AGREEMENT AMONG SHAREHOLDERS
AND IRREVOCABLE PROXY
Universal American Financial Corp., a New York corporation ("Universal")
and Capital Z Financial Services Fund II, L.P. ("Capital Z") propose to enter
into a Share Purchase Agreement (the "Share Purchase Agreement"), substantially
in the form of the draft thereof dated December 21, 1998, and Universal,
PennCorp Financial Group Inc., a Delaware corporation ("PennCorp"), Capital Z,
Xxxxxxx X. Xxxxxxx ("Xxxxxxx") and the undersigned other shareholders of
Universal (the "Shareholders") propose to enter into a Voting Agreement (the
"Voting Agreement"), substantially in the form of the draft thereof dated
December 21, 1998.
Xxxxxxx and each of the Shareholders are currently shareholders of
Universal.
It is a condition to Capital Z's execution and delivery of the Share
Purchase Agreement and the Voting Agreement that Xxxxxxx and each of the
Shareholders execute and deliver this Agreement among Shareholders and
Irrevocable Proxy (the "Agreement and Irrevocable Proxy").
NOW, THEREFORE, in consideration of these premises and in order to induce
Capital Z to enter into the Share Purchase Agreement and to provide Xxxxxxx with
the authority necessary to enter into, and to carry out his obligations under,
the Voting Agreement, each of the undersigned Shareholders hereby
unconditionally and irrevocably agrees as follows:
1. Such Shareholder hereby unconditionally and irrevocably appoints Xxxxxxx
and Judge Xxxxxxx Xxxxxxx, and each of them, proxies and attorneys-in-fact, with
full power to each of substitution, on behalf and in the name of the
undersigned, to represent the undersigned at the meeting of shareholders of
Universal to be held in accordance with the Purchase Agreement and Voting
Agreement (the "Meeting") to vote all shares of stock at the Meeting the
undersigned would be entitled to vote if personally present, in favor of (a)
authorizing the issuance of additional shares of Common Stock as contemplated in
the Share Purchase Agreement as amended (if applicable); (b) in the case of the
Shareholders holding shares of Series C-1 Voting Preferred Stock of the Company,
approving the issuance of indebtedness of finance the acquisition by Universal
of certain businesses of PennCorp pursuant to the purchase Agreement among
Universal, PennCorp, Pacific Life and Accident Insurance Company, Pennsylvania
Life Insurance Company, Southwestern Financial Corporation, Constitution Life
Insurance Company and PennCorp Financial Services, Inc., as amended (if
applicable); (c) amending Universal's Certificate of Incorporation in the
following manner: (i) increase the authorized number of shares, (ii) provide
that the maximum number of directors on the Board is nine and eliminate the
classified board, (iii) specifically provide for action of the Shareholders by
written consent in lieu of a meeting, and that such written consent may only be
by the number of shareholders required to approve such action, (iv) provide for
supermajority approval by the Board of Directors for certain corporate actions,
(v) no longer require supermajority
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approval by shareholders of Universal for certain corporate transactions with
interested parties, and (vi) no longer require supermajority approval by
shareholders of Universal to amend certain provisions of the Certificate of
Incorporation; and (d) such other related matters as Universal deems
appropriate.
2. In their discretion, the attorneys-in-fact shall have the unconditional
and irrevocable right to vote upon such other matters which may properly come
before the Meeting or any postponement or adjournments thereof. If after the
date hereof, any of the Shareholders acquires beneficial ownership of any shares
entitled to vote at the Meeting ("Additional Shares"), including, without
limitation, upon exercise of any option, warrant or right to acquire such shares
or through any stock dividend or stock split, this Agreement and Irrevocable
Proxy shall be applicable to all such Additional Shares as if such Additional
Shares had been held by the undersigned Shareholder as of the date hereof. The
provisions of the immediately preceding sentence shall be effective with respect
to Additional Shares without action by any person or entity immediately upon the
acquisition by the undersigned Shareholder of beneficial ownership of such
Additional Shares.
3. Each undersigned Shareholder hereby acknowledges and agrees that the
proxy conveyed hereby is issued pursuant to this Agreement and Irrevocable Proxy
and is therefore irrevocable under the New York Business Corporation Law. Such
proxy shall be effective from the date hereof until the earlier of (i) the
approval of all matters described above at the Meeting and (ii) the termination
of the Share Purchase Agreement in accordance with its terms.
4. The proxy conveyed hereby shall be irrevocable and shall not be
terminated by the incompetence or death of the undersigned Shareholder, by the
liquidation or dissolution of any non-natural person, by the bankruptcy of the
undersigned Shareholder or by the transfer by the undersigned Shareholder of
shares of stock or Additional Shares to another person or entity.
5. This Agreement and Irrevocable Proxy may be executed in counterparts
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same instrument.
This Agreement and Irrevocable Proxy shall be governed by the laws of the
State of New York.
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IN WITNESS WHEREOF, the undersigned Shareholder has executed this Agreement
and Irrevocable Proxy as of December 31, 1998.
WAND/UNIVERSAL INVESTMENTS L.P. I
By: Wand (Universal) Inc., its General Partner
By: /s/ XXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
WAND/UNIVERSAL INVESTMENTS X.X. XX
By: Wand (Universal) Inc., its General Partner
By: /s/ XXXXX X. XXXXXXX
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
AAM CAPITAL FINANCIAL PARTNERS, L.P.
By: AAM Partners, L.P., general partner
By: AAM Investment Banking Group, Ltd.,
general partner
By: /s/ XXXXXXX X. XXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
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UAFC, L.P.
By: VWA, L.L.C., general partner
By: Veed Corp., managing member
By: /s/ XXXXXXX X. XXXX
------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
/s/ XXXXXXX X. XXXXXXX
------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ XXXXX X. XXXXXXX
------------------------------------------
Xxxxx X. Xxxxxxx
/s/ XXXXXX XXXXXXX
------------------------------------------
Xxxxxx Xxxxxxx
/s/ XXXXXXX XXXXXXX
------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ XXXXXXX XXXXXXX
------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx
/s/ XXXX X. XXXXXX
------------------------------------------
Xxxx X. Xxxxxx
/s/ XXXXXX X. XXXXXXXXX
------------------------------------------
Xxxxxx X. Xxxxxxxxx
0
/s/ XXXXXXX X. XXXXXX, XX.
------------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
/s/ XXXXX XXXXXX
------------------------------------------
Xxxxx Xxxxxx
/s/ XXXXXXX XXXXXXX
------------------------------------------
Xxxxxxx Xxxxxxx
/s/ XXXXX XXXXXXX
------------------------------------------
Xxxxx Xxxxxxx
/s/
------------------------------------------
Xxxxx Xxxxxx
Xxxxxxx Associates Limited Partnership
By: NMRB Corp.
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:
Xxxxxx Xxxxxxx Trust #1 UTA Dated 11/2/94
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Trustee
Xxxxxxx X. Xxxxxxx C/F Xxxxxxxx X. Xxxxxxx
UGMA NY
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
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Xxxxxxx X. Xxxxxxx C/F Xxxxx X. Xxxxxxx
UGMA NY
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
Bear Xxxxxxx Master Defined Benefit Money
Purchase Plan, Bear Xxxxxxx Cust. for Xxxxxxx
Xxxxxxx # 054-01191-1-2-092
By: /s/ XXXXXXX XXXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:
Xxxxxx Xxxxxx Xxxxxxx c/o Xxxxxxx Xxxxxxx Cust.
By: /s/ XXXXXXX XXXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:
Xxxxxxx Xxxxxxx & Xxxxxxx Xxxxxxx JT Ten.
By: /s/ XXXXXXX XXXXXXX
-------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title:
Xxxxxx X. Xxxxxx Associates Inc.
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
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Universal Holding Corp. 401(k) Savings Plan
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Trustee
By: /s/ XXXXXXX XXXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Trustee
NMRB Corp.
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Weiner Family LTD Partnership
By: /s/ XXXXXXX XXXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: General Partner
Xxxxxxx Trust f.b.o. Harnett Family
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Trustee
Xxxx Acquisition LLC
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Member
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Xxxxx X. Xxxxxx Third Amended and
Restated Revocable Trust, dated March 20, 1987
By:
------------------------------------------
Name:
Title: Trustee
