1
AGREEMENT AND PLAN OF MERGER
Dated as of May 14, 2000
between
UniCredito Italiano S.p.A.
and
The Pioneer Group, Inc.
2
TABLE OF CONTENTS
PAGE
ARTICLE 1 THE MERGER..............................................................................................1
1.1 THE MERGER...............................................................................................1
1.2 EFFECT OF THE MERGER.....................................................................................2
1.3 CONSUMMATION OF THE MERGER...............................................................................2
1.4 CERTIFICATE OF INCORPORATION; BY-LAWS; DIRECTORS AND OFFICERS............................................2
1.5 CONVERSION OF SECURITIES.................................................................................3
1.6 COMPANY STOCK OPTIONS AND PLANS..........................................................................4
1.7 EXCHANGE OF CERTIFICATES.................................................................................4
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER..........................................6
2.1 ORGANIZATION AND QUALIFICATION...........................................................................6
2.2 AUTHORITY................................................................................................6
2.3 COMPLIANCE...............................................................................................7
2.4 COMMISSION FILINGS.......................................................................................8
2.5 BROKER'S FEES............................................................................................9
2.6 FINANCING................................................................................................9
2.7 LITIGATION...............................................................................................9
2.8 PARENT'S KNOWLEDGE.......................................................................................9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................9
3.1 ORGANIZATION AND QUALIFICATION...........................................................................9
3.2 SUBSIDIARIES............................................................................................10
3.3 CAPITALIZATION..........................................................................................10
3.4 AUTHORITY...............................................................................................11
3.5 COMPLIANCE..............................................................................................12
3.6 COMMISSION FILINGS......................................................................................13
3.7 LITIGATION..............................................................................................14
3.8 CHANGES.................................................................................................14
3.9 TRANSACTIONS WITH AFFILIATES............................................................................14
3.10 ENVIRONMENTAL MATTERS................................................................................14
3.11 EMPLOYEE BENEFITS AND CONTRACTS......................................................................15
3.12 REAL PROPERTY AND LEASES; LIENS ON ASSETS............................................................17
3.13 TAXES................................................................................................17
3.14 COMPLIANCE WITH LAWS; PERMITS........................................................................18
3.15 INTELLECTUAL PROPERTY................................................................................19
3.16 NO UNDISCLOSED MATERIAL LIABILITIES..................................................................19
3.17 FAIRNESS OPINION, BROKERS............................................................................19
3.18 INVESTMENT ADVISORY ACTIVITIES.......................................................................20
3.19 REGISTERED INVESTMENT COMPANIES......................................................................21
3.20 NON-REGISTERED FUNDS.................................................................................24
3.21 MATERIAL CONTRACTS...................................................................................25
3.22 INSURANCE............................................................................................26
3.23 STATE TAKEOVER STATUTES..............................................................................26
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3.24 VOTE REQUIRED........................................................................................26
3.25 HARBOR GLOBAL........................................................................................27
3.26 BANK OF ITALY REQUIREMENTS...........................................................................27
3.27 COMPANY'S KNOWLEDGE..................................................................................28
3.28 SCHEDULES AND EXHIBITS...............................................................................28
3.29 NO IMPLIED REPRESENTATION............................................................................28
ARTICLE 4 CONDUCT OF BUSINESS....................................................................................28
4.1 CONDUCT PRIOR TO EFFECTIVE TIME.........................................................................28
4.2 COMMISSION FILINGS......................................................................................31
4.3 APPROVAL OF NEW FUND CONTRACTS..........................................................................31
ARTICLE 5 ADDITIONAL AGREEMENTS..................................................................................31
5.1 PREPARATION OF PROXY STATEMENT..........................................................................31
5.2 DISPOSITION OF THE SHARES...............................................................................32
5.3 FEES AND EXPENSES.......................................................................................32
5.4 ADDITIONAL AGREEMENTS...................................................................................33
5.5 NO SOLICITATION.........................................................................................33
5.6 NOTIFICATION OF CERTAIN MATTERS.........................................................................35
5.7 ACCESS TO INFORMATION...................................................................................35
5.8 INDEMNIFICATION AND INSURANCE...........................................................................35
5.9 FAIR PRICE STRUCTURE....................................................................................36
5.10 CERTAIN POST-CLOSING FUND MATTERS....................................................................36
5.11 SEVERANCE AGREEMENTS.................................................................................36
5.12 PARENT GUARANTY......................................................................................36
5.13 CONTINUATION OF EMPLOYMENT...........................................................................37
5.14 INCORPORATION OF THE PURCHASER.......................................................................37
ARTICLE 6 CONDITIONS.............................................................................................37
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER.............................................37
6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE MERGER............................................38
6.3 CONDITIONS TO OBLIGATION OF THE PARENT AND THE PURCHASER TO EFFECT THE MERGER...........................39
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER......................................................................40
7.1 TERMINATION.............................................................................................40
7.2 EFFECT OF TERMINATION...................................................................................41
7.3 AMENDMENT...............................................................................................41
7.4 WAIVER..................................................................................................41
7.5 EXPENSES; TERMINATION FEE...............................................................................41
ARTICLE 8 HARBOR GLOBAL..........................................................................................42
8.1 FORMATION OF HARBOR GLOBAL..............................................................................42
8.2 CERTAIN AGREEMENTS WITH RESPECT TO HARBOR GLOBAL........................................................42
8.3 DISTRIBUTION OF THE HARBOR GLOBAL INTERESTS.............................................................43
ARTICLE 9 GENERAL PROVISIONS.....................................................................................43
9.1 CLOSING.................................................................................................43
(ii)
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9.2 PUBLICITY...............................................................................................43
9.3 NOTICES.................................................................................................43
9.4 INTERPRETATION..........................................................................................45
9.5 REPRESENTATIONS AND WARRANTIES; ETC.....................................................................45
9.6 MISCELLANEOUS...........................................................................................45
9.7 VALIDITY................................................................................................46
Disclosure Schedule
Exhibit A - Distribution Agreement
Exhibit B - Tax Separation Agreement
(iii)
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TABLE OF DEFINED TERMS
Acquisition Proposals........................................................5.5
Administration Agreement....................................................3.19
Agreement................................................................Recital
Applicable Laws...........................................................2.3(b)
Assets......................................................................3.12
Balance Sheet...............................................................3.12
BHCA.........................................................................2.3
Business Employees..........................................................5.13
Cash Consideration...........................................................1.5
CERCLA......................................................................3.10
Certificate of Merger........................................................1.3
Certificates.................................................................1.7
Client Contracts............................................................3.18
Closing......................................................................9.1
Closing Date.................................................................9.1
Code.........................................................................1.7
Commission...................................................................2.4
Commission Filings...........................................................3.6
Company..................................................................Recital
Company Material Adverse Effect .............................................3.1
Company Stockholder Approval.................................................6.1
Company Stockholders' Meeting................................................5.1
Continuing Subsidiaries......................................................3.2
Deferred Compensation Shares.................................................1.5
Delaware Law.................................................................1.1
Designated Assets............................................................1.1
Disclosure Schedule....................................................Article 3
Dissenting Shares............................................................1.5
Distribution.................................................................8.2
Distribution Agreement.......................................................8.1
EC Regulation................................................................2.3
Effective Time...............................................................1.3
Encumbrances................................................................3.12
Environmental Law...........................................................3.10
ERISA.......................................................................3.11
ESPP.........................................................................3.3
Exchange Act.................................................................2.3
Fee..........................................................................7.5
Financial Advisors..........................................................3.17
Funds.......................................................................3.18
Fund Annual Financial Statements............................................3.19
Fund Approvals...............................................................4.3
Fund Financial Statements...................................................3.19
(iii)
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Fund Interim Financial Statements...........................................3.19
Fund Material Adverse Effect................................................3.19
Fund Stockholders...........................................................3.19
Fund Tax Returns............................................................3.19
Funds.......................................................................3.18
Governmental Entity.........................................................3.10
Harbor Global................................................................8.1
Harbor Global Entities......................................................3.25
Harbor Global Interests......................................................8.2
Xxxx-Xxxxx-Xxxxxx Act........................................................2.3
Indemnified Parties..........................................................5.8
Intellectual Property.......................................................3.15
Investment Advisers Act......................................................2.3
Investment Company Act.......................................................2.3
Leases......................................................................3.12
Management Stockholders..................................................Recital
Material Contracts..........................................................3.21
Materials of Environmental Concern..........................................3.10
Merger...................................................................Recital
NASD.........................................................................2.3
Non-Fund Clients............................................................3.18
Non-Registered Funds........................................................3.18
Non-Registered Funds Annual Financial Statements............................3.20
Non-Registered Funds Financial Statements...................................3.20
Non-Registered Funds Interim Financial Statements...........................3.20
open taxable years..........................................................3.19
Options......................................................................3.3
Parent...................................................................Recital
Payment Agent................................................................1.7
Payment Fund.................................................................1.7
PFD.........................................................................3.19
PIM.........................................................................3.18
Plans........................................................................3.3
Proxy Statement..............................................................2.4
PSC.........................................................................3.19
Purchaser................................................................Recital
Qualified Acquisition Proposal...............................................5.5
Qualified Commercial Bank....................................................1.7
Reports.....................................................................3.19
Securities Act...............................................................2.3
Services Agreement..........................................................3.19
Shares.......................................................................1.5
Stockholders.................................................................1.5
Subsequent Action............................................................5.5
(iv)
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Subsequent Sale..............................................................7.5
Subsidiaries.................................................................3.2
Surviving Corporation........................................................1.1
Tax Returns.................................................................3.14
Tax Separation Agreement.....................................................8.1
Terminating Company Breach...................................................7.1
Terminating Parent Breach....................................................7.1
Third Party..................................................................5.5
Trustee Materials............................................................4.3
Underwriting Agreement......................................................3.19
12b-1 Plan..................................................................3.19
1997 Plan....................................................................3.3
1988 Plan....................................................................3.3
(v)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of May
14, 2000, is between UniCredito Italiano S.p.A., a corporation organized under
the laws of the Republic of Italy (the "Parent"), and The Pioneer Group, Inc., a
corporation organized under the laws of the State of Delaware (the "Company").
BACKGROUND
A. The respective Boards of Directors of the Parent and the Company
have each duly approved the merger of a corporation to be organized under the
laws of the State of Delaware and to be a wholly owned subsidiary of the Parent
(the "Purchaser") with and into the Company on the terms and subject to the
conditions of this Agreement (the "Merger") and the Board of Directors of the
Company has resolved to recommend approval of the Merger by the Stockholders.
B. In addition to receiving the Cash Consideration provided for in this
Agreement, the Stockholders are receiving Harbor Global Interests in connection
with the Merger.
C. The respective Boards of Directors of the Parent and the Company
have each duly approved all of the other transactions contemplated by this
Agreement.
D. In order to induce Parent to enter into this Agreement, certain
Stockholders who are executive officers of the Company (the "Management
Stockholders") and the Parent have simultaneously herewith entered into voting
agreements, whereby such Management Stockholders have agreed, among other
things, to vote in favor of this Agreement, the Merger and the other
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Parent, the Purchaser
and the Company hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 THE MERGER. (a) At the Effective Time (as hereinafter
defined), in accordance with this Agreement and the General Corporation Law of
the State of Delaware ("Delaware Law"), the Purchaser shall be merged with and
into the Company, the separate existence of the Purchaser shall cease and the
Company shall continue as the surviving corporation. Notwithstanding the
foregoing, the Parent may elect, prior to the Merger, instead of merging
Purchaser with and into the Company, as provided above, to merge the Company
with and into the Purchaser; provided, that the Company shall not be deemed to
have breached any of its representations, warranties or covenants set forth in
this Agreement, and no closing condition contained herein shall be deemed not
satisfied, solely by reason of such election. The Company (or in the case of an
election by the Parent pursuant to the immediately preceding sentence, the
Purchaser) is hereinafter sometimes referred to as the "Surviving Corporation."
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(b) Notwithstanding anything in the Agreement to the
contrary, the Parent may identify certain assets owned by the Company (including
stock of the Continuing Subsidiaries) or assets owned by the Continuing
Subsidiaries (the "Designated Assets") that the Parent desires to purchase
directly, or that the Parent desires one of its affiliates to purchase. In such
event, the Company and the Parent (or such affiliate of the Parent) shall
negotiate in good faith a purchase and sale agreement with respect to the
Designated Assets; PROVIDED, HOWEVER, that the Company shall be under no
obligation to enter into any such agreement. Any purchase and sale agreement
with respect to the Designated Assets shall close simultaneously with the
Effective Time, on such terms (including appropriate indemnities provided by the
Parent for liabilities arising from such sale) arrived at between the parties in
good faith. If the Parent so directs, the net proceeds from such sale of assets
shall be used as part of the Cash Consideration and will reduce the other Cash
Consideration provided by the Parent such that the Stockholders shall receive
the same aggregate Cash Consideration provided for herein as if the Parent had
not so directed the use of such net proceeds.
1.2 EFFECT OF THE MERGER. At the Effective Time, the Surviving
Corporation shall continue its corporate existence under the laws of the State
of Delaware and the Merger shall have the effects set forth in Section 251 of
the Delaware Law.
1.3 CONSUMMATION OF THE MERGER. As soon as is practicable after
the satisfaction or waiver of the conditions set forth in Article 6 hereof, the
parties hereto will cause the Merger to be consummated by delivering to the
Secretary of State of the State of Delaware a Certificate of Merger (the
"Certificate of Merger") in such form or forms as may be required by, and
executed and acknowledged in accordance with, the relevant provisions of the
Delaware Law, and shall make all other filings and recordings required by the
Delaware Law in connection with the Merger. The Merger shall become effective at
the time that the Certificate of Merger is filed with the Secretary of the State
of the State of Delaware in accordance with the relevant provisions of the
Delaware Law (or at such later time, which shall be as soon as reasonably
practicable, specified as the effective time in the Certificate of Merger). The
term "Effective Time" shall mean the date and time of the filing of the
Certificate of Merger with the Secretary of the State of the State of Delaware
(or such later time, which shall be as soon as reasonably practicable, as may be
specified in the Certificate of Merger).
1.4 CERTIFICATE OF INCORPORATION; BY-LAWS; DIRECTORS AND
OFFICERS. The Certificate of Incorporation and By-laws of the Purchaser as in
effect immediately prior to the Effective Time shall be the Certificate of
Incorporation and By-laws of the Surviving Corporation until thereafter amended
as provided under the Delaware Law, except that (1) the name of the corporation
set forth therein shall be changed to the name of the Company and (2) the
identity of the incorporator set forth in the Certificate of Incorporation shall
be deleted. The directors of the Purchaser immediately prior to the Effective
Time will be the initial directors of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time will be the
initial officers of the Surviving Corporation, in each case until such time as
changed in accordance with the provisions of Delaware Law and the By-laws of the
Surviving Corporation or until their successors are duly elected and qualified.
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1.5 CONVERSION OF SECURITIES.
(a) At the Effective Time, by virtue of the Merger and
without any action on the part of the Purchaser, the Company, the Surviving
Corporation or the holder of any of the following securities:
(i) subject to Section 1.5(b), (A) each share of the
Company's common stock, par value $0.10 per share (the "Shares"),
issued and outstanding immediately prior to the Effective Time
(other than Shares to be cancelled pursuant to clause (ii) below and
any Dissenting Shares (as defined below)) and (B) the 35,958 Shares
held in the treasury pursuant to a deferred compensation arrangement
(the "Deferred Compensation Shares"), which on or prior to the
Effective Time shall for purposes of this Agreement be deemed to be
held by the beneficiary of said deferred compensation arrangement,
shall in the case of clauses (A) and (B) be cancelled and
extinguished or retired and be converted into and become a right to
receive $43.50 in cash per Share without any interest thereon (the
"Cash Consideration");
(ii) each Share held in the treasury of the Company
(other than as provided in clause (i)(B) above) and each Share that
is issued and outstanding immediately prior to the Effective Time
and owned by the Parent, the Purchaser or the Company or any direct
or indirect subsidiary of the Parent, the Purchaser or the Company,
shall be cancelled and retired, and no payment shall be made with
respect thereto; and
(iii) each share of the Purchaser's capital stock issued
and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation.
(b) Notwithstanding Section 1.5(a), Shares outstanding
immediately prior to the Effective Time and held by a holder who, acting in
accordance with Section 262 of Delaware Law, (A) prior to the meeting at which
the Company's stockholders (the "Stockholders") vote to approve the Merger, has
delivered to the Company written notice of such holder's intention to demand
payment for his Shares if the Merger is effectuated and (B) has not voted in
favor of the Merger ("Dissenting Shares"), shall not be converted into a right
to receive the Cash Consideration, unless such holder withdraws or otherwise
loses his right to demand payment for his Shares. If, after the Effective Time,
such holder withdraws or loses his right to demand payment for his Shares, such
Shares shall be treated as if they had been converted as of the Effective Time
into the right to receive the Cash Consideration payable in respect of such
Shares pursuant to Section 1.5(a)(i).
(c) The Company shall give the Parent and the Purchaser
prompt notice of any demands for payment, or notices of intent to demand
payment, received by the Company with respect to Shares in accordance with
Section 262 of Delaware Law, and the Parent and the Purchaser shall have the
right to participate in all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of the
Parent and the Purchaser or as otherwise required by law or pursuant to a final
order of a
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court of competent jurisdiction, make any payment with respect to, or settle, or
offer to settle, any such demands.
1.6 COMPANY STOCK OPTIONS AND PLANS. The Company shall take all
actions necessary to ensure that (a) all Options (as defined in Section 3.3
below) outstanding under the Plans (as defined in Section 3.3 below), to the
extent not exercised prior to the Effective Time, shall, if not currently
vested, be fully vested immediately prior to the Effective Time and shall
terminate and be cancelled as of the Effective Time and in consideration thereof
each holder shall receive from the Purchaser, as soon as practicable following
the Effective Time, a cash payment equal to the excess of the Cash Consideration
(if any) over the per share exercise price of such Option, multiplied by the
number of shares subject to such Option (as the case may be), and thereafter
such Options shall be of no further force or effect, (b) all restricted common
stock granted under any Plan shall, if not currently vested, be fully vested
immediately prior to the Effective Time and (c) all Plans shall terminate as of
the Effective Time. Any such payment shall be subject to all applicable federal,
state and local tax withholding requirements.
1.7 EXCHANGE OF CERTIFICATES.
(a) From and after the Effective Time, a bank or trust
company to be designated by the Parent or the Purchaser and consented to by the
Company (such consent not to be unreasonably withheld, delayed or conditioned)
(the "Payment Agent") shall act as payment agent in effecting the exchange, for
the Cash Consideration multiplied by the number of Shares formerly represented
thereby, of certificates (the "Certificates") that, prior to the Effective Time,
represented Shares entitled to payment pursuant to Section 1.5(a)(i). From time
to time, the Parent shall, or shall cause the Purchaser to, deposit with the
Payment Agent in trust for the benefit of the holders of Certificates, such
amount of the Cash Consideration in immediately available funds needed to pay
promptly for surrendered Shares as provided in this Section 1.7 (the "Payment
Fund"). Promptly after the Effective Time (but in any event within two business
days thereof), the Payment Agent shall mail to each record holder of
Certificates that immediately prior to the Effective Time represented Shares a
form of letter of transmittal (in form and substance reasonably satisfactory to
the Parent) and instructions for use in surrendering such Certificates and
receiving the Cash Consideration therefor. Upon the surrender of each such
Certificate together with a duly completed and executed letter of transmittal,
the Payment Agent shall pay the holder of such Certificate the Cash
Consideration multiplied by the number of Shares formerly represented by such
Certificate, without any interest thereon, in exchange therefor, and such
Certificate shall forthwith be cancelled. Delivery shall be effected, and risk
of loss and title to the Certificate shall pass, only upon proper delivery of
the Certificate to the Payment Agent, and the letter of transmittal shall so
reflect. Until so surrendered and exchanged, each such Certificate (other than
Certificates representing Shares held by the Parent, the Purchaser or the
Company or any direct or indirect subsidiary of the Parent, the Purchaser or the
Company or Dissenting Shares) shall represent solely the right to receive the
Cash Consideration multiplied by the number of Shares represented by such
Certificate, without any interest thereon. If any cash is to be paid to a person
other than the holder in whose name the Certificate representing Shares
surrendered in exchange therefor is registered, it shall be a condition to such
payment that the person requesting such payment shall pay to the Payment Agent
any transfer or other taxes required by reason of the payment of such cash to a
person other than the registered holder of the Certificate surrendered, or such
person shall establish to the satisfaction of the
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Payment Agent that such tax has been paid or is not applicable. Notwithstanding
the foregoing, neither the Payment Agent nor any party hereto shall be liable to
a holder of Shares for any Cash Consideration delivered to a public official
pursuant to applicable abandoned property, escheat and similar laws.
(b) To the extent not immediately required for payment for
surrendered Shares as provided in Section 1.7(a), the Payment Fund shall be
invested by the Payment Agent, as directed by the Parent (so long as such
directions do not impair the rights of holders of Shares), in direct obligations
of the United States of America, obligations for which the full faith and credit
of the United States of America is pledged to provide for the payment of
principal and interest, commercial paper rated of the highest quality by Xxxxx'x
Investors Services, Inc. or Standard & Poor's Ratings Group, or certificates of
deposit issued by a commercial bank having at least $300,000,000 in assets (a
"Qualified Commercial Bank"); and any net earnings with respect thereto shall be
paid to the Parent as and when requested by the Parent.
(c) The Payment Agent shall, pursuant to irrevocable
instructions, make the payments referred to in Section 1.5(a)(i) out of the
Payment Fund. Promptly following the date that is nine months after the
Effective Time, the Payment Agent shall deliver to the Parent all cash,
certificates and other documents in its possession relating to the transactions
described in this Agreement, and the Payment Agent's duties shall terminate.
Thereafter, each holder of a Certificate formerly representing a Share may
surrender such Certificate to the Surviving Corporation or the Parent and
(subject to applicable abandoned property, escheat and similar laws) receive in
exchange therefor the Cash Consideration, without any interest thereon but shall
have no greater rights against the Surviving Corporation or the Parent than may
be accorded to general creditors of the Surviving Corporation or the Parent
under applicable law.
(d) After the Effective Time, there shall be no transfers on
the stock transfer books of the Surviving Corporation of any Shares. If, after
the Effective Time, Certificates formerly representing Shares are presented to
the Surviving Corporation or the Payment Agent, they shall be cancelled and
exchanged for the Cash Consideration, as provided in this Article 1, subject to
applicable law in the case of Dissenting Shares.
(e) From and after the Effective Time, holders of
certificates theretofore evidencing Shares shall cease to have any rights as
Stockholders, except as provided herein or by law. After the Effective Time, the
Surviving Corporation shall be entitled to cause the Shares to be delisted from
the Nasdaq Stock Market(R).
(f) Each of the Surviving Corporation and the Parent shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Shares such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax law (other than any such tax that may arise due to
the status of the Parent as a non-U.S. corporation). To the extent that amounts
are so withheld by the Surviving Corporation or the Parent, as the case may be,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the Shares in respect of which such deduction
and withholding was made by the Surviving Corporation or the Parent, as
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the case may be, and shall promptly be paid by the Parent or the Purchaser, as
the case may be, to the applicable taxing authority.
(g) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond, in such
commercially reasonable amount and on such commercially reasonable terms as the
Surviving Corporation may direct, as indemnity against any claim that may be
made against it with respect to such Certificate, the Parent shall issue in
exchange for such lost, stolen or destroyed Certificate, the Cash Consideration.
(h) Except for the distribution of shares of Harbor Global
contemplated by Article 8, the Cash Consideration shall be appropriately
adjusted to reflect any stock split, reverse stock split, stock dividend,
recapitalization, exchange, subdivision, combination of, or other similar change
in the Shares that shall be effective or be authorized after the date of this
Agreement and prior to the Effective Time.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND THE PURCHASER
The Parent represents and warrants to the Company as of the date hereof
and, as of the Closing Date, the Parent and the Purchaser each represents and
warrants to the Company as follows:
2.1 ORGANIZATION AND QUALIFICATION. The Parent is and the
Purchaser on the Closing Date will be an entity duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization and has
or, with respect to the Purchaser, shall have all requisite power to carry on
its business as now conducted or contemplated to be conducted. The Parent is and
the Purchaser on the Closing Date will be duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned or leased or the nature of its activities
makes such qualification necessary, except for failures to be so qualified or in
good standing which would not, individually or in the aggregate, materially
impair the ability of the Parent and the Purchaser to perform their obligations
hereunder.
2.2 AUTHORITY. The Parent has the requisite corporate power and
authority to enter into this Agreement. The Parent has and the Purchaser on the
Closing Date will have the requisite corporate power to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Parent and the consummation by the Parent
and the Purchaser of the transactions contemplated hereby have been, in the case
of the Parent, and will be, in the case of the Purchaser, duly authorized by the
respective Boards of Directors of the Parent (including as sole stockholder of
the Purchaser) and the Purchaser and no other corporate proceedings on the part
of the Parent are or, in the case of the Purchaser will be, necessary to
authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby. This Agreement has been duly executed
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and delivered by the Parent and constitutes a valid and binding obligation of
the Parent, enforceable against the Parent in accordance with its terms.
2.3 COMPLIANCE.
(a) Neither the execution and delivery of this Agreement by
the Parent nor the consummation by the Parent and the Purchaser of the
transactions contemplated hereby nor compliance by the Parent and the Purchaser
with any of the provisions hereof will (i)(x) violate, conflict with or result
in a breach of any provision of the charter documents or by-laws of the Parent
or the Purchaser or (y) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event that, with notice or lapse of
time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the material properties or
assets of the Parent or the Purchaser or any other direct or indirect subsidiary
of the Parent under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Parent or the Purchaser is a party, or to
which any of them, or any of their respective properties or assets, may be
subject, or (ii) subject to the exceptions and compliance with the statutes and
regulations referred to in the next paragraph, violate any judgment, ruling,
order, writ, injunction, decree, statute, rule or regulation applicable to the
Parent or the Purchaser or any of their respective properties or assets; except,
in the case of each of clauses (i)(y) and (ii) above, for such violations,
conflicts, breaches, defaults, terminations, accelerations or creations of
liens, security interests, charges or encumbrances that, individually or in the
aggregate, would not materially impair the ability of the Parent and the
Purchaser to perform their obligations hereunder.
(b) Other than in connection with or in compliance with the
provisions of Delaware Law, the U.S. Securities Act of 1933, as amended (the
"Securities Act"), the U.S. Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the U.S. Investment Advisers Act of 1940, as amended (the
"Investment Advisers Act"), the U.S. Investment Company Act of 1940, as amended
(the "Investment Company Act"), the "takeover" or "blue sky" laws of various
states, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the rules
and regulations thereunder (the "Xxxx-Xxxxx-Xxxxxx Act"), Regulation (EC) No.
4054189, as amended, of the Council of the European Union or any other national
antitrust regulation applicable in Europe (the "EC Regulation"), the Bank
Holding Company Act of 1956, as amended by the Xxxxx-Xxxxx-Xxxxxx Act of 1999
(the "BHCA"), the rules and regulations of the Board of Governors of the Federal
Reserve System, the rules and regulations of the Bank of Italy, and the rules
and regulations of the National Association of Securities Dealers, Inc. (the
"NASD") (each of such laws, rules or regulations being referred to as the
"Applicable Laws"), no notice to, filing with, or authorization, consent or
approval of, any domestic or foreign public body or authority or any
governmental or non-governmental self-regulatory organization or agency is
necessary for the consummation by the Parent or the Purchaser of the
transactions contemplated by this Agreement, unless the failure to give such
notices, make such filings, or obtain such authorizations, consents or approvals
would, individually or in the aggregate, not materially impair the ability of
the Parent and the Purchaser to perform their obligations hereunder.
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(c) As of the Effective Time, neither the Parent nor the
Purchaser nor any other person "associated" (as defined under the Investment
Advisers Act) with the Parent or the Purchaser is subject to disqualification
pursuant to Section 203(e) of the Investment Advisers Act or to serve as an
investment adviser or as an associated person to a registered investment
adviser, or subject to disqualification pursuant to Rule 206(4)-3 under the
Investment Advisers Act or subject to disqualification to serve as a
broker-dealer under Section 15 of the Exchange Act or the subject of a
rebuttable presumption pursuant to Rule 206(4)-4(b) under the Investment
Advisers Act unless in each case the Parent has received exemptive relief from
the Commission with respect to such disqualification. As of the Effective Time,
neither the Parent nor the Purchaser nor any "affiliated person" (as defined
under the Investment Company Act) thereof is subject to disqualification as an
investment adviser or any other capacity contemplated by the Investment Company
Act for any investment company under Section 9(a) of the Investment Company Act
unless in each case the Parent has received exemptive relief from the Commission
with respect to such disqualification.
2.4 COMMISSION FILINGS.
(a) The information supplied by the Parent or the Purchaser
for inclusion in the proxy statement of the Company to be mailed to the
Stockholders in connection with their approval of the Merger (the "Proxy
Statement"), on the date the Proxy Statement is filed with the Securities and
Exchange Commission (the "Commission"), on the date the Proxy Statement is first
sent or given to security holders, and on the date of the meeting of the
Stockholders, will comply in all material respects with the provisions of
applicable U.S. federal securities laws and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Parent agrees
to provide in writing all information concerning the Parent and its affiliates
required to be included in the Proxy Statement under the Exchange Act and the
rules and regulations thereunder. The Parent agrees promptly to correct the
Proxy Statement if and to the extent that it shall have become false or
misleading in any material respect.
(b) The information supplied by the Parent or the Purchaser
for inclusion in each of the proxy solicitation materials to be distributed to
the shareholders of each Fund (as defined in Section 3.18) will include all
disclosures of information regarding the Parent and the Purchaser as is
necessary in order to make the disclosure of information therein satisfy the
requirements of Section 14 of the Exchange Act, Section 20 of the Investment
Company Act and the rules and regulations thereunder and such information shall
not contain (at the time such information is distributed) any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statement made therein, in light of the circumstances under which they were
made, not misleading. The Parent agrees to provide in writing all information
concerning the Parent and its affiliates required to be included in a Fund's
proxy statement under the Exchange Act, the Investment Company Act or the rules
and regulations thereunder. The Parent agrees to promptly correct such
information if and to the extent that the information regarding the Parent and
its affiliates in a Fund's proxy statement becomes false or misleading in any
material respect.
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2.5 BROKER'S FEES. Except for Xxxxxx Xxxxxxx & Co. Incorporated,
no agent, broker, person or firm acting on behalf of the Parent or the Purchaser
is or will be entitled to any advisory, commission or broker's or finder's fee
from any of the parties hereto in connection with any of the transactions
contemplated herein.
2.6 FINANCING. The Parent has, and at the Effective Time the
Parent and the Purchaser will have, funds and financing arrangements available
to them sufficient to provide the funds necessary to consummate the Merger and
to fulfill their obligations hereunder.
2.7 LITIGATION. There is no suit, action or legal,
administrative, arbitration or order, proceeding or governmental investigation
pending or, to the knowledge of the Parent, threatened, to which the Parent or
the Purchaser is a party which, considered individually or in the aggregate, is
reasonably likely to materially adversely affect the Parent's or the Purchaser's
ability to perform its obligations under this Agreement.
2.8 PARENT'S KNOWLEDGE. For purposes of this Agreement and all
certificates and other documents delivered in connection herewith, the term
"Parent's knowledge" or "Parent's best knowledge" or similar phrases shall mean
the knowledge of each member of the board of directors of the Parent and Xxxxxx
Xxxxxxx (Head of Finance of the Parent), which shall be deemed to include the
knowledge that such person would have had if he or she had made reasonable
inquiry.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and the Purchaser,
except as set forth on a disclosure schedule previously delivered to the Parent
(the "Disclosure Schedule") with respect to any representation or warranty set
forth below, as of the date hereof and as of the Closing Date as follows:
3.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to carry
on its business as it is now being conducted. The Company is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the nature
of its activities makes such qualification necessary, except for failures to be
so qualified or in good standing which would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect (as
defined below). Copies of the Certificate of Incorporation and By-Laws of the
Company have heretofore been delivered to the Parent and the Purchaser and such
copies are accurate and complete as of the date hereof. For purposes of this
Agreement, "Company Material Adverse Effect" shall mean any change, effect or
circumstance that is materially adverse to the assets, the financial condition,
business or operations of the Company and its Subsidiaries (as defined in
Section 3.2) taken as a whole (other than changes that result from economic
factors affecting the economy as a whole or changes that are the result of
factors generally affecting the mutual fund industry); provided, that (i)
Company Material Adverse Effect shall not include any adverse change, effect or
circumstance arising out of or resulting from actions contemplated by the
parties in connection with this Agreement or that is
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attributable to the announcement or performance of this Agreement or the
transactions contemplated by this Agreement other than the Distribution and (ii)
any adverse change in the Company's stock price shall not be taken into account
in determining whether there has been a Company Material Adverse Effect.
3.2 SUBSIDIARIES. The only direct or indirect subsidiaries of
the Company (the "Subsidiaries") are those named in Exhibit 21 to the Company's
Annual Report on Form 10-K for the Fiscal Year ended December 31, 1999 as filed
with the Commission and heretofore delivered to the Parent or as otherwise set
forth in the Disclosure Schedule or the Commission Filings (as defined in
Section 3.6). The term "Continuing Subsidiary" shall mean any Subsidiary of the
Company that is not being transferred to Harbor Global in accordance with
Article 8 of this Agreement and pursuant to the Distribution Agreement.
No securities of any of the Continuing Subsidiaries are or may become
required to be issued by reason of any options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of any capital
stock of any Continuing Subsidiary. There are no contracts, commitments,
understandings or arrangements by which any Continuing Subsidiary is bound to
issue additional shares or purchase shares of its capital stock (or its
equivalent) or securities convertible into or exchangeable for such shares or
similar interests and there are no agreements or understandings to which the
Company or any of its Continuous Subsidiaries is a party with respect to voting
the capital stock (or its equivalent) of any Subsidiary. All of such shares or
similar interests so owned by the Company are validly issued, fully paid and
non-assessable and are owned by the Company free and clear of any claim, lien,
encumbrance or agreement of any kind with respect thereto.
Each Continuing Subsidiary is a corporation or other entity duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization and has the requisite power and
authority to carry on its business as it is now being conducted. Each Continuing
Subsidiary is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of its properties owned
or leased or the nature of its activities makes such qualification necessary,
except for failures to be so qualified or in good standing that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Copies of the charter documents and by-laws of each
Continuing Subsidiary have heretofore been made available to the Parent and are
accurate and complete as of the date hereof.
Except as disclosed in Section 3.2 of the Disclosure Schedule or the
Commission Filings filed prior to the date hereof, the Company does not directly
or indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any equity or similar interest in, any
other corporation, partnership, joint venture or other business association or
entity.
3.3 CAPITALIZATION. The authorized capital stock of the Company
consists of 60,000,000 shares of Common Stock, $0.10 par value. As of the date
of this Agreement:
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(i) 26,806,500 Shares were validly issued and
outstanding, fully paid and nonassessable;
(ii) 36,195 Shares were held in the treasury of the
Company, which includes the Deferred Compensation Shares;
(iii) 2,275,000 Shares were reserved for issuance
pursuant to outstanding Options heretofore granted under the
Company's 1997 Stock Incentive Plan (the "1997 Plan") and 1988 Stock
Option Plan (the "1988 Plan); and
(iv) 500,000 Shares were reserved for issuance pursuant
to the Company's 1995 Employee Stock Purchase Plan (the "ESPP" and
collectively with the 1997 Plan, the Company's 1995 Restricted Stock
Plan and the 1988 Plan (the "Plans").
Of the shares of restricted common stock issued by the Company under
the 1997 Plan and the 1995 Restricted Stock Plan, 556,982 shares of which remain
subject to restrictions as of the date of this Agreement. The options granted
under the Plans are hereinafter referred to collectively as the "Options" and
individually as an "Option." Accurate and complete copies of all of the Plans
have heretofore been made available to the Parent and the Purchaser. Set forth
in Section 3.3 of the Disclosure Schedule is a list of all individuals who, as
of the date of this Agreement, had Options or restricted common stock pursuant
to the Plans. Except as set forth above in this Section 3.3, there are no other
shares of capital stock or other securities of the Company outstanding and no
other outstanding options, warrants, rights to subscribe to (including any
preemptive rights), calls or commitments of any character whatsoever to which
the Company is a party or may be bound requiring the issuance, transfer or sale
of any shares of capital stock or other securities of the Company or any
securities or rights convertible into or exchangeable or exercisable for any
such shares or securities, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Continuing
Subsidiaries is or may become bound to issue additional shares of their capital
stock or options, warrants or rights to purchase or acquire any additional
shares of their capital stock or securities convertible into or exchangeable or
exercisable for any such shares. To the best of the Company's knowledge, none of
the Shares is subject to any voting trust, transfer restrictions or other
similar arrangements, except for vesting arrangements pursuant to agreements
with the Company or restrictions on transfer imposed by the Securities Act and
state securities laws.
3.4 AUTHORITY.
(a) The Company has all requisite corporate power and
authority to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by the Company's Board of
Directors and, except for the approval of its Stockholders as set forth in
Section 6.1 of this Agreement, no other corporate proceedings on the part of the
Company are necessary to authorize the execution, delivery and performance of
this Agreement and the transactions contemplated hereby; provided that the
Parties recognize that the Board of Directors of the Company has not taken on
the date of this Agreement all actions necessary to establish and distribute the
interests in Harbor Global as contemplated by Article 8, all of which
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shall have been taken prior to the Effective Time. This Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(b) The Company's Board of Directors have duly adopted
resolutions (i) approving the Merger and this Agreement, and the transactions
contemplated hereby, (ii) determining that each of the transactions contemplated
by this Agreement, including the Merger, are fair to, advisable and in the best
interests of the Stockholders, and (iii) recommending adoption and approval of
the Merger pursuant to the Delaware Law by holders of Shares.
3.5 COMPLIANCE.
(a) Neither the execution and delivery of this Agreement by
the Company, nor the consummation by the Company of the transactions
contemplated hereby, nor compliance by the Company with any of the provisions
hereof will (i) (x) violate, conflict with, or result in a breach of any
provision of the charter or by-law of the Company or any of its Continuing
Subsidiaries, or (y) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event that, with notice or lapse of
time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance or payment required by, or result in a right
of termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
the Company or any of its Continuing Subsidiaries, under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, distribution agreement, joint venture agreement or any other
agreement or instrument or obligation to which the Company or any of its
Continuing Subsidiaries is a party or to which any of them or any of their
respective properties or assets may be subject or (ii) subject to the exceptions
and compliance with the statutes and regulations referred to in the next
paragraph, violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to the Company or its Continuing
Subsidiaries or any of their respective properties or assets; except, in the
case of each of clauses (i)(y) and (ii) above, for such violations, conflicts,
breaches, defaults, terminations, accelerations or creations of liens, security
interests, charges or encumbrances that, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect, and would
not materially adversely affect the Company's ability to perform its obligations
under this Agreement.
(b) Other than in connection with or in compliance with the
provisions of Applicable Laws, authorizations, consents or approvals necessary
in order to effect any deemed assignment of any agreement between the Company or
any of its Continuing Subsidiaries and a Fund or other Client, under the
Investment Company Act or the Investment Advisers Act, or as set forth in
Section 3.5 of the Disclosure Schedule, no notice to, filing with, or
authorization, consent or approval of, any domestic or foreign public body or
authority or any governmental or non-governmental self-regulatory organization
or agency is necessary for the consummation by the Company of the transactions
contemplated by this Agreement, unless the failure to give such notices, make
such filings, or obtain such authorizations, consents or approvals would not,
individually or in the aggregate, materially impair the ability of the
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Company to perform its obligations hereunder and would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect.
3.6 COMMISSION FILINGS.
(a) The Company and its Continuing Subsidiaries have filed
with the Commission all required reports, schedules, forms, statements and other
documents required to be filed under the Securities Act, the Exchange Act, the
Investment Company Act and the Investment Advisers Act from January 1, 1998
through the date hereof. All documents (including exhibits) filed by the Company
and its Continuing Subsidiaries with the Commission pursuant to the Securities
Act, the Exchange Act, the Investment Company Act and/or the Investment Advisers
Act since January 1, 1998 are referred to herein as the "Commission Filings."
The Commission Filings (i) were prepared, in all material respects, in
accordance with the applicable requirements of the Securities Act, the Exchange
Act, the Investment Company Act and/or the Investment Advisers Act, as the case
may be, and the rules and regulations thereunder, (ii) did not at the time they
were filed contain any untrue statement of material fact, (iii) did not at the
time they were filed omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, and (iv) in the event of subsequent modifications of the
circumstances or the basis on which they had been made, were, to the extent
required by the Securities Act, the Exchange Act, the Investment Company Act or
the Investment Advisers Act, as the case may be, timely amended in order to make
them not misleading in any material respects in the light of such new
circumstances or basis.
(b) Each of the audited consolidated financial statements
and unaudited interim consolidated financial statements (including, in each
case, any related notes or schedules) included in the Commission Filings was
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, except as may be indicated therein or in the notes or
schedules thereto, and fairly presented in all material respects the
consolidated financial position of the Company and Subsidiaries as at the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended, subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments and the absence of complete
notes.
(c) The Proxy Statement and any written information provided
by or on behalf of the Company which is included in the Proxy Statement, on the
date the Proxy Statement is filed with the Commission, and on the date the Proxy
Statement is first published, sent or given to security holders and on the date
of the meeting of Stockholders, as the case may be, will comply in all material
respects with the provisions of applicable federal securities laws and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, provided that no representation or warranty is made pursuant to this
Section 3.6(c) with respect to any written information provided by or on behalf
of the Parent or the Purchaser for inclusion in the Proxy Statement. The Company
agrees promptly to correct the Proxy Statement if and to the extent that it
shall have become false or misleading in any material respect (provided that,
with respect to any false or misleading information provided by or on behalf of
the Parent or the Purchaser for inclusion in
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the Proxy Statement, the Parent or the Purchaser shall have provided the Company
with correct information) and the Company shall take all steps necessary to
cause the Proxy Statement as so corrected to be filed with the Commission and
mailed to the Stockholders to the extent required by the Exchange Act.
3.7 LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to the best knowledge of the Company, threatened
against the Company or any of its Continuing Subsidiaries, nor is the Company or
any of its Continuing Subsidiaries subject to any order, judgment, writ,
injunction or decree, except in either case for matters that, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect and would not materially adversely affect the Company's ability
to perform its obligations under this Agreement.
3.8 CHANGES. Except as specifically set forth in this Agreement,
in Section 3.8 of the Disclosure Schedule or as disclosed in the Commission
Filings filed prior to the date hereof, since December 31, 1999 (a) the Company
and its Continuing Subsidiaries, taken as a whole, have conducted their
businesses only in the ordinary course of business and in a manner consistent
with past practice, (b) there has not been any event, change or effect which,
individually or in the aggregate, has resulted in a Company Material Adverse
Effect, and (c) neither the Company nor any of its Continuing Subsidiaries has
taken any action that, if taken after the date of this Agreement, would
constitute a breach of any of the covenants set forth in Section 4.1(b), Section
8.2 or Section 8.3.
3.9 TRANSACTIONS WITH AFFILIATES. Except as disclosed in the
Commission Filings filed prior to the date hereof, since January 1, 1997,
neither the Company nor any of its Continuing Subsidiaries has entered into any
transaction with any current director or officer of the Company or any
Continuing Subsidiary or any transaction which would be subject to proxy
statement disclosure under the Exchange Act pursuant to the requirements of Item
404 of Regulation S-K.
3.10 ENVIRONMENTAL MATTERS.
(a) The Company and the Continuing Subsidiaries have
complied in all material respects with all applicable Environmental Laws (as
defined below). There is no civil or criminal litigation, written notice of
violation, administrative proceeding or investigation, inquiry or information
request by any court, arbitration tribunal, administrative agency or commission
or other governmental or regulatory authority or agency (a "Governmental
Entity") pending or, to the knowledge of the Company, threatened relating to any
Environmental Law involving the Company or any of its Continuing Subsidiaries.
For purposes of this Agreement, "Environmental Law" means any foreign, federal,
state or local law, statute, rule or regulation or the common law relating to
the environment or occupational health and safety, including without limitation,
any statute, regulation or order pertaining to (i) treatment, storage, disposal,
generation or transportation of industrial, toxic or hazardous substances or
solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater
and soil contamination; (iv) the release or threatened release into the
environment of industrial, toxic or hazardous substances, or solid or hazardous
waste, including without limitation emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants or chemicals; (v) the protection
of wildlife,
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marine sanctuaries and wetlands, including without limitation all endangered and
threatened species; (vi) storage tanks, vessels and containers; (vii)
underground and other storage tanks or vessels, abandoned, disposed or discarded
barrels, containers and other closed receptacles; (viii) health and safety of
employees and other persons; and (ix) manufacture, processing, use,
distribution, treatment, storage, disposal, transportation or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or oil or petroleum products or solid or hazardous waste. As used above, the
terms "release" and "environment" shall have the meaning set forth in the
federal Comprehensive Environmental Compensation, Liability and Response Act of
1980 ("CERCLA").
(b) There have been no releases of any Materials of
Environmental Concern (as defined below) into the environment by the Company or
any of its Continuing Subsidiaries, or, to the knowledge of the Company, by any
other party at any parcel of real property or any facility formerly or currently
owned, operated or controlled by the Company or any of its Continuing
Subsidiaries which, individually or in the aggregate, would reasonably be
expected to have a Company Material Adverse Effect. With respect to any such
releases of Materials of Environmental Concern, the Company has given all
notices required to be given by the Company or any of its Continuing
Subsidiaries to Governmental Entities (copies of which have been provided to the
Parent). The Company is not aware of any releases of Materials of Environmental
Concern at parcels of real property or facilities other than those owned,
operated or controlled by the Company or any of its Continuing Subsidiaries that
would, individually or in the aggregate, have a material impact on the real
property or facilities owned, operated or controlled by the Company or any of
its Subsidiaries. For purposes of this Agreement, "Materials of Environmental
Concern" means any chemicals, pollutants or contaminants, hazardous substances
(as such term is defined under CERCLA), solid wastes and hazardous wastes (as
such terms are defined under the federal Resources Conservation and Recovery
Act), toxic materials, oil or petroleum and petroleum products, or any other
material subject to regulation under any Environmental Law.
(c) Section 3.10(c) of the Disclosure Schedule describes all
environmental reports, investigations and audits conducted by or on behalf of
the Company or any of its Continuing Subsidiaries or, to the knowledge of the
Company, conducted by or on behalf of a third party (whether done at the
initiative of the Company or any of its Continuing Subsidiaries or directed by a
Governmental Entity or other third party) issued or conducted during the past
five years relating to premises currently or previously owned or operated by the
Company or any of its Continuing Subsidiaries. Complete and accurate copies of
each such report, or the results of each such investigation or audit, have been
provided to the Parent if in the possession or control of the Company.
(d) The Parties agree that the only representations and warranties of the
Company herein as to any environmental matters are those contained in this
Section 3.10.
3.11 EMPLOYEE BENEFITS AND CONTRACTS.
(a) Neither the Company nor any of its Continuing
Subsidiaries is a party to any collective bargaining agreement.
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(b) Section 3.11(b) of the Disclosure Schedule lists all
material employee benefit plans (as defined in Section 3(3) of the U.S. Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus,
stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements, and all employment,
termination, severance or other contracts or agreements, whether legally
enforceable or not, to which the Company or any Continuing Subsidiary is a
party, with respect to which the Company or any Continuing Subsidiary has any
obligation or which are maintained, contributed to or sponsored by the Company
or any Continuing Subsidiary for the benefit of any employee, officer or
director or former employee, officer or director of the Company or any
Continuing Subsidiary maintained by the Company or any Continuing Subsidiary.
Each of such employee benefit plans complies in all material respects with all
requirements of applicable law. No "prohibited transaction" (as such term is
defined in ERISA) has occurred with respect to any such plan which will result
in material liability to the Company.
(c) Neither the Company nor any affiliate thereof has ever
maintained an employee benefit plan subject to Section 412 of the Code or Title
IV of ERISA. Each employee benefit plan of the Company or any affiliate intended
to be qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service confirming such
qualification and nothing has occurred that would cause such qualified status to
be jeopardized. Neither the Company nor any affiliate has ever had an obligation
to contribute to a "multiemployer plan" as defined in Section 4001(a)(3) of
ERISA. There are no unfunded obligations under any employee benefit plan of the
Company or any affiliate providing benefits after termination of employment to
any employee, officer or director or former employee, officer or director,
including but not limited to retiree health coverage and deferred compensation,
but excluding continuation of health coverage required to be continued under
Section 4980(B) of the Code. Each employee benefit plan of the Company or any
affiliate may be amended or terminated by the Company or such affiliate without
the consent or approval of any other person. Except as set forth herein, there
is no employee benefit plan, stock option plan, stock appreciation right plan,
restricted stock plan, stock purchase plan, or severance benefit plan of the
Company or any affiliate, any of the benefits of which will be increased or the
vesting of the benefits under which will be accelerated by the occurrence of any
of the transactions contemplated by this Agreement or the benefits under which
will be calculated on the basis of the transactions contemplated by this
Agreement.
(d) Except for acceleration of vesting of Options and
restricted common stock under the Plans, which the Company represents will not
exceed $60,500,000 and $27,500,000, respectively, neither the Company nor any
Subsidiary is obligated to make any parachute payment, as defined in Section
280G(b)(2) of the Code but without regard to Section 280G(b)(4) of the Code, nor
will any parachute payment be deemed to have occurred as a result of or arising
out of any of the transactions contemplated by this Agreement. Except for
acceleration of vesting of Options and restricted common stock under the Plans,
the Company has no contract, agreement, obligation or arrangement with any
employee or other person, any of the benefits of which will be increased or the
vesting of the benefits under which will be accelerated by any change of control
of the Company or the occurrence of any of the transactions contemplated by this
Agreement or the benefits under which will be calculated on the basis of the
transactions contemplated by this Agreement.
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3.12 REAL PROPERTY AND LEASES; LIENS ON ASSETS.
(a) The Company and its Continuing Subsidiaries have
sufficient title to all their properties and assets to conduct their respective
businesses as currently conducted, with only such exceptions as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(b) The assets, including any real property in which the
Company or any of its Continuing Subsidiaries has an interest, reflected in the
balance sheet of the Company for the fiscal year ended December 31, 1999
included in the Company's Annual Report on Form 10-K (the "Balance Sheet") or
acquired in the ordinary course of business since December 31, 1999 (the
"Assets") (except those Assets sold or disposed of in the ordinary course of
business for full and fair consideration), (i) are free and clear of all
mortgages, security interests, pledges, liens and encumbrances (collectively,
"Encumbrances") other than (A) as reflected in the Balance Sheet, (B)
Encumbrances on assets which, individually or in the aggregate, are not material
to the Company and its Continuing Subsidiaries, taken as a whole, and (C) liens
for state and local property taxes not in arrears and liens arising by operation
of law and (ii) are neither subject to any governmental decree or order to be
sold nor are being condemned, expropriated or otherwise taken by any public
authority with or without payment or compensation therefor, nor, to the
knowledge of the Company, has any such condemnation, expropriation or taking
been proposed, except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.
(c) Section 3.12(c) of the Disclosure Schedule lists all
leases of real property leased for the use or benefit of the Company or any
Continuing Subsidiary to which the Company or any Continuing Subsidiary is a
party, and all amendments and modifications thereto (the "Leases"). All Leases
are in full force and effect and have not been modified or amended, and there
exists no default under any such lease by the Company or any Continuing
Subsidiary, nor any event which with notice or lapse of time or both would
constitute a default thereunder by the Company or any Continuing Subsidiary,
except as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
3.13 TAXES.
(a) The Company and each Subsidiary have timely filed all
material tax returns, statements, reports and forms required to be filed with
any tax authority having jurisdiction over the Company or any Continuing
Subsidiary (collectively, "Tax Returns") and have paid when due all taxes owed
by the Company and any Subsidiary (whether or not shown on any such Tax Returns)
to any such tax authority. There are no liens on any of the assets of the
Company or any Continuing Subsidiary that arose in connection with any failure
(or alleged failure) to pay any tax except for liens that would, individually or
in the aggregate, not reasonably be expected to have a Company Material Adverse
Effect.
(b) No dispute or claim concerning any tax liability of the
Company or any Subsidiary has been claimed or raised by any authority in writing
nor to the Company's knowledge, otherwise.
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(c) Neither the Company nor any Continuing Subsidiary has
waived any statute of limitations in respect of taxes or agreed to any extension
of time with respect to a tax assessment or deficiency.
(d) Neither the Company nor any Subsidiary has filed a
consent under Section 341(f) of the Code concerning collapsible corporations.
Neither the Company nor any Subsidiary has any liability for the taxes of any
person (other than the Company and the Continuing Subsidiaries) under Treas.
Reg. Section 1.1502-6 (or any similar provision of state, local or foreign law),
as a transferee or successor, by contract, or otherwise.
(e) (i) For United States federal income tax purposes,
neither the Company, nor any Subsidiary nor any Fund is expected to have any
income reportable for a period ending after the Effective Time but attributable
to a transaction, such as an installment sale, occurring in, or a change in
method of accounting made for, a period ending on or prior to the Effective Time
that resulted in a deferred reporting of income from such transaction or from
such change in method of accounting (other than a deferred intercompany
transaction); (ii) immediately after the Merger, neither the Company nor any
Subsidiary will be a United States real property holding corporation within the
meaning of Section 897(c)(3) of the Code; (iii) the Company has provided or made
available to the Parent a copy of any tax-sharing or allocation agreement or
arrangement involving the Company or any of its Continuing Subsidiaries or
between a Harbor Global Entity and the Parent or any Continuing Subsidiary and a
description of any such unwritten or informal agreement or arrangement; (iv) all
Taxes required to be withheld, collected or deposited by the Company or any
Subsidiary or Fund have been timely withheld, collected or deposited and, to the
extent required, have been paid to the relevant Tax authority; (v) except for
the transaction contemplated by this Agreement, neither the Company nor any
Subsidiary has engaged in any "deferred intercompany transactions" within the
meaning of Section 1.1502-13 of the regulations under the Code, and all
"intercompany transactions" within the meaning of the same Section 1.1502-13
have been made on an arm's-length basis; (vi) none of the Continuing
Subsidiaries has an "excess loss account," as defined in Section 1.1502-19 of
the regulations under the Code, in the stock of any other corporation; and (vii)
for all open taxable years, the Company and each Continuing Subsidiary and all
Funds managed thereby are in compliance with respect to all backup withholding
and information reporting requirements in the Code and the regulations
thereunder, including, but not limited to all necessary due diligence mailings
and the proper and timely filing of Forms W-3, and such Funds are similarly in
compliance with all withholding and information reporting requirements of any
state, local or foreign jurisdiction to which any of them may be subject, except
in the case of clauses (iv) and (vii) for such instances of non-compliance
which, individually or in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect.
(f) Notwithstanding anything in this Section 3.13 to the
contrary, the Company shall not be deemed to have made any representation or
warranty under this Section 3.13 with respect to any liability, obligation,
action or failure to act for which the Company or a Continuing Subsidiary is
indemnifiable under the Distribution Agreement or the Tax Separation Agreement.
3.14 COMPLIANCE WITH LAWS; PERMITS. Neither the Company nor any
Continuing Subsidiary (a) is in violation of, or has violated, any applicable
provisions of any
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laws, statutes, ordinances or regulations (including any rules or regulations of
any non-governmental self-regulatory organization or agency) or (b) since
January 1, 1998, has received any notice from any non-governmental
self-regulatory organization or agency, governmental body, agency, official or
authority or any other person that either the Company or any Continuing
Subsidiary is in violation of, or has violated, any applicable provisions of any
material laws, statutes, ordinances or regulations, except in the case of
clauses (a) and (b) for violations or alleged violations which, individually or
in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect. The Company and each of its Continuing Subsidiaries have all
permits, licenses and franchises from Governmental Entities required to conduct
their businesses as now being conducted, except for such permits, licenses and
franchises the absence of which would not reasonably be expected to have a
Company Material Adverse Effect.
3.15 INTELLECTUAL PROPERTY. The Company, or a Continuing
Subsidiary, owns or has all necessary rights to use each patent, patent
application, trademark (whether or not registered), trademark application, trade
name, service xxxx, copyright and other trade secret or proprietary intellectual
property (collectively, "Intellectual Property") used in and material to their
respective businesses, and none of the previous or current development,
manufacture, marketing or distribution of products or services of or by the
Company or any Continuing Subsidiary infringes the right of any other person,
except for any such infringements that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Except as disclosed in the Commission Filings filed prior to the date hereof, no
other person is infringing the rights of the Company or any Continuing
Subsidiary in any such Intellectual Property, except for any such infringements
that would not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
3.16 NO UNDISCLOSED MATERIAL LIABILITIES. Except as disclosed in
the Commission Filings filed prior to the date hereof and except for liabilities
not required by generally accepted accounting principles to be recorded on a
balance sheet or liabilities arising since December 31, 1999 in the ordinary
course of business as of the date hereof, there are no liabilities of the
Company or any Continuing Subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, that would,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
3.17 FAIRNESS OPINION, BROKERS.
(a) The Company has received the oral opinion of Xxxxxxx
Xxxxx & Co., Inc. and Xxxxxxx Xxxxx Barney, Inc. (the "Financial Advisors")
that, as of the date that such opinion was given, the Cash Consideration is fair
to the Stockholders from a financial point of view.
(b) Except for the Financial Advisors, no agent, broker,
person or firm acting on behalf of the Company is or will be entitled to any
advisory commission or broker's or finder's fee from any of the parties hereto
in connection with any of the transactions contemplated herein. Accurate and
complete copies of all agreements between or among the Company and the Financial
Advisors relating to such transactions have been provided to the Parent.
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3.18 INVESTMENT ADVISORY ACTIVITIES.
(a) Section 3.18(a) of the Disclosure Schedule contains a
list, as of April 30, 2000, of (1) all of the investment companies registered
under the Investment Company Act (the "Funds") for which Pioneer Investment
Management, Inc. ("PIM") or any other Continuing Subsidiary acts as investment
adviser, (2) each pooled investment fund for which PIM or any other Continuing
Subsidiary acts as investment adviser and which is not required to register
under the Investment Company Act ("Non-Registered Funds") and (3) any other
investment advisory clients ("Non-Fund Clients") of PIM or any other Continuing
Subsidiary of the Company, showing the aggregate amount of assets under
management with the Company and its Continuing Subsidiaries as of such date.
(b) The Company has previously made available to the Parent
copies of each investment advisory agreement with any of the Funds,
Non-Registered Funds or Non-Fund Clients listed in Section 3.18(b) of the
Disclosure Schedule (the "Client Contracts").
(c) Each Client Contract and any subsequent renewal has been
duly authorized, executed and delivered by the applicable Continuing Subsidiary
or the Company and is a valid and legally binding agreement, enforceable against
such Continuing Subsidiary or the Company and, to the knowledge of the Company,
each other party thereto, except (with respect to each such other party) as
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally and by equitable principles, including those
limiting the availability of specific performance, injunctive relief and other
equitable remedies and those providing for equitable defenses.
(d) None of the Continuing Subsidiaries is currently in
default under any of the terms of any Client Contract other than defaults which
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
(e) None of the Company, any of its Continuing Subsidiaries
that are registered under the Investment Advisers Act or any other person
"associated" (as defined under the Investment Advisers Act) with the Company or
any of such Continuing Subsidiaries is subject to disqualification pursuant to
Section 203(e) of the Investment Advisers Act or to serve as an investment
adviser or as an associated person to a registered investment adviser, or
subject to disqualification pursuant to Rule 206(4)-3 under the Investment
Advisers Act or subject to disqualification to serve as a broker-dealer under
Section 15 of the Exchange Act or the subject of a rebuttable presumption
pursuant to Rule 206(4)-4(b) under the Investment Advisers Act. None of the
Company, any of its Continuing Subsidiaries or any "affiliated person" (as
defined under the Investment Company Act) thereof is subject to disqualification
as an investment adviser or any other capacity contemplated by the Investment
Company Act for any investment company under Section 9(a) of the Investment
Company Act.
(f) PIM is registered as an investment adviser under the
Investment Advisers Act. Pioneer Funds Distributor, Inc. ("PFD") is registered
as a broker-dealer under the Exchange Act and is a member in good standing of
the NASD. Pioneering Services Corporation
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("PSC") is registered as a transfer agent under the Exchange Act. Pioneer
Management (Ireland) Limited is registered as a transfer agent under the
Exchange Act.
(g) PIM and each Fund have adopted a written code of ethics
and a written policy regarding personal trading. Such code and policy currently
comply, and have complied, in all material respects with Section 17(j) of the
Investment Company Act, Rule 17j-1 thereunder, and Section 204A of the
Investment Advisers Act, as the case may be. To the knowledge of the Company,
there has been no violation of PIM's code of ethics and personal trading policy
that has not been reported to the Board of Trustees of the Funds and would
constitute a fraud upon any of the Funds.
3.19 REGISTERED INVESTMENT COMPANIES.
(a) Each Fund is, and at all times required under the
Investment Company Act has been, duly registered with the Commission as an
investment company under the Investment Company Act and has been duly organized,
and is validly existing and in good standing under the laws of the jurisdiction
of its organization and has the requisite power and authority to carry on its
business as it is now being conducted.
(b) The Company has made available to the Parent and the
Purchaser copies of the (i) audited financial statements for each of the Funds
for each of their respective fiscal years ended in 1999 (the "Fund Annual
Financial Statements") and (ii) any audited or unaudited semi-annual financial
statements for a Fund for its semi-annual period, if any, ended after the date
of the Annual Financial Statements and on or prior to February 29, 2000 (the
"Fund Interim Financial Statements" and, together with the Fund Annual Financial
Statements, the "Fund Financial Statements"). Each Fund Financial Statement has
been prepared in accordance with generally accepted accounting principles
consistently applied by the Fund on a consistent basis, except as may be
indicated therein or in the notes thereto, and fairly presents in all material
respects the financial position and statement of net assets as of the date
thereof and the results of operations for the period then ended, subject, in the
case of the Fund Interim Financial Statements, to normal year-end adjustments
and to the absence of complete notes. None of the Funds has incurred any
obligation or liability (contingent or other) that, individually or in the
aggregate, is or when accrued, would be, material to the financial condition or
results of operations of such Fund, except as reflected in its Fund Financial
Statements or as may be incurred in the ordinary course of its investment
operations since the date of the Fund Interim Financial Statements and which
would not, individually or in the aggregate, reasonably be expected to have a
Fund Material Adverse Effect. For purposes of this Agreement, "Fund Material
Adverse Effect" shall mean any change, effect or circumstance that is, or is
reasonably likely to result in, liability to the Company or any of its
Continuing Subsidiaries that would have a Company Material Adverse Effect or
which would be materially adverse to the business or operations of the Funds and
Non-Registered Funds, taken as a whole, other than changes that result from
economic factors affecting the economy as a whole or the industry or
geographical region in which the Fund or Non-Registered Fund invests, changes in
the net assets of such Funds or Non-Registered Funds due to redemptions, changes
in the market value of portfolio securities or changes that are the result of
factors generally affecting the mutual fund industry.
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(c) Each Client Contract with a Fund, the Administration
Agreement among the Funds and PIM (the "Administration Agreement"), each
Underwriting Agreement (the "Underwriting Agreement") between PFD and a Fund,
and each agreement (the "Services Agreement") between PSC and a Fund, and any
subsequent renewal of any such agreement, has been duly authorized, executed and
delivered by PIM, PFD or PSC, as the case may be, and the Fund and is a valid
and legally binding agreement, enforceable against PIM, PFD, PSC, as the case
may be, and the Fund and, if applicable, has been adopted in compliance with
Section 12(b) or Section 15 of the Investment Company Act.
(d) Each current prospectus (which term, as used in this
Agreement, shall include any related statement of additional information), as
amended or supplemented, relating to each Fund has been supplied or made
available to the Parent and the Purchaser. Each such prospectus, as amended or
supplemented, is in substantial compliance with the requirements of the
Securities Act and the Investment Company Act, and, where applicable, the rules
of the NASD, except for such non-compliance which would not, individually or in
the aggregate, reasonably be expected to have a Fund Material Adverse Effect.
Each of the Funds has filed all prospectuses, financial statements, other forms,
reports, sales literature, and advertising, and any other documents required to
be filed with applicable Governmental Entities, and any amendments thereto (the
"Reports"), the failure to file which would not, individually or in the
aggregate, have a Fund Material Adverse Effect. The Reports have been prepared
in accordance with the requirements of applicable law, except for such
non-compliance which would not, individually or in the aggregate, reasonably be
expected to have a Fund Material Adverse Effect.
(e) Except as set forth in the Fund Financial Statements or
current prospectuses, none of the Client Contracts with a Fund, the
Administration Agreement, the Underwriting Agreements or the Services Agreements
contains any undertaking by PIM, PFD or PSC, as the case may be, to cap fees or
to reimburse any or all fees thereunder.
(f) A copy of each distribution plan adopted by the Board of
any Fund under Rule 12b-1 under the Investment Company Act ("12b-1 Plan") (or
form of 12b-1 Plan adopted by similar series or classes of shares offered by a
Fund) has been made available to Parent; and all payments due since December 31,
1998 and prior to the most recently ended payment period under each distribution
plan or principal underwriting agreement to which any Fund is a party have been
made in compliance with the related 12b-1 Plan.
(g) Each of the proxy solicitation materials to be
distributed to the shareholders of each Fund in connection with the approvals
described in Section 4.3 will contain all information necessary in order to make
the disclosure of information therein satisfy the requirements of Section 14 of
the Exchange Act, Section 20 of the Investment Company Act and the rules and
regulations thereunder and such materials (except to the extent supplied by or
related to Parent or its affiliates) will be complete in all material respects
and will not contain (at the time such materials are distributed, filed or
provided at the time of the relevant vote of the shareholders of each Fund in
connection with the approvals described in Section 4.3) any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading or necessary to correct any statement or any earlier
communication with respect to
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the solicitation of a proxy for the same meeting or subject matter which has
become false or misleading.
(h) Neither the execution and delivery of this Agreement by
the Company, nor the consummation by the Company of the transactions
contemplated hereby, nor compliance by the Company with any of the provisions
hereof will (i) (x) violate, conflict with, or result in a breach of any
provision of the charter, by-laws or similar organizational documents of any of
the Funds, or (y) violate, conflict with, or result in a breach of any provision
of, or constitute a default (or an event that, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance or payment required by, or result in a right of
termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
any of the Funds, under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, distribution
agreement, or joint venture agreement to which any of the Funds is a party or to
which any of them or any of their respective properties or assets may be subject
or (ii) violate any judgment, ruling, order, writ, injunction, decree, statute,
rule or regulation applicable to any of the Funds or any of their respective
properties or assets; except, in the case of each of clauses (i)(y) and (ii)
above, for such violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens, security interests, charges or encumbrances
that, individually or in the aggregate, would not reasonably be expected to have
a Fund Material Adverse Effect.
(i) Each of the Funds is governed by a board of trustees
consisting of at least 50% of trustees who are not "interested persons" (as
defined in the Investment Company Act) of such Fund.
(j) None of the Funds (a) is in violation of, or since
January 1, 1998 has violated, any applicable provisions of any laws, statutes,
ordinances or regulations (including any rules or regulations of any
non-governmental self-regulatory organization or agency) or (b) has received any
notice from any non-governmental self-regulatory organization or agency,
governmental body, agency, official or authority or any other person that any
Fund is in violation of, or has violated, any applicable provisions of any laws,
statutes, ordinances or regulations, except in the case of clauses (a) and (b)
for violations or alleged violations which, individually or in the aggregate,
would not reasonably be expected to have a Fund Material Adverse Effect. Without
limiting the generality of the foregoing, none of the Funds has been enjoined,
indicted, convicted or made the subject of disciplinary proceedings, consent
decrees or administrative orders on account of any violation of the Securities
Act, the Exchange Act, the Investment Company Act or any similar law of a
non-U.S. jurisdiction. The Funds have all permits, licenses and franchises from
Governmental Entities required to conduct their businesses as now being
conducted, except for such permits, licenses and franchises the absence of which
would not, individually or in the aggregate, reasonably be expected to have a
Fund Material Adverse Effect.
(k) Each Fund has elected to qualify and, for all taxable
years that a Continuing Subsidiary served as investment adviser and with respect
to which the applicable statute of limitations (including any extensions) has
not expired ("open taxable years"), has continuously qualified to be treated as
a "regulated investment company" under Subchapter M of the Code and has
continuously been eligible to compute, and has for each such taxable year
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computed, its federal income tax under Section 852 of the Code and has no
earnings and profits accumulated in any taxable year that is not an open taxable
year. At the Effective Time, all federal, state, local and foreign tax returns
with respect to taxes for any taxable period for which the applicable statute of
limitations (including any extensions) has not expired and during which a
Continuing Subsidiary has served as investment adviser that were or are required
to be filed on or before such date by or on behalf of a Fund ("Fund Tax
Returns') were or shall have been timely filed and were or shall be complete and
correct in all material respects and all federal and other taxes, including
interest, penalties, and additions to tax, shown or required to be shown as due
on such returns, shall have been paid or provided for. No such Fund Tax Return
or other filing is currently under audit, no assessment has been asserted with
respect to such Fund Tax Returns or other filings, and no requests for waivers
of the time to make any such assessment are pending. None of the Funds is
delinquent in the payment of any material tax, assessment, or governmental
charge.
(l) There are no actions, suits, proceedings or
investigations pending or to the best knowledge of the Company, threatened
against any of the Funds, nor is any Fund subject to any order, judgment, writ,
injunction or decree naming such Fund, except in either case for matters that,
individually or in the aggregate, would not reasonably be expected to have a
Fund Material Adverse Effect.
(m) The books and records of each Fund reflecting, among
other things, the investment transactions undertaken on behalf of each Fund, the
purchase and sale of shares of that Fund by its holders of shares of beneficial
interests (collectively, "Fund Stockholders"), the number of issued and
outstanding Fund shares owned by each Fund Stockholder, and the state or other
jurisdiction in which those Fund shares were offered and sold, are, to the
knowledge of the Company, complete and accurate in all respects, except for such
omissions or errors which, individually or in the aggregate, would not
reasonably be expected to have a Fund Material Adverse Effect.
(n) Each Fund has in full force and effect such insurance as
is required by the Investment Company Act and has directors' and officers' and
errors and omissions insurance policies. Copies of all insurance policies of the
Funds have been made available to Parent. All premiums that are due and payable
under such policies have been paid.
(o) Since December 31, 1999, there has not been any event,
change or effect which, individually or in the aggregate, has resulted in a Fund
Material Adverse Effect.
3.20 NON-REGISTERED FUNDS.
(a) Each Non-Registered Fund has been duly organized, and is
validly existing and in good standing under the laws of the jurisdiction of its
organization and has the requisite power and authority to carry on its business
as it is now being conducted.
(b) The Company has made available to Parent copies of the
audited financial statements for each of the Non-Registered Funds for each of
their respective fiscal years ending in 1999 (the "Non-Registered Fund Annual
Financial Statements") and, to the extent that the Company or any Continuing
Subsidiary is contractually obligated to produce such
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financial statements, the unaudited financial statements for each of the
Non-Registered Funds for each of their respective fiscal periods ended after the
date of the Non-Registered Funds Annual Financial Statements and on or before
February 29, 2000 (the "Non-Registered Fund Interim Financial Statements" and,
together with the Non-Registered Fund Annual Financial Statements, the
"Non-Registered Fund Financial Statements"). Each Non-Registered Fund Financial
Statement has been prepared in accordance with such accounting principles as the
Non-Registered Fund purports to comply in any report provided to the holders of
the shares or other equity interests in the Non-Registered Funds. None of the
Non-Registered Funds has incurred any obligation or liability (contingent or
other) that, individually or in the aggregate, is or when accrued, would be,
material to the financial condition or results of operations of such
Non-Registered Fund, except (i) as reflected in its Non-Registered Fund
Financial Statements, (ii) as may be incurred in the ordinary course of its
investment operations since the date of the Non-Registered Fund Financial
Statements, or (iii) which would not, individually or in the aggregate,
reasonably be expected to have a Fund Material Adverse Effect.
(c) There are no actions, suits, proceedings or
investigations pending or, to the best knowledge of the Company, threatened
against any of the Non-Registered Funds, nor is any Non-Registered Fund subject
to any order, judgment, writ, injunction or decree naming such Non-Registered
Fund, except in either case for matters that, individually or in the aggregate,
would not reasonably be expected to have a Fund Material Adverse Effect.
(d) None of the Non-Registered Funds (a) is in violation of,
or has since January 1, 1998 violated, any applicable provisions of any laws,
statutes, ordinances or regulations (including any rules or regulations of any
non-governmental self-regulatory organization or agency) or (b) has received any
notice from any non-governmental self-regulatory organization or agency,
governmental body, agency, official or authority or any other person that any
Non-Registered Fund is in violation of, or has violated, any applicable
provisions of any laws, statutes, ordinances or regulations, except in the case
of clauses (a) and (b) for violations or alleged violations which, individually
or in the aggregate, would not reasonably be expected to have a Fund Material
Adverse Effect. Without limiting the generality of the foregoing, none of the
Non-Registered Funds has been enjoined, indicted, convicted or made the subject
of disciplinary proceedings, consent decrees or administrative orders on account
of any violation of the Securities Act, the Exchange Act, the Investment Company
Act or any similar law of a non-U.S. jurisdiction. The Non-Registered Funds have
all permits, licenses and franchises from Governmental Entities required to
conduct their businesses as now being conducted, except for such permits,
licenses and franchises the absence of which would not, individually or in the
aggregate, reasonably be expected to have a Fund Material Adverse Effect.
3.21 MATERIAL CONTRACTS. Except as disclosed in the Commission
Filings filed prior to the date hereof, as of the date hereof, neither the
Company nor any of its Continuing Subsidiaries is a party to or bound by any
written or oral contract:
(a) with respect to the employment of any directors or
officers, other than noncompetition and confidentiality agreements with such
persons and other than contracts terminable by the Company upon no more than 60
days' notice without penalty;
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(b) that is a "material contract" of the Company (as is
defined in Item 601(b)(10) of Regulation S-K of the Commission) to be performed
after the date of this Agreement;
(c) that, after the Effective Time, will materially restrict
the conduct of any line of business by the Company or its Continuing
Subsidiaries or upon consummation of the Merger will materially restrict the
ability of the Surviving Corporation to engage in any line of business in which
it may lawfully engage;
(d) with a labor union (including any collective bargaining
agreement); or
(e) any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
Stockholder approval or the consummation of any of the transactions contemplated
by this Agreement, or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement.
All of the foregoing, together with the Client Contracts,
Administration Agreement, Underwriting Agreements and Service Agreements, are
collectively called "Material Contracts." To the extent Material Contracts are
evidenced by documents, copies thereof have been delivered or made available to
Parent. Section 3.23 of the Disclosure Schedule sets forth a description of the
material terms of each Material Contract that has not been reduced to writing.
Each Material Contract is in full force and effect and is enforceable against
the Company or the applicable Continuing Subsidiary, as the case may be, in
accordance with its terms, except where the failure to be in full force and
effect would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. There does not exist under any Material
Contract any material default or condition or event that, after notice or lapse
of time or both, would constitute a default on the part of the Company or its
Continuing Subsidiary or, to the knowledge of the Company, on the part of any
other parties to such Material Contracts except for such defaults which,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
3.22 INSURANCE. The Company and its Continuing Subsidiaries
maintain policies of insurance on terms, and in amounts, that have previously
been disclosed to the Parent.
3.23 STATE TAKEOVER STATUTES. The Board of Directors of the
Company has taken all action necessary to ensure that the restrictions on
business combinations contained in Section 203 of Delaware Law will not apply to
the Merger and the other transactions contemplated by this Agreement. To the
knowledge of the Company, no other state takeover statute is applicable to the
Merger or the other transactions contemplated by this Agreement.
3.24 VOTE REQUIRED. The affirmative vote of the holders of a
majority of the Shares is the only vote of the holders of any class or series of
capital stock of the Company necessary to approve this Agreement and the Merger.
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3.25 HARBOR GLOBAL.
(a) As of the Effective Time, shares of equity, intercompany
obligations or similar equity or debt interests in the entities to be
transferred to Harbor Global pursuant to the Distribution Agreement (the "Harbor
Global Entities") and cash in an amount not to exceed $25 million (or such
lesser number that is equal to $25 million minus the aggregate amount of the
Company's obligations (but not obligations in connection with Options or
restricted stock) to employees of Harbor Global under severance or termination
agreements between such employees and the Company to the extent such obligations
are not assumed by Harbor Global with the consent of such employees) will be the
only assets that are owned, leased or licensed by Harbor Global which were
previously owned, leased or licensed by the Company or any Continuing
Subsidiary.
(b) Except as disclosed in Section 3.25(b) of the Disclosure
Schedule or as set forth in Schedule 4.2(a) of the Distribution Agreement and
except for such other liabilities as shall not exceed $35 million, Harbor Global
has no liabilities of any kind whether accrued, contingent, absolute,
determined, determinable or otherwise.
(c) Except as disclosed in Section 3.25(c) of the Disclosure
Schedule and except for liabilities (but not in an amount in excess of $7.5
million) with respect to which the Company is indemnifiable by Harbor Global
pursuant to the Distribution Agreement or has obtained a release therefrom, none
of the Company or any of its Continuing Subsidiaries is liable (whether on a
contingent, determinable or other basis) for any liabilities of any kind
(whether accrued, contingent, absolute, determined, determinable or otherwise)
of the Harbor Global Entities, including, without limitation, pursuant to any
indemnification arrangement, capital commitment or guarantee.
(d) Section 3.25(d) of the Disclosure Schedule sets forth a
list of all agreements or arrangements between or among the Company or any of
its Continuing Subsidiaries, on the one hand, and any Harbor Global Entity, on
the other hand, or to which the Company or any of its Continuing Subsidiaries,
on the one hand, and any Harbor Global Entity, on the other hand, are parties.
The Parent agrees that the Company shall be entitled, from time to time, to
supplement Section 3.25(d) of the Disclosure Schedule to provide for
intercompany services and subleases. If the Parent shall reasonably object to
any such addition to Section 3.25(d) of the Disclosure Schedule, the Company
shall use commercially reasonable efforts to implement alternatives not
involving the Company or any Continuing Subsidiary as promptly as reasonably
practicable and if such alternative cannot be implemented, the Company shall not
implement the proposed arrangement with Harbor Global without the Parent's
consent, which consent shall not unreasonably be withheld, conditioned or
delayed.
3.26 BANK OF ITALY REQUIREMENTS. As of the Effective Time, the
Company and its Continuing Subsidiaries have or will implement prior to the
Effective Time the systems necessary to comply with the requirements of the Bank
of Italy regarding the activities of the Italian banking groups, a summary of
which has previously been provided by the Parent to the Company.
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3.27 COMPANY'S KNOWLEDGE. For purposes of this Agreement and all
certificates and other documents delivered in connection herewith, the term
"Company's knowledge" or "Company's best knowledge" or similar phrases shall
mean the knowledge of the Chief Executive Officer, President, Chief Financial
Officer and General Counsel of the Company, PIM, PFD or PSC, which shall be
deemed to include the knowledge that such person would have had if he or she had
made reasonable inquiry.
3.28 SCHEDULES AND EXHIBITS. Disclosure of any fact or item in
the Disclosure Schedule (or any update thereto) shall be deemed to modify (a)
only the corresponding section of this Agreement and (b) other sections of this
Agreement to the extent it is reasonably clear (notwithstanding the absence of a
specific cross reference) from a reading of the disclosure that the disclosure
is applicable to such other sections.
3.29 NO IMPLIED REPRESENTATION. Notwithstanding anything
contained in this Article 3 or any other provision of this Agreement, it is the
explicit intent of the Parent and the Purchaser that the Company is making no
representation or warranty whatsoever, express or implied, beyond those
expressly given in this Agreement, including, but not limited to, any implied
warranty or representation as to condition, merchantability, suitability or
fitness for a particular purpose as to any of the properties or assets of the
business conducted by the Company and the Subsidiaries and, except as expressly
represented in this Agreement, it is understood that the Parent and the
Purchaser take such business, properties and assets on an "as is" and "where is"
basis. It is understood that any cost estimates, projections, or other
predictions contained or referred to in the Confidential Descriptive Memorandum,
dated March 2000, distributed by the Financial Advisors, or, unless expressly
provided otherwise in this Agreement, otherwise provided by the Company or the
Financial Advisors, are not and shall not be deemed to be representations or
warranties of the Company.
ARTICLE 4
CONDUCT OF BUSINESS
4.1 CONDUCT PRIOR TO EFFECTIVE TIME. Except as otherwise
specifically set forth herein or as disclosed in the Disclosure Schedule, the
Company covenants and agrees that, unless the Parent shall otherwise consent
(which consent shall not be unreasonably withheld or delayed), prior to the
Effective Time:
(a) The business of the Company and its Continuing
Subsidiaries shall in all material respects be conducted only in, and the
Company and its Continuing Subsidiaries shall not take any matter or action
except in, the ordinary course of business, and the Company shall use
commercially reasonable efforts, to maintain and preserve its and each
Continuing Subsidiary's business organization, assets, employees and
advantageous business relationships;
(b) Neither the Company nor any of its Continuing
Subsidiaries shall directly or indirectly do any of the following (except as
contemplated by this Agreement or the Distribution Agreement):
(i) other than upon exercise of Options outstanding on
the date hereof pursuant to the Plans, the sale of Shares pursuant
to the ESPP or the issuance of
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Shares pursuant to any deferred compensation arrangement, issue,
sell, pledge, dispose of or encumber, or authorize, propose or agree
to the issuance, sale, pledge, disposition or encumbrance of, any
shares of, or any options, warrants or rights of any kind to acquire
any shares of, or any securities convertible into or exchangeable or
exercisable for any shares of, capital stock of any class of the
Company or any of its Continuing Subsidiaries or any other
securities in respect of, in lieu of, or in substitution for Shares
outstanding as of the date hereof;
(ii) sell, lease pledge or encumber any assets material
to the Company and its Continuing Subsidiaries taken as a whole,
except in the ordinary course of business;
(iii) amend its charter or by-laws or similar
organizational documents;
(iv) split, combine or reclassify any shares of its
capital stock or declare, set aside for payment or pay any dividend
or distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock other than, with respect to
dividends or distributions, cash dividends and distributions by a
wholly-owned Subsidiary of the Company to the Company or to a
Subsidiary all of the capital stock of which (other than directors'
qualifying shares) is owned directly or indirectly by the Company;
(v) redeem, purchase or otherwise acquire or offer to
redeem, purchase or otherwise acquire any of its capital stock or
rights to acquire capital stock, except the repurchase by the
Company of restricted common stock in accordance with the terms of
the Plans;
(vi) except pursuant to Section 5.5, enter into an
agreement with respect to any merger, consolidation, liquidation or
business combination, or any acquisition or disposition of all or
substantially all of the assets or securities of the Company;
(vii) except pursuant to Section 5.5, enter into an
agreement with respect to the disposition of a material amount of
assets or securities, or any release or relinquishment of any
material contract rights, or any comparable event (including, but
not limited to, the sale or other disposition of any treasury stock
(other than in connection with the issuance of Shares pursuant to
any deferred compensation arrangement));
(viii) transfer the stock of any Continuing Subsidiary
to any other Subsidiary or any assets or liabilities to any new or
existing Subsidiary;
(ix) acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other business
organization or division thereof or make any investment either by
purchase of stock or securities, contributions to capital (other
than to wholly-owned Subsidiaries), property transfer or purchase of
any property or assets of any other individual or entity (other than
providing the initial capital of any investment company sponsored by
a Continuing Subsidiary);
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(x) other than in the ordinary course of business, incur
any indebtedness for borrowed money or issue any debt securities or
assume, guarantee, endorse or otherwise as an accommodation become
responsible for, the obligations of any other individual or entity,
or make any loans or advances;
(xi) authorize, recommend or propose any material change
in its capitalization;
(xii) change any assumption underlying, or method of
calculating, any bad debt, contingency or other reserve;
(xiii) (A) revalue any assets of the Company or any of
its Subsidiaries, other than reevaluations that are required in
accordance with generally accepted accounting principles or for
purposes of Section 244 of Delaware Law or (B) change or modify in
any material respect any existing accounting principle, method or
practice other than as required by generally accepted accounting
principles;
(xiv) make any capital expenditure or commitment for
which it is not contractually bound at the date hereof, except for
capital expenditures or commitments not to exceed $2.5 million per
year in the aggregate;
(xv) enter into any new Material Contract (other than in
the ordinary course of business), or modify in any respect
materially adverse to the Company or any of its Continuing
Subsidiaries any existing Material Contract;
(xvi) settle any material actions, suits, proceedings or
investigations other than any settlement which involves only the
payment of damages in an amount less than $1 million and does not
involve injunctive or other equitable relief; or
(xvii) authorize or propose any of the foregoing, or
enter into or modify any contract, agreement, commitment or
arrangement to do any of the foregoing.
(c) Notwithstanding the foregoing, the Company shall be
permitted to, and shall use commercially reasonable efforts to, enter into an
agreement to sell or otherwise dispose of, and sell or otherwise dispose of, the
Company's interest in Pioneer Universal Pension Fund Company prior to the
Effective Time. The Company shall consult with the Parent in structuring and
carrying out the disposition of Pioneer Universal Pension Fund Company. In
addition, notwithstanding the foregoing, the Company and the Parent shall
cooperate in good faith regarding the status of Beijing Pioneer Zhong Investment
Consulting Co., Ltd. as a Continuing Subsidiary and the Company shall use
commercially reasonable efforts to effect any mutually acceptable arrangement
regarding Beijing Pioneer Zhong Investment Consulting Co., Ltd.
(d) Neither the Company nor any of its Continuing
Subsidiaries shall adopt or amend (except as may be required by law or under
this Agreement) any bonus, profit sharing, compensation, stock option, stock
purchase, pension, retirement, deferred compensation, employment or other
employee benefit plan, agreement, trust, fund or other arrangement for the
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benefit or welfare of any director, officer or employee or former director,
officer or employee or, except in the ordinary course of business, increase the
compensation or fringe benefits of any employee or former director, officer or
employee or pay any benefit not required by any existing plan, arrangement or
agreement;
(e) Neither the Company nor any of its Continuing
Subsidiaries shall take any action other than in the ordinary course of business
with respect to the grant of any severance or termination pay or with respect to
any increase of benefits payable under its severance or termination pay policies
in effect on the date hereof;
(f) Neither the Company nor any of its Continuing
Subsidiaries shall make any tax election or, except in the ordinary course of
business, settle or compromise any federal, state, local or foreign tax
liability; and
(g) Neither the Company nor any of its Continuing
Subsidiaries shall agree, in writing or otherwise, to take any of the foregoing
actions or any action which would make any representation or warranty in Article
3 hereof untrue or incorrect in any material respect, or would materially impair
or prevent the occurrence of any condition in Article 6 hereof.
4.2 COMMISSION FILINGS. The Company shall promptly provide the
Parent (or its counsel) with copies of all filings made by the Company with the
Commission or any other state or federal Governmental Entity in connection with
this Agreement and the transactions contemplated hereby. The Parent and the
Purchaser shall promptly provide the Company (or its counsel) with copies of all
filings made by them with the Commission or any other state or federal
Governmental Entity in connection with the Agreement and the transactions
contemplated hereby.
4.3 APPROVAL OF NEW FUND CONTRACTS. The Parent, Purchaser and
the Company recognize that the transactions contemplated by this Agreement shall
constitute an assignment and termination of certain of the Client Contracts, the
Underwriting Agreement and the Rule 12b-1 Plans under the terms thereof and the
Investment Company Act. The Parent, Purchaser and the Company agree to use
commercially reasonable efforts and cooperate in obtaining as promptly as
practicable such authorizations and approvals of the Boards of Directors or
Trustees of the applicable Funds (including any separate approvals of
disinterested directors or trustees) and/or the shareholders thereof, as may be
required by the Investment Company Act, of new contracts, on substantially the
same terms and conditions as the Client Contracts, Underwriting Agreement and
the Rule 12b-1 Plans to be terminated (the "Fund Approvals"). The Parent and
Purchaser agrees to provide such information, for provision to the Board of
Directors or Trustees of one or more Funds ("Trustee Materials") or for
inclusion in a proxy statement to the shareholders thereof, as may be required.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 PREPARATION OF PROXY STATEMENT.
(a) The Company shall:
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(i) (A) prepare, in cooperation with the Parent, the
Proxy Statement and use its commercially reasonable efforts to
obtain and furnish the information required to be included by it in
the Proxy Statement, and respond promptly to any comments made by
the Commission with respect to the Proxy Statement and any
preliminary version thereof and cause the Proxy Statement to be
mailed to its Stockholders at the earliest practicable time
following the execution of this Agreement and (B) except and to the
extent otherwise permitted pursuant to Section 5.5 below, through
its Board of Directors recommend approval and adoption of this
Agreement and the Merger and use its commercially reasonable efforts
to obtain the necessary approval of the Merger by its Stockholders
at a Stockholders' meeting (the "Company Stockholders' Meeting") as
promptly as practicable following the execution of this Agreement;
and
(ii) if at any time prior to the Effective Time of the
Merger any event shall occur which is required to be set forth in an
amendment or a supplement to the Proxy Statement, the Company will
promptly prepare and mail such an amendment or supplement.
(b) Notwithstanding any withdrawal, modification or change
in any approval or recommendation of the Board of Directors of the Company
pursuant to Section 5.5, the Company agrees to hold the Company Stockholders'
Meeting to submit the approval of and adoption of this Agreement and the Merger
to Stockholders in accordance with the time period specified in Section 5.1.
5.2 DISPOSITION OF THE SHARES. The Parent and the Purchaser
shall not, and they shall cause their direct and indirect subsidiaries not to,
sell, transfer, assign, encumber or otherwise dispose of the Shares beneficially
owned by the Parent or the Purchaser or any director or indirect Subsidiary of
the Parent or the Purchaser, as of the date of this Agreement, or acquired prior
to the meeting of the Stockholders, if any is required, pursuant to which the
Shares are voted with respect to the Merger; PROVIDED, HOWEVER, that this
Section 5.2 shall not apply to the sale, transfer, assignment, encumbrance or
other disposition of any or all of such Shares in transactions involving solely
the Parent, the Purchaser and/or one or more of their direct or indirect
subsidiaries or in connection with any Qualified Acquisition Proposal (as
defined in Section 5.5).
5.3 FEES AND EXPENSES.
(a) Except as otherwise provided in this Section 5.3,
Section 7.5 or in the Distribution Agreement, each party shall bear all of the
fees and expenses incurred by it in connection with the negotiation and
performance of this Agreement, and neither party may recover any such fees and
expenses from the other party upon any termination of this Agreement. The
Company agrees to bear all of the fees and expenses incurred by the Funds in
connection with the transactions contemplated by the Agreement.
(b) The provisions contained in this Section 5.3 shall
survive any termination of this Agreement.
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5.4 ADDITIONAL AGREEMENTS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by this
Agreement, and to cooperate with each of the other parties hereto in connection
with the foregoing, including using commercially reasonable efforts: (A) to
obtain all necessary waivers, consents and approvals from other parties to loan
agreements, leases and other contracts as set forth on SCHEDULE 6.1(B) hereto;
(B) to obtain all necessary consents, approvals and authorizations as are
required to be obtained under any federal, state or foreign laws or regulations
as set forth on SCHEDULE 6.1(B) hereto; (C) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby; (D) to effect all necessary
registrations and filings, including, but not limited to, filings under the
Xxxx-Xxxxx-Xxxxxx Act and the EC Regulation and submissions of information
requested by governmental authorities; (E) to obtain the approvals of the Bank
of Italy as contemplated by Section 6.1(e) of this Agreement and the Board of
Governors of the Federal Reserve System as contemplated by Section 6.1(f); and
(F) to fulfill all conditions to this Agreement. The Company will use such
commercially reasonable efforts as the Parent shall request (at the expense of
the Parent) to keep available to the Parent and the Surviving Corporation the
present key officers and employees of the Company and its Continuing
Subsidiaries and to preserve for the Parent and the Surviving Corporation the
present relationships and good will of the Company and its Continuing
Subsidiaries with their respective lenders, suppliers, customers and other third
parties having business relations with them. For purposes of the foregoing, the
obligation of the Company, the Parent and the Purchaser to use "commercially
reasonable efforts" or "reasonable efforts" to obtain waivers, consents and
approvals to loan agreements, leases and other contracts shall not include any
obligation to agree to a modification of the terms of such documents, except as
expressly contemplated hereby or to make any guaranty or monetary payment in
consideration of such waiver, consent or approval.
5.5 NO SOLICITATION.
(a) None of the Company or any of the Continuing
Subsidiaries or any of their respective officers, directors, employees,
representatives and agents (including, without limitation the Financial
Advisors) shall, directly or indirectly, solicit, initiate, engage or
participate in discussions or negotiations with, or provide any non-public
information to, any corporation, partnership, person or other entity or group
other than the Parent, the Purchaser or another affiliate of the Parent (a
"Third Party") and other than in connection with this Agreement, concerning (or
concerning the business of the Company or any Continuing Subsidiary in
connection with) any tender offer for more than 20% of the Shares on a
fully-diluted basis (in calculating the number of fully-diluted Shares for this
purpose, only (A) Shares covered by Options, and (B) Shares reserved for
issuance pursuant to the ESPP, being considered dilutive), exchange offer,
merger, consolidation, sale of assets representing more than 20% of the total
book value of all assets outside of the ordinary course of business,
recapitalization, accumulation of Shares or proxy solicitation (other than as
contemplated by this Agreement) or other business combination involving the
Company or any Continuing Subsidiary (any such proposed tender offer, exchange
offer, merger, consolidation, sale of material assets, recapitalization,
accumulation of Shares or proxy solicitation or other business combination being
referred to herein as "Acquisition Proposals"). Notwithstanding the foregoing,
the
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Company, its Continuing Subsidiaries, and their respective officers, directors,
employees, representatives and agents (i) may, in the case of a Qualified
Acquisition Proposal (as hereinafter defined), furnish or cause to be furnished
information concerning the Company's and its Continuing Subsidiaries'
businesses, properties or assets to a Third Party (subject to such Third Party
executing a confidentiality agreement on terms no less favorable to the Company
than those in the Confidentiality Agreement between the Parent and the Company
dated Xxxxx 00, 0000), (xx) may, in the case of a Qualified Acquisition Proposal
only, enter into, participate in, conduct or engage in discussions or
negotiations with such Third Party, (iii) may take any position with respect to
an Acquisition Proposal in accordance with Rules 14a-9 and 14e-2 promulgated
under the Exchange Act, and (iv) may, in the case of a Qualified Acquisition
Proposal and in compliance with the provisions of clause (c) of this Section
5.5, enter into an agreement to consummate a Qualified Acquisition Proposal. As
used herein, "Qualified Acquisition Proposal" means a bona fide, written
Acquisition Proposal at a price per Share that the Company's Board of Directors
(after consultation with a financial advisor of nationally recognized
reputation) believes in good faith to be superior to the Cash Consideration and
in the best interests of the Stockholders.
(b) The Company will promptly notify the Parent of, and will
disclose to the Parent all material details of any Acquisition Proposal it
receives (including, without limitation, the identity of the Third Party making
such Acquisition Proposal). In the event that the Company furnishes any
nonpublic information to any party other than the Parent, it shall
simultaneously provide the Parent with copies of or access to all such
information. Nothing in this paragraph (b) shall be construed as interfering
with the Company's obligations to its Stockholders under Rule 14e-2 promulgated
under the Exchange Act.
(c) Except as expressly permitted by this Section 5.5(c),
neither the Company's Board of Directors nor any committee thereof shall or
shall resolve to (i) not recommend or withdraw its approval or recommendation of
the Merger, this Agreement or any of the transactions contemplated hereby, (ii)
modify or qualify such approval or recommendation in a manner adverse to the
Parent or the Purchaser, (iii) approve or recommend any proposed Acquisition
Proposal or (iv) cause the Company to enter into any letter of intent, agreement
in principle, acquisition agreement or other similar agreement relating to an
Acquisition Proposal (or publicly propose to do any of the foregoing).
Notwithstanding the foregoing, in the event that prior to the Company
Stockholders' Meeting the Company's Board of Directors determines in good faith,
after it has received a Qualified Acquisition Proposal and after consultation
with outside counsel, that it must take such action to comply with its fiduciary
duties to the Stockholders under applicable law, then the Company's Board of
Directors may (subject to this sentence) take any of the actions contemplated by
clauses (i), (ii), (iii) and (iv) of the preceding sentence (a "Subsequent
Action"), but only (i) at a time that is after the fifth business day following
delivery by the Company to the Parent of a written notice advising the Parent
that the Company's Board of Directors has received a Qualified Acquisition
Proposal specifying the material terms and conditions of such Qualified
Acquisition Proposal, identifying the person making such Qualified Acquisition
Proposal stating that it intends to make or take a Subsequent Action; (ii) if
the Parent does not, within such five business days following delivery of such
notice, offer to make such adjustments in the terms and conditions of this
Agreement such that the Company's Board of Directors by majority vote determines
in its good faith judgment (after consultation with a financial advisor of
nationally recognized reputation) to be as favorable to the
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Stockholders as such Qualified Acquisition Proposal; and (iii) if the Company
has complied with this Section 5.5.
(d) The Company shall immediately cease and cause to be
terminated any activities, discussions, or negotiations, existing on the date
hereof, with any person with respect to any Acquisition Proposal, and will
promptly request that each such person return or destroy all confidential
information previously produced to that person by the Company or its
Subsidiaries.
5.6 NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to the Parent, of (i) the obtaining by it of actual knowledge as
to the matters set forth in clauses (x) and (y) of clause (ii) of this sentence,
or (ii) the occurrence, or failure to occur, of any event which occurrence or
failure to occur causes (x) any representation or warranty made by the Company
and contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time, or (y) any
material failure of the Company or of any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; PROVIDED, HOWEVER, that
no such notification shall be deemed to cure any breach or otherwise affect the
representations or warranties of the Company or the conditions to the
obligations of the parties hereunder. The Parent shall give prompt notice to the
Company of (i) the obtaining by it of actual knowledge as to the matters set
forth in clauses (x) and (y) of clause (ii) of this sentence, or (ii) the
occurrence, or failure to occur, of any event which occurrence or failure to
occur causes (x) any representation or warranty made by the Parent or the
Purchaser contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time, or (y) any
material failure of the Parent or the Purchaser, or of any officer, director,
employee or agent thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement; PROVIDED,
HOWEVER, that no such notification shall be deemed to cure any breach or
otherwise affect the representations or warranties of the Parent or the
Purchaser or the conditions to the obligations of the parties hereunder.
5.7 ACCESS TO INFORMATION. Except as prohibited by
confidentiality agreements to which the Company is a party or as restricted
under applicable law, the Company shall, and shall cause its Continuing
Subsidiaries, and the Company's and such Continuing Subsidiaries' respective
officers, directors, employees and agents to, afford to the Parent and to the
officers, employees and agents of the Parent complete access at all reasonable
times, from the date hereof to the Effective Time, to the Company's and any
Continuing Subsidiary's officers, employees, agents, properties, books, records
and contracts, and shall furnish the Parent all financial, operating and other
data and information as the Parent, through its officers, employees or agents,
may reasonably request.
5.8 INDEMNIFICATION AND INSURANCE. The Parent and the Purchaser
agree that all rights to indemnification, advancement of expenses, exculpation,
limitation of liability and any and all similar rights now existing in favor of
the employees, agents, directors or officers of the Company and its Continuing
Subsidiaries (the "Indemnified Parties") as provided in their respective
charters or by-laws in effect on the date hereof (copies of which have been
provided to the Parent), shall survive the Merger and shall continue in full
force and effect for a period of six
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years from the Effective Time; PROVIDED, HOWEVER, that in the event any claim or
claims are asserted or made within such six-year period, all rights to
indemnification in respect to any such claim or claims shall continue until the
disposition of any and all such claims. The Parent agrees to provide each
individual who served as a director or officer of the Company or its Continuing
Subsidiaries at any time prior to the Effective Time with liability insurance
for a period of six years after the Effective Time no less favorable in coverage
and amount than any applicable insurance in effect immediately prior to the
Effective Time; PROVIDED, HOWEVER, that the Parent may reduce the coverage and
amount of liability insurance to the extent that the cost thereof would exceed
200% of the cost of any such insurance in effect immediately prior to the
Effective Time. The Indemnified Parties shall be deemed third party
beneficiaries of this provision and shall be entitled to bring actions to
enforce the obligations of the Parent and the Purchaser under this Section 5.8.
5.9 FAIR PRICE STRUCTURE. If any "fair price" or "control share
acquisition" or "anti-takeover" statute, or other similar statute or regulation
or any state "blue sky" statute shall become applicable to the transactions
contemplated hereby, the Company and the Company's Directors shall grant such
approvals and take such actions as are reasonably necessary so that the
transactions contemplated hereby and thereby may be consummated as promptly as
practicable on the terms contemplated hereby and thereby, and otherwise act to
minimize the effects of such statute or regulation on the transactions
contemplated hereby or thereby.
5.10 CERTAIN POST-CLOSING FUND MATTERS. The Parent and Purchaser
acknowledge that the sale of the Shares is intended to qualify for the treatment
described in Section 15(f) of the Investment Company Act. In this regard, the
Parent and Purchaser shall, and from and after the Effective Time shall cause
the Company and each of its Continuing Subsidiaries to, (i) use all reasonable
efforts to assure that, for a period of three years after the Effective Time, at
least 75% of the Board of Directors or Trustees of each Fund or any permitted
successor thereto are not "interested persons" of the Company, the Parent or the
Purchaser, as that term is defined under applicable provisions of the Investment
Company Act and interpreted by the Commission; such efforts to include causing
any employee, officer, director or agent of the Company, the Parent or any
affiliate of the Parent who shall be a director or trustee of any fund to resign
when otherwise required to maintain such percentage, (ii) refrain from imposing
or seeking to impose, for a period of two years after the Effective Time, any
"unfair burden" on any Fund, within the meaning of the Investment Company Act,
and (iii) to use all reasonable efforts to ensure that all vacancies in the
Board of Directors or Trustees of any Fund shall be filled by a person who is
not a "interested person" of the Parent or the Company and who has been selected
and proposed for election by a majority of the Directors or Trustees who are not
such interested persons.
5.11 SEVERANCE AGREEMENTS. Simultaneously with the Merger, the
Parent shall assume and agree to perform the Company's obligations under the
severance benefit agreements (complete and accurate copies of which have been
provided to the Parent) listed in the Disclosure Schedule.
5.12 PARENT GUARANTY. The Parent hereby unconditionally
guarantees the Purchaser's obligations under this Agreement and, if the Merger
is consummated, the
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indemnification obligations set forth in Section 5.8, and agrees to be liable
for any breach of this Agreement by the Purchaser (or a breach of Section 5.8).
5.13 CONTINUATION OF EMPLOYMENT. The Parent shall give (or cause
to be given) credit for past service for all purposes to the employees of the
Company and its Continuing Subsidiaries (the "Business Employees"). Starting at
the Effective Time, the Parent shall, for a period ending on the date twelve
(12) months after the Effective Time, provide (or cause to be provided) to each
Business Employee who continues his or her employment after the Effective Time
with total cash compensation (including base salary and bonus opportunity at
least equal to those in effect on the date hereof) that is no less favorable in
the aggregate to such employee's total cash compensation immediately prior to
the Effective Time. Starting at the Effective Time, the Parent shall also, for a
period ending on the date twelve (12) months after the Effective Time, maintain
(or cause to be maintained) employee benefit plans, agreements, programs,
policies and arrangements for the benefit of each such Business Employee that
are no less favorable in the aggregate than the employee benefit plans in effect
with respect to such Employees immediately prior to the Effective Time, other
than employee benefit plans, agreements, programs, policies and arrangements
providing for stock options, stock purchase rights, restricted stock or other
employer stock-based compensation and other than any employer stock provisions
of any qualified retirement plan maintained by the Company or any of its
Continuing Subsidiaries. Nothing in this Section 5.13 shall prevent the Parent,
the Surviving Corporation or its Continuing Subsidiaries from terminating the
employment of any of the Business Employees at any time after the Effective
Time. The Business Employees shall be deemed to be third party beneficiaries of
this provision and shall be entitled to bring action to enforce the obligations
of the Parent and the Purchaser under this Section 5.13.
5.14 INCORPORATION OF THE PURCHASER. The Parent shall
incorporate the Purchaser as a Delaware corporation promptly after the date
hereof and cause the Purchaser to make the representations, warranties,
covenants and agreements and to assume the obligations hereunder of the
Purchaser; PROVIDED, HOWEVER, that if the Parent is prohibited under Applicable
Laws from incorporating the Purchaser prior to the Effective Time, then either
(i) the Parent may designate in writing to the Company an existing direct or
indirect wholly-owned subsidiary of the Parent to be the Purchaser and shall
cause such subsidiary to make the representations, warranties, covenants and
agreements and to assume the obligations hereunder of the Purchaser or (ii) the
Parent shall be deemed to have agreed to have made the representations,
warranties, covenants and agreements and to have assumed the obligations
hereunder of the Purchaser.
ARTICLE 6
CONDITIONS
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of each of the following
conditions:
(a) this Agreement and the Merger shall have been approved
and adopted by the requisite vote or consent of the Stockholders required by the
Delaware Law and the Company's Certificate of Incorporation;
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(b) any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the Xxxx-Xxxxx-Xxxxxx Act and
the EC Regulation shall have expired or been terminated and the Company or the
Parent shall have received the consents or approvals, if any, listed on SECTION
6.1(B) of the Disclosure Schedule;
(c) the Distribution (as defined in Section 8.2 below) shall
have been completed and the Company and Harbor Global shall have performed all
obligations and complied with all covenants set forth in Article 8;
(d) no preliminary or permanent injunction or other order,
decree or ruling issued by (nor shall any proceeding brought by any governmental
authority seeking any of the foregoing be pending before) a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission nor any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority shall be in effect, which would make the
acquisition or holding by the Parent or its subsidiaries of the Shares or shares
of common stock of the Surviving Corporation illegal or otherwise prevent the
consummation of the Merger; provided, that the party seeking to assert this
condition shall have complied with its obligations under Section 5.4 of this
Agreement;
(e) this Agreement and the Merger shall have been approved
by the Bank of Italy in compliance with applicable provisions of the Italian
Banking Act (Decree of the President of Italy no. 385 of 1993) and the
regulations of the Bank of Italy for the implementation thereof; and
(f) either (i) the Parent shall have qualified as a
"Financial Holding Company" under the BHCA or (ii) the Merger shall have been
approved by the Board of Governors of the Federal Reserve System under the BHCA.
6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger is further subject to
fulfillment (or waiver by the Company) of the following conditions:
(a) The representations and warranties of the Parent and the
Purchaser contained herein shall be true and correct in all respects (without
giving effect to any references to material adverse effect contained in any
specific representation or warranty) as of the Effective Time with the same
effect as though made as of the Effective Time except (x) for changes
specifically permitted by the terms of this Agreement, (y) that the accuracy of
representations and warranties that by their terms speak as of the date of this
Agreement or some other date will be determined as of such date and (z) where
any such failure of the representations and warranties to be true and correct in
all respects would not, individually or in the aggregate, reasonably be expected
to have material adverse effect on the Parent or the Purchaser;
(b) The Parent and the Purchaser shall each have performed
in all material respects all obligations and complied in all material respects
with all covenants required by this Agreement to be performed or complied with
by it prior to the Effective Time; and
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(c) The Parent and the Purchaser shall each have delivered
to the Company a certificate, dated the Effective Time and signed by a duly
authorized officer to the effect that each of the conditions specified in
clauses (a) and (b) of this Section 6.2 is satisfied in all respects.
(d) The Purchaser shall have been incorporated and assumed
its obligations under this Agreement pursuant to Section 5.14.
6.3 CONDITIONS TO OBLIGATION OF THE PARENT AND THE PURCHASER TO
EFFECT THE MERGER. The obligation of the Parent and the Purchaser to effect the
Merger is further subject to the fulfillment (or waiver by the Parent and the
Purchaser) of the following conditions:
(a) (i) The representations and warranties of the Company
contained herein (other than in Section 3.25) shall be true and correct in all
respects (without giving effect to any references to Company Material Adverse
Effect contained in any specific representation or warranty) and (ii) the
representations and warranties of the Company contained in Section 3.25 shall be
true and correct in all material respects, in the cases of the clauses (i) and
(ii), as of the Effective Time with the same effect as though made as of the
Effective Time, except (X) for changes specifically permitted by the terms of
this Agreement, (Y) that the accuracy of representations and warranties that by
their terms speak as of the date of this Agreement or some other date will be
determined as of such date and (Z) only in the case of clause (i), where any
such failure of such representations and warranties to be true and correct in
all respects would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect; PROVIDED, HOWEVER, that this clause
(Z) shall not be applicable if the Parent shall prove, by clear and convincing
evidence, that the failure of such representations and warranties to be true and
correct in all material respects resulted directly from the intentional
fraudulent conduct of the persons to whom the knowledge of the Company is
imputed under this Agreement;
(b) The Company shall have performed in all material
respects all obligations and complied in all material respects with all
covenants required by this Agreement to be performed or complied with by it
prior to the Effective Time;
(c) The Company shall have delivered to the Parent a
certificate, dated the Effective Time and signed by its Chief Executive Officer
to the effect that each of the conditions specified in clauses (a) and (b) of
this Section 6.3 is satisfied in all material respects.
(d) The number of Dissenting Shares shall not equal more
than 15% of the total of the outstanding Shares;
(e) The proposals to be acted upon at the special meetings
of shareholders of the Funds in connection with the approvals described in
Section 4.3 shall have received affirmative votes sufficient for their adoption
by Funds representing at least 92.5% of the assets of all Funds at the Effective
Time; and
(f) The Company shall have obtained in writing all consents,
waivers, or approvals, necessary to provide that the consummation of the Merger
does not constitute a
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default under, or effect of give rise to a right of termination of each of the
Material Contracts identified in SECTION 6.3(F) of the Disclosure Schedule.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether prior to or after approval by the
Stockholders, as follows:
(a) by mutual written consent duly authorized by the Boards
of Directors of each of the Purchaser and the Company; or
(b) by either the Parent or the Company if (i) the Effective
Time shall not have occurred on or before February 15, 2001; PROVIDED, HOWEVER,
that the right to terminate this Agreement under this Section 7.1(b) shall not
be available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before such date or (ii) if there shall be any order which
is final and nonappealable preventing the consummation of the Merger;
(c) by the Parent if (i) the Board of Directors of the
Company withdraws, modifies or changes its recommendation of this Agreement or
the transactions contemplated hereby in a manner adverse to the Parent or shall
have resolved to do so, (ii) the Board of Directors of the Company shall have
recommended to the Stockholders an Acquisition Proposal or shall have resolved
to do so or (iii) a tender offer or exchange offer for 20% or more of the
outstanding shares of capital stock of the Company is commenced, and the Board
of Directors of the Company fails to recommend against acceptance of such tender
offer or exchange offer by its Stockholders (including by taking no position
with respect to the acceptance of such tender offer or exchange offer by its
Stockholders);
(d) by either the Parent or the Company if this Agreement
shall fail to receive the requisite vote for approval at of the Stockholders at
a Company Stockholders' Meeting (or an adjournment thereof);
(e) by the Parent upon a breach of any representation or
warranty or material covenant or agreement on the part of the Company set forth
in this Agreement, or if any representation or warranty of the Company shall
have become untrue, in either case such that the conditions set forth in Section
6.3(a) and Section 6.3(b) would not be satisfied ("Terminating Company Breach");
PROVIDED, HOWEVER, that, if such Terminating Company Breach is curable by the
Company through the exercise of its commercially reasonable efforts and for so
long as the Company continues to exercise such commercially reasonable efforts,
the Parent may not terminate this Agreement under this Section 7.1(e); or
(f) by the Company upon a breach of any representation or
warranty or material covenant or agreement on the part of the Parent and the
Purchaser set forth in this Agreement, or if any representation or warranty of
the Parent and the Purchaser shall have become untrue, in either case such that
the conditions set forth in Section 6.2(a) and Section 6.2(b) would not be
satisfied ("Terminating Parent Breach"); PROVIDED, HOWEVER, that, if such
Terminating Parent Breach is curable by the Parent and the Purchaser through the
exercise of
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their respective commercially reasonable efforts and for so long as the Parent
or the Purchaser continue to exercise such commercially reasonable efforts, the
Company may not terminate this Agreement under this Section 7.1(f).
7.2 EFFECT OF TERMINATION. In the event of the termination of
this Agreement as provided in Section 7.1, all obligations and agreements of the
parties set forth in this Agreement (except as otherwise specifically provided)
shall forthwith terminate and be of no further force or effect, and there shall
be no liability on the part of the Parent, the Purchaser or the Company
hereunder; provided that the foregoing shall not relieve any party for liability
for damages actually incurred as a result of any breach of this Agreement.
Notwithstanding any other provision contained in this Agreement to the contrary,
the Confidentiality Agreement shall survive the termination of this Agreement
for any reason.
7.3 AMENDMENT. This Agreement may not be amended except by
action of each of the parties hereto set forth in an instrument in writing
signed on behalf of each of the parties hereto; PROVIDED, HOWEVER, that if this
Agreement and the Merger are subject to Stockholder approval then, after
approval of the Merger by the Stockholders, no amendment may be made without the
further approval of the Stockholders which would do any of the following: (i)
reduce the Cash Consideration or change the form thereof; or (ii) change any
other terms and conditions of this Agreement if any of the changes, alone or in
the aggregate, would materially adversely affect the Stockholders (other than
the Parent and its affiliates).
7.4 WAIVER. At any time prior to the Effective Time, whether
before or after any special meeting of the Stockholders to vote on the Merger,
any party hereto, by action taken by its Board of Directors, may (i) extend the
time for the performance of any of the obligations or other acts of any other
party hereto or (ii) subject to the proviso contained in Section 7.3, waive
compliance with any of the agreements of any other party or with any conditions
to its own obligations. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party by a duly authorized officer.
7.5 EXPENSES; TERMINATION FEE.
(a) If this Agreement is terminated by the Parent pursuant
to Section 7.1(e) or by the Company pursuant to Section 7.1(f), then the party
terminating this Agreement shall be entitled to reimbursement by the other party
of all reasonable costs and expenses (including, without limitation, fees and
disbursements of counsel, financial advisors and accountants) incurred by it in
connection with this Agreement and the transactions contemplated hereby.
(b) If this Agreement is terminated by (i) the Parent
pursuant to Section 7.1(c) or (ii) either the Company or the Purchaser pursuant
to Section 7.1(d) and the Company enters into, prior to the first anniversary of
such date of termination, a definitive agreement with respect to the sale of the
Company and such sale is consummated prior to the 18-month anniversary of such
date of termination (a "Subsequent Sale"), then, in the case of clause (i) or
(ii), the Company shall pay the Parent promptly (but in no event later than
three business days after the termination of this Agreement in the case of
clause (i) or the closing of
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the Subsequent Sale in the case of clause (ii)) a fee of $37.5 million (the
"Fee"), which amount shall be payable in immediately available funds. In
addition, upon the termination of this Agreement pursuant to Section 7.1(c) or
upon the closing of a Subsequent Sale, the Company shall reimburse the Parent
for all reasonable costs and expenses (including, without limitation, fees and
disbursements of counsel, financial advisors and accountants) incurred by the
Parent in connection with this Agreement and the transactions contemplated
hereby in an amount not to exceed $7.5 million.
(c) In the event that the Company shall fail to pay the Fee
when due, the Company shall reimburse the Parent and the Purchaser for the costs
and expenses actually incurred or accrued by each of them (including, without
limitation, fees and reasonable expenses of counsel) in connection with the
collection under and enforcement of this Section 7.5, together with interest on
such unpaid Fee, commencing on the date that the Fee became due, at a rate equal
to the rate of interest publicly announced by Citibank, N.A., from time to time,
in the City of New York, as such bank's base rate.
(d) This Section 7.5 shall survive any termination of this
Agreement.
ARTICLE 8
HARBOR GLOBAL
8.1 FORMATION OF HARBOR GLOBAL. As promptly as practicable after
the date of this Agreement, the Company shall form Harbor Global Company Ltd. as
a Bermuda limited duration company ("Harbor Global"). Prior to the Effective
Time, the Company and Harbor Global shall have entered into the Distribution
Agreement substantially in the form of agreement attached hereto as EXHIBIT A
(the "Distribution Agreement") and the Tax Separation Agreement substantially in
the form of agreement attached hereto as EXHIBIT B (the "Tax Separation
Agreement"), or with such other changes thereto as to which the Parent shall
consent (such consent not to be unreasonably withheld, conditioned or delayed).
8.2 CERTAIN AGREEMENTS WITH RESPECT TO HARBOR GLOBAL.
(a) Prior to the Effective Time, the Company shall take all
actions as are reasonably necessary under the Securities Act, the Exchange Act
and the laws of the jurisdiction of Harbor Global's organization to permit the
distribution by the Company of the beneficial interests (the "Harbor Global
Interests") in Harbor Global to the Stockholders (the "Distribution").
(b) Prior to the Effective Time, the Company shall cause
Pioneer Goldfields II Limited to use its commercially reasonable efforts to
obtain the release of the Company from liabilities of any kind (including,
without limitation, contingent liabilities under any indemnification
arrangements) of Pioneer Goldfields II Limited under the Purchase Agreement
dated May 11, 2000 among the Company, Pioneer Goldfields II Limited, Xxxxxxx
Goldfields Company Limited and Xxxxxxx Goldfields Teberebie Limited.
(c) The Company shall consult with the Parent in structuring
and carrying out the Distribution and provide the Parent with reasonable
opportunity to review and comment on any filings made under the Securities Act,
the Exchange Act or any applicable law,
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and the Company and the Parent will use commercially reasonable efforts to agree
on such matters. The Company will, at such times as the Parent shall reasonably
request, advise the Parent of the cost incurred or expected to be incurred by
the Company in connection with the formation of Harbor Global and the
Distribution and will consult with the Parent regarding the amount and nature of
such expenses.
8.3 DISTRIBUTION OF THE HARBOR GLOBAL INTERESTS. Prior to the
Effective Time, the Board of Directors of the Company shall declare a
distribution to the Stockholders of all of the Company's interest in Harbor
Global, such distribution to be payable to the Stockholders pro rata on the
basis of the number of Shares held by such Stockholder to the total number of
Shares issued and outstanding at the time of such distribution. The record date
for such distribution shall be the time immediately prior to the Effective Time.
The Parent and the Purchaser acknowledge that this distribution (the
"Distribution") will be made to the Stockholders immediately prior to the
Effective Time and shall not reduce or otherwise affect the Cash Consideration.
ARTICLE 9
GENERAL PROVISIONS
9.1 CLOSING. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned pursuant to
the provisions of Article 7, and subject to the provisions of Article 6 hereof,
the closing of the Merger pursuant to this Agreement (the "Closing") shall take
place at the offices of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, as soon as practicable following the meeting of the Stockholders
or other Stockholder action referred to in Section 5.1 hereof, or at such other
place, time and date as the parties may mutually agree. The date and time of
such Closing are hereinafter referred to as the "Closing Date."
9.2 PUBLICITY. So long as this Agreement is in effect, except as
such party required by applicable law or applicable national stock exchange,
Commission or NASD requirements, neither the Company nor the Parent shall, nor
shall either permit any of its subsidiaries to, issue or cause the publication
of any press release or other public announcement with respect to the
transactions contemplated by this Agreement without the consent of the other
party, which consent shall not be unreasonably withheld.
9.3 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been fully given if (i)
delivered personally, (ii) sent by certified or registered mail, return receipt
requested, (iii) sent by overnight courier for delivery on the next business day
or (iv) sent by confirmed telecopy, provided that a hard copy of all such
telecopied materials is thereafter sent within 24 hours in the manner described
in clauses (i), (ii) or (iii), to the parties at the following addresses or at
such other addresses as shall be specified by the parties by like notice:
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(a) If to the Parent or the Purchaser:
UniCredito Italianio S.p.A.
Piazza Cordusio
Milan, Italy
Attention: Xxxxxx Xxxxxxx, Head of Finance
Telecopy No.: (011) (3902) 876-309
and EuroPlus SGR S.p.A.
Via Turati
Milan, Italy
Attention: Xxxxx Xxxxxxxxx, Chief Executive Officer,
EuroPlus SGR S.p.A.
Telecopy No.: (011) (0000) 000-0000
ith copies to: Shearman & Sterling
000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and NCTM-Xxxxx-Xxxxxxxx, Toffoletto, Montironi &
Soci Studio Legale Associato
Xxx Xxxxx Xxxxxxxxx, 00
00000 Xxxxx, Xxxxx
Attention: Avv. Xxxxxx Xxxxxxxx
Telecopy No.: (011) (3902) 783-091
(b) If to the Company:
The Pioneer Group, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
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52
with a copy to: Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
Notices provided in accordance with this Section 9.3 shall be deemed
delivered (i) on the date of personal delivery, (ii) four business days after
deposit in the mail, (iii) one business day after delivery to an overnight
courier, or (iv) on the date of confirmation of the telecopy transmission, as
the case may be.
9.4 INTERPRETATION. When a reference is made in this Agreement
to subsidiaries of the Parent, the Purchaser or the Company, the word
"subsidiary" or "subsidiaries" means any corporation more than 50% of whose
outstanding voting securities, or partnership, joint venture or other entity
more than 50% of whose total equity interests are, directly or indirectly, owned
by the Parent or the Company, as the case may be; and the word "affiliates"
shall have the meaning assigned to such term under Rule 405 of the Securities
Act. For purposes of this Agreement, the Company shall not be deemed to be an
affiliate or subsidiary of the Purchaser or the Parent. The headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Inclusion of information in
the Disclosure Schedule does not constitute an admission or acknowledgment of
the materiality of such information.
9.5 REPRESENTATIONS AND WARRANTIES; ETC. The representations and
warranties of the Company contained herein (other than the representations or
warranties contained in Section 3.25 which shall survive the consummation of the
Merger) shall expire with, and be terminated and extinguished upon, consummation
of the Merger. This Section 9.5 shall have no effect upon any other obligation
of the parties hereto, whether to be performed before or after the consummation
of the Merger.
9.6 MISCELLANEOUS.
(a) This Agreement together with the Confidentiality
Agreement between the Parent and the Company dated March 23, 2000 constitutes
the entire agreement and supersedes all other prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof. This Agreement (i) is not intended to confer upon any
other person any rights or remedies hereunder, create any agreement of
employment with any person or otherwise (except for Section 5.8 and 5.13) create
any third-party beneficiary hereto; (ii) shall not be assigned, except that the
Purchaser may assign its rights and obligations to one or more direct or
indirect wholly-owned subsidiaries of the Parent which in a written instrument
shall make all the representations and warranties of the Purchaser set forth
herein and shall agree to assume all of the Purchaser's obligations hereunder
and be bound by all of the terms and conditions of this Agreement; provided,
however, that no such assignment shall relieve the Parent or the Purchaser of
its obligations hereunder; and (iii) shall be governed in all respects,
including validity, interpretation and effect, by the laws of State of Delaware,
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without giving effect to the principles of conflict of laws thereof. This
Agreement may be executed in one or more counterparts which together shall
constitute a single agreement.
(b) The Parent and the Purchaser hereby irrevocably and
unconditionally consent to submit to the jurisdiction of the courts of the State
of Delaware and the United States of America located in the State of Delaware
for any actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby (and the Parent and the
Purchaser agree not to commence any action, suit or proceeding relating thereto
except in such courts), and further agree that service of any process, summons,
notice or document by United States registered mail to the respective addresses
set forth in Section 9.3 shall be effective service of process for any action,
suit or proceeding brought against the Parent or the Purchaser in any such
court. The Parent and the Purchaser hereby irrevocably and unconditionally waive
any objection to the laying of venue of any action, suit or proceeding arising
out of this agreement or the transactions contemplated hereby, in the courts of
the State of Delaware or the United States of America located in the State of
Delaware, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
9.7 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the Parent, the Purchaser and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
UNICREDITO ITALIANO S.P.A.
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
---------------------------------
Title: Head of Finance
---------------------------------
THE PIONEER GROUP, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxx X. Xxxxx, Xx.
---------------------------------
Title: Chairman, President and Chief
---------------------------------
Executive Officer
---------------------------------
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