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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
AUGUST 13, 1997
BOSTON PRIVATE BANCORP, INC.
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(Exact name of registrant as specified in charter)
MASSACHUSETTS 0-17089 04-2976299
- ---------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
TEN POST OFFICE SQUARE, BOSTON, MASSACHUSETTS 02109
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617) 912-1900
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Item 5 - Other Events
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Timothy L. Vaill, President and CEO of Boston Private Bancorp, Inc.
(the "Company") announced on August 13, 1997 that its investment management arm,
Boston Private Investment Management, Inc. will acquire Boston-based Westfield
Capital Management, Inc., an investment firm with assets under management of
$1.3 billion. In this transaction, which is accounted for as a pooling of
interests, Westfield's shareholders will receive 3,918,367 shares of newly
issued Boston Private Bancorp, Inc., common stock. In 1997 through August 12th,
the price of Boston Private Bancorp, Inc., stock has ranged from 4 7/8 to 8 1/4.
The stock price average during this period was approximately 6 1/8. This
represents the Company's second investment management acquisition since 1995.
Established in 1989 by C. Michael Hazard, Westfield Capital Management
specializes in separately managed, growth equity portfolios. Over half of
Westfield's $1.3 billion in assets under management belongs to high net worth
individuals. The remainder of its client base consists of corporate pension
funds, endowments and foundations. Westfield has distinguished itself in the
marketplace by providing a high level of client service and communications.
Boston Private Bancorp, Inc. is the parent company of Boston Private
Bank & Trust Company, a private bank serving clients in this region with banking
and investment products. Its investment management and trust services business,
under the leadership of James D. Henderson, has approximately $825 million of
assets under management.
According to Mr. Vaill, "This purchase reinforces our position in the
marketplace as a leading provider of private banking services with investment
management as a primary focus. Immediately, it takes us to over $2 billion in
client assets under management and broadens our product offering considerably.
Most importantly, however, this acquisition gives us an attractive balance
between our interest rate driven business and our fee income, which is expected
to account for more than 50% of total revenues in 1997. This means, ultimately,
that we can pursue our strategic growth goals with solid prospects for revenue
diversification, while striving to satisfy the expectations of our clients and
shareholders."
Mr. Hazard commented, "We are extremely pleased to join Boston Private
in this marketplace. I believe, at this point in time, the route to steady
growth in our business is through a full service firm which has size and can
also offer a range of services and products to high net worth individuals and
institutions."
Added Mr. Hazard, "I look forward to being part of a team determined
to build a firm that will do a first class job for clients and produce a
rewarding career path for the officers and employees of Westfield Capital and
Boston Private."
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The investment management principals of Westfield Capital, in addition
to Mr. Hazard, include Arthur J. Bauernfeind, Michael J. Chapman, Stephen C.
Demirjian and William A. Muggia, each of whom will enter into an employment
agreement with Boston Private Investment Management, Inc. in connection with the
acquisition. The Company will maintain the Westfield Capital name and its
offices at Boston's One Financial Center. Said Mr. Vaill, "Our intention is to
have Westfield retain its own identity as it continues to provide clients with
the high caliber of service that has been the basis of its substantial past
successes."
According to Mr. Vaill, "In addition to having a significant level of
high net worth clients, Westfield shares our investment philosophy as well as
our dedication to exceptional client service. Westfield offers us a lengthy
tenure of success in the area of investment management, a disciplined equity
management process and a strong commitment to their clients.
In connection with the acquisition, the Company granted the
stockholders of Westfield Capital the right each year to demand registration
under the Securities Act of 1933, as amended (the "Securities Act"), of a
portion of the shares of the Company's Common Stock received in the transaction.
In addition, if the Company proposes to register its Common Stock under the
Securities Act for sale in an underwritten public offering, the stockholders of
Westfield Capital are entitled to include their shares in such registration,
subject to a number of limitations and restrictions.
The consummation of the acquisition is subject to certain conditions,
including, among others, the obtaining of all necessary regulatory approvals and
certain third party consents.
Statements contained in this report that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and are subject to various risks and
uncertainties. There are a number of important factors that could cause actual
results or events to differ materially from those expressed in any
forward-looking statement contained in this report. These factors include, but
are not limited to those factors listed under the caption "Risk Factors" in the
Company's Registration Statement on Form S-3 dated February 11, 1997, as well
as: (i) the ability of the Company and Westfield Capital to attract new
investment advisory clients, to retain their existing clients and otherwise
increase the amount of assets under management; (ii) the ability of the Company
to successfully integrate the acquired business of Westfield Capital; (iii) the
ability of the Company and Westfield Capital to compete successfully for
investment management business, in particular in the Boston area; and (iv) the
extent to which the value of assets currently under management is maintained or
increased.
Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits
- ---------------------------------------------------------------------------
(c) Exhibits
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Exhibit 2.1 - 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 of Westfield Capital Management dated
as of August 13, 1997.
Exhibit 2.2 - Registration Rights Agreement by and among
the Company and the individual stockholders of
Westfield Management Company, Inc. dated as of
August 13, 1997.
Exhibit 99.1 - Press Release of Boston Private Bancorp, Inc.
dated August 13, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BOSTON PRIVATE BANCORP
Date: August __, 1997 By: /s/Walter M. Pressey
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Walter M. Pressey, Senior Vice President
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
Exhibit 2.1 - 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 of Westfield Capital
Management dated as of August 13, 1997.
Exhibit 2.2 - Registration Rights Agreement by and
among the Company and the individual
stockholders of Westfield Management
Company, Inc. dated as of August 13,
1997.
Exhibit 99.1 - Press Release of Boston Private Bancorp, Inc.
dated August 13, 1997.
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EXHIBIT 2.1
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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: August 13, 1997
======================================================
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TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS ............................. 2
Section 1.1. Definitions................................................. 2
ARTICLE II.
THE MERGER AND RELATED MATTERS ...................... 11
Section 2.1 General..................................................... 11
Section 2.2 Conversion of Shares........................................ 11
Section 2.3 Surviving Corporation....................................... 11
Section 2.4 Effect of the Merger........................................ 11
Section 2.5 Organizational Documents.................................... 12
Section 2.6 Directors and Officers...................................... 12
Section 2.7 Effective Time.............................................. 12
ARTICLE III.
THE CLOSING ............................. 12
Section 3.1. Closing..................................................... 12
Section 3.2. Instruments of Transfer..................................... 13
ARTICLE IV.
CERTAIN REPRESENTATIONS AND WARRANTIES OF
C. MICHAEL HAZARD, MICHAEL J. CHAPMAN
AND ARTHUR J. BAUERNFEIND ...................... 14
Section 4.1. Authority; No Violation; Consents........................... 14
Section 4.2. Stockholders' Title......................................... 15
Section 4.3. Stockholders' Litigation.................................... 15
Section 4.4. Stockholders' Preemptive or Other Rights.................... 15
Section 4.5. Stockholders' Share Ownership............................... 16
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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..........,............... 16
Section 5.1. Authority; No Violation; Consents........................... 16
Section 5.2. Stockholders' Title......................................... 17
Section 5.3. Stockholders' Litigation.................................... 17
Section 5.4. Stockholders' Preemptive or Other Rights.................... 17
Section 5.5. Stockholders' Share Ownership............................... 18
ARTICLE VI.
JOINT REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE STOCKHOLDERS................... 18
Section 6.1. Organization and Related Matters............................ 18
Section 6.2. No Violation................................................ 19
Section 6.3. Financial Statements........................................ 19
Section 6.4. Regulatory Documents........................................ 20
Section 6.5. Books and Records........................................... 20
Section 6.6. Ineligible Persons.......................................... 20
Section 6.7. Compliance with Applicable Law.............................. 21
Section 6.8. Administration of Fiduciary Accounts........................ 21
Section 6.9. Company Assets.............................................. 22
Section 6.10. Company Contracts........................................... 23
Section 6.11. Technology and Intellectual Property........................ 23
Section 6.12. Legal Proceedings........................................... 24
Section 6.13. Environmental Compliance.................................... 25
Section 6.14. Taxes and Tax Returns....................................... 25
Section 6.15. Insurance................................................... 26
Section 6.16. Labor and Employment Matters................................ 27
Section 6.17. Benefit Plan Obligations.................................... 27
Section 6.18. No Other Broker............................................. 30
Section 6.19. Undisclosed Liabilities..................................... 30
Section 6.20. Capitalization.............................................. 30
Section 6.21. Absence of Changes.......................................... 31
Section 6.22. Disclosure.................................................. 31
Section 6.23. Stockholders' Investment Intent............................. 31
Section 6.24. Securities Legend; Stop Transfer Instructions............... 31
Section 6.25. Pooling Representation Letters.............................. 32
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ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF BPB AND BPIM ............ 32
Section 7.1. Organization................................................ 32
Section 7.2. Authority; No Violation..................................... 33
Section 7.3. Consents and Approvals...................................... 34
Section 7.4. No Actions; Suits or Proceedings............................ 34
Section 7.5. Financial Ability........................................... 34
Section 7.6. No Other Broker............................................. 34
Section 7.7. BPB Shares.................................................. 35
Section 7.8. BPB Reports................................................. 35
Section 7.9. Pooling Matters............................................. 35
Section 7.10. Ownership of BPIM; No Prior Activities...................... 36
ARTICLE VIII.
COVENANTS................................ 36
Section 8.1. Conduct of Business......................................... 36
Section 8.2. Advisory Contract Consents and Approvals and
Other Actions............................................... 37
Section 8.3. Confidentiality and Announcements........................... 38
Section 8.4. Expenses.................................................... 39
Section 8.5. Release of the Company and its Affiliates................... 39
Section 8.6. Covenants of BPB............................................ 39
Section 8.7. Access; Certain Communications.............................. 39
Section 8.8. Regulatory Matters; Third Party Consents.................... 40
Section 8.9. Further Assurances.......................................... 41
Section 8.10. Insurance................................................... 41
Section 8.11. Notification of Certain Matters............................. 41
Section 8.12. Maintenance of Records...................................... 41
Section 8.13. Compliance with Section 15(f) of the 1940 Act by
the BPB..................................................... 42
Section 8.14. Company Distribution........................................ 42
Section 8.15. Non-Competition............................................. 42
Section 8.16. No Solicitation or Acceptance of Other Offers............... 42
Section 8.17. Pooling Accounting Treatment................................ 43
Section 8.18. Listing of BPB Shares....................................... 43
Section 8.19. Escrow Agreement............................................ 43
Section 8.20. Certain Agreements.......................................... 43
Section 8.21. Affiliate Letters........................................... 43
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ARTICLE IX.
CONDITIONS TO CLOSING.......................... 43
Section 9.1. Conditions to the BPB's and BPIM's Obligations.............. 43
Section 9.2. Conditions to the Company's and the Stockholders'
Obligations................................................. 45
Section 9.3. Mutual Conditions........................................... 47
ARTICLE X.
INDEMNIFICATION.............................. 47
Section 10.1. Obligations of the Stockholders............................. 47
Section 10.2. Obligations of BPB.......................................... 48
Section 10.3. Procedure................................................... 48
Section 10.4. Notice of Non-Third Party Claims............................ 50
Section 10.5. Survival of Indemnity....................................... 50
Section 10.6. Minimum Indemnification Obligation.......................... 51
Section 10.7. Claim Settlement Procedures................................. 51
Section 10.8. Subrogation................................................. 53
Section 10.9. Satisfaction of Indemnification Obligations................. 54
Section 10.10. Exclusive Remedy............................................ 54
ARTICLE XI.
TAX MATTERS.............................. 54
Section 11.1. Tax Cooperation............................................. 54
Section 11.2. Filing Responsibility....................................... 54
Section 11.3. Refunds or Credits.......................................... 55
ARTICLE XII.
TERMINATION/SURVIVAL........................... 55
Section 12.1. Termination................................................. 55
Section 12.2. Effect of Termination....................................... 56
Section 12.3. Survival of Representations and Warranties.................. 56
ARTICLE XIII.
MISCELLANEOUS............................. 57
Section 13.1. Expenses.................................................... 57
Section 13.2. Amendments; Extension; Waiver............................... 57
Section 13.3. Entire Agreement............................................ 58
Section 13.4. Specific Performance; Injunctive Relief..................... 58
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Section 13.5. Interpretation.............................................. 58
Section 13.6. Severability................................................ 58
Section 13.7. Notices..................................................... 58
Section 13.8. Binding Effect; Persons Benefiting; No Assignment........... 59
Section 13.9. Counterparts................................................ 60
Section 13.10. Governing Law............................................... 60
Section 13.11. Service; Jurisdiction....................................... 60
Section 13.12. Stockholders' Representatives............................... 60
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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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
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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 BP Investment
Management, Inc.;
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. (a) 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
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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 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.
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"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.
"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
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(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.
"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.
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"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.
"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
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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.
"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).
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"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 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.
8
<PAGE> 16
"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.
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<PAGE> 17
"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.
(b) The following terms shall have the meaning specified in
the indicated section of this Agreement:
Term Section
---- -------
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)
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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 cancelled 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.
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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 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.
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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.
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:
(1) 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;
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<PAGE> 21
(2) to the Stockholders' Representatives, the documents
required to be delivered pursuant to Section 9.2 hereof; and
(3) 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.
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
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<PAGE> 22
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.
(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
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<PAGE> 23
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.
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.
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<PAGE> 24
(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 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
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<PAGE> 25
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.
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
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<PAGE> 26
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 con
templated 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 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
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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 re quired to be made with respect thereto, that
they were 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
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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 dis
closed 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
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
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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.
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 lease hold 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
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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.
(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 Con
tracts 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
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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.
(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
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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 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
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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.
(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.
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(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.
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. ss. 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
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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 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
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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 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
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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) 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.
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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 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
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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 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.
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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 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
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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 here of) 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 (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
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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 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
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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 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 VIII.
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
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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 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
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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 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).
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(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 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
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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, 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,
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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 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 re placement policies and maintain such replacement
policies in effect until and including the Closing Date.
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Section 8.11. NOTIFICATION OF CERTAIN MATTERS. (a) 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
Re cords 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.
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
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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.
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.
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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 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;
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(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 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;
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(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;
(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;
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(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 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
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(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 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
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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 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
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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, 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.
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(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 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.
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(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.
(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
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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' 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
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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 1/8 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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<PAGE> 63
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
(v) at the election of BPB or the Stockholders'
Representatives, if the Closing Date shall not be on or before
December 1, 1997.
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<PAGE> 64
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 XIII.
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.
(b) Notwithstanding Section 13.1(a), the Company shall pay the
following costs and expenses of the transactions contemplated hereby:
57
<PAGE> 65
(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.
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
58
<PAGE> 66
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
59
<PAGE> 67
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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<PAGE> 68
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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<PAGE> 69
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
<PAGE> 70
WESTFIELD CAPITAL MANAGEMENT
COMPANY, INC.
ATTEST: /s/ Jim A. Roeting By /s/ Arthur J. Bauernfeind
-------------------------- ------------------------------
Name: Arthur J. Bauernfeind
Title: President
ATTEST: /s/ Jim 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
<PAGE> 71
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
<PAGE> 1
EXHIBIT 2.2
<PAGE> 2
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:
Section 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.
<PAGE> 3
Section 2. Demand Registration.
-------------------
2.1 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 here in, 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 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 in
tended method or methods of disposition stated in such request, PROVIDED that:
(a) 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;
(b) 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 neces-
2
<PAGE> 4
sary to reduce the aggregate number of Covered Shares to be registered in
response to such request to not less than 800,000 Covered Shares;
(c) 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 re quired 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;
(d) 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 Black
out;
(e) 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 dis closed 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
3
<PAGE> 5
(f) 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.
2.2 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.
2.3 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.
2.4 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 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
4
<PAGE> 6
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.
2.5 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 under written 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.
Section 3. Piggyback Registration.
----------------------
3.1 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
5
<PAGE> 7
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 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:
(a) 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;
(b) 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 Re questing
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
6
<PAGE> 8
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 Stock holder for inclusion in such registration from such
registration by notice to BPB within 5 days after receipt of BPB's notice; and
(c) 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.
3.2 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.
Section 4. Registration Procedures.
-----------------------
4.1 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:
(a) 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;
7
<PAGE> 9
(b) 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;
(c) 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;
(d) 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;
(e) immediately notify each Requesting Stockholder (i) of the
time any registration statement
8
<PAGE> 10
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
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.
9
<PAGE> 11
Each Stockholder hereby agrees to promptly notify BPB of any changes in the
information provided to BPB; and
(f) 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.
4.2 Underwriting.
------------
(a) 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.
(b) 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
10
<PAGE> 12
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.
(c) 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.
(d) 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.
4.3 Blackout Periods.
----------------
(a) 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:
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<PAGE> 13
(i) 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
(ii) 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");
12
<PAGE> 14
PROVIDED that BPB may not impose a Transaction Blackout during any underwritten
public offering.
(b) 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.
4.4 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.
Section 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.
Section 6. Indemnification and Contribution.
--------------------------------
(a) 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
13
<PAGE> 15
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 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.
(b) 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
14
<PAGE> 16
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.
(c) 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.
Section 7. Benefits and Termination of Registration Rights.
------------------------------------------------
7.1 EXERCISE. Registration rights granted hereunder may only be
exercised by the Stockholders or their permitted assigns.
7.2 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.
7.3 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
15
<PAGE> 17
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.
Section 8. Certain Definitions.
-------------------
8.1 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 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.
8.2 COVERED SHARES. "Covered Shares" means the Shares and any stock
dividends or distributions made
16
<PAGE> 18
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.
Section 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.
Section 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.
Section 11. Miscellaneous.
-------------
11.1 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 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.
11.2 GOVERNING LAW; JURISDICTION. This Agreement shall be
construed, performed and enforced in accor-
17
<PAGE> 19
dance with, and governed by, the laws of the Commonwealth of Massachusetts
(without giving effect to the principles of conflicts of laws thereof).
11.3 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.
11.4 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
18
<PAGE> 20
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.
11.5 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:
(a) 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
(b) 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.
11.6 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.
11.7 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.
19
<PAGE> 21
11.8 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.
11.9 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.
20
<PAGE> 22
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
<PAGE> 1
EXHIBIT 99.1
<PAGE> 2
CONTACT: Carey Davis
FOR IMMEDIATE RELEASE (617) 912-1941 or (617) 237-4327
BOSTON PRIVATE BANCORP, INC. ANNOUNCES
PURCHASE OF WESTFIELD CAPITAL MANAGEMENT
(AUGUST 13, 1997) BOSTON, MA -- Timothy L. Vaill, President and CEO of Boston
Private Bancorp, Inc. (OTC:BPBC) today announced that its investment management
arm, Boston Private Investment Management, Inc. will acquire Boston-based
Westfield Capital Management, Inc., an investment firm with assets under
management of $1.3 billion. In this transaction, which is accounted for as a
pooling of interests, Westfield's shareholders will receive 3,918,367 shares of
newly issued Boston Private Bancorp, Inc., common stock. In 1997 through August
12th, the price of Boston Private Bancorp, Inc., stock has ranged from 4 7/8 to
8 1/4. The stock price average during this period was approximately 6 1/8. This
represents the Company's second investment management acquisition since 1995.
Established in 1989 by C. Michael Hazard, Westfield Capital Management
specializes in separately managed, growth equity portfolios. Over half of
Westfield's $1.3 billion in assets under management belongs to high net worth
individuals. The remainder of its client base consists of corporate pension
funds, endowments and foundations. Westfield has distinguished itself in the
marketplace by providing a high level of client service and communications.
Boston Private Bancorp, Inc. is the parent company of Boston Private
Bank & Trust Company, a private bank serving clients in this region with banking
and investment products.
<PAGE> 3
Its investment management and trust services business, under the leadership of
James D. Henderson, has approximately $825 million of assets under management.
According to Mr. Vaill, "This purchase reinforces our position in the
marketplace as a leading provider of private banking services with investment
management as a primary focus. Immediately, it takes us to over $2 billion in
client assets under management and broadens our product offering considerably.
Most importantly, however, this acquisition gives us an attractive balance
between our interest rate driven business and our fee income, which is expected
to account for more than 50% of total revenues in 1997. This means, ultimately,
that we can pursue our strategic growth goals with solid prospects for revenue
diversification, while striving to satisfy the expectations of our clients and
shareholders."
Mr. Hazard commented, "We are extremely pleased to join Boston Private
in this marketplace. I believe, at this point in time, the route to steady
growth in our business is through a full service firm which has size and can
also offer a range of services and products to high net worth individuals and
institutions."
Added Mr. Hazard, "I look forward to being part of a team determined
to build a firm that will do a first class job for clients and produce a
rewarding career path for the officers and employees of Westfield Capital and
Boston Private."
The investment management principals of Westfield Capital, in addition
to Mr. Hazard, include Arthur J. Bauernfeind, Michael J. Chapman, Stephen C.
Demirjian and William A.
<PAGE> 4
Muggia. The Company will maintain the Westfield Capital name and its offices at
Boston's One Financial Center. Said Mr. Vaill, "Our intention is to have
Westfield retain its own identity as it continues to provide clients with the
high caliber of service that has been the basis of its substantial past
successes."
According to Mr. Vaill, "In addition to having a significant level of
high net worth clients, Westfield shares our investment philosophy as well as
our dedication to exceptional client service. Westfield offers us a lengthy
tenure of success in the area of investment management, a disciplined equity
management process and a strong commitment to their clients.
Boston Private Bancorp, Inc., offers a full range of banking and
investment management and trust services to its domestic and international
clientele. The Company also offers a First Time Homebuyers Program within the
Boston Urban Community and is an active participant in the SBA Lending Program
for small business owners.
