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EXHIBIT 10.77
ASSET PURCHASE AGREEMENT
THIS AGREEMENT made and entered into as of the 18th day of March, 1999
by and among PCC Transfer Limited Partnership, a Delaware limited partnership
(the "Purchaser"), Pioneer Capital Corp., a Massachusetts corporation ("PCC"),
Pioneer Ventures Limited Partnership, a Massachusetts limited partnership
("PVLP" and, together with PCC, the "Sellers"), and The Pioneer Group, Inc., a
Delaware corporation ("PGI").
W I T N E S S E T H
WHEREAS, PCC wishes to sell to the Purchaser, and the Purchaser wishes
to purchase from PCC, those assets listed on SCHEDULE A hereto, and all other
securities acquired by PCC from and after the date hereof and prior to the
Closing, as that term is defined below (collectively, the "PCC Assets") on the
terms and conditions set forth below;
WHEREAS, PVLP wishes to sell to the Purchaser, and the Purchaser wishes
to purchase from PVLP, those assets listed on SCHEDULE B hereto and all other
securities acquired by PVLP from and after the date hereof and prior to the
Closing, as that term is defined below (the "PVLP Assets" and, together with the
PCC Assets, the "Assets").
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. SALE AND PURCHASE OF ASSETS. Subject to the terms and
conditions hereof, at the Closing (as defined below):
(x) PCC will sell, assign and transfer the PCC Assets to
the Purchaser, and the Purchaser shall purchase the PCC Assets from
PCC, for the aggregate amount of (i) $18,218,349, which price shall be
allocated among the PCC Assets in the manner specified on SCHEDULE A
plus (ii) the cost of all PCC Assets acquired by PCC between December
31, 1998 and the Closing, minus (iii) the amount of all cash
distributions in respect of the PCC Assets received by PCC between
December 31, 1998 and the Closing (the total amount payable pursuant to
this clause (x) being referred to as the "PCC Purchase Price"); and
(y) PVLP will sell, assign and transfer the PVLP Assets
to the Purchaser, and the Purchaser shall purchase the PVLP Assets from
PVLP, for the aggregate amount of (i) $13,011,179, which price shall be
allocated among the PVLP Assets in the manner specified on SCHEDULE B
plus (ii) the cost of all PVLP Assets acquired by PVLP between December
31, 1998 and the Closing, minus (iii) the amount of all cash
distributions in respect of the PVLP Assets received by PVLP between
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1998 and the Closing, exclusive of $888,242 of distributions received
by PCC in respect of the sale of securities of PSI Holding Group, Inc.
(the total amount payable pursuant to this clause (y) being referred to
as the "PVLP Purchase Price", and the PVLP Purchase Price and the PCC
Purchase Price being hereinafter referred to collectively as the
"Purchase Price").
2. CLOSING, ETC. The transfer of the Assets by the Sellers, and
the purchase thereof by the Purchaser, shall take place at a closing (the
"Closing") to be held at the offices of The Pioneer Group, Inc., 60 State
Street, Boston, MA 02109, at 10:00 a.m. local time promptly after all conditions
set forth in Sections 5 and 6 hereof have been fulfilled (the "Closing Date").
If any condition in Section 5 or 6 is not satisfied in any respect (or is not
duly waived) at the Closing, the party whose obligations are subject to such
condition may extend the date of the Closing to a date not later than March 30,
1999 (during which extension period the other party shall use all reasonable
efforts to cause all such conditions to be satisfied in all respects). If all
conditions are determined to be satisfied (or are duly waived) at the Closing
(whether or not delayed), the Closing shall be consummated.
3. REPRESENTATIONS AND WARRANTIES. Each Seller, severally and not
jointly, and PGI, as to itself and as to both Sellers, hereby represents and
warrants to the Purchaser as follows:
(a) Such Seller is duly organized and validly existing, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of such Seller, and this Agreement has been duly
executed and delivered by such Seller and constitutes a legal, valid and binding
obligation of such Seller. PGI is duly organized and validly existing, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of PGI, and this Agreement has been duly executed
and delivered by PGI and constitutes a legal, valid and binding obligation of
PGI.
(b) Such Seller has full power and authority to enter into this
Agreement and to assign the Assets it is assigning pursuant to this Agreement,
the execution and delivery of this Agreement by such Seller and, except as set
forth on SCHEDULE C, the consummation of the transactions contemplated by this
Agreement by such Seller do not violate any of the terms and provisions of the
organizational documents of such Seller or any law, statute, regulation, decree,
license, order, agreement or other restriction applicable to such Seller or any
of the Assets it is assigning pursuant to this Agreement; provided, however,
that neither of the Sellers is making any representation or warranty in this
Agreement or any instrument delivered by it pursuant hereto as to the
application to the transactions contemplated hereby of The Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), or as to
compliance by any person with the HSR Act in connection with such transactions.
No approval, consent, waiver, authorization or other order of, and no
declaration, filing (excluding filings required
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under the HSR Act, as to which no representation or warranty is made herein),
registration, qualification or recording with, any governmental authority is
required to be obtained or made by or on behalf of such Seller in connection
with the execution, delivery or performance of this Agreement and the
transactions contemplated hereby, except as will have been obtained or made and
be in full force and effect at the Closing. PGI has full power and authority to
enter into this Agreement, the execution and delivery of this Agreement by PGI
and, except as set forth on SCHEDULE C, the consummation of the transactions
contemplated by this Agreement by PGI do not violate any of the terms and
provisions of the organizational documents of PGI or any law, statute,
regulation, decree, license, order, agreement or other restriction applicable to
PGI; provided, however, that PGI is not making any representation or warranty in
this Agreement or any instrument delivered by it pursuant hereto as to the
application to the transactions contemplated hereby of the HSR Act, or as to
compliance by any person with the HSR Act in connection with such transactions.
No approval, consent, waiver, authorization or other order of, and no
declaration, filing (excluding filings required under the HSR Act, as to which
no representation or warranty is made herein), registration, qualification or
recording with, any governmental authority is required to be obtained or made by
or on behalf of PGI in connection with the execution, delivery or performance of
this Agreement and the transactions contemplated hereby, except as will have
been obtained or made and be in full force and effect at the Closing.
(c) Except as set forth on SCHEDULE C, such Seller owns all right,
title and interest in and to the Assets it is assigning pursuant to this
Agreement, free and clear of all claims, liens, encumbrances, voting agreements
or rights of any nature of any third party (each, an "Encumbrance") and upon
payment of the Purchase Price by the Purchaser as provided in this Agreement,
the Purchaser will acquire good and valid title to the Assets such Seller is
assigning pursuant hereto, free and clear of any Encumbrances. SCHEDULE C sets
forth a list of the material documents and agreements (including amendments and
schedules thereto) that, to such Seller's knowledge, constitute all documents
and agreements to which such Seller is a party or by which it is bound relating
to its ownership of the Assets. To Sellers' knowledge, all agreements and
documents referred to in SCHEDULE C are, after giving effect to any amendments
thereto, valid and are in full force and effect, and Seller has no reason to
believe that any of such agreements will not be in full force and effect at the
Closing. Except as set forth in SCHEDULE C, such Seller (i) has no obligation to
make any capital contributions to any Portfolio Entity (as that term is defined
below) or to return any distributions or portions of distributions previously
received; (ii) is not a party to any contract, agreement or commitment (other
than those relating to the transactions contemplated by this Agreement) with
respect to the Assets or the Portfolio Entities; and (iii) is not in default,
nor to Seller's knowledge, is there any basis for any valid claim of default,
under any agreement made or obligation owed by it with respect to the Portfolio
Entities. Such Seller has furnished the Purchaser with copies of all material
correspondence and other material written communications sent by or on behalf of
such Seller to, or received by or on behalf of such Seller from, any of the
Portfolio Entities or any holder of their respective securities.
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(d) SCHEDULES A and B list (x) the financial statements of each of
the companies (a "Portfolio Entity") the securities of which are included in the
Assets which were provided by the Sellers to the Purchaser (collectively, the
"Financial Statements"), (y) the jurisdiction of the incorporation of each of
the Portfolio Entities and (z) to the knowledge of such Seller, the
capitalization of each Portfolio Entity, it being understood that the foregoing
representation is applicable to each Seller only with respect to the Assets.
Such Seller has no knowledge of any facts which cause it to believe that any of
the Financial Statements with respect to the Assets do not describe in all
material respects the financial position and operations of the respective
Portfolio Entities as of the dates of the Financial Statements. SCHEDULES A and
B contain true and accurate lists of: (A) all distributions received by Sellers
or for which a Seller has received notice of distribution from the Portfolio
Entities since December 31, 1998 (the "Cut Off Date"), showing the date and
amount of each distribution; (B) all capital contributions and other payments
made by a Seller to a Portfolio Entity since the Cut Off Date, showing the date
and amount of each payment; and (C) all obligations of a Seller to make future
capital contributions to the Portfolio Entities, showing the scheduled date and
amount of each. To such Seller's knowledge, the percentage of each Portfolio
Entity represented by the Assets on a fully diluted basis set forth on SCHEDULES
A and B is true and correct.
(e) Except as set forth on SCHEDULE C, such Seller has no
knowledge of any material adverse change in the condition (financial or
otherwise) of any Portfolio Entity whose securities are included in the Assets
since the date of the latest Financial Statement listed on Schedules A and B
with respect to such Portfolio Entity.
(f) Such Seller has employed no finder, broker, agent or other
intermediary in connection with the negotiation or consummation of this
Agreement or any of the transactions contemplated hereby.
(g) Except as set forth on SCHEDULE C or as disclosed in the
Financial Statements of the Portfolio Entities, there is no (i) action, suit,
claim, proceeding or investigation pending or, to such Seller's knowledge,
threatened against or affecting such Seller, at law or in equity, or before or
by any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) arbitration
proceeding relating to such Seller, (iii) to Seller's knowledge, governmental
inquiry pending or threatened against it or affecting it, which, if adversely
determined, would invalidate or prevent the consummation of, the transactions
contemplated by this Agreement or materially and adversely affect any of the
Assets, or (iv) to such Seller's knowledge, any action, suit, claim, proceeding
or investigation pending or threatened against or affecting any Portfolio Entity
which, if determined adversely to the interests of the Portfolio Entity, would
have a material adverse effect on the Portfolio Entity.
Any reference in this Agreement to any Seller's "knowledge" or to any
matter "known" to any Seller, or words or similar import, means the actual
knowledge of any of John F. Cogan, Stephen Kasnet, John A. Boynton, Donald
Hunter or Robert Nault, each of whom is
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an officer of The Pioneer Group, Inc., without any investigation other than
inquiry of Christopher W. Dick, Christopher W. Lynch, Frank M. Polestra and
Leigh E. Michl.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to the Sellers as follows:
(a) The Purchaser is duly organized and validly existing, and the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of the Purchaser, and this Agreement has been
executed and delivered by the Purchaser and constitutes a legal, valid and
binding obligation of the Purchaser. (b) The Purchaser has full power and
authority to enter into this Agreement and to purchase the Assets, and the
execution and delivery of this Agreement by the Purchaser and the consummation
of the transactions contemplated by this Agreement by the Purchaser do not
violate any of the terms and provisions of the organizational documents of the
Purchaser or any law, statute, regulation, decree, license, order, agreement or
other restriction applicable to the Purchaser. No approval, consent, waiver,
authorization or other order of, and no declaration, filing, registration,
qualification or recording with, any governmental authority is required to be
obtained or made by or on behalf of the Purchaser in connection with the
execution, delivery or performance of this Agreement and the transactions
contemplated hereby, except as will have been obtained or made and be in full
force and effect at the Closing.
(c) The Purchaser is acquiring the Assets solely for its own
account for investment and not with a view to or for sale in connection with any
distribution thereof.
(d) The Purchaser is experienced in financial and business matters
and is capable of evaluating the risks of its purchase of the Assets under this
Agreement. The Purchaser understands that purchase of the Assets involves a high
degree of risk.
(e) The Purchaser has employed no finder, broker, agent or other
intermediary in connection with the negotiation or consummation of this
Agreement or any of the transactions contemplated hereby.
5. CONDITIONS OF CLOSING OF THE PURCHASER. The obligations of the
Purchaser to purchase the Assets and to transfer funds at the Closing are
subject to the fulfillment at or before the Closing of the following conditions
precedent (any one or more of which may be waived at the sole discretion of the
Purchaser, except that the conditions described in Sections 5(c) and (f) may not
be waived without the consent of the Sellers and PGI):
(a) The representations and warranties made by each of the Sellers
and PGI in this Agreement shall have been true and correct when made, and shall
be true and correct as of such Closing as if made on the date of such Closing
and each Seller and PGI shall have delivered to the Purchaser a certificate,
dated the Closing Date and signed by such Seller and PGI, to such effect.
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(b) Sellers shall have delivered to the Purchaser, free and clear
of any Encumbrances, certificates representing all of the securities
constituting the Assets, duly endorsed in blank or accompanied by stock powers
or other instruments of transfer duly executed in blank, and bearing or
accompanied by all requisite stock transfer stamps.
(c) All consents or waivers with respect to the transfer of the
Assets shall have been obtained.
(d) The Purchaser shall have received opinions, addressed to it
and dated the Closing Date, from Testa, Hurwitz & Thibeault, LLP and Hale and
Dorr LLP, counsel to the Sellers, in form and substance reasonably satisfactory
to the Purchasers.
(e) Sellers and PGI shall have performed all agreements and
obligations and complied with all conditions required by this Agreement to be
performed or complied with by Sellers and PGI at or prior to the Closing and
each Seller and PGI shall have delivered to the Purchaser a certificate, dated
the Closing Date and signed by such Seller and PGI, to such effect.
(f) No order of any nature issued by a court of competent
jurisdiction restraining, prohibiting or affecting the consummation of the
transactions contemplated by this Agreement shall be in effect, and no claim,
suit, action, investigation, inquiry or other proceeding by any governmental
body or other person or legal or administrative proceeding shall be pending or
threatened which questions the validity or legality of the transactions
contemplated by this Agreement.
6. CONDITIONS OF CLOSING OF THE SELLERS. The obligations of the
Sellers to transfer the Assets at the Closing are subject to the fulfillment at
or before the Closing of the following conditions precedent (any one or more of
which may be waived at the sole discretion of the Sellers and PGI, except that
the condition described in Section 6(d) may not be waived without the consent of
the Purchaser):
(a) The representations and warranties made by the Purchaser in
this Agreement shall have been true and correct when made, and shall be true and
correct as of the Closing as if made on the date of the Closing and the
Purchaser shall have delivered to such Seller and PGI a certificate, dated the
Closing Date and signed by the Purchaser, to such effect.
(b) The Purchase Price to be delivered by the Purchaser hereunder
shall have been delivered to the Sellers. Such Purchase Price shall be payable
by wire transfer of same-day funds, to one or more accounts designated by the
Sellers.
(c) Purchaser shall have performed all agreements and obligations
and complied with all conditions required by this Agreement to be performed or
complied with by Purchaser
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at or prior to the Closing and Purchaser shall have delivered to the Sellers and
PGI a certificate, dated the Closing Date and signed by the Purchaser, to such
effect.
(d) No order of any nature issued by a court of competent
jurisdiction restraining, prohibiting or affecting the consummation of the
transactions contemplated by this Agreement shall be in effect, and no claim,
suit, action, investigation, inquiry or other proceeding by any governmental
body or other person or legal or administrative proceeding shall be pending or
threatened which questions the validity or legality of the transactions
contemplated by this Agreement.
7. COVENANTS. PGI and the Sellers agree that from the date of
this Agreement until the Closing Date:
(a) PGI and each Seller shall afford to Purchaser reasonable
access to any and all properties, books, records and other information of Seller
relating to the Assets in order that Purchaser may have full opportunity to make
such investigations of the Assets as shall be reasonably necessary. PGI and each
Seller shall furnish any and all financial and operating data and other
information relating to or in connection with the Assets in its possession or
which it may obtain without undue cost or hardship as the Purchaser from time to
time may reasonably request prior to the Closing. The Purchaser shall conduct
its due diligence in a cooperative manner with minimal disruption to the
business of PGI or the Sellers, and all such due diligence shall be conducted at
the offices of PCC in Boston, Massachusetts, during normal business hours. Any
investigation by the Purchaser shall not affect the representations, covenants
and warranties of PGI or the Sellers under this Agreement.
(b) PGI and the Sellers will conduct their business as it relates
to the Assets only in the ordinary and usual course and shall comply in all
respects with all laws, ordinances and regulations of governmental authorities
applicable to them and to the conduct of such business. Except as consented to
by the Purchaser in writing, neither Seller will: (i) dispose, liquidate,
mortgage or sell any of the Assets or acquire any additional assets, except for
acquisitions contemplated by or described in SCHEDULE C; (ii) consent to amend
or modify any of the documents or agreements referred to on SCHEDULE C; (iii)
forgive, release, compromise or demand payment of any indebtedness owed to it by
any Portfolio Entity other than upon full payment thereof; (iv) make any
voluntary capital contributions or fail to make any required capital
contributions to any Portfolio Entity; (v) take any action which would result in
a reduction in a Seller's percentage of ownership in any of the Portfolio
Entities; or (vi) agree to do any of the foregoing.
(c) After the date of this Agreement and prior to any termination
of this Agreement in accordance with Section 8 below, neither PGI nor any Seller
will initiate contact with, solicit any inquiry or proposal by or enter into
discussions with, or disclose any information regarding the Assets or afford
access to the properties, books or records of a Seller relating to the Assets
to, any other corporation, general or limited partnership, limited liability
company,
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person or other entity or group in connection with (i) any proposed sale or
transfer of any of the Assets, or (ii) any similar transaction other than
pursuant to this Agreement.
(d) Seller shall give prompt notice to the Purchaser of (i) any
notice or other communication received by such Seller relating to a default or
event which, with notice or lapse of time or both, would become a default, under
any of the documents or agreements referred to on SCHEDULE C, (ii) any material
notice or other communication from or on behalf of any Portfolio Entity or any
security holder of any Portfolio Entity, (iii) any material notice or other
material communication received by such Seller relating to any contemplated or
pending claim, action, suit, proceeding or investigation by any governmental
department, commission, board, agency, instrumentality or authority involving or
relating to any Portfolio Entity or any of the Assets, and (iv) any matter which
would cause any material change with respect to any representations made in this
Agreement. With respect to any such notice or other communication, such Seller
shall inform the Purchaser of the receipt and substance thereof and, if in
writing, shall furnish the Purchaser with a copy thereof.
(e) PGI and each Seller shall promptly supplement or amend the
Schedules to this Agreement with respect to any matter arising after the date of
this Agreement which, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in the Schedules.
(f) Prior to Closing, PGI and the Sellers shall use commercially
reasonable efforts to obtain all necessary consents and waivers to permit the
transfer of the Assets to the Purchaser free and clear of all Encumbrances. PGI
and the Sellers shall bear the full cost of obtaining all such consents and
waivers.
Each of the Sellers and PGI agrees that, from and after the Closing,
they will promptly forward to the Purchaser any notices, communications,
correspondence or distributions received by them in respect of the Assets, to
the extent that such notices, communications, correspondence and distributions
relate to periods from and after the Closing date. The Sellers and PGI agree to
promptly endorse checks and execute stock powers and similar instruments
relating to such distributions and otherwise to provide reasonable assistance
and cooperation in connection with putting the Purchaser in possession of all
such distributions, notices, communications and correspondence.
Each of the Sellers, by execution of this Agreement, hereby constitutes
and appoints the Purchaser such Seller's agent and attorney-in-fact for the
purposes of: (i) endorsing in favor of the Purchaser any checks or signing any
stock powers or similar instruments conveying title to the Purchaser in
connection with any distributions received by the Sellers; (ii) signing proxies
or similar instruments or agreements in connection with the voting or granting
of approvals with respect to any of the securities included within the Assets of
such Seller; and (iii) taking such other actions as may be necessary to convey
title to the Assets to the Purchaser on the terms contemplated by this
Agreement; and the power of attorney contained in this Section 7 is
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coupled with an interest and, therefore, is irrevocable and shall survive the
dissolution, bankruptcy or incapacity of such Seller. Nothing in the foregoing
power of attorney is intended to, nor shall it be construed to, authorize the
Purchaser to (w) take any other action in the name and on behalf of the Sellers,
including without limitation, any action relating or with respect to any asset
of any Seller which is not included within the Assets, (y) create any obligation
in the name or on behalf of any Seller, or (z) waive any right or grant any
consent in the name and on behalf of any Seller pursuant to this Agreement.
Without limiting the foregoing, the Purchaser is not hereby authorized to take
any action on behalf of the Sellers in respect of the Sellers' share of any
escrow amounts established in respect of certain securities of the Sellers which
were sold prior to the date hereof and which are not included within the Assets.
The Purchaser shall notify the Sellers within two business days following the
Purchaser's execution of any document, agreement or instrument pursuant to the
power of attorney granted hereby, which notice shall identify in reasonable
detail the item executed and the purpose for which it was executed.
8. TERMINATION.
(a) This Agreement may be terminated at any time by the mutual
consent of the parties hereto.
(b) This Agreement may be terminated by any of the parties on or
after March 30, 1999 by written notice to the other parties if the transactions
contemplated hereby shall not have been consummated; provided, however, that the
right to terminate this Agreement under this Section 8(b) shall not be available
to a party if such party's breach of this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before that date.
(c) The representations and warranties made in this Agreement
shall expire fifteen (15) months from the Closing Date, except that the
representations and warranties made by the Sellers and PGI in the first sentence
of Section 3(c) shall expire twenty-four (24) months from the Closing Date.
9. INDEMNIFICATION.
(a) INDEMNIFICATION BY SELLER. PGI and each Seller,
jointly and severally (but severally as between the Sellers), agree to defend,
indemnify and hold harmless the Purchaser, and its partners, employees, agents
and any of its successors and assigns, from and against any and all losses,
damages, claims, suites, proceedings, liabilities, costs and expenses (including
settlement costs, interest, penalties, reasonable attorney's fees and any
reasonable legal or other expenses for investigation or defense of any actions
or threatened actions) (collectively, "Losses" or "Claims," as the context
requires) which may be imposed, sustained, incurred or suffered or asserted as a
result of, relating to or arising out of (i) the breach of any representation or
warranty of PGI or a Seller contained in this Agreement (unless specifically
waived in writing by the Purchaser at or prior to the Closing), (ii) any failure
by PGI or a
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Seller to perform any covenant, agreement or obligation contained in this
Agreement (unless specifically waived in writing by the Purchaser at or prior to
the Closing),(iii) any and all obligations (other than obligations arising from
actions on the part of the Purchaser or obligations relating to periods after
the Closing Date), if any, of the Purchaser to return distributions or portions
of distributions received by Seller prior to the Closing from any of the
Portfolio Entities, or to make capital contributions to any of the Portfolio
Entities in respect to periods occurring prior to the Closing in excess of those
set forth on SCHEDULE A or B, as applicable, whether required by the laws of the
jurisdiction in which the Portfolio Entities were organized or otherwise, (iv)
the Sellers' ownership of the Assets arising in respect of periods prior to the
Closing (provided that, except to the extent of any liability under clause (i)
above, neither the Sellers nor PGI shall have any liability under this clause
(iv) based on the value of the Assets or the Portfolio Entities); and (v) the
litigation matter described on SCHEDULE C (Shushama Gokhale Complaint).
(b) INDEMNIFICATION BY THE PURCHASER. The Purchaser
agrees to defend, indemnify and hold harmless PGI, the Sellers and their
officers, directors, employees, agents and any of their successors and assigns
from and against any and all Losses and Claims which may be imposed, sustained,
incurred or suffered or asserted as a result of, relating to or arising out of
(i) the breach of any representation or warranty of the Purchaser contained in
this Agreement (unless specifically waived in writing by PGI or the Sellers at
or prior to the Closing), (ii) any failure by the Purchaser to perform any
covenant, agreement or obligation of the Purchaser contained in this Agreement
(unless specifically waived in writing by PGI or the Sellers at or prior to the
Closing), (iii) any and all obligations, if any, of the Purchaser to return
distributions or portions of distributions received by the Purchaser after the
Closing from any of the Portfolio Entities, or to make capital contributions to
any of the Portfolio Entities in respect to periods occurring after the Closing,
whether required by the laws of the jurisdiction in which the Portfolio Entities
were organized or otherwise, and (iv) the Purchaser's ownership of the Assets,
or any rights of the Purchaser pursuant to Section 10(b) to an Excluded Interest
after the Closing, including liabilities for taxes, charges, fees and periodic
deposits (including interest and penalties) determined to be due to any
governmental entity.
(c) PROCEDURE FOR THIRD PARTY CLAIMS.
(i) If a person entitled to assert a claim for
indemnification under this Agreement shall receive notice of the assertion by
any person not a party to this Agreement of any claim or of the commencement of
any action or proceeding (a "Third Party Claim") with respect to which PGI, a
Seller or the Purchaser is obligated to provide indemnification, the indemnified
party (the "Indemnitee") shall give the indemnifying party (the "Indemnitor")
prompt written notice after becoming aware of such Third Party Claim. The
failure of the Indemnitee to give notice as provided in this Section shall not
relieve the Indemnitor of its obligations for indemnification under this
Agreement, except to the extent that the failure has materially and adversely
affected the rights of the Indemnitor. The notice from the Indemnitee shall
describe the Third Party Claim in reasonable detail.
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(ii) An Indemnitor may elect to compromise or
defend, at the Indemnitor's own expense and by such Indemnitor's own counsel,
any Third Party Claim provided that the Indemnitor acknowledges its obligation
to indemnify in respect of the Third Party Claim. If an Indemnitor does so
acknowledge its obligation, it shall have the right to compromise or defend the
Third party Claim, and shall, within thirty (30) days (or sooner, if the nature
of the Third Party Claim so requires), notify the Indemnitee of its intent to do
so. The Indemnitee shall cooperate in the compromise of, or defense against, the
Third Party Claim and the Indemnitor shall pay the Indemnitee's actual
out-of-pocket expenses reasonably incurred in connection with its cooperation.
After notice from an Indemnitor to an Indemnitee of its election to assume the
defense of a Third Party Claim, the Indemnitor shall not be liable to the
Indemnitee under this Agreement for any legal expenses subsequently incurred by
the Indemnitee in connection with the defense of the Third Party Claim, PROVIDED
that Indemnitee shall have the right to employ one counsel in each applicable
jurisdiction (if more than one jurisdiction is involved) to represent Indemnitee
if, in the Indemnitee's reasonable judgement, a conflict of interest between the
Indemnitee and the Indemnitor exists in respect of such Third Party Claim, and
in that event the fees and expenses of such separate counsel shall be paid by
the Indemnitor. Except with the written consent of each related Indemnitee
(which consent shall not be unreasonably withheld), no Indemnitor shall consent
to entry of any judgment or enter into any settlement which provides for
anything other than money damages or other money payments for which the
Indemnitee is entitled to indemnification under this Agreement or which does not
contain as an unconditional term thereof the giving by the claimant or plaintiff
to the Indemnitee of a release from all liability in respect of the Third Party
Claim. If an Indemnitor does not so acknowledge its obligation to indemnify,
elects not to defend against a Third Party Claim, or fails to notify an
Indemnitee of its election as provided in this Section, the Indemnitee may pay,
compromise or defend such Third Party Claim on behalf of and for the account and
risk of the Indemnitor; provided that the Indemnitor may participate in the
defense of such Third Party Claim at its own expense.
(iii) If there is a reasonable likelihood that a
Third Party Claim may materially and adversely affect an Indemnitee, other than
as a result of money damages or other money payments for which the Indemnitee is
entitled to indemnification hereunder, the Indemnitee will have the right, after
consultation with the Indemnitor and at the cost and expense of the Indemnitor,
to defend the Third Party Claim, with counsel reasonably acceptable to
Indemnitor.
(d) PROCEDURE FOR NON-THIRD PARTY CLAIMS. With respect to
any claim for indemnification hereunder which does not result from a Third Party
Claim, the Indemnitor shall have a period of thirty (30) days after receipt of
notice from the Indemnitee within which to respond to the Indemnitee. If the
Indemnitor does not respond within the thirty (30) day period, the Indemnitor
shall be deemed to have accepted responsibility to make payment, and shall have
no further right to contest the validity of such claim. If the Indemnitor does
respond
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within the thirty (30) day period and rejects the claim in whole or in part, the
Indemnitee shall be free to pursue such remedies as may be available to the
Indemnitee under applicable law.
(e) REDUCTION OF CLAIM OR LOSS. If the amount of any
Claim or Loss shall, at any time subsequent to payment pursuant to this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the related Indemnitor.
(f) LIMITATIONS ON INDEMNIFICATION OBLIGATIONS.
Notwithstanding anything to the contrary set forth above, (i) an Indemnitor
shall have no liability to an Indemnitee under this Agreement unless and until
the aggregate Losses and Claims of the Indemnitee (determined as provided below)
pursuant to this Agreement and pursuant to that certain Asset Purchase Agreement
dated of even date herewith between the Purchaser and PGI (the "PGI Agreement")
reach an aggregate amount of at least $100,000, in which case the Indemnitor
shall be liable for all Claims and Losses, not just those in excess of $100,000,
and (ii) the maximum aggregate liability of an Indemnitor under this Agreement
shall in no event exceed the purchase price of the Assets; provided that, the
provisions of clause (i) of this Section 9(f) shall not be applicable to any
indemnification obligation of PCC, PVLP or PGI arising under Section 10(a)(v).
The Losses and Claims of PGI, PCC and PVLP hereunder shall be aggregated with
those of PGI under the PGI Agreement for purposes of calculating the $100,000
amount referenced above in this Section 9(f).
(g) REMEDIES CUMULATIVE AND NON-EXCLUSIVE. In the case of
a claim for fraud only, the remedies provided in this Section 9 shall be
cumulative and shall not preclude the assertion by any party to this Agreement
of any other rights or the seeking of any other remedies against any other party
to this Agreement. In the case of any other claim arising out of this Agreement
or the transactions contemplated hereby, the remedies provided in this Section 9
shall be exclusive.
10. NONASSIGNABLE INVESTMENT INTERESTS.
(a) To the extent that the assignment of any of the
Assets shall require the consent of any other party, or shall be subject to any
option in any other person by virtue of a request for permission to sell, assign
or transfer or by reason of or pursuant to any sale, assignment or transfer to
the Purchaser, this Agreement shall not constitute a contract to assign the same
to the extent that an attempted assignment would constitute a breach of any
document or agreement referred to on SCHEDULE C, or create rights in others not
desired by the parties.
(b) If after pursuing its obligations set forth in
Section 7(f), PGI and the Sellers are unable to obtain any consent or waiver
with respect to one or more Assets (in each case, an "Excluded Interest") and
all other conditions to the closing have been satisfied, then the Purchaser
shall have the option to require the appropriate Seller to assign to the
Purchaser all of such Seller's economic interests in the Excluded Interest and
hold and exercise any
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residual rights with respect to the Excluded Interest for the benefit of the
Purchaser, to the extent such assignment does not constitute a breach or default
(or an event which, with notice or the passage of time, or both, would
constitute a breach or default) under any agreement to which Seller is a party.
(c) If a Seller makes an assignment to Purchaser as
described in Section 10(b) above:
(i) such Seller shall, with respect to the Excluded
Interests: (A) promptly provide the Purchaser with copies of all
written reports and other communications received by such Seller; (B)
at the option of the Purchaser, either promptly deliver to the
Purchaser or to the Purchaser's designee all distributions of any
nature received by such Seller or sell securities received as
distributions according to instructions received from the Purchaser and
following the sale, promptly remit the proceeds of the sale to the
Purchaser or the Purchaser's designee; (C) exercise its rights under
all documents and agreements pertaining to the Excluded Interests in
accordance with the directions and for the benefit of the Purchaser;
(D) take no action not otherwise described in (A) through (C) above
without the prior approval of the Purchaser, which approval shall not
be unreasonably withheld or delayed; (E) grant to the Purchaser's
successors and assigns the rights and privileges of the Purchaser under
this Section 10, PROVIDED that such successors and assigns assume the
Purchaser's obligations to such Seller set forth in Section 10(c)(ii)
below; and (F) execute and deliver to the Purchaser at the Closing an
assignment of such Seller's economic interest containing the terms
outlined in this Section 10(c)(i); and
(ii) the Purchaser shall meet all capital contributions as
described on SCHEDULE A or B, as applicable, required after the Closing
with respect to the Excluded Interests, and, without limiting the
obligations of PGI and the Sellers under Section 9, shall pay all taxes
and other payments associated with the Excluded Interests as if the
Purchaser was the owner of the Excluded Interests.
(d) It is the intent of the Purchaser, the Sellers and
PGI that in the event the parties proceed pursuant to Section 10(b) above: (i)
the applicable Seller will transfer all dominion and control over the Excluded
Interests to the Purchaser to the extent not in breach of the relevant documents
and agreements even though the Seller may continue as a security holder for
state law purposes; (ii) such Seller shall exercise its rights with respect to
the Excluded Interests solely in favor of and in the interest of the Purchaser
consistent with Section 10(c) above; (iii) for federal and state income tax
purposes, the parties will treat the Purchaser as the security holder of the
Excluded Interest; and (iv) if PGI, such Seller or the Purchaser obtains the
missing consent or waiver, the Seller shall promptly convey to the Purchaser,
without payment of any additional consideration, all of Seller's interest in the
Excluded Interest.
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11. MISCELLANEOUS.
(a) Each of the parties hereto shall perform such further acts and
execute such further documents as may reasonably be necessary to carry out and
give full effect to the provisions of this Agreement and the intentions of the
parties as reflected thereby.
(b) This Agreement shall be governed by and construed according to
the laws of Massachusetts, without regard to the conflict of laws provisions
thereof.
(c) Except as otherwise expressly limited herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors, and administrators of the parties hereto. None of the
rights, privileges, or obligations set forth in, arising under, or created by
this Agreement may be assigned or transferred without the prior consent in
writing of each party to this Agreement.
(d) This Agreement and the Schedules hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subject matters hereof and thereof. Any term of this Agreement may be amended
and the observance of any term hereof may be waived (either prospectively or
retroactively and either generally or in a particular instance) only with the
written consent of all of the parties to this Agreement.
(e) All notices and other communications required or permitted
hereunder to be given to a party to this Agreement shall be in writing and shall
be telecopied or mailed by registered or certified mail, postage prepaid, or
otherwise delivered by reputable overnight courier, by hand or by messenger,
addressed to such party's address as set forth below or at such other address as
the party shall have furnished to each other party in writing in accordance with
this provision:
If to the Purchaser:
c/o Ascent Venture Management, Inc.
60 State Street
Boston, Massachusetts 02109
with a copy to:
Landmark Partners Inc.
760 Hopmeadow Street
P.O. Box 188
Simsbury, CT 06070-9760
Attention: Mr. James P. McConnell
If to the Sellers or to PGI:
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c/o The Pioneer Group, Inc.
60 State Street
Boston, Massachusetts 02109
Attention: Stephen Kasnet and
Office of the General Counsel
or such other address with respect to a party as such party shall notify each
other party in writing as above provided. Any notice sent in accordance with
this clause (e) shall be effective (i) if mailed, by registered mail seven (7)
business days after mailing, (ii) if sent by messenger, upon delivery, and (iii)
if sent via telecopier or by reputable overnight courier, on the first business
day following transmission and electronic confirmation of receipt or delivery to
the courier.
(f) Each party hereto shall bear its own expenses in connection
with the transactions contemplated hereby.
(g) No delay or omission to exercise any right, power, or remedy
accruing to any party upon any breach or default under this Agreement, shall be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent, or approval of any kind or character on
the part of any party of any breach or default under this Agreement, or any
waiver on the part of any party of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any of the parties, shall be
cumulative and not alternative.
(h) If any provision of this Agreement is held by an arbitrator or
court of competent jurisdiction to be unenforceable under applicable law, then
such provision shall be excluded from this Agreement and the remainder of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms; PROVIDED, HOWEVER, that in such
event this Agreement shall be interpreted so as to give effect, to the greatest
extent consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of competent
jurisdiction.
(i) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and enforceable against the parties
actually executing such counterpart, and all of which together shall constitute
one and the same instrument.
(j) The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement. The preamble and Schedules are an integral and inseparable part of
this Agreement.
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IN WITNESS WHEREOF the parties have signed this Agreement as of the
date first hereinabove set forth.
PCC TRANSFER LIMITED PARTNERSHIP
By PCC Transfer GP, LLC, its General Partner
By: /s/ C.W. Dick
-----------------------------------------
Name: Christopher W. Dick
PIONEER CAPITAL CORP.
By: /s/ Frank M. Polestra
-----------------------------------------
Name: Frank M. Polestra
Title: President
PIONEER VENTURES LIMITED PARTNERSHIP
By: Pioneer SBIC Corp., Its
General Partner
By: /s/ Frank M. Polestra
-----------------------------------------
Name: Frank M. Polestra
Title: President
THE PIONEER GROUP, INC.
By: /s/ Robert P. Nault
-----------------------------------------
Name: Robert P. Nault
Title: Senior Vice President
[SCHEDULES INTENTIONALLY OMITTED}
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