Everest Re Group, Ltd.
Common Shares
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Underwriting Agreement
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February 21, 2002
To the Underwriters named in the respective
Pricing Agreements hereinafter described.
Ladies and Gentlemen:
From time to time Everest Re Group, Ltd., a Bermuda company (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firm(s) named in
Schedule I to the applicable Pricing Agreement (such firm(s) constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its Common Shares, par value $0.01 per
share (the "Shares"), specified in Schedule I to such Pricing Agreement (with
respect to such Pricing Agreement, the "Firm Shares"), upon the terms and
conditions set forth in Schedule II to such Pricing Agreement. If specified in
such Pricing Agreement, the Company may grant to the Underwriters the right to
purchase at their election an additional number of Shares as provided in Section
3 hereof (the "Optional Shares"). The Firm Shares and the Optional Shares, if
any, which the Underwriters elect to purchase pursuant to Section 3 hereof are
herein collectively called the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to
time to the Underwriters of such Shares, for whom the firm(s) designated as
representative(s) of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representative(s) (the "Representatives"), if any.
The term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to an Underwriter or Underwriters who act
on its or their own behalf without any firm being designated as its or their
representatives. This Underwriting
Agreement shall not be construed as an obligation of the Company to sell any of
the Shares or as an obligation of any of the Underwriters to purchase any of the
Shares. The obligation of the Company to issue and sell any of the Shares and
the obligation of any of the Underwriters to purchase any of the Shares shall be
evidenced by the Pricing Agreement with respect to the Designated Shares
specified therein. Each Pricing Agreement shall specify the aggregate number of
the Firm Shares, the maximum number of Optional Shares, if any, the initial
public offering price of such Firm Shares and Optional Shares or the manner of
determining such price, the purchase price to the Underwriters of such
Designated Shares, the names of the Underwriters of such Designated Shares, the
names of the Representatives of such Underwriters, the number of such Designated
Shares to be purchased by each Underwriter and the commission, if any, payable
to the Underwriters with respect thereto and shall set forth the date, time and
manner of delivery of such Firm Shares and Optional Shares, if any, and payment
therefor. The Pricing Agreement shall also specify (to the extent not set forth
in the registration statement and prospectus with respect thereto) the terms of
such Designated Shares. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. If there is more than
one Underwriter, the obligations of such Underwriters under this Agreement and
each Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-72664)
and one or more pre-effective amendments thereto (the "Initial
Registration Statement") in respect of the Shares have been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to the Initial Registration
Statement, but including all documents incorporated by reference in the
prospectus included therein, to the Representatives for each of the
other Underwriters, if any, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no
other document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been filed,
or transmitted for filing, with the Commission (other than prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or, to the best of the
Company's knowledge, threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(a) under the Act, is hereinafter
called a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement, any post-effective amendments thereto and the
Rule 462(b) Registration Statement, if any, including all exhibits
thereto and the documents incorporated by reference in the prospectus
contained in the Initial Registration Statement at the time such part
of the Initial Registration Statement became effective, each as amended
at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if
any, became or
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hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Shares, in the
form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement,
being hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
the applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Initial Registration Statement shall be deemed to refer to and include
any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the applicable Designated Shares in the
form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Underwriter of
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Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or material interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree
material to the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
material change in the capital stock or any material change in the
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus;
(e) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
(to the extent such concept is relevant) under the laws of the
jurisdiction of its incorporation, with corporate power and authority
to own their respective properties and conduct their respective
businesses as described in the Prospectus, and each of them has been
duly qualified as a foreign corporation for the transaction of business
and is in good standing (to the extent such concept is relevant) under
the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"); the
Company has full corporate power and authority to enter into this
Agreement and to carry out all the terms and provisions hereof to be
carried out by it; and this Agreement has been duly executed and
delivered by the Company;
(f) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(g) The Shares have been duly and validly authorized, and, when
the Firm Shares are issued and delivered pursuant to this Agreement and
the Pricing Agreement with respect to such Designated Shares and, in
the case of any Optional Shares, pursuant to Over-allotment Options (as
defined in Section 3 hereof) with respect to such Optional Shares, such
Designated Shares will be duly and validly issued and fully paid and
non-assessable; the Shares conform to the description thereof contained
in the Registration Statement and the Designated Shares will conform to
the description thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Shares;
(h) The issue and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement, any Pricing
Agreement and each Over-allotment Option, if any, and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material
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agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, except for any such conflict, breach,
violation or default which would not have a Material Adverse Effect,
nor will such action result in any violation of the provisions of (A)
the Memorandum of Association or Bye-Laws of the Company or the
organizational documents of any of its subsidiaries or (B) any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties, except, in the case of this clause (B), for
any such violation which, individually or in the aggregate, would not
have a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement or any
Over-allotment Option, except such as have been, or will have been
prior to the Time of Delivery, obtained under the Act and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters;
(i) The statements set forth (A) in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Shares, and under the captions
"Material Tax Considerations" and "Plan of Distribution", insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate and complete in all material
respects; and (B) in the Prospectus as amended or supplemented under
the caption "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, will be
accurate and complete in all material respects;
(j) Neither the Company nor any of its subsidiaries is in
violation of its Memorandum of Association or Bye-Laws or other
organizational document or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or
other material agreement or instrument to which it is a party or by
which it or any of its properties may be bound except for such as
individually or in the aggregate would not have a Material Adverse
Effect;
(k) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject, which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(l) Other than as set forth in the Prospectus, all dividends
and other distributions declared and payable on the shares of capital
stock of the Company will not be subject to withholding or other taxes
under the laws and regulations of Bermuda and are otherwise free and
clear of any other tax, withholding or deduction in Bermuda and without
the necessity of obtaining any consent, approval, authorization, order,
registration, clearance and qualification of or with any court or
governmental agency or body having jurisdiction over the Company or
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any of its significant subsidiaries (as defined in Rule 1-02(w) of
Regulation S-X) or any of their properties or any stock exchange
authorities in Bermuda;
(m) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(n) The Company is not a Passive Foreign Investment Company
("PFIC") within the meaning of Section 1296 of the United States
Internal Revenue Code of 1986, as amended, and, assuming it conducts
its business as described in the Prospectus, does not expect to become
a PFIC. The Company has no current plans to conduct its business in a
manner that would cause it to become a PFIC;
(o) No stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or
on behalf of the Underwriters to Bermuda or any political subdivision
or taxing authority thereof or therein in connection with (A) the sale
and delivery by the Company of the Shares to or for the respective
accounts of the Underwriters or (B) the sale and delivery outside
Bermuda by the Underwriters of the Shares to the initial purchasers
thereof;
(p) Neither the Company nor any of its subsidiaries has taken,
directly or indirectly, any action which was designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(q) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(r) The consolidated financial statements and financial
statement schedules of the Company and its consolidated subsidiaries
included in the Registration Statement and the Prospectus fairly
present in all material respects the financial position of the Company
and its consolidated subsidiaries and the results of operations and
changes in financial condition and cash flows as of the dates and
periods therein specified. Such financial statements and financial
statement schedules have been prepared in accordance with generally
accepted accounting principles in the United States consistently
applied throughout the periods involved (except as otherwise noted
therein);
(s) Each of the Company and its subsidiaries, when necessary,
is duly licensed to conduct an insurance or a reinsurance business, as
the case may be, under the insurance statutes of each jurisdiction in
which the conduct of its business requires such licensing, except for
such jurisdictions in which the failure of the Company or any of its
subsidiaries to be so licensed would not, individually or in the
aggregate, have a Material Adverse Effect. The Company and each of its
subsidiaries have made all required filings under applicable insurance
holding company statutes in each jurisdiction where such filings are
required, except for such jurisdictions in which the failure to make
such filings would not, individually or in the aggregate, have a
Material Adverse Effect. Each of the Company and its subsidiaries has
all other necessary authorizations, approvals, orders, consents,
certificates, permits, registrations and qualifications of and from all
insurance regulatory authorities necessary to conduct their respective
businesses as described in the Prospectus, except where the failure
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to have such authorizations, approvals, orders, consents, certificates,
permits, registrations or qualifications would not, individually or in
the aggregate, have a Material Adverse Effect, and neither the Company
nor any of its subsidiaries has received any notification from any
insurance regulatory authority to the effect that any additional
authorization, approval, order, consent, certificate, permit,
registration and qualification needs to be obtained by either the
Company or any of its subsidiaries, in any case, where it could be
reasonably expected that (x) the Company or any of its subsidiaries
would be required either to obtain such additional authorization,
approval, order, consent, certificate, permit, registration or
qualification or to cease or otherwise limit the writing of certain
business and (y) the failure to obtain such additional authorization,
approval, order, consent, certificate, permit, registration or
qualification or the limiting of the writing of such business would
have a Material Adverse Effect; and no insurance regulatory authority
having jurisdiction over the Company or any of its subsidiaries has
issued any order or decree impairing, restricting or prohibiting the
payment of dividends by or to the Company or any of its subsidiaries;
and
(t) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters
pursuant to this Agreement shall be deemed to be a representation and
warranty by the Company, and not by such officer in an individual
capacity, to each Underwriter as to the matters covered thereby.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Over-allotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the Prospectus as amended or supplemented, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised by written notice from the Representatives to
the Company, given within a period specified in the Pricing Agreement, setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless the Representatives and the Company
otherwise agree in writing, earlier than or later than the respective number of
business days after the date of such notice set forth in such Pricing Agreement.
The number of Optional Shares, if any, to be added to the number of
Firm Shares to be purchased by each Underwriter (as set forth in Schedule I to
the applicable Pricing Agreement) shall be, in each case, the number of Optional
Shares set forth in the applicable Pricing Agreement; provided that, if such
number of Optional Shares is not set forth in the applicable Pricing Agreement,
the number of Optional Shares to be so added shall be, in each case, that
proportion of Optional Shares which the number of Firm Shares to be purchased by
such Underwriter under such Pricing Agreement bears to the aggregate number of
Firm Shares (rounded as the Representatives may determine to the nearest 100
shares). The total number of Designated Shares to be purchased by all the
Underwriters pursuant to such Pricing Agreement shall be the aggregate number of
Firm Shares set forth in Schedule I to such Pricing Agreement plus the aggregate
number of Optional Shares which the Underwriters elect to purchase pursuant to
such Pricing Agreement.
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4. Certificates for the Firm Shares and the Optional Shares, if any, to
be purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in definitive form and in such authorized denominations and registered
in such names as the Representatives may request upon at least 48 hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of each such Underwriter, against payment by
each such Underwriter or on its behalf of the purchase price therefor by wire
transfer of Federal (same-day) funds to the account specified by the Company to
the Representatives at least forty-eight hours in advance of the Time of
Delivery (as defined in this Section 4) as specified in such Pricing Agreement,
(i) with respect to the Firm Shares, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such time
and date being herein called the "First Time of Delivery" and (ii) with respect
to the Optional Shares, if any, in the manner and at the time and date specified
by the Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representatives and the Company may agree upon in writing, such
time and date, if not the First Time of Delivery, herein called the "Second Time
of Delivery". Each such time and date for delivery is herein called a "Time of
Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Shares and prior to the Time of
Delivery for such Shares which shall be disapproved by the
Representatives for such Shares promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment
or supplement after such Time of Delivery and furnish the
Representatives with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Shares, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Shares, of the suspension of the
qualification of such Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Shares or suspending any such qualification,
to promptly use its best efforts to obtain the withdrawal of such
order;
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(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for
offering and sale under the securities laws of such jurisdictions in
the United States as the Representatives may request and to comply with
such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of such Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or as
a dealer in securities or to file a general consent to service of
process in any jurisdiction or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not otherwise
subject;
(c) Prior to 10:00 A.M., New York City time, on the second New
York Business Day (as defined in Section 16 hereof) next succeeding the
date of this Agreement and from time to time, to furnish the
Underwriters with written and electronic copies of the Prospectus as
amended or supplemented in New York City in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Shares and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many written and
electronic copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, provided that any such amended Prospectus or supplement to
the Prospectus required to be delivered following the expiration of
nine months after the time of issue of the Prospectus shall be prepared
and furnished at the expense of the Underwriters;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement, an earnings statement
(as defined in Rule 158(c) under the Act) of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing until the date 60 days after the date of this Agreement, not
to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any Shares or securities of the Company that are
convertible into or exchangeable for, or that represent the right to
receive, Shares or any such convertible or exchangeable securities
(other than (i) pursuant to stock option or other similar plans
existing on the date of this Agreement, (ii) pursuant to this
Agreement, or (iii) any Shares issued, or options awarded, to
non-employee directors), without the prior written consent of the
Representatives;
(f) That the Underwriters shall have received letters, dated the
First Time of Delivery, from Joseph V. Taranto, Thomas J. Gallagher,
Stephen L. Limauro and Peter J.
9
Bennett, whereby each such person agrees, for the period commencing on
the date of the Time of Delivery and ending 30 days after the date of
this Agreement, not to offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any Shares, or publicly
disclose the intention to make any such offer, sale, pledge or disposal
without the prior written consent of the Representatives.
(g) To use its reasonable best efforts to remain eligible to use
Form S-3 under the Act;
(h) To use its best efforts to cause the Designated Shares to be
listed on the New York Stock Exchange;
(i) To use the net proceeds received by it from the sale of the
Designated Shares pursuant to this Agreement and the Pricing Agreement
in the manner set forth in the Prospectus as amended or supplemented
under the caption "Use of Proceeds";
(j) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement, and the Company shall at the time of filing
either pay the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act; and
(k) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if
any, operated by such Underwriter for the purpose of facilitating the
on-line offering of the Shares (the "License"); provided, however, that
the License shall be used solely for the purpose described above, is
granted without any fee and may not be assigned or transferred.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Designated Shares under the Act and all
other out of pocket expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing (excluding any related legal fees) any Agreement among Underwriters,
this Agreement, any Pricing Agreement, any Blue Sky memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Designated Shares; (iii) all
expenses in connection with the qualification of the Designated Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with any
Blue Sky memoranda; (iv) any filing fees incident to, and the reasonable fees
and disbursements of counsel for the Underwriters in connection with, any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Designated Shares; (v) the cost of preparing
certificates for the Designated Shares; (vi) the cost and charges of any
transfer agent or registrar or dividend disbursing agent; (vii) all expenses and
taxes arising as a result of the issuance, sale and delivery of the Designated
Shares to or for the respective accounts of the Underwriters, and all Bermuda
taxes, duties or similar expenses arising as a result of the sale and delivery
outside of Bermuda of the
10
Designated Shares by the Underwriters to the initial purchasers thereof, in the
manner contemplated under this Agreement and the Pricing Agreement including, in
any such case, any Bermuda income, capital gains, withholding, transfer or other
tax asserted against an Underwriter by reason of the purchase and sale of the
Designated Shares pursuant to the Underwriting Agreement and the Pricing
Agreement; and (viii) all other costs and expenses incident to the performance
of its obligations hereunder and under any Over-allotment Options which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Shares by them (other than
any imposed by Bermuda or any political subdivision or taxing authority thereof
or therein), and any advertising expenses connected with any offers they may
make.
7. The obligations of the Underwriters of any Designated Shares
under the Pricing Agreement relating to such Designated Shares shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Shares are, at and as of the Time of Delivery for such Designated Shares, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Shares 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 Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall
have furnished to the Representatives such written opinion or opinions,
dated the Time of Delivery for such Designated Shares, with respect to
the matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Conyers, Dill & Pearman, Bermuda counsel for the Company,
shall have furnished to the Representatives their written opinion,
dated the Time of Delivery for such Designated Shares, in form and
substance reasonably satisfactory to the Representatives, to the effect
that:
(i) The Company is duly incorporated and existing under the
laws of Bermuda in good standing (meaning that it has not
failed to make any required filing with any Bermuda
governmental authority or to pay any Bermuda government fee or
tax, which would make it liable to be struck off the Register
of Companies and thereby cease to exist under the laws of
Bermuda), and the Company has the necessary corporate power
and authority to own its properties and conduct its business
as described in the Prospectus as amended or supplemented;
11
(ii) The Company has the necessary corporate power and
authority to enter into and perform its obligations under the
Agreement and the Pricing Agreement and to issue the Shares
pursuant to the Agreement and the Pricing Agreement. The
execution and delivery of the Agreement and the Pricing
Agreement by the Company and the performance by the Company of
its obligations thereunder will not violate the memorandum of
association or bye-laws of the Company nor any applicable law,
regulation, order or decree in Bermuda;
(iii) The Company has taken all corporate action
required to authorize the execution, delivery and performance
of the Agreement and the Pricing Agreement. Each of the
Agreement and the Pricing Agreement has been duly executed by
or on behalf of the Company and constitutes the valid and
binding obligations of the Company enforceable in accordance
with its terms;
(iv) No order, consent, approval, license,
authorization or validation of or exemption by any government
or public body or authority of Bermuda or any sub-division
thereof is required to authorize or is required in connection
with the issue and sale of the Designated Shares being
delivered at such Time of Delivery or the execution, delivery,
performance and enforcement of the Agreement and the Pricing
Agreement, except such as have been duly obtained in
accordance with Bermuda law and which are in full force and
effect;
(v) The statements contained in the Prospectus under
the caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Shares,
and under the caption "Material Tax Considerations", insofar
as they purport to describe the provisions of the statutes,
regulations, rules, treaties and other laws of Bermuda, fairly
and accurately present the information set forth therein;
(vi) The Company has an authorized capitalization as
set forth in the Prospectus as amended or supplemented and all
of the issued shares of capital stock of the Company and, upon
payment for the Designated Shares in accordance with this
Agreement and the Pricing Agreement for an amount at least
equal to the par value thereof and registration of such
Designated Shares in the Company's Register of Members, the
Designated Shares will be validly issued, fully paid and
non-assessable (meaning that no further sums are required to
be paid by the holders thereof in connection with the issue
thereof); and the Designated Shares conform to the description
thereof in the Prospectus as amended or supplemented;
(vii) There are no Bermuda stamp duty, transfer or
similar taxes payable in respect of the issue and delivery of
the Shares to the Underwriters or any subsequent purchasers
(assuming that such Underwriters or subsequent purchasers are
not resident in Bermuda for exchange control purposes and
subject to the conditions attached to the Bermuda Monetary
Authority permissions received) pursuant to this Agreement and
the Pricing Agreement. Neither this Agreement nor the Pricing
Agreement is subject to ad valorem stamp duty in Bermuda, and
no registration, documentary, recording, transfer or other
similar tax, fee or charge by any Bermuda government authority
is payable in connection with the execution, delivery, filing,
registration or performance of this Agreement or the Pricing
Agreement;
12
(viii) There is no capital gains, income or other tax of
Bermuda imposed by withholding or otherwise on any payment to
be made to or by the Company pursuant to this Agreement or the
Pricing Agreement;
(ix) The Company is not entitled to any immunity under
the laws of Bermuda, whether characterised as sovereign
immunity or otherwise, from any legal proceedings to enforce
this Agreement or the Pricing Agreement in respect of itself
or its property;
(x) The Company has the necessary corporate power and
authority, and has taken all corporate action required, to
appoint Joseph A. Gervasi, Vice President, General Counsel and
Secretary of the Company as agent for the receipt of any
service of process with respect to actions arising out of or
in connection with any suit, action or proceeding based on
this Agreement or the Pricing Agreement and the offer and sale
of the Shares by the Company pursuant to the Prospectus;
(xi) The appointment by the Company of Joseph A.
Gervasi, Vice President, General Counsel and Secretary of the
Company as agent for the receipt of any service of process in
connection with any matter arising out of or in connection
with this Agreement or the Pricing Agreement is a valid and
effective appointment, if such appointment is valid under the
laws of New York and if no other procedural requirements are
necessary in order to validate such appointment;
(xii) The Company's agreement to the choice of law
provisions set forth in Section 14 hereof is a valid choice of
law and would be recognized and given effect to in any action
brought before a court of competent jurisdiction in Bermuda,
except for those laws (A) which such court considers to be
procedural in nature, (B) which are revenue or penal laws or
(C) the application of which would be inconsistent with public
policy, as such term is interpreted under the laws of Bermuda.
To the extent Bermuda law is applicable, the submission in
this Agreement or any Pricing Agreement to the exclusive
jurisdiction of the courts of New York is valid and binding
upon the Company; and
(xiii) The courts of Bermuda would recognise as a valid
judgment, a final and conclusive judgment in personam obtained
in the federal courts of New York against the Company based
upon this Agreement or the Pricing Agreement under which a sum
of money is payable (other than a sum of money payable in
respect of multiple damages, taxes or other charges of a like
nature or in respect of a fine or other penalty) and would
give a judgment based thereon provided that (a) such courts
had proper jurisdiction over the parties subject to such
judgment, (b) such courts did not contravene the rules of
natural justice of Bermuda, (c) such judgment was not obtained
by fraud, (d) the enforcement of the judgment would not be
contrary to the public policy of Bermuda, (e) no new
admissible evidence relevant to the action is submitted prior
to the rendering of the judgment by the courts of Bermuda and
(f) there is due compliance with the correct procedures under
the laws of Bermuda.
In rendering such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and of public officials. Such
opinions shall be limited to the laws of Bermuda. The parties
13
acknowledge that, in rendering such opinions, such counsel is not
rendering any opinion with respect to the insurance laws or
regulations.
References to the Registration Statement and the Prospectus in
this paragraph (c) shall include any amendment or supplement thereto at
the date of such opinion.
(d) Clarke & Co., Barbados counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Time
of Delivery for such Designated Shares, in form and substance
reasonably satisfactory to the Representatives, to the effect that the
statements set forth in the Prospectus under the caption "Material Tax
Considerations", insofar as they purport to describe the provisions of
the statues, regulations, rules, treaties and other laws of Barbados
fairly and accurately present the information set forth therein.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and of public
officials. Such opinions shall be limited to the laws of Barbados. The
parties acknowledge that, in rendering such opinions, such counsel is
not rendering any opinion with respect to the insurance laws or
regulations.
References to the Registration Statement and the Prospectus in
this paragraph (d) shall include any amendment or supplement thereto at
the date of such opinion.
(e) Mayer, Brown, Rowe & Maw, U.S. counsel for the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery for such Designated Shares, in form and substance reasonably
satisfactory to you, to the effect that:
(i) Each of the Agreement and the Pricing Agreement has
been
duly delivered by or on behalf of the Company;
(ii) The statements set forth (A) in the Prospectus under
the captions "Material Tax Considerations" and "Plan of
Distribution", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are
accurate and complete in all material respects; and (B) in the
Prospectus as amended or supplemented under the caption
"Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are
accurate and complete in all material respects;
(iii) The Registration Statement and the Prospectus as
amended or supplemented and any further amendments and
supplements thereto made by the Company prior to the Time of
Delivery for the Designated Shares (other than the financial
statements and related schedules and other financial data
included therein or omitted therefrom, as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder; and
(iv) The Company is not an "Investment Company", as such
term is defined in the Investment Company Act.
Such counsel shall also state that although it does not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus as
amended or supplemented, except for those referred to in the opinion in
subsection (ii) of this Section 7(e), no facts have come to its
attention that have
14
caused it to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior to
the Time of Delivery (other than the financial statements and related
schedules and other financial data included therein or omitted
therefrom, as to which such counsel need express no belief) contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the Prospectus as
amended or supplemented or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than the
financial statements and related schedules and other financial data
included therein or omitted therefrom, as to which such counsel need
express no belief) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading or that, as of the Time of Delivery, the Prospectus as
amended or supplemented or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than the
financial statements and related schedules and other financial data
included therein or omitted therefrom, as to which such counsel need
express no belief) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and of public
officials. Such opinions shall be limited to the federal laws of the
United States and the laws of New York State. The parties acknowledge
that, in rendering such opinions, such counsel is not rendering any
opinion with respect to the insurance laws or regulations or any
securities laws other than U.S. federal securities laws.
References to the Registration Statement and the Prospectus in
this paragraph (e) shall include any amendment or supplement thereto at
the date of such opinion.
(f) Joseph A. Gervasi, Vice President, General Counsel and
Secretary of the Company, shall have furnished to you a written
opinion, dated such Time of Delivery, in form and substance reasonably
satisfactory to you, to the effect that:
(i) The Company and each of its subsidiaries, where
necessary, is duly licensed to conduct an insurance or a
reinsurance business, as the case may be, under the insurance
statutes of each jurisdiction in which the conduct of its
business requires such licensing, except for such
jurisdictions in which the failure of the Company or any of
its subsidiaries to be so licensed would not, individually or
in the aggregate, reasonably be expected to have a Material
Adverse Effect, and the Company and its subsidiaries have made
all required filings under applicable insurance holding
company statutes in each jurisdiction where such filings are
required, except for such jurisdictions in which the failure
to make such filings would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. The Company and each of its subsidiaries has all other
necessary authorizations, approvals, orders, consents,
certificates, permits, registrations and qualifications of and
from all insurance regulatory authorities necessary to conduct
their respective businesses as described in the Prospectus,
except where the failure to have such authorizations,
approvals, orders, consents, certificates, permits,
15
registrations or qualifications would not, individually or in
the aggregate, reasonably be expected to have a Material
Adverse Effect, and neither the Company nor any of its
subsidiaries has received any notification from any insurance
regulatory authority to the effect that any additional
authorization, approval, order, consent, certificate, permit,
registration or qualification is needed to be obtained by
either the Company or any of its subsidiaries, in any case
where it could be reasonably expected that (x) the Company or
any of its subsidiaries would be required either to obtain
such additional authorization, approval, order, consent,
certificate, permit, registration or qualification or to cease
or otherwise limit the writing of certain business and (y) the
failure to obtain such additional authorization, approval,
order, consent, certificate, permit, registration or
qualification or the limiting of the writing of such business
would have a Material Adverse Effect; and no insurance
regulatory authority having jurisdiction over the Company or
any of its subsidiaries has issued any order or decree
impairing, restricting or prohibiting the payment of dividends
by or to the Company or any of its subsidiaries;
(ii) Other than as set forth in the Registration
Statement or the Prospectus as amended or supplemented, there
are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate
reasonably be expected to have a Material Adverse Effect; and,
to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others;
(iii) Such counsel does not know of any contract or
document of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the
Prospectus as amended or supplemented which is not so filed,
incorporated by reference or described;
(iv) The issue and sale of the Designated Shares being
delivered at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the
Pricing Agreement with respect to the Designated Shares and
the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, (A) any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is
bound or to which any of the property of the Company or any of
its subsidiaries is subject, or any statute or any rule,
regulation or order known to such counsel of any court or
governmental agency or body having jurisdiction over any of
its subsidiaries or any of their properties (except for such
conflicts, breaches, violations or defaults which do not or
would not, individually or in the aggregate have a Material
Adverse Effect), or (B) any provision of the Memorandum of
Association or Bye-Laws of the Company or the organizational
documents of any of its subsidiaries;
(v) No consent, approval, authorization or order of, or
registration, qualification or filing with, any court or
governmental agency or body having jurisdiction over the
16
Company or any of its subsidiaries or any of their respective
properties is required for the issue and sale of the
Designated Shares or the consummation by the Company of the
transactions contemplated by this Agreement or such Pricing
Agreement under state or foreign insurance laws;
(vi) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
financial statements and related schedules and other financial
data included therein or omitted therefrom, as to which such
counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be,
complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
and
(vii) Neither the Company nor any of its subsidiaries
is (i) in violation of its respective charter or by-laws or
other organizational documents or (ii) to the knowledge of
such counsel, in default in the performance or observance of
any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other material agreement or instrument to
which it is a party or by which it or any of its properties
may be bound or affected, except, in the case of clause (ii),
for such as, individually or in the aggregate, would not have
a Material Adverse Effect.
Such counsel shall also state that although he does not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus as
amended or supplemented, nothing has come to his attention which has
caused him to believe that any of the documents incorporated by
reference in the Prospectus as amended or supplemented (other than the
financial statements and related schedules and other financial data
included therein or omitted therefrom, as to which such counsel need
express no belief), when they became effective or were so filed, as the
case may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the
case of other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading.
In rendering such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and its subsidiaries and of public
officials. Such opinions shall be limited to the federal laws of the
United States and the laws of the State of New Jersey and the insurance
laws of the State of Delaware.
References to the Registration Statement and the Prospectus in
this paragraph (f) shall include any amendment or supplement thereto at
the date of such opinion.
(g) On the date of the Pricing Agreement for such Designated
Shares at a time prior to the execution of the Pricing Agreement with
respect to such Designated Shares and at the Time of Delivery for such
Designated Shares, the independent accountants of the Company
17
who have certified the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration
Statement shall have furnished to the Representatives a letter, dated
the effective date of the Registration Statement or the date of the
most recent report filed with the Commission containing financial
statements and incorporated by reference in the Registration Statement,
if the date of such report is later than such effective date, and a
letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto, and with respect to such letter dated such
Time of Delivery, as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the
Representatives;
(h) (i) Neither the Company nor any of its subsidiaries taken as
a whole shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus as amended or supplemented prior to the date of the Pricing
Agreement relating to the Designated Shares any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Agreement relating to the Designated Shares, and
(ii) since the respective dates as of which information is given in the
Prospectus as amended or supplemented prior to the date of the Pricing
Agreement relating to the Designated Shares there shall not have been
any change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Agreement relating to the Designated Shares, the
effect of which, in any such case described in clause (i) or (ii), is
in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Shares on the terms and in
the manner contemplated in the Prospectus as amended or supplemented
relating to the Designated Shares;
(i) On or after the date of the Pricing Agreement relating to
the Designated Shares (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock or the
Company's financial strength or claims paying ability by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or
preferred stock or the Company's financial strength or claims paying
ability, the effect of which, in any such case described in clause (i)
or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Shares on the terms
and in the manner contemplated in the Prospectus as amended or
supplemented relating to the Designated Shares;
(j) On or after the date of the Pricing Agreement relating to
the Designated Shares there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Company's securities on the
New York Stock Exchange; (iii) a
18
general moratorium on commercial banking activities declared by either
Federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in
the United States; (iv) a change or development involving a prospective
change in Bermuda taxation affecting the Company, the Shares or the
transfer thereof; (v) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
a national emergency or war or (vi) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States, Bermuda or elsewhere, if the effect of
any such event specified in clause (v) or (vi) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Firm Shares or Optional
Shares or both on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Shares;
(k) The Shares at each Time of Delivery shall have been duly
listed, subject to notice of issuance, on the New York Stock Exchange;
(l) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of the Pricing
Agreement relating to such Designated Shares; and
(m) The Company shall have furnished or caused to be furnished
to the Representatives at the Time of Delivery for the Designated
Shares a certificate or certificates of officers of the Company
reasonably satisfactory to the Representatives as to the accuracy of
the representations and warranties of the Company herein at and as of
such Time of Delivery, as to the performance by the Company of all of
its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (h) of
this Section and as to such other matters as the Representatives may
reasonably request.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Designated
Shares, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Designated Shares, or any such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter of Designated Shares through the Representatives expressly for use
in the Prospectus as amended or supplemented relating to such Designated Shares;
and provided, further, that the Company shall not be liable to any Underwriter
under the indemnity agreement in this
19
subsection (a) with respect to any Preliminary Prospectus or Prospectus to the
extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Designated Shares to a person
as to whom it shall be established that there was not sent or given, at or prior
to the written confirmation of such sale, a copy of the Prospectus (excluding
documents incorporated by reference) or of the Prospectus as then amended or
supplemented (excluding documents incorporated by reference) in any case where
such delivery is required by the Act if the Company has previously furnished
copies thereof in sufficient quantity to such Underwriter and the loss, claim,
damage or liability of such Underwriter results from an untrue statement or
omission of a material fact contained in the Preliminary Prospectus or
Prospectus which was (i) identified in writing to such Underwriter at or prior
to the earlier of the filing with the Commission or the furnishing to such
Underwriter of the Prospectus or the Prospectus as then amended or supplemented
and (ii) corrected in the Prospectus (excluding documents incorporated by
reference) or in the Prospectus as then amended or supplemented (excluding
documents incorporated by reference).
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Designated Shares, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Designated Shares, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to
20
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party. No indemnified party shall, without the written consent
of the indemnifying party (such written consent not to be unreasonably
withheld), effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending action or claim in respect of which
indemnification or contribution is sought hereunder if the indemnifying party
has assumed the defense of such action or claim.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Shares on the other from the offering of the Designated Shares
to which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Underwriters
of the Designated Shares on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and such Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of
21
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligations of the Underwriters of
Designated Shares in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations with respect to such Shares and not
joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Shares, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Firm Shares or Optional Shares, as the case may be, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties reasonably satisfactory to the
Representatives to purchase such Shares on such terms. In the event that, within
the respective prescribed period, the Representatives notify the Company that
they have so arranged for the purchase of such Shares, or the Company notifies
the Representatives that it has so arranged for the purchase of such Shares, the
Representatives or the Company shall have the right to postpone the Time of
Delivery for such Shares for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Shares and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm Shares
or Optional Shares, as the case may be, which such Underwriter agreed to
purchase under such Pricing Agreement) of the Firm Shares or Optional Shares, as
the case may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the
22
Representatives and the Company as provided in subsection (a) above, the
aggregate number of Firm Shares or Optional Shares, as the case may be, which
remains unpurchased exceeds one-eleventh of the aggregate number of the Firm
Shares or Optional Shares, as the case may be, to be purchased at the respective
Time of Delivery, as referred to in subsection (b) above, or if the Company
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Firm Shares or Optional Shares, as the
case may be, of a defaulting Underwriter or Underwriters, then the Pricing
Agreement relating to such Firm Shares or the Over-allotment Option relating to
such Optional Shares, as the case may be, shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Designated Shares.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, the Company shall not then be under any
liability to any Underwriter with respect to the Firm Shares or Optional Shares
covered by such Pricing Agreement, except as provided in Sections 6 and 8
hereof; but, if for any other reason, the Designated Shares are not delivered by
or on behalf of the Company as provided herein, the Company will reimburse the
Underwriters through the Representatives for all out-of-pocket expenses approved
in writing by the Representatives, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of such Designated Shares, but the Company shall then be under
no further liability to any Underwriter with respect to such Designated Shares
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail,
overnight courier, telex or facsimile transmission to the address of the
Representatives as set forth in the Pricing Agreement; and if to the Company
shall be delivered or sent by mail, overnight courier, telex or facsimile
transmission to the agent for service of process set forth in the Registration
Statement, Attention: General Counsel, with a copy thereof (which copy shall not
constitute notice to the Company) sent by facsimile transmission to Mayer,
Brown, Rowe & Maw, 190 South LaSalle Street, Chicago, Illinois 60603, facsimile
number (312) 701-7711, Attention: Richard W. Shepro, Esq.; provided, however,
that any notice to an Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile
23
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any New York court, (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding. The Company irrevocably waives any immunity to
jurisdiction to which it may otherwise be entitled or become entitled (including
sovereign immunity, immunity to pre-judgment attachment, post-judgment
attachment and execution) in any legal suit, action or proceeding against it
arising out of or based on this Agreement or the transactions contemplated
hereby which is instituted in any New York court or in any competent court in
Bermuda. The Company has appointed Joseph A. Gervasi, Vice President, General
Counsel and Secretary of the Company, as its authorized agent (the "Authorized
Agent") upon whom process may be served in any such action arising out of or
based on this Agreement or the transactions contemplated hereby which may be
instituted in any New York court by any Underwriter or by any person who
controls any Underwriter, expressly consents to the jurisdiction of any such
court in respect of any such action, and waives any other requirements of or
objections to personal jurisdiction with respect thereto. Such appointment shall
be irrevocable. The Company represents and warrants that the Authorized Agent
has agreed to act as such agent for service of process and agrees to take any
and all action, including the filing of any and all documents and instruments,
that may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent and written notice of
such service to the Company shall be deemed, in every respect, effective service
of process upon the Company.
15. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company, as the case may be, will
indemnify each Underwriter against any loss incurred by such Underwriter as a
result of any variation as between (i) the rate of exchange at which the United
States dollar amount is converted into the judgment currency for the purpose of
such judgment or order and (ii) the rate of exchange at which an Underwriter is
able to purchase United States dollars with the amount of the judgment currency
actually received by such Underwriter. The foregoing indemnity shall constitute
a separate and independent obligation of the Company and shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "rate of
24
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of or conversion into United States dollars.
16. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business, and the term "New York Business Day"
shall mean any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or obligated by
law to close in The City of New York.
17. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
18. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
Very truly yours,
Everest Re Group, Ltd.
By: /s/ Stephen L. Limauro
----------------------------------
Name: Stephen L. Limauro
Title: Executive Vice President, Chief
Financial Officer and Treasurer
25
ANNEX I
Pricing Agreement
-----------------
[Name(s) of Underwriters]
As Representatives of the several
Underwriters named in Schedule I hereto,
[c/o Representative(s)]
_________ ___, 2002
Ladies and Gentlemen:
Everest Re Group, Ltd., a Bermuda company (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated _________ ___, 2002 (the "Underwriting Agreement"), to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Shares specified in Schedule II hereto (the "Designated Shares" consisting of
Firm Shares and any Optional Shares the Underwriters may elect to purchase).
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Shares pursuant to Section 12 of the Underwriting Agreement
and the address of the Representatives referred to in such Section 12 are set
forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares, as
provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company at the purchase price to the Underwriters set forth in
Schedule II hereto that portion of the number of Optional Shares as to which
such election shall have been exercised.
I-1
The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering Over-allotments in
the sale of the Firm Shares. Any such election to purchase Optional Shares may
be exercised by written notice from the Representatives to the Company given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date of such notice.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
Everest Re Group, Ltd.
By:
-------------------------
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Representative(s)]
[Name(s) of other Underwriters]
By:
-------------------------
(Representative(s))
I-2
SCHEDULE I
Maximum Number
of Optional
Number of Shares Which
Firm Shares May be
Underwriter to be Purchased Purchased
----------- --------------- ---------
[Name(s) of Representative(s)].....................
[Name(s) of other Underwriters, if any]............
Total............................ --------------- -----------
=============== ===========
I-3
SCHEDULE II
Title of Designated Shares:
Common Shares (par value $0.01 per share)
Number of Designated Shares:
Number of Firm Shares:
Maximum Number of Optional Shares:
Initial Offering Price to Public:
[$..... per Share] [Formula]
Purchase Price by Underwriters:
[$..... per Share] [Formula]
[Commission Payable to Underwriters:
$..... per Share in [specify same form of funds as in Specified Funds below]]
Form of Designated Shares:
Definitive form, to be made available for checking at least twenty-four hours
prior to the Time of Delivery at the office of The Depository Trust Company or
its designated custodian
Specified Funds for Payment of Purchase Price:
Federal (same-day) funds
Time of Delivery:
..... a.m. (New York City time), .......... , 2002
Closing Location:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.
I-4
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable rules and regulations adopted by the Commission;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
pro forma financial information) audited or examined, as applicable, by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related rules and regulations; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial
data, pro forma financial information and/or condensed financial
statements derived from audited financial statements of the Company for
the periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the representative or
representatives of the Underwriters (the "Representatives"), such term
to include an Underwriter or Underwriters who act without any firm
being designated as its or their representatives, and are attached to
such letters;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
reports on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which are attached to such
letters; and on the basis of specified procedures including inquiries
of officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
rules and regulations, nothing came to their attention that caused them
to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related rules and regulations adopted by the Commission;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for five
such fiscal years included or incorporated by reference in the
Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures
II-1
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or
included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act
and the published rules and regulations adopted by the
Commission, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act
and the rules and regulations adopted by the Commission
thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
II-2
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated
by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decrease in shareholders' equity or other
items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except
in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or
consolidated net premiums earned or the total or per share
amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or decreases
which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein, except as expressly stated otherwise herein) as defined in the
Underwriting Agreement as of the date of the letter delivered on the date of the
Pricing Agreement for purposes of such letter and to the Prospectus as amended
or supplemented (including the documents incorporated by reference therein) in
relation to the applicable Designated Shares for purposes of the letter
delivered at the Time of Delivery for such Designated Shares.
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