Exhibit 10.1
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is made as of the 3rd
day of July, 2003 by and between Scottish Annuity & Life Holdings, Ltd. (the
"Company"), a Cayman Islands company, and Pacific Life Insurance Company
("PacLife"), a California corporation.
WHEREAS, PacLife acquired 4,532,380 of the ordinary shares, par value
$.01 per share, of the Company ("Ordinary Shares") on December 31, 2001 pursuant
to that certain Share Purchase Agreement dated as of August 6, 2001 by and
between the Company and PacLife (the "2001 Share Purchase Agreement") and
currently owns approximately 16.6% of the Company's outstanding Ordinary Shares;
WHEREAS, PacLife desires to sell some of its Ordinary Shares;
WHEREAS, the Company believes it is in the best interests of the
Company and its Shareholders for PacLife to reduce its ownership of Ordinary
Shares and to increase the public's ownership of Ordinary Shares;
WHEREAS, in furtherance of the foregoing, the Company intends to
purchase and PacLife intends to sell some of PacLife's Ordinary Shares;
WHEREAS, the Company filed a "shelf" Registration Statement on Form
S-3 (File No. 333-104545) (the "Registration Statement") with the United States
Securities and Exchange Commission on April 15, 2003, which Registration
Statement registered the future issuance by the Company of up to an aggregate of
$500,000,000 of equity and debt securities; and
WHEREAS, the Company intends to (i) sell 7,000,000 newly issued
Ordinary Shares (or 8,050,000 Ordinary Shares, if the underwriters exercise
their over-allotment option in full) in an underwritten offering with Bear
Stearns & Co. Inc., UBS Securities LLC and certain other investment banks in
July 2003 (the "Offering"), and (ii) use the Net Proceeds (as defined herein) of
the sale of 1,000,000 Ordinary Shares in the Offering to purchase 1,000,000
Ordinary Shares held by PacLife (and, if the underwriters exercise their
over-allotment option, the Net Proceeds of the sale of such number of Ordinary
Shares representing 50% of the Ordinary Shares sold by the Company as a result
of the exercise of the over-allotment option to purchase an additional number of
Ordinary Shares held by PacLife equal to 50% of the Ordinary Shares sold by the
Company as a result of the exercise of the over-allotment option, up to a
maximum of an additional 525,000 Ordinary Shares), or the Net Proceeds of such
lesser number of shares as determined in accordance with Section 1.3 of this
Agreement to purchase such lesser number of shares held by PacLife (such number
of shares to be purchased from PacLife, the "PacLife Shares");
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I.
PURCHASE AND SALE OF PACLIFE SHARES; OFFERING
1.1 Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, PacLife agrees to sell to the Company, and the Company agrees to
purchase from PacLife, all of the PacLife Shares at the Closing (as defined
below) for a purchase price per share (the "Purchase Price") equal to the public
offering price per share of the ordinary shares sold in the Offering, minus the
underwriting discounts and commissions per share (the "Net Proceeds"). The
Purchase Price shall be paid as provided in Section 1.2. The purchase of the
PacLife shares by the Company hereunder shall be a repurchase and redemption for
the purposes of Article 6(c)(vi) of the Company's Articles of Association.
1.2 Closing. The closing of the purchase and sale of the PacLife
Shares hereunder (the "Closing") shall take place at the offices of LeBoeuf,
Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, NY 10019, on the
date of the closing of the Offering (or the earliest date thereafter permitted
by Applicable Law (as defined below)), after satisfaction or waiver of the
conditions set forth in Article V, or at such other time or place as PacLife and
the Company may agree (the "Closing Date"). The terms "Closing" and "Closing
Date" shall also be deemed to refer to any additional closing or additional
closing date relating to the sale of Ordinary Shares pursuant to any exercise of
the over-allotment option to be granted to the underwriters. At each Closing:
(a) The Company shall deliver to PacLife in immediately available
funds an amount equal to the Purchase Price multiplied by the number of PacLife
Shares sold by PacLife at such Closing by wire transfer to an account or
accounts designated by PacLife by written notice to the Company, which notice
shall be delivered not later than two Business Days prior to the applicable
Closing Date (or, if not so designated, then by certified or official bank check
or checks payable in immediately available funds to the order of PacLife or its
designee in such amount). For purposes of this Agreement, "Business Day" shall
mean any day other than a Saturday, Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
(b) PacLife shall deliver to the Company one or more certificates
representing the PacLife Shares sold at such Closing, duly endorsed or
accompanied by an instrument of transfer and stock powers duly endorsed in
blank, with any required transfer stamps affixed thereto.
1.3 The Offering. (a) The Company intends to proceed with the
Offering, in cooperation with the underwriters, as soon as practicable. If the
lead book-running manager of the Offering advises the Company that marketing or
other factors (including, but not limited to, a decline in the market value of
the Ordinary Shares) require a limitation on the number of Ordinary Shares to be
offered and sold in the Offering, the Company shall immediately so notify
PacLife in writing of that fact, and the number of PacLife Shares to be
purchased by the Company hereunder with the proceeds of Ordinary Shares in the
Offering shall be reduced by the number of shares as is necessary to reduce the
size of the Offering to comply with the lead book-running manager's advice.
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(b) If the underwriters determine to exercise an over-allotment option
in the Offering (commonly referred to as the "green shoe"), then the Company
shall immediately so notify PacLife in writing of such exercise. In such event,
PacLife shall sell, and the Company shall apply the Net Proceeds realized from
the sale of 50% of the Ordinary Shares sold by the Company as a result of the
exercise of such over-allotment option to purchase, an additional number of
Ordinary Shares held by PacLife equal to 50% of the Ordinary Shares sold by the
Company as a result of the exercise of the over-allotment option, up to a
maximum of 525,000 additional Ordinary Shares.
1.4 Offering Expenses. All reasonable out-of-pocket expenses incurred
in connection with the Offering shall be borne by the Company. All fees and
disbursements of counsel for PacLife shall be borne by PacLife.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of PacLife as
follows:
2.1 Organization and Qualification. The Company is a company duly
incorporated, validly existing and in good standing under the laws of the Cayman
Islands. Each of the Company and its subsidiaries is duly qualified to do
business and is in good standing (to the extent such concepts are applicable) in
every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
or reasonably be expected to result in any material adverse effect on the
business, properties, assets, operations, results of operations or condition of
it and its subsidiaries, taken as a whole, or on the transactions contemplated
hereby or on the agreements and instruments to be entered into in connection
herewith, or on the authority or ability of such entity to timely perform its
obligations under this Agreement (a "Material Adverse Effect").
2.2 Authorization, Enforcement and Validity. The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, including, but not limited to, the Offering
and the purchase of the PacLife Shares in accordance with the terms hereof. The
Company has taken all necessary action (corporate or other) to authorize the
execution and delivery of this Agreement and the consummation by it of the
transactions contemplated hereby and no further consent or authorization is
required of the Company's Board of Directors or its shareholders. Upon the
execution and delivery of this Agreement, this Agreement will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PACLIFE
PacLife hereby represents and warrants to the Company as follows:
3.1 Organization and Qualification. PacLife is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of California. Each of PacLife and its subsidiaries is duly qualified to do
business and is in good standing (to the extent such concepts are applicable) in
every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
or reasonably be expected to result in any Material Adverse Effect.
3.2 Authorization, Enforcement, and Validity. PacLife has the
requisite corporate power and authority to enter into and to perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. PacLife has taken all necessary action (corporate or other) to authorize
the execution and delivery of this Agreement and the consummation by it of the
transactions contemplated hereby and no further consent or authorization is
required of PacLife's Board of Directors or its shareholders. Upon the execution
and delivery of this Agreement, this Agreement will constitute the valid and
binding obligation of PacLife enforceable against it in accordance with its
terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors' rights and remedies.
3.3 Valid Title to PacLife Shares
(a) PacLife has, and on each relevant Closing Date will have, valid
title to the PacLife Shares free and clear of all security interests, claims,
liens, equities or other encumbrances of any kind and the legal right and power,
and all authorization and approval required by law, to sell, transfer and
deliver the PacLife Shares to the Company.
(b) PacLife will deliver the PacLife Shares to be purchased by the
Company in certificated form. Upon delivery of PacLife Shares to the Company in
certificated form and upon payment therefor pursuant to this Agreement, such
delivery will pass valid title to such PacLife Shares to the Company, free and
clear of any security interests, claims, liens, equities or other encumbrances
of any kind.
ARTICLE IV.
COVENANTs
4.1 Press Release. Except as required by any applicable law, statute,
rule, regulation, ordinance or other pronouncement having the effect of law of
any United States or foreign federal, national, state, local, county, city or
other political subdivision ("Applicable Law"), neither the Company nor PacLife
nor any of their affiliates shall make any public statement or issue or cause
the publication of any press release or other announcement with
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respect to this Agreement, the Offering or the transactions contemplated hereby
without prior consultation with the other party hereto. Notwithstanding the
foregoing, the Company, PacLife and their respective affiliates may make such
statement or issue such press release or other announcement if any of them
determine, upon the advice of counsel, that such action is required by
Applicable Law. In such case, the Company, PacLife and their respective
affiliates shall cooperate to reach mutual agreement regarding the content of
such statement, release or announcement. Any such statement, press release or
other announcement shall be made in accordance with Applicable Law.
4.2 Agreement with Respect to the 2001 Share Purchase Agreement. The
Company and PacLife agree that the purchase and sale of the PacLife Shares
provided for in this Agreement does not constitute a breach of any covenant
provided in Section 5.4 of the 2001 Share Purchase Agreement.
ARTICLE V.
CONDITIONS TO CLOSING
5.1 Conditions to Obligations of the Company. The obligations of The
Company to effect the transactions contemplated hereby shall be subject to the
satisfaction or waiver, where permissible, prior to each Closing Date of the
following conditions:
(a) no temporary restraining order, preliminary or permanent
injunction or other judgment, decision or order issued by any court, tribunal,
arbitrator, agency, commission, official or other instrumentality of any United
States or foreign federal, national, state, local, county, city or other
political subdivision ("Governmental Authority") shall be in effect preventing
the consummation of the transactions consummated hereby;
(b) the representations and warranties of PacLife set forth in this
Agreement shall be true and accurate as of each Closing Date as though made at
or as of such time, except as would not have a Material Adverse Effect on
PacLife;
(c) PacLife shall have performed in all material respects all
obligations required to be performed by them at or prior to each Closing Date;
and
(d) the completion of the Offering in accordance with Article I.
5.2 Conditions to Obligations of PacLife. The obligations of PacLife
to effect the transactions contemplated hereby shall be subject to the
satisfaction or waiver, where permissible, prior to each Closing Date of the
following conditions:
(a) no temporary restraining order, preliminary or permanent
injunction or other judgment, decision or order issued by any Governmental
Authority shall be in effect preventing the consummation of the transactions
consummated hereby;
(b) the representations and warranties of the Company set forth in
this Agreement shall be true and accurate as of each Closing Date as though made
at or as of such time, except as would not have a Material Adverse Effect on the
Company; and
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(c) The Company shall have performed in all material respects all
obligations required to be performed by it at or prior to each Closing Date.
ARTICLE VI.
INDEMNIFICATION AND CONTRIBUTION
6.1 Indemnification.
(a) The Company agrees to indemnify PacLife and each of its officers
and directors, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in the Registration Statement or
in any prospectus used in connection with the Offering (including any documents
incorporated by reference therein), or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, or any rule or regulation thereunder applicable to the
Company in connection with the Offering, and will reimburse PacLife and each of
its officers and directors, for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by PacLife with respect to PacLife and
stated to be specifically for use in any prospectus used in connection with the
Offering.
(b) PacLife agrees to indemnify the Company, and each of its directors
and officers, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact with respect to PacLife contained in any
prospectus used in connection with the Offering, or any omission (or alleged
omission) to state therein a material fact with respect to PacLife required to
be stated therein or necessary to make the statements by PacLife not misleading,
and will reimburse the Company and each of its officers and directors, for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such prospectus
in reliance upon and in conformity with written information furnished to the
Company by or an behalf of PacLife and stated to be specifically for use
therein.
(c) Each party entitled to indemnification under this Article VI (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense
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(unless the Indemnified Party shall have reasonably concluded that there may be
a conflict of interest between the Indemnifying Party and the Indemnified Party
in such action, in which case the fees and expenses of counsel shall be at the
expense of the Indemnifying Party), and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Article VI unless the
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
6.2 Contribution.
To the extent that the indemnification provided for in this Article VI
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact related to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
6.3 Payments as Incurred. Any payments required to be made to an
Indemnified Party under this Article VI shall be made as the related claims,
losses, damages, liabilities or expenses are incurred.
ARTICLE VII.
MISCELLANEOUS
7.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the initial Closing
Date:
(a) By the mutual written consent of the Company and PacLife;
(b) By either the Company or PacLife by written notice to the other
party, if the initial Closing shall not have occurred on or prior to August 31,
2003; or
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(c) By either the Company or PacLife if there shall be a material
breach by the other party of any of its representations, warranties, covenants
or agreements contained in this Agreement.
7.2 Amendments. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by the
written agreement of the Company and PacLife.
7.3 Headings. The headings of the various sections of this Agreement
are for convenience of reference only and shall not be deemed to be part of this
Agreement.
7.4 Severability. In the event that any provision in this Agreement is
held to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
7.5 Governing Law And Forum. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITH
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. The parties hereto agree to submit to
the exclusive jurisdiction of the federal and state courts of the State of New
York with respect to the interpretation of this Agreement or for the purposes of
any action suit or proceeding arising out of or related to this Agreement. In
any such action, suit or proceeding, each of the parties hereto irrevocably and
unconditionally waives and agrees not to assert by way of motion, as a defense
or otherwise, any claim that it is not subject to the jurisdiction of the above
courts, that such action, suit or proceeding is brought in an inconvenient forum
or that the venue of such action, suit or proceeding is improper.
7.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument. In the event that any
signature is delivered via facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature page were an original hereof.
7.7 Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the matters covered herein, supersedes all prior
agreements and understandings with respect to such matters executed by and among
the Company and PacLife (and their respective affiliates), and, except as
specifically set forth herein or therein, neither the Company nor PacLife (nor
any of their respective affiliates) makes any representation, warranty, covenant
or undertaking with respect to such matters. Notwithstanding the foregoing,
except as otherwise explicitly stated herein, the Registration Rights Agreement
is not affected hereby and remains in full force and effect.
7.8 Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized international
express courier postage prepaid, and shall be as addressed as follows:
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If to the Company:
Scottish Annuity & Life Holdings, Ltd.
P.O. Box HM 2939
Crown House, Third Floor
4 Par-La Ville Road
Hamilton HM08 Bermuda
Attn: Paul Goldean
Tel: (441) 295-4451
Fax: (441) 295-7576
With copies to:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, NY 10019
Attn: Stephen G. Rooney
Tel: (212) 424-8013
Fax: (212) 424-8500
If to PacLife:
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660-6397
Attn: General Counsel
Tel: (949) 219-3326
Fax: (949) 219-3706
With copies to:
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660-6397
Attn: Sharon A. Cheever, Esq.
Tel: (949) 219-3852
Fax: (949) 219-3706
Such notices or other communications shall be deemed delivered upon receipt, in
the case of overnight delivery, personal delivery, facsimile transmission (as
evidenced by the confirmation thereof), or mail.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized representatives as of the
date first above written.
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
By: /s/ Scott E. Willkomm
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Name: Scott E. Willkomm
Title: President
PACIFIC LIFE INSURANCE COMPANY
By: /s/ Khanh T. Tran
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Name: Khanh T. Tran
Title: Executive Vice President, Chief
Financial Officer
By: /s/ Audrey L. Milfs
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Name: Audrey L. Milfs
Title: Secretary
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