EXECUTION COPY
AMENDMENT NO. 2 AND WAIVER
Dated as of April 17, 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, as amended by Amendment No. 1 and Waiver, dated as of June
13, 1997, among the Company, the Banks, the Agents and the Administrative Agent
(as so amended, the "Credit Agreement"). Terms used in this Amendment No. 2 and
Waiver (this "Amendment and 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 amended by this Amendment and Waiver
is and shall continue to be in full force and effect and is hereby in all
respects confirmed, approved and ratified.
2. Amendments. (a) The definition of "Applicable Margin" set forth in
Section 1.01 of the Credit Agreement is hereby amended by inserting the
following words immediately before the period at the end thereof:
"; provided, further, that the Applicable Margin set forth above for each
Tier shall be increased by 0.125% at any time on or after April 17, 1998
that the Leverage Ratio exceeds 35%".
(b) Section 1.01 of the Credit Agreement is hereby amended by inserting the
following definitions therein in the correct alphabetical order:
" `Forward Purchase Contract' shall mean a contract entered into
between the Company and a Forward Purchase Contract Broker that provides
(i) for purchases by such Forward Purchase Contract Broker of shares of the
common stock of the Company, (ii) for resale of such common stock so
purchased by such Forward Purchase Contract Broker to, at the option of the
Company, the Company or any other Person or Persons, and (iii) that
increases and decreases in the value of such common stock purchased by such
Forward Purchase Contract Broker from the date so purchased to the date so
resold shall be for the account of the Company; provided that (1) the
aggregate purchase price paid for all common stock of the Company purchased
by Forward Purchase Contract Brokers pursuant to Forward Purchase Contracts
shall not exceed $125,000,000 and (2) each Forward Purchase Contract shall
terminate no later than eight (8) months after the effective date thereof.
`Forward Purchase Contract Broker' means any securities broker or
dealer that is a party to a Forward Purchase Contract."
(c) The definition of "Indebtedness" set forth in Section 1.01 of the
Credit Agreement is hereby amended by inserting the following sentence at the
end thereof:
"For purposes of this definition, the Company shall be deemed to have
Indebtedness at any time in respect of its obligations arising under each
Forward Purchase Contract in effect at such time in an amount equal to the
greater of (i) the Company's maximum aggregate liability at such time
(whether contingent or non-contingent) in respect of its obligations to
reimburse any Persons in respect of drawings made under letters of credit
or other Guarantees issued in connection with such Forward Purchase
Contract in favor of the Forward Purchase Contract Broker party thereto and
(ii) the excess, if any, of (x) the sum of the aggregate purchase price of
all shares of the Company's common stock purchased by such Forward Purchase
Contract Broker pursuant to such Forward Purchase Contract and all fees and
other carrying costs payable by the Company or any of its Subsidiaries to
such Forward Purchase Contract Broker pursuant to such Forward Purchase
Contract over (y) the sum of (A) the aggregate sales price of all common
stock of the Company sold by such Forward Purchase Contract Broker pursuant
to such Forward Purchase Contract and (B) the product of the aggregate
number of shares of the Company's common stock held at such time by such
Forward Purchase Contract Broker pursuant to such Forward Purchase Contract
multiplied by 90% of the average of the opening and closing prices of the
Company's common stock on the New York Stock Exchange on the day of
calculation."
(d) Section 8.13 of the Credit Agreement is hereby amended by deleting the
figure "$50,000,000" therein and inserting in lieu thereof the figure
"$75,000,000".
3. Waivers. (a) The Banks hereby waive compliance with the last sentence of
Section 8.06 of the Credit Agreement solely to the extent necessary to permit
the sale by the Company or one or more of its Subsidiaries of all of the assets
or capital stock of Pennsylvania Life Insurance Company ("Penn Life"), Union
Bankers Insurance Company ("Union Bankers") and one or more of the Subsidiaries
of the Company listed on Schedule 1 hereto (together with Penn Life and Union
Bankers, the "Specified Companies"); provided that the foregoing waiver shall
not apply to any sale of the capital stock or other ownership interests of any
Subsidiary of the Company not listed on Schedule 1; provided, further, that the
Company and its Subsidiaries receive aggregate gross consideration for such sale
of not less than $425,000,000 (of which not less than $325,000,000 shall be in
the form of cash or cash equivalents); provided, further, that neither the
Company nor any or its Subsidiaries (other than the Specified Companies) shall
have conveyed, sold, leased, transferred or otherwise disposed (including by way
of dividends or other distributions) of any of its assets or business (other
than (i) immaterial dispositions in the ordinary course of business and (ii)
dividends and other distributions of assets to any Specified Company to the
extent such assets are transferred by way of dividend, distribution or other
payment to the Company or any of its Subsidiaries that is not a Specified
Company prior to the sale of such Specified Company) to, merged or consolidated
with, or made any Investment (other than immaterial Investments in the ordinary
course of business) in any Specified Company at any time from and including the
date hereof through and including the date of the sale of such Specified Company
by the Company and its Subsidiaries; provided, further, that, on the first
Business Day immediately following the date upon which either (i) Occidental
Life Insurance Company of North Carolina ("Occidental") and Professional
Insurance Corporation ("Professional") or (ii) Penn Life and Union Bankers cease
to be Subsidiaries of the Company, (x) the aggregate amount of the Commitments
under the Credit Agreement shall be automatically reduced (subject to Sections
2.04 and 4.02 of the Credit Agreement) by an amount equal to $75,000,000 (and
any notice required to be given pursuant to Section 2.04(i) and Section 4.05
regarding such reduction shall be deemed to have been given hereby) and (y) the
aggregate amount of all Loans outstanding under the Credit Agreement shall not
exceed the Commitments as so reduced; provided, further, that the parties hereto
acknowledge that the assets or capital stock of the Specified Companies so sold
and to which this waiver applies shall not be considered in determining
compliance with Section 8.06(b) in connection with any future sale, lease,
transfer or other disposition of Property by the Company or any of its
Subsidiaries.
(b) The Banks hereby waive compliance with Section 8.10 of the Credit
Agreement for the period (the "Waiver Period") from (x) the date hereof to (y)
the earlier of (i) December 31, 1998 and (ii) the first Business Day immediately
following the date upon which either (a) Occidental and Professional or (b) Penn
Life and Union Bankers cease to be Subsidiaries of the Company; provided that,
notwithstanding the foregoing, during such Waiver Period the Company shall not
permit the Leverage Ratio to exceed 42.5% at any time.
4. Fees. The Company agrees to pay, on April 17, 1998, a fee to each Bank
that executes this Amendment and Waiver on or before April 17, 1998, such fee to
be in an amount for each such Bank equal to 0.125% of such Bank's Commitment on
April 17, 1998. Such fees, once paid, shall not be refundable in whole or in
part.
5. Effective Date. The amendments and 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 Amendment and Waiver has been executed by the Company,
the Majority Banks and the Administrative Agent.
6. Governing Law. This Amendment and Waiver shall be governed by, and
construed in accordance with, the law of the State of New York (without giving
effect to its choice of law principles).
7. Counterparts. This Amendment and 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 Amendment and Waiver
by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 and
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: SVP
THE BANK OF NEW YORK, as
Administrative Agent and as a Bank
By: /s/Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant 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: /s/Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: AVP
NATIONSBANK, N.A., as a Managing Agent
and as a Bank
By: /s/J. Xxxxxxx Xxxxxxxxx
-------------------------------------
Name: J. Xxxxxxx Xxxxxxxxx
Title: Vice President
FLEET NATIONAL BANK, as a Co-Agent
and as a Bank
By: /s/X.X. Xxxxxxx by Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: 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/Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title:
CIBC INC., as a Co-Agent and as a Bank
By: /s/Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
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: /s/X. Xxxxxx Beaudouin /s/Xxxxxx X. Xxxxxxx
------------------------------------------------
Name: X. Xxxxxx Xxxxxxxxx Xxxxxx X. Xxxxxxx
Title: First Vice President Vice President
SUNTRUST BANK, CENTRAL FLORIDA
NATIONAL ASSOCIATION
By: /s/Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: First Vice President
BANK ONE, TEXAS N.A.
By: /s/Xxxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
CORESTATES BANK, N.A.
By: /s/Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice Prsident
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President
LTCB TRUST COMPANY
By:
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By: /s/X.X. Xxxxxxxx
-------------------------------------
Name: X.X. Xxxxxxxx
Title: Vice President
Schedule 1
Specified Companies
Constitution Life Insurance Company
Marquette National Life Insurance Company
Pennsylvania Life Insurance Company Canada
Peninsular Life Insurance Company
PennCorp Life Insurance Company
California Sales Agency, Inc.
Kivex, Inc.
Mississippi Region Associates, Inc.
PennCorp Canada Marketing, Inc.
PennCorp Financial, Inc.
Midwest Region, Inc.
Midwest Region, Inc. of Colorado
Safe Drivers Agency Limited
Southeastern Region Associates, Inc.
United Silver Spring Associates, Inc.
