GUARANTEE AGREEMENT
GUARANTEE
AGREEMENT (“Agreement”)
made
as of the 29th day of January,
2007.
B
E T W E
E N:
MANULIFE
FINANCIAL CORPORATION,
a life
insurance company incorporated under the Insurance
Companies Act
(Canada)
(hereinafter
referred to as “MFC”)
OF
THE FIRST PART,
-
and
-
THE
MANUFACTURERS LIFE INSURANCE COMPANY,
a life
insurance company amalgamated under the Insurance
Companies Act
(Canada)
(hereinafter
referred to as “MLI”)
OF
THE SECOND PART.
WHEREAS,
MFC
owns all of the outstanding common shares of MLI;
AND
WHEREAS,
MFC
wishes to execute this Agreement in favour of MLI in order to provide for
payments by MFC in respect of the MLI Preferred Shares (defined herein) in
certain circumstances and to covenant to provide certain continuous disclosure
materials of MFC;
AND
WHEREAS,
this
Agreement is intended to enable MLI to obtain an exemption (as the same may
be
amended, restated or superseded from time to time, the “Continuous
Disclosure Exemption”)
from
filing certain continuous disclosure documents with the Canadian securities
regulatory authorities, which will relieve MLI of costs and
inconvenience;
AND
WHEREAS,
as the
owner of all of MLI’s outstanding common shares, MFC will indirectly benefit
from the benefits to MLI referred to in the previous recital;
AND
WHEREAS,
this
Agreement is intended to establish MFC's obligation to pay the Deficiency
Payment (defined herein) to MLI as a debt obligation of MFC notwithstanding
that, in certain specified circumstances, the amount of the Deficiency Payment
is calculated with reference to the amount that holders of the respective class
of MLI Preferred Shares would receive had their claim to a Deficiency Amount
(defined herein) on the final distribution of surplus of MFC, if any, ranked
on
a parity with claims of the holders of the respective class of MFC Preferred
Shares (defined herein);
NOW,
THEREFORE,
in
consideration of the sum of $1.00, the respective covenants and agreements
provided in this Agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
covenant and agree as follows.
ARTICLE 1
INTERPRETATION
|
1.1
|
Defined
Terms
|
In
this
Agreement:
|
(a)
|
“Automatic
Exchange”
has the meaning attributed to such term in the Declaration of
Trust;
|
|
(b)
|
“Continuous
Disclosure Exemption”
has the meaning attributed to such term in the recitals
hereto;
|
|
(c)
|
“Deficiency
Amount”
means, with respect to a particular class of MLI Preferred Shares,
an
amount equal to the aggregate, without duplication,
of:
|
|
(i)
|
the
amount of any declared but unpaid dividends on the shares of such
class;
|
|
(ii)
|
in
the event that a holder of any shares of such class has presented
and
surrendered shares of the class for redemption pursuant to the terms
of
such shares or pursuant to a redemption of such shares by MLI and
payment
in respect of such redemption has not been made in full by MLI, the
unpaid
portion of the amount payable by MLI upon such redemption;
and
|
|
(iii)
|
in
the event of a Triggering Event described in section 2.1(c),
any amount to which the outstanding shares of such class would be
entitled
as a Liquidation Preference and which remains unpaid following the
final
distribution of surplus of MLI, if any, pursuant to section 95(1) of
the WURA;
|
|
(d)
|
“Declaration
of Trust” means
the amended and restated declaration of trust of the Trust dated
as of
December 5, 2001, as the same may be amended, restated or superseded
from
time to time;
|
|
(e)
|
“Deficiency
Payment”
has the meaning attributed to such term in section 2.2;
|
|
(f)
|
“Determination
Date”
means:
|
|
(i)
|
with
respect to a Triggering Event referred to in sections 2.1(a)
or
2.1(b),
the date of the failure to pay referred to therein;
and
|
|
(ii)
|
with
respect to a Triggering Event referred to in section 2.1(c),
the later of (A) the date of the final distribution of property of
MLI pursuant to section 93 of the WURA and (B) the date of the final
distribution of surplus of MLI, if any, pursuant to section 95(1)
of the
WURA;
|
|
(g)
|
“Liabilities
and Indebtedness”
means the principal of, and the interest, premium, fees and other
amounts
owing, if any, in respect of:
|
|
(i)
|
all
liabilities and indebtedness of MFC (other than indebtedness in respect
of
this Agreement), whether outstanding on the date of this Agreement
or
thereafter created, incurred, assumed, guaranteed or indemnified
for money
borrowed by MFC or for money borrowed by others for which MFC is
responsible or liable (including without limitation by way of assumption,
guarantee or indemnity);
|
|
(ii)
|
amounts
owing by MFC, or amounts owing by others for which MFC is responsible
or
liable, in respect of hedging or swap
arrangements;
|
|
(iii)
|
liabilities
and indebtedness of MFC whether outstanding on the date of this Agreement
or thereafter created, incurred, assumed, guaranteed or indemnified
by MFC
in connection with the acquisition by MFC or by others of any Person,
business, property or other assets;
|
|
(iv)
|
all
other outstanding liabilities, debts, claims and indebtedness of
MFC
(other than indebtedness in respect of this Agreement), whether
outstanding on the date of this Agreement or thereafter created,
incurred,
assumed, guaranteed or indemnified by MFC (other than the MLI Preferred
Shares); and
|
|
(v)
|
any
renewal, extension, replacement or refinancing of any liability,
debt,
claim or indebtedness referred to in paragraphs (i) to (iv) of this
definition, including any renewal, extension, replacement or refinancing
of any previous renewal, extension, replacement or
refinancing;
|
in
each
case unless the terms of such liability, debt, claim or indebtedness provide
that such liability, debt, claim or indebtedness ranks parri passu with, or
is
subordinate in right of payment to, the MLI Preferred Shares or MFC’s obligation
to make a Deficiency Payment;
|
(h)
|
“Liquidation
Preference”
means any amount to which holders of a particular class or series
of
preference shares of an issuer are entitled in priority to any amounts
which may be payable in respect of any class of shares of the issuer
which
rank junior to such class or series in the event of a distribution
of
assets upon the liquidation, dissolution or winding-up of the
issuer;
|
|
(i)
|
“Loss
Absorption Event” has
the meaning attributed to such term in the Declaration of
Trust;
|
|
(j)
|
“MaCS”
means the Manulife Financial Capital Securities - Series A and Manulife
Financial Capital Securities - Series B of the Trust outstanding
from time
to time and includes any securities of MLI into which such securities
may
be exchanged or changed or which result from a consolidation, subdivision
or redesignation of such
securities;
|
|
(k)
|
“MFC Class A
Shares”
means the Class A Shares in the capital of MFC and includes any
shares of MFC with a Liquidation Preference into which such class
of
shares may be converted or changed or which result from a consolidation,
subdivision or redesignation of such class of shares and any other
class
of preference shares of MFC which ranks on a parity with the Class
A
Shares and which are created and issued at any time or from time
to time
after the date hereof;
|
|
(l)
|
“MFC
Class B Shares”
means the Class B Shares in the capital of MFC and includes any shares
of
MFC with a Liquidation Preference into which such class of shares
may be
converted or changed or which result from a consolidation, subdivision
or
redesignation of such class of shares and any other class of preference
shares of MFC which ranks on a parity
with the Class B Shares and which are created and issued at any time
or
from time to time after the date
hereof;
|
|
(m)
|
“MFC Preferred
Shares”
means the outstanding MFC Class A Shares and MFC Class B Shares
from time to time, in each case of any series, whether or not such
shares
are outstanding as of the date
hereof;
|
|
(n)
|
“MLI
Class A Shares”
means the Class A Shares in the capital of MLI and includes any shares
of
MLI with a Liquidation Preference into which such class of shares
may be
converted or changed or which result from a consolidation, subdivision
or
redesignation of such class of shares and any other class of preference
shares of MLI which ranks on a parity with the Class A Shares and
which
are created and issued at any time or from time to time after the
date
hereof;
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|
(o)
|
“MLI
Class B Shares”
means the Class B Shares in the capital of MLI and includes any shares
of
MLI with a Liquidation Preference into which such class of shares
may be
converted or changed or which result from a consolidation, subdivision
or
redesignation of such class of shares and any other class of preference
shares of MLI which ranks on a parity with the Class B Shares and
which
are created and issued at any time or from time to time after the
date
hereof;
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|
(p)
|
“MLI Preferred
Shares”
means the outstanding MLI Class A Shares and MLI Class B Shares
from time to time, in each case of any series, whether or not such
shares
are outstanding as of the date hereof other than shares issued to
and held
by MFC or an affiliate (as defined in NI 51-102) of MFC; provided
that,
for greater certainty, any MLI Preferred Shares to be issued to holders
of
MaCS pursuant to a Loss Absorption Event shall be considered to be
outstanding as of and from the time of such
event;
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|
(q)
|
“NI
51-102”
means National Instrument 51-102 − Continuous
Disclosure Obligations;
|
|
(r)
|
“Person”
means any individual, partnership, limited partnership, joint venture,
syndicate, sole proprietorship, company or corporation with or without
share capital, unincorporated association, trust, trustee, executor,
administrator or other legal personal representative, government
or
governmental authority or entity, however designated or
constituted;
|
|
(s)
|
“Prime
Rate”
on any date shall mean the numerical average of the prime rates as
announced and published by Royal Bank of Canada and Bank of Nova
Scotia
applicable to such date;
|
|
(t)
|
“Reimbursement
Payment”
has the meaning attributed to such term in section 3.1;
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|
(u)
|
“Triggering
Event”
has the meaning attributed to such term in section 2.1;
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|
(v)
|
“Trust”
means Manulife Financial Capital
Trust;
|
|
(w)
|
“winding-up
order”
means a winding-up order as defined under the WURA or any order of
similar
effect made under applicable laws for the winding-up, liquidation
or
dissolution of MLI or MFC, as the case may be, from time to time;
and
|
|
(x)
|
“WURA”
means the Winding-Up
and Restructuring Act
(Canada).
|
| 1.2 |
|
Interpretation
Not Affected by Headings
|
The
division of this Agreement into Articles, sections and other portions and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation hereof. Unless otherwise indicated, all
references to an “Article” or “section” followed by a number refer to the
specified Article or section of this Agreement. The terms “this Agreement,”
“hereof,” “herein” and “hereunder” and similar expressions refer to this
agreement and not to any particular Article, section or other portion
hereof.
|
1.3
|
Rules
of Construction
|
Unless
otherwise specifically indicated or the context otherwise requires:
|
(a)
|
references
in this Agreement to any statute shall be deemed to include references
to
such statute and its associated regulations as re-enacted, amended,
extended or superseded from time to time and references to a particular
section of a statute shall be deemed to include a reference to the
equivalent section of similar legislation which may be applicable
to the
particular Person, event or transaction at any particular
time;
|
|
(b)
|
words
importing the singular shall include the plural and vice versa and
words
importing any gender shall include all genders;
and
|
|
(c)
|
“include,”
“includes” and “including” shall be deemed to be followed by the words
“without limitation.”
|
ARTICLE 2
COVENANTS
OF MFC
|
2.1
|
Obligation
to Make Deficiency Payment
|
In
the
event (each, a “Triggering
Event”)
that
MLI:
|
(a)
|
fails
to make full payment of any dividend declared on any MLI Preferred
Shares on the date required for such payment;
or
|
|
(b)
|
fails
to make payment in full when due of any amounts payable by MLI following
presentation and surrender of any MLI Preferred Shares which have
been
redeemed by MLI or which are then redeemable by the holder pursuant
to the
terms of such MLI Preferred Shares;
or
|
|
(c)
|
becomes
subject to a winding-up order;
|
MFC
hereby unconditionally agrees to pay to MLI, in trust for the benefit of holders
of MLI Preferred Shares outstanding as of the Triggering Event, the
Deficiency Payment.
|
2.2
|
Calculation
of Deficiency Payment
|
The
“Deficiency
Payment”
shall
be calculated as follows:
|
(a)
|
in
the event that, at the time of the Determination Date, a winding-up
order
has been made with respect to MFC, then the Deficiency Payment shall
be
the amount that, when paid
to the holders of the MLI Preferred Shares outstanding as of the
Triggering Event, will result
in:
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(i)
|
the
holders of MLI Class A Shares outstanding as of the Triggering Event
receiving payment of the same proportion of the Deficiency Amount
for such
MLI Class A Shares as the holders of such MLI Class A Shares would
have
received had their claim to such Deficiency Amount on the final
distribution of surplus of MFC, if any, pursuant to section 95(1) of
the WURA ranked on a parity with the claims of the holders of the
MFC Class A Shares;
and
|
|
(ii)
|
the
holders of MLI Class B Shares outstanding as of the Triggering Event
receiving payment of the same proportion of the Deficiency Amount
for such
MLI Class B Shares as the holders of such MLI Class B Shares would
have
received had their claim to such Deficiency Amount on the final
distribution of surplus of MFC, if any, pursuant to section 95(1) of
the WURA ranked on a parity with the claims of the holders of the
MFC Class B Shares.
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(b)
|
In
all circumstances other than those specified in section 2.2(a)
above,
the Deficiency Payment shall equal the aggregate Deficiency
Amounts
attributable to all classes of MLI Preferred Shares outstanding as
of the
Triggering Event.
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|
2.3
|
Direction
as to Payment
|
MLI
hereby irrevocably directs MFC to make the Deficiency Payment to the transfer
agent(s) for the MLI Preferred Shares for distribution to the holders of
MLI Preferred Shares outstanding as of the date of the Triggering Event
according to their respective rights and interests in MLI. MLI shall cause
the
transfer agent(s) to co-operate with MFC for the purpose of making such payments
to such holders. If there is no transfer agent for the MLI Preferred Shares
at
that time or the transfer agent will not co-operate, MLI hereby irrevocably
directs MFC to take commercially reasonable steps to make the Deficiency Payment
to the holders of MLI Preferred Shares outstanding as of the date of the
Triggering Event according to their respective rights and interests in MLI
or to
make commercially reasonable arrangements for those amounts to be held for
the
benefit of and distributed to such holders as soon as practicable. MFC hereby
agrees to cause payment of the Deficiency Payment to be made punctually when
the
same shall become due and payable and, in any event, within 15 days of the
final
determination of the Deficiency Payment and as if such payment were made by
MLI.
|
2.4
|
Guarantee
Absolute and Unconditional
|
MFC
agrees that its obligation to pay the Deficiency Payment hereunder shall be
absolute and unconditional and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected
by:
|
(a)
|
any
extension of the time or times for the payment of the Deficiency
Payment,
renewal, settlement, compromise, waiver, indulgence for release granted
to
MLI by the holders of MLI Preferred Shares in respect of any obligation
of
MLI under the MLI Preferred Shares, by operation of law or
otherwise;
|
|
(b)
|
any
modification or amendment of or supplement to the terms and conditions
of
the MLI Preferred Shares (as
long as they remain MLI Preferred Shares as defined herein) or MFC
Preferred Shares or
the creation of any class of shares ranking on a parity with or superior
to the MLI Preferred Shares or MFC Preferred
Shares;
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(c)
|
any
change in the corporate existence, structure or ownership of MLI
(other
than pursuant to section 5.1(b)
hereof) or MFC, or any insolvency, bankruptcy, winding-up, reorganization
or other similar proceeding affecting MLI or MFC or their
assets;
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(d)
|
the
existence of any defense, claim, set-off or other rights which MFC
may
have at any time against MLI, any holder of MLI Preferred Shares or
MaCS or any other Person, whether in connection herewith or any unrelated
transactions;
|
|
(e)
|
any
provision of applicable law or regulation purporting to prohibit
the
payment by MFC of all or any portion of the Deficiency
Payment;
|
|
(f)
|
any
breach by MLI of its obligations to MFC under this
Agreement;
|
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(g)
|
any
other act or omission to act or delay of any kind by MLI, any holder
of
MLI Preferred Shares or MaCS or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge or defence of
MFC’s
obligations hereunder;
|
|
(h)
|
any
contest by MLI or any Person as to the amount of the Deficiency Payment;
or
|
|
(i)
|
the
recovery of any judgment against MLI or any action to enforce the
same.
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|
2.5
|
Ranking
of Deficiency Payment
|
|
(a)
|
MFC
covenants and agrees that MFC’s obligations under this Agreement to make a
Deficiency Payment are expressly subordinated, to the extent and
in the
manner hereinafter set forth, in right of payment to the prior payment
in
full of all Liabilities and Indebtedness. Anything in this Agreement
to
the contrary notwithstanding, upon any distribution of assets of
MFC upon
any dissolution, winding-up, liquidation or reorganization of MFC,
whether
in bankruptcy, insolvency, reorganization or receivership proceedings
or
upon an assignment for the benefit of creditors or any other marshalling
of the assets and liabilities of MFC or otherwise (subject to the
power of
a court of competent jurisdiction to make other equitable provision
reflecting the rights conferred in this Agreement upon the Liabilities
and
Indebtedness and the holders thereof with respect to payments in
respect
of this Agreement and MLI for the benefit of holders of MLI Preferred
Shares by a lawful plan or reorganization under applicable insolvency
law),
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(i)
|
the
holders of all Liabilities and Indebtedness shall be entitled to
receive
payment in full of any principal thereof, premium, if any, interest,
redemption price, if any, or any other amount payable, and any interest
thereon, due thereon before MLI or any holder of MLI Preferred Shares
is
entitled to receive any payment pursuant to this Agreement in respect
of a
Deficiency Payment;
|
|
(ii)
|
any
payment or distribution of assets of MFC of any kind or character,
whether
in cash, property or securities, to which MLI, for the benefit of
the
holders of MLI Preferred Shares, would be entitled except for the
provisions of this Section 2.5(a)
shall be paid by the liquidating trustee or agent or other Person
making
such payment or distribution, whether a trustee in bankruptcy, a
receiver
or liquidating trustee or otherwise, directly to the holders of
Liabilities and Indebtedness or their representative or representatives
or
to the trustee or trustees under any indenture under which any instruments
evidencing any of such Liabilities and Indebtedness may have been
issued,
as their respective interests may appear, to the extent necessary
to make
payment in full of all such Liabilities and Indebtedness remaining
unpaid,
after giving effect to any concurrent payment or distribution to
the
holders of such Liabilities and Indebtedness in respect thereof;
and
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|
(iii)
|
in
the event that, notwithstanding the foregoing, any payment or distribution
of assets of MFC of any kind or character, whether in cash, property
or
securities, shall be received by MLI, for the benefit of the holders
of
MLI Preferred Shares, before all Liabilities and Indebtedness is
paid in
full, such payment or distribution shall be paid over to the holders
of
such Liabilities and Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture
under
which any instruments evidencing any of such Liabilities and Indebtedness
may have been issued, as their respective interests may appear, for
application to the payment of all Liabilities and Indebtedness remaining
unpaid until all such Liabilities and Indebtedness shall have been
paid in
full, after giving effect to any concurrent payment or distribution
to the
holders of such Liabilities and Indebtedness in respect
thereof.
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(b)
|
Subject
to the payment in full of all Liabilities and Indebtedness, MLI,
for the
benefit of the holders of MLI Preferred Shares, shall be subrogated
to the
rights of the holders of Liabilities and Indebtedness to receive
payments
or distributions of cash, property or securities of MFC applicable
to
Liabilities and Indebtedness until the Deficiency Payment shall be
paid in
full and no payments or distributions to MLI, for the benefit of
the
holders of MLI Preferred Shares, of cash, property or securities
otherwise
distributable to the Liabilities and Indebtedness shall, as between
MFC,
MLI and the holders of MLI Preferred Shares, be deemed to be a payment
by
MFC to or on account of the Deficiency Payment. It is understood
that the
provisions of this paragraph and paragraph (a) above are and are
intended
solely for the purpose of defining the relative rights of MLI, for
the
benefit of the holders of MLI Preferred Shares, on the one hand,
and the
holders of Liabilities and Indebtedness, on the other hand. Nothing
contained in this paragraph or paragraph (a) above or elsewhere in
this
Agreement is intended to or shall impair, as between MFC and MLI,
for the
benefit of the holders of MLI Preferred Shares, the obligation of
MFC,
which is unconditional and absolute, to pay to MLI, in trust for
the
benefit of holders of MLI Preferred Shares, the Deficiency Payment,
as and
when the same shall become due and payable in accordance with the
terms of
this Agreement, nor shall anything herein prevent MLI, for the benefit
of
the holders of MLI Preferred Shares, from exercising all remedies
otherwise permitted by applicable law upon default under this Agreement,
subject to the rights, if any, under this paragraph or paragraph
(a) above
of the holders of Liabilities and Indebtedness in respect of cash,
property or securities of MFC received upon the exercise of any such
remedy.
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|
(c)
|
No
payment by MFC on account of the Deficiency Payment shall be made
unless
full payment of amounts then due for principal, premium, if any,
sinking
funds and interest or any other amount payable on Liabilities and
Indebtedness has been made or duly provided for in money or money’s
worth.
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|
2.6
|
Continuous
Disclosure
|
MFC
shall
furnish and file such continuous disclosure documents of MFC that MFC is
required to furnish and file pursuant to the Continuous Disclosure Exemption
in
the manner and at the times required by the Continuous Disclosure
Exemption.
ARTICLE 3
REIMBURSEMENT
BY MLI
|
3.1
|
Reimbursement
by MLI
|
MLI
agrees that, upon receipt of a written demand from MFC stating that MFC has
made
a Deficiency Payment under this Agreement, MLI shall promptly reimburse MFC
the
amount paid by MFC in respect of the Deficiency Payment plus interest on such
amount computed at Prime Rate plus two percent (2%) per annum from the date
of
MFC’s payment to the date that MLI makes the reimbursement payment due hereunder
(the “Reimbursement
Payment”).
For
greater certainty, MLI’s obligation to make a Reimbursement Payment under this
Agreement shall have the same priority as MLI’s obligations to the respective
class of holders of MLI Preferred Shares.
ARTICLE 4
REPRESENTATIONS
AND
WARRANTIES
Each
of MFC and MLI
represents and warrants to and in favour of the other party the matters set
out
below as of the date hereof.
|
4.1
|
Authorization;
No Contravention
|
The
execution, delivery and performance by the party of this Agreement (i) are
within its powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental body,
agency or official, and do not contravene its constituent documents, and
(ii) do not contravene, or constitute a default under, any provision of
applicable law or regulation, as amended from time to time, or of any judgment,
injunction, order, decree, agreement or other instrument binding upon it or
result in or require the creation or imposition of any lien on any of its assets
other than any contravention, default or lien which would not have a material
adverse effect on its ability to perform its obligations under this
Agreement.
|
4.2
|
Binding
Effect
|
This
Agreement constitutes the legal, valid and binding obligation of the party,
enforceable against it in accordance with its terms.
|
4.3
|
Litigation
|
There
is
no action, suit or proceeding pending against the party or, to its knowledge,
threatened against it before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision (i) which, except as disclosed by MFC in any filings with Canadian
securities regulatory authorities, would have a material adverse effect on
its
ability
to
perform its obligations under this Agreement, or (ii) which in any manner
draws into question the enforceability or validity of this
Agreement.
ARTICLE 5
GENERAL
|
5.1
|
Term
|
This
Agreement shall come into force and be effective as of the date hereof and
shall
terminate and be of no further force and effect (except in respect of any demand
previously made on MFC hereunder) at the earlier of:
|
(a)
|
unless
the parties agree to the contrary, the date as of which no
MLI Preferred Shares (or securities or rights convertible into or
exchangeable for or carrying rights to acquire MLI Preferred Shares,
including MaCS) are outstanding;
|
|
(b)
|
the
date as of which MFC no longer owns, directly or indirectly, all
of the
outstanding common shares of MLI;
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(c)
|
the
date that the Continuous Disclosure Exemption is no longer available
to
MLI; or
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(d)
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the
date MLI commences filing with the local securities regulatory authority
or regulator in British Columbia, Alberta, Saskatchewan, Manitoba,
Ontario, Québec, New Brunswick, Nova Scotia and Newfoundland and Labrador
its own (i) audited annual financial statements including
management’s discussion and analysis (“MD&A”),
(ii) unaudited interim financial statements including MD&A,
(iii) annual information forms, (iv) press releases and material
change reports in the case of material change reports that are also
material changes in the affairs of the Guarantor, and (v) other
material contracts, in each case pursuant to NI 51-102;
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provided
that this Agreement shall not be terminated in respect of the MLI Class A Shares
Series 2, MLI Class A Shares Series 3, MLI Class A Shares Series 4 and the
MLI
Class A Shares Series 5 pursuant to (b),
(c)
or
(d)
above at
any time:
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(i)
|
after
the occurrence of an Automatic Exchange;
or
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|
(ii)
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during
a period when MLI has failed to make full payment of any dividend
declared
on any MLI Preferred Shares on the date required for such payment
or has
failed to make payment in full when due of the Redemption Price,
and in
either case, such failure has not been remedied by payment of such
amounts
in full by MLI or MFC.
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5.2
|
Continuing
Guarantee; Reinstatement in Certain
Circumstances
|
The
guarantee contained in this Agreement is a continuing guarantee and MFC’s
obligations hereunder shall remain in full force and effect until the earlier
of
the indefeasible payment in full of the Deficiency Payment or termination of
this Agreement pursuant to section 5.1
provided, however, that this Agreement shall not be construed to create any
right in any Person other than MLI and holders of MLI Preferred Shares and
MaCS
and their respective successors and permitted assigns, or to be a contract
in
whole or in part for the benefit of any Person other than MLI and holders of
MLI
Preferred Shares and MaCS and their respective successors and permitted assigns.
If at any time any payment of
any
amount which would otherwise form part of the Deficiency Amount in respect
of
any particular class of MLI Preferred Shares is rescinded or must otherwise
be
restored or returned upon the insolvency, bankruptcy or reorganization of MLI
or
otherwise, the obligations of MFC hereunder with respect to such Deficiency
Amount shall be reinstated as though such payment had been due but not made
at
such time.
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5.3
|
Notices
to Parties
|
All
notices and other communications hereunder shall be in writing and shall be
deemed given when delivered personally, telecopied (which is confirmed) or
dispatched (postage prepaid) to a nationally recognized overnight courier
service with overnight delivery instructions, in each case addressed to the
particular party as follows:
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(a)
|
If
to MFC, at:
|
Manulife
Financial Corporation
000 Xxxxx
Xxxxxx Xxxx
Xxxxxxx,
Xxxxxxx
X0X 0X0
Attention: Treasurer
Telecopier
Number: (000) 000-0000
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(b)
|
If
to MLI, at:
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The
Manufacturers Life
Insurance
Company
000 Xxxxx
Xxxxxx Xxxx
Xxxxxxx,
Xxxxxxx
X0X 0X0
Attention: Treasurer
Telecopier
Number: (000) 000-0000
or
at
such other address of which any party may, from time to time, advise the other
party by notice in writing given in accordance with the foregoing.
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5.4
|
Assignment
|
No
party
hereto may assign this Agreement or any of its rights, interests or obligations
under this Agreement (whether by operation of law or otherwise) without the
written consent of the other party.
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5.5
|
Binding
Effect
|
This
Agreement shall be binding upon, enure to the benefit of and be enforceable
by
the parties hereto and their respective successors and assigns.
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5.6
|
Third
Party Beneficiaries
|
It
is the intention of MFC
to constitute MLI as trustee for holders of MLI Preferred Shares and MaCS
of the covenants of MFC under this Agreement and MLI agrees to accept such
trust
and to hold and enforce such covenants on behalf of such persons.
Notwithstanding anything to the contrary in this Agreement and for greater
certainty, MLI is entitled to act in its own interests to take, to agree to
take
or to consent to any of the matters described in section 5.1, and in connection
with any amendment, modification or waiver described in section 5.7, without
regard to any interest of the holders of MLI Preferred Shares and
MaCS.
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5.7
|
Further
Assurances
|
Each
of
the parties hereto shall promptly do, make, execute or deliver, or cause to
be
done, made executed or delivered, all such further acts, documents and things
as
the other party to this Agreement may reasonably require from time to time
for
the purpose of giving effect to this Agreement and shall use reasonable efforts
and take all such steps as may be reasonably within its power to implement
to
their full extent the provisions of this Agreement.
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5.8
|
Amendments,
Modifications
|
This
Agreement may not be amended or modified, or any provision of it waived, except
by an agreement in writing executed by MFC and MLI and subject to any required
regulatory approvals. For greater certainty, no amendment, modification or
waiver, whether or not adverse to MLI or the holders of MLI Preferred Shares
or
MaCS, will require the approval of the holders of MLI Preferred Shares or MaCS
or any other Person.
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5.9
|
Waiver
|
MFC
hereby irrevocably waives promptness, diligence, acceptance hereof, presentment,
demand, filing of claims with a court in the event of the merger, amalgamation,
reorganization, insolvency, bankruptcy or similar proceeding affecting MLI
or
its assets or change in corporate structure or ownership of MLI, protest and
any
and all other notice not provided for herein and, except as provided for herein,
any requirement that at any time, or any other Person exhaust any right or
take
any action against MLI or any other Person and any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge, release or
defense of MFC or that might otherwise limit recourse against MFC.
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5.10
|
No
Waiver; Remedies
|
No
failure on the part of MLI or any holder of MLI Preferred Shares or MaCS 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.
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5.11
|
Stay
of Liability to Pay or Time for
Payment
|
Without
limiting any other provision of this Agreement, if the liability to pay or
the
time for payment of any Deficiency Amount is stayed upon the insolvency,
bankruptcy or reorganization of MLI, the Deficiency Payment otherwise subject
to
payment hereunder shall nonetheless be payable by
MFC
hereunder to MLI, in trust for the benefit of holders of MLI Preferred Shares
outstanding as of the Triggering Date, in accordance with the terms
hereof.
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5.12
|
Governing
Laws; Consent to
Jurisdiction
|
This
Agreement shall be governed by and construed in accordance with the laws of
the
Province of Ontario and the laws of Canada applicable therein. Each party hereby
irrevocably attorns to the jurisdiction of the courts of the Province of Ontario
in respect of all matters arising under or in relation to this
Agreement.
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5.13
|
Severability
|
If
any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other covenants and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
|
5.14
|
Counterparts
|
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original but all of which together shall constitute one and the same
instrument.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed and delivered
as
of the date first written above as a contract under seal with the intention
that
the parties be bound whether or not there is consideration for this Agreement
notwithstanding any references to consideration in this Agreement.
|
MANULIFE
FINANCIAL CORPORATION
|
|
|
|
By: /s/
Xxxxx X. Xxxxxxxxxxx
|
|
Name: Xxxxx
X. Xxxxxxxxxxx
|
|
|
Title: Senior
Executive Vice President
and Chief Financial Officer
|
|
(seal)
|
THE
MANUFACTURERS LIFE INSURANCE COMPANY
|
|
|
|
By: /s/
Xxxxx X. Xxxxxxxxxxx
|
|
Name: Xxxxx
X. Xxxxxxxxxxx
|
|
|
Title: Senior
Executive Vice President
and Chief Financial Officer
|
|
(seal)
