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EXHIBIT 10.6
AMENDED AND RESTATED
ESCROW AGREEMENT
THIS AMENDED AND RESTATED ESCROW AGREEMENT (this "Agreement") is made
and entered into this 21st day of March, 2000, by and among Inverness/Phoenix
Capital, LLC, a Delaware limited liability company ("Inverness"), Vicuna
Advisors, L.L.C., a Delaware limited liability company, in its capacity as
investment manager to certain Delaware entities ("Vicuna"), Xxxxxxx Xxxxxxxx
("Xxxxxxxx"), Xxxx Xxxxxx ("Xxxxxx" and together with Inverness, Vicuna and
Xxxxxxxx, the "Offerors"), PennCorp Financial Group, Inc., a Delaware
corporation (the "Company") and Citibank N.A., a national banking association
duly organized and validly existing under the laws of the United States of
America (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Offerors and the Escrow Agent executed an Escrow Agreement
dated as of March 15, 2000 by and among the Offerors, the Escrow Agent and the
Company (the "Escrow Agreement").
WHEREAS, the Offerors have executed and delivered to the Company a
letter agreement dated as of March 15, 2000, as amended and supplemented (the
"Offer Letter") pursuant to which the Offerors have made an offer to
recapitalize the Company (the "Recapitalization").
WHEREAS, the Offer Letter contemplates the execution and delivery of
the Escrow Agreement and the deposit by Inverness with the Escrow Agent of cash
funds of $5,000,000.
WHEREAS, the Offer Letter contemplates that, upon selection of the
Recapitalization by the Company as the Final Accepted Offer (as defined in the
Offer Letter), the Offerors will deposit with the Escrow Agent an additional
$42,500,000 of cash funds.
WHEREAS, in furtherance of the Recapitalization, Inverness and Vicuna
have executed and delivered to the Company that certain standby underwriting
commitment, dated as of March 15, 2000 (the "Standby Commitment"), Xxxxxxxx has
executed and delivered to the Company that certain equity purchase commitment,
dated as of March 15, 2000 (the "Xxxxxxxx Commitment") and Xxxxxx has executed
and delivered to the Company that certain equity purchase commitment, dated as
of March 15, 2000 (the "Xxxxxx Commitment").
WHEREAS, in furtherance of the Recapitalization, the Offerors and the
Escrow Agent desire to restate and amend the Escrow Agreement and supersede it
by means of this Agreement.
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed as follows:
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1. Appointment of Escrow Agent. The Offerors and the Company each
hereby appoint Citibank, N.A. as Escrow Agent to receive, hold, administer and
deliver the Escrow Fund (as hereinafter defined) in accordance with this
Agreement, and the Escrow Agent hereby accepts such appointment, all subject to
and upon the terms and conditions set forth herein.
2. Establishment of Escrow Fund. Inverness herewith deposits with the
Escrow Agent, and the Escrow Agent hereby acknowledges receipt from Inverness
of, $5,000,000 (the "Initial Deposit"). Upon the Company's selection of the
Recapitalization as the Final Accepted Offer, the Offerors shall deposit with
the Escrow Agent, and the Escrow Agent shall acknowledge receipt from the
Offerors of, $42,500,000 (the "Final Deposit" and together with the Initial
Deposit, the "Deposit"), of which (i) $16,000,000 shall be deposited by
Inverness (the "Inverness Final Deposit" and together with the Initial Deposit,
the "Inverness Deposit"), (ii) $3,500,000 shall be deposited by Vicuna (the
"Vicuna Deposit"), (iii) $20,000,000 shall be deposited by Xxxxxxxx (the
"Xxxxxxxx Deposit") and (iv) $3,000,000 shall be deposited by Xxxxxx (or his
affiliates) (the "Xxxxxx Deposit"). All cash, earnings, interest and income from
the Deposit which may from time to time be held by the Escrow Agent pursuant to
the terms hereof are hereinafter referred to as the "Escrow Earnings." The
Deposit and the Escrow Earnings (collectively sometimes referred to herein as
the "Escrow Fund") shall be held by the Escrow Agent in accordance with the
terms and conditions hereinafter set forth. It is the parties' intention that
the Escrow Agent shall dispose of the Escrow Fund in accordance with the express
provisions of this Agreement, and shall not make, be required to make or be
liable in any manner for its failure to make, any determination under the Offer
Letter, or any other agreement, including, without limitation, any determination
of whether either the Offerors or the Company has complied with the terms of the
Offer Letter or are entitled to delivery of payment of any or all of the Escrow
Fund or to any other right or remedy thereunder. The obligations of each Offeror
under this Section 2 are several and not joint.
3. Investment of Escrow Fund by Escrow Agent. The Escrow Agent shall
invest and reinvest the funds held in the Escrow Fund as the Offerors shall
direct (subject to applicable minimum investments) by the furnishing of a
written direction by all of the Offerors (a "Written Direction"); provided,
however, that no investment or reinvestment may be made except in the following:
(a) direct obligations of the United States of America or
obligations the principal of and the interest on which are
unconditionally guaranteed by the United States of America;
(b) certificates of deposit issued by any bank, bank and trust
company, or national banking association (including Escrow Agent and
its affiliates), which certificates of deposit are insured by the
Federal Deposit Insurance Corporation or a similar governmental agency;
(c) repurchase agreements with any bank, trust company, or
national banking association (including Escrow Agent and its
affiliates); or
(d) any money market fund substantially all of which is
invested in the foregoing investment categories, including any money
market fund managed by Escrow Agent and any of its affiliates.
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If Escrow Agent has not received a Written Direction at any time that
an investment decision must be made, Escrow Agent shall invest the Escrow Fund,
or such portion thereof as to which no Written Direction has been received, in
investments described in clause (d) above. Each of the foregoing investments
shall be made in the name of Escrow Agent on behalf of the Offerors. No
investment shall be made in any instrument or security that has a maturity of
greater than 30 days. Notwithstanding anything to the contrary contained herein,
Escrow Agent may (but shall have no obligation), without notice to the Offerors
or the Company, sell or liquidate any of the foregoing investments at any time
if the proceeds thereof are required for any release of funds permitted or
required hereunder, and Escrow Agent shall not be liable or responsible for any
loss, cost or penalty resulting from any such sale or liquidation. With respect
to any funds received by Escrow Agent for deposit into the Escrow Funds or any
Written Direction received by Escrow Agent with respect to investment of any
funds in the Escrow Funds after ten o'clock, a.m., New York, New York time, the
Escrow Agent shall not be required to invest such funds or to effect such
investment instruction until the next day upon which banks in New York, New York
are open for business.
The parties to this Agreement acknowledge that non-deposit investment
products are not obligations of, or guaranteed, by the Escrow Agent nor any of
its affiliates, are not FDIC insured, and are subject to investment risks,
including the possible loss of principal amount invested. Only deposits in the
United States are subject to FDIC insurance.
4. Release of Escrow Fund. The Escrow Agent shall hold the Escrow
Fund until it delivers the Escrow Fund as provided in this Section 4, as
follows:
(a) If the Escrow Agent receives written instructions in the
form of Exhibit A signed by each Offeror and the Company, stating that the
consummation of the Recapitalization shall occur, the Escrow Agent shall
promptly deliver the Escrow Fund in accordance with said instructions.
(b) If the Escrow Agent receives written instructions signed
by each Offeror and the Company stating that the consummation of the
Recapitalization did not occur and directing payment of the Escrow Fund to
either the Offerors or the Company, the Escrow Agent shall promptly deliver the
Escrow Fund in accordance with such instructions.
(c) Except as set forth in (a) or (b) above, the Escrow Agent
shall distribute the Escrow Fund upon notice from either the Offerors or the
Company only in accordance with the procedures set forth in this subsection.
(i) Upon written notice from the Offerors, with
evidence of service on the Company, that the Company has not selected the
Recapitalization as the Final Accepted Offer and evidence of such non-acceptance
(including, without limitation, an order of the Bankruptcy Court) ("Rejection
Notice"), Escrow Agent shall, fifteen (15) calendar days after receipt of such
notice, deliver the Escrow Fund to the Offerors.
(ii) Upon written notice from the Company to
Escrow Agent, with evidence of service on the Offerors, that the
Recapitalization has been terminated due to Inverness'
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or Vicuna's material breach of the Standby Commitment, Xxxxxxxx'x material
breach of the Xxxxxxxx Commitment or Xxxxxx'x material breach of the Xxxxxx
Commitment or the breach by any Offeror of the commitment letter related to the
New Senior Facility (as defined in the Offer Letter), the offer letter related
to Reinsurance Transaction (as defined in the Offer Letter), the Offer Letter or
any other material agreement entered into by such Offeror in connection with the
Recapitalization (the "Company's Notice"), Escrow Agent shall deliver the Escrow
Fund to the Company five (5) calendar days after receipt of the Company's Notice
unless any Offeror shall, prior to the expiration of the aforesaid 5-day period,
give written notice to Escrow Agent and the Company of its countervailing claim
to the Escrow Fund ("Offerors' Rebuttal Notice"). For purposes of clarification,
a breach by the Company through no fault of the Offerors, the senior lenders
under the New Senior Facility or the reinsurer under the Reinsurance Transaction
of any of the agreements described above shall not constitute grounds for
delivery of the Company's Notice. Any distribution of the Escrow Fund pursuant
to this clause (ii) shall be deemed liquidated damages.
(iii) Upon written notice from the Offerors to Escrow
Agent, with evidence of service on the Company that the Recapitalization has
been terminated for a reason other than Inverness' or Vicuna's material breach
of the Standby Commitment, Xxxxxxxx'x material breach of the Xxxxxxxx Commitment
or Xxxxxx'x material breach of the Xxxxxx Commitment or the breach by any
Offeror of the commitment letter related to the New Senior Facility (as defined
in the Offer Letter), the offer letter related to Reinsurance Transaction (as
defined in the Offer Letter), the Offer Letter or any other material agreement
entered into by such Offeror in connection with the Recapitalization (the
"Offerors' Notice"), Escrow Agent shall deliver the Escrow Fund to the Offerors
fifteen (15) calendar days after receipt of Offerors' Notice unless the Company
shall, prior to the expiration of the aforesaid 15-day period, give notice to
Escrow Agent and the Offerors of its countervailing claim to the Escrow Fund
(the "Company's Rebuttal Notice").
(iv) After timely receipt by Escrow Agent of the
Company's Rebuttal Notice or the Offerors' Rebuttal Notice, Escrow Agent shall
not deliver the Escrow Fund until such time as Escrow Agent receives (a) a
written agreement signed by the Offerors and the Company providing instructions
as to the disposition of the Escrow Fund or (b) a certified copy of an order or
judgment which has become final (meaning that the order or judgment is no longer
subject to appeal or review by a court of competent jurisdiction) of the United
States District Court (the "Bankruptcy Court") having jurisdiction over the
Bankruptcy (as defined in the Offer Letter) with respect to the disposition of
the Offerors' or the Company's claim. Escrow Agent shall deliver the Escrow Fund
in accordance with said agreement, order or judgment.
(v) Notwithstanding the foregoing, after receipt by
Escrow Agent of the Company's Rebuttal Notice or the Offerors' Rebuttal Notice,
Escrow Agent may (a) deposit the Escrow Fund with a new Escrow Agent agreed to
in writing by the Company and the Offerors or the Bankruptcy Court or (b)
commence an action in interpleader in the Bankruptcy Court and deposit the
Escrow Fund with such court at the expense of the Company if the
Recapitalization is consummated or at the expense of the Offerors if the
Recapitalization in not consummated.
(d) All deliveries of funds by the Escrow Agent to the Company
or the Offerors as provided for herein shall be by wire transfer in immediately
available funds. In the event funds
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transfer instructions are given (other than in writing at the time of execution
of this Agreement), whether in writing, by telecopier or otherwise, the Escrow
Agent is authorized to seek confirmation of such instructions by telephone call
back to the person or persons designated in Exhibit B attached hereto, and the
Escrow Agent may rely upon the confirmations of anyone purporting to be the
person or persons so designated in Exhibit C attached hereto. To assure accuracy
of the instructions the Escrow Agent receives, the Escrow Agent may record such
call backs. If the Escrow Agent is unable to verify the instructions, or is not
satisfied with the verification it receives, it will not execute the instruction
until all issues have been resolved. The persons and telephone numbers for call
backs may be changed only in writing actually received and acknowledged by the
Escrow Agent. The parties agree to notify the Escrow Agent of any errors, delays
or other problems within thirty (30) days after receiving notification that a
transaction has been executed. If it is determined that the transaction was
delayed or erroneously executed as a result of the Escrow Agent's error, the
Escrow Agent's sole obligation is to pay or refund such amounts as may be
required by applicable law. In no event shall the Escrow Agent be responsible
for any incidental or consequential damages or expenses in connection with the
instruction. Any claim for interest payable will be at the Escrow Agent's
published savings account rate in effect in New York, New York.
(e) Notwithstanding anything to the contrary in this
Agreement:
(1) The Escrow Agent may deposit the Escrow Fund
with the clerk of the Bankruptcy Court upon commencement of an action in the
nature of interpleader or in the course of any court proceedings.
(2) If at any time the Escrow Agent receives a
final non-appealable order of the Bankruptcy Court, or written instructions
signed by both the Company and the Offerors, directing delivery or payment of
any part of the Escrow Fund, the Escrow Agent shall comply with such order or
instruction.
(3) Upon any delivery or deposit of the Escrow
Fund as provided in this Section 4(e), the Escrow Agent shall thereupon be
released and discharged from any and all further obligations arising in
connection with this Agreement.
5. Escrow Agent.
(a) The Escrow Agent shall be entitled to reimbursement for
all reasonable fees, expenses, disbursements and advances incurred or made by it
in performance of its duties hereunder (including reasonable fees, expenses and
disbursements of its counsel). Such reimbursement for fees, expenses,
disbursements and advances shall be paid by the Company if the Recapitalization
is consummated or by the Offerors if the Recapitalization is not consummated;
provided that each of the Company and the Offerors remain jointly and severally
liable for such amount. The Escrow Agent fee shall be of $12,000 (the "Escrow
Agent Fee") which shall be paid by the Offerors upon execution of this
Agreement; provided that if the Recapitalization is consummated, then in such
event the Offerors shall have the right to collect such Escrow Agent Fee from
the Company.
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(b) The Escrow Agent shall have no liability or obligation
with respect to the Escrow Fund except for Escrow Agent's willful misconduct,
bad faith or gross negligence. Escrow Agent's sole responsibility shall be for
the safekeeping, investment, and disbursement of the Escrow Fund in accordance
with the terms of this Agreement. Escrow Agent shall have no implied duties or
obligations and shall not be charged with knowledge or notice of any fact or
circumstance not specifically set forth herein. Escrow Agent may conclusively
rely upon any instrument (whether in its original or facsimile form), and shall
have no liability for acting in accordance with such instrument, not only as to
its due execution, validity and effectiveness, but also as to the truth and
accuracy of any information contained therein, which Escrow Agent shall in good
faith believe to be genuine, to have been signed or presented by the person or
parties purporting to sign the same and to conform to the provisions of this
Agreement. In no event shall Escrow Agent be liable for incidental, indirect,
special, consequential or punitive damages. Escrow Agent shall not be obligated
to take any legal action or commence any proceeding in connection with the
Escrow Fund, any account in which the Escrow Fund is deposited, this Agreement
or the Offer Letter, or to appear in, prosecute or defend any such legal action
or proceeding. Escrow Agent may consult legal counsel selected by it in the
event of any dispute or question as to the construction of any of the provisions
hereof or of any other agreement or of its duties hereunder, or relating to any
dispute involving any party hereto, and shall incur no liability and shall be
fully indemnified from any liability whatsoever in acting in accordance with the
opinion, advice or instruction of such counsel. The Company and each Offeror,
jointly and severally, shall promptly pay, upon demand, the reasonable fees and
expenses of any such counsel; provided, however, that in the event that the
Company pays any amount of such fees and expenses and the Recapitalization is
not consummated, then in such event the Company shall have the right to collect
such payment from the Offerors; and provided further, that in the event that the
Offerors pay any amount of such fees and expenses and the Recapitalization is
consummated, then in such event the Offerors shall have the right to collect
such payment from the Company.
(c) The Escrow Agent is authorized, in its sole discretion, to
comply with orders issued or process entered by the Bankruptcy Court with
respect to the Escrow Fund, without determination by the Escrow Agent of such
court's jurisdiction in the matter. If any portion of the Escrow Fund is at any
time attached, garnished or levied upon under order of the Bankruptcy Court, or
in case the payment, assignment, transfer, conveyance or delivery of any such
property shall be stayed or enjoined by any court order of the Bankruptcy Court,
or in case any order, judgment or decree of the Bankruptcy Court shall be made
or entered by any court affecting such property or any part thereof, then and in
any such event, the Escrow Agent is authorized, in its sole discretion, to rely
upon and comply with any such order, writ, judgment or decree which it is
advised by legal counsel selected by it is binding upon it without the need for
appeal or other action; and if the Escrow Agent complies with any such order,
writ, judgment or decree, it shall not be liable to any of the parties hereto or
to any other person or entity by reason of such compliance even though such
order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
(d) From and at all times after the date of this Agreement,
the Company and the Offerors, jointly and severally, shall, to the fullest
extent permitted by law and to the extent provided herein, fully indemnify and
hold harmless Escrow Agent, its affiliates and their respective directors,
officers, employees and agents (collectively, the "Indemnified Parties") against
any and all actions,
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claims (whether or not valid), losses, damages, liabilities, costs and expenses
of any kind or nature whatsoever (including without limitation reasonable
attorneys' fees, costs and expenses) incurred by or asserted against any of the
Indemnified Parties from and after the date hereof, whether direct, indirect or
consequential, as a result of or arising from or in any way relating to any
claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, whether threatened or initiated, asserting a claim
for any legal or equitable remedy against any person under any statute or
regulation, including, but not limited to, any federal or state securities laws,
or under any common law or equitable cause or otherwise, arising from or in
connection with the negotiation, preparation, execution, performance or failure
of performance of this Agreement or any transactions contemplated herein,
whether or not any such Indemnified Party is a party to any such action,
proceeding, suit or the target of any such inquiry or investigation; provided,
however, that no Indemnified Party shall have the right to be indemnified
hereunder for any liability finally determined by the Bankruptcy Court, subject
to no further appeal, to have resulted solely from the gross negligence, bad
faith or willful misconduct of such Indemnified Party. If any such action or
claim shall be brought or asserted against any Indemnified Party, such
Indemnified Party shall promptly notify the Company and the Offerors in writing,
and the Company and the Offerors shall assume the defense thereof, including the
employment of counsel and the payment of all expenses. Such Indemnified Party
shall, in its sole discretion, have the right to employ separate counsel (who
may be selected by such Indemnified Party in its sole discretion) in any such
action and to participate in the defense thereof, and the fees and expenses of
such counsel shall be paid by such Indemnified Party, except that the Company
and/or the Offerors shall be required to pay such fees and expenses if (a) the
Company and/or the Offerors agree to pay such fees and expenses, (b) the Company
and/or the Offerors shall fail to assume the defense of such action or
proceeding or shall fail, in the reasonable discretion of such Indemnified
Party, to employ counsel satisfactory to the Indemnified Party in any such
action or proceeding, (c) the Company or the Offerors are the plaintiff in any
such action or proceeding or (d) the named or potential parties to any such
action or proceeding (including any potentially impleaded parties) include both
the Indemnified Party and the Company and/or the Offerors, and the Indemnified
Party shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company or the Offerors. The Company and the Offerors shall be
jointly and severally liable to pay fees and expenses of counsel pursuant to the
preceding sentence, except that any obligation to pay under clause (a) shall
apply only to the party so agreeing. All such fees and expenses payable by the
Company and/or the Offerors pursuant to the foregoing sentence shall be paid
from time to time as incurred, both in advance of and after the final
disposition of such action or claim. All of the foregoing losses, damages, costs
and expenses of the Indemnified Parties shall be payable by the Company and the
Offerors, jointly and severally, upon demand by such Indemnified Party;
provided, however, that in the event that the Company pays any amount of such
fees and expenses and the Recapitalization is not consummated, then in such
event the Company shall have the right to collect such payment from the
Offerors; and provided further, that in the event that the Offerors pay any
amount of such fees and expenses and the Recapitalization is consummated, then
in such event the Offerors shall have the right to collect such payment from the
Company. The obligations of the Company and the Offerors under this Section 5(d)
shall survive any termination of this Agreement and the resignation or removal
of Escrow Agent shall be independent of any obligation of the Escrow Agent.
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The parties agree that neither the payment by the Company or
the Offerors of any claim by Escrow Agent for indemnification hereunder nor the
disbursement of any amounts to Escrow Agent from the Escrow Funds in respect of
a claim by Escrow Agent for indemnification shall impair, limit, modify, or
affect, as between the Company and the Offerors, the respective rights and
obligations of the Company and the Offerors under the Offer Letter, the Standby
Commitment or the Xxxxxxxx Commitment.
(e) Escrow Agent shall not be subject to, nor required to comply with,
any other agreement between or among any or all of the Offerors and the Company
or to which the Offeror or the Company is a party, even though reference thereto
may be made herein, or to comply with any direction or instruction (other than
those contained herein or delivered in accordance with this Escrow Agreement)
from any Offeror or the Company or any entity acting on its behalf. Escrow Agent
shall not be required to, and shall not, expend or risk any of its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder.
If any fees, expenses or costs incurred by, or any obligations owed to,
Escrow Agent hereunder are not promptly paid when due, Escrow Agent may
reimburse itself therefor from the Escrow Fund and may sell, convey or otherwise
dispose of any assets of Escrow Fund for such purpose. As security for the due
and punctual performance of any and all of Offerors and the Company's
obligations to Escrow Agent hereunder, now or hereafter arising, Offerors and
the Company, individually and collectively, hereby pledge, assign and grant to
Escrow Agent a continuing security interest in, and a lien on, the Escrow Fund
and all distributions thereon or additions thereto. The security interest of
Escrow Agent shall at all times be valid, perfected and enforceable by Escrow
Agent against the Company and the Offerors and all third parties in accordance
with the terms of this Escrow Agreement.
Escrow Agent shall not incur any liability for not performing any act
or fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of Escrow Agent (including but not limited to any
act or provision of any present or future law or regulation or governmental
authority, any act of God or war, or the unavailability of the Federal Reserve
Bank wire or telex or other wire or communication facility).
Unless otherwise specifically set forth herein, Escrow Agent shall
proceed as soon as practicable to collect any checks or other collection items
at any time deposited hereunder. All such collections shall be subject to Escrow
Agent's usual collection practices or terms regarding items received by Escrow
Agent for deposit or collection. Escrow Agent shall not be required, or have any
duty, to notify anyone of any payment or maturity under the terms of any
instrument deposited hereunder, nor to take any legal action to enforce payment
of any check, note or security deposited hereunder or to exercise any right or
privilege which may be afforded to the holder of any such security.
In the event of any ambiguity or uncertainty hereunder or in any
notice, instruction or other communication received by Escrow Agent hereunder,
Escrow Agent may, in its sole discretion, refrain from taking any action other
than retain possession of the Escrow Fund, unless Escrow Agent
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receives written instructions, signed by the Company and the Offerors, which
eliminates such ambiguity or uncertainty.
In the event of any dispute between or conflicting claims by or among
the Company and the Offerors and/or any other person or entity with respect to
any Escrow Fund, Escrow Agent shall be entitled, in its sole discretion, to
refuse to comply with any and all claims, demands or instructions with respect
to such Escrow Fund so long as such dispute or conflict shall continue, and
Escrow Agent shall not be or become liable in any way to the Company and the
Offerors for failure or refusal to comply with such conflicting claims, demands
or instructions. Escrow Agent shall be entitled to refuse to act until, in its
sole discretion, either (i) such conflicting or adverse claims or demands shall
have been determined by a final order, judgment or decree of the Bankruptcy
Court, which order, judgment or decree is not subject to appeal, or settled by
agreement between the conflicting parties as evidenced in a writing satisfactory
to Escrow Agent or (ii) Escrow Agent shall have received security or an
indemnity satisfactory to it sufficient to hold it harmless from and against any
and all losses which it may incur by reason of so acting. Escrow Agent may, in
addition, elect, in its sole discretion, to commence an interpleader action or
seek other judicial relief or orders as it may deem, in its sole discretion,
necessary. The costs and expenses (including reasonable attorneys' fees and
expenses) incurred in connection with such proceeding shall be paid by, and
shall be deemed a joint and several obligation of, the Offeror and the Company;
provided, however, that in the event that the Company pays any amount of such
fees and expenses and the Recapitalization is not consummated, then in such
event the Company shall have the right to collect such payment from the
Offerors; and provided further, that in the event that the Offerors pay any
amount of such fees and expenses and the Recapitalization is consummated, then
in such event the Offerors shall have the right to collect such payment from the
Company.
6. Successor Escrow Agent. The Escrow Agent (and any successor Escrow
Agent) may at any time resign as such by delivering notice of its resignation to
the Offerors and the Company and delivering the Escrow Fund to a successor
Escrow Agent jointly designated by the Offerors and the Company in writing, or
if the parties cannot agree on the successor Escrow Agent within thirty (30)
days of the notice, to the Bankruptcy Court, whereupon the resigning Escrow
Agent shall be discharged of and from any and all further obligations arising in
connection with this Agreement. After the resignation of any Escrow Agent, the
provision of the Agreement limiting the liability of the Escrow Agent and
indemnifying the Escrow Agent against liabilities, costs, fees and expenses
(including legal fees and expenses) shall continue to inure to the benefit of
the resigned Escrow Agent with respect to any action or omission taken or made
by it while it was the Escrow Agent under this Agreement.
7. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be deemed effective when delivered by
hand, or when telecopied with receipt confirmed, or when mailed by U.S. mail via
first class certified or registered mail, return receipt requested, or when
properly deposited for delivery by a nationally recognized commercial overnight
delivery service, prepaid, as follows:
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If to the Company:
PennCorp Financial Group, Inc.
c/o Southwestern Financial Services Corp.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx, President and Chief Executive Officer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxx 0000
Xxxxxx, Xxxxx 00000-0000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
If to the Offerors:
Inverness/Phoenix Capital, LLC
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxx
and to:
Vicuna Advisors, LLC
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxx Xxxxx
and to:
Xxxxxxx Xxxxxxxx
0000 Xxxxxx Xxxxx Xxxxx
Xxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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.
and to:
Xxxx Xxxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Learner, P.C.
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
Heath, Davis & XxXxxxx, P.C.
000 Xxxxx Xxxxxx Xxxx.
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Will X. Xxxxx
Xxxxxx & Xxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx
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If to the Escrow Agent:
The Citibank Private Bank
Preferred Custody Services
000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telephone No.: 000-000-0000
Telecopy No. 000-000-0000
Attention: Xxxx X. Xxxxxx
Such notice addresses and telecopy numbers may be changed upon written
notice to the other parties hereto.
8. Severability. Any provision of this Agreement which may be
determined by the Bankruptcy Court to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. It is expressly understood, however, that the parties hereto
intend each and every provision of this Agreement to be valid and enforceable
and hereby knowingly waive all rights to object to any provision of this
Agreement.
9. Assignment. This Agreement shall be binding upon and inure solely to
the benefit of the parties hereto and their respective successors and assigns,
and shall not be enforceable by or inure to the benefit of any third party. No
party may assign any of its rights or obligations under this Agreement without
the written consent of the other parties.
10. Amendments; Termination. This Agreement may only be modified or
terminated by a writing signed by all of the parties hereto, and no waiver
hereunder shall be effective unless in a writing signed by the party to be
charged; provided that until the Company becomes a party to this Agreement, this
Agreement may only be modified or terminated with the prior written consent of
the Company as a third party beneficiary; and provided further that until the
Company becomes a party to this Agreement, no waiver hereunder shall be
effective unless prior consented in writing by the Company as a third party
beneficiary.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed and delivered in counterpart signature pages and delivered via
facsimile transmission, and any such counterpart executed and delivered via
facsimile transmission shall be deemed an original for all intents and purposes.
12. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of New York, without regard to the conflict of law
principles thereof except to the extent pre-empted by the United States
Bankruptcy Code. Any judicial proceeding brought against any of the parties to
this Agreement relating to a dispute arising out of this Agreement will be
brought
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exclusively in the Bankruptcy Court and by its execution and delivery of this
Agreement, each party hereto accepts the exclusive jurisdiction of the
Bankruptcy Court.
13. Miscellaneous.
(a) This Agreement is for the exclusive benefit of the parties
hereto and their respective successors hereunder, and shall not be deemed to
give, either express or implied, any legal or equitable right, remedy, or claim
to any other entity or person whatsoever.
(b) Each of the Company, the Offerors and the Escrow Agent
hereby submits to the jurisdiction of the Bankruptcy Court and each agrees that
all proceedings relating hereto shall be brought in the Bankruptcy Court. Each
of the Company and the Offerors hereby waives the right to trial by jury and to
assert counterclaims in any such proceedings. To the extent that in any
jurisdiction the Company and the Offerors may be entitled to claim, for itself
or its assets, immunity from suit, execution, attachment (whether before or
after judgment) or other legal process, each hereby irrevocably agrees not to
claim, and hereby waives, such immunity.
(c) The rights and remedies conferred upon the parties hereto
shall be cumulative, and the exercise or waiver of any such right or remedy
shall not preclude or inhibit the exercise of any additional rights or remedies.
The waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.
(d) Each of the Company and the Offerors hereby represents and
warrants (i) that this Amended and Restated Escrow Agreement has been duly
authorized, executed and delivered on its behalf and constitutes its legal,
valid and binding obligation, subject in the case of the Company to Bankruptcy
Court approval, and (ii) that the execution, delivery and performance of this
Amended and Restated Escrow Agreement by it does not violate any applicable law
or regulation.
(e) This Agreement shall constitute the entire agreement of
the parties with respect to the subject matter and supersedes all prior oral or
written agreements in regard thereto.
(f) This Agreement shall terminate upon the distribution of
all Escrow Funds from the Account. The provisions of these terms and conditions
shall survive termination of this Escrow Agreement and/or the resignation or
removal of the Escrow Agent.
(g) The Escrow Agent does not have any interest in the Escrow
Fund deposited hereunder but is serving as escrow holder only and having only
possession thereof. The Offerors and the Company shall pay or reimburse the
Escrow Agent upon request for any transfer taxes or other taxes relating to the
Escrow Fund incurred in connection herewith and shall indemnify and hold
harmless the Escrow Agent any amounts that it is obligated to pay in the way of
such taxes. Any payments of income from this Escrow Account shall be subject to
withholding regulations then in force with respect to United States taxes. The
parties hereto will provide the Escrow Agent with appropriate W-9 forms for tax
I.D., number certifications, or W-8 forms for non-resident alien certifications.
It is understood that the Escrow Agent shall be responsible for income reporting
only with respect to income earned on investment of funds which are a part of
the Escrow Fund and is not
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responsible for any other reporting. Any income taxes generated from the Escrow
Fund shall be paid by the Offerors and the Escrow Agent shall deliver Form 1099
to and in the name of Inverness.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the day and year first above written:
INVERNESS/PHOENIX CAPITAL, LLC
By: /s/ XXXXX X. XXXXX
---------------------------------
Its: Managing Director
--------------------------------
VICUNA ADVISORS, LLC, as
investment advisor
By:
---------------------------------
Its: Managing Member
--------------------------------
/s/ XXXXXXX XXXXXXXX
-----------------------------------
XXXXXXX XXXXXXXX
/s/ XXXX XXXXXX
-----------------------------------
XXXX XXXXXX
PENNCORP FINANCIAL GROUP, INC.
By: /s/ XXXXX X. XXXX
---------------------------------
Its: President and Chief Executive
Officer
--------------------------------
CITIBANK, N.A.
By: [ILLEGIBLE]
---------------------------------
Its:
--------------------------------
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EXHIBIT A
____________, 2000
VIA FACSIMILE 000-000-0000
The Citibank Private Bank
Preferred Custody Services
000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Re: Escrow Agreement (the "Escrow Agreement"), dated March __, 2000,
by and among Inverness/Phoenix Capital, LLC, a Delaware limited
liability company ("Inverness"), Vicuna Advisors, L.L.C., a
Delaware limited liability company ("Vicuna"), Xxxxxxx Xxxxxxxx
("Xxxxxxxx"), Xxxx Xxxxxx ("Xxxxxx" and together with Inverness,
Vicuna, and Xxxxxxxx the "Offerors"), PennCorp Financial Group,
Inc., a Delaware corporation (the "Company") and Citibank, N.A.
(the "Escrow Agent").
Ladies and Gentlemen:
This will confirm that the Recapitalization of the Company shall occur
on _________________, 2000.
You are hereby directed to cause the delivery of the Xxxxxxxx Deposit
(as defined in the Escrow Agreement) by transferring the Xxxxxxxx Deposit to the
Company simultaneously with the consummation of the Recapitalization and in
accordance with the following wiring instructions:
--------------------------------
______, ________________________
ABA #
------------------------------------------------
Account Name:
----------------------------------------
Account #:
-------------------------------------------
Special Instructions: Please notify ______________ at
(___) ___-____ upon receipt
You are hereby directed to cause the delivery of the Xxxxxx Deposit (as
defined in the Escrow Agreement) by transferring the Xxxxxx Deposit to the
Company simultaneously with the consummation of the Recapitalization and in
accordance with the following wiring instructions:
--------------------------------
______, ________________________
ABA #
------------------------------------------------
Account Name:
----------------------------------------
17
Account #:
---------------------------------------
Special Instructions: Please notify ______________ at
(___) ___-____ upon receipt
You are hereby directed to cause the delivery of [$__________1 OF] the
Inverness Deposit (as defined in the Escrow Agreement) by transferring
[$__________ OF] the Inverness Deposit to the Company simultaneously with the
consummation of the Recapitalization and in accordance with the following wiring
instructions:
--------------------------------
______, ________________________
ABA #
------------------------------------------------
Account Name:
----------------------------------------
Account #:
-------------------------------------------
Special Instructions: Please notify ______________ at
(___) ___-____ upon receipt
[YOU ARE HEREBY DIRECTED TO CAUSE THE DELIVERY OF $__________2 OF THE
INVERNESS DEPOSIT (AS DEFINED IN THE ESCROW AGREEMENT) BY TRANSFERRING
$__________ OF THE INVERNESS DEPOSIT TO INVERNESS SIMULTANEOUSLY WITH THE
CONSUMMATION OF THE RECAPITALIZATION AND IN ACCORDANCE WITH THE FOLLOWING WIRING
INSTRUCTIONS:
--------------------------------
______, ________________________
ABA #
------------------------------------------------
Account Name:
----------------------------------------
Account #:
-------------------------------------------
Special Instructions: Please notify ______________ at
(___) ___-____ upon receipt
You are hereby directed to cause the delivery of [$__________ OF] the
Vicuna Deposit (as defined in the Escrow Agreement) by transferring [$__________
OF] the Vicuna Deposit to the Company simultaneously with the consummation of
the Recapitalization and in accordance with the following wiring instructions:
--------------------------------
______, ________________________
ABA #
------------------------------------------------
Account Name:
----------------------------------------
Account #:
-------------------------------------------
Special Instructions: Please notify ______________ at
(___) ___-____ upon receipt
-------------
(1) To reflect amount, if any, called under the Standby Commitment.
(2) To reflect, if any, not called under the Standby Commitment.
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[YOU ARE HEREBY DIRECTED TO CAUSE THE DELIVERY OF $__________ OF THE
VICUNA DEPOSIT (AS DEFINED IN THE ESCROW AGREEMENT) BY TRANSFERRING OF
$__________ OF THE VICUNA DEPOSIT TO VICUNA SIMULTANEOUSLY WITH THE CONSUMMATION
OF THE RECAPITALIZATION AND IN ACCORDANCE WITH THE FOLLOWING WIRING
INSTRUCTIONS:
--------------------------------
______, ________________________
ABA #
------------------------------------------------
Account Name:
----------------------------------------
Account #:
-------------------------------------------
Special Instructions: Please notify ______________ at
(___) ___-____ upon receipt
You are hereby directed to cause the delivery of the Escrow Earnings
(as defined in the Escrow Agreement) by transferring the Escrow Earnings to
Inverness for the ratable benefit of the Offerors simultaneously with the
Closing and in accordance with the following wiring instructions:
--------------------------------
______, ________________________
ABA #
------------------------------------------------
Account Name:
----------------------------------------
Account #:
-------------------------------------------
Special Instructions: Please notify ______________ at
(___) ___-____ upon receipt
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Upon such delivery, the Escrow Agreement shall terminate and you shall
be released from all further obligations under the Escrow Agreement.
Very truly yours,
INVERNESS/PHOENIX CAPITAL, LLC
By:
---------------------------------------
Its:
--------------------------------------
VICUNA ADVISORS, LLC
By:
---------------------------------------
Its:
--------------------------------------
------------------------------------------
XXXXXXX XXXXXXXX
------------------------------------------
XXXX XXXXXX
PENNCORP FINANCIAL GROUP, INC.
By:
---------------------------------------
Its:
--------------------------------------
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EXHIBIT B
Confirmation of Wire Instructions
1. Wire Instructions for Xxxxxxx Xxxxxxxx.
A. Xxxxxxx Xxxxxxxx: (000) 000-0000
B Will X. Xxxxx: (000) 000-0000
2. Wire Instructions for Xxxx Xxxxxx.
A. Xxxx Xxxxxx: (000) 000-0000
B. Xxxxxxx Xxxxx: (000) 000-0000
3. Wire Instructions for Inverness.
A. Xxxxxx Xxxxxx: (000) 000-0000
X. Xxxxxx X. Xxxxx: (000) 000-0000
4. Wire Instructions for Vicuna.
A. Xxxx Xxxxx: (000) 000-0000
B. Xxxxx Xxxxxxxxx: (000) 000-0000
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EXHIBIT C
Designated Person
1. On behalf of Inverness.
Xxxxx X. Xxxxx
-------------------------
X. XxXxxx Dunwoody
-------------------------
2. On behalf of Vicuna.
Xxxx Xxxxx
-------------------------
Xxxxxxx X. Xxxxxx
-------------------------
3. On behalf of Xxxxxxx Xxxxxxxx.
Xxxxxxx Xxxxxxxx
-------------------------
4. On behalf of Xxxx Xxxxxx.
Xxxx Xxxxxx
-------------------------
5. On behalf of PennCorp Financial
Group, Inc.
[Xxxxx X. Xxxx]
-------------------------
