<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Boston Private Bancorp, Inc.
________________________________________________________________
(Name of Issuer)
Common Stock, $1.00 par value
________________________________________________________________
(Title of Class of Securities)
101119105
_____________________________
(CUSIP Number)
Arthur J. Bauernfeind
Westfield Capital Management Company, Inc.
One Financial Center
Boston, MA 02111
(617) 428-7100
_______________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
October 31, 1997
______________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box
Check the following box if a fee is being paid with the statement (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
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CUSIP NO. 101119105 PAGE 2 OF 7 PAGES
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- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Arthur J. Bauernfeinf
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
OO
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [_]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
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SOLE VOTING POWER
7
NUMBER OF 947,037
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 947,037
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
947,037
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
8.9%
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TYPE OF REPORTING PERSON*
14
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 9 pages
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CUSIP No. 101119105 Page 3 of 7 Pages
ITEM 2. SECURITY AND ISSUER.
This statement relates to the Common Stock $1.00 par value (the "Common
Stock"), of Boston Private Bancorp, Inc. (the "Issuer"). The address of the
principal executive offices of the Issuer is Ten Post Office Square, Boston, MA
02109.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed on behalf of Arthur J. Bauernfeind (the
"Reporting Person" or "Mr. Bauernfeind").
Mr. Bauernfeind is the President, Chief Operating Officer, Investment
Strategist and Portfolio Manager of Westfield Capital Management Company, Inc.,
a Massachusetts corporation ("Westfield") and a wholly owned subsidiary of the
Issuer. Westfield's business address is One Financial Center, Boston, MA 02111.
Mr. Bauernfeind is a citizen of the United States and his address is c/o
Westfield at the address set forth above. During the last five years Mr.
Bauernfeind has not been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or has not been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which he was or is subject to a judgment, decree or final order
enjoining future violations or mandating activities subject to federal or state
securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The acquisition to which this Statement relates resulted from the merger of
Westfield and Boston Private Investment Management, Inc., a Massachusetts
corporation ("BPIM") and a wholly owned subsidiary of the Issuer, pursuant to
the Agreement and Plan of Merger, dated as of August 13, 1997 (the "Merger
Agreement"), by and among the Issuer, BPIM, Westfield and the individual
stockholders listed therein.
ITEM 4. PURPOSE OF TRANSACTION.
Pursuant to the Merger Agreement, on October 31, 1997 BPIM was merged (the
"Merger") with and into Westfield, and Westfield became an indirect wholly owned
subsidiary of the Issuer. In the Merger, all issued and outstanding shares of
Class A Common Stock, $.01 par value per share and Class B Common Stock, par
value $.01 per share, of Westfield (collectively, the "Westfield Common Stock")
were converted into the right to receive an aggregate of 3,918,367 shares of
Common Stock. Prior to the Merger, Mr. Bauernfeind was the record owner of 400
shares of Westfield Common Stock.
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CUSIP No. 101119105 Page 4 of 7 Pages
As a condition to the consummation of the Merger, Mr. Bauernfeind has
agreed not to sell, transfer, assign, hypothecate or otherwise, directly or
indirectly, dispose of any securities of the Issuer until after such time as the
Issuer has published financial results covering at least 30 days of combined
operations of the Issuer and Westfield after October 31, 1997.
Concurrently with the execution and delivery of the Merger Agreement, the
Issuer and the former shareholders of Westfield (collectively, the "Westfield
Shareholders") entered into a registration rights agreement, dated as of August
13, 1997 (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement, Mr. Bauernfeind and the
other Westfield Shareholders have the right to require the Issuer to file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), covering the registration of the shares of Common Stock
received by the Westfield Shareholders in the Merger (the "Registrable
Securities") from time to time until such time after August 13, 2004 as the
Issuer proposes to effect an underwritten public offering of Common Stock and
(i) none of the Westfield Shareholders wishes to include any Registrable
Securities then held in such an offering or (ii) such underwritten offering is
consummated and it results in the sale of all Registrable Securities requested
to be sold. The Westfield Shareholders are entitled to make one such "demand"
registration right during any 12-month period. In connection with any demand
request, the Westfield Shareholders must seek to register at least 100,000
shares of Registrable Securities, and in cases where the Westfield Shareholders
request the registration of 800,000 or more shares of Registrable Securities,
the Issuer has the right to reduce such request below that threshold.
The Westfield Shareholders also have unlimited "piggyback" registration
rights, exercisable until such time as the Westfield Shareholders' Registrable
Securities are freely saleable without restriction under the Securities Act,
with respect to registrations made by the Issuer, including registrations made
on behalf of other shareholders of the Issuer. The Westfield Shareholders'
demand and piggyback registration rights are subject to customary restrictions,
blackout periods and limitations.
The Issuer has agreed to pay certain registration expenses in connection
with the registration of the Registrable Securities (underwriting discounts,
commissions and certain fees and expenses will be at the Westfield Shareholders'
expense). In addition, in connection with any registration statement filed
pursuant to the Registration Rights Agreement, the Issuer and the Westfield
Shareholders have agreed to indemnify each other against certain liabilities,
including certain liabilities under the Securities Act.
Pursuant to the Registration Rights Agreement, the registration rights with
respect to the Registrable Securities may be transferred to estate planning
vehicles for the benefit of a member of a Westfield Shareholder's family.
Concurrently, with the closing of the Merger Agreement, the Westfield
Shareholders entered into an Escrow Agreement, dated October 31, 1997 (the
"Escrow Agreement") between the Westfield Shareholders, the Issuer and Brown
Brothers Harriman & Co., a New York Partnership ("the Escrow Agent"). Pursuant
to the Merger Agreement and the Escrow Agreement 10% of the Common Stock issued
pursuant to the Merger Agreement to the Westfield Shareholders was placed in
escrow to be held by Escrow Agent. The Common Stock is to be held in escrow
until no later than October 31, 1998, unless the Issuer asserts a claim of
indemnification against the Westfield Shareholders.
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CUSIP No. 101119105 Page 5 of 7 Pages
Pursuant to the employment agreement dated as of August 13, 1997 among Mr.
Bauernfeind, Westfield and the Issuer, Mr. Bauernfeind has been nominated to
serve as a director of the Issuer by the Board of Directors of the Issuer.
Mr. Bauernfeind intends to review on a continuing basis his investment in
the Issuer. Subject to the limitations described above and any regulatory
restrictions imposed on Mr. Bauernfeind, Mr. Bauernfeind may decide to increase
or decrease his investment in the Issuer depending upon the price and
availability of the Issuer's securities, subsequent developments affecting the
Issuer, the Issuer's business and prospects, other investment and business
opportunities available to Mr. Bauernfeind, general stock market and economic
conditions and tax conditions.
Other than as described above, Mr. Bauernfeind has no present plans or
proposals that relate to or would result in any of the actions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY.
(a) Mr. Bauernfeind is the direct beneficial owner of 947,037 shares of
Common Stock or approximately 8.9% of the 10,611,975 shares of the Common
Stock (the "Outstanding Common Stock"), based on information contained in
the Company's Quarterly Report on Form 10-Q for the quarter ended July 31,
1997, after giving effect to the number of shares issued in the Merger.
(b) Mr. Bauernfeind has the sole voting power and dispositive power with
respect to these shares.
(c) Except as set forth in Item 4 of this Statement Mr. Bauernfeind was not
engaged in transactions with respect to the Common Stock in the last 60
days.
(d) No other person has the right or the power to direct the receipt of
dividends or the proceeds from the sale of the securities reported herein.
(e) Not applicable.
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CUSIP No. 101119105 Page 6 of 7 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except as set forth in Item 4 of this Statement, to the best knowledge of
Mr. Bauernfeind, there are no other contracts, arrangements, understandings or
relationships (legal or otherwise) among Mr. Bauernfeind and any other person
with respect to any securities of the Issuer, including but not limited to,
transfer or voting of any of the securities of the Issuer, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies, or a pledge or
contingency the occurrence of which would give another person voting power over
the securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A: Agreement and Plan of Merger, dated as of August 13, 1997
Exhibit B: Registration Rights Agreement, dated as of August 13, 1997
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CUSIP No. 101119105 Page 7 of 7 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
By: /s/ Arthur J. Bauernfeind
-------------------------
Arthur J. Bauernfeind
Dated: November 10, 1997
<PAGE>
EXHIBIT A
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AGREEMENT AND PLAN OF MERGER
by and among
BOSTON PRIVATE BANCORP, INC.,
BOSTON PRIVATE INVESTMENT MANAGEMENT, INC.,
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
and
The Individual Stockholders Party Hereto
Dated as of : Agust 13, 1997
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS................................................................ 2
Section 1.1. Definitions............................................. 2
ARTICLE II
THE MERGER AND RELATED MATTERS............................................. 10
Section 2.1. General................................................ 10
Section 2.2. Conversion of Shares................................... 10
Section 2.3. Surviving Corporation.................................. 10
Section 2.4. Effect of the Merger................................... 10
Section 2.5. Organizational Documents............................... 11
Section 2.6. Directors and Officers................................. 11
Section 2.7. Effective Time......................................... 11
ARTICLE III
THE CLOSING................................................................ 11
Section 3.1. Closing................................................ 11
Section 3.2. Instruments of Transfer................................ 12
ARTICLE IV
CERTAIN REPRESENTATIONS AND WARRANTIES OF C. MICHAEL
HAZARD, MICHAEL J. CHAPMAN AND ARTHUR J. BAUERNFEIND....................... 13
Section 4.1. Authority; No Violation; Consents...................... 13
Section 4.2. Stockholders' Title.................................... 14
Section 4.3. Stockholders' Litigation............................... 14
Section 4.4. Stockholders' Preemptive or Other Rights............... 14
Section 4.5. Stockholders' Share Ownership.......................... 14
ARTICLE V
CERTAIN INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF JILL A. ROETING,
DAVID BOYCE, WILLIAM A. MUGGIA, BRUCE R. WATTS, JR., STEPHEN C. DEMIRJIAN
AND KAREN B. AGNEW......................................................... 15
Section 5.1. Authority; No Violation; Consents...................... 15
Section 5.2. Stockholders' Title.................................... 16
Section 5.3. Stockholders' Litigation............................... 16
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Section 5.4. Stockholders' Preemptive or Other Rights .............. 16
Section 5.5. Stockholders' Share Ownership.......................... 17
ARTICLE VI
JOINT REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS... 17
Section 6.1. Organization and Related Matters....................... 17
Section 6.2. No Violation........................................... 17
Section 6.3. Financial Statements................................... 18
Section 6.4. Regulatory Documents................................... 18
Section 6.5. Books and Records...................................... 19
Section 6.6. Ineligible Persons..................................... 19
Section 6.7. Compliance with Applicable Law......................... 19
Section 6.8. Administration of Fiduciary Accounts................... 20
Section 6.9. Company Assets......................................... 20
Section 6.10. Company Contracts...................................... 22
Section 6.11. Technology and Intellectual Property................... 22
Section 6.12. Legal Proceedings...................................... 23
Section 6.13. Environmental Compliance............................... 23
Section 6.14. Taxes and Tax Returns.................................. 24
Section 6.15. Insurance.............................................. 25
Section 6.16. Labor and Employment Matters........................... 26
Section 6.17. Benefit Plan Obligations............................... 26
Section 6.18. No Other Broker........................................ 29
Section 6.19. Undisclosed Liabilities................................ 29
Section 6.20. Capitalization......................................... 29
Section 6.21. Absence of Changes..................................... 30
Section 6.22. Disclosure............................................. 30
Section 6.23. Stockholders' Investment Intent........................ 30
Section 6.24. Securities Legend; Stop Transfer Instructions.......... 30
Section 6.25. Pooling Representation Letters......................... 31
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BPB AND BPIM............................. 31
Section 7.1. Organization........................................... 31
Section 7.2. Authority; No Violation................................ 31
Section 7.3. Consents and Approvals ................................ 33
Section 7.4. No Actions; Suits or Proceedings ...................... 33
Section 7.5. Financial Ability...................................... 33
Section 7.6. No Other Broker........................................ 33
Section 7.7. BPB Shares............................................. 33
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Section 7.8. BPB Reports............................................ 33
Section 7.9. Pooling Matters........................................ 34
Section 7.10. Ownership of BPIM; No Prior Activities................. 34
ARTICLE VIII
COVENANTS.................................................................. 35
Section 8.1. Conduct of Business.................................... 35
Section 8.2. Advisory Contract Consents and Approvals and Other
Actions.............................................. 36
Section 8.3. Confidentiality and Announcements...................... 37
Section 8.4. Expenses............................................... 37
Section 8.5. Release of the Company and its Affiliates.............. 38
Section 8.6. Covenants of BPB....................................... 38
Section 8.7. Access; Certain Communications......................... 38
Section 8.8. Regulatory Matters; Third Party Consents............... 39
Section 8.9. Further Assurances..................................... 39
Section 8.10. Insurance.............................................. 40
Section 8.11. Notification of Certain Matters........................ 40
Section 8.12. Maintenance of Records................................. 40
Section 8.13. Compliance with Section 15(f) of the 1940 Act by the
BPB.................................................. 40
Section 8.14. Company Distribution................................... 41
Section 8.15. Non-Competition........................................ 41
Section 8.16. No Solicitation or Acceptance of Other Offers.......... 41
Section 8.17. Pooling Accounting Treatment .......................... 41
Section 8.18. Listing of BPB Shares.................................. 41
Section 8.19. Escrow Agreement....................................... 42
Section 8.20. Certain Agreements..................................... 42
Section 8.21. Affiliate Letters...................................... 42
ARTICLE IX
CONDITIONS TO CLOSING...................................................... 42
Section 9.1. Conditions to the BPB's and BPIM's Obligations......... 42
Section 9.2. Conditions to the Company's and the Stockholders'
Obligations.......................................... 44
Section 9.3. Mutual Conditions...................................... 45
ARTICLE X
INDEMNIFICATION............................................................ 46
Section 10.1. Obligations of the Stockholders........................ 46
Section 10.2. Obligations of BPB..................................... 47
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Section 10.3. Procedure.............................................. 47
Section 10.4. Notice of Non-Third Party Claims....................... 49
Section 10.5. Survival of Indemnity.................................. 49
Section 10.6. Minimum Indemnification Obligation..................... 49
Section 10.7. Claim Settlement Procedures............................ 50
Section 10.8. Subrogation............................................ 52
Section 10.9. Satisfaction of Indemnification Obligations............ 52
Section 10.10. Exclusive Remedy....................................... 52
ARTICLE XI
TAX MATTERS................................................................ 53
Section 11.1. Tax Cooperation........................................ 53
Section 11.2. Filing Responsibility.................................. 53
Section 11.3. Refunds or Credits..................................... 54
ARTICLE XII
TERMINATION/SURVIVAL....................................................... 54
Section 12.1. Termination............................................ 54
Section 12.2. Effect of Termination.................................. 55
Section 12.3. Survival of Representations and Warranties............. 55
ARTICLE XIII
MISCELLANEOUS.............................................................. 55
Section 13.1. Expenses............................................... 55
Section 13.2. Amendments; Extension; Waiver.......................... 56
Section 13.3. Entire Agreement....................................... 56
Section 13.4. Specific Performance; Injunctive Relief................ 57
Section 13.5. Interpretation......................................... 57
Section 13.6. Severability........................................... 57
Section 13.7. Notices................................................ 57
Section 13.8. Binding Effect; Persons Benefiting; No Assignment...... 58
Section 13.9. Counterparts........................................... 58
Section 13.10. Governing Law.......................................... 59
Section 13.11. Service; Jurisdiction.................................. 59
Section 13.12. Stockholders' Representatives.......................... 59
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Exhibit A Stockholders' Representatives Power of Attorney
Exhibit B Registration Rights Agreement
Exhibit C Opinion of Ropes & Gray
Exhibit D Opinion of BPB's Counsel
Exhibit E Investment Advisory Notice
Exhibit F Form of Affiliate Letter
Exhibit G Press Release
Exhibit H Escrow Agreement
Exhibit I Opinion of KPMG Peat Marwick, LLP
Exhibit J Opinion of Baril & Smith
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<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 13, 1997 (this
"Agreement"), by and among Boston Private Bancorp, Inc., a Massachusetts
Corporation ("BPB"), Boston Private Investment Management, Inc., a Massachusetts
corporation and wholly owned subsidiary of BPB (the "BPIM"), Westfield Capital
Management Company, Inc., a Massachusetts corporation (the "Company"), and C.
Michael Hazard, Michael J. Chapman, Arthur J. Bauernfeind, Jill A. Roeting,
David Boyce, William A. Muggia, Bruce R. Watts, Jr., Stephen C. Demirjian and
Karen B. Agnew and any other individual who acquires securities issued by the
Company prior to the Closing and becomes a party hereto (collectively, the
"Stockholders" and each a "Stockholder").
RECITALS:
WHEREAS, the Stockholders own all of the issued and outstanding shares
of Class A common stock, $.01 par value per share (the "Class A Common Stock");
Class B common stock, $.01 par value per share (the "Class B Common Stock," and
all of the issued and outstanding shares of Class A Common Stock and of Class B
Common Stock being collectively referred to herein as the "Shares"), of the
Company;
WHEREAS, the Company serves as investment adviser to pension funds and
other institutional accounts, as investment counselor to individual clients, as
general partner and investment manager to private funds and as investment sub-
advisor for open-end investment funds;
WHEREAS, BPB wishes to acquire the Company upon the terms and subject
to the conditions set forth in this Agreement;
WHEREAS, the respective boards of directors of BPB, BPIM and the
Company, and BPB as the sole stockholder of BPIM, and the Stockholders as the
holders of the Shares, have each approved the merger of BPIM with and into the
Company (the "Merger") upon the terms and subject to the conditions set forth in
this Agreement and in accordance with the Massachusetts Business Corporation Law
(the "MBCL");
WHEREAS, BPIM and the Company intend that the Merger will be treated
as a tax free reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended, that this Agreement shall constitute
a plan of reorganization for the purposes of Section 368 of the Code and that
the Merger will be treated as a pooling of interests in accordance with
Accounting Principles Board Opinion No. 16;
WHEREAS, following the Merger, BPB desires to contribute all of the
outstanding capital stock of the Surviving Corporation (as hereinafter defined)
to a newly organized wholly owned subsidiary of BPB to be named Boston Private
Investment Management, Inc.;
<PAGE>
WHEREAS, in furtherance of the consummation of the transactions
contemplated herein, the parties hereto desire to enter into this Agreement;
NOW, THEREFORE, in consideration of and premised upon the various
representations, warranties, covenants and other agreements and undertakings of
BPB, BPIM, the Company and the Stockholders contained in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For all purposes in this Agreement, the
-----------
following terms shall have the respective meanings set forth in this Section 1.1
(such definitions to be equally applicable to both the singular and plural forms
of the terms herein defined):
"Adjusted Advisory Revenue" means the annualized base revenues
(exclusive of performance fees) of the Company as of the third Business Day
prior to the Closing Date from all investment advisory agreements in effect and
to which it is a party as of the Closing. For this purpose, the following
investment advisory agreements are treated as being in effect at such time: (1)
each investment advisory agreement as to which written consent to the
transactions hereunder or a new investment advisory agreement effective at the
Closing has been received and is in effect at the Closing in accordance with
Section 8.2 hereof and (2) each investment advisory agreement included on
Schedule 8.2(c) as to which notice of the transaction contemplated hereby has
been sent in accordance with Section 8.2(c) hereof and no written or oral notice
of termination or intention to terminate has been received prior to the Closing.
Adjusted Advisory Revenue shall be calculated based upon the fee rates to be in
effect immediately after the Closing under each applicable investment advisory
agreement and the Deemed Market Value of the assets subject to each such
agreement. For purposes of calculating the Deemed Market Value of the assets
subject to any such agreement, an investment advisory agreement with any client
treated as being in effect as of the Closing Date that replaces (or otherwise
relates to the same assets as) an investment advisory agreement in effect on
July 31, 1997 with such client or such client's predecessor shall be considered
the same agreement as the agreement in effect on such date.
"Advisers Act" means the Investment Advisers Act of 1940, as amended,
and all rules and regulations of the SEC thereunder.
"Advisory Revenue Adjustment" means that number of BPB Shares
determined by multiplying (1) the number of Base Shares by (2) 1 minus a ratio,
the numerator of which shall be Adjusted Advisory Revenue and the denominator of
which shall be the Advisory Revenue Threshold, and rounding the product to the
nearest whole BPB Share; provided, however, that the Advisory Revenue Adjustment
shall equal 0 in the event that Adjusted Advisory Revenue is equal
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<PAGE>
to or greater than 90% of the Advisory Revenue Threshold. The Advisory Revenue
Adjustment and the related Adjusted Advisory Revenue determinations as of the
Closing shall be made on or prior to the Closing Date by the Stockholders in
good faith and in such detail as BPB may reasonably request.
"Advisory Revenue Threshold" means the annualized base revenues
(exclusive of performance fees) of the Company as of July 31, 1997 from all
investment advisory agreements in effect as of such date, calculated based upon
the fee rates in effect on such date under each applicable investment advisory
agreement and the market value as of such date of the assets then subject to
such agreement.
"Affiliate" means any corporation, partnership, entity or other person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person specified.
"Applicable Law" means any domestic or foreign federal, state or local
statute, law, ordinance, rule, administrative interpretation, regulation, order,
writ, injunction, directive, judgment, decree, policy, guideline or other
requirement applicable to the Company, any Stockholder or BPB, as the case may
be, or any of their respective Affiliates, properties, assets, officers,
directors, employees or agents.
"BPB Shares" means the shares of common stock, $1.00 par value per
share, of BPB.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banks in the Commonwealth of Massachusetts are generally closed for
regular banking business.
"Buyer Agreements" means this Agreement, the Registration Rights
Agreement and the agreements referred to in Section 9.1(f).
"Closing" means the completion of the transactions contemplated by
Section 3.1 of this Agreement.
"Closing Date" means the date of the Closing.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Assets" means all assets of the Company as of the date hereof
and as of the Closing Date including, but not limited to, Company Contracts,
Furniture, Fixtures and Equipment, Intellectual Property, Leases, Real Property,
Records, Software and any other material assets of the Company, each of which
other material assets as of the date hereof is set forth on Schedule 1.1(a)
hereto.
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<PAGE>
"Company Contracts" means any written investment advisory or marketing
consulting agreement and any lease, license or other agreement relating to the
use by the Company of Furniture, Fixtures and Equipment, Intellectual Property,
Software and Technology Systems in the ordinary course of its business, and all
rights and interests of the Company arising thereunder or in connection
therewith.
"Current Assets" means, as of any date, the sum of the following
assets: (1) for each investment advisory agreement of the Company, an amount
equal to the product obtained by multiplying (A) the value of the assets managed
pursuant to such agreement at the close of business on the day prior to such
date times (B) a fraction, the numerator of which is the number of days elapsed
prior to such date during the current billing period for such agreement and the
denominator of which is the total number of days in such billing period times
(C) the base advisory fee rate for such period, (2) the Company's cash, cash
items and accounts receivable, (3) the Company's prepaid current expenses and
(4) any other assets of the Company properly characterized as "current" in
accordance with GAAP.
"Current Liabilities" means, as of any date, the sum of the following
liabilities: (1) accrued but unpaid expenses of the Company properly
characterized as current in accordance with GAAP, including salary, bonus and
all other incentive and marketing compensation (including incentive compensation
from marketing servicing contracts), rent, taxes and accounts payable, (2) all
unpaid fees and expenses incurred by the Company in connection with this
Agreement and the transactions contemplated hereby (including the financial
advisory, legal, accounting, proxy, filing and insurance fees and expenses,
except to the extent any such expenses are to be borne by BPB as provided in
Section 13.1 hereof) and (3) the unpaid principal amount of and any accrued but
unpaid interest on any indebtedness for any and all money borrowed (without
regard to the term until maturity) of the Company and the amount of any dividend
or distribution declared by the Company but not yet paid; provided, further,
-------- -------
that clause (3) above shall not include capitalized lease obligations (it being
understood that only unpaid lease obligations thereunder for the current year
shall be included in clause (1) above).
The "Deemed Market Value" of the assets subject to any applicable
investment advisory agreement (whether such agreement was entered into on, prior
to or after July 31, 1997) shall equal (1) the market value as of July 31, 1997
of the assets then subject to such agreement, plus (2) the market value of any
----
assets contributed by a client after July 31, 1997 to the assets subject to such
agreement, with such assets being valued at the time they were so contributed
and with cash assets having their face value, minus (3) the market value of any
-----
assets subject to such agreement at or at any time after July 31, 1997 but
withdrawn from being subject to such agreement at or prior to the Closing Date,
with such assets being valued at the time they were so withdrawn and with cash
assets having their face value.
"Encumbrance" means any lien, pledge, security interest, claim,
charge, easement, limitation, commitment, encroachment, restriction or
encumbrance of any kind or nature whatsoever.
-4-
<PAGE>
"Environmental Law" means all applicable federal, state and local
laws, rules, regulations, common law, ordinances, decrees, orders, contracts and
other binding obligations relating to pollution (including the treatment,
storage and disposal of wastes and the cleanup of releases and threatened
releases of materials), the preservation of the environment or the exposure to
materials in the environment or workplace.
"Equity Securities" means capital stock or other equity interests of
any Person or any securities convertible into or exchangeable for capital stock
or other equity interests or any other rights, warrants or options to acquire
any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agreement" means an agreement in substantially the form of
Exhibit H hereto entered into prior to closing by and among BPB, the
Stockholders and the Escrow Agent.
"Escrow Material" means the Escrow Shares held by the Escrow Agent
under the Escrow Agreement and all securities and other property received and
held in escrow by the Escrow Agent under the Escrow Agreement in accordance with
the terms thereof.
"Escrow Shares" means the number of BPB Shares obtained by subtracting
the number of BPB Shares to be delivered pursuant to Section 3.2(c)(1) from the
number of Purchase Shares.
"Furniture, Fixtures and Equipment" means all furniture, fixtures and
equipment that are located in the ordinary course at any Operating Site and used
by the Company.
"GAAP" means generally accepted accounting principles as used in the
United States of America as in effect at the time any applicable financial
statements were prepared or any act requiring the application of GAAP was
performed, applied on a consistent basis.
"Governmental Authority" means any nation or government, any state,
territory or other political subdivision, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including the SEC or any other government authority, agency,
department, board, commission or instrumentality of the United States, any
foreign government, any state or territory of the United States or any political
subdivision thereof, and any court, tribunal or arbitrator(s) of competent
jurisdiction, and any governmental or non-governmental self-regulatory
organization, agency or authority (including the National Association of
Securities Dealers, Inc., the Commodities and Futures Trading Commission, the
National Futures Association, the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, the Office of the Comptroller
of the Currency, the Office of Trust Supervision, the Massachusetts Commissioner
of Banks and the Massachusetts Board of Bank Incorporators.
-5-
<PAGE>
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnifiable Claim" means any Loss for which a party is entitled to
indemnification under this Agreement.
"Indemnified Party" means the party entitled to the benefits of
indemnification hereunder.
"Indemnifying Party" means the party obligated to provide
indemnification hereunder.
"Independent Accounting Firm" means any accounting firm of recognized
national standing, except for any such firm that serves as the independent
public accountants of the Company, BPB or any of their respective Affiliates;
provided, however, that if there exists no accounting firm that meets the
- -------- -------
qualifications set forth above in this definition, then the term "Independent
Accounting Firm" shall mean any accounting firm designated as such by BPB and
the Stockholders' Representatives.
"Intellectual Property" means all domestic and foreign letters patent,
patents, software, know-how, trade names, common law and other trademarks,
service marks, copyright registrations and applications and state or federal
common law usages, and all registrations or applications for registration of any
of the foregoing.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, and all rules and regulations of the SEC thereunder.
"Investment Companies" means each investment portfolio of every Person
required to be registered as an investment company under the Investment Company
Act with respect to which the Company is as of the date hereof or any date prior
to the Closing Date a party to an investment advisory agreement (including any
investment subadvisory agreements).
"IRS" means the Internal Revenue Service.
"Lease" means any of the real estate leases or subleases, or a
sublease of the Company with respect to any Operating Site.
"Leased Properties" means all leasehold interests in real property
leased by the Company in which an Operating Site is located.
"Leasehold Improvements" means all improvements to the Leased
Properties installed or constructed by or on behalf of the Company and used in
connection with the operation or maintenance of any Operating Site.
-6-
<PAGE>
"Loss" means any and all claims, losses, liabilities, costs,
penalties, fines and expenses (including reasonable attorney's, accountant's,
consultant's and expert's fees and expenses), damages, obligations to third
parties, expenditures, proceedings, judgments, awards or demands that are
imposed upon or otherwise incurred or suffered by the relevant party.
"Operating Sites" means all offices at which the Company conducts
business.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Permitted Encumbrances" means all Encumbrances which are:
(1) Encumbrances set forth on Schedule 1.1(b);
(2) Taxes or assessments that are not yet due and payable;
(3) matters which would be shown on an accurate survey and any other
defect or exception which would be disclosed by a search of title, which in
each case does not materially impair the use, operation, value or
marketability of the Company Asset to which it relates;
(4) liens of landlords and liens of carriers, warehousemen, mechanics
and materialmen and other like liens arising in the Ordinary Course of
Business for sums not yet due and payable; or
(5) other liens or imperfections on property which individually or in
the aggregate do not exceed $10,000 and do not materially detract from the
value of or materially impair the existing use of the property affected by
such liens or imperfections.
"Person" means any individual, corporation, company, partnership
(limited or general), joint venture, association, trust or other entity.
"Pooled Products" means all vehicles for collective investment (in
whatever form of organization, including in the form of a corporation, company,
partnership (limited or general), association or trust and including each
separate portfolio of any of the foregoing) with respect to which the Company is
the sponsor and serves as investment advisor, manager or equivalent role.
"Real Property" means all real property, appurtenances thereto,
fixtures and improvements, rights in connection therewith, or any interest
therein, including, without limitation, leasehold estates, of the Company.
"Records" means all records and original documents in the Company's
possession which pertain to or are utilized by the Company to administer,
reflect, monitor, evidence or record information respecting the business or
conduct of the Company including: (1) all such records maintained on electronic
or magnetic media, or in the electronic data base system of the Company and (2)
all such records and original documents respecting Company Contracts or
necessary or appropriate to comply with any Applicable Law, including any and
all records kept
-7-
<PAGE>
in accordance with the Advisers Act or the Investment Company Act or documents
filed pursuant to any Securities Laws.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Documents" shall mean all reports and registration statements
filed, or required to be filed, by law, by contract or otherwise, by an entity
pursuant to the Securities Laws.
"Securities Laws" shall mean the Securities Act of 1933, as amended;
the Securities Exchange Act of 1934, as amended; the Investment Company Act; the
Advisers Act; the Trust Indenture Act of 1939, as amended; the published rules
and regulations of the SEC promulgated thereunder; and the securities or "blue
sky" laws of any state or territory of the United States.
"Software" means all computer programs, software, firmware and related
documentation used in the operation of the Technology Systems.
"Stockholders' Representatives" means C. Michael Hazard, Michael J.
Chapman and Arthur J. Bauernfeind, who have been granted a power of attorney by
each Stockholder pursuant to the Stockholders' Representatives Power of
Attorney, or the individuals serving from time to time in the capacity of the
Stockholders' Representatives under the Stockholders' Representatives' Power of
Attorney.
"Stockholders' Representatives Power of Attorney" means the agreement
and power of attorney in the form of Exhibit A.
"Subsidiary" means, when used with respect to any Person which is not
a natural person, any corporation, association or other business entity a
majority (by the number of votes) of the voting securities of which is at the
time owned by such Person or by one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries of such Person.
"Tax Authority" includes the IRS and any state, local, foreign or
other governmental authority responsible for the administration of any Taxes.
"Taxes" mean all federal, provincial, territorial, state, municipal,
local, foreign or other taxes, imposts, rates, levies, assessments and other
charges including, without limitation, all income, franchise, gains, capital,
real property, goods and services, transfer, value added, gross receipts,
windfall profits, severance, ad valorem, personal property, production, sales,
use, license, stamp, documentary stamp, mortgage recording, excise, employment,
payroll, social security, unemployment, disability, estimated or withholding
taxes, and all customs and import duties, together with any interest, additions,
fines or penalties with respect thereto or in respect of any failure to comply
with any requirement regarding Tax Returns and any interest in respect of such
additions, fines or penalties.
-8-
<PAGE>
"Tax Return" means any return, report, information statement, schedule
or other document (including any related or supporting information) with respect
to Taxes.
"Treasury Regulations" means the regulations promulgated under the
Code.
"Unsponsored Pooled Products" means all vehicles for collective
investment (in whatever form of organization, including in the form of a
corporation, company, partnership (limited or general), association or trust and
including separate portfolios of any of the foregoing) with respect to which the
Company serves as investment adviser, manager or equivalent role and does not
serve as sponsor.
(i) The following terms shall have the meaning specified in the
indicated section of this Agreement:
<TABLE>
<CAPTION>
Term Section
- ------------------------------- -----------------
<S> <C>
Affiliate Letter............... Section 6.26
Arbitrator..................... Section 10.7(c)
Articles of Merger............. Section 2.7
Agreement...................... Preamble
Balance Sheet.................. Section 6.3
Base Shares.................... Section 2.1
Baril & Smith.................. Section 9.1(k)
BPB............................ Preamble
BPIM........................... Preamble
Buyer Material Adverse Effect.. Section 7.1
Class A Common Stock........... Recitals
Class B Common Stock........... Recitals
Company........................ Preamble
Claim.......................... Section 10.7(a)
Disputed Claim................. Section 10.7(b)
Effective Time................. Section 2.7
ERISA Affiliate................ Section 6.17(a)
ERISA Plan..................... Section 6.17(a)
Escrow Agent................... Section 3.2(c)(3)
Escrow Termination Date........ Section 10.7(e)
Financial Statements........... Section 6.3
Material Adverse Effect........ Section 6.1
MBCL........................... Recitals
Merger......................... Recitals
Non-Third Party Claim.......... Section 10.4
Notice......................... Section 10.7(a)
Notice of Contention........... Section 10.7(b)
PBGC........................... Section 6.17(b)
Permits........................ Section 6.7(a)
Plans.......................... Section 6.17(a)
Proceeding..................... Section 10.7(c)
Purchase Shares................ Section 2.1
Registration Rights Agreement.. Section 9.2(d)
Resolved Claim................. Section 10.7(d)
SEC Reports.................... Section 7.8(a)
Shares......................... Recitals
Straddle Period................ Section 11.2(c)
Stockholders................... Preamble
Stockholders' Obligation....... Section 13.12
Surviving Corporation.......... Section 2.3
Technology Systems............. Section 6.11(a)
Third Party Claim.............. Section 9.3.(a)
</TABLE>
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<PAGE>
ARTICLE II
THE MERGER AND RELATED MATTERS
Section 2.1. General. This Agreement provides for the Merger of BPIM
-------
with and into the Company. In the Merger, the then outstanding Shares will be
converted at the Effective Time (as hereinafter defined) into the right to
receive, at the Closing (as hereinafter defined) and subject to the terms and
conditions of this Agreement and the Escrow Agreement (as hereinafter defined),
an aggregate of 3,918,367 BPB Shares (the "Base Shares") minus the Advisory
Revenue Adjustment, if applicable (such excess being called the "Purchase
Shares"). Notwithstanding anything to the contrary contained in this Agreement,
in no event shall BPB be obligated to deliver any BPB Shares in the Merger in
excess of the Purchase Shares.
Section 2.2. Conversion of Shares. At the Effective Time, (a) each Share
--------------------
issued and outstanding immediately prior to the Effective Time (other than
Shares which are held by the Company or by BPB or any of their respective
subsidiaries, including without limitation BPIM, all of which shares will at the
Effective Time be canceled and retired and shall cease to exist, and no stock of
BPB or other consideration shall be delivered in exchange therefor) shall, by
virtue of this Agreement and without any action on the part of the holder
thereof, be converted into the right to receive a number of BPB Shares equal to
the quotient of the Purchase Shares (calculated in accordance with Section 2.1
hereof) divided by 1655, subject to adjustment pursuant to the terms of this
Agreement and the Escrow Agreement; and (b) each share of common stock, par
value $.01 per share, of BPIM issued and outstanding immediately prior to the
Effective Time shall be converted into one share of common stock, $.01 par
value, of the Surviving Corporation.
Section 2.3. Surviving Corporation. In accordance with the provisions of
---------------------
this Agreement and the MBCL, at the Effective Time, BPIM shall be merged with
and into the Company, and the Company shall be the surviving corporation (the
"Surviving Corporation") and shall continue its corporate existence under the
laws of the Commonwealth of Massachusetts. The name of the Surviving
Corporation shall continue to be Westfield Capital Management Company, Inc. The
Surviving Corporation's authorized capital stock shall consist of 200,000 shares
of common stock, $.01 par value. The purpose of the Surviving Corporation shall
be to hold stock of its investment management affiliates and to engage in and
carry on any other business or other activity permitted to a corporation
organized under Chapter 156B of the Massachusetts General Laws, whether or not
related to the holding of stock of its investment management affiliates. The
separate corporate existence of BPIM shall terminate at the Effective Time.
Section 2.4. Effect of the Merger. At the Effective Time, the Merger
--------------------
shall have the effects on the estate, property, rights, privileges, powers and
franchises of the
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<PAGE>
Company and BPIM and all of their property, real, personal and mixed, and all
the debts due on whatever account to either of them, as well as all stock
subscriptions and other choices in action belonging to either of them, as set
forth in the MBCL.
Section 2.5. Organizational Documents. The Articles of Organization of
------------------------
the Company, as in effect at the Effective Time and as amended in accordance
with Section 2.7 hereof, shall be the Articles of Organization of the Surviving
Corporation until thereafter amended as provided by law. The By-Laws of BPIM,
as in effect immediately prior to the Effective Time, shall be the By-Laws of
the Surviving Corporation, until amended as provided by law and the express
terms of such By-Laws. At the Closing, the Stockholders or the Company shall
deliver or cause to be delivered to BPB the stock book, stock ledger, minute
book and corporate seal, if any, of the Company.
Section 2.6. Directors and Officers. The directors and officers of the
----------------------
Surviving Corporation shall consist of the directors and officers of the Company
immediately prior to the Effective Time, together with Timothy L. Vaill as
Chairman of the Board of Directors, each to hold office in accordance with the
MBCL, the Articles of Organization of the Surviving Corporation and the By-Laws
of the Surviving Corporation.
Section 2.7. Effective Time. On the Closing Date, the Merger shall be
--------------
effected by the filing with the Secretary of State of the Commonwealth of
Massachusetts of Articles of Merger (the "Articles of Merger") meeting the
requirements of the MBCL and providing for the amendment of the Articles of
Organization of the Company (and the Surviving Corporation) to reflect terms and
provisions substantially identical in substance to those of the Articles of
Organization of BPIM, as in effect immediately prior to the Effective Time with
such changes as BPB in its sole discretion shall deem proper. The term
"Effective Time" shall be the date and time when the Merger becomes effective in
accordance with the preceding sentence.
ARTICLE III
THE CLOSING
Section 3.1. Closing. Subject to the terms and conditions of this
-------
Agreement, the closing of the transactions contemplated by this Agreement (the
"Closing") shall be at 10:00 a.m. (Boston time) at the offices of Skadden, Arps,
Slate, Meagher & Flom LLP, One Beacon Street, Boston, Massachusetts 02108, or at
such other location designated by BPB, on the date (the "Closing Date") that is
the latest of (i) October 15, 1997 or (ii) the earliest practicable date on
which the conditions set forth in Article IX hereof (other than those conditions
designating instruments, opinions, certificates or other documents to be
delivered at the Closing) have been satisfied or waived.
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<PAGE>
Section 3.2. Instruments of Transfer.
-----------------------
(a) At 8:00 a.m. (Boston time) on the Closing Date the Stockholders'
Representatives shall deliver to BPB in writing a statement of the Advisory
Revenue Threshold and Adjusted Advisory Revenue, which calculations shall be
accompanied by a schedule setting forth in reasonable detail the calculation
thereof.
(b) At the Closing, the Stockholders' Representatives shall deliver,
or shall cause to be delivered, to BPB the following:
(1) certificates representing all of the Shares free and
clear of any Encumbrance, except transfer restrictions under
Securities Laws; and
(2) the documents required to be delivered pursuant to
Section 9.1 hereof.
(c) At the Closing, BPB shall deliver, or shall cause to be
delivered, the following:
(i) to each Stockholder in accordance with instructions
provided to BPB by the Stockholders' Representatives, certificates
representing the number of BPB Shares obtained by multiplying (A) the
Purchase Shares by (B) .90, rounding the product up to the nearest whole
number of BPB Shares and multiplying such product by (C) a fraction, the
numerator of which is the number of Shares then owned by such Stockholder
and the denominator of which is the total number of Shares and rounding to
the nearest whole BPB Share, such certificates bearing or accompanied by
all requisite stock transfer stamps and free and clear of any Encumbrance,
except transfer restrictions under Securities Laws;
(ii) to the Stockholders' Representatives, the documents
required to be delivered pursuant to Section 9.2 hereof; and
(iii) to Brown Brothers Harriman & Co., or such other bank or
trust company as BPB and the Sellers' Representatives may agree, as escrow
agent (the "Escrow Agent"), certificates representing the Escrow Shares, to
be placed in escrow under the terms of the Escrow Agreement, such
certificates bearing or accompanied by all stock transfer stamps and free
and clear of any Encumbrances, except transfer restrictions under
Securities Laws.
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<PAGE>
ARTICLE IV
CERTAIN REPRESENTATIONS AND WARRANTIES OF C. MICHAEL HAZARD,
MICHAEL J. CHAPMAN AND ARTHUR J. BAUERNFEIND
Each of C. Michael Hazard, Michael J. Chapman and Arthur J.
Bauernfeind jointly and severally represents and warrants to BPB as follows:
Section 4.1. Authority; No Violation; Consents.
---------------------------------
(a) Each Stockholder has full power, right and authority to enter
into and carry out its obligations under this Agreement and the Stockholders'
Representatives Power of Attorney. This Agreement and the Stockholders'
Representatives Power of Attorney have been duly executed and delivered by each
Stockholder. This Agreement and the Stockholders' Representatives Power of
Attorney are the legal, valid and binding obligations of each Stockholder,
enforceable in accordance with its terms, and are not subject to any rights of
spousal or other comparable consent or approval, except as enforcement may be
limited by general principles of equity whether applied in a court of law or a
court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally. The consummation of the transactions
contemplated hereby have been duly and validly approved by all requisite action
on the part of the Stockholders as stockholders of the Company, and no other
action on the part of the Stockholders as stockholders of the Company is
necessary to approve this Agreement and to consummate the transactions
contemplated hereby.
(b) Neither the execution, delivery and performance of this Agreement
and the Stockholders' Representatives Power of Attorney by or on behalf of each
Stockholder, nor the consummation of the transactions contemplated hereby or
thereby, will (i) violate, conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or the creation of any Encumbrance upon any
of the properties or assets of any Stockholder under any of the terms,
conditions or provisions of (x) the charter documents or Bylaws of the Company
or (y) any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which any Stockholder is a party
or by which any of them may be bound, or to which any Stockholder or any of his
or her properties or assets may be subject; or (ii) violate any judgment,
ruling, order, writ, injunction, decree, statute, rule or regulation applicable
to any Stockholder or to any of his or her properties or assets.
(c) Except for required filings under the HSR Act, those notices,
filings or authorizations described in Section 7.3 and as provided in Schedule
4.1(c), no material notice to, filing with, authorization of, exemption by, or
consent or approval of, any regulatory authority is necessary for the
consummation by any Stockholder of the transactions contemplated by this
Agreement.
-13-
<PAGE>
(d) The Stockholders' Representatives are the duly appointed
attorneys-in-fact of each Stockholder and have full power and authority to act
for and bind each Stockholder in all respects in connection with this Agreement
including, without limitation, with respect to rights and obligations of the
Stockholders under Articles III, VIII, X, XI, XII and XIII hereof. No
Stockholder has or shall have any right, nor shall any Stockholder seek, to act
individually with respect to BPB or BPIM in connection with the matters relating
to this Agreement; all such action to be coordinated for the Stockholders
exclusively through the Stockholders' Representatives. The Stockholders'
Representatives are in receipt of all share certificates and other documentation
necessary to carry out their obligations pursuant to Section 3.2 hereof and are
duly authorized by each Stockholder to carry out such obligations and to effect
the Merger in accordance with the terms of this Agreement.
Section 4.2. Stockholders' Title. Each Stockholder has good and
-------------------
marketable title to his or her Shares free and clear of any restrictions on
transfer or voting, Encumbrances or preemptive rights, except as set forth on
Schedule 4.2. The Shares are fully paid and non-assessable. Each Stockholder
has the full power, right and capacity to enter into this Agreement and to carry
out the transactions contemplated hereby, and upon consummation of the
transactions contemplated by this Agreement, BPB will have acquired good and
marketable title to the Shares free and clear of any restrictions on transfer or
voting or Encumbrances except such as may be created by BPB.
Section 4.3. Stockholders' Litigation. There is no action, suit or
------------------------
proceeding pending against, or to the knowledge of any Stockholder threatened
against or affecting, any Stockholder or any of his or her respective properties
before any court or arbitrator or any governmental body, agency or official
which in any manner challenges or seeks to prevent, enjoin, alter or materially
delay any of the transactions contemplated hereby or by the Stockholders'
Representatives Power of Attorney.
Section 4.4. Stockholders' Preemptive or Other Rights. Except as set
----------------------------------------
forth on Schedule 4.4, no Stockholder has preemptive or other similar rights to
acquire any shares of capital stock of any class of the Company or any
securities convertible into or exchangeable for any such shares. Except for
this Agreement, no subscriptions, options, warrants, conversion or other rights,
agreements, commitments, arrangements or understandings of any kind obligating
any Stockholder, contingently or otherwise, to issue or sell, or cause to be
issued or sold, any shares of capital stock of any class of the Company or any
securities convertible into or exchangeable for any such shares, are
outstanding, and no authorization therefor has been given.
Section 4.5. Stockholders' Share Ownership. Except as set forth on
-----------------------------
Schedule 4.5, no Stockholder owns any Shares.
-14-
<PAGE>
ARTICLE V
CERTAIN INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF JILL A. ROETING,
DAVID BOYCE, WILLIAM A. MUGGIA, BRUCE R. WATTS, JR.,
STEPHEN C. DEMIRJIAN AND KAREN B. AGNEW
Each of Jill A. Roeting, David Boyce, William A. Muggia, Bruce R.
Watts, Jr., Stephen C. Demirjian and Karen B. Agnew individually represents and
warrants with respect to only himself or herself to each of BPB and BPIM as
follows:
Section 5.1. Authority; No Violation; Consents.
---------------------------------
(a) The Stockholder has full power, right and authority to enter into
and carry out its obligations under this Agreement and the Stockholders'
Representatives Power of Attorney. This Agreement and the Stockholders'
Representatives Power of Attorney have been duly executed and delivered by the
Stockholder. This Agreement and the Stockholders' Representatives Power of
Attorney are the legal, valid and binding obligations of the Stockholder,
enforceable in accordance with its terms, and are not subject to any rights of
spousal or other comparable consent or approval, except as enforcement may be
limited by general principles of equity whether applied in a court of law or a
court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally. The consummation of the transactions
contemplated hereby have been duly and validly approved by all requisite action
on the part of the Stockholder as a stockholder of the Company, and no other
action on the part of the Stockholder as a stockholder of the Company are
necessary to approve this Agreement and to consummate the transactions
contemplated hereby.
(b) Neither the execution, delivery and performance of this Agreement
and the Stockholders' Representatives Power of Attorney by or on behalf of the
Stockholder, nor the consummation of the transactions contemplated hereby or
thereby, will (i) violate, conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or the creation of any Encumbrance upon any
of the properties or assets of the Stockholder under any of the terms,
conditions or provisions of (x) the charter documents or Bylaws of the Company
or (y) any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which the Stockholder is a party
or by which any of them may be bound, or to which the Stockholder or any of his
or her properties or assets may be subject; or (ii) violate any judgment,
ruling, order, writ, injunction, decree, statute, rule or regulation applicable
to the Stockholder or to any of his or her properties or assets.
(c) Except for required filings under the HSR Act, those notices,
filings or authorizations described in Section 7.3 and as provided in Schedule
5.1(c), no material
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<PAGE>
notice to, filing with, authorization of, exemption by, or consent or approval
of, any regulatory authority is necessary for the consummation by the
Stockholder of the transactions contemplated by this Agreement.
(d) The Stockholders' Representatives are the duly appointed
attorneys-in-fact of the Stockholder and have full power and authority to act
for and bind the Stockholder in all respects in connection with this Agreement
including, without limitation, with respect to rights and obligations of the
Stockholder under Articles III, VIII, X, XI, XII and XIII hereof. The
Stockholder does not and shall not have any right, nor shall the Stockholder
seek, to act individually with respect to BPB or BPIM in connection with the
matters relating to this Agreement; all such action to be coordinated for the
Stockholder exclusively through the Stockholders' Representatives. The
Stockholders' Representatives are in receipt of all share certificates and other
documentation necessary to carry out their obligations pursuant to Section 3.2
hereof and are duly authorized by the Stockholder to carry out such obligations
and to effect the Merger in accordance with the terms of this Agreement.
Section 5.2. Stockholders' Title. The Stockholder has good and
-------------------
marketable title to his or her Shares free and clear of any restrictions on
transfer or voting, Encumbrances or preemptive rights, except as set forth on
Schedule 5.2. The Shares are fully paid and non-assessable. The Stockholder
has the full power, right and capacity to enter into this Agreement and to carry
out the transactions contemplated hereby, and upon consummation of the
transactions contemplated by this Agreement, BPB will have acquired good and
marketable title to the Shares free and clear of any restrictions on transfer or
voting or Encumbrances except such as may be created by BPB.
Section 5.3. Stockholders' Litigation. There is no action, suit or
------------------------
proceeding pending against, or to the knowledge of the Stockholder threatened
against or affecting, the Stockholder or any of his or her respective properties
before any court or arbitrator or any governmental body, agency or official
which in any manner challenges or seeks to prevent, enjoin, alter or materially
delay any of the transactions contemplated hereby or by the Stockholders'
Representatives Power of Attorney.
Section 5.4. Stockholders' Preemptive or Other Rights. Except as set
----------------------------------------
forth on Schedule 5.4, the Stockholder does not have preemptive or other similar
rights to acquire any shares of capital stock of any class of the Company or any
securities convertible into or exchangeable for any such shares. Except for
this Agreement, no subscriptions, options, warrants, conversion or other rights,
agreements, commitments, arrangements or understandings of any kind obligating
the Stockholder, contingently or otherwise, to issue or sell, or cause to be
issued or sold, any shares of capital stock of any class of the Company or any
securities convertible into or exchangeable for any such shares, are
outstanding, and no authorization therefor has been given.
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Section 5.5. Stockholders' Share Ownership. Except as set forth on
-----------------------------
Schedule 5.5, the Stockholder does not own any Shares.
ARTICLE VI
JOINT REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE STOCKHOLDERS
The Company and each of the Stockholders jointly and severally represents
and warrants to BPB and BPIM as follows:
Section 6.1. Organization and Related Matters. The Company is a
--------------------------------
corporation, duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts. Each Pooled Product has been duly
organized as a corporation, general partnership, limited partnership or group
trust, as the case may be, and is validly existing and, if applicable, in good
standing under the laws of its jurisdiction of organization. The Company and
each Pooled Product has the corporate or other requisite power and authority to
carry on its business as it is now being conducted and to own, lease and operate
all of its properties and assets, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned, leased or
operated by it makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed would not have a material adverse effect
on the business, assets, financial condition or results of operations of the
Company taken as a whole or on the ability of any of the parties to complete the
transactions contemplated hereby (a "Material Adverse Effect"). The copies of
the charter, by-laws, comparable organizational document and any amendments
thereto of the Company and each Pooled Product heretofore delivered to BPB and
BPIM are complete and correct copies of such instruments as currently in effect.
The Company has no Subsidiaries. Schedule 6.1 describes all Equity Securities
owned by the Company as of the date hereof. The consummation of the
transactions contemplated hereby have been approved by all requisite corporate
actions on the part of the Company and each of its stockholders, no other
corporate action on the part of the Company or its stockholders is necessary to
approve this Agreement or to consummate the transactions contemplated hereby and
no Stockholder has objected or will object to the transactions contemplated
hereby.
Section 6.2. No Violation. The consummation of the transactions
------------
contemplated hereby will not (i) violate any provision of the Articles of
Organization or By-Laws of the Company or the certificate of incorporation, by-
laws or similar governing documents of any Pooled Product or (ii) assuming that
the consents and approvals referred to in Section 8.2 hereof are duly obtained,
(x) violate any statute, code, ordinance, rule, regulation, judgment, order,
writ, decree or injunction applicable to the Company or any
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Pooled Product or any of their respective properties or assets, or (y) violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of or a right
of termination or cancellation under, accelerate the performance required by, or
result in the creation of any Encumbrance upon, any of the Company Assets, or
any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the Company or any Pooled Product is a
party, or by which the Company or any Pooled Product, or any of their respective
properties or assets may be bound or affected, except (in the case of clause
(ii) above) for such violations, conflicts, breaches, losses of benefits,
defaults, terminations, cancellations, accelerations or Encumbrances which,
either individually or in the aggregate, would not have or could not reasonably
be expected to have a Material Adverse Effect.
Section 6.3. Financial Statements. The Company and the Stockholders have
--------------------
previously delivered to BPB copies of the audited balance sheet of the Company
as of December 31, 1996, together with related notes thereto (the "Balance
Sheet"), and as of December 31, 1995, December 31, 1994 and December 31, 1993,
together with the related notes thereto, and the related audited statements of
income, changes in stockholders' equity and cash flows for the fiscal year ended
December 31, 1996, together with the related notes thereto, in each case
accompanied by the audit report of Baril & Smith, independent accountants with
respect to the Company, and the unaudited balance sheet of the Company as of
June 30, 1997 and the related unaudited statements of income, changes in
stockholders' equity and cash flows for the six-month period then ended,
together with related notes thereto (the statements referred to above being
collectively referred to as the "Financial Statements"). The audited balance
sheets of the Company referred to in the immediately preceding sentence
(including the related notes) fairly present the consolidated financial position
of the Company as of the dates thereof, and the other financial statements of
the Company referred to in this Section 6.3 fairly present (subject, in the case
of the interim unaudited statements, to recurring audit adjustments normal in
nature and amount) the consolidated results of the operations, cash flows and
changes in stockholders' equity of the Company for the respective fiscal periods
therein set forth; and each of the Financial Statements (including the related
notes, where applicable) has been prepared in accordance with GAAP consistently
applied during the periods involved.
Section 6.4. Regulatory Documents.
--------------------
(a) Except as set forth on Schedule 6.4 and except for instances of
failure to make filings or payments that have not had or could not reasonably be
expected to have individually or in the aggregate a Material Adverse Effect, the
Company and each Pooled Product have timely filed all reports, registration
statements and other documents, together with any amendments required to be made
with respect thereto, that they were
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required to file with any Governmental Authority, including the SEC, and have
paid all fees and assessments due and payable in connection therewith.
(b) As of their respective dates, the SEC Documents of the Company
and each Pooled Product complied in all material respects with the requirements
of the Securities Laws, as the case may be, and the published rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and none of such SEC Documents, as of their respective dates, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company and the Stockholders have previously delivered to BPB a complete copy of
each SEC Document filed prior to the date hereof (including a composite Form ADV
as in effect on the date hereof) and since December 31, 1991 and will deliver to
BPB at the same time as the filing thereof a complete copy of each SEC Document
filed after the date hereof and prior to the Closing Date with respect to the
Company and each Pooled Product.
Section 6.5. Books and Records. The Company and each Pooled Product have
-----------------
at all times maintained Records which accurately reflect transactions in
reasonable detail, and accounting controls, policies and procedures sufficient
to ensure that such transactions are (i) executed in accordance with its
management's general or specific authorization, as applicable, and (ii) recorded
in a manner which permits the preparation of financial statements in accordance
with GAAP and applicable regulatory accounting requirements and other account
and financial data, including performance results, in accordance with applicable
regulatory requirements, and the documentation pertaining thereto is retained,
protected and duplicated in accordance with prudent business practices and
applicable regulatory requirements, including the Advisers Act and the
Investment Company Act.
Section 6.6. Ineligible Persons. Neither the Company nor any "affiliated
------------------
person" (as defined in the Investment Company Act) thereof is ineligible
pursuant to Section 9(a) or 9(b) of the Investment Company Act to serve as an
investment adviser (or in any other capacity contemplated by the Investment
Company Act) to a registered investment company. Neither the Company nor any
"associated person" (as defined in the Advisers Act) thereof is ineligible
pursuant to Section 203 of the Advisers Act to serve as a registered investment
adviser or as an associated person to a registered investment adviser.
Section 6.7. Compliance with Applicable Law.
------------------------------
(a) Except as disclosed in Schedule 6.7(a) and except for instances
of failure to hold or be in compliance and instances of default that have not
had or could not reasonably be expected to have in the aggregate a Material
Adverse Effect, the Company and each Pooled Product holds, and has at all times
since January 1, 1992 held, all
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licenses, franchises, permits and authorizations (collectively, "Permits")
necessary for the lawful ownership and use of their respective properties and
assets and the conduct of their respective businesses under and pursuant to
every, and since January 1, 1987 have complied with each, and are not in default
in any material respect under any, Applicable Law relating to the Company, any
Pooled Product or any of their respective assets, properties or operations, and
neither any Stockholder nor the Company knows of any violations of any of the
above or has received any notice asserting any such violation. To the knowledge
of the Company and the Stockholders, all such Permits are valid and in good
standing and are not subject to any suspension, modification or revocation or
proceedings related thereto.
(b) Except as disclosed in Schedule 6.7(b) and except for normal
examinations conducted by any Governmental Authority in the regular course of
the business of the Company, no Governmental Authority has initiated any pending
proceeding or, to the best knowledge of the Company and the Stockholders, any
pending investigation into the business or operations of the Company. To the
knowledge of the Company and the Stockholders, there is no unresolved violation,
criticism or exception by any Governmental Authority with respect to any report
or statement relating to any examination of the Company.
(c) The Company has at all times since December 31, 1991 rendered
investment advisory services to investment advisory clients, including Pooled
Products and Unsponsored Pooled Products, with whom the Company is or was a
party to an investment advisory agreement in material compliance with all
applicable requirements as to portfolio composition and portfolio management
including, but not limited to, the terms of such investment advisory agreements,
written instructions from such investment advisory clients, the organizational
documents of such investment advisory clients, prospectuses, board of director
or trustee directives and Applicable Law.
Section 6.8. Administration of Fiduciary Accounts. The Company has
------------------------------------
properly administered in all material respects all accounts for which it acts as
a fiduciary, including but not limited to accounts for which it serves as a
trustee, agent, custodian, personal representative, guardian, conservator or
investment adviser, in accordance with the terms of the governing documents and
applicable state and federal law and regulation and common law. Except for
instances of breaches that have not had or could not reasonably be expected to
have in the aggregate a Material Adverse Effect, neither the Company nor any of
its directors, officers or employees has committed any breach of trust with
respect to any account for which any of them serves as a fiduciary, and the
accounting for each such fiduciary account is true and correct in all material
respects and accurately reflects the assets of such fiduciary account.
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Section 6.9. Company Assets.
--------------
(a) The Company has good and marketable title to, or, as to the
Leased Properties, a good, marketable and insurable leasehold interest in, each
of the material Company Assets, free and clear of all Encumbrances other than
Permitted Encumbrances. Schedule 6.9(a) contains a true and complete list of all
Operating Sites.
(b) The Company owns no Real Property. Schedule 6.9(b) contains a
correct and complete schedule of all of the Leased Properties and material
Leasehold Improvements on the date hereof. The Company and the Stockholders
have heretofore provided BPB with a true, correct and complete copy of each
written Lease, together with all amendments, modifications, alterations, and
other changes thereto, and there are no unwritten Leases.
(1) All Leases are legal, valid and binding leases, to the
knowledge of the Company and the Stockholders, enforceable by and
against the Company in accordance with their respective terms;
(2) All conditions precedent to the enforceability of each
Lease by the Company have been satisfied, and no notice of default or
termination under any Lease is outstanding. To the knowledge of the
Company and the Stockholders, no termination event or condition or
uncured default on the part of the Company, the lessor or any
sublessor exists under any Lease, and to the knowledge of the Company
and the Stockholders, no event has occurred and no condition exists,
and the consummation of the transactions contemplated by this
Agreement will not create or result in an event or condition which
with or without the giving of notice or the lapse of time or both,
would constitute such a default or termination event or condition.
Neither the Stockholders, the Company nor any employer of any of them
is or has any ownership interest in the landlord under any Lease. All
rent and other sums and charges payable by or to the Company as
tenant, sublessor or sublessee thereunder are current;
(3) The Company has not received any written notice of non-
compliance with any restriction encumbering any of the Leased
Properties or of any existing or potential disturbance to or
interruption in its quiet use and enjoyment of such Leased Properties;
(4) Except for restrictions on assignment, subletting and
similar matters set forth on Schedule 6.9(b)(4) and for Permitted
Encumbrances, no Lease contains any covenant that materially restricts
the use, transferability or value of the subject Leased Property; and
(5) The Company has obtained all required estoppel letters
from its lessors.
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(c) To the knowledge of the Company and the Stockholders, all of the
material Leasehold Improvements, Furniture, Fixtures and Equipment and other
material tangible personal property that constitute Company Assets or that are
used in the conduct of the Company's business are in good working condition and
free from material defects, subject to ordinary wear and tear.
Section 6.10. Company Contracts. Except for Company Contracts listed on
-----------------
another Schedule hereto, Schedule 6.10(a)(1) lists all of the Company Contracts
involving the receipt or payment by the Company in any of the two prior fiscal
years or reasonably likely to involve the payment by the Company in the current
or any future fiscal year of an amount in excess of $10,000 and all investment
advisory contracts without regard to such threshold amount, in existence as of a
date not more than three days prior to the date hereof, true, correct and
complete copies of which, including all amendments and supplements thereto, have
previously been made available to BPB. The Company and the Stockholders have
made available to BPB copies of all sales, marketing and account solicitation
agreements and material arrangements of the Company. Except as set forth on
Schedule 6.10(a)(2), and assuming that the consents and approvals referred to in
Section 8.2 hereof are duly obtained: (i) the Company has duly performed all
its obligations under each Company Contract, including all investment advisory
contracts, to the extent that such obligations have accrued, (ii) no breach or
default, alleged breach or default, or event which constitutes or would (with
the passage of time, notice or both) constitute a breach or default thereunder,
or which would permit termination, modification or acceleration thereof by any
party thereto, has occurred, or, as a result of this Agreement or the
performance by the Company and the Stockholders of any of their respective
covenants or obligations hereunder, will occur, and (iii) to the knowledge of
the Company and the Stockholders, each Company Contract is valid and binding on
the Company and on all of the other parties thereto, is in full force and effect
and is enforceable in accordance with its terms.
Section 6.11. Technology and Intellectual Property.
------------------------------------
(a) Schedule 6.11(a) contains a true and complete list and
description of each of the electronic data processing, information,
communications, telecommunications and computer systems which are material to
the business of the Company or to the operation of the Operating Sites
(collectively, the "Technology Systems") as of the date hereof, including (i) a
description of any computer hardware or Software leased, owned or used by any of
them that is used in the operation of the Technology Systems and (ii) a list of
any contracts pursuant to which any of them is granted rights which are used in
the operation of the Technology Systems, including soft dollar arrangements,
Software licenses and similar agreements.
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(b) To the knowledge of the Company and the Stockholders, except as
disclosed in Schedule 6.11(b), each of the Technology Systems is adequate for
its intended use and for the operation of the Operating Sites as currently
operated and there has not been any material malfunction with respect to any of
the Technology Systems.
(c) Schedule 6.11(c) contains a true and complete list and
description of all material Intellectual Property licensed to or owned or used
by the Company as of the date hereof and all material licenses or similar
agreements as of the date hereof pursuant to which the Company has granted or
has been granted rights with respect to Intellectual Property not owned and used
exclusively by them.
(d) To the knowledge of the Company and the Stockholders, except as
set forth in Schedule 6.11(d), the Company has the right to use the Software and
Intellectual Property in accordance with the terms of the relevant contracts
governing such use, free and clear of any material claims by any Person (other
than the claims of any licensor under licensing or similar agreements), and the
consummation of the transactions contemplated by this Agreement will not
materially alter or impair the unrestricted right of the Company to use the
Software or the Intellectual Property, free and clear of any material claims by
any Person (other than the claims of any licensor under licensing or similar
agreements). To the knowledge of the Company and the Stockholders, no claims
have been asserted by any Person with respect to the use by the Company of the
Software or the Intellectual Property or challenging or questioning the validity
or effectiveness of any license or similar agreement with respect thereto, and,
to the knowledge of the Company and the Stockholders, there is no basis for any
such claim. Neither the Software nor the Intellectual Property is subject to
any outstanding order, judgment, decree, stipulation or agreement materially
restricting the use thereof by the Company.
Section 6.12. Legal Proceedings. Except as set forth on Schedule 6.12,
-----------------
neither the Company nor any Pooled Product is a party to any, and there are no
pending or, to the knowledge of the Company and the Stockholders, threatened,
legal, administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against or otherwise
affecting, directly or indirectly, the Company, any Pooled Product or any of
their respective properties or assets or challenging the validity or propriety
of the transactions contemplated by this Agreement which, if adversely
determined, individually or in the aggregate, would have or could reasonably be
expected to have a Material Adverse Effect, and there is no injunction, order,
judgment, decree or regulatory restriction imposed upon the Company, any Pooled
Product or any of their respective properties or assets which, individually or
in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect.
Section 6.13. Environmental Compliance. Except for instances of
------------------------
noncompliance which have not had or could not reasonably be expected to have in
the aggregate a Material Adverse Effect, with respect to the Leased Properties,
the Company is and has
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been in compliance with, and, to the knowledge of the Company and the
Stockholders, there are no outstanding allegations by any Person or entity that
the Company has not been in compliance with, all Environmental Laws. Schedule
6.13 contains a complete and accurate list of all environmental or worker safety
and health reports, studies, investigations and audits of which the Company or
any Stockholder has knowledge relating to the Operating Sites as of the date
hereof, copies of which have previously been provided to BPB.
Section 6.14. Taxes and Tax Returns.
---------------------
(a) The Company has duly filed (or will duly file) on a timely basis
all Tax Returns required to be filed by it for all periods ending on or before
the Closing Date and to the best of the Company's knowledge such Tax Returns are
true, correct and complete. The Company has duly paid (or will duly pay) on a
timely basis all Taxes that are due and payable, except Taxes which are not yet
delinquent.
(b) The Company will not be liable for the payment of any Tax with
respect to gain or income realized as a result of the transfers contemplated by
the Agreement, including but not limited to any federal income tax imposed on
"built-in gains" within the meaning of Section 1374 of the Code.
(c) No Tax is required to be withheld by BPB from the Purchase Shares
as a result of the transfers contemplated by this Agreement pursuant any
provision of the Code or any other provision of federal, state, foreign or local
Tax law.
(d) The Company has not (i) received any notice of deficiency or
assessment from any Tax Authority with respect to liability for Taxes of the
Company or Taxes of the Stockholders relating to income of the Company that have
not been fully paid or finally settled or (ii) signed or filed any written
requests, agreements, consents or waivers to extend the statutory period of
limitations applicable to the assessment of any Taxes with respect to any Tax
Returns of the Company.
(e) No audit or other proceeding by any Tax Authority is presently
pending with respect to any Taxes or Tax Return of the Company. The Company has
not received any notification of intent to audit from any Tax Authority.
(f) There are no Encumbrances for Taxes upon any of the Company
Assets other than Encumbrances for Taxes not yet due or payable.
(g) No payment which will, or may, be made to any Stockholder or any
employee, director or agent of the Company will constitute an "excess parachute
payment" within the meaning of Section 280G of the Code.
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(h) The Company has been a qualified S corporation (or Subchapter S
corporation), within the meaning of the Code, at all times since its date of
formation and has filed all forms and taken all actions necessary to maintain
such status. Neither the Company nor any Stockholder has taken any action, or
omitted to take any action, which action or omission could result in the loss of
qualified S corporation or Subchapter S corporation status for such period prior
to the Closing Date, other than the loss of S corporation status anticipated to
occur as a result of the Merger pursuant to this Agreement.
(i) The Company is not a party to, is not bound by, and does not have
any obligation under any Tax sharing, indemnity or similar contract or
arrangement and is not liable for the Taxes of any other Person under Treasury
Regulation Section 1.1502-6 or any similar provision of state or local law. No
power of attorney has been granted by the Company with respect to any matter
relating to Taxes which is currently in force.
(j) No claim has ever been made by any Tax Authority in a
jurisdiction where the Company does not file Tax Returns that the Company may be
subject to taxation by that jurisdiction. The Company is not required to file
any state Tax Return other than in the Commonwealth of Massachusetts.
(k) The Company has withheld and timely paid all amounts required to
be withheld by Sections 1441 and 1442 of the Code and have timely withheld from
employee wages and paid to the appropriate Tax Authorities all amounts required
to be so withheld and paid under applicable laws.
Section 6.15. Insurance. Except as set forth on Schedule 6.15, the
---------
Company maintains and at all times since December 31, 1992 has maintained with
reputable insurers insurance and indemnity bonds providing coverage for the
Company against all risks normally insured or bonded against by companies in
similar lines of business. All such insurance policies and bonds maintained as
of the date hereof are listed in Schedule 6.15. Each such insurance policy or
bond is in full force and effect, and the Company has not received written
notice or any other indication from any insurer or agent of any intent to cancel
any such insurance policy or bond. All premiums due on the insurance have been
paid, and the Company will maintain such insurance policies (or comparable
substitute policies) from the date of this Agreement through the Closing Date.
The Company has not received, nor does the Company or any Stockholder have
knowledge of, any notice or request from any insurance company or board of fire
underwriters requesting the performance of any work or alteration with respect
to the Company Assets. The Company has not received any notice from any
insurance company with respect to, nor is the Company or any Stockholder aware
of, any defects or inadequacies in the Company Assets which, if not corrected,
would result in the termination or limitation in any material respect of
insurance coverage or any material increase in the cost of such insurance.
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Section 6.16. Labor and Employment Matters.
----------------------------
(a) Except as set forth on Schedule 6.16(a), to the knowledge of the
Company and the Stockholders: (1) the Company is not engaged in, nor has the
Company since January 1, 1992 engaged in, any unfair labor practice which could
reasonably be expected to result in any material liability to the Company; (2)
there is no labor strike, dispute, slowdown or stoppage pending, or threatened
against the Company; (3) no union is currently certified, there is no union
representation question and no union or other organizational activity that would
be subject to the National Labor Relations Act (29 U.S.C. (S) 151 et seq.)
-- ---
exists or is threatened with respect to the operations of the Company; (4) no
grievance or arbitration proceeding arising out of or under a collective
bargaining agreement is pending, and no claims therefor exist or are threatened
with respect to the operations of the Company; (5) no collective bargaining
agreement exists which is binding on the Company; (6) the Company has not
experienced any material work stoppage or other material labor difficulty; (7)
the Company is not delinquent in any material respect in payments to any of its
current or former officers, directors, employees or agents for any wages,
salaries, commissions, bonuses, benefits or other compensation for any services
performed by them or amounts required to be reimbursed to them; and (8) in the
event of termination of the employment of any employee of the Company, neither
the Company nor BPB or any of its Affiliates will be liable to any such employee
under any agreement in effect at the Closing for so-called "severance pay" or
any other payments or benefits, including, without limitation, post-employment
health care or insurance benefits.
(b) Schedule 6.16(b) or Schedule 6.17(a) lists each contract,
agreement or material arrangement, in effect as of the date of this Agreement,
between the Company, on the one hand, and any Person, on the other hand,
relating to such Person's employment with the Company.
Section 6.17. Benefit Plan Obligations.
------------------------
(a) Schedule 6.17(a) contains a true and complete list of each bonus,
deferred compensation, incentive compensation, stock purchase, stock option,
equity-based award, severance or termination pay, hospitalization or other
medical, accident, disability, life or other insurance, supplemental
unemployment benefits, fringe, other welfare benefit, profit-sharing, pension or
retirement plan, program, agreement or arrangement, and each other employee
benefit plan, program, agreement or arrangement (collectively, the "Plans") as
of the date hereof sponsored, maintained, or contributed to or required to be
contributed to by the Company or any ERISA Affiliate (as defined below) for the
benefit of any employee or terminated employee of the Company or any ERISA
Affiliate. For purposes of this Agreement, "ERISA Affiliate" means any entity
or Person that together with the Company would be deemed a "single employer"
within the meaning of section 4001 of ERISA or would be considered as being
"members" of a controlled group of
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corporations within the meaning of section 414 of the Code with the Company.
Schedule 6.17(a) hereto identifies each of the Plans that is an "employee
benefit plan" (each, an "ERISA Plan") as that term is defined in section 3(3) of
ERISA and each ERISA Affiliate of every ERISA Plan. Each Plan may be modified or
terminated by the Company or its ERISA Affiliates, whichever is applicable,
without liability to the Company or its ERISA Affiliates, subject only to claims
filed or [accrued] prior to such modification or termination. True and correct
copies of each of the Plans, all amendments thereto, any written interpretations
thereof distributed to employees, and all contracts relating thereto or the
funding thereof (including, without limitation, all trust or other funding
agreements and the most recent financial statements thereof, insurance
contracts, administration contracts and investment management agreements),
summary plan descriptions, the two most recent annual reports (Form 5500
including, if applicable, Schedule B thereto), the most recent actuarial
valuation report and the most recent report prepared in connection with any Plan
in accordance with Statement of Financial Accounting Standards No. 87,
Employer's Accounting for Pensions and the most recent determination letter
received from the IRS with respect to each Plan intended to qualify under
Section 401 of the Code have been made available to BPB.
(b) No liability under Title IV of ERISA has been incurred by the
Company or any of its ERISA Affiliates that has not been satisfied in full, and
no condition exists that presents a material risk to the Company or any of its
ERISA Affiliates of incurring a liability under such Title, other than liability
for premiums due the Pension Benefit Guaranty Corporation ("PBGC") (which
premiums have been paid when due). To the extent this representation applies to
sections 4064, 4069 or 4204 of Title IV of ERISA, it is made not only with
respect to each ERISA Plan but also with respect to any employee benefit plan,
program, agreement or arrangement subject to Title IV of ERISA to which the
Company or any of its ERISA Affiliates made, or was required to make,
contributions during the five-year period ending on the Closing Date.
(c) The PBGC has not instituted proceedings to terminate any ERISA
Plan and no condition exists that presents a material risk that such proceedings
will be instituted.
(d) With respect to each ERISA Plan subject to Title IV of ERISA, the
present value of accrued benefits under such plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such plan's actuary with respect to such plan did not exceed, as of
its latest valuation date, the then current value of the assets of such plan
allocable to such accrued benefits.
(e) Neither the Company nor any ERISA Affiliate, nor any ERISA Plan,
nor any trust created thereunder, nor any trustee or administrator thereof, has
engaged in a transaction in connection with which the Company or any of its
ERISA Affiliates, any ERISA Plan, any such trust, or any trustee or
administrator thereof, or any party dealing
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with any ERISA Plan or any such trust, could be subject to either a material
civil penalty assessed pursuant to section 409 or 502(i) of ERISA or a material
Tax imposed pursuant to section 4975 or 4976 of the Code.
(f) No ERISA Plan or any trust established thereunder has incurred
any "accumulated funding deficiency" (as defined in section 302 of ERISA and
section 412 of the Code), whether or not waived, as of the last day of the most
recent fiscal year of each ERISA Plan ended prior to the Closing Date, and all
contributions required to be made with respect thereto (whether pursuant to the
terms of any ERISA Plan or otherwise) on or prior to the Closing Date have been
timely made.
(g) Each Plan and trust forming a part thereof, in all material
respects, complies with, and has been operated and administered in accordance
with, its terms and applicable law, including without limitation ERISA and the
Code.
(h) No Plan is a "multiemployer pension plan," as defined in section
3(37) of ERISA.
(i) Each Plan which is intended to be "qualified" within the meaning
of section 401(a) of the Code is so qualified and has been so qualified during
the period from its adoption to date, and each trust maintained thereunder is
exempt from taxation under section 501(a) of the Code.
(j) There is no matter pending (other than routine qualification
determination filings, copies of which have been furnished to BPB, or will be
promptly furnished to BPB when made) with respect to any of the Plans before the
IRS or Department of Labor. There are no pending, or, to the knowledge of the
Company and the Stockholders, threatened or anticipated actions, suits or claims
by or on behalf of any Plan, by any employee or beneficiary covered thereunder,
or otherwise involving any such Plan (other than routine claims for benefits).
(k) Except as required by Section 601 et seq. of ERISA, no Plan that
-- ---
is a "Welfare Plan" within the meaning of ERISA Section 3(1) provides benefits,
including without limitation death or medical benefits (whether or not insured),
with respect to current or former employees of the Company or any ERISA
Affiliate, beyond their retirement or other termination of service at any cost
to the Company or any of its ERISA Affiliates.
(l) Except as set forth on Schedule 6.16(a) or Schedule 6.17(l), the
consummation of the transactions contemplated by this Agreement (either alone or
upon the occurrence of any additional or subsequent events) will not (i) entitle
any current or former employee, director or officer of the Company or any of its
ERISA Affiliates to severance pay, unemployment compensation, incentive pay or
any other payment or (ii)
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accelerate the time of payment or vesting, or increase the amount of
compensation due, or forgive any indebtedness of, any such employee, director or
officer.
Section 6.18. No Other Broker. No broker, finder or similar intermediary
---------------
has acted for or on behalf of, or is entitled to any broker's, finder's or
similar fee or other commission from the Company in connection with this
Agreement or the transactions contemplated hereby.
Section 6.19. Undisclosed Liabilities. Except for (a) liabilities or
-----------------------
items set forth in Schedule 6.19, (b) liabilities that are fully reflected or
reserved against on the Balance Sheet, (c) liabilities incurred in the Ordinary
Course of Business since the date of the Balance Sheet, none of which are
material to the business or operations of the Company, (d) liabilities the
incurrence of which is expressly contemplated by this Agreement or authorized by
BPB in writing and (e) nonmonetary obligations arising under the terms of any
agreement other than obligations arising as a result of a breach thereof or
default thereunder, the Company has no liabilities of any nature whatsoever,
whether absolute, accrued, contingent or otherwise and whether known or unknown
or due or to become due.
Section 6.20. Capitalization.
--------------
(a) The authorized capital stock of the Company consists of 100,000
shares of Class A Common Stock and 100,000 shares of Class B Common Stock, of
which only 1655 Shares, all of which are owned by the Stockholders, are issued
and outstanding. The Shares have been duly authorized and validly issued and are
fully paid and nonassessable.
(b) There are no preemptive or similar rights on the part of any
holders of any class of securities of the Company. Except as described in
Schedule 6.20(b), no subscriptions, options, warrants, conversion or other
rights, agreements, commitments, arrangements or understandings of any kind
obligating the Company, contingently or otherwise, to issue or sell, or cause to
be issued or sold, any shares of capital stock of any class of the Company, or
any securities convertible into or exchangeable for any such shares, are
outstanding, and no authorization therefor has been given. Except as provided
in this Agreement or set forth on Schedule 6.20(b), there are no outstanding
contractual obligations of any Person to repurchase, redeem or otherwise acquire
any outstanding shares or other equity interests of the Company.
(c) Except as set forth on Schedule 6.20, each repurchase,
retirement, exchange, cancellation or other action taken by the Company with
respect to securities of which it is the issuer constituted the legal and valid
action of the Company in accordance with Applicable Law and its respective
charter, bylaws, partnership agreement or other
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organizational document and the Company has no ongoing liabilities in connection
therewith.
Section 6.21. Absence of Changes. Since December 31, 1996, except (i) as
------------------
specified in Schedule 6.21 or (ii) as contemplated by this Agreement, neither
the Company nor any Pooled Product has taken any action or suffered to exist any
condition which, had it been taken or suffered after the date hereof, would have
been prohibited by or in violation of Section 8.1(a) hereof.
Section 6.22. Disclosure. No representation or warranty to BPB contained
----------
in this Agreement or any of the agreements referred to herein, and no statement
contained in any certificate, agreement, document or other writing furnished or
to be furnished to BPB at the Closing pursuant to Article III hereof, contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements herein or
therein, in light of the circumstances in which they are made, not misleading.
Section 6.23. Stockholders' Investment Intent. Each Stockholder
-------------------------------
represents that the Purchase Shares issuable to such Stockholder hereunder are
being acquired for such Stockholder's own account, for investment for an
indefinite period of time, not as nominee or agent for any other person, firm or
corporation and not for distribution or resale to others in contravention of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder; provided, however, that the parties hereto acknowledge that the
Stockholders may dispose of some or all of the Purchase Shares pursuant to an
effective registration statement under the Securities Act of 1933, as amended.
Each Stockholder agrees that she or he will not sell or otherwise transfer any
Purchase Shares unless they are registered under the Securities Act of 1933, as
amended, or unless an exemption from such registration is available.
Section 6.24. Securities Legend; Stop Transfer Instructions. Each
---------------------------------------------
Stockholder consents to the placement of a legend on any certificate or other
document evidencing the Purchase Shares, stating that such BPB Shares have not
been registered under the Securities Act of 1933, as amended, or any state
securities or "blue sky" laws and setting forth or referring to the restrictions
on transferability and sale thereof, including the restrictions set forth
herein. Each Stockholder is aware that BPB will make a notation in its
appropriate records with respect to the transactions on the transferability of
such BPB Shares. Each Stockholder also consents and acknowledges that "stop
transfer" instructions may be noted against the BPB Shares received by him or
her as consideration hereunder. BPB hereby undertakes to remove any legend
described in this Section or to rescind any "stop transfer" instructions
described in this Section as to any Stockholder's Purchase Shares (a) if such
Stockholder furnishes BPB with an opinion of counsel or other written
information satisfactory in form and content to BPB that such legend or any such
instructions are no longer required (as applicable) or (b) with respect to and
at the time of
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the disposition of any such Purchase Shares pursuant to an effective
registration statement under the Securities Act of 1933, as amended.
Section 6.25. Pooling Representation Letters. To ensure that the business
------------------------------
combination to be effected by this Agreement and the transactions contemplated
hereby will be accounted for as a pooling of interests, the Company has signed
and delivered to Baril & Smith a letter dated August 6, 1997 addressed to Baril
& Smith with respect to certain matters relating to pooling of interest
treatment and has attested to a letter signed by an officer of BPB dated August
13, 1997 and addressed to KPMG Peat Marwick LLP with respect to certain matters
relating to pooling of interest treatment, and each Stockholder represents that
the information contained therein with respect to the Company is true and
correct in all material respects. If required, the President of the Company
will execute any documentation reasonably required by BPB's independent public
accountants with respect to pooling of interest accounting issues.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BPB AND BPIM
BPB and BPIM jointly and severally represent and warrant to the
Stockholders as follows:
Section 7.1. Organization. Each of BPB and BPIM is a corporation duly
------------
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to carry on its business as it is now being conducted and to own,
lease and operate all of its properties and assets, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned, leased or operated by it make such qualification or licensing
necessary, except where the failure to be so qualified or licensed would not
have a material adverse effect on the business, assets, financial condition or
results of operations of BPB taken as a whole or on the ability of BPB and BPIM
to complete the transactions contemplated hereby (a "Buyer's Material Adverse
Effect"). BPIM is a wholly owned Subsidiary of BPB.
Section 7.2. Authority; No Violation.
-----------------------
(a) BPB and BPIM each have full power and authority to execute and
deliver each of the respective Buyer Agreements executed and delivered by them
and to consummate the transactions contemplated thereby. The execution and
delivery of the respective Buyer Agreements executed by them and the
consummation of the transactions contemplated thereby have been duly and validly
approved by all requisite action on the part of BPB and BPIM, and no other
proceedings on the part of BPB or BPIM are
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necessary to approve the Buyer Agreements and to consummate the transactions
contemplated thereby. This Agreement has been duly and validly executed and
delivered by BPB and BPIM, and prior to the Closing each of the other Buyer
Agreements to be executed by BPB or BPIM will be duly and validly executed by
BPB or BPIM, as the case may be. Assuming the due authorization, execution and
delivery of the Buyer Agreements by the other parties thereto (other than BPB
and BPIM), each Buyer Agreement to which BPB or BPIM is a party constitutes (or
when executed and delivered by BPB or BPIM, as the case may be, will constitute)
a valid and binding obligation of BPB or BPIM, as the case may be, enforceable
against BPB or BPIM in accordance with its terms, except as enforcement may be
limited by general principles of equity whether applied in a court of law or a
court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally.
(b) Each of BPB and BPIM has heretofore furnished to the Company a
complete and correct copy of its Articles of Organization and By-Laws, as
amended to date. Such Articles of Organization and By-Laws are in full force
and effect. Neither BPB nor BPIM is in violation of any of the provisions of
its Articles of Organization or By-Laws, respectively.
(c) The authorized capital stock of BPB consists of (i) 18,000,000
BPB Shares and (i) 2,000,000 shares of preferred stock, par value $1.00 per
share. As of August 8, 1997, there were (i) 6,693,608 BPB Shares issued and
outstanding and (ii) 2,985,500 BPB Shares reserved for future issuance pursuant
to BPB's 1997 Long Term Stock Incentive Plan. None of the preferred stock of BPB
has been issued. Except as set forth in Schedule 7.2(c), there are no options,
warrants or other rights, agreements or commitments obligating BPB to issue or
sell any shares of capital stock of, or other equity interests in, BPB.
(d) The execution and delivery of the respective Buyer Agreements by
BPB and BPIM the consummation by BPB and BPIM of the transactions contemplated
thereby, and compliance by BPB and BPIM with any of the terms or provisions
thereof, will not (i) violate any provision of the charter or by-laws or other
constituent documents of BPB or BPIM or, except as set forth in Schedule 7.2(d),
conflict with, or result in a breach of any of the terms or provisions of, or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of BPB or BPIM (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that individually or in the aggregate
would not adversely affect BPB or BPIM ability to consummate the transactions
contemplated hereby in accordance with the terms and conditions hereof) under:
(A) any indenture, mortgage or loan or any other agreement or instrument to
which BPB or BPIM is a party or by which they may be bound or to which any of
their properties or assets may be subject; or
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<PAGE>
(B) any existing applicable law, rule, regulation, judgment, order or decree of
any Governmental Authority having jurisdiction over BPB or BPIM as the case may
be, or any of their properties.
Section 7.3. Consents and Approvals. No authorization or approval or
----------------------
other action by, and no notice to or filing with, any Governmental Authority or
any third party will be required to be obtained or made by BPB or BPIM in
connection with the due execution and delivery by BPB and BPIM of the respective
Buyer Agreements executed and delivered by them and the consummation by BPB and
BPIM of the transactions as contemplated thereby other than (a) such other
consents, approvals, authorizations, filings or notices as have been made or
received on or prior to the date hereof or are set forth in Schedule 7.3; (b)
the applicable filings under the HSR Act; and (c) filings, authorizations,
consents or approvals the failure to make or obtain which would not adversely
affect BPB's or BPIM's ability to consummate the transactions contemplated
hereunder in accordance with the terms and conditions of this Agreement. In
addition, BPB may notify the Federal Deposit Insurance Corporation and the
Massachusetts Commission of Banks of the transactions contemplated by this
Agreement upon execution hereof.
Section 7.4. No Actions; Suits or Proceedings. There is no pending
--------------------------------
action, suit or proceeding, nor, to the knowledge of BPB and BPIM has any
litigation been threatened, against BPB or BPIM or before any Governmental
Authority which questions the validity or legality of any Buyer Agreement or of
the transactions contemplated thereby, or which seeks to prevent the
consummation of the transactions contemplated thereby.
Section 7.5. Financial Ability. BPB has, or will have on or before the
-----------------
Closing Date, sufficient authorized and unissued BPB Shares to consummate the
Merger.
Section 7.6. No Other Broker. Other than Berkshire Capital Corporation,
---------------
the fees and expenses of which will be paid by BPB, no broker, finder or similar
intermediary has acted for or on behalf of, or is entitled to any broker's,
finder's or similar fee or other commission from BPB or BPIM in connection with
this Agreement or the transactions contemplated hereby.
Section 7.7. BPB Shares. The BPB Shares to be issued to the Stockholders
----------
pursuant to this Agreement will be, when issued and delivered to the
Stockholders in accordance with this Agreement, duly authorized, validly issued,
fully paid, non-assessable and free and clear of any Encumbrances, subject to
restrictions imposed herein, on the certificate or certificates therefor or by
the Securities Laws.
Section 7.8. BPB Reports.
-----------
(a) BPB has heretofore delivered to the Stockholders, in the form
filed with the SEC, (i) its Annual Report on Form 10-KSB for the fiscal year
ended December
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31, 1996, (ii) its Quarterly Report on Form 10-QSB for the quarter ended March
30, 1997, (iii) its Quarterly Report on Form 10-QSB for the quarter ended June
30, 1997, (iv) its proxy statement relating to BPB's meeting of stockholders
held May 21, 1997 and (v) all amendments and supplements to all such reports and
statements filed by BPB with the SEC (collectively, the "SEC Reports"). The SEC
Reports (i) were prepared in all material respects in accordance with the
requirements of the Securities Exchange Act of 1934, as amended, and (ii) did
not at the time they were filed (or if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the SEC Reports has been prepared
in accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and each fairly
presents in all material respects the consolidated financial position of BPB and
its Subsidiaries as at the respective dates thereof and the consolidated results
of its operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments and the absence of footnote disclosure.
(c) Except as set forth in Schedule 7.8(c), between December 31, 1996
and the date hereof, except as disclosed in the SEC Reports, there has not been
any change in the business or operations of BPB which has had or would
reasonably be expected to have a Buyer's Material Adverse Effect.
Section 7.9. Pooling Matters. To ensure that the business combination
---------------
to be effected by this Agreement and the transactions contemplated hereby will
be accounted for as a pooling of interests, BPB has signed and delivered to KPMG
Peat Marwick LLP a letter dated August 13, 1997 addressed to KPMG Peat Marwick
LLP with respect to BPB and its affiliates certain matters relating to pooling
treatment, and BPB represents that the information contained therein with
respect to the Company is true and correct in all material respects.
Section 7.10. Ownership of BPIM; No Prior Activities.
--------------------------------------
(a) BPIM was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement.
(b) As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the transactions contemplated by this Agreement and except for
this Agreement and any other agreements or arrangements contemplated by this
Agreement, BPIM has not and will not
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have incurred, directly or indirectly, through any subsidiary or affiliate, any
obligations or liabilities or engaged in any business activities of any type or
kind whatsoever or entered into any agreements or arrangements with any person.
ARTICLE VII
COVENANTS
Section 8.1. Conduct of Business.
-------------------
(a) During the period from the date of this Agreement and continuing
through the Closing Date, except as required by Applicable Law and disclosed to
BPB, expressly contemplated or permitted by this Agreement (including the
distributions to be made pursuant to Section 8.14 hereof) or with the prior
written consent of BPB, the Company shall, and the Stockholders shall cause the
Company to: (i) carry on its business in the Ordinary Course of Business
consistent with prudent business practice; (ii) use commercially reasonable
efforts to preserve its present business organization and relationships; (iii)
use commercially reasonable efforts to keep available the present services of
its employees; (iv) use commercially reasonable efforts to preserve the rights,
franchises, goodwill and relations of its customers and others with whom
business relationships exist; (v) not take or omit any action that is intended
or results in or may reasonably be expected to result in any of its
representations and warranties set forth herein being or becoming untrue or any
of its agreements herein being breached in any respect; (vi) not grant, issue or
sell any security of which the Company is the issuer; and (vii) not capitalize
any lease obligation regardless of when such lease obligation was entered into;
provided, however, that nothing in this Section 8.1(a) shall prohibit the
Company from (A) incurring any short-term indebtedness payable without penalty
and at prevailing rates and on customary terms, or otherwise acceptable to BPB,
to the extent necessary to finance that portion of the distribution contemplated
by Section 8.14 that is reflected in Current Assets but that has not as of the
date of such borrowing been reduced to cash or (B) contributing such amount as
is necessary to fund any unfunded portion of the Company's existing profit
sharing plan relating to the period commencing on January 1, 1997 and ending on
the Closing Date.
(b) From time to time prior to the Closing Date the Company and the
Stockholders shall update or cause to be updated each of the Schedules to this
Agreement required pursuant to Article I, IV, V or VI hereof to reflect changes
to the information set forth therein occurring through a date not more than two
days prior to the Closing Date. With respect to Schedules 1.1(a), 6.1, 6.9(c),
6.10(a)(1), 6.11(a), 6.11(c), 6.13, 6.15, 6.16(b) and 6.17(a), such updates
shall be made assuming that such Schedules are required to show the information
contained therein through such date within two days of the
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Closing Date notwithstanding that the applicable Section of Article I or Article
VI requires that the information be shown only through an earlier date.
(c) During the period from the date of this Agreement and continuing
through the Closing Date, except as required by applicable law and disclosed to
BPB, expressly contemplated or permitted by this Agreement or with the prior
written consent of BPB, no Stockholder shall take or omit any action that is
intended or results in or may reasonably be expected to result in any of its
representations and warranties set forth herein being or becoming untrue or any
of its agreements herein being breached in any respect.
Section 8.2 Advisory Contract Consents and Approvals and Other Actions.
----------------------------------------------------------
(a) The Company shall, and the Stockholders shall cause the Company
to, use reasonable best efforts to solicit and obtain the approval of the boards
of trustees or directors of the Investment Companies to approve, and to solicit
their respective shareholders as promptly as reasonably practicable with regard
to the approval of, new investment advisory agreements with the Company, acting
as investment adviser for such Investment Company, to be effective upon the
Closing Date, pursuant to the provisions of the Investment Company Act, and
consistent with all requirements of the Investment Company Act applicable
thereto; provided, however, that except as consented to in writing by BPIM
-------- -------
(which consent will not be unreasonably withheld), such agreements shall be
identical in all material respects to the existing agreements, other than as to
term.
(b) The Company shall, and the Stockholders shall cause the Company
to, use its reasonable best efforts to ensure the satisfaction of the conditions
set forth in Sections 15(f) and 16(b) of the Investment Company Act with respect
to each Investment Company.
(c) As soon as reasonably practicable and in any event by the fifth
Business Day following the date hereof, the Company shall, and the Stockholders
shall cause the Company to, (i) inform its non-Investment Company investment
advisory clients of the transactions contemplated by this Agreement and, except
as provided below in this Section 8.2(c), (ii) request such clients' consent to
the assignment of their investment advisory agreements deemed to occur as a
result of the consummation thereof and (iii) use its reasonable best efforts to
obtain such consents. BPB agrees that the Company and the Stockholders may
satisfy this obligation by providing each such client with the notice
contemplated by the first sentence of this Section 8.2(c) and obtaining such
client's consent in the form of (A) an actual written consent or a new
investment advisory agreement with the Company, acting as investment adviser, to
be effective upon the Closing Date; provided, however, that except as consented
to in writing by BPB (which consent will not be unreasonably withheld) such
agreements shall be identical in all material respects to the existing
agreements or (B) insofar as it relates to any investment advisory agreement
included on Schedule 8.2(c), in the form of an implied consent. It is
understood that such
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<PAGE>
implied consent may be obtained by informing such client in writing at least
forty-five days in advance of the Closing of: (i) the Company's intention to
assign, within the meaning of the Investment Advisers Act of 1940, as amended,
such investment advisory agreement; (ii) the Company's intention to continue the
advisory services pursuant to the existing investment advisory agreement with
such client after the Closing Date if such client does not terminate such
investment advisory agreement prior to the Closing Date; and (iii) that the
consent of such client will be implied if such client continues to accept such
advisory services without termination. Any notice in the form of Exhibit E
hereto that is timely delivered to a client and that accurately identifies the
investment advisory agreement or agreements of such client to be assigned shall
be a valid notice with respect to such client for the purposes of this Section
8.2(c).
(d) No Stockholder will sell, transfer, assign or dispose of any of
his or her Shares other than pursuant to the terms of this Agreement.
Section 8.3. Confidentiality and Announcements.
---------------------------------
(a) BPB, BPIM, the Company and the Stockholders agree that BPB may
issue a press release in substantially the form attached hereto as Exhibit G
upon execution of this Agreement.
(b) None of the Company, any Stockholder, BPB, BPIM or any of their
respective Affiliates shall disclose publicly any of the contents hereof other
than as required by Section 8.2, permitted by this Section 8.3 or required by
law upon prior notice to the other party.
(c) The Company, Stockholders' Representatives, BPB and BPIM shall
agree with each other as to the form and substance of any additional press
release prior to the earlier to occur of the Closing Date or termination of this
Agreement pursuant to Section 12.1 hereof, related to this Agreement or the
transactions contemplated hereby, and shall consult each other as to the form
and substance of other public disclosures prior to the earlier to occur of the
Closing Date or termination of this Agreement pursuant to Section 12.1 hereof,
related thereto and shall not issue any such press release without the consent
of the other party, which consent shall not be unreasonably withheld; provided,
however, that nothing contained herein shall prohibit either party, following
notification to the other party if practicable, from making any disclosure which
its legal counsel deems to be required by any applicable Governmental Authority
or render Applicable Law.
Section 8.4. Expenses. Except as provided in Section 13.1, BPB shall
--------
bear the direct and indirect expenses of BPB and its Affiliates incurred in
connection with the negotiation and preparation of this Agreement and the
consummation of the transactions contemplated hereby. Except as provided in
Section 13.1, the Stockholders shall bear the direct and indirect expenses of
the Stockholders and the Company incurred in connection
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with the negotiation and preparation of this Agreement and the consummation of
the transactions contemplated hereby. Without in any way limiting the foregoing,
the fees and disbursements of Ropes & Gray in connection with this transaction
shall be paid or borne by the Stockholders, and the fees and disbursements of
Skadden, Arps, Slate, Meagher & Flom LLP in connection with this transaction
shall be paid or borne by BPB or an Affiliate of BPB.
Section 8.5. Release of the Company and its Affiliates. Effective upon
-----------------------------------------
the Closing, each of the Stockholders hereby releases and forever discharges the
Company, BPB, BPIM and their respective Affiliates from any and all causes of
action, rights or claims that such Stockholder may have had in the past, may now
have or may have in the future related to, connected with, or arising out of
such Stockholder's status as a stockholder of the Company prior to the Closing;
provided, however, that such release and discharge shall not apply to any cause
- -------- -------
of action, right or claim that such Stockholder may have (i) in any capacity
other than as a stockholder of the Company prior to the Closing (except to the
extent that the exercise of any such cause of action, right or claim would
result in a breach or violation of any representation, warranty or covenant of
the Stockholders included in this Agreement without giving effect to knowledge,
materiality or Material Adverse Effect exceptions or references) or (ii) under
any Buyer Agreement by reason of the failure of BPB or its Affiliates to perform
its obligations thereunder.
Section 8.6. Covenants of BPB. During the period from the date of this
----------------
Agreement and continuing through the Closing Date, except as required by
Applicable Law or with the prior written consent of the Stockholders'
Representatives, BPB and BPIM shall not take any action, or fail to take any
action, that would, or could reasonably be expected to (i) result in any of BPB
or BPIM's representations and warranties set forth in this Agreement being or
becoming untrue in any material respect; (ii) result in any of the conditions to
the Closing set forth in Article IX not being satisfied; (iii) result in a
material violation of any provision of this Agreement; or (iv) adversely affect
or materially delay the receipt of any of the requisite regulatory approvals.
Prior to the fifth anniversary of the Closing Date, BPB shall not cause the
Company to change its name to any name that does not include the word
"Westfield."
Section 8.7. Access; Certain Communications. Between the date of this
------------------------------
Agreement and the Closing Date, subject to Applicable Laws relating to the
exchange of information, the Company and the Stockholders shall afford to BPB
and BPIM and its authorized agents and representatives, BPB and BPIM shall
afford to the Stockholders and their respective authorized agents and
representatives complete access, upon reasonable notice and during normal
business hours, to contracts, documents and information of or relating to the
assets, liabilities, business, operations, personnel and other aspects of the
business of the Company and of BPB and BPIM, respectively. The Company shall,
and the Stockholders shall cause the Company and its personnel to, and BPB and
BPIM shall cause their respective personnel to, provide assistance to BPB and
BPIM, on the one hand,
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or the Company and the Stockholders, on the other hand, as the case may be, in
the investigation of matters relating to this transaction; provided, however,
-------- -------
that the investigation shall be conducted in a manner which does not
unreasonably interfere with normal operations, customers and employee relations.
No investigation pursuant to this Section 8.7 or otherwise shall affect or limit
the representations and warranties set forth herein.
Section 8.8. Regulatory Matters; Third Party Consents.
----------------------------------------
(a) The Company and the Stockholders, on the one hand, and BPB and
BPIM, on the other hand, shall cooperate with each other and use all reasonable
efforts promptly to prepare and file all necessary documentation, to effect all
applications, notices, petitions and filings, and to obtain as promptly as
practicable all permits, consents, approvals, waivers and authorizations of all
third parties and Governmental Entities which are necessary to consummate the
transactions contemplated by this Agreement (it being understood that the
Stockholders shall be responsible for obtaining all such approvals, waivers and
consents from such parties with whom the Company is in contractual privity
including all investment advisory clientele). If any required consent of or
waiver by any third party (excluding any Governmental Authority and consents of
clients under investment advisory agreements) is not obtained prior to the
Closing, or if the assignment of any Company Contract (other than an investment
advisory agreement) would be ineffective or would adversely affect any material
rights or benefits thereunder so that BPB would not in fact receive all such
rights and benefits, the parties, each without cost, expense or liability to the
other (except as provided in Article X hereof), shall cooperate in good faith to
seek, if possible, an alternative arrangement to achieve the economic results
intended. BPB and the Stockholders' Representatives will have the right to
review in advance, and will consult with the other on, in each case subject to
Applicable Laws relating to the exchange of information, all the information
relating to BPB or the Company, as the case may be, and any of their respective
Affiliates, which appear in any filing made with, or written materials submitted
to, any third party or any Governmental Authority in connection with the
transactions contemplated by this Agreement.
(b) BPB and BPIM, on the one hand, and the Company and the
Stockholders, on the other hand, shall promptly advise each other upon receiving
any communication from any Governmental Authority whose consent or approval is
required for consummation of the transactions contemplated by this Agreement
which causes such party to believe that there is a reasonable likelihood that
any requisite regulatory approval will not be obtained or that the receipt of
any such approval will be materially delayed.
Section 8.9. Further Assurances. On and after the Closing Date, the
------------------
Stockholders shall give such further assistance to BPB and the Surviving
Corporation, and BPB and the Surviving Corporation shall give such further
assistance to the Stockholders, and each shall execute, acknowledge, file and
deliver all such instruments, including
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without limitation the Articles of Merger, and take such further action, as may
be reasonably necessary and appropriate effectively to consummate the
transactions contemplated hereby and to vest in the BPB full, legal and
equitable title to the Shares.
Section 8.10. Insurance. The Company will, and the Stockholders will
---------
cause the Company to, maintain in effect until and including the Closing Date
all casualty and public liability policies maintained by the Company on the date
hereof relating to the Operating Sites and the other Company Assets, or will
procure comparable replacement policies and maintain such replacement policies
in effect until and including the Closing Date.
Section 8.11. Notification of Certain Matters. Each party shall give
-------------------------------
prompt notice to the other parties hereto of (i) the occurrence, or failure to
occur, of any event or existence of any condition that has caused or could
reasonably be expected to cause any of such party's representations or
warranties contained in this Agreement to be untrue or inaccurate in any
material respect at any time after the date of this Agreement, up to and
including the Closing Date, and (ii) any failure on such party's part to comply
with or satisfy, in any material respect, any covenant, condition or agreement
to be complied with or satisfied by it under this Agreement.
Section 8.12 Maintenance of Records.
----------------------
(a) Through the Closing Date, the Company will, and the Stockholders
will cause the Company, to maintain the Records in the same manner and with the
same care that the Records have been maintained prior to the execution of this
Agreement. From and after the Closing Date, each of the parties shall permit the
other parties hereto reasonable access to any applicable Records in its
possession relating to matters arising on or before the Closing Date and
reasonably necessary in connection with any claim, action, litigation or other
proceeding involving the party requesting access to such Records or in
connection with any legal obligation owed by such party to any present or former
customer of the Company.
(b) For a period of six years from the Closing Date, none of BPB, the
Surviving Corporation or any Stockholder shall dispose of or destroy any
business records or files relating to Taxes or Tax Returns pertaining to the
Company, and no Stockholder shall dispose of or destroy any such records without
first offering to turn over possession thereof by written notice to BPB at least
30 days prior to the proposed date of such disposition or destruction.
Section 8.13. Compliance with Section 15(f) of the 1940 Act by the BPB.
--------------------------------------------------------
Each of BPB and its Affiliates shall conduct its respective business so as to
assure that, insofar as is within its control, each of the conditions of Section
15(f) of the Investment Company Act with respect to each Investment Company
shall be satisfied.
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Section 8.14. Company Distribution. Following the date of this Agreement
--------------------
and at such time prior to Closing as the Stockholders' Representatives deem
appropriate, the Stockholders' Representatives shall determine (in terms of
participants and relative amounts, in a manner consistent with the past
practices of the Company), the persons entitled to any payment in respect of the
amount (if any) by which the amount obtained by subtracting Current Liabilities
from Current Assets exceeds $650,000, and, subject to Section 9.1(j), the
Company shall be entitled to make such payments.
Section 8.15. Non-Competition. Each Stockholder agrees that for five
---------------
years after the Closing, he or she will not, without the prior written consent
of BPB, directly or indirectly request, induce or attempt to influence any
clients or customers of the Company, the Surviving Corporation or any of their
Affiliates to limit, curtail or cancel its business with the Company, the
Surviving Corporation or any of their Affiliates or solicit such party for such
business or request, induce or attempt to influence any officer, director,
employee, consultant, agent or representative of the Company, the Surviving
Corporation or any of their Affiliates to terminate his employment or business
relationship with the Company, the Surviving Corporation or any of their
Affiliates or commit any act that, if committed by such Stockholder, would
constitute a breach of any provision hereof. The provisions of this Section
8.15 as they relate to any Stockholder shall be replaced and superseded by any
provisions relating to competition and solicitation contained in any agreement
referred in Section 9.1(f) hereof entered into by such Stockholder.
Section 8.16 No Solicitation or Acceptance of Other Offers. Prior to the
---------------------------------------------
earlier of termination of this Agreement by BPB or October 31, 1997, neither the
Company nor any Stockholder, will, directly or indirectly, solicit, encourage,
assist, initiate discussions or engage in negotiations with, provide any
information to, or enter into or consummate any agreement or transaction with,
any person or persons, other than BPB, BPIM and any respective Affiliates,
concerning the acquisition or possible acquisition of the Company, all or any
portion of the Company Assets or all or any portion of the Shares, except for
the sale of assets in the ordinary course of business of the Company consistent
with the terms of this Agreement.
Section 8.17 Pooling Accounting Treatment. Each of BPB, BPIM, the
----------------------------
Company and the Stockholders agrees not to take any action that to its or their
knowledge could reasonably be expected to adversely affect the ability of BPB to
treat the transaction contemplated by this Agreement as a pooling of interests.
Section 8.18 Listing of BPB Shares. BPB shall use its reasonable best
---------------------
efforts to cause the BPB Shares to be issued under this Agreement to be approved
for quotation, upon official notice of issuance, on the Nasdaq Small Cap Market.
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Section 8.19. Escrow Agreement. On or prior to the Closing Date, the
----------------
Stockholders and BPB agree to enter into, execute and deliver to each other an
Escrow Agreement in substantially the form of Exhibit H hereto.
Section 8.20. Certain Agreements. The Company and the Stockholders agree
------------------
to terminate, effective as of Closing, each of (i) the Deferred Compensation
Agreement dated January 29, 1991 by and between the Company and C. Michael
Hazard, (ii) the Voting Agreement entered into as of July 31, 1992 by and among
the Company, Deborah Pratt, Michael Chapman and Arthur Bauernfeind and (iii) the
Amended and Restated Stock Transfer Agreement dated as of July 31, 1992 among
the Company and certain stockholders of the Company.
Section 8.21. Affiliate Letters. To ensure that the business combination
-----------------
to be effected by this Agreement and the transactions contemplated hereby will
be accounted for as a pooling of interests, on or prior to the Closing Date each
individual Stockholder agrees to execute and deliver to BPB a letter in the form
of Exhibit F hereto and to comply and abide with the agreements of the
Stockholder contained therein.
ARTICLE IX
CONDITIONS TO CLOSING
Section 9.1. Conditions to the BPB's and BPIM's Obligations. The
----------------------------------------------
obligations of BPB and BPIM to effect the Closing shall be subject to the
following additional conditions which may be waived in writing by BPB:
(a) The representations and warranties of the Company and the
Stockholders set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date; provided, however,
-------- -------
that for purposes of determining the satisfaction of the condition contained in
this Section 9.1(a), (i) no effect shall be given to any exception or reference
in such representations and warranties relating to knowledge, materiality or a
Material Adverse Effect; and (ii) such representations and warranties shall be
deemed to be true and correct in all material respects only if the failure or
failures of such representations and warranties to be so true and correct
(without giving effect to such knowledge, materiality and Material Adverse
Effect exceptions and references) do not represent in the aggregate a Material
Adverse Effect.
(b) The Company and the Stockholders shall have performed and
complied in all material respects with all agreements, covenants, obligations
and conditions
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required by this Agreement to be performed or complied with by the Company and
the Stockholders at or prior to the Closing Date;
(c) The Company and the Stockholders' Representatives on behalf of
each Stockholder shall have delivered to BPB a certificate dated as of the
Closing Date, confirming the satisfaction of the conditions contained in
paragraphs (a) and (b) of this Section 9.1;
(d) BPB shall have received the opinion of Ropes & Gray, special
counsel to the Company and the Stockholders, dated the Closing Date,
substantially in the form attached hereto as Exhibit C;
(e) No requisite regulatory approval shall impose any term, condition
or restriction upon BPB, BPIM or any of their respective Affiliates that BPB or
BPIM reasonably determines would so materially adversely affect the economic or
business benefits of the transactions contemplated by this Agreement to BPB or
BPIM as to render inadvisable in the reasonable good faith judgment of BPB the
consummation of the transactions contemplated hereby;
(f) The employment agreements among BPB the Company and each of
Messrs. Hazard, Bauernfeind, Chapman, Demirjian and Muggia shall have been
entered into and shall be in full force and effect except to the extent that the
failure of any such agreement to be in full force and effect is attributable to
the death of any such individual;
(g) Since December 31, 1996, no event has occurred which has had or
could reasonably be expected to have, individually or in the aggregate with any
other event, a Material Adverse Effect provided, however, that (i) a decline in
the value of assets under management by the Company or any Pooled Product (or
any reduction in the base revenues of the Company resulting therefrom) resulting
from a general decline in securities prices shall not constitute a Material
Adverse Effect and (ii) the failure of any client of the Company or any Pooled
Product to consent to the transactions contemplated hereby or the termination by
any such client of its relationship with the Company or any Pooled Product or
the giving by any such client of any notice of its intention to effect such a
termination shall not constitute a Material Adverse Effect (it being understood
that Section 9.1(i) shall be the only closing condition applicable to the
matters discussed in this clause (ii));
(h) Each Stockholder shall have executed and delivered to the
Stockholders' Representatives and BPB the Stockholders' Representatives Power of
Attorney and the Escrow Agreement, each of which shall remain in full force and
effect;
(i) (1) The Company or the Stockholders shall have obtained from
clients in accordance with Section 8.2 hereof either (A) written consents or (B)
implied
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consents insofar as they relate to any investment advisory agreement included on
Schedule 8.2(c) or (2) the Company shall have entered into new investment
advisory agreements with clients in accordance with Section 8.2 hereof; such
consents and new agreements representing in the aggregate Adjusted Advisory
Revenues equal to not less than 80% of the Advisory Revenue Threshold;
(j) The amount obtained by subtracting Current Liabilities from
Current Assets as of a date not more than three business days prior to the
Closing Date shall equal or exceed $650,000;
(k) BPB shall have received opinions from KPMG Peat Marwick LLP and
Baril & Smith Certified Public Accountants, Inc. ("Baril & Smith") independent
accountants for BPB and the Company, respectively, confirming each of their
respective opinions attached hereto as Exhibits I and J as if the same had been
issued and delivered to BPB as of the Closing Date; and
(l) BPB shall have received copies of the audited statements of
income, changes in stockholders equity and cash flows for the fiscal year 1995,
together with the related notes thereto, accompanied by the audit report of
Baril & Smith, independent accountants with respect to the Company, and such
financial statements shall not differ materially from the unaudited financial
statements of the Company relating to the same period previously supplied to BPB
and referenced in Section 6.4.
Section 9.2. Conditions to the Company's and the Stockholders'
-------------------------------------------------
Obligations. The obligation of the Company and Stockholders to effect the
- -----------
Closing shall be subject to the following additional conditions which may be
waived in writing by the Company or Stockholders' Representatives:
(a) The representations and warranties of BPB and the BPIM contained
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement and (except to the extent that such representations and
warranties speak to an earlier date) on the Closing Date with the same effect as
though made at such time; provided, however, that for purposes of determining
the satisfaction of the condition contained in this Section 9.2(a), (i) no
effect shall be given to any exception or reference in such representations and
warranties relating to knowledge, materiality or a Buyer's Material Adverse
Effect and (ii) such representations and warranties shall be deemed true and
correct in all material respects only if the failure or failures of such
representations and warranties to be so true and correct (without giving effect
to such knowledge, materiality and Buyer's Material Adverse Effect exceptions
and references) do not represent in the aggregate a Buyer's Material Adverse
Effect;
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(b) BPB and BPIM shall have performed and complied in all material
respects with all covenants, obligations and conditions required by this
Agreement to be performed or complied with by them at or prior to the Closing
Date;
(c) BPB and BPIM shall have delivered to the Stockholders'
Representatives a certificate, dated as of the Closing Date, from the President
of BPB and BPIM, respectively, on behalf of BPB and BPIM in such individual's
capacity as an officer of BPB and BPIM and not as an individual, confirming the
satisfaction of the conditions contained in paragraphs (a) and (b) of this
Section 9.2;
(d) BPB shall have executed and delivered to the Stockholders'
Representatives a registration rights agreement (the "Registration Rights
Agreement") in substantially the form attached hereto as Exhibit B;
(e) The Stockholders' Representatives shall have received the opinion
or opinions of Skadden, Arps, Slate, Meagher & Flom LLP and/or Goodwin, Procter
and Hoar, special counsel to BPB, dated the Closing Date, covering the matters
set forth in Exhibit D;
(f) (1) The Company and the Stockholders shall have obtained from
clients in accordance with Section 8.2 hereof either (A) written consents or (B)
implied consents insofar as they relate to any investment advisory agreement
included on Schedule 8.2(c) or (2) the Company shall have entered into new
investment advisory agreements with clients in accordance with Section 8.2
hereof; such consents and new agreements representing in the aggregate Adjusted
Advisory Revenues equal to not less than 70% of the Advisory Revenue Threshold;
(g) The Stockholders shall have received a copy of the letters
referred to in Section 9.1(k); and
(h) The Stockholders shall have received an opinion of Ropes & Gray,
special counsel to the Company and the Stockholders, or of such other nationally
recognized law firm reasonably acceptable to the Stockholders, in form and
substance reasonably satisfactory to Stockholders, to the effect that the
transaction contemplated by this Agreement qualifies as a reorganization within
the meaning of Section 368(a) of the Code.
Section 9.3. Mutual Conditions. The obligations of each of the Company,
-----------------
the Stockholders, BPB and BPIM to effect the Closing shall be subject to the
following conditions:
(a) No order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation
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<PAGE>
of the transactions contemplated by this Agreement shall be in effect. No
proceeding initiated by any Governmental Authority seeking an injunction of the
transaction contemplated hereby shall be pending. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered, promulgated or
enforced by any Governmental Authority which prohibits, restricts or makes
illegal consummation of the transactions contemplated hereby;
(b) All regulatory approvals required to consummate the transactions
contemplated hereby shall have been obtained and shall remain in full force and
effect and all statutory waiting periods in respect thereof shall have expired;
and
(c) In respect of the notifications of BPB, the Company and any
Stockholder pursuant to the HSR Act, the applicable waiting period and any
extensions thereof shall have expired or been terminated.
ARTICLE X
INDEMNIFICATION
Section 10.1. Obligations of the Stockholders.
-------------------------------
(a) From and after the Closing Date, the Stockholders hereby agree
jointly and severally to indemnify, defend and hold harmless BPB and its
employees, officers, partners and other Affiliates from and against any and all
Losses which any of them may suffer, incur or sustain arising out of,
attributable to, or resulting from: (i) any inaccuracy in or breach of any of
the representations or warranties of the Stockholders made in or pursuant to
this Agreement other than those contained in Articles IV or V (it being agreed
that solely for purposes of establishing whether any matter is indemnifiable
pursuant to this clause (i), the accuracy of the representations and warranties
made by the Stockholders shall be determined without giving effect to the
qualifications to such representations and warranties concerning knowledge and
Material Adverse Effect); and (ii) any breach or nonperformance of any of the
covenants or agreements made by the Stockholders in or pursuant to this
Agreement;
(b) From and after the Closing Date, each of C. Michael Hazard,
Michael J. Chapman and Arthur J. Bauernfeind hereby agree jointly and severally
to indemnify, defend and hold harmless BPB and its employees, officers, partners
and other Affiliates from and against any and all Losses which any of them may
suffer, incur or sustain arising out of, attributable to, or resulting from any
inaccuracy in or breach of any of the representations or warranties of any of
the Stockholders made in or pursuant to Articles IV and V of this Agreement (it
being agreed that solely for purposes of establishing whether any matter is
indemnifiable pursuant to this Section 10.1(b), the
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<PAGE>
accuracy of the representations and warranties made by any of the Stockholders
shall be determined without giving effect to the qualifications to such
representations and warranties concerning knowledge and Material Adverse
Effect); and
(c) From and after the Closing Date, each of Jill A. Roeting, David
Boyce, William A. Muggia, Bruce R. Watts, Jr., Stephen C. Demirjian and Karen
Agnew for themselves individually and not jointly hereby agree to indemnify,
defend and hold harmless BPB and its employees, officers, partners and other
Affiliates from and against any and all Losses which any of them may suffer,
incur or sustain arising out of, attributable to, or resulting from any
inaccuracy in or breach of any of the representations or warranties of any of
such Stockholder made in or pursuant to Article V of this Agreement (it being
agreed that solely for purposes of establishing whether any matter is
indemnifiable pursuant to this Section 10.1(c), the accuracy of the
representations and warranties made by any of such Stockholder shall be
determined without giving effect to the qualifications to such representations
and warranties concerning knowledge and Material Adverse Effect.
Section 10.2. Obligations of BPB. From and after the Closing Date, BPB
------------------
shall indemnify, defend and hold harmless the Stockholders from and against any
Losses which any of them may suffer, incur or sustain arising out of,
attributable to or resulting from any inaccuracy in or breach or nonperformance
of any of the representations, warranties, covenants or agreements made by BPB
or BPIM in or pursuant to this Agreement.
Section 10.3. Procedure.
---------
(a) Notice of Third Party Claims. Any Indemnified Party seeking
----------------------------
indemnification for any Loss or potential Loss arising from a claim asserted by
a third party against the Indemnified Party (a "Third Party Claim") shall give
written notice to the Indemnifying Party. Written notice to the Indemnifying
Party of the existence of a Third Party Claim shall be given by the Indemnified
Party within 30 days after its receipt of a written assertion of liability from
the third party; provided, however, that the Indemnified Party shall not be
-------- -------
foreclosed from seeking indemnification pursuant to this Article X by any
failure to provide timely notice of the existence of a Third Party Claim to the
Indemnifying Party except and only to the extent that the Indemnifying Party
actually incurs an incremental out-of-pocket expense or otherwise has been
materially damaged or prejudiced as a result of such delay.
(b) Defense. Except as otherwise provided herein, the Indemnifying
-------
Party may elect to compromise or defend, at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel (which counsel shall be
reasonably satisfactory to the Indemnified Party), any Third Party Claim. If
the Indemnifying Party elects to compromise or defend such Third Party Claim, it
shall, within 30 days after receiving notice of the Third Party Claim, notify
the Indemnified Party of its intent to do so, and the
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Indemnified Party shall cooperate, at the expense of the Indemnifying Party, in
the compromise of, or defense against, such Third Party Claim. If the
Indemnifying Party elects not to compromise or defend against the Third Party
Claim, or fails to notify the Indemnified Party of its election to do so as
herein provided, or otherwise abandons the defense of such Third Party Claim,
(i) the Indemnified Party may pay (without prejudice of any of its rights as
against the Indemnifying Party), compromise or defend such Third Party Claim and
(ii) the costs and expenses of the Indemnified Party incurred in connection
therewith shall be indemnifiable by the Indemnifying Party pursuant to the terms
of this Agreement. Notwithstanding anything to the contrary contained herein, in
connection with any Third Party Claim in which the Indemnified Party shall
reasonably conclude, based upon the written advice of its counsel, that (x)
there is a conflict of interest between the Indemnifying Party and the
Indemnified Party in the conduct of the defense of such Third Party Claim or (y)
there are specific defenses available to the Indemnified Party which are
different from or additional to those available to the Indemnifying Party and
which could be materially adverse to the Indemnifying Party, then the
Indemnified Party shall have the right to assume and direct the defense and
compromise of such Third Party Claim. In such an event, the Indemnifying Party
shall indemnify the Indemnified Party for the fees and disbursements of counsel
to each of the Indemnifying Party and the Indemnified Party. Notwithstanding the
foregoing, neither the Indemnifying Party nor the Indemnified Party may settle
or compromise any claim (unless the sole relief payable to a third party in
respect of such Third Party Claim is monetary damages that are paid in full by
the party settling or compromising such claim) over the objection of the other;
provided, however, that consent to settlement or compromise shall not be
- -------- -------
unreasonably withheld. In any event, except as otherwise provided herein, the
Indemnified Party and the Indemnifying Party may each participate, at its own
expense, in the defense of such Third Party Claim. If the Indemnifying Party
chooses to defend any claim, the Indemnified Party shall make available to the
Indemnifying Party any personnel or any books, records or other documents within
its control that are reasonably necessary or appropriate for such defense,
subject to the receipt of appropriate confidentiality agreements.
Notwithstanding anything to the contrary contained in this paragraph (b), in the
event prompt action is required with respect to the defense of a Third Party
Claim, the Indemnified Party shall, subject to the terms and conditions of this
Article X, have the right to assume the defense of such Third Party Claim;
provided, however, that in the event that the Indemnifying Party subsequently
- -------- -------
elects to assume the defense of such Third Party Claim, then the provisions set
forth in this paragraph (b) shall be applicable and the Indemnifying Party
shall, subject to the terms and conditions of this Article X, indemnify the
Indemnified Party for any costs and expenses incurred by the Indemnified Party
prior to the date the Indemnifying Party assumes control of such Third Party
Claim.
(c) Settlement. If a settlement offer solely for money damages is
----------
made by a third party claimant, and the Indemnifying Party notifies the
Indemnified Party in writing of the Indemnifying Party's willingness to accept
the settlement offer and pay the amount called for by such offer, and the
Indemnified Party declines to accept such offer,
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<PAGE>
the Indemnified Party may continue to contest such claim, free of any
participation by the Indemnifying Party, and the amount of any ultimate
liability with respect to such Indemnifiable Claim that the Indemnifying Party
has an obligation to indemnify the Indemnified Party for hereunder shall be
limited to the lesser of (A) the amount of the settlement offer that the
Indemnified Party declined to accept plus the costs and expenses of the
Indemnified Party prior to the date the Indemnifying Party notifies the
Indemnified Party of the Indemnifying Party's willingness to settle or
compromise such Third Party Claim and (B) the aggregate Losses of the
Indemnified Party with respect to such claim.
(d) Miscellaneous. The procedures set forth in this Section 10.3
-------------
shall apply solely with respect to Third Party Claims and shall not be deemed to
apply to, or otherwise affect or limit, an Indemnified Party's rights under this
Article X with respect to any claim other than a Third Party Claim.
Section 10.4. Notice of Non-Third Party Claims. Any Indemnified Party
--------------------------------
seeking indemnification for any Loss or potential Loss arising from a claim
asserted by any party to this Agreement against the Indemnified Party (a "Non-
Third Party Claim"), including any claim by an Indemnified Party for
indemnification pursuant to Section 10.3, shall give written notice to the
Indemnifying Party. Written notice to the Indemnifying Party of the existence
of a Non-Third Party Claim shall be given by the Indemnified Party promptly
after discovery of the potential claim; provided, however, that the Indemnified
-------- -------
Party shall not be foreclosed from seeking indemnification pursuant to this
Article X by any failure to provide timely notice of the existence of a Non-
Third Party Claim to the Indemnifying Party except and only to the extent that
the Indemnifying Party actually incurs an incremental out-of-pocket expense or
otherwise has been materially damaged or prejudiced as a result of such delay.
Section 10.5. Survival of Indemnity. Any matter as to which a claim has
---------------------
been asserted in writing prior to, but that is pending or unresolved at the end
of, the survival periods set forth in Section 12.3 hereof shall continue to be
covered by this Article X notwithstanding any applicable statute of limitations
(which the parties hereby waive) or the expiration dates set forth in Section
12.3 hereof until such matter is finally terminated or otherwise resolved by the
parties pursuant to the terms of this Agreement or by a court of competent
jurisdiction and until any amounts payable hereunder are finally determined and
paid.
Section 10.6. Minimum Indemnification Obligation. Except with respect to
----------------------------------
claims based upon fraud by any Stockholder against BPB or its Affiliates in
connection with the representations, warranties or covenants of the Stockholders
contained in this Agreement or any of the transactions contemplated by this
Agreement, no Stockholder shall be required to provide any indemnification under
the provisions of Article X of this Agreement unless and until the aggregate
Losses of all parties to whom the Stockholders owe such obligations hereunder
exceed $50,000, whereupon the Indemnified Parties shall
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be entitled to indemnification for the aggregate cumulative amount of all Losses
in excess of such amount.
Section 10.7. Claim Settlement Procedures.
---------------------------
(a) Notice. In the event of an indemnification claim by BPB or any
------
Stockholder (a "Claim"), the Indemnified Party shall provide notice (a "Notice")
to the Indemnifying Party, setting forth in reasonable detail the basis of such
Claim. The amount of any such claim shall include a reasonable projection by
the Indemnified Party of the costs associated therewith.
(b) Disputed Claims. If the Indemnifying Party elects to dispute
---------------
such Notice, they shall deliver to the Indemnified Party, within ten business
days after delivery of the Notice, a written notice of their intent to dispute
the Claim (a "Notice of Contention"), in which case such Claim shall be a
"Disputed Claim".
(c) Proceedings. In the event of a Disputed Claim, BPB and the
-----------
Stockholders' Representatives in respect of any claim arising out of Section
10.1(a) or (b) or BPB and the respective Stockholder or Stockholders in respect
of any claim arising out of Section 10.1(c) shall in good faith negotiate to
settle such Disputed Claim. If no resolution is reached within 10 business days
after delivery of the Notice of Contention, BPB and the Stockholders'
Representatives or the Stockholder, as the case may be, shall jointly commence
an arbitration proceeding (a "Proceeding") within 20 business days after the
date of delivery of the Notice of Contention for the purpose of resolving the
Disputed Claim. Any such arbitration shall be before an arbitrator (the
"Arbitrator") (i) who is a member of the American Arbitration Association
selected in accordance with the proceedings of the American Arbitration
Association, and (ii) who shall resolve the Disputed Claim in Boston,
Massachusetts in accordance with the rules of the American Arbitration
Association. Arbitration costs and expenses shall be borne by the Indemnified
Party or the Indemnifying Party as determined by the Arbitrator.
(d) Resolved Claims. If the Indemnifying Party fails to give Notice
---------------
of Contention to the Indemnified Party within the required ten business-day
period, or if a Disputed Claim has subsequently been settled or determined by
the parties or has been resolved by arbitration (each, a "Resolved Claim"), then
the amount set forth in such Notice, settlement or arbitration award shall
represent the Losses to be indemnified by the Indemnifying Party. A statement
in respect of each Resolved Claim shall be prepared by BPB and the Stockholders'
Representatives showing the amount of Losses to be indemnified by each
Indemnifying Party, with a copy of such statement signed by BPB and the
Stockholders' Representatives to be delivered to the Escrow Agent. Any amounts
paid by an Indemnifying Party to a third party pursuant to Section 10.3(b) in
respect of a Third Party Claim shall be shown on such statement and shall reduce
the amount of any Resolved Claims against such Indemnifying Party.
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(e) Satisfaction. (i) The Escrow Shares and other Escrow Materials
------------
held by the Escrow Agent shall be delivered in accordance with the Escrow
Agreement on the date 10 days after the earlier to occur of (A) the date that a
notice signed by BPB and the Stockholders' Representatives is delivered to the
Escrow Agent to the effect that the survival periods set forth in Section 12.3
hereof have expired and no Claim has been made against any Stockholder, (B) the
date that a notice signed by BPB and the Stockholders' Representatives is
delivered to the Escrow Agent to the effect that the survival periods set forth
in Section 12.3 hereof have expired and each Claim has become a Resolved Claim
or (C) the date that a notice signed by BPB and the Stockholders'
Representatives is delivered to the Escrow Agent to the effect that the survival
periods set forth in Section 12.3 hereof have expired and each Claim against BPB
has become a Resolved Claim and that the amount of the Resolved Claims against
each Stockholder, as adjusted for payments in respect of Third Party Claims as
set forth in Section 10.7(d), exceeds the amount of each such Stockholder's
Resolved Claims against BPB, as so adjusted (the "Escrow Termination Date"),
such notice to state the value of Escrow Material to be delivered to BPB and/or
to each Stockholder. The value of Escrow Material to be delivered to a
Stockholder after the Escrow Termination Date shall be determined as follows:
(A) the amount of all Resolved Claims against the Stockholder shall be offset by
the amount of all Resolved Claims against BPB in respect of such Stockholder, in
each case as previously set forth in the statements referred to in Section
10.7(d) and as adjusted for payments in respect of Third Party Claims as set
forth in Section 10.7(d); (B) in the event that the amount of such Resolved
Claims as so adjusted against BPB equals or exceeds the amount of such Resolved
Claims as so adjusted against the Stockholder, the full amount of the Escrow
Material held by the Escrow Agent shall be delivered to the Stockholder; (C) in
the event that the amount of such Resolved Claims as so adjusted against the
Stockholder exceeds the amount of such Resolved Claims as so adjusted against
BPB in respect of such Stockholder, Escrow Material having a value equal to the
difference between (x) the total value of Escrow Material held on behalf of such
Stockholder by the Escrow Agent and (y) the amount by which such Resolved Claims
against the Stockholder exceed such Resolved Claims as so adjusted against BPB
in respect of such Stockholder shall be delivered to the Stockholder. All
Escrow Material not required to be distributed to the Stockholders by the Escrow
Agent on the Escrow Termination Date as set forth above in this Section
10.7(e)(i) shall be delivered by the Escrow Agent to BPB. Notwithstanding the
foregoing, from time to time after termination of the survival periods set forth
in Section 12.3 and prior to the Escrow Termination Date, BPB and the
Stockholders' Representatives shall determine in good faith based on the details
of any Claim provided in the Notice of such Claim and on the statements required
to be prepared pursuant to Section 10.7(d) whether the amount of a Stockholder's
potential liabilities to BPB could not reasonably exceed the value of the Escrow
Material in such Stockholder's account, on the one hand, and/or whether the
amount of such Stockholder's liability to BPB could not reasonably be less than
a certain amount, on the other hand, and upon so determining BPB and the
Stockholders' Representatives shall by notice signed by BPB and the
Stockholders'
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Representatives instruct the Escrow Agent to distribute any such excess Escrow
Material to the Stockholder and/or any such minimum amount to BPB, in each case
in accordance with the terms of the Escrow Agreement, and the remainder of the
Escrow Material shall continue to be held by the Escrow Agent under the Escrow
Agreement until such time as it is required to be distributed pursuant to this
Section 10.7(e) and the Escrow Agreement. For purpose of this Section 10.7,
Escrow Shares shall be deemed to have a value of $6 1/8 per share. In making
distributions of Escrow Material, any distribution required to be made to
Stockholders shall be satisfied first from Escrow Material other than Escrow
Shares and, after all such other Escrow Material has been distributed to the
Stockholder, from Escrow Shares.
(ii) Upon the last Claim becoming a Resolved Claim, in the event that
the amount of Resolved Claims against a Stockholder shall exceed the amount of
such Stockholder's Resolved Claims against BPB by an amount that exceeds the
value of the Escrow Material (with Escrow Shares valued at $6 1/8 per Escrow
Share) allocable to such Stockholder delivered to BPB pursuant to Section
10.7(e), such Stockholder shall be liable to BPB for the amount of such excess
Losses, which liability shall be settled by the return by Stockholder to BPB of
BPB Shares valued at $6 per share or, in the event that the Stockholder shall no
longer own sufficient BPB Shares to discharge such liability, in cash.
Notwithstanding anything to the contrary contained herein, in no event shall any
Stockholder's liability in respect of indemnification obligations pursuant to
this Article X exceed the sum of (A) all Escrow Material allocable to such
Stockholder then held under the Escrow Agreement or at any time distributed by
the Escrow Agent and (B) an aggregate amount equal to the product of (i) 10% of
the Purchase Shares delivered to such Stockholder and (ii) $6 1/8 per share.
Section 10.8. Subrogation. Any Indemnifying Party shall be subrogated to
-----------
any right of action which the Indemnified Party may have against any other
person with respect to any matter giving rise to a claim for indemnification
hereunder, such right of subrogation being limited to the amount of such claim
actually paid by the Indemnifying Party to the Indemnified Party or otherwise
borne by the Indemnifying Party.
Section 10.9. Satisfaction of Indemnification Obligations. The amount
-------------------------------------------
which any Indemnifying Party is or may be required to pay any Indemnified Party
(including through distribution of the Escrow Shares pursuant to the terms of
the Escrow Agreement) pursuant to this Article X shall be satisfied exclusively
pursuant to the procedures set forth in this Article X and in the Escrow
Agreement.
Section 10.10. Exclusive Remedy. This Article X and the Escrow Agreement
----------------
shall provide the sole and exclusive remedy for any and all Losses with respect
to any inaccuracy in or breach of the representations or warranties or breach or
nonperformance of any of the covenants or agreements made by any party in or
pursuant to this Agreement.
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ARTICLE XI
TAX MATTERS
Section 11.1. Tax Cooperation. The Stockholders, BPB and the Surviving
---------------
Corporation shall each: (a) cooperate in the preparation of any Tax Returns
which the other is responsible for preparing and filing pursuant to Section 11.2
hereunder; (b) cooperate fully in preparing for any audits of, or disputes with
Tax Authorities regarding, any Tax liability of the Company; (c) make available
to the other and to any Tax Authority, as reasonably requested, all information,
records, and documents relating to any Tax; (d) provide timely notice to the
other in writing of any written notice received concerning any pending or
threatened audits or assessments relating to any Tax liability of the Company;
and (e) furnish the other with copies of all correspondence received from any
Tax Authority in connection with any audit or information request with respect
to any Tax.
Section 11.2. Filing Responsibility.
---------------------
(a) The Stockholders shall prepare and file, or cause to be prepared
and filed, on a timely basis (in each case, at their own cost and expense and
consistent with past practice) all federal income Tax Returns relating to the
Company for taxable periods ending on or prior to the Closing Date. The
Stockholders shall be responsible for any federal income Taxes relating thereto.
(b) BPB shall prepare and file, or cause to be prepared and filed, on
a timely basis (in each case, at its sole cost and expense) all other Tax
Returns relating to the Company (or the Surviving Corporation), including Tax
Returns, if any, for the Straddle Period, as defined below.
(c) BPB and Stockholders shall make all necessary elections with the
relevant federal, state and local tax authorities to close the taxable year of
the Company at 11:59 p.m. Eastern Standard Time on the Closing Date. In any
case where applicable law does not permit such election to be made, for any
taxable period that includes (but does not end on) the Closing Date (a "Straddle
Period"), the Taxes of any Subsidiary of the Company for the Pre-Closing Period
shall be computed using an interim-closing-of-the-books method on the assumption
that such taxable period ended on and included the Closing Date, except that (i)
all standard deductions, exemptions, allowances, progressivity in rates and
other similar items shall be apportioned to the Pre-Closing Period on a per diem
basis and (ii) real, personal and intangible property Taxes of any Subsidiary of
the Company for any Straddle Period shall be apportioned among BPB and the
Stockholders in accordance with the principles under Section 164(d) of the Code.
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Section 11.3. Refunds or Credits. Refunds or credits of Taxes relating to
------------------
the Company shall be for the account of BPB and if received or utilized by the
Stockholders, shall be paid by the Stockholders to BPB within five Business Days
after the Stockholders receive such refunds or utilize such credits.
ARTICLE XII
TERMINATION/SURVIVAL
Section 12.1. Termination.
-----------
(a) This Agreement may be terminated at any time prior to the Closing
as follows:
(i) by the mutual written consent of BPB and the Stockholders'
Representatives;
(ii) by the Stockholders acting through the Stockholders'
Representatives or by BPB if circumstances that would entitle either to
invoke the failure of the condition set forth in Section 9.3(a) if the
Closing were to be scheduled for such time have existed for a period of not
less than 15 consecutive days as of the date of termination;
(iii) by the Stockholders acting through the Stockholders'
Representatives, on the one hand, or by BPB on the other hand, if there
shall have been a breach of any of the representations and warranties set
forth in this Agreement on the part of the other party, which breach would
entitle the party receiving such representation or warranty not to
consummate the transactions contemplated hereby under Section 9.1(a) (in
the case of a breach of representation or warranty by the Stockholders) or
Section 9.2(a) (in the case of a breach of representation or warranty by
BPB) and which breach by its nature cannot be cured prior to the date set
forth in Section 12.1(a)(v);
(iv) by the Stockholders acting through the Stockholders'
Representatives, on the one hand, or by BPB, on the other hand, if there
shall have been a material breach of any of the covenants or agreements set
forth in this Agreement on the part of the other party, which breach shall
not have been cured within 20 Business Days following receipt by the
breaching party of written notice of such breach from the Stockholders'
Representatives or by BPB, as the case may be; and
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(v) at the election of BPB or the Stockholders' Representatives,
if the Closing Date shall not be on or before December 1, 1997.
Notwithstanding Section 12.1(a)(ii)-(v) hereof, a party who is in
material breach of any of its obligations or representations and warranties
hereunder shall not have the right to terminate this Agreement pursuant to
Section 12.1(a)(ii)-(v).
(b) The termination of this Agreement shall be effectuated by the
delivery by the party terminating this Agreement to the other party of a written
notice of such termination. If this Agreement so terminates, it shall become
null and void and have no further force or effect, except as provided in Section
12.2.
Section 12.2. Effect of Termination. In the event of termination of this
---------------------
Agreement as provided in Section 12.1, this Agreement shall forthwith become
void and have no effect except (i) the confidentiality provisions contained in
Section 8.3 shall survive any termination of this Agreement, and (ii)
notwithstanding anything to the contrary contained in this Agreement, no party
shall be relieved or released from any liabilities or damages arising out of its
willful breach of any provision of this Agreement.
Section 12.3. Survival of Representations and Warranties. Subject to
------------------------------------------
Section 10.5, the respective representations and warranties of the Stockholders
and BPB contained herein and in the certificates of the Stockholders and BPB to
be delivered at the Closing shall expire and be terminated and extinguished (i)
as to any breaches of representations and warranties that are subject to
resolution through the audit process, as of the date of completion of the audit
relating to the financial statements of BPB for the fiscal year ending December
31, 1997; and (ii) as to any breaches of representations and warranties that are
not subject to resolution through the audit process, as of the first anniversary
of the Effective Time. Following the appropriate expiration date for any
representation or warranty referred to in the previous sentence, subject to the
provisions of Section 10.5, no party shall have any liability whatsoever with
respect to any such referenced representation or warranty.
ARTICLE XII
MISCELLANEOUS
Section 13.1. Expenses.
--------
(a) Except as otherwise expressly provided herein, all fees and out-
of-pocket expenses of outside counsel, independent public accountants,
investment bankers, brokers, finders and other consultants shall be paid or
provided for by the party employing such person.
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<PAGE>
(b) Notwithstanding Section 13.1(a), the Company shall pay the
following costs and expenses of the transactions contemplated hereby:
(1) any third-party assignment penalties or premiums (whether
imposed in the form of fees, penalties, assessments, increased
rentals, loss of servicing income or otherwise) and, subject to
subsection 13.1(c) below, all other external costs incurred in
securing third party consents or transferring the Shares; and
(2) all sales, use, transfer, filing, recordation and similar
taxes and fees (including all real estate transfer taxes and
conveyance and recording fees, other than real estate or personal
property gains taxes), if any, and all stamp taxes, registration
taxes, duties or other charges, if any, imposed on or in connection
with the Merger pursuant to this Agreement.
(c) Notwithstanding anything to the contrary herein, the fees and
expenses of counsel to any Investment Companies or the investment advisors
thereto (other than the Company) and any proxy solicitation firms and the
expenses relating to the preparation, printing and mailing of proxy statements,
incurred in connection with the satisfaction of the obligations set forth in
Section 8.2(a) hereof shall be borne equally by the Company and BPB up to an
aggregate combined amount equal to $100,000, provided that any amount in excess
of $100,000 shall be borne exclusively by Company.
(d) Notwithstanding anything to the contrary herein, the fees and
expenses of Baril & Smith in connection with the preparation after the date
hereof of audited financial statements requested by BPB in order for the
transaction to meet the requirements for pooling of interests accounting shall
be borne by BPB, provided that such fees and expenses shall not exceed $10,000.
Section 13.2. Amendments; Extension; Waiver. Subject to compliance with
-----------------------------
applicable law, this Agreement may not be amended, altered or modified except by
written instrument executed by BPB, BPIM (if applicable), the Company (or the
Surviving Corporation, as the case may be) and the Stockholders' Representatives
on behalf of the Stockholders.
Section 13.3. Entire Agreement. This Agreement (including Schedules,
----------------
certificates and lists referred to herein, and any documents executed by the
parties simultaneously herewith or pursuant hereto) constitutes the entire
understanding and agreement of the parties hereto, except as provided herein,
and supersedes all prior agreements and understandings, written and oral, among
the parties with respect to the subject matter hereof.
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Section 13.4. Specific Performance; Injunctive Relief. Each party
---------------------------------------
understands and agrees that it will be irreparably damaged in the event this
Agreement is not specifically enforced. Each party, therefore, agrees that in
the event of a breach of any material provision of this Agreement, the aggrieved
party may elect to institute and prosecute proceedings in any court of competent
jurisdiction to enforce specific performance or to enjoin the continuing breach
of this Agreement. Such remedies shall, however, be cumulative and not
exclusive, and shall be in addition to any other remedy which a party may have.
Section 13.5. Interpretation. When a reference is made in this Agreement
--------------
to Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The phrases "the date of this Agreement," "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to the date set forth in the first paragraph of this Agreement.
Section 13.6. Severability. Any term or provision of this Agreement
------------
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
Section 13.7. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if (a) delivered in person, (b)
transmitted by telecopy (with confirmation), (c) mailed by certified or
registered mail (return receipt requested) or (d) delivered by an express
courier (with confirmation) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
If to BPB, BPIM or the Surviving Corporation:
Boston Private Bancorp., Inc.
Ten Post Office Square
Boston, MA 02109
Attention: Timothy L. Vaill
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With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, MA 02108
Telecopy: (617) 573-4822
Attention: Thomas A. DeCapo, Esq.
If to the Stockholders then to the Stockholders' Representatives:
C. Michael Hazard
Michael J. Chapman
Arthur J. Bauernfeind
c/o Westfield Capital Management Company, Inc.
One Financial Center
Boston, MA 02111
With a copy to:
Ropes & Gray
One International Place
Boston, MA 02110
Telecopy: (617) 951-7050
Attention: Gregory D. Sheehan, Esq.
Section 13.8. Binding Effect; Persons Benefiting; No Assignment. This
-------------------------------------------------
Agreement shall inure to the benefit of and be binding upon the parties hereto
and the respective heirs, legal representatives, estates, executors, successors
and permitted assigns of the parties and such persons. Nothing in this
Agreement is intended or shall be construed to confer upon any entity or person
other than the parties hereto and their respective heirs, legal representatives,
estates, executors, successors and permitted assigns any right, remedy or claim
under or by reason of their Agreement or any part hereof. Without the prior
written consent of the parties hereto, this Agreement may not be assigned by any
of the parties hereto. Notwithstanding the foregoing, BPB may assign to any
Affiliate of BPB all or any portion of BPB's rights and obligations hereunder
whether prior to or after BPB exercises such right or is required to satisfy
such obligation, provided that in the event of any such assignment such assignee
--------
shall be deemed to have all of the rights and obligations of BPB set forth
herein.
Section 13.9. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement, it being understood that
all of the parties need not sign the same counterpart.
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Section 13.10. Governing Law. THIS AGREEMENT, THE LEGAL RELATIONS BETWEEN
-------------
THE PARTIES AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF, SHALL BE GOVERNED
BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO APPLICABLE CONFLICT OF LAW.
Section 13.11. Service; Jurisdiction. Each of the parties hereto agrees
---------------------
to: (i) the irrevocable designation of the Secretary of State of the
Commonwealth of Massachusetts as its agent upon whom process against it may be
served, and (ii) personal jurisdiction in any action brought in any court,
federal or state, within the Commonwealth of Massachusetts, City of Boston
having subject matter jurisdiction over matters arising under this Agreement.
Section 13.12. Stockholders' Representatives. The Stockholders shall act
-----------------------------
collectively and exclusively through the Stockholders' Representatives in
exercising any of the rights, remedies and procedures applicable to the
Stockholders under this Agreement, including without limitation under Articles
X, XI and XII hereof. BPB shall be entitled to direct any and all requests,
demands, notices and other actions pursuant to this Agreement, including without
limitation under Articles X, XI and XII hereof, to the Stockholders or any of
them through the Stockholders' Representatives, shall be entitled to deal
directly and exclusively with the Stockholders' Representatives in all matters
arising under this Agreement, including without limitation under Articles X, XI
and XII hereof, and shall bind, and be held harmless by, the Stockholders in so
doing. This Agreement shall not make any Stockholders' Representative liable
for any amounts owed by any of the Stockholders under, or other obligations
undertaken by any of the Stockholders in, this Agreement or any other agreement
entered into by the Stockholders in connection with the transactions
contemplated hereby (all such amounts and obligations being referred to
collectively as the "Stockholders' Obligations"), it being expressly agreed and
understood by BPB that the Stockholders' Obligations are the full and complete
responsibilities of the Stockholders. Any action taken or determination made by
any Stockholders' Representative in his capacity as such is taken or made on
behalf of and for the account of the Stockholders, and not in his individual or
any other capacity. BPB on behalf of itself and its Affiliates hereby releases
and forever discharges the Stockholders' Representatives from any and all causes
of action, rights or claims that BPB or any of its Affiliates may have had in
the past, may now have or may have in the future in respect of the Stockholders'
Obligations; provided, however, that such release and discharge shall only apply
-------- -------
to any individual serving as a Stockholders' Representative in his capacity as
such and not in his capacity as a Stockholder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed under seal as of the date first above written.
BOSTON PRIVATE BANCORP, INC.
ATTEST: /s/ Ana E. Steele By /s/ Timothy L. Vaill
----------------------------- ---------------------------------
Name: Timothy L. Vaill
Title: President
ATTEST: /s/ Ana E. Steele By /s/ Mark D. Thompson
----------------------------- ---------------------------------
Name: Mark D. Thompson
Title: Treasurer
BOSTON PRIVATE
INVESTMENT
MANAGEMENT, INC.
ATTEST: /s/ Ana E. Steele By /s/ Timothy L. Vaill
----------------------------- ---------------------------------
Name: Timothy L. Vaill
Title: President
ATTEST: /s/ Ana E. Steele By /s/ Walter M. Pressey
----------------------------- ---------------------------------
Name: Walter M. Pressey
Title: Treasurer
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WESTFIELD CAPITAL,
MANAGEMENT
COMPANY, INC.
ATTEST: /s/ Jill A. Roeting By /s/ Arthur J. Bauernfeind
------------------------------ --------------------------------
Name: Arthur J. Bauernfeind
Title: President
ATTEST: /s/ Jill A. Roeting By /s/ C. Michael Hazard
------------------------------ --------------------------------
Name: C. Michael Hazard
Title: Treasurer
Witness: /s/ David L. Coombs /s/ C. Michael Hazard
------------------------------ -----------------------------------
Name: David L. Coombs Name: C. Michael Hazard
Witness: /s/ David L. Coombs /s/ Michael J. Chapman
------------------------------ -----------------------------------
Name: David L. Coombs Name: Michael J. Chapman
Witness: /s/ David L. Coombs /s/ Arthur J. Bauernfeind
------------------------------ -------------------------------------
Name: David L. Coombs Name: Arthur J. Bauernfeind
Witness: /s/ David L. Coombs /s/ Jill A. Roeting
------------------------------ -----------------------------------
Name: David L. Coombs Name: Jill A. Roeting
Witness: /s/ David L. Coombs /s/ David Boyce
------------------------------ -----------------------------------
Name: David L. Coombs Name: David Boyce
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Witness: /s/ David L. Coombs /s/ William A. Muggia
------------------------------ ------------------------------------
Name: David L. Coombs Name: William A. Muggia
Witness: /s/ David L. Coombs /s/ Bruce R. Watts, Jr.
------------------------------ -----------------------------------
Name: David L. Coombs Name: Bruce R. Watts, Jr.
Witness: /s/ David L. Coombs /s/ Stephen C. Demirjian
------------------------------ ------------------------------------
Name: David L. Coombs Name: Stephen C. Demirjian
Witness: /s/ David L. Coombs /s/ Karen B. Agnew
------------------------------ -------------------------------------
Name: David L. Coombs Name: Karen B. Agnew
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EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of August 13, 1997 (this
"Agreement") by and between Boston Private Bancorp, Inc., a Massachusetts
corporation ("BPB") and the several persons signatory hereto (each a
"Stockholder" and collectively the "Stockholders").
BPB, Boston Private Investment Management, Inc. ("BPIM"), Westfield
Capital Management Company, Inc. and the Stockholders are parties to an
Agreement and Plan of Merger dated as of August 13, 1997 (the "Merger
Agreement"), pursuant to which, among other things, the Stockholders will have
the right to receive certain shares (the "Shares") of common stock, $1.00 par
value per share ("Common Stock"), of BPB, all as more fully set forth in the
Merger Agreement.
This Agreement is being entered into to set forth certain rights and
obligations of BPB and the Stockholders with respect to the registration under
the Securities Act of 1933, as amended, or any successor federal statute and the
rules and regulations of the Securities and Exchange Commission (the "SEC")
thereunder, and in the case of any reference to any such statute, rule or
regulation, any successor section (the "Securities Act"), of the offer and sale
of the Shares by the Stockholders, all as more fully set forth in this
Agreement.
In consideration of the foregoing and the respective covenants and
agreements set forth herein, and for other good and valuable consideration, the
parties hereto agree as follows:
1. Effectiveness of Registration Rights. The registration rights granted
------------------------------------
pursuant to Sections 2 and 3 hereof shall be effective as of the closing of
the transactions contemplated by the Merger Agreement.
2. Demand Registration.
-------------------
a. Notice and Registration. At any time and from time to time after the
-----------------------
effectiveness of this Agreement, subject to the terms and conditions
set forth herein, upon written notice of Stockholders (as to any such
notice and the related registration of Covered Shares, "Requesting
Stockholders") requesting that BPB effect the registration under the
Securities Act of not less than 100,000 Covered Shares in the
aggregate held by them, which notice shall specify the intended method
or methods of disposition of such Covered Shares, BPB will promptly
give written notice (the "BPB Notice") of such requested registration
to all other Stockholders then holding Covered Shares. Any such
Stockholder who wishes to have Covered Shares included in such
registration shall give written notice delivered to BPB within 20 days
after the date of the BPB Notice
<PAGE>
indicating such intent, upon which such Stockholder will become a
Requesting Stockholder with respect to the related notice and
registration. BPB will use its reasonable best efforts to promptly
effect the registration under the Securities Act of the Covered Shares
requested to be registered by the Requesting Stockholders on Form S-3
or SB-1 (or any successor form substantially equivalent thereto) or,
if such forms are not then available to BPB, such other appropriate
form as BPB may elect, for disposition in accordance with the intended
method or methods of disposition stated in such request, provided
--------
that:
i. BPB shall not be required to effect more than one (1)
registration of Covered Shares pursuant to this Section 2 during
any consecutive twelve month period. No registration of Covered
Shares under Section 2 which shall not become effective shall be
deemed to be a registration statement for the purposes of this
sentence;
ii. in the event that as to any request for registration pursuant to
this Section 2, Requesting Stockholders request the registration
of more than 800,000 Covered Shares in the aggregate, BPB may in
its sole discretion by written notice to each Requesting
Stockholder reduce the number of Covered Shares of each
Requesting Stockholder to be registered in response to such
request, pro rata based on the number of Covered Shares requested
to be registered, to the extent necessary to reduce the aggregate
number of Covered Shares to be registered in response to such
request to not less than 800,000 Covered Shares;
iii. if BPB shall have previously effected a registration, other than
registrations incidental to any securities issued in connection
with mergers, acquisitions, exchange offers, dividend
reinvestment plans or stock option or other benefit plans, under
the Securities Act with respect to Common Stock, BPB shall not be
required to effect a registration pursuant to this Section 2
until a period of 90 days shall have elapsed from the effective
date of the most recent such previous registration;
iv. if upon receipt of a registration request pursuant to this
Section 2 BPB is engaged or has firm plans to engage within 90
days of the time of the request in a registered public offering
of securities (a "BPB Offering"), then BPB may at its option
direct that such request be delayed for a period not in excess of
90 days from the commencement of such public offering, provided,
--------
however, that in any twelve month period BPB may only one time in
the aggregate exercise its right to either so delay a request or
impose a Transaction Blackout;
-2-
<PAGE>
v. if, at the time of any request to register Covered Shares
pursuant to this Section 2 or after such request but prior to the
filing of the related registration statement, BPB's Chief
Executive Officer determines in good faith that the filing of a
registration statement would require the disclosure of material
information which BPB has a bona fide business purpose for
preserving as confidential, BPB may at its option direct that
such request be delayed until the earlier of (A) the date upon
which such material information is disclosed to the public or
ceases to be material or (B) 90 days after the date of the
decision to so delay; provided, however, that BPB may not so
--------
delay a registration pursuant to this Section 2.1(e) or suspend
sales pursuant to a Transaction Blackout for more than 90 days in
the aggregate during any twelve consecutive month period without
the approval of the Board of Directors of BPB; and
vi. Stockholders' right to request registration pursuant to this
Section 2 shall terminate in the event that at anytime after the
seventh anniversary hereof BPB offers to register all Covered
Shares held by Stockholders for sale in an underwritten public
offering and either (i) no Stockholder requests to have Covered
Shares included in such offering or (ii) such underwritten public
offering is consummated and results in the opportunity to sell
all Covered Shares requested by Stockholders to be included in
such offering.
b. Registration Expenses. BPB (as between BPB and the Requesting
---------------------
Stockholders) shall bear all Registration Expenses in connection with
any registration pursuant to this Section 2, other than underwriting
discounts and commissions, stock transfer taxes or fees and expenses
of legal, tax and other counsel or advisors to the Requesting
Stockholders, except that the expenses of one counsel for the
Requesting Stockholders are included in the definition of Registration
Expenses.
c. Third Person and Company Shares. BPB shall have the right to cause
-------------------------------
the registration of securities for sale for the account of any person
(including the Company) in any registration of Covered Shares
requested pursuant to this Section 2; provided, however, that in no
--------
event shall such inclusion result in the number of Covered Shares to
be included in such registration being reduced below 800,000 Covered
Shares or such lesser number of Covered Shares sought to be included
therein by Requesting Stockholders.
d. Financial Information. Notwithstanding anything to the contrary
---------------------
herein, in connection with any registration provided for in this
Section 2, BPB will not be obligated to furnish any financial
statements other than the audited financial statements customarily
prepared at the end of its fiscal year and unaudited financial
information now customarily required by the SEC under the Securities
-3-
<PAGE>
Act and the Securities Exchange Act of 1934, as amended or that may be
required by any successor federal statutes. In the event that
additional financial statements or other financial information or
schedules is so required and is not readily available to BPB, then BPB
shall be entitled to defer the performance of its obligations under
this Section 2 until such time as such additional financial statements
will not be so required or will be readily available, or, at its
option, BPB shall at the request of Requesting Stockholders prepare
such additional financial statements or other information, and the
costs and expenses of BPB in connection therewith, including salary
and related overhead expenses of employees of BPB and any subsidiary
or affiliate of BPB for time expended by such employees in the
preparation of such financial or other information, will be reimbursed
to BPB by the Requesting Stockholders so requesting such preparation.
e. Additional Demand Right. In the event that in any two consecutive
-----------------------
twelve month periods BPB delays a registration pursuant to Section
2.1(e) or suspends sales pursuant to Transaction Blackouts for 90 or
more days in the aggregate during each of such consecutive twelve
month periods, upon a written request by Requesting Stockholders
pursuant to Section 2.1 hereof BPB will use its reasonable best
efforts to effect within six months of such request a registration for
an underwritten public offering pursuant and subject to the terms and
conditions of Section 2 and this Agreement, provided that as applied
to any registration pursuant to this Section 2.5 (i) the references to
"800,000 Covered Shares" contained in Section 2.1(b) and in Section
2.3 shall be deemed to be references to "1,600,000 Covered Shares,"
(ii) no registration pursuant to this Section 2.5 shall be counted
toward the limitation on registrations provided in Section 2.1(a) and
(iii) Section 2.1(d) and Section 4.3(a) as it applies to Transaction
Blackouts shall be inapplicable.
3. Piggyback Registration.
----------------------
a. Notice and Registration. If at any time or from time to time after
-----------------------
the effectiveness of this Agreement BPB proposes to register any
Common Stock ("Other Securities") for public sale under the Securities
Act (whether proposed to be offered for sale by BPB or any other
person) in an underwritten public offering and on a form and in a
manner which would permit registration of Covered Shares for sale to
the public under the Securities Act, it will give written notice to
the each Stockholder of its intention to do so, and upon the written
request of Stockholders (as to any such notice and the related
registration of Covered Shares, "Requesting Stockholders") delivered
to BPB within 10 business days after the giving of any such notice
(which request shall specify the Covered Shares intended to be
disposed of by the Requesting Stockholder) requesting that BPB include
in such registered underwritten public
-4-
<PAGE>
offering any number of Covered Shares owned by such Requesting
Stockholders, BPB will use its reasonable best efforts to effect, in
connection with the registration of the Other Securities, the
registration under the Securities Act of all Covered Shares which BPB
has been so requested to register by such Requesting Stockholders, to
the extent required to permit the disposition of Covered Shares so to
be registered; provided that:
--------
i. if, at any time after giving such written notice of its intention
to register any Other Securities and prior to the effective date
of the registration statement filed in connection with such
registration, BPB shall determine for any reason not to register
the Other Securities, BPB shall give written notice of such
determination to the Requesting Stockholders and BPB may, at its
election, be relieved of its obligation to register such Covered
Shares in connection with the registration of such Other
Securities (but not from its obligation to pay Registration
Expenses to the extent incurred in connection therewith as
provided in Section 3.2), without prejudice, however, to the
rights (if any) of the Requesting Stockholders immediately to
request that such registration be effected as a registration
under Section 2 to the extent that such request would comply with
all of the terms and conditions of Section 2;
ii. if BPB shall have been advised in writing (with a copy to each
Requesting Stockholder) by a nationally recognized independent
investment banking firm selected by BPB (who is then acting as
the managing underwriter for any such offering) that, in such
firm's opinion, the inclusion of all or any portion of the
Covered Shares then intended to be disposed of by Requesting
Stockholders in the proposed registration at that time would
adversely affect in a significant manner the registration and
offering of the Other Securities, the number of Covered Shares
requested to be included in the proposed registration shall be
reduced on a pro rata basis among all Requesting Stockholders
based on the number of such Covered Shares requested to be
included by each such Requesting Stockholder or, as the case may
be, shall all be excluded from such registration in their
entirety, to the extent necessary as determined by such
investment banking firm to prevent the proposed registration of
Other Securities from being so effected; provided, however, that
--------
if as a result of the provisions of this Section 3.1(b), BPB is
unable to include in such registration all of the Covered Shares
requested by the Requesting Stockholders for inclusion in such
registration, BPB shall so notify each Requesting Stockholder and
give each Requesting Stockholder the right to withdraw all
Covered Shares requested by the Requesting Stockholder for
inclusion in such
-5-
<PAGE>
registration from such registration by notice to BPB within 5
days after receipt of BPB's notice; and
iii. BPB shall not be required to effect any registration of Covered
Shares under this Section 3 incidental to the registration of any
of its securities in connection with mergers, acquisitions,
exchange offers, subscription offers, dividend reinvestment plans
or stock option or other employee benefit or similar plans.
b. Registration Expenses. BPB (as between BPB and the Requesting
---------------------
Stockholders) shall bear all Registration Expenses in connection with
any registration pursuant to this Section 3, other than underwriting
discounts and commissions, stock transfer taxes or fees and expenses
of legal, tax and other counsel or advisors to the Requesting
Stockholders, except that the expenses of one counsel for the
Requesting Stockholders are included in the definition of Registration
Expenses.
4. Registration Procedures.
-----------------------
a. Registration and Qualification. If and whenever BPB is required to
------------------------------
use its reasonable best efforts to effect the registration of any
Covered Shares under the Securities Act as provided in Section 2 or
Section 3, BPB will as promptly as is practicable:
i. in the case of a request pursuant to Section 2, prepare, file and
use its reasonable best efforts to cause to become effective a
registration statement under the Securities Act regarding the
Covered Shares to be offered on such appropriate registration
form of the SEC as shall be selected by BPB;
ii. in the case of a request pursuant to Section 2, prepare and file
with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect to
the disposition of all Covered Shares until the later of (i) such
time as all of such Covered Shares have been disposed of in
accordance with the intended methods of disposition by the
Requesting Stockholders set forth in such registration statement
(but in no event beyond the date that a subsequent registration
statement filed pursuant to a request under Section 2 becomes
effective) or (ii) the expiration of the time when a prospectus
relating to any sale made within the period contemplated by
phrase (i) of this paragraph is required to be delivered under
the Securities Act;
-6-
<PAGE>
iii. furnish to each Requesting Stockholder and to any underwriter of
such Covered Shares such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of
copies of the prospectus or prospectus supplement included in
such registration statement (including each preliminary
prospectus and any summary prospectus), in conformity with the
requirements of the Securities Act, such documents incorporated
by reference in such registration statement or prospectus as the
Requesting Stockholder or such underwriter may reasonably request
in order to facilitate the public sale or other disposition of
the Covered Shares;
iv. use its reasonable best efforts to register or qualify all
Covered Shares covered by such registration statement under such
other securities or blue sky laws of such United States
jurisdictions as the Requesting Stockholders or any underwriter
of such Covered Shares shall reasonably request, except that BPB
shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction where
it is not so qualified, or to subject itself to taxation in any
such jurisdiction or to consent to general service of process in
any such jurisdiction;
v. immediately notify each Requesting Stockholder (i) of the time
any registration statement filed hereunder becomes effective or
when any amendment or supplement or prospectus forming a part of
such registration statement has been filed, (ii) of any request
by the SEC for an amendment or supplement to such registration
statement or prospectus or for additional information, (iii)
after BPB shall have received notice or otherwise obtained
knowledge thereof, of the issuance of any order by the SEC
suspending the effectiveness of such registration statement or
any amendment thereto or of the initiation or threatening of any
proceeding for that purpose (and BPB will use its reasonable best
efforts to prevent the issuance of any such stop order or to
obtain its withdrawal promptly if such stop order should be
issued) and (iv) at any time when a prospectus relating to a
registration pursuant to Section 2 or Section 3 is required to be
delivered under the Securities Act, of the happening of an event
as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, and, subject to Section 4.3, at the request of any
Requesting Stockholder prepare and furnish to such Requesting
Stockholder a reasonable number of copies of a
-7-
<PAGE>
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of
such Covered Shares, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made,
not misleading; provided that the time period set forth in
--------
Section 4.1(b)(ii) hereof shall be extended for a number of days
equal to the number of days in the period from and including the
date BPB gave the notice required by this Section 4.1(e) through
the date when BPB delivers such supplement or amendment.
BPB may require each Requesting Stockholder to furnish BPB with
such information regarding such Requesting Stockholder and the
distribution of such securities as BPB may from time to time
reasonably request in writing or as shall be required by law or
by the SEC or the National Association of Securities Dealers,
Inc. ("NASD") or any underwriter in connection with any
registration. Each Stockholder hereby agrees to promptly notify
BPB of any changes in the information provided to BPB; and
vi. BPB agrees in the case of an underwritten offering under Section
2 or Section 3 hereof to refrain, without the consent of the
managing underwriter, for a period from 15 days before the
effective date of the registration statement until 90 days after
such effective date, from publicly selling, offering to sell,
publicly selling any option for the sale of any common equity or
securities convertible into common equity other than pursuant to
BPB employee equity plans.
b. Underwriting.
------------
i. If a registration pursuant to Section 3 involves an underwritten
offering, BPB shall have the right to select the managing
underwriter. If a registration pursuant to Section 2 involves an
underwritten offering, BPB shall consult with the Requesting
Stockholders as to the selection of the managing underwriter(s)
for such underwritten offering. BPB shall have the right after
such consultation to select the managing underwriter(s) for any
such underwritten public offering subject to the approval of
Requesting Stockholders holding a majority of the Covered Shares
requested to be registered in such underwritten offering, which
approval may not be unreasonably withheld. Stockholders agree
not to discuss the possible engagement of any managing
underwriter with such underwriter without the prior written
consent of BPB.
-8-
<PAGE>
ii. If requested by the underwriters for any underwritten offering of
Covered Shares pursuant to a registration requested hereunder,
BPB will enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such
representations and warranties by BPB and such other terms and
provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution to the effect
and to the extent provided in Section 6 and the provision to such
underwriters and the Requesting Stockholders of opinions of
counsel and accountants' letters to the effect and to the extent
provided in Section 4.2(c). The representations and warranties
by, and the other agreements on the part of, BPB to and for the
benefit of such underwriters shall also be made to and for the
benefit of Requesting Stockholders. As a condition to each
Requesting Stockholder's rights under Section 2 and Section 3,
such Requesting Stockholder shall become a party to any such
underwriting agreement, such agreement to contain such
representations and warranties by such Requesting Stockholders
and such other terms and provisions as the underwriters may
reasonably request, including without limitation, indemnities and
contributions to the effect and to the extent provided in Section
6.
iii. In the case of an underwritten offering of Covered Shares, BPB
shall use its reasonable best efforts to obtain and furnish
copies to each Requesting Stockholder (i) copies of an opinion of
counsel for BPB which is also addressed or confirmed to the
Requesting Stockholders, dated the date of the closing under the
underwriting agreement, and (ii) a "cold comfort" letter signed
by the independent public accountants who have certified BPB's
financial statements included in such registration statement,
each covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and,
in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in
accountants' letters in underwritten public offerings of
securities.
iv. In the event that any registration pursuant to Section 3 hereof,
BPB may require Requesting Stockholders requesting that Covered
Shares be registered pursuant to Section 3 to participate in such
underwriting on the same terms and conditions, and pursuant to
the same for of Underwriting Agreement as shall be applicable to
persons seeking the Other Securities to be sold through
underwriters under such registration.
-9-
<PAGE>
c. Blackout Periods.
----------------
i. At any time when a registration statement effected pursuant to
Section 2 or 3 hereunder relating to Covered Shares is effective,
upon written notice from BPB to the Requesting Stockholders that
either:
(1) BPB has firm plans to engage within 90 days in a BPB
Offering and has been advised in writing (with a copy to the
Requesting Stockholders) by a nationally recognized
independent investment banking firm selected by BPB that, in
such firm's opinion, the Requesting Stockholders' sale of
Covered Shares pursuant to the registration statement would
adversely affect in a significant manner such immediately
planned BPB Offering (a "Transaction Blackout"); or
(2) BPB determines, based on the good faith advice of outside
corporate counsel to BPB, that the Requesting Stockholders'
sale of Covered Shares pursuant to the registration
statement would require disclosure of material information
which, in the good faith judgment of the Chief Executive
Officer of BPB, BPB has a bona fide business purpose for
preserving as confidential (an "Information Blackout"),
the Requesting Stockholders shall suspend sales of Covered Shares
pursuant to such registration statement until the earlier of:
(X) (i) in the case of a Transaction Blackout, the
earliest of (A) 90 days after the effectiveness of the
registration statement relating to such BPB Offering, (B)
the termination of any "blackout" period required by the
underwriters to be applicable to BPB or the Stockholders, if
any, in connection with such BPB Offering or (C) promptly
after abandonment of such BPB Offering, or (ii) in the case
of an Information Blackout, the earlier of (A) the date upon
which such material information is disclosed to the public
or ceases to be material or (B) 90 days after the date of
suspension of sales; or
(Y) such time as BPB notifies the Requesting
Stockholders that sales pursuant to such registration
statement may be resumed (the number of days from such
suspension of sales of the Requesting Stockholders until the
day when such sales may be resumed hereunder is hereinafter
called a "Sales Blackout Period");
-10-
<PAGE>
provided that BPB may not impose a Transaction Blackout during
--------
any underwritten public offering.
ii. If there is a Transaction Blackout or an Information Blackout,
the time period set forth in Section 4.1(b)(ii) shall be extended
for a number of days equal to the number of days in the Sales
Blackout Period.
d. Listing. In connection with the registration of any offering of
-------
Covered Shares pursuant to this Agreement, BPB agrees to use its
reasonable best efforts, at BPB's expense, to effect the listing of
such shares on any securities exchange on which any shares of the
Common Stock are then listed.
5. Preparation; Reasonable Investigation. In connection with the preparation
-------------------------------------
and filing of each registration statement registering Covered Shares under
the Securities Act, BPB will give each Requesting Stockholder and the
underwriters, if any, and their respective counsel and accountants, such
reasonable and customary access to its books and records and such
opportunities to discuss the business of BPB with its officers and other
appropriate personnel and the independent public accountants who have
certified its financial statements as shall be reasonably necessary to
conduct a reasonable investigation within the meaning of the Securities
Act.
6. Indemnification and Contribution.
--------------------------------
i. In the event of any registration of any Covered Shares hereunder,
BPB will enter into customary indemnification arrangements to
indemnify and hold harmless the Requesting Stockholders, each
person who participates as an underwriter in the offering or sale
of such securities, each officer and director of each
underwriter, and each person, if any, who controls any such
underwriter within the meaning of the Securities Act against any
losses, claims, damages, liabilities or expenses to which such
person may be subject under the Securities Act or otherwise
insofar as such losses, claims, damages, liabilities or expenses
(or actions or proceedings in respect thereof) arise out of are
based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in any registration statement
under which such securities were registered under the Securities
Act, any preliminary prospectus or final prospectus included
therein, any amendment or supplement thereto or any document
incorporated by reference therein or (ii) any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and BPB will reimburse each such person for any legal
or other expenses reasonably incurred by such person in
connection with investigating or defending any such loss, claim,
damage or liability (or action or proceeding in
-11-
<PAGE>
respect thereof); provided that BPB shall not be liable in any
such case to the extent that any such loss, claim, damage or
liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus or final
prospectus, amendment or supplement (A) in reliance upon and in
conformity with written information furnished to BPB by any
Requesting Stockholder or such underwriter specifically for use
in the preparation thereof or (B) and corrected in any prospectus
or amendment or supplement thereto that was delivered to the
Requesting Stockholder or underwriter prior to the sale or sales
of Covered Shares in question. Such indemnity shall remain in
full force and effect regardless of any investigation made by or
on behalf of the Requesting Stockholders or any such person and
shall survive the transfer of such securities by the Requesting
Stockholder. BPB also shall agree to provide for contribution as
shall reasonably be requested by the Requesting Stockholders or
any underwriters in circumstances where such indemnity is held
unenforceable.
ii. Each Requesting Stockholder, by virtue of exercising its
registration rights hereunder, agrees and undertakes to enter
into customary indemnification arrangements to indemnify and hold
harmless (in the same manner and to the same extent as set forth
in Section 8(a)) BPB, each director of BPB, each officer of BPB
who shall sign such registration statement, each person who
participates as an underwriter or a selling stockholder in the
offering or sale of such securities, each officer and director of
each underwriter and selling stockholder, and each person, if
any, who controls BPB or any such underwriter or selling
stockholder within the meaning of the Securities Act, with
respect to any statement in or omission from such registration
statement, any preliminary prospectus or final prospectus
included therein, or any amendment or supplement thereto, if such
statement or omission was made in reliance upon and in conformity
with written information furnished by the Requesting Stockholder
to BPB specifically for inclusion in such registration statement
or prospectus. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of
BPB or any such director, officer or controlling person and shall
survive the transfer of the registered securities by the
Requesting Stockholder. Each Requesting Stockholder also shall
agree to provide for contribution as shall reasonably be
requested by BPB or any underwriters or selling stockholder in
circumstances where such indemnity is held unenforceable.
-12-
<PAGE>
iii. Indemnification and contribution similar to that specified in the
preceding subdivisions of this Section 6 (with appropriate
modifications) shall be given by BPB and each Requesting
Stockholder with respect to any required registration or other
qualification of such Covered Shares under any federal or state
law or regulation of governmental authority other than the
Securities Act.
7. Benefits and Termination of Registration Rights.
-----------------------------------------------
a. Exercise. Registration rights granted hereunder may only be exercised
--------
by the Stockholders or their permitted assigns.
b. Termination. The registration rights of any Stockholder hereunder
-----------
shall cease to apply to Covered Shares held by such Stockholder when
(a) a registration statement with respect to the sale of such Covered
Shares shall have become effective under the Securities Act and such
shares shall have been disposed of in accordance with such
registration statement or (b) all such Covered Shares are eligible to
be sold pursuant to Rule 144 under the Securities Act (or any
successor provision) during any two (2) successive three (3) month
periods.
c. Other Agreements. BPB is party to that certain Stock Purchase
----------------
Agreement, dated December 2, 1996, by and between BPB and the
investors named therein and that certain Asset Purchase Agreement,
dated as of June 16, 1995, by and among BPB, Boston Private Bank &
Trust Company, Cunningham, Henderson and Papin Incorporated and the
stockholders of Cunningham, Henderson and Papin Incorporated, each of
which agreements provide certain registration rights with respect to
shares of Common Stock held by certain parties thereto (the "Other
Registration Rights"). The rights of the Stockholders hereunder and
the obligations of BPB hereunder are expressly subject to and, to the
extent inconsistent therewith, limited by such Other Registration
Rights.
8. Certain Definitions.
-------------------
a. Registration Expenses. As used in this Agreement, the term
---------------------
"Registration Expenses" means all expenses incident to BPB's
performance of or compliance with the registration requirements set
forth in this Agreement, including, without limitation, the following:
(i) the fees, disbursements and expenses of BPB's counsel and
accountants in connection with the registration of Covered Shares to
be disposed of under the Securities Act; (ii) all expenses in
connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final
prospectus, any other offering document and amendments and supplements
thereto and the mailing and delivering of copies thereof to the
underwriters and dealers; (iii) the cost of printing and producing
-13-
<PAGE>
any agreements among underwriters, underwriting agreements, and blue
sky or legal investment memoranda, any selling agreements and any
amendments thereto or other documents in connection with the offering,
sale or delivery of Covered Shares to be disposed of; (iv) all
expenses in connection with the qualification of Covered Shares to be
disposed of for offering and sale under state securities laws,
including the fees and disbursements of counsel for the underwriters
in connection with such qualification and in connection with any blue
sky and legal investment surveys; (v) the filing fees incident to
securing any required review by the NASD of the terms of the sale of
Covered Shares to be disposed of; (vi) the costs of preparing stock
certificates; (vii) the costs and charges of BPB's transfer agent and
registrar and (viii) the reasonable fees and disbursements of one
counsel for the Requesting Stockholders.
b. Covered Shares. "Covered Shares" means the Shares and any stock
--------------
dividends or distributions made on the Shares from BPB (including,
without limitation, as a result of a stock split) or any securities
which become convertible into or exchanged for BPB shares in the event
there is a sale of all or substantially all of the assets of BPB, or a
merger or a reorganization of BPB.
9. Legend. Each certificate representing the Covered Shares shall be stamped
------
or otherwise imprinted with a legend substantially in the following form:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be transferred or
otherwise disposed of unless they have been registered under said Act or an
exemption from registration is available."
The foregoing legend shall be removed at such time as the restrictions
referred to therein cease to be applicable.
10. Termination. This Agreement shall terminate on the earlier of the date
-----------
that no Stockholder owns any Covered Shares or the date that all Covered
Shares held by all Stockholders are freely saleable without restriction
under the Securities Act.
11. Miscellaneous.
-------------
a. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of and be enforceable by the parties hereto and (a) with
respect to BPB, its successors and assigns and (b) with respect to the
Stockholders, its successors and permitted assigns. No Stockholder
may assign any of its rights and obligations hereunder without the
prior written consent of BPB, provided that a Stockholder may assign
--------
its rights and obligations hereunder to any trust, limited partnership
or other estate planning vehicle the sole beneficiaries or equity
-14-
<PAGE>
holders of which shall be such Stockholder and/or one or more of a
spouse, parent, sibling, child or grandchild of such Stockholder or
any charitable trust or foundation or, without compensation, to any
charitable trust or foundation.
b. Governing Law; Jurisdiction. This Agreement shall be construed,
---------------------------
performed and enforced in accordance with, and governed by, the laws
of the Commonwealth of Massachusetts (without giving effect to the
principles of conflicts of laws thereof).
c. Severability. In the event that any part of this Agreement is
------------
declared by any court or other judicial or administrative body to be
null, void or unenforceable, said provision shall survive to the
extent it is not so declared, and all of the other provisions of this
Agreement shall remain in full force and effect.
d. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be sent by hand delivery,
receipt acknowledged, or by telegram, telex or facsimile transmission,
to the respective parties at the following addresses:
If to BPB:
Ten Post Office Square
Boston, Massachusetts 02109
Attention: Timothy L. Vaill
Facsimile: (617) 912-4557
with a copy to
Goodwin, Proctor & Hoar
Exchange Place
52 State Street
Boston, Massachusetts 02109
Attention: Bill Mayer
Facsimile: (617) 523-1231
If to the Stockholder, at the address of record reflected
upon the books of BPB, with a copy to
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Attention: Gregory D. Sheehan
Facsimile: (617) 951-7050
-15-
<PAGE>
Any party may change its address or facsimile number for
receiving notice by written notice given to the other party. All
notices, requests, demands and other communications hereunder shall be
deemed to have been duly given as of the earlier of (a) the date
received or (b) the date receipt is acknowledged.
e. Rule 144 Information. With a view to making available to the
--------------------
Stockholders the benefits of Rule 144 promulgated under the Securities
Act ("Rule 144") and any other rule or regulation of the SEC that may
at any time permit a Stockholder to sell Covered Shares to the public
without registration, BPB agrees to:
i. use its reasonable best efforts to file with the SEC all reports
and other documents required of BPB to be filed pursuant to the
Securities Act or the Securities Exchange Act of 1934; and
ii. furnish to any Stockholder forthwith upon request (1) a written
statement by BPB as to its compliance with the reporting
requirements of paragraph (c)(1) Rule 144, (2) a copy of the most
recent annual or quarterly report of BPB and (3) at the
Stockholder's expense, such other public, non-confidential
information as may be reasonably requested in availing any
Stockholder of any rule or regulation of the SEC which permits
the selling of any such securities without registration or
pursuant to such form.
f. Confidentiality. Stockholder agrees to treat as confidential and not
---------------
to disclose to any other person any information provided to
Stockholder by BPB pursuant to this Agreement that BPB notifies
Stockholder is confidential.
g. Amendments; Waivers. This Agreement may be amended or modified, and
-------------------
any of the terms, covenants or conditions hereof may be waived, only
by a written instrument executed by the parties hereto, or in the case
of a waiver, by the party waiving compliance. Any waiver by any party
of any condition, or of the breach of any provision, term or covenant
contained in this Agreement, in any one or more instances, shall not
be deemed to be nor construed as a furthering or continuing waiver of
any such condition, or of the breach of any other provision, term or
covenant of this Agreement.
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<PAGE>
h. Section and Paragraph Headings. The section and paragraph headings in
------------------------------
this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
i. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed an original, but all of which shall constitute
the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
BOSTON PRIVATE BANCORP, INC.
By: /s/ Timothy L. Vaill
--------------------------------------------
Name: Timothy L. Vaill
Title: President and CEO
STOCKHOLDERS:
By: /s/ Arthur J. Bauernfeind
-------------------------------
Name: Arthur J. Bauernfeind
By: /s/ David Boyce
----------------------------------
Name: David Boyce
By: /s/ Michael J. Chapman
------------------------------
Name: Michael J. Chapman
By: /s/ Stephen C. Demirjian
------------------------------
Name: Stephen C. Demirjian
By: /s/ C. Michael Hazard
------------------------------
Name: C. Michael Hazard
By: /s/ William A. Muggia
------------------------------
Name: William A. Muggia
By: /s/ Jill A. Roeting
-----------------------------------
Name: Jill A. Roeting
By: /s/ Bruce R. Watts, Jr.
--------------------------------
Name: Bruce R. Watts, Jr.
By: /s/ Karen B. Agnew
-------------------------------
Name: Karen B. Agnew
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