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EXHIBIT 10.2
THE PIONEER GROUP, INC.
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SUPPLEMENTAL AGREEMENT NO. 4
Dated as of June 30, 1999
amending the
Note Agreement dated as of August 14, 1997
(as amended)
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8.95% Senior Notes due 2004
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THE PIONEER GROUP, INC.
SUPPLEMENTAL AGREEMENT NO. 4
as of June 30, 1999
Re: 8.95% Senior Notes due 2004
The Travelers Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
THE PIONEER GROUP, INC., a Delaware corporation (the
"COMPANY"), hereby agrees with you as follows:
SECTION 1. AMENDMENTS. Pursuant to the Note Agreement dated as
of August 14, 1997, as amended by Supplemental Agreement No. 1 and Supplemental
Agreement No. 2, each dated as of September 30, 1998 and Supplemental Agreement
No. 3, dated as of December 29, 1998 (as so amended, the "NOTE AGREEMENT"),
entered into by the Company with The Travelers Insurance Company, the Company
issued and sold $20,000,000 aggregate principal amount of its Senior Notes due
2004 (the "NOTES"). Unless the context otherwise requires, capitalized terms
used herein without definition have the respective meanings ascribed thereto in
the Note Agreement. The Notes originally bore an interest rate of 7.95% per
annum. Pursuant to Supplemental Agreement No. 1, such interest rate was changed
to a floating rate of interest as therein described. Pursuant to Supplemental
Agreement No.3, such interest rate was changed to a fixed rate of 8.95% per
annum. The Company has requested you, as the holder of all of the outstanding
Notes, further to amend the Note Agreement. Subject to this Supplemental
Agreement No. 4 (this "SUPPLEMENTAL Agreement") becoming effective as
hereinafter provided, the Company and the holder of the Notes do hereby agree
that the Note Agreement is amended pursuant to Section 11.1 of the Note
Agreement as follows:
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A. Section 1 of the Note Agreement is amended by:
1. deleting the definitions of "Core Mutual Fund Subsidiary",
"Pioneer Goldfield Entities" and "Subsidiary Guarantors" in their
entirety and replacing them with the following new definitions:
"'CORE MUTUAL FUND SUBSIDIARY' means each of Pioneer
Investment Management, Inc. (f/k/a Pioneering Management
Corporation), Pioneer Funds Distributor, Inc., Pioneering
Services Corporation, Pioneer Management (Ireland) Ltd. and
any other Borrower Subsidiary (as defined in the Bank Credit
Facility) and any other Person which becomes a Subsidiary of
the Company after the date of this Agreement if such Person
engages in activities similar or related to the business
conducted by any Core Mutual Fund Subsidiary and is approved
by the Required Holders."
* * * *
"'PIONEER GOLDFIELD ENTITIES' means Pioneer Goldfields
Holdings, Inc., Pioneer Goldfields II Limited, PGH Nebraska,
Inc., Pioneer Goldfields Trust, Pioneer Goldfields Limited and
Teberebie Goldfields Limited."
* * * *
"'SUBSIDIARY GUARANTORS' means Pioneer Management (Ireland)
Ltd., Pioneer Investment Management, Inc. (f/k/a Pioneering
Management Corporation) and Pioneering Services Corporation,
each of their Wholly Owned Subsidiaries and any other Wholly
Owned Subsidiary from time to time so designated by the
Company and approved by the Required Holders."
2. adding the following new definitions:
"'PGH NEBRASKA, INC.' means a newly-incorporated Delaware
corporation and a Wholly-Owned Subsidiary, which principally
shall purchase assets from and lease such assets back to
Pioneering Services Corporation."
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"'PIONEER GOLDFIELDS II LIMITED' means a newly-incorporated
Channel Islands company to be domesticated in the United
States and a Wholly Owned Subsidiary."
"'PIONEER GOLDFIELDS TRUST' means a newly-formed
Massachusetts business investment trust and a Wholly Owned
Subsidiary."
B. Section 7.5.3 is amended to read in its entirety as
follows:
"7.5.3. CONSOLIDATED TANGIBLE NET WORTH.
Consolidated Tangible Net Worth shall:
(a) on June 30, 1999, equal or exceed $120,000,000,
increased by an amount equal to 50% of the after-tax gain on
the sale or disposition of assets or capital stock of Pioneer
Goldfields Entities;
(b) on and after July 1, 1999, and through December 30,
1999, at all times equal or exceed $120,000,000; provided,
however, that on the first day of each fiscal quarter of the
Company beginning with the fiscal quarter ending September 30,
1999, such dollar amount shall be increased by an amount equal
to 50% of the sum of (i) the Consolidated Net Income (only if
in excess of zero) for each of the fiscal quarters ended since
July 1, 1999 and (ii) the after-tax gain on the sale or
disposition of assets or capital stock of Pioneer Goldfields
Entities;
(c) on and after December 31, 1999, and through June 29,
2000, at all times equal or exceed the greater of (i)
$125,000,000 or (ii) $120,000,000, increased on the first day
of each fiscal quarter of the Company beginning with the
fiscal quarter ending December 31, 1999, by an amount equal to
50% of the sum of (A) the Consolidated Net Income (only if in
excess of zero) for each of the fiscal quarters ended since
July 1, 1999 and (B) the after-tax gain on the sale or
disposition of assets or capital stock of Pioneer Goldfields
Entities; and
(d) on and after June 30, 2000, at all times equal or
exceed the greater of (i) $130,000,000 or (ii)
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$120,000,000, increased on the first day of each fiscal
quarter of the Company beginning with the fiscal quarter
ending June 30, 2000, by an amount equal to 50% of the sum of
(A) the Consolidated Net Income (only if in excess of zero)
for each of the fiscal quarters ended since July 1, 1999 and
(B) the after-tax gain on the sale or disposition of assets or
capital stock of Pioneer Goldfields Entities."
C. Section 7.9.1 is amended to read in its entirety as
follows:
"7.9.1. Investments of the Company and each Subsidiary of the
Company that is not a Core Mutual Fund Subsidiary; provided, however,
that immediately before and after giving effect to such Investment, no
Default exists; provided, further that (a) on and after July 1, 1999
and through March 31, 2000, the Company and any Subsidiary will only
have outstanding, acquire, commit itself to acquire or hold any new
Investments, including Guarantees permitted by Section 7.7, in the
Company's or any Subsidiary's international operations that in the
aggregate will not exceed $20,000,000 and (b) on and after April 1,
2000 and through March 31, 2001, the Company and any Subsidiary will
only have outstanding, acquire, commit itself to acquire or hold any
new Investments (in addition to the new Investments permitted under the
foregoing clause (a)), including Guarantees permitted by Section 7.7,
in the Company's or any Subsidiary's international operations that in
the aggregate will not exceed $20,000,000."
D. Section 7.9.7 is amended to read in its entirety as
follows:
"7.9.7. Guarantees permitted by Section 7.7, provided,
however, that on and after July 1, 1999 and through March 31, 2000, the
Company and any Subsidiary will only have outstanding, acquire, commit
itself to acquire or hold any new Guarantees in the Company's or any
Subsidiary's international operations that in the aggregate, together
with other new Investments, will not exceed $20,000,000; provided,
further, that on and after April 1, 2000 and through March 31, 20001,
the Company and any Subsidiary will only have outstanding, acquire,
commit itself to acquire or hold any new Guarantees Investments (in
addition to the new
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Guarantees permitted under the foregoing proviso) in the Company's or
any Subsidiary's international operations that in the aggregate,
together with other new Investments, will not exceed $20,000,000."
E. Section 7.11.3 is amended to read in its entirety as
follows:
"7.11.3. Subject to Section 9.1.13, any of the Pioneer
Goldfields Entities may be merged with or liquidated into the Company,
or may be merged with, liquidated into or contributed to any of the
other Pioneer Goldfields Entities."
F. Section 7.11.4 is amended to read in its entirety as
follows:
"7.11.4. Other than as provided in Section 7.11.6, the Company
and each Subsidiary of the Company which is not a Core Mutual Fund
Subsidiary or a Pioneer Goldfields Entity may enter into a merger,
consolidation, sale, lease, sale and leaseback, sublease or other
disposition of its assets, provided that immediately before and after
giving effect to such transaction, no Default exists; and provided
further that any sale of equity interests in any of the Pioneer
Goldfields Entities shall be in accordance with Section 7.11.5."
G. A new Section 7.11.7 is hereby added to the Note Agreement
to read as follows:
"7.11.7. Pioneering Services Corporation, a Wholly
Owned Subsidiary, may enter into a sales and lease back
transaction with PGH Nebraska, Inc., a Wholly Owned
Subsidiary, as heretofore described to the holders of the
Notes."
H. AMENDMENT TO EXHIBIT 8.1. Exhibit 8.1 of the Note
Agreement, entitled "the Company and its Subsidiaries," is deleted in its
entirety and replaced with Exhibit A hereto.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represe nts and warrants to you as follows:
A. ORGANIZATION, AUTHORIZATION, ETC. The Company and each of
its Subsidiaries is a corporation duly organized, validly
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existing and in good standing under the laws of the State of its organization,
and has all requisite power and authority to execute, deliver and perform its
obligations under the Note Agreement as amended by this Supplemental Agreement.
The execution, delivery and performance of this Supplemental
Agreement has been duly authorized by all necessary corporate and, if required,
stockholder action on the part of the Company and each Subsidiary Guarantor, as
applicable. This Supplemental Agreement is a legal, valid and binding obligation
of the Company and the Subsidiary Guarantors, as applicable, enforceable against
the Company or such Subsidiary Guarantors in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
B. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The
execution, delivery and performance by the Company or the Subsidiary Guarantors
of this Supplemental Agreement does not and will not (A) contravene, result in
any breach of, or constitute a default under, or result in the creation of any
Lien in respect of any property of the Company or any Subsidiary under any
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to which the
Company or any Subsidiary is bound or by which the Company or any Subsidiary or
any of their respective properties may be bound or affected, (B) conflict with
or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or (C) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Subsidiary.
C. GOVERNMENTAL AUTHORIZATIONS, ETC. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company or any Subsidiary Guarantor of this Supplemental Agreement.
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D. NO DEFAULT, ETC. No Event of Default or Default has
occurred and is continuing, and neither the Company nor any Core Mutual Fund
Subsidiary is in default (whether or not waived) in the performance or
observance of any of the terms, covenants or conditions contained in any
instrument evidencing any Indebtedness and there is no pending request by the
Company (except pursuant to this Supplemental Agreement) or any such Subsidiary
for any amendment or waiver in respect of any contemplated or possible default
with respect to such Indebtedness and no event has occurred and is continuing
which, with notice or lapse of time or both, would become such a default.
E. NO UNDISCLOSED FEES. The Company has not, directly or
indirectly, other than with respect to the payment of consideration disclosed to
the Noteholders, paid or caused to be paid any consideration (as supplemental or
additional interest, a fee or otherwise) to any party to the Bank Credit
Facility in order to induce such party to enter into an agreement substantially
similar to this Supplemental Agreement, nor has the Company agreed to made any
such payment.
SECTION 3. REPRESENTATION OF THE NOTEHOLDER. You represent to
the Company that you are the beneficial owner of Notes in an aggregate principal
amount of $20,000,000.
SECTION 4. EFFECTIVENESS OF THIS SUPPLEMENTAL AGREEMENT. This
Supplemental Agreement shall become effective on the date (the "EFFECTIVE DATE")
on which all of the following conditions precedent shall have been satisfied:
A. PROCEEDINGS. All proceedings taken by the Company and the
Subsidiary Guarantors in connection with the transactions contemplated hereby
and all documents and papers incident thereto shall be satisfactory to you, and
you and your special counsel shall have received all such counterpart originals
or certified or other copies of such documents and papers, all in form and
substance satisfactory to you, as you or they may reasonably request in
connection therewith.
B. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 of this Supplemental Agreement
shall be true on and as of the Effective Date as though such representations and
warranties had been made on and as of the Effective Date, and you
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shall have received a certificate of a senior financial officer of the Company,
dated the Effective Date, to such effect.
C. PAYMENT OF FEES. The Company shall have paid you an
amendment fee equal to 0.25% of the unpaid principal amount of the Notes and an
administrative fee of $25,000. The Company shall have also paid the fees and
disbursements of your special counsel as contemplated by Section 5 of this
Supplemental Agreement.
SECTION 5. EXPENSES. Without limiting the generality of
Section 5.8 of the Note Agreement, the Company agrees, whether or not the
transactions contemplated hereby are consummated, to pay the reasonable fees and
disbursements and other charges of Xxxxxxx Xxxx & Xxxxxxxxx, your special
counsel, for their services rendered in connection with such transactions and
with respect to this Supplemental Agreement and any other document delivered
pursuant to this Supplemental Agreement and reimburse you for your out-of-pocket
expenses in connection with the foregoing.
SECTION 6. RATIFICATION. Except as amended hereby, the Note
Agreement is in all respects ratified and confirmed and the provisions thereof
shall remain in full force and effect, and the Subsidiary Guarantors hereby
ratify their obligations thereunder and under the Subsidiary Guarantees to which
they are a party.
SECTION 7. COUNTERPARTS. This Supplemental Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
SECTION 8. GOVERNING LAW. This Supplemental Agreement shall
be governed by and construed in accordance with the laws of the State of New
York.
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If you are in agreement with the foregoing, please sign the
form of acceptance in the space below provided, whereupon this Supplemental
Agreement shall become a binding agreement between you and the Company, with the
approval of the Subsidiary Guarantors, subject to becoming effective as
hereinabove provided.
THE PIONEER GROUP, INC.
By /s/ Xxxx X. Xxxxx, Xx.
Title: President and CEO
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
SUBSIDIARY GUARANTORS
PIONEER INVESTMENT MANAGEMENT, INC.
By /s/ Xxxx X. Xxxxxxx
Title: Treasurer
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
PIONEER MANAGEMENT (IRELAND) LTD.
By /s/ Xxxx X. Xxxxx, Xx.
Title: Director
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
PIONEERING SERVICES CORPORATION
By /s/ Xxxx X. Xxxxxxx
Title: Treasurer
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
ACCEPTED
THE TRAVELERS INSURANCE COMPANY
By /s/ Xxxxxx Xxxxxxxxxxxx
Title: Investment Officer
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