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[CONFORMED COPY]
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THE PIONEER GROUP, INC.
NOTE AGREEMENT
Dated as of August 14, 1997
7.95% Senior Notes due 2004
[Exhibits 5.3(a)and 5.3(b) are photocopies of the opinions as delivered.
Exhibits 2.3 and 5.2 have been conformed to the documents as executed and
delivered.]
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION...................1
2. THE NOTES, ETC..............................................20
2.1. The Notes..............................................20
2.2. Subsidiary Guarantees..................................20
2.3. The Intercreditor Agreement............................20
2.4. Sale and Purchase of Notes; Closing....................21
3. REPRESENTATIONS OF THE PURCHASER............................21
3.1. Purchase of Notes......................................21
3.2. Source of Funds........................................22
3.3. Accredited Investor, etc...............................23
4. PAYMENT OF THE NOTES........................................23
4.1. Optional Prepayments...................................23
4.2. Notice of Prepayments..................................23
4.3. Allocation of Partial Prepayments......................24
4.4. Maturity; Surrender, etc...............................24
4.5. Purchase of Notes......................................24
4.6. Make-Whole Amount......................................25
5. CONDITIONS TO CLOSING.......................................26
5.1. Intercreditor Agreement................................26
5.2. Guarantors Contribution Agreement......................26
5.3. Legal Opinions.........................................27
5.4. Investment Assets Under Management.....................27
5.5. Officer's Certificate..................................27
5.6. Proper Proceedings.....................................28
5.7. Purchase Permitted by Applicable Law, etc..............28
5.8. Payment of Special Counsel Fees........................28
5.9. Private Placement Number...............................28
6. SUBSIDIARY GUARANTEES.......................................29
6.1. Guarantees of Credit Obligations.......................29
6.2. Continuing Obligation..................................29
6.3. Waivers with Respect to Credit Obligations.............30
6.4. Holders' Power to Waive, etc...........................32
6.5. Information Regarding Obligors, etc....................32
6.6. Certain Guarantor Representations......................33
6.7. No Subrogation.........................................34
6.8. Subordination..........................................34
6.9. Future Subsidiaries; Further Assurances................34
6.10. Payments Without Tax Withholding......................35
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7. GENERAL COVENANTS...........................................35
7.1. Taxes and Other Charges; Accounts Payable..............35
7.1.1. Taxes and Other Charges........................35
7.1.2. Accounts Payable...............................36
7.2. Conduct of Business, etc...............................36
7.2.1. Types of Business..............................36
7.2.2. Maintenance of Properties......................36
7.2.3. Compliance with Material Agreements............37
7.2.4. Statutory Compliance...........................37
7.3. Insurance..............................................37
7.3.1. Business Interruption Insurance................37
7.3.2. Errors and Omissions Insurance.................38
7.3.3. Directors and Officers Insurance...............38
7.3.4. Property Insurance.............................38
7.3.5. Liability Insurance............................38
7.4. Financial Statements and Reports.......................39
7.4.1. Annual Reports.................................39
7.4.2. Quarterly Reports..............................41
7.4.3. Other Reports..................................42
7.4.4. ERISA Reports..................................43
7.4.5. Other Information..............................43
7.5. Certain Financial Tests................................44
7.5.1. Debt to Combined Mutual Fund Cash Flow.........44
7.5.2. Combined Adjusted Cash Flow to Consolidated
Fixed Charges.................................44
7.5.3. Consolidated Tangible Net Worth................44
7.6. Indebtedness...........................................44
7.7. Guarantees; Letters of Credit..........................45
7.8. Liens..................................................46
7.9. Investments and Acquisitions...........................48
7.10. Distributions.........................................48
7.11. Merger, Consolidation and Dispositions of Assets......49
7.12. Issuance of Stock by Subsidiaries; Subsidiary
Distributions; Subsidiary Guarantors.................50
7.12.1. Issuance of Stock by Subsidiaries.............50
7.12.2. Issuance of Stock by Core Mutual Fund
Subsidiaries or Pioneer Goldfields Entity.....51
7.12.3. No Restrictions on Subsidiary Distributions...51
7.13. ERISA, etc............................................51
7.14. Transactions with Affiliates..........................52
7.15. [Intentionally Omitted]...............................52
7.16. Maintenance of Fee Structure..........................52
7.17. Maintenance of Mutual Fund Contracts..................52
7.18. Bank Credit Facility Matters..........................52
8. REPRESENTATIONS AND WARRANTIES..............................53
8.1. Organization and Business..............................53
8.1.1. Company........................................53
8.1.2. Subsidiaries...................................53
8.1.3. Qualification..................................54
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8.2. Financial Statements and Other Information; Material
Agreements...........................................54
8.2.1. Financial Statements and Other Information.....54
8.2.2. Material Agreements............................55
8.2.3. Investment Assets Under Management.............55
8.3. Changes in Condition...................................55
8.4. Agreements Relating to Financing Debt..................55
8.5. Title to Assets........................................56
8.6. Licenses, etc..........................................56
8.7. Litigation.............................................57
8.8. Tax Returns............................................57
8.9. Authorization and Enforceability.......................58
8.10. No Legal Obstacle to Agreements.......................58
8.11. Defaults..............................................59
8.12. Certain Business Representations......................59
8.12.1. Labor Relations...............................59
8.12.2. Antitrust.....................................59
8.12.3. Environmental Compliance......................59
8.12.4. Certain Other Agreements......................60
8.12.5. Certain Laws..................................60
8.12.6. Burdensome Obligations........................60
8.13. Compliance with ERISA.................................61
8.14. Foreign Trade Regulations; Government Regulation......62
8.14.1. Foreign Trade Regulations.....................62
8.14.2. Government Regulation.........................62
8.15. Use of Proceeds; Margin Regulations...................62
8.16. Disclosure............................................62
8.17. Private Offering by the Company.......................63
8.18. Solvency..............................................63
9. DEFAULTS....................................................63
9.1. Events of Default......................................63
9.2. Certain Actions Following an Event of Default..........67
9.2.1. Acceleration...................................67
9.2.2. Other Remedies.................................68
9.2.3. Rescission.....................................68
9.3. No Waivers or Election of Remedies, Expenses, etc......68
10. INDEMNIFICATION............................................69
11. AMENDMENT AND WAIVER.......................................69
11.1. Requirements..........................................69
11.2. Solicitation of Holders of Notes......................70
11.2.1. Solicitation..................................70
11.2.2. Payment.......................................70
11.3. Binding Effect, etc...................................70
11.4. Notes held by Company, etc............................71
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12. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..............71
12.1. Registration of Notes.................................71
12.2. Transfer and Exchange of Notes........................71
12.3. Replacement of Notes..................................72
13. PAYMENTS ON NOTES..........................................72
13.1. Place of Payment......................................72
13.2. Home Office Payment...................................73
14. EXPENSES, ETC..............................................73
14.1. Transaction Expenses..................................73
14.2. Survival..............................................74
15. NOTICES....................................................74
16. COURSE OF DEALING; AMENDMENTS AND WAIVERS..................75
17. DEFEASANCE.................................................75
18. VENUE; SERVICE OF PROCESS..................................76
19. WAIVER OF JURY TRIAL.......................................76
20. REPRODUCTION OF DOCUMENTS..................................77
21. PAYMENTS DUE ON NON-BUSINESS DAYS..........................77
22. GENERAL....................................................78
SCHEDULE A - Purchaser Information
Exhibit 2.1 - Form of 7.95% Senior Note due 2004
Exhibit 2.3 - Form of Intercreditor Agreement
Exhibit 5.2 - Guarantors Contribution Agreement
Exhibit 5.3(a) - Opinion of Counsel for the Company
Exhibit 5.3(b) - Opinion of Irish Counsel for Pioneer
Management (Ireland) Limited
Exhibit 5.5 - Officer's Certificate
Exhibit 7.16 - Pricing Structure of B Share Funds
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Exhibit 8.1 - The Company and its Subsidiaries
Exhibit 8.4 - Financing Debt
Exhibit 9.1.12 - Officers of the Company
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THE PIONEER GROUP, INC.
NOTE AGREEMENT
This NOTE AGREEMENT dated as of August 14, 1997, is by The Pioneer
Group, Inc., a Delaware corporation (the "COMPANY"), and the Subsidiaries of the
Company listed as Guarantors on the signature page hereto (the "SUBSIDIARY
GUARANTORS", which term includes other Subsidiaries that from time to time
become party hereto as herein provided) with The Travelers Insurance Company
(the "PURCHASER").
The parties agree as follows:
1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION.
Except as otherwise explicitly specified to the contrary, (a) the
capitalized term "Section" refers to sections of this Agreement, (b) the
capitalized term "Exhibit" refers to exhibits to this Agreement, (c) references
to a particular Section include all subsections thereof, (d) the word
"including" shall be construed as "including without limitation," and (e)
accounting terms not otherwise defined herein shall have the meaning provided
under GAAP. Certain capitalized terms are used in this Agreement as specifically
defined as follows:
"ACCUMULATED BENEFIT OBLIGATIONS" means the actuarial present value of
the accumulated benefit obligations under any Plan, calculated in a manner
consistent with Statement No. 87 of the Financial Accounting Standards Board.
"AFFILIATE" means, with respect to the Company (or other specified
Person), any other Person directly or indirectly controlling, controlled by or
under direct or indirect common control with the Company, and shall include (a)
any officer or director of the Company or general partner of such Person and (b)
any Person of which the Company or any Affiliate (as defined in clause (a)
above) of the Company shall, directly or indirectly, beneficially own either (i)
at least 10% of the outstanding equity securities having the general power to
vote or (ii) at least 10% of all equity interests.
"B SHARE COLLECTION AMOUNT" means, for any period, the sum of
Distribution Fees PLUS Redemption Fees received by the Company or any Subsidiary
of the Company during such period.
"B SHARE FUNDS" means the Funds set forth on Exhibit 7.16, with dealer
commissions with respect to the sale of B Shares no more favorable to the
Brokers and Redemption Fees and
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Distribution Fees with respect to B Shares no more favorable to the shareholders
of such Funds than as specified in Exhibit 7.16.
"B SHARE LOAN" has the meaning specified in the Bank Credit Facility.
"B SHARES" means any shares (or class of shares) of beneficial interest
or capital stock of any B Share Fund, upon the redemption of which a Redemption
Fee may be payable at any time, and that are set forth on Exhibit 7.16.
"BANK CREDIT FACILITY" means the Credit Agreement dated as of June 6,
1996 between the Company, certain of its Subsidiaries, the lenders party thereto
and BankBoston, N.A. (f/k/a The First National Bank of Boston), as Agent, as
supplemented and amended to the date of this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code (or any
successor statute) and the rules and regulations thereunder, all as from time to
time in effect.
"BANKRUPTCY DEFAULT" means an Event of Default referred to in Section
9.1.11.
"BROKER" means any broker, dealer, bank or other person or entity
(other than any Subsidiary or any director, officer or employee of the Company
or any Subsidiary) that sells or arranges for the sale of B Shares and is
entitled to receive from the Company or any Subsidiary any commission or other
compensation in respect of such sales.
"BUSINESS DAY" means any day other than Saturday, Sunday or a day on
which banks in Boston, Massachusetts or New York, New York are authorized or
required by law or other governmental action to close.
"CAPITALIZED LEASE" means any lease which is required to be capitalized
on the balance sheet of the lessee in accordance with GAAP, including Statement
Nos. 13 and 98 of the Financial Accounting Standards Board.
"CAPITALIZED LEASE OBLIGATIONS" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP.
"CASH EQUIVALENTS" means:
(a) negotiable certificates of deposit, time deposits (including sweep
accounts), demand deposits and bankers' acceptances issued by any United
States financial
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institution having capital and surplus and undivided profits aggregating at
least $100,000,000 and rated Prime-1 by Xxxxx'x Investors Service, Inc. or
A-1 by Standard & Poor's Ratings Group (or equivalently rated by any other
nationally recognized rating organization);
(b) short-term corporate obligations rated Prime-1 by Xxxxx'x
Investors Service, Inc. or A-1 by Standard & Poor's Ratings Group (or
equivalently rated by any other nationally recognized rating organization);
(c) any direct obligation of the United States of America or any
agency or instrumentality thereof, or of any state or municipality thereof,
(i) which has a remaining maturity at the time of purchase of not more than
one year or (ii) which is subject to a repurchase agreement with any
financial institution referred to in clause (a) above exercisable within
one year from the time of purchase and (iii) which, in the case of
obligations of any state or municipality, is rated AA or better by Xxxxx'x
Investors Service, Inc. or equivalently rated by any other nationally
recognized rating organization; and
(d) any mutual fund or other pooled investment vehicle which invests
principally in obligations described above and which is rated AA or better
by Xxxxx'x Investors Service, Inc. or equivalently rated by any other
nationally recognized rating organization.
"CHARTER" means the articles of organization, certificate of
incorporation, joint venture agreement, partnership agreement, trust indenture
or other charter document of any Person other than an individual, each as from
time to time in effect.
"CLOSING DATE" is defined in Section 2.4.
"CODE" means, collectively, the Internal Revenue Code of 1986 (or any
successor statute) and the rules and regulations thereunder, all as from time to
time in effect.
"COMBINED" and "COMBINING", when used with reference to any term, mean
that term as applied to the accounts of the Company (or other specified Person)
and such of its Subsidiaries as may be specified (or other specified Persons),
combined or combining, as the case may be, in accordance with GAAP and with
appropriate deductions for minority interests in Subsidiaries.
"COMBINED ADJUSTED CASH FLOW" means, for any period, the total of (a)
Combined Mutual Fund Cash Flow PLUS (b) the B Share Collection Amount during
such period.
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"COMBINED MUTUAL FUND CASH FLOW" means, for any period, the total of:
(a) Combined Mutual Fund Net Income; PLUS
(b) all amounts deducted in computing such Combined Mutual Fund Net
Income in respect of:
(i) interest on Financing Debt;
(ii) taxes based upon or measured by income; and
(iii) depreciation and amortization (including
amortization resulting from Contingent Deferred Sales
Charges);
MINUS (c) the B Share Collection Amount.
"COMBINED MUTUAL FUND NET INCOME" means, for any period, the net
income (or loss) of the Core Mutual Fund Subsidiaries, determined in accordance
with GAAP on a Combined basis; PROVIDED, HOWEVER, that such Combined Mutual Fund
Net Income shall not include:
(a) the income (or loss) of any Person accrued prior to the date such
Person becomes a Core Mutual Fund Subsidiary or is merged into or
consolidated with any Core Mutual Fund Subsidiary;
(b) the income (or loss) of any Person (other than a Core Mutual Fund
Subsidiary) in which the Core Mutual Fund Subsidiary has an ownership
interest; PROVIDED, HOWEVER, that (i) Combined Mutual Fund Net Income shall
include amounts in respect of the income of such Person when actually
received in cash by the Core Mutual Fund Subsidiary in the form of
dividends or similar Distributions and (ii) Combined Mutual Fund Net Income
shall be reduced by the aggregate amount of all Investments, regardless of
the form thereof, made by the Core Mutual Fund Subsidiary in such Person
for the purpose of funding any deficit or loss of such Person;
(c) all amounts included in computing such net income (or loss) in
respect of the write-up of any asset (and any depreciation and amortization
charges resulting from any such write-up of assets).
(d) the income of any Core Mutual Fund Subsidiary to the extent the
payment of such income in the form of a Distribution or repayment of
Indebtedness to a Core Mutual Fund Subsidiary is not permitted, whether on
account of any
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Charter or By-law restriction, any agreement, instrument, deed or lease or
any law, statute, judgment, decree or governmental order, rule or
regulation applicable to such Core Mutual Fund Subsidiary;
(e) extraordinary and nonrecurring gains; and
(f) any after-tax gains or losses attributable to
returned surplus assets of any Plan.
"COMMODITIES ACT" means, collectively, the federal Commodities
Exchange Act (or any successor statute), the rules and regulations thereunder
and the rules and regulations of the Commodity Futures Trading Commission (or
any successor), all as from time to time in effect.
"COMPANY" means The Pioneer Group, Inc., a Delaware
corporation.
"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);
(f) Indebtedness in respect of unfunded pension
liabilities;
(g) Indebtedness in respect of financial Guarantees (other than the
OPIC Guaranty to the extent that such OPIC Guaranty 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 Internal
Revenue Service issued pursuant to Section 6212 (or similar or successor
provisions) of the Code.
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For purposes of this definition, "Indebtedness" shall be calculated on a
Combined basis for the Company and the Core Mutual Fund Subsidiaries only, and
the amount of any Guarantee and the amount of any Indebtedness resulting from
such Guarantee shall be the stated or potential maximum amount for which the
Company or a Core Mutual Fund Subsidiary is or may be directly or indirectly
liable.
"COMPUTATION COVENANTS" means Sections 7.5, 7.8.10,
7.11.1, 7.13 and 7.15.
"CONSOLIDATED" and "CONSOLIDATING," when used with reference to any
term, mean that term as applied to the accounts of the Company (or other
specified Person) and all of its Subsidiaries (or other specified group of
Persons), or such of its Subsidiaries as may be specified, consolidated (or
combined) or consolidating (or combining), as the case may be, in accordance
with GAAP and with appropriate deductions for minority interests in
Subsidiaries, as required by GAAP.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum for the
Company and the Core Mutual Fund Subsidiaries on a Combined basis 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 a Core Mutual Fund Subsidiary may be liable
directly or as a guarantor (but only to the extent of the stated or
potential maximum liability of the Company or such Subsidiary in respect of
such Indebtedness), in each case in accordance with GAAP, on a Combined
basis for the Company and the Core Mutual Fund Subsidiaries only, plus
(b) the aggregate amount of all required or mandatory scheduled
payments, prepayments and sinking fund payments with respect to principal
paid or accrued in respect of Financing Debt, other than the B Share Loan
and the Revolving Loan, plus
(c) for any period after the B Share Conversion Date in respect of the
B Share Term Loan (as such terms are defined in the Bank Credit Facility),
the extent to which the prepayments on said B Share Term Loan required
under the Bank Credit Facility exceed the B Share Collection Amount.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of the Company and its Subsidiaries,
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determined in accordance with GAAP on a Consolidated basis; PROVIDED HOWEVER,
that such Consolidated Net Income shall not include:
(a) the income (or loss) of any Person accrued prior to the date such
Person becomes a Subsidiary of the Company or is merged into or
consolidated with any Subsidiary of the Company;
(b) the income (or loss) of any Person (other than a Subsidiary of the
Company) in which a Subsidiary of the Company has an ownership interest;
provided, however, that (i) Consolidated Net Income shall include amounts
in respect of the income of such Person when actually received in cash by
such Subsidiary in the form of dividends or similar Distributions and (ii)
Consolidated Net Income shall be reduced by the aggregate amount of all
Investments, regardless of the form thereof, made by such Subsidiary in
such Person for the purpose of funding any deficit or loss of such Person;
(c) all amounts included in computing net income (or loss) in respect
of the write-up of any asset (and any depreciation and amortization charges
resulting from any such write-up of assets);
(d) the income of any Subsidiary of the Company to the extent the
payment of such income in the form of a Distribution or repayment of
Indebtedness to the Company or any Subsidiary of the Company is not
permitted, whether on account of any Charter or By-law restriction, any
agreement, instrument, deed or lease or any law, statute, judgment, decree
or governmental order, rule or regulation applicable to such Subsidiary;
(e) extraordinary and non-recurring gains; and
(f) any after-tax gains or losses attributable to
returned surplus assets of any Plan.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date,
the total of:
(a) stockholders' equity of the Company and its Subsidiaries
(excluding the effect of any foreign currency translation adjustments)
determined in accordance with GAAP on a Consolidated basis, minus
(b) the amount by which such stockholders' equity has been increased
by the write-up of any asset of the Company and its Subsidiaries (excluding
any write-ups net of write-
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downs associated with any venture capital investments of the Company and
its Subsidiaries), minus
(c) assets of the Company and its Subsidiaries that are considered
intangible assets under GAAP (including but not limited to customer lists,
goodwill, computer software and capitalized research and development costs
other than the capitalized development costs relating to the natural
resource business operations of the Company or any of its Subsidiaries).
"CONTINGENT DEFERRED SALES CHARGE" means any amount that is or may be
payable to the Company or any of its Subsidiaries by any Fund or any shareholder
thereof in such capacity upon redemption of all or a portion of shares of
beneficial interest or capital stock in the Funds upon redemption of B Shares at
rates and on terms no more favorable to such Funds or the shareholders thereof
than as specified in the pricing structure set forth in Exhibit 7.16.
"CORE MUTUAL FUND SUBSIDIARIES" means each of 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.
"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 holder of the Notes by the Company or any Subsidiary in
connection herewith or therewith; and
(c) 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 holder or holders of Notes (or the Majority Holders), 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, each
as from time to time in effect.
"CREDIT OBLIGATIONS" means all present and future liabilities,
obligations and Indebtedness of the Company, any
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Subsidiary or any of their Affiliates party to a Credit Document owing to any
holder of a Note under or in connection with this Agreement or any other Credit
Document, including obligations in respect of principal, interest, Make-Whole
Amounts, and other fees, charges, indemnities and expenses from time to time
owing hereunder or under any other Credit Document (whether accruing before or
after a Bankruptcy Default).
"DEFAULT" means any Event of Default and any event or condition which
with the passage of time or giving of notice, or both, would become an Event of
Default.
"DEFAULT RATE" means that rate of interest that is the greater of (i)
9.95% and (ii) 2% above the rate of interest publicly announced by Citibank,
N.A. from time to time at its principal office in New York City as its prime
rate.
"DISTRIBUTION" means, with respect to the Company (or
other specified Person):
(a) the declaration or payment of any dividend, including dividends
payable in shares of capital stock of the Company, on or in respect of any
shares of any class of capital stock of the Company;
(b) the purchase, redemption or other retirement of any shares of any
class of capital stock of the Company (or of options, warrants or other
rights for the purchase of such shares), directly, indirectly through a
Subsidiary or otherwise;
(c) any other distribution on or in respect of any
shares of any class of equity of or beneficial interest in
the Company;
(d) any payment of principal or interest with respect to, or any
purchase, redemption or defeasance of, any Indebtedness of the Company
which by its terms or the terms of any agreement is subordinated to the
payment of the Credit Obligations; and
(e) any payment, loan or advance by the Company to, or any other
Investment by the Company in, the holder of any shares of any class of
capital stock of or equity or interest in the Company or any Affiliate of
such holder;
PROVIDED, HOWEVER, that the term "Distribution" shall not include payments in
the ordinary course of business in respect of (i) reasonable compensation paid
to employees, officers and directors, (ii) advances to employees for travel
expenses, drawing accounts and similar expenditures, (iii) rent paid to or
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accounts payable for services rendered or goods sold by non-Affiliates or (iv)
intercompany accounts payable and real property leases to non-Affiliates.
"DISTRIBUTION AGREEMENT" means any distribution agreement of which a
Distribution Plan is a part.
"DISTRIBUTION FEES" means fees paid by the B Share Funds to the
Company or any Subsidiary of the Company (minus any portion of such fees
remitted by the Company or any Subsidiary (i) to a Broker as concessions,
trailing compensation or service fees), or (ii) to Xxxxxxx Xxxxx Xxxxxx Xxxxxx &
Xxxxx, Inc. pursuant to the Xxxxxxx Xxxxx 401(k) Program, in any case pursuant
to a Distribution Plan.
"DISTRIBUTION PLAN" means any plan duly adopted by any B Share Fund
and validly in effect pursuant to Rule 12b-1 under the Investment Company Act
(or similar or successor provisions) pursuant to which such B Share Fund may
make payments to the Company or any Subsidiary in connection with the
distribution of B Shares.
"ERISA" means, collectively, the Employee Retirement Income Security
Act of 1974 (or any successor statute) and the rules and regulations thereunder,
all as from time to time in effect.
"ERISA GROUP PERSON" means the Company, any Subsidiary and any Person
which is a member of the controlled group or under common control with the
Company or any Subsidiary within the meaning of section 414 of the Code or
section 4001(a)(14) of ERISA.
"EVENT OF DEFAULT" is defined in Section 9.1.
"EXCHANGE ACT" means, collectively, the Securities Exchange Act of
1934 (or any successor statute) and the rules and regulations thereunder, all as
from time to time in effect.
"EXCLUDED SUBSIDIARY" means any Subsidiary of the Company which (i)
is, as of the date hereof, a registered broker/dealer under, and subject to the
net capital requirements of, the Exchange Act or (ii) becomes, after the date
hereof, a registered broker/dealer under, and subject to the net capital
requirements of, the Exchange Act and is consented to in writing by the Required
Holders, which consent shall not be unreasonably withheld.
"EXECUTIVE OFFICER" means the chief executive officer, chief operating
officer or president of the Company (or other
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specified Person) or any vice president of the Company who is not a Financial
Officer.
"FINANCIAL OFFICER" means the chief financial officer, treasurer or
assistant treasurer of the Company (or other specified Person) or a vice
president whose primary responsibility is for the financial affairs of the
Company (or other specified Person).
"FINANCING DEBT" means:
(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);
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(f) Indebtedness in respect of unfunded pension liabilities;
(g) Indebtedness in respect of financial Guarantees 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 Internal Revenue
Service issued pursuant to Section 6212 (or similar or successor
provisions) of the Code.
"FOREIGN TRADE REGULATIONS" means, collectively and as from time to
time in effect (including any successor statutes or regulations), (a) any act
that prohibits or restricts, or empowers the President or executive agencies of
the United States of America to prohibit or restrict, exports to or financial
transactions with any foreign country or foreign national, (b) the regulations
with respect to certain prohibited foreign trade transactions set forth at 15
C.F.R. Parts 730 et seq., 22 C.F.R. Parts 120-130 and 31 C.F.R. Parts 500 et
seq. and (c) any order, regulation, ruling, interpretation, direction,
instruction or notice relating to any of the foregoing.
"FUND" means (a) with respect to any Trust that has more than one
portfolio, the individual portfolios, interests in which are represented by
series of shares of beneficial interest or capital stock of each Trust having
series, for which portfolio the Company or any of its Subsidiaries provides
investment advisory services pursuant to Investment Advisory Contracts and (b)
with respect to any Trust that does not have more than one portfolio, such
Trust.
"GAAP" means generally accepted accounting principles, as defined by
the United States Financial Accounting Standards Board, as from time to time in
effect; PROVIDED, HOWEVER, that for purposes of compliance with Section 7 (other
than Section 7.4) and the related definitions, "GAAP" means such principles as
in effect on December 31, 1996 as applied by the Company and its Subsidiaries in
the preparation of the December 31, 1996 financial statements referred to in
Section 8.2.1.1, and consistently followed, without giving effect to any
subsequent changes therein other than changes consented to in writing by the
Required Holders.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
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(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
"GUARANTEE" means, with respect to the Company (or other specified
Person):
(a) any guarantee by the Company of the payment or performance of, or
any contingent obligation of the Company in respect of, any Indebtedness or
other obligation of any other Person;
(b) any other arrangement whereby credit is extended to a Person on
the basis of any promise or undertaking of the Company (including any
"comfort letter" or "keep well agreement" written by the Company to a
creditor or prospective creditor of such Person) to (i) pay the
Indebtedness of such Person, (ii) purchase an obligation owed by such
Person, (iii) pay for the purchase or lease of assets or services
regardless of the actual delivery thereof or (iv) maintain the capital,
working capital, solvency or general financial condition of such Person, in
each case whether or not such arrangement is disclosed in the balance sheet
of the Company or referred to in a footnote thereto;
(c) any liability of the Company as a general partner of a partnership
in respect of Indebtedness or other obligations of such partnership;
(d) any liability of the Company as a joint venturer of a joint
venture in respect of Indebtedness or other obligations of such joint
venture; and
(e) reimbursement obligations with respect to letters of credit,
surety bonds and other financial guarantees;
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Guarantee and the amount of Indebtedness resulting from such Guarantee shall be
the amount which should be carried on the balance sheet of the obligor whose
obligations were guaranteed in respect of such obligations (but without giving
effect to any limitations on recourse against such obligor), determined in
accordance with GAAP.
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"GUARANTOR" means each of the Core Mutual Fund Subsidiaries (initially
other than the Excluded Subsidiaries) and other Subsidiaries, including the
Excluded Subsidiaries, from time to time becoming a Guarantor pursuant to
Section 6.9.
"GUARANTORS CONTRIBUTION AGREEMENT" means the Guarantors Contribution
Agreement dated the date hereof among the Company and the Guarantors, as from
time to time in effect, pursuant to which the Guarantors shall make
contributions among themselves with respect to payments made in accordance with
their respective guarantees of the Credit Obligations.
"INACTIVE SUBSIDIARY" means any Subsidiary that conducts no business
and which has total assets with a fair market value (or book value, if greater)
of less than $25,000.
"INDEBTEDNESS" means all obligations, contingent or otherwise, which
in accordance with GAAP are required to be classified upon the balance sheet of
the Company (or other specified Person) as liabilities, but in any event
including:
(a) liabilities secured by any Lien existing on property owned or
acquired by the Company or any Subsidiary, whether or not the liability
secured thereby shall have been assumed;
(b) Capitalized Lease Obligations;
(c) mandatory redemption, repurchase or dividend obligations with
respect to capital stock (or other evidence of beneficial interest); and
(d) all endorsements in respect of Indebtedness of others.
"INSTITUTIONAL INVESTOR" means (a) the original purchaser of a Note
(including any Affiliate of such purchaser) and (b) any holder of a Note holding
(together with one or more of its Affiliates) more than 2% of the aggregate
principal amount of the Notes then outstanding.
"INTERCREDITOR AGREEMENT" is defined in Section 2.3.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap,
interest rate cap or other contractual arrangement protecting a Person against
increases in variable interest rates on Financing Debt.
"INVESTMENT" means, with respect to the Company (or
other specified Person):
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(a) any share of capital stock, evidence of Indebtedness or other
security issued by any other Person;
(b) any loan, advance or extension of credit to, or contribution to
the capital of, any other Person;
(c) any acquisition of all or any part of the business of any other
Person or the assets comprising such business or part thereof;
(d) any commitment or option to make any Investment; and
(e) any other similar investment.
The investments described in the foregoing clauses (a) through (e) shall be
included in the term "Investment" whether they are made or acquired by purchase,
exchange, issuance of stock or other securities, merger, reorganization or any
other method; PROVIDED, HOWEVER, that the term "Investment" shall not include
(i) current trade and customer accounts receivable for property leased, goods
furnished or services rendered in the ordinary course of business and payable in
accordance with customary trade terms, (ii) advances and prepayments to
suppliers for property leased, goods furnished and services rendered in the
ordinary course of business, (iii) advances to employees for travel expenses,
drawing accounts and similar expenditures, (iv) stock or other securities
acquired in connection with the satisfaction or enforcement of Indebtedness or
claims due to the Company or any Subsidiary or as security for any such
Indebtedness or claim or (v) demand deposits in banks or trust companies.
In determining the amount of outstanding Investments for purposes of
Section 7.9:
(1) the amount of any Investment (other than Investments referred to
in the following clause (2) or (3)) shall be the cost thereof minus any
returns of capital on such Investment (determined in accordance with GAAP
without regard to amounts realized as income on such Investment);
(2) the amount of any Investment in respect of a commitment or option
to make a purchase shall be the amount of any nonrefundable down payment or
acquisition price plus the amount of any additional fixed payment
obligation;
(3) the amount of any Investment in respect of a Guarantee shall be
the maximum amount that the guarantor may become obligated to pay in
respect of the obligations guaranteed (whether or not such obligations are
outstanding at the time of computation);
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(4) the amount of any Investment in respect of an acquisition
described in clause (c) above shall be increased by the amount of any
Indebtedness assumed in connection with such acquisition or secured by any
asset acquired in such acquisition (whether or not any Indebtedness is
assumed) or for which any Person that becomes a Subsidiary is liable on the
date on which the securities of such Person are acquired; and
(5) no Investment shall be increased as the result of an increase in
the undistributed retained earnings of the Person in which the Investment
was made or decreased as a result of an equity interest in the losses of
such Person.
"INVESTMENT ADVISERS ACT" means, collectively, the Investment Advisers
Act of 1940 (or any successor statute) and the rules and regulations thereunder,
all as from time to time in effect.
"INVESTMENT ADVISORY CONTRACTS" means binding written contractual
agreements under which the Company or any of its Subsidiaries provides
investment advisory services to a Fund or Trust under the Investment Company Act
or the Investment Advisers Act.
"INVESTMENT COMPANY ACT" means, collectively, the Investment Company
Act of 1940 (or any successor statute) and the rules and regulations thereunder,
all as from time to time in effect.
"LEGAL REQUIREMENT" means any requirement imposed upon the Purchaser
or any of the holders of the Notes by any law of the United States of America or
by any regulation, order, interpretation, ruling or official directive of any
Governmental Authority. Any requirement imposed by any such regulation, order,
ruling or official directive not having the force of law shall be deemed to be a
Legal Requirement if the Purchaser or the holder of any of the Notes reasonably
believes that compliance therewith is in its best interest.
"LIEN" means, with respect to the Company (or any
other specified Person):
(a) Any encumbrance, mortgage, pledge, lien, charge or security
interest of any kind upon any property or assets of such Person, whether
now owned or hereafter acquired, or upon the income or profits therefrom.
(b) Any arrangement or agreement which prohibits such Person from
creating encumbrances, mortgages, pledges, liens, charges or security
interests.
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(c) The acquisition of, or the agreement to acquire, any property or
asset upon conditional sale or subject to any other title retention
agreement, device or arrangement (including a Capitalized Lease).
(d) The sale, assignment, pledge or transfer for security of any
accounts, general intangibles or chattel paper of such Person, with or
without recourse.
(e) The transfer of any tangible property or assets for the purpose of
subjecting such items to the payment of Indebtedness in priority to payment
of the general creditors of the Company.
(f) The existence for a period of more than 90 consecutive days of any
Indebtedness against the Company which if unpaid would by law or upon a
Bankruptcy Default be given any priority over general creditors.
"LLOYDS POLICY" means the Lloyds London Syndicates insurance policy,
Policy No. 97BPL2066, issued to the Company with respect to the OPIC Guarantee.
"MAJORITY HOLDERS" means, at any time, the holders of at least a
majority in unpaid principal amount of the Notes at the time outstanding.
"MAKE-WHOLE AMOUNT" is defined in Section 4.6.
"MATERIAL" means material in relation to the business, assets,
financial condition, results of operations or prospects of the Company (on an
individual basis) or the Company and its Subsidiaries (on a Consolidated basis)
(or any other specified Persons).
"MATERIAL ADVERSE CHANGE" means a material adverse change in the
business, assets, financial condition, results of operations or prospects of the
Company (on an individual basis) or the Company and its Subsidiaries (on a
Consolidated basis) (or any other specified Persons), including:
(a) general economic conditions affecting the mutual fund industry,
(b) fire, flood or other natural calamities,
(c) regulatory changes, judicial decisions, war or other governmental
action,
(d) termination of the Company's or any Subsidiary's status as a
registered investment adviser under the
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Investment Advisers Act or, on an involuntary basis, under the laws of
states material to the Company or such Subsidiary's business,
(e) involuntary termination of the status of the Company or any
Subsidiary as a registered broker/dealer in good standing under the
Exchange Act or laws of states material to the Company's or such
Subsidiary's business, or as a member of the NASD in good standing,
(f) termination of the qualification of any Trust or Fund as a
regulated investment company taxed under the rules of subchapter M of the
Code (other than as a result of merger or other voluntary termination of
any Trust or Fund),
(g) the issuance by the Securities and Exchange Commission of a stop
order suspending the effectiveness of a Trust's or Fund's registration
statement under the Securities Act, or
(h) suspension or termination of the registration or approval of the
Company or any Subsidiary under the Commodities Act.
"MATERIAL AGREEMENTS" is defined in Section 8.2.2.
"XXXXXXX XXXXX 401(K) PROGRAM" means the Xxxxxxx Xxxxx Small Market
401(k) Program established and maintained by Xxxxxxx Xxxxx Xxxxxx Xxxxxx &
Xxxxx, Inc.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" as
defined in section 4001(a)(3) of ERISA.
"NASD" means The National Association of Securities Dealers, Inc. (or
any successor self-regulatory organization).
"NOTES" is defined in Section 2.1.
"OBLIGORS" means the Company and the Guarantors.
"OPIC GUARANTEE" means the guarantee of the Company in favor of the
Overseas Private Investment Corporation, in respect of certain indebtedness of
Teberebie Goldfields, Limited pursuant to that certain letter agreement between
the Company and said Corporation dated October 25, 1996.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
entity.
"PERSON" means any present or future natural person or any
corporation, association, partnership, joint venture,
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company, business trust, trust, organization, business or government or any
governmental agency or political subdivision thereof.
"PIONEER GOLDFIELDS ENTITIES" means Pioneer Goldfields Holdings, Inc.,
Pioneer Goldfields Limited and Teberebie Goldfields Ltd.
"PLAN" means, at any time, any pension benefit plan subject to Title
IV of ERISA maintained, or to which contributions have been made or are required
to be made, by any ERISA Group Person within six years prior to such time.
"PREPAID BROKERAGE COMMISSIONS" means commissions or other selling
compensation paid or payable by the Company or any Subsidiary of the Company to
Brokers in respect of sales of B Shares at the respective commission rates for
each B Share Fund set forth in Exhibit 7.16 without giving effect to any
increases permitted as temporary sales promotions under Section 7.16 or
otherwise.
"PURCHASER" is defined in the introductory paragraph hereof.
"REDEMPTION FEE" means any amount that is or may be payable to the
Company or any Subsidiary of the Company or to any Fund by any holder of B
Shares in such capacity upon redemption of all or a portion of the B Shares.
"REQUIRED HOLDERS" means, at any time, the holders of at least 66 2/3%
in unpaid principal amount of the Notes at the time outstanding.
"REVOLVING LOAN" shall have the meaning specified in the Bank Credit
Facility.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SUBSIDIARY" means any Person of which the Company (or other specified
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own at least 50% of the outstanding capital stock (or other
shares of beneficial interest) entitled to vote generally, (b) hold at least 50%
of the partnership, joint venture or similar interests or (c) be a general
partner or joint venturer.
"SUBSIDIARY GUARANTEE" is defined in Section 2.2.
"SUBSIDIARY GUARANTORS" is defined in the introductory paragraph
hereof.
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"TOTAL ESTIMATED COLLECTIBLE AMOUNT" means the potential future
collections of Distribution Fees and Redemption Fees over the remaining life of
all outstanding Class B Shares, calculated as of the last day of each fiscal
quarter of the Company and utilizing averages of net asset value, number of
shares per Fund, redemptions (including dividend reinvest shares) and
withdrawals under systematic withdrawal plans experienced by the Company and its
Subsidiaries during the six month period ending on such date.
"TRUST" means each registered investment company under the Investment
Company Act for which the Company or any of its Subsidiaries provides investment
advisory services pursuant to Investment Advisory Contracts and for which the
Company or any Subsidiary is the principal underwriter.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of which all of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally (other than directors' qualifying shares) is owned by the Company
(or other specified Person) directly or indirectly through one or more Wholly
Owned Subsidiaries.
2. THE NOTES, ETC.
2.1. THE NOTES.
The Company has duly authorized the issue and sale of $20,000,000
aggregate principal amount of its 7.95% Senior Notes due 2004 (the "NOTES"),
each such note to be substantially in the form set out in Exhibit 2.1. As used
herein, the term "Notes" means all notes originally delivered pursuant to this
Agreement and all notes delivered in substitution or exchange for any such note
and, where applicable, shall include the singular number as well as the plural.
2.2. SUBSIDIARY GUARANTEES.
The obligations of the Company under this Agreement and the Notes are
unconditionally guaranteed by each Guarantor existing on the Closing Date and
thereafter by each Subsidiary from time to time becoming a Guarantor pursuant to
Section 6.9, pursuant to joint and several guarantees contained in Section 6
(sometimes individually a "SUBSIDIARY GUARANTEE" and collectively the
"SUBSIDIARY GUARANTEES").
2.3. THE INTERCREDITOR AGREEMENT.
The Notes and the Subsidiary Guarantees will be entitled to the
benefits of an Intercreditor Agreement, substantially in the form of Exhibit 2.3
(as supplemented and
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amended from time to time, the "INTERCREDITOR AGREEMENT"), between the Purchaser
and the banks and other lenders party to the Bank Credit Facility.
2.4. SALE AND PURCHASE OF NOTES; CLOSING.
Subject to the terms and conditions of this Agreement, the Company
will issue and sell to the Purchaser and the Purchaser will purchase from the
Company, the aggregate principal amount of $20,000,000 at the purchase price of
100% of the principal amount thereof. The sale and purchase of the Notes to be
purchased by the Purchaser shall occur at the offices of Xxxxxxx Xxxx &
Xxxxxxxxx, One Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000 at a
closing on August 15, 1997 or on such other Business Day thereafter as may be
agreed upon by the Company and the Purchaser (the "CLOSING DATE"). At such
closing the Company will deliver to the Purchaser the Notes to be purchased by
it in the form of a single Note (or such greater number of Notes in
denominations of at least $500,000 as it may request) dated the Closing Date and
registered in its name (or in the name of its nominee), against delivery by the
Purchaser to the Company or its order of immediately available funds in the
amount of the purchase price therefor by wire transfer of immediately available
funds for the account of the Company to account number 5462-9068 at State Street
Bank & Trust Company, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attn: Xxxxxx
Xxxxxx, ABA No. 000-000-000.
If the Company shall fail to tender such Notes to the Purchaser on the
Closing Date as provided above in this Section 2.4, or any of the conditions
specified in Section 5 shall not have been fulfilled to the Purchaser's
satisfaction, the Purchaser shall, at its election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights it may have
by reason of such failure or such nonfulfillment.
3. REPRESENTATIONS OF THE PURCHASER.
3.1. PURCHASE OF NOTES.
The Purchaser represents that it is purchasing the Notes for its own
account or for one or more separate accounts maintained by it or for the account
of one or more pension or trust funds and not with a view to the distribution
thereof, provided that the disposition of its or their property shall at all
times be within its or their control. The Purchaser understands that the Notes
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where
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neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.
3.2. SOURCE OF FUNDS.
The Purchaser represents that at least one of the following statements
is an accurate representation as to each source of funds (a "SOURCE") to be used
by it to pay the purchase price of the Notes to be purchased by it hereunder:
(a) the Source is an "insurance company general account", as such term
is defined in Prohibited Transaction Exemption ("PTE") 95-60 (issued July
12, 1995), and the purchase of the Notes by the Purchaser is eligible for,
and satisfies the requirements of, the exemption provided in Section I of
PTE 95-60 as in effect as of the date of this Agreement; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as the Purchaser has disclosed to the
Company in writing pursuant to this paragraph (b), no employee benefit plan
or group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity
of such QPAM and (ii) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company in
writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
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(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprising one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
paragraph (e); or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 3.2, the terms "EMPLOYEE BENEFIT PLAN",
"GOVERNMENTAL PLAN" and "SEPARATE ACCOUNT" shall have the respective meanings
assigned to such terms in section 3 of ERISA.
3.3. ACCREDITED INVESTOR, ETC.
The Purchaser represents that it is an "accredited investor", as
defined in Rule 501(a)(1) of the Securities Act, and that it has had the
opportunity to ask management of the Company questions regarding the business
and financial condition of the Company and the offer of the Notes.
4. PAYMENT OF THE NOTES.
In addition to the payment of the entire unpaid principal amount of
the Notes at the final maturity thereof, the Company may make optional
prepayments in respect of the Notes as hereinafter provided.
4.1. OPTIONAL PREPAYMENTS.
The Company may, at its option and upon notice as provided in Section
4.2, prepay at any time all, or from time to time any part of, the Notes (but,
if in part, then in a minimum amount of $1,000,000 and otherwise in multiples of
$100,000) at the principal amount so prepaid, together with interest accrued
thereon to the date of such prepayment, plus the Make-Whole Amount determined
for the prepayment date with respect to such principal amount.
4.2. NOTICE OF PREPAYMENTS.
The Company will give each holder of Notes written notice of each
optional prepayment under Section 4.1 not less than 15 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
the date fixed for such prepayment (which shall be a Business Day), the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 4.3) and the
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interest to be paid on the prepayment date with respect to such principal amount
being prepaid.
Each such notice of prepayment shall be accompanied by a certificate
of a Financial Officer as to the estimated Make-Whole Amount due in connection
with such prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation. Two Business
Days prior to such prepayment, the Company shall deliver to each holder of Notes
a certificate of a Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date. If for any reason any
holder of the Notes, by notice to the Company, objects to such calculation of
the Make-Whole Amount for such Notes, the Make-Whole Amount for such Notes
calculated by such holder and specified in such notice shall be final and
binding upon the Company and the holders of such Notes absent manifest error. If
any such holder of a Note shall give the notice specified in the preceding
sentence, the Company will forthwith provide copies of such notice to all other
holders of outstanding Notes.
4.3. ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof.
4.4. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 4,
the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall thereafter be
surrendered to the Company and cancelled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any Note.
4.5. PURCHASE OF NOTES.
The Company will not, and will not permit any Affiliate to, purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this
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Agreement and the Notes. The Company will promptly cancel (or will cause to be
promptly canceled) all Notes acquired by it or any Affiliate in connection with
any payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
4.6. MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 4.1 or has become or is
declared to be immediately due and payable pursuant to Section 9.2, as the
context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the third Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Access Service (or such
other display as may replace Page 678 on Telerate Access Service) for
actively traded U.S. Treasury securities having a maturity equal to the
remaining life of such Called Principal as of such Settlement Date, or (ii)
if such yields are not reported as of such time or the yields reported as
of such time are not ascertainable, the Treasury Constant Maturity Series
Yields reported, for the latest day for which such yields have been so
reported as of the third Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded
U.S. Treasury securities having a
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constant maturity equal to the maturity of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by
(a) converting U.S. Treasury xxxx quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between (1) the actively traded U.S. Treasury security with a maturity
closest to and greater than the maturity and (2) the actively traded U.S.
Treasury security with a maturity closest to and less than the maturity.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 4.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 4.1 or has become or is declared to be immediately due and payable
pursuant to Section 9.2, as the context requires.
5. CONDITIONS TO CLOSING.
The obligation of the Purchaser to purchase Notes hereunder shall be
subject to the satisfaction, on or before the Closing Date, of the following
conditions:
5.1. INTERCREDITOR AGREEMENT.
The Intercreditor Agreement shall have been duly executed and
delivered in the form hereinabove recited and shall be in full force and effect.
5.2. GUARANTORS CONTRIBUTION AGREEMENT.
Each of the Guarantors shall have entered into a Guarantors
Contribution Agreement substantially in the form of Exhibit 5.2, pursuant to
which the Guarantors will make contributions among themselves with respect to
payments made in accordance with their respective guarantees of the Credit
Obligations, and shall have delivered an executed counterpart to the Purchaser.
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5.3. LEGAL OPINIONS.
The Purchaser shall have received opinions in form and substance
satisfactory to the Purchaser, dated the Closing Date, (a) from Xxxx and Xxxx
LLP, counsel for the Company, and Xxxxxxx Xxx, Irish counsel for Pioneer
Management (Ireland) Limited, substantially in the forms set forth in Exhibits
5.3(a) and 5.3(b) and covering such other matters incident to the transactions
contemplated hereby as the Purchaser or its counsel may reasonably request (and
the Company hereby instructs its counsel to deliver such opinions to the
Purchaser) and (b) from Xxxxxxx Xxxx & Xxxxxxxxx, special counsel for the
Purchaser in connection with such transactions, covering such matters incident
to such transactions as the Purchaser may reasonably request.
5.4. INVESTMENT ASSETS UNDER MANAGEMENT.
On the Closing Date, the aggregate investment assets under management
by the Company and its Subsidiaries shall equal or exceed $11,000,000,000, and
the Company shall have furnished to the Purchaser on such date a certificate to
such effect signed by an Executive Officer or a Financial Officer.
5.5. OFFICER'S CERTIFICATE.
The representations and warranties contained in Sections 6.6 and 8
shall be true and correct on and as of the Closing Date with the same force and
effect as though originally made on and as of such date; no Default shall exist
on such Closing Date prior to or immediately after giving effect to the purchase
of Notes or would have existed if this Agreement had been in effect since
December 31, 1996; and the Company shall have furnished to the Purchaser on the
Closing Date a certificate to these effects (together with a schedule of
calculations demonstrating, as of the Closing Date, compliance with the
financial tests set forth in Section 7.5), in substantially the
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form of Exhibit 5.5, signed by an Executive Officer or a Financial Officer.
5.6. PROPER PROCEEDINGS.
This Agreement, each other Credit Document and the transactions
contemplated hereby and thereby shall have been authorized by all necessary
proceedings of the Company and any of its Affiliates party thereto. All
necessary consents, approvals and authorizations of any governmental or
administrative agency or any other Person of any of the transactions
contemplated hereby or by any other Credit Document shall have been obtained and
shall be in full force and effect in such form as shall be satisfactory to the
Purchaser.
5.7. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the Closing Date, the purchase of Notes by the Purchaser shall (a)
be permitted by the laws and regulations of each jurisdiction to which it is
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including Regulation G, T or X of the
Board of Governors of the Federal Reserve System) and (c) not subject the
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by the Purchaser at least two days prior to the Closing Date, the
Purchaser shall have received a certificate of an Executive Officer or a
Financial Officer certifying as to such matters of fact as the Purchaser may
reasonably specify to enable it to determine whether such purchase is so
permitted.
5.8. PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 14.1, the Company shall
have paid on or before the Closing Date the reasonable fees, charges and
disbursements of the Purchaser's special counsel referred to in Section 5.3(b)
to the extent reflected in the statement of such counsel rendered to the Company
at least one Business Day prior to the Closing Date.
5.9. PRIVATE PLACEMENT NUMBER.
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Notes.
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6. SUBSIDIARY GUARANTEES.
6.1. GUARANTEES OF CREDIT OBLIGATIONS.
Each Guarantor hereby unconditionally guarantees that the Credit
Obligations incurred by any other Obligor will be performed and will be paid in
full in immediately available funds when due and payable, whether at the stated
or accelerated maturity thereof or otherwise, this guarantee being a guarantee
of payment and not of collectibility and being absolute and in no way
conditional or contingent. In the event any part of the Credit Obligations shall
not have been so paid in full when due and payable, such Guarantor will, not
later than five days after written notice by the holder of any Note or, without
notice, immediately upon the occurrence of a Bankruptcy Default, pay or cause to
be paid the amount of such Credit Obligations which are then due and payable and
unpaid. The obligations of each Guarantor hereunder shall not be affected by the
invalidity, unenforceability or irrecoverability of any of the Credit
Obligations as against any Obligor, any other guarantor thereof or any other
Person. For purposes hereof, the Credit Obligations shall be due and payable
when and as the same shall be due and payable under the terms of this Agreement
or any other Credit Document notwithstanding the fact that the collection or
enforcement thereof may be stayed or enjoined under the Bankruptcy Code or other
applicable law.
6.2. CONTINUING OBLIGATION.
Each Guarantor acknowledges that the Purchaser has entered into this
Agreement (and, to the extent that the Purchaser or any holder of a Note may
enter into any future Credit Document, will have entered into such agreement) in
reliance on this Section 6 being a continuing irrevocable agreement, and such
Guarantor agrees that its guarantee may not be revoked in whole or in part. The
obligations of the Guarantors hereunder shall terminate when all of the Credit
Obligations have been indefeasibly paid in full in immediately available funds
and discharged; PROVIDED, HOWEVER, that
(i) if a claim is made upon the Purchaser or any holder of a Note at
any time for repayment or recovery of any amounts or any property received
by the Purchaser or such holder from any source on account of any of the
Credit Obligations and the Purchaser or such holder repays or returns any
amounts or property so received (including interest thereon to the extent
required to be paid by holder of the Note) or
(ii) if the Purchaser or any holder of a Note becomes liable for any
part of such claim by reason of (a)
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any judgment or order of any court or administrative authority having
competent jurisdiction or (b) any settlement or compromise of any such
claim, then the Guarantors shall remain liable under this Agreement for the
amounts so repaid or returned or the amounts for which the Purchaser or
such holder becomes liable (such amounts being deemed part of the Credit
Obligations) to the same extent as if such amounts had never been received
by the Purchaser or such holder, notwithstanding any termination hereof or
the cancellation of any instrument or agreement evidencing any of the
Credit Obligations. The Guarantors shall, not later than five days after
receipt of notice from the Purchaser or the holder of a Note, pay to the
Purchaser or such holder an amount equal to the amount of such repayment or
return for which the Purchaser or such holder has so become liable.
Payments hereunder by a Guarantor may be required by the Purchaser or any
holder of a Note on any number of occasions.
6.3. WAIVERS WITH RESPECT TO CREDIT OBLIGATIONS.
Except to the extent expressly required by this Agreement or any other
Credit Document, each Guarantor hereby waives, to the extent permitted by the
provisions of applicable law that may not be waived, all of the following
(including all defenses, counterclaims and other rights of any nature based upon
any of the following):
(i) presentment, demand for payment and protest of nonpayment of any
of the Credit Obligations, and notice of protest, dishonor or
nonperformance;
(ii) notice of acceptance of this guarantee and notice that credit has
been extended in reliance on such Guarantor's guarantee of the Credit
Obligations;
(iii) notice of any Default or of any inability to enforce performance
of the obligations of any Obligor or any other Person with respect to any
Credit Document, or notice of any acceleration of maturity of any Credit
Obligations;
(iv) demand for performance or observance of, and any enforcement of
any provision of, the Credit Obligations, this Agreement or any other
Credit Document or against any Obligor or any other Person in respect of
the Credit Obligations or any requirement of diligence or promptness on the
part of the Purchaser or any other holder of a Note in connection with any
of the foregoing;
(v) any act or omission on the part of the Purchaser or any other
holder of a Note which may impair or
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prejudice the rights of such Guarantor, including subrogation rights or
rights to obtain exoneration, contribution, indemnification or any other
reimbursement from any Obligor or any other Person;
(vi) any act or omission which might vary the risk of such Guarantor
or otherwise operate as a deemed release or discharge, and the benefits of
any statute that limits the liability of one joint guarantor upon the
release of any other joint guarantor;
(vii) any statute or rule of law which provides that the obligation of
a surety must be neither larger in amount nor in other respects more
burdensome than the obligation of the principal;
(viii) the provisions of any "one action" or "anti-deficiency" law
which would otherwise prevent the Purchaser or any other holder of a Note
from bringing any action, including any claim for a deficiency, against
such Guarantor before or after commencement or completion by the Purchaser
or any other holder of a Note of any foreclosure action, whether
judicially, by exercise of power of sale or otherwise, or any other law
which would otherwise require any election of remedies;
(ix) all demands and notices of every kind with respect to the
foregoing; and
(x) to the extent not referred to above, all defenses which any
Obligor may now or hereafter have to the payment of the Credit Obligations,
together with all suretyship defenses, which could otherwise be asserted by
such Guarantor.
No delay or omission on the part of the Purchaser or any other holder
of a Note exercising any right under this Agreement or any other Credit Document
or under any guarantee of the Credit Obligations shall operate as a waiver or
relinquishment of such right. No action which the Purchaser or any other holder
of a Note or any Obligor may take or refrain from taking with respect to the
Credit Obligations, including any amendments thereto or modifications thereof or
waivers with respect thereto, shall affect the provisions of this Agreement or
the obligations of any Guarantor hereunder. None of the rights of the Purchaser
or any other holder from time to time of a Note shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Purchaser
or any such holder or any Obligor, or by any noncompliance by any Obligor with
the terms, provisions and covenants of this Agreement, regardless of any
knowledge thereof which the Purchaser or any such holder may
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have or otherwise be charged with. To the extent not prohibited by the
provisions of applicable law that may not be waived, each Guarantor hereby
absolutely and irrevocably waives and relinquishes the benefit and advantage of,
and covenants not to assert, any appraisement, valuation, stay, extension,
redemption or similar law, now or at any time hereafter in force, which might
delay, prevent or otherwise impede the performance or enforcement of this
Agreement, any other Credit Document or the Credit Obligations.
6.4. HOLDERS' POWER TO WAIVE, ETC.
Each Guarantor hereby grants to the holder of the Notes (or any of
them) full power in their discretion, without notice to or consent of such
Guarantor, such notice and consent being hereby expressly waived to the fullest
extent permitted by applicable law, and without in any way affecting the
liability of such Guarantor under its guarantee hereunder:
(i) to waive compliance with, and any Default under, and to consent to
any amendment to or modification or termination of any terms or provisions
of, or to give any waiver in respect of, this Agreement, any other Credit
Document, the Credit Obligations or any guarantee thereof (each as from
time to time in effect);
(ii) to grant any extensions of the Credit Obligations (for any
duration), and any other indulgence with respect thereto, and to effect any
total or partial release (by operation of law or otherwise), discharge,
compromise or settlement with respect to the obligations of the Obligors or
any other Person in respect of the Credit Obligations, whether or not
rights against such Guarantor under this Agreement are reserved in
connection therewith;
(iii) to collect or liquidate or realize upon any of the Credit
Obligations in any manner or to refrain from collecting or liquidating or
realizing upon any of the Credit Obligations; and
(iv) to extend credit under this Agreement, any other Credit Document
or otherwise in such amount as the holders of the Notes (or any of them)
may determine, even though the condition of the Obligors (financial or
otherwise on an individual or consolidated basis) may have deteriorated
since the date hereof.
6.5. INFORMATION REGARDING OBLIGORS, ETC.
Each Guarantor acknowledges and agrees that it has made such
investigation as it deems desirable of the risks undertaken
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by it in entering into this Agreement and is fully satisfied that it understands
all such risks. Each Guarantor hereby waives any obligation which may now or
hereafter exist on the part of the Purchaser or any holder of a Note to inform
it of the risks being undertaken by entering into this Agreement or of any
changes in such risks and, from and after the date hereof, each Guarantor
undertakes to keep itself informed of such risks and any changes therein. Each
Guarantor hereby expressly waives any duty which may now or hereafter exist on
the part of the Purchaser or any holder of a Note to disclose to such Guarantor
any matter related to the business, operations, character, collateral, credit,
condition (financial or otherwise), income or prospects of the Obligors or their
Affiliates or their properties or management, whether now or hereafter known by
the Purchaser or such holder. Each Guarantor represents, warrants and agrees
that it assumes sole responsibility for obtaining from the Obligors all
information concerning this Agreement and all other Credit Documents and all
other information as to the Obligors and their Affiliates or their properties or
management as such Guarantor deems necessary or desirable.
6.6. CERTAIN GUARANTOR REPRESENTATIONS.
Each Guarantor hereby represents that it has determined (i) that it is
in its best interest and in pursuit of its corporate purposes as an integral
part of the business conducted and proposed to be conducted by the Company and
its Subsidiaries (including such Guarantor), and reasonably necessary and
convenient in connection with the conduct of the business conducted and proposed
to be conducted by such Guarantor, to induce the Purchaser to enter into this
Agreement and to purchase the Notes by making the guarantees contemplated by
this Section 6, (ii) that the issuance of the Notes hereunder will directly or
indirectly inure to the benefit of such Guarantor and (iii) that by virtue of
the foregoing such Guarantor is receiving at least reasonably equivalent
consideration from the Purchaser for its guarantee. Each Guarantor acknowledges
that the Purchaser is unwilling to enter into this Agreement unless the
guarantees contemplated by this Section 6 are given by it. Each Guarantor
represents that (a) it will not be rendered insolvent as a result of entering
into this Agreement, (b) after giving effect to the transactions contemplated by
this Agreement, it will have assets having a fair saleable value in excess of
the amount required to pay its probable liability on its existing debts as they
become absolute and matured, (c) it has, and will have, access to adequate
capital for the conduct of its business and (d) it has the ability to pay its
debts from time to time incurred in connection therewith as such debts mature.
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6.7. NO SUBROGATION.
Until the Credit Obligations have been indefeasibly paid in full and
all commitments to extend further credit under the Credit Documents have been
irrevocably terminated, each Guarantor hereby agrees with the Purchaser that it
waives all rights of reimbursement, subrogation, contribution, offset and other
claims against the Obligors arising by contract or operation of law in
connection with any payment made or required to be made by such Guarantor under
this Agreement, except for contribution rights provided in the Guarantors
Contribution Agreement.
6.8. SUBORDINATION.
Each Guarantor and Excluded Subsidiary hereby covenants and agrees
that all Indebtedness, claims and liabilities now or hereafter owing by the
Company to such Guarantor or Excluded Subsidiary are hereby subordinated to the
prior payment in full of the Credit Obligations and are so subordinated as a
claim against the Company or any of its assets, whether such claim be in the
ordinary course of business or in the event of voluntary or involuntary
liquidation, dissolution, insolvency or bankruptcy, so that no payment with
respect to any such Indebtedness, claim or liability will be made or received
while any of the Credit Obligations are outstanding; PROVIDED, HOWEVER, that the
Company may make payments permitted by Section 7.10.
6.9. FUTURE SUBSIDIARIES; FURTHER ASSURANCES.
The Company and each other Guarantor shall from time to time cause
each of its present and future Core Mutual Fund Subsidiaries, within 30 days
after any such Person becomes a Core Mutual Fund Subsidiary (and in any event
prior to or concurrently with such Person becoming a guarantor under the Bank
Credit Facility), that is not a Guarantor to join this Agreement as a Guarantor,
pursuant to a joinder agreement in form and substance satisfactory to the
Majority Holders. Each Excluded Subsidiary shall, upon written request by any
holder of a Note, after the occurrence of an Event of Default (or, if earlier,
concurrently with such Subsidiary becoming a guarantor under the Bank Credit
Facility), join this Agreement as a Guarantor and an Obligor to the maximum
extent permitted by the net capital requirements of the Exchange Act, such
guarantee to be in effect during the continuance of an Event of Default and
thereafter so long as such Subsidiary is a guarantor under the Bank Credit
Facility. Each Guarantor will, promptly upon the request of any holder of a Note
from time to time, execute, acknowledge and deliver, and file and record, all
such instruments, and take all such action, as such holder may deem necessary or
advisable to carry out the intent and purposes of this Section 6.
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6.10. PAYMENTS WITHOUT TAX WITHHOLDING.
All payments whatsoever by any Guarantor on account of the Credit
Obligations shall be made in the lawful currency of the United States free and
clear of, and without reduction or liability for or on account of, any present
or future taxes (whether income, documentary, sales, stamp, registration, issue,
capital, property, excise or otherwise), levies, imposts, duties, fees, charges,
deductions, withholding, restrictions or conditions or any penalties, interest
or additions thereto of any nature whatsoever (herein called "TAX") unless any
withholding or deduction for or on account of any Tax is required by law. If any
Guarantor shall be obligated by law to make any such withholding or deduction
for any Tax imposed, levied, collected, assessed or withheld by any jurisdiction
(or any taxing authority thereof or therein) other than the United States from
or through which payments on account of the Credit Obligations are actually made
then the Company or such Guarantor will promptly (i) notify the affected holders
of Notes of such requirement, (ii) pay such additional amounts of interest as
may be necessary so that the net amount received by each holder of Notes
(including such additional amounts) after such withholding or deduction will not
be less than the amount such holder would have received if such Taxes had not
been withheld or deducted, (iii) make such withholding or deduction and remit
the full amount deducted or withheld to the relevant authority in accordance
with applicable law and (iv) furnish such holder with the original receipt of
such payment from such government or taxing authority.
7. GENERAL COVENANTS.
The Company and the other Obligors covenant that, until all of the
Credit Obligations shall have been paid in full, the Company and its
Subsidiaries will comply with such of the following provisions as are applicable
to the Person in question:
7.1. TAXES AND OTHER CHARGES; ACCOUNTS PAYABLE.
7.1.1. TAXES AND OTHER CHARGES.
Each of the Company and its Subsidiaries will duly pay and discharge,
or cause to be paid and discharged, before the same shall become in arrears, all
taxes, assessments and other governmental charges imposed upon such Person and
its properties, sales or activities, or upon the income or profits therefrom, as
well as all claims for labor, materials or supplies which if unpaid might by law
become a Lien upon any of its property; PROVIDED, HOWEVER, that any such tax,
assessment, charge or claim need not be paid if the validity or amount thereof
shall at the time be contested in good faith by appropriate proceedings and if
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such Person shall, in accordance with GAAP, have set aside on its books adequate
reserves with respect thereto; and PROVIDED, FURTHER, that each of the Company
and its Subsidiaries will pay or bond, or cause to be paid or bonded, all such
taxes, assessments, charges or other governmental claims immediately upon the
commencement of proceedings to foreclose any Lien which may have attached as
security therefor (except to the extent such proceedings have been dismissed or
stayed).
7.1.2. ACCOUNTS PAYABLE.
Each of the Company and its Subsidiaries will promptly pay when due,
or in conformity with customary trade terms, all other Indebtedness incident to
the operations of such Person; PROVIDED, HOWEVER, that any such Indebtedness
need not be paid if the validity or amount thereof shall at the time be
contested in good faith and if such Person shall, in accordance with GAAP, have
set aside on its books adequate reserves with respect thereto.
7.2. CONDUCT OF BUSINESS, ETC.
7.2.1. TYPES OF BUSINESS.
The Core Mutual Fund Subsidiaries will engage only in the business of
providing investment advisory, distribution, portfolio execution, administration
and transfer agency services, pricing and bookkeeping services and other
services incidental or closely related to the investment advisory and investment
company complex business.
7.2.2. MAINTENANCE OF PROPERTIES.
Each of the Company and its Subsidiaries:
(a) will keep its properties in such repair, working order and
condition, and will from time to time make such repairs, replacements,
additions and improvements thereto for the efficient operation of its
businesses and will comply at all times in all material respects with all
franchises, licenses and leases to which it is party so as to prevent any
loss or forfeiture thereof or thereunder, unless compliance is at the time
being contested in good faith by appropriate proceedings; and
(b) except to the extent permitted under Section 7.11, will do all
things necessary to preserve, renew and keep in full force and effect and
in good standing its legal existence and authority necessary to continue
its business.
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7.2.3. COMPLIANCE WITH MATERIAL AGREEMENTS.
Each of the Company and its Subsidiaries will comply in all material
respects with the provisions of the Material Agreements (to the extent not
inconsistent with this Agreement or any other Credit Document). Without the
prior written consent of the Required Holders, no Material Agreement shall be
amended, modified, waived or terminated in any manner that would have in any
material respect an adverse effect on the interests of the holders of the Notes.
7.2.4. STATUTORY COMPLIANCE.
Each of the Company and its Subsidiaries will comply, and will use
reasonable efforts to cause the Trusts and Funds to comply to the extent
applicable (subject to the discretion of their trustees and directors and other
than a reasonable business decision to merge or terminate any Trust or Fund), in
all material respects with the Investment Company Act (including (a) receipt of
financial statements accompanied by an auditor's report of Xxxxxx Xxxxxxxx LLP
(or other independent public accountants of nationally recognized standing), (b)
maintenance of a fidelity bond to secure the Funds from larceny and embezzlement
and (c) continued registration in full force and effect of each Trust as a
registered investment company), the Investment Advisers Act, the Exchange Act,
the Securities Act (including the continued registration of the shares
representing beneficial interests of, or common stock in, each Fund or Trust),
the rules and regulations of the NASD, subchapter M of the Code (to the extent
of each Fund's or Trust's continued qualification as a regulated investment
company thereunder), the Commodities Act, any other law, statute, rule or
regulation governing investment advisers, investment companies, broker-dealers,
underwriters, custodians or transfer agents, including capital requirements, and
all other valid and applicable statutes, ordinances, zoning and building codes
and other rules and regulations of the United States of America, of the states
and territories thereof and their counties, municipalities and other
subdivisions and of any foreign country or other jurisdictions applicable to
such Person, except where compliance therewith shall at the time be contested in
good faith by appropriate proceedings or where failure so to comply has not
resulted, or does not pose a material risk of resulting, in the aggregate in any
Material Adverse Change.
7.3. INSURANCE.
7.3.1. BUSINESS INTERRUPTION INSURANCE.
Each of the Company and its Subsidiaries will maintain with
financially sound and reputable insurers insurance related
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to interruption of business, either for loss of revenues or for extra expense,
in the manner customary for similar businesses similarly situated, including but
not limited to OPIC insurance or other political risk insurance policies as may
reasonably be requested by the Required Holders.
7.3.2. ERRORS AND OMISSIONS INSURANCE.
Each of the Company and the Core Mutual Fund Subsidiaries will
maintain a joint errors and omissions policy insuring the Company and each Core
Mutual Fund Subsidiary for losses arising from any breach of duty, error or
omission arising from the performance of transfer agency services in such
amounts as are customarily carried by Persons of established reputation engaged
in the same or a similar business and similarly situated.
7.3.3. DIRECTORS AND OFFICERS INSURANCE.
Each of the Company and its Subsidiaries will maintain directors and
officers liability insurance insuring the Company and each Subsidiary in such
amounts as are customarily carried by Persons of established reputation employed
in the same or a similar business and similarly situated, if available on a
commercially reasonable basis.
7.3.4. PROPERTY INSURANCE.
Each of the Company and its Subsidiaries will keep its assets which
are of an insurable character insured by financially sound and reputable
insurers against theft and fraud and against loss or damage by fire, explosion
or hazards to the extent, in amounts and with deductibles at least as favorable
as those generally maintained by businesses of similar size engaged in similar
activities. Such insurance shall provide extended coverage in amounts sufficient
to prevent such Person from becoming a co-insurer.
7.3.5. LIABILITY INSURANCE.
Each of the Company and its Subsidiaries will maintain with
financially sound and reputable insurers insurance against liability for
hazards, risks and liability to persons and property, including product
liability insurance, to the extent, in amounts and with deductibles at least as
favorable as those generally maintained by businesses of similar size engaged in
similar activities; PROVIDED, HOWEVER, that it may effect workers' compensation
insurance or similar coverage with respect to operations in any particular state
or other jurisdiction through an insurance fund operated by such state or
jurisdiction or by meeting the self-insurance requirements of such state or
jurisdiction.
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7.4. FINANCIAL STATEMENTS AND REPORTS.
Each of the Company and its Subsidiaries will maintain a system of
accounting in which correct entries will be made of all transactions in relation
to their business and affairs in accordance with GAAP. The fiscal year of the
Company and its Subsidiaries will end on December 31 in each year.
7.4.1. ANNUAL REPORTS.
The Company will furnish to each holder of a Note as soon as
available, and in any event within 95 days after the end of each fiscal year,
(1) the Consolidated balance sheet of the Company and its Subsidiaries as at the
end of such fiscal year, (2) the Consolidated statements of income and
Consolidated statements of cash flows of the Company and its Subsidiaries for
such fiscal year and (3) the Combined and Combining statements of income and
Combined and Combining statements of changes in shareholders' equity and of cash
flows for each of (A) the Core Mutual Fund Subsidiaries, (B) the Pioneer
Goldfields Entities and (C) the other Subsidiaries of the Company for such
fiscal year, all in reasonable detail and together, in the case of Consolidated
financial statements in paragraphs (1) and (2) of this Section 7.4.1, with
comparative figures for the preceding fiscal year or fiscal year end, all
accompanied by:
(a) Unqualified reports of Xxxxxx Xxxxxxxx LLP (or, if they cease to
be auditors of the Company and its Subsidiaries, other independent
certified public accountants of recognized national standing) containing no
material uncertainty, to the effect that they have audited the Consolidated
financial statements in accordance with generally accepted auditing
standards in the United States and that the Consolidated financial
statements present fairly, in all material respects, the financial position
of the Persons covered thereby at the dates thereof and the results of
their operations for the periods covered thereby in conformity with GAAP.
(b) A report by such accountants that in the course of their annual
audit of the Company and its Subsidiaries, nothing came to their attention
that caused them to believe that the Company failed to comply with the
terms, covenants, provisions and conditions of Section 7.5, as calculated
on an annual basis that coincides with the Company's fiscal year end, of
this Agreement insofar as they relate to accounting matters. The report is
furnished by such accountants with the understanding that their audit was
not directed primarily toward obtaining knowledge of such noncompliance.
Further, it is understood that the report is intended solely for the
information and use of (i) the
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management of the Company and (ii) the holders of the Notes hereunder, and
cannot be used for any other purposes without the prior written consent of
such accountants.
(c) A certificate of the Company signed by a Financial Officer to the
effect that such officer has caused this Agreement to be reviewed and has
no knowledge of any Default, or if such officer has such knowledge,
specifying such Default and the nature thereof, and what action the Company
has taken, is taking or proposes to take with respect thereto.
(d) In the event of a change in GAAP after the date hereof,
computations by the Company, certified by a Financial Officer, reconciling
the financial statements referred to above with financial statements
prepared in accordance with GAAP as applied to the other covenants in
Section 7 and the related definitions.
(e) Computations by the Company demonstrating, as of the end of such
fiscal year, (i) compliance with the Computation Covenants, (ii) Combined
Unreimbursed Sales Commissions for the previous fiscal quarter then ended
and (iii) the Total Estimated Collectible Amount as of the end of such
fiscal year.
(f) Computations by the Company comparing the financial statements
referred to above with the most recent budgets for such fiscal year
furnished to the holders of the Notes in accordance with Section 7.4.3(a).
(g) Calculations, as at the end of the fiscal year covered by such
financial statements, of (i) the Accumulated Benefit Obligations for each
Plan covered by Title IV of ERISA (other than Multiemployer Plans) and (ii)
the fair market value of the assets of such Plan allocable to such
benefits.
(h) Supplements to Exhibits 8.1 and 8.4 showing any changes in the
information set forth in such Exhibits during the last quarter of such
fiscal year.
(i) Reconciliation of beginning and ending balances of the Funds on an
aggregate basis showing sales, redemptions, exchanges and changes in net
asset value on a group basis for the following groups: money market,
equity, fixed income and other.
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7.4.2. QUARTERLY REPORTS.
The Company will furnish to each holder of the Notes as soon as
available and, in any event, within 50 days after the end of each of the first
three fiscal quarters of the Company, (1) the internally prepared Consolidated
balance sheet of the Company and its Subsidiaries as of the end of such fiscal
quarter, (2) the Consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries for such fiscal
quarter and for the portion of the fiscal year then ending and (3) the Combined
and Combining statements of income and Combined and Combining statements of cash
flows for each of (A) the Core Mutual Fund Subsidiaries, (B) the Pioneer
Goldfields Entities and (C) the other Subsidiaries of the Company for such
fiscal quarter and for the portion of the fiscal year then ending, all in
reasonable detail and together, in the case of the Consolidated financial
statements, with comparative figures for the same date or period in the
preceding fiscal year, all accompanied by:
(a) A certificate of the Company signed by a Financial Officer to the
effect that such financial statements have been prepared in accordance with
GAAP and present fairly, in all material respects, the financial position
of the Company and its Subsidiaries covered thereby at the dates thereof
and the results of their operations for the periods covered thereby,
subject only to normal year-end audit adjustments and the addition of
footnotes.
(b) In the event of a change in GAAP after the date hereof,
computations by the Company, certified by a Financial Officer, reconciling
the financial statements referred to above with financial statements
prepared in accordance with GAAP as applied to the other covenants in
Section 7 and related definitions.
(c) Computations by the Company demonstrating, as of the end of such
quarter, (i) compliance with the Computation Covenants, (ii) Combined
Unreimbursed Sales Commissions for such period, and (iii) the Total
Estimated Collectible Amount as of the end of such fiscal quarter.
(d) Computations by the Company comparing the financial statements
referred to above with the most recent budgets for such fiscal year
furnished to the holders of the Notes in accordance with Section 7.4.3(a).
(e) Supplements to Exhibits 8.1 and 8.4 showing any changes in the
information set forth in such Exhibits during such fiscal quarter.
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(f) A certificate of the Company signed by a Financial Officer to the
effect that such officer has caused this Agreement to be reviewed and has
no knowledge of any Default, or if such officer has such knowledge,
specifying such Default and the nature thereof and what action the Company
has taken, is taking or proposes to take with respect thereto.
(g) Reconciliation of beginning and ending balances of the Funds on an
aggregate basis showing sales, redemptions, exchanges and changes in net
asset value on a group basis for the following groups: money market,
equity, fixed income and other.
7.4.3. OTHER REPORTS.
The Company will promptly furnish to each holder of the Notes:
(a) As soon as prepared and in any event before February 15 in each
year, an annual budget and operating projections for such fiscal year of
the Company and its Subsidiaries.
(b) Any material updates of such budget and projections.
(c) Any management letters furnished to the Company or any Subsidiary
by the Company's auditors.
(d) All budgets, projections, Consolidated statements of operations
and other reports furnished by the Company or any Subsidiary generally to
the shareholders of the Company in such capacity.
(e) Such registration statements, proxy statements and reports,
including Forms 10-K, 10-Q, 8-K, ADV and BD, as may be filed by the Company
or any Subsidiary (but in no event including the Trusts and Funds) with the
Securities and Exchange Commission.
(f) Any 90-day letter or 30-day letter from the Internal Revenue
Service asserting tax deficiencies against the Company and its
Subsidiaries.
(g) Upon the request of such holder, the Trust financial statements
and auditor opinions required by Section 7.2.4.
(h) Notice of Litigation; Notice of Defaults. The Company will
promptly furnish to each holder of the Notes
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notice of any litigation or any administrative or arbitration proceeding to
which the Company or any Subsidiary may hereafter become a party which
poses a material risk of resulting, after giving effect to any applicable
insurance, in the payment by the Company and its Subsidiaries of at least
$1,000,000 or which seeks to enjoin or questions the validity or
enforceability of any Credit Document. Promptly upon acquiring knowledge
thereof, the Company will notify each holder of the Notes of the existence
of any Default, specifying the nature thereof and what action the Company
or any Subsidiary has taken, is taking or proposes to take with respect
thereto.
7.4.4. ERISA REPORTS.
The Company will furnish to each holder of the Notes as soon as
available the following items with respect to any Plan:
(a) anyrequest for a waiver of the funding standards or an extension
of the amortization period,
(b) any reportable event (as defined in section 4043 of ERISA), unless
the notice requirement with respect thereto has been waived by regulation,
(c) any notice received by any ERISA Group Person that the PBGC has
instituted or intends to institute proceedings to terminate any Plan, or that
any Multiemployer Plan is insolvent or in reorganization,
(d) notice of the possibility of the termination of any Plan by its
administrator pursuant to section 4041 of ERISA, and
(e) notice of the intention of any ERISA Group Person to withdraw, in
whole or in part, from any Multiemployer Plan.
7.4.5. OTHER INFORMATION.
From time to time upon request of any holder of a Note, each of the
Company and its Subsidiaries will furnish to such holder such other information
regarding the business, assets, financial condition, income or prospects of the
Company and its Subsidiaries as such holder may reasonably request, including
copies of all tax returns, licenses, agreements, contracts, leases and
instruments to which any of the Company or its Subsidiaries is party, including
copies of the Investment Advisory Contracts, Distribution Plans or Distribution
Agreements, principal underwriting agreements and custodian, registrar, transfer
agent and shareholder services contracts of
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the Company, the Subsidiaries and the Funds. The authorized officers and
representatives of each holder of a Note shall have the right during normal
business hours upon reasonable notice and at reasonable intervals to examine the
books and records of the Company and its Subsidiaries, to make copies, notes and
abstracts therefrom and to make an independent examination of their books and
records, for the purpose of verifying the accuracy of the reports delivered by
any of the Company and its Subsidiaries pursuant to this Section 7.4 or
otherwise and ascertaining compliance with or obtaining enforcement of this
Agreement or any other Credit Document.
7.5. CERTAIN FINANCIAL TESTS.
7.5.1. DEBT TO COMBINED MUTUAL FUND CASH FLOW.
On June 30, 1997 and on the last day of each fiscal quarter of the
Company thereafter, Company Total Debt shall not exceed 300% of Combined Mutual
Fund Cash Flow for the four consecutive fiscal quarters of the Company then
ending.
7.5.2. COMBINED ADJUSTED CASH FLOW TO CONSOLIDATED FIXED CHARGES.
On the last day of each fiscal quarter of the Company (commencing with
the quarter ending on June 30, 1997), Combined Adjusted Cash Flow for the four
consecutive fiscal quarters then ending shall equal or exceed 400% of
Consolidated Fixed Charges for such period.
7.5.3. CONSOLIDATED TANGIBLE NET WORTH.
Consolidated Tangible Net Worth shall at all times equal or exceed
$127,000,000; PROVIDED, HOWEVER, that on the first day of each fiscal quarter of
the Company beginning after the Closing Date, such dollar amount shall be
increased by an amount equal to 50% of Consolidated Net Income (only if in
excess of zero) for the fiscal quarter then most recently ended.
7.6. INDEBTEDNESS.
Neither the Company nor any Subsidiary of the Company will create,
incur, assume or otherwise become or remain liable with respect to any
Indebtedness except the following:
7.6.1. Indebtedness in respect of the Credit Obligations and the Bank
Credit Facility.
7.6.2. Indebtedness of the Company and each Subsidiary of the Company
which is not a Core Mutual Fund Subsidiary,
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PROVIDED that immediately before and after giving effect to the incurrence of
such Indebtedness, no Default exists.
7.6.3. Current liabilities existing from time to time, other than for
borrowed money, incurred in the ordinary course of business.
7.6.4. To the extent that payment thereof shall not at the time be
required by Section 7.1, Indebtedness in respect of taxes, assessments,
governmental charges and claims for labor, materials and supplies.
7.6.5. Indebtedness secured by Liens of carriers, warehousemen,
mechanics and landlords permitted by Sections 7.8.5 and 7.8.6.
7.6.6. Indebtedness in respect of judgments or awards (a) which have
been in force for less than the applicable appeal period, so long as execution
is not levied, or (b) in respect of which the Company or any Subsidiary shall at
the time in good faith be prosecuting an appeal or proceedings for review, so
long as execution thereof shall have been stayed pending such appeal or review
and the Company or such Subsidiary shall have taken appropriate reserves
therefor consistent with GAAP.
7.6.7. Indebtedness in respect of deferred taxes arising in the
ordinary course of business.
7.6.8. Indebtedness in respect of inter-company loans and advances
among the Company and its Subsidiaries which are not prohibited by Section 7.9.
7.6.9. Guarantees permitted by Section 7.7.
7.6.10. Financing Debt outstanding on the date hereof and described on
Exhibit 8.4.
7.6.11. Obligations under Interest Rate Protection Agreements required
by the Bank Credit Facility.
7.7. GUARANTEES; LETTERS OF CREDIT.
Neither the Company nor any Subsidiary of the Company will become or
remain liable with respect to any Guarantee, including reimbursement obligations
under letters of credit and other financial guarantees by third parties, except
the following:
7.7.1. Guarantees of the Credit Obligations.
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7.7.2. Guarantees of Indebtedness by the Company and each Subsidiary
of the Company which is not a Core Mutual Fund Subsidiary, PROVIDED that
immediately before and after giving effect to such Guarantee, no Default exists.
7.7.3. Guarantees of the Credit Obligations as defined in the Bank
Credit Facility.
7.8. LIENS.
Neither the Company nor any Subsidiary of the Company, shall create,
incur or enter into, or suffer to be created or incurred or to exist, any Lien
(including any arrangement or agreement which prohibits it from creating any
Lien), except the following:
7.8.1. Restrictions on transfer and Liens contained in the Credit
Documents and the Bank Credit Facility.
7.8.2. Liens to secure taxes, assessments and other governmental
charges, to the extent that payment thereof shall not at the time be required by
Section 7.1.
7.8.3. Deposits or pledges made (a) in connection with, or to secure
payment of, workers' compensation, unemployment insurance, old age pensions or
other social security, (b) in connection with casualty insurance maintained in
accordance with Section 7.3, (c) to secure the performance of bids, tenders,
contracts (other than contracts relating to Financing Debt) or leases, (d) to
secure statutory obligations or surety or appeal bonds, (e) to secure indemnity,
performance or other similar bonds in the ordinary course of business or (f) in
connection with contested payments to the extent that payment thereof shall not
at that time be required by Section 7.1.
7.8.4. Liens in respect of judgments or awards, to the extent that
such judgments or awards are permitted by Section 7.6.6.
7.8.5. Liens of carriers, warehousemen, mechanics and similar Liens,
in each case (a) in existence less than 90 days from the date of creation
thereof or (b) being contested in good faith by the Company or any Subsidiary in
appropriate proceedings (so long as the Company or such Subsidiary shall, in
accordance with GAAP, have set aside on its books adequate reserves with respect
thereto).
7.8.6. Encumbrances in the nature of (a) zoning restrictions, (b)
easements, (c) restrictions of record on the use of real property, (d)
landlords' and lessors' Liens on rented premises and (e) restrictions on
transfers or assignments of
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leases, which in each case do not materially detract from the value of the
encumbered property or impair the use thereof in the business of the Company or
any Subsidiary.
7.8.7. Restrictions under federal and state securities laws on the
transfer of securities.
7.8.8. Restrictions under Foreign Trade Regulations on the transfer or
licensing of certain assets of the Company and its Subsidiaries.
7.8.9. Set-off rights of depository institutions with which the
Company or any Subsidiary maintains deposit accounts.
7.8.10. Liens of the Core Mutual Fund Subsidiaries constituting (a)
purchase money security interests (including mortgages, conditional sales,
Capitalized Leases and any other title retention or deferred purchase devices)
in real property, interests in leases or tangible personal property existing or
created on the date on which such property is acquired, and (b) the renewal,
extension or refunding of any security interest referred to in the foregoing
clause (a) in an amount not to exceed the amount thereof remaining unpaid
immediately prior to such renewal, extension or refunding; PROVIDED, HOWEVER,
that each such security interest shall attach solely to the particular item of
property so acquired, and the principal amount of Indebtedness (including
Indebtedness in respect of Capitalized Lease Obligations) secured thereby shall
not exceed the cost (including all such Indebtedness secured thereby, whether or
not assumed) of such item of property; and PROVIDED, FURTHER, that the aggregate
principal amount of all Indebtedness secured by Liens permitted by this Section
7.8.10 shall not exceed $5,000,000 at any one time.
7.8.11. Any prohibition imposed by applicable law, including Section
15(a) of the Investment Company Act and Section 205 of the Investment Advisers
Act, or any regulatory agency, on the creation of Liens and the assignment of
contracts.
7.8.12. Liens incurred by the Company and each Subsidiary of the
Company which is not a Core Mutual Fund Subsidiary, PROVIDED that immediately
before and after giving effect to the incurrence of such Lien, no Default
exists, and PROVIDED, FURTHER that in no event shall any pledge of stock be
permitted with respect to the stock of any of the Core Mutual Fund Subsidiaries
or, subject to Section 7.8.13, the stock of any of the Pioneer Goldfields
Entities.
7.8.13. Liens with respect to the stock of the Pioneer Goldfields
Entities shall be permitted if (i) the Revolving Credit Facility under the Bank
Credit Facility shall have been
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repaid or discharged in full and the commitment for such Revolving Credit
Facility shall have been terminated and (ii) Combined Mutual Fund Cash Flow
exceeds $30,000,000 for the twelve month period ending on the date of the most
recently ended fiscal quarter for which financial statements have been furnished
(or were required to be furnished) by the Company to the holders of the Notes
pursuant to Section 7.4.2, PROVIDED, HOWEVER, that no such Lien shall secure any
Indebtedness owing to any bank or that is otherwise incurred directly or
indirectly to refinance any Indebtedness under the Bank Credit Facility.
7.9. INVESTMENTS AND ACQUISITIONS.
Neither the Company nor any Subsidiary of the Company will have
outstanding, acquire, commit itself to acquire or hold any Investment (including
any Investment consisting of the acquisition of any business) except for the
following:
7.9.1. Investments of the Company and each Subsidiary of the Company
which is not a Core Mutual Fund Subsidiary; PROVIDED that immediately before and
after giving effect to such Investment, no Default exists.
7.9.2. Investments of the Core Mutual Fund Subsidiaries in Wholly
Owned Subsidiaries of the Core Mutual Fund Subsidiaries; PROVIDED, HOWEVER, that
so long as immediately before and after giving effect thereto no Default exists,
Investments in Wholly Owned Subsidiaries may be made only to the extent
reasonably necessary for the conduct of the business permitted by Section 7.2.1.
7.9.3. Investments in Cash Equivalents.
7.9.4. Intercompany loans and advances from any Core Mutual Fund
Subsidiary to any other Core Mutual Fund Subsidiary or the Company, but only to
the extent reasonably necessary for Consolidated tax planning and working
capital management.
7.9.5. Prepaid royalties and fees paid in the ordinary course of
business.
7.9.6. Investments in investment companies sponsored by the Company
for which the Company or any Core Mutual Fund Subsidiary is or will become the
investment adviser.
7.9.7. Guarantees permitted by Section 7.7.
7.10. DISTRIBUTIONS.
Neither the Company nor any Subsidiary of the Company shall make any
Distribution except for the following:
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7.10.1. The Core Mutual Fund Subsidiaries may make Distributions to
the Company or to any other Core Mutual Fund Subsidiary to the extent reasonably
necessary for the conduct of the business permitted by Section 7.2.1.
7.10.2. The Company and each Subsidiary of the Company which is not a
Core Mutual Fund Subsidiary may make Distributions to its stockholders during
any fiscal quarter of the Company; PROVIDED that immediately before and after
giving effect thereto, no Default exists.
7.10.3. The Company and each Subsidiary of the Company which is not a
Core Mutual Fund Subsidiary may make Investments permitted by Section 7.9;
PROVIDED that immediately before and after giving effect thereto, no Default
exists.
7.11. MERGER, CONSOLIDATION AND DISPOSITIONS OF ASSETS.
Neither the Company nor any Subsidiary of the Company will become
party to any merger or consolidation or will sell, lease, sell and lease back,
sublease or otherwise dispose of any of its assets, or agree to do any of the
foregoing, except the following:
7.11.1. The Core Mutual Fund Subsidiaries and the Pioneer Goldfields
Entities may sell or otherwise dispose of (a) inventory in the ordinary course
of business, (b) tangible assets to be replaced in the ordinary course of
business by other tangible assets of equal or greater value and (c) tangible
assets or stock or assets of Inactive Subsidiaries that are no longer used or
useful in the business of the Core Mutual Fund Subsidiaries and the Pioneer
Goldfields Entities; PROVIDED, HOWEVER, that the aggregate fair market value (or
book value if greater) of such assets, rights or stock no longer being used or
useful shall not exceed $1,000,000 in any fiscal year.
7.11.2. Subject to Section 9.1.13, any Core Mutual Fund Subsidiary may
merge or be liquidated into the Company or any other Core Mutual Fund Subsidiary
(other than an Excluded Subsidiary).
7.11.3. Subject to Section 9.1.13, any of the Pioneer Goldfields
Entities may merge or be liquidated into the Company or any of the other Pioneer
Goldfields Entities.
7.11.4. 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.
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7.11.5. The Company or Pioneer Goldfields Holdings, Inc. may sell a
non-controlling equity interest in Pioneer Goldfields Limited or Teberebie
Goldfields Limited, PROVIDED, HOWEVER, that prior to the application of any
portion of the net cash proceeds received by the Company or any of its
Subsidiaries from any such sale to the prepayment of the Revolving Loan under
the Bank Credit Facility, the Company shall have made an offer to the holders of
all Notes at the time outstanding (such offer to provide each holder with
sufficient information to make an informed decision and to remain open for at
least ten Business Days) to purchase (at not less than par plus accrued
interest), pro rata among all Notes tendered, an aggregate principal amount of
Notes at least equal to the amount that bears the same relation to the
outstanding principal amount of the Notes as the amount of the permanent
reduction of the Maximum Amount of Revolving Credit (as such term is defined in
the Bank Credit Facility) resulting from such transaction under Section 4.2.3 of
the Bank Credit Facility bears to such Maximum Amount of Revolving Credit before
giving effect to such reduction, and PROVIDED, FURTHER, that any such prepayment
of Notes shall be made prior to or concurrently with such prepayment of such
Revolving Loan.
7.11.6. The Company may enter into a merger, consolidation, sale,
lease, sale and leaseback, sublease or other disposition of its assets, provided
that (a) immediately before and after giving effect to such transaction, no
Defaults exists and (b) in case of a merger, consolidation or a sale, lease or
other disposition of all or substantially all of its assets in a single
transaction or series of related transaction, the successor formed by such
consolidation or the survivor of such merger or the Person that acquires all or
substantially all of the assets of the Company as an entirety, as the case may
be, shall be a solvent corporation organized and existing under the laws of the
United States or any State thereof (including the District of Columbia), and, if
the Company is not such corporation, such corporation shall have executed and
delivered to each holder of any Notes its assumption of the due and punctual
performance and observance of each covenant and condition of this Agreement and
the Notes.
7.12. ISSUANCE OF STOCK BY SUBSIDIARIES; SUBSIDIARY DISTRIBUTIONS;
SUBSIDIARY GUARANTORS.
7.12.1. ISSUANCE OF STOCK BY SUBSIDIARIES.
No Subsidiary of the Company which is not a Core Mutual Fund
Subsidiary or a Pioneer Goldfields Entity shall issue or sell any shares of its
capital stock or other evidence of beneficial ownership to any Person other than
the Company or any
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Wholly Owned Subsidiary of the Company unless, immediately before and after
giving effect thereto, no Default exists.
7.12.2. ISSUANCE OF STOCK BY CORE MUTUAL FUND SUBSIDIARIES OR PIONEER
GOLDFIELDS ENTITY.
No Core Mutual Fund Subsidiary or Pioneer Goldfields Entity shall
issue or sell any shares of its capital stock or other evidence of beneficial
ownership to any Person other than the Company or any Wholly Owned Subsidiary of
the Company; PROVIDED that, subject to Section 7.11.5, a public offering or
other sale with respect to equity interests in the Pioneer Goldfields Entities
shall be permitted.
7.12.3. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS.
Except for restrictions contained in the Credit Documents and the Bank
Credit Facility, neither the Company nor any Subsidiary will enter into or be
bound by any agreement (including covenants requiring the maintenance of
specified amounts of net worth or working capital) restricting the right of any
Subsidiary to make Distributions or extensions of credit to the Company
(directly or indirectly through another Subsidiary).
7.13. ERISA, ETC.
Each of the Company and its Subsidiaries will comply, and will cause
all ERISA Group Persons to comply, in all material respects, with the provisions
of ERISA and the Code applicable to each Plan. Each of the Company and its
Subsidiaries will meet, and will cause all ERISA Group Persons to meet, all
minimum funding requirements applicable to them with respect to any Plan
pursuant to section 302 of ERISA or section 412 of the Code, without giving
effect to any waivers of such requirements or extensions of the related
amortization periods which may be granted. At no time shall the Accumulated
Benefit Obligations under any Plan that is not a Multiemployer Plan exceed the
fair market value of the assets of such Plan allocable to such benefits by more
than $1,000,000. The Company and its Subsidiaries will not withdraw, and will
cause all other ERISA Group Persons not to withdraw, in whole or in part, from
any Multiemployer Plan so as to give rise to withdrawal liability exceeding
$1,000,000 in the aggregate. At no time shall the actuarial present value of
unfunded liabilities for post-employment health care benefits, whether or not
provided under a Plan, calculated in a manner consistent with Statement No. 106
of the Financial Accounting Standards Board, exceed $1,000,000.
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7.14. TRANSACTIONS WITH AFFILIATES.
Other than the Material Agreements, neither the Company nor any of its
Subsidiaries shall effect any transaction with any of their respective
Affiliates (except for the Company and its Subsidiaries, except for Investments
permitted by Section 7.9.6, and except for certain expense subsidies, consistent
with past practice, for Funds for which the Company or any Subsidiary acts as an
investment adviser) on a basis less favorable to the Company and its
Subsidiaries than would be the case if such transaction had been effected with a
non-Affiliate.
7.15. [INTENTIONALLY OMITTED].
7.16. MAINTENANCE OF FEE STRUCTURE.
With respect to the B Shares, neither the Company nor any Subsidiary
shall cause or permit dealer commissions to be amended to be more favorable to
the Brokers or Redemption Fees to be amended to be more favorable to the
shareholders of the B Share Funds. The Company and each Subsidiary of the
Company, as the case may be, shall continue to receive Distribution Fees at
rates no less favorable than the minimum amounts set forth on Exhibit 7.16 and
shall continue to act as sole distributor of each Fund and to be the only Person
to whom the Funds are permitted to make any payments under the respective
Distribution Plan or Distribution Agreement. Exhibit 7.16 may be amended from
time to time by the Company upon 60 days prior notice to the holders of the
Notes, only to add to such Exhibit a Fund with dealer reallowances no more
favorable to the Brokers and Redemption Fees and Distribution Fees no more
favorable to the shareholders of such Fund than those applicable to the Funds
set forth on Exhibit 7.16 on the date hereof. Notwithstanding the foregoing, the
waiver by the Company of Redemption Fees with respect to B Shares sold pursuant
to the Xxxxxxx Xxxxx 401(k) Program shall be permitted.
7.17. MAINTENANCE OF MUTUAL FUND CONTRACTS.
The Company and the Core Mutual Fund Subsidiaries shall cause each
Investment Advisory Contract, Distribution Plan or Distribution Agreement to
which it is a party to be renewed on an annual basis on terms at least as
favorable to the Company or the Core Mutual Fund Subsidiary, as the case may be.
7.18. BANK CREDIT FACILITY MATTERS.
7.18.1. The Company will not, and will not permit any Subsidiary to,
without the prior written consent of the Required Holders, (i) voluntarily repay
or prepay the B Share Term Loan under the Bank Credit Facility or (ii) consent
to any amendment
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of the amount or date of any required repayment or prepayment of any
Indebtedness outstanding under the Bank Credit Facility.
7.18.2. The Company will not, and will not permit any Subsidiary to,
enter into any amendment, modification or supplement to the Bank Credit Facility
that contains conditions, covenants or events of default, or related
definitions, that are more burdensome or restrictive to the Company or such
Subsidiary than those contained in the Bank Credit Facility are to the Company
or such Subsidiary on the date hereof, except for substantially identical and
concurrent amendments, modifications or supplements to the Bank Credit Facility
and this Agreement.
8. REPRESENTATIONS AND WARRANTIES.
In order to induce the Purchaser to purchase Notes hereunder, the
Company represents and warrants that:
8.1. ORGANIZATION AND BUSINESS.
8.1.1. COMPANY.
The Company is a duly organized and validly existing corporation, in
good standing under the laws of Delaware, with all power and authority,
corporate or otherwise, necessary to (a) enter into and perform this Agreement,
the Notes 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. Certified copies of the Charter and By-laws of the Company have been
previously delivered to the Purchaser and are correct and complete. Exhibit 8.1
sets forth (i) the address of the Company's principal executive office and chief
place of business and (ii) the name under which the Company conducts its
business and the jurisdictions in which the name is used.
8.1.2. SUBSIDIARIES.
Each Subsidiary is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized, with all
power and authority, corporate or otherwise, necessary to (a) enter into and
perform this 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. Certified copies of the Charter and By-laws of each Subsidiary
that is a party to this Agreement have been previously delivered to the
Purchaser and are correct and complete. Exhibit 8.1 sets forth (i) the name and
jurisdiction of organization of each Subsidiary, (ii) the address of the chief
executive office and principal place of business of each Subsidiary, (iii) each
name under which each Subsidiary conducts its business and the jurisdictions in
which each such
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name is used and (iv) with respect to the Core Mutual Fund Subsidiaries and the
Pioneer Goldfields Entities, the number of authorized and issued shares and
ownership of each such Subsidiary.
8.1.3. QUALIFICATION.
Except as set forth on Exhibit 8.1, each of the Company and each
Subsidiary is duly and legally qualified to do business as a foreign corporation
or other entity and is in good standing in each state or jurisdiction in which
such qualification is required and is duly authorized, qualified and licensed
under all laws, regulations, ordinances or orders of public authorities, or
otherwise, to carry on its business in the places and in the manner in which it
is conducted, except for failures to be so qualified, authorized or licensed
which would not in the aggregate result, or pose a material risk of resulting,
in any Material Adverse Change.
8.2. FINANCIAL STATEMENTS AND OTHER INFORMATION; MATERIAL AGREEMENTS.
8.2.1. FINANCIAL STATEMENTS AND OTHER INFORMATION.
The Company has previously furnished to the Purchaser copies of the
following:
8.2.1.1. The Company's Annual Reports on Form 10-K and its annual
reports to stockholders for its fiscal years ended December 31 in each of
1995 and 1996, including the audited Consolidated balance sheet of the
Company and its Subsidiaries as at December 31 in each of 1995 and 1996 and
audited Consolidated statements of income, changes in shareholders' equity
and cash flows of the Company and its Subsidiaries for the fiscal years of
the Company then ended.
8.2.1.2. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997, including the unaudited Consolidated balance
sheet of the Company and its Subsidiaries as at said date and the unaudited
Consolidated statements of income, changes in shareholders' equity and cash
flows of the Company and its Subsidiaries for such fiscal quarter.
8.2.1.3. Calculations demonstrating pro forma compliance with the
Computation Covenants as of March 31, 1997.
The financial statements referred to in Sections 8.2.1.1 and 8.2.1.2
were prepared in accordance with GAAP and fairly present the financial position
of each of the
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Company and its Subsidiaries, respectively, covered thereby at the respective
dates thereof and the results of their operations for the periods covered
thereby. Neither the Company nor any of its Subsidiaries has any known
contingent liability material to the Company and its Subsidiaries on a
Consolidated basis which is not reflected in the most recent audited balance
sheet referred to in Section 8.2.1.1 or the notes thereto.
The financial statements referred to in Sections 8.2.1.1 and 8.2.1.2
were prepared in accordance with GAAP and fairly present the financial position
of the Persons covered thereby at the respective dates thereof and the results
of their operations for the periods covered thereby, subject only to normal
year-end audit adjustments and the addition of footnotes.
8.2.2. MATERIAL AGREEMENTS.
The Company has previously furnished to the Purchaser correct and
complete copies, including all exhibits, schedules and amendments thereto, of
the following agreements (the "MATERIAL AGREEMENTS"):
8.2.2.1. the form of Distribution Plan or Distribution Agreement.
8.2.2.2. the form of Investment Advisory Contract.
8.2.2.3. the OPIC insurance policy naming the Purchaser and the
holders from time to time of the Notes as "Loss Payees".
8.2.3. INVESTMENT ASSETS UNDER MANAGEMENT.
The aggregate investment assets under management by the Company and
its Subsidiaries were at least $11,000,000,000 on March 31, 1997.
8.3. CHANGES IN CONDITION.
No Material Adverse Change has occurred, and since December 31, 1996,
neither the Company nor any Subsidiary has entered into any material transaction
outside the ordinary course of business except for the transactions contemplated
by this Agreement and the Material Agreements or as specifically described to
the Purchaser in writing prior to the execution of this Agreement.
8.4. AGREEMENTS RELATING TO FINANCING DEBT.
Exhibit 8.4 sets forth the amounts (as of the dates indicated in
Exhibit 8.4) of all Financing Debt of the Company
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and its Subsidiaries with amounts outstanding or commitments to lend of
$2,500,000 or more and all agreements which relate to such Financing Debt, and
all Liens with respect to such Financing Debt. The Company has furnished the
Purchaser with correct and complete copies of any agreements related to Exhibit
8.4 requested by the Purchaser.
8.5. TITLE TO ASSETS.
The Company and its Subsidiaries have good and marketable title to or
valid leases of all material assets necessary for or used in the operations of
their business as now conducted by them and reflected in the most recent audited
balance sheet referred to in Section 8.2.1.1 (or the balance sheet most recently
furnished to the holders of the Notes pursuant to Section 7.4.1 or 7.4.2), and
to all material assets acquired subsequent to the date of such balance sheet,
subject to no Liens except for those permitted by Section 7.8 and except for
assets disposed of as permitted by Section 7.11.
8.6. LICENSES, ETC.
(a) Pioneering Management Corporation is a registered investment
adviser under the Investment Advisers Act, with similar registrations with
state authorities required to conduct its business as currently conducted
and proposed to be conducted except to the extent immaterial to the
Company's business, assets, financial condition or prospects. Pioneer Funds
Distributor, Inc. is a registered broker/dealer in good standing under the
Exchange Act and a member in good standing of the NASD, with similar
registrations with state authorities required to conduct its business as
currently conducted and proposed to be conducted except to the extent
immaterial to the Company's business, assets, financial condition or
prospects. Each Trust is a registered investment company, which
registration is in full force and effect, under the Investment Company Act
and each Fund or Trust is qualified to be taxed and has been (except to the
extent no material liability applies to the Company or any Subsidiary) and
is taxed as a regulated investment company under subchapter M of the Code.
Pioneer Funds Distributor, Inc. acts as the principal underwriter for the
Funds and is the sole recipient of Distribution Fees under the respective
Distribution Plan or Distribution Agreement. Each Fund or Trust which is a
commodity pool is registered under, or has obtained an exemption from, the
Commodities Act. The shares representing beneficial interests in, or common
stock of, each Fund or Trust are registered, which registration is in full
force and effect, under the Securities Act and, except to the extent
immaterial to the Company's business, assets, financial condition or
prospects, similar state securities laws. Each Subsidiary required to be a
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commodity trading advisor under the Commodities Act is so qualified.
(b) The Company and its Subsidiaries have all material patents, patent
applications, patent rights, service marks, service xxxx rights,
trademarks, trademark rights, trade names, trade name rights, copyrights,
licenses, franchises, permits, authorizations, including authorizations
under state securities laws, and other material rights as are necessary for
the conduct of the business of the Company and its Subsidiaries. All of the
foregoing are in full force and effect, and each of the Company and its
Subsidiaries is in substantial compliance with the foregoing without any
known conflict with the valid rights of others which has resulted, or poses
a material risk of resulting, in any Material Adverse Change. No event has
occurred which permits, or after notice or lapse of time or both would
permit, the revocation or termination of any such license, franchise or
other right or affects the rights of any of the Company and its
Subsidiaries thereunder so as to result in any Material Adverse Change. No
litigation or other proceeding or dispute with respect to the validity or,
where applicable, the extension or renewal, of any of the foregoing has
resulted, or poses a material risk of resulting, in any Material Adverse
Change.
8.7. LITIGATION.
There is no litigation, at law or in equity, or any proceeding before
any court, board or other governmental or administrative agency or any
arbitrator which is pending or, to the knowledge of the Company, threatened
which involves any material risk of any final judgment, order or liability
which, after giving effect to any applicable insurance, has resulted, or poses a
material risk of resulting, in any Material Adverse Change or which seeks to
enjoin the consummation, or which questions the validity or enforceability, of
any of the transactions contemplated by this Agreement or any other Credit
Document. No judgment, decree or order of any court, board or other governmental
or administrative agency or any arbitrator has been issued against or binds the
Company or any Subsidiary which has resulted, or poses a material risk of
resulting, in any Material Adverse Change.
8.8. TAX RETURNS.
Each of the Company and its Subsidiaries has filed all material tax
and information returns which are required to be filed by it and has paid, or
made adequate provision for the payment of, all taxes which have or may become
due pursuant to such returns or to any assessment received by it. Neither the
Company nor any Subsidiary knows of any material additional assessments or any
basis therefor. The Company reasonably
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believes that the charges, accruals and reserves on the books of the Company and
its Subsidiaries in respect of taxes or other governmental charges are adequate.
8.9. AUTHORIZATION AND ENFORCEABILITY.
Each of the Company and any Subsidiary party to a Subsidiary Guarantee
has taken all corporate action required to execute, deliver and perform this
Agreement and each other Credit Document, including the issuance of the Notes,
to which it is party. Each of this Agreement, the Notes and each other Credit
Document constitutes a legal, valid and binding obligation of the Company or
such Subsidiary party thereto and is enforceable against such Person in
accordance with its terms.
8.10. NO LEGAL OBSTACLE TO AGREEMENTS.
Neither the execution and delivery of this Agreement, the Notes or any
other Credit Document, nor the consummation of any transaction referred to in or
contemplated by this Agreement or any other Credit Document, nor the fulfillment
of the terms hereof or thereof or of any other agreement, instrument, deed or
lease contemplated by this Agreement or any other Credit Document, has
constituted or resulted in or will constitute or result in:
(a) 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 by which it is bound, or of the Charter or By-laws of the Company or any
Subsidiary;
(b) the violation of any law, statute, judgment, decree or
governmental order, rule or regulation applicable to the Company or any
Subsidiary;
(c) the creation under any agreement, instrument, deed or lease of any
Lien upon any of the assets of the Company or any Subsidiary; or
(d) 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, the Notes or any other
Credit Document or the transactions contemplated hereby or thereby.
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8.11. DEFAULTS.
Neither the Company nor any Subsidiary is in default under any
provision of its Charter or By-laws or of this Agreement or any other Credit
Document. Neither the Company nor any Subsidiary is in default under any
provision of (a) the Bank Credit Facility or (b) any other agreement,
instrument, deed or lease to which it is party or by which it or its property is
bound, or has violated any law, judgment, decree or governmental order, rule or
regulation, in each case under this clause (b) so as to result, or pose a
material risk of resulting, in any Material Adverse Change.
8.12. CERTAIN BUSINESS REPRESENTATIONS.
8.12.1. LABOR RELATIONS.
No dispute or controversy between the Company or any Subsidiary and
any of their respective employees has resulted, or is reasonably likely to
result, in any Material Adverse Change, and neither the Company nor any
Subsidiary anticipates that its relationships with its unions or employees will
result, or are reasonably likely to result, in any Material Adverse Change. The
Company and each of the Subsidiaries is in compliance in all material respects
with all federal and state laws with respect to (a) non-discrimination in
employment with which the failure to comply, in the aggregate, has resulted in,
or poses a material risk of resulting in, a Material Adverse Change and (b) the
payment of wages.
8.12.2. ANTITRUST.
Each of the Company and its Subsidiaries is in compliance in all
material respects with all federal and state antitrust laws relating to its
business and the geographic concentration of its business except as has not
resulted in, and could not reasonably be expected to result in, a Material
Adverse Change.
8.12.3. ENVIRONMENTAL COMPLIANCE.
Each of the Company and its Subsidiaries is in compliance in all
material respects with the Clean Air Act, the Federal Water Pollution Control
Act, the Marine Protection Research and Sanctuaries Act and all other federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, licenses, agreements
or governmental restrictions relating to the disposal or use of acids,
chemicals, oils, solvents and other hazardous materials, substances or waste
products used or
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produced by the Company and its respective Subsidiaries in the course of their
businesses.
8.12.4. CERTAIN OTHER AGREEMENTS.
Each of the Funds has entered into Investment Advisory Contracts and
shareholder services agreements, and in the case of B Share Funds, a
Distribution Plan or Distribution Agreement with the Company or another
Subsidiary of the Company, which agreements are in full force and effect. The
Company has furnished to the trustees or directors, as the case may be, of each
Fund and Trust such information as may be reasonably necessary to evaluate the
terms of each Investment Advisory Contract and Distribution Plan or Distribution
Agreement in accordance with sections 15(c) and 12(b) of the Investment Company
Act.
8.12.5. CERTAIN LAWS.
Each of the Company and its Subsidiaries is in compliance with the
Investment Company Act, the Investment Advisers Act, the Exchange Act, the
Commodities Act and the rules and regulations of the NASD and similar state
laws, except to the extent that noncompliance would not result, or pose a
material risk of resulting, in any Material Adverse Change. Each Trust and Fund
is in compliance with the Investment Company Act and the Securities Act and
similar state laws, except to the extent that noncompliance would not result, or
pose a material risk of resulting, in any Material Adverse Change.
Except for periodic inspection reports from the regional office of the
Securities and Exchange Commission which have addressed various matters which
are not Material, neither the Company nor any Subsidiary has since January 11,
1996 received any correspondence from the Securities and Exchange Commission
relating to compliance with federal securities laws. No Person is serving or
acting as an officer, director or investment adviser of the Company except in
accordance with the provisions of the Investment Company Act and the Investment
Advisers Act and the rules and regulations of the Securities and Exchange
Commission under such Acts.
8.12.6. BURDENSOME OBLIGATIONS.
Neither the Company nor any Subsidiary is party to or bound by any
agreement, instrument, deed or lease or is subject to any Charter, By-law or
other restriction or commitment or requirement for future expenditures which, in
the opinion of the management of such Person, is so burdensome as in the
foreseeable future to result in, or pose a material risk of resulting in, a
Material Adverse Change.
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8.13. COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "BENEFIT LIABILITIES" has the
meaning specified in section 4001 of ERISA and the terms "CURRENT VALUE" and
"PRESENT VALUE" have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any prohibited transaction (as such
term is defined in section 406(a) of ERISA and section 4975(c)(1)(A)-(D) of the
Code) that could subject the Company or any holder of a Note to any tax or
penalty on prohibited transactions imposed under said section 4975 of the Code
or by section 502(i) of ERISA. The representation by the Company in the
preceding sentence of this Section 8.13(d) is made in reliance upon and subject
to the accuracy of the Purchaser's representation in Section 3.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by it.
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8.14. FOREIGN TRADE REGULATIONS; GOVERNMENT REGULATION.
8.14.1. FOREIGN TRADE REGULATIONS.
Neither the execution and delivery of this Agreement, the Notes or any
other Credit Document, nor the making by the Company of any use of the proceeds
of the sale of the Notes hereunder has constituted or resulted in or will
constitute or result in the violation of any Foreign Trade Regulation.
8.14.2. GOVERNMENT REGULATION.
Neither the Company nor any Subsidiary, nor any Person controlling the
Company or any Subsidiary or under common control with the Company or any
Subsidiary is subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act or any statute or
regulation which regulates the incurring by the Company or any Subsidiary of
Financing Debt as contemplated by this Agreement and the other Credit Documents.
8.15. USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes for
general corporate purposes. No part of the proceeds from the sale of the Notes
will be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation G of the Board of Governors of the
Federal Reserve System (12 CFR 207), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve the Company in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin
stock constitutes less than 5% of the value of the assets of the Company and its
Subsidiaries, as determined by any reasonable method, and the Company does not
have any present intention that margin stock will constitute more than 25% of
the value of such assets as so determined. As used in this Section, the terms
"MARGIN STOCK" and "PURPOSE OF BUYING OR CARRYING" shall have the meanings
assigned to them in said Regulation G.
8.16. DISCLOSURE.
Neither this Agreement nor any other Credit Document to be furnished
to the Purchaser by or on behalf of the Company or any Subsidiary in connection
with the transactions contemplated hereby or by such other Credit Document
contains any untrue statement of material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made. No fact is
actually known to the Company or any
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Subsidiary which has resulted, or in the future (so far as the Company or any
Subsidiary can reasonably foresee) will result, or poses a material risk of
resulting, in any Material Adverse Change, except to the extent that present or
future general economic conditions may result in a Material Adverse Change.
8.17. PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than the Purchaser and not more than nine other institutional
investors, each of which has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of Section 5 of the Securities Act.
8.18. SOLVENCY.
The Company is, and after giving effect to the issuance of the Notes
on the Closing Date will be, a "solvent institution", as said term is used in
Section 1405(c) of the New York Insurance Law, whose "obligations. . . are not
in default as to principal or interest", as said terms are used in said Section
1405(c).
9. DEFAULTS.
9.1. EVENTS OF DEFAULT.
The following events are referred to as "Events of Default":
9.1.1. The Company or any other Obligor shall fail to make any payment
in respect of: (a) interest on or in respect of any of the Notes as the same
shall become due and payable, and such failure shall continue for a period of
three Business Days or (b) principal of or Make-Whole Amount in respect of any
of the Notes as the same shall become due, whether at maturity or by
acceleration or otherwise.
9.1.2. The Company or any of its Subsidiaries shall fail to perform or
observe any of the provisions (a) of Section 7.4 and such failure shall continue
for a period of five Business Days or (b) of Sections 7.5 through 7.17.
9.1.3. The Company or any Subsidiary or any of their respective
Affiliates party to any Credit Document shall fail to perform or observe any
other covenant, agreement or provision to
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be performed or observed by it under this Agreement or any other Credit
Document, and such failure shall not be rectified or cured to the written
satisfaction of the Required Holders within 30 days after notice thereof by any
holder of a Note to the Company.
9.1.4. Any representation or warranty of or with respect to the
Company, any Subsidiary or any of their respective Affiliates party to any
Credit Document, pursuant to or in connection with this Agreement or any other
Credit Document shall be materially false on the date as of which it was made.
9.1.5. (a) The Company or any Subsidiary shall fail to make any
payment when due (after giving effect to any applicable grace periods) in
respect of any Financing Debt (other than the Credit Obligations) outstanding in
an aggregate amount of principal and accrued interest exceeding $5,000,000;
(b) The Company or any Subsidiary shall fail to perform or observe the
terms of any agreement relating to such Financing Debt, and such failure shall
continue, without having been duly cured, waived or consented to, beyond the
period of grace, if any, specified in such agreement, and such failure shall
permit the acceleration of such Financing Debt;
(c) Any such Financing Debt of the Company or any Subsidiary shall be
accelerated or become due or payable prior to its stated maturity for any reason
whatsoever (other than voluntary prepayments thereof);
(d) Any Lien on any property of the Company or any Subsidiary securing
any such Financing Debt shall be enforced by foreclosure or similar action; or
(e) any Event of Default as defined in the Bank Credit Facility shall
occur.
9.1.6. Except as permitted by Section 7.11, the Company, any Core
Mutual Fund Subsidiary any Pioneer Goldfields Entity or any other Subsidiary of
the Company with aggregate liabilities in excess of $2,500,000 shall initiate
any action to dissolve, liquidate or otherwise terminate its existence.
9.1.7. Any Credit Document or Material Agreement shall cease, for any
reason (other than the scheduled termination thereof in accordance with its
terms), to be in full force and effect; or the Company, any Subsidiary or any of
their respective Affiliates party thereto shall so assert in a judicial or
similar proceeding.
9.1.8. A final judgment (a) which, with other outstanding final
judgments against the Company, the Subsidiaries
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and any of their Affiliates party to any Credit Document, exceeds an aggregate
of $1,000,000 shall be rendered against the Company or any of the Subsidiaries
or Affiliates party to any Credit Document, or (b) which grants injunctive
relief that results in, or poses a material risk of resulting in, a Material
Adverse Change, and if, within 30 days after entry thereof, such judgment shall
not have been discharged or execution thereof stayed pending appeal, or if,
within 30 days after the expiration of any such stay, such judgment shall not
have been discharged.
9.1.9. (a) In any four consecutive fiscal quarters of the Company,
Investment Advisory Contracts that account for more than 15% of investment
assets under management arising from all Investment Advisory Contracts for the
four fiscal quarters of the Company completed immediately prior to the
commencement of the four consecutive fiscal quarters in question shall have been
terminated during the four fiscal quarters in question and shall not have been
extended or replaced (by merger of a Fund or Trust into another Fund or Trust or
otherwise) with other Investment Advisory Contracts with terms not materially
less favorable to the Company and its Subsidiaries and applicable fee rates not
less than the previous terms and applicable fee rates, in each case in the sole
discretion of the Majority Holders.
(b) Any Distribution Plan or Distribution Agreement shall have been
terminated and shall not have been extended or replaced with another
Distribution Plan or Distribution Agreement with terms not materially less
favorable to the Company and its Subsidiaries and applicable fee rates not less
than the terms and fee rates applicable to Distribution Fees of the previous
Distribution Plan or Distribution Agreement so terminated, in each case in the
sole discretion of the Majority Holders.
9.1.10. ERISA Group Persons shall fail to pay when due amounts (other
than amounts being contested in good faith through appropriate proceedings)
aggregating in excess of $1,000,000 for all ERISA Group Persons for which they
shall have become liable under Title IV of ERISA to pay to the PBGC or to a
Plan; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any Plan or a
proceeding shall be instituted by a fiduciary of any Plan against any ERISA
Group Person to enforce section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or a condition shall
exist which would require the PBGC to obtain a decree adjudicating that any Plan
must be terminated.
9.1.11. The Company, any Subsidiary or any of their respective
Affiliates obligated with respect to any Credit Obligation shall:
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(a) commence a voluntary case under the Bankruptcy Code or authorize,
by appropriate proceedings of its board of directors or other governing
body, the commencement of such a voluntary case;
(b) have filed against it a petition commencing an involuntary case
under the Bankruptcy Code which shall not have been dismissed within 60
days after the date on which such petition is filed; or file an answer or
other pleading within such 60-day period admitting or failing to deny the
material allegations of such a petition or seeking, consenting to or
acquiescing in the relief therein provided;
(c) have entered against it an order for relief in any involuntary
case commenced under the Bankruptcy Code;
(d) seek relief as a debtor under any applicable law, other than the
Bankruptcy Code, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors, or consent to or acquiesce in such relief;
(e) have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering or
approving its liquidation, reorganization or any modification or alteration
of the rights of its creditors or (iii) assuming custody of, or appointing
a receiver or other custodian for, all or a substantial portion of its
property; or
(f) make an assignment for the benefit of, or enter into a composition
with, its creditors, or appoint, or consent to the appointment of, or
suffer to exist a receiver or other custodian for, all or a substantial
portion of its property.
9.1.12. Any person or group of persons (within the meaning of Section
13 or 14 of the Exchange Act, but excluding any persons who are directors or
officers of the Company on the date of this Agreement who continue to be
directors and officers) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of 20% or more of the outstanding shares of common stock of the
Company or the percentage of the voting power required to elect a majority of
the board of directors of the Company; or during any period of twelve
consecutive calendar months, individuals who were directors of the Company on
the first day of such period shall cease to constitute a majority of the board
of the directors of the Company; or any three officers of the Company listed on
Exhibit 9.1.12 shall cease to be employed by the Company for any reason.
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9.1.13. The Company shall at any time cease to beneficially own either
(i) a controlling interest in the Pioneer Goldfields Entities or (ii) a
beneficial ownership interest in all of the Core Mutual Fund Subsidiaries at
least equal to that existing on the date hereof (or at the time such Core Mutual
Fund Subsidiary becomes a Subsidiary of the Company).
9.1.14. Any Fund or Trust shall cease to be qualified to be taxed as a
regulated investment company under subchapter M of the Code.
9.1.15. Any Material Adverse Change shall have occurred, or any event
or events shall have occurred which could reasonably be expected, individually
or in the aggregate, to cause a Material Adverse Change.
9.2. CERTAIN ACTIONS FOLLOWING AN EVENT OF DEFAULT.
If any one or more Events of Default shall occur, then in each and
every such case:
9.2.1. ACCELERATION.
(a) If a Bankruptcy Default has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, the
Majority Holders may at any time at its or their option, by notice or
notices to the Company, declare all the Notes at the time outstanding to be
immediately due and payable.
(c) If any Event of Default described in Section 9.1.1 has occurred
and is continuing, any holder or holders of Notes at the time outstanding
affected by such Event of Default may at any time, at its or their option,
by notice or notices to the Company, declare all the Notes held by such
holder or holders to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 9.2,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) (to the full extent permitted by applicable law)
the Make-Whole Amount determined in respect of such principal amount, shall all
be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the
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Company (except as herein specifically provided) and that the provision for
payment of a Make-Whole Amount by the Company in respect thereof in the event
that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right
under such circumstances.
9.2.2. OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 9.2.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
9.2.3. RESCISSION.
At any time after any Notes have been declared due and payable
pursuant to Section 9.2.1(a) or (b), the Required Holders, by written notice to
the Company, may rescind and annul any such declaration and its consequences if
(a) all overdue interest on the Notes, all principal of and Make-Whole Amount,
if any, on any Notes that are due and payable and are unpaid other than by
reason of such declaration, and all interest on such overdue principal and
Make-Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest in respect of the Notes, at the Default Rate, has been paid,
(b) all Events of Default and Defaults, other than the non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 11.1 and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to such Notes. No
rescission and annulment under this Section 9.2.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
9.3. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the
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Company under Section 14.1, the Company will pay to the holder of each Note on
demand such further amount as shall be sufficient to cover all costs and
expenses of such holder incurred in any enforcement or collection under this
Section 9, including reasonable attorneys' fees, expenses and disbursements.
10. INDEMNIFICATION.
Each of the Obligors agrees, to the fullest extent permitted by
applicable law, to indemnify, exonerate and hold the Purchaser and each of its
officers, directors, employees and agents (collectively the "INDEMNITEES" and
individually an "INDEMNITEE") free and harmless from and against any and all
actions, causes of action, suits, losses, liabilities and damages, and expenses
in connection therewith, including reasonable counsel fees and disbursements
(collectively the "INDEMNIFIED LIABILITIES") incurred by the Indemnitees or any
of them as a result of, or arising out of, or relating to, any transaction
financed or to be financed in whole or in part directly or indirectly with
proceeds from the sale of any of the Notes or the execution, delivery,
performance or enforcement of this Agreement, any other Credit Document or any
instrument contemplated hereby by any of the Indemnitees, except as to any
Indemnitee for any such Indemnified Liabilities arising on account of such
Indemnitee's gross negligence or willful misconduct; and if and to the extent
the foregoing undertaking may be unenforceable for any reason, each of the
Obligors agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law. The obligations of each of the Obligors under this Section shall survive
payment of the Notes.
11. AMENDMENT AND WAIVER.
11.1. REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 2, 3, 5 or 8, or any defined term (as it is used therein),
will be effective as to the Purchaser unless consented to by the Purchaser in
writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to
the provisions of Section 9 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of
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the Notes the holders of which are required to consent to any such amendment or
waiver, or (iii) amend any of Sections 5, 9.1.1 or 9.2 or this Section 11.1.
11.2. SOLICITATION OF HOLDERS OF NOTES.
11.2.1. SOLICITATION.
The Company will provide each holder of the Notes (irrespective of the
amount of Notes then owned by it) with sufficient information, sufficiently far
in advance of the date a decision is required, to enable such holder to make an
informed and considered decision with respect to any proposed amendment, waiver
or consent in respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 11 to each
holder of outstanding Notes promptly following the date on which it is executed
and delivered by, or receives the consent or approval of, the requisite holders
of Notes.
11.2.2. PAYMENT.
The Company will not directly or indirectly pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, or grant any security, to any holder of Notes or any lender under the
Bank Credit Facility as consideration for or as an inducement to the entering
into by any holder of Notes or any waiver or amendment of any of the comparable
terms and provisions of this Agreement and the Bank Credit Facility unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding even if such holder
did not consent to such waiver or amendment.
11.3. BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 11
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"THIS AGREEMENT" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
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11.4. NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
12. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
12.1. REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name and
address of each holder of one or more Notes, each transfer thereof and the name
and address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner
and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
12.2. TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder's attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), within five
Business Days thereafter the Company shall execute and deliver, at its expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request. Each such new Note shall be
dated and bear interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no interest
shall have been paid thereon. The Company may require payment of a sum
sufficient to cover any stamp tax or governmental charge imposed
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in respect of any such transfer of Notes. Notes shall not be transferred except
in denominations of $500,000 or more, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, one Note
may be issued to such holder in a denomination of less than $500,000.
As provided in the Intercreditor Agreement, the rights and obligations
of the holder of a Note thereunder shall be assigned automatically, without the
need for the execution of any document or any other action, to any transferee of
such Note whereupon such transferee shall automatically become a party to the
Intercreditor Agreement.
12.3. REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
nominee for or an Affiliate of, an original Purchaser or any other
Institutional Investor with a minimum net worth of at least $25,000,000,
such Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
within five Business Days thereafter the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.
13. PAYMENTS ON NOTES.
13.1. PLACE OF PAYMENT.
Subject to Section 13.2, payments of principal, premium, if any, and
interest becoming due and payable on the Notes shall be made at the principal
office of Citibank, N.A. in New York City. The Company may at any time, by
notice to each holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal
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office of the Company in New York City or the principal office of a bank or
trust company in New York City.
13.2. HOME OFFICE PAYMENT.
So long as the Purchaser or its nominee shall be the holder of any
Note, and notwithstanding anything contained in Section 13.1 or in such Note to
the contrary, the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose below the Purchaser's name in Schedule A, or
by such other method or at such other address as the Purchaser shall have from
time to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, the
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at the place for notices most recently
designated by the Company pursuant to Section 15. Prior to any sale or other
disposition of any Note held by the Purchaser or its nominee the Purchaser will,
at its election, either endorse thereon the amount of principal paid thereon and
the last date to which interest has been paid thereon or surrender such Note to
the Company in exchange for a new Note or Notes pursuant to Section 12.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by the
Purchaser under this Agreement and that has made the same agreement relating to
such Note as the Purchaser have made in this Section 13.2.
14. EXPENSES, ETC.
14.1. TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or other counsel)
incurred by the Purchaser and each holder of a Note in connection with such
transactions and in connection with any amendments, waivers, consents or other
actions under or in respect of this Agreement, the Notes and the Intercreditor
Agreement (whether or not such amendment, waiver or consent or other action
becomes effective), including: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement, the Notes or the Intercreditor Agreement or in responding
to any subpoena or other legal process or informal investigative demand issued
in connection with this Agreement, the Notes or the Intercreditor Agreement, or
by reason
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of being a holder of any Note; (b) the costs and expenses, including financial
advisors' and accountants' fees, incurred in connection with the insolvency or
bankruptcy of the Company or any Subsidiary or in connection with any work-out
or restructuring of the transactions contemplated hereby and by the Notes; and
(c) the costs and expenses incurred from time to time in connection with
execution and delivery of any instruments or documents contemplated by this
Agreement or the Intercreditor Agreement. The Company will pay, and will save
the Purchaser and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses, if any, of brokers and finders (other
than those retained by the Purchaser or any subsequent holder of a Note).
In furtherance of the foregoing, on the Closing Date the Company will
pay or cause to be paid the reasonable fees and disbursements and other charges
(including estimated unposted disbursements and other charges as of the Closing
Date) of special counsel for the Purchaser which are reflected in the statement
of such counsel submitted to the Company at least one Business Day prior to the
Closing Date. The Company will also pay, promptly upon receipt of supplemental
statements therefor, reasonable additional fees, if any, and disbursements and
other charges of such counsel in connection with the transactions hereby
contemplated (including disbursements unposted as of the Closing Date to the
extent such disbursements and other charges exceed estimated amounts paid as
aforesaid).
14.2. SURVIVAL.
The obligations of the Company under this Section 14 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
15. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(a) if to the Purchaser or its nominee, to the Purchaser or such
nominee at the address specified for such communications in Schedule A, or
at such other address as the Purchaser or such nominee shall have specified
to the Company in writing,
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(b) if to any other holder of any Note, to such holder at such address
as such other holder shall have specified to the Company in writing, or
(c) if to the Company or any Guarantor, to it at its address set
forth below its signature at the end hereof to the attention of Xxxxxx X.
Xxxxx, Esq., General Counsel, or at such other address as the Company or
such Guarantor shall have specified to the holder of each Note in writing.
Notices under this Section 15 will be deemed given only when actually
received.
16. COURSE OF DEALING; AMENDMENTS AND WAIVERS.
No course of dealing between the Purchaser or any holder of a Note, on
the one hand, and the Company or any Subsidiary or Affiliate of the Company, on
the other hand, shall operate as a waiver of any of the rights of the Purchaser
or any holder or holders of Notes under this Agreement or any other Credit
Document or with respect to the Credit Obligations. The Company acknowledges
that if the Purchaser or any holder of a Note, without being required to do so
by this Agreement or any other Credit Document, give any notice or information
to, or obtain any consent from, any of the Company and its Subsidiaries or any
of their respective Affiliates, the holders of the Notes shall not by
implication have amended, waived or modified any provision of this Agreement or
any other Credit Document, or created any duty to give any such notice or
information or to obtain any such consent on any future occasion. No delay or
omission in exercising any right, or any partial exercise of any right, on the
part of the Purchaser or any holder of a Note under this Agreement or any other
Credit Document or with respect to the Credit Obligations shall operate as a
waiver of such right or any other right hereunder or thereunder. A waiver on any
one occasion shall not be construed as a bar to or waiver of any right or remedy
on any future occasion. No waiver, consent or amendment with respect to this
Agreement or any other Credit Document shall be binding unless it is in writing
and signed by the holders of the required Credit Obligations.
17. DEFEASANCE.
When all Credit Obligations have been paid, performed and reasonably
determined by the holders of the Notes to have been indefeasibly discharged in
full, this Agreement shall terminate; PROVIDED, HOWEVER, that Sections 10, 14,
18 and 19 shall survive the payment of the Notes and the termination of this
Agreement.
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18. VENUE; SERVICE OF PROCESS.
Each of the Company and the Purchaser:
(a) Irrevocably submits to the nonexclusive jurisdiction of the state
courts of the State of New York and to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York for the
purpose of any suit, action or other proceeding arising out of or based
upon this Agreement, the Notes or any other Credit Document or the subject
matter hereof or thereof.
(b) Waives to the extent not prohibited by applicable law, and agrees
not to assert, by way of motion, as a defense or otherwise, in any such
proceeding brought in any of the above-named courts, any claim that it is
not subject personally to the jurisdiction of such court, that its property
is exempt or immune from attachment or execution, that such proceeding is
brought in an inconvenient forum, that the venue of such proceeding is
improper, or that this Agreement, the Notes or any other Credit Document,
or the subject matter hereof or thereof, may not be enforced in or by such
court.
Each Obligor consents to process being served in any suit, action or
proceeding of the nature referred to in clause (a) above by mailing a copy
thereof by registered or certified mail, postage prepaid, return receipt
requested, to such Obligor at its address specified in Section 15 or at such
other address of which the holders of the Notes shall then have been notified
pursuant to said Section. Each Obligor agrees that such service upon receipt (i)
shall be deemed in every respect effective service of process upon it in any
such suit, action or proceeding and (ii) shall, to the fullest extent permitted
by applicable law, be taken and held to be valid personal service upon and
personal delivery to such Obligor. Notices hereunder shall be conclusively
presumed received as evidenced by a delivery receipt furnished by the United
States Postal Service or any reputable commercial delivery service. Nothing in
this paragraph shall affect the right of any holder of a Note to serve process
in any manner permitted by law, or limit any right that the holders of any of
the Notes may have to bring proceedings against one or more of the Obligors in
the courts of any appropriate jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.
19. WAIVER OF JURY TRIAL.
TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED,
EACH OF THE PARTIES HERETO WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF,
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DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY NOTE OR ANY
OTHER CREDIT DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT
OBLIGATION OR IN ANY WAY CONNECTED WITH THE DEALINGS OF THE PARTIES HERETO IN
CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. The Company acknowledges
that it has been informed by the Purchaser that the provisions of this Section
19 constitute a material inducement upon which the Purchaser has relied and will
rely in entering into this Agreement and any other Credit Document, and that it
has reviewed the provisions of this Section 19 with its counsel. Any holder of a
Note or the Company may file an original counterpart or a copy of this Section
19 with any court as written evidence of the consent of the parties hereto to
the waiver of their rights to trial by jury.
20. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including (a)
consents, waivers and modifications that may hereafter be executed, (b)
documents received by the Purchaser on the Closing Date (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to the Purchaser, may be reproduced by the
Purchaser by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the Purchaser may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by the Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 20 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
21. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding (but without limiting the requirement in Section 4.2 that notice
of any optional prepayment specify a Business Day as the date fixed for such
prepayment), any payment of principal of or Make-Whole Amount or premium, if
any, or interest on any Note that is due on a date other than a Business Day
shall be made on the next succeeding Business Day without including the
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additional days elapsed in the computation of the interest payable on such next
succeeding Business Day.
22. GENERAL.
All covenants, agreements, representations and warranties made in this
Agreement or any other Credit Document or in certificates delivered pursuant
hereto or thereto shall be deemed to have been relied on by the Purchaser,
notwithstanding any investigation made by the Purchaser on its behalf, and shall
survive the execution and delivery hereof and thereof. The invalidity or
unenforceability of any provision hereof shall not affect the validity or
enforceability of any other provision hereof. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof. This Agreement and the other Credit Documents 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. This Agreement may
be executed in any number of counterparts which together shall constitute one
instrument. This Agreement shall be governed by and construed in accordance with
the laws (other than the conflict of laws rules) of the State of New York.
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed and delivered by its duly authorized officer as of the date first
above written.
THE PIONEER GROUP, INC. PURCHASER
By XXXXXXX X. XXXXXX Senior Vice THE TRAVELERS INSURANCE COMPANY
President, Chief Financial
Officer and Treasurer By XXXX X. XXXXXXXX
Second Vice president
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000 ACKNOWLEDGED WITH RESPECT TO
SECTIONS 7.8.12 AND 7.8.13:
GUARANTORS
PIONEER GOLDFIELDS HOLDINGS, INC.
PIONEERING MANAGEMENT CORPORATION
By XXXX X. XXXXX, XX
By XXXXXXX X. XXXXXX Director
Treasurer
00 Xxxxx Xxxxxx
00 Xxxxx Xxxxxx Xxxxxx, XX 00000-0000
Xxxxxx, XX 00000-0000
PIONEER GOLDFIELDS LTD.
PIONEER MANAGEMENT (IRELAND) LTD.
By XXXX X. XXXXX, XX
By XXXX X. XXXXX, XX. Director
Director
00 Xxxxx Xxxxxx Xx XXXX XXXXXX
Xxxxxx, XX 00000-0000 Director
PIONEERING SERVICES CORP. 00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
By XXXXXXX X. XXXXXX
Treasurer TEBEREBIE GOLDFIELDS LTD.
00 Xxxxx Xxxxxx By XXXX X. XXXXX, XX
Boston, MA 02109-1820 Chairman
By XXXX XXXXXX
Director
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
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SCHEDULE A
This Schedule A shows the manner of payment and addresses of the
Purchaser under the foregoing Note Agreement.
THE TRAVELERS INSURANCE COMPANY
(1) All payments on account of the Notes
shall be made by wire transfer of
federal or other immediately available
funds prior to 12:00 noon (New York
time) on the due date to The Travelers
Insurance Company--Consolidated Private
Placement Account No. 000-0-000000 at
The Chase Manhattan Bank, Xxx Xxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA#
021-000021, with sufficient information
(including interest rate and maturity)
to identify the source and application
of such funds, including the PPN: B225
3# AA 2 of the Notes.
(2) Address for all notices in respect of
payment:
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Securities Department-
Cashier
(3) Address for all other communications:
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Securities Department-
Private Placements
Telecopy: (000) 000-0000
(4) Tax Identification No.: 00-0000000
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EXHIBIT 2.1
[FORM OF NOTE]
7.95% Senior Note due 0000
Xx. X- Xxx Xxxx, Xxx Xxxx
$______________ [Date]
PPN: B225 3# AA 2
THE PIONEER GROUP, INC., a Delaware corporation (the "Company"), for
value received, hereby promises to pay to ____________________, or registered
assigns, the principal sum of ____________________ Dollars (or so much thereof
as shall not have been prepaid) on August 15, 2004, and to pay interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid
principal balance thereof from the date of this Note at the rate of 7.95% per
annum, quarterly on February 15, May 15, August 15 and November 15 in each year
until such principal sum shall have become due and payable (whether at maturity,
at a date fixed for prepayment or by declaration, acceleration or otherwise),
and to pay on demand interest (so computed) on any overdue principal and
premium, if any, and (to the extent permitted by applicable law) on any overdue
interest, at a rate per annum equal to the greater (determined on a daily basis)
of (i) 9.95% and (ii) 2% above the rate of interest publicly announced by
Citibank, N.A. from time to time at its principal office in The City of New York
as its prime or base rate. Payments of principal, premium, if any, and interest
shall be made in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts in
the manner and to the address designated by the holder hereof and, in the
absence of such designation, at said principal office of Citibank, N.A.
This Note is one of an issue of Senior Notes of the Company issued
pursuant to the Note Agreement dated as of August 14, 1997 (the "Note
Agreement"), entered into by the Company and certain of its Subsidiaries, as
guarantors, with an institutional investor. The holder of this Note is entitled
to the benefits of the Note Agreement and is also entitled to the benefits of a
certain Intercreditor Agreement referred to therein.
The Company may at its election prepay this Note, in whole or in part,
and the maturity hereof may be accelerated following an Event of Default, all as
provided in the Note Agreement, to which reference is made for the terms and
conditions of such provisions as to prepayment and acceleration, including
without limitation the payment of a make-whole premium in connection therewith.
88
Upon surrender of this Note for registration of transfer or exchange,
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and, at the
option of the holder, registered in the name of, the transferee. The Company and
any agent of the Company may deem and treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving payments of the
principal of, premium, if any, and interest hereon and for all other purposes
whatsoever, whether or not this Note is overdue, and the Company shall not be
affected by any notice to the contrary.
As provided in the Note Agreement, this Note shall be governed by and
construed in accordance with the law of the State of New York.
THE PIONEER GROUP, INC.
By_______________________________
Title:
89
EXHIBIT 2.3
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
90
2
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:
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
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3
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.
"SENIOR NOTEHOLDERS" has the meaning specified in the Introduction
hereof.
"SENIOR NOTE OBLIGATIONS" means the Credit 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
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4
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 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.
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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):
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 New York
Xxx Xxxx Xxxxxx, XXX-0
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
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0
Xxxxx Xxxxxx Xxxx & Trust Company
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Asset-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
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.
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(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) This 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 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.
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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:
SOCIETE GENERALE
By_______________________________
Title:
STATE STREET BANK & TRUST COMPANY
By_______________________________
Title:
BANQUE NATIONALE DE PARIS
By_______________________________
Title:
MELLON BANK, N.A.
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9
By_______________________________
Title:
ACKNOWLEDGED:
THE PIONEER GROUP, INC.
By_______________________________
Title:
98
Exhibit 5.2
Guarantors Contribution Agreement
This Agreement, dated as of August 14, 1997, is among each of The
Pioneer Group, Inc., a Delaware corporation (the "Company"), and the guarantors
listed on Schedule A hereto (the "Guarantors"), in connection with the Note
Agreement dated as of August 14, 1997, as from time to time in effect (the "Note
Agreement"), entered into by the Company and the Guarantors with The Travelers
Insurance Company (the "Purchaser"). Terms defined in the Note Agreement and not
otherwise defined herein are used herein with the meanings so defined.
The Guarantors agree as follows:
1. INDUCEMENT. In order to induce the Purchaser to purchase Notes
under the Note Agreement, the Guarantors have guaranteed, to the extent provided
in the Credit Documents, the payment and performance of all Credit Obligations.
The issuance of Notes under the Note Agreement will directly or indirectly inure
to the benefit of each Guarantor, and the guarantees referred to in the
foregoing sentence are in pursuant of the business purposes of each Guarantor
that has given such guarantee as an integral part of the business conducted and
proposed to be conducted by it and are reasonably necessary and convenient in
connection with the conduct of the business conducted and proposed to be
conducted by it. By virtue of the foregoing and after giving effect to the
probable liability of each Guarantor on its Subsidiary Guarantee, each Guarantor
is receiving at least fair consideration and reasonably equivalent value for
such Subsidiary Guarantee.
2. CONTRIBUTION. The Guarantors agree that, as among themselves in
their capacity as guarantors, the ultimate responsibility for repayment of the
Credit Obligations, in the event that the Company fails to pay when due the
Credit Obligations, shall be equitably apportioned, to the extent consistent
with the Credit Documents, among the respective Guarantors in the proportion
that each, in its capacity as a guarantor, has benefited from the issuance of
Notes under the Note Agreement, or if such equitable apportionment cannot
reasonably be determined or agreed upon among the affected Guarantors, in
proportion to their respective net worths determined on or about the date hereof
(or such later date as such Guarantor becomes party hereto). In the event that
any Guarantor pays an amount with respect to the Credit Obligations in excess of
its proportionate share as set forth in this Section 2, each other Guarantor
shall, to the extent consistent with the Credit Documents, make a contribution
payment to such Guarantor in an amount such that the aggregate amount paid by
each
99
Guarantor reflects its proportionate share of the Credit Obligations. In
the event of any default by any Guarantor under this Section 2, each other
Guarantor will bear, to the extent consistent with the Credit Documents, its
proportionate share of the defaulting Guarantor's obligations under this Section
2.
3. ENFORCEMENT; PARTIES. This Agreement is intended to set forth
only the rights and obligations of the Guarantors among themselves and shall not
in any way affect the obligations of any Guarantor under the Credit Documents
(which obligations shall at all times constitute the joint and several
obligations of all the Guarantors) and, in furtherance of the foregoing, the
provisions of this Agreement shall be carried out in a manner consistent with
the requirements contained in Section 6 of the Note Agreement. The parties agree
that, from time to time, additional Affiliates which are included as guarantors
under the Note Agreement may be added as parties hereto (and will also then be
added to Schedule A hereto) by executing a counterpart of this Agreement or an
agreement by which such Affiliate agrees to be bound hereby, and without further
action by any party hereto or thereto.
4. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which together shall constitute one instrument.
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first above written.
THE PIONEER GROUP, INC.
By__________________________
Title:
PIONEERING MANAGEMENT CORPORATION
By__________________________
Title:
PIONEER MANAGEMENT (IRELAND) LTD.
By__________________________
Title:
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PIONEERING SERVICES CORPORATION
By__________________________
Title:
101
4
SCHEDULE A
GUARANTORS
Pioneering Management Corporation
Pioneer Management (Ireland) Ltd.
Pioneering Services Corporation
102
Exhibit 5.3(a)
Opinion of Counsel for the Company
[intentionally omitted]
103
Exhibit 5.3(b)
Opinion of Irish Counsel for
Pioneer Management (Ireland) Limited
[Intentionally Omitted]
104
Exhibit 5.5
Officer's Certificate
[Intentionally Omitted]
105
Exhibit 7.16
Pricing Structure of B Share Funds
[Intentionally Omitted]
106
Exhibit 8.1
The Company and its Subsidiaries
[Intentionally Omitted]
107
Exhibit 8.4
Financing Debt
[Intentionally Omitted]
108
Exhibit 9.1.12
OFFICERS OF THE COMPANY
1. Xxxx X. Xxxxx, Xx. Chairman of the Board, Chief Executive Officer and
President of the Company
2. Xxxxxxx X. Xxxxxx Senior Vice President, Chief Financial Officer
and Treasurer of the Company and Subsidiaries
3. Xxxxx X. Xxxxxxx President and Chief Investment Officer of
Pioneering Management Corporation
4. Xxxxxxx X. Xxxxx, Xx. President and Director of Pioneering Services
Corporation
5. Xxxxxx Xxxxxx, III Managing Director and Chief Executive of Pioneer
Goldfields Limited and Managing Director of
Teberebie Goldfields Limited
6. Xxxxxx X. Xxxxxx President of Pioneer Funds Distributor, Inc.
