Execution copy
FIRST AMENDMENT TO THIRD
AMENDED AND RESTATED CREDIT AGREEMENT
This FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT
AGREEMENT (this "Amendment"), made and entered into as of December 22, 1998, is
by and among PILGRIM GROUP, INC., a Delaware corporation f/k/a PILGRIM AMERICA
GROUP, INC. ("PAG"), PILGRIM AMERICA CAPITAL CORPORATION, a Delaware corporation
("PACC") (together the "Borrowers" and each a "Borrower"), the banks which are
signatories hereto pursuant to Section 9.6, the "Banks" and U.S. Bank National
Association, a national banking association, one of the Banks as agent for the
Banks (in such capacity, the "Agent").
RECITALS
1. The Agent, the Banks and the Borrowers entered into a Third
Amended and Restated Credit Agreement dated as of July 31, 1998 (the "Credit
Agreement"); and
2. The Borrowers desire to amend certain provisions of the
Credit Agreement, and the Banks have agreed to make such amendments, subject to
the terms and conditions set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
covenant and agree to be bound as follows:
Section 1. Capitalized Terms. Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to them in the
Credit Agreement, unless the context shall otherwise require.
Section 2. Amendments. The Credit Agreement is hereby amended
as follows:
2.1 Section 1.1 of the Credit Agreement is hereby amended by
adding the following definition thereto in alphabetical order:
"12b-1 Sale": The sale by PASI of certain 12b-1 Fees
and related Contingent Deferred Sales Charges pursuant to a
Pilgrim Program Master Agreement by and among PAG, PAII, PASI,
PLT Finance, L.P., Putnam, Lovell, xx Xxxxxxxxx & Xxxxxxxx
Inc. and Bankers Trust Company, as Funding and Collection
Agent, dated December 11, 1998, and the other agreements,
documents and instruments contemplated thereby, as originally
in effect and as amended, supplemented or otherwise modified
with the consent of the Agent.
2.2 Section 2.7(a) of the Credit Agreement is amended to read
in its entirety as follows:
2.7(a) Proceeds of Asset Sales. Within one Business Day
following the receipt of the initial proceeds of the 12b-1
Sale, the Borrowers shall prepay the Loans, and the Aggregate
Commitment Amounts shall be reduced, by an amount equal to
Eleven Million Seven Hundred Fifty Thousand Dollars
($11,750,000). Within one Business Day following the sale of
any CLO Investments, Advisory Contracts, other 12b-1 Fees and
the related Contingent Deferred Sales Charges, or interests
therein (including but not limited to stock in Advisory
Subsidiaries or other Subsidiaries) by either Borrower or any
Subsidiary occurring after the Closing Date, other than
further sales of 12b-1 Fees and Contingent Deferred Sales
Charges as part of the 12b-1 Sale made on or before December
11, 1999, to the extent the sum of the proceeds of all such
sales received after the Closing Date, net of the actual cash
expenses and taxes paid or incurred by any Borrower or any
Subsidiary thereof in connection with such sales, exceeds
Three Million Dollars ($3,000,000), the Borrowers shall prepay
the Loans and the Aggregate Commitment Amounts shall be
reduced by an amount equal to fifty percent (50%) of such
excess; provided, however that this Section 2.7(a) shall not
be deemed to authorize any sale or other transfer that would
otherwise be prohibited by Section 6.2.
Section 3. Effectiveness of Amendments. The amendments
contained in this Amendment shall become effective upon delivery by the
Borrowers of, and compliance by the Borrowers with, the following:
3.1 This Amendment duly executed by each of the Borrowers.
3.2 A Certificate by the Secretary or Assistant Secretary of
each of PAG, Pilgrim Securities, Inc., f/k/a Pilgrim America
Securities, Inc. ("PASI"), Pilgrim Investments, Inc., f/k/a Pilgrim
America Investments, Inc. ("PAII"), and PACC (i) certifying that there
has been no amendment to the Certificate of Incorporation or Bylaws of
PAG, PASI, PAII, and PACC, other than amendments to change the
corporate name of PAG, PAII and PASI (in each case deleting the word
"America" from such names) since true and accurate copies of the same
were delivered to the Agent with a certificate of the Secretary of the
respective entity dated July 31, 1998, and (ii) identifying the
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officers of PAG, PAII, PASI and PACC authorized to execute this
Amendment and any other instrument or agreement to be executed in
connection with this Amendment (collectively, the "Amendment
Documents").
3.3 Certified copies of all documents evidencing any necessary
corporate action, consent or governmental or regulatory approval (if
any) with respect to this Amendment.
3.4 A consent by PASI in the form of Exhibit A attached to
this Amendment, duly executed by PASI.
3.5 Confirmation of Security Agreements in the form of
Exhibits B-1 and B-2 attached to this Amendment, duly executed by each
of PASI and PAII.
3.6 The Borrowers shall have performed and complied with such
other conditions as specified by the Banks, including payment of all
unpaid legal fees and expenses incurred by the Agent through the date
of this Amendment in connection with the Credit Agreement and the
Amendment Documents.
Section 4. Representations, Warranties, Authority, No Adverse
Claim.
4.1 Reassertion of Representations and Warranties, No Default.
The Borrowers hereby represent that on and as of the date hereof and after
giving effect to this Amendment (a) all of the representations and warranties
contained in Article IV of the Credit Agreement are true, correct and complete
in all respects as of the date hereof as though made on and as of such date,
except for changes permitted by the terms of the Credit Agreement, and (b) there
will exist no Default or Event of Default under the Credit Agreement as amended
by this Amendment on such date which has not been waived.
4.2 Authority, No Conflict, No Consent Required. The Borrowers
each represent and warrant that each Borrower has the power and legal right and
authority to enter into the Amendment Documents and has duly authorized as
appropriate the execution and delivery of the Amendment Documents and other
agreements and documents executed and delivered by such Borrower in connection
herewith or therewith by proper corporate action, and none of the Amendment
Documents nor the agreements contained herein or therein contravene or
constitute a default under any agreement, instrument or indenture to which such
Borrower is a party or a signatory or a provision of such Borrower"s Certificate
of Incorporation, Bylaws or any other agreement or requirement of law, or result
in the imposition of any Lien on any of its property under any agreement binding
on or applicable to the Borrower or any of its property except, if any, in favor
of the Agent. Each Borrower represents and warrants that no consent, approval or
authorization of or registration or declaration with any Person, including but
not limited to any governmental authority, is required in connection with the
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execution and delivery by such Borrower of the Amendment Documents or other
agreements and documents executed and delivered by the Borrower in connection
therewith or the performance of obligations of the Borrower therein described,
except for those which the Borrower has obtained or provided and as to which the
Borrower has delivered certified copies of documents evidencing each such action
to the Agent.
4.3 No Adverse Claim. The Borrowers hereby warrant,
acknowledge and agree that no events have been taken place and no circumstances
exist at the date hereof which would give the Borrowers a basis to assert a
defense, offset or counterclaim to any claim of the Agent or the Banks with
respect to the Borrowers" obligations under the Credit Agreement, as amended by
this Amendment.
Section 5. Affirmation of Credit Agreement, Further
References, Affirmation of Security Interest and Guaranty. The Banks and the
Borrowers each acknowledge and affirm that the Credit Agreement, as hereby
amended, is hereby ratified and confirmed in all respects and all terms,
conditions and provisions of the Credit Agreement, except as amended by this
Amendment, shall remain unmodified and in full force and effect. All references
in any document or instrument to the Credit Agreement are hereby amended and
shall refer to the Credit Agreement as amended by this Amendment. The Borrowers
confirm to the Agent that the Borrowers" respective obligations under the Credit
Agreement, as amended by this Amendment are and continue to be secured by the
security interest granted by the Borrowers in favor of the Agent for the benefit
of the Banks under the Security Agreement dated as of July 31, 1998 executed by
PAG, the Collateral Assignment (Trademarks) dated as of July 31, 1998 executed
by PAG, and the Pledge Agreements each dated as of July 31, 1998, and made by
each Borrower in favor of the Banks, and all of the terms, conditions,
provisions, agreements, requirements, promises, obligations, duties, covenants
and representations of the Borrowers under such documents and any and all other
documents and agreements entered into with respect to the obligations under the
Credit Agreement are incorporated herein by reference and are hereby ratified
and affirmed in all respects by the Borrowers.
Section 6. Merger and Integration, Superseding Effect. This
Amendment, from and after the date hereof, embodies the entire agreement and
understanding between the parties hereto and supersedes and has merged into this
Amendment all prior oral and written agreements on the same subjects by and
between the parties hereto with the effect that this Amendment, shall control
with respect to the specific subjects hereof and thereof.
Section 7. Severability. Whenever possible, each provision of
this Amendment and the other Amendment Documents and any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto shall be interpreted in such manner as to be effective, valid and
enforceable under the applicable law of any jurisdiction, but, if any provision
of this Amendment, the other Amendment Documents or any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
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thereto shall be held to be prohibited, invalid or unenforceable under the
applicable law, such provision shall be ineffective in such jurisdiction only to
the extent of such prohibition, invalidity or unenforceability, without
invalidating or rendering unenforceable the remainder of such provision or the
remaining provisions of this Amendment, the other Amendment Documents or any
other statement, instrument or transaction contemplated hereby or thereby or
relating hereto or thereto in such jurisdiction, or affecting the effectiveness,
validity or enforceability of such provision in any other jurisdiction.
Section 8. Successors. The Amendment Documents shall be
binding upon the Borrowers and the Banks and their respective successors and
assigns, and shall inure to the benefit of the Borrowers and the Banks and their
respective successors and assigns.
Section 9. Legal Expenses. As provided in Section 8.2 of the
Credit Agreement, the Borrowers agrees to reimburse the Agent, upon execution of
this Amendment, for all reasonable out-of-pocket expenses (including attorneys"
fees and legal expenses of Xxxxxx & Whitney LLP, counsel for the Agent) incurred
in connection with the Credit Agreement, including in connection with the
negotiation, preparation and execution of the Amendment Documents and all other
documents negotiated, prepared and executed in connection with the Amendment
Documents, and in enforcing the obligations of the Borrowers under the Amendment
Documents, and to pay and save the Agent harmless from all liability for, any
stamp or other taxes which may be payable with respect to the execution or
delivery of the Amendment Documents, which obligations of the Borrowers shall
survive any termination of the Credit Agreement.
Section 10. Headings. The headings of various sections of this
Amendment have been inserted for reference only and shall not be deemed to be a
part of this Amendment.
Section 11. Counterparts. The Amendment Documents may be
executed in several counterparts as deemed necessary or convenient, each of
which, when so executed, shall be deemed an original, provided that all such
counterparts shall be regarded as one and the same document, and either party to
the Amendment Documents may execute any such agreement by executing a
counterpart of such agreement.
Section 12. Governing Law. THE AMENDMENT DOCUMENTS SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT
TO CONFLICT OF LAW PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS, THEIR HOLDING COMPANIES AND THEIR AFFILIATES.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
PILGRIM AMERICA CAPITAL
CORPORATION
By __________________________
Title _______________________
Address for Borrower:
Two Renaissance Square, Ste. 1200
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxx
Telecopier: (000) 000-0000
PILGRIM GROUP, INC.
By __________________________
Title _______________________
Address for Borrower:
Two Renaissance Square, Ste. 1200
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
U.S. BANK NATIONAL ASSOCIATION
By __________________________
Title _______________________
Address:
U.S. Bank Place - MPFP0702
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx
Telecopier: (000) 000-0000
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BANK ONE ARIZONA, NA
By __________________________
Title _______________________
Address:
000 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx XX0-0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxx
STATE STREET BANK AND
TRUST COMPANY
By___________________________
Its__________________________
Address:
0000 Xxxxxxxx Xxxxx
XXX0XX
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
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