Exhibit 1.1
Execution Copy
Everest Re Group, Ltd.
Common Shares
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Underwriting Agreement
April 23, 2003
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".
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. 333-97367) and one
or more pre-effective amendments thereto (the "Initial Registration
Statement") in respect of the Shares and certain other debt securities,
preferred stock, warrants, stock purchase contracts, stock purchase units
or a combination thereof have been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered or
to be delivered to the Representatives and, excluding exhibits to the
Initial Registration Statement, but including all documents incorporated by
reference in the prospectus included therein, to the Representatives for
each of the other Underwriters, if any, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
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
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at the time such part of the Initial Registration Statement became
effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; the
prospectus relating to the 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
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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 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 the Pricing Agreement and to carry out all the terms and provisions
hereof and thereof to be carried out by it; and this Agreement and the
Pricing Agreement have been duly authorized, 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
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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 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 (as defined in Section 4 hereof), 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 our capital stock", insofar as they purport to constitute a
summary of the terms of the Shares, and under the caption "Plan of
distribution", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects; and (B) in the Prospectus as amended or supplemented
under the captions "Material tax considerations" and "Underwriting",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, will be accurate and complete in all
material respects;
(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, individually or
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in the aggregate might reasonably be expected to result in 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 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 1297 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,
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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 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.
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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.
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 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
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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;
(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
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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, Keith T. Shoemaker and Peter J. Bennett (together, the "Applicable
Officers"), whereby each such Applicable Officer agrees, for the period
commencing on the date of this Agreement and ending 5 business 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 and for a period
of 30 days after the date of this Agreement not to offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly more than
50,000 Shares or any securities convertible into or exchangeable for more
than 50,000 Shares.
(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 decides to rely on 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
10
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
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;
11
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;
(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 our 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;
12
(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;
(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, Senior 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, Senior
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
13
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 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, Gittens & Farmer, 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;
14
(ii) The statements set forth (A) in the Prospectus under the
caption "Plan of distribution", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate and complete in all material respects; and (B) in the
Prospectus as amended or supplemented under the captions "Material tax
considerations" and "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;
(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;
(vi) The Company is not an "Investment Company", as such term is
defined in the Investment Company Act;
(vii) The Registration Statement is effective under the Act and,
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act or proceedings therefor initiated or threatened by the Commission;
and
(viii) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement or the
Pricing Agreement, except such as have been 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.
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
caused it to believe that (1) 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
15
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 or (2) 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 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, Senior 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
16
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, 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, individually or in the
aggregate might 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
17
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 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 insurance laws; and
(vi) 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.
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) At the Time of Delivery for such Designated Shares, and, if so
specified in the Pricing Agreement, on the date of the Pricing Agreement,
the independent accountants of the Company 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 date of such Time of Delivery and, if
applicable, such date of the Pricing Agreement, respectively, to the effect
set forth in Annex II hereto, and as to such other matters as the
Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(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, (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
18
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; and (iii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented prior to
the date of the Pricing Agreement relating to the Designated Shares, there
shall not have been any decrease in the consolidated shareholders' equity
of the Company except for mark to market adjustments related to investments
available for sale that do not exceed 10% of the consolidated shareholders'
equity of the Company
(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
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 (iv), (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;
19
(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 second
New York Business Day next succeeding the date of the Pricing Agreement
relating to such Designated Shares;
(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; and
(n) There shall not exist any circumstances beyond the control of the
Underwriters that make it impossible, impracticable or illegal or cause any
of them to be in breach of any restriction (whether fiduciary, regulatory
or otherwise) which may be claimed by any person for the obligations of the
Underwriters in connection with the transactions contemplated by this
Agreement to be cleared or transferred through the clearance system or by
the settlement procedure normally utilized to clear or settle such
obligations.
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 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
20
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 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
21
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 the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
22
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.
23
(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 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: Carol S. Rivers, Esq.; provided, however, that
24
any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the 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, Senior 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 exchange" shall include any premiums and costs of exchange payable
in connection with the purchase of or conversion into United States dollars.
25
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.
[The remainder of this page intentionally left blank.]
26
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 and
Chief Financial Officer
27
Annex II
Pricing Agreement
[Name(s) of Underwriters]
________ __, 2003
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 ______ __, 2003 (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.
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
II-1
Annex II
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.
[Remainder of page intentionally left blank.]
II-2
Annex II
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 Underwriters]
By:
(Underwriter(s))
II-3
Annex II
SCHEDULE I
Maximum Number
of Optional
Number of Shares Which
Firm Shares May be
Underwriter to be Purchased Purchased
----------- --------------- ---------
[Name(s) of Underwriters] ....................................................
--------------- ---------------
Total ......................................................
=============== ===============
II-4
Annex II
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
Purchase Price by Underwriters:
$...... per Share
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),............. , 2003
Closing Location:
Accountants' Letter to be Delivered on Date of Pricing Agreement:
II-5
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 that caused them to
believe that this information does not conform in all material respects
with
II-6
Annex II
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;
(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
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Annex II
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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