2
Sub Agreements PXP
1537240
SUBORDINATION AGREEMENT
This Subordination Agreement dated as of December 27, 2001 between Phoenix
Investment Partners, Ltd., a Delaware corporation ("PXP") and The Phoenix
Companies, Inc., a Delaware Corporation, ("Parent").
WITNESSETH THAT
WHEREAS pursuant to a loan agreement dated as of December 27, 2001 by and
between the Parent and PXP (the "Subordinated Loan Agreement") PXP has issued to
the Parent a Subordinated Note due January 15, 2007 payable to the Parent or
registered assigns in the principal sum of $150,000,000 (the "Subordinated
Note"); and
WHEREAS the Parent, PXP and Phoenix Life Insurance Company ("PLIC") entered
into a Credit Agreement dated as of June 11, 2001 with Bank of America, N.A. and
Fleet National Bank as Syndication Agents, Bank of Montreal as Administrative
Agent, Deutsche Bank AG and KeyBank National Association as Documentation Agents
and the financial institutions from time to time party thereto (the "Bank Credit
Agreement") pursuant to which the financial institutions party thereto commit,
on the terms and conditions therein stated, to extend credit to PLIC, PXP and
the Parent (such Credit Agreement as the same may from time to time be amended,
modified, increased, extended or restated being hereinafter referred to as the
"Bank Credit Agreement"); and
WHEREAS PXP is a subsidiary of the Parent and it will be to the advantage
of PXP and the Parent if the Subordinated Note is subordinated to the
obligations of PXP under the Bank Credit Agreement;
NOW THERFORE, the Parent and PXP agree one with another, for the benefit of
the holders of Senior Liabilities (as hereinafter defined) as follows:
1. Definitions. Terms defined in the preambles hereof shall have the
meanings so ascribed to them in the operative provisions hereof and,
in addition, the following terms shall have the meanings ascribed to
them below (all such defined terms to be equally applicable to the
singular and plural of the terms defined):
(a) "Senior Liabilities" means (i) all indebtedness, obligations and
liabilities of PXP arising under or pursuant to the Bank Credit
Agreement including the principal of and interest on all loans made to
PXP pursuant thereto and all other obligations of PXP to the financial
institutions from time to time party to the Bank Credit Agreement
and/or to any agent or arranger thereunder and (ii) any other
indebtedness of PXP which is not by its terms subordinated in right of
payment to any other indebtedness of PXP and which has been designated
as part of the Senior Liabilities for purposes of this Agreement by an
instrument in writing signed by PXP and the Parent and being in the
form of Exhibit A annexed hereto or in such other form as PXP and the
Parent may from time to time agree (a "Designation").
(b) "Junior Liabilities" means the principal of and interest on the
indebtedness evidenced by the Subordinated Note and any note issued in
renewal thereof or substitution therefor and all other indebtedness,
obligations and liabilities of PXP to the Parent arising under the
Subordinated Loan Agreement as the same may from time to time be
amended or modified.
(c) "Agents" means (i) the Administrative Agent under the Bank Credit
Agreement (it being acknowledged that as of the date hereof the
Administrative Agent thereunder is Bank of Montreal) and (ii) the
representative or representatives of the holders of any other Senior
Debt as specified in the applicable Designation.
(d) "Default" and "Event of Default" means (i) a Default or Event of
Default as defined in the Bank Credit Agreement and (ii) any event or
condition which under the terms of any agreement applicable to any
other Senior Liabilities is an event or condition which with or
without the lapse of time or the giving of notice or both would permit
the holder or holders of such Senior Liabilities (or a specified
number thereof) to declare such Senior Liabilities due and payable or
to exercise remedies with respect to non-payment.
2. Subordination. Except as hereinafter in this Agreement expressly
otherwise provided, or as the Agents may hereafter otherwise expressly
consent in writing, the payment of all Junior Liabilities shall be
postponed and subordinated to the payment in full of all Senior
Liabilities, and no payments or other distributions whatsoever in
respect of any Junior Liabilities shall be made, nor shall any
property or assets of PXP be applied to the purchase of other
acquisition or retirement of any Junior Liabilities; provided,
however, that, until such time as a Default or an Event of Default
shall have occurred and be continuing and unless a Default or Event of
Default would occur upon a payment of interest on the Junior
Liabilities, interest may be paid on the Junior Liabilities when and
as due.
3. Bankruptcy, Insolvency, Etc. In the event of any dissolution, winding
up, liquidation, readjustment, or reorganization or other similar
proceedings relating to PXP or to its creditors, as such, or to its
property (whether voluntary or involuntary, partial or complete, and
whether in bankruptcy, insolvency or receivership, or upon an
assignment for the benefit or creditors, or any other marshalling of
the assets and liabilities of PXP, or any sale of all or substantially
all of the assets of PXP, or otherwise), the Senior Liabilities shall
first be paid in full before the holder of the Junior Liabilities
shall be entitled to receive or to retain any payment or distribution
in respect of the Junior Liabilities and, in order to implement the
foregoing: (a) all payments and distributions of any kind or character
in respect of the Junior Liabilities to which the undersigned would be
entitled if the Junior Liabilities were not subordinated, pursuant to
this Agreement, shall be made directly to the Agents on a pro rata
basis; (b) the Parent shall promptly file a claim or claims, in the
form required in such proceedings, for the full outstanding amount of
the Junior Liabilities, and shall cause said claim or claims to be
approved and all payments and other distributions in respect thereof
to be made directly to the Agents on a pro rata basis; and (c) the
Parent hereby irrevocably agrees that each Agent, may at its sole
discretion, in the name of the Parent or otherwise, demand, xxx for,
collect, receive and receipt for any and all such payments or
distributions, and file, prove and vote or consent in any such
proceedings with respect to any and all claims of the undersigned
relating to the Junior Liabilities.
4. Payments Held in Trust. In the event that the Parent receives any
payment or other distribution of any kind or character from the PXP,
or from any other source whatsoever, in respect of any of the Junior
Liabilities, other than as expressly permitted by the terms of this
Agreement, such payment or other distribution shall be received in
trust for the Agents and promptly turned over by the undersigned to
the Agents on a pro rata basis. The Parent will xxxx its books and
records, and cause PXP to xxxx its books and records, so as clearly to
indicate that the Junior Liabilities are subordinated in accordance
with the terms of this Agreement, and will cause to be clearly
inserted in any promissory note or other instrument which at any time
evidences any of the Junior Liabilities a statement to the effect that
the payment thereof is subordinated in accordance with the terms of
this Agreement. The Parent will execute such further documents or
instruments and take such further action as any Agent may reasonably
from time to time request to carry out the intent of this Agreement.
5. Application of Payments: No Subrogation. All payments and
distributions received by any Agent in respect of the Junior
Liabilities, to the extent received in or converted into cash, may be
applied by the Agents first to the payment of any and all expenses
(including attorneys' fees and legal expenses) paid or incurred by the
Agents in enforcing this Agreement, or in endeavoring to collect or
realize upon any of the Junior Liabilities or any security therefor,
and any balance thereof shall, solely as between the undersigned and
the Agents be applied by the Agents toward the payment of the Senior
Liabilities remaining unpaid on a pro rata basis; but, as between PXP
and its creditors, no such payments or distributions of any kind or
character shall be deemed to be payments or distributions in respect
of the Senior Liabilities; and, notwithstanding any such payments or
distributions received by the Agents in respect of the Junior
Liabilities and so applied by the Agents toward the payment of the
Senior Liabilities, the undersigned shall be subrogated to the then
existing rights of the Agents, if any, in respect of the Senior
Liabilities, only at such time as this Agreement shall have been
discontinued and the Agents shall have received payment of the full
amount of the Senior Liabilities as provided for in Section 8 hereof.
6. Waivers by the Parent. The Parent hereby waives: (a) notice of
acceptance by any Agent, any lender or any holder of a Senior
Liability of this Agreement; (b) notice of the existence, or creation
or non-payment of all or any of the Senior Liabilities; and (c) all
diligence in collection or protection of, or realization upon the
Senior Liabilities, or any thereof, or any security therefor.
7. Obligations of the Undersigned. The undersigned will not, without
prior written consent of the Agents: (a) cancel, waive, forgive,
transfer or assign, or attempt to enforce or collect, or subordinate
to any liabilities other than the Senior Liabilities, any Junior
Liabilities or any rights in respect thereof; (b) take any collateral
security for any Junior Liabilities; (c) convert any Junior
Liabilities into stock of PXP; or (d) commence, or join with any other
creditor in commencing, any bankruptcy, reorganization or insolvency
proceedings with respect to PXP.
8. Continuing Subordination. This Agreement shall, in all respects, be a
continuing agreement and shall remain in full force and effect
(notwithstanding, without limitation, the dissolution of the
undersigned or that, at any time or from time to time, all Senior
Liabilities may have been paid in full), subject to discontinuance
only upon receipt by the Agents of written notice from the
undersigned, or any person duly authorized and acting on behalf of the
undersigned, of the discontinuance hereof; provided, however, that no
such notice of discontinuance shall affect or impair any of the
agreements and obligations of the undersigned hereunder with respect
to any and all Senior Liabilities existing prior to the time of
receipt of such notice by the Agents, any and all Senior Liabilities
created or acquired thereafter pursuant to any previous commitments
made by any party to the Senior Liabilities, including, without
limitation, under or in connection with the Bank Credit Agreement, any
and all extensions, renewals or refinancings of any of the foregoing,
any and all interest accruing on any of the foregoing, and any and all
expenses paid or incurred by any Agent, any holder of a Senior
Liability in endeavoring to collect or realize upon any of the
foregoing, or any security therefor; and all of the agreements and
obligations of the Parent under this Agreement shall, notwithstanding
any such notice of discontinuance, remain fully in effect until all
such Senior Liabilities (including any extensions or renewals of any
thereof and all such interest and expenses) shall have been paid in
full.
9. Rights of the Agents and the Holders of the Senior Liabilities. Any
Agent, or any holder of a Senior Liability may, from time to time,
whether before or after any discontinuance of this Agreement, at its
sole discretion and without notice to the undersigned, take any or all
of the following actions: (a) retain or obtain a security interest in
any property to secure any of the Senior Liabilities; (b) retain or
obtain the primary or secondary obligations of any other obligor or
obligors with respect to any of the Senior Liabilities; (c) extend or
renew for one or more periods (whether or not longer than the original
period), alter or exchange any of the Senior Liabilities, or release
or compromise any obligations of any nature of any obligor with
respect to any of the Senior Liabilities; and (d) release its security
interest in, or surrender, release or permit any substitution or
exchange for all or any part of any property security any of the
Senior Liabilities, or extend or renew for one or more periods
(whether or not longer than the original), or release, compromise,
alter or exchange any obligations of any nature of any obligor with
respect to any such property.
10. Transfer of Senior Liabilities. Each holder of Senior Liabilities may,
from time to time, whether before or after any discontinuance of this
Agreement, without notice to the undersigned, assign or transfer any
or all of the Senior Liabilities, or any interest therein; and,
notwithstanding any such assignment or transfer or any subsequent
assignment or transfer thereof, such Senior Liabilities shall be and
remain Senior Liabilities for the purposes of this Agreement, and
every immediate and successive assignee or transferee of any of the
Senior Liabilities or of any interest therein shall, to the extent of
the interest of such assignee or transferee in the Senior Liabilities,
be entitled to the benefits of this Agreement to the same extent as if
such assignee or transferee were the transferring holder; provided,
however, that, unless the transferring holder shall otherwise consent
in writing, the transferring holder shall have an unimpaired right,
prior and superior to that of any such assignee or transferee, to
enforce this Agreement, for the benefit of the transferring holder, as
to those of the Senior Liabilities which the transferring holder has
not assigned or transferred.
11. Miscellaneous. Neither any Agent, nor any holder of a Senior Liability
shall be prejudiced in its rights under this Agreement by any act or
failure to act of PXP or the Parent, or any noncompliance of PXP or
the Parent with any agreement or obligations, regardless of any
knowledge thereof which any Agent, or any holder of a Senior Liability
may have, or with which such Agent or such holder may be charged; and
no action permitted hereunder of any Agent, or any holder of a Senior
Liability shall in any way affect or impair the rights of any Agent,
or any holder of a Senior Liability and the obligations of the
undersigned under this Agreement. No delay on the part of any Agent,
or any holder of a Senior Liability in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial
exercise by any Agent, or any holder of a Senior Liability or any
holder of a Senior Liability in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise
by any Agent, or any holder of a Senior of any right or remedy; nor
shall nay modification or waiver of any of the provisions of this
Agreement be binding upon any Agent, or any holder of a Senior
Liability, except as expressly set forth in a writing duly signed and
delivered on behalf of any Agent. For the purposes of this Agreement,
Senior Liabilities shall include all obligations of PXP,
notwithstanding any right or power of PXP or anyone else to assert any
claim or defense as to the invalidity or unenforceability of any such
obligation, and no such claim or defense shall affect or impair the
agreements and obligations of the undersigned hereunder.
12. Notices. All notices, demands, instructions and other communications
required or permitted to be given to or made upon the Parent or PXP,
or any other Person, shall be in writing and shall be personally
delivered or sent by registered or certified mail, postage prepaid,
return receipt requested, or by delivery or telecopier, and shall be
deemed to be given, for purposes of this Agreement, on the day that
such writing is delivered or sent to the intended recipient thereof,
in accordance with the provisions of this Section. Unless otherwise
specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section, notices, demands, instructions
and other communications shall be given to or made upon PXP and Parent
at their address (or to their telecopier number) specified below:
00 Xxxxxxxx Xxxxxx
Xxxxxxxx. XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telecopier No. 000-000-0000
Unless otherwise specified in a notice sent or delivered in accordance with
the provisions of Section 13.2 of the Bank Credit Agreement, notices,
demands, instructions and other communications in writing shall be
given to or made upon the Agent or the lenders under the Bank Credit
Agreement at their respective addresses (or to their respective
telecopier numbers) indicated in Section 13.2 of the Bank Credit Agreement.
13. Agents Appointed Attorney-in-Fact. The undersigned hereby appoints
each Agent the undersigned's attorney-in-fact, with fully power of
substitution, for the purpose of taking such action and executing
agreements, instruments and other documents in the name of the
undersigned, or otherwise, as such Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is
coupled with an interest and is irrevocable.
14. Binding Effect. This Agreement shall be binding upon the undersigned,
and upon the successors and assigns of the undersigned; and all
references herein to PXP and to the Parent, respectively, shall be
deemed to include any successor or successors, whether immediate or
remote, to PXP and to the Parent, including, in the case of PXP, any
assignee of the Junior Liabilities.
15. Governing Law; Severability of Provisions. This Agreement shall be
construed in accordance with and governed by the internal laws of the
State of New York, Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
THE PHOENIX COMPANIES, INC.
By
Its___________________________________________________
ACKNOWLEDGEMENT AND AGREEMENT
The undersigned PXP hereby acknowledges receipt of a copy of the foregoing
Subordination Agreement, waives notice of acceptance thereof by any Agent and/or
any holder of a Senior Liability, and agrees to be bound by the terms and
provisions thereof, to make no payments or distributions contrary to the terms
and provisions thereof, and to do every other act and thing necessary or
appropriate to carry out such terms and provisions. In the event of any
violation of any of the terms and provisions of the foregoing Subordination
Agreement, then, at the election of the Agents, any and all obligations of the
PXP under or in connection with the Senior Liabilities shall forthwith become
due and payable, and any and all agreements to make loans to PXP under or in
connection with the Bank Credit Agreement or any agreement under which any other
Senior Liabilities are incurred shall forthwith terminate, notwithstanding any
provisions thereof to the contrary.
Dated: December 27, 2001.
PHOENIX INVESTMENT PARTNERS, LTD.
By
Its______________________________________________
EXHIBIT A
DESIGNATION
The Phoenix Companies, Inc.
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Re: Subordination Agreement
Gentlemen:
We refer to the Subordination Agreement between us dated as of December 27,
2001 (the "Subordination Agreement"), capitalized terms used without definition
below to have the meanings ascribed to them in the Subordination Agreement. This
will serve to confirm our agreement that the indebtedness described below shall
constitute part of the "Senior Liabilities" for purposes of the Subordination
Agreement. The Agent for such Senior Liabilities shall be _________________ and
notices to such Agent shall be sent to it as follows:
Very truly yours,
PHOENIX INVESTMENT PARTNERS, LTD.
By
Its____________________________
Accepted and agreed.
THE PHOENIX COMPANIES, INC.
By
Its_________________________________
