Exhibit 10.3
between
EVEREST REINSURANCE
HOLDINGS, INC.,
as Guarantor,
and
JPMORGAN CHASE BANK,
as Guarantee Trustee
_________________
EVEREST RE CAPITAL
TRUST
_________________
Dated as of November
14, 2002
EVEREST RE CAPITAL
TRUST
Certain Sections of this
Guarantee Agreement relating to
Sections 310 through
318 of the
Trust Indenture Act of
1939:
|
|
| Section of Trust Indenture Act |
Section of Guarantee Agreement |
| |
|
| 310(a) |
4.1(a) |
| (b) |
4.1(c), 2.8 |
| (c) |
Inapplicable |
| 311(a) |
2.2(b) |
| (b) |
2.2(b) |
| (c) |
Inapplicable |
| 312(a) |
2.2(a) |
| (b) |
2.2(b) |
| 313 |
2.3 |
| 314(a) |
2.4 |
| (b) |
Inapplicable |
| (c) |
2.5 |
| (d) |
Inapplicable |
| (e) |
2.5, 3.2 |
| (f) |
2.1, 3.2 |
| 315(a) |
3.1(d) |
| (b) |
2.7 |
| (c) |
3.1 |
| (d) |
3.1(d) |
| 316(a) |
2.6, 5.4 |
| (b) |
5.3 |
| (c) |
Inapplicable |
| 317(a) |
Inapplicable |
| (b) |
Inapplicable |
| 318(a) |
2.1(b) |
| (b) |
2.1 |
| (c) |
2.1(a) |
Note: This reconciliation and tie
sheet shall not, for any purpose, be deemed to be a part of the Guarantee Agreement.
TABLE OF CONTENTS
|
|
Page
|
| |
|
|
| ARTICLE I |
Interpretation and Definitions |
1 |
| Section 1.1 |
Interpretation |
1 |
| Section 1.2 |
Definitions |
2 |
| ARTICLE II |
Trust Indenture Act |
5 |
| Section 2.1 |
Trust Indenture Act; Application |
5 |
| Section 2.2 |
List of Holders |
5 |
| Section 2.3 |
Reports by the Guarantee Trustee |
6 |
| Section 2.4 |
Periodic Reports to the Guarantee Trustee |
6 |
| Section 2.5 |
Evidence of Compliance with Conditions Precedent |
6 |
| Section 2.6 |
Events of Default; Waiver |
6 |
| Section 2.7 |
Events of Default; Notice |
7 |
| Section 2.8 |
Conflicting Interests |
7 |
| ARTICLE III |
Powers, Duties and Rights of the Guarantee Trustee |
7 |
| Section 3.1 |
Powers and Duties of the Guarantee Trustee |
7 |
| Section 3.2 |
Certain Rights of Guarantee Trustee |
8 |
| Section 3.3 |
Compensation |
10 |
| Section 3.4 |
Indemnity |
10 |
| ARTICLE IV |
Guarantee Trustee |
10 |
| Section 4.1 |
Guarantee Trustee: Eligibility |
11 |
| Section 4.2 |
Appointment, Removal and Resignation of the Guarantee Trustee |
11 |
| ARTICLE V |
Guarantee |
12 |
| Section 5.1 |
Guarantee |
12 |
| Section 5.2 |
Waiver of Notice and Demand |
12 |
| Section 5.3 |
Obligations Not Affected |
12 |
| Section 5.4 |
Rights of Holders |
13 |
| Section 5.5 |
Guarantee of Payment |
13 |
| Section 5.6 |
Subrogation |
13 |
| Section 5.7 |
Independent Obligations |
14 |
| ARTICLE VI |
Covenants and Subordination |
14 |
TABLE OF CONTENTS
(continued)
|
|
Page |
Section 6.1 |
Subordination |
14 |
| Section 6.2 |
Pari Passu Guarantees |
14 |
| ARTICLE VII |
Termination |
14 |
| Section 7.1 |
Termination |
14 |
| ARTICLE VIII |
Miscellaneous |
15 |
| Section 8.1 |
Successors and Assigns |
15 |
| Section 8.2 |
Amendments |
15 |
| Section 8.3 |
Notices |
15 |
| Section 8.4 |
Benefit |
16 |
| Section 8.5 |
Governing Law |
16 |
| Section 8.6 |
Counterparts |
17 |
Guarantee
Agreement, dated as of November 14, 2002, executed and delivered by Everest Reinsurance
Holdings, Inc., a Delaware corporation (the “Guarantor”) having its principal
office at 000 Xxxxxxxxxxxx Xxxx, Xxxxxxx Xxxxxx, Xxx Xxxxxx 00000, and JPMorgan Chase
Bank, a banking corporation organized under the laws of the State of New York, as trustee
(the “Guarantee Trustee”), for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein) of Everest Re Capital
Trust, a Delaware statutory trust (the “Issuer”).
W i t n e s s e t h :
Whereas,
pursuant to an Amended and Restated Trust Agreement, dated as of November 14, 2002 (the
“Trust Agreement”), among the Guarantor, as Depositor, JPMorgan Chase Bank, as
Property Trustee, Chase Manhattan Bank USA, National Association, as Delaware Trustee, and
the Administrative Trustees named therein and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing up to $225,000,000
aggregate Liquidation Amount (as defined in the Trust Agreement) of its 7.85% Preferred
Securities (Liquidation Amount $25 per preferred security) (the “Preferred
Securities”) representing preferred undivided beneficial interests in the assets of
the Issuer and having the terms set forth in the Trust Agreement;
Whereas,
the Preferred Securities will be issued by the Issuer and the proceeds thereof, together
with the proceeds from the issuance of the Issuer’s Common Securities (as defined
below), will be used to purchase the Debt Securities (as defined in the Trust Agreement)
of the Guarantor, which will be deposited with JPMorgan Chase Bank, as Property Trustee
under the Trust Agreement, as trust assets; and
Whereas,
as incentive for the Holders to purchase Preferred Securities the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth herein, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
Now,
therefore in consideration of the purchase by each Holder of Preferred Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes
and delivers this Guarantee Agreement to provide as follows for the benefit of the Holders
from time to time of the Preferred Securities:
ARTICLE I
Interpretation and
Definitions
| |
Section
1.1. Interpretation.
|
|
(a) capitalized
terms used in this Guarantee Agreement but not defined in the preamble hereto
have the respective meanings assigned to them in Section 1.2; |
|
(c) all
references to “the Guarantee Agreement” or “this Guarantee
Agreement” are to this Guarantee Agreement as modified, supplemented or
amended from time to time; |
|
(d) all
references in this Guarantee Agreement to Articles and Sections are to Articles
and Sections of this Guarantee Agreement unless otherwise specified; |
|
(e) a
term defined in the Trust Indenture Act has the same meaning when used in this
Guarantee Agreement unless otherwise defined in this Guarantee Agreement or
unless the context otherwise requires; |
|
(f) a
reference to the singular includes the plural and vice –versa; and |
|
(g) the
masculine, feminine or neuter genders used herein shall include the masculine,
feminine and neuter genders. |
| |
Section
1.2. Definitions.
|
| |
As
used in this Guarantee Agreement, the terms set forth below shall, unless the context
otherwise requires, have the following meanings:
|
| |
“Affiliate”
of any specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified Person;
provided, however, that the Issuer shall not be deemed to be an Affiliate of the
Guarantor. For the purposes of this definition, “control” when used with respect
to any specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.
|
| |
“Board
of Directors” means either the board of directors of the Guarantor or any duly
authorized committee of that board.
|
| |
“Common
Securities” means the securities representing common undivided beneficial interests
in the assets of the Issuer.
|
| |
“Debt”
means with respect to any Person, whether recourse is to all or a portion of the assets of
such Person and whether or not contingent and without duplication, (i) every obligation of
such Person for money borrowed; (ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of such Person with respect to letters of credit, bankers’
acceptances or similar facilities issued for the account of such Person, (iv) every
obligation of such Person issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such Person; (vi) all
Other Financial Obligations (as hereinafter defined) of such Person; (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable, directly or indirectly, as obligor or otherwise,
and (viii) all renewals, extensions, refundings, amendments or modifications of any
obligation of the type referred to in clauses (i) through (vii).
|
| |
“Event
of Default” means a default by the Guarantor on any of its payment or other
obligations under this Guarantee Agreement; provided, however, that, except with
respect to a default in payment of any Guarantee Payments, the Guarantor shall have
received notice of default from the Guarantee Trustee and shall not have cured such
default within 30 days after receipt of such notice.
|
| |
“Guarantee
Payments” means the following payments or distributions, without duplication, with
respect to the Preferred Securities, to the extent not paid or made by or on behalf of the
Issuer: (i) any accumulated and unpaid Distributions (as defined in the Trust Agreement)
required to be paid on the Preferred Securities, to the extent the Issuer shall have funds
on hand available therefor at such time, (ii) the redemption price, including all
accumulated and unpaid Distributions to the date of redemption (the “Redemption
Price”), with respect to any Preferred Securities called for redemption by the
Issuer, to the extent the Issuer shall have funds on hand available therefor at such time,
and (iii) upon a voluntary or involuntary termination, winding up or liquidation of the
Issuer, unless Debt Securities are distributed to the Holders, the lesser of (a) the
aggregate of the Liquidation Amount of $25 per Preferred Security plus accumulated and
unpaid Distributions on the Preferred Securities to the date of payment, to the extent
that the Issuer shall have funds available therefor at such time and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in liquidation of the
Issuer after satisfaction of liabilities to creditors of the Issuer in accordance with
applicable law and the Expense Agreement (as defined in the Trust Agreement) (in either
case, the “Liquidation Distribution”).
|
| |
“Guarantee
Trustee” means JPMorgan Chase Bank, until a Successor Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this Guarantee
Agreement, and thereafter means each such Successor Guarantee Trustee.
|
| |
“Holder”
means any holder, as registered on the books and records of the Issuer, of any Preferred
Securities; provided, however, that in determining whether the holders of the
requisite percentage of Preferred Securities have given any request, notice, consent or
waiver hereunder, “Holder” shall not include the Guarantor, the Guarantee
Trustee, or any Affiliate of the Guarantor or the Guarantee Trustee.
|
| |
“Indenture”
means the Junior Subordinated Indenture, dated as of November 14, 2002, as amended and
supplemented by the First Supplemental Indenture, among the Guarantor, the Indenture
Trustee, as trustee, and for the limited purposes therein specified, Everest Re Group,
Ltd., dated as of November 14, 2002, and as further supplemented and amended, between the
Guarantor and JPMorgan Chase Bank, as trustee.
|
| |
“List
of Holders” has the meaning specified in Section 2.2(a).
|
| |
“Majority
in Liquidation Amount of the Preferred Securities” means, except as provided by the
Trust Indenture Act, a vote by the Holder(s), voting separately as a class, of more than
50% of the aggregate Liquidation Amount of all then outstanding Preferred Securities
issued by the Issuer.
|
| |
“Officers’
Certificate” means, with respect to any Person, a certificate signed by the Chairman
or a Vice Chairman of the Board of Directors of such Person or the President or a Vice
President of such Person, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of such Person, and delivered to the Guarantee Trustee. Any
Officers’ Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee Agreement (other than the compliance certificate
required by Section 2.4) include:
|
|
(a) a
statement that each officer signing the Officers’ Certificate has read
the covenant or condition and the definitions relating thereto; |
|
(b) a
brief statement of the nature and scope of the examination or investigation
undertaken by each officer in rendering the Officers’ Certificate; |
|
(c) a
statement that each officer has made such examination or investigation as, in
such officer’s opinion, is necessary to enable such officer to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and |
|
(d) a
statement as to whether, in the opinion of each officer, such condition or
covenant has been complied with. |
| |
“Other
Financial Obligations” means, with respect to a Person, all obligations to make
payment pursuant to the terms of (i) securities contracts and foreign currency exchange
contracts, (ii) derivative instruments, such as swap agreements (including interest rate
and foreign exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange rate agreements, options, commodity
futures contracts, commodity option contracts, and (iii) in the case of both (i) and (ii)
above, similar financial instruments.
|
| |
“Person”
means a legal person, including any individual, corporation, estate, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision thereof,
or any other entity of whatever nature.
|
| |
“Responsible
Officer” means, with respect to the Guarantee Trustee, any Senior Vice President, any
Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, any Senior Trust Officer, any Trust Officer or
Assistant Trust Officer or any other officer of the Corporate Trust Department of the
Guarantee Trustee and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of that officer’s knowledge of
and familiarity with the particular subject.
|
| |
“Senior
Debt” means the principal of and any premium and interest (including interest
accruing on or after the filing of any petition in bankruptcy or for reorganization
relating to the Guarantor whether or not such claim for post–petition interest is
allowed in such proceeding) on all Debt, whether incurred on or prior to the date of this
Guarantee Agreement or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Debt Securities or this Guarantee
Agreement or to other Debt which is pari passu with, or subordinated to, the Debt
Securities; provided, however, that Senior Debt shall not be deemed to include (i)
any Debt of the Guarantor which when incurred and without respect to any election under
Section 1111(b) of the United States Bankruptcy Code of 1978, as amended, was without
recourse to the Guarantor, (ii) any Debt of the Guarantor to any of its subsidiaries,
(iii) Debt to any employee of the Guarantor, and (iv) any other debt securities issued
pursuant to the Indenture.
|
| |
“Successor
Guarantee Trustee” means a successor Guarantee Trustee possessing the qualifications
to act as Guarantee Trustee under Section 4.1.
|
| |
“Trust
Indenture Act” means the Trust Indenture Act of 1939, as amended.
|
Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Trust Agreement as in effect on the date hereof.
ARTICLE II
Trust Indenture Act
| |
Section
2.1. Trust Indenture Act; Application.
|
| (a) |
This
Guarantee Agreement is subject to the provisions of the Trust Indenture Act
that are required to be part of this Guarantee Agreement and shall, to the
extent applicable, be governed by such provisions. If any provision of this
Guarantee Agreement modifies or excludes any provision of the Trust Indenture
Act that may be so modified or excluded, the latter provision shall be deemed
to apply to this Guarantee Agreement as so modified or to be excluded, as the
case may be. |
| (b) |
If
and to the extent that any provision of this Guarantee Agreement limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control. |
| |
Section
2.2. List of Holders.
|
| (a) |
The
Guarantor shall furnish or cause to be furnished to the Guarantee Trustee (a)
semiannually, on or before June 30 and December 31 of each year, a list, in
such form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders (the “List of Holders”) as of a date not
more than 15 days prior to the delivery thereof, and (b) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt
by the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise
been received by the Guarantee Trustee in its capacity as such. The Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders. |
| (b) |
The
Guarantee Trustee shall comply with its obligations under Section 311(a),
Section 311(b) and Section 312(b) of the Trust Indenture Act. |
| |
Section
2.3. Reports by the Guarantee Trustee.
|
| |
Not
later than November 15 of each year, commencing November 15, 2003, the Guarantee Trustee
shall provide to the Holders such reports dated as of the preceding September 15 as are
required by Section 313(a) of the Trust Indenture Act, if any, in the form and in the
manner provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the other requirements of Section 313 of the Trust Indenture Act.
|
| |
Section
2.4. Periodic Reports to the Guarantee Trustee.
|
| |
The
Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange Commission
and the Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by Section 314 of
the Trust Indenture Act, in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act, such compliance certificate to be provided within 120
days of the end of each fiscal year of the Guarantor.
|
| |
Section
2.5. Evidence of Compliance with Conditions Precedent.
|
| |
The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance with such
conditions precedent, if any, provided for in this Guarantee Agreement that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers’ Certificate.
|
| |
Section
2.6. Events of Default; Waiver.
|
| |
The
Holders of a Majority in Liquidation Amount of the Preferred Securities may, by vote, on
behalf of the Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Guarantee
Agreement, but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.
|
| |
Section
2.7. Events of Default; Notice.
|
| (a) |
The
Guarantee Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders, notices
of all Events of Default known to the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, however,
that, except in the case of a default in the payment of a Guarantee Payment,
the Guarantee Trustee shall be protected in withholding such notice if and so
long as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders. |
| (b) |
The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice, or a
Responsible Officer charged with the administration of this Guarantee Agreement
shall have obtained written notice, of such Event of Default from the Guarantor
or a Holder. |
| |
Section
2.8. Conflicting Interests.
|
| |
The
Trust Agreement shall be deemed to be specifically described in this Guarantee Agreement
for the purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
|
ARTICLE III
Powers, Duties and
Rights of the Guarantee Trustee
| |
Section
3.1. Powers and Duties of the Guarantee Trustee.
|
| (a) |
|
This
Guarantee Agreement shall be held by the Guarantee Trustee for the benefit
of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising its rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act
as Successor Guarantee Trustee. The right, title and interest of the
Guarantee Trustee shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee. |
| (b) |
|
If
an Event of Default has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders. |
| (c) |
|
The
Guarantee Trustee, before the occurrence of any Event of Default and after
the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to
Section 2.6), the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same degree
of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs. |
| (d) |
|
No
provision of this Guarantee Agreement shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that: |
| (i) |
|
prior
to the occurrence of any Event of Default and after the curing or waiving
of all such Events of Default that may have occurred: |
| (A) |
|
the
duties and obligations of the Guarantee Trustee shall be determined solely
by the express provisions of this Guarantee Agreement, and the Guarantee
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee Agreement; and |
| (B) |
|
in
the absence of bad faith on the part of the Guarantee Trustee, the Guarantee
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to the
requirements of this Guarantee Agreement; but in the case of any such
certificates or opinions that by any provision hereof or of the Trust
Indenture Act are specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Guarantee Agreement; |
| (ii) |
|
the
Guarantee Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Guarantee Trustee, unless it shall
be proved that the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made; |
| (iii) |
|
the
Guarantee Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction
of the Holders of not less than a Majority in Liquidation Amount of the
Preferred Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under
this Guarantee Agreement; and |
| (iv) |
|
no
provision of this Guarantee Agreement shall require the Guarantee Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of
any of its rights or powers, if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or liability
is not reasonably assured to it. |
| |
Section
3.2. Certain Rights of Guarantee Trustee.
|
| (a) |
|
Subject
to the provisions of Section 3.1: |
| (i) |
|
The
Guarantee Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties. |
| (ii) |
|
Any
direction or act of the Guarantor contemplated by this Guarantee Agreement
shall be sufficiently evidenced by an Officers’ Certificate unless
otherwise prescribed herein. |
| (iii) |
|
Whenever,
in the administration of this Guarantee Agreement, the Guarantee Trustee
shall deem it desirable that a matter be proved or established before
taking, suffering or omitting to take any action hereunder, the Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an Officers’ Certificate
which, upon receipt of such request from the Guarantee Trustee, shall be
promptly delivered by the Guarantor. |
| (iv) |
|
The
Guarantee Trustee may consult with legal counsel, and the written advice or
opinion of such legal counsel with respect to legal matters shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in
accordance with such advice or opinion. Such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction. |
| (v) |
|
The
Guarantee Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Guarantee Agreement at the request or
direction of any Holder, unless such Holder shall have provided to the
Guarantee Trustee such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee, against the
costs, expenses (including attorneys’ fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee Agreement. |
| (vi) |
|
The
Guarantee Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit. |
| (vii) |
|
The
Guarantee Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its agents
or attorneys, and the Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder. |
| (viii) |
|
Whenever
in the administration of this Guarantee Agreement the Guarantee Trustee
shall deem it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the Guarantee
Trustee (A) may request instructions from the Holders of a Majority in
Liquidation Amount of the Preferred Securities, (B) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (C) shall be protected in acting in
accordance with such instructions. |
| (b) |
|
No
provision of this Guarantee Agreement shall be deemed to impose any duty or
obligation on the Guarantee Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts or to exercise any such right, power,
duty or obligation. No permissive power or authority available to the
Guarantee Trustee shall be construed to be a duty to act in accordance
with such power and authority. |
| |
Section
3.3. Compensation.
|
| |
The
Guarantor agrees to pay to the Guarantee Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an express
trust) and to reimburse the Guarantee Trustee upon request for all reasonable expenses,
disbursements and advances (including the reasonable fees and expenses of its attorneys
and agents) incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee Agreement.
|
| |
The
Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on the part of
the Guarantee Trustee arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or exact any
lien or charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement.
|
ARTICLE IV
Guarantee Trustee
| |
Section
4.1. Guarantee Trustee: Eligibility.
|
| (a) |
|
There
shall at all times be a Guarantee Trustee which shall: |
| (i) |
|
not
be an Affiliate of the Guarantor; and |
| (ii) |
|
be
a Person that is eligible pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least $50,000,000, and shall be a
corporation meeting the requirements of Section 310(a) of the Trust Indenture
Act. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section 4.1 and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. |
| (b) |
|
If
at any time the Guarantee Trustee shall cease to be eligible to so act under Section
4.1(a), the Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c). |
| (c) |
|
If
the Guarantee Trustee has or shall acquire any “conflicting interest” within
the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee
and Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act, subject to the penultimate paragraph
thereof. |
| |
.Section
4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
|
| (a) |
Subject
to Section 4.2(b), the Guarantee Trustee may be appointed or removed
without cause at any time by the Guarantor. |
| (b) |
The
Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Guarantee Trustee and delivered to the Guarantor. |
| (c) |
The
Guarantee Trustee appointed hereunder shall hold office until a Successor
Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee. |
| (d) |
If
no Successor Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee. |
ARTICLE V
Guarantee
| |
The
Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of
the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim
which the Issuer may have or assert. The Guarantor’s obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the Guarantor to
the Holders or by causing the Issuer to pay such amounts to the Holders. The Guarantor
shall give prompt written notice to the Guarantee Trustee in the event it makes any
direct payment hereunder.
|
| |
Section
5.2. Waiver of Notice and Demand.
|
| |
The
Guarantor hereby waives notice of acceptance of the Guarantee Agreement and of any
liability to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Guarantee Trustee, Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
|
| |
Section
5.3. Obligations Not Affected.
|
| |
The
obligations, covenants, agreements and duties of the Guarantor under this Guarantee
Agreement shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
|
| (a) |
|
the
release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer of any express or implied agreement, covenant, term or
condition relating to the Preferred Securities to be performed or observed by
the Issuer; |
| (b) |
|
the
extension of time for the payment by the Issuer of all or any portion of the
Distributions (other than an extension of time for payment of Distributions
that results from the extension of any interest payment period on the Debt
Securities as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities; |
| (c) |
|
any
failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred on
the Holders pursuant to the terms of the Preferred Securities, or any action on
the part of the Issuer granting indulgence or extension of any kind; |
| (d) |
|
the
voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of the Issuer; |
| (e) |
|
any
invalidity of, or defect or deficiency in, the Preferred Securities; |
| (f) |
|
the
settlement or compromise of any obligation guaranteed hereby or hereby
incurred; or |
| (g) |
|
any
other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a guarantor, it being the intent of this Section
5.3 that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances. |
There shall be no obligation of the
Holders to give notice to, or obtain the consent of, the Guarantor with respect to the
happening of any of the foregoing.
| |
Section
5.4. Rights of Holders.
|
| |
The
Guarantor expressly acknowledges that: (i) this Guarantee Agreement will be deposited
with the Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii)
the Holders of a Majority in Liquidation Amount of the Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
provided, however, that, subject to Section 3.1, the Guarantee Trustee
shall have the right to decline to follow any such direction if the Guarantee Trustee
being advised by counsel determines that the action so directed may not lawfully be
taken, or if the Guarantee Trustee in good faith shall, by a Responsible Officer or
Officers of the Guarantee Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the rights of the
Holders not party to such direction; and provided further that nothing in this
Guarantee Agreement shall impair the right of the Guarantee Trustee to take any action
deemed proper by the Guarantee Trustee and which is not inconsistent with such direction;
and (iv) any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Issuer or any other Person.
|
| |
Section
5.5. Guarantee of Payment.
|
| |
This
Guarantee Agreement creates a guarantee of payment and not of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or upon distribution of
Debt Securities to Holders as provided in the Trust Agreement.
|
| |
Section
5.6. Subrogation.
|
| |
The
Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in
respect of any amounts paid to the Holders by the Guarantor under this Guarantee
Agreement and shall have the right to waive payment by the Issuer pursuant to Section
5.1; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or exercise any
rights which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee Agreement, if,
at the time of any such payment, any amounts are due and unpaid under this Guarantee
Agreement. If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
|
| |
Section
5.7. Independent Obligations.
|
| |
The
Guarantor acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 5.3.
|
ARTICLE VI
Covenants and
Subordination
| |
Section
6.1. Subordination.
|
| |
The
obligations of the Guarantor under this Guarantee Agreement will constitute unsecured
obligations of the Guarantor and will rank subordinate and junior in right of payment to
all Senior Debt of the Guarantor to the extent and in the manner set forth in the
Indenture. The obligations of the Guarantor under this Guarantee Agreement do not
constitute Senior Debt.
|
| |
Section
6.2. Pari Passu Guarantees.
|
| |
The
obligations of the Guarantor under this Guarantee Agreement shall rank pari passu with
the obligations of the Guarantor under any similar Guarantee Agreements issued by the
Guarantor on behalf of the holders of preferred securities issued by any Issuer Trust (as
defined in the Indenture).
|
ARTICLE VII
Termination
| |
Section
7.1. Termination.
|
| |
This
Guarantee Agreement shall terminate and be of no further force and effect upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) the distribution of
Debt Securities to the Holders in exchange for all of the Preferred Securities or (iii)
full payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to Preferred Securities or this
Guarantee Agreement. The obligations of the Guarantor under Sections 3.3 and 3.4 shall
survive any such termination.
|
ARTICLE VIII
Miscellaneous
| |
Section
8.1. Successors and Assigns.
|
| |
All
guarantees and agreements contained in this Guarantee Agreement shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then outstanding. Except
in connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article VIII of the Indenture and pursuant to which the successor or
assignee agrees in writing to perform the Guarantor’s obligations hereunder, the
Guarantor shall not assign its obligations hereunder.
|
| |
Except
with respect to any changes which do not adversely affect the rights of the Holders in
any material respect (in which case no consent of the Holders will be required), this
Guarantee Agreement may only be amended with the prior approval of the Holders of not
less than a Majority in Liquidation Amount of the Preferred Securities. The provisions of
Article VI of the Trust Agreement concerning meetings or consents of the Holders shall
apply to the giving of such approval.
|
| |
Any
notice, request or other communication required or permitted to be given hereunder shall
be in writing, duly signed by the party giving such notice, and delivered, telecopied or
mailed by first class mail as follows:
|
| (a) |
|
if
given to the Guarantor, to the address set forth below or such other address,
facsimile number or to the attention of such other Person as the Guarantor may
give notice to the Guarantee Trustee and the Holders: |
Everest Reinsurance Holdings, Inc.
000
Xxxxxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxx Xxxxxx, Xxx Xxxxxx 00000
Facsimile No.: (000) 000-0000
Attention:
General Counsel
| (b) |
|
if
given to the Issuer, at the Issuer’s (and the Guarantee Trustee’s)
address or facsimile number set forth below or such other address or facsimile
number as the Issuer or the Guarantee Trustee may give notice to the Guarantee
Trustee (if given by the Issuer) and the Holders: |
Everest Re Capital Trust
c/o Everest Reinsurance Holdings, Inc.
000 Xxxxxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxx Xxxxxx, Xxx Xxxxxx 00000
Facsimile No.: (908) 604 -3450
Attention: General Counsel
JPMorgan Chase Bank
4 New York Plaza, 15th Floor
New York, New York 10004
Facsimile No.: (000) 000-0000
Attention: Institutional Trust Services
| (c) |
|
if
given to the Guarantee Trustee, at the Guarantee Trustee’s address or
facsimile number set forth below or such other address or facsimile number as
the Guarantee Trustee may give notice to the Guarantor and the Holders: |
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Institutional Trust Services
| (d) |
|
if
given to any Holder, at the address set forth on the books and records of the
Issuer. |
| |
All
notices hereunder shall be deemed to have been given when received in person, telecopied
with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a
notice or other document is refused delivery or cannot be delivered because of a changed
address of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
|
| |
This
Guarantee Agreement is solely for the benefit of the Holders and is not separately
transferable from the Preferred Securities.
|
| |
Section
8.5. Governing Law.
|
| |
THIS
GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
|
| |
Section
8.6. Counterparts.
|
| |
This
instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one
and the same instrument.
|
[THE NEXT PAGE IS THE
SIGNATURE PAGE]
In
Witness Whereof, the undersigned have executed this Guarantee Agreement as of the date
first above written.
| |
|
| |
Everest Reinsurance Holdings, Inc. |
| |
|
| |
By: /S/ XXXXXXX X. XXXXXXX |
| |
Name: Xxxxxxx X. Xxxxxxx |
| |
Title: Executive Vice President and Chief |
| |
Financial Officer |
| |
|
| |
JPMorgan Chase Bank |
| |
as Guarantee Trustee |
| |
|
| |
By: |
| |
Name: |
| |
Title: |
