Exhibit 4(m) Subordinated Guarantee
II-15
SUBORDINATED MVA GUARANTEE
SUBORDINATED MVA GUARANTEE (the "Subordinated Guarantee") dated as of
January 4, 2010, by MANULIFE FINANCIAL CORPORATION, a corporation organized
under the laws of Canada (the "Guarantor"), in connection with certain deferred
combination fixed and variable annuity contracts (hereinafter, the "Contracts")
issued by XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY prior to its merger with
XXXX XXXXXXX LIFE INSURANCE COMPANY (U.S.A.), a stock life insurance company
existing under the laws of the State of Michigan ("JHUSA").
WITNESSETH:
WHEREAS, JHUSA is the successor issuer of Contracts that offer holders
thereof the option to earn a guaranteed fixed return for specified periods,
which would result in such holders receiving certain guarantee period interests;
and
WHEREAS, the offer and sale of certain of such guarantee period interests
by JHUSA will be registered under the Securities Act of 1933 by JHUSA and the
issuance of this Subordinated Guarantee will be registered under the Securities
Act of 1933 by the Guarantor; and
WHEREAS, this Subordinated Guarantee uses the term "Guarantee Period" to
refer to any of the aforementioned specified periods that are applicable to
guarantee period interests that are sold pursuant to such a registered offering
and commence on or after the date hereof; and
WHEREAS, this Subordinated Guarantee is intended to enable JHUSA to be
exempt from filing certain periodic reports under the Securities Exchange Act of
1934, which will relieve JHUSA of costs and inconvenience; and
WHEREAS, as the indirect owner of all of JHUSA's outstanding stock, the
Guarantor also will indirectly benefit from JHUSA's exemption from reporting;
NOW, THEREFORE, in consideration of the premises set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:
SECTION 1. Guarantee. The Guarantor hereby unconditionally and irrevocably
guarantees, as a principal and not merely as a surety, the full and punctual
payment when due of all amounts payable by JHUSA from a Guarantee Period to any
holder, owner, annuitant or beneficiary under any Contract creating such
interest, to any successor, legatee, heir, or assignee of any such person, to
any other account or option under the Contract, or to any other account of any
such person (all of the foregoing persons, accounts and options being referred
to herein as "Payees"). For this purpose, amounts payable by JHUSA to a Payee
from a Guarantee Period
(a) upon a full or partial transfer, withdrawal, surrender, maturity,
annuitization, loan or other similar removal of assets will be the net
amount of assets so removed, after (i) increase for any interest or
positive market value adjustment that would be credited to a Payee
under the terms of the Contract for the transaction in question and
(ii) reduction for any interest, fees, charges, outstanding loans, and
negative market value adjustments that would be charged against a
Payee under the terms of the Contract for the transaction in question;
or
(b) upon payment of any other amount as a consequence of the death of any
owner, holder, or annuitant under a Contract, will be an amount equal
to the Contract's account value then allocated to one or more
Guarantee Periods, increased by any accrued but uncredited interest
attributable thereto and any positive market value adjustment that
would have been payable upon any surrender of the Contract at that
time.
II-16
SECTION 2. Gross Up. All payments made by the Guarantor to any Payee under
this Subordinated Guarantee shall be made in full, free of and without
withholding or deduction for, or on account of, any present or future Canadian
Taxes (as defined below) (other than Excluded Taxes, as defined below) unless
the withholding or deduction of such taxes by the Guarantor is required by law
or by the administration or interpretation of such law and provided that, if the
Guarantor shall be required by law to deduct or withhold any Canadian Taxes
(other than Excluded Taxes) from or in respect of any payment or sum payable to
the Payees, the payment or sum payable shall be increased as may be necessary so
that after making all required deductions or withholdings (including deductions
or withholdings applicable to additional amounts payable under this Section) the
Payee receives an amount equal to the sum it would have received if no deduction
or withholding had been made (the "Guarantor Additional Amounts"), and the
Guarantor shall pay the full amount deducted or withheld to the relevant
taxation or other authority in accordance with applicable law.
For the purposes of this Section, "Canadian Taxes" means "any taxes,
duties, assessments or governmental charges of whatever nature imposed or levied
by or on behalf of the Government of Canada, or any province, territory or
political subdivision thereof, or any authority therein or thereof having power
to tax" and "Excluded Taxes" means any Canadian Taxes which are imposed on a
Payee with respect to any Contract: (a) by or on behalf of a Payee who is liable
for such taxes, duties, assessments or governmental charges in respect of such
Contract (i) by reason of his being a person with whom JHUSA or the Guarantor is
not dealing at arm's length for the purposes of the Income Tax Act (Canada), or
(ii) by reason of his having a connection with Canada or any province or
territory thereof other than the mere holding, use or ownership or deemed
holding, use or ownership of such Contract; (b) by or on behalf of a Payee who
would not be liable for or subject to such withholding or deduction by making a
claim for exemption to the relevant tax authority; or (c) more than 10 days
after the Relevant Date (as defined below) except to the extent that the Payee
thereof would have been entitled to Guarantor Additional Amounts on presenting
the same for payment on the last day of such period of 10 days. For the purposes
of this Section, "Relevant Date" means the date on which such payment first
becomes due.
SECTION 3. Guarantee Absolute. The Guarantor agrees that this Subordinated
Guarantee is a guarantee of payment and not of collection or collectibility, and
that the obligations of the Guarantor hereunder shall be primary, absolute and
unconditional and, without limiting the generality of the foregoing, shall not
be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of JHUSA under the Contracts, or by
operation of law or otherwise;
(ii) any modification, amendment, supplement, endorsement or rider to the
Contracts;
(iii) any change in the corporate existence, structure or ownership of
JHUSA, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting JHUSA or its assets or any resulting release or
discharge of any obligation of JHUSA contained in the Contracts;
(iv) the existence of any defense, claim, set-off or other rights which the
Guarantor may have at any time against JHUSA, or any other person,
whether in connection herewith or any unrelated transactions, provided
that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim or with respect to
obligations of the Guarantor other than obligations hereunder;
(v) any invalidity or unenforceability relating to or against JHUSA for
any reason under the Contracts, or any provision of applicable law or
regulation purporting to prohibit the payment by JHUSA of any amount
payable by JHUSA under the Contracts; or
(vi) any other act or omission to act or delay of any kind by JHUSA or any
other person or any other circumstance whatsoever which might, but for
the provisions of this paragraph, constitute a legal or equitable
discharge of the Guarantor's obligations hereunder.
SECTION 4. Representations and Warranties. The Guarantor hereby represents
and warrants that:
II-17
(a) Authorization; No Contravention. The execution, delivery and
performance by the Guarantor of this Subordinated Guarantee is within the
Guarantor's powers, has been duly authorized by all necessary action, requires
no action by or in respect of, or filing with, any governmental body, agency or
official to be effective and does not contravene, or constitute a default under,
any provision of applicable law or regulation, as amended from time to time, or
the Letters Patent of Incorporation or by-laws of the Guarantor or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Guarantor or result in or require the creation or imposition of any lien on
any asset of the Guarantor.
(b) Binding Effect. This Subordinated Guarantee constitutes a valid and
binding agreement of the Guarantor, enforceable against the Guarantor in
accordance with its terms.
SECTION 5. Enforcement of Guarantee. Without limiting any other provision
of this Subordinated Guarantee, in no event shall any Payee have any obligation
to proceed against JHUSA or any other person or property before seeking
satisfaction from the Guarantor. Any Payee may enforce the Subordinated
Guarantee directly against the Guarantor, subject to no preconditions other than
failure by JHUSA to pay when due any guaranteed amount.
SECTION 6. Waiver. Without limiting any other provision of this
Subordinated Guarantee, the Guarantor hereby irrevocably waives promptness,
diligence, or notice of acceptance hereof, presentment, demand, protest and any
and all other notice not provided for herein and any requirement that at any
time a Payee or any other person exhaust any right or take any action against
JHUSA and any other circumstances whatsoever that might otherwise constitute a
legal or equitable discharge, release or defense of the Guarantor or that might
otherwise limit recourse against the Guarantor.
SECTION 7. Compliance with Regulation S-X. This Subordinated Guarantee
shall be interpreted in such a manner that the Subordinated Guarantee will be
"full and unconditional" as those words are used in Rule 3-10 of Regulation S-X
of the United States Securities and Exchange Commission, as currently in effect,
and as they may be amended from time to time. Payees shall automatically have
any additional rights and remedies against the Guarantor that may be necessary
to yield that result.
SECTION 8. No Waiver; Remedies. No failure on the part of a Payee to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 9. Continuing Guarantee; Reinstatement in Certain Circumstances.
This Subordinated Guarantee is a continuing guarantee and the Guarantor's
obligations hereunder shall (i) remain in full force and effect until the
indefeasible payment in full of all amounts payable by JHUSA from all Guarantee
Periods and (ii) be binding upon the Guarantor and its successors and assigns.
If at any time any payment by JHUSA of any amounts payable by JHUSA from any
Guarantee Period is rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy or reorganization of JHUSA or otherwise, the Guarantor's
obligations hereunder with respect to such payment shall be reinstated as though
such payment had been due but not made at such time.
SECTION 10. Termination. The Guarantor may terminate this Subordinated
Guarantee as it would apply to any Guarantee Period commencing after the
effective termination date (the "Termination Date") by giving written notice to
JHUSA and the holders of outstanding Contracts at least 14 days prior to the
effective Termination Date specified in such notice. The termination of this
Subordinated Guarantee with respect to Guarantee Periods commencing after the
effective Termination Date shall not in any way affect, modify, alter or amend
the Guarantor's continuing obligations with respect to Guarantee Periods
commencing prior to the effective Termination Date.
SECTION 11. Successor Guarantor. In the event of any amalgamation or
consolidation by the Guarantor with or merger by the Guarantor into any other
corporation or any transaction involving the transfer of all or substantially
all of the Guarantor's assets to any corporation or other entity and which as a
matter of law or contract results in the successor corporation or entity
becoming bound by or assuming the
II-18
Guarantor's obligations under this Subordinated Guarantee, such successor
corporation or other entity formed by such amalgamation or consolidation or into
which the Guarantor is merged or to which such transfer is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Guarantor under this Subordinated Guarantee, with the same effect as if it had
been named herein as the Guarantor, and thereafter, the predecessor corporation
or entity shall be relieved of all obligations and covenants under this
Subordinated Guarantee.
SECTION 12. Stay of Time Of Payment. Without limiting any other provision
of this Subordinated Guarantee, if the time for payment of any amount payable by
JHUSA under a Contract is stayed upon the insolvency, bankruptcy or
reorganization of JHUSA, all such amounts otherwise subject to payment under the
terms of this Subordinated Guarantee shall nonetheless be payable by the
Guarantor hereunder forthwith on demand by the Payee.
SECTION 13. Subordination. The obligations under this Subordinated
Guarantee shall be unsecured obligations of the Guarantor, and shall be
subordinated in right of payment in the event of bankruptcy, liquidation,
dissolution, winding up or reorganization, or upon the acceleration of any
senior indebtedness of the Guarantor and shall be subordinate in right of
payment to the prior payment in full of all other obligations of the Guarantor
except for other guarantees or obligations of the Guarantor which by their terms
are designated as ranking equally in right of payment with or subordinate to
this Subordinated Guarantee.
SECTION 14. Governing Law. This Subordinated Guarantee shall be governed
by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts.
SECTION 15. Agent for Service; Submission to Jurisdiction: Waiver of
Immunities. The Guarantor: (i) acknowledges that it has, by separate written
instrument, irrevocably designated and appointed Xxxx Xxxxxxx Life Insurance
Company (U.S.A.), 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, as
authorized agent for service (the "Agent for Service") upon whom process may be
served in any legal action or proceeding against it arising out of or in
connection with this Subordinated Guarantee that may be instituted in any state
or federal court located in the City of Boston, Massachusetts (a "Massachusetts
Court"); (ii) acknowledges that the Agent for Service has accepted such
designation; and (iii) agrees that service of process upon the Agent for Service
shall be deemed in every respect effective service of process upon the Guarantor
in any such action or proceeding.
The Guarantor irrevocably: (i) agrees that any legal action or proceeding
against it arising out of or in connection with this Subordinated Guarantee or
for recognition or enforcement of any judgment rendered against it in connection
with this Subordinated Guarantee may be brought in any Massachusetts Court; (ii)
agrees that by execution and delivery of this Subordinated Guarantee, the
Guarantor hereby irrevocably accepts and submits to the non-exclusive
jurisdiction of any Massachusetts Court in personam, generally and
unconditionally with respect to any such action or proceeding for itself and in
respect of its property, assets and revenues; (iii) waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding brought in any Massachusetts
Court and any claim that any such action or proceeding has been brought in an
inconvenient forum.
SECTION 16. Severability. Any provision of this Subordinated Guarantee
which is illegal, invalid, prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity, prohibition or unenforceability without invalidating the remaining
provisions hereof and any such illegality, invalidity, prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 17. Entire Agreement. This Subordinated Guarantee embodies the
entire undertaking of the Guarantor with respect to the subject matter hereof
and supersedes any prior written or oral agreements and understandings relating
to the subject matter hereof.
II-19
IN WITNESS WHEREOF, the Guarantor has caused this Subordinated Guarantee to
be duly executed and delivered by its officer thereunto duly authorized as an
instrument under seal as of the date first above written.
MANULIFE FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Executive Vice
President and Chief Financial
Officer
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President and
Treasurer
II-20