Scottish Re Group Limited
Non-Cumulative Perpetual Preferred Shares
(Liquidation Preference Equivalent to $25 Per Share)
July _, 2005
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Scottish Re Group Limited, an exempted company limited by
shares organized under the laws of the Cayman Islands (the "Company"), is today
issuing [5,000,000] shares of preferred stock, each representing a share of
Non-Cumulative Perpetual Preferred Shares (the "Preferred Stock") having a
liquidation preference equivalent to $25 per share (and may issue up to an
additional 750,000 shares to the extent that the over-allotment option is
exercised pursuant to the Underwriting Agreement (as defined below)), pursuant
to the Certificate of Designations (the "Certificate of Designations") as
authorized by the resolutions of the Pricing Committee of the Company dated June
28, 2005 and the resolutions of the Board of Directors of the Company dated June
16, 2005.
The Certificate of Designations provides for the possible
Remarketing (as defined below) of the Preferred Stock, on one or more occasions,
at the option of the Company as contemplated in the Certificate of Designations.
As used in this (this "Agreement"), the term "Remarketed
Securities" means any share of Preferred Stock offered in a Remarketing; the
term "Remarketing Procedures" means the procedures specified in Section 4 of the
Certificate of Designations; and the term "Remarketing" means a remarketing of
the Remarketed Securities pursuant to the Remarketing Procedures.
In connection with any Remarketing, the Company will, to the
extent required under the Securities Act of 1933, as amended from time to time,
or any successor statute (the "Securities Act") and the rules and regulations as
promulgated from time to time thereunder or any successor statute to the
Securities Act (the "Rules"), in connection with Remarketings of Remarketed
Securities, prepare and file one or more registration statements under the
Securities Act with the Securities and Exchange Commission (the "Commission")
relating to Remarketed Securities, and any necessary amendments thereto, and
will prepare one or more prospectuses (which may be preliminary or final)
complying with the requirements of the Securities Act, and any necessary
supplements thereto, and setting forth or including a description of the
applicable terms of the Remarketed Securities, the terms of the applicable
Remarketing, a description of the Company and such other information as may be
required by the Securities Act.
Capitalized terms used and not defined in this Agreement shall
have the meanings set forth in the Certificate of Designations. Any reference in
this Agreement to any registration statement or to any preliminary prospectus or
final prospectus (or any amendments or supplements to any of the foregoing)
shall be deemed to (i) refer to any such document as it may at the time be
amended or supplemented and (ii) include any document filed under the Securities
Exchange Act of 1934, as amended from time to time and the rules and regulations
promulgated from time to time thereunder, or any successor statute (the
"Exchange Act"), and at the time incorporated by reference therein.
Section 1. Appointment and Obligations of the Remarketing
Agent.
(a) The Company hereby appoints ▇▇▇▇▇▇ Brothers Inc. as
exclusive remarketing agent (the "Remarketing Agent"), and ▇▇▇▇▇▇ Brothers Inc.
accepts appointment as Remarketing Agent for the purpose of (i) remarketing the
Remarketed Securities on behalf of the holders thereof and (ii) performing such
other duties as are assigned to the Remarketing Agent in the Remarketing
Procedures, all in accordance with and pursuant to the Remarketing Procedures.
(b) Upon delivery of notice to the Remarketing Agent by the
Company of the Company's election to conduct a Remarketing in conformity with
the requirements of the Remarketing Procedures, the Remarketing Agent agrees (i)
to use commercially reasonable efforts to remarket the Remarketed Securities
tendered or deemed tendered to the Remarketing Agent in any Remarketing, (ii) to
notify the Company promptly of the new Fixed Rate, if any, established pursuant
to any Remarketing and (iii) to carry out such other duties as are assigned to
the Remarketing Agent in the Remarketing Procedures, all in accordance with the
provisions of the Remarketing Procedures.
(c) On any date during which a Remarketing is being conducted,
the Remarketing Agent shall use commercially reasonable efforts to remarket
Remarketed Securities tendered or deemed tendered for purchase at a price equal
to $25 per share, with respect to the Preferred Stock.
(d) If, as a result of the Remarketing Agent's efforts
described in Section 1(c), the Remarketing Agent has determined on any date
during which a Remarketing is being conducted that it will be able to remarket
all Remarketed Securities tendered or deemed tendered for purchase at a price of
$25 per share (the "Remarketing Purchase Price") prior to 4:00 P.M., New York
City time, on such date (any such date of determination, a "Remarketing Date"),
the Remarketing Agent shall determine the Fixed Rate resulting from such
Remarketing and to be applicable to the next succeeding Fixed Rate Period, which
shall be the rate per annum (rounded to the nearest one-thousandth (0.001) of
one percent per annum) which the Remarketing Agent determines, in its sole
judgment, to be the lowest rate per annum, if any, that will enable it to
remarket all Remarketed Securities tendered or deemed tendered for Remarketing
at the Remarketing Purchase Price.
(e) If any holder of Preferred Stock submits a Notice of
Election to tender some or all of its shares of Preferred Stock in a Remarketing
and separately
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notifies the Remarketing Agent that such holder desires to continue to hold a
number of shares of Preferred Stock, but only if the Fixed Rate determined by
the applicable Remarketing is not less than a specified rate per annum, the
Remarketing Agent shall give priority to such holder's purchase of such number
of Remarketed Securities in the Remarketing, provided that the new Fixed Rate is
not less than such specified rate.
(f) By approximately 4:30 P.M., New York City time, on a
Remarketing Date, the Remarketing Agent shall advise, by telephone, (i) the
Clearing Agency Participant who will receive a credit for the shares of
Preferred Stock on the Clearing Agency's records, the Company and the
Calculation Agent of any new Fixed Rate established pursuant to the Remarketing
and the number of Remarketed Securities sold in the Remarketing, (ii) each
purchaser of Remarketed Securities (or the Clearing Agency Participant thereof)
of such new Fixed Rate and the number of Remarketed Securities such purchaser is
to purchase and (iii) each purchaser to give instructions to its Clearing Agency
Participant to pay the purchase price on the Remarketing Settlement Date in same
day funds against delivery of the Remarketed Securities purchased through the
facilities of the Clearing Agency Participant.
(g) If, by 4:00 P.M., New York City time, on the third
business day prior to the Remarketing Settlement Date applicable to the
Remarketing (such third business day, a "Remarketing Expiration Date") the
Remarketing Agent is unable to remarket all Remarketed Securities tendered or
deemed tendered for purchase at the Remarketing Purchase Price, the Remarketing
Agent shall, by approximately 4:30 P.M., New York City time, on such date,
advise, by telephone, the Clearing Agency Participant, the Company and the
Calculation Agent that the Dividend Rate for the Preferred Stock for the next
succeeding Dividend Period will be a Floating Rate determined in accordance with
the Certificate of Designations. In such case, no shares of Preferred Stock
shall be sold in the Remarketing and each holder shall continue to hold its
respective shares at such Floating Rate.
Section 2. Representations, Warranties and Agreements of the
Company.
(a) The Company represents, warrants and agrees, on and as of
the date hereof, that the representations and warranties made by the Company, as
applicable, in the underwriting agreement, dated June 28, 2005, among the
Company and ▇▇▇▇▇▇ Brothers Inc. and the other underwriters named therein (each
an "Underwriter," and collectively, the "Underwriters") (the "Underwriting
Agreement"), relating to the Preferred Stock, are true, correct and complete in
all material respects, as if made on the date hereof.
(b) In addition, (i) on and as of the date of filing and of
effectiveness of the Registration Statement (as defined in paragraph (II)(A) of
this Section 2(b)) and on and as of the date of any amendment to the
Registration Statement, (ii) on and as of the date of any Final Prospectus (as
defined in paragraph (II)(A) of this Section 2(b)) and on and as of the date of
any supplement thereto distributed in connection with a
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Remarketing, (iii) on and as of any Election Date, (iv) on and as of any
Remarketing Date, and (v) on and as of any Remarketing Settlement Date (to the
extent applicable):
(I) the Company makes each of the representations and
warranties set forth in paragraphs (c) except for the first sentence of
such paragraph (c), (d), (e), (f), (k), (l) and (n) through (s) of
Section 1 of the Underwriting Agreement, except that such
representations, warranties and agreements, as made herein, shall be
deemed to have been amended and shall be read mutatis mutandis, as
follows:
(A) each reference to a Registration Statement,
Incorporated Documents, Basic Prospectus, Final Prospectus or Interim
Prospectus shall be deemed to refer to those terms as defined in
paragraph (II) of this Section 2(b);
(B) each reference to "Delivery Date" shall be
deemed to be to the Remarketing Settlement Date;
(C) each reference to the "issue" or "issue and
sale" of the Preferred Stock shall be deemed to include the Remarketing
and the Remarketed Securities; and
(II) the Company represents and warrants that:
(A) The Company meets the requirements for the use
of Form S-3 under the Securities Act and the Rules, and has prepared
and filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 for the registration
of the Remarketed Securities under the Securities Act, which
Registration Statement (as defined below) has become effective and no
stop order suspending the effectiveness of the Registration Statement
has been issued under the Securities Act and no proceedings for that
purpose have been instituted or are pending or, to its knowledge, are
threatened by the Commission, and any request by the Commission for
additional information has been complied with. The Registration
Statement meets the requirements set forth in Rule 415(a)(1)(x) under
the Securities Act and complies in all other material respects with
such rule. The Company proposes to file with the Commission pursuant to
Rule 424 under the Securities Act ("Rule 424") a supplement to the form
of prospectus included in the registration statement relating to the
remarketing of the Remarketed Securities and the plan of distribution
thereof and has previously advised you of all further information
(financial and other) with respect to the Company to be set forth
therein. The term "Registration Statement" means the registration
statement, as amended at the time of any Election Date, including the
exhibits thereto, financial statements, and all documents incorporated
therein by reference pursuant to Form S-3 (the "Incorporated
Documents"), and such prospectus as then amended, including the
Incorporated Documents, is hereinafter referred to as the "Basic
Prospectus"; and such supplemented form of prospectus, in the form in
which it shall be filed with
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the Commission pursuant to Rule 424 (including the Basic Prospectus as
so supplemented), is hereinafter called the "Final Prospectus". Any
preliminary form of the Final Prospectus which has heretofore been
filed pursuant to Rule 424 is hereinafter called an "Interim
Prospectus". Any reference herein to the Registration Statement, the
Basic Prospectus, any Interim Prospectus or the Final Prospectus shall
be deemed to refer to and include the Incorporated Documents which were
filed under the Exchange Act, on or before the Election Date or the
issue date of the Basic Prospectus, any Interim Prospectus or the Final
Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any Interim Prospectus or the Final
Prospectus shall be deemed to refer to and include the filing of any
Incorporated Documents under the Exchange Act after the date of this
Agreement or the issue date of the Basic Prospectus, any Interim
Prospectus or the Final Prospectus, as the case may be, and deemed to
be incorporated therein by reference. Copies of the Registration
Statement and each of the amendments thereto have been delivered by the
Company to you as the Remarketing Agent. The Commission has not issued
any order preventing or suspending the use of any Interim Prospectus.
(B) When the Final Prospectus is first filed with
the Commission pursuant to Rule 424, when, before the Remarketing
Settlement Date, any amendment to the Registration Statement becomes
effective, when, before such Remarketing Settlement Date, any
Incorporated Document is filed with the Commission, when any supplement
to the Final Prospectus is filed with the Commission and at such
Remarketing Settlement Date, the Registration Statement, the Final
Prospectus and any such amendment or supplement will comply in all
material respects with the applicable requirements of the Securities
Act and the Rules, and the Incorporated Documents will comply in all
material respects with the requirements of the Exchange Act, or the
Securities Act and the Rules, as applicable, and on the date it became
effective, the Registration Statement did not, and, on the date that
any post-effective amendment to the Registration Statement becomes
effective, the Registration Statement as amended by such post-effective
amendment did not or will not, as the case may be, 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; on the date the Final Prospectus is filed with the
Commission pursuant to Rule 424 and on such Remarketing Settlement
Date, the Final Prospectus, as it may be amended or supplemented, will
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading;
and on said dates, the Incorporated Documents will comply in all
material respects with the applicable provisions of the Exchange Act,
and, when read together with the Final Prospectus, or the Final
Prospectus, as it may be then amended or supplemented, 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, in the light of the circumstances under which they are made,
not misleading; provided that the foregoing representations and
warranties in this paragraph (B)
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shall not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by or
through the Remarketing Agent specifically for use in connection with
the preparation of the Registration Statement, any Interim Prospectus
or the Final Prospectus, as they may be amended or supplemented.
(C) The Remarketed Securities have been duly and
validly authorized and are fully paid and non-assessable and conform to
the descriptions thereof contained in the Final Prospectus.
(D) This Agreement has been duly authorized,
executed and delivered by the Company.
(E) Neither the Company nor any subsidiary (as
defined in Rule 405 of the Securities Act) of the Company (a
"Subsidiary") has sustained, since the date of the latest audited
financial statements included in the Final Prospectus, 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 Final Prospectus, except for
such losses or interferences as would not have, individually or in the
aggregate, material adverse effect on the condition (financial or
otherwise), results of operations, business, properties or prospects of
the Company and the Subsidiaries taken as a whole ("Material Adverse
Effect"); and, subsequent to the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, except as set forth in the Registration Statement and Final
Prospectus, there has been no material adverse change or any
development involving a prospective material adverse change in (i) the
general affairs, business, management, prospects, properties,
operations, condition (financial or otherwise), surplus, reserves,
shareholders' equity or results of operations (in each case considered
either on a statutory or U.S. generally accepted accounting principles,
as applicable) of the Company and the Subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Final Prospectus;
(ii) the share capital or long-term debt of the Company; or (iii) the
offering or the delivery of the Preferred Stock being delivered on the
Delivery Date on the terms and in the manner contemplated in the Final
Prospectus, whether or not arising from transactions in the ordinary
course of business, and since the date of the latest balance sheet
presented in the Registration Statement and Final Prospectus, neither
the Company nor any Subsidiary has incurred or undertaken any
liabilities or obligations, direct or contingent, or entered into any
transactions which are material to the Company and the Subsidiaries
taken as a whole, except for liabilities or obligations which are
reflected in the Registration Statement and Final Prospectus.
(F) Ernst & Young LLP (the "Accountants"), whose
reports appear in the Final Prospectus, are independent public
accountants with respect to the Company and its subsidiaries as
required by the Securities Act, the Exchange Act and the Rules.
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Section 3. Fees and Expenses. (a) For the performance of its
services as Remarketing Agent in connection with Remarketings hereunder, the
Company agrees to pay to the Remarketing Agent a fee on each Remarketing
Settlement Date, in an amount customary for the types of services provided by
the Remarketing Agent hereunder and as shall be mutually agreed upon between the
Company and the Remarketing Agent.
(b) The Company agrees to pay (i) the costs incident to the
preparation and filing of any registration statements and any amendments thereto
required in connection with this Agreement; (ii) the costs incident to the
preparation, printing, and distribution of any prospectus (preliminary or final)
and any supplements thereto required in connection with this Agreement; (iii)
the fees and expenses of qualifying the Remarketed Securities under the
securities laws of the several jurisdictions as provided in Section 4(e) and of
preparing, printing, and distributing a blue sky survey (including related
reasonable fees and expenses of counsel to the Remarketing Agent not to exceed
$10,000); (iv) all other costs and expenses incident to the performance of the
obligations of the Company hereunder; and (v) the fees and expenses of counsel
and accountants for the Company.
Section 4. Further Agreements of the Company. The Company
agrees to use its commercially reasonable efforts:
(a) To prepare the Registration Statement, Basic Prospectus,
any Interim Prospectus or Final Prospectus, and any amendments and supplements
thereto required in connection with any Remarketing, in a form reasonably
acceptable to the Remarketing Agent and to file any such documents with the
Commission pursuant to the Securities Act as required by the Securities Act and
the Rules.
(b) To advise the Remarketing Agent, promptly after it
receives notice thereof, of the time when any registration statement or any
amendment thereto has been filed with the Commission or becomes effective, and
when any prospectus (preliminary or final) or any supplement thereto has been
filed, in each such case excluding documents incorporated by reference therein;
during the term of this Agreement to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act; to advise the Remarketing Agent, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus (Interim Prospectus or Final
Prospectus) or any supplement thereto filed or prepared in connection with this
Agreement, of the suspension of the qualification of any Remarketed Securities
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 any such registration statement or prospectus or
amendment or supplement thereto or for additional information; and, in the event
of the issuance of any stop order or of any order preventing or suspending the
use of any prospectus (Basic Prospectus, Interim Prospectus or Final Prospectus)
or supplement thereto or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal.
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(c) To deliver or make available promptly to the Remarketing
Agent a reasonable number of the following documents as the Remarketing Agent
shall request (i) conformed copies of the Registration Statement prepared in
connection with any Remarketing as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits), any Interim Prospectus or
Final Prospectus prepared in connection with any Remarketing and any supplements
thereto; (ii) copies of the Certificate of Designations and the Calculation
Agent Agreement, and any amendment to any such document thereof, and each report
or other document mailed or made available to holders of the Preferred Stock;
and (iii) if the delivery of a prospectus is required at any time in connection
with a Remarketing and if at such time any event has occurred as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made when such Final Prospectus is delivered, not misleading, or if
for any other reason it shall be necessary during such same period to amend or
supplement the Final Prospectus or to file under the Exchange Act any document
incorporated by reference in the Final Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Remarketing Agent, and upon
its request, to file such document and to prepare and furnish without charge to
the Remarketing Agent and to any dealer in shares of the Remarketed Securities a
reasonable number of copies as the Remarketing Agent may from time to time
request of an amended or supplemented Final Prospectus which will correct such
statement or omission or effect such compliance.
(d) Prior to filing with the Commission any amendment to any
Registration Statement or supplement to any Interim Prospectus or Final
Prospectus filed or prepared in connection with any Remarketing under Rule 424
of the Rules, to furnish or make available a copy thereof to the Remarketing
Agent and counsel to the Remarketing Agent and obtain the consent of the
Remarketing Agent to such filing, which consent shall not be unreasonably
withheld.
(e) Promptly from time to time to take such action as the
Remarketing Agent may reasonably request to qualify the Remarketed Securities
for offering and sale under the securities or laws of such jurisdictions as the
Remarketing Agent 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 the Remarketed Securities;
provided that in connection therewith, the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.
(f) The Company will make generally available to its security
holders and deliver to the Remarketing Agent as soon as reasonably practicable
after the date of any Final Prospectus, an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act and the Rules (including, at the option of the Company, Rule 158
of the Rules).
(g) During the period when a Final Prospectus is required to
be delivered under the Securities Act or the Exchange Act in connection with
sale of
8
Remarketed Securities, to file all documents required to be filed by it
with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act within
the time periods required by the Exchange Act.
(h) The Company will use its reasonable efforts to take all
reasonable action necessary to enable Standard & Poor's Corporation ("S&P") and
▇▇▇▇▇'▇ Investors Services, Inc. ("Moody's") or any other nationally recognized
rating organization to provide their respective credit ratings for the
Remarketed Securities.
Section 5. Conditions to the Remarketing Agent's Obligations.
The obligations of the Remarketing Agent hereunder are subject to the accuracy,
when made and on the related Remarketing Settlement Date, of the representations
and warranties of the Company contained herein, to the performance by the
Company of its respective obligations hereunder, and to each of the following
additional terms and conditions:
(a) The Final Prospectus shall have been timely filed with the
Commission in accordance with Section 4(a); 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 any request of the Commission for inclusion of
additional information in the Registration Statement or the Final Prospectus or
otherwise shall have been complied with.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Remarketed
Securities, any Registration Statement, Interim Prospectus and/or Final
Prospectus and any amendments or supplements thereto and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the Remarketing
Agent, and the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
(c) Without the prior written consent of the Remarketing
Agent, the Certificate of Designations shall not have been amended in any
manner, or otherwise contain any provision not contained therein as of the date
hereof that, in the opinion of the Remarketing Agent, materially changes the
nature of the Remarketed Securities or the Remarketing Procedures.
(d) On the related Remarketing Settlement Date, LeBoeuf, Lamb,
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, or other counsel satisfactory to the Remarketing Agent,
shall have furnished to the Remarketing Agent their written opinion, as counsel
to the Company, addressed to the Remarketing Agent and dated such Remarketing
Settlement Date, in form and substance satisfactory to the Remarketing Agent, to
the effect set forth in Exhibit A hereto.
(e) On the related Remarketing Settlement Date, ▇▇▇▇▇▇ &
Calder, or other counsel satisfactory to the Remarketing Agent, shall have
furnished to the
9
Remarketing Agent their written opinion, as Cayman Islands counsel to the
Company, addressed to the Remarketing Agent and dated such Remarketing
Settlement Date, in form and substance satisfactory to the Remarketing Agent, to
the effect set forth in Exhibit B hereto.
(f) On the related Remarketing Settlement Date, the General
Counsel of the Company shall have furnished to the Remarketing Agent her written
opinion, addressed to the Remarketing Agent and dated such Remarketing
Settlement Date, in form and substance satisfactory to the Remarketing Agent, to
the effect set forth in Exhibit C hereto.
(g) On the related Remarketing Settlement Date, counsel to the
Remarketing Agent shall have furnished to the Remarketing Agent, such opinions
or opinion, dated the Remarketing Settlement Date, on matters as the Remarketing
Agent may reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of enabling
them to give such opinion or opinions.
(h) On any Election Date, the Remarketing Agent shall have
received from the Accountants a letter or letters, in form and substance
satisfactory to the Remarketing Agent, addressed to the Remarketing Agent and
dated the date of such Remarketing Date (i) confirming that they are independent
public accountants within the meaning of the Securities Act, Exchange Act and
the Rules and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the Commission
and (ii) stating, as of such Remarketing Date (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Final Prospectus, as of a date
not more than five days prior to the date hereof), the conclusions and findings
of such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(i) With respect to the letter or letters of the Accountants
referred to in the preceding paragraph and delivered to the Remarketing Agent on
any Election Date (the "initial letters"), the Company shall have furnished to
the Remarketing Agent a letter (the "bring-down letter") of the Accountants,
addressed to the Remarketing Agent and dated the related Remarketing Settlement
Date (i) confirming that they are independent public accountants within the
meaning of the Securities Act, Exchange Act and the Rules and are in compliance
with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the
date of the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Final Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the conclusions and findings
of such firm with respect to the financial information and other matters covered
by the initial letters and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letters.
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(j) The Company shall have furnished to the Remarketing Agent
a certificate, dated the date of the related Remarketing Settlement Date, of its
Chief Executive Officer and its Chief Financial Officer stating that:
(I) The representations, warranties and agreements of the
Company in Section 2 are true and correct as of the related Remarketing
Settlement Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in paragraph (a) of this
Section 5 have been fulfilled;
(II) (A) Except as disclosed in the Final Prospectus and
for any such losses or interferences as would not result, individually
or in the aggregate, in a Material Adverse Effect, the Company and the
Subsidiaries have not sustained since the date of the latest audited
financial statements included or incorporated in the Final Prospectus
any material loss or interference with their respective businesses 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, and (B) since the respective dates as of which
information is given in the Final Prospectus, there has not been any
material adverse change in the share capital of the Company or any of
its Subsidiaries or any change, or any development involving a
prospective change, in the business, prospects, properties, operations,
condition (financial or otherwise) or results of operations of the
Company and the Subsidiaries taken as a whole, except in each case as
described in the Final Prospectus; and
(III) They have carefully examined the Registration
Statement and the Final Prospectus and, in their opinion (x) as of the
date of the Final Prospectus, the Registration Statement and Final
Prospectus did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (y) since
the date of the Final Prospectus, no event has occurred which should
have been set forth in a supplement or amendment to the Registration
Statement or the Final Prospectus which has not been so set forth.
(k) There shall not have been, since the respective dates as
of which information is given in the Final Prospectus, any material adverse
change in the condition (financial or otherwise) or in the consolidated
financial position, shareholders' equity, results of operations, business or
prospects of the Company and the Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business.
(l) Subsequent to any Election Date there shall not have
occurred any of the following: (i) trading of any securities of or guaranteed by
the Company shall have been suspended on any exchange or in any over-the-counter
market, (ii) trading in securities on the New York Stock Exchange, the American
Stock Exchange, and the National Association of Securities Dealers, Inc., shall
have been generally suspended, or there shall have been a material disruption in
settlement of securities generally, (iii) minimum or maximum ranges for prices
shall have been generally established on the
11
New York Stock Exchange by the Commission or by the New York Stock Exchange,
(iv) a general banking moratorium shall have been declared by federal or New
York State authorities, (v) any major disruption of settlements of securities or
clearance services in the United States, or (vi) any outbreak or escalation of
major hostilities in which the United States is involved, any declaration of war
by the United States Congress or any other substantial national or international
calamity, crisis or emergency (including, without limitation, acts of terrorism)
affecting the United States, in any such case provided for in clauses (i)
through (vi), as to make it, in the judgment of the Remarketing Agent,
impracticable or inadvisable to proceed with the public offering or delivery of
the Remarketed Securities being delivered on the related Remarketing Settlement
Date on the terms and in the manner contemplated in the Final Prospectus.
(m) On or after the Election Date, (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as such term is defined
in Rule 436(g)(2) of the Rules, (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 Company's debt securities or preferred
shares and (iii) the Remarketed Securities shall continue to be rated not lower
than BB- by Standard & Poor's and Ba1 by ▇▇▇▇▇'▇.
(n) The Remarketing Agent shall not have discovered and
disclosed to the Company on or prior to the Election Date, or during the period
between the Remarketing Date and the Remarketing Settlement Date, that any
Registration Statement, Interim Prospectus or Final Prospectus or any amendment
or supplement thereto contains any untrue statement of a fact which, in the
opinion of the counsel for the Remarketing Agent, is material or omits to state
any fact which, in the opinion of such counsel, is material and is required to
be stated therein, or is necessary to make the statements therein not
misleading.
All opinions, letters, evidence, and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Remarketing Agent.
Section 6. Indemnification and Contribution. (a) The Company
shall indemnify and hold harmless the Remarketing Agent, its directors, officers
and employees and each person, if any, who controls the Remarketing Agent within
the meaning of the Securities Act or the Exchange Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of the Remarketed Securities), to which
the Remarketing Agent, director, officer, employee or controlling person may
become subject under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Interim Prospectus or the Final Prospectus or in any
amendment or supplement thereto or the omission or alleged omission to state in
the Registration Statement, any Interim Prospectus or the Final Prospectus, or
in any amendment or
12
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, and shall reimburse the
Remarketing Agent and each such director, officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by the Remarketing Agent, director, officer, employee or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Interim Prospectus or
the Final Prospectus, or in any such amendment or supplement, in reliance upon
and in conformity with written information concerning the Remarketing Agent
furnished to the Company by or on behalf of the Remarketing Agent specifically
for inclusion therein which information consists solely of the information
specified in Section 6(e); provided, further, that the foregoing indemnity
agreement with respect to any Interim Prospectus shall not inure to the benefit
of the Remarketing Agent or any director, officer or controlling person of the
Remarketing Agent who failed to deliver a Final Prospectus (as then amended or
supplemented, provided by the Company to the Remarketing Agent in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
Delivery Date) to the person asserting any losses, claims, damages and
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any Interim Prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured,
as determined by a court of competent jurisdiction in a decision not subject to
further appeal, in such Final Prospectus and such Final Prospectus was required
by law to be delivered at or prior to the written confirmation of sale to such
person. The foregoing indemnity agreement is in addition to any liability which
the Company may otherwise have to the Remarketing Agent or to any director,
officer, employee or controlling person of the Remarketing Agent.
(b) The Remarketing Agent shall indemnify and hold harmless
the Company, its officers and employees, each of its directors, and each person,
if any, who controls the Company within the meaning of the Securities Act or the
Exchange Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or Exchange Act, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Interim Prospectus or the Final Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in the Registration
Statement, any Interim Prospectus or the Final Prospectus, or in any amendment
or supplement thereto, any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information concerning the Remarketing Agent furnished to the Company
13
by or on behalf of the Remarketing Agent specifically for inclusion therein,
which information is limited to the information set forth in Section 6(e), and
shall reimburse the Company and any such director, officer or controlling person
for any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which the Remarketing Agent may otherwise have to the
Company or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure so to notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have under this Section 6(a)
or (b) except to the extent it has been materially prejudiced by such failure
and, provided further, that the failure so to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may have to
an indemnified party otherwise than under this Section 6(a) or (b). If any such
claim or action is brought against an indemnified party, and it notifies the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party (who shall not, except
with the written consent of the indemnified party, be counsel to the
indemnifying party). After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, 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.
(d) If the indemnification provided for in this Section 6
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 6(a) or 6(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the aggregate amount paid or payable by such indemnified party as
a result of such loss, claim, damage or liability, or action in respect thereof,
in such proportion as shall be appropriate to reflect the relative fault of
14
the Company on the one hand and the Remarketing Agent on the other with respect
to the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of each of the Company and the Remarketing
Agent shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Remarketing Agent,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Remarketing Agent agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The aggregate amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section shall
be deemed to include, for purposes of this Section 6(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), the Remarketing Agent shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Remarketed Securities distributed to the public were offered to the public
exceeds the amount of any damages which the Remarketing Agent has otherwise paid
or become liable to pay by reason of any 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution shall, promptly after
receipt of notice of any claim or commencement of any action against such party
in respect of which a claim for contribution may be made against another party,
notify each other party from whom contribution may be sought, but the omission
to so notify such party shall not relieve the party from whom contribution may
be sought from any obligation it may have under this Section 6(d) or otherwise.
(e) The Remarketing Agent confirms and the Company
acknowledges that the statements with respect to the Remarketing of the
Remarketed Securities by the Remarketing Agent to be set forth on the cover page
of and the paragraphs on discounts and commissions, concessions, reallowance
figures and underwriter stabilization appearing under the caption "Underwriting"
in, the Final Prospectus as of any Remarketing Settlement Date are correct and
constitute the only information concerning the Remarketing Agent to have been
furnished in writing to the Company by or on behalf of the Remarketing Agent
specifically for inclusion in the Registration Statement and the Final
Prospectus.
Section 7. Resignation and Removal of Remarketing Agent. The
Remarketing Agent may resign and be discharged from its duties and obligations
hereunder, and the Company may remove the Remarketing Agent, by giving 30 days'
prior written notice, in the case of a resignation, to the Company and the
Clearing Agency Participant, and, in the case of a removal, such removed
Remarketing Agent and the Clearing Agency Participant; provided, however, that
(i) the Company may not remove the Remarketing Agent unless (A) the Remarketing
Agent becomes involved as
15
debtor in a bankruptcy, insolvency or similar proceeding, (B) the Remarketing
Agent shall not be among the five underwriters with the largest volume
underwritten in dollars, on a lead or co-managed basis, of U.S. domestic
preferred securities during the twelve-month period ended as of the last
calendar quarter preceding the Remarketing Date, and (C) the Remarketing Agent
shall be subject to one or more legal restrictions preventing the performance of
its obligations hereunder and (ii) no such resignation nor any such removal
shall become effective until the Company shall have appointed at least one
nationally recognized broker-dealer as successor Remarketing Agent and such
successor Remarketing Agent shall have entered into a with
the Company in which it shall have agreed to conduct the Remarketing in
accordance with the Remarketing Procedures. In such case, the Company will use
its commercially reasonable efforts to appoint a successor Remarketing Agent and
enter into such a with such person as soon as reasonably
practicable. The provisions of Sections 3 and 6 shall survive the resignation or
removal of the Remarketing Agent pursuant to this Agreement.
Section 8. Dealing in the Remarketed Securities. The
Remarketing Agent, when acting as a Remarketing Agent or in its individual or
any other capacity, may, to the extent permitted by law, buy, sell, hold and
deal in any Remarketed Securities. Notwithstanding the foregoing, the
Remarketing Agent is not obligated to purchase any Remarketed Securities that
would otherwise remain unsold in a Remarketing. To the extent the Remarketing
Agent holds Remarketed Securities, the Remarketing Agent may exercise any vote
or join in any action which any beneficial owner of Remarketed Securities may be
entitled to exercise or take pursuant to the Certificate of Designations, with
like effect as if it did not act in any capacity hereunder. The Remarketing
Agent, in its individual capacity, either as principal or agent, may also engage
in or have an interest in any financial or other transaction with the Company as
freely as if it did not act in any capacity hereunder.
Section 9. Remarketing Agent's Performance; Duty of Care. The
duties and obligations of the Remarketing Agent shall be determined solely by
the express provisions of this Agreement and the Certificate of Designations. No
implied covenants or obligations of or against the Remarketing Agent shall be
read into this Agreement or the Certificate of Designations, as applicable. In
the absence of bad faith on the part of the Remarketing Agent, the Remarketing
Agent may conclusively rely upon any document furnished to it, which purports to
conform to the requirements of this Agreement or the Certificate of Designations
as to the truth of the statements expressed in any of such documents. The
Remarketing Agent shall be protected in acting upon any document or
communication reasonably believed by it to have been signed, presented or made
by the proper party or parties. The Remarketing Agent, acting under this
Agreement, shall incur no liability to the Company or to any holder of
Remarketed Securities in its individual capacity or as Remarketing Agent for any
action or failure to act, on its part in connection with a Remarketing or
otherwise, except if such liability is judicially determined to have resulted
from gross negligence or willful misconduct on its part.
16
Section 10. Termination. This Agreement shall terminate as to
the Remarketing Agent on the effective date of the resignation or removal of the
Remarketing Agent pursuant to Section 7.
In addition, the obligations of the Remarketing Agent
hereunder with respect to a specific Remarketing may be terminated by it by
notice given to the Company prior to 10:00 A.M., New York City time, on the
applicable Remarketing Date if, prior to that time, any of the events described
in Sections 5(j), (k) or (l) herein shall have occurred or if the Remarketing
Agent shall decline to perform its obligations under this Agreement for any
reason permitted hereunder.
The Company may elect to terminate a specific Remarketing on
any day prior to such Remarketing.
The provisions of Sections 3 and 6 shall survive any such
termination.
Section 11. Notices. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Remarketing Agent, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department (Fax: (▇▇▇) ▇▇▇-▇▇▇▇),
with a copy, in the case of any notice pursuant to Section 6(c), to the Director
of Litigation, Office of the General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
prospectus or any supplement thereto, Attention: General Counsel (Fax: (704)
▇▇▇-▇▇▇▇).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
Section 12. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the Remarketing
Agent, the Company and their respective successors. This Agreement and the terms
and provisions hereof are for the sole benefit of only those persons, except
that (x) the representations, warranties, indemnities and agreements of the
Company contained in this Agreement shall also be deemed to be for the benefit
of the directors, officers and the person or persons, if any, who control the
Remarketing Agent within the meaning of Section 15 of the Securities Act and (y)
the representations, warranties, indemnity and agreement of the Remarketing
Agent contained in Section 6(b) of this Agreement shall be deemed to be for the
benefit of directors of the Company, officers of the Company who signed the
Registration Statement as defined in Section 2(b)(II)(A) of this Agreement and
any person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 12, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
17
Section 13. Survival. The respective indemnities,
representations, warranties and agreements of the Company and the Remarketing
Agent contained in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement shall survive the Remarketing and shall remain in
full force and effect, regardless of any investigation made by or on behalf of
any of them or any person controlling any of them.
Section 14. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
Section 15. Submission to Jurisdiction, Service of Process.
(a) The Company irrevocably (a) submits to the jurisdiction of
any court of the State of New York or any United States federal court, in each
case, sitting in the Borough of Manhattan, City and State of New York, for the
purpose of any Proceeding, (b) agrees that all claims in respect of any
Proceeding may be heard and determined in any such court, (c) waives, to the
fullest extent permitted by law, any immunity from jurisdiction of any such
court or from any legal process therein, (d) agrees not to commence any
Proceeding other than in such courts, and (e) waives, to the fullest extent
permitted by law, any claim that such Proceeding is brought in an inconvenient
forum.
(b) The Company agrees that service of all writs, process and
summonses in any Proceeding against the Company may be made upon CT Corporation
System at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, whom the Company
irrevocably appoints as its authorized agent for service of process. The Company
represents and warrants that CT Corporation System has agreed to act as the
Company's agent for service of process. The Company agrees that such appointment
shall be irrevocable until the irrevocable appointment by the Company of a
successor in The City of New York as its authorized agent for such purpose and
the acceptance of such appointment by such successor. The Company further 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. If CT Corporation System shall cease to act as the agent
for service of process for the Company, the Company shall appoint without delay,
another such agent and provide prompt written notice to the Remarketing Agent of
such appointment.
Section 16. Counterparts. This Agreement may be executed in
one or more counterparts and, if executed in more than one counterpart, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
Section 17. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
18
If the foregoing correctly sets forth the agreement between
the Company and the Remarketing Agent, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
SCOTTISH RE GROUP LIMITED
By:
--------------------------------------------
Name:
Title:
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
By:
-----------------------------
Name:
Title:
19
EXHIBIT A
FORM OF OPINION
[TO COME]
A-1
EXHIBIT B
FORM OF OPINION
[TO COME]
B-1
EXHIBIT C
FORM OF OPINION
[TO COME]
C-1
