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Exhibit 10.3

GUARANTEE AGREEMENT

BETWEEN

EVEREST REINSURANCE HOLDINGS, INC.,

AS GUARANTOR,

AND

JPMORGAN CHASE BANK,

AS GUARANTEE TRUSTEE

_________________

EVEREST RE CAPITAL TRUST

_________________

DATED AS OF NOVEMBER 14, 2002

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EVEREST RE CAPITAL TRUST

Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:

Section of Trust Indenture Act Section of Guarantee Agreement          310(a)
4.1(a)            (b) 4.1(c), 2.8            (c) Inapplicable      311(a) 2.2(b)
           (b) 2.2(b)            (c) Inapplicable      312(a) 2.2(a)
           (b) 2.2(b)          313 2.3      314(a) 2.4            (b)
Inapplicable            (c) 2.5            (d) Inapplicable            (e) 2.5,
3.2            (f) 2.1, 3.2      315(a) 3.1(d)            (b) 2.7            (c)
3.1            (d) 3.1(d)      316(a) 2.6, 5.4            (b) 5.3            (c)
Inapplicable      317(a) Inapplicable            (b) Inapplicable      318(a)
2.1(b)            (b) 2.1            (c) 2.1(a)

Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Guarantee Agreement.

TABLE OF CONTENTS

Page
      ARTICLE I Interpretation and Definitions 1           Section 1.1
Interpretation 1           Section 1.2 Definitions 2  ARTICLE II Trust Indenture
Act 5           Section 2.1 Trust Indenture Act; Application 5           Section
2.2 List of Holders 5           Section 2.3 Reports by the Guarantee Trustee 6 
         Section 2.4 Periodic Reports to the Guarantee Trustee 6 
         Section 2.5 Evidence of Compliance with Conditions Precedent 6 
         Section 2.6 Events of Default; Waiver 6           Section 2.7 Events of
Default; Notice 7           Section 2.8 Conflicting Interests 7  ARTICLE III
Powers, Duties and Rights of the Guarantee Trustee 7           Section 3.1
Powers and Duties of the Guarantee Trustee 7           Section 3.2 Certain
Rights of Guarantee Trustee 8           Section 3.3 Compensation 10 
         Section 3.4 Indemnity 10  ARTICLE IV Guarantee Trustee 10 
         Section 4.1 Guarantee Trustee: Eligibility 11           Section 4.2
Appointment, Removal and Resignation of the Guarantee Trustee 11  ARTICLE V
Guarantee 12           Section 5.1 Guarantee 12           Section 5.2 Waiver of
Notice and Demand 12           Section 5.3 Obligations Not Affected 12 
         Section 5.4 Rights of Holders 13           Section 5.5 Guarantee of
Payment 13           Section 5.6 Subrogation 13           Section 5.7
Independent Obligations 14  ARTICLE VI Covenants and Subordination 14 

TABLE OF CONTENTS (continued)

Page

         Section 6.1 Subordination 14           Section 6.2 Pari Passu
Guarantees 14  ARTICLE VII Termination 14           Section 7.1 Termination 14 
ARTICLE VIII Miscellaneous 15           Section 8.1 Successors and Assigns 15 
         Section 8.2 Amendments 15           Section 8.3 Notices 15 
         Section 8.4 Benefit 16           Section 8.5 Governing Law 16 
         Section 8.6 Counterparts 17 

        Guarantee Agreement, dated as of November 14, 2002, executed and
delivered by Everest Reinsurance Holdings, Inc., a Delaware corporation (the
“Guarantor”) having its principal office at 477 Martinsville Road, Liberty
Corner, New Jersey 07938, and JPMorgan Chase Bank, a banking corporation
organized under the laws of the State of New York, as trustee (the “Guarantee
Trustee”), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of Everest Re Capital Trust, a
Delaware statutory trust (the “Issuer”).

W I T N E S S E T H :

        Whereas, pursuant to an Amended and Restated Trust Agreement, dated as
of November 14, 2002 (the “Trust Agreement”), among the Guarantor, as Depositor,
JPMorgan Chase Bank, as Property Trustee, Chase Manhattan Bank USA, National
Association, as Delaware Trustee, and the Administrative Trustees named therein
and the Holders from time to time of undivided beneficial interests in the
assets of the Issuer, the Issuer is issuing up to $225,000,000 aggregate
Liquidation Amount (as defined in the Trust Agreement) of its 7.85% Preferred
Securities (Liquidation Amount $25 per preferred security) (the “Preferred
Securities”) representing preferred undivided beneficial interests in the assets
of the Issuer and having the terms set forth in the Trust Agreement;

        Whereas, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer’s
Common Securities (as defined below), will be used to purchase the Debt
Securities (as defined in the Trust Agreement) of the Guarantor, which will be
deposited with JPMorgan Chase Bank, as Property Trustee under the Trust
Agreement, as trust assets; and

        Whereas, as incentive for the Holders to purchase Preferred Securities
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.

        Now, therefore in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Preferred Securities:

ARTICLE I

INTERPRETATION AND DEFINITIONS

          Section 1.1. Interpretation.

          In this Guarantee Agreement, unless the context otherwise requires:

    (a)               capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.2;

    (b)               a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;

    (c)               all references to “the Guarantee Agreement” or “this
Guarantee Agreement” are to this Guarantee Agreement as modified, supplemented
or amended from time to time;

    (d)               all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;

    (e)               a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;

    (f)               a reference to the singular includes the plural and vice
–versa; and

    (g)               the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.

          Section 1.2. Definitions.

          As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:

          “Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that the Issuer shall not
be deemed to be an Affiliate of the Guarantor. For the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

          “Board of Directors” means either the board of directors of the
Guarantor or any duly authorized committee of that board.

          “Common Securities” means the securities representing common undivided
beneficial interests in the assets of the Issuer.

          “Debt” means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent and without
duplication, (i) every obligation of such Person for money borrowed; (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers’ acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such Person;
(vi) all Other Financial Obligations (as hereinafter defined) of such Person;
(vii) every obligation of the type referred to in clauses (i) through (vi) of
another Person and all dividends of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise, and (viii) all renewals, extensions,
refundings, amendments or modifications of any obligation of the type referred
to in clauses (i) through (vii).

          “Event of Default” means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default from the Guarantee Trustee and
shall not have cured such default within 30 days after receipt of such notice.

          “Guarantee Payments” means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accumulated and unpaid Distributions to the date of redemption (the “Redemption
Price”), with respect to any Preferred Securities called for redemption by the
Issuer, to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, winding up or
liquidation of the Issuer, unless Debt Securities are distributed to the
Holders, the lesser of (a) the aggregate of the Liquidation Amount of $25 per
Preferred Security plus accumulated and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent that the Issuer shall have
funds available therefor at such time and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
after satisfaction of liabilities to creditors of the Issuer in accordance with
applicable law and the Expense Agreement (as defined in the Trust Agreement) (in
either case, the “Liquidation Distribution”).

          “Guarantee Trustee” means JPMorgan Chase Bank, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.

          “Holder” means any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, “Holder” shall not
include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor
or the Guarantee Trustee.

          “Indenture” means the Junior Subordinated Indenture, dated as of
November 14, 2002, as amended and supplemented by the First Supplemental
Indenture, among the Guarantor, the Indenture Trustee, as trustee, and for the
limited purposes therein specified, Everest Re Group, Ltd., dated as of November
14, 2002, and as further supplemented and amended, between the Guarantor and
JPMorgan Chase Bank, as trustee.

          “List of Holders” has the meaning specified in Section 2.2(a).

          “Majority in Liquidation Amount of the Preferred Securities” means,
except as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the aggregate Liquidation Amount of
all then outstanding Preferred Securities issued by the Issuer.

          “Officers’ Certificate” means, with respect to any Person, a
certificate signed by the Chairman or a Vice Chairman of the Board of Directors
of such Person or the President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person, and delivered to the Guarantee Trustee. Any Officers’ Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement (other than the compliance certificate required by
Section 2.4) include:

    (a)               a statement that each officer signing the Officers’
Certificate has read the covenant or condition and the definitions relating
thereto;

    (b)               a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers’ Certificate;

    (c)               a statement that each officer has made such examination or
investigation as, in such officer’s opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

    (d)               a statement as to whether, in the opinion of each officer,
such condition or covenant has been complied with.

          “Other Financial Obligations” means, with respect to a Person, all
obligations to make payment pursuant to the terms of (i) securities contracts
and foreign currency exchange contracts, (ii) derivative instruments, such as
swap agreements (including interest rate and foreign exchange rate swap
agreements), cap agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange rate agreements, options, commodity futures
contracts, commodity option contracts, and (iii) in the case of both (i) and
(ii) above, similar financial instruments.

          “Person” means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

          “Responsible Officer” means, with respect to the Guarantee Trustee,
any Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Senior Trust Officer, any Trust Officer or Assistant Trust Officer or any other
officer of the Corporate Trust Department of the Guarantee Trustee and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer’s knowledge of and
familiarity with the particular subject.

          “Senior Debt” means the principal of and any premium and interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post–petition interest is allowed in such proceeding) on all Debt,
whether incurred on or prior to the date of this Guarantee Agreement or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Debt Securities or this
Guarantee Agreement or to other Debt which is pari passu with, or subordinated
to, the Debt Securities; provided, however, that Senior Debt shall not be deemed
to include (i) any Debt of the Guarantor which when incurred and without respect
to any election under Section 1111(b) of the United States Bankruptcy Code of
1978, as amended, was without recourse to the Guarantor, (ii) any Debt of the
Guarantor to any of its subsidiaries, (iii) Debt to any employee of the
Guarantor, and (iv) any other debt securities issued pursuant to the Indenture.

          “Successor Guarantee Trustee” means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

          “Trust Indenture Act” means the Trust Indenture Act of 1939, as
amended.

        Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust Agreement as
in effect on the date hereof.

ARTICLE II

TRUST INDENTURE ACT

          Section 2.1. Trust Indenture Act; Application.

(a)                            This Guarantee Agreement is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Guarantee Agreement and shall, to the extent applicable, be governed by such
provisions. If any provision of this Guarantee Agreement modifies or excludes
any provision of the Trust Indenture Act that may be so modified or excluded,
the latter provision shall be deemed to apply to this Guarantee Agreement as so
modified or to be excluded, as the case may be.

(b)                            If and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.

          Section 2.2. List of Holders.

(a)                            The Guarantor shall furnish or cause to be
furnished to the Guarantee Trustee (a) semiannually, on or before June 30 and
December 31 of each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders (the “List of
Holders”) as of a date not more than 15 days prior to the delivery thereof, and
(b) at such other times as the Guarantee Trustee may request in writing, within
30 days after the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such list is
furnished, in each case to the extent such information is in the possession or
control of the Guarantor and is not identical to a previously supplied list of
Holders or has not otherwise been received by the Guarantee Trustee in its
capacity as such. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.

(b)                            The Guarantee Trustee shall comply with its
obligations under Section 311(a), Section 311(b) and Section 312(b) of the Trust
Indenture Act.

          Section 2.3. Reports by the Guarantee Trustee.

          Not later than November 15 of each year, commencing November 15, 2003,
the Guarantee Trustee shall provide to the Holders such reports dated as of the
preceding September 15 as are required by Section 313(a) of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.

          Section 2.4. Periodic Reports to the Guarantee Trustee.

          The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act,
such compliance certificate to be provided within 120 days of the end of each
fiscal year of the Guarantor.

          Section 2.5. Evidence of Compliance with Conditions Precedent.

          The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers’ Certificate.

          Section 2.6. Events of Default; Waiver.

          The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.

          Section 2.7. Events of Default; Notice.

(a)              The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, however, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the Board of Directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.

(b)              The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of Default
from the Guarantor or a Holder.

          Section 2.8. Conflicting Interests.

          The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.

ARTICLE III

POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

          Section 3.1. Powers and Duties of the Guarantee Trustee.

(a)  

  This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising its rights pursuant
to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.

(b)  

  If an Event of Default has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.

(c)  

  The Guarantee Trustee, before the occurrence of any Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), the Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

(d)  

  No provision of this Guarantee Agreement shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:

(i)  

  prior to the occurrence of any Event of Default and after the curing or
waiving of all such Events of Default that may have occurred:

(A)  

  the duties and obligations of the Guarantee Trustee shall be determined solely
by the express provisions of this Guarantee Agreement, and the Guarantee Trustee
shall not be liable except for the performance of such duties and obligations as
are specifically set forth in this Guarantee Agreement; and

(B)  

  in the absence of bad faith on the part of the Guarantee Trustee, the
Guarantee Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to the requirements
of this Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee Agreement;

(ii)  

  the Guarantee Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be
proved that the Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;

(iii)  

  the Guarantee Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of not less than a Majority in Liquidation Amount of the Preferred
Securities relating to the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee, or exercising any trust or
power conferred upon the Guarantee Trustee under this Guarantee Agreement; and

(iv)  

  no provision of this Guarantee Agreement shall require the Guarantee Trustee
to expend or risk its own funds or otherwise incur personal financial liability
in the performance of any of its duties or in the exercise of any of its rights
or powers, if the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee Agreement or adequate indemnity against such
risk or liability is not reasonably assured to it.

          Section 3.2. Certain Rights of Guarantee Trustee.

(a)  

  Subject to the provisions of Section 3.1:

(i)  

  The Guarantee Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.

(ii)  

  Any direction or act of the Guarantor contemplated by this Guarantee Agreement
shall be sufficiently evidenced by an Officers’ Certificate unless otherwise
prescribed herein.

(iii)  

  Whenever, in the administration of this Guarantee Agreement, the Guarantee
Trustee shall deem it desirable that a matter be proved or established before
taking, suffering or omitting to take any action hereunder, the Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an Officers’ Certificate
which, upon receipt of such request from the Guarantee Trustee, shall be
promptly delivered by the Guarantor.

(iv)  

  The Guarantee Trustee may consult with legal counsel, and the written advice
or opinion of such legal counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in accordance with such
advice or opinion. Such legal counsel may be legal counsel to the Guarantor or
any of its Affiliates and may be one of its employees. The Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.

(v)  

  The Guarantee Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Guarantee Agreement at the request or
direction of any Holder, unless such Holder shall have provided to the Guarantee
Trustee such adequate security and indemnity as would satisfy a reasonable
person in the position of the Guarantee Trustee, against the costs, expenses
(including attorneys’ fees and expenses) and liabilities that might be incurred
by it in complying with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Guarantee Agreement.

(vi)  

  The Guarantee Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.

(vii)  

  The Guarantee Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its agents or
attorneys, and the Guarantee Trustee shall not be responsible for any misconduct
or negligence on the part of any such agent or attorney appointed with due care
by it hereunder.

(viii)  

  Whenever in the administration of this Guarantee Agreement the Guarantee
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Guarantee Trustee (A) may request instructions from the Holders of a Majority in
Liquidation Amount of the Preferred Securities, (B) may refrain from enforcing
such remedy or right or taking such other action until such instructions are
received, and (C) shall be protected in acting in accordance with such
instructions.

(b)  

  No provision of this Guarantee Agreement shall be deemed to impose any duty or
obligation on the Guarantee Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Guarantee Trustee shall be
construed to be a duty to act in accordance with such power and authority.

          Section 3.3. Compensation.

          The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
(including the reasonable fees and expenses of its attorneys and agents)
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee Agreement.

          Section 3.4. Indemnity.

          The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Guarantee Trustee arising out of or
in connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement.

ARTICLE IV

GUARANTEE TRUSTEE

          Section 4.1. Guarantee Trustee: Eligibility.

(a)  

There shall at all times be a Guarantee Trustee which shall:

(i)  

not be an Affiliate of the Guarantor; and

(ii)  

be a Person that is eligible pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least $50,000,000, and shall be a
corporation meeting the requirements of Section 310(a) of the Trust Indenture
Act. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section 4.1 and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.

(b)  

If at any time the Guarantee Trustee shall cease to be eligible to so act under
Section 4.1(a), the Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).

(c)  

If the Guarantee Trustee has or shall acquire any “conflicting interest” within
the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee
and Guarantor shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act, subject to the penultimate paragraph thereof.

          .Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.

(a)              Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.

(b)              The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.

(c)              The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

(d)              If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

ARTICLE V

GUARANTEE

          Section 5.1. Guarantee.

          The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor’s obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders. The Guarantor shall give prompt
written notice to the Guarantee Trustee in the event it makes any direct payment
hereunder.

          Section 5.2. Waiver of Notice and Demand.

          The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

          Section 5.3. Obligations Not Affected.

          The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:

(a)  

the release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer of any express or implied agreement, covenant, term or
condition relating to the Preferred Securities to be performed or observed by
the Issuer;

(b)  

the extension of time for the payment by the Issuer of all or any portion of the
Distributions (other than an extension of time for payment of Distributions that
results from the extension of any interest payment period on the Debt Securities
as provided in the Indenture), Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities;

(c)  

any failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred on
the Holders pursuant to the terms of the Preferred Securities, or any action on
the part of the Issuer granting indulgence or extension of any kind;

(d)  

the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of the Issuer;

(e)  

any invalidity of, or defect or deficiency in, the Preferred Securities;

(f)  

the settlement or compromise of any obligation guaranteed hereby or hereby
incurred; or

(g)  

any other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a guarantor, it being the intent of this
Section 5.3 that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

          Section 5.4. Rights of Holders.

          The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; provided, however, that, subject to Section 3.1, the Guarantee
Trustee shall have the right to decline to follow any such direction if the
Guarantee Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Guarantee Trustee in good faith
shall, by a Responsible Officer or Officers of the Guarantee Trustee, determine
that the proceedings so directed would be illegal or involve it in personal
liability or be unduly prejudicial to the rights of the Holders not party to
such direction; and provided further that nothing in this Guarantee Agreement
shall impair the right of the Guarantee Trustee to take any action deemed proper
by the Guarantee Trustee and which is not inconsistent with such direction; and
(iv) any Holder may institute a legal proceeding directly against the Guarantor
to enforce its rights under this Guarantee Agreement, without first instituting
a legal proceeding against the Guarantee Trustee, the Issuer or any other
Person.

          Section 5.5. Guarantee of Payment.

          This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Debt Securities to Holders as provided in
the Trust Agreement.

          Section 5.6. Subrogation.

          The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.

          Section 5.7. Independent Obligations.

          The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3.

ARTICLE VI

COVENANTS AND SUBORDINATION

          Section 6.1. Subordination.

          The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt of the Guarantor to the extent and
in the manner set forth in the Indenture. The obligations of the Guarantor under
this Guarantee Agreement do not constitute Senior Debt.

          Section 6.2. Pari Passu Guarantees.

          The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
preferred securities issued by any Issuer Trust (as defined in the Indenture).

ARTICLE VII

TERMINATION

          Section 7.1. Termination.

          This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debt Securities to the Holders in exchange
for all of the Preferred Securities or (iii) full payment of the amounts payable
in accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement. The obligations of the Guarantor under Sections 3.3
and 3.4 shall survive any such termination.

ARTICLE VIII

MISCELLANEOUS

          Section 8.1. Successors and Assigns.

          All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor’s obligations hereunder, the Guarantor shall not assign
its obligations hereunder.

          Section 8.2. Amendments.

          Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Preferred Securities. The provisions of Article VI of the Trust Agreement
concerning meetings or consents of the Holders shall apply to the giving of such
approval.

          Section 8.3. Notices.

          Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:

(a)  

if given to the Guarantor, to the address set forth below or such other address,
facsimile number or to the attention of such other Person as the Guarantor may
give notice to the Guarantee Trustee and the Holders:

Everest Reinsurance Holdings, Inc.
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938

Facsimile No.: (908) 604-3450
Attention: General Counsel

(b)  

if given to the Issuer, at the Issuer’s (and the Guarantee Trustee’s) address or
facsimile number set forth below or such other address or facsimile number as
the Issuer or the Guarantee Trustee may give notice to the Guarantee Trustee (if
given by the Issuer) and the Holders:

Everest Re Capital Trust
c/o Everest Reinsurance Holdings, Inc.
477 Martinsville Road
P.O. Box 830
Liberty Corner, New Jersey 07938
Facsimile No.: (908) 604 -3450
Attention: General Counsel

          with a copy to:

JPMorgan Chase Bank
4 New York Plaza, 15th Floor
New York, New York 10004
Facsimile No.: (212) 623-6167
Attention: Institutional Trust Services

(c)  

if given to the Guarantee Trustee, at the Guarantee Trustee’s address or
facsimile number set forth below or such other address or facsimile number as
the Guarantee Trustee may give notice to the Guarantor and the Holders:

JPMorgan Chase Bank
4 New York Plaza, 15th Floor
New York, New York 10004
Facsimile No.: (212) 623-6167
Attention: Institutional Trust Services

(d)  

     if given to any Holder, at the address set forth on the books and records
of the Issuer.

          All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

          Section 8.4. Benefit.

          This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Preferred Securities.

          Section 8.5. Governing Law.

          THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

          Section 8.6. Counterparts.

          This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

[THE NEXT PAGE IS THE SIGNATURE PAGE]

        In Witness Whereof, the undersigned have executed this Guarantee
Agreement as of the date first above written.

    Everest Reinsurance Holdings, Inc.       By: /S/ STEPHEN L. LIMAURO   Name:
Stephen L. Limauro   Title: Executive Vice President and Chief   Financial
Officer

    JPMorgan Chase Bank       as Guarantee Trustee     By:
                                      Name:   Title: