EXHIBIT 10.40
EXECUTION COPY
WAIVER
Dated as of August 14, 1998
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"),
hereby agree as follows:
1. Credit Agreement. 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 Waiver (this "Waiver") that are
defined in the Credit Agreement and are not otherwise defined herein are used
herein with the meanings therein ascribed to them. The Credit Agreement as
modified by this Waiver is and shall continue to be in full force and effect and
is hereby in all respects confirmed, approved and ratified.
2. Waivers. (a) The Banks hereby waive compliance with Section 8.01(a) of
the Credit Agreement to the extent that any non-compliance results solely from
the failure to deliver the financial statements, balance sheets and certificates
required by such Section 8.01(a) within 45 days after the end of the fiscal
quarter of the Company ending June 30, 1998; provided that, notwithstanding the
foregoing, the Company shall deliver such financial statements, balance sheets
and certificates to each of the Banks no later than August 24, 1998.
(b) The Banks hereby waive compliance with Section 8.10 of the Credit
Agreement for the period (the "Waiver Period") from and including June 30, 1998
to and including September 28, 1998 to the extent that any non-compliance
results solely from the write-down of the book value of Pennsylvania Life
Insurance Company, Union Bankers Insurance Company, Constitution Life Insurance
Company, Marquette Life Insurance Company, KIVEX, Inc. and/or Forum Benefits,
Inc. (collectively, the "Held for Sale Companies", being the assets designated
by the Company as "Held for Sale") in connection with the potential sale of the
Held for Sale Companies; provided that, notwithstanding the foregoing, during
such Waiver Period, the Company shall not permit the Leverage Ratio to exceed
46% at any time and provided, further, that, for the period (the "Restricted
Payment Period") from and including August 14, 1998 to and including September
28, 1998, the Company shall
not (i) make, or permit any Subsidiary to make, any Restricted Payment or (ii)
incur any Indebtedness (other than the Loans under the Credit Agreement).
(c) The Banks hereby waive compliance with Section 8.13 of the Credit
Agreement for the Waiver Period to the extent that any non-compliance results
solely from the write-down of the book value of any or all of the Held For Sale
Companies in connection with the potential sale thereof ; provided that,
notwithstanding the foregoing, during such Waiver Period, the Company shall not
permit the Net Worth of the Company and its Consolidated Subsidiaries to be less
than $625,000,000 at any time and provided, further, that, for the Restricted
Payment Period, the Company shall not (i) make, or permit any Subsidiary to
make, any Restricted Payment or (ii) incur any Indebtedness (other than the
Loans under the Credit Agreement).
For purposes hereof, "Restricted Payment" shall mean any payment on account
of any purchase, redemption, retirement, exchange or conversion of (i) any share
of capital stock of the Company or any security convertible into, or any option,
warrant or other right to acquire, any share of capital stock of the Company or
(ii) the Subordinated Notes or any other subordinated Indebtedness.
3. Fees. The Company agrees to pay, on August 14, 1998, a fee to each Bank
that executes this Waiver on or before August 14, 1998, such fee to be in an
amount for each such Bank equal to 0.05% of such Bank's Commitment on August 14,
1998. Such fees, once paid, shall not be refundable in whole or in part.
4. Effective Date. The waivers provided for herein shall be effective as of
the date first written above, but shall not become effective as of such date
until this Waiver has been executed by the Company, the Majority Banks and the
Administrative Agent.
5. Governing Law. This Waiver shall be governed by, and construed in
accordance with, the law of the State of New York.
6. Counterparts. This Waiver 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 Waiver by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly
executed as of the day and year first above written.
PENNCORP FINANCIAL GROUP, INC.
By: /s/Xxxxx X. XxXxxxxxx
-------------------------
Name: Xxxxx X. XxXxxxxxx
Title: EVP & CFO
THE BANK OF NEW YORK, as
Administrative Agent and as a Bank
By: /s/Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as a
Managing Agent and as a Bank
By: /s/Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as a Managing Agent and as a Bank
By: /s/ Xxxxx X. Xxx
------------------------
Name: Xxxxx X. Xxx
Title: Vice President
NATIONSBANK, N.A., as a Managing Agent
and as a Bank
By: /s/Xxx X. Xxxxxx
------------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK, as a Co-Agent
and as a Bank
By: /s/Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
MELLON BANK, N.A., as a Co-Agent
and as a Bank
By:
------------------------
Name:
Title:
BANK OF MONTREAL, as a Co-Agent
and as a Bank
By: /s/Xxxxx X. Xxxxx
------------------------
Name: Xxxxx X. Xxxxx
Title: Director
CIBC INC., as a Co-Agent and as a Bank
By: /s/Xxxxxx X. Xxx
------------------------
Name: Xxxxxx Xxx
Title: Executive Director
CIBC Xxxxxxxxxxx Corp., as agent
DRESDNER BANK AG, NEW YORK BRANCH &
GRAND CAYMAN BRANCH, as a Co-Agent
and as a Bank
By:
------------------------
Name:
Title:
SUNTRUST BANK, CENTRAL FLORIDA
NATIONAL ASSOCIATION
By:
------------------------
Name:
Title:
BANK ONE, TEXAS N.A.
By: /s/Xxxxxx Xxxxxxxxx
------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/Xxxxxx X. Xxxxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Senior Vice President
LTCB TRUST COMPANY
By: /s/Jun Ebihara
------------------------
Name: Jun Ebihara
Title: Senior Vice President
ING (U.S.) CAPITAL CORPORATION
By: /s/X.X. Xxxxxxxx
------------------------
Name: X.X. Xxxxxxxx
Title: Vice President
