EXHIBIT 10.8 BUSINESS ALLIANCE AGREEMENT

EXHIBIT 10.8

 

 

BUSINESS ALLIANCE AGREEMENT

 

by and between

 

LAZARD GROUP LLC

 

and

 

LFCM HOLDINGS LLC

 

Dated as of May 10, 2005

TABLE OF CONTENTS

 

 

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SCHEDULES

 

BUSINESS ALLIANCE AGREEMENT

 

This BUSINESS ALLIANCE AGREEMENT (this “ Agreement ”), dated as of May 10, 2005, is made and entered into by and between Lazard Group LLC, a Delaware limited liability company (“ Lazard Group ”), and LFCM Holdings LLC, a Delaware limited liability company (“ LFCM Holdings ”). Lazard Group and LFCM Holdings are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties ”. Capitalized terms used in this Agreement that are not otherwise defined herein shall have the meanings ascribed to them in the Separation Agreement (as defined herein).

 

RECITALS

 

WHEREAS, Lazard Group and LFCM Holdings have entered into a certain Master Separation Agreement, dated as of the date hereof (as it may be amended from time to time, the “ Separation Agreement ”), which sets forth the principal corporate transactions required to effect the separation of Lazard Group’s businesses into two separate companies and to recapitalize Lazard Group through a series of transactions; and

 

WHEREAS, pursuant to the provisions of the Separation Agreement, from and after the consummation of the Separation as provided in the Separation Agreement, (a) the LFCM Companies will be engaged in the LFCM Businesses, (b) the Lazard Group Companies will be engaged in the Lazard Group Businesses, (c) the LFCM Companies will own and control the LFCM Assets and assume and be responsible for the LFCM Liabilities, and (d) the Lazard Group Companies will own and control the Lazard Group Assets and retain and be responsible for the Lazard Group Liabilities; and

 

WHEREAS, Section 2.6(a) of the Separation Agreement provides that, after the Contribution and prior to the First Distribution, each of Lazard Group and LFCM Holdings shall enter into this Agreement, which is the Business Alliance Agreement referred to in the Separation Agreement; and

 

WHEREAS, the Parties desire to enter into this Agreement to set forth the terms of their agreement regarding certain business alliances, arrangements, understandings and relationships between them and among the other members of each of their respective Groups following the completion of the Separation (the “ Alliance ”).

 

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1 Certain Defined Terms . As used in this Agreement, the following terms shall have the meanings set forth below (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“ Affiliate ” means, with respect to any specified person, a person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified person.

 

“ Capital Support ” means, with respect to any Fund, committing at least an amount of funds sufficient to pay the capital commitment of the general partner or similar managing entity required by investors of such Fund at the applicable time and places.

 

“ Change of Control ” means, with respect to any person (the “ Target Person ”), the consummation of any transaction or series of related transactions involving: (i) any purchase or acquisition (whether by way of merger, share exchange, consolidation, business combination, consolidation or similar transaction or otherwise) by another person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than any Affiliate of the Target Person prior to such transaction or series of related transactions (such other person or group, an “ Acquiring Person ”), of either (A) the majority of the securities entitled to elect the board of directors or equivalent governing body of the Target Person, (B) the majority of the limited liability company interests or limited partnership interests of the Target Person, (C) the general partnership interest or managing member interest of the Target Person, or (D) all or substantially all of the assets of the Target Person and its Subsidiaries, taken together as a whole; or (ii) any sale, lease, exchange, transfer, license or disposition of all or substantially all of the assets of the Target Person and its Subsidiaries, taken together as a whole, to an Acquiring Person; provided , however , that (x) any sale, transfer or disposition of all of the outstanding limited liability company interests in LAI North America to Lazard Group pursuant to the exercise of the North American Option shall not be deemed to be a Change of Control of LFCM Holdings, LAI Holdings, LAI North America or any Subsidiary of LAI North America and (y) any sale, transfer or disposition of all of the outstanding limited liability company interests in LAI Europe to Lazard Group pursuant to the exercise of the European Option shall not be deemed to be a Change of Control of LFCM Holdings, LAI Holdings, LAI Europe or any Subsidiary of LAI Europe.

 

“ Controlled Affiliate ” means, with respect to any person, any Affiliate of such person controlled by such person or any Subsidiary of such person.

 

“ Equity Rights ” means any (a) securities, options, warrants, calls, rights, conversion rights, preemptive rights, rights of first refusal, redemption rights, repurchase rights or plans, “tag-along” or “drag-along” rights, or (b) commitments, agreements, arrangements or undertakings to issue or grant any of the foregoing.

 

“ European Competitive Business ” means the management, sponsorship or formation of alternative investment Funds (including related joint ventures and alliances and including management, general partner and investment activities) whose primary objective is to make privately negotiated investments in companies or entities primarily doing business in Europe or headquartered in Europe with substantial business in Europe; provided , however , that the term “European Competitive Business” shall not include (a) any business or activity conducted by Lazard Group or any of its Subsidiaries immediately after the Separation or conducted by Wasserstein & Co., LP or Wasserstein & Co., Inc. or (b) any business or activity that is permitted to

 

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be conducted by Fonds Partenaires Group or any Lazard Group Company (other than LEPEP) as of the date hereof under the LEPEP Operating Agreement, even if such LEPEP Operating Agreement is terminated after the date of this Agreement.

 

“ European Merchant Banking Business ” means the management, sponsorship or formation of alternative investment Funds (including related joint ventures and alliances and including management, general partner and investment activities) whose primary objective is to make privately negotiated investments in companies or other entities primarily doing business in Europe or headquartered in Europe with substantial business in Europe, real estate located in Europe or loans relating to real estate located in Europe.

 

“ Financial Advisory or Asset Management Opportunity ” means any opportunity to provide financial advisory and investment banking services or asset management services (other than any services within the scope of the North American Merchant Banking Business or the European Merchant Banking Business); provided , however , that for purposes of clarity, the term “Financial Advisory or Asset Management Opportunity” shall not include (i) underwriting and/or public distribution of equity, debt or convertible securities, including any securities of any Funds managed by LAI Holdings or its Subsidiaries or (ii) any such opportunity with respect to a Fund managed by LAI Holdings or its Subsidiaries or any portfolio company or investment of any such Fund.

 

“ Fund ” means any fund or similar investment vehicle through which commingled capital is managed, including any co-investment vehicle, alternative investment vehicle, side-by-side vehicle or managed accounts incidental thereto; provided , however , that the term “Fund” shall not include any investment of the foregoing or any portfolio company of the foregoing.

 

“ Lazard Competitive Business ” means any business of the type or nature engaged in or operated by Lazard Group and the Lazard Group Companies; provided , however , that the term “Lazard Competitive Business” shall not include (a) the North American Merchant Banking Business, (b) the European Merchant Banking Business or (c) the Capital Markets Business; provided , further , however , that the term “Lazard Competitive Business” shall include (i) the North American Merchant Banking Business as of and if the North American Closing shall have occurred; and (ii) the European Merchant Banking Business as of and if the Europe Closing shall have occurred.

 

“ Lazard Group Representative ” means Kenneth M. Jacobs and Steven J. Golub; provided , however , that Lazard Group shall have the right to add or remove any Lazard Group Representative by providing LFCM Holdings with at least 5 business days’ prior written notice.

 

“ LFCM Representative ” means David McMillan and William Rosenberg; provided , however , that LFCM Holdings shall have the right to add or remove any LFCM Representative by providing Lazard Group with at least 5 business days’ prior written notice.

 

“ LFCM Retained Interest ” means any Net Carry or other economic benefit to which LFCM Holdings shall be entitled to receive as set forth in Schedule 3.7(c)(i) .

 

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“ License Agreement ” means that certain License Agreement, dated as of the date hereof, by and among Lazard Strategic Coordination Company LLC, Lazard Frères & Co. LLC, Lazard Frères S.A.S., Lazard & Co., Holdings Limited and LFCM Holdings.

 

“ Net Carry ”, with respect to any Fund, means the aggregate carry for such Fund less the share of the carry allocated or reserved for allocation to the managers of such Fund, subject in each case to the “clawback” obligations, if any, to return some or all of the carried interest distributions in accordance with the agreement governing such Fund.

 

“ Non-Compete Term ” means the latest to occur of (a) the expiration or termination of the Alliance Term, (b) the expiration of the North American Option, (c) the North American Closing, (d) the expiration of the European Option, (e) the European Closing or (f) the termination or revocation of all of the Lazard Licenses (as defined in the License Agreement).

 

“ North America ” means the United States, Canada, Bermuda and the Cayman Islands.

 

“ North American Competitive Business ” means the management, sponsorship or formation of alternative investment Funds (including related joint ventures and alliances and including management, general partner and investment activities) whose primary objective is to make privately negotiated investments in companies or other entities primarily doing business in North America or headquartered in North America with substantial business in North America, real estate located in North America or loans relating to real estate located in North America; provided , however , that the term “North American Competitive Business” shall not include any business or activity conducted by Lazard Group or any of its Subsidiaries immediately after the Separation or conducted by Wasserstein & Co., LP or Wasserstein & Co., Inc.

 

“ North American Merchant Banking Business ” means the management, sponsorship or formation of alternative investment Funds (including related joint ventures and alliances and including management, general partner and investment activities) whose primary objective is to make privately negotiated investments in companies or other entities primarily doing business in North America or headquartered in North America with substantial business in North America, real estate located in North America or loans relating to real estate located in North America.

 

“ Revenue ” means all fees, compensation, commissions and similar payments, including engagement fees, transaction and “success” fees, “break up” fees, referral fees, commitment fees, management fees, underwriting fees, selling concessions and other derivative fees; provided that the amount of any such Revenue shall be reduced by the aggregate amount of out-of-pocket costs and expenses (including reasonable attorneys’ fees) reasonably incurred by any LFCM Company or any Lazard Group Company in connection with any Underwriting and Distribution Opportunity (including any Lazard Referred Opportunity) for which any LFCM Company is engaged, including the activities described in Sections 2.2(a) and 2.2(b).

 

“ Securities Act ” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

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“ Subsidiary ” means, with respect to any person, any corporation, limited liability company, company, partnership, trust, association or other legal entity or organization of which such person (either directly or through one or more Subsidiaries of such person) (a) owns, directly or indirectly, a majority of the capital stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation, limited liability company, company, partnership, trust, association or other legal entity or organization, or (b) is otherwise entitled to exercise (1) a majority of the voting power generally in the election of the board of directors or other governing body of such corporation, limited liability company, company, partnership, trust, association or other legal entity or organization or (2) control of such corporation, limited liability company, company, partnership, trust, association or other legal entity or organization; provided , however , that “Subsidiary” shall not include any Fund or any investment or portfolio company of any Fund.

 

“ Underwriting and Distribution Opportunity ” means the underwriting and/or public distribution or private investments in public equities (or PIPEs) or Rule 144A offerings of equity, debt or convertible securities primarily in the United States and/or the United Kingdom.

 

Section 1.2 General . Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time. When used herein:

 

(a) the word “or” is not exclusive;

 

(b) the word “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any person, means the direct or indirect possession of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by contract or otherwise;

 

(c) the words “including”, “includes”, “included” and “include” are deemed to be followed by the words “without limitation”;

 

(d) the terms “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision;

 

(e) the word “person” means any individual, corporation, limited liability company, trust, joint venture, association, company, partnership or other legal entity or a government or any department or agency thereof or self-regulatory organization; and

 

(f) all section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit, annex and schedule references not attributed to a particular document shall be references to such exhibits, annexes and schedules to this Agreement.

 

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ARTICLE II

 

ALLIANCE

 

Section 2.1 Alliance Management .

 

(a) Alliance Managers. Each Party shall name one or more representatives to be its Alliance manager for this Agreement (collectively, the “ Alliance Managers ”). The initial Alliance Managers for each Party are listed in Exhibit A hereto. Either Party may replace any of its Alliance Managers at its sole discretion at any time upon reasonable advance notice to the other.

 

(b) Meetings . Meetings of the Alliance Managers shall be held from time to time as agreed by the Alliance Managers and shall occur at least annually. Such meetings may be conducted either in person, by video conference or by telephone.

 

(c) Responsibilities . The Alliance Managers shall be responsible for engaging the appropriate representatives of their respective companies to facilitate the ability of the Parties to meet their obligations hereunder. The responsibilities of the Alliance Managers shall include:

 

(i) Overall management of the collaborative Alliance of the Parties as contemplated by this Agreement and the Separation Agreement; and

 

(ii) Providing a forum for the expeditious resolution of conflicts or disputes between or among the Parties and/or other members of each Group arising out of this Agreement.

 

Section 2.2 Lazard Group Referral Agreement .

 

(a) Lazard Group Referrals . If Lazard Group or any Lazard Group Company becomes aware of any Underwriting and Distribution Opportunity through its activities in the Lazard Competitive Business, the Lazard Group Representative shall deliver notice (a “ Lazard Referral Notice ”) to the LFCM Representative informing LFCM Holdings of such Underwriting and Distribution Opportunity and offering to refer such Underwriting and Distribution Opportunity to LFCM Holdings, subject in each case to applicable law, the applicable client’s consent, any then existing contractual or fiduciary obligations of any Lazard Group Company and the arrangements set forth on Schedule 2.2(a) . During the period beginning on the date of receipt by the LFCM Representative of the Lazard Referral Notice and expiring on the date (the “ Lazard Referral Expiration Date ”) that is ten (10) business days thereafter, LFCM Holdings shall have the right to participate with Lazard Group in seeking such Underwriting and Distribution Opportunity with Lazard Group by having the LFCM Representative deliver notice (the “ LFCM Acceptance Notice ”) to the Lazard Group Representative of such decision, subject in each case to applicable law, the applicable client’s consent and any then-existing contractual or fiduciary obligations of any Lazard Group Company. Lazard Group shall not, and shall cause the Lazard Group Companies not to, refer any Underwriting and Distribution Opportunity to any person other than an LFCM Company unless (i) otherwise requested by the applicable client or required by any then-existing contractual obligation or fiduciary obligation, (ii) LFCM Holdings shall not accept the offer set forth in the Lazard Referral Notice or (iii) the LFCM Representative shall fail

 

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to deliver an LFCM Acceptance Notice to the Lazard Group Representative on or prior to the Lazard Referral Expiration Date. For purposes of clarity, nothing in this Agreement shall require any LFCM Company to accept, effect or participate in any underwriting or public distribution of equity, debt or convertible securities in respect of any Underwriting and Distribution Opportunity.

 

(b) Assistance . If the applicable client agrees to engage any LFCM Company in any Underwriting and Distribution Opportunity referred to it by Lazard Group pursuant to Section 2.2(a) (each, a “ Lazard Referred Opportunity ”), upon request of such LFCM Company, Lazard Group shall, or shall cause the appropriate Lazard Group Company, to provide commercially reasonable assistance with respect to due diligence and other customary corporate finance activities, consistent with past practice, to such LFCM Company in connection with such Lazard Referred Opportunity; provided , however , that no Lazard Group Company shall be obligated to provide financing or to lend any funds to any LFCM Company, or guarantee any obligations or otherwise place any of its capital at risk, in connection therewith or take such actions that in its view could reasonably be expected to result in an adverse regulatory or other risk to such Lazard Group Company or violate any applicable law.

 

(c) Lazard Referral Fee; Expense Reimbursement . In consideration of the referrals described in Section 2.2(a) and any assistance described in Section 2.2(b), LFCM Holdings shall (i) pay to Lazard Group a fee (the “ Lazard Referral Fee ”) equal to 50% of the aggregate Revenue paid by the applicable client in respect of any Lazard Referred Opportunity for which any LFCM Company is engaged; and (ii) reimburse Lazard Group for all unreimbursed out-of-pocket costs and expenses (including reasonable attorneys’ fees) reasonably incurred by any Lazard Group Company in connection with the activities described in Sections 2.2(a) and 2.2(b) (the “ Unreimbursed Lazard Referral Expenses ”). As a condition to entering into this Agreement and the License Agreement, LFCM Holdings shall pay to Lazard Group a fee (the “ Consideration Fee ”) equal to 20% of the aggregate Revenue paid by the applicable client in respect of any Underwriting and Distribution Opportunity (other than any Lazard Referred Opportunity) for which any LFCM Company is engaged during the Alliance Term.

 

(d) Payment. LFCM Holdings shall pay to Lazard Group the Lazard Referral Fee, Unreimbursed Lazard Referral Expenses and Consideration Fee by wire transfer of immediately available funds in United States dollars to an account specified by Lazard Group promptly (and in no event later than five (5) business days) after any LFCM Company is paid the Revenue by the applicable client in respect of the applicable Underwriting and Distribution Opportunity.

 

(e) Underwriting Committee . The Parties agree to establish an underwriting committee (the “ Underwriting Committee ”), which shall be comprised of an even number of members and have at least four (4) members. Half of the members of the Underwriting Committee shall be appointed by LFCM Holdings (the “ LFCM-Appointed Members ”), and the other half of the members of the Underwriting Committee shall be appointed by Lazard Group (the “ Lazard-Appointed Members ”). The initial members on the Underwriting Committee are listed in Exhibit B hereto. Each of LFCM Holdings and Lazard Group may at any time and for any reason or no reason replace or remove any member appointed by LFCM Holdings or Lazard Group, respectively. Notwithstanding anything to the contrary set forth in Section 2.2(a), (b), (c) or (d), no LFCM Company shall have the right to undertake or engage or participate in any underwrit-

 

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ing or distribution of equity, debt or convertible securities without the prior approval of the Underwriting Committee. The Underwriting Committee shall act by majority vote of those present at a meeting where there is a quorum. In order for there to be a quorum at a meeting of the Underwriting Committee, there must be present at least three members of the Underwriting Committee, at least one of whom must be an LFCM-Appointed Member and at least one of whom must be a Lazard-Appointed Member. At any meeting of the Underwriting Committee, the number of votes cast by the LFCM-Appointed Members must always equal the number of votes cast by the Lazard-Appointed Members, even if there is an unequal number of LFCM-Appointed Members and Lazard-Appointed Members present at such meeting. The Chairman of the Board of LFCM Holdings shall be entitled to attend any meeting of the Underwriting Committee, but shall not vote and shall not be designated as either an LFCM-Appointed Member or a Lazard-Appointed Member.

 

(f) Release . LFCM Holdings hereby releases, on behalf of itself and each LFCM Company, each Lazard Group Company and each of its Subsidiaries or Affiliates or any of its, its Subsidiary’s or its Affiliate’s, employees, agents, members, managers, officers and directors (together, the “ Lazard Indemnitees ”) from and against any and all claims, demands, complaints, liabilities, losses, damages, costs and expenses (collectively, “ Damages ”) arising from, relating to or in connection with the provision of any assistance by any Lazard Group Company pursuant to Section 2.2(b), except to the extent that such Damages were caused by acts or omissions of such Lazard Indemnitee, which acts or omissions are finally determined by a court of competent jurisdiction to be the result of the gross negligence or willful misconduct of such Lazard Indemnitee, in which case, such Lazard Indemnitee shall not be entitled to the benefits of this Section 2.2(f) to the extent that such Damages were caused by such gross negligence or willful misconduct.

 

(g) Indemnity . LFCM Holdings hereby agrees to indemnify, defend and hold harmless the Lazard Indemnitees from and against any and all Damages arising from, relating to or in connection with any demand, claim, proceeding or complaint by a third party (each, a “ Third-Party Claim ”) in respect of any Underwriting or Distribution Opportunity for which any LFCM Company is engaged (including any Lazard Referred Opportunity), except to the extent that such Damages were caused by acts or omissions of such Lazard Indemnitee, which acts or omissions are finally determined by a court of competent jurisdiction to be the result of the gross negligence or willful misconduct of such Lazard Indemnitee, in which case, such Lazard Indemnitee shall not be entitled to the benefits of this Section 2.2(g) to the extent that such Damages were caused by such gross negligence or willful misconduct. Lazard Group hereby agrees to indemnify, defend and hold harmless each LFCM Company and each of its Subsidiary’s or its Affiliate’s, employees, agents, members, managers, officers and directors (together, the “ LFCM Indemnitees ”) from and against any and all Damages to the extent arising from, relating to or in connection with any Lazard Group Company’s gross negligence or willful misconduct in respect of the assistance it provides pursuant to Section 2.2(b), except to the extent that such Damages were caused by acts or omissions of any LFCM Indemnitee, which acts or omissions are finally determined by a court of competent jurisdiction to be the result of the gross negligence or willful misconduct of such Lazard Indemnitee, in which case, such Lazard Indemnitee shall not be entitled to the benefits of this Section 2.2(g) to the extent that such Damages were caused by such gross negligence or willful misconduct.

 

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Section 2.3 LFCM Holdings Referral Agreement .

 

(a) LFCM Referrals . If LFCM Holdings or any LFCM Company becomes aware of any Financial Advisory or Asset Management Opportunity through the North American Merchant Banking Business or the European Merchant Banking Business, the LFCM Representative shall deliver notice (a “ LFCM Referral Notice ”) to the Lazard Group Representative informing Lazard Group of such Financial Advisory or Asset Management Opportunity and offering to refer such Financial Advisory or Asset Management Opportunity to Lazard Group, subject in each case to applicable law, the applicable client’s consent and any then-existing contractual or fiduciary obligations of any LFCM Company. During the period beginning on the date of receipt by the Lazard Group Representative of the LFCM Referral Notice and expiring on the date (the “ LFCM Referral Expiration Date ”) that is ten (10) business days thereafter, Lazard Group shall have the right to accept such Financial Advisory or Asset Management Opportunity by having the Lazard Group Representative deliver notice (the “ Lazard Acceptance Notice ”) to the LFCM Representative of such decision, subject in each case to applicable law, the applicable client’s consent and any then-existing contractual or fiduciary obligations of any LFCM Company. LFCM Holdings shall not, and shall cause the LFCM Companies not to, refer any Financial Advisory or Asset Management Opportunity to any person other than a Lazard Group Company unless (i) otherwise requested by the applicable client or required by any then-existing contractual obligation or fiduciary obligation, (ii) Lazard Group shall not accept the offer set forth in the LFCM Referral Notice or (iii) the Lazard Group Representative shall fail to deliver a Lazard Acceptance Notice to the LFCM Representative on or prior to the LFCM Referral Expiration Date. For purposes of clarity, nothing in this Agreement shall require any Lazard Group Company to accept, effect or participate in any Financial Advisory or Asset Management Opportunity.

 

(b) LFCM Referral Fee . In consideration of the referrals described in Section 2.3(a), Lazard Group shall pay to LFCM Holdings a customary finders’ fee as Lazard Group and LFCM Holdings shall mutually agree for each Financial Advisory or Asset Management Opportunity referred by an LFCM Company for which any Lazard Group Company is engaged.

 

Section 2.4 Brokerage Accounts and Transactions . As long as Lazard Capital Markets LLC (“ LCM ”) shall be a Controlled Subsidiary of LFCM Holdings, Lazard Group agrees to use its commercially reasonable efforts to cause: (i) Lazard Frères & Co. LLC (“ LF&Co ”) and its Subsidiaries to maintain their proprietary and employee accounts at LCM on the same terms and conditions in effect as of the date hereof with respect to the Capital Markets Business (and LFCM Holdings shall cause LCM to maintain such proprietary and employee accounts at LCM on such terms and conditions); (ii) Lazard Asset Management Securities LLC (“ LAM Securities ”) to enter into and maintain a clearing agreement with LCM, on terms mutually agreeable to the parties thereto, pursuant to which LAM Securities will introduce customer accounts and transactions to LCM; and (iii) Lazard Asset Management LLC (“ LAM ”) to refer customer accounts and transactions to LCM in accordance with applicable law, rules and regulation and customer agreements. LCM shall not be obligated to accept any account or transaction referred by LF&Co, LAM or LAM Securities, and Lazard Group shall not be obligated to comply with this Section 2.4, if prohibited by applicable law, rule or regulation. Upon the request of Lazard Group, LFCM Holdings shall cause LCM to provide all information relating to any proprietary and employee account of LF&Co and its Subsidiaries at LCM described in clause (i) of this Section 2.4 if, in the opinion of Lazard Group, such information is necessary to comply with

 

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applicable law or regulation. The allocation of fees and costs for such services shall be set forth on Schedule 2.4 .

 

Section 2.5 Alliance Term . Unless earlier terminated by either Party as permitted under the provisions of this Agreement, the obligations set forth in this Article II shall commence on the date hereof and shall continue for five (5) years thereafter (the “ Alliance Term ”); provided , however , that the Alliance Term shall automatically renew for successive one-year terms unless either party elects otherwise by providing the other party with prior written notice delivered no later than 150 days prior to the end of such term and no earlier than 210 days prior to the end of such term.

 

Section 2.6 Termination of Alliance .

 

(a) The Alliance Term may be terminated for cause by either Party if the other Party is in breach of any of its material obligations under this Article II and fails to remedy such breach within thirty (30) days of receipt by the other Party of a written notice from the non-breaching Party that specifies the material breach.

 

(b) In addition, either Party may terminate the Alliance Term, which termination shall occur immediately after written notice of such termination is delivered to the other Party, if:

 

(i) the non-terminating Party or any significant Subsidiary of such Party shall make an assignment for the benefit of creditors;

 

(ii) the non-terminating Party or any significant Subsidiary of such Party shall petition or apply to any tribunal for the appointment of a trustee or receiver of it, or of any substantial part of its assets, or commence any proceeding relating to it under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction whether now or hereafter in effect;

 

(iii) any bankruptcy, insolvency, receivership or similar petition or application is filed, or any proceedings are commenced against the non-terminating Party or any significant Subsidiary of such Party and the non-terminating Party or any significant Subsidiary of such Party by any act indicates its approval thereof, consent thereto, or acquiescence therein, or any order is entered appointing a trustee or receiver, adjudicating the non-terminating Party bankrupt or insolvent, or approving the petition in any such proceedings and such order remains unstayed or undischarged for more than sixty (60) days; or

 

(iv) any order is entered in any proceedings against the non-terminating Party or any significant Subsidiary of such Party decreeing the dissolution of the non-terminating Party or such significant Subsidiary and such order remains unstayed or undischarged for more than sixty (60) days.

 

(c) Either Party may terminate the Alliance Term, upon written notice delivered within 90 days of the occurrence of a Change of Control of either Party. Such written notice shall specify the time and date of such termination (or, if not specified, such termination

 

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shall be effective 10 days after the delivery of such notice). The Party undergoing the Change of Control shall use its reasonable best efforts to notify the other Party of such event at the earliest time that it is legally permitted and practically able to do so.

 

Section 2.7 Effect of Termination of Alliance Term . Upon any expiration or earlier termination of the Alliance Term and the obligations of the Parties under this Article II, the rights and obligations of the Parties under Article II shall terminate, except for the rights and obligations under Sections 2.2(c), 2.2(d), 2.2(f) and 2.2(g) and any claims or causes of actions of the Parties with respect to material breaches of this Article II prior to the effective time of such termination, which shall survive such termination.

 

ARTICLE III

 

OPTIONS TO PURCHASE

 

Section 3.1 Option to Purchase LAI North America . Lazard Group shall have the right and o