AMENDMENT TO SHARE PURCHASE AGREEMENT
This Amendment to the Share Purchase Agreement (this "Amendment") is
entered into as of November 8, 2001 between Scottish Annuity & Life Holdings,
Ltd., a Cayman Islands company ("Buyer"), and Pacific Life Insurance Company, a
California corporation ("Seller").
RECITALS
WHEREAS, Seller and Buyer are parties to a Share Purchase Agreement entered
into as of August 6, 2001 (the "Share Purchase Agreement") providing for the
purchase by Buyer from Seller of all of the issued and allotted share capital of
World-Wide Holdings Limited, an English private company limited by shares, for
consideration and on the terms as set forth in the Share Purchase Agreement; and
WHEREAS, Seller and Buyer desire to amend the Share Purchase Agreement as
provided in this Amendment.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Amendment, and for other valuable consideration, receipt of
which is hereby acknowledged, the parties hereby agree that the Share Purchase
Agreement shall be amended as follows:
AMENDMENT
1. Defined Terms. (a) (a) All capitalized terms not otherwise defined in
this Amendment shall have the same meaning as in the Share Purchase Agreement.
(b) The term "Registration Statement" is deleted from the list of
Definitions in the Table of Contents.
2. Sections 2.2(c) of the Share Purchase Agreement. Section 2.2(c) of the
Share Purchase Agreement is amended and restated in its entirety by deleting the
phrase "Audited Company Financials for the year ended September 30, 2001" and
inserting the phrase "Intentionally left blank" in its place.
3. Section 2.2 (n)(i)(B) of the Share Purchase Agreement. Section
2.2(n)(i)(B) of the Share Purchase Agreement is amended to read in full as
follows:
"recording the appointment of such persons as the directors, the Secretary
and the auditors of the Company as Buyer shall nominate, provided that
appointment of such persons shall be contingent upon any required notices with
and approvals of the FSA;"
4. Section 3.25 of the Share Purchase Agreement. Section 3.25 of the Share
Purchase Agreement is amended to read in full as follows:
"3.25 Proxy Statement.
None of the information supplied or to be supplied by Seller for inclusion
in the Proxy Statement will cause the Proxy Statement, when first mailed to the
shareholders of Buyer and at the time of the Meeting, to contain any untrue
statement of a material fact, or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading."
5. Section 4.3 of the Share Purchase Agreement. Section 4.3 of the Share
Purchase Agreement is amended to read in full as follows:
"4.3 Consents and Approvals.
Except for (i) any filing required under the HSR Act and the expiration or
early termination of any applicable waiting period thereunder, (ii) any filings
of applications and notices, as applicable, with the insurance regulatory
authorities in the jurisdictions in which any insurance company Subsidiaries of
Buyer operate their respective businesses and the approval of such applications
or the grant of required licenses by such authorities, (iii) any filings,
approvals or other requirements under applicable securities laws or applicable
insurance company stock issuance laws, (iv) the filing with the Securities and
Exchange Commission (the "SEC") of the proxy statement (as amended and/or
supplemented from time to time, the "Proxy Statement") relating to the meeting
of its shareholders to be held for purposes of obtaining shareholder approval of
the Charter Amendment, the transactions contemplated by this Agreement and the
adoption of a 2001 stock option plan (the "Meeting"), (v) any filings of
applications and notices with the FSA in relation to the change of controller of
the Company that will take effect on Closing, (vi) the filing of an amendment to
the Company's Articles of Association with the appropriate authority in the
Cayman Islands, and (vii) any other approvals set forth on Schedule 4.3 of the
Buyer's Disclosure Schedule, no Consent is required to be obtained, made or
given by or with respect to Buyer in connection with the execution and delivery
by Buyer of any of the Transaction Documents to which Buyer is a party, the
performance by Buyer of its obligations under any of such Transaction Documents
or the consummation of the transactions contemplated by the Transaction
Documents, except for such Consents, the failure of which to be made or obtained
would not reasonably be expected to have a Buyer Material Adverse Effect or
which would not interfere in any material way with the ability of Buyer or its
Subsidiaries to consummate the transactions contemplated by the Transaction
Documents."
6. Section 5.9 of the Share Purchase Agreement. Section 5.9 of the Share
Purchase Agreement is amended to read in full as follows:
"5.9 Proxy Statement.
As promptly as practicable following the date of this Agreement, Buyer
shall prepare and file with the SEC the Proxy Statement in accordance with the
Securities Act and the Exchange Act and shall use all reasonable efforts to have
the Proxy Statement cleared by the SEC; provided, however, that prior to filing,
Buyer shall deliver a copy of the proposed filing to Seller and provide Seller
with a reasonable time period in which to review and comment upon such filing,
it being agreed that Buyer will not make any such filing without the prior
consent of
2
Seller, such consent not to be unreasonably withheld. Buyer shall promptly
provide to Seller copies of any written comments received from the SEC and shall
promptly advise Seller of any oral comments received from the SEC. Seller shall
be entitled to review and comment on any proposed amendments to the Proxy
Statement. As promptly as practicable after the Proxy Statement has been cleared
by the SEC, Buyer shall mail the Proxy Statement to its shareholders as of the
record date for the Meeting. Buyer shall take such action as may be required to
be taken under applicable state securities or "blue sky" laws in connection with
issuance of the Shares. The Proxy Statement shall include the recommendation of
Buyer's Board of Directors that shareholders of the Buyer vote in favor of the
Charter Amendment and the other transactions contemplated by this Agreement."
7. Section 6.1(b) of the Share Purchase Agreement. Section 6.1(b) of the
Share Purchase Agreement is amended and restated in its entirety by deleting the
heading and all of the text therein and inserting the phrase "Intentionally left
blank" in its place.
8. Exhibit F of the Share Purchase Agreement. Exhibit F of the Share
Purchase Agreement is amended to read in full as set forth in the attached
Exhibit A to this Amendment.
9. Continued Effect of the Share Purchase Agreement. Except as amended
hereby, the Share Purchase Agreement shall remain in full force and effect.
10. Severability. If at any time any provision of this Amendment is or
becomes illegal, invalid, void or unenforceable in any respect under the law of
any jurisdiction, neither the legality, validity, nor enforceability of the
remaining provisions hereof nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction shall in any way be affected
or impaired thereby, the remainder of the provisions of this Amendment shall
remain in full force and effect. The parties shall endeavor in good faith
negotiations to replace any invalid, illegal, void or unenforceable provision
with a valid, legal and enforceable provision, the economic effect of which
comes as close as possible to the invalid, illegal, void or unenforceable
provision.
11. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS.
12. Waiver of Jury Trial. Each party hereby waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect
of any litigation directly or indirectly arising out of, under or in connection
with this Amendment.
13. Counterparts. This Amendment may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
3
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Amendment as of the date first above written.
SELLER: BUYER:
PACIFIC LIFE INSURANCE COMPANY SCOTTISH ANNUITY & LIFE HOLDINGS,
LTD.
By:/s/ Sharon A. Cheever By:/s/ Scott E. Willkomm
--------------------------- ------------------------------
Sharon A. Cheever Scott E. Willkomm
Vice President, Investment Counsel President
By:/s/ Brian D. Klemens
---------------------------
Brian D. Klemens
Vice President and Treasurer
4
EXHIBIT A
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
Text of the Amendments to the Memorandum of Association
Bracketed bold text indicates text to be deleted upon effectiveness of
amendments. Underlined bold text indicates text to be added upon
effectiveness of amendments.
The following Sections of the Memorandum of Association shall be amended
and restated in their entirety to read as set forth below:
Clause 3(i)(a) of the Memorandum of Association
3. The objects for which the Company is established are, subject to section
(i) of this Clause 3, unrestricted and shall include, but without limitation,
the following:
(i) (a) To own, hold, purchase or otherwise acquire equity or debt
securities in companies, firms or other persons engaged in all or any forms
of insurance or reinsurance business and to promote the establishment of
such entities. [, NOTWITHSTANDING any other provisions of this Memorandum
of Association and of this Clause 3 in particular, the objects for which
the Company is established are restricted to holding shares in one or more
majority-owned subsidiaries, each of which operates as an insurance company
(i) incorporated under the laws of the Cayman Islands, British West Indies,
(ii) regulated as such by the government of the Cayman Islands and (iii)
engaged primarily and predominantly in the writing of insurance agreements
of the type specified in section 3(a)(8) of the United States Securities
Act of 1933, as amended (except for the substitution of supervision by
Cayman Islands insurance regulators for the regulators referred to in that
section), or the reinsurance of risks on such agreements underwritten by
insurance companies.]
Clause 4 of the Memorandum of Association
4. Except as prohibited or limited by the Companies Law [1998 Revision]
(2001 Second Revision), the Company shall have full power and authority to carry
- ----------------------
out any object and shall have and be capable of, from time to time and at all
times, exercising any and all of the powers at any time or from time to time
exercisable by a natural person or body corporate in doing in any part of the
world whether as principal, agent, contractor or otherwise whatever may be
considered by it necessary for the attainment of its objects and whatever else
may be considered by it as incidental or conducive thereto or consequential
thereon, including, but without in any way restricting the generality of the
foregoing, the power to make any alterations or amendments to this Memorandum of
Association and the Articles of Association of the Company considered necessary
or convenient in the manner set out in the Articles of Association of the
Company, and the power to do any of the following acts or things, viz:
to pay all expenses of and incidental to the promotion, formation and
incorporation of the Company; to register the Company to do business in any
other jurisdiction; to sell, lease or dispose of any property of the Company; to
draw, make, accept, endorse, discount, execute and issue promissory notes,
debentures, bills of exchange, bills of lading, warrants and other negotiable or
transferable instruments; to lend money or other assets and to acts as
guarantors; to borrow or raise money on the security of the undertaking or
transferable instruments; to lend money or other assets and to act as
guarantors; to borrow or raise money on the security of the undertaking or on
all or any of the assets of the Company including uncalled capital or without
security; to invest monies of the Company in such manner as the Directors
determine; to promote other companies; to sell the undertaking of the Company
for cash or any other consideration; to distribute assets in specie to Members
of the Company; to make charitable or benevolent donations; to pay pensions or
gratuities or provide other benefits in cash or kind to Directors, officers,
employees, past or present and their families; to purchase Directors and
officers liability insurance and to carry on any trade or business and generally
to do all acts and things which, in the opinion of the Company or the Directors,
may be
5
conveniently or profitably or usefully acquired and dealt with, carried on,
executed or done by the Company in connection with the business aforesaid.
[PROVIDED THAT the Company shall only carry on the businesses permitted in
accordance with section (i) of Clause 3 of this Memorandum of Association and
for which a license is required under the laws of the Cayman Islands when so
licensed under the terms of such laws.]
6
EXHIBIT A
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
Text of the Amendments to Articles of Association
Bracketed bold text indicates text to be deleted upon effectiveness of
amendments.
Underlined bold text indicates text to be added upon effectiveness of
amendments.
The following Sections of the Articles of Association shall be amended and
restated in their entirety to read as set forth below:
6. (b) Notwithstanding Article 6(a) of these Articles, the Company shall not
issue any shares in a manner that the Board of Directors of the Company believes
would cause, by reason of such issuance, the total Controlled Shares of any
Person to equal or exceed 10% of a class of the Company's shares; provided,
however, that this provision shall not apply to (i) the issuance of shares to
-----------------------------
Pacific Life Insurance Company in such amount so that Pacific Life Insurance
- ----------------------------------------------------------------------------
Company's Controlled Shares do not exceed 24.9% of a class of the Company's
- ---------------------------------------------------------------------------
shares and (ii) any issuance of shares to a person acting as an underwriter in
- ---------------
the ordinary course of its business, purchasing such shares pursuant to a
purchase agreement to which the company is a party, for resale.
9. (b) Except with respect to transfers of the Company's shares executed on the
NASDAQ National Market, the Directors shall decline to register a transfer of
shares if the Directors have reason to believe that the effect of such transfer
would be to increase the number of total Controlled Shares of any Person to ten
percent (10%) or any higher percentage of a class of the Company's shares on an
Unadjusted Basis. Notwithstanding the foregoing, Pacific Life Insurance Company,
--------------------------------------------------------------
Pacific Mutual Holding Company, Pacific LifeCorp and/or any direct or indirect
- ------------------------------------------------------------------------------
wholly-owned subsidiary of Pacific Mutual Holding Company (each, a "Pacific Life
- --------------------------------------------------------------------------------
Entity", provided however, that any Pacific Life Entity shall cease to be a
- --------------------------------------------------------------------------------
Pacific Life Entity in the event it is no longer a 100% direct or indirect
- --------------------------------------------------------------------------
subsidiary of Pacific Mutual Holding Company), shall each be permitted to
- -------------------------------------------------------------------------
transfer shares of the Company to another Pacific Life Entity, provided that the
- --------------------------------------------------------------------------------
Controlled Shares of the Pacific Life Entities in the aggregate do not exceed
- -----------------------------------------------------------------------------
24.9% of a class of the Company's shares.
- -----------------------------------------
47. (a) Subject to Article 6, every Member of record present in person or by
proxy shall have one vote for each issued and outstanding Ordinary Share
registered in his name in the register; PROVIDED THAT, subject to the following
provisions of this Article 47, if and for so long as the number of Controlled
Shares of any Person other than a Pacific Life Entity would constitute 10% or
--------------------------------
more of the total combined voting rights attaching to the issued shares of the
------
Company (calculated after giving effect to any prior reductions in voting rights
- --------------------------------------------------------------------------------
attaching to Controlled Shares of other persons as provided in this Article
- ---------------------------------------------------------------------------
47), or the total number of Controlled Shares of the Pacific Life Entities'
- ---------------------------------------------------------------------------
would constitute 25% or more of the total combined voting rights attaching to
- -----------------------------------------------------------------------------
the issued shares of the Company (calculated after giving effect to any prior
- -----------------
reductions in voting rights attaching to Controlled Shares of other persons as
provided in this Article 47), each such issued controlled Share, regardless of
the identity of the registered holder thereof, shall confer only a fraction of a
vote as determined by the following formula (the "Formula"):
(T-C)/([9.1]XxC)
-
Where: "T" is the aggregate number of votes conferred by all the issued
shares immediately prior to that application of the Formula adjusted
to take into account any prior reduction taken with respect to any
other Member pursuant to Article 47(d) as at the same date;
"C" is the number of issued Controlled Shares attributable to such
Person; and
"X" is (i) 9.1 if such Person is any Person other than a Pacific Life
---------------------------------------------------------------------
Entity or (ii) 3.016 if the Formula is being applied to determine the
---------------------------------------------------------------------
reduction in total combined voting rights attributable to the total
-------------------------------------------------------------------
number of Controlled Shares of the Pacific Life Entities.
---------------------------------------------------------
7
47. (d) The Formula shall be applied successively as many times as may be
necessary to ensure that no Person other than a Pacific Life Entity shall be a
--------------------------------
10% Shareholder at any time, and that the total combined voting rights attached
--------------------------------------------------
to the Controlled Shares of the Pacific Life Entities shall not exceed 24.9% at
- -------------------------------------------------------------------------------
any time. For the purposes of determining the votes exercisable by Members as at
- --------
any date, the Formula shall be applied first to the votes of Controlled Shares
attributable to the Person to whom the greatest number of Controlled Shares are
attributed and successively to the Controlled Shares attributable to them, in
each case calculations being made on the basis of the aggregate number of votes
conferred by the issued shares as at such date as reduced by the application of
the Formula to any larger number of Controlled Shares as at such date.
47. (e) Notwithstanding the provisions of Articles 47(a) and (d) above, having
applied the provisions thereof as best as they consider reasonably practicable,
the Directors may make such final adjustments to the aggregate number of votes
attaching to the shares of any Member that they consider fair and reasonable in
all the circumstances to ensure that no Person other than a Pacific Life Entity
--------------------------------
shall be a 10% Shareholder at any time, and that the voting rights attached to
--------------------------------------
the Controlled Shares of the Pacific Life Entities shall not exceed 24.9 % at
- -----------------------------------------------------------------------------
any time.
- --------
89. (b) If the Company redeems or purchases shares or directs the sale and
transfer of such shares pursuant to this Article 89, it shall do so only in a
manner the Board believes would not result, upon consummation of such redemption
or purchase, in the total number of Controlled Shares of any Person other than
----- ----------
a Pacific Life Entity, increasing to ten percent (10%) or any higher percentage
- ---------------------
of a class of the Company's shares on an Unadjusted Basis or the total number of
----------------------
Controlled Shares of the Pacific Life Entities increasing to twenty-five percent
- --------------------------------------------------------------------------------
(25%) or any higher percentage of a class of the Company's shares on a
- ----------------------------------------------------------------------
Unadjusted Basis.
- ----------------
8