REGISTRATION RIGHTS AGREEMENT
between
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
and
PACIFIC LIFE INSURANCE COMPANY
Dated as of December 31, 2001
TABLE OF CONTENTS
Section 1. Definitions.....................................................1
Section 2. Demand Registrations............................................3
Section 3. Piggyback Registrations.........................................5
Section 4. Hold-Back Agreements............................................6
Section 5. Registration Procedures.........................................7
Section 6. Registration Expenses..........................................11
Section 7. Indemnification................................................11
Section 8. Rules l44 and 144A.............................................13
Section 9. Underwritten Registrations.....................................14
Section 10. Covenants of Stockholder.......................................14
Section 11. Miscellaneous..................................................14
i
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of December
31, 2001, is entered into between Pacific Life Insurance Company, a California
corporation ("Stockholder") and Scottish Annuity & Life Holdings, Ltd., a Cayman
Islands corporation (the "Company").
WHEREAS, the Company has entered into a Share Purchase Agreement with
Stockholder, dated August 6, 2001, as amended (the "Share Purchase Agreement"),
pursuant to which and in connection with the transactions contemplated thereby,
Stockholder will acquire beneficial ownership of the Shares;
WHEREAS, the parties each desire to make certain covenants and agreements
concerning, among other things, the registration from time to time of the Shares
under the Securities Act of 1933, as amended (the "Securities Act"); and
WHEREAS, concurrent with the execution and delivery hereof, Stockholder and
the Company have entered into an agreement with respect to Stockholder's
investment in the Company (the "Stockholder Agreement").
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein, the
Company and Stockholder hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the meanings set
forth below:
"Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"Company Shares" means the ordinary shares, par value US $.01 per share, of
the Company.
"Delay Period" has the meaning set forth in Section 2(d) of this Agreement.
"Demand Notice" has the meaning set forth in Section 2(a) of this
Agreement.
"Demand Registration" has the meaning set forth in Section 2(b) of this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder.
"Interruption Period" has the meaning set forth in Section 5(o) of this
Agreement.
"list" means the listing of any securities on any stock exchange, quotation
system or other securities market in Europe, the United States or elsewhere.
"Losses" has the meaning set forth in Section 7(a) of this Agreement.
"Misstatement/Omission" has the meaning set forth in Section 7(a) of this
Agreement.
"Other Security Holders" has the meaning set forth in Section 2(c) of this
Agreement.
"Pacific LifeCorp" means Pacific LifeCorp, a Delaware corporation domiciled
in California that is the wholly-owned subsidiary of PMHC and the direct parent
corporation of Stockholder.
"Pacific Life Entity" means (a) PMHC, (b) Pacific LifeCorp and/or (c) any
direct or indirect wholly-owned subsidiary of PMHC.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"Piggyback Registration" has the meaning set forth in Section 3(a) of this
Agreement.
"PMHC" shall mean Pacific Mutual Holding Company, a California mutual
holding company, which is the indirect parent corporation of Pacific Life
Insurance Company.
"qualify" means the qualification of any securities for sale, or of any
offering document in relation thereto, with any securities regulatory authority.
"register" means the preparation and filing of a Registration Statement in
compliance with the Securities Act and the declaration or ordering by the
Commission of the effectiveness of such Registration Statement.
"Registrable Securities" means (i) the Shares, (ii) any Company Shares
issued or issuable with respect to the Shares by way of stock dividends or stock
splits or in connection with a combination of shares, recapitalization, merger,
consolidation, or other reorganization or otherwise and (iii) any depositary
shares or depositary receipts representing or evidencing the Shares referred to
in (i) and (ii) hereof. As to any particular Registrable Securities, such
securities will cease to be Registrable Securities when (i) they have been
distributed to the public pursuant to an offering registered under the
Securities Act, (ii) they have been distributed to the public pursuant to Rule
144 (or any successor provision) under the Securities Act or (iii) they are
eligible for immediate sale pursuant to Rule 144(k) under the Securities Act.
"Registration Statement" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related prospectus
and any information deemed to be a part of such prospectus pursuant to Rule 430A
under the Securities Act, all amendments and supplements to such registration
statement or prospectus, including pre-and post-effective amendments (including
any registration statement filed pursuant to Rule 462(b) under the Securities
Act), all exhibits thereto and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
promulgated thereunder.
"Shares" means the Company Shares acquired by Stockholder pursuant to and
in connection with the Share Purchase Agreement and any other Shares acquired by
Stockholder other than in violation of the Stockholder Agreement.
"Stockholder" means Pacific Life Insurance Company and any of its
affiliates that hold Company Shares.
Unless otherwise stated, capitalized terms used but not defined herein have
the meanings set forth in the Share Purchase Agreement.
Section 2. Demand Registrations.
(a) Demand Registration. At any time following the Closing Date,
Stockholder shall have the right to require the Company to file a Registration
Statement in respect of all or a portion of the Registrable Securities (a
"Demand Registration"), by delivering to the Company written notice stating that
such right is being exercised, specifying the number of the Registrable
Securities to be included in such registration and describing the intended
method of distribution thereof (a "Demand Notice"); provided, however, that the
Company shall not be required to file a Registration Statement unless the total
aggregate value of the Registrable Securities, as of the date of the Demand
Notice, proposed to be registered by Stockholder pursuant to such Registration
Statement shall exceed US$ five (5) million. As promptly as practicable, but in
no event later than forty-five (45) days after the Company receives a Demand
Notice, the Company shall file with the Commission and thereafter use
commercially reasonable efforts to cause to be declared effective promptly a
Registration Statement (including, without limitation, by means of a shelf
registration pursuant to Rule 415 under the Securities Act if the Company is
then eligible to use such a registration) (a "Demand Registration") providing
for the registration of such number of Registerable Securities Stockholder shall
have demanded be registered for distribution in accordance with such intended
method of distribution.
(b) Number of Demand Registrations. Stockholder shall be entitled to
request an aggregate of three (3) Demand Registrations pursuant to this Section
2; provided, however, that Stockholder shall not be entitled to request more
than one (1) Demand Registration during any 12-month period. A registration
shall not count as one of the permitted Demand Registrations (i) unless it has
been declared or ordered effective and (ii) unless Stockholder is able to
register and sell at least 50% of the Registrable Securities requested by
Stockholder to be included in such registration.
(c) Shelf Registrations. Notwithstanding anything to the contrary in this
Section 2, if the Company is eligible to register the Registerable Securities on
Form S-3 (or F-3), Stockholder shall have the right to require up to two (2)
such registrations per calendar year, each of which registrations shall be a
"Demand Registration" for all purposes of this Agreement, except that such
registrations shall not count as one or more of the three (3) Demand
Registrations that the Company is required to effect pursuant to Section 2(b).
Subject to paragraph (f) below, the Company may include in such registration
other securities for sale for its own account or for the account of any other
holders of the securities of the Company ("Other Security Holders").
(d) Effectiveness of Registration Statements. Subject to Section 2(e), upon
the occurrence of any event that would cause the Registration Statement (i) to
contain a material misstatement or omission or (ii) to be not effective and
usable for resale of Registrable Securities during the period that such
Registration Statement is required to be effective and usable, the Company shall
file an amendment to the Registration Statement as soon as reasonably
practicable, in the case of clause (i), correcting any such misstatement or
omission and, in the case of either clause (i) or (ii), use commercially
reasonable efforts to cause such amendment to be declared effective and such
Registration Statement to become usable as soon as reasonably practicable
thereafter. The Company agrees to use commercially reasonable efforts to keep
any Registration Statement filed pursuant to this Section 2 continuously
effective and usable for the sale of Registrable Securities (i) until 180 days
from the date on which the Commission declares such Registration Statement
effective or (ii) until all the Registrable Securities covered by such
Registration Statement have been sold pursuant to such Registration Statement,
if earlier, in either case as such period may be extended pursuant to this
Section 2.
(e) Restrictions on Demand Registrations. The Company shall have the right
to delay the filing of any Registration Statement otherwise required to be
prepared and filed by the Company pursuant to this Section 2, or to suspend the
use of any Registration Statement, for such period as set forth below (a "Delay
Period"), if:
(i) the Board of Directors of the Company determines that, in the
Board of Director's reasonable judgment and good faith, the registration
and distribution of the Registrable Securities covered or to be covered by
such Registration Statement would materially interfere with any pending
financing, acquisition, reorganization or other material transaction
involving the Company or any of its subsidiaries or would require
disclosure of any other material corporate development that the Company is
not otherwise required or prepared to disclose, for a period not in excess
of 90 days; provided, however, that the Company may not exercise this right
more than twice in any 12 month period; or
(ii) the Demand Registration would require that the Company prepare
audited financial statements as of a date other than its fiscal year end
(unless Stockholder agrees to pay the expenses of such an audit), until
such time as year-end audited financial statements become available.
(f) The Company will promptly give Stockholder written notice of such
determination and an approximation of the period of the anticipated delay.
Stockholder agrees to cease all public disposition efforts under such
Registration Statement with respect to Registrable Securities immediately upon
receipt of notice of the beginning of any Delay Period. The Company shall
provide written notice to Stockholder of the end of each Delay Period. The time
period for which the Company is required to maintain the effectiveness of a
Registration Statement referred to in Section 2(d) hereto shall be extended by
the aggregate number of days of all Delay Periods and Interruption Periods
affecting such Registration.
(g) Other Registration Rights. The Company shall not enter into any
agreement granting any Other Security Holder piggyback rights to include such
Other Security Holder's securities in any registration in which Stockholder has
the right to include Registrable Securities on a priority basis more favorable
to such Other Security Holder than is provided to Stockholder pursuant to
Section 3(b).
(h) Withdrawal of Demand Notice. In connection with a Demand Notice
delivered by Stockholder pursuant to this Section 2, Stockholder may, at any
time prior to the effective date of the Registration Statement in respect
thereof, withdraw such Demand Notice by providing written notice to Company to
such effect; provided, however, that no such withdrawn Demand Notice shall be
deemed to have been a Demand Registration if such Demand Notice is withdrawn
prior to the filing by the Company of a Registration Statement pursuant thereto
or if Stockholder elects to bear all expenses associated with such withdrawn
Demand Notice and the Registration Statement pursuant thereto.
(i) Preemption of Demand Registration. Notwithstanding anything to the
contrary contained herein, after receiving a written request for a Demand
Registration, the Company may elect to effect an underwritten primary
registration in lieu of the Demand Registration if the Company's Board of
Directors believes that such primary registration would be in the best interests
of the Company. If the Company so elects to effect a primary registration, the
Company shall give prompt written notice (which shall be given not later than
thirty (30) days after the date of the Demand Notice) to Stockholder of its
intention to effect such a registration and shall afford Stockholder the rights
contained in Section 3 with respect to Piggyback Registrations. In the event
that the Company so elects to effect a primary registration after receiving a
request for a Demand Registration, the Company shall use commercially reasonable
efforts to have the Registration Statement declared effective by the Commission
as soon as reasonably practicable. In addition, the request for a Demand
Registration shall be deemed to have been withdrawn and such primary
registration shall not be deemed to be a Demand Registration.
Section 3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register any of
its equity securities (other than Registrable Securities) under the Securities
Act (other than a registration statement on Form S-4 (or F-4) or S-8 (or F-8)(or
any successor forms to such Forms), whether or not for sale for its own account,
the Company will give prompt written notice of such proposed filing to
Stockholder at least thirty (30) days before the anticipated filing date. Such
notice shall offer Stockholder the opportunity to register such amount of
Registrable Securities as it shall request (a "Piggyback Registration"). Subject
to Sections 3(b) and 3(c) hereof, the Company shall include in each such
Piggyback Registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within fifteen (15)
days after such notice has been given by Stockholder to the Company. If the
Registration Statement relating to the Piggyback Registration is to cover an
underwritten offering, such Registrable Securities shall be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters. Stockholder shall be permitted to withdraw all or
part of the Registrable Securities from a Piggyback Registration at any time
prior to the effective time of such Piggyback Registration.
(b) Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company by or through one or
more underwriters of recognized standing and the lead underwriters advise the
Company that, in their good faith judgment, the number of securities requested
to be included in such registration exceeds the number which can be sold in such
offering without materially and adversely affecting the marketability of the
offering, then the Company will include in the Registration Statement relating
to such registration (i) first, the securities the Company proposes to sell, and
(ii) second, the Registrable Securities requested to be included in such
registration by Stockholder and the securities requested to be included in such
registration by Other Security Holders, reduced, in each case, on a pro rata
basis, based on the amount of Registrable Securities owned by Stockholder or the
securities owned by each such Other Security Holder.
(c) Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of Other Security Holders by or
through one or more underwriters of recognized standing and the lead
underwriters advise the Company that, in their good faith judgment, the number
of securities requested to be included in such registration exceeds the number
which can be sold in such offering without materially and adversely affecting
the marketability of the offering, the Company will include in such registration
the securities owned by such Other Security Holders and the Registrable
Securities requested to be included in such registration by Stockholder,
reduced, in each case, on a pro rata basis, based on the amount of Registrable
Securities owned by Stockholder or the securities owned by each such Other
Security Holder.
Section 4. Hold-Back Agreements.
(a) Company Hold-Back. The Company agrees (i) if so required by the lead
underwriters of an underwritten offering effected pursuant to a Registration
Statement under Section 2 or 3 hereof, not to effect any public or private sale
or distribution of securities of the same type (including any underlying
securities) as the Registrable Securities included in such underwritten
registration, or any securities convertible into or exchangeable or exercisable
for such securities, during the ten (10) days prior to the pricing of such
offering and until the earlier of (A) the end of the 120-day period beginning on
the date of pricing of such offering (except as part of such underwritten
offering and except pursuant to registrations on Form S-4 (or F-4) or Form S-8
(or F-8) (or any successor forms to such Forms)), unless the lead underwriters
for such offering otherwise agree, and (B) the abandonment of such offering, and
(ii) to use commercially reasonable efforts to cause each holder of securities
of the same type as the securities included in such underwritten offering, or
any securities convertible into or exchangeable or exercisable for such
securities, in each case purchased from the Company at any time after the date
of this Agreement (other than in a registered public offering), to agree not to
effect any public or private sale or distribution or otherwise dispose
(including sales pursuant to Rule 144 under the Securities Act) of any such
securities during such period (except as part of such underwritten registration,
if otherwise permitted), unless the lead underwriters for such offering
otherwise agree.
(b) Stockholder Hold-Back. If the Company registers securities of the
Company in connection with an underwritten public offering of Company Shares
solely by the Company, Stockholder, if so requested by the lead underwriters of
such underwritten offering, agrees not to effect any public sale or distribution
of any of the Registrable Securities, including any sale pursuant to Rule 144
under the Securities Act (other than as a part of such underwritten public
offering) without the consent of the Company or such lead underwriters during
the period commencing on a date specified by the lead underwriters, such date
not to exceed ten (10) days prior to the effective date of such Registration
Statement, and ending on the earlier of (A) 120 days after the pricing of such
offering, (B) the abandonment of such offering and (C) the first date on which
the Company or any affiliate or executive officer of the Company is permitted to
sell Company Shares.
Section 5. Registration Procedures.
Whenever the Company is required to register Registrable Securities
pursuant to Section 2 or 3 hereof, the Company will use commercially reasonable
efforts to effect the registration to permit the sale of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Company will as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities as prescribed by Section 2 or 3 on a form
available for the sale of the Registrable Securities by Stockholder in
accordance with the intended method or methods of distribution thereof and use
commercially reasonable efforts to cause each such Registration Statement to
become and remain effective within the time periods and otherwise as provided
herein;
(b) prepare and file with the Commission such amendments, (including
post-effective amendments) to the Registration Statement and such supplements to
the prospectus as may be necessary to keep such Registration Statement effective
and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement until such
time as all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such Registration Statement;
(c) furnish to Stockholder and to each underwriter, if any, such number of
copies of such Registration Statement, each amendment and post-effective
amendment thereto, the prospectus included in such Registration Statement
(including each preliminary prospectus and any supplement to such prospectus and
any other prospectus filed under Rule 424 of the Securities Act), in each case
including all exhibits, and such other documents as Stockholder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by Stockholder or to be disposed of by such underwriter (the Company
hereby consenting to the use in accordance with all applicable law of each such
Registration Statement (or amendment or post-effective amendment thereto) and
each such prospectus (or preliminary prospectus or supplement thereto) by
Stockholder and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such Registration Statement or
prospectus);
(d) use commercially reasonable efforts to register or qualify and, if
applicable, to cooperate with Stockholder, the underwriters, if any, and their
respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of, the Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions as the Stockholder or lead underwriters (if any) shall reasonably
request, to keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the applicable Registration Statement; provided, however,
that the Company will not be required (i) to qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this paragraph or (ii) to consent to general service of process or taxation in
any such jurisdiction where it is not so subject;
(e) use commercially reasonable efforts to cause all such Registrable
Securities to be listed on each securities exchange on which securities of the
same class as the Registrable Securities are then listed and, if not so listed,
to be listed on NASDAQ or a national securities exchange selected by the
Company;
(f) provide a transfer agent and registrar for all such Registrable
Securities and a CUSIP number or other recognized securities identification
number for all such Registrable Securities not later than the effective date of
such Registration Statement;
(g) comply with all applicable rules and regulations of the Commission, and
make available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (or in each case within such extended
period of time as may be permitted by the Commission for filing the applicable
report with the Commission) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in an underwritten
offering or (ii) if not sold to underwriters in such an offering, commencing on
the first day of the first fiscal quarter of the Company after the effective
date of a Registration Statement, which earnings statement shall cover said
12-month period;
(h) use commercially reasonable efforts to prevent the issuance of any
order suspending the effectiveness of a Registration Statement or suspending the
qualification (or exemption from qualification) of any of the Registrable
Securities included therein for sale in any jurisdiction, and, in the event of
the issuance of any stop order suspending the effectiveness of a Registration
Statement, or of any order suspending the qualification of any Registrable
Securities included in such Registration Statement for sale in any jurisdiction,
the Company will use commercially reasonable efforts promptly to obtain the
withdrawal of such order at the earliest possible moment;
(i) obtain "cold comfort" letters and updates thereof (which letters and
updates (in form, scope and substance) shall be reasonably satisfactory to the
lead underwriters, if any, and Stockholder) from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements and financial data are,
or are required to be, included in the Registration Statement), addressed to
each of the underwriters, if any, and Stockholder, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings and such other
matters as the lead underwriters, if any, or Stockholder may reasonably request;
(j) obtain opinions of independent counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the lead underwriters, if any, and Stockholder),
addressed to Stockholder and each of the underwriters, if any, covering the
matters customarily covered in opinions of issuer's counsel requested in
underwritten offerings, such as the effectiveness of the Registration Statement
and such other matters as may be requested by such counsel and lead
underwriters, if any;
(k) promptly notify Stockholder and the lead underwriters, if any, and
confirm such notice in writing,
(i) when a prospectus or any supplement or post-effective amendment to
such prospectus has been filed and, with respect to a Registration
Statement or any post-effective amendment thereto, when the same has become
effective,
(ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration
Statement or related prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of any prospectus or the initiation of any proceedings
by any Person for that purpose,
(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Securities for offer or
sale under the securities or blue sky laws of any jurisdiction, or the
contemplation, initiation or threatening of any proceeding for such
purpose, and
(v) of the happening of any event or the existence of any facts that
make any statement made in such Registration Statement or prospectus untrue
in any material respect or that require the making of any changes in such
Registration Statement or prospectus so that it will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made (in the case of any
prospectus), not misleading (which notice shall be accompanied by an
instruction to Stockholder and the lead underwriters, if any, to suspend
the use of the prospectus until the requisite changes have been made);
(l) if requested by the lead underwriters, if any, or Stockholder, promptly
incorporate in a prospectus, supplement or post-effective amendment such
information as the lead underwriters, if any, and Stockholder reasonably request
to be included therein relating to the sale of the Registrable Securities,
including, without limitation, information with respect to the number of shares
of Registrable Securities being sold to the underwriters, the purchase price
being paid therefor by such underwriters and with respect to any other terms of
the underwritten offering of the Registrable Securities to be sold in such
offering, and make all required filings of such prospectus, supplement or
post-effective amendment promptly following notification of the matters to be
incorporated in such supplement or post-effective amendment;
(m) furnish to Stockholder and the lead underwriters, without charge, at
least one signed copy of the Registration Statement;
(n) as promptly as practicable upon the occurrence of any event
contemplated by clause 5(k)(v) above, prepare a supplement or post-effective
amendment to the Registration Statement or the prospectus, or any document
incorporated therein by reference, or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities being
sold hereunder, the prospectus will not contain an untrue statement of a
material fact or an omission to state a material fact required to be stated in a
Registration Statement or prospectus or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and
(o) if such offering is an underwritten offering, enter into such
agreements (including an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other appropriate and
reasonable actions requested by Stockholder or by the lead underwriters
(including cooperating in reasonable marketing efforts, including participation
by the senior executives of the Company in any "roadshow" or similar meeting
with potential investors) in order to expedite or facilitate the disposition of
such Registrable Securities and, in connection therewith, provide
indemnification provisions and procedures substantially to the effect set forth
in Section 7 hereof with respect to all parties to be indemnified pursuant to
said Section. The above shall be done at each closing under such underwriting or
similar agreement, or as and to the extent required thereunder.
Stockholder agrees that, upon receipt of written notice from the Company of
the happening of any event of the kind described in Section 5(k)(iii), (iv) or
(v), Stockholder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement until Stockholder's receipt of
the copies of the supplemented or amended Registration Statement contemplated by
Section 5(n), or until it is advised in writing by the Company that the use of
the applicable prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such prospectus (such period during which
disposition is discontinued being an "Interruption Period"), and, if so directed
by the Company, Stockholder will deliver to the Company all copies of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice.
Section 6. Registration Expenses.
(a) Expenses Generally. The Company shall bear all expenses incurred in
connection with the registration or attempted registration of the Registrable
Securities pursuant to Sections 2 and 3 of this Agreement as provided herein.
Such expenses shall include, without limitation, all printing, legal and
accounting expenses incurred by the Company or Stockholder and all registration
and filing fees imposed by the Commission, any state securities commission or
the principal national securities exchange or national market system on which
the Shares are then traded or quoted. Notwithstanding the foregoing sentence,
Stockholder shall be responsible for any brokerage or underwriting commissions
and taxes of any kind (including, without limitation, transfer taxes) with
respect to any disposition, sale or transfer of Registrable Securities.
(b) Withdrawal of Registration Statement. The obligation of the Company to
bear the expenses described in Section 6(a) shall apply irrespective of whether
a registration, once properly demanded, if applicable, becomes effective, is
withdrawn or suspended or is converted to another form of registration,
irrespective of when any of the foregoing shall occur; provided, however, that
the expenses described in Section 6(a) related to any Registration Statement
withdrawn solely at the request of Stockholder or any supplements or amendments
to a Registration Statement resulting from a Misstatement/Omission by
Stockholder shall be borne solely by Stockholder.
Section 7. Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify, to the
fullest extent permitted by law, Stockholder, each affiliate of Stockholder and
each officer, director, employee, counsel, agent or representative of
Stockholder and its affiliates and each Person who controls any such Person
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) against, and hold it and them harmless from, all losses,
claims, damages, liabilities, costs (including, without limitation, costs of
preparation and attorneys' fees and disbursements) and expenses, including
expenses of investigation (collectively, "Losses") arising out of, caused by or
based upon any untrue or alleged untrue statement of material fact contained in
any Registration Statement, or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading (a "Misstatement/Omission"), or any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law, or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law; provided, however, that the
Company shall not be liable insofar as such Misstatement/Omission or violation
is made in reliance upon and in conformity with information furnished in writing
to the Company by Stockholder expressly for use therein. In connection with an
underwritten offering, the Company will indemnify such underwriters, their
officers and directors and each Person who controls such underwriters (within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act) to the same extent as provided above with respect to the
indemnification of Stockholder. This indemnity shall be in addition to any other
indemnification arrangements to which Company may otherwise be party.
(b) Indemnification by Stockholder. In connection with any Registration
Statement in which Stockholder is participating, Stockholder agrees to
indemnify, to the fullest extent permitted by law, the Company and each
affiliate, employee, counsel, agent, representative, director or officer of the
Company and each Person who controls the Company (within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act) against, and
hold it harmless from, any Losses arising out of or based upon any
Misstatement/Omission contained in the Registration Statement, if and to the
extent that such Misstatement/Omission arose out of or was based upon
information furnished in writing by Stockholder for use therein. The obligation
of Stockholder to indemnify will be limited to the net amount of proceeds (net
of payment of all expenses) received by Stockholder from the sale of Registrable
Securities pursuant to such Registration Statement giving rise to such
indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any action, claim or
proceeding shall be brought against any Person entitled to indemnification
hereunder, such indemnified party shall promptly notify each indemnifying party
in writing, and such indemnifying party shall assume the defense thereof
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses incurred in connection with the
defense thereof. The failure to so notify such indemnifying party shall not
affect any obligation it may have to any indemnified party under this Agreement
or otherwise except to the extent that (as finally determined by a court of
competent jurisdiction (which determination is not subject to review or appeal))
such failure materially prejudiced such indemnifying party. Each indemnified
party shall have the right to employ separate counsel in such action, claim or
proceeding and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of each indemnified party unless: (i) such
indemnifying party has agreed to pay such expenses; (ii) such indemnifying party
has failed promptly to assume the defense and employ counsel reasonably
satisfactory to such indemnified party; or (iii) the named parties to any such
action, claim or proceeding (including any impleaded parties) include both such
indemnified party and such indemnifying party or an affiliate or controlling
person of such indemnifying party, and such indemnified party shall have been
advised by counsel that either (x) there may be one or more legal defenses
available to it which are different from or in addition to those available to
such indemnifying party or such affiliate or controlling person or (y) a
conflict of interest may exist if such counsel represents such indemnified party
and such indemnifying party or its affiliate or controlling person; provided,
however, that such indemnifying party shall not, in connection with any one such
action or proceeding, or separate but substantially similar or related actions
or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be responsible hereunder for the fees and expenses
of more than one separate firm of attorneys (in addition to any local counsel),
which counsel shall be designated by such indemnified party.
No indemnified party shall be liable for any settlement effected without
its written consent. Each indemnifying party agrees, jointly and severally, that
it will not, without the indemnified party's prior written consent, consent to
entry of any judgment or settle or compromise any pending or threatened claim,
action or proceeding in respect of which indemnification or contribution may be
sought hereunder unless the foregoing contains an unconditional release, in form
and substance reasonably satisfactory to the indemnified parties, of the
indemnified parties from all liability and obligation arising therefrom. The
indemnifying party's liability to any such indemnified party hereunder shall not
be extinguished solely because any other indemnified party is not entitled to
indemnity hereunder.
(d) Survival. The indemnification provided for under this Agreement will
(i) remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party, (ii) survive the transfer of securities and
(iii) survive the termination of this Agreement.
(e) Right to Contribution. If the indemnification provided for in this
Section 7 is unavailable to, or insufficient to hold harmless, an indemnified
party under Section 7(a) or Section 7(b) above in respect of any Losses referred
to in such Sections, then each applicable indemnifying party shall have an
obligation to contribute to the amount paid or payable by such indemnified party
as a result of such Losses in such proportion as is appropriate to reflect the
relative fault of the Company, on the one hand, and of Stockholder, on the
other, in connection with the Misstatement/Omission which resulted in such
Losses, taking into account any other relevant equitable considerations. The
amount paid or payable by a party as a result of the Losses referred to above
shall be deemed to include, subject to the limitations set forth in Section 7(c)
above, any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation, lawsuit or legal or administrative action or
proceeding.
The relative fault of the Company, on the one hand, and of Stockholder, on
the other, shall be determined by reference to, among other things, whether the
relevant Misstatement/Omission relates to information supplied by the Company or
by Stockholder and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such Misstatement/Omission.
The Company and Stockholder agree that it would not be just and equitable
if contribution pursuant to this Section 7(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7(e), Stockholder shall not be required to contribute any amount
in excess of the amount by which (i) the amount (net of payment of all expenses)
at which the securities that were sold by Stockholder and distributed to the
public were offered to the public exceeds (ii) the amount of any damages which
Stockholder has otherwise been required to pay by reason of such
Misstatement/Omission.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
Section 8. Rules l44 and 144A.
The Company shall timely file the reports required to be filed by it under
the Securities Act and the Exchange Act (including but not limited to the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act)
and the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of
Stockholder, make publicly available other information) and will take such
further action as Stockholder may reasonably request, all to the extent required
from time to time to enable Stockholder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 and Rule 144A under the Securities Act, as such Rules
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the Commission.
Section 9. Underwritten Registrations.
In the case of any underwritten offering pursuant to a Demand Registration
under Section 2 hereof, the lead underwriters thereof shall be selected by
Stockholder and shall be reasonably satisfactory to the Company.
Section 10. Covenants of Stockholder.
Stockholder hereby agrees (a) to cooperate with the Company and to furnish
to the Company all such information in connection with the preparation of any
Registration Statement and any filings with any state securities commissions as
the Company may reasonably request, (b) to the extent required by the Securities
Act, to deliver or cause delivery of the prospectus contained in any
Registration Statement, and any amendment or supplement thereto, to any
purchaser from such Stockholder of the Registrable Securities covered by the
Registration Statement and (c) to notify the Company within ten days after any
sale of Registrable Securities by Stockholder.
Section 11. Miscellaneous.
(a) Consent to Jurisdiction and Service of Process. Any legal action, suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby may be instituted in any United States Federal court located
in the Southern District of New York, State of New York, and each party hereto
agrees not to assert as a defense in any such action, suit or proceeding, any
claim that it is not subject personally to the jurisdiction of such court, that
its property is exempt or immune from attachment or execution, that the action,
suit or proceeding is brought in an inconvenient forum, that the venue of the
action, suit or proceeding is improper or that this Agreement or the subject
matter hereof may not be enforced in or by such court. Each party further
irrevocably submits to the jurisdiction of such court in any such action, suit
or proceeding. The Company and its subsidiaries hereby appoint CT Corporation
System of New York as their authorized agent to accept and acknowledge on such
parties' behalf service of any and all process that may be served in any such
action suit or proceeding. Any and all service of process and any other notice
in any such action, suit or proceeding shall be effective against any party if
given properly pursuant to the United States Federal Rules of Civil Procedure or
other applicable rules. Nothing herein contained shall be deemed to affect the
right of any party to serve process in any manner permitted by law or to
commence legal proceedings or otherwise proceed against any other party in any
jurisdiction other than New York.
(b) Governing Law. THIS AGREEMENT 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 CONFLICTS OF LAW.
(c) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable air courier guaranteeing overnight
delivery (charges prepaid), mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid or sent by telecopier:
If to the Company:
Scottish Annuity & Life Holdings Ltd.
Crown House, 3rd Floor
4 Par-la-Ville Road
Hamilton, Bermuda HM12
Attention: Scott E. Willkomm
President and Chief Financial Officer
Fax: (441) 295-7576
with a copy to:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
Attention: Hugh T. McCormick, Esq.
Fax: (212) 424-8500
If to Stockholder:
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660-6397
Attention: General Counsel
Fax: (949) 219-3706
with a copy to:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071-3197
Attention: Karen E. Bertero
Fax: 213-229-6360
or to such other address or to the attention of such other personas the
recipient party has specified by prior written notice to the sending party. Any
notice, demand or other communication given hereunder will be deemed to have
been given as of the date so delivered; as of the first business day after being
delivered to an overnight air courier guaranteeing overnight delivery; on the
fifth business day after being mailed; or when transmission has been completed,
if telecopied; as the case may be.
(d) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(e) No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities which is inconsistent with,
adversely effects or violates the rights granted to Stockholder in this
Agreement. To the extent that this Agreement is inconsistent with, adversely
effects or violates the rights granted to Other Security Holders under any other
agreement previously entered into by and between the Company and such Other
Security Holders, such inconsistency, adverse effect or violation shall be
remedied, to the extent necessary and possible, by granting such Other Security
Holders the rights afforded to Stockholder under this Agreement.
(f) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights provided in the Share Purchase Agreement or granted by
law. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and hereby
agree to waive the defense in any action for specific performance or injunctive
relief that a remedy at law would be adequate. Accordingly, any party may in its
sole discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or other security) for specific performance and for
other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
(g) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement, including the provisions of this sentence, may be
amended, modified, supplemented or waived only upon the prior written consent of
the parties hereto.
(h) Successors and Assigns. This Agreement shall not be assigned, in whole
or in part, by any party hereto without the written consent of the other party;
provided, however, that Stockholder may, without written consent of the Company,
assign its rights and delegate its duties hereunder to any Pacific Life Entity.
Notwithstanding the foregoing, the rights and duties of a party hereto may only
be assigned to a third party, including a Pacific Life Entity, if such third
party agrees in writing to be bound by this Agreement.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected, it
being intended that the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
(j) Descriptive Headings; Interpretation. The descriptive headings of this
Agreement are inserted for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.
(k) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(l) Counterparts. This Agreement may be executed in any number of
counterparts, any one of which need not contain the signatures of more than one
party, but each of which when so executed shall be deemed to be an original and
all such counterparts taken together shall constitute one and the same
Agreement.
IN WITNESS WHEREOF the parties hereto have or have caused this Registration
Rights Agreement to be duly executed as of the date first above written.
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
By: /s/ Scott E. Willkomm
-----------------------------------
Scott E. Willkomm
President and Chief Financial Officer
PACIFIC LIFE INSURANCE COMPANY
By: /s/ Glenn S. Schafer
-----------------------------------
Glenn S. Schafer
President
By: /s/ Audrey L. Milfs
-----------------------------------
Audrey L. Milfs
Vice President and Secretary