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EXHIBIT 2.6 STOCK PURCHASE AGREEMENT

Purchase and Sale Agreement

EXHIBIT 2.6 STOCK PURCHASE AGREEMENT | Document Parties: Investment Company | NEW AMERICAN CAPITAL, INC | PRINCIPAL FINANCIAL GROUP, INC | PRINCIPAL MANAGEMENT CORPORATION | Purchaser Fund Board | Sponsored Fund and Subject Company | Subject Companies | WASHINGTON MUTUAL, INC | WM Advisors, Inc You are currently viewing:
This Purchase and Sale Agreement involves

Investment Company | NEW AMERICAN CAPITAL, INC | PRINCIPAL FINANCIAL GROUP, INC | PRINCIPAL MANAGEMENT CORPORATION | Purchaser Fund Board | Sponsored Fund and Subject Company | Subject Companies | WASHINGTON MUTUAL, INC | WM Advisors, Inc

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Title: EXHIBIT 2.6 STOCK PURCHASE AGREEMENT
Governing Law: New York     Date: 11/1/2006
Industry: Insurance (Life)     Law Firm: Debevoise Plimpton;Simpson Thacher     Sector: Financial

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EXHIBIT 2.6

 
 
STOCK PURCHASE AGREEMENT

among

WASHINGTON MUTUAL, INC.,

NEW AMERICAN CAPITAL, INC.,

PRINCIPAL FINANCIAL GROUP, INC.,

and

PRINCIPAL MANAGEMENT CORPORATION

for the purchase and sale

of

the outstanding capital stock of

WM ADVISORS, INC.

 
Dated as of July 25, 2006

                          •  

96

 

 

TABLE OF CONTENTS

   

 

 

 

Page

 

Article I DEFINITIONS

 

 

 

 

 

 

 

Article II PURCHASE AND DELIVERY OF STOCK

 

 

 

  •  

  • 2.1

 

Delivery of Stock

 

 

 

  •  

  • 2.2

 

Closing; Payment of Purchase Price

 

 

 

  •  

  • 2.3

 

Estimated Working Capital Amount

 

 

 

  •  

  • 2.4

 

Post-Closing Working Capital Purchase Price Adjustment

 

 

 

  •  

  • 2.5

 

Purchase Price Adjustment Based on Changes in Advisory Revenue Run-Rate

 

 

 

  •  

  • 2.6

 

Make-Whole Purchase Price Adjustment

 

 

 

  •  

  • 2.7

 

Post-Closing True-Up

 

 

 

  •  

  •  

 

 

 

 

 

Article III CLOSING DATE

 

 

 

  •  

  • 3.1

 

Closing Date

 

 

 

  •  

  •  

 

 

 

 

 

Article IV REPRESENTATIONS AND WARRANTIES OF SELLER

 

 

 

  •  

  • 4.1

 

Organization, Power, etc

 

 

 

  •  

  • 4.2

 

Authority Relative to Agreements

 

 

 

  •  

  • 4.3

 

Non-Contravention

 

 

 

  •  

  • 4.4

 

Consents, etc

 

 

 

  •  

  • 4.5

 

Title to Stock

 

 

 

  •  

  • 4.6

 

Capital Stock of the Subject Companies

 

 

 

  •  

  • 4.7

 

Company Financial Statements; Accounting Controls

 

 

 

  •  

  • 4.8

 

Litigation

 

 

 

  •  

  • 4.9

 

Compliance with Laws; Permits and Licenses

 

 

 

  •  

  • 4.10

 

Absence of Certain Changes; No Undisclosed Liabilities

 

 

 

  •  

  • 4.11

 

Personnel and Employee Benefits Matters

 

 

 

  •  

  • 4.12

 

Taxes

 

 

 

  •  

  • 4.13

 

Properties

 

 

 

  •  

  • 4.14

 

Certain Labor Matters

 

 

 

  •  

  • 4.15

 

Material Agreements

 

 

 

  •  

  • 4.16

 

Intellectual Property

 

 

 

  •  

  • 4.17

 

Brokers

 

 

 

  •  

  • 4.18

 

Regulatory Reports, Registrations and Agreements

 

 

 

  •  

  • 4.19

 

Certain Fund and Client Matters

 

 

 

  •  

  • 4.20

 

Assets Under Management; Investment Management Revenues

 

 

 

  •  

  • 4.21

 

Intercompany Accounts; Transactions with Affiliates

 

 

 

  •  

  • 4.22

 

Insurance

 

 

 

  •  

  •  

 

 

 

 

 

Article V REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

 

 

  •  

  • 5.1

 

Organization

 

 

 

  •  

  • 5.2

 

Authority Relative to Agreement

 

 

 

  •  

  • 5.3

 

Non-Contravention

 

 

 

  •  

  • 5.4

 

Consents, etc

 

 

 

 

97

 

 

 

 

 

 

 

 

Page

 

  •  

  • 5.5

 

Litigation

 

 

 

  •  

  • 5.6

 

Regulatory Reports

 

 

 

  •  

  • 5.7

 

Absence of Certain Changes

 

 

 

  •  

  • 5.8

 

Information Supplied

 

 

 

  •  

  • 5.9

 

Brokers

 

 

 

  •  

  • 5.10

 

Available Funds

 

 

 

  •  

  • 5.11

 

Investment Intent

 

 

 

  •  

  • 5.12

 

Certain Regulatory Matters

 

 

 

  •  

  •  

 

 

 

 

 

Article VI COVENANTS

 

 

 

  •  

  • 6.1

 

Conduct of Business

 

 

 

  •  

  • 6.2

 

Access; Confidentiality

 

 

 

  •  

  • 6.3

 

Reasonable Best Efforts; Taking of Necessary Action; Notices of Certain Events

 

 

 

  •  

  • 6.4

 

CDSC Financing Agreements

 

 

 

  •  

  • 6.5

 

Insurance

 

 

 

  •  

  • 6.6

 

Names of Subject Companies and Sponsored Funds; Websites

 

 

 

  •  

  • 6.7

 

Post-Closing Cooperation; Retention of Records and Confidentiality

 

 

 

  •  

  • 6.8

 

Public Announcements

 

 

 

  •  

  • 6.9

 

Section 15 of the Investment Company Act

 

 

 

  •  

  • 6.10

 

Non-Competition; Non-Solicitation

 

 

 

  •  

  • 6.11

 

401(k) Plans

 

 

 

  •  

  • 6.12

 

Further Assurances

 

 

 

  •  

  • 6.13

 

Settlement of Intercompany Accounts

 

 

 

  •  

  •  

 

 

 

 

 

Article VII EMPLOYEE MATTERS

 

 

 

  •  

  • 7.1

 

General

 

 

 

  •  

  • 7.2

 

Termination and Severance

 

 

 

  •  

  • 7.3

 

Closing Payments

 

 

 

  •  

  • 7.4

 

Welfare Plans

 

 

 

  •  

  • 7.5

 

Accrued Vacation

 

 

 

  •  

  • 7.6

 

Seller Parent Benefit Plans

 

 

 

  •  

  • 7.7

 

Administration

 

 

 

  •  

  •  

 

 

 

 

 

Article VIII CONDITIONS TO THE CLOSING

 

 

 

  •  

  • 8.1

 

Conditions to Obligations of Each Party

 

 

 

  •  

  • 8.2

 

Additional Conditions to the Obligations of Purchaser

 

 

 

  •  

  • 8.3

 

Additional Conditions to the Obligations of Seller and Seller Parent

 

 

 

  •  

  •  

 

 

 

 

 

Article IX TERMINATION, AMENDMENT AND WAIVER

 

 

 

  •  

  • 9.1

 

Termination

 

 

 

  •  

  • 9.2

 

Effect of Termination

 

 

 

  •  

  •  

 

 

 

 

 

Article X TAX MATTERS

 

 

 

  •  

  • 10.1

 

Indemnification for Taxes

 

 

 

  •  

  • 10.2

 

Apportionment of Taxes

 

 

 

  •  

  • 10.3

 

Tax Returns and Payment of Taxes

 

 

 

  •  

  • 10.4

 

Cooperation; Audits

 

 

 

 

98

 

 

 

 

 

 

 

 

Page

 

  •  

  • 10.5

 

Transfer Taxes

 

 

 

  •  

  • 10.6

 

Section 338(h)(10) Election

 

 

 

  •  

  • 10.7

 

Allocation of Closing Payments

 

 

 

  •  

  •  

 

 

 

 

 

Article XI INDEMNIFICATION

 

 

 

  •  

  • 11.1

 

Indemnification by Seller and Seller Parent

 

 

 

  •  

  • 11.2

 

Indemnification by Purchaser

 

 

 

  •  

  • 11.3

 

Indemnification Procedures

 

 

 

  •  

  • 11.4

 

General

 

 

 

  •  

  •  

 

 

 

 

 

Article XII GENERAL PROVISIONS

 

 

 

  •  

  • 12.1

 

Survival

 

 

 

  •  

  • 12.2

 

Notices

 

 

 

  •  

  • 12.3

 

Interpretation

 

 

 

  •  

  • 12.4

 

Amendment and Modification; Waiver

 

 

 

  •  

  • 12.5

 

Entire Agreement

 

 

 

  •  

  • 12.6

 

Fees and Expenses

 

 

 

  •  

  • 12.7

 

Disclosure Letters

 

 

 

  •  

  • 12.8

 

Third Party Beneficiaries

 

 

 

  •  

  • 12.9

 

Specific Performance

 

 

 

  •  

  • 12.10

 

Performance by Seller and Purchaser

 

 

 

  •  

  • 12.11

 

Assignment; Binding Effect

 

 

 

  •  

  • 12.12

 

Governing Law

 

 

 

  •  

  • 12.13

 

Jurisdiction; Waiver of Jury Trial

 

 

 

  •  

  • 12.14

 

Severability

 

 

 

  •  

  • 12.15

 

Counterparts

 

 

 

 

99

 

 

 

LIST OF SCHEDULES AND EXHIBITS*

Schedules

  • 1

 

Aggregate Base Advisory Revenue Run-Rate

 

 

  • 2

 

Benchmark Fee Revenue

 

 

  • 2.4(a)

 

Applicable Accounting Principles for the Closing Date Balance Sheet

 

 

  • 2.4(b)

 

Working Capital Amount Example Calculation

 

 

  • 2.6

 

Fee Rates

 

 

  • 3

 

Purchaser’s Retail Mutual Fund Annual Fee Revenue

 

 

  • 4

 

Purchaser’s Retail Mutual Fund Business

 

 

  • 6.3(e)

 

Fund Mapping

 

 

  • 6.3(f)

 

Separate Account Client

 

 

  • 8.2(f)

 

Third Party Consents

 

 

  • 8.2(g)

 

Retention Agreements

 

 

  • 8.2(h)

 

Third Party Distributors

 

 

  • Y

 

Selected AUM Computation Factors

 

 

  • Z

 

Special Clients

 

 

 

Exhibits

  • 8.2(g)

 

Form of Retention Letter for Wholesalers

 

 

 

*Principal Financial Group, Inc. agrees to furnish supplementally to the Commission upon its request a copy of any omitted schedule or exhibit.

                          •  

100

 

 

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT, dated as of July 25, 2006 (this " Agreement "), among WASHINGTON MUTUAL, INC., a Washington corporation (" Seller Parent "), NEW AMERICAN CAPITAL, INC., a Delaware corporation (" Seller "), PRINCIPAL FINANCIAL GROUP, INC., a Delaware corporation (" Purchaser Parent "), and PRINCIPAL MANAGEMENT CORPORATION, an Iowa corporation (" Purchaser ").

WITNESSETH

WHEREAS, Seller owns 3,974 shares of the common stock, par value $0.25 per share (the " Stock "), of WM Advisors, Inc., a Washington corporation (the " Company "), constituting all of the issued and outstanding shares of capital stock of the Company;

WHEREAS, the Company owns all of the outstanding shares of capital stock of each of WM Funds Distributor, Inc., a Washington corporation, and WM Shareholder Services, Inc., a Washington corporation;

WHEREAS, Seller is a wholly owned Subsidiary of Seller Parent, and Purchaser is a wholly owned Subsidiary of Purchaser Parent;

WHEREAS, certain employees of the Subject Companies have entered into employment agreements with the Subject Companies as of the date hereof but to be effective as of the Closing (as hereinafter defined); and

WHEREAS, on the terms and subject to the conditions set forth herein, Seller Parent and Seller desire to sell, and Purchaser desires to purchase, the Stock.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

Article I
DEFINITIONS

The following terms when used in this Agreement shall have the following meanings:

    • " 12b-1 Plan " means any distribution plan adopted by a registered investment company in accordance with Rule 12b-1 under the Investment Company Act.

      " 401(k) Plans " means defined contribution plans that include a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code.

      " Accounting Firm " has the meaning set forth in Section 2.4(b)(ii).

      " Adjusted Closing Fee Rate " means the lower of (i) the applicable Schedule 2.6 Fee Rate and (ii) the actual fee rate payable to (A) a Subject Company pursuant to the Advisory Contract relating to the relevant Sponsored Fund, Sub-Advised Fund, Separate

101

 

 

    • Account Client or New Advisory Client (as applicable) that will be in effect as of immediately following the Closing or (B) to Purchaser or any of its Affiliates pursuant to the applicable advisory agreement in effect immediately following the merger, as approved prior to Closing, of a Sponsored Fund into a fund sponsored by Purchaser Parent or any of its Affiliates (not including any performance-based, incentive or similar fees or any sales, exit, switching, administrative, distribution or similar fees and after reduction to take into account any fee waivers, reimbursement obligations or similar offsets or arrangements to be in effect as of immediately following the Closing with respect to advisory or sub-advisory services (as applicable) performed by the Subject Companies or Purchaser or any of its Affiliates, as applicable, for such Sponsored Fund, Sub-Advised Fund, Separate Account Client or New Advisory Client (as applicable)); provided that, in the case of a Sponsored Fund, its Schedule 2.6 Fee Rate shall apply in any event if (a) Purchaser initiated the reduction in the applicable fee rate (including a reduction resulting from a merger of a Sponsored Fund with a fund (including any newly-formed "shell" fund) sponsored by Purchaser or any of its Affiliates if and to the extent that, as proposed by Purchaser, such merger contemplated a fee rate less than such Schedule 2.6 Fee Rate) or (b) the board of directors or trustees of any fund sponsored by Purchaser or any of its Affiliates required a reduction in the applicable fee rate as a condition to such board’s approval of the merger of a Sponsored Fund with such fund. Notwithstanding anything herein to the contrary, in the case of a Sponsored Fund for which clause (a) or (b) of the proviso in the preceding sentence applies, if the fee rate determined under clause (ii) was further reduced as a result of circumstances not described in clause (a) or (b), then the "Adjusted Closing Fee Rate" shall be the applicable Schedule 2.6 Fee Rate reduced by the amount of the fee rate reduction attributable to such circumstances.

      " Adjusted TNW Amount " has the meaning set forth in Section 2.4(c)(III).

      " Administration Contract " means any written agreement to which a Sponsored Fund or Subject Company is party that relates to the provision of administrative, accounting, bookkeeping or transfer agent services to a Sponsored Fund.

      " Adviser Compliance Policies " has the meaning set forth in Section 4.18(n).

      " Advisory Client " means any client to whom any of the Subject Companies provides investment advisory services or investment sub-advisory services (including, without limitation, the Sponsored Funds, the Sub-Advised Funds and the Separate Account Clients).

      " Advisory Contract " means any written agreement pursuant to which any of the Subject Companies or any Third Party Adviser provides investment advisory services or investment sub-advisory services to Advisory Clients (or, in the case of a Third Party Adviser, a Subject Company).

      " Affected Employees " means employees of any of the Subject Companies immediately prior to the Closing Date (other than employees of any of the Subject Companies who are on long-term disability leave).

102

 

 

    • " Affiliate " means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such first Person. The term "control" (including its correlative meanings "controlled by" and "under common control with") means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or other ownership interests, by contract, or otherwise).

      " Affiliate Transaction " has the meaning set forth in Section 4.21(b).

      " Aggregate Base Advisory Revenue Run-Rate " means the amount set forth on Schedule 1 as "Aggregate Base Advisory Revenue Run Rate."

      " Aggregate Closing Advisory Revenue Run-Rate " means the sum of the Closing Advisory Revenue Run-Rates for all Sponsored Funds, Sub-Advised Funds, Separate Account Clients and New Advisory Clients with respect to which Client Consent has been obtained (and remains in effect) as of the Closing Date.

      " Agreement " has the meaning set forth in the introductory paragraph hereof.

      " Ancillary Agreements " means the Bank Channel Distribution Agreement and the Transition Services Agreement.

      " Applicable Law " has the meaning set forth in Section 4.3.

      " Appraiser " has the meaning set forth in Section 10.6.

      " Assets " has the meaning set forth in Section 4.13(a).

      " Bank Channel " means the distribution channel consisting of the marketing and sales of and provision of shareholder, administrative and other services relating to, investment products, by employees holding Series 6 and Series 7 licenses, point of sale representatives and their direct supervisors and others, through the retail branch banking system of or otherwise by Seller and its Affiliates, including all such operations located or accessible at bank branches or online through the website that services the retail bank customers of Seller and its Affiliates.

      " Bank Channel Distribution Agreement " means the Distribution Agreement substantially in the form of Exhibit A hereto, including the letter agreement annexed thereto.

      " Base Advisory Revenue Run-Rate " means, with respect to a Sponsored Fund, Sub-Advised Fund or Separate Account Client (as applicable), the product of (i) the Base Assets Under Management of such Sponsored Fund, Sub-Advised Fund or Separate Account Client (as applicable), multiplied by (ii) the applicable Schedule 2.6 Fee Rate.

      " Base Assets Under Management " means, with respect to a Sponsored Fund, Sub-Advised Fund or Separate Account Client (as applicable), the dollar amount of assets

103

 

 

    • under management by the Subject Companies for such Sponsored Fund, Sub-Advised Fund or Separate Account Client (as applicable) as of the Base Date.

      " Base Date " means April 30, 2006.

      " Base Purchase Price " has the meaning set forth in Section 2.2.

      " Benchmark Fee Revenue " means, for any Make-Whole Year, the amount set forth on Schedule 2 as "Benchmark Fee Revenue". Notwithstanding the foregoing, if a Client Consent with respect to any Special Client has not been obtained or is not in effect, then, to the extent the Purchase Price has been adjusted as a result thereof pursuant to Section 2.5 and has not been trued-up pursuant to Section 2.7, the Benchmark Fee Revenue shall not include the amount(s) indicated on Schedule 2 that are attributable to such Special Client.

      " Benefit Plans " has the meaning set forth in Section 4.11(b).

      " Board Governance Matters " has the meaning set forth in Section 6.3(e).

      " Broker-Dealer Compliance Policies " has the meaning set forth in Section 4.18(n).

      " Business " means the business and operations of the Company and its Subsidiaries as conducted as of the date hereof and at any time between the date hereof and Closing.

      " Business Day " means any day which is not a Saturday, Sunday or a day on which banks in Seattle, Washington, or New York, New York, are authorized or obligated by law or executive order to be closed.

      " Cap " has the meaning set forth in Section 11.1(b)(A).

      " CDSC Financing Agreements " means, collectively, (i) that certain Second Amended and Restated Purchase and Sale Agreement, dated as of March 20, 1998, by and among the Company, Citibank N.A. and Citicorp North America, Inc., (ii) that certain Seventh Facility Amendment, dated as of June 30, 2005, by and among WM Funds Distributor, Inc., the Company, Seller, Citibank N.A. and Citicorp North America, Inc., (iii) that certain Third Amended and Restated Servicing Agreement, dated as of March 5, 1999, by and among the WM Funds Distributor, Inc., Citibank N.A. and Citicorp North America, Inc., (iv) that certain Third Amended and Restated Collection Agency Agreement, dated as of March 5, 1999, by and among WM Funds Distributor, Inc., Citibank, N.A., Citicorp North America, Inc., and Bankers Trust Company, (v) that certain Fourth Amended and Restated Manager Undertaking, dated as of March 20, 1998, by and among the Company, Citibank, N.A. and Citicorp North America, Inc., (vi) that certain Fourth Amended and Restated Parent Undertaking, dated as of March 20, 1998, by and among Seller, Citibank, N.A., and Citicorp North America, Inc., and (vii) the related agreements amended thereby and other transaction documents contemplated thereby.

104

 

 

    • " Claim Notice " has the meaning set forth in Section 11.3(a).

      " Client Consent " means:

      (i)            With respect to a Sponsored Fund, that the Subject Companies shall have obtained Fund Board Approval and Sponsored Fund Shareholder Approval of ( A ) a new Advisory Contract contemplated by Section 6.3(e)(i) to be in effect with respect to such Sponsored Fund as of immediately following the Closing on the terms and conditions contemplated by the first sentence of Section 6.3(e), and ( B ) in the case of each Sponsored Fund listed in Schedule 8.2(f)(ii) (except to the extent that Purchaser shall have waived in writing the condition set forth in Section 8.2(f)(ii)(B) with respect to any such Sponsored Fund), the merger of such Sponsored Fund with a fund sponsored by Purchaser or any of its Affiliates as contemplated by Section 6.3(e);

      (ii)           With respect to a Sub-Advised Fund, that the Subject Companies shall have obtained Fund Board Approval and (solely in the event that shareholder approval is required under Section 15 of the Investment Company Act, as determined by the sponsor of such Sub-Advised Fund), Sub-Advised Fund Shareholder Approval of a new Advisory Contract to be in effect with respect to such Sub-Advised Fund as of immediately following the Closing on the terms and conditions contemplated by the first sentence of Section 6.3(e);

      (iii)          With respect to a Separate Account Client, that the Subject Companies shall have obtained its Separate Account Consent on the terms and conditions contemplated by Section 6.3(f); and

      (iv)          With respect to a New Advisory Client, that the Subject Companies shall have obtained (A) in the case of a New Advisory Client that is not an investment company (or series thereof) registered under the Investment Company Act, such consent of such New Advisory Client to the "assignment" of its Advisory Contract resulting from the consummation of the transactions contemplated by this Agreement as is required under the terms of such Advisory Contract and Applicable Law, or (B) in the case of a New Advisory Client that is an investment company (or series thereof) registered under the Investment Company Act, such approval by the board of directors or trustees (as applicable) and (in the event that such shareholder approval is required under Section 15 of the Investment Company Act) the shareholders of such New Advisory Client as is required under the Investment Company Act of a new Advisory Contract to be in effect with respect to such New Advisory Client as of immediately following the Closing on the terms and conditions contemplated by the first sentence of Section 6.3(e).

      " Closing " has the meaning set forth in Section 3.1.

      " Closing Adjusted Assets Under Management " means, with respect to a Sponsored Fund, Sub-Advised Fund, Separate Account Client or New Advisory Client (as applicable), the dollar amount of assets under management by the Subject Companies for such Sponsored Fund, Sub-Advised Fund, Separate Account Client or New Advisory Client (as applicable) as of the Base Date (or, in the case of a New Advisory Client, such

105

 

 

    • later date as such New Advisory Client first became an Advisory Client of the Subject Companies), as adjusted to reflect net asset flows (i.e., sales, redemptions, purchases, contributions, deposits, withdrawals, exchanges, surrenders, dividend payments, interest payments, reinvestments of dividends and reinvestments of interest) with respect to assets under management by the Subject Companies for such Sponsored Fund, Sub-Advised Fund, Separate Account Client or New Advisory Client (as applicable) following the Base Date (or, in the case of a New Advisory Client, such later date as such New Advisory Client first became an Advisory Client of the Subject Companies) (excluding any assets purchased or contributed by Seller Parent or its Affiliates for their own accounts) through and including the Business Day prior to the Closing Date. (For the avoidance of doubt, the calculation of Closing Adjusted Assets Under Management pursuant to the immediately preceding sentence is intended to exclude any increase or decrease in assets under management resulting from market appreciation or depreciation from and after the Base Date (or, in the case of a New Advisory Client, such later date as such New Advisory Client first became an Advisory Client of the Subject Companies).)

      " Closing Advisory Revenue Run-Rate " means, with respect to a Sponsored Fund, Sub-Advised Fund, Separate Account Client or New Advisory Client (as applicable), the product of (i) the Closing Adjusted Assets Under Management of such Sponsored Fund, Sub-Advised Fund, Separate Account Client or New Advisory Client (as applicable), multiplied by (ii) the applicable Adjusted Closing Fee Rate.

      " Closing Date " has the meaning set forth in Section 3.1.

      " Closing Date Balance Sheet " has the meaning set forth in Section 2.4(a).

      " Closing Payment " has the meaning set forth in Section 7.3.

      " Code " means the Internal Revenue Code of 1986, as amended, or any successor thereto.

      " Company " has the meaning set forth in the preamble to this Agreement.

      " Company Financial Statements " has the meaning set forth in Section 4.7(a).

      " Confidentiality Agreement " means the Confidentiality Agreement, dated as of April 4, 2006, between Seller Parent and Purchaser relating to, among other things, the confidentiality of certain information provided by or on behalf of Seller Parent to Purchaser with respect to the Company and its Subsidiaries.

      " Contract " has the meaning set forth in Section 4.3.

      " Damages " has the meaning set forth in Section 11.1(a).

      " Deductible " has the meaning set forth in Section 11.1(b).

      " Deferred Compensation Liabilities " has the meaning set forth in Section 7.6.

106

 

 

    • Deferred Compensation Plans " has the meaning set forth in Section 7.6.

      " Distribution Agreement " means (i) any agreement between a Sponsored Fund and a Subject Company or (ii) any agreement between a Sponsored Fund or Subject Company and a Third Party intermediary, Seller, Seller Parent or any of their Subsidiaries (other than the Subject Companies) pursuant to which (A) such intermediary makes available to its clients or customers investment products for which any Subject Company serves as an investment adviser, sub-advisor or distributor or provides shareholder services with respect to such investment products or pursuant to which such intermediary and any Subject Company share revenues relating to such intermediary’s clients or customers or (B) any Subject Company or an Affiliate thereof makes available to its clients or customers investment products for which any Subject Company serves as an investment adviser, sub-advisor or distributor or provides shareholder services with respect to such investment products (including, in each case, without limitation, any agreement or arrangement pursuant to which a Subject Company makes payments to an intermediary out of its own resources, for services relating to the distribution of fund shares, shareholder services or the provision of non-distribution services for or on behalf of purchasers of Sponsored Fund shares or the Sponsored Funds).

      " Election Forms " has the meaning set forth in Section 10.6.

      " Elections " has the meaning set forth in Section 10.6.

      " ERISA " means the Employee Retirement Income Security Act of 1974, as amended.

      " Estimated Accruals " has the meaning set forth in Section 7.7(b).

      " Estimated Working Capital Amount " has the meaning set forth in Section 2.3.

      " Exchange Act " means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder.

      " Fixed Annuity and Variable Annuity Products " means fixed annuity products, variable annuity and variable life insurance products.

      " Fund Board Approval " has the meaning set forth in Section 6.3(e).

      " Fund Filings " has the meaning set forth in Section 4.19(d).

      " Fund Shareholder Approvals " has the meaning set forth in Section 6.3(e).

      " GAAP " means generally accepted accounting principles in the United States.

      " Governmental Approvals " has the meaning set forth in Section 4.4(a).

      " Governmental Authority " has the meaning set forth in Section 4.3.

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    • " HSR Act " has the meaning set forth in Section 4.4(a).

      " Indemnified Entity " has the meaning set forth in Section 11.3(a).

      " Indemnified Purchaser Entities " has the meaning set forth in Section 11.1(a).

      " Indemnified Seller Entities " has the meaning set forth in Section 11.2(a).

      " Indemnifying Party " has the meaning set forth in Section 11.3(a).

      " Intellectual Property " means U.S. and foreign intellectual property, including patents and patent applications, inventions, discoveries, processes, algorithms, formulae, technology, know-how, designs, ideas, research and development, and related improvements; copyrights and copyrightable works (including software, code, applications, databases, website content, documentation and related items in any and all forms and media), and registrations and applications to register or renew the registration of any of the foregoing; Trademarks, service marks, trade names, corporate names, domain names, logos, trade dress, including all goodwill associated with the foregoing, and other source indicators, and registrations and applications to register or renew the registration of any of the foregoing (including all product names or other active or dormant Trademarks, whether currently or previously used in the Business); trade secrets and confidential or proprietary information.

      " Intercompany Balances " has the meaning set forth in Section 4.21(a).

      " Interim Period " has the meaning set forth in Section 10.1.

      " Investment Advisers Act " means the Investment Advisers Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

      " Investment Company Act " means the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

      " IRS " has the meaning set forth in Section 4.11(c).

      " Knowledge of Seller " means the actual knowledge of any of the individuals identified in Section 1.1 of the Seller Disclosure Letter, or (except in the case of representations and warranties, other than the representations and warranties in Section 4.19, regarding the Sub-Advised Funds) the actual knowledge that would have been obtained by any of such individuals after due inquiry of those employees of Seller Parent or its Subsidiaries that such individuals would reasonably expect to have knowledge of the relevant subject matter.

      " Leased Real Property " has the meaning set forth in Section 4.13(c).

      " Lien " means any mortgage, pledge, lien, charge, security interest or other similar encumbrance or any adverse claim of any kind.

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    • " Make-Whole At 95% " means, for any Make-Whole Year, the excess, if any, of (i) the product of (x) the lesser of 95% and the National Channel Shortfall Percentage, multiplied by (y) Benchmark Fee Revenue for such Make-Whole Year over (ii) the Selected Annual Fee Revenue for such Make-Whole Year.

      " Make-Whole At 100% " means, for any Make-Whole Year, the excess, if any, of (i) the product of (x) the lesser of 100% and the National Channel Shortfall Percentage, multiplied by (y) Benchmark Fee Revenue for such Make-Whole Year over (ii) the Selected Annual Fee Revenue for such Make-Whole Year.

      " Make-Whole Calculation " has the meaning set forth in Section 2.6(a).

      " Make-Whole Payment " means, for any Make-Whole Year, the sum of (i) the Make-Whole At 95% plus (ii) 50% of the difference, if any, between (a) the Make-Whole At 100% and (b) the Make-Whole At 95%; provided that the Make-Whole Payment for any Make-Whole Year shall not exceed $30 million.

      " Make-Whole Reconciliation Amount " means the following amount, if any: (i) if the Selected Asset Shortfall Amount equals or exceeds the sum of the Make-Whole Payments, zero; and (ii) in each other case, the excess, if any, of (x) the sum of the Make-Whole Payments paid by Seller to Purchaser pursuant to Section 2.6 over (y) the Selected Asset Shortfall Amount (but in no event more than the sum of the Make-Whole Payments).

      " Make-Whole Years " means the 12 month periods ending on the first four anniversaries of the Closing.

      " Material Adverse Effect " means (a) any effect on or change to any Subject Company that is or would reasonably be expected to be, either individually or in the aggregate, materially adverse to the business, operations or financial or other condition of the Subject Companies, taken as a whole, other than any such effect or change attributable to or resulting from (i) this Agreement or the transactions contemplated hereby (other than relating to or arising out of a breach of Section 4.3), (ii) any change in the capital markets or securities markets, (iii) any change in general economic conditions or interest rates, (iv) any change or condition affecting the industries in which the Subject Companies operate generally, or (v) any change in Applicable Law or GAAP or in the official interpretations thereof; provided, that the exceptions set forth in clauses (ii) through (v) shall only apply to the extent that such effect or change does not have or cause a disproportionate effect or change on the Subject Companies, taken as a whole, relative to comparable Persons in the investment management industry; and further provided that for purposes of the first sentence of Section 4.10 only, any decline in the Aggregate Closing Advisory Revenue Run-Rate compared to the Aggregate Base Advisory Revenue Run-Rate that results solely from the failure to obtain Client Consents with respect to Sponsored Funds, Sub-Advised Funds, Separate Account Clients or New Advisory Clients and/or withdrawals from assets under management by the Subject Companies for Sponsored Funds, Sub-Advised Funds, Separate Account Clients or New Advisory Clients following the Base Date, to the extent that such decline results in an

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    • adjustment to the Purchase Price pursuant to Section 2.5, shall not constitute a Material Adverse Effect (but any other factor that causes or contributes to such decline, including any factor that causes clients not to deliver Client Consents or to effect withdrawals, shall not be excluded by this proviso); or (b) any effect, change or circumstance that would reasonably be expected to prohibit or materially impair the ability of Seller Parent, Seller or any Affiliate of Seller, as applicable, to consummate the transactions contemplated hereby and by the Ancillary Agreements or perform their respective obligations hereunder and thereunder on a timely basis.

      " Material Contract " means any written or oral Contract to which any of the Subject Companies is a party or by which any of them or any of their assets is bound which (i) is an Advisory Contract or is a Distribution Agreement pursuant to which any Subject Company has preferred provider status as of the date hereof, (ii) by its terms does not terminate or is otherwise not cancelable within 180 days without penalty, cost or liability and requires aggregate payments by the Subject Companies in excess of $100,000 per year for any such Contract, (iii) provides for future payments or the acceleration or vesting of payments in excess of $25,000 that are conditioned, in whole or in part, on a change in control of any of the Subject Companies, (iv) contains provisions restricting in any material respects the ability of such Subject Company to compete or engage in any business activity in any location, or that would so limit the freedom of Purchaser or any of its Affiliates or any of the Subject Companies after Closing; (v) directly relates to any material Intellectual Property that is owned or licensed by any Subject Company, (vi) contains provisions requiring future contingent or definitive "earnout" or similar payments to be made by a Subject Company in connection with acquisitions of assets or equity interests of a business or the hiring of any employees, which future payments could in the aggregate exceed $250,000 for any such Contract (or series of related Contracts), (vii) is a Distribution Agreement or an Administration Contract, (viii) relates to indebtedness for money borrowed by such Subject Company (or other financing arrangements having the economic effect of indebtedness, whether incurred, assumed, guaranteed or secured by any asset) in excess of $250,000 in the aggregate for any such Contract, (ix) is a lease or sublease of real property which requires aggregate payments by or to the Subject Companies in excess of $100,000 per year for any such lease or sublease, (x) is a Contract between any of the Subject Companies, on the one hand, and Seller Parent or any of its Affiliates (other than the Subject Companies), on the other hand, which provides for aggregate payments by or to the Subject Companies in excess of $100,000 per year for any such Contract, (xi) relates to any joint venture, partnership, limited liability company or other similar agreement or arrangements (including any agreement providing for joint research, development or marketing); (xii) relates to the acquisition or disposition of any business, a material amount of stock or assets of any other Person or any material real property (whether by merger, sale of stock, sale of assets or otherwise), including any option agreement; (xiii) relates to any interest rate, derivatives or hedging transaction; (xiv) is an agreement (including any "take-or-pay" or keepwell agreement) under which (A) any Person has directly or indirectly guaranteed any liabilities or obligations of any of the Subject Companies or (B) any of the Subject Companies has directly or indirectly guaranteed any liabilities or obligations of any other Person (in each case other than endorsements for the purpose of collection in the ordinary course of business); or (xv) is otherwise material to

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    • the business or operations of the Subject Companies, taken as a whole; provided , however , in no event shall the definition of Material Contract be deemed to include Benefit Plans; and, provided further , that a Material Contract shall also include any custody agreement, administration contract, transfer agent agreement, accounting services agreement, shareholder services agreement and similar agreement, by which a Sponsored Fund is bound or pursuant to which a Sponsored Funds receives services.

      " NASD " has the meaning set forth in Section 4.18(e).

      " National Channel Shortfall Percentage " means, as to any Make-Whole Year, the quotient (expressed as a percentage) of (i) Purchaser’s Retail Mutual Fund Annual Fee Revenue in such Make-Whole Year divided by (ii) Purchaser’s Retail Mutual Fund Benchmark Annual Fee Revenue.

      " New Advisory Client " means any Advisory Client (including a Separate Account Client) for whom the Subject Companies first commenced providing investment advisory services following the Base Date and prior to the Closing; provided , that New Advisory Clients shall not include a registered investment company (or series thereof) or Seller, Seller Parent or any of their Affiliates.

      " Owned Intellectual Property " has the meaning set forth in Section 4.16(a).

      " Permits " has the meaning set forth in Section 4.9.

      " Permitted Liens " means (i) Liens for Taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings, and, in each case, for which adequate reserves with respect thereto have been made in the Company Financial Statements in accordance with GAAP, (ii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairman’s or other similar Liens that are not material to the Subject Companies in the aggregate, (iii) easements, rights of way, building, zoning and other similar encumbrances or title defects that are not material to the Subject Companies in the aggregate, and (iv) Liens on assets of any of the Subject Companies incurred in the ordinary course of business which do not materially impair business operations or the use of such properties in the ordinary course of business and that are not material to the Subject Companies in the aggregate.

      " Person " means any individual, corporation, company, partnership (limited or general), limited liability company, joint venture, association, trust, unincorporated organization or other business entity.

      " Pre-Closing Period " has the meaning set forth in Section 10.1.

      " Privacy Policies " has the meaning set forth in Section 4.18(n).

      " Purchase Price " has the meaning set forth in Section 2.2.

      " Purchaser " has the meaning set forth in the introductory paragraph hereof.

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    • " Purchaser Disclosure Letter " means the disclosure letter delivered by Purchaser to Seller at the time of execution hereof.

      " Purchaser Fund Board Approval " has the meaning set forth in Section 6.3(e).

      " Purchaser Material Adverse Effect " has the meaning set forth in Section 5.4(a).

      " Purchaser Parent " has the meaning set forth in the introductory paragraph hereof.

      " Purchaser’s Affiliated Group " means any corporation, or group of corporations, which files a Tax Return together with Purchaser Parent on a consolidated, combined or unitary basis.

      " Purchaser’s Retail Mutual Fund Annual Fee Revenue " means, for each Make-Whole Year after Closing, the aggregate advisory or sub-advisory fee revenue that would have been earned in respect of the funds included in Purchaser’s Retail Mutual Fund Business based on the daily average Purchaser’s Retail Mutual Fund AUM during such Make-Whole Year if the relevant Schedule 2.6 Fee Rate for each such fund applied. For purposes of the determination of "Purchaser’s Retail Mutual Fund Annual Fee Revenue," in the case of each Sponsored Fund that is merged into a fund sponsored by Purchaser or any of its Affiliates that exists as of the date hereof, the applicable fee rate shall be the weighted average fee rates of such Sponsored Fund and such fund sponsored by Purchaser or any of its Affiliates, with such weighting calculated based on assets under management as of the Base Date as reflected in Schedule 3.

      " Purchaser’s Retail Mutual Fund AUM " means, as of any date of determination, the dollar amount of assets under management by Purchaser’s Retail Mutual Fund Business (and, for dates prior to Closing, the Subject Companies), as of the Base Date, as adjusted to reflect net asset flows (i.e., sales, redemptions, purchases, contributions, deposits, withdrawals, exchanges, surrenders, dividend payments, interest payments, reinvestments of dividends and reinvestments of interest) with respect to such assets under management following the Base Date through and including the date of determination, but excluding Selected AUM. (For the avoidance of doubt, the calculation of Purchaser’s Retail Mutual Fund AUM pursuant to the immediately preceding sentence is intended to exclude any increase or decrease in assets under management resulting from market appreciation or depreciation from and after the Base Date.)

      " Purchaser’s Retail Mutual Fund Benchmark Annual Fee Revenue " means the amount set forth on Schedule 3.

      " Purchaser’s Retail Mutual Fund Business " means the operations of Purchaser and its Affiliates (including, after Closing, the Subject Companies) distributing, and acting as an advisor or sub-advisor to, Retail Mutual Funds sold through broker-dealers in the United States; provided , however , that Purchaser’s Retail Mutual Fund Business shall exclude the mutual fund business of Purchaser and its Affiliates related to (a) 401(k) Plans sponsored by third parties for which Purchaser or its Affiliates provide recordkeeping, trust, custodial, investment advisory, or other services, (b) participant asset rollovers from such 401(k) Plans into other products manufactured, distributed, or

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    • serviced by Purchaser and its Affiliates, and (c) Purchaser’s or its Affiliates’ mutual funds sold by Purchaser’s or its Affiliates’ career insurance agents. For the avoidance of doubt, the Purchaser’s Retail Mutual Fund Business as of the Base Date consisted of the assets under management described in Schedule 4.

      " Registered Fund Clients " has the meaning set forth in Section 4.19(a).

      " Registered Separate Account " has the meaning set forth in Section 4.19(f).

      " Retail Mutual Fund " means any corporation, trust or other juridical entity (i) organized under the laws of the United States or any state thereof, (ii) which is registered as an investment company under Section 8 of the Investment Company Act (and which has not elected to be treated as a business development company pursuant to Section 54 of the Investment Company Act), and (iii) which has registered, or proposes to register, its securities under the Securities Act for public offering and sale.

      " Schedule 2.6 Fee Rate " means, in respect of any Sponsored Fund, Sub-Advised Fund, Separate Account Client or New Advisory Client (as applicable), or the Purchaser’s Retail Mutual Fund AUM, as the case may be, the fee rate set forth on Schedule 2.6, which schedule sets forth the relevant fee rates as of April 30, 2006.

      " Seattle Sublease " means the Sublease Agreement, dated as of July 1, 1999, between Washington Mutual Bank, a Washington state chartered stock savings bank, and the Company, as amended by the First Amendment to Sublease Agreement, made effective as of July 1, 2004, between Washington Mutual Bank, a federal association, successor by way of merger to Washington Mutual Bank, a Washington state chartered stock savings bank, and the Company.

      " SEC " means the United States Securities and Exchange Commission.

      " Section 338 Allocation " has the meaning set forth in Section 10.6.

      " Securities Act " means the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder.

      " Selected Annual Fee Revenue " means, for each Make-Whole Year after Closing, the advisory or sub-advisory fee revenue that would have been earned in respect of the daily average Selected AUM during such Make-Whole Year if the relevant Schedule 2.6 Fee Rate (or, in the case of Selected AUM managed for a Special Client, such lower rate as applied from time to time during such Make-Whole Year) applied. For illustrative purposes only, the Selected Annual Fee Revenue as of the Base Date is calculated on Schedule 2.

      " Selected Asset Shortfall Amount " means the sum of (i) the Selected Asset Shortfall At 95% plus (ii) 50% of the difference, if any, between (a) the Selected Asset Shortfall At 100% and (b) the Selected Asset Shortfall At 95%.

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    • " Selected Asset Shortfall At 95% " means the excess, if any, of (a) the product of (i) 3.8 and (ii) the Benchmark Fee Revenue, over (b) the sum of the Selected Annual Fee Revenues for each Make-Whole Year.

      " Selected Asset Shortfall At 100% " means the excess, if any, of (a) the product of (i) 4.0 and (ii) the Benchmark Fee Revenue, over (b) the sum of the Selected Annual Fee Revenues for each Make-Whole Year.

      "Selected AUM " means, as of any date of determination, without duplication, the dollar amount of assets under management by the Subject Companies and by Purchaser and its Affiliates (including, after the Closing, the Subject Companies) in the United States (i) through the Bank Channel and (ii) for Seller, Seller Parent or any of their Affiliates (other than the Subject Companies) other than in respect of any 401(k) Plan of such Person, in each case as of the Base Date, as adjusted to reflect net asset flows (i.e., sales, redemptions, purchases, contributions, deposits, withdrawals, exchanges, surrenders, dividend payments, interest payments, reinvestments of dividends and reinvestments of interest) with respect to such assets under management following the Base Date, through and including the date of determination. (For the avoidance of doubt, the calculation of Selected AUM pursuant to the immediately preceding sentence is intended to exclude any increase or decrease in assets under management resulting from market appreciation or depreciation from and after the Base Date.) For illustrative purposes only, the Selected AUM as of the Base Date is set forth on Schedule 2. Notwithstanding anything herein to the contrary, assets advised or subadvised by the Subject Companies as of the date hereof that are related to any Fixed Annuity and Variable Annuity Products and that are not described in Schedule Y of the Seller Disclosure Letter, together with, for the avoidance of doubt, assets advised or subadvised by the Subject Companies or, after the Closing, Purchaser and its Affiliates that are related to any Fixed Annuity and Variable Annuity Products that are first introduced for distribution in the Bank Channel after the date hereof, shall be deemed to be assets under management through the Bank Channel for purposes of the definition of "Selected AUM".

      " Seller " has the meaning set forth in the introductory paragraph hereof.

      " Seller Disclosure Letter " means the disclosure letter delivered by Seller to Purchaser at the time of execution hereof.

      " Seller Parent " has the meaning set forth in the introductory paragraph hereof.

      " Seller Parent’s Group " means any corporation, or group of corporations, which files a Tax Return together with Seller Parent on a consolidated, combined or unitary basis.

      " Seller Permitted Activities " means engaging in the business of distributing and servicing Retail Mutual Funds of third parties at bank branches through WM Financial Services, Inc. and any other controlled Affiliate of Seller Parent.

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    • " Seller Restricted Activities " means engaging in the Territory in the business of (a) acting as investment adviser or subadviser to or otherwise sponsoring or managing a Retail Mutual Fund, or (b) performing fund administration and related activities in respect of the activities covered by the preceding clause (a).

      " Seller Restricted Period " means the period beginning on the Closing Date and ending on the fifth anniversary of Closing, provided that the Seller Restricted Period shall in no event exceed the maximum time period allowed by Applicable Law.

      " Seller Severance Plan " has the meaning set forth in Section 7.2.

      " Separate Account Clients " has the meaning set forth in Section 4.19(a).

      " Separate Account Consent " has the meaning set forth in Section 6.3(f).

      " Special Client " means any of the entities set forth on Schedule Z of the Seller Disclosure Letter.

      " Sponsored Fund Shareholder Approval " has the meaning set forth in Section 6.3(e).

      " Sponsored Funds " has the meaning set forth in Section 4.19(a).

      " SRO " has the meaning set forth in Section 4.18(n).

      " Stock " has the meaning set forth in the preamble to this Agreement.

      " Sub-Advised Fund Shareholder Approval " has the meaning set forth in Section 6.3(e).

      " Sub-Advised Funds " has the meaning set forth in Section 4.19(a).

      " Subject Companies " means, collectively, the Company and its Subsidiaries.

      " Subsidiary " means, with respect to any entity, a corporation or other entity of which the outstanding shares of stock or other equity interests having ordinary voting power to elect a majority of the board of directors (or comparable body) of such corporation or other entity are owned, directly or indirectly, through one or more intermediaries, by such entity. Ownership through fiduciary, trust, custodial or similar arrangements for the account of customers shall not constitute ownership of stock or other equity interests for purposes of this definition.

      " Tangible Net Worth " means the total tangible assets of the Company consolidated with its Subsidiaries minus the total liabilities of the Company consolidated with its Subsidiaries (in each case as determined in accordance with GAAP, applied on a basis consistent with the Company Financial Statements, and Schedule 2.4(a)).

      " Target Working Capital Amount " means $11,575,000.

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    • " Tax-Exempt Municipal Bond Fund " has the meaning set forth in Section 4.19(f).

      " Tax Returns " means all returns, declarations, reports, estimates, information returns (including IRS Forms 1098, 1099, 1042 and 1042-S), statements and other documents (including any related or supporting information) required to be filed in respect of Taxes, including any information returns, claims for refunds of Taxes, and any amendments or supplements to any of the foregoing, and "Tax Return" means any of the foregoing Tax Returns.

      " Taxes " means any and all federal, state, county, provincial, local, foreign and other taxes, charges, fees, levies or other assessments, including without limitation all net income, alternative or add-on minimum, gross income, gross receipts, premium, estimated, sales, use, ad valorem, value-added, environmental, windfall, capital stock, property, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, customs, duties and guaranty fund assessments, together with any interest, additions to tax or interest, and penalties with respect thereto imposed by any taxing authority.

      " Territory " means the United States of America.

      " Third Party " has the meaning set forth in Section 11.3(a).

      " Third Party Adviser " has the meaning set forth in Section 4.19(w).

      " Third Party Claim " has the meaning set forth in Section 11.3(b).

      " Third Party Consents " has the meaning set forth in Section 4.4(b).

      " Trademarks " has the meaning set forth in Section 6.6(a).

      " Transaction Bonus Plan " has the meaning set forth in Section 7.3.

      " Transition Services Agreement " means the Transition Services Agreement substantially in the form attached hereto as Exhibit B, with such additions and modifications to the exhibits and schedules thereto as Purchaser and Seller shall agree to, as contemplated by the second sentence of Section 6.12.

      " Vacation Policy " has the meaning set forth in Section 7.5.

      " Variable Insurance Products Fund " has the meaning set forth in Section 4.19(f).

      " Variable Pay Plan " has the meaning set forth in Section 7.7(b).

      " Variable Pay Plan Amount " has the meaning set forth in Section 7.7(b).

      " Variable Pay Plan Participant " has the meaning set forth in Section 7.7(b).

      " Working Capital Amount " means the current assets of the Company consolidated with its Subsidiaries minus the current liabilities of the Company

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    • consolidated with its Subsidiaries (in each case as determined in accordance with GAAP, applied on a basis consistent with the Company Financial Statements, and Schedule 2.4(a), and including only the line items used in the example calculation of the Working Capital Amount set forth in Schedule 2.4(b) hereto).

      " Working Capital Deficiency Amount " has the meaning set forth in Section 2.4(c).

      " Working Capital Surplus Amount " has the meaning set forth in Section 2.4(c).

Article II
PURCHASE AND DELIVERY OF STOCK

2.1           Delivery of Stock . On the terms and subject to the conditions set forth in this Agreement, Seller shall, at the Closing on the Closing Date, transfer, assign and deliver to Purchaser or its designee certificates evidencing the Stock, free and clear of Liens other than Liens created by Purchaser or its Affiliates. Such certificates evidencing the Stock shall be duly endorsed in blank, or be accompanied by stock transfer powers duly executed in blank, with all necessary stock transfer tax stamps affixed thereto and cancelled.

2.2           Closing; Payment of Purchase Price . On the terms and subject to the conditions set forth in this Agreement and against delivery of the certificates evidencing the Stock as provided in Section 2.1, Purchaser shall pay, at the Closing on the Closing Date, by wire transfer of immediately available funds to such account or accounts as Seller shall designate in writing to Purchaser not less than one Business Day prior to the Closing Date $740,000,000 (the " Base Purchase Price "), subject to adjustment as provided in Sections 2.3 through 2.7 (as so adjusted, the " Purchase Price ").

2.3           Estimated Working Capital Amount . (a) Seller shall use its reasonable best efforts to cause a full balance sheet closing to take place on the Closing Date as if it were the last day of a fiscal period for the Company and its Subsidiaries. Not later than five (5) Business Days prior to the Closing Date, Seller shall deliver to Purchaser a written statement containing an estimated consolidated balance sheet of the Company and its Subsidiaries and an estimated calculation of the Working Capital Amount, in each case as of the close of business on the Closing Date (the " Estimated Working Capital Amount "). The Estimated Working Capital Amount shall be calculated in accordance with GAAP, applied on a basis consistent with the Company Financial Statements, and Schedule 2.4(a).

(b)           If the Estimated Working Capital Amount is less than the Target Working Capital Amount, the Purchase Price paid by Purchaser at the Closing shall be decreased by the excess of the Target Working Capital Amount over the Estimated Working Capital Amount. If the Estimated Working Capital Amount is greater than the Target Working Capital Amount, the Purchase Price paid by Purchaser at the Closing shall be increased by the excess of the Estimated Working Capital Amount over the Target Working Capital Amount.

2.4           Post-Closing Working Capital Purchase Price Adjustment . The Purchase Price shall be subject to adjustment after the Closing as specified in this Section 2.4.

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(a)           Closing Date Balance Sheet . As promptly as practicable, but in any event within 60 days following the Closing, Purchaser shall deliver to Seller a consolidated balance sheet of the Company and its Subsidiaries as of the Closing Date (the " Closing Date Balance Sheet "). The Closing Date Balance Sheet shall be prepared in accordance with GAAP, applied on a basis consistent with the Company Financial Statements, and Schedule 2.4(a), and shall be accompanied by a written statement setting forth a calculation of the Working Capital Amount and the Tangible Net Worth as of the close of business on the Closing Date, based on the Closing Date Balance Sheet. Seller and Seller Parent shall assist and cooperate with Purchaser in all commercially reasonable respects in the preparation of the Closing Date Balance Sheet and the calculation of the Working Capital Amount and the Tangible Net Worth, including by providing Purchaser with reasonable access to any relevant personnel, books and records related to the Company and its Subsidiaries that are in Seller’s or Seller Parent’s possession.

(b)           Disputes . (i) Seller and its accountants shall be provided with reasonable access to the work papers of Purchaser and its accountants and to the books and records of the Company and its Subsidiaries in connection with its review of the Closing Date Balance Sheet and the calculation of the Working Capital Amount and the Tangible Net Worth; provided , however , that the auditors and outside accountants of Purchaser and the Subject Companies shall not be obligated to make work papers available to Seller or its accountants unless Seller and its accountants have signed a customary agreement relating to access to such work papers in form and substance reasonably acceptable to such accountants, as applicable.

    • (ii)           Seller may dispute amounts on the Closing Date Balance Sheet and/or the calculation of the Working Capital Amount and the Tangible Net Worth, by notifying Purchaser in writing within 30 days of Seller’s receipt of the Closing Date Balance Sheet and calculation of the Working Capital Amount and the Tangible Net Worth from Purchaser that Seller believes the Closing Date Balance Sheet or the calculation of the Working Capital Amount and the Tangible Net Worth contains mathematical errors or was not prepared in accordance with Section 2.4(a) and setting forth, in reasonable detail, the basis for such dispute. Seller shall not challenge the Closing Date Balance Sheet or calculation of the Working Capital Amount and the Tangible Net Worth on any other basis. In the event of such a dispute, Seller and Purchaser shall attempt to reconcile their differences, and any resolution by them as to any disputed amounts or calculations shall be final, binding and conclusive on the parties hereto. If Seller and Purchaser are unable to reach a resolution with such effect within 30 days after the receipt by Purchaser of Seller’s written notice of dispute, Seller and Purchaser shall submit the items remaining in dispute for resolution to KPMG LLP (or, if such firm shall decline or is unable to act or is not, at the time of such submission, independent of Seller and Purchaser, to another independent accounting firm of international reputation mutually acceptable to Seller and Purchaser) (either KPMG LLP or such other accounting firm being referred to herein as the " Accounting Firm "), which shall, within 45 days after such submission, determine and report to Seller and Purchaser upon such remaining disputed items or calculations, and such report shall be final, binding and conclusive on Seller and Purchaser; provided that in no event shall the Accounting Firm’s determination of such remaining disputed items or calculations be for an amount that is outside the range of the Purchaser’s and Seller’s disagreement. Purchaser and Seller shall make reasonably available to the Accounting Firm all relevant

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    • books and records, any work papers (including those of the parties’ respective accountants, to the extent applicable) and supporting documentation relating to the Closing Date Balance Sheet, the calculation of the Working Capital Amount and the Tangible Net Worth and any other items reasonably requested by the Accounting Firm; provided , however , that the accountants of Seller, Seller Parent, Purchaser and the Subject Companies shall not be obligated to make work papers available to the Accounting Firm unless the Accounting Firm has signed a customary agreement relating to access to such work papers in form and substance reasonably acceptable to such accountants. The fees and disbursements of the Accounting Firm shall be borne by Seller and Purchaser in proportion to the relative differences between their respective calculations of the remaining disputed items or calculations and the aggregate amount of such remaining disputed items or calculations as determined by the Accounting Firm.

(c)           Purchase Price Adjustment . The Closing Date Balance Sheet and calculation of the Working Capital Amount and the Tangible Net Worth shall be deemed final for the purposes of this Section 2.4 upon the earliest of (i) the failure of Seller to notify Purchaser of a dispute within 30 days of Seller’s receipt of the Closing Date Balance Sheet from Purchaser, (ii) the resolution of all disputes, pursuant to Section 2.4(b), by Seller and Purchaser or (iii) the resolution of all disputes, pursuant to Section 2.4(b), by the Accounting Firm. Within three Business Days of the Closing Date Balance Sheet and calculation of the Working Capital Amount and the Tangible Net Worth being deemed final, a Purchase Price adjustment shall be paid as follows:

        • (I)            If the Working Capital Amount calculated based on the Closing Date Balance Sheet is less than the Estimated Working Capital Amount, Seller shall pay to Purchaser, in immediately available funds, an amount equal to the excess of the Estimated Working Capital Amount over the Working Capital Amount based on the Closing Date Balance Sheet (any such excess, the " Working Capital Deficiency Amount "). Seller shall pay the Working Capital Deficiency Amount, if applicable, to Purchaser in cash by wire transfer of immediately available federal funds to such bank account(s) as shall be designated in writing by Purchaser to Seller within one (1) Business Day of the Closing Date Balance Sheet and calculation of the Working Capital Amount being deemed final.

          (II)           If the Working Capital Amount calculated based on the Closing Date Balance Sheet is greater than the Estimated Working Capital Amount, Purchaser shall pay to Seller, in immediately available funds, an amount equal to the excess of the Working Capital Amount based on the Closing Date Balance Sheet over the Estimated Working Capital Amount (any such excess, the " Working Capital Surplus Amount "). Purchaser shall pay the Working Capital Surplus Amount, if applicable, to Seller in cash by wire transfer of immediately available federal funds to such bank account(s) as shall be designated in writing by Seller to Purchaser within one (1) Business Day of the Closing Date Balance Sheet and calculation of the Working Capital Amount being deemed final.

          (III)         If the sum of (i) the Tangible Net Worth on the Closing Date Balance Sheet, plus (ii) any Purchase Price adjustment in favor of Purchaser

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        • pursuant to Sections 2.3(b) or 2.4(c)(I), minus (iii) any Purchase Price adjustment in favor of the Seller pursuant to Sections 2.3(b) or 2.4(c)(II) (such sum, the " Adjusted TNW Amount "), is less than $11,575,000, Seller shall pay to Purchaser, in immediately available funds, an amount equal to $11,575,000 less the Adjusted TNW Amount. Seller shall pay such amount, if applicable, to Purchaser in cash by wire transfer of immediately available federal funds to such bank account(s) as shall be designated in writing by Purchaser to Seller within one (1) Business Day of the Closing Date Balance Sheet and calculation of the Tangible Net Worth being deemed final.

(d)           Interest on Payments . Any payments required to be made by Seller or Purchaser pursuant to Section 2.4(c) shall be accompanied by cash interest thereon calculated from the Closing through the date of payment at the prime lending rate prevailing during such period as published in The Wall Street Journal.

(e)           The provisions in Section 2.4(b) relating to resolutions of disputes by an Accounting Firm are not intended to and shall not be interpreted to require that the parties refer to such a firm (i) any dispute arising out of a breach by one of the parties of its obligations under this Agreement or (ii) any dispute the resolution of which requires the construction or interpretation of this Agreement (apart from the mathematical calculation of the Working Capital Amount and the accounting treatment of current assets and current liabilities insofar as such treatment affects the Closing Date Balance Sheet and the calculation of the Working Capital Amount).

2.5           Purchase Price Adjustment Based on Changes in Advisory Revenue Run-Rate . The Purchase Price shall be subject to adjustment at the Closing as specified in this Section 2.5.

(a)           Purchase Price Adjustment . If the Aggregate Closing Advisory Revenue Run-Rate is less than the Aggregate Base Advisory Revenue Run-Rate, the Purchase Price shall be reduced to the amount that is equal to the product of the Base Purchase Price and a fraction, the numerator of which is the Aggregate Closing Advisory Revenue Run-Rate and the denominator of which is the Aggregate Base Advisory Revenue Run-Rate; provided , however , that if the fraction referred to in the preceding clause is less than eight tenths (0.8), then eight tenths (0.8) shall be used in lieu of such fraction.

(b)           Delivery of Statements . At least 20 and no more than 30 days before the Closing Date, Seller shall prepare in good faith and deliver to Purchaser:

                • (i)                                      an estimate of the Aggregate Closing Advisory Revenue Run-Rate, together with supporting calculations in reasonable detail; and

                  (ii)                                   an estimate of the reduction in the Base Purchase Price, if any, pursuant to this Section 2.5.

Seller and Seller Parent shall give, and shall cause the Subject Companies and their respective advisers, counsel and accountants to give, Purchaser and its advisers, counsel and accountants full access to the Subject Companies’ books, records and personnel needed to enable Purchaser

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to participate meaningfully in determining the estimate of the Aggregate Closing Advisory Revenue Run-Rate and the estimate of the Base Purchase Price reduction, if any; provided , however , that the auditors and outside accountants of Seller, Seller Parent and the Subject Companies shall not be obligated to make accounting work papers available to Purchaser or its advisers, counsel and outside accountants unless Purchaser has signed a customary agreement relating to access to such accounting work papers in form and substance reasonably acceptable to Seller’s, Seller Parent’s and the Subject Companies’ respective accountants, as applicable.

(c)           Delivery of Statements . Promptly following the close of business on the Business Day immediately preceding the Closing Date, Seller shall prepare in good faith and deliver to Purchaser:

                • (i)                                      a statement showing the Aggregate Closing Advisory Revenue Run-Rate, together with supporting calculations in reasonable detail; and

                  (ii)                                   a statement of the reduction in the Base Purchase Price, if any, pursuant to this Section 2.5.

Seller and Seller Parent shall give, and shall cause the Subject Companies and their respective advisers, counsel and accountants to give, Purchaser and its advisers, counsel and accountants full access to the Subject Companies’ books, records and personnel needed to enable Purchaser to review such statements; provided , however , that the auditors and outside accountants of Seller, Seller Parent or the Subject Companies shall not be obligated to make work papers available to Purchaser or its advisers, counsel and outside accountants unless Purchaser has signed a customary agreement relating to access to such accounting work papers in form and substance reasonably acceptable to Seller, Seller Parent, or the Subject Companies, as applicable, and their respective accountants, as applicable.

(d)           Disputes . If Purchaser disputes the statements delivered by Seller pursuant to Section 2.5(c), the Closing shall proceed based on the statements delivered by Seller and such dispute thereafter shall be resolved as follows. Seller and Purchaser shall first attempt to reconcile their differences, and any resolution by them as to any disputed amounts or calculations shall be final, binding and conclusive on the parties hereto. If Seller and Purchaser are unable to reach a resolution with such effect within 10 Business Days, Seller and Purchaser shall submit the items remaining in dispute for resolution to the Accounting Firm, which shall, within 15 Business Days after such submission, determine and report to Seller and Purchaser upon such remaining disputed items or calculations, and such report shall be final, binding and conclusive on Seller and Purchaser; provided that in no event shall the Accounting Firm’s determination of such remaining disputed items or calculations be for an amount that is outside the range of the Purchaser’s and Seller’s disagreement. Purchaser and Seller shall make reasonably available to the Accounting Firm all relevant books and records, any work papers (including those of the parties’ respective accountants, to the extent applicable) and supporting documentation relating to the determination of the Aggregate Closing Advisory Revenue Run-Rate and the reduction in the Purchase Price, if any; provided , however , that the parties’ outside accountants shall not be obligated to make work papers available to the Accounting Firm unless the Accounting Firm has signed a customary agreement relating to access to such work papers in

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form and substance reasonably acceptable to such accountants. The fees and disbursements of the Accounting Firm shall be borne by Purchaser and Seller in proportion to the relative differences between their respective calculations of the remaining disputed items or calculations and the aggregate amount of such remaining disputed items or calculations as determined by the Accounting Firm.

(e)           Purchase Price Adjustment . The reduction in the Purchase Price, if any, shall be deemed final for purposes of this Section 2.5 upon the earliest of (i) the failure of Purchaser to notify Seller of a dispute within 45 days following the Closing Date, (ii) the resolution of all disputes, pursuant to Section 2.5(d), by Seller and Purchaser or (iii) the resolution of all disputes, pursuant to Section 2.5(d), by the Accounting Firm. Any amount that is disputed by Purchaser but paid to Seller at Closing and thereafter resolved in favor of Purchaser shall be promptly paid by Seller to Purchaser. Any payments required to be made by Seller pursuant to Section 2.5 shall be accompanied by cash interest thereon calculated from the Closing through the date of payment at the prime lending rate prevailing during such period as published in The Wall Street Journal. The provisions in this Section 2.5 relating to resolutions of disputes by an Accounting Firm are not intended to and shall not be interpreted to require that the parties refer to such a firm (i) any dispute arising out of a breach by one of the parties of its obligations under this Agreement or (ii) any dispute the resolution of which requires the construction or interpretation of this Agreement (apart from the mathematical calculation of the reduction in the Purchase Price pursuant to this Section 2.5).

2.6           Make-Whole Purchase Price Adjustment . The Purchase Price shall be subject to further adjustment after the Closing as specified in this Section 2.6.

(a)           Make-Whole Calculation . As promptly as practicable, but in any event within 60 days following the end of each of the Make-Whole Years, Purchaser shall deliver to Seller a calculation (the " Make-Whole Calculation "), with reasonable supporting documentation, of the following items for such period: Selected AUM; Selected Annual Fee Revenue; Purchaser’s Retail Mutual Fund AUM; Purchaser’s Retail Mutual Fund Annual Fee Revenue; and the Make-Whole Payment, if any. In addition, Purchaser shall deliver to Seller a preliminary, quarterly calculation of such amounts within 45 days after the end of each of the first three quarterly periods during each of the Make-Whole Years; provided, that such quarterly calculations shall be for information purposes only. The Selected AUM and the Purchaser’s Retail Mutual Fund AUM shall be derived from the books and records of Purchaser and its Subsidiaries for the relevant periods of determination. Seller and Seller Parent shall assist and cooperate with Purchaser in all commercially reasonable respects in the calculation of such items, including by providing Purchaser with reasonable access to any relevant personnel, books and records in the possession of Seller, Seller Parent or any of their Affiliates.

(b)           Disputes . (i) Seller and its accountants shall be provided with reasonable access to the work papers of Purchaser and its accountants and to the books and records of the Purchaser and its Subsidiaries in connection with its review of the Make-Whole Calculation delivered by Purchaser pursuant to Section 2.6(a); provided , however , that Purchaser’s outside accountants shall not be obligated to make work papers available to Seller or its accountants unless Seller and its outside accountants have signed a customary agreement relating to access to

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such work papers in form and substance reasonably acceptable to Purchaser and Purchaser’s outside accountants.

        • (ii)           Seller may dispute any amounts on the Make-Whole Calculation by notifying Purchaser in writing of any such disputed amounts or calculations and setting forth, in reasonable detail, the basis for such dispute within 30 days of Seller’s receipt of the Make-Whole Calculation from Purchaser. In the event of such a dispute, Seller and Purchaser shall attempt to reconcile their differences, and any resolution by them as to any disputed amounts or calculations shall be final, binding and conclusive on the parties hereto. If Seller and Purchaser are unable to reach a resolution with such effect within 30 days after the receipt by Purchaser of Seller’s written notice of dispute, Seller and Purchaser shall submit the items remaining in dispute for resolution to the Accounting Firm, which shall, within 45 days after such submission, determine and report to Seller and Purchaser upon such remaining disputed items or calculations, and such report shall be final, binding and conclusive on Seller and Purchaser; provided that in no event shall the Accounting Firm’s determination of such remaining disputed items or calculations be for an amount that is outside the range of the Purchaser’s and Seller’s disagreement. Purchaser and Seller shall make reasonably available to the Accounting Firm all relevant books and records, any work papers (including those of the parties’ respective accountants, to the extent applicable) and supporting documentation relating to the Make-Whole Calculation; provided , however , that the parties’ outside accountants shall not be obligated to make work papers available to the Accounting Firm unless the Accounting Firm has signed a customary agreement relating to access to such work papers in form and substance reasonably acceptable to such accountants. The fees and disbursements of the Accounting Firm shall be borne by Purchaser and Seller in proportion to the relative differences between their respective calculations of the remaining disputed items or calculations and the aggregate amount of such remaining disputed items or calculations as determined by the Accounting Firm.

(c)           Make-Whole Purchase Price Adjustment . The calculation of the amount of the Make-Whole Payment shall be deemed final for the purposes of this Section 2.6 upon the earliest of (i) the failure of Seller to notify Purchaser of a dispute within 30 days of Seller’s receipt of the Make-Whole Calculation for the applicable period from Purchaser, (ii) the resolution of all disputes, pursuant to Section 2.6(b), by Seller and Purchaser or (iii) the resolution of all disputes, pursuant to Section 2.6(b), by the Accounting Firm. Within three Business Days of any calculation of the amount of the Make-Whole Payment being deemed final, Seller shall pay to Purchaser an amount equal to the finally determined Make-Whole Payment in cash by wire transfer of immediately available federal funds to such bank account(s) as shall be designated in writing by Purchaser.

(d)           Make-Whole Reconciliation Amount . If any Make-Whole Payment is paid by Seller to Purchaser pursuant to Section 2.6(c) above in respect of any Make-Whole Year, then within 10 Business Days following the date on which the Make-Whole Payment for the Make-Whole Year ending on the fourth anniversary of Closing becomes final as provided in Section 2.6(c), Purchaser shall deliver to Seller a calculation of the Make-Whole Reconciliation

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Amount. The calculation of the Make-Whole Reconciliation Amount shall use the final calculations for each Make-Whole Payment and related items as finally determined pursuant to Section 2.6(c) above. Within three Business Days of the delivery of the calculation of the Make-Whole Reconciliation Amount, Purchaser shall pay to Seller an amount equal to the finally determined Make-Whole Reconciliation Amount, if any, in cash by wire transfer of immediately available federal funds to such bank account(s) as shall be designated in writing by Seller.

2.7           Post-Closing True-Up . (a) If (i) (x) Fund Shareholder Approval was not obtained with respect to any Sponsored Fund or (solely to the extent that approval of the shareholders of a Sub-Advised Fund is required under Section 15 of the Investment Company Act, as determined by the sponsor of such Sub-Advised Fund) Sub-Advised Fund, or (y) any Separate Account Consent was not obtained prior to Closing, (ii) the Purchase Price was adjusted at Closing pursuant to Section 2.5 as a result of the failure to obtain such Fund Shareholder Approval or Separate Account Consent, as the case may be, and (iii) on or prior to the 120 th  day after the Closing Date any such Fund Shareholder Approval or Separate Account Consent is obtained and in full force and effect as of the 120 th  day after the Closing Date, then Purchaser shall pay to Seller, on the 130 th  day after the Closing Date, an amount equal to the excess, if any, of (I) the Purchase Price that would have been paid if the Aggregate Closing Advisory Revenue Run-Rate had been calculated as provided in Section 2.7(b) and assuming that such Fund Shareholder Approval or Separate Account Consent, as the case may be, had been obtained prior to Closing over (II) the Purchase Price that was paid at Closing, provided that in no event shall Purchaser be obligated to pay Seller, in respect of any Fund Shareholder Approval or Special Client Consent, an amount in excess of the lesser of (s) the reduction of the Purchase Price pursuant to Section 2.5 attributable to the relevant Sponsored Fund, Sub-Advised Fund or Special Account Client, as the case may be, and (t) the amount of the increase in the Purchase Price pursuant to this Section 2.7 that is attributable to the specific Sponsored Fund, Sub-Advised Fund or Special Account Client, as the case may be.

(b)           For purposes of calculating the Aggregate Closing Advisory Revenue Run-Rate in respect of the relevant Sponsored Funds, Sub-Advised Funds and Separate Account Clients to which this Section 2.7 applies: (A) references to the Closing and the Closing Date in the definitions of Aggregate Closing Advisory Revenue Run-Rate and Closing Adjusted Assets Under Management shall be deemed to be references to the Business Day immediately following the date that the relevant Fund Shareholder Approval or Separate Account Consent is obtained; and (B) references to the Closing in the definition of Adjusted Closing Fee Rate shall be deemed to be references to the Business Day immediately following the later of (u) the date that the relevant Fund Shareholder Approval or Separate Account Consent is obtained and (v) the date that any new Advisory Contract or merger, as the case may be, takes effect.

(c)           The procedures for resolving disputes between Seller and Purchaser set forth in Section 2.5(d) shall apply, mutatis mutandis , to any disputes arising under this Section 2.7.

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Article III
CLOSING DATE

3.1           Closing Date . Unless this Agreement shall have theretofore been terminated and the transactions herein abandoned pursuant to Section 9.1, subject to the provisions of Article VIII, the closing (the " Closing ") of the purchase and sale of the Stock provided for in Article II shall take place at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York, as of 4:01 p.m., New York City time, on the last Business Day of the first calendar month during which all conditions set forth in Sections 8.1, 8.2 and 8.3 (other than conditions relating to delivery of certificates at the Closing) are satisfied or waived at least two (2) Business Days prior to such calendar month-end, or at such other place and time and on such other date as the parties may agree in writing, in either such case provided that all conditions set forth in Sections 8.1, 8.2 and 8.3 remain satisfied or waived as of the Closing. The date on which the Closing occurs is herein called the " Closing Date ".

Article IV
REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the Seller Disclosure Letter, Seller and Seller Parent, jointly and severally, represent and warrant to Purchaser and Purchaser Parent, as of the date hereof and as of the Closing Date, that:

4.1           Organization, Power, etc . (a) Each of Seller and Seller Parent is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation.

(b)           Each of the Subject Companies has been duly incorporated or organized and is validly existing and in good standing under the laws of its jurisdiction of incorporation or organization. Where applicable, each of the Subject Companies is duly qualified or licensed as a foreign corporation or other entity to do business and is in good standing in each jurisdiction in which the nature of its business or properties makes such qualification or license necessary, and each of the Subject Companies has full power and authority necessary to own all of its properties and assets and to carry on its business as it is now being conducted, except where failure to be so qualified, licensed or in good standing or to have such power or authority (as applicable) would not reasonably be expected to have a Material Adverse Effect. True and complete copies of the certificate of incorporation and bylaws of the Company and each of its Subsidiaries, as in effect as of the date hereof, have heretofore been delivered or made available to Purchaser.

4.2           Authority Relative to Agreements . Each of Seller, Seller Parent and any Affiliate of Seller which is to be a party to an Ancillary Agreement, as applicable, has the corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by each of Seller, Seller Parent and any Affiliate of Seller which is to be a party to an Ancillary Agreement, as applicable, of this Agreement and the Ancillary Agreements, the performance of its obligations hereunder and thereunder and its consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action. This Agreement has been,

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and the Ancillary Agreements upon their execution and delivery at Closing will have been, duly and validly executed and delivered by Seller, Seller Parent and any Affiliate of Seller which is to be a party to an Ancillary Agreement, as applicable, and, assuming the due authorization, execution and delivery by Purchaser or its Affiliates party thereto, constitute their legal and binding obligations, enforceable against them in accordance with their terms, except as may be affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally and general equitable principles.

4.3           Non-Contravention . The execution and delivery of this Agreement by Seller and Seller Parent do not, and the execution and delivery of the Ancillary Agreements by Seller, Seller Parent and any Affiliate of Seller which is to be a party to an Ancillary Agreement, as applicable, will not, and their consummation of the transactions contemplated hereby and thereby, and their performance of the obligations which they are obligated to perform or cause to be performed hereunder and thereunder will not: (a) violate any provision of the certificate of incorporation or by-laws or other organizational documents of any of them or of any Subject Company or Sponsored Fund; or (b) assuming that all consents, authorizations, orders or approvals of, filings or registrations with, and notices to, any national, state or local government or political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, any court, tribunal or arbitrator, and any self-regulatory organization (" Governmental Authority ") referred to in Section 4.4(a), all Third Party Consents referred to in Section 4.4(b) of the Seller Disclosure Letter, and all Client Consents of Advisory Clients contemplated by Section 6.3 have been obtained or, in the case of filings, registrations and notices, made, (i) conflict with or violate any law, regulation, rule, order, judgment or decree of any Governmental Authority (" Applicable Law "), (ii) except as set forth in Section 4.3 of the Seller Disclosure Letter, require the consent of or other action by any Person under, violate, result in the termination or acceleration of or of any right under, give rise to or modify any right or obligation under (whether or not in combination with any other event or circumstance), or conflict with, breach or constitute a default under (in each case with or without notice, the passage of time or both), any mortgage, indenture, lease, license, note, contract, agreement, commitment, Benefit Plan or other instrument or arrangement (each a " Contract ") to which any of them or any Subject Company or Sponsored Fund is a party or by which any of their respective properties or other assets is bound or (iii) result in the creation of any Lien on the Stock or any of the stock, assets or properties of any Subject Company or any Sponsored Fund, except, in the case of clauses (ii) and (iii), for any such violation, termination, acceleration, conflict, default or Lien as would not reasonably be expected to have a Material Adverse Effect.

4.4           Consents, etc . (a) Except for (i) the filing of notice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (" HSR Act "), and the expiration or early termination of the applicable waiting period, and (ii) as described in Section 4.4(a) of the Seller Disclosure Letter, no consent, authorization, order or approval of, filing or registration with, or notice to, any Governmental Authority (collectively, " Governmental Approvals ") is required for the execution and delivery of this Agreement and the Ancillary Agreements by Seller, Seller Parent or any Affiliate of Seller, as applicable, the performance by them of their respective obligations hereunder and thereunder and their consummation of the transactions contemplated hereby and thereby, except in any such case for any such Governmental Approvals the failure of

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which to be obtained or, in the case of filings, registrations and notices, made would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)           Except as described in Section 4.4(b) of the Seller Disclosure Letter or as contemplated by Section 6.3 hereof, no consent, authorization, approval or waiver from or notice to any party (other than a Governmental Authority) to any Contract (collectively, " Third Party Consents ") to which Seller, Seller Parent, any Affiliate of Seller or any Sponsored Fund is a party or by which any of their respective properties are bound is required for the execution and delivery of this Agreement and the Ancillary Agreements by Seller, Seller Parent or any Affiliate of Seller, as applicable, the performance by them of their respective obligations hereunder and thereunder and their consummation of the transactions contemplated hereby and thereby, except in any such case for any such Third Party Consent the failure of which to be obtained or made would not reasonably be expected to have a Material Adverse Effect.

4.5           Title to Stock . Upon the delivery and payment for the Stock as contemplated herein, Seller will transfer to Purchaser good and valid title to the Stock, free and clear of any Liens (other than Liens created or incurred by Purchaser or any of its Affiliates). The Stock has been duly authorized and validly issued and is fully paid and nonassessable.

4.6           Capital Stock of the Subject Companies . (a) The authorized capital stock of the Company consists of 10,000 shares of common stock, par value $0.25 per share, of which 3,974 shares are issued and outstanding and owned, beneficially and of record, by Seller, free and clear of any Liens. There are no outstanding obligations, warrants, options or other rights to subscribe for or purchase from the Company, Seller or Seller Parent, or any of their Affiliates, or other contracts or commitments providing for the issuance of or granting any Person the right to acquire, shares of any class of stock of the Company, or any securities or other instruments convertible into or exchangeable or exercisable for shares of any class of stock of the Company. There are no outstanding (i) voting trusts, proxies or other similar agreements or understandings to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound with respect to the voting of any shares of capital stock of or other voting or equity interests in the Company or any of its Subsidiaries or (ii) contractual obligations or commitments of any character restricting the transfer of, or requiring the registration for sale of, any shares of capital stock of or other voting or equity interests in the Company or any of its Subsidiaries.

(b)           Section 4.6(b) of the Seller Disclosure Letter sets forth, as to each Subsidiary of the Company, its jurisdiction of organization. All of the outstanding shares of capital stock of each Subsidiary of the Company are validly issued, fully paid and non-assessable and are wholly-owned by the Company, free and clear of any Liens, except as otherwise set forth in Section 4.6(b) of the Seller Disclosure Letter. There are no outstanding obligations, warrants, options or other rights to subscribe for or purchase from any such Subsidiary, or other contracts or commitments providing for the issuance of or granting any Person the right to acquire, shares of any class of stock of any Subsidiary of the Company, or any securities or other instruments convertible into or exchangeable or exercisable for shares of any class of stock of any Subsidiary of the Company.

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(c)           Except as set forth in Section 4.6(c) of the Seller Disclosure Letter, neither the Company nor any of its Subsidiaries owns any shares of capital stock of or other voting or equity interests in (including any securities exercisable or exchangeable for or convertible into capital stock of or other voting or equity interests in) any other Person.

4.7           Company Financial Statements; Accounting Controls . (a) The Company’s consolidated statements of financial condition and the related consolidated statements of operations and comprehensive income, retained earnings and cash flows (including, in each case, any related notes thereto and the reports of the Company’s independent auditors thereon) for fiscal periods commencing on or after January 1, 2003 set forth in Section 4.7 of the Seller Disclosure Letter (collectively, the " Company Financial Statements ") were prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be set forth in the notes thereto, and except for the absence of footnotes in financial statements for interim periods), and fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries at the respective dates thereof and the consolidated results of their operations and cash flows at and for the periods indicated (subject, in the case of financial statements for interim periods, to normal year-end adjustments which will not be material to the Company and its Subsidiaries, taken as a whole).

(b)           The Company and its Subsidiaries have devised and maintained systems of internal accounting controls with respect to the Business sufficient to provide reasonable assurances that ( i ) all transactions are executed in accordance with management’s general or specific authorization, ( ii ) all transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to maintain proper accountability for items, ( iii ) access to their property and assets is permitted only in accordance with management’s general or specific authorization and ( iv ) the recorded accountability for items is compared with the actual levels at reasonable intervals and appropriate action is taken with respect to any differences.

(c)           The Company Financial Statements accurately reflect in the aggregate all amounts charged to the Subject Companies for services provided by Seller, Seller Parent or any of their Affiliates (other than the Subject Companies) to the Subject Companies (including, without limitation, any migration of information technology systems to systems of the the Seller or Seller Parent or any of their Affiliates (other than the Subject Companies)), whether in connection with the operation of the Business or otherwise, including all amounts charged that relate to the individuals listed on Section 4.7(c)(i) of the Seller Disclosure Letter. Section 4.7(c)(ii) of the Seller Disclosure Letter contains an accurate list of all such services. Such amounts charged were not less than the actual costs incurred by Seller, Seller Parent and their Affiliates in providing such services.

(d)           The reports set forth in Section 4.7(d) of the Seller Disclosure Letter are accurate in all material respects and all of the data set forth therein have been derived from the books and records of the Subject Companies.

4.8           Litigation . Except as set forth in Section 4.8 of the Seller Disclosure Letter, there is no action, suit or proceeding pending or, to the Knowledge of Seller, threatened against any Subject Company or Registered Fund Client before any Governmental Authority or

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arbitrator that would reasonably be expected to be material to the Subject Companies, taken as a whole, or prohibit or materially impair the ability of Seller Parent or Seller to consummate the transactions contemplated hereby or perform their respective obligations hereunder on a timely basis. Except as set forth in Section 4.8 of the Seller Disclosure Letter, there are no settlement agreements or similar written agreements with any Governmental Authority and there are no outstanding judgments, decrees, injunctions or orders of any Governmental Authority to which any of the Subject Companies, any of the Sponsored Funds or, to the Knowledge of Seller, any of the Sub-Advised Funds is subject or by which any of their respective assets or properties is bound or affected that would reasonably be expected to have a Material Adverse Effect.

4.9           Compliance with Laws; Permits and Licenses . The operations of each of the Subject Companies are being and, since January 1, 2003, have been, conducted in compliance with all Applicable Laws, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect, and, to the Knowledge of Seller, none of the Subject Companies has been charged or is or has been since January 1, 2003 under investigation with respect to any material violations of any Applicable Laws. Each of the Subject Companies holds all permits, certificates, licenses, approvals, orders and other authorizations (" Permits ") of each Governmental Authority which are necessary for the operation of the Business, except where the failure to hold any such Permit would not reasonably be expected to have a Material Adverse Effect. Except as set forth in Section 4.9 of the Seller Disclosure Letter, (i) the material Permits are valid and in full force and effect, (ii) neither the Company nor any of its Subsidiaries is in default under, and no condition exists that with notice or lapse of time or both would constitute a default under, the material Permits and (iii) none of the material Permits will be terminated or impaired or become terminable, in whole or in part, as a result of the transactions contemplated hereby. Except as set forth in Section 4.9 of the Seller Disclosure Letter, since January 1, 2004, none of the Subject Companies has received any written or, to the Knowledge of Seller, oral notification from any Governmental Authority asserting that any Person is not in compliance with any of the statutes, regulations or ordinances that such Governmental Authority enforces or that such Governmental Authority intends to revoke or suspend any Permit, except where such noncompliance, revocation or suspension would not reasonably be expected to have a Material Adverse Effect.

4.10         Absence of Certain Changes; No Undisclosed Liabilities . (a) Since December 31, 2005, there has been no change, event or development affecting the Subject Companies which has had or would reasonably be expected to have a Material Adverse Effect. Since December 31, 2005, no event or circumstance has occurred or arisen that, if it occurred or arose between the date hereof and Closing, would constitute a breach of Section 6.1.

(b)           Except as contemplated by this Agreement or as set forth in Section 4.10(b) of the Seller Disclosure Letter, and except to the extent of (i) liabilities disclosed or reserved for in the Company Financial Statements and (ii) liabilities incurred by the Subject Companies after December 31, 2005 in the ordinary course of business consistent with past practice that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Subject Companies do not have any liabilities or obligations (known, unknown, accrued, absolute, contingent or otherwise).

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4.11         Personnel and Employee Benefits Matters . (a) Section 4.11(a) of the Seller Disclosure Letter sets forth a complete and correct list of all employees of and consultants to any of the Subject Companies (identified separately as employees or consultants, as appropriate, and indicating each employee who is on an approved leave of absence) as of the Business Day before the date hereof. As of the date of this Agreement, no officer of any of the Subject Companies has provided any of the Subject Companies with notice of termination of employment or, to the Knowledge of Seller, intends to terminate employment with any of the Subject Companies. Each employee of the Subject Companies has been properly classified as "exempt" or "non-exempt" for all purposes under Applicable Law (including, but not limited to, the Fair Labor Standards Act).

(b)           Section 4.11(b) of the Seller Disclosure Letter sets forth a list of each (i) "employee benefit plan" (within the meaning of Section 3(3) of ERISA), (ii) severance, deferred compensation, change in control and employment plan, program or agreement and (iii) vacation, incentive, bonus, stock option, stock purchase, deferred compensation and restricted stock plan, program or policy sponsored, maintained or contributed to by any of the Subject Companies, Seller Parent, Seller or any of their Affiliates, in which present or former employees of the Subject Companies participate or are eligible to participate (collectively, " Benefit Plans ").

(c)           With respect to each Benefit Plan, to the extent applicable to any such Benefit Plan, Seller has provided or made available to Purchaser (i) true and complete copies of all written Benefit Plans; (ii) written descriptions of all unwritten Benefit Plans; (iii) any and all trust agreements; insurance contracts or other funding arrangements; (iv) the most recent IRS determination letter; (v) the current summary plan description; (vi) all material communications received from or sent to the Internal Revenue Service (" IRS "), the Pension Benefit Guaranty Corporation or the Department of Labor (including a written description of any oral communication); and (vii) any and all amendments and modifications to any such document.

(d)           The Benefit Plans are in compliance with all applicable requirements of ERISA, the Code, and other Applicable Laws and have been administered in accordance with their terms and such laws, in each case in all material respects. Each Benefit Plan that is intended to be qualified within the meaning of Section 401 of the Code has received a favorable determination letter as to its qualification, and nothing has occurred that would reasonably be expected to adversely affect such qualification.

(e)           Except for ordinary and usual claims for benefits by participants and beneficiaries, there are no pending or, to the Knowledge of Seller, threatened claims and no pending or, to the Knowledge of Seller, threatened litigation with respect to any Benefit Plan.

(f)            Except as expressly provided in this Agreement or as set forth in Section 4.11(f) of the Seller Disclosure Letter, none of the Seller, the Seller Parent or any of the Subject Companies has any commitment, intention or understanding to create, modify or terminate any Benefit Plan prior to the Closing Date. All contributions required to be made to or in respect of each Benefit Plan have been made on a timely basis and in accordance with the terms of such plan or Applicable Law, and all liabilities in respect of any such Benefit Plan have been accrued in accordance with GAAP. No Subject Company has incurred or would reasonably be expected to incur any material liability (other than with respect to the payment of premiums) under Title

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IV of ERISA in connection with any Benefit Plan. No asset of the Subject Companies is subject to any Lien arising under Section 302(f) of ERISA or Section 412(n) of the Code and no event has occurred and no condition or circumstance has existed that could give rise to any such lien. None of the Subject Companies is required to provide any security under Section 307 of ERISA or Section 401(a)(29) or 412(f) of the Code and, to the Knowledge of Seller, no event has occurred and no condition or circumstance has existed that could reasonably be expected to give rise to any such requirement to provide any such security.

(g)           Except as set forth in Section 4.11(g) of the Seller Disclosure Letter or as accrued or disclosed in the books and records of the Subject Companies, none of the Seller, Seller Parent, or any of the Subject Companies maintains any Benefit Plan providing for post-employment or retiree health, life insurance and/or other welfare benefits having unfunded liabilities, and none of the Seller, Seller Parent, or any of the Subject Companies has any obligation to provide any such benefits to any retired or former employees of the Subject Companies following such employees’ retirement or termination of service, except to the extent provided by Part 6 of Subtitle I of ERISA or Section 4980B of the Code.

(h)           Except as set forth in Section 4.11(h) of the Seller Disclosure Letter, the execution of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby do not and will not constitute a triggering event under any Benefit Plan or otherwise that (either alone or upon the occurrence of any additional or subsequent event) will or may result in any payment (whether of severance pay or otherwise), acceleration, vesting or increase in benefit to any employee or former employee or director of the Subject Companies.

4.12         Taxes . Except as set forth in Section 4.12 of the Seller Disclosure Letter: (a)(i) all material Tax Returns required to be filed by or with respect to each Subject Company have been timely filed and all such Tax Returns are true and complete in all material respects; (ii) all material Taxes required to be paid by or with respect to each Subject Company have been timely paid; and (iii) there are no pending or, to the Knowledge of Seller, threatened actions or proceedings for the assessment or collection of any material Taxes against or with respect to any of the Subject Companies.

(b)           Since January 1, 2000, each Subject Company has been a member of the affiliated group (within the meaning of Section 1504(a) of the Code) of which Seller Parent is the common parent.

(c)           All Taxes required to be withheld by or with respect to any of the Subject Companies have been timely withheld and paid to the proper taxing authority.

(d)           There are no Liens for Taxes (other than Permitted Liens) on any assets of the Subject Companies.

(e)           (i) None of the Subject Companies is a party to or has any obligations or liabilities arising pursuant to any Tax sharing, allocation, indemnification or similar agreement, and (ii) since January 1, 2000, none of the Subject Companies has been a member of a

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consolidated, combined or other affiliated group for the purposes of filing any Tax Return or has been subject to any transferee liabilities.

(f)            No extension or waiver of the statute of limitations has been granted for any Tax Return relating to any Subject Company, that (after giving effect to such extension or waiver) has not yet expired.

(g)           (i) None of the Tax Returns relating to any Subject Company is currently under any audit or examination by any taxing authority, (ii) no notification has been received that such an audit or examination is pending or threatened, (iii) since January 1, 2000, no issues have been raised in writing by any taxing authority with respect to Taxes relating to any Subject Company, (iv) no power of attorney that is currently in force has been granted by or with respect to any Subject Company with respect to any matter relating to Taxes, and (v) there is no advance ruling from or similar agreement with, a taxing authority that would affect the Tax liability of any of the Subject Companies after the Closing.

(h)           To the Knowledge of Seller, all contracts sold, distributed, issued or administered by any Subject Company in connection with any plan described in Sections 401, 403, 408, or 457 or any similar provision of the Code or an employee benefit plan within the meaning of ERISA are in compliance in all material respects with all applicable Code and ERISA requirements and the terms of such contracts and selling or offering documents relating thereto.

(i)            To the Knowledge of Seller, all financial products, life insurance, annuity or other contracts sold, distributed, issued or administered by any Subject Company have been sold, distributed, issued, and administered by the Subject Company and its Affiliates in accordance in all material respects with all Applicable Laws, including, without limitation, the Code and ERISA, and the terms of such products, insurance, annuity or contracts and selling or offering documents relating thereto.

(j)            None of the Subject Companies has participated (within the meaning of Treasury Regulation Section 1.6011-4(c)) in or has been a "material advisor" (within the meaning of Section 6111 of the Code and the Treasury Regulations promulgated thereunder) with respect to any "reportable transaction" (within the meaning of Section 6707A(c) of the Code and the Treasury Regulations promulgated under Section 6011 of the Code).

4.13         Properties .

(a)           Title to Assets, Etc . The Company and its Subsidiaries have good and valid title to, or otherwise have the right to use pursuant to a valid and enforceable lease, license or similar contractual arrangement or, to the extent set forth on Section 4.13 of the Seller Disclosure Letter or so indicated in Section 4.7(c) of the Seller Disclosure Letter, an administrative services agreement, all of the assets (real and personal, tangible and intangible, including all Intellectual Property) that are used or held for use in connection with the Business or are reflected on the balance sheet included in the most recent Company Financial Statements (collectively, the " Assets "), except for accounts receivable collected since the date of such

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balance sheet in the ordinary course of business consistent with past practice, in each case free and clear of any Lien other than Permitted Liens.

(b)           Sufficiency of Assets, Etc . The Assets constitute all of the assets required for or used in the conduct of the Business. The Assets are in good repair and operating condition, subject only to ordinary wear and tear, and are adequate and suitable for the purposes for which they are presently being used or held for use. To the Knowledge of Seller, there are no facts or conditions affecting any material Assets that would reasonably be expected, individually or in the aggregate, to interfere with the use, occupancy or operation of such Assets.

(c)           Real Property . A Subject Company has a valid and enforceable leasehold interest in each of the leased premises in which the Subject Companies currently conduct the Business (the " Leased Real Property "), except as may be affected by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or general equitable principles. As of the date hereof, there is no material default (or event or circumstance which, with the giving of notice or lapse of time, would constitute such a default) by the lessee or, to the Knowledge of Seller, the lessor under any such lease. The use and operation of the Leased Real Property in the conduct of the Business do not violate in any material respect any Applicable Law, covenant, condition, restriction, easement, Permit or agreement. None of the Subject Companies owns any real property in fee simple.

4.14         Certain Labor Matters . None of the Subject Companies is a party to any collective bargaining agreement and there are no labor unions or other organizations representing, purporting to represent or, to the Knowledge of Seller, attempting to represent any employees of the Subject Companies. There is no pending or, to the Knowledge of Seller, threatened strike, slowdown, picketing, work stoppage, concerted refusal to work overtime or other similar labor activity with respect to any employees of the Subject Companies. To the Knowledge of Seller, there are no labor controversies pending against any of the Subject Companies which would reasonably be expected to have a Material Adverse Effect.

4.15         Material Agreements . Section 4.15 of the Seller Disclosure Letter identifies each Material Contract to which any Subject Company or Sponsored Fund is a party or by which any of their assets or properties are bound or affected as of the date of this Agreement ( provided that Seller need not so identify a Distribution Agreement described in clause (ii) of the definition of Material Contract or any agreement described in the second proviso of the definition of Material Contract unless such Distribution Agreement or such other agreement required aggregate payments by the Subject Companies in excess of $100,000 (excluding "adviser paid fees" and 12b-1 fees) for the 12 months ended March 31, 2006) and Seller has made available to Purchaser prior to the date of this Agreement a true and correct copy of each Material Contract identified in Section 4.15 of the Seller Disclosure Letter. The Material Contracts required to be identified in Section 4.15 of the Seller Disclosure Letter (without limitation to what constitutes a Material Contract for any other purpose hereof) include Distribution Agreements relating to at least 90% of the revenue sharing payments (excluding "adviser paid fees" and 12b-1 fees) for the twelve months ended March 31, 2006 and at least sixty percent (60%) of the assets under management by the Subject Companies and the Sponsored Funds as of the date hereof. Except as would not reasonably be expected to have a Material Adverse Effect, each such Material Contract to which any of the Subject Companies or

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Sponsored Funds is a party or by which any of their assets or properties are bound or affected as of the date of this Agreement is in full force and effect, is a legal and binding obligation of the applicable Subject Company or Sponsored Fund and, to the Knowledge of Seller, each of the other parties thereto, in each case enforceable in accordance with its terms, except as may be affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or general equitable principles. No condition exists or event has occurred which (whether with or without notice or lapse of time or both) would constitute a breach or default (or is alleged to constitute a breach or default) by any of the Subject Companies or Sponsored Funds or, to the Knowledge of Seller, any other party thereto under, or result in a right of termination of (and no notice of any intent to terminate has been received by any of the Subject Companies, Seller or Seller Parent), or give rise to any right to accelerate or otherwise modify any other right or obligation under, any such Material Contract to which any of the Subject Companies or Sponsored Funds is a party or by which any of their assets or properties are bound or affected as of the date of this Agreement, except as would not reasonably be expected to have a Material Adverse Effect.

4.16         Intellectual Property . (a) Section 4.16(a) of the Seller Disclosure Letter lists and separately identifies according to the following categories all Intellectual Property owned (the " Owned Intellectual Property ") by any of the Subject Companies or the Sponsored Funds that is registered or subject to an application for registration or that is otherwise material to the Business, all Intellectual Property provided to any Subject Company or Sponsored Fund by Seller, Seller Parent or any of their Affiliates (other than the Subject Companies and the Sponsored Funds) and all agreements to which any of the Subject Companies or Sponsored Funds is a party or by which any of them is otherwise bound or affected that relate to Intellectual Property, including (i) licenses of Intellectual Property to a Subject Company or Sponsored Fund by any other Person, (ii) licenses of Intellectual Property to any other Person by a Subject Company or Sponsored Fund, (iii) agreements otherwise granting or restricting the right to use Intellectual Property and (iv) agreements transferring, assigning, indemnifying with respect to or otherwise relating to Intellectual Property used or held for use in the Business, in each case to the extent material to the Business. Except as set forth in Section 4.16(a) of the Seller Disclosure Letter, as contemplated by Section 6.6, or as would not reasonably be expected to be material to the Business: (a) the Subject Companies own or have the right to use all the Intellectual Property used or held for use in the Business and (b) (i) such Intellectual Property that is registered in the name of any of the Subject Companies is valid and enforceable; (ii) to the Knowledge of Seller, such Intellectual Property is not being infringed or violated by any other Person; and (iii) to the Knowledge of Seller, the conduct of the Business and the use by the Subject Companies or Sponsored Funds of such Intellectual Property do not infringe, conflict with or violate the Intellectual Property of any other Person. To the Knowledge of Seller, none of the Owned Intellectual Property is being infringed or otherwise used or being made available for use by any Person without a license or permission from the Subject Companies, except as set forth in Section 4.16(a) of the Seller Disclosure Letter. The Subject Companies are the exclusive owners of the Owned Intellectual Property set forth in Section 4.16(a) of the Seller Disclosure Letter, free and clear of any Liens other than Permitted Liens. Without limitation, Seller owns or has the right to use any websites maintained or operated in connection with the Business, and, as of Closing, such websites shall be separated from the websites of Seller and Seller Parent and all rights and assets relating thereto shall be transferred to the Company.

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(b)           Except as set forth in Section 4.16(b) of the Seller Disclosure Letter, the Subject Companies have taken all actions reasonably necessary to ensure full protection of the material Intellectual Property under any Applicable Law (including making and maintaining in full force and effect all necessary filings, registrations and issuances). Each of the Subject Companies has taken all actions reasonably necessary to maintain the secrecy of all confidential Intellectual Property used in the Business. To the Knowledge of Seller, none of the Subject Companies is using any material Intellectual Property in a manner that would reasonably be expected to result in the cancellation or unenforceability of such Intellectual Property.

4.17         Brokers . No broker, investment banker, financial advisor or other Person, other than Morgan Stanley & Co., Incorporated, the fees and expenses of which will be paid by Seller Parent, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller Parent or Seller or any of their Affiliates.

4.18         Regulatory Reports, Registrations and Agreements . (a) Each of the Subject Companies has filed all regulatory reports, schedules, forms, registrations, financial statements, sales literature, statements, notices, filings and other documents, together with any amendments required to be made with respect thereto, that it was required under Applicable Law to file since January 1, 2003 with any Governmental Authority. Except as set forth in Section 4.18(a) of the Seller Disclosure Letter, such filings complied in all material respects with Applicable Law and did not at the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were or are made, not misleading. Except as set forth in Section 4.18(a) of the Seller Disclosure Letter, Seller has made available to Purchaser complete and correct copies of (i) all such filings, (ii) all audit or inspection reports provided by any Governmental Authority in respect of the Subject Companies and all written responses thereto made by the Subject Companies since January 1, 2003 and (iii) all non-routine correspondence relating to any investigation of the Subject Companies by any Governmental Authority since January 1, 2003.

(b)           Section 4.18(b) of the Seller Disclosure Letter identifies each Subject Company which is registered or licensed as of the date of this Agreement as (i) a broker-dealer under the Exchange Act or under any similar state or foreign laws, (ii) an investment adviser under the Investment Advisers Act or under any similar state or foreign laws, or (iii) a transfer agent under the Exchange Act or under any similar state or foreign laws, in each case together with a listing of all such registrations and licenses held with all applicable Governmental Authorities. Seller has made available to Purchaser prior to the date of this Agreement a true and correct copy of the Form BD, Form ADV, Form TA-1 or other applicable registration forms of each Subject Company registered in any of the capacities described in the immediately preceding sentence as in effect on the date of this Agreement.

(c)           Section 4.18(c) of the Seller Disclosure Letter identifies each no-action letter and exemptive order issued to any of the Subject Companies or Sponsored Funds that remains applicable to its business as conducted on the date of this Agreement. Prior to the date of this Agreement, Seller has made available to Purchaser a true and correct copy of each such no-action letter and exemptive order. The Subject Companies or Sponsored Funds, as

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applicable, have complied with all representations, terms and conditions of such no-action letters and exemptive orders necessary to rely on the relief granted thereby.

(d)           Each of the Subject Companies that is required to be is, and at all times required by the Investment Advisers Act has been, duly registered as an investment adviser under the Investment Advisers Act. Each of the Subject Companies that is required to be is, and at all times required by Applicable Law (other than the Investment Advisers Act) has been, duly registered, licensed or qualified as an investment adviser in each state or any other jurisdiction where the conduct of its business requires such registration, licensing or qualification. No Subject Company not identified in Section 4.18(b) of the Seller Disclosure Letter (i) is or has been an "investment adviser" within the meaning of the Investment Advisers Act or any other Applicable Law or (ii) is subject to any material liability or disability by reason of any failure to be so registered, licensed or qualified.

(e)           Each of the Subject Companies that is required to be is, and at all times required by Applicable Law has been, duly registered, licensed or qualified as a broker or dealer in each jurisdiction where the conduct o


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