Everest Re Capital Trust
Preferred Securities
(liquidation amount $25 per preferred security)
guaranteed to the extent set forth in the Guarantee by
Everest Reinsurance Holdings, Inc.
Underwriting Agreement
November 8, 2002
To the Underwriters named in the respective
Pricing Agreements hereinafter described.
Ladies and Gentlemen:
From time to time Everest Re Capital Trust, a statutory trust formed under the
laws of the State of Delaware (the "Trust"), and Everest Reinsurance Holdings,
Inc., a Delaware corporation ("Guarantor"), as depositor of the Trust, propose
to enter into one or more Pricing Agreements (each a "Pricing Agreement") in the
form of Annex I hereto, with such additions and deletions as the parties thereto
may determine, and, subject to the terms and conditions stated herein and
therein, which shall provide that the Trust shall issue and sell to the firms
named in Schedule I to the applicable Pricing Agreement (such firms constituting
the "Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its Preferred Securities (the "Securities"),
specified in Schedule I to such Pricing Agreement (with respect to such Pricing
Agreement, the "Firm Designated Securities"), representing undivided beneficial
interests in the assets of the Trust, guaranteed by the Guarantor to the extent
set forth in the guarantee agreement (the "Guarantee") identified in such
Pricing Agreement. If specified in such Pricing Agreement, the Trust and the
Guarantor may grant to the Underwriters the right to purchase at their election
an additional number of Securities as provided in Section 3 hereof (the
"Optional Securities"). The Firm Designated Securities and the Optional
Securities, if any, which the Underwriters elect to purchase pursuant to Section
3 hereof are herein collectively called the "Designated Securities". The terms
and rights of any particular issuance of Designated Securities shall be as
specified in the Pricing Agreement relating thereto and in or pursuant to the
amended and restated trust agreement (the "Trust Agreement") identified in the
Pricing Agreement. The proceeds of the sale of the Designated Securities and of
common securities of the Trust (the "Common Securities") sold to the Guarantor
are to be invested in junior
subordinated debt securities of the Guarantor (the "Subordinated Debt
Securities"), to be issued pursuant to a junior subordinated indenture (the
"Base Indenture"), as supplemented by a first supplemental indenture thereto
(the "Supplemental Indenture" and, together with the Base Indenture, the
"Indenture") identified in the Pricing Agreement. Upon the occurrence of certain
events described in the Trust Agreement, the Subordinated Debt Securities may be
distributed to the holders of the Designated Securities and the Common
Securities.
As used in this Agreement (i) the term "Parent" refers to Everest Re Group,
Ltd., (ii) the phrase "Material Adverse Effect on Guarantor" means a material
adverse effect on the consolidated financial position, shareholders' equity or
results of operations of the Guarantor and its subsidiaries taken as a whole and
(iii) the phrase "Material Adverse Effect on Parent" means a material adverse
effect on the consolidated financial position, shareholders' equity or results
of operations of the Parent and its subsidiaries taken as a whole.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"), if any.
The term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to an Underwriter or Underwriters who act
on its or their own behalf without any firm being designated as its or their
representatives. This Underwriting Agreement shall not be construed as an
obligation of the Trust to sell any of the Securities or as an obligation of any
of the Underwriters to purchase any of the Securities. The obligation of the
Trust to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate number of the Firm Designated
Securities, the maximum number of Optional Designated Securities, if any, the
initial public offering price of such Firm Designated Securities and Optional
Designated Securities or the manner of determining such price, the terms of the
Designated Securities and the terms of the corresponding Subordinated Debt
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters, the number of such Designated
Securities to be purchased by each Underwriter and the commission, if any,
payable to the Underwriters with respect thereto and shall set forth the date,
time and manner of delivery of such Designated Securities and Optional
Securities, if any, and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the Trust Agreement or the registration
statement and prospectus with respect thereto) the terms of such Designated
Securities. A Pricing Agreement shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. If there is more than
one Underwriter, the obligations of such Underwriters under this Agreement and
each Pricing Agreement shall be several and not joint.
2. The Guarantor and the Trust jointly and severally represent and
warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-97367) and one
or more pre-effective amendments thereto (the "Initial Registration
Statement") in respect of the Securities, the Subordinated Debt Securities,
the Guarantee and certain other debt securities, preferred stock, common
stock, warrants, stock purchase contracts, stock purchase units or a
combination thereof have been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered or
to be delivered to the Representatives and, excluding exhibits to the
Initial Registration Statement, but including all documents incorporated by
reference in the prospectus included therein, to the Representatives for
each of the other Underwriters, if any, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
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Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed, or transmitted
for filing, with the Commission (other than prospectuses filed pursuant to
Rule 424(b) of the rules and regulations of the Commission under the Act,
each in the form heretofore delivered to the Representatives); and no stop
order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or, to the best of the Trust's and Guarantor's knowledge,
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement, any
post-effective amendments thereto and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the Initial Registration
Statement became effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Securities, the Subordinated
Debt Securities and the Guarantee, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on or
prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Initial Registration Statement shall be
deemed to refer to and include any annual report of the Guarantor or the
Parent filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement; and any reference
to the Prospectus as amended or supplemented shall be deemed to refer to
the Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference therein as of the
date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Trust or the
Guarantor by any Underwriter of
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Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Trust
or the Guarantor by any Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(d) None of the Trust, the Guarantor, any of the Guarantor's
subsidiaries, the Parent, or any of the Parent's subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or material
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree material to the Trust, the
Guarantor, any of the Guarantor's subsidiaries, the Parent, or any of the
Parent's subsidiaries, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any material change in the capital stock or any material change in the
long-term debt of the Trust, the Guarantor, any of the Guarantor's
subsidiaries, the Parent, or any of the Parent's subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the
Trust, the Guarantor, any of the Guarantor's subsidiaries, the Parent, or
any of the Parent's subsidiaries, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Parent, the Guarantor and each of their respective
subsidiaries has been duly incorporated and are validly existing as
corporations in good standing (to the extent such concept is relevant)
under the laws of the jurisdiction of its incorporation, with corporate
power and authority to own their respective properties and conduct their
respective businesses as described in the Prospectus, and each of them has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing (to the extent such concept is relevant)
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect on the Guarantor or the Parent; the Trust has been duly
organized and is validly existing as a statutory trust in good standing
under the laws of Delaware, with corporate power and authority to own
properties and conduct business as described in the Prospectus; the Trust
and the Guarantor have full corporate (and other) power and authority to
enter into this Agreement and the Pricing Agreement and to carry out all
the terms and provisions hereof and thereof to be carried out by it; this
Agreement and the Pricing Agreement have been duly authorized, executed and
delivered by the Trust and the Guarantor; the Trust has conducted and will
conduct no business other than the transactions contemplated by this
Agreement and described in the Prospectus; except for the trust agreement
dated September 17, 1999, as amended on July 23, 2002, the Trust is not a
party to, or otherwise bound by, any agreement and at the Time of Delivery
will not be a party to, or otherwise bound by, any Agreement other than
this Agreement, the Pricing
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Agreement, the Trust Agreement and the agreements and instruments
contemplated by the Trust Agreement and described in the Prospectus; and
the Trust is not a party to or subject to any action, suit or proceeding of
any nature; and the Trust is and will, under current law, be classified for
United States Federal Income Tax purposes as a grantor trust and not as an
association taxable as a corporation;
(f) The Guarantor and Parent have an authorized capitalization as set
forth in the Prospectus, and all of the issued and outstanding shares of
capital stock of the Guarantor and the Parent have been duly and validly
authorized and issued and are fully paid and non-assessable; there are no
outstanding beneficial interests in the Trust;
(g) The Securities have been duly authorized on behalf of the Trust
by the depositor of the Trust and upon delivery by the Trust to the
Underwriters against payment therefor as set forth in this Agreement, will
be duly and validly issued and are fully paid and non-assessable beneficial
interests in the Trust and will be entitled to the benefits provided by the
Trust Agreement, which will be substantially in the form filed as an
exhibit to the Registration Statement; the Securities conform to the
description thereof contained in the Prospectus;
(h) The holders of the Securities (the "Securityholders") will be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware;
(i) The Common Securities have been duly authorized on behalf of the
Trust by the depositor of the Trust and upon delivery by the Trust to the
Guarantor against payment therefor as set forth in the Trust Agreement,
will be duly and validly issued and are fully paid and non-assessable
beneficial interests in the Trust; the issuance of the Common Securities is
not subject to preemptive or other similar rights; the Common Securities
conform to the description thereof contained in the Prospectus; and at each
Time of Delivery, all of the issued and outstanding Common Securities of
the Trust will be directly owned by the Guarantor free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
(j) The Guarantee, the Trust Agreement, the Expense Agreement (as
defined in the Trust Agreement), the Subordinated Debt Securities and the
Indenture (the Guarantee, the Trust Agreement, the Expense Agreement, the
Subordinated Debt Securities and the Indenture being collectively referred
to as the "Guarantor Agreements") have each been duly authorized and when
validly executed and delivered by the Guarantor and, in the case of the
Guarantee, by the Guarantee Trustee (as defined in the Guarantee), in the
case of the Trust Agreement, by the Trustees (as defined in the Trust
Agreement) and, in the case of the Indenture, by the Trustee named therein
(the "Debt Securities Trustee"), and, in the case of the Subordinated Debt
Securities, when validly issued by the Guarantor and validly authenticated
and delivered by the Debt Securities Trustee, will constitute valid and
legally binding obligations of the Guarantor, enforceable in accordance
with their respective terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing; the Trust
Agreement, the Indenture and the Guarantee have been duly qualified under
the Trust Indenture Act; the Subordinated Debt Securities are entitled to
the benefits of the Indenture; the Guarantor Agreements will be in
substantially the forms filed as exhibits to the Registration Statement and
conform to the description thereof in the Prospectus;
(k) The issue and sale of the Securities and the Common Securities,
the compliance by the Trust with all of the provisions of the Securities
and any Over-allotment Option (as defined in Section 3 hereof) the purchase
of the Subordinated Debt Securities by the Trust, the execution, delivery
and
5
performance by the Trust of the Trust Agreement, this Agreement and the
Pricing Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Trust is a party or by which
the Trust is bound or to which any of the property or assets of the Trust
is subject, nor will such action result in any violation of the provisions
of (A) the organizational documents of the Trust or (B) any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Trust or any of its properties, except, in the
case of this clause (B), for any such violation which, individually or in
the aggregate, would not have a Material Adverse Effect on the Guarantor or
a material adverse effect on the consummation by the Trust of the
transactions contemplated by this Agreement and the Pricing Agreement; and
no consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the issue and sale of the Designated Securities and the Common Securities
by the Trust, the purchase of the Subordinated Debt Securities, or the
consummation by the Trust of the transactions contemplated by this
Agreement, the Pricing Agreement or any Over-allotment Option, except such
as have been, or will have been prior to the First Time of Delivery,
obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(l) The issue by the Guarantor of the Guarantee, the compliance by
the Guarantor with all of the provisions of this Agreement and the Pricing
Agreement, the execution, delivery and performance by the Guarantor of the
Guarantor Agreements, and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Guarantor or any of its
subsidiaries is a party or by which the Guarantor or any of its
subsidiaries is bound or to which any of the property or assets of the
Guarantor or any of its subsidiaries is subject, except for such conflicts,
breaches, violations or defaults as would not, individually or in the
aggregate, have a Material Adverse Effect on the Guarantor or a material
adverse effect on the consummation by the Guarantor of the transactions
contemplated by this Agreement and the Pricing Agreement, nor will such
action result in any violation of provisions of (A) the Certificate of
Incorporation and Bylaws of the Guarantor or the organizational documents
of any of its subsidiaries or (B) any statute or any order, rule or
regulation of any court or governmental agency or body (including, without
limitation, any insurance regulatory agency or body) having jurisdiction
over the Guarantor or any of its subsidiaries or any of their properties,
except, in the case of this clause (B), for any such violation which,
individually or in the aggregate, would not have a Material Adverse Effect
on the Guarantor; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue of the Guarantee or the
consummation by the Guarantor of the other transactions contemplated by
this Agreement or the Pricing Agreement, except such as have been, or will
have been prior to the First Time of Delivery, obtained under the Act and
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase of the Securities and
distribution of the Securities by the Underwriters;
(m) The execution, delivery and performance by Parent of the
Supplemental Indenture will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Parent or any of its
subsidiaries is a party or by which the Parent or any of its subsidiaries
is bound or to which any of the property or assets of the Parent or any of
its subsidiaries is subject,
6
except for such conflicts, breaches, violations or defaults as would not,
individually or in the aggregate, have a Material Adverse Effect on the
Parent, nor will such action result in any violation of provisions of (A)
the Memorandum of Association or Bye-Laws of the Parent or the
organizational documents of any of its subsidiaries or (B) any statute or
any order, rule or regulation of any court or governmental agency or body
(including, without limitation, any insurance regulatory agency or body)
having jurisdiction over the Parent or any of its subsidiaries or any of
their properties, except, in the case of this clause (B), for any such
violation which, individually or in the aggregate, would not have a
Material Adverse Effect on the Parent; and the Supplemental Indenture has
been duly authorized and when validly executed and delivered by the Parent
will constitute a valid and legally binding obligation of the Parent,
enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair
dealing;
(n) The statements set forth (A) in the Prospectus under the captions
"Description of the Debt Securities", "Description of the Trust Preferred
Securities", "Description of the Trust Preferred Securities Guarantee" and
"Relationship of the Trust Preferred Securities, the Preferred Securities
Guarantee and the Debt Securities Held by Everest Capital Trust", insofar
as they purport to constitute a summary of the terms of the Securities, the
Subordinated Debt Securities and the Guarantee, and under the caption "Plan
of Distribution", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects; and (B) in the Prospectus as amended or supplemented
under the captions "Summary Information - Q&A", "Risk Factors", "Terms of
the Preferred Securities" and "Terms of the Junior Subordinated Debt
Securities", insofar as they purport to constitute a summary of the terms
of the Securities, the Subordinated Debt Securities and the Guarantee and
"United States Federal Income Tax Consequences", "ERISA Considerations" and
"Underwriting", insofar as they purport to describe the provisions of the
laws and documents referred to therein, will be accurate and complete in
all material respects;
(o) None of the Guarantor, any of the Guarantor's subsidiaries, the
Parent or any of the Parent's subsidiaries is in violation of its
Certificate of Incorporation, Memorandum of Association, Bylaws or other
organizational documents, as applicable, or in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other material agreement or instrument to which it is a party or by
which it or any of its properties may be bound, except for such as
individually or in the aggregate would not have a Material Adverse Effect
on the Guarantor or Parent;
(p) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Trust, the Guarantor, any of
the Guarantor's subsidiaries, the Parent or any of the Parent's
subsidiaries is a party or of which any property of the Trust, the
Guarantor, any of the Guarantor's subsidiaries, the Parent or any of the
Parent's subsidiaries is the subject, which, individually or in the
aggregate might reasonably be expected to result in a Material Adverse
Effect on the Guarantor or the Parent; and, to the best of the Trust's and
the Guarantor's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(q) No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on
behalf of the Underwriters to Bermuda or any political subdivision or
taxing authority thereof or therein in connection with the transactions
contemplated herein;
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(r) Neither the Trust nor the Guarantor is, and after giving effect
to the offering and sale of the Securities, will not be an "investment
company", as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
(s) None of the Trust, the Guarantor, any of the Guarantor's
subsidiaries, the Parent or any of the Parent's subsidiaries has taken,
directly or indirectly, any action which was designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Trust,
the Guarantor or the Parent to facilitate the sale or resale of the
Securities;
(t) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Guarantor and its subsidiaries and the Parent and its
subsidiaries, are independent public accountants as required by the Act and
the rules and regulations of the Commission thereunder;
(u) The consolidated financial statements and financial statement
schedules of the Parent and its consolidated subsidiaries and Guarantor and
its consolidated subsidiaries included in the Registration Statement and
the Prospectus fairly present in all material respects the financial
position of the Parent and the Guarantor and their respective consolidated
subsidiaries and the results of operations and changes in financial
condition and cash flows as of the dates and periods therein specified.
Such financial statements and financial statement schedules have been
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except
as otherwise noted therein);
(v) The Guarantor, the Guarantor's subsidiaries, the Parent and the
Parent's subsidiaries, when necessary, are duly licensed to conduct an
insurance or a reinsurance business, as the case may be, under the
insurance statutes of each jurisdiction in which the conduct of its
business requires such licensing, except for such jurisdictions in which
the failure of any of them to be so licensed would not, individually or in
the aggregate, have a Material Adverse Effect on the Guarantor or the
Parent. The Guarantor, the Guarantor's subsidiaries, the Parent and the
Parent's subsidiaries have made all required filings under applicable
insurance holding company statutes in each jurisdiction where such filings
are required, except for such jurisdictions in which the failure to make
such filings would not, individually or in the aggregate, have a Material
Adverse Effect on the Guarantor or the Parent. The Guarantor, the
Guarantor's subsidiaries, the Parent and the Parent's subsidiaries have all
other necessary authorizations, approvals, orders, consents, certificates,
permits, registrations and qualifications of and from all insurance
regulatory authorities necessary to conduct their respective businesses as
described in the Prospectus, except where the failure to have such
authorizations, approvals, orders, consents, certificates, permits,
registrations or qualifications would not, individually or in the
aggregate, have a Material Adverse Effect on the Guarantor or the Parent,
and none of the Guarantor, any of the Guarantor's subsidiaries, the Parent
or any of the Parent's subsidiaries has received any notification from any
insurance regulatory authority to the effect that any additional
authorization, approval, order, consent, certificate, permit, registration
and qualification needs to be obtained by any of them, in any case, where
it could be reasonably expected that (x) any of them would be required
either to obtain such additional authorization, approval, order, consent,
certificate, permit, registration or qualification or to cease or otherwise
limit the writing of certain business and (y) the failure to obtain such
additional authorization, approval, order, consent, certificate, permit,
registration or qualification or the limiting of the writing of such
business would have a Material Adverse Effect on the Guarantor or the
Parent; and no insurance regulatory authority having jurisdiction over the
Guarantor, any of the Guarantor's subsidiaries, the Parent or any of the
Parent's subsidiaries has issued any order or decree impairing, restricting
or prohibiting the payment of dividends by or to any of them; and
8
(w) Each certificate signed by any officer of the Trust or the
Guarantor and delivered to the Representatives or counsel for the
Underwriters pursuant to this Agreement shall be deemed to be a
representation and warranty by the Trust or the Guarantor, as the case may
be, and not by such officer in an individual capacity, to each Underwriter
as to the matters covered thereby.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
the Designated Securities, the several Underwriters propose to offer the
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
The Trust and the Guarantor may specify in the Pricing Agreement applicable
to any Designated Securities that the Trust thereby grants to the Underwriters
the right (an "Over-allotment Option") to purchase at their election up to the
number of Optional Securities set forth in such Pricing Agreement, on the terms
set forth in the Prospectus as amended or supplemented, for the sole purpose of
covering over-allotments in the sale of the Designated Securities. Any such
election to purchase Optional Securities may be exercised by written notice from
the Representatives to the Guarantor, given within a period specified in the
Pricing Agreement, setting forth the aggregate number of Optional Securities to
be purchased and the date on which such Optional Securities are to be delivered,
as determined by the Representatives but in no event earlier than the First Time
of Delivery (as defined in Section 4 hereof) or, unless the Representatives, the
Guarantor and the Trust otherwise agree in writing, earlier than or later than
the respective number of business days after the date of such notice set forth
in such Pricing Agreement.
The number of Optional Securities, if any, to be added to the number of
Designated Securities to be purchased by each Underwriter (as set forth in
Schedule I to the applicable Pricing Agreement) shall be, in each case, the
number of Optional Securities set forth in the applicable Pricing Agreement;
provided that, if such number of Optional Securities is not set forth in the
applicable Pricing Agreement, the number of Optional Securities to be so added
shall be, in each case, that proportion of Optional Securities which the number
of Designated Securities to be purchased by such Underwriter under such Pricing
Agreement bears to the aggregate number of Designated Securities (rounded as the
Representatives may determine to the nearest 100 securities). The total number
of Designated Securities to be purchased by all the Underwriters pursuant to
such Pricing Agreement shall be the aggregate number of Designated Securities
set forth in Schedule I to such Pricing Agreement plus the aggregate number of
Optional Securities which the Underwriters elect to purchase pursuant to such
Pricing Agreement.
4. Certificates for the Designated Securities and the Optional
Securities, if any, to be purchased by each Underwriter pursuant to the Pricing
Agreement relating thereto, in definitive form and in such authorized
denominations and registered in such names as the Representatives may request
upon at least 48 hours' prior notice to the Trust, shall be delivered by or on
behalf of the Trust to the Representatives for the account of each such
Underwriter, against payment by each such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Trust to the Representatives at least forty-eight hours
in advance of the Time of Delivery (as defined in this Section 4) as specified
in such Pricing Agreement, (i) with respect to the Designated Securities, all in
the manner and at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives and
the Trust may agree upon in writing, such time and date being herein called the
"First Time of Delivery" and (ii) with respect to the Optional Securities, if
any, in the manner and at the time and date specified by the Representatives in
the written notice given by the Representatives of the Underwriters' election to
purchase such Optional Securities, or at such other time and date as the
Representatives and the Trust may agree upon in writing, such time and date, if
not the First Time of Delivery, herein called the "Second Time of Delivery".
Each such time and date for delivery is herein called a "Time of Delivery".
9
5. The Trust and the Guarantor jointly and severally agree with each of
the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended or supplemented in relation
to the Designated Securities, the Subordinated Debt Securities and the
Guarantee in a form approved by the Representatives and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of the Pricing Agreement relating to the applicable
Designated Securities or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to
the Registration Statement or Prospectus as amended or supplemented after
the date of the Pricing Agreement relating to such Securities and prior to
the Time of Delivery for such Securities which shall be disapproved by the
Representatives for such Securities promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment or
supplement after such Time of Delivery and furnish the Representatives with
copies thereof; to file promptly (or cause to be filed promptly) all
reports and any definitive proxy or information statements required to be
filed by the Guarantor or Parent with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery
of a prospectus is required in connection with the offering or sale of such
Securities, Subordinated Debt Securities or Guarantee and during such same
period to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance by
the Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Securities, Subordinated Debt
Securities or Guarantee of the suspension of the qualification of such
Securities, Subordinated Debt Securities or Guarantee for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating
to the Securities, Subordinated Debt Securities or Guarantee or suspending
any such qualification, to promptly use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities or the
Subordinated Debt Securities for offering and sale under the securities
laws of such jurisdictions in the United States as the Representatives may
request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of such Securities, provided that in
connection therewith neither the Trust nor the Guarantor shall be required
to qualify as a foreign corporation or as a dealer in securities or to file
a general consent to service of process in any jurisdiction or to subject
itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise subject;
(c) Prior to 10:00 A.M., New York City time, on the second New York
Business Day (as defined in Section 15 hereof) next succeeding the date of
this Agreement and from time to time, to furnish the Underwriters with
written and electronic copies of the Prospectus as amended or supplemented
in New York City in such quantities as the Representatives may reasonably
request, and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of the Securities or the Subordinated
Debentures and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not
10
misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act,
to notify the Representatives and upon their request to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many written and electronic copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, provided that any such
amended Prospectus or supplement to the Prospectus required to be delivered
following the expiration of nine months after the time of issue of the
Prospectus shall be prepared and furnished at the expense of the
Underwriters;
(d) In the case of the Guarantor, to make generally available to its
Securityholders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement, an
earnings statement (as defined in Rule 158(c) under the Act) of the
Guarantor and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Trust, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the later of (i) the termination of trading restrictions under Regulation M
promulgated under the Act for such Designated Securities, as notified to
the Guarantor by the Representatives and (ii) 30 days after the last Time
of Delivery for such Designated Securities, not to offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder, any Securities,
any other beneficial interests in the assets of the Trust, or any preferred
securities or any other securities of the Trust or the Guarantor, as the
case may be, that are substantially similar to such Designated Securities
(including any guarantee of such securities) or substantially similar to
the Subordinated Debt Securities (that are subordinated to the Senior
Indebtedness (as defined in the Indenture) of the Guarantor in a manner
substantially similar to the subordination of the Subordinated Debt
Securities) or any securities that are convertible into or exchangeable
for, or that represent the right to receive Securities, preferred
securities or any such substantially similar securities of either the Trust
or the Guarantor without the prior written consent of the Representatives;
(f) In the case of the Guarantor, to issue the Guarantee concurrently
with the issue and sale of the Securities as contemplated herein or in the
Pricing Agreement and to enter into the Expense Agreement as set forth in
the Trust Agreement;
(g) In the case of the Guarantor, to purchase the Common Securities
and to issue and sell the Subordinated Debt Securities as contemplated
herein or in the Pricing Agreement;
(h) To use their reasonable best efforts to remain eligible to use
Form S-3 under the Act;
(i) To use their best efforts to cause the Designated Securities to
be listed on the New York Stock Exchange;
(j) To use the net proceeds received by each of them from the sale of
the Designated Securities and the Subordinated Debt Securities, as
applicable, pursuant to this Agreement and the Pricing Agreement in the
manner set forth in the Prospectus as amended or supplemented under the
caption "Use of Proceeds";
(k) If the Trust elects to rely upon Rule 462(b), the Trust shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Trust shall at the time of filing either pay the
Commission the
11
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the
Act; and
(l) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Parent's and
the Guarantor's trademarks, servicemarks and corporate logo for use on the
website, if any, operated by such Underwriter for the purpose of
facilitating the on-line offering of the Securities (the "License");
provided, however, that the License shall be used solely for the purpose
described above, is granted without any fee and may not be assigned or
transferred.
6. The Trust and the Guarantor covenant and jointly and severally agree
with the several Underwriters to pay the following: (i) the fees, disbursements
and expenses of the Trust's and Guarantor's counsel and accountants in
connection with the registration of the Designated Securities, the Guarantee and
the Subordinated Debt Securities under the Act and all other out of pocket
expenses in connection with the preparation, printing and filing of the
Registration Statement, the Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Pricing Agreement, the
Trust Agreement, the Indenture, the Guarantee, any Blue Sky or similar
investment surveys or memoranda, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Designated Securities; (iii) all expenses in connection with
the qualification of the Designated Securities, the Guarantee and the
Subordinated Debentures, for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification and in
connection with any Blue Sky memoranda; (iv) any fees charged by securities
rating services for rating the Securities and the Subordinated Debt Securities;
(v) any filing fees incident to, and the reasonable fees and disbursements of
counsel for the Underwriters in connection with, any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Designated Securities and the issuance of the Guarantee and the Subordinated
Debt Securities; (vi) the cost of preparing certificates for the Designated
Securities and the Subordinated Debt Securities; (vii) the cost and charges of
any registrar or paying agent; (viii) the fees and expenses of any Trustee,
Administrative Trustee, Property Trustee, Debt Securities Trustee and Guarantee
Trustee, and any agent of any trustee and fees and disbursements of counsel for
any trustee in connection with the Trust Agreement, Indenture, Guarantee and the
Securities; (ix) all expenses and taxes arising as a result of the issuance,
sale and delivery of the Designated Securities to or for the respective accounts
of the Underwriters; (x) the cost of qualifying the Securities with the
Depository Trust Company; (xi) all fees and expenses in connection with the
listing of the Securities on the New York Stock Exchange and the cost of
registering the Securities under Section 12 of the Exchange Act; and (xii) all
other costs and expenses incident to the performance of its obligations
hereunder and under any Over-allotment Options which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Trust and the
Guarantor in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that the Trust and the
Guarantor shall have performed all of its obligations hereunder theretofore to
be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities, Subordinated Debt Securities and Guarantee shall
have been filed with the Commission pursuant to
12
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Trust and the Guarantor have elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no
stop order suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests
for additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, shall have
furnished to the Representatives such written opinion or opinions, dated
the Time of Delivery for such Designated Securities, with respect to the
matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Mayer, Brown, Xxxx & Maw, U.S. counsel for the Trust and the
Guarantor, shall have furnished to you their written opinion, dated the
Time of Delivery for such Designated Securities, in form and substance
reasonably satisfactory to you, to the effect that:
(i) Each of this Agreement and the Pricing Agreement has been
(A) duly authorized, executed and delivered by the Guarantor and (B)
duly executed and delivered by the Guarantor, as Depositor on behalf
of the Trust;
(ii) The statements set forth (A) in the Prospectus under the
captions "Description of the Debt Securities", "Description of the
Trust Preferred Securities", "Description of the Trust Preferred
Securities Guarantee" and "Relationship of the Trust Preferred
Securities, the Preferred Securities Guarantee and the Debt Securities
Held by Everest Capital Trust", insofar as they purport to constitute
a summary of the terms of the Securities, the Subordinated Debt
Securities and the Guarantee, and under the caption "Plan of
Distribution", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate and complete
in all material respects; and (B) in the Prospectus as amended or
supplemented under the captions "Summary Information - Q&A", "Terms of
the Preferred Securities" and "Terms of the Junior Subordinated Debt
Securities", insofar as they purport to constitute a summary of the
terms of the Securities, the Subordinated Debt Securities and the
Guarantee and "ERISA Considerations" and "Underwriting", insofar as
they purport to describe the provisions of the laws and documents
referred to therein, will be accurate and complete in all material
respects;
(iii) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made
prior to the Time of Delivery for the Designated Securities (other
than the financial statements and related schedules and other
financial data included therein or omitted therefrom, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder;
(iv) Neither the Trust nor the Guarantor is an "Investment
Company", as such term is defined in the Investment Company Act;
(v) The Guarantor has been duly incorporated and is validly
existing as a corporation under the laws of Delaware, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
13
(vi) The Guarantor Agreements have been duly authorized,
executed and delivered by the Guarantor and the Guarantor Agreements
(other than the Trust Agreement) constitute valid and legally binding
obligations of the Guarantor, enforceable in accordance with their
respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law); and the Trust
Agreement, the Indenture and the Guarantee have been duly qualified
under the Trust Indenture Act;
(vii) The Subordinated Debt Securities have been duly
authorized, executed, issued and delivered by the Guarantor,
constitute valid and binding obligations of the Guarantor, are
entitled to the benefits provided by the Indenture and are enforceable
in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles (regardless of whether such
enforceability is considered in a proceeding at equity or in law);
(viii) The Registration Statement is effective under the Act and,
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act or proceedings therefor initiated or threatened by the Commission;
and
(ix) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue of the Guarantee or the Subordinated
Debt Securities or the consummation by the Guarantor of the
transactions contemplated by this Agreement or the Pricing Agreement,
except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters.
Such counsel shall also state that although it does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus as amended or
supplemented, except for those referred to in the opinion in subsection
(ii) of this Section 7(c), no facts have come to its attention that have
caused it to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Trust, the Guarantor
or the Parent prior to the Time of Delivery (other than the financial
statements and related schedules and other financial data included therein
or omitted therefrom, as to which such counsel need express no belief)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus
as amended or supplemented or any further amendment or supplement thereto
prior to the Time of Delivery (other than the financial statements and
related schedules and other financial data included therein or omitted
therefrom, as to which such counsel need express no belief) contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of the Time of
Delivery, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Trust or the Guarantor prior to
the Time of Delivery (other than the financial statements and related
schedules and other financial data included therein or omitted therefrom,
as to which such counsel need express no belief) contains an untrue
statement of a material fact or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
14
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Trust and Guarantor and of public officials.
Such opinions shall be limited to the federal laws of the United States and
the laws of New York State. The parties acknowledge that, in rendering such
opinions, such counsel is not rendering any opinion with respect to the
insurance laws or regulations or any securities laws other than U.S.
federal securities laws.
References to the Registration Statement and the Prospectus in this
paragraph (c) shall include any amendment or supplement thereto at the date
of such opinion.
(d) Xxxxxx X. Xxxxxxx, Vice President, General Counsel and Secretary
of the Parent, shall have furnished to you a written opinion, dated such
Time of Delivery, in form and substance reasonably satisfactory to you, to
the effect that:
(i) The Guarantor and the Guarantor's subsidiaries, where
necessary, are duly licensed to conduct an insurance or a reinsurance
business, as the case may be, under the insurance statutes of each
jurisdiction in which the conduct of its business requires such
licensing, except for such jurisdictions in which the failure of any
of them to be so licensed would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the
Guarantor, and the Guarantor and the Guarantor's subsidiaries have
made all required filings under applicable insurance holding company
statutes in each jurisdiction where such filings are required, except
for such jurisdictions in which the failure to make such filings would
not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on the Guarantor. The Guarantor and the
Guarantor's subsidiaries have all other necessary authorizations,
approvals, orders, consents, certificates, permits, registrations and
qualifications of and from all insurance regulatory authorities
necessary to conduct their respective businesses as described in the
Prospectus, except where the failure to have such authorizations,
approvals, orders, consents, certificates, permits, registrations or
qualifications would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Guarantor, and
none of the Guarantor or the Guarantor's subsidiaries have received
any notification from any insurance regulatory authority to the effect
that any additional authorization, approval, order, consent,
certificate, permit, registration or qualification is needed to be
obtained by any of them, in any case where it could be reasonably
expected that (x) the Guarantor and the Guarantor's subsidiaries would
be required either to obtain such additional authorization, approval,
order, consent, certificate, permit, registration or qualification or
to cease or otherwise limit the writing of certain business and (y)
the failure to obtain such additional authorization, approval, order,
consent, certificate, permit, registration or qualification or the
limiting of the writing of such business would have a Material Adverse
Effect on the Guarantor; and no insurance regulatory authority having
jurisdiction over the Guarantor or the Guarantor's subsidiaries has
issued any order or decree impairing, restricting or prohibiting the
payment of dividends by or to any of them;
(ii) Other than as set forth in the Registration Statement or the
Prospectus as amended or supplemented, there are no legal or
governmental proceedings pending to which the Guarantor, the
Guarantor's subsidiaries, the Parent and the Parent's subsidiaries is
a party or of which any property of any of them is the subject which,
individually or in the aggregate, might reasonably be expected to have
a Material Adverse Effect on the Parent or the Guarantor; and, to the
best of such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
15
(iii) Such counsel does not know of any contract or document of a
character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be described in
the Registration Statement or the Prospectus as amended or
supplemented which is not so filed, incorporated by reference or
described;
(iv) The issue and sale of the Designated Securities, the
Subordinated Debt Securities and the Guarantee being delivered at such
Time of Delivery, the compliance by the Guarantor and Trust with all
of the provisions of this Agreement, the Pricing Agreement and the
Guarantor Agreements, the compliance by the Parent with the
Supplemental Indenture and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, (A) any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which any of the Guarantor, the Guarantor's subsidiaries, the Parent
and the Parent's subsidiaries are a party or by which any of them are
bound or to which any of them are subject, or any statute or any rule,
regulation or order known to such counsel of any court or governmental
agency or body having jurisdiction over any of them or any of their
properties (except for such conflicts, breaches, violations or
defaults which do not or would not, individually or in the aggregate
have a Material Adverse Effect on the Parent or the Guarantor), or (B)
any provision of the Memorandum of Association, Certificate of
Incorporation, Bylaws or other organizational documents of the
Guarantor or Parent or the organizational documents of any of their
subsidiaries;
(v) No consent, approval, authorization or order of, or
registration, qualification or filing with, any court or governmental
agency or body having jurisdiction over the Trust, the Guarantor, any
subsidiary of the Guarantor or any of their respective properties is
required for the issue and sale of the Designated Securities or the
consummation by the Guarantor and the Trust of the transactions
contemplated by this Agreement or the Pricing Agreement under state or
foreign insurance laws;
(vi) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules and other financial data included therein or omitted
therefrom, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case
may be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder;
(vii) Neither the Guarantor nor any subsidiary of the Guarantor
is (i) in violation of its respective charter or bylaws or other
organizational documents or (ii) to the knowledge of such counsel, in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other material agreement or
instrument to which it is a party or by which it or any of its
properties may be bound or affected, except, in the case of clause
(ii), for such as, individually or in the aggregate, would not have a
Material Adverse Effect on the Guarantor;
Such counsel shall also state that although he does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus as amended or
supplemented, nothing has come to his attention which has caused him to
believe that any of the documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial statements
and related schedules and other financial data included therein or omitted
therefrom, as to which such counsel need express no belief), when they
became effective or were so
16
filed, as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or, in
the case of other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made when such
documents were so filed, not misleading.
In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Trust, the Guarantor, the subsidiaries of the
Guarantor, the Parent, the subsidiaries of the Parent and of public
officials. Such opinions shall be limited to the federal laws of the United
States and the laws of the State of New Jersey and the insurance laws of
the State of Delaware.
References to the Registration Statement and the Prospectus in this
paragraph (d) shall include any amendment or supplement thereto at the date
of such opinion.
(e) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware Counsel to the
Trust and the Guarantor, shall have furnished to you, the Guarantor and the
Trust their written opinion, dated the respective Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a statutory trust under the Delaware Statutory Trust
Act, and all filings required under the laws of the State of Delaware
with respect to the creation and valid existence of the Trust as a
statutory trust have been made;
(ii) Under the Delaware Statutory Trust Act and the Trust
Agreement, the Trust has the trust power and authority to own property
and conduct its business, all as described in the Prospectus;
(iii) The Trust Agreement constitutes a valid and legally binding
obligation of the Guarantor and the Trustees, and is enforceable
against the Guarantor and the Trustees, in accordance with its terms,
subject, as to enforcement, to (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent transfer and
other similar laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity, including applicable
law relating to fiduciary duties (regardless of whether considered and
applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating
to indemnification or contribution;
(iv) Under the Delaware Statutory Trust Act and the Trust
Agreement, the Trust has the trust power and authority to (a) execute
and deliver the Pricing Agreement (incorporating this Underwriting
Agreement) and to perform its obligations under this Underwriting
Agreement and the Pricing Agreement, and (b) issue and perform its
obligations under the Securities and the Common Securities;
(v) Under the Delaware Statutory Trust Act and the Trust
Agreement, the execution and delivery by the Trust of the Pricing
Agreement (incorporating this Underwriting Agreement) and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust;
(vi) The Expense Agreement has been duly authorized, executed
and delivered by the Trust.
17
(vii) The Designated Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and nonassessable
beneficial interests in the Trust and are entitled to the benefits
provided by the Trust Agreement; the Securityholders, as beneficial
owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware; provided that such counsel may note that the Securityholders
may be obligated, pursuant to the Trust Agreement, to (a) provide
indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of Securities
Certificates and the issuance of replacement Securities Certificates
and (b) provide security and indemnity in connection with requests of
or directions to the Property Trustee (as defined in the Trust
Agreement) to exercise its rights and remedies under the Trust
Agreement;
(viii) The Common Securities have been duly authorized by the
Trust Agreement and are validly issued and represent beneficial
interests in the Trust;
(ix) Under the Delaware Statutory Trust Act and the Trust
Agreement, the issuance of the Designated Securities and the Common
Securities is not subject to preemptive rights;
(x) The issuance and sale by the Trust of the Designated
Securities and the Common Securities, the execution and delivery of
the Pricing Agreement (incorporating this Underwriting Agreement) and
performance by the Trust of this Underwriting Agreement and the
Pricing Agreement, the consummation by the Trust of the transactions
contemplated thereby and compliance by the Trust with its obligations
thereunder do not violate (a) any of the provisions of the Certificate
of Trust of the Trust or the Trust Agreement, or (b) any applicable
Delaware law or administrative regulation;
(xi) Assuming that the Trust derives no income from or
connected with services provided within the State of Delaware and has
no assets, activities (other than maintaining the Delaware Trustee and
the filing of documents with the Secretary of State of the State of
Delaware) or employees in the State of Delaware, no authorization,
approval, consent or order of any Delaware court or governmental
authority or agency is required to be obtained by the Trust solely in
connection with the issuance and sale of the Designated Securities and
the Common Securities. In rendering the opinion expressed in this
paragraph (xi), such counsel need express no opinion concerning the
securities laws of the State of Delaware; and
(xii) Assuming that the Trust derives no income from or
connected with services provided within the State of Delaware and has
no assets, activities (other than maintaining the Delaware Trustee and
the filing of documents with the Secretary of State of the State of
Delaware) or employees in the State of Delaware, the Securityholders
(other than those holders of the Securities who reside or are
domiciled in the State of Delaware) will have no liability for income
taxes imposed by the State of Delaware solely as a result of their
participation in the Trust, and the Trust will not be liable for any
income tax imposed by the State of Delaware;
(f) Xxxxx, Xxxxx Xxxx & Maw, tax counsel for the Trust and the
Guarantor, shall have furnished to you their written opinion, dated the
respective Time of Delivery, in form and substance satisfactory to you, to
the effect that such firm confirms the matters set forth in the Prospectus
as amended or supplemented under the caption "United States Federal Income
Tax Consequences";
(g) Xxxxxxx, Xxxx & Xxxxxxx, Bermuda counsel for the Parent, shall
have furnished to the Representatives their written opinion, dated the Time
of Delivery for such Designated Securities, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
18
(i) The Parent is duly incorporated and existing under the
laws of Bermuda in good standing (meaning that it has not failed to
make any required filing with any Bermuda governmental authority or to
pay any Bermuda government fee or tax, which would make it liable to
be struck off the Register of Companies and thereby cease to exist
under the laws of Bermuda), and the Parent has the necessary corporate
power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The Parent has the necessary corporate power and authority
to enter into and perform its obligations under the Supplemental
Indenture and the Parent Side Letter. The execution and delivery of
the Supplemental Indenture and the Parent Side Letter by the Parent
and the performance by the Parent of its obligations thereunder will
not violate the memorandum of association or bye-laws of the Parent
nor any applicable law, regulation, order or decree in Bermuda;
(iii) The Parent has taken all corporate action required to
authorize the execution, delivery and performance of the Supplemental
Indenture and the Parent Side Agreement (as defined herein). The
Supplemental Indenture and the Parent Side Agreement have been duly
executed by or on behalf of the Parent and constitute the valid and
binding obligations of the Parent enforceable in accordance with their
respective terms;
(iv) No order, consent, approval, license, authorization or
validation of or exemption by any government or public body or
authority of Bermuda or any sub-division thereof is required to
authorize or is required in connection with the execution, delivery,
performance and enforcement of the Supplemental Indenture, except such
as have been duly obtained in accordance with Bermuda law and which
are in full force and effect;
(v) The Parent is not entitled to any immunity under the laws
of Bermuda, whether characterised as sovereign immunity or otherwise,
from any legal proceedings to enforce the Supplemental Indenture;
(vi) The Parent has the necessary corporate power and
authority, and has taken all corporate action required, to appoint
Xxxxxx X. Xxxxxxx, Vice President, General Counsel and Secretary of
the Parent as agent for the receipt of any service of process with
respect to actions arising out of or in connection with any suit,
action or proceeding based on the Supplemental Indenture;
(vii) The appointment by the Parent of Xxxxxx X. Xxxxxxx, Vice
President, General Counsel and Secretary of the Parent as agent for
the receipt of any service of process in connection with any matter
arising out of or in connection with the Supplemental Indenture is a
valid and effective appointment, if such appointment is valid under
the laws of New York and if no other procedural requirements are
necessary in order to validate such appointment;
(viii) The Parent's agreement to the choice of law provisions set
forth in the Supplemental Indenture is a valid choice of law and would
be recognized and given effect to in any action brought before a court
of competent jurisdiction in Bermuda, except for those laws (A) which
such court considers to be procedural in nature, (B) which are revenue
or penal laws or (C) the application of which would be inconsistent
with public policy, as such term is interpreted under the laws of
Bermuda. To the extent Bermuda law is applicable, the submission in
the Supplemental Indenture to the exclusive jurisdiction of the courts
of New York is valid and binding upon the Parent; and
19
(ix) The courts of Bermuda would recognise as a valid judgment,
a final and conclusive judgment in personam obtained in the federal
courts of New York against the Parent based upon the Supplemental
Indenture under which a sum of money is payable (other than a sum of
money payable in respect of multiple damages, taxes or other charges
of a like nature or in respect of a fine or other penalty) and would
give a judgment based thereon provided that (a) such courts had proper
jurisdiction over the parties subject to such judgment, (b) such
courts did not contravene the rules of natural justice of Bermuda, (c)
such judgment was not obtained by fraud, (d) the enforcement of the
judgment would not be contrary to the public policy of Bermuda, (e) no
new admissible evidence relevant to the action is submitted prior to
the rendering of the judgment by the courts of Bermuda and (f) there
is due compliance with the correct procedures under the laws of
Bermuda.
(h) At the Time of Delivery for such Designated Securities, and, if
so specified in the Pricing Agreement, on the date of the Pricing
Agreement, the independent accountants of the Parent and the Guarantor who
have certified the financial statements of the Parent and Guarantor and
their subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a
letter, dated the date of such Time of Delivery and, if applicable, such
date of the Pricing Agreement, respectively, to the effect set forth in
Annex II hereto, and as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the
Representatives;
(i) (i) None of the Trust, the Guarantor, the Parent or any of their
subsidiaries taken as a whole shall have sustained since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus as amended or supplemented prior to the date of the
Pricing Agreement relating to the Designated Securities any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Agreement relating to the Designated Securities, (ii)
since the respective dates as of which information is given in the
Prospectus as amended or supplemented prior to the date of the Pricing
Agreement relating to the Designated Securities there shall not have been
any change in the capital stock or long-term debt of the Trust, the
Guarantor, the Parent or any of their subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position or results of operations of the
Trust, the Guarantor, the Parent and their subsidiaries, otherwise than as
set forth or contemplated in the Prospectus as amended or supplemented
prior to the date of the Pricing Agreement relating to the Designated
Securities, the effect of which, in any such case described in clause (i)
or (ii), is in the judgment of the Representatives so material and adverse
as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Securities on the terms and in
the manner contemplated in the Prospectus as amended or supplemented
relating to the Designated Securities, and (iii) since the respective dates
as of which information is given in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to the
Designated Securities, there shall not have been any decrease in the
consolidated shareholders' equity of the Guarantor or the Parent except for
xxxx to market adjustments related to investments available for sale that
do not exceed 10% of the consolidated shareholders' equity of the Parent or
the Guarantor;
(j) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Parent's or the Guarantor's debt securities or preferred
stock, if applicable, or the Parent's or the Guarantor's financial strength
or claims paying ability by any "nationally recognized statistical rating
organization", as that term is defined by the
20
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Parent's or the Guarantor's debt securities or preferred stock or the
Parent's or the Guarantor's financial strength or claims paying ability,
the effect of which, in any such case described in clause (i) or (ii), is
in the judgment of the Representatives so material and adverse as to make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as amended or supplemented relating to the
Designated Securities;
(k) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a suspension or material limitation in
trading in the Parent's, the Guarantor's or the Trust's securities, if any,
on the New York Stock Exchange; (iii) a general moratorium on commercial
banking activities declared by either Federal or New York State authorities
or a material disruption in commercial banking or securities settlement or
clearance services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war; or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities or Optional
Securities or both on the terms and in the manner contemplated in the
Prospectus as amended or supplemented relating to the Designated
Securities;
(l) The Securities at each Time of Delivery shall have been duly
listed, subject to notice of issuance, on the New York Stock Exchange;
(m) The Trust shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the second New
York Business Day next succeeding the date of the Pricing Agreement
relating to such Designated Securities;
(n) The Trust and the Guarantor shall have furnished or caused to be
furnished to the Representatives at the Time of Delivery for the Designated
Securities a certificate or certificates of officers of the Trust and the
Guarantor reasonably satisfactory to the Representatives as to the accuracy
of the representations and warranties of the Trust and the Guarantor herein
at and as of such Time of Delivery, as to the performance by the Trust, the
Guarantor and the Parent of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (i) of this Section and as to such other matters as
the Representatives may reasonably request;
(o) There shall not exist any circumstances beyond the control of the
Underwriters, that make it impossible, impracticable or illegal or cause
any of them to be in breach of any restriction (whether fiduciary,
regulatory or otherwise) which may be claimed by any person, for the
obligations of the Underwriters in connection with transactions
contemplated in this Agreement to be cleared or transferred through the
clearance system or by the settlement procedure normally utilized to clear
or settle such obligations.
(p) The Parent shall have entered into an agreement (the "Parent Side
Agreement") in the form of Annex III hereto regarding the issue and sale of
certain types of securities without the prior written consent of the
Representatives;
8. (a) The Trust and the Guarantor will jointly and severally indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in
21
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Designated
Securities, Subordinated Debt Securities or Guarantee or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that neither the Trust
nor the Guarantor shall be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Designated Securities, Subordinated Debt Securities
or Guarantee or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Trust or the Guarantor by
any Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such Designated
Securities; and provided, further, that neither the of the Trust nor the
Guarantor shall be liable to any Underwriter under the indemnity agreement in
this subsection (a) with respect to any Preliminary Prospectus or Prospectus to
the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Designated Securities to a
person as to whom it shall be established that there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectus
(excluding documents incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents incorporated by reference) in any
case where such delivery is required by the Act if the Trust has previously
furnished copies thereof in sufficient quantity to such Underwriter and the
loss, claim, damage or liability of such Underwriter results from an untrue
statement or omission of a material fact contained in the Preliminary Prospectus
or Prospectus which was (i) identified in writing to such Underwriter at or
prior to the earlier of the filing with the Commission or the furnishing to such
Underwriter of the Prospectus or Prospectus as then amended or supplemented and
(ii) corrected in the Prospectus (excluding documents incorporated by reference)
or in the Prospectus as then amended or supplemented (excluding documents
incorporated by reference).
(b) Each Underwriter will indemnify and hold harmless the Trust and
Guarantor against any losses, claims, damages or liabilities to which the Trust
or Guarantor may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Trust
or Guarantor by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Trust or Guarantor, as applicable, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may
22
have to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party. No
indemnified party shall, without the written consent of the indemnifying party
(such written consent not to be unreasonably withheld), effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending action or claim in respect of which indemnification or contribution is
sought hereunder if the indemnifying party has assumed the defense of such
action or claim.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Trust and the Guarantor on the one hand and the Underwriters of the
Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Trust and the Guarantor on
the one hand and the Underwriters of the Designated Securities on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Trust and Guarantor on the one hand and such Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from such offering
(before deducting expenses) received by the Trust, less the total underwriting
compensation paid by the Trust or Guarantor, bear to the total underwriting
discounts and commissions received by such Underwriters. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Trust and the
Guarantor on the one hand or such Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Trust, the Guarantor and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other
23
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the applicable Designated Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of Designated
Securities in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations with respect to such Securities and
not joint.
(e) The obligations of the Trust and the Guarantor under this Section 8
shall be in addition to any liability which the Trust and the Guarantor may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Trust and Guarantor, to each administrative trustee of the Trust and to each
person, if any, who controls the Trust or the Guarantor within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities or Optional Securities which it has agreed to purchase
under the Pricing Agreement relating to such Securities, the Representatives may
in their discretion arrange for themselves or another party or other parties to
purchase such Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter the Representatives do not arrange
for the purchase of such Designated Securities or Optional Securities, as the
case may be, then the Trust and Guarantor shall be entitled to a further period
of thirty-six hours within which to procure another party or other parties
reasonably satisfactory to the Representatives to purchase such Securities on
such terms. In the event that, within the respective prescribed period, the
Representatives notify the Trust or Guarantor that they have so arranged for the
purchase of such Securities, or the Trust or Guarantor notifies the
Representatives that it has so arranged for the purchase of such Securities, the
Representatives or the Trust or Guarantor shall have the right to postpone the
Time of Delivery for such Securities for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Trust or Guarantor agrees to file
promptly any amendments or supplements to the Registration Statement or the
Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities or Optional Securities, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the Trust as
provided in subsection (a) above, the aggregate number of such Securities which
remains unpurchased does not exceed one-eleventh of the aggregate number of the
Designated Securities or Optional Securities, as the case may be, to be
purchased at the respective Time of Delivery, then the Trust or Guarantor shall
have the right to require each non-defaulting Underwriter to purchase the number
of Designated Securities or Optional Securities, as the case may be, which such
Underwriter agreed to purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Designated
Securities or Optional Securities, as the case may be, which such Underwriter
agreed to purchase under such Pricing Agreement) of the Designated Securities or
Optional Securities, as the case may be, of such defaulting Underwriter or
Underwriters for which such
24
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities or Optional Securities, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the Trust as
provided in subsection (a) above, the aggregate number of Designated Securities
or Optional Securities, as the case may be, which remains unpurchased exceeds
one-eleventh of the aggregate number of the Designated Securities or Optional
Securities, as the case may be, to be purchased at the respective Time of
Delivery, as referred to in subsection (b) above, or if the Trust shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities or Optional Securities, as the
case may be, of a defaulting Underwriter or Underwriters, then the Pricing
Agreement relating to such Designated Securities or the Over-allotment Option
relating to such Optional Securities, as the case may be, shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter, the
Trust or the Guarantor except for the expenses to be borne by the Trust and
Guarantor and the Underwriters as provided in Section 6 hereof and the indemnity
and contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, Guarantor and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Trust, the Parent or the Guarantor or any officer or director or controlling
person of the Trust, the Parent or the Guarantor, and shall survive delivery of
and payment for the Designated Securities.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, neither the Trust nor Guarantor shall then be
under any liability to any Underwriter with respect to the Designated Securities
or Optional Securities covered by such Pricing Agreement, except as provided in
Sections 6 and 8 hereof; but, if for any other reason, the Designated Securities
are not delivered by or on behalf of the Trust as provided herein, the Trust or
Guarantor will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Securities, but neither the Trust nor the Guarantor shall then be under any
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement. All statements, requests,
notices and agreements hereunder shall be in writing, and if to the Underwriters
shall be delivered or sent by mail, overnight courier, telex or facsimile
transmission to the address of the Representatives as set forth in the Pricing
Agreement; and if to the Trust or the Guarantor shall be delivered or sent by
mail, overnight courier, telex or facsimile transmission to the agent for
service of process set forth in the Registration Statement, with a copy thereof
(which copy shall not constitute notice to the Trust or Guarantor) sent by
facsimile transmission to Mayer, Brown, Xxxx & Maw, 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, facsimile number (000) 000-0000, Attention: Xxxxx X.
Xxxxxx, Esq.; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Trust and Guarantor by the Representatives upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
25
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Trust, the Guarantor and,
to the extent provided in Sections 8 and 10 hereof, the officers and directors
of the Trust and the Guarantor and each person who controls the Trust, Guarantor
or any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or any such Pricing Agreement. No purchaser
of any of the Securities from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
14. Each of the parties hereto irrevocably (i) agrees that any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any New York court, (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding. The Trust and the Guarantor irrevocably waive any immunity
to jurisdiction to which they may otherwise be entitled or become entitled
(including sovereign immunity, immunity to pre-judgment attachment,
post-judgment attachment and execution) in any legal suit, action or proceeding
against any of them arising out of or based on this Agreement or the
transactions contemplated hereby which is instituted in any New York court. Each
of the Trust and Guarantor have appointed Xxxxxx X. Xxxxxxx, Vice President,
General Counsel and Secretary of the Parent, as its authorized agent (the
"Authorized Agent") upon whom process may be served in any such action arising
out of or based on this Agreement or the transactions contemplated hereby which
may be instituted in any New York court by any Underwriter or by any person who
controls any Underwriter, expressly consents to the jurisdiction of any such
court in respect of any such action, and waives any other requirements of or
objections to personal jurisdiction with respect thereto. Such appointment shall
be irrevocable. Each of the Trust and Guarantor represents and warrants that the
Authorized Agent has agreed to act as such agent for service of process and
agrees to take any and all action, including the filing of any and all documents
and instruments, that may be necessary to continue such appointment in full
force and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Trust and Guarantor shall be deemed, in
every respect, effective service of process upon the Trust and Guarantor,
respectively.
15. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business, and the term "New York Business Day"
shall mean any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or obligated by
law to close in The City of New York.
16. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
26
17. This Agreement and the Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
EVEREST RE CAPITAL TRUST
By: Everest Reinsurance Holdings,
Inc. as Depositor
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EVEREST REINSURANCE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
Accepted as of the date hereof:
XXXXXXX XXXXX BARNEY
As Representatives of the Underwriters Named in Schedule I hereto
/s/ Xxxxxxx X. Xxxxx
--------------------
On behalf of each of the Underwriters named on Schedule I hereto
27
Form of
PRICING AGREEMENT
To the Underwriters named in
Schedule I to the Underwriting Agreement
c/o ____________________
__________________________
___________________________
_________________, ______
Dear Sirs:
Everest Re Capital Trust, a statutory trust formed under the laws of the State
of Delaware (the "Trust") and Everest Reinsurance Holdings, Inc, a Delaware
corporation (the "Guarantor"), propose, subject to the terms and conditions
stated herein and in the Underwriting Agreement, dated November [], 2002 (the
"Underwriting Agreement"), between the Trust and the Guarantor on the one hand
and the Underwriters named in Schedule I to the Underwriting Agreement, on the
other hand, to issue and sell to the Underwriters named in Schedule I hereto
(the "Underwriters") the Securities specified in Schedule II hereto (the
"Designated Securities" consisting of Firm Designated Securities and any
Optional Designated Securities the Underwriters may elect to purchase). Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you.
Unless otherwise defined herein, terms defined in the Underwriting Agreement are
used herein as therein defined. The Representatives designated to act on behalf
of the Representatives and on behalf of each of the Underwriters of the
Designated Securities pursuant to Section 12 of the Underwriting Agreement and
the address of the Representatives referred to in such Section 12 are set forth
at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the Prospectus,
as the case may be, relating to the Designated Securities, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, (a) the Trust agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Trust, at the time and place and at the
purchase price to the Underwriters set forth in Schedule II hereto, the number
of Firm Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto, and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Designated Securities, as
provided below, the Trust agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from
the Trust at the purchase price to the Underwriters set out in Schedule II
hereto that portion of the number of Optional Designated Securities as to which
such election shall have been exercised.
The Trust hereby grants to each of the Underwriters the right to purchase at
their election up to the number of Optional Designated Securities described
below on the terms referred to in the paragraph above for the sole purpose of
covering over-allotments in the sale of the Firm Designated Securities. The
number of Optional Securities, if any, to be added to the number of Designated
Securities to be purchased by each Underwriter shall be that proportion of the
Optional Designated Securities described in Schedule II hereto which the number
of Designated Securities to be purchased by such Underwriter bears to the
aggregate number of Designated Securities (rounded as the Representatives may
determine to the nearest 100 securities). Any such election to purchase Optional
Designated Securities may be exercised by written notice from the
Representatives to the Trust and the Guarantor given within a period of 30
calendar days after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Designated Securities to be purchased and the date
on which such Optional Designated Securities are to be delivered, as determined
by the Representatives, but in no event earlier than the First Time of Delivery
or, unless the Representatives, the Guarantor and the Trust otherwise agree in
writing, no earlier than two or later than ten business days after the date of
such notice.
2
If the foregoing is in accordance with your understanding, please sign and
return to us nine counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Trust and the Guarantor. It is understood that your acceptance
of this letter on behalf of each of the Underwriters is or will be pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Guarantor for examination upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
EVEREST REINSURANCE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EVEREST RE CAPITAL TRUST
By: Everest Reinsurance Holdings, Inc,
as Depositor
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
Accepted as of the date hereof:
XXXXXXX XXXXX BARNEY
As Representatives of the Underwriters Named in Schedule I hereto
/s/ Xxxxxxx X. Xxxxx
------------------------------
On behalf of each of the Underwriters named on Schedule I hereto
3
SCHEDULE I
Number of Designated
Securities to be
--
Underwriters Purchased
------------ ---------
....................................................
....................................................
....................................................
....................................................
....................................................
....................................................
----------------------
Total .......................................
======================
4
SCHEDULE II
DESIGNATED TRUST:
Everest Re Capital Trust
TITLE OF DESIGNATED SECURITIES:
____% Preferred Securities
AGGREGATE PRINCIPAL AMOUNT:
Aggregate principal amount of Designated Securities:
$__________
Maximum aggregate principal amount of Optional Designated Securities: $________
PRICE TO PUBLIC:
____% of the principal amount of the Designated Securities
PURCHASE PRICE BY UNDERWRITERS:
____% of the principal amount of the Designated Securities
UNDERWRITERS' COMPENSATION:
$___ per Designated Security
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
New York Clearing House same-day funds
ACCOUNTANTS' LETTER TO BE DELIVERED ON DATE OF PRICING AGREEMENT:
Yes.
TRUST AGREEMENT:
Amended and Restated Trust Agreement dated ____________, between the
Guarantor and the Trustees named therein
INDENTURE:
Junior Subordinated Indenture dated as of __________________, between the
Guarantor and _________________, as Debenture Trustee (the "Indenture")
II-1
GUARANTEE:
Guarantee Agreement, dated as of _________________, between Guarantor and
Guarantee Trustee
MATURITY:
INTEREST RATE:
____%
INTEREST PAYMENT DATES:
EXTENSION PERIOD:
REDEMPTION PROVISIONS:
The redemption provisions set forth in Section [_] of the Trust Agreement shall
apply to the Designated Securities.
SINKING FUND PROVISIONS:
No sinking fund provisions.
[FIRST] TIME OF DELIVERY:
10:00 a.m., New York City time _______ ___, ____
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
II-2
Annex II
Accountants' Letter
Pursuant to Section 7(p) of the Underwriting Agreement, the Parent's and
the Guarantor's independent certified public accountants shall furnish letters
to the effect that:
[INSERT FORM OF PWC LETTER, AS NEGOTIATED]
II-1
Annex III
Parent's Side Agreement
Pursuant to Section 7(p) of the Underwriting Agreement, the Parent shall
enter into an agreement to the effect that:
[INSERT FORM OF Parent's SIDE AGREEMENT, AS NEGOTIATED]
III-1
