EXHIBIT 1.2
EXECUTION COPY
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PXRE GROUP LTD.
(a Bermuda company)
5,251,686 Common Shares
UNDERWRITING AGREEMENT
Dated: November 17, 2004
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Table of Contents
Page
SECTION 1. Representations and Warranties..................................2
(a) Representations and Warranties by the Company....................2
(i) Compliance with Registration Requirements..................2
(ii) Incorporated Documents....................................3
(iii) Independent Accountants..................................3
(iv) Financial Statements......................................3
(v) No Material Adverse Change in Business.....................3
(vi) Good Standing of the Company..............................4
(vii) Good Standing of Subsidiaries............................4
(viii) Capitalization..........................................4
(ix) Authorization of Agreement................................5
(x) Authorization and Description of Securities................5
(xi) Absence of Defaults and Conflicts.........................5
(xii) Absence of Labor Dispute.................................5
(xiii) Absence of Proceedings..................................5
(xiv) Accuracy of Exhibits.....................................6
(xv) Possession of Intellectual Property.......................6
(xvi) Absence of Manipulation..................................6
(xvii) Absence of Further Requirements.........................6
(xviii) Possession of Licenses and Permits.....................6
(xix) Title to Property........................................7
(xx) Investment Company Act....................................7
(xxi) Internal Controls........................................7
(xxii) Retrocessional and Reinsurance Arrangements.............8
(xxiii) ERISA..................................................8
(xxiv) NSROs...................................................8
(xxv) Regulatory Reporting.....................................8
(xxvi) Dividends...............................................9
(xxvii) Registration Rights....................................9
(xxviii) Absence of Stamp or Transfer Taxes....................9
(xxix) U.S. Tax Matters........................................9
(xxx) Tax Matters in Jurisdictions other than the U.S..........9
(xxxi) Tax Returns Filed and Taxes Paid.......................10
(xxxii) Bermuda Status........................................10
(b) Representations and Warranties by the Selling Shareholders......11
(i) Accurate Disclosure.......................................11
(ii) Authorization of this Agreement..........................11
(iii) Authorization of Custody Agreement......................11
(iv) Noncontravention.........................................11
(v) Certificates Suitable for Transfer........................11
(vi) Valid Title..............................................12
(vii) Delivery of Securities..................................12
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(viii) Absence of Manipulation................................12
(ix) Absence of Further Requirements..........................12
(x) Restriction on Sale of Securities.........................12
(xi) No Association with NASD.................................13
(c) Officer's Certificates..........................................13
SECTION 2. Sale and Delivery to Underwriters; Closing.....................13
(a) Initial Securities..............................................13
(b) Option Securities...............................................13
(c) Payment.........................................................14
(d) Denominations; Registration.....................................14
SECTION 3. Covenants of the Company.......................................14
SECTION 4. Payment of Expenses............................................17
(a) Expenses........................................................17
(b) Expenses of each Selling Shareholder............................17
(c) Termination of Agreement........................................17
(d) Allocation of Expenses..........................................17
SECTION 5. Conditions of Underwriters' Obligations........................18
(a) Effectiveness of Registration Statement.........................18
(b) Opinions of Counsel for Company.................................18
(c) Opinion of Counsels for the Selling Shareholders................18
(d) Opinion of Counsel for Underwriters.............................19
(e) Officers' Certificate...........................................19
(f) Certificate of Selling Shareholders.............................19
(g) Accountants' Comfort Letters....................................19
(h) Bring-down Comfort Letters......................................19
(i) Approval of Listing.............................................19
(j) Lock-up Agreements..............................................20
(k) Maintenance of Rating...........................................20
(l) Conditions to Purchase of Option Securities.....................20
(m) Additional Documents............................................21
(n) Termination of Agreement........................................21
SECTION 6. Indemnification................................................21
(a) Indemnification of Underwriters by the Company..................21
(b) Indemnification of the Underwriters by the Selling
Shareholders....................................................22
(c) Indemnification of Company, Directors and Officers and
Selling Shareholders............................................22
(d) Actions against Parties; Notification...........................23
(e) Settlement without Consent if Failure to Reimburse..............23
(f) Other Agreements with Respect to Indemnification................23
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SECTION 7. Contribution...................................................23
SECTION 8. Representations, Warranties and Agreements to Survive..........25
SECTION 9. Termination of Agreement.......................................25
(a) Termination; General............................................25
(b) Liabilities.....................................................25
SECTION 10. Default by One or More of the Underwriters....................25
SECTION 11. Default by a Selling Shareholder or the Company...............26
SECTION 12. Tax Disclosure................................................27
SECTION 13. Notices.......................................................27
SECTION 14. Parties.......................................................27
SECTION 15. Submission to Jurisdiction; Process Agent.....................27
SECTION 16. Judgment Currency.............................................28
SECTION 17. GOVERNING LAW.................................................28
SECTION 18. TIME..........................................................28
SECTION 19. Counterparts..................................................28
SECTION 20. Effect of Headings............................................28
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SCHEDULE A - Underwriters
SCHEDULE B - Securities
SCHEDULE C - Pricing Information
SCHEDULE D - List of Subsidiaries
SCHEDULE E - List of Persons and Entities Subject to Lock-Up
EXHIBIT A-1- Form of Opinion of Xxxxx Xxxxxx, Esq., General Counsel of
PXRE Corporation and PXRE Reinsurance Company
EXHIBIT A-2- Form of Opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP,
Special U.S. Counsel to the Company
EXHIBIT A-3- Form of Opinion of Xxxxxxx Xxxx & Xxxxxxx,
Special Bermuda Counsel to the Company
EXHIBIT A-4- Form of Opinion of Chancery Xxxxxxxx,
Special Barbados Counsel to the Company
EXHIBIT B-1- Form of Opinion of Xxxxx X. Xxxxxx, Esq. and Xxxx Xxxxxxx &
Xxxxxx LLP, Counsels To Capital Z Financial Services Fund II,
L.P. and Capital Z Financial Services Private Fund II, L.P.
EXHIBIT B-2- Form of Opinion of Xxxxx Xxxxxxx, Esq. and Walkers,
Counsels To Reservoir Capital Master Fund, L.P. and Reservoir
Capital Partners, L.P.
EXHIBIT B-3- Form of Opinion of Xxxxxxxx & Xxxxxx LLP, Counsel to RER
Reinsurance Holdings, L.P.
EXHIBIT B-4- Form of Opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP,
Counsel to Xxxxxx Xxxxxx
EXHIBIT C- Form of Lock-Up From Directors, Executive Officers and
Certain Shareholders
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PXRE GROUP LTD
(a Bermuda company)
5,251,686 Common Shares
(Par Value $1.00 Per Share)
UNDERWRITING AGREEMENT
November 17, 2004
Credit Suisse First Boston LLC
as Representative of the several Underwriters
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
PXRE Group Ltd., a Bermuda company (the "Company"), and the selling
shareholders named in Schedule B hereto (each a "Selling Shareholder",
together the "Selling Shareholders"), confirm their respective agreements with
Credit Suisse First Boston LLC ("CSFB") and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom CSFB is acting as representative (in such capacity, the
"Representative"), with respect to (i) the sale by the Company and the Selling
Shareholders, acting severally and not jointly, and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
Common Shares, par value $1.00 per share, of the Company ("Common Shares") set
forth in Schedules A and B hereto and (ii)(A) the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 657,318 additional Common
Shares to cover overallotments, if any, and (B) the grant by the Selling
Shareholders to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 130,435
additional Common Shares to cover overallotments, if any. The aforesaid
5,251,686 Common Shares to be purchased by the Underwriters (the "Initial
Securities") and all or any part of the Common Shares subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities".
The Company and the Selling Shareholders understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representative deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-118057) for the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance
with Rule 415 of the rules and regulations of the Commission under the 1933
Act (the "1933 Act Regulations"). Such registration statement has been
declared effective by the Commission and the Company has filed such
post-effective amendments thereto as may be required prior to the execution
and delivery of this Agreement and each such post-effective amendment has been
declared effective by the Commission. Such registration statement (as so
amended, if applicable), including the information, if any, deemed to be a
part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule
430A Information"), is referred to herein as the "Registration Statement"; and
the final prospectus and the final prospectus supplement relating to the
offering of the Securities, in the forms first furnished to the Underwriters
by the Company for use in connection with the offering of the Securities, are
collectively
referred to herein as the "Prospectus"; provided, however, that all references
to the "Registration Statement" and the "Prospectus" shall also be deemed to
include all documents incorporated therein by reference pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the
execution and delivery of this Agreement; provided, further, that if the
Company files a registration statement with the Commission pursuant to Rule
462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration Statement"),
then all references to "Registration Statement" shall also be deemed to
include the Rule 462 (b) Registration Statement. A "preliminary prospectus"
shall be deemed to refer to any prospectus that omitted, as applicable, the
Rule 430A Information or other information to be included upon pricing in a
form of prospectus filed with the Commission pursuant to Rule 424(b) of the
1933 Act Regulations prior to the initial delivery of the Prospectus to the
Underwriters by the Company. For purposes of this Agreement, all references to
the Registration Statement, Prospectus, Term Sheet or preliminary prospectus
or to any amendment or supplement to any of the foregoing shall be deemed to
include any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" (or other
references of like import) in the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be, prior to the execution and delivery of this
Agreement; and all references in this Agreement to amendments or supplements
to the Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to mean and include the filing of any document under the 1934
Act which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be, after the
execution and delivery of this Agreement.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment thereto has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or, to the knowledge
of the Company, are contemplated by the Commission, and any request on
the part of the Commission for additional information has been complied
with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and did not 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. Neither the Prospectus nor any
amendments or supplements thereto at the time the Prospectus or any such
amendment or supplement was issued and at the Closing Time (and, if
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any Option Securities are purchased, at the Date of Delivery), included
or will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties in this subsection
shall not apply to (A) statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through the Representative expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) or (B) that part of the Registration
Statement that constitutes the Statements of Eligibility and
Qualification on Forms T-1 under the Trust Indenture Act of the Trustees,
the Property Trustee and the Guarantee Trustee.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not 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.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The consolidated financial statements
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, present fairly, in all material
respects, the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have
been prepared in conformity with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data
included in the Prospectus present fairly, in all material respects, the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries
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considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular dividends on the Common Shares and
the Company's preferred shares, par value $1.00 per share, in amounts per
share that are consistent with past practice or the applicable charter
document or supplement thereto, respectively, there has been no dividend
or distribution of any kind declared, paid or made by the Company on any
class of its share capital.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a company in good standing under the
laws of Bermuda and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not reasonably be
expected to result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary"
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Significant Subsidiary" and, collectively, the "Significant
Subsidiaries") is identified on Schedule D hereto, has been duly
organized and is validly existing and, where applicable, in good standing
under the laws of the jurisdiction of its formation, has power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign entity to transact business and, where applicable, is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to be so qualified or to be in good
standing would not reasonably be expected to result in a Material Adverse
Effect; except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding share capital or capital stock, as
applicable, of each such Significant Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of share capital or capital stock, as applicable,
of any Significant Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Significant Subsidiary.
The only subsidiaries of the Company are (a) the subsidiaries listed on
Schedule D hereto and (b) certain other subsidiaries which, considered in
the aggregate as a single subsidiary, do not constitute a "significant
subsidiary" as such term is defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding share
capital of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding share capital, including the Securities to be purchased by
the Underwriters from the Selling Shareholders, have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of share capital, including the Securities to be
purchased by the Underwriters from the Selling Shareholders, was issued
in violation of the preemptive or other similar rights of any
securityholder of the Company.
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(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities to
be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth herein, will be
validly issued and fully paid and non-assessable; the Common Shares
conform to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the issuance of
the Securities is not subject to the preemptive or other similar rights
of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
of its Significant Subsidiaries is in violation of its memorandum of
association, bye-laws or other constitutional documents; neither the
Company nor any of its subsidiaries is in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not reasonably be
expected to result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use of Proceeds") and compliance by the Company with
its obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute
a breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary pursuant to,
the Agreements and Instruments (except for such conflicts, breaches,
defaults or Repayment Events or liens, charges or encumbrances that would
not reasonably be expected to result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the
memorandum of association, bye-laws or other constitutional documents of
the Company or any Significant Subsidiary or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court having jurisdiction over the Company
or any subsidiary or any of their assets, properties or operations. As
used herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary prior to the stated
contractual maturity of such indebtedness.
(xii) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any Significant Subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any existing
or imminent labor disturbance by the employees of any of its or any
Significant Subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, would reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any subsidiary or
5
the properties or assets thereof, which is required to be disclosed in
the Registration Statement (other than as disclosed therein), or which
would reasonably be expected to result in a Material Adverse Effect
(other than as disclosed in the Registration Statement and the
Prospectus), or which would reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated in
this Agreement or the performance by the Company of its obligations
hereunder; the aggregate of all pending legal or governmental proceedings
to which the Company or any subsidiary is a party or of which any of
their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business of any of them, would not
reasonably be expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or other
documents which are required to be described or referred to in the
Registration Statement, the Prospectus or the documents incorporated by
reference therein or to be filed as exhibits thereto which have not been
so described or so filed as required in order for the Registration
Statement, the Prospectus and the documents incorporated by reference
therein to comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and/or the 1934
Act and the 1934 Act Regulations.
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the
business now operated by them, except where the failure to so own or so
possess or to be so able to acquire such Intellectual Property would not
reasonably be expected to have a Material Adverse Effect, and neither the
Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the subject
of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect.
(xvi) Absence of Manipulation. Neither the Company nor any affiliate
of the Company has taken, nor will the Company or any affiliate take,
directly or indirectly, any action which is designed to or which has
constituted or which would 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 Securities.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except (i) such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and (ii) such consents, approvals,
authorizations or qualifications as may be required and have been
obtained from the Bermuda Monetary Authority.
(xviii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such orders, certificates, registrations,
qualifications, permits, licenses, approvals, consents and
6
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them (including,
without limitation, under the insurance laws (including laws that relate
to companies that control insurance companies) and the rules, regulations
and interpretations of the insurance regulatory authorities thereunder
(collectively, "Insurance Laws"), of each jurisdiction in which the
conduct of their business as described in the Prospectus requires such
licensing), except where the failure so to possess would not, singly or
in the aggregate, reasonably be expected to result in a Material Adverse
Effect; the Company and its subsidiaries are in compliance with the terms
and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect; all of such Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not, singly or
in the aggregate, reasonably be expected to result in a Material Adverse
Effect; neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would reasonably
be expected to result in a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notification from
any regulatory agency or body (including, without limitation, any
insurance regulatory authority) or other governmental authority to the
effect that any additional Governmental License is needed to be obtained
by either the Company or any of its subsidiaries, except for such
additional Governmental Licenses the failure to obtain which would not
reasonably be expected to have a Material Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries that is material to the business of the Company and its
subsidiaries considered as one enterprise and good title to all other
properties owned by them that are material to the business of the Company
and its subsidiaries considered as one enterprise, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except (a) for certain insurance
trusts and properties subject to letters of credit, in each case entered
into in the ordinary course of business of the Company and its
subsidiaries, (b) such as are described in the Prospectus or (c) such as
do not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its subsidiaries; and all of
the leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the Prospectus,
are in full force and effect, and neither the Company nor any subsidiary
has any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or any subsidiary under
any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xx) Investment Company Act. The Company is not required, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be required, to register as an "investment company" under the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Internal Controls. The Company and its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
7
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxii) Retrocessional and Reinsurance Arrangements. Except as
disclosed in the Prospectus and the Registration Statement, all
retrocessional and reinsurance treaties, contracts and arrangements
material to the business or operations of the Company or its subsidiaries
to which any of the Company or its subsidiaries are a party as the
reinsured or insured are in full force and effect; and none of the
Company nor any of its subsidiaries has received any notice or otherwise
has knowledge that any of the other parties to such retrocessional and
reinsurance treaties, contracts, agreements or arrangements intends not
to perform, or will be unable to perform, in any material respect such
retrocessional or reinsurance treaty, contract, agreement or arrangement,
except where such non-performance would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(xxiii) ERISA. Each of the Company and its subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards of
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act
of 1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company and its subsidiaries are eligible to participate
and each such plan is in compliance in all material respects with the
presently applicable provisions of ERISA and the Internal Revenue Code of
1986, as amended (the "Code"), and such regulations and published
interpretations thereunder. The Company and its subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or to any
such plan under Title IV of ERISA. Except as disclosed in the
Registration Statement and the Prospectus, with respect to each plan as
to which any of the Company and/or any of its subsidiaries may have any
liability that is subject to Title IV of ERISA (but is not a
multiemployer plan within the meaning of Section 4001(a)(3) of ERISA),
the assets of each such plan are at least equal in value to the present
value of the accrued benefits (vested and unvested) of the participants
in such plan on a termination and projected benefit obligation basis,
based on the actuarial methods and assumptions indicated in the most
recent applicable actuarial valuation reports.
(xxiv) NSROs. The Company has no knowledge of any threatened or
pending downgrading of any of its or its subsidiaries' securities or
financial strength or claims-paying ability rating by any "nationally
recognized statistical rating organizations," as such term is defined for
purposes of Rule 463(g)(2) under the Securities Act.
(xxv) Regulatory Reporting. Each of the Company and its subsidiaries
has filed all statutory financial returns, reports, documents and other
information required to be filed pursuant to the applicable laws
(including Insurance Laws) of the United States and the various states
thereof, Bermuda and each other jurisdiction applicable thereto, except
where the failure, singly or in the aggregate, to file such return,
report, document or information would not reasonably be expected to
result in a Material Adverse Effect; and each of the Company and its
subsidiaries maintains its books and records in accordance with, and is
otherwise in compliance with, the applicable laws (including Insurance
Laws) of the United States and the various states thereof, Bermuda and
each other jurisdiction applicable thereto, except where the failure to
so maintain its
8
books and records or be in compliance would not singly or in the
aggregate reasonably be expected to result in a Material Adverse Effect.
(xxvi) Dividends. All dividends and other distributions declared and
payable on the shares of share capital of the Company may under the
current laws and regulations of Bermuda be paid in any currency other
than Bermuda dollars that may be freely transferred out of Bermuda, and
all such dividends and other distributions 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, registration or qualification of or with any governmental
agency or body or any court in Bermuda; other than as disclosed in the
Registration Statement and the Prospectus, no regulatory agency or body
(including, without limitation, any insurance regulatory authority) or
other governmental authority has issued any order or decree impairing,
restricting or prohibiting the payment of dividends by the Company or any
of its subsidiaries.
(xxvii) Registration Rights. Except as disclosed in the Prospectus
and the Registration Statement, there are no persons with registration
rights or other similar rights to have any securities of the Company
registered pursuant to the Registration Statement or otherwise registered
by the Company under the 1933 Act.
(xxviii) Absence of Stamp or Transfer Taxes. 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; and no
registration, documentary, recording, transfer or other similar tax, fee
or charge by any Bermuda governmental authority is payable in connection
with the execution, delivery, filing, registration or performance of this
Agreement.
(xxix) U.S. Tax Matters. Based upon and subject to the assumptions
and qualifications set forth in the Prospectus under the heading "Certain
Tax Matters" and "Risk Factors", the Company has no reason to believe
that either the Company or any of its subsidiaries is, and upon the sale
of the Securities herein contemplated will be, (A) a "passive foreign
investment company" as defined in Section 1297(a) of the Code, (B) a
"foreign personal holding company" as defined in Section 552 of the Code,
(C) a "controlled foreign corporation" as defined in Section 957 of the
Code, (D) except for PXRE Corporation, PXRE Reinsurance Company, PXRE
Solutions, Inc., PXRE Capital Trust I, PXRE Capital Trust II, PXRE
Capital Trust III or PXRE Capital Trust IV (the "U.S. Subsidiaries")
considered to be engaged in a trade or business within the United States
for purposes of section 864(b) of the Code or (E) characterized as a
"personal holding company" as defined in Section 542 of the Code; neither
the Company nor any of its subsidiaries has taken, and neither has a plan
or intention to take, directly or indirectly, any action that would or
would be reasonably expected to cause or result in any shareholder of the
Company having "related party insurance income" inclusions for U.S.
federal income tax purposes as a result of being a shareholder of the
Company.
(xxx) Tax Matters in Jurisdictions other than the U.S.Based upon and
subject to the assumptions and qualifications set forth in the Prospectus
under the heading "Certain Tax Matters" and "Risk Factors", the Company
has no reason to believe that either the Company or any of its
subsidiaries is, and upon the sale of the Securities herein contemplated
will be, (A) except for PXRE Ltd. (the "U.K. Subsidiary"), characterized
as resident, managed and
9
controlled or carrying on a trade through a branch or agency in the
United Kingdom under the tax law of any jurisdiction in the United
Kingdom, (B) except for PXRE Reinsurance (Barbados) Ltd. (the "Barbados
Subsidiary"), characterized as resident, managed and controlled or
carrying on a trade through a branch or agency in Barbados under the tax
law of Barbados, or (C) except for PXRE Solutions S.A. and PXRE
Reinsurance Company (the "Subsidiaries with Belgian Operations"),
characterized as resident, managed and controlled or carrying on a trade
through a branch or agency in Belgium under the tax law of Belgium.
(xxxi) Tax Returns Filed and Taxes Paid. All tax returns required to
be filed by the Company or any of its subsidiaries in any jurisdiction
have been accurately prepared and timely filed (taking into account
permitted extensions, if any) and any taxes, including without limitation
any withholding taxes, excise taxes, sales taxes, use taxes, penalties
and interest, assessments and fees and other charges due or claimed to be
due from such entities have been paid, other than any of those being
contested in good faith and for which adequate reserves have been
provided in accordance with GAAP or any of those currently payable
without penalty or interest, in either case except to the extent that the
failure to so file or pay would not reasonably be expected to result in a
Material Adverse Effect and in either case other than those tax returns
that would be required to be filed or taxes that would be payable by the
Company or any of its subsidiaries if (A) any of them was characterized
as a "personal holding company" as defined in Section 542 of the Code,
(B) any of them other than the U.S. Subsidiaries was characterized as
engaged in a U.S. trade or business, (C) any of them other than the U.K.
Subsidiary was characterized as resident, managed and controlled or
carrying on a trade through a branch or agency in the United Kingdom, (D)
any of them other than the Barbados Subsidiary was characterized as
resident, managed and controlled or carrying on a trade through a branch
or agency in Barbados, or (E) any of them other than the Subsidiaries
with Belgian Operations was characterized as resident, managed and
controlled or carrying on a trade through a branch or agency in Belgium;
no deficiency assessment with respect to a proposed material adjustment
of the Company's or any of its subsidiaries' taxes is pending or, to the
best of the Company's knowledge, threatened; and there is no tax lien,
whether imposed by any federal, state, or other taxing authority,
outstanding against the assets, properties or business of the Company or
any of its subsidiaries.
(xxxii) Bermuda Status. Each of the Company and PXRE Reinsurance
Ltd. has received from the Bermuda Minister of Finance an assurance under
the Exempted Undertakings Tax Protection Xxx 0000, as amended, of Bermuda
to the effect set forth in the Prospectus under the caption "Certain Tax
Matters--Taxation of PXRE and Subsidiaries--Bermuda," and neither the
Company nor PXRE Reinsurance Ltd. has received any notification to the
effect (and is not otherwise aware) that such assurance may be revoked or
otherwise not honored by the Bermuda government; the Bermuda Monetary
Authority has designated the Company as non-resident for exchange control
purposes and has granted permission for the issue and transfer of the
Common Shares, subject to the condition that the Common Shares of the
Company shall be listed on the New York Stock Exchange or any other
appointed stock exchange; such permission has not been revoked and is in
full force and effect, and the Company has no knowledge of any
proceedings planned or threatened for the revocation of such permission;
the Company is an "exempted company" under Bermuda law and has not
conducted its business in a manner that is prohibited for "exempted
companies" under Bermuda law; the Company has not received notification
from the Bermuda Monetary Authority or any other Bermuda governmental
authority of proceedings relating to the modification or revocation of
its designation as non-resident for exchange control purposes, its
permission to issue and transfer the Common Shares, or its status as an
"exempted company."
10
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder represents and warrants to each Underwriter, with respect
solely to such Selling Shareholder, as of the date hereof and as of the
Closing Time, and agrees with each Underwriter, as follows:
(i) Accurate Disclosure. Such Selling Shareholder has reviewed and
is familiar with the Registration Statement and the Prospectus and
neither the Registration Statement nor the Prospectus nor any amendments
or supplements thereto includes any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties set forth in this Section 1(b)(i) are limited to
statements or omissions made in reliance on information furnished by or
on behalf of such Selling Shareholder expressly for use in the
Registration Statement (or any amendment thereto), any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto),
which furnished information is referred to herein as the "Selling
Shareholders Information" and consists exclusively of: (A) with respect
to Xxxxxx Xxxxxx, the biographical information with respect to Xxxxxx
Xxxxxx contained or incorporated by reference therein and (B) with
respect to the information about such Selling Shareholders, the
information under the caption "Selling Shareholders and Related
Information" in the Prospectus. Such Selling Shareholder is not prompted
to sell the Securities to be sold by such Selling Shareholder hereunder
by any information concerning the Company or any subsidiary of the
Company which is not set forth in the Prospectus.
(ii) Authorization of this Agreement. This Agreement has been duly
authorized, executed and delivered by such Selling Shareholder.
(iii) Authorization of Custody Agreement. The Custody Agreement, in
the form heretofore furnished to the Representative (the "Custody
Agreement"), has been duly authorized, executed and delivered by such
Selling Shareholder and is the valid and binding agreement of such
Selling Shareholder.
(iv) Noncontravention. The execution and delivery of this Agreement
and the Custody Agreement and the sale and delivery of the Securities to
be sold by such Selling Shareholder and the consummation of the
transactions contemplated herein and compliance by such Selling
Shareholder with its obligations hereunder do not and will not, whether
with or without the giving of notice or passage of time or both, conflict
with or constitute a breach of or default under, or result in the
creation or imposition of any tax, lien, charge or encumbrance upon the
Securities to be sold by such Selling Shareholder or any property or
assets of such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease
or other agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder may be bound, or to which any
of the property or assets of such Selling Shareholder is subject, nor
will such action result in any violation of the provisions of the charter
or by-laws or other organizational instrument of such Selling Shareholder
or any applicable treaty, law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over such Selling
Shareholder or any of its properties.
(v) Certificates Suitable for Transfer. The Securities to be sold by
such Selling Shareholder pursuant to this Agreement will, at the Closing
Time, be certificated securities in registered form and will not be held
in any securities account or by or through any securities intermediary
within the meaning of the Uniform Commercial Code as in effect in the
State of New York (the "UCC"). Certificates for all of the Securities to
be sold by such Selling
11
Shareholder pursuant to this Agreement, in suitable form for transfer by
delivery or accompanied by duly executed and effective instruments of
transfer or assignment indorsed to the Underwriters or in blank with
signatures guaranteed, will, prior to the Closing Time, have been placed
in custody with American Stock Transfer & Trust Company (the "Custodian")
with irrevocable conditional instructions to deliver such Securities to
the Underwriters pursuant to this Agreement.
(vi) Valid Title. Such Selling Shareholder has, and at the Closing
Time will have, valid title to the Securities to be sold by it free and
clear of all security interests, claims, liens, equities or other
encumbrances and the requisite corporate power and authority, and all
authorization and approval required by law, to enter into this Agreement
and the Custody Agreement and to sell, transfer and deliver the
Securities to be sold by such Selling Shareholder.
(vii) Delivery of Securities. Upon the Underwriters' acquiring
possession of stock certificates representing the Securities to be sold
by such Selling Shareholder, effectively indorsed to the Underwriters or
in blank, and paying the purchase price therefor pursuant to this
Agreement, the Underwriters (assuming that no such Underwriter has notice
of any adverse claim, within the meaning of Section 8-105 of the UCC, to
such Securities) will acquire their respective interests in such
Securities (including, without limitation, all rights that such Selling
Shareholder had or has the power to transfer in such Securities) free and
clear of any adverse claim within the meaning of Section 8-102 of the
UCC.
(viii) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which would 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 Securities.
(ix) Absence of Further Requirements. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by such Selling Shareholder of
its obligations hereunder, or in connection with the sale and delivery of
the Securities to be sold by such Selling Shareholder hereunder or the
consummation of the transactions contemplated by this Agreement, except
(A) such as may have previously been made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state
securities laws or under insurance laws and (B) such consents,
approvals, authorizations, registrations or qualifications as may be
required and have been obtained from the Bermuda Monetary Authority.
(x) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectus, such Selling Shareholder will not,
without the prior written consent of CSFB, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase or lend or otherwise transfer or dispose of, directly or
indirectly, any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares or file, or cause to be
filed, any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Shares,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Shares or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to (x) the Securities to be sold hereunder and (y) any Common Shares held
or to be held in a separate account of such Selling Shareholder over
which account such Selling Shareholder does not exercise investment
power.
12
(xi) No Association with NASD. Except as previously disclosed in
writing to Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel for the Company, and
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, neither
such Selling Shareholder nor any of its affiliates directly, or
indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, or is a person associated with
(within the meaning of Article I (dd) of the By-laws of the National
Association of Securities Dealers, Inc. (the "NASD")), any member firm of
the NASD.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representative or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of such Selling Shareholder as such and
delivered to the Representative or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Shareholder to the Underwriters as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and each Selling Shareholder, severally and not jointly,
agree to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company
and each Selling Shareholder, at the price per share set forth in Schedule C,
that proportion of the number of Initial Securities set forth in Schedule B
opposite the name of the Company or such Selling Shareholder, as the case may
be, which the number of Initial Securities set forth in Schedule A opposite
the name of such Underwriter, plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof, bears to the total number of Initial
Securities, subject, in each case, to such adjustments among the Underwriters
as the Representative in their sole discretion shall make to eliminate any
sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, (i) the Company hereby grants an option to the Underwriters,
severally and not jointly, to purchase up to an additional 657,318 Common
Shares and (ii) the Selling Shareholders hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
130,435 Common Shares, both as set forth in Schedule B and at the price per
share set forth in Schedule C, less an amount per share equal to any dividends
or distributions declared by the Company and payable on the Initial Securities
but not payable on the Option Securities. The option hereby granted will
expire 30 days after the date hereof and may be exercised in whole or in part
from time to time only for the purpose of covering overallotments which may be
made in connection with the offering and distribution of the Initial
Securities upon notice by CSFB to the Company setting forth the number of
Option Securities as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by CSFB, but shall not be later than seven full business days after
the exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of
the Option Securities, each of the Underwriters, acting severally and not
jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Securities set
forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as CSFB
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
13
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, or
at such other place as shall be agreed upon by the Representative and the
Company and the Selling Shareholders, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given
day) business day after the date hereof (unless postponed in accordance with
the provisions of Section 10), or such other time not later than ten business
days after such date as shall be agreed upon by the Representative and the
Company and the Selling Shareholders (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representative and the Company, on each Date of Delivery as specified in the
notice from CSFB to the Company.
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to bank accounts designated by the
Company and the Selling Shareholders, as the case may be, against delivery to
the Representative for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. CSFB, individually and not as representative of the Underwriters,
may (but shall not be obligated to) make payment of the purchase price for the
Initial Securities or the Option Securities, if any, to be purchased by any
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representative may request in writing at least
one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Representative in The City of New York not later than 10:00
A.M. (Eastern time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements
of Rule 430A, if and as applicable, and will notify the Representative(s)
immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the
Prospectus or any document incorporated by reference therein or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will
take such steps as it deems
14
necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest practicable moment.
(b) Filing of Amendments. The Company will give the Representative
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Representative with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file or use any such document to which the
Representative or counsel for the Underwriters shall reasonably object in
writing.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Representative and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith
or incorporated by reference therein and documents incorporated or deemed
to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representative, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act
and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in
the Prospectus. If at any time when a prospectus is required by the 1933
Act to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements,
and the Company
15
will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representative may
designate and to maintain such qualifications in effect for as long as
may be required to complete the distribution of the Securities
contemplated hereby; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction
in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectus, the Company will not, without the prior
written consent of CSFB, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase or lend or otherwise transfer or dispose of any Common Shares or
any securities convertible into or exercisable or exchangeable for Common
Shares or file any registration statement under the 1933 Act with respect
to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Shares or such
other securities, in cash or otherwise. The foregoing sentence shall not
apply to (A) the Securities to be sold hereunder, (B) any Common Shares
issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to
in the Prospectus (or the filing of a registration statement covering
such issuances), (C) any Common Shares issued or options to purchase
Common Shares granted pursuant to existing employee benefit plans of the
Company referred to in the Prospectus or incorporated by reference in the
Registration Statement as of the date hereof (or the filing of a
registration statement covering such issuances or grants), (D) any Common
Shares issued pursuant to any non-employee director stock plan or
dividend reinvestment plan (or the filing of a registration statement
covering such issuances).
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
16
SECTION 4. Payment of Expenses.
(a) Expenses. The Company and each Selling Shareholder will pay or cause
to be paid all expenses incident to the performance of their obligations under
this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with
the offering, purchase, sale, issuance or delivery of the Securities, (iii)
the preparation, issuance and delivery of the certificates for the Securities
to the Underwriters, including any stock or other transfer taxes and any stamp
or other duties payable upon the sale, issuance or delivery of the Securities
to the Underwriters, and their transfer between the Underwriters pursuant to
an agreement between such Underwriters, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors, (v) the qualification of
the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) the costs
and expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the Securities, including
without limitation, out-of-pocket expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants engaged by
or with the consent of the Company in connection with the road show
presentations, travel and lodging expenses of the representatives and officers
of the Company and any such consultants, and the cost of aircraft and other
transportation chartered in connection with the road show, (x) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the NASD of the terms of the
sale of the Securities and (xi) the fees and expenses incurred in connection
with the listing of the Securities on the New York Stock Exchange. It is
understood, however, that, except as set forth in this Section 4 and Sections
6, 7 and 9(b) hereof, the Underwriters shall pay all of their own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, the fees and disbursements of their
counsel (except those reasonable fees and disbursements relating to
qualification of the Securities under applicable state securities laws and the
preparation of any Blue Sky Survey and any supplement thereto) and their
travel expenses.
(b) Expenses of each Selling Shareholder. Each Selling Shareholder will
pay all expenses incident to the performance of its respective obligations
under, and the consummation of the transactions contemplated by this
Agreement, including (i) any stamp duties, capital duties and stock transfer
taxes, if any, payable upon the sale of the Securities to the Underwriters,
and their transfer between the Underwriters pursuant to an agreement between
such Underwriters, and (ii) the fees and disbursements of its respective
counsel and other advisors.
(c) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company and the Selling Shareholders shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement between the Company and the Selling Shareholders with
respect to the sharing of such costs and expenses.
17
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and each Selling Shareholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company or on behalf of each Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder that are required to be
performed at or prior to Closing Time, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or, to the knowledge of the Company, threatened by the Commission,
and any request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing information relating to the description
of the Securities, the specific method of distribution and similar matters
shall have been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A).
(b) Opinions of Counsel for Company.
(i) At Closing Time, the Representative shall have received the
opinion, dated as of Closing Time, of Xxxxx Xxxxxx, Esq., General Counsel
of PXRE Corporation and PXRE Reinsurance Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to
the effect set forth in Exhibit A-1 hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(ii) At Closing Time, the Representative shall have received the
opinion, dated as of Closing Time, of Sidley Xxxxxx Xxxxx & Xxxx LLP,
special U.S. counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect
set forth in Exhibit A-2 hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(iii) At Closing Time, the Representative shall have received the
opinion, dated as of Closing Time, of Xxxxxxx Xxxx & Xxxxxxx, special
Bermuda counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies
of such letter for each of the other Underwriters to the effect set forth
in Exhibit A-3 hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(iv) At Closing Time, the Representative shall have received the
opinion, dated as of Closing Time, of Chancery Xxxxxxxx, special Barbados
counsel for the Company, in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters to the effect set forth in
Exhibit A-4 hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(c) Opinion of Counsels for the Selling Shareholders. At Closing Time,
the Representative shall have received the opinion, dated as of Closing Time,
of (i) Xxxxx X. Xxxxxx, Esq. and Xxxx Xxxxxxx & Xxxxxx LLP, (ii) Xxxxx
Xxxxxxx, Esq. and Walkers, (iii) Xxxxxxxx & Xxxxxx LLP and (iv) Sidley Xxxxxx
Xxxxx & Xxxx LLP, counsels for (A) Capital Z
18
Financial Services Fund II, L.P. and Capital Z Financial Services Private
Fund II, L.P., (B) Reservoir Capital Master Fund, L.P. and Reservoir Capital
Partners, L.P., (C) RER Reinsurance Holdings, L.P. and (D) Xxxxxx Xxxxxx,
respectively, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters to the effect set forth in Exhibit X-0, X-0,
X-0 and B-4, respectively, hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the opinion and letter, each dated as of
Closing Time, of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters,
together with signed or reproduced copies of such opinion and letter for each
of the other Underwriters in form and substance satisfactory to the
Underwriters.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the
Representative shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting
officer of the Company, dated as of Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time (except for
representations and warranties which by their express terms speak as of a
different date or dates, which representations and warranties are true and
correct as of such different date or dates), (iii) the Company has complied in
all material respects with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are pending
or, to their knowledge, contemplated by the Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the
Representative shall have received a certificate of a duly authorized officer
of each Selling Shareholder, dated as of Closing Time, to the effect that (i)
the representations and warranties of each Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same force
and effect as though expressly made at and as of Closing Time and (ii) each
Selling Shareholder has complied in all material respects with all agreements
and all conditions on its part to be performed under this Agreement at or
prior to Closing Time.
(g) Accountants' Comfort Letters. At the time of the execution of this
Agreement, the Representative shall have received from each of KPMG LLP and
PricewaterhouseCoopers LLP a letter dated such date, in form and substance
satisfactory to the Representative, together with signed or reproduced copies
of such letter for each of the other Underwriters containing statements and
information of the type ordinarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(h) Bring-down Comfort Letters. At Closing Time, the Representative shall
have received from each of KPMG LLP and PricewaterhouseCoopers LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the statements made
in the letter furnished by such person pursuant to subsection (g) of this
Section, except that the specified date referred to shall be a date not more
than three business days prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall have been
approved for listing on the New York Stock Exchange, subject only to official
notice of issuance.
19
(j) Lock-up Agreements. At the date of this Agreement, the Representative
shall have received an agreement substantially in the form of Exhibit C hereto
signed by the persons listed on Schedule E hereto.
(k) Maintenance of Rating. Since the execution of this Agreement, there
shall not have been any decrease in the rating of any of the Company's or any
of its subsidiaries' securities or of the Company's or any of its
subsidiaries' financial strength or claims paying ability by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the 0000 Xxx) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that
does not indicate the direction of the possible change.
(l) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company and any subsidiary of the Company
pursuant hereto shall be true and correct as of each Date of Delivery and, at
the relevant Date of Delivery, the Representative shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the
Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e)
hereof remains true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for Company.
(A) The opinion of Xxxxx Xxxxxx, Esq., General Counsel of
PXRE Corporation and PXRE Reinsurance Company, in form and
substance satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(b)(i) hereof.
(B) The opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP, special
U.S. counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b)(ii) hereof.
(C) The opinion of Xxxxxxx Xxxx & Xxxxxxx, special Bermuda
counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b)(iii) hereof.
(D) The opinion of Chancery Xxxxxxxx, special Barbados
counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b)(iv) hereof.
20
(iii) Opinion of Counsel for Underwriters. The opinion and letter
of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, each dated such Date of Delivery, in form and
substance satisfactory to the Underwriters.
(iv) Bring-down Comfort Letters. A letter from each of KPMG LLP
and PricewaterhouseCoopers LLP, in form and substance
satisfactory to the Representative and dated such Date of
Delivery, substantially in the same form and substance as
the letter furnished to the Representative by such person
pursuant to Section 5(g) hereof, except that the "specified
date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Date
of Delivery.
(m) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company and the Selling Shareholders in connection
with the issuance and sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Representative and
counsel for the Underwriters.
(n) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representative by notice to the Company
and the Selling Shareholders at any time at or prior to Closing Time or such
Date of Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters by the Company. The Company agrees to
indemnify and hold harmless each Underwriter, its affiliates, as such term is
defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), its selling
agents and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including
the Rule 430A Information deemed to be a part thereof, if
applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material
fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
21
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(e)
below) any such settlement is effected with the written consent
of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel selected by CSFB pursuant
to Section 6(d) below), reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is
not paid under (i) or (ii) above;
provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representative
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) and (B) as to any preliminary prospectus, this
indemnity agreement shall not inure to the benefit of any Underwriter, its
Affiliates, its selling agents or any person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act on account of any loss, liability, claim, damage or expense
arising from the fact that such Underwriter sold Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus (as then amended or supplemented) in any
case where such delivery is required by the 1933 Act if the Company has
previously furnished, in a timely manner, copies thereof to such Underwriter
in the quantities requested and the loss, liability, claim, damage or expense
of such Underwriter, Affiliate, selling agent or person who so controls any
Underwriter results from an untrue statement or omission of a material fact
contained in such preliminary prospectus which the Company has sustained the
burden of proving was corrected in the Prospectus (as then amended or
supplemented).
(b) Indemnification of the Underwriters by the Selling Shareholders. Each
Selling Shareholder agrees, severally and not jointly, to indemnify and hold
harmless each Underwriter, its Affiliates and selling agents and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 34 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a) of this Section, as incurred, but only with respect to the Selling
Shareholders Information as it pertains specifically to such Selling
Shareholder.
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each
Selling Shareholder and each person, if any, who controls such Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information deemed to be a part
thereof, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or
22
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Underwriter
through the Representative expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party
of any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) or Section 6(b) above, counsel to the indemnified parties shall be
selected by CSFB, and, in the case of parties indemnified pursuant to Section
6(c) above, counsel to the indemnified parties shall be selected by the
Company and the Selling Shareholders. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto),
unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding 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.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated
by Section 6(a) (ii) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement; provided that an indemnifying
party shall not be so liable for any such settlement effected without its
consent if such indemnifying party, prior to the date of such settlement, (x)
reimburses such indemnified party in accordance with such request for the
amount of such fees and expenses of counsel as the indemnifying party believes
in good faith to be reasonable, and (y) provides written notice to the
indemnified party that the indemnifying party disputes in good faith the
reasonableness of the unpaid balance of such fees and expenses.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement between the Company and the
Selling Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such
23
indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholders on the one hand and of the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, bear to the
aggregate initial public offering price of the Securities as set forth on the
cover of the Prospectus.
The relative fault of the Company and the Selling Shareholders on the one
hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Shareholders or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon
any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any 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 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have
the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company or the Selling Shareholders
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company or the Selling
Shareholders, as the case may be. The Underwriters' respective obligations to
contribute pursuant to this
24
Section 7 are several in proportion to the number of Initial Securities
set forth opposite their respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement between the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or the Selling Shareholders submitted pursuant hereto, shall
remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its Affiliates or
selling agents, any person controlling any Underwriter, its officers or
directors or any person controlling the Company or any person controlling any
Selling Shareholder and (ii) delivery of and payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time
at or prior to the Closing Time if there has been, subsequent to the execution
and delivery of this Agreement or since the respective dates as of which
information is given in the Prospectus (i) any change, or any development or
event involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise which, in the judgment of a majority in
interest of the Underwriters including the Representative, is material and
adverse and makes it impractical or inadvisable to proceed with completion of
the public offering or the sale of and payment for the Securities; (ii) any
downgrading in the rating of any debt securities or preferred stock of the
Company by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has come under surveillance or review of its rating
of any debt securities or preferred stock of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any change in
U.S. or Bermuda or international financial, political or economic conditions
or currency exchange rates or exchange controls as would, in the judgment of a
majority in interest of the Underwriters including the Representative, be
likely to prejudice materially the success of the proposed issue, sale or
distribution of the Securities, whether in the primary market or in respect of
dealings in the secondary market; (iv) any material suspension or material
limitation of trading in securities generally on the New York Stock Exchange,
or any setting of minimum prices for trading on such exchange; (v) any
suspension of trading of any securities of the Company on any exchange or in
the over-the-counter market; (vi) any banking moratorium declared by U.S.
Federal, New York or Bermuda authorities; (vii) any major disruption of
settlements of securities or clearance services in the United States or
Bermuda or (viii) any attack on, outbreak or escalation of hostilities or act
of terrorism involving the United States or Bermuda, any declaration of war by
Congress or any other national or international calamity or emergency if, in
the judgment of a majority in interest of the Underwriters including the
Representative, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Securities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they
25
are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representative shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Representative shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option
Securities, as the case may be, either (i) the Representative or (ii) the
Company and the Selling Shareholders shall have the right to postpone Closing
Time or the relevant Date of Delivery, as the case may be, for a period not
exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Default by a Selling Shareholder or the Company.
(a) If a Selling Shareholder shall fail at Closing Time to sell and
deliver the number of Securities which such Selling Shareholder is obligated
to sell hereunder, then the Underwriters may, at option of the Representative,
by notice from the Representative to the Company, either (i) terminate this
Agreement without any liability on the fault of any non-defaulting party
except that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full
force and effect or (ii) elect to purchase the Securities which the Company
has agreed to sell hereunder. No action taken pursuant to this Section 11
shall relieve such Selling Shareholder from liability, if any, in respect of
such default.
In the event of a default by such Selling Shareholder as referred to in
this Section 11, each of the Representative and the Company shall have the
right to postpone Closing Time for a period not exceeding seven days in order
to effect any required change in the Registration Statement or Prospectus or
in any other documents or arrangements.
(b) If the Company shall fail at Closing Time or at the Date of Delivery
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
nondefaulting party; provided, however, that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect. No action taken pursuant to
this Section shall relieve the Company from liability, if any, in respect of
such default.
26
SECTION 12. Tax Disclosure. Notwithstanding any other provision of this
Agreement, from the commencement of discussions with respect to the
transactions contemplated hereby, the Company (and each employee,
representative or other agent of the Company) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure
(as such terms are used in Sections 6011, 6111 and 6112 of the U.S. Code and
the Treasury Regulations promulgated thereunder) of the transactions
contemplated by this Agreement and all materials of any kind (including
opinions or other tax analyses) that are provided relating to such tax
treatment and tax structure.
SECTION 13. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, attention of Syndicate Department; notices to the
Company shall be directed to it at PXRE Group Ltd., XXXX Xxxxx, 000 Xxxxx Xxx
Xxxx, Xxxxxxxx XX 00, Bermuda, attention of Xxxxxxx X. Xxxxx (fax: (441)
000-0000); and notices to the Selling Shareholders shall be directed to the
following: (i) notices for Capital Z Financial Services Fund II, L.P. and
Capital Z Financial Services Private Fund II, L.P. shall be directed to them
at c/o Capital Z Partners, Ltd., 00 Xxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000; (ii)
notices for Reservoir Capital Master Fund, L.P. and Reservoir Capital
Partners, L.P. shall be directed to them at c/o Reservoir Capital Management,
L.L.C., 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000; (iii) notices for
RER Reinsurance Holdings, L.P. shall be directed to it at c/o RER Reinsurance
Holdings, L.P., 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxx, XX 00000; and (iv)
notices for Xxxxxx Xxxxxx shall be directed to him at x/x Xxxxxxxx Xxxxxxx
Partners, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000.
SECTION 14. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters, the Company and the Selling Shareholders
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 15. Submission to Jurisdiction; Process Agent. 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 state or federal court located in
the Borough of Manhattan, The City of New York, New York (each, a "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 non-exclusive jurisdiction of such
courts in any such suit, action or proceeding. Each of the Company and each
Selling Shareholder 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 CT Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
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,
27
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 appointments 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.
SECTION 16. Judgment Currency. 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 will
indemnify each Underwriter against any loss incurred by such Underwriter as a
result of any variation as between (a) 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 (b) the rate of exchange at which an
Underwriter is able to purchase United States dollars with the amount of the
judgment currency on the date the judgment currency is 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.
SECTION 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 19. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same Agreement.
SECTION 20. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
28
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholders
a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the Underwriters, the Company and the
Selling Shareholders in accordance with its terms.
Very truly yours,
PXRE GROUP LTD.
By /s/ Xxx Xxxxxxxxxxx
-------------------------------
Name: Xxx Xxxxxxxxxxx
Title: Chief Operating Officer
CAPITAL Z FINANCIAL SERVICES FUND II, L.P.
CAPITAL Z FINANCIAL SERVICES PRIVATE FUND
II, L.P.
By /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
Title: General Counsel
RESERVOIR CAPITAL MASTER FUND, L.P.
RESERVOIR CAPITAL PARTNERS, L.P.
By /s/ Xxxxx Xxxx
-------------------------------
Name: Xxxxx Xxxx
Title: President
RER REINSURANCE HOLDINGS, L.P.
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
XXXXXX XXXXXX
By /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title:
29
CONFIRMED AND ACCEPTED,
as of the date first above written:
CREDIT SUISSE FIRST BOSTON LLC
By /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Authorized Signatory
For itself and as Representative of the other Underwriters named in
Schedule A hereto.
30
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
Credit Suisse First Boston LLC........................... 2,625,843
Keefe, Bruyette, & Xxxxx, Inc............................ 1,575,506
Xxxxxxx & Partners Securities, LLC....................... 525,169
Xxx-Xxxx, Xxxxxx Inc..................................... 262,584
Lazard Freres & Co. LLC 262,584
-------
Total 5,251,686
=========
Sch A-1
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to Be Sold
--------------------- ---------------------
PXRE Group Ltd............. 3,724,803 657,318
Selling Shareholders:
--------------------
Capital Z Financial
Services Fund II, L.P.
and Capital Z Financial
Services Private Fund
II, L.P................... 358,277 0
Reservoir Capital
Master Fund, L.P. and
Reservoir Capital
Partners, L.P............. 701,910 78,344
RER Reinsurance
Holdings, L.P............. 448,028 50,007
Xxxxxx Xxxxxx............. 18,668 2,084
--------------------- ---------------------
Total..................... 5,251,686 787,753
===================== =====================
Sch B-1
SCHEDULE C
PXRE GROUP LTD.
5,251,686 Shares of Common Shares
(Par Value $1.00 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $23.75.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $22.5625, being an amount equal to the initial
public offering price set forth above less $1.1875 per share; provided that
the purchase price per share for any Option Securities purchased upon the
exercise of the overallotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not payable
on the Option Securities.
Sch C-1
SCHEDULE D
List of Subsidiaries
Significant Subsidiaries Jurisdiction of Organization
------------------------ ----------------------------
PXRE Reinsurance (Barbados) Limited Barbados
PXRE Reinsurance Company Connecticut
PXRE Corporation Delaware
PXRE Reinsurance Ltd. Bermuda
Other Subsidiaries (excluding subsidiaries which, considered in the aggregate
as a single subsidiary, do not constitute a Significant Subsidiary)
None.
Sch D-1
SCHEDULE E
List of Persons and Entities Subject to Lock-Up
X. Xxxxxxxx Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxx
Xxxxx X. Xxxx
Mural Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx X. XxXxxxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxx Xxxx
Xxx X. Xxxxxxxxxxx
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxx
CAPITAL Z FINANCIAL SERVICES FUND II, L.P.
CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P.
RER REINSURANCE HOLDINGS, L.P.
RESERVOIR CAPITAL PARTNERS, L.P.
RESERVOIR CAPITAL MASTER FUND, L.P.
SAB CAPITAL PARTNERS, LP
SAB CAPITAL PARTNERS II, LP
B-1
Exhibit C
FORM OF LOCK-UP FROM DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN SHAREHOLDERS
November 17, 2004
Credit Suisse First Boston LLC
as Representative of the several
Underwriters to be named in the
within-mentioned Underwriting Agreement
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by PXRE Group Ltd.
Dear Sirs:
The undersigned, a shareholder and/or an officer and/or a director of
PXRE Group Ltd., a Bermuda company (the "Company"), understands that Credit
Suisse First Boston LLC ("CSFB"), Xxxxx, Xxxxxxxx & Xxxxx, Inc., Xxxxxxx &
Partners Securities, LLC, Xxx-Xxxx, Xxxxxx Inc. and Lazard Freres & Co. LLC
(collectively, the "Underwriters") propose to enter into an Underwriting
Agreement (the "Underwriting Agreement") with the Company and the Selling
Shareholders providing for the public offering of shares (the "Securities") of
the Company's Common Shares, par value $1.00 per share (the "Common Shares").
In recognition of the benefit that such an offering will confer upon the
undersigned as a shareholder and/or an officer and/or director of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the Underwriting Agreement that, during a period of 90 days from
the date of the Underwriting Agreement, the undersigned will not, without the
prior written consent of CSFB, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale
of, or lend or otherwise transfer or dispose of any Common Shares or any
securities convertible into or exchangeable or exercisable for Common Shares,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file, or cause to be filed, any registration statement under the Securities
Act of 1933, as amended, with respect to any of the foregoing (collectively,
the "Lock-Up Securities") (it being understood that nothing herein shall
prohibit an officer or director of the Company from participating in the
filing by the Company of a registration statement where such filing is
permitted by Section 3(j) of the Underwriting Agreement) or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of the
Lock-Up Securities, whether any such swap or transaction is to be settled by
delivery of Common Shares or other securities, in cash or otherwise. If the
undersigned is not, as of the date hereof, an officer and/or director of the
Company, notwithstanding anything to the contrary in this agreement, there
shall be no limitation on the ability of the undersigned to convert preferred
shares into Common Shares, which Common Shares upon conversion shall remain
subject to the terms of this agreement until the end of the 90-day period
referred to above.
Notwithstanding the foregoing, the undersigned may transfer the Lock-Up
Securities without the prior written consent of CSFB, (i) as a bona fide gift
or gifts, provided that the donee or donees thereof agree to be bound in
writing by the restriction set forth herein, or (ii) to any trust for the
direct or indirect benefit of the undersigned or the immediate family of the
undersigned, provided that the trustee of the trust agrees to be bound in
writing by the restrictions set forth herein, and provided further that any
such
C-1
transfer shall not involve a disposition for value. For purposes of this
lock-up agreement, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin. The undersigned also
agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of the Lock-Up
Securities except in compliance with the foregoing restrictions.
Very truly yours,
Signature:__________________________
Print Name:_________________________
C-2
