Exhibit 99.2
PartnerRe Ltd.
3,500,000 Units
8% Premium Equity Participating
Security Units -- PEPS /SM/ Units
Underwriting Agreement
November 15, 2001
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
c/o MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
PartnerRe Ltd., a Bermuda company (the "Company"), proposes to issue
and sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), subject to the terms and conditions stated herein, an aggregate
of 3,500,000 8% Premium Equity Participating Security Units - PEPS/SM/ Units
(the "Firm Securities") of the Company, the terms of which are set forth in
Schedule II hereto. Each PEPS Unit will consist of (a) a stock purchase contract
(a "Purchase Contract") under which the holder of the PEPS Unit will purchase
from the Company on December 31, 2004, for an amount in cash equal to the stated
amount per Security of $50 (the "Stated Amount"), a number of shares (each, a
"Common Share" and, collectively with all other Common Shares that may be issued
and sold by the Company upon settlement of the Purchase Contracts, the "Common
Shares") of the Company's common shares, par value $1.00 per share (the "Common
Stock"), as set forth in such Purchase Contract, and (b) a share of the
Company's 5.61% Series B Cumulative Redeemable Preferred Shares, $1.00 par value
per share (each, a "Preferred Security") having a stated liquidation amount of
$50 per Preferred Security. Additionally, the Company proposes to issue and sell
to the several Underwriters, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Securities, at the option of the
Underwriters, up to an additional 500,000 PEPS Units (the "Option Securities").
The Firm Securities and any Option Securities are herein referred to as the
"Securities."
In accordance with the terms of a Purchase Contract Agreement (the
"Purchase Contract Agreement"), to be dated as of the Closing Date (as defined
below) and entered into between the Company and JPMorgan Chase Bank, as Purchase
Contract Agent (the "Purchase Contract Agent"), the holders of the PEPS Units
will pledge the Preferred Securities to JPMorgan Chase Bank, as Collateral Agent
(the "Collateral Agent"), pursuant to a Pledge Agreement (the "Pledge
Agreement") to be dated as of the Closing Date and entered into among the
Company, the Collateral Agent, the Purchase Contract Agent and JPMorgan Chase
Bank, as Securities Intermediary, to secure the holders' obligations to purchase
Common Stock under the Purchase Contracts. The Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement are herein collectively referred to
as the "PEPS Agreements."
The Company will also enter into a Remarketing Agreement (the
"Remarketing Agreement"), to be dated as of the Closing Date, with Morgan
Stanley & Co. Incorporated, as Remarketing Agent, which will provide for the
remarketing of the Preferred Securities prior to the Settlement Date (as defined
in the Purchase Contract).
The Company has filed with the Securities and Exchange Commission (the
"Commission"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder (the
"Securities Act"), a registration statement on Form S-3 (registration no.
333-72246), including a related prospectus, relating to the registration of
certain securities of the Company, including the PEPS Units, the Purchase
Contracts, the Preferred Securities and the Common Shares (the "Shelf
Securities"), to be sold from time to time by the Company. The registration
statement, as amended at the time it became effective, including information, if
any, deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act is hereinafter
referred to as the "Registration Statement," and the prospectus included therein
relating to the Shelf Securities at the time the Registration Statement became
effective, is hereinafter referred to as the "Basic Prospectus." The Basic
Prospectus, as supplemented by the prospectus supplement dated November 15, 2001
(the "Prospectus Supplement"), relating to the Securities, in the form first
used to confirm sales of the Securities is hereinafter referred to as the
"Prospectus." If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement. Any reference
to the term Registration Statement, the Basic Prospectus, any preliminary form
of prospectus previously filed with the Commission pursuant to Rule 424 of the
Securities Act or the Prospectus shall include the documents incorporated
therein by reference. The terms "supplement" and "amendment" or "amend" as used
in this Agreement shall
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include all documents subsequently filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are deemed to be incorporated by reference in the Prospectus.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Securities
Act. The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the knowledge of the Company, contemplated by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, will not contain any
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, the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder and the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or
the Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein. Each document filed
or to be filed pursuant to the Exchange Act, and incorporated by
reference in the Prospectus, did not contain or will not contain when
so filed any 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, and complied or will comply when so
filed in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder. No order preventing or
suspending the use of any preliminary prospectus has been issued by the
Commission and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company, threatened or
contemplated by the Commission.
(c) The Company has been duly organized, is validly existing
as a company in good standing (including as an exempted company) under
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the laws of Bermuda, has the power and authority to own, lease and
operate its property and to conduct its business as described in the
Registration Statement and the Prospectus and is duly registered,
qualified and authorized to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its
ownership, leasing or operation of property requires such registration,
qualification or authorization, except to the extent that the failure
to be so registered, qualified or authorized or be in good standing
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business or operations of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect").
(d) Partner Reinsurance Company Ltd., a Bermuda company
("Partner Reinsurance"), PartnerRe Reinsurance Company of the U.S.
("PartnerRe U.S.") and PartnerRe S.A., a French societe anonyme (and,
collectively with Partner Reinsurance and PartnerRe U.S., the
"Subsidiaries"), are each wholly owned, directly or indirectly, by the
Company, except in the case of PartnerRe S.A. for director's qualifying
shares, and are the only "significant subsidiaries" of the Company
within the meaning of Rule 405 under the Securities Act. Each of the
Subsidiaries has been duly organized, is validly existing as a company,
corporation or other legal entity, as the case may be, in good standing
(including, in the case of Partner Reinsurance, as an exempted company)
under the laws of the jurisdiction of its organization, has the power
and authority to own, lease and operate its property and to conduct its
business as described in the Registration Statement and the Prospectus
and is duly registered, qualified and authorized to transact business
and is in good standing in each jurisdiction in which the conduct of
its business or its ownership, leasing or operation of property
requires such registration, qualification or authorization, except to
the extent that the failure to be so registered, qualified or
authorized or be in good standing would not have a Material Adverse
Effect; and all of the issued and outstanding shares of capital stock
of each Subsidiary have been duly authorized and are validly issued,
fully paid and non-assessable and are, except in the case of PartnerRe
S.A. for director's qualifying shares, owned directly or indirectly by
the Company, free and clear of all security interests, liens,
encumbrances, equities or claims.
(e) The authorized capital stock of the Company conforms as to
legal matters to the descriptions thereof contained in the Prospectus.
(f) All of the outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid
and non-assessable, conform as to legal matters to the descriptions
thereof
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contained in the Prospectus and are not and will not be subject to any
preemptive or similar rights.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) The Securities have been duly authorized, and, when the
Securities are issued and delivered pursuant to this Agreement, such
Securities will have been validly issued, fully paid and nonassessable
and the Purchase Contracts included in the Securities will be valid and
legally binding agreements of the Company enforceable in accordance
with their terms, subject to applicable bankruptcy, insolvency or
similar laws relating to or affecting creditors' rights generally and
general principles of equity; both the Securities and the Purchase
Contracts will conform to the descriptions thereof contained in the
Prospectus.
(i) The Securities have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance; and the
Securities have been registered under the Exchange Act.
(j) The Preferred Securities included in the Securities have
been duly authorized, and, when the Preferred Securities are issued and
delivered pursuant to this Agreement, such Preferred Securities will
have been validly issued, fully paid and nonassessable and will conform
to the description thereof contained in the Prospectus.
(k) The Common Shares issuable pursuant to the Purchase
Contracts included in the Securities have been duly authorized and
reserved for issuance. Such Common Shares, when issued and delivered in
accordance with the provisions of the PEPS Agreements, will be validly
issued, fully paid and nonassessable; and the issuance of such Common
Shares will not be subject to any preemptive rights other than those
that have been waived.
(l) Each of the PEPS Agreements and the Remarketing Agreement
has been duly authorized and, when validly executed and delivered by
the Company, will constitute a legal, valid and binding obligation of
the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally, and subject, as to enforceability, to general
principles of equity, (regardless of whether enforcement is sought in a
proceeding at law or in equity); and each of the PEPS Agreements and
the Remarketing Agreement will conform to the descriptions thereof in
the Prospectus.
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(m) None of the Company nor any of the Subsidiaries is in
violation of its certificate of incorporation, memorandum of
association or bye-laws or other organizational documents, in violation
of any law, ordinance, administrative or governmental rule or
regulation applicable to any of them or any of their respective
properties (except where any such violation or violations individually
or in the aggregate would not have a Material Adverse Effect), in
violation of any judgment, injunction, restraining order, decree or
order of any nature (collectively, any "Order") of any court, tribunal,
regulatory body, administrative agency or other governmental body,
commission, agency, or official, or any arbitrator or self-regulatory
organization (including, without limitation, any insurance regulatory
agency or body) (collectively, a "Regulatory Authority") having
jurisdiction over any of them (except where any such violation or
violations individually or in the aggregate would not have a Material
Adverse Effect), or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any
contract, agreement, indenture, lease or other instrument to which any
of the Company or the Subsidiaries is a party or by which any of them
is bound or to which any of their respective properties or assets is
subject, and no condition or state of facts exists which, with the
passage of time or the giving of notice or both, would constitute such
a default (except where any such default or defaults individually or in
the aggregate would not have a Material Adverse Effect).
is bound or to which any of their respective properties or assets is
subject, and no condition or state of facts exists which, with the
passage of time or the giving of notice or both, would constitute such
a default (except where any such default or defaults individually or in
the aggregate would not have a Material Adverse Effect).
(n) Neither the execution and delivery by the Company of, or
the performance by it of its obligations under, this Agreement, the
PEPS Agreements, the Remarketing Agreement and the Securities, nor the
consummation of the transactions contemplated hereby will (A) conflict
with or contravene any provision of (i) any applicable statute, law,
regulation, ruling or filing, (ii) the memorandum of association,
certificate of incorporation, bye-laws or other organizational
documents of any of the Company or the Subsidiaries, (iii) any bond,
debenture, note or other evidence of indebtedness or any agreement,
indenture, lease or other instrument to which any of the Company or the
Subsidiaries is a party or by which any of them is or may be bound or
to which any of their respective properties or assets is or may be
subject, or (iv) any Order of any Regulatory Authority that is
applicable to any of the Company or the Subsidiaries or any of their
respective properties, except, with respect to the foregoing clauses
(i), (iii), and (iv), to the extent such conflict or contravention
would not have a Material Adverse Effect, or (B) result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of any of the Company or the Subsidiaries pursuant to
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the terms of any agreement or instrument to which any of them is a
party or by which any of them is bound or to which any of the property
or assets of any of them is subject (except where any such lien, charge
or encumbrance would not have a Material Adverse Effect).
(o) No consent, approval, authorization or order of,
qualification with, or registration or filing with any Regulatory
Authority applicable to the Company or any of its properties is
required for the performance by the Company of its obligations under
this Agreement, the PEPS Agreements, the Remarketing Agreement or the
Securities, except such as may be required (1) for registrations and
filings under the Securities Act or the Exchange Act, (2) under the
Insurance Laws (as defined below) or under the Investment Business Act
1998 of Bermuda, (3) under the securities or Blue Sky or insurance
securities laws of the various states in connection with the offer and
sale of the Securities and (4) Bermuda Monetary Authority approval, all
of which have been or will be effected on or prior to the Closing Date.
(p) The consolidated financial statements of the Company
(together with related schedules and notes) included in the
Registration Statement and Prospectus comply as to form in all material
respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder and present fairly
the consolidated financial position of the Company as at the dates
indicated and the results of its operations and its cash flows for the
periods specified; such financial statements and related schedules and
notes have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis during the
periods involved.
(q) There has not occurred any material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business or
operations of the Company and the Subsidiaries, taken as a whole, from
that set forth in the Registration Statement and the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(r) There are no legal or governmental proceedings pending or,
to the knowledge of any of the Company or the Subsidiaries, threatened
to which any of them is a party or to which any of their respective
properties is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, agreements, contracts, indentures, leases,
or other instruments or
7
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement or to any documents incorporated by reference
therein that are not described or filed as required.
(s) Each of the Company and the Subsidiaries (i) is in
compliance with the applicable requirements of the insurance statutes,
including the statutes relating to companies which control insurance
companies, and the rules, regulations and interpretations of the
insurance regulatory authorities thereunder ("Insurance Laws") of its
jurisdiction of incorporation, and (ii) has filed all reports,
information statements, documents, and other information required to be
filed thereunder, except in the case of the foregoing clauses (i) and
(ii) where the failure to comply would not have a Material Adverse
Effect; each of the Company and its Subsidiaries (as applicable)
maintains its books and records in accordance with and is in compliance
with the Insurance Laws of other jurisdictions which are applicable to
any of them, except where the failure to comply would not have a
Material Adverse Effect.
(t) Each of the Company and the Subsidiaries possesses such
consents, authorizations, approvals, orders, franchises, licenses,
certificates (including certificates of authority), or permits issued
by any regulatory agencies or bodies (collectively, "Permits") of and
from, and has made all declarations and filings with, all Regulatory
Authorities which are necessary to conduct the business as described in
the Registration Statement and the Prospectus, except where the failure
to possess such Permits or to make such declarations or filings would
not have a Material Adverse Effect; all of such Permits are in full
force and effect, and neither the Company nor the Subsidiaries has
received any notification from any Regulatory Authority, in the United
States, its jurisdiction of organization or elsewhere concerning any
alleged violation of the terms of, or proposed proceeding to revoke or
that could reasonably be expected to lead to the revocation,
modification, termination, suspension or any other material impairment
of the rights of the holder of any Permit or to the effect that any
additional Permit from such authority, commission or body is needed to
be obtained by any of them or that any of them is not in compliance
with any applicable Insurance Laws; and no insurance regulatory agency
or body has issued any order or decree impairing, restricting or
prohibiting the payment of any dividends by either of the Company or
the Subsidiaries or the continuation of the business of any of them as
currently conducted.
(u) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
or supplement
8
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(v) The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" within the meaning of the Investment Company act of 1940, as
amended.
(w) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to include any securities of the Company with the
Securities registered pursuant to the Registration Statement or, except
as described in the Prospectus and Registration Statement, to file a
registration statement under the Securities Act with respect to any
securities of the Company, in each case, other than such rights as have
been waived.
(x) Each of the Subsidiaries is duly registered as an insurer
or reinsurer where it is required to be so registered to conduct its
business as described in the Registration Statement and the Prospectus
(except where the failure to be so registered would not have a Material
Adverse Effect) and is subject to regulation and supervision in its
jurisdiction of organization, and the Company is not required to be so
registered. Each of the Company and the Subsidiaries is duly licensed
or admitted as an insurer or an insurance holding company, as
applicable, in each jurisdiction where it is required to be so licensed
or admitted to conduct its business as described in the Registration
Statement and the Prospectus, except for where the failure to be so
licensed or admitted would not have a Material Adverse Effect.
(y) None of the Underwriters or any subsequent purchasers of
the Securities (other than purchasers resident in Bermuda for Bermuda
exchange control purposes) is subject to any stamp duty, excise or
similar tax imposed in Bermuda in connection with the offering, sale or
purchase of the Securities.
(z) Any tax returns required to be filed by either the Company
or any of the Subsidiaries in any jurisdiction have been filed, and any
material taxes, including franchise taxes and similar fees and any
withholding taxes, penalties and interest, assessments and fees and
other charges due or claimed to be due from such entities have been
paid, other than any of those being contested in good faith and for
which adequate
9
reserves have been provided or any of those currently payable without
penalty or interest.
(aa) The Company and Partner Reinsurance have each received
from the Bermuda Minister of Finance an assurance under The Exempted
Undertakings Tax Protection Act, 1966 of Bermuda to the effect set
forth in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 under the caption "Business--Taxation of the Company
and its Subsidiaries--Bermuda," and neither the Company nor Partner
Reinsurance has received any notification to the effect (or is
otherwise aware) that such assurance may be revoked or otherwise not
honored by the Bermuda government.
(bb) There are no currency exchange control laws or
withholding taxes of Bermuda that would be applicable to the payment of
dividends (i) on the Preferred Securities or the Common Shares by the
Company, or (ii) by Partner Reinsurance to the Company.
(cc) Deloitte & Touche, who reported on the consolidated
financial statements and supporting schedules of the Company included
or to be included in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), is an independent public
accountant with respect to the Company as required by the Securities
Act.
(dd) The Company maintains, and each of the Subsidiaries
maintain, a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with United States generally
accepted accounting principles and with statutory accounting
principles, as the case may be, and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(ee) The Company has duly, validly and irrevocably appointed
PartnerRe U.S. Corporation as its agent for the purposes described in
Section 12 of this Agreement and to receive service of process in
actions against it arising out of or in connection with violations of
the U.S. Federal securities laws in any Federal court or state court in
the United States relating to the transactions covered by the
Prospectus.
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(ff) None of the Company nor the Subsidiaries or any employee
or agent thereof has made any payment of funds or received or retained
any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(gg) Consummation of the transactions contemplated by this
Agreement, including but not limited to any actions taken pursuant to
the indemnification and contribution provisions set forth herein, will
not constitute unlawful financial assistance under Bermuda law.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, hereby agrees, severally and not jointly, to purchase from
the Company at $48.50 per Firm Security (the "Purchase Price") the number of
Firm Securities set forth in Schedule I hereto opposite the name of such
Underwriter.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Option Securities, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 500,000 Option
Securities at the Purchase Price, plus accrued dividends, if any, to the Option
Closing Date (as defined below). If you, on behalf of the Underwriters, elect to
exercise such option, you shall so notify the Company in writing not later than
30 days after the date of this Agreement, which notice shall specify the number
of Option Securities to be purchased by the Underwriters and the date on which
such Option Securities are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Option Securities may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Securities. If
any Option Securities are to be purchased, each Underwriter agrees, severally
and not jointly, to purchase the number of Option Securities (subject to such
adjustments to eliminate fractional units as you may determine) that bears the
same proportion to the total number of Option Securities to be purchased as the
number of Firm Securities set forth in Schedule I hereto opposite the name of
such Underwriter bears to the total number of Firm Securities.
The Company hereby agrees that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 90 days after the
date of the Prospectus Supplement (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any
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option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any Securities, Purchase Contracts or Common Shares or
any securities convertible into or exercisable or exchangeable for any
Securities, Purchase Contracts or Common Shares or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Securities, Purchase Contracts or
Common Shares, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Securities to the Underwriters hereunder and (b) the issuance by the Company of
shares of Common Stock pursuant to, or the grant of options under, the Company's
existing stock option or stock purchase plans or upon exercise of the warrants
described in the Prospectus.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Securities as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Securities are to be offered to the public initially at
$50 per PEPS Unit (the "Public Offering Price"), and to certain dealers selected
by you at a price that represents a concession not in excess of $.90 per PEPS
Unit under the Public Offering Price.
4. Payment and Delivery. Payment for the Firm Securities to be sold by
the Company shall be made to the Company in Federal or other funds immediately
available in New York City against delivery to you for the respective accounts
of the several Underwriters of the certificates for the Firm Securities at the
offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York
10017, at 9:00 a.m., New York City time, on November 21, 2001, or at such other
time on the same or such other date, not later than five business days after the
date of this Agreement as shall be designated in writing by you. The time and
date of such payment are hereinafter referred to as the "Closing Date."
Payment for the Option Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
to Underwriters of the certificates for the Option Securities purchased by the
Underwriters on the date specified in the notice described in Section 2 or at
such other time on the same or on such other date, in any event not later than
10 business days after the expiration of the Underwriters' option to purchase
Option Securities as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "Option Closing Date."
The certificates, if any, for the Securities purchased by the
Underwriters shall be registered in such names and in such denominations as you
shall request
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in writing not later than one full business day prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates, if any, evidencing
the Firm Securities or Option Securities shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, for the respective
accounts of the several Underwriters, with any transfer taxes payable in
connection with the transfer of the Firm Securities or Option Securities to the
Underwriters duly paid, against payment of the Purchase Price with respect to
such Securities.
5. Conditions to the Underwriters' Obligations. The several obligations
of the Underwriters to purchase and pay for the Securities on the Closing Date
are subject, in the discretion of the Underwriters, to the condition that all
representations and warranties and other statements of the Company in this
Agreement are, at and as of the Closing Date, true and correct, the condition
that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and to the following conditions:
(a) The Prospectus as amended or supplemented in relation to
the Securities shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Securities Act and in
accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement shall have been instituted
or shall be pending or, to the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of the Underwriters.
(b) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded the Company's securities which are
rated as of the date of this Agreement by A.M. Best & Co.,
Standard & Poor's Rating Services or Moody's Investor
Services, Inc.; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its Subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that,
13
in your judgment, is material and adverse and that makes it,
in your judgment, impracticable to market the Securities on
the terms and in the manner contemplated in the Prospectus.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 5(b)(i) above and to
the effect that (A) the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date; and (B) there shall
not have occurred any change, or any development involving a
prospective change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement).
(d) The Underwriters shall have received on the Closing Date
an opinion of Willkie Farr & Gallagher, United States and French
counsel for the Company, dated the Closing Date and addressed to you in
form and substance reasonably satisfactory to counsel for the
Underwriters, to the effect that:
(i) each of PartnerRe U.S. and PartnerRe S.A. is a
company duly organized and validly existing in good standing
under the laws of its jurisdiction of organization and has
full power and authority to own or lease its property and to
conduct its business as described in the Prospectus;
(ii) each of the Purchase Contracts included in the
Firm Securities is a valid and legally binding agreement of
the Company, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency or similar laws relating
to or affecting creditors' rights generally and general
principles of equity, and the Purchase Contracts conform as to
legal matters to the description thereof contained in the
Prospectus;
(iii) the Pledge Agreement is effective to create in
favor of the Collateral Agent for the benefit of the Company,
a valid security interest under the New York Uniform
Commercial Code as in effect on the date hereof in the State
of New York (the "UCC") in the security entitlements in
respect of the Pledged Preferred Securities (as defined in the
Pledge Agreement) that are
14
from time to time credited to the Collateral Account (as
described in Section 4 of the Pledge Agreement) and, subject
to Article 9-315 of the UCC, the proceeds thereof, to secure
the obligations of the holders under the Purchase Contracts;
(iv) the security interest of the Collateral Agent in
security entitlements with respect to the Pledged Preferred
Securities (as defined under the Pledge Agreement) that are
from time to time credited to the Collateral Account (as
described in Section 4 of the Pledge Agreement) will be
perfected, and the Collateral Agent will have "control"
(within the meaning of Article 8-106 of the UCC) thereof, once
the Securities Intermediary has indicated by book entry that
such financial assets have been credited to the Collateral
Account. Under Section 8-510 of the UCC, assuming that neither
the Collateral Agent nor the Company has any notice of any
adverse claim to such security entitlements that are from time
to time credited to the Collateral Account, insofar as
Articles 8 and 9 of the UCC are applicable thereto, no action
based on an adverse claim to such security entitlements,
whether framed in conversation, repletion, constructive trust,
equitable lien or other theory, may be successfully asserted
against the Collateral Agent or the Company. In giving such
opinions contained in this paragraph 5(d)(iv) such counsel may
rely upon the representations of the parties contained in, and
may assume compliance by such parties with their undertakings
set forth, in the Pledge Agreement.
(v) each of the PEPS Agreements and the Remarketing
Agreement is a valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, (regardless
of whether enforcement is sought in a proceeding at law or in
equity) and each of the PEPS Agreements and the Remarketing
Agreement conforms to the descriptions thereof in the
Prospectus;
(vi) neither the issuance, sale or delivery of the
Securities by the Company, nor the execution, delivery and
performance by the Company of its obligations under this
Agreement, the PEPS Agreements, the Remarketing Agreement or
the Securities, nor the compliance by the Company with the
provisions hereof or thereof, as the case may be, nor the
consummation by the Company of any
15
of the transactions contemplated hereby will (A) conflict with
or contravene any provision of (i) any applicable statute,
law, regulation, ruling or filing (assuming compliance by the
Underwriters with all applicable securities and Blue Sky laws)
of any United States, New York or French Regulatory Authority,
except to the extent that such conflict or contravention would
not have a Material Adverse Effect, (ii) to the best of such
counsel's knowledge any agreement, indenture, lease or
instrument to which any of the Company or the Subsidiaries is
a party or by which any of them is bound or to which any of
their respective properties or assets is subject, except to
the extent such conflict or contravention would not have a
Material Adverse Effect, or (iii) to the best of such
counsel's knowledge, any Order of any United States, New York
or French Regulatory Authority that is applicable to any of
the Company or the Subsidiaries or any of their respective
properties except to the extent such conflict or contravention
would not have a Material Adverse Effect, or (B) to the best
of such counsel's knowledge, result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of any of the Company or the Subsidiaries
pursuant to the terms of any agreement or instrument to which
any of them is a party or by which any of them is bound or to
which any of the property or assets of any of them is subject
(except where any such lien, charge or encumbrance would not
have a Material Adverse Effect);
(vii) no consent, approval, authorization or order
of, qualification with, or registration or filing with any
United States or New York Regulatory Authority, is required
for the performance by the Company of its obligations under
this Agreement, except for such consent, approvals,
authorizations and orders (1) as have been obtained and (2) as
may be required under state securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Securities;
(viii) the statements (A) in the Prospectus
Supplement under the captions "Description of PEPS Units,"
"Description of the Purchase Contracts," "Certain Provisions
of the Purchase Contracts, the Purchase Contract Agreement and
the Pledge Agreement," and "Description of the Series B
Preferred Shares" and (B) in the Base Prospectus, as
supplemented by the Prospectus Supplement, under the captions
"Description of our Capital Shares," and "Description of the
Share Purchase Contracts and the Share Purchase Units," in
each case insofar as such statements
16
constitute summaries of documents referred to therein, fairly
summarize the matters referred to therein;
(ix) the discussion of United States tax matters set
forth under the heading "United States Federal Income Tax
Consequences" in the Prospectus accurately reflects such
counsel's opinion as to such tax laws (subject to the
qualifications and assumptions set forth in such discussion);
(x) to the best of such counsel's knowledge there are
no legal or governmental proceedings before or by any U.S.,
New York or French Regulatory Authority, now pending,
contemplated or threatened to which any of the Company or the
Subsidiaries is a party or to which any of their respective
properties is subject that is required to be described in the
Registration Statement or the Prospectus or any statutes,
regulations or orders that have been enacted, adopted or
issued by any U.S. New York or French Regulatory Authority or
Orders by a U.S., New York or French court of competent
jurisdiction that have been issued, or any contracts,
agreements, indentures, leases or other documents or
instruments, any of which are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement or to any document
incorporated by reference therein that are not described or
filed as required.
(xi) each document incorporated by reference in the
Registration Statement and the Prospectus (except for
financial statements and the notes thereto and schedules and
other financial and statistical data included therein, as to
which such counsel need not express any opinion) complied as
to form when filed with the Commission in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder;
(xii) to the extent that the laws of the State of New
York are applicable, the Company has validly and irrevocably
submitted to the non-exclusive jurisdiction of any United
States Federal or New York State court sitting in the Borough
of Manhattan, The City of New York, New York, over any suit,
action or proceeding arising out of or relating to this
Agreement, the PEPS Agreements, the Remarketing Agreement or
the Securities, has validly and irrevocably waived and agreed
not to assert, to the fullest extent, it may effectively do so
under applicable law, by way of motion, as a defense or
otherwise, any claim that it is not subject to the
jurisdiction of any such court, any objection that it may now
or
17
hereafter have to the laying of venue of any such suit, action
or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum;
(xiii) the Company, as provided in the Registration
Statement, has duly and irrevocably appointed PartnerRe U.S.
Corporation, as its agent for the purposes described in
Section 13 of this Agreement and to receive service of process
in actions against it arising out of or in connection with
violations of the U.S. Federal securities laws in any Federal
court or state court in the United States relating to
transactions covered by the Prospectus; and
(xiv) the Company is not, and after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus will not
be, required to register as an "investment company" as such
term is defined in the Investment Company Act of 1940, as
amended.
In addition, such counsel shall state that, although such counsel has
not undertaken to determine independently, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements in
the Registration Statement, except as stated above, such counsel has
participated in the preparation of the Registration Statement and the
Prospectus, including general review and discussion of the contents thereof and
such counsel (A) is of the opinion that the Registration Statement and
Prospectus (except for financial statements and schedules and other financial
and statistical data included therein as to which such counsel need not express
any opinion) comply as to form in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder, (B) has
no reason to believe that (except for financial statements and schedules and
other financial and statistical data as to which such counsel need not express
any belief) the Registration Statement and the Prospectus included therein at
the time the Registration Statement became effective contained any 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
(C) has no reason to believe that (except for financial statements and schedules
and other financial and statistical data as to which such counsel need not
express any belief) the Prospectus contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
18
In rendering their opinion as aforesaid, counsel may, as to factual
matters, rely upon written certificates of officers of the Company and, as to
matters of law, may rely upon the opinion of Appleby, Spurling & Kempe referred
to below and upon any other opinion or opinions, each dated the Closing Date, of
other counsel retained by the Company as to laws of any jurisdiction other than
the United States, France or the State of New York, provided that (i) you are
notified in advance of such counsel's intention to rely on local counsel and
each such counsel is acceptable to you, (ii) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion is
delivered to you and is, in form and substance reasonably satisfactory to you
and to counsel for the Underwriters, and (iii) counsel shall state in their
opinion that they believe that they and the Underwriters are justified in
relying on such local counsel opinion. Such counsel may also make such
assumptions as shall be reasonably satisfactory to your counsel.
(e) The Underwriters shall have received on the Closing Date
an opinion of Appleby, Spurling & Kempe, Bermuda counsel to the
Company, dated the Closing Date, and addressed to you in form and
substance reasonably satisfactory to counsel for the Underwriters, to
the effect that:
(i) each of the Company and Partner Reinsurance is a
company duly organized and validly existing in good standing
(including as an exempted company) under the laws of Bermuda,
has requisite power and authority and such Permits of any
Regulatory Authority in Bermuda (a "Bermuda Regulatory
Authority") necessary to own, lease and operate its property
and to conduct its business as described in the Registration
Statement and the Prospectus, which remain in full force and
effect, except to the extent that the failure to be in good
standing would not have a Material Adverse Effect;
(ii) the Company has the power and authority to enter
into this Agreement, the PEPS Agreements and the Remarketing
Agreement; the execution, delivery and performance of its
obligations under this Agreement, the PEPS Agreements and the
Remarketing Agreement by the Company have been duly and
validly authorized by the Company; and each of this Agreement,
the PEPS Agreements and the Remarketing Agreement has been
duly executed and delivered by the Company;
(iii) the authorized shares of capital stock of the
Company is as set forth under the caption "Capitalization" in
the Prospectus and conforms in all material respects as to
Bermuda legal matters
19
to the description thereof contained in the Prospectus; and
the shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and
non-assessable (meaning that no further sums are required to
be paid by the holders thereof in connection with the issue of
such shares) and all such shares of the Subsidiaries are
registered in the name of the Company or a wholly-owned
subsidiary of the Company, except in the case of PartnerRe
S.A. for director's qualifying shares; based solely on a
search of the Register of Charges maintained by the Registrar
of Companies pursuant to Sections 55 and 61 of the Companies
Act 1981 of Bermuda, as amended (the "Companies Act"), there
are no registered liens, encumbrances, equities or claims in
the Register of Charges in respect of the issued shares of the
Company or Partner Reinsurance;
(iv) the Securities have been duly authorized,
executed and delivered by the Company;
(v) the Preferred Securities included in the Firm
Securities have been duly authorized, executed and delivered
by the Company, and when issued and delivered in accordance
with this Agreement, will be validly issued, fully paid and
nonassessable;
(vi) the Common Shares underlying the Purchase
Contracts included in the Firm Securities have been duly
authorized and reserved for issuance, and when issued and
delivered in accordance with the provisions of the PEPS
Agreements, will be validly issued, fully paid and
nonassessable, and the issuance of the Common Shares will not
be subject to any preemptive rights other than such rights as
have been waived;
(vii) neither the execution, delivery and performance
by the Company of its obligations under this Agreement, the
PEPS Agreements or the Remarketing Agreement nor the
compliance by the Company with the provisions hereof or
thereof, as the case may be, nor the consummation by the
Company of any of the transactions contemplated hereby will
(A) conflict with or contravene any provision of (i) any
applicable statute, law, regulation or published ruling or
Order of any Bermuda Regulatory Authority in any material
respect that is applicable to the Company or Partner
Reinsurance or any of their respective properties or (ii) the
memorandum of association, certificate of incorporation, bye-
laws or other organizational documents of the Company or
Partner
20
Reinsurance or (B) to the best of such counsel's knowledge,
based solely on a search of the Register of Charges maintained
by the Registrar of Companies pursuant to Sections 55 and 61
of the Companies Act, create or impose any lien, charge or
encumbrance upon any property or assets of either of the
Company or Partner Reinsurance;
(viii) no consent, approval, authorization or order
of, qualification with, or registration or filing with any
Bermuda Regulatory Authority is required for the performance
by the Company of its obligations under this Agreement, the
PEPS Agreements or the Remarketing Agreement that has not been
obtained or effected;
(ix) Partner Reinsurance is duly registered as a
Class 4 insurer under the Bermuda Insurance Act 1978, as
amended, and any applicable rules and regulations thereunder
(the "Bermuda Insurance Act"), and is subject to regulation
and supervision in Bermuda and the Company is not required to
be registered as an insurance company under the Bermuda
Insurance Act;
(x) the consummation of the transactions contemplated
by the Agreement (including but not limited to any actions
taken pursuant to the indemnification and contribution
provisions contained herein), the PEPS Agreements or the
Remarketing Agreement will not, subject to Section 39A(2A) of
the Companies Act, constitute unlawful financial assistance by
the Company or Partner Reinsurance under Bermuda law;
(xi) all statements made (A) in the Registration
Statement and Prospectus (including the documents incorporated
therein by reference) with respect to (1) the Securities, the
PEPS Agreements and the Remarketing Agreement (insofar as such
statements relate to matters of Bermuda law), (2) the
memorandum of association, bye-laws or other organizational
documents of the Company or Partner Reinsurance, (3) statutes,
regulations, rules, treaties and other laws of Bermuda
(including, but not limited to, statements made with respect
to insurance, regulatory and tax matters and to the Bermuda
Insurance Act), (4) enforcement of judgments in Bermuda and
(5) the statements related to Bermuda or the documents
governed by Bermuda law made under the headings "Description
of our Capital Shares,""Description of PEPS
Units,""Description of Purchase Contracts,""Certain Provisions
of the Purchase Contracts, the Purchase Contract Agreement and
the
21
Pledge Agreement"and "Description of the Series B Preferred
Shares," (B) in the Registration Statement in Item 15 with
respect to the Company and (C) in the descriptions of the
common shares and the 8% Series A Cumulative Preferred Shares
of the Company incorporated by reference into the Prospectus,
in each case insofar as such statements constitute summaries
of documents referred to therein, fairly and accurately
present the information set forth therein and such counsel's
opinion as to such matter;
(xii) none of the Underwriters or any subsequent
purchasers of the Securities are subject to any stamp duty,
excise or similar tax imposed in Bermuda in connection with
the offering, sale or purchase of the Securities;
(xiii) the Company and Partner Reinsurance have each
received from the Bermuda Minister of Finance an assurance of
tax exemption under The Exempted Undertakings Tax Protection
Act 1966 of Bermuda to the effect set forth in the Company's
Annual Report on Form 10-K for the year ended December 31,
2000 under the caption "Business--Regulation--Taxation of the
Company and its Subsidiaries--Bermuda";
(xiv) there are no currency exchange control laws or
withholding taxes of Bermuda that would be applicable to the
payment of dividends on the Preferred Securities and the
Common Shares by the Company or by Partner Reinsurance to the
Company;
(xv) the Company, as provided in the Registration
Statement, has duly and irrevocably appointed PartnerRe U.S.
Corporation as its agent for the purposes described in Section
12 of this Agreement and to receive service of process in
actions against it arising out of or in connection with
violations of the U.S. Federal securities laws in any Federal
court or state court in the United States relating to
transactions covered by the Prospectus and such appointment is
valid under Bermuda law;
(xvi) under the laws of Bermuda, the submission by
the Company to the non-exclusive jurisdiction of any United
States Federal or New York State court sitting in the Borough
of Manhattan, The City of New York, New York, over any suit,
action or proceeding arising out of or relating to this
Agreement or the Securities, its waiver and agreement not to
assert by way of motion, as a defense or otherwise, any claim
that it is not subject to
22
the jurisdiction of any such court, any objection that it may
now or hereafter have to the laying of venue of any such suit,
action or proceeding brought in any such court and any claim
that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum and the
appointment of PartnerRe U.S. Corporation as its authorized
agent for the purposes described in Section 12 of this
Agreement are valid and binding; and service of process
effected in the manner set forth in Section 12 of this
Agreement will be effective under the laws of Bermuda to
confer personal jurisdiction over each of the Company and the
Subsidiaries, assuming this to be the case under the laws of
the State of New York;
(xvii) the choice of the laws of New York as the
governing law of this Agreement is a valid and effective
choice of law; the several Underwriters would be permitted to
commence proceeding in a court of competent jurisdiction in
Bermuda based on or arising under this Agreement, the PEPS
Agreements or the Remarketing Agreement; and the laws of New
York would be recognized and applied by such court as the laws
governing this Agreement;
(xviii) in order to ensure the legality, validity,
enforceability or admissibility in evidence of the Prospectus,
this Agreement, the PEPS Agreements and the Remarketing
Agreement, it is not necessary that any document be filed,
recorded or enrolled with any Bermuda Regulatory Authority or
that any stamp duties, registration or similar tax or charge
be paid in Bermuda;
(xix) a final and conclusive judgment of a New York
State or a Federal Court against the Company or any Subsidiary
based upon this Agreement, the PEPS Agreements and the
Remarketing Agreement, under which a sum of money is payable
(not being a sum payable in respect of taxes or other charges
of a like nature or in respect of a fine or other penalty or
in respect of multiple damages as defined in the Protection of
Trading Interest Act, 1981) may be the subject of enforcement
proceedings in the Supreme Court of Bermuda under the common
law doctrine of Obligation and by action for the debt
evidenced by the foreign Court's judgment. A final opinion as
to the availability of this remedy should be sought when the
facts surrounding the United States court's judgement are
known, but, on general principles such counsel would expect
such proceedings to be successful provided that:
23
(A) the court that gave the judgment was
competent to hear the action in accordance with
private international law principles as applied by
the courts in Bermuda (and, as at the date hereof, we
believe that a Court in Bermuda would determine that
any New York State or Federal Court sitting in the
City of New York is so competent); and
(B) the judgement is not contrary to public
policy in Bermuda and was not obtained by fraud or in
proceedings contrary to the rules of natural justice
of Bermuda. We do not believe that any provisions of
the Agreement, the Remarketing Agreement or the PEPS
Agreements would be so contrary;
(xx) there are no legal or governmental proceedings
of any Bermuda Regulatory Authority pending or, to the best of
such counsel's knowledge, threatened against any of the
Company or Partner Reinsurance or to which any of them or any
of their respective properties is subject, based solely on (i)
a certificate given by a director of the Company and (ii) a
search of the public records of the Company and Partner
Reinsurance, maintained by the Registrar of Companies and the
Registrar of the Supreme Court of Bermuda; and
(xxi) except as disclosed in the Prospectus, there
are no preemptive or other rights to subscribe for or to
purchase or any restriction upon the voting or transfer of,
any shares of capital stock of the Company or Partner
Reinsurance pursuant to the Company's or Partner Reinsurance's
memorandum of association, certificate of incorporation,
bye-laws or other organizational documents, respectively, and
the issuance of the Securities, Preferred Securities and
Common Shares will not be subject to any preemptive or similar
rights.
In rendering their opinion as aforesaid, Appleby,
Spurling & Kempe may, as to factual matters, rely upon written
certificates of officers of the Company or the Subsidiaries
and, as to matters of law, may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel
retained by them or the Company as to laws of any jurisdiction
other than Bermuda, provided that (i) you are notified in
advance of such counsel's intention to rely on local counsel
and each such local counsel is acceptable to you, (ii) such
reliance is expressly authorized by each opinion so relied
upon and
24
a copy of each such opinion is delivered to you and is, in
form and substance reasonably satisfactory to you and to
counsel for the Underwriters, and (iii) Appleby, Spurling &
Kempe shall state in their opinion that they believe that they
and the Underwriters are justified in relying on such local
counsel opinion. Such counsel may also make such assumptions,
and express their opinion to be subject to such reservations,
as shall be reasonably satisfactory to your counsel. In their
opinion, counsel shall expressly authorize Willkie Farr &
Gallagher and Davis Polk & Wardwell to rely on said opinion.
(f) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, counsel for the Underwriters,
dated the Closing Date in form and substance satisfactory to the
Underwriters.
The opinions of Willkie Farr & Gallagher described in paragraph 5(d)
and of Appleby, Spurling & Kempe described in paragraph 5(e) above shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
(g) The Underwriters shall have received on the Closing Date
an opinion of Pryor Cashman Sherman & Flynn LLP, counsel to JPMorgan
Chase Bank, as Purchase Contract Agent, dated the Closing Date, and
addressed to you in form and substance reasonably satisfactory to
counsel for the Underwriters, to the effect that:
(i) the Purchase Contract Agent is duly incorporated
as a New York banking corporation with all necessary corporate
power and authority to execute, deliver and perform its
obligations under the Purchase Contract Agreement and the
Pledge Agreement;
(ii) the execution, delivery and performance by the
Purchase Contract Agent of the Purchase Contract Agreement and
the Pledge Agreement have been duly authorized by all
necessary corporate action on the part of the Purchase
Contract Agent, and the Purchase Contract Agreement and the
Pledge Agreement have been duly executed and delivered by the
Purchase Contract Agent, and constitute the valid and binding
agreements of the Purchase Contract Agent, enforceable against
the Purchase Contract Agent in accordance with their 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
25
proceeding in equity or at law) and an implied covenant of
good faith and fair dealing;
(iii) the execution, delivery and performance of the
Purchase Contract Agreement and the Pledge Agreement by the
Purchase Contract Agent does not conflict with or constitute a
breach of the charter or by-laws of the Purchase Contract
Agent; and
(iv) no consent, approval or authorization of, or
registration with or notice to, any state or federal
governmental authority or agency governing the corporate trust
powers of the Purchase Contract Agent is required for the
execution, delivery or performance by the Purchase Contract
Agent of the Purchase Contract Agreement and the Pledge
Agreement.
(h) The Underwriters shall have received, on each of the date
hereof and on the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Deloitte & Touche, independent chartered
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statement and certain financial
information contained in the Registration Statement and the Prospectus.
(i) The Securities shall have been approved for listing,
subject only to official notice of issuance, on the New York Stock
Exchange.
(j) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and Swiss Reinsurance and certain
executive officers and directors of the Company relating to sales and
certain other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in
full force and effect on the Closing Date.
(k) The Company shall have furnished or caused to be furnished
to you such further certificates and documents as you shall have
reasonably requested.
The several obligations of the Underwriters to purchase Option
Securities hereunder are subject to the delivery to the Underwriters on the
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of the
Option Securities and other matters related to the issuance of the Option
Securities.
26
6. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, upon request, without charge, four
conformed copies of the Registration Statement as originally filed with
the Commission and of each amendment thereto, (including financial
statements, all exhibits thereto and documents incorporated therein by
reference and exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto but including documents incorporated therein by
reference) and to furnish to you in New York City and to each
Underwriter and dealer, without charge, prior to 10:00 A.M. New York
City time on the business day next succeeding the date of this
Agreement and from time to time as expeditiously as possible during the
period mentioned in paragraph (c) below, as many copies of the
Prospectus, any documents incorporated therein by reference and
exhibits thereto, and any supplements and amendments thereto or to the
Registration Statement as originally filed and of each amendment
thereto, as you may reasonably request. The Company consents to the use
of the Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Securities Act and with the
securities or Blue Sky laws of the jurisdictions in which the
Securities are offered by the several Underwriters and by all dealers
to whom Securities may be sold, in connection with the offering and
sale of the Securities.
(b) (i) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule, and (ii) during the period mentioned in
paragraph (c) below not to file any information, documents or reports
pursuant to the Exchange Act that upon filing becomes a document
incorporated by reference in the Registration Statement, without
delivering a copy of such information, documents or reports to you
prior to or concurrently with such filing.
(c) If, during such period after execution and delivery of
this Agreement as in the opinion of counsel for the Underwriters a
prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist
that in the judgment of the Company or in the opinion of counsel for
the Underwriters is required to be set forth in the Prospectus (as then
amended
27
or supplemented) or should be set forth therein in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion or counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus (or to file under the Exchange Act any
document which, upon filing, becomes a document incorporated therein by
reference) to comply with applicable law, forthwith to prepare and,
subject to the provisions of paragraph (b) above, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus (or such document) so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Securities for offer and sale
by the several Underwriters and by dealers under the securities, or
Blue Sky laws of such jurisdictions as you shall reasonably request.
(e) To make generally available to its securityholders as soon
as practicable, but in any event not later than fifteen months after
the effective date of the Registration Statement (as defined in Rule
158(c)), 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 and regulations of the Commission
thereunder (including at the option of the Company Rule 158);
(f) To endeavor to list any Common Shares underlying the
Securities (including any Common Shares that may be issued pursuant to
the certificate of designation relating to the Preferred Securities) on
the New York Stock Exchange;
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company (including local and special
counsel) and accountants in connection with the registration and
delivery of the Securities under the Securities Act and all other fees
or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all
printing or reproduction costs associated
28
therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities herein above specified,
(ii) all costs and expenses related to the transfer and delivery of the
Securities to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the costs of producing this Agreement, the PEPS
Agreements, the Remarketing Agreement and any Blue Sky memorandum in
connection with the offer and sale of the Securities under state
securities laws and all expenses in connection with the qualification
of the Securities for offer and sale under state securities laws as
provided in Section 6(d) hereof, including filing fees and the
reasonable fees, expenses and disbursements of counsel for the
Underwriters in connection with the Blue Sky memoranda and such
qualification, (iv) any filing fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification
of the offering of the Securities by the National Association of
Securities Dealers, Inc., (v) any fees charged by rating agencies for
the rating of the Securities, (vi) all costs and expenses incident to
the listing of the Securities and the Common Shares underlying the
Securities (including any Common shares that may be issued under any
certificate of designation related to the Preferred Securities) on any
national securities exchange, (vii) all fees and expenses in connection
with the preparation and filing of the registration statement on Form
8-A relating to the Securities and all costs and expenses incident to
the listing the Securities on the New York Stock Exchange, (viii) the
cost of producing certificates representing the Securities, (ix) the
costs and charges of the Purchase Contract Agent, Collateral Agent and
any transfer agent, registrar or depositary, (x) the costs and expenses
of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, and (xi) all other costs and expenses incident to the performance
of the obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except
as provided in this Section, Section 7(f) below and the last paragraph
of Section 9 below, the Underwriters will pay all of their costs and
expenses, including fees and disbursements of their counsel, stock
transfer taxes payable on resale of any of the Securities by them and
any advertising expenses connected with any offers they may make.
7. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
29
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), 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 not misleading (in the case of any preliminary prospectus or the
Prospectus, in light of the circumstances under which it was made), except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendment or
supplement thereto) was not sent or given by or on behalf of such Underwriter to
such person, if required by law to have been so delivered, at or prior to the
written confirmation of the sale of the Securities sold by the Company to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company
and the officers or representatives of the Company who sign the
Registration Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriter but only with reference
to information relating to such Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to paragraph (a) or (b) of this
Section 7, such person (the "indemnified party") shall promptly notify
the person against whom such indemnity may be sought (the "indemnifying
party")
30
in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated, in the case
of parties indemnified pursuant to paragraph (a) of this Section 7, and
by the Company, in the case of parties indemnified pursuant to
paragraph (b) of this Section 7. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences
of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
31
(d) To the extent the indemnification provided for in
paragraph (a) and (b) of this Section 7 is unavailable to any
indemnified party or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters
on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Securities shall be deemed to be
in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the Prospectus, bear
to the aggregate Public Offering Price of the Securities. The relative
fault of the Company on the one hand and the Underwriters on the other
hand 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 Company on the one hand or by the
Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective number of Securities they have purchased hereunder, and not
joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 7 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 that does not take account of the equitable considerations
referred to in paragraph (d) of this Section 7. The amount paid or
payable by an indemnified party as the result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in
32
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount
of any damages that 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 Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
7 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other statements
of the Company contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of
the Securities.
8. Termination. This Agreement shall be subject to termination by
notice given by you to the Company if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange or the National Association
of Securities Dealers, Inc., (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or in Bermuda declared
by Bermuda authorities or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in your judgment, is material and adverse and (b) in the case of
any of the events specified in clauses 8(a)(i) through 8(a)(iv), such event,
singly or together with any other such event, makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
33
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Securities
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Securities to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Securities set forth opposite their respective names in Schedule I bears to
the aggregate number of Firm Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the number of Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such number of Securities without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Securities and the aggregate number of Firm
Securities with respect to which such default occurs is more than one-tenth of
the aggregate number of Firm Securities to be purchased, and arrangements
satisfactory to you and the Company for the purchase of such Firm Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the Company.
In any such case either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Option Securities and the aggregate number of Option Securities with respect to
which such default occurs is more than one-tenth of the aggregate number of
Option Securities to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Option
Securities or (ii) purchase not less than the number of Option Securities that
such non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform their obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
34
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
12. Judicial Proceedings. (a) The Company expressly accepts and
irrevocably submits to the non-exclusive jurisdiction of the United States
Federal or New York State court sitting in the Borough of Manhattan, The City of
New York, New York, over any suit, action or proceeding arising out of or
relating to this Agreement or the Securities. To the fullest extent it may
effectively do so under applicable law, the Company irrevocably waives and
agrees not to assert, by way of motion, as a defense or otherwise, any claim
that it is not subject to the jurisdiction of any such court, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.
(b) The Company agrees, to the fullest extent that it may
effectively do so under applicable law, that a judgment in any suit,
action or proceeding of the nature referred to in Section 12(a) brought
in any such court shall be conclusive and binding upon the Company,
subject to rights of appeal and may be enforced in the courts of the
United States of America or the State of New York (or any other court
the jurisdiction to which the Company is or may be subject) by a suit
upon such judgment.
(c) The Company irrevocably designates and appoints PartnerRe
U.S. Corporation as its authorized agent, upon whom process may be
served in any suit, action or proceeding of the nature referred to in
Section 12(a) by mailing a copy thereof by registered or certified
mail, postage prepaid, return receipt requested, to the agent at the
address of the Company specified in Section 13. The Company agrees that
such service (i) shall be deemed in every respect effective service of
process upon it in every suit, action or proceeding and (ii) shall, to
the fullest extent permitted by law, be taken and held to be valid
personal service upon and personal delivery to the Company. Notices
hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any
commercial delivery service.
35
(d) Nothing in this Section 12 shall affect the right of any
Underwriter to serve process in any manner permitted by law, or limit
any right to bring proceedings against the Company in the courts of any
jurisdiction or to enforce in any lawful manner a judgment obtained in
one jurisdiction in any other jurisdiction.
13. Notice. Except as otherwise provided herein, notice given pursuant
to any provision of this Agreement shall be in writing and shall be delivered
(i) if to the Company, at the office of the Company at PartnerRe Ltd., 96 Pitts
Bay Road, Pembroke HM 08, Bermuda, Attention: Corporate Secretary; or (ii) if to
you care of Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York
10036, Attention: Manager, Corporate Finance Division.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
36
Very truly yours,
PARTNERRE LTD.
By: /s/ Albert Benchimol
_________________________
Name: Albert Benchimol
Title: Chief Financial Officer
and Executive Vice-President
Accepted as of the date hereof.
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
Acting severally on behalf of itself and the several Underwriters named
in Schedule I hereto
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/ Donald Sung
_________________________
Name: Donald Sung
Title: Executive Director
37
SCHEDULE I
Number of
Firm Securities
Underwriter To Be Purchased
Morgan Stanley & Co. Incorporated 2,450,000
Credit Suisse First Boston Corporation 350,000
Goldman, Sachs & Co. 350,000
J.P. Morgan Securities Inc. 350,000
-----------------------
Total 3,500,000
38
SCHEDULE II
Title of Securities:
8% PEPS /SM/ Units
Registration Statement:
Registration Statement No. 333-72246
Number of Firm Securities:
3,500,000 PEPS /SM/ Units
Number of Option Securities:
500,000 PEPS /SM/ Units
Price to Public:
$50 per PEPS /SM/ Unit
Purchase Price by Underwriters:
$48.50 per PEPS /SM/ Unit
Dividend Rate on Preferred Securities:
5.61% of the stated liquidation preference of $50 per annum
Specified funds for payment of purchase price:
Federal (same day) funds
Reference Price:
$47.00
Threshold Appreciation Price:
$57.50
39
Closing Price of PartnerRe Ltd. Common Stock on November 15, 2001:
$47.00
Payment Dates:
March 31, June 30, September 30, December 31, commencing December 31,
2001
Purchase Contract Settlement Date:
December 31, 2004
Maturity of Preferred Security:
June 30, 2005
Stock Exchange Listing:
New York Stock Exchange
Closing Date:
November 21, 2001
Closing Location:
New York, New York
Names and addresses of Underwriters:
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
40
Exhibit A
[Form of PEPS Lock-Up Agreement]
November , 2001
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("Morgan Stanley") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with PartnerRe Ltd., a Bermuda corporation (the
"Company") and certain of its affiliates, providing for the public offering (the
"Public Offering") by the several Underwriters, including Morgan Stanley (the
"Underwriters"), of Premium Equity Participating Security Units -- PEPS K (each
a "Security" and collectively, the "Securities") which require any holder of a
Security to, among other things, purchase from the Company, on a future date,
shares of the Company's Common Stock, par value $__ per share (the "Common
Stock").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending on the earlier of (a) 90 days after the date of
the final prospectus supplement relating to the Public Offering (the "Prospectus
Supplement") and (b) March 20, 2002, (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for any
Securities or shares of Common Stock or (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Securities or shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) the sale of any Securities to the
Underwriters pursuant to the Underwriting Agreement, (b) transactions relating
to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering, (c) sales or
surrenders of options or securities to the Company in payment of the exercise
price of options granted pursuant to the Company's stock option or stock
purchase plans, (d)
41
dispositions of Common Stock or other securities of the Company by gift to
members of the undersigned's immediate family, to trusts established for the
benefit of members of the undersigned's immediate family, or to charitable
organizations (provided that any such person, trust, or charitable organization
agrees as a condition to receiving such gifts to be bound by the terms of this
Lock-Up Agreement) or (e) transfers to an affiliate of the undersigned (provided
that any such affiliate agrees to be bound by the terms of this Lock-Up
Agreement). In addition, the undersigned agrees that, without the prior written
consent of Morgan Stanley on behalf of the Underwriters, it will not, during the
period commencing on the date hereof and ending on the earlier of (a) 90 days
after the date of the Prospectus Supplement and (b) March 20, 2002, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of the undersigned's share of Common Stock except in compliance
with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Notwithstanding anything to the contrary contained herein, this Lock-Up
Agreement will terminate and shall be of no further effect in the event that
either the Underwriting Agreement is terminated or the sale of the Securities in
the Public Offering has not occurred on or before December 31, 2001.
Very truly yours,
--------------------------------------------
(Name)
--------------------------------------------
(Address)
42