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EXHIBIT 99.2
DISTRIBUTION AGREEMENT
BY AND AMONG
THE PIONEER GROUP, INC.,
HARBOR GLOBAL COMPANY LTD.
AND
HARBOR GLOBAL II LTD.
[ ], 2000
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TABLE OF CONTENTS
Page
ARTICLE I Definitions............................................................................1
Section 1.1 "Assumed Liabilities"..................................................................1
Section 1.2 "DGCL".................................................................................2
Section 1.3 "Distribution".........................................................................2
Section 1.4 "Distribution Agreement"...............................................................2
Section 1.5 "Effective Time".......................................................................2
Section 1.6 "Exchange Act".........................................................................2
Section 1.7 "Harbor Far East Exploration"..........................................................2
Section 1.8 "Harbor Far East Ventures".............................................................2
Section 1.9 "Harbor Global"........................................................................2
Section 1.10 "Harbor Global II".....................................................................2
Section 1.11 "Harbor Global Common Stock"...........................................................2
Section 1.12 "Harbor Global Group"..................................................................2
Section 1.13 "Harbor Global Indemnitees"............................................................2
Section 1.14 "Harbor Global Preferred Stock"........................................................2
Section 1.15 "Indemnified Claim"....................................................................3
Section 1.16 "Indemnitee"...........................................................................3
Section 1.17 "Indemnifying Party"...................................................................3
Section 1.18 "Information" of a party...............................................................3
Section 1.19 "Liabilities"..........................................................................3
Section 1.20 "Losses"...............................................................................4
Section 1.21 "Merger"...............................................................................4
Section 1.22 "Merger Agreement".....................................................................4
Section 1.23 "OPIC Loan"............................................................................4
Section 1.24 "Parent"...............................................................................4
Section 1.25 "Parent Common Stock"..................................................................4
Section 1.26 "Parent Group".........................................................................4
Section 1.27 "Parent Indemnitees"...................................................................4
Section 1.28 "PBO Property Fund Capital Contribution"...............................................5
Section 1.29 "Pioneer Forest".......................................................................5
Section 1.30 "PIOGlobal"............................................................................5
Section 1.31 "Pioneer Goldfields II"................................................................5
Section 1.32 "Pioneer International"................................................................5
Section 1.33 "Pioneer Investments Poland"...........................................................5
Section 1.34 "Pioneer Omega"........................................................................5
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Section 1.35 "Pioneer Poland Fund Holding Company"..................................................5
Section 1.36 "Pioneer Real Estate Advisors".........................................................5
Section 1.37 "Pioneering Management"................................................................5
Section 1.38 "Polish Real Estate Fund Capital Contribution".........................................5
Section 1.39 "Record Date"..........................................................................6
Section 1.40 "Representatives" of a party...........................................................6
Section 1.41 "Restructuring"........................................................................6
Section 1.42 "Retained Liabilities".................................................................6
Section 1.43 "SEC"..................................................................................6
Section 1.44 "Taxes"................................................................................6
Section 1.45 "Tax Separation Agreement".............................................................6
Section 1.46 "Time of Distribution".................................................................6
Section 1.47 "Transfer Agent".......................................................................6
ARTICLE II Capitalization of Harbor Global; Mechanics of the Distribution.........................6
Section 2.1 Capitalization of Harbor Global........................................................6
Section 2.2 Mechanics of the Distribution..........................................................7
Section 2.3 Timing of Distribution.................................................................7
ARTICLE III Representations and Warranties of Harbor Global........................................7
Section 3.1 Organization and Qualification.........................................................7
Section 3.2 Authorization..........................................................................8
Section 3.3 Compliance.............................................................................8
ARTICLE IV Tax Matters............................................................................8
Section 4.1 Tax Separation Agreement...............................................................8
Section 4.2 Tax Matters............................................................................8
ARTICLE V Restructuring and Assumed Liabilities..................................................8
Section 5.1 Restructuring..........................................................................8
Section 5.2 Assumed Liabilities...................................................................13
Section 5.3 Further Assurances....................................................................13
Section 5.4 Intercompany Balances.................................................................13
ARTICLE VI Covenants.............................................................................14
Section 6.1 Books and Records.....................................................................14
Section 6.2 Access................................................................................14
Section 6.3 Retention of Records..................................................................14
Section 6.4 Confidentiality.......................................................................15
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Section 6.5 Cooperation. The parties.............................................................16
Section 6.6 Mutual Release, Etc...................................................................16
Section 6.7 Transaction Expenses..................................................................17
Section 6.8 Xxxxxxx...............................................................................17
ARTICLE VII Indemnification.......................................................................18
Section 7.1 Indemnification by Harbor Global......................................................18
Section 7.2 Indemnification by Parent.............................................................18
Section 7.3 Indemnification Procedures............................................................19
Section 7.4 Certain Limitations...................................................................20
Section 7.5 Exclusivity of Tax Separation Agreement...............................................20
ARTICLE VIII Conditions............................................................................20
Section 8.1 Tax Separation Agreement..............................................................20
Section 8.2 Certain Transactions..................................................................20
Section 8.3 Registration of Harbor Global Common Stock............................................21
Section 8.4 Conditions to Merger Satisfied........................................................21
Section 8.5 No Injunctions or Restraints..........................................................21
ARTICLE IX Miscellaneous and General.............................................................21
Section 9.1 Modification or Amendment.............................................................21
Section 9.2 Counterparts..........................................................................21
Section 9.3 Governing Law. This Distribution Agreement...........................................21
Section 9.4 Notices...............................................................................21
Section 9.5 Captions..............................................................................22
Section 9.6 Assignment............................................................................22
Section 9.7 Certain Obligations...................................................................22
Section 9.8 Specific Performance..................................................................23
Section 9.9 Severability..........................................................................23
Section 9.10 Entire Agreement......................................................................23
Section 9.11 Jurisdiction..........................................................................23
SCHEDULES: Schedule 5.2A
Schedule 5.2B
Schedule 5.2C
EXHIBITS: Exhibit A - Tax Separation Agreement
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DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT dated as of [ ], 2000 (the "Distribution
Agreement") by and among The Pioneer Group, Inc., a Delaware corporation
("Parent"), Harbor Global Company Ltd., a Bermuda limited duration company and
direct wholly owned subsidiary of Parent ("Harbor Global"), and Harbor Global II
Ltd., a Bermuda limited duration company and indirect majority owned subsidiary
of Harbor Global ("Harbor Global II").
WHEREAS, Parent and UniCredito Italiano S.p.A., an Italian corporation,
have entered into an Agreement and Plan of Merger dated as of May 14, 2000 (the
"Merger Agreement"), providing for the merger of a wholly owned subsidiary of
UniCredito Italiano S.p.A. with and into Parent (the "Merger") as described
therein; and
WHEREAS, immediately prior to the Effective Time (as defined in Section
1.3 of the Merger Agreement), subject to the satisfaction or waiver of the
conditions set forth in Article VIII of this Distribution Agreement, the Board
of Directors of Parent expects to distribute to holders of Parent common stock,
par value $.10 per share ("Parent Common Stock"), all of the outstanding shares
of Harbor Global common stock, par value $.01 (the "Harbor Global Common
Stock"), on a pro rata basis as described in Section 2.2 of this Distribution
Agreement (the "Distribution"); and
WHEREAS, it is intended by the parties to this Distribution Agreement
that the Distribution will be preceded by a transfer by Parent of certain of its
assets to Harbor Global and that such transfers, as described in Section 4.1
hereof shall qualify as tax-free contributions under Section 721 of the Internal
Revenue Code of 1986, as amended; and
WHEREAS, the Board of Directors of Parent has approved this
Distribution Agreement, and the Board of Directors of Parent believes this
Distribution Agreement is in the best interests of the Parent stockholders. This
Distribution Agreement sets forth and provides for certain agreements among
Parent, Harbor Global and Harbor Global II in consideration of the separation of
their ownership.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 "Assumed Liabilities" shall have the meaning set forth
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in Section 4.2 hereof.
Section 1.2 "DGCL" shall mean the Delaware General Corporation Law, as
amended.
Section 1.3 "Distribution" shall have the meaning set forth in the preamble
to this Distribution Agreement.
Section 1.4 "Distribution Agreement" shall have the meaning set forth in
the preamble to this Distribution Agreement.
Section 1.5 "Effective Time" shall have the meaning set forth in Section
1.3 of the Merger Agreement.
Section 1.6 "Exchange Act" shall have the meaning set forth in Section 8.3
hereof.
Section 1.7 "Harbor Far East Exploration" shall have the meaning set forth
in Section 5.1 hereof.
Section 1.8 "Harbor Far East Ventures" shall have the meaning set forth in
Section 5.1 hereof.
Section 1.9 "Harbor Global" shall have the meaning set forth in the
preamble to this Distribution Agreement.
Section 1.10 "Harbor Global II" shall have the meaning set forth in the
preamble to this Distribution Agreement.
Section 1.11 "Harbor Global Common Stock" shall have the meaning set forth
in the preamble to this Distribution Agreement.
Section 1.12 "Harbor Global Group" shall mean Harbor Global and its direct
and indirect subsidiaries (determined after giving effect to the transfers and
transactions contemplated by Sections 5.1 and 5.2 of this Distribution
Agreement), including any predecessor or successor entities.
Section 1.13 "Harbor Global Indemnitees" shall have the meaning set forth in
Section 7.2 hereof.
Section 1.14 "Harbor Global Preferred Stock" shall mean the
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preferred stock, $.01 par value per share, of Harbor Global.
Section 1.15 "Indemnified Claim" shall mean any demand, claim, action or
proceeding subject to indemnification by either Parent or Harbor Global under
Section 7.1 or Section 7.2 of this Distribution Agreement, as applicable.
Section 1.16 "Indemnitee" shall mean either any Parent Indemnitee or any
Harbor Global Indemnitee, as applicable.
Section 1.17 "Indemnifying Party" shall have the meaning set forth in
Section 7.3 of this Distribution Agreement.
Section 1.18 "Information" of a party shall mean any and all information
that such party or any of its Representatives furnish or have furnished to the
receiving party or any of its Representatives and any information in the
possession of a party or its Representatives which relates to the business or
operations of the other party, whether furnished orally or in writing or by any
other means or gathered by inspection or otherwise in one's possession and
regardless of whether the same is specifically marked or designated as
"confidential" or "proprietary," together with any and all notes, memoranda,
analyses, compilations, studies or other documents (whether in hard copy or
electronic media) prepared by the receiving party or any of its Representatives
which contain or otherwise reflect such Information, together with any and all
copies, extracts or other reproductions of any of the same; PROVIDED, HOWEVER,
that "Information" does not include information that:
(a) is or becomes generally available to the public through no
wrongful act of the receiving party or its Representatives;
(b) is or becomes available to the receiving party on a
non-confidential basis from a source other than the providing party or its
Representatives, PROVIDED, THAT, such source is not known by the receiving party
to be subject to a confidentiality obligation to the providing party; or
(c) has been independently acquired or developed by the receiving
party without violation of any of the obligations of the receiving party or its
Representatives under this Distribution Agreement or otherwise.
Section 1.19 "Liabilities" shall mean any and all debts, liabilities,
commitments and obligations, whether fixed, contingent or absolute, mature or
unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown,
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whenever or however arising and whether or not the same would be required by
generally accepted accounting principles to be reflected in financial statements
or disclosed in the notes thereto.
Section 1.20 "Losses" shall mean any and all costs or expenses, including
interest, penalties, costs of preparation and investigation and reasonable
attorney's fees and disbursements imposed on or incurred, directly or
indirectly, by any Indemnitee resulting from or arising out of any Indemnified
Claim, net of any tax benefit actually realized by such Indemnitee in connection
with any such Loss.
Section 1.21 "Merger" shall have the meaning set forth in the preamble to
this Distribution Agreement.
Section 1.22 "Merger Agreement" shall have the meaning set forth in the
preamble to this Distribution Agreement.
Section 1.23 "OPIC Loan" shall mean the loan made by Overseas Private
Investment Corporation to Closed Joint-Stock Company "Forest-Starma" under the
Finance Agreement dated as of December 21, 1995 by and between Closed
Joint-Stock Company "Forest-Starma", a Russian joint stock company and indirect
wholly owned subsidiary of Parent, and Overseas Private Investment Corporation,
and guaranteed by Parent pursuant to the Project Completion Agreement dated as
of December 21, 1995 by and among Overseas Private Investment Corporation,
Parent, Closed Joint-Stock Company "Forest-Starma" and International Joint-Stock
Company "Starma-Holding."
Section 1.24 "Parent" shall have the meaning set forth in the preamble to
this Distribution Agreement.
Section 1.25 "Parent Common Stock" shall have the meaning set forth in the
preamble to this Distribution Agreement.
Section 1.26 "Parent Group" shall mean Parent and its direct and indirect
subsidiaries, other than Harbor Global and its direct and indirect subsidiaries
(determined after giving effect to the transfers and transactions contemplated
by Sections 5.1 and 5.2 of this Distribution Agreement), including any
predecessor or successor entities.
Section 1.27 "Parent Indemnitees" shall have the meaning set forth in
Section 7.1 hereof.
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Section 1.28 "PBO Property Fund Capital Contribution" shall mean the
approximately $2.3 million that Parent has agreed to contribute to Pioneer Real
Estate Advisors, LLC to fund the remaining capital commitments of Pioneer Real
Estate Advisors, LLC under the Limited Liability Company Agreement of PBO
Property Fund, LLC dated as of May 20, 1998.
Section 1.29 "Pioneer Forest" shall have the meaning set forth in Section
5.1 hereof.
Section 1.30 "PIOGlobal" shall have the meaning set forth in Section 5.1
hereof.
Section 1.31 "Pioneer Goldfields II" shall have the meaning set forth in
Section 5.1 hereof.
Section 1.32 "Pioneer International" shall have the meaning set forth in
Section 5.1 hereof.
Section 1.33 "Pioneer Investments Poland" shall have the meaning set forth
in Section 5.1 hereof.
Section 1.34 "Pioneer Omega" shall have the meaning set forth in Section
5.1 hereof.
Section 1.35 "Pioneer Poland Fund Holding Company" shall have the meaning
set forth in Section 5.1 hereof.
Section 1.36 "Pioneer Real Estate Advisors" shall have the meaning set
forth in Section 5.1 hereof.
Section 1.37 "Pioneering Management" shall have the meaning set forth in
Section 5.1 hereof.
Section 1.38 "Polish Real Estate Fund Capital Contribution" shall mean the
approximately $5.4 million that Parent has agreed to contribute to Pioneer Real
Estate Advisors, LLC to fund the remaining capital commitments of Pioneer Real
Estate Advisors, LLC under the Subscription and Shareholders' Agreement dated as
of October 27, 1999 by and among Polish Real Estate Fund, s.a. and several
investors.
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Section 1.39 "Record Date" shall mean the date designated by or pursuant to
the authorization of the Board of Directors of Parent for the purpose of
determining the stockholders of Parent entitled to participate in the
Distribution.
Section 1.40 "Representatives" of a party shall mean such party's
affiliates, directors, officers, employees, agents or other representatives,
including attorneys, accountants and financial advisors.
Section 1.41 "Restructuring" shall have the meaning set forth in Section
5.1 hereof.
Section 1.42 "Retained Liabilities" shall have the meaning set forth in
Section 5.2 hereof.
Section 1.43 "SEC" shall have the meaning set forth in Section 8.3 hereof.
Section 1.44 "Taxes" shall have the meaning set forth in Section 1.19 of
the Tax Separation Agreement.
Section 1.45 "Tax Separation Agreement" shall have the meaning set forth in
Section 4.1 hereof.
Section 1.46 "Time of Distribution" shall mean the time as of which the
Distribution is effective pursuant to Section 2.3 hereof.
Section 1.47 "Transfer Agent" shall mean [American Stock Transfer and Trust
Company] as transfer agent for Harbor Global Common Stock.
ARTICLE II
CAPITALIZATION OF HARBOR GLOBAL; MECHANICS OF THE DISTRIBUTION
Section 2.1 Capitalization of Harbor Global. The authorized capital stock
of Harbor Global consists of 12 million shares of Harbor Global Common Stock of
which a number of shares equal to one-fifth of the shares of Parent Common Stock
issued and outstanding at the Time of Distribution are issued and outstanding
and owned beneficially and of record by Parent and one million shares of Harbor
Global Preferred Stock, none of which are issued and outstanding.
Section 2.2 Mechanics of the Distribution. The Distribution will be
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effected by the declaration of the Distribution by the Board of Directors of
Parent and the distribution to each holder of record of shares of Parent Common
Stock as of the Record Date of certificates representing one share of Harbor
Global Common Stock for every five shares of Parent Common Stock held by such
holder on the Record Date multiplied by the number of shares of Parent Common
Stock held by such holder. Fractional shares of Harbor Global Common Stock will
be distributed to holders entitled thereto.
Section 2.3 Timing of Distribution. Immediately prior to the Effective
Time, subject to the satisfaction or waiver of the conditions set forth in
Article VII of this Distribution Agreement, the Board of Directors of Parent
shall declare the Distribution and shall authorize Parent to effect the
Distribution by delivering certificates representing all of the issued and
outstanding Harbor Global Common Stock to the Transfer Agent for delivery to the
holders entitled thereto as described in Section 2.2 above. The Distribution
will be deemed to be effective upon notification by Parent to the Transfer Agent
that the Distribution has been declared and that the Transfer Agent is
authorized to proceed with the Distribution.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HARBOR GLOBAL
Harbor Global represents and warrants to Parent as follows, each of
which representations and warranties are true and correct as of the date hereof.
The representations and warranties set forth herein constitute the sole
representations and warranties made by or on behalf of Harbor Global in
connection with the transactions contemplated in this Distribution Agreement,
notwithstanding delivery or disclosure of other information prior to the date
hereof.
Section 3.1 Organization and Qualification. Harbor Global is a company
limited by shares, duly organized and validly existing under the laws of Bermuda
and has all requisite corporate power to own properties and to carry on its
business as now conducted and as presently contemplated. Harbor Global is in
good standing or licensed as a foreign corporation and is duly authorized to do
business in each jurisdiction in which its property or business, as presently
conducted or contemplated, makes such qualification necessary, except where a
failure to be so qualified, licensed or in good standing would not, individually
or in the aggregate, materially impair the ability of Harbor Global to perform
its obligations hereunder.
Section 3.2 Authorization. Harbor Global has all necessary
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corporate power and has taken all necessary corporate action required for the
due authorization, execution and delivery of this Distribution Agreement and for
the performance by Harbor Global of its obligations under this Distribution
Agreement. This Distribution Agreement has been duly executed and delivered by
Harbor Global and constitutes a valid and binding obligation of Harbor Global,
enforceable against Harbor Global in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
similar laws of general application relating to or affecting creditors rights
and general principles of equity.
Section 3.3 Compliance. The execution and delivery of this Distribution
Agreement and the consummation of the transactions contemplated hereby will not
result in a violation of Harbor Global's memorandum of association, by-laws or
any of its material agreements, except where such violation, individually or in
the aggregate, would not materially impair the ability of Harbor Global to
perform its obligations hereunder.
ARTICLE IV
TAX MATTERS
Section 4.1 Tax Separation Agreement. Prior to the Time of Distribution,
Harbor Global, Harbor Global II and Parent shall enter into an agreement
relating to past and future tax sharing and certain issues associated therewith
in the form attached hereto as Exhibit A (the "Tax Separation Agreement").
Section 4.2 Tax Matters. Notwithstanding anything to the contrary in this
Distribution Agreement, Liabilities of the parties for Taxes are governed by the
terms of the Tax Separation Agreement.
ARTICLE V
RESTRUCTURING AND ASSUMED LIABILITIES
Section 5.1 Restructuring. Prior to the Time of Distribution, Parent,
Harbor Global and Harbor Global II shall cause the following transactions to
occur as set forth below (the "Restructuring"):
(a) Parent shall effect the following transactions:
(i) organize Harbor Global and cause it to make any elections
or take any other actions necessary to cause it to be treated as a
disregarded entity for United States federal income tax purposes;
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(ii) transfer, assign and convey all of the issued and
outstanding capital stock of Closed Joint-Stock Company "Tas-Yurjah
Mining Company" and JSL Co. Dalplaz, each a Russian joint stock
company, to Harbor Far East Exploration, LLC, a Delaware limited
liability company and wholly owned subsidiary of Parent ("Harbor Far
East Exploration");
(iii) transfer, assign and convey all of the issued and
outstanding capital stock of International Closed Joint-Stock Company
"Starma-Holding," Closed Joint-Stock Company "Starma-Port" and Closed
Joint-Stock Company "Pioneer-Starma-Equipment," each a Russian joint
stock company, to Harbor Far East Ventures, LLC, a Delaware limited
liability company and wholly owned subsidiary of Parent ("Harbor Far
East Ventures");
(iv) transfer, assign and convey all of the assets of Pioneer
Forest, Inc., a Delaware corporation and wholly owned subsidiary of
Parent, to Pioneer Forest, LLC, a Delaware limited liability company
and wholly owned subsidiary of Parent ("Pioneer Forest");
(v) transfer, assign and convey all of the issued and
outstanding membership interests of Pioneer Forest to [ForeignCo I], a
Bermuda company and wholly owned subsidiary of Parent ("[ForeignCo
I]");
(vi) cause Pioneer Real Estate Advisors, Inc., a Delaware
corporation and wholly owned subsidiary of Parent, to convert to a
Delaware limited liability company, Pioneer Real Estate Advisors, LLC
("Pioneer Real Estate Advisors"), pursuant to Section 266(b) of the
DGCL;
(vii) transfer, assign and convey all of the issued and
outstanding membership interests of Pioneer Real Estate Advisors to
[ForeignCo II], a Bermuda company and a wholly owned subsidiary of
Parent ( "[ForeignCo II]")
(viii) cause Pioneer First Polish Investment Fund, s.a., a
Polish joint stock company and indirect wholly owned subsidiary of
Parent, to sell, transfer, assign and convey its interest in Polish
Real Estate Fund, s.a., a Polish joint stock company, to Pioneer Real
Estate Advisors;
(ix) transfer, assign and convey its membership interests in
PBO Property Fund, LLC, a Delaware limited liability company, to
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Pioneer Real Estate Advisors;
(x) cause Pioneer Goldfields II Limited, a corporation dually
incorporated in Delaware and Guernsey, Channel Islands and wholly owned
subsidiary of Parent, to be converted into a Delaware limited liability
company, Pioneer Goldfields II, LLC ("Pioneer Goldfields II"), pursuant
to Section 266(b) of the DGCL;
(xi) cause Pioneer Omega, Inc., a Delaware corporation and
wholly owned subsidiary of Parent, to convert into a Delaware limited
liability company, Pioneer Omega, LLC ("Pioneer Omega"), pursuant to
Section 266(b) of the DGCL;
(xii) cause Luscinia, Inc., a wholly owned subsidiary of
Pioneer Omega, Theta Enterprises, Inc., a wholly owned subsidiary of
Pioneer Omega, and Pioneer First Russia, Inc., a majority owned
subsidiary of Pioneer Omega, each a Delaware corporation, to be
converted into Delaware limited liability companies pursuant to Section
266(b) of the DGCL;
(xiii) cause Pioneer International Corporation, a Delaware
corporation and wholly owned subsidiary of Parent, to convert into a
Delaware limited liability company, Pioneer International, LLC
("Pioneer International"), pursuant to Section 266(b) of the DGCL;
(xiv) cause Pioneer Poland U.S. (Jersey) Limited, a
corporation dually incorporated in Delaware and Jersey, Channel Islands
and direct wholly owned subsidiary of Pioneer International ("Pioneer
Poland Fund Holding Company"), to revoke its Delaware charter pursuant
to Section 390 of the DGCL;
(xv) cause Pioneer International to transfer, assign and
convey 100% of the issued and outstanding share capital of Pioneering
Management Limited, a Jersey, Channel Islands corporation and direct
wholly owned subsidiary of Pioneer International ("Pioneering
Management") to Parent;
(xvi) cause Pioneer International to transfer, assign and
convey 100% of the issued and outstanding shares of capital stock of
Pioneer Investments Poland, Ltd., a Polish joint stock company and
direct wholly owned subsidiary of Pioneer International ("Pioneer
Investments
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Poland") to Parent;
(xvii) cause Pioneer International to transfer, assign and
convey 100% of the issued and outstanding share capital of Pioneer
Poland Fund Holding Company to Parent;
(b) Parent shall contribute, as a capital contribution to Harbor
Global:
(i) $25 million in cash;
(ii) 100% of the issued and outstanding membership interests
of Harbor Far East Exploration;
(iii) 100% of the issued and outstanding membership interests
of Harbor Far East Ventures;
(iv) 100% of the issued and outstanding capital stock of
[ForeignCo I];
(v) 100% of the issued and outstanding capital stock of
[ForeignCo II];
(vi) 100% of the issued and outstanding membership interests
of Pioneer Goldfields II;
(vii) 250 of the issued and outstanding shares of common
stock, par value $.10 per share, of Pioneer Metals and Technology,
Inc., a Delaware corporation, such shares representing 25% of the
issued and outstanding capital stock of Pioneer Metals and Technology,
Inc.;
(viii) 100% of the issued and outstanding capital stock of
Pioneer Omega;
(ix) 100% of the issued and outstanding membership interests
of PIOGlobal Corporation, a Delaware corporation and wholly owned
subsidiary of Parent;
(x) 100% of the issued and outstanding share capital of
Pioneering Management;
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(xi) 100% of the issued and outstanding capital stock of
Pioneer Investments Poland;
(xii) 100% of the issued and outstanding share capital of
Pioneer Polish Fund Holding Company;
(xiii) all of the issued and outstanding shares of capital
stock of Anabasis Enterprises Ltd., a Cypriot company, held by Parent,
such shares representing 99% of the issued and outstanding capital
stock of Anabasis Enterprises Ltd.; and
(xiv) 100% of Parent's interest in PT Pioneer Ongko, an
Indonesian corporation.
(c) Parent shall pay the outstanding balance of the OPIC Loan,
including any and all interest and other amounts payable in respect thereof;
(d) Parent shall contribute the PBO Property Fund Capital Contribution
to Pioneer Real Estate Advisors;
(e) Parent shall contribute the Polish Real Estate Fund Capital
Contribution to Pioneer Real Estate Advisors;
(f) Harbor Global shall (i) organize Harbor Global Corporation, a
Bermuda limited duration company and wholly owned subsidiary of Harbor Global
("HGC"), (ii) contribute $25 million in cash to HGC as a contribution to capital
and (iii) cause HGC to make any elections or take any other actions necessary to
cause it to be treated as a corporation for United States federal income tax
purposes; and
(g) Harbor Global shall (i) organize Harbor Global II, (ii) transfer,
assign and convey all of its assets to Harbor Global II as a contribution to
capital and (iii) cause Harbor Global II to make any elections or take any other
actions necessary to cause it to be treated as a partnership for United States
federal income tax purposes, and HGC shall contribute $25 million in cash to
Harbor Global II as a contribution to capital.
Section 5.2 Assumed Liabilities. Except as otherwise specifically set
forth in the Merger Agreement or the Tax Separation Agreement, at or prior to
the Time of Distribution, Harbor Global shall, or shall cause the appropriate
member
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of the Harbor Global Group to, unconditionally assume and undertake to
pay, satisfy and discharge when due and in accordance with their terms all
Liabilities (whether arising before or after the Time of Distribution) to the
extent arising out of, based upon or resulting from the operation of the
business of, or to the extent relating to, any member of the Harbor Global
Group, other than the Retained Liabilities and the Liabilities listed on
Schedules 5.2A, 5.2B and 5.2C hereof (collectively, the "Assumed Liabilities"),
and Parent shall retain, or shall cause the appropriate member of the Parent
Group to retain, and undertake to pay, satisfy and discharge when due in
accordance with their terms all Liabilities (whether arising before or after the
Time of Distribution) of Parent to the extent arising out of, based upon or
resulting from the operation of the business of, or to the extent relating to
(i) any member of the Parent Group (the "Retained Liabilities") or (ii) the
Liabilities set forth on Schedules 5.2A, 5.2B and 5.2C hereof; PROVIDED,
HOWEVER, that the parties hereto will use their reasonable efforts to cause the
Liabilities described in Items 1 and 2 of Schedule 5.2A to this Distribution
Agreement to be assigned to and assumed by Pioneer Forest with a mutual release
of liability.
Section 5.3 Further Assurances. If after the Time of Distribution, either
party holds assets which by the terms hereof or of the Merger Agreement were
intended to be assigned and transferred to, or retained by, the other party,
such party shall promptly assign and transfer or cause to be assigned or
transferred such assets to the other party, and the parties agree that the
transferring party will hold such assets as trustee of the transferee party and
all income and risk of loss of the transferred assets after the Time of
Distribution shall be for the account of the intended owner. Each of the parties
hereto, at its own cost and expense, shall promptly execute such documents and
other instruments and take such further actions as may be reasonably required or
desirable to carry out the provisions of this Distribution Agreement and to
consummate the transactions contemplated hereby.
Section 5.4 Intercompany Balances. Any indebtedness, accounts receivable
or other intercompany obligations of another nature accrued prior to the Time of
Distribution between Parent and any member of the Harbor Global Group shall
either be contributed as a capital contribution or otherwise contributed by
Parent to a member of the Harbor Global Group. At the Time of the Distribution,
there shall not be outstanding any indebtedness or accounts payable or
receivable between the Parent Group and the Harbor Global Group.
ARTICLE VI
COVENANTS
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Section 6.1 Books and Records. Prior to or as promptly as practicable
after completion of the Restructuring, Parent shall deliver to Harbor Global all
corporate books and records of the members of the Harbor Global Group in the
possession of the Parent Group and the relevant portions (or copies thereof) of
all corporate books and records of the Parent Group relating directly and
primarily to the members of the Harbor Global Group, the Assumed Liabilities or
the Liabilities listed on Schedule 5.2A and 5.2C hereof, including, in each
case, all active agreements, active litigation files and government filings.
From and after the completion of the Restructuring, all such books, records and
copies shall be the property of Harbor Global. Parent may retain copies of all
such corporate books and records. Prior to or as promptly as practicable after
the completion of the Restructuring, Harbor Global shall deliver to Parent all
corporate books and records of the members of the Parent Group in the possession
of any member of the Harbor Global Group and relevant portions (or copies
thereof) of all corporate books and records of the Harbor Global Group relating
directly and primarily to the members of the Parent Group, the Retained
Liabilities or the Liabilities listed on Schedule 5.2B hereof, including, in
each case, all active agreements, active litigation files and government
filings. From and after the completion of the Restructuring, all such books,
records and copies shall be the property of Parent. Harbor Global may retain
copies of all such corporate books and records.
Section 6.2 Access. From and after the Time of Distribution, each of
Parent and Harbor Global shall afford the other and the other's Representatives
reasonable access and duplicating rights without cost or expense to the
requesting party during normal business hours and upon reasonable advance
notice, to all information within the possession or control of the Parent Group
or the Harbor Global Group, as the case may be, to the extent relating to the
business, assets or Liabilities of the other as they existed prior to the
completion of the Restructuring or to the extent relating to or arising in
connection with the relationship between the Parent Group or the Harbor Global
Group, as the case may be, prior to the Restructuring. Without limiting the
foregoing, information may be requested under this Section 6.2 for audit,
accounting, claims, litigation and tax purposes, as well as for purposes of
fulfilling disclosure and reporting obligations.
Section 6.3 Retention of Records. If any information relating to the
businesses, assets or Liabilities of the Parent Group or the Harbor Global Group
is retained by the Harbor Global Group or the Parent Group, respectively, each
of Parent and Harbor Global shall, and shall cause each member of the Parent
Group and the Harbor Global Group, respectively, to retain all such information
in the Parent
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Group's or the Harbor Global Group's possession or under its control until such
information is at least ten years old except that if prior to the expiration of
such period Parent or Harbor Global wishes to destroy or dispose of any such
information that is at least three years old, prior to destroying or disposing
of any of such information (a) Parent or Harbor Global shall provide no less
than 45 days' prior written notice to the other party, specifying the
information proposed to be destroyed or disposed of, and (b) if prior to the
scheduled date of such destruction or disposal, the other party requests in
writing that any of the information proposed to be destroyed or disposed of be
delivered to such other party, Parent or Harbor Global, as applicable, promptly
shall arrange for the delivery of the requested information to a location
specified by, and at the expense of, the requesting party.
Section 6.4 Confidentiality.
(a) Each party hereto shall keep, and shall cause its Representatives
to keep, the other party's Information strictly confidential and will disclose
such Information only to such of its Representatives who need to know such
Information and who agree to be bound by this Section 6.4 and not to disclose
such Information to any other person or entity. Without the prior written
consent of the other party, each party and its Representatives shall not
disclose the other party's Information to any person or entity except as may be
required by (i) federal securities laws or (ii) a judicial process; PROVIDED,
THAT disclosure required by a judicial process shall be made in accordance with
Section 6.4(b).
(b) In the event that either party or any of its Representatives
receives a request or is required by law or judicial process to disclose to a
court or other tribunal all or any part of the other party's Information, the
receiving party or its Representatives shall promptly notify the other party of
the request in writing, and consult with and assist the other party in seeking a
protective order or request for other appropriate remedy. In the event that such
protective order or other remedy is not obtained or the other party waives
compliance with the terms hereof, such receiving party or its Representatives,
as the case may be, shall disclose only that portion of the Information or facts
which, in the written opinion of the receiving party's outside counsel, is
legally required to be disclosed, and will exercise its respective reasonable
best efforts to assure that confidential treatment will be accorded such
Information or facts by the persons or entities receiving the same. The
providing party will be given an opportunity to review the Information or facts
prior to disclosure.
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Section 6.5 Cooperation. The parties shall cooperate with each other in
all reasonable respects to ensure (a) that the Restructuring and the assumption
of the Retained Liabilities and the Assumed Liabilities are consummated in
accordance with the terms hereof, (b) the retention by Parent of the Parent
Group, including allocating rights and obligations under any contract,
agreement, undertaking or other commitment, if any, of the Parent Group or of
the Harbor Global Group that relate to the business or operations of any member
of the Parent Group and the Liabilities listed on Schedules 5.2A, 5.2B and 5.2C
hereof, and (c) the retention by Harbor Global of the Harbor Global Group,
including allocating rights and obligations under any contract, agreement,
undertaking or other commitment, if any, of the Harbor Global Group or of the
Parent Group that relate to the business or operations of any member of the
Harbor Global Group, other than the Liabilities listed on Schedules 5.2A, 5.2B
and 5.2C hereof. In addition, Harbor Global shall use reasonable efforts to take
all steps necessary to release Parent from its Liabilities relating to Items 12
through 16 listed on Schedule 5.2A hereof.
Section 6.6 Mutual Release, Etc. Effective upon the Time of Distribution
and except as otherwise specifically set forth in this Distribution Agreement,
each member of the Parent Group on one hand and each member of the Harbor Global
Group on the other hand releases and forever discharges each member of the other
of and from all debts, demands, actions, causes of action, suits, accounts,
covenants, contracts, agreements, undertakings, commitments, damages and any and
all claims, demands and liabilities whatsoever of every name and nature, both in
law and in equity, against such other party or any of its assigns, which the
releasing party has or ever had, which arise out of or relate to events,
circumstances or actions taken by such other party prior to the Time of
Distribution; PROVIDED, HOWEVER, that the foregoing general release shall not
apply to any demands, actions, causes of action, suits, accounts, covenants,
agreements, undertakings, commitments, damages and any and all claims, demands
and liabilities arising out of or relating to this Distribution Agreement, the
Merger Agreement or the Tax Separation Agreement or the transactions
contemplated hereby or thereby and shall not affect either party's right to
enforce this Distribution Agreement or any other agreement contemplated hereby
or thereby in accordance with its terms. Each party understands and agrees that,
except as otherwise specifically provided herein, neither the other party nor
any of its subsidiaries is, in this Distribution Agreement or any other
agreement (other than the Merger Agreement), or document, representing or
warranting to such party in any way as to the assets, business or liabilities
transferred or assumed as contemplated hereby or thereby or as to any consents
or approvals required in connection with the consummation of the transactions
contemplated by this Distribution Agreement, it
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being agreed and understood that each party shall take each of the assets
transferred, retained or assumed by it pursuant to this Distribution Agreement
"as is" and that such party shall bear the economic and legal risk that the
title to any such asset shall be other than good and marketable and free from
encumbrances.
Section 6.7 Transaction Expenses. For purposes of this Distribution
Agreement, all reasonable expenses in connection with this Distribution
Agreement and the Tax Separation Agreement and the transactions contemplated
hereby and thereby, including all fees and expenses of Parent's investment
bankers and counsel, shall be paid by Parent; it being understood that all
expenses under $5 million shall be considered reasonable and that the
reasonableness of expenses of $5 million and over are to be determined in light
of the facts and circumstances.
Section 6.8 Xxxxxxx. Harbor Global agrees that promptly upon the fifth
anniversary of the closing of the Purchase Agreement dated May 11, 2000 by and
among Pioneer Goldfield II Limited ("Goldfield II"), Goldfields Teberebie
Limited, and Xxxxxxx Goldfields Company Limited (the "Purchase Agreement") or,
if there is any indemnification claim pending under the Purchase Agreement as of
the fifth anniversary, promptly after resolution of all such claims, it will pay
to Parent the lesser of (i) $5 million or (ii) the proceeds received by
Goldfield II under the Purchase Agreement less any indemnification claims paid
under the Purchase Agreement.
Section 6.9 Names. Harbor Global and Harbor Global II agree that from and
after the Effective Time, the name "Pioneer" and all similar related names,
marks and logos (all such names, marks and logos being the "Parent Names") shall
be owned by Parent or a Continuing Subsidiary (as defined in the Merger
Agreement), that no member of the Harbor Global Group shall have any rights in,
and shall not use, any Parent Name, and that no member of the Harbor Global
Group shall contest the ownership or validity of any rights of Parent or any of
its Continuing Subsidiaries in or to the Parent Names; PROVIDED, HOWEVER,
Parent, Harbor Global and Harbor Global II shall use good faith efforts to enter
into a mutually agreeable right and license to use the Parent Names effective
for a reasonable period of time after the Effective Time in connection with the
conduct by the members of the Harbor Global Group of their respective businesses
as such businesses were conducted prior to the Effective Time.
ARTICLE VII
INDEMNIFICATION
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Section 7.1 Indemnification by Harbor Global. Subject to the provisions of
this Article VII, Harbor Global shall indemnify, defend and hold harmless the
members of the Parent Group and the respective officers, directors, employees,
agents, successors and assigns of the members of the Parent Group (collectively,
the "Parent Indemnitees") from and against, and pay or reimburse members of the
Parent Group for all Losses, as incurred:
(a) relating to or arising from the business or operations of any
member of the Harbor Global Group, the assets of any member of the Harbor Global
Group, the Assumed Liabilities or, notwithstanding anything to the contrary
contained herein, the Liabilities listed on Schedule 5.2A hereof and the
Liabilities, if any, listed on Schedule 5.2C hereto, whether such Losses relate
to or arise from events, occurrences, actions, omissions, facts or circumstances
occurring, existing or asserted before, at or after the Time of Distribution;
(b) relating to or arising from the breach by any member of the Harbor
Global Group of any agreement or covenant contained in this Distribution
Agreement; or
(c) relating to or arising from the breach by Harbor Global of any
representation or warranty contained in Article III herein.
Section 7.2 Indemnification by Parent. Subject to the provisions of this
Article VII, Parent shall indemnify, defend and hold harmless the members of the
Harbor Global Group and the respective officers, directors, employees, agents,
successors and assigns of the members of the Harbor Global Group (collectively,
the "Harbor Global Indemnitees") from and against, and pay or reimburse members
of the Harbor Global Group for all Losses, as incurred:
(a) relating to or arising from the business or operations of any
member of the Parent Group, the assets of any member of the Parent Group, the
Retained Liabilities or, notwithstanding anything to the contrary contained
herein, the Liabilities listed on Schedule 5.2B hereof, whether such Losses
relate to or arise from events, occurrences, actions, omissions, facts or
circumstances occurring, existing or asserted before, at or after the Time of
Distribution; or
(b) relating to or arising from the breach by any member of the Parent
Group of any agreement or covenant contained in this Distribution Agreement
which by its express terms is to be performed or complied with after the Time of
Distribution.
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Section 7.3 Indemnification Procedures.
(a) Any Indemnitee shall give written notice to the party who may
become obligated to provide indemnification hereunder (the "Indemnifying Party")
in reasonable detail and promptly, and in any event within 30 days after receipt
by such Indemnitee of written notice of the Indemnified Claim; PROVIDED, THAT,
failure to give such notice shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure. After any required notification pursuant
to this Section 7.3, the Indemnitee shall promptly deliver to the Indemnifying
Party copies of all notices, court documents or other documents received by the
Indemnitee relating to the Indemnified Claim.
(b) If an Indemnified Claim is made against an Indemnitee, the
Indemnifying Party will be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party and reasonably satisfactory to the Indemnitee. If the
Indemnifying Party elects to assume the defense of an Indemnified Claim, the
Indemnifying Party will not be liable to the Indemnitee for any legal expenses
incurred by the Indemnitee in connection with the defense thereof. The
Indemnitee shall have the right to employ, at its own expense, one separate
counsel in any suit , action or proceeding and to participate in the defense
thereof; PROVIDED, THAT, the Indemnifying Party shall control such defense. The
Indemnifying Party shall pay the fees and expenses of counsel employed by the
Indemnitee during any period which the Indemnifying Party has not assumed the
defense thereof, other than any period in which the Indemnitee shall have failed
to give notice of the Indemnified Claim as provided above. The Indemnifying
Party shall not, without the Indemnitee's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed, settle or compromise
any Indemnified Claim or consent to the entry of any judgement with respect to
any Indemnified Claim if such settlement, compromise or judgment provides for
injunctive or other nonmonetary relief affecting the Indemnitee or does not
include as an unconditional term thereof the giving by each claimant or
plaintiff to such Indemnitee of a release from all liability with respect to
such Indemnified Claim. If the Indemnifying Party shall have assumed the defense
of an Indemnified Claim, the Indemnitee shall not admit any liability with
respect to, or settle, compromise or discharge, such Indemnified Claim without
the Indemnifying Party's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed.
Section 7.4 Certain Limitations.
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(a) The amount of any Loss or other liability for which
indemnification is provided under this Distribution Agreement or any other
amounts payable or reimbursable by one party to another under this Distribution
Agreement shall be net of any amounts actually recovered by the Indemnitee from
third parties, including amounts actually recovered under insurance policies,
with respect to such Losses.
(b) Neither Harbor Global nor Parent shall have any liability for any
Losses, whether pursuant to this Article VII or otherwise pursuant to this
Distribution Agreement, unless the aggregate amount of all Losses for which
Harbor Global or Parent, respectively, would be liable, but for this Section
7.4(b), exceeds on a cumulative basis an amount equal to $250,000. If aggregate
Losses for which Harbor Global or Parent, respectively, would be liable exceeds
$250,000, Harbor Global or Parent, respectively, shall be liable under Section
7.1 or Section 7.2, respectively, only for the aggregate amount of Losses that
exceeds $250,000.
Section 7.5 Exclusivity of Tax Separation Agreement. Notwithstanding
anything in this Distribution Agreement to the contrary, the Tax Separation
Agreement shall be the exclusive agreement among the parties with respect to all
tax matters, including indemnification with respect to tax matters.
ARTICLE VIII
CONDITIONS
The obligations of Parent and Harbor Global to consummate the
Distribution shall be subject to the fulfillment of each of the following
conditions:
Section 8.1 Tax Separation Agreement. The Tax Separation Agreement, in the
form attached as Exhibit A hereto, shall have been executed and delivered by
each of Parent, Harbor Global and Harbor Global II.
Section 8.2 Certain Transactions. The Restructuring shall have been
consummated in accordance with Article IV in all material respects.
Section 8.3 Registration of Harbor Global Common Stock. Any registration
statement filed by Harbor Global with the Securities and Exchange Commission
(the "SEC") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), relating to Harbor Global Common Stock shall be effective under
the Exchange Act.
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Section 8.4 Conditions to Merger Satisfied. The obligation of Parent to
consummate the Distribution shall be subject to the satisfaction (or waiver by
Parent) of the conditions to the obligations of Parent to consummate the Merger
set forth in Sections 6.1 and 6.2 of the Merger Agreement, other than the
condition as to the consummation of the transactions contemplated by this
Distribution Agreement.
Section 8.5 No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Distribution shall be in effect, and if such order or
injunction exists, each party agrees to use reasonable efforts to have any such
order reversed or injunction lifted.
ARTICLE IX
MISCELLANEOUS AND GENERAL
Section 9.1 Modification or Amendment. The parties hereto may modify or
amend this Distribution Agreement by written agreement executed and delivered by
authorized officers of the respective parties.
Section 9.2 Counterparts. For the convenience of the parties hereto, this
Distribution Agreement may be executed in separate counterparts, each such
counterpart being deemed to be an original instrument, and which counterparts
shall together constitute the same agreement.
Section 9.3 Governing Law. This Distribution Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware, without
reference to its conflicts of law principles.
Section 9.4 Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the other shall be in writing and shall be
deemed to have been duly given (i) on the date of delivery if delivered by
facsimile (upon confirmation of receipt) or personally or (ii) on the date as of
which delivery to the receiving party is confirmed if delivered by Federal
Express or other next-day courier service or by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party receiving such notice:
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If to Parent:
The Pioneer Group, Inc.
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx, General Counsel
If to Harbor Global or Harbor Global II
Harbor Global Company Ltd.
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Chief Executive Officer
Section 9.5 Captions. All Article, Section and paragraph captions herein
are for convenience of reference only, do not constitute part of this
Distribution Agreement and shall not be deemed to limit or otherwise affect any
of the provisions hereof.
Section 9.6 Assignment. No party to this Distribution Agreement shall
convey, assign or otherwise transfer any of its rights or obligations under this
Distribution Agreement without the express written consent of the other party
hereto in its sole and absolute discretion, except that either party hereto may
assign any of its rights hereunder to a successor to all or any part of its
business or to any of its wholly owned subsidiaries. Except as aforesaid, any
such conveyance, assignment or transfer without the express written consent of
the other party shall be void ab initio. No assignment of this Distribution
Agreement or any rights hereunder shall relieve the assigning party of its
obligations hereunder.
Section 9.7 Certain Obligations. Whenever this Distribution Agreement
requires any of the subsidiaries of any party to take any action, this
Distribution Agreement will be deemed to include an undertaking on the part of
such party to cause such subsidiary to take such action.
Section 9.8 Specific Performance. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Distribution Agreement, the party or parties who are or are to be thereby
aggrieved shall have the right of specific performance and injunctive relief
giving effect to its or
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their rights under this Distribution Agreement, in addition to any and all other
rights and remedies at law or in equity, and all such rights and remedies shall
be cumulative. The parties agree that the remedies at law for any breach or
threatened breach, including monetary damages, are inadequate compensation for
any loss and that any defense in any action for specific performance that a
remedy at law would be adequate is waived.
Section 9.9 Severability. If any provision of this Distribution Agreement
or the application thereof to any person or circumstance is determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof or the application of such provision to any other persons or
circumstances. In the event that the terms and conditions of this Distribution
Agreement are materially altered as a result of this Section, the parties shall
negotiate in good faith to agree upon a suitable and equitable substitute
provision to effect the original intent of the parties.
Section 9.10 Entire Agreement. This Distribution Agreement, the Tax
Separation Agreement and the Merger Agreement constitute the entire agreement
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and thereof.
Section 9.11 Jurisdiction. Each of Parent and Harbor Global hereby (i)
consents to be subject to the jurisdiction of the United States District Court
for the District of Delaware and the jurisdiction of the courts of the State of
Delaware in any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Distribution
Agreement or the transactions contemplated hereby, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (iii) agrees that it will not bring any action
relating to this Distribution Agreement or the transactions contemplated hereby
in any court other than the Untied States District Court for the District of
Delaware or the courts of the State of Delaware, (iv) irrevocably waives (x) any
objection that it may have or hereafter have to the changing of venue of any
such suit, action or proceeding in such court and (y) any claim that any such
suit, action or proceeding in any such court has been brought in an inconvenient
forum and (v) irrevocably consents to the service of any and all process in any
such suit, action or proceeding by the delivery of such process to such party at
the address and in the manner provided in Section 8.4 hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Distribution Agreement has been duly executed
and delivered by the duly authorized officers of the parties hereto as of the
date first written above.
THE PIONEER GROUP, INC.
By:
-----------------------------------
Name:
Title:
HARBOR GLOBAL COMPANY LTD.
By:
-----------------------------------
Name:
Title:
HARBOR GLOBAL II LTD.
By:
-----------------------------------
Name:
Title:
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SCHEDULE 5.2A
The following Liabilities shall remain Liabilities of Parent after the
Time of the Distribution; PROVIDED, HOWEVER, that Harbor Global will indemnify,
defend and hold harmless the Parent Indemnitees for all Losses incurred in
connection with the Liabilities listed on this Schedule 5.2A pursuant to Article
VI hereof; and PROVIDED, FURTHER, that Items 1 and 2 shall remain Liabilities of
Parent only until such Items are assigned to and assumed by Pioneer Forest:
1. All Liabilities of Parent under the Loan Agreement dated as of January
30, 1996, as amended by the First Amendment to the Loan Agreement
dated as of January 1, 1999, by and between State Street Bank and
Trust Company and Closed Joint-Stock Company "Forest-Starma," the
Master Short-Term Credit Agreement dated as of March 19, 1996 by and
between State Street Bank and Trust Company and Closed Joint-Stock
Company "Forest-Starma" and the Loan Agreement dated as of September
18, 1997 by and between State Street Bank and Trust Company and Closed
Joint-Stock Company "Forest-Starma," each as assigned by State Street
Bank and Trust Company to Parent pursuant to the Assignment Agreement
dated as of January 20, 1999 by and among Parent, State Street Bank
and Trust Company and Closed Joint-Stock Company "Forest-Starma."
2. All Liabilities of Parent under the Agreement on Assignment of Rights
Under Promissory Note dated as of January 25, 2000, as amended as of
April 25, 2000, by and between Parent and Closed Joint-Stock Company
"Forest-Starma."
3. All Liabilities of Parent under the Assignment Agreement dated as of
May 10, 2000 by and among Pioneer Forest, LLC, Parent and State Street
Bank and Trust Company under which State Street Bank and Trust Company
assigned to Parent all of its rights, title and interest in, and
Parent assigned to Pioneer Forest, LLC all of its rights, title and
interest in, the Participation Agreement dated as of March 18, 1996,
as amended by the First Amendment to the Participation Agreement dated
as of December 6, 1996, by and between Parent and State Street Bank
and Trust Company and the Participation Agreement dated as of
September 17, 1997 by and between Parent and State Street Bank and
Trust Company (relating to certain loans to Closed Joint-Stock Company
"Forest-Starma").
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4. All Liabilities of Parent under the Assignment Agreement dated as of
May 10, 2000 by and among Pioneer Forest, LLC, Parent and State Street
Bank and Trust Company under which Parent assigned to Pioneer Forest,
LLC all of its rights, title and interest in the Participation
Agreement dated as of January 30, 1996 by and between Parent and State
Street Bank and Trust Company (relating to a loan to Closed
Joint-Stock Company "Forest-Starma").
5. All Liabilities of Parent under the Assignment Agreement dated as of
May 12, 2000 by and among Pioneer Forest, LLC, Parent and State Street
Bank and Trust Company under which State Street Bank and Trust Company
assigned to Parent all of its rights, title and interest in the
Participation Agreement dated as of January 30, 1996 by and between
Parent and State Street Bank and Trust Company (relating to a loan to
Closed Joint-Stock Company "Forest-Starma").
6. All Liabilities of Parent under the Assignment Agreement dated as of
May 2, 2000 by and among Harbor Far East Ventures, LLC, Parent and
State Street Bank and Trust Company under which Parent assigned to
Harbor Far East Ventures, LLC all of its rights, title and interest in
the Participation Agreement dated as of September 17, 1997, as amended
by the First Amendment to the Participation Agreement dated as of
March 19, 1998, by and between Parent and State Street Bank and Trust
Company (relating to a loan to Closed Joint-Stock Company
"Pioneer-Starma-Equipment").
7. All Liabilities of Parent under the Assignment Agreement dated as of
May 2, 2000 by and among Harbor Far East Exploration, LLC, Parent and
State Street Bank and Trust Company under which Parent assigned to
Harbor Far East Exploration, LLC all of its rights, title and interest
in the Participation Agreement dated as of February 14, 1997, as
amended by the First Amendment to the Participation Agreement dated as
of March 19, 1998 and the Second Amendment to the Participation
Agreement dated as of June 30, 1999, by and between Parent and State
Street Bank and Trust Company (relating to a loan to Closed
Joint-Stock Company "Tas-Yurjah Mining Company").
8. All Liabilities of Parent under the Assignment Agreement dated as of
May 2, 2000 by and among Pioneer Forest, LLC, Parent and State Street
Bank and Trust Company under which Parent assigned to Pioneer Forest,
LLC all of its rights, title and interest in the Participation
Agreement dated as of September
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17, 1997, as amended by the First Amendment to the Participation
Agreement dated as of March 19, 1998, by and between Parent and State
Street Bank and Trust Company (relating to a loan to Closed
Joint-Stock Company "Udinskoye").
9. All Liabilities of Parent under the Assignment Agreement dated as of
May 2, 2000 by and among Pioneer Forest, LLC, Parent and State Street
Bank and Trust Company under which Parent assigned to Pioneer Forest,
LLC all of its rights, title and interest in the Participation
Agreement dated as of September 17, 1997, as amended by a First
Amendment to the Participation Agreement dated as of January 22, 1998
and a Second Amendment to the Participation Agreement dated as of July
17, 1998, by and between Parent and State Street Bank and Trust
Company (relating to a loan to Closed Joint-Stock Company
"Amgun-Forest").
10. All Liabilities of Parent under the Assignment Agreement dated as of
May 2, 2000 by and among Harbor Far East Ventures, LLC, Parent and
State Street Bank and Trust Company under which Parent assigned to
Harbor Far East Ventures, LLC all of its rights, title and interest in
the Participation Agreement dated as of November 25, 1997 and the
Second Participation Agreement dated as of May 20, 1998, each by and
between Parent and State Street Bank and Trust Company (relating to a
loan to International Closed Joint-Stock Company "Starma-Holding").
11. All Liabilities of Parent under the Assignment Agreement dated as of
November 29, 1999 by and among Pioneer Metals and Technology, Inc.,
Parent and State Street Bank and Trust Company under which Parent
assigned to Pioneer Metals and Technology, Inc. all of its rights,
title and interest in the Second Participation Agreement dated as of
May 20, 1998, as amended by the First Amendment to the Second
Participation Agreement dated as of October 9, 1998 and the Second
Amendment to the Second Participation Agreement dated as of February
26, 1999, by and between Parent and State Street Bank and Trust
Company.
12. All Liabilities of Parent under the Letter of Agreement and Indemnity
dated as of January 12, 1995 by and between Pioneer Poland UK Limited,
Parent and Xxxxxxx Xxxxxxxx.
13. All Liabilities of Parent under the Letter of Agreement and Indemnity
dated as
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of January 12, 1995 by and between Pioneer Poland UK Limited, Parent
and Xxxxxxx Xxxxxxxxx.
14. All Liabilities of Parent under the Letter Agreement dated as of
January 10, 1995 by and between Parent and the European Bank for
Reconstruction and Development.
15. All Liabilities of Parent under the Side Letter Agreement dated as of
October 27, 1999 by and between Pioneer Real Estate Advisors Poland,
s.a., Parent and the European Bank for Reconstruction and Development.
16. All Liabilities of Parent under the Side Letter Agreement dated as of
October 27, 1999 by and between Pioneer Real Estate Advisors Poland,
s.a., Pioneer Real Estate Advisors, Inc., Parent and Cadim Servotech
B.V.
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SCHEDULE 5.2B
1. All rights and obligations of Parent under the Settlement Agreement
dated as of March 29, 2000 by and between Caterpillar Financial
Services Corporation, Teberebie Goldfields Limited and Parent.
Note: If the Distribution Agreement is executed before Closed Joint-Stock
Company "Forest-Starma" fully performs its log delivery obligations to Rayonier,
Inc., also include all rights and obligations of Parent under the Guaranty dated
as of January 7, 2000 by and between Parent and Rayonier, Inc. with respect to
certain obligations of Closed Joint-Stock Company "Forest-Starma" under the Log
Sales Contract No. 00-01-07 by and between Rayonier, Inc. and Closed Joint-Stock
Company "Forest-Starma."
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SCHEDULE 5.2C
Note: If the consent of Xxxxxxx Goldfields Company Limited to release Parent of
its obligations under the Purchase Agreement dated as of May 11, 2000 by and
among Pioneer Goldfields II Limited, Xxxxxxx Goldfields Company Limited and
Goldfields Teberebie Limited cannot be obtained, this agreement and the related
guaranty will be included on this Schedule 5.2C.
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EXHIBIT A
TAX SEPARATION AGREEMENT
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