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                                                                    EXHIBIT 10.3

                          INVESTMENT ADVISORY AGREEMENT


         AGREEMENT, made as of the 27th day of January, 1998, by and between
ORACLE REINSURANCE COMPANY LTD., a Bermuda composite insurer (the "Company"),
and ACORN ADVISORY CAPITAL L.P., a Delaware limited partnership (the "Investment
Advisor").

                                   WITNESSETH
         WHEREAS, the Company desires to retain the Investment Advisor to render
investment management services to the Company, and the Investment Advisor is
willing to render such services.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:

1.       APPOINTMENT OF INVESTMENT ADVISOR

         The Company hereby appoints the Investment Advisor to act as investment
manager to exercise exclusively investment decision-making authority on behalf
of the Company, for the period and on the terms set forth in this Agreement. The
Investment Advisor accepts such appointment and agrees to render the services
set forth herein for the compensation provided herein.

2.       DUTIES OF INVESTMENT ADVISOR

         The Investment Advisor shall invest and manage the assets (including
cash) of the Company through investments made directly by the Investment Advisor
and/or through the allocation of the Company's assets by the Investment Advisor
among a number of money managers (the "Money Managers"). The Investment Advisor
and such Money Managers shall have discretion to employ various trading
strategies and techniques, through discretionary account management or in
investment vehicles managed by such Money Managers.

         In connection with its obligations hereunder and without limiting the
generality of the foregoing, the Investment Advisor will have the authority for
and in the name of the Company, to:

                  (a) subject to Section 4 hereof, purchase, sell (including
         short sales) and trade in, on margin or otherwise, listed and unlisted
         U.S. and non-U.S. capital stock, warrants, bonds, notes, debentures,
         government obligations, partnership interests and similar financial
         instruments, repurchase and resale agreements, futures and forward
         contracts, commodities, currencies, options, swap agreements and other
         securities of whatever kind or nature (collectively, "Securities");

                  (b) purchase, hold, sell, transfer, exchange, mortgage,
         pledge, hypothecate and otherwise act to acquire and dispose of and
         exercise all rights, powers, privileges, and other incidents of
         ownership or possession with respect to Securities held or owned by the
         Company;


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                  (c) purchase Securities for investment and to make such
         representations to the seller of such Securities, and to other persons,
         that the Investment Advisor may deem proper in such circumstances,
         including the representation that such Securities are purchased by the
         Company for investment and not with a view to their sale or other
         disposition;

                  (d) borrow or raise monies from time to time without limit as
         to amount or manner and time of repayment, and to issue, accept,
         endorse and execute promissory notes or other evidences of
         indebtedness, and to secure the payment of any such borrowings, and of
         the interest thereon, by mortgage upon or pledge, conveyance or
         assignment in trust of the whole or any part of the properties of the
         Company whether at the time owned or thereafter required;

                  (e) lend any of the properties which are from time to time
         owned or held by the Company;

                  (f) issue orders and directions to any bank at which the
         Company maintains a general account with respect to the disposition and
         application of monies or Securities of the Company from time to time
         held by such bank;

                  (g) open, maintain, conduct and close accounts, including
         margin accounts, with any broker, dealer or investment concern, to
         issue orders and directions to any broker, dealer or investment concern
         at which the Company maintains an account with respect to the
         disposition and application of monies or Securities of the Company from
         time to time held by such broker, dealer or investment concern, and to
         incur on behalf of the Company, brokerage commissions which may be in
         excess of the lowest rates available and which are paid to brokers who
         execute transactions for the account of the Company and who provide
         brokerage services (e.g., research ideas, investment strategies and
         clearance settlement and custodial services), provided that in
         employing such brokers, the "best execution" is obtained, taking into
         account the research and execution capabilities of the brokers and
         their financial stability and reputation, and the Investment Advisor
         does not pay a rate of commissions in excess of what is competitively
         available from comparable brokerage firms;

                  (h) select the Money Managers who will be used to invest the
         assets of the Company, and determine the amount of the Company's assets
         to be allocated to each Money Manager, it being understood that the
         Investment Advisor itself shall not be considered a Money Manager
         hereunder; and

                  (i) negotiate on behalf of the Company the compensation to be
         paid to each Money manager on a case by case basis, with such
         compensation being based on the assets of the Company allocated to such
         Money Manager and/or a percentage of profits earned, to enter into
         investment management agreements or similar arrangements and to agree
         to indemnification provisions in such investment management or other
         similar agreements (the form of which will be subject to approval by
         the Board of Directors of the Company) with such Money Managers on
         behalf of the Company and to delegate to such Money Managers

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         the authority of the Investment Advisor to invest and manage the
         Company's assets as described herein.

3.       INVESTMENT ADVISOR PERFORMANCE

         The Investment Advisor shall use its best judgment in the performance
of its duties under this Agreement, and in doing so, it shall act in conformity
with the Memorandum of Association of the Company.

4.       LIMITATIONS ON INVESTMENT ADVISOR ACTIVITIES

         Notwithstanding anything in this Agreement to the contrary, the
Investment Advisor hereby agrees that:

                  (a) it will perform its duties hereunder in such a manner that
         the Company will be treated as an investor or trader in securities for
         its own account and not as a dealer in securities. For this purpose,
         "dealer" means a merchant of securities who in the ordinary course of
         business is engaged as a merchant in purchasing securities and selling
         them to customers with a view to the gains and profits that may be
         derived therefrom:

                  (b) it will not invest any of the Company's assets in any
         entity that is treated for U.S. federal income tax purposes both (i) as
         a partnership or trust, and (ii) as being engaged in a trade or
         business within the United States within the meaning of Section 864(b)
         of the Internal Revenue Code of 1986, as amended; and

                  (c) if it delegates any of its responsibilities hereunder to
         any other person (including any Money Manager), it will require any
         such person to agree to comply with the provisions of this Section 4.

5.       REPORTS

         The Investment Advisor shall render to the Company such periodic or
special reports as may reasonably be requested by the Company.

6.       REMUNERATION

                  (a) For the services provided pursuant to this Agreement, the
         Company shall pay to the Investment Advisor as full compensation
         therefor a quarterly fee, payable at the beginning of each calendar
         quarter, equal to 0.125% of the Company's assets managed by the
         Investment Advisor as of the first business day of each such quarter
         (it being understood that the fee payable in respect of the period
         between the date hereof and the end of the current calendar quarter
         shall be pro rated on the basis of the number of days during such
         period). The Investment Advisor's fee shall be paid to the Investment
         Advisor within 10 days of the computation of the Company's assets
         managed by the Investment Advisor.

                  (b) In the event that any Money Manager is affiliated with the
         Investment Advisor, any compensation received by the Investment Advisor
         or its affiliates in connection with

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         amounts invested with such affiliated Money Manager shall be waived or
         paid over by the Investment Advisor to the Company. For purposes of
         this paragraph, "affiliated with" shall mean, with respect to one
         entity, an entity which either controls, is controlled by or is under
         common control with such entity.

                  (c) The Investment Advisor hereby waives its remuneration for
         a period of two years from the date of this Agreement. The Investment
         Advisor has the right to defer payment of its remuneration until such
         time as the Investment Advisor notifies the Company to make payment.
         The amount of the fees which the Investment Advisor elects to defer
         will be invested by the Company in the same manner as the Company's
         other assets. Thus, the investment Advisor will effectively participate
         in the investment performance of the Company to the extent it elects to
         defer its fees.

7.       EXPENSES

                  (a) During the term of this Agreement, except as provided in
         Section 7(b), the Investment Advisor shall bear its own expenses in
         connection with its activities under this Agreement (including without
         limitation the compensation of all its partners and employees, rent and
         utility expenses associated with its facilities and costs and expenses
         incurred by it in conjunction with the identification, selection and
         monitoring of the Money Managers).

                  (b) The Company will pay any brokerage commissions, custodial
         fees and other expenses in connection with the investments made on
         behalf of the Company, any fees payable to the Investment Advisor and
         any fees, costs and expenses payable to the Money Managers. The Company
         shall also bear full responsibility for, other operations and expenses
         not related to functions assumed by the Investment Advisor hereunder.

8.                LIABILITY AND INDEMNIFICATION OF INVESTMENT ADVISOR

                  (a) Neither the Investment Advisor nor any of its employees,
         agents and other representatives, nor its general partner and limited
         partners, nor any of their officers, directors, shareholders,
         employees, agents and other representatives (each an "Indemnified
         Person") shall be liable to the Company (i) for mistakes of judgment or
         for action or inaction or for all costs, expenses or losses due to such
         mistakes, action or inaction so long as said person acted honestly and
         in good faith and reasonably believed that his conduct was in the best
         interest of the Company, or (ii) for its costs, expenses or losses due
         to the negligence, dishonesty or bad faith of any broker or agent of
         the Company selected, engaged or retained by the Investment Advisor or
         an Indemnified Person, provided that the Indemnified Person exercised
         reasonable care in selecting, engaging or retaining such broker or
         agent. The Indemnified Person may consult with counsel and accountants
         in respect of Company affairs and be fully protected and justified in
         any action or inaction which is taken in accordance with the advice or
         opinion of such counsel or accountants, provided that they shall have
         been selected with reasonable care. Notwithstanding any of the
         foregoing to the contrary, the provisions of this Section 8(a) shall
         not be construed to relieve (or attempt to relieve) the Indemnified
         Person of any liability, to the extent (but only to the extent) that
         such liability

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         may not be waived, modified or limited under applicable law, but shall
         be construed so as to effectuate the provisions of this Section 8(a) to
         the fullest extent permitted by law.

                  (b) The Company shall indemnify and hold harmless each
         Indemnified Person, in the absence of bad faith, willful misconduct or
         gross negligence, for all costs, losses, damages, expenses,
         liabilities, judgments, fines, amounts paid in settlement and
         reasonable expenses (including attorney's fees incurred by the
         Indemnified Person as the result of any action, suit or proceeding
         against the Indemnified Person) incurred in connection with or arising
         out of, directly or indirectly, the performance by the Investment
         Advisor of its obligations and duties under this Agreement. The Company
         shall advance to any Indemnified Person reasonable attorney's fees and
         other costs and expenses incurred in connection with the defense of any
         action or proceeding arising out of such conduct. In the event that
         such an advance is made by the Company, the Indemnified Person shall
         agree to reimburse the Company for such fees, costs and expenses to the
         extent that he, she or it was not entitled to indemnification under
         this Section 8.

9.       TERM AND TERMINATION

         This Agreement shall become effective on the date hereof and shall
remain in full force and effect until December 31, 1998 and shall thereafter be
automatically renewed for successive two-year terms, unless terminated with 60
days' written notice given by the Company or the Investment Advisor prior to the
end of the term then in effect. This Agreement shall not be modified except in
writing, nor assigned by either party without the consent of the other party.

10.      INDEPENDENT CONTRACTOR STATUS

         The Investment Advisor shall for all purposes herein be deemed to be an
independent contractor and shall have no authority except as otherwise expressly
provided herein, to act for or represent the Company in any way or otherwise be
deemed to be an agent of the Company.

11.      NON-EXCLUSIVITY

         Nothing in this Agreement shall limit or restrict the right of the
Investment Advisor, its employees or its general or limited partners, or any of
their shareholders, directors, officers, employees, agents or other
representatives to engage in any other business or to devote his, her or its
time and attention in part to any other business. The Investment Advisor, its
employees, its general or limited partners, or any of their shareholders,
directors, officers, employees, agents or other representatives may render
services similar to those described in this Agreement for other individuals or
entities, and shall not, by reason of engaging in other businesses or rendering
services for others, be deemed to be acting in conflict with the interests of
the Company. The Investment Advisor, its employees or its general or limited
partners (and their respective shareholders, directors, officers and employees)
may be, directly or indirectly, shareholders of the Company, but shall not be
deemed thereby to have interests which are in conflict with the interests of the
Company.

12.      NOTICES
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         Notices of any kind to be given to the Investment Advisor by the
Company shall be in writing and shall be duly given if mailed or delivered to
the Investment Advisor at 650 Madison Avenue, Suite 2600, New York, New York
10022, Attention: Robert Rosenkranz, or at such other address or to such other
individuals as shall be specified by the Investment Advisor to the Company in
accordance with this paragraph 12. Notices of any kind to be given to the
Company by the Investment Advisor shall be in writing and shall be duly given if
mailed or delivered to the Company at Chevron House, Church Street, Hamilton HM
11 Bermuda, Attention: Secretary, or at such other address or to such other
individual as shall be specified by the Company to the Investment Advisor in
accordance with this paragraph 12.

13.      GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflict of laws
provisions thereof.

14.      CONFIDENTIALITY

         All investment advice furnished by the Investment Advisor to the
Company shall be treated as confidential and shall not be disclosed to third
parties by the Company except as required by law.

15.      COUNTERPARTS

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

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date hereinabove written.

                                    ORACLE REINSURANCE COMPANY LTD.


                                    By   ________________________________
                                    Name:
                                    Title:


                                     ACORN ADVISORY CAPITAL L.P.


                                     By       ________________________________
                                     Name:
                                     Title: