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                                                                    EXHIBIT 10.1

                             SHAREHOLDERS' AGREEMENT


                  This SHAREHOLDERS'  AGREEMENT (this "Agreement") is made as of
December 22, 1999, by and among Max Re Capital Ltd., a company  organized  under
the laws of Bermuda (the "Company"), Max Re Ltd., an insurance company organized
under the laws of Bermuda ("Max Re"), and each of the other  signatories to this
Agreement.  Each of the  shareholders  of the  Company  that  is,  or  hereafter
becomes,  bound by this  Agreement  and each of their  respective  successors or
assignees of their rights  hereunder,  are  sometimes  collectively  referred to
herein as the "Shareholders" and each individually as a "Shareholder."

1.       Certain Definitions.
         -------------------

         "Affiliate"   of  any  Person  means  any  other  Person   controlling,
controlled by or under common control with such particular  Person.  In the case
of a natural Person,  his Affiliates  include members of such Person's immediate
family,  natural lineal  descendants of such Person or a trust for the exclusive
benefit of such Person and his immediate family and natural lineal  descendants.
For the purposes of Section 2(c) herein and with respect to Moore Holdings,  the
term  Affiliate  includes  the  members of Moore  Holdings,  including  upon the
withdrawal  of any such member from Moore  Holdings,  and with respect to Cap Z,
the term Affiliate includes its limited partners or any partners, principals, or
other professionals of Cap Z or its Affiliates.

         "Bermuda Monetary Authority" means that quasi-governmental authority of
similar name in Bermuda and, where applicable, includes any Bermuda governmental
authority, department or agency that performs similar functions.

         "Business Day" means a day on which banks are open for ordinary banking
business in both New York City and Hamilton, Bermuda.

         "Cap Z" means  Capital  Z  Investments,  L.P.,  a  limited  partnership
organized under the laws of Bermuda.

         "Commission" means the U.S.  Securities and Exchange  Commission or any
other federal agency at the time administering the Securities Act.

         "Common  Shares" means the shares of the Company issued and outstanding
or to be issued as common shares,  initially having a par value $1.00 per share,
and includes a fraction of a common share.

         "Exchange  Act"  means the U.S.  Securities  Exchange  Act of 1934,  as
amended,  or any similar  federal  statute and the rules and  regulations of the
Commission thereunder, all as the same shall be in effect at the time.

         "Founding  Investors"  means Moore  Holdings and Cap Z and any of their
respective transferees under Section 2(c) hereof.
<PAGE>

         "Management  Warrants"  means the  warrants to purchase  Common  Shares
issued to Officers from time to time.

         "Management  Warrant Shares" means the Common Shares issued or issuable
pursuant to the exercise of the Management Warrants.

         "Max Re Non-Voting Common Shares" means the shares of Max Re issued and
outstanding or to be issued as non-voting common shares,  initially having a par
value $1.00 per share,  and  includes a fraction of a non-voting  common  share,
which shares may be  exchanged  for Common  Shares on a  one-to-one  basis under
certain  circumstances and subject to compliance with the Company's Bye-Laws and
the laws of Bermuda.

         "Moore  Holdings" means Moore  Holdings,  L.L.C.,  a limited  liability
company organized under the laws of the State of Delaware.

         "Officer"  means an officer of the  Company or Max Re from time to time
during the term of this Agreement.

         "Person" means an individual, a partnership,  a company, a corporation,
a limited liability company,  an association,  a joint stock company, a trust, a
joint  venture,   an   unincorporated   organization   or  a   governmental   or
quasi-governmental  entity or any  department,  agency or political  subdivision
thereof.

         "Qualified IPO" means the initial  registered public offering of Common
Shares in the United States.

         "Registrable  Securities"  means  (i) the  Common  Shares  held by each
Shareholder,  (ii) the Management Warrant Shares, (iii) the Warrant Shares, (iv)
any Common  Shares  issued or issuable  upon  exchange of the Max Re  Non-Voting
Common  Shares  and  (v)  any  Common  Shares  issued,  issuable,  exchanged  or
exchangeable  in respect of the  securities  referred to in clauses  (i),  (ii),
(iii) and (iv) above upon any stock split, stock dividend,  recapitalization  or
similar event; provided,  however, that Registrable Securities shall not include
               --------   -------
any securities referred to in clauses (i), (ii), (iii), (iv) or (v) above if (x)
the holder of such securities,  with the exception of the Founding Investors and
Western General, may resell such Registrable  Securities pursuant to Rule 144(k)
under the Securities  Act, (y) the sale of such  securities has been  registered
pursuant  to the  Securities  Act or (z) the  Registrable  Securities  have been
transferred in a transaction in which  registration  rights are not  transferred
pursuant to Section 2 hereof.

         "Register,"  "registered"  and  "registration"  refer to a registration
effected by preparing and filing a Registration Statement in compliance with the
Securities  Act, and the  declaration or ordering of the  effectiveness  of such
Registration Statement.

         "Registration  Expenses"  shall have the meaning set forth in Section 8
hereof.

         "Securities Act" means the U.S.  Securities Act of 1933, as amended, or
any similar  federal  statute and the rules and  regulations  of the  Commission
thereunder, all as the same shall be in effect at the time.

                                       2
<PAGE>

         "Selling Expenses" means all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Shareholders and the costs of any accountants, counsel or other experts
retained by the Shareholders.


         "Transfer"  means to offer,  sell,  assign  or  otherwise  transfer  an
interest,  in whole or in  part,  whether  voluntarily  or  involuntarily  or by
operation of law or at a judicial sale or  otherwise;  provided,  however,  that
                                                       --------   -------
Transfer  shall  not  include  the bona fide  pledge of Common  Shares or Max Re
Non-Voting Common Shares in connection with a loan by a financial institution or
any transfer  back to the pledgor by the pledgee of such Common Shares or Max Re
Non-Voting Common Shares following the termination of any such bona fide pledge.

         "Warrants"  means the warrants issued to the Founding  Investors on the
date hereof or at any time hereafter.

         "Warrant  Shares"  means the number of Common Shares into which the Max
Re Non-Voting Common Shares issued or issuable upon exercise of the Warrants may
be exchanged.

         "Western  General"  means  Western  General  Insurance  Ltd., a Bermuda
insurance company, and any of its transferees under Section 2(c) hereof.

         "Western General Warrants" means the warrants issued to Western General
for the purchase of Common Shares on the date hereof or at any time hereafter.

         "$" means the legal tender of the United States of America.

2.       Transfer Restrictions.
         ---------------------

     (a)    General Restrictions.   A   Shareholder   shall  not   Transfer  its
            --------------------
Registrable  Securities,  Max Re Non-Voting Common Shares,  Management Warrants,
Western  General  Warrants or Warrants  except in compliance with the Securities
Act or an  exemption  therefrom  and  except  in  compliance  with any  required
approval of the Bermuda Monetary  Authority and in accordance with the following
terms and conditions:

            (i)    At least 30  calendar  days prior to making any  Transfer  of
Registrable  Securities,  Max Re Non-Voting Common Shares,  Management Warrants,
Western  General  Warrants  or  Warrants  such  transferring   Shareholder  (the
"Transferring Shareholder") shall deliver a written notice (each such notice, an
"Offer  Notice") to the Company and each  Founding  Investor.  The Offer  Notice
shall  disclose  in  reasonable   detail  the  proposed  number  of  Registrable
Securities,  Max Re  Non-Voting  Common  Shares,  Management  Warrants,  Western
General Warrants or Warrants to be transferred  (the "Transfer  Securities") and
the proposed terms and conditions of the Transfer  (including the proposed price
at which the  Transfer  Securities  are to be  transferred);  provided  that the
                                                              --------
purchase  price  specified  in any Offer  Notice shall be payable in cash at the
closing of the transaction.

            (ii)   Prior to any Transfer, the Company together with the Founding
Investors and any Persons  designated by a Founding  Investor  shall be entitled
(without  obligation to exercise such entitlement) to purchase all, but not less
than all, of the Transfer Securities, at the price and on the terms specified in

                                       3
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the Offer Notice by  delivering  written  notice of such  election (an "Election
Notice") to the Transferring  Shareholder as soon as practicable but in no event
later than ten (10)  Business Days after  delivery of the Offer  Notice.  If the
Company,  the Founding Investors or any Person designated by a Founding Investor
elect  to  purchase  the  Transfer  Securities,  the  Transfer  of any  Transfer
Securities  shall be consummated  as soon as  practicable  after delivery of the
Election  Notice,  but in no event later than ten (10)  Business  Days after the
delivery of the Election Notice.  If more than one of the Founding  Investors or
their  respective   designees  make  a  firm  offer  to  purchase  the  Transfer
Securities,  each such Founding Investor or their respective  designees shall be
permitted to purchase  the  Founder's  Pro Rata Share (as defined  below) of the
Transfer  Securities  that the Company has indicated  that it will not purchase.
Each  Founding  Investor's  "Founder's  Pro Rata Share" shall be based upon such
Founding Investor's  proportionate  beneficial  ownership of Common Shares, on a
fully  diluted and  converted  basis,  in relation to the total number of Common
Shares,  on a fully  diluted  and  converted  basis,  beneficially  owned by the
Founding Investors.

            (iii)  Unless  all  of  the  Transfer   Securities  proposed  to  be
transferred  in the Offer  Notice are to be acquired  by the Company  and/or the
Founding Investors,  the Transferring Shareholder may, no later than 90 calendar
days  after the  expiration  of the  election  period,  Transfer  such  Transfer
Securities  to one or more  third  parties at a price no less than the price per
share  specified  in the  Offer  Notice  and on other  terms no more  materially
favorable  to the  transferees  thereof  than  offered  to the  Company  and the
Founding Investors in the Offer Notice. It shall be a condition precedent to the
consummation  of any Transfer of Transfer  Securities to a Person not a party to
this  Agreement  that such  third  party  execute  and be bound by the terms and
conditions of this Agreement.  Any Transfer  Securities not  Transferred  within
such 90-day period shall be re-offered  (without  obligation to purchase) to the
Company and the Founding  Investors under this Section 2 prior to any subsequent
Transfer pursuant to the terms of this Section 2.

     (b)      Other Restrictions.
              ------------------

              (i)   In   connection   with  the  Transfer  of  any   Registrable
Securities,  Max Re  Non-Voting  Common  Shares,  Management  Warrants,  Western
General  Warrants or Warrants  (other than a Transfer  described in Section 2(c)
below),  such Shareholder shall deliver written notice to the Company and, where
concerning  any share or warrant of Max Re, to Max Re  describing  in reasonable
detail the Transfer or proposed Transfer, together with, at the Company's or Max
Re's  request,  an  opinion  of  counsel  which  (to the  Company's  or Max Re's
reasonable  satisfaction)  is  knowledgeable  in  securities  law matters to the
effect that such Transfer of Registrable  Securities,  Max Re Non-Voting  Common
Shares,  Management  Warrants,  Western  General  Warrants  or  Warrants  may be
effected without registration of such Registrable Securities,  Max Re Non-Voting
Common Shares,  Management Warrants or Warrants,  Western General Warrants under
the  Securities  Act  and a  list  of  affiliates  or  related  parties  of  the
transferee.

              (ii)  The Company or Max Re, as the case may be, shall deliver new
certificates  for  Registrable  Securities,  Max Re  Non-Voting  Common  Shares,
Management Warrants,  Western General Warrants or Warrants which do not bear the
Securities  Act legend  set forth in Section  2(d)  hereof  promptly  upon their
Transfer if such Transfer is exempt from  registration  under the Securities Act

                                       4
<PAGE>

pursuant  to Rule 144 under such act and, if  requested,  the Company and Max Re
shall have received an opinion of counsel to that effect.

              (iii) Any Transfer of  Registrable  Securities,  Max Re Non-Voting
Common Shares,  Management  Warrants,  Western General Warrants or Warrants that
violates the  provisions  of this Section 2 shall not be recorded by the Company
or Max Re, as the case may be, or any of their  agents and shall be deemed  void
ab initio.
-- ------

     (c)      Permitted Transfers.      The   restrictions  set  forth  in  this
              -------------------
Section 2 shall not apply to any  Transfer  of  Registrable  Securities,  Max Re
Non-Voting  Common Shares,  Management  Warrants,  Western  General  Warrants or
Warrants  by  a  Shareholder  to  its  Affiliates  (a  "Permitted  Transferee");
provided, assuming compliance with any required approval of the Bermuda Monetary
--------
Authority, that the provisions of this Agreement shall continue to be applicable
to the  Registrable  Securities,  Max Re Non-Voting  Common  Shares,  Management
Warrants,  Western General Warrants or Warrants after any Transfer above and the
transferees of such  Registrable  Securities,  Max Re Non-Voting  Common Shares,
Management Warrants, Western General Warrants or Warrants shall agree in writing
to be  bound  by the  provisions  of  this  Agreement  and  shall  be  deemed  a
"Shareholder"  for  purposes  of this  Agreement;  provided,  further  that if a
                                                   --------   -------
Permitted Transferee ceases to be an Affiliate of the Transferring  Shareholder,
the  Registrable  Securities,   Max  Re  Non-Voting  Common  Shares,  Management
Warrants,  Western  General  Warrants or Warrants  held by such Person  shall be
deemed to have been Transferred and shall be subject to the provision of Section
2(a) upon  discovery by the Company of such change in status.  Upon the Transfer
of Registrable Securities, Max Re Non-Voting Common Shares, Management Warrants,
Western  General  Warrants  or  Warrants  pursuant  to this  Section  2(c)  each
transferee will deliver a written notice to the Company or, where concerning any
share or warrant of Max Re, Max Re,  which  notice will  disclose in  reasonable
detail the  identity of such  transferee.

     (d)      Legend.   Certificates evidencing Registrable  Securities,  Max Re
              ------
Non-Voting  Common Shares,  Management  Warrants,  Western General  Warrants and
Warrants shall bear the following legend:

                  "THE SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT BEEN
                  REGISTERED UNDER THE UNITED STATES  SECURITIES ACT OF 1933, AS
                  AMENDED,  AND  MAY  NOT  BE  SOLD,  TRANSFERRED,  ASSIGNED  OR
                  HYPOTHECATED   UNLESS  THERE  IS  AN  EFFECTIVE   REGISTRATION
                  STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS
                  MADE IN ACCORDANCE  WITH RULE 144 UNDER THE  SECURITIES ACT OF
                  1933,  AS AMENDED,  OR THE  COMPANY AT ITS OPTION  RECEIVES AN
                  OPINION  OF   COUNSEL  TO  THE  HOLDER  OF  THESE   SECURITIES
                  REASONABLY  SATISFACTORY  TO THE  COMPANY,  STATING  THAT SUCH
                  SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
                  REGISTRATION AND PROSPECTUS DELIVERY  REQUIREMENTS OF SUCH ACT
                  AND UNLESS, WHERE APPLICABLE,  HAS RECEIVED THE PRIOR APPROVAL
                  OF THE BERMUDA MONETARY AUTHORITY.

                                       5
<PAGE>

                  IN ADDITION,  THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE
                  SUBJECT  TO CERTAIN  TRANSFER  RESTRICTIONS  IN THE  COMPANY'S
                  BYE-LAWS AND PURSUANT TO A SHAREHOLDERS' AGREEMENT DATED AS OF
                  DECEMBER 22, 1999 AMONG THE  COMPANY,  MAX RE LTD. AND CERTAIN
                  OF THE  COMPANY'S  SHAREHOLDERS.  A COPY OF SUCH  BYE-LAWS AND
                  SHAREHOLDERS'  AGREEMENT  WILL BE FURNISHED  WITHOUT CHARGE BY
                  THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."

If any  Registrable  Securities,  Max Re Non-Voting  Common  Shares,  Management
Warrants, Western General Warrants or Warrants become eligible for sale pursuant
to Rule 144(k) under the Securities  Act, the Company or Max Re, as the case may
be, shall, upon the request of a holder of such Registrable  Securities,  Max Re
Non-Voting  Common Shares,  Management  Warrants,  Western  General  Warrants or
Warrants and delivery of an opinion of counsel  reasonably  satisfactory  to the
Company or Max Re, issue new certificates for such Registrable  Securities,  Max
Re  Non-Voting  Common  Shares (if  applicable),  Management  Warrants,  Western
General  Warrants or Warrants  not bearing the  Securities  Act legend set forth
above.

3.       Drag-Along Rights.
         -----------------

         (a) Right to Require Sale. Notwithstanding  any other provision hereof,
             ---------------------
if one or more Shareholders (such Shareholders,  together with their Affiliates,
the  "Selling  Shareholder(s)")  proposes to enter into an  agreement to sell or
otherwise  dispose of for value Common Shares held by such Selling  Shareholders
representing eighty percent (80%) of the issued and outstanding Common Shares to
a third person who is not an affiliate  (any such party,  a "Third  Party") in a
bona fide transaction pursuant to which the Third Party will purchase all of the
Common Shares on a fully diluted and converted  basis (any such  transaction,  a
"Drag-Along Sale"), then each other Shareholder (the "Drag-Along  Shareholders")
hereby  agrees to sell to such  Third  Party,  upon the  demand of such  Selling
Shareholders,  all of the Common Shares and securities exercisable,  convertible
into or exchangeable  for Common Shares held by such Drag-Along  Shareholders on
the date of the Drag-Along  Notice (as defined in Section 3(b) below) and on the
same  terms and  conditions  as has  agreed  with such  Third  Party;  provided,
                                                                       --------
however,  that in negotiating  such  Drag-Along  Sale, the Selling  Shareholders
-------
shall  provide (i) that the only  representations  and  warranties  or covenants
which any Drag-Along  Shareholder  shall be required to make in connection  with
the Drag-Along Sale are  representations  and warranties with respect to its own
ownership of the shares to be sold by it and its ability to convey title thereto
free and clear of liens,  encumbrances or adverse claims,  its due organization,
its  due  authorization,  execution  and  delivery  of the  definitive  purchase
agreement (if applicable),  enforceability of such purchase agreement against it
and no conflict of it with such purchase  agreement,  (ii) that the liability of
any Drag-Along  Shareholder  with respect to any  representations  or warranties
made in connection  with the  Drag-Along  Sale is the several  liability of such
Drag-Along  Sharholder  (and not any other  person) and that such  liability  is
limited  to  the  amount  of  proceeds  actually  received  by  such  Drag-Along

                                       6
<PAGE>

Shareholder in the Drag-Along Sale, and (iii) no Drag-Along Shareholder shall be
required  to  provide  any  indemnification  to  anyone in  connection  with the
Drag-Along Sale (other than an  indemnification  for damages  resulting from the
breach  of  any   representations   or  warranties   made  by  such   Drag-Along
Shareholder);  provided,  however,  that  the  foregoing  shall  not  limit  the
               --------   -------
obligations of such  Drag-Along  Shareholder,  and such  Drag-Along  Shareholder
hereby  expressly  agrees to be bound by and be subject  to, any escrow or other
holdback  arrangement (on a pro rata basis based on the amount of shares sold by
such  Drag-Along  Shareholder in proportion to all shares of the Company sold in
such Drag-Along  Sale) provided for in the agreement  relating to the Drag-Along
Sale.

         (b)  Drag-Along Notice.  Prior to making any  Drag-Along  Sale,  if the
              -----------------
Selling Shareholder(s) elects to exercise the rights afforded under this Section
3, the Selling  Shareholder(s)  shall provide the Drag-Along  Shareholders  with
written  notice (the  "Drag-Along  Notice") not less than ten (10) days prior to
the proposed  date of the  Drag-Along  Sale (the  "Drag-Along  Sale Date").  The
Drag-Along  Notice shall set forth: (i) the name and address of the Third Party;
(ii) the proposed amount and form of  consideration to be paid per share and the
terms and conditions of payment offered by the Third Party; (iii) the Drag-Along
Sale Date; and (iv) confirmation that the Third Party has agreed to purchase the
Drag-Along Shareholder's shares in accordance with the terms hereof.

         (c)  Delivery of Certificates.  On  the  Drag-Along   Sale  Date,  each
              ------------------------
Drag-Along Shareholder shall deliver all of the certificates for such Drag-Along
Shareholder's shares, duly endorsed for transfer with signatures guaranteed,  to
such Third Party in the manner and at the address  indicated  in the  Drag-Along
Notice  against  delivery of  immediately  available  funds in the amount of the
purchase price for such shares.

         (d)  Costs and Fees.   The  Selling  Shareholders  shall bear all costs
              --------------
and fees incurred in connection with a Drag-Along  Sale except each  Shareholder
shall bear the costs and fees of its own independent  advisors.  The Company and
Max Re  shall  have no  obligation  to bear  any  costs  and  fees  incurred  in
connection with a Drag-Along Sale or otherwise under this Section 3.

4.       Compliance with Bermuda Law.
         ---------------------------

        (a)     The  Company  and Max Re  shall  have no  obligation  under  the
provisions  of  Sections  5, 6, 7,  8, 9 and 10  hereof  unless  and  until  all
approvals  required  from the Bermuda  Monetary  Authority  are received and the
requirements of any of the exclusions or exemptions applicable to the provisions
of Section 39 of the Bermuda  Companies  Act 1981,  as  amended,  are able to be
satisfied and are satisfied so as to permit  compliance with such Section 39. At
appropriate  times  each of the  Company  and Max Re shall use its  commercially
reasonable  efforts to obtain any such  approvals.  With respect to such Section
39, each Shareholder shall use its commercially  reasonable efforts where formal
meetings  or written  resolutions  of the  shareholders  or other  action may be
appropriate  to waive or approve the  financial  assistance as described in such
Section 39 and related provisions.

        (b)     The  provisions  of  Section  5, 6, 7, 8, 9 and 10 shall be read
subject to the provisions of Section 4(a) hereinabove.

                                       7
<PAGE>

5.       Demand Registrations.
         --------------------

        (a)      Requests for Registration.

                (i)     Each of the Founding  Investors and Western  General may
request, at any time after the earlier to occur of (i) the second anniversary of
this  Agreement  or (ii) the date that is one hundred  eighty (180) days after a
Qualified IPO, to have all or part of its Registrable  Securities  registered on
Form  S-1,  or  any  similar  long-form   registration   statement   ("Long-Form
Registration")  or, if available,  on Form S-2 or S-3, or any similar short-form
registration statement ("Short-Form Registration"). Each request for a Long-Form
Demand Registration (as defined below) shall have an aggregate offering price of
at least $50  million,  inclusive  of  Registrable  Securities  included in such
Long-Form Demand  Registration  pursuant to Section 6 hereof,  and shall specify
the approximate number of Registrable Securities requested to be registered, the
proposed manner of disposition and the proposed underwriter,  if any. Within ten
(10) Business  Days after  receipt of any such  request,  the Company shall give
written notice of such requested  registration  to the other  Shareholders  and,
subject  to  Section  5(b)  below,   shall  include  in  such  registration  all
Registrable  Securities  with respect to which the Company has received  written
requests for inclusion  therein within 15 calendar days after the receipt of the
Company's  notice.   All  registrations   requested   pursuant  to  a  Long-Form
Registration are referred to herein as "Long-Form Demand Registrations"; and all
other  registrations  requested  pursuant to this paragraph 5(a) are referred to
herein as a "Short-Form Demand  Registrations";  Long-Form Demand  Registrations
and Short-Form Demand  Registrations are sometimes  collectively  referred to as
"Demand Registrations." Each of the Founding Investors and Western General shall
each be entitled to request  three (3)  Long-Form  Demand  Registrations  and an
unlimited number of Short-Form  Demand  Registrations for which the Company will
pay all  Registration  Expenses as set forth in Section 9 hereof;  provided that
                                                                   --------
the  Company  shall  not be  obligated  to  register  more  than two (2)  Demand
Registrations in any 12-month period. A registration  will not count as a Demand
Registration until it has been declared effective by the Commission.

                (ii)    Holders of at least 20% of the total Common  Shares on a
fully diluted and converted  basis shall,  as a group, at any time and from time
to time  after  the  earlier  to occur  of (i) the  second  anniversary  of this
Agreement  or (ii)  the date  that is one  hundred  eighty  (180)  days  after a
Qualified IPO have the right to request a Demand Registration. The request for a
Demand  Registration  pursuant to this Section  5(a)(ii) shall have an aggregate
offering price of at least $50 million and shall specify the approximate  number
of  Registrable  Securities  requested  to  be  registered,   and  the  proposed
underwriter. Within ten (10) days after receipt of any such request, the Company
shall give written notice of such  requested  registration  to all  Shareholders
and,  subject to Section  5(b) below,  shall  include in such  registration  all
Registrable  Securities  with respect to which the Company has received  written
requests for inclusion  therein  within 15 days after the receipt of the Company
notice.

                (iii)   Upon receipt of a request for a Demand  Registration  (a
"Demand Request")  pursuant to Sections 5(a)(i) or 5(a)(ii),  the Company shall,
to the extent requested,  cause to be filed, within the later of (x) 90 days (or
45 days with respect to any Short-Form  Registration) of the date of delivery to
the Company of the Demand Request,  or (y) 180 days after the  effectiveness  of
the most recently filed  Registration  Statement by the Company,  a Registration
Statement  covering such  Registrable  Securities  which the Company has been so

                                       8
<PAGE>

requested to register,  providing for the registration  under the Securities Act
of such Registrable Securities to the extent necessary to permit the disposition
of such  Registrable  Securities  so to be  registered  in  accordance  with the
intended method of distribution specified in such Demand Request.

(b)      Priority on Demand Registrations.
         --------------------------------

         The Company shall not include in any Demand Registration any securities
that are not  Registrable  Securities  without the prior written  consent of the
demanding Shareholders. If a Demand Registration is an underwritten offering and
the managing  underwriters  advise the Company in writing that in their  opinion
the  number  of  Registrable  Securities  and,  if  permitted  hereunder,  other
securities  requested  to be  included  in such  offering  exceeds the number of
Registrable  Securities and other securities,  if any, which can be sold therein
without  adversely  affecting the  marketability  of the offering (the "Offering
Quantity"),  the Company  shall include in such  registration  securities in the
following priority:

        (i)     first, before including any securities which are not Registrable
Securities,  the  Company  shall  include  all  of  the  Registrable  Securities
requested  to be included by the  demanding  Shareholders,  each of the Founding
Investors  (if other than a demanding  Shareholder),  Western  General (if other
than a demanding  Shareholder)  and  Officers,  and if such  number  exceeds the
Offering  Quantity,  then the Company shall include only each of such  demanding
Shareholder's,  Founding  Investor's  (if other than a  demanding  Shareholder),
Western General's (if other than a demanding Shareholder) and Officer's pro rata
share of the Offering  Quantity,  based on the number of Registrable  Securities
then  beneficially  owned on a fully  converted  basis by each of the  demanding
Shareholders, Founding Investors, Western General and Officers, respectively;

        (ii)    second, to the extent (and only to the extent) that the Offering
Quantity  exceeds  the  aggregate  amount of  Registrable  Securities  which are
requested to be included in such registration, the Company shall include in such
registration  Registrable  Securities  requested  to be  included  by the  other
Shareholders,  and if such number  exceeds the  Offering  Quantity,  the Company
shall  include  only such other  Shareholders'  pro rata  share of the  Offering
Quantity,  based on the amount of Registrable  Securities  beneficially owned by
such other Shareholders; and

        (iii)   third,  to the extent (and only to the extent) that the Offering
Quantity  exceeds  the  aggregate  amount of  Registrable  Securities  which are
requested to be included in such registration, the Company shall include in such
registration any other securities requested to be included in the offering.

        (c)     Restrictions on Demand Registrations.
                ------------------------------------

                The  Company  may  postpone  upon one (1)  occasion  during  any
365-day  period  for  up to 120  days  the  filing  or  the  effectiveness  of a
Registration  Statement  for a Demand  Registration  if the  Company's  board of
directors  determines in its sole discretion that such Demand Registration would
reasonably be expected to have a material adverse effect on any proposal or plan
by the Company or any of its subsidiaries to engage in any acquisition of assets

                                       9
<PAGE>

(other than in the ordinary  course of  business) or any merger,  consolidation,
tender offer or similar transaction;  provided, however, that in such event, the
                                      --------  -------
party  requesting  such Demand  Registration  shall be entitled to withdraw such
request at any time during the 90-day  period and, if such request is withdrawn,
such  Demand  Registration  shall  not  count  as one of  the  permitted  Demand
Registrations  hereunder and the Company shall pay all Registration Expenses (as
set forth in Section 8) in connection with such  registration.

        (d)     Selection of Underwriters.
                -------------------------

                (i)     The  Founding  Investors  shall have the right to select
the investment  banker(s) and managing  underwriters for any Demand Registration
to administer an offering pursuant to Section 5(a)(i),  subject to the Company's
approval, which approval shall not be unreasonably withheld or delayed.

                (ii)    The  Shareholders  initiating  any  Demand  Registration
pursuant to Section 5(a)(ii) hereof that hold a majority of the Common Shares to
be so  registered  shall have the right to select the  investment  banker(s) and
managing  underwriter(s)  to administer  the offering,  subject to the Company's
approval,  which approval  shall not be  unreasonably  withheld or delayed.

        (e)     Other Registration Rights.
                -------------------------

                Except as provided  in this  Agreement,  the  Company  shall not
grant to any persons  the right to request  the  Company to register  any equity
securities of the Company, or any securities convertible or exchangeable into or
exercisable  for such  securities,  without  the prior  written  consent of both
Founding Investors.

6.      Piggyback Registrations.
        -----------------------

        (a)     Right to Piggyback.
                ------------------

                After  the  consummation  of a  Qualified  IPO,  if the  Company
proposes to  register  any of its equity  securities  under the  Securities  Act
(other than  pursuant to a  registration  on Form S-4 or S-8 or any successor or
similar  forms)  and  the  registration  form to be  used  may be  used  for the
registration of Registrable Securities (a "Piggyback Registration"),  whether or
not for sale for its own account, the Company will give prompt written notice to
all the  Shareholders of its intention to effect such a registration  and shall,
subject to 6(b),  include in such  registration all Registrable  Securities with
respect to which the Company has received written requests for inclusion therein
within 30 days after the receipt of the Company's notice.

        (b)     Priority on Primary Registrations.
                ---------------------------------

                If  a  Piggyback   Registration  is  an   underwritten   primary
registration on behalf of the Company,  and the managing underwriter advises the
Company in writing (with a copy to each party hereto requesting  registration of
Registrable  Securities) that in its opinion the number of securities  requested
to be included in such registration exceeds the number which can be sold in such
offering  without  adversely  affecting the  marketability of such offering (the

                                       10
<PAGE>

"Company  Offering  Quantity"),  the Company will  include in such  registration
securities in the following priority:

                (i)     first, the securities the Company proposes to sell;

                (ii)    second,  before  including any securities  which are not
Registrable  Securities,  the Company shall  include (x) all of the  Registrable
Securities  requested to be included by the Founding Investors,  Western General
and Officers and (y) to the extent that after the  application of clause (x) the
number of  Registrable  Securities  exceeds the Offering  Quantity,  the Company
shall include only such Founding  Investor's,  Western General's and each of the
Officer's  pro rata  share of the  Offering  Quantity,  based on the  number  of
Registrable  Securities  then  beneficially  owned on a fully converted basis by
each of the Founding Investors, Western General and Officers, respectively;

                (iii)   third,  to the extent (and only to the extent)  that the
Offering  Quantity exceeds the aggregate amount of Registrable  Securities which
are requested to be included in such registration,  the Company shall include in
such registration  Registrable  Securities requested to be included by the other
Shareholders,  and if such number  exceeds the  Offering  Quantity,  the Company
shall  include  only such other  Shareholders'  pro rata  share of the  Offering
Quantity based on the amount of Registrable  Securities  beneficially owned on a
fully converted basis by such other Shareholders; and

                (iv)    fourth,  to the extent (and only to the extent) that the
Company Offering Quantity exceeds the aggregate amount of Registrable Securities
which are  requested  to be included  in such  registration,  the Company  shall
include in such  registration any other  securities  requested to be included in
the offering.

        (c)     Other Registrations.
                -------------------

                If the Company has  previously  filed a  Registration  Statement
with respect to Registrable Securities pursuant to Section 5 or pursuant to this
Section  6,  and if  such  previous  registration  has  not  been  withdrawn  or
abandoned,  the  Company  shall  not  file or  cause to be  effected  any  other
registration  of any of its  equity  securities  or  securities  convertible  or
exchangeable  into or exercisable for its equity securities under the Securities
Act (except on Form S-4 or S-8 or any successor form), whether on its own behalf
or at the request of any Shareholder or Shareholders of such securities, until a
period of at least 90 days has elapsed from the effective  date of such previous
registration.

7.       Holdback Agreements.
         -------------------

        (a)     To  the  extent  not  inconsistent  with  applicable  law,  each
Shareholder  agrees  not to effect any public  sale or  distribution  (including
sales pursuant to Rule 144 under the Securities Act) of equity securities of the
Company,  or any securities,  options or rights convertible into or exchangeable
or  exercisable  for such  securities,  during  the seven  days prior to and the
180-day period  beginning on the effective date of an initial public offering of
the Company's securities or the 90-day period beginning on the effective date of
a public offering of the Company's  Common Shares effected  pursuant to a Demand
Request,  unless  the  underwriters  managing  the  registered  public  offering
otherwise agree;  provided that such restrictions  shall not be more restrictive
                  --------
                                       11
<PAGE>

in duration or scope than restrictions  imposed on (i) any Person which has been
granted registration rights by the Company,  (ii) any officer or director of the
Company,  or (iii) any 5% Shareholder of Common Shares;  and provided,  further,
                                                             --------
that nothing herein shall restrict, directly or indirectly,

        (i)     any bona fide pledge of Common Shares or the subsequent Transfer
upon default in connection with any such pledge,

        (ii)    subject to obtaining  any required  Bermuda  Monetary  Authority
approval, any charitable contribution; or

        (iii)   the  disposition of freely tradable Common Shares that have been
acquired by the Shareholder in open market transactions.

     (b)    In addition,  each Shareholder may Transfer Registrable  Securities,
Max  Re  Non-Voting  Common  Shares,  Management  Warrants  or  Warrants  to its
Affiliates  so long as such  Person  agrees  to be  bound  by the  terms of this
Agreement and such is in compliance with any required Bermuda Monetary Authority
approval.

     (c)    The Company agrees (i) not to effect any public sale or distribution
of its equity securities,  or any securities convertible into or exchangeable or
exercisable for such  securities,  during the seven days prior to and during the
180-day  period  beginning  on the  effective  date of any  underwritten  Demand
Registration or any underwritten  Piggyback Registration (except as part of such
underwritten registration or pursuant to registrations on Form S-4 or S-8 or any
successor form), unless the underwriters managing the registered public offering
otherwise  agree,  and (ii) to cause each  holder of its Common  Shares,  or any
securities  convertible  into or  exchangeable or exercisable for Common Shares,
that  were  purchased  from  the  Company  at any  time  after  the date of this
Agreement  (other than in a registered  public  offering) to agree not to effect
any public sale or  distribution  (including  sales pursuant to Rule 144) of any
such  securities  during  such  period  (except  as part  of  such  underwritten
registration,  if otherwise  permitted),  unless the  underwriters  managing the
registered public offering otherwise agree.

8.       Registration Procedures.
         -----------------------

         In connection with any Registration Statement filed pursuant to Section
5(a) or Section 6(a) herein (a "Registrant Statement"), the following provisions
shall apply:

        (a)     The Company shall furnish to each selling Shareholder,  prior to
the filing thereof with the Commission, a copy of the Registration Statement and
each amendment thereof and each supplement,  if any, to the prospectus  included
therein  and shall use its  reasonable  best  efforts  to  reflect  in each such
document,  when so filed with the Commission,  such comments as the Shareholders
reasonably may propose.

        (b)     The  Company  shall  prepare and within 90 days (or 45 days with
respect to any Short-Form Registration) after the end of the period within which
requests for registration may be given to the Company file with the Commission a
Registration   Statement  with  respect  to  such  Registrable   Securities  and
thereafter use its commercially  reasonable  efforts to cause such  Registration
Statement to become effective.

                                       12
<PAGE>

        (c)     The  Company  shall  prepare and file with the  Commission  such
amendments  and  supplements to such  Registration  Statement and the prospectus
used in  connection  therewith  as may be  necessary  to keep such  Registration
Statement  effective  for a period of either (i) not less than 180 days (subject
to  extension  pursuant  to  Section  8(p)) or, if such  Registration  Statement
relates to an  underwritten  offering,  such longer  period as in the opinion of
counsel for the  underwriters a prospectus is required by law to be delivered in
connection  with sales of Registrable  Securities by an underwriter or dealer or
(ii) such shorter period as will terminate when all of the securities covered by
such  Registration  Statement  have  been  disposed  of in  accordance  with the
intended  methods of disposition  by the seller or sellers  thereof set forth in
such  Registration  Statement (but in any event not before the expiration of any
longer  period  required  under the  Securities  Act),  and to  comply  with the
provisions  of  the  Securities  Act  with  respect  to the  disposition  of all
securities covered by such Registration Statement until such time as all of such
securities  have been  disposed of in  accordance  with the intended  methods of
disposition  by the seller or  sellers  thereof  set forth in such  Registration
Statement.

        (d)     The  Company  shall  advise the  selling  Shareholders,  and, if
requested by such  Shareholders,  confirm such advice in writing  (which  advice
pursuant to clauses (ii) - (v) hereof shall be  accompanied by an instruction to
suspend the use of the prospectus until the requisite changes have been made):

                (i)     when  the  Registration   Statement  and  any  amendment
thereto has been filed with the Commission and when the  Registration  Statement
or any post effective amendment thereto has become effective;

                (ii)    of any  request  by the  Commission  for  amendments  or
supplements to the Registration  Statement or the prospectus included therein or
for additional information;

                (iii)   of the  issuance  by the  Commission  of any stop  order
suspending the effectiveness of the Registration  Statement or the initiation of
any proceedings for that purpose;

                (iv)    of the receipt by the Company of any  notification  with
respect to the suspension of the  qualification of the Common Shares for sale in
any  jurisdiction  or the  initiation or  threatening of any proceeding for such
purpose; and

                (v)     of the  happening of any event that  requires the making
of any changes in the Registration  Statement or the prospectus or the filing of
any reports  under the Exchange  Act so that,  as of such date,  the  statements
therein are not  misleading and do not omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.

        (e)     Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section  8(d)  hereof  during the period for which the Company is
required to maintain an effective Registration Statement,  the Company shall (A)
use its commercially reasonable efforts to promptly obtain the withdrawal of any
stop order or order suspending the  effectiveness of the Registration  Statement
and (B) prepare a post-effective  amendment to the  Registration  Statement or a
supplement to the related prospectus or file any other required document as soon
as possible so that, as thereafter delivered to purchasers of the Common Shares,

                                       13
<PAGE>

the prospectus  will not include an untrue  statement of a material fact or omit
to state any material  fact  necessary to make the  statements  therein,  in the
light of the circumstances under which they were made, not misleading,  and will
comply with the Securities Act and the rules promulgated thereunder.

        (f)     The Company will furnish to each Shareholder included within the
coverage  of  the  Registration   Statement,   without  charge,  copies  of  the
Registration Statement and any amendment thereto, including financial statements
and  schedules,  and, if the  Shareholder  so requests in writing,  all exhibits
(including  those  incorporated by reference) in such number as such Shareholder
may reasonably request from time to time.

        (g)     The Company will deliver to each Shareholder included within the
coverage of the Registration  Statement,  without charge,  as many copies of the
prospectus (including each preliminary  prospectus) included in the Registration
Statement  and any  amendment  or  supplement  thereto as such  Shareholder  may
reasonably request; and the Company consents to the use of the prospectus or any
amendment or  supplement  thereto by each  Shareholder  in  connection  with the
offering  and  sale  of the  Common  Shares  covered  by the  prospectus  or any
amendment or supplement thereto.

        (h)     Prior to any public  offering of Common  Shares  pursuant to the
Registration  Statement,  the  Company  shall  use its  commercially  reasonable
efforts to register or qualify or cooperate with each Shareholder selling Common
Shares pursuant to such Registration  Statement and their respective  counsel in
connection with the  registration or  qualification of such securities for offer
and  sale  under  the  securities  laws of such  jurisdictions  as such  counsel
reasonably  requests in writing on behalf of such Shareholder and do any and all
other acts or things necessary or advisable to enable the offer and sale in such
jurisdictions  of the  Common  Shares  covered  by the  Registration  Statement;
provided, however, that the Company will not be required to qualify generally to
--------  -------
do business in any jurisdiction where it is not then so qualified or to take any
action  which would  subject it to general  service of process or to taxation in
any such jurisdiction where it is not then so subject.

        (i)     The Company shall cooperate with each  Shareholder to facilitate
the timely preparation and delivery of certificates  representing  Common Shares
to be sold  pursuant  to such  Registration  Statement  free of any  restrictive
legends and registered in such names as such  Shareholder may request in writing
prior to sales of Common Shares pursuant to the Registration Statement.

        (j)     The Company shall upon request, provide each Shareholder selling
Common Shares pursuant to such Registration  Statement with printed certificates
for its Common Shares in a form acceptable to such Shareholder.

        (k)     The  Company  shall  comply  with  all   applicable   rules  and
regulations  of  the  Commission  and  shall  make  generally  available  to its
Shareholders  as soon as  practicable  but in any event not later than  eighteen
(18) months after the effective date of the applicable Registration Statement an
earnings statement  satisfying the provisions of Section 11(a) of the Securities
Act or Rule 158 promulgated thereunder.

                                       14
<PAGE>

        (l)     The  Company  shall be  permitted  to require  each  Shareholder
selling Common Shares pursuant to the  Registration  Statement to furnish to the
Company  such  information   regarding  the   Shareholder,   the  Common  Shares
beneficially  owned by such  Shareholder and the intended method of distribution
of such Common  Shares as the Company may from time to time  reasonably  require
for inclusion in the  Registration  Statement,  and the Company may exclude from
such  registration  the Common Shares of any  Shareholder  that fails to furnish
such information within a reasonable time after receiving such request.

        (m)     The  Company   shall  enter  into  such   customary   agreements
(including,  if requested, an underwriting agreement in customary form) and take
all such other action,  if any, as  Shareholders  of a majority of Common Shares
being sold or the managing  underwriters  (if any) shall  reasonably  request in
order  to  facilitate  the   disposition  of  Common  Shares   pursuant  to  the
Registration  Statement;  provided,  however,  that the  Company  shall  have no
                          --------   -------
obligation to pay any discounts or underwriting commissions.

        (n)     The Company,  if requested by those  Shareholders  that together
hold a majority in interest of the Common  Shares  being sold,  or the  managing
underwriters (if any) in connection with the Registration  Statement,  shall use
its  commercially  reasonable  efforts  to cause (i) its  counsel  to deliver an
opinion  relating  to the  Registration  Statement  and the  Common  Shares,  in
customary  form (and  covering such matters of the type  customarily  covered by
legal opinions of such nature)  addressed to such  Shareholders and the managing
underwriters,  if any, thereof and dated the effective date of such Registration
Statement;  (ii) its officers to execute and deliver all customary documents and
certificates  requested by Shareholders of a majority of the Common Shares being
sold or the managing  underwriters  (if any); and (iii) its  independent  public
accountants  to provide a comfort  letter in customary  form (and  covering such
matters of the type customarily covered by comfort letter).

        (o)     The Company shall use its  reasonable  best efforts to cause the
Common  Shares  covered  by the  Registration  Statement  to be  listed  on each
securities exchange, if any, or NASDAQ on which similar securities issued by the
Company  are then  listed,  if so  requested  by  Shareholders  of a majority in
interest  of Common  Shares  covered by the  Registration  Statement,  or by the
managing underwriters, if any.

        (p)     The  Company  shall  make   available  for   inspection  by  any
Shareholder,  any underwriter  participating in any disposition pursuant to such
Registration  Statement and any attorney,  accountant or other agent retained by
any such Shareholder or underwriter,  all financial and other records, pertinent
corporate  documents  and  properties  of the Company,  and cause the  Company's
officers,  directors,  employees  and  independent  accountants  to  supply  all
information reasonably requested by any such Shareholder, underwriter, attorney,
accountant or agent in connection with such Registration Statement.

        (q)     No Shareholder  may  participate in any  registration  hereunder
which  is  underwritten   unless  such  Shareholder  (i)  agrees  to  sell  such
Shareholder's  Registrable  Securities on the basis provided in any underwriting
arrangements  approved by the  Shareholder  entitled  hereunder  to approve such
arrangements  (including,  without  limitation,  pursuant  to the  terms  of any
over-allotment or "green shoe" option requested by the managing  underwriter(s);
provided  that no  Shareholder  will be required to sell more than the number of
--------

                                       15
<PAGE>

Registrable  Securities that such holder has requested the Company to include in
any registration) and (ii) completes and executes all questionnaires,  powers of
attorney,  indemnities,  underwriting  agreement and other documents  reasonably
required under the terms of such underwriting arrangements.

        (r)     It shall be a  condition  precedent  to the  obligations  of the
Company to take any action  pursuant to Sections 5 and 6 herein with  respect to
the  Registrable  Securities  of any  Shareholder  that such  Shareholder  shall
furnish to the  Company  such  information  regarding  itself,  the  Registrable
Securities held by it, and the intended method of disposition of such securities
as  shall  be  required  to  effect  the  registration  of  such   Shareholder's
Registrable Securities.

        (s)     Each Shareholder  agrees that upon receipt of any written notice
of the Company  pursuant to paragraphs  (ii) through (v) of Section 8(d) hereof,
such Shareholder shall  discontinue  offering such Common Shares pursuant to the
Registration  Statement  until  such  Shareholder's  receipt  of  copies  of the
supplemental or amended prospectus contemplated by Section 8(c) hereof, or until
advised in writing (the  "Advice") by the Company that the use of the applicable
prospectus  may be resumed.  If the Company  shall give any notice under Section
8(d)(ii) - (v) during the registration period, such registration period shall be
extended by the number of days during such period from and including the date of
the giving of such notice to and  including  the date when each seller of Common
Shares covered by the Registration  Statement shall have received (x) the copies
of the  supplemental or amended  prospectus  contemplated by Section 8(c) (if an
amended or supplemental prospectus is required) or (y) the Advice (if no amended
or supplemental prospectus is required).

9.       Registration Expenses.
         ---------------------

         The Company  shall bear all expenses  incurred in  connection  with the
performance  of its  obligations  under  this  Agreement  (except  as  otherwise
provided in the proviso to Section 8(m) hereof) and the Company shall  reimburse
the  Shareholders for the fees,  disbursements  and expenses of one counsel (and
one local  counsel  as  reasonably  required)  chosen by the  Shareholders  of a
majority in interest of the Common Shares to be sold pursuant to a  Registration
Statement acting for the Shareholders in connection therewith.

10.      Indemnification.
         ---------------

        (a)     The  Company  shall  indemnify  and hold  harmless,  to the full
extent  permitted by applicable law, each of the Shareholders to be named in any
Registration Statement filed pursuant to Sections 5(a) or 6(a) and the officers,
directors,  members and control  shareholders of such  Shareholders  against any
losses,  claims,  damages  or  liabilities,  joint or  several,  to  which  such
Shareholder or such other Person may become  subject under the  Securities  Act,
the  Exchange  Act or  otherwise,  insofar as such  losses,  claims,  damages or
liabilities  (or actions in respect  thereof)  arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration  Statement under which such Registrable  Securities were registered
under the  Securities  Act,  or any  preliminary,  final or  summary  prospectus
contained  therein or furnished by the Company to any such  Shareholder,  or any
amendment or supplement  thereto, or arise out of or are based upon the omission
or alleged  omission  to state  therein a material  fact  required  to be stated

                                       16
<PAGE>

therein or  necessary to make the  statements  therein not  misleading,  and the
Company  shall  reimburse  such  Shareholder  for any  legal or  other  expenses
reasonably  incurred by them in connection with  investigating  or defending any
such action or claim as such expenses are incurred;  provided, however, that the
                                                     --------  -------
Company  shall not be required  to  indemnify  any such person  pursuant to this
Section 10(a) to the extent that (i) any such loss,  claim,  damage or liability
(or  actions  in  respect  thereof)  arises  out of or is  based  upon  fraud or
dishonesty  or an untrue  statement or alleged  untrue  statement or omission or
alleged omission made in the Registration  Statement,  or preliminary,  final or
summary prospectus,  or amendment or supplement thereto, in reliance upon and in
strict  conformity with written  information  furnished to the Company by, or on
behalf of, such person  expressly  for use in  connection  therewith or (ii) the
Company  subsequently  corrects the untrue statement or alleged untrue statement
or  omission  or  alleged  omission  made in the  preliminary,  final or summary
prospectus, or amendment or supplement thereto by delivering to such Shareholder
an amended  prospectus or prospectus  supplement  that makes such correction and
the  Shareholder  fails timely to deliver such amended  prospectus or prospectus
supplement to the party or parties making the claim.

        (b)     The Company  shall  require,  as a condition  to  including  any
Registrable  Securities in any  Registration  Statement  filed  pursuant to this
Agreement and to entering into any underwriting  agreement with respect thereto,
that the Company shall have received an undertaking  reasonably  satisfactory to
it from each Shareholder of Registrable  Securities included in any Registration
Statement  filed pursuant to this Agreement and from each  underwriter  named in
any such underwriting agreement, severally and not jointly, to (i) indemnify and
hold harmless the Company and all other Shareholders against any losses, claims,
damages or  liabilities  to which the  Company or such  other  Shareholders  may
become subject under the Securities Act, the Exchange Act, or otherwise, insofar
as such losses,  claims,  damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue  statement or alleged untrue  statement
of a material fact contained in the Registration  Statement, or any preliminary,
final or summary prospectus contained therein or furnished by the Company to any
such Shareholder, or any amendment or supplement thereto, or arise out of or are
based upon the  omission or alleged  omission to state  therein a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue  statement or omission or alleged  omission was made
in reliance upon and in strict conformity with written information  furnished to
the Company by such  Shareholder or underwriter  expressly for use in connection
therewith  and (ii)  reimburse  the  Company  for any  legal  or other  expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred;  provided, however, that
                                                         --------  -------
no such Shareholder shall be required to undertake liability to any Person under
this  Section  10(b) for any  amounts in excess of the dollar  amount of the net
proceeds to be received by such Shareholder from the sale of such  Shareholder's
Registrable  Securities pursuant to such registration and such undertaking shall
be several, not joint and several, among such Shareholders;  provided,  further,
                                                             --------   -------
that no such  Shareholder  shall be liable in any such case to the  extent  that
prior  to the  filing  of any  such  Registration  Statement  or  prospectus  or
amendment thereof or supplement thereto,  such Shareholder  furnished in writing
to the Company information  expressly for use in such Registration  Statement or
prospectus or any amendment  thereof or  supplement  thereto which  corrected or
made not misleading information previously furnished to the Company.

        (c)     Promptly  after  receipt by an  indemnified  party under Section
10(a) or 10(b) hereof of written notice of the commencement of any action,  such
indemnified  party shall, if a claim in respect thereof is to be made against an
indemnifying party pursuant to the indemnification provisions of or contemplated
by  this  Section  10,  notify  such  indemnifying   party  in  writing  of  the
commencement  of such  action;  but the  omission so to notify the  indemnifying
party  shall  not  relieve  it  from  any  liability  which  it may  have to any
indemnified  party  other  than  under  the  indemnification  provisions  of  or
contemplated by Section 10(a) or 10(b) hereof.  In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying  party
of the  commencement  thereof,  such  indemnifying  party  shall be  entitled to
participate  therein  and, to the extent that it shall  wish,  jointly  with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel  reasonably  satisfactory to such indemnified  party,  and, after notice
from the  indemnifying  party to such  indemnified  party of its  election so to
assume the defense thereof,  such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection with
the  defense  thereof  other  than  reasonable  costs  of  investigation.   Such
indemnifying  party  shall not enter into any  settlement  with a party  without
obtaining an unconditional release of each indemnified party with respect to any
and all claims against each  indemnified  party. An indemnified  party shall not
enter into any settlement  without the consent of the indemnifying  party, which
consent shall not be unreasonably withheld.

        (d)     Each  party  hereto   agrees   that,   if  for  any  reason  the
indemnification  provisions  contemplated  by Section  10(a) or 10(b) hereof are
unavailable to or insufficient to hold harmless an indemnified  party in respect
of any losses,  claims,  damages or liabilities (or actions in respect  thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such  indemnified  party as a result of such losses,  claims,
damages or liabilities (or actions in respect  thereof) in such proportion as is
appropriate  to reflect the  relative  fault of the  indemnifying  party and the
indemnified  party in connection with the statements or omissions which resulted
in such losses,  claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant  equitable  considerations.  The relative fault of
such  indemnifying  party and indemnified party shall be determined by reference
to,  among other  things,  whether the untrue or alleged  untrue  statement of a
material  fact or omission or alleged  omission to state a material fact relates
to information supplied by such indemnifying party or by such indemnified party,
and  the  parties'  relative  intent,  knowledge,   access  to  information  and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contributions  pursuant to this
Section 10(d) were determined by pro rata allocation  (even if the  Shareholders
or any agents or underwriters or all of them were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable  considerations  referred to in this Section 10(d). The amount paid or
payable by an indemnified party as a result of the losses,  claims,  damages, or
liabilities (or actions in respect thereof) referred to above shall be deemed to
include  any  legal  or  other  fees or  expenses  reasonably  incurred  by such
indemnified party in connection with  investigating or defending any such action
or claim.  Notwithstanding  the provisions of this Section 10(d), no Shareholder
shall be required to contribute  any amount in excess of the amount by which the
dollar amount of the proceeds  received by such Shareholder from the sale of any
Registrable  Securities  (after  deducting any fees,  discounts and  commissions
applicable thereto) exceeds the amount of any damages which such Shareholder has
otherwise  been  required  to pay by reason of such  untrue  or  alleged  untrue

                                       18
<PAGE>

statement or omission or alleged omission,  and no underwriter shall be required
to  contribute  any amount in excess of the  amount by which the total  price at
which the  Registrable  Securities  underwritten  by it and  distributed  to the
public were offered to the public  exceeds the amount of any damages  which such
underwriter  has  otherwise  been  required  to pay by reason of such  untrue or
alleged untrue  statement or omission or alleged  omission.  No person guilty of
fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities  Act) shall be entitled to  contribution  from any person who was not
guilty  of  such  fraudulent   misrepresentation.   The  Shareholders'  and  any
underwriters'  obligations in this Section 10(d) to contribute  shall be several
in  proportion  to  the  principal   amount  of  Common  Shares   registered  or
underwritten, as the case may be, by them severally and not jointly.

        (e)     The obligations of the Company under this Section 10 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and  conditions,  to each  officer,  director and partner of
each  Shareholder,  agent and underwriter and each person,  if any, who controls
any Shareholder,  agent or underwriter within the meaning of the Securities Act;
and the obligations of the  Shareholders  and any  underwriters  contemplated by
this  Section 10 shall be in  addition  to any  liability  which the  respective
Shareholder  or underwriter  may otherwise have and shall extend,  upon the same
terms and  conditions,  to each  officer and director of the Company and to each
person,  if any, who controls the Company  within the meaning of the  Securities
Act.

11.      Periodic Information Reporting Requirements.
         -------------------------------------------

(a)      Quarterly Financial Statement.
         -----------------------------

         The Company shall prepare condensed,  consolidated financial statements
for each of the first three  fiscal  quarters of each fiscal year in  accordance
with United  States  generally  accepted  accounting  principles  ("U.S.  GAAP")
consistently  applied.  The  Company  shall  provide  such  quarterly  financial
statements  to each  Shareholder  not later  than 45 days  after the end of each
fiscal quarter.


(b)      Annual Financial Statements.
         ---------------------------

         The Company shall prepare  consolidated  financial  statements for each
fiscal year in accordance  with U.S. GAAP  consistently  applied and shall cause
such financial  statements to be audited. The Company shall provide such audited
financial  statements and the auditor's  report thereon to the  Shareholders not
later than 90 days after the end of each fiscal year.


(c)      Additional Information.
         ----------------------

         If a Shareholder  requests in writing  information about the Company or
its subsidiaries in addition to the financial statements made available pursuant
to  Section  11(a)  and 11(b) in order  to,  among  other  things,  comply  with
disclosure   requirements   under  laws  and  regulations   applicable  to  such
Shareholder or to meet the tax reporting  requirements of such Shareholder,  the

                                       19
<PAGE>

Company shall use its commercially reasonable efforts to provide such additional
information  to such  Shareholder  as soon as  practicable  after  such  written
request has been  received;  provided,  however,  that the Company  shall not be
                             --------   -------
required to provide any such  additional  information if the Company  reasonably
believes that the disclosure of such information could have a materially adverse
impact on the  financial  condition,  business or  prospects of the Company on a
consolidated basis or is of a confidential nature.

(d)      Confidentiality.
         ---------------

         Except  as  authorized   in  writing  by  the  Company,   each  of  the
Shareholders  shall  not  disclose  any  of the  information  provided  to  such
Shareholder  pursuant  to this  Section 11 to any Person that is not a director,
officer, partner, employee,  representative (including any accountant,  attorney
or other  professional)  or  Affiliate  of such  Shareholder  or a party to this
Agreement, and each Shareholder shall use its commercially reasonable efforts to
cause  its  directors,   officers,  partners,  employees,   representatives  and
Affiliates not to disclose such information to any Person that is not a party to
this Agreement; provided, however, that such Shareholder shall not be prohibited
                --------  -------
from  disclosing  any such  information  if such  information  becomes  publicly
available  through  no  fault of the  Shareholder  or its  directors,  officers,
partners,  employees,  representatives  or  Affiliates  or  the  information  is
required to be furnished to a governmental  agency in connection  with any legal
or  administrative  proceeding or the  information is requested by a prospective
transferee or purchaser of Common Shares so long as such third party enters into
a  confidentiality  agreement with the Company  reasonably  satisfactory  to the
Company.


12.      Miscellaneous.
         -------------

        (a)      Amendments and Waivers.
                 ----------------------

                 The provisions of this  Agreement may not be amended,  modified
or  supplemented,  and  waivers or consents to  departures  from the  provisions
hereof may not be given,  unless the Company has obtained the written consent of
the  Founding  Investors  and  Shareholders  of a majority of the Common  Shares
(other than the Founding Investors).  Notwithstanding the foregoing, a waiver or
consent to depart  from the  provisions  hereof  with  respect to a matter  that
relates  exclusively to the rights of the  Shareholders  whose Common Shares are
being sold pursuant to the Registration  Statement and that does not directly or
indirectly affect the rights of other  Shareholders may be given by Shareholders
of a majority of the Common Shares being sold by such  Shareholders  pursuant to
the Registration Statement.

        (b)      Term and Termination.
                 --------------------

                 This  Agreement  may be terminated at any time by an instrument
in writing signed by all of the parties  hereto.  This Agreement shall terminate
automatically as to any Shareholder that Transfers all of its equity  securities
of the Company and Max Re. The provisions of Section 2 to this Agreement,  other
than  Section  2(b)(i)  and  2(b)(ii),  and  Section 3 to this  Agreement  shall
terminate  automatically  as to all parties  hereto upon the  consummation  of a
Qualified IPO. Unless sooner terminated, this Agreement shall terminate ten (10)

                                       20
<PAGE>

years after the date of the Qualified  IPO,  unless,  at any time within one (1)
year prior to such date,  all of the  parties  extend its  duration  for as many
additional periods, each not to exceed ten (10) years, as they may desire.

        (c)      Notices.
                 -------

                 All notices and other communications  provided for or permitted
hereunder  shall  be  made  in  writing  by  hand-delivery,   first-class  mail,
telecopier,  or  air  courier  guaranteeing  overnight  delivery:  (i)  if  to a
Shareholder  then to the  address  set  forth on the  signature  page or to such
address that such Shareholder may subsequently  notify the Company in writing or
(ii) if to the Company or Max Re as set forth below:



                               Max Re Capital Ltd.
                               P.O. Box HM 2565
                               Hamilton, HM KX
                               Bermuda
                               Attention: Robert J. Cooney
                               Facsimile Number: (441) 296-8811

         with a copy to:       Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                               590 Madison Avenue
                               New York, New York 10022
                               Attention:  James E. Kaye, Esq.
                               Facsimile Number: (212) 872-1002

         with a copy to:       Conyers Dill & Pearman
                               Clarendon House
                               2 Church Street
                               P.O. Box HM666
                               Hamilton HM CX
                               Bermuda
                               Attention:  Lisa J. Marshall
                               Facsimile Number:  (441) 292-4720


All such notices and communications shall be deemed to have been duly given when
delivered by hand, if personally  delivered;  five (5) Business Days after being
deposited in the United States mails, if being mailed by first class mail, three
(3) Business  Days after being  delivered  to a next-day  air courier;  and when
receipt is acknowledged by the recipient's telecopier machine, if telecopied.

(d)      Successors and Assigns.
         ----------------------

         This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns.

                                       21
<PAGE>

(e)      Counterparts.
         ------------

         This  Agreement  may be executed in two or more  counterparts,  each of
which shall be deemed an original,  but all of which together  shall  constitute
one and the same instrument.

(f)      Governing Law.
         -------------

         This Agreement  shall be governed by the laws of the State of New York,
without  giving effect to any choice of law or conflict of law provision or rule
that would cause the application of the law of any  jurisdiction  other than the
State of New York.

(g)      Headings.
         --------

         The headings in this  Agreement are for  convenience  of reference only
and shall not limit or otherwise affect the meaning hereof.

(h)      Severability.
         ------------

         The remedies  provided  herein are  cumulative and not exclusive of any
remedies  provided by law. If any term,  provision,  covenant or  restriction of
this  Agreement  is held by a court of  competent  jurisdiction  to be  invalid,
illegal,  void  or  unenforceable,  the  remainder  of  the  terms,  provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  reasonable  efforts to find and  employ an  alternative
means to achieve the same or substantially  the same result as that contemplated
by such term,  provision,  covenant or restriction.  It is hereby stipulated and
declared to be the  intention of the parties  that they would have  executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.





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                                 Signature Page