Document:

Exhibit 10.2 

FIRST SUPPLEMENTAL
INDENTURE 

DATED AS OF NOVEMBER
14, 2002 

AMONG 

EVEREST REINSURANCE
HOLDINGS, INC., 

AS ISSUER, 

EVEREST RE GROUP, LTD. 

(solely for the
purposes of Section 4.2(b) and Article X), 

AND 

JPMORGAN CHASE BANK 

AS TRUSTEE 

TABLE OF CONTENTS  

ARTICLE I

                                                              DEFINITIONS 

			Page
	SECTION 1.1	Definition of Terms	2 

ARTICLE II

                                   GENERAL TERMS AND CONDITIONS OF THE SUBORDINATED DEBT
SECURITIES 

			
	SECTION 2.1	Designation and Principal Amount	3 
	SECTION 2.2	Maturity	3 
	SECTION 2.3	Form and Payment	3 
	SECTION 2.4	[RESERVED]	4 
	SECTION 2.5	Interest	4 

ARTICLE III

                                            REDEMPTION OF THE SUBORDINATED DEBT SECURITIES 

			
	SECTION 3.1	Tax Event and Investment Company Event Redemption Price	4 
	SECTION 3.2	Optional Redemption	4 
	SECTION 3.3	No Sinking Fund	5 

ARTICLE IV

                           EXTENSION OF INTEREST PAYMENT PERIOD; RESTRICTIONS APPLICABLE
UPON CERTAIN EVENTS 

			
	SECTION 4.1	Extension of Interest Payment Period	5 
	SECTION 4.2	Restrictions Applicable Upon Certain Events	6 

ARTICLE V
                                                              DEFEASANCE 

			
	SECTION 5.1	No Defeasance	7 

ARTICLE VI

                                                      ADDITIONAL EVENT OF DEFAULT 

			
	SECTION 6.1	Additional Event of Default	7 

ARTICLE VII

                                                     SHORTENING OF STATED MATURITY 

			
	SECTION 7.1	No Shortening of Stated Maturity	8 

ARTICLE VIII

                                                  FORM OF SUBORDINATED DEBT SECURITY 

			
	SECTION 8.1	Form of Subordinated Debt Security	8 

ARTICLE IX

                                            ORIGINAL ISSUE OF SUBORDINATED DEBT SECURITIES 

			
	SECTION 9.1	Original Issue of Subordinated Debt Securities	18 

ARTICLE X

                                                             MISCELLANEOUS 

			
	SECTION 10.1	Submission to Jurisdiction; Agent for Service of Process	18 
	SECTION 10.2	Governing Law	18 
	SECTION 10.3	Separability	18 
	SECTION 10.4	Counterparts	19 

ARTICLE XI

                                                   FURTHER MISCELLANOUSE PROVISIONS 

			
	SECTION 11.1	Ratification of Indenture	19 
	SECTION 11.2	Trustee Not Responsible For Recitals, ETC	19 
	SECTION 11.3	Guarantee Agreement and Trust Agreement	19 

        FIRST
SUPPLEMENTAL INDENTURE, dated as of November 14, 2002 (this “First Supplemental
Indenture”), among Everest Reinsurance Holdings, Inc., a Delaware corporation (the
“Corporation”), JPMorgan Chase Bank, as trustee (the “Trustee”), and
solely for the purposes of Section 4.2(b) and Article X hereof, Everest Re Group, Ltd., a
Bermuda company (“Everest Group”). 

        WHEREAS,
the Corporation executed and delivered the Junior Subordinated Indenture dated as of the
date hereof (the “Base Indenture”) to the Trustee to provide for the future
issuance of the Corporation’s junior subordinated debt securities (the
“Securities”), to be issued from time to time in one or more series as might be
determined by the Corporation under the Base Indenture; 

        WHEREAS,
pursuant to the terms of the Base Indenture, the Corporation desires to provide for the
establishment of a new series of its Securities to be known as its 7.85% Junior
Subordinated Debt Securities due November 15, 2032 (the “Subordinated Debt
Securities”) with specific terms and provisions, the form and substance of such
Subordinated Debt Securities and the terms, provisions and conditions thereof to be set
forth as provided in the Base Indenture and this First Supplemental Indenture (together,
the “Indenture”); 

        WHEREAS,
Everest Re Capital Trust, a Delaware statutory trust (the “Trust”), has offered
to the public its 7.85% Preferred Securities (the “Preferred Securities”),
representing undivided beneficial ownership interests in the assets of the Trust, and
proposes to invest the proceeds from such offering, together with the proceeds of the
issuance and sale by the Trust to the Corporation of its 7.85% Common Securities (the
“Common Securities” and together with the Preferred Securities, the “Trust
Securities”), in the Subordinated Debt Securities; 

        WHEREAS,
the Corporation has requested that the Trustee execute and deliver this First Supplemental
Indenture and all requirements necessary to make this First Supplemental Indenture a valid
instrument in accordance with its terms, and to make the Subordinated Debt Securities,
when executed by the Corporation and authenticated and delivered by the Trustee, the valid
obligations of the Corporation, have been done and performed and all acts and things
necessary have been done and performed to make this First Supplemental Indenture
enforceable in accordance with its terms, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects; and 

        WHEREAS,
Everest Group has agreed for good and valuable consideration, the receipt of which is
hereby acknowledge, to be a party to this First Supplemental Indenture solely for the
purposes of Section 4.2(b) and Article X hereof; 

        NOW
THEREFORE, in consideration of the purchase and acceptance of the Subordinated Debt
Securities by the Holders thereof, and for the purpose of setting forth, as provided in
the Indenture, the form and substance of the Subordinated Debt Securities and the terms,
provisions and conditions thereof, the Corporation and Everest Group (solely for the
purposes of Section 4.2(b) and Article X hereof) each covenant and agree with the Trustee
as follows: 

ARTICLE I  

DEFINITIONS 

SECTION 1.1                DEFINITION OF
TERMS. 

          Unless
the context otherwise requires: 

     (a)    
          a term defined in the Base Indenture has the same meaning when used in this
          First Supplemental Indenture; 

     (b)    
          a term defined anywhere in this First Supplemental Indenture has the same
          meaning throughout; 

     (c)    
          the singular includes the plural and vice versa; 

     (d)    
          headings are for convenience of reference only and do not affect interpretation; 

     (e)    
          the following terms have the meanings given to them in the Trust Agreement:
          (i) Administrative Trustee; (ii) Business Day; (iii) Clearing
          Agency; (iv) Delaware Trustee; (v) Guarantee Agreement;
          (vi) Investment Company Event; (vii) Preferred Securities Certificate;
          (viii) Underwriting Agreement; (ix) Property Trustee; and (x)
           Tax Event. 

     (f)    
          the following terms have the meanings given to them in this Section 1.1(f): 

        “Coupon
Rate” shall have the meaning set forth in Section 2.5. 

        “Everest
Group Rights Plan” means a plan of Everest Group providing for the issuance by
Everest Group to all holders of its common shares, par value $0.01 per share, of rights
entitling the holders thereof to subscribe for or purchase shares of any class or series
of capital stock of Everest Group which rights (i) are deemed to be transferred with such
common shares, and (ii) are also issued in respect of future issuances of such common
shares, in each case until the occurrence of a specified event or events. 

        “Extension
Period” shall have the meaning set forth in Section 4.1. 

        “Maturity
Date” shall have the meaning set forth in Section 2.2 

        “Trust
Agreement” means the Amended and Restated Trust Agreement of Everest Re Capital
Trust, a Delaware statutory trust, dated as of the date hereof. 

ARTICLE II  

GENERAL TERMS AND
CONDITIONS OF 

THE SUBORDINATED DEBT
SECURITIES 

 SECTION 2.1                DESIGNATION
AND PRINCIPAL AMOUNT. 

        There
is hereby authorized a series of Securities designated the 7.85% Junior Subordinated Debt
Securities due November 15, 2032 (the “Subordinated Debt Securities”), limited
in aggregate principal amount to Two Hundred Six Million One Hundred Eighty Seven Thousand
Dollars ($206,187,000), or Two Hundred Thirty One Million Nine Hundred Sixty One Thousand
Dollars ($231,961,000) if the Underwriters’ (as defined in the Underwriting
Agreement) over-allotment option pursuant to the Underwriting Agreement is exercised in
full, which amount shall be as set forth in any Corporation Order of the Corporation for
the authentication and delivery of Subordinated Debt Securities pursuant to Section 3.3 of
the Base Indenture. 

SECTION 2.2                MATURITY. 

        The
unpaid principal amount of the Subordinated Debt Securities shall be due and payable on
November 15, 2032 (the “Maturity Date”). 

SECTION 2.3                FORM AND
PAYMENT. 

        Except
as provided in Section 3.5 of the Base Indenture, the Subordinated Debt Securities shall
be issued in fully registered certificated form without interest coupons, bearing
identical terms, registered in the name of the Property Trustee of the Trust on behalf of
the Trust. The form of the Subordinated Debt Securities is set forth in Article VIII
hereof and the terms of such Securities as set forth in such form are incorporated herein
by reference. Principal and interest on the Subordinated Debt Securities issued in
certificated form will be payable, the transfer of such Subordinated Debt Securities will
be registrable and such Subordinated Debt Securities will be exchangeable for Subordinated
Debt Securities bearing identical terms and provisions at the office or agency of the
Trustee; provided, however, that payment of interest may be made at the option of the
Corporation by check mailed to the Holder at such address as shall appear in the Security
Register and as otherwise set forth in the form of Subordinated Debt Securities.
Notwithstanding the foregoing, so long as the Holder of any Subordinated Debt Securities
is the Property Trustee, the payment of the principal of and interest (including
Additional Interest and Additional Sums, if any) on such Subordinated Debt Securities held
by the Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee. In case the Subordinated Debt Securities are issued in
the form of Global Securities in accordance with Section 3.5(e) of the Base Indenture,
unless otherwise designated by the Corporation, the Depositary therefor shall be The
Depository Trust Company. 

SECTION 2.4[RESERVED]

SECTION 2.5                  INTEREST. 

        Each
Subordinated Debt Security will bear interest at the rate of 7.85% per annum (the
“Coupon Rate”) from the original date of issuance until the Maturity Date,
together with Additional Sums, if any, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate compounded quarterly, payable (subject to the
provisions of Article IV herein) quarterly in arrears on February 15, May 15, August 15,
and November 15, of each year (each, an “Interest Payment Date”) commencing on
February 15, 2003 to the Person in whose name such Subordinated Debt Security or any
Predecessor Security is registered, at the close of business on the Regular Record Date
for such interest installment, except as provided in Section 3.8 of the Base Indenture;
provided that no Additional Sums shall accrue or be payable in respect of Subordinated
Debt Securities distributed to holders of Preferred Securities in connection with a
dissolution of the Trust. 

ARTICLE III  

REDEMPTION OF THE
SUBORDINATED DEBT SECURITIES 

SECTION 3.1              Tax Event and Investment Company Event Redemption Price.

        If
a Tax Event or Investment Company Event shall occur and be continuing, and the Corporation
elects, at its option, to redeem the Subordinated Debt Securities in whole (but not in
part) in accordance with Article XI of the Base Indenture, the Redemption Price shall be
equal to the aggregate principal amount of the Subordinated Debt Securities subject to
redemption plus accrued and unpaid interest thereon, including Additional Interest and
Additional Sums, if any, to the date of such redemption; provided that the Redemption
Price of Subordinated Debt Securities redeemed in accordance with Section 3.1 of this
Supplemental Indenture within 90 days of a Tax Event shall not include Additional Sums
arising in respect of such Securities as a result of such Tax Event. 

SECTION 3.2                OPTIONAL
REDEMPTION. 

        On
or after November 14, 2007, the Corporation, at its option, may from time to time redeem
the Subordinated Debt Securities in whole or in part at a Redemption Price equal to the
aggregate principal amount of the Subordinated Debt Securities subject to redemption plus
accrued and unpaid interest thereon, including Additional Interest and Additional Sums, if
any, to the date of such redemption. Payment of the Redemption Price to each Holder of
Subordinated Debt Securities shall be made by the Corporation, no later than 12:00 noon,
New York City time, on the Redemption Date, in the manner set forth in the third paragraph
of the form of Subordinated Debt Securities or so long as the Holder of the Subordinated
Debt Securities is the Property Trustee such payment shall be made at such place and to
such account as may be designated by the Property Trustee. If the Paying Agent (other than
the Corporation) holds in trust immediately available funds sufficient to pay the
Redemption Price of the Subordinated Debt Securities (or, if the Corporation is acting as
Paying Agent and has set aside and segregated in trust such funds or the Property Trustee
has received the Redemption Price), then, on such Redemption Date, such Subordinated Debt
Securities will cease to be Outstanding and interest thereon will cease to accrue, whether
or not such Subordinated Debt Securities have been received by the Paying Agent, and all
other rights of the Holder in respect of the Subordinated Debt Securities shall terminate
and lapse (other than the right to receive the Redemption Price upon delivery of such
Subordinated Debt Securities but without interest on such Redemption Price). 

SECTION 3.3                NO SINKING
FUND. 

        The
Subordinated Debt Securities are not entitled to the benefit of any sinking fund. 

ARTICLE IV  

EXTENSION OF INTEREST
PAYMENT PERIOD; RESTRICTIONS APPLICABLE UPON CERTAIN EVENTS 

SECTION 4.1                EXTENSION OF
INTEREST PAYMENT PERIOD. 

        So
long as no Event of Default has occurred or is continuing under the Indenture, the
Corporation shall have the right, in accordance with Section 3.12 of the Base Indenture,
at any time during the term of the Subordinated Debt Securities, from time to time, to
defer the payment of interest on such Subordinated Debt Securities for a period not
exceeding 20 consecutive quarterly interest payment periods with respect to each such
period, provided that no such period may extend beyond the Maturity Date of the
Subordinated Debt Securities or end on a date other than an Interest Payment Date (each,
an “Extension Period”), during which Extension Periods the Corporation shall
have the right to make no payments or partial payments of interest on any Interest Payment
Date. Prior to the termination of any such Extension Period, the Corporation may further
extend the interest payment period, provided that no Extension Period shall exceed 20
consecutive quarterly interest payment periods or extend beyond the Maturity Date of the
Subordinated Debt Securities or end on a date other than an Interest Payment Date.
Additional Interest will accrue at the Coupon Rate on payments of interest deferred during
the Extension Period. At the end of any such Extension Period the Corporation shall pay
all interest then accrued and unpaid on the Subordinated Debt Securities (together with
Additional Interest thereon at the rate specified for the Subordinated Debt Securities of
such series to the extent permitted by applicable law). Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and Additional
Interest then due on any Interest Payment Date, the Corporation may elect to begin a new
Extension Period, subject to the above conditions, the conditions set forth in the
Subordinated Debt Securities and the applicable conditions set forth in the Indenture. 

SECTION 4.2                RESTRICTIONS
APPLICABLE UPON CERTAIN EVENTS. 

     (a)    
          (i) During any Extension Period, (ii) during the continuance of an Event of
          Default or (iii) during the continuance of an Event of Default under the
          Guarantee Agreement, the Corporation shall not, and shall cause each of its
          Subsidiaries not to (A) declare or pay any dividends or distributions on, or
          redeem, purchase, acquire or make a liquidation payment with respect to, any of
          the Corporation’s capital stock, or (B) make any payment of principal of or
          interest or premium, if any, on or repay, repurchase or redeem any debt
          securities of the Corporation that rank pari passu in all respects with or
          junior in interest to the Subordinated Debt Securities or make any guarantee
          payments with respect to any guarantee by the Corporation of the debt securities
          of any Subsidiary of the Corporation if such guarantee ranks pari passu or
          junior in interest to the Subordinated Debt Securities (other than in the case
          of (A) and (B), (a) repurchases, redemptions or other acquisitions of shares of
          capital stock of the Corporation in connection with any employment contract,
          benefit plan or other similar arrangement with or for the benefit of any one or
          more employees, officers, directors or consultants, in connection with a
          dividend reinvestment or stockholder stock purchase plan or in connection with
          the issuance of capital stock of the Corporation (or securities convertible into
          or exercisable for such capital stock) as consideration in an acquisition
          transaction entered into prior to the applicable Extension Period or Event of
          Default, (b) repurchases, redemptions or other acquisitions as a result of an
          exchange or conversion of any class or series of the Corporation’s capital
          stock (or any capital stock of a Subsidiary of the Corporation) for any class or
          series of the Corporation’s capital stock or of any class or series of the
          Corporation’s indebtedness for any class or series of the
          Corporation’s capital stock, (c) the purchase of fractional interests in
          shares of the Corporation’s capital stock pursuant to the conversion or
          exchange provisions of such capital stock or the security being converted or
          exchanged, (d) any declaration of a dividend in connection with any Rights Plan,
          or the issuance of rights, stock or other property under any Rights Plan, or the
          redemption or repurchase of rights pursuant thereto, or (e) any dividend in the
          form of stock, warrants, options or other rights where the dividend stock or the
          stock issuable upon exercise of such warrants, options or other rights is the
          same stock as that on which the dividend is being paid or ranks pari passu with
          or junior to such stock). 

     (b)    
          During any Extension Period, Everest Group shall not and shall cause its
          Subsidiaries not to declare or pay any dividends or distributions on, or
          redeem, purchase, acquire or make a liquidation payment with respect to, any of
          Everest Group’s capital stock (other than (i) repurchases, redemptions
          or other acquisitions of shares of capital stock of Everest Group in connection
          with any employment contract, benefit plan or other similar arrangement with or
          for the benefit of any one or more employees, officers, directors or
          consultants, in connection with a dividend reinvestment or stockholder stock
          purchase plan or in connection with the issuance of capital stock of Everest
          Group (or securities convertible into or exercisable for such capital stock) as
          consideration in an acquisition transaction entered into prior to the applicable
          Extension Period, (ii) repurchases, redemptions or other acquisitions as a
          result of an exchange or conversion of any class or series of Everest
          Group’s capital stock (or any capital stock of a Subsidiary of Everest
          Group) for any class or series of Everest Group’s capital stock or of any
          class or series of Everest Group’s indebtedness for any class or series of
          Everest Group’s capital stock, (iii) the purchase of fractional
          interests in shares of Everest Group’s capital stock pursuant to the
          conversion or exchange provisions of such capital stock or the security being
          converted or exchanged, (iv) any declaration of a dividend in connection
          with any Everest Group Rights Plan, or the issuance of rights, stock or other
          property under any Everest Group Rights Plan, or the redemption or repurchase of
          rights pursuant thereto, or (v) any dividend in the form of stock,
          warrants, options or other rights where the dividend stock or the stock issuable
          upon exercise of such warrants, options or other rights is the same stock as
          that on which the dividend is being paid or ranks pari passu with or junior to
          such stock). 

ARTICLE V  

DEFEASANCE 

SECTION 5.1                NO DEFEASANCE. 

        The
Subordinated Debt Securities are not subject to defeasance pursuant to Section 13.2 or
13.3 of the Base Indenture. 

ARTICLE VI  

ADDITIONAL EVENT OF
DEFAULT 

SECTION 6.1                ADDITIONAL
EVENT OF DEFAULT. 

        The
following shall be an additional Event of Default under Section 5.1 of the Base Indenture,
which Event of Default shall be solely with respect to the Subordinated Debt Securities: 

        Default
in the performance or breach of Section 4.2(b) of this First Supplemental Indenture and
continuance of such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Corporation by the Trustee or to the Corporation
and the Trustee by the Holders of at least 33% in principal amount of the Outstanding
Subordinated Debt Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a “Notice of
Default” under the Indenture, unless the Trustee, or the Trustee and the Holders of a
principal amount of Subordinated Debt Securities not less than the principal amount of
Subordinated Debt Securities that gave such notice, as the case may be, shall agree in
writing to an extension of such period prior to its expiration; provided, however, that
the Trustee, or the Trustee and the Holders of such principal amount of Subordinated Debt
Securities, as the case may be, shall be deemed to have agreed to an extension of such
period if corrective action is initiated by the Corporation and Everest Group within such
period and is being diligently pursued. 

ARTICLE VII  

SHORTENING OF STATED
MATURITY 

SECTION 7.1                NO SHORTENING
OF STATED MATURITY. 

        The
corporation shall not have the right to shorten the maturity of the Subordinated Debt
Securities pursuant to Section 3.15 of the Base Indenture. 

ARTICLE VIII  

FORM OF SUBORDINATED
DEBT SECURITY 

SECTION 8.1                FORM OF
SUBORDINATED DEBT SECURITY. 

        The
Subordinated Debt Securities and the Trustee’s Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms: 

[FORM OF FACE OF
SUBORDINATED DEBT SECURITY] 

[IF THE SUBORDINATED DEBT SECURITY
IS TO BE A GLOBAL SECURITY, INSERT — THIS SUBORDINATED DEBT SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SUBORDINATED DEBT SECURITY IS
EXCHANGEABLE FOR SUBORDINATED DEBT SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF
THE DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 

        UNLESS
THIS SUBORDINATED DEBT SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY SUBORDINATED DEBT SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.] 

EVEREST REINSURANCE
HOLDINGS, INC. 

7.85% Junior
Subordinated Debt Security due November 15, 2032 

No.                                                                                     $

[CUSIP
No.__________________] 

        EVEREST
REINSURANCE HOLDINGS, INC., a corporation organized and existing under the laws of
Delaware (hereinafter called the “Corporation”, which term includes any
successor Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to [_______________], or registered assigns, the principal sum of
[__________] Dollars on November 15, 2032 [if the Security is a Global Security, then
insert, if applicable — , or such other principal amount represented hereby as may be
set forth in the records of the Securities Registrar hereinafter referred to in accordance
with the Indenture]. The Corporation further promises to pay interest on said principal
sum from November 14, 2002, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears on February 15, May 15, August 15 and November 15 of each year,
commencing February 15, 2003, at the rate of 7.85% per annum, together with
Additional Sums, if any, as provided in Section 10.6 of the Indenture until the principal
hereof is paid or duly provided for or made available for payment; provided, however, that
any overdue principal, premium or Additional Sums and any overdue installment of interest
(whether as a result of the Corporation’s election of an Extension Period or
otherwise) shall bear Additional Interest at the rate of 7.85% per annum (to the extent
that the payment of such interest shall be legally enforceable), compounded quarterly,
from the dates such amounts are due until they are paid or made available for payment;
provided further, that no Additional Sums shall accrue or be payable in respect of
Subordinated Debt Securities distributed to holders of Preferred Securities in connection
with a dissolution of the Trust. The amount of interest payable for any full interest
period will be computed by dividing the rate per annum by four. The amount of interest
payable for any partial interest period shall be computed on the basis of the number of
days elapsed in a 360-day year of twelve 30-day months and the actual number of days
elapsed in a partial month in such period. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the Indenture, be
paid to the Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
installment. Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said Indenture. 

        So
long as no Event of Default has occurred and is continuing, the Corporation shall have the
right, at any time during the term of this Security, from time to time to defer the
payment of interest on this Security for up to 20 consecutive quarterly interest payment
periods with respect to each deferral period (each, an “Extension Period”),
during which Extension Periods the Corporation shall have the right to make no payments or
partial payments of interest on any Interest Payment Date, and at the end of which the
Corporation shall pay all interest then accrued and unpaid including any Additional
Interest, as provided below; provided, however, that no Extension Period shall extend
beyond the Stated Maturity of the principal of this Security and no such Extension Period
may end on a date other than an Interest Payment Date; and provided, further, however,
that (A) during any such Extension Period, (B) during the continuance of an Event of
Default or (C) during the continuance of an Event of Default (as defined in the Guarantee
Agreement described in the Trust Agreement), the Corporation shall not and shall cause
each of its Subsidiaries not to (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of the
Corporation’s capital stock, or (ii) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the Corporation
that rank pari passu in all respects with or junior in interest to this Security or make
any guarantee payments with respect to any guarantee by the Corporation of the debt
securities of any Subsidiary of the Corporation if such guarantee ranks pari passu or
junior in interest to the Securities (other than in the case of (i) and (ii), (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Corporation in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers, directors or
consultants, in connection with a dividend reinvestment or stockholder stock purchase plan
or in connection with the issuance of capital stock of the Corporation (or securities
convertible into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period or Event of Default, (b)
repurchases, redemptions or other acquisitions as a result of an exchange or conversion of
any class or series of the Corporation’s capital stock (or any capital stock of a
Subsidiary of the Corporation) for any class or series of the Corporation’s capital
stock or of any class or series of the Corporation’s indebtedness for any class or
series of the Corporation’s capital stock, (c) the purchase of fractional
interests in shares of the Corporation’s capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any Rights Plan, or the issuance of
rights, stock or other property under any Rights Plan, or the redemption or repurchase of
rights pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the dividend is being
paid or ranks pari passu with or junior to such stock). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of interest,
provided, however, that no Extension Period shall exceed 20 consecutive quarterly interest
payment periods, extend beyond the Stated Maturity of the principal of this Security or
end on a date other than an Interest Payment Date. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and Additional
Interest then due on any Interest Payment Date, the Corporation may elect to begin a new
Extension Period, subject to the above conditions. No interest shall be due and payable
during an Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension shall bear Additional
Interest (to the extent that the payment of such interest shall be legally enforceable) at
the rate of 7.85% per annum, compounded quarterly and calculated as set forth in the first
paragraph of this Security, from the dates on which amounts would otherwise have been due
and payable until paid or made available for payment. The Corporation shall give the
Holder of this Security and the Trustee notice of its election to begin any Extension
Period at least one Business Day prior to the next succeeding Interest Payment Date on
which interest on this Security would be payable but for such deferral or so long as such
Securities are held by Everest Re Capital Trust, at least one Business Day prior to the
earlier of (i) the next succeeding date on which Distributions on the Preferred Securities
of such Issuer Trust would be payable but for such deferral, and (ii) the date on which
the Property Trustee of such Issuer Trust is required to give notice to the New York Stock
Exchange or other applicable self-regulatory agency or to holders of such Preferred
Securities of the record date or the date such Distributions are payable. 

        Payment
of the principal of (and premium, if any) and interest on this Security will be made at
the office or agency of the Corporation maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Corporation payment of interest may be made
(i) by check mailed to the address of the Person entitled thereto as such address shall
appear in the Securities Register, or (ii) by wire transfer in immediately available funds
at such place and to such account as may be designated by the Person entitled thereto as
specified in the Securities Register; provided that the Paying Agent shall have received
satisfactory wire transfer instructions at least five Business Days prior to the
applicable payment date. 

        The
indebtedness evidenced by this Security is, to the extent provided in the Indenture,
subordinate and junior in right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or
her behalf to take such actions as may be necessary or appropriate to effectuate the
subordination so provided, and (c) appoints the Trustee his or her attorney-in-fact for
any and all such purposes. Each Holder hereof, by his or her acceptance hereof, waives all
notice of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions. 

        Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof,
which further provisions shall for all purposes have the same effect as if set forth at
this place. 

        Unless
the certificate of authentication hereon has been executed by the Trustee referred to on
the reverse hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose. 

        IN
WITNESS WHEREOF, the Corporation has caused this instrument to be duly executed under its
corporate seal. 

		
	 	EVEREST REINSURANCE 
	 	HOLDINGS, INC.
	 	 
	 	By:                                            
	 	Name:
	 	Title:
	 	 
	Attest:	 
	 	 
	[Secretary of Assistant Secretary]

	 

[FORM OF REVERSE OF
SUBORDINATED DEBT SECURITY] 

        This
Security is one of a duly authorized issue of securities of the Corporation (herein called
the “Securities”), issued and to be issued in one or more series under the
Junior Subordinated Indenture, dated as of November 14, 2002 between the Corporation
and JPMorgan Chase Bank, as Trustee, as supplemented by the First Supplemental Indenture
thereto dated as of November 14, 2002 (herein collectively called the
“Indenture”), among the Corporation, JPMorgan Chase Bank, as Trustee (herein
called the “Trustee”, which term includes any successor trustee under the
Indenture), and, solely for purposes of Section 4.2(b) and Article X thereof, Everest
Re Group, Ltd., a Bermuda company, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Corporation, the Trustee, the holders of
Senior Indebtedness and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one of the
series designated on the face hereof, limited in aggregate principal amount to
$206,187,000 (or $231,961,000 if the Underwriters’ over-allotment option pursuant to
the Underwriting Agreement is exercised in full). 

        All
terms used in this Security that are defined in the Indenture or in the Amended and
Restated Trust Agreement, dated as of November 14, 2002, (as modified, amended
or supplemented from time to time, the “Trust Agreement”), relating to Everest
Re Capital Trust (the “Issuer Trust”) among the Corporation, as Depositor, the
Trustees named therein and the Holders from time to time of the Trust Securities issued
pursuant thereto, shall have the meanings assigned to them in the Indenture or the Trust
Agreement, as the case may be. 

        The
Corporation may at any time, at its option, on or after November 14, 2007 and subject to
the terms and conditions of Article XI of the Indenture and Article III of said First
Supplemental Indenture, redeem this Security in whole at any time or in part from time to
time, at a Redemption Price equal to 100% of the principal amount hereof, together, in the
case of any such redemption, with accrued interest, including any Additional Interest and
Additional Sums, if any, to but excluding the date fixed for redemption. 

        In
addition, upon the occurrence and during the continuation of a Tax Event or an Investment
Company Event in respect of the Issuer Trust, the Corporation may, at its option, at any
time within 90 days of the occurrence and during the continuation of such Tax Event or
Investment Company Event, as the case may be, redeem this Security, in whole but not in
part, subject to the terms and conditions of Article XI of the Indenture and Article III
of said First Supplemental Indenture, at a redemption price equal to 100% of the principal
amount hereof, together, in the case of any such redemption, with accrued interest,
including any Additional Interest and Additional Sums, if any, to but excluding the date
fixed for redemption. 

        In
the event of redemption of this Security in part only, a new Security or Securities of
this series for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof. 

        The
Indenture permits, with certain exceptions as therein provided, the Corporation and the
Trustee at any time to enter into a supplemental indenture or indentures for the purpose
of modifying in any manner the rights and obligations of the Corporation and of the
Holders of the Securities, with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series to be affected by such
supplemental indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Corporation with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security. 

        As
provided in and subject to the provisions of the Indenture, if an Event of Default with
respect to the Securities of this series at the time Outstanding occurs and is continuing,
then and in every such case the Trustee or the Holders of not less than 33% in aggregate
principal amount of the Outstanding Securities of this series may declare the principal
amount of all the Securities of this series to be due and payable immediately, by a notice
in writing to the Corporation (and to the Trustee if given by Holders); provided, however,
that, if upon an Event of Default, the Trustee or such Holders fail to declare the
principal of all the Outstanding Securities of this series to be immediately due and
payable, the holders of at least 33% in aggregate Liquidation Amount of the Preferred
Securities then Outstanding shall have the right to make such declaration by a notice in
writing to the Corporation and the Trustee; and upon any such declaration the principal
amount of and the accrued interest (including Additional Interest and Additional Sums, if
any) on all the Securities of this series shall become immediately due and payable,
provided, however, that the payment of principal and interest (including Additional
Interest and Additional Sums, if any) on such Securities shall remain subordinated to the
extent provided in Article XIV of the Indenture. 

        No
reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Corporation, which is absolute and
unconditional, to pay the principal of and any premium and interest (including any
Additional Interest) on this Security at the times, place and rate, and in the coin or
currency, herein prescribed. 

        As
provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Securities Register, upon surrender of
this Security for registration of transfer at the office or agency of the Corporation
maintained under Section 10.2 of the Indenture for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Corporation
and the Securities Registrar duly executed by, the Holder hereof or such Holder’s
attorney duly authorized in writing, and thereupon one or more new Securities of this
series, of like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. 

        The
Securities of this series are issuable only in registered form without coupons in
denominations of $25.00 and any integral multiple of $25.00 in excess thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Securities of this
series are exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the Holder
surrendering the same. 

        No
service charge shall be made for any such registration of transfer or exchange, but the
Corporation may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. 

        The
Corporation, the Trustee and any agent of the Corporation or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Corporation, the Trustee nor any
such agent shall be affected by notice to the contrary. 

        The
Corporation and, by its acceptance of this Security or a beneficial interest therein, the
Holder of, and any Person that acquires a beneficial interest in, this Security agree that
for United States Federal, state and local tax purposes it is intended that this Security
constitute indebtedness. 

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

ASSIGNMENT 

        FOR
VALUE RECEIVED, the undersigned assigns and transfers this Subordinated Debt Security to: 

        (Insert
assignee’s social security or tax identification number) 

        (Insert address
and zip code of assignee) 

      and
irrevocably appoints agent to transfer this Subordinated Debt Security on the books of the Securities Registrar. The agent may substitute another to act
for him or her.

		
	Date:          	 
	 	Signature:                                           
		Signature Guarentee:                           

(Sign exactly as your name appears
on the other side of this Subordinated Debt Security) 

SIGNATURE GUARANTEE 

        Signatures
must be guaranteed by an "eligible guarantor institution" meeting the requirements of the
Registrar, which requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended. 

[FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION] 

        This
is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture. 

		
	Date:	 
	 	JPMORGAN CHASE BANK
	 	 
	 	as Trustee
	 	 
		By:                                   
	 	Authorized officer

 

ARTICLE IX  

ORIGINAL ISSUE OF
SUBORDINATED DEBT SECURITIES 

SECTION 9.1                 ORIGINAL ISSUE OF SUBORDINATED DEBT SECURITIES.

        Subordinated
Debt Securities in the aggregate principal amount not to exceed $206,187,000 ($231,961,000
if the Underwriters’ over-allotment option pursuant to the Underwriting Agreement and
the Pricing Agreement, dated November 8, 2002 relating thereto is exercised in full) may,
upon execution of this First Supplemental Indenture, be executed by the Corporation and
delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver said Subordinated Debt Securities in accordance with a Corporation Order,
without any further action by the Corporation. 

ARTICLE X  

MISCELLANEOUS 

SECTION 10.1               SUBMISSION TO JURISDICTION; AGENT FOR SERVICE OF PROCESS.

        Everest
Group hereby submits to jurisdiction in New York State with respect to actions arising out
of or in connection with any suit, action or proceeding based on this First Supplemental
Indenture. Everest Group has the necessary corporate power and authority, and has taken
all corporate action required, to appoint Joseph A. Gervasi, Vice President, General
Counsel and Secretary of Everest Group as agent for the receipt of any service of process
with respect to such actions. 

SECTION 10.2                   GOVERNING
LAW. 

        THIS
FIRST SUPPLEMENTAL INDENTURE AND THE SUBORDINATED DEBT SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF. 

SECTION 10.3                  SEPARABILITY. 

        If
any provision in this First Supplemental Indenture or in the Subordinated Debt Securities
shall be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby and the
Subordinated Debt Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein. 

SECTION 10.4                  COUNTERPARTS. 

        This
First Supplemental Indenture may be executed in any number of counterparts each of which
shall be an original; but such counterparts shall together constitute but one and the same
instrument. 

ARTICLE XI  

FURTHER MISCELLANOUSE
PROVISIONS 

SECTION 11.1                RATIFICATION
OF INDENTURE. 

        The
Base Indenture as supplemented by this First Supplemental Indenture, is in all respects
ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the
Base Indenture in the manner and to the extent herein and therein provided. 

SECTION 11.2                Trustee Not Responsible For Recitals, ETC.

        The
recitals herein contained are made by the Corporation and not by the Trustee, and the
Trustee assumes no responsibility for the correctness thereof and the Trustee makes no
representation as to the validity or sufficiency of this First Supplemental Indenture or
of the Subordinated Debt Securities. 

SECTION 11.3                GUARANTEE
AGREEMENT AND TRUST AGREEMENT. 

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

        [Remainder
of page intentionally left blank.] 

        IN
WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and attested,
all as of the day and year first above written. 

		
		EVEREST REINSURANCE HOLDINGS,
		   INC.
		 
		By:
	 	Name:
	 	Title:
	Attest:	 
	 	Everest Re Group, LTD.
	 	Solely for the purpose of Section 4.2(b)
	 	and Article X hereof
	 	 
	 	By:
	 	Name:
	 	Title:
	Attest:	 
	 	JPMORGAN CHASE BANK
	 	as Trustee and not in its individual capacity
	 	 
	 	By:
	 	Name:
	 	Title
	Attest: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 

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:

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