1
Exhibit 10.61
THE PIONEER GROUP, INC.
CREDIT AGREEMENT
AMENDMENT NO. 3
This Agreement, dated as of August 14, 1997, is among The Pioneer Group,
Inc., a Delaware corporation (the "Company"), certain of its subsidiaries listed
on the signature pages hereto, the Lenders (as defined in the Credit Agreement
referenced below) and BankBoston, N.A., f/k/a The First National Bank of Boston,
as agent (the "Agent") for itself and the other Lenders. The parties agree as
follows:
1. REFERENCE TO CREDIT AGREEMENT: DEFINITIONS. Reference is made to the Credit
Agreement dated as of June 6, 1996, among the Company, certain of its
subsidiaries, the Lenders and the Agent (as amended, modified and in effect
prior to giving effect to this Agreement, the "Credit Agreement"). Terms defined
in the Credit Agreement as amended hereby (the "Amended Credit Agreement") and
not otherwise defined herein are used herein with the meanings so defined.
Except as the context otherwise explicitly requires, the capitalized terms
"Section" and "Exhibit" refer to sections hereof and exhibits hereto.
2. AMENDMENTS TO CREDIT AGREEMENT. Subject to all of the terms and conditions
hereof and in reliance upon the representations and warranties set forth in
Section 3, the Credit Agreement is amended as follows, effective upon the date
(the "Amendment Date") that the conditions specified in Section 4 are satisfied,
which conditions must be satisfied no later than August 25, 1997 or this
Agreement shall be of no force or effect:
a. AMENDMENT OF SECTION 1.44. Section 1.44 of the Credit Agreement is
amended to read in its entirety as follows:
"1.44. "COMPANY TOTAL DEBT" means, at any date, the following indebtedness
of the Company and the Core Mutual Fund Subsidiaries (excluding the B Share
Loan):
(a) Indebtedness in respect of borrowed money;
(b) Indebtedness evidenced by notes, debentures or similar instruments;
(c) Indebtedness in respect of Capitalized Leases;
(d) Indebtedness in respect of the deferred purchase price of assets (other
than normal trade accounts payable in the ordinary course of business);
(e) Indebtedness in respect of mandatory redemption or dividend rights on
capital stock (or other equity);
2
(f) Indebtedness in respect of unfunded pension liabilities.
(g) Indebtedness in respect of financial Guarantees (other than the OPIC
Guarantee to the extent such OPIC Guarantee is financially insured under
the Lloyds Policy) and letters of credit; and
(h) Indebtedness calculated in accordance with GAAP in respect of tax
deficiencies asserted in a notice of deficiency from the IRS issued
pursuant to Section 6212 (or similar or successor provisions) of the
Code.
For purposes of this Section 1.44 only, "Indebtedness" shall be calculated
on a Combined basis for the Company and the Core Mutual Fund Subsidiaries only,
and the amount of any Guarantee under this Section 1.44 and the amount of
Indebtedness resulting from such Guarantee shall be the stated or potential
maximum amount for which the Company is or may be directly or indirectly
liable."
b. AMENDMENT OF SECTION 1.47. Section 1.47 of the Credit Agreement is
amended to read in its entirety as follows:
"1.47. "CONSOLIDATED FIXED CHARGES" means, for any period, the sum of:
(a) the aggregate amount of interest, including payments in the
nature of interest under Capitalized Leases, accrued by the Company or
the Core Mutual Fund Subsidiaries (whether such interest is reflected as
an item of expense or capitalized), or other interest in respect of
other Indebtedness for which the Company or any Core Mutual Fund
Subsidiary may be liable directly or as a Guarantor (but only to the
extent of the Company's stated or potential maximum liability in respect
of such Indebtedness), calculated in accordance with GAAP on a Combined
basis for the Company and the Core Mutual Fund Subsidiaries only, pills
(b) the aggregate amount of all required or mandatory scheduled
payments, prepayments and sinking fund payments with respect to
principal paid or accrued by the Company or any Core Mutual Fund
Subsidiary in respect of Financing Debt other than the B Share Loan and
the Revolving Loan,
(c) only for periods after the B Share Conversion Date, the extent
to which the prepayments on the B Share Term Loan required by Section
4.3 exceed the B Share Collection Amount."
c. AMENDMENT OF SECTION 1.52. Section 1.52 of the Credit Agreement is
amended to read in its entirety as follows:
-2-
3
"1.52. "CREDIT DOCUMENTS" means:
(a) this Agreement and the Notes, each as from time to time in effect;
(b) all financial statements, reports, notices and certificates
delivered to any of the Lenders by the Company or any Subsidiary in connection
herewith or therewith;
(c) the Intercreditor Agreement, dated August 25, 1997, by and among the
Company, the Agent on behalf of the Lenders and The Travelers Insurance Company,
as amended and in effect from time to time; and
(d) any other present or future agreement or instrument from time to
time entered into among the Company or any Subsidiary on the one hand, and the
Agent or all the Lenders, on the other hand, relating to, amending or modifying
this Agreement or any other Credit Document referred to above or which is stated
to be a Credit Document (including the separate letter agreement between the
Company and the Agent relating to certain fees of the Agent), each as from time
to time in effect."
d. ADDITION OF SECTION 1.123A. A new Section 1.123A is added to the Credit
Agreement immediately after Section 1.123 of the Credit Agreement to read in its
entirety as follows:
"1.123A. "SENIOR NOTE AGREEMENT" means the Note Agreement, dated August
25, 1997, between the Company and The Travelers Insurance Company,
relating to the Senior Notes of the Company, as amended from time to
time in accordance with Section 7.18."
e. ADDITION OF SECTION 1.123B. A new Section 1.123B is added to the Credit
Agreement immediately after Section 1.123A of the Credit Agreement to read in
its entirety as follows:
"1.123B. "SENIOR NOTES" means the 7.95% Senior Notes due 2004 of the
Company, as amended from time to time in accordance with Section 7.18."
f. AMENDMENT OF SECTION 4.2.3, Section 4.2.3 of the Credit Agreement is
amended to read in its entirety as follows:
"4.2.3. PREPAYMENT OF REVOLVING LOAN. Within five Banking Days after the
consummation of any underwritten public offering or other sale of any
equity interest in any of the Pioneer Goldfields Entities pursuant to
Section 7.11.5, the Company shall apply to the prepayment of the
Revolving Loan and the permanent reduction of the Maximum Amount of
Revolving Credit an amount equal to the sum of (i) the product of (x)
the ratio which the Maximum Amount of Revolving Credit in effect at such
time bears to
-3-
4
the sum of such Maximum Amount of Revolving Credit plus $20,000,000,
multiplied by (y) an amount equal to fifty percent (50%) of the net cash
proceeds received by the Company or any of its Subsidiaries in such
offering or sale, plus (ii) an amount of cash equal to the aggregate
amount of Senior Notes not so purchased pursuant to Section 7.11.5 of
the Senior Note Agreement. For purposes of this Section 4.2.3, "net cash
proceeds" shall reflect the deduction of any federal, state or local tax
obligations which the Company or any Subsidiary may have as a result of
such public offering or sale."
g. AMENDMENT TO SECTION 7.6.2. Section 7.6.2 of the Credit Agreement is
amended to read in its entirety as follows:
"7.6.2. Indebtedness of the Company and each Subsidiary of the Company
which is not a Core Mutual Fund Subsidiary, including Indebtedness in
respect of the Senior Note Agreement, PROVIDED, that immediately before
and after giving effect to the incurrence of such Indebtedness, no
Default exists."
h. ADDITION OF SECTION 7.7.3. A new Section 7.7.3 is added to the Credit
Agreement immediately after Section 7.7.2 of the Credit Agreement to read in its
entirety as follows:
"7.7.3. Guarantees by the Core Mutual Fund Subsidiaries pursuant to
Section 6 of the Senior Note Agreement."
i. ADDITION OF SECTION 7.8.14. A new Section 7.8.14 is added to the Credit
Agreement immediately after Section 7.8.13 to read in its entirety as follows:
"7.8.14. The agreement by the Company and the Core Mutual Fund
Subsidiaries contained in Section 7.8 of the Senior Note Agreement not
to create, incur or enter into, or suffer to be created or incurred or
to exist, any Lien other than as permitted in such Section 7.8."
j. ADDITION OF SECTION 7.18. A new Section 7.18 is added to the Credit
Agreement immediately after Section 7.17 of the Credit Agreement to read in its
entirety as follows:
"7.18 SENIOR NOTE AGREEMENT MATTERS.
7.18.1. The Company will not, and will not permit any Subsidiary to,
without the prior written consent of the Required Lenders, (i)
voluntarily repay or prepay any Indebtedness outstanding under the
Senior Note Agreement, (ii) consent to any amendment of the amount or
-4-
5
date of any required repayment or prepayment of any Indebtedness
outstanding under the Senior Note Agreement except for an amendment of
any such date to a date on or after the earlier of (x) the date of such
required repayment or prepayment as in effect prior to such amendment
and (y) the ninety-first day after the termination of this Agreement.
7.18.2. The Company will not, and will not permit any Subsidiary
to, enter into any amendment, modification or supplement to the Senior
Note Agreement that contains conditions, covenants or events of default
that are more burdensome or restrictive to the Company or such
Subsidiary than those contained in the Senior Note Agreement are to the
Company on the date hereof."
k. AMENDMENT TO EXHIBIT 1.126. Exhibit 1.126 of the Credit Agreement is
amended to read in its entirety as set forth on Exhibit 1.126 hereto.
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to enter
into this Agreement, the Company represents and warrants to each of the Lenders
that:
a. LEGAL EXISTENCE, ORGANIZATION. Each of the Company and its
Subsidiaries is duly organized and validly existing and in good standing under
the laws of the jurisdiction of its incorporation, with all power and
authority, corporate or otherwise, necessary to (a) enter into and perform this
Agreement, the Amended Credit Agreement and each other Credit Document to which
it is party and (b) own its properties and carry on the business now conducted
or proposed to be conducted by it. Each of the Company and its subsidiaries has
taken, or shall have taken on or prior to the Amendment Date, all corporate or
other action required to make the provisions of this Agreement, the Amended
Credit Agreement and each other Credit Document to which it is party the valid
and enforceable obligations they purport to be.
b. ENFORCEABILITY. The Company and each of its Subsidiaries which are
signatories hereto have duly executed and delivered this Agreement. Each of this
Agreement and the Amended Credit Agreement is the legal, valid and binding
obligation of the Company and such Subsidiaries and is enforceable in accordance
with its terms.
c. NO LEGAL OBSTACLE TO AGREEMENTS. Neither the execution, delivery or
performance of this Agreement, nor the performance of the Amended Credit
Agreement, nor the consummation of any other transaction referred to in or
contemplated by this Agreement, nor the fulfillment of the terms hereof or
thereof, has constituted or resulted in or will constitute or result in:
(1) any breach or termination of the provisions of any agreement,
instrument, deed or lease to which the Company or any Subsidiary is a party
or
-5-
6
by which it is bound, or of the Charter or By-laws of the Company or any
Subsidiary;
(2) the violation of any law, judgment, decree or governmental order,
rule or regulation applicable to the Company or any Subsidiary;
(3) the creation under any agreement, instrument, deed or lease of any
Lien upon any of the assets of the Company or any Subsidiary; or
(4) any redemption, retirement or other repurchase obligation of the
Company or any Subsidiary under any Charter, By-law, agreement, instrument,
deed or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by the Company or any Subsidiary in connection with the
execution, delivery and performance of this Agreement or the performance of the
Amended Credit Agreement, or the consummation of the transactions contemplated
hereby or thereby.
d. NO DEFAULT. Immediately before and after giving effect to the amendments
set forth in Section 2, no Default will exist.
e. INCORPORATION OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Section 8 of the Credit Agreement are true and correct
on the date hereof as if originally made on and as of the date hereof (except to
the extent any representation or warranty refers to a specific earlier date).
4. CONDITIONS. The effectiveness of this Agreement shall be subject to the
satisfaction of the following conditions:
a. OFFICER'S CERTIFICATE. The representations and warranties contained in
Section 3 shall be true and correct as of the Amendment Date with the same force
and effect as though originally made on and as of such date; no Default shall
exist on the Amendment Date prior to or immediately after giving effect to this
Agreement; as of the Amendment Date, no Material Adverse Change shall have
occurred; and the Company shall have furnished to the Agent on the Amendment
Date a certificate to these effects, in substantially the form of Exhibit 4.1,
signed by an Executive Officer or a Financial Officer.
b. PROPER PROCEEDINGS. All proper corporate proceedings shall have been
taken by each of the Company and the Subsidiaries to authorize this Agreement,
the Amended Credit Agreement and the transactions contemplated hereby and
thereby. The Agent shall have received copies of all documents, including
records of corporate proceedings which the Agent may have requested in
connection therewith, such
-6-
7
documents, where appropriate, to be certified by proper corporate or
governmental authorities.
c. EXECUTION BY LENDERS. Each of the Lenders shall have executed and
delivered this Agreement to the Company.
5. FURTHER ASSURANCES. Each of the Company and the Subsidiaries will, promptly
upon request of the Agent from time to time, execute, acknowledge and deliver,
and file and record, all such instruments and notices, and take all such action,
as the Agent deems necessary or advisable to carry out the intent and purposes
of this Agreement.
6. GENERAL. The Amended Credit Agreement and all of the other Credit Documents
are each confirmed as being in full force and effect. This Agreement, the
Amended Credit Agreement and the other Credit Documents referred to herein or
therein constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral, with respect to such
subject matter. The invalidity or unenforceability of any provision hereof shall
not affect the validity or enforceability of any other term or provision hereof.
The headings in this Agreement are for convenience of reference only and shall
not alter, limit or otherwise affect the meaning hereof. Each of this Agreement
and the Amended Credit Agreement is a Credit Document and may be executed in any
number of counterparts, which together shall constitute one instrument, and
shall bind and inure to the benefit of the parties and their respective
successors and assigns, including as such successors and assigns all holders of
any Note. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS (OTHER THAN THE CONFLICT OF LAWS RULES) OF THE COMMONWEALTH OF
MASSACHUSETTS.
Each of the undersigned has caused this Agreement to be executed and delivered
by its duly authorized officer as an agreement under seal as of the date first
above written.
THE PIONEER GROUP, INC. PIONEERING SERVICES CORP.
By: /s/ By: /s/
----------------------------- ---------------------------------
Title: Title:
00 Xxxxx Xxxxxx 00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000 Xxxxxx, Xxxxxxxxxxxxx 00000-0000
-7-
8
PIONEERING MANAGEMENT
CORPORATION
By: /s/
-----------------------------
Title:
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
PIONEERING MANAGEMENT (IRELAND) LTD.
By: /s/
-----------------------------
Title:
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
PIONEER FUNDS DISTRIBUTOR, INC.
By: /s/
-----------------------------
Title:
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
-8-
9
BANKBOSTON, N.A.
By: /s/
-----------------------------
Title: Vice President
Financial Institutions Division
000 Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Telex: 940581
THE BANK OF NEW YORK
By: /s/
-----------------------------
Title:
Xxx Xxxx Xxxxxx, XXX-0
Securities Industry Division
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Telex:
SOCIETE GENERALE
By: /s/
-----------------------------
Title:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
-9-
10
STATE STREET BANK & TRUST COMPANY
By: /s/
-----------------------------
Title:
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Asset-Based Finance
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
BANQUE NATIONALE DE PARIS
By: /s/
-----------------------------
Title:
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, 00000
Telecopy: (000) 000-0000
MELLON BANK, N.A.
By: /s/
-----------------------------
Title:
One Mellon Bank Center
Mail Code: 1510270
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
-00-
00
XXXXXXXXX "X" SHARE BORROWING BASE CALCULATION
TOTAL ESTIMATED COLLECTIBLE AMOUNT
1. Calculate the Average Asset Under Management (AAUM) by averaging the prior
six months daily net asset values by Fund
2. Eight Year Projection of Assets Under Management by Quarterly Bucket
a. Calculate the six month average redemption rate by dividing the total
dollars redeemed over the prior six months by the AAUM calculated in (1)
above
b. Reduce the Assets Under Management calculated in (1) by the calculated
redemption rate (2.a.) to determine the projected AUM each year
3. Projected Annual Collection of CDSC (backend sales charge)
a. Calculate the historical six month redemptions charged a CDSC and use
this to determine the percentage of assets redeemed in (2.b.) which are
subject to a backend charge vs. those which are not
b. Apply the percentage (calculated in 3.a.) to each of the quarterly
buckets to determine the total assets redeemed each year.
c. Apply the applicable CDSC rate (from Pioneer's sales fee schedule) to
the redemptions calculated in (3.b.) to determine the total collectible
CDSC amount
4. Projected Collection of Asset Based Sales Charges (ABSC)
a. Multiply 75 bpts each year to the projected AUM calculated in 2 above
5. Sum Projected CDSC and ABSC collections in 3 and 4 above for the eight year
period to determine the total collectible amount
6. Subtract from the total collectible amount in (5) the product of (i) the
percentage which the aggregate amount of Senior Notes outstanding comprises
of the sum of (x) the aggregate amount of Senior Notes outstanding plus (y)
the aggregate amount of the B Share an and Revolving Loan outstanding,
multiplied by (ii) the aggregate amount of the B Share Loan outstanding, to
determine the Total Estimated Collectible Amount.
-11-
12
7. Determine the Net Dealer Advances adjusted for ABSCs collected at original
cost for sales prior to the loan agreement.
8. Compare the Total Estimated Collectible Amount in (6) to the net dealer
advances in (7) to determine the coverage ratio
-12-
13
OFFICER'S CERTIFICATE
Pursuant to Section 4.1 of Amendment No. 3 to Credit Agreement dated as of
August __ 1997 (the "Amendment") among The Pioneer Group, Inc., a Delaware
corporation (the "Company"), certain of its subsidiaries signatories thereto,
the Lenders and BankBoston, N.A., f/k/a The First National Bank of Boston, as
agent (the "Agent") for itself and the other Lenders, which amends the Credit
Agreement dated as of June 6, 1996 (as amended, modified and in effect prior to
giving effect to the Amendment, the "Credit Agreement"), among the Company,
certain of its subsidiaries signatories thereto, the Lenders and the Agent, the
Company hereby certifies that the representations and warranties contained in
Section 3 of the Amendment are true and correct on and as of the Amendment Date
with the same force and effect as though originally made on and as of the
Amendment Date; no Default exists on the Amendment Date or will exist
immediately after giving effect to the Amendment; and as of the Amendment Date,
no Material Adverse Change has occurred.
Terms defined in the Amendment and not otherwise defined herein are used
herein with the meanings so defined.
This certificate has been executed by a duly authorized Executive Officer or
Financial Officer this ____ day of August, 1997.
THE PIONEER GROUP, INC.
By:________________________________
Name:
Title:
-13-
14
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of August 14, 1997 between: (x) the
institutional investor listed first on the Signature Pages hereof (herein,
together with the holders from time to time of the Senior Notes referred to
below, the "SENIOR NOTEHOLDERS"), and (y) the lenders (including the agent bank)
listed on the Signature Pages hereof (herein, together with any other
institution which may become a lender under the Credit Agreement referred to
below, the "BANKS").
WHEREAS, the Senior Noteholder listed on the Signature Pages hereof proposes
to purchase 7.95% Senior Notes due 2004 (the "SENIOR NOTES") of The Pioneer
Group, Inc. (the "Company"), issued in an aggregate original principal amount of
$20,000,000 pursuant to the Note Agreement dated as of August 14, 1997 (as
hereafter amended, modified or supplemented from time to time, the "NOTE
AGREEMENT") entered into by such Senior Noteholder with the Company and certain
of its Subsidiaries designated therein as Guarantors;
WHEREAS, the Company is a party to the Credit Agreement dated as of June 6,
1996 among the Company, certain of its Subsidiaries which are signatories
thereto, including Subsidiaries designated therein as Borrower Subsidiaries or
Guarantors, each Bank and the Agent (as amended, modified or supplemented and in
effect from time to time, the "CREDIT AGREEMENT"), pursuant to which certain
revolving credit and term loan facilities have been made available to the
Company and said Borrower Subsidiaries;
WHEREAS, pursuant to the Note Agreement the existing Subsidiaries of the
Company designated as Guarantors therein have jointly and severally guaranteed
the payment of all obligations of the Company under the Note Agreement and the
Senior Notes and all other Credit Obligations referred to in the Note Agreement
and certain other Subsidiaries may hereafter guarantee such obligations by
joining the Note Agreement pursuant to Section 9.6 thereof (such existing and
future guarantees are collectively the "SENIOR NOTE GUARANTEES"), and pursuant
to the Credit Agreement the Company and said Subsidiaries also have jointly and
severally guaranteed the payment of all obligations of the Company and said
Borrower Subsidiaries in respect of such revolving credit and term loan
facilities and all other Credit Obligations referred to in the Credit Agreement
and certain other Subsidiaries may hereafter guarantee such obligations by
joining the Credit Agreement pursuant to Section 6.9 thereof (such existing and
future guarantees are collectively the "CREDIT AGREEMENT GUARANTEES"); and
WHEREAS, it is a condition precedent to the purchase of the Senior Notes
under the Note Agreement that the Banks enter into this Agreement; and
NOW, THEREFORE, the parties hereto agree as follows:
-14-
15
1. DEFINED TERMS. The following terms shall have the following respective
meanings:
"BANKS" has the meaning specified in the Introduction hereof.
"COMPANY" has the meaning specified in the first "Whereas" hereof.
"CREDIT AGREEMENT" has the meaning specified in the second "Whereas" hereof.
"CREDIT AGREEMENT GUARANTEES" has the meaning specified in the third
"Whereas" hereof.
"CREDIT AGREEMENT OBLIGATIONS" means the Credit Obligations as defined in
the Credit Agreement.
"EXPOSURE PERCENTAGE" means, with respect to any Senior Noteholder or Bank
at any particular time, the result of dividing (i) the sum of the aggregate
principal amount of all Senior Obligations then outstanding and held by such
Senior Noteholder or Bank plus accrued interest then due and payable in respect
of such aggregate principal amount by (ii) the sum of the aggregate principal
amount of all Senior Obligations then outstanding plus all accrued interest then
due and payable in respect thereof as aforesaid.
"GUARANTOR" means any Guarantor under the Note Agreement and any Guarantor
under the Credit Agreement.
"GUARANTOR'S OBLIGATIONS" means, as to any Guarantor, the obligations of
such Guarantor with respect to principal and interest under the Senior Note
Guarantees and the Credit Agreement Guarantees.
"NOTE AGREEMENT" has the meaning specified in the first "Whereas" hereof.
"PERSON" means and includes an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
"REQUIRED HOLDERS" means the holders of at least 66-2/3% in aggregate
principal amount of the outstanding Senior Notes.
"REQUIRED LENDERS" has the meaning specified in the Credit Agreement.
"SENIOR NOTE GUARANTEES" has the meaning specified in the third "Whereas"
hereof.
-15-
16
"SENIOR NOTEHOLDERS" has the meaning specified in the Introduction hereof.
"SENIOR NOTE OBLIGATIONS" means the Credit Agreement Obligations as defined
in the Note Agreement.
"SENIOR OBLIGATIONS" means the Senior Note Obligations and the Credit
Agreement Obligations.
2. PARI PASSU NATURE OF GUARANTOR'S OBLIGATIONS. The Senior Noteholders and
the Banks acknowledge and agree that they intend that all Guarantor's
Obligations will rank PARI PASSU in right of payment (including without
limitation equal in seniority) to each other, notwithstanding any claim or
proceeding relating to or affecting any Guarantor asserted by or on behalf of
the Company or such Guarantor, the bankruptcy estate of such Guarantor, the
Banks, the Senior Noteholders or any of their respective successors or assigns
under any law relating to bankruptcy, insolvency, reorganization or fraudulent
conveyance and without regard to any differences between the consideration
received or other benefits, if any, respectively derived by such Guarantor from
or in exchange for its Senior Note Guarantee and its Credit Agreement Guarantee
and from or in exchange for the incurrence of the Guarantor's Obligations of
such Guarantor. In furtherance of the foregoing, the Senior Noteholders and the
Banks acknowledge and agree that they shall not assert or in any way claim that
a Guarantor did not derive equal and ratable benefits from and in exchange for
its Senior Note Guarantee and its Credit Agreement Guarantee.
3. PRO RATA SHARING OF CERTAIN PAYMENTS.
(a) In the event that, at any time after the commencement and continuance
(or within the applicable preference period in a bankruptcy case) of any such
claim or proceeding referred to in Section 2 above relating to the Company or
any Guarantor, any holder of Senior Obligations realizes any amount in any
manner inconsistent with the intent expressed in Section 2 above, including
without limitation by the exercise of the right of setoff or banker's lien in
respect of any account or against any other asset maintained by the Company or
any Guarantor in respect of any Senior Obligations, then, subject to the
limitations of subsection (b) below: (i) such holder of Senior Obligations (the
"PURCHASING HOLDER") shall purchase (for cash or, if any such consideration
realized is other than cash, then at the Purchasing Holder's option, such other
consideration or cash equivalent to the fair market value of such consideration)
without recourse or warranty, from each other holder of Senior Obligations, an
interest in all of the Senior Obligations held by such other holder in an
aggregate amount equal to the amount so realized by the Purchasing Holder
multiplied by such other holder's Exposure Percentage before giving effect to
such realized amount and (ii) such other adjustments shall be made from time to
time as shall be equitable to ensure that all holders of Senior Obligations
share such payment ratably; provided that if all or any portion of the amount so
realized is thereafter recovered from the Purchasing Holder, such purchase
-16-
17
from each other holder of Senior Obligations shall be rescinded and the purchase
price restored (pro rata, based on each holder's Exposure Percentage immediately
before the purchase was made) to the extent of such recovery, but without
interest. For purposes of this Section all amounts realized by a Purchasing
Holder in respect of the Senior Obligations at any time prior to the payment in
full of all Senior Obligations held by such Purchasing Holder shall be deemed to
be applied by such Purchasing Holder to such Senior Obligations.
(b) No Purchasing Holder shall be obligated to purchase any interest in the
Senior Obligations held by any other holder of Senior Obligations if such other
holder's willful misconduct (unrelated to questions of consideration or benefits
as described in subsection (a) above) is determined in the applicable proceeding
to be the basis for avoidance or subordination, in whole or in part, of such
other holder's Senior Obligations.
4. AMENDMENT OR WAIVER OF THIS AGREEMENT. None of the terms and conditions
of this Agreement may be amended or waived in any manner whatsoever unless in
writing duly signed by the Required Holders and the Required Banks.
5. TERMINATION. This Agreement shall terminate on the date upon which either
one of the following conditions is satisfied: (a) all Senior Note Obligations
have been indefeasibly paid in full, or (b) all commitments to lend under the
Credit Agreement have been terminated and all Credit Agreement Obligations have
been indefeasibly paid in full.
6. INTERCREDITOR AGREEMENT CONTROLS. If any provision of this Agreement
shall be inconsistent with, or contrary to, any provision in the Note Agreement,
the Credit Agreement, any instrument evidencing any Senior Note Obligation or
any Credit Agreement Obligation, any Senior Note Guarantee or any Credit
Agreement Guarantee, the provision in this Agreement shall be controlling and
shall supersede such inconsistent provision to the extent necessary to give full
effect to all provisions contained in this Agreement.
7. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.
8. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be given to the parties hereto at the
following addresses (or at such other address as any party, including any
subsequent holder from time to time of the Senior Notes or any subsequent agent
under the Credit Agreement, may hereafter designate by notice to the other
parties hereto at the time)
-17-
18
SENIOR NOTEHOLDER:
The Travelers Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Securities Department Private Placements
Telecopy: 000-000-0000
BANKS:
BankBoston, N.A.
Financial Institutions Division
000 Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: 000-000-0000
The Bank of Xxx Xxxx
Xxx Xxxx Xxxxxx, XXX-x
Securities Industry Division
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Societe Generale
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
State Street Bank & Trust Company
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Asst-Based Finance
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: 000-000-0000
Banque Nationale de Paris
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Mellon Bank, N.A.
One Mellon Bank Center
Mail Code: 1510370
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy: 000-000-0000
-18-
19
9. FURTHER ASSURANCES. Each of the parties hereto agrees to execute and
deliver all such further documents and instruments and to use its best efforts
to take all such further action as may be reasonably necessary or advisable to
implement and give effect to the transactions contemplated hereby.
10. MISCELLANEOUS.
(a) This Agreement shall be binding upon the parties and the holders from
time to time of any Senior Obligations and shall inure to the benefit of and be
enforceable by the successors and assigns of the parties hereto. The rights and
obligations of any Bank or Senior Noteholder under this Agreement shall be
assigned automatically, without the need for the execution of any document or
any other action, to (and the term "Bank" or "Senior Noteholder" as used in this
Agreement shall include) any assignee, transferee or successor of such Bank or
Senior Noteholder under the Credit Agreement or the Note Agreement, as the case
may be, in accordance with the terms of and upon the effectiveness of an
assignment pursuant to the Credit Agreement or a transfer of Notes pursuant to
Section 12.2 of the Note Agreement, as the case may be, and any such assignee,
transferee or successor shall automatically become a party to this Agreement. If
required by any party to this Agreement, such assignee, transferee or successor
shall execute and deliver to the other parties to this Agreement a written
confirmation of its assumption of the obligations of the assignor or transferor
hereunder. Each of the Banks and the Senior Noteholder listed on the Signature
Pages hereof agrees that it shall deliver a complete copy of this Agreement to
any potential assignee, transferee or successor of such Bank or Senior
Noteholder prior to the execution of any such assignment or transfer.
(b) The headings in this Agreement are for purposes of reference only and
shall not limit or expand the meaning hereof.
(c) The provisions of this Agreement are intended solely for the purposes of
defining the rights of the holders of Senior Obligations relative to one
another. Nothing contained in this Agreement is intended to or shall impair, as
between the Guarantors and their respective creditors, the unconditional and
absolute obligations of the Guarantors under the Senior Note Guarantees and the
Credit Agreement Guarantees as and when the same shall become due and payable;
nor shall anything herein prevent any holder of Senior Obligations from
accepting any payment with respect to such Senior Obligations or exercising all
remedies permitted by applicable law upon any event of default in respect
thereof.
(d) Agreement shall be interpreted in such a way as to be fully effective
and valid under applicable law. If any provision of this Agreement shall be held
or deemed to be or shall in fact be inoperative or unenforceable as applied in
any particular case in any jurisdiction or jurisdictions, or in all cases
because it conflicts with any other provision or provisions hereof or any
constitution or statute or rule of public policy, or
-19-
20
for any other reason, such circumstance shall not have the effect of rendering
the provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative, or unenforceable to any extent whatever. Upon the
determination that any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the maximum extent possible.
11. COUNTERPARTS. This Agreement may be executed in as many counterparts as
the parties hereto may deem necessary or convenient and by different parties on
separate counterparts, and each of which, when so executed, shall be deemed to
be an original, but all such counterparts shall constitute but one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
SENIOR NOTEHOLDER:
THE TRAVELERS INSURANCE COMPANY
By:
------------------------------------
Title:
BANKS:
BANKBOSTON, N.A.
By:
------------------------------------
Title:
THE BANK OF NEW YORK
By:
------------------------------------
Title:
-20-
21
SOCIETE GENERALE
By:
------------------------------------
Title:
STATE STREET BANK & TRUST COMPANY
By:
------------------------------------
Title:
BANQUE NATIONALE DE PARIS
By:
------------------------------------
Title:
MELLON BANK, N.A.
By:
------------------------------------
Title:
ACKNOWLEDGED:
THE PIONEER GROUP, INC.
By:_________________________
Title:
gratm/barri/719.78.100/credit.wpf
-21-
