<PAGE>
                                                                     EXHIBIT 2.1

                                                                  CONFORMED COPY
                                                        (AS AMENDED ON 30.08.02)





                              DATED 15TH JULY 2002








                          CONTINENTAL CASUALTY COMPANY





                                       AND





                                 TAWA UK LIMITED








                            SHARE PURCHASE AGREEMENT


                          for the sale and purchase of
                       the entire issued share capital of


                        CNA RE MANAGEMENT COMPANY LIMITED











                         LEBOEUF, LAMB, GREENE & MACRAE


                   UNITED STATES LAWYERS & ENGLISH SOLICITORS



                                       1
<PAGE>

                                TABLE OF CONTENTS


<Table>
<S>                                                                                                <C>
1.    DEFINITIONS AND INTERPRETATION.................................................................5

2.    SALE AND PURCHASE.............................................................................20

3.    COMPLETION ADJUSTMENTS........................................................................21

4.    CONDITIONS TO COMPLETION......................................................................30

5.    COMPLETION....................................................................................37

6.    SELLER'S WARRANTIES...........................................................................39

7.    REMEDIES FOR BREACH...........................................................................42

8.    LIMITATIONS ON SELLER'S LIABILITY.............................................................43

9.    SELLER'S UNDERTAKINGS.........................................................................49

10.   BUYER'S UNDERTAKINGS..........................................................................55

11.   BUYER'S WARRANTIES............................................................................57

12.   PENSIONS......................................................................................59

13.   NOVATION......................................................................................60

14.   RESTRUCTURING.................................................................................61

15.   GOVERNING LAW AND DISPUTES....................................................................63

16.   MISCELLANEOUS PROVISIONS......................................................................66

   SCHEDULE 1.......................................................................................74

   INFORMATION ABOUT THE TARGET COMPANY AND THE TARGET SUBSIDIARY...................................74

   SCHEDULE 2.......................................................................................74

   ITEMS FOR DELIVERY BY THE SELLER AT COMPLETION...................................................74

   SCHEDULE 3.......................................................................................74

   WARRANTIES.......................................................................................74
</Table>


                                       2
<PAGE>

<Table>
<S>                                                                                                <C>
   SCHEDULE 4......................................................................................74

   ACTION PENDING COMPLETION.......................................................................74

   SCHEDULE 5......................................................................................74

   THE REAL PROPERTIES.............................................................................74

   SCHEDULE 6......................................................................................74

   INTELLECTUAL PROPERTY...........................................................................74

   SCHEDULE 7......................................................................................75

   PART I - COMPLETION ADJUSTMENT..................................................................75

   PART II - WORKED EXAMPLE........................................................................87

   SCHEDULE 8......................................................................................87

   NOVATION AGREEMENT..............................................................................87

   SCHEDULE 9......................................................................................87

   MAC THRESHOLDS - (MAC 4.6 ILLUSTRATION 19_6.XLS)................................................87

   SCHEDULE 10.....................................................................................87

   PENSION SUBSTITUTION DEED.......................................................................87

   SCHEDULE 11.....................................................................................88

   REINSURANCE RECOVERABLES........................................................................88
</Table>


                              AGREED FORM DOCUMENTS

1.      Tax Deed

2.      Management Fee Security Deed

3.      Distribution Security Deed

4.      Stop Loss Contract

5.      Pro Forma Balance Sheet



                                       3
<PAGE>

6.      Management Agreement

7.      Settlement with respect to Allianz Stop Loss from 1999, 2000 and 2001
        accident years

8.      Settlement of 100 per cent quota share for 1987 and prior underwriting
        years

9.      Settlement of aggregate stop loss providing $125,000,000 of cover in
        respect of underwriting years 1997, 1998 and 1999

10.     Commutation of CRG reinsurance facility

11.     Commutation of BU2 reinsurance facility

12.     Retrocession contract in respect of CNA Re (UK) net exposure in respect
        of the IGI portfolio

13.     Agreement with respect to Underwriters Re Stop Loss for 2000 and 2001
        accident years

14.     2002 outwards reinsurance treaty where cover does not survive change of
        control (Swiss Re)

15.     2002 outwards reinsurance treaty where cover does not survive change of
        control (other)

16.     Retrocession contract in respect of CNA Re (UK) net exposure in respect
        of liabilities settled under the PPG settlement agreement

17.     Trade Mark Licence Agreement

18.     Broker Ledger Settlement Deed

19.     IGI Transfer of Balance Agreement



                                       4
<PAGE>

        THIS AGREEMENT is made on 15th July 2002

        BETWEEN:

        (1)     CONTINENTAL CASUALTY COMPANY, a corporation incorporated under
                the laws of the State of Illinois, USA, whose principal place of
                business is at CNA Plaza, 333 South Wabash Avenue, Chicago,
                Illinois 60685, USA (the "SELLER"); and

        (2)     TAWA UK LIMITED, a company incorporated under the laws of
                England and Wales under number 4200676, whose registered office
                is at No.1 Minster Court, Mincing Lane, London EC3R 7AA (the
                "BUYER").

        RECITAL:

        The Seller wishes to sell and the Buyer wishes to purchase the entire
        issued share capital of CNA Re Management Company Limited (the "TARGET
        COMPANY") on the terms and subject to the conditions of this Agreement.

        IT IS AGREED as follows:

1.      DEFINITIONS AND INTERPRETATION

1.1     SPECIFIC DEFINITIONS

        In this Agreement:

        "ACCOUNTS" means each Target Group Company's individual accounts (as
        that term is used in section 226 of the Companies Act) and the Target
        Group's group accounts (as that term is used in section 227 of the
        Companies Act) for the financial year ended on the Last Accounting Date,
        the auditors' reports on those accounts and the directors' report of
        each Target Group Company for that year;

        "ADDITIONAL CONSIDERATION" means the additional consideration referred
        to in Clause 3.5.1;

        "ANNUAL REGULATORY RETURNS" means the returns of the Target Subsidiary
        for the years ended 31 December 2001, 31 December 2000 and 31 December
        1999 together with all exhibits and schedules thereto, as furnished to
        HM Treasury or the FSA, as the case may be, pursuant to the ICA or FSMA,
        as appropriate;

        "ALLIANZ CONTRACT" means the agreement with respect to the Allianz Stop
        Loss Contract from the 1999, 2000 and 2001 accident years in the Agreed
        Form;

        "APPROVED" is defined in paragraph 19.1 of Schedule 3;

        "APPROVED SETTLEMENTS" is defined in Clause 4.6.2(d);



                                       5
<PAGE>

        "ASSUMED REINSURANCE" means reinsurance assumed by the Target Subsidiary
        from any ceding insurer or reinsurer;

        "BUYER'S ADDITIONAL CAPITAL" is defined in Clause 3.1.1(a);

        "BUYER'S SOLICITORS" means LeBoeuf, Lamb, Greene & MacRae of No. 1
        Minster Court, Mincing Lane, London EC3R 7AA;

        "CEDED REINSURANCE" means reinsurance ceded by the Target Subsidiary to
        any reinsurer;

        "CHF" shall mean Swiss Franc;

        "CLOSING F/X ADJUSTMENT" shall mean the sum of (i) the lesser of (a)
        one-half of the Net F/X Losses or (b) one-half of the foreign currency
        loss/gain shown in Ending Foreign Currency Statement and (ii) the Excess
        Net F/X Loss if the Seller has given an undertaking to contribute the
        Excess Net F/X Loss in order to avoid a Material Adverse Change.

        "COMPLETION" means completion of the sale and purchase of the Sale
        Shares in accordance with this Agreement;

        "COMPLETION ACCOUNTS" is defined in Clause 1(b) of Schedule 7;

        "COMPLETION ADJUSTMENT" is defined in Clause 4.2.1 of Schedule 7;

        "COMPLETION BALANCE" is defined in Clause 3.1.1(b);

        "COMPLETION DATE" means the date on which Completion takes place in
        accordance with Clause 5.1;

        "COMPUTER PROGRAMS" means current versions of existing (i) computer
        programs, including all object code, all executables, and all available
        source code, (ii) descriptions, flow-charts and other work product used
        to design, plan, organise and develop any of the foregoing, and (iii)
        documentation, including user manuals and training materials, relating
        to any of the foregoing;

        "CONFIDENTIAL BUSINESS INFORMATION" means all information relating to
        the business written by the Target Subsidiary and all claims arising
        thereunder;

        "CONVERTED REVALUED AMOUNTS" shall mean the aggregate of the negative
        amounts set out against the line "Excess assets over liabilities at
        31/12/01" in Appendix 1 to the First Amendment Letter converted into the
        amounts of their respective Foreign Currencies using the exchange rate
        as at 31 December 2001 set out in Appendix 1 to the First Amendment
        Letter, and then reconverted to a USD amount using the Prescribed
        Exchange Rate;

        "CURRENT USE" means in relation to each Real Property, the use specified
        as the current use of that Real Property in Schedule 5;



                                       6
<PAGE>

        "DATA" means any data or information solely used by or for the sole
        benefit of a Target Group Company at any time and stored electronically
        at any time;

        "DATA ROOM" means the forty seven files of documents and information
        relating to the Target Group identified as such and initialled by the
        parties for identification on the front of each such file and the index
        of such files also initialled by the parties for identification

        "DEFAULTING PARTY" is defined in Clause 7.1;

        "DISCLOSED SCHEME" is defined in paragraph 19.1 of Schedule 3;

        "DISCLOSURE LETTER" means the letter from the Seller to the Buyer in
        relation to the Warranties having the same date as this Agreement;

        "DISTRIBUTIONS" means:

        (a)     all profits of the Target Subsidiary available for distribution
                and resolved to be distributed in accordance with applicable
                laws and any required approvals of the relevant authorities; and

        (b)     all repayments of capital (including reductions which result in
                repayments of capital) of the Target Subsidiary and all
                repurchases of shares by the Target Subsidiary made in
                accordance with applicable laws and any required approvals of
                the relevant authorities and, if necessary, sanctioned by a
                court;

        "DISTRIBUTION SECURITY" means the security deed in the Agreed Form
        pursuant to which the Buyer grants the Seller a first charge over the
        Sale Shares;

        "DKK" shall mean Danish Krone;

        "EMPLOYEE" is defined in paragraph 19.1 of Schedule 3;

        "ENDING FOREIGN CURRENCY STATEMENT" shall mean the statement referred to
        in paragraph 4.1 of Schedule 4;

        "ESCROW AMOUNT" is defined in Clause 3.8.1(a);

        "ESTIMATED COMPLETION ADJUSTMENT" means the amount which the Completion
        Adjustment would be if the criteria in paragraph 4 of Schedule 7 were
        applied on the last day of the month preceding the delivery of the
        calculation pursuant to Clause 4.4.1;

        "EUR" shall mean Euros;

        "EXCESS NET F/X LOSS" shall mean the amount of the Net F/X Losses in
        excess of $40 million ($40,000,000);



                                       7
<PAGE>

        "FIRST AMENDMENT LETTER" shall mean the letter between the Buyer and the
        Seller dated 30 August 2002 amending this Agreement;

        "FOREIGN CURRENCY" shall mean a currency other than USD displayed in
        Appendix 1 of the First Amendment Letter;

        "GBP" shall mean pounds Sterling;

        "HARDWARE" means any computer equipment owned by and solely used by or
        for the sole benefit of a Target Group Company at any time including,
        without limitation, PCs, servers, mainframes, screens, terminals,
        keyboards, disks, printers, cabling, associated and peripheral
        electronic equipment but excluding all Computer Programs;

        "IGI RETROCESSION" means the Aggregate Retrocession Agreement of the IGI
        Loss Portfolio in the Agreed Form;

        "INITIAL CONSIDERATION" means the initial consideration referred to in
        Clause 2.2.2;

        "INSURANCE CONTRACT" means any contract by which a person has provided
        insurance to another person;

        "INVESTED ASSETS" means transferable shares and other transferable
        variable yield securities and transferable units in unit trusts,
        transferable debt securities and other transferable fixed income
        securities;

        "INVESTMENT INCOME ADJUSTMENT" is defined in Clause 3.1.1(d);

        "INVESTMENT INCOME DEDUCTION" is defined in Clause 3.1.1(c);

        "INVESTMENT POLICIES" means the overall investment policies used in the
        management of a person's investment portfolio, including policies with
        respect to duration, liquidity, currency, asset allocation and asset
        quality;

        "KEY EMPLOYEES" means Cathy Pierce, Debra Lynn McClenahan, Ralph Richard
        Mueller and Marcia Munn provided that such persons are employed by the
        Seller or one of its Affiliates at the time that their services are
        required under this Agreement, and such other persons as may be agreed
        between the Buyer and the Seller from time to time;

        "LAST ACCOUNTING DATE" means 31 December 2001;

        "LEASE" is defined in paragraph 11.9 of Schedule 3;

        "LICENSED COMPUTER PROGRAMS" shall have the meaning given in paragraph
        7.4.2(b) of Schedule 3;

        "LOSS CALCULATION" means the adjustment for any loss which would be
        recognised if the criteria in paragraph 5.2(e)(ii) of Schedule 7 were
        applied on the last day of the month preceding the delivery of the
        calculation pursuant to Clause 4.5;



                                       8
<PAGE>

        "LOSS TERMINATION NOTICE" is defined in Clause 4.5.2;

        "MAC MANAGEMENT ACCOUNTS" is defined in Clause 4.6.2;

        "MAJOR CLAIM" means any Relevant Claim or a claim for a breach of Clause
        6.4(a) which exceeds $6,000,000 (six million dollars);

        "MANAGEMENT ACCOUNTS" means the Target Group's unaudited profit and loss
        account for the period starting on the day after the Last Accounting
        Date and ending on, and the Target Group's unaudited balance sheet as
        at, 31 March 2002;

        "MANAGEMENT AGREEMENT" means the agreement in the Agreed Form to be
        entered into between the Manager, the Target Company and the Target
        Subsidiary for the management of the run off of the Target Subsidiary;

        "MANAGEMENT AGREEMENT VARIATION" is defined in Clause 3.11.1;

        "MANAGEMENT FEE" means the gross amount of all payments (whether in
        respect of fees, charges, interest, costs, disbursements or howsoever
        otherwise characterised) made by the Target Subsidiary to the Manager,
        the Target Company or any Affiliate of the Buyer whether pursuant to the
        Management Agreement or any other agreement or arrangement whatsoever
        including fees due to the Manager pursuant to paragraph 1.1 of Schedule
        2 to the Management Agreement but excluding:

                (i)     third party costs and expenses incurred by the Target
                        Subsidiary in accordance with paragraph 3.1 of Schedule
                        2 to the Management Agreement provided that such costs
                        and expenses have been necessarily and properly incurred
                        and in the case of Affiliates are at rates no less
                        favourable to the Target Subsidiary than arms-length
                        rates;

                (ii)    costs necessarily and properly incurred by the Target
                        Company in providing services pursuant to the Management
                        Agreement and reimbursable by the Target Subsidiary to
                        the Target Company pursuant to paragraph 1.1 of Schedule
                        3 to the Management Agreement, provided that such costs
                        are at commercially reasonable rates;

                (iii)   any fees and expenses paid by the Target Subsidiary to
                        an Affiliate in respect of services (including legal
                        services) falling outside the scope of the Management
                        Agreement and which are necessarily and properly
                        incurred by the Target Subsidiary at rates no less
                        favourable to the Target Subsidiary than: (a)
                        arms-length rates; or (b) inter company rates charged
                        for similar services to other Affiliates of the Buyer
                        and provided such rates are commercially reasonable;

                (iv)    any amounts due under the VATA; and

                (v)     Distributions made by the Target Subsidiary, including
                        distributions as are otherwise made to the shareholders
                        of the Target Subsidiary, whether of



                                       9
<PAGE>
                        profits or capital, made by any unlawful means
                        (including pursuant to a members' voluntary winding-up).


        For the purposes of this definition, "AFFILIATE" includes any associated
        undertaking of the Buyer or any holding company of the Buyer;

        "MANAGEMENT FEE SECURITY" means the security deed in the Agreed Form
        pursuant to which the Manager assigns by way of security to the Seller,
        and grants the Seller a first charge over, certain of its rights to
        payment of the Management Fee;

        "MANAGER" means Tawa Management Limited;

        "MARK TO MARKET" is defined in paragraph 1(c) of Schedule 7;

        "MATERIAL ADVERSE CHANGE" means either:

        (a)     any material adverse change in the business, operations, assets,
                liabilities or financial condition of the Target Group Companies
                taken as a whole but excluding:

                (i)     any adverse change or effect that is caused by or that
                        arises out of conditions affecting the economy or
                        financial, banking, currency or capital markets in
                        general; and

                (ii)    any adverse change or effect that is caused by or that
                        arises out of an event or conditions affecting the
                        insurance and reinsurance industry generally unless that
                        adverse change or effect falls outside paragraph (i) and
                        materially impairs the ability of the Seller or any of
                        the Seller's Affiliates or any other reinsurer of the
                        Target Subsidiary which individually represents 5% or
                        more of the reinsurers' share of the Target Subsidiary's
                        technical provisions as at the Last Accounting Date to
                        fulfill its obligations in respect of reinsurance
                        contracts ceded by the Target Subsidiary and remaining
                        in force at Completion; and

                (iii)   any adverse change or effect resulting from the proposal
                        or announcement of the transaction as contemplated by
                        this Agreement; or

        (b)     a material adverse change having been deemed to have occurred in
                accordance with Clause 4.6; or

        (c)     where (i) the Net F/X Losses exceed $40 million and (ii) the
                Seller has not, within two business days of the determination of
                the Net F/X Losses, given an irrevocable undertaking to
                contribute the Net F/X Losses in excess of $40 million
                ($40,000,000) as provided by Schedule 4;

        "NET F/X LOSSES" shall mean the aggregate of (i) the Converted Revalued
        Amounts, (ii) the Net Settled Gains and Losses and (iii) the Option Fee;


                                       10
<PAGE>

        "NET SETTLED GAINS AND LOSSES" shall mean USD 1,501,175 or such other
        figure as the parties shall agree in respect of the lines "Other forex
        gains" and "Forex sales in 2002" in Appendix 1 of the First Amendment
        Letter;

        "NET SETTLEMENTS" is defined in Clause 4.6.3;

        "NEW BUYER" is defined in Clause 13.1;

        "NEWCO" is defined in Clause 14.1.1;

        "NOK" shall mean Norway Krone;

        "NON DEFAULTING PARTY" is defined in Clause 7.1;

        "NON-UK PENSION ARRANGEMENT" is defined in paragraph 19.1 of Schedule 3;

        "OPTION FEE" shall mean the fee, if any, paid by the Target Subsidiary
        on option contracts comprised in the Hedge Transactions;

        "OUTSTANDING COMPLETION BALANCE" is defined in Clause 3.1.1(e);

        "OWNER" means in relation to each Real Property, the company that is
        named as the owner in Schedule 5;

        "PAYMENT AMOUNT" is defined in Clause 3.1.1(f);

        "PAST SUBSIDIARIES" means CNA Underwriting Agencies Limited, CNA
        Corporate Capital Limited and London Market Reinsurance Services
        Limited;

        "PERMIT" means a permit, licence, consent, approval, certificate,
        qualification, specification, registration or other authorisation, or a
        filing of a notification, report or assessment, necessary in any
        jurisdiction for the effective operation of a Target Group Company's
        business, its ownership, possession, occupation or use of an asset or
        its execution or performance of this Agreement;

        "POLICIES" is defined in paragraph 10.1 of Schedule 3;

        "POST-COMPLETION 1987 AND PRIOR AMOUNTS" is defined in Clause 3.13.1(b);

        "POST-COMPLETION OTHER AMOUNTS" is defined in Clause 3.1.1(h);

        "PRE-COMPLETION 1987 AND PRIOR AMOUNTS" is defined in Clause 3.13.1(a);

        "PRE-COMPLETION OTHER AMOUNTS" is defined in Clause 3.1.1(g);

        "PRE-CONTRACT AGREEMENTS" means the letter of intent dated 15 March 2002
        between the Seller and the Buyer, the confidentiality agreement dated 12
        October 2001 between the Seller and the Buyer and the exclusivity
        agreement (and each extension thereto), dated 29 January 2002 between
        the Seller and the Buyer;



                                       11
<PAGE>

        "PRESCRIBED EXCHANGE RATE" shall mean:

                (i)     for GBP and EUR, the weighted average strike value of
                        the Hedge Transactions for that Foreign Currency; or

                (ii)    for other Foreign Currencies, the foreign exchange rate
                        against USD provided by Bloomberg on the historical
                        pricing screen on the date the last Hedge Transaction is
                        effected;

        "PRO FORMA BALANCE SHEET" means the pro forma balance sheet for the
        Target Group Companies in the Agreed Form;

        "REAL PROPERTY" means the property or properties details of which are
        set out in Schedule 5 and includes an individual property and a part of
        an individual property but for the purposes of paragraphs 11.2 to 11.9
        of Schedule 3, means only the properties at the London Underwriting
        Centre and the Corn Exchange London;

        "REINSURANCE CONTRACT" means any contract, treaty or associated trust
        agreement, by which a person has provided reinsurance to any ceding
        insurer;

        "REINSURANCE RECOVERABLES" is defined in Clause 3.1.1(i);

        "RELEVANT CLAIM" means a claim by the Buyer in respect of a breach of
        Clause 6.1;

        "RELEVANT CONTRACT" is defined in paragraph 8.1.1 of Schedule 3;

        "RELEVANT F/X PERIOD" shall mean the period from 1 January 2002 to 6
        January 2003 inclusive, or, if any of the Hedge Transactions are
        terminated prior to 31 December 2002 without the Seller's written
        consent, the period from 1 January 2002 to the date three days after the
        date of the first such termination;

        "RELEVANT MONTH END" is defined in Clause 4.6.1;

        "RELEVANT PERCENTAGE" is defined in Clause 3.1.1(j);

        "RELEVANT PERIOD" means (i) the period from the Completion Date to the
        last day of the Quarter in which the Completion Date occurs, inclusive
        of each date; and (ii) each subsequent Quarter;

        "RESTRUCTURING" is defined in Clause 14.1;

        "RETROCESSION CONTRACT" means any contract, treaty or associated trust
        agreement, by which any person has reinsured a Reinsurance Contract;

        "SALE SHARES" means 332,067,741 fully-paid ordinary shares of Pound
        Sterling 1.00 each of the Target Company comprising the whole of the
        issued share capital of the Target Company;



                                       12
<PAGE>

        "SECTION 107 TAX LOSSES" means the reduction in tax losses attributable
        to the making of an election by the Target Subsidiary under Section 107
        of the Finance Act 2000;

        "SEK" shall mean Swedish Krona;

        "SELLER'S ADDITIONAL CAPITAL" is defined in Clause 3.1.1(k);

        "SELLER'S SCHEME" is defined in Clause 19.1 of Schedule 3;

        "SELLER'S SOLICITORS" means Lovells of 65 Holborn Viaduct, London EC1A
        2DY;

        "SHRINK WRAP COMPUTER PROGRAMS" shall have the meaning given in
        paragraph 7.4.2(c) of Schedule 3;

        "STAKEHOLDER" is defined in Clause 3.7.1;

        "STOP LOSS CONTRACT" means the stop loss contract between the Seller and
        the Target Subsidiary in the Agreed Form;

        "SUBSCRIPTION AMOUNT" is defined in Clause 3.1.1(l);

        "TARGET COMPANY" means CNA Re Management Company Limited, a company
        incorporated in England and Wales (registered number 1681059), whose
        registered office is at Corn Exchange, Mark Lane, London EC3R 7NE;

        "TARGET GROUP" means the Target Company and the Target Subsidiary;

        "TARGET GROUP COMPANY" means the Target Company or the Target
        Subsidiary;

        "TARGET SUBSIDIARY" means CNA Reinsurance Company Limited, a company
        incorporated in England and Wales (registered number 1086556), whose
        registered office is at Corn Exchange, Mark Lane, London EC3R 7NE;

        "TAX AUTHORITY" is defined in the Tax Deed;

        "TAX DEED" means the tax deed between the Seller and the Buyer in the
        Agreed Form;

        "TERMINATION NOTICE" is defined in Clause 4.4.2;

        "TERMINATION OBJECTION NOTICE" is defined in Clause 4.4.3;

        "THRESHOLD AMOUNT" is defined in Clause 3.1.1(m);

        "TOTAL CASH FLOW" is defined in Clause 4.6.2(a);

        "TOTAL SETTLEMENTS" is defined in Clause 4.6.2(b);

        "TRIGGER DISTRIBUTIONS" means Distributions (and distributions as are
        otherwise made to the shareholders of the Target Subsidiary, whether of
        profits or capital, made by any



                                       13
<PAGE>

        lawful means, including pursuant to a members' voluntary winding-up)
        which have actually been received by the Target Company and are either:

        (i)     paid by the Target Company to the Buyer; or

        (ii)    legally capable of being paid by the Target Company to the Buyer
                and which the Target Company has resolved to distribute in
                accordance with Clause 10.1;

        "UNDERWRITERS RE CONTRACT" means the Agreement with respect to the
        Underwriters Re Stop Loss Contract from the 2000 and 2001 accident years
        in the Agreed Form;

        "USD" shall mean United States Dollars;

        "W" is defined in Clause 3.1.1(n);

        "WARRANTY" means a statement contained in Schedule 3; and

        "WTC SETTLEMENTS" is defined in Clause 4.6.2(c).

1.2     GENERAL DEFINITIONS

        In this Agreement:

        "AFFILIATE" means, in relation to a company:

        (a)     a company which is, on or after the date of this Agreement, its
                subsidiary or holding company, or a subsidiary of such holding
                company; and

        (b)     an undertaking which is, on or after the date of this Agreement,
                its subsidiary undertaking or parent undertaking, or a
                subsidiary undertaking of such parent undertaking;

        an "AGREED FORM" document means the form of the document most recently
        agreed by the parties and initialled and dated by them for
        identification on or prior to the date of this Agreement;

        "THIS AGREEMENT" means this agreement together with all its recitals and
        its Schedules;

        "BUSINESS DAY" means a day (other than a Saturday and a Sunday) on which
        banks generally are open for business in London and Chicago, and (if the
        phrase is used in the context of a reference to a day on which the
        payment or purchase of any sum in any currency is due) in the principal
        financial centre of the country of such currency;

        "COMPANIES ACT" means the Companies Act 1985;



                                       14
<PAGE>

        "COMPANIES ACTS" means the Companies Act 1985, the Companies
        Consolidation (Consequential Provisions) Act 1985, the Companies Act
        1989 and Part V of the Criminal Justice Act 1993;

        "CONTROLLING INTEREST" means, with respect to a person that is a
        corporation having voting securities, the beneficial ownership, directly
        or indirectly, of more than 50 per cent of the voting securities of such
        person or, with respect to a person that is not such a corporation, the
        power to direct the management or policies of such person, whether by
        operation of law, by contract or otherwise;

        "CREDIT INSTITUTION" has the meaning attributed to it in section 262(1)
        of the Companies Act;

        "CRTP ACT" is defined in Clause 16.12.3;

        "DAY" means a period of 24 hours beginning and ending on 00.00 midnight;

        "DISPUTE" means a dispute between the parties under, arising out of or
        in connection with this Agreement, including any question regarding its
        existence, validity or termination;

        "$" and "DOLLARS" denote the lawful currency of the United States of
        America;

        "ENCUMBRANCE" means a mortgage, charge, pledge, lien or other
        encumbrance securing any obligation of any person or any other type of
        preferential arrangement (including title transfer and retention
        arrangements) having a similar effect;

        "ERA" means Employment Rights Act 1996;

        "EXPERT" means an independent firm of chartered accountants or
        consulting actuaries agreed upon by the parties or (failing agreement)
        selected (at the instance of either party) by, in the case of a firm of
        chartered accountants, the President for the time being of the Institute
        of Chartered Accountants for England and Wales, and in the case of a
        firm of consulting actuaries, the President for the time being of the
        Institute of Actuaries;

        "FSA" means the Financial Services Authority;

        "FSMA" means the Financial Services and Markets Act 2000;

        "HOLDING COMPANY" is as defined in section 736 of the Companies Act;

        "ICA" means the Insurance Companies Act 1982;

        "INDEBTEDNESS" means and includes any obligation (whether incurred as
        principal or surety) for the payment or repayment of money, whether
        present or future, actual or contingent;



                                       15
<PAGE>

        "INSURANCE REGULATIONS" means any regulations, orders or rules made
        pursuant to the Companies Act, ICA or FSMA in each case insofar as they
        apply to insurance companies or the carrying on of insurance business;

        "IPT" means insurance premium tax;

        "LIBOR" means, in respect of each Relevant Period, the rate per annum
        equal to the arithmetic mean (rounded upwards, if not already such a
        multiple, to the nearest whole multiple of one-sixteenth per cent.) of
        the average of the offered quotations of the Reference Banks, which
        appear on the relevant page (as defined in Clause 1.3.3) for a 12 month
        period at or about 11.00 am on the second business day before the first
        day of such Relevant Period;

        "MONTH" means a calendar month;

        "PART IV PERMISSION" means permission to carry on one or more regulated
        activities pursuant to Part IV of FSMA;

        "PAYMENT ACCOUNT DETAILS" means, in relation to any payment to be made
        under or pursuant to this Agreement, the same account number, sort code,
        account location and other details specified by the payee and necessary
        to effect payment (whether by cheque, bankers draft, telegraphic or
        other electronic means of transfer) to the payee;

        "PARENT UNDERTAKING" shall be construed in accordance with section 258
        of the Companies Act;

        "PARTY" means, subject to any express contrary indication, a party to
        this Agreement;

        "PERSON" means any person, firm, company, corporation, society, trust,
        government, state or agency of a state or any association or partnership
        (whether or not having separate legal personality) or two or more of
        these;

        "PROCEEDINGS" means any suit, action or proceedings arising out of or in
        connection with this Agreement;

        "QUARTER" means each period of three months commencing on 1 January, 1
        April, 1 July and 1 October in each year;

        "REFERENCE BANKS" means the relevant principal offices of the National
        Westminster Bank Plc, Barclays Bank PLC and HSBC Bank plc (or such other
        bank or banks as the parties may from time to time select with the
        approval of the other party, such approval not to be unreasonably
        withheld, conditioned or delayed), provided that, if any Reference Bank
        does not give a quotation required at the time relevant for the purposes
        of calculating any exchange rate or interest rate hereunder, then such
        exchange rate or, as the case may be, interest rate shall be determined
        by reference to the quotations which are so given by the remaining
        Reference Banks;

        "REFERENCE EXCHANGE RATE" means the average of the quotations given, at
        approximately 11:00 hours time 2 business days before the relevant date,
        by the



                                       16
<PAGE>

        Reference Banks for the rate (including all commission, charges, fees
        and expenses payable) at which each of them would sell the first
        currency (as defined in Clause 1.3.1(j)) in exchange for the second
        currency (as defined in Clause 1.3.1(j)) on the relevant date, in the
        relevant amount;

        "SERVICE DOCUMENT" means a writ, application, claim, summons, petition,
        order, award, judgment or other document relating to any Proceedings;

        "POUND STERLING" and "STERLING" denote the lawful currency of the United
        Kingdom;

        "SUBSIDIARY" is as defined in section 736 of the Companies Act;

        "SUBSIDIARY UNDERTAKING" shall be construed in accordance with section
        258 of the Companies Act;

        "TAX" and "TAXATION" each mean any form of tax or taxation as contained
        in the definition of "Taxation" in the Tax Deed;

        "TAXES ACT" means the Income and Corporation Taxes Act 1988;

        "TCGA" means the Taxation of Chargeable Gains Act 1992;

        "TRADE UNION" is as defined in section 1 TULRCA;

        "TULRCA" means the Trade Union and Labour Relations (Consolidation) Act
        1992;

        "TUPE" means the Transfer of Undertakings (Protection of Employment)
        Regulations 1981;

        "VATA" means, in the United Kingdom, the Value Added Tax Act 1994 and,
        in a jurisdiction outside the United Kingdom, any equivalent
        legislation; and

        "WEEK" means a period of 7 consecutive days from a defined date.

1.3     INTERPRETATION

1.3.1   In this Agreement, subject to any express contrary indication:

        (a)     words (including the definitions in Clauses 1.1 and 1.2)
                importing the singular shall include the plural and vice versa;

        (b)     any reference to a person shall be construed as including a
                reference to its successors, permitted transferees and permitted
                assignees in accordance with their respective interests;

        (c)     any reference to this Agreement or any other agreement or
                document shall be construed as a reference to that agreement or
                document as it may have been, or may from time to time be,
                amended, varied, novated, replaced or supplemented;



                                       17
<PAGE>

        (d)     any reference to a "CLAUSE" shall be construed as a reference to
                a Clause of this Agreement;

        (e)     "INCLUDE" and "INCLUDING" shall be construed without limitation
                and general words shall not be given a restrictive meaning by
                reason of the fact that they are followed by particular examples
                intended to be embraced by the general words;

        (f)     any references to "IN WRITING" shall include any modes of
                reproducing words in a legible and non-transitory form;

        (g)     any reference to a "PARAGRAPH" shall be construed as a reference
                to a paragraph of the Schedule in which such reference appears;

        (h)     any reference to a "SCHEDULE" shall be construed as a reference
                to a Schedule to this Agreement;

        (i)     any reference to a statute or enactment shall be construed as a
                reference to such statute as it may have been, or may from time
                to time be, amended or re-enacted and any subordinate
                legislation made or thing done, or may from time to time be
                done, under the statute or enactment;

        (j)     any reference to the "EQUIVALENT" on any given date in any
                currency (the "FIRST CURRENCY") of an amount denominated in
                another currency (the "SECOND CURRENCY") is a reference to the
                amount of the second currency which could be purchased with the
                amount of the first currency at the Reference Exchange Rate;

        (k)     any reference to any English legal term for any action, remedy,
                method of judicial proceeding, legal document, legal status,
                court, official, or any legal concept or thing shall in respect
                of any jurisdiction other than England be deemed to include what
                most nearly approximates in that jurisdiction to the English
                legal term;

        (l)     references to times of day are to London time; and

        (m)     where any of the Warranties is qualified by the expression "so
                far as the Seller is aware" or any other similar expression in
                determining whether the Seller has the knowledge referred to in
                that Warranty it shall be treated as knowing only those matters
                that are known to any of its directors or to the following
                persons: Debra McClenahan, Ralph Richard Mueller, Cathy Pierce,
                Marcia Munn, Kenneth S. De Vries, Edward J. Lavin, Dennis R.
                Hemme, Stephen Baxter and Ron Swanstrom.

1.3.2   Tables of contents and all headings in this Agreement are for ease of
        reference only and shall not affect the interpretation of this
        Agreement.

1.3.3   For the purposes of the definition of LIBOR "RELEVANT PAGE" means the
        page of the Reuters Monitor Rates Service designated for the display of
        London Interbank Offered Rates for the currency of the relevant amount
        (being currently "LIBO" in the case of Dollars) or, if such page or such
        service ceases to be available, such other page or such



                                       18
<PAGE>

        other service (as the case may be) for the purpose of displaying London
        Interbank Offered Rates for such currency as the parties may agree or,
        in the absence of agreement, as the Expert, after consultation with the
        parties shall, on the application of either party, select.



                                       19
<PAGE>

2.      SALE AND PURCHASE

2.1     AGREEMENT TO SELL THE SALE SHARES

2.1.1   The Seller agrees to sell with full title guarantee and the Buyer agrees
        to buy the Sale Shares and all rights attaching or accruing to the Sale
        Shares (including the right to receive all dividends, distributions or
        any return on capital declared, paid or made by the Target Company) at
        or after the date of this Agreement, free of any encumbrance.

2.1.2   The Seller waives all rights of pre-emption over any of the Sale Shares
        conferred on it by the articles of association of the Target Company or
        in any other way and undertakes to take, and procure the taking of, all
        steps necessary to ensure that any rights of pre-emption are waived.

2.2     PURCHASE PRICE

2.2.1   The purchase price of the Sale Shares shall be the aggregate of the
        Initial Consideration and, if any, the Additional Consideration.

2.2.2   The Initial Consideration shall be $1.00 payable on Completion to the
        Seller in the manner prescribed by Clause 5.3(a).

2.2.3   The Additional Consideration (if any) shall be calculated in accordance
        with Clause 3.2 or Clause 3.3.3 or Clause 2A.3(2) of the Tax Deed (as
        appropriate) and be payable in accordance with Clause 3.6 provided that
        the Additional Consideration and any interest thereon shall not exceed
        $118,999,999 (one hundred and eighteen million, nine hundred and ninety
        nine thousand and nine hundred and ninety nine dollars).

2.3     STAMP DUTY

2.3.1   The Seller shall pay any stamp duty in respect of the transfer of the
        Sale Shares to the Buyer.

2.3.2   At Completion, the Seller shall retain the executed transfer(s) in
        respect of the Sale Shares to the Buyer or its nominee(s). The Seller
        undertakes that it shall within 10 business days of execution of the
        transfer(s) of the Sale Shares apply for adjudication for stamp duty in
        respect of the transfer(s). The Seller undertakes to discharge promptly
        any stamp duty payable in respect of the transfer(s) and to deliver to
        the Buyer the duly stamped transfer(s) on receipt of the same from the
        Stamp Office.

2.3.3   The Seller shall have conduct of the application for adjudication in
        respect of stamp duty on the transfer(s) of the Sale Shares and in
        respect of any dispute in relation to such application subject to
        considering any reasonable comments or requests of the Buyer. The Seller
        shall provide copies of all correspondence with the Inland Revenue in
        relation to the application and any related dispute to the Buyer. The
        Buyer shall provide the Seller (at Seller's cost) with such assistance
        as may be reasonably required for the purposes of the application and
        any related dispute.



                                       20
<PAGE>

3.      COMPLETION ADJUSTMENTS

3.1     DEFINITIONS

3.1.1   For the purposes of this Clause 3, the following definitions shall
        apply:

        (a)     "BUYER'S ADDITIONAL CAPITAL" means any ordinary shares which may
                be required to be subscribed by the Buyer pursuant to Clause
                3.2;

        (b)     "COMPLETION BALANCE" means the amount by which the Completion
                Adjustment is greater than zero;

        (c)     "INVESTMENT INCOME DEDUCTION" means the amount by which the
                Investment Income Adjustment is greater than $15,000,000
                (fifteen million dollars);

        (d)     "INVESTMENT INCOME ADJUSTMENT" means Investment Income (as
                defined in paragraph 4.2.2(a) of Schedule 7) less Administrative
                Expenses (as defined in paragraph 4.2.2(b) of Schedule 7) taken
                into account in the Completion Accounts;

        (e)     "OUTSTANDING COMPLETION BALANCE" means, at any point in time:

                (i)     the Completion Balance which has not been paid by the
                        Buyer to the Seller under Clause 3.3.3; plus

                (ii)    interest which has been accrued at that time in
                        accordance with Clause 3.5.1 (if any); plus

                (iii)   any amount outstanding from the Buyer to the Seller
                        pursuant to clause 2A.3(2) of the Tax Deed; plus

                (iv)    the aggregate Post-Completion Other Amounts to be
                        included pursuant to clause 3.4; plus

                (v)     the amount of any net gain shown in the Closing F/X
                        Adjustment;

        (f)     "PAYMENT AMOUNT" means the amount by which the Investment Income
                Adjustment is greater than $27,000,000 (twenty seven million
                dollars);

        (g)     "PRE-COMPLETION OTHER AMOUNTS" means the amount of Reinsurance
                Recoverables arising in relation to underwriting years 1988 and
                subsequent received by the Target Subsidiary prior to or on the
                Completion Date;

        (h)     "POST-COMPLETION OTHER AMOUNTS" means:

                (i)     100 per cent. of the amount of any Reinsurance
                        Recoverables arising in relation to underwriting years
                        1988 and subsequent, where the reinsurer is the Seller
                        or an Affiliate of the Seller, which is received by the
                        Target Subsidiary after the Completion Date; and



                                       21
<PAGE>

                (ii)    90 per cent. of the amount of any Reinsurance
                        Recoverables arising in relation to underwriting years
                        1988 and subsequent, where the reinsurer is an entity
                        other than the Seller or an Affiliate of the Seller,
                        which is received by the Target Subsidiary after the
                        Completion Date;

        (i)     "REINSURANCE RECOVERABLES" means any amount recoverable from a
                reinsurer as a result of corrections to the Senator proportional
                reinsurance module included in Schedule 11;

        (j)     "RELEVANT PERCENTAGE" means:

                        (i)     80 per cent., to the extent that the Buyer has
                                not yet paid to the Seller at least $25,000,000
                                (twenty-five million dollars) of the principal
                                of the Completion Balance; or

                        (ii)    50 per cent., to the extent that the Buyer has
                                paid to the Seller $25,000,000 (twenty-five
                                million dollars) or more of the principal of the
                                Completion Balance;

        (k)     "SELLER'S ADDITIONAL CAPITAL" is defined in Clause 3.3.2(a);

        (l)     "SUBSCRIPTION AMOUNT" means $25,000,000 (twenty five million
                dollars), less the Pre-Completion Other Amounts;

        (m)     "THRESHOLD AMOUNT" shall be as provided in Clause 3.2.1(b),
                3.2.2(b), 3.2.3(c) or 3.2.4(b), as appropriate; and

        (n)     "W" shall be as provided in Clause 3.2.1(c), 3.2.2(c), 3.2.3(d)
                or 3.2.4(c), as appropriate.

3.2     INVESTMENT INCOME ADJUSTMENT

3.2.1   If the Investment Income Adjustment is equal to or less than $15,000,000
        (fifteen million dollars):

        (a)     the Buyer shall subscribe for one ordinary share in the Target
                Company at par for every Pound Sterling1.00 (or its equivalent)
                of the Subscription Amount;

        (b)     the Buyer shall pay to the Seller an amount equal to the
                Pre-Completion Other Amounts up to a maximum amount of
                $25,000,000 (twenty five million dollars);

        (c)     the Threshold Amount shall be $12,000,000 (twelve million
                dollars); and

        (d)     "W" shall be $20,200,000 (twenty million and two hundred
                thousand dollars) plus an amount equal to the amount (if any) by
                which the Pre-Completion Other Amounts exceeds $25,000,000
                (twenty five million dollars).

3.2.2   If the Investment Income Adjustment is greater than $15,000,000 (fifteen
        million dollars) but is less than or equal to $27,000,000 (twenty seven
        million dollars):



                                       22
<PAGE>

        (a)     the Buyer shall subscribe for one ordinary share in the Target
                Company at par for every Pound Sterling1.00 (or its equivalent)
                of the Subscription Amount;

        (b)     the Buyer shall pay to the Seller an amount equal to the
                Pre-Completion Other Amounts up to a maximum amount of
                $25,000,000 (twenty five million dollars);

        (c)     the Threshold Amount shall be $12,000,000 (twelve million
                dollars) less the Investment Income Deduction; and

        (d)     "W" shall be $32,200,000 (thirty two million two hundred
                thousand dollars) less the Threshold Amount, and plus an amount
                equal to the amount (if any) by which the Pre-Completion Other
                Amounts exceeds $25,000,000 (twenty five million dollars).

3.2.3   If the Investment Income Adjustment is greater than $27,000,000 (twenty
        seven million dollars) but is less than or equal to $52,000,000 (fifty
        two million dollars):

        (a)     the Buyer shall subscribe for one ordinary share in the Target
                Company at par for every Pound Sterling1.00 (or its equivalent)
                of the Subscription Amount less the Payment Amount;

        (b)     the Buyer shall pay to the Seller an amount equal to the
                aggregate of the Payment Amount and the Pre-Completion Other
                Amounts up to an aggregate maximum of $25,000,000 (twenty five
                million dollars);

        (c)     the Threshold Amount shall be nil; and

        (d)     "W" shall be $32,200,000 (thirty two million two hundred
                thousand dollars) plus an amount equal to the amount (if any) by
                which the sum of the Pre-Completion Other Amounts and the
                Payment Amount exceeds $25,000,000 (twenty five million
                dollars).

3.2.4   If the Investment Income Adjustment is greater than $52,000,000 (fifty
        two million dollars):

        (a)     the Buyer shall pay to the Seller $25,000,000 (twenty five
                million dollars);

        (b)     the Threshold Amount shall be nil; and

        (c)     "W" shall be $32,200,000 (thirty two million two hundred
                thousand dollars) plus the amount by which the Investment Income
                Adjustment exceeds an amount which is equal to the difference of
                $52,000,000 (fifty two million dollars) less the Pre-Completion
                Other Amounts.

3.2.5   If the Buyer is required to subscribe for the Buyer's Additional Capital
        pursuant to this Clause 3.2, the Buyer shall procure that, immediately
        upon the issue of the Buyer's Additional Capital, the Target Company
        subscribes for ordinary shares in the Target Subsidiary of an amount
        equal to the Buyer's Additional Capital.



                                       23
<PAGE>

3.3     COMPLETION ADJUSTMENT

3.3.1   The Buyer and the Seller shall agree and/or there shall be determined
        the Completion Adjustment in accordance with Schedule 7.

3.3.2   If the Completion Adjustment is less than zero:

        (a)     the Seller shall subscribe for one ordinary share in the Target
                Company at a premium equal to the absolute value of the amount
                of the Completion Adjustment (or its equivalent) (the "SELLER'S
                ADDITIONAL CAPITAL");

        (b)     the Buyer shall procure that the Target Company issues the
                Seller's Additional Capital to the Seller upon payment.
                Immediately upon issue of the Seller's Additional Capital the
                Seller shall transfer the Seller's Additional Capital to the
                Buyer in consideration for the payment by the Buyer to the
                Seller of $1.00; and

        (c)     the Buyer shall procure that the Target Company subscribes for
                one ordinary share in the Target Subsidiary at a premium equal
                to the total amount received by the Target Company for the
                Seller's Additional Capital.

3.3.3   If at any time following the Completion Date the Outstanding Completion
        Balance is greater than zero and:

        (a)     the Target Subsidiary pays a Management Fee, then the Buyer
                shall, subject to Clause 3.3.4, within 5 business days of the
                receipt by the Manager of the Management Fee, pay to the Seller
                an amount equal to 50 per cent. of the Management Fee; and/or

        (b)     the Target Subsidiary pays a Trigger Distribution, then the
                Buyer shall, subject to Clause 3.3.4, within 5 business days of
                such payment, pay to the Seller an amount equal to the Relevant
                Percentage of such Trigger Distribution;

        (c)     the Buyer or any of its Affiliates disposes of a controlling
                interest in the Target Company (other than pursuant to clause 13
                or clause 14) then the Buyer shall, within 5 business days of
                the receipt of the consideration, pay 100 per cent. of the
                consideration received for any such controlling interest; and/or

        (d)     the Target Company or any of its Affiliates:

                        (i)     disposes of a controlling interest in the Target
                                Subsidiary; and/or

                        (ii)    disposes of all or substantially all of its
                                assets; and/or

                        (iii)   procures that the Target Subsidiary disposes of
                                all or substantially all of its assets,

                (in each case other than pursuant to clause 13 or clause 14)
                then the Buyer shall, within 5 business days of the receipt of
                the consideration, whether by the Buyer,



                                       24
<PAGE>

                the Target Company or the Target Subsidiary, pay to the Seller
                100 per cent. of the consideration received for any such
                controlling interest or assets,

                provided that, the aggregate of the payments made by the Buyer
                to the Seller pursuant to this Clause 3.3.3 shall not exceed the
                Outstanding Completion Balance.

3.3.4   The Buyer shall only be obliged to make payments to the Seller pursuant
        to Clauses 3.3.3(a) and 3.3.3(b) to the extent that the aggregate of the
        payments by the Target Subsidiary described in Clauses 3.3.3(a) and
        3.3.3(b) exceed the Threshold Amount plus an amount in respect of
        interest on the Threshold Amount calculated from the Completion Date and
        in accordance with Clause 3.5.1.

3.4     POST COMPLETION OTHER AMOUNTS

3.4.1   If any Post Completion Other Amounts arise after the Completion Date,
        the amount of those Post Completion Other Amounts shall be added to the
        amount of the Outstanding Completion Balance on the day which is two
        business days after the receipt of those Post Completion Other Amounts
        by the Target Subsidiary.

3.5     INTEREST

3.5.1   The Outstanding Completion Balance and/or any Additional Consideration
        will bear interest from the Completion Date to the date of payment
        (inclusive of each date) at a rate equal to the one-year LIBOR plus 1.00
        per cent. per annum. The interest shall accrue daily and be calculated
        at the end of each Relevant Period on the actual number of days elapsed
        in that Relevant Period and a 360 day year. The interest shall be
        compounded quarterly in arrears on the last day of each Relevant Period.
        The one-year LIBOR shall be re-set at the Completion Date and on each
        anniversary date of the Completion Date and such rate shall be used for
        all subsequent calculations until the next anniversary date. The Seller
        shall determine the one-year LIBOR at each re-set date and shall give
        the Buyer written notice of each such determination on the first
        business day following the Completion Date and each anniversary
        thereafter. Any payments in accordance with Clauses 3.3.2, 3.3.3 and
        3.6.1 shall be applied first to outstanding interest calculated in
        accordance with this Clause 3.5.1.

3.6     ADDITIONAL CONSIDERATION

3.6.1   Any amount payable by the Buyer to the Seller pursuant to Clause 3.2 or
        Clause 3.3.3 or Clause 2A.3(2) of the Tax Deed is deemed to be
        additional consideration for the purchase of the Sale Shares and is, in
        each case, referred to as "ADDITIONAL CONSIDERATION".

3.7     PAYMENTS

3.7.1   Within 5 business days after the Completion Adjustment being agreed or
        finally determined pursuant to the provisions of Schedule 7, the
        Additional Consideration payable pursuant to clause 3.2 shall be paid
        (net of any applicable withholding tax) in



                                       25
<PAGE>

        accordance with Clause 16.15. The Additional Consideration will bear
        interest calculated in accordance with Clause 3.5.1.

3.7.2   No withholding tax shall be deducted from any payment under this Clause
        3.7 where the payor has been directed by the Inland Revenue under
        Regulation 2 of the Double Taxation Relief (Taxes or Income) (General)
        Regulations 1970 that tax shall not be deducted or may be deducted at a
        lower rate of withholding tax or where the Inland Revenue has issued a
        provisional authority for interest to be paid gross or at a lower rate
        of withholding tax and whilst such provisional authority remains in
        force.

3.7.3   The recipient of any payment shall cooperate with the payer in obtaining
        any clearances and complying with any procedural formalities necessary
        in order for the payer to make such payment without deduction of any
        withholding tax or at a lower rate of withholding tax under the
        applicable double taxation agreement. The recipient of the payment shall
        provide to the payer copies of all documents obtained from the relevant
        Tax Authority responsible for the double taxation agreement in both
        countries which are relevant to the payer making such payment without
        deduction of any withholding tax or at a lower rate of withholding tax
        under the applicable double taxation agreement.

3.8     ESCROW

3.8.1   At Completion the Subscription Amount shall be paid by the Buyer to the
        Buyer's solicitors as stakeholder (the "STAKEHOLDER"), who shall, at the
        same time, be irrevocably instructed by the Seller and the Buyer:

        (a)     to place $25,000,000 (twenty five million dollars) (the "ESCROW
                AMOUNT") in an interest bearing designated bank deposit account
                maintained in a branch of an English high street clearing bank
                in the name of the Stakeholder;

        (b)     within 5 business days after the Completion Adjustment being
                agreed or finally determined pursuant to the provisions of
                Schedule 7:

                (i)     if Clauses 3.2.1 or 3.2.2 apply:

                        (1)     pay that part of the Escrow Amount which is
                                equal to the Subscription Amount to the Target
                                Company (which shall be deemed to be payment in
                                fulfilment of the Buyer's obligations under
                                Clauses 3.2.1(a) or 3.2.2(a) as appropriate);

                        (2)     pay the balance of the Escrow Amount to the
                                Seller (which shall be deemed to be payment in
                                fulfilment of the Buyer's obligations under
                                Clauses 3.2.1(b) or 3.2.2(b) as appropriate)

                (ii)    if Clause 3.2.3 applies, pay that part of the Escrow
                        Amount which is equal to the amount calculated in
                        accordance with Clause 3.2.3(a) to the Target



                                       26
<PAGE>

                        Company (which shall be deemed to be payment in
                        fulfilment of the Buyer's obligation under Clause
                        3.2.3(a)), and pay the balance of the Escrow Amount to
                        the Seller (which shall be deemed to be payment in
                        fulfilment of the Buyer's obligations under Clause
                        3.2.3(b); and

                (iii)   if Clause 3.2.4 applies, pay the Escrow Amount to the
                        Seller (which shall be deemed to be payment in
                        fulfilment of the Buyer's obligations under Clause
                        3.2.4(a)); and

        (c)     to pay an amount equal to any interest received by the
                Stakeholder on the Escrow Amount (less any tax thereon for which
                the Stakeholder may be accountable and any charges and expenses
                incurred by the Stakeholder) to the Buyer (or as it may direct)
                and/or to the Seller (or as it may direct) in proportion to the
                amounts finally payable to them respectively, otherwise than in
                respect of costs.

3.9     SUBSCRIPTIONS

3.9.1   The Buyer's Additional Capital shall be subscribed for and paid for in
        full within 5 business days of receipt of the amounts to be paid to it
        by the Stakeholder under Clause 3.8.1(b)(i) or (ii), as appropriate.

3.9.2   The Seller's Additional Capital shall be subscribed for and paid for in
        full within 5 business days after the Completion Adjustment being
        finally agreed or finally determined pursuant to the provisions of
        Schedule 7.

3.10    COMPLETION BALANCE SECURITY

3.10.1  If Clause 3.3.3 shall apply, the Buyer shall:

        (a)     execute the Distribution Security in favour of the Seller; and

        (b)     procure that the Manager executes the Management Fee Security in
                favour of the Seller,

         within 5 business days after the Completion Adjustment has been agreed
         or finally determined pursuant to the provisions of clause 3.3.1 and
         Schedule 7.

3.11    MANAGEMENT FEE

3.11.1  The Buyer shall provide a statement of the amounts paid to the
        Affiliates of the Buyer (as defined in the definition of "MANAGEMENT
        FEE") and of the amounts so paid not falling within the Management Fee
        together with a copy of the audited accounts of the Target Subsidiary
        within 120 days of the end of each financial year and a certificate of
        an officer of the Target Subsidiary of the accuracy of the statement.



                                       27
<PAGE>

3.12    MANAGEMENT FEE VARIATION

3.12.1  If, at any time during the term of the Management Agreement, the board
        of directors of the Target Subsidiary determines that the amount of the
        Management Fee to be paid by the Target Subsidiary is too high having
        regard to the financial condition of the Target Subsidiary or any
        requirements of the Financial Services Authority, then the Buyer shall
        immediately notify the Seller in writing and the Target Subsidiary may
        seek to reach agreement with the Manager to reduce the Management Fee by
        an agreed amount over an agreed period.

        If the Target Subsidiary and the Manager reach such an agreement (a
        "MANAGEMENT AGREEMENT VARIATION") the Buyer shall immediately notify the
        Seller and shall provide the Seller with a detailed and reasoned
        explanation for the Management Agreement Variation and the Seller hereby
        agrees:

        (a)     to agree to the Management Agreement Variation in its capacity
                as assignee of the rights to payment of the Management Fee under
                the terms of the Management Fee Security; and

        (b)     not to enforce its rights under the Management Fee Security in
                connection with the Management Agreement Variation,

        Provided that the Seller shall not be obliged to agree to that variation
        if:

                (i)     the result of the variation is that any provider of debt
                        or equity finance to the Target Subsidiary would rank
                        ahead of the Seller with respect to payments or
                        distributions;

                (ii)    any Affiliate of the Target Subsidiary receives payments
                        or distributions from the Target Subsidiary during the
                        period for which the variation is effective ("VARIATION
                        PERIOD") other than payments excluded from the
                        definition of Management Fee and permitted to be paid
                        under the Management Fee Security and the Distribution
                        Security; or

                (iii)   the Seller has not received $25,000,000 or more of the
                        Completion Balance and the financial condition of the
                        Target Subsidiary or the requirements of the Financial
                        Services Authority, which have brought about the
                        reduction in the Management Fee, has resulted from
                        requirements of operations in which the Target
                        Subsidiary was not engaged as at the date of Completion,

                and provided also that, at the end of the Variation Period, the
                Management Fee shall be restored to the original amount.

3.13    1987 AND PRIOR AMOUNTS

3.13.1  For the purposes of this Clause 3.13, the following definitions shall
        apply:

        (a)     "PRE-COMPLETION 1987 AND PRIOR AMOUNTS" means the amount of
                Reinsurance Recoverables arising in respect of the Target
                Subsidiary's underwriting years



                                       28
<PAGE>

                1987 and prior which is received by the Target Subsidiary after
                the date of this Agreement but prior to or on the Completion
                Date; and

        (b)     "POST-COMPLETION 1987 AND PRIOR AMOUNTS" means:

                (i)     100 per cent. of the amount of any Reinsurance
                        Recoverables arising in respect of the Target
                        Subsidiary's underwriting years 1987 and prior, where
                        the reinsurer is the Seller or an Affiliate of the
                        Seller, which is received by the Target Subsidiary after
                        the Completion Date; and

                (ii)    90 per cent. of the amount of any Reinsurance
                        Recoverables arising in respect of the Target
                        Subsidiary's underwriting years 1987 and prior where the
                        reinsurer is an entity other than the Seller or an
                        Affiliate of the Seller, which is received by the Target
                        Subsidiary after the Completion Date.

3.13.2  The Buyer acknowledges that prior to Completion the Seller may procure
        that the Target Subsidiary shall pay to the Seller any Pre-Completion
        1987 and Prior Amounts within two business days of receipt by the Target
        Subsidiary of the same.

3.13.3  The Buyer agrees to procure that the Target Subsidiary shall pay to the
        Seller any Post Completion 1987 and Prior Amounts within two business
        days of receipt by the Target Subsidiary of the same.

3.13.4  The payments to be made pursuant to Clause 13.3.2 and 13.3.3 are to be
        made to the Seller as corrections of billing errors which arose in
        relation to the 100 per cent. quota share for 1987 and prior
        underwriting years between the Seller and the Target Subsidiary.



                                       29
<PAGE>

4.      CONDITIONS TO COMPLETION

4.1     CONDITIONS

        Completion is conditional on the following conditions being satisfied,
        or in the case of the conditions in paragraphs (b), (d) or (f) below,
        waived by the Buyer, on or before the Completion Date:

        (a)     the Buyer having received a notice of approval from the FSA of
                all persons who will acquire control of the Target Subsidiary on
                Completion in accordance with section 184 FSMA (on such terms or
                conditions, if any, as are reasonably acceptable to the Seller
                and the Buyer in so far as such terms or conditions affect the
                Seller and the Buyer respectively) and such approval not having
                been revoked and being in full force and effect on the
                Completion Date or, in the absence of receipt of such notice,
                the period during which the FSA may serve notice of objection
                pursuant to section 186 FSMA having elapsed without the FSA
                having served any such notice of objection on the Buyer;

        (b)     subject to Clause 4.2.6 an application having been made by the
                Target Subsidiary to the FSA to vary the Target Subsidiary's
                permission under FSMA ("PART IV PERMISSION") so as to remove its
                permission to effect contracts of insurance on the basis that
                such variation shall only be effective if Completion takes
                place;

        (ba)    the FSA having confirmed to the Target Subsidiary (on such terms
                or conditions, if any, as are reasonably acceptable to the
                Seller and the Buyer in so far as such conditions affect the
                Seller and the Buyer respectively) that the FSA has no
                objections to the Target Subsidiary and the Seller entering into
                the Settlement of 100 per cent. quota share for 1987 and prior
                underwriting years in the Agreed Form, the Settlement of
                aggregate stop loss providing $125,000,000 of cover in respect
                of underwriting years 1997, 1998, and 1999 in the Agreed Form,
                the CRG Commutation in the Agreed Form and the BU2 Commutation
                in the Agreed Form having been notified of the same pursuant to
                the Notice of Requirements dated 26 November 2001 addressed to
                the Target Subsidiary, and no condition of the FSA excludes or
                unduly burdens performance by the Target Subsidiary of the
                Allianz Contract and the Underwriters Re Contract;

        (c)     the FSA not:

                (i)     withdrawing or giving notice to withdraw any permission
                        (except in relation to the variation of the Target
                        Subsidiary's Part IV Permission referred to in paragraph
                        (b) above) required for, or in connection with, the
                        carrying on of the business of the Target Subsidiary;

                (ii)    imposing, or giving notice that it intends to impose,
                        any restriction or requirement on, or on the business
                        of, the Target Subsidiary other than that which (aa)
                        might reasonably be expected for a transaction of this
                        type and size and (bb) would not have a material adverse
                        effect on the ability of the



                                       30
<PAGE>

                        Buyer to carry on the business of the Target Subsidiary
                        after Completion in the same manner as it is carried on
                        at the date of this Agreement; or

                (iii)   requiring additional capital to be contributed to the
                        Target Subsidiary by Seller;

        (d)     the Target Subsidiary having made an election under section 107
                of the Finance Act 2000 in respect of the years ended 31
                December 2000 and 31 December 2001;

        (e)     the Seller having received a written notice of approval from the
                Illinois Department of Insurance in respect of the matters
                referred to in this Agreement, including, but not limited to,
                approval of the entry by the Seller into any of the Agreed Form
                documents for which Illinois regulatory approval is required (on
                such terms or conditions, if any, as are reasonably acceptable
                to the Seller and the Buyer in so far as such terms or
                conditions affect the Seller and the Buyer respectively); and

        (f)     there having been no Material Adverse Change.

4.2     SATISFACTION OF CONDITIONS

4.2.1   The Buyer hereby undertakes to the Seller to make, as soon as is
        reasonably practicable, an application to the FSA pursuant to section
        178 FSMA in respect of all persons who will acquire control of the
        Target Subsidiary on Completion.

4.2.2   Subject to Clauses 4.2.6 and 4.2.7, the Seller agrees that it will use
        its reasonable endeavours to procure that the Target Subsidiary will
        apply for the variation of the Target Subsidiary's Part IV Permission
        described in Clause 4.1(b) above.

4.2.3   The Seller and the Buyer hereby undertake, each to the other, to use
        their respective reasonable endeavours to procure that the conditions
        set out in Clause 4.1(a), (b) and (ba) are fulfilled as soon as
        reasonably practicable after the date hereof and in any event within 120
        days of the date of this Agreement.

4.2.4   The Buyer shall give notice to the Seller of the satisfaction of the
        condition of Clause 4.1(a) within two business days of becoming aware of
        the same.

4.2.5   The Seller shall give notice to the Buyer of the satisfaction of the
        conditions of Clauses 4.1(b), (ba), (d) and (e) within two business days
        of becoming aware of the same.

4.2.6   If the Seller acting reasonably determines that in respect of Insurance
        Contracts or Reinsurance Contracts which have been entered into by the
        Target Subsidiary at or before the date of this Agreement there is a
        requirement of the FSA that the Target Subsidiary's Part IV Permission
        continue to include permission to effect contracts of insurance, the
        Seller may give notice of this fact to the Buyer and upon the giving of
        such notice:

        (a)     the condition in Clause 4.1(b) shall be deemed to have been
                satisfied; and



                                       31
<PAGE>

        (b)     the Seller's obligations under Clause 4.2.2 shall cease to
                apply.

        In the event that the Seller makes such a determination, it shall
        provide the Buyer with reasonable details of the basis upon which it has
        made such a determination.

4.2.7   If the Seller or the Buyer acting reasonably determines that the
        application to vary the Target Subsidiary's Part IV Permission pursuant
        to Clause 4.1(b) having been made shall cause satisfaction of any of the
        other conditions in Clause 4.1 to be delayed beyond the period that
        would be expected if such application had not been made and that
        withdrawal of the application would remove such delay, the party making
        such determination may give notice of this fact to the other and upon
        the giving of such notice the Seller shall procure that the Target
        Subsidiary shall promptly notify the FSA of the withdrawal of its
        application to vary its Part IV Permission. In the event that a party
        makes such a determination, it shall provide to the other reasonable
        details of the basis upon which it has made such a determination. For
        the avoidance of doubt, the making of an application pursuant to Clause
        4.1(b) shall be sufficient to satisfy the condition in Clause 4.1(b)
        even if the application has been withdrawn pursuant to this Clause
        4.2.7.

4.3     WAIVER OR TERMINATION

4.3.1   At any time the Buyer may waive a condition set out in paragraphs (b),
        (d) or (f) of Clause 4.1 by notice to the Seller, on any terms it
        decides.

4.3.2   If a condition set out in Clause 4.1 has not been satisfied (or, in the
        case of the conditions set out in Clause 4.1(b), (d) or (f), waived by
        the Buyer) by 5 pm on 31 December 2002 this Agreement shall terminate
        and have no further effect (subject only to Clauses 15 (Governing law
        and disputes) and 16 (Miscellaneous) which shall continue in force).

4.3.3   If this Agreement terminates pursuant to Clause 4.3.2 each party's
        further rights and obligations under this Agreement will (save as
        mentioned in Clause 4.3.2) cease immediately on termination, but
        termination will not affect any liability of either party to the other
        arising from a breach of this Agreement before the date of such
        termination.

4.4     SELLER'S CONDITION

4.4.1   On any one occasion during the period from the date of this Agreement to
        the tenth business day before the Completion Date the Seller may give
        the Buyer its calculation of the Estimated Completion Adjustment,
        together with the management accounts upon which the Estimated
        Completion Adjustment is based and such working papers used in
        connection with the preparation of the same as are necessary or
        appropriate to understand and agree the calculation of the Estimated
        Completion Adjustment.

4.4.2   If the Estimated Completion Adjustment is greater than $50,000,000
        (fifty million dollars) or less than zero, the Seller may at the same
        time as it provides the Buyer with its calculation of the Estimated
        Completion Adjustment, give the Buyer notice that it wishes to terminate
        this Agreement (the "TERMINATION NOTICE").



                                       32
<PAGE>

4.4.3   Unless the Buyer shall within seven business days of receipt of the
        Termination Notice (and the related management accounts and working
        papers) serve a notice in writing on the Seller that it objects to the
        Estimated Completion Adjustment (identifying the reason for any
        objection and the amount(s) or item(s) in the Estimated Completion
        Adjustment calculation, the relevant management accounts and/or
        associated working papers which is/are in dispute) (such notification
        being, for the purposes of this Clause 4.4, a "TERMINATION OBJECTION
        NOTICE") the Buyer shall be deemed to have agreed the Estimated
        Completion Adjustment and this Agreement shall automatically terminate
        in accordance with Clause 4.4.8.

4.4.4   The Buyer shall only be entitled to serve a Termination Objection Notice
        if the basis of its objection is that the calculation of the Estimated
        Completion Adjustment should result in an amount which is greater than
        zero and equal to or less than $50,000,000 (fifty million dollars).

4.4.5   If, within the period referred to in Clause 4.4.3, the Buyer shall give
        the Seller a Termination Objection Notice then the Buyer or the Seller
        shall be entitled, within five business days of the date of such a
        notice, to refer the matter(s) in dispute to Ernst & Young, unless Ernst
        & Young are not at the relevant time independent of each of the parties
        in which case the matter(s) shall be referred to an independent firm of
        chartered accountants agreed upon between them or (failing agreement
        within four days of one party giving notice to the other that it desires
        an independent expert to be appointed) to be selected (at the instance
        of either party) by the President for the time being of the Institute of
        Chartered Accountants for England and Wales.

4.4.6   Ernst & Young or such other independent firm of chartered accountants
        shall act as experts not as arbitrators and shall determine the matter
        or matters in dispute and their decision shall, save in the event of
        fraud or manifest error, be binding. The independent firm of accountants
        shall have the right to seek such professional assistance and advice as
        it may require in fulfilling its duties. The cost of the independent
        firm of accountants shall be borne by the Seller and the Buyer equally.

4.4.7   Upon the resolution of any dispute by the independent firm of
        accountants, the Estimated Completion Adjustment shall be amended to
        accord with such resolution and the Estimated Completion Adjustment
        shall thereafter be final and binding as between the parties, for the
        purposes of this Agreement. If, on this basis, the Estimated Completion
        Adjustment is less than zero or exceeds $50,000,000 (fifty million
        dollars) this Agreement shall automatically terminate in accordance with
        Clause 4.4.8. Otherwise this Agreement shall continue in full force and
        effect.

4.4.8   If this Agreement terminates pursuant to Clause 4.4.3 or Clause 4.4.7
        each party's further rights and obligations under this Agreement will
        cease immediately on termination (subject only to Clause 15 (Governing
        law and disputes) and 16 (Miscellaneous) which shall continue in force),
        but termination will not affect any liability of either party to the
        other arising from a breach of this Agreement before the date of such
        termination.

4.4.9   If the Buyer serves a Termination Objection Notice and, but for the
        provisions of this Clause 4.4.9, the Completion Date would have occurred
        before the resolution of any



                                       33
<PAGE>

        dispute as provided for in Clause 4.4.5, the Completion Date shall be
        automatically postponed to the last business day in the month in which
        the Estimated Completion Adjustment is finally determined in accordance
        with Clause 4.4.5.

4.5     BUYER'S CONDITION

4.5.1   On any one occasion during the period from the date of this Agreement to
        the tenth business day before the Completion Date the Buyer may require
        the Seller to give the Buyer sufficient information (including the
        management accounts for the Target Group Companies for the immediately
        preceding month end) as will enable the Buyer to carry out the Loss
        Calculation. Seller shall be allowed twenty days from the date of
        Buyer's notice to provide the requested information. As soon as the
        Buyer has received such information and calculated the loss calculation
        the Buyer shall give the Seller its calculation of the Loss Calculation,
        together with the management accounts upon which the Loss Calculation is
        based and such working papers used in connection with the preparation of
        the same as are necessary or appropriate to understand and agree the
        calculation of the Loss Calculation.

4.5.2   If the Loss Calculation is greater than $14,000,000 (fourteen million
        dollars) the Buyer may at the same time as it provides the Seller with
        its calculation of the Loss Calculation, give the Seller notice that it
        wishes to terminate this Agreement (the "LOSS TERMINATION NOTICE").

4.5.3   Unless the Seller shall within seven business days of receipt of the
        Loss Termination Notice (and the related working papers) serve a notice
        in writing on the Buyer that it objects to the Loss Calculation
        (identifying the reason for any objection and the amount(s) or item(s)
        in the Loss Calculation and/or associated working papers which is/are in
        dispute) (such notification being, for the purposes of this Clause 4.5,
        a "LOSS TERMINATION OBJECTION NOTICE") the Seller shall be deemed to
        have agreed the Loss Calculation and this Agreement shall automatically
        terminate in accordance with Clause 4.5.8.

4.5.4   The Seller shall only be entitled to serve a Loss Termination Objection
        Notice if the basis of its objection is that the calculation of the Loss
        Calculation should result in an amount which is equal to or less than
        $14,000,000 (fourteen million dollars).

4.5.5   If, within the period referred to in Clause 4.5.3, the Seller shall give
        the Buyer a Loss Termination Objection Notice then the Buyer or the
        Seller shall be entitled, within five business days of the date of such
        a notice, to refer the matter(s) in dispute to Ernst & Young, unless
        Ernst & Young are not at the relevant time independent of each of the
        parties in which case the matter(s) shall be referred to an independent
        firm of chartered accountants agreed upon between them or (failing
        agreement within four days of one party giving notice to the other that
        it deserves an independent expert to be appointed) to be selected (at
        the instance of either party) by the President for the time being of the
        Institute of Chartered Accountants for England and Wales.

4.5.6   Ernst & Young or such other independent firm of chartered accountants
        shall act as experts not as arbitrators and shall determine the matter
        or matters in dispute and their decision shall, save in the event of
        fraud or manifest error, be binding. The



                                       34
<PAGE>

        independent firm of accountants shall have the right to seek such
        professional assistance and advice as it may require in fulfilling its
        duties. The cost of the independent firm of accountants shall be borne
        by the Seller and the Buyer equally.

4.5.7   Upon the resolution of any dispute by the independent firm of
        accountants, the Loss Calculation shall be amended to accord with such
        resolution and the Loss Calculation shall thereafter be final and
        binding as between the parties, for the purposes of this Agreement. If,
        on this basis, the Loss Calculation exceeds $14,000,000 (fourteen
        million dollars) this Agreement shall automatically terminate in
        accordance with Clause 4.5.8. Otherwise this Agreement shall continue in
        full force and effect.

4.5.8   If this Agreement terminates pursuant to Clause 4.5.3 or Clause 4.5.7
        each party's further rights and obligations under this Agreement will
        cease immediately on termination (subject only to Clause 15 (Governing
        law and disputes) and 16 (Miscellaneous) which shall continue in force),
        but termination will not affect any liability of either party to the
        other arising from a breach of this Agreement before the date of such
        termination.

4.5.9   If the Buyer serves a request for information to enable Buyer to carry
        out the Loss Calculation, or if Seller serves a Loss Termination
        Objection Notice and, but for the provisions of this Clause 4.5.9, the
        Completion Date would have occurred before the completion of the Loss
        Calculation and expiration of Seller's right to object thereto in
        accordance with Clause 4.5.3, or, if applicable, the resolution of any
        dispute as provided for in Clause 4.5.5, the Completion Date shall be
        automatically postponed to the last business day in the month in which
        the Loss Calculation is finally determined in accordance with Clause
        4.5.5.

4.6     DEEMED MATERIAL ADVERSE CHANGE

4.6.1   The Seller shall procure that the Target Group Companies prepare and
        provide the Buyer with the MAC Management Accounts within three business
        days of the last business day of each month between the date of this
        Agreement and the Completion Date (the "RELEVANT MONTH END"), provided
        that where the last Relevant Month End is also the Completion Date, such
        Relevant Month End shall be deemed to end five business days before the
        Completion Date.

4.6.2   For the purposes of this Clause 4.6, the "MAC MANAGEMENT ACCOUNTS" shall
        mean the management accounts prepared by the Target Group with due care
        and attention which show an accurate view of:

        (a)     the actual cumulative cash flows (excluding those arising from
                Invested Assets) of the Target Group in the form of the tab
                "MAC" in the spread sheet entitled "MAC 4.6 ILLUSTRATION
                19_6.XLS" set out in Schedule 9 from the end of the period
                starting on the Last Accounting Date and ending on the relevant
                Month End (the "TOTAL CASH FLOW");

        (b)     the aggregate amount of the Total Cash Flow which is
                attributable to LPC, Other Inwards, Outwards Expenses/other
                inwards in the format given in the tab "ACT CASH OUTFLOWS TO 17
                MAY" in the spread sheet entitled "MAC 4.6 ILLUSTRATION



                                       35
<PAGE>

                19_6.XLS" set out in Schedule 9 plus actual cash flows from 18
                May through the Completion Date determined in the same manner as
                that shown in the tab "ACT CASH OUTFLOWS TO 17 MAY" in that
                spread sheet (collectively the "TOTAL SETTLEMENTS");

        (c)     the aggregate amount of the Total Settlements which has been
                paid by the Target Group Companies in respect of claims arising
                as a direct consequence of the terrorist attacks on the Pentagon
                and the World Trade Centre on 11 September 2001 (the "WTC
                SETTLEMENTS"); and

        (d)     the aggregate amount of the Total Settlements which have been
                paid by the Target Group Companies:

                (i)     following the written approval of that payment by the
                        Buyer; or

                (ii)    in accordance with paragraph (n) of Schedule 4,

                (the "APPROVED SETTLEMENTS").

4.6.3   For the purposes of this Clause 4.6, in respect of each set of MAC
        Management Accounts, the Total Settlements, less the sum of the WTC
        Settlements and the Approved Settlements, is referred to as the "NET
        SETTLEMENTS".

4.6.4   If, either:

        (a)     the Seller fails to comply with its obligations under this
                Clause 4.6; or

        (b)     the MAC Management Accounts for 30 June 2002 show that the Net
                Settlements exceed $195m; or

        (c)     the MAC Management Accounts for 31 July 2002 show that the Net
                Settlements exceed $227.5m; or

        (d)     the MAC Management Accounts for 31 August 2002 show that the Net
                Settlements exceed $260m; or

        (e)     the MAC Management Accounts for 30 September 2002 show that the
                Net Settlements exceed $292.5m; or

        (f)     The MAC Management Accounts 31 October 2002 show that the Net
                Settlements exceed $325m; or

        (g)     The MAC Management Accounts for 30 November 2002 show that the
                Net Settlements exceed $357.5m; or

        (h)     the MAC Management Accounts for 31 December 2002 show that the
                Net Settlements exceed $390m,

then a material adverse change shall be deemed to have occurred.



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<PAGE>

5.      COMPLETION

5.1     TIME AND VENUE

        Completion shall take place at the London offices of the Seller's
        Solicitors on the last business day of the month during which the
        conditions set out in Clause 4.1 are satisfied or waived (or, if the
        last of such conditions to be satisfied or waived is satisfied or waived
        in the last five business days of such month) on the last business day
        of the next following month.

5.2     SELLER'S COMPLETION OBLIGATIONS

5.2.1   At Completion the Seller shall:

        (a)     give to the Buyer each item specified in Schedule 2; and

        (b)     with the Buyer, give the Stakeholder the instructions set out in
                Clause 3.7.

5.2.2   At Completion the Seller shall procure that:

        (a)     the Target Company's directors hold a meeting of the board of
                directors of the Target Company at which the directors:

                (i)     vote in favour of the registration of the Buyer or its
                        nominee(s) as member(s) of the Target Company in respect
                        of the Sale Shares (subject to the production of
                        properly stamped transfers);

                (ii)    if requested by the Buyer, change the Target Company's
                        registered office to a place nominated by the Buyer; and

                (iii)   appoint a person nominated by the Buyer as secretary of
                        the Target Company with effect from the end of the
                        meeting;

        (b)     such persons as the Buyer may nominate are appointed as
                directors of the Target Company;

        (c)     the Target Subsidiary's directors hold a meeting of the board of
                directors of the Target Subsidiary at which the directors:

                (i)     if requested by the Buyer, change the Target
                        Subsidiary's registered office to a place nominated by
                        the Buyer; and

                (ii)    appoint a person nominated by the Buyer as secretary of
                        the Target Subsidiary with effect from the end of the
                        meeting; and

        (d)     such persons as the Buyer may nominate are appointed as
                directors of the Target Subsidiary provided that the Buyer has
                provided the Seller with evidence



                                       37
<PAGE>

                acceptable to the Seller, acting reasonably, that such persons
                have been approved by the FSA to perform such controlled
                functions.

5.3     BUYER'S COMPLETION OBLIGATIONS

        At Completion the Buyer shall give to the Seller evidence in a form
        reasonably satisfactory to the Seller (by way of a certificate of the
        Buyer's Solicitors or otherwise) of satisfaction of the conditions set
        out in paragraph (a) of Clause 4.1 and shall:

        (a)     pay the amount stated in Clause 2.2.2 to the Seller or as the
                Seller directs in writing in cash;

        (b)     with the Seller, give the Stakeholder the instructions set out
                in Clause 3.7;

        (c)     pay the Subscription Amount to the Stakeholder in accordance
                with Clause 3.7; and

        (d)     give the Seller the Tax Deed executed by the Buyer and the
                Management Agreement executed by the parties thereto.

5.4     RIGHT TO DEFER OR TERMINATE

5.4.1   Neither the Seller nor the Buyer is obliged to complete this Agreement
        unless:

        (a)     the other complies with all its obligations under Clause 5.2 or
                5.3 (as the case may be); and

        (b)     the purchase of all the Sale Shares is completed simultaneously.

5.4.2   If Completion does not take place on the Completion Date because either
        party (the "FIRST PARTY") fails to comply with any material obligation
        under Clause 5.2 or 5.3 (as the case may be), the other party (the
        "SECOND PARTY") may by notice to the First Party:

        (a)     postpone Completion to a date not more than 20 business days
                after the Completion Date; or

        (b)     terminate this Agreement.

5.4.3   If the Second Party postpones Completion to another date in accordance
        with Clause 5.4.2(a), the provisions of this Agreement apply as if that
        other date is the Completion Date.

5.4.4   If the Second Party terminates the Agreement pursuant to Clause
        5.4.2(b), each party's further rights and obligations under this
        Agreement will cease immediately on termination (subject only to Clauses
        15 (Governing law and disputes) and 16 (Miscellaneous) which shall
        continue in force), but termination will not affect any liability of
        either party to the other arising from a breach of this Agreement before
        the date of such termination.



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<PAGE>

6.      SELLER'S WARRANTIES

6.1     WARRANTIES

6.1.1   The Seller warrants to the Buyer in the terms of the Warranties.
        Immediately before the time of Completion, the Seller is deemed to
        warrant to the Buyer in the terms of the Warranties at the date of
        Completion. For this purpose only, where in a Warranty there is an
        express or implied reference to the "DATE OF THIS AGREEMENT", that
        reference is to be construed as a reference to the "COMPLETION DATE".

6.1.2   Each Warranty is to be construed independently and (except where this
        Agreement expressly provides to the contrary) is not limited by a
        provision of this Agreement or another Warranty.

6.1.3   The Seller acknowledges that the Buyer is entering into this Agreement
        in reliance on each Warranty.

6.2     DISCLOSURE LETTER

        The Warranties other than those set out in paragraphs 1.1, 1.2, 3.1,
        3.2.2 or 3.2.3 of Schedule 3 are qualified by the matters fairly
        disclosed in the Disclosure Letter and/or in the Data Room in sufficient
        detail to enable a reasonable purchaser to evaluate their relevance to
        the Warranties. No other knowledge of the Buyer (or an agent or
        Affiliate) relating to a Target Group Company (actual, constructive or
        imputed) prevents or limits a claim made by the Buyer for breach of
        Clause 6.1. The Seller may not invoke the Buyer's knowledge (or the
        knowledge of the Buyer's agents or Affiliates) (actual, constructive or
        imputed) of a fact or circumstances which might make a Warranty untrue,
        inaccurate, incomplete or misleading as a defence to a claim for a
        breach of Clause 6.1. However, the Buyer acknowledges and confirms that
        it and its advisers have carried out such due diligence as is reasonably
        necessary and at the time of entering into this Agreement it is not
        aware of any matter or thing which constitutes a breach of any of the
        Warranties as qualified in accordance with this Clause 6.2.

6.3     WAIVER OF RIGHTS

        The Seller waives and may not enforce a right which it may have in
        respect of a misrepresentation, inaccuracy or omission in or from
        information or advice supplied or given by a Target Group Company or a
        director, officer or employee of a Target Group Company for the purpose
        of assisting the Seller to make a representation, give a Warranty,
        prepare the Disclosure Letter or covenant under the Tax Deed.

6.4     SELLER'S OBLIGATIONS

        Between the execution of this Agreement and Completion the Seller shall:

        (a)     procure that each Target Group Company complies with Schedule 4;



                                       39
<PAGE>

        (b)     notify the Buyer immediately if it becomes aware of a fact or
                circumstance which constitutes a breach of Clause 6.1.1 or
                paragraph (a) above or has caused, or will or might cause, a
                Warranty to become untrue, inaccurate, incomplete or misleading
                at any time before Completion;

        (c)     procure that the Buyer and its agents will, at the Buyer's
                expense and upon reasonable notice, be allowed access to, and to
                take copies of, the books and records of each Target Group
                Company in the possession or control of either Target Group
                Company or the Seller provided that the obligations of the
                Seller under this Clause shall not extend to allowing access to
                information which is reasonably regarded as confidential to the
                activities of the Seller otherwise than in connection with the
                Target Group Companies; and

        (d)     procure that such representatives and advisers as the Buyer
                requests may be designated to work with the Seller at the sole
                expense of the Buyer with regard to the management and
                operations of the Target Group Companies. The Seller will
                consult, and will cause the Target Group Companies to consult,
                with such representatives and advisers with respect to any
                action that may materially affect the Target Group. The Seller
                will furnish and will cause the Target Group Companies to
                provide to such representatives and advisers such information as
                they may reasonably request for this purpose.

6.5     UPDATES TO DISCLOSURE LETTER

6.5.1   Each party shall give prompt notice to the other party of (i) the
        occurrence, or failure to occur, of any event or the existence of any
        condition that has caused or could reasonably be expected to cause any
        of its representations or warranties contained in this Agreement to be
        untrue or inaccurate in any material respect at any time after the date
        of this Agreement, up to and including the Completion Date (except to
        the extent such representations and warranties are given as of a
        particular date or period and relate solely to such particular date or
        period), and (ii) any failure on its part to comply with or satisfy, in
        any material respect, any covenant, condition or agreement to be
        complied with or satisfied by it under this Agreement.

6.5.2   The Seller may, no less than 5 business days prior to Completion by
        written notice to the Buyer, supplement the Disclosure Letter to
        reflect:

        (a)     retirements and replacements of a Target Group Company's assets,
                including normal upgrades or replacements of Computer Programs
                (other than replacements of Computer Programs constituting the
                lead applications for key line operations such as in line
                business functions of the business of the Target Subsidiary
                including but not limited to processing Reinsurance Contracts,
                underwriting and recording and processing losses);

        (b)     the hiring, resignation and termination of employees;

        (c)     any act which the Seller is required to perform under the terms
                of this Agreement;



                                       40
<PAGE>


        (d)     any act which the Seller is required to perform in order to
                comply with any applicable law; and

        (e)     actions specified in Schedule 4 which have been effected without
                breaching the obligations of the Seller pursuant to Clause
                6.4(a) and Schedule 4 in any material respect;

        which:

                (i)     in the case of paragraphs (a) and (b) above are in the
                        normal course of business of the Target Group Companies;

                (ii)    occur after the date of this Agreement; and

                (iii)   in the case of paragraphs (a) and (b) above are
                        otherwise in accordance with terms of this Agreement,
                        and in particular the Seller's obligations under Clause
                        6.4(a) and Schedule 4; and


        provided that any such supplements to the Disclosure Letter shall only
        be effective to qualify the Warranties given at the date of Completion.



                                       41
<PAGE>

7.      REMEDIES FOR BREACH

7.1     NON DEFAULTING PARTY'S RIGHTS

        If, on or before the Completion Date, a party (the "NON DEFAULTING
        PARTY") considers that the other party (the "DEFAULTING PARTY") is in
        breach of any provision of this Agreement, the Non Defaulting Party
        shall promptly notify the Defaulting Party in writing, specifying the
        relevant breach. If the relevant breach is capable of being remedied the
        Defaulting Party may prior to the Completion Date remedy such breach to
        the satisfaction of the Non Defaulting Party, acting reasonably. If the
        breach is not capable of remedy or, if capable of remedy, is not
        remedied to the satisfaction of the Non Defaulting Party acting
        reasonably prior to the Completion Date, then the Non Defaulting Party
        may by notice to the Defaulting Party elect to proceed to Completion or,
        if the breach would result in a valid Major Claim, terminate this
        Agreement.

7.2     TERMINATION BY NON DEFAULTING PARTY

        If the Non Defaulting Party terminates this Agreement pursuant to Clause
        7.1:

        (a)     the Defaulting Party shall indemnify the Non Defaulting Party
                against all its costs up to but not exceeding $1,500,000 (one
                million five hundred thousand dollars) in the aggregate incurred
                at any time after 15 March 2002 relating to the negotiation,
                preparation, execution or termination of this Agreement or the
                satisfaction of a condition set out in Clause 4.1; and

        (b)     each party's further rights and obligations under this Agreement
                will cease immediately on termination (subject only to Clauses
                15 (Governing law and disputes) and 16 (Miscellaneous) which
                shall continue in force), but termination will not affect any
                liability of either party to the other arising from a breach of
                this Agreement before the date of such termination.

7.3     INDEMNIFICATION BY SELLER

7.3.1   If the Buyer proceeds to Completion and there is a breach of Clause 6.1
        or there is a breach of Clause 5.2.1 and:

        (a)     the value of an asset of a Target Group Company is or becomes
                less than the value would have been had the breach not occurred;
                or

        (b)     a Target Group Company is subject to or incurs a liability or an
                increase in a liability which it would not have been subject to
                or would not have incurred had the breach not occurred,

        the Buyer shall be entitled to recover from the Seller by way of
        indemnity (as its sole remedy) in relation to the breach an amount equal
        to the reduction in the value of the asset or, as the case may be, the
        liability or increased liability.



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<PAGE>

8.      LIMITATIONS ON SELLER'S LIABILITY

8.1     MINIMUM CLAIM THRESHOLD

        The Seller shall not be liable in respect of any Relevant Claim or a
        claim under Clause 2 of the Tax Deed unless:

        (a)     the amount payable in respect of that claim exceeds $100,000
                (one hundred thousand dollars) in which case the whole amount of
                that claim and not just the excess over $100,000 (one hundred
                thousand dollars) shall, subject to the limitation in paragraph
                (b) below, be recoverable; and

        (b)     the amounts payable in respect of that claim and all other
                Relevant Claims and claims under Clause 2 of the Tax Deed in
                aggregate exceed $2,000,000 (two million dollars) (the
                "AGGREGATE THRESHOLD") and, subject to the limitation in
                paragraph (a) above, the Seller shall only be liable in respect
                of the amount by which the amounts payable in aggregate exceed
                the Aggregate Threshold.

        For the purposes of determining whether the Aggregate Threshold has been
        reached or exceeded, there shall be disregarded:

                (i)     the limitation in paragraph (a) above; and

                (ii)    the first $10,000 (ten thousand dollars) of the amount
                        of any Relevant Claim or any claim under Clause 2 of the
                        Tax Deed.

8.2     MAXIMUM LIABILITY

        The Seller's total liability in respect of all Relevant Claims and
        claims under the Tax Deed is limited to an aggregate of $100,000,000
        (one hundred million dollars) (or its equivalent), but the amount of a
        claim under Clause 2A.1 of the Tax Deed is not counted for this purpose.

8.3     TIME LIMITS

        The Seller is not liable for a claim for a breach of this Agreement or
        the Tax Deed unless the Buyer has given the Seller notice of the claim,
        stating in reasonable detail the nature of the claim and, if
        practicable, the amount claimed:

        (a)     in respect of a claim under the Tax Deed or for breach of a
                Warranty contained in paragraph 24 of Schedule 3:

                (i)     no later than one month after the expiry of the period
                        during which a Target Group Company may be assessed by a
                        Tax Authority in respect of Tax for which the Target
                        Group Company would not have been liable but for the
                        Target Group Company having been a member of a group for
                        Tax purposes, or controlled by any person, at any time
                        before Completion (and



                                       43
<PAGE>

                        for this purpose "control" has the same meaning as in
                        section 767A of the Taxes Act); and

                (ii)    except where Clause 8.3(a)(i) applies, on or before 31
                        January 2009; and

        (b)     in respect of any other Relevant Claim, on or before 30 June
                2004,

        and has in any such case served proceedings in respect thereof within 12
        months of the date of such written notice.

8.4     RECOVERY FROM THIRD PARTIES

        If the Seller pays to or for the benefit of the Buyer an amount in
        respect of any Relevant Claim and any of the Buyer, or a Target Group
        Company subsequently receives from any other person any payment in
        respect of the matter giving rise to the Relevant Claim, the Buyer shall
        thereupon pay to the Seller an amount equal to the payment received,
        after having taken into account any cost, liability (including tax
        liability) or expense in respect thereof and except to any extent that
        the liability of the Seller in respect of the Relevant Claim was reduced
        to take account of such payment.

8.5     NO REPRESENTATIONS

        The Buyer confirms that it has not entered into this Agreement or any
        document entered into hereunder or referred to herein in reliance upon
        any representation, warranty or undertaking other than those expressly
        contained herein and acknowledges that it has not relied on, and will
        make no Relevant Claim in respect of any such representation, warranty
        or undertaking made or supplied by or on behalf of the Seller. Without
        limiting the general nature of the foregoing, the Buyer confirms that it
        has not relied on and will make no claim in respect of any budget,
        forecast or other projection of any nature made or supplied by or on
        behalf of the Seller.

8.6     ACTIONS AFTER COMPLETION

        The Seller shall have no liability in respect of any Relevant Claim to
        the extent that such Relevant Claim arises or is increased in
        circumstances in which the Buyer or a Target Group Company acts or omits
        to act, other than pursuant to a legally binding commitment created on
        or before Completion by a Target Group Company and it or any of its
        advisers, employees, directors, officers or agents knows that such act
        or omission would give rise to or increase such Relevant Claim and a
        reasonable alternative course of action was available to the Buyer or
        the relevant Target Group Company which could have been expected not to
        have given rise to such Relevant Claim or to a Relevant Claim of such
        amount and which would not require the Buyer to incur any expenditure or
        any liability or otherwise materially prejudice it, on or after
        Completion.

8.7     SUBSEQUENT LEGISLATION, ETC.

        The Seller shall not be liable in respect of any Relevant Claim to the
        extent that liability for such Relevant Claim occurs or is increased as
        a result of any legislation,



                                       44
<PAGE>

        regulation or regulatory requirement not in force on or prior to the
        Completion Date or as a result of the withdrawal of any published
        extra-statutory concession or other published agreement or arrangement
        having general application on the Completion Date granted by or made
        with any governmental or regulatory authority or any tax authority or as
        a result of any change, after the Completion Date, of any generally
        accepted interpretation or application of any legislation, regulation or
        regulatory requirement or as a result of the introduction of, or any
        change in, any enforcement policy, practice or requirement of any
        relevant authority after the Completion Date or as a result of the
        withdrawal after the Completion Date of any extra-statutory concession
        or any other formal agreement or arrangements with any tax authority
        (whether or not having the force of law) currently granted by or made
        with any tax authority, unless in respect of any of the above events the
        Seller was at the date of this Agreement actively supporting or
        attempting to secure the enactment or adoption thereof.

8.8     INSURANCE CLAIMS

        If, in respect of any matter that would give rise to a Relevant Claim,
        either Target Group Company is entitled to coverage under any policy of
        insurance, any net recovery on behalf of the Target Group Company shall
        reduce the amount of the Relevant Claim which the Seller is obligated to
        pay to the Buyer. The Buyer shall when giving notice of the Relevant
        Claim to the Seller provide the Seller with notice of the policies of
        insurance under which coverage of such Relevant Claim may be provided,
        but the potential availability of insurance coverage shall not relieve
        or delay the Seller's obligation to pay the Relevant Claim.

        The appropriate member of the Buyer's group shall make a claim against
        such insurer or insurers with respect to the Relevant Claim and shall
        notify the Seller of such claim. The Buyer shall use reasonable
        endeavours to collect such claim. The Seller may, upon not less than 5
        business days' notice, assume the collection of the insurance claim and
        upon such assumption the Buyer shall execute such assignments or other
        documents as are necessary to enable the Seller to assume such
        collection or, if such assignment is not recognised by the insurer, will
        facilitate the Seller's collection in the Buyer's name, including, but
        not limited to, representation in litigation.

8.9     RESERVES, ETC.

        For the avoidance of doubt, none of the Warranties, nor the Tax Deed,
        nor any other provision of this Agreement shall be construed as a
        representation or warranty of any judgment based on actuarial principles
        by whomsoever made or as to the fulfilment of any assumption. In
        particular, and without prejudice to the generality of the foregoing,
        the Buyer acknowledges and agrees with the Seller that based on
        information provided by the Seller and its advisers the Buyer has made
        its own assessment of the adequacy of the amount of the technical
        reserves of the Target Subsidiary ("RESERVES") as at the Last Accounting
        Date and thereafter. No representation or warranty is made by the Seller
        or any of the Seller's Affiliates as to the adequacy of the Reserves to
        meet the liabilities of the Target Subsidiary to which the Reserves
        relate (the "RESERVING ADEQUACY"). Notwithstanding anything otherwise
        contained in this Agreement, no provision of this Agreement or the Tax
        Deed shall be construed as constituting or


                                       45
<PAGE>

        implying, directly or indirectly, the Reserving Adequacy and neither the
        Seller nor any of the Seller's Affiliates nor any of their respective
        officers, employees or advisers shall be under any liability to the
        Buyer or any other person if (for whatever reason) the amount of the
        Reserves is not adequate. However, this Clause 8.9 shall not operate to
        exclude any liability that the Seller may have in respect of the failure
        of the records of the Target Subsidiary (in respect of the Reserves,
        which the Seller has made available to the Buyer) to reflect each
        contract and claim which should in accordance with generally accepted UK
        actuarial standards have been reflected in such records. In the event of
        any conflict between the provisions of this Clause 8.9 and any other
        provision in this Agreement, the provisions of this Clause 8.9 shall
        prevail.

8.10    DEBTORS

        For the avoidance of doubt, none of the Warranties, nor the Tax Deed,
        nor any other provision of this Agreement shall be construed as a
        representation or warranty as to the recoverability of any amount from
        any debtor of the Target Subsidiary. Neither the Seller nor any of the
        Seller's Affiliates shall be under any liability to the Buyer or any
        other person (for whatever reason) in respect of any sum not being
        recoverable from any debtor of the Target Subsidiary. However, this
        Clause 8.10 shall not operate to exclude any liability that the Seller
        may have in respect of the failure of the records of the Target
        Subsidiary (in respect of the debtors of the Target Subsidiary) which
        the Seller has made available to the Buyer to record such debtors in
        accordance with generally accepted UK accounting standards. In the event
        of any conflict between the provisions of this Clause 8.10 and any other
        provision in this Agreement, the provisions of this Clause 8.10 shall
        prevail.

8.11    CONTINGENT LIABILITIES

        If any breach of the Warranties arises by reason of some liability of
        any Target Group Company which, at the time such breach or Relevant
        Claim is notified to the Seller, is contingent only or otherwise not
        capable of being quantified, then the Seller shall not be under any
        obligation to make any payment in respect of such breach or Relevant
        Claim unless and until such liability ceases to be contingent or becomes
        capable of being quantified, as the case may be provided that this
        clause shall not operate to avoid a claim made in reasonable
        particularity in respect of a contingent liability within the applicable
        time limit specified in Clause 8.3.

8.12    BUYER'S ASSISTANCE

        If the Buyer becomes aware of any circumstance which gives rise to a
        Relevant Claim and if the claim in question is as a result of or in
        connection with a claim by or liability to a third party (a "THIRD PARTY
        CLAIM"), the Buyer shall give written notice of that circumstance to the
        Seller forthwith and, the Seller shall be entitled, by a notice in
        writing addressed to the Buyer, to require the Buyer to take or to
        procure that the Target Group takes all such reasonable steps and
        proceedings as the Seller may consider necessary in order to obtain any
        payment, or relief in respect of or in connection with the Third Party
        Claim, and the Buyer will, at the request of the Seller allow the Seller
        at its expense to have the conduct of all correspondence and/or
        proceedings arising in connection with the Third Party Claim. The Seller
        may



                                       46
<PAGE>

        thereafter require the Target Group or the Buyer to take all such
        reasonable steps or proceedings as the Seller may consider necessary in
        order to mitigate any loss arising in connection with the Third Party
        Claim and the Buyer undertakes to procure that the Target Group shall so
        act. For the purpose of enabling the Seller to exercise its rights under
        this Clause 8.12, the Buyer shall:

        (a)     make or procure to be made available to the Seller or its duly
                authorised representatives, and (if so requested by the Seller)
                provide copies of, all relevant books of account, records and
                correspondence of the Target Group and permit the Seller to
                ascertain or extract any relevant information therefrom; and

        (b)     not admit any liability or agree any Third Party Claim which may
                give rise or has given rise to a Relevant Claim without the
                prior written consent of the Seller

        provided that:

                (i)     for the purposes of this clause 8.12, a "Relevant Claim"
                        does not include a Relevant Claim for a breach of a
                        warranty contained in paragraph 24 of Schedule 3; and

                (ii)    the Seller shall indemnify the Buyer or the Target Group
                        Companies concerned against all properly incurred costs,
                        charges and expenses and all liabilities that such
                        companies may incur as a result of the Seller exercising
                        its rights under this Clause 8.12. The Seller agrees to
                        keep the Buyer fully informed as to the progress of any
                        such Third Party Claim and the defence thereof.

8.13    NO DOUBLE COUNTING - TAX DEED

        The Seller shall not be liable in respect of any breach of any Warranty
        or in respect of any claim under the Tax Deed if and to the extent that
        the loss occasioned thereby has been recovered under the same or any
        other Warranty or under the Tax Deed or has otherwise been made good or
        compensated for without cost to the Buyer or the Target Group.

8.14    NO DOUBLE COUNTING - ACCOUNTS AND COMPLETION ACCOUNTS

        The Seller shall not be liable in respect of a Relevant Claim to the
        extent of:

        (a)     any amount which is included as a liability which is the subject
                matter of such Relevant Claim; or

        (b)     any amount by which the valuation of any asset has been reduced
                to take account of the subject matter of such Relevant Claim;

        in the Accounts or in the Completion Accounts. If any Relevant Claim is
        made the Buyer shall use all its endeavours to procure that the Seller
        and its advisers are given



                                       47
<PAGE>

        reasonable access to the working papers underlying the Accounts and the
        Completion Accounts for the purposes of ascertaining whether any, and if
        so what, amount is applicable to the Relevant Claim for the purposes of
        this Clause 8.14.

8.15    CHANGE IN ACCOUNTING POLICY

        The Seller shall not be liable in respect of any Relevant Claim in
        respect of any matters resulting from a change of accounting policy or
        practice or the length of any accounting period of the Buyer or the
        Target Group introduced after Completion.

8.16    EXCLUSION OF LIABILITY IN RESPECT OF IGI

        Save as provided in the IGI Retrocession, the Seller shall have no
        liability whatsoever whether to the Buyer, any Target Group Company or
        otherwise under this Agreement including the Warranties (save in respect
        of the Warranty contained in paragraph 1 of Schedule 3) or the documents
        referred to herein (other than the IGI Retrocession) in respect of the
        business referred to in the definition of "Business Covered" in the IGI
        Retrocession. In the event of any conflict between the provisions of
        this Clause 8.16 and any other provision in this Agreement, the
        provisions of this Clause 8.16 shall prevail.

8.17    MITIGATION OF LOSS

        Nothing contained in this Clause 8 shall limit the Buyer's obligation at
        common law or the obligation of the Target Group to mitigate any loss or
        damage resulting from or arising as a consequence of any circumstances
        giving rise to any Relevant Claim.

8.18    UNLIMITED LIABILITY

8.18.1  This Clause 8 shall not apply in relation to any Relevant Claim arising
        out of any fraud or dishonesty on the part of the Seller or its agents
        or advisers or in respect of a Relevant Claim involving or relating to
        breach of Clause 6.1 in respect of a Warranty contained in paragraphs 1
        or 3 of Schedule 3.


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<PAGE>

9.      SELLER'S UNDERTAKINGS

9.1     CONFIDENTIAL BUSINESS INFORMATION

9.1.1   Before and after Completion the Seller shall:

        (a)     not disclose to a person Confidential Business Information it
                has or acquires; and

        (b)     make every effort to prevent the disclosure by its employees of
                Confidential Business Information.

9.1.2   The Seller shall procure that each of its Affiliates complies with
        Clause 9.1.1.

9.1.3   Clause 9.1.1 does not apply to:

        (a)     disclosure of Confidential Business Information to a director,
                officer or employee of the Buyer or a Target Group Company whose
                function requires him to have the Confidential Business
                Information;

        (b)     disclosure of Confidential Business Information required to be
                disclosed by law or any applicable regulation having the force
                of law;

        (c)     disclosure of Confidential Business Information to an adviser
                for the purpose of advising the Seller but only on terms that
                Clause 9.1.1 applies to disclosure by the adviser; or

        (d)     Confidential Business Information that becomes publicly known
                except by the Seller's breach of Clause 9.1.1 or 9.1.2.

9.2     NON-COMPETITION

9.2.1   The Seller shall not directly or indirectly:

        (a)     seek to induce any reinsurer, cedent or other business relation
                of a Target Group Company to cease doing business with a Target
                Group Company or interfere with any such relationship; or

        (b)     for two years starting on the date of this Agreement engage,
                employ, solicit, or contact with a view to his engagement or
                employment by another person, any individual who is at that time
                a director, officer, employee or manager of a Target Group
                Company.

9.2.2   Each restriction in Clause 9.2.1 constitutes an entirely independent
        restriction on the Seller.

9.2.3   The Seller shall use reasonable endeavours to procure that each of its
        Affiliates complies with Clause 9.2.1.


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<PAGE>

9.2.4   On receiving the Buyer's reasonable request the Seller shall give to the
        Buyer all information it possesses as at the date of this Agreement and
        which it still possesses as at the date of such request relating solely
        to a Target Group Company's business and allow the Buyer to copy any
        document containing that information, provided the obligations of the
        Seller under this Clause shall not extend to allowing access to, or the
        copying of, information which is, in the reasonable opinion of the
        Seller, regarded as confidential to the activities of the Seller
        otherwise than in connection with the Target Group Companies. Each party
        shall bear its own costs in respect of the provision of such information
        to the Buyer, unless the Seller provides services beyond simply
        supplying available information (such as processing or analysing such
        information or preparing any reports) in which case the Buyer shall
        reimburse the Seller for its reasonable costs.

9.3     POST COMPLETION ASSISTANCE

9.3.1   For the period of one year after the Completion Date, the Seller shall
        allow, and procure that each Affiliate of the Seller shall allow, the
        Buyer's representatives reasonable access, upon 48 hours' written
        notice, to the Key Employees, and shall procure that such Key Employees
        assist the Buyer with its enquiries and provide the Buyer with such
        information about the Target Group Companies held by the Seller or its
        Affiliates as the Buyer may reasonably require to assist it to run off
        the business of the Target Subsidiary in an efficient manner or
        otherwise conduct the affairs of the Target Group Companies properly,
        provided the obligations of the Seller under this clause shall not
        extend to allowing access to information which is in the reasonable
        opinion of the Seller regarded as confidential to the activities of the
        Seller otherwise than in connection with the Target Group Companies.

9.3.2   The Buyer shall:

        (a)     bear all of its own costs in implementing clause 9.3.1; and

        (b)     subject to clause 9.3.3 reimburse the Seller and/or its
                Affiliates for its reasonable out-of-pocket expenses incurred in
                implementing clause 9.3.1 provided that: (i) such costs are
                agreed in advance in writing with the Buyer and the Seller
                and/or its Affiliates, as applicable; and (ii) the Seller shall
                provide reasonable evidence of such costs before the Buyer shall
                be obliged to reimburse it or its Affiliates.

9.3.3   To the extent that the Buyer requires any Key Employees to prepare
        reports or similar work beyond responding to brief routine enquiries,
        the Buyer shall pay to the Seller or its Affiliates, as appropriate, the
        then amount of the Key Employee's hourly pay rate multiplied by 130 per
        cent. (for these purposes such hourly rate being equal to the employee's
        then current annualised salary, including any target bonus, divided by
        2080) for the services of the relevant Key Employees as agreed between
        the Buyer and the Seller in writing in advance.

9.4     COMPUTER PROGRAMS

9.4.1   The obligations of the Seller and the Buyer with respect to Computer
        Programs used in the business of the Target Subsidiary shall be
        satisfied on Completion as follows:



                                       50
<PAGE>

        (a)     with respect to each Licensed Computer Program and Shrink Wrap
                Computer Program that is licensed by the licensor thereof to the
                Seller or any of the Seller's Affiliates (except those Computer
                Programs that are solely licensed to a Target Group Company),
                the Seller shall provide to the Target Subsidiary the rights
                described in Paragraph 7.4.2(d) of Schedule 3;

        (b)     the Seller shall be responsible for 50% of the expenses related
                to obtaining such rights provided that the aggregate of such
                shared expenses, whether incurred prior to or after Completion
                shall not exceed $500,000 unless the Buyer and Seller mutually
                agree;

        (c)     the Target Group shall be exclusively responsible for payment of
                continuing use charges, upgrade fees and maintenance fees, and
                for performance of other contractual obligations arising with
                respect to use by the Buyer and the Target Group after the
                Completion Date of the Computer Programs licensed or assigned to
                the Target Subsidiary pursuant to this Clause 9.4.

9.5     INTRA GROUP CONTRACTS

9.5.1   The Seller undertakes to the Buyer that, after the date of Completion in
        respect of any Relevant Contracts entered into between the Target
        Subsidiary and the Seller or any of the Seller's Affiliates, it will not
        adopt a position in relation to any claim against the Target Subsidiary
        or defence to a claim brought by the Target Subsidiary which is (i)
        materially different to the position it has adopted before the date of
        this Agreement; and (ii) detrimental to the position of the Target
        Subsidiary.

9.5.2   The Buyer shall procure that, after the date of Completion in respect of
        any Relevant Contracts entered into between the Target Subsidiary and
        the Seller or any of the Seller's Affiliates, the Target Subsidiary will
        not adopt a position in relation to any claim against the Seller or any
        of the Seller's Affiliates or a defence to a claim brought by the Seller
        or any of the Seller's Affiliates, which is: (i) materially different to
        the position it has adopted before the date of this Agreement; and (ii)
        detrimental to the position of the Seller, or, as the case may be, the
        Seller's Affiliates.

9.6     ACCOUNTS

        The Seller shall provide the Buyer with a copy of each bank mandate of
        each Target Group Company and details of each bank account of each
        Target Group Company at least three business days before Completion.

9.7     CLAIMS

9.7.1   From the date of this Agreement until Completion, in paying claims, the
        Seller shall procure that the Target Subsidiary shall, unless prior
        notice is given to the Buyer and the Buyer's consent is obtained:

        (a)     follow the claim settlements approved by the lead reinsurer on
                any contract of Assumed Reinsurance;



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<PAGE>

        (b)     adhere to the Target Subsidiary's internal claim authorisation
                limits as disclosed to the Buyer prior to the date of this
                Agreement; and

        (c)     determine settlement amounts consistently with the Target
                Subsidiary's practices in effect during the 2002 calendar year
                prior to the date of this Agreement.

9.8     PRE-COMPLETION TRANSACTIONS

9.8.1   For the purposes of this Clause 9.8:

        "LUC GUARANTEE" means the guarantee given by the Target Subsidiary (and
        others) in respect of the obligations of Marketing Building Limited, LUC
        Holdings Limited and London Underwriting Centre Limited contained in the
        superior lease of the London Underwriting Centre dated 17 March 1994 and
        made between (1) The Prudential Assurance Company Limited (2) Market
        Building Limited and (3) the 20 guarantors listed therein, the
        Development Agreement dated 27 February 1990 made between (1) The
        Prudential Assurance Company Limited (2) Market Building Limited (3)
        Market Building Management Services Limited (4) the 20 guarantors listed
        therein and (5) Prudential Development Management Limited, the
        underlease of the Common Parts dated 17 March 1994 made between (1)
        Market Building Limited and (2) The London Underwriting Centre Limited
        and in the Shareholder's Agreement relating to LUC Holdings Limited
        (registered number 3182700) and in any documents supplemental or
        collateral to them;

        "OVERSEAS PROPERTIES" means the Real Property situated outside the UK,
        the details of which are set out in Schedule 5;

        "RESIDENTIAL PROPERTIES" means those properties at Millers Wharf in
        London registered under Title Numbers EGL 299483 (6 Miller's Wharf) and
        EGL 271573 (11 Miller's Wharf); and

        "COMPAQ LEASE AGREEMENT" means the Master Lease Agreement number
        UKCHQ0206 dated 22 August 2000 between Compaq Financial Services Company
        and the Target Subsidiary (including each schedule and any amendments to
        that agreement).

9.8.2   Prior to Completion the Seller shall use reasonable endeavours to
        procure that:

        (a)     each Target Group Company:

                (i)     transfers any interests that it may have in the Overseas
                        Properties to the Seller, one of the Seller's Affiliates
                        or a third party, or surrenders any interest it holds in
                        any such Overseas Properties back to the owner of the
                        superior interest in that Overseas Property;

                (ii)    transfers any interests that it may have in the
                        Residential Properties to the Seller, one of the
                        Seller's Affiliates or a third party for an aggregate
                        price equal to $2,300,000;



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<PAGE>

                (iii)   obtains a release from any obligations that it may have
                        under the LUC Guarantee; and

                (iv)    transfers all of the shares held by any Target Group
                        Company in LUC Holdings Limited to the Seller or as the
                        Seller shall direct and obtains a complete discharge and
                        release of the relevant Target Group Company from any
                        liabilities and claims under the shareholders agreement
                        referred to in the definition of LUC Guarantee in Clause
                        9.8.1 above (the "SHAREHOLDERS AGREEMENT") in
                        consideration for the payment by the Target Subsidiary
                        to the Seller (or an Affiliate of the Seller) of
                        $1,000,000 (one million dollars); and

        (b)     the Target Subsidiary obtains consent from Compaq Financial
                Services Company to the change in control of the Target
                Subsidiary pursuant to Clause 17.1(e) of the Compaq Lease
                Agreement.

9.8.3   If, at Completion, notwithstanding the use of its reasonable endeavours,
        the Seller has been unable to procure any of the events described in
        Clause 9.8.2 (the "OUTSTANDING EVENTS") the Seller shall be required to
        continue to use reasonable endeavours, after Completion, to enable the
        Target Subsidiary and/or the Target Company, as appropriate to fulfil
        the Outstanding Events on terms not materially adverse to the Buyer.

9.8.4   If, following Completion, the Buyer or a Target Group Company incurs or
        is subject to any costs, claims, damages, expenses, losses, liabilities
        or penalties or is required to make any payment (including any rent or
        other outgoings) in connection with the Overseas Properties, the
        Residential Properties, the LUC Guarantee, the Shareholders Agreement or
        the failure of the Seller to obtain the consent referred to under Clause
        9.8.2 in relation to the Compaq Lease Agreement, the Seller hereby
        agrees to pay to the Buyer on demand an amount equal to any such costs,
        claims, damages, expenses, losses, liabilities, penalties or payments.
        The Seller shall be entitled to deduct from such amount such sums as the
        Buyer has received from any third parties in respect of the same matters
        and shall be entitled to recover from the Buyer any amounts paid by the
        Seller to the Buyer that the Buyer recovers from any third parties in
        respect of the same matters.

9.8.5   The Buyer shall at the request and cost of the Seller provide the Seller
        with and procure that the Target Subsidiary offers the Seller all
        reasonable assistance in connection with the fulfilment of any
        Outstanding Event.

9.8.6   The Seller's obligation to use its reasonable endeavours to procure the
        release referred to in clause 9.8.2(c) shall include the obligation to
        enter into a guarantee in the place of the Target Subsidiary on the same
        or similar terms to the LUC Guarantee.

9.9     INVESTED ASSETS

9.9.1   Seven days before Completion the Seller shall provide the Buyer with a
        list of the Invested Assets in which the Target Subsidiary has a
        beneficial interest. The list shall include details of the issuer, the
        relevant security, its CUSIP, its nominal value, its


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<PAGE>

        credit ratings by the Credit Raters as at the date of the list, and such
        other information as the Seller shall reasonably require.

9.9.2   The Seller shall procure that on the Completion Date the Target
        Subsidiary does not have a beneficial interest in any Invested Asset
        which has a rating of below BBB- by Standard & Poor's a division of the
        McGraw-Hill Companies and Baa3 by Moody's Investors Services, Inc
        (together the "CREDIT RATERS") .



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10.     BUYER'S UNDERTAKINGS

10.1    POLICY FOR DISTRIBUTIONS

        The Buyer agrees that, following Completion, and until the payment in
        full of the Completion Balance, it will use all reasonable endeavours to
        maximise the amount of Distributions and as and when Distributions or
        such distributions as are otherwise made to the shareholders of the
        Target Subsidiary, whether of profits or of capital, made by any lawful
        means, including pursuant to a members' voluntary winding-up are paid by
        the Target Subsidiary to the Target Company, it will use its best
        endeavours in its capacity as a shareholder in the Target Company to
        procure that the Target Company pays such amounts to the Buyer either by
        way of dividend or by a share repurchase or reduction and repayment of
        capital, but in each case subject to applicable laws and after making
        appropriate provision for its tax and appropriate reserves for working
        capital and provided always that if it is not possible for a Target
        Group Company to pay a Distribution by way of dividend, the Buyer's
        obligations under this Clause 10.1 shall be subject to the Buyer's
        reasonable discretion in determining the timing of the implementation of
        any other mechanism for the payment of the Distribution having regard to
        the amount of the potential Distribution and the time and cost of
        implementing the relevant mechanism.

10.2    CHANGE OF NAME

10.2.1  The Buyer shall procure that as soon as reasonably practicable after the
        Completion Date, and in any event within 30 days of the Completion Date,
        all of the business letters, notices, bills, cheques, orders, invoices,
        receipts and other correspondence of the Target Group Companies are
        amended so as to remove any trading name or trade mark which: (i)
        includes the acronym "CNA" or any acronym or words similar thereto; or
        (ii) is likely to cause a third party to believe that the Target Group
        Companies are connected with or have an interest in the business of the
        Seller. The Buyer shall further procure that, as soon as reasonably
        practicable after the Completion Date (but in no event more than 30 days
        after the Completion Date), the names of the Target Group Companies are
        changed so as not to include the acronym "CNA" or any acronym or words
        similar thereto.

10.2.2  The Seller shall grant the Buyer the right to use the acronym "CNA" on
        the terms of the Trade Mark Licence Agreement in the Agreed Form for the
        specific use set out therein.

10.2.3  The Buyer agrees that prior to the Completion Date the Seller shall be
        entitled to arrange for the transfer from the Target Group Companies to
        the Seller or its Affiliates of any and all registered trade marks and
        domain names currently registered or held in the name of the Target
        Company or the Target Subsidiary.

10.3    SELLER'S ACCESS TO RECORDS



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        For a period of one year after the Completion Date, the Buyer shall
        procure that the Target Group Companies shall allow the Seller's
        representatives reasonable access upon 48 hours written notice, to the
        books and records of the Target Group to the extent that such access may
        reasonably be required by the Seller in connection with matters related
        to or affected by the operations of the Target Group prior to the
        Completion Date (provided that such access shall be procured by the
        Buyer for a period of six years after Completion where such access may
        be required by the Seller in connection with the taxation of the Seller
        or any of its Affiliates). Such access shall be afforded during normal
        business hours. The obligations of the Buyer under this clause shall not
        extend to allowing access to information which is in the reasonable
        opinion of the Buyer regarded as confidential to the activities of the
        Target Group or is otherwise than in connection with the Target Group
        Companies. The Seller shall:

        (a)     bear all of its own costs in implementing this Clause 10.3; and

        (b)     reimburse the Buyer and/or its Affiliates for its out-of-pocket
                expenses properly incurred in implementing this Clause 10.3
                provided that:

                (i)     such costs are agreed in advance in writing with the
                        Seller and/or its Affiliates, as applicable; and

                (ii)    the Buyer shall provide reasonable evidence of such
                        costs before the Seller shall be obliged to reimburse it
                        or its Affiliate.

        If the Buyer wishes to dispose of any of such books and records prior to
        the expiration of the six year period referred to above the Buyer shall,
        prior to doing so, give the Seller a reasonable opportunity, at the
        Seller's expense, to segregate and remove such books and records as the
        Seller may select.



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11.     BUYER'S WARRANTIES

        The Buyer warrants that:

11.1    INCORPORATION AND EXISTENCE

        The Buyer is a limited company incorporated under English law and has
        been in continuous existence since incorporation.

11.2    RIGHT, POWER, AUTHORITY AND ACTION

11.2.1  The Buyer has the right, power and authority and has taken all action
        necessary to execute and deliver, and to exercise its rights and perform
        its obligations under, this Agreement and each document to be executed
        at or before Completion.

11.2.2  The Buyer has the right, power and authority to conduct its business as
        conducted at the date of this Agreement.

11.3    BINDING AGREEMENTS

        The Buyer's obligations under this Agreement and each document to be
        executed at or before Completion are, or when the relevant document is
        executed will be, enforceable in accordance with their terms.

11.4    WINDING UP AND ADMINISTRATION

        No order has been made, petition presented or resolution passed for the
        winding up of the Buyer or for the appointment of a provisional
        liquidator to the Buyer or for an administration order in respect of the
        Buyer.

11.5    RECEIVERSHIP

        No receiver or receiver and manager has been appointed of the whole or
        part of the Buyer's business or assets.

11.6    VOLUNTARY ARRANGEMENTS

        No voluntary arrangement has been proposed under section 1 of the
        Insolvency Act 1986 in respect of the Buyer. No compromise or
        arrangement has been proposed, agreed to or sanctioned under section 425
        of the Act in respect of the Buyer.

11.7    INSOLVENCY

        The Buyer is not insolvent or unable to pay its debts within the meaning
        of section 123 of the Insolvency Act 1986.

11.8    PAYMENT OF DEBTS

        The Buyer has not stopped paying its debts as they fall due.



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11.9    DISTRESS ETC.

        No distress, execution or other process has been levied on an asset of
        the Buyer.

11.10   UNSATISFIED JUDGMENTS

        There is no unsatisfied judgment or court order outstanding against the
        Buyer.

11.11   STRIKING OUT

        No action is being taken by the registrar of companies to strike the
        Buyer off the register under section 652 of the Companies Act.

11.12   FSA

        In respect of the Buyer's application to the FSA which is to be made
        pursuant to Clause 4.2.1 of this Agreement, the Buyer knows of no matter
        not described in the letter from the Buyer to the Seller of even date
        herewith relating to any proposed controller, director of a proposed
        controller or proposed approved person in respect of whom details are to
        be given to the FSA by the Buyer which might cause the FSA to refuse to
        give its approval for the purposes of Clause 4.1(a) of this Agreement.



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12.     PENSIONS

12.1    A deed substituting CNA Europe Holdings Limited for the Target Company
        as principal employer in relation to the CNA Re Management Company
        Limited Retirement Benefits Plan (1977) is attached to this Agreement,
        signed by the trustees of the Seller's Scheme and will take effect on
        Completion. The Seller shall procure that the Target Company and CNA
        Europe Holdings Limited execute this deed before Completion. The Seller
        shall use its best endeavours and take whatever steps may be necessary
        to procure that the approval of the Inland Revenue is given to the
        substitution prior to Completion.

12.2    If the Inland Revenue shall confirm that the substitution is
        satisfactory from their point of view and does not affect the Seller's
        Scheme's exempt approved status then, following Completion, the Seller
        shall procure that the Inland Revenue Contributions Agency is notified
        of the cessation of participation of the Target Company and that the
        contracting out certificate held by the Target Company shall, from
        Completion, be held by CNA Europe Holdings Limited. The Buyer shall, and
        shall procure that the Target Company shall, co-operate with the Seller
        to procure this result.

12.3    If the Inland Revenue confirms that the substitution is not satisfactory
        from their point of view, then the Target Company shall remain the
        principal employer of the Seller's Scheme. However:

        (a)     accrual of benefits under the Seller's Scheme shall cease
                effective on Completion and the parties shall give (or procure
                the giving of) such notices to effect this as may be required;

        (b)     the Buyer shall procure that the Target Company shall take such
                steps, sign such notices and deeds and resolutions as the Seller
                shall require in relation to the Seller's Scheme and shall
                generally act in accordance with the instructions of the Seller
                in relation to the Seller's Scheme, in each case provided that
                such actions would not be in breach of any applicable laws,
                Inland Revenue requirements or any duties of the Target Company
                to the members of the Seller's Scheme.

12.4    In either case (but provided, if Clause 12.3 applies, that the Target
        Company has materially complied with the Seller's instructions) the
        Seller shall indemnify the Buyer and the Buyer as trustee for the Target
        Company against any liability (including any liability under section 75
        of the Pensions Act 1995) on the Buyer or the Target Company to make any
        further payments to the Seller's Scheme or to the trustees of the
        Seller's Scheme on or after the Completion Date and, if clause 12.3
        applies, against any liability which may otherwise arise on the Target
        Company in relation to the Seller's Scheme, including the Target
        Company's own reasonable costs and expenses and any liability to pay
        expenses incurred by the trustees.



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13.     NOVATION

13.1    If, following Completion, the Buyer at its sole election notifies the
        Seller that it intends to transfer the Sale Shares to one of its
        Affiliates (the "NEW BUYER") and to exercise its rights if it so desires
        to novate this Agreement to the New Buyer in accordance with Clause
        16.5.4, notwithstanding any other provision of this Agreement:

13.1.1  at the request of the Buyer the Seller shall promptly take all steps
        necessary to release the Sale Shares from the Distribution Security; and

13.1.2  upon the transfer of the Sale Shares to the New Buyer the Buyer shall
        procure that the New Buyer executes a security deed pursuant to which
        the New Buyer will grant the Seller a first charge over the Sale Shares
        in the same form as the Distribution Security,

        Provided that the Seller shall not be obliged to agree to that novation:

        (a)     if the result of the novation is that any provider of debt or
                equity finance to the Target Subsidiary would rank ahead of the
                Seller with respect to payments or distributions; and

        (b)     unless the Buyer provides the Seller with a legal opinion of a
                reputable law firm in terms reasonably satisfactory to the
                Seller confirming that the new distribution security to be
                granted by the New Buyer will be a valid first charge and
                enforceable in accordance with its terms.

13.2    In the event that the Buyer transfers the Sale Shares to the New Buyer
        and exercises its rights to novate this Agreement to the New Buyer
        pursuant to Clause 13.1 (the "BUYER'S TRANSFER"), then where:

13.2.1  the New Buyer is required by law to make a deduction or withholding when
        the Buyer would not have been required by law to have made such
        deduction or withholding had the Buyer made the payment where the
        Buyer's Transfer had not occurred, then the New Buyer shall pay to the
        Seller a sum equal to the amount that the Seller would otherwise have
        received in the absence of any such deduction or withholding; and

13.2.2  any payment made by the New Buyer to the Seller is subject to tax in the
        hands of the Seller, then where such payment would not have been subject
        to tax if it had been made by the Buyer where the Buyer's Transfer had
        not occurred, then the New Buyer shall pay to the Seller such amount as
        will ensure that the net amount received in respect of such payment by
        the Seller after such tax is the same as it would have been were the
        payment not so subject to such tax.



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14.     RESTRUCTURING

14.1    Following Completion, the Buyer may wish at its sole election to
        implement a restructuring involving one or more of the following actions
        (the "RESTRUCTURING"):

14.1.1  the incorporation of a new company ("NEWCO") by the Buyer or one of its
        Affiliates;

14.1.2  the novation of the Management Agreement from the Manager, the Target
        Company and the Target Subsidiary to the Manager, NewCo and the Target
        Subsidiary;

14.1.3  the transfer of employees and certain operating assets of the Target
        Company to NewCo;

14.1.4  the transfer by the Target Company to the Buyer of all of the shares it
        holds in the Target Subsidiary; and

14.1.5  the member's voluntary winding-up of the Target Company.

14.2    The Seller acknowledges that the Buyer may wish to implement the
        Restructuring, and the parties hereby agree that, in connection with a
        Restructuring and, notwithstanding any other provision of this
        Agreement:

14.2.1  at the request of the Buyer, the Seller shall promptly take all steps
        necessary to release the Sale Shares from the Distribution Security;

14.2.2  promptly following the Restructuring, the Buyer shall execute a Security
        Deed pursuant to which the Buyer will grant to the Seller a first charge
        over the entire issued share capital of the Target Subsidiary in the
        same form as the Distribution Security;

14.2.3  if appropriate the definition of "MANAGEMENT AGREEMENT" in Clause 1.1 of
        this Agreement shall be substituted by the following:

        ""MANAGEMENT AGREEMENT" means the agreement entered into between the
        Target Subsidiary, the Manager and NewCo;"

14.2.4  at the request of the Buyer, the Seller shall take all steps necessary
        to re-assign the rights assigned by the Manager to the Seller pursuant
        to the Management Fee Security and shall release and discharge the
        Management Fee Security;

14.2.5  if appropriate promptly following the Re-structuring, the Manager shall
        execute a security deed pursuant to which the Manager will assign by way
        of security to the Seller, and grant the Seller a first charge over,
        certain of its rights to payment of the Management Fee in the same form
        as the Management Fee Security;

14.2.6  if appropriate the definition of "MANAGEMENT FEE" in Clause 1.1 of this
        Agreement shall be amended by substituting paragraph (ii) of that
        definition by the following:



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        "costs necessarily and properly incurred by NewCo in providing services
        pursuant to the Management Agreement and reimbursement by the Target
        Subsidiary to NewCo pursuant to Paragraph 1.1 of Schedule 3 to the
        Management Agreement provided that such costs are at commercially
        reasonable rates;"

14.2.7  if appropriate the definition of "TRIGGER DISTRIBUTIONS" in Clause 1.1
        of this Agreement shall be substituted by the following:

        "TRIGGER DISTRIBUTIONS" means Distributions (and distributions as are
        otherwise made to the shareholders of the Target Subsidiary, whether of
        profits or capital, made by any lawful means, including pursuant to a
        members' voluntary winding-up);"

14.2.8  if appropriate Clause 10.1 of this Agreement shall be substituted by the
        following:

        "The Buyer agrees that, following Completion and until the payment in
        full of the Completion Balance, it will use all reasonable endeavors to
        maximize the amount of Distributions provided always that if it is not
        possible for the Target Subsidiary to pay a Distribution by way of
        dividend, the Buyer's obligations under this Clause 10.1 shall be
        subject to the Buyer's reasonable discretion in determining the timing
        of the implementation of any other mechanism for the payment of the
        Distribution having regard to the amount of the potential Distribution
        and the time and cost of implementing the relevant mechanism."

14.2.9  The Seller shall not be obliged to agree to any restructuring:

        (a)     if the result of the Restructuring is that any provider of debt
                or equity finance to the Target Subsidiary would rank ahead of
                the Seller with respect to payments or distributions; and

        (b)     unless the Buyer provides the Seller with a legal opinion of a
                reputable law firm in terms reasonably satisfactory to the
                Seller confirming that the new distribution security to be
                granted by the Buyer and the new management fee security will
                each be a valid first charge and enforceable in accordance with
                its terms.



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15.     GOVERNING LAW AND DISPUTES

15.1    GOVERNING LAW

        This Agreement and all matters arising from or connected with it are
        governed by, and shall be construed in accordance with, the laws of
        England.

15.2    RESOLUTION BY THE COURTS

15.2.1  Save where this Agreement provides for the reference of disputed matters
        to an Expert, the courts of England shall have exclusive jurisdiction to
        settle any Disputes and hear and decide any Proceedings.

15.2.2  The parties agree that the courts referred to in Clause 15.2.1 are the
        most appropriate and convenient courts to settle any Disputes and hear
        and decide any Proceedings and, accordingly, that they will not argue to
        the contrary.

15.3    SERVICE OF PROCESS

15.3.1  The Seller irrevocably agrees with the Buyer that any Service Document
        may be sufficiently and effectively served on it in connection with any
        Proceedings in England and Wales by service on its process agent
        provided that a copy of the Service Document is also sent by fax on the
        same day and in accordance with Clause 16.16 to the General Counsel of
        the Seller.

15.3.2  For the purposes of this Clause, the Seller appoints as its process
        agent in connection with Proceedings in England and Wales, Sisec Limited
        of 21 Holborn Viaduct, London EC1A 2DY.

15.3.3  The Seller agrees to maintain the appointment of its process agent (and
        any replacement process agent appointed pursuant to this Clause) and
        that it shall not withdraw the appointment of any such process agent
        until its replacement shall have been validly appointed and the name and
        address of the replacement process agent notified to the Buyer.

15.3.4  If the process agent referred to in Clause 15.3.2 (or any replacement
        process agent appointed pursuant to this Clause) at any time ceases for
        any reason to act as such, the Seller shall appoint a replacement
        process agent with an address for service in England or Wales, and shall
        notify the Buyer of the name and address of the replacement process
        agent. If the Seller fails to appoint a replacement process agent or
        notify the Buyer of the name and address of a replacement process agent
        as required by this Clause, the Buyer shall be entitled by notice to the
        Seller to appoint such a replacement process agent to act on the
        Seller's behalf. The Seller shall bear all the costs and expenses of
        appointing a replacement process agent by the Buyer in these
        circumstances.



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15.3.5  Any Service Document served pursuant to this Clause shall be marked for
        the attention of the process agent appointed pursuant to this Clause and
        addressed to the address set out in Clause 15.3.2 or to his address
        notified pursuant to Clause 15.3.4.

15.3.6  Any Service Document marked for the attention of the process agent and
        addressed to the address set out in Clause 15.3.2 or at the address
        notified pursuant to Clause 15.3.4 shall be deemed to have been duly
        served if:

        (a)     left at such address, when it is left; or

        (b)     sent by first class post to such address, 2 business days after
                the date of posting.

15.3.7  The Buyer shall send by post to the Seller in accordance with Clause
        16.16 a copy of any Service Document served by it (or on its behalf) on
        a process agent pursuant to this Clause, but no failure or delay in
        doing so shall prejudice the effectiveness of service of the Service
        Document in accordance with this Clause.

15.3.8  The Seller agrees that failure by any process agent to give notice of
        any process to it or give a copy of any Service Document served on it
        shall not impair the validity of such service or of any Proceedings
        based on that process.

15.3.9  Nothing contained in Clause 15.3.1 affects the right to serve a Service
        Document in another manner permitted by law.

15.4    CONSENT TO ENFORCEMENT

        Each party hereby consents generally in respect of any Proceedings to
        the giving of any relief or the issue of any process in connection with
        such Proceedings including the making, enforcement or execution against
        any property (irrespective of its use or intended use) of any order or
        judgment which may be made or given in such Proceedings.

15.5    CURRENCY INDEMNITY

15.5.1  If any sum due from one party (the "FIRST PARTY") to the other party
        (the "SECOND PARTY") under this Agreement or any award, order or
        judgment given or made in relation to this Agreement has to be converted
        from the currency (the "FIRST CURRENCY") in which it is payable under
        this Agreement or under such order or judgment into another currency
        (the "SECOND CURRENCY") for the purposes of:

        (a)     making or filing a claim or proof against either party; or

        (b)     obtaining an award, order or judgment in any court or other
                tribunal; or

        (c)     enforcing any award, order or judgment given or made in relation
                to this Agreement,

        then, the first party shall, if practicable, on the day of receipt of
        such sum paid to it in satisfaction, in whole or in part of such award,
        order or judgment, or if not practicable



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        on such day, as soon as is reasonably practicable thereafter, convert
        such sum from the second currency into the first currency at the best
        rate or rates of exchange (taking into account the amount to be
        exchanged and the location in which such exchange is effected)
        reasonably available to the second party on the day of conversion, and
        if the amount resulting from such conversion (net of all commissions,
        charges, fees and expenses paid):

        (i)     is less than the amount of the award, order or judgment in the
                first currency, then the second party shall pay such difference
                to the first party within 15 days of a demand for it; or

        (ii)    is more than the amount of the award, order or judgment in the
                first currency, then the first party shall pay such difference
                to the second party within 15 days of a demand for the same.

15.5.2  Each demand submitted by a party pursuant to Clause 15.5.1 shall be
        accompanied by a calculation of the computation made together with such
        supporting evidence to substantiate the demand.



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16.     MISCELLANEOUS PROVISIONS

16.1    ANNOUNCEMENTS

16.1.1  Neither party may, during the period commencing on the date of this
        Agreement and ending on the Completion Date or earlier termination of
        this Agreement, make or send a public announcement, communication or
        circular concerning the transactions referred to in this Agreement or in
        relation to its provisions unless it has first obtained the other
        party's written consent.

16.1.2  The restrictions in this Clause shall not apply to a public
        announcement, communication or circular:

        (a)     if made or sent to any Affiliate of such party; or

        (b)     if made or sent to any outside consultants or advisers engaged
                by or on behalf of such party and acting in that capacity; or

        (c)     to the extent required by the rules of a relevant and recognised
                stock exchange or regulatory or governmental body to which the
                relevant party submits, whether or not the requirement for
                information has the force of law, if the party required to make
                or send it has, if practicable, first consulted and taken into
                account the reasonable requirements of the other party; or

        (d)     to the extent required by any applicable laws or pursuant to an
                order of any court of competent jurisdiction if the party
                required to make or send it has, if practicable, first consulted
                and taken into account the reasonable requirements of the other
                party; or

        (e)     if made or sent to any insurer under a policy of insurance; or

        (f)     if made or sent to directors, employees and officers of such
                party or of its Affiliates.

16.2    CONFIDENTIALITY

16.2.1  Each party shall at all times:

        (a)     use its reasonable endeavours to keep all data or information
                (whether technical, commercial or financial) acquired under or
                pursuant to this Agreement (including information relating to
                the other party's products, operations, processes, plans or
                intention, product information, know-how, trade secrets, market
                opportunities and business affairs) strictly confidential and
                shall not disclose this to any other person; and



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        (b)     not use any data or information referred to in paragraph (a)
                above for any purpose other than in relation to the proper
                performance of its obligations and exercise of its rights under
                this Agreement.

16.2.2  The provisions of this Clause shall not apply to:

        (a)     any information in the public domain at the time of disclosure,
                otherwise than by breach of this Agreement;

        (b)     information which passes into the public domain after disclosure
                through no act or default of the recipient party;

        (c)     information in the possession of, or independently generated by,
                a party before that information was disclosed to it by or on
                behalf of the other party and which was not obtained under, or
                generated in breach of, any obligation of confidentiality; and

        (d)     information obtained from a third party who is free to disclose
                the same, and which is not obtained under any obligation of
                confidentiality.

16.2.3  Following Completion, the Buyer shall not, and shall procure that its
        Affiliates do not, disclose information contained in the CNA Re Pricing
        Handbook, an example of which, dated October 2000, has been made
        available to the Buyer during its investigation of the Target Group to
        any third party or use such information other than for the purpose of
        running off the business of the Target Subsidiary.

16.2.4  A party shall be entitled to disclose any data or information referred
        to above without the prior written consent of the other party if such
        disclosure is made in good faith:

        (a)     to any Affiliate of such party, having made it aware of the
                requirements of this Clause; or

        (b)     to any outside consultants or advisers engaged by or on behalf
                of such party and acting in that capacity, having made them
                aware of the requirements of this Clause; or

        (c)     to the extent required by the rules of a relevant and recognised
                stock exchange or regulatory or governmental body to which the
                relevant party submits, whether or not the requirement for
                information has the force of law; or

        (d)     to the extent required by any applicable laws or pursuant to an
                order of any court of competent jurisdiction; or

        (e)     to any insurer under a policy of insurance; or

        (f)     to directors, employees and officers of such party having made
                them aware of the requirements of this Clause,

                provided that:



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                (i)     any such information disclosed pursuant to paragraph (c)
                        or (d) above, shall be disclosed only if the party has,
                        if practicable, first consulted and taken into account
                        the reasonable requirements of the other party; and

                (ii)    such disclosure is necessary to enable such party to
                        perform this Agreement or to protect or enforce its
                        rights under this Agreement or any other agreement
                        referred to in it.

16.2.5  The restrictions contained in this Clause 16.2 shall continue to apply
        after the date of this Agreement without limit in time.

16.3    THE EURO

16.3.1  In this Clause:

        (a)     the "EURO" means the single or unified European currency
                (whether known as the euro or otherwise) as contemplated in the
                Treaty of Rome of 25 March 1957, as amended by the Single
                European Act 1986 and the Treaty on European Union which was
                signed at Maastricht on 1 February 1992;

        (b)     the "EMU REGULATIONS" means Regulation No. 1103/97 adopted by
                the European Council on 20 June 1997 and Regulation No. 974/98
                adopted by the European Council on 2 May 1998; and

        (c)     the expression "EXTENSION OF EMU" means:

                (i)     the extension of European economic and monetary union to
                        any part of the European Union;

                (ii)    the extension of the introduction at any time of the
                        euro to any part of the European Union; or

                (iii)   any events associated with any of the matters described
                        in paragraphs (a) and (b) above,

        in each case, as contemplated in the Treaty of Rome of 25 March 1957, as
        amended by the Single European Act 1986 and the Treaty on European union
        which was signed at Maastricht on 1 February 1992 and "NON-EXTENSION OF
        EMU" shall be construed accordingly.

16.3.2  The parties agree that the extension of EMU (or the non-extension of
        EMU) shall not result in the discharge, cancellation, rescission or
        termination, in whole or in part, of this Agreement or give any party
        the right to cancel, rescind, terminate or vary this Agreement, in whole
        or in part.

16.3.3  Unless the parties agree otherwise, at any time at which it is so
        permitted under any relevant law (including the EMU Regulations), a
        party may not make any payment under or in connection with this
        Agreement which is expressed to be payable in dollars in euro.



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<PAGE>

16.3.4  If at any time the euro is introduced to the United Kingdom and as a
        result sterling is replaced by the euro, then the amounts of sterling
        referred to in this Agreement shall be deemed converted into units of
        the euro at the rate prescribed by the EMU Regulations or any other
        implementing regulation or directive which prescribes the rate of such
        conversion.

16.3.5  The parties shall from time to time amend the provisions of this
        Agreement, if either party notifies the other that any amendments are
        necessary (including with respect to the definitions of "Business Day",
        "Reference Banks", and "Reference Exchange Rate") as a result of the
        occurrence of EMU. All such amendments shall be made on the basis that,
        following such amendments, each party will be in the same financial
        position as it would have been had the occurrence of EMU not taken
        place.

16.3.6  If the parties are unable to agree any amendments to this Agreement to
        be made pursuant to this Clause, either party may refer the matter in
        dispute to the Expert for determination in accordance with this
        Agreement.

16.4    LATE PAYMENTS AND DEFAULT INTEREST

        If a party fails to pay any amount payable by it under this Agreement,
        it shall forthwith on demand by the party to whom the payment was due to
        be made pay interest on the overdue amount from the due date up to the
        date of actual payment, after as well as before judgment, at LIBOR plus
        3 per cent. Such interest shall accrue on a daily basis and be
        compounded quarterly.

16.5    ASSIGNMENTS AND NOVATION

16.5.1  Except as provided in Clauses 16.5.2, 16.5.3 and 16.5.4, a party shall
        not assign, transfer, create any encumbrance in or over, or deal in any
        other manner with this Agreement or a right or obligation under this
        Agreement (or purport to do any of these things) without having first
        obtained the other party's written consent (which consent shall not be
        unreasonably withheld, conditioned or delayed). Each party is entering
        into this Agreement for its benefit and not for the benefit of another
        person.

16.5.2  The Buyer shall be entitled at any time after Completion to assign its
        rights under this Agreement to any of its Affiliates provided that such
        party shall procure that any such Affiliate to whom it assigns any of
        its rights under this Agreement shall assign such rights back to that
        party immediately prior to it ceasing to be an Affiliate. Any assignment
        by a party under this Clause shall:

        (a)     be subject to the condition that the assigning party shall not
                be relieved of any of its obligations under this Agreement; and

        (b)     be made on terms that the assignee acknowledges that the other
                party may continue to deal exclusively with the assigning party
                in respect of all matters relating to this Agreement at all
                times unless and until the assignee notifies both parties that
                it is exercising its rights as assignee.


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<PAGE>

16.5.3  This Agreement shall be binding upon, and inure to the benefit of the
        parties and their respective successors and their permitted assignees.

16.5.4  Subject to Clauses 13 and 14, the Seller agrees that, upon the request
        of the Buyer of its successors or permitted assignees, this Agreement
        may be novated (in whole) in favour of any Affiliate of the Buyer
        (which, if such novation is completed after the Completion Date, is the
        beneficial owner for the time being of the Sale Shares) and the Seller
        shall execute a novation agreement substantially in the terms set out in
        Schedule 8.

16.6    FURTHER ASSURANCE

        Each party shall do and execute, or arrange for the doing and executing
        of, each necessary act, document and thing reasonably within its power
        and as may be reasonably requested of it by the other party by written
        notice to implement this Agreement.

16.7    COSTS

        Except where this Agreement provides otherwise, each party shall pay its
        own costs relating to the negotiation, preparation, execution and
        implementation by it of this Agreement and of each document referred to
        in it.

16.8    AMENDMENTS

        This Agreement may not be amended except by written agreement between
        the parties and no other purported amendment shall be effective.

16.9    NO WAIVER

16.9.1  No waiver by either party of any default or defaults by the other party
        in the performance of any of the provisions of this Agreement:

        (a)     shall operate or be construed as a waiver of any other or
                further default or defaults whether of a like or different
                character; or

        (b)     shall be effective unless in writing duly executed by a duly
                authorised representative of such party.

16.9.2  Neither the failure by either party to insist on any occasion upon the
        performance of the terms, conditions, and provisions of this Agreement
        nor time or other indulgence granted by one party to the other shall act
        as a waiver of such breach or acceptance of any variation or the
        relinquishment of any such right or any other right under this
        Agreement, which shall remain in full force and effect.

16.10   DISCRETION

        Except where this Agreement expressly requires a party to act fairly or
        reasonably (including any provision which does not allow a party to
        unreasonably withhold,



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<PAGE>

        condition or delay its consent or approval), a party may exercise any
        discretion given to it under this Agreement in its absolute discretion
        and the exercise of that discretion shall not be challengeable on
        grounds that the party did not exercise its discretion fairly or
        reasonably and shall not be subject to the dispute resolution procedures
        in this Agreement.

16.11   ENTIRETY

16.11.1 This Agreement and the Schedules are intended by the parties as the
        final expression of their agreement and are intended also as a complete
        and exclusive statement of the terms of their agreement.

16.11.2 All prior written or oral understandings, offers or other communications
        of every kind pertaining to this Agreement are abrogated and withdrawn.

16.11.3 The Pre-Contract Agreements shall cease to have effect from the date of
        this Agreement except that termination does not affect any liability of
        either party to the other arising from a breach of any legally binding
        provision of a Pre-Contract Agreement before the date of such
        termination.

16.12   LIABILITIES, RIGHTS AND REMEDIES

16.12.1 Except where this Agreement expressly provides to the contrary, the
        rights and remedies contained in this Agreement are cumulative and not
        exclusive of rights and remedies provided by law.

16.12.2 Except to the extent they have been performed and except where this
        Agreement expressly provides to the contrary, the obligations (including
        all warranties, representations and indemnities) contained in this
        Agreement remain in force notwithstanding Completion of this Agreement.

16.12.3 The parties do not intend any term of this Agreement to be enforceable
        pursuant to the Contracts (Rights of Third Parties) Act 1999 (the "CRTP
        ACT") by any person who is not a party to this Agreement.

16.13   COUNTERPARTS

16.13.1 This Agreement may be executed in any number of counterparts each of
        which when executed and delivered is an original, but all the
        counterparts together constitute the same document.

16.13.2 If this Agreement is subject to stamp duty and counterparts or
        duplicates of this Agreement are executed, the Buyer shall, as soon as
        practicable after the date of this Agreement, procure that all the
        counterparts or duplicates are duly stamped and as soon as they are so
        stamped shall deliver a counterpart or duplicate to the Seller.



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<PAGE>

16.14   SEVERABILITY

        If any provision of this Agreement is held to be illegal or
        unenforceable, wholly or partly, under any applicable law, such
        provision, or, as the case may be, part of such provision, shall to that
        extent be deemed not to form part of this Agreement. The enforceability
        of the remainder of this Agreement, however, shall not be affected.

16.15   PAYMENTS

        Wherever in this Agreement provision is made for the payment by one
        party to another, such payment shall be effected by crediting the
        account specified in the Payment Account Details of the party entitled
        to payment by way of CHAPS on or before the due date for payment unless
        the payee by notice to the payer, not later than three business days
        prior to the due date for payment, elects to be paid by banker's draft
        drawn on any international bank reasonably acceptable to the payer and
        having an office in London. Payment of such sum shall be a good
        discharge to the payer of its obligation to make such payment.

16.16   NOTICES

16.16.1 Save as otherwise provided in this Agreement, all notices which are
        required or permitted under this Agreement shall:

        (a)     be in writing;

        (b)     be in the English language; and

        (c)     be delivered personally or sent by registered post or pre-paid
                recorded delivery or fax, addressed as follows:

        If to the Seller:  CNA Plaza

                           333 South Wabash Avenue

                           Chicago

                           Illinois 60685

                           USA

        Attention:         The Secretary

        Fax No.:           001 312 822 1297

        If to the Buyer:   Tawa UK Limited

                           10 Fenchurch Avenue

                           London  EC3M 5BN



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<PAGE>

        Attention:         (1) The Chairman; and (2) The Chief Executive Officer

        Fax No.:           +44 20 7665 6501

        with a copy to:    LeBoeuf, Lamb, Greene & MacRae

                           No. 1 Minster Court

                           Mincing Lane

                           London  EC3R 7AA

        Fax No.:           +44 20 7459 5099

        Attention:         William C. Marcoux

16.16.2 In the absence of evidence of earlier receipt, a notice or communication
        shall be deemed given:

        (a)     if delivered personally, when left at the address referred to
                above;

        (b)     if sent by prepaid recorded delivery, or registered post at
                10.00 a.m. on the third business day following the date of
                posting; and

        (c)     if sent by fax, at the time of transmission (provided that the
                transmission is validly receipted).

16.16.3 A party may by notice of at least 10 business days to the other party
        change the address or fax numbers to which such notices and
        communications to it are to be delivered.

16.17   EXECUTION AND DELIVERY OF DOCUMENTS

        All agreements or certificates delivered in connection with the
        transactions contemplated by this Agreement shall be deemed to be
        delivered by the companies executing the same, and the individual
        officers executing the same shall not be personally liable thereon.



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                                   SCHEDULE 1

         INFORMATION ABOUT THE TARGET COMPANY AND THE TARGET SUBSIDIARY

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]

                                   SCHEDULE 2

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]

                 ITEMS FOR DELIVERY BY THE SELLER AT COMPLETION

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]

                                   SCHEDULE 3

                                   WARRANTIES

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]

                                   SCHEDULE 4

                            ACTION PENDING COMPLETION

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]

                                   SCHEDULE 5

                               THE REAL PROPERTIES

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]

                                   SCHEDULE 6

                              INTELLECTUAL PROPERTY

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]


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                                   SCHEDULE 7

                                     PART I

                              COMPLETION ADJUSTMENT




1.      INTERPRETATION


        In this Schedule, where the context admits:

                (a)     the "ACCOUNTS" and the "PRO FORMA BALANCE SHEET" and any
                        other defined term used in this Schedule shall have the
                        same meanings as in the Agreement and the Schedules;

                (b)     "COMPLETION ACCOUNTS" means the accounts prepared in
                        accordance with Clause 2 and agreed or determined in
                        accordance with Clause 3.5;

                (c)     the "MARK TO MARKET" of Invested Assets on any
                        particular day means the determination of a market price
                        of Invested Assets agreed or determined in accordance
                        with Clause 3.2:

                        (i)     in a consistent process to that employed by the
                                Seller at 31 December, 2001, by reference to the
                                respective pricing source (trustee or money
                                manager), except that all such pricing sources
                                shall be directed to utilize a bid price
                                methodology ; or

                        (ii)    to the extent that the pricing source is unable
                                to provide a bid price they shall be directed to
                                utilize a generally recognised approximation of
                                a bid price methodology


                        and "MARKED TO MARKET" shall be construed accordingly;
                        and

                (d)     "CLAUSE" refers to the relevant paragraph of this
                        Schedule 7, unless otherwise stated.

2.      COMPLETION ACCOUNTS

2.1     PREPARATION

        The Buyer shall as soon as practicable, and in any event within 45 days
        after Completion, procure that accounts be prepared as of the Completion
        Date (which shall be as of the last day of a calendar month) for the
        Target Group Companies in accordance with this Schedule 7.



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2.2     DESCRIPTION

        The Completion Accounts shall consist of a consolidated balance sheet
        (which shall be in the form of the Pro Forma Balance Sheet, analysed
        between the relevant headings/columns as shown in tab "Treatment of
        Proforma Balance Sheet" in the Worked Example, unless agreed otherwise
        in writing by the Buyer and the Seller) of the Target Company and the
        Target Subsidiary as at the close of business on the Completion Date and
        a consolidated profit and loss account of the Target Company and the
        Target Subsidiary in respect of the period from 1 January 2002 to the
        Completion Date (both dates inclusive).

2.3     REQUIREMENTS

2.3.1   Except to the extent otherwise expressly required or provided in the
        Agreement, or in the Pro Forma Balance Sheet, the Completion Accounts
        shall:

                (a)     subject to Clauses 2.3.1(f) to (h), 2.3.2 and 2.3.3:

                        (i)     be prepared on a proper basis and consistent
                                with the bases and policies of accounting as
                                applied or adopted in preparing the Accounts
                                (including, for the avoidance of doubt, those
                                bases and policies applied or adopted in
                                establishing the bad debt allowance in the
                                Accounts);

                        (ii)    be prepared in accordance with the law and
                                applicable standards, principles and practices
                                generally accepted in the United Kingdom
                                (including the Statement of Recommended Practice
                                on Accounting for Insurance Business issued by
                                the Association of British Insurers in 1998);
                                and

                        (iii)   be prepared in accordance with the applicable
                                requirements of the Companies Act applying to
                                insurance companies as interpreted by the Target
                                Company and Target Subsidiary as at 31 December
                                2001, excluding required notes and related
                                disclosures thereto (subject to Clause 2.3.1(d)
                                below);

                (b)     show a true and fair view of the consolidated assets,
                        liabilities and state of affairs of the Target Group as
                        at the Completion Date and the consolidated profit (or
                        loss) of the Target Company and the Target Subsidiary
                        for the period from 1 January 2002 to the Completion
                        Date;

                (c)     contain the reconciliation between the consolidated
                        audited balance sheet of the Target Group as at 31
                        December 2001 and the Pro Forma Balance Sheet and the
                        Completion Accounts shall assume the opening position as
                        at 1 January 2002 for calculating the consolidated
                        profit (or loss) of the Target Group for the period 1
                        January 2002 to the Completion Date as the Pro Forma
                        Balance Sheet;



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<PAGE>

                (d)     include the information necessary for the calculation of
                        the Completion Adjustment, including a version of tab
                        "Illustrative unwinding of proforma balance sheet" in
                        the worked example using actual data;

                (e)     identify and take into account inwards payments and
                        outwards receipts arising from all commutations;

                (f)     value the Invested Assets (excluding accrued but unpaid
                        interest) of the Target Group Companies as at the
                        Completion Date at their Marked to Market value as
                        determined in accordance with Clause 3.2;

                (g)     not include any deferred tax assets; and

                (h)     not include any equalisation provision as required by
                        Schedule 9A to the Companies Act 1985.

2.3.2   The liability for restructuring of $6,500,000 (six million and five
        hundred thousand dollars) included in the Target Group's Accounts will
        be recalculated in the Completion Accounts as follows:

                (a)     the provisions in respect of the continuing obligations
                        under or related to Overseas Properties will be released
                        to the profit and loss account (as the Buyer and the
                        Seller have reached an agreement) in respect of such
                        obligations as set out in Clause 9.8 of the Agreement);

                (b)     the provisions in respect of all of the leases of space
                        in the London Underwriting Centre shall be included at
                        $151,000 per month multiplied by the number of months
                        remaining on the relevant lease, discounted at a rate of
                        5.0%;

                (c)     the provision in respect of the book loss on sales of
                        excess Hardware and payments to be made by the Target
                        Company in respect of lease obligations in relation to
                        Hardware shall be included at $200,000; and

                (d)     the provision for employee redundancy payments will be
                        calculated to take into account employees (if any) that
                        the Buyer has determined, prior to Completion, will be
                        made redundant within ninety days (or their contractual
                        notice period if longer) after Completion. The
                        redundancy payment calculation will be consistent with
                        Target Group's policy in effect prior to Completion, and
                        the Buyer will represent that actual payments to the
                        relevant employees will be so calculated. Settlement of
                        all employee redundancy and other termination benefits
                        paid in the period 1 January 2002 to the Completion Date
                        will be charged against the portion of the provision for
                        restructuring included in the Target Group's Accounts
                        that relates to redundancy and other termination
                        benefits (totalling $1.8 million). Any amounts paid
                        relating to this Clause 2.3.2(d) that exceed such
                        provision as at 31 December 2001 will be provided for in
                        the Completion Accounts;


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2.3.3   The only employee incentive costs accrued in the Completion Accounts
        will be as follows:

                (a)     amounts accrued as at the Completion Date under the
                        Annual Incentive Bonus Plan, the Supplemental Annual
                        Incentive Bonus Plan, Staff Incentive Plan, the
                        Supplementary Staff Incentive Plan, the Deferred Profit
                        Sharing Plan, and the Long Term Incentive Plan which
                        will be determined by the Seller for each employee
                        employed by the Target Group at the Completion Date and
                        will be communicated to the Buyer within five business
                        days after the Completion Date. Such amounts will be
                        paid to employees in accordance with their entitlement
                        under the relevant scheme or plan as and when due
                        following the Completion Date;

                (b)     amounts accrued as at the Completion Date under the
                        Performance Incentive and Loyalty Scheme will be limited
                        to any unpaid amounts achieved, and not deferred, in
                        accordance with the relevant scheme (being the 4% of
                        base salary achieved during the quarter in which
                        Completion occurs). Amounts achieved for each employee
                        will be determined by the Seller and will be
                        communicated to Buyer within five business days after
                        the Completion Date. Such amounts will be paid to the
                        employees in accordance with their entitlement under the
                        Performance Incentive and Loyalty Scheme as and when due
                        following the Completion Date; and

2.3.4   No accruals will be made in the Completion Accounts for amounts payable
        under the Performance Incentive and Loyalty Scheme for amounts achieved
        after the Completion Date (being the 20% of base salary achieved after
        the Completion Date) and those amounts achieved prior to the Completion
        Date but which payments are deferred. Amounts achieved for each employee
        will be determined by the Buyer and will be communicated to the Seller
        15 days prior to payment to the relevant employee. Such amounts will be
        paid to the employees in accordance with their entitlement under the
        Performance Incentive and Loyalty Scheme as and when due following the
        Completion Date. The Seller will reimburse the Target Group for these
        amounts payable under these schemes within 14 days after payment to the
        relevant employees.

2.3.5   Any unreconciled difference between the Peoplesoft general ledger and
        the Senator broker ledger systems as at the Completion Date will be
        eliminated through adjustment of the Peoplesoft general ledger. The
        Comfort letter provided by the Seller to the Target Subsidiary in
        respect of such unreconciled difference will be terminated.

2.3.6   The Completion Adjustment shall not be taken into account in preparing
        the Completion Accounts.



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3.      PROCEDURE

3.1     SUBMISSION OF DRAFT

                (a)     As soon as the Completion Accounts have been prepared,
                        the Buyer shall calculate the Completion Adjustment and
                        the Buyer shall send a copy of the Completion Accounts
                        and the calculation of the Completion Adjustment to the
                        Seller together with such working papers used in
                        connection with the preparation of the same to
                        understand and agree the Completion Accounts and the
                        calculation of the Completion Adjustment.

                (b)     Unless the Seller shall within 28 days of receipt of the
                        Completion Accounts and Completion Adjustment
                        calculation (and associated papers as provided in Clause
                        3.1(a)) serve a notice in writing on the Buyer that it
                        objects to the Completion Accounts and/or the Completion
                        Adjustment calculation (identifying the reason for any
                        objection and the amount(s) or item(s) in the Completion
                        Accounts and/or Completion Adjustment calculation which
                        is/are in dispute, provided always that no objection
                        shall be raised in relation to the Mark to Market and
                        Realised Investment Gain/Loss Adjustment in the
                        Completion Accounts other than pursuant to, and in
                        accordance with Clause 3.2 below), (such notification
                        being, for the purposes of this Clause 3, an "OBJECTION
                        NOTICE") the Seller shall be deemed to have agreed to
                        the Completion Accounts and the Buyer's calculation of
                        the Completion Adjustment for all purposes of this
                        Agreement.

3.2     AGREEMENT OF MARKED TO MARKET VALUATIONS

                (a)     As soon as practicable after Completion, however in any
                        event within 14 days, the Buyer shall determine and/or
                        shall procure Marked to Market valuation of each of the
                        Invested Assets as at the Completion Date. Upon receipt
                        of the Marked to Market valuations of each of the
                        Invested Assets, the Buyer shall aggregate those
                        valuations (the "INITIAL PRICING");

                (b)     As soon as the Buyer has the Initial Pricing it shall
                        send a copy of the Initial Pricing to the Seller,
                        together with such working papers used in connection
                        with the preparation of the same as are necessary or
                        appropriate to understand the Initial Pricing. Unless
                        the Seller and/or the Buyer shall within 14 days of the
                        Seller's receipt of the Initial Pricing serve a notice
                        in writing on the other (a "PRICING NOTICE") that it
                        wishes to obtain an independent Marked to Market
                        valuation of the Invested Assets (an "INDEPENDENT
                        PRICING"), the Seller and the Buyer shall be deemed to
                        have agreed to the Initial Pricing for the purposes of
                        the Mark to Market and Realised Investment Gain/Loss
                        Adjustment in the Completion Accounts, and the Initial
                        Pricing shall be final and binding on the parties.

                (c)     If the Buyer and/or the Seller serves a Pricing Notice
                        the Buyer and/or Seller may, as appropriate, within 14
                        days of the service of the Pricing Notice obtain a
                        Marked to Market valuation of the Invested Assets from
                        an independent reputable investment manger, bank or
                        securities house (such



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                        valuation being the "BUYER'S PRICING" or the "SELLER'S
                        PRICING", as appropriate). If the aggregate difference
                        between the Initial Pricing on the one hand and either
                        the Buyer's Pricing or the Seller's Pricing on the
                        other:

                        (i)     exceeds 25 basis points of the aggregate value
                                of the Initial Pricing then either the Buyer
                                and/or the Seller, as appropriate, may elect to
                                follow the procedure under Clause 3.2(d) below
                                to determine the Marked to Market valuation of
                                the Invested Assets; or

                        (ii)    does not exceed 25 basis points of the aggregate
                                value of the Initial Pricing, then the Initial
                                Pricing shall be used for the purposes of Mark
                                to Market and Realised Investment Gain/Loss
                                Adjustment in the Completion Accounts and the
                                Initial Pricing shall be final and binding on
                                the parties.

                (d)     If Clause 3.2(c)(i) applies, and the Buyer and/or the
                        Seller elects to implement this Clause:

                        (i)     the Buyer and Seller shall appoint two mutually
                                acceptable independent third parties (the
                                "INDEPENDENT VALUERS"). For the avoidance of
                                doubt, each party is not prohibited from
                                proposing the entity it used to obtain its own
                                pricing under paragraph (c) above as an
                                Independent Valuer, Independent Valuers may
                                obtain prices or pricing information from other
                                third party professionals in their absolute
                                discretion;

                        (ii)    if the parties fail to reach agreement on the
                                identity of either one or both of the
                                Independent Valuers within 10 days of an
                                election to implement this Clause, then, at the
                                instance of each party such Independent Valuers
                                that have not been agreed shall be selected by
                                the President for the time being of the
                                Institute of Chartered Accountants for England
                                and Wales;

                        (iii)   a list of individual securities prioritised
                                based on the absolute difference measured in
                                market value and with a price difference in
                                excess of 25 basis points between the Initial
                                Pricing and the Buyer's Pricing and/or the
                                Initial Pricing and the Seller's Pricing will be
                                provided by the Buyer and/or Seller to the
                                Independent Valuers (the "RELEVANT SECURITIES");

                        (iv)    the Independent Valuers will each Mark to Market
                                each of the Relevant Securities as at the
                                Completion Date in sequence starting with the
                                largest absolute market value difference,
                                subject to the following, for each Relevant
                                Security the average of the two Independent
                                Valuers' valuations will become the new
                                valuation for that Relevant Security and the
                                Initial Pricing will be recalculated to reflect
                                that valuation;



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<PAGE>

                        (v)     the Initial Pricing as adjusted by the valuation
                                of each such Relevant Security is referred to as
                                the "ADJUSTED INITIAL PRICING". The process of
                                such valuation will continue until the sooner of
                                (x) the difference between the Initial Pricing
                                and the Adjusted Initial Pricing becomes less
                                than 25 basis points, and (y) all of the
                                Relevant Securities have been priced (the "FINAL
                                ADJUSTED INITIAL PRICING"); and

                        (vi)    the Final Adjusted Initial Pricing shall be
                                deemed to have been agreed upon completion of
                                this process and for the purposes of the Mark to
                                Market and Realised Investment Gain Loss
                                Adjustment in the Completion Accounts and the
                                Final Adjustment Initial Pricing shall be final
                                and binding on the parties.

3.3     REPORT

        If the Seller accepts, or is deemed to accept, that the said draft
        Completion Accounts comply with Clause 2, and the draft Completion
        Adjustment is correctly calculated in accordance with Clauses 4 and 5,
        the Seller shall sign a report to that effect and any Completion
        Accounts and Completion Adjustment so reported on, or (if Clause 3.6
        shall apply) the final draft of the Completion Accounts and the
        Completion Adjustment as determined by the independent accountant, shall
        be the Completion Accounts and the Completion Adjustment for the
        purposes of this Agreement and shall be final and binding on the
        parties.

3.4     INFORMATION AND EXPLANATIONS

        The Buyer shall provide such cooperation, information, documentation and
        written and verbal explanations from appropriate personnel relating to
        the draft Completion Accounts and the Completion Adjustment and their
        preparation as the Seller, or any independent chartered accountant
        appointed pursuant to Clause 3.6, shall reasonably require.

3.5     AGREEMENT OF DRAFT

        If within the period referred to in Clause 3.1(b), the Seller shall give
        the Buyer an Objection Notice then the Buyer and the Seller shall use
        their best endeavours to reach agreement upon adjustments to the draft
        and the value of the Completion Adjustment.

3.6     INDEPENDENT ACCOUNTANT

        If the Seller and the Buyer are unable to reach agreement within 28 days
        following service of the Objection Notice, either the Seller or the
        Buyer shall be entitled to refer the matter or matters in dispute, only
        to the extent that such matters may potentially impact the Completion
        Adjustment, to Ernst & Young, unless Ernst & Young are not at the
        relevant time independent of each of the parties in which case the
        matter or matters shall be referred to an independent firm of chartered
        accountants agreed upon between them or (failing agreement within seven
        days of one party giving notice to the other that it desires an
        independent expert to be appointed) to be selected (at the



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<PAGE>

        instance of either party) by the President for the time being of the
        Institute of Chartered Accountants for England and Wales. Ernst & Young
        or such other independent firm of chartered accountants shall act as
        experts not as arbitrators and shall determine the matter or matters in
        dispute and their decision shall, save in the event of fraud or manifest
        error, be binding.

        The parties will use all reasonable endeavours to co-operate with the
        independent firm of accountants in resolving such disagreement or
        dispute. The independent firm of accountants shall have the right to
        seek such professional assistance and advice as it may require in
        fulfilling its duties. The costs of the independent firm of accountants
        shall be borne by the Seller and the Buyer equally.

        Upon the resolution of any dispute by the independent firm of
        accountants, the Completion Accounts and the calculation of the
        Completion Adjustment shall be amended to accord with such resolution
        and the Completion Accounts and the Completion Adjustment as so amended
        shall thereafter be final and binding as between the parties for all
        purposes of this Agreement.

4.      COMPLETION ADJUSTMENT

4.1     GENERAL

4.1.1   The following provisions of this Clause 4.1.1 set out the general
        methodology relating to the calculation of the Completion Adjustment
        which is subject to the specific calculations and methodology provided
        for in Clauses 4.2, 5.2 and 5.3.

                (a)     The Buyer's purchase price for the Target Group is
                        predicated upon:

                        (i)     the Target Group holding at the Completion Date
                                Invested Assets (which, on Marked to Market
                                valuations, could be used to purchase Risk Free
                                Investments, exclusive of transactional costs),
                                cash and net Non-Technical Assets and
                                Liabilities sufficient to meet the Buyer's
                                estimate of the net present value, as at the
                                Completion Date, of the Actual Matched
                                Portfolio, and

                        (ii)    Adjustment "W" in Clause 4.2.

                (b)     The amount of any difference between:

                        (i)     the aggregate Marked to Market value of the
                                Invested Assets, cash and Non-Technical Assets
                                and Liabilities at the Completion Date, and

                        (ii)    the Actual Matched Portfolio,

                        is to be a completion adjustment, calculated in
                        accordance with this Clause 4 and settled in accordance
                        with Clause 3 of the Agreement.

                (c)     This is achieved through Adjustment "W" and the Mark to
                        Market and Realised Investment Gain / Loss Adjustment
                        set out in this Clause 4 and the Matched Portfolio
                        Adjustment set out in Clause 5;



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<PAGE>

                (d)     The Assumed Matched Portfolio was calculated as at 31
                        December 2001 in accordance with Clause 5.2(a). The
                        Target Group has continued to trade in the period 1
                        January 2002 to the Completion Date inclusive. During
                        this period, it is agreed that profits and losses of the
                        Target Group are for the Buyer's account, except as
                        provided in this Agreement.

                (e)     Profits and losses recognised in the period 1 January
                        2002 to the Completion Date inclusive with respect to
                        Non-Technical Assets and Liabilities (except to the
                        extent that such profits and losses arise from accrued
                        Investment Income, which is dealt with in Adjustment "W"
                        in Clause 4.2, and commutations, which are for the
                        Buyer's account) are for the Seller's account, in
                        accordance with Clause 5 below.

4.2     CALCULATION

4.2.1   Upon preparation of the Completion Accounts, the Buyer shall calculate
        the completion adjustment (the "COMPLETION ADJUSTMENT") as follows:

        W + X + Y = Z

        where:

        "W" is as provided in Clause 3.2.1(d), 3.2.2(d), 3.2.3(d) or 3.2.4(c) of
        the Agreement as appropriate

        "X" is the Matched Portfolio Adjustment

        "Y" is the Mark to Market and Realised Investment Gain / Loss Adjustment

        "Z" is the Completion Adjustment

        A worked example of the above formula, together with certain schedules
        relevant in format and/or content to the Agreement, is set out in Part
        II of this Schedule 7 (the "WORKED EXAMPLE"). The Completion Adjustment
        shall be calculated in accordance with the principles and definitions
        described in Clause 2.3 above, and amounts determined shall therefore be
        gross of any withholding or other taxes.

4.2.2   For the purposes of this Clause 4.2:

                (a)     "INVESTMENT INCOME" is the amount disclosed as such in
                        the notes to the Completion Accounts, which comprises
                        income received from Invested Assets, plus the change in
                        accrued investment income between 31 December 2001 and
                        Completion Date inclusive, gross of any withholding or
                        income tax;

                (b)     "ADMINISTRATIVE EXPENSES" is the amount disclosed as
                        such in the notes to the Completion Accounts (which
                        includes depreciation, but this shall exclude any profit
                        and loss in respect of Non-Technical Assets and
                        Liabilities of the Target Group as at 31 December 2001,
                        recognised in the



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<PAGE>

                        period from 1 January 2002 to the Completion Date which
                        is adjusted in accordance with Clause 5.2(e)(ii) below);

                (c)     "MATCHED PORTFOLIO ADJUSTMENT" means the adjustment
                        determined in accordance with Clause 5 below;

                (d)     "MARK TO MARKET AND REALISED INVESTMENT GAIN / LOSS
                        ADJUSTMENT" means the aggregate of unrealized investment
                        gains / losses and realised investment gains / losses as
                        disclosed in consolidated profit and loss of the
                        Completion Accounts, where a net credit to the profit
                        and loss account is treated as a positive and a net
                        debit to the profit and loss account is treated as a
                        negative; and

                (e)     "NON-TECHNICAL ASSETS AND LIABILITIES" means those items
                        identified as such in the tab "Treatment of Proforma
                        Balance Sheet" in the Worked Example.

5.      MATCHED PORTFOLIO ADJUSTMENT

5.1     GENERAL

        For the purposes of this Clause 5, "RISK FREE INVESTMENT" means
        investments in US Dollars which are bonds, debentures, treasury bills,
        notes or any other security representing a first rank debt of, and
        issued or directly and unconditionally guaranteed by the government of
        the United States of America.

5.2     METHODOLOGY

        The Buyer and Seller agree that the following is the methodology to be
        used to calculate the Matched Portfolio Adjustment:

                (a)     The Buyer has estimated, as at 31 December 2001, all
                        future cash flows of the Target Subsidiary, but
                        excluding those arising from Investment Income and
                        realizations of Invested Assets and Non-Technical Assets
                        and Liabilities, after taking into account the
                        adjustments made in deriving the Pro Forma Balance Sheet
                        (the "ASSUMED PAYMENT PROFILE").

                (b)     On the basis of the Assumed Payment Profile, the Buyer
                        has assumed a portfolio consisting of Risk Free
                        Investments and cash the cashflows of which (together
                        with the assumed cashflows arising from realizations of
                        the Non-Technical Assets and Liabilities of the Target
                        Subsidiary) will exactly match the Assumed Payment
                        Profile (the "ASSUMED MATCHED PORTFOLIO").

                (c)     The Buyer has calculated the net present value of the
                        Assumed Matched Portfolio as $1,519,800,000 (one
                        billion, five hundred and nineteen million and eight
                        hundred thousand dollars), being the net present value
                        of the Assumed Matched Portfolio based on an average
                        weighted investment yield of 4.5 per cent per annum as
                        at 31 December 2001 (the "NPV OF THE ASSUMED MATCHED
                        PORTFOLIO").



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<PAGE>

                (d)     The Buyer shall calculate the Actual Matched Portfolio
                        (in accordance with Clause 5.2(e) below) and the NPV of
                        the Actual Matched Portfolio (in accordance with Clause
                        5.2(g) below).

                (e)     The "ACTUAL MATCHED PORTFOLIO" shall be calculated in
                        the same way as the Assumed Matched Portfolio using:

                        (i)     the Assumed Payment Profile; and

                        (ii)    an adjustment for the profit or loss recognised
                                in respect of Non-Technical Assets and
                                Liabilities as at 31 December 2001 of the Target
                                Subsidiary in the period from 1 January 2002 to
                                the Completion Date (excluding the change in
                                accrued investment income in that period, which
                                is adjusted through Clause 5.2(g)(iii) below) so
                                that any such profit reduces, and any such loss
                                increases, the amount of the Actual Matched
                                Portfolio.

                (f)     For the purposes of Clause 5.2(e)(ii) above:

                        (i)     an adjustment for profit or loss in respect of
                                Non-Technical Assets and Liabilities in relation
                                to bad debts will only be recognised if:

                                (1)     the principal debtor or creditor
                                        concerned becomes Insolvent ("INSOLVENT"
                                        shall mean a reinsurer that has been
                                        declared insolvent by any court with
                                        competent jurisdiction or has been
                                        placed into liquidation or receivership
                                        (whether voluntary or involuntary) or
                                        there has been instituted against the
                                        reinsurer proceedings for the
                                        appointment of a receiver, liquidator
                                        (including a provisional liquidator),
                                        administrator (subsequent to formal
                                        court proceedings, and only for the time
                                        that such reinsurer is in
                                        administration), rehabilitator,
                                        conservator, or trustee in bankruptcy,
                                        or other agent known by whatever name,
                                        to take possession of the reinsurer's
                                        assets or control of the reinsurer's
                                        operation) between 1 January 2002 and
                                        the Completion Date inclusive;

                                (2)     it arises due to a new claims position
                                        that the London market has adopted
                                        between 1 January 2002 and the
                                        Completion Date;

                                (3)     it arises in accordance with Clause
                                        2.3.5 above;

                                (4)     it arises from an amount due from or to
                                        an Affiliate of the Seller not being
                                        realised at book value as at 31 December
                                        2001 (except to the extent recognised
                                        under Clause 5.2(f)(i)(3);

                        (ii)    The stipulated accounting treatment of
                                restructuring provisions and employee incentive
                                payments set out in Clauses 2.3.2 and 2.3.3
                                above applies.

                        (iii)   Except in relation to 5.2(f)(i)(4) and (ii)
                                above, the maximum net loss to be taken into
                                account will be $14 million, with the first $7
                                million of loss to



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<PAGE>

                                be disregarded (i.e., the maximum loss
                                adjustment to the Completion Adjustment is $7
                                million).

                (g)     The "NPV OF THE ACTUAL MATCHED PORTFOLIO" shall be the
                        net present value of the Actual Matched Portfolio as at
                        31 December 2001, calculated as the sum of (i) and (ii)
                        less (iii) below:

                        (i)     for years 2003 and subsequent the respective
                                assumed cash flows, which are assumed to occur
                                on 30 June of each calendar year, contained in
                                the Actual Matched Portfolio, discounted as at
                                the Completion Date using the U.S. Government
                                Treasury strip yield curve (interpolated on a
                                straight-line basis for dates not identified on
                                the curve), annualized, as reported by Bloomberg
                                on the Fair Market Yield Curve History Page as
                                at close of business on the Completion Date or
                                the last business day prior to the Completion
                                Date if the Completion Date is not on a business
                                day;

                        (ii)    for 2002 the Assumed Payment Profile cash flow
                                of $376,800,000 (three hundred and seventy six
                                million and eight hundred thousand dollars),
                                will be divided equally into 12 amounts of
                                $31,400,000 (thirty one million and four hundred
                                thousand dollars) ("MONTHLY Payment"). For 2002
                                the net present value is the sum of (a) the
                                numbers of months in 2002 through completion
                                multiplied by the undiscounted Monthly Payment,
                                and (b) the remaining Monthly Payments assumed
                                to occur on the fifteenth day of the month,
                                discounted to the Completion Date using the U.S.
                                Government Treasury strip yield curve, derived
                                as in Clause 5.2(g)(i) above, except using the
                                relevant monthly rate (interpolated on a
                                straight line basis as appropriate);

                        (iii)   the amount of the actual Investment Income
                                reported in the Completion Accounts for the
                                period from 1 January 2002 to the Completion
                                Date inclusive.

5.3     CALCULATION

5.3.1   If the NPV of the Assumed Matched Portfolio is:

                (a)     greater than the NPV of the Actual Matched Portfolio,
                        then the amount of the difference shall be the Matched
                        Portfolio Adjustment, which for the purposes of the
                        formula in Clause 4.1 shall be deemed to be a positive;
                        or

                (b)     less than the NPV of the Actual Matched Portfolio, then
                        the amount of the difference shall be the Matched
                        Portfolio Adjustment, which for purposes of the formula
                        in Clause 4.1 shall be deemed to be a negative.

5.4     PAYMENT

        The Completion Adjustment shall be paid by the Buyer or the Seller (as
        appropriate) in accordance with the provisions of Clause 3 of this
        Agreement.

5.5     MANIFEST ERROR

        In the event of a manifest error in the Pro Forma Balance Sheet or
        Worked Example, correcting adjustments will be made.

5.6     INTERACTION WITH OTHER PROVISIONS

5.6.1   Subject to the due performance of Clause 3.6, if either party shall have
        any claim against the other party under this Agreement in respect of any
        liability or deficiency which is taken into account in the Completion
        Accounts the amount of such liability or deficiency so taken into
        account shall be deducted from the amount of such party's claim but,
        save as aforesaid, preparation and acceptance of the Completion Accounts
        by either party shall be without prejudice to any claim which either
        party may have against the other party under or in respect of any breach
        of this Agreement.



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                                     PART II

                                 WORKED EXAMPLE

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]


                                   SCHEDULE 8

                               NOVATION AGREEMENT

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]


                                   SCHEDULE 9

                MAC THRESHOLDS - (MAC 4.6 ILLUSTRATION 19_6.XLS)

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]


                                   SCHEDULE 10

                            PENSION SUBSTITUTION DEED

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]




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<PAGE>

                                   SCHEDULE 11

                            REINSURANCE RECOVERABLES

   [Exhibit/Schedule omitted. Registrant undertakes to provide a copy of said
               Exhibit/Schedule to the Commission upon request.]



EXECUTED by the parties:



        Signed by

        ROBERT DEUTSCH

        duly authorised representative
        of /for and on behalf of


        CONTINENTAL
        CASUALTY COMPANY








        Signed by

        COLIN GRAHAM BIRD

        duly authorised representative
        of /for and on behalf of


        TAWA UK LIMITED


LN235275.15





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