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EXHIBIT 2.1
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
DISTRIBUTION AGREEMENT.........................................................1
ARTICLE I Definitions.........................................2
Section 1.1 "Assumed Liabilities"......................2
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"......................3
Section 1.13 "Harbor Global Indemnitees"................3
Section 1.14 "Harbor Global Preferred Stock"............3
Section 1.15 "Indemnified Claim"........................3
Section 1.16 "Indemnitee"...............................3
Section 1.17 "Indemnifying Party........................3
Section 1.18 "Information"..............................3
Section 1.19 "Liabilities ".............................4
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" .....................5
Section 1.26 "Parent Group".............................5
Section 1.27 "Parent Indemnitees".......................5
Section 1.28 "Pioneer Forest" ..........................5
Section 1.29 "PIOGlobal" ...............................5
Section 1.30 "Pioneer Goldfields II"....................5
Section 1.31 "Pioneer International"....................5
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Section 1.32 "Pioneer Omega"............................5
Section 1.33 "Pioneer Poland Fund Holding Company" .....5
Section 1.34 "Record Date"..............................5
Section 1.35 "PREA" ....................................5
Section 1.36 "Representatives" .........................6
Section 1.37 "Restructuring"............................6
Section 1.38 "Retained Liabilities".....................6
Section 1.39 "SEC"......................................6
Section 1.40 "Taxes" ...................................6
Section 1.41 "Tax Separation Agreement".................6
Section 1.42 "Time of Distribution" ....................6
Section 1.43 "Transfer Agent"...........................6
ARTICLE II Capitalization of Harbor Global; Mechanics of the
Distribution.................................................7
Section 2.1 Capitalization of Harbor Global.....................7
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......................8
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. ......................................9
ARTICLE V Restructuring and Assumed Liabilities........................9
Section 5.1 Restructuring.......................................9
Section 5.2 Assumed Liabilities. .............................13
Section 5.3 Further Assurances. ..............................13
Section 5.4 Intercompany Balances..............................14
ARTICLE VI Covenants...................................................14
Section 6.1 Books and Records..................................14
Section 6.2 Access. ..........................................14
Section 6.3 Retention of Records. ............................15
Section 6.4 Confidentiality....................................15
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Section 6.5 Cooperation. .....................................16
Section 6.6 Mutual Release, Etc................................16
Section 6.7 Transaction Expenses...............................17
Section 6.8 Xxxxxxx............................................17
Section 6.9 Names. ...........................................18
ARTICLE VII Indemnification.............................................18
Section 7.1 Indemnification by Harbor Global...................18
Section 7.2 Indemnification by Parent..........................19
Section 7.3 Indemnification Procedures. ......................19
Section 7.4 Certain Limitations................................20
Section 7.5 Exclusivity of Tax Separation Agreement............21
ARTICLE VIII Conditions..................................................21
Section 8.1 Tax Separation Agreement. ........................21
Section 8.2 Certain Transactions. ............................21
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...................................22
Section 9.1 Modification or Amendment..........................22
Section 9.2 Counterparts.......................................22
Section 9.3 Governing Law. ...................................22
Section 9.4 Notices. .........................................22
Section 9.5 Captions. ........................................23
Section 9.6 Assignment. ......................................23
Section 9.7 Certain Obligations. .............................23
Section 9.8 Specific Performance. ............................23
Section 9.9 Severability. ....................................23
Section 9.10 Entire Agreement. ................................24
Section 9.11 Jurisdiction. ....................................24
SCHEDULE 5.2A..................................................................1
SCHEDULE 5.2B..................................................................1
SCHEDULE 5.2C..................................................................1
EXHIBIT A......................................................................1
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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 $.0025 per share (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:
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ARTICLE I
DEFINITIONS
Section 1.1 "Assumed Liabilities" shall have the meaning set
forth 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.
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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
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,
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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, 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.
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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.
Section 1.28 "Pioneer Forest" shall have the meaning set forth
in
Section 5.1 hereof.
Section 1.29 "PIOGlobal" shall have the meaning set forth in
Section 5.1 hereof.
Section 1.30 "Pioneer Goldfields II" shall have the meaning
set forth in Section 5.1 hereof.
Section 1.31 "Pioneer International" shall have the meaning
set forth in Section 5.1 hereof.
Section 1.32 "Pioneer Omega" shall have the meaning set forth
in Section 5.1 hereof.
Section 1.33 "Pioneer Poland Fund Holding Company" shall have
the meaning set forth in Section 5.1 hereof.
Section 1.34 "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 1.35 "PREA" shall have the meaning set forth in
Section 5.1 hereof.
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Section 1.36 "Representatives" of a party shall mean such
party's affiliates, directors, officers, employees, agents or other
representatives, including attorneys, accountants and financial advisors.
Section 1.37 "Restructuring" shall have the meaning set forth
in Section 5.1 hereof.
Section 1.38 "Retained Liabilities" shall have the meaning set
forth in Section 5.2 hereof.
Section 1.39 "SEC" shall have the meaning set forth in Section
8.3 hereof.
Section 1.40 "Taxes" shall have the meaning set forth in
Section 1.19 of the Tax Separation Agreement.
Section 1.41 "Tax Separation Agreement" shall have the meaning
set forth in Section 4.1 hereof.
Section 1.42 "Time of Distribution" shall mean the time as of
which the Distribution is effective pursuant to Section 2.3 hereof.
Section 1.43 "Transfer Agent" shall mean Equiserve Limited
Partnership as transfer agent for Harbor Global Common Stock.
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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 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
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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
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").
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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;
(ii) transfer, assign and convey all of the
capital stock of Closed Joint-Stock Company "Tas-Yurjah" Mining
Company, a Russian joint-stock company, owned by Parent 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
capital stock of JSL Co. Dalplaz, a Russian joint-stock company, owned
by parent to Harbor Far East Exploration;
(iv) transfer, assign and convey all of the
capital stock of Closed Joint-Stock Company "Pioneer-Starma-Equipment,"
a Russian joint-stock company, owned by Parent to Harbor Far East
Ventures, LLC, a Delaware limited liability company and wholly owned
subsidiary of Parent ("Harbor Far East Ventures");
(v) transfer, assign and convey all of the
capital stock of International Joint-Stock Company "Starma-Holding," a
Russian joint-stock company, owned by Parent to certain employees and
directors of International Joint-Stock Company "Starma-Holding";
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(vi) transfer, assign and convey all of the
capital stock of Closed Joint-Stock Company "Starma-Port," a Russian
joint-stock company, owned by Parent to certain employees and directors
of Closed Joint-Stock Company "Starma-Port";
(vii) 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 Pioneer Forest, Inc.
("Pioneer Forest"), and liquidate Pioneer Forest, Inc.;
(viii) cause Pioneer Real Estate Advisors,
Inc., a Delaware corporation and wholly owned subsidiary of Parent, to
convert to a Delaware limited liability company, PREA, LLC ("PREA"),
pursuant to Section 266(b) of the DGCL;
(ix) 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
PREA;
(x) cause PREA to transfer, assign and
convey its membership interests in PBO Property Capital, L.L.C. to
Parent;
(xi) cause Pioneer Goldfields II Limited, a
corporation dually incorporated in Delaware and Guernsey, Channel
Islands and wholly owned subsidiary of Parent ("Pioneer Goldfields
II"), to revoke its Delaware charter pursuant to Section 390 of the
DGCL;
(xii) 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;
(xiii) 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
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Delaware limited liability companies 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 Corporation, which is a direct wholly owned subsidiary of
Parent ("Pioneer International") ("Pioneer Poland Fund Holding
Company"), to revoke its Delaware charter pursuant to Section 390 of
the DGCL;
(b) Parent shall contribute, or cause Pioneer
International to contribute, as a capital contribution to Harbor
Global:
(i) $22.6 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 Pioneer Forest;
(v) 100% of the issued and outstanding
membership interests in PREA;
(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
Parent's entire interest in Pioneer Metals and Technology, Inc.;
(viii) 100% of the issued and outstanding
capital stock of Pioneer Omega;
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(ix) 100% of the issued and outstanding
capital stock of PIOGlobal Corporation, a Delaware corporation and
wholly owned subsidiary of Parent;
(x) 100% of the issued and outstanding share
capital of Pioneering Management, Ltd., a Polish joint-stock company
and wholly owned subsidiary of Pioneer International;
(xi) 100% of the issued and outstanding
capital stock of Pioneer Investments Poland Limited, a Jersey, Channel
Islands corporation and direct wholly owned subsidiary of Pioneer
International;
(xii) 100% of the issued and outstanding share
capital of Pioneer Polish Fund Holding Company;
(xiii) all of the capital stock of Anabasis
Enterprises Ltd., a Cypriot company, owned by Parent, such shares
representing 99% of the issued and outstanding capital stock of
Anabasis Enterprises Ltd.;
(xiv) all of the capital stock of Pioneer Omega
(Cyprus) Ltd., a Cypriot company, owned by Parent;
(xv) all of the capital stock of PT Pioneer
Ongko, an Indonesian corporation, owned by Parent;
(c) Parent shall pay the outstanding balance of the
OPIC Loan, including any and all interest and other amounts payable in respect
thereof;
(d) Harbor Global shall (i) organize HGC Ltd., a
Bermuda limited duration company and wholly owned subsidiary of Harbor Global
("HGC"), (ii) contribute an amount of cash to HGC as a contribution to capital
necessary to permit HGC to purchase a 1% equity interest in Harbor Global II 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;
(e) Harbor Global shall (i) organize Harbor Global
II, (ii) cause HGC to purchase a 1% equity interest in Harbor Global II, (iii)
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
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cause it to be treated as a partnership for United States federal income tax
purposes; and
(f) Harbor Global shall (i) cause Harbor Global II to
organize HGCL Ltd., a Bermuda limited duration company and wholly owned
subsidiary of Harbor Global II ("HGCL"), (ii) cause HGCL 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 (iii) cause Harbor Global II
to transfer, assign and convey all of the issued and outstanding equity of
Pioneer Forest, PREA and Pioneer Omega to HGCL 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 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
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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
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
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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 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).
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(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.
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
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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 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.
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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
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
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(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.
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
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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.
(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.
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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 V 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.
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.
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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:
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.
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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 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
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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
9.4 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: Xxxx X. Xxxxx, Xx.
Title: Chairman, President and Chief
Executive Officer
HARBOR GLOBAL COMPANY LTD.
By:_______________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
HARBOR GLOBAL II LTD.
By:________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
Signature Page to Distribution Agreement
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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 VII 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
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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 "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.
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13. 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 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
1