1
EXHIBIT 10.4
AMENDMENT NO. 5
Dated as of December 31, 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"),
and, with respect to paragraph 3, as Collateral Agent under the Security
Agreement, hereby agree as follows:
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. 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. 5 Effective Date (as
defined below), the Credit Agreement shall be amended as follows:
(a) The definition of "PennUnion Companies" set forth in Section 1.01
of the Credit Agreement shall be amended and restated in its entirety to read as
follows:
"`PennUnion Companies' means PennCorp Financial, Inc., Pennsylvania Life
Insurance Company, PennCorp Life Insurance Company (Canada), Union
Bankers Insurance Company, Constitution Life Insurance Company,
Peninsular Life Insurance Company, and Marquette National Life Insurance
Company."
(b) Section 1.01 of the Credit Agreement is hereby amended to include the
following new definitions in alphabetical order:
"Amendment No. 5 Effective Date" shall have the meaning ascribed to that
term in Amendment No. 5, dated as of December 31, 1998, to the Credit
Agreement.
2
"PennUnion Purchase Contract" shall mean that certain purchase agreement
dated December __, 1998 in the form attached hereto as Schedule A, as
such form may be amended or modified from time to time after the
Amendment No. 5 Effective Date, provided that that any such amendment or
modification was, in the sound business judgment of the Company and its
Board of Directors, in the best interests of the Company, and provided
further that any such amendment or modification that reduced the
aggregate consideration of $175,000,000 to be received by the Company or
the net cash component thereof of $79,400,000 was consented to in writing
by the Majority Banks; it being understood that the reduction of the
consideration or the net cash component thereof to be received by the
Company pursuant to the exercise by the purchaser of a right or the
satisfaction of a condition under the PennUnion Purchase Contract or
because an insurance regulator required that a portion of the
consideration or the net cash component thereof be invested in an
Insurance Company would not be a reduction in the consideration to be
received by the Company requiring the consent of the Majority Banks.
(c) Section 8.01 of the Credit Agreement shall be amended as follows:
(i) to delete the period at the end of subsection (n) and replace it
with "; and" and
(ii) to add a new subsection "(o)" as follows:
"(o) as soon as available (i) a copy of the PennUnion Purchase Contract
as executed and delivered by the Company and of each amendment thereto
and modifications thereof, (ii) the opinion of Xxxxxxx Xxxxx Xxxxxx with
respect to the fairness of the sale of the PennUnion Companies, and (iii)
any third party actuarial study of the reserves of the PennUnion
Companies, and (iv) a copy of the Company's 1999 business plan and
budget, on or before January 15, 1999."
(d) Clause (i) of Section 8.06(b) of the Credit Agreement shall be
amended and restated in its entirety as follows:
"(i) the PennUnion Companies in accordance with and pursuant to the terms
of the PennUnion Purchase Contract and"
(e) Section 8.09 of the Credit Agreement shall be amended as follows:
(i) to insert in subsection (b) immediately following the word
"Subsidiary" the second time it appears therein the following:
", other than the net proceeds of sales of assets pursuant to the
PennUnion Purchase Contract,"; and
(ii) to add a new subsection (c) reading as follows:
"(c) The Company shall use its best efforts and act as expeditiously as
possible (i) to cause, subject to Applicable Law and disapproval by an
Applicable Insurance Regulatory Authority, each of its Subsidiaries
2
3
receiving any of the proceeds (whether cash or non-cash) from the sale of
assets pursuant to the PennUnion Purchase Contract to transfer such
proceeds to the Collateral Account, and (ii) to comply with any such
Applicable Law and to obtain any required approval; and for this purpose
"transfer" includes by way of dividend, loan, purchase of shares or
capital contribution, and the second sentence of Section 8.06, insofar as
it applies to the acquisition of Property, and Section 8.15 shall not
apply to such transfers."
(f) Section 9(p) of the Credit Agreement shall be amended and restated
in its entirety as follows:
"The Company shall fail to receive, during the period of December 30,
1998 through the close of business on March 3, 1999, the payments due to
be made pursuant to the terms of certain of the Surplus Notes in an
aggregate amount of no less than $15,000,000; or"
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 required under any Applicable
Law or Contract as in effect on the Amendment No. 5 Effective Date, are listed
on Schedule 5.3, 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 PennUnion Purchase Contract 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
December 22, 1998, 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. 5 Effective Date, except by amendments and
modifications of which the Banks have been furnished copies.
3
4
(c) Of the $50,000,000 specified in Section 8.06(b), as of the Amendment
No. 5 Effective Date, $50,000,000 will be available to the Company and its
Subsidiaries for sales, leases, transfers and other dispositions of the types
contemplated thereby.
(d) 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. 5 Effective Date.
4. Conditions to Effectiveness; Amendment No. 5 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. 5
Effective Date") as:
(a) this Amendment has been executed and delivered by the Company, the
Majority Banks and the Administrative Agent;
(b) the Company has paid to the Administrative Agent for the account of
each Bank a non-refundable fee in an amount equal to 0.25% of such Bank's
Commitment;
(c) 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
(d) Messrs. Winthrop, Stimson, Xxxxxx & Xxxxxxx and Xxxxx & Xxxxx LLP
shall each have had two (2) Business Days during normal business hours, or such
lesser time as they shall have deemed adequate, to have reviewed (i) the
PennUnion Purchase Contract in the form attached as Schedule A, and (ii) the
opinion of Xxxxxxx Xxxxx Barney with respect to the fairness of the sale of the
PennUnion Companies. The delivery by Messrs. Winthrop, Stimson, Xxxxxx & Xxxxxxx
and Xxxxx & Xxxxx LLP to the Company of their written statements to the effect
that they have had adequate time for such review shall constitute conclusive
confirmation of the fulfillment of this condition.
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.
4
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 5
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: Executive Vice President
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:
------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as a Managing Agent and as a Bank
By:
------------------------------------
Name:
Title:
6
NATIONSBANK, N.A., as a Managing Agent
and as a Bank
By: [ILLEGIBLE]
------------------------------------
Name: [ILLEGIBLE]
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 X. XXXX
------------------------------------
Name: Xxxx X. 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
7
DRESDNER BANK AG, NEW YORK BRANCH &
GRAND CAYMAN BRANCH, as a Co-Agent
and as a Bank
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
SUNTRUST BANK, CENTRAL FLORIDA
NATIONAL ASSOCIATION
By:
------------------------------------
Name:
Title:
BANK ONE, TEXAS N.A.
By:
------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By: ____________________________________
Name:
Title:
LTCB TRUST COMPANY
By:
------------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By: /s/ XXX XXXXXXX
------------------------------------
Name: Xxx Xxxxxxx
Title: Senior Vice President
