Execution Copy
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PXRE GROUP LTD.
(a Bermuda company)
2,200,000 Common Shares
PURCHASE AGREEMENT
Dated: December 10, 2003
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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.....................................................................4
(v) No Material Adverse Change in Business....................................................4
(vi) Good Standing of the Company.............................................................4
(vii) Good Standing of Subsidiaries...........................................................4
(viii) Capitalization.........................................................................5
(ix) Authorization of Agreement...............................................................5
(x) Authorization and Description of Securities...............................................5
(xi) Absence of Defaults and Conflicts........................................................5
(xii) Absence of Labor Dispute................................................................6
(xiii) Absence of Proceedings.................................................................6
(xiv) Accuracy of Exhibits....................................................................6
(xv) Possession of Intellectual Property......................................................6
(xvi) Absence of Manipulation.................................................................6
(xvii) Absence of Further Requirements........................................................7
(xviii) Possession of Licenses and Permits....................................................7
(xix) Title to Property.......................................................................7
(xx) Investment Company Act...................................................................8
(xxi) Internal Controls.......................................................................8
(xxii) Retrocessional and Reinsurance Arrangements............................................8
(xxiii) ERISA.................................................................................8
(xxiv) NSROs..................................................................................8
(xxv) Regulatory Reporting....................................................................9
(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........................................10
(xxxi) Tax Returns Filed and Taxes Paid......................................................10
(xxxii) Bermuda Status.......................................................................10
(b) Representations and Warranties by the Selling Shareholder.........................................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.......................................................12
(vi) Valid Title.............................................................................12
(vii) Delivery of Securities.................................................................12
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Page
(viii) Absence of Manipulation...............................................................12
(ix) Absence of Further Requirements.........................................................12
(x) Restriction on Sale of Securities........................................................13
(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.................................................................................14
(c) Payment...........................................................................................14
(d) Denominations; Registration.......................................................................14
SECTION 3. Covenants of the Company........................................................................15
SECTION 4. Payment of Expenses.............................................................................17
(a) Expenses..........................................................................................17
(b) Expenses of the Selling Shareholder...............................................................17
(c) Termination of Agreement..........................................................................18
(d) Allocation of Expenses............................................................................18
SECTION 5. Conditions of Underwriters' Obligations.........................................................18
(a) Effectiveness of Registration Statement...........................................................18
(b) Opinions of Counsel for Company...................................................................18
(c) Opinion of Counsel for the Selling Shareholder....................................................19
(d) Opinion of Counsel for Underwriters...............................................................19
(e) Officers' Certificate.............................................................................19
(f) Certificate of Selling Shareholder................................................................19
(g) Accountants' Comfort Letters......................................................................19
(h) Bring-down Comfort Letters........................................................................19
(i) Approval of Listing...............................................................................20
(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 Shareholder....................................22
(c) Indemnification of Company, Directors and Officers and Selling Shareholder........................23
(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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Page
SECTION 7. Contribution....................................................................................24
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 the 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
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 ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., General Counsel of PXRE Corporation and PXRE
Reinsurance Company
EXHIBIT A-2 - Form of Opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, special U.S. Counsel to the Company
EXHIBIT A-3 - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, Special Bermuda Counsel to the Company
EXHIBIT A-4 - Form of Opinion of Chancery ▇▇▇▇▇▇▇▇, Special Barbados Counsel to the Company
EXHIBIT B - Form of Opinion of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., Counsel to the Selling Shareholders
EXHIBIT C - Form of Lock-Up From Directors, Executive Officers and Certain Shareholders
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PXRE GROUP LTD.
(a Bermuda company)
2,200,000 Common Shares
(Par Value $1.00 Per Share)
PURCHASE AGREEMENT
December 10, 2003
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Credit Suisse First Boston LLC
Lazard Freres & Co. LLC
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ Inc.
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
PXRE Group Ltd., a Bermuda company (the "Company"), and Phoenix Life
Insurance Company, a New York life insurance company (the "Selling
Shareholder"), confirm their respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇, Credit
Suisse First Boston LLC, Lazard Freres & Co. LLC and ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ Inc. are
acting as representatives (in such capacity, the "Representatives"), with
respect to (i) the sale by the Company and the Selling Shareholder, 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) 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 330,000 additional Common Shares to cover overallotments, if any.
The aforesaid 2,200,000 Common Shares to be purchased by the Underwriters (the
"Initial Securities") and all or any part of the 330,000 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 Shareholder understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives 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. 333-105589) 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 ("▇▇▇▇▇").
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.
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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 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 Representatives 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 ▇▇▇▇▇, 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.
3
(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 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.
4
(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 Shareholder, 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
Shareholder, was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(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.
5
(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 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.
6
(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 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.
7
(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 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 ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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.
8
(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 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.
9
(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 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 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 ▇▇▇ ▇▇▇▇, 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 Shareholder. The
Selling Shareholder represents and warrants to each Underwriter as of the date
hereof and as of the Closing Time, and agrees with each Underwriter, as follows:
(i) Accurate Disclosure. The 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 the 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 Shareholder Information" and consists exclusively of
the biographical information with respect to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ contained or incorporated by reference therein (to
the extent such information with respect to ▇▇. ▇▇▇▇▇▇▇▇▇▇ or ▇▇.
▇▇▇▇▇▇▇▇▇ relates to a time when ▇▇. ▇▇▇▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇, as
the case may be, was a director or employee of the Selling Shareholder,
The Phoenix Companies, Inc. ("PNX") or any subsidiary of PNX), the
information with respect to beneficial ownership by ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇ and the Selling Shareholder contained or incorporated by
reference therein (to the extent such information with respect to ▇▇.
▇▇▇▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇ relates to a time when ▇▇. ▇▇▇▇▇▇▇▇▇▇ or
▇▇. ▇▇▇▇▇▇▇▇▇, as the case may be, was a director or employee of the
Selling Shareholder, PNX or any subsidiary of PNX) and the information
about the Selling Shareholder under the caption "Selling Shareholder
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 the Selling Shareholder.
(iii) Authorization of Custody Agreement. The Custody
Agreement, in the form heretofore furnished to the Representatives (the
"Custody Agreement"), has been duly authorized, executed and delivered
by the Selling Shareholder and is the valid and binding agreement of
the 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 the Selling Shareholder and the consummation
of the transactions contemplated herein and compliance by the 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 the Selling Shareholder or any property or
assets of the 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 the Selling Shareholder is a
party or by which the Selling Shareholder may be bound, or to which any
of the property or assets of the 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 the 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
the Selling Shareholder or any of its properties.
11
(v) Certificates Suitable for Transfer. The Securities to be
sold by the 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 the Selling 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. The 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 the Selling Shareholder.
(vii) Delivery of Securities. Upon the Underwriters' acquiring
possession of stock certificates representing the Securities to be sold
by the 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 the
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. The 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 the Selling
Shareholder of its obligations hereunder, or in connection with the
sale and delivery of the Securities to be sold by the 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
securities laws and (B) such consents, approvals, authorizations,
registrations or qualifications as may be required and have been
obtained from the Bermuda Monetary Authority.
12
(x) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectus, the Selling Shareholder will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (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 the Selling
Shareholder over which account the Selling Shareholder does not
exercise investment power.
(xi) No Association with NASD. Except as previously disclosed
in writing to Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company,
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters,
neither the 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 Representatives 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 the Selling Shareholder as such and
delivered to the Representatives 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 the 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 the 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 Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
13
(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, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 330,000 Common Shares, as set
forth in Schedule B, 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇, 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
▇▇▇▇▇▇▇ ▇▇▇▇▇ in its discretion shall make to eliminate any sales or purchases
of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such
other place as shall be agreed upon by the Representatives and the Company and
the Selling Shareholder, 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 Representatives and the Company and the Selling
Shareholder (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 Representatives
and the Company, on each Date of Delivery as specified in the notice from
▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company.
Payment shall be made to the Company and the Selling Shareholder by
wire transfer of immediately available funds to bank accounts designated by the
Company and the Selling Shareholder, as the case may be, against delivery to the
Representatives 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 Representatives, 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. ▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 Representatives 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
Representatives 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.
14
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 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
Representatives 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 Representatives 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 Representatives or counsel for the Underwriters
shall reasonably object in writing.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives 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 Representatives, 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 ▇▇▇▇▇,
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 ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
15
(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 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
Representatives 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇, (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).
16
(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.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company and the 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 the Selling Shareholder. The Selling Shareholder will
pay all expenses incident to the performance of its 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 counsel and other advisors.
17
(c) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company and the Selling Shareholder 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 Shareholder with
respect to the sharing of such costs and expenses.
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 the 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 the 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 Representatives shall have received
the opinion, dated as of Closing Time, of ▇▇▇▇▇ ▇▇▇▇▇▇, 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 Representatives shall have received
the opinion, dated as of Closing Time, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
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 Representatives shall have received
the opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇,
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.
18
(iv) At Closing Time, the Representatives shall have received
the opinion, dated as of Closing Time, of Chancery ▇▇▇▇▇▇▇▇, 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 Counsel for the Selling Shareholder. At Closing Time,
the Representatives shall have received the opinion, dated as of Closing Time,
of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the Selling Shareholder,
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 B hereto and to such further
effect as counsel to the Underwriters may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the opinion and letter, each dated as of
Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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 Representatives 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 Shareholder. At Closing Time, the
Representatives shall have received a certificate of a duly authorized officer
of the Selling Shareholder, dated as of Closing Time, to the effect that (i) the
representations and warranties of the 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) the 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 Representatives shall have received from each of KPMG LLP and
PricewaterhouseCoopers LLP a letter dated such date, in form and substance
satisfactory to the Representatives, 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 Representatives
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.
19
(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.
(j) Lock-up Agreements. At the date of this Agreement, the
Representatives 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 ▇▇▇▇ ▇▇▇) 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 Representatives 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 ▇▇▇▇▇ ▇▇▇▇▇▇, 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 ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ 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 ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, 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.
20
(D) The opinion of Chancery ▇▇▇▇▇▇▇▇, 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.
(iii) Opinion of Counsel for Underwriters. The opinion and
letter of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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 Representatives and
dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to
the Representatives 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 Shareholder in connection with the issuance
and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives 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 Representatives by notice to the Company and the Selling
Shareholder 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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 Representatives 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 Shareholder. The
Selling Shareholder agrees 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 Shareholder Information.
22
(c) Indemnification of Company, Directors and Officers and Selling
Shareholder. 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 the Selling
Shareholder and each person, if any, who controls the 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 supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Underwriter through the Representatives
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
▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 Shareholder. 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
Shareholder with respect to indemnification.
23
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 indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholder 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 Shareholder 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
Shareholder 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 Shareholder 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 Shareholder 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 Shareholder 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 Shareholder 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
24
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 Shareholder 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 Shareholder,
as the case may be. The Underwriters' respective obligations to contribute
pursuant to this 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 Shareholder 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 Shareholder 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 Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholder, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement 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, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the New York Stock Exchange, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States or
with respect to Clearstream or Euroclear systems in Europe, or (v) if a banking
moratorium has been declared by either Federal or New York authorities.
(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.
25
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 are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives 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 Representatives 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 Representatives or (ii) the Company and the
Selling Shareholder 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 the Selling Shareholder or the Company.
(a) If the Selling Shareholder shall fail at Closing Time to sell and
deliver the number of Securities which the Selling Shareholder is obligated to
sell hereunder, then the Underwriters may, at option of the Representatives, by
notice from the Representatives 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 the
Selling Shareholder from liability, if any, in respect of such default.
In the event of a default by the Selling Shareholder as referred to in
this Section 11, each of the Representatives 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 Representatives at 4 World Financial
Center, New York, New York 10080, attention of Syndicate Department; notices to
the Company shall be directed to it at PXRE Group Ltd., Swan Building, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 12, Bermuda, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (fax:
(▇▇▇) ▇▇▇-▇▇▇▇); and notices to the Selling Shareholder shall be directed to
Phoenix Life Insurance Company, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq. (fax: (▇▇▇) ▇▇▇-▇▇▇▇).
SECTION 14. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters, the Company and the Selling Shareholder
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
Shareholder 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 Shareholder
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, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its
authorized agent (the "Authorized Agent") upon whom process may be served in any
such action arising out of or based on this Agreement or the transactions
contemplated hereby which may be instituted in any New York Court by any
Underwriter or by any person who controls any Underwriter, expressly consents to
the jurisdiction of any such court in respect of any such action, and waives any
other requirements of or objections to personal jurisdiction with respect
thereto. Such 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.
27
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 Shareholder a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriters, the Company and the Selling
Shareholder in accordance with its terms.
Very truly yours,
PXRE GROUP LTD.
By
-----------------------------------
Name:
Title:
PHOENIX LIFE INSURANCE COMPANY
By
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
CREDIT SUISSE FIRST BOSTON LLC
LAZARD FRERES & CO. LLC
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ INC.
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By
-----------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
29
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.................................................................. 1,100,000
Credit Suisse First Boston LLC.............................................................. 660,000
Lazard Freres & Co. LLC..................................................................... 220,000
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ Inc........................................................................ 120,000
▇▇▇▇▇▇▇ & Partners Securities, LLC.......................................................... 100,000
----------
Total 2,200,000
==========
Sch A-1
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to Be Sold
--------------------- ---------------------
PXRE Group Ltd...................... 1,068,300 330,000
Phoenix Life Insurance Company...... 1,131,700 --
--------- -------
Total............................... 2,200,000 330,000
========= =======
Sch B-1
SCHEDULE C
PXRE GROUP LTD.
2,200,000 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 $21.75.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $20.45, being an amount equal to the initial
public offering price set forth above less $1.30 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
▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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
Sch E-1
Exhibit A-1
FORM OF OPINION OF ▇▇▇▇▇ ▇▇▇▇▇▇, ESQ.,
GENERAL COUNSEL OF PXRE CORPORATION
AND PXRE REINSURANCE COMPANY
(i) To the best of my knowledge, the Company does not have any
Significant Subsidiaries, except as identified on Schedule D to the Purchase
Agreement; and to the best of my knowledge, the Company and each Significant
Subsidiary of the Company is duly qualified as a foreign corporation to transact
business and 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 so to qualify or
to be in good standing would not reasonably be expected to result in a Material
Adverse Effect.
(iii) To the best of my knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any subsidiary is a party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or governmental agency or
body, 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 the Purchase Agreement or the
performance by the Company of its obligations thereunder.
(iv) To the best of my knowledge, 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.
I have not independently checked the accuracy, completeness or fairness
of, or otherwise verified, and accordingly am not passing upon, and take no
responsibility for, the accuracy, completeness or fairness of the statements
included in the Registration Statement and the Prospectus and the documents
incorporated by reference therein. However, I have participated in conferences
with officers and representatives of the Company, representatives for the
independent public accountants of the Company and the Underwriters at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed and no facts have come to my attention that cause me to believe
either that the Registration Statement, at the time it became effective,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, as of its date and as of the Closing
Date, contained or contains an untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that I express no
belief or opinion with respect to the Statements of Eligibility and
Qualifications on Forms T-1, financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom).
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP,
SPECIAL U.S. COUNSEL TO THE COMPANY
(i) PXRE Corporation has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Delaware, and has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus; all of the issued and outstanding
capital stock of PXRE Corporation has been duly authorized and validly issued,
is fully paid and non-assessable and, to the best of our knowledge, is owned,
directly or indirectly, by PXRE Reinsurance (Barbados) Ltd; PXRE Reinsurance
Company is validly existing as a corporation in good standing under the laws of
Connecticut.
(ii) The Company and its subsidiaries have all permits, licenses and
authorizations necessary under any law or regulation of the United States, the
State of New York, the General Corporation Law of the State of Delaware and the
insurance laws and regulations of the State of Connecticut to conduct their
business as described in the Prospectus, except for such permits, licenses and
authorizations the failure of which to obtain would not reasonably be expected
to have a Material Adverse Effect.
(iii) The Registration Statement has been declared effective under the
1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b); and, to
the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the SEC.
(iv) The Registration Statement and the Prospectus and any amendments
thereof or supplements thereto as of their respective effective or issue dates
(other than the Statements of Eligibility and Qualification on Forms T-1, the
financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we express
no opinion) complied as to form in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations.
(v) The documents incorporated by reference in the Prospectus (other
than the financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we express
no opinion), when they were filed with the SEC, complied as to form in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC thereunder.
(vi) The descriptions in the Registration Statement of the contracts
and other documents listed on Attachment I to this opinion are accurate in all
material respects.
(vii) The form of certificate used to evidence the Common Shares
complies in all material respects with the requirements of the New York Stock
Exchange.
(viii) The information in the Prospectus under "Risk Factors--Risks
Related to Regulation" and "Certain ERISA Considerations," in the Registration
Statement under Item 15, and in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2002 under "Business--Regulation--United States,"
insofar as such information purports to describe or summarize legal matters,
documents, statutes, regulations or proceedings referred to therein under the
federal laws of the United States of America, the laws of the State of New York,
the General Corporation Law of the State of Delaware or the insurance laws of
the State of Connecticut, are accurate descriptions or summaries in all material
respects. We draw your attention, however, to the first sentence of the
penultimate paragraph of this opinion letter.
A-2-1
(ix) The information in the Prospectus under "Risk Factors--Risks
Related to Taxation," "Certain Tax Matters--Taxation of PXRE and
Subsidiaries--United States" and "Certain Tax Matters--Taxation of
Shareholders--United States," and in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2002 under "Business--Taxation of PXRE
and its Subsidiaries--United States," to the extent that such information
summarizes legal matters, legal proceedings, or legal conclusions, has been
reviewed by us and, insofar as such information purports to describe or
summarize the legal matters, documents, statutes, regulations, proceedings or
conclusions referred to therein, are accurate descriptions or summaries in all
material respects. We draw your attention, however, to the first sentence of the
penultimate paragraph of this opinion letter.
(x) No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over the Company
or any of its U.S. Subsidiaries or any of their respective properties or assets
is required under any law or regulation of the United States or of the State of
New York, under the General Corporation Law of the State of Delaware or the
insurance laws of the State of Connecticut for the execution, delivery and
performance of the Purchase Agreement or the consummation of the transactions
contemplated thereby, except for (1) such as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Securities by the Underwriters (as to which we express no opinion) and (2)
such as have been made or obtained under the 1933 Act or under the ▇▇▇▇ ▇▇▇.
(xi) The execution, delivery, and performance of the Purchase Agreement
and the consummation of the transactions contemplated thereby by the Company do
not and will not (A) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) or Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its U.S. Subsidiaries pursuant to,
any indenture, mortgage, deed of trust, loan or other agreement, instrument,
franchise, license or permit listed on Attachment II to this opinion (except for
such conflicts, breaches, defaults or Repayment Events or liens, charges or
encumbrances that would not reasonably be expected to have a Material Adverse
Effect), or (B) violate or conflict with any provision of the Certificate of
Incorporation, By-Laws or other organizational documents of PXRE Corporation, or
any United States federal or New York statute, rule or regulation known by us to
be generally applicable to similar transactions.
(xii) The Company is not as of the date hereof, and will not after
giving effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus be, an "investment company,"
as such term is defined in the U.S. Investment Company Act of 1940, as amended.
(xiii) Assuming that the submission to non-exclusive jurisdiction by
the Company in the Purchase Agreement is valid and binding under Bermuda law,
all claims against the Company regarding the Purchase Agreement or the
transactions contemplated thereby may validly be brought before any U.S. federal
or state court in the Borough of Manhattan, The City of New York, subject to the
power of the United States federal courts to transfer actions pursuant to 28
U.S.C. Sect. 1404(a) and to dismiss actions or proceedings on the grounds that
such federal court is an inconvenient forum for such action or proceeding;
provided, however, that we do not express any opinion as to the subject matter
jurisdiction of any United States federal court to adjudicate any action
relating to the Purchase Agreement where jurisdiction based on diversity of
citizenship under 28 U.S.C. Sect. 1332 does not exist.
A-2-2
(xiv) Any final and conclusive foreign country judgment (as is defined
in Section 5301 of the New York Civil Practice Law and Rules (the "CPLR"))
obtained against the Company in any of the foreign states (as defined in Section
5301 of the CPLR) mentioned in the Purchase Agreement and enforceable in such
foreign state in respect of any sum of money payable by the Company under the
Purchase Agreement would be recognized by the courts of the State of New York
and U.S. federal courts sitting in diversity in the State of New York and is
enforceable under New York law, without re-examination or re-litigation of the
matters adjudicated, by an action on the judgment, a motion for summary judgment
in lieu of complaint, or in a pending action by counterclaim, cross-claim or
affirmative defense. However, a court of the State of New York, and a U.S.
federal court sitting in diversity in the State of New York, may decline to
recognize such judgment if there exist with respect to the judgment of, or the
proceeding before, the court of such foreign state any of the conditions set
forth in Section 5304 of the CPLR, and may stay proceedings under the
circumstances provided in Section 5306 of the CPLR.
In passing upon the form of the Registration Statement, the Prospectus
and the documents incorporated by reference therein (other than the Statements
of Eligibility and Qualifications on Forms T-1, the financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which we express no opinion) in paragraphs (iv) and
(v) above, we have necessarily assumed the accuracy and completeness of the
statements included in the Registration Statement and the Prospectus and the
documents incorporated by reference therein and we have not independently
checked the accuracy, completeness or fairness of, or otherwise verified, and
accordingly are not passing upon, and take no responsibility for, the accuracy,
completeness or fairness of, such statements, except to the limited extent
provided in paragraphs (viii) and (ix) above and except as such statements
relate to us. However, we have participated in conferences with officers and
representatives of the Company, representatives of the independent public
accountants for the Company and the Underwriters at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, as a result of such participation, no facts have come to our attention that
cause us to believe either that the Registration Statement, at the time it
became effective, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date and as
of the Closing Date, contained or contains an untrue statement of a material
fact or omitted or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that we express no belief or opinion with respect to the Statements
of Eligibility and Qualifications on Forms T-1, or the financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom).
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇,
BERMUDA COUNSEL TO THE COMPANY
(i) Each of the Company and PXRE Bermuda are duly incorporated and
validly existing under the laws of Bermuda in good standing (meaning that they
have not failed to make any required filing with any Bermuda government
authority or to pay any Bermuda government fee or tax which would make them
liable to be struck off the register of companies maintained by the Registrar
under the Act and thereby cease to exist under the laws of Bermuda).
(ii) The Company has the necessary corporate power and authority to
execute and file the Registration Statement under the Securities Act and to
enter into and perform its obligations under the Agreement. Neither the
execution and filing under the Securities Act of the Registration Statement by
the Company, nor the execution and delivery of the Agreement and the performance
by the Company of its obligations thereunder will violate the Constitutional
Documents nor any applicable law, regulation, order or decree in Bermuda.
(iii) The Company has taken all corporate action required to authorise
its (i) execution, delivery and performance of the Agreement; and (ii) execution
and filing of the Registration Statement with the Commission under the
Securities Act. The Agreement has been duly authorised and executed by or on
behalf of the Company and constitutes the valid and binding obligations of the
Company enforceable in accordance with its terms. The Registration Statement has
been duly executed by or on behalf of the Company.
(iv) No order, consent, approval, licence, authorisation or validation
of or exemption by any government or public body or authority of Bermuda or any
sub-division thereof is required (i) to authorise or in connection with the
execution and filing of the Registration Statement, or (ii) in connection with
the sale of the Shares being delivered pursuant to the Agreement, or (iii) the
execution, delivery, performance and enforcement of the Agreement, except such
as have been duly obtained in accordance with Bermuda law and which are in full
force and effect.
(v) Each of the Company and PXRE Bermuda have the necessary corporate
power and authority and all permits, licenses and authorisations required by
Bermuda law to own or lease their properties and conduct their business as
described in the Prospectus.
(vi) The statements contained in the Prospectus under the captions
referred to in Schedule 1 hereto (which schedule shall refer to all statements
in the Prospectus or incorporated from the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2002 relating to Bermuda law or the
Constitutional Documents), insofar as such statements constitute a summary of
the matters of Bermuda law as so referred therein, fairly represent a summary of
the relevant Bermuda law or the Constitutional Documents and the PXRE Bermuda
Constitutional Documents and fairly and accurately present the information set
forth therein in all material respects.
(vii) (a) The authorised capital of the Company is as set forth in the
Prospectus.
(b) All of the issued share capital of the Company at the date
of the Company Register, including the Shares to be purchased
by the Underwriters from the Selling Shareholder, was duly
authorised, validly issued, and such shares of the Company
were fully paid and non-assessable.
A-3-1
(c) The Shares to be purchased by the Underwriters from the
Company have been duly authorised for issuance and sale to the
Underwriters pursuant to the Agreement and, upon the issuance
and delivery by the Company of such shares as contemplated by
the Prospectus and the Agreement against payment therefor in
accordance with the terms of issuance of such Shares set out
in the Agreement, such Shares will be validly issued and will
be fully paid and non-assessable. The Shares conform to the
description thereof in the Prospectus.
(d) The Company has no obligation (in the nature of the
existence of a pre-emptive or similar right) to offer the
Shares to any shareholder of the Company prior to or upon the
sale of the Shares to the Underwriters pursuant to the
Agreement.
(viii) Based solely upon a copy of the PXRE Bermuda Register, the
authorised share capital of PXRE Bermuda is US$120,000 dividend into 120,000
shares (of par value US$1.00 each) all of which are issued and outstanding as
common shares and are fully paid and non-assessable and registered in the name
of the Company.
(ix) There are no Bermuda stamp duty, transfer or similar taxes payable
in respect of the delivery of the Shares to the Underwriters or any subsequent
purchasers pursuant to the Agreement (assuming that such Underwriters or
subsequent purchasers of the Shares are not resident in Bermuda for exchange
control purposes). The Agreement is not subject to ad valorem stamp duty in
Bermuda, and no registration, documentary, recording, transfer or other similar
tax, fee or charge by any Bermuda government authority is payable in connection
with the execution, delivery, filing, registration or performance of the
Agreement.
(x) There is no capital gains, income or other tax of Bermuda imposed
by withholding or otherwise on any payment to be made to or by the Company
pursuant to the Agreement.
(xi) Neither of the Companies is entitled to any immunity under the
laws of Bermuda, whether characterised as sovereign immunity or otherwise, from
any legal proceedings, whether to enforce the Agreement or otherwise in respect
of the Companies and their respective property.
(xii) None of the Underwriters will be deemed to be resident, domiciled
or carrying on business in Bermuda by reason only of their execution,
performance and/or enforcement of the Agreement.
(xiii) It is not necessary or advisable in order for the Underwriters
to enforce their rights under the Agreement, including the exercise of remedies
thereunder, that they be licensed, qualified or otherwise entitled to carry on
business in Bermuda.
(xiv) It is not necessary or desirable to ensure the enforceability in
Bermuda of the Agreement that it be registered in any register kept by, or filed
with, any governmental authority or regulatory body in Bermuda.
(xv) Consummation of the transactions contemplated by the Agreement,
including but not limited to any actions taken pursuant to the indemnification
and contribution provisions set forth therein, will not constitute unlawful
financial assistance by the Company under Bermuda law.
A-3-2
(xvi) Based solely upon the Constitutional Documents, the PXRE Bermuda
Constitutional Documents and upon certified copies supplied to us by each of the
Company and PXRE Bermuda of certain correspondence from the BMA, each of the
Company and PXRE Bermuda has been designated as non-resident of Bermuda for the
purposes of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and as such is free to
acquire, hold, transfer and sell foreign currency and securities without
restriction under such legislation (including the payment of dividends or other
distributions which may be lawfully made by the Company under the Act and the
Constitutional Documents and by PXRE Bermuda under the Act, the Insurance Act
and the PXRE Bermuda Constitutional Documents) and is an "exempted company"
under the Act.
(xvii) The choice of the Foreign Laws as the governing law of the
Agreement is a valid choice of law and would be recognised and given effect to
in any action brought before a court of competent jurisdiction in Bermuda except
for those laws (i) which such court considers to be procedural in nature, (ii)
which are revenue or penal laws or (iii) the application of which would be
inconsistent with public policy, as such term is interpreted under the laws of
Bermuda. The submission in the Agreement to the non-exclusive jurisdiction of
the Foreign Courts is valid and binding upon the Company.
(xviii) The courts of Bermuda would recognise as a valid judgment, a
final and conclusive judgment in personam obtained in the Foreign Courts against
the Company based upon the Agreement under which a sum of money is payable
(other than a sum of money payable in respect of multiple damages, taxes or
other charges of a like nature or in respect of a fine or other penalty) and
would give a judgment based thereon provided that (a) such courts had proper
jurisdiction over the parties subject to such judgment, (b) such courts did not
contravene the rules of natural justice of Bermuda, (c) such judgment was not
obtained by fraud, (d) the enforcement of the judgment would not be contrary to
the public policy of Bermuda, (e) no new admissible evidence relevant to the
action is submitted prior to the rendering of the judgment by the courts of
Bermuda and (f) there is due compliance with the correct procedures under the
laws of Bermuda.
(xix) Each of the Company and PXRE Bermuda has received an assurance
from the Ministry of Finance that in the event of there being enacted in Bermuda
any legislation imposing tax on profits or income or computed on any capital
asset, gain or appreciation, or any tax in the nature of estate duty or
inheritance tax, then the imposition of any such tax shall not be applicable to
the Company or PXRE Bermuda or any of its respective operations or its shares,
debentures or other obligations until March 28, 2016.
(xx) Based solely on a search of the public records in respect of the
Company maintained at the offices of the Registrar at [ am/pm] on [ ], 2003
(which would not reveal details of matters which have not been lodged for
registration or have been lodged for registration but not actually registered at
the time of our search) and a search of the Cause Book of the Supreme Court of
Bermuda conducted at [ am/pm] on [ ], 2003 (which would not reveal details of
proceedings which have been filed but not actually entered in the Cause Book at
the time of our search), no steps have been, or are being, taken in Bermuda for
the appointment of a receiver or liquidator to, or for the winding-up,
dissolution, reconstruction or reorganisation of, the Company, though it should
be noted that the public files maintained by the Registrar do not reveal whether
a winding-up petition or application to the Court for the appointment of a
receiver has been presented and entries in the Cause Book may not specify the
nature of the relevant proceedings.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF CHANCERY ▇▇▇▇▇▇▇▇, BARBADOS COUNSEL TO THE COMPANY
(i) PXRE Reinsurance (Barbados) Ltd. ("PXRE Barbados") has been duly
incorporated and is validly existing as a company in good standing under the
laws of Barbados, has power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus.
(ii) PXRE Barbados is duly licensed under the Insurance Act of the laws
of Barbados, and has all permits, licenses and authorisations necessary under
the laws, rules and regulations of Barbados to conduct its insurance and
reinsurance business as described in the Prospectus.
(iii) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body in Barbados is
required for the Company or any of its subsidiaries (other than PXRE Barbados),
to conduct its insurance and reinsurance business as described in the
Prospectus.
(iv) All shares in the capital of PXRE Barbados have been duly and
validly authorised and issued, are fully paid and non-assessable and are owned
(directly and indirectly), by the Company. To the best of our knowledge, (a) all
shares in the capital of PXRE Barbados are owned (directly and indirectly), by
the Company, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, and (b) none of the outstanding shares in the
capital of PXRE Barbados was issued in violation of any pre-emptive or similar
rights of any shareholder of PXRE Barbados.
(v) The information in the Prospectus under "Risk Factors--Risks
Related to Regulation" and in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2002 under "Business--Regulation--Barbados" and
"Business--Taxation of PXRE and its Subsidiaries--Barbados", to the extent that
it constitutes matters of law, summaries of legal matters or legal proceedings,
or legal conclusions, has been reviewed by us and is correct in all material
respects.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-4
Exhibit B
FORM OF OPINION OF LEBOEUF, LAMB, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.,
COUNSEL TO THE SELLING SHAREHOLDER
(i) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any United States Federal or
New York court or governmental authority or agency (other than the issuance of
the order of the Commission declaring the Registration Statement effective and
such authorizations, approvals or consents as may be necessary under state
securities laws or insurance securities laws, as to which we express no opinion)
is necessary or required to be obtained by the Selling Shareholder for the
performance by it of its obligations under the Purchase Agreement or in
connection with the offer, sale or delivery of the Securities to be sold by the
Selling Shareholder.
(ii) The Custody Agreement has been duly authorized, executed and
delivered by the Selling Shareholder and constitutes the valid and binding
agreement of Selling Shareholder.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by the Selling Shareholder.
(iv) The execution, delivery and performance of the Purchase Agreement
and the Custody Agreement and the sale and delivery of the Securities to be sold
by the Selling Shareholder and compliance by the Selling Shareholder with its
obligations under the Purchase Agreement have been duly authorized by all
necessary corporate action on the part of the Selling Shareholder and, to our
knowledge without independent investigation, 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 the
Selling Shareholder or any property or assets of the Selling Shareholder
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement to which the
Selling Shareholder is a party or by which it may be bound or to which any of
the property or assets of the Selling Shareholder may be subject; nor will such
action result in any violation of the provisions of the charter or by-laws of
the Selling Shareholder or any law or administrative regulation of the United
States or of the State of New York, or, to our knowledge without independent
investigation, result in any violation of the provisions of any judgment or
order or any administrative or court decree of any governmental agency or body
of the United States or the State of New York having jurisdiction over the
Selling Shareholder or any of its properties.
(v) The Selling Shareholder has the requisite corporate power and
authority to enter into this Agreement and the Custody Agreement and to sell,
transfer and deliver the Securities to be sold by the Selling Shareholder.
(vi) Upon the Underwriters' acquiring possession of stock certificates
representing the Securities to be sold by the 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 the 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.
B-1
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Selling Shareholder and public
officials. Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
B-2
Exhibit C
FORM OF LOCK-UP FROM DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN SHAREHOLDERS
______________ ___, 2003
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
Credit Suisse First Boston LLC
Lazard Freres & Co. LLC
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇
▇▇▇▇▇"), Credit Suisse First Boston LLC, Lazard Freres & Co. LLC and ▇▇▇-▇▇▇▇,
▇▇▇▇▇▇ Inc. propose to enter into a Purchase Agreement (the "Purchase
Agreement") with the Company and the Selling Shareholder 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 Purchase Agreement
that, during a period of 90 days from the date of the Purchase Agreement, the
undersigned will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇,
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 Purchase 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 a director of the
Company (A) the "Lock-Up Securities" of the undersigned shall exclude any Common
Shares owned or acquired by the undersigned other than as a direct or indirect
result of the conversion of preferred shares of the Company and (B)
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.
C-1
Notwithstanding the foregoing, the undersigned may transfer the Lock-Up
Securities without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (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
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