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                                                                   Exhibit 10.14


NOTICE: DEFENSE EXPENSES ARE INCLUDED IN LOSS AND SUBJECT TO THE AGGREGATE LIMIT
OF INDEMNITY.


                   EUROPEAN REINSURANCE CORPORATION OF AMERICA

                            (the "Insurance Company")

                            POLICY NUMBER: 980-01-00


                  RESTATEMENT OF THE EXCESS ASBESTOS INDEMNITY
                                INSURANCE POLICY

                                  DECLARATIONS

ITEM 1.    NAME OF INSURED:                  Metropolitan Life Insurance Company
                                             One Madison Avenue
                                             New York, NY  10010

                                             together with its successors and
                                             permitted assigns.

ITEM 2.    PERIOD OF INDEMNIFICATION:        From November 30, 1998 (the "Policy
                                             Inception Date") until the earlier
                                             of (a) the exhaustion of the
                                             Aggregate Limit of Indemnity, or
                                             (b) the Commutation Date (as
                                             defined in this Policy) (in each
                                             case at 12:01 A.M. at the address
                                             stated in Item 1).


NOTICE: THESE POLICY FORMS AND THE APPLICABLE RATES ARE EXEMPT FROM THE FILING
REQUIREMENTS OF THE NEW YORK STATE INSURANCE DEPARTMENT. HOWEVER, SUCH FORMS AND
RATES MUST MEET THE MINIMUM STANDARDS OF THE NEW YORK INSURANCE LAW AND
REGULATIONS.
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                                       2


ITEM 3.   (A)  AGGREGATE LIMIT OF          Three Hundred Seventy-Five Million
               INDEMNITY:                  Dollars ($375,000,000) as the
                                           Insurance Company's Quota Share of
                                           One Billion Five Hundred Million
                                           Dollars ($1,500,000,000) in the
                                           absolute aggregate for all Loss
                                           excess of the Retention (as
                                           hereinafter defined).

          (B)  ANNUAL SUBLIMIT AND PER     As set forth in Section 3 of the
               CLAIMANT LIMIT:             Policy. The Annual Sublimit and the
                                           Per Claimant Limit shall be a part
                                           of, and not in addition to, the
                                           Aggregate Limit of Indemnity.

          (C)  RETENTION:                  As set forth in Section 4 of the
                                           Policy.

ITEM 4.   PREMIUM:                         Two Hundred Twenty Million Five
                                           Hundred Twelve Thousand Eight
                                           Hundred Twenty-One Dollars
                                           ($220,512,821), payable in full on or
                                           before December 31, 1998.

ITEM 5.   NOTICES:                         All Notices under the Policy shall be
                                           made in the manner prescribed in the
                                           Policy to the addresses set forth
                                           below;

                                           If to the Insured, to:

                                             Metropolitan Life Insurance Company
                                             One Madison Avenue
                                             New York, NY  10010
                                             Attention:  General Counsel
                                             with a copy to:  Risk Manager
                                             Facsimile:  (212) 578-3916

                                           If to the Insurance Company, to:

                                             European Reinsurance Corporation
                                               of America
                                             650 Elm Street
                                             Manchester, NH  03101
                                             Attention:  President
                                             Facsimile:  (603) 644-6696
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                   EXCESS ASBESTOS INDEMNITY INSURANCE POLICY


In consideration of the payment of the Premium and the mutual covenants and
promises herein, in light of the representations and warranties made in
connection herewith, and subject to the Declarations that are a part of this
Excess Asbestos Indemnity Insurance Policy and to the terms, conditions,
exclusions and limitations contained in this Excess Asbestos Indemnity Insurance
Policy (all of which collectively constitute this "Policy"), the Insurance
Company and the Insured hereby agree as follows:


SECTION 1.        INSURING AGREEMENT

Subject to the terms and conditions of this Policy (including the Aggregate
Limit of Indemnity, the Annual Sublimit and the Per Claimant Limit), the
Insurance Company will indemnify the Insured during the Period of
Indemnification for the Insurance Company's Quota Share of the excess of (a) any
and all Loss for the defense and settlement of, or payment of judgments in,
Asbestos-Related Claims, arising out of events described in Section 2(C)(ii)
occurring prior to the Policy Inception Date; over (b) the Retention.


SECTION 2.        DEFINITIONS

As used in this Policy, the following terms shall have the following meanings:

         (A)      "Aggregate Limit of Indemnity" has the meaning given to such
                  term in Item 3(A) of the Declarations of this Policy.

         (B)      "Annual Sublimit" has the meaning given to such term in
                  Section 3.2 of this Policy.

         (C)      "Asbestos-Related Claim" means any Claim against the Insured
                  for Bodily Injury allegedly caused by, arising out of, or
                  relating to, in whole or in part, any exposure to asbestos,
                  but only where such Claim:

                           (i)      is sought, or threatened, to be enforced in
                                    the Territory against the Insured; and

                           (ii)     alleges (a) activities of Dr. Anthony J.
                                    Lanza on behalf of the Insured; or (b) the
                                    Insured's operation prior to January 1, 1970
                                    of its Industrial Hygiene Division or
                                    Section, regarding research, testing or
                                    reporting of results associated with
                                    asbestos; or (c) any alleged knowledge of
                                    the Insured arising out of the operation
                                    described in clause (ii)(b) above relating
                                    to the Insured's alleged failure to warn of
                                    the hazards of asbestos, or to the Insured's
                                    alleged participation in any conspiracy,
                                    negligent or otherwise, relating to the
                                    hazards of asbestos.
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                                       2


         (D)      "Bodily Injury" means bodily injury to a person, including
                  without limitation, illness, sickness, disease, loss of
                  consortium, death, mental anguish, emotional distress, or fear
                  of cancer.

         (E)      "Business Day" means any day other than a Saturday, a Sunday
                  or a day on which banking institutions in New York, New York,
                  or the Islands of Bermuda are authorized or obligated by law,
                  regulation or executive order to be closed.

         (F)      "Claim" means any past, present or future claim, demand,
                  request, complaint, cross-complaint, cross-claim, right, suit,
                  lawsuit, action or proceeding or cause of action or order
                  seeking monetary relief (including, without limitation,
                  punitive or exemplary damages) or other relief (including,
                  without limitation, medical monitoring, injunctive or
                  declaratory relief).

         (G)      "Commutation Date" has the meaning given to such term in
                  Section 8.3 of this Policy.

         (H)      "Direct Actions" has the meaning given to such term in Section
                  8.4 of this Policy.

         (I)      "Disputed Net Loss" has the meaning given to such term in
                  Section 8.1(C) of this Policy.

         (J)      "Experience Value" has the meaning given to such term in
                  Section 7.7 of this Policy.

         (K)      "Insurance Company" has the meaning given to such term in the
                  Declarations of this Policy.

         (L)      "Insurance Company's Quota Share" means twenty-five percent
                  (25.00%).

         (M)      "Insurance Coverage Claim" means any past, present or future
                  Claim against the Insured seeking (a) monetary or other relief
                  (including without limitation, medical monitoring, injunctive
                  or declaratory relief) from the Insured under any insurance or
                  reinsurance policies or contracts issued by the Insured, or
                  (b) damages, injunctive or other relief due to allegedly
                  unlawful claims handling practices of the Insured, including
                  without limitation, any Claims against the Insured for bad
                  faith or breach of fiduciary duties due to the manner in which
                  the Insured investigated, settled or paid claims under any
                  insurance or reinsurance policies or contracts issued by the
                  Insured.

         (N)      "Insured" has the meaning given to such term in Item 1 of the
                  Declarations of this Policy.

         (O)      "Insured Payments" means (i) all amounts actually paid by the
                  Insured and (ii) all amounts actually paid on behalf of the
                  Insured by the issuers of the Settled Policies ("Issuers") in
                  connection with the Settled Policies excluding (x) payments to
                  the
<PAGE>   5
                                       3


                  Insured by the Issuers in connection with the Settled Policies
                  and (y) payments by the Insured to the Issuers in connection
                  with the Settled Policies.

         (P)      "Loss", except as set forth in Section 3.3 of the Claims
                  Handling and Cooperation Agreement executed simultaneously
                  herewith, means the amounts of Insured Payments made on or
                  after the Policy Inception Date,

                           (i)      in investigating or defending any
                                    Asbestos-Related Claims including fees and
                                    expenses of the Insured's national
                                    coordinating counsel, other attorneys' fees
                                    and expenses, premiums on attachment or
                                    appeal bonds, pre-judgment and post-judgment
                                    interest, and expenses for experts;

                           (ii)     in settling Asbestos-Related Claims for
                                    which:

                                    (a)     a written release,

                                    (b)     evidence of a physical condition
                                            that has been claimed in the
                                            scientific or medical literature to
                                            be caused by exposure to asbestos or
                                            asbestos containing products, and

                                    (c)     proof of exposure to asbestos or
                                            asbestos containing products (by way
                                            of interrogatory answer, affidavit
                                            (which may be included within the
                                            release), personnel record, work
                                            history sheet or other evidence of
                                            exposure

                                    have been obtained from or in respect of an
                                    individual, identified claimant in
                                    connection with any Asbestos-Related Claims;

                           (iii)    in satisfying judgments in connection with
                                    any Asbestos-Related Claims; and

                           (iv)     in settling Asbestos-Related Claims for
                                    which the documentation set forth in
                                    Sections (O)(ii)(a) through (c) above has
                                    not all been obtained, provided, however,
                                    that the cumulative amount of such payments
                                    included in Loss shall be no greater than 5%
                                    of the cumulative amount of Insured Payments
                                    made subsequent to the Policy Inception Date
                                    in settling Asbestos-Related Claims for
                                    which such documentation has been obtained.

                  "Loss" does not include the salaries, wages, or benefits of
                  the Insured's permanent or temporary employees, directors or
                  officers, including in-house lawyers, or the Insured's
                  administrative expenses, office expenses or overhead.

         (Q)      "Loss Offset" has the meaning given to such term in Section
                  7.6 of this Policy.

         (R)      "Loss Report" has the meaning given to such term in Section
                  8.1(A) of this Policy.
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                                       4


         (S)      "Losses to be paid by the Insurance Company on such Settlement
                  Date" has the meaning given to such term in Section 7.3(3) of
                  this Policy.

         (T)      "Per Claimant Average Amount" has the meaning given to such
                  term in Section 3.4 of this Policy.

         (U)      "Per Claimant Limit" has the meaning given to such term in
                  Section 3.3 of this Policy.

         (V)      "Period of Indemnification" has the meaning given to such term
                  in Item 2 of the Declarations of this Policy.

         (W)      "Policy Inception Date" has the meaning given to such term in
                  Item 2 of the Declarations of this Policy.

         (X)      "Premium" has the meaning given to such term in Item 4 of the
                  Declarations of this Policy.

         (Y)      "Premium Payment Date" means the day on which the total
                  Premium is received by the Insurance Company.

         (Z)      "Reference Value" has the meaning given to such term in
                  Section 7 of this Policy.

         (AA)     "Retention" has the meaning given to such term in Section 4 of
                  this Policy.

         (BB)     "Scheduled Underlying Policies" means the policies listed in
                  the attached Schedule A to this Policy.

         (CC)     "Settled Policies" means those policies issued by Travelers
                  Insurance Company or Travelers Indemnity Company listed in
                  Schedule B to this Policy.

         (DD)     "Settlement Date" has the meaning given to such term in
                  Section 7.1 of this Policy.

         (EE)     "Territory" means the United States of America, its
                  territories and possessions and the Commonwealth of Puerto
                  Rico.


SECTION 3.        LIMITS OF INSURANCE

3.1.     AGGREGATE LIMIT OF INDEMNITY

Regardless of the number of claimants or Asbestos-Related Claims covered under
this Policy, the maximum amount payable by the Insurance Company for all Loss
(including defense expenses) covered under this Policy shall not exceed Three
Hundred Seventy-Five Million Dollars ($375,000,000) in the absolute aggregate as
the Insurance Company's Quota Share of One Billion Five Hundred Million Dollars
($1,500,000,000) in the absolute aggregate for all Loss excess of the Retention.
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                                       5


This Aggregate Limit of Indemnity is the maximum amount recoverable by the
Insured under this Policy, excluding payments for commutation under this Policy.

3.2.     ANNUAL SUBLIMIT

Subject to the Aggregate Limit of Indemnity described in Section 3.1 above, the
maximum amount payable by the Insurance Company at any Settlement Date for all
Loss in the calendar year immediately prior to such Settlement Date ("calendar
year(x)"), during the Period of Indemnification in respect of Loss under this
Policy shall not exceed the Insurance Company's Quota Share of the Annual
Sublimit for calendar year(x). The Annual Sublimit shall be calculated by the
Insurance Company for calendar year(x) and shall be equal to:

         (1)      the Per Claimant Average Amount for calendar year(x)
                  multiplied by

         (2)      the "Number of Individual Asbestos-Related Claims" for
                  calendar year(x).

A claimant shall be included in the calculation of the "Number of Individual
Asbestos-Related Claims" for calendar year(x) when Loss is paid to that claimant
pursuant to the criteria in Sections 2(O)(ii), (iii) and (iv); provided,
however, that members of the same family without their own independent
asbestos-related injury due to their own exposure to asbestos shall all be
treated for purposes of this Policy as a single Asbestos-Related Claim with the
primary claim notwithstanding the fact that all such individuals may have
provided separate releases.

The "Number of Individual Asbestos-Related Claims" for purposes of the
calculation in the previous paragraph shall be determined by treating claims by
each individual qualifying claimant as a separate Asbestos-Related Claim
regardless of whether claims by such claimant are part of a group or bulk
settlement.

3.3.     PER CLAIMANT LIMIT

The Per Claimant Limit shall be One Hundred Fifty Million Dollars
($150,000,000), per claimant.

3.4.     PER CLAIMANT AVERAGE AMOUNT

On the 1st through 9th Settlement Dates, the Per Claimant Average Amount shall
be equal to the total amount paid by the Insured in calendar year 1996 for
asbestos-related claims divided by the number 15,750. The total amount paid by
the Insured in calendar year 1996 for such claims shall be agreed by the
Insurance Company and the Insured prior to the Premium Payment Date. Once such
amount is agreed to by the Insurance Company and the Insured, such amount shall
not be adjusted due to the receipt of any additional information or for any
other reason, except with the prior written consent of the Insured and the
Insurance Company.
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                                       6


On the 10th and each subsequent Settlement Date, the Per Claimant Average Amount
for calendar year(x) shall equal the Per Claimant Average Amount from the
previous Settlement Date, increased by the annual inflation change for the
previous calendar year(x-1), if any, as defined by the United States Consumer
Price Index ("CPI") as of the Settlement Date for which the calculation is being
made and calculated by the Insurance Company as follows:

         Per Claimant Average Amount in calendar year(x) shall be equal to the
greater of:

         (1)      the Per Claimant Average Amount in calendar year(x-1); or

         (2)      (the CPI in calendar year(x) divided by the CPI in calendar
                  year(x-1)) multiplied by the Per Claimant Average Amount in
                  calendar year(x-1).


SECTION 4.        RETENTION

The Retention to be borne by the Insured under this Policy shall equal Four
Hundred Million Dollars ($400,000,000) plus all Loss paid by the Insured on or
after the Policy Inception Date and prior to the Premium Payment Date.


SECTION 5.        PREMIUM

The Premium of Two Hundred Twenty Million Five Hundred Twelve Thousand Eight
Hundred Twenty-One Dollars ($220,512,821) for this Policy, shall be payable by
the Insured in full on or before December 31, 1998. The Premium shall be payable
to the Insurance Company in immediately available non-reversible funds, free and
clear of any set-off, counterclaim or other deduction. The Premium shall be
payable to an account specified by the Insurance Company.

The Premium shall be considered fully earned when received by the Insurance
Company.

If the Insured fails to pay the Premium in full and in accordance with the terms
of this Section, this Policy shall not come into effect and shall not in any way
bind the Insurance Company.


SECTION 6.        EXCLUSIONS

This Policy does not cover:

         (A)      Any injury or damage to property (tangible or intangible),
                  real or personal, including any resulting loss of use or
                  reduction in value of such property, no matter how such
                  injury, damage, loss of use or reduction in value occurred.

         (B)      Payments under any workers' compensation policies or plans,
                  employee benefit plans, or other employer liability of the
                  Insured.

         (C)      Any Insurance Coverage Claim.
<PAGE>   9
                                       7


SECTION 7.        EXPERIENCE VALUES

7.1.     SETTLEMENT DATE

For each calendar year, the Settlement Date will be a date designated by the
Insurance Company, which shall be within thirty-five (35) days of the later of:

         (i)      the receipt by the Insurance Company of the Insured's Loss
                  Report for the calendar year last ended; and

         (ii)     March 3rd of that calendar year.

7.2.     ANNUAL SETTLEMENT

On the Settlement Date, the Insurance Company shall:

         1.       Calculate:

                  a.       The application of the Annual Sublimit to Loss based
                           upon the Loss Report provided by the Insured;

                  b.       Any Loss Offset payable pursuant to Section 7.6;

                  c.       The remaining Retention;

                  d.       The "Losses to be paid by the Insurance Company on
                           such Settlement Date" pursuant to Section 7.3(3)
                           below;

                  e.       Disputed Net Loss (if any) pursuant to Section
                           8.1(C);

                  f.       "Actual amounts to be paid to the Insured" pursuant
                           to Section 7.3(4).

         2.       Report to the Insured:

                  a.       The calculations of Annual Sublimit, Loss Offset if
                           any, Retention, remaining Aggregate Limit of
                           Indemnity, and all other items calculated in Section
                           7.2(1);

                  b.       The Total Reference Value, together with a detailed
                           calculation thereof;

                  c.       The Experience Value, together with a detailed
                           calculation thereof;

                  d.       Schedule of all Disputed Net Loss (if any) pursuant
                           to Section 8.1(C).

         3.       Pay such amounts as calculated in Sections 7.2(1.e) and
                  7.2(1.f).
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                                       8


7.3.     CALCULATION OF AMOUNT TO BE PAID AT EACH SETTLEMENT DATE

         At each Settlement Date, the Insurance Company shall:

         1.       Determine the amount of the Annual Sublimit pursuant to
                  Section 3.2.

         2.       Determine the lesser of:

                  a.       the Annual Sublimit determined pursuant to Section
                           7.3(l), and

                  b.       the Losses according to the Insured's Loss Report.

         3.       Calculate the "Losses to be paid by the Insurance Company on
                  such Settlement Date", which shall equal: (a) the Insurance
                  Company's Quota Share of the quantity arrived at by
                  subtracting any remaining Retention from the amount determined
                  pursuant to Section 7.3(2) except that;(b) if the amount
                  determined pursuant to Section 7.3(3)(a) is less than zero
                  (0), the "Losses to be paid by the Insurance company on such
                  Settlement Date" shall be deemed to equal zero (0), and if the
                  amount determined pursuant to Section 7.3(3)(a) is greater
                  than the remaining Aggregate Limit of Indemnity immediately
                  prior to the Settlement Date, the "Losses to be paid by the
                  Insurance company on such Settlement Date" shall be deemed to
                  equal the remaining Aggregate Limit of Indemnity immediately
                  prior to the Settlement Date.

         4.       Calculate the "Actual amounts to be paid to the Insured",
                  which shall equal the amount determined pursuant to Section
                  7.3(3) less Disputed Net Loss less Loss Offset. Such resulting
                  amount shall not be less than zero.

         5.       Determine the amount to be paid into the segregated
                  interest-bearing account, if any, pursuant to Section 8.1(C)
                  which shall be the lesser of:

                  a.       the Disputed Net Loss, and

                  b.       the "Losses to be paid by the Insurance Company on
                           such Settlement Date" minus the Loss Offset.

7.4.     DATE CONVENTION; AMOUNTS

Unless otherwise specified, all quantities or values mentioned in this Section 7
are as of the close of business on the subject Settlement Date.

The use of the phrase "or Premium Payment Date" applies only at the first
Settlement Date.

7.5.     PRECISE YEARS

The Precise Years at the first Settlement Date shall be the actual number of
days elapsed from but not including the Premium Payment Date to and including
three (3) Business Days prior to the first Settlement Date divided by 365.
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                                       9


The Precise Years at each subsequent Settlement Date shall be the actual number
of days elapsed from three (3) Business Days prior to the prior Settlement Date
to three (3) Business Days prior to that Settlement Date divided by the actual
number of days in the year of that Settlement Date.

7.6.     LOSS OFFSET

If on any Settlement Date the Reduced Reference Value (as defined below) is less
than the Experience Value, before deducting "Losses to be paid by the Insurance
Company on such Settlement Date", and if the Experience Value is greater than
zero (0), then the Insured shall pay a Loss Offset to the Insurance Company
equal to:

         ((A) minus (B)) multiplied by ((C) divided by (A)), where:

                  (A) is equal to the Experience Value before deducting "Losses
                  to be paid by the Insurance Company on such Settlement Date";

                  (B) is equal to the Reduced Reference Value; and

                  (C) is equal to "Losses to be paid by the Insurance Company on
                  such Settlement Date";

                  provided, however, in no event shall (C) be greater than (A).

7.7.     EXPERIENCE VALUE

The Experience Value shall be a notional value calculated by the Insurance
Company as follows:

         1.       On the Premium Payment Date, the Experience Value shall be One
                  Hundred Ninety-Seven Million Two Hundred Fifty Thousand
                  Dollars ($197,250,000).

         2.       At each Settlement Date, the Experience Value shall equal:

                  The Experience Value at the prior Settlement Date (or Premium
                  Payment Date) multiplied by 1.06 raised to the power of the
                  Precise Years

                  Plus

                  the Insurance Company's Quota Share of any Salvage,
                  subrogation, and other recoveries that are to the benefit of
                  the Insurance Company under this Policy and have been paid to
                  the Insured since the prior Settlement Date or Premium Payment
                  Date

                  Less

                  "Losses to be paid by the Insurance Company on such Settlement
                  Date".
<PAGE>   12
                                       10


7.8.     REFERENCE VALUE

         (A)      TOTAL REFERENCE VALUE

                  The Total Reference Value at any time shall be equal to the
                  sum of Reference Value A plus Reference Value B.

         (B)      ORDER OF LOSS ATTRIBUTION

                  Losses, Loss Offset, salvage, subrogation, and other
                  recoveries and charges shall be attributed to Reference Value
                  A until the Number of Units of Reference Index A shall equal
                  zero (0).

                  Losses, Loss Offset, salvage, subrogation, and other
                  recoveries and charges shall next be attributed to Reference
                  Value B.

         (C)      REDUCED REFERENCE VALUE

                  The Reduced Reference Value shall be equal to the sum of
                  Reduced Reference Value A and Reduced Reference Value B.

         (D)      REFERENCE VALUE A

                  The Reference Value A for a Settlement Date shall be the
                  Number of Units of the Reference Index A deemed held by the
                  Insurance Company multiplied by the Reference Index Unit Value
                  A as of the close of business three (3) Business Days prior to
                  that Settlement Date.

                  (1)      REFERENCE INDEX A

                           Reference Index A at any date shall be equal to the
                           Lehman Brothers Aggregate Bond Index as of the close
                           of business on such date. If the Lehman Brothers
                           Aggregate Bond Index is not available or is no longer
                           in existence, then the following indices will be
                           substituted in order of preference: the Salomon Broad
                           Investment Grade Index, or the Merrill Lynch Domestic
                           Master Index. If both of these indices are not
                           available or are no longer in existence, then the
                           Insured and the Insurance Company shall mutually
                           agree upon an alternative index substantially similar
                           to the foregoing indices.

                  (2)      REFERENCE INDEX UNIT VALUE A

                           At the Premium Payment Date, the Reference Index Unit
                           Value A shall be One Million Dollars ($1,000,000).

                           At three (3) Business Days prior to each Settlement
                           Date, the Reference Index Unit Value A shall be equal
                           to One Million Dollars ($1,000,000) multiplied by the
                           published value of the Reference Index A as of the
                           close
<PAGE>   13
                                       11


                           of business three (3) Business Days prior to that
                           Settlement Date divided by the Reference Index A at
                           the Premium Payment Date. The published value of
                           Reference Index A at the close of business on the
                           Premium Payment Date was 840.66.

                  (3)      NUMBER OF UNITS OF THE REFERENCE INDEX A

                           On the Premium Payment Date, the Number of Units of
                           the Reference Index A deemed held by the Insurance
                           Company shall be equal to One Hundred Five Million
                           Eight Hundred Seventy-Eight Thousand One Hundred
                           Twenty-Five Dollars ($105,878,125) divided by the
                           Reference Index Unit Value A on the close of business
                           that date (which results in 105.878125).

                           On each Settlement Date, the Number of Units of the
                           Reference Index A shall be the Number of Units of the
                           Reduced Reference Index A less (J-K)/L where:

                                    J = "Losses to be paid by the Insurance
                                    Company on that Settlement Date" and charges
                                    that are attributable to Reference Value A;

                                    K = Any Loss Offset, plus the Insurance
                                    Company's Quota Share of any salvage,
                                    subrogation, and other recoveries, that are
                                    attributable to Reference Value A;

                                    L = The Reference Index Unit Value A as of
                                    the close of business three (3) Business
                                    Days prior to that Settlement Date.

                           If the Number of Units of Reference Index A shall
                           ever equal zero (0), it will be zero thereafter.

                  (4)      NUMBER OF UNITS OF THE REDUCED REFERENCE INDEX A

                           The Number of Units of the Reduced Reference Index A
                           at a Settlement Date shall be the Number of Units of
                           Reference Index A deemed held by the Insurance
                           Company at the prior Settlement Date (or Premium
                           Payment Date) multiplied by the difference between
                           the quantity of one and the product of .0016 and the
                           Precise Years.

                           Formula: The Number of Units of the Reduced Reference
                           Index A at a Settlement Date = (Number of Units of
                           Reference Index A at prior Settlement Date (or
                           Premium Payment Date))* (1 - .0016 * Precise Years).
<PAGE>   14
                                       12


                  (5)      REDUCED REFERENCE VALUE A

                           The Reduced Reference Value A shall be the Number of
                           Units of the Reduced Reference Index A deemed held by
                           the Insurance Company multiplied by the Reference
                           Index Unit Value A.

         (E)      REFERENCE VALUE B

                  The Reference Value B for a Settlement Date shall be the
                  Number of Units of the Reference Index B deemed held by the
                  Insurance Company multiplied by the Reference Index Unit Value
                  B as of the close of business three (3) Business Days prior to
                  that Settlement Date.

                  (1)      REFERENCE INDEX B

                           Reference Index B at any date shall be equal to the
                           Standard & Poor's 500 Index (Total Return Basis) as
                           of the close of business on such date. If the
                           Standard & Poor's 500 Index is not available or is no
                           longer in existence, then the following indices will
                           be substituted in order of preference: the Morgan
                           Stanley Capital International Country Index for US,
                           or the Russell 1000 Index. If both of these indices
                           are not available or are no longer in existence, then
                           the Insured and the Insurance Company shall mutually
                           agree upon an alternative index substantially similar
                           to the foregoing indices.

                  (2)      REFERENCE INDEX UNIT VALUE B

                           At the Premium Payment Date, the Reference Index Unit
                           Value B shall be One Million Dollars ($1,000,000).

                           At three (3) Business Days prior to each Settlement
                           Date, the Reference Index Unit Value B shall be equal
                           to One Million Dollars ($1,000,000) multiplied by the
                           published value of the Reference Index B as of the
                           close of business three (3) Business Days prior to
                           that Settlement Date divided by the Reference Index B
                           at the Premium Payment Date. The published value of
                           the Reference Index B at the close of business on the
                           Premium Payment Date was 1670.01.

                  (3)      NUMBER OF UNITS OF THE REFERENCE INDEX B

                           On the Premium Payment Date, the Number of Units of
                           the Reference Index B deemed held by the Insurance
                           Company shall be equal to Ninety Million Nine Hundred
                           Fifty-Four Thousand Five Hundred Dollars
                           ($90,954,500) divided by the Reference Index Unit
                           Value B as of the close of business on that date
                           (which results in 90.9545).
<PAGE>   15
                                       13


                           On each Settlement Date, the Number of Units of the
                           Reference Index B shall be the Number of Units of the
                           Reduced Reference Index B less (J-K)/L where:

                                    J = "Losses to be paid by the Insurance
                                    Company on that Settlement Date" and charges
                                    that are attributable to Reference Value B;

                                    K = Any Loss Offset, plus the Insurance
                                    Company's Quota Share of any salvage,
                                    subrogation, and other recoveries that are
                                    attributable to Reference Value B;

                                    L = The Reference Index Unit Value B as of
                                    the close of business three (3) Business
                                    Days prior to that Settlement Date.

                           If the Number of Units of Reference Index B shall
                           ever equal zero (0), it will be zero thereafter.

                  (4)      NUMBER OF UNITS OF THE REDUCED REFERENCE INDEX B

                           The Number of Units of the Reduced Reference Index B
                           at a Settlement Date shall be the Number of Units of
                           Reference Index B deemed held by the Insurance
                           Company at the prior Settlement Date (or Premium
                           Payment Date) multiplied by the difference between
                           the quantity of one (1) and the product of .0018 and
                           the Precise Years. The Reduction of Notional
                           Investment Income for Notional Income Taxation is
                           then subtracted from this amount.

                                    Formula: The Number of Units of the Reduced
                                    Reference Index B at a Settlement Date =
                                    (Number of Units of Reference Index B at
                                    prior Settlement Date (or Premium Payment
                                    Date)) * (1 - .0018 * Precise Years) -
                                    Reduction of Notional Investment Income for
                                    Notional Income Taxation.

                  (a)      REDUCTION OF NOTIONAL INVESTMENT INCOME FOR NOTIONAL
                           INCOME TAXATION

                           The Reduction of Notional Investment Income for
                           Notional Income Taxation shall be equal to 15% of V
                           multiplied by {(W divided by X) minus (Y divided by
                           Z)}, or 0.15 * V * (W/X - Y/Z)

                           where

                                    V = Number of Units of Reference Index B at
                                    the prior Settlement Date (or on the Premium
                                    Payment Date);
<PAGE>   16
                                       14



                                    W = Reference Index Unit Value B at the
                                    close of business three (3) Business Days
                                    prior to this Settlement Date;

                                    X = Reference Index Unit Value B at the
                                    close of business three (3) Business Days
                                    prior to the prior Settlement Date (or on
                                    the Premium Payment Date);

                                    Y = Value of the Standard & Poor's 500 Index
                                    (not on a total return basis) at the close
                                    of business three (3) Business Days prior to
                                    this settlement date;

                                    Z = Value of the Standard & Poor's 500 Index
                                    (not on a total return basis) at the close
                                    of business three (3) Business Days prior to
                                    the previous Settlement Date (or on the
                                    Premium Payment Date, on which, at the close
                                    of business, the value of the Standard &
                                    Poor's 500 Index was 1229.23).

         (5)      REDUCED REFERENCE VALUE B

                  The Reduced Reference Value B shall be the Number of Units of
                  the Reduced Reference Index B deemed held by the Insurance
                  Company multiplied by the Reference Index Unit Value B.


SECTION 8.        CONDITIONS

8.1.     REPORTING OF AND PAYMENT FOR LOSS

         (A)      Within seventy-five (75) days after the end of each calendar
                  year, the Insured shall furnish the Insurance Company with a
                  written "Loss Report", providing, in a format acceptable to
                  the Insurance Company and the Insured, the Loss paid during
                  that calendar year. Each Loss Report shall provide both the
                  cumulative position from the Policy Inception Date through the
                  end of that calendar year and the changes within that calendar
                  year. The Insured shall also furnish the Insurance Company
                  such other financial data, and in such format, that the
                  Insurance Company may reasonably request for completion of its
                  statutory or other financial statements. The Insured and the
                  Insurance Company agree that, in light of the commonality of
                  interest evidenced by the execution of this Policy, furnishing
                  a Loss Report or other financial data pursuant to this Section
                  8.1 will not be considered a waiver of any attorney-client or
                  attorney-work-product privileges.

         (B)      If the Insurance Company disputes any portion of the amount
                  claimed by the Insured, the Insurance Company shall
                  nevertheless pay to the Insured the undisputed portion of the
                  amount claimed. Any payment pursuant to this Subsection shall
                  not constitute a waiver of the Insurance Company's objections
                  to the disputed portion of the amount claimed.
<PAGE>   17
                                       15


         (C)      Any disputed amount not paid by the Insurance Company to the
                  Insured at the relevant Settlement Date shall be deemed
                  "Disputed Net Loss." With respect to any Disputed Net Loss,
                  the Insurance Company shall pay on the Settlement Date the
                  Disputed Net Loss into a segregated interest-bearing account
                  at a bank with a net worth of at least One Hundred Million
                  Dollars ($100,000,000). The Insurance Company will provide
                  notice to the Insured on the Settlement Date of the amount and
                  circumstances of the Disputed Net Loss and of the details of
                  the segregated account. Withdrawals from the account shall
                  require either the consent of both the Insurance Company and
                  the Insured or a final arbitration award pursuant to Section
                  8.6. Until such withdrawal, however, legal ownership of the
                  account and all cash or other assets held therein shall be in
                  the Insurance Company.

No later than ten (10) days after any agreement between the Insured and the
Insurance Company to settle such disputed amount or a final arbitration award
(to the extent the Insured is successful), the cash and any other assets held in
the account together with the interest income credited thereto net of tax, if
any, thereon at the applicable tax rate on such income shall be immediately paid
to the Insured. To the extent the Insurance Company is successful, then the cash
and any other assets held in the account together with the interest income
credited thereto will be paid to the Insurance Company at the next Settlement
Date, and that amount shall be added into the Reference Value and Experience
Value at such Settlement Date.

8.2.     SETTLEMENT OF NATIONAL CLASS ACTION

         (A)      In the event the Insured is a party to an action asserting
                  Asbestos-Related Claims, which is certified as a "National
                  Class Action" by a court of competent jurisdiction, and the
                  Insured enters into a National Class Action Settlement, the
                  Insured at its sole option may elect either to:

                           (i)      commute the Policy in accordance with
                                    Section 8.3 (notwithstanding the permitted
                                    dates for commutation stated therein); or

                           (ii)     irrevocably forego recovery of such
                                    settlement amount under this Policy.

         (B)      Within ten (10) Business Days after the date upon which the
                  National Class Action Settlement receives final,
                  non-appealable court approval, the Insured shall notify the
                  Insurance Company of its election pursuant to paragraph (A)
                  above.

         (C)      For the purposes of this Section 8.2:

                  "National Class Action" means an action brought by or on
                  behalf of one or more classes of individuals located
                  substantially throughout the Territory who have allegedly
                  sustained or may in the future sustain Bodily Injury from
                  exposure to asbestos.
<PAGE>   18
                                       16


                  "National Class Action Settlement" means a settlement that
                  fully and finally resolves all then pending and future
                  Asbestos-Related Claims other than "opt-outs" encompassed by a
                  National Class Action.

8.3.     COMMUTATION

This Policy may be irrevocably commuted by the Insured, upon not less than
thirty (30) days prior written notice to the Insurance Company, (i) effective
December 31, 2008 or on every fifth (5th) year anniversary of such date
occurring thereafter, or (ii) in the event that the greater of the Total
Reference Value or the Experience Value exceeds the remaining Aggregate Limit of
Indemnity during the calendar year. Within thirty (30) days after the effective
date of the commutation (the "Commutation Date"), the Insurance Company shall
pay to the Insured a commutation payment equal to ninety-eight percent (98%) of
the Total Reference Value, three (3) Business Days prior to the Commutation
Date, and the Insured shall provide to the Insurance Company a full release in
form and substance reasonably satisfactory to the Insurance Company, and the
Insurance Company shall be fully and finally released from any and all liability
and obligations under this Policy.

8.4.     DIRECT ACTIONS

         (A)      "Direct Actions" shall mean all claims or proceedings asserted
                  or initiated against the Insurance Company (whether grounded
                  upon direct action or "reach and apply" statutes, third-party
                  beneficiary or garnishment theories, or otherwise) for the
                  purpose of causing the Insurance Company directly or
                  indirectly, to satisfy claims that have been or could have
                  been asserted against the Insured, which claims or proceedings
                  would not or could not have been asserted against the
                  Insurance Company had the Insurance Company not issued this
                  Policy.

         (B)      The Insured agrees that if the Insurance Company becomes
                  obligated to pay any sums as a result of any judgment entered
                  or compromise reached in a Direct Action, the Insured shall
                  fully indemnify and hold harmless the Insurance Company for
                  any such sums. The sums so indemnified by the Insured,
                  together with the costs of defense paid by the Insured
                  pursuant to Section 8.4(C), shall constitute loss under this
                  Policy, provided, that such sums satisfy the definition of
                  "Loss" herein.

         (C)      The Insured shall control, direct and pay the costs of the
                  defense of any Direct Action including decisions regarding
                  settlement and may elect to appoint the counsel representing
                  the Insured in the Direct Action or in other litigation to
                  defend the Insurance Company in the Direct Action. No position
                  taken by counsel appointed by the Insured to defend the
                  Insurance Company in a Direct Action shall be used or shall be
                  otherwise admissible in any fashion in connection with any
                  dispute between the Insurance Company and the Insured. The
                  Insured shall not take any coverage position on any issue of
                  coverage under this Policy which may be in dispute in such
                  Direct Action without the Insurance Company's prior written
                  input.
<PAGE>   19
                                       17


         (D)      In the event the Insured does not control, direct and pay the
                  costs of the defense of a Direct Action, the Insurance Company
                  shall direct and control the defense of the Direct Action
                  including decisions regarding settlement. The Insured shall
                  fully indemnify and hold harmless the Insurance Company for
                  any legal fees or other costs paid by the Insurance Company in
                  defense of a Direct Action where the Insured does not control,
                  direct and pay the costs of such defense.

8.5.     NON-TRANSFERABILITY

This Policy confers no rights, powers or obligations on any person or
organization other than the Insurance Company and the Insured. Neither this
Policy nor any of the rights, powers, or obligations of the Insurance Company or
the Insured under it may be in any way transferred or assigned to any other
person or organization without express written consent by the Insurance Company
and the Insured. The granting of such consent shall be at the sole and absolute
discretion of each of the parties.

8.6.     ARBITRATION

Except as otherwise agreed upon by the parties in writing:

         (A)      Resolution of Disputes: Any dispute between the Insured and
                  the Insurance Company arising out of or in connection with
                  this Policy or concerning its interpretation or validity or
                  the performance of the parties hereunder, whether arising
                  before or after termination of this Policy, shall be submitted
                  exclusively to arbitration in the manner set forth in this
                  Section 8.6, and the award shall be the exclusive remedy
                  available to a party under this Policy. Either party may
                  initiate arbitration of any such dispute by giving written
                  notice to the other party, by registered or certified mail,
                  return receipt requested, of its intention to arbitrate and of
                  its appointment of an arbitrator in accordance with subsection
                  (C) of this Section 8.6.

         (B)      Composition of Panel: Unless the parties agree upon a single
                  arbitrator within fifteen (15) days after the receipt of a
                  notice of intention to arbitrate, all disputes shall be
                  submitted to an arbitration panel composed of two arbitrators
                  and an umpire, chosen in accordance with subsections (C) and
                  (D) of this Section 8.6.

         (C)      Appointment of Arbitrators: The members of the arbitration
                  panel shall be chosen from disinterested persons having
                  knowledge of and experience in the insurance, reinsurance and
                  financial issues relevant to the matters in dispute. The party
                  requesting arbitration (hereinafter referred to as the
                  "requesting party") shall appoint an arbitrator and give
                  written notice thereof, by registered or certified mail,
                  return receipt requested, to the other party (hereinafter
                  referred to as the "respondent") together with its notice of
                  intention to arbitrate. Unless a single arbitrator is agreed
                  upon within fifteen (15) days after the receipt of the notice
                  of intention to arbitrate, the respondent shall, within thirty
                  (30) days after receiving such notice, also appoint an
                  arbitrator and notify the requesting party thereof in a
<PAGE>   20
                                       18


                  like manner. Before instituting a hearing, the two arbitrators
                  so appointed shall choose an umpire. If, within twenty (20)
                  days after they are both appointed, the arbitrators fail to
                  agree upon the appointment of an umpire, the umpire shall be
                  appointed by the President of the American Arbitration
                  Association.

         (D)      Failure of Party to Appoint Arbitrator: If the respondent
                  fails to appoint an arbitrator within thirty (30) days after
                  receiving a notice of intention to arbitrate, such arbitrator
                  shall be appointed by the President of the American
                  Arbitration Association, and shall then, together with the
                  arbitrator appointed by the requesting party, choose an umpire
                  as provided in subsection (C) of this Section 8.6.

         (E)      Choice of Law and Forum: Any arbitration instituted pursuant
                  to this Section 8.6 shall be held in Wilmington, Delaware. Any
                  action to enforce any arbitration award or to compel
                  arbitration shall be brought only in the state courts of the
                  State of Delaware situated in New Castle County, to the
                  exclusion of all other courts. The substantive laws of the
                  State of Delaware, without regard to its conflict of laws
                  rules, shall govern any action or suit brought to compel any
                  such arbitration or to enforce any award rendered pursuant to
                  such arbitration.

         (F)      Submission of Dispute to Panel: Unless otherwise extended by
                  the arbitration panel, or agreed to by the parties, each party
                  shall submit its case to the panel within thirty (30) days
                  after the selection of an umpire.

         (G)      Procedure Governing Arbitration: All proceedings before the
                  panel shall be informal, and the panel shall not be bound by
                  the formal rules of evidence. The panel shall have the power
                  to fix all procedural rules relating to the arbitration
                  proceeding. In reaching any decision, the panel shall give due
                  consideration to the customs and usage of the insurance,
                  reinsurance and finance business.

         (H)      Arbitration Award: The arbitration panel shall render its
                  decision within sixty (60) days after conclusion of the
                  hearing, which decision shall be in writing, stating the
                  reasons therefor. The decision of the majority of the panel
                  shall be final and binding on the parties to the proceeding.
                  Judgment on the award may be entered in any court of competent
                  jurisdiction, and execution of any monetary judgment may occur
                  in any jurisdiction.

         (I)      Cost of Arbitration: Unless otherwise allocated by the
                  arbitration panel, each party shall bear the expense of its
                  own arbitrator and its own witnesses and shall jointly and
                  equally bear with the other parties the expense of the umpire
                  and the arbitration.

         (J)      Limit of Power of Arbitration Panel: The arbitration panel
                  does not have the power to award punitive, multiplied, or
                  exemplary damages, other similar damages or any extra
                  contractual damages of any nature or description whatsoever,
                  except to the extent claimed as a Loss under this Policy, and
                  the Insured and the
<PAGE>   21
                                       19


                  Insurance Company expressly waive all rights to punitive,
                  multiplied, or exemplary damages, other similar damages or any
                  extra contractual damages of any nature or description
                  whatsoever, except to the extent claimed as Loss under this
                  Policy.

8.7.     OTHER INSURANCE

The obligation of the Insurance Company to pay Loss under this Policy is in
excess of the limits of liability under all of the Scheduled Underlying Policies
which are applicable to Asbestos-Related Claims. To the extent that the insurer
identified on such Scheduled Underlying Policies refuses or fails to pay any
amounts thereunder with respect to Asbestos-Related Claims, the Insurance
Company shall pay such amounts to the extent such amounts constitute Loss
hereunder, and shall thereafter be subrogated to the Insured's rights against
the non-paying insurers to the extent of any and all such payments by the
Insurance Company.

8.8.     AMENDMENT

This Policy may be amended only by mutual consent of the parties expressed in a
written endorsement executed by the parties with the same formalities as this
Policy, and such addendum shall be deemed to be an integral part of this Policy
and binding on the parties hereto.

8.9.     CONFIDENTIALITY

Any information that is not independently available from a non-confidential
source and is disclosed to the Insurance Company or its representatives in
connection with this Policy shall be treated as confidential by the Insurance
Company until any such information becomes independently available in
substantially similar form from a non-confidential source (all such information
referred to herein as "Confidential Information"). The Insurance Company shall
use its best efforts to preserve and protect the confidentiality of, and where
applicable, the privilege pertaining to, all Confidential Information. Unless
the Insured gives prior written consent or unless compelled by the law to
disclose such information, the Insurance Company may not disclose Confidential
Information to any person other than the legal representatives, accountants,
rating agencies or advisors of the Insurance Company or its affiliates, or the
co-insurers of this Policy and their respective legal representatives,
accountants or advisors (each, an "Authorized Third Party"), or tax and
regulatory authorities, and neither the Company nor any Authorized Person may
use Confidential Information for any purpose except in connection with the
exercise of its rights and obligations under this Policy or the rights and
obligations of the Insurance Company's reinsurers or retrocessionaires with
respect to this Policy. If the Insurance Company discloses any Confidential
Information to any Authorized Third Party, other than legal representatives, the
Insurance Company shall make reasonable efforts to minimize the amount of
information disclosed, taking into consideration the reason for the disclosure,
including where feasible marking all files containing Confidential Information
provided to tax and regulatory authorities as "Confidential". The Insurance
Company shall obtain from any such Authorized Third Party a written agreement
substantially similar to the provisions of this Section 8.9, to maintain the
confidentiality of all Confidential Information. The Insurance Company shall be
responsible for disclosure of Confidential Information by any Authorized Third
Party in violation of this Section 8.9. In the event the Insurance Company is
served with a subpoena or court order
<PAGE>   22
                                       20


compelling disclosure by the Insurance Company of Confidential Information, the
Insurance Company shall give written notice thereof to the Insured as soon as
reasonably practicable. The Insured may, at its sole option and expense, seek a
protective order or otherwise legally resist such attempts to compel disclosure.
The Insurance Company shall reasonably cooperate with the Insured during the
process of seeking such protective order or otherwise legally resisting such
attempts to compel disclosure.

8.10.    NOTICE

         (A)      Any notice or other information required or authorized by this
                  Policy to be given by either party to the other may be given
                  by delivery by hand or by sending it by prepaid certified or
                  registered mail (or equivalent air mail, if international), or
                  by facsimile transmission, as set forth under Item 5 in the
                  Declarations.

         (B)      Either party may change the address for service referred to in
                  Subsection (A) above by sending notice to the other party in
                  the manner provided for by this Section to the last address
                  notified for the purpose of this Section by the other party.

8.11.    CAPTIONS AND CATCHLINES

Captions and catchlines used in this Policy are intended solely as aids to
convenient reference. They shall not be considered part of this Policy nor limit
or otherwise affect its meaning, and no inference as to the meaning or intent of
any provision of this Policy may be drawn from them.

8.12.    RIGHT OF OFFSET

Both the Insured and the Insurance Company shall have, and may exercise, at any
time the right to offset any balance or balances due the other under this
Policy. Except as otherwise agreed by the parties and to the extent provided
for, such offset may only include balances due under this Policy, regardless of
whether such balances are in respect of premiums, or Loss or otherwise, and
regardless of the capacity of any party, under the various agreements involved.

8.13.    SALVAGE, SUBROGATION AND OTHER RECOVERIES

In the event of the payment of any indemnity by the Insurance Company under this
Policy, the Insurance Company shall be subrogated, to the extent of such
payment, to all of the rights of the Insured against any person or entity
legally responsible in damages for the Loss paid by the Insured. The Insurance
Company agrees, upon the Insured's request, to assign such subrogation rights to
the Insured. In the event the Insured enforces such rights, any recovery
effected by the Insured shall serve to reduce Loss under the Policy, after
deducting the costs of such recovery.

8.14.    CHOICE OF LAW

All disputes arising under this Policy shall be governed by and construed in
accordance with the substantive laws of the State of Delaware, without giving
effect to its conflicts of laws principles.
<PAGE>   23
                                       21


8.15.    NO WAIVER

No consent or waiver, express or implied, by any other party to or of any breach
or default by any other party in the performance of its obligations hereunder
shall be construed to be a consent or waiver to or of any other breach or
default in the performance of obligations by such other party hereunder. Failure
on the part of any party to complain of any act or failure to act of any other
party or to declare any other party in default, irrespective of how long such
failure continues, shall not constitute a waiver by such first party of its
rights hereunder.

8.16.    CONSTRUCTION

It is understood and agreed that this Policy is a manuscript policy that has
been negotiated at arm's length and on equal footing as between the Insured and
Insurance Company, and that both parties fully understood and agreed to all the
terms and conditions contained in this Policy. Accordingly, in any dispute
concerning the meaning of this Policy, or any term or condition hereof, such
dispute shall be resolved without reference to the doctrine of contra
proferentem or any related or similar doctrine.

8.17.    REPRESENTATION OF INSURED

The Insured has reviewed the terms, conditions, and significance of this Policy
with the legal and tax counsel and the accountants of its choice, and is
accepting this Policy with full knowledge of its terms, conditions and
significance. In accepting this Policy, the Insured is not relying upon any
representation or warranty by the Insurance Company regarding the legal,
regulatory, tax or accounting implications of this Policy for the Insured or the
suitability (or lack thereof) of this Policy for the Insured.

8.18.    COUNTERPARTS

This Policy 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.

8.19.    CURRENCY

All payments and amounts under this Policy shall be in United States Dollars.

8.20.    TERMS OF POLICY CONFORMED TO STATUTE.

If any of the terms or conditions of this Policy are found to be in conflict
with the local laws or statutes of the State wherein this Policy is issued, the
Policy will be amended by the agreement of both parties hereto so as to conform
with such law or statute. If the parties cannot agree to the changes to be made,
any dispute will be settled in accordance with Section 8.6 of this Policy.

8.21.    TAXATION OF FOREIGN PERSONS.

(A)      In the event that, due to a change in United States law, the rate of
         tax applicable to dividends paid by a United States corporation to a
         Swiss person that is eligible for the benefits of the tax treaty
         currently in effect between the United States and the
<PAGE>   24
                                       22


         Confederation of Switzerland is increased above, or decreased below,
         fifteen percent (15%), the Reduction of Notional Investment Income for
         Notional Taxation, as defined in this Policy, shall be determined by
         substituting the rate of tax applicable to Swiss holders who own any
         amount of equity of the dividend payer without any minimum level of
         investment for fifteen percent (15%).

(B)      In the event that gains, interest or any other applicable form of
         investment income recognized by non-United States owners of assets held
         in the United States become subject to United States income taxation,
         either by a change in the rules regarding the definition of the
         character or source of income or otherwise, the parties shall agree to
         appropriate modifications of the terms of this Policy.

(C)      For purposes of this Section, a change in United States law shall
         include (i) a change in the Internal Revenue Code and the Income Tax
         Regulations promulgated thereunder and (ii) any amendment, cancellation
         or termination of the tax treaty currently in effect between the United
         States and the Confederation of Switzerland.

8.22.    PREMIUM TAXES

The Insured agrees that it shall pay any additional applicable State tax and any
other related assessments with respect to any additional premium due under this
Policy.

8.23.    DATES AND TIMES

All dates and times contained in this Policy, unless otherwise specified, are
New York, New York time.
<PAGE>   25
                                       23



IN WITNESS WHEREOF, the parties hereto have caused this Policy to be executed by
their duly authorized representatives, effective as of the 31st day of December,
1998.



                                  METROPOLITAN LIFE INSURANCE COMPANY



                                  BY: _______________________________________

                                  Name: _____________________________________

                                  Title: ____________________________________



                                  EUROPEAN REINSURANCE CORPORATION OF AMERICA



                                  BY: _______________________________________

                                  Name: _____________________________________

                                  Title: ____________________________________
<PAGE>   26
                                   SCHEDULE A
                          SCHEDULED UNDERLYING POLICIES


                                       A-1
<PAGE>   27
                                   SCHEDULE B
                                SETTLED POLICIES


                                      B-1
<PAGE>   28
                   ENDORSEMENT NO. 1 TO POLICY NO. 980-01-00,

         A RESTATEMENT OF THE EXCESS ASBESTOS INDEMNITY INSURANCE POLICY

                  ISSUED TO METROPOLITAN LIFE INSURANCE COMPANY

                                       BY

                   EUROPEAN REINSURANCE CORPORATION OF AMERICA


This Endorsement is attached to and forms a part of Policy No. 980-01-00 (the
"Policy"), issued to Metropolitan Life Insurance Company (the "Insured") by
European Reinsurance Corporation of America (the "Insurance Company") and
effective as of December 31, 1998.

For value received, the parties hereby agree that, effective from the inception
of the Policy:

1.       On page 3 of the Policy, Section 2(P)(ii)(c) is hereby amended to read
         in its entirety as follows:

         proof of exposure to asbestos or asbestos containing products (by way
         of interrogatory answer, affidavit (which may be included within the
         release), personnel record, work history sheet or other evidence of
         exposure).

2.       On page 3 of the Policy, Section 2(P)(iv) is hereby amended to read in
         its entirety as follows:

         in settling Asbestos-Related Claims for which the documentation set
         forth in Sections (P)(ii)(a) through (c) above has not all been
         obtained; provided, however, that the cumulative amount of such
         payments included in Loss shall be no greater than 5% of the cumulative
         amount of Insured Payments made subsequent to the Policy Inception Date
         in settling Asbestos-Related Claims for which such documentation has
         been obtained.

3.       On page 5 of the Policy, Section 3.2., entitled "Annual Sublimit", is
         hereby amended to read in its entirety as follows:

         Subject to the Aggregate Limit of Indemnity described in Section 3.1
         above, the maximum amount payable by the Insurance Company at any
         Settlement Date for all Loss in the calendar year immediately prior to
         such Settlement Date ("calendar year(x)"), during the Period of
         Indemnification in respect of Loss under this Policy shall not exceed
         the Insurance Company's Quota Share of the Annual Sublimit for calendar
         year(x). The Annual Sublimit shall be calculated by the Insurance
         Company for calendar year(x) and shall be equal to:

         (1)      the Per Claimant Average Amount for calendar year(x)
                  multiplied by

         (2)      the "Number of Individual Asbestos-Related Claims" for
                  calendar year(x).
<PAGE>   29
         A claimant shall be included in the calculation of the "Number of
         Individual Asbestos-Related Claims" for calendar year(x) when Loss is
         paid to that claimant pursuant to the criteria in Sections 2(P)(ii),
         (iii) and (iv); provided, however, that members of the same family
         without their own independent asbestos-related injury due to their own
         exposure to asbestos shall all be treated for purposes of this Policy
         as a single Asbestos-Related Claim with the primary claim
         notwithstanding the fact that all such individuals may have provided
         separate releases.

         The "Number of Individual Asbestos-Related Claims" for purposes of the
         calculation in the previous paragraph shall be determined by treating
         claims by each individual qualifying claimant as a separate
         Asbestos-Related Claim regardless of whether claims by such claimant
         are part of a group or bulk settlement.

4.       On page 6 of the Policy, Section 4, entitled "Retention", is hereby
         amended to read in its entirety as follows:

         The Retention to be borne by the Insured under this Policy shall equal
         in the aggregate Four Hundred Million Dollars ($400,000,000) plus all
         Loss paid by the Insured on or after the Policy Inception Date and
         prior to the Premium Payment Date.

5.       On page 8 of the Policy, Section 7.3.3. is hereby amended to read in
         its entirety as follows:

         Calculate the "Losses to be paid by the Insurance Company on such
         Settlement Date", which shall equal: (a) the Insurance Company's Quota
         Share of the quantity arrived at by subtracting any remaining Retention
         from the amount determined pursuant to Section 7.3(2); except that (b)
         if the amount determined pursuant to Section 7.3(3)(a) is less than
         zero (0), the "Losses to be paid by the Insurance Company on such
         Settlement Date" shall be deemed to equal zero (0), and if the amount
         determined pursuant to Section 7.3(3)(a) is greater than the remaining
         Aggregate Limit of Indemnity immediately prior to the Settlement Date,
         the "Losses to be paid by the Insurance Company on such Settlement
         Date" shall be deemed to equal the remaining Aggregate Limit of
         Indemnity immediately prior to the Settlement Date.

All parties agree and covenant that this Endorsement shall and does take
precedence over the Policy to the extent that the terms and conditions set forth
in this Endorsement modify the terms and conditions of the Policy. The
undersigned further agree that this Endorsement shall not be altered or modified
while the Policy is in force without the express written consent of all parties.
The undersigned agree and warrant that this Endorsement is a valid and binding
contract which they have the right to make and that the persons signing for them
below are authorized to sign this Endorsement.
<PAGE>   30
AGREED, as of this                   day of June, 1999.


METROPOLITAN LIFE INSURANCE COMPANY


BY:

NAME:

TITLE:



EUROPEAN REINSURANCE CORPORATION OF AMERICA


BY:

NAME:

TITLE: