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EXHIBIT 10.3
AGREEMENT
AGREEMENT (this "Agreement"), dated as of December 31, 1998, by and
between GE Financial Assurance Holdings, Inc., a Delaware corporation ("GEFA"),
and PennCorp Financial Group, Inc., a Delaware corporation ("PennCorp").
RECITALS:
WHEREAS, GEFA has entered into a Stock Purchase Agreement (the "PIC
Agreement"), dated as of December 31, 1998, with Pacific Life and Accident
Insurance Company, a Texas corporation ("PLAC"), whereby GEFA has agreed,
subject to the terms and conditions of the PIC Agreement, to purchase all of the
outstanding shares (the "Shares") of Professional Insurance Corporation, a Texas
corporation and a subsidiary of PLAC; and
WHEREAS, PLAC is a wholly owned subsidiary of PennCorp.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF PENNCORP
PennCorp hereby represents and warrants to GEFA as set forth below.
Section 1.01. Organization and Qualification. PennCorp is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with all requisite corporate power and
authority to own its properties and assets.
Section 1.02. Authorization. PennCorp has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement has been duly authorized by the Board of Directors of PennCorp
and no other corporate proceeding on the part of PennCorp is necessary to
authorize the execution and delivery of this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by PennCorp and constitutes a valid and binding
obligation of PennCorp, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principals of
equity, including principles of
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commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
Section 1.03. No Violation. Neither the execution and delivery of this
Agreement by PennCorp and the performance by PennCorp of its obligations
hereunder nor the consummation by PennCorp of the transactions contemplated
hereby will (a) violate, conflict with or result in any breach of any provisions
of the Certificate of Incorporation or Bylaws of PennCorp, (b) violate or
conflict with or result in a violation or breach of, or constitute a default
(with or without due notice or lapse of time of both) under the terms,
conditions or provisions of any note, bond, mortgage, indenture or deed of
trust, or any license, lease or agreement to which PennCorp or any of its
subsidiaries is a party or by which any of their assets is bound or (c) violate
any order, writ, judgment, injunction, decree, statute, rule or regulation of
any governmental authority applicable to PennCorp or any of its subsidiaries or
any of their assets, except in each case as would not have a material adverse
effect on PennCorp's ability to consummate the transactions contemplated by this
Agreement.
Section 1.04. Consents and Approvals. No filing or registration with, no
notice to and no permit, authorization consent or approval of any third party or
any governmental authority is necessary for the consummation by PennCorp of the
transactions contemplated by this Agreement.
Section 1.05. Financial Condition. The sale of the Shares pursuant to the
PIC Agreement is not being made with the actual intent to hinder, delay or
defraud any entity to which PennCorp or PLAC is indebted as of the date hereof
or any entity to which PennCorp may become indebted subsequent to the date
hereof. PLAC has valid business reasons for selling the Shares and has concluded
that the Purchase Price payable pursuant to the PIC Agreement represents
reasonably equivalent value for the Shares. PennCorp has concluded that the
Purchase Price for the Shares constitutes reasonably equivalent value for its
obligations hereunder. Neither PennCorp nor PLAC is engaged in business or a
transaction, or is about to engage in business or a transaction, for which any
property remaining with PennCorp or PLAC is or will be an unreasonably small
capital, and neither PennCorp nor PLAC intends to incur, or believes that it has
incurred, debts beyond its ability to pay as they mature or as PennCorp and PLAC
expect to otherwise become due and payable. The Board of Directors of PennCorp
has not authorized, and has no present intent to authorize, any bankruptcy,
reorganization, debt arrangement or other proceeding under any bankruptcy or
insolvency law, nor has the Board of Directors authorized the officers of
PennCorp to take any action with respect to any bankruptcy, reorganization, debt
arrangement or other proceeding under any bankruptcy or insolvency law.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF GEFA
GEFA hereby represents and warrants to PennCorp as follows:
Section 2.01. Organization; Qualifications and Operations. GEFA is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, with all requisite corporate power and
authority to own its properties and assets.
Section 2.02. Authorization. GEFA has full corporate power and authority
to execute and deliver this Agreement and each other document to be delivered by
GEFA in connection herewith and to consummate the transactions contemplated
hereby and thereby. No other corporate proceeding on the part of GEFA is
necessary to authorize the execution and delivery of this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by GEFA and constitutes a valid and binding
obligation of GEFA, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
Section 2.03. No Violation. Neither the execution and delivery of this
Agreement by GEFA, the performance by GEFA of its obligations hereunder nor the
consummation by GEFA of the transactions contemplated hereby will (a) violate,
conflict with or result in any breach of any provision of the Certificate or
Articles of Incorporation or Bylaws of GEFA (or similar organizational
documents), (b) violate or conflict with or result in a violation or breach of,
or constitute a default (with or without due notice or lapse of time or both)
under the terms, conditions or provisions of any note, bond, mortgage, indenture
or deed of trust, or any license, lease or agreement to which GEFA or any of
GEFA's subsidiaries is a party or by which any of their assets is bound or (c)
violate any order, writ, judgment, injunction, decree, statute, rule or
regulation of any governmental authority applicable to GEFA or any of GEFA's
subsidiaries or any of their assets, except in each case as would not have a
material adverse effect on GEFA's ability to consummate the transactions
contemplated by this Agreement.
Section 2.04. Consents and Approvals. No filing or registration with, no
notice to and no permit, authorization, consent or approval of any third party
or any governmental authority is necessary for the consummation by GEFA of the
transactions contemplated by this Agreement.
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ARTICLE III
JOINDER
Section 3.01. Joinder. PennCorp, by its execution of this Agreement,
hereby, jointly and severally with PLAC, represents and warrants to GEFA all of
the representations and warranties made by PLAC in Article III of the PIC
Agreement. PennCorp, by its execution of this Agreement, hereby agrees to cause
PLAC to perform, or to perform itself, as appropriate, subject to the conditions
and other terms of the PIC Agreement, each and every obligation of PLAC under
the PIC Agreement. Without limiting the generality of the foregoing, Parent
agrees that it shall be jointly and severally liable to GEFA with respect to:
(i) PLAC's obligation to pay the Reduction Amount, if any, pursuant to Section
2.3 of the PIC Agreement, (ii) the indemnification obligations of PLAC pursuant
to Sections 6.15 and 6.16 and Article IX of the PIC Agreement, and (iii) the
obligations of PLAC for certain fees and expenses pursuant to Section 10.3 of
the PIC Agreement; and Parent further agrees to, jointly and severally,
indemnify, defend and hold harmless GEFA from and against any and all
Indemnifiable Losses (as defined in the PIC Agreement), which indemnification
shall be subject to and governed by the provisions set forth in Article IX of
the PIC Agreement.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01. Amendment and Modification. This Agreement may only be
amended, modified or supplemented by a written instrument signed by all the
parties hereto.
Section 4.02. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
Section 4.03. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 4.04. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the conflicts-of-laws rules thereof.
Section 4.05. Counterparts. This 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 agreement.
Section 4.06. Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretation of this Agreement.
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Section 4.07. Entire Agreement. This Agreement, the PIC Agreement and the
Disclosure Schedule and the Annexes thereto, the Confidentiality Agreement
between Penncorp and GEFA, and the Letter Agreements dated of even date herewith
between GEFA and PLAC, and between GEFA and PennCorp, embody the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein or therein. There are no agreements, representations,
warranties or covenants other than those expressly set forth herein or therein.
This Agreement, the PIC Agreement and the Disclosure Schedule and the Annexes
thereto, and the Letter Agreements referenced above supersede all prior
agreements and understandings between the parties (other than the
Confidentiality Agreement referenced above) with respect to such subject matter.
Section 4.08. Assignment. This Agreement shall not be assigned by
operation of law or otherwise; provided, however, that PennCorp may assign this
Agreement to any person that acquires all or substantially all of the assets or
voting stock of PennCorp.
Section 4.09. Termination. This Agreement shall terminate automatically,
without further action by the parties hereto, upon the termination of the PIC
Agreement; provided, however, that PennCorp's obligations pursuant to clause
(iii) of Section 3.01 shall survive such termination in the event the fee set
forth in Section 10.3(b) of the PIC Agreement is payable as a result of such
termination, until such time as such fee has been paid.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be signed on its behalf by its duly authorized officers, all as of the day
and year first above written.
GE FINANCIAL ASSURANCE HOLDINGS, INC.
By: /s/ XXXX XXXXX
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Name: Xxxx Xxxxx
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Title:
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PENNCORP FINANCIAL GROUP, INC.
By: /s/ XXXXX X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx
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Title: Executive Vice President
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