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Exhibit 10.89
THE PIONEER GROUP, INC.
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SUPPLEMENTAL AGREEMENT NO. 5
Dated as of November 11, 1999
amending the
Note Agreement dated as of August 14, 1997
(as amended)
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Senior Notes due 2004
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THE PIONEER GROUP, INC.
SUPPLEMENTAL AGREEMENT NO. 5
as of November 11, 1999
Re: Senior Notes due 2004
The Travelers Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
THE PIONEER GROUP, INC., a Delaware corporation (the
"Company"), hereby agrees with you as follows:
Section 1. NOTE AGREEMENT AMENDMENTS. Pursuant to the Note
Agreement dated as of August 14, 1997, as amended by Supplemental Agreement No.
1 and Supplemental Agreement No. 2, each dated as of September 30, 1998,
Supplemental Agreement No. 3, dated as of December 29, 1998 and Supplemental
Agreement Xx. 0, xxxxx xx xx Xxxx 00, 0000 (xx so amended, the "Note
Agreement"), entered into by the Company with The Travelers Insurance Company,
the Company issued and sold $20,000,000 aggregate principal amount of its Senior
Notes due 2004 (the "Notes"). Unless the context otherwise requires, capitalized
terms used herein without definition have the respective meanings ascribed
thereto in the Note Agreement. The Notes originally bore an interest rate of
7.95% per annum. Pursuant to Supplemental Agreement No. 1, such interest rate
was changed to a floating rate of interest as therein described. Pursuant to
Supplemental Agreement No. 3, such interest rate was changed to a fixed rate of
8.95% per annum. The Company has requested you, as the holder of all of the
outstanding Notes, further to amend the Note Agreement and the Notes. Subject to
this Supplemental Agreement No. 5 (this "Supplemental Agreement") becoming
effective as hereinafter provided, the Company and the holder of the Notes do
hereby agree that the Note Agreement is amended pursuant to Section 11.1 of the
Note Agreement as follows:
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A. Section 1 of the Note Agreement is amended by:
1. deleting the definitions of "Consolidated Tangible Net
Worth", "Default Rate" and "Subsidiary Guarantors" in their entirety
and replacing them with the following new definitions:
"'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-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), plus
(d) the amount by which such stockholders' equity has
been decreased by the after-tax noncash write-down of assets
employed in the Company's and its Subsidiaries' international
operations, up to an aggregate of all such write-downs of
$12,500,000."
* * * *
"'Default Rate' means that rate of interest that is
the greater of (i) 11.45% 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 at its prime
rate."
* * * *
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B. Section 4.6 of the Note Agreement is amended by changing
the definition of "Remaining Scheduled Payments" by deleting the phrase
"determined for such purpose at the rate of 8.95%" and replacing it with the
phrase "determined for such purpose at the rate of 9.45%".
C. Section 7.5.3 is amended to read in its entirety as
follows:
"7.5.3. Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth shall, on and after September
30, 1999, at all times equal or exceed $72,500,000; provided, however,
that on the first day of each fiscal quarter of the Company beginning
with the fiscal quarter ending September 30, 1999, such dollar amount
shall be increased by an amount equal to 50% of the sum, for the fiscal
quarter then most recently ended, of (i) Consolidated Net Income (only
if in excess of zero) and (ii) the after-tax gain on the sale or
disposition of assets or capital stock of Pioneer Goldfield Entities."
D. Section 7.6.1 is amended to read in its entirety as
follows:
"7.6.1. Indebtedness in respect of the Credit Obligations and
the Bank Credit Facility, provided that after such Indebtedness under
the Bank Credit Facility has been repaid in full and the Bank Credit
Facility has been terminated, other Indebtedness of the Company
(including without limitation in respect of the Credit Obligations)
shall not exceed $105,000,000."
E. A new Section 7.9.A is hereby added to the Note Agreement
immediately after Section 7.9 to read as follows:
"7.9.A. Cash Expenditures.The Company and each of its
Subsidiaries shall restrict the net amount of cash expended on
international operations and timber operations as follows:
7.9.A.1. During the period commencing September 30, 1999 and
ending March 31, 2000, the Company and its Subsidiaries shall not
expend cash in connection with the Company's or any Subsidiary's
international operations that in the aggregate exceeds $10,000,000, net
of any cash provided during such period by such international
operations.
7.9.A.2. During the period commencing April 1, 2000 and ending
March 31, 2001, the Company and each of its
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Subsidiaries shall not expend cash in connection with the Company's or
any Subsidiary's international operations that in the aggregate exceeds
$15,000,000, net of any cash provided during such period by such
international operations.
7.9.A.3. On and after October 1, 1999, the Company and each of
its Subsidiaries shall not expend cash in connection with the Company's
or any Subsidiary's timber operations that in the aggregate exceeds
$3,000,000, net of any cash provided during such period by such timber
operations.
7.9.A.4. For purposes of this Section 7.9.A, references to
international operations shall not include any operations of the
Company's Core Mutual Fund Subsidiaries and any Subsidiaries of such
Core Mutual Fund Subsidiaries."
F. Amendment to Exhibit 2.1. Exhibit 2.1 of the Note Agreement
is deleted in its entirety and replaced with Exhibit A hereto.
G. Amendment to Exhibit 9.1.12. Exhibit 9.1.12 of the Note
Agreement, entitled "Officers of the Company," is deleted in its entirety and
replaced with Exhibit B hereto.
Section 2. AMENDMENT OF OUTSTANDING NOTE. Subject to this
Supplemental Agreement becoming effective, the text of the outstanding Note
(other than the date, the name of the payee and the principal amount, which are
unchanged), is amended pursuant to Section 11.1 of the Note Agreement, to read
as provided in Exhibit A to this Supplemental Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to you as follows:
A. Organization, Authorization, Etc. The Company and each of
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the State of its organization, and has all requisite
power and authority to execute, deliver and perform its obligations under the
Note Agreement as amended by this Supplemental Agreement.
The execution, delivery and performance of this Supplemental Agreement
has been duly authorized by all necessary corporate and, if required,
stockholder action on the part of the Company and each Subsidiary Guarantor, as
applicable. This Supplemental Agreement is a legal, valid and binding obligation
of the Company and the Subsidiary Guarantors, as applicable, enforceable against
the Company or such Subsidiary Guarantors in accordance with its terms, except
as enforceability may be limited by bankruptcy,
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insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
B. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company or the Subsidiary Guarantors of this
Supplemental Agreement does not and will not (A) contravene, result in any
breach of, or constitute a default under, or result in the creation of any Lien
in respect of any property of the Company or any Subsidiary under any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which the Company or
any Subsidiary is bound or by which the Company or any Subsidiary or any of
their respective properties may be bound or affected, (B) conflict with or
result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Company or any Subsidiary or (C) violate any provision of any
statute or other rule or regulation of any Governmental Authority applicable to
the Company or any Subsidiary.
C. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company or any Subsidiary Guarantor of this Supplemental Agreement.
D. No Default, etc. No Event of Default or Default has occurred
and is continuing, and neither the Company nor any Core Mutual Fund Subsidiary
is in default (whether or not waived) in the performance or observance of any of
the terms, covenants or conditions contained in any instrument evidencing any
Indebtedness and there is no pending request by the Company (except pursuant to
this Supplemental Agreement) or any such Subsidiary for any amendment or waiver
in respect of any contemplated or possible default with respect to such
Indebtedness and no event has occurred and is continuing which, with notice or
lapse of time or both, would become such a default.
E. No Undisclosed Fees. The Company has not, directly or
indirectly, other than with respect to the payment of consideration disclosed to
the Noteholders, paid or caused to be paid any consideration (as supplemental or
additional interest, a fee or otherwise) to any party to the Bank Credit
Facility in order to induce such party to enter into an agreement
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substantially similar to this Supplemental Agreement, nor has the Company agreed
to made any such payment.
Section 4. REPRESENTATION OF THE NOTEHOLDER. You represent to
the Company that you are the beneficial owner of Notes in an aggregate principal
amount of $20,000,000.
Section 5. EFFECTIVENESS OF THIS SUPPLEMENTAL AGREEMENT. This
Supplemental Agreement shall become effective on the date (the "Effective Date")
on which all of the following conditions precedent shall have been satisfied:
A. Proceedings. All proceedings taken by the Company and the
Subsidiary Guarantors in connection with the transactions contemplated hereby
and all documents and papers incident thereto shall be satisfactory to you, and
you and your special counsel shall have received all such counterpart originals
or certified or other copies of such documents and papers, all in form and
substance satisfactory to you, as you or they may reasonably request in
connection therewith.
B. Representations and Warranties. The representations and
warranties of the Company contained in Section 3 of this Supplemental Agreement
shall be true on and as of the Effective Date as though such representations and
warranties had been made on and as of the Effective Date, and you shall have
received a certificate of a senior financial officer of the Company, dated the
Effective Date, to such effect.
C. Opinion of Counsel for the Company. You shall have received
an opinion in form and substance satisfactory to you, dated the date of this
Supplemental Agreement, from Xxxxxx X. Xxxxx, General Counsel for the Company,
concerning the due authorization, execution, delivery and performance of this
Supplemental Agreement and such other matters incident to the transactions
contemplated hereby as you may reasonably request.
D. Cash Flow Forecasts. The Company shall have provided
monthly cash flow forecasts for the period commencing October 1, 1999 and ending
June 30, 2000.
E. Payment of Fees. The Company shall have paid you an
amendment fee equal to 0.50% of the unpaid principal amount of the Notes and an
administrative fee of $36,000. The Company shall have also paid the fees and
disbursements of your special counsel as contemplated by Section 8 of this
Supplemental Agreement.
Section 6. CONDITION SUBSEQUENT. You agree to release Pioneer
Management (Ireland) Limited from the Guarantee subject
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to the condition subsequent that the Company shall have obtained from the
lenders party to the Bank Credit Facility within thirty days of the Effective
Date, as defined herein, documentation sufficient to release Pioneer Management
(Ireland) Limited as guarantor under the Bank Credit Facility. You agree that
this release is effective as of January 1, 1999.
Section 7. EXCHANGE OR NOTATION OF NOTES. Prior to any
transfer of an outstanding Note you agree that you will either make a notation
of the amendment of such Note pursuant to this Supplemental Agreement, or
surrender such Note in exchange for a new Note in accordance with Section 12.2
of the Note Agreement. Any Note executed and delivered on or after the Effective
Date shall be in the form of Exhibit A hereto.
Section 8. EXPENSES. Without limiting the generality of
Section 5.8 of the Note Agreement, the Company agrees, whether or not the
transactions contemplated hereby are consummated, to pay the reasonable fees and
disbursements and other charges of Xxxxxxx Xxxx & Xxxxxxxxx, your special
counsel, for their services rendered in connection with such transactions and
with respect to this Supplemental Agreement and any other document delivered
pursuant to this Supplemental Agreement and reimburse you for your out-of-pocket
expenses in connection with the foregoing.
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Section 9. RATIFICATION. Except as amended hereby, the Note
Agreement is in all respects ratified and confirmed and the provisions thereof
shall remain in full force and effect, and the Subsidiary Guarantors hereby
ratify their obligations thereunder and under the Subsidiary Guarantees to which
they are a party.
Section 10. COUNTERPARTS. This Supplemental Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
Section 11. GOVERNING LAW. This Supplemental Agreement shall
be governed by and construed in accordance with the laws of the State of New
York.
If you are in agreement with the foregoing, please sign the
form of acceptance in the space below provided, whereupon this Supplemental
Agreement shall become a binding agreement between you and the Company, with the
approval of the Subsidiary Guarantors, subject to becoming effective as
hereinabove provided.
THE PIONEER GROUP, INC.
By:/s/ Xxxx X. Xxxxxxx
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Title: Executive Vice President,
Chief Financial Officer and
Treasurer
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
SUBSIDIARY GUARANTORS
PIONEER INVESTMENT MANAGEMENT, INC.
By:/s/ Xxxx X. Xxxxxxx
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Title: Treasurer
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
PIONEER MANAGEMENT (IRELAND) LTD.
By:/s/ Xxxx X. Xxxxx, Xx.
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Title: Director
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
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PIONEERING SERVICES CORPORATION
By:/s/ Xxxx X. Xxxxxxx
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Title: Treasurer
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
ACCEPTED
THE TRAVELERS INSURANCE COMPANY
By: /s/ Xxxxxx Xxxxxxxxxxxx
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Title: Investment Officer
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EXHIBIT A
EXHIBIT 2.1
[FORM OF NOTE]
THE PIONEER GROUP, INC.
9.45% Senior Note due 0000
Xx. X- Xxx Xxxx, Xxx Xxxx
$______________ [Date]
PPN:[ ]
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
9.45% 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) 11.45% 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, as amended by
Supplemental Agreement No. 1 dated as of September 30, 1998, Supplemental
Agreement No. 2 dated as of September 30, 1998, Supplemental Agreement No. 3
dated as of December 30, 1998, Supplemental Agreement No. 4 dated as of June 30,
1999 and Supplemental Agreement No. 5 dated as of November 11, 1999 (as so
amended, 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
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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.
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:
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EXHIBIT B
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. Xxxx X. Xxxxxxx Executive Vice President, Chief Financial Officer and
Treasurer of the Company and Subsidiaries
3. Xxxxx X. Xxxxxxx Executive Vice President of the Company and President
of Pioneer Investment Management, Inc. and Pioneer
Funds Distributor, Inc.
4. Xxxxxxx X. Xxxxx, Xx. Executive Vice President of the Company and Director
of Pioneering Services Corporation
5. Xxxxx X. Xxxxxxx Managing Director and Chief Executive of Pioneer
Goldfields Limited and Managing Director of Teberebie
Goldfields Limited
