected to increase the
amount of Seller Taxes for which Seller would be responsible pursuant to 

 

86

 

Section 9.2, or
could reasonably be expected to otherwise materially adversely affect the
Seller or its Affiliates, then the Purchaser shall (i) keep the Seller
fully and timely informed with respect to such Acquired Subsidiary Tax
Proceedings, (ii) in good faith, allow the Seller to make comments to the
Purchaser regarding the conduct of or positions taken in any such Acquired
Subsidiary Tax Proceedings, (iii) allow the Seller to participate at its
own expense in any such Acquired Subsidiary Tax Proceedings, and (iv) not
enter into any settlement or compromise with respect to such Acquired
Subsidiary Tax Proceedings without the prior written consent of the Seller
(such consent not to be unreasonably conditioned, withheld or delayed).

 

(e)           Upon the receipt by the Purchaser or any Acquired
Subsidiary of, or upon filing of any Tax Return claiming a credit for, any
Excluded Asset described in clause (r) of the definition of “Excluded
Assets”, the Purchaser shall pay to the Seller an amount equal to such Excluded
Asset within ten (10) days after receipt thereof or within ten (10) days
of the filing of such Tax Return, as applicable; provided that, to the
extent any portion of such refund or claim is subsequently disallowed, the Seller
will refund to the Purchaser an amount equal to the disallowed portion.

 

(f)            The Purchaser and the Seller shall in good faith
determine the allocation of the Purchase Price among the Purchased Assets and
the assets of the Acquired Subsidiaries in accordance with the provisions of Section 1060
of the Code and the Treasury Regulations issued thereunder (the “Allocation”),
including in preparing any U.S. Tax filings or other forms required to be filed
in connection with such allocation. The Purchaser and the Seller agree that (i) they
shall file all U.S. Tax Returns and other forms consistent with the Allocation;
(ii) any subsequent adjustments to the Purchase Price shall be reflected
in the Allocation in a manner consistent with the Allocation and applicable
law; and (iii) they shall consult with one another with respect to any Tax
audit, controversy or litigation relating to the Allocation by any Taxing
Authority.  The Seller further agrees
that with respect to any Acquired Subsidiary that is classified as a “partnership”
within the meaning of Treasury Regulation Section 301.7701-2, the Seller
shall, where permitted, file or cause each such Acquired Subsidiary to file, or
have in effect, an election pursuant to Section 754 of the Code for the
taxable period ending on the Closing Date. 
Each such Acquired Subsidiary described in the preceding sentence shall
prepare the statement of adjustments described in Treasury Regulation Section 1.743-1(k)(1) consistently
with the Allocation and no party shall take any position on any Tax Return that
is inconsistent therewith.

 

(g)           Prior to the Closing, the Seller shall cancel or cause to
be cancelled any tax sharing, allocation, indemnity or similar agreement or
arrangement  to which any Acquired
Subsidiary is a party.

 

(h)           Except as required by Law, Seller may not amend, refile,
revoke or otherwise modify or cause or permit to be amended, refiled, revoked
or otherwise modified any Tax Return or Tax election of Seller (as relates to
the Purchased Assets), any Subsidiary of the Seller or any Acquired Subsidiary
that affects or may affect the Tax liability of Purchaser or any Acquired
Subsidiary with respect to a taxable year ending 

 

87

 

after the Closing Date without the prior
written consent of Purchaser (such consent not to be unreasonably conditioned,
withheld or delayed); provided, however, nothing in this Section 7.10(h) shall
prohibit or restrict the Seller or any of its Affiliates from making any
election, entering into any closing agreement, settling any Tax liability,
consenting to any extension or waiver of limitations period, filing, amending
or modifying any Tax Return or changing any Tax accounting method or tax period
with respect to any consolidated, combined or unitary group of which the Seller
or any of its Affiliates is or was a member, except to the extent that such
action would increase the Tax liability of any Acquired Subsidiary for any
period ending after the Closing Date.

 

(i)            The Seller hereby agrees to undertake all actions
necessary to transfer or cause to be transferred at the Purchaser’s request any
Purchased Assets from any member of the Company Group, which may be liable for
any Seller Taxes described in clause (iii) or (iv) of the definition
of “Seller Taxes”, to a transferee entity designated by Purchaser, including by
subjecting such member of the Company Group to a Chapter 11 proceeding or a
Chapter 7 proceeding.  The Seller further
agrees to cooperate with Purchaser to structure and implement the sale of any
non-U.S. Acquired Subsidiary as a sale of assets for U.S. Tax purposes,
including without limitation by converting such Acquired Subsidiary from a “per-se”
corporation within the meaning of the Treasury Regulations issued under Code Section 7701
to an “eligible entity” prior to Closing and by filing entity classification
elections as requested by Purchaser with respect to any non-US Acquired
Subsidiary; provided, however, the Seller shall not be required
to implement any such structure, undertake any such sale or make any such
election, if doing so could reasonably be expected to result in material
adverse economic or tax consequences to the Seller or any of its Affiliates.

 

Seller shall and shall cause any member of the Company Group to promptly
transfer to Seller’s Affiliates, immediately prior to the Closing, any assets
(including Contracts) of such member of the Company as the Purchaser may
designate by written request.

 

7.11         [Reserved].

 

7.12         Client Brokerage Consents.  Promptly and in any event within 30 Business
Days following the Execution Date, to the extent required by applicable Law or
pursuant to a brokerage agreement, the Seller shall and shall cause the
applicable members of the Company Group to inform each of its applicable brokerage
clients in writing of the transactions contemplated by this Agreement by
sending such client a notice thereof, and, other than with respect to the
Public Funds (which are addressed in Section 7.14 of this
Agreement), shall use its reasonable best efforts to seek such client’s consent
to the continuation of its brokerage agreement with the applicable member of
the Company Group or a Subsidiary of the Purchaser following consummation of
the transactions contemplated hereby, which notice shall comply with applicable
Law.  To the extent consistent with
applicable Law or SEC or FINRA pronouncements or unless affirmative consent is
required by the applicable agreement, such consent may take the form of a
so-called implied or negative consent. 
The Purchaser will provide to the Seller 

 

88

 

all information regarding the Purchaser and
its Affiliates reasonably required in connection therewith.  The Seller shall deliver drafts of all such
consents and related materials to the Purchaser a reasonable time prior to the
mailing or other distribution of such documents to any Client in order to
afford the Purchaser an opportunity to fully review and comment on such
documents, and the Purchaser shall have the right to so review and comment on
such documents.  The Purchaser will
provide to the Seller all information regarding the Purchaser and its
Affiliates reasonably required to be included in the consents and related
materials and the Purchaser covenants that any information related to the
Purchaser that is provided by the Purchaser or its Affiliates or their
respective operations or plans will not contain, at the time such materials are
furnished to the Seller, 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.  The Seller
covenants that all other information contained in the consents and related
materials will not contain, at the time such materials are furnished to any
client, 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.

 

7.13         Client Investment Advisory Consents.  Promptly and in any event within 30 Business
Days following the Execution Date, to the extent required by applicable Law or
pursuant to an investment advisory agreement, the Seller shall, or shall cause
the applicable members of the Company Group to, inform each Client in writing
of the transactions contemplated by this Agreement by sending such Client a
notice thereof, and, other than with respect to the Public Funds (which are
addressed in Section 7.14 of this Agreement), shall use its
reasonable best efforts to seek such Client’s consent to the continuation of
its investment advisory agreement with the applicable member of the Company
Group or a Subsidiary of the Purchaser following consummation of the
transactions contemplated hereby, which notice shall comply with applicable
Law.  To the extent consistent with
applicable Law or SEC pronouncements or unless affirmative consent is required
by the applicable agreement, such consent may take the form of a so-called
implied or negative consent; provided that, in seeking any such Client
consent through such implied or negative consent, the Seller or the applicable
member of the Company Group shall provide, no less than 45 days prior to the
Closing, written notice to the Client that the applicable member of the Company
Group or Subsidiary of the Purchaser will continue to provide investment advice
to the Client, pursuant to the Client’s existing investment advisory agreement,
after the Closing. The Seller shall deliver drafts of all such consents and
related materials to the Purchaser a reasonable time prior to the mailing or
other distribution of such documents to any Client in order to afford the
Purchaser an opportunity to fully review and comment on such documents, and the
Purchaser shall have the right to so review and comment on such documents.  The Purchaser will provide to the Seller all
information regarding the Purchaser and its Affiliates reasonably required to
be included in the consents and related materials and the Purchaser covenants
that any information related to the Purchaser that is provided by the Purchaser
or its Affiliates or their respective operations or plans will not contain, at
the 

 

89

 

time such materials are furnished to the
Seller, 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.  The Seller covenants
that all other information contained in the consents and related materials will
not contain, at the time such materials are furnished to any client, 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.

 

7.14         Public Fund Investment Advisory Consents.

 

(a)           As soon as practicable after the Execution Date, the
Seller shall, or shall cause the applicable member of the Company Group to, use
its reasonable best efforts to, in accordance with applicable Law, (i) obtain,
with respect to each Public Fund, the approval by the relevant Public Fund’s
board of directors or board of trustees acting in accordance with Section 15(c) of
the Investment Company Act of a new investment advisory agreement with the
applicable member of the Company Group on terms that are no less favorable to
the applicable member of the Company Group than the terms of the existing
investment advisory agreement with such Public Fund (each such new investment
advisory agreement, a “New Public Fund Investment Advisory Agreement”);
and (ii) obtain, with respect to each Public Fund, the approval by the
relevant Public Fund’s board of directors or board of trustees of the
continuation after the Closing, or the replacement, of any other existing
agreement with the applicable member of the Company Group, on terms that are no
less favorable to the applicable member of the Company Group than the terms of
such existing agreement with such Public Fund, but only to the extent any such
other contract will terminate as a result of the consummation of the
transactions contemplated by this Agreement (the “Other Public Fund
Agreements”).

 

(b)           Promptly after obtaining the approvals set forth in Section 7.14(a) above,
the Seller shall, or shall cause the applicable member of the Company Group to,
use its reasonable best efforts to cause to be prepared and filed with the SEC
proxy materials for meetings of the shareholders of each of the Public Funds
and to cause proxy solicitations to be undertaken in order that such meetings
be held and concluded as early as practicable prior to the Closing.  At such shareholder meetings, the approval of
the applicable shareholders will be sought for (i) the New Public Fund
Investment Advisory Agreements; (ii) to the extent required by Law to be
approved by shareholder vote, the Other Public Fund Agreements; and (iii) such
other matters related to the transactions contemplated by this Agreement as may
be required by Law to be approved by shareholder vote.  The Seller shall deliver drafts of such proxy
materials to the Purchaser a reasonable time prior to filing any such documents
with the SEC and prior to mailing such documents to shareholders of the Public
Funds in order to afford the Purchaser an opportunity to fully review and
comment on such documents, and the Purchaser shall have the right to so review
and comment on such documents.

 

90

 

(c)           The Seller covenants that such proxy materials for each of
the Public Funds will comply as to form in all material respects with the
applicable rules of the SEC.

 

(d)           Each party covenants that any information describing such
party or its Affiliates or their respective operations or plans or provided by
such party or its Affiliates that is contained in any proxy 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.

 

(e)           In the event that, with respect to a Public Fund, the
Seller or a member of the Company Group expects that it will be unable to
obtain the approvals of the shareholders of the Public Fund in accordance with Section 7.14(b) hereof
prior to the Closing, the Seller or the applicable member of the Company Group
shall use its reasonable best efforts to seek such approvals as soon as
possible following the Closing (but in no event later than 150 days following
the Closing), and shall request the board of directors or board of trustees of
such Public Fund to approve, before the Closing and in conformity with Rule 15a-4
under the Investment Company Act, an interim investment advisory agreement to
be effective immediately following the Closing, for such Public Fund,
containing the same terms and conditions as the existing investment advisory
agreement (except as required under Rule 15a-4 under the Investment
Company Act) with such Public Fund (each, a “New Public Fund Interim
Investment Advisory Agreement”).

 

(f)            The Seller shall use its reasonable best efforts to cause
the Public Funds to timely amend the Public Funds’ Registration Statements on Form N-1A
or Form N-2, as applicable, pursuant to Rule 485(a) under the
Securities Act to reflect the consummation of the transactions contemplated by
this Agreement and the approval of the New Public Fund Investment Advisory
Agreements.

 

(g)           For purposes of this Agreement, any New Public Fund
Investment Advisory Agreement, New Public Fund Interim Investment Advisory
Agreement and Other Public Fund Agreement may, at the election of the Purchaser
prior to seeking the relevant approvals of such agreement, be with a Subsidiary
of the Purchaser instead of the applicable member of the Company Group on terms
at least as favorable to such Subsidiary as would have been the case if such
agreement had been with the applicable member of the Company Group.

 

7.15         Section 15 of the Investment Company Act.  The parties each agree to use all
commercially reasonable efforts to ensure compliance with the requirements of Section 15(f) of
the Investment Company Act in respect of this Agreement and the transactions
contemplated hereunder.  In that regard,
the Purchaser shall conduct its business and shall, subject to applicable
fiduciary duties in relation to any Public Fund, use its commercially
reasonable efforts to cause each of its Subsidiaries 

 

91

 

to conduct their business, so as to enable (i) for
a period of three years after the Closing Date, at least 75% of the members of
each board of directors/trustees of each Public Fund not to be (A) “interested
persons” (as that term is defined in the Investment Company Act) of the
investment adviser of the relevant Fund after the Closing, or (B) “interested
persons” (as that term is defined in the Investment Company Act) of the
investment adviser of the relevant Fund immediately prior to the Closing and (ii) there
not to be imposed an “unfair burden” (as that term is defined in the Investment
Company Act) on any Public Fund as a result of the transactions contemplated
hereby, or any express or implied terms, conditions or understandings
applicable thereto; provided, however, that if the Purchaser
shall have obtained an order from the SEC exempting it from the provisions of Section 15(f),
while still maintaining the “safe harbor” provided by Section 15(f), then
this covenant shall be deemed to be modified to the extent necessary to permit
the Purchaser to act in any manner consistent with such SEC exemptive order.

 

7.16         Administration. 
Promptly after the Execution Date, the parties will use their
commercially reasonable efforts to structure and document an arrangement
whereby Pricewaterhouse Coopers LLP (in its capacity as the administrator of
Lehman Brothers International (Europe), Lehman Brothers Holdings plc, Lehman
Brothers UK RE Holdings Limited and Lehman Brothers Limited, and in the case of
any other assets intended to be part of the Purchased Assets subject to or
under administration, receivership, bankruptcy or other similar insolvency
proceeding in any non-U.S. jurisdiction, any Person appointed to manage such
asset, the “Administrator”) would be asked to agree to (a) transfer
any of the Purchased Assets that are subject to the dominion and control of the
Administrator (the “Administered Assets”) pursuant to the terms and
conditions of this Agreement and (b) a transitional operating plan to
maintain the ordinary course operations of the relevant operations of the
Business (at the expense of the Seller if requested by the Administrator) under
the dominion and control of such Administrator in exchange for receipt from
Seller (or the applicable Subsidiary) of a mutually agreed portion of the
Purchase Price hereunder to be agreed by Parent and the Administrator.  To facilitate the transfer of the
Administered Assets, Purchaser will organize one or more entities into which the
Administered Assets would be transferred at Closing and would use its
commercially reasonable efforts to obtain, on or prior to Closing, any
consents, licenses or other authorizations necessary to own and operate the
Administered Assets from each relevant Governmental Body, including the Financial
Services Authority and the Irish Financial Regulator, as applicable.

 

7.17         Qualification of the Public Funds.  The Seller will prior to the Closing use its
reasonable best efforts to cause each of the Public Funds to continue to
qualify as a “regulated investment company” within the meaning of Section 851
of the Code, and will not take any action prior to the Closing that would
reasonably be expected to prevent any of the Public Funds from qualifying as
such a “regulated investment company.” 
In addition, the Seller will use its best efforts to cause the Public
Funds to take no action prior to the Closing that would be inconsistent with
any Public Fund’s prospectus and statements of additional information or other
offering, advertising or marketing materials.

 

92

 

7.18         [Reserved].

 

7.19         Real Property Leases.

 

(a)           On or prior to the Closing Date, the Subleased Real
Property Leases shall be assumed by the Seller and each Subleased Real Property
Lease shall be assigned to BarCap.

 

(b)           With respect to each Subleased Real Property Lease, Seller
shall use commercially reasonable efforts to cause BarCap to (i) on or
prior to the Closing Date, negotiate in good faith, in accordance with, and
limited by Seller’s rights under the BarCap APA, with the Purchaser a sublease
agreement (a “Sublease”) on mutually agreeable terms, pursuant to which
a portion of the demised premises under such underlying Subleased Real Property
Lease (such portion of the premises to be agreed upon by the parties) shall be
subleased to the Purchaser, and (ii) execute and deliver on the Closing
Date such mutually acceptable Sublease. The Sublease shall be subject to the
terms of the applicable underlying Subleased Real Property Lease.

 

(c)           Seller’s obligation to enter into, or to cause BarCap to
enter into, Subleases in accordance with this Section 7.19 is
subject to the receipt by Seller or BarCap, as applicable, of all applicable
Landlord Consents. BarCap or Seller, as applicable and Purchaser will cooperate
and use commercially reasonable efforts in obtaining such Landlord Consents
with respect to the Subleases; provided, however, that Seller
shall not be obligated to incur any expenses in connection with obtaining such
Landlord Consents.  BarCap or Seller, as
applicable and Purchaser shall otherwise comply in all respects with the terms
and provisions of the underlying Subleased Real Property Lease in connection
with the execution and delivery of the applicable Sublease.

 

(d)           (i)  Notwithstanding the above, in the event that,
following the Closing, BarCap, through an assignment from Seller, obtains a
leasehold interest that continues to be used or occupied by an employee of
Purchaser or its Subsidiaries, and such leasehold interest is not subleased by
BarCap to Purchaser or its designees, then, to the extent permitted under the
terms and conditions of the BarCap APA and subject to Purchaser’s commercially
reasonable efforts to re-locate such persons, Seller shall cause BarCap to
permit the Purchaser to continue to occupy or use such property to the same
extent and in the same manner as prior to the Closing for a period commencing
on the Closing Date and expiring on June 10, 2009.

 

(ii)  In addition, with regard to leasehold interests held by Seller
which are used in the operation of the Business (including, but not limited to,
the lease of 399 Park Avenue, New York, New York) and not subleased to
Purchaser pursuant to this Section 7.19, Seller shall provide
reasonable prior notice to Purchaser before rejecting or otherwise acting to
terminate the underlying lease, and shall not reject or take other action
resulting in the rejection or termination of such lease or the interruption of
Purchaser’s occupation of such space without taking all reasonable steps
necessary to, or, following the Closing, to provide Purchaser reasonable
opportunity to, relocate assets or 

 

93

 

activities of the Business to alternate
facilities in an orderly fashion no later than March 19, 2009.

 

7.20         Competing Transaction.

 

(a)           Except as provided in Section 7.20(b) and
the Bid Procedures Order, neither the Seller nor any Affiliate of Seller shall,
directly or indirectly, through any officer, director, employee, agent,
professional, advisor or other Representative (i) solicit, initiate,
encourage or discuss any proposal or offer from any Person (other than
Purchaser) relating to any financing, refinancing, acquisition, divestiture,
public offering, recapitalization, business combination or reorganization of or
involving all or any part of the business and operations of the Business (a “Competing
Transaction”), (ii) furnish any information with respect to, or assist
or participate in, or facilitate in any other manner, any effort or attempt by
any Person to do or seek the foregoing or (iii) seek or support Bankruptcy
Court approval of a motion or Order inconsistent in any way with the
transactions contemplated herein.

 

(b)           From the date of the entry of the Bid Procedures Order
until the Auction (“Solicitation Period”), the Seller is permitted to
cause its Representatives and Affiliates to initiate contact with, solicit or
encourage submission of any inquiries, proposals or offers by, any Person (in
addition to Purchaser and its Affiliates, agents and Representatives) in
connection with any Competing Transaction. 
In addition, during such Solicitation Period, the Seller shall have the
responsibility and obligation to respond to any inquiries or offers to purchase
all or any part of the Business and perform any and all other acts related
thereto which are required under the Bankruptcy Code or other applicable law,
including, without limitation, supplying information relating to the Business
and assets of the Companies to prospective buyers.  The Seller shall contemporaneously provide
Purchaser with any information provided to any prospective purchasers not
previously provided to Purchaser.  The
Seller shall, within forty-eight (48) hours of their receipt thereof, notify
Purchaser of and provide Purchaser with a copy of any proposal received by the
Seller with respect to any Competing Transaction, including disclosing to
Purchaser the identity of the party making such proposal.

 

7.21         [Reserved].

 

7.22         Deferred Transfers.

 

(a)           If and to the extent that the allocation to and vesting in
Purchaser or any of its Subsidiaries of any Purchased Assets pursuant to Section 2.1
or otherwise would be a violation of applicable Law or require any consent or
the approval of any Governmental Body or the fulfillment of any condition that
cannot be fulfilled by the Purchaser prior to the Closing then, unless the
parties shall otherwise agree, the allocation to and vesting in Purchaser or
any of its Subsidiaries of such Purchased Asset shall be, without any further
action by any party hereto, automatically deferred and any allocation or
vesting of such Purchased Asset pursuant to Section 2.1 or
otherwise shall be null and void until such time as all violations of
applicable Law are eliminated, such consents or 

 

94

 

approvals of Governmental Bodies are
obtained, and such conditions are fulfilled, which in all cases shall be no
later than twelve (12) months from the Closing Date unless otherwise agreed to
by the parties hereto.  Any such
Purchased Asset shall be deemed a “Deferred Transfer Purchased Asset.”

 

(b)           If and to the extent that the allocation to Purchaser or
any of its Subsidiaries of, and Purchaser’s or any such Subsidiary’s becoming
responsible for, any Assumed Liabilities pursuant to Section 2.3 or
otherwise would be a violation of applicable Law or require any consent or
approval of any Governmental Body or the fulfillment of any condition that
cannot be fulfilled by Seller prior to the Closing, then, unless the parties
hereto shall otherwise agree, the allocation to Purchaser or any of its
Subsidiaries of, and Purchaser’s or any such Subsidiary’s becoming responsible
for, such Assumed Liability shall, without any further action by any party, be
automatically deferred and any allocation or responsibility for such Assumed
Liability pursuant to Section 2.3 or otherwise shall be null and
void until such time as all violations of applicable Law are eliminated, such
consents or approvals of Governmental Bodies are obtained, and such conditions
are fulfilled.  Any such Assumed
Liability shall be deemed a “Deferred Transfer Assumed Liability.”

 

(c)           With respect to any Deferred Transfer Purchased Asset or
any Deferred Transfer Assumed Liability, insofar as it is reasonably possible, (i) Seller
shall, and shall cause any applicable Subsidiary of the Seller to, following
the Closing, hold such Deferred Transfer Purchased Asset for the use and
benefit of Purchaser and its Subsidiaries (at the expense of Purchaser) and (ii) Purchaser
shall, or shall cause its applicable Subsidiary to, pay or reimburse Seller for
all amounts paid or incurred in connection with the retention of such Deferred
Transfer Assumed Liability.  In addition,
Seller shall, and shall cause any applicable Subsidiary of the Seller to,
insofar as reasonably possible and to the extent permitted by applicable Law,
hold and treat such Deferred Transfer Purchased Asset in the ordinary course of
business in accordance with past practice and take such other actions as may be
reasonably requested by Purchaser in order to place Purchaser or any of its
Subsidiaries, insofar as permissible under applicable Law and reasonably
possible, in the same position as if such Deferred Transfer Purchased Asset had
been transferred to and vested in Purchaser or an applicable Subsidiary of the
Purchaser at the Closing and so that, to the extent possible, all the benefits
and burdens relating to such Deferred Transfer Purchased Asset, including
possession, use, risk of loss, potential for gain, and dominion, control and
command over such Deferred Transfer Purchased Asset, are to inure from and
after the Closing to Purchaser or its applicable Subsidiary entitled to the
receipt of such Deferred Transfer Purchased Asset.

 

(d)           If and when the consents, approvals of Governmental Bodies
and/or conditions, the absence or non-satisfaction of which caused the deferral
or transfer of any Deferred Transfer Purchased Asset or Deferred Transfer
Assumed Liability pursuant to Section 7.22(a) and Section 7.22(b),
are obtained or satisfied, the transfer, allocation or novation of the
applicable Deferred Transfer Purchased Asset or Deferred Transfer Assumed
Liability shall be effected in accordance with and subject to the terms of this
Agreement.

 

95

 

(e)           Seller shall not be obligated, in connection with the
foregoing, to expend any money unless the necessary funds are advanced, assumed
or agreed in advance to be reimbursed by Purchaser, other than reasonable
attorney’s fees and recording or similar fees, all of which shall be promptly
reimbursed by Purchaser.

 

7.23         Right to Exclude, Delay, Etc.  At any time prior to the fifth (5th) Business
Day prior to the Closing, the Purchaser may elect, in its sole discretion with
notice to the Seller, but without any effect on the Purchase Price, (a) to
designate as an Excluded Asset any asset, interest or right that would
otherwise constitute a Purchased Asset hereunder if the Purchaser reasonably
and in good faith determines that it or any of its Subsidiaries could become
subject to any Liability as a result of acquiring such asset that is material
to such asset or (b) to elect to purchase the assets of any member of the
Company Group and assume the Liabilities of such member of the Company Group of
a type that constitute Assumed Liabilities in lieu of purchasing the equity
interests of such member of the Company Group (including a member of the
Company Group previously expected to be treated under this Agreement as an
Acquired Subsidiary); provided, however, that such member was
expected to be an Acquired Subsidiary; and provided  further that,
if the time frame for the Purchaser to deliver a Designation Notice shall have
expired, then such member shall not be required to become a Debtor and the
timeframe for Purchaser to deliver a Designation Notice shall not be extended
or (c) to delay to a date beyond the Closing Date the purchase of any
Purchased Assets hereunder.  If the
Purchaser makes any election of the type described by clause (b), the Seller,
subject to Section 7.16, shall cause the applicable member of the
Company Group to agree in writing to become party to and bound by this
Agreement as one of the entities comprised by the Seller and each direct
Subsidiary of such member will automatically be deemed to be a “Company” for
purposes of this Agreement.  Without
limiting the generality of the foregoing, the Purchaser shall in no event be
required, on the Closing Date to purchase any assets, or assume any
Liabilities, in respect of the Fixed Income Business unless and until the Fixed
Income Revenue Run-Rate Percentage as of the Preliminary Calculation Date is
equal to or greater than 70%.  All
representations and warranties (including, for the avoidance of doubt, the
corresponding Schedules) and indemnification provisions in this Agreement will
be interpreted as if no election has been made pursuant to Section 7.23(b).

 

7.24         Trust Companies. 
If Purchaser or an Affiliate of Purchaser (i) has submitted an
application to form a trust company on or before the six month anniversary of
the Closing Date and (ii) been issued a charter for a trust company on or
before the 18-month anniversary of the Closing Date, then Seller will pay
Purchaser, promptly upon receipt of an invoice, an amount equal to 50% of such
trust company’s equity capitalization as of such 18-month anniversary date, but
in no event shall Seller pay more than $24,000,000.

 

7.25         Bankruptcy Pleadings.

 

(a)           As soon as reasonably practicable after the execution of
this Agreement, but in any event no later than five (5) Business Days
thereafter, the Seller 

 

96

 

shall file the Sale Motion with the
Bankruptcy Court, which Sale Motion may be supplemented with any appropriate
declarations, pleadings and/or notices, each in form and substance reasonably
satisfactory to the Purchaser.

 

(b)           The Seller shall use reasonable best efforts to serve
notice of the Sale Motion and related notices (including notices to be provided
to counterparties of Purchased Contracts, Transferred Real Property Leases and
Subleases) on all Persons entitled to notice under the Bankruptcy Code and the
Bankruptcy Rules including, providing notice to all known persons who may
have claims against any member of the Company Group that may become subject to
a Bankruptcy Case.

 

(c)           In the event an appeal is taken or a stay pending appeal
is requested (or a petition for certiorari or motion for rehearing or
reargument is filed), with respect to the Bid Procedures Order, the Sale Order,
or any Order of the Bankruptcy Court related to this Agreement, the Seller
shall promptly notify the Purchaser of such appeal or stay request and shall
promptly provide to the Purchaser a copy of the related notice of appeal or
Order of stay.  The Seller shall also
provide the Purchaser with written notice of any motion or application filed in
connection with any appeal from either of such Orders.  Each of the Sellers agrees to take all steps
as may be reasonable and appropriate to defend against such appeal, petition or
motion, and the Purchaser agrees to cooperate in such efforts.  Each party hereto agrees to use commercially
reasonable  efforts to obtain an
expedited resolution of such appeal; provided that nothing herein shall
preclude the parties hereto from consummating the transactions contemplated
herein if the Sale Order shall have been entered and has not been stayed.

 

(d)           From and after the Execution Date and to the extent
Purchaser is the Successful Bidder at the Auction, from and after the date of
the Auction, the Seller shall not take any action that is intended to result
in, or fail to take any action the intent of which failure to act would result
in, the reversal, voiding, modification or staying of the Bid Procedures Order
or the Sale Order.  Each of the Sellers
further covenants and agrees that the terms of any plan of reorganization or
liquidation or proposed order of the Bankruptcy Court that may be filed,
proposed or submitted or supported by the Seller after entry of the Sale Order
or consummation of the transactions contemplated hereby shall not conflict
with, supersede, abrogate, nullify, modify or restrict the terms of this
Agreement, the Bid Procedures Order or the Sale Order or the rights of the
Purchaser hereunder or thereunder.

 

(e)           From and after the Execution Date, subject to the terms
and conditions of this Agreement, the Seller shall use reasonable best efforts
to obtain approval of this Agreement, the Sale Motion and entry of the Bid
Procedures Order, and the Sale Order. 
Each party shall provide the other party with reasonable advance notice
and opportunity to review any motion, pleading, proposed order, press release,
public statement or other document that relates or refers to the Agreement or
the other party prior to making any such filing, release or disclosure.

 

97

 

(f)            As soon as reasonably practicable after Seller receives a
Designation Notice, but in any event no later than three (3) Business Days
thereafter, any Seller designated in the Designation Notice shall, or cause the
designated Affiliate to, file a voluntary Chapter 11 (or, if so designated by
the Purchaser with respect to an Affiliate that is not eligible for Chapter 11,
a voluntary Chapter 7) petition in the United States Bankruptcy Court for the
Southern District of New York, together with appropriate supporting
declarations, pleadings and notices, each in form and substance reasonably
satisfactory to the Purchaser; provided, however, that with
respect to any Seller that is a Broker-Dealer Subsidiary that is a member of
SIPC, Seller shall not be required to file a voluntary Chapter 11 case until
such time as a new broker dealer has been established and the brokerage
accounts from such Broker-Dealer Subsidiary that is a member of SIPC have been
transferred to a new broker dealer; provided  further that Seller
shall use commercially reasonable efforts to promptly establish the new
broker-dealer and transfer such accounts prior to the expiration of the period
for Purchaser to provide the Designation Notice to Seller.

 

(g)           In the event that any Seller or any member of the Company
Group becomes subject to a proceeding under the Bankruptcy Code (a “New
Debtor”), such Seller and the Parent shall file a joinder to the Sale
Motion, seeking approval of the Sale Order with respect to such Seller and the
assumption of this Agreement by such Seller. 
Any such motion shall be filed no later than three (3) days after
the commencement of such proceeding and shall request that the Bankruptcy Court
hold a hearing to consider approval of such motion on the same date of the Sale
Hearing in Parent’s Bankruptcy Case; provided, however, upon the request of the
Purchaser, the Parent shall (i) seek an adjournment of the Auction and the
Sale Hearing to a date not later than fifteen (15) days after commencement of
the New Debtor’s proceeding and (ii) provide notice, to the extent not
already provided, to all known persons who may have Claims against the New
Debtor or its property of the Auction and Sale Hearing.

 

(h)           In the event that any Seller or any member of the Company
Group becomes subject to a proceeding under SIPA and a trustee (the “SIPC
Trustee”) is proposed by SIPC and appointed by an Order, Parent and Seller’s
management immediately shall request of the SIPC Trustee the immediate filing
of a motion, in form and substance satisfactory to the Purchaser, seeking entry
of the Sale Order with respect to such Seller no later than five (5) days
after entry of the Sale Order with respect to other Sellers not subject to the
SIPC proceeding.

 

7.26         Withdrawal of Seller Capital.  With respect to the seed capital amounts
listed on Schedule 7.26, the Seller shall, and shall causes its
Affiliates to, maintain such seed capital according to the timeline and other
requirements specified on Schedule 7.26.

 

7.27         Lehman Commitments to Funds.

 

(a)           From the Execution Date until the Closing Date, Seller
shall, or shall cause its Affiliates to, honor all existing capital commitments
made by the Seller 

 

98

 

and each of its Affiliates both (i) in
their capacity as general partner or similar controlling member, shareholder,
trustee or other entity, including any interest as a special limited partner,
and (ii) as a limited partner or in respect of any side by side
commitment, in each case, in any Fund that is included in the Purchased Assets.

 

(b)           From the Execution Date until the Closing Date, Seller
shall not and shall cause its Affiliates not to, sell, transfer, pledge or
otherwise directly or indirectly dispose of any side by side interest or
interest as a limited partner, shareholder or member of any Fund unless Seller
shall have, prior to any such transfer, received written confirmation from the
transferee that the transferee will (i) vote in favor of any Fund
Amendments applicable to such Fund and grant the consents (in whatever
capacity) or approvals (in whatever capacity), in each case, applicable to such
Fund in support of the transactions contemplated hereby (in whatever capacity);
(ii) not solicit and not vote in favor of any liquidation or termination
of any such Fund, or the removal of the general partner, investment advisor or
comparable entity for such Fund or similar event, other than any such action
taken in support of the transactions contemplated by this Agreement; and (iii) refrain
from transferring such interest until the earlier of the Closing or the
termination of this Agreement; provided, however, that the Seller or its
Affiliates may permit such transferee to transfer such interest if the
subsequent transferee provides written confirmation to Purchaser and Seller
that such transferee will comply with the terms set forth in this Section 7.27(b).

 

7.28         Director Resignations.  Prior to the Closing, the Seller shall cause
all directors, trustees, officers and managers of any Acquired Subsidiary and
of any Fund (other than independent directors or trustees of a Public Fund)
advised by any member of the Company Group who are not Transferred Employees to
resign from their offices, effective no later than the Closing.

 

7.29         Taxing Authority Notification.  Any member of the Company Group filing a case
under chapter 11 of the Bankruptcy Code in the Bankruptcy Court in accordance
with this Agreement that files Tax Returns on a consolidated, combined or
unitary basis with Seller or any of its Affiliates shall notify, in accordance
with applicable law, the IRS and any other applicable Taxing Authority in the
jurisdiction, in which such case was filed, of the commencement of such case.

 

7.30         Employee Securities Company.  In connection with any “employee securities
company” (as such term is defined in the Investment Company Act), the
management contract of which is being assigned to Purchaser or its designee
pursuant to this Agreement, Purchaser agrees to use its commercially reasonable
efforts to assist Seller in (i) obtaining an amendment to that certain
Order pursuant to Section 6(c) of the Investment Company Act that
sets forth the conditions of operation of such “employee securities company”
(or other regulatory approval), to permit an affiliate of Purchaser to manage
and control such “employee securities company” or (ii) arranging
alternative means by which such “employee securities company” may continue to
operate in accordance with the existing conditions set forth in the Order, in
either case, as soon as practicable, but, in any event, no later than five
Business Days prior to the Closing.  

 

99

 

Purchaser may elect, in its sole discretion
with notice to Seller to designate as an Excluded Asset the shares of capital
stock, limited liability company membership, general and limited partnership
interests or other equity interests of Subsidiaries of Seller constituting
employee securities companies or the advisors or controlling members of Funds
organized primarily for co-investment by employees of Parent or its
Subsidiaries (each a “Co-Invest Fund”). 
In the event that Purchaser elects to exclude any such interest, Parent
shall cause the Co-Invest Fund to enter into a sub-advisor agreement with an
Affiliate of Purchaser that will provide such Affiliate, as nearly as possible,
with the same compensation as it would have received if Purchaser had acquired
the Co-Invest Fund’s advisor and general partner or other controlling entity.

 

7.31         Artwork. 
Purchaser shall have the right to possess, for a period of one-year
after the Closing, all of the artwork located, as of the Execution Date, in the
premises used by the Business, including 605 Third Avenue, New York, New York
but excluding 399 Park Avenue, New York, New York.  At any time during such period, Purchaser
shall have the option to purchase any or all of such artwork and any or all
other artwork identified prior to the Execution Date as being part of the
Neuberger Berman art collection, wherever located, for a price equal to its
then appraised value (as determined by an independent, mutually acceptable,
recognized appraiser). To the extent Purchaser does exercise such option on any
or all of the artwork by the first anniversary of the Closing that is not
located on premises occupied by the Purchaser or any of its Subsidiaries, the
Purchaser shall be responsible for crating and moving such artwork after its
purchase.  To the extent the Purchaser
does not exercise such option on any or all of such artwork by the first
anniversary of the Closing that is located on premises occupied by the
Purchaser or any of its Subsidiaries, the Seller shall be responsible for
crating and moving such artwork.  During
such period that Purchaser has the right to possess the artwork following the
Closing, Purchaser shall bear the risk of loss for such artwork located in
premises used by the Business other than 399 Park Avenue, New York, New
York.  In the event that any artwork
located in premises used by the Business other than 399 Park Avenue, New York,
New York is damaged or lost during such period, Purchaser shall pay to Seller
an amount equal to the damage or loss, consistent with the insured appraised
value (as determined by such appraisal) for such artwork, assuming such artwork
had not been lost or damaged.

 

7.32         Transition Services Obligations.

 

(a)           Seller and Purchaser acknowledge that prior to the
Closing, the Business has been operated by Seller as an integrated division of
a larger organization, and that the successful operation of the business in the
ordinary course of its operations and the operation by Seller of the businesses
retained by it and its Affiliates has depended, and will continue to depend, on
the uninterrupted receipt by the Business and such retained businesses of
rights, information, goods, and services (collectively “Services”) from:
(i) those portions of Seller’s business that are not being acquired by
Purchaser pursuant to this Agreement; and (ii) those portions of Seller’s
business that are being acquired by Purchaser pursuant to this Agreement,
respectively.  Except as set forth below
regarding Services that may be provided by others, Seller covenants that it
shall 

 

100

 

provide Purchaser, and to Purchaser’s
successors, assigns, sublicensees, and transferees, for the Transition Period,
(as defined below) all Services that have been previously provided by Seller or
any Affiliate of Seller, to the Business, and that are necessary to allow
Purchaser to continue to operate the Business in the ordinary course, at the
level and in such manner as Seller or its Affiliates have provided such Service
during the period from July 1, 2007 through June 30, 2008.  Similarly, Purchaser covenants that it shall
provide Seller and its Subsidiaries, and to Seller and its Subsidiaries’
successors, assigns, sublicensees, and transferees, for the Transition Period,
(as defined below) all Services that have been previously provided by the
portions of Seller’s business that are being acquired by Purchaser pursuant to
this Agreement, and that are necessary to allow Seller and its Subsidiaries to
continue to their ordinary course of business as conducted prior to Closing
and/or unwind their operations, at the level and in such manner as the portions
of Seller’s business that are being acquired by Purchaser pursuant to this
Agreement have provided such Service during the period from January 1,
2008 through June 30, 2008. The “Transition Period” means the
period commencing on the Closing Date and continuing for two (2) years.  Seller and Purchaser shall each be reasonably
compensated for such Services pursuant to the terms of the mutually agreed
transition services more fully described in Section 7.32(c) below.

 

(b)           Notwithstanding Seller’s and Purchaser’s obligations to
provide Services pursuant to Section 7.32(a) above, Seller and
Purchaser shall not be obligated to provide Services directly and may contract
for the provision of necessary Services by others and “Services” shall not
include those Services to be provided by or to BarCap under the BarCap
TSA.  Without limitation, in the event
Seller or Purchaser disposes of or transfers facilities, systems, or other
assets upon which Services are based or are necessary for the rendering of
Services, Seller or Purchaser, as applicable, shall require all assignees and
transferees to such assets to become contractually bound to Seller or
Purchaser, and Seller’s or Purchaser’s successors and assigns, as applicable,
to provide Services utilizing such assets up to the level and in the manner
that Seller or Purchaser would have been obligated to provider hereunder had
such assets not been assigned or transferred.

 

(c)           Commencing immediately as of the Execution Date, the
authorized representatives of the parties shall meet and confer to draft and
reach mutual agreement upon a detailed transition services agreement consistent
with the obligations of Seller and Purchaser set forth above which sets forth,
through mutually agreed schedules and exhibits the specific services to be
provided, the service level commitments, service pricing, and other
commercially reasonable provisions and details. 
In addition, commencing immediately as of the Execution Date, Seller
shall use commercially reasonable efforts to include Purchaser and Purchaser’s
successors and assigns in the process of developing Schedules under Section 3.05
of the BarCap TSA (including, as appropriate, attending meetings with the
personnel responsible for developing and negotiating the content of those
schedules) and taking such other commercially reasonable steps to facilitate
the receipt of services from BarCap as Purchaser or its successors or assigns
may request, provided that, after the final specification of the 

 

101

 

BarCap TSA Schedules,  Purchaser or its successors or assigns shall
reimburse Seller for Seller’s commercially reasonable out of pocket expenses
associated with responding to any such request. 
With regard to the BarCap TSA Schedules, Seller shall give reasonable
consideration to advice given by Purchaser and Purchaser’s successors and
assigns with respect to the content of those Schedules or the provision or receipt
of services under the BarCap TSA, but the parties acknowledge that Purchaser is
not acquiring pursuant to this Section 7.32(c) a right of
approval over the terms of the Schedules, and Seller retains those rights and
privileges provided by the BarCap TSA and this Agreement with regard to the
process of creating and finalizing the BarCap TSA Schedules.

 

ARTICLE VIII

 

CONDITIONS TO CLOSING

 

8.1           Conditions Precedent to Obligation of the Purchaser.  The obligation of the Purchaser to consummate
the Closing is subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions (any or all of which may be waived by the
Purchaser in whole or in part to the extent permitted by applicable Law):

 

(a)           (i) the representations and warranties of the Seller
set forth in Sections 4.1(a) (Organization), 4.2
(Authorization), 4.3 (Capitalization), 4.8(ii) (No Material
Adverse Effect), 5.1 (Seller Organization), 5.2 (Seller
Authorization), 5.3 (Ownership), and 5.6 (Financial Advisors)
shall be true and correct when made and, except for Section 4.8(ii),
at and as of the Closing as though made at and as of such time (other than any
such representations and warranties that relate to an earlier date, in which
case such representations and warranties shall be true and correct as of such
earlier date) and (ii) all other representations and warranties of the
Seller set forth in this Agreement shall be true and correct (disregarding for
purposes of this clause (ii) any qualifications or exceptions as to “materiality”,
including the term “Material Adverse Effect”) when made and, at and as of the
Closing as though made at and as of such time (other than any such
representations and warranties that relate to an earlier date, in which case
such representations and warranties shall be true and correct as of such
earlier date), except to the extent the failure of the representations and
warranties referred to in this clause (ii) to be so true and correct,
individually or in the aggregate, has not had, and would not be reasonably
expected to have, a Material Adverse Effect or a material adverse effect on the
Seller’s ability to consummate the transactions contemplated hereby, and the
Purchaser shall have received a certificate signed by an authorized officer of
the Seller, dated the Closing Date, to the foregoing effect;

 

(b)           Seller shall have performed and complied in all material
respects with all material obligations and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date (it being acknowledged that the failure to obtain any consents or
approvals sought under this Agreement shall not be considered to be a failure
to perform or comply with any of the Seller’s obligations or agreements so long
as the Seller has complied in all material respects with Section 7.4,

 

102

 

Section 7.5, Section 7.6,
Section 7.12, Section 7.13, Section 7.14
and Section 7.19), and the Purchaser shall have received a
certificate signed by an authorized officer of the Seller, dated the Closing
Date, to the foregoing effect;

 

(c)           there shall not be in effect any Order by a Governmental
Body of competent jurisdiction restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated hereby;

 

(d)           (i) the waiting period applicable to the transactions
contemplated by this Agreement under the HSR Act shall have expired or early
termination shall have been granted and any applicable non-United States
antitrust and merger control requirements shall have been satisfied and (ii) all
approvals required from  FINRA and other
self-regulatory organizations with respect to the transactions contemplated by
this Agreement will have been obtained;

 

(e)           the Seller shall have delivered, or caused to be
delivered, to the Purchaser, duly executed Ancillary Agreements to which the
Seller or any Affiliate thereof is a party, including the Transition Services
Agreement, which will contain arrangements reasonably satisfactory to Purchaser
for the provision of proprietary transition services and the replacement of
such services for at least 24 months following the Closing;

 

(f)            the Departure Percentage shall not be less than 80%;

 

(g)           the Preliminary Closing NB Revenue Run-Rate Percentage shall
be equal to or greater than 70%;

 

(h)           the average closing price of the S&P 500 Index for the
10 consecutive full trading days immediately preceding the Closing Date shall
be at least 75% of 1202.79;

 

(i)            the Bankruptcy Court shall have entered the Bid Procedures
Order in form and substance reasonably satisfactory to Purchaser and
substantially in the form attached hereto as Exhibit A;

 

(j)            the Bankruptcy Court shall have entered the Sale Order in
form and substance reasonably satisfactory to Purchaser and substantially in
the form attached hereto as Exhibit B, and such Order shall not
have been stayed, amended, modified, reversed, vacated or revoked and is in
full force and effect;

 

(k)           Parent shall not have elected to cause the Estimated
Aggregate Additional Adjustment to equal $850,000,000;

 

(l)            Parent shall not have elected to cause the Estimated
EBITDA Adjustment to equal $190,000,000; and

 

103

 

(m)          the sum of (i) the Estimated Closing NB Adjustment plus (ii) the Estimated EBITDA
Adjustment plus (iii) the Estimated
Other Liabilities Adjustment plus (iv) the
Estimated Closing S&P Adjustment (in each case, calculated as though Parent
has made no elections that would otherwise limit such amounts) shall not be
greater than $1,250,000,000.

 

8.2           Conditions Precedent to Obligation of the Seller.  The obligation of the Seller to consummate
the Closing is subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions (any or all of which may be waived by the
Seller in whole or in part to the extent permitted by applicable Law):

 

(a)           (i) the representations and warranties of the
Purchaser set forth in Sections 6.1 (Organization), 6.2
(Authorization), 6.6 (Financial Advisors) and 6.7 (Guarantees)
shall be true and correct in all material respects when made and at and as of
the Closing as though made at and as of such time (other than such
representations and warranties that relate to an earlier date, in which case
such representations and warranties shall be true and correct as of such
earlier date) and (ii) the representations and warranties of the Purchaser
set forth in this Agreement shall be true and correct (disregarding for
purposes of this clause (ii) any qualifications or exceptions as to “materiality”)
when made and at and as of the Closing as though made at and as of such time
(other than such representations and warranties that relate to an earlier date,
in which case such representations and warranties shall be true and correct as
of such earlier date), except to the extent the failure of such representations
and warranties to be so true and correct has not had a material adverse effect
on the Purchaser’s ability to consummate the transactions contemplated hereby,
and the Seller shall have received a certificate signed by an authorized
officer of the Purchaser, dated the Closing Date, to the foregoing effect;

 

(b)           the Purchaser shall have performed and complied in all
material respects with all material obligations and agreements required by this
Agreement to be performed or complied with by the Purchaser on or prior to the
Closing Date, and the Seller shall have received a certificate signed by an
authorized officer of the Purchaser, dated the Closing Date, to the foregoing effect;

 

(c)           there shall not be in effect any Order by a Governmental
Body of competent jurisdiction restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated hereby;

 

(d)           the waiting period applicable to the transactions
contemplated by this Agreement under the HSR Act shall have expired or early
termination shall have been granted and any applicable non-United States
antitrust and merger control requirements shall have been satisfied;

 

(e)           the Purchaser shall have delivered, or caused to be
delivered, to the Seller, duly executed Ancillary Agreements to which the
Purchaser or any Affiliate thereof is a party, including the Transition
Services Agreement, which will contain arrangements reasonably satisfactory to
Seller for the provision of proprietary transition 

 

104

 

services and the replacement of such services
for at least 24 months following the Closing; and

 

(f)            the Bankruptcy Court shall have entered a Sale Order in form
and substance reasonably satisfactory to Seller and substantially in the form
attached hereto as Exhibit B.

 

8.3           Frustration of Closing Conditions.  Neither the Purchaser nor the Seller may rely
on the failure of any condition set forth in Sections 8.1 or 8.2,
as the case may be, if such failure was primarily due to the failure of such
party (or, in the case of the Seller, a failure by any Company) to perform any
of its obligations under this Agreement.

 

ARTICLE IX

 

INDEMNIFICATION

 

9.1           Survival of Representations and Warranties.  All representations and warranties contained
in this Agreement (other than the representations and warranties contained in Section 4.9(c)(ii) and
Section 4.9(h)) shall terminate on the Closing Date and shall not
be subject to any claim after the Closing Date.

 

9.2           Indemnification by the Seller.  Subject to the provisions of this Article IX,
the Seller hereby agrees, from and after the Closing, to indemnify and hold the
Purchaser, its Affiliates (including the Acquired Subsidiaries), and their
respective directors, officers, employees, stockholders, agents, attorneys,
representatives, successors and permitted assigns harmless from and against any
and all losses, liabilities, claims, demands, judgments, damages, fines, suits,
actions, costs and expenses (including without limitation attorneys’ and
accountants’ fees) (individually, a “Loss” and, collectively, “Losses”)
arising or resulting from, or relating to, any Excluded Liabilities.

 

9.3           Indemnification by the Purchaser.  Subject to the provisions of this Article IX,
the Purchaser hereby agrees, from and after the Closing, to indemnify and hold
the Seller, its Affiliates, and their respective directors, officers,
employees, stockholders, agents, attorneys, representatives, successors and
permitted assigns harmless from and against any and all Losses arising or
resulting from, or relating to, any Assumed Liabilities.

 

9.4           Certain Limitations on Indemnification.  The amount of any Losses for which
indemnification is provided under this Article IX shall be net of
any amounts actually recovered by the indemnified party under insurance
policies or otherwise with respect to such Losses (net of any expenses incurred
in connection with such recovery and net of the amount of any increased insurance
premiums or other costs for such indemnified party).  Each party shall use its commercially
reasonable efforts to recover under insurance policies for any Losses
concurrently with seeking indemnification under this Agreement.

 

105

 

9.5           Tax Treatment of Indemnity Payments.  The Purchaser and the Seller agree to treat
any indemnity payment made pursuant to this Article IX as an
adjustment to the Purchase Price for federal, state, local and foreign income
tax purposes.

 

9.6           Survival of Indemnification.  All Liabilities for breach of Section 4.9(c)(ii) or
Section 4.9(h) shall survive until the applicable statute of
limitations and shall not be subject to objection or disallowance under section
502(e) of the Bankruptcy Code.  All
Liabilities for indemnification under this Article IX shall survive until
the nine-month anniversary of the Closing Date and shall not be subject to
objection or disallowance under section 502(e) of the Bankruptcy Code.

 

ARTICLE X

 

MISCELLANEOUS

 

10.1         Payment of Sales, Use or Similar Taxes.  All sales, use, transfer, intangible,
recordation, documentary stamp or similar Taxes or charges, of any nature
whatsoever, applicable to, or resulting from, the transactions contemplated by
this Agreement (“Transfer Taxes”) shall be borne equally by the
Purchaser and the Seller. The Purchaser and the Seller shall cooperate with
each other in order to minimize applicable Transfer Taxes in a manner that is
mutually agreeable and in compliance with applicable Law, and shall to that
extent execute such documents, agreements, applications, instruments, or other
forms or take such actions as reasonably required, and shall permit any such
Transfer Taxes to be assessed and paid in accordance with applicable Law.

 

10.2         Expenses. 
Except as otherwise provided in this Agreement, each of the Sellers and
the Purchaser shall bear its own and its respective Affiliates’ expenses
incurred in connection with the negotiation and execution of this Agreement and
each other agreement, document and instrument contemplated by this Agreement
and the consummation of the transactions contemplated hereby and thereby.

 

10.3         Entire Agreement; Amendments and Waivers.  This Agreement (including the schedules and
exhibits hereto), the Guarantees, the Ancillary Agreements and the
Confidentiality Agreements represent the entire understanding and agreement
between the parties hereto and their respective Affiliates with respect to the
subject matter hereof and supersede all prior agreements and understandings
between the parties hereto and their respective Affiliates with respect to such
subject matter, including the Original Purchase Agreement. Upon the Closing,
the non-solicitation obligation of Purchaser and its Affiliates under the
Confidentiality Agreements with respect to employees of the Business shall be
of no further force and effect.  This
Agreement can be amended, supplemented or changed, and any provision hereof can
be waived, only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any such amendment,
supplement, modification or waiver is sought. 
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.  No 

 

106

 

failure on the part of any party to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of such right,
power or remedy by such party preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.

 

10.4         Notices.  All
notices and other communications under this Agreement shall be in writing and
shall be deemed given (i) when delivered personally by hand (with written
confirmation of receipt), (ii) when sent by facsimile (with written
confirmation of transmission) or (iii) one business day following the day
sent by overnight courier (with written confirmation of receipt), in each case
at the following addresses and facsimile numbers (or to such other address or
facsimile number as a party may have specified by notice given to the other
party pursuant to this provision):

 

If to the Purchaser, to:

 

c/o Hellman &
Friedman Capital Partners VI, L.P.

One Maritime
Plaza, 12th Floor

San Francisco,
CA 94111

Facsimile:  1
415 788 0176

Attention:  Allen R. Thorpe

Jeffrey A. Goldstein

Arrie A. Park

 

With a copy (which shall not constitute notice) to:

 

Cleary
Gottlieb Steen & Hamilton LLP

One Liberty
Plaza

New York, NY
10006

Facsimile:  1
212 225 3999

Attention:  Daniel
S. Sternberg

Christopher E.
Austin

 

and

 

c/o Bain
Capital Partners LLC

111 Huntington
Avenue

Boston, MA
02199

Facsimile:  1
617 516 2010

Attention:  Mark
Nunnelly

Andrew Balson

Phil Loughlin

 

With a copy (which shall not constitute notice) to:

 

Ropes &
Gray

One
International Place

 

107

 

Boston, MA
02110

Facsimile:  1
617 951 7050

Attention:  Alfred
O. Rose

William M.
Shields

 

If to the Seller, to:

 

Lehman
Brothers Holdings Inc.

745 Seventh
Avenue

New York, New
York 10019

Facsimile:  646
758 2652

Attention:  Chief
Restructuring Officer

 

With a copy (which shall not constitute notice) to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Facsimile:  (212) 310-8007

Attention:  Thomas A. Roberts

Michael E. Lubowitz

Jane E. McDonald

 

10.5         Binding Effect; No Third-Party Beneficiaries; Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns.  Nothing in this
Agreement shall create or be deemed to create any third party beneficiary
rights in any Person not a party to this Agreement.  No assignment of this Agreement or of any
rights or obligations hereunder may be made by either the Seller or the
Purchaser, directly or indirectly (by operation of law or otherwise), without
the prior written consent of the other party hereto and any attempted
assignment without the required consents shall be void; provided, however,
that the Purchaser may at any time assign any or all of its rights or
obligations under this Agreement to one or more of its Subsidiaries.  No assignment of any obligations hereunder
shall relieve the parties hereto of any such obligations.  Upon any such permitted assignment, the
references in this Agreement to the assigning party shall also apply to any
such assignee unless the context otherwise requires.

 

10.6         Enforcement.

 

(a)           The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.  It is accordingly agreed that each of the parties
shall be entitled to equitable relief to prevent or remedy breaches of this
Agreement, without the proof of actual damages, including in the form of an
injunction or injunctions or orders for specific performance in respect of such
breaches.  Each party 

 

108

 

agrees to waive any requirement for the
security or posting of any bond in connection with any such equitable
remedy.  Each party further agrees that
the only permitted objection that it may raise in response to any action for
equitable relief is that it contests the existence of a breach or threatened
breach of the provisions of this Agreement.

 

(b)           Notwithstanding any other provision of this Agreement, the
sole and exclusive pre-Closing remedy of Purchaser, Parent, the Seller, their
respective Affiliates and any other Person for any breach or threatened breach
of this Agreement prior to Closing by the Seller or the Purchaser, as the case
may be, shall be the right of the Seller or Purchaser to seek an injunction or
injunctions against any such breach or to specifically enforce the other party’s
obligations hereunder or the right to terminate this Agreement in accordance
with, and subject to, the terms and conditions of Section 3.3 and
receive the amounts, if any, that become payable pursuant to Section 3.5
(it being understood that in no event will the Purchaser be entitled to seek or
receive both an injunction or grant of specific performance and such
amounts).  Seller agrees, to the extent
the Purchaser is successful on the merits, to pay all reasonable costs,
expenses and fees, including, without limitation, all reasonable attorneys’
fees which may be incurred by the Purchaser in enforcing its rights under Section 10.6(a).  All other claims, rights and causes of
action, including any right to seek monetary damages, by the Purchaser, Parent,
the Seller or their respective Affiliates or any other Person against the
Purchaser, the Guarantors, Seller, any of their respective Affiliates or any of
their or their respective Affiliates’ Representatives or former, current or
future general or limited partners, members or stockholders is hereby fully
waived, released and forever discharged.

 

10.7         Counterparts. 
This Agreement may be executed in multiple counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.

 

10.8         GOVERNING LAW; SUBMISSION TO JURISDICTION; CONSENT TO
SERVICE OF PROCESS; WAIVER OF JURY TRIAL.

 

(a)           THIS AGREEMENT, AND ALL CLAIMS OR CAUSES OF ACTION
(WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF OR
RELATE TO THIS AGREEMENT (INCLUDING ANY AMENDMENT, SUPPLEMENT OR WAIVER OF THIS
AGREEMENT), OR THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AGREEMENT
(INCLUDING ANY AMENDMENT, SUPPLEMENT OR WAIVER OF THIS AGREEMENT) AND THE
TRANSACTIONS CONTEMPLATED HEREBY, SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK.

 

(b)           EACH OF THE PARTIES:

 

(i)            SUBMITS
TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED WITHIN THE
BOROUGH OF MANHATTAN OF THE CITY, COUNTY AND STATE OF NEW YORK 

 

109

 

OVER ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY, AND AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH DISPUTE OR ANY SUIT, ACTION PROCEEDING RELATED THERETO MAY BE HEARD
AND DETERMINED IN SUCH COURTS; PROVIDED, HOWEVER, THAT DURING THE PENDENCY OF
THE BANKRUPTCY CASE, THE BANKRUPTCY COURT SHALL HAVE AND RETAIN EXCLUSIVE
JURISDICTION TO ENFORCE THE TERMS OF THIS AGREEMENT AND TO DECIDE ANY CLAIMS OR
DISPUTES WHICH MAY ARISE OR RESULT FROM, OR BE CONNECTED WITH, THIS
AGREEMENT, ANY BREACH OR DEFAULT HEREUNDER, OR THE TRANSACTIONS CONTEMPLATED
HEREBY;

 

(ii)           WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH SUCH
PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE
BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE
OF SUCH DISPUTE;

 

(iii)          AGREES
THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS
BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW;

 

(iv)          IRREVOCABLY
WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATED TO THIS AGREEMENT; AND

 

(v)           CONSENTS
TO PROCESS BEING SERVED BY ANY PARTY TO THIS AGREEMENT IN ANY SUIT, ACTION OR
PROCEEDING BY THE DELIVERY OF A COPY THEREOF IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 10.4.

 

10.9         Treatment as Administrative Expenses.  Any amounts at any time payable under Section 3.5
or any other provision of this Agreement shall be deemed allowed administrative
claims in the Bankruptcy Case of any Seller that is a Debtor, with priority
over any and all claims of the kind specified in 11 U.S.C. §§ 503(b) and
507(b) pursuant to 11 U.S.C. § 364(c)(1), which claim shall be senior
to, and have priority over, all other claims other than any claims arising
under that certain Senior Secured Superpriority Debtor-In-Possession Credit Agreement,
dated as of September 17, 2008, by and among LBHI, Barclays Bank plc and
BarCap.

 

[Signature Page Follows]

 

110

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

	
   

  	
  IMD PARENT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Allen Thorpe

  
	
   

  	
   

  	
  Name:

  	
  Allen Thorpe

  
	
   

  	
   

  	
  Title:

  	
  Co-President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip H. Loughlin

  
	
   

  	
   

  	
  Name:

  	
  Philip H. Loughlin

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED
PURCHASE AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

 

	
   

  	
  LEHMAN BROTHERS HOLDINGS

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED PURCHASE AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

	
   

  	
  LB I GROUP INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED PURCHASE AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

	
   

  	
  LEHMAN ALI INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED PURCHASE AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

	
   

  	
  LEHMAN BROTHERS ASSET

  MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED PURCHASE AGREEMENT]

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective authorized officers, as of the date first written above.

 

 

	
   

  	
  LEHMAN
  BROTHERS ASSET

  MANAGEMENT INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED
PURCHASE AGREEMENT]

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective authorized officers, as of the date first written above.

 

 

	
   

  	
  LEHMAN
  BROTHERS AIM

  HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED
PURCHASE AGREEMENT]

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective authorized officers, as of the date first written above.

 

 

	
   

  	
  LEHMAN
  BROTHERS AIM

  HOLDINGS II LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. J.
  Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED
PURCHASE AGREEMENT]

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective authorized officers, as of the date first written above.

 

	
   

  	
  LEHMAN
  BROTHERS AIM

  HOLDINGS III LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED
PURCHASE AGREEMENT]

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective authorized officers, as of the date first written above.

 

	
   

  	
  NEUBERGER
  BERMAN HOLDINGS

  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph
  Amato

  
	
   

  	
   

  	
  Name:

  	
  Joseph Amato

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED
PURCHASE AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

	
   

  	
  NEUBERGER BERMAN ASSET

  MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Joseph Amato

  
	
   

  	
   

  	
  Name:

  	
  Joseph Amato

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  
					

 

 

[signature page to
amended and restated purchase agreement]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

	
   

  	
  NEUBERGER BERMAN

  MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Joseph Amato

  
	
   

  	
   

  	
  Name:

  	
  Joseph Amato

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  
					

 

 

[signature page to
amended and restated purchase agreement]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

 

	
   

  	
  NEUBERGER BERMAN, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Joseph Amato

  
	
   

  	
   

  	
  Name:

  	
  Joseph Amato

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  
					

 

 

[signature page to
amended and restated purchase agreement]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

 

	
   

  	
  LEHMAN BROTHERS CAYMAN GP

  LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ James P.
  Fogarty

  
	
   

  	
   

  	
  Name:

  	
  James P.
  Fogarty

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

[signature page to
amended and restated purchase agreement]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

 

	
   

  	
  LEHMAN BROTHERS OFFSHORE 

  PARTNERS LTD

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ James P.
  Fogarty

  
	
   

  	
   

  	
  Name:

  	
  James P.
  Fogarty

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

[signature page to
amended and restated purchase agreement]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers, as of the date first written
above.

 

	
   

  	
  LEHMAN BROTHERS PRIVATE 

  EQUITY ADVISERS LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ D. J. Coles

  
	
   

  	
   

  	
  Name:

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  
					

 

 

[signature page to
amended and restated purchase agreement]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized officers, as of the date first written above.

 

	
   

  	
  LEHMAN
  BROTHERS PRIVATE 

  FUND MANAGEMENT, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Anthony D. Tutrone

  
	
   

  	
   

  	
  Name: 
  

  	
  Anthony
  D. Tutrone

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  

 

 

[signature page to amended and restated purchase agreement]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized officers, as of the date first written above.

 

	
   

  	
  LEHMAN
  BROTHERS PRIVATE 

  FUNDS INVESTMENT COMPANY GP,

  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Anthony D. Tutrone

  
	
   

  	
   

  	
  Name: 
  

  	
  Anthony
  D. Tutrone

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  

 

 

[signature page to amended and restated purchase agreement]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized officers, as of the date first written above.

 

	
   

  	
  LEHMAN
  BROTHERS PRIVATE

  FUNDS INVESTMENT COMPANY LP,

  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Anthony D. Tutrone

  
	
   

  	
   

  	
  Name: 
  

  	
  Anthony
  D. Tutrone

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  

 

 

[signature page to amended and restated purchase agreement]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized officers, as of the date first written above.

 

 

	
   

  	
  THE
  MAIN OFFICE MANAGEMENT 

  COMPANY II, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Anthony D. Tutrone

  
	
   

  	
   

  	
  Name:
  

  	
  Anthony D. Tutrone

  
	
   

  	
   

  	
  Title:
  

  	
  Managing Director

  

 

 

[signature page to amended and restated purchase agreement]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized officers, as of the date first written above.

 

 

	
   

  	
  LEHMAN
  BROTHERS PACIFIC 

  HOLDINGS PTE LTD (SINGAPORE)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  D. J. Coles

  
	
   

  	
   

  	
  Name: 
  

  	
  D.
  J. Coles

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James P. Fogarty

  
	
   

  	
   

  	
  Name: 

  	
  James P. Fogarty

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized Signatory

  

 

 

[signature page to amended and restated purchase agreement]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized officers, as of the date first written above.

 

 

	
   

  	
  LEHMAN
  BROTHERS UK HOLDINGS

  (DELAWARE) INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  D. J. Coles

  
	
   

  	
   

  	
  Name:
  

  	
  D. J. Coles

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized Signatory

  

 

 

[signature page to amended and restated purchase agreement]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized officers, as of the date first written above.

 

 

	
   

  	
  LEHMAN
  BROTHERS ASSET 

  MANAGEMENT (IRELAND) LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  D. J. Coles

  
	
   

  	
   

  	
  Name: 

  	
  D.
  J. Coles

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James P. Fogarty

  
	
   

  	
   

  	
  Name:
  

  	
  James
  P. Fogarty

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized
  Signatory

  

 

 

[signature page to amended and restated purchase agreement]ex1013.htm

    CONSULTING
AGREEMENT

    

    THIS
AGREEMENT made as of the 15th day of June, 2006.

    

    BETWEEN:

    

    DELTA OIL & GAS, INC., a
Colorado corporation having offices at 1122 6th Avenue
N., Seattle, Washington, USA, 98109;

    (the
"Company")

    

    AND:

    

    HURRICANE CORPORATE SERVICES LTD.,
a British Columbia, Canada company with offices at suite 604 – 700 West
Pender Street, Vancouver, British Columbia, Canada, V6C 1G8;

    (the
"Contractor")

    

    WHEREAS
the Company has offered to engage the services of the Contractor to provide
certain corporate development and consulting services to the Company and the
Contractor has agreed to provide such services on the terms and subject to the
conditions set out in this Agreement;

    

    NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
mutual agreements contained herein the parties hereto agree as
follows:

    

    
      	
              1.

            	
              Contractor's
      Duties

            

    

    

    1.1           The
Contractor shall provide the following corporate development and consulting
services to the Company:

    

    
      	
               
      

            	
              (a)

            	
              engage
      in the dissemination of information provided, or records prepared, in the
      ordinary course of business of the
Company:

            

    

    

    
      	
               
      

            	
              (i)

            	
              to
      promote the sale of products or services of the
  Company,

            

    

    

    
      	
               
      

            	
              (ii)

            	
              to
      raise public awareness of the Company,
and

            

    

    

    
      	
               
      

            	
              (iii)

            	
              to
      answer all incoming communications from investors and to respond
      accordingly to enquiries, if any;

            

    

    

    
      	
               
      

            	
              (b)

            	
              assist  the
      Company in elevating its profile in the institutional market for the
      purposes of enabling the Company to generate business opportunities within
      the Oil and Gas Exploration sector.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    1.2           The
Contractor will also maintain in at least two copies in disparate secure
locations a complete database of all parties contacted or have contacted the
Contractor who have indicated an interest in the Company and who have asked to
continue to receive the Company’s information.

    

    
      	
              2.

            	
              Contractor's
      Remuneration, Expenses and Incentive Stock
  Options

            

    

    

    
      	
              2.1

            	
              The
      Company shall pay to the Contractor CA $2,500 plus applicable taxes on the
      1st day of each calendar month.

            

    

    

    2.2           The
Company shall reimburse the Contractor for postage, telephone and email expenses
incurred by the Contractor in connection with taking up and performing the
Duties, provided that the Contractor receives approval from the president of the
Company prior to incurring such expenses and provides receipts or other proof of
such expenses.

    

    
      	
              3.

            	
              Term
      of Agreement

            

    

    

    3.1           The
term of this Agreement shall commence on June 15, 2006 and shall continue on a
month to month basis until either party gives notice to the other that the
agreement is terminated subject to section 5.5.

    

    
      	
              4.

            	
              Confidentiality

            

    

    

    
      	
              4.1

            	
              Subject
      to subsection 4.2, the Contractor shall not, either during the term
      hereof, or at any time thereafter, to the detriment of the
      Company:

            

    

    

    
      	
               
      

            	
              (a)

            	
              disclose
      any information pertaining to the Company which the Contractor acquires in
      the course of performing the
Duties;

            

    

    

    
      	
               
      

            	
              (b)

            	
              use
      for the Contractor’s own purpose or for any purpose other than that of the
      Company any information which the Contractor acquires in the course of
      performing the Duties in relation to the business of the
      Company.

            

    

    

    4.2           The
obligation under subsection 4.1 will not apply with respect to
information:

    

    
      	
               
      

            	
              (a)

            	
              which
      at the time of its disclosure to the Contractor was or subsequently
      becomes (through no act on the part of the Contractor) available to the
      public;

            

    

    

    
      	
               
      

            	
              (b)

            	
              in
      respect of which the Contractor has received the prior authorization of
      the Company to disclose or communicate such information, or any part
      thereof, to third parties without restriction;
  or

            

    

    

    
      	
               
      

            	
              (c)

            	
              in
      respect of which the Contractor has an obligation under applicable laws to
      disclose such information.

            

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    
      	
              5.

            	
              General
      Provisions

            

    

    

    Entire
Agreement

    

    5.1           This
Agreement constitutes the entire agreement between the parties and supersedes
all previous communications, representations and agreements, whether oral or
written, between the parties with respect to the subject matter of this
Agreement.

    

    Amendment

    

    5.2           This
Agreement may not be amended except by written agreement of the parties
hereto.

    

    Enurement

    

    5.3           This
Agreement shall enure to the benefit of and be binding upon the Company and the
Contractor and their respective heirs, executors, representatives,
administrators, successors and permitted assigns.

    

    Governing
Law

    

    5.4 This
Agreement will be governed by and construed in accordance with the laws of the
Province of British Columbia.

    

    Termination

    

    
      	
              5.5  

            	
              The
      Company has the right to cancel the contract at any time within any six
      month term by giving thirty days written notice according to section 5.6.
      The Company will pay the contractor up to the end of the last calendar
      month in which the 30th
      day of the notice occurs.

            

    

    

    Notices

    

    5.6                  
Any notice or other communication required or permitted to be given under this
agreement shall be in writing and shall be either delivered or sent by telecopy
or similar facsimile transmission (receipt confirmed) to the party hereto to
whom such notice or other communication is to be given at the address below or
at such other address as is designated by that party hereto in
writing:

    

    

    (a)   if
to the Company,
to:                                                            (b)      
if to the Contractor, to:

    

    Delta Oil
& Gas,
Inc.                                                                                 Hurricane
Corporate Services Ltd.

    1122
6th
Avenue
N.                                                                                    #
604 – 700 W. Pender Street

    Seattle,
Washington                                                                                 Vancouver,
British Columbia

    98109                                                                                                          
 Canada, V6C 1G8

    Ph:  604.602.1500                                                                                       
Ph:  604.602.1650

    Fax:  604.602.1525

    

    Attention:    Mr.
Douglas N. Bolen, President

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    Any such
notice or communication shall be deemed to have been given and received on the
date of sending if sent by facsimile (provided that such date is a business day,
otherwise such notice or communication shall be deemed to have been given and
received on the next business day) or upon receipt by a responsible officer of
the addressee if delivered.

     

    Compliance With Regulatory
and Legal Statutes

    

    
      	
              5.6  

            	
              The
      contractor shall at all times ensure that its activities on behalf of the
      Company are executed according to the laws and regulatory requirements of
      all jurisdictions in which it disseminates information and shall be solely
      liable and responsible for any and all compliance with NASD and SEC
      regulations of the United States.

            

    

    

    

    IN
WITNESS WHEREOF the Company has executed this Agreement by its duly authorized
officer and the Contractor has hereunto set his hand and seal as of the date
first above written.

    

    
      	
              DELTA
      OIL & GAS, INC.

               

               

               

              /s/  Douglas N. 
      Bolen                                         
      

              Signature
      of Authorized Signatory

               

              Douglas N. Bolen,
      President/CEO                      

              Print
      Name and Position

            	 
      	 
      
	 
      	 
      	 
      
	
              HURRICANE
      CORPORATE SERVICES LTD.

               

               

               

              /s/ Kulwant
      Sandher                                            
      

              Signature

               

              Kulwant Sandher,
      President/CFO                       

              Print
      Name

            	
               

              )

              )

              )

              )

              )

              )

              )

            	 
      

    

    

    
      
         

      

      
        4

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