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                                 PROMISSORY NOTE

US$ 128,000,000                                                    April 4, 2002

         FOR VALUE RECEIVED, PXRE CORPORATION, a corporation organized under the
laws of Delaware (the "Maker"), hereby promises to pay to the order of PXRE
REINSURANCE (BARBADOS) LTD., a Barbados corporation (the "Payee;" Payee, and any
subsequent holder or holders hereof, being hereinafter referred to collectively
as "Holder"), the principal sum of One Hundred Twenty Eight Million Dollars (US
$128,000,000.00) (the "Loan") in lawful money of the United States of America
without grace, at the office of Payee at Chelston Park Building No. 2, Collymore
Rock, St. Michael, Barbados, or at such other place as Holder may designate to
Maker in writing from time to time.

         Interest will accrue on the unpaid principal amount of this Note during
the period from and including the date hereof to (but excluding) the date on
which the outstanding principal amount of this Note is paid in full at a rate
per annum equal to 7.03% based on a 360-day year and charged on the basis of
actual days elapsed, from the date hereof until payment in full.

         Interest shall be payable semi-annually, in arrears, on the outstanding
principal amount on June 30 and December 31 of each annual period during which
the Loan remains outstanding, provided, however, that the first interest payment
shall not be due and payable until December 31, 2002.

         Subject to acceleration upon the occurrence of an Event of Default (as
defined below), the Loan shall be re-paid in full on April 30, 2012.

         If this Promissory Note or any payment required to be made hereunder
becomes due and payable on a day which is not a Business Day (which for purposes
of this Promissory Note means any day other than a Saturday or Sunday or a day
on which commercial banks are not required or authorized to be closed in the
State of New York) the due date thereof shall be extended until the next
following Business Day and interest shall be payable during such extension at
the rate provided for above.

         The Maker shall have the right, at any time, on not less than ten (10)
days prior written notice to the Payee, to prepay, without penalty, the
outstanding principal amount of this Promissory Note, in whole or in part,
provided that any such prepayment shall be accompanied by payment of all accrued
but unpaid interest on the principal amount of the Loan at the date of such
prepayment.

A.       Representations and Warranties. As an inducement to the Payee
         to make the Loan, the Maker represents and warrants to the Payee as
         follows:

         1.      The Maker is a Delaware corporation. The making and performance
         of this Promissory Note will not (immediately or with the passage of
         time, the giving of notice, or both): (a) violate the certificate of
         incorporation or by-laws of the Maker or violate any laws or result in
         the default under any material contract, agreement or instrument to
         which the Maker is a party or by which the Maker or its property is
         bound; or (b) result in the creation or imposition of any lien upon any
         of the material assets of the Maker.

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         2.       The Maker has the corporate power and authority to enter into
         this Promissory Note and to incur the obligations herein provided for,
         and has taken all necessary corporate action to authorize the
         execution, delivery and performance of this Promissory Note.

         3.       This Promissory Note is the legal, valid and binding
         obligation of the Maker, enforceable in accordance with its terms,
         subject as to enforcement only to applicable bankruptcy, insolvency,
         reorganization and similar loans affecting creditors' rights generally
         and the availability of equitable remedies and public policy
         considerations.

         4.       The Maker is not engaged in, or to the Maker's knowledge,
         threatened with any, legal action or proceeding by or before any court
         or administrative agency which, if adversely determined, would
         materially and adversely affect the financial condition or operations
         of the Maker.

B.       Negative Covenants. Until the Loan is repaid in full, without the prior
         written consent of the Payee, the Maker shall not (except as otherwise
         provided below):

         1.       directly or indirectly declare or make, or incur any liability
         to make, any "dividend" which would cause the Maker to be unable to
         meet its liabilities as they become due in the ordinary course.
         "Dividend" means (x) cash distributions or any other distributions on,
         or in respect of, any class of capital stock of the Maker, except for
         distributions made solely in shares of stock of the same class and (y)
         any and all funds, cash or other payments made in respect of the
         redemption, repurchase or acquisition of such stock;

         2.        incur, directly or indirectly, any indebtedness, obligations
         or liabilities, including guarantees and capital lease obligations
         (collectively, "Indebtedness") except:

                  a. Indebtedness arising out of this Promissory Note;

                  b. current liabilities for taxes and assessments incurred in
                  the ordinary course of business;

                  c. Indebtedness in respect of current accounts payable or
                  Indebtedness accrued and incurred in the ordinary course of
                  business (other than for borrowed funds or purchase money
                  obligations), provided that all such Indebtedness shall be
                  promptly paid and discharged when due or in conformity with
                  customary trade terms;

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                  d. Indebtedness that ranks subordinate or pari passu, without
                  preference or priority, to the Indebtedness evidenced by this
                  Promissory Note;

         3.       amend its Certificate of Incorporation;

         4.       create, incur, permit or suffer to exist any lien, mortgage,
         security interest, pledge, conditional sales agreement or other
         encumbrance ("Liens") upon any of its property or assets, now owned or
         hereafter acquired, except for "Permitted Liens." "Permitted Liens"
         means:

                  a. Liens for taxes not yet due and payable or which are being
                  contested in good faith by proper proceedings promptly
                  instituted and diligently conducted;

                  b. carriers', warehousemen, mechanics, materialmen, repairmen
                  or other like Liens arising in the ordinary course of
                  business;

                  c. easements, rights of way, restrictions and other similar
                  encumbrances incurred in the ordinary course of business which
                  do not in any case materially detract from the value of the
                  property subject thereto or interfere with the ordinary
                  conduct of the business;

                  d. purchase money Liens securing Indebtedness, provided such
                  Liens shall encumber only the asset acquired with the proceeds
                  of such indebtedness and solely for the amount thereof; or

         5.       change its method of accounting except as required by
         generally accepted accounting principles.

C.       Affirmative Covenants. Until the Loan is repaid in full, the Maker
         agrees:

         1.       to take all necessary steps to preserve the Maker's corporate
                  existence and maintain all rights, privileges, franchises and
                  licenses necessary or desirable in the normal conduct of its
                  business. The Maker will comply in all material respects with
                  all present and future laws, ordinances, statutes, rules,
                  regulations, orders, injunctions, writs or decrees of any
                  government or political subdivision or agency thereof or any
                  court or similar entity applicable to it in the operation of
                  its business (collectively, the "Laws") and all material
                  agreements to which it is subject. The Maker will operate its
                  business only in the ordinary course.

D.       Event of Default. Any of the following shall constitute an "Event of
         Default" under this Promissory Note:

         1.       Except as otherwise permitted by the terms hereof, the Maker
                  fails to pay any installment of principal or interest on the
                  Promissory Note on the respective dates therefore and such
                  default continues for 30 days after notice of default from the
                  Payee;

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         2.       The Maker defaults in the performance of any other terms or
                  conditions of this Promissory Note or in the performance of
                  any material covenants hereunder, and the default continues
                  for 30 days after notice of default from the Payee;

         3.       Any representation or warranty by the Maker contained herein
                  or any other agreement delivered in connection herewith or
                  therewith shall prove to be inaccurate in any material
                  respect; or

         4.       The Maker becomes insolvent or admits in writing its inability
                  to pay its debts as they mature; or applies for, consents to,
                  or acquiesces in the appointment of a trustee or receiver for
                  any of their respective property; or in the absence of an
                  application, consent, or acquiescence, a trustee or receiver
                  is appointed for either of them or a substantial part of
                  either entity's property and is not discharged within 90 days;
                  or otherwise commits an act of bankruptcy or insolvency law,
                  or any dissolution or liquidation proceeding, is instituted by
                  or against either of them and if instituted is consented to or
                  acquiesced in by either of them or remains for 90 days
                  undismissed.

                  If an Event of Default shall occur and be continuing, the
                  Payee may (a) declare this Promissory Note to be immediately
                  due and payable in full, by telefax or by notice mailed or
                  delivered to the Maker at its address provided to the Payee
                  from time to time, whereupon the same shall become forthwith
                  due and payable without presentment, demand, protest and
                  notice of dishonor of this Promissory Note or any other notice
                  of any kind, all of which are hereby expressly waived, and (b)
                  proceed to protect and enforce its rights hereunder, by action
                  at law, suit in equity or otherwise. In the event of any such
                  declaration, the Maker agrees to pay the Payee on demand from
                  time to time such amounts as shall cover costs and expenses of
                  collection of this Promissory Note including, without
                  limitation, the fees and expenses of attorneys for the Payee
                  advising the Payee with respect to its rights or collection of
                  this Promissory Note.

E.       Subordination. Notwithstanding anything contained herein to the
         contrary, the Maker's obligations under this Note are subordinate in
         right and time to Maker's obligations under that certain First Amended
         and Restated Credit Agreement, dated as of August 31, 1999, by and
         among PXRE Corporation (as Borrower), PXRE Barbados (Reinsurance) Ltd.
         and PXRE Group Ltd. (as Guarantors), certain banks and financial
         institutions listed on Schedule 1.1 thereof (collectively, as Lenders),
         and First Union National Bank (as Agent) as amended from time to time.


         Venue for any action at law, suit in equity or other proceeding brought
in connection with this Promissory Note shall be in the federal courts of the
United States of America in the Southern District of New York, or in the courts
of the State of New York in New York City. The Maker hereby submits, to the
fullest extent permitted by applicable law, to the nonexclusive jurisdiction of
such courts for the purpose of any such action or proceeding. The foregoing
provisions of this subsection shall not be construed to limit the right of any
party hereto to serve any such writ, process or summons in any manner permitted
by applicable law. Each party further agrees that a final judgment or order in
any such action, suit or proceeding may be enforced against such party in any
other jurisdiction by suit on such judgment or order in such other manner as may
be permitted by applicable law.

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THE MAKER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY ANY PARTY HERETO OR BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS PROMISSORY NOTE.

This Promissory Note shall be governed by and construed in accordance with the
laws of the State of New York without regard to the conflicts-of-laws provisions
thereof.

All payments to be made by the Maker hereunder shall be made without set-off,
deduction or counterclaim of any kind whatsoever.

All payments to be made by the Maker hereunder shall be made free and clear of
and without deduction for or on account of any present or future taxes or duties
of any nature now or hereafter imposed (other than withholding taxes), unless
the Maker is compelled by law to make payment subject to any such taxes.

IN WITNESS WHEREOF, the Maker has executed and delivered this Promissory Note as
of the date and year first above written.

PXRE CORPORATION


By: /s/ Bruce J. Byrnes
    --------------------------------
Name:  Bruce J. Byrnes
Its:   General Counsel & Secretary


Acknowledged:


PXRE REINSURANCE (BARBADOS) LTD.

By: /s/ Martin Hole
    --------------------------------
Name:  Martin Hole
Its:   Vice President


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