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EXHIBIT 10.4
AMENDMENT NO. 10
Dated as of June 30, 1999
to
CREDIT AGREEMENT
Dated as of March 12, 1997
PENNCORP FINANCIAL GROUP, INC., a Delaware corporation (the
"Company"), the lenders signatory to the Credit Agreement referred to below (the
"Banks"), the Managing Agents and the Co-Agents named therein (the "Agents") and
THE BANK OF NEW YORK, as administrative agent for the Banks (the "Administrative
Agent"):
1. Credit Agreement. (a) Reference is hereby made to the Credit
Agreement, dated as of March 12, 1997, among the Company, the Banks, the Agents
and the Administrative Agent (as amended, modified or waived prior to the date
hereof, the "Credit Agreement"). Terms used in this Amendment (this "Amendment")
that are defined in the Credit Agreement and are not otherwise defined herein
are used herein with the meanings therein ascribed to them as amended by this
Amendment. The Credit Agreement as modified by this Amendment is and shall
continue to be in full force and effect and is hereby in all respects confirmed,
approved and ratified.
2. Amendments. Upon and after the Amendment No. 10 Effective Date
(as defined below), the Credit Agreement shall be amended as follows:
(a) Section 1.01 of the Credit Agreement is hereby amended to
(i) include the following new definitions in alphabetical
order:
"Amendment No. 10" shall mean that certain Amendment No. 10 dated
as of June 30, 1999, to the Credit Agreement.
"Amendment No. 10 Effective Date" shall have the meaning ascribed
to that term in Amendment No. 10.
"First PennUnion Amendment" shall mean the Amendment dated June __,
1999, to the Original PennUnion Purchase Contract, in the form
attached as Exhibit A to Amendment No. 10, as such Amendment may be
amended or modified from time to time after the Amendment No. 10
Effective Date, provided that any such amendment or modification
was, in the sound business judgment of the Company and its Board of
Directors, in the best
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interests of the Company, and provided further that any such
amendment or modification that reduced the gross cash consideration
of $137,000,000 to be received by the Company was consented to in
writing by the Majority Banks; and provided further that the
Company shall deliver, within two Business Days of the Closing, as
that term is defined in the Original PennUnion Purchase Contract,
documentation, in form and substance satisfactory to Ernst & Young
LLP, evidencing and accounting for all of the deductions to the
aggregate gross cash consideration of $137,000,000.
"Original PennUnion Purchase Contract" shall mean the "PennUnion
Purchase Contract", as that term is defined in the PennUnion
Consent, as amended by the First PennUnion Amendment.
(ii) to amend the following existing definitions to read
as follows:
"Net Worth" shall mean, for the Company and its Consolidated
Subsidiaries, on any date, the sum (determined on a
consolidated basis without duplication in accordance with
GAAP) of the following:
(a) total shareholders' equity, plus
(b) to the extent not included in total shareholders'
equity, Preferred Stock other than Mandatorily Redeemable
Stock,
provided that, for purposes of calculating "Net Worth", there
shall be excluded from total shareholders' equity unrealized
gains and losses on securities available for sale as reflected
on such consolidated balance sheet and provided further that
up to $23,000,000 in additional non-cash charges for asset
impairment provisions and/or special insurance reserving
provisions actually incurred will be excluded from the
calculation of Net Worth."
(b) Section 3.03(c)(ii)(2) shall be amended to replace
"$70,000,000" with "the greater of $78,000,000 or actual net cash proceeds less
$5,000,000 (such amount to be rounded to the nearest $1,000,000). Calculation of
the actual net cash proceeds shall be subject to review by Ernst & Young LLP."
(c) Section 8.01(o)(i) of the Credit Agreement shall be
amended by adding at the end after the comma "including, but not limited to (x)
the First PennUnion Amendment as executed and delivered by the Company, (y)
copies of any written communications between the SEC or any Applicable
Regulatory Insurance Authority and the Company and/or the purchaser, to the
extent such communications have been delivered to or are in the possession of
the Company, concerning the PennUnion Sale."
(d) Section 8.01(q) of the Credit Agreement shall be
amended by adding at the end thereof "provided further that the Company shall
provide, within ten Business Days of the end of each month, monthly updates of
the Company's monthly cash flow projections reconciling actual
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expenses to budget, in format and detail comparable to what the Company has
previously furnished to the Banks."
(e) Section 8.10 of the Credit Agreement shall be amended
and restated as follows:
"8.10 Leverage Ratio. The Company will not permit the Leverage
Ratio to exceed (i) 52% at any time during the quarterly
period ending June 30, 1999; (ii) 46% during the quarterly
period ending September 30, 1999, (iii) 47% during the
quarterly period ending December 31, 1999, and (iv) 48% at any
time thereafter."
(f) Section 8.13 of the Credit Agreement shall be amended
and restated as follows:
"8.13 Net Worth. The Company will not permit the Net Worth at
any time to be less than (i) $345,000,000 during the quarterly
period ending June 30, 1999, (ii) $337,000,000 during the
quarterly period ending September 30, 1999, (iii) $327,000,000
during the quarterly period ending December 31, 1999, and (iv)
$318,000,000 during the quarterly period ending March 31,
2000, and during each quarterly period thereafter."
(k) Section 9(x) of the Credit Agreement shall be amended
and restated in its entirety as follows:
Unless the Termination Date of the Amended Original PennUnion
Purchase Contract shall have occurred prior to August 1, 1999,
the Closing (as that term is defined in the Original PennUnion
Purchase Contract on the Amendment No. 10 Effective Date) of
the First PennUnion Sale shall not have occurred on or before
July 31, 1999, or, if such Termination Date shall have
occurred prior to August 1, 1999, Closings (as defined in
those Contracts) under one or more Other Designated Asset
Purchase Contracts shall not have occurred on or before
December 31, 1999, as a result of which the Company shall not
have received, on or before December 31, 1999, net cash
proceeds in an amount not less than $78,000,000 (or such
greater or lesser amount as the Majority Banks may have
specified in connection with their approval of any such Other
Designated Asset Purchase Contract) and the Company shall not
have used such proceeds to repay Loans, on or before December
31, 1999, in a principal amount equal to $78,000,000 or such
greater or lesser amount (or on such later date or in such
lesser amount as may be approved by the Majority Banks); or
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3. Representations and Warranties. In order to induce the Banks to
agree to amend the Credit Agreement, the Company hereby represents and warrants
as follows:
(a) The Company has the power, and has taken all necessary
action (including, if a corporation, any necessary stockholder action) to
authorize it, to execute, deliver and perform in accordance with their
respective terms this Amendment and the Credit Agreement as amended by this
Amendment. This Amendment has been duly executed and delivered by the Company
and is a legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally. The
execution, delivery and performance in accordance with their respective terms by
the Company of this Amendment and the Credit Agreement as amended by this
Amendment do not and (absent any change in any Applicable Law or applicable
Contract) will not (i) require any Governmental Approval or any other consent or
approval, including any consent or approval of the stockholders of the Company,
other than Governmental Approvals and other consents and approvals that have
been obtained, are final and not subject to review on appeal or to collateral
attack, are in full force and effect and, in the case of any such approvals or
consents required under any Applicable Law or Contract as in effect on the
Amendment No. 10 Effective Date, are listed on Schedule 3(a), or (ii) violate,
conflict with, result in a breach of, constitute a default under, or result in
or require the creation of any Lien (other than the Security Interest) upon any
assets of any such Person under, (A) any Contract to which any such Person is a
party or by which any such Person or any of its properties may be bound or (B)
any Applicable Law.
(b) The copy of the First PennUnion Amendment attached as
Schedule A hereto is (i) in substantially the form approved by the Company's
Board of Directors at the meeting of the Board of Directors of the Company held
on June 13, 1999, and (ii) in the form to be executed by the parties, and the
PennUnion Purchase Contract in the form attached has not been amended or
modified subsequent to its having been furnished to the Administrative Agent and
prior to the Amendment No. 10 Effective Date, except by amendments and
modifications of which the Banks have been furnished copies.
(c) Each of the foregoing representations and warranties shall
constitute representations and warranties subject to Section 9(d) of the Credit
Agreement and shall be made at and as of the Amendment No. 10 Effective Date.
4. Conditions to Effectiveness; Amendment No. 10 Effective Date.
This Amendment shall be effective as of the date first written above, but shall
not become effective as of such date until the time (such time, the "Amendment
No. 10 Effective Date") as:
(a) this Amendment has been executed and delivered by the
Company, the Majority Banks and the Administrative Agent;
(b) all amounts payable pursuant to Section 11.03 of the Credit
Agreement for which invoices have been delivered to the Company on or prior to
such date, have been paid in full; and
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(c) the Closing, as that term is defined in the Original
PennUnion Purchase Contract, shall have occurred on or before July 31, 1999.
6. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the law of the State of New York.
7. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 10 to be duly executed as of the day and year first above written. Execution
and delivery by the Majority Banks of Amendment No. 10 shall constitute their
consent to the execution and delivery of the First PennUnion Amendment required
by the PennUnion Consent.
PENNCORP FINANCIAL GROUP, INC.
By: /s/ XXXXX X. XXXX
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Name: Xxxxx X. Xxxx
Title: President and CEO
THE BANK OF NEW YORK, as
Administrative Agent, Collateral
Agent and as a Bank
By: /s/ XXXXX X. XXXX
Name: Xxxxx X. Xxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as a
Managing Agent and as a Bank
By: /s/ XXXXXXXX XXXX
Name: Xxxxxxxx Xxxx
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as a Managing Agent and as a Bank
By:
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Name:
Title:
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NATIONSBANK, N.A., as a Managing
Agent and as a Bank
By: /s/ XXXXXXX X. XXXXXXXXXXX, XX
Name: Xxxxxxx X. Xxxxxxxxxxx, XX
Title: Managing Director
FLEET NATIONAL BANK, as a Co-Agent
and as a Bank
By: /s/ XXXXXX X. XXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
MELLON BANK, N.A., as a Co-Agent
and as a Bank
By: /s/ XXXX XXXX
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Name: Xxxx Xxxx
Title: Vice President
BANK OF MONTREAL, as a Co-Agent
and as a Bank
By: /s/ XXXXXX X. XxXXXX
Name: Xxxxxx X. XxXxxx
Title: Director
CIBC INC., as a Co-Agent and as a
Bank
By: /s/ XXXXXX XXXXXXX
Name: Xxxxxx Xxxxxxx
Title: Executive Director
CIBC World Markets Corp.,
As Agent
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DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES, as a
Co-Agent and as a Bank
By: /s/ XXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: Vice President
By: /s/ XXXXXX X. XXXXXXXX, XX
Name: Xxxxxx X. Xxxxxxxx, XX
Title: Assistant Vice President
SUNTRUST BANK, CENTRAL FLORIDA
NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Vice President
BANK ONE, TEXAS N.A.
By:
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Name:
Title:
FIRST UNION NATIONAL BANK
By: /s/ XXXXXX X. XXXXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Senior Vice President
BEAR XXXXXXX & CO., INC.
By: /s/ XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: Senior Managing Director
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XX XXXXX SECURITIES CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Director
ING (U.S.) CAPITAL CORPORATION
By: /s/ XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Title: Senior Associate
