<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO SECTION 12(B) OR
12(G) OF THE SECURITIES EXCHANGE ACT OF 1934
NEW ENGLAND INVESTMENT COMPANIES, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3405992
(STATE OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
399 BOYLSTON STREET, BOSTON, 02116
MASSACHUSETTS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
----------------
If this form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), please check the following box. [X]
If this form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box. [_]
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
------------------- ------------------------------
<S> <C>
LP Units representing New York Stock Exchange
limited partner interests
</TABLE>
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
N/A
(TITLE OF CLASS)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Page 1 of 11 Pages
<PAGE>
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The Form 8-A description of the Registrant's securities listed on the New
York Stock Exchange and registered under Section 12(b) of the Securities
Exchange Act of 1934, as amended, is hereby amended and restated as of
December 29, 1997, pursuant to Rule 12b-15 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), in connection with the amendment and
restatement of the agreement of limited partnership of the Registrant.
DESCRIPTION OF LP UNITS
As of December 28, 1997, there were outstanding 44,313,953 units
representing a limited partner's interest ("LP Units") representing an
aggregate 99.8% interest in New England Investment Companies, L.P. ("NEIC" or
the "Partnership"). The LP Units and the 110,000 units representing a general
partner's interest ("GP Units") outstanding (representing the other 0.2%
interest in the Partnership) in general participate pro rata in the
Partnership's income, gain, losses, deductions, credits and distributions,
except with respect to certain expenses associated with the Partnership's
Restricted Unit Plan (the "RUP"), special allocations required under
Section 704(c) of the Internal Revenue Code of 1986, as amended (the "Code"),
and certain other items. The GP Units and the LP Units are collectively
referred to herein as the "Units."
New England Investment Companies, Inc, the general partner of the
Partnership ("NEIC, Inc." or the "General Partner"), has the authority to
issue additional LP Units or other securities of the Partnership. See
"Description of the Partnership Agreement" for an additional description of
the rights of Unitholders. Issuance of such additional securities may dilute
the interest of a holder of LP Units in the Partnership.
In the event of a liquidation, dissolution and winding up of the
Partnership, the Units will be entitled to receive pro rata, to the extent of
positive balances in their respective capital accounts, any assets remaining
after satisfaction of Partnership liabilities and establishment of necessary
reserves. See "Description of the Partnership Agreement--Dissolution and
Liquidation."
LP Units are evidenced by certificates (the "LP Certificates"). LP Units are
freely transferable by assignment of LP Certificates except as restricted by
federal or state securities laws. The Partnership will be entitled to treat
the record holder as the owner for all purposes. See "Description of the
Partnership Agreement--Transfer of LP Units."
No partner is entitled to preemptive rights in respect of issuances of
securities by the Partnership. The transfer agent and registrar for the LP
Units is The Bank of New York.
DESCRIPTION OF THE PARTNERSHIP AGREEMENT
The following paragraphs summarize certain provisions of the Second Amended
and Restated Partnership Agreement of NEIC dated as of December 29, 1997 (the
"Partnership Agreement") ("PA" for purposes of section references). The
following discussion is qualified in its entirety by reference to the
Partnership Agreement filed as an exhibit hereto. Wherever particular sections
of, or terms defined in, the Partnership Agreement are referred to, such
sections or defined terms are incorporated herein by reference. Capitalized
terms not otherwise defined herein are as defined in the Partnership
Agreement.
ORGANIZATION AND DURATION
The Partnership was organized as a Delaware limited partnership in 1987. New
England Investment Companies, Inc., a subsidiary of Metropolitan Life
Insurance Company since August 1996, assumed the position of General Partner
on September 15, 1993. The General Partner is the sole general partner of the
Partnership, and holds all of the GP Units thereof. Under certain conditions,
the General Partner may exchange its GP Units for LP Units, and vice versa.
(PA Section 4.2).
Page 2 of 11 Pages
<PAGE>
The Partnership will continue in existence until its termination pursuant to
the Partnership Agreement. (PA Section 2.5). See "Description of the
Partnership Agreement--Dissolution and Liquidation."
PURPOSE, BUSINESS AND MANAGEMENT
The Partnership Agreement provides that the purpose of the Partnership is to
engage in any lawful activity for which limited partnerships may be organized
under the Delaware Revised Uniform Limited Partnership Act (the "Delaware
Act"). (PA Section 3.1). The General Partner currently intends that the
business of the Partnership will be to serve as the Advising General Partner
of NEIC Operating Partnership, L.P. ("NEICOP").
The General Partner is generally authorized to do all things it deems
appropriate or necessary in the conduct of the business and affairs of the
Partnership. (PA Section 7.1). In particular, the General Partner may issue
additional LP Units or other securities of the Partnership, including issuing
LP Units in exchange for units representing a limited partner's interest in
NEICOP pursuant to exchanges under the Intercompany Agreement between NEIC and
NEICOP dated as of December 29, 1997 (the "Intercompany Agreement"), subject
to substantial contractual, securities law, federal income tax, and other
restrictions. (PA Section 4.3). The authority of the General Partner is
limited, however, in certain respects. See "Description of the Partnership
Agreement--Amendment of Partnership Agreement," "Description of the
Partnership Agreement--Restrictive Covenants" and "Description of the
Partnership Agreement--Dissolution and Liquidation." No Limited Partner, in
its capacity as a Limited Partner, may take part in the operation, management
or control of the Partnership. (PA Section 8.2).
The General Partner is reimbursed by the Partnership for all of its costs
and expenses which are directly or indirectly related to the formation,
capitalization, business or activities of the Partnership or any Operating
Partnership. (PA Section 7.4(b)). Whenever the Partnership Agreement provides
that the General Partner (or any of its Affiliates) is required to make a
decision in its "discretion," the General Partner (or such Affiliate) may
consider only such factors as it desires and has no duty to consider any
interest of the Partnership or the Limited Partners. Whenever the Partnership
Agreement provides that the General Partner (or any of its Affiliates) is
required to make a decision in its "good faith" or under another express
standard, the General Partner (or such Affiliate) is subject to such express
standard and is not subject to any other standard imposed by the Partnership
Agreement, any other agreement contemplated thereby, or applicable law. (PA
Section 7.9(b)).
REMOVAL OF GENERAL PARTNER AND TRANSFER OF GP UNITS
The General Partner has agreed not to withdraw as general partner and to
continue to act as general partner of the Partnership until termination of the
Partnership pursuant to the Partnership Agreement, subject to the liquidation
and dissolution of the Partnership and subject to its rights to transfer all
of its GP Units as described below. (PA Section 13.1(a)).
Subject to receipt of any necessary regulatory approvals, the General
Partner may be removed by the holders of an aggregate of at least 80% of the
outstanding Units entitled to vote, voting together as a class (an "Eighty
Percent Interest") or, if the General Partner and its Affiliates' total
interest is less than 33 1/3% of the outstanding Units, the General Partner
may be removed by the holders of an aggregate of at least a majority of the
outstanding Units entitled to vote, voting together as a class (a "Majority
Interest"). In either case, the General Partner may be removed only if (i) in
the event that the General Partner or one of its Affiliates is the Managing
General Partner of NEICOP, the General Partner or such Affiliate has been (or
is simultaneously) involuntarily removed as the managing general partner of
NEICOP by the partners of NEICOP, (ii) a successor general partner is approved
by a Majority Interest, and (iii) the Partnership has received an opinion of
counsel that such action will not result in the loss of limited liability of a
holder of LP Units or cause the Partnership or any Operating Partnership to be
treated as an association taxable as a corporation for federal income tax
purposes. (PA Section 13.1(b)).
A successor general partner is required to purchase the GP Units of the
former General Partner. All such purchases will be in cash (or in such other
form of consideration acceptable to the former General Partner) for an amount
equal to the fair market value of the interests purchased as of the date the
successor General Partner
Page 3 of 11 Pages
<PAGE>
is admitted to the Partnership. Such value shall be determined by agreement
between the former General Partner and the successor. If no agreement is
reached within 30 days after the successor General Partner is admitted, such
value shall be determined by a firm of independent appraisers jointly selected
by the General Partner and its successor. (PA Section 13.2).
The General Partner may transfer its GP Units upon the satisfaction of three
conditions. First, all the General Partner's GP Units must be transferred and
the transferee must assume all the rights and obligations of the General
Partner under the Partnership Agreement. Second, the transfer must be to an
Affiliate of the General Partner or in connection with the General Partner's
merger or consolidation with or a transfer of all or substantially all of the
General Partner's assets to another person and such transfer is approved by
holders of an aggregate of more than 50% of the Units, other than Units held
by the General Partner, any proposed purchaser, or their Affiliates. Third,
the Partnership must receive an opinion of counsel that such transfer would
not result in the loss of limited liability of any holder of LP Units or cause
the Partnership or any Operating Partnership to be treated as an association
taxable as a corporation for federal income tax purposes. Upon satisfaction of
all such conditions, the transferee will automatically be admitted to the
Partnership as the successor general partner and the transfer will not be
deemed to be a withdrawal. The General Partner may exchange its GP Units for
LP Units (or its LP Units for GP Units) without complying with these
restrictions. (PA Section 4.2). The General Partner has the same rights with
respect to the transfer of LP Units as other Unitholders. (PA Sections 11.1
and 11.2).
ALLOCATION OF PROFITS AND LOSSES; PARTNERSHIP DISTRIBUTIONS
The Partnership Agreement provides that in determining the rights of the
Unitholders for financial accounting and federal income tax purposes, items of
income, gain, loss, deduction and credit will generally be allocated to the
partners in accordance with their respective Percentage Interests (except for
the allocation of certain expenses associated with NEIC's RUP, special
allocations required under Code Section 704(c), and certain other items). (PA
Section 5.1(c)(i)).
The Partnership Agreement provides that distributions will be made at the
sole discretion of the General Partner. All distributions will be made to
Unitholders pro rata in accordance with their respective Percentage Interests.
(PA Section 5.2).
For a description of the rights of Unitholders upon liquidation of the
Partnership, see "Description of the Partnership Agreement--Dissolution and
Liquidation."
No Unitholder is entitled to preemptive rights with respect to the issuance
or sale of LP Units or other securities by the Partnership. (PA Section 4.4).
No Unitholder is required to make additional capital contributions to the
Partnership pursuant to the terms of the Partnership Agreement. No Unitholder
is entitled to the withdrawal or return of its capital contribution to the
Partnership. (PA Section 8.4).
POWER OF ATTORNEY
Each LP Unitholder, upon becoming a limited partner, grants to the General
Partner an irrevocable power of attorney to execute and file certain documents
in connection with the formation, qualification, continuance or dissolution of
the Partnership, and certain other matters, and makes the consents and waivers
contained in the Partnership Agreement. The power of attorney also conveys
such authority as the General Partner may need to effect a Restructuring,
including a Restructuring that results in benefits to one or more partners
(including the General Partner and its affiliates) that are not enjoyed by all
partners, and in disadvantageous consequences to one or more partners that are
not suffered by all partners (including the General Partner and its
affiliates). (PA Sections 2.4 and 12.4).
TRANSFER OF THE LP UNITS
The LP Units are generally freely transferable, except as restricted by
federal or state securities law. The Partnership Agreement provides that the
record holder of any LP Unit, as shown in the Partnership's Units Register,
will be treated as the owner for all purposes. (PA Section 10.4). A transfer
of an LP Unit will not be
Page 4 of 11 Pages
<PAGE>
registered by the transfer agent or recognized by the Partnership unless three
conditions are fulfilled. First, the transferor must execute the form of
assignment on the back of the LP Certificate, or a written instrument of
assignment to the same effect in form satisfactory to the transfer agent or
the General Partner. Second, the transferee must execute the acceptance on the
back of the LP Certificate, or a written instrument of assignment to the same
effect in form satisfactory to the transfer agent or the General Partner,
pursuant to which the transferee agrees to become a party to and be bound by
the Partnership Agreement (including the powers of attorney therein and the
General Partner's authority to effect a Restructuring). Third, the LP
Certificate and such assignment and acceptance must be delivered to the
transfer agent. Upon delivery of these documents to the transfer agent, the
transfer will be registered on the Units Register and the transferee will
become a substituted limited partner. Prior to such delivery, a transferee
will not have any rights as a limited partner, including rights to
distributions or to allocation of Partnership income, gain, loss, deduction or
credit. (PA Sections 10.2, 10.4, and 12.2).
AMENDMENT OF PARTNERSHIP AGREEMENT
Amendments to the Partnership Agreement may be proposed only by the General
Partner. (PA Section 15.2).
The General Partner may amend the Partnership Agreement without the consent
of the holders of LP Units to effect a broad range of changes to the
Partnership, including, among other matters, changes in the name or principal
place of business, changes designed to promote compliance with or continued
avoidance of various laws (including changes designed to ensure that the
Partnership is not treated as a corporation for federal income tax purposes),
changes in connection with a Restructuring (see "Description of the
Partnership Agreement--Restructuring Authority"), changes to allow any and all
of the Partnership's activities to be carried on by one or more Operating
Partnerships, and other changes that in the good faith opinion of the General
Partner do not adversely affect the Limited Partners in any material respect.
(PA Section 15.1).
Certain other amendments to the Partnership Agreement require the approval
of a Majority Interest, or an Eighty Percent Interest (if the amendment would
affect the economic equivalence of GP Units and LP Units), or a Majority of
Minority Interest (if the amendment affects the General Partner's authority to
perform a Restructuring). A Majority of Minority Interest means the holders of
an aggregate of more than 50% of the outstanding LP Units entitled to vote,
excluding those held by the General Partner or its Affiliates, voting together
as a class. The approval of the holders of an aggregate of at least 95% of GP
and LP Units voting together as a class (a "Ninety-Five Percent Interest") is
required for any amendment unless the Partnership has received an opinion of
counsel that such amendment would not result in the loss of limited liability
of any LP Unitholder or result in the Partnership or any Operating Partnership
being treated as an association taxable as a corporation for federal income
tax purposes. No provision of the Partnership Agreement which establishes a
percentage of the LP Units required to take or approve any action may be
amended to reduce such voting requirement unless such amendment is approved by
holders of LP Units holding such percentage of LP Units. (PA Sections 15.2 and
15.3).
RESTRICTIVE COVENANTS
The Partnership Agreement provides that the General Partner will not cause
the Partnership to issue LP Units to the General Partner or any of its
Affiliates (except in connection with forfeiture upon failure to meet vesting
requirements or other conditions under the Partnership's RUP) unless (a) the
LP Units are of a class, or not materially different in their voting,
distribution and liquidation rights from Units of a class, which is, prior to
such issuance, listed or admitted to trading on a National Securities Exchange
or quoted by NASDAQ and the Net Agreed Value of the Contributed Property being
contributed in exchange for such LP Units is at least equal to the number of
LP Units being so issued times the Unit Price of such LP Units; (b) such
issuance is approved by a Majority of Minority Interest; or (c) the LP Units
are issued pursuant to the Intercompany Agreement in exchange for units
representing a partner's interest in NEICOP. For this purpose, the exchange by
the General Partner of its GP Units for LP Units pursuant to Section 4.2 of
the Partnership Agreement will not be treated as an issuance of LP Units. (PA
Section 17.1).
Page 5 of 11 Pages
<PAGE>
The General Partner has agreed in the Partnership Agreement not to permit,
without the approval of a Majority Interest, the sale or other disposition of
all or substantially all of the consolidated assets owned by the Partnership
and any Operating Partnership. (PA Section 17.2).
MEETINGS; VOTING
Unitholders of record on the record date set pursuant to the Partnership
Agreement will be entitled to notice of, and to vote in person or by proxy at,
Unitholder meetings and to act with respect to matters as to which written
consents may be solicited. Any action that may be taken at a meeting of
Unitholders, or any class thereof, may be taken without a meeting by written
approvals of Unitholders holding Units at least equal to the number necessary
to authorize or take such action. Prompt notice of the taking of action
without a meeting shall be given to Unitholders who have not approved the
taking of the action in writing. (PA Sections 16.1 and 16.4).
The Partnership does not hold annual meetings, and the holders of LP Units
have no right to participate in the election of the directors of the General
Partner. Meetings of Unitholders may be called by the General Partner or by
Unitholders holding at least 20% of the LP Units. A Majority Interest will
constitute a quorum at such a meeting and, with certain exceptions, matters
submitted to Unitholders will be determined by the affirmative vote of a
Majority Interest. (PA Section 16.1). See "Description of the Partnership
Agreement--Removal of General Partner and Transfer of GP Units," "Description
of the Partnership Agreement--Amendment of Partnership Agreement,"
"Description of the Partnership Agreement--Restrictive Covenants" and
"Description of the Partnership Agreement--Dissolution and Liquidation." See
also "Description of the Partnership Agreement--Limitation on Certain Voting
Rights."
In the Intercompany Agreement, NEIC and NEICOP agree that the units
representing a partner's interest in NEICOP ("NEICOP Units") held by NEIC will
be "looked through" for the purposes of any vote of the unitholders of NEICOP.
Whenever NEICOP solicits the votes of its unitholders on an issue, NEIC agrees
to submit the same issue to its unitholders, and to vote its NEICOP Units for,
against, withhold its vote, or abstain from voting, in the same proportions as
are the units for which voting instructions are solicited by NEIC. NEIC also
agrees to exercise its right to call for a meeting of the partners of NEICOP
when it receives requests to do so from holders of LP Units representing
(based on the NEICOP Exchange Ratio (as defined in the Amended and Restated
Agreement of Limited Partnership of NEICOP, dated as of December 29, 1997 (the
"NEICOP Partnership Agreement")) a number of NEICOP Units held by NEIC that is
sufficient to call a meeting under the NEICOP Partnership Agreement.
LIMITATION ON CERTAIN VOTING RIGHTS
To prevent any deemed assignment of the investment advisory contracts of
NEIC, NEICOP and the investment management firms through which NEICOP operates
(the "Investment Management Firms"), the Partnership Agreement includes
provisions limiting the voting power of LP Units with respect to those matters
on which the Unitholders have the right to vote. Under the Investment Advisers
Act of 1940, as amended (the "Advisers Act"), investment management agreements
held by an investment advisor registered under that statute may not be
assigned without the client's consent. Similarly, under the Investment Company
Act of 1940, as amended (the "Investment Company Act"), investment management
agreements between an advisor and its mutual fund clients terminate
automatically upon assignment. Under both statutes, the term "assignment"
includes direct assignment as well as assignments which may be deemed to
occur, under certain circumstances, upon the transfer, directly or indirectly,
of control of the advisor. The Investment Company Act presumes that any person
holding 25% of the voting securities of any person "controls" such person.
NEIC, NEICOP and the Investment Management Firms are currently subject to
the foregoing provisions. Transfers of Units, including future sales of LP
Units by Reich & Tang, Inc. ("RTI"), Metropolitan Life Insurance Company
("MetLife") and their affiliates may raise a question as to continuing control
of the Partnership by MetLife and its affiliates. To lessen this concern, the
Partnership Agreement provides that a Person or Group (which includes
Affiliates and Associates of a Person, as defined in the Partnership
Agreement)
Page 6 of 11 Pages
<PAGE>
that owns (as defined in the Partnership Agreement) more than 20% of the
combined voting power of the outstanding Voting Units shall have the right to
vote not more than 20% of the outstanding Voting Units entitled to vote on an
issue, and the remaining Voting Units owned by such Person or Group
("Excludable Units") shall not have voting rights and shall not be counted for
quorum or Unitholder approval purposes. Excludable Units shall be allocated
among persons who are members of a Group in accordance with such Person's pro
rata share within such Group of the total number of Excludable Units owned by
such Group. These provisions do not apply to MetLife, certain subsidiaries of
MetLife, certain savings, profit sharing, unit or stock bonus and employee
unit or stock ownership plans established by the Partnership or certain
subsidiaries of the Partnership and other Persons or Groups approved by the
General Partner. (PA Section 15.4).
The foregoing limitation is intended to have the effect of decreasing the
chance of an assignment under the Advisers Act and the Investment Company Act,
which could occur in connection with future issuances of LP Units by the
Partnership, sales of LP Units by MetLife or its affiliates, or open market
trading of LP Units. However, no assurances can be given that such an
"assignment" will not occur under these or other circumstances. Because
MetLife controls the General Partner, it is possible that a change in control
and assignment may occur at the levels of the Partnership and its investment
advisory affiliates as a result of a change in control of MetLife upon a
financing, combination, joint venture, acquisition or other transaction
involving MetLife. Under these circumstances, the limitation on voting rights
at the level of the Partnership would be of no effect in preventing an
assignment.
The limitation on voting may have the effect of making more difficult or of
discouraging, absent the support of MetLife, a proxy contest, a merger or
other combination involving the Partnership, a tender offer, an open-market
purchase program or other purchase of LP Units that could give Unitholders an
opportunity to realize a premium over the then-prevailing market price for
their LP Units. However, because MetLife controls the General Partner, and the
General Partner already exercises significant authority over the affairs of
the Partnership as a limited partnership (see "Description of the Partnership
Agreement--Purpose, Business and Management"), this effect is not considered
significant.
The NEICOP Partnership Agreement contains a similar voting restriction. For
the purposes of applying this voting restriction, the NEICOP Partnership
Agreement provides that persons are deemed to own both (1) the NEICOP Units
that they own, and (2) an additional number of NEICOP Units equal to the
product of (i) the percentage of the number of Units outstanding that they
own, and (ii) the number of NEICOP Units owned by NEIC. This provision ensures
that the voting restriction is applied to the combined voting power of each
person or group in the affairs of NEICOP, including such person's direct
ownership of NEICOP Units and such person's voting rights pursuant to the
look-through voting provision described under "Description of the Partnership
Agreement--Limitation on Certain Voting Rights."
INDEMNIFICATION
The Partnership Agreement provides that certain persons (each, an
"Indemnitee") will not be liable to the Partnership or to any partner for any
action taken or omitted to be taken if the Indemnitee acted in good faith and
such action or omission does not involve gross negligence or willful
misconduct. In addition, the Partnership Agreement provides that the
Partnership will indemnify an Indemnitee against any expenses (including legal
fees and expenses), judgments, fines and amounts paid in settlement actually
and reasonably incurred by such Indemnitee in connection with any threatened,
pending or completed claim, demand, action, suit or proceeding to which the
Indemnitee is or was an actual or threatened party and which relates to the
Partnership Agreement or the property, business, affairs or management of the
Partnership. This indemnity is available only if the Indemnitee acted in good
faith and if the act or omission which is the basis of the claim, demand,
action, suit or other proceeding does not involve the gross negligence or
willful misconduct of such Indemnitee. Indemnitees include the General
Partner, any affiliate of the General Partner (excluding any Operating
Partnerships other than NEICOP), any person who is or was a director, officer,
employee or agent of the General Partner or any such affiliate or the
Partnership, or any person who is or was serving at the request of the General
Partner or any such affiliate as a director, officer, partner, trustee,
employee or agent of another person. In the sole discretion of the
Page 7 of 11 Pages
<PAGE>
General Partner, the Partnership may, but shall not be required to, treat any
Operating Partnership, any Affiliate of any Operating Partnership, or any
person who is or was a director, officer, employee or agent of any Operating
Partnership or Affiliate thereof as an Indemnitee with respect to any claim,
demand, action, suit or other proceeding. Expenses subject to indemnity will
be paid by the Partnership to the Indemnitee in advance, subject to receipt of
an undertaking by or on behalf of the Indemnitee to repay such amount if it is
ultimately determined that the Indemnitee is not entitled to indemnification.
An Indemnitee shall not be denied indemnification in whole or in part because
the Indemnitee had an interest in a transaction if the transaction was
otherwise permitted by the terms of the Partnership Agreement. (PA Section
7.11).
LIMITED LIABILITY
The liability of an LP Unitholder who does not take part in the control of
the business of the Partnership and who acts in conformity with the provisions
of the Partnership Agreement will generally be limited under Delaware law to
the amount of such LP Unitholder's capital contribution to the Partnership in
respect of such Unitholder's LP Units plus such Unitholder's share of the
Partnership's assets and undistributed profits. Under certain circumstances,
holders of LP Units may also be liable under Delaware law to return to the
Partnership distributions from the Partnership to the extent that at the time
of the distribution after giving effect thereto, all liabilities of the
Partnership, other than liabilities to Unitholders on account of their
interest in the Partnership, exceed the fair value of the Partnership's
assets. Any such liability is not released by the sale of LP Units. Although
the Partnership may conduct some level of direct or indirect operations in
several U.S. jurisdictions other than Delaware, it is believed, but cannot be
determined with certainty, that the limited liability of the holders of LP
Units will be determined by reference to Delaware law.
BOOKS AND REPORTS
The General Partner will keep books and records with respect to the
Partnership's business at the principal office of the Partnership. The books
of the Partnership will be maintained on an accrual basis, or on a cash basis
adjusted periodically to an accrual basis, in accordance with generally
accepted accounting principles and applicable law. (PA Section 9.1). The
fiscal year of the Partnership is the calendar year. (PA Section 9.2). Each LP
Unitholder will have the right, for a proper purpose reasonably related to the
Unitholder's interest in the Partnership and at the Unitholder's own expense,
to obtain true and full information regarding the Partnership, its income tax
returns, the Units Register, a description and statement of the net agreed
value of any capital contribution made or agreed to be made by each partner,
copies of the Partnership Agreement and Certificate of Limited Partnership,
and any other information regarding the affairs of the Partnership as may be
just and reasonable. The General Partner may keep confidential from the
Unitholders any information which it reasonably believes to be in the nature
of trade secrets or the disclosure of which the General Partner in good faith
believes could damage the Partnership or its business or be in violation of
applicable law, or which is subject to a confidentiality agreement with third
parties. (PA Section 8.5).
As soon as practicable, but in no event later than 120 days after the close
of each fiscal year, the General Partner will cause to be prepared as of the
last day of the fiscal year and promptly mailed to each record holder of LP
Units reports audited by a nationally recognized firm of independent public
accountants, containing financial statements of the Partnership for the fiscal
year, including a balance sheet, statement of income, statement of Partner's
capital and statement of cash flows. Quarterly reports for each of the first
three fiscal quarters containing such financial and other information as the
General Partner deems appropriate will be prepared no later than 45 days after
the close of each such quarter and mailed promptly thereafter to each record
holder of LP Units. (PA Section 9.3).
DISSOLUTION AND LIQUIDATION
The Partnership will continue in existence until terminated pursuant to the
Partnership Agreement. The Partnership can be dissolved upon: (a) the
bankruptcy or dissolution of the General Partner, (b) an election of the
General Partner to dissolve the Partnership pursuant to the General Partner's
ability to effect a Restructuring
Page 8 of 11 Pages
<PAGE>
(see "Description of the Partnership Agreement--Restructuring Authority") or
(c) an election of the General Partner to dissolve the Partnership which is
approved by a Majority Interest. Upon the dissolution of the Partnership,
unless the Partnership is reconstituted as hereinafter described, the General
Partner, or, if the General Partner has been removed, dissolved or become
bankrupt, a liquidator or liquidating committee selected by a Majority
Interest, shall be the liquidator of the Partnership (the "Liquidator"). The
Liquidator shall liquidate the assets of the Partnership and distribute the
proceeds first to the creditors of the Partnership (including creditors who
are partners) and then to the partners. Upon liquidation of the Partnership,
federal income tax laws require distributions to be made in proportion to and
to the extent of the positive balances in the Unitholder's capital accounts.
The Liquidator may defer for a reasonable time the liquidation of any assets
other than those necessary to satisfy liabilities of the Partnership, may set
aside a reserve of cash or other assets for contingent liabilities and may
distribute to the partners or classes of partners, in lieu of cash, undivided
interests in such Partnership assets as the Liquidator deems not suitable for
liquidation. (PA Sections 14.1, 14.3 and 14.4).
Upon the dissolution of the Partnership, a Majority Interest may elect to
reconstitute the Partnership, form a new partnership on terms identical to
those of the Partnership Agreement, and choose a new general partner. If such
an action is taken, all partners shall be bound by such action and shall be
deemed to have consented to such action. In order for the Partnership to be
reconstituted, the Partnership must have received an opinion of counsel that
the reconstitution would not result in the loss of limited liability of any
limited partner and neither the Partnership nor the reconstituted partnership
would be treated as an association taxable as a corporation for federal income
tax purposes. (PA Section 14.2).
RESTRUCTURING AUTHORITY
In connection with a material possibility of the occurrence of either a Loss
of Partnership Status or a Tax Realization Event, the Partnership Agreement
confers on the General Partner broad authority to effect a Restructuring of
the Partnership. (PA Section 12.4). A Loss of Partnership Status means an
event or condition (including without limitation the public trading of Units,
the ownership of Units by more than any particular number of persons, any
failure of the Partnership to pay or decision by the Partnership not to pay
the excise tax imposed by Code Section 7704(g)(3)(A), or any revocation by the
Partnership of the election provided in Code Section 7704(g)) as a result of
which the Partnership would cease to be treated as a partnership for federal
income tax purposes. A Tax Realization Event means an event or condition as a
result of which any Partner (or affiliate thereof) is reasonably likely to
realize income for federal income tax purposes with respect to all or any part
of the difference between the value of any property contributed by such
Partner to the Partnership on or after June 30, 1993, and such Partner's basis
in such contributed property for federal income tax purposes, other than as a
result of a sale of such property by the Partnership exclusively for cash. No
assurances can be given regarding the timing or form of any future
Restructuring, which may be affected by changes in the tax laws as well as
other factors beyond the control of the Partnership or the General Partner.
The General Partner is obligated, in determining the form of any future
Restructuring, to seek to accomplish the following objectives in the following
order of priority, it being understood that if the accomplishment of any of
the following objectives is, in the sole judgment of the General Partner,
incompatible or inconsistent with the achievement of an objective with a
higher priority, then the General Partner shall not be required to seek to
accomplish such objective having a lower priority: (i) to prevent MetLife, and
any other Partners that may have contributed appreciated property to the
Partnership, from recognizing taxable gain as a result of a Tax Realization
Event, (ii) to prevent the interest of MetLife and other non-Public Partners
from being subject, directly or indirectly, to corporate-level federal income
taxes, (iii) to preserve, to the extent reasonably practicable, a public
market for the Public Partners' interests in the Partnership (or successor or
affiliated entity) following a Loss of Partnership Status or Restructuring,
(iv) to preserve, to the extent the General Partner deems consistent with the
status of the Partnership (or a successor or affiliated entity) as a
partnership for federal income tax purposes, the ability of non-Public
Partners to dispose of all or part of their interests in the Partnership (or a
successor or affiliated entity that has publicly tradable interests) in the
public market, and (v) to allow, to the extent reasonably
Page 9 of 11 Pages
<PAGE>
practicable, Public Partners who do not desire continued immediate access to a
public market for their interests following a Loss of Partnership Status or
Restructuring to hold interests in an entity that is not subject to corporate-
level federal income taxes. (PA Section 12.4(b)).
The General Partner may seek to accomplish the foregoing objectives through
a variety of actions, including without limitation the transfer of business
assets of the Partnership to existing or new affiliated entities, the
mandatory exchange of LP Units for interests in such affiliated entities and,
as discussed above, the imposition of restrictions on the transferability of
interests in the Partnership or affiliates of the Partnership, provided that
no Restructuring may subject an LP Unitholder to liability to Partnership
creditors without such LP Unitholder's consent. There can be no assurance that
a Restructuring would in fact achieve any of the Restructuring objectives.
Accomplishment of certain of the Restructuring objectives, including those
with the highest priority, would possibly provide benefits to MetLife, the
General Partner and other non-Public Partners which would not be enjoyed by
Public Partners (e.g., the continuing ability to participate in an entity
treated as a partnership for federal income tax purposes). Under the
Partnership Agreement, the General Partner has the power to effect
Restructurings that have such disparate consequences, without any requirement
that the General Partner obtain the consent of any other Partner to such
Restructuring. In addition, the Partnership Agreement relieves the General
Partner and its affiliates from any fiduciary or other duties to the
Partnership or any other Partner for any actions taken or omitted by the
General Partner in good faith with respect to a Restructuring, notwithstanding
that such actions or omissions may result in more favorable treatment of the
LP Units held by MetLife, the General Partner and other non-Public Partners
than the treatment of LP Units held by Public Partners.
The federal income tax consequences to a Restructuring depend upon the time
and form of the Restructuring, neither of which is known or knowable at the
present time. As a result, it is not possible to predict with any accuracy the
likely tax consequences of any future Restructuring.
APPLICABLE LAW
The Partnership Agreement is governed by the internal laws of the State of
Delaware, without giving effect to any conflicts or choice of law provision
that would make applicable the substantive laws of any other jurisdiction. (PA
Section 18.10).
ITEM 2. EXHIBITS.
1. Second Amended and Restated Agreement of Limited Partnership of New
England Investment Companies, L.P. dated as of December 29, 1997.
2. Form of Certificate Evidencing LP Units Representing Limited Partner
Interests.
3. Intercompany Agreement dated as of December 29, 1997, between NEIC and
NEICOP.
Page 10 of 11 Pages
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
NEW ENGLAND INVESTMENT COMPANIES, L.P.
/s/ Edward N. Wadsworth
Dated: January 5, 1998 By: _________________________________
Edward N. Wadsworth
Executive Vice President and
General Counsel
Page 11 of 11 Pages
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
<S> <C>
1 Second Amended and Restated Agreement of Limited Partnership of
New England Investment Companies, L.P. dated as of December 29,
1997.
2 Form of Certificate Evidencing LP Units Representing Limited
Partner Interests.
3 Intercompany Agreement dated as of December 29, 1997, between
NEIC and NEICOP.
</TABLE>
<PAGE>
Exhibit 1
---------
===============================================================================
SECOND AMENDED AND RESTATED
AGREEMENT
OF
LIMITED PARTNERSHIP
OF
NEW ENGLAND INVESTMENT COMPANIES, L.P.
===============================================================================
<PAGE>
NEW ENGLAND INVESTMENT COMPANIES, L.P.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS...................................................... 1
"Affiliate"................................................. 1
"Agent"..................................................... 1
"Agreed Value".............................................. 1
"Agreement"................................................. 1
"Allocable Excludable Units"................................ 1
"Amended and Restated Agreement"............................ 2
"Associate"................................................. 2
"Business Day".............................................. 2
"Capital Accounts".......................................... 2
"Capital Contribution"...................................... 2
"Carrying Value"............................................ 2
"Certificate of Limited Partnership"........................ 2
"Code"...................................................... 2
"Contributed Property"...................................... 2
"Contributing Partner"...................................... 2
"Conveyance Agreement"...................................... 2
"Date of First Amendment"................................... 2
"Date of Second Amendment".................................. 2
"Delaware Act".............................................. 3
"Designated Expenses"....................................... 3
"Dropdown".................................................. 3
"Eighty Percent Interest"................................... 3
"Exchange".................................................. 3
"Exchange Act".............................................. 3
"Excludable Units".......................................... 3
"Former General Partner".................................... 3
"Former GP Portion"......................................... 3
"Former LP Portion"......................................... 3
"General Partner"........................................... 4
"GP Unit"................................................... 4
"Group"..................................................... 4
"Indemnitee"................................................ 4
"Initial Limited Partner"................................... 4
"Intercompany Agreement".................................... 4
"Issue Price"............................................... 4
"Limited Partner"........................................... 4
-i-
<PAGE>
"Liquidator"................................................ 4
"Loss of Partnership Status"................................ 4
"LP Certificate"............................................ 4
"LP Unit"................................................... 5
"Majority Interest"......................................... 5
"Majority of Minority Interest"............................. 5
"MetLife"................................................... 5
"NASDAQ".................................................... 5
"National Securities Exchange".............................. 5
"NEIC, Inc."................................................ 5
"NEICOP".................................................... 5
"NEM"....................................................... 5
"NEM Contributed Property".................................. 5
"NEM Contribution Date"..................................... 5
"NEM Designated Units"...................................... 5
"Net Agreed Value".......................................... 5
"New Operating Entity"...................................... 6
"Ninety-Five Percent Interest".............................. 6
"Operating Partnership"..................................... 6
"Operating Partnership Agreement"........................... 6
"Opinion of Counsel"........................................ 6
"Organizational Limited Partner"............................ 6
"Original Agreement"........................................ 6
"Partner"................................................... 6
"Partnership"............................................... 6
"Partnership Admission Agreement"........................... 6
"Partnership Interest"...................................... 6
"Percentage Interest"....................................... 6
"Person".................................................... 7
"Public Entity"............................................. 7
"Public Partner"............................................ 7
"Recapture Income".......................................... 7
"Record Date"............................................... 7
"Record Holder" or "Holder"................................. 7
"Registration Statement".................................... 7
"Restricted Unit Plan"...................................... 7
"Restructuring"............................................. 7
"Restructuring Objective"................................... 7
"RTI"....................................................... 7
"RTI Contributed Property".................................. 7
"RTI Designated Units"...................................... 7
"Second Amended and Restated Agreement"..................... 8
"Securities Act"............................................ 8
-ii-
<PAGE>
"Subsidiary"................................................ 8
"Tax Realization Event"..................................... 8
"Time of Delivery".......................................... 8
"Transfer Agent"............................................ 8
"Treasury Regulations"...................................... 8
"Two-Thirds Interest"....................................... 8
"Underwriting Agreement".................................... 8
"Unit"...................................................... 8
"Unitholder"................................................ 8
"Unit Price"................................................ 8
"Units Register"............................................ 9
"Unrealized Gain"........................................... 9
"Unrealized Loss"........................................... 9
"Voting Unit"............................................... 9
"WP"........................................................ 9
"WP Contributed Property"................................... 9
ARTICLE II
ORGANIZATIONAL MATTERS........................................... 10
2.1. Formation............................................. 10
2.2. Name.................................................. 10
2.3. Principal Office; Registered Office................... 10
2.4. Power of Attorney..................................... 11
2.5. Term.................................................. 12
2.6. Organizational Limited Partner........................ 12
2.7. Organizational Certificate............................ 12
ARTICLE III
PURPOSE.......................................................... 13
3.1. Purpose............................................... 13
ARTICLE IV
CAPITAL CONTRIBUTIONS; EXCHANGE OF
GP UNITS AND LP UNITS; ADDITIONAL ISSUANCES...................... 13
4.1. Capital Contributions................................. 13
4.2. Exchange of GP Units and LP Units..................... 14
4.3. Issuance of Additional LP Units and Other Securities.. 15
4.4. No Preemptive Rights.................................. 15
4.5. No Interest........................................... 15
4.6. Loans from Partners................................... 15
-iii-
<PAGE>
ARTICLE V
CAPITAL ACCOUNTS AND DISTRIBUTIONS............................... 15
5.1. Capital Accounts...................................... 15
5.2. Distributions in Respect of Units..................... 18
5.3. Special Allocations Pertaining to Grants to Employees. 19
ARTICLE VI
INCOME TAX MATTERS............................................... 20
6.1. Tax Allocations....................................... 20
6.2. Preparation of Tax Returns............................ 21
6.3. Tax Elections......................................... 21
6.4. Tax Controversies..................................... 21
6.5. Withholding........................................... 22
ARTICLE VII
MANAGEMENT OF OPERATION OF BUSINESS;
INDEMNIFICATION.................................................. 22
7.1. Powers of General Partner............................. 22
7.2. Duties of General Partner............................. 23
7.3. Reliance by Third Parties............................. 24
7.4. Compensation and Reimbursement of the General Partner. 25
7.5. Purchase or Sale of LP Units.......................... 25
7.6. Partnership Funds..................................... 25
7.7. Outside Activities; Contracts with
Affiliates; Loans to or from Affiliates........... 25
7.8. Tax Basis and Value Determinations.................... 27
7.9. Resolution of Conflicts of Interest; Standard of Care. 27
7.10. Other Matters Concerning the General Partner.......... 28
7.11. Limited Liability; Indemnification.................... 29
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS....................... 30
8.1. Limitation of Liability.............................. 30
8.2. Management of Business............................... 30
8.3. Outside Activities................................... 31
8.4. Return of Capital.................................... 31
8.5. Rights of Limited Partners Relating
to the Partnership................................ 31
-iv-
<PAGE>
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS........................... 32
9.1. Books, Records and Accounting......................... 32
9.2. Fiscal Year........................................... 32
9.3. Reports............................................... 32
ARTICLE X
ISSUANCE OF LP CERTIFICATES; TRANSFER AND EXCHANGE OF LP UNITS... 33
10.1. Initial Issuance of LP Certificates................... 33
10.2. Registration, Registration of Transfer and Exchange
and Restrictions on Transfer and Exchange......... 33
10.3. Mutilated, Destroyed, Lost or Stolen LP Certificates.. 34
10.4. Persons Deemed Owners................................. 34
ARTICLE XI
TRANSFER OF GP UNITS............................................. 34
11.1. Transfer of GP Units.................................. 34
11.2. Successor General Partner............................. 35
11.3. Admission of Additional General Partner............... 35
ARTICLE XII
ADMISSION OF INITIAL AND SUBSTITUTED
LIMITED PARTNERS AND SUCCESSOR GENERAL PARTNER................... 35
12.1. Admission of Initial Limited Partners................. 35
12.2. Admission of Substituted Limited Partners............. 35
12.3. Admission of Successor General Partner................ 35
12.4. Restructuring......................................... 36
ARTICLE XIII
REMOVAL OF THE GENERAL PARTNER................................... 39
13.1. Removal of the General Partner........................ 39
13.2. Sale of Former General Partner's Interest............. 39
-v-
<PAGE>
ARTICLE XIV
DISSOLUTION AND LIQUIDATION...................................... 40
14.1. Dissolution........................................... 40
14.2. Reconstitution........................................ 41
14.3. Liquidation........................................... 41
14.4. Distribution in Kind.................................. 42
14.5. Cancellation of Certificate of Limited Partnership.... 42
14.6. Return of Capital..................................... 43
14.7. Waiver of Partition................................... 43
ARTICLE XV
AMENDMENT OF PARTNERSHIP AGREEMENT............................... 43
15.1. Amendments Which May be Adopted Solely
by the General Partner............................... 43
15.2. Other Amendments...................................... 44
15.3. Amendment Requirements................................ 44
15.4. Limitation of Voting Power of Certain LP Unit Holders. 44
ARTICLE XVI
MEETINGS......................................................... 48
16.1. Meetings.............................................. 48
16.2. Record Date........................................... 48
16.3. Conduct of Meeting.................................... 48
16.4. Action Without a Meeting.............................. 49
ARTICLE XVII
CERTAIN RESTRICTIONS............................................. 49
17.1. Additional Units...................................... 49
17.2. Sale of Assets........................................ 49
ARTICLE XVIII
MISCELLANEOUS.................................................... 50
18.1. Opinions Regarding Taxation as a Partnership.......... 50
18.2. Personal Property..................................... 50
18.3. Addresses and Notices................................. 50
18.4. Headings.............................................. 50
18.5. Binding Effect........................................ 50
18.6. Integration........................................... 50
18.7. Waiver................................................ 50
18.8. Counterparts.......................................... 51
18.9. Severability.......................................... 51
18.10. Applicable Law........................................ 51
-vi-
<PAGE>
SECOND AMENDED AND RESTATED
AGREEMENT
OF
LIMITED PARTNERSHIP
OF
NEW ENGLAND INVESTMENT COMPANIES, L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as
of December 29, 1997, is entered into by and among NEW ENGLAND INVESTMENT
COMPANIES, INC, ("NEIC, Inc."), a Massachusetts corporation, together with all
other Partners of the Partnership as of the Date of Second Amendment, and
additional persons that become partners of the Partnership. The parties hereto
agree to continue the Partnership as a limited partnership under the Delaware
Act and this Agreement.
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless otherwise clearly
indicated to the contrary, apply to the terms used in this Agreement.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with the Person in question; provided, however, that, for purposes of the
restrictive provisions of Sections 7.6, 7.7 and 7.9, neither the Partnership nor
any Operating Partnership nor any of their respective Subsidiaries shall be
deemed to be Affiliates of the General Partner. As used herein, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.
"Agent" has the meaning specified in Section 2.4.
"Agreed Value" of any Contributed Property means the fair market value of
such property as of the time of contribution (or, in the case of cash, the
amount thereof), as determined by the General Partner using such reasonable
method of valuation as it may adopt.
"Agreement" means the Second Amended and Restated Agreement of Limited
Partnership, as amended or restated from time to time.
"Allocable Excludable Units" has the meaning specified in Section 15.4.
<PAGE>
"Amended and Restated Agreement" means the agreement of limited partnership
of the Partnership as in effect from time to time prior to the Date of Second
Amendment.
"Associate" has the meaning specified in Section 15.4.
"Business Day" means any day other than a Saturday, a Sunday, or a legal
holiday recognized as such by the Government of the United States or the State
of New York.
"Capital Accounts" means the capital accounts maintained with respect to
Units pursuant to Section 5.1(a).
"Capital Contribution" means any Contributed Property which a Partner
contributes to the Partnership.
"Carrying Value" means (a) with respect to Contributed Property, the Agreed
Value of such property reduced as of the time of determination (but not below
zero) by (i) all depreciation, cost recovery and amortization deductions charged
to the Capital Accounts pursuant to Section 5.1(a) with respect to such property
and (ii) an appropriate amount to reflect any sales, retirements and other
dispositions of assets included in such property, and (b) with respect to any
other property, the adjusted basis of such property for federal income tax
purposes as of the time of determination, in either case as may be adjusted from
time to time pursuant to Section 5.1(e).
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware as
described in the first sentence of Section 2.7, as amended or restated from time
to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Contributed Property" means any cash, property or other consideration (in
such form as may be permitted under the Delaware Act) contributed to the
Partnership.
"Contributing Partner" means any Partner contributing Contributed Property
to the Partnership in exchange for Units (or any transferee of such Units).
"Conveyance Agreement" means the agreement between RTI and the Partnership
dated as of May 29, 1987.
"Date of First Amendment" means September 15, 1993.
"Date of Second Amendment" means December 29, 1997.
-2-
<PAGE>
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
as amended from time to time, and any successor to such Act.
"Designated Expenses" means all costs and expenses (direct or indirect)
incurred by the General Partner which are directly or indirectly related to the
formation, capitalization, business or activities of the Partnership and any
Operating Partnership (including, without limitation, expenses, direct or
indirect, reasonably allocated to the General Partner by its Affiliates);
provided, however, that Designated Expenses shall not include any cost or
expense for which the General Partner is not entitled to be reimbursed by reason
of failing to satisfy the standard set forth in the proviso at the end of
Section 7.11(b).
"Dropdown" means the contribution by the Partnership of all of its
operating assets, subject to all of its liabilities, to NEICOP in exchange for a
number of units representing a general partner's interest in NEICOP such that
the Partnership will own a number of units representing a partnership interest
in NEICOP equal to the number of Units then outstanding, on the Date of Second
Amendment, pursuant to the Intercompany Agreement and Section 12.4 hereof.
"Eighty Percent Interest" means the holders of an aggregate of at least 80%
of the outstanding GP Units and LP Units entitled to vote voting together as a
class.
"Exchange" means the redemption by the Partnership of LP Units in exchange
for units representing a limited partner's interest in NEICOP, pursuant to the
Intercompany Agreement and Section 12.4 hereof, on the Date of the Second
Amendment and from time to time thereafter.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor to such statute.
"Excludable Units" has the meaning specified in Section 15.4.
"Former General Partner" means RTI, in its capacity as the general partner
of the Partnership prior to the Date of First Amendment.
"Former GP Portion" means that portion of the contributed property of the
Former General Partner equal to fifty (50) percent of the total Capital
Contributions pursuant to Section 4.1.
"Former LP Portion" means that portion of the Contributed Property of RTI
(together with the contribution pursuant to Section 4.1(a)(iv)) equal to 50% of
the total Capital Contributions pursuant to Section 4.1.
-3-
<PAGE>
"General Partner" means NEIC, Inc. in its capacity as the general partner
of the Partnership, and any successor to NEIC, Inc. as such general partner.
"GP Unit" means a Partnership Interest issued pursuant to Section
4.1(a)(i), 4.1(b) or 4.2(a) and representing a general partner's interest in the
Partnership.
"Group" has the meaning specified in Section 15.4.
"Indemnitee" means the General Partner, any former General Partner, any
Affiliate of the General Partner or any former General Partner (but excluding
all Operating Partnerships other than NEICOP), any Person who is or was a
director, partner, officer, employee or agent of the Partnership, the General
Partner, any former General Partner, or any such Affiliate, any Person who is or
was serving at the request of the General Partner or any such Affiliate as a
director, officer, partner, trustee, employee or agent of another Person, or any
other Person deemed an Indemnitee by the General Partner pursuant to Section
7.11(b).
"Initial Limited Partner" means RTI in its capacity of acquiring all LP
Units at the Time of Delivery.
"Intercompany Agreement" means the Intercompany Agreement, dated as of the
date of Second Amendment, between the Partnership and NEICOP.
"Issue Price" means the price at which a Unit is purchased from the
Partnership (or, in the case of an issue of Units in exchange for a
contribution, the Net Agreed Value of the contribution per Unit received).
"Limited Partner" means any limited partner of the Partnership who is shown
as such on the Unit Register.
"Liquidator" has the meaning specified in Section 14.3.
"Loss of Partnership Status" means any one or more events, conditions or
circumstances (including without limitation the public trading of Units, the
ownership of Units by more than any particular number of Persons, any failure of
the Partnership to pay or decision by the Partnership not to pay the excise tax
imposed by Section 7704(g)(3)(A) of the Code, or any revocation by the
Partnership of the election provided in Section 7704(g) of the Code) in which,
or as a result of which, the Partnership would cease to be treated as a
partnership for federal income tax purposes.
"LP Certificate" means a certificate issued by the Partnership,
substantially in the form of Annex A to this Agreement, evidencing ownership of
one or more LP Units.
-4-
<PAGE>
"LP Unit" means a Partnership Interest issued pursuant to Section 2.6,
4.1(a)(ii), 4.1(b), 4.2(b) or 4.3 and representing a limited partner's interest
in the Partnership.
"Majority Interest" means the holders of an aggregate of more than 50% of
the outstanding GP Units and LP Units entitled to vote, voting together as a
class.
"Majority of Minority Interest" means the holders of an aggregate of more
than 50% of the outstanding Units entitled to vote (other than those held by the
General Partner or any of its Affiliates), voting together as a class.
"MetLife" means Metropolitan Life Insurance Company, a New York mutual life
insurance company, successor by merger to NEM.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System.
"National Securities Exchange" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Exchange Act.
"NEIC, Inc." means New England Investment Companies, Inc., a Massachusetts
corporation.
"NEICOP" means NEIC Operating Partnership, L.P., a Delaware limited
partnership.
"NEM" means New England Mutual Life Insurance Company, Inc., a mutual life
insurance company, which was merged with and into MetLife in August 1996.
"NEM Contributed Property" means any cash, property or other consideration
(in such form as may be permitted under the Delaware Act) contributed to the
Partnership by NEM on September 15, 1993.
"NEM Contribution Date" shall mean the date on which NEM contributed the
NEM Contributed Property to the Partnership.
"NEM Designated Units" has the meaning specified in Section 5.3 hereof.
"Net Agreed Value" means (a) in the case of any Contributed Property, the
Agreed Value of such Contributed Property reduced by any indebtedness either
assumed by the Partnership upon contribution of such Contributed Property or to
which such Contributed Property is subject when contributed, (b) in the case of
any property distributed to a Partner pursuant to Section 5.2, 14.3 or 14.4, the
fair market value of such property at the time of such distribution reduced by
any indebtedness either assumed by such Partner upon such distribution or to
which such property is subject at the time of such distribution; provided
-5-
<PAGE>
however, that the Net Agreed Value of the NEM Contributed Property and the WP
Contributed Property shall be as specified in Section 4.1(b).
"New Operating Entity" has the meaning specified in Section 12.4(b).
"Ninety-Five Percent Interest" means the holders of an aggregate of at
least 95% of the
outstanding GP Units and LP Units entitled to vote, voting together as a class.
"Operating Partnership" means any partnership or other entity taxed as a
partnership for federal income tax purposes (including but not limited to
NEICOP) through which the Partnership may directly or indirectly conduct any and
all of its activities and the operations of which are directly or indirectly
controlled by the General Partner or the Partnership.
"Operating Partnership Agreement" means any agreement of limited
partnership governing the rights and obligations of the partners or any other
similar instrument governing the rights of any Operating Partnership and related
matters, as amended or restated from time to time.
"Opinion of Counsel" means a written opinion of counsel (who may be regular
counsel of the General Partner or any of its Affiliates) acceptable to the
General Partner.
"Organizational Limited Partner" means Hamish Norton, acting as the
organizational limited partner pursuant to this Agreement.
"Original Agreement" means the agreement of limited partnership of the
Partnership as in effect from time to time prior to the Date of First Amendment.
"Partner" means the General Partner or a Limited Partner.
"Partnership" means New England Investment Companies, L.P., a Delaware
limited partnership.
"Partnership Admission Agreement" means the Partnership Admission Agreement
dated March 26, 1993, as amended and restated as of June 15, 1993, providing for
the contribution of businesses, assets and liabilities of the company formerly
known as New England Investment Companies, Inc. to the Partnership and various
other matters.
"Partnership Interest" means a general partner's or limited partner's
interest in the Partnership.
"Percentage Interest" means, with respect to any Partner, the number of
Units held by such Partner divided by the number of Units outstanding.
-6-
<PAGE>
"Person" means an individual, a corporation, a partnership, a trust, an
unincorporated organization, an association or any other entity.
"Public Entity" has the meaning specified in Section 12.4(b).
"Public Partner" means any person holding LP Units in the Partnership,
except for the General Partner, RTI, MetLife and Affiliates of the General
Partner, RTI and MetLife and any other person who has obtained, and continues to
hold, more than 5% of all Partnership Units (taking into account NEM Designated
Units and RTI Designated Units for this purpose, and adopting such other
conventions as may reasonably be determined by the General Partner in achieving
the purposes of Section 12.4 hereof) in exchange for a contribution of assets to
the Partnership.
"Recapture Income" means any gain recognized by the Partnership upon the
disposition of any asset of the Partnership that is not a capital gain due to
the recapture of deductions previously taken with respect to such asset.
"Record Date" means the date established by the General Partner for
determining the identity of Partners entitled (a) to notice of or to vote at any
meeting of Partners, to vote by ballot or approve Partnership action in writing
without a meeting or to exercise rights in respect of any other lawful action of
Partners, or (b) to receive any report or distribution.
"Record Holder" or "Holder" of (a) any LP Unit means the Person in whose
name such Unit is registered in the Units Register or (b) any GP Unit means the
General Partner.
"Registration Statement" means the registration statement on Form S-1 (No.
33-13338), as amended from time to time, registering the offering and sale of LP
Units under the Securities Act as contemplated by Section 4.2.
"Restricted Unit Plan" has the meaning specified in Section 5.3 hereof.
"Restructuring" means any action, event, transaction or series of actions,
events or transactions that the General Partner believes will (or is reasonably
likely to) prevent or avoid the occurrence of either or both a Loss of
Partnership Status or a Tax Realization Event.
"Restructuring Objective" has the meaning specified in Section 12.4(b)
hereof.
"RTI" means Reich & Tang, Inc.
"RTI Contributed Property" means any cash, property or other consideration
(in such form as may be permitted under the Delaware Act) contributed to the
Partnership by RTI.
"RTI Designated Units" has the meaning specified in Section 5.3 hereof.
-7-
<PAGE>
"Second Amended and Restated Agreement" has the meaning specified in
Section 2.1 hereof.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor to such statute.
"Subsidiary" has the meaning specified in Section 15.4.
"Tax Realization Event" means any one or more events, conditions or
circumstances in which, or as a result of which, any one or more Partners (or
any affiliated Person of any one or more Partners) realizes or is reasonably
likely to be treated as realizing, either directly or through allocations of
Partnership income, income (including without limitation capital gain income),
for federal income tax purposes, with respect to all or any part of the
difference between (A) the value of any property contributed (or deemed
contributed under applicable law) by such Partner (or any affiliated Person of
such Partner) to the Partnership on or after June 30, 1993, determined either as
of the time of such contribution (or deemed contribution) or the time of such
realization, and (B) such Partner's (or such affiliated Person's) or the
Partnership's basis, for federal income tax purposes, in such property, other
than as a result of a sale of such property by the Partnership exclusively for
cash.
"Time of Delivery" means the First Closing Date specified in the
Underwriting Agreement.
"Transfer Agent" means The Bank of New York, as transfer agent and
registrar for LP Units, or any bank, trust company or other Person appointed by
the Partnership to act as successor transfer agent and registrar for LP Units.
"Treasury Regulations" means the Income Tax Regulations promulgated under
the Code, as such regulations may be amended from time to time.
"Two-Thirds Interest" means holders of an aggregate of at least two-thirds
of the outstanding GP Units and LP Units entitled to vote, voting together as a
class.
"Underwriting Agreement" means the underwriting agreement in connection
with the Partnership's 1987 initial public offering.
"Unit" means a GP Unit or an LP Unit.
"Unitholder" means any holder of a GP Unit or an LP Unit.
"Unit Price" of a Unit means, as of any date of determination, (a) if such
Unit is one of a class of Units listed or admitted to trading on a National
Securities Exchange, the average of the last reported sales prices per Unit
regular way or, in case no such reported sale takes place
-8-
<PAGE>
on any such day, the average of the last reported bid and asked prices per Unit
regular way, in either case on the principal National Securities Exchange on
which such class of Units is listed or admitted to trading (or, if such class of
Units is listed or admitted to trading on the New York Stock Exchange, on the
New York Stock Exchange Composite Tape), for the five trading days immediately
preceding the date of determination; (b) if such Unit is not of a class of Units
listed or admitted to trading on a National Securities Exchange but is of a
class quoted by NASDAQ, the average of the last reported sales prices per Unit
or, in case no such reported sale takes place on any such day or in case last
reported sales prices are not quoted by NASDAQ, the average of the last bid and
asked prices per Unit, for the five trading days immediately preceding such date
of determination, as furnished by the National Quotation Bureau Incorporated or
such other nationally recognized quotation service as may be selected by the
General Partner for such purpose, if said Bureau is not at the time furnishing
quotations; or (c) if such Unit is not of a class of Units listed for trading on
a National Securities Exchange or quoted by NASDAQ, an amount equal to the fair
market value of such Unit as of such date of determination, as determined by the
General Partner using any reasonable method of valuation it may select.
"Units Register" has the meaning specified in Section 10.2.
"Unrealized Gain" attributable to a Partnership property means, as of any
date of determination, the excess, if any, of the fair market value of such
property as of such date of determination over the Carrying Value of such
property as of such date of determination (prior to any adjustment to be made
pursuant to Section 5.1(e) as of such date).
"Unrealized Loss" attributable to a Partnership property means, as of any
date of determination, the excess, if any, of the Carrying Value of such
property as of such date of determination (prior to any adjustment to be made
pursuant to Section 5.1(e) as of such date) over the fair market value of such
property as of such date of determination.
"Voting Unit" has the meaning specified in Section 15.4.
"WP" means Westpeak Investment Advisors, Inc., a Massachusetts corporation,
which is the same entity as NEIC, Inc., having changed its name to New England
Investment Companies, Inc. on September 15, 1993.
"WP Contributed Property" means any cash, property or other consideration
(in such form as may be permitted under the Delaware Act) contributed to the
Partnership by WP on September 15, 1993.
-9-
<PAGE>
ARTICLE II
ORGANIZATIONAL MATTERS
2.1 Formation. On April 2, 1987 the Former General Partner and the
Organizational Limited Partner formed the Partnership as a limited partnership
pursuant to the provisions of the Delaware Act. The Former General Partner and
the Organizational Limited Partner entered into the Original Agreement to set
forth the rights and obligations of the Partners.
The Original Agreement was amended and restated as of and effective on
September 15, 1993 in connection with the admission, pursuant to the Partnership
Admission Agreement, of WP and NEM as Partners in exchange for their
contribution to the Partnership of the WP Contributed Property and the NEM
Contributed Property, respectively. WP was issued 110,000 GP Units and NEM was
issued 21,890,000 LP Units. On the same date, the Former General Partner
converted its holding of GP Units into an equal number of LP Units and was
replaced as General Partner by WP. Immediately after the admission of WP and
NEM, the Partnership changed its name from "Reich & Tang L.P." to "New England
Investment Companies, L.P." and WP changed its name to "New England Investment
Companies, Inc."
The Amended and Restated Agreement was amended pursuant to Section 15.1 on
March 14, 1994 to specify the allocation of the deduction attributable to the
incentive compensation and benefit plan liability associated with the NEM
Contributed Property, effective for the year ended December 31, 1993.
The Amended and Restated Agreement was amended and restated pursuant to
Section 12.4 and Section 15.1 (the "Second Amended and Restated Agreement") on
the Date of Second Amendment to reflect the consummation of the Dropdown and
certain related matters.
The administration, dissolution and termination of the Partnership shall be
governed by the Delaware Act and this Agreement.
2.2 Name. The name of the Partnership shall be, and the business of the
Partnership shall be conducted under the name of "New England Investment
Companies, L.P."; provided, however, that (a) the Partnership's business may be
conducted under any other name or names deemed advisable by the General Partner,
(b) the General Partner in its sole discretion may change the name of the
Partnership at any time and from time to time and (c) the name under which the
Partnership conducts business shall include "Ltd." or "Limited Partnership" (or
similar words or letters) where necessary for purposes of maintaining the
limited liability status of each Limited Partner or otherwise complying with the
laws of any jurisdiction that so requires.
2.3 Principal Office; Registered Office. (a) The principal office of the
Partnership shall be 399 Boylston Street, Boston, MA 02116, or such other place
as the General Partner
-10-
<PAGE>
may from time to time designate. The Partnership may maintain offices at such
other places as the General Partner deems advisable.
(b) The address of the Partnership's registered office in the State of
Delaware shall be Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, Delaware 19801, and the name of the
Partnership's registered agent for service of process at such address shall be
The Corporation Trust Company.
2.4 Power of Attorney. (a) Each Limited Partner hereby constitutes and
appoints the General Partner or, if a Liquidator shall have been selected
pursuant to Section 14.3, the Liquidator, with full power of substitution, as
such Limited Partner's true and lawful agent and attorney-in-fact ("Agent"),
with full power and authority in such Limited Partner's name, place and stead
to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) all certificates, documents and other
instruments (including, without limitation, this Agreement and the
Certificate of Limited Partnership and any amendments or restatements
thereof) which the Agent deems appropriate or necessary to form or qualify,
or continue the existence or qualification of, the Partnership as a limited
partnership (or a partnership in which the Limited Partners have limited
liability) under the laws of any state or jurisdiction; (B) all
certificates, documents and other instruments which the Agent deems
appropriate or necessary to reflect any amendments, changes or
modifications of this Agreement in accordance with its terms; (C) all
conveyances and other documents or instruments which the Agent deems
appropriate or necessary to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement, including a
certificate of cancellation; (D) all certificates, documents and other
instruments relating to the admission, substitution, withdrawal or removal
of any Partner pursuant to Article XII, XIII or XIV and other events
described in Article XII, XIII or XIV; (E) all certificates, documents and
other instruments (including, without limitation, this Agreement and the
Certificate of Limited Partnership and any amendments or restatements
thereof) relating to the determination of the rights, preferences and
privileges of any class or series of Units issued pursuant to Section 4.3
and (F) all certificates, documents, and other instruments (including,
without limitation, this Agreement and the Certificates of Limited
Partnership and any amendment or restatements thereof), relating to
implementation of a Restructuring; and
(ii) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates, documents and other instruments which the
Agent deems appropriate or necessary in order to make, evidence, give,
confirm, or ratify any vote, consent, approval, agreement or other action
which is made or given by the Partners hereunder, is deemed to be made or
given by the Partners hereunder, is consistent with the terms of this
Agreement or is deemed by the Agent to be appropriate or necessary
-11-
<PAGE>
to effectuate the terms or intent of this Agreement or the purposes of the
Partnership; provided, however, that, if any vote or approval of Limited
Partners is specifically required for an action by any provision of this
Agreement, the Agent may exercise the power of attorney made in this
subsection (ii) to take such action only after such vote or approval is
obtained.
(b) The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution,
bankruptcy or termination of any Limited Partner and the transfer of all or any
portion of such Limited Partner's Units and shall extend to such Limited
Partner's heirs, transferees, successors, assigns and personal representatives.
Each Limited Partner hereby agrees to be bound by any representations made by
the Agent acting in good faith pursuant to such power of attorney; and each
Limited Partner hereby waives any and all defenses which may be available to
contest, negate or disaffirm the action of the Agent taken in good faith
pursuant to such power of attorney. Each Limited Partner shall execute and
deliver to the Agent, within fifteen days after receipt of the Agent's request
therefor, such further designations, powers of attorney and other instruments as
the Agent deems appropriate or necessary to effectuate the terms or intent of
this Agreement or the purposes of the Partnership.
2.5 Term. The Partnership shall continue in existence until its
termination in accordance with the provisions of Article XIV.
2.6 Organizational Limited Partner. At and as of the Time of Delivery,
the Partnership Interest of the Organizational Limited Partner was exchanged for
a LP Unit and the Organizational Limited Partner automatically became a Limited
Partner and the Partnership Interest of RTI was as described in Section 4.1(a).
2.7 Organizational Certificate. A Certificate of Limited Partnership of
the Partnership has been filed with the Secretary of State of the State of
Delaware as required by the Delaware Act. The General Partner shall cause to be
filed such other certificates or documents as may be required for the formation,
operation and qualification of a limited partnership in Delaware and any other
state or jurisdiction in which the Partnership may elect to do business. The
General Partner shall thereafter file any necessary amendments to the
Certificate of Limited Partnership and any such other certificates and documents
and do all things requisite to the maintenance of the Partnership as a limited
partnership (or as a partnership in which the Limited Partners have limited
liability) under the laws of Delaware and any other state or jurisdiction in
which the Partnership may elect to do business. Subject to applicable law, the
General Partner may omit from the Certificate of Limited Partnership and any
such other certificates and documents, and from all amendments thereto, the
names and addresses of the Limited Partners and information relating to the
Capital Contributions and shares of profits and compensation of the Limited
Partners, or state such information in the aggregate rather than with respect to
each individual Limited Partner.
-12-
<PAGE>
ARTICLE III
PURPOSE
3.1 Purpose. The purpose and business of the Partnership shall be to
engage in any lawful activity for which limited partnerships may be organized
under the Delaware Act.
ARTICLE IV
CAPITAL CONTRIBUTIONS; EXCHANGE OF
GP UNITS AND LP UNITS; ADDITIONAL ISSUANCES
4.1 Capital Contributions. (a) On June 1, 1987 RTI made the following
Capital Contributions to the Partnership:
(i) General Partner. At the Time of Delivery, RTI contributed
to the Partnership the Former GP Portion of RTI Contributed Property
pursuant to the Conveyance Agreement in exchange for 5,000,000 GP
Units. The Capital Contributions thus made by RTI to the Partnership
in its capacity as General Partner were equal to fifty (50) percent of
the total Capital Contributions (based on the amount credited to the
Capital Accounts on account thereof) to the Partnership pursuant to
this Section 4.1. The GP Units issued to RTI in its capacity as
General Partner, pursuant to this Section 4.1(a)(i), were issued at
the Time of Delivery.
(ii) Initial Limited Partner. At the Time of Delivery, RTI
contributed to the Partnership the Former LP Portion (less the
Organizational Limited Partner's contribution referred to in Section
4.1(a)(iv)) of the RTI Contributed Property pursuant to the Conveyance
Agreement in exchange for 5,000,000 LP Units (less the single LP Unit
referred to in Section 4.1(a)(iv)). The Capital Contributions then
made by RTI to the Partnership in its capacity as Initial Limited
Partner (together with the contribution referred to in Section
4.1(a)(iv)) were equal to fifty (50) percent of the total Capital
Contribution (based on the amounts credited to the Capital Account on
account thereof) to the Partnership pursuant to this Section 4.1. The
LP Units issued to RTI in its capacity as Initial Limited Partner,
pursuant to this paragraph (ii) were issued at the Time of Delivery.
(iii) At the time of the Capital Contributions made by RTI
pursuant to Section 4.1(a)(i) and Section 4.1(a)(ii), the Partnership
assumed (or took the RTI Contributed Property subject to) all
liabilities and indebtedness to be assumed by the Partnership in
accordance with the Conveyance Agreement.
-13-
<PAGE>
(iv) The Organizational Limited Partner at or prior to the
foregoing contributed $20 in cash as part of the Former LP Portion to the
Partnership in exchange for the limited partnership interest of such
Portion (which was exchanged pursuant to Section 2.6 for a single LP Unit).
(b) As of the NEM Contribution Date, NEM contributed the NEM
Contributed Property pursuant to the Partnership Admission Agreement and
immediately after such contribution possessed 21,890,000 LP Units. The
value of the NEM Contributed Property contributed in exchange for
21,890,000 LP Units, net of liabilities assumed by the Partnership in
connection with such contribution, as of the NEM Contribution Date for all
purposes of this Agreement (including for purposes of determining Net
Agreed Value) was the last trading price of LP Units on the New York Stock
Exchange immediately prior to the NEM Contribution Date (the "Trading
Price") times 21,890,000. As of the NEM Contribution Date, WP contributed
the WP Contributed Property pursuant to the Partnership Admission Agreement
and immediately after such contribution possessed 110,000 GP Units. The
value of the WP Contributed Property contributed in exchange for 110,000 GP
Units, net of liabilities assumed by the Partnership in connection with
such contribution, as of the NEM Contribution Date for all purposes of this
Agreement (including for purposes of determining Net Agreed Value) was the
Trading Price times 110,000. On September 15, 1993, all GP Units held by
RTI were converted to LP Units, and WP became the sole General Partner of
the Partnership.
4.2 Exchange of GP Units and LP Units. (a) The General Partner shall have
the right at any time to freely exchange any of its LP Units for an equal number
of GP Units without the approval of any Limited Partners, provided, however,
that no exchange of LP Units for GP Units shall be permitted without the
approval of a Majority of Minority Interest if the relative rights, powers and
duties of the outstanding GP Units and LP Units have been altered such that the
equivalence of the economic interests of the Units (i.e., rights to current and
liquidating distributions) has been affected; additional issuances of LP Units
will not be deemed to alter the equivalence of the economic interests of the
Units.
(b) The General Partner shall have the right at any time to freely
exchange its GP Units for an equal number of LP Units without the approval of
any Limited Partners, provided, however, that no exchange of GP Units for LP
Units shall be permitted without the approval of a Majority of Minority Interest
if the relative rights, powers and duties of the outstanding GP Units and LP
Units have been altered such that the equivalence of the economic interests
(i.e., rights to current and liquidating distributions) of the Units has been
affected; additional issuances of LP Units will not be deemed to alter the
equivalence of the economic interests of the Units, and provided, further, that
no such exchange shall be made by the General Partner if its effect would be to
reduce the General Partner's percentage interest in each item of income,
-14-
<PAGE>
loss, gain, deduction or credit of the Partnership (including its interest
attributable to holding LP Units) to less than two tenths of one percent (.2
percent).
4.3 Issuance of Additional LP Units and Other Securities. (a) The General
Partner is hereby authorized to cause the Partnership to issue, in addition to
the LP Units issued pursuant to Section 4.1, additional LP Units, or classes or
series thereof, or options, rights, warrants or appreciation rights relating
thereto or any other type of security that the Partnership may lawfully issue,
for any Partnership purpose, at any time or from time to time, to Partners or to
other Persons (including, without limitation, to employee benefit plans
sponsored by the General Partner, the Partnership, any Operating Partnership, or
any of their respective Affiliates, and to partners of NEICOP pursuant to the
Intercompany Agreement in exchange for units representing a limited partner's
interest in NEICOP), for such consideration and on such terms and conditions,
and entitling the holders thereof to such relative rights and powers, including
rights and powers senior to existing classes and groups of Partnership
Interests, as shall be established by the General Partner in its sole
discretion, all without the approval of any Limited Partners.
(b) The General Partner is hereby authorized and directed to do all acts
which it deems appropriate or necessary in connection with each issuance of LP
Units or other securities by the Partnership and to amend this Agreement in any
manner which it deems appropriate or necessary to provide for each such
issuance, to admit additional limited partners in connection therewith and to
specify the relative rights, powers and duties of the holders of the LP Units or
other securities being so issued, all without the approval of any Limited
Partners.
4.4 No Preemptive Rights. No Partner shall have any preemptive right with
respect to the issuance or sale of Units or other securities that may be issued
by the Partnership. The General Partner shall have no duty or obligation to
offer Units or other securities to any Partner.
4.5 No Interest. No interest shall be paid by the Partnership on Capital
Contributions.
4.6 Loans from Partners. Loans or other advances by a Partner to or for
the account of the Partnership shall not be considered Capital Contributions.
ARTICLE V
CAPITAL ACCOUNTS AND DISTRIBUTIONS
5.1 Capital Accounts. (a) The Partnership shall maintain for each Partner
a separate Capital Account with respect to Units in accordance with the
regulations issued pursuant to Section 704 of the Code. The Capital Account of
any Partner shall be credited with (i) the Net Agreed Value of all Capital
Contributions made by such Partner in exchange for Units or other Partnership
interests and (ii) all items of income and gain computed in accordance with
Section
-15-
<PAGE>
5.1(b) and allocated to such Partner pursuant to Section 5.1(c) and debited by
(iii) the Net Agreed Value of all distributions of cash or property made to such
Partner with respect to Units or other Partnership interests and (iv) all items
of deduction and loss computed in accordance with Section 5.1(b) and allocated
to such Partner pursuant to Section 5.1(c).
(b) For purposes of computing the amount of each item of income, gain,
loss or deduction to be reflected in the Capital Accounts, the determination,
recognition and classification of such item shall be the same as its
determination, recognition and classification for federal income tax purposes,
except as otherwise provided in the Treasury Regulations issued pursuant to
Section 704 of the Code and provided that:
(i) Any deductions for depreciation, cost recovery or amortization
attributable to any Partnership property shall be determined as if the
adjusted basis of such property were equal to the Carrying Value of such
property. Upon an adjustment of the Carrying Value of any Partnership
property subject to depreciation, cost recovery or amortization pursuant to
Section 5.1(e) or 7.8, any further deductions for such depreciation, cost
recovery or amortization attributable to such property shall be determined
as if the adjusted basis of such property were equal to the Carrying Value
of such property immediately following such adjustment.
(ii) Any income, gain or loss attributable to the taxable disposition
of any Partnership property shall be determined by the Partnership as if
the adjusted basis of such property as of such date of disposition were
equal in amount to the Carrying Value of such property as of such date.
(iii) All fees and other expenses incurred by the Partnership to
promote the sale of (or to sell) a Partnership Interest that can neither be
deducted nor amortized under Section 709 of the Code shall be treated as
items of deduction.
(iv) The computation of all items of income, gain, loss and deduction
shall be made without regard to any election under Section 754 of the Code
which may be made by the Partnership and, as to those items described in
Section 705(a)(1)(B) or Section 705(a)(2)(B) of the Code or treated as
expenditures described in Section 705(a)(2)(B) pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(i)(2), without regard to the fact
that such items are not includible in gross income or are neither currently
deductible nor capitalizable for federal income tax purposes.
(c) (i) For purposes of maintaining the Capital Accounts and except as
otherwise provided in the Treasury Regulations issued pursuant to Section 704 of
the Code or in this Section 5.1(c), after making the allocations described in
Section 5.3 hereof, each remaining item of income, gain, loss and deduction
(computed in accordance with Section 5.1(b)) shall be allocated to the Partners
in accordance with their respective Percentage Interests.
-16-
<PAGE>
(ii) If any Partner receives any adjustment, allocation or
distribution described in (4), (5) or (6) of Treasury Regulations Section
1.704-1(b)(2)(ii)(d), items of Partnership income and gain (consisting of a
pro rata portion of each item of Partnership income, including gross income
and gain) shall be specially allocated to such Partner in an amount and
manner sufficient to eliminate a deficit in its Capital Account created by
such adjustment, allocation or distribution as quickly as possible. This
Section 5.1(c)(ii) is intended to be a qualified income offset provision as
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted in a manner consistent therewith.
(iii) To preserve uniformity of Units, the General Partner shall have
discretion pursuant to Section 6.1(b) to make special allocations of income
or deduction, including curative and/or remedial allocations within the
meaning of Treasury Regulations Section 1.704-3(c).
(iv) If there is a net decrease in Partnership minimum gain, within
the meaning of Treasury Regulations Section 1.704-2(d), during a
Partnership taxable year, all Partners with deficit balances in their
Capital Accounts, computed before any allocations pursuant to this Article
V for such taxable year, will be allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in the amounts and
in the proportions needed to eliminate such deficits as quickly as
possible, before any other allocations are made under Section 704(b) of the
Code. This Section 5.1(c)(iv) is intended to be a minimum gain chargeback
provision as described in Treasury Regulations Section 1.704-2(f) and shall
be interpreted in a manner consistent therewith.
(v) Losses, deductions or expenditures described in Section
705(a)(2)(B) attributable to a partner nonrecourse debt (as described in
Treasury Regulations Section 1.704-2(b)(4)) shall be allocated in a manner
consistent with Treasury Regulations Section 1.704-2(i). If there is a net
decrease during a taxable year in minimum gain attributable to a partner
nonrecourse debt, net profits for such taxable year (and if necessary for
subsequent taxable years) shall be allocated to the Partners in the amounts
and in such character as determined according to Treasury Regulations
Section 1.704-2(i)(4).
(vi) Any special allocations of items of income or gain pursuant to
Section 5.1(c)(ii), (iv) or (v) shall be taken into account in computing
subsequent allocations of profits pursuant to Sections 5.1(c) and 6.1, so
that the net amount of any items so allocated and the profits, losses and
all other items allocated to each Partner pursuant to Sections 5.1(c) and
6.1 shall, to the extent possible, be equal to the net amount that would
have been allocated to each such Person pursuant to the provisions of
Sections 5.1(c) and 6.1 if such special allocations had not occurred.
-17-
<PAGE>
(d) (i) Except as otherwise provided in this Section 5.1(d), a transferee
of LP Units shall, upon becoming a Limited Partner, succeed to the portion of
the transferor's Capital Account maintained with respect to the Units
transferred.
(ii) If a transfer of Units or other Partnership interests causes a
termination of the Partnership under Section 708(b)(1)(B) of the Code, the
Partnership shall be deemed to contribute all of its assets and liabilities
to a new partnership in exchange for interests in the new partnership and
then to distribute the interests in the new partnership to the Partners
(including the transferee(s) of the Units or other Partnership interests)
in proportion to their respective interests in the Partnership in complete
liquidation of the Partnership. The Capital Accounts of the Partnership
will continue to be maintained in accordance with this Article V following
the termination.
(e) If any additional Units are to be issued pursuant to Section 4.3 or
otherwise, or if any Partnership property (other than a de minimis amount) is to
be distributed (including a deemed distribution under Section 5.1(d)(ii)
hereof), (i) the Carrying Values of all Partnership properties may, at the
discretion of the General Partner (and were, in the case of the contribution by
NEM on the NEM Contribution Date), immediately prior to such issuance or
distribution, be adjusted (consistent with the provisions hereof and of Section
704(b) of the Code) upwards or downwards to reflect any Unrealized Gain and
Unrealized Loss attributable to all Partnership properties (as if such
Unrealized Gain or Unrealized Loss had been recognized upon an actual sale of
such properties immediately prior to such issuance) and (ii) the Capital
Accounts of all Partners may, at the discretion of the General Partner (and
were, in the case of the contribution by NEM on the NEM Contribution Date),
immediately prior to such issuance or distribution be adjusted upwards or
downwards to reflect any Unrealized Gain and Unrealized Loss, less the amount of
Partnership indebtedness outstanding as of the date of determination. In
determining such Unrealized Gain or Unrealized Loss, the fair market value of
Partnership properties, as of any date of determination, (i) shall, in the case
of the issuance of additional Units, be deemed to be equal to (A) the number of
Units outstanding, as of the date of determination, times the Issue Price for
which such additional Units are so issued, plus (B) the amount of any
Partnership indebtedness outstanding as of the date of determination and (ii)
shall, in the case of the distribution of Partnership property, be determined in
the manner provided in Section 7.8.
In the event the Carrying Value of any Partnership property is adjusted
pursuant to the preceding paragraph, subsequent allocations of income, gain,
loss, and deduction with respect to such property shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and its Carrying Value in the same manner, subject to such reasonable
conventions as may be adopted by the General Partner, as under Section 704(c) of
the Code and the Treasury Regulations thereunder.
5.2 Distributions in Respect of Units. From time to time, not less often
than quarterly, the General Partner shall review the Partnership's accounts to
determine whether
-18-
<PAGE>
distributions are appropriate. The General Partner may make such cash
distributions as it, in its sole discretion, may determine, without being
limited to current or accumulated income or gains, from any Partnership funds,
including, without limitation, Partnership revenues, Capital Contributions or
borrowed funds. In its sole discretion, the General Partner may also distribute
to the Partners other Partnership property, additional Units or other securities
of the Partnership or other entities.
All distributions in respect of Units shall be made concurrently to all
Record Holders on the Record Date set for purposes of such distribution and
shall be prorated in accordance with such Record Holders' respective Percentage
Interests as of such Record Date.
Amounts paid pursuant to Section 7.4 shall not be deemed to be
distributions for purposes of this Agreement.
5.3 Special Allocations Pertaining to Grants to Employees. Pursuant to
the Partnership Admission Agreement and Section 4.1 hereof, immediately
following the admission of WP as General Partner and the admission of NEM as a
Limited Partner, NEM had a Capital Account balance equal to the Net Agreed Value
of its Contributed Property. Promptly thereafter NEM contributed 1,100,000 LP
Units to the Partnership and RTI contributed 326,000 LP Units to the
Partnership, without adjustment to their respective Capital Accounts (pending
vesting of such Units as described below). Pursuant to the Restricted Unit Plan
(the "Restricted Unit Plan"), 1,426,000 LP Units were to be issued subject to
certain vesting requirements, and 1,100,000 of such Units were to be designated
as NEM Designated Units and 326,000 of such Units were to be designated as RTI
Designated Units. To the extent such Units were not vested, NEM Designated
Units and RTI Designated Units were for federal income tax purposes and for
purposes of maintaining Capital Account balances treated as owned by NEM and
RTI, respectively. Distributions made with respect to any such unvested NEM
Designated Units and unvested RTI Designated Units, respectively, that were paid
to holders of such Units were charged to NEM and RTI, respectively, as a
compensation expense and any tax deductions associated with such payments were
allocated accordingly to NEM and RTI, respectively. Immediately prior to
vesting of any LP Units issued under the Restricted Unit Plan, the Carrying
Value of Partnership assets were adjusted as if the vesting of such LP Units
constituted the admission of a new Partner. Any recognition of Partnership
income or gain and any Partnership deduction for federal income tax purposes or
for Capital Account maintenance purposes resulting from the vesting of LP Units
issued pursuant to the Restricted Unit Plan were, in the case of NEM Designated
Units, specially allocated and charged to NEM and, in the case of RTI Designated
Units, specially allocated and charged to RTI. To the extent that any NEM
Designated Units or RTI Designated Units were not yet issued under the
Restricted Unit Plan or had been forfeited and not reissued, they were treated
as outstanding and owned by NEM and RTI, respectively, for all tax distribution
and Capital Account purposes, notwithstanding that the certificates representing
such Units were held by the General Partner for issuance to employees pursuant
to the Restricted Unit Plan. Notwithstanding anything to the contrary in this
Section 5.3, the General Partner was allocated
-19-
<PAGE>
at least 0.2% of each material item of income, gain, loss, deduction or credit
that was specially allocated pursuant to this Section 5.3. Pursuant to the
Intercompany Agreement, all Units in the Restricted Unit Plan which have not yet
been issued and/or have not yet vested will be exchanged for units of
partnership interest in NEICOP in connection with the Exchange.
ARTICLE VI
INCOME TAX MATTERS
6.1 Tax Allocations. (a) For federal income tax purposes, each item of
income, gain, loss, deduction and credit of the Partnership shall be allocated
among the Partners in accordance with their Percentage Interests after taking
into account the special allocations described in Section 5.3 hereof except as
provided in Article V and except that the General Partner shall have the
authority to make such other allocations as are necessary and appropriate to
comply with Section 704 of the Code and the Treasury Regulations issued pursuant
thereto.
(b) To preserve uniformity of LP Units, the General Partner shall have
sole discretion to (i) adopt such conventions as it deems appropriate or
necessary in determining the amount of depreciation and cost recovery
deductions; (ii) make special allocations of income or deduction; (iii) amend
the provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of regulations under, to adopt conventions relating to, or to make
elections pertaining to, Section 704(c) of the Code or (y) otherwise to preserve
the uniformity of Units issued or sold from time to time; and (iv) adopt such
other conventions as are desirable in administrating the allocation rules of
subchapter K of the Code. The General Partner may adopt such conventions and
make such allocations and amendments only if, in the good faith opinion of the
General Partner, they would not have a material adverse effect on the Limited
Partners and are consistent with the principles of Section 704 and, if
applicable, Section 754 of the Code.
(c) Items of Partnership income, gain, loss, deduction and credit shall,
for federal income tax purposes, be determined on a monthly basis (or other
basis, as required or permitted by Section 706 of the Code) and shall be
allocated to the Persons who are Record Holders of Units or other Partnership
interests at such times and in such manner as determined in the reasonable
discretion of the Managing General Partner; provided, however, that gain or loss
on a sale or other disposition of all or a substantial portion of the assets of
the Partnership shall be allocated to the Persons who are Record Holders of
Units or other Partnership interests as of the close of business on the date of
such sale.
If the Internal Revenue Service, or other taxing authority, includes in the
income of the General Partner income from the Partnership in addition to any
income allocated to the General Partner under this Section 6.1, any deduction or
other tax benefit allowable to the Partnership in respect of such additional
income shall likewise be allocated to the General Partner.
-20-
<PAGE>
6.2 Preparation of Tax Returns. The General Partner shall arrange for the
preparation and timely filing of all returns of Partnership income, gains,
losses, deductions, credits and other items necessary for federal and state
income tax purposes and shall use all reasonable efforts to furnish to the
Limited Partners within 90 days after the close of the taxable year the tax
information reasonably required for federal and state income tax reporting
purposes. The classification, realization and recognition of income, gains,
losses, deductions, credits and other items shall be on the accrual method of
accounting for federal income tax purposes, unless the General Partner shall
determine otherwise in its sole discretion.
6.3 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole discretion, determine whether to make any available
election. The General Partner specifically has the authority to make an
election under Section 754 of the Code.
6.4 Tax Controversies. Subject to the provisions hereof, the General
Partner is designated as the Tax Matters Partner (as defined in Section 6231 of
the Code) and is authorized and required to represent the Partnership (at the
Partnership's expense) in connection with all examinations of the Partnership's
affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend Partnership funds for professional services and costs
associated therewith. Each Limited Partner agrees to cooperate with the General
Partner and to do or refrain from doing any and all things reasonably required
by the General Partner to conduct such proceedings.
It is acknowledged that for all taxable periods during which the Former
General Partner was a general partner of the Partnership, the Former General
Partner shall be treated as a partner entitled to notice of administrative
proceedings under Section 6223(a) of the Code. With respect to periods ending
prior to the Date of First Amendment, the General Partner shall not, without the
prior written consent of the Former General Partner, enter into any agreement
with any taxing jurisdiction to extend the applicable statute of limitations or
to agree to audit adjustments or determinations for any such periods for which
the applicable statute of limitations has not passed. The Former General
Partner will not unreasonably withhold any such consent. In addition, the
Former General Partner, at its own expense, shall have the right to participate
in any tax examination, including any and all discussions and conferences with
respect to any tax examination, for all periods ending prior to the Date of
First Amendment or with respect to later periods if such examination may affect
any tax liability of the Former General Partner for such prior periods. The
General Partner shall be liable to the Former General Partner for the amount of
any additional tax liability the Former General Partner incurs with respect to
any period ending prior to the Date of First Amendment to the extent, and only
to the extent, that (i) the Former General Partner has a right to participate in
any examination affecting such period as provided in the immediately preceding
sentence, (ii) the General Partner fails to notify the Former General Partner of
the commencement of any such examination and (iii) the additional tax liability
is incurred because such failure actually prejudices the ability of the Former
General Partner to make a valid claim in such proceeding which is not otherwise
made.
-21-
<PAGE>
6.5 Withholding. The General Partner is authorized to take any action
necessary to comply with any withholding requirements established by applicable
law. Any amounts so withheld shall be treated as amounts distributed to the
Partners for all purposes under this Agreement. The General Partner may
allocate any such amounts among the Unitholders in any manner that is in
accordance with applicable law.
ARTICLE VII
MANAGEMENT OF OPERATION OF BUSINESS;
INDEMNIFICATION
7.1 Powers of General Partner. Except as otherwise expressly provided in
this Agreement, all powers to control and manage the business and affairs of the
Partnership shall be exclusively vested in the General Partner, and no Limited
Partner shall have any power to control or manage the business and affairs of
the Partnership.
In addition to the powers now or hereafter granted a general partner of a
limited partnership under applicable law or which are granted to the General
Partner under any other provisions of this Agreement, the General Partner is
hereby authorized and empowered, in the name of and on behalf of the
Partnership, to do and perform any and all acts and things which it deems
appropriate or necessary in the conduct of the business and affairs of the
Partnership, including, without limitation, the following:
(a) to lend or borrow money, to assume, guarantee or otherwise become
liable for indebtedness and other liabilities and to issue evidences of
indebtedness;
(b) to buy, lease (as lessor or lessee), sell, mortgage, encumber or
otherwise acquire or dispose of any or all of the assets of the
Partnership;
(c) to own, use and invest the assets of the Partnership;
(d) to purchase or sell products, services and supplies;
(e) to make tax, regulatory or other filings, and to render periodic
and other reports to governmental agencies or bodies having jurisdiction
over the assets or business of the Partnership;
(f) to open, maintain and close bank accounts and to draw checks and
other orders for the payment of money;
(g) to negotiate, execute and perform any contracts, conveyances or
other instruments;
-22-
<PAGE>
(h) to distribute Partnership cash;
(i) to utilize the services of officers and employees of the General
Partner or of any other Persons and to select and dismiss employees (if
any) and outside attorneys, accountants, consultants and contractors;
(j) to maintain insurance for the benefit of the Partnership and the
Partners;
(k) to form, participate in or contribute or loan cash or property to
limited or general partnerships, joint ventures, corporations or similar
arrangements;
(l) to expand the business activities in which the Partnership is
engaged or engage in new business activities by acquisition or internal
development;
(m) to conduct litigation and incur legal expenses and otherwise deal
with or settle claims or disputes;
(n) to purchase, sell or otherwise acquire or dispose of Units or
units representing a partnership interest in NEICOP;
(o) to cause the Partnership to merge another entity into itself or
to allow the Partnership to be merged into another entity, provided that
the General Partner has first obtained the approval of a Majority of
Minority Interest for such merger if (i) the surviving entity of such
merger is a partnership and the General Partner or its Affiliates will not
hold, directly or indirectly, a majority of the general partnership
interests of such surviving entity or (ii) the surviving entity of such
merger is not a partnership and the General Partner or its Affiliates will
not hold a majority of the beneficial interests therein entitled to vote
generally; and
(p) to cause the Partnership to take all such actions as may be
necessary or appropriate to effect a Restructuring in accordance with
Section 12.4, including but not limited to entering into the Intercompany
Agreement, consummating the Dropdown and Exchange, serving as a general
partner of NEICOP, making the election provided in Section 7704(g) of the
Code and paying the tax imposed by Section 7704(g)(3)(A) of the Code, and
revoking at any time the election provided in Section 7704(g) of the Code.
7.2 Duties of General Partner. The General Partner shall manage the
business and affairs of the Partnership in the manner the General Partner deems
appropriate or necessary. Without limiting the generality of the foregoing, the
General Partner's duties shall include the following:
(a) to take possession of the assets of the Partnership;
-23-
<PAGE>
(b) to staff and operate the business of the Partnership with the
officers and employees of the General Partner or of other Persons;
(c) to render or cause to be rendered technical services and perform
or cause to be performed financial, accounting, logistical and other
administrative functions for the Partnership;
(d) to render such reports and make such periodic and other filings
as may be required under applicable federal, state and local laws, rules
and regulations;
(e) to provide or cause to be provided purchasing, procurement,
repair and other services for the Partnership; and
(f) to conduct the business of the Partnership in accordance with
this Agreement and all applicable laws, rules and regulations;
in each case in such a manner as the General Partner deems appropriate or
necessary.
7.3 Reliance by Third Parties. Notwithstanding anything to the contrary
in this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority to encumber, sell
or otherwise use in any manner any and all assets of the Partnership and to
enter into any contracts on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if it were the Partnership's sole
party in interest, both legally and beneficially. Each Limited Partner hereby
waives any and all defenses and other remedies which may be available against
such Person to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or its representatives be obligated to ascertain that the terms
of this Agreement have been complied with or to inquire into the necessity or
expedience of any act or action of the General Partner or its representatives.
Each and every certificate, document or other instrument executed on behalf of
the Partnership by the General Partner or its representatives shall be
conclusive evidence in favor of any and every Person relying thereon or claiming
thereunder that (a) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and
effect, (b) the Person executing and delivering such certificate, document or
instrument was duly authorized and empowered to do so for and on behalf of the
Partnership and (c) such certificate, document or instrument was duly executed
and delivered in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership.
7.4 Compensation and Reimbursement of the General Partner. (a) Except as
provided in this Section 7.4 or elsewhere in this Agreement, or any other
agreement contemplated or permitted hereby or thereby, the General Partner shall
not be compensated for its service as General Partner to the Partnership.
-24-
<PAGE>
(b) The General Partner shall be promptly reimbursed for all Designated
Expenses, in addition to any reimbursement as a result of indemnification in
accordance with Section 7.11. The General Partner shall determine such
Designated Expenses in any reasonable manner determined by it.
(c) The General Partner may propose and adopt without the approval of the
Limited Partners fringe benefit plans, including, without limitation, plans
comparable to those that covered employees employed by the predecessors to the
Partnership and plans involving the issuance of Units, for the benefit of
employees of the General Partner, the Partnership, any Operating Partnership, or
any of their respective Affiliates, in respect of services performed, or
obligated to be performed, directly or indirectly, for the benefit of the
Partnership or any Operating Partnership, except that the Partnership shall not
be obligated to reimburse either NEM or RTI for any costs or value associated
with any NEM Designated Units or RTI Designated Units issued pursuant to the
Restricted Unit Plan as described in Section 5.3.
7.5 Purchase or Sale of LP Units. The General Partner may, on behalf of
the Partnership, purchase or otherwise acquire or sell or otherwise dispose of
LP Units (including, but not limited to, purchases of LP Units pursuant to the
Exchange). As long as LP Units are held by the Partnership, such LP Units shall
not be considered outstanding for any purpose. The General Partner or any of its
Affiliates may also purchase or otherwise acquire or sell or otherwise dispose
of LP Units for its own account.
7.6 Partnership Funds. The funds of the Partnership shall be deposited in
such account or accounts as shall be designated by the General Partner, and
shall not be commingled with the funds of the General Partner or any of its
Affiliates. All withdrawals from or charges against such accounts shall be made
by the General Partner or by its agents, which agents may be Affiliates of the
General Partner. Funds of the Partnership may be invested as determined by the
General Partner.
7.7 Outside Activities; Contracts with Affiliates; Loans to or from
Affiliates. (a) The General Partner shall not have any business interests or
engage in any business activities except for those relating to the Partnership
and any Operating Partnership, provided that the General Partner shall be
allowed to manage its own passive investments and the investments of any related
pension fund. The General Partner shall have no duty or obligation to refer
business opportunities known by or available to it to the Partnership or any
Partner.
(b) Any Affiliate of the General Partner and any director, officer,
partner or employee of the General Partner or any of its Affiliates shall be
entitled to and may have business interests and engage in business activities in
addition to those relating to the Partnership and any Operating Partnership,
including business interests and activities in direct competition with the
Partnership and any Operating Partnership, for their own account and for the
account of others, without having or incurring any obligation to offer any
interest in such
-25-
<PAGE>
businesses or activities to the Partnership, or any Partner. Neither the
Partnership, any Operating Partnership, any of the Partners nor any other Person
shall have rights by virtue of this Agreement or the partnership relationship
governed hereby in any such business interests or in the profits or revenues
derived therefrom.
(c) By the terms of the Original Agreement, each Person who was a Partner
at any time prior to the time at which NEM contributed the NEM Contributed
Property to the Partnership approved, ratified and confirmed the execution,
delivery and performance of the Underwriting Agreement, the Conveyance Agreement
and the Partnership Admission Agreement and the transactions contemplated
thereby and agreed that the Former General Partner was authorized to execute,
deliver and perform the other agreements, acts, transactions and matters
described in the Registration Statement on behalf of the Partnership without the
approval or vote of any Limited Partners, notwithstanding any other provision of
this Agreement. The Partners hereby authorize NEIC, Inc. to exercise all such
powers which prior to the time of such contribution of NEM Contributed Property
could have been exercised by the Former General Partner, and hereby approve any
grants of Units under the Restricted Unit Plan, the Partnership's 1993 Equity
Incentive Plan, the Partnership's 1997 Equity Incentive Plan, and any other
bonus or benefit plan providing for the award of Units that may from time to
time be adopted by the General Partner.
(d) Subject to the provisions of Section 7.4(a), the General Partner and
its Affiliates may enter into contracts with, or render services to, the
Partnership or any Operating Partnership, provided that such contracts or
services are on terms that are fair and reasonable to the Partnership. The
contracts and services approved, ratified or confirmed pursuant to Section
7.7(c) shall be deemed to satisfy the terms of this Section 7.7(d).
(e) Neither the General Partner nor any of its Affiliates shall sell,
transfer or convey property to, or purchase property from, the Partnership,
directly or indirectly, except pursuant to transactions that are fair and
reasonable to the Partnership. The contracts and services approved, ratified or
confirmed pursuant to Section 7.7(c) shall be deemed to satisfy the terms of
this Section 7.7(e).
(f) The General Partner or any of its Affiliates may lend to the
Partnership funds needed by the Partnership for such periods of time as the
General Partner may determine; provided, however, that the General Partner or an
Affiliate may not charge the Partnership interest greater than the rate
(including points or other financing charges or fees) that would be charged to
the Partnership by unrelated lenders on comparable loans. The Partnership shall
reimburse the General Partner or its Affiliate, as the case may be, for any
costs incurred by the General Partner or Affiliate in connection with the
borrowing of funds obtained by such General Partner or Affiliate and loaned to
the Partnership.
(g) The Partnership may lend funds to the General Partner or any of its
Affiliates; provided, however, that the Partnership may not lend funds to the
General Partner or an
-26-
<PAGE>
Affiliate unless such funds consist of funds available after provision for
working capital and such reserves as the General Partner deems appropriate and
such loans shall bear interest at the rate (including points or other financing
charges or fees) that the General Partner would be charged by unrelated lenders
on comparable loans.
7.8 Tax Basis and Value Determinations. To the extent that the General
Partner is required pursuant to the provisions of this Agreement to establish
fair market values or allocate amounts realized, tax basis, Agreed Values or Net
Agreed Values, the General Partner shall establish such values and make such
allocations in a manner that is reasonable and fair to the Limited Partners,
taking into account all applicable laws, governmental regulations, rulings and
decisions. The General Partner may, in its sole discretion, modify or revise
such allocations in order to comply with such laws, governmental regulations,
rulings or decisions or to the extent it otherwise deems such modification or
revision appropriate or necessary. The General Partner is authorized, to the
extent deemed by it to be appropriate or necessary, to utilize the services of
an independent appraiser in establishing such values or allocations and the
General Partner shall in such cases be entitled to rely on the values or
allocations established by such independent appraiser.
7.9 Resolution of Conflicts of Interest; Standard of Care. (a) Unless
otherwise expressly provided in this Agreement or any other agreement
contemplated hereby, (i) whenever a conflict of interest exists or arises
between the General Partner or any of its Affiliates, on the one hand, and the
Partnership or any Limited Partner, on the other hand, or (ii) whenever this
Agreement or any other agreement contemplated hereby provides that the General
Partner or any of its Affiliates shall act in a manner which is, or provide
terms which are, fair and/or reasonable to the Partnership, any Operating
Partnership or any Limited Partner, the General Partner or such Affiliates shall
resolve such conflict of interest, take such action or provide such terms
considering, in each case, the relative interests of each party to such
conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles, and in the
absence of bad faith by the General Partner or such Affiliate, the resolution,
action or terms so made, taken or provided by the General Partner or such
Affiliate shall not constitute a breach of this Agreement or any other agreement
contemplated hereby or a breach of any standard of care or duty imposed hereby
or under the Delaware Act or any other applicable law, rule or regulation. The
provisions of this clause (a) shall apply to the Former General Partner and its
Affiliates with respect to resolutions of conflicts of interest, the taking of
actions and the providing of terms prior to the Date of First Amendment.
(b) Whenever this Agreement or any other agreement contemplated hereby
provides that the General Partner or any of its Affiliates is permitted or
required to make a decision (i) in its "discretion" or under a grant of similar
authority or latitude, the General Partner or such Affiliate shall be entitled
to consider only such interests and factors as it desires and shall have no duty
or obligation to give any consideration to any interest of or factors affecting
the
-27-
<PAGE>
Partnership or the Limited Partners, or (ii) in its "good faith" or under
another express standard, the General Partner or such Affiliate shall act under
such express standard and shall not be subject to any other or different
standards imposed by this Agreement, any other agreement contemplated hereby or
applicable law. The provisions of this clause (b) shall apply to the Former
General Partner and its Affiliates for decisions made prior to the Date of First
Amendment.
7.10. Other Matters Concerning the General Partner. (a) The General Partner
may rely and shall be protected in acting or refraining from acting upon any
certificate, document or other instrument believed by it to be genuine and to
have been signed or presented by the proper party or parties. The General
Partner shall not be liable to the Partnership or any other Partner and shall be
protected in acting, or refraining from acting, in good faith reliance on the
provisions of this Agreement, and the good faith exercise of any of the powers
or rights granted to the General Partner by this Agreement, including the power
to effect (or not to effect) a Restructuring as provided in Section 12.4, shall
not constitute a breach of fiduciary duty to any Partner adversely affected
thereby. The provisions of this clause (a) shall also apply to the Former
General Partner for actions taken or refrained from being taken prior to the
Date of First Amendment.
(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisors selected by it and any opinion or advice of any such Person as to
matters which the General Partner believes to be within such Person's
professional or expert competence shall be full and complete authorization and
protection with respect to any action taken or suffered or omitted by the
General Partner hereunder in good faith and in accordance with such opinion or
advice. The provisions of this clause (b) shall also apply to the Former
General Partner for any action taken or suffered or omitted prior to the Date of
First Amendment.
(c) The General Partner may exercise any of the powers granted to it by
this Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agents, and the General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith. The Former General Partner
shall not be responsible for any misconduct or negligence on the part of any
agent appointed by the Former General Partner to exercise any of the powers
granted to the Former General Partner by the Original Agreement or to perform
any of the duties of the Former General Partner imposed upon the Former General
Partner by the Original Agreement provided that such agent was appointed by the
Former General Partner in good faith.
7.11. Limited Liability; Indemnification. (a) Notwithstanding anything to
the contrary in this Agreement, and except to the extent required by applicable
law, no Indemnitee shall be liable to the Partnership or any Partner for any
action taken or omitted to be taken by such Indemnitee, provided that such
Indemnitee acted in good faith and such action or omission does not involve the
gross negligence or willful misconduct of such Indemnitee or, if the Indemnitee
-28-
<PAGE>
is the Former General Partner, the General Partner or any of their Affiliates
and the provisions of Section 7.9 apply, such Indemnitee acted or omitted to act
in a manner not violating Section 7.9. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that
an Indemnitee did not act in good faith or that an action or omission involves
gross negligence or willful misconduct or, if the Indemnitee is the Former
General Partner, the General Partner or any of their Affiliates and the
provisions of Section 7.9 apply, that the Indemnitee acted or omitted to act in
a manner violating Section 7.9.
(b) The Partnership shall, to the fullest extent permitted by applicable
law, indemnify each Indemnitee against expenses (including legal fees and
expenses), judgments, fines and amounts paid in settlement, actually and
reasonably incurred by such Indemnitee, in connection with any threatened,
pending or completed claim, demand, action, suit or proceeding to which such
Indemnitee was or is a party or is threatened to be made a party, by reason of
(i) such Indemnitee's status as the General Partner, any former General Partner,
any Affiliate of the General Partner or any former General Partner, any Person
who is or was a director, partner, officer, employee or agent of the General
Partner, any former General Partner, or any such Affiliate, or any Person who is
or was serving at the request of the General Partner, any former General
Partner, any Operating Partnership or any such Affiliate as a director, officer,
partner, trustee, employee or agent of another Person or (ii) any action taken
or omitted to be taken by such Indemnitee in any capacity referred to in clause
(i) of this Section 7.11(b), relating to this Agreement or the property,
business affairs or management of the Partnership or any Operating Partnership
(provided the Indemnitee acted in good faith and the act or omission which is
the basis of such claim, demand, action, suit or proceeding does not involve the
gross negligence or wilful misconduct of such Indemnitee or, if the Indemnitee
is the Former General Partner, the General Partner or any of their Affiliates
and the provisions of Section 7.9 apply, such Indemnitee acted or omitted to act
in a manner not violating Section 7.9). The indemnification provided by this
Section 7.11(b) shall include the right to advancement of expenses pursuant to
Section 7.11(c). In the sole discretion of the General Partner, the Partnership
may, but shall not be required to, treat any Operating Partnership, any
Affiliate of any Operating Partnership, or any such Person who is or was a
director, officer, employee or agent of any Operating Partnership or Affiliate
thereof as an Indemnitee for the purposes of this Section 7.11(b) with respect
to any claim, demand, action, suit or proceeding covered hereby.
(c) Expenses (including legal fees and expenses) incurred in defending any
claim, demand, action, suit or proceeding subject to Section 7.11 (b) shall be
paid by the Partnership in advance of the final disposition of such claim,
demand, action, suit or proceeding upon receipt of an undertaking (which need
not be secured) by or on behalf of the Indemnitee to repay such amount if it
shall ultimately be determined, as permitted by the Delaware Act or other
applicable law, that the Indemnitee is not entitled to be indemnified by the
Partnership as authorized hereunder.
-29-
<PAGE>
(d) The indemnification provided by Section 7.11(b) shall be in addition
to any other rights to which an Indemnitee may be entitled, and shall continue
as to an Indemnitee who has ceased to serve in a capacity for which the
Indemnitee is entitled to indemnification and shall inure to the benefit of the
heirs, successors, assigns, administrators and personal representatives of the
Indemnitee.
(e) To the extent commercially reasonable, the Partnership shall purchase
and maintain insurance on behalf of the Indemnitees against any liability which
may be asserted against or expense which may be incurred by an Indemnitee in
connection with the Partnership's activities, whether or not the Partnership
would have the power to indemnify an Indemnitee against such liability under the
provisions of this Agreement.
(f) An Indemnitee shall not be denied indemnification in whole or in part
under Section 7.11(b) because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.
(g) The provisions of this Section 7.11 are for the benefit of the
Indemnitees and the heirs, successors, assigns, administrators and personal
representatives of the Indemnitees and shall not be deemed to create any rights
for the benefit of any other Persons.
(h) Notwithstanding any other provision of this Agreement, the
indemnification provisions of this Agreement shall not be amended to limit the
right of any Person to indemnification for action, or failure to act, during any
period prior to the amendment.
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
8.1 Limitation of Liability. The Limited Partners, in their capacity as
Limited Partners, shall have no liability under this Agreement (including,
without limitation, liability under Section 7.11).
8.2 Management of Business. No Limited Partner shall, in its capacity as
a Limited Partner, take part in the operation, management or control (within the
meaning of the Delaware Act) of the Partnership's business, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership. The transaction of any such business by a
director, partner, officer, employee or agent of a General Partner or an
Affiliate of the General Partner in such Person's capacity as such (whether or
not such Person is also a Limited Partner) shall not affect, impair or eliminate
the limitations on the liability of the Limited Partners under this Agreement.
-30-
<PAGE>
8.3 Outside Activities. Limited Partners shall be entitled to and may
have business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities in
direct competition with the Partnership or any Operating Partnership. Neither
the Partnership, any Operating Partnership, any of the other Partners nor any
other Person shall have any rights by virtue of this Agreement or the
partnership relationship created hereby in any business ventures of any Limited
Partner or in the profits and revenues derived therefrom.
8.4 Return of Capital. No Limited Partner shall be entitled to the
withdrawal or return of his Capital Contribution, except to the extent, if any,
that distributions made pursuant to this Agreement or upon termination of the
Partnership may be considered as such by law and then only to the extent
provided for in this Agreement.
8.5 Rights of Limited Partners Relating to the Partnership. In addition
to other rights provided by this Agreement or by applicable law, each Limited
Partner shall have the right for a proper purpose reasonably related to such
Limited Partner's interest in the Partnership, upon reasonable written demand
and at such Limited Partner's own expense:
(a) to obtain true and full information regarding the status of the
business and financial condition of the Partnership;
(b) promptly after becoming available, to obtain a copy of the
Partnership's federal and state income tax returns for each year;
(c) to obtain a current list of the name and address of each Partner
as set forth in the Units Register;
(d) to obtain a description and statement of the Net Agreed Value of
any Capital Contribution made or agreed to be made by each Partner, and
the date on which such Partner became a Partner;
(e) to obtain a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with executed copies of
any powers of attorney pursuant to which this Agreement, the Certificate of
Limited Partnership and all amendments thereto have been executed; and
(f) to obtain such other information regarding the affairs of the
Partnership as may be just and reasonable; provided, however, that the
General Partner may keep confidential from the Limited Partners or any
Limited Partner, for such period of time as the General Partner deems
reasonable, any information which the General Partner reasonably believes
to be in the nature of trade secrets or other information the disclosure of
which the General Partner in good faith believes could damage the
Partnership or its business or be in violation of applicable law,
including, without
-31-
<PAGE>
limitation, federal securities law, or which the Partnership is required by
agreements with third parties to keep confidential.
Notwithstanding the provisions of this Section 8.5, the General Partner
may, in its sole discretion, adopt additional standards with respect to access
to Partnership books and records.
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
9.1 Books, Records and Accounting. The General Partner shall keep or
cause to be kept books and records with respect to the Partnership's business,
which books and records shall at all times be kept at the principal office of
the Partnership. Any books and records maintained by the Partnership in the
regular course of business, including the Units Register, books of account and
records of Partnership proceedings, may be kept on, or be in the form of, punch
cards, disks, magnetic tape, photographs, micrographics or any other information
storage device, provided that the records so kept are convertible into clearly
legible written form within a reasonable period of time. The books of the
Partnership shall be maintained, for financial reporting purposes, on the
accrual basis, or on a cash basis adjusted periodically to an accrual basis, as
the General Partner shall determine in its sole discretion, in accordance with
generally accepted accounting principles and applicable law.
9.2 Fiscal Year. The fiscal year of the Partnership for financial
reporting purposes shall be the calendar year, unless the General Partner shall
determine otherwise in its sole discretion.
9.3 Reports. (a) As soon as practicable, but in no event later than 120
days after the close of each fiscal year, the General Partner shall cause to be
prepared as of the last day of that fiscal year and promptly mailed to each
Record Holder of LP Units reports containing financial statements of the
Partnership for the fiscal year, presented in accordance with generally accepted
accounting principles, including a balance sheet, statement of income, statement
of Partners' capital and statement of changes in financial position, such
statements to be audited by a nationally recognized firm of independent public
accountants selected by the General Partner.
(b) As soon as practicable, but in no event later than 45 days after the
close of each calendar quarter, except the last calendar quarter of each fiscal
year, the General Partner shall cause to be prepared as of the last day of that
calendar quarter and promptly mailed to each Record Holder of LP Units a
quarterly report for the calendar quarter containing such financial and other
information as the General Partner deems appropriate.
-32-
<PAGE>
ARTICLE X
ISSUANCE OF LP CERTIFICATES; TRANSFER
AND EXCHANGE OF LP UNITS
10.1 Initial Issuance of LP Certificates. Upon the issuance of LP Units to
any Person, the Partnership will issue one or more LP Certificates in the name
of such Person evidencing the number of such LP Units being so issued. LP
Certificates shall be executed on behalf of the Partnership by the General
Partner. No LP Certificate shall be valid for any purpose until manually or
facsimile countersigned by the Transfer Agent.
10.2 Registration, Registration of Transfer and Exchange and Restrictions
on Transfer and Exchange. (a) The Partnership will cause to be kept a register
(the "Units Register") in which, subject to such reasonable regulations as it
may prescribe and subject to the provisions of Section 10.2(b), the Partnership
will provide for the registration of LP Units and of transfers of such LP Units.
The Transfer Agent is hereby appointed registrar for the purpose of registering
LP Units and transfers of such LP Units as herein provided.
Upon surrender for registration of transfer or exchange of any LP
Certificate, and subject to the provisions of Section 10.2(b), the General
Partner on behalf of the Partnership will execute, and the Transfer Agent will
countersign and deliver, in the name of the holder or the designated transferee
or transferees, as required pursuant to the holder's instructions, one or more
new LP Certificates evidencing the same aggregate number of LP Units as did the
LP Certificate so surrendered.
(b) Every LP Certificate surrendered for registration of transfer or
exchange shall be duly endorsed on the reverse side thereof, or be accompanied
by a written instrument of transfer in form satisfactory to the General Partner
or the Transfer Agent, as the case may be, duly executed, in either case by the
holder thereof or such holder's attorney duly authorized in writing. Every LP
Certificate surrendered for registration of transfer shall be duly accepted on
the reverse side thereof, or be accompanied by a written instrument of
acceptance to the same effect in form satisfactory to the General Partner or the
Transfer Agent, as the case may be, duly executed, in either case by the
transferee or such transferee's attorney duly authorized in writing. As a
condition to the issuance of any new LP Certificate under this Section 10.2, the
General Partner may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto.
(c) The Partnership may cause to be imposed, imprinted or stamped on any
LP Certificate one or more legends or restrictions on transfer which the General
Partner, in its sole discretion, believes may be necessary or advisable to
comply with this Agreement or with federal or state securities laws or other
applicable laws, rules, regulations or agreements.
-33-
<PAGE>
10.3 Mutilated, Destroyed, Lost or Stolen LP Certificates. (a) If any
mutilated LP Certificate is surrendered to the Transfer Agent, the General
Partner on behalf of the Partnership shall execute and the Transfer Agent shall
countersign and deliver in exchange therefor a new LP Certificate evidencing the
same number of LP Units as did the LP Certificate so surrendered.
(b) If there shall be delivered to the General Partner and the Transfer
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any LP Certificate and (ii) such security or indemnity as may be required by
them to save each of them and any of their agents harmless, then, in the absence
of notice to the General Partner or the Transfer Agent that such LP Certificate
has been acquired by a bona fide purchaser, the General Partner on behalf of the
Partnership shall execute and upon its request the Transfer Agent shall
countersign and deliver, in lieu of any such destroyed, lost or stolen
Certificate, a new LP Certificate evidencing the same number of LP Units as did
the LP Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new LP Certificate under this
Section 10.3, the General Partner may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Transfer
Agent) connected therewith.
(d) Every new LP Certificate issued pursuant to this Section 10.3 in lieu
of any destroyed, lost or stolen LP Certificate shall evidence an original
additional Partnership Interest in the Partnership, whether or not the
destroyed, lost or stolen LP Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other LP Units duly issued hereunder.
10.4 Persons Deemed Owners. Prior to due presentment of any LP Certificate
for registration of transfer and satisfaction of the requirements of Section
10.2(b) with respect thereto, (a) the Partnership, the General Partner, the
Transfer Agent and any agent of any of the foregoing may deem and treat the
Record Holder as the absolute owner thereof and of the LP Units evidenced
thereby for all purposes whatsoever and (b) a transferee shall not be entitled
to distributions or allocations or any other rights in respect of the LP Units
evidenced thereby other than the right to further transfer such LP Units.
ARTICLE XI
TRANSFER OF GP UNITS
11.1 Transfer of GP Units. The General Partner may not transfer any GP
Units unless (a) all of its GP Units are being transferred and the transferee
assumes all of the rights and obligations of the General Partner under this
Second Amended and Restated Agreement, (b) the transfer (i) is to an Affiliate
of the General Partner or (ii) is in connection with the General Partner's
merger or consolidation with, or a transfer of all or substantially all of the
-34-
<PAGE>
General Partner's assets to, another Person, and such merger or consolidation or
transfer of all or substantially all of the General Partner's assets is approved
by holders of a majority of Units other than Units held by the General Partner,
the proposed purchaser or any of their Affiliates and (c) the Partnership
receives an Opinion of Counsel that such transfer would not result in the loss
of limited liability of any Limited Partner or cause the Partnership or any
Operating Partnership to be treated as an association taxable as a corporation
for federal income tax purposes, provided, however, that the exchange by the
General Partner of GP Units for LP Units or of LP Units for GP Units pursuant to
Section 4.2 shall not constitute a transfer of GP Units for purposes of this
Section.
11.2 Successor General Partner. Any transferee of GP Units pursuant to
Section 11.1 shall automatically be admitted to the Partnership as the successor
General Partner, and the transferor of such GP Units shall automatically cease
to be the General Partner, effective at the time provided in Section 12.3. Any
such successor General Partner shall continue the business of the Partnership.
11.3 Admission of Additional General Partner. With the approval of a
Majority Interest and a Majority of Minority Interest, any Person may be
admitted as a general partner, effective upon the filing with the Secretary of
State of the State of Delaware of an amendment to the Certificate of Limited
Partnership to reflect the admission of the new approved partner as a general
partner. No such approval shall be required to admit as a general partner any
Affiliate of the General Partner. Notwithstanding any provision of this Section
11.3, a successor General Partner shall be admitted to the Partnership upon the
approvals required by Sections 13.1, 14.1 or 14.2.
ARTICLE XII
ADMISSION OF INITIAL AND SUBSTITUTED
LIMITED PARTNERS AND SUCCESSOR GENERAL PARTNER
12.1 Admission of Initial Limited Partners. At and as of the Time of
Delivery, the initial Record Holders of LP Units issued pursuant to Section 2.6
or 4.1 automatically became Limited Partners.
12.2 Admission of Substituted Limited Partners. A transferee of LP Units
shall automatically be admitted to the Partnership as a Limited Partner (and the
transferor of such LP Units shall, if such transferor is assigning all of such
transferor's LP Units, automatically cease to be a Limited Partner) at and as of
the time the transfer is registered on the Units Register pursuant to Section
10.2.
12.3 Admission of Successor General Partner. A successor General Partner
approved pursuant to Section 13.1 or the transferee of all of the GP Units
pursuant to Section 11.1 shall be admitted to the Partnership as the successor
General Partner, effective as of the date an
-35-
<PAGE>
amendment or restatement of the Certificate of Limited Partnership is filed with
the Secretary of State of the State of Delaware effecting such substitution,
provided, however, that no such successor shall be so admitted to the
Partnership until it has agreed in writing to assume the former General
Partner's obligations under this Agreement. This Agreement and the Certificate
of Limited Partnership shall be amended as appropriate to reflect the
termination of the former General Partner as a general partner and the admission
of the successor General Partner. Any successor General Partner shall continue
the business of the Partnership.
12.4 Restructuring. (a) Power of General Partner to Effect a
Restructuring. If the General Partner at any time shall have reason to believe
that there is a material possibility that either a Loss of Partnership Status or
a Tax Realization Event will occur at any future time, then the General Partner
in its absolute discretion may (but shall not be required to) take any and all
actions that the General Partner deems necessary, appropriate or desirable to
accomplish any one or more Restructurings. The General Partner shall have full
and complete power and authority to take any and all such actions not prohibited
by law (including without limitation the power and authority to effect any
amendments to this Agreement other than Amendments that, pursuant to Section
15.3 of this Agreement, may be effected only with the approval of a Ninety-Five
Percent Interest), all without obtaining consent thereto or approval thereof by
any other Partner, and each Partner hereby confers upon the General Partner a
power of attorney, coupled with an interest, to take any and all such actions.
Such actions authorized pursuant to this Section 12.4 include, but are not
limited to:
(i) Creation of Affiliated Entities. The creation of one or more
entities (including, without limitation, limited partnerships, general
partnerships, corporations, trusts and limited liability companies)
controlled by the General Partner, Affiliates of the General Partner or
Affiliates of the Partnership.
(ii) Asset and Business Transfers. The transfer of all or part of the
businesses or assets of the Partnership to an existing or newly-organized
entity or entities in exchange for interests in such entity or entities,
which interests may be subject to substantial restrictions on transfer.
(iii) Initiation of Mandatory Exchanges. The initiation of exchange or
redemption transactions which will permit and may automatically effect,
without the consent of any Partner, the exchange of some or all outstanding
LP Units for interests in an existing or new entity holding a direct or
indirect interest in all or part of the businesses or assets of the
Partnership.
(iv) Imposition of Transfer Restrictions. The imposition of
substantial restrictions on the transferability of some or all of the LP
Units (or interests in an entity or entities that are successors to all or
any part of the businesses or assets of the Partnership) for both limited
and extended periods of time, which restrictions may
-36-
<PAGE>
provide for damages (including forfeiture) for attempted transfer in
violation of such restrictions.
Without limiting the authority of the General Partner provided above in this
Section 12.4(a) to effect a Restructuring at any future time, unless the General
Partner believes that a Loss of Partnership Status would otherwise occur prior
to January 1, 1998, no Restructuring may be effected which will, prior to
December 31, 1997, (1) restrict the transferability of LP Units held by the
Public Partners, (2) cause a Loss of Partnership Status, or (3) restrict the
ability of non-Public Partners to convert LP Units into interests in any Public
Entity or to convert interests in any New Operating Entity into LP Units. In
addition, the General Partner may not, in effecting a Restructuring, subject any
holder of LP Units to liability to Partnership creditors without such holder's
consent.
(b) Considerations Relating to Restructurings. If the General Partner in
its discretion determines to effect a Restructuring, then, in determining the
form of such Restructuring, the General Partner shall seek to accomplish thereby
the following results (the "Restructuring Objectives") in the following order of
priority, it being understood that if accomplishment of any Restructuring
Objective is, in the sole judgment of the General Partner, incompatible or
inconsistent with the achievement of a Restructuring Objective having a higher
priority as set forth below, then the General Partner shall not be required to
seek to accomplish such Restructuring Objective having a lower priority as set
forth below:
(i) First Priority Restructuring Objective. The avoidance or
prevention of any Tax Realization Event, provided that, if MetLife in
its discretion so notifies the General Partner in writing, the General
Partner may disregard this Restructuring Objective in determining the
form of any Restructuring.
(ii) Second Priority Restructuring Objective. The avoidance or
prevention of any Loss of Partnership Status with respect to the
interests of the non-Public Partners in (A) the Partnership or (B) any
one or more entities that, as a result of the Restructuring, become
the owner of all or any substantial part of the businesses or assets
owned by the Partnership prior to the Restructuring (each such entity,
a "New Operating Entity").
(iii) Third Priority Restructuring Objective. The preservation,
to the extent reasonably practicable, of a public market for the
interests of the Public Partners in either (A) the Partnership or (B)
any entity, interests in which are, in connection with any
Restructuring, issued to Public Partners of the Partnership in
exchange for, upon conversion of or otherwise in respect of Units of
the Partnership (a "Public Entity").
(iv) Fourth Priority Restructuring Objective. The preservation,
to the extent the General Partner deems consistent with the status of
the Partnership or
-37-
<PAGE>
a Public Entity as a partnership for federal income tax purposes, of
the ability of Partners that are not Public Partners to dispose of all
or part of their interests in the Partnership, or any Public Entity in
the public market (including such of their interests in the
Partnership as they may have transferred to any New Operating Entity).
(v) Fifth Priority Restructuring Objective. Affording each
Public Partner (to the extent reasonably practicable, and only to the
extent that the General Partner, in its sole discretion, deems
consistent and compatible with the other Restructuring Objectives) a
choice between ownership of interests in an entity for which a public
market exists and ownership of interests in an entity that is treated,
for federal income tax purposes, as a partnership (or other pass-
through entity that is not taxable as a corporation).
(c) Provisions Effective Notwithstanding Contrary Provisions. The
provisions of this Section 12.4 shall be effective notwithstanding any provision
to the contrary contained elsewhere in this Agreement, other than Section 15.3
hereof.
(d) Bargained-For Condition Etc. It is understood and agreed by all
Partners that the power, authority and discretion of the General Partner to
effect (or not to effect) one or more Restructurings is a bargained-for and
material condition of the willingness of the General Partner and its Affiliates
to enter into the Partnership Admission Agreement, and of the obligation of the
General Partner and its Affiliates to consummate the transactions contemplated
by the Partnership Admission Agreement. It is further understood and agreed by
all Partners that the power, authority and discretion of the General Partner to
effect (or not to effect) one or more Restructurings pursuant to this Section
12.4 includes the power, authority and discretion to effect one or more
Restructurings that result in benefits to one or more Partners (including
without limitation the General Partner or its Affiliates) that are not enjoyed
by all Partners, and may result in disadvantageous consequences to one or more
Partners that are not suffered by all Partners (including without limitation the
General Partner or its Affiliates), and that no Partner shall have any cause of
action against, or right to receive any compensation from, the Partnership, the
General Partner, any Affiliate of the General Partner, or any other Partner, as
a result of or in respect of (i) any Restructuring or the disparate effects
thereof on any one or more Partners, (ii) the General Partner's failure to
effect any one or more Restructurings or (iii) the General Partner's
determination to effect a particular Restructuring or Restructurings instead of
any other Restructuring or Restructurings.
(e) Release of General Partner. To the fullest extent permitted by
applicable law (including without limitation Section 17-1101(d) of the Delaware
Act), the Partnership and each Partner hereby releases the General Partner and
its directors, officers, employees and Affiliates from any and all duties
(including fiduciary duties) and liabilities that any of them may otherwise
have, at law, in equity or under this Agreement, with respect to any and all
actions that the General Partner may in good faith take or omit to take in
connection with or
-38-
<PAGE>
relating in any way to any Restructuring or Restructurings or any determination
to effect or not effect any Restructuring or Restructurings.
(f) Release of Former General Partner. To the fullest extent permitted by
applicable law (including without limitation Section 17-1101(d) of the Delaware
Act), the Partnership and each Partner hereby releases the General Partner and
its directors, officers, employees and affiliates from any and all duties
(including fiduciary duties) and liabilities that any of them may otherwise have
or have had, at law, in equity or under this Agreement or the Original
Agreement, with respect to any and all actions that the Former General Partner
took or omitted to take in connection with proposing the adoption of this
Section 12.4.
ARTICLE XIII
REMOVAL OF THE GENERAL PARTNER
13.1 Removal of the General Partner. (a) NEIC, Inc. agrees to continue to
act as General Partner of the Partnership until such date as the Partnership
shall terminate pursuant to Articles XII or XIV subject to its prior removal as
General Partner pursuant hereto and subject to its right to transfer all of its
GP Units pursuant to Section 11.1.
(b) The General Partner may be removed only by an Eighty Percent Interest,
or, if the Partnership Interest of the General Partner, together with its
Affiliates, is less than 33 1/3% of the outstanding Units, the General Partner
may be removed by a Majority Interest, but in either case only if (i) in the
event that the General Partner or one of its Affiliates is the managing general
partner of NEICOP, the General Partner or such Affiliate has been (or is
simultaneously) removed as the managing general partner of NEICOP by the
partners of NEICOP in accordance with Section 13.1(b) of the agreement of
limited partnership of NEICOP, (ii) a successor General Partner is approved by a
Majority Interest, and (iii) the Partnership shall have received an Opinion of
Counsel that the removal of the General Partner and the approval of a successor
General Partner will not result in the loss of limited liability of any Limited
Partner or cause the Partnership or any Operating Partnership to be treated as
an association taxable as a corporation for federal income tax purposes. Such
removal shall be effective upon the admission of the successor General Partner
pursuant to Section 12.3. The Person so approved (or its designated Affiliates)
shall become the successor general partner or partners of any Operating
Partnership.
13.2 Sale of Former General Partner's Interest. If a successor General
Partner is approved pursuant to Section 13.1 or 14.2 or the proviso to Section
14.1, such successor shall purchase the GP Units of the former General Partner
for an amount in cash or such other form of consideration acceptable to the
former General Partner in its sole discretion with a fair market value equal to
the fair market value of such GP Units or as otherwise agreed, determined as of
the date the successor General Partner is admitted pursuant to Section 12.3,
provided, however, that the General Partner shall have the right to exchange a
portion of its GP
-39-
<PAGE>
Units pursuant to Section 4.2. The conversion of the Former General Partner's GP
Units into LP Units and the admission of WP pursuant to the Partnership
Admission Agreement did not require any purchase of Units by any person from the
Former General Partner. Such fair market value shall be determined by agreement
between the former General Partner and its successor or, failing agreement
within 30 days after the date the successor General Partner is so admitted, by a
firm of independent appraisers jointly selected by the former General Partner
and its successor (or, if the former General Partner and its successor cannot
agree on the selection of such a firm within 45 days after the date the
successor General Partner is so admitted, by a firm of independent appraisers
selected by two firms, one of which will be selected by the former General
Partner and the other of which will be selected by the successor).
ARTICLE XIV
DISSOLUTION AND LIQUIDATION
14.1 Dissolution. The Partnership shall be dissolved, and its affairs
shall be wound up, upon:
(a) bankruptcy or dissolution of the sole or last remaining General
Partner, or any other event that results in the General Partner ceasing to
be a general partner in the Partnership (other than by reason of removal
pursuant to Section 13.1 or a transfer pursuant to Section 11.1);
(b) an election by the General Partner to dissolve the Partnership
made pursuant to Section 12.4; or
(c) an election by the General Partner to dissolve the Partnership
which is approved by a Majority Interest; provided, however, that the
Partnership shall not be dissolved upon an event described in Section
14.1(a) if, within 90 days of such event, all Partners agree in writing to
continue the business of the Partnership and to the appointment of a
successor General Partner.
For purposes of this Section 14.1, bankruptcy of the General Partner shall
be deemed to have occurred when (i) it commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect, (ii) it seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for it or for
all or any substantial part of its properties, (iii) it is adjudged a bankrupt
or insolvent, or has entered against it a final and nonappealable order for
relief, under any bankruptcy, insolvency or similar law now or hereafter in
effect, (iv) it executes and delivers a general assignment for the benefit of
its creditors, (v) it files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in
-40-
<PAGE>
any involuntary proceeding of the nature described in clause (i) above, or (vi)
(A) any involuntary proceeding of the nature described in clause (i) above has
not been dismissed 120 days after the commencement thereof or (B) the
appointment without its consent or acquiescence of a trustee, receiver or
liquidator for it or for all or any substantial part of its properties has not
been vacated or stayed within 90 days of such appointment, or (C) such
appointment has been stayed but is not vacated within 90 days after the
expiration of any such stay.
14.2 Reconstitution. Upon dissolution of the Partnership in accordance
with Section 14.1(a), and a failure of all Partners to agree to continue the
business of the Partnership and to the appointment of a successor General
Partner as provided in the proviso to Section 14.1, then within 180 days after
the event described in Section 14.1(a), a Majority Interest may elect to
reconstitute the Partnership and continue its business by forming a new limited
partnership on terms identical to those set forth in this Agreement and having
as a general partner a Person approved by a Majority Interest. Upon any such
election by a Majority Interest, all Partners shall be bound thereby and shall
be deemed to have consented thereto. Unless such an election is made within such
180-day period, the Partnership shall conduct only activities necessary to wind
up its affairs. If such an election is made within such 180-day period, then (a)
the reconstituted partnership shall continue until dissolved in accordance with
this Article XIV and (b) all necessary steps shall be taken to cancel this
Agreement and the Certificate of Limited Partnership and to enter into a new
partnership agreement and certificate of limited partner ship, and the successor
general partner may for this purpose exercise the powers of attorney granted the
General Partner pursuant to this Agreement; provided, however, that the right of
a Majority Interest to reconstitute and to continue the business of the
Partnership shall not exist and may not be exercised unless the Partnership has
received an Opinion of Counsel that (i) the exercise of the right would not
result in the loss of limited liability of any Limited Partner and (ii) neither
the Partnership nor the reconstituted partnership would be treated as an
association taxable as a corporation for federal income tax purposes.
14.3 Liquidation. Upon dissolution of the Partnership, unless the
Partnership is reconstituted pursuant to Section 14.2, the General Partner, or
in the event the General Partner has been removed or dissolved or become
bankrupt (as defined in Section 14.1), a liquidator or liquidating committee
approved by a Majority Interest shall be the liquidator of the Partnership,
which may be the General Partner (the "Liquidator"). The Liquidator (if other
than the General Partner) shall be entitled to receive such compensation for its
services as may be approved by a Majority Interest. The Liquidator shall agree
not to resign at any time without 15 days' prior written notice and (if other
than the General Partner) may be removed at any time, with or without cause, by
notice of removal approved by a Majority Interest. Upon dissolution,
resignation or removal of the Liquidator, a successor and substitute Liquidator
(who shall have and succeed to all rights, powers and obligations of the
original Liquidator) shall, within 30 days thereafter, be approved by a Majority
Interest. Except as expressly provided in this Article XIV, the Liquidator
approved in the manner provided herein shall have and may exercise, without
further authorization or approval of any of the parties hereto, all of
-41-
<PAGE>
the powers conferred upon the General Partner under the terms of this Agreement
(but subject to all of the applicable limitations, contractual and otherwise,
upon the exercise of such powers, other than the restrictions set forth in
Article XVII) to the extent appropriate or necessary in the good faith judgment
of the Liquidator to carry out the duties and functions of the Liquidator
hereunder for and during such period of time as shall be reasonably required in
the good faith judgment of the Liquidator to complete the winding-up and
liquidation of the Partnership as provided for herein. The Liquidator shall
liquidate the assets of the Partnership and apply and distribute the proceeds of
such liquidation in the following order of priority, unless otherwise required
by mandatory provisions of applicable law:
(a) to creditors of the Partnership (including Partners); and
(b) to the Partners, in proportion to and to the extent of the
positive balances in their respective Capital Accounts;
provided, however, that the Liquidator may place in escrow a reserve of cash or
other assets of the Partnership for contingent, conditional, or unmatured claims
and obligations known to the Partnership and all claims and obligations known to
the Partnership but for which the identity of the claimant is unknown in an
amount determined by the Liquidator to be appropriate for such purposes.
14.4 Distribution in Kind. Notwithstanding the provisions of Section 14.3
requiring the liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, if on dissolution of the Partnership the
Liquidator determines that an immediate sale of part or all of the Partnership's
assets would be impractical or would cause undue loss to the Partners, the
Liquidator may, in its sole discretion, defer for a reasonable time the
liquidation of any assets except those necessary to satisfy liabilities of the
Partnership and may, in its sole discretion, distribute to the Partners, or to
specific classes of Partners, as tenants in common, in lieu of cash, and as
their interests may appear in accordance with the provisions of Section 14.3(b),
undivided interests in such Partnership assets as the Liquidator deems not
suitable for liquidation. Any distributions in kind shall be subject to such
conditions relating to the disposition and management thereof as the Liquidator
deems reasonable and equitable and to any joint ownership agreements or other
agreements governing the ownership and operation of such properties at such
time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
14.5 Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership property pursuant to Sections 14.3
and 14.4, the Partnership shall be terminated, and the Liquidator (or the
Limited Partners if necessary) shall cause the cancellation of the Certificate
of Limited Partnership and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the State of Delaware and shall
take such other actions as may be necessary to terminate the Partnership.
-42-
<PAGE>
14.6 Return of Capital. The General Partner shall not be personally liable
for the return of the Capital Contributions of the Limited Partners, or any
portion thereof, it being expressly understood that any such return shall be
made solely from Partnership assets.
14.7 Waiver of Partition. Each Partner hereby waives any rights to
partition of the Partnership property.
ARTICLE XV
AMENDMENT OF PARTNERSHIP AGREEMENT
15.1 Amendments Which May be Adopted Solely by the General Partner.
Subject to Section 15.2 and Section 15.3, the General Partner may amend any
provision of this Agreement without the approval of any Limited Partner, and may
execute, swear to, acknowledge, deliver, file and record whatever documents may
be required in connection therewith, to reflect:
(a) a change in the name of the Partnership, in the location of the
principal place of business of the Partnership or in the registered office
or registered agent of the Partnership;
(b) a change that the General Partner deems appropriate or necessary
to (i) qualify, or continue the qualification of, the Partnership as a
limited partnership (or a partnership in which the Limited Partners have
limited liability) under the laws of any state or jurisdiction or (ii)
ensure that neither the Partnership nor any Operating Partnerships will be
treated as an association taxable as a corporation for federal income tax
purposes;
(c) a change to divide outstanding Units into a greater number of
Units, to combine outstanding Units into a smaller number of Units, or to
reclassify Units in a manner that, in the good faith opinion of the General
Partner, does not adversely affect any class of Limited Partners in any
material respect;
(d) a change that the General Partner in its sole discretion deems
appropriate or necessary to (i) satisfy any requirements, conditions or
guidelines contained in any order, rule or regulation of any federal or
state agency or contained in any federal or state statute or (ii)
facilitate the trading of any Units or comply with any rule, regulation,
requirement, condition or guideline of any National Securities Exchange on
which any Units are or will be listed or admitted to trading, or NASDAQ if
any Units are or will be quoted on NASDAQ;
(e) a change that is appropriate or necessary, as stated in an
Opinion of Counsel, to prevent the Partnership, any Operating Partnership,
the General Partner, its
-43-
<PAGE>
Affiliates and their respective directors and officers from in any manner
being subjected to the provisions of the Investment Company Act of 1940,
the Investment Advisers Act of 1940, or "plan asset" regulations adopted
under the Employee Retirement Income Security Act of 1974, as amended,
whether or not substantially similar to plan asset regulations currently
applied or proposed by the United States Department of Labor;
(f) a change that is required or contemplated by any provision of
this Agreement, including, without limitation, Sections 4.3, 12.3 and 12.4;
(g) a change allowing for the operation of any and all of the
activities of the Partnership through one or more Operating Partnerships;
(h) a change that in the good faith opinion of the General Partner
does not adversely affect the Limited Partners in any material respect; or
(i) any changes or events similar to the foregoing.
15.2 Other Amendments. Amendments to this Agreement may be proposed only
by the General Partner. Subject to Section 15.3, a proposed amendment (other
than amendments adopted pursuant to Section 4.3(b) or Section 15.1) shall be
effective only when approved by a Majority Interest, provided, however, that any
amendment which alters the relative rights, powers and duties of outstanding GP
Units and LP Units such that the equivalence of the economic interests of the
Units is affected shall be effective only when approved by an Eighty Percent
Interest, including the General Partner (additional issuances of LP Units will
not be deemed to alter the equivalence of the economic interests of the Units);
and, provided, further that the approval of a Majority of Minority Interest
shall be required for any amendment to Section 12.4. The General Partner shall
notify all Limited Partners upon final adoption of any proposed amendment.
15.3 Amendment Requirements. Notwithstanding the provisions of Sections
15.1 and 15.2, (i) the approval of a Ninety-Five Percent Interest shall be
required for any amendment unless the Partnership has received an Opinion of
Counsel that such amendment would not result in the loss of limited liability of
any Limited Partner or result in the Partnership or any Operating Partnership
being treated as an association taxable as a corporation for federal income tax
purposes, (ii) no provision of this Agreement which establishes a percentage of
the Limited Partners required to take or approve any action shall be amended in
any respect which would have the effect of reducing the voting requirement,
unless such amendment is approved by at least such percentage of Limited
Partners and (iii) this Section 15.3 shall be amended only with the approval of
a Ninety-Five Percent Interest.
15.4 Limitation of Voting Power of Certain LP Unit Holders. (a) For
purposes of this Section 15.4, the following words have the meanings indicated:
-44-
<PAGE>
"Associate" means, with respect to any Person, (i) any other Person
(other than the Partnership or a Subsidiary of the Partnership) of which
such Person is an officer, director, trustee, partner or employee or is,
directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities; (ii) any trust or other estate in which such Person
serves as a trustee or in a similar fiduciary capacity; and (iii) any
relative or spouse of such Person, or any relative of such spouse, who has
the same home as such Person.
A Person shall be deemed to "own" any Voting Units:
(A) that such Person owns directly, whether or not of record; or
(B) that it has the right to acquire pursuant to any agreement
or understanding or upon exercise of conversion rights, warrants or options
or otherwise; or
(C) that are beneficially owned, directly or indirectly, by any
other Person who is not an Affiliate or Associate of such Person (including
any Voting Units which such other Person has the right to acquire pursuant
to any agreement or understanding or upon exercise of conversion rights,
warrants or options or otherwise) with whom such Person has any agreement
or arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of Voting Units; provided, however, that (1) directors,
officers, and employees of the General Partner and employees of the
Partnership or of any Subsidiary of the Partnership shall not be deemed to
have any such agreement, arrangement or understanding on the basis of their
status, or actions taken in their capacities as directors, officers or
employees of the General Partner or employees of the Partnership or of any
Subsidiary of the Partnership, and (2) a Person shall not be deemed the
owner of or to own any Voting Units solely because (x) such Voting Units
have been tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such tendered
Voting Units are accepted for payment or exchange or (y) such Person or any
of such Person's Affiliates or Associates has or shares the power to vote
or direct the voting of such Voting Units pursuant to a revocable proxy
given in response to a public proxy or consent solicitation made to more
than ten holders of Voting Units and pursuant to, and in accordance with,
applicable rules and regulations under the Exchange Act, except if such
power (or arrangements relating thereto) is then reportable under Item 6 of
Schedule 13D under the Exchange Act (or any similar provision of a similar
or successor report).
The outstanding Voting Units of the Partnership shall include Voting
Units deemed owned through the application of clauses (B) and (C) above,
but shall not include any other Voting Units that may be issuable pursuant
to any agreement or upon
-45-
<PAGE>
exercise of conversion rights, warrants, options or otherwise. "Group",
with respect to any Person, shall include:
(i) such Person;
(ii) any Affiliates and Associates of such Person; and
(iii) those additional Persons that, together with such Person,
jointly file (or are required to file) a statement of beneficial ownership
pursuant to Section 13(d) of the Exchange Act or any successor provision,
irrespective of any disclaimers of beneficial ownership.
"Voting Unit" means all outstanding LP Units entitled to vote on any matter
pursuant to this Agreement; and each reference to a proportion of Voting Units
shall refer to such proportion of the votes entitled to be cast by such LP
Units.
"Subsidiary" means, with respect to the Partnership, any Operating
Partnership and any corporation or other entity of which a majority of any class
of equity security is owned, directly or indirectly, by the Partnership.
(b) Notwithstanding any other provision of this Agreement, with respect to
any matter submitted to a vote of the holders of the Voting Units (or to a vote
of the holders of Units generally) at any meeting of such holders or any matter
upon which the holders of Voting Units (or the holders of Units generally)
propose or purport to take action by written consent without a meeting: (i) no
Person that owns Voting Units may vote that amount of such Voting Units that
constitutes the Excludable Units, if any, owned by such Person (provided,
however, that if such Person is a member of a Group, such Person shall be
subject to clause (ii) below rather than to this clause (i)); (ii) no Person
that is a member of a Group of Persons owning Voting Units may vote that amount
of Voting Units owned by such Person that constitutes the Allocable Excludable
Units, if any, owned by such Person; and (iii) that amount of Voting Units
having the status of Excludable Units (adjusted as necessary to give effect to
the provisos to the definition set forth below of "Allocable Excludable Units")
shall be excluded and deducted from the total number of Voting Units deemed to
be outstanding for purposes of determining the number of Voting Units necessary
to constitute a quorum at any such meeting or to approve a matter submitted for
approval at any such meeting or by means of any such written consent.
(x) The term "Excludable Units" means, with respect to any Person or
Group, that amount of Voting Units owned by such Person or Group, as the
case may be, that would result in such Person or Group, as the case may be,
owning more than 20% of the combined voting power of the outstanding Voting
Units (with the determination of the voting power of each Person and Group
owning Voting Units being calculated and recalculated for this purpose as
often as is necessary to give effect
-46-
<PAGE>
to the exclusion from voting and the determination of Units deemed to be
outstanding for purposes related thereto of Excludable Units held by other
Persons or Groups).
(y) The term "Allocable Excludable Units" means, with respect to each
Person that is a member of a Group which owns Excludable Units, an amount
of Voting Units owned by such Person equal to such Person's pro rata share
within such Group of the total amount of Excludable Units owned by such
Group; provided, however, that Voting Units that are deemed owned by two or
more Persons who are members of such Group as a result of attributions in
accordance with the definition of "own" as set forth in Section 15.4(a)
hereof shall for this purpose be deemed to be owned by such one of such
Persons which most directly owns such voting Units; and provided, further,
that, with respect to any Person that is a member of more than one such
Group, "Allocable Excludable Units" means the greatest number of Excludable
Units so allocated with respect to such Person with respect to any single
Group.
(c) The provisions of this Section 15.4 shall not apply to (i) MetLife or
any entity as to which MetLife possesses the voting power to elect a majority of
the directors of such subsidiary (in the case of a corporation) or controls at
least a majority of the other beneficial interests entitled to vote generally
(in the case of a non-corporate entity) or (ii) any savings, profit sharing,
stock bonus or employee stock ownership plan or plans established by the
Partnership or a Subsidiary of the Partnership and qualified under Section
401(a) of the Code, or any successor provision, which holds Voting Units on
behalf of participating employees and their beneficiaries with the right to
instruct the trustee how to vote such Voting Units with respect to all matters
submitted to the holders of Voting Units (or the holders of Units generally) for
voting, or (iii) participating employees and beneficiaries under the plans
referred to in the immediately preceding clause (ii), but only to the extent
that such employees or beneficiaries own Voting Units by reason of being such
employees or beneficiaries. In addition, the provisions of this Section 15.4
shall not be applicable with respect to any Person or Group if either of the
following conditions is met:
(x) the General Partner (i) has expressly approved in advance either
(A) the acquisition of outstanding Voting Units by such Person or Group
that caused such Person or Group to become the owner of Excludable Units,
or (B) the issue or sale by the Partnership of Voting Units to such Person
or Group that caused such effect, and (ii) in advance of such acquisition
or issue or sale has expressly determined that such provisions shall not be
applicable to such Person or Group; or
(y) the General Partner has determined that such provision shall not
apply to such Person or Group.
(d) The General Partner shall have the power to determine, for the purposes
of this Section 15.4, on the basis of information known to it after reasonable
inquiry, all facts necessary to determine compliance with or implementation of
this Section 15.4, including
-47-
<PAGE>
without limitation (i) the number of Voting Units owned by any Person or Group
or a member of any Group, (ii) whether any two or more Persons constitute a
Group, (iii) whether a Person is an Affiliate or Associate of another or a
member of any Group, (iv) whether a Person has an agreement, arrangement or
understanding with another, (v) the calculation (including the manner of
calculation) of the amount of Excludable Units held by any Person or Group or
the Allocable Excludable Units held by any Person, and (vi) any other facts
which the General Partner determines to be relevant. Any determinations made by
the Board of Directors of the General Partner pursuant to this Section 15.4 in
good faith and on the basis of such information and advice as was then
reasonably available to them for such purpose shall be conclusive and binding
upon the Partnership and all holders of Units.
ARTICLE XVI
MEETINGS
16.1 Meetings. Meetings of Partners may be called by the General Partner
or by Limited Partners holding an aggregate of at least 20% of the outstanding
LP Units. Within 60 days after receipt by the General Partner of a written
proposal to call a meeting signed by Limited Partners holding the requisite
number of LP Units and indicating the purpose for which the meeting is to be
called (or such longer period as shall be reasonably required by the General
Partner in order to prepare documents required therefor), the General Partner
shall cause a notice of the meeting to be given to each Limited Partner. A
meeting shall be held at a time and place determined by the General Partner
within 60 days after the giving of notice of the meeting. A Majority Interest
represented in person or by proxy shall constitute a quorum at a meeting of the
Partners.
16.2 Record Date. For purposes of determining the Limited Partners
entitled to notice of or to vote at any meeting or to give approvals without a
meeting as provided in Section 16.4, the General Partner may set a Record Date,
which date for purposes of notice of a meeting shall not be less than 10 days
nor more than 60 days before the date of the meeting.
16.3 Conduct of Meeting. (a) The General Partner shall have full power and
authority concerning the manner of conducting any meeting of Partners or the
solicitation of proxies or approvals in writing, including, without limitation,
the determination of Persons entitled to vote, the existence of a quorum, the
conduct of voting, the validity and effect of any proxies, and the determination
of any controversies, votes or challenges arising in connection with or during
the meeting or voting. The General Partner shall designate an individual to
serve as chairman of any meeting and shall further designate an individual to
take the minutes of any meeting, which individuals may be directors or officers
of the General Partner. All minutes shall be kept with the records of the
Partnership maintained by the General Partner.
-48-
<PAGE>
(b) The General Partner may vote its Units in such manner as it in its
sole discretion may determine.
16.4 Action Without a Meeting. Any action that may be taken at a meeting
of the Partners may be taken without a meeting if approvals in writing setting
forth the action so taken are signed by Partners holding in the aggregate at
least the minimum number of Units that would be necessary to authorize or take
such action at a meeting at which all the Partners were present and voted.
Prompt notice of the taking of action without a meeting shall be given to the
Partners who have not approved in writing. If approvals to the taking of any
action by the Partners is solicited by any Person other than by or on behalf of
the General Partner, the approvals shall have no force and effect unless and
until (a) they are deposited with the Partnership in care of the General
Partner, (b) approvals sufficient to take the action proposed are dated not more
than 60 days prior to the date sufficient consents are deposited with the
Partnership, and (c) the Partnership receives an Opinion of Counsel that giving
effect to such approvals would not result in the loss of limited liability of
any Limited Partner or cause the Partnership or any of the Operating
Partnerships to be treated as an association taxable as a corporation for
federal income tax purposes.
ARTICLE XVI
CERTAIN RESTRICTIONS
17.1 Additional Units. (a) Except pursuant to the Restricted Unit Plan, the
General Partner shall not cause the Partnership to issue Units to the General
Partner or any of its Affiliates (other than pursuant to Section 4.1) unless (i)
the Units are of a class, or not materially different in their voting,
distribution and liquidation rights from Units of a class, which is, prior to
such issuance, listed or admitted to trading on a National Securities Exchange
or quoted by NASDAQ and the Net Agreed Value of the Contributed Property being
contributed in exchange for such Units is at least equal to the number of Units
being so issued times the Unit Price of such Units, (ii) such issuance is
approved by a Majority of Minority Interest, or (iii) such Units are LP Units
issued pursuant to the Intercompany Agreement in exchange for units representing
a partner's interest in NEICOP, provided, however, that the exchange by the
General Partner of GP Units held by it for LP Units or LP Units for GP Units in
accordance with Section 4.2 shall not constitute an issuance of Units by the
Partnership to the General Partner for the purposes of this Section 17.1.
17.2 Sale of Assets. Except as otherwise permitted by Section 12.4,
without the prior approval of a Majority Interest, the General Partner shall not
permit the sale or other disposition of all or substantially all of the
consolidated assets owned by the Partnership and any Operating Partnership.
-49-
<PAGE>
ARTICLE XVIII
MISCELLANEOUS
18.1 Opinions Regarding Taxation as a Partnership. Notwithstanding any
other provisions of this Agreement, the requirement, as a condition to any
action proposed to be taken under this Agreement, that the Partnership receive
an Opinion of Counsel that the proposed action would not result in the
Partnership or any Operating Partnership being treated as an association taxable
as a corporation for federal income tax purposes (a) shall not be applicable to
the extent that the Partnership or any Operating Partnership is at such time
treated in all material respects as an association taxable as a corporation for
federal income tax purposes and (b) shall be deemed satisfied by an Opinion of
Counsel containing conditions, limitations and qualifications which are
acceptable to the General Partner in its sole discretion.
18.2 Personal Property. The Partnership Interest of any Partner shall be
personal property for all purposes.
18.3 Addresses and Notices. Any notice, demand, request, payment or report
required or permitted to be given or made to a Limited Partner under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first class mail or by other means of written
communication to the Limited Partner at such Limited Partner's address as shown
on the Units Register. Any notice to the Partnership or the General Partner
shall be deemed given if received in writing by the General Partner at the
principal office of the Partnership designated pursuant to Section 2.3.
18.4 Headings. All article or section headings in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any of the provisions hereof.
18.5 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto (including the additional Persons that become
Limited Partners as provided herein) and their heirs, executors, administrators,
successors, legal representatives and assigns.
18.6 Integration. This Agreement constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
18.7 Waiver. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute a waiver
of any such breach or of any other covenant, duty, agreement or condition.
-50-
<PAGE>
18.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto (including the additional Persons that become Limited
Partners as provided herein).
18.9 Severability. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof, or of such provision in other
respects, shall not be affected thereby.
18.10 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware, without
giving effect to any conflicts or choice of law provisions that would make
applicable the substantive laws of any other jurisdiction.
-51-
<PAGE>
In Witness Whereof, this Agreement has been duly executed by the parties
hereto as of the date first above written.
NEW ENGLAND INVESTMENT COMPANIES INC.
As General Partner
By /s/ Edward N. Wadsworth
_______________________________
LIMITED PARTNERS
All Limited Partners now or hereafter admitted as limited
partners of the Partnership, pursuant to powers of
attorney now or hereafter executed in favor of, and
delivered to, the General Partner
By NEW ENGLAND INVESTMENT COMPANIES, INC.
As GENERAL PARTNER
By /s/ Edward N. Wadsworth
_______________________________
-52-
<PAGE>
ANNEX A
[Form of Face of Certificate]
NEW ENGLAND INVESTMENT COMPANIES, L.P.
Certificate Evidencing LP Units Representing
Limited Partnership Interests
This certifies that is the
registered holder of LP Units representing limited
partnership interest in NEW ENGLAND INVESTMENT COMPANIES, L.P., a limited
partnership formed under the laws of the State of Delaware (the "Partnership"),
transferable on the books of the Partnership, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed and accepted.
This Certificate and the LP Units evidenced hereby are issued and shall in all
respects be subject to all the provisions of the Agreement of Limited
Partnership of the Partnership as amended or restated from time to time, to all
of which the holder, by acceptance hereof, assents, and to the additional terms
and provisions on the reverse side hereof.
This Certificate is not valid unless countersigned and registered by the
Transfer Agent and Registrar.
Witness the facsimile signatures of the duly authorized officers of the
General Partner of the Partnership.
DATED:
NEW ENGLAND INVESTMENT COMPANIES, L.P.
By NEW ENGLAND INVESTMENT COMPANIES, INC.
as General Partner
By.....................................
COUNTERSIGNED AND REGISTERED:
.......................................
as Transfer Agent and Registrar
By .....................................
A-1
<PAGE>
(Form of Reverse Side of Certificate)
NEW ENGLAND INVESTMENT COMPANIES, L.P.
NEW ENGLAND INVESTMENT COMPANIES, L.P., a limited partnership formed under
the laws of the State of Delaware (the "Partnership"), will furnish to the
holder and each assignee of this Certificate and the LP Units evidenced hereby,
without charge, on written request to the Partnership at its principal place of
business, 399 Boylston Street, Boston, MA 02116, a copy of the Agreement of
Limited Partnership of the Partnership, as amended or restated from time to
time.
FOR VALUE RECEIVED, hereby sell,
assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
...............................................................................
...............................................................................
...............................................................................
............. LP Units representing
limited partnership interests evidenced by this Certificate and do hereby
irrevocably constitute and appoint................. to transfer the said LP
Units on the books of the Partnership with full power of substitution in the
premises.
Dated:
NOTICE: The Signature(s) to this Agreement must
correspond with the name(s) as written upon the
face of this Certificate in every particular,
without alteration or enlargement or any change
whatever.
SIGNATURE(S) MUST BE ..............................................
GUARANTEED BY A MEMBER FIRM OF (Signature)
THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. OR BY
A COMMERCIAL BANK OR TRUST
COMPANY ..............................................
(Signature)
SIGNATURE(S) GUARANTEED
A-2
<PAGE>
Acceptance of LP Units Representing Limited Partnership Interests in NEW ENGLAND
INVESTMENT COMPANIES, L.P.
The Undersigned (the "Assignee") hereby (a) agrees to become a limited
partner of NEW ENGLAND INVESTMENT COMPANIES, L.P., a Delaware limited
partnership (the "Partnership"), and a party to, and hereby executes, the
Agreement of Limited Partnership of the Partnership, as amended or restated from
time to time (the "Agreement"), (b) agrees to comply with and be bound by all
the provisions of such Agreement and (c) grants the Power of Attorney set forth
in Article II of such Agreement.
Date: ............................. ........................................
Signature of Assignee
A-3
<PAGE>
EXHIBIT 2
REGISTERED LP UNITS
TP 0316
CUSIP 644075 10 1
UNITS OF LIMITED PARTNERSHIP INTERESTS IN
NEW ENGLAND INVESTMENT COMPANIES, L.P.
THIS CERTIFIES THAT
Is the registered holder of
representing limited partnership interests in New England Investment Companies,
L.P., a limited partnership formed under the laws of the State of Delaware (the
"Partnership"), transferable on the books of the Partnership, in person or by
duly authorized attorney, upon surrender of this Certificate property endorsed
and accepted. This Certificate and the LP Units evidenced hereby are issued and
shall in all respects be subject to all the provisions of the Agreement of
Limited Partnership of the Partnership as amended or restated from time to time,
to all of which the holder, by acceptance hereof, assents, and to the additional
terms and provisions on the reverse side hereof.
This Certificate is not valid unless countersigned and registered by the
Transfer Agent and Registrar.
WITNESS the facsimile signatures of the duly authorized officers of the
General Partner of the Partnership.
DATED: NEW ENGLAND INVESTMENT COMPANIES, L.P.
Countersigned and Registered: By New England Investment Companies, Inc.
THE BANK OF NEW YORK as General Partner
(New York, New York)
as Transfer Agent and
Registrar
By By /s/ Edward N. Wadsworth By:/s/ Peter S. Voss
Authorized Signature Secretary President
<PAGE>
NEW ENGLAND INVESTMENT COMPANIES, L.P.
New England Investment Companies, L.P. a limited partnership formed under
the laws of the State of Delaware (the "Partnership"), will furnish to the
holder and each assignee of this Certificate and the LP Units evidenced hereby,
without charge, on written request to the Partnership at its principal place of
business 399 Boylston Street, Boston, Massachusetts 02116, a copy of the
Agreement of Limited Partnership of the Partnership, as amended or restated from
time to time.
FOR VALUE RECEIVED, _________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -----------------------------------------------------------------------LP Units
representing limited partnership interests evidenced by this Certificate and do
hereby irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said LP Units on the books of the Partnership with full power of
substitution in the premises.
Dated: ________________________________ ___________________________________
(Signature)
_______________________________________ ___________________________________
Signatures Guaranteed (Signature)
SIGNATURES MUST BE GUARANTEED BY A MEMBER NOTICE: The Signatures to this
FIRM OF THE NEW YORK STOCK EXCHANGE OR BY Assignment must correspond with the
A COMMERCIAL BANK OR TRUST COMPANY. name(s) as written upon the face of
this Certificate in every
particular, without alteration or
enlargement or any change whatever.
ACCEPTANCE OF LP UNITS REPRESENTING LIMITED PARTNERSHIP INTERESTS IN
NEW ENGLAND INVESTMENT COMPANIES, L.P.
The Undersigned (the "Assignee") hereby (a) agrees to become a limited
partner of New England Investment Companies, L.P., a Delaware limited
partnership (the "Partnership"), and a party to, and hereby executes, the
Agreement of Limited Partnership of the Partnership, as amended or restated from
time to time (the "Agreement"), (b) agrees to comply with and be bound by all
the provisions of such Agreement and (c) grants the Power of Attorney set forth
in Article II of such Agreement.
Dated: ________________________________ ___________________________________
Signature of Assignee
The LP Units evidenced hereby shall be subject to such restrictions on
transfer, if any, as the General Partner of the Partnership may impose from time
to time pursuant to the provisions of the Partnership's Amended and Restated
Agreement of Limited Partnership, including without limitation any such
restrictions imposed as part of or in connection with any Restructuring (as
defined in such Amended and Restated Agreement of Limited Partnership).
Attempted transfers in violation of any such restrictions may result in the
imposition of damages or penalties, including forfeiture of the LP Units
evidenced hereby.
<PAGE>
Exhibit 3
---------
INTERCOMPANY AGREEMENT
----------------------
Parties
-------
THIS INTERCOMPANY AGREEMENT is dated as of December 29, 1997 by and between
NEIC Operating Partnership, L.P. ("NEICOP"), a Delaware limited partnership, and
------
New England Investment Companies, L.P. ("NEIC"), a Delaware limited partnership.
----
Recitals
--------
WHEREAS, NEICOP is a limited partnership formed pursuant to the Delaware
Revised Uniform Limited Partnership Act;
WHEREAS, NEIC is a publicly traded partnership with units of limited
partnership interest ("NEIC LP Units") listed on the New York Stock Exchange
-------------
(the "NYSE") that is the Advising General Partner of NEICOP;
----
WHEREAS, New England Investment Companies, Inc. ("NEIC, Inc.") is the sole
---------
general partner of NEIC and the Managing General Partner of NEICOP;
WHEREAS, prior to January 1, 1998, or on such other date as the parties may
agree, NEIC, Inc. will effect a Restructuring of NEIC (as defined in the Second
Amended and Restated Agreement of Limited Partnership of NEIC, as amended from
time to time (the "NEIC Partnership Agreement")) pursuant to which NEIC intends
--------------------------
to transfer and assign all of its operating assets, subject to all of its
liabilities (other than any liabilities arising under registration rights
agreements), to NEICOP in exchange for the issuance by NEICOP to NEIC of
additional units of general partnership interest of NEICOP ("NEICOP GP Units")
---------------
such that NEIC will own that number of units of partnership interest of NEICOP
("NEICOP Units") equal to the number of units of partnership interest of NEIC
------------
("NEIC Units") outstanding at such time;
- ------------
WHEREAS, NEICOP desires to issue to NEIC additional NEICOP GP Units in
exchange for a contribution by NEIC of all of its operating assets, subject to
all of its liabilities (other than any liabilities arising under registration
rights agreements);
WHEREAS, the parties desire to specify the steps to be taken as part of the
Restructuring and certain ongoing rights, duties and obligations with respect to
each other;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto, intending to be legally bound, do hereby agree as follows:
<PAGE>
Agreement
---------
1. Definitions. The following terms are defined in the following Sections
-----------
hereof or in the Amended and Restated Agreement of Limited Partnership of NEICOP
dated as of December 29, 1997 (the "NEICOP Partnership Agreement"):
----------------------------
Term Section
---- -------
Additional Voting Units NEICOP Partnership Agreement
Advising General Partner NEICOP Partnership Agreement
Affiliate NEICOP Partnership Agreement
Closing Time 2.2
Dropdown 2.1
Exchange Act NEICOP Partnership Agreement
General Partner NEICOP Partnership Agreement
Group NEICOP Partnership Agreement
Limited Partner NEICOP Partnership Agreement
Majority of Minority Interest NEICOP Partnership Agreement
Managing General Partner NEICOP Partnership Agreement
Market Value NEICOP Partnership Agreement
NEIC Introduction
NEIC, Inc. Recitals
NEIC Exchange Ratio NEICOP Partnership Agreement
NEIC LP Units Recitals
NEIC Partnership Agreement Recitals
NEIC Rights Holders 7.1
NEIC Units Recitals
NEICOP Introduction
NEICOP Exchange Ratio NEICOP Partnership Agreement
NEICOP GP Units Recitals
NEICOP LP Units 2.2
NEICOP Partnership Agreement 1
NEICOP Plans 4
NEICOP Units Recitals
NYSE Recitals
Partner NEICOP Partnership Agreement
Person NEICOP Partnership Agreement
Registration Rights Agreements 7.1
Restricted Unit Plan NEICOP Partnership Agreement
Securities Act 7.2
Units NEICOP Partnership Agreement
Voting Units NEICOP Partnership Agreement
-2-
<PAGE>
2. Dropdown and Exchange.
---------------------
2.1 Dropdown. NEIC agrees to transfer all of its operating assets,
--------
subject to all of its liabilities (other than any liabilities arising
under registration rights agreements), to NEICOP on December 29, 1997,
or on such other date as the parties may agree, in exchange for NEICOP
GP Units such that NEIC will own a number of NEICOP Units equal to the
number of NEIC Units then outstanding (the "Dropdown"). NEICOP agrees
--------
to assume all of NEIC's liabilities at such time (other than any
liabilities arising under registration rights agreements) and to issue
such NEICOP GP Units to NEIC at such time pursuant to the NEICOP
Partnership Agreement.
2.2 Exchange. As of a time subsequent to the Dropdown but prior to
--------
January 1, 1998, or at such other time as the parties may agree (the
"Closing Time"), and from time to time thereafter as NEIC and NEICOP
------------
shall agree, NEIC agrees to redeem any and all NEIC LP Units held by
any Partners of NEIC that are not Public Partners (as such terms are
defined in the NEIC Partnership Agreement), or any other partner of
NEIC with comparable contractual or other rights as mutually agreed to
by NEIC and NEICOP, upon the written request of such holder in such
form as NEIC shall prescribe, and to transfer to such holder in
exchange for such NEIC LP Units a number of units of limited
partnership interest of NEICOP ("NEICOP LP Units") equal to the
---------------
product of (a) the number of NEIC LP Units requested to be exchanged,
and (b) the NEICOP Exchange Ratio. The NEICOP GP Units held by NEIC
that are so transferred shall automatically be exchanged for NEICOP LP
Units at the time of such transfer pursuant to Section 4.2(b) of the
NEICOP Partnership Agreement. NEICOP consents to such transfer of
NEICOP LP Units and acknowledges that the transferees thereof shall
become Limited Partners of NEICOP at and as of the time of such
transfer.
At the Closing Time, any NEIC LP Units in the NEIC Restricted Unit
Plan which have not been granted and/or have not yet vested shall be
exchanged for an equal number of NEICOP Units. NEICOP acknowledges
that such units will become part of its Restricted Unit Plan and
agrees to issue such number of NEICOP Units in the exchange.
3. Business of NEIC. The parties acknowledge that, from and after the date
----------------
hereof, the business of NEIC shall be to serve as the Advising General Partner
of NEICOP. Accordingly, except as set forth herein and except as NEICOP may
otherwise agree in writing, the parties agree as follows from and after the date
hereof:
-3-
<PAGE>
3.1 NEIC will comply with the provisions of the NEIC Partnership Agreement
and will not consent to or propose the amendment, restatement, or
other modification of the NEIC Partnership Agreement in a manner that
would permit NEIC to circumvent the provisions of Sections 7.1(p) and
13.1(b) of the NEIC Partnership Agreement, without the prior written
consent of a Majority of Minority Interest of NEICOP;
3.2 NEIC will not issue or sell any NEIC LP Units or any securities
convertible into or exercisable for NEIC LP Units; provided, however,
-------- -------
that NEIC may issue or sell NEIC LP Units (a) where the proceeds are
held by NEIC in cash or cash equivalents, (b) where the proceeds are
used by NEIC to purchase NEICOP GP Units from NEICOP, or (c) in
exchange for NEICOP LP Units pursuant to Section 5.1;
3.3 NEIC will use its best efforts to maintain the listing of the NEIC LP
Units on the NYSE or the listing or quotation of the NEIC LP Units on
a comparable national securities market.
4. Exchange Act Compliance; NYSE Listing and Approvals.
---------------------------------------------------
From and after the time of the Dropdown, NEICOP shall provide to NEIC such
financial statements and such other information regarding NEICOP and its
Affiliates that NEICOP controls as are necessary for NEIC to timely file all
reports required by any government agency, including those required to be filed
under Sections 13 and 15(d) of the Exchange Act, and shall cooperate with NEIC
in the preparation and filing of such reports.
From and after the time of the Dropdown, NEIC shall from time to time file
with the NYSE (or such other comparable national securities market on which NEIC
LP Units are then listed or quoted) an application for listing of any and all
NEIC LP Units (a) sold to NEICOP pursuant to Section 6.1 in connection with the
exercise of awards under any of NEICOP's employee benefit plans, including its
1993 Equity Incentive Plan, its 1997 Equity Incentive Plan and any other equity
incentive plan that NEICOP may adopt from time to time (collectively, the
"NEICOP Plans") and (b) issuable upon the exchange of NEICOP LP Units for NEIC
- -------------
LP Units pursuant to Section 5.1 hereof, which listing application shall provide
for effectiveness upon notice of issuance of such NEIC LP Units. NEIC shall
use its best efforts, and NEICOP shall cooperate with NEIC, to obtain the
approval of such listing applications.
NEIC shall use its best efforts to obtain all unitholder approvals as may
be required by the NYSE (or such other comparable national securities market on
which NEIC LP Units are then listed or quoted) or otherwise in connection with
(a) any issuance of NEICOP Units, (b) any issuance or sale of units of
partnership interest of NEIC under this Agreement, or (c) any other issuance or
sale required hereunder or incidental to any transaction contemplated hereby.
-4-
<PAGE>
5. Exchange of NEICOP LP Units.
---------------------------
5.1 Issuances of NEIC LP Units in Exchange for NEICOP LP Units. NEIC will
----------------------------------------------------------
effect a continuing exchange offer of NEIC LP Units (or cash at NEIC's
election) for NEICOP LP Units, in accordance with, and subject to the
limitations of, the provisions hereof and of the NEICOP Partnership
Agreement.
5.2 Conditions and Mechanics of Exchange. NEIC and NEICOP acknowledge
------------------------------------
that the exchange of NEIC LP Units for NEICOP LP Units shall occur
only pursuant to the provisions of Article X of the NEICOP Partnership
Agreement. NEIC agrees that it will issue NEIC LP Units in exchange
for NEICOP LP Units only in compliance with such provisions.
5.3 Exchange of NEICOP LP Units for NEICOP GP Units. NEIC and NEICOP
-----------------------------------------------
acknowledge that any NEICOP LP Units transferred to NEIC pursuant to
Section 5.1 will be automatically exchanged for NEICOP GP Units at the
time of such transfer. NEIC acknowledges that such exchange is
permitted by Section 4.2(a) of the NEICOP Partnership Agreement, and
will issue NEICOP GP Units to NEIC in connection with such exchange.
5.4 Purchase of NEICOP LP Units. NEIC will purchase the NEICOP LP Units
---------------------------
of any unitholder of NEICOP if so requested by the Managing General
Partner of NEICOP pursuant to Section 7.1(p) of the NEICOP Partnership
Agreement.
6. Certain Stock Issuances Pursuant to Employee Plans.
--------------------------------------------------
6.1 NEICOP Plans. Upon the grant and/or exercise of any awards of NEIC LP
------------
Units under any NEICOP Plan in accordance with the terms of such plan,
at the request of NEICOP, (a) NEIC shall issue to NEICOP the number of
NEIC LP Units necessary to satisfy such award; (b) NEICOP shall pay in
cash the Market Value of the NEIC LP Units issued pursuant to Section
6.1(a) to NEIC; and (c) any exercise price to be paid by the plan
participant in respect of such award shall be paid to NEICOP. Such
issuances and payments shall occur on the date on which the award is
exercised, or the date on which the recipient is entitled to receive
NEIC LP Units thereunder, rather than on the date on which the award
is granted.
6.2 Restricted Unit Plan. Upon the vesting of any award of NEICOP LP
--------------------
Units under the Restricted Unit Plan in accordance with the terms of
such plan, at the request of NEICOP, (a) NEIC shall issue to NEICOP
the number of NEIC LP Units equal to the product of (i) the number of
NEICOP LP Units so vested, and (ii) the NEIC Exchange Ratio; (b)
NEICOP shall pay NEIC in cash the Market Value of such NEIC LP Units
on the date that the award vested; (c) any exercise
-5-
<PAGE>
price to be paid by the plan participant in respect of such award
shall be paid to NEICOP; and (d) such NEIC LP Units shall be issued to
the plan participant in satisfaction of such award.
7. Registration Under the Securities Act.
-------------------------------------
7.1 Registration Rights Agreements. Reference is made to the various
------------------------------
registration rights agreements (collectively, the "Registration Rights
-------------------
Agreements") between NEIC and certain of the holders of NEIC LP Units
----------
in effect on the date hereof and from time to time hereafter ("NEIC
----
Rights Holders"). Certain NEIC Rights Holders may exchange their NEIC
--------------
LP Units for NEICOP LP Units pursuant to Section 2.2 hereof. In the
event that any holder of NEICOP LP Units or NEICOP GP Units is a NEIC
Rights Holder, such NEIC Rights Holder may demand registration of the
Registrable Securities (as defined in such Registration Rights
Agreement) for which such NEIC Rights Holder may exchange its NEICOP
LP Units pursuant to Section 5 hereof in accordance with the terms of
such Registration Rights Agreement. Similarly, in the event that NEIC
engages in a "NEIC Registration" under the Registration Rights
Agreements, upon the request of any NEIC Rights Holder in accordance
with the terms thereof, NEIC shall (subject to Section 7.7 hereof)
include in its registration statement a number of NEIC LP Units equal
to the product of (a) the NEIC Exchange Ratio in effect at the time of
the request, and (b) the number of NEICOP LP Units requested by such
NEIC Rights Holder to be included in the registration statement, in
accordance with the terms of such Registration Rights Agreement.
7.2 NEIC LP Units Issued in Exchange. In accordance with the provisions
--------------------------------
of Section 7.4 hereof, NEIC shall use its best efforts to file a
registration statement under the Securities Act of 1933, as amended
(the "Securities Act") to cover the issuance of any and all NEIC LP
--------------
Units upon the exchange of any NEICOP LP Units pursuant to Section 5
hereof.
7.3 NEICOP Plans. As of the Closing Time, in accordance with the
------------
provisions of Section 7.4 hereof, NEIC shall have filed on Form S-8,
Form S-3, or such other form as may be required and is available, a
registration statement under the Securities Act relating to NEICOP's
1993 Equity Incentive Plan, and such registration statement shall have
become effective under the Securities Act. In accordance with Section
7.4 hereof, upon NEICOP's request, NEIC shall file a registration
statement under the Securities Act relating to NEICOP's 1997 Equity
Incentive Plan and any other equity incentive plan as NEICOP may adopt
from time to time.
7.4 Registration Procedures. In connection with the filing by NEIC of any
------------------------
registration statement relating to NEIC LP Units pursuant to Section
7.2 or
-6-
<PAGE>
Section 7.3 hereof, NEIC shall (a) file a registration statement under
the Securities Act to cover the issuance of such NEIC LP Units and use
its best efforts to cause such registration statement to become and
remain effective; (b) furnish to the holders of the NEIC LP Units
covered by such registration statement a reasonable number of copies
of a prospectus and such other documents as they reasonably request in
order to facilitate the disposition of the NEIC LP Units owned by
them; (c) use its best efforts to register or qualify the NEIC LP
Units under such securities or blue sky laws of such states and other
jurisdictions as shall be reasonably requested by the unitholders; (d)
use its best efforts to cause such NEIC LP Units to be registered with
or approved by such other governmental agencies or authorities as may
be necessary to enable the holders of the NEIC LP Units covered by
such registration statement to consummate the disposition of such NEIC
LP Units; (e) in the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such
offering; (f) give the holders of NEIC LP Units covered by such
registration statement and their underwriters, if any, and their
respective professional advisers, the opportunity to participate in
the preparation of such registration statement and each amendment and
supplement thereto, and give each of them access to its books and
records and such opportunities to discuss the business of NEIC with
its officers and professional advisers as shall be necessary to
conduct a reasonable investigation within the meaning of the
Securities Act; and (g) use its best efforts to amend such
registration statement and notify each holder of NEIC LP Units covered
by such registration statement, at any time during which a prospectus
is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that NEIC need not comply with this
-------- --------
Section 7.4 in the event that such compliance would require NEIC to
disclose any information about itself or its affiliates which NEIC in
its sole discretion considers inadvisable to disclose.
For the avoidance of doubt, in connection with the filing of any
registration statement pursuant to Section 7.1 hereof, NEIC shall be
bound by the obligations of the relevant Registration Rights
Agreements and not of this Section 7.4.
In connection with NEIC's preparation and filing of any registration
statement under the Securities Act, NEICOP shall provide to NEIC such
financial statements (audited or otherwise) and such other information
regarding NEICOP as NEIC may reasonably request.
-7-
<PAGE>
7.5 Exempted Resales. NEIC and NEICOP acknowledge that (unless required
----------------
by the relevant Registration Rights Agreement) NEIC shall not be bound
by the obligations of Section 7.2 or Section 7.3 when the resale of
the NEIC LP Units to be registered thereunder may be effected pursuant
to an exemption from the registration requirements of the Securities
Act.
7.6 Registration Expense. NEICOP shall reimburse NEIC for all of its
--------------------
costs and expenses in connection with any registration of NEIC LP
Units initiated by a NEIC Rights Holder under any of the Registration
Rights Agreements (including pursuant to Section 7.1 hereof), issued
in exchange for NEICOP LP Units pursuant to Section 5 hereof, issued
in connection with NEICOP Plans pursuant to Section 7.3 hereof, or any
other registrations or financings undertaken at the request of NEICOP.
7.7 No Right to Exchange. Nothing in this Section 7 shall give any holder
--------------------
of NEICOP LP Units the right to exchange such units for NEIC LP Units.
Such exchanges shall be governed exclusively by Section 5 hereof and
Article X of the NEICOP Partnership Agreement.
8. Voting Matters.
--------------
8.1 Voting of NEICOP LP Units held by NEIC. In connection with any matter
--------------------------------------
submitted to a vote of the holders of Voting Units of NEICOP (or to a
vote of the holders of Units of NEICOP generally) at any meeting of
such holders or any matter upon which such holders propose or purport
to take action by written consent without a meeting, NEIC shall submit
such matter to a vote of its unitholders in accordance with the NEIC
Partnership Agreement (disregarding for this purpose Section 15.4 of
the NEIC Partnership Agreement). The Voting Units of NEICOP held by
NEIC (if any) shall be voted for, voted against, withheld from voting
or not voted on such matter in the same proportions as are the units
for which voting instructions are solicited by NEIC (subject to
Section 15.4 of the NEICOP Partnership Agreement, provided, however,
-------- -------
that for the purposes of this Section 8.1, a Person or Group shall be
deemed to own (a) all Voting Units of NEICOP owned by such Person or
Group, and (b) any Additional Voting Units deemed owned by such Person
or Group). NEIC agrees to provide such ownership and voting records to
NEICOP as NEICOP shall deem necessary or desirable to ensure
compliance with Section 15.4 of the NEICOP Partnership Agreement.
8.2 Call of Unitholder Meeting. NEIC shall exercise its right to call a
--------------------------
meeting of the Partners of NEICOP in the event that it receives
requests to do so from holders of NEIC LP Units representing, based on
the NEICOP Exchange Ratio
-8-
<PAGE>
in effect at the time, an amount of NEICOP LP Units held by NEIC that
is sufficient to call a meeting under the NEICOP Partnership
Agreement.
9. Remedies. Each party acknowledges that it will be impossible to measure
--------
the damages that would be suffered by the other party if such party fails to
comply with the covenants set forth in this Agreement and that in the event of
any such failure, the other party will not have an adequate remedy at law. Each
party shall, therefore, be entitled in addition to any other rights and remedies
to obtain specific performance of the other party's obligations hereunder and to
obtain immediate injunctive relief without having to post a bond. Neither party
shall urge, as a defense to any proceeding for such specific performance or
injunctive relief, that the other party has an adequate remedy at law.
10. Miscellaneous.
-------------
10.1 Successors. This Agreement shall be binding upon and shall inure to
----------
the benefit of the parties hereto and their respective heirs,
successors and assigns; provided, however, NEIC may not assign this
-------- -------
Agreement except to a successor General Partner who assumes all rights
and obligations of NEIC as a General Partner of NEICOP in accordance
with the provisions of the NEICOP Partnership Agreement and who agrees
in writing to be bound hereby and to assume all of the obligations of
NEIC hereunder.
10.2 Headings. The headings in this Agreement are inserted for convenience
--------
of reference only and shall not be a part of or control or affect the
meaning hereof.
10.3 Entire Agreement. This Agreement supersedes any and all oral or
----------------
written agreements heretofore made relating to the subject matter
hereof and constitutes the entire agreement of the parties relating to
the subject matter hereof.
10.4 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the internal laws of the State of Delaware, without
giving effect to any conflicts or choice of law provisions that would
make applicable the substantive laws of any other jurisdiction.
10.5 Amendments. This Agreement may be amended only with the prior written
----------
consent of each party hereto.
-9-
<PAGE>
Execution
---------
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
NEIC OPERATING PARTNERSHIP, L.P.
By: New England Investment Companies, Inc.
its managing general partner
By /s/ Edward N. Wadsworth
___________________________
Title: Executive Vice President &
General Counsel
NEW ENGLAND INVESTMENT
COMPANIES, L.P.
By: New England Investment Companies, Inc.
its general partner
By /s/ Edward N. Wadsworth
___________________________
Title: Executive Vice President &
General Counsel
-10-
